Exhibit 10.4

 

UPON RECORDING, RETURN TO:

Texans Commercial Capital, LLC

777 East Campbell Road, Suite 650

Richardson, Texas  75081

Attention:  Linda Robertson

THIS INSTRUMENT SHALL ALSO

CONSTITUTE A FIXTURE FILING

DEED OF TRUST, SECURITY AGREEMENT, FINANCING
STATEMENT, AND ASSIGNMENT OF RENTAL

THE STATE OF COLORADO

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§

KNOW ALL PERSONS BY THESE PRESENTS:

COUNTY OF SAN MIGUEL

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THIS DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT, AND ASSIGNMENT OF
RENTAL is executed on the date of acknowledgment to be effective as of September
29, 2006, by BEHRINGER HARVARD MOUNTAIN VILLAGE, LLC, a Colorado limited
liability company, whose address is 15601 Dallas Parkway, Suite 600, Addison,
Texas 75001 (“Grantor”), to the Public Trustee of San Miguel County, Colorado
(“Trustee”), for the benefit of TEXANS COMMERCIAL CAPITAL, LLC, a Texas limited
liability company (“Beneficiary”), whose address is 777 E. Campbell Road, Suite
650, Richardson, Texas 75081.

ARTICLE I

DEFINITIONS

Section 1.1.            As used herein, the following terms shall have the
definitions assigned to them as follows:

“Beneficiary” has the meaning assigned to it in the preamble hereof.

“Code” means the Uniform Commercial Code as adopted in the state of Colorado

“Collateral” means all of Grantor’s right, title, and interest, now owned or
hereafter acquired, in and to the following described properties and interests:

(1)           All portions of the Personal Property which are either fixtures or
personal property, tangible or intangible; and

(2)           All building materials, equipment, machinery and other items of
personal property of any kind or character now or hereafter related to, situated
upon or used, or acquired for use, upon or in connection with any part of the
Real Estate; and

(3)           All revenues, receipts, income, accounts, accounts receivable and
other receivables arising under, out of, in connection with or related to the
Real Estate and including, without

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limitation, revenues, receipts, income, receivables and accounts relating to or
arising from rentals and rent equivalent income and time share income; and

(4)           All insurance, accounts, inventory, instruments, chattel paper,
documents, consumer goods, insurance proceeds, Leases, contract rights and
general intangibles now, or hereafter related to, any of the Real Estate,
including, without limitation, the following:

(A)          All contracts now or hereafter entered into by and between Grantor,
as owner, and any contractor, or any other party, as well as all right, title,
and interest of Grantor in, to, and under any subcontracts, providing for the
construction (original, restorative or otherwise) of any of the Improvements,
and of any other buildings, structures or improvements to, or on, the Real
Estate (or any part thereof), or the furnishing of any materials, supplies,
equipment, or labor in connection with any such construction;

(B)           All of the plans, specifications, and drawings (including, without
limitation, plot plans, foundation plans, utility facilities plans, floor plans,
elevations plans, framing plans, cross-sections of walls plans, mechanical
plans, electrical plans, architectural and engineering plans and specifications,
and architectural and engineering studies and analyses) heretofore or hereafter
prepared by any architect or engineer with respect to any of the Real Estate;

(C)           All agreements now or hereafter entered into with any party with
respect to architectural, engineering, management, brokerage, promotional,
marketing, or consulting services rendered or to be rendered, with respect to
the planning, design, inspection, or supervision of the construction,
development, management, marketing, promotion, leasing, operation, or sale of
any of the Real Estate and including, without limitation, the Approved
Management Agreement;

(D)          Any completion bonds, performance bonds, labor and material payment
bonds, and any other bonds (and the proceeds therefrom) relating to any of the
Real Estate or to any contract providing for construction of any of the
Improvements or any other buildings, structures, or improvements to, or on, any
of the Real Estate;

(E)           All rights or awards due to Grantor arising out of any eminent
domain proceedings for the taking or for loss of value of any of the Real
Estate;

(F)           All Rentals;

(G)           All of Grantor’s right, title and interest in and to all
trademarks, trade names, or symbols under which any of the Real Estate is
operated or the business of Grantor at the Real Estate is conducted and all
agreements now or hereafter entered into by Grantor with respect thereto;

(H)          All revenues, receipts, income, accounts, accounts receivable and
other receivables arising out of the leasing or operation of, or the business
conducted at or in relation to, any of the Real Estate;

(I)            All monetary deposits which Grantor has been, or may be, required
to give to any public or private utility with respect to utility services
furnished, or to be furnished, to the Real Estate;

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(J)            All rights to payment from any consumer credit/charge card
organization or entity (such as or similar to the organizations or entities
which sponsor and administer the American Express, Carte Blanche, Diner’s Club,
Visa, the Discover Card and Mastercard cards);

(K)          All contracts of sale and options relating to the disposition of
any of the Real Estate;

(L)           All products and proceeds arising by virtue of any transaction
related to the disposition of any of the Mortgaged Property;

(M)         All deposits of cash, securities, or other property which may be
held at any time, and from time to time, by Grantor to secure the performance by
each Lessee of such Lessee’s covenants, agreements, and obligations under any
Lease;

(N)          To the extent assignable, all permits, licenses (including, without
limitation, liquor licenses), franchises, certificates, and other rights and
privileges obtained by Grantor in connection with the Mortgaged Property;

(O)          The balance of every deposit account (now or hereafter existing) of
Grantor with Beneficiary (or any agent, affiliate, or subsidiary of Beneficiary)
and any other claim of Grantor against Beneficiary (now or hereafter existing)
and all money, instruments, securities, documents, chattel paper, credits,
demands, and any other property, rights, or interests of Grantor which at any
time shall come into the possession, custody, or control of Beneficiary (or any
agent, affiliate, or subsidiary of Beneficiary);

(P)           All proceeds payable or to be payable under each policy of
insurance relating to the Real Estate and/or the Personal Property;

(Q)          the Declarant Rights; and

(R)           All books, records, computer programs, tapes, discs, computer
software and other like records and information evidencing, securing, relating
to or concerning the Real Estate, the Personal Property, and the property
described in clauses (1), (2), (3) and (4) (A) through (Q), above (but excluding
Grantor’s income tax returns and similar financial records pertaining to
Grantor);

(5)           All leases, licenses, security agreements, and all other contracts
and agreements governing or relating to Grantor’s ownership, use, operation or
sale of any of the Mortgaged Property, to the extent not otherwise included; and

(6)           All payments under insurance (whether or not Beneficiary is the
loss payee thereof) or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing, to the
extent not otherwise included; and

(7)           All replacements and substitutes for, all products and proceeds
of, and all accessions to, the foregoing.

“Declarant Rights” means all rights of Grantor as Declarant pursuant to any
Condominium Declaration (as defined in Section 6.1).

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“Deed of Trust” means this Deed of Trust, Security Agreement, Financing
Statement and Assignment of Rental, including all exhibits attached hereto, as
the same may, at any time and from time to time, be renewed, extended, modified
and/or increased.

“Environmental Indemnity Agreement” means the Environmental Indemnity Agreement
of even date herewith, executed by Grantor and Guarantors, for the benefit of
Beneficiary, as it may from time to time be amended, supplemented or restated.

“Event of Default” has the meaning set forth in Section 3.1 hereof.

“Governmental Authority” means any governmental authority, the United States of
America, any state of the United States of America, and any subdivision of any
of the foregoing, and any agency, department, commission, board, authority or
instrumentality, bureau or court having jurisdiction over the Mortgaged
Property, or over Grantor or any occupant or user of the Mortgaged Property, or
any of their respective businesses, operations, assets or properties.

“Grantor” has the meaning assigned to it in the preamble hereof.

“Grantor’s Successors” means each and all of the heirs, executors,
administrators, legal representatives, successors, and assigns of Grantor, both
immediate and remote.

“Improvements” means the Residential Condominium (as defined in the Loan
Agreement) and the improvements and amenities associated therewith and all
buildings and improvements now or hereafter situated on or in connection with
the Land.

“Land” means all of that certain tract of real property located in San Miguel
County, Colorado, more particularly described upon Exhibit A attached hereto,
together with all rights, privileges, tenements, hereditaments, rights-of-way,
easements, appendages, projections, and appurtenances thereto.

“Lease” means any ground lease, space lease, sublease or other agreement (oral
or written) under the terms of which any person other than Grantor has or
acquires any right to occupy, use, or manage the Mortgaged Property, or any part
thereof, or interest therein.

“Lessee” means each lessee, sublessee, tenant, guest or other Person having the
right to occupy, use, or manage the Mortgaged Property, or any part thereof,
under a Lease.

“Loan” means the indebtedness and obligations of Grantor evidenced by the Loan
Documents.

“Loan Agreement” means that certain Loan Agreement dated of even date herewith
between Grantor and Beneficiary, as it may, at any time and from time to time,
be amended, supplemented or restated.

“Loan Documents” means the Note, the Loan Agreement, the Environmental Indemnity
Agreement, and this Deed of Trust, together with all loan agreements, security
agreements, deeds of trust, collateral pledge agreements, assignments,
guaranties or contracts evidencing, or securing the Secured Indebtedness, as
they may, at any time and from time to time, be amended, renewed, extended,
increased, supplemented and/or restated.

“Mortgaged Property” means the Land, Improvements, Personal Property and the
Collateral, collectively.

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“Note” means that certain promissory note dated of even date herewith, executed
by Grantor and payable to the order of Beneficiary, in the original principal
amount of Thirty-One Million Six Hundred Fifty Thousand and no/100 Dollars
($31,650,000.00), bearing interest as therein specified, containing a clause
requiring the payment of reasonable attorneys’ fees, and providing that the
principal balance of such note shall be due and payable on October 1, 2009 (or
October 1, 2010 if extended as provided in the Loan Agreement) as it may, at any
time and from time to time, be renewed, extended, modified, increased,
supplemented or restated.

“Permitted Exceptions” means those items shown upon Exhibit B attached hereto.

“Personal Property” means all fixtures and building materials and, to the
extent, if any, owned by Grantor, machinery, equipment, furniture, furnishings,
inventory, and personal property, and all renewals, replacements and
substitutions therefor and additions thereto, in which Grantor now has, or at
any time hereafter acquires, an interest, and which now, or at any time
hereafter, are situated on the Land or the Improvements.

“Real Estate” means the Land, the Improvements, the Personal Property, the
Leases, the Rental, the Declarant Rights, and all other estates, easements,
licenses, interests, rights, titles, powers and privileges of every kind and
character which Grantor now has or at any time hereafter acquires, in and to the
Land, the Improvements, the Personal Property, and the proceeds of any and all
insurance covering the Land, the Improvements, the Leases, the Rental or the
Personal Property.

“Rental” means all rents, issues, profits, royalties, bonuses, revenue,
receipts, income, accounts, accounts receivable and other receivables, and other
benefits derived from the Mortgaged Property or arising from the use or
enjoyment of any portion thereof or from any Lease and including, without
limitation, all revenues, receipts, income, receivables and accounts relating to
or arising from rentals and rent equivalent income; all liquidated damages
following defaults under any Lease; all proceeds payable under any policy of
insurance covering loss of rents, issues, profits, royalties, bonuses, revenue,
receipts, income, accounts, accounts receivable and other receivables, and other
benefits; and any and all rights which Grantor may have against any Lessee or
against any other Person under or in connection with any Lease.

“Secured Indebtedness” means:

(a)           All indebtedness, liabilities, indemnities and obligations arising
under the Note, the Loan Agreement, this Deed of Trust, and the other Loan
Documents;

(b)           All loans and advances which Beneficiary may hereafter make to or
for the benefit of Grantor in connection with the Loan or the Mortgaged
Property;

(c)           All other and additional indebtedness, liabilities and obligations
of every kind and character, of Grantor now or hereafter existing in favor of
Beneficiary in connection with the Loan or the Mortgaged Property, regardless of
whether they are direct, indirect, primary, secondary, joint, several, joint and
several, liquidated, unliquidated, fixed or contingent; and

(d)           Any and all renewals, increases, extensions, modifications,
rearrangements, or restatements of and supplements to all or any part of the
loans, advances, indebtednesses, liabilities, and obligations described or
referred to in subparagraphs (a) through (c) above, together with all costs,
expenses and reasonable attorneys’ fees incurred in connection with the
enforcement or collection thereof.

“Trustee” has the meaning assigned to it in the preamble.

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Section 1.2.            All capitalized terms not otherwise defined herein shall
have the meaning assigned to them in the Loan Agreement.

ARTICLE II

GRANT

Section 2.1.

(a)           For good and valuable consideration, including the indebtedness
evidenced by the Note, the Secured Indebtedness and the trust hereinafter
described, the receipt and legal sufficiency of which are hereby expressly
acknowledged by all parties, Grantor does hereby GRANT, BARGAIN, SELL, TRANSFER,
ASSIGN, AND CONVEY unto Trustee IN TRUST FOREVER, WITH POWER OF SALE for the
benefit and security of Beneficiary, the Mortgaged Property, subject only to the
Permitted Exceptions.

TO HAVE AND TO HOLD the Mortgaged Property, together with all and singular the
rights, hereditaments, and appurtenances in anywise appertaining or belonging
thereto, unto Trustee and Trustee’s successors or substitutes in this trust, and
Trustee’s and its or his successors and assigns, in trust, and for the uses and
purposes hereinafter set forth, forever.

(b)           This Deed of Trust shall also constitute a security agreement with
respect to, and Grantor hereby grants to Beneficiary a security interest in, the
Collateral.  This Deed of Trust shall constitute a “fixture filing” for purposes
of Chapter 9 of the Code.  Portions of the Collateral are or may become
fixtures.  Information concerning the security interests herein granted may be
obtained at the addresses stated in the introductory paragraph of this Deed of
Trust.

(c)           To the extent that any of the Collateral is not subject to the
Uniform Commercial Code of the state or states where it is situated, Grantor
hereby assigns to Beneficiary all of Grantor’s right, title, and interest in and
to the Collateral to secure the Secured Indebtedness, together with the right of
set-off with regard to such Collateral (or any part hereof).  Release of the
lien of this Deed of Trust shall automatically terminate this assignment.

Section 2.2.            Grantor, for Grantor and Grantor’s Successors, hereby
agrees to warrant and forever defend, all and singular, title to the Mortgaged
Property unto Trustee, and Trustee’s successors or substitutes in this trust,
forever, against every person whomsoever lawfully claiming, or to claim, the
same or any part thereof, subject, however, to the Permitted Exceptions.

Section 2.3.            This Deed of Trust, and all rights, remedies, powers,
privileges, and benefits, and all titles, interests, liens, and security
interests created hereby, or arising by virtue hereof, are given to secure
payment and performance of the Secured Indebtedness.

Section 2.4.            A carbon, photographic, or other reproduction of this
Deed of Trust, or any financing statement relating to this Deed of Trust, shall
be sufficient as a financing statement.

ARTICLE III

RESPECTING DEFAULTS AND REMEDIES OF BENEFICIARY

Section 3.1.            The term “Event of Default” shall mean the occurrence of
an Event of Default, as such term is defined in the Loan Agreement.

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Section 3.2.            Upon the occurrence of an Event of Default, Beneficiary
may, at Beneficiary’s option, do any one or more of the following:

(a)           If Grantor has failed to keep or perform any covenant whatsoever
contained in this Deed of Trust or other Loan Documents, Beneficiary may, but
shall not be obligated to any person to, 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 a part of the Secured
Indebtedness, and Grantor promises, upon demand, to pay to Beneficiary, at the
place where the Note is payable, or at such other place as Beneficiary may
direct by written notice, all sums so advanced or paid by Beneficiary, with
interest at the Default Rate (as defined in the Loan Agreement) from the date
when paid or incurred by Beneficiary.  No such payment by Beneficiary shall
constitute a waiver of any Event of Default.  In addition to the liens and
security interests hereof, Beneficiary shall be subrogated to all rights,
titles, liens, and security interests securing the payment of any debt, claim,
tax, or assessment for the payment of which Beneficiary may make an advance, or
which Beneficiary may pay.

(b)           Beneficiary may, at its option, declare the Note and all or any
other portion of the remaining Secured Indebtedness to be immediately due and
payable without presentment, demand, protest, notice of protest and non-payment,
or other notice of default, notice of acceleration and intention to accelerate
or other notice of any kind, all of which are expressly waived by Grantor;
provided, however, that if any Event of Default specified in Article VII(e) or
(f) of the Loan Agreement shall occur, the Note and the remaining Secured
Indebtedness shall thereupon become due and payable concurrently therewith,
without any further action by Beneficiary and without presentment, demand,
protest, notice of protest and non-payment, or other notice of default, notice
of acceleration and intention to accelerate or other notice of any kind, all of
which are expressly waived by Grantor.

(c)           Beneficiary may foreclose this Deed of Trust, insofar as it
encumbers the Mortgaged Property, either by judicial action or through a public
trustee foreclosure sale through the Trustee.  If this Deed of Trust encumbers
more than one parcel of real estate, foreclosure may be by separate parcel or en
masse, as Beneficiary may elect in its sole discretion.  Foreclosure through
Trustee will be initiated by Beneficiary’s filing of its notice of election and
demand for sale with Trustee.  Upon the filing of such notice of election and
demand for sale, Trustee shall promptly comply with all notice and other
requirements of the laws of Colorado then in force with respect to such sales,
and shall give four weeks’ public notice of the time and place of such sale by
advertisement weekly five times in some newspaper of general circulation then
published in San Miguel County, Colorado.  Any sale conducted by Trustee
pursuant to this section shall be held at the front door of the county
courthouse for San Miguel County, Colorado, or on the Mortgaged Property, or at
such other place as similar sales are then customarily held in San Miguel
County, Colorado, provided that the actual place of sale shall be specified in
the notice of sale.  All fees, costs and expenses of any kind incurred by
Beneficiary in connection with foreclosure of this Deed of Trust, including,
without limitation, the costs of any appraisals and environmental evaluations of
the Mortgaged Property obtained by Beneficiary, all costs of any receivership
for the Mortgaged Property advanced by Beneficiary, and all attorneys’, legal
assistants’ and consultants’ fees incurred by Beneficiary, shall constitute a
part of the Secured Indebtedness and may be included as part of the amount owing
from Grantor to Beneficiary at any foreclosure sale.  The proceeds of any sale
under this section shall be applied first to the fees and expenses of the
officer conducting the sale, and then to the reduction or discharge of the
Secured Indebtedness; any surplus remaining shall be paid over to Grantor or to
such other person or persons as may be lawfully entitled to such surplus.  At
the conclusion of any foreclosure sale, the officer conducting the sale shall
execute and deliver to the purchaser at the sale a certificate of purchase which
shall describe the Mortgaged Property sold to such purchaser and shall state
that upon the expiration of the applicable periods for redemption, the holder of
such certificate will be entitled to a deed to the Mortgaged Property described
in the certificate.  After the expiration of all applicable periods of
redemption, unless the Mortgaged Property sold has been redeemed by Grantor, the
officer who conducted such sale shall, upon request, execute and deliver an
appropriate deed to

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the holder of the certificate of purchase or the last certificate of redemption,
as the case may be.  Nothing in this section dealing with foreclosure procedures
or specifying particular actions to be taken by Beneficiary or by Trustee or any
similar officer shall be deemed to contradict or add to the requirements and
procedures now or hereafter specified by Colorado law, and any such
inconsistency shall be resolved in favor of Colorado law applicable at the time
of foreclosure.

(d)           Beneficiary shall be entitled, as a matter of absolute right and
without regard to the value of any security for the Secured Indebtedness or the
solvency of any person liable therefor, to the appointment of a receiver for the
Mortgaged Property upon ex-parte application to any court of competent
jurisdiction.  Grantor waives any right to any hearing or notice of hearing
prior to the appointment of a receiver.  Such receiver and his agents shall be
empowered (a) to take possession of the Mortgaged Property and any businesses
conducted by Grantor or any other person thereon and any business assets used in
connection therewith and, if the receiver deems it appropriate, to operate the
same, (b) to exclude Grantor and Grantor’s agents, servants, and employees from
the Mortgaged Property, (c) to collect the rents, issues, profits, and income
therefrom, (d) to complete any construction which may be in progress, (e) to do
such maintenance and make such repairs and alterations as the receiver deems
necessary, (f) to use all stores of materials, supplies, and maintenance
equipment on the Mortgaged Property and replace such items at the expense of the
receivership estate, (g) to pay all taxes and assessments against the Mortgaged
Property and the Collateral, all premiums for insurance thereon, all utility and
other operating expenses, and all sums due under any prior or subsequent
encumbrance, and (h) generally to do anything which Grantor could legally do if
Grantor were in possession of the Mortgaged Property.  All expenses incurred by
the receiver or his agents shall constitute a part of the Secured Indebtedness. 
Any revenues collected by the receiver shall be applied first to the expenses of
the receivership, including attorneys’ fees incurred by the receiver and by
Beneficiary, together with interest thereon at the default rate, as set forth in
the Note, from the date incurred until repaid, and the balance shall be applied
toward the Secured Indebtedness or in such other manner as the court may
direct.  Unless sooner terminated with the express consent of Beneficiary, any
such receivership will continue until the Secured Indebtedness has been
discharged in full, or until title to the Mortgaged Property has passed after
foreclosure sale and all applicable periods of redemption have expired.

(e)           It is intended by each of the foregoing provisions of
Subsection 3.2(c) and Subsection 3.2(d) that Trustee may, after any request or
direction by Beneficiary, sell not only the Real Estate but also the Collateral
and other interests constituting a part of the Mortgaged Property, or any part
thereof, along with the Real Estate, or any part thereof, all as a unit and as a
part of a single sale, or may sell any part of the Mortgaged Property separately
from the remainder of the Mortgaged Property.  The sale or sales by Trustee of
less than the whole of the Mortgaged Property shall not exhaust the power of
sale herein granted, and Trustee is specifically empowered to make successive
sale or sales under such power until the whole of the Mortgaged Property shall
be sold; and if the proceeds of such sale or sales of less than the whole of
such Mortgaged Property shall be less than the aggregate of the Secured
Indebtedness and the expense of executing this trust, this Deed of Trust and the
assignments, liens, and security interests hereof shall remain in full force and
effect as to the unsold portion of the Mortgaged Property just as though no sale
or sales of less than the whole of the Mortgaged Property had occurred, but
Beneficiary shall have the right, at its sole election, to request Trustee to
sell less than the whole of the Mortgaged Property.

(f)            Grantor and Beneficiary agree that, in any assignments, deeds,
bills of sale, notices of sale, or postings, given by Trustee or Beneficiary,
any and all statements of fact or other recitals therein made as to the identity
of Beneficiary, or as to the occurrence or existence of any Event of Default, or
as to the acceleration of the maturity of the Secured Indebtedness, or as to the
request to sell, posting of notice of sale, notice of sale, time, place, terms
and manner of sale and receipt, distribution and application of the money
realized therefrom, or as to the due and proper appointment of a substitute
trustee and without being limited by the foregoing, as to any other act or thing
having been duly done by Beneficiary or by Trustee, shall be taken by all courts
of law and equity as prima facie evidence that the said statements or recitals
state facts,

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and Grantor does hereby ratify and confirm any and all acts that Trustee may
lawfully do in the premises by virtue hereof.

(g)           [Reserved.]

(h)           Beneficiary may, or Trustee may upon written request of
Beneficiary, proceed by suit or suits, at law or in equity, to enforce the
payment and performance of the Secured Indebtedness in accordance with the terms
hereof or of the Note or the other Loan Documents, to foreclose or otherwise
enforce the assignments, liens, and security interests created or evidenced by
the other Loan Documents, or this Deed of Trust as against all, or any part of,
the Mortgaged Property, and to have all or any part of the Mortgaged Property
sold under the judgment or decree of a court of competent jurisdiction.

(i)            To the maximum extent permitted by law, Beneficiary, as a matter
of right without notice to Grantor and without regard to the sufficiency of the
security, and without any showing of insolvency, fraud, or mismanagement on the
part of Grantor, and without the necessity of filing any judicial or other
proceeding other than the proceeding for appointment of a receiver, shall be
entitled to the appointment of a receiver or receivers of the Mortgaged
Property, or any part thereof, and of the income, rents, issues, profits,
revenues, receipts, accounts, accounts receivable and other receivables thereof.

(j)            To the maximum extent permitted by law, Beneficiary may enter
upon the Land, take possession of the Mortgaged Property and remove the
Collateral or any part thereof, with or without judicial process, and, in
connection therewith, without any responsibility or liability on the part of
Beneficiary, take possession of any property located on or in the Real Estate
which is not a part of the Mortgaged Property and hold or store such property at
Grantor’s expense.

(k)           Beneficiary may require Grantor to assemble the Collateral, or any
part thereof, and make it available to Beneficiary at a place to be designated
by Beneficiary which is reasonably convenient to Grantor and Beneficiary.

(l)            After notification, if any, hereafter provided in this
Subsection, Beneficiary may, or the Trustee may, upon request of Beneficiary,
sell, lease, or otherwise dispose of, at the office of Beneficiary, or on the
Land, or elsewhere as chosen by Beneficiary, all or any part of the Collateral,
in its then condition, or following any commercially reasonable preparation or
processing, and each “Sale” (as used herein, the term “Sale” means any such
sale, lease, or other disposition made pursuant to this Subsection 3.2(l)) may
be as a unit or in parcels, by public or private proceedings, and by way of one
or more contracts, and, at any Sale, it shall not be necessary to exhibit the
Collateral, or part thereof, being sold.  The Sale of any part of the Collateral
shall not exhaust Beneficiary’s power of Sale, but Sales may be made, from time
to time, until the Secured Indebtedness is paid and performed in full. 
Reasonable notification of the time and place of any public Sale pursuant to
this Subsection, or reasonable notification of the time after which any private
Sale is to be made pursuant to this Subsection, shall be sent to Grantor and to
any other person entitled to notice under Chapter 9 of the Code; provided, that
if the Collateral being sold, or any part thereof, is perishable, or threatens
to decline speedily in value, or is of a type customarily sold on a recognized
market, Beneficiary may sell, lease, or otherwise dispose of such Collateral
without notification, advertisement or other notice of any kind.  It is agreed
that notice sent or given not less than ten (10) calendar days prior to the
taking of the action to which the notice relates, is reasonable notification and
notice for the purposes of this Subsection.

(m)          Beneficiary may surrender the insurance policies maintained
pursuant to the terms hereof, or any part thereof, and receive and apply the
unearned premiums as a credit on the Secured Indebtedness, and, in connection
therewith, Grantor hereby appoints Beneficiary (or any officer of Beneficiary),
as the true and lawful agent and attorney-in-fact for Grantor (with full powers
of substitution), which power of attorney shall be deemed to be a power coupled
with an interest and therefore irrevocable, to collect such premiums.

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(n)           Beneficiary may retain the Collateral in satisfaction of the
Secured Indebtedness whenever the circumstances are such that Beneficiary is
entitled to do so under the Code.

(o)           Beneficiary may buy the Mortgaged Property, or any part thereof,
at any public Sale or judicial Sale (including any Sale of the Collateral as
contemplated in Subsection 3.2(l) hereof).

(p)           Beneficiary may buy the Collateral, or any part thereof, at any
private Sale if the Collateral, or part thereof, being sold is a type
customarily sold in a recognized market or a type which is the subject of widely
distributed standard price quotations.

(q)           Beneficiary shall have and may exercise any and all other rights
and remedies which Beneficiary may have at law or in equity, or by virtue of any
other security instrument, or under the Code, or otherwise.

(r)            Notwithstanding anything contained herein to the contrary,
Beneficiary may proceed under Chapter 9 of the Code as to any or all personal
property covered hereby or, at Beneficiary’s election, Beneficiary may proceed
as to both the real and personal property covered hereby in accordance with
Beneficiary’s rights and remedies in respect of real property, in which case the
provisions of Chapter 9 of the Code (and Subsection 3.2(l) hereof) shall not
apply.

Section 3.3.            If Beneficiary is the purchaser of the Mortgaged
Property, or any part thereof, at any sale thereof (including any Sale of the
Collateral as contemplated in Subsection 3.2(l) hereof), whether such sale be
under the power of sale hereinabove vested in Trustee, or upon any other
foreclosure or enforcement of the assignments, liens, and security interests
hereof, or otherwise, Beneficiary shall, upon any such purchase, acquire good
title to the Mortgaged Property so purchased, free of the assignments, liens,
and security interests of these presents.

Section 3.4.            Should any part of the Mortgaged Property come into the
possession of Beneficiary, whether before or after the occurrence of an Event of
Default, Beneficiary may use or operate the Mortgaged Property for the purpose
of preserving it or its value, pursuant to the order of a court of appropriate
jurisdiction, or in accordance with any other rights held by Beneficiary with
respect to the Mortgaged Property.  Grantor covenants to promptly reimburse and
pay to Beneficiary, at the place where the Note is payable, or at such other
place as may be designated by Beneficiary in writing, the amount of all
reasonable expenses (including the cost of any insurance, taxes, or other
charges) incurred by Beneficiary in connection with its custody, preservation,
use or operation of the Mortgaged Property, together with interest thereon from
the date incurred by Beneficiary at the Default Rate (as defined in the Loan
Agreement), and all such expenses, cost, taxes, interest, and other charges
shall be a part of the Secured Indebtedness.  It is agreed, however, that the
risk of accidental loss or damage to the Mortgaged Property is undertaken by
Grantor, and Beneficiary shall have no liability whatever for decline in value
of the Mortgaged Property, nor for failure to obtain or maintain insurance, nor
for failure to determine whether any insurance ever in force is adequate as to
amount or as to the risks insured.

Section 3.5.            If the assignments, liens, or security interests hereof
shall be foreclosed or otherwise enforced by a Trustee’s sale, or by any other
judicial or non-judicial action, then the purchaser at any such sale shall
receive, as an incident to his ownership, immediate possession of that portion
of the Mortgaged Property purchased, and if Grantor or Grantor’s Successors
shall hold possession of any of said portion of the Mortgaged Property
subsequent to such foreclosure, Grantor and Grantor’s Successors shall be
considered as tenants at sufferance of the purchaser at such foreclosure sale,
and anyone occupying the Mortgaged Property (or any part thereof) after demand
made for possession thereof shall be guilty of forcible detainer and shall be

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subject to eviction and removal, forcible or otherwise, with or without (to the
maximum extent permitted by law) process of law, and all damages by reason
thereof are hereby expressly waived.

Section 3.6.            The proceeds from any sale, lease or other disposition
made pursuant to this Article III, or the proceeds from surrendering any
insurance policies pursuant to Subsection 3.2(m) hereof, or any Rental collected
by Beneficiary pursuant to Article IV hereof, shall be applied by Trustee, or by
Beneficiary, as the case may be, as follows:  FIRST, to the Secured
Indebtedness, in the order and manner described in Section 2.04 of the Loan
Agreement, and SECOND, the balance, if any, remaining after the full and final
payment and performance of the Secured Indebtedness, to Grantor, or as otherwise
required by applicable law.

Section 3.7.            This instrument shall be effective as a mortgage as well
as a deed of trust, and upon the occurrence of an Event of Default may be
foreclosed as to the Mortgaged Property in any manner permitted by the laws of
the State in which the Land is located and any other state in which any part of
the Mortgaged Property is situated.  Any foreclosure suit may be brought by
Trustee or Beneficiary.  If a foreclosure hereunder is commenced by Trustee,
Beneficiary may, at any time before the sale, direct the Trustee to abandon the
sale, and may then institute suit for the collection of the Note, and for the
foreclosure or enforcement of the assignments, liens, and security interests
hereof.  If Beneficiary should institute a suit for the collection of the Note,
and for a foreclosure or enforcement of the assignments, liens, and security
interests hereof, it may, at any time before the entry of a final judgment in
said suit, dismiss the same, and require Trustee to sell the Mortgaged Property,
or any part thereof, in accordance with the provisions of this Deed of Trust.

SECTION 3.8.            (A)  IN THE EVENT AN INTEREST IN ANY OF THE MORTGAGED
PROPERTY IS FORECLOSED UPON PURSUANT TO A JUDICIAL OR NONJUDICIAL FORECLOSURE
SALE, GRANTOR AGREES AS FOLLOWS THAT NOTWITHSTANDING THE PROVISIONS OF SECTIONS
51.003, 51.004, AND 51.005 OF THE TEXAS PROPERTY CODE (AS THE SAME MAY BE
AMENDED FROM TIME TO TIME), AND TO THE EXTENT PERMITTED BY LAW, GRANTOR AGREES
THAT BENEFICIARY SHALL BE ENTITLED TO SEEK A DEFICIENCY JUDGMENT FROM GRANTOR
AND ANY OTHER PARTY OBLIGATED ON THE SECURED INDEBTEDNESS EQUAL TO THE
DIFFERENCE BETWEEN THE AMOUNT OWING ON THE SECURED INDEBTEDNESS AND THE AMOUNT
FOR WHICH THE MORTGAGED PROPERTY WAS SOLD PURSUANT TO JUDICIAL OR NONJUDICIAL
FORECLOSURE SALE.  GRANTOR EXPRESSLY WAIVES ANY RIGHT OF OFFSET TO WHICH GRANTOR
MIGHT BE ENTITLED PURSUANT TO THOSE STATUTES.  GRANTOR RECOGNIZES THAT THIS
SECTION CONSTITUTES A WAIVER OF THE ABOVE-CITED PROVISIONS OF THE TEXAS PROPERTY
CODE WHICH WOULD OTHERWISE PERMIT GRANTOR AND OTHER PERSONS AGAINST WHOM
RECOVERY OF DEFICIENCIES IS SOUGHT OR ANY GUARANTOR INDEPENDENTLY (EVEN ABSENT
THE INITIATION OF DEFICIENCY PROCEEDINGS AGAINST THEM) TO PRESENT COMPETENT
EVIDENCE OF THE FAIR MARKET VALUE OF THE MORTGAGED PROPERTY AS OF THE DATE OF
THE FORECLOSURE SALE AND OFFSET AGAINST ANY DEFICIENCY THE AMOUNT BY WHICH THE
FORECLOSURE SALE PRICE IS DETERMINED TO BE LESS THAN SUCH FAIR MARKET VALUE. 
GRANTOR FURTHER RECOGNIZES AND AGREES THAT THIS WAIVER CREATES AN IRREBUTTABLE
PRESUMPTION THAT THE FORECLOSURE SALE PRICE IS EQUAL TO THE FAIR MARKET VALUE OF
THE MORTGAGED PROPERTY FOR PURPOSES OF CALCULATING DEFICIENCIES OWED BY GRANTOR,
ANY GUARANTOR, AND OTHERS AGAINST WHOM RECOVERY OF A DEFICIENCY IS SOUGHT.

(B)           ALTERNATIVELY, IN THE EVENT THE WAIVER PROVIDED FOR IN SUBSECTION
(A) ABOVE IS DETERMINED BY A COURT OF COMPETENT JURISDICTION TO BE
UNENFORCEABLE, THE FOLLOWING SHALL BE THE BASIS FOR THE FINDER OF FACT’S
DETERMINATION OF THE FAIR MARKET VALUE OF THE MORTGAGED PROPERTY AS OF THE DATE
OF THE FORECLOSURE SALE IN PROCEEDINGS GOVERNED BY SECTIONS 51.003, 51.004 AND
51.005 OF THE TEXAS PROPERTY CODE (AS AMENDED FROM TIME TO TIME):  (I) THE
MORTGAGED PROPERTY SHALL BE VALUED IN AN “AS IS” CONDITION AS OF THE DATE OF THE
FORECLOSURE SALE, WITHOUT ANY ASSUMPTION OR EXPECTATION THAT THE MORTGAGED
PROPERTY WILL BE REPAIRED OR IMPROVED IN ANY MANNER BEFORE A RESALE OF THE
MORTGAGED PROPERTY AFTER FORECLOSURE; (II) THE VALUATION SHALL BE BASED UPON AN
ASSUMPTION THAT THE FORECLOSURE PURCHASER DESIRES A RESALE OF THE MORTGAGED
PROPERTY FOR CASH PROMPTLY (BUT NO LATER THAN TWELVE (12) MONTHS) FOLLOWING THE
FORECLOSURE SALE; (III) ALL REASONABLE CLOSING COSTS CUSTOMARILY BORNE BY THE
SELLER IN COMMERCIAL REAL ESTATE TRANSACTIONS SHOULD BE DEDUCTED FROM THE GROSS
FAIR MARKET VALUE OF THE MORTGAGED PROPERTY, INCLUDING,

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WITHOUT LIMITATION, BROKERAGE COMMISSIONS, TITLE INSURANCE, A SURVEY OF THE
MORTGAGED PROPERTY, TAX PRORATIONS, ATTORNEYS’ FEES, AND MARKETING COSTS; (IV)
THE GROSS FAIR MARKET VALUE OF THE MORTGAGED PROPERTY SHALL BE FURTHER
DISCOUNTED TO ACCOUNT FOR ANY ESTIMATED HOLDING COSTS ASSOCIATED WITH
MAINTAINING THE MORTGAGED PROPERTY PENDING SALE, INCLUDING, WITHOUT LIMITATION,
UTILITIES EXPENSES, PROPERTY MANAGEMENT FEES, TAXES AND ASSESSMENTS (TO THE
EXTENT NOT ACCOUNTED FOR IN (III) ABOVE), AND OTHER MAINTENANCE, OPERATIONAL AND
OWNERSHIP EXPENSES; AND (V) ANY EXPERT OPINION TESTIMONY GIVEN OR CONSIDERED IN
CONNECTION WITH A DETERMINATION OF THE FAIR MARKET VALUE OF THE MORTGAGED
PROPERTY MUST BE GIVEN BY PERSONS HAVING AT LEAST FIVE (5) YEARS EXPERIENCE IN
APPRAISING PROPERTY SIMILAR TO THE MORTGAGED PROPERTY AND WHO HAVE CONDUCTED AND
PREPARED A COMPLETE WRITTEN APPRAISAL OF THE MORTGAGED PROPERTY TAKING INTO
CONSIDERATION THE FACTORS SET FORTH ABOVE.

ARTICLE IV

LEASES AND ASSIGNMENT OF RENTAL

Section 4.1.            Grantor hereby absolutely assigns to Beneficiary all
Rental payable under each Lease now or at any time hereafter existing, such
assignment being upon the following terms:

(a)           until Beneficiary notifies Grantor of an Event of Default, Grantor
shall collect Rental directly from each Lessee, and each Lessee shall pay Rental
directly to Grantor, but Grantor covenants to hold the Rentals in trust, to be
applied, and Grantor covenants to apply the Rentals, to the payment of (i) the
Note and the remaining Secured Indebtedness, and (ii) reasonable and necessary
expenses and charges with respect to the ownership, maintenance and operation of
the Mortgaged Property, all before the Rentals are applied by Grantor for any
other purpose not inconsistent with the Loan Agreement;

(b)           upon receipt by Grantor from Beneficiary of notice of the
occurrence of an Event of Default and that Rental shall be paid directly to
Beneficiary, Grantor is hereby directed to pay directly to Beneficiary all
Rental thereafter accruing received by Grantor;

(c)           upon receipt by Grantor, the manager of the Mortgaged Property
and/or any Lessee from Beneficiary of notice of the occurrence of an Event of
Default and that Rental shall be paid directly to Beneficiary, Grantor, such
manager and each Lessee that receives notice of the occurrence of an Event of
Default are hereby authorized and directed by Grantor to pay directly to
Beneficiary all Rental thereafter accruing, and the receipt of Rental by
Beneficiary shall be a release of each such manager or Lessee to the extent of
all amounts so paid to Beneficiary;

(d)           Rental so received by Beneficiary shall be applied by Beneficiary,
at its option, in any order determined by Beneficiary in its sole and
unreviewable discretion, notwithstanding any instructions, directions or
requests from Grantor, manager or any Lessee to the contrary, to (i) the payment
and performance of the Secured Indebtedness and/or (ii) reasonable expenses of
and charges with respect to the ownership, maintenance and operation of the
Mortgaged Property (and including, at Beneficiary’s option, the maintenance,
without interest thereon, of a reasonable reserve for replacement); and

(e)           Beneficiary shall not be liable for Beneficiary’s failure to
collect, or its failure to exercise diligence in the collection of, Rental, but
shall be accountable only for Rental that it shall actually receive.

This assignment is in addition and in supplement to, and Beneficiary’s rights
and remedies under this Article IV are cumulative of, Beneficiary’s rights and
remedies under any other document or assignment concerning or applicable to each
Lease now or at any time hereafter existing or Rentals thereunder, or any part
thereof.

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As between Beneficiary and Grantor, and any person claiming through or under
Grantor, the assignment contained in this Section 4.1 is intended to be
absolute, unconditional and presently effective, and the provisions of
Subsection 4.1(c) are intended solely for the benefit of the manager of the
Mortgaged Property and each Lessee and shall never inure to the benefit of
Grantor or any person claiming by, through or under Grantor, other than a
manager or a Lessee who has not received such notice.  It shall not be necessary
for Beneficiary to institute legal proceedings of any kind whatsoever to enforce
the provisions of this Section 4.1.

Section 4.2.            Nothing in this Article IV shall be construed as
subordinating this Deed of Trust to any Lease.

Section 4.3.            In the event that Beneficiary ever collects Rental,
Beneficiary shall be entitled to pay its agent as compensation for collecting
such Rental, from sums so collected, a reasonable fee.

Section 4.4.            Grantor consents to Beneficiary’s application of Rentals
as provided in Section 4.1.(d), and Grantor acknowledges and agrees that it is
in Grantor’s best interest and for Grantor’s benefit for Beneficiary to apply
the Rentals as provided in Section 4.1.(d).  Grantor shall not challenge or
interfere with Beneficiary’s application of Rentals as provided in
Section 4.1.(d).

Section 4.5.

(a)           Notwithstanding any provision in this Deed of Trust to the
contrary, upon full payment and satisfaction of the Secured Indebtedness, this
assignment of Rental shall terminate.  Written demand made by Beneficiary
delivered to any Lessee for payment of Rentals by reason of the occurrence of
any Event of Default claimed by Beneficiary shall be sufficient evidence of each
such Lessee’s obligation and authority to make all future payments of Rentals to
Beneficiary without the necessity for further consent by the Grantor.  Grantor
hereby indemnifies and agrees to hold each Lessee free and harmless from and
against all liability, loss, cost, damage or expense suffered or incurred by
such Lessee by reason of its compliance with any demand for payment of Rentals
made by the Beneficiary contemplated by the preceding sentence.

(b)           If Beneficiary receives any Rentals as provided in this Article
IV, then the provisions of Section 5.19. shall apply to the Rentals received by
Beneficiary.

ARTICLE V

MISCELLANEOUS

Section 5.1.            If the Secured Indebtedness is paid in full and all
obligations of Grantor under the Loan Documents are performed in full, then this
conveyance shall become null and void and shall be released at Grantor’s request
and expense; otherwise, it shall remain in full force and effect.

Section 5.2.            As used in this Article V, “Rights” means rights,
remedies, powers and privileges, and “Liens” means all assignments, titles,
interests, liens, security interests, and other encumbrances.  All Rights and
Liens herein expressly conferred are cumulative of all other Rights and Liens
herein, or by law or in equity provided, or provided in any other security
instrument, and shall not be deemed to deprive Beneficiary or Trustee of any
such other legal or equitable Rights and Liens by judicial proceedings, or
otherwise, appropriate to enforce the conditions, covenants and terms of this
Deed of Trust, the Note and the other Loan Documents, and the employment of any
Rights hereunder, or otherwise, shall not prevent the concurrent or subsequent
employment of any other appropriate Rights.

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Section 5.3.            Any and all covenants in this Deed of Trust may from
time to time, by instrument in writing signed by Beneficiary and delivered to
Grantor, be waived to such extent and in such manner as Beneficiary may desire,
but no such waiver shall ever affect or impair Beneficiary’s Rights or Liens
hereunder, except to the extent so specifically stated in such written
instrument.  Impossibility shall not excuse the performance of any covenant or
condition in this Deed of Trust.

Section 5.4.            Without waiving any right of Beneficiary arising out of
a breach by Grantor of Grantor’s obligations and covenants under the Loan
Documents, if Grantor, or any of Grantor’s Successors, conveys its interest in
any of the Mortgaged Property to any other party, then Beneficiary may, without
notice to Grantor, or its successors and assigns, deal with any owner of any
part of the Mortgaged Property with reference to this Deed of Trust and the
Secured Indebtedness, either by way of forbearance on the part of Beneficiary,
or extension of time of payment of the Secured Indebtedness, or release of all
or any part of the Mortgaged Property, or any other property securing payment of
the Secured Indebtedness, without in any way modifying or affecting
Beneficiary’s Rights and Liens hereunder or the liability of Grantor, or any
other party liable for payment of the Secured Indebtedness, in whole or in part.

Section 5.5.            Grantor hereby waives all Rights of marshaling in the
event of any foreclosure of the Liens hereby created.

Section 5.6.            It is understood and agreed that the proceeds of the
Note, to the extent that the same are utilized to pay or renew or extend any
indebtedness of Grantor, or any other indebtedness, or take up or release any
outstanding Liens against the Mortgaged Property, or any portion thereof, have
been advanced by Beneficiary at Grantor’s request and at the request of the
obligors thereof and upon their representation that such amounts are due and
payable.  Beneficiary shall be subrogated to any and all Rights and Liens owned
or claimed by any owner or Beneficiary of said outstanding Rights and Liens,
however remote, regardless of whether said Rights and Liens are acquired by
assignment or are released by the Beneficiary thereof upon payment.

Section 5.7.            Each and every party who signs this Deed of Trust, and
each and every subsequent owner of any of the Mortgaged Property, covenants and
agrees that such party will perform or cause to be performed, each and every
condition, term, provision, and covenant of this Deed of Trust, except that such
party shall have no duty to pay the indebtedness evidenced by the Note except in
accordance with the terms of the Note, and the terms of this Deed of Trust or in
accordance with the terms of the transfer to him.

Section 5.8.            If any provision of this Deed of Trust is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term of this Deed of Trust, the legality, validity, and enforceability of
the remaining provisions of this Deed of Trust shall not be affected thereby,
and in lieu of each such illegal, invalid or unenforceable provision there shall
be added automatically as a part of this Deed of Trust a provision as similar in
terms to such illegal, invalid, or unenforceable provision as may be possible
and be legal, valid, and enforceable.  If the Rights and Liens created by this
Deed of Trust shall be invalid or unenforceable as to any part of the Secured
Indebtedness, then the unsecured portion of the Secured Indebtedness shall be
completely paid prior to the payment of the remaining and secured portion of the
Secured Indebtedness, and all payments made on the Secured Indebtedness shall be
considered to have been paid on and applied first to the complete payment of the
unsecured portion of the Secured Indebtedness.

Section 5.9.            This Deed of Trust is binding upon Grantor and Grantor’s
Successors, and shall inure to the benefit of Beneficiary, and its successors
and assigns, and the provisions hereof shall likewise be covenants running with
the land.  The duties, covenants, conditions, obligations, and warranties of
Grantor in this Deed of Trust shall be joint and several obligations of Grantor
and Grantor’s Successors.  Beneficiary may at any time and from time to time
assign or sell to other lenders all or a portion of the indebtedness secured

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hereby, or sell participations therein, and may, in contemplation of such sale
or assignment divulge, and deliver copies of, information (financial or
otherwise) concerning Grantor, any Guarantor and the Mortgaged Property to
prospective lenders.

Section 5.10.          This Deed of Trust may be executed in a number of
identical counterparts, each of which, for all purposes, shall be deemed an
original.

Section 5.11.          Beneficiary shall have the right at any time to file this
Deed of Trust as a financing statement, but the failure to do so shall not
impair the validity and enforceability of this Deed of Trust in any respect
whatsoever.  Grantor grants to Beneficiary the right to file any financing
statement, continuation or amendment deemed appropriate by Beneficiary, without
signature by Grantor and without notice, in connection with the security
interests granted herein or in any other Security Instrument.

Section 5.12.          Grantor hereby assumes all liability for the Mortgaged
Property, for the Liens created therein by this Deed of Trust, and for any
development, use, possession, maintenance, and management of, and construction
upon, the Mortgaged Property, or any part thereof, and agrees to assume
liability for, and to indemnify and hold Beneficiary harmless from and against,
any and all claims, causes of action, or liabilities, for injuries to or deaths
of persons and damage to property, howsoever arising, from or incident to such
development, use, possession, maintenance, management, and construction, whether
such persons be agents or employees of Grantor or of third parties, or such
damage be to property of Grantor or of others save and except for such damage or
injury as is the result of Beneficiary’s gross negligence or willful
misconduct.  Grantor agrees to indemnify, save and hold harmless Beneficiary
from and against, and covenants to defend Beneficiary against, any and all
losses, damages, claims, costs, penalties, liabilities, and expenses, including,
but not limited to, court costs and reasonable attorneys’ fees, howsoever
arising or incurred because of, incident to, or with respect to the Mortgaged
Property or any development, use, possession, maintenance, or management thereof
or construction thereon.

Section 5.13.          If all or any portion of the proceeds of the loan
evidenced by the Note has been advanced for the purpose of paying the purchase
price for all or a part of the Mortgaged Property, then Beneficiary shall have,
and is hereby granted, a vendor’s lien on the Mortgaged Property to further
secure the Secured Indebtedness, and Beneficiary shall be subrogated to all
rights, titles, interests, liens, and security interests owned or claimed by the
holder of any indebtedness which has been directly or indirectly discharged or
paid from the proceeds of the loan evidenced by the Note.

Section 5.14.          All references to “Article,” “Articles,” “Section,”
“Sections,” “Subsection,” or “Subsections” contained herein are, unless
specifically indicated otherwise, references to articles, sections, and
subsections of this Deed of Trust.

Section 5.15.          Whenever herein the singular number is used, the same
shall include the plural where appropriate, and words of any gender shall
include each other gender where appropriate.

Section 5.16.          The captions, headings, and arrangements used in this
Deed of Trust are for convenience only and do not in any way affect, limit,
amplify, or modify the terms and provisions hereof.

Section 5.17.          Whenever this Deed of Trust requires or permits any
consent, approval, notice, request, or demand from one party to another, the
consent, approval, notice, request, or demand must be in writing to be effective
and shall be deemed to have been given when given in accordance with the
provisions of Section 9.01 of the Loan Agreement; provided that any notice of
foreclosure shall be effective when given in accordance with statutory
requirements notwithstanding anything to the contrary contained herein or in
Section 9.01 of the Loan Agreement.

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Notwithstanding any provision contained herein or in any of the other Loan
Documents to the contrary, in the event that Beneficiary shall fail to give any
notice to Grantor required hereunder or thereunder, the sole and exclusive
remedy for such failure shall be to seek appropriate equitable relief to enforce
the Loan Documents to give such notice and to have any action of Beneficiary
postponed or revoked and any proceedings in connection therewith delayed or
terminated pending the giving of such notice by Beneficiary, and no Person shall
have any right to damages (whether actual or consequential) or any other type of
relief not herein specifically set out against Beneficiary, all of which damages
or other relief are expressly waived by Grantor.  The foregoing is not intended
and shall not be deemed under any circumstances to require Beneficiary to give
notice of any type or nature to any Person except as expressly set forth herein
or as may be otherwise expressly required by applicable law regarding statutory
notice of non-judicial foreclosure sales of certain collateral.

Section 5.18.          The substantive laws of the State of Colorado shall
govern the creation, perfection and enforcement of the liens, rights and
obligations created and intended to be created in this Deed of Trust.  All other
aspects of this Deed of Trust and of the loan transaction evidenced by the Note
and the other Loan Documents are intended to be governed by the laws of the
State of Texas, as specified therein, unless federal law requires the
application of federal law.

Section 5.19.          No provision herein or in any promissory note,
instrument, or any other Security Instrument evidencing or securing the Secured
Indebtedness shall require the payment or permit the collection of interest in
excess of the maximum permitted by law.  If any excess of interest in such
respect is provided for herein or in any other Security Instrument, the
provisions of this paragraph shall govern, and neither Grantor nor any borrower
shall be obligated to pay the amount of such interest to the extent that it is
in excess of the amount permitted by law.  The intention of the parties being to
conform strictly to the usury laws now in force, all promissory notes,
instruments, and other Loan Documents evidencing or securing the Secured
Indebtedness shall be held subject to reduction to the amount allowed under said
usury laws as now or hereafter construed by the courts having jurisdiction.

Section 5.20.          Except to the extent venue necessarily lies in San Miguel
County, Colorado to foreclose or otherwise enforce the provisions of the Deed of
Trust, any suit, action or proceeding against Grantor with respect to this Deed
of Trust or the other Loan Documents or any judgment entered by any court in
respect thereof, may be brought in the courts of the State of Texas, or in the
United States Courts located in Dallas County, Texas, as Beneficiary in its sole
discretion may elect and Grantor hereby submits to the non-exclusive
jurisdiction of such courts for the purpose of any such suit, action or
proceeding.  Grantor hereby irrevocably consents to the service of process in
any suit, action or proceeding in said court by the mailing thereof by
Beneficiary by registered or certified mail, postage prepaid, to Grantor’s
address set forth in the first paragraph of this Deed of Trust.  Grantor hereby
irrevocably waives any objections which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Deed of Trust or any other Security Instrument brought in the courts
located in the State of Texas, and hereby further irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.  GRANTOR AND BENEFICIARY HEREBY WAIVE TRIAL BY
JURY IN ANY SUIT, ACTION OR PROCEEDING BROUGHT IN CONNECTION WITH THIS DEED OF
TRUST OR ANY OF THE OTHER LOAN DOCUMENTS, WHICH WAIVER IS INFORMED AND
VOLUNTARY.

Section 5.21.          Time is of the essence of this Deed of Trust and the
other Loan Documents.

Section 5.22.          Nothing contained in this Deed of Trust, the Note, or any
of the other Loan Documents nor the acts of the parties hereto shall be
construed to create a relationship of principal and agent, partnership, or joint
venture between Grantor and Beneficiary.

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Section 5.23.          Beneficiary may, from time to time, in Beneficiary’s sole
discretion, contract for and procure an Appraisal of the Mortgaged Property. 
Grantor covenants and agrees to pay the cost of each such Appraisal within ten
(10) days of written notice from Beneficiary specifying the amount due.  All
amounts due hereunder shall constitute part of the Secured Indebtedness. 
Notwithstanding the foregoing, so long as no Event of Default has occurred,
Grantor shall not be required to pay for more than one Appraisal per calendar
year.

Section 5.24.  It is agreed and understood that Grantor shall provide to
Beneficiary, on or before January 31st of each year during the term of the Note
secured hereby, written evidence that all ad valorem taxes and other assessments
against the property have been paid in full.

Section 5.25.  Reference is made to Article VII(k) of the Loan Agreement for a
statement of a prohibition against sale, conveyance, transfer, mortgage or
encumbrance of the Mortgaged Property or any interest therein, which terms and
provisions are incorporated herein by reference.

Section 5.26.          Reference is made to Section 8.08 Application of
Insurance Proceeds and Section 8.09 Application of Condemnation Proceeds of the
Loan Agreement for a statement of Grantor’s and Beneficiary’s rights in and to
proceeds of insurance policies in respect of the Mortgaged Property or any part
thereof and of condemnation proceeds with respect to the Mortgaged Property, any
portion thereof and any interest therein, which terms and provisions are
incorporated herein by reference.

Section 5.27.          The Loan Documents embody the entire agreement between
the parties and supersede all prior agreements and understandings.  No provision
of this Deed of Trust may be modified, waived or terminated except by an
instrument in writing executed by the party against whom a modification, waiver
or termination is sought to be enforced.

Section 5.28.          Beneficiary has not consented to any priority of a
contractor’s lien for construction of any improvements to the Mortgaged
Property, and any such lien hereafter arising shall be subordinate and inferior
to the lien of this instrument.

Section 5.29.          Any obligation or liability of  Grantor hereunder shall
be enforceable only against, and payable only out of, the property of Grantor,
and in no event shall any officer, director, shareholder, partner, beneficiary,
agent, advisor or employee of Grantor, be held to any personal liability
whatsoever or be liable for any of the obligations of Grantor hereunder, or the
property of any such Persons be subject to the payment of any such obligations,
except in the case of certain Persons as otherwise specifically provided in the
Loan Documents and where such Persons have executed a written agreement
pertaining thereto.

ARTICLE VI

PARTIAL RELEASE

Section 6.1.            Definitions.           As used in this Article VI, the
following terms shall have the meanings assigned to them as follows:

“Condominium Declaration” means any residential condominium declaration
affecting the Property, filed by Grantor or Declarant, to which Beneficiary has
subordinated the lien of this Deed of Trust.

“Net Sale Proceeds” means the difference between (i) the gross sales price of a
Unit and (ii) ordinary and actual closing costs incurred by Grantor, as seller
of the Unit to be released, which costs shall not exceed the normal costs
associated with such sales in the area in which the Unit is located.

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“Permitted Sale” means for which the gross sales price is equal to or greater
than the price contemplated in the Price Schedule attached to the Loan Agreement
as Exhibit J.

“Release Price” means for any Unit the amount equal to ninety percent (90%) of
the Net Sale Proceeds.

“Unit” means each residential condominium unit under the Condominium
Declaration.

Section 6.2.            Release Conditions.  Notwithstanding anything to the
contrary contained in this Deed of Trust, or any of the other Loan Documents, so
long as (i) no Event of Default or Potential Default has occurred and is
continuing and (ii) after the release of a Unit, the aggregate Appraised Value
of all Units remaining subject to the lien of this Deed of Trust would be not
less than the quotient of (x) the outstanding principal balance of the Secured
Indebtedness immediately following Lender’s receipt and application of the
Release Price for said Unit divided by (y) seventy-five percent (75%), then
Borrower shall, upon a Permitted Sale of a Unit, be entitled to obtain a partial
release of said Unit from the lien of this Deed of Trust upon satisfaction of
the following terms and conditions:

(a)           Grantor shall pay to Beneficiary, in cash, the Release Price for
the Unit and a release fee of $50.00.  The Release Price shall be applied by
Beneficiary as a prepayment of the Secured Indebtedness.

(b)           Grantor shall deliver to Beneficiary a partial release of lien in
form and content satisfactory to Beneficiary.

(c)           Grantor shall pay all expenses of Beneficiary arising in
connection with the release of such Unit including, without limitation, all
reasonable attorneys’ fees incurred by Beneficiary and the expense, if any, to
Beneficiary of inspecting the Unit prior to release.

REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGE(S) FOLLOWS.

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EXECUTED to be effective as of the day and date first above written.

 

GRANTOR:

 

 

 

 

 

BEHRINGER HARVARD MOUNTAIN VILLAGE, LLC,

 

a Colorado limited liability company

 

 

 

 

By:

Behringer Harvard Short-Term Opportunity Fund I LP,

 

 

a Texas limited partnership,

 

 

its manager

 

 

 

 

 

By:

Behringer Harvard Advisors II LP.

 

 

 

a Texas limited partnership,

 

 

 

its general partner

 

 

 

 

 

 

 

By:

Harvard Property Trust, LLC,

 

 

 

 

a Delaware limited liability company

 

 

 

 

its general partner

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Gerald J. Reihsen, III

 

 

 

 

Secretary

 

STATE OF TEXAS

§

 

§

COUNTY OF

 

 

§

 

This instrument was acknowledged before me on this              day of
September, 2006, by Gerald J. Reihsen, III, Secretary of Harvard Property Trust,
LLC, a Delaware limited liability company, as general partner on behalf of
Behringer Harvard Advisors II LP, a Texas limited partnership, as general
partner on behalf of Behringer Harvard Short-Term Opportunity Fund I LP, a Texas
limited partnership, as manager on behalf of Behringer Harvard Mountain Village
LLC, a Colorado limited liability company, on behalf of said limited liability
company.

 

 

 

Notary Public in and for the State of Texas

 

(SEAL)

 

 

Exhibit A

-

Legal Description

Exhibit B

-

Permitted Exceptions

 

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EXHIBIT A

Legal Description

LOTS SS165-A and SS165-B, Town of Mountain Village, Colorado, according to the
plat filed in the office of the Clerk and Recorder in Plat Book 1 at Page 2281,
and according to the Town of Mountain Village Official Lot List, recorded in
Book 586 at page 548;

TOGETHER WITH the Road Access Easement Agreement, recorded May 17, 2006 at
Reception No. 384207; Subject to the terms, conditions, provisions and
obligations contained therein;

LESS AND EXCEPT all rights to minerals and oil, gas or other hydrocarbons
located on, in or under the subject property, without any right of surface entry
for exploration, development or extraction, as reserved to The Telluride Company
in Deed recorded in Book 494 at page 22 and in Book 515 at page 626;

County of San Miguel, Colorado.

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EXHIBIT B
Permitted Exceptions

Those exceptions to title contained in the Loan Policy of Title Insurance issued
to Mortgagee by Stewart Title Guaranty Company, insuring the lien of this Deed
of Trust.

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