Exhibit 10.58


 


DEED OF TRUST


 


 


THIS DEED OF TRUST (this “Deed of Trust”) made the nineteenth day of
December, 2002, by DALLAS S&W, L.P., a
Texas  limited partnership, having
an address at c/o The Smith & Wollensky Restaurant Group, Inc. (the “Grantor”), 1114 First Avenue, New York, New
York 10021 to CHRISTOPHER MAYROSE
(“Trustee”), for the benefit of MORGAN STANLEY DEAN WITTER COMMERCIAL FINANCIAL
SERVICES, INC., a Delaware corporation, having an address at 825
Third Avenue, New York, New York 10022 (the  “Beneficiary”).


 


 


W  I  T  N  E  S
S  E  T  H:


 


WHEREAS, the
Grantor is the owner of the premises described in Exhibit A attached hereto
(the “Premises”);


 


WHEREAS,
subject to the terms of a certain Term Loan Agreement of even date herewith
among the Beneficiary, S&W Las Vegas, L.L.C. (the “Borrower”), The Smith & Wollensky
Restaurant Group, Inc. (“S&W Restaurant
Group”) and the Grantor (such agreement and any and all amendments,
modifications, extensions, renewals or replacements thereto, is referred to
herein as the  “Loan Agreement”; all capitalized terms used
herein which are not defined herein shall have the meanings given to them in
the Loan Agreement), the Beneficiary has agreed to make a certain loan (the “Loan”) to the Borrower, which Loan is
evidenced by a Promissory Note of even date herewith in the principal  amount of One Million Nine Hundred
Thousand and 00/100 ($1,900,000.00) Dollars (as the same may be amended or
restated from time to time, the “Note”);


 


WHEREAS, the
Grantor has guarantied the Borrower’s obligations under the Note, the Loan
Agreement and the other Loan Documents (as defined herein) pursuant to a
certain Joint and Several Guaranty of Payment of even date herewith (the “Guaranty”) made by the Grantor and S&W
Restaurant Group (collectively, the “Guarantors”)
to the Beneficiary;


 


NOW THEREFORE,
IN CONSIDERATION OF THE USES AND TRUSTS (the “Trust”) ESTABLISHED AND
CONTINUED BY THIS DEED OF TRUST AND IN CONSIDERATION OF TEN DOLLARS ($10) AND
OTHER VALUABLE CONSIDERATION PAID BEFORE DELIVERY OF THIS DEED OF TRUST BY EACH
OF THE TRUSTEE AND THE BENEFICIARY TO THE GRANTOR, WHO HEREBY ACKNOWLEDGES ITS
RECEIPT AND THAT IT IS REASONABLY EQUIVALENT VALUE FOR THIS DEED OF TRUST AND
ALL OTHER SECURITY AND RIGHTS GIVEN BY THE GRANTOR, AND TO SECURE PAYMENT OF
PRINCIPAL AND LAWFUL INTEREST AND PERFORMANCE OF THE FOLLOWING OBLIGATIONS
(collectively, the “Obligations”):


 

















 


(i)                                     Prompt
payment and performance of all obligations of the Grantor under, with respect
to and arising in connection with the Loan Agreement, the Guaranty, this Deed
of Trust and the other Loan Documents to which the Grantor is a party,
including without limitation, all obligations to the Beneficiary for fees,
costs and expenses, including attorneys’ fees, as provided herein or therein;


 


(ii)                                  Payment
of all sums advanced by the Beneficiary or the Trustee to protect the Trust
Property (as defined herein), with interest thereon at the Default Rate (as
defined herein);


 


(iii)                               All
renewals, extensions, amendments, restatements and changes of, or substitutions
or replacements for, all or any part of any of the obligations described in
clause (i) hereof; and


 


(iv)                              Payment
of all sums advanced and costs and expenses incurred by the  Beneficiary (or by the Trustee) in
connection with any of  the foregoing
obligations or in connection with the perfection and the security therefor,
whether such advances, costs and expenses were made or incurred at the request
of the Grantor or the Beneficiary (or the Trustee);


 


THE GRANTOR BY THESE PRESENTS
HEREBY IRREVOCABLY (i) grants, gives, bargains, sells, alienates, enfeoffs,
conveys, confirms, sets over, delivers, assigns and transfers to the Trustee
and its successors and assigns, IN TRUST FOREVER, WITH POWER OF SALE, pursuant
to this Deed of Trust and applicable law, for the benefit of the Beneficiary,
all right, title and interest of the Grantor now owned, or hereafter acquired,
in and to the property, rights and interests hereinafter described in granting
clauses (a) through (n) (collectively, the “Trust
Property”) that are real property (collectively, the “RP Collateral”) under the laws of the
state of Texas (subject, however, to the rights of the Beneficiary in any of
the Rents and Leases (as such terms are hereinafter defined)); (ii) assigns and
transfers to the Beneficiary all of the Rents and other benefits derived from
any Leases;  and (iii) grants a security
interest to the Beneficiary in the Trust Property (that are now or hereafter
existing) to the full extent that the Trust Property may be subject to the
Uniform Commercial Code of the state or states where the Trust Property is
situated (collectively, the “UCC Collateral”):


 


(a)                                  the
Premises and the buildings and improvements owned by the Grantor now or
hereafter located on the Premises (including all water, sewage and drainage
facilities, wells, treatment plants, supply, collection and distribution
systems or other improvements (the “Improvements”);


 


(b)                                 all
of the estate, right, title, claim or demand of any nature whatsoever of the
Grantor, either in law or in equity, in possession or expectancy, in and to the
Premises or any part thereof;


 


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(c)                                  all
easements, rights-of-way, gores of land, streets, ways, alleys, passages, sewer
rights, waters, water courses, water rights and powers, and all estates,
rights, titles, interests, privileges, liberties, tenements, hereditaments, and
appurtenances of any nature whatsoever, in any way belonging, relating or
pertaining to the Premises (including, without limitation, any and all
development rights, air rights or similar or comparable rights of any nature
whatsoever now or hereafter appurtenant to the Premises or now or hereafter
transferred to the Premises);


 


(d)                                 all
machinery, apparatus, equipment, fittings, fixtures and other property of every
kind and nature whatsoever and all additions thereto and renewals and
replacements thereof, and all substitutions therefor now owned or hereafter
acquired by the Grantor, or in which the Grantor has or shall have an interest,
now or hereafter located upon or in, or attached to, any portion of the
Premises or appurtenances thereto, or located off-site from the Premises but
purchased with the proceeds of the Loan and used or usable in connection with
the present or future operation and occupancy of the Premises and all building
equipment, materials and supplies of any nature whatsoever owned by the
Grantor, or in which the Grantor has or shall have an interest, now or
hereafter located upon the Premises and whether stored at the Premises or
off-site if used in connection with such operation and occupancy (collectively,
the “Equipment”), and the right,
title and interest of the Grantor in and to any of the Equipment which may be
subject to any security agreements (as defined in the Uniform Commercial Code
of the state of Texas (the “Texas UCC”))
superior in lien to the lien of this Deed of Trust and all proceeds and
products of any of the above;


 


(e)                                  all
awards or payments, including interest thereon, and the right to receive the
same, which may be made with respect to the Premises, whether from the exercise
of the right of eminent domain (including any transfer made in lieu of the
exercise of said right), or for any other injury to or decrease in the value of
the Premises;


 


(f)                                    all
leases and other agreements affecting the use or occupancy of the Premises now
or hereafter entered into (the “Leases”)
and the right to receive and apply the rents, issues and profits of the
Premises (the “Rents”) to the
payment of the Obligations;


 


(g)                                 all
right, title and interest of the Grantor in and to (i) all contracts from
time to time executed by the Grantor or any manager or agent on its behalf
relating to the ownership, construction, maintenance, repair, operation,
occupancy, sale or financing of the Premises or any part thereof and all
agreements relating to the purchase or lease of any portion of the Premises or
any property which is adjacent or peripheral to the Premises, together with the
right to exercise such options and all leases of Equipment, (ii) all
consents, licenses (to the extent such grant is permitted by law), building
permits, certificates of occupancy and other governmental approvals relating to
construction, completion, occupancy, use or operation of the Premises or any
part thereof, and (iii) all drawings, plans, specifications and similar or
related items relating to the Premises;


 


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(h)                                 all
trade names, trademarks, logos, copyrights, good will and books and records
relating to or used in connection with the operation of the Premises or any
part thereof; all general intangibles related to the operation of the Premises
now existing or hereafter arising;


 


(i)                                     all
accounts and revenues arising from the operation of the Premises, including,
without limitation, (i) any right to payment now existing or hereafter
arising for goods sold or for services rendered, whether or not yet earned by
performance, arising from the operation of the Premises and (ii) all
rights to payment from any consumer credit-charge card organization or entity,
including, without limitation, payments arising from the use of the American
Express Card, the Visa Card, the Carte Blanche Card, the Mastercard, the
Discover Card or any other credit card, including those now existing or
hereafter created, substitutions therefor, proceeds thereof (whether cash or
non-cash, movable or immovable, tangible or intangible) received upon the sale,
exchange, transfer, collection or other disposition or substitution thereof and
any and all of the foregoing and proceeds therefrom;


 


(j)                                     all
proceeds of and any unearned premiums on any insurance policies covering the
Premises, including, without limitation, the right to receive and apply the
proceeds of any insurance, judgments, or settlements made in lieu thereof, for
damage to the Premises and all refunds of Taxes (as herein defined);


 


(k)                                  all
wastewater, fresh water and other utilities capacity and facilities (the “Utilities
Capacity”) available or allocable to the Premises and Improvements
or dedicated to or reserved for them pursuant to any system, program, contract
or other arrangement with any public or private utility, and all related or
incidental licenses, rights and interests, whether considered to be real,
personal or mixed property, including the right and authority to transfer or
relinquish any or all such rights and the right to any credit, refund,
reimbursement or rebate for utilities facilities construction or installation
or for any reservation fee, standby fee or capital recovery charge promised,
provided or paid for by the Grantor, to the full extent now allocated or
allocable to the Premises or Improvements, plus all additional Utilities
Capacity, if any, not dedicated or reserved to the Premises or Improvements but
which is now or hereafter owned or controlled by the Grantor, to the full
extent that such additional Utilities Capacity is necessary to allow
development, marketing and use of the Premises or Improvements for their
highest and best use;


 


(l)                                     all
existing and future minerals, oil, gas and other hydrocarbon substances in,
upon, under or through the Premises;


 


(m)                               the
right, in the name and on behalf of the Grantor, to appear in and defend any
action or proceeding brought with respect to the Premises and to commence any
action or proceeding to protect the interest of the Beneficiary in the
Premises; and


 


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(n)                                 all
rights and estates in reversion or remainder to any existing and future
corrections, modifications, supplements or amendments to, or renewals,
extensions or ratifications of, or replacements or substitutions for, or
accessions, additions or attachments to, or proceeds (both cash and non-cash)
of, any of the foregoing, and all privileges and appurtenances thereunto
belonging.


 


IN FURTHERANCE
OF THE FOREGOING GRANTS, BARGAINS, SALES, ASSIGNMENTS, TRANSFERS, AND
CONVEYANCES, AND TO PROTECT THE TRUST PROPERTY AND THE SECURITY GRANTED BY THIS
DEED OF TRUST, THE GRANTOR COVENANTS AND AGREES WITH AND REPRESENTS AND
WARRANTS TO THE BENEFICIARY AS FOLLOWS:


 


1.                                       Payment
of Obligations.


 


The Grantor
will pay the Obligations at the time and in the manner provided for its payment
in the Guaranty, the Loan Agreement and the other Loan Documents to which the
Grantor is a party.


 


2.                                       Habendum
and Warranty of Title.


 


TO HAVE AND TO
HOLD the Trust Property, together with every right, privilege, hereditament and
appurtenance belonging or appertaining to it, unto the Trustee, his successors
or substitutes in the Trust and his or their assigns, forever.  The Grantor represents that the Grantor is
the lawful owner of the RP Collateral with good right and authority to encumber
and convey it, and that the RP Collateral is free and clear of all liens,
claims and encumbrances, subject to the terms and conditions of the title
exceptions expressly set forth in the title insurance policy issued to the
Beneficiary in connection with the Loan and insuring the lien of this Deed of
Trust.  The Grantor hereby binds the
Grantor and the Grantor’s successors and assigns to forever WARRANT and DEFEND
the Trust Property and every part of it unto the Trustee, his successors or
substitutes in the Trust, and his or their assigns, against the claims and
demands of every person whomsoever lawfully claiming or to claim it or any part
of it (such warranty to supersede any provision contained in this Deed of Trust
limiting the liability of the Grantor), subject to the terms and condition of
the title exceptions expressly set forth in the title insurance policy issued
to the Beneficiary in connection with the Loan and insuring the lien of this
Deed of Trust.


 


3.                                       Insurance.


 


At all times
prior to the termination of this Deed of Trust, the Grantor (i) will keep
the Improvements and the Equipment insured against loss or damage by fire,
standard extended coverage perils and such other hazards as the Beneficiary
shall from time to time require in amounts approved by the Beneficiary on a
so-called “special form” policy, which


 


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amounts shall in no event be
less than 100% of the full insurable replacement value of the Improvements and
the Equipment and shall be sufficient to meet all applicable co-insurance
requirements and will maintain such other forms of insurance coverage with
respect to the Trust Property as the Beneficiary shall require, and
(ii) will maintain rental and business interruption insurance and such
other insurance as the Beneficiary may from time to time require, in amounts
approved by the Beneficiary, including, without limitation, comprehensive
general public liability insurance covering injury and damage to persons and
property naming the Beneficiary as an additional insured.  All policies of insurance (the “Policies”) shall be issued by insurers having
a minimum policy holders rating of “A-” per the latest rating publication of
Property and Casualty Insurers by A.M. Best Company and shall have a financial
size category of not less than IX, and who are lawfully doing business in the
state of Texas and are otherwise acceptable in all respects to the
Beneficiary.  All Policies shall include
a provision that such Policy (a) will not be cancelled, altered or in any way
limited in coverage or reduced in amount unless the Beneficiary is notified in
writing at least thirty (30) days prior to such cancellation or change and (b)
shall contain a mortgagee non-contribution clause endorsement or an equivalent
endorsement satisfactory to the Beneficiary naming the Beneficiary as the
person to which all payments made by the insurer thereunder shall be paid and
shall otherwise be in form and substance satisfactory in all respects to the
Beneficiary.  Blanket insurance policies
shall not be acceptable for the purposes of this Paragraph 3 unless otherwise
approved to the contrary by the Beneficiary. 
The Grantor shall pay the premiums for the Policies as the same become
due and payable.  At the request of the
Beneficiary, the Grantor will deliver the Policies to the Beneficiary.  Not later than ten (10) days prior to the
expiration date of each of the Policies, the Grantor will deliver to the
Beneficiary a renewal policy or policies marked “premium paid” or accompanied
by other evidence satisfactory to the Beneficiary that the Policies are in
effect and the premiums have been paid. 
If at any time the Beneficiary is not in receipt of written evidence
that all insurance required hereunder is in full force and effect, the
Beneficiary shall have the right without notice to the Grantor to take such
action as the Beneficiary deems necessary to protect its interest in the Trust
Property, including, without limitation, the obtaining of such insurance
coverage as the Beneficiary in its sole discretion deems appropriate, and all
expenses incurred by the Beneficiary in connection with such action or in
obtaining such insurance and keeping it in effect shall be paid by the Grantor
to the Beneficiary upon demand.  The
Grantor shall at all times comply with and shall cause the Improvements and Equipment
and the use, occupancy, operation, maintenance, alteration, repair and
restoration thereof to comply with the terms, conditions, stipulations and
requirements of the Policies.  If the
Premises, or any portion of the Improvements or the Equipment, is located in a
Federally designated “special flood hazard area,” in addition to the other
Policies required under this Paragraph 3, a flood insurance policy shall be
delivered by the Grantor to the Beneficiary. 
If no portion of the Premises is located in a Federally designated
“special flood hazard area” such fact shall be substantiated by a certificate
in form satisfactory to the Beneficiary from a licensed surveyor, appraiser or
professional engineer or other qualified person.  If the Trust Property shall be damaged or destroyed, in whole or
in part, by fire or other property hazard or casualty, the Grantor shall give
prompt notice thereof to the Beneficiary. 
Sums paid to the Beneficiary by any insurer may be retained and


 


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applied by the Beneficiary
toward payment of the Obligations, or held as cash collateral therefor, whether
or not then due and payable in such order, priority and proportions as the
Beneficiary in its discretion shall deem proper or, at the discretion of the
Beneficiary, the same may be paid, either in whole or in part, to the Grantor
for such purposes as the Beneficiary shall designate.  If the Beneficiary shall receive and retain such insurance
proceeds, the lien of this Deed of Trust shall be reduced only by the amount
thereof received and retained by the Beneficiary and actually applied by the
Beneficiary in reduction of the Obligations.


 


4.                                       Payment
of Taxes, etc.


 


(a) The
Grantor shall pay all taxes, assessments, water rates, sewer rents and other
charges, including vault charges and license fees for the use of vaults, chutes
and similar areas adjoining the Premises, now or hereafter levied or assessed
against the Trust Property and the Premises (the “Taxes”) prior to the date upon which any fine, penalty,
interest or cost may be added thereto or imposed by law for the nonpayment
thereof, and the Grantor shall deliver to the Beneficiary, upon request,
receipted bills, canceled checks and other evidence satisfactory to the
Beneficiary evidencing the payment of the Taxes prior to the date upon which
any fine, penalty, interest or cost may be added thereto or imposed by law for
the nonpayment thereof.


 


(b)                                 After
prior notice to the Beneficiary, in the case of any material item, the Grantor,
at its own expense, may contest by appropriate legal proceeding, promptly
initiated and conducted in good faith and with due diligence, the amount or
validity or application in whole or in part of any of the Taxes, provided that
(i) no default shall have occurred and shall be continuing under the Guaranty
or this Deed of Trust, (ii) such proceeding shall suspend the collection of the
contested Taxes from the Grantor and from the Trust Property, (iii) such
proceeding shall be permitted under and be conducted in accordance with the
provisions of any other instrument to which the Grantor or the Trust Property
is subject and shall not constitute a default thereunder, (iv) neither the
Trust Property nor any part thereof nor any interest therein will in the
opinion of the Beneficiary be in danger of being sold, forfeited, terminated,
canceled or lost, and (v) the Grantor shall have set aside in an
interest-bearing account with the Beneficiary, and otherwise in a manner
satisfactory to the Beneficiary, adequate cash reserves for the payment of the
contested Taxes, together will all interest and penalties thereon, or in the
alternative the Grantor shall have furnished such security as may be required
in the proceeding, or as may otherwise be requested or required by the
Beneficiary to insure the payment of the contested Taxes, together with all
interest and penalties thereon, and, provided further, that if at any time the
Beneficiary determines, in its sole and absolute discretion, that payment of
any tax, assessment or other charge shall become necessary to prevent the
delivery of a tax deed conveying the Trust Property or any portion thereof
because of non-payment of any such sums, then the Grantor shall pay or cause to
be paid the sums in sufficient time to prevent the delivery of such tax deed.


 


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(c)                                  If
a default shall occur under the Guaranty or this Deed of Trust either prior to,
or after, initiating said proceeding, the Beneficiary shall have the right to
either initiate or continue said proceeding, as the case may be, either in its
own name or as agent of the Grantor. 
The Grantor shall cooperate with the Beneficiary and make available to
the Beneficiary upon demand any and all information, and execute any documents
or pleadings, which the Beneficiary may reasonably require.  The Beneficiary shall then conduct said
proceeding in a manner it deems appropriate, and at its own expense, subject to
any right of reimbursement from the Grantor in accordance with the provisions
of this Deed of Trust.


 


 


5.                                       Escrow
Fund.


 


The Grantor
will, at the option of the Beneficiary, pay to the Beneficiary on the first day
of each calendar month one-twelfth of an amount (the “Escrow Fund”) which would be sufficient to pay the Taxes
payable, or estimated by the Beneficiary to be payable, during the ensuing
twelve (12) months.  The
Beneficiary will apply the Escrow Fund to the payment of Taxes which are
required to be paid by the Grantor pursuant to the provisions of this Deed of
Trust.  If the amount of the Escrow Fund
shall exceed the amount of the Taxes payable by the Grantor pursuant to the
provisions of this Deed of Trust, the Beneficiary shall, in its discretion,
(a) return any excess to the Grantor, or (b) credit such excess
against future payments to be made to the Escrow Fund.  In returning such excess, the Beneficiary
may deal with the person shown on the records of the Beneficiary to be the
owner of the Trust Property.  If the
Escrow Fund is not sufficient to pay the Taxes, as the same become payable, the
Grantor shall pay to the Beneficiary, upon request, an amount which the
Beneficiary shall estimate as sufficient to make up the deficiency.  Any amounts in the Escrow Fund may not be
commingled with the general funds of the Beneficiary and shall constitute
additional security for the Obligations and shall bear interest.


 


6.                                       Condemnation.


 


Notwithstanding
any taking of all or any portion of the Trust Property by any public or
quasi-public authority through eminent domain or otherwise, the Grantor shall
continue to pay the Obligations at the times and in the manner provided
therefor in the Guaranty, this Deed of Trust and the other Loan Documents, and
the Obligations shall not be reduced until any award or payment therefor shall
have been actually received and applied by the Beneficiary to the reduction of
the Obligations.  The Beneficiary may
hold such award or payment  as cash
collateral for the Obligations and/or apply all or any of the same to the
reduction of the Obligations whether or not then due and payable in such order,
priority and proportions as the Beneficiary in its discretion shall deem
proper.  If the Trust Property is sold,
through foreclosure or otherwise, prior to the receipt by the Beneficiary of
such award or payment, the Beneficiary shall have the right, whether or not a
deficiency judgment shall have been sought, recovered or denied with respect to
the Obligations, to receive such award or payment, or a portion thereof


 


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sufficient to pay the
Obligations, whichever is less.  The
Grantor shall file and prosecute its claim or claims for any such award or
payment in good faith and with due diligence and cause the same to be collected
and paid over to the Beneficiary.  The
Grantor hereby irrevocably authorizes and empowers the Beneficiary, in the name
of the Grantor or otherwise, to collect and receipt for any such award or
payment and to file and prosecute such claim or claims.  Although it is hereby expressly agreed that
the same shall not be necessary in any event, the Grantor shall, upon demand of
the Beneficiary, make, execute and deliver any and all assignments and other
instruments sufficient for the purpose of assigning any such award or payment
to the Beneficiary, free and clear of any encumbrances of any kind or nature
whatsoever.


 


7.                                       Leases
and Rents.


 


(a)                                  The
Grantor hereby absolutely and unconditionally assigns, sells, transfers and
conveys all of the right, title and interest in and to all Leases and all
renewals, replacements and guarantees thereof along with all of the Rents to
the Beneficiary.  This assignment is
absolute in nature and not an assignment for additional security only.  Subject to the terms of this Paragraph 7,
until the occurrence of an Event of Default, the Grantor shall have the right
under a retained and reserved license (but limited as provided herein) to
collect Rents and each tenant may pay Rents directly to Grantor; but after an
Event of Default, the Grantor’s license shall automatically terminate and be
revoked and to the extent Grantor collects any Rents thereafter accruing or
paid, Grantor covenants to hold all such Rents in trust for the use and benefit
of Beneficiary.  Following such
revocation of Grantor’s license, each tenant is hereby authorized and directed
to pay directly to Beneficiary all Rents thereafter accruing or payable, and
the Beneficiary may retain and apply the Rents toward payment of the
Obligations, in such order, priority and proportions as the Beneficiary, in its
discretion, shall deem proper, or to the operation, maintenance and repair of
the Trust Property, and irrespective of whether the Beneficiary shall have
commenced any sale or foreclosure of this Deed of Trust or shall have applied
or arranged for the appointment of a receiver. 
The Grantor represents that as of the date of this Deed of Trust there
are no Leases affecting all or any part of the Trust Property.  The Grantor shall not, without the consent
of the Beneficiary, make, or suffer to be made, any Leases or modify or cancel
any Leases, or accept prepayments of installments of the Rents for a period of
more than one (1) month in advance or further assign the whole or any part of
the Rents.  Notwithstanding the
foregoing, the Beneficiary will not unreasonably withhold its consent to the
Grantor making a new Lease or renewing an existing Lease provided that (i) no
Event of Default has occurred hereunder and (ii) such new or renewed Lease is
(a) for actual occupancy, (b) at market rents, (c) for a reputable use as
reasonably determined by the Beneficiary and (d) made pursuant to documentation
in form and substance satisfactory in all respect to the Beneficiary.  The Grantor shall (a) fulfill or perform
each and every provision of the Leases on the part of the Grantor to be
fulfilled or performed, (b) promptly send copies of all notices of default
which the Grantor shall send or receive under the Leases to the Beneficiary,
and (c) enforce the performance or observance of the provisions thereof by the
tenants thereunder.  The Grantor shall
from time to time, but not less frequently than once every 180 days, provide to
the Beneficiary a complete and


 


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detailed leasing status report
with respect to the Improvements, which leasing status report shall be in form
and substance satisfactory in all respects to the Beneficiary.  In addition to the rights which the
Beneficiary may have herein, in the event of any default under this Deed of
Trust, the Beneficiary, at its option, may require the Grantor to pay monthly
in advance to the Beneficiary, or any receiver appointed to collect the Rents,
the fair and reasonable rental value for the use and occupation of such part of
the Premises as may be in possession of the Grantor.  Upon default in any such payment, the Grantor will vacate and
surrender possession of the Premises to the Beneficiary, or to such receiver,
and, in default thereof, the Grantor may be evicted by summary proceedings or
otherwise.  Nothing contained in this
Paragraph shall be construed as imposing on the Beneficiary any of the
obligations of the lessor under the Leases or of a “mortgagee in possession”
(or equivalent).


 


(b)                                 The
Grantor acknowledges and agrees that, upon recordation of this Deed of Trust,
the Beneficiary’s interest in the Rents shall be deemed to be fully perfected,
“choate” and enforced as to the Grantor and all third parties, including
without limitation any subsequently appointed trustee in any case under the
Bankruptcy Code (as hereinafter defined), without the necessity of (i)
commencing an action for the sale or foreclosure of the Trust Property, (ii)
furnishing notice to the Grantor or tenants under the Leases, (iii) making
formal demand for the Rents, (iv) taking possession of the Premises, (v)
obtaining the appointment of a receiver of the rents and profits of the
Premises, (vi) sequestering or impounding the Rents, or (vii) taking any other
affirmative action.


 


(c)                                  For
purposes of Section 552(b) of the Bankruptcy Code, the Grantor and the
Beneficiary agree that this Deed of Trust shall constitute a “security
agreement,” that the security interest created by such security agreement
extends to property of the Grantor acquired before the commencement of a case
in bankruptcy and to all amounts paid as Rents and that such security interest
shall extend to all Rents acquired by the estate after the commencement of a
case in bankruptcy.


 


(d)                                 The
Grantor acknowledges and agrees that all Rents shall be deemed to be “Cash
Collateral” under Section 363 of the Bankruptcy Code in the event that the
Grantor files a voluntary petition in bankruptcy or is made subject to any
involuntary bankruptcy proceeding. 
After the filing of such petition, the Grantor may not use Cash
Collateral without the consent of the Beneficiary and/or an order of any
bankruptcy court pursuant to Section 363(b)(2) of the Bankruptcy Code.


 


(e)                                  It
is agreed and understood that the Beneficiary hereby reserves the right and
shall have the right, at any time and from time to time, without the consent or
joinder of any other party, to subordinate this Deed of Trust and the liens,
assignments and security interests created by this Deed of Trust to all or any
of the Leases regardless of the respective priority of any of such Leases and
this Deed of Trust.  Upon doing so, a foreclosure
of the Beneficiary’s liens,


 


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assignments and security
interests under this Deed of Trust shall be subject to and shall not operate to
extinguish any of said Leases as to which such subordination is operative.


 


8.                                       Maintenance
of the Trust Property.


 


The Grantor
intends to renovate the Trust Property for use as a Smith & Wollensky
restaurant, and the Grantor has provided general plans and specifications for
such renovation and improvements (for informational purposes only) to the
Beneficiary (such renovation and improvements are hereinafter referred to as
the “Contemplated Improvements”).  The Contemplated Improvements shall (i) be
performed in accordance with sound construction practices, (ii) comply with all
governmental laws, orders, ordinances, rules and regulations and (iii) be in
accordance with the terms and conditions of this Deed of Trust and the other
Loan Documents.  The Beneficiary shall
not unreasonably withhold its consent to the Grantor’s request to grant any
utility easement affecting the Trust Property, provided that any such utility
easement shall benefit only the Trust Property and shall exclusively serve the
Smith and Wollensky restaurant to be constructed as part of the Contemplated
Improvements.  The Grantor shall cause
the Trust Property to be maintained in good condition and repair and will not
commit or suffer to be committed any waste of the Trust Property.  Except for the Contemplated Improvements,
the Improvements and the Equipment shall not be removed, demolished or
materially altered (except for normal replacement of the Equipment), without
the prior written consent of the Beneficiary. 
The Grantor shall promptly comply with all existing and future
governmental laws, orders, ordinances, rules and regulations affecting the
Trust Property, or any portion thereof or the use thereof.  The Grantor shall promptly repair, replace
or rebuild any part of the Trust Property which may be damaged or destroyed by
fire or other property hazard or casualty (including any fire or other property
hazard or casualty for which insurance was not obtained or obtainable) or which
may be affected by any taking by any public or quasi-public authority through
eminent domain or otherwise, and shall complete and pay for, within a
reasonable time, any structure at any time in the process of construction or
repair on the Premises.  If such fire or
other property hazard or casualty shall be covered by the Policies, the
Grantor’s obligation to repair, replace or rebuild such portion of the Trust
Property shall be contingent upon the Beneficiary paying the Grantor the
proceeds of the Policies, or such portion thereof as shall be sufficient to
complete such repair, replacement or rebuilding, whichever is less.  The Grantor will not, without obtaining the
prior consent of the Beneficiary (which consent shall not be unreasonably
withheld or delayed) initiate, join in or consent to any private restrictive
covenant, zoning ordinance, or other public or private restrictions, limiting
or affecting the uses which may be made of the Trust Property or any part
thereof.


 


9.                                       Environmental
Provisions.


 


(a)                                  For
the purposes of this Paragraph 9, the following terms shall have the following
meanings:  (i) the term “Hazardous Material” shall mean any material
or substance that, whether by its nature or use, is now or hereafter defined or
regulated as a hazardous waste,


 


11

















 


hazardous substance, pollutant
or contaminant under any Environmental Requirement, or which is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous or which is or contains petroleum, gasoline,
diesel fuel, another petroleum hydrocarbon product, asbestos,
asbestos-containing materials or polychlorinated biphenyls, (ii) the “Environmental Requirements” shall
collectively mean all present and future laws, statutes, common law,
ordinances, rules, regulations, orders, codes, licenses, permits, decrees,
judgments, directives or the equivalent of or by any Governmental Authority and
relating to or addressing the protection of the environment or human health,
and (iii) the term “Governmental
Authority”  shall mean the
Federal government, or any state or other political subdivision thereof, or any
agency, court or body of the Federal government, any state or other political
subdivision thereof, exercising executive, legislative, judicial, regulatory or
administrative functions.


 


(b)                                 The
Grantor hereby represents and warrants to the Beneficiary to the best of its
knowledge that (i) except as specifically set forth in the Real Estate
Transaction Screen dated November 18, 2002 prepared by National Assessment
Corporation, no Hazardous Material is currently located at, on, in, under or
about the Trust Property in violation of any Environmental Requirements,
(ii) no releasing, emitting, discharging, leaching, dumping, disposing or
transporting of any Hazardous Material from the Trust Property onto any other
property or from any other property onto or into the Trust Property has
occurred or is occurring in violation of any Environmental Requirement,
(iii) no notice of violation, non-compliance, liability or potential
liability, lien, complaint, suit, order or other notice with respect to the
Trust Property is presently outstanding under any Environmental Requirement,
nor does the Grantor have knowledge or reason to believe that any such notice
will be received or is being threatened, and (iv) the Trust Property and
the operation thereof are in full compliance with all Environmental
Requirements.


 


(c)                                  The
Grantor shall comply, and shall cause all tenants or other occupants of the
Trust Property deriving their interests through the Grantor to comply, in all
respects with all Environmental Requirements, and will not generate, store,
handle, process, dispose of or otherwise use, and will not permit any tenant or
other occupant of the Trust Property to generate, store, handle, process,
dispose of or otherwise use, Hazardous Materials at, in, on, or about the Trust
Property in a manner that could lead or potentially lead to the imposition on
the Grantor, the Beneficiary or the Trust Property of any liability or lien of
any nature whatsoever under any Environmental Requirement.  The Grantor shall notify the Beneficiary
promptly in the event of any spill or other release of any Hazardous Material
at, in, on, under or about the Trust Property which is required to be reported
to a Governmental Authority under any Environmental Requirement, will promptly
forward to the Beneficiary copies of any notices received by the Grantor
relating to alleged violations of any Environmental Requirement or any
potential liability under any Environmental Requirement and will promptly pay
when due any fine or assessment against the Beneficiary, the Grantor or the
Trust Property relating to any Environmental Requirement.  If at any time it is determined that the
operation or use of the Trust


 


12

















 


Property is in violation of any
applicable Environmental Requirement or that there are Hazardous Materials
located at, in, on, under or about the Trust Property which violate any
applicable Environmental Requirement or that there are Hazardous Materials
located at, in, on, under or about the Trust Property which, under any
Environmental Requirement, require special handling in collection, storage,
treatment or disposal, or any form of cleanup or corrective action, the Grantor
shall, within thirty (30) days after receipt of notice thereof from any
Governmental Authority or from the Beneficiary, take, at the Grantor’s sole
cost and expense, such actions as may be necessary to fully comply in all
respects with all Environmental Requirements, provided, however, that if such compliance
cannot reasonably be completed within such thirty (30) day period, the Grantor
shall commence such necessary action within such thirty (30) day period and
shall thereafter diligently and expeditiously proceed to fully comply in all
respects and in a timely fashion with all Environmental Requirements.


 


(d)                                 If
the Grantor fails to timely take, or to diligently and expeditiously proceed to
complete in a timely fashion (as determined by the Beneficiary in its sole and
absolute discretion), any such action described in clause (c) above, the
Beneficiary may, in its sole and absolute discretion, make advances or payments
toward the performance or satisfaction of the same, but shall in no event be
under any obligation to do so.  All sums
so advanced or paid by the Beneficiary (including, without limitation, counsel
and consultant fees and expenses, investigation and laboratory fees and
expenses, and fines or other penalty payments) and all sums advanced or paid in
connection with any judicial or administrative investigation or proceeding
relating thereto, will immediately, upon demand, become due and payable from
the Grantor and shall bear interest at the Default Rate from the date any such
sums are so advanced or paid by the Beneficiary until the date any such sums
are repaid by the Grantor to the Beneficiary. 
The Grantor will execute and deliver, promptly upon request, such
instruments as the Beneficiary may deem useful or necessary to permit the
Beneficiary to take any such action, and such additional notes and instruments,
as the Beneficiary may require to secure all sums so advanced or paid by the
Beneficiary.  If a lien is filed against
the Trust Property by any Governmental Authority resulting from the need to expend
or the actual expending of monies arising from an action or omission, whether
intentional or unintentional, of the Grantor or for which the Grantor is
responsible, resulting in the releasing, spilling, leaking, leaching, pumping,
emitting, pouring, emptying or dumping of any Hazardous Material into the
waters or onto land located within or without the state of Texas where the
Trust Property is located, then the Grantor will, within thirty (30) days from
the date that the Grantor is first given notice that such lien has been placed
against the Trust Property (or within such shorter period of time as may be
specified by the Beneficiary if such Governmental Authority has commenced steps
to cause the Trust Property to be sold pursuant to such lien), either
(i) pay the claim and remove the lien, or (ii) furnish a cash
deposit, bond, or such other security with respect thereto as is satisfactory
in all respects to the Beneficiary and is sufficient to effect a complete
discharge of such lien on the Trust Property.


 


13

















 


(e)                                  The
Beneficiary may, at its option, at any time or times, but not more than one
time per year, cause an environmental audit of the Trust Property or portions
thereof to be conducted to confirm the Grantor’s compliance with the provisions
of this Paragraph 9; provided, however, the Grantor shall not unreasonably
withhold its consent to the Beneficiary’s request to cause an environmental
audit more than one time per year.  In
addition, the Beneficiary may, at its option if the Beneficiary reasonably
believes that a Hazardous Material or other environmental condition violates or
threatens to violate any Environmental Requirement, cause an environmental
audit of the Trust Property or portions thereof to be conducted to confirm the
Grantor’s compliance with the provisions of this Paragraph 9.  The Grantor shall cooperate in all
reasonable ways with the Beneficiary in connection with any such audit.  If any audit discloses that a violation of
or a liability under an Environmental Requirement exists, or if such audit was
required by the Beneficiary under the second sentence of this subparagraph (e),
or was prescribed by law, regulation or governmental or quasi-governmental
authority, the Grantor shall pay all costs and expenses incurred in connection
with such audit; otherwise, the costs and expenses of such audit shall,
notwithstanding anything to the contrary set forth in this Paragraph 9, be paid
by the Beneficiary.


 


(f)                                    If
this Deed of Trust is foreclosed, or if the Trust Property is sold pursuant to
the provisions of this Deed of Trust, or if the Grantor tenders a deed or
assignment in lieu of foreclosure or sale, the Grantor shall deliver the Trust
Property to the purchaser at foreclosure or sale or to the Beneficiary, its
nominee, or wholly-owned subsidiary, as the case may be, in a condition that
complies in all respects with all Environmental Requirements.


 


(g)                                 The
Grantor will defend, indemnify, and hold harmless the Beneficiary, its
employees, agents, officers, and directors, from and against any and all
claims, demands, penalties, causes of action, fines, liabilities, settlements,
damages, costs, or expenses of whatever kind or nature, known or unknown,
foreseen or unforeseen, contingent or otherwise (including, without limitation,
counsel and consultant fees and expenses, investigation and laboratory fees and
expenses, court costs, and litigation expenses) arising out of, or in any way
related to, (i) any breach by the Grantor of any of the provisions of this
Paragraph 9, (ii) the presence, disposal, spillage, discharge,
emission, leakage, release, or threatened release of any Hazardous Material
which is at, in, on, under, about, from or affecting the Trust Property,
including, without limitation, any damage or injury resulting from any such
Hazardous Material to or affecting the Trust Property or the soil, water, air,
vegetation, buildings, personal property, persons or animals located on the
Trust Property or on any other property or otherwise, (iii) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to any such Hazardous Material, (iv) any lawsuit brought
or threatened, settlement reached, or order or directive of or by any
Governmental Authority relating to such Hazardous Material, or (v) any
violation of any Environmental Requirement or any policy or requirement of the
Beneficiary hereunder.  The aforesaid
indemnification shall, notwithstanding any exculpatory or other provision of any
other document or instrument now or hereafter executed and delivered in


 


14

















 


connection with the Guaranty,
constitute the personal recourse undertakings, obligations and liabilities of
the Grantor.


 


(h)                                 The
obligations and liabilities of the Grantor under this Paragraph 9 shall survive
and continue in full force and effect and shall not be terminated, discharged
or released, in whole or in part, irrespective of whether the Obligations have
been paid in full and irrespective of any foreclosure of this Deed of Trust,
sale of the Trust Property pursuant to the provisions of this Deed of Trust or
acceptance by the Beneficiary, its nominee or affiliate of a deed or assignment
in lieu of foreclosure or sale and irrespective of any other fact or circumstance
of any nature whatsoever.


 


10.                                 Estoppel
Certificates.


 


The Grantor,
within fifteen (15) days after request by the Beneficiary and at its expense,
will furnish the Beneficiary with a statement, duly acknowledged and certified,
setting forth the amount of the Obligations and the offsets or defenses
thereto, if any.


 


11.                                 Transfer
or Encumbrance of the Trust Property.


 


(a) No part of
the Trust Property nor any interest of any nature whatsoever therein, nor any
interest of any nature whatsoever in the Grantor (whether stock, equity,
beneficial, profit, loss or otherwise) shall in any manner, directly or
indirectly, be further encumbered, sold, transferred or conveyed, or permitted
to be further encumbered, sold, transferred, assigned or conveyed without the
prior consent of the Beneficiary, which consent in any and all circumstances
may be withheld in the sole and absolute discretion of the Beneficiary.  The provisions of the foregoing sentence of
this Paragraph 11 shall apply to each and every such further encumbrance, sale,
transfer, assignment or conveyance, regardless of whether or not the
Beneficiary has consented to, or waived by its action or inaction its rights
hereunder with respect to, any such previous further encumbrance, sale,
transfer, assignment or conveyance, and irrespective of whether such further
encumbrance, sale, transfer, assignment or conveyance is voluntary, by reason
of operation of law or is otherwise made.


 


(b)                                 Anything
contained in this Paragraph 11 to the contrary notwithstanding, indirect
transfers of interests in the Grantor arising from transfers of interests in
The Smith & Wollensky Restaurant Group, Inc. shall not be a default
hereunder provided that such transfers do not constitute a Change in Control
(as defined in the Loan Agreement) in The Smith & Wollensky Restaurant
Group, Inc.


 


15

















 


12.                                 Notice.


 


Any notice,
request, demand, statement, authorization, approval or consent made hereunder
shall be in writing and shall be addressed, delivered and deemed delivered as
provided in the Loan Agreement.


 


13.                                 Sale
of Trust Property.


 


If this Deed
of Trust is foreclosed, the Trust Property, or any interest therein, may, at
the discretion of the Beneficiary, be sold in one or more parcels or in several
interests or portions and in any order or manner.


 


14.                                 Changes
in Laws Regarding Taxation.


 


In the event
of the passage after the date of this Deed of Trust of any law of the state of
Texas deducting from the value of real property for the purpose of taxation any
lien or encumbrance thereon or changing in any way the laws for the taxation of
deeds of trust or mortgages or the obligations secured by deeds of trust or
mortgages for state or local purposes or the manner of the collection of any
such taxes, and imposing a tax, either directly or indirectly, on the Loan
Agreement, this Deed of Trust, the Guaranty or the Obligations, the Grantor
shall, if permitted by law, pay any tax imposed as a result of any such law
within the statutory period or within twenty (20) days after demand by the
Beneficiary, whichever is less, provided, however, that if, in the opinion of
the attorneys for the Beneficiary, the Grantor is not permitted by law to pay
such taxes, the Beneficiary shall have the right, at its option, to declare the
Obligations due and payable on a date specified in a prior notice to the
Grantor of not less than thirty (30) days.


 


15.                                 No
Credits on Account of the Obligations.


 


The Grantor
will not claim or demand or be entitled to any credit or credits on account of
the Obligations for any part of the Taxes assessed against the Trust Property
or any part thereof and no deduction shall otherwise be made or claimed from
the taxable value of the Trust Property, or any part thereof, by reason of this
Deed of Trust or the Obligations.  If at
any time this Deed of Trust shall secure less than all of the principal amount
of the Obligations, it is expressly agreed that any repayment of any portion of
the Obligations shall not reduce the amount of the lien of this Deed of Trust
until the lien amount shall equal the principal amount of the Obligations
outstanding.


 


16.                                 Offsets,
Counterclaims and Defenses.


 


Any assignee
of this Deed of Trust, the Guaranty and/or the Obligations shall take the same
free and clear of all offsets, counterclaims or defenses of any nature
whatsoever which the Grantor may have against any assignor of this Deed of
Trust, the Guaranty and the Loan Agreement, and no such offset, counterclaim or
defense shall be interposed or asserted by the Grantor in any action or
proceeding brought by any such assignee upon this Deed of Trust, the


 


16

















 


Note or the Loan Agreement, and
any such right to interpose or assert any such offset, counterclaim or defense
in any such action or proceeding is hereby expressly waived by the Grantor.


 


17.                                 Other
Security for the Obligations.


 


The Grantor
shall observe and perform all of the terms, covenants and provisions contained
in the Loan Agreement, the Guaranty and the other Loan Documents to which the
Grantor is a party.


 


18.                                 Documentary
Stamps.


 


If at any time
the United States of America, any state thereof, or any governmental
subdivision of any such state, shall require revenue or other stamps to be
affixed to the Guaranty or this Deed of Trust, then except to the extent
prohibited under the laws of the state of Texas, the Grantor will pay for the
same, with interest and penalties thereon, if any.


 


19.                                 Right
of Entry.


 


Upon prior
notice, the Beneficiary and its agents shall have the right to enter and
inspect the Trust Property at all reasonable times.


 


20.                                 Books
and Records.


 


In addition to
the covenant regarding the keeping of books and records set forth in the Loan
Agreement, the Grantor will keep and maintain or will cause to be kept and
maintained on a fiscal year basis in accordance with generally accepted
accounting practices consistently applied, proper and accurate books, records
and accounts reflecting all of the financial affairs of the Grantor and all items
of income and expense in connection with the operation of the Trust Property or
in connection with any services, equipment or furnishings provided in
connection with the operation of the Trust Property, whether such income or
expense be realized by the Grantor or by any other person whatsoever excepting
lessees unrelated to and unaffiliated with the Grantor who have leased from the
Grantor portions of the Trust Property for the purpose of occupying the
same.  The Beneficiary shall have the
right from time to time at all times during normal business hours to examine
such books, records and accounts at the office of the Grantor or other person
maintaining such books, records and accounts and to make copies or extracts
thereof as the Beneficiary shall desire.


 


17

















 


21.                                 Performance
of Other Agreements.


 


The Grantor
shall observe and perform each and every term to be observed or performed by
the Grantor pursuant to the terms of any agreement or recorded instrument affecting
or pertaining to the Trust Property.


 


22.                                 Events
of Default.


 


The occurrence
of any of the following events (“Events of
Default”) shall (except in the case of clause (a) below where no
such exercise of an option shall be necessary to the extent the effect of an
“Event of Default” thereunder is automatic under the terms of the Loan
Agreement itself), at the option of the Beneficiary, make all amounts then
remaining unpaid on the Obligations immediately due and payable, all without
further demand, presentment, notice or other requirements of any kind, all of
which are hereby expressly waived by the Grantor, and the lien, encumbrance and
security interest evidenced or created hereby shall be subject to sale or
foreclosure in any manner provided for herein or provided for by law:


 


(a)                                  if
an “Event of Default” as defined therein shall occur under the Loan Agreement;


 


(b)                                 if
any Federal tax lien is filed against the Grantor which encumbers the


Trust Property and the same is
not discharged of record within thirty (30) days after the same is filed;


 


(c)                                  if
without the consent of the Beneficiary any Improvement or the Equipment (except
for the normal replacement of the Equipment) is removed, demolished or
materially altered (other than in connection with the Contemplated
Improvements), or if the Trust Property is not kept in good condition and
repair;


 


(d)                                 if
the Grantor shall fail to comply with any requirement or order or notice of
violation of law or ordinance issued by any governmental department claiming jurisdiction
over the Trust Property within three (3) months from the issuance thereof, or
the time period set forth therein, whichever is less;


 


(e)                                  if
the Policies are not kept in full force and effect, or if the Policies are not
delivered to the Beneficiary upon request;


 


(f)                                    if
the Grantor shall fail to pay the Beneficiary on demand for all Premiums and/or
Taxes paid by the Beneficiary pursuant to this Deed of Trust, together with any
late payment charge and interest thereon calculated at the Default Rate;


 


18

















 


(g)                                 except
as expressly permitted under paragraph 7 hereof, if without the consent of the
Beneficiary any Leases are made, canceled or modified or if any portion of the
Rents is paid for a period of more than one (1) month in advance or if any
of the Rents are further assigned;


 


(h)                                 if
the Grantor ceases to occupy the entire Premises and the Improvements for the
conducting of the business operated thereon on the date of this Deed of Trust;


 


(i)                                     if
the Trust Property shall become subject (i) to any tax lien by virtue of
any act or omission of the Grantor, other than a lien for local real estate
taxes and assessments not due and payable, or (ii) to any lis pendens,
notice of pendency, stop order, notice of intention to file mechanic’s or
materialman’s lien, mechanic’s or materialman’s lien or other lien of any
nature whatsoever and the same shall not either be discharged of record or in
the alternative insured over to the satisfaction of the Beneficiary by any
title company insuring the lien of this Deed of Trust within 45 days after the
same is filed or recorded, and irrespective of whether the same is superior or
subordinate in lien or other priority to the lien of this Deed of Trust and
irrespective of whether the same constitutes a perfected or inchoate lien or
encumbrance on the Trust Property or is only a matter of record or notice;  or


 


(j)                                     if
the Grantor shall continue to be in default under any of the terms, covenants
or conditions of this Deed of Trust (other than as described in any of
Subparagraphs (a) through (i) of this Paragraph 22) for ten (10) days after
notice from the Beneficiary in the case of any default which can be cured by
the payment of a sum of money or for thirty (30) days after notice from the
Beneficiary in the case of any other default, provided that if such default
cannot reasonably be cured within such thirty (30) day period and the Grantor
shall have commenced to cure such default within such thirty (30) day period
and thereafter diligently and expeditiously proceeds to cure the same, such
thirty (30) day period shall be extended for so long as it shall require the
Grantor in the exercise of due diligence to cure such default, it being agreed
that no such extension shall be for a period in excess of ninety (90) days.


 


23.                                 Remedies.


 


(a)                                  General.  Upon the occurrence
and during the continuance of any one or more Events of Default, the
Beneficiary may, in addition to any rights or remedies available to it
hereunder or under the other Loan Documents, but subject to any applicable
provisions of the Loan Agreement and to the extent permitted by applicable law,
take such action personally or by its agents or attorneys, with or without
entry, and without notice of intent to accelerate, notice of acceleration or
other notice, demand, presentment or protest (each and all of which are hereby
expressly WAIVED), as it deems necessary or advisable to protect and enforce
the Beneficiary’s rights and remedies against the Grantor and in and to the
Trust Property, including, without limitation, the actions described in this
Paragraph 23, each of which may be pursued


 


19

















 


concurrently or otherwise, at
such time and in such order as the Beneficiary may determine, in its sole
discretion, without impairing or otherwise affecting its other capitalized
rights or remedies.


 


(b)                                 Acceleration;
Notice.  Time is of the essence with
respect to the Grantor’s obligations hereunder.  Upon the occurrence of any Event of Default, at the Beneficiary’s
option and in addition to any other remedy the Beneficiary may have under the
Loan Agreement, the Guaranty, and the other Loan Documents, the Beneficiary
may, at its option, declare all sums secured by this Deed of Trust immediately
due and payable (except in the case of an Event of Default under clause 22(a)
above where no such exercise of an option shall be necessary to the extent the
effect of an “Event of Default” thereunder is automatic under the terms of the
Loan Agreement itself) and elect to have the Trust Property sold in the manner
provided herein.


 


(c)                                  Trustee’s
Sale.  It shall be the duty of the
Trustee and of his successors and substitutes in the Trust, on the
Beneficiary’s request (which request is hereby presumed) to enforce the Trust
by selling the RP Collateral at a public sale at auction held between 10 A.M.
and 4 P.M. of the first Tuesday of a month. 
The sale shall take place at the county courthouse in the county in
which the RP Collateral is located, or if it is located in more than one
county, the sale will be made at the courthouse in one of those counties.  The sale shall occur at the area at that
courthouse which the commissioners’ court of that county has designated as the
place where such sales are to take place by designation recorded in the real
property records of that county, or if no area is so designated, then the
notice of sale shall designate the area at the courthouse where the sale
covered by that notice is to take place, and the sale shall occur in that
area.  Notice of the sale shall include
a statement of the earliest time at which the sale will occur and shall be
given at least twenty-one (21) days before the date of the sale (1) by posting
at the courthouse door of each county in which the RP Collateral is located a
written notice designating the county in which the RP Collateral will be sold,
(2) by filing in the Office of the County Clerk of each county in which the RP
Collateral is located a copy of the notice posted under subsection (1) above
and (3) by the holder of the Obligations to which the power of sale is related
serving written notice of the sale by certified mail on each debtor who,
according to the records of a holder of the Obligations, is obligated to pay
those Obligations.  The sale shall begin
at the time stated in the notice of sale or not later than three (3) hours
after that time.  If and to the extent
that Texas Property Code Section 51.001 requires it, if any of the RP
Collateral to be sold is used as a debtor’s residence, a holder of the
Obligations shall serve that debtor with written notice by certified mail
stating that debtor is in default under this Deed of Trust, and that debtor
shall have at least twenty (20) days to cure the default before the entire
Obligations are due and notice of sale is given.  Service of any notice under this Section by certified mail is
complete when the notice is deposited in the United States mail, postage
prepaid and addressed to the debtor entitled to it at that debtor’s last known
address as shown by the records of a holder of the Obligations.  The affidavit of a person knowledgeable of
the facts to the effect that service was completed is prima facie evidence of
service.  After such written notice
shall have been posted and filed, as aforesaid, and such notice shall have been
served upon such debtor or debtors, as aforesaid, the Trustee (or his successor
or substitute then acting) shall perform his duty to enforce the Trust by


 


20

















 


selling the RP Collateral,
either as an entirety or in parcels as the Trustee acting may elect, all rights
to a marshalling of assets or sale in inverse order of alienation being waived,
as aforesaid to the highest bidder or bidders for cash, and make due conveyance
to the purchaser or purchasers, with general warranty, and the title to such
purchaser or purchasers, when so made by the Trustee acting, the Grantor binds
itself, its successors and assigns, to warrant and forever defend against the
claims and demands of every person whomsoever lawfully claiming or to claim the
same or any part thereof (such warranty to supersede any provision contained in
this Deed of Trust limiting the liability of the Grantor).  The provisions of this Deed of Trust with
respect to posting and giving notices of sale are intended to comply with the
provisions of Section 51.002 of the Texas Property Code as in force and effect
on the effective date of this Deed of Trust, and in the event the requirement
for any notice under such Section 51.002 shall be eliminated or the prescribed
manner of giving it shall be modified by future amendment to, or adoption of
any statute superseding, such Section 51.002, the requirement for such
particular notice shall be deemed stricken from or modified in of this Deed of
Trust in conformity with such amendment or superseding statute, effective as of
its effective date.  The manner
prescribed in this Deed of Trust for serving or giving any notice, other than
that to be posted or caused to be posted by the Trustee acting, shall not be
deemed exclusive but such notice or notices may be given in any other manner
permitted by applicable law.  Said sale
shall forever be a bar against the Grantor, its heirs, legal representatives,
successors and assigns, and all other persons claiming under it.  It is expressly agreed that the recitals in
each conveyance to the purchaser shall be full evidence of the truth of the
matters therein stated, and all lawful prerequisites to said sale shall be
conclusively presumed to have been performed. 
The Trustee may require minimum bids at any foreclosure sale and may
cancel and abandon the sale if no bid is received equal to or greater than any
such minimum bid.  If the Trustee or his
substitute or successor should commence the sale, the Beneficiary may at any
time before the sale is completed direct the Trustee to abandon the sale, and
may at any time or times thereafter direct the Trustee to again commence
foreclosure; or, irrespective of whether foreclosure is commenced by the
Trustee, the Beneficiary may at any time after an Event of Default institute
suit for collection of the Obligations or foreclosure of this Deed of
Trust.  If the Beneficiary should
institute suit for collection of the Obligations or foreclosure of this Deed of
Trust, the Beneficiary may at any time before the entry of final judgment
dismiss it and require the Trustee to sell the RP Collateral in accordance with
the provisions of this Deed of Trust. 
No single sale or series of sales by the Trustee or by any substitute or
successor and no judicial foreclosure shall extinguish the lien or exhaust the
power of sale under this Deed of Trust except with respect to the items of
property sold, nor shall it extinguish, terminate or impair the Grantor’s
contractual obligations under this Deed of Trust, but such lien and power shall
exist for so long as, and may be exercised in any manner by law or in this Deed
of Trust provided as often as the circumstances require to give the Beneficiary
full relief under this Deed of Trust, and such contractual obligations shall
continue in full force and effect until final termination of this Deed of
Trust.  The Beneficiary shall have the
right to become the purchaser at any sale made under this Deed of Trust, being
the highest bidder, and credit given upon all or any part of the Obligations
shall be the exact equivalent of cash paid for the purposes of this Deed of
Trust.


 


21

















 


(d)                                 No
Remedy Exclusive.  No remedy
conferred upon or reserved to the Beneficiary under this Deed of Trust shall be
exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to every other remedy given
under this Deed of Trust or any other Loan Document, or now or hereafter
existing at law or in equity or by statute. 
No delay or failure to exercise any right or power accruing upon any
Event of Default shall impair any such right or power or shall be construed to
be a waiver thereof, but any such right or power may be exercised from time to
time and as often as may be deemed expedient.


 


24.                                 Right
to Cure Defaults.


 


If default in
the performance of any of the covenants of the Grantor herein occurs, the
Beneficiary may, at its discretion, remedy the same and for such purpose shall
have the right to enter upon the Trust Property or any portion thereof without
thereby becoming liable to the Grantor or any person in possession thereof
holding under the Grantor.  If the
Beneficiary shall remedy such a default or appear in, defend, or bring any
action or proceeding to protect its interest in the Trust Property or to
foreclose this Deed of Trust or collect the Obligations, the costs and expenses
thereof (including reasonable attorneys’ fees to the extent permitted by law),
with interest as provided in this Paragraph 24, shall be paid by the Grantor to
the Beneficiary upon demand.  All such
costs and expenses incurred by the Beneficiary in remedying such default or in
appearing in, defending, or bringing any such action or proceeding shall be
paid by the Grantor to the Beneficiary upon demand, with interest (calculated
for the actual number of days elapsed on the basis of a 365-366 day year) at a
rate equal to two percentage points above the then applicable rate under the
Note (the “Default  Rate”); provided, however, that the Default
Rate shall in no event exceed the maximum interest rate which the Grantor may
by law pay, for the period after notice from the Beneficiary that such costs or
expenses were incurred to the date of payment to the Beneficiary.  In each such event, such costs, expenses and
amounts, together with interest thereon at the Default Rate, shall be added to
the indebtedness secured by this Deed of Trust and shall be secured by this
Deed of Trust.


 


25.                                 Non-Waiver.


 


The failure of
the Beneficiary to insist upon strict performance of any term of this Deed of
Trust shall not be deemed to be a waiver of any term of this Deed of
Trust.  The Grantor shall not be
relieved of the Grantor’s obligation to pay the Obligations at the time and in
the manner provided therefor in the Guaranty, this Deed of Trust or any other
Loan Documents by reason of (a) failure of the Beneficiary to comply with
any request of the Grantor to take any action to foreclose this Deed of Trust
or otherwise enforce any of the provisions hereof or of any other deed of
trust, instrument or document evidencing, securing or guaranteeing payment of
the Obligations or any portion thereof, (b) the release, regardless of
consideration, of the whole or any part of the Trust Property or any other
security for the Obligations, or (c) any agreement or


 


22

















 


stipulation between the
Beneficiary and any subsequent owner or owners of the Trust Property or other
person extending the time of payment of the Obligations or otherwise modifying
or supplementing the terms of the Guaranty or this Deed of Trust or any other
deed of trust, instrument or document evidencing, securing or guaranteeing
payment of the Obligations or any portion thereof (or of any of the obligations
of the Borrower under the Note, the Loan Agreement or any other Loan Document),
without first having obtained the consent of the Grantor, and in the latter
event, the Grantor shall continue to be obligated to pay the Obligations at the
times and in the manner provided in the Guaranty and this Deed of Trust, as so
extended, modified and supplemented, unless expressly released and discharged
from such obligation by the Beneficiary in writing.  Regardless of consideration, and without the necessity for any
notice to or consent by the holder of any subordinate lien, encumbrance, right,
title or interest in or to the Trust Property, the Beneficiary may release any
person at any time liable for the payment of the Obligations or any portion
thereof or any part of the security held for the Obligations and may extend the
time of payment of the Obligations or otherwise modify the terms of the
Guaranty, this Deed of Trust, the Loan Agreement or any other Loan Document (or
of any of the obligations of the Borrower under the Note, the Loan Agreement or
any other Loan Document) including, without limitation, a modification of the
interest rate, without impairing or affecting this Deed of Trust or the lien or
the priority of this Deed of Trust, as so extended and modified, as security
for the Obligations over any such subordinate lien, encumbrance, right, title
or interest.  The Beneficiary may resort
for the payment of the Obligations to any other security held by the
Beneficiary in such order and manner as the Beneficiary, in its discretion, may
elect.  The Beneficiary may take action
to recover the Obligations, or any portion thereof, or to enforce any covenant
hereof without prejudice to the right of the Beneficiary thereafter to realize
on the collateral covered by this Deed of Trust.  The Beneficiary shall not be limited exclusively to the rights
and remedies herein stated but shall be entitled to every additional right and
remedy now or hereafter afforded by law. 
The rights of the Beneficiary under this Deed of Trust shall be
separate, distinct and cumulative and none shall be given effect to the
exclusion of the others.  No act of the
Beneficiary shall be construed as an election to proceed under any one
provision herein to the exclusion of any other provision.


 


26.                                 Liability.


 


If the Grantor
consists of more than one person, the obligations and liabilities of each such
person hereunder shall be joint and several.


 


27.                                 Construction/Severability.


 


(a) The
proceeds of the Loan guaranteed under the Guaranty were disbursed from and the
Guaranty was executed in the state of New York, which state the parties agree
has a substantial relationship to the underlying transaction embodied hereby,
and in all respects, including, without limiting the generality of the
foregoing, matters of construction, validity and performance.  This Deed of Trust and the obligations
arising hereunder shall be governed by, and


 


23

















 


construed in accordance with,
the laws of the state of New York applicable to contracts made and performed in
New York State and any applicable laws of the United States of America, without
regard to conflict of law rules and principles.  Notwithstanding such provisions, however, (i) matters respecting
title to the RP Collateral and the creation, perfection, priority and
foreclosure (including the nature of any interest in property that results
therefrom) of the liens on the RP Collateral shall be governed by, and
construed and enforced in accordance with, the internal law of the state of
Texas without giving effect to the conflicts-of law rules and principals of
such state; (ii) the Grantor agrees that whether or not deficiency judgments
are available under the laws of the state of Texas, after a foreclosure
(judicial or nonjudicial) of the Trust Property, or any portion thereof, or any
other realization thereon by the Beneficiary, the Beneficiary shall have the
right to seek such a deficiency judgment against the Grantor in other states or
foreign jurisdictions; and (iii) the Grantor agrees that, to the extent the
Beneficiary obtains a deficiency judgment in any other state or foreign
jurisdiction, then such party shall have the right to enforce such judgment in
the state of Texas, as well as in other states or foreign jurisdictions.


 


(b)                                 Whenever
possible, each provision of this Deed of Trust shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Deed of Trust shall be unenforceable or prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
unenforceability, prohibition or invalidity, without invalidating the remaining
provisions of this Deed of Trust.


 


28.                                 Security
Agreement.


 


(a)                                  This
Deed of Trust constitutes both a real property mortgage or deed of trust and a
“security agreement,” within the meaning of the Texas UCC, and the Trust
Property includes both real and personal property and all other rights and
interest, whether tangible or intangible in nature, of the Grantor in the Trust
Property.  The Grantor by executing and
delivering this Deed of Trust has granted to the Beneficiary, as security for
the Obligations, a security interest in the UCC Collateral.  If an Event of Default shall occur
hereunder, the Beneficiary, in addition to any other rights and remedies which
it may have, shall have and may exercise immediately and without demand, any
and all rights and remedies granted to a secured party upon default under the
Texas UCC, including, without limiting the generality of the foregoing, the
right to take possession of the UCC Collateral or any part thereof, and to take
such other measures as the Beneficiary may deem necessary for the care, protection
and preservation of the UCC Collateral. 
Upon request or demand of the Beneficiary, the Grantor shall at its
expense assemble the UCC Collateral and make it available to the Beneficiary at
a convenient place acceptable to the Beneficiary.  The Grantor shall pay to the Beneficiary on demand any and all
expenses, including legal expenses and attorneys’ fees, incurred or paid by the
Beneficiary in protecting its interest in the UCC Collateral and in enforcing
its rights hereunder with respect to the UCC Collateral.  Any notice of sale, disposition or other
intended action by the Beneficiary with respect to the UCC Collateral sent to
the Grantor in accordance with the provisions of this Deed of Trust at least
ten (10) days prior to the date of any such sale, disposition or other action,


 


24

















 


shall constitute reasonable
notice to the Grantor, and the method of sale or disposition or other intended
action set forth or specified in such notice shall conclusively be deemed to be
commercially reasonable within the meaning of the Texas UCC unless objected to
in writing by the Grantor within five (5) days after receipt by the Grantor of
such notice.  The proceeds of any sale
or disposition of the UCC Collateral, or any part thereof, may be applied by
the Beneficiary to the payment of the Obligations in such order, priority and
proportions as the Beneficiary in its discretion shall deem proper.  If any change shall occur in the Grantor’s
name, the Grantor shall promptly cause to be filed at its own expense, new
financing statements as required under the Texas UCC to replace those on file
in favor of the Beneficiary.  Conflicts
between this Paragraph 28 and any provision of the Security Agreement of even
date herewith between the Grantor and the Beneficiary shall be resolved in
favor of the Security Agreement.


 


(b)                                 Certain
of the UCC Collateral is or will become “fixtures” (as that term is
defined in the UCC), and when this Deed of Trust is filed for record in the
real estate records of the county where such fixtures are situated, it shall
also automatically operate as a financing statement upon such of the UCC
Collateral which is or may become fixtures.


 


29.                                 Further
Acts, etc.


 


The Grantor
will, at the cost of the Grantor, and without expense to the Beneficiary, do,
execute, acknowledge and deliver all and every such further acts, deeds,
conveyances, deeds of trust, mortgages, assignments, notices of assignments,
transfers and assurances as the Beneficiary shall, from time to time, demand
for the better assuring, conveying, assigning, transferring and confirming unto
the Beneficiary the property and rights conveyed, assigned and transferred
hereunder or intended now or hereafter so to be, or which the Grantor may be or
may hereafter become bound to convey, assign or transfer to the Beneficiary, or
for carrying out the intention or facilitating the performance of the terms of
this Deed of Trust or for filing, registering or recording this Deed of Trust
and, on demand, will execute, deliver and/or file, and hereby authorizes the
Beneficiary to execute and/or file in the name of the Grantor to the extent the
Beneficiary may lawfully do so, one or more financing statements, chattel
mortgages or comparable security instruments, to evidence more effectively the
interests in the Trust Property granted to the Beneficiary hereunder.


 


30.                                 Headings,
etc.


 


The headings
and captions of various paragraphs of this Deed of Trust are for convenience of
reference only and are not to be construed as defined or limiting, in any way,
the scope or intent of the provisions hereof.


 


25

















 


31.                                 Filing
of Instrument, etc.


 


The Grantor
forthwith upon the execution and delivery of this Deed of Trust and thereafter,
from time to time, will cause this Deed of Trust, and any security instrument
creating a lien or evidencing the lien hereof upon the Trust Property and each
instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect, preserve and perfect the lien
hereof upon, and the interest of the Beneficiary in, the Trust Property.  The Grantor will pay all filing, registration
and recording fees, and all expenses incident to the preparation, execution and
acknowledgment of this Deed of Trust, any deed of trust supplemental hereto,
any security instrument with respect to the Trust Property, and any instrument
of further assurance, and all Federal, state, county and municipal taxes,
duties, imposts, assessments and charges arising out of or in connection with
the execution and delivery of this Deed of Trust, any deed of trust
supplemental hereto, any security instrument with respect to the Trust Property
or any instrument of further assurance. 
The Grantor shall hold harmless and indemnify the Beneficiary, its
successors and assigns, against any liability incurred by reason of the
imposition of any tax on the making and recording of this Deed of Trust.


 


32.                                 Usury
Laws.


 


The Grantor
and the Beneficiary stipulate and agree that it is their common and overriding
intent to contract in strict compliance with applicable usury laws.  In furtherance thereof, none of the terms of
this Deed of Trust shall ever be construed to create a contract to pay, as
consideration for the use, forbearance or detention of money, interest at a
rate in excess of the maximum rate permitted by applicable laws.  The Grantor shall never be liable for
interest in excess of the maximum rate permitted by applicable laws.  If, for any reason whatever, such interest
paid or received during the full term of the applicable indebtedness produces a
rate which exceeds the maximum rate permitted by applicable laws, the Beneficiary
shall credit against the principal of such indebtedness (or, if such
indebtedness shall have been paid in full, shall refund to the payor of such
interest) such portion of said interest as shall be necessary to cause the
interest paid to produce a rate equal to the maximum rate permitted by
applicable laws.  All sums paid or
agreed to be paid to the Beneficiary for the use, forbearance or detention of
money shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of the applicable
indebtedness.  The provisions of this
Paragraph 32 shall control all agreements, whether now or hereafter existing
and whether written or oral, between the Grantor and the Beneficiary.


 


33.                                 Sole
Discretion of the Beneficiary.


 


Except as may
otherwise be expressly provided to the contrary, wherever pursuant to this Deed
of Trust, the Beneficiary exercises any right given to it to consent or not
consent, or to approve or disapprove, or any arrangement or term is to be
satisfactory to the Beneficiary, the decision of the Beneficiary to consent or
not consent, or to approve or disapprove, or to decide


 


26

















 


that arrangements or terms are
satisfactory or not satisfactory, shall be in the sole and absolute discretion
of the Beneficiary and shall be final and conclusive.


 


34                                    Reasonableness.


 


If at any time
the Grantor believes that the Beneficiary has not acted reasonably in granting
or withholding any approval or consent under this Deed of Trust as to which
approval or consent either (a) the Beneficiary has expressly agreed to act
reasonably, or (b) absent such agreement, applicable law would nonetheless
require the Beneficiary to act reasonably, then the Grantor’s sole remedy shall
be to seek injunctive relief or specific performance, and no action for
monetary damages or punitive damages shall in any event or under any
circumstance be maintained by the Grantor against the Beneficiary.


 


35.                                 Recovery
of Sums Required to be Paid.


 


The
Beneficiary shall have the right from time to time to take action to recover
any sum or sums which constitute a part of the Obligations as the same become
due, without regard to whether or not the balance of the Obligations shall be
due, and without prejudice to the right of the Beneficiary thereafter to bring
an action of foreclosure, or any other action, for a default or defaults by the
Grantor existing at the time such earlier action was commenced.


 


36.                                 Actions
and Proceedings.


 


The
Beneficiary shall have the right to appear in and defend any action or
proceeding brought with respect to the Trust Property and to bring any action
or proceeding, in the name and on behalf of the Grantor, which the Beneficiary,
in its discretion, determines should be brought to protect the Beneficiary’s
interest in the Trust Property.


 


37.                                 Inapplicable
Provisions.


 


If any term,
covenant or condition of this Deed of Trust shall be held to be invalid,
illegal or unenforceable in any respect, this Deed of Trust shall be construed
without such provision.


 


38.                                 Duplicate
Originals.


 


This Deed of
Trust may be executed in any number of duplicate originals and each such
duplicate original shall be deemed to constitute but one and the same
Instrument.


 


27

















 


39.                                 Certain
Definitions.


 


Unless the
context clearly indicates a contrary intent or unless otherwise specifically
provided in this Deed of Trust, words used in this Deed of Trust shall be used
interchangeably in singular or plural form; the word “Grantor” shall mean each Grantor and any subsequent owner or
owners of the Trust Property or any part thereof or interest therein; the word “Loan Documents” shall have the meaning
set forth in the Loan Agreement; the word “person”
shall include an individual, corporation, partnership, trust, unincorporated
association, government, governmental authority, or other entity; the words “Trust Property” shall include any portion
of the Trust Property or interest therein; and the word “Obligations” shall mean all sums secured by
this Deed of Trust; the word “default”
shall mean both an Event of Default hereunder, and the occurrence of any
default by the Grantor or other person in the observance or performance of any
of the terms, covenants or provisions of this Deed of Trust on the part of the
Grantor or such other person to be observed or performed without regard to
whether such default constitutes or would constitute upon notice or lapse of
time, or both, an Event of Default under this Deed of Trust; and words such as “herein” or “hereunder” shall be deemed to refer to this Deed of Trust as
a whole and not merely to the sentence or paragraph in which they appear.  References to “the lien of this Deed of Trust” or words to that effect are
also references to this Deed of Trust. 
Whenever the context may require, any pronouns used herein shall include
the corresponding masculine, feminine or neuter forms, and the singular form of
nouns and pronouns shall include the plural and vice versa.


 


 


40.                                 Waiver
of Notice.


 


The Grantor
shall not be entitled to any notices of any nature whatsoever from the
Beneficiary except with respect to matters for which this Deed of Trust
specifically and expressly provides for the giving of notice by the Beneficiary
to the Grantor, and the Grantor hereby expressly waives the right to receive
any notice from the Beneficiary with respect to any matter for which this Deed
of Trust does not specifically and expressly provide for the giving of notice
by the Beneficiary to the Grantor.


 


41.                                 No
Oral Change.


 


This Deed of
Trust may only be modified, amended or changed by an agreement in writing
signed by the Grantor, the Beneficiary and, to the extent required by
applicable law, the Trustee, and may only be released, discharged or satisfied
of record by an agreement in writing signed by the Beneficiary and, to the
extent required by applicable law, the Trustee.  No waiver of any term, covenant or provision of this Deed of
Trust shall be effective unless given in writing by the Beneficiary and if so
given by the Beneficiary shall only be effective in the specific instance in
which given.  No course of dealing
between the parties, no usage of trade and no extrinsic or parol evidence may
be used to supplement or modify the terms of this Deed of


 


28

















 


Trust.  The Grantor acknowledges that the Guaranty,
this Deed of Trust, the Loan Agreement and the other Loan Documents set forth
the entire agreement and understanding of the Grantor and the Beneficiary with
respect to the Obligations secured hereby and that no oral or other agreements,
understanding, representation or warranties exist with respect to the
Obligations secured hereby other than those set forth in the Guaranty, this
Deed of Trust, the Loan Agreement and the other Loan Documents.


 


42.                                 Absolute
and Unconditional Obligation.


 


The Grantor
acknowledges that the Grantor’s obligation to pay the Obligations in accordance
with the Guaranty, this Deed of Trust and the other Loan Documents to which the
Grantor is a party and shall at all times continue to be absolute and
unconditional in all respects, and shall at all times be valid and enforceable
irrespective of any other agreements or circumstances of any nature whatsoever
which might otherwise constitute a defense to the payment of the Obligations in
accordance with the Guaranty, this Deed of Trust or the other Loan Documents to
which the Grantor is a party, and the Grantor absolutely, unconditionally and
irrevocably waives any and all right to assert any defense, setoff,
counterclaim or crossclaim of any nature whatsoever with respect to the payment
of the Obligations in accordance with the provisions of the Guaranty, this Deed
of Trust and the other Loan Documents or otherwise with respect to the
Obligations secured hereby in any action or proceeding brought to collect the
Obligations, or any portion thereof, or to enforce, the trust or foreclose and
realize upon the Beneficiary’s interest in the Trust Property created by this
Deed of Trust.


 


43.                               Waiver
of Trial by Jury.


 


The Grantor hereby irrevocably and
unconditionally waives, and the Beneficiary by its acceptance of the Guaranty
irrevocably and unconditionally waives, any and all rights to trial by jury in
any action, suit or counterclaim arising in connection with, out of or
otherwise relating to this Deed of Trust, the Guaranty or the other Loan
Documents.


 


44.                                 Waiver
of Statutory Rights.


 


The Grantor
shall not and will not apply for or avail itself of any appraisement,
valuation, stay, extension or exemption laws, or any so-called “Moratorium Laws,” now existing or hereafter
enacted, in order to prevent or hinder the enforcement or foreclosure of this
Deed of Trust, but hereby waives the benefit of such laws to the full extent
that the Grantor may do so under applicable law.  The Grantor for itself and all who may claim through or under it
waives any and all right to have the property and estates comprising the Trust
Property marshalled upon any foreclosure of the lien of this Deed of Trust and
agrees that the Trust Property may be sold as an entirety or in separate
parcels and in such order as may be determined by the Beneficiary, or by any
court in which any action or suit hereunder may be pending. The


 


29

















 


Grantor hereby waives for
itself and all who may claim through or under it, and to the full extent the
Grantor may do so under applicable law, any and all rights of redemption from
sale under any order or decree of foreclosure of this Deed of Trust or granted
under any statute now existing or hereafter enacted.


 


45.                                 Brokerage.


 


The Grantor
covenants and agrees that no brokerage commission or other fee, commission or
compensation is to be paid by the Beneficiary on account of the Loan or any
other obligations secured by this Deed of Trust and the Grantor agrees to
indemnify the Beneficiary against any claims for any of the same.


 


46.                                 Indemnity.


 


Anything in
this Deed of Trust, the Guaranty, the Loan Agreement or the other Loan
Documents to the contrary notwithstanding, the Grantor shall indemnify and hold
the Beneficiary harmless and defend the Beneficiary at the Grantor’s sole cost
and expense against any loss or liability, cost or expense (including, without
limitation, title insurance premiums and charges and reasonable attorneys’ fees
and disbursements of the Beneficiary’s counsel, whether in-house staff,
retained firms or otherwise), and all claims, actions, procedures and suits
arising out of or in connection with (a) any ongoing matters arising out
of the deed of trust transaction contemplated hereby, this Deed of Trust,
and/or the Trust Property, including, but not limited to, all costs of
reappraisal of the Trust Property or any part thereof, whether required by law,
regulation, the internal policies of the Beneficiary or any governmental or
quasi-governmental authority, (b) any amendment to, or restructuring of
this Deed of Trust and (c) any and all lawful action that may be taken by
the Beneficiary in connection with the enforcement of the provisions of this
Deed of Trust, whether or not suit is filed in connection with the same, or in
connection with the Borrower, the Grantor, any other guarantor of the Loan
and/or any partner, member, joint venturer or shareholder thereof becoming a party
to a voluntary or involuntary federal or state bankruptcy, insolvency or
similar proceeding.  The foregoing
indemnity shall not apply to matters caused by the gross negligence willful
misconduct or bad faith of the Beneficiary. 
All sums expended by the Beneficiary shall be payable within (5) days
after written demand and, until reimbursed by the Grantor pursuant hereto,
shall be deemed additional principal of the Obligations and secured hereby and
shall bear interest at the Default Rate.  THE FOREGOING INDEMNIFIES THE TRUSTEE AND
THE BENEFICIARY FROM THEIR OWN NEGLIGENCE.


 


47.                                   Relationship.


 


The
relationship of the Beneficiary to the Grantor hereunder is strictly and solely
that of lender and obligor and grantor and beneficiary, and nothing contained in
the Guaranty, this Deed of Trust or any other Loan Document is intended to
create, or shall in any event or


 


30

















 


under any circumstance be
construed as creating, a partnership, joint venture, tenancy-in-common, joint
tenancy or other relationship of any nature whatsoever between the Beneficiary
and the Grantor other than as set forth in this Paragraph 47.


 


48.                                 Loan
Agreement.


 


The Grantor
shall fully and faithfully observe and perform all of the terms, covenants,
conditions, provisions and agreements contained in the Loan Agreement.


 


49.                                 The
Trustee.


 


(a)                                  Successor
Trustee.  The Trustee may resign by
the giving of notice of such resignation in writing addressed to the
Beneficiary, or may be removed at any time, with or without cause, by an
instrument in writing duly executed by the Beneficiary.  The Beneficiary shall concurrently give
notice of any such resignation or removal to the Grantor.  In case of the death, resignation or removal
of the Trustee, a successor Trustee may be appointed by the Beneficiary without
other formality than an appointment and designation in writing unless otherwise
required by applicable law.  Such
appointment and designation will be full evidence of the right and authority to
make the same and of all facts therein recited, and upon the making of any such
appointment and designation, this Deed of Trust will vest in the named
successor the Trustee all the right, title and interest of the Trustee in the
Trust Property, and said successor will thereupon succeed to all the rights,
powers, privileges, immunities and duties hereby conferred upon the
Trustee.  All references herein to the
Trustee will be deemed to refer to the Trustee or trustees from time to time
acting hereunder.


 


(b)                                 Trustee’s
Powers.  At any time, or from time
to time without liability therefor and without notice, upon written request of
the Beneficiary and presentation of this Deed of Trust for endorsement, and
without affecting the personal liability of any person for payment of the
indebtedness secured hereby or the effect of this Deed of Trust upon the
remainder of the Trust Property, the Trustee may (i) reconvey any part of the
Trust Property, (ii) consent in writing to the making of any map or plat
thereof, (iii) join in granting any easement thereon, or (iv) join in any
extension agreement or any agreement subordinating the lien or charge hereof.


 


(c)                                  Request
for Notice.  The Grantor hereby
requests that a copy of any notice of default and a copy of any notice of sale
hereunder be mailed to the Grantor at the address set forth in the heading of
this Deed of Trust.


 


(d)                                 Full
Reconveyance by the Trustee.  To the
extent that the Trustee’s signature is necessary on any full reconveyance of
this Deed of Trust then, upon written request of the Beneficiary stating that
all sums secured hereby have been paid, and upon surrender of this Deed of
Trust to the Trustee for cancellation and retention (or disposal in accordance
with


 


31

















 


applicable law), the Trustee
shall reconvey to the Grantor, or to the person or persons legally entitled
thereto, without warranty, any portion of the Trust Property then held
hereunder.  The recitals in such reconveyance
of any matters or facts shall be conclusive proof of the truthfulness
thereof.  The grantee in any
reconveyance may be described as the person or persons legally entitled
thereto.


 


(e)                                  Indemnity.  The Grantor shall indemnify the Trustee
against all claims, actions, liabilities, judgments, costs, attorneys’ fees or
other charges of whatsoever kind or nature made against or incurred by the
Trustee, and arising out of the performance by the Trustee of the duties of the
Trustee hereunder (except those arising from the Trustee’s grossly negligent
acts).  The foregoing indemnity shall
not terminate upon release, foreclosure or other termination of this Deed of
Trust. 
THE FOREGOING INDEMNIFIES THE TRUSTEE FROM ITS OWN NEGLIGENCE.


 


(f)                                    The
Beneficiary Action in Lieu of The Trustee. 
Notwithstanding anything


contained in this Paragraph 49
or this Deed of Trust to the contrary, the Beneficiary may take any actions
(other than the exercise of the power of sale) which the Trustee is authorized
to take in all cases where trustees are not required by custom, practice or law
to take such actions on behalf of a beneficiary under a deed of trust.


 


50.                                 Prior Deed of Trust.  This Deed of Trust is subject and
subordinate to the liens of a certain Deed of Trust dated October 9, 2002, made
by the Grantor to Bryan Perkins for the benefit of Tollroad Texas Land Co.,
L.P, and recorded on October 10, 2002 in Volume 5272, Page 717 of the Land
Records of Collin County, Texas (the “Prior
Deed of Trust”).  In respect
thereof, the Grantor hereby warrants, represents and covenants with the
Beneficiary that: (a) the Prior Deed of Trust is and in all respects shall at
all times be current and in full force and effect without default on the part
of the Grantor thereunder; (b) any default under the Prior Deed of Trust beyond
any applicable cure period provided thereunder shall ipso  facto
constitute an Event of Default under this Deed of Trust; and (c) the Grantor
shall not enter into any agreement with the holder of the Prior Deed of Trust
to amend, modify, renew, increase or in any manner change the terms thereof or
the indebtedness secured thereby, either orally or in writing, without the
prior written consent of the Beneficiary.


 


51.                                 Cash Collateral.  In any situation hereunder where the
Beneficiary is or may be entitled under this Deed of Trust to apply the Rents,
the proceeds of the Policies, the proceeds from a condemnation or any other
monies against any portion of the Obligations, the Beneficiary  shall have the right at its option to hold
the monies in question as cash collateral. 
Until expended or applied against such remaining Obligations, any cash
collateral retained by the Beneficiary may be commingled with the general funds
of the Beneficiary and shall constitute additional security for the Obligations
and shall not bear interest. The election of whether to make such application
or to hold such monies as cash collateral shall be in the sole and absolute
discretion of the Beneficiary.


 


32

















 


52.                                 Homestead
Disclaimer.  The Grantor warrants
and represents that at the time of execution and delivery of this Instrument,
no part of the Trust Property forms any part of any property owned, used or
claimed by the Grantor or the Grantor’s spouse or children either as a
residence or a business homestead, or as otherwise exempt from forced sale
under the laws of the State of Texas or the United States.


 


33

















 


NOTICE PURSUANT TO
TEX. BUS. & COMM. CODE § 26.02


 


THIS DEED OF TRUST
AND THE OTHER LOAN DOCUMENTS TOGETHER CONSTITUTE A WRITTEN LOAN AGREEMENT AND
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.  THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.


 


 


	
  MORGAN
  STANLEY DEAN WITTER

  COMMERCIAL FINANCIAL SERVICES, INC.

  	
  DALLAS
  S&W, L.P.,

  a Texas limited partnership

  



 


	
   

  	
   

  	
   

  	
  By:  S&W of Dallas, LLC, its general
  partner

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Roman
  Mordkovich

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Roman
  Mordkovich

  	
   

  	
   

  
	
   

  	
  Title: Vice
  President

  	
   

  	
  By :

  	
  /s/ Alan M.
  Mandel

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Alan
  M. Mandel

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Chief
  Financial Officer & Secretary

  
									



 


 


IN WITNESS WHEREOF,
the Grantor has duly executed this Deed of Trust the day and year first above
written.


 


	
   

  	
   

  	
   

  	
  DALLAS
  S&W, L.P.,

  a Texas limited partnership

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By: S&W
  of Dallas LLC, its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Alan M.
  Mandel

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Alan
  M. Mandel

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Chief
  Financial Officer & Secretary

  
							



 


34

















 


	
  STATE OF NEW
  YORK

  	
  )

  
	
   

  	
  )  ss.:

  
	
  COUNTY OF
  NEW YORK

  	
  )

  



 


 


On the 17th day of December in the year 2002, before me, the
undersigned, a Notary Public in and for said State, personally appeared Alan M.
Mandel, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by
his signature on the instrument, the individual, or the person upon behalf of
which the individual acted, executed the instrument.


 


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  /s/ Angela
  L. Strobe

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Notary
  Public

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  SEAL.

  	
   

  	
  No.
  01ST6080923

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  9/23/06

  



 


	
  STATE OF NEW
  YORK

  	
  )

  
	
   

  	
  )  ss.:

  
	
  COUNTY OF
  NEW YORK

  	
  )

  



 


 


On the 17th day of December in the year 2002, before me, the
undersigned, a Notary Public in and for said State, personally appeared Roman
Mordkovich, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by
his signature on the instrument, the individual, or the person upon behalf of
which the individual acted, executed the instrument.


 


 


	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  /s/ Angela
  L. Strobe

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Notary
  Public

  



 


35

















 


EXHIBIT A


 


Legal Description


 


36

















 


 




 





DALLAS S&W, L.P.


 


 


AND


 


MORGAN STANLEY DEAN WITTER


COMMERCIAL FINANCIAL SERVICES, INC.


 












 


DEED OF TRUST


( TEXAS )


 












 


 


	
   

  	
  Dated:

  	
   

  	
  December
    , 2002

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Location:

  	
   

  	
  Lot 8, Block
  C/8763,

  
	
   

  	
   

  	
   

  	
  Greenway
  Addition, Dallas, Texas

  



 


 


RECORD AND RETURN TO:


 


	
   

  	
  Esanu Katsky
  Korins & Siger, LLP

  
	
   

  	
  605 Third
  Avenue

  
	
   

  	
  New York,
  New York 10158

  
	
   

  	
  Attention:  Stephen D. Brodie, Esq.

  



 


 




 





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