EXHIBIT
10.19



	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
 

	
 


	
 

	
This
instrument was prepared by:

	
 


	
 

	
James C.
Wine

	
 


	
 

	
Nyemaster
Goode

	
 


	
 

	
700 Walnut,
Suite 1600

	
 


	
 

	
Des Moines,
Iowa 50309-3956

	
 


	
 

	
After
recording, return to above address.

	
 


	
 

	
 

	
 








	
 

	
 

	
 


	
 

	
NOTICE OF
CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE
ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN
INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC
RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

	
 




DEED
OF TRUST, SECURITY 

AGREEMENT AND FIXTURE FILING


AMREIT PRESTON ROYAL, LP,

a Texas limited partnership,

Borrower,


having an office at

8 Greenway Plaza, Suite 1000

Houston, Texas 77046


to


PETER
S. GRAF,

Trustee


for the benefit of

TRANSAMERICA FINANCIAL LIFE INSURANCE
COMPANY,

a New York corporation,

Lender,


having an office

c/o AEGON USA Realty Advisors, LLC

4333 Edgewood Road, N.E.

Cedar Rapids, Iowa 52499-5443


effective as of the ___ day of December, 2012
(the “Effective Date”)


Loan Amount: $23,400,000.00

Premises: Preston Royal Village, Dallas County, Dallas, Texas


	
 

	
 

	
 


	
Deed of Trust and Security
Agreement

	
-1-

	
 


	
Preston Royal Village,
Dallas, Texas

	
 

	
 


	
AEGON Loan No. 10512155

	
 

	
 












Deed
of Trust, Security Agreement and Fixture Filing


This Deed of
Trust, Security Agreement and Fixture Filing (this “Deed of Trust”) is made and
given as of the Effective Date, by AMREIT PRESTON ROYAL, LP, as grantor, a
Texas limited partnership, whose address is 8 Greenway Plaza, Suite 1000,
Houston, Texas 77046 (the “Borrower”), to PETER S. GRAF, as trustee, whose
address is 2626 Howell Street, Dallas, Texas 75204 (the “Trustee”), for the
benefit of TRANSAMERICA FINANCIAL LIFE INSURANCE COMPANY, as beneficiary, a New
York corporation having an office c/o AEGON USA Realty Advisors, LLC, 4333
Edgewood Road, N.E., Cedar Rapids, Iowa 52499-5443 (the “Lender”). The
definitions of capitalized terms used in this Deed of Trust may be found either
in Sections 3 or 22 below, or through the cross-references provided in those Sections.


	
 

	
 

	
 


	
1. 

	
RECITALS


	
 

	
 

	
 


	
 

	
A.

	
Under the
terms of a commercial Loan Application/Commitment dated November 14, 2012, as
amended (the “Commitment”), AEGON USA Realty Advisors, LLC (“AEGON”), as
agent for the Lender, agreed to fund a loan in the principal amount of
$23,400,000 (the “Loan”).


	
 

	
 

	
 


	
 

	
B.

	
The Lender
has funded the Loan in the principal amount of $23,400,000 in accordance with
the Commitment, and to evidence the Loan, the Borrower has executed and
delivered to the Lender a certain Secured Promissory Note, of even date, in
the amount of $23,400,000, with a maturity and final payment date of January
1, 2020.


	
 

	
 

	
 


	
 

	
C.

	
The
Commitment requires that the Loan be secured by all of the Borrower’s
existing and after-acquired interest in certain real property and by certain
tangible and intangible personal property.








	
 

	
 


	
2.

	
GRANTING CLAUSE


	
 

	
 


	
 

	
To secure
the repayment of the Indebtedness, any increases, modifications, renewals or
extensions of the Indebtedness, and any substitutions for the Indebtedness,
as well as the performance of the Borrower’s other Obligations, and in
consideration of the sum of ten dollars ($10.00) and other valuable
consideration, the receipt and sufficiency of which are acknowledged, the
Borrower grants, bargains, warrants, conveys, alienates, releases, assigns,
sets over and confirms to the Trustee, in trust with the POWER OF SALE for
the benefit of the Lender and to his successors and assigns forever, all of
the Borrower’s existing and after acquired interests in the Real Property.


	
 

	
 


	
3.

	
DEFINED TERMS 


	
 

	
 


	
 

	
The
following defined terms are used in this Deed of Trust. For ease of
reference, terms relating primarily to the Security Agreement are defined in
Subsection 22.1.


	
 

	
 


	
 

	
“Affiliate”
of any person means any entity controlled by, or under common control with,
that person.


	
 

	
 


	
 

	
“Appurtenances”
means all rights, estates, titles, interests, privileges, easements,
tenements, hereditaments, titles, royalties, reversions, remainders and other
interests, whether presently held by the Borrower or acquired in the future,
that may be conveyed 







	
 

	
 

	
 


	
Deed of Trust and Security
Agreement

	
-2-

	
 


	
Preston Royal Village,
Dallas, Texas

	
 

	
 


	
AEGON Loan No. 10512155

	
 

	
 















	
 

	
 


	
 

	
as interests
in the Land under the laws of Texas. Appurtenances include the Easements and
the Assigned Rights.


	
 

	
 


	
 

	
“Assigned
Rights” means all of the Borrower’s rights, easements, privileges,
tenements, hereditaments, contracts, claims, licenses or other interests,
whether presently existing or arising in the future. The Assigned Rights
include all of the Borrower’s rights in and to:








	
 

	
 

	
 


	
 

	
(i)

	
any greater
estate in the Real Property;


	
 

	
 

	
 


	
 

	
(ii)

	
insurance
policies required to be carried hereunder, including the right to negotiate
claims and to receive Insurance Proceeds and unearned insurance premiums
(except as expressly provided in Subsection 8.2);


	
 

	
 

	
 


	
 

	
(iii)

	
Condemnation
Proceeds;


	
 

	
 

	
 


	
 

	
(iv)

	
licenses and
agreements permitting the use of sources of groundwater or water utilities,
septic leach fields, railroad sidings, sewer lines, and means of ingress and
egress;


	
 

	
 

	
 


	
 

	
(v)

	
drainage
over other property;


	
 

	
 

	
 


	
 

	
(vi)

	
air space
above the Land;


	
 

	
 

	
 


	
 

	
(vii)

	
mineral
rights;


	
 

	
 

	
 


	
 

	
(viii)

	
party walls;


	
 

	
 

	
 


	
 

	
(ix)

	
vaults and
their usage;


	
 

	
 

	
 


	
 

	
(x)

	
franchises;


	
 

	
 

	
 


	
 

	
(xi)

	
commercial
tort claims that arise during the Loan term in respect of damages to the Real
Property or to its operations, in respect of any impairment to the value of
the Real Property, or in respect of the collection of any Rents;


	
 

	
 

	
 


	
 

	
(xii)

	
construction
contracts;


	
 

	
 

	
 


	
 

	
(xiii)

	
roof and
equipment guarantees and warranties;


	
 

	
 

	
 


	
 

	
(xiv)

	
building and
development licenses and permits;


	
 

	
 

	
 


	
 

	
(xv)

	
tax credits
or other governmental entitlements, credits or rights, whether or not vested;


	
 

	
 

	
 


	
 

	
(xvi)

	
licenses and
applications (whether or not yet approved or issued);


	
 

	
 

	
 


	
 

	
(xvii)

	
rights under
management and service contracts;


	
 

	
 

	
 


	
 

	
(xviii)

	
leases of
Fixtures; and


	
 

	
 

	
 


	
 

	
(xix)

	
trade names,
trademarks, trade styles, service marks, copyrights, and agreements with
architects, environmental consultants, property tax consultants, engineers,
and any other third-party contractors whose services benefit the Real
Property.








	
 

	
 


	
 

	
“Assignment
of Leases and Rents” means the Loan Document bearing this heading. “Bankruptcy
Code” means the Bankruptcy Reform Act of 1978, as amended, 11 U.S.C.
Sections 101 et seq., and the regulations promulgated pursuant to those
statutes.


	
 

	
 


	
 

	
“Business
Day” means any day when state and federal banks are open for business in
Cedar Rapids, Iowa.


	
 

	
 


	
 

	
“Carveout
Guarantee and Indemnity” means that certain “Carveout Guarantee and
Indemnity Agreement” entered into by the Carveout Obligor on the date of this
Deed of Trust, together with all substitutions, modifications, and
amendments.


	
 

	
 


	
 

	
“Carveout
Obligations” means those obligations described in Section 21.







	
 

	
 

	
 


	
Deed of Trust and Security
Agreement

	
-3-

	
 


	
Preston Royal Village,
Dallas, Texas

	
 

	
 


	
AEGON Loan No. 10512155

	
 

	
 















	
 

	
 


	
 

	
“Carveout
Obligor” means AmREIT, Inc. Any other Person who expressly assumes
liability for the Carveout Obligations during the term of the Loan shall
become a “Carveout Obligor” for purposes of this Deed of Trust.


	
 

	
 


	
 

	
“Carveouts”
means those matters from which Carveout Obligations may arise, which are
described in Section 21.


	
 

	
 


	
 

	
“Charges”
means all fees, charges, and other things of value, if any, contracted for,
charged, received, taken or reserved pursuant to the Note or any of the other
Loan Documents in connection with the Loan, and which are treated as interest
under applicable law (whether in connection with any voluntary prepayment of
the Indebtedness, or otherwise, and including fees for the forbearance of any
enforcement action or for the extension or modification of the Loan).


	
 

	
 


	
 

	
“Condemnation
Proceeds” means all money or other property that has been, or is in the
future, awarded or agreed to be paid or given in connection with any taking
by eminent domain of all or any part of the Real Property (including a taking
through the vacation of any street dedication or through a change of grade of
such a street), either permanent or temporary, or in connection with any
purchase in lieu of such a taking, or as a part of any related settlement,
except for the right to condemnation proceeds awarded to the tenant in a
separate proceeding in respect of the lost value of the tenant’s leasehold
interest, provided that the award does not reduce, directly or indirectly,
the award to the owner of the Real Property.


	
 

	
 


	
 

	
“Curable
Non-Monetary Default” means any of the acts, omissions, or circumstances
specified in Subsection 10.3 below.


	
 

	
 


	
 

	
“Default”
means any of the acts, omissions, or circumstances specified in Section 10
below.


	
 

	
 


	
 

	
“Default
Rate” means the rate of interest specified as the “Default Rate” in the
Note.


	
 

	
 


	
 

	
“Development
Agreements” means all development, utility or similar agreements included
in the Permitted Encumbrances.


	
 

	
 


	
 

	
“Easements”
means the Borrower’s existing and future interests in and to the
declarations, easements, covenants, and restrictions appurtenant to the Land.


	
 

	
 


	
 

	
“Environmental
Indemnity Agreement” means the Loan Document bearing that heading,
together with all substitutions, modifications, and amendments.


	
 

	
 


	
 

	
“Environmental
Laws” means all present and future laws, statutes, ordinances, rules,
regulations, orders, guidelines, rulings, decrees, notices and determinations
of any Governmental Authority to the extent that they pertain to: (A) the
protection of health against environmental hazards; (B) the protection of the
environment, including air, soils, wetlands, and surface and underground water,
from contamination by any substance that may have any adverse health effect
on humans, livestock, fish, wildlife, or plant life, or which may disturb an
ecosystem; (C) underground storage tank regulation or removal; (D) wildlife
conservation; (E) protection or regulation of natural resources; (F) the
protection of wetlands; (G) management, regulation and disposal of solid and
hazardous wastes; (H) radioactive materials; (I) biologically hazardous
materials; (J) indoor air quality; or (K) the manufacture, possession,
presence, use, generation, storage, transportation, treatment, release,
emission, discharge, disposal, abatement, cleanup, removal, remediation or
handling of any Hazardous Substances. “Environmental Laws” include the
Comprehensive Environmental Response, Compensation, and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. 






	
 

	
 

	
 


	
Deed of Trust and Security
Agreement

	
-4-

	
 


	
Preston Royal Village,
Dallas, Texas

	
 

	
 


	
AEGON Loan No. 10512155

	
 

	
 















	
 

	
 


	
 

	
§9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et
seq., the Federal Water Pollution Control Act, as amended by the Clean Water
Act, 33 U.S.C. §1251 et seq., the Clean Air Act, 42 U.S.C. §7401 et seq., the
Toxic Substances Control Act, 15 U.S.C. §2601 et seq., the Texas Solid Waste
Disposal Act (V.T.C.A. Health and Safety Code §361.001 et. seq.), the Texas
Water Code (V.T.C.A. §36.001 et seq.), all similar state statutes and local
ordinances, and all regulations promulgated under any of those statutes, and
all administrative and judicial actions respecting such legislation, all as
amended from time to time.


	
 

	
 


	
 

	
“ESA”
means the written environmental site assessment of the Real Property obtained
under the terms of the Commitment.


	
 

	
 


	
 

	
“Escrow
Expenses” means those expenses in respect of real and personal property
taxes and assessments, Insurance Premiums and such other Impositions as the
Lender pays from time to time directly from the Escrow Fund using monies
accumulated through the collection of Monthly Escrow Payments.


	
 

	
 


	
 

	
“Escrow
Fund” means the funds deposited by Borrower with the Lender pursuant to
Section 9 hereof, as reflected in the accounting entry maintained on the
books of the Lender as funds available for the payment of Escrow Expenses
under the terms of this Deed of Trust.


	
 

	
 


	
 

	
“Fixtures”
means all materials, supplies, equipment, apparatus and other items now or
hereafter attached to or installed on the Land and Improvements in a manner
that causes them to become fixtures under the laws of Texas, including all
built-in or attached furniture or appliances, elevators, escalators, heating,
ventilating and air conditioning system components, emergency electrical
generators and related fuel storage or delivery systems, septic system
components, storm windows, doors, electrical equipment, plumbing, water
conditioning, lighting, cleaning, snow removal, lawn, landscaping,
irrigation, security, incinerating, fire-fighting, sprinkler or other fire
safety equipment, bridge cranes or other installed materials handling
equipment, satellite dishes or other telecommunication equipment, built-in
video conferencing equipment, sound systems or other audiovisual equipment,
and cable television distribution systems. Fixtures do not include trade
fixtures, office furniture and office equipment owned by a tenant who is
unrelated to the Borrower, provided such items may be detached and
removed by the tenant without damage to the Real Property, other than
incidental damage that the tenant is obligated to repair under the terms of
its Lease. Fixtures expressly include HVAC, mechanical, security and similar
systems of general utility for the operation of the Improvements as leasable
commercial real property.


	
 

	
 


	
 

	
“Governmental
Authority” means any political entity with the legal authority to impose
any requirement on the Property, including the governments of the United
States, the State of Texas, Dallas County, the City of Dallas, and any other
entity with jurisdiction to decide, regulate, or affect the ownership,
construction, use, occupancy, possession, operation, maintenance, alteration,
repair, demolition or reconstruction of any portion or element of the Real
Property.


	
 

	
 


	
 

	
“Hazardous
Substance” means any substance the release of or the exposure to which is
prohibited, limited or regulated by any Environmental Law, or which poses a
hazard to human health, including: (A) any “oil,” as defined by the Federal
Water Pollution Control Act and regulations promulgated thereunder (including
crude oil or any fraction of crude oil), (B) any radioactive substance and
(C) Stachybotrys chartarum or other molds. However, the term “Hazardous
Substance” includes neither (A) a substance used in the cleaning and
maintenance of the Real Property, if the quantity, storage and manner of its 







	
 

	
 

	
 


	
Deed of Trust and Security
Agreement

	
-5-

	
 


	
Preston Royal Village,
Dallas, Texas

	
 

	
 


	
AEGON Loan No. 10512155

	
 

	
 















	
 

	
 


	
 

	
use are
customary, prudent, and do not violate applicable law, nor (B) automotive
motor oil in immaterial quantities, if leaked from vehicles in the ordinary
course of the operation of the Real Property and cleaned up in accordance
with reasonable property management procedures and in a manner that violates
no applicable law.


	
 

	
 


	
 

	
“Impositions”
means all real and personal property taxes levied against the Property;
general or special assessments; ground rent; water, gas, sewer, vault,
electric or other utility charges; common area charges; owners’ association
dues or fees; fees for any easement, license or agreement maintained for the
benefit of the Property; and any and all other taxes, levies, user fees,
claims, charges and assessments whatsoever that at any time may be assessed,
levied or imposed on the Property or upon its ownership, use, occupancy or
enjoyment, and any related costs, interest or penalties. In addition,
“Impositions” include all documentary, stamp or intangible personal property
taxes that may become due in connection with the Indebtedness, including
Indebtedness in respect of any future advance made by the Lender to the
Borrower, or that are imposed on any of the Loan Documents.


	
 

	
 


	
 

	
“Improvements”
means, to the extent of the Borrower’s existing and future interest, all
buildings and improvements of any kind erected or placed on the Land now or in
the future, including the Fixtures, together with all appurtenant rights,
privileges, Easements, tenements, hereditaments, titles, reversions,
remainders and other interests.


	
 

	
 


	
 

	
“Indebtedness”
means all sums that are owed or become due pursuant to the terms of the Note,
this Deed of Trust, or any of the other Loan Documents or any other writing
executed by the Borrower relating to the Loan, including scheduled principal
payments, scheduled interest payments, default interest, late charges,
prepayment premiums, accelerated or matured principal balances, advances,
collection costs (including reasonable attorneys’ fees), reasonable
attorneys’ fees and costs in enforcing or protecting the Note, this Deed of
Trust, or any of the other Loan Documents in any probate, bankruptcy or other
proceeding, receivership costs, fees and costs of the Trustee and all other
financial obligations of the Borrower incurred in connection with the Loan
transaction, provided, however, that this Deed of Trust shall not secure any
Loan Document or any particular person’s liabilities or obligations under any
Loan Document to the extent that such Loan Document expressly states that it
or such particular person’s liabilities or obligations are unsecured by this
Deed of Trust. “Indebtedness” shall also include any obligations under
agreements executed and delivered by Borrower which specifically provide that
such obligations are secured by this Deed of Trust.


	
 

	
 


	
 

	
“Insurance
Premiums” means all premiums or other charges required to maintain in
force any and all insurance policies that this Deed of Trust requires that
the Borrower maintain.


	
 

	
 


	
 

	
“Insurance
Proceeds” means (A) all proceeds of all insurance now or hereafter
carried by or payable to the Borrower with respect to the Real Property,
including with respect to the interruption of rents or income derived from
the Property, all unearned insurance premiums and all related claims or
demands, and (B) all Proceeds (as defined in Subsection 22.1).


	
 

	
 


	
 

	
“Key
Lease” means any Lease that satisfies one or more of the following
conditions:








	
 

	
 

	
 


	
 

	
(a)

	
The Lease is to a tenant who leases or will
lease more than 12,000 square feet of the net leasable area of the
Improvements, either presently or following the execution of a proposed
Lease.


	
 

	
 

	
 


	
 

	
(b)

	
The Lease is to a tenant whose rental
payment(s) under all Leases comprises or will comprise more than 20% of the
gross rental income of 







	
 

	
 

	
 


	
Deed of Trust and Security
Agreement

	
-6-

	
 


	
Preston Royal Village,
Dallas, Texas

	
 

	
 


	
AEGON Loan No. 10512155

	
 

	
 















	
 

	
 

	
 


	
 

	
 

	
the Real Property, either presently or
following the execution of a proposed Lease.








	
 

	
 


	
 

	
“Key
Principal” means AmREIT, Inc.


	
 

	
 


	
 

	
“Land”
means that certain tract of land located in Dallas County, Texas, which is
described on the attached Exhibit A, together with the Appurtenances.


	
 

	
 


	
 

	
“Leasehold
Shopping Center Parcel” means the approximately 7.49 acre parcel of land
generally located at 6025 Royal Lane, the leasehold interest which is being
acquired by AmREIT Preston Royal NEC,
LP concurrently with this Deed of Trust.


	
 

	
 


	
 

	
“Leases”
means all leases, subleases, licenses, concessions, extensions, renewals and
other agreements (whether written or oral, and whether presently effective or
made in the future) through which the Borrower grants any possessory interest
in and to, or any right to occupy or use, all or any part of the Real
Property, and any related guaranties.


	
 

	
 


	
 

	
“Legal
Control” means the power, either directly or indirectly, to exercise the
authority of the Borrower as owner of the Real Property, either as the
majority shareholder of the common stock of a corporation, the sole general
partner of a limited partnership, the managing general partner of a general
partnership, or the sole manager or sole managing member of a limited
liability company, provided the person or entity exercising such authority
cannot be divested of such authority without its consent, either directly or
indirectly, except for cause.


	
 

	
 


	
 

	
“Legal
Requirements” means all laws, statutes, rules, regulations, ordinances,
judicial decisions, administrative decisions, building permits, development
permits, certificates of occupancy, or other requirements of any Governmental
Authority. 


	
 

	
 


	
 

	
“Loan
Documents” means all documents evidencing the Loan or delivered in
connection with the Loan, whether entered into at the closing of the Loan or
in the future, including, without limitation, the Note, this Deed of Trust,
the Assignment of Leases and Rents, the Carveout Guarantee and Indemnity, and
the Environmental Indemnity Agreement.


	
 

	
 


	
 

	
“Maximum
Lawful Rate” means the maximum lawful rate of interest that may be
contracted for, charged, received or reserved by the Lender in accordance
with the applicable laws of the State of Texas (or applicable federal law to
the extent that it permits the Lender to contract for, charge, take, receive
or reserve a greater amount of interest than under Texas law), taking into
account all Charges.


	
 

	
 


	
 

	
“Monthly
Escrow Payment” means the sum of the Monthly Imposition Requirement, the
Monthly Insurance Premium Requirement, and the Monthly Reserve Requirement.


	
 

	
 


	
 

	
“Monthly
Imposition Requirement” means one-twelfth (1/12th) of the annual amount
that the Lender estimates will be required to permit the timely payment by
the Lender of those Impositions that the Lender elects, from time to time, to
include in the calculation of the Monthly Imposition Requirement. Such
Impositions shall include real and personal property taxes and may include,
at the Lender’s sole and absolute discretion, any Impositions that the Borrower
has failed to pay on a timely basis during the term of the Loan. The Lender
shall base its estimate on the most recent information supplied by the
Borrower concerning future Impositions. If the Borrower fails to supply such
information or if it is unavailable at the time of estimation, the Lender
shall estimate future Impositions using historical information and an annual
inflation factor equal to the lesser of five percent (5%) and the maximum
inflation factor permitted by law.


	
 

	
 


	
 

	
“Monthly
Insurance Premium Requirement” means one-twelfth (1/12th) of the annual
amount that the Lender estimates (based on available historical data and
using, if future







	
 

	
 

	
 


	
Deed of Trust and Security
Agreement

	
-7-

	
 


	
Preston Royal Village,
Dallas, Texas

	
 

	
 


	
AEGON Loan No. 10512155

	
 

	
 















	
 

	
 


	
 

	
Insurance
Premiums are as yet undeterminable, a five percent (5%) inflation factor)
will be required to permit the timely payment of the Insurance Premiums by
the Lender.


	
 

	
 


	
 

	
“Monthly
Reserve Requirement” means the monthly payment amount which the Lender
estimates will result, over the subsequent twelve (12) months, in the
accumulation of a surplus in the Escrow Fund equal to the sum of the Monthly
Imposition Requirement and the Monthly Insurance Premium Requirement.


	
 

	
 


	
 

	
“Note”
means the promissory note dated of even date herewith to evidence the
Indebtedness in the original principal amount of $23,400,000, together with
all extensions, renewals and modifications.


	
 

	
 


	
 

	
“Notice”
means a notice given in accordance with the provisions of Subsection 27.12.


	
 

	
 


	
 

	
“Obligations”
means all of the obligations required to be performed under the terms and
conditions of any of the Loan Documents by any Obligor.


	
 

	
 


	
 

	
“Obligor”
means the Borrower, the Carveout Obligor, or any other Person that is liable
under the Loan Documents for the payment of any portion of the Indebtedness,
or the performance of any other obligation required to be performed under the
terms and conditions of any of the Loan Documents, under any circumstances.


	
 

	
 


	
 

	
“Participations”
means participation interests in the Loan Documents granted by the Lender.


	
 

	
 


	
 

	
“Permitted
Control Group Member” shall mean any member of a group comprised of the
Key Principal, institutional trustees of estate planning trusts established
for the sole benefit of Permitted Control Group Members, and executors of the
estates of Permitted Control Group Members.


	
 

	
 


	
 

	
“Permitted
Encumbrances” means (A) the lien of taxes and assessments not yet due and
payable and (B) those matters of public record listed as special exceptions
or subordinate matters in the Lender’s title insurance policy insuring the
priority of this Deed of Trust.


	
 

	
 


	
 

	
“Permitted
Transfer” means a transfer specifically described in Section 14 as
permitted.


	
 

	
 


	
 

	
“Person”
means any individual, corporation, limited liability company, partnership,
trust, unincorporated association, government, governmental authority or
other entity.


	
 

	
 


	
 

	
“Property”
means the Real Property and the Leases, Rents and Personal Property (as such
latter term is defined in Subsection 22.1 below).


	
 

	
 


	
 

	
“Qualified
Offer” means a written offer from the Borrower to do whichever of the
following the Lender elects: (A) permit an uncontested foreclosure, or (B)
deliver a deed in lieu of foreclosure within sixty (60) days of the Lender’s
acceptance of the offer. An offer is not a Qualified Offer if the offer is
conditioned on any payment by the Lender, on the release of any Obligor from
any Obligation, or on any other concession.


	
 

	
 


	
 

	
“Qualified
Passive Interest Transfer” shall have the meaning stated in Section 14.


	
 

	
 


	
 

	
“Qualified
Property Manager” means either (A) a property management company approved
in writing by the Lender, or (B) AmREIT Realty Investment Corporation.


	
 

	
 


	
 

	
“Real
Property” means the Land and the Improvements.


	
 

	
 


	
 

	
“Rents”
means all rents, income, receipts, issues and profits and other benefits paid
or payable for using, leasing, licensing, possessing, operating from or in,
residing in, selling, mining, extracting minerals from, or otherwise enjoying
the Real Property, whether presently existing or arising in the future, to
which the Borrower may now or hereafter 







	
 

	
 

	
 


	
Deed of Trust and Security
Agreement

	
-8-

	
 


	
Preston Royal Village,
Dallas, Texas

	
 

	
 


	
AEGON Loan No. 10512155

	
 

	
 















	
 

	
 


	
 

	
become
entitled or may demand or claim from the commencement of the Loan term
through the time of the satisfaction of all of the Obligations, including
security deposits, amounts drawn under letters of credit securing tenant
obligations, minimum rents, additional rents, common area maintenance
charges, parking revenues, deficiency rents, termination payments, space
contraction payments, damages following default under a Lease, premiums
payable by tenants upon their exercise of cancellation privileges, proceeds
from lease guarantees, proceeds payable under any policy of insurance
covering loss of rents resulting from untenantability caused by destruction
or damage to the Real Property, all rights and claims of any kind which the
Borrower has or may in the future have against the tenants under the Leases,
lease guarantors, or any subtenants or other occupants of the Real Property,
all proceeds of any sale of the Real Property in violation of the Loan
Documents, any future award granted the Borrower in any court proceeding
involving any such tenant in any bankruptcy, insolvency, or reorganization
proceedings in any state or federal court, and any and all payments made by
any such tenant in lieu of rent.


	
 

	
 


	
 

	
“Restoration”
means (A) in the case of a casualty resulting in damage to or the destruction
of the Improvements, the repair or rebuilding of the Improvements to their
original condition, or (B) in the case of the condemnation of a portion of
the Real Property, the completion of such work as may be necessary in order
to remedy the effects of the condemnation so that the value and
income-generating characteristics of the Real Property are restored.


	
 

	
 


	
 

	
“Shopping
Center” means the Real Property together with the Leasehold Shopping
Center Parcel.


	
 

	
 


	
 

	
“Termination
Payments” means Rents paid to the Borrower in consideration of the
Borrower’s release of a party from liability for a contractual or other legal
obligation (e.g., lease termination, space contraction, and legal settlement
payments). Termination Payments do not include payments of Rents under
$250,000 paid pursuant to termination or space contraction options contained
in Leases approved by the Lender or in Leases deemed approved or not
requiring Lender approval under the Assignment.


	
 

	
 


	
4.

	
TITLE


	
 

	
 


	
 

	
The Borrower
represents to and covenants with the Lender and with its successors and
assigns that, at the point in time of the grant of this Deed of Trust, the
Borrower is well seized of good and indefeasible title to the Real Property,
in fee simple absolute, subject to no lien or encumbrance except the
Permitted Encumbrances. The Borrower warrants this estate and title to the
Lender and to its successors and assigns forever, against all lawful claims
and demands of all Persons. The Borrower shall maintain mortgagee title
insurance issued by a solvent carrier, covering the Real Property in an
amount at least equal to the amount of the Loan’s original principal balance.
This Deed of Trust is and shall remain a valid and enforceable first mortgage
on and security title to the Real Property, and if the validity or
enforceability of this first mortgage is attacked by appropriate proceedings,
the Borrower shall diligently and continuously defend it through appropriate
proceedings. Should the Borrower fail to do so, the Lender may at the
Borrower’s expense take all necessary action, including the engagement and
compensation of legal counsel, the prosecution or defense of litigation, and
the compromise or discharge of claims. THE BORROWER SHALL DEFEND, INDEMNIFY AND HOLD THE
LENDER HARMLESS IN ANY SUIT OR PROCEEDING BROUGHT TO CHALLENGE OR ATTACK THE
VALIDITY,






	
 

	
 

	
 


	
Deed of Trust and Security
Agreement

	
-9-

	
 


	
Preston Royal Village,
Dallas, Texas

	
 

	
 


	
AEGON Loan No. 10512155

	
 

	
 















	
 

	
 

	
 


	
 

	
ENFORCEABILITY OR PRIORITY OF THE LIEN
GRANTED BY THIS DEED OF TRUST, WHETHER OR NOT AS THE RESULT OF THE NEGLIGENCE
OF LENDER. If a prior construction, mechanics’ or
materialmen’s lien on the Real Property arises by operation of statute during
any construction or repair of the Improvements, the Borrower shall either
cause the lien to be discharged by paying when due any amounts owed to such
persons, or shall comply with Section 12 of this Deed of Trust.


	
 

	
 


	
5.

	
REPRESENTATIONS OF THE BORROWER


	
 

	
 


	
 

	
The Borrower
represents to the Lender as follows: 


	
 

	
 


	
 

	
5.1

	
Legal Control


	
 

	
 

	
 


	
 

	
 

	
The Borrower
is under the Legal Control of the Key Principal.


	
 

	
 

	
 


	
 

	
5.2

	
Formation, Existence, Good Standing


	
 

	
 

	
 


	
 

	
 

	
The Borrower
is a limited partnership duly organized, validly existing and in good
standing under the laws of Texas.


	
 

	
 

	
 


	
 

	
5.3

	
Power and Authority


	
 

	
 

	
 


	
 

	
 

	
The Borrower
has full power and authority to carry on its business as presently conducted,
to own the Property, to execute and deliver the Loan Documents, and to perform
its Obligations.


	
 

	
 

	
 


	
 

	
5.4

	
Anti-Terrorism Regulations


	
 

	
 

	
 


	
 

	
 

	
No Borrower,
Borrower Affiliate, or person owning an interest in the Borrower or in any
Borrower Affiliate, is either a “Specially Designated National” or a “Blocked
Person” as those terms are defined in the Office of Foreign Asset Control
Regulations (31 CFR Section 500 et seq.).


	
 

	
 

	
 


	
 

	
5.5

	
Due Authorization


	
 

	
 

	
 


	
 

	
 

	
The Loan
transaction and the performance of all of the Borrower’s Obligations have
been duly authorized by all requisite partnership action, and each individual
executing any Loan Document on behalf of the Borrower has been duly
authorized to do so.


	
 

	
 

	
 


	
 

	
5.6

	
No Default or Violations


	
 

	
 

	
 


	
 

	
 

	
The
execution and performance of the Borrower’s Obligations will not result in
any breach of, or constitute a default under, any contract, agreement,
document or other instrument to which the Borrower is a party or by which the
Borrower may be bound or affected, and do not and will not violate or
contravene any law to which the Borrower is subject; nor do any such other
instruments impose or contemplate any obligations which are or will be
inconsistent with the Loan Documents.


	
 

	
 

	
 


	
 

	
5.7

	
No
Further Approvals or Actions Required


	
 

	
 

	
 


	
 

	
 

	
No approval
by, authorization of, or filing with any Governmental Authority is necessary
in connection with the authorization, execution and delivery of the Loan
Documents by the Borrower.








	
 

	
 

	
 


	
Deed of Trust and Security
Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-10-

	
 















	
 

	
 

	
 


	
 

	
5.8

	
Due Execution and Delivery


	
 

	
 

	
 


	
 

	
 

	
Each of the
Loan Documents to which the Borrower is a party has been duly executed and
delivered on behalf of the Borrower.


	
 

	
 

	
 


	
 

	
5.9

	
Legal, Valid, Binding and Enforceable


	
 

	
 

	
 


	
 

	
 

	
Each of the
Loan Documents to which the Borrower is a party constitutes the legal, valid
and binding obligation of the Borrower, enforceable against the Borrower in
accordance with its terms.


	
 

	
 

	
 


	
 

	
5.10

	
Accurate Financial Information


	
 

	
 

	
 


	
 

	
 

	
All
financial information furnished by the Borrower to the Lender in connection
with the application for the Loan is true, correct and complete in all
material respects except as otherwise disclosed to Lender in writing, and
there has been no material adverse change in the financial condition of the
Borrower since the date of such financial information.


	
 

	
 

	
 


	
 

	
5.11

	
Compliance with Legal Requirements


	
 

	
 

	
 


	
 

	
 

	
All
governmental approvals and licenses required for the conduct of the
Borrower’s business and for the maintenance and operation of the Real
Property in compliance with applicable law are in full force and effect, and
the Real Property is currently being operated in compliance with the Legal
Requirements in all material respects.


	
 

	
 

	
 


	
 

	
5.12

	
Contracts and Franchises


	
 

	
 

	
 


	
 

	
 

	
All
contracts and franchises necessary for the conduct of the Borrower’s business
and for the operation of the Real Property in accordance with reasonable
commercial practice are in force.


	
 

	
 

	
 


	
 

	
5.13

	
No Condemnation Proceeding


	
 

	
 

	
 


	
 

	
 

	
As of the
Effective Date of this Deed of Trust, the Borrower has no knowledge of any
present, pending or threatened condemnation proceeding or award affecting the
Real Property.


	
 

	
 

	
 


	
 

	
5.14

	
No Casualty


	
 

	
 

	
 


	
 

	
 

	
As of the
Effective Date of this Deed of Trust, no damage to the Real Property by any
fire or other casualty has occurred, other than damage that has been
completely repaired, except as disclosed to Lender.


	
 

	
 

	
 


	
 

	
5.15

	
Independence of the Real Property


	
 

	
 

	
 


	
 

	
 

	
The Real
Property may be operated independently from other land and improvements not
included within or located on the Land, and it is not necessary to own or
control any property other than the Real Property in order to comply with the
Legal Requirements.


	
 

	
 

	
 


	
 

	
5.16

	
Complete Lots and Tax Parcels


	
 

	
 

	
 


	
 

	
 

	
The Land is
comprised exclusively of tax parcels that are entirely included within the
Land, and, if the Land is subdivided, of subdivision lots that are entirely
included within the Land.







	
 

	
 

	
 


	
Deed
of Trust and Security Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-11-

	
 















	
 

	
 

	
 


	
 

	
5.17

	
Intentionally Omitted


	
 

	
 

	
 


	
 

	
5.18

	
Ownership of Fixtures


	
 

	
 

	
 


	
 

	
 

	
The Borrower
owns the Fixtures free of any encumbrances, including purchase money security
interests, rights of lessors, and rights of sellers under conditional sales
contracts or other financing arrangements.


	
 

	
 

	
 


	
 

	
5.19

	
Commercial Property


	
 

	
 

	
 


	
 

	
 

	
The Real
Property is commercial rather than residential, and the Loan has not been
made for personal, family or household purposes.


	
 

	
 

	
 


	
 

	
5.20

	
Real Property is not Homestead Property


	
 

	
 

	
 


	
 

	
 

	
The Real
Property is NOT HOMESTEAD PROPERTY of the Borrower or of the spouse of any
person named as the Borrower.


	
 

	
 

	
 


	
 

	
5.21

	
Performance under Development Agreements


	
 

	
 

	
 


	
 

	
 

	
To
Borrower’s knowledge, all of the obligations of the owner of the Real
Property due under the Development Agreements have been fully, timely and
completely performed and such performance has been accepted by the related
governmental agency or utility company, and no Governmental Authority has
alleged that any default exists under any of the Development Agreements.


	
 

	
 

	
 


	
 

	
5.22

	
Status of Certain Title Matters


	
 

	
 

	
 


	
 

	
 

	
To
Borrower’s knowledge, each of the Easements included within the Appurtenances
(a) is valid and in full force and effect and may not be amended or
terminated, except for cause, without the consent of the Borrower, (b) has
not been amended or supplemented, (c) requires no approval of the
Improvements that has not been obtained, (d) is free of defaults or alleged
defaults, (e) does not provide for any assessment against the Real Property
that will not be paid in full prior to delinquency, and (f) has not been
violated by the owner of the Real Property or, to the best of the Borrower’s
knowledge, by any tenant of the Real Property.


	
 

	
 

	
 


	
 

	
5.23

	
No Prohibited Transactions


	
 

	
 

	
 


	
 

	
 

	
The Borrower
represents to the Lender that either (a) the Borrower is not an “employee
benefit plan” within the meaning of the Employee Retirement Income Security
Act of 1974, as amended (“ERISA”), that is subject to Title I of ERISA, a
“plan” within the meaning of Section 4975 of the Internal Revenue Code of
1986, as amended (the “Code”), or an entity that is deemed to hold “plan
assets” within the meaning of 29 C.F.R. §2510.3-101 of any such employee
benefit plan or (b) the execution of the Loan Documents, the acceptance of
the Loan by the Borrower and the existence of the Loan will not result in a
non-exempt prohibited transaction under §406 of ERISA or Section 4975 of the
Code. The Borrower further warrants and covenants that the foregoing
representation will remain true during the term of the Loan.


	
 

	
 

	
 


	
 

	
The Lender
acknowledges that the Borrower has relied in full or in part on
representations from, or on information furnished by, the seller of the Real
Property in making the representations of Subsections 5.11 (“Compliance with
Legal Requirements”), 5.12 (“Contracts and Franchises”), 5.13 (“No
Condemnation Proceeding”), 5.14 (“No Casualty”), 5.21 (“Performance under
Development Agreements”), 5.22 (“Status of Certain Title Matters”).








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-12-

	
 















	
 

	
 

	
 

	
 


	
6.

	
COVENANTS


	
 

	
 


	
 

	
6.1

	
Good Standing


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall remain in good standing as a limited partnership under the laws of
Texas and shall maintain in force all statements of fictitious name and
registrations necessary for the lawful operation of its business in Texas
during the term of the Loan.


	
 

	
 

	
 


	
 

	
6.2

	
No Default or Violations


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall not enter into any contract, agreement, document or other instrument,
if the performance of the Borrower’s Obligations would result in any breach
of, or constitute a default under, any such contract, agreement, document or
other instrument, or if the contract, agreement, document or other instrument
would impose or contemplate any obligations the performance of which would
result in a Default under the Loan Documents or would be inconsistent with
the performance of the Borrower’s Obligations.


	
 

	
 

	
 


	
 

	
6.3

	
Payment and Performance


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall pay the Indebtedness and perform all of its other Obligations, as and
when the Loan Documents require such payment and performance.


	
 

	
 

	
 


	
 

	
6.4

	
Bankruptcy Remote Entity


	
 

	
 

	
 


	
 

	
 

	
The Borrower
has not and will not:


	
 

	
 

	
 


	
 

	
 

	
(i)

	
engage in
any business or activity other than the ownership, operation and maintenance
of the Property, and activities incidental thereto;


	
 

	
 

	
 

	
 


	
 

	
 

	
(ii)

	
acquire or
own any assets other than (A) the Property, and (B) such incidental Personal
Property as may be necessary for the operation of the Property;


	
 

	
 

	
 

	
 


	
 

	
 

	
(iii)

	
merge into
or consolidate with any Person, or dissolve, terminate, liquidate in whole or
in part, transfer or otherwise dispose of all or substantially all of its
assets or change its legal structure;


	
 

	
 

	
 

	
 


	
 

	
 

	
(iv)

	
fail to
observe all organizational formalities, or fail to preserve its existence as
an entity duly organized, validly existing and in good standing (if
applicable) under the Legal Requirements of the jurisdiction of its
organization or formation, or amend, modify, terminate or fail to comply with
the provisions of its organizational documents;


	
 

	
 

	
 

	
 


	
 

	
 

	
(v)

	
own any
subsidiary, or make any investment in, any Person;


	
 

	
 

	
 

	
 


	
 

	
 

	
(vi)

	
commingle
its assets with the assets of any other Person;


	
 

	
 

	
 

	
 


	
 

	
 

	
(vii)

	
incur any
debt, secured or unsecured, direct or contingent (including guaranteeing any
obligation), other than the Indebtedness, unsecured trade payables and
unsecured equipment leases (both of which must be incurred in the ordinary
course of business relating to the ownership and operation of the Property)
provided the same (x) do not exceed at any time in the aggregate a maximum
amount of three percent (3%) of the outstanding principal amount of the Note,
and (y) are paid within sixty (60) days after the date incurred;


	
 

	
 

	
 

	
 


	
 

	
 

	
(viii)

	
fail to
maintain its records, books of account, bank accounts, financial statements,
accounting records and other entity documents separate and apart from those
of any other Person;








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-13-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
(ix)

	
enter into
any contract or agreement with any general partner, member, shareholder,
principal or Affiliate, except upon terms and conditions that are
intrinsically fair and substantially similar to those that would be available
on an arm’s-length basis with unaffiliated third parties;


	
 

	
 

	
 

	
 


	
 

	
 

	
(x)

	
maintain its
assets in such a manner that it will be costly or difficult to segregate,
ascertain or identify its individual assets from those of any other Person;


	
 

	
 

	
 

	
 


	
 

	
 

	
(xi)

	
assume or
guaranty the debts of any other Person, hold itself out to be responsible for
the debts of any other Person, or otherwise pledge its assets for the benefit
of any other Person or hold out its credit as being available to satisfy the
obligations of any other Person;


	
 

	
 

	
 

	
 


	
 

	
 

	
(xii)

	
make any
loans or advances to any Person;


	
 

	
 

	
 

	
 


	
 

	
 

	
(xiii)

	
fail to file
its own tax returns (unless prohibited by Legal Requirements from doing so);


	
 

	
 

	
 

	
 


	
 

	
 

	
(xiv)

	
fail either
to hold itself out to the public as a legal entity separate and distinct from
any other Person or to conduct its business solely in its own name or fail to
correct any known misunderstanding regarding its separate identity;


	
 

	
 

	
 

	
 


	
 

	
 

	
(xv)

	
fail to
maintain adequate capital for the normal obligations reasonably foreseeable
in a business of its size and character and in light of its contemplated
business operation;


	
 

	
 

	
 

	
 


	
 

	
 

	
(xvi)

	
fail to
allocate shared expenses (including shared office space) and to use separate
stationery, invoices and checks;


	
 

	
 

	
 

	
 


	
 

	
 

	
(xvii)

	
fail to pay
its own liabilities (including salaries of its own employees) from its own
funds; and


	
 

	
 

	
 

	
 


	
 

	
 

	
(xviii)

	
acquire
obligations or securities of its partners, members, shareholders or other
Affiliates, as applicable.


	
 

	
 

	
 

	
 


	
 

	
6.5

	
Payment of Impositions


	
 

	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall pay the Impositions on or before the last day on which they may be paid
without penalty or interest, and shall, within thirty (30) days, furnish the
Lender with a paid receipt or a cancelled check as evidence of payment. If
the Lender does not receive such evidence, the Lender may obtain it directly.
If it does so, the Lender will charge the Borrower an administrative fee of
$250 for securing the evidence of payment. The payment of this fee shall be a
demand obligation of the Borrower. The Borrower may meet the Imposition
payment requirements of this Subsection 6.5 by remitting the Monthly Escrow
Payments when due, by immediately providing Notice to the Lender of any new
Imposition or increased Imposition unknown to the Lender, and by paying to
the Lender on demand any amount required to increase the Escrow Fund to an
amount sufficient to permit the Lender to pay all Impositions from the Escrow
Fund on time. If the Borrower wishes to contest the validity or amount of an
Imposition, it may do so by complying with Section 12. If any new Legal
Requirement (other than a general tax on income or on interest payments)
taxes this Deed of Trust so that the yield on the Indebtedness would be
reduced, and the Borrower may lawfully pay the tax or reimburse the Lender
for its payment, the Borrower shall do so.








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-14-

	
 















	
 

	
 

	
 


	
 

	
6.6

	
Legal Control of the Borrower


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall remain under the Legal Control of the Key Principal during the term of
the Loan.


	
 

	
 

	
 


	
 

	
6.7

	
Management of the Real Property


	
 

	
 

	
 


	
 

	
 

	
The Real
Property shall be managed at all times by the Key Principal, by a property
management company engaged by the Key Principal to manage the Real Property,
or by a Qualified Property Manager.


	
 

	
 

	
 


	
 

	
6.8

	
Maintenance of the Real Property


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall not commit or permit any waste of the Real Property as a physical or
economic asset, and agrees to maintain in good repair the Improvements,
including structures, roofs, mechanical systems, parking lots or garages, and
other components of the Real Property that are reasonably necessary or
desirable for the use of the Real Property, or which the Borrower as landlord
under any Lease is required to maintain for the benefit of any tenant. In its
performance of this Obligation, the Borrower shall promptly and in a good and
workmanlike manner repair or restore, as required under Subsection 6.19, any
elements of the Improvements that are damaged or destroyed. The Borrower
shall also replace roofs, parking lots, mechanical systems, and other
elements of the Improvements requiring periodic replacement. The Borrower
shall carry out such replacements no less frequently than would a
commercially reasonable owner intending to maintain the maximum
income-generating potential of the Real Property over its reasonable economic
life. The Borrower shall not, without the prior written consent of the
Lender, demolish, reconfigure, or materially alter the structural elements of
the Improvements, unless such an action is the obligation of the Borrower
under a Lease approved by Lender. The Lender agrees that any request for its
consent to such an action shall be deemed given if the Lender does not
respond within fifteen (15) Business Days to any written request for such a
consent, if the request is accompanied by all materials required to permit
the Lender to analyze the proposed action.


	
 

	
 

	
 


	
 

	
6.9

	
Use of the Real Property


	
 

	
 

	
 


	
 

	
 

	
The Borrower
agrees that the Real Property may only be used as a retail property and for
no other purpose.


	
 

	
 

	
 


	
 

	
6.10

	
Legal Requirements


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall maintain in full force and effect all governmental approvals and
licenses required for the conduct of the Borrower’s business and for the
maintenance and operation of the Real Property in compliance with applicable
law, and shall comply with all Legal Requirements relating to the Real
Property at all times.


	
 

	
 

	
 


	
 

	
6.11

	
Contracts and Franchises


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall maintain in force all contracts and franchises necessary for the
conduct of the Borrower’s business and for the operation of the Real Property
in accordance with good commercial practice.


	
 

	
 

	
 


	
 

	
6.12

	
Covenants Regarding Certain Title Matters


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall promptly pay, perform and observe all of its obligations under the
Easements included within the Appurtenances or under reciprocal 








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-15-

	
 















	
 

	
 

	
 


	
 

	
 

	
easement
agreements, operating agreements, declarations, and restrictive covenants
included in the Permitted Encumbrances, shall not modify or consent to the
termination of any of them without the prior written consent of the Lender,
not to be unreasonably conditioned, withheld, or delayed, shall promptly
furnish the Lender with copies of all notices of default under them, and
shall cause all covenants and conditions under them and benefiting the Real
Property to be fully performed and observed.


	
 

	
 

	
 


	
 

	
6.13

	
Independence of the Real Property


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall maintain the independence of the Real Property from other land and
improvements not included within or located on the Land. In fulfilling this
covenant, the Borrower shall neither take any action which would make it
necessary to own or control any property other than the Real Property in
order to meet the obligations of the landlord under any Lease, or in order to
comply with the Legal Requirements, nor take any action which would cause any
land or improvements other than the Land and the Improvements to rely upon
the Land or the Improvements for those purposes.


	
 

	
 

	
 


	
 

	
6.14

	
Complete Lots and Tax Parcels


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall take no action that would result in the inclusion of any portion of the
Land in a tax parcel or subdivision lot that is not entirely included within
the Land.


	
 

	
 

	
 


	
 

	
6.15

	
Commercial Property


	
 

	
 

	
 


	
 

	
 

	
The Real
Property shall be used for commercial rather than for residential, personal,
family or household purposes.


	
 

	
 

	
 


	
 

	
6.16

	
Real Property is not Homestead Property


	
 

	
 

	
 


	
 

	
 

	
The Real
Property shall NOT BECOME HOMESTEAD PROPERTY of the Borrower or of the spouse
of any person named as the Borrower.


	
 

	
 

	
 


	
 

	
6.17

	
Performance under Development Agreements


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall fully, timely and completely perform all of the obligations of the
owner of the Real Property due under the Development Agreements (in all
material respects) and shall cause no default under any of the Development
Agreements.


	
 

	
 

	
 


	
 

	
6.18

	
Status of Certain Title Matters


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall not take or fail to take any action with respect to the Easements
included within the Appurtenances or the reciprocal easement agreements,
operating agreements, declarations, and restrictive covenants included in the
Permitted Encumbrances if, as the result of such an action or failure, the
subject Easement or other title matter would (a) be rendered invalid or
without force or effect, (b) be amended or supplemented without the consent
of the Lender, (c) be placed in default or alleged default, (d) result in any
lien against the Real Property, or (e) give rise to any assessment against
the Real Property, unless immediately paid in full.


	
 

	
 

	
 


	
 

	
6.19

	
Restoration upon Casualty or Condemnation


	
 

	
 

	
 


	
 

	
 

	
If a
casualty or condemnation occurs, the Borrower shall promptly commence and
diligently complete the Restoration of the Real Property, provided the
related 








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-16-

	
 















	
 

	
 

	
 


	
 

	
 

	
Insurance
Proceeds or Condemnation Proceeds held by the Lender are available for
Restoration under the terms of Sections 8.4 and 8.6.


	
 

	
 

	
 


	
 

	
6.20

	
Performance of Landlord Obligations 


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall perform its obligations as landlord under the Leases and shall neither
take any action, nor fail to take any action, if the action or failure would
be inconsistent with the commercially reasonable management of the Real
Property for the purpose of enhancing its long-term performance and value.


	
 

	
 

	
 


	
 

	
6.21

	
Financial Reports and Operating Statements








	
 

	
 

	
 

	
 


	
 

	
 

	
(a)

	
Maintenance of Books and Records


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
During the
term of the Loan, the Borrower shall maintain complete and accurate
accounting and operational records, including copies of all Leases and other
material written contracts relating to the Real Property, copies of all tax
statements, and evidence to support the payment of all material
property-related expenses.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (b)

	
Delivery of Financial and Property-Related Information


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Within one
hundred twenty (120) days after the end of each of its fiscal years, or, if a
Default exists, on demand by the Lender, the Borrower shall deliver to the
Lender copies of the financial statements of the Borrower, including balance
sheets and earnings statements. Within thirty (30) days after the end of each
of its fiscal quarters, or, if a Default exists, on demand by the Lender, the
Borrower shall deliver to the Lender (A) a complete and accurate operating
statement for the Real Property, and (B) a complete rent roll, all in form
satisfactory to the Lender. The operating statement and rent roll must be
certified by the Borrower to be true and correct and must include each
tenant’s name, unit numbers, square footage occupied and leased, rents,
delinquencies, vacancies, and other income received and expenses. In
addition, the Borrower shall provide, with such rent rolls or otherwise at
the Lender’s reasonable request, the most recent available sales reports in
respect of all retail tenants occupying over 12,000 square feet and required
to provide such reports under their Leases. If the Borrower fails to deliver
the items required in this Subsection, the Lender may engage an accounting
firm to prepare the required items. The Borrower shall cooperate fully with
any investigative audit required to permit the accounting firm to produce
these items, and the fees and expenses incurred in connection with their
preparation shall be paid on demand by the Borrower.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (c)

	
Reporting Format


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
shall cooperate in providing the reports required above in any
industry-standard format that the Lender may designate, provided such
reporting format is not cost prohibitive.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (d)

	
Effect of Failure to Deliver Financial and Property Reports


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
If no
Default exists and the Borrower or the Carveout Obligor fails to provide the
financial and property reports required under this Section before the
applicable deadline, the Lender will provide a Notice of this 








	
 

	
 

	
 


	
Deed of Trust and
Security Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-17-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
failure and
a thirty (30)-day opportunity to cure before a Default shall exist.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (e)

	
Certification of Information


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Lender shall
not initially require that the annual financial and operating statements
provided under this Subsection be certified by an independent certified
public accountant as having been prepared in accordance with generally
accepted accounting principles, consistently applied, or, in the case of
financial statements prepared on a cash or income tax basis, or of operating
statements, as not materially misleading based on an audit conducted in
accordance with generally accepted auditing standards. The Borrower shall,
however, certify that such statements are true and accurate in all material
respects, and the Lender expressly reserves the right to require such a
certification by an independent certified public accountant if a Default
exists or if the Lender has reason to believe that any previously provided
financial or operating statement is misleading in any material respect.


	
 

	
 

	
 

	
 


	
 

	
6.22

	
Estoppel Statements


	
 

	
 

	
 


	
 

	
 

	
Upon request
by the Lender, the Borrower shall, within ten (10) Business Days of Notice of
the request, furnish to the Lender or to whom it may direct, a written
statement acknowledging the amount of the Indebtedness and disclosing all
known offsets or defenses exist against the Indebtedness. Thereafter, the
Borrower shall be estopped from asserting any other offsets or defenses
alleged to have arisen and which should have been known to Borrower prior to
the date of the statement.


	
 

	
 

	
 


	
 

	
6.23

	
Prohibition on Certain Distributions


	
 

	
 

	
 


	
 

	
 

	
If a Default
exists under Subsection 10.1 or under any of Subparagraphs (b), (c), (d), (e)
or (f) of Subsection 10.2, the Borrower shall not pay any dividend or make
any partnership, trust or other distribution, and shall not make any payment
or transfer any property in order to purchase, redeem or retire any interest
in its beneficial interests or ownership.


	
 

	
 

	
 


	
 

	
6.24

	
Use of Loan Proceeds


	
 

	
 

	
 


	
 

	
 

	
The Loan
proceeds shall be used solely for commercial purposes.


	
 

	
 

	
 


	
 

	
6.25

	
Prohibition on Cutoff Notices


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall not issue any Notice to the Lender to the effect that liens on the Real
Property after the date of the Notice will enjoy priority over the lien of
this Deed of Trust.


	
 

	
 

	
 


	
 

	
6.26

	
Prohibited Person Compliance


	
 

	
 

	
 


	
 

	
 

	
The Borrower warrants, represents and covenants that neither the
Borrower nor any Obligor nor any of their respective affiliated entities is
or will be an entity or person (i) that is listed in the Annex to, or is
otherwise subject to the provisions of, Executive Order 13224 issued on
September 24, 2001 (“EO13224”), (ii) whose name appears on the United
States Treasury Department’s Office of Foreign Assets Control (“OFAC”) most
current list of “Specifically Designated Nationals and Blocked Persons”
(which list may be published from time to time in various mediums including,
but not limited to, the OFAC website,








	
 

	
 

	
 


	
Deed of Trust and
Security Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-18-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
http:www.treas.gov/ofac/t11sdn.pdf), (iii) who commits, threatens to
commit or supports “terrorism”, as that term is defined in EO13224, or (iv)
who is otherwise affiliated with any entity or person listed above (any and
all parties or persons described in subparts [i] - [iv] above are herein
referred to as a “Prohibited Person”). The Borrower covenants and agrees that
neither the Borrower, nor any Obligor nor any of their respective affiliated
entities will (i) conduct any business, nor engage in any transaction or
dealing, with any Prohibited Person, including, but not limited to, the
making or receiving of any contribution of funds, goods, or services to or
for the benefit of a Prohibited Person, or (ii) engage in or conspire to
engage in any transaction that evades or avoids, or has the purpose of
evading or avoiding, or attempts to violate, any of the prohibitions set
forth in EO13224. The Borrower further covenants and agrees to deliver (from
time to time) to the Lender any such certification or other evidence as may
be requested by the Lender in its sole and absolute discretion, confirming
that (i) neither the Borrower nor any Obligor is a Prohibited Person and
(ii) neither the Borrower nor any Obligor has engaged in any business,
transaction or dealings with a Prohibited Person, including, but not limited
to, the making or receiving of any contribution of funds, goods, or services,
to or for the benefit of a Prohibited Person. Notwithstanding anything
contained in the foregoing to the contrary, any representation in this
Section as to AmREIT, Inc., is given solely to Borrower’s actual knowledge,
and unless otherwise required by law, Borrower shall have no duty to confirm
that any shareholder of AmREIT, Inc., is not a Prohibited Person, except with
respect to shareholders owning more than a 10% interest in AmREIT, Inc.


	
 

	
 

	
 

	
 


	
7.

	
INSURANCE REQUIREMENTS


	
 

	
 


	
 

	
At all times
until the Indebtedness is paid in full, the Borrower shall maintain insurance
coverage and administer insurance claims in compliance with this Section.


	
 

	
 


	
 

	
7.1

	
Minimum Required Coverages


	
 

	
 

	
 


	
 

	
 

	
 (a)

	
 “All Risk” Property Insurance Coverage


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
shall maintain property insurance coverage at least equivalent or superior to
the Insurance Services Offices (ISO) “Cause of Loss – Special Form” coverage
in an amount not less than one hundred percent (100%) of the replacement cost
of all insurable elements of the Real Property and of all tangible Personal
Property, with coinsurance waived, or if a coinsurance clause is in effect,
with an Agreed Amount endorsement acceptable to the Lender. Coverage shall
extend to the Real Property and to all tangible Personal Property.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (b)

	
Broad Form Boiler and Machinery/HVAC/Equipment Breakdown


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
shall maintain broad form boiler and machinery coverage, including coverage
for resulting loss of income/loss of rents/extra expense if any of the
following is located on the Real Property: any boiler or other fired-pressure
vessel; any machinery containing pressure; or any machinery generating or
transmitting power, including without limitation, centralized HVAC equipment,
community water heaters, refrigeration or air conditioning vessels, or pumps.








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-19-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
 (c)

	
Flood


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
If the Real
Property is located in a special flood hazard area (SFHA, also known as the
100-year floodplain) according to the most current flood insurance rate map
(FIRM) issued by the Federal Emergency Management Agency (FEMA) and if flood
insurance is available, the Borrower shall maintain flood insurance coverage
on all insurable elements of Real Property and of all tangible Personal
Property for one hundred percent (100%) of the replacement cost or the
maximum amount available under the National Flood Insurance Program (NFIP),
and if available the resulting loss of business income/loss of rents/extra
expense.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (d)

	
Windstorm


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
shall maintain windstorm coverage that includes all named windstorms.
Windstorm coverage may be provided by a policy separate from the other
insurance coverage required in this Section.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (e)

	
Business Interruption/Time Element Coverage


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
shall maintain a form of business interruption coverage or loss of
rents/extra expense for resulting loss of income by a covered peril in the
amount of twelve (12) months of one year’s business income from the Property
or loss of rents/extra expense.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (f)

	
Construction-Related Coverage


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
During the
term of the Loan, while construction of any Improvements is in progress, the
Borrower shall maintain Builder’s Risk coverage written on an all risk basis,
completed value form, with limits reflecting the total completed value of the
structure. Coverage shall extend to all property of the Borrower that is to
be used during the excavation and preparation of the site of the
Improvements, the construction of the Improvements (whether underground or
above-ground) or that is intended to be incorporated into the Improvements,
whether located on the Real Property, stored off-site or in transit. The
Borrower, the Guarantor, and the general contractor (if it is an entity other
than the Borrower) shall be named as insured under liability coverage.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (g)

	
Comprehensive/General Liability (CGL)


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
shall maintain commercial general liability coverage for not less than
$1,000,000 combined single limit per occurrence and general aggregate limit
of $2,000,000.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (h)

	
Umbrella/Excess Liability


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
shall maintain umbrella or excess liability coverage in an amount reasonably
determined by the Lender, but in no event less than $1,000,000 per occurrence
and in the aggregate. Umbrella or excess coverage should follow form to the
underlying coverage.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (i)

	
Elective or Additional Coverages


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Lender
may require additional insurance coverages or endorsements reasonably
appropriate to the property type and site location and available at
commercially reasonable rates. Additional coverages may 







	
 

	
 

	
 


	
Deed of Trust and
Security Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-20-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
include
earthquake, mine subsidence, sinkhole, personal property, supplemental
liability, or coverages of other property-specific risks.


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
7.2

	
Blanket Coverage


	
 

	
 

	
 


	
 

	
 

	
The Borrower
may satisfy the requirements of this Section through a so-called “blanket
insurance policy” if (a) the policy includes limits by property location and
(b) the Lender determines, in the exercise of its sole and absolute
discretion, that the amount of such coverage is sufficient in light of the
other risks and properties insured under the blanket policy. The Obligation
to provide any policy or coverage under this Section may be satisfied by the
policy or coverage carried by the tenant under an approved Key Lease, provided
such policy or coverage is primary and noncontributing; and further provided
that, in the case of such tenant’s property policy, the Borrower is named as
an additional named insured or as an additional insured, and the Lender is
named as first mortgagee, or, in the case of such tenant’s liability
insurance policy, the Borrower and the Lender are named as additional
insureds. 


	
 

	
 

	
 


	
 

	
7.3

	
How the Lender Shall Be Named


	
 

	
 

	
 


	
 

	
 

	
On all
property insurance policies and coverages required under this Section (including
coverage against loss of business income, also known as business income/loss
of rents/extra expense), the Lender must be named as “first mortgagee” under
a standard mortgagee clause and as a “loss payee” under a loss payee
endorsement or a Lenders Loss Payable endorsement. On the Builder’s Risk and
Commercial General Liability policies, the Lender must be named as an
“additional insured.” The Lender shall be referred to verbatim as follows:
“Transamerica Financial Life Insurance Company and its successors, assigns,
and affiliates; as their interest may appear; c/o AEGON USA Realty Advisors,
LLC; Mortgage Loan Dept.; 4333 Edgewood Rd., NE; Cedar Rapids, Iowa
52499-5443.”


	
 

	
 

	
 


	
 

	
7.4

	
Rating


	
 

	
 

	
 


	
 

	
 

	
Each
insurance carrier providing insurance required under this Section must have,
independently of its parent’s or any reinsurer’s rating, a Best’s Rating of
A-, and a Financial Size Rating of X or better, as reported in the most
current issue of Best’s Insurance Guide, or as reported by Best on its
internet web site.


	
 

	
 

	
 


	
 

	
7.5

	
Deductible


	
 

	
 

	
 


	
 

	
 

	
The maximum
deductible on each required coverage or policy is $100,000. 


	
 

	
 

	
 


	
 

	
7.6

	
Notices,
Changes and Renewals


	
 

	
 

	
 


	
 

	
 

	
All policies
must require the insurance carrier to give the Lender a minimum of ten (10)
days’ notice in the event of modification, cancellation or termination for
nonpayment of premium and a minimum of thirty (30) days’ notice of
cancellation or nonrenewal, or as required under state law. Prior to each
policy renewal, the Borrower shall report to the Lender all sublimits, margin
clauses and other conditions and endorsements that reduce the coverages
required in this Section and changes to deductibles for sub-limited
coverages, self-insured retentions, fronting arrangements, or other
endorsements or conditions that require the Borrower to retain additional
risk. The Borrower shall report to the Lender immediately any facts known to the Borrower that may adversely affect the appropriateness
or enforceability of any insurance contract, including, 








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-21-

	
 















	
 

	
 

	
 


	
 

	
 

	
without limitation, changes in the ownership or occupancy of the Real
Property, any hazard to the Real Property and any matters that may give rise
to any claim. No fewer than thirty (30) days prior to
expiration of any policy required under this Section, the Borrower shall
provide either (a) an original or certified copy of the renewed policy, or
(b) a certificate of insurance, including an Acord 28 (real property), Acord
27 (personal property) or Acord 25 (liability) certificate, or another
document satisfactory to the Lender conferring on the Lender the rights and
privileges of mortgagee. If the Borrower meets the foregoing requirement
under clause (b), the Borrower shall supply an original or certified copy of
the original policy within ninety (90) days. All certificates, documents, and
original or certified copies of policies must (i) name the Borrower as a
named insured or as an additional insured, (ii) include the complete and
accurate property address, (iii) show that the applicable coverage or
endorsement is in full force and effect, (iv) convey all of the insured’s
rights and privileges under the policy to the mortgagee (Lender), (v) include
the Lender as loss payee (for business interruption coverages), and (vi)
include the Lender as additional insured (for liability coverages).


	
 

	
 

	
 


	
 

	
7.7

	
Unearned
Premiums


	
 

	
 

	
 


	
 

	
 

	
If this Deed
of Trust is foreclosed, the Lender may at its discretion cancel any of the
insurance policies required under this Section and apply any unearned
premiums to the Indebtedness.


	
 

	
 

	
 


	
 

	
7.8

	
Forced
Placement of Insurance


	
 

	
 

	
 


	
 

	
 

	
If the
Borrower fails to comply with the requirements of this Section, the Lender
may, at its discretion, procure any required insurance. Any premiums paid for
such insurance, or the allocable portion of any premium paid by the Lender
under a blanket policy for such insurance, shall be a demand obligation under
this Deed of Trust, and any unearned premiums under such insurance shall
comprise Insurance Proceeds and therefore a portion of the Property.


	
 

	
 

	
 


	
 

	
7.9

	
Insurance
Disclosure Notice


	
 

	
 

	
 


	
 

	
 

	
TEXAS FINANCE CODE SECTION 307.052 COLLATERAL PROTECTION INSURANCE
NOTICE: (A) BORROWER IS REQUIRED TO (i) KEEP THE
PROPERTY INSURED AGAINST DAMAGE IN THE AMOUNT SPECIFIED HEREIN; (ii) PURCHASE
THE INSURANCE FROM AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE STATE
OF TEXAS OR AN ELIGIBLE SURPLUS LINES INSURER OR OTHERWISE AS PROVIDED
HEREIN; AND (iii) NAME LENDER AS THE PERSON TO BE PAID UNDER THE POLICY IN
THE EVENT OF A LOSS AS PROVIDED HEREIN; (B) SUBJECT TO THE PROVISIONS HEREOF,
BORROWER MUST, IF REQUIRED BY LENDER, DELIVER TO LENDER A COPY OF THE POLICY
AND PROOF OF THE PAYMENT OF INSURANCE PREMIUMS; AND (C) SUBJECT TO THE
PROVISIONS HEREOF, IF BORROWER FAILS TO MEET ANY REQUIREMENT LISTED IN THE
FOREGOING SUBPARTS (A) OR (B), LENDER MAY OBTAIN COLLATERAL PROTECTION
INSURANCE ON BEHALF OF BORROWER AT BORROWER’S EXPENSE.








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement

Preston Royal Village, Dallas, Texas

AEGON Loan No. 10512155

	
-22-

	
 















	
 

	
 

	
 


	
8.

	
INSURANCE AND CONDEMNATION PROCEEDS 


	
 

	
 

	
 


	
 

	
8.1

	
Provisions of APproved Key Leases to Govern 


	
 

	
 

	
 


	
 

	
 

	
The Lender
agrees to permit the use of Insurance Proceeds and Condemnation Proceeds by
the Borrower to meet its obligations as landlord under any Key Lease approved
by the Lender at the time of the origination of the Loan or during the Loan
term to effect the Restoration of the premises, provided (a) no Default
exists, (b) the Lender may hold the Insurance Proceeds or Condemnation
Proceeds and condition their disbursement as described in Subsections 8.6 and
8.8, and (c) the tenant under the related Key Lease confirms to the Lender in
writing that it is committed to pay full Rent following the completion of the
Restoration. The remaining provisions of this Section shall apply to the
extent that they are consistent with the terms of the approved Key Lease. 


	
 

	
 

	
 


	
 

	
8.2

	
Adjustment and Compromise of Claims and Awards 


	
 

	
 

	
 


	
 

	
 

	
The Borrower
may settle any insurance claim or condemnation proceeding if the effect of
the casualty or the condemnation may be remedied for $60,000 or less. If a
greater sum is required, the Borrower may not settle any such claim or
proceeding without the advance written consent of the Lender. If a Default
exists, the Borrower may not settle any insurance claim or condemnation
proceeding without the advance written consent of the Lender. 


	
 

	
 

	
 


	
 

	
8.3

	
Direct Payment to the Lender of Proceeds 


	
 

	
 

	
 


	
 

	
 

	
If the
Insurance Proceeds received in connection with a casualty or the Condemnation Proceeds received in respect
of a condemnation exceed $700,000, or if there is a Default, then such
proceeds shall be paid directly to the Lender. The Lender shall have the
right to endorse instruments which evidence proceeds that it is entitled to
receive directly. 


	
 

	
 

	
 


	
 

	
8.4

	
Availability to the Borrower of Proceeds 


	
 

	
 

	
 


	
 

	
 

	
Insurance
Proceeds and Condemnation Proceeds shall be paid to the Lender for use in
accordance with Subsection 8.5, unless the amount received is less than
$700,000, in which case the Borrower shall have the right to use the
Insurance Proceeds and Condemnation Proceeds to carry out the Restoration of
the Real Property, subject to the conditions set forth in Subsections 8.6,
8.7, and 8.8. 


	
 

	
 

	
 


	
 

	
 

	
If the amount received in respect of a casualty or condemnation
equals or exceeds $700,000, and if the Loan-to-Value ratio of the Property on
completion will be sixty-five percent (65%) or less, as determined by the
Lender in its discretion based on its estimate of the market value of the
Real Property, the Lender shall receive such Insurance Proceeds or
Condemnation Proceeds directly and hold them in a fund for Restoration
subject to the conditions set forth in Subsections 8.6, 8.7, and 8.8 of this
Section. If the Lender’s estimate of the market value of the Real Property implies a
Loan-to-Value ratio of over 65%, and the Borrower disagrees with the Lender’s
estimate, the Borrower may require that the Lender engage an independent
appraiser (the “Fee Appraiser”) to prepare and submit to AEGON a full narrative
appraisal report estimating the market value of the Real Property. The Fee
Appraiser shall be certified in Texas and shall be a member of a national
appraisal organization that has adopted the Uniform Standards of Professional
Appraisal Practice (USPAP) established by the Appraisal Standards Board of
the Appraisal Foundation. The Fee Appraiser 








	
 

	
 

	
 


	
Deed of Trust and Security
Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-23-

	
 















	
 

	
 

	
 


	
 

	
 

	
will be
required to use assumptions and limiting conditions established by the Lender
prior to the funding of the Loan and to prepare the appraisal in conformity
with the Lender’s Appraisal Guidelines. For purposes of this Section, the
independent appraiser’s value conclusion shall be binding on both the Lender
and the Borrower. The Borrower shall have the right to make a prepayment of
the Loan, without premium, sufficient to achieve this Loan-to-Value ratio.
The independent fee appraisal shall be at the Borrower’s expense, and the
Borrower shall pay to the Lender an administrative fee of $2,500 in
connection with its review. The Lender may require that the Borrower deposit
$10,000 with the Lender as security for these expenses or may pay the Fee
Appraiser’s and administrative fees from the proceeds at its sole discretion.



	
 

	
 

	
 


	
 

	
8.5

	
Lender’s Use of Proceeds 


	
 

	
 

	
 


	
 

	
 

	
Unless the
Borrower has the right to use the Insurance Proceeds or the Condemnation
Proceeds under the foregoing paragraphs, the Lender may, in its sole and
absolute discretion, either apply them to the Loan balance or disburse them
for the purposes of repair and reconstruction, or to remedy the effects of
the condemnation. No prepayment premium will be charged on Insurance Proceeds
or Condemnation Proceeds applied to reduce the principal balance of the Loan.



	
 

	
 

	
 


	
 

	
8.6

	
Conditions to Availability of Proceeds



	
 

	
 

	
 


	
 

	
 

	
The Lender
shall have no obligation to release Insurance Proceeds or Condemnation
Proceeds to the Borrower, and may hold such amounts as additional security
for the Loan, if (a) a Default exists, (b) the Lender has delivered to the
Borrower Notice of any act, omission or circumstance that will, if uncured,
become a Default, and the required cure has not been effected or (c) if the
Insurance Proceeds or Condemnation Proceeds received by the Lender and any
other funds deposited by the Borrower with the Lender are insufficient, as
determined by the Lender in its reasonable discretion, to complete the
Restoration. If a Default exists, the Lender may at its sole and absolute
discretion apply such Insurance Proceeds and Condemnation Proceeds to the
full or partial cure of the Default. 


	
 

	
 

	
 


	
 

	
8.7

	
Gross Up of Restoration Fund; Permitted Mezzanine Financing 


	
 

	
 

	
 


	
 

	
 

	
If the
Lender determines that the Insurance Proceeds or Condemnation Proceeds received
in respect of a casualty or a condemnation, as the case may be, would be
insufficient to permit the Borrower to effect the Restoration, then the
Borrower shall deposit in the Restoration Fund such additional funds as the
Lender determines are necessary to effect the Restoration. The Lender agrees
to permit the Borrower to secure mezzanine financing in order to meet its
obligation under this Subsection. The mezzanine loan may be secured by a
pledge of interests in the Borrower, subject to an inter-creditor agreement
on market terms for securitized loans. 


	
 

	
 

	
 


	
 

	
8.8

	
Draw Requirements 


	
 

	
 

	
 


	
 

	
 

	
If the
amount of Insurance Proceeds or Condemnation Proceeds exceed $700,000, the
Borrower’s right to receive Insurance Proceeds and Condemnation Proceeds held
by the Lender under this Section shall be conditioned on the Lender’s
approval of plans and specifications for the Restoration. Each draw, except
the last, shall be in the minimum amount of $50,000. Draw requests shall be
accompanied by customary evidence of construction completion, and by 








	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-24-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
endorsements
to the Lender’s mortgagee title insurance coverage insuring the absence of
construction, mechanics’ or materialmen’s liens. Draws based on partial
completion of the Restoration shall be subject to a ten percent (10%)
holdback. All transactional expenses shall be paid by the Borrower. 


	
 

	
 

	
 


	
9.

	
ESCROW FUND 


	
 

	
 


	
 

	
The Borrower
shall pay the Monthly Escrow Payment on the first (1st) day of every month,
commencing with the month in which the first regular payment of principal and
interest is due. The Lender shall hold Monthly Escrow Payments in a
non-interest-bearing fund from which the Lender will pay on a timely basis
those Escrow Expenses that the Lender has anticipated will become payable on
a regular basis during the Loan’s term, and on which the Lender has based its
determination of the Monthly Imposition Requirement, the Monthly Insurance
Premium Requirement and the Monthly Reserve Requirement. The Escrow Fund will
be maintained as an accounting entry in the Lender’s general account, where
it may be commingled with the Lender’s other funds. The Lender may reanalyze
the projected Escrow Expenses from time to time and shall advise the Borrower
of any change in the amount of the Monthly Escrow Payment. Upon the
foreclosure of this Deed of Trust, the delivery of a deed in lieu of
foreclosure, or the payoff of the Loan, the Lender shall apply amounts in the
Escrow Fund, net of accrued Escrow Expenses, to the Indebtedness. The Lender
shall remit any amounts in excess of the Indebtedness to the Borrower. 


	
 

	
 

	
 


	
10.

	
DEFAULT 


	
 

	
 


	
 

	
10.1

	
Payment Defaults 


	
 

	
 

	
 


	
 

	
 

	
A “Default”
shall exist without Notice upon the occurrence of any of the following
events: 


	
 

	
 

	
 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (a)

	
Scheduled Payments 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Subject to
the terms of the Note, Borrower’s failure to pay, or to cause to be paid, (i)
any regular monthly payment of principal and interest under the Note,
together with any required Monthly Escrow Payment, on or before the tenth
(10th) day of the month in which it is due or (ii) any other scheduled
payment under the Note, this Deed of Trust or any other Loan Document. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (b)

	
Payment at Maturity 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The
Borrower’s failure to pay, or to cause to be paid, the Indebtedness when the
Loan matures by acceleration under Section 16, because of a transfer or
encumbrance under Section 13, or by lapse of time. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (c)

	
Demand Obligations 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The
Borrower’s failure to pay, or to cause to be paid, within five (5) Business
Days of the Lender’s demand, any other amount required under the Note, this
Deed of Trust or any of the other Loan Documents. 


	
 

	
 

	
 

	
 


	
 

	
10.2

	
Incurable Non-Monetary Default 


	
 

	
 

	
 

	
 


	
 

	
 

	
A Default
shall exist upon any of the following (each of which is an “Incurable
Non-Monetary Default”): 








	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-25-

	
 
















	
 

	
 

	
 

	
 


	
 

	
 

	
 (a)

	
Material Untruth or Misrepresentation 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Lender’s
discovery that any representation made by the Borrower in any Loan Document
was materially untrue or misleading when made, if the misrepresentation
either was intentional or is not capable of being cured as described in
Subsection 10.3(a) below. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (b)

	
Due on Sale or Encumbrance 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The
occurrence of any sale, conveyance, transfer or vesting that would result in
the Loan becoming immediately due and payable at the Lender’s option under
Section 13. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (c)

	
Voluntary Bankruptcy Filing 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The filing
by the Borrower of a petition in bankruptcy or for relief from creditors
under any present or future law that affords general protection from
creditors. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (d)

	
Insolvency 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The failure
of the Borrower generally to pay its debts as they become due, its admission
in writing to an inability so to pay its debts, the making by the Borrower of
a general assignment for the benefit of creditors, or a judicial
determination that the Borrower is insolvent. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (e)

	
Receivership 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The
appointment of a receiver or trustee to take possession of any of the assets
of the Borrower.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (f)

	
Levy or Attachment 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The taking
or seizure of any material portion of the Property under levy of execution or
attachment.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (g)

	
Lien 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The filing
against the Real Property of any lien or claim of lien for the performance of
work or the supply of materials, or the filing of any federal, state or local
tax lien against the Borrower, or against the Real Property, unless the
Borrower promptly complies with Section 12 of this Deed of Trust. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (h)

	
Defaults under other Loan Documents 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The
existence of any default under any other Loan Document, provided any required
Notice of such default has been given and any applicable cure period has
expired. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (i)

	
Dissolution or Liquidation 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
shall initiate or suffer the commencement of a proceeding for its dissolution
or liquidation, and such proceeding shall not be dismissed within ninety (90)
days, or the Borrower shall cease to exist as a legal entity (unless
resulting in a Permitted Transfer). 


	
 

	
 

	
 

	
 


	
 

	
10.3

	
Curable Non-Monetary Default 


	
 

	
 

	
 

	
 


	
 

	
 

	
A Default
shall exist, following the cure periods specified below, under the following
circumstances: 








	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-26-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
 (a)

	
Unintentional Misrepresentations that are Capable of Being Cured 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
A “Default”
shall exist, with Notice, if the Lender discovers that the Borrower has
unintentionally made any material misrepresentation that is capable of being
cured, unless the Borrower promptly commences and diligently pursues a cure
of the misrepresentation approved by the Lender, and completes the cure
within sixty (60) days. Any such cure shall place the Lender in the risk
position that would have existed had the false representation been true when
made. If the Borrower has relied in full or in part on representations from,
or on information furnished by, the seller of the Real Property as described
in the last sentence of Section 5.23, and the representation is capable of
being cured as described above, the misrepresentation shall be considered
curable for purposes of this paragraph. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (b)

	
Involuntary Bankruptcy or Similar Filing 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
becomes the subject of any petition or action seeking to adjudicate it
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief, or that may result in a composition of its debts, provide for the
marshaling of the Borrower’s assets for the satisfaction of its debts, or
result in the judicially ordered sale of the Borrower’s assets for the
purpose of satisfying its obligations to creditors, unless a motion for the
dismissal of the petition or other action is filed within twenty (20) days
and results in its dismissal within ninety (90) days of the filing of the
petition or other action. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (c)

	
Entry of a Material Judgment 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Any judgment
is entered against the Borrower or any other Obligor, and the judgment may
materially and adversely affect the value, use or operation of the Real
Property, unless the judgment is satisfied within twenty (20) Days. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (d)

	
Failure to provide Financial and Property Reports 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
If the
Borrower or the Carveout Obligor fails to provide the financial and property
reports required under this Deed of Trust or the Carveout Guarantee and
Indemnity, as the case may be, before the applicable deadline, unless such
failure within thirty (30) days after such notice 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (e)

	
Other Defaults 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
fails to observe any promise or covenant made in this Deed of Trust, unless
the failure results in a Default described elsewhere in this Section 13,
provided the Lender delivers written Notice to the Borrower of the existence
of such an act, omission or circumstance, and that such an act, omission or
circumstance shall constitute a Default under the Loan Documents unless the
Borrower promptly initiates an effort to cure the potential Default, pursues
the cure diligently and continuously, and succeeds in effecting the cure
within one hundred twenty (120) days of its receipt of Notice. The Lender
shall afford the Borrower an additional period of one hundred twenty (120)
days in cases where construction or repair is needed to cure the potential
Default, and the cure cannot be completed within the first one hundred twenty
(120) 








	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-27-

	
 















	
 

	
 

	
 


	
 

	
 

	
day cure
period. During the cure period, the Borrower has the obligation to provide on
demand satisfactory documentation of its effort to cure, and, upon
completion, evidence that the cure has been achieved. All notice and cure
periods provided in this Deed of Trust shall run concurrently with any notice
or cure periods provided by law and in any of the other Loan Documents. 








	
 

	
 

	
 


	
11.

	
RIGHT TO CURE 


	
 

	
 


	
 

	
The Lender
shall have the right to cure any Default. The expenses of doing so shall be
part of the Indebtedness, and the Borrower shall pay them to the Lender on
demand. 


	
 

	
 


	
12.

	
CONTEST RIGHTS 


	
 

	
 


	
 

	
The Borrower
may secure the right to contest Impositions and construction, mechanics’ or
materialmen’s liens, through appropriate proceedings conducted in good faith,
by either (A) depositing with the Lender an amount equal to one hundred
twenty five percent (125%) of the amount of the Imposition or the lien, or
(B) obtaining and maintaining in effect a bond issued by a surety acceptable
to the Lender, in an amount equal to the greater of (i) the amount of a
required deposit under clause (A) above and (ii) the amount required by the
surety or by the court in order to obtain a court order staying the
foreclosure of the lien pending resolution of the dispute, and releasing the
lien of record. The proceeds of such a bond must be payable directly to the
Lender. The surety issuing such a bond must be acceptable to the Lender in
its sole discretion. After such a deposit is made or bond issued, the
Borrower shall promptly commence the contest of the lien and continuously
pursue that contest in good faith and with reasonable diligence. If the
contest of the related Imposition or lien is unsuccessful, any deposits or
bond proceeds shall be used to pay the Imposition or to satisfy the
obligation from which the lien has arisen. Any surplus shall be refunded to
the Borrower. 


	
 

	
 


	
13.

	
DUE ON TRANSFER OR ENCUMBRANCE 


	
 

	
 


	
 

	
Upon the
sale or transfer of any portion of the Real Property or any other conveyance,
transfer or vesting of any direct or indirect interest in the Borrower or the
Property, including (i) the direct or indirect transfer of, or the granting
of a security interest in, the ownership of the Borrower or the voting rights
in the Borrower, (ii) any encumbrance (other than a Permitted Encumbrance) of
the Real Property (unless the Borrower contests the encumbrance in compliance
with Section 12) and (iii) the lease, license or granting of any security
interest in the Personal Property, the Indebtedness shall, at the Lender’s
option, become immediately due and payable upon Notice to the Borrower,
unless the sale, conveyance, transfer or vesting is a Permitted Transfer or
is permitted by Section 8.7. Notwithstanding the foregoing, the issuance or
transfer of equity securities of AmREIT, Inc., or the issuance or transfer of
securities that are convertible into equity securities of AmREIT, Inc., that
in either case may be lawfully traded in public securities markets shall be
deemed not to be a transfer of an indirect interest in the Borrower. 


	
 

	
 


	
14.

	
DUE ON SALE EXCEPTIONS 


	
 

	
 


	
 

	
The
following transfers and encumbrances shall constitute Permitted Transfers: 








	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-28-

	
 















	
 

	
 

	
 

	
 


	
 

	
14.1

	
Permitted Transfer to an Approved Purchaser 


	
 


	
 

	
 

	
The Borrower
shall have the right, on one occasion during the term of the Loan, to sell or
transfer the Property in a transaction approved by the Lender. The Lender
agrees that such a transfer shall be a Permitted Transfer if the following
conditions are satisfied: 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (a)

	
No Default 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
No Default
shall exist, and no act, omission or circumstance shall exist which, if
uncured following Notice and the passage of time, would become a Default. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (b)

	
Request and Supporting Materials 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Lender
shall receive a written request for its approval at least ninety (90) days
before the proposed transfer. The request shall specify the identity of the
proposed transferee and the purchase price and other terms of the
transaction, shall include a copy of the proposed contract of sale, and shall
be accompanied by the financial statements, tax returns, and organizational
documents of the proposed transferee and its principals. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (c)

	
Criteria to be Considered 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The
ownership structure, financial strength, credit history and demonstrated
property management expertise of the proposed transferee and its principals
shall be satisfactory to the Lender in its sole discretion. The Lender
expressly reserves the right to withhold its approval of the proposed
transfer if the proposed transferee or any of its principals is or has been
the subject of any bankruptcy, insolvency, or similar proceeding. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (d)

	
Assumption Agreement 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Under the
terms of the proposed transfer, the proposed transferee shall assume the
Loan, without modification, under the terms of an assumption agreement and
additional documentation satisfactory to the Lender in form and substance.
Under the assumption agreement, the transferee shall provide a representation
as to the purchase price paid for the Real Property. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (e)

	
Liability for Carveout Obligations 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Under the
terms of the assumption agreement and additional documentation, liability for
Carveout Obligations arising both before and after the date of the transfer
and assumption shall be retained or assumed by the parties satisfactory to
the Lender. Notwithstanding the foregoing, Borrower and Carveout Obligor
shall be released from liability for Carveout Obligations arising on or after
the date of the transfer and assumption; provided that in any action to
enforce the liability of Borrower and/or Carveout Obligor for Carveout
Obligations, Borrower and/or Carveout Obligor shall have the burden of
proving when the Carveout Obligations in question arose. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (f)

	
Title Insurance Endorsement 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
shall agree to provide an endorsement to the Lender’s mortgagee title
insurance policy, insuring the continued validity and priority of this Deed
of Trust following the assumption.








	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-29-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
 (g)

	
Assumption Fee 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Lender
shall receive an assumption fee of one percent (1%) of the outstanding
balance of the Loan , and the Borrower shall agree to reimburse the Lender’s
out-of-pocket expenses incurred in connection with the proposed transfer,
including title updates and endorsement charges, recording fees, any
applicable taxes and attorneys’ fees, regardless of whether the transfer is
consummated. 


	
 

	
 

	
 

	
 


	
 

	
14.2

	
Permitted Transfers of Certain Passive Interests 


	
 

	
 

	
 

	
 


	
 

	
 

	
Any transfer
of direct or indirect interests in the Borrower that meets the requirements
of this Sub-section (a “Qualified Passive Interest Transfer”) shall be a
Permitted Transfer, and no transfer fee, assumption fee, processing fee or
document review fee shall be charged in connection with the transfer. The
requirements are the following: 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (a)

	
Notice 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
shall deliver advance notice of the proposed transfer, together with evidence
reasonably satisfactory to the Lender that the proposed transfer would meet
the requirements of this Section. Such evidence shall include a narrative
description and detailed pre- and post-transfer organizational charts of the
Borrower. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (b)

	
Absence of Default 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
No Default
shall exist at the time of the transfer. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (c)

	
Absence of Violation 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The proposed
transfer shall not result in any violation of the covenants of the Loan
Documents relating to the management of the Real Property and Legal Control
of the Borrower. 


	
 

	
 

	
 

	
 


	
 

	
 

	
 (d)

	
Legal Control 


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Carveout
Obligor shall exercise Legal Control of the Borrower after the transfer. 


	
 

	
 

	
 

	
 


	
 

	
14.3

	
Transaction Costs


	
 

	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall pay all out-of-pocket expenses incurred by the Lender in the review and
processing of a proposed or completed Permitted Transfer regardless of
whether the Permitted Transfer is carried out. 


	
 

	
 

	
 

	
 


	
15.

	
NOTICE OF ASSIGNMENT OF LEASES AND RENTS 


	
 

	
 

	
 

	
 


	
 

	
Under the
Assignment of Leases and Rents, the Borrower has assigned to the Lender, and
to its successors and assigns, all of the Borrower’s right and title to, and
interest in, the Leases, including all rights under the Leases and all
benefits to be derived from them. The rights assigned include all authority
of the Borrower to modify or terminate Leases, or to exercise any remedies,
and the benefits assigned include all Rents. This assignment is present, but
under the terms of the Assignment of Leases and Rents, the Lender has granted
the Borrower a conditional license to collect and use the Rents, and to
exercise the rights assigned, in a manner consistent with the Obligations,
all as more particularly set forth in the Assignment of Leases and Rents. The
Lender may, however, terminate the 








	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-30-

	
 















	
 

	
 

	
 


	
 

	
license by
written Notice to the Borrower or a tenant under a Lease on certain
conditions set forth in the Assignment of Leases and Rents. 


	
 

	
 

	
 


	
16.

	
ACCELERATION 


	
 

	
 

	
 


	
 

	
If a Default
exists, the Lender may, at its option, declare the unpaid principal balance
of the Note to be immediately due and payable, together with all accrued
interest on the Indebtedness, all costs of collection (including reasonable
attorneys’ fees and expenses) and all other charges due and payable by the
Borrower under the Note or any other Loan Document. If the subject Default
has arisen from a failure by the Borrower to make a regular monthly payment
of principal and interest, the Lender shall not accelerate the Indebtedness
unless the Lender shall have given the Borrower a cure period of at least
three (3) Business Days following Notice of its intent to do so. 


	
 

	
 


	
 

	
If the
subject Default is curable and non-monetary in nature, the Lender shall
exercise its option to accelerate only by giving Notice of acceleration to
the Borrower. The Lender shall not give any such Notice of acceleration until
(a) the Borrower has been given any required Notice of the prospective
Default and (b) any applicable cure period has expired.

Except as expressly
described in this Section, no notice of acceleration shall be required in
order for the Lender to exercise its option to accelerate the Indebtedness in
the event of Default.


	
 

	
 

	
 


	
17.

	
RIGHTS OF ENTRY AND TO OPERATE 


	
 

	
 

	
 


	
 

	
17.1

	
Entry on Real Property 


	
 

	
 

	
 


	
 

	
 

	
If a Default
exists, the Lender may, to the extent permitted by law, enter upon the Real
Property and take exclusive possession of the Real Property and of all books,
records and accounts, all without Notice and without being guilty of
trespass, but subject to the rights of tenants in possession under the
Leases. If the Borrower remains in possession of all or any part of the
Property after Default and without the Lender’s prior written consent, the
Lender may, without Notice to the Borrower, invoke any and all legal remedies
to dispossess the Borrower, including specifically one or more actions for
forcible entry and detainer, trespass to try title and writ of restitution. 


	
 

	
 

	
 


	
 

	
17.2

	
Operation of Real Property 


	
 

	
 

	
 


	
 

	
 

	
Following
Default, the Lender may, subject to applicable law, hold, lease, manage,
operate or otherwise use or permit the use of the Real Property, either
itself or by other persons, firms or entities, in such manner, for such time
and upon such other terms as the Lender may deem to be prudent under the
circumstances (making such repairs, alterations, additions and improvements
thereto and taking any and all other action with reference thereto, from time
to time, as the Lender deems prudent), and apply all Rents and other amounts
collected by the Lender in accordance with the provisions of the Assignment
of Leases and Rents. 








	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-31-

	
 















	
 

	
 

	
 


	
18.

	
RECEIVERSHIP 


	
 

	
 

	
 


	
 

	
Following
Default, the Lender may apply to a court of competent jurisdiction for the
appointment of a receiver of the Property, ex parte without Notice to the
Borrower, whether or not the value of the Property exceeds the Indebtedness,
whether or not waste or deterioration of the Real Property has occurred, and
whether or not other arguments based on equity would justify the appointment.
The Borrower irrevocably, with knowledge and for valuable consideration,
consents to such an appointment. Any such receiver shall have all the rights
and powers customarily given to receivers in Texas, including the rights and
powers granted to the Lender by this Deed of Trust, the power to maintain,
lease, operate, market and sell the Real Property on terms approved by the
court, and the power to collect the Rents and apply them to the Indebtedness
or otherwise as the court may direct. Once appointed, a receiver may at the
Lender’s option remain in place until the Indebtedness has been paid in full.



	
 

	
 

	
 


	
19.

	
FORECLOSURE; POWER OF SALE 


	
 

	
 

	
 


	
 

	
19.1

	
Availability of Remedies 


	
 

	
 

	
 


	
 

	
 

	
Upon
Default, the Lender may immediately proceed to foreclose the lien of this
Deed of Trust, against all or part of the Property, or to sell the Property,
by judicial or nonjudicial foreclosure in accordance with the laws of Texas
and may pursue any other remedy available to commercial mortgage lenders
under the laws of Texas. 


	
 

	
 

	
 


	
 

	
19.2

	
Public Sale 


	
 

	
 

	
 


	
 

	
 

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


	
 

	
 

	
 


	
 

	
19.3

	
Right to Require Proof of Financial Ability and/or Cash Bid 


	
 

	
 

	
 


	
 

	
 

	
At any time
during the bidding, the Trustee may require a bidding party (A) to disclose
its full name, state and city of residence, occupation, and specific business
office location, and the name and address of the principal the bidding party
is representing (if applicable), and (B) to demonstrate reasonable evidence
of the bidding party’s financial ability (or, if applicable, the financial
ability of the principal of such bidding party), as a condition to the
bidding party submitting bids at the foreclosure sale. If any such bidding
party (the “Questioned Bidder”) declines to comply with the Trustee’s
requirement in this regard, or if such Questioned Bidder does respond but the
Trustee, in Trustee’s sole and absolute discretion, deems the information or
the evidence of the financial ability of the Questioned Bidder (or, if applicable,
the principal of such 








	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-32-

	
 















	
 

	
 

	
 


	
 

	
 

	
bidding
party) to be inadequate, then the Trustee may continue the bidding with
reservation; and in such event (1) the Trustee shall be authorized to caution
the Questioned Bidder concerning the legal obligations to be incurred in
submitting bids, and (2) if the Questioned Bidder is not the highest bidder
at the sale, or if having been the highest bidder the Questioned Bidder fails
to deliver the cash purchase price payment promptly to the Trustee, all bids
by the Questioned Bidder shall be null and void. The Trustee may, in
Trustee’s sole and absolute discretion, determine that a credit bid may be in
the best interest of the Borrower and Lender, and elect to sell the Property
for credit or for a combination of cash and credit; provided, however, that
the Trustee shall have no obligation to accept any bid except an all cash
bid. In the event the Trustee requires a cash bid and cash is not delivered
within a reasonable time after conclusion of the bidding process, as
specified by the Trustee, but in no event later than 3:45 p.m. local time on
the day of sale, then said contingent sale shall be null and void, the
bidding process may be recommenced, and any subsequent bids or sale shall be
made as if no prior bids were made or accepted.


	
 

	
 

	
 


	
 

	
19.4

	
Sale Subject to Unmatured Indebtedness 


	
 

	
 

	
 


	
 

	
 

	
In addition
to the rights and powers of sale granted under the preceding provisions of
this subsection, if default is made in the payment of any installment of the
Indebtedness, Lender may, at Lender’s option, at once or at any time
thereafter while any matured installment remains unpaid, without declaring
the entire Indebtedness to be due and payable, orally or in writing direct
Trustee to enforce this trust and to sell the Property subject to such
unmatured Indebtedness and to the rights, powers, liens, security interests,
and assignments securing or providing recourse for payment of such unmatured
Indebtedness, in the same manner, all as provided in the preceding provisions
of this subsection. Sales made without maturing the Indebtedness may be made
hereunder whenever there is a default in the payment of any installment of
the Indebtedness, without exhausting the power of sale granted hereby, and
without affecting in any way the power of sale granted under this subsection,
the unmatured balance of the Indebtedness or the rights, powers, liens,
security interests, and assignments securing or providing recourse for
payment of the Indebtedness. 


	
 

	
 

	
 


	
 

	
19.5

	
Partial Foreclosure 


	
 

	
 

	
 


	
 

	
 

	
Sale of a
part of the Property shall not exhaust the power of sale, but sales may be
made from time to time until the Indebtedness is paid and the Obligations are
performed and discharged in full. It is intended by each of the foregoing
provisions of this subsection that Trustee may, after any request or
direction by Lender, sell not only the Land and the Improvements, but also
the Fixtures and Personal Property and other interests constituting a part of
the Property or any part thereof, along with the Land and the Improvements or
any part thereof, as a unit and as a part of a single sale, or may sell at
any time or from time to time any part or parts of the Property separately
from the remainder of the Property. It shall not be necessary to have present
or to exhibit at any sale any of the Property. 


	
 

	
 

	
 


	
 

	
19.6

	
Trustee’s Deeds 


	
 

	
 

	
 


	
 

	
 

	
After any
sale under this subsection, Trustee shall make good and sufficient deeds,
assignments, and other conveyances to the purchaser or purchasers thereunder
in the name of Borrower, conveying the Property or any part thereof 








	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-33-

	
 















	
 

	
 

	
 


	
 

	
 

	
so sold to
the purchaser or purchasers with general warranty of title by Borrower. It is
agreed that in any deeds, assignments or other conveyances given by Trustee,
any and all statements of fact or other recitals therein made as to the
identity of Lender, the occurrence or existence of any Default, the notice of
intention to accelerate, or acceleration of, the maturity of the
Indebtedness, the request to sell, notice of sale, time, place, terms and
manner of sale, and receipt, distribution, and application of the money
realized therefrom, the due and proper appointment of a substitute trustee,
and without being limited by the foregoing, any other act or thing having
been duly done by or on behalf of Lender or by or on behalf of Trustee, shall
be taken by all courts of law and equity as prima facie evidence that such
statements or recitals state true, correct, and complete facts and are
without further question to be so accepted, and Borrower does hereby ratify
and confirm any and all acts that Trustee may lawfully do in the premises by
virtue hereof. 


	
 

	
 

	
 


	
 

	
19.7

	
Waiver of Deficiency Statute



	
 

	
 

	
 


	
 

	
 

	
In the event
of an interest in any of the Property is foreclosed upon pursuant to a
judicial or nonjudicial foreclosure sale, Borrower agrees as follows. Notwithstanding
the provisions of Sections 51.003, 51.004, and 51.005 of the Texas Property
Code (as the same may be amended from time to time), and to the extent
permitted by law, Borrower agrees that Lender shall be entitled to seek a
deficiency judgment from Borrower and any other party obligated on the
indebtedness secured hereby equal to the difference between the amount owing
on the indebtedness secured hereby and the amount for which the Property was
sold pursuant to judicial or nonjudicial foreclosure sale, but not for an
amount in excess of the Carveout Obligations. Borrower expressly recognizes
that this section constitutes a waiver of the above-cited provisions of the
Texas Property Code which would otherwise permit Borrower and other persons
against whom recovery of deficiencies is sought or Obligor independently
(even absent the initiation of deficiency proceedings against them) to
present competent evidence of the fair market value of the Property as of the
date of the foreclosure sale and offset against any deficiency the amount by
which the foreclosure sale price is determined to be less than such fair
market value. Borrower further recognizes and agrees that this waiver creates
an irrebuttable presumption that the foreclosure sale price is equal to the
fair market value of the Property for purposes of calculating deficiencies
owed by Borrower, Obligor and others against whom recovery of a deficiency is
sought. Alternatively, in the event the waiver provided for above is
determined by a court of competent jurisdiction to be unenforceable, the
following shall be the basis for the finder of fact’s determination of the
fair market value of the Property as of the date of the foreclosure sale in
proceedings governed by Sections 51.003, 51.004 and 51.005 of the Texas
Property Code (as amended from time to time): (i) the Property shall be
valued in an “as is” condition as of the date of the foreclosure sale,
without any assumption or expectation that the Property will be repaired or
improved in any manner before a resale of the Property after foreclosure;
(ii) the valuation shall be based upon an assumption that the foreclosure
purchaser desires a resale of the Property for cash promptly (but no later
than twelve (12) months following the foreclosure sale; (iii) all reasonable
closing costs customarily borne by the seller in commercial real estate
transactions should be deducted from the gross fair market value of the
Property, including, without limitation, brokerage commissions, title
insurance, a survey of the Property, tax prorations, attorneys’ 








	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155 

	
-34-

	
 
















	
 

	
 

	
 


	
 

	
 

	
fees, and
marketing costs; (iv) the gross fair market value of the Property shall be
further discounted to account for any estimated holding costs associated with
maintaining the Property pending sale, including, without limitation,
utilities expenses, property management fees, taxes and assessments (to the
extent not accounted for in (iii) above), and other maintenance, operational
and ownership expenses; and (v) any expert opinion testimony given or
considered in connection with a determination of the fair market value of the
Property must be given by persons having at least five (5) years experience
in appraising property similar to the Property and who have conducted and
prepared a complete written appraisal of the Property taking into consideration
the factors set forth above.


	
 

	
 

	
 


	
20.

	
WAIVERS


	
 

	
 


	
 

	
To the
maximum extent permitted by law, the Borrower irrevocably and unconditionally
WAIVES and RELEASES any present or future rights (a) of reinstatement or
redemption (b) that may exempt the Property from any civil process, (c) to
appraisal or valuation of the Property, (d) to extension of time for payment,
(e) that may subject the Lender’s exercise of its remedies to the
administration of any decedent’s estate or to any partition or liquidation
action, (f) to any homestead and exemption rights provided by the
Constitution and laws of the United States and of Texas, (g) to notice of
acceleration or notice of intent to accelerate (other than as expressly
stated herein), and (h) that in any way would delay or defeat the right of
the Lender to cause the sale of the Real Property for the purpose of
satisfying the Indebtedness. The Borrower agrees that the price paid at a
lawful foreclosure sale, whether by the Lender or by a third party, and
whether paid through cancellation of all or a portion of the Indebtedness or
in cash, shall conclusively establish the value of the Real Property.


	
 

	
 


	
 

	
BORROWER
expressly WAIVES and RELINQUISHES any right or remedy which it may have or be
able to assert by reason of the provisions of Chapter 34 of the Business and
Commerce Code of the State of Texas pertaining to the rights and remedies of
sureties. To the maximum extent permitted by applicable law, BORROWER hereby
WAIVES and RELEASES all rights, remedies, claims and defenses based upon or
related to Sections 51.003, 51.004 and 51.005 of the Property Code of the
State of Texas to the extent the same pertain or may pertain to any
enforcement of this Deed of Trust.


	
 

	
 


	
 

	
The
foregoing waivers shall apply to and bind any party assuming the Obligations
of the Borrower under this Deed of Trust.


	
 

	
 


	
21.

	
EXCULPATION CLAUSE AND CARVEOUT OBLIGATIONS


	
 

	
 


	
 

	
The Lender
agrees that it shall not seek to enforce any monetary judgment with respect
to any Obligation against the Borrower except through recourse to the
Property, unless the Obligation from which the judgment arises is a Carveout
Obligation. The Carveout Obligations include (a) the obligation to repay any
portion of the Indebtedness that arises because the Lender has advanced funds
or incurred expenses in respect of any of the “Carveouts” (as defined below),
(b) the obligation to repay the entire Indebtedness, if the Lender’s
exculpation of the Borrower from personal liability under this Section has
become void as set forth below, (c) the obligation to indemnify the Lender in
respect of its actual damages suffered in connection with a Carveout, and (d)
the obligation to defend and hold the Lender harmless from and against any
claims, judgments, causes of action or proceedings arising from a Carveout.
The Carveouts are:








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-35-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
(a)

	
Fraud or
material written misrepresentation.


	
 

	
 

	
 

	
 


	
 

	
 

	
(b)

	
Waste of
the Property (which shall include damage, destruction or disrepair of the
Real Property caused by a willful act or grossly negligent omission of the
Borrower, but shall exclude ordinary wear and tear in the absence of gross
negligence).


	
 

	
 

	
 

	
 


	
 

	
 

	
(c)

	
Misappropriation
of tenant security deposits (including proceeds of tenant letters of credit),
Insurance Proceeds or Condemnation Proceeds.


	
 

	
 

	
 

	
 


	
 

	
 

	
(d)

	
Failure
to turn over to the Lender all tenant security deposits and tenant letters of
credit required to be held by the Borrower under the terms of the Leases on
or prior to the date on which the Lender receives title to the Real Property
following the foreclosure of its lien or by delivery of the deed in lieu of
foreclosure.


	
 

	
 

	
 

	
 


	
 

	
 

	
(e)

	
Failure
to pay property taxes, assessments or other lienable Impositions to the
taxing authority prior to their due date or to the Lender to the extent such
impositions have accrued on the date the Lender receives title to the Real
Property following the foreclosure of its lien or by delivery of the deed in
lieu of foreclosure.


	
 

	
 

	
 

	
 


	
 

	
 

	
(f)

	
Failure
to maintain insurance coverage in accordance with the Loan Documents,
provided that any coverage furnished by a Key Tenant (or any other Person)
will not impair, alter or diminish the insurance requirements under the Loan
Documents and will not modify this subpart (f), or failure to pay insurance
proceeds to the Lender in accordance with the Loan Documents, even if a Key
Lease provides otherwise.


	
 

	
 

	
 

	
 


	
 

	
 

	
(g)

	
The cost
to the Lender of the forced placement of insurance, as permitted under the
Loan Documents.


	
 

	
 

	
 

	
 


	
 

	
 

	
(h)

	
Failure
to pay to the Lender all Termination Payments that are required to be paid to
Lender pursuant to the Loan Documents.


	
 

	
 

	
 

	
 


	
 

	
 

	
(i)

	
Failure
to pay to the Lender all Rents, income and profits, net of reasonable and
customary operating expenses, received in respect of a period when the Loan
is in Default.


	
 

	
 

	
 

	
 


	
 

	
 

	
(j)

	
The
reasonable out-of-pocket expenses of enforcing the Loan Documents following
Default, not including expenses incurred after the Lender has received a
Qualified Offer.


	
 

	
 

	
 

	
 


	
 

	
 

	
(k)

	
Executing,
terminating or amending a Lease in violation of the Loan Documents.


	
 

	
 

	
 

	
 


	
 

	
 

	
(l)

	
Any
liability of the Borrower under the Environmental Indemnity Agreement.


	
 

	
 

	
 

	
 


	
 

	
 

	
(m)

	
Loss or
damage suffered by the Lender as a result of: (i) Lender’s inability to
perform an obligation under a Lease without breaching the Lease, or its
inability to exercise a right under a Lease, in either case to the extent
resulting from any reference made by the Lease to the “Shopping Center” to
the extent “Shopping Center” includes the Leasehold Shopping Center Parcel;
(ii) the exercise by a tenant of a right under a Lease that the tenant would
have been unable to exercise but for any reference made by the Lease to the
“Shopping Center” to the extent








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-36-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
“Shopping
Center” includes the Leasehold Shopping Center Parcel, or (iii) the
performance by Lender of an obligation under a Lease that the Lender would
not have been required to perform, but for any reference made by the Lease to
the “Shopping Center” to the extent “Shopping Center” includes the Leasehold
Shopping Center Parcel.




The
Lender’s exculpation of the Borrower from personal liability for the repayment
of the Indebtedness evidenced by this Note shall be void without Notice if the
Borrower (A) voluntarily grants a lien on the Property in violation of the Deed
of Trust, or (B) files a voluntary petition for reorganization under Title 11
of the United States Code (or under any other present or future law, domestic
or foreign, relating to bankruptcy, insolvency, reorganization proceedings or
otherwise similarly affecting the rights of creditors), and has not made a
Qualified Offer prior to the filing. After the Lender accepts a Qualified
Offer, default by the Borrower in fulfilling the terms of the accepted offer
shall trigger personal liability for the entire Indebtedness. 


	
 

	
 

	
 


	
22.

	
SECURITY AGREEMENT AND FIXTURE FILING


	
 

	
 


	
 

	
22.1

	
Definitions


	
 

	
 

	
 


	
 

	
 

	
“Accounts”
shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“Bank”
shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“Chattel
Paper” shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“Deposit
Account” shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“Document”
shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“Equipment”
shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“Financing
Statements” shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“General
Intangibles” shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“Goods”
shall have the definition assigned in the UCC. “Goods” include all detached
Fixtures, items of Personal Property that may become Fixtures, property
management files, accounting books and records, reports of consultants
relating to the Real Property, site plans, test borings, environmental or
geotechnical surveys, samples and test results, blueprints, construction and
shop drawings, and plans and specifications.


	
 

	
 

	
 


	
 

	
 

	
“Instrument”
shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“Investment
Property” shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“Letter
of Credit” shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“Letter
of Credit Rights” shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“Money
Collateral” means all money received in respect of Rents.


	
 

	
 

	
 


	
 

	
 

	
“Personal
Property” means Accounts, Chattel Paper, Deposit Accounts, Documents,
Equipment, General Intangible Collateral, Goods, Instruments, Investment
Property, Letter of Credit Rights, Letters of Credit, and Money Collateral,
all as now owned or hereafter acquired by the Borrower.


	
 

	
 

	
 


	
 

	
 

	
“Proceeds”
shall have the definition assigned in the UCC.


	
 

	
 

	
 


	
 

	
 

	
“UCC”
means the Uniform Commercial Code as adopted in Texas.








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-37-

	
 















	
 

	
 

	
 

	
 


	
 

	
22.2

	
Creation of Security
Interest


	
 

	
 

	
 

	
 


	
 

	
 

	
This Deed of
Trust shall be self-operative and shall constitute a security agreement
pursuant to the provisions of the UCC with respect to the Personal Property.
The Borrower, as debtor, hereby grants the Lender, as secured party, for the
purpose of securing the Indebtedness, a security interest in the Borrower’s
interest in all Accounts, Chattel Paper, Deposit Accounts, Documents,
Equipment Collateral, General Intangibles, Goods, Instruments, Investment
Property, Letter of Credit Rights, Letter of Credit, and money, in the
accessions, additions, replacements, substitutions and Proceeds of any of the
foregoing items of collateral arising from or relating to the Real Property.
Upon Default, the Lender shall have the rights and remedies of a secured
party under the UCC as well as all other rights and remedies available at law
or in equity, and, at the Lender’s option, the Lender may also invoke the
remedies provided elsewhere in this Deed of Trust as to such Property. The
Borrower and the Lender agree that the rights granted to the Lender as
secured party under this Section 22 are in addition to rather than a
limitation on any of the Lender’s other rights under this Deed of Trust with
respect to the Property.


	
 

	
 

	
 


	
 

	
22.3

	
Filing Authorization


	
 

	
 

	
 

	
 


	
 

	
 

	
The Borrower
irrevocably authorizes the Lender to file, in the appropriate locations for
filings of UCC financing statements in any jurisdictions as the Lender in
good faith deems appropriate, such financing statements and amendments as the
Lender may require in order to perfect or continue this security interest, or
in order to prevent any filed financing statement from becoming misleading or
from losing its perfected status.


	
 

	
 

	
 


	
 

	
22.4

	
Additional Searches and
Documentation


	
 

	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall provide to the Lender upon request, certified copies of any searches of
UCC records deemed necessary or appropriate by the Lender to confirm the
first-priority status of its security interest in the Personal Property,
together with copies of all documents or records evidencing security
interests disclosed by such searches, provided, however, that prior to the
occurrence of a Default, Lender shall not make such request more than one (1)
time per year.


	
 

	
 

	
 


	
 

	
22.5

	
Costs


	
 

	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall pay all filing fees and costs and all reasonable costs and expenses of
any record searches (or their continuations) as the Lender may reasonably
require.


	
 

	
 

	
 


	
 

	
22.6

	
Representations,
Warranties and Covenants of the Borrower


	
 

	
 

	
 

	
 


	
 

	
 

	
 (a)

	
Ownership of the Personal Property


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
All of the
Personal Property is, and shall during the term of the Loan continue to be,
owned by the Borrower, and is not the subject matter of any lease, control
agreement or other instrument, agreement or transaction whereby any
ownership, security or beneficial interest in the Personal Property is held
by any person or entity other than the Borrower, subject only to (1) the
Lender’s security interest, (2) the rights of tenants occupying the Property
pursuant to Leases approved by the Lender, and (3) the Permitted
Encumbrances.








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-38-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
 (b)

	
No Other Identity


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
represents and warrants that the Borrower has not used or operated under any
other name or identity for at least five (5) years. The Borrower covenants
and agrees that Borrower will furnish Lender with notice of any change in its
name, form of organization, or state of organization within thirty (30) days
prior to the effective date of any such change.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (c)

	
Location of Equipment


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
All
Equipment is located upon the Land.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (d)

	
Removal of Goods


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
will not remove or permit to be removed any item included in the Goods from
the Land, unless the same is replaced immediately with unencumbered Goods (1)
of a quality and value equal or superior to that which it replaces and (2)
which is located on the Land. All such replacements, renewals, and additions
shall become and be immediately subject to the security interest of this Deed
of Trust.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (e)

	
Proceeds


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
may, without the Lender’s prior written consent, dispose of Goods in the
ordinary course of business, provided that, following the disposition, the
perfection of the Lender’s security interest in the Proceeds of the
disposition will continue under § 9-315 (d) of the UCC. The Borrower shall
not, without the Lender’s prior written consent, dispose of any Personal
Property in any other manner, except in compliance with Paragraph (d) of this
Subsection 22.6.


	
 

	
 

	
 


	
 

	
22.7

	
Fixture Filing


	
 

	
 

	
 


	
 

	
 

	
This Deed of
Trust constitutes a financing statement filed as a fixture filing in the
Official Records of the County Clerk of Dallas County, Texas, with respect to
any and all fixtures comprising Property. The “debtor” is AmREIT Preston
Royal, LP, a limited partnership organized under Texas law; the “secured
party” is Transamerica Financial Life Insurance Company, a New York
corporation; the collateral is as described in Subsection 22.2 above and the
granting clause of this Deed of Trust; and the addresses of the debtor and
secured party are the addresses stated in Subsection 27.12 of this Deed of
Trust for Notices to such parties. The organizational identification number
of the debtor is 801673731. The owner of record of the Real Property is
AmREIT Preston Royal, LP. This Deed of Trust shall also be effective as a
financing statement covering minerals or the like (including oil and gas) and
accounts subject to Subsection (e) of Section 9.103 of the Texas Business and
Commerce Code, as amended.


	
 

	
 

	
 


	
23.

	
ENVIRONMENTAL MATTERS 


	
 

	
 


	
 

	
23.1

	
Representations


	
 

	
 

	
 


	
 

	
 

	
The Borrower
represents as follows:


	
 

	
 

	
 


	
 

	
 

	
 (a)

	
No Hazardous Substances


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
To the best
of the Borrower’s knowledge as a duly diligent property owner, and except as
disclosed in the ESA, no release of any Hazardous








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-39-

	
 














	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
Substance
has occurred on or about the Real Property in a quantity or at a
concentration level that (i) violates any Environmental Law, or (ii) requires
reporting to any regulatory authority or may result in any obligation to
remediate under any Environmental Law.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (b)

	
Absence of Mold Contamination


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
To the best
of the Borrower’s knowledge, the amount of mold present in the air within the
Improvements and the extent of mold growth on the elements of the
Improvements are no greater than normal in buildings free of moisture
intrusion. No mold-related tenant complaint or legal proceeding relating to
the Improvements exists, except as otherwise disclosed to Lender in writing


	
 

	
 

	
 

	
 


	
 

	
 

	
 (c)

	
Compliance with Environmental Laws


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Real
Property and its current use and presently anticipated uses comply with all
Environmental Laws, including those requiring permits, licenses,
authorizations, and other consents and approvals.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (d)

	
No Actions or Proceedings


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
To the best
of Borrower’s knowledge as a duly diligent property owner, no Governmental
Authority or agency has commenced any action, proceeding or investigation
based on any suspected or actual violation of any Environmental Law on or
about the Real Property. To the best of the Borrower’s knowledge as a duly
diligent property owner, no such authority or agency has threatened to
commence any such action, proceeding, or investigation.


	
 

	
 

	
 

	
 


	
 

	
23.2

	
Environmental Covenants


	
 

	
 

	
 

	
 


	
 

	
 

	
The Borrower
covenants as follows:


	
 

	
 

	
 

	
 


	
 

	
 

	
 (a)

	
Compliance with Environmental Laws


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
shall, and the Borrower shall cause all employees, agents, contractors, and
tenants of the Borrower and any other persons present on or occupying the
Real Property to, keep and maintain the Real Property in compliance with all
Environmental Laws.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (b)

	
Notices, Actions and Claims


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Borrower
shall immediately advise the Lender in writing of (i) any notices from any
governmental or quasi-governmental agency or authority of violation or
potential violation of any Environmental Law received by the Borrower, (ii)
any and all enforcement, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened pursuant to any Environmental
Law, (iii) all claims made or threatened by any third party against the
Borrower or the Real Property relating to damage, contribution, cost
recovery, compensation, loss or injury resulting from any Hazardous
Substances, and (iv) discovery by the Borrower of any occurrence or condition
on any real property adjoining or in the vicinity of the Real Property that
creates a foreseeable risk of contamination of the Real Property by or with
Hazardous Substances.








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-40-

	
 















	
 

	
 

	
 


	
 

	
23.3

	
The Lender’s Right to
Control Claims


	
 


	
 

	
 

	
The Lender
shall have the right (but not the obligation) to join and participate in, as
a party if it so elects, any legal proceedings or actions initiated in
connection with any Hazardous Substances and to have its related and
reasonable attorneys’ and consultants’ fees paid by the Borrower upon demand.


	
 

	
 

	
 


	
 

	
23.4

	
Indemnification


	
 

	
 

	
 


	
 

	
 

	
THE BORROWER
SHALL BE SOLELY RESPONSIBLE FOR, AND SHALL INDEMNIFY, DEFEND, AND HOLD
HARMLESS THE LENDER, THE TRUSTEE, AND THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, FROM AND AGAINST, ANY CLAIM,
JUDGMENT, LOSS, DAMAGE, DEMAND, COST, EXPENSE OR LIABILITY OF WHATEVER KIND
OR NATURE, KNOWN OR UNKNOWN, CONTINGENT OR OTHERWISE, DIRECTLY OR INDIRECTLY
ARISING OUT OF OR ATTRIBUTABLE TO THE USE, GENERATION, STORAGE, RELEASE, THREATENED
RELEASE, DISCHARGE, DISPOSAL, OR PRESENCE (WHETHER PRIOR TO OR AFTER THE
EFFECTIVE DATE OF THIS DEED OF TRUST) OF HAZARDOUS SUBSTANCES ON, IN, UNDER
OR ABOUT THE REAL PROPERTY (WHETHER BY THE BORROWER, A PREDECESSOR IN TITLE,
ANY TENANT, OR ANY EMPLOYEES, AGENTS, CONTRACTOR OR SUBCONTRACTORS OF ANY OF
THE FOREGOING OR ANY THIRD PERSONS AT ANY TIME OCCUPYING OR PRESENT ON THE
REAL PROPERTY), INCLUDING: (I) PERSONAL INJURY; (II) DEATH; (III) DAMAGE TO
PROPERTY; (IV) ALL CONSEQUENTIAL DAMAGES; (V) THE COST OF ANY REQUIRED OR
NECESSARY REPAIR, CLEANUP OR DETOXIFICATION OF THE REAL PROPERTY, INCLUDING
THE SOIL AND GROUND WATER THEREOF, AND THE PREPARATION AND IMPLEMENTATION OF
ANY CLOSURE, REMEDIAL OR OTHER REQUIRED PLANS; (VI) DAMAGE TO ANY NATURAL
RESOURCES; AND (VII) ALL REASONABLE COSTS AND EXPENSES INCURRED BY THE LENDER
OR THE TRUSTEE IN CONNECTION WITH CLAUSES (I) THROUGH (VI), INCLUDING
REASONABLE ATTORNEYS’ AND CONSULTANTS’ FEES; PROVIDED, HOWEVER, THAT
NOTHING CONTAINED IN THIS SECTION SHALL BE DEEMED TO PRECLUDE THE BORROWER
FROM SEEKING INDEMNIFICATION FROM, OR OTHERWISE PROCEEDING AGAINST, ANY THIRD
PARTY INCLUDING ANY TENANT OR PREDECESSOR IN TITLE TO THE REAL PROPERTY, AND FURTHER
PROVIDED THAT THIS INDEMNIFICATION WILL NOT EXTEND TO (A) MATTERS CAUSED
BY THE LENDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, OR (B) MATTERS
ARISING FROM A RELEASE OF HAZARDOUS SUBSTANCES WHICH OCCURS AFTER THE LENDER
HAS TAKEN POSSESSION OF THE REAL PROPERTY, SO LONG AS THE BORROWER HAS NOT
CAUSED THE RELEASE THROUGH ANY ACT OR OMISSION.


	
 

	
 

	
 


	
 

	
 

	
THE
COVENANTS, AGREEMENTS, AND INDEMNITIES SET FORTH IN THIS SECTION SHALL BE
BINDING UPON THE BORROWER AND ITS HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS
AND ASSIGNS, AND SHALL SURVIVE REPAYMENT OF THE INDEBTEDNESS, FORECLOSURE OF
THE REAL PROPERTY, AND THE BORROWER’S








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-41-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
GRANTING OF
A DEED TO THE REAL PROPERTY IN LIEU OF FORECLOSURE. PAYMENT SHALL NOT BE A
CONDITION PRECEDENT TO THIS INDEMNITY. ANY COSTS OR EXPENSES INCURRED BY THE
LENDER OR THE TRUSTEE FOR WHICH THE BORROWER IS RESPONSIBLE OR FOR WHICH THE
BORROWER HAS INDEMNIFIED THE LENDER SHALL BE PAID TO THE LENDER ON DEMAND,
WITH INTEREST AT THE DEFAULT RATE FROM THE DATE INCURRED BY THE LENDER UNTIL
PAID IN FULL, AND SHALL BE SECURED BY THIS DEED OF TRUST. WITHOUT THE PRIOR
WRITTEN CONSENT OF THE LENDER, THE BORROWER SHALL NOT ENTER INTO ANY
SETTLEMENT AGREEMENT, CONSENT DECREE, OR OTHER COMPROMISE IN RESPECT TO ANY
CLAIMS RELATING TO HAZARDOUS SUBSTANCES.


	
 

	
 

	
 

	
 


	
 

	
23.5

	
Environmental Audits


	
 

	
 

	
 

	
 


	
 

	
 

	
If a Default
exists, or at any time the Lender has reason to believe that a release of
Hazardous Substances may have occurred or may be likely to occur, the Lender
may require that the Borrower retain, or the Lender may retain directly, at
the sole cost and expense of the Borrower, a licensed geologist, industrial
hygienist or an environmental consultant acceptable to the Lender to conduct
an environmental assessment or audit of the Real Property. In the event that
the Lender makes a reasonable determination of the need for an environmental
assessment or audit, the Lender shall inform the Borrower in writing that
such a determination has been made and, if requested to do so by the
Borrower, give the Borrower a written explanation of that determination
before the assessment or audit is conducted. The Borrower shall afford any
person conducting an environmental assessment or audit access to the Real
Property and all materials reasonably requested. The Borrower shall pay on
demand the cost and expenses of any environmental consultant engaged by the
Lender under this Subsection. The Borrower shall, at the Lender’s request and
at the Borrower’s sole cost and expense, take such investigative and remedial
measures, as the Lender determines to be necessary to address any condition
discovered by the assessment or audit so that (i) the Real Property shall be
in compliance with all Environmental Laws, (ii) the condition of the Real
Property shall not constitute any identifiable risk to human health or to the
environment, and (iii) the value of the Real Property shall not be affected
by the presence of Hazardous Substances.


	
 

	
 

	
 

	
 


	
24.

	
CONCERNING THE TRUSTEE


	
 

	
 

	
 

	
 


	
 

	
24.1

	
No Liability


	
 


	
 

	
 

	
The Trustee
will not be liable for any error of judgment or act, or be otherwise
responsible or accountable under any circumstances. If the Trustee or anyone
acting by virtue of the Trustee’s powers enters the Real Property, the
Trustee will not be personally liable for debts contracted or for liability
or damages incurred in the management or operation of the Real Property. The
Trustee will have the right to rely on any instrument, document or signature
authorizing or supporting any action taken or proposed to be taken by the
Trustee or believed by the Trustee in good faith to be genuine. The Trustee
will be entitled to reimbursement for expenses actually incurred by the
Trustee in the performance of the Trustee’s duties and to reasonable compensation
for services rendered. The 








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
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Borrower
shall, from time to time, pay compensation due the Trustee under this Deed of
Trust and reimburse the Trustee for and save and hold the Trustee harmless
from and against any and all loss, cost, liability, damage and expense
whatsoever incurred by the Trustee in the performance of the Trustee’s
duties.


	
 

	
 

	
 

	
 


	
 

	
24.2

	
Retention of Money


	
 

	
 

	
 

	
 


	
 

	
 

	
All money
received by the Trustee must, until used or applied, be held in trust for the
purposes for which it was received, but need not be segregated in any manner
from any other money (except to the extent required by law) and the Trustee
will have no liability for interest on any money received.


	
 

	
 

	
 

	
 


	
 

	
24.3

	
Successor Trustees


	
 

	
 

	
 

	
 


	
 

	
 

	
The Trustee
may resign by giving notice of such resignation in writing to the Lender. If
the Trustee dies, resigns or becomes disqualified from acting in the execution
of this Trust or fails or refuses to exercise the same when requested by the
Lender so to do or if for any reason and without cause the Lender prefers to
appoint a substitute trustee to act instead of the original Trustee, or any
prior successor or substitute trustee, the Lender will have full power to
appoint a substitute trustee and, if preferred, several substitute trustees
in succession who shall succeed to all the estates, rights, powers and duties
of the Trustee.


	
 

	
 

	
 

	
 


	
 

	
24.4

	
Succession Instruments


	
 

	
 

	
 

	
 


	
 

	
 

	
Any new
Trustee appointed will, without any further act, deed or conveyance, become
vested with all the estates, properties, rights, powers and trusts of the
Trustee’s predecessor. Upon the written request of the Lender or of any
successor trustee, the former Trustee shall execute and deliver an instrument
transferring to such successor Trustee all the estates, properties, rights,
powers and trusts of the former Trustee, and shall duly assign, transfer and
deliver any of the property and money held by the former Trustee to the
successor Trustee so appointed in the former Trustee’s place.


	
 

	
 

	
 

	
 


	
 

	
24.5

	
Performance of Duties by
Agents


	
 

	
 

	
 

	
 


	
 

	
 

	
The Trustee
may authorize one or more parties to act on the Trustee’s behalf to perform
the Trustee’s ministerial functions, including, without limitation, the
transmittal and posting of any notices.


	
 

	
 

	
 

	
 


	
25.

	
AGREEMENT CONCERNING INTEREST


	
 

	
 

	
 

	
 


	
 

	
25.1

	
Savings Clause


	
 

	
 

	
 

	
 


	
 

	
 

	
It is
expressly stipulated and agreed to be the intent of Borrower and Lender at
all times to comply strictly with the applicable Texas law governing the
maximum rate or amount of interest payable on the Note or the Indebtedness
(or applicable United States federal law to the extent that it permits Lender
to contract for, charge, take, reserve or receive a greater amount of
interest than under Texas law). If the applicable law is ever judicially
interpreted so as to render usurious any amount (i) contracted for, taken,
reserved or received pursuant to the Note, any of the other Loan Documents or
any communication or writing by or between Borrower and Lender related to the
transaction or transactions that are the subject matter of the Loan
Documents, (ii) contracted for, charged, taken, reserved or received by
reason of the Lender’s exercise of the option to 








	
 

	
 

	
 


	
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Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-43-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
accelerate
the maturity of the Note and/or the Indebtedness, or (iii) Borrower will have
paid or Lender will have received by reason of any prepayment by Borrower of
the Note and/or the Indebtedness, then it is Borrower’s and Lender’s express
intent that all amounts charged in excess of the Maximum Lawful Rate shall be
automatically cancelled, ab initio,
and all amounts in excess of the Maximum Lawful Rate theretofore collected by
Lender shall be credited on the principal balance of the Note and/or the
Indebtedness (or, if the Note and all Indebtedness have been or would thereby
be paid in full, refunded to Borrower), and the provisions of the Note and
the other Loan Documents shall immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the applicable
law, but so as to permit the recovery of the fullest amount otherwise called
for hereunder and thereunder; provided, however, if the Note has been paid in
full before the end of the stated term of the Note, then Borrower and Lender
agree that Lender shall, with reasonable promptness after Lender discovers or
is advised by Borrower that interest was received in an amount in excess of
the Maximum Lawful Rate, either refund such excess interest to Borrower
and/or credit such excess interest against the Note and/or any Indebtedness
then owing by Borrower to Lender. Borrower hereby agrees that as a condition
precedent to any claim or counterclaim (in which event such proceeding shall
be abated for such time period) seeking usury penalties against Lender, Borrower
will provide written Notice to Lender, advising Lender in reasonable detail
of the nature and amount of the violation, and the Lender shall have sixty
(60) days after receipt of the Notice to correct such usury violation, if
any, by either refunding such excess interest to Borrower or crediting such
excess interest against the Note and/or the Indebtedness then owing by
Borrower to Lender. All sums contracted for, charged, taken, reserved or
received by Lender for the use, forbearance or detention of any debt
evidenced by the Note and/or the Indebtedness shall, to the extent permitted
by applicable law, be amortized or spread, using the actuarial method,
throughout the stated term of the Note and/or the Indebtedness (including any
and all renewal and extension periods) until payment in full so that the rate
or amount of interest on account of the Note and/or the Indebtedness does not
exceed the Maximum Lawful Rate from time to time in effect and applicable to
the Note and/or the Indebtedness for so long as debt is outstanding. In no
event shall the provisions of Chapter 346 of the Texas Finance Code (which
regulates certain revolving credit loan accounts and revolving triparty
accounts) apply to the Note and/or any of the Indebtedness. Notwithstanding anything
to the contrary contained herein or in any of the other Loan Documents, it is
not the intention of Lender to accelerate the maturity of any interest that
has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.


	
 

	
 

	
 

	
 


	
 

	
25.2

	
Ceiling Election


	
 

	
 

	
 


	
 

	
 

	
To the
extent that the Lender is relying on Chapter 303 of the Texas Finance Code to
determine the Maximum Lawful Rate payable on the Indebtedness, the Lender
will utilize the weekly ceiling from time to time in effect as provided in
such Chapter 303, as amended. To the extent federal law permits the Lender to
contract for, charge, take, receive or reserve a greater amount of interest
than under Texas law, the Lender will rely on federal law instead of such
Chapter 303 for the purpose of determining the Maximum Lawful Rate.
Additionally, to the extent permitted by applicable law now or hereafter in
effect, the Lender may, at 








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
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its option
and from time to time, utilize any other method of establishing the Maximum
Lawful Rate under such Chapter 303 or under other applicable law by giving
notice, if required, to the Borrower as provided by applicable law now or
hereafter in effect.


	
 

	
 


	
26. 

	
LOAN INFORMATION


	
 

	
 

	
 


	
 

	
26.1

	
Dissemination of
Information


	
 

	
 

	
 


	
 

	
 

	
In
connection with any transfer of the Loan or Participation, the Lender may
forward any documents and information that the Lender now has or acquires in
the future concerning the Loan, including the financial statements of any
Obligor, sales reports on retail tenants, and such other information as may
be reasonably related to the Obligors, the Property or the Leases to any
transferee or prospective transferee of the Loan or Participation, or other
party involved in the transaction, or to any of their consultants, attorneys,
advisors or other representatives, and the Borrower waives any legal right it
may have to prohibit such disclosure.


	
 

	
 

	
 


	
 

	
26.2

	
Cooperation


	
 

	
 

	
 


	
 

	
 

	
The
Borrower, any guarantor and any Carveout Obligor shall cooperate with the
Lender in connection with any transfer of the Loan or any Participation. The
Borrower agrees to provide to the Lender or to any persons to whom the Lender
may disseminate such information, at the Lender’s request, financial
statements of Obligors, an estoppel certificate, sales reports on retail
tenants, and such other documents as may be reasonably related to any
Obligor, the Property, or the Leases, including, without limitation, any
historical information on the Real Property that is in the Borrower’s
possession or is reasonably obtainable by the Borrower.


	
 

	
 

	
 


	
 

	
26.3

	
Reserves/Escrows


	
 

	
 

	
 


	
 

	
 

	
The Lender
shall have the right, if required by the transferee of the Loan or any
Participation, to cause funds held by the Lender in escrow or as reserves to
be transferred to deposit or investment accounts at creditworthy financial
institutions, to be held or used in accordance with the Loan Documents.


	
 

	
 

	
 


	
27. 

	
MISCELLANEOUS


	
 

	
 


	
 

	
27.1

	
Successors and Assigns


	
 

	
 

	
 


	
 

	
 

	
All of the
terms of the Loan Documents shall apply to, be binding upon and inure to the
benefit of the heirs, personal representatives, successors and assigns of the
Obligors, or to the holder of the Note, as the case may be.


	
 

	
 

	
 


	
 

	
27.2

	
Survival of Obligations


	
 

	
 

	
 


	
 

	
 

	
Each and all
of the Obligations shall continue in full force and effect until the latest
of (a) the date the Indebtedness has been paid in full and the Obligations
have been performed and satisfied in full, (b) the last date permitted by law
for bringing any claim or action with respect to which the Lender may seek
payment or indemnification in connection with the Loan Documents, and (c) the
date on which any claim or action for which the Lender seeks payment or 








	
 

	
 

	
 


	
Deed
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Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-45-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
indemnification
is fully and finally resolved and, if applicable, any compromise thereof of
judgment or award thereon is paid in full.


	
 

	
 

	
 

	
 


	
 

	
27.3

	
Further Assurances


	
 

	
 

	
 


	
 

	
 

	
The
Borrower, upon the request of the Lender or the Trustee, shall complete,
execute, acknowledge, deliver and record or file such further instruments and
do such further acts as may be necessary to carry out more effectively the
purposes of this Deed of Trust, to subject any property intended to be
covered by this Deed of Trust to the mortgage and security interests it
creates, to place third parties on notice of the mortgage and security interests,
or to correct any defects which may be found in any Loan Document.


	
 

	
 

	
 


	
 

	
27.4

	
Right of Inspection


	
 

	
 

	
 


	
 

	
 

	
The Lender
shall have the right from time to time, upon reasonable advance notice to the
Borrower, to enter onto the Real Property for the purpose of inspecting and
reporting on its physical condition, tenancy and operations.


	
 

	
 

	
 


	
 

	
27.5

	
Expense Indemnification


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall pay all filing and recording fees, documentary stamps, intangible
taxes, and all expenses incident to the execution and acknowledgment of this
Deed of Trust, the Note or any of the other Loan Documents, any supplements,
amendments, renewals or extensions of any of them, or any instrument entered
into under Subsection 27.3. The Borrower shall pay or reimburse the Lender,
upon demand, for all costs and expenses, including appraisal and reappraisal
costs of the Property and reasonable attorneys’ and legal assistants’ fees,
which the Lender may incur in connection with enforcement proceedings under
the Note, this Deed of Trust, or any of the other Loan Documents (including
all fees and costs incurred in enforcing or protecting the Note, this Deed of
Trust, or any of the other Loan Documents in any bankruptcy proceeding), and
attorneys’ and legal assistants’ fees incurred by the Lender in any other
suit, action, legal proceeding or dispute of any kind in which the Lender is
made a party or appears as party plaintiff or defendant, affecting the
Indebtedness, the Note, this Deed of Trust, any of the other Loan Documents,
or the Property, or required to protect or sustain this Deed of Trust. The
Borrower shall
be obligated to pay (or to reimburse the Lender) for such fees, costs and
expenses and shall indemnify and hold the Lender and the Trustee harmless
from and against any and all loss, cost, expense, liability, damage and
claims and causes of action, including attorneys’ fees, incurred or accruing
by reason of the Borrower’s failure to promptly repay any such fees, costs
and expenses. If any suit or action is brought to enforce or interpret any of
the terms of this Deed of Trust (including any effort to modify or vacate any
automatic stay or injunction, any trial, any appeal, any petition for review
or any bankruptcy proceeding), the Lender shall be entitled to recover all
expenses reasonably incurred in preparation for or during the suit or action
or in connection with any appeal of the related decision, whether or not
taxable as costs. Such expenses include reasonable attorneys’ fees, witness
fees (expert or otherwise), deposition costs, copying charges and other
expenses. Whether or not any court action is involved, all reasonable
expenses, including the costs of searching records, obtaining title and
credit reports, appraisals, environmental assessments, surveying costs, title
insurance premiums, trustee fees, and other reasonable attorneys’ fees,
incurred by the Lender that are necessary at any time in the Lender’s opinion
for the 








	
 

	
 

	
 


	
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Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-46-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
protection
of its interest or enforcement of its rights shall become a part of the
Indebtedness payable on demand and shall bear interest from the date of
expenditure until repaid at the interest rate as provided in the Note.


	
 

	
 

	
 

	
 


	
 

	
27.6

	
General Indemnification


	
 

	
 

	
 


	
 

	
 

	
The Borrower shall indemnify, defend and hold the Lender harmless
against: (i) any and all claims for brokerage, leasing, finder’s or
similar fees which may be made relating to the Real Property or the
Indebtedness and (ii) any and all liability, obligations, losses, damages,
penalties, claims, actions, suits costs and expenses (including the Lender’s
reasonable attorneys’ fees, together with reasonable appellate counsel fees,
if any) of whatever kind or nature which may be asserted against, imposed on
or incurred by the Lender in connection with the Indebtedness, this Deed of
Trust, the Real Property or any part thereof, or the operation, maintenance
and/or use thereof, or the exercise by the Lender of any rights or remedies
granted to it under this Deed of Trust or pursuant to applicable law;
provided, however, that nothing herein shall be construed to obligate the
Borrower to indemnify, defend and hold harmless the Lender from and against
any of the foregoing which is imposed on or incurred by the Lender by reason
of the Lender’s willful misconduct or gross negligence.


	
 

	
 

	
 


	
 

	
27.7

	
Recording and Filing


	
 

	
 

	
 


	
 

	
 

	
The Borrower
shall cause this Deed of Trust and all amendments, supplements, and
substitutions to be recorded, filed, re-recorded and re-filed in such manner
and in such places as the Lender may reasonably request. The Borrower will
pay all recording filing, re-recording and re-filing taxes, fees and other
charges.


	
 

	
 

	
 


	
 

	
27.8

	
No Waiver


	
 


	
 

	
 

	
No
deliberate or unintentional failure by the Lender to require strict
performance by the Borrower of any Obligation shall be deemed a waiver, and
the Lender shall have the right at any time to require strict performance by
the Borrower of any Obligation.


	
 

	
 

	
 


	
 

	
27.9

	
Covenants Running with the
Land


	
 

	
 

	
 


	
 

	
 

	
All
Obligations are intended by the parties to be and shall be construed as
covenants running with the Land.


	
 

	
 

	
 


	
 

	
27.10

	
Severability


	
 

	
 

	
 


	
 

	
 

	
The Loan
Documents are intended to be performed in accordance with, and only to the
extent permitted by, all applicable Legal Requirements. Any provision of the
Loan Documents that is prohibited or unenforceable in any jurisdiction shall
nevertheless be construed and given effect to the extent possible. The
invalidity or unenforceability of any provision in a particular jurisdiction
shall neither invalidate nor render unenforceable any other provision of the
Loan Documents in that jurisdiction, and shall not affect the validity or
enforceability of that provision in any other jurisdiction. If a provision is
held to be invalid or unenforceable as to a particular person or under a
particular circumstance, it shall nevertheless be presumed valid and
enforceable as to others, or under other circumstances.








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
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27.11

	
Entire Agreement


	
 

	
 

	
 


	
 

	
 

	
The Loan
Documents contain the entire agreements between the parties relating to the
financing of the Real Property, and all prior agreements which are not
contained in the Loan Documents, other than the Environmental Indemnity
Agreement, are terminated. The Loan Documents 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. The Loan Documents may
be amended, revised, waived, discharged, released or terminated only by a
written instrument or instruments executed by the party against whom
enforcement of the amendment, revision, waiver, discharge, release or
termination is asserted. Any alleged amendment, revision, waiver, discharge,
release or termination that is not so documented shall be null and void.


	
 

	
 

	
 


	
 

	
27.12

	
Notices


	
 

	
 

	
 


	
 

	
 

	
In order for
any demand, consent, approval or other communication to be effective under
the terms of this Deed of Trust, “Notice” must be provided under the terms of
this Subsection. All Notices must be in writing. Notices may be
(a) delivered by hand, (b) transmitted by facsimile (with a duplicate
copy sent by first class mail, postage prepaid), (c) sent by certified or
registered mail, postage prepaid, return receipt requested, or (d) sent by
reputable overnight courier service, delivery charges prepaid. Notices shall
be addressed as set forth below:


	
 


	
 

	
 

	
If to the
Lender:


	
 

	
 

	
 


	
 

	
 

	
Transamerica
Financial Life Insurance Company


	
 

	
 

	
c/o AEGON
USA Realty Advisors, LLC


	
 

	
 

	
4333
Edgewood Road, N.E.


	
 

	
 

	
Cedar
Rapids, Iowa 52499-5443


	
 

	
 

	
Attn:
Mortgage Loan Department


	
 

	
 

	
Reference:
Loan #10512155


	
 

	
 

	
Fax Number:
(319) 355-2277


	
 

	
 

	
 


	
 

	
 

	
If to the
Borrower:


	
 

	
 

	
 


	
 

	
 

	
AmREIT
Preston Royal, LP


	
 

	
 

	
8 Greenway
Plaza, Suite 1000


	
 

	
 

	
Houston,
Texas 77046


	
 

	
 

	
Fax Number:
(713) 850-0498


	
 

	
 

	
 


	
 

	
 

	
With a copy
to:


	
 

	
 

	
 


	
 

	
 

	
Bass, Berry
& Sims PLC


	
 

	
 

	
100 Peabody
Place, Suite 900


	
 

	
 

	
Memphis,
Tennessee 38103


	
 

	
 

	
Attn: Gil
Uhlhorn


	
 

	
 

	
Fax Number:
(866) 393-1959


	
 

	
 

	
 


	
 

	
 

	
If to the
Trustee:


	
 

	
 

	
 


	
 

	
 

	
Peter S.
Graf


	
 

	
 

	
2626 Howell
Street


	
 

	
 

	
Dallas,
Texas 75204


	
 

	
 

	
Fax Number:
(214) 754-7768








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-48-

	
 














	
 

	
 

	
 

	
 


	
 

	
 

	
Notices
delivered by hand or by overnight courier shall be deemed given when actually
received or when refused by their intended recipient. Notices sent by facsimile
will be deemed delivered when a legible copy has been received (provided
receipt has been verified by telephone confirmation or one of the other
permitted means of giving Notices under this Subsection). Mailed Notices
shall be deemed given on the date of the first attempted delivery (whether or
not actually received). The Lender or the Borrower may change its address for
Notice by giving at least fifteen (15) Business Days’ prior Notice of such
change to the other party.


	
 

	
 

	
 


	
 

	
27.13

	
Counterparts


	
 

	
 

	
 


	
 

	
 

	
This Deed of
Trust may be executed in any number of counterparts, each of which shall be
an original, but all of which together shall constitute but one instrument.


	
 

	
 

	
 


	
 

	
27.14

	
Choice of Law


	
 

	
 

	
 


	
 

	
 

	
This Deed of Trust
shall be interpreted, construed, applied, and enforced according to, and will
be governed by, the laws of Texas, without regard to any choice of law
principle which, but for this provision, would require the application of the
law of another jurisdiction and regardless of where executed or delivered,
where payable or paid, where any cause of action accrues in connection with
this transaction, where any action or other proceeding involving the Loan is
instituted, or whether the laws of Texas otherwise would apply the laws of
another jurisdiction.


	
 

	
 

	
 


	
 

	
27.15

	
Forum Selection


	
 

	
 

	
 


	
 

	
 

	
The Borrower
agrees that the sole and exclusive forum for the determination of any action
relating to the validity and enforceability of the Note, this Deed of Trust
and the other Loan Documents, and any other instruments securing the Note
shall be either in an appropriate court of the State of Texas or the
applicable United States District Court.


	
 

	
 

	
 


	
 

	
27.16

	
Sole Benefit


	
 

	
 

	
 


	
 

	
 

	
This Deed of
Trust and the other Loan Documents have been executed for the sole benefit of
the Borrower and the Lender and the successors and assigns of the Lender. No
other party shall have rights thereunder or be entitled to assume that the
parties thereto will insist upon strict performance of their mutual
obligations hereunder, any of which may be waived from time to time. The
Borrower shall have no right to assign any of its rights under the Loan
Documents to any party whatsoever.


	
 

	
 

	
 


	
 

	
27.17

	
Release of Claims


	
 

	
 

	
 


	
 

	
 

	
The Borrower
hereby RELEASES, DISCHARGES and ACQUITS forever the Lender and the Trustee
and their officers, directors, trustees, agents, employees and counsel (in
each case, past, present or future) from any and all Claims existing as of
the Effective Date (or the date of actual execution hereof by the Borrower,
if later). As used herein, the term “Claim” shall mean any and all
liabilities, claims, defenses, demands, actions, causes of action, judgments,
deficiencies, interest, liens, costs or expenses (including court costs,
penalties, attorneys’ fees and disbursements, and amounts paid in settlement)
of any kind and character whatsoever, including claims for usury, breach of
contract, breach 








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-49-

	
 














	
 

	
 

	
 

	
 


	
 

	
 

	
of commitment,
negligent misrepresentation or failure to act in good faith, in each case
whether now known or unknown, suspected or unsuspected, asserted or
unasserted or primary or contingent, and whether arising out of written
documents, unwritten undertakings, course of conduct, tort, violations of
laws or regulations or otherwise.


	
 

	
 

	
 

	
 


	
 

	
27.18

	
No Partnership


	
 

	
 

	
 


	
 

	
 

	
Nothing
contained in the Loan Documents is intended to create any partnership, joint
venture or association between the Borrower and the Lender, or in any way
make the Lender a co-principal with the Borrower with reference to the
Property.


	
 

	
 

	
 


	
 

	
27.19

	
Payoff Procedures


	
 

	
 

	
 


	
 

	
 

	
If the
Borrower pays or causes to be paid to the Lender all of the Indebtedness,
then the Trustee’s interest in the Real Property shall cease, and upon
receipt by the Lender of such payment, the Lender shall either (a) cancel
this Deed of Trust or (b) assign the Loan Documents and endorse the Note (in
either case without recourse or warranty of any kind) to a takeout lender,
upon payment (in the latter case) of an administrative fee of $1500 plus all
out-of-pocket expenses incurred by the Lender in connection with such
cancellation or assignment.


	
 

	
 

	
 


	
 

	
27.20

	
Future Advances 


	
 

	
 

	
 


	
 

	
 

	
Under the
terms of this Deed of Trust, “Indebtedness” includes any and all indebtedness
owed by the Borrower to the Lender, any and all obligations of the Borrower
to the Lender, and any and all liabilities of the Borrower to the Lender,
regardless of the kind or character of such indebtedness, obligations or
liabilities, if they relate to the Loan or to the Real Property in any way,
and regardless of whether they arise now or in the future, are absolute or
contingent, secured or unsecured, due or not due, arise by operation of law
or by contract, are direct or indirect, primary or secondary, joint, several,
joint and several, fixed or contingent, or are secured or unsecured by
additional or different security or securities, and regardless of whether the
indebtedness, obligations or liabilities are of the Borrower directly or
arise through its participation in any form of business or economic
association or transaction, whether as a partner, joint venturer, trustee,
principal, surety, endorser, guarantor, accommodation party or otherwise.
However, this Deed of Trust shall not secure any such other indebtedness,
obligation or liability with respect to which the Lender is by applicable law
prohibited from obtaining a lien on real estate, nor shall this definition
operate or be effective to constitute or require any assumption or payment by
any person, in any way, of any debt or obligation of any other person to the
extent that the same would violate or exceed the limit provided in any
applicable usury or other law.


	
 

	
 

	
 


	
 

	
27.21

	
Defeasance


	
 

	
 

	
 


	
 

	
 

	
This Deed of
Trust is made upon the conditions that if (a) all of the Indebtedness and
Obligations, including all future advances and other future indebtednesses,
obligations and liabilities included therein, are paid and performed in full,
(b) the Borrower reimburses the Lender for any amounts the Lender shall have
paid in respect of liens, Impositions, prior mortgages, insurance premiums,
repairing or maintaining the Real Property, performing the Borrower’s
obligations under any Lease, performing the Borrower’s obligations with
respect to environmental matters, and for any other advancements hereunder,
and interest thereon, (c) the 








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-50-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
Borrower
fulfills all of the Borrower’s other Obligations, (d) the Lender has no
obligation to extend any further credit to or for the account of the
Borrower, and (e) no contingent liability of the Borrower secured by this
Deed of Trust then exists, this conveyance shall be null and void upon the
filing by the Lender of the written instrument of termination described in
Section 27.22.


	
 

	
 

	
 

	
 


	
 

	
27.22

	
Satisfaction
of Deed of Trust


	
 

	
 

	
 


	
 

	
 

	
This Deed of
Trust and the Lender’s security interest under this Deed of Trust in the Real
Property will not be terminated until a written mortgage satisfaction
instrument executed by one of the Lender’s officers is filed for record in
the county in which the Land is located. Except as otherwise expressly
provided in this Deed of Trust, no satisfaction of this Deed of Trust shall
in any way affect or impair the representations, warranties, agreements or
other obligations of the Borrower or the powers, rights and remedies of the
Lender under this Deed of Trust with respect to any transaction or event
occurring prior to such satisfaction, all of which shall survive such
satisfaction.


	
 

	
 

	
 


	
 

	
27.23

	
Date of Deed
of Trust


	
 

	
 

	
 


	
 

	
 

	
The date of
this Deed of Trust is intended as a date for the convenient identification of
this Deed of Trust and is not intended to indicate that this Deed of Trust
was executed and delivered on that date.


	
 

	
 

	
 


	
 

	
27.24

	
Interpretation


	
 

	
 

	
 

	
 


	
 

	
 

	
 (a)

	
Headings and General Application


	
 


	
 

	
 

	
 

	
The section,
subsection, paragraph and subparagraph headings of this Deed of Trust are
provided for convenience of reference only and shall in no way affect, modify
or define, or be used in construing, the text of the sections, subsections,
paragraphs or subparagraphs. If the text requires, words used in the singular
shall be read as including the plural, and pronouns of any gender shall
include all genders.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (b)

	
Sole Discretion


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The Lender
may take any action or decide any matter under the terms of this Deed of
Trust or of any other Loan Document (including any consent, approval,
acceptance, option, election or authorization) in its sole and absolute
discretion, for any reason or for no reason, unless the related Loan Document
contains specific language to the contrary. Any approval or consent that the
Lender might withhold may be conditioned in any way.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (c)

	
Result of Negotiations


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
This Deed of
Trust and all other Loan Documents result from negotiations between the
Borrower and the Lender and from their mutual efforts. Therefore, it shall be
so construed, and not as though it had been prepared solely by the Lender.


	
 

	
 

	
 

	
 


	
 

	
 

	
 (d)

	
Reference to Particulars


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
The scope of
a general statement made in this Deed of Trust or in any other Loan Document
shall not be construed as having been reduced through the inclusion of
references to particular items that would be included within the statement’s
scope. Therefore, unless the relevant provision of a Loan Document contains
specific language to the contrary, 








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-51-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
the term
“include” shall mean “include, but shall not be limited to” and the term
“including” shall mean “including, without limitation.”


	
 

	
 

	
 

	
 


	
 

	
27.25

	
Joint and Several
Liability


	
 

	
 

	
 


	
 

	
 

	
If there is
more than one individual or entity executing this Deed of Trust as the
Borrower, liability of such individuals and entities under this Deed of Trust
shall be joint and several.


	
 

	
 

	
 


	
 

	
27.26

	
Time of Essence


	
 

	
 

	
 


	
 

	
 

	
Time is of
the essence of each and every covenant, condition and provision of this Deed
of Trust to be performed by the Borrower.


	
 

	
 

	
 


	
 

	
27.27

	
Jury Waiver


	
 

	
 

	
 


	
 

	
 

	
THE BORROWER
AND BY ITS ACCEPTANCE HEREOF, THE LENDER, HEREBY WAIVE ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS (I) UNDER
THIS DEED OF TRUST OR ANY OTHER LOAN DOCUMENT OR (II) ARISING FROM ANY
LENDING RELATIONSHIP EXISTING IN CONNECTION WITH THIS DEED OF TRUST OR ANY
OTHER LOAN DOCUMENT, AND THE BORROWER AND BY ITS ACCEPTANCE HEREOF, THE
LENDER, AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
JUDGE AND NOT BEFORE A JURY.


	
 

	
 

	
 


	
 

	
27.28

	
Renewal, Extension,
Modification and Waiver


	
 

	
 

	
 


	
 

	
 

	
The Lender,
at its option, may at any time renew or extend this Deed of Trust, the Note
or any other Loan Document. The Lender may enter into a modification of any
Loan Document or of the Environmental Indemnity Agreement without the consent
of any person not a party to the document being modified. The Lender may
waive any covenant or condition of any Loan Document or of the Environmental
Indemnity Agreement, in whole or in part, at the request of any person then
having an interest in the Property or in any way liable for any part of the
Indebtedness. The Lender may take, release, or resort to any security for the
Note and the Obligations and may release any party primarily or secondarily
liable on any Loan Document or on the Environmental Indemnity Agreement, all
without affecting any liability not expressly released in writing by the
Lender.


	
 

	
 

	
 

	
 


	
 

	
27.29

	
Cumulative Remedies


	
 

	
 

	
 


	
 

	
 

	
Every right
and remedy provided in this Deed of Trust shall be cumulative of every other
right or remedy of the Lender, whether conferred by law or by grant or
contract, and may be enforced concurrently with any such right or remedy. The
acceptance of the performance of any obligation to cure any Default shall not
be construed as a waiver of any rights with respect to any other past,
present or future Default. No waiver in a particular instance of the
requirement that any Obligation be performed shall be construed as a waiver
with respect to any other Obligation or instance.


	
 

	
 

	
 


	
 

	
27.30

	
No Obligation to Marshal
Assets


	
 

	
 

	
 


	
 

	
 

	
No holder of
any deed of trust, security interest or other encumbrance affecting all or
any portion of the Real Property, which encumbrance is inferior to the 








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-52-

	
 















	
 

	
 

	
 

	
 


	
 

	
 

	
mortgage and
security interest of this Deed of Trust, shall have any right to require the
Lender to marshal assets.


	
 

	
 

	
 

	
 


	
 

	
27.31

	
Transfer of Ownership


	
 

	
 

	
 


	
 

	
 

	
The Lender
may, without notice to the Borrower, deal with any person in whom ownership
of any part of the Real Property has vested, without in any way vitiating or
discharging the Borrower from liability for any of the Obligations.


	
 

	
 

	
 

	
 


	
 

	
27.32

	
Notice of Indemnification


	
 

	
 

	
 


	
 

	
 

	
THE BORROWER
HEREBY ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT CONTAINS INDEMNIFICATION
OBLIGATIONS PURSUANT TO SECTIONS 4, 21, 23.4, 27.5, and 27.6.








	
 

	
 

	
 


	
Deed
of Trust and Security Agreement
Preston
Royal Village, Dallas, Texas
AEGON
Loan No. 10512155

	
-53-

	
 












IN WITNESS
WHEREOF, the Borrower has caused this Deed of Trust to be duly executed on the
date of the acknowledgement of the Borrower’s signature below, to be effective
as of the Effective Date.


	
 

	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
AMREIT
PRESTON ROYAL, LP, a Texas limited partnership


	
 

	
 

	
 

	
 


	
 

	
 

	
By:

	
AmREIT
Preston Royal GP, LLC, a

Texas limited liability company


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
By:

	
/s/ Brett Treadwell




	
 

	
 

	
 

	
Name: 

	
Brett Treadwell




	
 

	
 

	
 

	
Title:

	
Vice President




	
 

	
 

	
 

	
 


	
STATE OF           Texas          

	
)

	
 

	
 


	
 

	
)ss.

	
 

	
 


	
COUNTY OF           Harris          

	
)

	
 

	
 





          The
foregoing instrument was acknowledged before me on this 7th day of
December, 2012, by Brett Treadwell, the Vice President of AmREIT
Preston Royal GP, LLC, a Texas limited liability company, as general partner of
AMREIT PRESTON ROYAL, LP, a Texas
limited partnership, on behalf of the limited partnership.




	
 

	
 

	
 

	
 

	
 


	
 

	
/s/ Deborah Korkmas


	
 

	
Notary
Public in and for the State of 

	
  Texas


	
 

	
Printed
Name: 

	
Deborah Korkmas

	
 


	
 

	
My Commission Expires:

	
5-12-2013

	
 








	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-54-

	
 











Exhibit A


Tract 1 (Preston Royal No. 1):


All that certain lot, tract, or parcel of land situated in the John W.
Smith Survey, Abstract Number 1336, Dallas County, Texas, and being all of a
called 8.217 acre tract of Sand described in a deed to Preston Royal Realty
Company, as recorded in Document Number 200600021970, Deed Records, Dallas
County, Texas, the subject tract being more particularly described as follows;


BEGINNING at an “X” cut set in the West line of Preston Road for the
Northeast corner of the herein described tract, the Northeast corner of said
8.217 acre tract and the Southeast corner of a 15’ alley in Block C of Preston
Royal No. 1, an addition to the City of Dallas, according to the plat thereof
recorded in Volume 8, Page 383, Plat Records, Dallas County, Texas, from which
a capped iron rod found stamped “Arthur” for the Southeast corner of Lot 10 in
said Block C bears North 00 degrees 01 minutes 15 seconds East, a distance of
15.00 feet;


THENCE South with the West line of said Road and the most Northerly
East line of said 8.217 acre tract, a distance of 481.15 feet to an “X” cut set
for the most Easterly Southeast corner thereof and the apparent Northeast
corner of a tract of land described in deed to Hal Winfield Padgett, Jr., as
recorded in Volume 82207, Page 232, Deed Records, Dallas County, Texas;


THENCE North 89 degrees 50 minutes 00 seconds West with the apparent
North line thereof and the most Easterly South line of said 8.217 acre tract, a
distance of 100.00 feet to a PK nail set for an inner ell corner thereof and
the apparent Northwest corner of said Padgett tract;


THENCE South with the apparent West line thereof and the most Southerly
East line of said 8.217 acre tract, a distance of 120.00 feet to an “X” cut set
on the North line of Royal Lane for the most Southerly Southeast corner
thereof;


THENCE South 89 degrees 50 minutes 00 seconds West with the North line
of said Lane and the South line of said 8.217 acre tract, a distance of 121.00
feet to a PK nail set for an inner ell corner thereof;


THENCE South with an East line of said 8.217 acre tract and a West line
of said Lane, a distance of 5.00 feet to an “X” cut set for corner on the South
line of said 8.217 acre tract and the North line of said Lane;


THENCE North 89 degrees 50 minutes 00 seconds West with the North line
thereof and the South line of said 8.217 acre tract, a distance of 390.45 feet
to an “X” cut set for the Southwest corner thereof and the Southeast corner of
a tract of land described in a deed to St. Lukes Episcopal Church, as recorded
in Document Number 2002-1756115, Deed Records, Dallas County, Texas;


THENCE North 00 degrees 02 minutes 25 seconds East with the East line
thereof and the West line of said 8.217 acre tract, a distance of 609.82 feet
to an “X” cut set in the South line of said alley for the Northeast corner of
said St. Lukes tract and the Northwest corner of said 8.217 acre tract;


THENCE South 89 degrees 29 minutes 20 seconds East with the North line
thereof and the South line of said alley, a distance of 611.04 feet to the PLACE
OF BEGINNING and enclosing 8.23 acres of land more or less.


	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-55-

	
 











Tract 2 (Easement Estate): 


Non-exclusive easement estate appurtenant to Tract 1, in and to the
following described property created pursuant to that certain Reciprocal
Easement Agreement dated December __, 2012, by and between AmREIT Preston
Royal, LP and AmREIT Preston Royal NEC, LP, recorded as Document Number
2012_____________, Official Public Records of Dallas County, Texas: 


All that certain lot, tract, or parcel of land situated in the James
Thomas Survey, Abstract Number 1485, Dallas County, Texas, and being all of a
called 7.49 acre tract of land described in a deed to Preston Royal Realty
Company, as recorded in Volume 80110, Page 428, Deed Records, Dallas County,
Texas, the subject tract being more particularly described as follows;


BEGINNING at an “X” cut set in the East line of Preston Road for the
Northwest corner of the herein described tract, the Northwest corner of said
7.49 acre tract and being the most Westerly Southwest corner of a 15’ alley in
Block No. 1 of Preston Royal No. 2, an addition to the City of Dallas,
according to the plat thereof recorded in Volume 10, Page 59, Plat Records,
Dallas County, Texas;


THENCE South 89 degrees 45 minutes 09 seconds East with the North line
of said 7.49 acre tract and the South line of said alley, a distance of 363.76
feet to a capped iron rod set at the beginning of a curve to the right having a
radius of 44.50 feet and a chord bearing and distance of South 67 degrees 19
minutes 09 seconds East, 33.96 feet;


THENCE Southeasterly, along the arc of said curve, the Northeast line
of said 7.49 acre tract and the Southwest line of said alley, an arc distance
of 34.85 feet to a capped iron rod set at the end of said curve;


THENCE South 44 degrees 53 minutes 09 seconds East with the Northeast
line of said 7.49 acre tract and the Southwest line of said alley, a distance
of 284.46 feet to a capped iron rod set at the beginning of a curve to the
right having a radius of 50.00 feet and a chord bearing and distance of South
22 degrees 25 minutes 22 seconds East, 38.21 feet;


THENCE Southeasterly, along the arc of said curve, the Northeast line
of said 7.49 acre tract and the Southwest line of said alley, an arc distance
of 39.21 feet to a capped iron rod set at the end of said curve;


THENCE South 00 degrees 02 minutes 25 seconds West with the East line
of said 7.49 acre tract and the West line of said alley, at a distance of
355.83 feet passing an “X” cut found for the Northeast corner of an Easement
for road purposes, as recorded in Volume 283, Page 865, Deed Records, Dallas
County, Texas, continuing along said course, a total distance of 360.82 feet to
a point in the North line of Royal Lane for the Southeast corner of said 7.49
acre tract and the most Southerly Southwest corner of said alley, from which a
1/2” iron rod found for the Southwest corner of Lot 6 in Block 2 of said
addition bears North 88 degrees 07 minutes 48 seconds East, a distance of 14.95
feet;


THENCE North 89 degrees 45 minutes 09 seconds West with the North line
of said Lane and the most Easterly South line of said 7.49 acre tract, a
distance of 485.16 feet to a point for the most Southerly Southwest corner
thereof and the apparent Southeast corner of a tract of land described in a
deed to Humble Oil and Refining Company, as recorded in Volume 71123, Page 14,
Deed Records, Dallas County, Texas; 


THENCE North with the apparent East line thereof and the most Southerly
West line of said 7.49 acre tract, at a distance of 4.78 feet passing an “X”
cut found for the Northwest corner of said


	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-56-

	
 











Road Easement, continuing along said course, a total distance of 156.29
feet to an “X” cut set for an inner ell corner of said 7.49 acre tract and the
apparent Northeast corner of said Humble tract;


THENCE North 89 degrees 52 minutes 00 seconds West with the apparent
North line thereof and the most Westerly South line of said 7.49 acre tract, a
distance of 125.00 feet to a capped iron rod set in the East line of said
Preston Road for the most Westerly Southwest corner thereof and the apparent
Northwest corner of said Humble tract;


THENCE North with the East line of said Road and the most Northerly
West line of said 7.49 acre tract, a distance of 453.67 feet to the PLACE OF
BEGINNING and enclosing 7.49 acres of land more or less.


	
 

	
 

	
 


	
Deed of Trust and Security Agreement
Preston Royal Village, Dallas, Texas
AEGON Loan No. 10512155

	
-57-