Document:

Exhibit 10.10

 

DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES,

SECURITY AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT

[REGENCY]

 

(This
Document Serves as a fixture filing under Section 9.502

 of the Texas Business and Commerce Code)

 

Grantor’s Organizational
Identification Number: 4414050

 

                This DEED OF
TRUST, ASSIGNMENT OF RENTS AND LEASES, SECURITY AGREEMENT, FIXTURE FILING AND
FINANCING STATEMENT (this “Mortgage”), is made as of the 13th day
of February, 2008, by BEHRINGER HARVARD REGENCY LP, a Delaware limited
partnership (herein referred to as “Grantor”), whose address is c/o
Behringer Harvard Funds, 15601 Dallas Parkway, Suite 600, Addison, Texas
75001 to PRLAP INC., a North Carolina
corporation (“Trustee”), for the benefit of BANK OF AMERICA, N.A.,
a national banking association, whose address is 901 Main Street, 20th Floor,
Dallas, TX 75202 Attention: Real Estate Loan Administration, as Administrative
Agent for the benefit of the Loan Parties.

 

RECITALS

 

A.            Behringer Harvard Opportunity OP I, LP, a Texas limited
partnership (the “Operating Partnership”) and certain of its
Subsidiaries, including Grantor, (the “Subsidiary Obligors”) (the
Operating Partnership and Subsidiary Obligors are sometimes referred to herein,
collectively, as “Borrowers”) may from time to time be indebted to the
Loan Parties pursuant to that certain Credit
Agreement dated of even date herewith (as modified, amended, renewed,
restated or supplemented from time to time, the “Credit Agreement”), among Borrowers, Administrative
Agent, L/C Issuer, Swap Bank and the Lenders (herein so called) now or
hereafter made a party thereto (Administrative Agent, L/C Issuer, Swap Bank and
Lenders, together with their
respective successors and assigns, are herein called the “Loan Parties”),
Grantor and the other Subsidiary Obligors from time to time made a party
thereto.  The Credit Agreement evidences, in part, a
$75,000,000 loan (with an option to increase the amount of such loan up to
$150,000,000 as provided in the Credit Agreement) (the “Loan”).

 

B.            In connection with and pursuant to
the terms of the Credit Agreement, Grantor hereby executes and delivers this
Mortgage to Administrative Agent, for the ratable behalf of the Loan Parties.

 

 

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ARTICLE 1

Definitions;
Granting Clauses; Secured Indebtedness

 

Section 1.1.  Principal Secured.  This Mortgage secures the aggregate principal
amount of up to ONE HUNDRED FIFTY MILLION AND NO/100 DOLLARS ($150,000,000.00),
plus such additional  amounts as Administrative
Agent and the other Loan Parties may from time to time advance pursuant to the
terms and conditions of this Mortgage, with respect to an obligation secured by
a lien or encumbrance prior to the lien of this Mortgage or for the protection
of the lien of this Mortgage, together with interest thereon.

 

Section 1.2.  Definitions.

 

(a)           In addition to other terms defined
herein, each of the following terms shall have the meaning assigned to it, such
definitions to be applicable equally to the singular and the plural forms of
such terms and to all genders (all capitalized terms used herein and not
otherwise defined shall have the meanings given to such terms in the Credit
Agreement):

 

“Administrative Agent” means Bank of
America, N.A., a national banking association, as Administrative Agent, whose
address is 901 Main Street, 20th Floor, Dallas, Texas 75202, Attention:  Real Estate Loan Administration, together
with its successors and assigns in such capacity, each acting hereunder on
behalf of the Loan Parties.

 

“Debtor Relief Law” means any
federal, state or local law, domestic or foreign, as now or hereafter in effect
relating to bankruptcy, insolvency, liquidation, receivership, reorganization,
arrangement, composition, extension or adjustment of debts, or any similar law
affecting the right of creditors.

 

“Grantor”
means Behringer Harvard Regency LP, a Delaware limited partnership whose
address is 15601 Dallas Parkway, Suite 600, Addison, TX 75001 and its
permitted successors and assigns.

 

“Loan” means the loan evidenced by
the Credit Agreement and the Note.

 

“Note”
means collectively, whether one or more, (a) each Promissory Note issued
by Borrowers pursuant to the terms of the Credit Agreement, in the aggregate
principal amount not to exceed $150,000,000.00, bearing interest as therein
provided, containing a provision for, among other things, the payment of
attorneys’ fees, and (b) all other notes given in substitution thereof or
in modification, supplement, increase, renewal or extension thereof, in whole
or in part, as provided in the Credit Agreement, whether in whole or in part or
one or more, as any or all of such notes may from time to time be renewed,
extended, supplemented, increased or modified, each bearing interest as
provided in the Credit Agreement. 
Additionally, the Credit Agreement provides that the principal balance
of the Loan shall bear interest at a floating rate of interest subject to
change from time to time.

 

“Trustee” means PRLAP, Inc. or
any successor or substitute appointed and designated as herein provided from
time to time acting hereunder, any one of whom may act alone.

 

 

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“UCC” means the Texas Business and
Commerce Code, as amended from
time to time.

 

(b)           Any term used or defined in the UCC,
as in effect from time to time, and not defined in this Mortgage has the
meaning given to the term in the UCC, as in effect from time to time, when used
in this Mortgage. However, if a term is defined in Chapter 9 of the UCC
differently than in another chapter of the UCC, the term has the meaning
specified in Title 9.

 

Section 1.3.  Granting Clause.  In consideration of the provisions of this
Mortgage and the sum of TEN DOLLARS ($10.00) cash in hand paid and other good
and valuable consideration, the receipt and sufficiency of which are
acknowledged by Grantor, to secure the obligations of Grantor under the Loan
Documents and all other matters and indebtedness constituting the Secured
Indebtedness, Grantor does hereby GRANT, BARGAIN, SELL, CONVEY, TRANSFER,
ASSIGN and SET OVER to Trustee in trust, with the power of sale, for the
benefit of Administrative Agent, the following: 
all estate, right, title and interest which Grantor now has or may
hereafter acquire in and to the following Premises, Accessories and other
rights, interests and properties, and all rights, estates, powers and
privileges appurtenant thereto (collectively, the “Property”):

 

(a)           Grantor’s right, title and interest in and to the real
property described in Exhibit A which is attached hereto and
incorporated herein by reference (the “Land”) together with (i) any
and all buildings, structures, improvements, alterations or appurtenances now
or hereafter situated or to be situated on the Land (collectively the “Improvements”);
(ii) all rights, estates, powers, privileges and interests of whatever
kind or character appurtenant or incident to the foregoing; and (iii) all
right, title and interest of Grantor, now owned or hereafter acquired, in and
to (1) all common area and other use rights, tenements, hereditaments,
streets, roads, alleys, easements, rights-of-way, licenses, rights of ingress
and egress, vehicle parking rights and public places, existing or proposed,
abutting, adjacent, used in connection with or pertaining or appurtenant to any
of the Land or the Improvements; (2) any strips or gores between the Land
and abutting or adjacent properties; and (3) all options to purchase the
Land or the Improvements or any portion thereof or interest therein, and any
greater estate in the Land or the Improvements; and (4) all water and
water rights or shares of stock evidencing water rights, timber, crops and
mineral interests on or pertaining to the Land (the Land, Improvements and
other rights, titles and interests referred to in this clause (a) being
herein sometimes collectively called the “Premises”);

 

(b)           all fixtures, equipment, systems, machinery, furniture,
furnishings, appliances, inventory, goods, building and construction materials,
supplies, and articles of personal property, of every kind and character,
tangible and intangible (including software embedded therein), now owned or
hereafter acquired by Grantor, which are now or hereafter attached to or
situated in, on or about the Land or the Improvements, or used in or necessary
to the complete and proper planning, development, use, occupancy or operation
thereof, or acquired (whether delivered to the Land or stored elsewhere) for
use or installation in or on the Land or the Improvements, and all renewals and
replacements of, substitutions for and additions to the foregoing (the
properties referred to in this clause (b) being herein sometimes
collectively called the “Accessories,” all of which are hereby declared to be
permanent accessions to the Land);

 

 

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(c)           all (i) plans and specifications for the
Improvements; (ii) Grantor’s rights, but not liability for any breach by
Grantor, under all commitments (including any commitments for financing to pay
any of the Secured Indebtedness, as defined below), insurance policies (or
additional or supplemental coverage related thereto, including  from an
insurance provider meeting the requirements of the Loan Documents or from or
through any state or federal government sponsored program or entity),
Swap Transactions (as hereinafter defined), contracts and agreements for the
design, construction, operation or inspection of the Improvements and other
contracts and general intangibles (including but not limited to payment
intangibles, trademarks, trade names, goodwill, software and symbols) related
to the Premises or the Accessories or the operation thereof; (iii) deposits
and deposit accounts arising from or related to any transactions related to the
Premises or the Accessories (including but not limited to Grantor’s rights in
tenants’ security deposits, deposits with respect to utility services to the
Premises, and any deposits, deposit accounts or reserves hereunder or under any
other Loan Documents (hereinafter defined) for taxes, insurance or otherwise),
rebates or refunds of impact fees or other taxes, assessments or charges,
money, accounts, (including deposit accounts), instruments, documents,
promissory notes and chattel paper (whether tangible or electronic) arising
from or by virtue of any transactions related to the Premises or the
Accessories, and any account, securities account or deposit account (including,
without limitation, reserve accounts and escrow accounts) from which Borrowers
may from time to time authorize Administrative Agent to debit and/or credit
payments due with respect to the Loan or any Swap Transaction, all rights to
the payment of money from the counterparty under any Swap Transaction, and all
accounts, deposit accounts and general intangibles, including payment intangibles,
described in any Swap Transaction; (iv) permits, licenses, franchises,
certificates, development rights, commitments and rights for utilities, and
other rights and privileges obtained in connection with the Premises or the
Accessories; (v) leases, rents, royalties, bonuses, issues, profits,
revenues and other benefits of the Premises and the Accessories (without
derogation of Article 3 hereof); (vi) as-extracted collateral
produced from or allocated to the Land including, without limitation, oil, gas
and other hydrocarbons and other minerals and all products processed or
obtained therefrom, and the proceeds thereof; and (vii) engineering,
accounting, title, legal, and other technical or business data concerning the
Property, including software, which are in the possession of Grantor or in
which Grantor can otherwise grant a security interest;

 

(d)              all (i) accounts and proceeds
(cash or non-cash and including payment intangibles) of or arising from the
properties, rights, titles and interests referred to above in this Section 1.3,
including but not limited to proceeds of any sale, lease or other disposition
thereof, proceeds of each policy of insurance (or additional or supplemental
coverage related thereto, including  from an insurance provider meeting the
requirements of the Loan Documents or from or through any state or federal
government sponsored program or entity) relating thereto (including
premium refunds), proceeds of the taking thereof or of any rights appurtenant
thereto, including change of grade of streets, curb cuts or other rights of
access, by condemnation, eminent domain or transfer in lieu thereof for public
or quasi-public use under any law, and proceeds arising out of any damage
thereto; (ii) all letter-of-credit rights (whether or not the letter of
credit is evidenced by a writing) Grantor now has or hereafter acquires
relating to the properties, rights, titles and interests 

 

 

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referred
to in this Section 1.3;
(iii) all commercial tort claims Grantor now has or hereafter acquires
relating to the properties, rights, titles and interests referred to in this Section 1.3;
and (iv) other interests of every kind and character which Grantor now has
or hereafter acquires in, to or for the benefit of the properties, rights,
titles and interests referred to above in this Section 1.3 and all property
used or useful in connection therewith, including but not limited to rights of
ingress and egress and remainders, reversions and reversionary rights or
interests; and if the estate of Grantor in any of the property referred to
above in this Section 1.3 is a leasehold estate, this conveyance
shall include, and the lien and security interest created hereby shall encumber
and extend to, all other or additional title, estates, interests or rights
which are now owned or may hereafter be acquired by Grantor in or to the
property demised under the lease creating the leasehold estate;

 

TO HAVE AND TO HOLD the
foregoing rights, interests and properties, and all rights, estates, powers and
privileges appurtenant thereto (herein collectively called the “Property”),
unto Trustee, and its successors or substitutes in this trust, and to its
successors and assigns, in trust, forever, subject to the terms, provisions and
conditions herein set forth, to secure the obligations of Grantor under the
Credit Agreement and Loan Documents (as hereinafter defined) and all other
indebtedness and matters defined as “Secured Indebtedness” (as hereinafter
defined).

 

Section 1.4.  Security Interest.  Grantor hereby grants to Administrative Agent
a security interest in all of the Property which constitutes personal property
or fixtures, all proceeds and products thereof, and all supporting obligations
ancillary to or arising in any way in connection therewith (herein sometimes
collectively called the “Collateral”) to secure the obligations of Grantor under the
Note, Credit Agreement and Loan Documents and all other indebtedness and
matters defined as Secured Indebtedness in Section 1.5 of this
Mortgage.  In addition to its rights
hereunder or otherwise, Administrative Agent shall have all of the rights of a
secured party under the UCC, as in effect from time to time, or under the
Uniform Commercial Code in force, from time to time, in any other state to the
extent the same is applicable law.

 

Section 1.5.  Secured Indebtedness, Note, Loan
Documents, Other Obligations.    This
Mortgage is made to secure and enforce the payment and performance of the
following promissory notes, obligations, indebtedness, duties and liabilities
and all renewals, extensions, supplements, increases, and modifications thereof
in whole or in part from time to time (collectively the “Secured
Indebtedness”): (a) the Note; (b)  all indebtedness,
liabilities, duties, covenants, promises and other obligations whether joint or
several, direct or indirect, fixed or contingent, liquidated or unliquidated,
and the cost of collection of all such amounts, owed by Grantor and Borrowers
to the Loan Parties, now or hereafter incurred or arising pursuant to or
permitted by the provisions of the Credit Agreement, the Note, this Mortgage,
or any other document now or hereafter evidencing, governing, guaranteeing,
securing or otherwise executed by Grantor, the other Borrowers or Guarantor (as
defined in the Credit Agreement) for the benefit of any of the Loan Parties in
connection with the Loan and any Letter of Credit issued in connection
therewith, including but not limited to the Credit Agreement, any L/C
Obligations and Letter of Credit Application (as each terms is defined in the
Credit Agreement) issued in accordance with the Credit Agreement, whether or
not for the account or benefit of Grantor, tri-party financing agreement,
Master Agreement relating to any Swap Transactions or other agreement between
any Borrower and Swap Bank, or among Borrowers, Administrative Agent,

 

 

5

 

Lenders
and any other Loan Parties, pertaining to the repayment or use of the proceeds
of the Loan and any L/C Obligations (the Note, the Credit Agreement, this
Mortgage, any Master Agreement relating to any Swap Transactions and such other
documents, as they or any of them may have been or may be from time to time
renewed, extended, supplemented, increased or modified, being herein sometimes
collectively called the “Loan Documents”).  For purposes of this
Mortgage, the term “Swap Transaction”
means any agreement, whether or not in writing, entered into between any
Borrower and a Lender acceptable to the Required Lenders (such financial
institution is referred to herein as “Swap Bank”) relating to any transaction entered into for the
purpose of hedging risks related to the Note that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or equity
index swap or option, bond, note or bill option, interest rate option, forward
foreign exchange transaction, cap, collar or floor transaction, currency swap,
cross-currency rate swap, swap option currency option or any other, similar
transaction (including any option to enter into any of the foregoing) or any
combination of the foregoing, and, unless the context otherwise clearly
requires, any form of master agreement (the “Master Agreement”) published by the
International Swaps and Derivatives Association, Inc., or any other master
agreement, entered into between a Swap Bank and any Borrower, together with any
related schedules, as amended, supplemented, superseded or replaced from time
to time, relating to or governing any or all of the foregoing.

 

ARTICLE 2

Representations,
Warranties and Covenants

 

Section 2.1.  Grantor represents, warrants, and covenants
as follows (with respect to representations and warranties, except as otherwise
disclosed to Administrative Agent in writing):

 

(a)           Payment and Performance.  Grantor will make due and punctual payment of
the Secured Indebtedness.  Grantor will
timely and properly perform and comply with all of the covenants, agreements,
and conditions imposed upon it by this Mortgage and the other Loan Documents
and will not permit a default to occur hereunder or thereunder.  Time shall be of the essence in this
Mortgage.

 

(b)           Title and Permitted Encumbrances.  Grantor has, in Grantor’s own right, and
Grantor covenants to maintain, lawful, good and indefeasible title to the
Property, is lawfully seized and possessed of the Property and every part
thereof, and has the right to convey the same, free and clear of all liens,
charges, claims, security interests, and encumbrances except for (i) the
matters, if any, set forth on Schedule B-1 of the mortgagee policy of title
insurance issued to Administrative Agent and insuring the lien of this
Mortgage, (ii) the liens and security interests evidenced by this
Mortgage, (iii) statutory liens for real estate taxes and assessments on
the Property which are not yet delinquent, (iv) other liens and security
interests (if any) in favor of Administrative Agent and (v) any other
matters affecting the Property to which the Administrative Agent may consent in
writing, which consent may be given in Administrative Agent’s sole discretion
(the matters described in the foregoing clauses (i), (ii), (iii), (iv), and (v) being
herein called the “Permitted Encumbrances”). 
Grantor will warrant generally and forever defend title to the Property,
subject as aforesaid, to Trustee and its successors or substitutes and 

 

 

6

 

assigns,
against the claims and demands of all persons claiming or to claim the same or
any part thereof.  Grantor will, prior to
delinquency, punctually pay, perform, observe and keep all covenants,
obligations and conditions in or pursuant to any Permitted Encumbrance and will
not modify or permit modification of any Permitted Encumbrance without the
prior written consent of Administrative Agent. 
Inclusion of any matter as a Permitted Encumbrance does not constitute
approval or waiver by Administrative Agent of any existing or future violation
or other breach thereof by Grantor, by the Property or otherwise.  No part of the Property constitutes all or
any part of the principal residence of Grantor if Grantor is an
individual.  If any right or interest of
Administrative Agent in the Property or any part thereof shall be endangered or
questioned or shall be attacked directly or indirectly, Administrative Agent
and Trustee, or either of them (whether or not named as parties to legal
proceedings with respect thereto), are hereby authorized and empowered to take
such steps as in its discretion may be proper for the defense of any such legal
proceedings or the protection of such right or interest of Administrative
Agent, including but not limited to the employment of independent counsel, the
prosecution or defense of litigation, and the compromise or discharge of
adverse claims.  All expenditures so made
of every kind and character shall be a demand obligation (which obligation
Grantor hereby promises to pay owing by Grantor to Administrative Agent or
Trustee (as the case may be), and the party (Administrative Agent or Trustee,
as the case may be) making such expenditures shall be subrogated to all rights
of the person receiving such payment.

 

(c)           Taxes and Other Impositions.  Subject to the right to contest same in
accordance with the Loan Documents, Grantor will pay, or cause to be paid, all
taxes, assessments and other charges or levies imposed upon or against or with
respect to the Property or the ownership, use, occupancy or enjoyment of any
portion thereof, or any utility service thereto, prior to delinquency,
including but not limited to all real estate taxes assessed against the
Property or any part thereof; and shall deliver to Administrative Agent, within
fifteen (15) days after request by Administrative Agent, such evidence of the
payment thereof as Administrative Agent may require.

 

(d)           No Other Liens. 
Grantor will not, without the prior written consent of Administrative
Agent, create, place or permit to be created or placed, or through any act or
failure to act, acquiesce in the placing of, or allow to remain, any deed of
trust, mortgage, voluntary or involuntary lien, whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Property, or any part thereof, other than the Permitted Encumbrances,
regardless of whether the same are expressly or otherwise subordinate to the
lien or security interest created in this Mortgage, and should any of the
foregoing become attached hereafter in any manner to any part of the Property
without the prior written consent of Administrative Agent, Grantor will cause
the same to be promptly discharged and released.  Notwithstanding the foregoing, Administrative
Agent shall not unreasonably delay or withhold its consent to financing or
leasing of certain types of office equipment, such as copiers or fax machines, provided,
that, such office equipment (i) is readily replaceable, (ii) will
not be used to store or hold any proprietary information or information
necessary for the operation of the Improvements that is not readily available
otherwise, and (iii) the underlying lease or financing documentation will
provide Administrative Agent with notice of any defaults of Grantor under such
documentation and the opportunity, but 

 

 

7

 

not
the obligation, to cure such defaults within a period of at least thirty (30)
days.  Grantor will own all parts of the
Property and will not acquire any fixtures, equipment or other property
(including software embedded therein) forming a part of the Property pursuant
to a lease, license, security agreement or similar agreement, whereby any party
has or may obtain the right to repossess or remove same, without the prior
written consent of Administrative Agent. 
If Administrative Agent consents to the voluntary grant by Grantor of
any deed of trust or mortgage, lien, security interest, or other encumbrance
(hereinafter called “Subordinate Lien”) covering any of the Property or
if the foregoing prohibition is determined by a court of competent jurisdiction
to be unenforceable as to a Subordinate Lien, any such Subordinate Lien shall
contain express covenants to the effect that: (1) the Subordinate Lien is
unconditionally subordinate to this Mortgage and all Leases (as hereinafter
defined); (2) if any action (whether judicial or pursuant to a power of
sale) shall be instituted to foreclose or otherwise enforce the Subordinate
Lien, no tenant of any of the Leases shall be named as a party defendant, and
no action shall be taken that would terminate any occupancy or tenancy without
the prior written consent of Administrative Agent; (3) Rents (as
hereinafter defined), if collected by or for the Administrative Agent of the
Subordinate Lien, shall be applied first to the payment of the Secured
Indebtedness then due and expenses incurred in the ownership, operation and
maintenance of the Property in such order as Administrative Agent may
determine, prior to being applied to any indebtedness secured by the
Subordinate Lien; (4) written notice of default under the Subordinate Lien
and written notice of the commencement of any action (whether judicial or
pursuant to a power of sale) to foreclose or otherwise enforce the Subordinate
Lien or to seek the appointment of a receiver for all or any part of the
Property shall be given to Administrative Agent with or promptly after the
occurrence of any such default or commencement; and (5) neither the
Administrative Agent of the Subordinate Lien, nor any purchaser at foreclosure
thereunder, nor anyone claiming by, through or under any of them shall succeed
to any of Grantor’s rights hereunder without the prior written consent of
Administrative Agent.

 

(e)           Further Assurances. 
Grantor will, within a reasonable period of time following  request of Administrative Agent, (i) correct
any defect, error or omission which may be discovered in the contents,
execution or acknowledgment of this Mortgage or any other Loan Document; (ii) execute,
acknowledge, deliver, procure and record and/or file such further documents
(including, without limitation, further mortgages, deeds of trust, security
agreements, and assignments of rents or leases) and do such further acts as may
be necessary, desirable or proper to carry out more effectively the purposes of
this Mortgage, to more fully identify and subject to the liens and security
interests hereof any property intended to be covered hereby (including
specifically, but without limitation, any renewals, additions, substitutions,
replacements, or appurtenances to the Property) or as deemed advisable by
Administrative Agent in its commercially reasonable judgment to protect the
lien or the security interest hereunder against the rights or interests of
third persons; and (iii) use best efforts to provide such certificates,
documents, reports, information, affidavits and other instruments and do such
further acts as may be necessary, desirable or proper in the reasonable
determination of Administrative Agent to enable Administrative Agent to comply
with the requirements or requests of any agency having jurisdiction over
Administrative Agent or any examiners of such agencies with respect to the
indebtedness secured hereby, Grantor or the Property.  Grantor shall pay all costs connected 

 

 

8

 

with
any of the foregoing, which shall be a demand obligation owing by Grantor
(which Grantor hereby promises to pay) to Administrative Agent pursuant to this
Mortgage.

 

(f)            Indemnification.

 

(i)            Grantor will
indemnify and hold harmless the Loan Parties and Trustee from and against, and
reimburse them on demand for, any and all Indemnified Matters (hereinafter
defined). WITHOUT LIMITATION, THE FOREGOING
INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO MATTERS
WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF, OR ARE CLAIMED TO
BE CAUSED BY OR ARISE OUT OF, THE NEGLIGENCE (WHETHER SOLE, COMPARATIVE OR
CONTRIBUTORY) OR STRICT LIABILITY OF SUCH (AND/OR ANY OTHER) INDEMNIFIED
PERSON.  HOWEVER, SUCH INDEMNITIES SHALL
NOT APPLY TO A PARTICULAR INDEMNIFIED PERSON TO THE EXTENT THAT THE SUBJECT OF
THE INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THAT INDEMNIFIED PERSON.  Any amount to be paid under this paragraph (f) by
Grantor to the Loan Parties and/or Trustee shall be a demand obligation owing
by Grantor (which Grantor hereby promises to pay) to the Loan Parties and/or
Trustee pursuant to this Mortgage.  Upon
demand by Administrative Agent, Grantor
shall diligently defend any Indemnified Matter which affects the Property or is
made or commenced against the Loan Parties, whether alone or together with Grantor or any other person, all at Grantor’s own cost and expense and by
counsel to be approved by Administrative Agent in the exercise of its
reasonable judgment.  In the alternative,
at any time Administrative Agent may elect to conduct its own defense through
counsel selected by Administrative Agent and at the cost and expense of Grantor. 
Nothing in this paragraph, elsewhere in this Mortgage or in any other
Loan Document shall limit or impair any rights or remedies of the Loan Parties
and/or Trustee (including without limitation any rights of contribution or
indemnification) against Grantor or any other person under any other provision
of this Mortgage, any other Loan Document, any other agreement or any
applicable Legal Requirement.

 

(ii)           For purposes of
this subparagraph
(f), the term “Loan Parties” shall include the Loan Parties and
the directors, officers, partners, employees and agents of each of the Loan
Parties or Trustee, respectively, and any persons owned or controlled by,
owning or controlling, or under common control or affiliated with the Loan
Parties or Trustee, respectively.  As used herein, the term “Indemnified
Matters” means any and all claims, demands, liabilities (including
strict liability), losses, damages (including consequential damages), causes of
action, judgments, penalties, fines, costs and expenses (including without
limitation, reasonable fees and expenses of attorneys and other professional
consultants and experts, and of the investigation and defense of any claim,
whether or not such claim is ultimately withdrawn or defeated, and the
settlement of any claim or judgment including all value paid or given in
settlement) of every kind, known or unknown, foreseeable or unforeseeable,
which may be imposed upon, asserted against 

 

 

9

 

or
incurred or paid by any of the Loan Parties and/or Trustee at any time and from
time to time, whenever imposed, asserted or incurred, because of, resulting
from, in connection with, or arising out of any transaction, act, omission,
event or circumstance in any way connected with the Property or with this
Mortgage or any other Loan Document, including but not limited to any bodily
injury or death or property damage occurring in or upon or in the vicinity of
the Property through any cause whatsoever at any time on or before the Release
Date (hereinafter defined) any act performed or omitted to be performed
hereunder or under any other Loan Document, any breach by Grantor of any
representation, warranty, covenant, agreement or condition contained in this
Mortgage or in any other Loan Document, any default as defined herein, any claim
under or with respect to any Lease.  The
term “Release
Date” as used herein means the earlier of the following two
dates:  (i) the date on which the
indebtedness and obligations secured by this Mortgage have been paid and
performed in full and the Mortgage has been released; or (ii) the date on
which the lien of the Mortgage is fully and finally foreclosed or a conveyance
by deed in lieu of such foreclosure is fully and finally effective and
possession of the Property has been given to and accepted by the purchaser or
grantee free of occupancy and claims to occupancy by Grantor and its successors
and assigns; provided that, if such payment, performance, release, foreclosure
or conveyance is challenged, in bankruptcy proceedings or otherwise, the Release
Date shall be deemed not to have occurred until such challenge is validly
released, dismissed with prejudice or otherwise barred by law from further
assertion.  The indemnities in this
paragraph (f) shall not terminate upon the Release Date or upon the release,
foreclosure or other termination of this Mortgage but will survive the Release
Date, foreclosure of this Mortgage or conveyance in lieu of foreclosure, the
repayment of the Secured Indebtedness the termination of any and all Swap
Transactions, the discharge and release of this Mortgage and the other Loan
Documents, any bankruptcy or other debtor relief proceeding, and any other
event whatsoever.

 

(g)           Taxes on Note or Mortgage.  Grantor will promptly pay all income,
franchise and other taxes owing by Grantor and any stamp, documentary,
recordation and transfer taxes or other similar taxes (unless such payment by
Grantor is prohibited by law) which may be required to be paid with respect to
the Loan, this Mortgage or any other instrument evidencing or securing any of
the Secured Indebtedness.  In the event
of the enactment after this date of any law of any governmental entity
applicable to the Loan Parties, the Loan, the Property or this Mortgage
deducting from the value of property for the purpose of taxation any lien or
security interest thereon, or imposing upon the Loan Parties the payment of the
whole or any part of the taxes or assessments or charges or liens herein
required to be paid by Grantor, or changing in any way the laws relating to the
taxation of deeds of trust or mortgages or security agreements or debts secured
by deeds of trust or mortgages or security agreements or the interest of the
mortgagee or secured party in the property covered thereby, or the manner of
collection of such taxes, so as to affect this Mortgage or the Secured
Indebtedness or the Loan Parties, then, and in any such event, Grantor, upon
demand by Administrative Agent, shall pay such taxes, assessments, charges or
liens, or reimburse the Loan Parties therefor; provided, however, that if in
the opinion of counsel for Administrative Agent (i) it might be unlawful
to require Grantor to make such payment or (ii) the making of such payment
might result in the imposition of interest beyond the 

 

 

10

 

maximum
amount permitted by law, then and in such event, the Required Lenders may
elect, by notice in writing given to Grantor, to declare all of the Secured
Indebtedness to be and become due and payable ninety (90) days from the giving
of such notice.

 

Section 2.2.  Performance by Administrative Agent on
Grantor’s Behalf.  Grantor agrees
that, if Grantor fails to perform any act or to take any action which under
this Mortgage Grantor is required to perform or take, or to pay any money which
under this Mortgage Grantor is required to pay, and such failure constitutes an
Event of Default under this Mortgage, then Administrative Agent, in Grantor’s
name or its own name, may (but shall not be obligated to) perform or cause to
be performed such act or take such action or pay such money, and any expenses
so incurred by Administrative Agent and any money so paid by Administrative
Agent shall be a demand obligation owing by Grantor to Administrative Agent
(which obligation Grantor hereby promises to pay), shall be a part of the
Secured Indebtedness, and Administrative Agent, upon making such payment, shall
be subrogated to all of the rights of the person, entity or body politic
receiving such payment.  Administrative
Agent and its designees shall have the right to enter upon the Property at any
time and from time to time for any such purposes.  No such payment or performance by
Administrative Agent shall waive or cure any default or waive any right, remedy
or recourse of Administrative Agent.  Any
such payment may be made by Administrative Agent in reliance on any statement,
invoice or claim without inquiry into the validity or accuracy thereof.  Each amount due and owing by Grantor to
Administrative Agent pursuant to this Mortgage shall bear interest, from the
date such amount becomes due until paid, at the rate per annum provided in the
Credit Agreement for interest on past due principal owed on the Loan, which
interest shall be payable to Administrative Agent on demand; and all such
amounts, together with such interest thereon, shall automatically and without
notice be a part of the Secured Indebtedness. 
The amount and nature of any expense by Administrative Agent hereunder
and the time when paid shall be fully established by the certificate of Administrative
Agent or any of Administrative Agent’s officers or agents.

 

Section 2.3.  Absence of Obligations of Administrative
Agent with Respect to Property. 
Notwithstanding anything in this Mortgage to the contrary, including,
without limitation, the definition of “Property” and/or the provisions of Article 3
hereof, (i) to the extent permitted by applicable law, the Property is
composed of Grantor’s rights, title and interests therein but not Grantor’s
obligations, duties or liabilities pertaining thereto, (ii) Administrative
Agent neither assumes nor shall have any obligations, duties or liabilities in
connection with any portion of the items described in the definition of “Property”
herein, either prior to or after obtaining title to such Property, whether by
foreclosure sale, the granting of a deed in lieu of foreclosure or otherwise,
and (iii) Administrative Agent may, at any time prior to or after the
acquisition of title to any portion of the Property as above described, advise
any party in writing as to the extent of Administrative Agent’s interest
therein and/or expressly disaffirm in writing any rights, interests,
obligations, duties and/or liabilities with respect to such Property or matters
related thereto.  Without limiting the
generality of the foregoing, it is understood and agreed that Administrative
Agent shall have no obligations, duties or liabilities prior to or after
acquisition of title to any portion of the Property, as lessee under any lease
or purchaser or seller under any contract or option unless Administrative Agent
elects otherwise by written notification.

 

 

11

 

Section 2.4.  Authorization to File Financing
Statements; Power of Attorney. 
Grantor hereby authorizes Administrative Agent at any time and from time
to time to file any initial financing statements, amendments thereto and
continuation statements as authorized by applicable law, required by
Administrative Agent to establish or maintain the validity, perfection and
priority of the security interests granted in this Mortgage.  For purposes of such filings, Grantor agrees
to furnish any information requested by Administrative Agent promptly upon
request by Administrative Agent.  Grantor
also ratifies its authorization for Administrative Agent to have filed any like
initial financing statements, amendments thereto or continuation statements if
filed prior to the date of this Mortgage. 
Grantor hereby irrevocably constitutes and appoints Administrative Agent
and any officer or agent of Administrative Agent, with full power of
substitution, as its true and lawful attorneys-in-fact with full irrevocable
power and authority in the place and stead of Grantor or in Grantor’s own name
to execute in Grantor’s name any such documents and to otherwise carry out the
purposes of this Section 2.4, to the extent that Grantor’s authorization
above is not sufficient.  To the extent
permitted by law, Grantor hereby ratifies all acts said attorneys-in-fact shall
lawfully do or cause to be done in the future by virtue hereof.  This power of attorney is a power coupled
with an interest and shall be irrevocable.

 

ARTICLE 3

Assignment of Rents and Leases

 

Section 3.1.  Assignment.

 

(a)           As additional security for the making
of the Loan by Administrative Agent, Grantor has executed of even date with
this Mortgage, that certain Assignment of Leases and Rents (the “Assignment”),
which Assignment will be recorded in the real property records in the county
where the Property is located, which is incorporated herein by reference and
contains other rights of Administrative Agent and the Loan Parties in the Rents
and Leases (defined below).

 

(b)           Confirming all of the
representations, warranties, covenants and agreements contained in the
Assignment, all of which are incorporated herein by reference, Grantor hereby
absolutely assigns to Administrative Agent, for the benefit of the Loan
Parties, all Rents (hereinafter defined) and all of Grantor’s rights in and
under all Leases (hereinafter defined). 
So long as no Event of Default (hereinafter defined) has occurred and is
continuing, Grantor shall have a license (which license shall terminate automatically
and without further notice upon the Event of Default) to collect, but not prior
to accrual, the Rents under the Leases and, where applicable, subleases, such
Rents to be held in trust for Administrative Agent, for the benefit of the Loan
Parties, and to otherwise deal with all Leases as permitted by this
Mortgage.  Each month, provided no Event
of Default has occurred and is continuing, Grantor may retain such Rents as
were collected that month; provided, however, that all Rents
collected by Grantor shall be first applied to pay costs and expenses
associated with the ownership, maintenance, development, operating, and
marketing of the Property, including all amounts then required to be paid under
the Loan Documents, before using or applying such Rents for any other
purpose.  Upon the revocation of such
license, all Rents shall be paid directly to Administrative Agent and 

 

 

12

 

not
through Grantor, all without the necessity of any further action by Administrative
Agent, including, without limitation, any action to obtain possession of the
Land, Improvements or any other portion of the Property or any action for the
appointment of a receiver.

 

(c)           Grantor hereby authorizes and directs
the tenants under the Leases to pay Rents to Administrative Agent upon written
demand by Administrative Agent, without further consent of Grantor, without any
obligation of such tenants to determine whether an Event of Default has in fact
occurred and regardless of whether Administrative Agent has taken possession of
any portion of the Property, and the tenants may rely upon any written
statement delivered by Administrative Agent to the tenants.  Any such payments to Administrative Agent
shall constitute payments to Grantor under the Leases, and Grantor hereby
irrevocably appoints Administrative Agent as its attorney-in-fact to do all
things, after the occurrence of and during the continuation of an Event of
Default, which Grantor might otherwise do with respect to the Property and the
Leases thereon, including, without limitation, (i) collecting Rents with
or without suit and applying the same, less expenses of collection, to any of
the obligations or sums due hereunder or under the Loan Documents or to
expenses of operating and maintaining the Property (including reasonable
reserves for anticipated expenses), at the option of the Administrative Agent,
all in such manner as may be determined by Administrative Agent,  (ii) leasing, in the name of Grantor,
the whole or any part of the Property which may become vacant, and (iii) employing
agents therefor and paying such agents reasonable compensation for their
services.  The curing of such Event of
Default, unless other Events of Default also then exist, shall entitle Grantor
to recover its aforesaid license to do any such things which Grantor might
otherwise do with respect to the Property and the Leases thereon and to again
collect such Rents.  The powers and
rights granted in this Section shall be in addition to the other remedies
herein provided and in the Assignment for upon the occurrence of an Event of
Default and may be exercised independently of or concurrently with any of said
remedies.  In the event of a conflict
between the provisions of this Mortgage and the Assignment, the provisions of
the Assignment shall govern and control. 
Nothing in the foregoing shall be construed to impose any obligation
upon Administrative Agent to exercise any power or right granted in this
paragraph or to assume any liability under any Lease of any part of the
Property and no liability shall attach to Administrative Agent for failure or
inability to collect any Rents under any such Lease.  The assignment contained in this Section shall
become null and void upon the release of this Mortgage.

 

(d)           As used herein: (i) “Lease”
means each existing or future lease, sublease (to the extent of Grantor’s
rights thereunder) or other agreement under the terms of which any person has
or acquires any right to occupy or use the Property, or any part thereof, or
interest therein, and each existing or future guaranty of payment or
performance thereunder, and all extensions, renewals, modifications and
replacements of each such lease, sublease, agreement or guaranty; and (ii) “Rents”
means all of the rents, revenue, income, profits and proceeds derived and to be
derived from the Property or arising from the use or enjoyment of any portion
thereof or from any Lease, including but not limited to the proceeds from any
negotiated lease termination or buyout of such Lease, liquidated damages
following default under any such Lease, all proceeds payable under any policy
of insurance covering loss of rents resulting from untenantability caused by
damage to any part of the Property, all of Grantor’s rights to recover monetary

 

 

13

 

amounts
from any tenant in bankruptcy including, without limitation, rights of recovery
for use and occupancy and damage claims arising out of Lease defaults,
including rejections, under any applicable Debtor Relief Law, together with any
sums of money that may now or at any time hereafter be or become due and
payable to Grantor by virtue of any and all royalties, overriding royalties,
bonuses, delay rentals and any other amount of any kind or character arising
under any and all present and all future oil, gas, mineral and mining leases
covering the Property or any part thereof, and all proceeds and other amounts
paid or owing to Grantor under or pursuant to any and all contracts and bonds
relating to the construction or renovation of the Property.

 

(e)           Notwithstanding anything contained
herein to the contrary, in no event shall this Section be deemed to reduce
the Secured Indebtedness by an amount in excess of the actual amount of cash
received by Grantor under any Lease, whether before, during or after the
occurrence of an Event of Default, and Grantor acknowledges that in no event
shall the Secured Indebtedness be reduced by the value from time to time of the
rents, income and profits of or from the Property.  In addition, Administrative Agent reserves
the right, at any time, whether before or after the occurrence of an Event of
Default, to recharacterize the assignment in this Section as merely
constituting security for the indebtedness of Grantor to the Loan Parties,
which recharacterization shall be made by written notice delivered to
Grantor.  Grantor’s receipt of any rents,
issues, and profits pursuant to this assignment in this Section after the
institution of foreclosure proceedings, either by court action or by the
private power of sale contained in any deed of trust now or hereafter securing
the Note, shall not cure an Event of Default, or affect such proceedings or
sale.  THE FOREGOING ASSIGNMENT SHALL NOT
CONSTITUTE OR EVIDENCE ANY PAYMENT WHATSOEVER ON ACCOUNT OF THE SECURED
INDEBTEDNESS, AND THE SECURED INDEBTEDNESS SHALL BE REDUCED BY AMOUNTS
COLLECTED BY ADMINISTRATIVE AGENT ONLY IF AND TO THE EXTENT THAT SUCH AMOUNTS
ARE ACTUALLY PAID TO ADMINISTRATIVE AGENT, FOR THE RATABLE BENEFIT OF THE LOAN
PARTIES, AND APPLIED BY THE LOAN PARTIES IN REDUCTION OF THE UNPAID PRINCIPAL
BALANCE OF THE SECURED INDEBTEDNESS.

 

ARTICLE 4

Event
of Default

 

Section 4.1.  Events of Default.  The occurrence of any one of the following
shall be a default under this Mortgage (“Event of Default”):

 

(a)           Nonperformance of Covenants.  Any covenant, agreement or condition herein
or in any other Loan Document (other than covenants otherwise addressed in
another paragraph of this Section) is not fully and timely performed, observed
or kept, and such failure is not cured within the applicable notice and cure
period (if any) provided for herein or in such other Loan Document.

 

(b)           Default under Credit Agreement or other Loan Documents.  The occurrence of a Default under (and as
defined in) the Credit Agreement or a default or event of default (however
defined in) any other Loan Document (after giving effect to any notice or cure
periods, if any).

 

 

14

 

Section 4.2.  Notice and Cure.  If any provision of this Mortgage or any
other Loan Document provides for Administrative Agent to give to Grantor any
notice regarding a default or incipient default, then if Administrative Agent
shall fail to give such notice to Grantor as provided, the sole and exclusive
remedy of Grantor for such failure shall be to seek appropriate equitable
relief to enforce the agreement to give such notice and to have any
acceleration of the maturity of the Loan and the Secured Indebtedness postponed
or revoked and foreclosure proceedings in connection therewith delayed or
terminated pending or upon the curing of such default in the manner and during
the period of time permitted by such agreement, if any, and Grantor shall have
no right to damages or any other type of relief not herein specifically set out
against Administrative Agent, all of which damages or other relief are hereby
waived by Grantor.  Nothing herein or in
any other Loan Document shall operate or be construed to add on or make
cumulative any cure or grace periods specified in any of the Loan Documents.

 

ARTICLE 5

Remedies

 

Section 5.1.  Certain Remedies.  If an Event of Default shall occur and be
continuing, Administrative Agent may (but shall have no obligation to) exercise
any one or more of the following remedies, without notice (unless notice is
required by applicable statute):

 

(a)           Acceleration; Termination.  Administrative Agent may at any time and from
time to time declare any or all of the Secured Indebtedness immediately due and
payable and may terminate any and all Swap Transactions.  Upon any such declaration, such Secured
Indebtedness shall, thereupon be immediately due and payable, and such Swap
Transactions shall immediately terminate, without presentment, demand, protest,
notice of protest, notice of acceleration or of intention to accelerate or any
other notice or declaration of any kind, all of which are hereby expressly
waived by Grantor.

 

(b)           Enforcement of Assignment of Rents.  In addition to the rights of Administrative
Agent under Article 3 hereof and under the Assignment, prior or
subsequent to taking possession of any portion of the Property or taking any
action with respect to such possession, Administrative Agent may: (1) collect
and/or sue for the Rents in Administrative Agent’s own name, give receipts and
releases therefor, and after deducting all expenses of collection, including
attorneys’ fees and expenses, apply the net proceeds thereof to the Secured
Indebtedness  in such manner and order
as Administrative Agent may elect and/or to the operation and management of the
Property, including the payment of reasonable management, brokerage and
attorney’s fees and expenses; and (2) require Grantor to transfer all
security deposits and records thereof to Administrative Agent together with
original counterparts of the Leases.

 

(c)           Foreclosure. 
Upon the occurrence of an Event of Default, Trustee, or his successor or
substitute, is authorized and empowered and it shall be his special duty at the
request of Administrative Agent to sell the Property or any part thereof
situated in the State of Texas, at the courthouse of any county (whether or not
the counties in which the Property is located are contiguous, if the Property
is located in more than one county) in the State of Texas 

 

 

15

 

in
which any part of the Property is situated, at public venue to the highest
bidder for cash between the hours of ten o’clock a.m. and four o’clock  p.m.
on the first Tuesday in any month or at such other place, time and date as
provided by the statutes of the State of Texas then in force governing sales of
real estate under powers of sale conferred by deed of trust, after having given
notice of such sale in accordance with such statutes.  Any sale made by Trustee hereunder may be as
an entirety or in such parcels as Administrative Agent may request.  To the extent permitted by applicable law,
any sale may be adjourned by announcement at the time and place appointed for
such sale without further notice except as may be required by law.  The sale by Trustee of less than the whole of
the Property shall not exhaust the power of sale herein granted, and Trustee is
specifically empowered to make successive sale or sales under such power until
the whole of the Property shall be sold; and, if the proceeds of such sale of
less than the whole of the Property shall be less than the aggregate of the
Secured Indebtedness and the expense of executing this trust as provided
herein, this Mortgage and the lien hereof shall remain in full force and effect
as to the unsold portion of the Property just as though no sale had been made;
provided, however, that Grantor shall never have any right to require the sale
of less than the whole of the Property but Administrative Agent shall have the
right, at its sole election, to request Trustee to sell less than the whole of
the Property.  Trustee may, after any
request or direction by Administrative Agent, sell not only the real property
but also the Collateral and other interests which are a part of the Property,
or any part thereof, as a unit and as a part of a single sale, or may sell any
part of the Property separately from the remainder of the Property.  It shall not be necessary for Trustee to have
taken possession of any part of the Property or to have present or to exhibit
at any sale any of the Collateral.  After
each sale, Trustee shall make to the purchaser or purchasers at such sale good
and sufficient conveyances in the name of Grantor, conveying the property so
sold to the purchaser or purchasers with general warranty of title of Grantor,
subject to the Permitted Encumbrances (and to such leases and other matters, if
any, as Trustee may elect upon request of Administrative Agent), and shall
receive the proceeds of said sale or sales and apply the same as herein
provided.  Payment of the purchase price
to the Trustee shall satisfy the obligation of purchaser at such sale therefor,
and such purchaser shall not be responsible for the application thereof.  The power of sale granted herein shall not be
exhausted by any sale held hereunder by Trustee or his substitute or successor,
and such power of sale may be exercised from time to time and as many times as
Administrative Agent may deem necessary until all of the Property has been duly
sold and all Secured Indebtedness has been fully paid.  In the event any sale hereunder is not
completed or is defective in the opinion of Administrative Agent, such sale
shall not exhaust the power of sale hereunder and Administrative Agent shall have
the right to cause a subsequent sale or sales to be made hereunder.  Any and all statements of fact or other
recitals made in any deed or deeds or other conveyances given by Trustee or any
successor or substitute appointed hereunder as to nonpayment of the Secured
Indebtedness or as to the occurrence of any default, or as to Administrative
Agent’s having declared all of said indebtedness to be due and payable, or as
to the request to sell, or as to notice of time, place and terms of sale and
the properties to be sold having been duly given, or as to the refusal, failure
or inability to act of Trustee or any substitute or successor trustee, or as to
the appointment of any substitute or successor trustee, or as to any other act
or thing having been duly done by Administrative Agent or by such Trustee,
substitute or successor, shall be taken as prima facie evidence of the truth of
the facts so stated and recited.  The
Trustee or his successor or substitute may appoint or delegate any one or more
persons as 

 

 

16

 

agent
to perform any act or acts necessary or incident to any sale held by Trustee,
including the posting of notices and the conduct of sale, but in the name and
on behalf of Trustee, his successor or substitute.  If Trustee or his successor or substitute
shall have given notice of sale hereunder, any successor or substitute Trustee
thereafter appointed may complete the sale and the conveyance of the property
pursuant thereto as if such notice had been given by the successor or
substitute Trustee conducting the sale.

 

(d)           Uniform Commercial Code.  Without limitation of Administrative Agent’s
rights of enforcement with respect to the Collateral or any part thereof in
accordance with the procedures for foreclosure of real estate, Administrative
Agent may exercise its rights of enforcement with respect to the Collateral or
any part thereof under the UCC, as in effect from time to time (or under the
Uniform Commercial Code in force, from time to time, in any other state to the
extent the same is applicable law) and in conjunction with, in addition to or
in substitution for those rights and remedies: (1)  Administrative Agent
may enter upon Grantor’s premises to take possession of, assemble and collect
the Collateral or, to the extent and for those items of the Collateral
permitted under applicable law, to render it unusable; (2) Administrative
Agent may require Grantor to assemble the Collateral and make it available at a
place Administrative Agent designates which is mutually convenient to allow
Administrative Agent to take possession or dispose of the Collateral; (3) written
notice mailed to Grantor as provided herein at least five (5) days prior
to the date of public sale of the Collateral or prior to the date after which
private sale of the Collateral will be made shall constitute reasonable notice;
provided that, if Administrative Agent fails to comply with this clause (3) in
any respect, its liability for such failure shall be limited to the liability
(if any) imposed on it as a matter of law under the UCC, as in effect from time
to time (or under the Uniform Commercial Code, in force from time to time, in
any other state to the extent the same is applicable law); (4) any sale
made pursuant to the provisions of this paragraph shall be deemed to have been
a public sale conducted in a commercially reasonable manner if held
contemporaneously with and upon the same notice as required for the sale of the
Property under power of sale as provided in paragraph (c) above in this Section 5.1;
(5) in the event of a foreclosure sale, whether made by Trustee under the
terms hereof, or under judgment of a court, the Collateral and the other
Property may, at the option of Administrative Agent, be sold as a whole; (6) it
shall not be necessary that Administrative Agent take possession of the
Collateral or any part thereof prior to the time that any sale pursuant to the
provisions of this Section is conducted and it shall not be necessary that
the Collateral or any part thereof be present at the location of such sale; (7) with
respect to application of proceeds from disposition of the Collateral under Section 5.2
hereof, the costs and expenses incident to disposition shall include the
reasonable expenses of retaking, holding, preparing for sale or lease, selling,
leasing and the like and the reasonable attorneys’ fees and legal expenses
(including, without limitation, the allocated costs for in-house legal
services) incurred by Administrative Agent; (8) any and all statements of
fact or other recitals made in any bill of sale or assignment or other
instrument evidencing any foreclosure sale hereunder as to nonpayment of the
Secured Indebtedness or as to the occurrence of any Event of Default, or as to
Administrative Agent having declared all of such indebtedness to be due and
payable, or as to notice of time, place and terms of sale and of the properties
to be sold having been duly given, or as to any other act or thing having been
duly done by Administrative Agent, shall be taken as prima facie evidence of
the truth of the facts so stated and recited; (9) Administrative Agent may
appoint or delegate any 

 

 

17

 

one
or more persons as agent to perform any act or acts necessary or incident to
any sale held by Administrative Agent, including the sending of notices and the
conduct of the sale, but in the name and on behalf of Administrative Agent; (10) Administrative
Agent may comply with any applicable state or federal law or regulatory requirements
in connection with a disposition of the Collateral, and such compliance will
not be considered to affect adversely the commercial reasonableness of any sale
of the Collateral; (11) Administrative Agent may sell the Collateral without
giving any warranties as to the Collateral, and specifically disclaim all
warranties including, without limitation, warranties relating to title,
possession, quiet enjoyment and the like, and all warranties of quality,
merchantability and fitness for a specific purpose, and this procedure will not
be considered to affect adversely the commercial reasonableness of any sale of
the Collateral; (12) Grantor acknowledges that a private sale of the Collateral
may result in less proceeds than a public sale; and (13) Grantor acknowledges
that the Collateral may be sold at a loss to Grantor, and that, in such event,
subject to applicable law, Administrative Agent shall have no liability or
responsibility to Grantor for such loss.

 

(e)           Lawsuits. 
Administrative Agent may, to the fullest extent permitted by applicable
law, proceed by a suit or suits in equity or at law, whether for the specific
performance of any covenant or agreement herein contained or in aid of the
execution of any power herein granted, or for any foreclosure hereunder or for
the sale of the Property under the judgment or decree of any court or courts of
competent jurisdiction.

 

(f)            Entry on Property. 
Administrative Agent is authorized, prior or subsequent to the
institution of any foreclosure proceedings, to the fullest extent permitted by
applicable law, to enter upon the Property, or any part thereof, and to take
possession of the Property and all books and records, and all recorded data of
any kind or nature, regardless of the medium of recording including, without
limitation, all software, writings, plans, specifications and schematics
relating thereto, and to exercise without interference from Grantor any and all
rights which Grantor has with respect to the management, possession, operation,
protection or preservation of the Property. 
Administrative Agent shall not be deemed to have taken possession of the
Property or any part thereof except upon the exercise of its right to do so,
and then only to the extent evidenced by its demand and overt act specifically
for such purpose.  All costs, expenses
and liabilities of every character incurred by Administrative Agent in
managing, operating, maintaining, protecting or preserving the Property shall
constitute a demand obligation of Grantor (which obligation Grantor hereby
promises to pay) to Administrative Agent pursuant to this Mortgage.  If necessary to obtain the possession
provided for above, Administrative Agent may invoke any and all legal remedies
to dispossess Grantor.  In connection
with any action taken by Administrative Agent pursuant to this Section,
Administrative Agent shall not be liable for any loss sustained by Grantor
resulting from any failure to let the Property or any part thereof, or from any
act or omission of Administrative Agent in managing the Property unless such
loss is caused by the gross negligence, willful misconduct or bad faith of
Administrative Agent, nor shall Administrative Agent be obligated to perform or
discharge any obligation, duty or liability of Grantor arising under any lease
or other agreement relating to the Property or arising under any Permitted
Encumbrance or otherwise arising. 
Grantor hereby assents to, ratifies and confirms any and all lawful
actions of Administrative Agent with respect to the Property taken under this
Section.

 

 

18

 

(g)           Receiver. 
Administrative Agent shall as a matter of right be entitled to the
appointment of a receiver or receivers for all or any part of the Property
whether such receivership be incident to a proposed sale (or sales) of such
property or otherwise, and without regard to the value of the Property or the
solvency of any person or persons liable for the payment of the indebtedness
secured hereby, and Grantor does hereby irrevocably consent to the appointment
of such receiver or receivers, waives notice of such appointment, of any
request therefor or hearing in connection therewith, and any and all defenses
to such appointment, agrees not to oppose any application therefor by
Administrative Agent, and agrees that such appointment shall in no manner
impair, prejudice or otherwise affect the rights of Administrative Agent to
application of Rents as provided in this Mortgage.  Nothing herein is to be construed to deprive
Administrative Agent of any other right, remedy or privilege it may have under
the law to have a receiver appointed. 
Any money advanced by Administrative Agent in connection with any such
receivership shall be a demand obligation (which obligation Grantor hereby
promises to pay) owing by Grantor to Administrative Agent pursuant to this
Mortgage.

 

(h)           Powers of Administrative Agent.  Administrative Agent may, either directly or
through an agent or court-appointed receiver, and without regard to the
adequacy of any security for the Secured Indebtedness:

 

(i)            enter, take possession of, manage,
operate, protect, preserve and maintain, and exercise any other rights of an
owner of, the Property, and use any other properties or facilities of Grantor relating to the Property,
all without payment of rent or other compensation to Grantor;

 

(ii)           enter into such contracts and take
such other action as Administrative Agent deems appropriate to complete all or
any part of the Improvements or any other construction on the Land, subject to
such modifications and other changes in the Improvements or the plan of
development as Administrative Agent may deem appropriate;

 

(iii)          make, cancel, enforce or modify
leases, obtain and evict tenants, fix or modify rents and, in its own name or
in the name of Grantor, otherwise
conduct any business of Grantor in relation to the Property and deal with
Grantor’s creditors, debtors, tenants, agents and employees and any other
persons having any relationship with Grantor in relation to the Property,
and amend any contracts between them, in any manner Administrative Agent may
determine in its commercially reasonable judgment;

 

(iv)          subject to the terms of the Collateral
Assignment, either with or without taking possession of the Property, notify
obligors on any contracts that all payments and other performance are to be
made and rendered directly and exclusively to Administrative Agent, and in its
own name supplement, modify, amend, renew, extend, accelerate, accept partial
payments or performance on, make allowances and adjustments and issue credits
with respect to, give approvals, waivers and consents under, release, settle,
compromise, compound, sue for, collect or otherwise liquidate, enforce or deal
with any contracts or other rights, including collection of amounts past due
and unpaid (Grantor 

 

 

19

 

agreeing not to take any
such action, with respect to any obligation in excess of $5,000,  during the continuation of a Default without
prior written authorization from Administrative Agent);

 

(v)           endorse, in the name of Grantor, all checks, drafts and
other evidences of payment relating to the Property, and receive, open and
dispose of all mail addressed to Grantor and notify the postal authorities to
change the address for delivery of such mail to such address as Administrative
Agent may designate; and

 

take such other action as
Administrative Agent deems appropriate to protect the security of this
Mortgage.

 

(i)            Termination of Commitment to Lend.  Administrative Agent may terminate any
commitment or obligation to lend or disburse funds under any Loan Document or
enter into any other credit arrangement to or for the benefit of Grantor.

 

(j)            Other Rights and Remedies.  Administrative Agent may exercise any and all
other rights and remedies which Administrative Agent may have under the Loan
Documents, or at law or in equity or otherwise.

 

Section 5.2.  Proceeds of Foreclosure.  The proceeds held by Trustee or
Administrative Agent or any receiver or public officer in foreclosure of the
liens and security interests evidenced hereby shall be applied in accordance
with the requirements of applicable laws and to the extent consistent therewith
as follows:  (i) FIRST, to the
payment of all necessary costs and expenses incident to such foreclosure sale,
including but not limited to all attorneys’ fees and legal expenses,
advertising costs, auctioneer’s fees, costs of title rundowns and lien
searches, inspection fees, appraisal costs, fees for professional services,
environmental assessment and remediation fees, 
all court costs and charges of every character (not exceeding five
percent (5%) of the gross proceeds of such sale), to Trustee acting under the
provisions of paragraph (c) of Section 5.1 hereof if foreclosed by
power of sale as provided in said paragraph, and to the payment of the other
Secured Indebtedness, including specifically without limitation the principal,
accrued interest and attorneys’ fees due and unpaid on the Loan and the amounts
due and unpaid and owed to Administrative Agent under this Mortgage the order
and manner of application to the items in this clause (all with interest at the
rate per annum provided in the Credit Agreement and all in Administrative Agent’s
sole discretion); (ii) SECOND, to amounts due and payable to Swap Bank
under any Swap Transactions, and (iii) THIRD,
the remainder, if any, shall be paid to Grantor, or to Grantor’s successors or
assigns, or such other persons (including the Administrative Agent or
beneficiary of any inferior lien) as may be entitled thereto by law; provided,
however, that if Administrative Agent is uncertain which person or persons are
so entitled, Administrative Agent may interplead such remainder in any court of
competent jurisdiction, and the amount of any attorneys’ fees, court costs and
expenses incurred in such action shall be a part of the Secured Indebtedness
and shall be reimbursable (without limitation) from such remainder.

 

 

20

 

Section 5.3.  Loan Parties as Purchaser.  Administrative Agent and any of the Loan
Parties shall have the right to become the purchaser at any sale held by
Trustee or substitute or successor or by any receiver or public officer or at
any public sale, and Administrative Agent or any of the Loan Parties shall have
the right to credit upon the amount of Administrative Agent’s or such Loan
Party’s successful bid, to the extent necessary to satisfy such bid, all or any
part of the Secured Indebtedness held by such Loan Party or, alternatively, all
Loan Parties, in the case of a purchase by Administrative Agent or its
Affiliate acting on behalf of and with the consent of the Required Lenders, in
such manner and order as Administrative Agent may elect.

 

Section 5.4.  Foreclosure as to Matured Debt.  Upon the occurrence of a default, Holder
shall have the right to proceed with foreclosure (judicial or nonjudicial) of
the liens and security interests hereunder without declaring the entire Secured
Indebtedness due, and in such event any such foreclosure sale may be made
subject to the unmatured part of the Secured Indebtedness; and any such sale
shall not in any manner affect the unmatured part of the Secured Indebtedness,
but as to such unmatured part this Mortgage shall remain in full force and
effect just as though no sale had been made. 
The proceeds of such sale shall be applied as provided in Section 5.2
hereof except that the amount paid under clause FIRST
thereof shall be only the matured portion of the Secured Indebtedness and any
proceeds of such sale in excess of those provided for in clause FIRST (modified as provided above) shall be applied to the
prepayment (without penalty) of any other Secured Indebtedness in such manner
and order and to such extent as Holder deems advisable, and the remainder, if
any, shall be applied as provided in clause SECOND of Section 5.2
hereof.  Several sales may be made
hereunder without exhausting the right of sale for any unmatured part of the
Secured Indebtedness.

 

Section 5.5.  Remedies Cumulative.  All rights and remedies provided for herein
and in any other Loan Document are cumulative of each other and of any and all
other rights and remedies existing at law or in equity, and Trustee and
Administrative Agent shall, in addition to the rights and remedies provided
herein or in any other Loan Document, be entitled to avail themselves of all
such other rights and remedies as may now or hereafter exist at law or in
equity for the collection of the Secured Indebtedness and the enforcement of
the covenants herein and the foreclosure of the liens and security interests
evidenced hereby, and the resort to any right or remedy provided for hereunder
or under any such other Loan Document or provided for by law or in equity shall
not prevent the concurrent or subsequent employment of any other appropriate
right or rights or remedy or remedies.

 

Section 5.6.  Discretion as to Security.  Administrative Agent may resort to any
security given by this Mortgage or to any other security now existing or
hereafter given to secure the payment of the Secured Indebtedness, in whole or
in part, and in such portions and in such order as may seem best to
Administrative Agent in its sole and uncontrolled discretion, and any such
action shall not in anywise be considered as a waiver of any of the rights,
benefits, liens or security interests evidenced by this Mortgage.

 

Section 5.7.  Grantor’s Waiver of Certain Rights.  To the full extent Grantor may do so, Grantor
agrees that Grantor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any
appraisement, valuation, stay, 

 

 

21

 

extension
or redemption, homestead, moratorium, reinstatement, marshaling or forbearance,
and Grantor, for Grantor, Grantor’s heirs, devisees, representatives,
successors and assigns, and for any and all persons ever claiming any interest
in the Property, to the extent permitted by applicable law, hereby waives and
releases all rights of redemption, valuation, appraisement, stay of execution,
notice of intention to mature or declare due the whole of the Secured
Indebtedness, notice of election to mature or declare due the whole of the
Secured Indebtedness and all rights to a marshaling of assets of Grantor,
including the Property, or to a sale in inverse order of alienation in the
event of foreclosure of the liens and/or security interests hereby
created.  Grantor shall not have or
assert any right under any statute or rule of law including Chapter 34 of
the Texas Business and Commerce Code, pertaining to the marshaling of assets,
sale in inverse order of alienation, the exemption of homestead, the
administration of estates of decedents, or other matters whatsoever to defeat,
reduce or affect the right of Administrative Agent under the terms of this
Mortgage to a sale of the Property for the collection of the Secured
Indebtedness without any prior or different resort for collection, or the right
of Administrative Agent under the terms of this Mortgage to the payment of the
Secured Indebtedness out of the proceeds of sale of the Property in preference
to every other claimant whatsoever. 
Grantor waives any right or remedy which Grantor may have or be able to
assert pursuant to any provision of any statute or rule of law pertaining
to the rights and remedies of sureties. 
If any law referred to in this Section and now in force, of which
Grantor or Grantor’s heirs, devisees, representatives, successors or assigns or
any other persons claiming any interest in the Property might take advantage
despite this Section, shall hereafter be repealed or cease to be in force, such
law shall not thereafter be deemed to preclude the application of this Section.

 

Section 5.8.  Delivery of Possession After Foreclosure.  In the event there is a foreclosure sale
hereunder and at the time of such sale, Grantor or Grantor’s successors as
owners of the Property are occupying or using the Property, or any part
thereof, each and all shall immediately become the tenant of the purchaser at
such sale, which tenancy shall be a tenancy from day to day, terminable at the
will of purchaser, at a reasonable rental per day based upon the value of the
property occupied, such rental to be due daily to the purchaser; and to the
extent permitted by applicable law, the purchaser at such sale shall,
notwithstanding any language herein apparently to the contrary, have the sole
option to demand immediate possession following the sale or to permit the
occupants to remain as tenants at will. 
After such foreclosure, any leases to tenants or subtenants that are
subject to this Mortgage (either by their date, their express terms, or by
agreement of the tenant or subtenant) shall, at the sole option of
Administrative Agent or any purchaser at such sale, but subject to any express
agreement between Administrative Agent and such tenant or subtenant, either (i) continue
in full force and effect, and the tenant(s) or subtenant(s) thereunder
will, upon request, attorn to and acknowledge in writing to the purchaser or
purchasers at such sale or sales as landlord thereunder, or (ii) upon
notice to such effect from Administrative Agent, the Trustees or any purchaser
or purchasers, terminate within thirty (30) days from the date of sale.  Subject to the foregoing, in the event the
tenant fails to surrender possession of the Property upon demand, the purchaser
shall be entitled to institute and maintain a summary action for possession of
the Property (such as an action for forcible detainer) in any court having
jurisdiction.

 

 

22

 

Section 5.9.  Effective as Mortgage.  This instrument shall be effective as a
mortgage as well as a deed of trust and upon the occurrence of an Event of
Default may be foreclosed as to any of the Property in any manner permitted by
applicable law, and any foreclosure suit may be brought by Trustee or by
Administrative Agent; and to the extent, if any, required to cause this
instrument to be so effective as a mortgage as well as a deed of trust, Grantor
hereby mortgages the Property to Administrative Agent.  In the event a foreclosure hereunder shall be
commenced by Trustee, or his substitute or successor, Administrative Agent may
at any time before the sale of the Property direct Trustee to abandon the sale,
and may then institute suit for the collection of the Secured Indebtedness, and
for the foreclosure of this Mortgage.  It
is agreed that if Administrative Agent should institute a suit for the
collection of the Secured Indebtedness and for the foreclosure of this Mortgage,
Administrative Agent may at any time before the entry of a final judgment in
said suit dismiss the same, and require Trustee, his substitute or successor to
sell the Property in accordance with the provisions of this Mortgage.

 

ARTICLE 6

Miscellaneous

 

Section 6.1.  Scope of Mortgage.  This Mortgage is a deed of trust and mortgage
of both real and personal property, a security agreement, an assignment of
rents and leases, a financing statement and fixture filing and a collateral
assignment, and also covers proceeds and fixtures.

 

Section 6.2.  Effective as a Financing Statement and
Fixture Filing.  This Mortgage shall
be effective as a financing statement filed as a fixture filing with respect to
all fixtures included within the Property and is to be filed for record in the
real estate records of each county where any part of the Property (including
said fixtures) is situated.  This
Mortgage shall also be effective as a financing statement covering minerals or
the like (including oil and gas), timber, accounts and general intangibles
under the UCC, as amended, and similar provisions (if any) of the Uniform
Commercial Code as enacted in any other state where the Property is situated
which will be financed at the wellhead or minehead of the wells or mines
located on the Property and is to be filed for record in the real estate
records of each county where any part of the Property is situated.  To the extent permitted under applicable law,
this Mortgage shall also be effective as a financing statement covering any
other Property and may be filed in any other appropriate filing or recording
office.  The mailing address of Grantor
and the Administrative Agent are set forth in the introductory paragraph of
this Mortgage.  To the extent permitted
under applicable law, a carbon, photographic or other reproduction of this
Mortgage or of any financing statement relating to this Mortgage shall be
sufficient as a financing statement for any of the purposes referred to in this
Section.

 

Section 6.3.  Notice to Account Debtors.  In addition to the rights granted elsewhere
in this Mortgage, Administrative Agent may at any time notify the account
debtors or obligors of any accounts, chattel paper, general intangibles,
negotiable instruments or other evidences of indebtedness included in the
Collateral to pay Administrative Agent directly.

 

Section 6.4.  Waiver by Administrative Agent.  Administrative Agent may at any time and from
time to time by a specific writing intended for the purpose: (a) waive
compliance by 

 

 

23

 

Grantor
with any covenant herein made by Grantor to the extent and in the manner
specified in such writing; (b) consent to Grantor’s doing any act which
hereunder Grantor is prohibited from doing, or to Grantor’s failing to do any
act which hereunder Grantor is required to do, to the extent and in the manner
specified in such writing; (c) release any part of the Property or any
interest therein from the lien and security interest of this Mortgage, without
the joinder of Trustee; or (d) release any party liable, either directly
or indirectly, for the Secured Indebtedness or for any covenant herein or in
any other Loan Document, without impairing or releasing the liability of any
other party.  No such act shall in any
way affect the rights or powers of Administrative Agent or Trustee hereunder
except to the extent specifically agreed to by Administrative Agent in such
writing.

 

Section 6.5.  No Impairment of Security.  The lien, security interest and other
security rights of Administrative Agent hereunder or under any other Loan
Document shall not be impaired (except to the extent expressly stated therein)
by any indulgence, moratorium or release granted by Administrative Agent
including, but not limited to, any renewal, extension or modification which
Administrative Agent may grant with respect to any Secured Indebtedness, or any
surrender, compromise, release, renewal, extension, exchange or substitution
which Administrative Agent may grant in respect of the Property, or any part
thereof or any interest therein, or any release or indulgence granted to any
endorser, guarantor or surety of any Secured Indebtedness.  The taking of additional security by
Administrative Agent shall not release or impair the lien, security interest or
other security rights of Administrative Agent hereunder or affect the liability
of Grantor or of any endorser, guarantor or surety, or improve the right of any
junior lienholder in the Property (without implying hereby Administrative Agent’s
consent to any junior lien).

 

Section 6.6.  Acts Not Constituting Waiver by
Administrative Agent.  Administrative
Agent may waive any default without waiving any other prior or subsequent
default.  Administrative Agent may remedy
any default without waiving the default remedied.  Neither failure by Administrative Agent to
exercise, nor delay by Administrative Agent in exercising, nor discontinuance
of the exercise of any right, power or remedy (including but not limited to the
right to accelerate the maturity of the Secured Indebtedness or any part
thereof) upon or after any default shall be construed as a waiver of such
default or as a waiver of the right to exercise any such right, power or remedy
at a later date.  No single or partial
exercise by Administrative Agent of any right, power or remedy hereunder shall
exhaust the same or shall preclude any other or further exercise thereof, and
every such right, power or remedy hereunder may be exercised at any time and
from time to time.  No modification or
waiver of any provision hereof nor consent to any departure by Grantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by Administrative Agent and then such waiver or consent shall be
effective only in the specific instance, for the purpose for which given and to
the extent therein specified.  No notice
to nor demand on Grantor in any case shall of itself entitle Grantor to any
other or further notice or demand in similar or other circumstances.  Remittances in payment of any part of the
Secured Indebtedness other than in the required amount in immediately available
U.S. funds shall not, regardless of any receipt or credit issued therefor,
constitute payment until the required amount is actually received by
Administrative Agent in immediately available U.S. funds and shall be made and
accepted subject to the condition that any check or draft may be 

 

 

24

 

handled
for collection in accordance with the practice of the collecting bank or
banks.  Acceptance by Administrative
Agent of any payment in an amount less than the amount then due on any Secured
Indebtedness shall be deemed an acceptance on account only and shall not in any
way excuse the existence of a default hereunder notwithstanding any notation on
or accompanying such partial payment to the contrary.

 

Section 6.7.  Grantor’s Successors.  If the ownership of the Property or any part
thereof becomes vested in a person other than Grantor, Administrative Agent
may, without notice to Grantor, deal with such successor or successors in
interest with reference to this Mortgage and to the Secured Indebtedness in the
same manner as with Grantor, without in any way vitiating or discharging
Grantor’s liability hereunder or for the payment of the indebtedness or performance
of the obligations secured hereby.  No
transfer of the Property, no forbearance on the part of Administrative Agent,
and no extension of the time for the payment of the Secured Indebtedness given
by Administrative Agent shall operate to release, discharge, modify, change or
affect, in whole or in part, the liability of Grantor hereunder for the payment
of the indebtedness or performance of the obligations secured hereby or the
liability of any other person hereunder for the payment of the indebtedness
secured hereby.  Unless agreed to in
writing in connection with Administrative Agent’s consent to the transfer, each
Grantor agrees that it shall be bound by any modification of this Mortgage or
any of the other Loan Documents made by Administrative Agent and any subsequent
owner of the Property, with or without notice to such Grantor, and no such
modifications shall (i) impair the obligations of such Grantor under this
Mortgage or any other Loan Document or (ii) increase the obligations of
Grantor, unless consented to in writing by Grantor, under this Mortgage or any
other Loan Document. Nothing in this Section or elsewhere in this Mortgage
shall be construed to imply Administrative Agent’s consent to any transfer of
the Property.

 

Section 6.8.  Place of Payment; Forum; Waiver of Jury
Trial.  All Secured Indebtedness
which may be owing hereunder at any time by Grantor shall be payable at the
place designated in the Credit Agreement (or if no such designation is made, at
the address of Administrative Agent indicated at the end of this
Mortgage).  Grantor hereby irrevocably
submits generally and unconditionally for itself and in respect of its property
to the non-exclusive jurisdiction of any State court, or any United States
federal court, sitting in Dallas, Texas, and to the non-exclusive jurisdiction
of any State court or any United States federal court sitting in the state in
which any of the Property is located, over any suit, action or proceeding
arising out of or relating to this Mortgage or the Secured Indebtedness.  Grantor hereby irrevocably waives, to the
fullest extent permitted by law, any objection that Grantor may now or
hereafter have to the laying of venue in any such court and any claim that any
such court is an inconvenient forum. 
Grantor hereby agrees and consents that, in addition to any methods of
service of process provided for under applicable law, all service of process in
any such suit, action or proceeding in any State court in which the Property is
located, or any United States federal court, sitting in the State in which the
Secured Indebtedness is payable may be made by certified or registered mail,
return receipt requested, directed to Grantor at its address stated at the end
of this Mortgage, or at a subsequent address of Grantor of which Administrative
Agent received actual notice from Grantor in accordance with this Mortgage, and
service so made shall be complete five (5) days after the same shall have
been so mailed.  Nothing herein shall
affect the right of Administrative Agent to 

 

 

25

 

serve
process in any manner permitted by law or limit the right of Administrative
Agent to bring proceedings against Grantor in any other court or
jurisdiction.  TO THE FULLEST EXTENT
PERMITTED BY LAW, GRANTOR, ADMINISTRATIVE AGENT AND THE LOAN PARTIES EACH WAIVE
THE RIGHT TO TRIAL BY JURY IN CONNECTION WITH ANY ACTION, SUIT OR OTHER
PROCEEDING ARISING OUT OF OR RELATING TO THIS MORTGAGE OR ANY OTHER LOAN
DOCUMENT.

 

Section 6.9.  Subrogation to Existing Liens; Vendor’s/Purchase
Money Lien. To the extent that proceeds of the Loan are used to pay
indebtedness secured by any outstanding lien, security interest, charge or
prior encumbrance against the Property, such proceeds have been advanced by
Administrative Agent at Grantor’s request, and Administrative Agent shall be
subrogated to any and all rights, security interests and liens owned by any
owner or Administrative Agent of such outstanding liens, security interests,
charges or encumbrances, however remote, irrespective of whether said liens,
security interests, charges or encumbrances are released, and all of the same
are recognized as valid and subsisting and are renewed and continued and merged
herein to secure the Secured Indebtedness, but the terms and provisions of this
Mortgage shall govern and control the manner and terms of enforcement of the
liens, security interests, charges and encumbrances to which Administrative
Agent is subrogated hereunder.  It is
expressly understood that, in consideration of the payment of such indebtedness
by Administrative Agent, Grantor hereby waives and releases all demands and
causes of action for offsets and payments in connection with the said
indebtedness.  If all or any portion of
the proceeds of the Loan or of any other Secured Indebtedness has been advanced
for the purpose of paying the purchase price for all or a part of the Property,
no vendor’s or purchase money lien is waived; and Administrative Agent shall
have, and is hereby granted, a vendor’s or purchase money lien on the Property
as cumulative additional security for the Secured Indebtedness.  Administrative Agent may foreclose under this
Mortgage or under the vendor’s or purchase money lien without waiving the other
or may foreclose under both.

 

Section 6.10.  Application of Payments to Certain
Indebtedness.  If any part of the
Secured Indebtedness cannot be lawfully secured by this Mortgage or if any part
of the Property cannot be lawfully subject to the lien and security interest
hereof to the full extent of such Secured Indebtedness, then all payments made
shall be applied on said Secured Indebtedness first in discharge of that
portion thereof which is not secured by this Mortgage.

 

Section 6.11.  Compliance with Usury Laws.  It is the intent of Grantor and
Administrative Agent and all other parties to the Loan Documents to conform to
and contract in strict compliance with applicable usury law from time to time
in effect.  All agreements between
Administrative Agent and Grantor (or any other party liable with respect to any
indebtedness under the Loan Documents) are hereby limited by the provisions of
this Section which shall override and control all such agreements, whether
now existing or hereafter arising.  In no
way, nor in any event or contingency (including but not limited to prepayment,
default, demand for payment, or acceleration of the maturity of any
obligation), shall the interest taken, reserved, contracted for, charged,
chargeable, or received under this Mortgage, the Credit Agreement, the Note or
any other Loan Document or otherwise, exceed the maximum nonusurious amount
permitted by applicable law (the “Maximum Amount”).  If, from any possible construction of 

 

 

26

 

any
document, interest would otherwise be payable in excess of the Maximum Amount,
any such construction shall be subject to the provisions of this Section and
such document shall ipso facto be automatically reformed and the interest
payable shall be automatically reduced to the Maximum Amount, without the
necessity of execution of any amendment or new document.  If Administrative Agent shall ever receive
anything of value which is characterized as interest under applicable law and
which would apart from this provision be in excess of the Maximum Amount, an
amount equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount owing on
the Secured Indebtedness in the inverse order of its maturity and not to the
payment of interest, or refunded to Grantor or the other payor thereof if and
to the extent such amount which would have been excessive exceeds such unpaid
principal.  The right to accelerate
maturity of the Loan or any other Secured Indebtedness does not include the
right to accelerate any interest which has not otherwise accrued on the date of
such acceleration, and Administrative Agent does not intend to charge or
receive any unearned interest in the event of acceleration.  All interest paid or agreed to be paid to
Administrative Agent shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full stated term
(including any renewal or extension) of such indebtedness so that the amount of
interest on account of such indebtedness does not exceed the Maximum
Amount.  As used in this Section, the
term “applicable
law” shall mean the laws of the State of Texas, or the federal laws of
the United States applicable to this transaction, whichever laws allow the greatest
interest, as such laws now exist or may be changed or amended or come into
effect in the future.

 

Section 6.12.  Release.  If (i) all of the Secured Indebtedness
be paid as the same becomes due and payable and all of the covenants,
warranties, undertakings and agreements made in this Mortgage are kept and
performed, and all Swap Transactions have been terminated and all other
obligations under the Loan Documents, if any, of Administrative Agent and the
Loan Parties for further advances and of L/C Issuer for issuance of Letters of
Credit have been terminated, or (ii) Grantor is entitled to a release of
this Mortgage in accordance with the terms of the Credit Agreement, then, and
in that event only, all rights under this Mortgage shall terminate (except to
the extent expressly provided herein with respect to indemnifications,
representations and warranties and other rights which are to continue following
the release hereof) and the Property shall become wholly clear of the liens,
security interests, conveyances and assignments evidenced hereby, and the
Property shall be released by Administrative Agent in due form at Grantor’s
cost.  Without limitation, all provisions
herein for indemnity of Administrative Agent or Trustee shall survive discharge
of the Secured Indebtedness, the termination of any and all Swap Transactions
and any foreclosure, release or termination of this Mortgage.  Grantor agrees to pay reasonable fees, not to
exceed the maximum amounts legally permitted, for Trustee’s rendering of services
in connection with each partial or complete release of the Property from the
lien of this Mortgage.

 

Section 6.13.  Notices.  All such notices, demands, requests, consents
and other communications shall be deemed sufficiently given or furnished if delivered
by personal delivery, by courier, by registered or certified United States
mail, postage prepaid, or by facsimile (with, subject to Subsection 6.3.2 of
the Credit Agreement, a confirmatory duplicate copy sent by first class United
States mail), addressed to the party to whom directed or by 

 

 

27

 

(subject
to Subsection 6.3.3 of the Credit Agreement) electronic mail address to
Grantor, at the addresses set forth at the end of this Agreement or to Administrative
Agent or the Loan Parties at the addresses specified for notices in the Credit
Agreement (unless changed by similar notice in writing given by the particular
party whose address is to be changed). Any such notice or communication shall
be deemed to have been given and received either at the time of personal
delivery or, in the case of courier or mail, as of the date of first attempted
delivery at the address and in the manner provided herein, or, in the case of
facsimile, upon receipt; provided, however, that service of a notice required
by Texas Property Code Section 51.002, as amended, shall be considered
complete when the requirements of that statute are met.  Notwithstanding the foregoing, no notice of
change of address shall be effective except upon actual receipt.  This Section shall not be construed in
any way to affect or impair any waiver of notice or demand provided in any Loan
Document or to require giving of notice or demand to or upon any person in any
situation or for any reason.

 

Section 6.14.  Invalidity of Certain Provisions.  A determination that any provision of this
Mortgage is unenforceable or invalid shall not affect the enforceability or
validity of any other provision and the determination that the application of
any provision of this Mortgage to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.

 

Section 6.15.  Gender; Titles; Construction.  Within this Mortgage, words of any gender
shall be held and construed to include any other gender, and words in the
singular number shall be held and construed to include the plural, unless the
context otherwise requires.  Titles appearing
at the beginning of any subdivisions hereof are for convenience only, do not
constitute any part of such subdivisions, and shall be disregarded in
construing the language contained in such subdivisions.  The use of the words “herein,” “hereof,” “hereunder”
and other similar compounds of the word “here” shall refer to this entire
Mortgage and not to any particular Article, Section, paragraph or
provision.  The term “person” and words
importing persons as used in this Mortgage shall include firms, associations,
partnerships (including limited partnerships), joint ventures, trusts,
corporations, limited liability companies and other legal entities, including
public or governmental bodies, agencies or instrumentalities, as well as
natural persons.

 

Section 6.16.  Reporting Compliance.  Grantor agrees to comply with any and all
reporting requirements imposed upon Grantor, Grantor’s affiliates, Guarantor,
Guarantor’s affiliates with respect to the transaction evidenced by the Loan
Documents and secured by this Mortgage which are set forth in any law, statute,
ordinance, rule, regulation, order or determination of any governmental
authority, including but not limited to The International Investment Survey Act
of 1976, The Agricultural Foreign Investment Disclosure Act of 1978, The
Foreign Investment in Real Property Tax Act of 1980 and the Tax Reform Act of
1984 and further agrees upon request of Administrative Agent to furnish
Administrative Agent with evidence of such compliance.

 

Section 6.17.  Grantor.  The obligations of Grantor hereunder shall be
joint and several.  If any Grantor, or
any signatory who signs on behalf of any Grantor, is a corporation, partnership

 

 

28

 

or
other legal entity, Grantor and any such signatory, and the person or persons
signing for it, represent and warrant to Administrative Agent that this
instrument is executed, acknowledged and delivered by Grantor’s duly authorized
representatives. If Grantor is an individual, no power of attorney granted by
Grantor herein shall terminate on Grantor’s disability.

 

Section 6.18.  Execution; Recording.  This Mortgage may be executed in several
counterparts, all of which are identical, and all of which counterparts
together shall constitute one and the same instrument.  The date or dates reflected in the
acknowledgments hereto indicate the date or dates of actual execution of this
Mortgage, but such execution is as of the date shown on the first page hereof,
and for purposes of identification and reference the date of this Mortgage shall
be deemed to be the date reflected on the first page hereof.  Grantor will cause this Mortgage and all
amendments and supplements thereto and substitutions therefor and all financing
statements and continuation statements relating thereto to be recorded, filed,
re-recorded and refiled in such manner and in such places as Trustee or
Administrative Agent shall reasonably request and will pay all such recording,
filing, re-recording and refiling taxes, fees and other charges.

 

Section 6.19.  Successors and Assigns.  The terms, provisions, covenants and
conditions hereof shall be binding upon Grantor, and the successors and assigns
of Grantor, and shall inure to the benefit of Trustee and Administrative Agent
and shall constitute covenants running with the Land.  All references in this Mortgage to Grantor
shall be deemed to include all such heirs, devisees, representatives,
successors and assigns of Grantor.

 

Section 6.20.  No Partnership, Etc..  The relationship between Administrative Agent
and Grantor is solely that of lender and borrower.  Administrative Agent has no fiduciary or
other special relationship with Grantor. 
Nothing contained in the Loan Documents is intended to create any
partnership, joint venture, association or special relationship between Grantor
and Administrative Agent or in any way make Administrative Agent a co-principal
with Grantor with reference to the Property. 
All agreed contractual duties between or among Administrative Agent,
Trustee and Grantor are set forth herein and in the other Loan Documents and
any additional implied covenants or duties are hereby disclaimed.  Any inferences to the contrary of any of the
foregoing are hereby expressly negated.

 

Section 6.21.  Substitution of Trustee.  
Trustee may resign by an instrument in writing addressed to
Administrative Agent or Trustee may be removed at any time with or without
cause by an instrument in writing executed by Administrative Agent.  In case of the resignation, removal or
disqualification of Trustee, or if for any reason Administrative Agent shall
deem it desirable to appoint a substitute or successor trustee to act instead
of the herein-named trustee or any substitute or successor trustee, then
Administrative Agent shall have the right and is hereby authorized and empowered
to appoint a successor trustee(s) or a substitute trustee(s) without
any formality other than appointment and designation in writing executed by
Administrative Agent and the authority hereby conferred shall extend to the
appointment of other successor and substitute trustees successively until the
Secured Indebtedness has been paid in full or until the Property is fully and
finally sold hereunder.  If
Administrative Agent is a corporation or association and such appointment is
executed on its behalf by an officer of such corporation or 

 

 

29

 

association,
such appointment shall be conclusively presumed to be executed with authority
and shall be valid and sufficient without proof of any action by the board of directors
or any superior officer of the corporation or association.  Upon the making of any such appointment and
designation, all of the estate and title of Trustee in the Property shall vest
in the named successor or substitute Trustee(s) and it shall thereupon
succeed to, and shall hold, possess and execute, all of the rights, powers,
privileges, immunities and duties herein conferred upon Trustee.  All references herein to “Trustee” shall be
deemed to refer to Trustee (including any successor(s) or substitute(s) appointed
and designated as herein provided) from time to time acting hereunder.

 

Section 6.22. 
No Liability of Trustee.  Trustee shall not be liable for any error of
judgment or act done by Trustee in good faith, or be otherwise responsible or accountable
under any circumstances whatsoever (including Trustee’s negligence), except for
Trustee’s gross negligence or willful misconduct.  Trustee shall have the right to rely on any
instrument, document or signature authorizing or supporting any action taken or
proposed to be taken by it hereunder, believed by it in good faith to be
genuine.  All moneys received by Trustee
shall, until used or applied as herein provided, be held in trust for the
purposes for which they were received, but need not be segregated in any manner
from any other moneys (except to the extent required by law), and Trustee shall
be under no liability for interest on any moneys received by it hereunder.  Grantor hereby ratifies and confirms any and
all acts which the herein-named Trustee or its successor or successors,
substitute or substitutes, in this trust, shall do lawfully by virtue
hereof.  Grantor will reimburse Trustee
for, and save Trustee harmless against, any and all liability and expenses
which may be incurred by Trustee in the performance of its duties.  The foregoing indemnity shall not terminate
upon discharge of the Secured Indebtedness or foreclosure, release or other
termination of this Mortgage.

 

Section 6.23.  Applicable Law. THIS
MORTGAGE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED
BY AND CONSTRUED, INTERPRETED AND ENFORCED IN ACCORDANCE WITH AND PURSUANT TO
THE LAWS OF THE STATE OF TEXAS (WITHOUT REGARD TO ANY CONFLICT OF LAWS
PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.

 

Section 6.24.  No Merger of Estates.  So long as any part of the Secured
Indebtedness secured hereby remain unpaid and unperformed or undischarged, the
fee and leasehold estates to the Property shall not merge but rather shall
remain separate and distinct, notwithstanding the union of such estates either
in Grantor, Administrative Agent, any lessee, or any third party purchaser or
otherwise.

 

Section 6.25  Entire Agreement.  The Loan Documents constitute the entire
understanding and agreement between Grantor and Administrative Agent with
respect to the transactions arising in connection with the Secured Indebtedness
and supersede all prior written or oral understandings and agreements between
Grantor and Administrative Agent with respect to the matters addressed in the
Loan Documents.  Grantor hereby
acknowledges that, except as incorporated in writing in the Loan Documents,
there are not, and were not, and no persons are or were authorized by
Administrative Agent to make, any representations, understandings, 

 

 

30

 

stipulations,
agreements or promises, oral or written, with respect to the matters addressed
in the Loan Documents.

 

THE WRITTEN 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.

 

[REMAINDER OF THIS PAGE
INTENTIONALLY LEFT BLANK]

 

 

31

 

IN
WITNESS WHEREOF, Grantor has executed this instrument is executed by Grantor as
of the date first written on page 1 hereof.

 

	
  GRANTOR:

  
	
   

  	
   

  
	
  BEHRINGER
  HARVARD REGENCY LP,

  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Gerald J. Reihsen, III

  
	
   

  	
  Gerald
  J. Reihsen, III

  Executive Vice President — Corporate

  Development & Legal and Secretary

  
			

 

 

	
  STATE
  OF TEXAS

  	
  §

  
	
   

  	
  §    ss.   Dallas

  
	
  COUNTY
  OF DALLAS

  	
  §

  

 

The
foregoing instrument was acknowledged before me this
         day of February, 2008, by
Gerald J. Reihsen, III, Executive Vice President - Corporate Development &
Legal Secretary of Behringer Harvard Regency LP, a Delaware limited
partnership, on behalf such partnership.

 

Witness
my hand and official seal.

 

	
   

  
	
  Notary Public, State of Texas

  	
   

  
	
   

  	
   

  
	
  My
  commission expires:

  	
   

  
			

 

 

32Exhibit 10.11

 

ASSIGNMENT
OF LEASES AND RENTS

[ BOWEN ROAD]

 

THIS ASSIGNMENT OF LEASES AND RENTS (this “Assignment”)
is made this 13th day of February, 2008, by BEHRINGER
HARVARD BOWEN ROAD LP,
a Delaware limited partnership (“Grantor”), whose
address is 15601 Dallas Parkway, Suite 600, Addison, Texas 75001
Attention: Gerald J. Reihsen, III, and BANK OF AMERICA, N.A., a national
banking association, as Administrative Agent (in such capacity, together with
any successor Administrative Agent hereafter appointed by the Lenders, “Administrative
Agent”), for and on behalf of the Loan Parties (defined below), whose
address is 901 Main Street, 20th Floor, Dallas, Texas 75202 Attn:  Real Estate Loan Administration.

 

RECITALS

 

A.            Behringer Harvard Opportunity OP I, LP, a Texas limited
partnership (the “Operating Partnership”) and certain of its
Subsidiaries, including Grantor, (the “Subsidiary Obligors”) (the
Operating Partnership and Subsidiary Obligors are sometimes referred to herein,
collectively, as “Borrowers”) may from time to time be indebted to the
Loan Parties pursuant to that certain Credit
Agreement dated of even date herewith (as modified, amended, renewed,
restated or supplemented from time to time, the “Credit Agreement”), among Borrowers, L/C
Issuer, Swap Bank and the Lenders (herein so called) now or hereafter made a
party to the Credit Agreement (Administrative Agent, L/C Issuer, Swap Bank and Lenders, together with their
respective successors and assigns, are herein called the “Loan Parties”),
Grantor and the other Subsidiary Obligors from time to time made a party
thereto.  The Credit Agreement evidences, in part, a
$75,000,000 loan (with an option to increase the amount of such loan up to
$150,000,000 as provided in the Credit Agreement) (the “Loan”).

 

B.            In
connection with and pursuant to the terms of the Credit Agreement, Grantor
hereby executes and delivers this Assignment to Administrative Agent, for the
ratable behalf of the Loan Parties.

 

AGREEMENT

 

1.             Definitions.  Capitalized terms used herein but not
otherwise defined herein shall have the meaning assigned to such terms in the
Credit Agreement.

 

2.             Property. 
Grantor is the owner of that certain real property described in Exhibit A
attached hereto and incorporated herein by this reference (such real property,
together with all improvements now or hereafter situated thereon, and all
appurtenances thereto, being hereinafter referred to as the “Property”).

 

3.             Loan Documents. Grantor has executed that certain Deed of Trust,
Assignment of Rents and Leases, Security Agreement, Fixture Filing and
Financing Statement (the “Deed of 

 

 

1

 

Trust”), of even date herewith (this
Assignment, the Credit Agreement, the Deed of Trust, and all instruments and all
other documents executed in connection with the Loan are hereinafter referred
to collectively as the “Loan Documents”).  The terms “Credit
Agreement”, “Deed of Trust”, and “Loan Documents” shall be deemed to include
any and all modifications, amendments, extensions, renewals and substitutions,
supplements or restatements, in whole or in part, thereof.

 

4.             Assignment.  As an inducement to the Loan Parties to
extend certain financial accommodations to Borrowers, Grantor hereby assigns,
sells, conveys, and sets over unto Administrative Agent, for the ratable behalf
of the Loan Parties, all of Grantor’s right, title, and interest in and to:

 

(1)           any
leases, licenses, concession agreements, franchise and other occupancy
agreements and other agreements demising, leasing or granting rights of
possession or use or, to the extent of the interest therein of Grantor, any
sublease, subsublease or sublicense, which now or hereafter may affect the
Property or any part thereof or interest therein, including any agreement relating
to a loan or other advance of funds made in connection with any such lease,
license, concession agreement, franchise or other occupancy agreement and such
sublease, subsublease or sublicense, and every amendment, restatement,
supplement consolidation or other modification of or other agreement relating
to or entered into in connection with such lease, license, concession
agreement, franchise or other occupancy agreement and such sublease,
subsublease or sublicense, and every guarantee of the performance and
observance of the covenants, conditions and agreements to be performed and
observed by the other party thereto, and any guarantees of leasing commissions
(collectively, the “Leases”); and

 

(2)           all
rents, issues, profits, royalties, receipts, revenues, accounts receivable,
security deposits and other deposits (subject to the prior right of Tenants
making such deposits) and income, including fixed, additional and percentage
rents, occupancy charges, operating expense reimbursements, reimbursements for
increases in taxes, sums paid by Tenants to Grantor to reimburse Grantor for
amounts originally paid or to be paid by Grantor or its agents or Affiliates
for which such Tenants were liable, as, for example, tenant improvements costs
in excess of any work letter, lease takeover costs, moving expenses and tax and
operating expense pass-throughs for which a Tenant is solely liable, parking,
valet, maintenance, common area, tax, insurance, utility and service charges
and contributions, proceeds of sale of electricity, gas, heating,
air-conditioning and other utilities and services, deficiency rents and
liquidated damages, and other benefits (all of the foregoing being hereinafter
referred to collectively as the “Rents”).

 

Notwithstanding
anything contained herein to the contrary, in no event shall this Assignment be
deemed to reduce the Indebtedness by an amount in excess of the actual amount
of cash received by Grantor under any Lease, whether before, during or after
the occurrence of a Default, and Grantor acknowledges that in no event shall
the Indebtedness be reduced by the value from time to time of the Rents of or
from the Property.  In addition,
Administrative Agent reserves the right, 

 

 

2

 

at any time, whether
before or after the occurrence of a Default, to re-characterize this Assignment
as merely constituting security for the indebtedness of Grantor to the Loan
Parties, which re-characterization shall be made by written notice delivered to
Grantor.  Grantor’s receipt of any rents,
issues, and profits pursuant to this assignment after the institution of
foreclosure proceedings, either by court action or by the private power of sale
contained in the Deed of Trust, shall not cure a Default, or affect such proceedings
or sale. THIS ASSIGNMENT SHALL NOT CONSTITUTE OR EVIDENCE
ANY PAYMENT WHATSOEVER ON ACCOUNT OF THE INDEBTEDNESS, AND THE INDEBTEDNESS
SHALL BE REDUCED BY AMOUNTS COLLECTED BY ADMINISTRATIVE AGENT ONLY IF AND TO
THE EXTENT THAT SUCH AMOUNTS ARE ACTUALLY PAID TO ADMINISTRATIVE AGENT, FOR THE
RATABLE BENEFIT OF THE LOAN PARTIES, AND APPLIED BY THE LOAN PARTIES IN
REDUCTION OF THE UNPAID PRINCIPAL BALANCE OF THE INDEBTEDNESS.

 

5.             Warranties
and Covenants as to Leases.  Grantor
represents, warrants, and covenants to Administrative Agent and the Loan
Parties that (i) it has delivered to Administrative Agent a true and
correct copy of all Leases and each guarantee thereof (if any), affecting any
part of the Property, together with an accurate and complete rent roll for the
Property, and no such Lease or guarantee contains any option to purchase all or
any portion of the Property or any interest therein or contains any right of
first refusal relating to any sale of the Property or any portion thereof or interest
therein; (ii) it now is (or with respect to Leases not yet in existence,
will be immediately upon the execution thereof) the absolute owner of any
Leases, with full right and title to assign the same and the Rents due or to
become due thereunder; that any existing Leases are valid, in full force and
effect, and have not been modified or amended, except as stated herein; (iii) there
is no outstanding assignment or pledge of the Leases or of the Rents due or to
become due thereunder; and (iv) there are no existing defaults under the
terms of the Leases on the part of Grantor or, to the best knowledge of
Grantor, any other party thereto. 
Grantor also represents, warrants, and covenants that all Tenants under
the Leases are paying rent on fully executed Leases.  All future Leases
shall be executed on the lease form approved by Administrative Agent in
accordance with the Credit Agreement.

 

6.             Covenant to Defend Actions.    Grantor shall, at Grantor’s sole cost
and expense, appear in and defend any action or proceeding arising under,
growing out of, or in any manner connected with any Leases or the obligations,
duties, or liabilities of the lessor or lessee thereunder, and shall pay all
reasonable costs and expenses, including reasonable attorneys’ fees, which
Administrative Agent may incur in connection with Administrative Agent’s
appearance, voluntary or otherwise, in any such action or proceeding.

 

7.             Administrative Agent Rights as
to Leases and Rents.    This is
a current, direct and absolute assignment, and Administrative Agent, on behalf
of the Loan Parties, shall have the right, at its option after the occurrence
of and during the continuation of a Default, to enter and take possession of
the Property and to perform all acts necessary for the operation and
maintenance of the Property in the same manner and to the same extent that
Grantor might reasonably so act.  In furtherance of the foregoing, and not
by way of limitation, Administrative 

 

 

3

 

Agent is empowered, but shall have no obligation, to collect the Rents
accruing under any Lease, to enforce payment thereof and the performance of any
and all terms and provisions thereof, to exercise all the rights and privileges
of Grantor thereunder, including the right to fix or modify Rents, to demand
and sue for possession of the premises covered by any Lease, and to relet such
premises and collect the Rents accruing by reason of such reletting. 
Administrative Agent shall from time to time apply the net income derived under
any Leases, after payment of all proper costs and charges (including any loss
or damage of the nature referred to in Section 10 hereof, and
including reasonable attorneys’ fees and other costs of collection) to any sums
then due to the Loan Parties under the Loan Documents, in such order as
Administrative Agent may elect, but Administrative Agent shall in no event be
accountable for any moneys not actually received by Administrative Agent
pursuant hereto.

 

8.             License to Grantor Until Default.   Until the occurrence of a Default,
Grantor shall have a license (which license shall terminate automatically and
without further notice upon the occurrence of a Default) to collect the Rents
under the Leases and, where applicable, subleases, such Rents to be held in
trust for Administrative Agent, for the ratable behalf of the Loan Parties, and
to otherwise deal with all Leases as permitted by this Assignment.  Each month, provided no Default has occurred
and is continuing, Grantor may retain such Rents as were collected that month; provided,
however, that all Rents collected by Grantor shall be applied first to
the pay the costs and expenses associated with the ownership, maintenance,
development, operating, and marketing of the Property, including all amounts
then required to be paid under the Loan Documents, before using or applying such Rents for any other
purpose.  Upon the revocation of such
license, all Rents shall be paid directly to Administrative Agent, for the
ratable behalf of the Loan Parties, and not through Grantor, all without the
necessity of any further action by Administrative Agent, including, without
limitation, any action to obtain possession of all or any portion of the
Property or any action for the appointment of a receiver.  Grantor hereby authorizes and directs the
Tenants under the Leases to pay Rents to Administrative Agent upon written
demand by Administrative Agent, without further consent of Grantor, without any
obligation of such Tenants to determine whether a Default has in fact occurred
and regardless of whether Administrative Agent has taken possession of any
portion of the Property, and the Tenants may rely upon any written statement
delivered by Administrative Agent to the Tenants.  Any such payments to Administrative Agent
shall constitute payments to Grantor under the Leases, and Grantor hereby
irrevocably appoints Administrative Agent as its attorney-in-fact to do all
things, after a Default, which Grantor might otherwise do with respect to the
Property and the Leases thereon, including, without limitation, (i) collecting
Rents with or without suit and applying the same, less expenses of collection,
to any of the obligations or sums due to the Loan Parties hereunder or under
the Loan Documents or to expenses of operating and maintaining the Property
(including reasonable reserves for anticipated expenses), at the option of the
Administrative Agent, all in such manner as may be determined by Administrative
Agent, (ii) leasing, in the name of Grantor, the whole or any part of the
Property which may become vacant, and (iii) employing agents therefor and
paying such agents reasonable compensation for their services.  The curing of such Default, unless other
Defaults also then exist, shall entitle Grantor to recover its aforesaid
license to do any such things which Grantor might otherwise do with respect to
the Property and the Leases thereon and to again collect such Rents.  The powers and 

 

 

4

 

rights granted in this paragraph shall be in addition to the other
remedies herein provided for upon the occurrence of a Default and may be
exercised independently of or concurrently with any of said remedies.  Nothing in the foregoing shall be construed
to impose any obligation upon Administrative Agent, or any Loan Party, to
exercise any power or right granted in this paragraph or to assume any
liability under any Lease of any part of the Property and no liability shall
attach to Administrative Agent and the Loan Parties for failure or inability to
collect any Rents under any Lease.

 

9.             Authorization to Tenants.    Grantor hereby irrevocably agrees and
directs that the Tenant under each Lease shall, upon demand and notice from
Administrative Agent that Administrative Agent has revoked the license
contained in Section 8 hereof, pay all Rents under such Lease to
Administrative Agent, for the ratable behalf of the Loan Parties, without
liability on the part of such Tenant for determining the validity or propriety
of Administrative Agent’s revocation of such license, and notwithstanding any
claim by Grantor that Administrative Agent’s revocation of such license is
invalid or improper.  Grantor shall have no claim against any such Tenant
for any Rents or other sums paid by such Tenant to Administrative Agent.

 

10.           No Responsibility Until Entry.    Prior to Administrative Agent’s actual
entry and taking possession of the Property immediately affected by any Lease,
this Assignment shall not operate to place responsibility upon Administrative
Agent and the Loan Parties for the condition, safety, control, care,
management, or repair of the Property.  Nothing contained herein shall be
construed to bind Administrative Agent or any of the Loan Parties at any time
to the performance of any of the terms or provisions contained in any Lease, or
otherwise to impose any obligation on Administrative Agent and the Loan
Parties, including, without limitation, any liability under any covenant of
quiet enjoyment contained in any Lease in the event that any Lease shall be
terminated or any Tenant dispossessed upon foreclosure of any of the Loan
Documents.  GRANTOR AGREES TO INDEMNIFY AND HOLD
ADMINISTRATIVE AGENT AND THE LOAN PARTIES HARMLESS OF AND FROM ANY AND ALL
CLAIMS, LIABILITIES, LOSSES, EXPENSES, OR DAMAGES WHICH ADMINISTRATIVE AGENT
AND THE LOAN PARTIES MAY INCUR UNDER ANY LEASE, OR BY REASON OF THIS
ASSIGNMENT, EXCEPT ON ACCOUNT OF WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF
ADMINISTRATIVE AGENT OR ANY LOAN PARTY.

 

11.           Grantor to Perform and Enforce Leases.    Grantor shall perform, both before and
after any revocation by Administrative Agent of the license contained in Section 8
hereof, all of Grantor’s covenants, agreements, and obligations as lessor under
any Leases, and shall not suffer or permit to occur any release of liability of
any Tenant or the accrual of any right in any Tenant to withhold any Rent or
other sum payable under the terms of any Lease.  Grantor shall give prompt
notice to Administrative Agent of any notice of default received from any Tenant
or from any other person relative to the Property, and shall furnish
Administrative Agent with a copy of any such notice.  If requested by
Administrative Agent, Grantor shall enforce each Lease and all remedies
available to Grantor against the Tenant thereunder in the event of any default
by such Tenant.

 

 

5

 

12.           No Impairment of Administrative Agent’s Interests.    Grantor shall not make any other or
further assignments of any Lease or of any interest therein, or of any of the
Rents payable thereunder.  Grantor shall not modify or amend the terms of
any guaranty of any Lease or cancel or terminate any such guaranty, nor consent
to the assignment of any Lease, or any subletting thereunder, except in accordance
with the terms of the Credit Agreement.

 

13.           Administrative Agent’s Rights to Perform.   If Grantor shall fail to make any
payment or to perform any act required of Grantor under the terms hereof, then
(without waiving any rights of Administrative Agent under the provisions of Section 14
hereof) Administrative Agent may, but shall not be obligated to, without notice
to or demand on Grantor, and without releasing Grantor from any obligation
hereof, make or perform the same in such manner and to such extent as
Administrative Agent may deem necessary to protect the security hereof,
including specifically, without limitation, appearing in and defending any
action or proceeding purporting to affect the security hereof or the rights or
powers of Grantor or Administrative Agent, performing or discharging any
obligation, covenant, or agreement of Grantor under any Lease, and, in
exercising any of such powers, paying all necessary costs and expenses,
employing counsel, and incurring and paying reasonable attorneys’ fees. 
Any sum advanced or paid by Administrative Agent for any such purpose shall be
immediately due and payable to Administrative Agent, on behalf of the Loan
Parties, by Grantor, and shall bear interest at the Past Due Rate (as that term
is defined in the Credit Agreement) from the date paid or advanced by
Administrative Agent until repaid by Grantor.

 

14.           Cross Default Provision. Any default by Grantor in
the performance or observance of any covenant or condition hereof shall be
deemed a Default under each of the Loan Documents, entitling Administrative
Agent, for and on behalf of the Loan Parties, to exercise all or any remedies
available to Administrative Agent and the Loan Parties under the terms of any
or all Loan Documents, and any Default under any other Loan Document (subject
to any applicable grace periods) shall be deemed a Default hereunder, entitling
Administrative Agent, for and on behalf of the Loan Parties, to exercise any or
all remedies provided for herein.

 

15.           No Waiver. 
  Failure by Administrative Agent to exercise any right which it
may have hereunder shall not be deemed a waiver thereof unless so agreed in
writing by Administrative Agent, on behalf of the Loan Parties, and the waiver
by Administrative Agent of any default by Grantor hereunder shall not
constitute a continuing waiver or a waiver of any other default or of the same
default on any future occasion.

 

16.           Rights of Successors to Administrative Agent.    Administrative Agent shall have the
right to assign all of Grantor’s right, title, and interest in any or all
Leases and Rents (to the extent of the interests therein conferred upon
Administrative Agent by the terms hereof) to any subsequent holder or owner of
the Loan Documents, or to any person who shall acquire title to the Property
through foreclosure or otherwise.  From and after the acquisition of title
to the Property by any person, through foreclosure or conveyance in lieu of
foreclosure, no assignee of Grantor’s interest in any Lease shall be liable to
account to Grantor for the Rents thereafter accruing.

 

 

6

 

17.           Effect of Release of Deed of Trust.    The recording of any valid release of
the Deed of Trust shall operate as a release of this Assignment in favor of the
then owner of the Property, provided that the recording of any valid partial
release of said Deed of Trust shall operate as a release hereof only with
respect to that portion of the Property thereby released from said Deed of
Trust, the term “Property” as used herein being deemed thereafter to refer only
to that portion of the Property remaining encumbered by said Deed of Trust, and
the term “Grantor” as used herein being deemed thereafter to refer only to the
owner or owners of such remaining portion of the Property.  Notwithstanding anything to the contrary
contained herein, if, in the event of a foreclosure of the Deed of Trust, less
than the full amount then owing under the Loan Instruments is bid at any
resulting foreclosure sale, this Assignment shall not be released but shall
remain in full force and effect after such foreclosure sale and be assigned to
the purchaser of the Property at such foreclosure sale.

 

18.           Notices.    All notices or other communications
required or permitted to be given pursuant to this Assignment shall be in
writing and shall be considered as properly given if sent in accordance with
the terms of the Credit Agreement.

 

19.           Administrative Agent Affidavits of Debt Due.    The affidavit of any officer of
Administrative Agent stating that any part of the indebtedness secured hereby
remains unpaid shall constitute conclusive evidence of the validity,
effectiveness, and continuing force of this Assignment, and any person may and
is hereby authorized to rely upon such affidavit.

 

20.           Rights Cumulative. 
  The rights and remedies of Administrative Agent under this
Assignment are cumulative and are not in lieu of, but are in addition to, any
other rights or remedies which Administrative Agent shall have under the Credit
Agreement, the Deed of Trust, or any other Loan Document.

 

21.           Administrative Agent Not Mortgagee-in-Possession.   Nothing herein shall be construed to
constitute Administrative Agent as a “mortgagee-in-possession” in the absence
of its taking actual possession of the Property pursuant to the powers granted
herein or in any other Loan Document or to impose any liability or obligation
on Administrative Agent under or with respect to the Leases and Rents.  Any Rents or any other monies collected by
Administrative Agent in connection with the Property shall be applied by
Administrative Agent to any sums then due the Loan Parties under the Loan
Documents, including any liabilities, losses, damages, claims, demands, costs,
expenses, or fees incurred by Administrative Agent in connection with or
arising from the Loan Documents or the Property, subject to the terms of the
Credit Agreement, in such order as Administrative Agent may elect.

 

22.           Binding Effect. 
  The provisions of this Assignment shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

 

23.           Severability. 
  If any provision under this Assignment shall be invalid, illegal,
or unenforceable, it shall not affect or impair the validity, legality, and
enforceability of any other provision of this Assignment.

 

 

7

 

24.           Amendment. 
  This Assignment may not be amended, modified, or changed, nor
shall any waiver of any provision hereof be effective, except only by an instrument
in writing signed by the party against whom enforcement of any waiver,
amendment, change, modification, or discharge is sought.

 

25.           Captions. 
  The captions and headings in this Assignment are for convenience
only and shall not be considered in interpreting the provisions of this
Assignment.

 

26.           Governing
Law.  This Assignment shall be
governed by and construed in accordance with the laws of the United States and
of the State of Texas.

 

27.           No Construction Against Preparer.   This Assignment has been prepared by
Administrative Agent and its professional advisors and reviewed by Grantor and
its professional advisors. 
Administrative Agent, Grantor, and their separate advisors believe that
this Assignment is the product of all of their efforts, that it expresses their
agreement, and that it should not be interpreted in favor of either
Administrative Agent or Grantor or against either Administrative Agent or
Grantor merely because of their efforts in preparing it.

 

[SIGNATURES
ON FOLLOWING PAGE]

 

 

8

 

IN WITNESS WHEREOF, Grantor has executed this Assignment on the date
first above written.

 

	
  GRANTOR:

  
	
   

  	
   

  
	
  BEHRINGER HARVARD BOWEN
  ROAD LP, a Delaware limited partnership

  
	
   

  	
   

  
	
  By:

  	
  /s/ Gerald J.
  Reihsen, III

  
	
   

  	
  Gerald J.
  Reihsen, III

  
	
   

  	
  Executive Vice
  President — Corporate

  
	
   

  	
  Development &
  Legal and Secretary

  
			

 

	
  STATE OF TEXAS

  	
  §

  
	
   

  	
  §    ss.   Dallas

  
	
  COUNTY OF DALLAS

  	
  §

  

 

The foregoing
instrument was acknowledged before me this
         day of February, 2008, by
Gerald J. Reihsen, III, Executive Vice President - Corporate Development &
Legal Secretary of Behringer Harvard Bowen Road LP, a Delaware limited
partnership, on behalf such partnership.

 

Witness my hand and official seal.

 

	
   

  
	
  Notary Public,
  State of Texas

  	
   

  
	
   

  	
   

  
	
  My commission expires:

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