Document:

Exhibit
10.15

 

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

 

DEED OF TRUST, ASSIGNMENT OF RENTS,

SECURITY AGREEMENT AND FINANCING STATEMENT

 

	
  THE STATE OF
  TEXAS

  	
  §

  	
   

  
	
   

  	
  §

  	
  KNOW ALL MEN
  BY THESE PRESENTS:

  
	
  COUNTY OF
  BEXAR

  	
  §

  	
   

  

 

THAT I, WE, or
EITHER OF US, LANCER PARTNERSHIP, LTD., a Texas limited partnership of the County
of BEXAR, State of TEXAS, sometimes hereinafter called Grantors (whether one or
more) for the purposes of securing the indebtedness hereinafter described, and
in consideration of the sum of TEN DOLLARS ($10.00) to us in hand paid by the
Trustee hereinafter named, the receipt and sufficiency of which is hereby
acknowledged, and for the further consideration of the uses, purposes and the
trusts hereinafter set forth, have GRANTED, SOLD AND CONVEYED, and by these
presents do GRANT, SELL and CONVEY, unto STEVE E. EDLUND Trustee, of International
Bank of Commerce, 130 E. Travis, San Antonio, Bexar County, Texas 78205 and his
substitutes or successors, all of the following described property situated in BEXAR
County, Texas (hereinafter the “Property”), to-wit:

 

THAT CERTAIN
REAL PROPERTY LOCATED IN BEXAR COUNTY, TEXAS BEING MORE PARTICULARLY DESCRIBED
ON EXHIBIT “A” ATTACHED HERETO AND INCORPORATED HEREIN.

 

TO HAVE AND TO
HOLD the above described Property, together with the rights, privileges and appurtenances
thereto belonging unto the said Trustee, and to his substitutes or successors
forever and Grantors do hereby bind themselves, their heirs, executers,
administrators and assigns to warrant and forever defend the said premises unto
the said Trustee, his substitutes or successors and assigns forever, against
the claim or claims, of all persons claiming or to claim the same any part
thereof.

 

This
conveyance, however, is made in TRUST to secure payment of one /Promissory Note
dated of even date, in the principal sum of FIFTEEN MILLION AND NO/ 100 DOLLARS
($15,000,000.00) (the “Note”), executed by the makers of said Note,  LANCER
PARTNERSHIP, LTD., a Texas limited partnership who together with the above
named Grantors, shall hereinafter collectively and interchangeably be referred
to as Grantors, payable to the order of INTERNATIONAL BANK OF COMMERCE,
hereinafter referred to as Beneficiary, in the City of SAN ANTONIO, BEXAR County,
Texas and payable as therein provided, including late charges; bearing interest
as therein stipulated, providing for acceleration of maturity and for
reasonable and necessary attorney’s fees;

 

Should
Grantors do and perform all of the covenants and agreements herein contained,
and make payment of said indebtedness as the same shall become due and payable,
then this conveyance shall become null and void and of no further force and
effect, and shall be released at the expense of Grantors, by the holder
thereof, hereinafter called Beneficiary (whether one or more).

 

Grantors COVENANT
and AGREE as follows:

 

That they are
lawfully seized of said Property, in fee simple absolute, and have the right to
convey the same; that said Property is free from all liens and encumbrances,
except as herein provided.

 

1

 

To protect the
title and possession of said property and to pay when due all taxes and
assessments now existing or hereafter levied or assessed upon said Property, or
the interest therein created by this Deed Of Trust, and to preserve and
maintain the lien hereby created as a first and prior lien on said Property
including any improvements hereafter made a part of the realty.

 

To keep the
improvements on said Property in good repair and condition, and not to permit
or commit any waste thereof; to keep said buildings occupied so as not to
impair the insurance carried thereon.

 

To insure and
keep insured all improvements now or hereafter created upon said Property
against loss or damage by fire and wind-storm, and any other hazard or hazards
as may be reasonably required from time to time by Beneficiary during the term
of the indebtedness hereby secured, to the extent of the total amount of the
indebtedness hereby secured, or to the extent of the full insurable value of
said improvements, whichever is the lesser, in such form and with such
insurance company or companies as may be approved by Beneficiary, and to
deliver to Beneficiary*; any proceeds which Beneficiary may receive under such
policy or policies, may be applied by Beneficiary, at its option, to reduce the
indebtedness hereby secured, whether then matured or to mature in the future,
and in such manner as Beneficiary may elect, or Beneficiary may permit Grantors
to use said proceeds to repair or replace all improvements damaged or destroyed
and covered by said policy.

* such
certificates of insurance as Beneficiary may request;

 

That
Beneficiary may employ counsel for advice or other legal service at Beneficiary’s
discretion in connection with any dispute as to the debt hereby secured or lien
securing same or this instrument, or any litigation or arbitration proceeding
to which the Beneficiary may be made a party on account of this lien or which
may affect the title to the Property on account of this lien or which may
affect the title to the Property securing the indebtedness hereby secured or
which may affect said debt or lien. Any reasonable and necessary attorney’s
fees so incurred shall be added and be part of the debt hereby secured.

 

In addition to
the land and improvements above described, the lien of this Deed Of Trust
covers and includes all abstracts and title papers furnished or to be furnished
in connection with the making of the loan evidenced by said Note, the payment
of which is secured hereby.

 

Grantors agree
to pay on demand for attorney’s fees incurred in connection with either the
closing of the loan secured hereby or the renewal, extension, modification
and/or rearrangement of any part of the indebtedness secured hereby, or, in the
alternative, such amounts expended by Beneficiary shall be added to and be a
part of the debt hereby secured.

 

That in the
event Grantors shall fail to keep the improvements on the Property hereby
conveyed in good repair and condition, or to pay promptly when due all taxes
and assessments, as aforesaid, or to preserve the prior lien of this Deed Of
Trust on said Property or to keep the buildings and improvements insured, as
aforesaid, or to deliver the policy, or policies, of insurance or the renewal
thereof to Beneficiary, as aforesaid, then Beneficiary may, at his option, but
without being required to do so, make such repairs, pay such taxes and
assessments, purchase any tax title thereon, remove any prior liens, and
prosecute or defend any suits in relation to the preservation of the prior lien
of this Deed Of Trust on said Property, or insure and keep insured the
improvements thereon in any amount not to exceed that above stipulated; that
any sums which may be so paid out by Beneficiary, including the costs, expenses
and attorney’s fees paid in any suit affecting said Property when necessary to
protect the lien hereof and all other expenses and costs agreed to be paid by
Grantors under the Deed Of Trust which are not paid when due shall bear
interest from the dates of such payments at the prematurity interest rate
stated in the Note hereby secured, and shall be deemed a part of the debt
hereby secured and recoverable as such in all respects. In addition, in the
event Grantors shall fail to keep the buildings and improvements insured, as aforesaid,
or to deliver the policy or policies, of insurance or the renewal thereof to
the Beneficiary, as aforesaid, the Beneficiary may, at his option, but without
being required to do so, insure and keep insured the improvements thereon in
any amount not to exceed that above stipulated (including without limitation,
to the extent allowed by law, the purchase of Single Interest Insurance which
may provide coverage only for Beneficiary); that all sums paid for insurance
premiums by Beneficiary, as aforesaid, shall bear interest from the dates of
such payments at the prematurity interest rate contracted for in the Note
hereby secured, and shall be paid by Grantors to Beneficiary upon demand, at
the same place at which the above-described Note is payable, and shall be
deemed a part of the debt hereby secured and recoverable as such in all
respects.

 

Grantors
expressly agree annually to furnish Beneficiary upon request validated receipts
or copies of checks evidencing payment of all taxes assessed against, and insurance
covering, the said Property. If Grantors should fail to furnish such receipts,
Beneficiary may require Grantors to deposit monthly with Beneficiary on the
payment dates specified in the Note hereby secured in addition to the monthly
payment of principal and interest provided in the Note hereby secured a sum
equal to 1/12 of the estimated annual taxes and insurance premiums covering
such Property, such estimates to be made by Beneficiary. Beneficiary shall hold
such deposits, without bond and without accrual of interest thereon, to pay
taxes and insurance premiums as they become due, until the indebtedness secured
hereby is fully paid and the balance delivered to Grantors.

 

2

 

All
agreements between any of the parties hereto are hereby limited by these
provisions which shall override all such agreements, whether now existing or
thereafter arising. If from a construction of any document related to any
transaction between Bank, Grantors and/or any other person or entity executing
this Deed Of Trust, any term(s) or provision(s) of any document is in conflict
with applicable law, such document shall be automatically reformed and modified
as to comply with applicable law, without the necessity of execution of any
amendment or new document.

 

That in the
event of default in the payment of any installment, principal or interest, or
of a late charge, of the Note hereby secured, or ** in the payment, when due,
of any other indebtedness secured hereby, in accordance with the terms thereof,
or of a breach of any of the covenants herein contained to be performed by
Grantors then and in any of such events Beneficiary shall, at Beneficiary’s
option, accelerate the maturity of the Note(s) hereby secured and the entire
outstanding and unpaid principal indebtedness hereby secured together with all
accrued and unpaid interest thereon, all accrued and unpaid late charges, fees
and other sums shall thereby become immediately due and payable, and in the
event of default in the payment of said indebtedness when due or declared due,
it shall thereupon, or at any time thereafter, be the duty of the Trustee, or
his successor or substitute as hereinafter provided, at the request of
Beneficiary (which request is hereby conclusively presumed), to enforce this
trust; and after advertising the time, place and terms of the sale of the above
described and conveyed Property, then subject to the lien hereof, for at least
twenty-one (21) days preceding the date of sale by posting written or printed
notice thereof at the County Courthouse and by filing a copy of such notice in
the office of the County Clerk of the county where said Property is situated,
which notice may be posted by the Trustee acting, or by any person acting for
him, and the Beneficiary (the holder of the indebtedness secured hereby) has,
at least twenty-one (21) days preceding the date of sale, served written or
printed notice of the proposed sale by certified mail on each person and/or
entity(s) obligated to pay the indebtedness secured by this Deed Of Trust
according to the records of Beneficiary by the deposit of such notice, enclosed
in a postpaid wrapper, properly addressed to such person(s) and/or entity(s) at
such person’s and/or entity(s) most recent address as shown by the records of
Beneficiary, in a post office or official depository under the care and custody
of the United States Postal Service, the Trustee shall sell the above described
property, then subject to the lien hereof, at public auction in accordance with
such notice at the Courthouse of said county where such Property is situated
(provided where said Property is situated in more than one county, the notice
to be posted as herein provided shall be posted at the Courthouse of each of
such counties, and filed with the County Clerk of each of such counties where
said Property is situated, and said above described and conveyed Property may
be sold at the Courthouse of anyone of such counties, and the notices so posted
and filed shall designate the county where the Property will be sold), on the
first Tuesday in any month between the hours of ten 0’ clock A.M. and four o’clock
P.M., to the highest bidder for cash, selling all of the Property as an
entirety or in such parcels as the Trustee acting may elect and make due
conveyance to the Purchaser or Purchasers, with general warranty binding
Grantors, their heirs and assigns; and of the money arising from such sale, the
Trustee acting shall pay first, all the expenses of advertising the sale and
making the conveyance, including a reasonable commission to himself, which
commission shall be due and owing in addition to the attorney’s fees provided
for in said Note, and then to Beneficiary the full amount of principal,
interest, attorney’s fees and late charges due and unpaid on said Note and all
other indebtedness secured hereby, rendering the balance of the sales price, if
any, to Grantors, their heirs or assigns; and the recitals in the conveyance to
the Purchaser or Purchasers shall be full and conclusive evidence of the truth
of the matters therein stated, and all prerequisites to said sale shall be
presumed to have been performed, and such sale and conveyance shall be
conclusive against Grantors, their heirs and assigns.

 

** which is
not cured within any applicable cure period

 

Beneficiary
may remedy any default, without waiving same, or may waive any default without
waiving any prior or subsequent default.

 

It is agreed
that in the event a foreclosure hereunder should be commenced by the Trustee,
or his substitute or successor, Beneficiary may at any time before the sale of
said Property, direct the said Trustee to abandon the sale, and may then
institute suit for the collection of said Note, and for the foreclosure of this
Deed Of Trust lien; it is further agreed that if the Beneficiary should
institute a suit for the collection thereof, and for a foreclosure of this Deed
Of Trust lien, that he may at any time before the entry of a final judgment in
said suit dismiss same and require the Trustee, his substitute or successor, to
sell the Property in accordance with the provisions of this Deed Of Trust.

 

Beneficiary
shall have the right to purchase at any sale of the Property, being the highest
bidder, and to have the amount for which such Property is sold credited on the
debt secured hereby.

 

Beneficiary,
in any event, is hereby authorized to appoint a substitute trustee, or a
successor trustee, to act instead of the Trustee named herein without other
formality than the designation in writing of a substitute or successor trustee;
and the authority hereby conferred

 

3

 

shall extend to the appointment of other successor and substitute
trustees successively until the indebtedness hereby secured has been paid in
full, or until said Property is sold hereunder, and each substitute and
successor trustee shall succeed to all the rights and powers of the original
trustee named herein.

 

In the event
any sale is made of the above described Property, or any portion thereof, under
the terms of this Deed Of Trust, Grantors, their heirs and assigns, shall
forthwith upon making of such sale surrender and deliver possession of the
Property so sold to the Purchaser at such sale, and in the event of their
failure to do so they shall thereupon from and after the making of such sale be
and continue as tenants at will of such Purchaser, and in the event of their
failure to surrender possession of said Property upon demand, the Purchaser,
his heirs or assigns, shall be entitled to institute and maintain an action for
forcible detainer of said Property in the Justice of the Peace Court in the
Justice Precinct in which such Property, or any part thereof, is situated.

 

Grantors agree
that any resale by Beneficiary of the Property described in this Deed Of Trust
after foreclosure may be made for a price below the fair market value (i.e. at
wholesale) and that Beneficiary is not required to re-sell the Property for a
price equal to or above fair market value (i.e. retail). Grantors agree that
the sales price obtained by Beneficiary at any such resale will not be used in
determining the fair market value of the Property for the purposes of
determining value under Section 51.003 of the Texas Property Code.

 

To the
greatest extent permitted by law, Grantors hereby waive all rights and remedies
created under Section 51.003 of the Texas Property Code including, without
limitation, the right introduce evidence of the amount of the sales price of
the Property sold by Beneficiary following any foreclosure of the liens
pursuant to the terms of this Deed Of Trust.

 

It is agreed
that the lien hereby created shall take precedence over and be a prior lien to
any other lien of any character whether vendor’s, materialmen’s, or mechanic’s
lien hereafter created on the above described Property, and in the event the
proceeds of the indebtedness secured hereby as set forth herein are used to
payoff and satisfy any liens heretofore existing, on said Property, then
Beneficiary is, and shall be, subrogated to all of the rights, liens and
remedies of the holders of the indebtedness so paid.

 

It is further
agreed that if Grantors, their heirs or assigns, while the owner of the
hereinabove described property, should commit an act of bankruptcy, or
authorize the filing of a voluntary petition in bankruptcy; or should an act of
bankruptcy be committed and involuntary proceedings instituted or threatened,
or should the Property hereinabove described be taken over by a Receiver for
Grantors, their heirs or assigns, the Note hereinabove described may, at the
option of Beneficiary, immediately become due and payable, and the acting
Trustee may then proceed to sell same under the provisions of this Deed Of
Trust.

 

Grantors
hereby transfer and assign unto Beneficiary, to be applied on the debt secured
hereby: (a) all eminent domain or condemnation award moneys which may hereafter
be awarded or paid for the condemnation of the hereinabove described Property,
or any part thereof or for any portion of the premises which may be appropriate
for any public or quasi-public use, or by virtue of private sale in lieu
thereof and any sums which may be awarded or become payable to Grantors for
damages caused by public works or construction on or near the Property; (b) all
the bonuses, rents, royalties, damages and delay moneys that may be due or that
may hereafter become due and payable to the Grantors or their assigns under any
oil, gas, mining or mineral lease or leases of any kind now existing, or which
may hereafter come into existence (including agricultural and/or hunting
contracts of every kind) covering the above-described Property or any part
thereof; (c) all proceeds from the sale of crops grown on the Property, as well
as all pasturage and/or grazing or hunting fees. Grantors authorize and direct
payment of such money to said Beneficiary until the debt secured hereby is
paid. Such money may, at the option of the Beneficiary, be applied on the debt
whether due or not. The Beneficiary shall not be obligated, in any manner to
collect said moneys or any part thereof, and shall be responsible only for
amounts received by the Beneficiary. Nothing herein contained shall be
construed as a waiver or prejudice to the priority of this lien or the options
hereunder in favor of said Beneficiary.

 

It is agreed
that an extension, or extensions, may be made as to the time of payment of all,
or part, of the indebtedness secured hereby, 
and that any part of the above described Property may be released from
this lien without altering or affecting the priority of the lien created by
this Deed Of Trust in favor of any junior encumbrance, mortgage or purchaser,
or any person acquiring an interest in the Property hereby conveyed, or any
part thereof; it being the intention of the parties hereto to preserve this
lien on the Property herein described and all improvements thereon; and that
may be hereafter constructed thereon, first and superior to any liens that may
be placed thereon, or that may be fixed, given or imposed by law thereon after
the execution of this instrument notwithstanding any such extension of the time
of payment, or the release of a portion of said Property from this lien.

 

In the event
any portion of the indebtedness hereinabove described cannot be lawfully
secured by this Deed Of Trust lien on said Property, it is agreed that the
first payments made on said indebtedness shall be applied to the discharge of
that portion of said indebtedness.

 

Nothing
contained herein or in the Note shall ever entitle Beneficiary, upon the
arising of any contingency whatsoever, to receive or collect interest in excess
of the highest rate allowed by the laws of the State of Texas or to the extent
Federal Law permits a greater rate, then such greater rate, on the principal
indebtedness hereby secured or on any money obligation hereunder and in no
event shall Grantors be obligated to pay interest thereon in excess of such
rate.

 

If this Deed
Of Trust is executed by only one person or by a corporation, the plural
reference to Grantors shall be held to include the singular and all of the
covenants and agreements herein undertaken to be performed by and the rights
conferred upon the respective Grantors name herein, shall be binding upon and
inure to the benefit of not only said parties respectively but also their
respective heirs, executors, administrators, grantees, successors and assigns.

 

In the event
that the hereinabove described Property is sold, conveyed, or otherwise
disposed of without the prior written consent of the Beneficiary, the maturity
of the outstanding and unpaid principal, all accrued and unpaid interest, all
accrued and unpaid late charges, and other fees and/or charges arising out of
said Note or hereunder may, at the option of the Beneficiary, be accelerated
and the Beneficiary may immediately demand payment of the then outstanding and
unpaid principal sum, together with all accrued and unpaid interest due
thereon, and all accrued and unpaid late charges, and other fees and/or charges
then due and owing.

 

In the event
Grantors should seek a temporary restraining order or an injunction or other
legal action, be it temporary or permanent, to prevent, hinder or delay the
exercise by Beneficiary of its rights and remedies under this Deed Of Trust,
including, without limitation, its foreclosure rights, upon the occurrence of
as default, as herein provided, then Grantors agree to pay and/or reimburse
Beneficiary for all costs and expenses, including its reasonable and necessary
attorney’s fees, incurred by Beneficiary in connection with its

 

4

 

defense,
appearance and/or other action taken by Beneficiary with respect thereto, such
payment and/or reimbursement to be made*** Grantors agree to contact, in
writing, Dennis E. Nixon, prior to the institution of any such legal or arbitration
proceedings so as to permit Beneficiary the opportunity to appear and defend
itself.

 

*** by
Beneficiary unless Beneficiary obtains a final, non-appealable judgment in
favor of Beneficiary.

 

It shall be an
event of default under this Deed Of Trust should Grantors, or any of them or
any guarantor, fail to timely deliver any and all financial statements, income
tax returns, inventory reports, cash flow information, accounts receivable
reports, or any other business, tax or financial information requested by
Beneficiary.

 

Grantors
hereby grant Beneficiary the right to protest any and all ad valorem taxes and
special assessments made against the Property covered by this Deed Of Trust. In
that regard, Grantors shall deliver to Beneficiary a true and correct copy,
when received, of all tax assessments, valuations, re-appraisals and other
notices received by Grantors from all tax authorities. Beneficiary shall have
the right to appear in all tax proceedings and file appeals concerning taxes
affecting the Property or any portion thereof.

 

Grantors
expressly represent that this Deed Of Trust and the Note hereby secured are
given for the following purpose, to-wit:

 

TO PROVIDE A SOURCE OF WORKING CAPITAL FOR GRANTORS.

 

To the extent
allowed by law, this conveyance is also made in trust to secure and enforce the
payment of any and all other indebtedness of Grantors to Beneficiary presently
existing or which may in any manner or means hereafter be incurred or created
by Grantors, which other or future indebtedness Grantors acknowledge to be
currently contemplated by Grantors and evidenced in any manner whatsoever,
including without limitation:

 

A.                                   any commercial loan
or indebtedness;

B.                                     any credit card or
other consumer type of loan;

C.                                     any indebtedness
relating to checking or savings accounts (overdrafts, fees, etc.);

D.                                    any expenses
incurred in the protection or maintenance of the collateral securing any of
such liabilities, loans, and obligations;

E.                                      any expenses
incurred in the collection of any indebtedness and/or obligation of the
Grantors to Lender whether arising out of this agreement or otherwise;

F.                                      any letters of
credit and/or indebtedness arising out of, or advanced to pay, letters of
credit transactions;

G.                                     any indebtedness,
however evidenced, whether by promissory note, bookkeeping entry, electronic
transfer or by any other manner or form;

H.                                    any other
indebtedness of Grantors to any financial institution affiliated with
International Bancshares Corporation, jointly and/or severally, and in any
capacity, whether as maker, guarantor, or otherwise, now or hereafter owing and
regardless of how evidenced or arising; and

I.                                         any and all
extensions, modifications, substitutions and/or renewals of any of such
indebtedness.

 

To the extent
allowed by law, for purposes hereof it is intended that the indebtedness
include all classes of indebtedness, whether evidenced by notes, open accounts,
overdraft, or otherwise, and whether direct, indirect or contingent, regardless
of class, form or purpose and including but not limited to, loans for consumer,
agricultural, business or personal purposes. The indebtedness does not include
amounts owing pursuant to a homestead loan, homestead equity loan and/or home
equity line of credit.

 

It being
expressly agreed and understood that any and all sums now owed to or hereafter
advanced by Beneficiary to Grantors shall be payable at the main offices of
Beneficiary at 130 E. Travis, San Antonio, Bexar County, Texas 78205, and shall
bear interest as may be provided in such notes or other evidences of
indebtedness given by Grantors to Beneficiary; and this instrument is also
executed for the purpose of securing and enforcing the payment of any renewal,
extension and/or modification of any note or of any part of the said
indebtedness of Grantors and including any further loans and advancements made
by Beneficiary to Grantors. Repayment of all indebtedness of Grantors to
Beneficiary shall not terminate this Deed Of Trust unless the same be so
released by Beneficiary at the request of Grantors, but otherwise it shall
remain in full force and effect to secure all future advances and indebtedness,
regardless of any additional security that may be taken as to any past or
future indebtedness, and shall be unaffected by any renewals, extensions or partial
releases hereunder.

 

GRANTORS WILL
NEITHER CREATE NOR PERMIT ANY JUNIOR OR SUBSEQUENT LIEN OR ENCUMBRANCE AGAINST
THE PROPERTY WITHOUT PRIOR WRITTEN CONSENT OF BENEFICIARY.

 

Applicable to
Prior Liens. If this Deed Of Trust is or becomes
subordinate to any other liens, security interests, assignments of leases or
rents or any other encumbrances (collectively, the “Prior Liens”) affecting any
of the Property, all documents creating the Prior Liens and evidencing and
governing the indebtedness secured shall be collectively called the “Prior Lien
Documents” and this section shall

 

5

 

apply.
Grantors shall not enter into any renewal, extension, modification, increase or
refinancing of any of the Prior Lien Documents or the indebtedness secured
thereby without prior written consent of Beneficiary. Grantors shall pay when
due all indebtedness evidenced and secured by the Prior Lien Documents and
shall timely perform all other obligations of the Grantors under the Prior Lien
Documents. Beneficiary may, but shall not be obligated to, pay any such
indebtedness or perform any such obligations for the account of Grantors and
any sum so expended shall be secured hereby. Grantors shall pay to Beneficiary
all amounts so expended by Beneficiary with interest on such amounts from the
date and at the rate set forth in the Note, but not in excess of the highest
rate permitted by applicable law. Beneficiary’s cure of any default under any
of the Prior Lien Documents shall not constitute a cure of the default under
this Deed Of Trust. Grantors shall send to Beneficiary a copy of each notice of
default or notice of acceleration or other notice received by Grantors from the
holder of any of the Prior Lien Documents within one (I) business day after
receipt thereof by Grantors. Notwithstanding the foregoing, Beneficiary does
not consent to any Prior Lien unless otherwise expressly permitted in this Deed
Of Trust.

 

Security
Agreement/Financing Statement. This Deed Of Trust lien
shall cover all property now or hereafter affixed or attached or incorporated
into the Property, described herein and now or hereafter owned by Grantors in
which Grantors now or hereafter have an interest which, to the fullest extent
permitted by law, shall be deemed fixtures and part of the Property. In
addition, this Deed Of Trust lien shall cover, and Grantors to the extent of
any present or hereafter created rights of Grantors in such Property hereby
grant to Beneficiary, a security interest in (i) all building materials,
fixtures, equipment and other personal property, to be incorporated into any
improvements constructed on the premises; (ii) all goods, materials, supplies,
fixtures, equipment, machinery, furniture and furnishings and other personal
property which are now or may hereafter be appropriated for use on (whether
such items are stored on the premises or elsewhere), located on or used in
connection with the premises; (iii) all rents, issues and profits, proceeds,
profits, renewals, income or other benefit derived from the payments received
for lodging from interests and/or materials, and all inventory, accounts,
accounts receivable, contract rights, general intangibles, intellectual
property, chattel paper, instruments, documents, permits, plans, specifications,
drawings, governmental approvals, notes, drafts, letters of credit,
indebtedness arising from and/or to pay an advance on letters of credit,
accounts due from credit, debit and/or charge card companies, insurance
policies, insurance condemnation awards and proceeds, trade names, trademarks
and service marks arising from or related to the premises and any business
conducted on the premises by Grantors; and (iv) all replacements and
substitutions for or additions to, all products and proceeds of, and all books,
records and files relating to any of the foregoing. To the extent any property
covered by this Deed Of Trust lien consists of rights in action or personal
property covered by the Texas Business And Commerce Code, this Deed Of Trust
lien constitutes a security agreement and is intended to create a security
interest in such property in favor of Beneficiary. This Deed Of Trust shall be
self-operative with respect to such property, and in the event of default
and/or acceleration of the indebtedness hereby secured, Grantors expressly
grant to Beneficiary the right to enter upon the Property where the collateral
is located for the purpose of enforcing its right to such collateral, and
Grantors agree to execute and deliver, on demand, such security agreements,
financing statements and other instruments as Beneficiary may request in order
to impose the lien hereof made more specifically upon any of such property. If
the lien of this Deed Of Trust on any property shall be subject to prior
security agreement covering such property, then in the event of any default
hereunder, all the rights, title and interest of Grantors in and to any and all
deposits made in connection with the transaction whereby such prior security
agreement was made are hereby presently assigned to Beneficiary, together with
the benefit of any payments now or hereafter made in connection with such
transaction.

 

Financing
Statements. In addition to Beneficiary’s other rights
set forth in this Deed Of Trust, Beneficiary shall have all rights of a secured
party under the Texas Business And Commerce Code (the “Code”). At Beneficiary’s
request, Grantors shall execute and deliver to Beneficiary all financing
statements that may be required by Beneficiary to establish and maintain the
validity and priority of Beneficiary’s security interest, and Grantors shall
bear all costs thereof, including all searches reasonably required by
Beneficiary. If Beneficiary should dispose of any of the property covered by
the security interest created under this Deed Of Trust pursuant to the Code,
ten (10) days written notice by Beneficiary to Grantors shall be deemed to be
reasonable notice; provided however, Beneficiary may dispose of such property
in accordance with the foreclosure procedures of this Deed Of Trust in lieu of
proceeding under the Code.

 

(i)                            Grantors
hereby authorize Beneficiary to file a Financing Statement, an Amended
Financing Statement and a Continuation Financing Statement (collectively
referred to as the “Financing Statement”) describing the Collateral.

 

(ii)                           Grantors
hereby authorize Beneficiary to file a Financing Statement describing any
agricultural liens or other statutory liens held by Beneficiary.

 

(iii)                          Grantors
shall receive prior to the Closing an official report from the Secretary of
State of each Collateral State, the Chief Executive Office State, and the
Debtor State (each as defined below) (the “SOS Reports”) indicating that
Beneficiary’s security interest is prior to all other security interests or
other interests reflected in the report.

 

(iv)                          Beneficiary
shall receive at any time following the Closing an SOS Report indicating that
Beneficiary’s security interest is prior to all other security interests or
other interests reflected in the report.

 

Beneficiary
may sell, lease, or otherwise dispose of any of the personal property in accord
with the rights, remedies, and duties of a Beneficiary under Chapters 2 and 9
of the Texas Business And Commerce Code after giving notice as required by
those chapters; unless the Collateral threatens to decline rapidly in value, is
perishable, or would typically be sold on a recognized market, Beneficiary will
give Grantors reasonable notice of any public sale of the Collateral or of a
time after which it may be otherwise disposed of without further notice to
Grantors; in this event, notice will be deemed reasonable if it is mailed,
postage prepaid, to Grantors at the address specified in this agreement at
least ten days before any public sale or ten days before the time when the
Collateral may be otherwise disposed of without further notice to Grantors.
Grantors authorize Beneficiary to disclaim or modify any and all warranties set
forth in Section 9.610(d) of the Texas Business And Commerce Code and
stipulate and agree that such a disclaimer and/or modification will not render
the sale commercially unreasonable. Beneficiary may retain all or part of the
Collateral in full and/or partial satisfaction of the Indebtedness pursuant to Section 9.620
of Texas Business And Commerce Code.

 

Without providing Beneficiary with at least thirty (30) days prior
written notice of Grantors’ intention to do so, Grantors, until the
indebtedness is paid in full, agree that they will not:

 

a                                          in one
transaction or a series of related transactions, merge into or consolidate with
any other entity, sell all or substantially all of its assets, or in any way
jeopardize its corporate existence,

b                                         change the
state of its incorporation,

c                                          change its
corporate name,

 

6

 

d.                                      change the
address and/or location of its Chief Executive Office

e.                                       file a UCC-I
Amendment form, and/or

f.                                         file a UCC-I
Termination form.

 

Grantors shall
give advance notice in writing to Beneficiary of any proposed change in
Grantors’ name, identity, or structure and shall execute and deliver to
Beneficiary, prior to or concurrently with the occurrence of any such change,
all additional financing statements that Beneficiary may require to establish
and maintain the validity and priority of Beneficiary’s security interest with
respect to any of the property described or referred to herein.

 

Grantors
expressly represent that the Property hereinabove mentioned and conveyed to the
Trustee forms no part of any property owned, used or claimed by Grantors as
exempted from forced sale under the law of the State of Texas as either
personal or business homestead, and Grantors renounce all and every Claim
thereto under any such law or laws and hereby expressly designate as their
homestead, personal and business, and as constituting all the property owned,
used or claimed by them as exempt either as personal and/or business under such
laws the following described property:

 

	
   

  	
  County,
  Texas.

  
	
  (Personal And Business Homestead)

  	
   

  

 

Assignments of
Rents, Profits, etc. All of the rents, royalties,
bonuses, issues, contracts for deed, proceeds, profits, revenue, income and any
other benefit derived from the Property and improvements thereto, or arising
from the use or enjoyment of any portion thereof or from any lease or agreement
pertaining thereto and liquidated damages following default under such leases,
and all proceeds payable under any policy of insurance covering loss of rents
or caused by damage to any part of the Property, together with any and all
rights that Grantors may have against any tenant with any and all rights that
Grantors may have against any tenant under such leases or any subtenants or
occupants of any part of the Property (hereinafter called the “Rents”), are
hereby absolutely and unconditionally assigned to Beneficiary. Prior to a
default in payment by Grantors of any portion of the indebtedness secured by
this Deed Of Trust (the “Indebtedness”) or breach of any covenant,
representation or warranty made herein by Grantors (collectively, an “Event of Default”),
Grantors shall have a license to collect and receive all Rents as Trustee for
the benefit of Beneficiary and Grantors, and Grantors shall apply the funds so
collected first to the payment of the Indebtedness in such manner as
Beneficiary elects and thereafter to the account of Grantors. The foregoing
assignment is intended to be absolute, unconditional and presently effective.
It shall never be necessary for Beneficiary to institute legal proceedings of
any kind to enforce the terms of this assignment.

 

Assignment of
Leases. Grantors hereby assign to Beneficiary all
existing and future leases, including subleases thereof, and any and all
extensions, renewals, modifications, and replacements thereof, upon any part of
the Property (the “Leases”). Grantors hereby further assign to Beneficiary all
guaranties of tenants’ performance under the Leases. Prior to an Event of
Default, Grantors shall have the right, without joinder of Beneficiary, to
enforce the Leases, unless Beneficiary directs otherwise.

 

Warranties Concerning
Leases and Rents. Grantors represent and warrant that:
(a) Grantors have good title to the Leases and Rents hereby assigned and
authority to assign them, and no other person or entity has any right, title or
interest therein; (b) all existing Leases are valid, unmodified and in full
force and effect, except as indicated herein, and no default exists thereunder;
(c) unless otherwise provided herein, no Rents have been or will be assigned,
mortgaged or pledged; (d) no Rents have been or will be anticipated, waived,
released, discounted, set-off or compromised; and (e) Grantors have not
received any funds or deposits from any tenant for which credit has not already
been made on account of accrued Rents.

 

Grantor’s
Covenants of Performance as to Leases. Grantors
covenant to: (a) perform all of their obligations under the Leases and give
prompt notice to Beneficiary of any failure to do so; (b) give immediate notice
to Beneficiary of any notice Grantors received from any tenant or subtenant
under any leases, specifying any claimed default by any party under such
Leases, excluding, however, notice of defaults under residential leases; (c)
enforce the tenant’s obligations under the Leases; (d) defend, at Grantor’s
expense, any proceeding pertaining to the Leases, including, if Beneficiary so
requests, any such proceeding to which Beneficiary is a party; and (e) neither
create nor permit any encumbrance upon its interest as lessor of the Leases,
except this Deed Of Trust and any other encumbrances permitted by this Deed Of
Trust.

 

Prior Approval
for Action Affecting Leases. Grantors shall not,
without the prior written consent of Beneficiary, receive or collect Rents more
than one month in advance, encumber or assign future Rents, waive or release
any obligations of any tenant under the Leases, cancel, terminate or modify any
of the Leases, cause or permit any cancellation, termination or surrender of
any of the Leases, or commence any proceedings for dispossession of any tenant
under any of the Leases, except upon default by the tenant thereunder, or
permit any assignment of the Leases whereby a tenant is released from its
obligation.

 

Rejection of
Leases in Bankruptcy. Grantors agree that no
settlement for damages for termination of any of the Leases under the Federal
Bankruptcy Code, or under any other federal, state, or local statute, shall be
made without the prior written consent of Beneficiary, and any check in payment
of such damages shall be made payable to both Grantors and Beneficiary.
Grantors hereby assign any such payment to Beneficiary, to be applied to the
Indebtedness as Beneficiary may elect, and agree to endorse any check for such
payment to the order of Beneficiary.

 

Beneficiary’s
Rights. Beneficiary’s acceptance of this assignment
shall not, prior to, upon, or after entry upon and taking possession of the
Property by Beneficiary or any foreclosure of the lien hereunder or conveyance
of the Property herein described in lieu thereof, be deemed to constitute
Beneficiary as a “mortgagee in possession”, nor obligate Beneficiary to appear
in or defend any proceeding relating to any of the Leases or to the Property,
take any action hereunder, expend any money, incur any expenses or perform any
obligation or liability under the Leases, or assume any obligation or liability
under the Leases, or assume any obligation including security deposits.
Beneficiary shall not be liable for any injury or damage to any person or
property in or about the Property. Beneficiary shall not be obligated to
perform, satisfy, or otherwise adhere to any terms of any of the Leases or any
covenant of Grantors to any tenant unless Beneficiary agrees to do so, in
writing, executed by Beneficiary, which Beneficiary may elect not to do so, in
its sole and absolute discretion.

 

Appointment of
Attorney-In-Fact. Grantors hereby appoint Beneficiary
its attorney-in-fact, coupled with an interest, empowering Beneficiary to
subordinate any Leases to this Deed Of Trust.

 

Indemnification.
Grantors hereby indemnify and hold Beneficiary harmless from all liability,
damage, or expense incurred by

 

7

 

Beneficiary
from any claims under the Leases, including, without limitation, claims by
tenants for security deposits or for rental payments more than one (1) month in
advance and not delivered to Beneficiary. All amounts indemnified hereunder,
including reasonable attorney’s fees, if paid by Beneficiary shall bear
interest at the maximum lawful rate and shall be payable by Grantors
immediately without demand and shall be secured hereby.

 

Records. Etc.
Upon request by Beneficiary, Grantors shall deliver to Beneficiary executed
originals of all Leases and copies of all records relating thereto. There shall
be no merger of the leasehold estates, created by the Leases, with the fee
estate of the Mortgaged Property without the prior written consent of
Beneficiary. Upon default, Grantors hereby authorize and direct the tenants
under the Leases to pay Rents to Beneficiary upon written demand by
Beneficiary, without further consent of Grantors, and the tenants may rely upon
any written statement delivered by Beneficiary to the tenants. Any such payment
to Beneficiary shall constitute payment to Grantors under the Leases.

 

Fixtures.
Some of the items on the Property are goods that are or are to become fixtures
related to said Property, and it is intended that, as to those goods, this Deed
Of Trust shall be effective as a financing statement filed as a fixture filing
from the date of its filing of record in the real estate records of the county
in which the Property is situated. Information concerning the security interest
created by this instrument may be obtained from Beneficiary, as secured party,
at the address of Beneficiary set forth elsewhere in this Deed Of Trust. The
mailing address of the Grantors, as Debtor, is as stated herein.

 

Environmental
Compliance. Grantors’ use of the Property will at all
times comply with all laws, statutes, ordinances, rules and regulations (“Laws”)
of any governmental, quasi-governmental or regulatory authority which relate to
the transportation, storage, placement, handling, treatment, discharge,
generation, production, removal or disposal (collectively, “Treatment”) of any
waste, petroleum product (including, without limitation, gasoline and diesel
fuel), waste products, poly-chlorinated biphenyl, asbestos hazardous materials,
and/or any other substance, the Treatment of which is regulated by any laws
(collectively, “Waste”). Grantors will comply with all Laws regarding
underground storage tanks used to hold gasoline, diesel fuel, or any other
petroleum products on the Property.

 

To the best of
Grantors’ knowledge, no Waste is located on the Property, and neither Grantors
nor, to the best of Grantors’ knowledge, any other person has ever caused or
permitted any Treatment of any Waste on, under or at the Property or any part
thereof, and to the best of Grantors’ knowledge, no property adjoining the
Property is being used, or has ever been used at any previous time for the
Treatment of Waste.

 

To the best of
Grantors’ knowledge, no investigation, administrative order, consent order and
agreement, litigation or settlement, with respect to Waste or the Treatment of
Waste is proposed, threatened, anticipated or in existence with respect to the
Property. The Property is not currently on, and to Grantors’ knowledge, after
diligent investigation and inquiry, has never been on, any federal or state “Superfund”
or “Superlien” list.

 

Grantors agree
to (a) give notice to Beneficiary immediately upon Grantors acquiring knowledge
of any Waste on the Property with a full description thereof; (b) promptly
comply with any laws applicable to Grantors or the Property requiring the
removal, treatment or disposal of such Waste and provide Beneficiary with satisfactory
evidence with such compliance; and (c) provide Beneficiary within thirty (30)
days after demand by Beneficiary with a bond, letter of credit or similar
financial assurance evidencing to Beneficiary’s satisfaction that the necessary
funds are available to pay the cost of removing, treating and disposing of such
Waste and discharging of any assessments that may be established on the
Property as a result thereof.

 

Any
environmental spill, discharge or other event upon or adjacent to the Property
which Beneficiary determines materially and adversely affects the value and/or
use of the Property, shall be an Event of Default under this Deed Of Trust and
the Note and all other indebtedness secured hereby.

 

Grantors agree
to perform an asbestos survey and obtain a permit, and to provide a copy of
said survey to Beneficiary, prior to commencing any renovation and/or
demolition of a public or commercial building. Grantors further agree to comply
with all other state and federal statutes and/or regulations regarding asbestos
and asbestos removal.

 

Site
Assessments. Beneficiary (by its officers, employees
and agents) at any time and from time to time, either prior to or after the
occurrence of any default, may contract for the services of any person or firm
(“Site Reviewers”) to perform environmental site assessments (“Site Assessments”)
on the Property for the purposes of determining whether there exists on the
Property any environmental condition which could reasonably be expected to
result in any liability, cost or expense to the owner, occupier or operator of
such Property arising under any Laws relating to Waste or the Treatment of
Waste. The Site Assessments may be performed at any time or times, upon
reasonable notice, and under reasonable conditions established by Grantors
which do not impede the performance of the Site Assessments. Grantors agree
that any Site Assessment shall be for the sole and exclusive use, benefit and
reliance of Beneficiary in assessing the value of its security interest in the
Property and will not be relied on by Grantors for any purpose. The Site
Reviewers are hereby authorized to enter upon the Property for such purposes.
The Site Reviewers are further authorized to perform above and below ground
testing for environmental damage or the presence of waste on the Property and
such other tests on the Property as may be necessary to conduct the Site
Assessments in the reasonable opinion of the Site Reviewers. Grantors will
supply to the Site Reviewers such historical and operational information
regarding the Property as may be reasonably requested by the Site Reviewers to
facilitate the Site Assessments and will be available for meetings with Site
Reviewers if requested.

 

Indemnification.
Whether or not any Site Assessments are conducted, and regardless of whether or
not a default occurs under this Deed Of Trust or under the Note or under any
other indebtedness secured hereby and regardless of whether any remedies in
respect of the Property are exercised by Beneficiary, Grantors will defend,
indemnify and hold harmless Beneficiary and Trustee from any and all
liabilities (including strict liability), actions, demands, penalties, losses,
costs or expenses (including, without limitation, attorneys fees and expenses,
and remedial costs), suit costs of any settlement or judgment and claims of any
and every kind whatsoever which may now or in the future (whether before or
after the release or foreclosure of this Deed Of Trust) be paid, incurred or
suffered by or asserted against Beneficiary or Trustee by any person or entity
or governmental agency for, with respect to, or as a direct or indirect result
of, the presence on or under, or the escape, seepage, leakage, spillage,
discharge, emission or release from, on or affecting the Property of any waste
or any spill, or which arise out of or result from the environmental condition
of the Property or the applicability of any laws relating to the waste
(including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 V.S.C. 9601 et seq., as arises from time to

 

8

 

time, or any
federal, state or local so-called “Superfund” or “Superlien” law, statute, law,
ordinance, code, rule, regulation, order or decree), regardless of whether or
not caused by or within the control of Grantors, Beneficiary or Trustee. The
representations, covenants, warranties an indemnification herein contained
shall survive the release and/or judicially or non-judicial foreclosure (or
transfer in lieu thereof) of the lien of this Deed Of Trust. For the purpose of
this paragraph and notwithstanding any other provision contained herein to the
contrary, the term “Grantors” shall refer not only to the Grantors not only to
the Grantors named herein, but also to all other person who may hereafter
assume to the Note and the obligations of this

Deed Of
Trust.

 

ARBITRATION.

 

GRANTORS,
BENEFICIARY AND TRUSTEE FURTHER AGREE AS FOLLOWS:

 

I.                                         CONSUMER-RELATED
CLAIMS OF $75,000.00 OR LESS IN ACTUAL DAMAGES:

 

(a)                                  WITH
REGARD TO ALL CONSUMER-RELATED CLAIMS OF $75,000.00 OR LESS IN ACTUAL DAMAGES, ANY
AND ALL CONTROVERSIES OR CLAIMS ARISING OUT OF THIS CONTRACT, ITS NEGOTIATION
AND/OR THE BREACH THEREOF, SHALL BE SETTLED BY ARBITRATION ADMINISTERED BY THE
AMERICAN ARBITRATION ASSOCIATION UNDER ITS SUPPLEMENTAL PROCEDURES FOR
RESOLUTION OF CONSUMER-RELATED DISPUTES AND CONSUMER DUE PROCESS PROTOCOL
(WHICH ARE INCORPORATED HEREIN FOR ALL PURPOSES), AND JUDGMENT ON THE AWARD
RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY COURT HAVING JURISDICTION
THEREOF. IT IS INTENDED BY ALL PARTIES THAT THIS ARBITRATION CLAUSE MEET AND
INCLUDE ALL FAIRNESS STANDARDS AND PRINCIPLES OF THE AMERICAN ARBITRATION
ASSOCIATION’S CONSUMER DUE PROCESS PROTOCOL AND DUE PROCESS IN PREDISPUTE
ARBITRATION.

 

(b)                                  INSTEAD
OF PROCEEDING IN ARBITRATION, ANY PARTY HERETO MAY PURSUE ITS CLAIM IN THE
CONSUMER’S LOCAL SMALL CLAIMS COURT, IF THE CONSUMER-RELATED CLAIM MEETS THE
SMALL CLAIMS COURT JURISDICTIONAL LIMITS. IF THE SMALL CLAIMS COURT OPTION IS
CHOSEN, THE PARTY MUST CONTACT THE SMALL CLAIMS COURT DIRECTLY.

 

(c)                                  THE
PARTIES FURTHER AGREE THAT (i) NO ARBITRATION PROCEEDING HEREUNDER SHALL BE
CERTIFIED AS A CLASS ACTION OR PROCEED AS A CLASS ACTION, OR ON A BASIS
INVOLVING CLAIMS BROUGHT IN A PURPORTED REPRESENTATIVE CAPACITY ON BEHALF OF
THE GENERAL PUBLIC, OTHER CUSTOMERS OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY
SITUATED AND (ii) NO ARBITRATION PROCEEDING HEREUNDER SHALL BE CONSOLIDATED
WITH, OR JOINED IN ANY WAY WITH, ANY OTHER ARBITRATION PROCEEDING ‘

 

(d)                                  THIS
ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION, AMENDMENT, OR EXPIRATION OF
THE AGREEMENT IN WHICH THIS PROVISION IS CONTAINED, UNLESS ALL OF THE PARTIES
OTHERWISE EXPRESSLY AGREE IN WRITING

 

(e)                                  THE
PARTIES ACKNOWLEDGE THAT THIS AGREEMENT EVIDENCES A TRANSACTION INVOLVING
INTERSTATE COMMERCE. THE FEDERAL ARBITRATION ACT SHALL GOVERN THE
INTERPRETATION, ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION CLAUSE
OF THIS AGREEMENT.

 

II.                                     CONSUMER-RELATED
CLAIMS ABOVE $75,000.00 IN ACTUAL DAMAGES AND/OR COMMERCIAL

CLAIMS:

 

(a)                                  ANY
ARBITRATION INVOLVING CONSUMER-RELATED CLAIMS ABOVE $75,000.00 IN ACTUAL
DAMAGES AND/OR COMMERCIAL CLAIMS HEREUNDER SHALL BE BEFORE AT LEAST THREE
NEUTRAL ARBITRATORS ASSOCIATED WITH THE AMERICAN ARBITRATION ASSOCIATION AND
SELECTED IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION. FAILURE OF ANY ARBITRATOR TO DISCLOSE ALL FACTS WHICH
MIGHT TO AN OBJECTIVE OBSERVER CREATE A REASONABLE IMPRESSION OF THE ARBITRATOR’S
PARTIALITY, AND/OR MATERIAL ERRORS OF LAW SHALL BE GROUNDS [IN ADDITION TO ALL
OTHERS] FOR VACATUR OF AN AWARD RENDERED PURSUANT TO THIS AGREEMENT.

 

(b)                                  THE
PARTIES FURTHER AGREE THAT (i) NO ARBITRATION PROCEEDING HEREUNDER SHALL BE
CERTIFIED AS A CLASS ACTION OR PROCEED AS A CLASS ACTION, OR ON A BASIS
INVOLVING CLAIMS BROUGHT IN A PURPORTED REPRESENTATIVE CAPACITY ON BEHALF OF
THE GENERAL PUBLIC, OTHER CUSTOMERS OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY
SITUATED AND (ii) NO ARBITRATION PROCEEDING HEREUNDER SHALL BE CONSOLIDATED
WITH, OR JOINED IN ANY WAY WITH, ANY OTHER ARBITRATION PROCEEDING

 

(c)                                  THIS
ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION, AMENDMENT, OR EXPIRATION OF
THE AGREEMENT IN WHICH THIS PROVISION IS CONTAINED, UNLESS ALL OF THE PARTIES
OTHERWISE EXPRESSLY AGREE IN WRITING

 

(d)                                  THE
PARTIES ACKNOWLEDGE THAT THIS AGREEMENT EVIDENCES A TRANSACTION INVOLVING
INTERSTATE COMMERCE. THE FEDERAL ARBITRATION ACT SHALL GOVERN THE
INTERPRETATION, ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION CLAUSE
OF THIS AGREEMENT.

 

III.                                 ADDITIONAL
COMMERCIAL CLAIMS PROVISIONS:

 

(a)                                  ANY
AND ALL COMMERCIAL CONTROVERSIES BETWEEN THE PARTIES, SHALL BE RESOLVED BY
ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION IN EFFECT AT THE TIME OF FILING, UNLESS THE COMMERCIAL
ARBITRATION RULES CONFLICT WITH THIS PROVISION, AND IN SUCH EVENT THE TERMS OF
THIS PROVISION SHALL CONTROL TO THE EXTENT OF THE CONFLICT

 

9

 

(b)                                  THE
AWARD OF THE ARBITRATORS, OR A MAJORITY OF THEM SHALL BE FINAL, AND JUDGMENT
UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT, STATE OR FEDERAL, HAVING
JURISDICTION. THE ARBITRATION AWARD SHALL BE IN WRITING AND SPECIFY THE FACTUAL
AND LEGAL BASIS FOR THE AWARD. UPON THE REQUEST OF ANY PARTY, THE AWARD SHALL
INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF LAW.

 

(c)                                  ARBITRABLE
DISPUTES INCLUDE ANY AND ALL CONTROVERSIES OR CLAIMS BETWEEN THE PARTIES OF
WHATEVER TYPE OR MANNER, INCLUDING WITHOUT LIMITATION, ANY CLAIM ARISING OUT OF
OR RELATING TO THIS DEED OF TRUST, ALL PAST, PRESENT AND/OR FUTURE CREDIT
FACILITIES AND/OR AGREEMENTS INVOLVING THE PARTIES, ANY TRANSACTIONS BETWEEN OR
INVOLVING THE PARTIES, AND/OR ANY ASPECT OF ANY PAST OR PRESENT RELATIONSHIP OF
THE PARTIES, WHETHER BANKING OR OTHERWISE, SPECIFICALLY INCLUDING ANY ALLEGED
TORT COMMITTED BY ANY PARTY.

 

(d)                                  THE
PARTIES SHALL ALLOW AND PARTICIPATE IN DISCOVERY IN ACCORDANCE WITH THE FEDERAL
RULES OF CIVIL PROCEDURE FOR A PERIOD OF ONE HUNDRED TWENTY (120) DAYS AFTER
THE FILING OF THE ORIGINAL RESPONSIVE PLEADING DISCOVERY MAY CONTINUE
THEREAFTER AS AGREED BY THE PARTIES OR AS ALLOWED BY THE ARBITRATORS.
UNRESOLVED DISCOVERY DISPUTES SHALL BE BROUGHT TO THE ATTENTION OF THE
ARBITRATORS BY WRITTEN MOTION FOR PROPER DISPOSITION, INCLUDING RULING ON ANY
ASSERTED OBJECTIONS, PRIVILEGES, AND PROTECTIVE ORDER REQUESTS AND AWARDING REASONABLE
ATTORNEY’S FEES TO THE PREVAILING PARTY.

 

(e)                                  IN
THE EVENT THE AGGREGATE OF ALL AFFIRMATIVE CLAIMS ASSERTED EXCEED $500,000.00,
EXCLUSIVE OF INTEREST AND ATTORNEY’S FEES, OR UPON THE WRITTEN REQUEST OF ANY
PARTY, (1) PRIOR TO THE DISSEMINATION OF A LIST OF POTENTIAL ARBITRATORS, THE
AMERICAN ARBITRATION ASSOCIATION SHALL CONDUCT AN IN PERSON ADMINISTRATIVE
CONFERENCE WITH THE PARTIES AND THEIR ATTORNEYS FOR THE FOLLOWING PURPOSES AND
FOR SUCH ADDITIONAL PURPOSES AS THE PARTIES OR THE AMERICAN ARBITRATION
ASSOCIATION MAY DEEM APPROPRIATE, (A) TO OBTAIN ADDITIONAL INFORMATION ABOUT
THE NATURE AND MAGNITUDE OF THE DISPUTE AND THE ANTICIPATED LENGTH OF HEARINGS
AND SCHEDULING; (B) TO DISCUSS THE VIEW OF THE PARTIES ABOUT ANY TECHNICAL
AND/OR OTHER SPECIAL QUALIFICATIONS OF THE ARBITRATORS; AND (C) TO CONSIDER,
WHETHER MEDIATION OR OTHER METHODS OF DISPUTE RESOLUTION MIGHT BE APPROPRIATE,
AND (2) AS PROMPTLY AS PRACTICABLE AFTER THE SELECTION OF THE ARBITRATORS, A
PRELIMINARY HEARING SHALL BE HELD AMONG THE PARTIES, THEIR ATTORNEYS AND THE
ARBITRATORS. WITH THE AGREEMENT OF THE ARBITRATORS AND THE PARTIES, THE PRELIMINARY
HEARING MAY BE CONDUCTED BY TELEPHONE CONFERENCE CALL RATHER THAN IN PERSON. AT
THE PRELIMINARY HEARING THE MATTERS THAT MAY BE CONSIDERED SHALL INCLUDE,
WITHOUT LIMITATION, A PREHEARING SCHEDULING ORDER ADDRESSING (A) EACH PARTY’S
DUTY TO SUBMIT A DETAILED STATEMENT OF CLAIMS, DAMAGES AND/OR DEFENSES, A
STATEMENT OF THE ISSUES ASSERTED BY EACH PARTY AND ANY LEGAL AUTHORITIES THE
PARTIES MAY WISH TO BRING TO THE ATTENTION OF THE ARBITRATORS; (B) RESPONSES
AND/OR REPLIES TO THE PLEADINGS FILED IN COMPLIANCE WITH SUBPART 2(A); (C)
STIPULATIONS REGARDING ANY UNCONTESTED FACTS; (D) EXCHANGE AND PREMARKING OF
ALL DOCUMENTS. WHICH EACH PARTY BELIEVES MAY BE OFFERED AT THE FINAL
ARBITRATION HEARING; (E) THE IDENTIFICATION AND AVAILABILITY OF WITNESSES, INCLUDING
EXPERTS, AND SUCH ADDITIONAL MATTERS REGARDING WITNESSES INCLUDING THEIR
BIOGRAPHIES AND A SHORT SUMMARY OF THEIR EXPECTED TESTIMONY, (F) WHETHER A
STENOGRAPHIC OR OTHER OFFICIAL RECORD OF THE PROCEEDINGS SHALL BE MAINTAINED;
AND (G) THE POSSIBILITY OF UTILIZING MEDIATION OR OTHER ALTERNATIVE METHODS OF
DISPUTE RESOLUTION.

 

(f)                                    FOR
PURPOSES OF THIS PROVISION, “THE PARTIES” MEANS GRANTORS, BENEFICIARY AND
TRUSTEE, AND EACH AND ALL PERSONS AND ENTITIES SIGNING THIS AGREEMENT OR ANY
OTHER AGREEMENTS BETWEEN OR AMONG ANY OF THE PARTIES AS PART OF THIS
TRANSACTION. “THE PARTIES” SHALL ALSO INCLUDE INDIVIDUAL PARTNERS, AFFILIATES,
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS AND/OR REPRESENTATIVES OF ANY PARTY TO
SUCH DOCUMENTS, AND SHALL INCLUDE ANY OTHER OWNER AND HOLDER OF THIS AGREEMENT.

 

(g)                                 THE
PARTIES SHALL HAVE THE RIGHT TO INVOKE SELF- HELP REMEDIES (SUCH AS SET-OFF,
NOTIFICATION OF ACCOUNT DEBTORS, SEIZURE AND/OR FORECLOSURE OF COLLATERAL, AND
NON-JUDICIAL SALE OF PERSONAL PROPERTY AND REAL PROPERTY COLLATERAL) BEFORE,
DURING OR AFTER ANY ARBITRATION AND/OR REQUEST ANCILLARY OR PROVISIONAL
JUDICIAL REMEDIES (SUCH AS GARNISHMENT, ATTACHMENT, SPECIFIC PERFORMANCE,
RECEIVER, INJUNCTION OR RESTRAINING ORDER, AND SEQUESTRATION) BEFORE OR AFTER
ANY ARBITRATION. THE PARTIES NEED NOT AWAIT THE OUTCOME OF THE ARBITRATION
BEFORE USING SELF-HELP REMEDIES. USE OF SELF-HELP OR ANCILLARY AND/OR
PROVISIONAL JUDICIAL REMEDIES SHALL NOT OPERATE AS A WAIVER OF EITHER PARTY’S
RIGHT TO COMPEL ARBITRATION. ANY ANCILLARY OR PROVISIONAL REMEDY WHICH WOULD BE
AVAILABLE FROM A COURT AT LAW SHALL BE AVAILABLE FROM THE ARBITRATORS.

 

(h)                                 THE
PARTIES AGREE THAT ANY ACTION REGARDING ANY CONTROVERSY BETWEEN THE PARTIES SHALL
EITHER BE BROUGHT BY ARBITRATION, AS DESCRIBED HEREIN, OR BY JUDICIAL
PROCEEDINGS, BUT SHALL NOT BE PURSUED SIMULTANEOUSLY IN DIFFERENT OR
ALTERNATIVE FORMS. A TIMELY WRITTEN NOTICE OF INTENT TO ARBITRATE PURSUANT TO
THIS AGREEMENT STAYS AND/OR ABATES ANY AND ALL ACTION IN A TRIAL COURT, SAVE
AND EXCEPT A HEARING ON AMOTION TO COMPEL ARBITRATION AND/OR THE ENTRY OF AN
ORDER COMPELLING ARBITRATION AND STAYING AND/OR ABATING THE LITIGATION PENDING
THE FILING OF THE FINAL AWARD OF THE ARBITRATORS. ALL REASONABLE AND NECESSARY
ATTORNEY’S FEES AND ALL TRAVEL COSTS SHALL BE AWARDED TO THE PREVAILING PARTY
ON ANY MOTION TO COMPEL ARBITRATION AND MUST BE PAID TO SUCH PARTY WITHIN TEN
(10) DAYS OF THE SIGNING OF THE ORDER COMPELLING ARBITRATION.

 

(i)                                    ANY
PARTY SEEKING TO ARBITRATE SHALL SERVE A WRITTEN NOTICE OF INTENT TO ARBITRATE
TO

 

10

 

ANY AND
ALL OPPOSING PARTIES WITHIN 360 DAYS AFTER DISPUTE HAS ARISEN. A DISPUTE IS
DEFINED TO HAVE ARISEN ONLY UPON RECEIPT OF SERVICE OF JUDICIAL PROCESS,
INCLUDING SERVICE OF A COUNTERCLAIM, FAILURE TO SERVE A WRITTEN NOTICE OF
INTENT TO ARBITRATE WITHIN THE TIME SPECIFIED ABOVE SHALL BE DEEMED AWAIVER OF
THE AGGRIEVED PARTY’S RIGHT TO COMPEL ARBITRATION OF SUCH CLAIM. THE ISSUE OF
WAIVER PURSUANT TO THIS AGREEMENT IS AN ARBITRABLE DISPUTE.

 

(j)                                    ACTIVE
PARTICIPATION IN PENDING LITIGATION DURING THE 360 DAY NOTICE PERIOD, WHETHER AS
PLAINTIFF OR DEFENDANT, IS NOT A WAIVER OF THE RIGHT TO COMPEL ARBITRATION. ALL
DISCOVERY OBTAINED IN THE PENDING LITIGATION MAY BE USED IN ANY SUBSEQUENT
ARBITRATION PROCEEDING.

 

(k)                                THE
PARTIES FURTHER AGREE THAT (i) NO ARBITRATION PROCEEDING HEREUNDER SHALL BE CERTIFIED
AS A CLASS ACTION OR PROCEED AS A CLASS ACTION, OR ON A BASIS INVOLVING CLAIMS
BROUGHT IN A PURPORTED REPRESENTATIVE CAPACITY ON BEHALF OF THE GENERAL PUBLIC,
OTHER CUSTOMERS OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY SITUATED AND (ii)
NO ARBITRATION PROCEEDING HEREUNDER SHALL BE CONSOLIDATED WITH, OR JOINED IN
ANY WAY WITH, ANY OTHER ARBITRATION PROCEEDING

 

(I)                                    ANY
ARBITRATOR SELECTED SHALL BE KNOWLEDGEABLE IN THE SUBJECT MATTER OF THE
DISPUTE. EACH OF THE PARTIES SHALL PAY AN EQUAL SHARE OF THE ARBITRATION COSTS,
FEES, EXPENSES, AND OF THE ARBITRATORS’ FEES, COSTS AND EXPENSES.

 

(m)                              ALL
STATUTES OF LIMITATIONS WHICH WOULD OTHERWISE BE APPLICABLE SHALL APPLY TO ANY
AND ALL CLAIMS ASSERTED IN ANY ARBITRATION PROCEEDING HEREUNDER AND THE
COMMENCEMENT OF ANY ARBITRATION PROCEEDING TOLLS SUCH STATUTES OF LIMITATIONS.

 

(n)                                 IN
ANY ARBITRATION PROCEEDING SUBJECT TO THIS PROVISION, THE ARBITRATORS, OR
MAJORITY OF THEM, ARE SPECIFICALLY EMPOWERED TO DECIDE (BY DOCUMENTS ONLY, OR
WITH A HEARING, AT THE ARBITRATORS’ SOLE DISCRETION) PRE-HEARING MOTIONS WHICH
ARE SUBSTANTIALLY SIMILAR TO PREHEARING MOTIONS TO DISMISS AND MOTIONS FOR
SUMMARY ADJUDICATION.

 

(0)                                 THIS
ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION, AMENDMENT, OR EXPIRATION OF
THE AGREEMENT IN WHICH THIS PROVISION IS CONTAINED, UNLESS ALL OF THE PARTIES
OTHERWISE EXPRESSLY AGREE IN WRITING

 

(p)                                  THE
PARTIES ACKNOWLEDGE THAT THIS AGREEMENT EVIDENCES A TRANSACTION INVOLVING
INTERSTATE COMMERCE. THE FEDERAL ARBITRATION ACT SHALL GOVERN THE
INTERPRETATION, ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION CLAUSE
OF THIS AGREEMENT.

 

(q)                                  THE
ARBITRATORS, OR A MAJORITY OF THEM, SHALL AWARD ATTORNEY’S FEES AND COSTS TO
THE PREVAILING PARTY PURSUANT TO THE TERMS OF THIS AGREEMENT.

 

(r)                                  NEITHER
THE PARTIES NOR THE ARBITRATORS MAY DISCLOSE THE EXISTENCE, CONTENT, OR RESULTS
OF ANY ARBITRATION HEREUNDER WITHOUT PRIOR WRITTEN CONSENT OF ALL PARTIES
AND/OR COURT ORDER

 

(s)                                  VENUE
OF ANY ARBITRATION PROCEEDING HEREUNDER SHALL BE IN THE COUNTY WHERE
BENEFICIARY IS LOCATED.

 

Notwithstanding
the provision above relating to conducting a foreclosure sale(s) pursuant to
the provisions of this Deed Of Trust, the Trustee shall, and is hereby directed
to, comply with the provisions of Chapter 51 of the Texas Property Code (the “Property
Code”) as it may be amended and in effect as of the date or dates of any
foreclosure proceedings conducted pursuant to this Deed Of Trust. In
particular, the location and time of sale shall be held in accordance with Section 51.002
of the Property Code or any amendments thereto or re-enactment or revisions to
such law.

 

Grantors
stipulate and agree that for purposes of determining the fair market value of
the Property (or any portion thereof), as such term is used in Section 51.003
of the Texas Property Code, which is sold at a non-judicial foreclosure sale
pursuant to the terms of this Deed Of Trust (and in accordance with Section 51.002
of the Property Code), the following factors shall be used to determine such
Property’s fair market value, for such purposes: (a) the Property shall be
valued “AS IS” without any value being anticipated for any improvements or
refurbishing to be conducted, or conducted, after the date of the foreclosure
sale, (b) the intention of the purchaser to re-sell the Property promptly,
without any extensive holding period, (c) any re-sale shall be for cash only,
without financing by the seller, (d) all reasonable costs of closing a re-sale
shall be deducted from the reasonable costs of closing a re-sale shall be
deducted from the estimate of fair market value, such as attorneys’ fees, title
policy premiums, surveyor fees and expenses, the then prevailing broker’s or salesman
commission, unpaid ad valorem tax amounts, and (e) the application of a
discount to the value to be applied to any future sales price to arrive at its
then current fair market value. Grantors further stipulate that any value given
to such Property in connection with Grantors’ obtaining of the loan from
Beneficiary to which this Deed Of Trust relates, or not any other time or
times, shall not be used and shall not be considered for guidance in
determining the fair market value of such Property on the date of any such
foreclosure sale.

 

Leasehold
Covenants. If the interest of Grantors in the Property
is a leasehold interest and not a fee ownership, then the lien of this Deed Of
Trust shall be upon the leasehold rights and benefits of Grantors, but, in no
event shall any of the burdens or obligations under said leasehold be assumed
by, or be the obligations of, Beneficiary absent an express written instrument,
executed by Beneficiary assuming such obligations, which shall be within the
sole discretion of Beneficiary.

 

To the extent
Grantors own a leasehold interest in all or any portion of the Property,
Grantors hereby covenant and agree as follows:

 

(a)                                  Grantors
will at all times fully perform and comply with all agreements, covenants,
terms and conditions imposed upon or assumed by it, as tenant or lessee, under
any and all leases affecting the Property (collectively, the “Lease”), true and
correct copies of

 

11

 

which Grantors
shall deliver to Beneficiary, and that if Grantors shall fail to do so,
Beneficiary may (but shall not be obligated to) take any action Beneficiary
deems necessary or desirable to prevent or to cure any default by Grantors in
the performance of or compliance with any of Grantor’s covenants or obligations
under the Lease. Upon receipt by Beneficiary from the landlord wider the Lease
of any written notice of default by Grantors thereunder, default or any written
notice of default, or the nature thereof be questioned or denied by Grantors or
by any party on and on behalf of Grantors, Grantors hereby expressly grant to
Beneficiary and agree that Beneficiary shall have the absolute and immediate
right to enter in and upon the leased premises or any part thereof that
Beneficiary deems necessary or desirable in order to prevent or to cure any
default by Grantors under the Lease. Beneficiary may pay and expend such sums
of money as Beneficiary in its sole discretion deems necessary for any such
purpose, and Grantors hereby agree to pay to Beneficiary, immediately upon
demand, all such sums so paid and expended by Beneficiary. All sums so paid and
expended by Beneficiary shall accrue interest at the rates set forth in the
Note and be added to and be secured by the lien of this Deed Of Trust.

 

(b) Grantors
will not surrender the leasehold estate and interest hereinabove described, nor
terminate or cancel the Lease; and it will not; without the express written
consent of Beneficiary, modify, change, supplement, alter or amend the Lease
either orally or in writing. Any such termination, cancellation, modification,
change, supplement, alteration or amendment of the Lease without the prior
written consent thereto by Beneficiary shall be void and of no force and
effect. As further security to Beneficiary, Grantors shall deposit with
Beneficiary an original of the Lease and all amendments thereto or a certified
copy thereof, to be retained by Beneficiary until the indebtedness secured
hereby is fully paid.

 

(c) No release
or forbearance of any of Grantors’ obligations under the Lease, pursuant to the
Lease or otherwise, shall release Grantors from any of its obligations under
this Deed Of Trust, including obligations with respect to the payment of rent
as provided for in the Lease and the performance of all of the terms,
provisions, covenants, conditions and agreements contained in the Lease, to be
kept, performed and complied with by Grantors therein.

 

(d) Unless
Beneficiary shall otherwise expressly consent in writing, the fee title to the
property demised by the Lease and the leasehold estate shall not merge but
shall always remain separate and distinct, notwithstanding the union of said
estates either in the landlord or in the tenant, or in a third party by
purchase or otherwise..

 

(e)                                  If
there shall be filed by or against Grantors a petition under the Bankruptcy
Code, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”), and Grantors, as
lessee under the Lease, shall determine to reject the Lease pursuant to Section 365(a)
of the Bankruptcy Code, Grantors shall give Beneficiary not less than thirty
(30) days prior notice of the date on which Grantors shall apply to the
Bankruptcy Court for authority to reject the Lease. Beneficiary shall have the
right, but not the obligation, to serve upon Grantors within such ten day
period a notice stating that (i) Beneficiary demands that Grantors assume and
assign the Lease to Beneficiary pursuant to Section 365 of the Bankruptcy
Code and (ii) Beneficiary covenants to cure or provide adequate assurance of
prompt cure of all defaults and provide adequate assurance of future
performance under the Lease. If Beneficiary serves upon Grantors the notice
described in the preceding sentence, Grantors shall not seek to reject the
Lease and shall comply with the demand provided for in the clause (i) of the
preceding sentence, within 30 days after the notice shall have been given
subject to the performance by Beneficiary of the covenant provided for in
clause (ii) of the preceding sentence. Further, effective upon the entry of an
order for relief in respect of Grantors under Chapter 7 of the Bankruptcy Code,
Grantors hereby assign and transfer to Beneficiary a non-exclusive right to
apply to the Bankruptcy Court under Subsection 365(d)(I) of the Bankruptcy
Code for an order extending the period during which the Lease may be rejected or
assumed.

 

NO ORAL AGREEMENTS

 

THIS
WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEOUENT ORAL
AGREEMENT OF

THE PARTIES.

 

THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

Dated this 17 day of December, 2004.

 

	
  GRANTOR:

  	
  LANCER PARTNERSHIP, LTD.,

  	
  GRANTOR:

  
	
   

  	
  A Texas limited partnership

  	
   

  
	
   

  	
  By: Lancer Capital Corporation,

  	
   

  
	
   

  	
  A Delaware
  corporation, General Partner

  	
   

  

 

 

	
  By:

  	
  /s/ Scott
  Adams

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
  Scott Adams

  	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Secretary

  	
   

  	
   

  	
   

  	
   

  
										

 

(Acknowledgement)

 

	
  STATE OF TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
   

  
	
  COUNTY OF

  	
   

  	
   

  	
   

  	
  §

  
					

 

This instrument was acknowledged before me on

by                                                                                                           .

 

 

	
   

  	
   

  
	
   

  	
  Notary Public, State of Texas

  
	
   

  	
   

  
	
   

  	
  My commission expires

  	
   

  

 

12

 

(Acknowledgment)

 

	
  STATE OF TEXAS

  	
  §

  
	
   

  	
  §

  
	
  COUNTY OF

  	
   

  	
   

  	
  §

  
				

 

This instrument was acknowledged before me on

by                                                                                                           .

 

 

	
   

  	
   

  
	
   

  	
  Notary Public, State of Texas

  
	
   

  	
   

  
	
   

  	
  My commission expires:

  	
   

  

 

 

(Partnership Acknowledgment)

 

	
  STATE OF TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF

  	
   

  	
   

  	
   

  	
  §

  
					

 

This instrument was acknowledged before me on December 17, 2004 by
of Lancer Capital Corporation, a Delaware corporation, General, partner(s) on
behalf of Lancer Partnership, Ltd., a Texas limited partnership, on behalf of
said, partnership

 

 

	
   

  	
  /s/ Scott A. Farrimond

  
	
   

  	
  Notary Public, State of Texas

  
	
   

  	
   

  
	
   

  	
  My commission expires:

  	
  6/28/08

  

 

 

(Corporation Acknowledgement)

 

	
  STATE OF TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF

  	
   

  	
   

  	
   

  	
  §

  
					

 

 

This instrument was acknowledged before me on                                                                                                                         
by                                                                                    
as                                                                                                                         
a                                                                                                                                 
corporation, on behalf of said corporation

 

 

	
   

  	
   

  
	
   

  	
  Notary Public, State of Texas

  
	
   

  	
   

  
	
   

  	
  My commission expires:

  	
   

  

 

After
recording, return to Beneficiary, at its mailing address, as follow:

 

AFTER
RECORDING, PLEASE RETURN TO: 

INTERNATIONAL
BANK OF COMMERCE

Credit
Department

130 E. Travis

San Antonio,
Texas 78205

 

13

 

* ADDENDUM TO DEED OF TRUST,
ASSIGNMENT OF RENTS, SECURITY

AGREEMENT AND FINANCING
STATEMENT

 

The Note is
given in renewal, extension, modification, and rearrangement of that one
certain Promissory Note in the original principal sum of Forty-four
Million Eight Hundred Twenty-three Thousand Seven Hundred Fifty and No/100
Dollars ($44,823,750.00), dated June 30, 2000, executed by Grantors,
and payable to the order of The Frost National Bank more fully described in and
secured in a Deed of Trust, of even date therewith, executed by Grantors and
recorded in Volume 8634, Page 1641, of the Real Property Records of Bexar
County, Texas, upon the herein described real property, which said liens and
notes, have been assigned and transferred to INTERNATIONAL
BANK OF COMMERCE. It is expressly agreed that said liens are hereby
renewed, extended, and continued in full force and effect to secure the payment
of the Note hereby secured.

 

This Deed of Trust is being
executed pursuant to the terms and conditions of that certain Loan Agreement of
even date herewith between Grantors and Beneficiary and which Loan Agreement
will govern in case of conflict with this Deed of Trust.

 

Executed on this 17 day of
December, 2004.

 

GRANTORS:

 

Lancer
Partnership, Ltd.,

a Texas
limited partnership

 

	
  By:

  	
  Lancer
  Capital Corporation,

  
	
   

  	
  a Delaware corporation, General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
       /s/ Scott Adams

  	
   

  
	
   

  	
  Name:

  	
    Scott
  Adams

  	
   

  
	
   

  	
  Title:

  	
     Secretary

  	
   

  
							

 

 

	
  STATE OF TEXAS

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF

  	
   

  	
   

  	
   

  	
  §

  
					

 

Before
me, the undersigned authority, on this day personally appeared                                                               ,
                      
of Lancer Capital Corporation, a Delaware corporation, General Partner of
Lancer Partnership, Ltd., a Texas limited partnership, known to me to be the
person whose name is subscribed to the foregoing instrument, and acknowledged
to me that he executed the same for the purposes and consideration therein
expressed, in the capacity therein stated and as the act and deed of said
partnership.

 

Given
under my hand and seal of office on this 17th day of December, 2004.

 

 

	
   

  	
   /s/ Scott A. Farrimond

  
	
   

  	
  Notary Public,
  State of Texas

  

 

 

FOR

TRACT “A”

 

Being a 20.000 acre tract
of land out of the J.J. Sanchez Survey, No.34, Abstract No. 665, County Block
5100, Bexar County, Texas, the said 2O.OOO acre tract of land being a portion
of a 189.56 acre tract of land as recorded in Volume 7977, Pages 806–810 of the
Deed Records of Bexar County, Texas, and a portion of a 120.935 acre tract of
land as recorded in Volume 7345, Pages 825-829 of the Deed Records of Bexar
County, Texas, and being more particularly described by metes and bounds as
follows:

 

	
  COMMENCING:

  	
   

  	
  At a point for the
  southerly end of the cutback line for the intersection of the east
  right-of-way line of Foster~ Road with the south right-of-way line of I.H.-10
  (U.S. Highway 90), and proceeding along the following course:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1,244.77 feet in a
  southerly direction along the said east right-of-way line of Foster Road to
  an iron pin found at the northwest corner of the said 189.56 acre tract of
  land;

  
	
   

  	
   

  	
   

  
	
  THENCE:

  	
   

  	
  N 89°29’00” E, a
  distance of 800.00 feet departing from the aforementioned east right-of-way
  line of Foster Road, along the north line of the said 189.56 acre tract of
  land to an iron pin set for the northwest corner, and POINT OF BEGINNING of
  the herein described tract of land;

  
	
   

  	
   

  	
   

  
	
  THENCE:

  	
   

  	
  N 89°29’00” E, a
  distance of 670.16 feet continuing along the said north line of the 189.56
  acre tract of land to an iron pin set for the northeast corner of the herein
  described tract of land;

  
	
   

  	
   

  	
   

  
	
  THENCE:

  	
   

  	
  S OO°14’O0” E, a
  distance of 1,300.00 feet departing from the aforementioned north line of the
  189.56 acre tract of land to an iron pin set for the southeast corner of the
  herein described tract of land;

  
	
   

  	
   

  	
   

  
	
  THENCE:

  	
   

  	
  S 89°29’00” W, a
  distance of 670.16 feet to an iron pin set for the southwest corner of the
  herein described tract of land;

  
	
   

  	
   

  	
   

  
	
  THENCE:

  	
   

  	
  N O0°14’OO” W, a
  distance of 1,300.00 feet to the POINT OF BEGINNING and containing 20.000
  acres or 871,200 square feet of land, more or less, in Bexar County, Texas.

  

 

PREPARED BY: PAPE-DAWSON
CONSULTING ENGINEERS, INC.

JOB NO.:                                               2269-60-20

DATE: July 9, 1986;
Revised September 26, 1986

DOC. ID:                                                FN10/12

 

UTILITES   ROADS
& STREETS   DRAINAGE   LAND PLANNING   SUBDIVISIONS   VISIONS   REPORTS   SURVEYING

 

 

FOR

TRACT “B”

 

Being a 20.000 acre tract
of land out of the J.J. Sanchez Survey, No.34, Abstract No. 665, County Block
5100, Bexar County, Texas, the said 2O.OOO acre tract of land being a portion
of a 189.56 acre tract of land as recorded in Volume 7977, Pages 806–810 of the
Deed Records of Bexar County, Texas, and a portion of a 120.935 acre tract of
land as recorded in Volume 7345, Pages 825-829 of the Deed Records of Bexar
County, Texas, and being more particularly described by metes and bounds as
follows:

 

	
  COMMENCING:

  	
   

  	
  At a point for the southerly end of the
  cutback line for the intersection of the east right-of-way line of
  Foster~ Road with the south right-of-way line of I.H.-10 (U.S. Highway 90),
  and proceeding along the following course:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1,244.77 feet in a southerly direction
  along the said east right-of-way line of Foster Road to an iron pin found at
  the northwest corner of the said 189.56 acre tract of land;

  
	
   

  	
   

  	
   

  
	
  THENCE:

  	
   

  	
  N 89°29’00” E, a distance of 1,470.16 feet
  departing from the aforementioned east right-of-way line of Foster Road,
  along the north line of the said 189.56 acre tract of land to an iron pin set
  for the northwest corner, and POINT OF BEGINNING of the herein described tract
  of land;

  
	
   

  	
   

  	
   

  
	
  THENCE:

  	
   

  	
  N 89°29’00” E, a distance of 670.16 feet
  continuing along the said north line of the 189.56 acre tract of land to an
  iron pin set for the northeast corner of the herein described tract of land;

  
	
   

  	
   

  	
   

  
	
  THENCE:

  	
   

  	
  S OO°14’O0” E, a distance of 1,300.00 feet
  departing from the aforementioned north line of the 189.56 acre tract of land
  to an iron pin set for the southeast corner of the herein described tract of
  land;

  
	
   

  	
   

  	
   

  
	
  THENCE:

  	
   

  	
  S 89°29’00” W, a distance of 670.16 feet to
  an iron pin set for the southwest corner of the herein described tract of
  land;

  
	
   

  	
   

  	
   

  
	
  THENCE:

  	
   

  	
  N O0°14’OO” W, a distance of 1,300.00 feet
  to the POINT OF BEGINNING and containing 20.000 acres or 871,200 square feet
  of land, more or less, in Bexar County, Texas.

  

 

PREPARED BY: PAPE-DAWSON
CONSULTING ENGINEERS, INC.

JOB NO.:                                               2269-60-20

DATE: July 9, 1986;
Revised September 26, 1986

DOC. ID:                                                FN10/11

 

UTILITES   ROADS
& STREETS   DRAINAGE   LAND
PLANNING   SUBDIVISIONS   VISIONS   REPORTS   SURVEYINGExhibit
10.16

 

SECURITY AGREEMENT

 

DEBTOR

 

LANCER PARTNERSHIP, LTD.,

a Texas limited partnership

 

 

6655 LANCER BLVD. SAN 

ANTONIO, TEXAS 78219

 

 

The
undersigned Debtor, Owner of Collateral, whether one or more, and INTERNATIONAL
BANK OF COMMERCE 130 E. TRAVIS. SAN ANTONIO. TEXAS 78205 (hereinafter called “Secured
Party”) enter into this Security Agreement and for good and valuable
consideration, the receipt of which is hereby acknowledged, and agree as
follows:

 

SECTION I:
Creation of Security Interest.

Debtor hereby
grants to Secured Party a first and exclusive lien and security interest in all
of the personal property of Debtor, wherever located, and now owned or
hereafter acquired, including the property described in Section II of this
Security Agreement (the “Collateral”) to secure payment and performance of the
Indebtedness (described in Section III below).

 

SECTION II:
Description of Collateral.

1.     The
security interest is granted in the following collateral:

 

a. Describe the collateral and, as applicable, check boxes and provide
information indicated below.

 

SEE EXHIBIT “A” ATTACHED HERETO AND INCORPORATED HEREIN.

 

 

b.                                      1     o    The
above goods are to become fixtures on: (describe real estate; attach additional
sheet, if needed)

 

 

2     o    The
above timber is standing on: (describe real estate; attach additional sheet, if
needed)

 

 

3    
o    The
above minerals or the like (including oil and gas) or accounts will be financed
at the well head or mine head of the well or mine located on: (describe real
estate; attach additional sheet, if needed)

 

c.                                       If b.1, b.2, or
b.3 above is checked, this security agreement is to be filed for record in the”
real estate records. (The description of the real estate must be sufficiently
specific as to give constructive notice of a mortgage on the realty).

 

The Debtor does not have an interest of record; the name of a record
owner of the real estate is

 

D                                       All substitutes
and replacements for, accessions, attachments, and other additions to, and
tools, parts, and equipment used in connection with, the above property; and
the increase and the unborn young of animals and poultry.

 

E                                         All property
similar to the above hereafter acquired by Debtor.

 

F                                         All proceeds,
products, and profits of the Collateral are included. Coverage of products and
proceeds for financing statement purposes is not to be construed as giving
Debtor any additional rights with respect to the Collateral, and Debtor is not
authorized to sell, lease, or otherwise transfer, furnish under contracts of
service, manufacture, process, or assemble the Collateral, except in accordance
with the provisions of this Security Agreement. Any additional sheets
describing the Collateral, the real estate, or other matters are incorporated
in and made a part of this instrument.

 

2.               Classify
the collateral under one or more of the following Texas Business And Commerce
Code classifications:

 

o Consumer
Goods

ý Equipment
(business use)

o Equipment
(farm use)

o Investment
Property

o Instrument

ý Accounts

o Deposit
Accounts

o Commercial
Tort Claims

o Agricultural
Liens

o Farm
Products

o General
Intangibles

ý Inventory

o Chattel
Paper

o Letter-Of-Credit
Rights

o Support
Obligations

o Liens
on Government Assets

o Sales
Of Payment Intangibles and Promissory Notes

 

And to the extent not listed above as original collateral all proceeds
and products of the foregoing.

 

1

 

Any term used
in the Texas Business And Commerce Code (the “Code”) and not defined in this
Security Agreement has the meaning given to the term in the Code.

 

3. o                        If this
block is checked, this is a purchase money security interest, and Debtor will
use funds advanced to purchase the Collateral, or Secured Party may disburse
funds direct to the seller of the Collateral, and to purchase insurance on the
Collateral. To the extent Debtor uses the Loan to purchase Collateral, Debtor’s
repayment of the Loan shall apply on a “first-in-first-out” basis so that the
portion of the Loan used to purchase a particular item of Collateral shall be
paid in the chronological order the Debtor purchased the Collateral.

 

4.                                       If any of the
Collateral is accounts, give the location of the office where the records
concerning them are kept (if other than Debtor’s address shown above):

 

5.                                       “Commercial Tort
Claims”, a subcategory of General Intangibles, means the Debtor’s claim for                                           
against

 

SECTION III:
INDEBTEDNESS

 

This assignment and grant is made to Secured Party to
secure the prompt and unconditional payment of, and the first and exclusive
security interest granted hereby to Secured Party secures the payment and
performance of, the following (collectively, the. “Indebtedness”):

 

Any and all
indebtedness, liabilities and/or obligations of Debtor, or any of the
undersigned if more than one, to Secured Party, jointly and/or severally, and
in any capacity, whether as borrower, guarantor, or otherwise, now or hereafter
owing, created and/or arising, and regardless of how evidenced or arising, as
to outstanding and unpaid principal, accrued and unpaid interest, attorneys’
fees, collection costs, and all other sums owing by Debtor, or any of the
undersigned if more than one, including but not limited to that certain Real
Estate Lien Note dated of even date executed by Debtor and made payable to the
order of Secured Party in the original principal sum of $l5,OOO,OOO.OO

and further
without limitation to:

 

A.                                   any and all
indebtedness of:

 

 

(if indebtedness is not solely of Debtor) or any of them if more than
one, to Assignee, jointly and/or severally, and in any capacity, whether as
borrower, guarantor, or otherwise, now or hereafter owing, created and/or
arising, and regardless of how evidenced or arising, including, without
limitation:

 

                                                                                                                                                                                                                                  

B.                                     any commercial
loan or indebtedness;

C.                                     any credit card or
other consumer type of loan;

D.                                    any indebtedness
relating to checking or savings accounts (overdrafts, fees, etc.);

E.                                      any expenses
incurred in the protection or maintenance of the collateral securing any of
such liabilities, loans, and obligations;

F.                                      any expenses
incurred in the collection of any indebtedness and/or obligation;

G.                                     any letters of
credit and/or indebtedness arising out of, or advanced to pay, letters of
credit transactions;

H.                                    any indebtedness,
however, evidenced, whether by promissory note, bookkeeping entry, electronic
transfer, checks, drafts or other items, or by any other manner or form;

I.                                         any other
indebtedness of Debtor and/or of the persons or entities set forth in
subparagraph A. above to any financial institution affiliated with International
Bancshares Corporation, jointly and/or severally, and in any capacity, whether
as borrower, guarantor, or otherwise, now or hereafter owing, created and/or
arising, and regardless of how evidenced or arising;

J.                                        any and all
extensions, modifications, substitutions and/or renewals of any of the above
described indebtedness;

K.                                    any and all costs
incurred by Secured Party to obtain, preserve and enforce this Security
Agreement, collect the Indebtedness, and maintain and preserve the Collateral
including without limitation, all taxes, assessments, attorneys’ fees and legal
expenses, and expenses of sale;

L.                                      the sale by
Debtor and the purchase by Secured Party of Accounts;

M.                                 the sale by Debtor and
the purchase by Secured Party of Chattel Paper;

N.                                    the sale by Debtor
and the purchase by Secured Party of Payment Intangibles;

O.                                    the sale by Debtor
and the purchase by Secured Party of Promissory Notes; and

P.                                      any of the
foregoing that arises after the filing of a petition in bankruptcy by or
against Debtor under the Bankruptcy Code, even if the obligations do not accrue
because of the automatic stay under Bankruptcy Code 362 or otherwise.

 

To the extent
allowed by law, for purposes hereof it is intended that the Indebtedness
include all classes of Indebtedness, whether evidenced by notes, open accounts,
overdrafts, or otherwise, and whether direct, indirect or contingent,
regardless of class, form or purpose and including but not limited to, loans
for consumer, agricultural, business or personal purposes.

 

The foregoing
shall under no circumstances be limited to the existence or non-existence of
collateral for such Indebtedness, or the type of collateral covered thereby.
The Indebtedness does not include amounts owed pursuant to a homestead equity
loan.

 

Notices:  Notices and other communications pertaining
to this Agreement shall be in writing and shall be effective only if delivered
in person or mailed U.S. certified mail, return receipt requested, postage
prepaid, to Secured Party if sent to:

INTERNATIONAL
BANK OF COMMERCE. 130 E. TRAVIS, SAN ANTONIO, TEXAS 78205 Attention: THOMAS L. TRAVIS,
and sent via United States Mail to Debtor, duly stamped and addressed to Debtor
either at the street address, the first shown hereinabove, or at the mailing
address, if any, given by and/or for Debtor at the beginning of this agreement
(or at such other address as may have been designated most recently in writing
by Debtor to Secured Party); provided, however, actual notice to Debtor,
however given or received, shall always be effective when given or received.
Except as otherwise required by law, any notice given or made pursuant hereto
shall be deemed effectively given on the date of personal delivery or, if
mailed, on the date such notice is deposited in the U.S. Mail, if received by
Secured Party.

 

SECTION IV:
PERFECTION OF SECURITY INTERESTS.

 

1.                                      Filing
Of Financing Statement.

 

(i)      Debtor
hereby authorizes Secured Party to file a Financing Statement, an Amended
Financing Statement and a Continuation Financing Statement (collectively
referred to as the “Financing Statement”) describing the Collateral.

(ii)     Debtor
hereby “authorizes Secured Party to file a Financing Statement describing any
agricultural liens or other statutory liens held by Secured Party.

(iii)    Secured
Party shall receive prior to the Closing an official report from the Secretary
of State of each Collateral State, the Chief Executive Office State, and the
Debtor State (each as defined below) (the “SOS Reports”) indicating that
Secured Party’s security interest is prior to all other security interests or
other interests reflected in the report.

(iv)    Secured
Party shall receive at any time following the Closing an SOS Report indicating
that Secured Party’s security interest is prior to all other security interests
or other interests reflected in the report.

 

2.                                      Possession.

 

(i) Debtor shall have possession of the
Collateral, except where expressly otherwise provided in this Security
Agreement or where Secured Party chooses to perfect its security interest by possession
only, or in addition to the filing of a Financing Statement.

 

2

 

(ii)           Where
Collateral is in the possession of third party, Debtor will join with Secured
Party in satisfying the third party of Secured Party’s security interest and
obtaining a Control Agreement from the third party that it is holding the
collateral for the benefit of Secured Party.

 

3.                                      Control Agreements.                             Debtor will cooperate with Secured Party in obtaining a Control
Agreement in form and substance satisfactory to Secured Party with respect to
Collateral consisting of:

 

(i)                                     Deposit Accounts,

(ii)                                  Investment Property,

(iii)                               Letter-Of-Credit Rights, and

(iv)                              Electronic Chattel Paper.

 

4.                                      Marking of Chattel Paper.   Debtor will not create any Chattel Paper without placing a legend
on the Chattel Paper acceptable to Secured Party indicating that Secured Party
has a security Interest in the Chattel Paper.

 

SECTION V: Debtor’s
Representation. Warranties, and Agreements,

 

A.                                    General Representations and
Warranties

 

Debtor represents, warrants and agrees
that:

(1)                                  Debtor has full power and authority to enter into this Security
Agreement; this Security Agreement has been duly authorized, executed and
delivered by Debtor and constitutes the valid and binding obligation of Debtor
enforceable in accordance with its terms. No consent of third parties, a
license, authorization or filing with any governmental authority is required to
be obtained or performed in connection with the execution, delivery, and
performance of this Security Agreement

 

(2)                                  All information supplied and statements made by Debtor in any
financial, credit or accounting statement or application for credit prior to,
contemporaneously with or subsequent to the execution of this Security
Agreement are and shall be true, correct, complete, valid, and genuine.

 

(3)                                  Debtor owns, or will use the proceeds of any loans by Secured
Party to become the owner of the Collateral free from any set-off, claim,
restriction, lien, security interest or encumbrance except this security
interest and liens for taxes not yet due.

 

(4)                                  No Financing Statement covering the Collateral or Its proceeds is
on file in any public office and Debtor will not permit any Financing Statement
covering any of Debtor’s Collateral or the proceeds thereof to hereafter be on
file in any public office except as may be filed pursuant to this Security
Agreement.

 

(5)                                  Debtor shall provide to Secured Party, upon Secured Party’s
request, (i) financial information, including but not limited to a balance
sheet, income statement, statement of cash flow, and such other financial
information as may be requested by Secured Party; (ii) * an existing appraisal
of the Collateral; (iii) tax receipts or copies of checks (iv) evidence of
insurance, and (v) any other information required by Secured Party in
connection with the Indebtedness or the Collateral. * Upon the occurrence of an
event of Default, Debtor shall provide to Lender

 

(6)                                  Debtor will not use the Collateral or permit the Collateral to be
used in violation of any statute, ordinance or other law or inconsistently with
the terms of any policy of insurance thereon; and Debtor will permit Secured
Party and its agents representatives, and employees to examine the Collateral
at all reasonable times, and for such purpose, Secured Party may enter upon or
into any premises where the Collateral may be located without being guilty of,
and/or held liable for, trespass. Debtor will furnish to Secured Party upon
request all pertinent information regarding the Collateral.

 

(7)                                  The Collateral shall remain (other than in Debtor’s ordinary
course of business) in Debtors possession or control at all times at Debtor’s
risk of loss unless Secured Party has taken possession of the Collateral, and
be kept at Debtor’s address set forth above where Secured Party may inspect it
at any time, except for its temporary removal in connection with its ordinary
use or unless Debtor notifies Secured Party in writing and Secured Party
consents in writing in advance of its removal to another location.

 

(8)                                  Debtor shall pay prior to delinquency all taxes, charges, liens
and assessments against the Collateral, and upon Debtor’s failure to do so,
Secured Party at its option, may pay any of them and shall be the sole judge of
the legality or validity thereof and the amount necessary to discharge the
same, Such payment shall become part of the Indebtedness secured by this
Security Agreement and shall be paid to Secured Party by Debtor immediately and
without demand, with interest thereon at the maximum rate allowed by applicable
law.

 

(9)                                  Certificates of hazard insurance must be furnished at all times
for the full amount of the Indebtedness with respect to all Collateral
(including coverage for all materials and equipment) against risks of Fire,
Windstorm, Hurricane (if the Collateral is written 100 miles of the Gulf
Coast), Hail and Collapse (including cost of debris removal) and such other
risks as Secured Party may require, including standard extended coverage. Such
insurance policies shall contain such terms, be in a form, for a period and be
written by companies satisfactory to Secured Party. Federal flood insurance is
also required in those geographic areas that are subject to such loss. The
policy shall also contain a standard mortgagee’s endorsement providing for
payment of any loss to Secured Party. All policies of insurance shall provide
for ten days written minimum cancellation notice to Secured Party.

 

Evidence of coverage must be a copy of the
original policy and loss payable clause. Certificates or letters of coverage
will not be accepted.

 

**Secured Party is authorized to act, as
attorney-in-fact for Debtor in obtaining, adjusting, settling, and canceling
such insurance end endorsing any drafts drawn by Insurers of the Collateral.
Secured Party may apply any and/or all proceeds of such insurance, which may be
received by it in payment of the indebtedness secured thereby, whether such
indebtedness is currently due or not. Secured Party reserves the right to
purchase single Interest insurance (which provides only protection for Secured
Party) and add the premium for such insurance together with interest at the
loan pre-maturity contract rate to the balance of the loan. This premium is due
upon demand, or may be paid in full at any agreed time. The single interest
premium is written by a company authorized to transact business in the State of
Texas at lawful rates not fixed or approved by the State Board of Insurance.
**Following receipt or prior written notice from Secured Party,

 

Secured Party, in its sole, discretion and
without obligation on Secured Party to do so, may advance and pay sums on
behalf and for the benefit of Debtor for costs necessary for the protection and
preservation of the collateral and other costs that may be appropriate, in
Secured Party’s sole discretion, including but not limited to insurance
premiums, ad valorem taxes, and attorney’s fees and legal costs and expenses.
Any sums which may be so paid by Secured Party and all sums paid for insurance
premiums, as aforesaid, including the costs, expenses, and attorney’s fees paid
in any suit affecting said Collateral shall bear interest from the dates of
such payments at the loan contract interest rate applied to the unmatured
principal balance and shall be paid by Debtor to Secured Party upon demand, and
shall be deemed a part of the debt and recoverable as such in all aspects. Any
sum to be reimbursed shall be secured by this Security Agreement.

 

(10)                            Debtor shall, at its own expense, do, make, procure, execute and
deliver all acts, things, writings and assurances as Secured Party may at any
time reasonably request to protect, assure or enforce its interests, rights end
remedies created by, provided in or emanating from this Security Agreement.

 

(11)                            Debtor shall not lend, rent, lease or otherwise dispose of the
Collateral (other than in the ordinary course of business) or any interest
therein except as authorized in this Security Agreement or in writing by
Secured Party, and Debtor shall keep the Collateral, including the proceeds
thereof, free from unpaid charges, including taxes, and from liens,
encumbrances and security interests other than that of Secured Party.

 

(12)                            Debtor shall sign and execute alone or with Secured Party any
Financing Statement or other document or procure any document, and pay all
connected costs, necessary to protect the security interest under this Security
Agreement against the rights or interests of third persons. Debtor shall pay
the costs of lien searches and certificates and all filing fees, continuation
fees, and fees for certificates of good standing and other Information required
by Secured Party.

 

3

 

(13)                            Debtor shall at all times keep the Collateral and its proceeds
separate and distinct from other property of Debtor and shall keep accurate and
complete records of the Collateral and its proceeds. Debtor shall present the
Collateral and pay all costs necessary to do so, including (but not limited to)
feed, rent, storage costs, and expenses of sale.

 

(14)                            If Secured Party should at any time be of the opinion that the
Collateral has declined or may decline in value, or is otherwise insufficient
to adequately secure the Indebtedness, or should Secured Party deem itself
insecure as to payment of the Indebtedness, then Secured Party may call for
additional property to be pledged and/or covered by this Agreement satisfactory
to Secured Party.

 

(15)                            If any Collateral or proceeds include obligations of third parties
to Debtor, the transactions creating those obligations will conform in all
respects to applicable state and federal consumer credit laws.

 

(16)                            In the event Debtor or any other person or persons seeks to enjoin
Secured Party from taking any action in connection with the Indebtedness or the
enforcement of Secured Party’s rights in the Collateral, Debtor hereby agrees
to give written notice to the President of Secured Party, at the address of
Secured Party set forth in the first paragraph of this Security Agreement, or
such other person or address as Secured Party may designate in writing to
Debtor, prior to seeking any such injunctive relief.

 

(17)                            Debtor shall indemnify and hold harmless Secured Party from and
against any and all claims, losses and liabilities growing out of or resulting
from this Security Agreement (including, without limitation, enforcement of
this Security Agreement), except claims, losses or liabilities resulting from
the gross negligence or willful misconduct of Secured Party. Debtor agrees,
upon demand, to pay to Secured Party the amount of any and all expenses,
including, but not limited to, the fees and disbursements of its counsel and of
any experts and agents, which Secured Party may incur in connection with (a)
the preparation, execution, delivery, filing, recording or administration of
this Security Agreement or the obtaining of advice from counsel with respect to
its rights and remedies under this Security Agreement, (b) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (c) the exercise or enforcement of any
of the rights of Secured Party hereunder, (d) the defense by Secured Party of
any injunction proceeding related to the Indebtedness or the Collateral, or (e)
the failure by Debtor to perform or observe any of the provisions hereof.
Debtor agrees to pay Interest on any expense or other sums due to Secured Party
hereunder (save and except insurance) that are not paid when due at a rate per
annum equal to the highest rate permitted by applicable law.

 

(18)                            ***As additional security for the Indebtedness, Debtor hereby
assigns, pledges and grants to Secured Party a security interest, a lien and
contractual right of set-off in and to all of the Debtor’s money, credits,
accounts, securities; certificates end/or other property now in, or at any time
hereafter coming within, the custody or control of Secured Party or any member
Bank or branch Bank of International Bancshares Corporation, whether held in a
general or special account or deposit, or for safekeeping or otherwise. Every
such security interest and right of set-off may be exercised without demand or
notice to Debtor. No security interest or right of set-off shall be deemed to
have been waived by any act or conduct on the part of Secured Party, or any
failure to exercise such right of set-off or to enforce such security interest,
or by any delay in so doing. Every right of set-off and security interest shall
continue in full force and effect until such right of set-off or security
interest is specifically waved or released by an instrument in writing executed
by Secured Party. The foregoing is in addition to and no in lieu of any rights
of set-off allowed by law.

 

***Upon the occurrence of an Eventy of
Default,

 

(19)                            Debtor shall assist Secured Party in complying with the Federal
Assignment of Claims Act (and any successor statutes) and similar laws to
enable Secured Party to become an assignee under such Act and otherwise comply
with such laws. Debtor shall preserve the liability of all account debtors,
obligors and secondary parties whose obligations are part of the Collateral.
Debtor shall notify the Secured Party of any change occurring in or to the
Collateral, or in any fact or circumstances warranted or represented by Debtor
in this agreement or furnished to Secured Patty, or if any Event of Default
occurs.

 

(20)                            Debtor will not allow the Collateral to be affixed to real estate,
except goods identified herein as fixtures

 

(21)                            All extended or renewed note(s) will be considered executed on the
date of the original note(s).

 

(22)                            Debtor shall comply with all environmental laws and regulations
applicable to the Collateral and the premises in which the Collateral is
located and shall notify Secured Party upon receipt of any notice or other
information as to any environmental hazards or violation of such laws. Secured
Party may inspect all premises in which the Collateral is located and the
Collateral as to its and their compliance with environmental law. Debtor
indemnities and holds harmless Secured Party for any breach of the foregoing
and for all losses, costs, fines, damages, including court costs and attorney’s
fees, incurred by Secured Party to defend itself, or to protect or preserve the
Collateral against environmental risks, hazards, fines, and other claims
relating to the- Collateral.

 

(23)                            Without providing Secured Party
with at least thirty (30) days prior written notice of Debtor’s intention to do
so, Debtor, until the indebtedness is paid in full, agrees that it will not:

 

a.                                       in one transaction or a series of related transactions, merge into
or consolidate with any other entity, sell all or substantially all of its
assets, or in any way jeopardize its corporate existence,

b.                                      change the state of its incorporation,

c.                                       change its corporate name,

d.                                      change the address and/or location of its Chief Executive Office;

e                                          file a UCC-1 Amendment form, and/or

f.                                         file 8 UCC-1 Termination form.

 

(24)                            Debtor has the risk of loss of the Collateral.

 

(25)                            Secured Party has no duty to collect any income accruing on the
Collateral or to preserve any rights relating to the Collateral.

 

B.                                    Special Representations and
Warranties.

 

Debtor
represents, warrants and agrees-that:

 

(1)                                  If the Collateral includes Inventory:

(a)                                  Debtor will not sell, lease or otherwise dispose of any Collateral
except in the ordinary course of business without the prior written consent of
Secured Party.

(b)                                 Until default Debtor may in the ordinary course of business, sell,
lease or furnish under contract of service any of the inventory normally held
by Debtor for such purpose, provided, however, that such use of the inventory
shall not be inconsistent with any other provisions of this Security Agreement
or with the terms or conditions of any policies of insurance thereon. A sale in
the ordinary course of business does not include a transfer in partial or total
satisfaction of a debt.

 

(2)                                  If the Collateral Includes accounts:

(a)                                  Each account in the Collateral will represent the valid, legally
enforceable obligation of third parties and will not be evidenced by any
instrument or chattel paper, except for credits and offsets customary to Debtor’s
business.

(b)                                 The office where Debtor keeps its records concerning accounts, if
any, is the address of Debtor set forth at the beginning of this Security
Agreement.

 

(3)                                  If the Collateral includes instruments, chattel paper or
-documents:

(a)                                  By delivering a copy of this Security Agreement to the broker,
seller, or other person in possession of Collateral that is chattel paper or document,
Security Party will effectively notify that person of Secured Party’s interest
in the Collateral. Delivery of the copy of the Security Agreement will also
constitute Debtor’s instruction to deliver to Secured Party certificates or
other evidence of the Collateral as soon as it is available. Debtor will
immediately deliver to Secured Party all chattel paper and documents that are
Collateral in Debtor’s possession. If that Collateral is hereafter acquired,
Debtor will deliver it to Secured Party immediately following acquisition and
either endorse it to Secured Party’s order or give Secured Party appropriate
executed powers. If any instruments, chattel paper, money or monies, or
documents are, at any time or times, included in the

 

4

 

Collateral, whether as proceeds or otherwise, Debtor will promptly
deliver thee to Secured Party upon the receipt thereof by Debtor, and in any
event promptly upon demand therefore by Secured Party. If necessary, all Collateral
will either be endorsed to Secured Party’s order or accompanied by appropriate
executed powers.

(b)                                 By
means satisfactory to Secured Party, Debtor has perfected or will perfect a
security interest in goods covered by chattel paper, if any, in Collateral.

 

(4)                                  If the Collateral
includes property covered by a Certificate of Title: If any certificate of
title or similar document is, at any time and pursuant to the laws of any
jurisdiction, issued or outstanding with respect to the Collateral or any part
thereof, Debtor will promptly advise Secured Party thereof, and Debtor will
promptly cause the interest of Secured Party to be properly noted thereon, and
if any certificate of title or similar document is so issued or outstanding at
the time this Security Agreement is executed by or on behalf of Debtor, then
Debtor shall have caused the interest of Secured Party so to have been properly
noted at or before the time of such execution; and Debtor will further promptly
deliver to Secured Party any such certificate of title or similar document
issued or outstanding at any time with respect to such Collateral.

 

(5)                                  If the Collateral is
or may become fixtures on real property described herein: This Security
Agreement, upon being filed for record in the real property records of the
county wherein such fixtures are situated, shall operate also as a financing
statement filed as a fixture filing in accordance with Section 9.402(e) of
the Texas Business and Commerce Code upon such of the Collateral which is or
may become fixtures.

 

(6)                                  Debtor has rights in
or the power to transfer the Collateral and its title to the Collateral is free
of all adverse claims, liens, security interests and restrictions on transfer
or pledge except as created by this Security Agreement.

 

(7)                                  All collateral
consisting of goods is located solely in the states and/or states previously
designated and warranted by Debtor to Secured Party.

 

(8)                                  Debtor’s:

(i)            chief executive office
is located in the state previously designated and warranted by Debtor to
Secured Party;

(ij)           state of incorporation
is the state previously designated and warranted by Debtor to Secured Party;
and

(iij)          exact legal name is as
set forth in the first paragraph of this Security Agreement.

 

SECTION VI:
EVENTS OF DEFAULT.

 

Debtor shall
be in default under this Security Agreement upon the happening of any of the
following events or conditions (herein called an “Event of Default”):

 

(1)                                  The failure by Debtor
or any other liable party to pay when due any of the Indebtedness either principal
or interest, or any other sum due under the terms of any instrument evidencing
the Indebtedness.

 

(2)                                  Default by Debtor in
the punctual performance of any of the obligations, covenants, terms or
provisions contained or referred to in this Security Agreement.

 

(3)                                  Any warranty,
representation, or statement contained in this Security Agreement or made or
furnished to Secured Party by or on behalf of Debtor or any other person or
party in connection with this Security Agreement or to induce Secured Party to
make the loans (described in Section III) proves to have been false in any
respect when made or furnished.

 

(4)                                  Loss, theft,
substantial damage, destruction, sale (except as authorized in this Security
Agreement) or encumbrance to or of any of the Collateral, or the making of any
levy, seizure or attachment thereof or thereon.

 

(5)                                  Debtor’s death,
dissolution, termination of existence, insolvency or business failure; the
appointment of a receiver of all or any part of the property of Debtor; an
assignment for the benefit of creditors by Debtor, the calling of a meeting of
creditors of Debtor, or the commencement of any proceeding under any bankruptcy
or insolvency laws by or against Debtor or any guarantor, surety or endorser
for Debtor; or the occurrence of any of such events described in this part (5)
as to any person or party liable for the payment of the obligations, or any
portion thereof.

 

(6)                                  Any statement of the
financial condition of Debtor or of any maker, guarantor, surety or endorser of
any of the Indebtedness proves to be false.

 

(7)                                  The Collateral
becomes, in the judgment of Secured Party, unsatisfactory or insufficient in
character or value.

 

(8)                                  Any maker, guarantor,
surety or endorser under or with respect to the Indebtedness defaults in any
obligation or liability to Secured Party.

 

(9)                                  The occurrence of any
environmentally hazardous spill, discharge or other similar event adversely
affecting the Collateral or the premises in which the Collateral is located,
whether such event occurs on such premises or on other premises.

 

(10)                            Debtor, or any of them, or
any guarantor, fails to timely deliver any and all financial statements, income
tax returns, cash flow information, balance sheets, accounts receivable
reports, or any other business, tax or financial information requested by
Secured Party.

 

SECTION VII:
SECURED PARTY’S RIGHTS AND REMEDIES.

 

A.                                    General.

 

Secured Party may exercise the following rights and remedies either
before or after an Event of Default:

 

(1)                                  Secured Party may
take control of any proceeds of the Collateral.

 

(2)                                  Secured Party may
release any Collateral in Secured Party’s possession to any Debtor, temporarily
or otherwise.

 

(3)                                  Secured Party may
take control of any funds generated by the Collateral, such as refunds from and
proceeds of insurance, and reduce any part of the Indebtedness accordingly or
permit Debtor to use such funds to repair or replace damaged or destroyed
Collateral covered by insurance.

 

(4)                                  Secured Party may
request Debtor from time to time, in Secured Party’s discretion to take any
action and to execute any instrument which Secured Party may deem necessary or
advisable to accomplish the purposes of this Security Agreement including,
without limitation, (a) to ask, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for monies due and to become due
under or in respect of any Collateral; (b) to receive, endorse and collect any
drafts or other instruments, documents and chattel paper in connection with the
preceding actions; (c) to file any claims or take any action or institute any
proceedings which Secured Party may deem necessary or desirable for collection
of any of the Collateral or otherwise to enforce its rights with respect to any
of the Collateral, and (d) to complete and sign on behalf of Debtor one or more
financing statements pertaining to the Collateral and file the same in an
appropriate location. The powers conferred on Secured Party hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon Secured Party to exercise any such powers. Debtor’s appointment of Secured
Party as Debtor’s agent is coupled with an interest and will survive any
disability of Debtor.

 

(5)                                  This Security
Agreement, Secured Party’s rights hereunder and/or the Indebtedness hereby
secured may be assigned in whole and in part from time to time, and in any such
case Secured Party shall be fully discharged from all responsibility with
respect to the Collateral so assigned and the assignee shall be entitled to all
of the rights, privileges and remedies granted in this Security Agreement to
Secured Party to the extent the same are assigned, and Debtor will assert no
claim or defenses he may have against Secured Party against the assignee,
except those granted in this Security Agreement. In addition,
Debtor waives and will not assert against any claims, defenses or set-offs
which Debtor could assert against Secured Party except defenses which cannot be
waived.

 

5

 

(6)                                  Secured Party may
enter upon Debtors premises at any reasonable time to inspect the Collateral
and Debtor’s books and records pertaining to the collateral, and Debtor shall
assist the Secured Party in making any such inspection.

 

(7)                                  Secured Party may
notify the account debtors or obligors of any accounts, chattel paper,
negotiable instruments or other evidence of indebtedness remitted by Debtor to
Secured Party as proceeds to pay Secured Party directly. Secured Party may
contact account debtors directly to verify information furnished by Debtor.

 

(8)                                  Secured Party may
require additional Collateral or reject as unsatisfactory any property
hereafter offered by Debtor as Collateral.

 

(9)                                  Secured Party may
designate, from time to time, a certain percentage of the Collateral as the
loan value and require Debtor to maintain the Indebtedness at or below such
percentage.

 

(10)                            Secured Party may present
for conversion to cash any instrument or investment security or a combination
thereof. But Secured Party shall not have any duty to present for conversion,
any instrument of Collateral in its possession unless it shall have received
from Debtor detailed written instructions to that effect at a time reasonably,
far in advance of the final conversion date to make such conversion possible.

 

The foregoing rights and powers of Secured Party will be in addition
to, and not a limitation upon, any rights and powers of Secured Party given by
law, elsewhere in this Security Agreement, or otherwise.

 

(11)                            Secured Party has no
obligation to attempt to satisfy the Obligations by collecting them from any
other person liable for them and Secured Party may release, modify or waive any
collateral provided by any other person to secure any of the Obligations, all
without affecting Secured Party’s rights against Debtor. Debtor waives any
right it may have to require Secured Party to pursue any third person for any
of the Obligations.

 

(12)                            Secured Party may comply
with any applicable state or federal law requirements in connection with a
disposition of the Collateral and compliance will not be considered adversely
to affect the commercial reasonableness of any sale of the Collateral.

 

(13)                            If Secured Party sells any
of the Collateral upon credit, Debtor will be credited only with payments
actually made by the purchaser, received by Secured Party and applied to the
indebtedness of the Purchaser. In the event the purchaser fails to pay for the
Collateral, Secured Party may resell the Collateral and Debtor shall be
credited with the proceeds of the sale.

 

(15)                            Secured Party have no
obligation to marshall any assets in favor of Debtor, or against or in payment
of:

 

(i)                                     the
Note,

(ij)                                  any
of the other Obligations, or

(iij)                               any
other obligation owed to Secured Party by Debtor or any other person.

 

(16)                            This Security Agreement
shall bind and shall inure to the benefit of the heirs, legatees, executors,
administrators, successors and assigns of Secured Party and shall bind all
persons who become bound as a debtor to this Security Agreement.

 

(17)                            Secured Party does not
consent to any assignment by Debtor except as expressly provided in this
Security Agreement.

 

B.
Remedies in Event of Default

 

During the
existence of any Event of Default, or in the event Secured Party deems itself
insecure in the payment of the Indebtedness, Secured Party may declare the
unpaid principal and unpaid and accrued interest of the Indebtedness
immediately due in whole or part, enforce the Indebtedness, and/or exercise any
rights and remedies granted by the Texas Business and Commercial Code or by
this Security Agreement, including the following:

 

(1)                                  require Debtor to
deliver to Secured Party all books and records relating to the Collateral;

 

(2)                                  require Debtor to
assemble the Collateral and make it available to Secured Party at a place
reasonably convenient to both parties;

 

(3)                                  take possession of
any of the Collateral and for this purpose enter any premises where it is
located if this can be done without breach of the peace and will not be guilty
of, and/or held liable for, trespass;

 

(4)                                  sell, lease, or
otherwise dispose of any of the Collateral in accord with the rights, remedies,
and duties of a Secured Party under Chapters 2 and 9 of the Texas Business And
Commerce Code after giving notice as required by those chapters; unless the
Collateral threatens to decline rapidly in value, is perishable, or would
typically be sold on a recognized market, Secured Party will give Debtor
reasonable notice of any public sale of the Collateral or of a time after which
it may be otherwise disposed of without further notice to Debtor; in this
event, notice will be deemed reasonable if it is mailed, postage prepaid, to
Debtor at the address specified in this agreement at least ten days before any
public sale or ten days before the time when the Collateral may be otherwise
disposed of without further notice to Debtor. Debtor authorizes Secured Party
to disclaim or modify any and all warranties set forth in Section 9.010(d)
and stipulates and agrees that such a disclaimer and/or modification will not
render the sale commercially unreasonable.

 

(5)                                  surrender any
insurance policies covering the Collateral and receive the unearned premium;

 

(6)                                  apply any proceeds
from disposition of the Collateral after default in the manner specified in
Chapter 9 of the Texas Business And Commerce Code, including payment of Secured
Party’s reasonable attorney’s fees and court expenses;

 

(7)                                  if disposition of the
Collateral leaves the Indebtedness unsatisfied, collect the deficiency from all
liable parties. Expenses of retaking, holding, preparing for sale, selling or
the like shall include Secured Party’s reasonable attorney’s fees and legal
costs and/or expenses, and Debtor agrees to pay such costs, expenses, and fees,
plus interest thereon at the maximum rate allowed by applicable law;

 

(8)                                  Secured Party may
retain all or part of the Collateral in full and/or partial satisfaction of the
Indebtedness pursuant to Section 9.620 of the Texas Business And Commerce
Code;

 

(9)                                  Secured Party may,
without demand or notice of any kind, appropriate and apply toward the payment
of any sums then owing to Secured Party and in such order of application as the
Secured Party may from time to time elect, any property, balances, credits,
deposits, accounts or monies of Debtor which for any purpose is in the
possession or control of the Secured Party or any member Bank, branch Bank or
other depository institution of International Bancshares Corporation; and/or

 

(10)                            Secured Party may remedy
any default without waiving the default remedied and may waive any default
without waiving any other prior or subsequent default.

 

SECTION VIII:
ADDITIONAL AGREEMENTS.

 

(1)                                  All notices and other
communications to Secured Party hereunder or in connection herewith shall be
deemed to have been given when received by Secured Party in writing at the
address first shown hereinabove. Any notice or demand or other communication to
Debtor hereunder or in connection herewith may be given and shall conclusively
be deemed and considered to have been given and received upon the deposit
thereof in writing in the United States Mail, duly stamped and addressed to
Debtor either at the street address, the first shown hereinabove, or at the
mailing address, if any, given by and/or for Debtor at the beginning of this agreement
(or at such other address as may have been designated most recently in writing
by Debtor to Secured Party); provided, however, actual notice to Debtor,
however given or received, shall always be effective when given or received.

 

(2)                                  A copy of this
Security Agreement or any financing statement covering the Collateral is
sufficient and may be filed as a financing statement. Information concerning
this security interest may be obtained at the office of Secured Party shown
above.

 

6

 

(3)                                  This Security
Agreement may only be modified or limited by an agreement in writing.

 

(4)                                  This security
interest shall neither affect nor be affected by any other security for any of
the Indebtedness. Neither extensions of any of the Indebtedness nor releases of
any of the Collateral shall affect the validity of this security interest with
reference to any third party. Additionally, foreclosure of this security
interest by lawsuit does not limit Secured Party’s remedies, including the
right to sell the Collateral under the terms of this Security Agreement.
Secured Party shall have the right to exercise all remedies at the same or
different times and no remedy shall be a defense to any other. Secured Party
shall have all rights and remedies granted by law or otherwise in addition to
those provided in this Security Agreement.

 

(5)                                  Secured Party may
remedy any default without waiving it. No delay by Secured Party in exercising
its rights or partially exercising its rights or remedies shall waive further
exercise of those remedies or rights. The failure of Secured Party to exercise
any remedies or rights does not waive subsequent exercise of those remedies or
rights. Any waiver by Secured Party of any default shall not waive any further
default. Secured Party may remedy any default without waiving it. Secured Party’s
waiver of any right in this Security Agreement or any default is binding only
if in writing.

 

(6)                                  Debtor and Secured
Party intend that the Indebtedness shall be in strict compliance with
applicable usury laws. If at any time interest contracted for, charged or
received under any Indebtedness secured by this Security Agreement or otherwise
in connection with this transaction would be usurious under applicable law,
then regardless of the provisions of this Security Agreement or any other
documents or instruments evidencing, securing or otherwise executed in
connection with any Indebtedness secured by this Security Agreement or any
action or event (including, without limitation, prepayment of principal under
the Note or acceleration of maturity by Secured Party) which may occur with
respect to the Note, it is agreed that all sums determined to be usurious shall
be immediately credited by Secured Party to Debtor as a payment of principal
under the Note or if the Note has already been paid, immediately refunded to
Debtor. All compensation which constitutes interest under applicable law in
connection with any Indebtedness secured by this Security Agreement shall be
amortized, prorated, allocated, and spread over the full period of time any
indebtedness is owed by Debtor, to the greatest extent permissible without
exceeding the applicable maximum rate allowed by applicable law in effect from
time to time during such period.

 

(7)                                  Secured Party may
perform any obligation which Debtor fails to perform and Debtor agrees on
demand to reimburse Secured Party immediately for any sums so paid by Secured
Party, including attorneys’ fees and other legal expenses, plus interest on
those sums from the dates of payment at the rate stated in the Note for
matured, unpaid amounts. Any sum to be reimbursed shall be secured by this
Security Agreement. [See Section IV, (9) for insurance reimbursements].

 

(8)                                  This Security
Agreement is being executed and delivered and is intended to be performed in
the State of Texas and shall be construed and enforced in accordance with the
laws of the State of Texas, except to the extent that the Code provides for the
application of the law of the Debtor States. When the context requires,
singular nouns and pronouns include the plural. The rights of Secured Party
under this Security Agreement shall inure to the benefit of its successors and
assigns. Any assignment of part of the Indebtedness and delivery by Secured Party
of any part of the Collateral will fully discharge Secured Party from any and
all responsibility for that portion of the Collateral. Debtor’s Indebtedness
under this Security Agreement shall bind Debtor’s personal representatives,
successors and assigns. If Debtor is more than one, all their representatives,
warranties and agreements are joint and several. If any part of this Security
Agreement is unenforceable, the unenforceability of such provision will not
affect the enforceability of any other provision hereof and all other
provisions will constitute valid provisions.

 

SECTION IX:

 

ARBITRATION - THE PARTIES FURTHER AGREE AS
FOLLOWS:

 

(a) ANY AND ALL CONTROVERSIES BETWEEN THE PARTIES SHALL BE RESOLVED BY
ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION IN EFFECT AT THE TIME OF FILING, UNLESS THE COMMERCIAL
ARBITRATION RULES CONFLICT WITH THIS PROVISION, AND IN SUCH EVENT THE TERMS QF
THIS PROVISION SHALL CONTROL TO THE EXTENT OF THE CONFLICT. ANY ARBITRATION
HEREUNDER SHALL BE BEFORE AT LEAST THREE NEUTRAL ARBITRATORS ASSOCIATED WITH
THE AMERICAN ARBITRATION ASSOCIATION AND SELECTED IN ACCORDANCE WITH THE
COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. FAILURE
OF ANY ARBITRATOR TO DISCLOSE ALL FACTS WHICH MIGHT TO AN OBJECTIVE OBSERVER
CREATE A REASONABLE IMPRESSION OF THE ARBITRATOR’S PARTIALITY, AND/OR MATERIAL
ERRORS OF LAW SHALL BE GROUNDS [IN ADDITION TO ALL OTHERS] FOR VACATUR OF AN
AWARD RENDERED PURSUANT TO THIS AGREEMENT.

 

(b) THE AWARD OF THE ARBITRATORS, OR A MAJORITY OF THEM, SHALL BE
FINAL, AND JUDGMENT UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT, STATE
OR FEDERAL, HAVING JURISDICTION. THE ARBITRATION AWARD SHALL BE IN WRITING AND
SPECIFY THE FACTUAL AND LEGAL BASES FOR THE AWARD. UPON THE REQUEST OF ANY
PARTY, THE AWARD SHALL INCLUDE FINDINGS OF FACT AND CONCLUSIONS OF LAW.

 

(c) ARBITRABLE DISPUTES INCLUDE ANY AND ALL CONTROVERSIES OR CLAIMS
BETWEEN THE PARTIES OF WHATEVER TYPE OR MANNER, INCLUDING WITHOUT LIMITATION,
ANY CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ALL PAST, PRESENT
AND/OR FUTURE CREDIT FACILITIES AND/OR AGREEMENTS INVOLVING THE PARTIES, ANY
TRANSACTIONS BETWEEN OR INVOLVING THE PARTIES, AND/OR ANY ASPECT OF ANY PAST OR
PRESENT RELATIONSHIP OF THE PARTIES, WHETHER BANKING OR OTHERWISE, SPECIFICALLY
INCLUDING ANY ALLEGED TORT COMMITTED BY ANY PARTY.

 

(d) THE PARTIES SHALL ALLOW AND PARTICIPATE IN DISCOVERY IN ACCORDANCE
WITH THE FEDERAL RULES OF CIVIL PROCEDURE FOR A PERIOD OF ONE HUNDRED TWENTY
(120) DAYS AFTER THE FILING OF THE ORIGINAL RESPONSIVE PLEADING. DISCOVERY MAY
CONTINUE THEREAFTER AS AGREED BY THE PARTIES OR AS ALLOWED BY THE ARBITRATORS.
UNRESOLVED DISCOVERY DISPUTES SHALL BE BROUGHT TO THE ATTENTION OF THE
ARBITRATORS BY WRITTEN MOTION FOR PROPER DISPOSITION, INCLUDING RULING ON ANY
ASSERTED OBJECTIONS, PRIVILEGES, AND PROTECTIVE ORDER REQUESTS AND AWARDING
REASONABLE ATTORNEY’S FEES TO THE PREVAILING PARTY.

 

(e) IN THE EVENT THE AGGREGATE OF ALL AFFIRMATIVE CLAIMS ASSERTED EXCEED
$500,000.00, EXCLUSIVE OF INTEREST AND ATTORNEY’S FEES, OR UPON THE WRITTEN
REQUEST OF ANY PARTY, (1) PRIOR TO THE DISSEMINATION OF A LIST OF POTENTIAL
ARBITRATORS, THE AMERICAN ARBITRATION ASSOCIATION SHALL CONDUCT AN IN PERSON
ADMINISTRATIVE CONFERENCE WITH THE PARTIES AND THEIR ATTORNEYS FOR THE
FOLLOWING PURPOSES AND FOR SUCH ADDITIONAL PURPOSES AS THE PARTIES OR THE
AMERICAN ARBITRATION ASSOCIATION MAY DEEM APPROPRIATE, (A) TO OBTAIN ADDITIONAL
INFORMATION ABOUT THE NATURE AND MAGNITUDE OF THE DISPUTE AND THE ANTICIPATED
LENGTH OF HEARINGS AND SCHEDULING; (B) TO DISCUSS THE VIEW OF THE PARTIES ABOUT
ANY TECHNICAL AND/OR OTHER SPECIAL QUALIFICATIONS OF THE ARBITRATORS; AND IC)
TO CONSIDER, WHETHER MEDIATION OR OTHER METHODS OF DISPUTE RESOLUTION MIGHT BE
APPROPRIATE, AND (2) AS PROMPTLY AS PRACTICABLE AFTER THE SELECTION OF THE
ARBITRATORS, A PRELIMINARY HEARING SHALL BE HELD AMONG THE PARTIES, THEIR
ATTORNEYS AND THE ARBITRATORS. WITH THE AGREEMENT OF THE ARBITRATORS AND THE
PARTIES, THE PRELIMINARY HEARING MAY BE CONDUCTED BY TELEPHONE CONFERENCE CALL
RATHER THAN IN PERSON. AT THE PRELIMINARY HEARING THE MATTERS THAT MAY BE
CONSIDERED SHALL INCLUDE, WITHOUT LIMITATION, A PREHEARING SCHEDULING ORDER
ADDRESSING (A) EACH PARTY’S DUTY TO SUBMIT A DETAILED STATEMENT OF CLAIMS,
DAMAGES AND/OR DEFENSES. A STATEMENT OF THE ISSUES ASSERTED BY EACH PARTY AND
ANY LEGAL AUTHORITIES THE PARTIES MAY WISH TO BRING TO THE ATTENTION OF THE
ARBITRATORS; (B) RESPONSES AND/OR REPLIES TO THE PLEADINGS FILED IN COMPLIANCE
WITH SUBPART 2(A); (C) STIPULATIONS REGARDING ANY UNCONTESTED FACTS; (D)
EXCHANGE AND PREMARKING OF ALL DOCUMENTS WHICH EACH PARTY BELIEVES MAY BE
OFFERED AT THE FINAL ARBITRATION HEARING; (E) THE IDENTIFICATION AND
AVAILABILITY OF WITNESSES, INCLUDING EXPERTS, AND SUCH ADDITIONAL MATTERS
REGARDING WITNESSES INCLUDING THEIR BIOGRAPHIES AND A SHORT SUMMARY OF THEIR
EXPECTED TESTIMONY, (F) WHETHER A STENOGRAPHIC OR OTHER OFFICIAL RECORD OF THE
PROCEEDINGS SHALL BE MAINTAINED; AND (G) THE POSSIBILITY OF UTILIZING MEDIATION
OR OTHER ALTERNATIVE METHODS OF DISPUTE RESOLUTION.

 

(f) FOR PURPOSES OF THIS PROVISION, “THE PARTIES” MEANS DEBTOR AND
SECURED PARTY, AND EACH AND ALL PERSONS AND ENTITIES SIGNING THIS AGREEMENT OR
ANY OTHER AGREEMENTS BETWEEN OR AMONG ANY OF THE PARTIES AS PART OF THIS
TRANSACTION. “THE PARTIES” SHALL ALSO INCLUDE INDIVIDUAL PARTNERS, AFFILIATES,
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS

 

7

 

AND/OR
REPRESENTATIVES OF ANY PARTY TO SUCH DOCUMENTS, AND SHALL INCLUDE ANY OTHER
OWNER AND HOLDER OF THIS AGREEMENT.

 

(g) THE PARTIES SHALL HAVE THE RIGHT TO INVOKE SELF-HELP REMEDIES (SUCH
AS SET-OFF, NOTIFICATION OF ACCOUNT DEBTORS, SEIZURE AND/OR FORECLOSURE OF
COLLATERAL, AND NON-JUDICIAL SALE OF PERSONAL PROPERTY AND REAL PROPERTY
COLLATERAL) BEFORE, DURING OR AFTER ANY ARBITRATION AND/OR REQUEST ANCILLARY OR
PROVISIONAL JUDICIAL REMEDIES (SUCH AS GARNISHMENT, ATTACHMENT; SPECIFIC
PERFORMANCE, RECEIVER, INJUNCTION OR RESTRAINING ORDER, AND SEQUESTRATION)
BEFORE OR AFTER ANY ARBITRATION. THE PARTIES NEED NOT AWAIT THE OUTCOME OF THE
ARBITRATION BEFORE USING SELF-HELP REMEDIES. USE OF SELF-HELP OR ANCILLARY
AND/OR PROVISIONAL JUDICIAL REMEDIES SHALL NOT OPERATE AS A WAIVER OF EITHER
PARTY’S RIGHT TO COMPEL ARBITRATION. ANY ANCILLARY OR PROVISIONAL REMEDY WHICH
WOULD BE AVAILABLE FROM A COURT AT LAW SHALL BE AVAILABLE FROM THE ARBITRATORS.

 

(h) THE PARTIES AGREE THAT ANY ACTION REGARDING ANY CONTROVERSY BETWEEN
THE PARTIES SHALL EITHER BE BROUGHT BY ARBITRATION, AS DESCRIBED HEREIN, OR BY
JUDICIAL PROCEEDINGS, BUT SHALL NOT BE PURSUED SIMULTANEOUSLY IN DIFFERENT OR
ALTERNATIVE FORMS. A TIMELY WRITTEN NOTICE OF INTENT TO ARBITRATE PURSUANT TO
THIS AGREEMENT STAYS AND/OR ABATES ANY AND ALL ACTION IN A TRIAL COURT, SAVE
AND EXCEPT A HEARING ON A MOTION TO COMPEL ARBITRATION AND/OR THE ENTRY OF AN
ORDER COMPELLING ARBITRATION AND STAYING AND/OR ABATING THE LITIGATION PENDING
THE FILING OF THE FINAL AWARD OF THE ARBITRATORS. ALL REASONABLE AND NECESSARY
ATTORNEY’S FEES AND ALL TRAVEL COSTS SHALL BE AWARDED TO THE PREVAILING PARTY
ON ANY MOTION TO COMPEL ARBITRATION AND MUST BE PAID TO SUCH PARTY WITHIN TEN
(10) DAYS OF THE SIGNING OF THE ORDER COMPELLING ARBITRATION.

 

(i) ANY AGGRIEVED PARTY SHALL SERVE A WRITTEN NOTICE OF INTENT TO
ARBITRATE TO ANY AND ALL OPPOSING PARTIES WITHIN 360 DAYS AFTER DISPUTE HAS
ARISEN. A DISPUTE IS DEFINED TO HAVE ARISEN ONLY UPON RECEIPT OF SERVICE OF
JUDICIAL PROCESS, INCLUDING SERVICE OF A COUNTERCLAIM, FAILURE TO SERVE A
WRITTEN NOTICE OF INTENT ‘TO ARBITRATE WITHIN THE TIME SPECIFIED ABOVE SHALL BE
DEEMED A WAIVER OF THE AGGRIEVED PARTY’S RIGHT TO COMPEL ARBITRATION OF SUCH
CLAIM. THE ISSUE OF WAIVER PURSUANT TO THIS AGREEMENT IS AN ARBITRABLE DISPUTE.

 

(j) ACTIVE PARTICIPATION IN PENDING LITIGATION DURING THE 360 DAY
NOTICE PERIOD, WHETHER AS PLAINTIFF OR DEFENDANT, IS NOT A WAIVER OF THE RIGHT
TO COMPEL ARBITRATION. ALL DISCOVERY OBTAINED IN THE PENDING LITIGATION MAY BE
USED IN ANY SUBSEQUENT ARBITRATION PROCEEDING.

 

(k) THE PARTIES FURTHER AGREE THAT (i) NO ARBITRATION PROCEEDING
HEREUNDER SHALL BE CERTIFIED AS A CLASS ACTION OR PROCEED AS A CLASS ACTION, OR
ON A BASIS INVOLVING CLAIMS BROUGHT IN A PURPORTED REPRESENTATIVE CAPACITY ON
BEHALF OF THE GENERAL PUBLIC, OTHER CUSTOMERS OR POTENTIAL CUSTOMERS OR PERSONS
SIMILARLY SITUATED AND (ii) NO ARBITRATION PROCEEDING HEREUNDER SHALL BE
CONSOLIDATED WITH, OR JOINED IN ANY WAY WITH, ANY OTHER ARBITRATION PROCEEDING.

 

(l) ANY ARBITRATOR SELECTED SHALL BE KNOWLEDGEABLE IN THE SUBJECT MATTER
OF THE DISPUTE. EACH OF THE PARTIES SHALL PAY AN EQUAL SHARE OF THE ARBITRATION
COSTS, FEES, EXPENSES, AND OF THE ARBITRATORS’ FEES, COSTS AND EXPENSES.

 

(m) ALL STATUTES OF LIMITATIONS WHICH WOULD OTHERWISE BE APPLICABLE
SHALL APPLY TO ANY AND ALL CLAIMS ASSERTED IN ANY ARBITRATION PROCEEDING
HEREUNDER AND THE COMMENCEMENT OF ANY ARBITRATION PROCEEDING TOLLS SUCH
STATUTES OF LIMITATIONS.

 

(n) IN ANY ARBITRATION PROCEEDING SUBJECT TO THIS PROVISION, THE
ARBITRATORS, OR MAJORITY OF THEM, ARE SPECIFICALLY EMPOWERED TO DECIDE (BY
DOCUMENTS ONLY, OR WITH A HEARING, AT THE ARBITRATORS’ SOLE DISCRETION)
PRE-HEARING MOTIONS WHICH ARE SUBSTANTIALLY SIMILAR TO PRE-HEARING MOTIONS TO
DISMISS AND MOTIONS FOR SUMMARY ADJUDICATION.

 

(o) THIS ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION,
AMENDMENT, OR EXPIRATION OF THE AGREEMENT IN WHICH THIS PROVISION IS CONTAINED,
UNLESS ALL OF THE PARTIES OTHERWISE EXPRESSLY AGREE IN WRITING.

 

(p) THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT EVIDENCES A TRANSACTION
INVOLVING INTERSTATE COMMERCE. THE FEDERAL ARBITRATION ACT SHALL GOVERN THE
INTERPRETATION, ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION CLAUSE
OF THIS AGREEMENT.

 

(q) THE ARBITRATORS, OR A MAJORITY OF THEM, SHALL AWARD ATTORNEY’S FEES
AND COSTS TO THE PREVAILING PARTY PURSUANT TO THE TERMS OF THIS AGREEMENT.

 

(r) NEITHER THE PARTIES NOR THE ARBITRATORS MAY DISCLOSE THE EXISTENCE,
CONTENT, OR RESULTS OF ANY ARBITRATION HEREUNDER WITHOUT PRIOR WRITTEN CONSENT
OF ALL PARTIES AND/OR COURT ORDER.

 

(s) VENUE OF ANY ARBITRATION PROCEEDING HEREUNDER SHALL BE IN BEXAR COUNTY,
TEXAS.

 

SECTION X.
Miscellaneous.

 

(a) Security
Interest Absolute. All rights of the Secured Party and the security
interests hereunder shall be absolute and unconditional irrespective of:

 

(i)            any
change in the time, manner, amount or place of payment of, or in any other term
of, all or any of the Indebtedness, or any other amendment or waiver of or any
consent to any departure from the Promissory Note or any other Loan Document;

(ii)           any
exchange or release or nonperfection of all or any part of the Collateral or
any other collateral, or any release from, amendment to, waiver of or consent
to departure from any guaranty, for all or any of the Indebtedness; or.

(iii)          to
the fullest extent permitted by law, any other circumstances which might
otherwise constitute a defense available to, or a discharge of the Debtor or a
third party pledgor.

 

(b) Indemnification.
The Debtor agrees to indemnify the Secured Party and hold the Secured Party
harmless from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind of nature whatsoever which may be imposed on, incurred by, or
asserted against the Secured Party in any way relating, in any way, arising out
of or in connection with this Security Agreement, the Loan Documents or the
transactions contemplated hereby or thereby other than those arising out of the
Secured Party’s breach, default, negligence or willful misconduct in its
obligations under this Security Agreement or the Loan Documents. Without
limitation of the foregoing, the Debtor will reimburse the Secured Party for
all expenses (including expenses for legal services of every kind) of, or
incidental to, the negotiation of, entering into and enforcement of any of the
provisions hereof and of the Indebtedness, and any actual or attempted sale,
lease or other disposition of, and any exchange, enforcement, collection,
compromise or settlement of any of the Collateral and defending or asserting
the rights and claims of the Secured Party in respect thereof, and for the care
of the Collateral and defending or asserting the rights and claims of the
Secured Party in respect thereof, by litigation or otherwise, including expense
of insurance, and all such expenses shall be the Debtor’s Indebtedness.

 

8

 

SECTION XI:
NO ORAL AGREEMENTS

 

THIS
WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR. CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENT OF THE PARTIES.

 

THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

 

	
  Dated

  	
  DECEMBER 17, 2004

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LANCER
  PARTNERSHIP, LTD.

  	
   

  	
   

  	
   

  
	
  DEBTOR: a Texas limited partnership

  	
  DEBTOR:

  	
   

  
	
  By: Lancer Capital Corporation,

  	
   

  	
   

  
	
  a Delaware corporation,

  	
  By:

  	
   

  
	
  General Partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Scott Adams

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Scott Adams

  	
   

  	
  DEBTOR:

  	
   

  
	
  Title:

  	
  Treasurer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  DEBTOR

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  DEBTOR:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Debtor:

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  DEBTOR:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  DEBTOR

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  SECURED PARTY

  	
  International Bank of Commerce

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  By: /s/ Richard L. Capps

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  	
   

  	
   

  	
   

  
	
   

  	
  Name: Richard L. Capps

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title: Senior Vice President

  	
   

  	
   

  	
   

  
											

 

9

 

EXHIBIT “A”

 

A.                                   Equipment. All
equipment of Debtor now or hereafter acquired by Debtor, including without
limitation, including without limitation, furniture, machinery, vehicles and
trade fixtures, together with any and all accessions, attachments and other
additions to, substitutes and replacements for and improvements of the
equipment, whether now owned or at any time hereafter acquired or made,
together with all tools, parts and appurtenances now or at any timer hereafter
used in and together with all proceeds of the equipment described or referred
to above, including insurance payable by reason of loss or damage thereto, and
all proceeds of any policy of insurance required on the Collateral by Secured
Party, including any refunds or unearned premiums in connection with any
cancellation, adjustment or termination of any such policy of insurance.

 

B.                                     Inventory. All
inventory of Debtor, whenever acquired and whether now or hereafter existing,
including but not limited to all goods, wares and merchandise intended for sale
or lease by Debtor or to be furnished by Debtor, under contracts of service and
all raw materials, goods in process, finished goods and supplies of every
nature used or usable in connection with the manufacturing, processing,
packing, shipping, advertising, selling, leasing or furnishing of such
services, goods, wares and merchandise; all certificates of title, manufacture’s
statements of origin and other documents arising from or related to such inventory;
and all accessions, attachments and other additions to, substitutes for, replacements
for, improvements to and returns of such inventory; and all proceeds of such inventory.

 

C.                                     Fixtures.

 

(1)                                  All of the property, personal or otherwise, whether now existing
or hereafter arising, existing or created, now or hereafter attached to or
incorporated into or used in or about the Debtor’s premises, including all
furniture, appliances, furnishings, goods, equipment, and machinery owned by
Debtor and other tangible personal property now or hereafter affixed, attached
or related to such property or now or hereafter affixed, attached or related to
such property or used in connection therewith, and all replacements,
substitutions and additions for or to any of the foregoing;

 

(2)                                  All accessories, attachments and other additions to, substitutes
and replacements for, and improvements of, the property described in (a) above,
whether now owned or at any time hereafter acquired or made, together with all
tools, parts and appurtenances now or at any time used in connection therewith;

 

(3)                                  All products and proceeds, including, without limitation,
insurance proceed of, and additions, improvements and accessions to, all and
any of the property described above, excluding proceeds used to replace
worn-out or obsolete equipment or other property.

 

D.                                    Accounts Receivable. All
accounts and chattel paper of Debtor, whenever acquired and whether now or
hereafter existing, including, but not limited to, accounts and chattel paper which
arise out of: (i) the sale or other disposition of goods; (ii) the furnishing
of services; (iii) the furnishing of, the use of, or the lease of any of the
Collateral, and (iv) the agreement to provide any of the above; and all
proceeds relating to, resulting from or arising in connection with any such
accounts and/or chattel paper.

 

This Security Agreement is being executed
pursuant to the terms and provisions of that certain Loan Agreement of even
date herewith between Debtor and Secured Party and which Loan Agreement will
govern in case of conflict with this Agreement.

 

Together with all books, records, files,
computer software, documents and other information pertaining to, and all
containers and packages for, the property described or referred to in
subsections A through D above, and the proceeds of all of the foregoing.

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