Document:

Exhibit 10.1

 

MULTIPLE ADVANCE TERM PROMISSORY NOTE

(With
Extended Maturity Date Option)

 

	
  $7,500,000.00

  	
  February           ,
  2008

  

 

I.              COVENANT TO PAY.

 

1.1           Promise to Pay. 
FOR VALUE RECEIVED, GLOBAL GEOPHYSICAL SERVICES, INC., a Delaware
corporation, d/b/a GGS Seismic, Inc.; GGS INTERNATIONAL HOLDINGS, INC., a
Texas corporation; and AUTOSEIS, INC., a Texas corporation (herein called “Maker”,
whether one or more), promises to pay to the order of CITIBANK, N.A., a
national banking association [herein, together with all subsequent holders of
this Promissory Note (“Note”), called “Payee”], on or before the
date in February, 2009 corresponding to the date hereof (“Maturity Date”),
unless extended pursuant to Section III hereof, as hereinafter provided,
the principal sum of SEVEN MILLION FIVE HUNDRED THOUSAND AND NO/100 DOLLARS
($7,500,000.00), or so much thereof as may actually be outstanding hereunder,
together with interest on the unpaid principal balance from time to time
outstanding at the rate herein specified and otherwise in strict accordance
with the terms and provisions hereof.

 

II.             INTEREST RATE COMPUTATION.

 

2.1           Interest Rate. 
Except as otherwise provided herein, interest on the principal balance
of this Note outstanding from time to time shall accrue at the lesser of (a) the
Applicable Rate (as defined herein) or (b) the Maximum Lawful Rate (as
defined herein).

 

2.2           Default Rate. 
Upon the occurrence of an Event of Default hereunder or under any of the
Loan Documents (as defined herein) which continues beyond any applicable grace
or cure period, at the option of the Payee, the principal balance of this Note
then outstanding shall bear interest for the period beginning with the date of
occurrence of such default at the Default Rate (as defined herein).

 

2.3           Definitions. 
As used in this Note and the Loan Documents, the following terms shall
have the respective meanings indicated below:

 

“Applicable Rate” shall mean, at any time, the
rate of interest per annum determined in accordance with Annex I of
the Loan Agreement.

 

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Initials

 

 

“Charges” shall mean all fees and charges, if
any, contracted for, charged, received, taken or reserved by Payee in
connection with the transactions relating to this Note and the indebtedness
evidenced hereby or by the Loan Documents which are treated as interest under
applicable law.

 

“Deed of Trust” shall mean that certain Deed of
Trust dated of even date herewith, executed by Maker in favor of Payee, as
security for this Note.

 

“Default Rate” shall mean the Applicable Rate
plus FIVE PERCENT (5%) per annum.

 

“Event of Default” shall have the meaning
ascribed to such term as provided in any of the Loan Documents.

 

“Extended Maturity Date” shall mean the date in
February, 2019 corresponding to the date hereof.

 

“Extended Maturity Date Option” shall mean the
option to extend the Maturity Date to the Extended Maturity Date pursuant to Section 3.10
of the Loan Agreement.

 

“Loan Agreement” shall mean the Construction
Loan Agreement of even date herewith by and between Maker, as borrower, and
Payee, as lender, governing the loan evidenced by this Note, as the same may be
modified and amended from time to time as therein provided.

 

“Loan Documents” shall mean, collectively, the
Loan Agreement, this Note, the Deed of Trust, any Guaranty, and all the other
documents evidencing, securing or pertaining to the transaction in which the
indebtedness evidenced hereby was incurred.

 

“Maturity Date” shall mean have the meaning set
forth on page one.

 

“Maximum Lawful Rate” shall have the meaning
ascribed to such term in Section 5.3 hereof.

 

2.4           Interest Limitation Recoupment. 
Notwithstanding anything in this Note to the contrary, if at any time (i) interest
at the Applicable Rate, (ii) interest at the Default Rate, if applicable,
and (iii) the Charges computed over the full term of this Note, exceed the
Maximum Lawful Rate, then the rate of interest payable hereunder, together with
all Charges, shall be limited to the Maximum Lawful Rate; provided, however,
that any subsequent reduction in the Applicable Rate shall not cause a
reduction of the rate of interest payable hereunder below 

 

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Initials

 

2

 

the Maximum Lawful Rate until the total amount of interest earned
hereunder, together with all Charges, equals the total amount of interest which
would have accrued at the Applicable Rate if such interest rate had at all
times been in effect.  Changes in the
Applicable Rate resulting from a change in the Prime Rate shall be subject to
the provisions of this paragraph.

 

2.5           Computation Period. 
Interest on the indebtedness evidenced by this Note shall be computed on
the basis of the actual number of days in a given month and year and shall
accrue on the actual number of days any principal balance hereof is
outstanding.

 

III.           PAYMENTS.

 

3.1           Payment Schedule.  The principal
balance of this Note together with accrued but unpaid interest thereon shall be
payable in consecutive monthly installments as follows:

 

1.             The first ELEVEN (11) of such monthly installments
shall each be in an amount equal to the interest which has accrued to the date
of such installment, at a rate equal to the Applicable Rate with the first such
installment of interest only becoming due and payable one (1) month from
the date hereof, with subsequent installments of interest only becoming due and
payable on the same day of each succeeding month thereafter;

 

2.             If the Extended Maturity Date Option is available and
exercised, then the TWELFTH (12th) installment shall also be interest
only at the Applicable Rate, but if the Extended Maturity Date Option is not
available or exercised, then the TWELFTH (12th) installment shall be
in the amount of all the principal plus the then unpaid accrued interest then
owing hereon and shall be due and payable on the Maturity Date;

 

3.             If the Extended Maturity Date Option is available and
exercised, then the next ONE HUNDRED NINETEEN (119) installments shall be
comprised of principal including accrued interest, and shall be in an amount
equal to FIFTY-FOUR THOUSAND FIVE HUNDRED FOURTEEN AND 05/100 DOLLARS
($54,514.05), including the then unpaid accrued interest with the first such
installment to be due on the date in March, 2009 corresponding to the date
hereof, with a like installment of principal including 

 

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Initials

 

3

 

accrued interest to become due and payable on the same
day of each succeeding month thereafter; and

 

4.             If the Extended Maturity Date Option is exercised,
then the ONE HUNDRED THIRTY SECOND (132nd) and final installment
shall be the amount of the unpaid principal balance plus all accrued interest
then due and owing hereon and shall be due and payable on the Extended Maturity
Date.

 

THE
PRINCIPAL INCLUDING ACCRUED INTEREST PAYMENT SET FORTH IN SUBPARAGRAPH 3
ABOVE WAS CALCULATED ASSUMING THAT THE INTEREST RATE DETERMINED PURSUANT TO
ANNEX I OF THE LOAN AGREEMENT EQUALS 6.18%. 
BORROWER ACKNOWLEDGES THAT THE AMOUNT OF SAID PAYMENTS CAN ONLY BE
DETERMINED WHEN THE INTEREST RATE IS CALCULATED PURSUANT TO ANNEX I OF THE
LOAN AGREEMENT.  ACCORDINGLY, BORROWER
UNDERSTANDS THAT THE LENDER RESERVES THE RIGHT TO ADJUST UPWARD OR DOWNWARD THE
AMOUNT OF PRINCIPAL INCLUDING ACCRUED INTEREST PAYMENTS SET FORTH IN
SUBPARAGRAPH 3 ABOVE IN ACCORDANCE WITH THE TERMS OF ANNEX I TO THE
LOAN AGREEMENT.

 

In the event the Extended Maturity Date Option is
available and exercised and the then unpaid principal balance owing hereon is
less than the face amount hereof, the Payee shall, if requested by the Maker,
adjust downward the amount of the monthly principal payments due during the
Extended Maturity Date Option to the amount that results from using the same
calculation method used to determine the monthly principal payment described
above.  Any such downward adjustment
shall be calculated by the Payee and, absent manifest error, shall be final.

 

3.2           Application. 
All payments on this Note shall, at the sole option of Payee, be applied
at any time and from time to time and in any order, to the following: (i) the
payment of accrued but unpaid interest hereon, (ii) the payment or
reimbursement of any expenses, costs or obligations (other than the principal
hereof and interest hereon) for which Maker shall be obligated or Payee
entitled pursuant to the provisions hereof or of the other Loan Documents, and (iii) the
payment of all or any portion of the principal balance then outstanding
hereunder, in either the direct or inverse order of maturity.

 

3.3           Other Payments. 
In the event that as a matter of grace, any partial payment is accepted
hereon, the same shall not operate to defer or reduce the 

 

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Initials

 

4

 

amount of any of the scheduled required monthly installment payments of
interest and/or principal required to be made pursuant to the terms hereof; and
each and every such scheduled monthly installment payment shall be paid in full
when due until this Note has been paid in full. 
In the event that pursuant to the provisions of the Deed of Trust (in
connection with the application of proceeds of insurance or condemnation awards
to the indebtedness evidenced by this Note) any partial payment is received
hereon, the principal payments due during the Extended Maturity Date Option
will be recalculated so that, taking into account the amount prepaid, the
initial amortization schedule is maintained.

 

3.4           Place.  All payments
hereunder shall be made to Payee at its offices located in Houston, Texas, at
the address of Payee as specified herein or as Payee may from time to time
designate in writing to Maker.

 

3.5           Business Days. 
If any payment of principal or interest on this Note shall become due
and payable on a Saturday, Sunday or any other day on which Payee is not open
for normal business, such payment shall be made on the next succeeding business
day of Payee.  Any such extension of time
for payment shall be included in computing interest which has accrued and shall
be payable in connection with such payment.

 

3.6           Manner of Payment. 
All amounts payable hereunder are payable in lawful money or legal
tender of the United States of America. 
All payments hereunder shall be made by transferring immediately
available federal funds by bank wire or interbank transfer for the account of
Payee provided, however, that any payment of principal or interest received
after 2:00 p.m. Central time shall be deemed to have been received by
Payee on the next business day and shall bear interest accordingly.  If and so long as Payee directs Maker to make
payments to a servicing agent, then payments may be made by check.  Payments made by check will not be deemed
made until good funds for such check are received by Payee or the servicing
agent.

 

3.7           Prepayment.  The Maker
may, so long as no Event of Default then exists, prepay all or any portion of
the indebtedness evidenced hereby during the Extended Maturity Date Option so
long as such prepayment is accompanied by a prepayment penalty calculated as
follows:  (i) if the prepayment
occurs anytime prior to February 28, 2011 such prepaid amount must be
accompanied by a prepayment penalty equal to three (3%) percent of the amount
prepaid; (ii) if the prepayment occurs between March 1, 2011 and February 28,
2015 such prepaid amount must be accompanied by a prepayment penalty equal to
two (2%) percent of the amount prepaid; and (iii) if the prepayment occurs
anytime between March 1, 2015 and February 28, 2018 such prepaid
amount must be accompanied 

 

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Initials

 

5

 

by a prepayment penalty equal to one (1%) percent of the amount
prepaid.  Prepayments occurring prior to
the Extended Maturity Date Option shall only be subject to a prepayment
penalty, if any, provided for in Annex 1 of the Loan Agreement.

 

3.8           Escrow Payment. 
In addition to the payment of principal and interest as otherwise
specified herein, Payee may require Maker to make payments to establish an
escrow account for the payment of ad valorem taxes and insurance premiums, all
as specified in the Deed of Trust.

 

3.9           Late Charge. 
In addition to the payments otherwise specified herein, subject to the
provisions of Section 5.3 hereof and Section 7.1 of the
Loan Agreement, if Maker fails, refuses or neglects to pay, in full, any
installment or portion of the indebtedness evidenced hereby, as and when same
shall be due and payable, then Maker shall be obligated to pay to Payee a late
charge equal to five percent (5%) of the amount of such delinquent payment or
$250.00, whichever is less, to compensate Payee for Maker’s default and the
additional costs and administrative efforts required by reason of such default.

 

IV.           DEFAULT AND REMEDIES.

 

4.1           Default.  An “Event
of Default” shall occur hereunder if (i) Maker shall fail, refuse or
neglect to pay, in full, any installment or portion of the indebtedness
evidenced hereby, (A) when due or within two (2) days of when due, or
(B) upon acceleration or when the indebtedness evidenced hereby shall
otherwise become due and payable, or (ii) an Event of Default (as defined
and used in any of the other Loan Documents) shall occur and continue beyond
any applicable grace or cure period under any of the other Loan Documents.

 

4.2           Remedies.  If an Event
of Default shall occur under this Note or any of the Loan Documents (as herein
defined), then Payee may, at its option, without notice or demand (except as
otherwise provided herein or in the other Loan Documents), declare the unpaid
principal balance of, and the accrued but unpaid interest on, this Note
immediately due and payable, foreclose all liens and security interests
securing payment hereof, pursue any and all other rights, remedies and
recourses available to Payee or pursue any combination of the foregoing.  All remedies hereunder, under the Loan
Documents and at law or in equity shall be cumulative.

 

4.3           Waiver.  Except as
specifically provided in the Loan Documents, Maker and any endorsers or
guarantors hereof severally waive presentment and demand for payment, notice of
intent to accelerate maturity, notice of acceleration 

 

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Initials

 

6

 

of maturity, protest and notice of protest and non-payment, bringing of
suit and diligence in taking any action to collect any sums owing hereunder or
in proceeding against any of the rights and collateral securing payment
hereof.  Maker and any endorsers or
guarantors hereof agree (i) that the time for any payments hereunder may
be extended from time to time without notice and consent, (ii) to the
acceptance of further collateral, and/or (iii) the release of any existing
collateral for the payment of this Note, all without in any manner affecting
their liability under or with respect to this Note.  No extension of time for the payment of this
Note or any installment hereof shall affect the liability of Maker under this
Note or any endorser or guarantor hereof even though the Maker or such endorser
or guarantor is not a party to such agreement.

 

4.4           No Waiver.  Failure of
Payee to exercise any of the options granted herein to Payee upon the happening
of one or more of the events giving rise to such options shall not constitute a
waiver of the right to exercise the same or any other option at any subsequent
time in respect to the same or any other event. 
The acceptance by Payee of any payment hereunder that is less than
payment in full of all amounts due and payable at the time of such payment
shall not constitute a waiver of the right to exercise any of the options
granted herein to Payee at that time or at any subsequent time or nullify any
prior exercise of any such option without the express written acknowledgment of
the Payee.

 

4.5           Collection Costs. 
Maker agrees to pay all costs of collection hereof when incurred,
including reasonable attorneys’ fees, whether or not any legal action shall be
instituted to enforce this Note.

 

V.            MISCELLANEOUS.

 

5.1           Notices.  All notices
or other communications required or permitted to be given pursuant hereto shall
be in writing and shall be deemed properly given if (i) mailed by first
class United States mail, postage prepaid, registered or certified with return
receipt requested, (ii) by delivering same in person to the intended
addressee, or (iii) by delivery to an independent, nationally or locally
recognized, third party commercial delivery service for same day or next day
delivery and providing for evidence of receipt at the office of the intended
addressee.  Notice so mailed shall be
effective upon its deposit with the United States Postal Service or any
successor thereto; notice sent by such a commercial delivery service shall be
effective upon delivery to such commercial delivery service; notice given by
personal delivery shall be effective only if and when received by the
addressee; and notice given by other means shall be effective only if and when
received at the designated address of the intended addressee.  Either party shall have the right to change
its address for notice 

 

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Initials

 

7

 

hereunder to any other location within the continental United States by
the giving of thirty (30) days’ notice to the other party in the manner set
forth herein.  For purposes of such
notices, the addresses of the parties shall be as follows:

 

	
  Maker:

  	
   

  	
  Global Geophysical Services, Inc.

  
	
   

  	
   

  	
  3535 Briarpark Drive, Suite 200

  
	
   

  	
   

  	
  Houston, Texas 77042

  
	
   

  	
   

  	
  Attn: Secretary

  
	
   

  	
   

  	
   

  
	
  With copy to:

  	
   

  	
  Global Geophysical Services, Inc.

  
	
   

  	
   

  	
  3535 Briarpark Drive, Suite 200

  
	
   

  	
   

  	
  Houston, Texas 77042

  
	
   

  	
   

  	
  Attn: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
  Payee:

  	
   

  	
  Citibank, N.A.

  
	
   

  	
   

  	
  2000 West Sam Houston Parkway South

  
	
   

  	
   

  	
  Suite 600

  
	
   

  	
   

  	
  Houston, Texas 77042

  
	
   

  	
   

  	
  Attn: Joey Powell

  

 

5.2           Governing Law.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.  THIS NOTE IS PERFORMABLE IN
HARRIS COUNTY, TEXAS.  Any
action or proceeding under or in connection with this Note against Maker or any
other party ever liable for payment of any sums of money payable on this Note
may be brought in any state or federal court in Harris County, Texas.  Maker and each such other party hereby
irrevocably (i) submits to the nonexclusive jurisdiction of such courts,
and (ii) waives any objection it may now or hereafter have as to the venue
of any such action or proceeding brought in such court or that such court is an
inconvenient forum.

 

5.3           Interest Provisions.

 

(a)           Savings Clause. 
It is expressly stipulated and agreed to be the intent of Maker and
Payee at all times to comply strictly with the applicable Texas law governing
the maximum rate or amount of interest payable on this Note or the Related
Indebtedness (or applicable United States federal law to the extent that it
permits Payee to contract for, charge, take, reserve or receive a greater
amount of interest than under Texas law). 
If the applicable law is ever judicially interpreted so as to render
usurious any amount (i) contracted for, charged, taken, reserved or 

 

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Initials

 

8

 

received pursuant
to this Note, any of the other Loan Documents or any other communication or
writing by or between Maker and Payee related to the transaction or
transactions that are the subject matter of the Loan Documents, (ii) contracted
for, charged or received by reason of Payee’s exercise of the option to
accelerate the maturity of this Note and/or the Related Indebtedness, or (iii) Maker
will have paid or Payee will have received by reason of any voluntary
prepayment by Maker of this Note and/or the Related Indebtedness, then it is
Maker’s and Payee’s express intent that all amounts charged in excess of the
Maximum Lawful Rate shall be automatically cancelled, ab initio, and all
amounts in excess of the Maximum Lawful Rate theretofore collected by Payee
shall be credited on the principal balance of this Note and/or the Related
Indebtedness (or, if this Note and all Related Indebtedness have been or would
thereby be paid in full, refunded to Maker), and the provisions of this Note
and the other Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the necessity
of the execution of any new document, so as to comply with the applicable law,
but so as to permit the recovery of the fullest amount otherwise called for
hereunder and thereunder; provided, however, if this Note has been paid in full
before the end of the stated term of this Note, then Maker and Payee agree that
Payee shall, with reasonable promptness after Payee discovers or is advised by
Maker that interest was received in an amount in excess of the Maximum Lawful
Rate, either refund such excess interest to Maker and/or credit such excess
interest against this Note and/or any Related Indebtedness then owing by Maker
to Payee.  Maker hereby agrees that as a
condition precedent to any claim seeking usury penalties against Payee, Maker
will provide written notice to Payee, advising Payee in reasonable detail of
the nature and amount of the violation, and Payee shall have sixty (60) days
after receipt of such notice in which to correct such usury violation, if any,
by either refunding such excess interest to Maker or crediting such excess
interest against this Note and/or the Related Indebtedness then owing by Maker
to Payee.  All sums contracted for,
charged or received by Payee for the use, forbearance or detention of any debt
evidenced by this Note and/or the Related Indebtedness shall, to the extent
permitted by applicable law, be amortized or spread, using the actuarial
method, throughout the stated term of this Note and/or the Related Indebtedness
(including any and all renewal and extension periods) until payment in full so
that the rate or amount of interest on account of this Note and/or the Related
Indebtedness does not exceed the Maximum Lawful Rate from time to time in effect
and applicable to this Note and/or the Related Indebtedness for so long as debt

 

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Initials

 

9

 

is
outstanding.  In no event shall the
provisions of Chapter 346 of the Texas Finance Code (which regulates
certain revolving credit loan accounts and revolving triparty accounts) apply
to this Note and/or the Related Indebtedness. 
Notwithstanding anything to the contrary contained herein or in any of
the other Loan Documents, it is not the intention of Payee to accelerate the
maturity of any interest that has not accrued at the time of such acceleration
or to collect unearned interest at the time of such acceleration.

 

(b)           Definitions. 
As used herein, the term “Maximum Lawful Rate” shall mean the
maximum lawful rate of interest which may be contracted for, charged, taken,
received or reserved by Payee in accordance with the applicable laws of the
State of Texas (or applicable United States federal law to the extent that it
permits Payee to contract for, charge, take, receive or reserve a greater
amount of interest than under Texas law), taking into account all Charges (as
herein defined) made in connection with the transaction evidenced by this Note
and the other Loan Documents.  As used
herein, the term “Related Indebtedness” shall mean any and all debt paid
or payable by Maker to Payee pursuant to the Loan Documents or any other
written agreement by or between Maker and Payee related to the transaction or
transactions that are the subject matter of the Loan Documents, except such
debt which has been paid or is payable by Maker to Payee under the Note.

 

(c)           Ceiling Election. 
To the extent that Payee is relying on Chapter 303 of the Texas
Finance Code to determine the Maximum Lawful Rate payable on this Note and/or
the Related Indebtedness, Payee will utilize the weekly ceiling from time to
time in effect as provided in such Chapter 303, as amended.  To the extent United States federal law
permits Payee to contract for, charge, take, receive or reserve a greater
amount of interest than under Texas law, Payee will rely on United States
federal law instead of such Chapter 303 for the purpose of determining the
Maximum Lawful Rate.  Additionally, to
the extent permitted by applicable law now or hereafter in effect, Payee may,
at its option and from time to time, utilize any other method of establishing
the Maximum Lawful Rate under such Chapter 303 or under other applicable
law by giving notice, if required, to Maker as provided by applicable law now
or hereafter in effect.

 

5.4           Captions.  The article
and section headings used in this Note are for convenience of reference only
and shall not affect, alter or define the meaning or interpretation of the text
of any article or section contained in this Note.

 

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Initials

 

10

 

5.5           Joint and Several Liability. 
If this Note is executed by more than one party, each such party shall
be jointly and severally liable for the obligations of Maker under this
Note.  If Maker is a partnership, to the
extent provided for by applicable law, the general partners of Maker shall be
jointly and severally liable hereunder, and each such general partner hereby
waives any requirement of law that in the event of a default hereunder Payee
exhaust any assets of Maker before proceedings against such general partner’s
assets.

 

5.6           NO ORAL AGREEMENTS. 
THIS NOTE AND ALL THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE
AGREEMENT OF MAKER AND PAYEE AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF MAKER AND PAYEE. 
THERE ARE NO ORAL AGREEMENTS BETWEEN MAKER AND PAYEE. 
The provisions of this Note and the Loan Documents may be amended or
revised only by an instrument in writing signed by the Maker and Payee.

 

5.7           Replacement Note. 
Upon receipt of evidence reasonably satisfactory to Maker of the loss
theft, destruction or mutilation of this Note, Maker will execute and deliver
to Payee in lieu thereof, a replacement note in identical form to this Note and
dated as of the date of this Note.  Upon
delivery to Payee of such replacement note, all references in the Deed of Trust
and any other Loan Documents to this Note shall be deemed to be references to
such replacement Note.  In the event that
Maker executes and delivers to Payee a Replacement Note as required herein,
Payee agrees to indemnify and hold Maker harmless from any claims, demands, or
causes of action asserted against Maker, under this original Note.

 

5.8           Records.  The records
of the holder of this Note shall constitute prima  facie evidence
of the amount owing on this Note.

 

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Initials

 

11

 

EXECUTED as of the date
and year first above written.

 

	
   

  	
  MAKER:

  
	
   

  	
   

  	
   

  
	
   

  	
  GLOBAL
  GEOPHYSICAL SERVICES,

  
	
   

  	
  INC., a Delaware corporation, d/b/a GGS 

  Seismic, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Craig
  Lindberg

  
	
   

  	
   

  	
  Senior Vice President, CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GGS
  INTERNATIONAL HOLDINGS, INC., a Texas
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Craig
  Lindberg

  
	
   

  	
   

  	
  Senior Vice President, CFO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AUTOSEIS,
  INC.,

  
	
   

  	
  a Texas
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Craig
  Lindberg

  
	
   

  	
   

  	
  Senior Vice President, CFO

  

 

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Initials

 

12Exhibit 10.2

 

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

 

 

DEED OF TRUST

 

 

by and between

 

 

GLOBAL GEOPHYSICAL SERVICES, INC., a Delaware corporation

as Grantor

 

 

and

 

 

CITIBANK, N.A.,

as Beneficiary

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
  1

  
	
  1.1

  	
  Definitions

  	
  1

  
	
  1.2

  	
  Additional
  Definitions

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  GRANT

  	
  8

  
	
  2.1

  	
  Grant

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  WARRANTIES AND REPRESENTATIONS

  	
  9

  
	
  3.1

  	
  Organization
  and Power

  	
  9

  
	
  3.2

  	
  Validity
  of Loan Documents

  	
  9

  
	
  3.3

  	
  Information

  	
  9

  
	
  3.4

  	
  Title
  and Lien

  	
  10

  
	
  3.5

  	
  Business
  Purposes

  	
  10

  
	
  3.6

  	
  Taxes

  	
  10

  
	
  3.7

  	
  Mailing
  Address

  	
  10

  
	
  3.8

  	
  Relationship
  of Grantor and Beneficiary

  	
  10

  
	
  3.9

  	
  No
  Reliance on Beneficiary

  	
  10

  
	
  3.10

  	
  Environmental
  and Hazardous Substances

  	
  10

  
	
  3.11

  	
  No
  Litigation

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  AFFIRMATIVE COVENANTS

  	
  12

  
	
  4.1

  	
  Payment
  and Performance

  	
  13

  
	
  4.2

  	
  Existence

  	
  13

  
	
  4.3

  	
  Compliance
  with Legal Requirements

  	
  13

  
	
  4.4

  	
  First
  Lien Status

  	
  13

  
	
  4.5

  	
  Payment
  of Impositions

  	
  13

  
	
  4.6

  	
  Repair

  	
  13

  
	
  4.7

  	
  Insurance

  	
  14

  
	
  4.8

  	
  Inspection

  	
  14

  
	
  4.9

  	
  Financial
  Statements

  	
  15

  
	
  4.10

  	
  Payment
  for Labor and Materials

  	
  15

  
	
  4.11

  	
  Further
  Assurances and Corrections

  	
  15

  
	
  4.12

  	
  Tax on
  Deed of Trust

  	
  15

  
	
  4.13

  	
  Statement
  of Unpaid Balance

  	
  15

  
	
  4.14

  	
  Expenses

  	
  16

  
	
  4.15

  	
  Address

  	
  16

  
	
  4.16

  	
  Disclosures

  	
  16

  
	
  4.17

  	
  ERISA

  	
  16

  
	
  4.18

  	
  Delivery
  of Contracts

  	
  16

  
	
  4.19

  	
  Environment
  and Hazardous Substances

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  NEGATIVE COVENANTS

  	
  18

  
	
  5.1

  	
  Use
  Violations

  	
  18

  
	
  5.2

  	
  Waste;
  Alterations

  	
  18

  
	
  5.3

  	
  Replacement
  of Fixtures and Personalty

  	
  18

  

 

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  Page

  
	
   

  	
   

  	
   

  
	
  5.4

  	
  Change
  in Zoning

  	
  18

  
	
  5.5

  	
  No
  Drilling

  	
  18

  
	
  5.6

  	
  No
  Disposition

  	
  18

  
	
  5.7

  	
  No
  Subordinate Mortgages

  	
  18

  
	
  5.8

  	
  Additional
  Obligations

  	
  19

  
	
  5.9

  	
  Business
  Change

  	
  19

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  EVENTS OF DEFAULT

  	
  19

  
	
  6.1

  	
  Payment
  of Indebtedness

  	
  19

  
	
  6.2

  	
  Performance
  of Obligations

  	
  19

  
	
  6.3

  	
  False
  Representation

  	
  19

  
	
  6.4

  	
  Default
  Under Other Lien Document

  	
  19

  
	
  6.5

  	
  Insolvency;
  Bankruptcy

  	
  19

  
	
  6.6

  	
  Dissolution

  	
  20

  
	
  6.7

  	
  No
  Further Encumbrances

  	
  20

  
	
  6.8

  	
  Disposition
  of Mortgaged Property and Beneficial Interest in Grantor

  	
  20

  
	
  6.9

  	
  Condemnation

  	
  20

  
	
  6.10

  	
  Destruction
  of Improvements

  	
  20

  
	
  6.11

  	
  Abandonment

  	
  20

  
	
  6.12

  	
  Guarantor’s
  or Constituent Party’s Default

  	
  20

  
	
  6.13

  	
  Event
  of Default in Loan Documents

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  REMEDIES

  	
  21

  
	
  7.1

  	
  Beneficiary’s
  Remedies Upon Default

  	
  21

  
	
  7.2

  	
  Other
  Rights of Beneficiary

  	
  28

  
	
  7.3

  	
  Possession
  After Foreclosure

  	
  28

  
	
  7.4

  	
  Application
  of Proceeds

  	
  29

  
	
  7.5

  	
  Abandonment
  of Sale

  	
  29

  
	
  7.6

  	
  Payment
  of Fees

  	
  29

  
	
  7.7

  	
  Miscellaneous

  	
  30

  
	
  7.8

  	
  Waiver
  of Deficiency Statute

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  SPECIAL PROVISIONS

  	
  32

  
	
  8.1

  	
  Casualty
  and Condemnation Proceeds

  	
  32

  
	
  8.2

  	
  Reserve
  for Impositions and Insurance Premiums

  	
  33

  
	
  8.3

  	
  INDEMNITY

  	
  34

  
	
  8.4

  	
  Subrogation

  	
  36

  
	
  8.5

  	
  Waiver
  of Setoff

  	
  36

  
	
  8.6

  	
  Setoff

  	
  36

  
	
  8.7

  	
  Consent
  to Disposition

  	
  36

  
	
  8.8

  	
  Consent
  to Subordinate Mortgage

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  ASSIGNMENT OF LEASES AND RENTS

  	
  37

  
	
  9.1

  	
  Assignment

  	
  37

  
	
  9.2

  	
  Limited
  License

  	
  38

  
	
  9.3

  	
  Enforcement
  of Leases

  	
  38

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  9.4

  	
  No
  Merger of Estates

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  SECURITY AGREEMENT

  	
  39

  
	
  10.1

  	
  Security
  Interest

  	
  39

  
	
  10.2

  	
  Financing
  Statements

  	
  39

  
	
  10.3

  	
  Construction
  Mortgage and Fixture Filing

  	
  39

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  CONCERNING THE TRUSTEE

  	
  39

  
	
  11.1

  	
  No
  Required Action

  	
  39

  
	
  11.2

  	
  Certain
  Rights

  	
  40

  
	
  11.3

  	
  Retention
  of Money

  	
  40

  
	
  11.4

  	
  Successor
  Trustees

  	
  40

  
	
  11.5

  	
  Perfection
  of Appointment

  	
  41

  
	
  11.6

  	
  Succession
  Instruments

  	
  41

  
	
  11.7

  	
  No
  Representation by Trustee or Beneficiary

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  MISCELLANEOUS

  	
  41

  
	
  12.1

  	
  Release

  	
  41

  
	
  12.2

  	
  Performance
  at Grantor’s Expense

  	
  42

  
	
  12.3

  	
  Survival
  of Obligations

  	
  42

  
	
  12.4

  	
  Recording
  and Filing

  	
  42

  
	
  12.5

  	
  Notices

  	
  42

  
	
  12.6

  	
  Covenants
  Running with the Land

  	
  43

  
	
  12.7

  	
  Successors
  and Assigns

  	
  43

  
	
  12.8

  	
  No
  Waiver; Severability

  	
  43

  
	
  12.9

  	
  Counterparts

  	
  43

  
	
  12.10

  	
  Applicable
  Law

  	
  43

  
	
  12.11

  	
  Interest
  Provisions

  	
  43

  
	
  12.12

  	
  Subrogation

  	
  45

  
	
  12.13

  	
  Rights
  Cumulative

  	
  45

  
	
  12.14

  	
  Payments

  	
  46

  
	
  12.15

  	
  Exceptions
  to Covenants

  	
  46

  
	
  12.16

  	
  Reliance

  	
  46

  
	
  12.17

  	
  Change
  of Security

  	
  46

  
	
  12.18

  	
  Headings

  	
  47

  
	
  12.19

  	
  Entire
  Agreement; Amendment

  	
  47

  
	
  12.20

  	
  Waiver
  of Right to Trial by Jury

  	
  47

  

 

iii

 

When recorded, return to:

 

Kelly Lee

Winstead PC

1100 JPMorgan Chase Tower

600 Travis Street

Houston, Texas 77002

 

DEED OF TRUST

 

This DEED OF TRUST (herein referred to as the “Deed of
Trust”), entered into as of the date of the acknowledgment below, but to be
effective as of February       , 2008, by
GLOBAL GEOPHYSICAL SERVICES, INC., a Delaware corporation, as Grantor, whose
mailing address for notice hereunder is at 3535 Briarpark Drive, Suite 200
Houston, Texas 77042 to EUGENE D. LYLES, Trustee, whose address is 3950 Regent
Boulevard, Irving, Texas 75063, for the benefit of the hereinafter described
Beneficiary.

 

W I T N E S S E T H:

 

ARTICLE I

 

DEFINITIONS

 

1.1           Definitions.  As used herein, the following terms shall
have the following meanings:

 

Assignment:  That certain Assignment of Leases and Rents of even date herewith executed by
Grantor, as assignor and Beneficiary, as assignee.

 

Beneficiary:  CITIBANK, N.A., a national banking
association, whose address for notice hereunder is 2000 West Sam Houston
Parkway South, Suite 600, Houston, Texas 77042, and the subsequent holder
or holders, from time to time, of the Note.

 

Constituent Party:  Any signatory to this Deed of Trust that
signs on Grantor’s behalf that is a corporation, general partnership, limited
partnership, joint venture, trust, or other type of business organization, in
the capacity of Grantor or its general partner, only.

 

Contracts:  All of the right, title, and interest of
Grantor in, to, and under any and all (i) contracts for the purchase of
all or any portion of the Mortgaged Property, whether such Contracts are now or
at any time hereafter existing, including but without limitation, any and all
earnest money or other deposits escrowed or to be escrowed or letters of credit
provided or to be provided by the purchasers under the Contracts, including all
amendments and supplements to and renewals and extensions of the Contracts at
any time made, and together with all payments, earnings, income, and profits
arising from sale of all or any portion of the Mortgaged Property or from the
Contracts and all other 

 

1

 

sums due or to become due
under and pursuant thereto and together with any and all earnest money,
security, letters of credit or other deposits under any of the Contracts; (ii) contracts,
licenses, permits, and rights relating to living unit equivalents or other
entitlements for water, wastewater, and other utility services whether
executed, granted, or issued by a private person or entity or a governmental or
quasi-governmental agency, which are directly or indirectly related to, or
connected with, the development of the Mortgaged Property, whether such
contracts, licenses, and permits are now or at any time thereafter existing,
including without limitation, any and all rights of living unit equivalents or
other entitlements with respect to water, wastewater, and other utility
services, certificates, licenses, zoning variances, permits, and no-action
letters from each governmental authority required:  (a) to evidence compliance by Grantor
and all improvements constructed or to be constructed on the Mortgaged Property
with all legal requirements applicable to the Mortgaged Property, and (b) to
develop and/or operate the Mortgaged Property as a commercial and/or
residential project; (iii) any and all right, title, and interest Grantor
may have in any financing arrangements relating to the financing of or the
purchase of all or any portion of the Mortgaged Property by future purchasers;
and (iv) all other contracts which in any way relate to the use or occupancy
of the Mortgaged Property (save and except any and all leases, subleases or
other agreements pursuant to which Grantor is granted a possessory interest in
the Land).

 

Debtor Relief Laws:  Title 11 of the United States Code, as now or
hereafter in effect, or any other applicable law, domestic or foreign, as now
or hereafter in effect, relating to bankruptcy, insolvency, liquidation,
receivership, reorganization, arrangement or composition, extension or
adjustment of debts, or similar laws affecting the rights of creditors.

 

Default Rate:  The rate of interest specified in the Note to
be paid by the maker of the Note from and after the occurrence of an Event of
Default beyond any applicable grace or cure period in payment under the
provisions of the Note and Loan Documents but not in excess of the Maximum
Lawful Rate.

 

Disposition:  Any sale, lease (except as permitted under
the Assignment), exchange, assignment, conveyance, transfer, trade, or other
disposition of all or any portion of the Mortgaged Property (or any interest
therein).

 

Environmental Law:  Any federal, state, or local law, statute,
ordinance, or regulation, whether now or hereafter in effect, pertaining to
health, industrial hygiene, or the environmental conditions on, under, or about
the Mortgaged Property, including without limitation, the following, as now or
hereafter amended:  Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (“CERCLA”), 42
U.S.C. § 9601 et seq.; Resource, Conservation and Recovery Act
(“RCRA”), 42 U.S.C. § 6901 et seq. as amended by the Superfund
Amendments and Reauthorization Act of 1986 (“SARA”), Pub. L. 99-499, 100 Stat.
1613; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.;
Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C.
§ 1101 et seq.; Clean Water Act (“CWA”), 33 U.S.C. § 1251
et seq.; Clean Air Act (“CAA”), 42 U.S.C. § 7401 et seq.;
Federal Water Pollution Control Act (“FWPCA”), 33 U.S.C. § 1251 et seq.;
and any corresponding state laws or ordinances 

 

2

 

including but not limited
to the Texas Water Code (“TWC”) § 26.001 et seq.; Texas Health &
Safety Code (“THSC”) § 361.001 et seq.; Texas Solid Waste Disposal
Act, Tex. Rev. Civ. Stat. Ann. art. 4477-7; and regulations, rules, guidelines,
or standards promulgated pursuant to such laws, statutes and regulations, as
such statutes, regulations, rules, guidelines, and standards are amended from
time to time.

 

Event of Default:  Any happening or occurrence described in Article VI
hereof after the expiration of any applicable notice and opportunity to cure
periods.

 

Fixtures:  All materials, supplies, equipment, systems,
apparatus, and other items now owned or hereafter acquired by Grantor and now
or hereafter attached to, installed in, or used in connection with (temporarily
or permanently) any of the Improvements or the Land, which are now owned or
hereafter acquired by Grantor and are now or hereafter attached to the Land or
the Improvements, and including but not limited to any and all partitions,
dynamos, window screens and shades, draperies, rugs and other floor coverings,
awnings, motors, engines, boilers, furnaces, pipes, cleaning, call and
sprinkler systems, fire extinguishing apparatus and equipment, water tanks,
swimming pools, heating, ventilating, refrigeration, plumbing, laundry,
lighting, generating, cleaning, waste disposal, transportation (of people or
things, including but not limited to, stairways, elevators, escalators, and
conveyors), incinerating, air conditioning and air cooling equipment and
systems, gas and electric machinery, appurtenances and equipment, disposals,
dishwashers, refrigerators and ranges, recreational equipment and facilities of
all kinds, and lighting, traffic control, waste disposal, raw and potable
water, gas, electrical, storm and sanitary sewer, telephone and cable
television facilities, and all other utilities whether or not situated in
easements, together with all accessions, appurtenances, replacements,
betterments, and substitutions for any of the foregoing and the proceeds
thereof.

 

Governmental Authority:  Any and all applicable courts, boards,
agencies, commissions, offices, or authorities of any nature whatsoever for any
governmental unit (federal, state, county, district, municipal, city or
otherwise), whether now or hereafter in existence.

 

Grantor:  The individual or entity described as Grantor
in the initial paragraph of this Deed of Trust and any and all subsequent
owners of the Mortgaged Property or any part thereof (without hereby implying
Beneficiary’s consent to any Disposition of the Mortgaged Property).

 

Guarantor (individually
and/or collectively, as the context may require):  Those persons, firms, or entities, if any,
designated as Guarantor in the Guaranty.

 

Guaranty (individually
and/or collectively, as the context may require):  That or those instruments of guaranty, if
any, now or hereafter in effect, from Guarantor to Beneficiary guaranteeing the
repayment of all or any part of the Indebtedness or the satisfaction of, or
continued compliance with, the Obligations, or both.

 

3

 

Hazardous Substance:  Hazardous Substance is any substance,
product, waste, or other material which is or becomes listed, regulated, or
addressed as being a toxic, hazardous, polluting, or similarly harmful
substance under any Environmental Law, including without limitation:  (i) any substance included within the
definition of “hazardous waste” pursuant to Section 1004 of RCRA; (ii) any
substance included within the definition of “hazardous substance” pursuant to Section 101
of CERCLA; (iii) any substance included within (a) the definition of “regulated
substance” pursuant to Section 26.342(9) of TWC; or (b) the
definition of “hazardous substance” pursuant to Section 361.003(13) of
THSC; (iv) asbestos; (v) polychlorinated biphenyls; (vi) petroleum
products; (vii) underground storage tanks, whether empty, filled or partially
filled with any substance; (viii) any radioactive materials, urea formaldehyde
foam insulation or radon; (ix) any substance included within the
definition of “waste” pursuant to Section 30.003(b) of TWC or “pollutant”
pursuant to Section 26.001(13) of TWC; and (x) any other chemical, material or
substance, the exposure to which is prohibited, limited or regulated by any
Governmental Authority on the basis that such chemical, material or substance
is toxic, hazardous or harmful to human health or the environment.  For the purposes of this definition,
Hazardous Substance(s) shall not include any substance of a nature,
quantity or concentration that does not violate Environmental Laws and is
customarily used, stored or disposed as part of or incidental to the operation
and maintenance of the applicable portion of the Mortgaged Property in the
ordinary course of Grantor’s business currently conducted as to such portion of
the Mortgaged Property so long as (x) such use, storage or disposal
complies fully with applicable Environmental Laws and good and safe business
practice, (y) any disposal takes place in accordance with applicable
Environmental Laws and, if applicable, at disposal facilities and locations
other than the Mortgaged Property and which are fully permitted in accordance
with Environmental Laws and (z) such use, storage or disposal does not
require Grantor, any agent or employee of Grantor or any operator of the
Mortgaged Property to have a hazardous waste generator identification number or
any other permit based primarily on or related primarily to Hazardous Substance
activity.

 

Impositions:  (i) All real estate and personal
property taxes, charges, assessments, standby fees, excises, and levies and any
interest, costs, or penalties with respect thereto, general and special,
ordinary and extraordinary, foreseen and unforeseen, of any kind and nature
whatsoever which at any time prior to or after the execution hereof may be
assessed, levied, or imposed upon the Mortgaged Property or the ownership, use,
occupancy, or enjoyment thereof, or any portion thereof, or the sidewalks,
streets, or alleyways adjacent thereto; (ii) any charges, fees, license
payments, or other sums payable for or under any easement, license, or
agreement maintained for the benefit of the Mortgaged Property; (iii) water,
gas, sewer, electricity, and other utility charges and fees relating to the
Mortgaged Property; and (iv) assessments and charges arising under any
subdivision, condominium, planned unit development, or other declarations,
restrictions, regimes, or agreements affecting the Mortgaged Property.

 

Improvements:  Any and all buildings, covered garages, air
conditioning towers, open parking areas, structures and other improvements, and
any and all additions, alterations, betterments or appurtenances thereto, now
or at any time hereafter situated, placed, or constructed upon the Land or any
part thereof.

 

4

 

Indebtedness:  (i) The principal of, interest on, or
other sums evidenced by the Note or the Loan Documents; (ii) any other
amounts, payments, or premiums payable by Grantor or any Guarantor to
Beneficiary under the Loan Documents; and (iii) such additional sums, with
interest thereon, as may hereafter be borrowed from Beneficiary, its successors
or assigns, by the then record owner of the Mortgaged Property, when evidenced
by a promissory note which, by its terms, is secured hereby (it being
contemplated by Grantor and Beneficiary that such future indebtedness may be
incurred).  Notwithstanding the foregoing
provisions of this definition, this Deed of Trust shall not secure any such
other loan, advance, debt, obligation or liability with respect to which
Beneficiary is by applicable law prohibited from obtaining a lien on real
estate, nor shall this definition operate or be effective to constitute or
require any assumption or payment by any person, in any way, of any debt or
obligation of any other person to the extent that the same would violate or
exceed the limit provided in any applicable usury or other law.

 

Land:  The real property or interest therein
described in Exhibit “A” attached hereto and incorporated herein by
this reference, together with all right, title, interest, and privileges of
Grantor in and to (i) all streets, ways, roads, alleys, easements,
rights-of-way, licenses, rights of ingress and egress, vehicle parking rights
and public places, existing or proposed, abutting, adjacent, used in connection
with or pertaining to such real property or the improvements thereon; (ii) any
strips or gores of real property between such real property and abutting or
adjacent properties; (iii) all water and water rights, timber and crops
pertaining to such real estate; and (iv) all appurtenances and all
reversions and remainders in or to such real property.

 

Leases:  Any and all leases, master leases, subleases,
licenses, concessions, or other agreements (written or oral, now or hereafter
in effect) which grant to third parties a possessory interest in and to, or the
right to use, all or any part of the Mortgaged Property, together with all security
and other deposits or payments made in connection therewith.

 

Legal Requirements:  (i) Any and all present and future
judicial decisions, statutes, rulings, rules, regulations, permits,
certificates, or ordinances of any Governmental Authority in any way applicable
to Grantor, any Guarantor or the Mortgaged Property, including, without
limiting the generality of the foregoing, the ownership, use, occupancy,
possession, operation, maintenance, 
alteration, repair, or reconstruction thereof, (ii) any and all
covenants, conditions, and restrictions contained in any deeds, other forms of
conveyance, or in any other instruments of any nature that relate in any way or
are applicable to the Mortgaged Property or the ownership, use, or occupancy
thereof, (iii) Grantor’s or any Guarantor’s presently or subsequently
effective bylaws and articles of incorporation or partnership, limited
partnership, joint venture, trust, or other form of business association
agreement, (iv) any and all Leases, (v) any and all Contracts, and (vi) any
and all leases, other than those described in (iv) above, and other
contracts (written or oral) of any nature that relate in any way to the
Mortgaged Property and to which Grantor or any Guarantor may be bound,
including, without limiting the generality of the foregoing, any lease or other
contract pursuant to which Grantor is granted a possessory interest in and to
the Land and/or the Improvements.

 

5

 

Loan Agreement:  The Construction Loan Agreement of even date
herewith by and between the Grantor and Beneficiary.

 

Loan Documents:  The Note, this Deed of Trust, the Assignment,
the Loan Agreement, the Guaranty, if any, and any and all other documents now
or hereafter executed by the Grantor, Guarantor, or any other person or party
in connection with the loan evidenced by the Note or in connection with the
payment of the Indebtedness or the performance and discharge of the
Obligations.

 

Material Adverse Effect:  Any material and adverse effect on (i) the
business condition (financial or otherwise), operations, prospects, results of
operations, capitalization, liquidity or any properties of the Grantor, taken
as a whole, (ii) the value of the Mortgaged Property, (iii) the
ability of Grantor (or if the Grantor is a partnership, joint venture, trust or
other type of business association, of any of the parties comprising Grantor or
of the ground lessor if the estate held by Grantor in the Land is a leasehold
estate) to pay and perform the Indebtedness and the Obligations, respectively,
or (iv) the validity, enforceability or binding effect of any of the Loan
Documents.

 

Maximum Lawful Rate:  As defined in Section 12.11
hereof.

 

Minerals:  To the extent owned by Grantor, all
substances in, on, or under the Land which are now, or may become in the
future, intrinsically valuable, that is, valuable in themselves, and which now
or may be in the future enjoyed through extraction or removal from the
property, including without limitation, oil, gas, and all other hydrocarbons,
coal, lignite, carbon dioxide and all other nonhydrocarbon gases, uranium and
all other radioactive substances, and gold, silver, copper, iron and all other
metallic substances or ores.

 

Mortgaged Property:  The Land, Minerals, Fixtures, Improvements,
Personalty, Contracts, Leases and Rents, and any interest of Grantor now owned
or hereafter acquired in and to the Land, Minerals, Fixtures, Improvements,
Personalty, Contracts, Leases and Rents, together with any and all other
security and collateral of any nature whatsoever, now or hereafter given for
the repayment of the Indebtedness or the performance and discharge of the
Obligations.  As used in this Deed of
Trust, the term “Mortgaged Property” shall be expressly defined as meaning all
or, where the context permits or requires, any portion of the above and all or,
where the context permits or requires, any interest therein.

 

Note:  That certain Promissory Note of even date
herewith, incorporated herein by this reference, executed by Grantor, GGS
International Holdings, Inc. and Autoseis, Inc., and payable to the
order of Beneficiary in the principal amount of SEVEN MILLION FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($7,500,000.00), bearing interest as therein
specified, containing an attorneys’ fee clause, interest and principal being
payable as therein specified, and finally maturing, if certain conditions set
forth in the Loan Documents, seventy-two (72) months from the date
thereof, and secured by, among other things, this Deed of Trust; and any and
all renewals, modifications, 

 

6

 

rearrangements,
reinstatements, enlargements, or extensions of such promissory note or of any
promissory note or notes given in renewal, substitution or replacement therefor.

 

Obligations:  Any and all of the covenants, conditions,
warranties, representations, and other obligations (other than to repay the
Indebtedness) made or undertaken by Grantor or Guarantor, as set forth in the
Loan Documents.

 

Permitted Exceptions:  The liens, easements, restrictions, security
interests, and other matters (if any) as reflected on Exhibit “B”
attached hereto and incorporated herein by reference and the liens and security
interests created by the Loan Documents.

 

Personalty:  All of the right, title, and interest of
Grantor in and to (i) all refundable, returnable, or reimbursable fees,
deposits or other funds or evidences of credit or indebtedness deposited by or
on behalf of Grantor with any governmental agencies, boards, corporations,
providers of utility services, public or private, including specifically, but
without limitation, all refundable, returnable, or reimbursable tap fees,
utility deposits, commitment fees and development costs, any awards,
remunerations, reimbursements, settlements, or compensation heretofore made or
hereafter to be made by any Governmental Authority pertaining to the Land,
Improvements, Fixtures, Contracts, or Personalty, including but not limited to
those for any vacation of, or change of grade in, any streets affecting the
Land or the Improvements and those for municipal utility district or other
utility costs incurred or deposits made in connection with the Land any and all
of which are now owned or hereafter acquired by Grantor, and (ii) all
construction materials acquired (whether delivered to the Land or stored
elsewhere) for use in or on the Land or the Improvements.

 

Remedial Work:  Any investigation, site monitoring,
containment, cleanup, removal, restoration, or other work of any kind or nature
reasonably necessary or desirable under any applicable Environmental Law in
connection with the current or future presence, suspected presence, release, or
suspected release of a Hazardous Substance in or into the air, soil, ground
water, surface water, or soil vapor at, on, about, under, or within the
Mortgaged Property, or any part thereof.

 

Rents:  All of the rents, revenues, income, proceeds,
profits, security and other types of deposits (after Grantor acquires title
thereto), and other benefits paid or payable by parties to the Contracts and/or
Leases, other than Grantor for using, leasing, licensing, possessing, operating
from, residing in, selling, or otherwise enjoying all or any portion of the
Mortgaged Property.

 

Subordinate Mortgage:  Any mortgage, deed of trust, pledge, lien
(statutory, constitutional, or contractual), security interest, encumbrance or
charge, or conditional sale or other title retention agreement, covering all or
any portion of the Mortgaged Property executed and delivered by Grantor, the
lien of which is subordinate and inferior to the lien of this Deed of Trust.

 

Trustee:  The individual described as Trustee in the
initial paragraph of this Deed of Trust.

 

7

 

UCC:    The
Uniform Commercial Code, as amended from time to time, in effect in the state
in which the Mortgaged Property is located.

 

1.2           Additional
Definitions.  As used herein, the
following terms shall have the following meanings:

 

(a)           “Hereof,”
“hereby,” “hereto,” “hereunder,” “herewith,” and similar terms mean of, by, to,
under and with respect to, this Deed of Trust or to the other documents or
matters being referenced.

 

(b)           “Heretofore”
means before, “hereafter” means after, and “herewith” means concurrently with,
the date of this Deed of Trust.

 

(c)           All
pronouns, whether in masculine, feminine or neuter form, shall be deemed to
refer to the object of such pronoun whether same is masculine, feminine or
neuter in gender, as the context may suggest or require.

 

(d)           All terms
used herein, whether or not defined in Section 1.1 hereof, and
whether used in singular or plural form, shall be deemed to refer to the object
of such term whether such is singular or plural in nature, as the context may
suggest or require.

 

ARTICLE II

 

GRANT

 

2.1           Grant.  To secure the full and timely payment of the
Indebtedness and the full and timely performance and discharge of the
Obligations, Grantor has GRANTED, BARGAINED, SOLD and CONVEYED, and by these
presents does GRANT, BARGAIN, SELL and CONVEY, unto Trustee, in trust, the
Mortgaged Property, subject, however, to the Permitted Exceptions, TO HAVE AND
TO HOLD the Mortgaged Property unto Trustee, forever, and Grantor does hereby
bind itself, its successors, and assigns to WARRANT AND FOREVER DEFEND the
title to the Mortgaged Property unto Trustee against every person whomsoever
lawfully claiming or to claim the same or any part thereof; provided, however,
that if Grantor shall pay (or cause to be paid) the Indebtedness as and when
the same shall become due and payable and shall fully perform and discharge (or
cause to be fully performed and discharged) the Obligations on or before the
date same are to be performed and discharged, then the liens, security
interests, estates, and rights granted by the Loan Documents shall terminate,
in accordance with the provisions hereof, otherwise same shall remain in full
force and effect.  A certificate or other
written statement executed on behalf of Trustee or Beneficiary confirming that
the Indebtedness has not been fully paid or the Obligations have not been fully
performed or discharged shall be sufficient evidence thereof for the purpose of
reliance by third parties on such fact.

 

8

 

ARTICLE
III

 

WARRANTIES
AND REPRESENTATIONS

 

Grantor hereby unconditionally warrants and represents
to Beneficiary, as of the date hereof and at all times during the term of this
Deed of Trust, as follows:

 

3.1           Organization
and Power.  If Grantor or any Constituent
Party is a corporation, general partnership, limited partnership, joint
venture, trust, or other type of business association, as the case may be,
Grantor and any Constituent Party, if any, (a) is either a corporation
duly incorporated with a legal status separate from its affiliates, or a
partnership or trust, joint venture or other type of business association duly
organized, validly existing, and in good standing under the laws of the state
of its formation or existence, and has complied with all conditions
prerequisite to its doing business in the state in which the Mortgaged Property
is located, and (b) has all requisite power and all governmental
certificates of authority, licenses, permits, qualifications, and documentation
to own, lease, and operate its properties and to carry on its business as now
being, and as proposed to be, conducted.

 

3.2           Validity
of Loan Documents.  The execution,
delivery, and performance by Grantor of the Loan Documents (other than the
Guaranty), (a) if Grantor, or any signatory who signs on its behalf, is a
corporation, general partnership, limited partnership, joint venture, trust, or
other type of business association, as the case may be, are within Grantor’s
and each Constituent Party’s powers and have been duly authorized by Grantor’s
and each Constituent Party’s board of directors, shareholders, partners,
venturers, trustees, or other necessary parties, and all other requisite action
for such authorization has been taken, (b) have received any and all
requisite prior governmental approvals in order to be legally binding and
enforceable in accordance with the terms thereof, and (c) will not
violate, be in conflict with, result in a breach of, or constitute (with due
notice or lapse of time, or both) a default under or violation of any Legal
Requirement or result in the creation or imposition of any lien, charge, or
encumbrance of any nature whatsoever upon any of Grantor’s and any Constituent
Party’s or Guarantor’s property or assets, except as contemplated by the
provisions of the Loan Documents.  The
Loan Documents constitute the legal, valid, and binding obligations of Grantor,
Guarantor, and others obligated under the terms of the Loan Documents,
enforceable in accordance with their respective terms.

 

3.3           Information.  All material information, financial
statements, reports, papers, and data given or to be given to Beneficiary with
respect to Grantor, each Constituent Party, Guarantor, others obligated under
the terms of the Loan Documents, or the Mortgaged Property are, or at the time
of delivery will be, accurate, complete, and correct in all material respects
and do not, or will not, omit any fact, the inclusion of which is necessary to
prevent the facts contained therein from being materially misleading.  Since the date of the financial statements of
Grantor, any Constituent Party, or of any Guarantor or other party liable for
payment of the Indebtedness or performance of the Obligations or any part
thereof heretofore furnished to Beneficiary, no Material Adverse Effect has
occurred, and except as heretofore disclosed in writing to Beneficiary,
Grantor, each Constituent Party, each Guarantor, or any other such party has
not incurred any material liability, direct or indirect, fixed or contingent.

 

9

 

3.4           Title
and Lien.  Grantor owns the Land (in
fee simple, if the lien created hereunder be on the fee, or a first and prior
leasehold estate, if it be created on the leasehold estate) and, if, as and
when constructed, the Improvements, and if, as and when purchased by Grantor,
the Fixtures and Personalty, free and clear of any liens, charges,
encumbrances, security interests, claims, easements, restrictions, options,
leases (other than the Leases), covenants, and other rights, titles, interests,
or estates of any nature whatsoever, except the Permitted Exceptions.  This Deed of Trust constitutes a valid,
subsisting first lien on the Land, the Improvements (when constructed), and the
Fixtures (when installed); a valid, subsisting first priority security interest
in and to the Personalty, Contracts, and to the extent that the terms Leases
and Rents include items covered by the UCC, subject to the terms of the UCC, in
and to the Leases and Rents; and a valid, subsisting first priority assignment
of the Leases and Rents not covered by the UCC, all in accordance with the
terms hereof.

 

3.5           Business
Purposes.  The loan evidenced by the
Note is solely for the purpose of carrying on or acquiring a business of
Grantor, and is not for personal, family, household, or agricultural purposes.

 

3.6           Taxes.  Grantor, each Constituent Party, and
Guarantor have filed all federal, state, county, municipal, and city income and
other tax returns required to have been filed by them and have paid all taxes
and related liabilities which have become due pursuant to such returns or
pursuant to any assessments received by them. 
Neither Grantor, any Constituent Party, nor Guarantor knows of any basis
for any additional assessment in respect of any such taxes and related
liabilities.

 

3.7           Mailing
Address.  Grantor’s mailing address,
as set forth in the opening paragraph hereof or as changed pursuant to the
provisions hereof, is true and correct.

 

3.8           Relationship
of Grantor and Beneficiary.  The relationship
between Grantor and Beneficiary is solely that of debtor and creditor, and
Beneficiary has no fiduciary or other special relationship with the Grantor,
and no term or condition of any of the Loan Documents shall be construed so as
to deem the relationship between Grantor and Beneficiary to be other than that
of debtor and creditor.

 

3.9           No
Reliance on Beneficiary.  Grantor is
experienced in the ownership and operation of properties similar to the
Mortgaged Property, and Grantor and Beneficiary have and are relying solely
upon Grantor’s expertise and business plan in connection with the ownership and
operation of the Mortgaged Property. 
Grantor is not relying on Beneficiary’s expertise or business acumen in
connection with the Mortgaged Property.

 

3.10         Environmental and Hazardous
Substances.  The following
representations and warranties of Grantor are made without regard to whether
Beneficiary has, or hereafter obtains, any knowledge or report of the
environmental condition of the Mortgaged Property, but are subject to matters
disclosed in that certain environmental report(s) titled “Phase I
Environmental Site Assessment” (the “ESA”) prepared by Associated Environmental
Consultants, Inc. dated March 9, 2006, and revalidated as of October 5,
2007, previously delivered by Grantor to Beneficiary:

 

10

 

(a)           The
Mortgaged Property and the operations conducted thereon do not violate any
applicable law, statute, ordinance, rule, regulation, order, or determination
of any Governmental Authority or any restrictive covenant or deed restriction
(recorded or otherwise), including without limitation all applicable zoning
ordinances and building codes, flood disaster laws and Environmental Laws.

 

(b)           Without
limitation of Section 3.10(a) immediately preceding, the
Mortgaged Property and operations conducted thereon by the current owner or
operator of such Mortgaged Property, are not in violation of or subject to any
existing, pending, or threatened action, suit, investigation, inquiry, or
proceeding by any governmental or nongovernmental entity or person or to any
remedial obligations under any Environmental Law.

 

(c)           All
notices, permits, licenses, or similar authorizations, if any, required to be
obtained or filed in connection with the ownership, operation, or use of the
Mortgaged Property, including, without limitation, the past or present
generation, treatment, storage, disposal, or release of a Hazardous Substance
into the environment, have been duly obtained or filed.

 

(d)           The
Mortgaged Property does not contain any Hazardous Substance.

 

(e)           Grantor
has taken all steps necessary to determine and has determine that no Hazardous
Substances have been generated, treated, placed, held, located, or otherwise
released on, under, from, or about the Mortgaged Property.

 

(f)            Grantor
has not undertaken, permitted, authorized, or suffered and will not undertake,
permit, authorize, or suffer the presence, use, manufacture, handling,
generation, transportation, storage, treatment, discharge, release, burial, or
disposal on, under, from or about the Mortgaged Property of any Hazardous
Substance or the transportation to or from the Mortgaged Property of any
Hazardous Substance in violation of any applicable Environmental Law.

 

(g)           There
is no pending, nor threatened litigation, proceedings, or investigations before
or by any administrative agency in which any person or entity alleges or is
investigating any alleged presence, release, threat of release, placement on,
under, from or about the Mortgaged Property, or the manufacture, handling,
generation, transportation, storage, treatment, discharge, burial, or disposal
on, under, from or about the Mortgaged Property, or the transportation to or
from the Mortgaged Property, of any Hazardous Substance.

 

(h)           Grantor
has not received any notice, and has no actual knowledge, that any Governmental
Authority or any employee or agent thereof has determined, or threatens to
determine, or is investigating any allegation that there is a presence, release,
threat of release, placement on, under, from or about the Mortgaged Property,
or the use, manufacture, handling, generation, transportation, storage,
treatment, discharge, burial, or disposal on, under, from or about the
Mortgaged Property, or the transportation to or from the Mortgaged Property, of
any Hazardous Substance.

 

11

 

(i)            There
have been no communications or agreements by Grantor with any Governmental
Authority thereof or any private entity, including, but not limited to, any
prior owners or operators of the Mortgaged Property, relating in any way to the
presence, release, threat of release, placement on, under or about the
Mortgaged Property, or the use, manufacture, handling, generation, transportation,
storage, treatment, discharge, burial, or disposal on, under or about the
Mortgaged Property, or the transportation to or from the Mortgaged Property, of
any Hazardous Substance.

 

(j)            Neither
Grantor nor any other person, including, but not limited to, any predecessor
owner, tenant, licensee, occupant, user, or operator of all or any portion of
the Mortgaged Property, has ever caused, permitted, authorized or suffered, and
Grantor will not cause, permit, authorize, or suffer, any Hazardous Substance
to be placed, held, located, or disposed of, on, under or about any other real
property, all or any portion of which is legally or beneficially owned (or any
interest or estate therein which is owned) by Grantor in any jurisdiction now
or hereafter having in effect a so-called “superlien” law or ordinance or any
part thereof, the effect of which law or ordinance would be to create a lien on
the Mortgaged Property to secure any obligation in connection with the “superlien”
law of such other jurisdiction.

 

(k)           Grantor
has been issued all required federal, state, and local licenses, certificates,
or permits relating to, and Grantor and its facilities, business assets,
property, leaseholds, and equipment are in compliance in all material respects
with all applicable federal, state, and local laws, rules, and regulations
relating to, air emissions, water discharge, noise emissions, solid or liquid
waste disposal, hazardous waste or materials, or other environmental, health,
or safety matters.

 

To the extent that the representations and warranties
of Grantor contained in this paragraph 3.10 apply to activities of tenants in
possession of a part of the Mortgaged Property or conditions of the Mortgaged
Property caused by such tenants, Grantor makes such representations and
warranties to the best of Grantor’s knowledge, only.

 

3.11         No
Litigation.  Except as disclosed in
writing to Beneficiary, there are no (i) actions, suits, or proceedings,
at law or in equity, before any Governmental Authority or arbitrator pending or
threatened against or affecting Grantor, Guarantor, or any Constituent Party or
involving the Mortgaged Property, (ii) outstanding or unpaid judgments
against the Grantor, any Guarantor, any Constituent Party, or the Mortgaged
Property, or (iii) defaults by Grantor with respect to any order, writ,
injunction, decree, or demand of any Governmental Authority or arbitrator.

 

ARTICLE
IV

 

AFFIRMATIVE
COVENANTS

 

Grantor hereby unconditionally covenants and agrees
with Beneficiary, until the entire Indebtedness shall have been paid in full
and all of the Obligations shall have been fully performed and discharged as
follows:

 

12

 

4.1           Payment
and Performance.  Grantor will pay
the Indebtedness as and when specified in the Loan Documents, and will perform
and discharge all of the Obligations, in full and on or before the dates same
are to be performed.

 

4.2           Existence.  Grantor will and will cause each Constituent
Party to preserve and keep in full force and effect its existence (separate and
apart from its affiliates), rights, franchises, and trade names.

 

4.3           Compliance
with Legal Requirements.  Grantor
will promptly and faithfully comply with, conform to, and obey all Legal
Requirements, whether the same shall necessitate structural changes in,
improvements to, or interfere with the use or enjoyment of, the Mortgaged
Property.

 

4.4           First
Lien Status.  Grantor will protect
the first lien and security interest status of this Deed of Trust and the other
Loan Documents and will not permit to be created or to exist in respect of the
Mortgaged Property or any part thereof any lien or security interest on a
parity with, superior to, or inferior to any of the liens or security interests
hereof, except for the Permitted Exceptions.

 

4.5           Payment
of Impositions.  Grantor will duly
pay and discharge, or cause to be paid and discharged, the Impositions not
later than the earlier to occur of (i) the day any fine, penalty,
interest, or cost may be added thereto or imposed, or (ii) the day any
lien may be filed for the nonpayment thereof (if such day is used to determine
the due date of the respective item), and Grantor shall deliver to Beneficiary
a written receipt evidencing the payment of the respective Imposition.  Notwithstanding anything in this Section 4.5
or elsewhere in this Deed of Trust to the contrary, Grantor shall have the
right, in good faith and by appropriate proceedings, to contest the validity,
applicability or amount, as applicable, of any Impositions and will not be
deemed in default hereunder or under any Loan Documents; provided, however,
such contest must stay or prevent a proceeding which may impair or divest
Grantor of title to the Mortgaged Property or which may affect the priority of
the lien granted under this Deed of Trust and Beneficiary may, as a condition
to such right to contest, require Grantor to establish an escrow or give other
security adequate in Beneficiary’s sole discretion to compensate Beneficiary
for any loss, cost or expense which it may suffer or incur as a result of such
divestiture or impairment of title or invalidity or loss of priority of the
liens created by this Deed of Trust (which escrow or security will be returned
to Grantor upon payment of the Impositions or such portion thereof as is
determined to be owed by Grantor). 
Grantor shall promptly cause to be paid any amount adjudged by a court
of competent jurisdiction to be due, with all costs, penalties and interest,
promptly after the judgment becomes final; provided, however, that in any event
each contest must be concluded and the sums due must be paid prior to the date
any writ or order is issued under which the Mortgaged Property may be sold.

 

4.6           Repair.  Grantor will keep the Mortgaged Property in
high quality order and condition, reasonable wear and tear excepted, and will
make all repairs, replacements, renewals, additions, betterments, improvements,
and alterations thereof and thereto, interior and exterior, structural and
nonstructural, ordinary and extraordinary, foreseen and unforeseen, which are
necessary or reasonably appropriate to keep same in such order and
condition.  Grantor will prevent any act,
occurrence, or neglect within Grantor’s reasonable control which might impair 

 

13

 

the value or usefulness of the Mortgaged Property for
its intended usage.  In instances where
repairs, replacements, renewals, additions, betterments, improvements, or
alterations are required in and to the Mortgaged Property on an emergency basis
to prevent loss, damage, waste, or destruction thereof, Grantor shall proceed
to repair, replace, add to, better, improve, or alter same, or cause same to be
repaired, replaced, added to, bettered, improved, or altered, notwithstanding
anything to the contrary contained in Section 5.2 hereof; provided,
however, that in instances where such emergency measures are to be taken,
Grantor will notify Beneficiary in writing of the commencement of same and the
measures to be taken, and, when same are completed, the completion date and the
measures actually taken.

 

4.7           Insurance.  Grantor will obtain and maintain insurance
upon and relating to the Mortgaged Property with such insurers, in such amounts
and covering such risks as shall be reasonably satisfactory to Beneficiary,
from time to time, including but not limited to:  (i) owner’s and contractors’ policies of
commercial general public liability insurance (including automobile coverage); (ii) property
insurance against all risks of loss, including collapse, in an amount not less
than the full replacement cost of all Improvements, including the cost of
debris removal, with annual agreed amount endorsement and sufficient at all
times to prevent Grantor from becoming a coinsurer; and (iii) if the
Mortgaged Property is in a “Flood Hazard Area,” a flood insurance policy, or
binder therefor, in an amount equal to the principal amount of the note or the
maximum amount available under the Flood Disaster Protection Act of 1973, and
regulations issued pursuant thereto, as amended from time to time, whichever is
less, in form complying with the “insurance purchase requirement” of that Act; (iv) workmen’s
compensation insurance for Grantor and any general contractor performing any
work on or with respect to the Mortgaged Property; and (v) such other
insurance, if any, as Beneficiary may reasonably require from time to
time.  Each insurance policy issued in
connection herewith shall provide by way of endorsements, riders or otherwise
that (a) with respect to liability insurance, it shall name Beneficiary as
an additional insured, with respect to the other insurance, it shall be payable
to Beneficiary as a mortgagee and not as a coinsured, (b) the coverage of
Beneficiary shall not be terminated, reduced, or affected in any manner regardless
of any breach or violation by Grantor of any warranties, declarations, or
conditions in such policy; (c) no such insurance policy shall be canceled,
endorsed, altered, or reissued to effect a change in coverage for any reason
and to any extent whatsoever unless such insurer shall have first given
Beneficiary thirty (30) days’ prior written notice thereof; and (d) Beneficiary
may, but shall not be obligated to, make premium payments to prevent any
cancellation, endorsement, alteration, or reissuance, and such payments shall
be accepted by the insurer to prevent same. 
Beneficiary shall be furnished with the original of each such initial
policy coincident with the execution of this Deed of Trust and the original of
each renewal policy not less than ten (10) days prior to the expiration of
the initial, or each immediately preceding renewal policy, together with
receipts or other evidence that the premiums thereon have been paid for one (1) year.  Grantor shall furnish to Beneficiary, on or
before thirty (30) days after the close of each of Grantor’s fiscal years, a
statement certified by Grantor or a duly authorized officer of Grantor of the
amounts of insurance maintained in compliance herewith, of the risks covered by
such insurance and of the insurance company or companies which carry such
insurance.

 

4.8           Inspection.  Grantor will permit Trustee and Beneficiary,
and their agents, representatives, and employees, to inspect the Mortgaged
Property at all reasonable times, with or without prior notice to Grantor.

 

14

 

4.9           Financial
Statements.  Grantor shall provide to
Beneficiary, or cause Guarantor to provide, the financial statements required
pursuant to the Loan Agreement.

 

4.10         Payment
for Labor and Materials.  Grantor
will promptly pay all bills for labor, materials, and specifically fabricated
materials incurred in connection with the Mortgaged Property and never permit
to exist in respect of the Mortgaged Property or any part thereof any lien or
security interest, and in any event never permit to be created or exist in
respect of the Mortgaged Property or any part thereof any other or additional
lien or security interest on a parity with, superior, or inferior to any of the
liens or security interests hereof. 
Notwithstanding the foregoing, Grantor may dispute bills for labor,
materials, and specially fabricated materials so long as it does so in good
faith and establishes such reserves as Beneficiary shall reasonably
require.  In the event that any such
dispute results in the filing of a claim for a lien against the Mortgaged
Property, Grantor shall promptly pay such claim and cause such lien to be
released or cause to be issued by a surety acceptable to Beneficiary a
statutory payment bond, in an amount and issued by a surety acceptable to
Beneficiary in the exercise of its reasonable discretion, insuring the lien.

 

4.11         Further
Assurances and Corrections.  From
time to time, at the request of Beneficiary, Grantor will (i) promptly
correct any defect, error, or omission which may be discovered in the contents
of this Deed of Trust or in any other Loan Document or in the execution or
acknowledgment thereof; (ii) execute, acknowledge, deliver, record and/or
file such further instruments (including, without limitation, further deeds of
trust, security agreements, financing statements, continuation statements and
assignments of rents or leases) and perform such further acts and provide such
further assurances as may be necessary, desirable, or proper, in Beneficiary’s
opinion, to carry out more effectively the purposes of this Deed of Trust and
the Loan Documents and to subject to the liens and security interests hereof
and thereof any property intended by the terms hereof or thereof to be covered
hereby or thereby, including without limitation, any renewals, additions,
substitutions, replacements, or appurtenances to the Mortgaged Property; (iii) execute,
acknowledge, deliver, procure, file, and/or record any document or instrument
(including without limitation, any financing statement) deemed advisable by
Beneficiary to protect the liens and the security interests herein granted
against the rights or interests of third persons; and (iv) pay all costs
connected with any of the foregoing.

 

4.12         Tax
on Deed of Trust.  At any time any
law shall be enacted imposing or authorizing the imposition of any tax upon
this Deed of Trust, or upon any rights, titles, liens, or security interests
created hereby, or upon the Indebtedness or any part thereof, Grantor will
immediately pay all such taxes, provided that if such law as enacted makes it
unlawful for Grantor to pay such tax, Grantor shall not pay nor be obligated to
pay such tax. Nevertheless, if a law is enacted making it unlawful for Grantor
to pay such taxes, then Grantor must prepay the Indebtedness in full within
sixty (60) days after demand therefor by Beneficiary.

 

4.13         Statement
of Unpaid Balance.  At any time and
from time to time, Grantor will furnish promptly, upon the request of
Beneficiary, a written statement or affidavit, in form satisfactory to
Beneficiary, stating the unpaid balance of the Indebtedness and that there are
no offsets or defenses against full payment of the Indebtedness and the terms
hereof, or if there are any such offsets or defenses, specifying them.

 

15

 

4.14         Expenses.  Subject to the provisions of Section 12.11
hereof, Grantor will pay on demand all reasonable and bona fide out-of-pocket
costs, fees, and expenses and other expenditures, including, but not limited
to, reasonable attorneys’ fees and expenses, paid or incurred by Beneficiary or
Trustee to third parties incident to this Deed of Trust or any other Loan
Document (including without limitation, reasonable attorneys’ fees and expenses
in connection with the negotiation, preparation, and execution hereof and of
any other Loan Document and any amendment hereto or thereto, any release
hereof, any consent, approval or waiver hereunder or under any other Loan
Document, the making of any advance under the Note, and any suit to which
Beneficiary or Trustee is a party involving this Deed of Trust or the Mortgaged
Property) or incident to the enforcement of the Indebtedness or the exercise of
any right or remedy of Beneficiary under any Loan Document.

 

4.15         Address.  Grantor shall give written notice to
Beneficiary and Trustee of any change of address of Grantor at least five (5) days
prior to the effective date of such change of address.  Absent such official written notice of a
change in address for Grantor, then Beneficiary and Trustee shall be entitled
for all purposes under the Loan Documents to rely upon Grantor’s address as set
forth in the initial paragraph of this Deed of Trust, as same may have been
theretofore changed in accordance with the provisions hereof.

 

4.16         Disclosures.  If at any time Grantor shall become aware of
the existence or occurrence of any financial or economic conditions or natural
disasters which might have a Material Adverse Effect, Grantor shall promptly
notify Beneficiary of the existence or occurrence thereof and of Grantor’s
opinion as to what effect such may have on the Mortgaged Property or
Grantor.  Grantor shall also give prompt
notice to Beneficiary of (i) any litigation or dispute, threatened or
pending against or affecting Grantor, the Mortgaged Property or any Guarantor
which could have a Material Adverse Effect, (ii) any Event of Default
continuing beyond any applicable grace period, (iii) any default by
Grantor or any acceleration of any indebtedness owed by Grantor under any
contract to which Grantor is a party which would have a Material Adverse
Effect, (iv) any default by Guarantor or any acceleration of any
indebtedness owed by any Guarantor under any contract to which Guarantor is a
party which would have a Material Adverse Effect, and (v) any change in
the character of Grantor’s business as it existed on the date hereof which
would have a Material Adverse Effect. 
The existence of any such matter disclosed shall not be an Event of
Default unless such matter shall otherwise be specifically defined as an Event
of Default in this Deed of Trust.

 

4.17         ERISA.  If and to the extent that Grantor is
obligated under any plan governed by or subject to the Employee Retirement
Income Security Act, as amended (“ERISA”), Grantor shall fully discharge and
satisfy all of its obligations and funding requirements under such plan, ERISA
and the Internal Revenue Code, as amended (“IRC”).  Furthermore, Grantor shall comply in all
material respects with any and all applicable provisions of ERISA and the IRC
and will not incur or permit to exist any unfunded liabilities to the Pension
Benefit Guaranty Corporation or to such plan under ERISA or the IRC.

 

4.18         Delivery
of Contracts.  Grantor will deliver
to Beneficiary a copy of each Contract promptly after the execution of same by
all parties thereto. Within twenty (20) days after a request by Beneficiary,
Grantor shall prepare and deliver to Beneficiary a complete listing of all
Contracts, showing date, term, parties, subject matter, concessions, whether
any defaults 

 

16

 

exist, and other information specified by Beneficiary,
of or with respect to each of such Contracts, together with a copy thereof (if
so requested by Beneficiary).

 

4.19       Environment
and Hazardous Substances.  Grantor
will:

 

(a)           not
use, generate, manufacture, produce, store, release, discharge, treat, or
dispose of on, under, from or about the Mortgaged Property or transport to or
from the Mortgaged Property any Hazardous Substance or allow any other person
or entity to do so;

 

(b)           keep
and maintain the Mortgaged Property in compliance with, and shall not cause or
permit the Mortgaged Property to be in violation of, any Environmental Law;

 

(c)           give
prompt written notices to Beneficiary of: 
(i) any proceeding or inquiry by any governmental or
nongovernmental entity or person with respect to the presence of any Hazardous
Substance on, under, from or about the Mortgaged Property, the migration
thereof from or to other property, the disposal, storage, or treatment of any
Hazardous Substance generated or used on, under or about the Mortgaged
Property, (ii) all claims made or threatened by any third party against
Grantor or the Mortgaged Property or any other owner or operator of the
Mortgaged Property relating to any loss or injury resulting from any Hazardous
Substance, and (iii) Grantor’s discovery of any occurrence or condition on
any real property adjoining or in the vicinity of the Mortgaged Property that
could cause the Mortgaged Property or any part thereof to be subject to any
investigation or cleanup of the Mortgaged Property pursuant to any
Environmental Law;

 

(d)           permit
Beneficiary to join and participate in, as a party if it so elects, any legal
proceedings or actions initiated with respect to the Mortgaged Property in
connection with any Environmental Law or Hazardous Substance, and Grantor shall
pay all attorneys’ fees incurred by Beneficiary in connection therewith; and

 

(e)           in
the event that any Remedial Work is reasonably necessary or desirable, Grantor
shall commence and thereafter diligently prosecute to completion all such
Remedial Work within thirty (30) days after written demand by Beneficiary for
performance thereof (or such shorter period of time as may be required under
any Legal Requirement).  All Remedial
Work shall be performed by contractors approved in advance by Beneficiary, and
under the supervision of a consulting engineer approved by Beneficiary.  All costs and expenses of such Remedial Work
shall be paid by Grantor including, without limitation, Beneficiary’s
reasonable attorneys’ fees and costs incurred in connection with monitoring or
review of such Remedial Work.  In the
event Grantor shall fail to timely commence, or cause to be commenced, or fail
to diligently prosecute to completion, such Remedial Work, Beneficiary may, but
shall not be required to, cause such Remedial Work to be performed, and all
costs and expenses thereof, or incurred in connection therewith, shall become
part of the Indebtedness.

 

17

 

ARTICLE
V

 

NEGATIVE
COVENANTS

 

Grantor hereby unconditionally covenants and agrees
with Beneficiary until the entire Indebtedness shall have been paid in full and
all of the Obligations shall have been fully performed and discharged as
follows:

 

5.1           Use
Violations.  Grantor will not use,
maintain, operate, or occupy, or allow the use, maintenance, operation, or
occupancy of, the Mortgaged Property in any manner which (i) violates any Legal
Requirement, (ii) may be dangerous unless safeguarded as required by law
and/or appropriate insurance, (iii) constitutes a public or private
nuisance, or (iv) makes void, voidable, or cancelable, or increases the
premium of, any insurance then in force with respect thereto.

 

5.2           Waste;
Alterations.  Grantor will not commit
or permit any waste or impairment of the Mortgaged Property and will not
(subject to the provisions of Sections 4.3 and 4.6 hereof), without
the prior written consent of Beneficiary, make or permit to be made any
alterations or additions to the Mortgaged Property of a material nature.

 

5.3           Replacement
of Fixtures and Personalty.  Grantor
will not, without the prior written consent of Beneficiary, permit any of the
Fixtures or Personalty to be removed at any time from the Land or Improvements
unless the removed item is removed temporarily for maintenance and repair or,
if removed permanently, is replaced by an article of equal suitability and
value, owned by Grantor, free and clear of any lien or security interest except
as may be approved in writing by Beneficiary.

 

5.4           Change
in Zoning.  Grantor will not seek or
acquiesce in a zoning reclassification of all or any portion of the Mortgaged
Property or grant or consent to any easement, dedication, plat, or restriction
(or allow any easement to become enforceable by prescription), or any amendment
or modification thereof, covering all or any portion of the Mortgaged Property,
without Beneficiary’s prior written consent.

 

5.5           No
Drilling.  Grantor will not, without
the prior written consent of Beneficiary, permit any drilling or exploration
for or extraction, removal, or production of, any Minerals from the surface or
subsurface of the Land regardless of the depth thereof or the method of mining
or extraction thereof.

 

5.6           No
Disposition.  Grantor will not make a
Disposition without obtaining Beneficiary’s prior written consent to the
Disposition.

 

5.7           No
Subordinate Mortgages.  Grantor will
not create, place, or permit to be created or placed, or through any act or
failure to act, acquiesce in the placing of, or allow to remain any Subordinate
Mortgage regardless of whether such Subordinate Mortgage is expressly
subordinate to the liens or security interests of the Loan Documents with respect
to the Mortgaged Property, other than the Permitted Exceptions.

 

18

 

5.8           Additional
Obligations.  Grantor shall not
guarantee, endorse or otherwise become contingently liable in connection with
any obligations of any other person or entity, and shall not create or incur
any additional liability, whether contingent or non-contingent, with respect to
either Grantor or the Mortgaged Property, except as specifically allowed or
contemplated pursuant to the Loan Documents.

 

5.9           Business
Change.  Grantor shall not make or
permit to occur or exist a material change in the character of its business
activities as such existed on the date hereof, without Beneficiary’s prior
written consent.

 

ARTICLE
VI

 

EVENTS
OF DEFAULT

 

The term “Event of Default,” as used herein and in the
Loan Documents, shall mean the occurrence or happening, at any time and from
time to time, of any one or more of the following:

 

6.1           Payment
of Indebtedness.  Grantor shall fail,
refuse, or neglect to pay, in full (i) any installment or portion of the
Indebtedness when due or within two (2) days of when due, or (ii) the
Indebtedness at maturity, whether at the maturity date thereof as stipulated in
the Loan Documents, or upon acceleration.

 

6.2           Performance
of Obligations.  Grantor shall fail,
refuse or neglect or cause the failure, refusal, or neglect to comply with,
perform and discharge fully and timely any of the Obligations as and when
called for and such failure, refusal or neglect shall continue for thirty (30)
days after notice thereof is provided to the Grantor.

 

6.3           False
Representation.  Any representation,
warranty, or statement made by Grantor, Guarantor, or others in, under, or
pursuant to the Loan Documents or any affidavit or other instrument executed or
delivered with respect to the Loan Documents or the Indebtedness is determined
by Beneficiary to be false or misleading in any material respect as of the date
hereof or thereof or shall become so at any time prior to the repayment in full
of the Indebtedness.

 

6.4           Default
Under Other Lien Document.  Grantor
shall default or commit an Event of Default (after any applicable notice or
grace period) under and pursuant to any other mortgage or security agreement
which covers or affects any part of the Mortgaged Property.

 

6.5           Insolvency;
Bankruptcy.  Grantor (i) shall
execute an assignment for the benefit of creditors or an admission in writing
by Grantor of Grantor’s inability to pay, or Grantor’s failure to pay, debts
generally as the debts become due; or (ii) shall allow the levy against
the Mortgaged Property or any part thereof, of any execution, attachment,
sequestration or other writ which is not vacated within sixty (60) days after
the levy; or (iii) shall allow the appointment of a receiver, trustee or
custodian of Grantor or of the Mortgaged Property or any part thereof, which
receiver, trustee or custodian is not discharged within sixty (60) days after
the appointment; or (iv) files as a debtor a petition, case, proceeding or
other action pursuant to, or voluntarily seeks the benefit or benefits of any
Debtor Relief Law, or takes any action in furtherance thereof; or 

 

19

 

(v) files either a petition, complaint, answer or
other instrument which seeks to effect a suspension of, or which has the effect
of suspending any of the rights or powers of Beneficiary or Trustee granted in
the Note, herein or in any Loan Document; or (vi) allows the filing of a
petition, case, proceeding or other action against Grantor as a debtor under
any Debtor Relief Law or seeks appointment of a receiver, trustee, custodian or
liquidator of Grantor or of the Mortgaged Property, or any part thereof, or of
any significant portion of Grantor’s other property; and (a) Grantor
admits, acquiesces in or fails to contest diligently the material allegations
thereof, or (b) the petition, case, proceeding or other action results in
the entry of an order for relief or order granting the relief sought against
Grantor, or (c) the petition, case, proceeding or other action is not
permanently dismissed or discharged on or before the earlier of trial thereon
or sixty (60) days next following the date of filing.

 

6.6           Dissolution.  Grantor shall dissolve, terminate or
liquidate.

 

6.7           No
Further Encumbrances.  Grantor
creates, places, or permits to be created or placed, or through any act or
failure to act, acquiesces in the placing of, or allows to remain, any
Subordinate Mortgage, regardless of whether such Subordinate Mortgage is expressly
subordinate to the liens or security interests of the Loan Documents, with
respect to the Mortgaged Property, other than the Permitted Exceptions and
those encumbrances that arise as a matter of law.

 

6.8           Disposition
of Mortgaged Property and Beneficial Interest in Grantor.  Grantor makes a Disposition, without the
prior written consent of Beneficiary.

 

6.9           Condemnation.  Any condemnation proceeding is instituted or
threatened which would, in Beneficiary’s reasonable judgment, materially impair
the use and enjoyment of the Mortgaged Property for its intended purposes.

 

6.10         Destruction
of Improvements.  The Mortgaged
Property is demolished, destroyed, or substantially damaged so that, in
Beneficiary’s reasonable judgment, it cannot be restored or rebuilt with
available funds to the condition existing immediately prior to such demolition,
destruction, or damage within a reasonable period of time.  Notwithstanding the foregoing, an Event of
Default shall not exist if Borrower is in compliance with the provisions of Section 8.1
hereof.

 

6.11         Abandonment.  Grantor abandons all or any portion of the
Mortgaged Property.

 

6.12         Guarantor’s
or Constituent Party’s Default.  The
occurrence of any event referred to in Section 6.5 hereof with
respect to any Guarantor, Constituent Party or other person or entity obligated
in any manner to pay or perform the Indebtedness or Obligations, respectively,
or any part thereof (as if such Guarantor, Constituent Party or other person or
entity were the “Grantor” in such Sections).

 

6.13         Event
of Default in Loan Documents.  The
occurrence of an Event of Default, as defined in any of the Loan Documents,
that continues beyond any applicable grace or cure period.

 

20

 

ARTICLE
VII

 

REMEDIES

 

7.1         Beneficiary’s
Remedies Upon Default.  Upon the
occurrence, and continuance beyond any applicable grace or cure period
contained herein or in any of the Loan Documents, of an Event of Default,
Beneficiary may, at Beneficiary’s option, and by or through Trustee, by
Beneficiary itself or otherwise, do any one or more of the following:

 

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

 

(b)           Right
of Entry.  Subject to the terms of
the Leases, Beneficiary may, prior or subsequent to the institution of any
foreclosure proceedings, enter upon the Mortgaged Property, or any part
thereof, and take exclusive possession of the Mortgaged Property and of all
books, records, and accounts relating thereto and to exercise without
interference from Grantor any and all rights which Grantor has with respect to
the management, possession, operation, protection, or preservation of the
Mortgaged Property, including without limitation the right to rent the same for
the account of Grantor and to deduct from such Rents all costs, expenses, and
liabilities of every character incurred by the Beneficiary in collecting such
Rents and in managing, operating, maintaining, protecting, or preserving the
Mortgaged Property and to apply the remainder of such Rents on the Indebtedness
in such manner as Beneficiary may elect. 
All such costs, expenses, and liabilities incurred by the Beneficiary in
collecting such Rents and in managing, operating, maintaining, protecting, or
preserving the Mortgaged Property, if not paid out of Rents as hereinabove
provided, shall constitute a demand obligation owing by Grantor and shall bear
interest from the date of expenditure until paid at the Default Rate, all of
which shall constitute a portion of the Indebtedness.  If necessary to obtain the possession provided
for above, the Beneficiary may invoke any and all legal remedies to dispossess
Grantor, including specifically one or more actions for forcible entry and
detainer, trespass to try title, and restitution.  In connection with any action taken by the
Beneficiary pursuant to this subsection, the Beneficiary shall not be liable
for any loss sustained by Grantor resulting from any failure to let the
Mortgaged Property, or any part thereof, or from any other act or omission of
the Beneficiary in managing the Mortgaged Property unless such loss is caused
by the willful misconduct of the Beneficiary, nor shall the Beneficiary be
obligated to perform or discharge any 

 

21

 

obligation, duty,
or liability under any Lease or under or by reason hereof or the exercise of
rights or remedies hereunder.  Should the
Beneficiary incur any such liability, the amount thereof, including without
limitation costs, expenses, and reasonable attorneys’ fees, together with
interest thereon from the date of expenditure until paid at the Default Rate,
shall be secured hereby, and Grantor shall reimburse the Beneficiary therefor
immediately upon demand.  Nothing in this
subsection shall impose any duty, obligation, or responsibility upon the
Beneficiary for the control, care, management, leasing, or repair of the
Mortgaged Property, nor for the carrying out of any of the terms and conditions
of any such Lease; nor shall it operate to make the Beneficiary responsible or
liable for any waste committed on the Mortgaged Property by the tenants or by
any other parties, or for any Hazardous Substance on or under the Mortgaged
Property, or for any dangerous or defective condition of the Mortgaged Property
or for any negligence in the management, leasing, upkeep, repair, or control of
the Mortgaged Property resulting in loss or injury or death to any tenant,
licensee, employee, or stranger.  Grantor
hereby assents to, ratifies, and confirms any and all actions of the
Beneficiary with respect to the Mortgaged Property taken under this subsection.

 

The remedies in this subsection are in addition to
other remedies available to the Beneficiary and the exercise of the remedies in
this subsection shall not be deemed to be an election of nonjudicial or judicial
remedies otherwise available to the Beneficiary.  The remedies in this Article VII
are available under and governed by the real property laws of Texas and are not
governed by the personal property laws of Texas, including but not limited to,
the power to dispose of personal property in a commercially reasonable manner
under Section 9.610 of the UCC.  No
action by Beneficiary, taken pursuant to this subsection, shall be deemed to be
an election to dispose of personal property under Section 9.621 of the
UCC.  Any receipt of consideration
received by Beneficiary pursuant to this subsection shall be immediately
credited against the Indebtedness (in the inverse order of maturity) and the
value of said consideration shall be treated like any other payment against the
Indebtedness.

 

(c)           Right
to Accelerate.  Beneficiary may,
without notice, demand, presentment, notice of nonpayment or nonperformance,
protest, notice of protest, notice of intent to accelerate, notice of
acceleration, or any other notice or any other action, all of which are hereby
waived by Grantor and all other parties obligated in any manner whatsoever on
the Indebtedness (except for notice and opportunity to cure as provided herein
or in any of the other Loan Documents), declare the entire unpaid balance of
the Indebtedness immediately due and payable, and upon such declaration, the
entire unpaid balance of the Indebtedness shall be immediately due and
payable.  The failure to exercise any
remedy available to the Beneficiary shall not be deemed to be a waiver of any
rights or remedies of the Beneficiary under the Loan Documents, at law or in
equity.

 

(d)           Foreclosure-Power
of Sale.  Beneficiary may request
Trustee to proceed with foreclosure under the power of sale which is hereby
conferred, such foreclosure to be accomplished in accordance with the following
provisions:

 

(i)            Public
Sale.  Trustee is hereby authorized
and empowered, and it shall be Trustee’s special duty, upon such request of
Beneficiary, to sell the 

 

22

 

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

 

(ii)           Right
to Require Proof of Financial Ability and/or Cash Bid.  At any time during the bidding, the Trustee
may require a bidding party (A) to disclose its full name, state and city
of residence, occupation, and specific business office location, and the name
and address of the principal the bidding party is representing (if applicable),
and (B) to demonstrate reasonable evidence of the bidding party’s
financial ability (or, if applicable, the financial ability of the principal of
such bidding party), as a condition to the bidding party submitting bids at the
foreclosure sale.  If any such bidding
party (the “Questioned Bidder”) declines to comply with the Trustee’s
requirement in this regard, or if such Questioned Bidder does respond but the
Trustee, in Trustee’s sole and absolute discretion, deems the information or
the evidence of the financial ability of the Questioned Bidder (or, if applicable,
the principal of such bidding party) to be inadequate, then the Trustee may
continue the bidding with reservation; and in such event (1) the Trustee
shall be authorized to caution the Questioned Bidder concerning the legal
obligations to be incurred in submitting bids, and (2) if the Questioned
Bidder is not the highest bidder at the sale, or if having been the highest
bidder the Questioned Bidder fails to deliver the cash purchase price payment
promptly to the Trustee, all bids by the Questioned Bidder shall be null and
void.  The Trustee may, in Trustee’s sole
and absolute discretion, determine that a credit bid may be in the best
interest of the Grantor and Beneficiary, and elect to sell the Mortgaged
Property for credit or for a combination of cash and credit; provided, however,
that the Trustee shall have no obligation to accept any bid except an all cash
bid.  In the event the Trustee requires a
cash bid and cash is not delivered within a reasonable time after conclusion of
the bidding process, as specified by the Trustee, but in no event later than
3:45 p.m. local time on the day of sale, then said contingent sale shall
be null and void, the bidding process may be recommenced, and any subsequent
bids or sale shall be made as if no prior bids were made or accepted.

 

(iii)          Sale
Subject to Unmatured Indebtedness. 
In addition to the rights and powers of sale granted under the preceding
provisions of this subsection, if default is made in the payment of any
installment of the Indebtedness, Beneficiary may, at Beneficiary’s option, at
once or at any time thereafter while any matured installment remains unpaid,
without declaring the entire Indebtedness to be due and payable, orally or in
writing direct Trustee to enforce this trust and to sell the 

 

23

 

Mortgaged Property
subject to such unmatured Indebtedness and to the rights, powers, liens,
security interests, and assignments securing or providing recourse for payment
of such unmatured Indebtedness, in the same manner, all as provided in the
preceding provisions of this subsection. 
Sales made without maturing the Indebtedness may be made hereunder
whenever there is a default in the payment of any installment of the
Indebtedness, without exhausting the power of sale granted hereby, and without
affecting in any way the power of sale granted under this subsection, the
unmatured balance of the Indebtedness or the rights, powers, liens, security
interests, and assignments securing or providing recourse for payment of the
Indebtedness.

 

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

 

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

 

(e)           Beneficiary’s
Judicial Remedies.  Beneficiary, or
Trustee, upon written request of Beneficiary, may proceed by suit or suits, at
law or in equity, to enforce the payment of the Indebtedness and the
performance and discharge of the Obligations in accordance with the terms
hereof, of the Note, and the other Loan Documents, to foreclose the liens and
security interests of this Deed of Trust as against all or any part of 

 

24

 

the Mortgaged
Property, and to have all or any part of the Mortgaged Property sold under the
judgment or decree of a court of competent jurisdiction.  This remedy shall be cumulative of any other
nonjudicial remedies available to the Beneficiary with respect to the Loan
Documents.  Proceeding with a request or
receiving a judgment for legal relief shall not be or be deemed to be an
election of remedies or bar any available nonjudicial remedy of the
Beneficiary.

 

(f)            Beneficiary’s
Right to Appointment of Receiver. Beneficiary, as a matter of right and
without regard to the sufficiency of the security for repayment of the
Indebtedness and performance and discharge of the Obligations, without notice
to Grantor and without any showing of insolvency, fraud, or mismanagement on
the part of Grantor, and without the necessity of filing any judicial or other
proceeding other than the proceeding for appointment of a receiver, shall be
entitled to the appointment of a receiver or receivers of the Mortgaged
Property or any part thereof, and of the Rents, and Grantor hereby irrevocably
consents to the appointment of a receiver or receivers.  Any receiver appointed pursuant to the
provisions of this subsection shall have the usual powers and duties of
receivers in such matters.

 

(g)           Beneficiary’s
Uniform Commercial Code Remedies. 
The Beneficiary may exercise its rights of enforcement with respect to
Fixtures and Personalty under the UCC, and in conjunction with, in addition to
or in substitution for the rights and remedies under the UCC the Beneficiary
may and Grantor agrees as follows:

 

(i)            without
demand or notice to Grantor, except as provided herein or in the other Loan
Documents to the contrary, enter upon the Mortgaged Property to take possession
of, assemble, receive, and collect the Personalty, or any part thereof, or to
render it unusable; and

 

(ii)           Beneficiary
may require Grantor to assemble the Personalty and make it available at a place
the Beneficiary designates which is mutually convenient to allow the
Beneficiary to take possession or dispose of the Personalty; and

 

(iii)          written
notice mailed to Grantor as provided herein at least ten (10) days prior
to the date of public sale of the Personalty or prior to the date after which
private sale of the Personalty will be made shall constitute reasonable notice;
and

 

(iv)          any
sale made pursuant to the provisions of this subsection shall be deemed to have
been a public sale conducted in a commercially reasonable manner if held
contemporaneously with the sale of the other Mortgaged Property under power of
sale as provided herein upon giving the same notice with respect to the sale of
the Personalty hereunder as is required for such sale of the other Mortgaged
Property under power of sale, and such sale shall be deemed to be pursuant to a
security agreement covering both real and personal property under Section 9.604
of the UCC; and

 

25

 

(v)           in
the event of a foreclosure sale, whether made by the Trustee under the terms
hereof, or under judgment of a court, the Personalty and the other Mortgaged Property
may, at the option of the Beneficiary, be sold as a whole; and

 

(vi)          it
shall not be necessary that the Beneficiary take possession of the Personalty,
or any part thereof, prior to the time that any sale pursuant to the provisions
of this subsection is conducted, and it shall not be necessary that the
Personalty or any part thereof be present at the location of such sale; and

 

(vii)         prior
to application of proceeds of disposition of the Personalty to the
Indebtedness, such proceeds shall be applied to the reasonable expenses of
retaking, holding, preparing for sale or lease, selling, leasing and the like,
and the reasonable attorneys’ fees and legal expenses incurred by the
Beneficiary; and

 

(viii)        after
notification, if any, hereafter provided in this subsection, Beneficiary may
sell, lease, or otherwise dispose of the Personalty, or any part thereof, in
one or more parcels at public or private sale or sales, at Beneficiary’s
offices or elsewhere, for cash, on credit, or for future delivery.  Upon the request of Beneficiary, Grantor
shall assemble the Personalty and make it available to Beneficiary at any place
designated by Beneficiary that is reasonably convenient to Grantor and
Beneficiary.  Grantor agrees that
Beneficiary shall not be obligated to give more than ten (10) days’
written notice of the time and place of any public sale or of the time after
which any private sale may take place and that such notice shall constitute
reasonable notice of such matters. 
Grantor shall be liable for all expenses of retaking, holding, preparing
for sale, or the like, and all attorneys’ fees, legal expenses, and all other
costs and expenses incurred by Beneficiary in connection with the collection of
the Indebtedness and the enforcement of Beneficiary’s rights under the Loan
Documents.  Beneficiary shall apply the
proceeds of the sale of the Personalty against the Indebtedness in accordance
with the provisions of Section 7.4 of this Deed of Trust.  Grantor shall remain liable for any
deficiency if the proceeds of any sale or disposition of the Personalty are
insufficient to pay the Indebtedness in full. Grantor waives all rights of
marshalling in respect of the Personalty; and

 

(ix)           any
and all statements of fact or other recitals made in any bill of sale or assignment
or other instrument evidencing any foreclosure sale hereunder, the nonpayment
of the Indebtedness, the occurrence of any Event of Default, the Beneficiary
having declared all or a portion of such Indebtedness to be due and payable,
the notice of time, place, and terms of sale and of the properties to be sold
having been duly given, or any other act or thing having been duly done by the
Beneficiary, shall be taken as prima  facie evidence of the truth
of the facts so stated and recited; and

 

(x)            the
Beneficiary may appoint or delegate any one or more persons as agent to perform
any act or acts necessary or incident to any sale held by the Beneficiary,
including the sending of notices and the conduct of the sale, but in the name
and on behalf of the Beneficiary.

 

26

 

(h)           Rights
Relating to Leases and Rents. 
Grantor has, pursuant to the terms of this Deed of Trust and the
Assignment, assigned, as collateral, to Beneficiary all Rents under each of the
Leases covering all or any portion of the Mortgaged Property.  Beneficiary, or Trustee on Beneficiary’s
behalf, may at any time, and without notice, either in person, by agent, or by
receiver to be appointed by a court, enter and take possession of the Mortgaged
Property or any part thereof, and in its own name, sue for or otherwise collect
the Rents.  Grantor hereby agrees with
Beneficiary, upon notice from Trustee or Beneficiary to Grantor of the
occurrence of an Event of Default, after notice and opportunity to cure as
provided herein or the other Loan Documents, terminate the limited license
granted to Grantor in the Assignment, and thereafter direct the lessees under
the Leases to pay direct to Beneficiary the Rents due and to become due under
the Leases and attorn in respect of all other obligations thereunder direct to
Beneficiary, or Trustee on Beneficiary’s behalf, without any obligation on
their part to determine whether an Event of Default does in fact exist or has
in fact occurred.  All Rents collected by
Beneficiary, or Trustee acting on Beneficiary’s behalf, shall be applied as
provided for in Section 7.4 of this Deed of Trust; provided,
however, that if the costs, expenses, and attorneys’ fees shall exceed the
amount of Rents collected, the excess shall be added to the Indebtedness, shall
bear interest at the Default Rate, and shall be immediately due and
payable.  The entering upon and taking
possession of the Mortgaged Property, the collection of Rents, and the application
thereof as aforesaid shall not cure or waive any Event of Default or notice of
default, if any, hereunder nor invalidate any act done pursuant to such notice,
except to the extent any such default is fully cured.  Failure or discontinuance by Beneficiary, or
Trustee on Beneficiary’s behalf, at any time or from time to time, to collect
said Rents shall not in any manner impair the subsequent enforcement by
Beneficiary, or Trustee on Beneficiary’s behalf, of the right, power and
authority herein conferred upon it. 
Nothing contained herein, nor the exercise of any right, power, or
authority herein granted to Beneficiary, or Trustee on Beneficiary’s behalf,
shall be, or shall be construed to be, an affirmation by it of any tenancy,
lease, or option, nor an assumption of liability under, nor the subordination
of, the lien or charge of this Deed of Trust, to any such tenancy, lease, or
option, nor an election of judicial relief, if any such relief is requested or
obtained as to Leases or Rents, with respect to the Mortgaged Property or any other
collateral given by Grantor to Beneficiary. 
In addition, from time to time Beneficiary may elect, and notice hereby
is given to each lessee under any Lease, to subordinate the lien of this Deed
of Trust to any Lease by unilaterally executing and recording an instrument of
subordination, and upon such election the lien of this Deed of Trust shall be
subordinate to the Lease identified in such instrument of subordination;
provided, however, in each instance such subordination will not affect or be
applicable to, and expressly excludes any lien, charge, encumbrance, security
interest, claim, easement, restriction, option, covenant and other rights,
titles, interests or estates of any nature whatsoever with respect to all or
any portion of the Mortgaged Property to the extent that the same may have
arisen or intervened during the period between the recordation of this Deed of
Trust and the execution of the Lease identified in such instrument of
subordination.

 

(i)            Other
Rights.  Beneficiary, (i) may
surrender the insurance policies maintained pursuant to Section 4.7
hereof or any part thereof, and upon receipt shall apply the unearned premiums
as a credit on the Indebtedness, in accordance with the 

 

27

 

provisions of Section 7.4
hereof, and, in connection therewith, Grantor hereby appoints Beneficiary as
agent and attorney-in-fact (which is coupled with an interest and is therefore
irrevocable) for Grantor to collect such premiums; (ii) apply the reserve
for Impositions and insurance premiums, if any, required by the provisions of
this Deed of Trust toward payment of the Indebtedness; and (iii) shall
have and may exercise any and all other rights and remedies which Beneficiary
may have at law or in equity, or by virtue of any Loan Document or under the
UCC, or otherwise.

 

(j)            Beneficiary
as Purchaser.  Beneficiary may be the
purchaser of the Mortgaged Property or any part thereof, at any sale thereof,
whether such sale be under the power of sale herein vested in Trustee or upon
any other foreclosure of the liens and security interests hereof, or otherwise,
and Beneficiary shall, upon any such purchase, acquire good title to the
Mortgaged Property so purchased, free of the liens and security interests
hereof, unless the sale was made subject to an unmatured portion of the
Indebtedness.  The Beneficiary, as
purchaser, shall be treated in the same manner as any third party purchaser and
the proceeds of the Beneficiary’s purchase shall be applied in accordance with Section 7.4
of this Deed of Trust.

 

7.2         Other
Rights of Beneficiary.  Should any
part of the Mortgaged Property come into the possession of Beneficiary, whether
before or after default, Beneficiary may (for itself or by or through other
persons, firms, or entities) hold, lease, manage, use, or operate the Mortgaged
Property for such time and upon such terms as Beneficiary may deem prudent
under the circumstances (making such repairs, alterations, additions, and
improvements thereto and taking such other action as Beneficiary may from time
to time deem necessary or desirable) for the purpose of preserving the
Mortgaged Property or its value, pursuant to the order of a court of
appropriate jurisdiction or in accordance with any other rights held by Beneficiary
in respect of the Mortgaged Property. 
Grantor covenants to promptly reimburse and pay to Beneficiary on
demand, at the place where the Note is payable, the amount of all reasonable
expenses (including without limitation the cost of any insurance, Impositions,
or other charges) incurred by Beneficiary in connection with Beneficiary’s
custody, preservation, use, or operation of the Mortgaged Property, together
with interest thereon from the date incurred by Beneficiary at the Default
Rate; and all such expenses, costs, taxes, interest, and other charges shall be
and become a part of the Indebtedness. 
It is agreed, however, that the risk of loss or damage to the Mortgaged
Property is on Grantor, and Beneficiary shall have no liability whatsoever for
decline in value of the Mortgaged Property, for failure to obtain or maintain
insurance, or for failure to determine whether insurance in force is adequate
as to amount or as to the risks insured. 
Possession by the Beneficiary shall not be deemed an election of
judicial relief, if any such possession is requested or obtained, with respect
to any Mortgaged Property or collateral not in Beneficiary’s possession.

 

7.3         Possession
After Foreclosure.  If the liens or
security interests hereof shall be foreclosed by power of sale granted herein,
by judicial action, or otherwise, the purchaser at any such sale shall receive,
as an incident to purchaser’s ownership, immediate possession of the property
purchased, and if Grantor or Grantor’s successors shall hold possession of said
property or any part thereof subsequent to foreclosure, Grantor and Grantor’s
successors shall be considered as tenants at sufferance of the purchaser at
foreclosure sale (without limitation of other rights or remedies, at a
reasonable rental per day, due and payable daily, based upon the 

 

28

 

value of the portion of the Mortgaged Property so
occupied and sold to such purchaser), and anyone occupying such portion of the
Mortgaged Property, after demand is made for possession thereof, shall be
guilty of forcible detainer and shall be subject to eviction and removal,
forcible or otherwise, with or without process of law, and all damages by
reason thereof are hereby expressly waived.

 

7.4         Application
of Proceeds.  The proceeds from any
sale, lease, or other disposition made pursuant to this Article VII,
or the proceeds from the surrender of any insurance policies pursuant hereto,
or any Rents collected by Beneficiary from the Mortgaged Property, or the
reserve for Impositions and insurance premiums, if any, required by the
provisions of this Deed of Trust or sums received pursuant to Section 8.1
hereof, or proceeds from insurance which Beneficiary elects to apply to the
Indebtedness pursuant to Section 8.2 hereof, shall be applied by
Trustee, or by Beneficiary, as the case may be, to the Indebtedness in the
following order and priority:  (i) to
the payment of all expenses of advertising, selling, and conveying the
Mortgaged Property or part thereof, and/or prosecuting or otherwise collecting
Rents, proceeds, premiums, or other sums including reasonable attorneys’ fees
and a reasonable fee or commission to Trustee, not to exceed five percent (5%)
of the proceeds thereof or sums so received; (ii) to the remainder of the
Indebtedness as follows:  first, to the
remaining accrued but unpaid interest, second, to the matured portion of
principal of the Indebtedness, and third, to prepayment of the unmatured portion,
if any, of principal of the Indebtedness applied to installments of principal
in inverse order of maturity; (iii) the balance, if any and to the extent
applicable, remaining after the full and final payment of the Indebtedness and
full performance and discharge of the Obligations to the holder or beneficiary
of any inferior liens covering the Mortgaged Property, if any, in order of the
priority of such inferior liens (Trustee and Beneficiary shall hereby be
entitled to rely exclusively upon a commitment for title insurance issued to determine
such priority); and (iv) the cash balance, if any, to the Grantor.  The application of proceeds of sale or other
proceeds as otherwise provided herein shall be deemed to be a payment of the
Indebtedness like any other payment.  The
balance of the Indebtedness remaining unpaid, if any, shall remain fully due
and owing in accordance with the terms of the Note or the other Loan Documents.

 

7.5         Abandonment
of Sale.  In the event a foreclosure
hereunder is commenced by Trustee in accordance with Subsection 7.1(d) hereof,
at any time before the sale, Trustee may abandon the sale, and Beneficiary may
then institute suit for the collection of the Indebtedness and for the
foreclosure of the liens and security interests hereof and of the Loan
Documents.  If Beneficiary should
institute a suit for the collection of the Indebtedness and for a foreclosure
of the liens and security interests, Beneficiary may, at any time before the
entry of a final judgment in said suit, dismiss the same and require Trustee to
sell the Mortgaged Property or any part thereof in accordance with the
provisions of this Deed of Trust.

 

7.6         Payment
of Fees.  If the Note or any other
part of the Indebtedness shall be collected or if any of the Obligations shall
be enforced by legal proceedings, whether through a probate or bankruptcy court
or otherwise, or shall be placed in the hands of an attorney for collection
after maturity, whether matured by the expiration of time or by an option given
to the Beneficiary to mature same, or if Beneficiary becomes a party to any
suit where this Deed of Trust or the Mortgaged Property or any part thereof is
involved, Grantor agrees to pay Beneficiary’s reasonable attorneys’ fees and
expenses incurred, and such fees shall be and 

 

29

 

become a part of the Indebtedness and shall bear
interest from the date such costs are incurred at the Default Rate.

 

7.7         Miscellaneous.

 

(a)           In
case Beneficiary shall have proceeded to invoke any right, remedy, or recourse
permitted under the Loan Documents and shall thereafter elect to discontinue or
abandon same for any reason, Beneficiary shall have the unqualified right so to
do and, in such event, Grantor and Beneficiary shall be restored to their former
positions with respect to the Indebtedness, the Loan Documents, the Mortgaged
Property or otherwise, and the rights, remedies, recourses and powers of
Beneficiary shall continue as if same had never been invoked.

 

(b)           In
addition to the remedies set forth in this Article, upon the occurrence of an
Event of Default, the Beneficiary and Trustee shall, in addition, have all
other remedies available to them at law or in equity.

 

(c)           All
rights, remedies, and recourses of Beneficiary granted in the Note, this Deed
of Trust, the other Loan Documents, any other pledge of collateral, or
otherwise available at law or equity: (i) shall be cumulative and
concurrent; (ii) may be pursued separately, successively, or concurrently
against Grantor, the Mortgaged Property, or any one or more of them, at the
sole discretion of Beneficiary; (iii) may be exercised as often as
occasion therefor shall arise, it being agreed by Grantor that the exercise or
failure to exercise any of same shall in no event be construed as a waiver or
release thereof or of any other right, remedy, or recourse; (iv) shall be
nonexclusive; (v) shall not be conditioned upon Beneficiary exercising or
pursuing any remedy in relation to the Mortgaged Property prior to Beneficiary
bringing suit to recover the Indebtedness or suit on the Obligations; and (vi) in
the event Beneficiary elects to bring suit on the Indebtedness and/or the
Obligations and obtains a judgment against Grantor prior to exercising any
remedies in relation to the Mortgaged Property, all liens and security
interests, including the lien of this Deed of Trust, shall remain in full force
and effect and may be exercised at Beneficiary’s option.

 

(d)           Beneficiary
may release, regardless of consideration, any part of the Mortgaged Property without,
as to the remainder, in any way impairing, affecting, subordinating, or
releasing the lien or security interests evidenced by this Deed of Trust or the
other Loan Documents or affecting the obligations of Grantor or any other party
to pay the Indebtedness or perform and discharge the Obligations.  For payment of the Indebtedness, Beneficiary
may resort to any of the collateral therefor in such order and manner as
Beneficiary may elect.  No collateral
heretofore, herewith, or hereafter taken by Beneficiary shall in any manner
impair or affect the collateral given pursuant to the Loan Documents, and all
collateral shall be taken, considered, and held as cumulative.

 

(e)           Grantor
hereby irrevocably and unconditionally waives and releases:  (i) all benefits that might accrue to
Grantor by virtue of any present or future law exempting the Mortgaged Property
from attachment, levy or sale on execution or providing for any appraisement,
valuation, stay of execution, exemption from civil 

 

30

 

process,
redemption, or extension of time for payment; (ii) all notices following
any Event of Default or of Trustee’s exercise of any right, remedy, or recourse
provided for under the Loan Documents; and (iii) any right to a marshalling
of assets or a sale in inverse order of alienation.

 

(f)            Grantor
and Beneficiary mutually agree that there are no, nor shall there be any,
implied covenants of good faith and fair dealing or other similar covenants or
agreements in this Deed of Trust and the other Loan Documents.  All agreed contractual duties are set forth
in this Deed of Trust, the Note, and the other Loan Documents.

 

(g)           The
remedies in this Article VII are available under and governed by
the real property laws of Texas and are not governed by the personal property
laws of Texas, including but not limited to, the power to dispose of personal
property in a commercially reasonable manner under Section 9.610 of the
UCC.

 

7.8         Waiver
of Deficiency Statute.

 

(a)           In
the event an interest in any of the Mortgaged Property is foreclosed upon
pursuant to a judicial or nonjudicial foreclosure sale, Grantor agrees as
follows.  Notwithstanding the provisions
of Sections 51.003, 51.004, and 51.005 of the Texas Property Code (as the
same may be amended from time to time), and to the extent permitted by law,
Grantor agrees that Beneficiary shall be entitled to seek a deficiency judgment
from Grantor and any other party obligated on the Note equal to the difference
between the amount owing on the Note and the amount for which the Mortgaged
Property was sold pursuant to judicial or nonjudicial foreclosure sale.  Grantor expressly recognizes that this
section constitutes a waiver of the above-cited provisions of the Texas
Property Code which would otherwise permit Grantor and other persons against
whom recovery of deficiencies is sought or Guarantor independently (even absent
the initiation of deficiency proceedings against them) to present competent
evidence of the fair market value of the Mortgaged Property as of the date of
the foreclosure sale and offset against any deficiency the amount by which the
foreclosure sale price is determined to be less than such fair market
value.  Grantor further recognizes and
agrees that this waiver creates an irrebuttable presumption that the
foreclosure sale price is equal to the fair market value of the Mortgaged
Property for purposes of calculating deficiencies owed by Grantor, Guarantor,
and others against whom recovery of a deficiency is sought.

 

(b)           Alternatively,
in the event the waiver provided for in subsection (a) above is
determined by a court of competent jurisdiction to be unenforceable, the
following shall be the basis for the finder of fact’s determination of the fair
market value of the Mortgaged Property as of the date of the foreclosure sale
in proceedings governed by Sections 51.003, 51.004 and 51.005 of the Texas
Property Code (as amended from time to time): 
(i) the Mortgaged Property shall be valued in an “as is” condition
as of the date of the foreclosure sale, without any assumption or expectation
that the Mortgaged Property will be repaired or improved in any manner before a
resale of the Mortgaged Property after foreclosure; (ii) the valuation
shall be based upon an assumption that the foreclosure purchaser desires a
resale of the Mortgaged Property for cash promptly (but 

 

31

 

no later than
twelve (12) months) following the foreclosure sale; (iii) all reasonable
closing costs customarily borne by the seller in commercial real estate
transactions should be deducted from the gross fair market value of the
Mortgaged Property, including, without limitation, brokerage commissions, title
insurance, a survey of the Mortgaged Property, tax prorations, attorneys’ fees,
and marketing costs; (iv) the gross fair market value of the Mortgaged
Property shall be further discounted to account for any estimated holding costs
associated with maintaining the Mortgaged Property pending sale, including,
without limitation, utilities expenses, property management fees, taxes and
assessments (to the extent not accounted for in (iii) above), and other
maintenance, operational and ownership expenses; and (v) any expert
opinion testimony given or considered in connection with a determination of the
fair market value of the Mortgaged Property must be given by persons having at
least five (5) years experience in appraising property similar to the
Mortgaged Property and who have conducted and prepared a complete written appraisal
of the Mortgaged Property taking into consideration the factors set forth
above.

 

ARTICLE
VIII

 

SPECIAL
PROVISIONS

 

8.1         Casualty
and Condemnation Proceeds.  After the
happening of (a) any casualty to the Mortgaged Property or any part thereof
or (b) the taking of any portion of the Mortgaged Property either under
condemnation or eminent domain or through settlement in lieu of proceedings
under the power of eminent domain ((a) and (b) being hereinafter
referred to as a “Loss”), Grantor shall give prompt written notice of the Loss
to Beneficiary.  Notwithstanding any
contrary provisions of this Deed of Trust, Beneficiary shall make the proceeds
of insurance relating to a casualty loss or Grantor’s portion of the award paid
in condemnation or eminent domain or in settlement in lieu thereof (all such
proceeds and awards being hereinafter referred to as the “Proceeds”) available
to Grantor to pay all or a portion of the costs of repair or restoring the
Mortgaged Property to as nearly as practicable the condition of the Mortgaged
Property immediately preceding the Loss, provided that such funds shall be made
available to Grantor only on compliance with the following conditions
(collectively, the “Required Conditions”): 
(1) within ninety (90) days of a Loss, Grantor shall notify
Beneficiary of Grantor’s intention to use the Proceeds to repair or restore the
Mortgaged Property to as nearly as practicable their condition immediately
prior to the Loss; (2) other than Events of Default arising from condemnation
pursuant to Section 6.9 or destruction of improvements pursuant to Section 6.10
hereof, no Event of Default hereunder or under the Note or any other Loan
Documents shall have occurred and be continuing; (3) Beneficiary shall
have determined, in its reasonable judgment, that sufficient funds (including
the Proceeds) are available or committed on terms reasonably satisfactory to
Beneficiary to complete and pay for the restoration and repair of the Mortgaged
Property in accordance with all then applicable building code requirements and
such funds (including the Proceeds) shall be delivered to and held by
Beneficiary during the course of such repair and restoration for administration
in accordance with the provisions of this paragraph; (4) Grantor shall
furnish to Beneficiary plans and specifications for the repair or restoration
of the Mortgaged Property in form satisfactory to Beneficiary; and (5) the
general contractor selected by Grantor to perform the work of repairing or
restoring the Mortgaged Property (the 

 

32

 

“Contractor”) shall be a general contractor approved
by Beneficiary, and the contract between Grantor and the Contractor and an
estimated progress schedule shall be submitted to, and approved by Beneficiary
(Beneficiary may condition its approval of Contractor on, among other things, a
review of the Contractor’s audited financial statements and receipt of a
payment and performance bond issued by a corporate surety acceptable to
Beneficiary).  Any funds required in
addition to the Proceeds to complete and pay for the cost of restoring the
Mortgaged Property shall be the first funds applied to pay such costs;
thereafter, as such restoration or repair progresses, Beneficiary will make
periodic payments from the Proceeds to Grantor in accordance with the general
procedures of Beneficiary applicable to the disbursement of construction loans
at the time of such damages or destruction (and subject to the submission of
the required documentation).  Until
disbursed to pay for the cost of repairing or restoring the Mortgaged Property,
Beneficiary shall have a security interest in the Proceeds and other funds at
any time held by it pursuant to this paragraph.

 

Except to the extent that Proceeds are received by
Beneficiary and applied to the indebtedness secured hereby, nothing herein
contained shall be deemed to excuse Grantor from repairing or maintaining the
Mortgaged Property or restoring all damage or destruction to the Mortgaged
Property, regardless of the availability or sufficiency of Proceeds.  The application or release by Beneficiary of
any Proceeds shall not cure or waive any default or notice of default under
this Deed of Trust or invalidate any act done pursuant to such notice.  In the case of a partial taking pursuant to a
condemnation or exercise of the right of eminent domain, the amount of
impairment of the value of the collateral (not eliminated through a restoration
or repair of the Mortgaged Property) shall be paid to Beneficiary and applied
to a prepayment in part of the Note.

 

Notwithstanding any other provision of this Section 8.1,
if in the reasonable determination of Beneficiary the total amount of Proceeds
is less than $250,000.00 and the repair and restoration of the Mortgaged
Property can be completed in less than ninety (90) days and provided no Event
of Default has occurred and is continuing (other than Events of Default arising
from condemnation pursuant to Section 6.9 or destruction of
improvements pursuant to Section 6.10 hereof), Beneficiary shall,
upon request of Grantor, permit Grantor to apply for and receive the Proceeds
directly from the issuer or condemnor, provided the Grantor shall apply such
Proceeds solely to the prompt and diligent commencement and completion of such
repairs and restoration.

 

Provided the Grantor complies with this Section 8.1
and has completely satisfied the Required Conditions described above, an Event
of Default arising from condemnation pursuant to Section 6.9 or
destruction of improvements pursuant to Section 6.10 shall be
deemed to have been waived by the Beneficiary.

 

8.2         Reserve
for Impositions and Insurance Premiums. 
Upon the occurrence of, and during the continuation of, an Event of
Default, and should Beneficiary request, Grantor shall create a fund or reserve
for the payment of all insurance premiums and Impositions against or affecting
the Mortgaged Property by paying to Beneficiary, on the first day of each
calendar month prior to the maturity of the Note, a sum equal to the premiums
that will next become due and payable on the insurance policies covering
Grantor, the Mortgaged Property or any part thereof or such other insurance
policies required hereby or by the Loan Documents, plus 

 

33

 

Impositions next due on the Mortgaged Property or any
part thereof as estimated by Beneficiary, less all sums paid previously to
Beneficiary therefor, divided by the number of months to elapse before one
month prior to the date when each of such premiums and Impositions will become
due, such sums to be held by Beneficiary without interest to Grantor, unless
interest is required by applicable law, for the purposes of paying such
premiums and Impositions.  Any excess
reserve shall, at the discretion of Beneficiary, be credited by Beneficiary on
subsequent reserve payments or subsequent payments to be made on the Note by
the maker thereof, and any deficiency shall be paid by Grantor to Beneficiary
on or before the date when Beneficiary demands such payment to be made, but in
no event after the date when such premiums and Impositions shall become
delinquent.  In the event there exists a
deficiency in such fund or reserve at any time when Impositions or insurance
premiums are due and payable, Beneficiary may, but shall not be obligated to,
advance the amount of such deficiency on behalf of Grantor and such amounts so
advanced shall become a part of the Indebtedness, shall be immediately due and
payable, and shall bear interest at the Default Rate from the date of such
advance through and including the date of repayment.  Transfer of legal title to the Mortgaged
Property pursuant to this Deed of Trust shall automatically transfer to the
holder of legal title to the Mortgaged Property the interest of Grantor in all
sums deposited with Beneficiary under the provisions hereof or otherwise.

 

8.3         INDEMNITY.  GRANTOR SHALL INDEMNIFY, DEFEND, AND HOLD
HARMLESS BENEFICIARY AND TRUSTEE, THEIR PARENTS, SUBSIDIARIES, DIRECTORS,
OFFICERS, EMPLOYEES, REPRESENTATIVES, AGENTS, SUCCESSORS, AND ASSIGNS (“INDEMNIFIED
PARTIES”) FROM AND AGAINST ANY AND ALL LIABILITY, DAMAGE, LOSS, COST, OR
EXPENSE (INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES AND EXPENSES), ACTION,
CAUSE OF ACTION, PROCEEDING, CLAIM OR DISPUTE INCURRED OR SUFFERED BY
BENEFICIARY OR TRUSTEE, WHETHER VOLUNTARILY OR INVOLUNTARILY INCURRED OR
SUFFERED, IN RESPECT OF THE FOLLOWING:

 

(a)           ANY LITIGATION CONCERNING THIS DEED OF TRUST, THE OTHER LOAN DOCUMENTS
OR THE MORTGAGED PROPERTY, OR ANY INTEREST OF GRANTOR OR BENEFICIARY THEREIN,
OR THE RIGHT OF OCCUPANCY THEREOF BY GRANTOR OR BENEFICIARY, WHETHER OR NOT ANY
SUCH LITIGATION IS PROSECUTED TO A FINAL, NON-APPEALABLE JUDGMENT;

 

(b)           ANY DISPUTE, INCLUDING DISPUTES AS TO THE DISBURSEMENT OF PROCEEDS OF
THE NOTE NOT YET DISBURSED, AMONG OR BETWEEN ANY OF THE CONSTITUENT PARTIES OR
OTHER PARTNERS OR VENTURERS OF GRANTOR IF GRANTOR IS A GENERAL OR LIMITED
PARTNERSHIP, OR AMONG OR BETWEEN ANY EMPLOYEES, OFFICERS, DIRECTORS OR
SHAREHOLDERS OF GRANTOR IF GRANTOR IS A CORPORATION, OR AMONG OR BETWEEN ANY
MEMBERS, TRUSTEES OR OTHER RESPONSIBLE PARTIES IF GRANTOR IS AN ASSOCIATION,
TRUST OR OTHER ENTITY;

 

34

 

(c)           THE USE, GENERATION, MANUFACTURE, PRODUCTION, STORAGE, RELEASE,
THREATENED RELEASE, DISCHARGE, DISPOSAL, OR PRESENCE OF A HAZARDOUS SUBSTANCE
ON, UNDER OR ABOUT THE MORTGAGED PROPERTY, WHETHER KNOWN OR UNKNOWN AT THE TIME
OF THE EXECUTION HEREOF, INCLUDING WITHOUT LIMITATION (i) ALL FORESEEABLE
CONSEQUENTIAL DAMAGES OF ANY SUCH USE, GENERATION, MANUFACTURE, PRODUCTION,
STORAGE, RELEASE, THREATENED RELEASE, DISCHARGE, DISPOSAL, OR PRESENCE, AND (ii) THE
COSTS OF ANY REQUIRED OR NECESSARY ENVIRONMENTAL INVESTIGATION OR MONITORING,
ANY REPAIR, CLEANUP, OR DETOXIFICATION OF THE MORTGAGED PROPERTY, AND THE
PREPARATION AND IMPLEMENTATION OF ANY CLOSURE, REMEDIAL, OR OTHER REQUIRED
PLANS;

 

(d)           EXERCISE OF RIGHTS AND REMEDIES UNDER SECTION 7.1(b) HEREOF,
AND FROM ANY AND ALL CLAIMS AND DEMANDS WHATSOEVER WHICH MAY BE ASSERTED
AGAINST THE BENEFICIARY BY REASON OF ANY ALLEGED OBLIGATIONS OR UNDERTAKINGS ON
ITS PART TO PERFORM OR DISCHARGE ANY OF THE TERMS, COVENANTS, OR
AGREEMENTS CONTAINED IN ANY LEASE; AND

 

(e)           ANY ACTION BROUGHT BY BENEFICIARY OR TRUSTEE AGAINST GRANTOR UNDER THIS
DEED OF TRUST OR THE OTHER LOAN DOCUMENTS, WHETHER OR NOT SUCH ACTION IS
PROSECUTED TO A FINAL, NON-APPEALABLE JUDGMENT.

 

NOTWITHSTANDING THE FOREGOING,
GRANTOR SHALL HAVE NO OBLIGATION TO REIMBURSE INDEMNIFIED PARTIES FOR DAMAGES
INCLUDING ATTORNEYS’ FEES AND EXPENSES IN ANY ACTION WHERE THERE IS A FINAL,
NON-APPEALABLE JUDGMENT IMPOSING UPON INDEMNIFIED PARTY LIABILITY FOR ACTS OF
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

 

BENEFICIARY AND/OR
TRUSTEE MAY EMPLOY AN ATTORNEY OR ATTORNEYS TO PROTEST OR ENFORCE ITS
RIGHTS, REMEDIES AND RECOURSES UNDER THIS DEED OF TRUST AND THE OTHER LOAN
DOCUMENTS, AND TO ADVISE AND DEFEND BENEFICIARY AND/OR TRUSTEE WITH RESPECT TO
ANY SUCH ACTIONS AND OTHER MATTERS. 
GRANTOR SHALL REIMBURSE BENEFICIARY AND/OR TRUSTEE FOR THEIR RESPECTIVE
REASONABLE ATTORNEYS’ FEES AND EXPENSES (INCLUDING EXPENSES AND COSTS FOR
EXPERTS) IMMEDIATELY UPON RECEIPT OF A WRITTEN DEMAND THEREFOR, WHETHER ON A
MONTHLY OR OTHER TIME INTERVAL, AND WHETHER OR NOT AN ACTION IS ACTUALLY
COMMENCED OR CONCLUDED.  ALL OTHER
REIMBURSEMENT AND INDEMNITY OBLIGATIONS HEREUNDER SHALL BECOME DUE AND PAYABLE
WHEN ACTUALLY INCURRED BY BENEFICIARY AND/OR TRUSTEE.  ANY PAYMENTS NOT MADE WITHIN FIVE (5) 

 

35

 

DAYS
AFTER WRITTEN DEMAND THEREFOR SHALL BEAR INTEREST AT THE DEFAULT RATE FROM THE
DATE OF SUCH DEMAND UNTIL FULLY PAID. 
THE PROVISIONS OF THIS SECTION 8.3 SHALL SURVIVE REPAYMENT
OF THE INDEBTEDNESS AND PERFORMANCE OF THE OBLIGATIONS, THE RELEASE OF THE LIEN
OF THIS DEED OF TRUST, ANY FORECLOSURE (OR ACTION IN LIEU OF FORECLOSURE) AND
THE EXERCISE BY BENEFICIARY OF ANY AND ALL REMEDIES SET FORTH HEREIN OR IN THE
LOAN DOCUMENTS.

 

8.4           Subrogation.  Grantor waives any and all right to claim,
recover, or subrogation against Beneficiary or its officers, directors,
employees, agents, attorneys, or representatives for loss or damage to Grantor,
the Mortgaged Property, Grantor’s property or the property of others under
Grantor’s control from any cause insured against or required to be insured
against by the provisions of the Loan Documents.

 

8.5           Waiver
of Setoff.  The Indebtedness, or any
part thereof, shall be paid by Grantor without notice, demand, counterclaim,
setoff, deduction, or defense and without abatement, suspension, deferment,
diminution, or reduction by reason of:  (i) any
damage to, destruction of, or any condemnation or similar taking of the
Mortgaged Property; (ii) any restriction or prevention of or interference
with any use of the Mortgaged Property; (iii) any title defect or
encumbrance or any eviction from the Mortgaged Property by superior title or
otherwise; (iv) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation, or other like proceeding relating to
Trustee, Beneficiary, or Grantor, or any action taken with respect to this Deed
of Trust by any trustee or receiver of Beneficiary or Grantor, or by any court,
in any such proceeding; (v) any claim which Grantor has or might have
against Trustee or Beneficiary; (vi) any default or failure on the part of
Beneficiary to perform or comply with any of the terms hereof or of any other
agreement with Grantor; or (vii) any other occurrence whatsoever, whether
similar or dissimilar to the foregoing, whether or not Grantor shall have
notice or knowledge of any of the foregoing. 
Except as expressly provided herein, Grantor waives all rights now or
hereafter conferred by statute or otherwise to any abatement, suspension,
deferment, diminution, or reduction of the Indebtedness.

 

8.6           Setoff.  Beneficiary shall be entitled to exercise
both the rights of setoff and banker’s lien, if applicable, against the
interest of Grantor in and to each and every account and other property of
Grantor which are in the possession of Beneficiary to the full extent of the
outstanding balance of the Indebtedness.

 

8.7           Consent
to Disposition.  It is expressly
agreed that Beneficiary may predicate Beneficiary’s decision to grant or withhold
consent to a Disposition pursuant to which the Note is assumed on such terms
and conditions as Beneficiary may require, in Beneficiary’s sole discretion,
including without limitation (i) consideration of the creditworthiness of
the party to whom such Disposition will be made and its management ability with
respect to the Mortgaged Property, (ii) consideration of whether the
security for repayment of the Indebtedness and the performance and discharge of
the Obligations, or Beneficiary’s ability to enforce its rights, remedies, and
recourses with respect to such security, will be impaired in any way by the
proposed Disposition, (iii) an increase in the rate of interest payable
under the Note or any other change in the terms and provisions of the Note and
other Loan Documents, (iv) reimbursement of Beneficiary for all costs and
expenses incurred by Beneficiary in investigating the 

 

36

 

creditworthiness and management ability of the party
to whom such Disposition will be made and in determining whether Beneficiary’s
security will be impaired by the proposed Disposition, (v) payment to
Beneficiary of a transfer fee to cover the cost of documenting the Disposition
in its records, (vi) payment of Beneficiary’s reasonable attorneys’ fees
in connection with such Disposition, (vii) the express assumption of
payment of the Indebtedness and performance and discharge of the Obligations by
the party to whom such Disposition will be made (with or without the release of
Grantor from liability for such Indebtedness and Obligations), (viii) the
execution of assumption agreements, modification agreements, supplemental loan
documents, and financing statements, satisfactory in form and substance to
Beneficiary, (ix) endorsements (to the extent available under applicable
law) to any existing mortgagee title insurance policies insuring Beneficiary’s
liens and security interests covering the Mortgaged Property, and (x) require
additional security for the payment of the Indebtedness and performance and
discharge of the Obligations.

 

8.8           Consent
to Subordinate Mortgage.  In the
event of consent by Beneficiary to the granting of a Subordinate Mortgage, or
in the event the above-described right of Beneficiary to declare the
Indebtedness to be immediately due and payable upon the granting of a
Subordinate Mortgage without the prior written consent of Beneficiary is
determined by a court of competent jurisdiction to be unenforceable under the
provisions of any applicable law, Grantor will not execute or deliver any
Subordinate Mortgage unless (i) it shall contain express covenants to the
effect:  (a) that the Subordinate
Mortgage is in all respects unconditionally subject and subordinate to the lien
and security interest evidenced by this Deed of Trust and each term and
provision hereof; (b) that if any action or proceeding shall be instituted
to foreclose the Subordinate Mortgage (regardless of whether the same is a
judicial proceeding or pursuant to a power of sale contained therein), no tenant
of any portion of the Mortgaged Property will be named as a party defendant,
nor will any action be taken with respect to the Mortgaged Property which would
terminate any occupancy or tenancy of the Mortgaged Property without the prior
written consent of Beneficiary; (c) that the rents and profits, if
collected through a receiver or by the holder of the Subordinate Mortgage,
shall be applied first to the Indebtedness, next to the payment of the
Impositions, and then to the performance and discharge of the Obligations; and (d) that
if any action or proceeding shall be brought to foreclose the Subordinate
Mortgage (regardless of whether the same is a judicial proceeding or pursuant
to a power of sale contained therein), written notice of the commencement thereof
will be given to Beneficiary contemporaneously with the commencement of such
action or proceeding; and (ii) a copy thereof shall have been delivered to
Beneficiary not less than ten (10) days prior to the date of the execution
of such Subordinate Mortgage.

 

ARTICLE
IX

 

ASSIGNMENT
OF LEASES AND RENTS

 

9.1           Assignment.  For Ten Dollars ($10.00) and other good and
valuable consideration, including the indebtedness evidenced by the Note, the
receipt and sufficiency of which are hereby acknowledged and confessed, Grantor
has GRANTED, BARGAINED, SOLD, and CONVEYED, and by these presents does GRANT,
BARGAIN, SELL, and CONVEY unto Beneficiary, as security for the payment of the
Indebtedness and the performance and discharge 

 

37

 

of the Obligations, the Leases and the Rents subject
only to the Permitted Exceptions applicable thereto and the License (herein
defined); TO HAVE AND TO HOLD the Leases and the Rents unto Beneficiary,
forever, and Grantor does hereby bind itself, its successors, and assigns to
warrant and forever defend the title to the Leases and the Rents unto
Beneficiary against every person whomsoever lawfully claiming or to claim the
same or any part thereof; provided, however, that if Grantor shall pay or cause
to be paid the Indebtedness as and when same shall become due and payable and
shall perform and discharge or cause to be performed and discharged the
Obligations on or before the date same are to be performed and discharged, then
this assignment shall terminate and be of no further force and effect, and all
rights, titles, and interests conveyed pursuant to this assignment shall become
vested in Grantor without the necessity of any further act or requirement by
Grantor, Trustee, or Beneficiary.

 

9.2           Limited License.  Beneficiary hereby grants to Grantor a
limited license (the “License”), nonexclusive with the rights of Beneficiary
reserved in Section 9.4 hereof, to exercise and enjoy all
incidences of the status of a lessor of the Leases and the Rents, including
without limitation, the right to collect, demand, sue for, attach, levy,
recover, and receive the Rents, and to give proper receipts, releases, and
acquittances therefor.  Grantor hereby
agrees to receive all Rents and hold the same as a trust fund to be applied,
and to apply the Rents so collected, first to the payment of the Indebtedness,
next to the payment of the Impositions, and then to the performance and
discharge of the Obligations.  Thereafter,
Grantor may use the balance of the Rent collected in any manner not
inconsistent with the Loan Documents.

 

9.3           Enforcement of Leases.  So long as the License is in effect, Grantor
shall (i) submit any and all proposed Leases to Beneficiary for approval
prior to the execution thereof, except as otherwise permitted by the Assignment
of Leases and Rents dated of even date by and between Grantor and Beneficiary, (ii) duly
and punctually perform and comply with any and all representations, warranties,
covenants, and agreements expressed as binding upon the lessor under any Lease,
(iii) maintain each of the Leases in full force and effect during the term
thereof, (iv) appear in and defend any action or proceeding in any manner
connected with any of the Leases, (v) deliver to Beneficiary copies of all
Leases, and (vi) deliver to Beneficiary such further information, and
execute and deliver to Beneficiary such further assurances and assignments,
with respect to the Leases as Beneficiary may from time to time request.  Without Beneficiary’s prior written consent,
Grantor shall not (i) do or knowingly permit to be done anything to impair
the value of any of the Leases, (ii) except for security or similar
deposits, collect any of the Rent more than one (1) month in advance of
the time when the same becomes due under the terms of any Lease, (iii) discount
any future accruing Rents, (iv) amend, modify, or terminate any of the
Leases, except as otherwise permitted by the Assignment of Leases and Rents
dated of even date by and between Grantor and Beneficiary, or (v) assign
or grant a security interest in or to the License or any of the Leases or
Rents.

 

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

 

38

 

ARTICLE
X

 

SECURITY
AGREEMENT

 

10.1         Security
Interest.  This Deed of Trust (a) shall
be construed as a deed of trust on real property, and (b) shall also
constitute and serve as a “Security Agreement” on personal property within the
meaning of, and shall constitute until the grant of this Deed of Trust shall
terminate as provided in Article II hereof, a first and prior
security interest under the UCC as to property within the scope thereof and in
the state where the Mortgaged Property is located with respect to the Fixtures,
Contracts, Leases and Rents.  To this
end, Grantor has GRANTED, BARGAINED, CONVEYED, ASSIGNED, TRANSFERRED, and SET
OVER, and by these presents does GRANT, BARGAIN, CONVEY, ASSIGN, TRANSFER and
SET OVER, unto Trustee and Beneficiary, a first and prior security interest and
all of Grantor’s right, title and interest in, to, under and with respect to
the Fixtures, Contracts, Leases, and Rents to secure the full and timely
payment of the Indebtedness and the full and timely performance and discharge
of the Obligations, subject only to the Permitted Exceptions applicable
thereto.  It is the intent of Grantor,
Beneficiary, and Trustee that this Deed of Trust encumber all Leases and Rents,
that all items contained in the definition of “Leases” and “Rents” which are
included within the UCC be covered by the security interest granted in this Article X,
and that all items contained in the definition of “Leases” and “Rents” which
are excluded from the UCC be covered by the provisions of Article II
and the Assignment.

 

10.2         Financing
Statements.  Grantor hereby agrees
with Beneficiary to execute and deliver to Beneficiary, in form and substance
satisfactory to Beneficiary, such “Financing Statements” and such further assurances
as Beneficiary may, from time to time, reasonably consider necessary to create,
perfect, and preserve Beneficiary’s security interest herein granted, and
Beneficiary may cause such statements and assurances to be recorded and filed,
at such times and places as may be required or permitted by law to so create,
perfect, and preserve such security interest.

 

10.3         Construction
Mortgage and Fixture Filing.  This
Deed of Trust secures future advances to be used for construction of
improvements on the Land pursuant to the Loan Agreement.  Accordingly, this Deed of Trust constitutes a
“construction mortgage” under the UCC. 
This Deed of Trust shall also constitute a “fixture filing” for the
purposes of the UCC.  All or part of the
Mortgaged Property are or are to become fixtures; information concerning the
security interest herein granted may be obtained from either party at the
address of such party set forth herein. 
For purposes of the security interest herein granted, the address of
debtor (Grantor) is set forth in the first paragraph of this Deed of Trust and
the address of the secured party (Beneficiary) is set forth in Article I
hereof.

 

ARTICLE
XI

 

CONCERNING
THE TRUSTEE

 

11.1         No
Required Action.  Trustee shall not
be required to take any action toward the execution and enforcement of the
trust hereby created or to institute, appear in, or defend any 

 

39

 

action, suit, or other proceeding in connection
therewith where, in his opinion, such action would be likely to involve him in
expense or liability, unless requested so to do by a written instrument signed
by Beneficiary and, if Trustee so requests, unless Trustee is tendered security
and indemnity satisfactory to Trustee against any and all cost, expense, and
liability arising therefrom.  Trustee
shall not be responsible for the execution, acknowledgment, or validity of the
Loan Documents, or for the proper authorization thereof, or for the sufficiency
of the lien and security interest purported to be created hereby, and Trustee
makes no representation in respect thereof or in respect of the rights,
remedies, and recourses of Beneficiary.

 

11.2         Certain
Rights.  With the approval of
Beneficiary, Trustee shall have the right to take any and all of the following
actions:  (i) to select, employ, and
advise with counsel (who may be, but need not be, counsel for Beneficiary) upon
any matters arising hereunder, including the preparation, execution, and
interpretation of the Loan Documents, and shall be fully protected in relying
as to legal matters on the advice of counsel, (ii) to execute any of the
trusts and powers hereof and to perform any duty hereunder either directly or
through his agents or attorneys, (iii) to select and employ, in and about
the execution of his duties hereunder, suitable accountants, engineers and
other experts, agents and attorneys-in-fact, either corporate or individual,
not regularly in the employ of Trustee, and Trustee shall not be answerable for
any act, default, negligence, or misconduct of any such accountant, engineer or
other expert, agent or attorney-in-fact, if selected with reasonable care, or
for any error of judgment or act done by Trustee in good faith, or be otherwise
responsible or accountable under any circumstances whatsoever, except for
Trustee’s gross negligence or bad faith, and (iv) any and all other lawful
action as Beneficiary may instruct Trustee to take to protect or enforce
Beneficiary’s rights hereunder.  Trustee
shall not be personally liable in case of entry by Trustee, or anyone entering
by virtue of the powers herein granted to Trustee, upon the Mortgaged Property
for debts contracted for or liability or damages incurred in the management or
operation of the Mortgaged Property. 
Trustee shall have the right to rely on any instrument, document, or
signature authorizing or supporting any action taken or proposed to be taken by
Trustee hereunder, believed by Trustee in good faith to be genuine.  Trustee shall be entitled to reimbursement
for expenses incurred by Trustee in the performance of Trustee’s duties
hereunder and to reasonable compensation for such of Trustee’s services
hereunder as shall be rendered.  Grantor
will, from time to time, pay the compensation due to Trustee hereunder and
reimburse Trustee for, and save Trustee harmless against, any and all liability
and expenses which may be incurred by Trustee in the performance of Trustee’s
duties.

 

11.3         Retention
of Money.  All moneys received by
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated in any
manner from any other moneys (except to the extent required by applicable law)
and Trustee shall be under no liability for interest on any moneys received by Trustee
hereunder.

 

11.4         Successor
Trustees.  Trustee may resign by the
giving of notice of such resignation in writing or verbally to
Beneficiary.  If Trustee shall die,
resign, or become disqualified from acting in the execution of this trust, or
if, for any reason, Beneficiary shall prefer to appoint a substitute trustee or
multiple substitute trustees, or successive substitute trustees or successive
multiple substitute trustees, to act instead of the aforenamed Trustee,
Beneficiary shall have full power to appoint a substitute trustee (or, if
preferred, multiple 

 

40

 

substitute trustees) in succession who shall succeed
(and if multiple substitute trustees are appointed, each of such multiple
substitute trustees shall succeed) to all the estates, rights, powers, and
duties of the aforenamed Trustee.  Such
appointment may be executed by any authorized agent of Beneficiary, and if such
Beneficiary be a corporation and such appointment be executed in its behalf by
any officer of such corporation, such appointment shall be conclusively
presumed to be executed with authority and shall be valid and sufficient
without proof of any action by the board of directors or any superior officer
of the corporation.  Grantor hereby
ratifies and confirms any and all acts which the aforenamed Trustee, or his
successor or successors in this trust, shall do lawfully by virtue hereof.  If multiple substitute Trustees are
appointed, each of such multiple substitute Trustees shall be empowered and
authorized to act alone without the necessity of the joinder of the other
multiple substitute trustees, whenever any action or undertaking of such
substitute trustees is requested or required under or pursuant to this Deed of
Trust or applicable law.

 

11.5         Perfection
of Appointment.  Should any deed,
conveyance, or instrument of any nature be required from Grantor by any Trustee
or substitute Trustee to more fully and certainly vest in and confirm to the
Trustee or substitute Trustee such estates, rights, powers, and duties, then,
upon request by the Trustee or substitute Trustee, any and all such deeds,
conveyances and instruments shall be made, executed, acknowledged, and
delivered and shall be caused to be recorded and/or filed by Grantor.

 

11.6         Succession
Instruments.  Any substitute Trustee
appointed pursuant to any of the provisions hereof shall, without any further
act, deed, or conveyance, become vested with all the estates, properties,
rights, powers, and trusts of its or his predecessor in the rights hereunder
with like effect as if originally named as Trustee herein; but nevertheless,
upon the written request of Beneficiary or of the substitute Trustee, the
Trustee ceasing to act shall execute and deliver any instrument transferring to
such substitute Trustee, upon the trusts herein expressed, all the estates,
properties, rights, powers, and trusts of the Trustee so ceasing to act, and
shall duly assign, transfer and deliver any of the property and moneys held by
such Trustee to the substitute Trustee so appointed in the Trustee’s place.

 

11.7         No
Representation by Trustee or Beneficiary. 
By accepting or approving anything required to be observed, performed,
or fulfilled or to be given to Trustee or Beneficiary pursuant to the Loan
Documents, including without limitation, any officer’s certificate, balance
sheet, statement of profit and loss or other financial statement, survey,
appraisal, or insurance policy, neither Trustee nor Beneficiary shall be deemed
to have warranted, consented to, or affirmed the sufficiency, legality,
effectiveness, or legal effect of the same, or of any term, provision, or
condition thereof, and such acceptance or approval thereof shall not be or
constitute any warranty or affirmation with respect thereto by Trustee or
Beneficiary.

 

ARTICLE
XII

 

MISCELLANEOUS

 

12.1         Release.  If the Indebtedness is paid in full in
accordance with the terms of this Deed of Trust, the Note, and the other Loan
Documents, and if Grantor shall well and truly 

 

41

 

perform each and every of the Obligations to be
performed and discharged in accordance with the terms of this Deed of Trust,
the Note and the other Loan Documents, then this conveyance shall become null
and void and be released at Grantor’s request and expense, and Beneficiary
shall have no further obligation to make advances under and pursuant to the
provisions hereof or in the other Loan Documents.

 

12.2         Performance
at Grantor’s Expense.  Subject to the
provisions of Section 11.11 hereof, Grantor shall (i) pay all
reasonable legal fees incurred by Beneficiary in connection with the
preparation of the Loan Documents (including any amendments thereto or
consents, releases, or waivers granted thereunder); (ii) reimburse
Beneficiary, promptly upon demand, for all amounts expended, advanced, or
incurred by Beneficiary to satisfy any obligation of Grantor under the Loan
Documents, which amounts shall include all court costs, attorneys’ fees
(including, without limitation, for trial, appeal, or other proceedings), fees
of auditors and accountants and other investigation expenses reasonably
incurred by Beneficiary in connection with any such matters; and (iii) any
and all other costs and expenses of performing or complying with any and all of
the Obligations.  Except to the extent
that costs and expenses are included within the definition of “Indebtedness,”
the payment of such costs and expenses shall not be credited, in any way and to
any extent, against any installment on or portion of the Indebtedness.

 

12.3         Survival
of Obligations.  Each and all of the
Obligations shall survive the execution and delivery of the Loan Documents and
the consummation of the loan called for therein and shall continue in full
force and effect until the Indebtedness shall have been paid in full; provided,
however, that nothing contained in this Section shall limit the
obligations of Grantor as otherwise set forth herein.

 

12.4         Recording
and Filing.  Grantor will cause the
Loan Documents (requested by the Beneficiary) and all amendments and
supplements thereto and substitutions therefor to be recorded, filed,
re-recorded, and refiled in such manner and in such places as Trustee or
Beneficiary shall reasonably request, and will pay all such recording, filing,
re-recording and refiling taxes, documentary stamp taxes, fees, and other
charges.

 

12.5         Notices.  All notices or other communications required
or permitted to be given pursuant to this Deed of Trust shall be in writing and
shall be considered as properly given if (i) mailed by first class United
States mail, postage prepaid, registered or certified with return receipt
requested, (ii) by delivering same in person to the intended addressee, (iii) by
delivery to an independent third party commercial delivery service for same day
or next day delivery and providing for evidence of receipt at the office of the
intended addressee, or (iv) by prepaid telegram, telex, or telefacsimile
to the addressee.  Notice so mailed shall
be effective two (2) business days after its deposit with the United
States Postal Service or any successor thereto; notice sent by such a
commercial delivery service shall be effective the earlier of two (2) business
days after delivery to such commercial delivery service or actual receipt by
addressee; notice given by personal delivery shall be effective only if and
when received by the addressee; and notice given by other means shall be
effective only if and when received at the office or designated place or
machine of the intended addressee.  For purposes
of notice, the addresses of the parties shall be as set forth herein; provided,
however, that either party shall have the right to change its address for
notice hereunder to any other location within the continental United States by
the giving of thirty (30) days’ notice to the other party in the manner set
forth herein.

 

42

 

12.6                           Covenants Running with the Land. 
All Obligations contained in this Deed of Trust and the other Loan
Documents are intended by Grantor, Beneficiary, and Trustee to be, and shall be
construed as, covenants running with the Mortgaged Property until the lien of
this Deed of Trust has been fully released by Beneficiary.

 

12.7                           Successors and Assigns. 
Subject to the provisions of Section 6.8 hereof, all of the
terms of the Loan Documents shall apply to, be binding upon, and inure to the
benefit of the parties thereto, their successors, assigns, heirs, and legal
representatives, and all other persons claiming by, through, or under them.

 

12.8                           No Waiver; Severability. 
Any failure by Trustee or Beneficiary to insist, or any election by
Trustee or Beneficiary not to insist, upon strict performance by Grantor or
others of any of the terms, provisions, or conditions of the Loan Documents
shall not be deemed to be a waiver of same or of any other terms, provisions,
or conditions thereof, and Trustee or Beneficiary shall have the right at any
time or times thereafter to insist upon strict performance by Grantor or others
of any and all of such terms, provisions, and conditions.  The Loan Documents are intended to be
performed in accordance with, and only to the extent permitted by, all
applicable Legal Requirements.  If any
provision of any of the Loan Documents or the application thereof to any person
or circumstance shall, for any reason and to any extent, be invalid or unenforceable,
then neither the remainder of the instrument in which such provision is
contained nor the application of such provision to other persons or
circumstances nor the other instruments referred to herein shall be affected
thereby, but rather shall be enforced to the greatest extent permitted by law.

 

12.9                           Counterparts. 
To facilitate execution, this Deed of Trust may be executed in as many
counterparts as may be convenient or required. 
It shall not be necessary that the signature and acknowledgment of, or
on behalf of, each party, or that the signature and acknowledgment of all
persons required to bind any party, appear on each counterpart.  All counterparts shall collectively
constitute a single instrument.  It shall
not be necessary in making proof of this Deed of Trust to produce or account
for more than a single counterpart containing the respective signatures and
acknowledgment of, or on behalf of, each of the parties hereto.  Any signature and acknowledgment page to
any counterpart may be detached from such counterpart without impairing the
legal effect of the signatures and acknowledgments thereon and thereafter
attached to another counterpart identical thereto except having attached to it
additional signature and acknowledgment pages.

 

12.10                     Applicable Law.  The Loan
Documents shall be governed by and construed according to the laws of the State
of Texas from time to time in effect except to the extent preempted by United
States federal law.

 

12.11                     Interest Provisions.

 

(a)                                  Savings Clause. 
It is expressly stipulated and agreed to be the intent of Grantor and
Beneficiary at all times to comply strictly with the applicable Texas law
governing the maximum rate or amount of interest payable on the Note or the
Related Indebtedness (or applicable United States federal law to the extent
that it permits Beneficiary to contract for, charge, take, reserve or receive a
greater amount of interest 

 

43

 

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

 

(b)                                 Definitions. 
As used herein, the term “Maximum Lawful Rate” shall mean the maximum
lawful rate of interest which may be contracted for, charged, taken, received
or reserved by Beneficiary in accordance with the applicable laws of the State
of 

 

44

 

Texas
(or applicable United States federal law to the extent that it permits
Beneficiary to contract for, charge, take, receive or reserve a greater amount
of interest than under Texas law), taking into account all Charges (as herein
defined) made in connection with the transaction evidenced by the Note and the
other Loan Documents.  As used herein,
the term “Charges” shall mean all fees, charges and/or any other things of
value, if any, contracted for, charged, received, taken or reserved by
Beneficiary in connection with the transactions relating to the Note and the
other Loan Documents, which are treated as interest under applicable law.  As used herein, the term “Related
Indebtedness” shall mean any and all debt paid or payable by Grantor to
Beneficiary pursuant to the Loan Documents or any other communication or
writing by or between Grantor and Beneficiary related to the transaction or
transactions that are the subject matter of the Loan Documents, except such
debt which has been paid or is payable by Grantor to Beneficiary under the
Note.

 

(c)                                  Ceiling Election. 
To the extent that Beneficiary is relying on Chapter 303 of the
Texas Finance Code to determine the Maximum Lawful Rate payable on the Note
and/or the Related Indebtedness, Beneficiary will utilize the weekly ceiling
from time to time in effect as provided in such Chapter 303, as
amended.  To the extent United States
federal law permits Beneficiary to contract for, charge, take, receive or
reserve a greater amount of interest than under Texas law, Beneficiary will
rely on United States federal law instead of such Chapter 303 for the
purpose of determining the Maximum Lawful Rate. 
Additionally, to the extent permitted by applicable law now or hereafter
in effect, Beneficiary may, at its option and from time to time, utilize any
other method of establishing the Maximum Lawful Rate under such
Chapter 303 or under other applicable law by giving notice, if required,
to Grantor as provided by applicable law now or hereafter in effect.

 

12.12                     Subrogation.  If any or all
of the proceeds of the Note have been used to extinguish, extend or renew any
indebtedness heretofore existing against the Mortgaged Property, then, to the
extent of such funds so used, Beneficiary shall be subrogated to all of the
rights, claims, liens, titles, and interests existing against the Mortgaged
Property heretofore held by, or in favor of, the holder of such indebtedness
and such former rights, claims, liens, titles, and interests, if any, are not
waived but rather are continued in full force and effect in favor of
Beneficiary and are merged with the lien and security interest created herein
as cumulative security for the repayment of the Indebtedness and the
performance and discharge of the Obligations.

 

12.13                     Rights Cumulative.  Beneficiary
shall have all rights, remedies, and recourses granted in the Loan Documents
and available at law or in equity (including, without limitation, those granted
by the UCC and applicable to the Mortgaged Property or any portion thereof),
and the same (i) shall be cumulative and concurrent, (ii) may be
pursued separately, successively, or concurrently against Grantor or others
obligated for the Indebtedness or any part thereof, or against any one or more
of them, or against the Mortgaged Property, at the sole discretion of
Beneficiary, (iii) may be exercised as often as occasion therefor shall
arise, it being agreed by Grantor that the exercise, discontinuance of the
exercise of or failure to exercise any of the same shall in no event be
construed as a waiver or release thereof or of any other right, remedy, or
recourse, and (iv) are intended to be, and shall be, nonexclusive.  All rights and remedies of 

 

45

 

Beneficiary hereunder and under the other Loan Documents shall extend
to any period after the initiation of foreclosure proceedings, judicial or
otherwise, with respect to the Mortgaged Property.

 

12.14                     Payments.  Remittances
in payment of any part of the Indebtedness other than in the required amount in
funds immediately available at the place where the Note is payable shall not,
regardless of any receipt or credit issued therefor, constitute payment until
the required amount is actually received by Beneficiary in funds immediately
available at the place where the Note is payable (or such other place as
Beneficiary, in Beneficiary’s sole discretion, may have established by delivery
of written notice thereof to Grantor) and shall be made and accepted subject to
the condition that any check or draft may be handled for collection in
accordance with the practice of the collecting bank or banks.  Acceptance by Beneficiary of any payment in
an amount less than the amount then due shall be deemed an acceptance on
account only, and the failure to pay the entire amount then due shall be and
continue to be an Event of Default.

 

12.15                     Exceptions to Covenants.  Grantor shall
not be deemed to be permitted to take any action or to fail to take any action
with respect to any particular covenant or condition contained herein or in any
of the Loan Documents if the action or omission would result in the breach of
any other covenant or condition contained herein or in any of the Loan
Documents which has not been specifically waived or consented to by
Beneficiary, nor shall Beneficiary be deemed to have consented to any such act
or omission if the same would provide cause for acceleration of the
Indebtedness as a result of the breach of any other covenant or condition
contained herein or in any of the Loan Documents which has not been
specifically waived or consented to by Beneficiary.

 

12.16                     Reliance.  Grantor
recognizes and acknowledges that in entering into the loan transaction
evidenced by the Loan Documents and accepting this Deed of Trust, Beneficiary
is expressly and primarily relying on the truth and accuracy of the foregoing
warranties and representations set forth in Article III hereof
without any obligation to investigate the Mortgaged Property and
notwithstanding any investigation of the Mortgaged Property by Beneficiary;
that such reliance exists on the part of Beneficiary prior hereto; that such
warranties and representations are a material inducement to Beneficiary in
making the loan evidenced by the Loan Documents and accepting of this Deed of
Trust; and that Beneficiary would not be willing to make the loan evidenced by
the Loan Documents and accept this Deed of Trust in the absence of any of such
warranties and representations.

 

12.17                     Change of Security.  Any part of
the Mortgaged Property may be released, regardless of consideration, by
Beneficiary from time to time without impairing, subordinating, or affecting in
any way the lien, security interest, and other rights hereof against the
remainder.  The lien, security interest,
and other rights granted hereby shall not be affected by any other security
taken for the Indebtedness or Obligations, or any part thereof.  The taking of additional collateral, or the
amendment, extension, renewal, or rearrangement of the Indebtedness or
Obligations, or any part thereof, shall not release or impair the lien,
security interest, and other rights granted hereby, or affect the liability of
any endorser or guarantor or improve the right of any junior lienholder; and
this Deed of Trust, as well as any instrument given to secure any amendment,
extension, renewal, or rearrangement of the Indebtedness or Obligations, or any
part thereof, shall be and remain a first and prior lien, except as otherwise
provided herein, on all of 

 

46

 

the Mortgaged Property not expressly released until the Indebtedness is
fully paid and the Obligations are fully performed and discharged.

 

12.18                     Headings.  The Article,
Section, and Subsection entitlements hereof are inserted for convenience of
reference only and shall in no way alter, modify, or define, or be used in
construing the text of such Articles, Sections, or Subsections.

 

12.19                     Entire Agreement; Amendment. 
THIS DEED OF TRUST AND THE OTHER LOAN DOCUMENTS EMBODY THE FINAL, ENTIRE
AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO.  THERE ARE NO ORAL AGREEMENTS AMONG THE
PARTIES HERETO.  The provisions hereof
and the other Loan Documents may be amended or waived only by an instrument in
writing signed by the Grantor and Beneficiary.

 

12.20                     Waiver of Right to Trial by Jury. 
GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM THAT RELATES TO OR
ARISES OUT OF ANY OF THE LOAN DOCUMENTS OR THE ACTS OR FAILURE TO ACT OF OR BY
BENEFICIARY IN THE ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS DEED
OF TRUST OR THE OTHER LOAN DOCUMENTS.

 

[Signature Page to Follow]

 

47

 

EXECUTED as of the date
first above written.

 

	
  NOTICE
  OF INDEMNIFICATION:

  	
  GRANTOR:

  	
   

  
	
   

  	
   

  	
   

  
	
  GRANTOR
  HEREBY ACKNOWLEDGES AND AGREES THAT THIS DEED OF TRUST CONTAINS CERTAIN
  INDEMNIFICATION PROVISIONS PURSUANT TO SECTION 8.3 HEREOF.

  	
  GLOBAL
  GEOPHYSICAL SERVICES, INC., a

  Delaware corporation, d/b/a GGS Seismic, Inc.

  
	
   

  
	
   

  
	
  By:

  	
   

  
	
   

  	
   

  	
  Craig Lindberg

  
	
   

  	
   

  	
  Senior Vice President, CFO

  
				

 

 

	
  THE STATE OF
  TEXAS

  	
  §

  	
   

  
	
   

  	
  §

  	
   

  
	
  COUNTY OF
           

  	
  §

  	
   

  

 

This
foregoing instrument was acknowledged before me this
         day of February, 2008, by
Craig Lindberg, Senior Vice President and CFO of GLOBAL GEOPHYSICAL SERVICES,
INC., a Delaware corporation, on behalf of said corporation.

 

 

	
  [S E A L]

  	
   

  
	
   

  	
  Notary Public, State of
  Texas

  
	
  My Commission Expires:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Printed Name of Notary
  Public

  
			

 

 

List of Attachments:

 

Exhibit “A” - Land
Description

Exhibit “B” - Permitted Exceptions

 

 

EXHIBIT A

 

LAND DESCRIPTION

 

All of GLOBAL GEOPHYSICAL INDUSTRIAL PARK, a
subdivision of 17.5284 acre, as set forth on map or plat thereof recorded under
Slide No. 20060274 of the Plat Records of Fort Bend County, Texas.

 

1

 

EXHIBIT B

 

PERMITTED
EXCEPTIONS

 

1.                                       Restrictive Covenants recorded in/under
Slide No. 20060274 of the Plat Records of FORT BEND County, Texas, but
omitting any covenant or restriction based on race, color, religion, sex,
handicap, familial status, or national origin.

 

2.                                       Building set back line thirty (30) feet
in width along the property lines common with South Gessner Road as shown on
plat recorded in Slide No. 20060274 of the Plat Records of Fort Bend
County, Texas.

 

3.                                       Building set back line ten (10) feet
in width adjacent to Industrial Drive as shown on the plat recorded in Slide No. 20060274
of the Plat Records of Fort Bend County, Texas.

 

4.                                       Drainage easement 12.5 feet in width
along the most southeasterly property line, as shown on the plat recorded in
Slide No. 20060274 of the Plat Records of Fort Bend County, Texas.

 

5.                                       Drainage easement thirty (30) feet in
width along the easterly property line as shown on plat recorded in Slide No. 20060274
of the Plat Records of Fort Bend County, Texas.

 

6.                                       Utility easement ten (10) feet in
width together with an aerial easement eleven (11) feet, six (6) inches
wide from a plane sixteen feet above the ground upwards, adjacent thereto, as
shown on plat recorded in Slide No. 20060274 of the Plat Records of Fort
Bend County, Texas and as affected by Release Of Easement executed by
CenterPoint Energy Houston Electric, LLC, et al., recorded under Fort Bend
County Clerk’s File No. 2006015765.

 

7.                                       Utility easement ten (10) feet in
width southwest of and adjoining the 30’ drainage easement along the easterly
property line, together with an aerial easement eleven (11) feet, six (6) inches
wide from a plane sixteen feet above the ground upwards, adjacent thereto, as
shown on plat recorded in Slide No. 20060274 of the Plat Records of Fort
Bend County, Texas.

 

8.                                       Utility easement ten (10) feet in
width southwest of and adjoining the 30’ drainage easement along the southerly
portion of the easterly property line, together with an aerial easement five (5) feet
wide from a plane sixteen (16) feet above the ground upwards, adjacent thereto,
as shown on plat recorded in Slide No. 20060274 of the Plat Records of
Fort Bend County, Texas.

 

9.                                       Utility easement ten (10) feet in
width along the northwesterly property line together with an aerial easement
adjoining thereto five (5) feet wide from a plane twenty (20) feet above
the ground upward, as shown on plat recorded in Slide No. 20060274 of the
Plat Records of Fort Bend County, Texas.

 

1

 

10.                                 Storm sewer easement thirty (30) feet in
width along the southwest property line as shown on plat recorded in Slide No. 20060274
of the Plat Records of Fort Bend County, Texas.

 

11.                                 Water main easement ten (10) feet in
width southeast of and adjacent to the above cited ten (10) foot utility
easement as shown on plat recorded in Slide No. 20060274 of the Plat
Records of Fort Bend County, Texas and as affected by Abandonment Of Waterline
Easement executed by Fort Bend County Water Control And Improvement District No. 2
recorded under Fort Bend County Clerk’s File No. 2006015667.

 

12.                                 Access easement forty (40) feet in width
as shown on plat recorded in Slide No. 20060274 of the Plat Records of
Fort Bend County, Texas and as affected by Abandonment Of Waterline Easement
executed by Fort Bend County Water Control And Improvement District No. 2
recorded under Fort Bend County Clerk’s File No. 2006015667.

 

13.                                 Utility easement 14 feet in width along a
southwesterly property line as shown on the plat recorded in Slide No. 20060274
of the Plat Records of Fort Bend County, Texas.

 

14.                                 2/3rds of all oil, gas and other minerals
as set out in instrument recorded in Volume 234, Page 622 of the Deed
Records of Fort Bend County, Texas.

 

15.                                 All oil, gas and other minerals as set
out in instrument recorded in Volume 553, Page 833 of the Deed Records of
Fort Bend County, Texas. Surface rights waived with provisions for drill site
designation and surface protection as set out therein.

 

16.                                 1/6th of all oil, gas and other minerals
as set out in instrument recorded in Volume 1096, Page 102 of the Official
Records of Fort Bend County, Texas.

 

17.                                 All of the oil, gas and other minerals as
set out in instruments recorded in/under Clerk’s File No. 9406436 and
9481638 of the Real Property Records of Fort Bend County, Texas.

 

18.                                 The following matters as shown on survey
dated February 14, 2006 and last revised on March 28, 2006 by Kenneth
A. Gruller, RPLS No. 5476, of Reno & Associates Professional Land
Surveying under Drawing No. 45-0419:

 

a.                                       Easements, or lesser rights, by virtue of traffic,
underground cable, and highway signs adjacent to South Gessner Road.

 

b.                                      Backslope interceptor along the northerly portion of
subject property.

 

19.                                 The following matters as shown on survey
dated March 6, 2006 and last revised on March 30, 2006 by Kenneth A.
Gruller, RPLS No. 5476, of Reno & Associates Professional Land
Surveyors, under Drawing No. 45-0606:

 

a.                                       Swale/ditch along the southeasterly portion of subject
property lying outside the boundaries of the dedicated drainage easement.

 

2

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