Document:

Exhibit
10.5

 

APN:

 

When
Recorded Return To:

 

Patrick M. Arnold

Powell Coleman & Arnold LLP

8080 North Central Expwy, Suite 1380

Dallas, Texas 
75206

 

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.

 

Construction Leasehold Deed of Trust, Assignment,

Security Agreement and Fixture Filing

 

by

 

Rest Easy LLC,

a Delaware limited liability company,

d/b/a PAL Rest Easy LLC,

as Grantor,

 

to and in favor of

 

Stephen J. Hughes,

an individual,

as Trustee,

 

and

 

Behringer Harvard PAL I, LLC,

a Delaware limited liability company,

as Lender

 

This document serves as a Fixture Filing under the Texas Uniform
Commercial Code.

 

Grantor’s Organizational Identification Number is 26-3013107.

 

 

Construction
Leasehold Deed of Trust, Assignment,

Security Agreement and Fixture Filing

 

This Construction Leasehold Deed of Trust,
Assignment, Security Agreement and Fixture Filing (“Deed of
Trust”) is made as of the 14th day of August, 2009, by Rest Easy
LLC, a Delaware limited liability company, d/b/a PAL Rest Easy LLC (herein
referred to as “Grantor”), whose
address is c/o Actus Lend Lease LLC, 1801 West End Avenue, Suite 1700,
Nashville, TN 37203, to Stephen J.
Hughes, an individual (“Trustee”),
whose address is Lincoln Centre, Suite 260, 5430 LBJ Freeway, Dallas,
Texas 75240, and Behringer Harvard PAL I, LLC,
a Delaware limited liability company (together with its successors and assigns,
“Lender”), whose address is 15601
Dallas Parkway, Suite 600, Addison, Texas 75001.

 

Recitals

 

Grantor is the lessee under (i) that certain
Department of the Army Lease and Conveyance of Improvements DACA65-01-09-47,
dated as of August 14, 2009 (as it may be amended from time to time, the “Ground  Lease”) with
the United States of America, acting by and through the Secretary of the Army
(together with its successors and assigns, the “Landlord”)
with respect to the real property legally described on Exhibit A
attached hereto, a Memorandum of which is intended to be recorded immediately
prior hereto, and (ii) certain Ancillary Leases (as defined in the Junior
Loan Agreement) (collectively, the Ground Lease and the Ancillary Leases are
referred to herein as the “Lease”) with
respect to the property described on Exhibit B attached hereto and
Grantor is justly indebted to Lender in the maximum principal sum of up to
$25,000,000 (the “Junior Loan”),
as evidenced by that certain Junior Loan Note, dated as of the date hereof (as
it may be amended from time to time, the “Junior Note”)
payable by the Grantor to the Lender in said principal amount, and that certain
Junior Loan Agreement, dated as of the date hereof, by and between Grantor and
Lender (as it may be amended from time to time, the “Junior Loan
Agreement”).  As a condition
precedent to making the Junior Loan, Lender has required that Grantor execute
and deliver this Deed of Trust to Trustee and Lender.  The Junior Note, the Junior Loan Agreement,
this Deed of Trust and all other instruments and documents executed by Grantor
that evidence, secure or set forth any of the Grantor’s obligations relating to
the Junior Loan, as the same may from time to time be extended, amended,
restated, supplemented or otherwise modified, and whether now in existence or
hereafter made and entered into, are collectively referred to as the “Junior Loan Documents.” 
Capitalized terms used herein but not otherwise defined shall have the
meanings ascribed to such terms in the Junior Loan Agreement.

 

Now, therefore, in order to induce Lender to make
the Junior Loan to Grantor, Grantor agrees as follows:

 

Article I

Granting Clauses; Condition
of Grant.

 

Section 1.1             Conveyances
and Security Interests.

 

In order to secure the prompt payment and
performance of the Obligations, Grantor:

 

(a)          hereby irrevocably and unconditionally grants,
conveys, transfers and assigns to Trustee, in trust under and subject to the
terms and conditions set forth herein, for the benefit of Lender, with

 

 

power of sale and right of entry and
possession, the
leasehold estate created by the Lease and all other tenancy, term, right, title
and interest of Grantor, of whatever character (whether vested or contingent),
in and to (1) the real property described on Exhibit A and Exhibit B
attached hereto together with any and all rights, privileges and benefits,
of whatever character derived by Grantor, or to which Grantor may be entitled,
under or by virtue of the Lease, including, without limitation: (i) any
and all rights to exercise options (including, without limitation, options to
purchase, renew, extend, terminate, reject or assume), give consents and
receive payments, reimbursements and refunds; (ii) any and all rights to
modify, change, supplement, alter, amend, terminate, cancel, sever or surrender
the Lease and any and all rights to release or discharge the Landlord of or
from the obligations, covenants, conditions and agreements by the Landlord to
be kept, observed or performed thereunder; (iii) any and all claims and
rights to the payment of damages that may presently exist or hereafter arise
under or in connection with the Lease or the rights of Grantor thereunder,
including, without limitation, any such claim or right that may arise as a
result of the rejection or disaffirmance of the Lease by the Landlord, or by
any trustee of the Landlord, pursuant to the United States Bankruptcy Code,
11 U.S.C. §§ 101 et seq.,
as amended (the “Code”); (iv) any and all
rights, privileges and benefits, of whatever character, to which Grantor may
hereafter be entitled pursuant to Section 365 of the Code, including,
without limitation, all of Grantor’s rights to remain in possession after
rejection or disaffirmance of the Lease by the Landlord or by any trustee of
the Landlord (collectively, the “Land”) and (2) all
buildings, structures and other improvements now or hereafter existing, erected
or placed on the Land, together with any on-site improvements and off-site
improvements in any way used or to be used in connection with the use,
enjoyment, occupancy or operation of the Land (collectively, excluding the
Excluded Improvements (as defined in the Lease), the “Improvements”),
together with (i) all estates, title interests, title reversion rights,
remainders, increases, issues, profits, rights of way or uses, additions,
accretions, servitudes, strips, gaps, gores, liberties, privileges, water
rights, water courses, alleys,  passages,
ways, vaults, licenses, tenements, franchises, hereditaments, appurtenances,
easements, rights-of-way, rights of ingress or egress, parking rights, timber,
crops, mineral interests and other rights, now or hereafter owned by Grantor
and belonging or appertaining to the Land or Improvements; (ii) all Claims
whatsoever of Grantor with respect to the Land or Improvements, either in law
or in equity, in possession or in expectancy; (iii) all estate, right,
title and interest of Grantor in and to all streets, roads and public places,
opened or proposed, now or hereafter adjoining or appertaining to the Land or
Improvements; and (iv) all options to purchase the Land or Improvements,
or any portion thereof or interest therein, and any greater estate in the Land
or Improvements, and all additions to and Proceeds of the foregoing, including
all rents, revenues, bonus money, royalties, rights, and benefits accruing to
Grantor under all present and future oil, gas and mineral leases on any parts
of the Property (collectively, the “Real Property”);

 

(b)           grants to Lender a security interest in all personal property of any kind or
nature whatsoever, whether tangible or intangible and whether now owned or
hereafter acquired, in which Grantor now has or hereafter acquires an interest
and which is used in the construction of, or is placed upon, or is derived from
or used in connection with the maintenance, use, occupancy or enjoyment of, the
Property (as hereinafter defined), including (i) all fixtures, equipment,
systems, machinery, furniture, furnishings, appliances, inventory, goods,
building and construction materials, supplies and other articles of personal
property, of every kind and character, tangible and intangible (including
software which is owned by Grantor embedded therein), now owned or hereafter
acquired by Grantor, which are now or hereafter attached to or situated in, on
or about the Land or Improvements, or used in or necessary to the complete and
proper planning, development, use, occupancy or operation thereof, or acquired
(whether delivered to the Land or stored elsewhere) for use or installation in
or on the Land or Improvements, and all additions to the foregoing, all of
which are hereby declared to be permanent accessions to the Land (collectively,
the “Accessories”); (ii) subject to the
terms of the Lock Box Agreement, all accounts of Grantor within the meaning of
the Uniform Commercial Code of the State (as defined herein), derived 

 

 

from or arising out of the use, occupancy or enjoyment of the Property
or for services rendered therein or thereon (collectively, the “Accounts”); (iii) all franchise, license, management or
other agreements with respect to the operation of the Real Property or the
business conducted therein (provided all of such agreements shall be
subordinate to this Deed of Trust, and Lender shall have no responsibility for
the performance of Grantor’s obligations thereunder) and all general
intangibles (including payment intangibles, trademarks, trade names, goodwill,
software and symbols) related to the Real Property or the operation thereof
which are owned by Grantor; (iv) all sewer and water taps, appurtenant
water stock or water rights, any Type 2 nonirregation grandfathered water
rights, contractual rights to water, allocations and agreements for utilities,
bonds, letters of credit, permits, certificates, licenses, guaranties,
warranties, causes of action, judgments, Claims, profits, security deposits,
utility deposits, and all rebates or refunds of fees, Taxes, assessments, charges
or deposits paid to any Governmental Authority related to the Real Property or
the operation thereof; (v) all of Grantor’s rights and interests under all
Swap Contracts, including all rights to the payment of money from Lender under
any Swap Contract and all accounts, deposit accounts and general intangibles,
including payment intangibles, described in any Swap Contract; (vi) all
insurance policies held by Grantor with respect to the Property or Grantor’s
operation thereof; and (vii) subject to the terms and conditions of the
Lock Box Agreement, all money, instruments and documents (whether tangible
or electronic) arising from or by virtue of any transactions related to the
Property, and all deposits and deposit accounts of Grantor with Lender related to
the Property, including any such deposit account from which Grantor may from
time to time authorize Lender to debit and/or credit payments due with respect
to the Junior Loan; together with all additions to and proceeds of all of the
foregoing (collectively, the “Personalty”)
(the Real Property and the Personalty shall be collectively referred to herein
as the “Property”);

 

(c)           assigns to Lender, and grants to Lender a security
interest in, Grantor’s right, title and interest in any and all judgments, awards of damages (including
severance and consequential damages), payments, proceeds, settlements, amounts
paid for a taking in lieu of Condemnation, or other compensation heretofore or
hereafter made, including interest thereon, and the right to receive the same,
as a result of, or in connection with, any Condemnation or threatened
Condemnation (the “Condemnation Awards”) and all
Insurance Proceeds; and

 

(d)           assigns to Lender, and grants to Lender a security
interest in, all of Grantor’s right, title and interest in, but not any of
Grantor’s obligations or liabilities under, all (i) contracts for services
to be rendered, work to be performed or materials to be supplied in the
development of the Land or the construction or repair of Improvements,
including all agreements with architects, engineers or contractors for such
services, work or materials; (ii) all plans, drawings and specifications
for the development of the Land or the construction or repair of Improvements; (iii) all
permits, licenses, variances and other rights or approvals issued by or
obtained from any Governmental Authority or other Person in connection with the
development of the Land or the construction or repair of Improvements; and (iv) all
amendments of or supplements to any of the foregoing (collectively, the “Design and Construction Documents”).

 

All Persons who may have or acquire an interest in
all or any part of the Property will be deemed to have notice of, and will be
bound by, the terms of the Obligations and each other agreement or instrument
made or entered into in connection with each of the Obligations.  Such terms include any provisions in the
Junior Note, the Junior Loan Agreement and/or any Swap Contract which provide
that the interest rate on one or more of the Obligations may vary from time to
time.  The definition of “Obligations”
includes future advances.

 

 

Section 1.2             Absolute
Assignment of Rents.

 

In consideration of the making of the Junior Loan by
Lender to Grantor and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor absolutely and
unconditionally assigns any and all Rents received in connection with the
Project to Lender, subject to the terms and conditions of the Lock Box
Agreement.  This assignment is, and is
intended to be, an unconditional, absolute and present assignment from Grantor
to Lender of all of Grantor’s right, title and interest in and to the Rents and
not an assignment in the nature of a pledge of the Rents or the mere grant of a
security interest therein.  For so long
as this Deed of Trust shall be in effect or until Lender shall otherwise
consent in writing, all such Rents shall be paid to the Cash Management Agent
as set forth in the Lock Box Agreement. 
All such sums received by Grantor from and after the date hereof shall
be deemed received in trust and shall be turned over immediately to Cash
Management Agent.

 

Section 1.3             Security
Agreement, Fixture Filing and Financing Statement.

 

This Deed of Trust creates a security interest in
the Personalty, and, to the extent the Personalty is not real property, this
Deed of Trust constitutes a security agreement from Grantor to Lender under the
Uniform Commercial Code of the State.  In
addition to all of its other rights under this Deed of Trust and otherwise,
Lender shall have all of the rights of a secured party under the Uniform
Commercial Code of the State, as in effect from time to time, or under the
Uniform Commercial Code in force from time to time in any other state to the
extent the same is applicable Law.  This
Deed of Trust shall be effective as a financing statement filed as a fixture
filing with respect to all fixtures included within the Property and is to be
filed for record in the real estate records of each county where any part of
the Property (including such fixtures) is situated.  This Deed of Trust shall also be effective as
a financing statement with respect to any other Property as to which a security
interest may be perfected by the filing of a financing statement and may be
filed as such in any appropriate filing or recording office.  The respective mailing addresses of Grantor
and Lender are set forth in the opening paragraph of this Deed of Trust.  A carbon, photographic or other reproduction
of this Deed of Trust or any other financing statement relating to this Deed of
Trust shall be sufficient as a financing statement for any of the purposes
referred to in this Section.  Grantor
hereby irrevocably authorizes Lender at any time and from time to time to file
any initial financing statements, amendments thereto and continuation
statements as authorized by applicable Law, reasonably required by Lender to
establish or maintain the validity, perfection and priority of the security
interests granted in this Deed of Trust. 
The foregoing authorization includes Grantor’s irrevocable authorization
for Lender at any time and from time to time to file any initial financing
statements and amendments thereto and continuation statements that indicate the
Personalty (a) as “all assets of Grantor, wherever located” or words of
similar effect, regardless of whether any particular asset comprised in the
Personalty falls within the scope of the Uniform Commercial Code of the State
or the jurisdiction where the initial financing statement or amendment is
filed, or (b) as being of an equal or lesser scope or with greater
detail.  This Deed of Trust shall be
effective as a financing statement filed as a fixture filing with respect to
all fixtures included within the Property and is to be filed for record in the
real estate records in the Office of the County Clerk where the Property
(including said fixtures) is situated, in accordance with Section 9.502
and other applicable provisions of the Uniform Commercial Code, as amended from
time to time.  This Deed of Trust shall
also be effective as a financing statement covering as-extracted collateral (as
such term is defined in Section 9.102(a)(6) of the Uniform Commercial
Code), and is to be filed for record in the real estate records of the county
where the Property is situated.  The
mailing address of Grantor and the address of Lender from which information
concerning the security interest may be obtained are set forth above.

 

 

Section 1.4             Reconveyance
of Deed of Trust and Termination of Assignments and Financing Statements.

 

If and when Grantor has paid and performed all of
the Obligations, and no further advances are to be made under the Junior Loan
Agreement, Lender or Trustee, upon request by Lender, will provide a
reconveyance of the Property from the lien of this Deed of Trust and
termination statements for filed financing statements, if any, to Grantor.  Grantor shall be responsible for the
recordation of such reconveyance  and
the payment of any recording and filing costs. 
Upon the recording of such reconveyance and the filing of such
termination statements, the absolute assignment set forth in Section 1.2
shall automatically terminate and become null and void.

 

Article II

Representations and
Warranties.

 

Grantor makes the following representations and
warranties to Lender:

 

Section 2.1             Title
to Real Property.

 

Grantor
has a valid interest in the Real Property, free and clear of all liens,
encumbrances and charges (the “Encumbrances”) other than (a) any matters set forth in any policy of
title insurance issued to Lender and insuring Lender’s interest in the Property
which are acceptable to Lender as of the date hereof, (b) the liens and
interests of this Deed of Trust, the Senior Loan and the Subordinate Loan, and (c) any
other Encumbrance that Lender shall expressly approve in its sole and absolute
discretion, as  evidenced
by a “marked-up” commitment (or pro-forma policy) for title insurance initialed
on behalf of Lender (the “Permitted Encumbrances”).  Grantor has full power and lawful authority
to grant the Real Property to Lender in the manner and form herein done or
intended and forever warrant and defend Grantor’s title in the Real Property
against the claims of all persons, subject to the Permitted Encumbrances.  This Deed of Trust constitutes a valid second
lien upon and security interest in Grantor’s right, title and interest in and
to the Real Property.

 

Section 2.2             Title
to Other Property.

 

Grantor
has good title to the Personalty, and the Personalty is not subject to any
Encumbrance other than the Permitted Encumbrances.

 

Article III

Affirmative Covenants.

 

Section 3.1             Obligations.

 

Grantor agrees to promptly pay and perform all of
the Obligations, time being of the essence in each case.

 

Section 3.2             Property
Assessments; Documentary Taxes.

 

Grantor will
promptly pay in full and discharge on or before the due date thereof all Taxes
and assessments of every nature which may be levied or assessed against the
Property.

 

 

Section 3.3             Compliance
with Laws.

 

Except as expressly permitted in the Lease with
respect to pre-existing conditions, Grantor will comply with and not violate,
and cause to be complied with and not violated, all present and future Laws
applicable to the Property and its use and operation.

 

Section 3.4             Maintenance
and Repair of the Property.

 

Grantor, at Grantor’s sole expense, will (a) keep
and maintain (or cause to be kept and maintained) the Property in good
condition, working order and repair, and (b) make (or cause to be made)
all necessary or appropriate repairs to the Property, so that each part of the
Property shall at all times be in a good condition and fit and proper for the
respective purposes for which they were originally intended, erected, or
installed.

 

Section 3.5             Additions
to Security.

 

All right, title and interest of Grantor in and to
all Improvements hereafter constructed or placed on the Property shall, without
any further deed of trust, conveyance, assignment or other act by Grantor,
become subject to the lien of this Deed of Trust as fully and completely, and with
the same effect, as though now owned by Grantor and specifically described in
the granting clauses hereof.  Grantor
agrees, however, to execute and deliver to Trustee and/or Lender such further
documents as may be reasonably required by the terms of the Junior Loan
Agreement and the other Junior Loan Documents to confirm and evidence such
lien.

 

Section 3.6             Performance of Lease.

 

Grantor
shall (i) fulfill, perform and observe in all respects each and every
material condition and material covenant of Grantor contained in the Lease; (ii) give
prompt notice to Lender of any claim or event of default or noncompliance under
the Lease given to Grantor by Landlord or given by Grantor to Landlord,
together with a complete copy or statement of any information submitted or
referenced in support of such claim or event of default; (iii) at the sole
cost and expense of Grantor, enforce the performance and observance of each and
every material covenant and material condition of the Lease to be performed or
observed by any other party to the Lease unless such enforcement is waived in
writing by Lender; (iv) appear in and defend any action challenging the
validity, enforceability or priority of the lien created hereby or the validity
or enforceability of the Lease; and (v) timely exercise all renewal
options under the Lease while any Obligation under the Junior Loan remains
outstanding.  The Lease shall not be
modified, amended, terminated, cancelled or surrendered by Grantor without Lender’s
prior written consent.  Without limiting
the generality of the foregoing, Grantor shall not, without Lender’s prior
written consent, elect to treat the Lease or the leasehold estate created
thereunder as terminated under Section 365 of the Code, after rejection or
disaffirmance of the Lease by the Landlord (whether as debtor in possession or
otherwise) or by any trustee of the Landlord, and any such election made
without such consent shall be void and ineffective.  Grantor shall not assign, transfer, mortgage,
pledge or hypothecate the Lease or any interest therein to any party other than
Lender, Senior Lender or Subordinate Lender without first obtaining Lender’s
prior written consent.  Grantor shall not
waive or release any person from the observance or performance of any material
obligation to be performed under the terms of the Lease or liability on account
of any material warranty given thereunder. 
Any modification, amendment, termination, cancellation, surrender,
assignment, transfer, mortgage, pledge, hypothecation, waiver or release in
violation of the foregoing shall be null and void and of no force and
effect.  Grantor agrees that if Grantor,
at any time while the Obligations are outstanding, acquires fee title or any
greater estate than it holds as of the date of this Deed of Trust in and to the
Land or the Real Property, the lien of this Deed of 

 

 

Trust shall automatically attach, extend to, cover and encumber such
fee title or other greater estate, and that Grantor shall execute such further
documents and take such further actions as Lender may reasonably request to
confirm such lien.  Without limiting the
foregoing sentence, unless Lender otherwise consents or elects, fee title to
the Real Property and the leasehold interest in the Land created by the Lease
shall not merge, but shall always be kept separate and distinct,
notwithstanding the union of such estates in Grantor, Lender or any other
person by purchase, operation of law, foreclosure of this Deed of Trust, sale
of the Real Property pursuant to this Deed of Trust or otherwise.

 

Article IV

Negative Covenants.

 

Section 4.1             Encumbrances.

 

Grantor will not permit any of the Property to
become subject to any Encumbrance other than the Permitted Encumbrances.  Within sixty (60) days after the filing of
any mechanic’s lien or other lien or Encumbrance against the Property, Grantor
will promptly discharge the same by payment or recording a bond or otherwise as
permitted by Law.  So long as Lender’s
security has been protected by the recording of a bond or otherwise in a manner
satisfactory to Lender in its sole and absolute discretion, Grantor shall have
the right to contest in good faith any Claim or Encumbrance, provided that
Grantor does so diligently and without prejudice to Lender or delay in
completing construction of the Improvements. 
Grantor shall give Lender Notice of any default under any lien and
Notice of any foreclosure or threat of foreclosure with respect to any of the
Property.

 

Section 4.2             Transfer
of the Property.

 

Grantor will not, without the prior written consent
of Lender, transfer pursuant to a direct or indirect sale, assignment or
conveyance, whether made voluntarily or by operation of Law or otherwise, and
whether made with or without consideration, or contract to do so, all or any
part of the Property or any legal or beneficial interest therein (except as may
be permitted in this Deed of Trust). 
Except as set forth in the Junior Loan Agreement, the transfer of any
membership interest in Grantor (whether in one or more transactions during the
term of the Obligations) shall be deemed to be a prohibited transfer of the
Property.

 

Section 4.3             Removal,
Demolition or Alteration of Improvements.

 

Except to the extent permitted by the following
section, no Improvements shall be removed, demolished or materially altered
without the prior written consent of Lender.

 

Section 4.4             Additional
Improvements.

 

Grantor will not construct, demolish or materially
alter any Improvements other than those presently on the Land, those described
in the Junior Loan Agreement and those described in the Design/Build Agreement
for the LSCR Phase of the IDP, without the prior written consent of
Lender.  Subject to, and in accordance
with, the terms and conditions of the Design/Build Agreement, Grantor will
complete and pay for, within a reasonable time, any Improvements which Grantor
is permitted to construct on the Land. 
Grantor will construct and erect any permitted Improvements (a) strictly
in accordance with the Lease, any other contracts with Landlord, all applicable
Laws (as set forth in the Lease) and any private restrictive covenants, (b) entirely
on lots or parcels of the Land, (c) so as not to 

 

 

encroach upon any easement or right of way or
upon the land of others, and (d) wholly within any building restriction
and setback lines applicable to the Land.

 

Section 4.5             Restrictive
Covenants, Zoning, etc.

 

Without the prior written consent of Lender, Grantor
will not initiate, join in, or consent to any change in, any restrictive
covenant, easement, zoning ordinance, or other public or private restrictions
limiting or defining the uses which may be made of the Property, or consent to
or vote in favor of the inclusion of the Property in any community facilities
or limited improvement district or any other improvement, assessment or similar
district.  Grantor (a) will promptly
perform and observe, and cause to be performed and observed, all of the
material terms and conditions of all agreements affecting the Property, and (b) will
do or cause to be done all things reasonably necessary to preserve intact and
unimpaired any and all easements, appurtenances and other interests and rights
in favor of, or constituting any portion of, the Property.

 

Article V

Events of Default.

 

The occurrence or happening, from time to time, of
any one or more of the following shall constitute an Event of Default under
this Deed of Trust:

 

Section 5.1             Junior
Loan Agreement.

 

The occurrence of an Event of Default under the
Junior Loan Agreement.

 

Section 5.2             Transfers.

 

Grantor, without the prior written consent of
Lender, transfers pursuant to a direct or indirect sale, assignment or
conveyance, whether made voluntarily or by operation of Law or otherwise, and
whether made with or without consideration, or contract to do so, all or any
part of the Property or any legal or beneficial interest therein.

 

Section 5.3             Other
Obligations.

 

Grantor fails to promptly perform or comply with any
of the Obligations set forth in this Deed of Trust (other than those expressly
described in other Sections of this Article V), and such failure
continues uncured for a period of ninety (90) days after Notice from Lender to
Grantor, unless (a) such failure, by its nature, is not capable of being
cured within such period and (b) within such period, Grantor commences to
cure such failure and thereafter diligently prosecutes the cure thereof and
provides evidence of such efforts upon request to Lender.

 

Article VI

Rights and Remedies.

 

Upon the happening and during the continuance of any
Event of Default, Lender, or Trustee at the direction of Lender, shall have the
right, in addition to any other rights or remedies available to Lender under
any of the Junior Loan Documents or applicable Law, to exercise any one or more
of the following rights, powers or remedies:

 

 

Section 6.1             Acceleration.

 

Lender
may accelerate all Obligations under the Junior Loan Documents whereupon such
Obligations shall become immediately due and payable, without notice of
default, notice of acceleration or intention to accelerate, presentment or
demand for payment, protest, notice of protest, notice of nonpayment or
dishonor, or notices or demands of any kind or character (all of which are
hereby waived by Grantor).

 

Section 6.2             Foreclosure; Power of Sale.

 

(a)           Upon the occurrence and
continuance of an Event of Default, it shall thereupon be the duty of the above
named Trustee, or his successor or substitute, as hereinafter provided, to
enforce this Deed of Trust at the request of Lender (which request shall be
presumed) and to sell the Property with or without first having taken
possession of the same and in whole or in part, as the acting Trustee may elect
(all rights to a marshalling of assets of Grantor being expressly waived
hereby), in compliance with the applicable requirements, at the time of the
sale, of Section 51.002 of the Texas Property Code as amended from time to
time, to the highest bidder for cash at public auction at the county courthouse
(or duly designated nearby area) of any county in which any of the Property is
situated, in the area of such courthouse or nearby which has been duly
designated for real property foreclosure sales in accordance with applicable
law (or in the absence of any such designation, in the area of such courthouse
set forth in the notice of sale hereinafter described) on the first Tuesday of
any month between the hours of 10:00 A.M. and 4:00 P.M. (commencing
no earlier than such time as may be designated in the hereinafter described
notice of sale), after giving notice of the time, place and terms of sale and
the Property to be sold by the acting Trustee or any person chosen by him
filing a copy of the notice thereof in the office of the County Clerk of each
county where the Property is situated, by posting or causing to be posted
written or printed notice thereof at least twenty-one (21) days preceding the
date of said sale at the county courthouse door of each county where the
Property is situated, and at least twenty-one (21) days preceding the date of
said sale, serving written notice of such proposed sale by certified mail on
each debtor obligated to pay the Obligations evidenced by the Junior Note
according to the records of Lender. Service of such notice to each debtor shall
be completed upon deposit of the notice enclosed in a postpaid wrapper,
properly addressed to each debtor at the most recent address as shown by the
records of Lender, in a post office or official depository under the care and
custody of the United States Postal Service. 
The sale must begin at the time stated in the notice of sale or not
later than three hours after that time. 
Any sale made by Trustee hereunder may be as an entirety or in such
parcels as Lender may request, and any sale may be adjourned by announcement at
the time and place appointed for such sale without further notice except as may
be required by Law.  After such sale, the
acting Trustee shall make due conveyance with special warranty to the purchaser
or purchasers and the Grantor binds itself, its heirs, assigns, executors,
administrators, successors and legal representatives to warrant and forever
defend the title of such purchaser or purchasers by, through and under Grantor
but not otherwise.  Any abstract of title
to the Property furnished in connection with the loan secured by this Deed of
Trust shall be delivered and become the property of the purchaser at said sale.

 

(b)           Upon the occurrence and
continuance of an Event of Default, Lender shall have the right and option to
proceed with foreclosure in satisfaction of such item or items by directing the
Trustee, or his successor or substitute as hereinafter provided, to proceed as
if under a full foreclosure, conducting the sale as herein provided, and
without declaring the whole Obligations due, and provided that if sale is made
because of default as hereinabove mentioned, such sale may be made subject to
the unmatured part of the Junior Note and the Obligations secured hereby, and
it is agreed that such sale, if so made, shall not in any manner affect any
other Obligation or Obligations secured hereby, but as to such other obligations
this Deed of Trust and the liens created hereby shall remain in full force and
effect just 

 

 

as though no sale had been made under the
provisions of this Section.  It is
further agreed that several sales may be made hereunder without exhausting the
right of sale for any other breach of any of the obligations secured hereby, it
being the purpose to provide for a foreclosure and sale of the Property for any
matured portion of any of the Obligations secured hereby or other items
provided for herein without exhausting the power to foreclose and to sell the
Property for any other part of the Obligations secured hereby whether matured
at the time or subsequently maturing.

 

(c)           The proceeds from any such
sale shall be applied by the acting Trustee as follows:

 

FIRST:                                                         To the payment
of all expenses of advertising, selling and conveying the Property, including a
reasonable fee to the acting Trustee.

 

SECOND:                                          To the payment
to the Lender of all unpaid Obligations, including accrued interest to the date
of sale, in such priority and proportions as Lender in its discretion shall
deem proper.

 

THIRD:                                                     The balance, if
any, shall be paid to Grantor or to any other person legally entitled to same
pursuant to applicable Law.

 

(d)           The acting Trustee hereunder
shall have the right to sell the Property in whole or in part and in such
parcels and order as he may determine, and the right of sale hereunder shall
not be exhausted by one or more sales, but successive sales may be had until
all of the Property have been legally sold. 
In the event any sale hereunder is not completed or is defective in the
opinion of Lender or the holder of any part of the Obligations, such sale shall
not exhaust the power of sale hereunder, and Lender or such holder shall have
the right to cause a subsequent sale or sales to be made by the Trustee or any
successor or substitute Trustee. 
Likewise, Lender may become the purchaser at any such sale if it is the
highest bidder, and shall have the right, after paying or accounting for all
costs of said sale or sales, to credit the amount of the bid upon the amount of
the Obligations owing, in lieu of cash payment.

 

(e)           It shall not be necessary
for the acting Trustee to have constructively in his possession any part of the
real or personal property covered by this Deed of Trust, and the title and
right of possession of said property shall pass to the purchaser or purchasers
at any sale hereunder as fully as if the same had been actually present and
delivered.  Likewise, on foreclosure of
this Deed of Trust whether by power of sale herein contained or otherwise,
Grantor or any person claiming any part of the Property by, through or under
Grantor shall not be entitled to a marshalling of assets or a sale in inverse
order of alienation.

 

(f)            The recitals and statements
of fact contained in any notice or in any conveyance to the purchaser or
purchasers at any sale hereunder shall be prima facie evidence of the truth of
such facts, and all prerequisites and requirements necessary to the validity of
any such sale shall be presumed to have been performed.

 

(g)           Any sale under the powers
granted by this Deed of Trust shall be a perpetual bar against Grantor, its
successors, assigns and legal representatives.

 

(h)           In the event of a
foreclosure under the powers granted by this Deed of Trust, Grantor, and all
other persons in possession of any part of the Property (other than tenants
under leases that remain in place after foreclosure), shall be deemed tenants
at will of the purchaser at such foreclosure sale and shall be liable for a
reasonable rental for the use of the Property; and if any such tenants refuse
to surrender possession of the Property upon demand, the purchaser shall be
entitled to institute and 

 

 

maintain the statutory action of forcible
entry and detainer and procure a writ of possession thereunder, and Grantor
expressly waives all damages sustained by reason thereof.

 

(i)            In the event an interest in any of the
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 Lender 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 upon which Grantor is
personally liable under the Note and the amount for which the 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 (even absent the initiation of
deficiency proceedings against them) to present competent evidence of the fair
market value of the Property as of the date of the foreclosure sale and to
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 Property for purposes of calculating deficiencies
owed by Grantor and others against whom recovery of a deficiency is sought.

 

(j)            Alternatively, in the event the waiver provided for
in subsection (i) above is determined by a court of competent jurisdiction
to be unenforceable, the following shall be the basis for the finder of fact’s
determination of the fair market value of the Property as of the date of the
foreclosure sale in proceedings governed by Sections 51.003, 51.004 and 51.005
of the Texas Property Code (as amended from time to time): “fair market value”
of the Property shall be determined as of the foreclosure date in order to
enforce a deficiency against Grantor, Grantor or any other party liable for the
repayment of the Obligations, the term “fair market value” shall include those matters
required by law and shall also include the additional factors as follows:

 

(i)            The Property is to be valued “AS IS, WHERE IS” and “WITH ALL FAULTS” and
there shall be no assumption of restoration of or refurbishment of the Property
after the date of foreclosure;

 

(ii)           There shall be an assumption of a prompt resale of the Property for an
all cash sales price by the purchaser at the foreclosure so that no extensive
holding period should be factored into the determination of “fair market value”
of the Property;

 

(iii)          An offset to the fair market value of the Property, as determined
hereunder, shall be made by deducting from such value the reasonable estimated
closing costs relating to the sale of the Property including but not limited to
brokerage commissions, title policy expenses, tax prorations, escrow fees, and
other common charges which are incurred by a seller of real property similar to
the Property; and

 

(iv)          After consideration of the
factors required by Law and those required above (including the addition of any
income to be generated by the Property), an additional discount factor shall be
calculated based upon the estimated time it will take to effectuate a sale of
the Property so that the “fair market value” as so determined is discounted to
be as of the date of the foreclosure of the Property.

 

 

Section 6.3             Judicial Action.

 

Lender
shall have the right from time to time to sue Grantor for any sums (whether
interest, damages for failure to pay principal or any installments thereof,
taxes, or any other sums required to be paid under the terms of this Deed of
Trust, as the same become due), without regard to whether or not any of the
other Obligations shall be due, and without prejudice to the right of Lender
thereafter to enforce any appropriate remedy against Grantor, including an
action of foreclosure or an action for specific performance, for a Default (as
defined in the Junior Loan Agreement) or Event of Default existing at the time
such earlier action was commenced.

 

Section 6.4             Collection of
Rents.

 

Upon
the occurrence and during the continuance of an Event of Default, Lender shall
have the right to (i) take possession of any or all of the Property, with
the power to protect and preserve the Property, to operate the Property
preceding foreclosure or sale, (ii) subject to the terms of the Lock Box
Agreement, to collect all Rents from the Property and apply the proceeds
against the sums due under this Deed of Trust, and (iii) exercise all
other rights with respect to the Property described in this Deed of Trust.  Grantor hereby appoints Lender as Grantor’s
attorney-in-fact with full power of substitution, which appointment shall take
effect upon the occurrence and during the continuance of an Event of Default
and is coupled with an interest and, subject to a cure of such Event of Default
in accordance with the terms of the Junior Loan Documents, is irrevocable prior
to the full and final payment and performance of the Obligations, in Grantor’s
name or in Lender’s name: (a) subject to the terms and conditions of the
Lock Box Agreement, to endorse all checks and other instruments received in
payment of Rents and to deposit the same in any account selected by Lender; (b) to
give receipts and releases in relation thereto; (c) to institute,
prosecute and/or settle actions for the recovery of Rents; (d) to modify
the terms of any agreements relating to the Rents payable thereunder; and (e) to
do all other acts and things with respect to the Rents which Lender may deem
necessary or desirable to protect the security for the Obligations.

 

Section 6.5             Taking Possession
or Control of the Property.

 

As a
matter of right without regard to the adequacy of the security, and to the
extent permitted by Law without notice to Grantor, Lender shall be entitled,
upon application to a court of competent jurisdiction, to the immediate
appointment of a receiver for all or any part of the Property and the Rents,
whether such receivership may be incidental to a proposed sale of the Property
or otherwise, and Grantor hereby consents to the appointment of such a receiver
and agrees that such receiver shall have all of the rights and powers granted
to Lender pursuant to Section 6.4. 
In addition, to the extent permitted by Law, and with or without the
appointment of a receiver, or an application therefor, Lender may (a) enter
upon, and take possession of (and Grantor shall surrender actual possession
of), the Property or any part thereof, without notice to Grantor and without
bringing any legal action or proceeding, or, if necessary by force, legal
proceedings, ejectment or otherwise, and (b) remove and exclude Grantor
and its agents and employees therefrom.

 

Section 6.6             Management of the
Property.

 

Upon
obtaining possession of the Property or upon the appointment of a receiver as
described in Section 6.5, Lender, Trustee or the receiver, as the
case may be, may, at its sole option, (a) make all necessary or proper
repairs to or upon the Property, (b) operate, maintain, control, make
secure and preserve the Property, and (c) complete the construction of any
unfinished Improvements on the Property 

 

 

and, in connection therewith, continue any and all outstanding
contracts for the erection and completion of such Improvements and make and
enter into any further contracts which may be necessary, either in their or its
own name or in the name of Grantor (the costs of completing such Improvements
shall be Expenses secured by this Deed of Trust and shall accrue interest as
provided in the Junior Loan Agreement and the other Junior Loan
Documents).  Lender, Trustee or such
receiver shall be under no liability for, or by reason of, any such taking of
possession, entry, holding, removal, maintaining, operation or management,
except for gross negligence or willful misconduct.  The exercise of the remedies provided in this
Section shall not cure or waive any Event of Default, and the enforcement
of such remedies, once commenced, shall continue for so long as Lender shall
elect, notwithstanding the fact that the exercise of such remedies may have,
for a time, cured the original Event of Default.

 

Section 6.7             Uniform Commercial
Code.

 

Lender
may proceed under the Uniform Commercial Code as to all or any part of the
Personalty, and in conjunction therewith may exercise all of the rights,
remedies and powers of a secured creditor under the Uniform Commercial
Code.  Upon the occurrence and during the
continuation of any Event of Default, Grantor shall assemble all of the
Accessories and make the same available within the Improvements.  Any notification required by the Uniform
Commercial Code shall be deemed reasonably and properly given if sent in
accordance with the Notice provisions of this Deed of Trust at least ten (10) days
before any sale or other disposition of the Personalty.  Disposition of the Personalty shall be deemed
commercially reasonable if made pursuant to a public sale advertised at least
twice in a newspaper of general circulation in the community where the Property
is located.  It shall be deemed
commercially reasonable for the Trustee to dispose of the Personalty without
giving any warranties as to the Personalty and specifically disclaiming all
disposition warranties.  Alternatively,
Lender may choose to dispose of some or all of the Property, in any combination
consisting of both Personalty and Real Property, in one sale to be held in accordance
with the Law and procedures applicable to real property, as permitted by Article 9
of the Uniform Commercial Code.  Grantor
agrees that such a sale of Personalty together with Real Property constitutes a
commercially reasonable sale of the Personalty.

 

Section 6.8             Application of
Proceeds.

 

Unless otherwise provided by applicable Law, all
proceeds from the sale of the Property or any part thereof pursuant to the
rights and remedies set forth in this Article VI and any other
proceeds received by Lender from the exercise of any of its other rights and
remedies hereunder or under the other Junior Loan Documents shall, subject to
the terms and conditions of the Lock Box Agreement, be applied first to pay all
Expenses and next in reduction of the other Obligations, in such manner and
order as Lender may elect.

 

Section 6.9             Other Remedies.

 

Lender shall have the right from time to time to
protect, exercise and enforce any legal or equitable remedy against Grantor
provided under the Junior Loan Documents or by applicable Laws.

 

 

Article VII

Trustee.

 

Section 7.1             Liability of Trustee.

 

Trustee shall have no liability or responsibility
for, and make no warranties in connection with, the validity or enforceability
of any of the Junior Loan Documents or the description, value or status of
title to the Property.  Trustee shall be
protected in acting upon any notice, request, consent, demand, statement, note
or other paper or document believed by Trustee to be genuine and to have been
signed by the party or parties purporting to sign the same.  Trustee shall not be liable for any error of
judgment, nor for any act done or step taken or omitted, nor for any mistakes
of law or fact, nor for anything which Trustee may do or refrain from doing in
good faith, nor generally shall Trustee have any accountability hereunder
except for its willful misconduct or gross negligence.  The powers and duties of Trustee hereunder
may be exercised through such attorneys, agents or servants as Trustee may
appoint, and Trustee shall have no liability or responsibility for any act,
failure to act, negligence or willful misconduct of such attorney, agent or
servant, so long as the selection was made with reasonable care.  In addition, Trustee may consult with legal
counsel selected by Trustee, and Trustee shall have no liability or
responsibility by reason of any act or failure to act in accordance with the
opinions of such counsel.  Trustee may
act hereunder and may sell or otherwise dispose of the Property or any part
thereof as herein provided, although Trustee has been, may now be or may
hereafter be, an attorney or agent of Lender, in respect of any matter or
business whatsoever.  Trustee, however,
shall have no obligation to sell all or any part of the Property following an
Event of Default or to take any other action authorized to be taken by Trustee
hereunder except upon the demand of Lender.

 

Section 7.2             Indemnification of Trustee.

 

Grantor agrees to indemnify Trustee and to hold
Trustee harmless for, from and against any and all Claims and Expenses directly
or indirectly arising out of or resulting from any transaction, act, omission,
event or circumstance in any way connected with the Property or the Junior
Loan, including but not limited to any Claim arising out of or resulting from
any assertion or allegation that Trustee is liable for any act or omission of
Grantor or any other Person in connection with the ownership, development,
financing, operation or sale of the Property; provided,  however,
that Grantor shall not be obligated to indemnify Trustee with respect to any
Claim arising solely from the gross negligence or willful misconduct of
Trustee.  The agreements and
indemnifications contained in this Section shall apply to Claims arising
both before and after the repayment of the Junior Loan and shall survive the
repayment of the Junior Loan, any foreclosure or deed in lieu thereof and any
other action by Trustee to enforce the rights and remedies of Lender or Trustee
hereunder or under the other Junior Loan Documents.

 

Section 7.3             Substitution of Trustee; Multiple
Trustees.

 

Lender shall have, and is hereby granted with
warranty of further assurances, the irrevocable power to appoint a new or
replacement or substitute Trustee.  Such
power may be exercised at any time without notice, without cause and without
specifying any reason therefor, by filing for record in the office where this
Deed of Trust is recorded a substitution of Trustee.  The power of appointment of a successor
Trustee may be exercised as often as and whenever Lender may choose, and the
exercise of the power of appointment, no matter how often, shall not be an
exhaustion thereof.  Upon the recordation
of such substitution of Trustee, the Trustee so appointed shall thereupon, without
any further act or deed of conveyance, become fully vested with identically the
same title and estate in and to the Property and with all the rights, powers,
trusts and duties of its predecessor in the trust hereunder with like effect as
if originally named as Trustee hereunder. 
Whenever in this Deed of Trust reference is made to Trustee, it shall be
construed to mean each Person appointed as Trustee for the time being, whether
original or 

 

 

successor in trust.  All title, estate, rights, powers, trusts and
duties granted to Trustee shall be in each Person appointed as Trustee so that
any action hereunder by any Person appointed as Trustee shall for all purposes
be deemed to be, and as effective as, the action of all Trustees.

 

Article VIII

Miscellaneous.

 

Section 8.1             Rights, Powers and Remedies Cumulative.

 

Each right, power and remedy of Lender or Trustee as
provided for in this Deed of Trust, or in any of the other Junior Loan
Documents or now or hereafter existing by Law, shall be cumulative and
concurrent and shall be in addition to every other right, power or remedy
provided for in this Deed of Trust, or in any of the other Junior Loan
Documents or now or hereafter existing by Law, and the exercise or beginning of
the exercise by Lender or Trustee of any one or more of such rights, powers or
remedies shall not preclude the simultaneous or later exercise by Lender or
Trustee of any or all such other rights, powers or remedies.

 

Section 8.2             No Waiver by Lender or Trustee.

 

No course of dealing or conduct by or among Lender,
Trustee and Grantor shall be effective to amend, modify or change any
provisions of this Deed of Trust or the other Junior Loan Documents.  No failure or delay by Lender or Trustee to
insist upon the strict performance of any term, covenant or agreement of this
Deed of Trust or of any of the other Junior Loan Documents, or to exercise any
right, power or remedy consequent upon a breach thereof, shall constitute a
waiver of any such term, covenant or agreement or of any such breach, or
preclude Lender or Trustee from exercising any such right, power or remedy at
any later time or times.  By accepting
payment after the due date of any of the Obligations, neither Lender nor
Trustee shall be deemed to waive the right either to require prompt payment
when due of all other Obligations, or to declare an Event of Default for
failure to make prompt payment of any such other Obligations.  Neither Grantor nor any other Person now or
hereafter obligated for the payment of the whole or any part of the Obligations
shall be relieved of such liability by reason of (a) the failure of Lender
to comply with any request of Grantor or of any other Person to take action to
foreclose this Deed of Trust or otherwise enforce any of the provisions of this
Deed of Trust, or (b) any agreement or stipulation between any subsequent
owner or owners of the Property and Lender, or (c) Lender’s extending the
time of payment or modifying the terms of this Deed of Trust or any of the
other Junior Loan Documents without first having obtained the consent of Grantor
or such other Person.  Regardless of
consideration, and without the necessity for any notice to or consent by the
holder of any subordinate lien on the Property, Lender may release any Person
at any time liable for any of the Obligations or any part of the security for
the Obligations and may extend the time of payment or otherwise modify the
terms of this Deed of Trust or any of the other Junior Loan Documents without
in any way impairing or affecting the lien of this Deed of Trust or the
priority of this Deed of Trust over any subordinate lien.  The holder of any subordinate lien shall have
no right to terminate any Lease regardless of whether or not such Lease is
subordinate to this Deed of Trust. 
Lender may resort to the security or collateral described in this Deed
of Trust or any of the other Junior Loan Documents in such order and manner as
Lender may elect in its sole discretion.

 

Section 8.3             Waivers and Agreements Regarding
Remedies.

 

To the full extent Grantor may do so, Grantor
hereby:

 

 

(a)           agrees that it will not
at any time plead, claim or take advantage of any Laws now or hereafter in
force providing for any appraisement, valuation, stay, extension or redemption,
and waives and releases all rights of redemption, valuation, appraisement, stay
of execution, extension and notice of election to accelerate the Obligations;

 

(b)           waives all rights to a
marshalling of the assets of Grantor, including the Property, or to a sale in
the inverse order of alienation in the event of a foreclosure of the Property,
and agrees not to assert any right under any Law pertaining to the marshalling
of assets, the sale in inverse order of alienation, the exemption of homestead,
the administration of estates of decedents, or other matters whatsoever to
defeat, reduce or affect the right of Lender under the terms of this Deed of
Trust to a sale of the Property without any prior or different resort for
collection, or the right of Lender to the payment of the Obligations out of the
proceeds of sale of the Property in preference to every other claimant
whatsoever;

 

(c)           waives any right to
bring or utilize any defense, counterclaim or setoff, other than one which
denies the existence or sufficiency of the facts upon which any foreclosure
action is grounded.  If any defense,
counterclaim or setoff, other than one permitted by the preceding clause, is
timely raised in a foreclosure action, such defense, counterclaim or setoff
shall be dismissed.  If such defense,
counterclaim or setoff is based on a Claim which could be tried in an action
for money damages, such Claim may be brought in a separate action which shall
not thereafter be consolidated with the foreclosure action.  The bringing of such separate action for
money damages shall not be deemed to afford any grounds for staying the
foreclosure action;

 

(d)           waives and relinquishes
any and all rights and remedies which Grantor may have or be able to assert by
reason of the provisions of any Laws pertaining to the rights and remedies of
sureties; and

 

(e)           to the maximum extent
permitted by Law, Grantor waives any right to assert that the Property was
created in violation of applicable subdivision ordinances and regulations and
agrees to take all actions and execute all documents requested by Lender in
connection with compliance with or exemption from all applicable subdivision
ordinances and regulations.

 

Section 8.4             Successors and Assigns.

 

All of the grants, covenants, terms, provisions and
conditions of this Deed of Trust shall run with the Land and shall apply to and
bind the successors and assigns of Grantor (including any permitted subsequent
owner of the Property), and inure to the benefit of Lender, its successors and
assigns and to the successors in trust of Trustee.

 

Section 8.5             No Warranty by Lender or Trustee.

 

By inspecting the Property or by accepting or
approving anything required to be observed, performed or fulfilled by Grantor
or to be given to Lender or Trustee pursuant to this Deed of Trust or any of
the other Junior Loan Documents, Lender and Trustee shall not be deemed to have
warranted or represented the condition, sufficiency, legality, effectiveness or
legal effect of the same, and such acceptance or approval shall not constitute
any warranty or representation with respect thereto by Lender or Trustee.

 

Section 8.6             Amendments.

 

This Deed of Trust may not be modified or amended
except by an agreement in writing, signed by the party against whom enforcement
of the change is sought.

 

 

Section 8.7             Severability.

 

In the event any one or more of the provisions of
this Deed of Trust shall for any reason be held to be invalid, illegal or
unenforceable, in whole or in part or in any other respect, or in the event any
one or more of the provisions of the Junior Loan Documents operates or would
prospectively operate to invalidate this Deed of Trust, then and in either of
those events, at the option of Lender, such provision or provisions only shall
be deemed null and void and shall not affect the validity of the remaining
Obligations, and the remaining provisions of the Junior Loan Documents shall
remain operative and in full force and effect and shall in no way be affected,
prejudiced or disturbed thereby.

 

Section 8.8             Notices.

 

All Notices, demands or documents to be delivered
under this Deed of Trust shall be given in writing in the manner provided for
the giving of notices under the Junior Loan Agreement.

 

Section 8.9             Rules of Construction.

 

The words “hereof,” “herein,” “hereunder,” “hereto,”
and other words of similar import refer to this Deed of Trust in its entirety.  The terms “agree” and “agreements” mean and
include “covenant” and “covenants.”  The
words “include” and “including” shall be interpreted as if followed by the
words “without limitation.”  The headings
of this Deed of Trust are for convenience of reference only and shall not be
considered a part hereof and are not in any way intended to define, limit or
enlarge the terms hereof.  All references
(a) made in the neuter, masculine or feminine gender shall be deemed to
have been made in all such genders, (b) made in the singular or plural
number shall be deemed to have been made, respectively, in the plural or
singular number as well, (c) to the Junior Loan Documents are to the same
as extended, amended, restated, supplemented or otherwise modified from time to
time unless expressly indicated otherwise, (d) to the Land, Improvements,
Personalty, Real Property or Property shall mean all or any portion of each of
the foregoing, respectively, and (e) to Articles or Sections are to the
respective Articles or Sections contained in this Deed of Trust unless
expressly indicated otherwise.  Any term
used or defined in the Uniform Commercial Code of the State, as in effect from
time to time, which is not defined in this Deed of Trust shall have the meaning
ascribed to that term in the Uniform Commercial Code of the State.  If a term is defined in Article 9 of the
Uniform Commercial Code of the State differently than in another Article of
the Uniform Commercial Code of the State, the term shall have the meaning specified
in Article 9.

 

Section 8.10           Governing Law.   This Deed of Trust shall be construed,
governed and enforced in accordance with the Laws in effect from time to time
in the State.

 

Section 8.11           Entire Agreement.  The Junior Loan Documents constitute the
entire understanding and agreement between Grantor and Lender with respect to
the transactions arising in connection with the Obligations, and supersede all
prior written or oral understandings and agreements between Grantor and Lender
with respect to the matters addressed in the Junior Loan Documents.  In particular, and without limitation, the
terms of any commitment by Lender to make the Junior Loan are merged into the
Junior Loan Documents.  Except as
incorporated in writing into the Junior Loan Documents, there are no
representations, understandings, stipulations, agreements or promises, oral or
written, with respect to the matters addressed in the Junior Loan Documents.

 

Section 8.12           Certain Provisions Incorporated by
Reference.

 

The provisions of the Junior Loan Agreement and the
Junior Note (and any other Junior Loan Document) that govern adjustments, if
any, to the interest rate and payment amount, the accrual of 

 

 

interest and increases, if any, in the principal balance, are
incorporated in this Deed of Trust by reference as though fully set forth
herein.

 

Section 8.13           Nature of Obligations.

 

Except as provided in that certain Guaranty and
Indemnity (as defined in the Junior Loan agreement) of even date herewith, the
obligations of Grantor hereunder to pay and perform the Obligations (including,
without limitation, such Obligations as are evidenced by the Junior Note) shall
be without recourse to Grantor’s members, shareholders, officers, affiliates,
directors, partners, agents, employees or consultants, or any affiliate of any
such person, or to the property or assets of any such person.  Notwithstanding
anything to the contrary herein, nothing herein shall be deemed to be a waiver
of any right which Lender may have under Sections 506(a), 506(b), 1111(b) or
any other provision of the Federal Bankruptcy Code or any similar federal or
state statute to file a claim for the full amount of the Obligations secured
hereby or to require that all Collateral shall continue to secure all
Obligations owing to Lender in accordance with the Junior Note, this Deed of
Trust and the other Junior Loan Documents. 
The foregoing will in no way limit Lender’s recourse to the Collateral
following an Event of Default or limit the liability under any Contract to
which any Affiliate of Grantor is a party and which has been assigned to Junior
Lender as Collateral for the Junior Loan, including but not limited to the
Construction Guaranty of even date herewith and any Contract assigned as
Collateral under the Assignment of Contracts, Permits and Approvals of even
date herewith executed by Grantor and the other parties thereto and the
Collateral Assignment of Lodging Management Agreement also of even date
herewith executed by Grantor and the other parties thereto.

 

Section 8.14           Use of Loan Proceeds.

 

Grantor will use the proceeds of the Junior Loan and
other Obligations secured hereby solely for the purpose of carrying on a
business or commercial enterprise and not for personal, family or household
purposes.  The Property forms no part of
any property owned, used or claimed by Grantor as a residence or business
homestead and is not exempt from forced sale under the laws of the State of
Texas.  Grantor hereby disclaims and
renounces each and every claim to the Property as a homestead.

 

 

Article IX

State Specific Provisions

 

Section 9.1             Principles of Construction.

 

In the event of any inconsistencies between the terms
and conditions of this Article IX and the other provisions of this Deed of
Trust, the terms and conditions of this Article IX shall control and be
binding.

 

Section 9.2             Definitions.

 

The term “State” as used
herein shall mean the State of Texas.

 

Section 9.3             Usury Laws.

 

It is the intention of the parties hereto to conform
strictly to applicable usury laws. 
Accordingly, if the transactions contemplated hereby would be usurious
under any such applicable Law, then, and in that event, notwithstanding
anything to the contrary in this Deed of Trust, the Junior Loan Agreement, the
Junior Note, the other Junior Loan Documents, and any other instrument or
agreement entered into in connection therewith, whether now existing or
hereafter arising and whether written or oral, it is agreed as follows:

 

(a)           the aggregate of all
interest and any other charges constituting interest or adjudicated as
constituting interest and that is contracted for, charged or received under the
Junior Note, or under any of the aforesaid instruments or agreements or
otherwise in connection with the Junior Note (whether designated as interest,
fees, late charges, payments or otherwise) shall under no circumstances exceed
the maximum amount of interest permitted by any such Law and any excessive rate
shall automatically be reduced so as not to exceed the maximum legal rate and
any excess interest charged or contracted for shall be cancelled automatically
and, if theretofore paid, shall be credited on the principal amount owing on
the Junior Note by Lender (or, if the Junior Note has been paid in full,
refunded to Grantor); and

 

(b)           in the event that the
maturity of the Junior Note is accelerated by reason of an Event of Default
under the Junior Loan Documents, or otherwise, then such consideration that
constitutes interest may never include more than the maximum rate of interest
permitted by any such Law computed from the dates of each advance of the loan
proceeds outstanding until payment.  If
from any circumstance Lender shall ever receive interest or any other charges
constituting interest or adjudicated as constituting interest, the amount, if
any, which would exceed the maximum rate of interest permitted by such Law
shall be applied to the reduction of the principal amount owing on the Junior
Note or on account of any other principal indebtedness of Grantor to Lender,
and not to the payment of interest; or if such excessive interest exceeds the
unpaid balance of the principal and such other indebtedness, the amount of such
excessive interest that exceeds the unpaid principal and such other
indebtedness shall be refunded to Grantor.

 

All
sums paid or agreed to be paid to Lender for the use, forbearance or detention
of the indebtedness evidenced hereby shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the
full term of such indebtedness so that the rate or amount of interest on
account of any such indebtedness does not exceed the applicable usury ceiling.

 

 

Section 9.4             Future Advances.

 

This Deed of Trust shall also secure such future or
additional indebtedness of Grantor to Lender or such future or additional
advances for construction, improvements, preservation, maintenance and
operation of the Property and the security for payment of the Obligations as
may be made by Lender, whether such future advances are obligatory or are to be
made at Lender’s option, to Grantor, for any purpose.

 

Section 9.5             WAIVER OF CONSUMER RIGHTS.

 

TO THE EXTENT NOW OR HEREAFTER APPLICABLE, GRANTOR
HEREBY WAIVES GRANTOR’S RIGHTS UNDER THE DECEPTIVE TRADE PRACTICES - CONSUMER
PROTECTION ACT, SECTION 17.41 ET SEQ., TEXAS BUSINESS & COMMERCE
CODE, A LAW THAT GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS.  AFTER CONSULTATION WITH AN ATTORNEY OF
GRANTOR’S OWN SELECTION, GRANTOR VOLUNTARILY CONSENTS TO THIS WAIVER.

 

Section 9.6             TEXAS FINANCE CODE SECTION 307.052
COLLATERAL PROTECTION INSURANCE NOTICE:

 

(A) GRANTOR IS REQUIRED TO: (I) KEEP THE
PROPERTY INSURED AGAINST DAMAGE IN THE AMOUNT SPECIFIED IN THE JUNIOR LOAN
DOCUMENTS; (II) PURCHASE THE INSURANCE FROM AN INSURER THAT IS AUTHORIZED
TO DO BUSINESS IN THE STATE OF TEXAS OR AN ELIGIBLE SURPLUS LINES INSURER; AND (III) NAME
LENDER AS THE PERSON TO BE PAID UNDER THE POLICY IN THE EVENT OF A LOSS AS AND
TO THE EXTENT REQUIRED IN THE JUNIOR LOAN AGREEMENT; (B) GRANTOR MUST, IF
REQUIRED BY LENDER PURSUANT TO THE JUNIOR LOAN AGREEMENT, DELIVER TO LENDER A
COPY OF THE POLICY AND PROOF OF THE PAYMENT OF PREMIUMS, PROVIDED THAT EVIDENCE
OF ANY RENEWAL POLICY SHALL NOT BE REQUIRED TO BE PROVIDED MORE THAN 15 DAYS
PRIOR TO THE EXPIRATION OF THE TERM OF THE THEN EXISTING INSURANCE POLICY; AND (C) IF
GRANTOR FAILS TO MEET ANY REQUIREMENT LISTED IN PARAGRAPH (A) OR (B),
LENDER MAY OBTAIN COLLATERAL PROTECTION INSURANCE ON BEHALF OF GRANTOR AT
THE GRANTTOR’S EXPENSE AS AND TO THE EXTENT EXPLICITLY PERMITTED BY THE JUNIOR
LOAN AGREEMENT.

 

 

Section 9.7             INDEMNITY.

 

IT IS THE EXPRESS INTENTION OF GRANTOR AND GRANTOR
HEREBY AGREES THAT THE INDEMNITIES SET FORTH IN THIS DEED OF TRUST AND THE
OTHER JUNIOR LOAN DOCUMENTS WILL APPLY TO AND FULLY PROTECT EACH INDEMNIFIED
PARTY EVEN THOUGH ANY CLAIMS, DEMANDS, LIABILITIES, LOSSES, DAMAGES, CAUSES OF
ACTION, JUDGMENTS, PENALTIES, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION
REASONABLE ATTORNEYS’ FEES) THEN THE SUBJECT OF INDEMNIFICATION MAY HAVE
BEEN CAUSED BY, ARISE OUT OF, OR ARE OTHERWISE ATTRIBUTABLE TO, DIRECTLY OR
INDIRECTLY, THE NEGLIGENCE (EXCLUDING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT)
IN WHOLE OR IN PART OF SUCH INDEMNIFIED PARTY AND/OR ANY OTHER PARTY.

 

	
   

  	
  Initials
  of signatory of Marc Sierra:

  	
  /s/
  MDS

  

 

Section 9.8             SECTION 26.02 NOTICE.

 

IN ACCORDANCE WITH SECTION 26.02 OF THE TEXAS
BUSINESS AND COMMERCE CODE, THIS DEED OF TRUST AND THE OTHER DOCUMENTS
EVIDENCING, SECURING OR PERTAINING TO ALL OR ANY PORTION OF THE OBLIGATIONS
REPRESENT THE FINAL AGREEMENT BETWEEN GRANTOR AND LENDER AS TO THE SUBJECT
MATTER THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN SUCH PARTIES.

 

	
   

  	
  Initials
  of signatory of Marc Sierra:

  	
  /s/
  MDS

  

 

Section 9.9             Actions of Trustee.

 

Notwithstanding anything to the contrary set forth in
this Deed of Trust, the role of the Trustee in executing any remedies set forth
in this Deed of Trust shall be limited to performing the Trustee’s duties with
respect to exercise of the power of sale granted in this Deed of Trust, and
notwithstanding anything to the contrary set forth herein, the Trustee may not
delegate the obligation to conduct any non-judicial foreclosure sale to an
agent of the Trustee.

 

[Remainder of
page intentionally left blank; signature page follows]

 

 

IN WITNESS WHEREOF, Grantor
has caused this Deed of Trust to be executed as of the day and year first
written above.

 

	
   

  	
  GRANTOR:

  
	
   

  	
   

  
	
   

  	
  REST EASY LLC, a Delaware limited
  liability
  company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  RE
  MANAGING MEMBER LLC, its managing member

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Actus Lend Lease Holdings LLC,
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Marc Sierra

  
	
   

  	
   

  	
   

  	
   

  	
  Mark
  Sierra

  
	
   

  	
   

  	
   

  	
   

  	
  Executive
  Vice President

  

 

 

	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  

 

This
instrument was acknowledged before me this           
day of August, 2009, by
                                                                  ,
as                                               
of Actus Lend Lease Holdings LLC, the sole member of RE Managing Member LLC,
the managing member of Rest Easy LLC, on behalf of said limited liability
company.

 

	
  [SEAL]

  	
  /s/
  Susan Gaw Henderson

  
	
   

  	
  Notary
  Public in and for

  
	
   

  	
  the
  State of

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Susan
  Gaw Henderson

  
	
   

  	
  Print
  name of Notary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  My
  Commission Expires:

  

 

[Signature page to
Junior Lender Deed of Trust (Fort Hood)]

 

 

Exhibit A

 

Legal Description

 

[Ground Lease]

 

 

Exhibit B

 

Description of Ancillary Leases

 

 

Schedule
to Exhibit 10.5

 

Substantially
Identical Deeds of Trust Omitted

 

	
  State
  Filed

  	
   

  	
  County

  	
   

  	
  Subject U.S. Army Installation

  
	
  Arizona

  	
   

  	
  Yuma

  	
   

  	
  Yuma

  
	
  Texas

  	
   

  	
  Bexar

  	
   

  	
  Fort Sam Houston

  
	
  Virginia

  	
   

  	
  Arlington

  	
   

  	
  Fort MyerExhibit
10.6

 

APN:

 

When
Recorded Return To:

 

Patrick M. Arnold

Powell Coleman & Arnold LLP

8080 North Central Expwy, Suite 1380

Dallas, Texas 
75206

 

NOTWITHSTANDING
ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE MAXIMUM AMOUNT OF PRINCIPAL
INDEBTEDNESS SECURED BY THIS SECURITY INSTRUMENT AT THE TIME OF EXECUTION
HEREOF FOR WHICH UNDER ANY CONTINGENCY MAY BECOME SECURED BY THIS SECURITY
INSTRUMENT AT ANY TIME HEREAFTER IS $8,116,841.

 

Construction Leasehold Mortgage, Assignment,

Security Agreement and Fixture Filing

 

by

 

Rest Easy LLC,

a Delaware limited liability company,

as Borrower,

 

to and in favor of

 

Behringer Harvard PAL I, LLC,

a Delaware limited liability company,

as Lender

 

This document serves as a Fixture Filing under the Oklahoma Uniform
Commercial Code.

 

Borrower’s Organizational Identification Number is 23-3013107.

 

 

Construction
Leasehold Mortgage, Assignment,

Security Agreement and Fixture Filing

 

This Construction Leasehold Mortgage, Assignment,
Security Agreement and Fixture Filing (“Mortgage”) is
made as of the 14th day of August, 2009, by Rest Easy LLC, a Delaware limited
liability company (herein referred to as “Borrower”),
whose address is c/o Actus Lend Lease LLC, 1801 West End Avenue, Suite 1700,
Nashville, TN 37203, in favor of Behringer
Harvard PAL I, LLC, a Delaware limited liability company (together
with its successors and assigns, “Lender”),
whose address is 15601 Dallas Parkway, Suite 600, Addison, Texas 75001.

 

Recitals

 

Borrower is the lessee under (i) that certain
Department of the Army Lease and Conveyance of Improvements DACA65-1-09-47,
dated as of August 14, 2009 (as it may be amended from time to time, the “Ground  Lease”) with
the United States of America, acting by and through the Secretary of the Army
(together with its successors and assigns, the “Landlord”)
with respect to the
real property legally described on Exhibit A attached hereto, a Memorandum of which is
intended to be recorded immediately prior hereto, and (ii) certain
Ancillary Leases (as defined in the Junior Loan Agreement) (collectively, the
Ground Lease and the Ancillary Leases are referred to herein as the “Lease”) with respect to the property described on Exhibit B attached hereto and Borrower is
justly indebted to Lender in the maximum principal sum of up to $25,000,000
(the “Junior Loan”), as evidenced by that
certain Junior Loan Note, dated as of the date hereof (as it may be amended
from time to time, the “Junior  Note”) payable by the Borrower to the Lender in said
principal amount, and that certain Junior Loan Agreement, dated as of the date
hereof, by and between Borrower and Lender (as it may be amended from time to
time, the “Junior  Loan
Agreement”).  As a condition
precedent to making the Junior Loan, Lender has required that Borrower execute
and deliver this Mortgage to Lender.  The
Junior Note, the Junior Loan Agreement, this Mortgage and all other instruments
and documents executed by Borrower that evidence, secure or set forth any of
the Borrower’s obligations relating to the Junior Loan, as the same may from
time to time be extended, amended, restated, supplemented or otherwise
modified, and whether now in existence or hereafter made and entered into, are
collectively referred to as the “Junior Loan Documents.”  Capitalized terms used herein but not
otherwise defined shall have the meanings ascribed to such terms in the Junior
Loan Agreement.

 

Now, therefore, in order to induce Lender to make
the Junior Loan to Borrower, Borrower agrees as follows:

 

Article I

Granting Clauses;
Condition of Grant.

 

Section 1.1             Conveyances
and Security Interests.

 

In order to secure the prompt payment and
performance of the Obligations, Borrower:

 

(a)          hereby
irrevocably and unconditionally grants, mortgages, conveys, transfers and
assigns to Lender, under and subject to the terms and conditions set forth
herein, for the benefit of Lender, with power of sale and right of entry and
possession (to the extent permitted by Law), the leasehold estate created by the Lease and all other
tenancy, term, right, title and interest of Borrower, of whatever character
(whether vested or contingent), in and to (1) the real property described
on Exhibit A and Exhibit B attached
hereto together with any and all rights, privileges and benefits, of
whatever character derived by Borrower, or to which Borrower may be entitled,
under or by virtue of the Lease, including, without limitation: (i) any
and all rights to exercise options (including, without limitation, options to
purchase, renew, extend, terminate, reject or assume), give consents and
receive payments, reimbursements and refunds; (ii) any and all rights to
modify, change, supplement, alter, amend, terminate, cancel, sever or surrender
the Lease and any and all rights to release or discharge the Landlord of or
from the obligations, covenants, conditions and agreements by the Landlord to
be kept, observed or performed thereunder; (iii) any and all claims and
rights to the payment of damages that may presently exist or hereafter arise
under or in connection with the Lease or the rights of Borrower thereunder,
including, without

 

 

limitation, any such claim or right that may arise as a result of the
rejection or disaffirmance of the Lease by the Landlord, or by any trustee of
the Landlord, pursuant to the United States Bankruptcy Code, 11 U.S.C.
§§ 101 et seq., as
amended (the “Code”); (iv) any and all
rights, privileges and benefits, of whatever character, to which Borrower may
hereafter be entitled pursuant to Section 365 of the Code, including,
without limitation, all of Borrower’s rights to remain in possession after
rejection or disaffirmance of the Lease by the Landlord or by any trustee of
the Landlord (collectively, the “Land”) and (2) all
buildings, structures and other improvements now or hereafter existing, erected
or placed on the Land, together with any on-site improvements and off-site
improvements in any way used or to be used in connection with the use,
enjoyment, occupancy or operation of the Land (collectively, excluding the
Excluded Improvements (as defined in the Lease), the “Improvements”),
together with (i) all estates, title interests, title reversion rights,
remainders, increases, issues, profits, rights of way or uses, additions,
accretions, servitudes, strips, gaps, gores, liberties, privileges, water
rights, water courses, alleys,  passages,
ways, vaults, licenses, tenements, franchises, hereditaments, appurtenances,
easements, rights-of-way, rights of ingress or egress, parking rights, timber,
crops, mineral interests and other rights, now or hereafter owned by Borrower
and belonging or appertaining to the Land or Improvements; (ii) all Claims
whatsoever of Borrower with respect to the Land or Improvements, either in law
or in equity, in possession or in expectancy; (iii) all estate, right,
title and interest of Borrower in and to all streets, roads and public places,
opened or proposed, now or hereafter adjoining or appertaining to the Land or
Improvements; and (iv) all options to purchase the Land or Improvements,
or any portion thereof or interest therein, and any greater estate in the Land
or Improvements, and all additions to and Proceeds of the foregoing
(collectively, the “Real Property”);

 

(b)           grants
to Lender a security interest in all personal property of any kind or nature
whatsoever, whether tangible or intangible and whether now owned or hereafter
acquired, in which Borrower now has or hereafter acquires an interest and which
is used in the construction of, or is placed upon, or is derived from or used
in connection with the maintenance, use, occupancy or enjoyment of, the
Property (as hereinafter defined), including (i) all fixtures, equipment,
systems, machinery, furniture, furnishings, appliances, inventory, goods,
building and construction materials, supplies and other articles of personal
property, of every kind and character, tangible and intangible (including
software which is owned by Borrower embedded therein), now owned or hereafter
acquired by Borrower, which are now or hereafter attached to or situated in, on
or about the Land or Improvements, or used in or necessary to the complete and
proper planning, development, use, occupancy or operation thereof, or acquired
(whether delivered to the Land or stored elsewhere) for use or installation in
or on the Land or Improvements, and all additions to the foregoing, all of
which are hereby declared to be permanent accessions to the Land (collectively,
the “Accessories”); (ii) subject to the
terms of the Lock Box Agreement, all accounts of Borrower within the meaning of
the Uniform Commercial Code of the State (as defined herein), derived from or
arising out of the use, occupancy or enjoyment of the Property or for services
rendered therein or thereon (collectively, the “Accounts”);
(iii) all franchise, license, management or other agreements with respect
to the operation of the Real Property or the business conducted therein
(provided all of such agreements shall be subordinate to this Mortgage, and
Lender shall have no responsibility for the performance of Borrower’s
obligations thereunder) and all general intangibles (including payment
intangibles, trademarks, trade names, goodwill, software and symbols) related
to the Real Property or the operation thereof which are owned by Borrower; (iv) all
sewer and water taps, appurtenant water stock or water rights, any Type 2
nonirregation grandfathered water rights, contractual rights to water,
allocations and agreements for utilities, bonds, letters of credit, permits,
certificates, licenses, guaranties, warranties, causes of action, judgments,
Claims, profits, security deposits, utility deposits, and all rebates or
refunds of fees, Taxes, assessments, charges or deposits paid to any
Governmental Authority related to the Real Property or the operation thereof; (v) all
of Borrower’s rights and interests under all Swap Contracts, including all
rights to the payment of money from Lender under any Swap Contract and all
accounts, deposit accounts and general intangibles, including payment
intangibles, described in any Swap Contract; (vi) all insurance policies
held by Borrower with respect to the Property or Borrower’s operation thereof;
and (vii) subject to the terms of the Lock Box Agreement, all money,
instruments and documents (whether tangible or electronic) arising from or by
virtue of any transactions related to the Property, and all deposits and
deposit accounts of Borrower with Lender related to the Property, including any
such deposit account from which Borrower may from time to time authorize Lender
to debit and/or credit payments due with respect to the Junior Loan; together
with all additions to and proceeds of all of the foregoing (collectively,
the “Personalty”) (the Real Property and the
Personalty shall be collectively referred to herein as the “Property”);

 

 

(c)           assigns
to Lender, and grants to Lender a security interest in, Borrower’s right, title
and interest in any
and all judgments, awards of damages (including severance and consequential
damages), payments, proceeds, settlements, amounts paid for a taking in lieu of
Condemnation, or other compensation heretofore or hereafter made, including
interest thereon, and the right to receive the same, as a result of, or in
connection with, any Condemnation or threatened Condemnation (the “Condemnation
Awards”) and all Insurance Proceeds; and

 

(d)           assigns
to Lender, and grants to Lender a security interest in, all of Borrower’s
right, title and interest in, but not any of Borrower’s obligations or
liabilities under, all (i) contracts for services to be rendered, work to
be performed or materials to be supplied in the development of the Land or the
construction or repair of Improvements, including all agreements with
architects, engineers or contractors for such services, work or materials; (ii) all
plans, drawings and specifications for the development of the Land or the
construction or repair of Improvements; (iii) all permits, licenses,
variances and other rights or approvals issued by or obtained from any
Governmental Authority or other Person in connection with the development of
the Land or the construction or repair of Improvements; and (iv) all
amendments of or supplements to any of the foregoing (collectively, the “Design and Construction Documents”).

 

All Persons who may have or acquire an interest in
all or any part of the Property will be deemed to have notice of, and will be
bound by, the terms of the Obligations and each other agreement or instrument
made or entered into in connection with each of the Obligations.  Such terms include any provisions in the Junior
Note, the Junior Loan Agreement and/or any Swap Contract which provide that the
interest rate on one or more of the Obligations may vary from time to
time.  The definition of “Obligations”
includes future advances.

 

Section 1.2             Absolute
Assignment of Rents.

 

In consideration of the making of the Junior Loan by
Lender to Borrower and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower absolutely and
unconditionally assigns any and all Rents received in connection with the
Project to Lender, subject to the terms of the Lock Box Agreement.  This assignment is, and is intended to be, an
unconditional, absolute and present assignment from Borrower to Lender of all
of Borrower’s right, title and interest in and to the Rents and not an assignment
in the nature of a pledge of the Rents or the mere grant of a security interest
therein.  For so long as this Mortgage
shall be in effect or until Lender shall otherwise consent in writing, all such
Rents shall be paid to the Cash Management Agent as set forth in the Lock Box
Agreement.  All such sums received by
Borrower from and after the date hereof shall be deemed received in trust and
shall be turned over immediately to Cash Management Agent.

 

Section 1.3             Security
Agreement, Fixture Filing and Financing Statement.

 

This Mortgage creates a security interest in the
Personalty, and, to the extent the Personalty is not real property, this
Mortgage constitutes a security agreement from Borrower to Lender under the
Uniform Commercial Code of the State.  In
addition to all of its other rights under this Mortgage and otherwise, Lender
shall have all of the rights of a secured party under the Uniform Commercial
Code of the State, as in effect from time to time, or under the Uniform
Commercial Code in force from time to time in any other state to the extent the
same is applicable Law.  This Mortgage
shall be effective as a financing statement filed as a fixture filing with
respect to all fixtures included within the Property and is to be filed for
record in the real estate records of each county where any part of the Property
(including such fixtures) is situated. 
This Mortgage shall also be effective as a financing statement with
respect to any other Property as to which a security interest may be perfected
by the filing of a financing statement and may be filed as such in any
appropriate filing or recording office. 
The respective mailing addresses of Borrower and Lender are set forth in
the opening paragraph of this Mortgage. 
A carbon, photographic or other reproduction of this Mortgage or any
other financing statement relating to this Mortgage shall be sufficient as a
financing statement for any of the purposes referred to in this Section.  Borrower hereby irrevocably authorizes Lender
at any time and from time to time to file any initial financing statements,
amendments thereto and continuation statements as authorized by applicable Law,
reasonably required by Lender to establish or maintain the validity, perfection
and priority of the security interests granted in this Mortgage.  The foregoing authorization includes
Borrower’s irrevocable authorization for Lender at any time and from 

 

 

time to time to file any initial financing
statements and amendments thereto and continuation statements that indicate the
Personalty (a) as “all assets of Borrower, wherever located” or words of
similar effect, regardless of whether any particular asset comprised in the
Personalty falls within the scope of the Uniform Commercial Code of the State
or the jurisdiction where the initial financing statement or amendment is
filed, or (b) as being of an equal or lesser scope or with greater detail.

 

Section 1.4             Release
of Mortgage and Termination of Assignments and Financing Statements.

 

If and when Borrower has paid and performed all of
the Obligations, and no further advances are to be made under the Junior Loan
Agreement, Lender will provide a release of the Property from the lien of this
Mortgage and termination statements for filed financing statements, if any, to
Borrower.  Borrower shall be responsible
for the recordation of such release and the payment of any recording and filing
costs.  Upon the recording of such
release and the filing of such termination statements, the absolute assignment
set forth in Section 1.2 shall automatically terminate and become
null and void.

 

Article II

Representations
and Warranties.

 

Borrower makes the following representations and
warranties to Lender:

 

Section 2.1             Title
to Real Property.

 

Borrower
has a valid interest in the Real Property, free and clear of all liens,
encumbrances and charges (the “Encumbrances”) other than (a) any matters set forth in any policy of
title insurance issued to Lender and insuring Lender’s interest in the Property
which are acceptable to Lender as of the date hereof, (b) the liens and
interests of this Mortgage, the Senior Loan and the Subordinate Loan and (c) any
other Encumbrance that Lender shall expressly approve in its sole and absolute
discretion, as  evidenced
by a “marked-up” commitment (or pro-forma policy) for title insurance initialed
on behalf of Lender (the “Permitted Encumbrances”).  Borrower has full power and lawful authority
to grant the Real Property to Lender in the manner and form herein done or
intended and forever warrant and defend Borrower’s title in the Real Property
against the claims of all persons, subject to the Permitted Encumbrances.  This Mortgage constitutes a valid second lien
upon and security interest in Borrower’s right, title and interest in and to
the Real Property.

 

Section 2.2             Title
to Other Property.

 

Borrower
has good title to the Personalty, and the Personalty is not subject to any
Encumbrance other than the Permitted Encumbrances.

 

Article III

Affirmative
Covenants.

 

Section 3.1             Obligations.

 

Borrower agrees to promptly pay and perform all of
the Obligations, time being of the essence in each case.

 

Section 3.2             Property
Assessments; Documentary Taxes.

 

Borrower will
promptly pay in full and discharge on or before the due date thereof all Taxes
and assessments of every nature which may be levied or assessed against the
Property.

 

Section 3.3             Compliance
with Laws.

 

Except as expressly permitted in the Lease with
respect to pre-existing conditions, Borrower will comply with and not violate,
and cause to be complied with and not violated, all present and future Laws
applicable to the Property and its use and operation.

 

 

Section 3.4             Maintenance
and Repair of the Property.

 

Borrower, at Borrower’s sole expense, will (a) keep
and maintain (or cause to be kept and maintained) the Property in good
condition, working order and repair, and (b) make (or cause to be made)
all necessary or appropriate repairs to the Property, so that each part of the
Property shall at all times be in a good condition and fit and proper for the
respective purposes for which they were originally intended, erected, or
installed.

 

Section 3.5             Additions
to Security.

 

All right, title and interest of Borrower in and to
all Improvements hereafter constructed or placed on the Property shall, without
any further mortgage, conveyance, assignment or other act by Borrower, become
subject to the lien of this Mortgage as fully and completely, and with the same
effect, as though now owned by Borrower and specifically described in the
granting clauses hereof.  Borrower agrees,
however, to execute and deliver to Lender such further documents as may be
reasonably required by the terms of the Junior Loan Agreement and the other
Junior Loan Documents to confirm and evidence such lien.

 

Section 3.6             Performance of Lease.

 

Borrower
shall (i) fulfill, perform and observe in all respects each and every
material condition and material covenant of Borrower contained in the Lease; (ii) give
prompt notice to Lender of any claim or event of default or noncompliance under
the Lease given to Borrower by Landlord or given by Borrower to Landlord,
together with a complete copy or statement of any information submitted or
referenced in support of such claim or event of default; (iii) at the sole
cost and expense of Borrower, enforce the performance and observance of each
and every material covenant and material condition of the Lease to be performed
or observed by any other party to the Lease unless such enforcement is waived
in writing by Lender; (iv) appear in and defend any action challenging the
validity, enforceability or priority of the lien created hereby or the validity
or enforceability of the Lease; and (v) timely exercise all renewal
options under the Lease while any Obligation under the Junior Loan remains
outstanding.  The Lease shall not be
modified, amended, terminated, cancelled or surrendered by Borrower without
Lender’s prior written consent.  Without
limiting the generality of the foregoing, Borrower shall not, without Lender’s
prior written consent, elect to treat the Lease or the leasehold estate created
thereunder as terminated under Section 365 of the Code, after rejection or
disaffirmance of the Lease by the Landlord (whether as debtor in possession or
otherwise) or by any trustee of the Landlord, and any such election made without
such consent shall be void and ineffective. 
Borrower shall not assign, transfer, mortgage, pledge or hypothecate the
Lease or any interest therein to any party other than Lender, Senior Lender or
Subordinate Lender without first obtaining Lender’s prior written consent.  Borrower shall not waive or release any
person from the observance or performance of any material obligation to be
performed under the terms of the Lease or liability on account of any material
warranty given thereunder.  Any modification,
amendment, termination, cancellation, surrender, assignment, transfer,
mortgage, pledge, hypothecation, waiver or release in violation of the
foregoing shall be null and void and of no force and effect.  Borrower agrees that if Borrower, at any time
while the Obligations are outstanding, acquires fee title or any greater estate
than it holds as of the date of this Mortgage in and to the Land or the Real
Property, the lien of this Mortgage shall automatically attach, extend to,
cover and encumber such fee title or other greater estate, and that Borrower
shall execute such further documents and take such further actions as Lender
may reasonably request to confirm such lien. 
Without limiting the foregoing sentence, unless Lender otherwise
consents or elects, fee title to the Real Property and the leasehold interest
in the Land created by the Lease shall not merge, but shall always be kept
separate and distinct, notwithstanding the union of such estates in Borrower,
Lender or any other person by purchase, operation of Law, foreclosure of this
Mortgage, sale of the Real Property pursuant to this Mortgage or otherwise.

 

 

Article IV

Negative Covenants.

 

Section 4.1             Encumbrances.

 

Borrower will not permit any of the Property to
become subject to any Encumbrance other than the Permitted Encumbrances.  Within sixty (60) days after the filing of
any mechanic’s lien or other lien or Encumbrance against the Property, Borrower
will promptly discharge the same by payment or recording a bond or otherwise as
permitted by Law.  So long as Lender’s
security has been protected by the recording of a bond or otherwise in a manner
satisfactory to Lender in its sole and absolute discretion, Borrower shall have
the right to contest in good faith any Claim or Encumbrance, provided that
Borrower does so diligently and without prejudice to Lender or delay in
completing construction of the Improvements. 
Borrower shall give Lender Notice of any default under any lien and
Notice of any foreclosure or threat of foreclosure with respect to any of the
Property.

 

Section 4.2             Transfer
of the Property.

 

Borrower will not, without the prior written consent
of Lender, transfer pursuant to a direct or indirect sale, assignment or
conveyance, whether made voluntarily or by operation of Law or otherwise, and
whether made with or without consideration, or contract to do so, all or any
part of the Property or any legal or beneficial interest therein (except as may
be permitted in this Mortgage).  Except
as set forth in the Junior Loan Agreement, the transfer of any membership
interest in Borrower (whether in one or more transactions during the term of
the Obligations) shall be deemed to be a prohibited transfer of the Property.

 

Section 4.3             Removal,
Demolition or Alteration of Improvements.

 

Except to the extent permitted by the following
section, no Improvements shall be removed, demolished or materially altered
without the prior written consent of Lender.

 

Section 4.4             Additional
Improvements.

 

Borrower will not construct, demolish or materially
alter any Improvements other than those presently on the Land, those described
in the Junior Loan Agreement and those described in the Design/Build Agreement
for the LSCR Phase of the IDP, without the prior written consent of Lender.  Subject to, and in accordance with, the terms
and conditions of the Design/Build Agreement, Borrower will complete and pay
for, within a reasonable time, any Improvements which Borrower is permitted to
construct on the Land.  Borrower will
construct and erect any permitted Improvements (a) strictly in accordance
with the Lease, any other contracts with Landlord, all applicable Laws (as set
forth in the Lease) and any private restrictive covenants, (b) entirely on
lots or parcels of the Land, (c) so as not to encroach upon any easement
or right of way or upon the land of others, and (d) wholly within any
building restriction and setback lines applicable to the Land.

 

Section 4.5             Restrictive
Covenants, Zoning, etc.

 

Without the prior written consent of Lender,
Borrower will not initiate, join in, or consent to any change in, any
restrictive covenant, easement, zoning ordinance, or other public or private
restrictions limiting or defining the uses which may be made of the Property,
or consent to or vote in favor of the inclusion of the Property in any
community facilities or limited improvement district or any other improvement,
assessment or similar district.  Borrower
(a) will promptly perform and observe, and cause to be performed and
observed, all of the material terms and conditions of all agreements affecting
the Property, and (b) will do or cause to be done all things reasonably
necessary to preserve intact and unimpaired any and all easements,
appurtenances and other interests and rights in favor of, or constituting any
portion of, the Property.

 

 

Article V

Events of Default.

 

The occurrence or happening, from time to time, of
any one or more of the following shall constitute an Event of Default under
this Mortgage:

 

Section 5.1             Junior
Loan Agreement.

 

The occurrence of an Event of Default under the
Junior Loan Agreement.

 

Section 5.2             Transfers.

 

Borrower, without the prior written consent of
Lender, transfers pursuant to a direct or indirect sale, assignment or
conveyance, whether made voluntarily or by operation of Law or otherwise, and
whether made with or without consideration, or contract to do so, all or any
part of the Property or any legal or beneficial interest therein.

 

Section 5.3             Other
Obligations.

 

Borrower fails to promptly perform or comply with
any of the Obligations set forth in this Mortgage (other than those expressly
described in other Sections of this Article V), and such failure
continues uncured for a period of ninety (90) days after Notice from Lender to
Borrower, unless (a) such failure, by its nature, is not capable of being
cured within such period and (b) within such period, Borrower commences to
cure such failure and thereafter diligently prosecutes the cure thereof and
provides evidence of such efforts upon request to Lender.

 

Article VI

Rights and Remedies.

 

Upon the happening and during the continuance of any
Event of Default, Lender shall have the right, in addition to any other rights
or remedies available to Lender under any of the Junior Loan Documents or
applicable Law, to exercise any one or more of the following rights, powers or
remedies:

 

Section 6.1             Acceleration.

 

Lender
may accelerate all Obligations under the Junior Loan Documents whereupon such
Obligations shall become immediately due and payable, without notice of
default, notice of acceleration or intention to accelerate, presentment or
demand for payment, protest, notice of protest, notice of nonpayment or
dishonor, or notices or demands of any kind or character (all of which are
hereby waived by Borrower).

 

Section 6.2             Foreclosure; Power of Sale.

 

Lender,
shall have all of the rights and may exercise all of the powers set forth in
applicable Law of the State.  Lender,
pursuant to the power of sale herein conferred if such power of sale is allowed
under applicable Law, may sell the Property in its entirety or in parcels, and
by one or by several sales, as deemed appropriate by Lender in its sole and
absolute discretion.  If Lender chooses
to have more than one foreclosure sale, Lender may cause the foreclosure sales
to be held simultaneously or successively, on the same day, or on such
different days and at such different times as Lender may elect.  Lender shall receive and apply the proceeds
from the sale of the Property, or any portion thereof, in accordance with
applicable Law.  Immediately upon the
first delivery or publication of any advertisement or notice of sale, there
shall become due and owing by Borrower all Expenses incident to any foreclosure
proceedings under this Mortgage together with fees and expenses of the Lender,
and no Person shall be required to receive only the aggregate amount of the
Obligations to the date of payment unless the same is accompanied by a tender
of such Expenses and fees.  All Expenses
incurred by Lender must be paid by Borrower as part of any reinstatement
tendered in connection with a sale of the Property.  Lender may bid and become the purchaser of
all or any part of the Property at any foreclosure sale hereunder.

 

 

Section 6.3             Judicial Action.

 

Lender
shall have the right from time to time to sue Borrower for any sums (whether
interest, damages for failure to pay principal or any installments thereof,
taxes, or any other sums required to be paid under the terms of this Mortgage,
as the same become due), without regard to whether or not any of the other
Obligations shall be due, and without prejudice to the right of Lender
thereafter to enforce any appropriate remedy against Borrower, including an
action of foreclosure or an action for specific performance, for a Default (as
defined in the Junior Loan Agreement) or Event of Default existing at the time
such earlier action was commenced.

 

Section 6.4             Collection of Rents.

 

Upon
the occurrence and during the continuance of an Event of Default, Lender shall
have the right to (i) take possession of any or all of the Property, with
the power to protect and preserve the Property, to operate the Property
preceding foreclosure or sale, (ii) subject to the terms of the Lock Box
Agreement, to collect all Rents from the Property and apply the proceeds
against the sums due under this Mortgage, and (iii) exercise all other
rights with respect to the Property described in this Mortgage.  Borrower hereby appoints Lender as Borrower’s
attorney-in-fact with full power of substitution, which appointment shall take
effect upon the occurrence and during the continuance of an Event of Default
and is coupled with an interest and, subject to a cure of such Event of Default
in accordance with the terms of the Junior Loan Documents, is irrevocable prior
to the full and final payment and performance of the Obligations, in Borrower’s
name or in Lender’s name: (a) subject to the terms and conditions of the
Lock Box Agreement, to endorse all checks and other instruments received in
payment of Rents and to deposit the same in any account selected by Lender; (b) to
give receipts and releases in relation thereto; (c) to institute,
prosecute and/or settle actions for the recovery of Rents; (d) to modify
the terms of any agreements relating to the Rents payable thereunder; and (e) to
do all other acts and things with respect to the Rents which Lender may deem
necessary or desirable to protect the security for the Obligations.

 

Section 6.5             Taking Possession or Control of
the Property.

 

As a
matter of right without regard to the adequacy of the security, and to the
extent permitted by Law without notice to Borrower, Lender shall be entitled,
upon application to a court of competent jurisdiction, to the immediate
appointment of a receiver for all or any part of the Property and the Rents,
whether such receivership may be incidental to a proposed sale of the Property
or otherwise, and Borrower hereby consents to the appointment of such a
receiver and agrees that such receiver shall have all of the rights and powers
granted to Lender pursuant to Section 6.4.  In addition, to the extent permitted by Law,
and with or without the appointment of a receiver, or an application therefor,
Lender may (a) enter upon, and take possession of (and Borrower shall
surrender actual possession of), the Property or any part thereof, without
notice to Borrower and without bringing any legal action or proceeding, or, if
necessary by force, legal proceedings, ejectment or otherwise, and (b) remove
and exclude Borrower and its agents and employees therefrom.

 

Section 6.6             Management of the Property.

 

Upon
obtaining possession of the Property or upon the appointment of a receiver as
described in Section 6.5, Lender or the receiver, as the case may
be, may, at its sole option, (a) make all necessary or proper repairs to
or upon the Property, (b) operate, maintain, control, make secure and
preserve the Property, and (c) complete the construction of any unfinished
Improvements on the Property and, in connection therewith, continue any and all
outstanding contracts for the erection and completion of such Improvements and
make and enter into any further contracts which may be necessary, either in
their or its own name or in the name of Borrower (the costs of completing such
Improvements shall be Expenses secured by this Mortgage and shall accrue
interest as provided in the Junior Loan Agreement and the other Junior Loan
Documents).  Lender or such receiver
shall be under no liability for, or by reason of, any such taking of
possession, entry, holding, removal, maintaining, operation or management,
except for gross negligence or willful misconduct.  The exercise of the remedies provided in this
Section shall not cure or waive any Event of Default, and the enforcement
of such remedies, once commenced, shall continue for so long as Lender shall
elect, notwithstanding the fact that the exercise of such remedies may have,
for a time, cured the original Event of Default.

 

 

Section 6.7             Uniform Commercial Code.

 

Lender
may proceed under the Uniform Commercial Code as to all or any part of the
Personalty, and in conjunction therewith may exercise all of the rights,
remedies and powers of a secured creditor under the Uniform Commercial
Code.  Upon the occurrence and during the
continuation of any Event of Default, Borrower shall assemble all of the
Accessories and make the same available within the Improvements.  Any notification required by the Uniform
Commercial Code shall be deemed reasonably and properly given if sent in
accordance with the Notice provisions of this Mortgage at least ten (10) days
before any sale or other disposition of the Personalty.  Disposition of the Personalty shall be deemed
commercially reasonable if made pursuant to a public sale advertised at least
twice in a newspaper of general circulation in the community where the Property
is located.  It shall be deemed
commercially reasonable for the Lender to dispose of the Personalty without
giving any warranties as to the Personalty and specifically disclaiming all
disposition warranties.  Alternatively,
Lender may choose to dispose of some or all of the Property, in any combination
consisting of both Personalty and Real Property, in one sale to be held in
accordance with the Law and procedures applicable to real property, as
permitted by Article 9 of the Uniform Commercial Code.  Borrower agrees that such a sale of
Personalty together with Real Property constitutes a commercially reasonable
sale of the Personalty.

 

Section 6.8             Application of Proceeds.

 

Unless otherwise provided by applicable Law, all
proceeds from the sale of the Property or any part thereof pursuant to the
rights and remedies set forth in this Article VI and any other
proceeds received by Lender from the exercise of any of its other rights and
remedies hereunder or under the other Junior Loan Documents shall, subject to
the terms and conditions of the Lock Box Agreement, be applied first to pay all
Expenses and next in reduction of the other Obligations, in such manner and
order as Lender may elect.

 

Section 6.9             Other Remedies.

 

Lender shall have the right from time to time to
protect, exercise and enforce any legal or equitable remedy against Borrower
provided under the Junior Loan Documents or by applicable Laws.

 

Article VII

Miscellaneous.

 

Section 7.1             Rights,
Powers and Remedies Cumulative.

 

Each right, power and remedy of Lender as provided
for in this Mortgage, or in any of the other Junior Loan Documents or now or
hereafter existing by Law, shall be cumulative and concurrent and shall be in
addition to every other right, power or remedy provided for in this Mortgage,
or in any of the other Junior Loan Documents or now or hereafter existing by
Law, and the exercise or beginning of the exercise by Lender of any one or more
of such rights, powers or remedies shall not preclude the simultaneous or later
exercise by Lender of any or all such other rights, powers or remedies.

 

Section 7.2             No
Waiver by Lender.

 

No course of dealing or conduct by or among Lender
and Borrower shall be effective to amend, modify or change any provisions of
this Mortgage or the other Junior Loan Documents.  No failure or delay by Lender to insist upon
the strict performance of any term, covenant or agreement of this Mortgage or
of any of the other Junior Loan Documents, or to exercise any right, power or
remedy consequent upon a breach thereof, shall constitute a waiver of any such
term, covenant or agreement or of any such breach, or preclude Lender from
exercising any such right, power or remedy at any later time or times.  By accepting payment after the due date of
any of the Obligations, Lender shall not be deemed to waive the right either to
require prompt payment when due of all other Obligations, or to declare an
Event of Default for failure to make prompt payment of any such other
Obligations.  Neither Borrower nor any
other Person now or hereafter obligated for the payment of the whole or any
part of the Obligations shall be relieved of such liability by reason of (a) the
failure of Lender to comply with any request of Borrower or of any other Person
to take action to foreclose this Mortgage or otherwise enforce any of the
provisions of this Mortgage, or (b) any agreement or stipulation between
any subsequent 

 

 

owner or owners of the Property and Lender,
or (c) Lender’s extending the time of payment or modifying the terms of this
Mortgage or any of the other Junior Loan Documents without first having
obtained the consent of Borrower or such other Person.  Regardless of consideration, and without the
necessity for any notice to or consent by the holder of any subordinate lien on
the Property, Lender may release any Person at any time liable for any of the
Obligations or any part of the security for the Obligations and may extend the
time of payment or otherwise modify the terms of this Mortgage or any of the
other Junior Loan Documents without in any way impairing or affecting the lien
of this Mortgage or the priority of this Mortgage over any subordinate
lien.  The holder of any subordinate lien
shall have no right to terminate any Lease regardless of whether or not such
Lease is subordinate to this Mortgage. 
Lender may resort to the security or collateral described in this
Mortgage or any of the other Junior Loan Documents in such order and manner as
Lender may elect in its sole discretion.

 

Section 7.3             Waivers
and Agreements Regarding Remedies.

 

To the full extent Borrower may do so, Borrower
hereby:

 

(a)           agrees that it will not at any time plead, claim or
take advantage of any Laws now or hereafter in force providing for any
appraisement, valuation, stay, extension or redemption, and waives and releases
all rights of redemption, valuation, appraisement, stay of execution, extension
and notice of election to accelerate the Obligations;

 

(b)           waives all rights to a marshalling of the assets of
Borrower, including the Property, or to a sale in the inverse order of
alienation in the event of a foreclosure of the Property, and agrees not to
assert any right under any Law pertaining to the marshalling of assets, the
sale in inverse order of alienation, the exemption of homestead, the administration
of estates of decedents, or other matters whatsoever to defeat, reduce or
affect the right of Lender under the terms of this Mortgage to a sale of the
Property without any prior or different resort for collection, or the right of
Lender to the payment of the Obligations out of the proceeds of sale of the
Property in preference to every other claimant whatsoever;

 

(c)           waives any right to bring or utilize any defense,
counterclaim or setoff, other than one which denies the existence or
sufficiency of the facts upon which any foreclosure action is grounded.  If any defense, counterclaim or setoff, other
than one permitted by the preceding clause, is timely raised in a foreclosure
action, such defense, counterclaim or setoff shall be dismissed.  If such defense, counterclaim or setoff is
based on a Claim which could be tried in an action for money damages, such
Claim may be brought in a separate action which shall not thereafter be
consolidated with the foreclosure action. 
The bringing of such separate action for money damages shall not be
deemed to afford any grounds for staying the foreclosure action; and

 

(d)           waives and relinquishes any and all rights and
remedies which Borrower may have or be able to assert by reason of the
provisions of any Laws pertaining to the rights and remedies of sureties; and

 

(e)           to the maximum extent
permitted by Law, Borrower waives any right to assert that the Property was
created in violation of applicable subdivision ordinances and regulations and
agrees to take all actions and execute all documents requested by Lender in
connection with compliance with or exemption from all applicable subdivision
ordinances and regulations.

 

Section 7.4             Successors
and Assigns.

 

All of the grants, covenants, terms, provisions and
conditions of this Mortgage shall run with the Land and shall apply to and bind
the successors and assigns of Borrower (including any permitted subsequent
owner of the Property), and inure to the benefit of Lender and its successors
and assigns.

 

Section 7.5             No
Warranty by Lender.

 

By inspecting the Property or by accepting or
approving anything required to be observed, performed or fulfilled by Borrower
or to be given to Lender pursuant to this Mortgage or any of the other Junior
Loan Documents, Lender shall not be deemed to have warranted or represented the
condition, sufficiency, legality, effectiveness or legal effect of the same,
and such acceptance or approval shall not constitute any warranty or
representation with respect thereto by Lender.

 

 

Section 7.6             Amendments.

 

This Mortgage may not be modified or amended except
by an agreement in writing, signed by the party against whom enforcement of the
change is sought.

 

Section 7.7             Severability.

 

In the event any one or more of the provisions of
this Mortgage shall for any reason be held to be invalid, illegal or
unenforceable, in whole or in part or in any other respect, or in the event any
one or more of the provisions of the Junior Loan Documents operates or would
prospectively operate to invalidate this Mortgage, then and in either of those
events, at the option of Lender, such provision or provisions only shall be
deemed null and void and shall not affect the validity of the remaining
Obligations, and the remaining provisions of the Junior Loan Documents shall
remain operative and in full force and effect and shall in no way be affected,
prejudiced or disturbed thereby.

 

Section 7.8             Notices.

 

All Notices, demands or documents to be delivered
under this Mortgage shall be given in writing in the manner provided for the
giving of notices under the Junior Loan Agreement.

 

Section 7.9             Rules of
Construction.

 

The words “hereof,” “herein,” “hereunder,” “hereto,”
and other words of similar import refer to this Mortgage in its entirety.  The terms “agree” and “agreements” mean and
include “covenant” and “covenants.”  The
words “include” and “including” shall be interpreted as if followed by the
words “without limitation.”  The headings
of this Mortgage are for convenience of reference only and shall not be
considered a part hereof and are not in any way intended to define, limit or
enlarge the terms hereof.  All references
(a) made in the neuter, masculine or feminine gender shall be deemed to
have been made in all such genders, (b) made in the singular or plural
number shall be deemed to have been made, respectively, in the plural or
singular number as well, (c) to the Junior Loan Documents are to the same
as extended, amended, restated, supplemented or otherwise modified from time to
time unless expressly indicated otherwise, (d) to the Land, Improvements,
Personalty, Real Property or Property shall mean all or any portion of each of
the foregoing, respectively, and (e) to Articles or Sections are to the
respective Articles or Sections contained in this Mortgage unless expressly
indicated otherwise.  Any term used or
defined in the Uniform Commercial Code of the State, as in effect from time to
time, which is not defined in this Mortgage shall have the meaning ascribed to
that term in the Uniform Commercial Code of the State.  If a term is defined in Article 9 of the
Uniform Commercial Code of the State differently than in another Article of
the Uniform Commercial Code of the State, the term shall have the meaning
specified in Article 9.

 

 

Section 7.10           Governing Law.   This Mortgage shall be construed, governed
and enforced in accordance with the Laws in effect from time to time in the
State.

 

Section 7.11           Entire Agreement.  The Junior Loan Documents constitute the
entire understanding and agreement between Borrower and Lender with respect to
the transactions arising in connection with the Obligations, and supersede all
prior written or oral understandings and agreements between Borrower and Lender
with respect to the matters addressed in the Junior Loan Documents.  In particular, and without limitation, the
terms of any commitment by Lender to make the Junior Loan are merged into the
Junior Loan Documents.  Except as
incorporated in writing into the Junior Loan Documents, there are no representations,
understandings, stipulations, agreements or promises, oral or written, with
respect to the matters addressed in the Junior Loan Documents.

 

Section 7.12           Certain Provisions Incorporated by
Reference.

 

The provisions of the Junior Loan Agreement and the
Junior Note (and any other Junior Loan Document) that govern adjustments, if
any, to the interest rate and payment amount, the accrual of interest and
increases, if any, in the principal balance, are incorporated in this Mortgage
by reference as though fully set forth herein.

 

Section 7.13           Nature of Obligations.

 

Except as provided in that certain Guaranty and
Indemnity (as defined in the Junior Loan agreement) of even date herewith, the
obligations of Borrower hereunder to pay and perform the Obligations
(including, without limitation, such Obligations as are evidenced by the Junior
Note) shall be without recourse to Borrower’s members, shareholders, officers,
affiliates, directors, partners, agents, employees or consultants, or any
affiliate of any such person, or to the property or assets of any such
person.  Notwithstanding anything to the contrary herein, nothing herein shall be
deemed to be a waiver of any right which Lender may have under Sections 506(a),
506(b), 1111(b) or any other provision of the Federal Bankruptcy Code or
any similar federal or state statute to file a claim for the full amount of the
Obligations secured hereby or to require that all Collateral shall continue to
secure all Obligations owing to Lender in accordance with the Junior Note, this
Deed of Trust and the other Junior Loan Documents.  The foregoing will in no way limit Lender’s
recourse to the Collateral following an Event of Default or limit the liability
under any Contract to which any Affiliate of Borrower is a party and which has
been assigned to Junior Lender as Collateral for the Junior Loan, including but
not limited to the Construction Guaranty of even date herewith and any Contract
assigned as Collateral under the Assignment of Contracts, Permits and Approvals
of even date herewith executed by Borrower and the other parties thereto and
the Collateral Assignment of Lodging Management Agreement also of even date
herewith executed by Borrower and the other parties thereto.

 

Section 7.14           Use of Loan Proceeds.

 

This Mortgage secures a loan made for the purpose of
building or improving a building.

 

 

Article VIII

State Specific Provisions

 

Section 8.1             Principles of Construction.

 

In the event of any inconsistencies between the terms
and conditions of this Article 8 and the other provisions of this
Mortgage, the terms and conditions of this Article 8 shall control and be
binding.

 

Section 8.2             Definitions.

 

The term “State” as used
herein shall mean the State of Oklahoma.

 

Section 8.3             Construction Mortgage.

 

This Mortgage is also a “construction mortgage” as
that term is defined in the version of Uniform Commercial Code enacted in the
State.

 

Section 8.4             Certain Matters Relating to Property
Located in Oklahoma.

 

With
respect to Property located in the State of Oklahoma, notwithstanding anything
contained herein to the contrary:

 

(a)           Term.  The Obligations secured by this Mortgage are
payable on or before September 1, 2016 as more particularly described in
the Junior Loan Documents.

 

(b)           Power of Sale.
Lender may elect to use the non-judicial power of sale which is hereby granted
and conferred. Such power of sale shall be exercised by giving Borrower notice
of Lender’s intent to foreclose by power of sale and setting forth among other
things, the nature of the breach(es) or default(s) and the action required
to effect a cure thereof and the time period within which such cure may be
effected all in compliance with the Oklahoma Power of Sale Mortgage Foreclosure
Act, 46 Okla. Stat. Section 40 et seq. (the “Act”), as the same may be
amended from time to time or other applicable statutory authority. If no cure
is effected within the statutory time limits, Lender may accelerate the
indebtedness secured by this Mortgage without further notice (the Act’s cure
period shall run concurrently with any contractual provisions for notice and/or
cure period before acceleration of the indebtedness) and may then proceed in
the manner and subject to the conditions of the Act to send to Borrower and
other necessary parties a notice of sale and to sell and convey the Property
and other collateral in accordance with the above referenced statutes. The sale
shall be made at one or more sales, as an entirety or in parcels, upon such
notice, at such time and places, subject to all conditions and with the
proceeds thereof to be applied all as provided in the Act. No action of Lender
based upon the provisions contained herein or contained in the Act, including,
without limitation, the giving of the notice of intent to foreclose by power of
sale or the notice of sale, shall constitute an election of remedies which
would preclude Lender from pursuing judicial foreclosure before or at any time
after commencement of the power of sale foreclosure procedure. Borrower fully
understands the consequences of conferring on Lender the above-described power
of sale, and if Lender elects to enforce this Mortgage by exercising such power
of sale, Borrower hereby expressly waives, to the fullest extent permitted by
Law, any right to a judicial hearing prior to the sale of the Property.

 

A POWER OF SALE HAS BEEN GRANTED IN THIS MORTGAGE.
A POWER OF SALE MAY ALLOW THE MORTGAGEE (LENDER) TO TAKE THE MORTGAGED
PROPERTY AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON
DEFAULT BY THE MORTGAGOR (BORROWER) UNDER THIS MORTGAGE.

 

(c)           Judicial Foreclosure.
Whether or not proceedings have commenced by the exercise of the power of sale
above given, Lender in lieu of proceeding with the power of sale may at its
option declare the whole amount of the indebtedness remaining unpaid,
immediately due and payable without notice, and proceed by suit or suits in
equity or at law to foreclose this Mortgage.

 

(d)           Waiver of
Appraisement. Notwithstanding anything to the contrary contained in this
Mortgage or the other Junior Loan Documents, if the Lender elects to foreclose
upon this Mortgage by judicial proceedings, appraisement 

 

 

of the Property is waived or not waived at the option of the Lender.
Such option can be exercised at or prior to the time judgment is rendered in
any judicial foreclosure thereof.

 

(e)           Mortgage Tax.  Borrower shall pay the Oklahoma Real Estate
Mortgage Tax to be paid upon the recording of the Mortgage pursuant to 68 Okla.
Stat. Section 1901 et  seq.

 

Section 8.5             Maximum Principal Indebtedness.

 

Notwithstanding
anything else in the Mortgage to the contrary, the maximum amount of principal
debt secured by this Mortgage, not including funds disbursed to protect the
security of the Mortgage, shall not exceed at any one time $8,116,841.

 

[Remainder of
page intentionally left blank; signature page follows]

 

 

IN WITNESS WHEREOF, Borrower
has caused this Mortgage to be executed as of the day and year first written
above.

 

	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  REST EASY LLC, a Delaware limited
  liability
  company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  RE
  MANAGING MEMBER LLC, its managing member

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Actus Lend Lease Holdings LLC,
  its sole member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Marc Sierra

  
	
   

  	
   

  	
   

  	
   

  	
  Mark
  Sierra

  
	
   

  	
   

  	
   

  	
   

  	
  Executive
  Vice President

  

 

 

	
  STATE OF

  	
  )

  
	
   

  	
  ) ss.

  
	
  COUNTY OF

  	
  )

  

 

This instrument was
acknowledged before me on August         ,
2009, by
                                            ,
as
                                        
of Actus Lend Lease Holdings LLC, as sole member of RE Managing Member LLC, as
the managing member of Rest Easy LLC, a Delaware limited liability company.

 

	
  /s/
  Susan Gaw Henderson

  	
   

  
	
  Notary Public

  	
   

  
	
   

  	
   

  
	
  My Commission Expires:

  	
   

  
	
  Commission No.:

  	
   

  
	
   

  	
   

  
	
  [AFFIX NOTARY SEAL]

  	
   

  

 

[Signature page to PAL Junior Mortgage
(Fort Sill)]

 

 

Exhibit A

 

Legal Description

 

LEGAL DESCRIPTION FT. SILL FOR PARCEL-A

 

All that certain lot, piece or parcel of land,
belonging, lying, situate in Fort Sill Military Reservation, Comanche County,
Oklahoma being known and designated as Parcel-A, as shown on the survey
entitled, “ALTA Survey Privatization Army Lodging Parcel-A / Main Lodging, Fort
Sill, Oklahoma”, dated July 15, 2009 and being more particularly described
as follows:

 

Commencing at a found chiseled “X” in the concrete
median on the overpass of Ft. Sill Blvd., the chiseled “X” is 8.9 feet West of
the East edge of the median, 9.1 feet East of the West edge of the median and
38.8 feet North of the end of the concrete. Chiseled “X” being the Northeast
corner of Section 24, Township 2 North, Range 12 West, I. M. Meridian, in
Fort Sill, Comanche County, Oklahoma. As referenced by the Certified Corner
Record, dated 16 September 2003, filed by Edward Deral Paulk, Jr.,
license number, L.S. 1279, said chiseled “X” having the following coordinates:
X= 1846766.423 Y= 474992.679, NAD 1983 (ADJ 1993 HARN) Oklahoma State Plane
Coordinates for the South Zone in U.S. Survey feet, go N22°53’18”E a distance of 10113.21
feet to a 2 1⁄2” aluminum disk stamped “A-01” set flush with the ground on top of
a 5/8” X 24” iron rod, set at the edge of the pavement on the West side of
Geronimo Road, said disk being the POINT OF BEGINNING.

 

Thence from said “Point
of Beginning” along said edge of the pavement on the West side of Geronimo Road S24°07’13”W a distance of 155.42 feet to
a point, thence S21°22’21”W a distance of 51.53 feet to a point, thence S15°55’36”W
a distance of 41.33 feet to a monument stamped “A-02”, thence continuing along
said edge of pavement S11°57’59”W a distance of 1051.26 feet to a monument
stamped “A-03”, set at said edge of pavement, thence S50°39’31”E a distance of
5.70 feet to a monument stamped “A-04”, set at the back of the curb on the West
side of Geronimo Road, thence along said back of curb following an arc 42.11
feet to the right, having a radius of 26.64 feet, the chord of which is
S57°26’39”W for a distance of 37.86 feet to a monument stamped “A-05”, set at
the back of the curb on the North side of Fergusson Road, thence along said
back of curb N76°45’32”W a distance of 1243.48 feet to a monument stamped
“A-06”, thence along an arc 184.22 feet to the right, having a radius of 678.97
feet, the chord of which is N69°17’35”W for a distance of 183.65 feet to a
monument stamped “A-07”, thence leaving said back of curb N30°46’11”E a
distance of 367.39 feet to a monument stamped “A-08”, thence N38°47’32”E a
distance of 542.31 feet to a monument stamped “A-09”, set at the Northwest
corner of a culvert drain concrete headwall, thence N77°11’52”W a distance of
231.44 feet to a monument stamped “A-10”, set at the back of the curb on the
East side of a driveway, thence N72°06’20”W a distance of 92.72 feet to a
monument stamped “A-11”, thence N58°40’27”W a distance of 113.27 feet to a
monument stamped “A-12”, set at the back of the curb on the East side of Condon
Road, thence crossing the Main Driveway in line with the back of the curb on the
East side of Condon Road N44°44’40”E a distance of 58.05 feet to a monument
stamped “A-13”, set at the back of the curb on the East side of Condon Road,
thence S63°35’26”E a distance of 132.37 feet to a monument stamped “A-14”, set
at the North edge of the sidewalk on the North side of the Main Driveway,  thence along said sidewalk S76°59’28”E a
distance of 384.36 feet to a monument stamped “A-15”, set at the North edge of
said sidewalk, thence N12°53’07”E a distance of 418.28 feet to a monument
stamped “A-16”, set at the Northeast corner of a parking lot, thence
S75°44’16”E a distance of 1008.17 feet back to the POINT OF BEGINNING.

 

The above described parcel contains 36.80 acres (1602919 sq. ft.).

 

 

LEGAL DESCRIPTION FT. SILL FOR PARCEL-B

 

All that certain lot, piece or parcel of land,
belonging, lying, situate in Fort Sill Military Reservation, Comanche County,
Oklahoma being known and designated as Parcel-B, as shown on the survey
entitled, “ALTA Survey Privatization Army Lodging Parcel-B / SW Corner Main
Lodging, Fort Sill, Oklahoma”, dated July 15, 2009 and being more
particularly described as follows:

 

Commencing at a found chiseled “X” in the concrete
median on the overpass of Ft. Sill Blvd., the chiseled “X” is 8.9 feet West of
the East edge of the median, 9.1 feet East of the West edge of the median and
38.8 feet North of the end of the concrete. Chiseled “X” being the Northeast
corner of Section 24, Township 2 North, Range 12 West, I. M. Meridian, in
Fort Sill, Comanche County, Oklahoma. As referenced by the Certified Corner
Record, dated 16 September 2003, filed by Edward Deral Paulk, Jr.,
license number, L.S. 1279, said chiseled “X” having the following coordinates:
X= 1846766.423 Y= 474992.679, NAD 1983 (ADJ 1993 HARN) Oklahoma State Plane
Coordinates for the South Zone in U.S. Survey feet, go N12°05’33”E a distance of 8722.75 feet
to a 2 1⁄2” aluminum disk stamped “B-01” set flush with the ground on top of a
5/8” X 24” iron rod, set at the back
of the curb on the North side of Fergusson Road, said disk being the
POINT OF BEGINNING.

 

Thence from said “Point
of Beginning” go along
said back of curb on  an arc 51.57 feet
to the right, having a radius of 29.24 feet, the chord of which is N22°15’03”W
for a distance of 45.14 feet to a monument stamped “B-02”, set at the back of
the curb on the East side of Condon Road, thence along said back of curb
N28°46’30”E a distance of 247.62 feet to a point at the back of said curb,
thence along an arc 221.78 feet to the right, having a radius of 1198.31 feet,
the chord of which is N35°34’09”E for a distance of 221.47 feet to a point at
the back of said curb, thence N42°14’15”E a distance of 386.01 feet to a point
at the back of said curb, thence along an arc 14.04 feet to the right, having a
radius of 21.10 feet, the chord of which is N55°37’33”E for a distance of 13.79
feet to a monument stamped “A-12”, set at the back of the curb on the East side
of Condon Road, thence S58°40’27”E a distance of 113.27 feet to a monument
stamped “A-11”, thence S72°06’20”E a distance of 92.72 feet to a monument
stamped “A-10”, set at the back of the curb on the East side of a driveway,
thence S77°11’52”E a distance of 231.44 feet to a monument stamped “A-09”, set
at the Northwest corner of a culvert drain concrete headwall, thence S38°47’32”W
a distance of 542.31 feet to a monument stamped “A-08”, thence S30°46’11”W a
distance of 367.39 feet to a monument stamped “A-07”, set at the back of the
curb on the North side of Fergusson Road, thence, at the back of said curb,
along an arc 193.37 feet to the left, having a radius of 903.01 feet, the chord
of which is N65°36’46”W for a distance of 193.00 feet to a point at the back of
said curb, thence N72°46’26”W a distance of 218.80 feet back to the POINT OF
BEGINNING.

 

The above described parcel contains 8.75 acres (380935 sq. ft.).

 

 

LEGAL DESCRIPTION FT. SILL FOR PARCEL-C

 

All that certain lot, piece or parcel of land,
belonging, lying, situate in Fort Sill Military Reservation, Comanche County,
Oklahoma being known and designated as Parcel-C, as shown on the survey
entitled, “ALTA Survey Privatization Army Lodging Parcel-C / Garage #418, Fort
Sill, Oklahoma”, dated July 15, 2009 and being more particularly described
as follows:

 

Commencing at a found chiseled “X” in the concrete
median on the overpass of Ft. Sill Blvd., the chiseled “X” is 8.9 feet West of
the East edge of the median, 9.1 feet East of the West edge of the median and
38.8 feet North of the end of the concrete. Chiseled “X” being the Northeast
corner of Section 24, Township 2 North, Range 12 West, I. M. Meridian, in
Fort Sill, Comanche County, Oklahoma. As referenced by the Certified Corner
Record, dated 16 September 2003, filed by Edward Deral Paulk, Jr.,
license number, L.S. 1279, said chiseled “X” having the following coordinates:
X= 1846766.423 Y= 474992.679, NAD 1983 (ADJ 1993 HARN) Oklahoma State Plane
Coordinates for the South Zone in U.S. Survey feet, go N23°28’03”E a distance of 13711.57
feet to a 2 1⁄2” aluminum disk stamped “C-01” set flush with the ground on top of a 5/8” X 24” iron rod, set at the edge of
the asphalt on the North side of Ganahl Road, said disk being the POINT
OF BEGINNING.

 

Thence from said “Point
of Beginning” go N77°34’22”W
a distance of 76.74 feet to a monument stamped “D-02”, set at the edge of the
parking lot on the North side of Ganahl Road, 
thence along the South edge of the parking lot N75°28’16”W a distance of
57.60 feet to a monument stamped “D-03”, set at said edge of the asphalt at
Southwest corner of parking area, thence along the West edge of the parking lot
N10°24’26”E a distance of 26.87 feet to a monument stamped “D-04”, set at the
Northwest corner of the parking area, thence along North side of parking area
S76°38’37”E a distance of 58.32 feet to a monument stamped “D-01”, set at the Northeast
corner of the parking area, thence S84°43’05”E a distance of 74.67 feet to a
monument stamped “D-12”, being part of RCI Parcel-D, thence along said RCI
Parcel-D boundary S8°03’57”W a distance of 37.42 feet back to the POINT OF
BEGINNING.

 

The above described parcel contains 0.09 acres (4059.7 sq. ft.).

 

 

LEGAL DESCRIPTION FT. SILL FOR PARCEL-E

 

All that certain lot, piece or parcel of land,
belonging, lying, situate in Fort Sill Military Reservation, Comanche County,
Oklahoma being known and designated as Parcel-E, as shown on the survey
entitled, “ALTA Survey Privatization Army Lodging Parcel-E / Comanche House,
Fort Sill, Oklahoma”, dated July 15, 2009 and being more particularly
described as follows:

 

Commencing at a found chiseled “X” in the concrete
median on the overpass of Ft. Sill Blvd., the chiseled “X” is 8.9 feet West of
the East edge of the median, 9.1 feet East of the West edge of the median and
38.8 feet North of the end of the concrete. Chiseled “X” being the Northeast
corner of Section 24, Township 2 North, Range 12 West, I. M. Meridian, in
Fort Sill, Comanche County, Oklahoma. As referenced by the Certified Corner
Record, dated 16 September 2003, filed by Edward Deral Paulk, Jr.,
license number, L.S. 1279, said chiseled “X” having the following coordinates:
X= 1846766.423 Y= 474992.679, NAD 1983 (ADJ 1993 HARN) Oklahoma State Plane
Coordinates for the South Zone in U.S. Survey feet, go N22°53’09”E a distance of 13664.97
feet to a 2 1⁄2” aluminum disk stamped “E-01” set flush with the ground on top of a 
5/8” X 24” iron rod, set at the back of the curb on the West side of
Geronimo Road, said disk being the POINT OF BEGINNING.

 

Thence from said “Point
of Beginning” go along
said back of curb  S10°21’30”W a distance
of 204.59 feet to a monument stamped “E-02”, thence along an arc 29.78 feet to
the right, having a radius of 19.31 feet, the chord of which is S54°43’38”W for
a distance of 26.91 feet, to a monument stamped “E-03”, set at the back of the
curb on the North side of Hamilton Road, thence N79°10’20”W a distance of
182.11 feet to a monument stamped “E-04”, set at the back of the curb on the
North side of Hamilton Road and at the East side of a sidewalk, thence along
said edge of sidewalk  N10°40’01”E a
distance of 57.01 feet to a monument stamped “E-05”, thence N56°13’23”E a
distance of 72.68 feet to a monument stamped “E-06”, set at the edge of the
asphalt of a dead-end service road, thence S31°53’52”E a distance of 14.60 feet
to a monument stamped “E-07”, set at the edge of the asphalt of said dead-end
service road, thence N55°47’15”E a distance of 83.13 feet to a monument stamped
“E-08”, set at the West edge of a parking area, thence N28°12’32”E a distance
of 35.80 feet to a monument stamped “E-09”, set at the Northwest corner of said
parking area, thence, along the East edge of an asphalt driveway,  along an arc 44.51 feet to the right, having
a radius of 61.59 feet, the chord of which is N22°41’18”E for a distance of
43.54 feet to a point, thence N49°55’28”E a distance of 28.56 feet to a
monument stamped “E-10”, set at the back of the curb on the South side of
Geronimo Road, thence along said back of curb 
S67°58’43”E a distance of 24.91 feet to a point, thence along an arc
32.84 feet to the right, having a radius of 29.51 feet, the chord of which is
S21°43’40”E for a distance of 31.17 feet back to the POINT OF BEGINNING.

 

The above described parcel contains 0.72 acres (31354.8 sq. ft.).

 

 

Exhibit B

 

Description of Ancillary Leases

 

 

Schedule
to Exhibit 10.6

 

Substantially
Identical Mortgages Omitted

 

	
  State

  	
   

  	
  County

  	
   

  	
  Subject U.S. Army Installation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Louisiana

  	
   

  	
  Vernon Parish

  	
   

  	
  Fort Polk

  
	
  Kansas

  	
   

  	
  Leavenworth

  	
   

  	
  Fort Leavenworth

  
	
  Hawaii

  	
   

  	
  Honolulu

  	
   

  	
  Tripler/ Fort
  Shafter

  
	
  Alabama

  	
   

  	
  Dale

  	
   

  	
  Fort Rucker

  
	
  Kansas

  	
   

  	
  Riley

  	
   

  	
  Fort Riley,
  Parcels A and E

  
	
  Kansas

  	
   

  	
  Geary

  	
   

  	
  Fort Riley,
  Parcels B, C and D

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