Document:

Exhibit 10.97

 

 

	
  [GRAPHIC]

  	
   

  	
  AMENDED AND RESTATED  

  EURODOLLAR RATE-SINGLE PAYMENT NOTE (TERM NOTE)

  

 

	
  AMOUNT

  $26,684,000

  	
   

  	
  NOTE DATE

  March 10, 2006

  	
   

  	
  MATURITY DATE

  April 15, 2008

  	
   

  	
  TAX
  IDENTIFICATION NUMBER

  86 1135011

  

 

On
the Maturity Date, as stated above, for value received, the
undersigned promises to pay to the order of Comerica Bank (“Bank”), at any office of Bank in the State
of Texas, Twenty Six Million Six Hundred Sixty Four Thousand and No/100 Dollars

(U.S. $26,664,000.00), or so much
thereof as is outstanding on the Maturity Date, with interest from the date of
this Note at a per annum rate equal to the lesser of (a) the Maximum Rate, as
later defined, or (b) the Stated Rate, as later defined, until maturity,
whether by acceleration or otherwise, or until the occurrence of an “Event of Default” (as defined in the
hereinafter defined Loan Agreement), and after that at a default rate equal to
the rate of interest otherwise prevailing under this Note plus 5% per annum
(but in no event in excess of the Maximum Rate). If on any day the Stated Rate
shall exceed the Maximum Rate for that day, the rate of interest applicable to
this Note shall be fixed at the Maximum Rate on that day and on each day
thereafter until the total amount of interest accrued on the unpaid principal
balance of this Note equals the total amount of interest which would have
accrued if there had been no Maximum Rate. Interest rate changes will be
effective for interest computation purposes as and when the Maximum Rate or the
Stated Rate, as applicable, changes. Subject to the limitations hereinbelow set
forth, interest shall be calculated for the actual number of days the principal
is outstanding on the basis of a 360 day year.

 

Accrued interest on this
Note, whether on the Prime Rate Balance or the Eurodollar Balance (as such
terms are hereinafter defined), shall be payable on the 10th day of each
calendar month, commencing with the 10th day of the calendar month following
the date of this Note, until the Maturity Date (as set forth above) when all
amounts outstanding under this Note shall be due and payable in full. If the
frequency of interest payments is not otherwise specified, accrued interest on
this Note shall be payable monthly on the 10th day of each month.
Payments of principal shall be made in accordance with the terms and provisions
set forth in the Loan Agreement. If any payment of principal or interest under
this Note shall be payable on a day other than a day on which Bank is open for
business, this payment shall be extended to the next succeeding business day
and interest shall be payable at the rate specified in this Note during this
extension. A late payment charge equal to a reasonable amount not to exceed 5%  of each late payment may be charged on
any payment not received by Bank within 10 calendar days after the payment due
date, but acceptance of payment of this charge shall not waive any Event of
Default. The Maturity Date of this Note may be extended in accordance with the
terms and provisions set forth in the Loan Agreement.

 

Subject to the provisions
hereof, the undersigned shall have the option (an “Interest Option”) exercisable from time to time to designate a
portion of the unpaid principal balance of this Note to bear interest at a rate
determined with respect to the Prime Rate (such portion being herein referred
to as the “Prime Rate Balance”)
and to designate one or more portions of the unpaid principal balance of this
Note to bear interest at a rate determined with respect to a Eurodollar Rate
(each such portion being herein referred to as a “Eurodollar Balance”).

 

The term “Maximum Rate,” as used herein, shall mean
at the particular time in question the maximum nonusurious rate of interest
which, under applicable law, may then be charged on this Note. If such maximum
rate of interest changes after the date hereof, the Maximum Rate shall be
automatically increased or decreased,

 

 

as the case may be,
without notice to the undersigned from time to time as of the effective date of
each change in such maximum rate. For purposes of determining the Maximum Rate
under the law of the State of Texas, the applicable interest rate ceiling shall
be the “weekly ceiling” from time
to time in effect under Chapter 303 of the Texas Finance Code, as amended.

 

The term “Stated Rate,” as used in this Note, shall
mean (a) with respect to the Prime Rate Balance outstanding from time to time,
a fluctuating per annum rate of interest equal to the Prime Rate plus the
Applicable Margin and (b) with respect to each Eurodollar Balance, a per annum
rate of interest equal to the Eurodollar Rate for the Eurodollar Interest
Period then in effect with respect to such Eurodollar Balance plus the
Applicable Margin. The Stated Rate may be decreased from time to time upon and
subject to the provisions of that certain Loan Agreement dated April 15, 2005,
between the undersigned and Bank, as amended by that certain Amended and
Restated Loan Agreement dated effective as of March 10, 2006 between the
undersigned and Bank (as the same may be from time to time further
supplemented, amended or restated, the “Loan
Agreement”). Any such decrease in the Stated Rate shall take effect
five Business Days after the undersigned has submitted an Interest Notice that
includes a written request for such decrease, unless Lender determines and
notifies Borrower within such five Business Day period that the conditions for
such reduction set forth in the Loan Agreement have not been satisfied.

 

The term “Prime Rate,” as used herein, shall mean
that annual rate of interest which is equal to the greater of the annual rate
of interest designated by Bank as its prime rate which is charged by Bank from
time to time or a variable per annum rate of interest determined from day to
day which equals the sum of 1% plus the average per annum rate of interest on
overnight Federal funds transactions with members of Federal Reserve System
arranged by Federal funds brokers (“Overnight
Transactions”) transacted on the immediately preceding Business Day,
as published by the Federal Reserve Bank of New York, or, if such interest rate
is not so published for any Business Day, the average of the per annum interest
rate quotations for Overnight Transactions received by Bank for such Business
Day from 3 Federal funds brokers of recognized standing selected by Bank. Bank’s
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged by Bank to any of its customers. Bank may make
commercial loans at rates of interest at, above or below its Prime Rate.

 

The term “Eurodollar Rate”, as used herein shall
mean, with respect to the applicable Eurodollar Interest Period and applicable
Eurodollar Balance (as defined above), the quotient of the following (rounded
upwards, if necessary, to the nearest 1/16 of 1%): (a) the interest rate
determined by Bank (which determination shall be conclusive) to be the per
annum interest rate at which deposits in immediately available funds in U.S.
dollars are offered to Bank at such time as Bank elects on the first day of
such Eurodollar Interest Period, to prime banks in the interbank eurodollar
market selected by Bank for delivery on the first day of such Eurodollar
Interest Period in an amount equal to the principal amount of the corresponding
Eurodollar Balance for a period equal to the length of such Eurodollar Interest
Period; divided by (b) a percentage (expressed as a decimal) equal to 1.00
minus the maximum rate during such interest period at which Bank is required to
maintain reserves on “Eurocurrency
Liabilities” as defined in and pursuant to Regulation D of the Board
of Governors of the Federal Reserve System or, if such regulation or
designation is modified, and as long as Bank is required to maintain reserves
against a category of liabilities which includes eurodollar deposits or
includes a category of assets which includes eurodollar loans, the rate at
which such reserves are required to be maintained on such category.

 

The term “Eurodollar Interest Period”, as used
herein, shall mean, with respect to the applicable Eurodollar Balance, a period
commencing on the date (which must be a Eurodollar Business Day) upon which,
pursuant to an Interest Notice, as later defined, the principal amount of such
Eurodollar Balance begins to accrue

 

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interest at the
applicable Eurodollar Rate (or, in the case of a rollover to a successive
Eurodollar Interest Period, the last day of the immediately preceding
Eurodollar Interest Period) and ending 30, 60, 90, 120 or 180 days after the
commencement date (as designated in the Interest Notice); provided, that: (i)
any Eurodollar Interest Period which would otherwise end on a day which is not
a Eurodollar Business Day shall be extended to the next succeeding Eurodollar
Business Day (unless such Eurodollar Business Day falls in another calendar
month, in which case, such Eurodollar Interest Period shall end on the next
preceding Eurodollar Business Day); and (ii) any Eurodollar Interest Period
which begins on a day for which there is no numerically corresponding day in
the calendar month at the end of such Eurodollar Interest Period shall end on
the last Eurodollar Business Day of such last calendar month; and (iii) no
Eurodollar Interest Period shall extend beyond the Maturity Date.

 

The term “Eurodollar Business Day,” as used herein,
shall mean a Business Day on which dealings in U.S. dollars are carried out in
the interbank eurodollar market selected by Bank.

 

The term “Applicable Margin,” as used herein, shall
mean 0.25% for the Prime Rate Balance and 3.00% for each Eurodollar Balance.

 

The term “Business Day” as used herein, shall mean
any day other than a Saturday, Sunday or holiday, on which Bank is open to
carry on all or substantially all of their normal commercial lending business
in Dallas, Texas.

 

The Interest Option shall
be exercisable by the undersigned subject to the other limitations in this Note
on the undersigned’s option to designate a portion of the unpaid principal
balance hereof as a Eurodollar Balance and only in the manner provided below:

 

(i)         Before
12:00 noon at least three (3) Business Days prior to the date hereof, the
undersigned shall have given Bank written notice (any such notice, an “Interest Notice”) in form and content
satisfactory to Bank specifying the initial Interest Option(s) and the
respective initial amounts of the Prime Rate Balance and each Eurodollar
Balance designated by the undersigned. If the required Interest Notice shall
not have been timely received by Bank or fails to designate all or any portion
of the unpaid principal amount hereof as either a Prime Rate Balance or a
Eurodollar Balance in accordance with the terms and provisions of this Note,
the undersigned shall be deemed conclusively to have designated each such
amount to be a Prime Rate Balance and to have given Bank notice of such
designation.

 

(ii)        At least
three Eurodollar Business Days prior to the termination of any Eurodollar
Interest Period for a Eurodollar Balance, the undersigned shall give Bank an
Interest Notice specifying the Interest Option which is to be applicable to
such Eurodollar Balance upon the expiration of such Eurodollar Interest Period.
If the required Interest Notice shall not have been timely received by Bank the
undersigned shall be deemed conclusively to have designated such amount as a
Prime Rate Balance immediately upon the expiration of such Eurodollar Interest
Period and to have given Bank notice of such designation.

 

(iii)       The
undersigned shall have the right, exercisable on any Business Day subject to
the terms of this Note, to convert an eligible portion of the Prime Rate
Balance to a Eurodollar Balance by giving Bank an Interest Notice of such
designation at least three Eurodollar Business Days prior to the effective date
of such exercise. Additionally, upon termination of any Eurodollar Interest
Period, the undersigned shall have the right subject to the terms of this Note,
on any Business Day, to convert all or a portion of such principal amount from
the Eurodollar Balance to a Prime Rate Balance by giving Bank an Interest
Notice of such selection at least three (3) Eurodollar Business Days prior to
effective date of such exercise.

 

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(iv)      There may be
no more than three (3) Eurodollar Balances in effect at any time.

 

(v)       Each
Eurodollar Balance must be, as of the first day of the applicable Eurodollar
Interest Period, at least Two Hundred Fifty Thousand Dollars ($250,000.00).

 

(vi)      No Event of
Default, or condition or event which, with the giving of notice or the lapse of
time, or both, would constitute a Event of Default, shall have occurred and be
continuing or exist.

 

(vii)     Each
exercise of an Interest Option to designate a Eurodollar Balance to bear
interest at a Stated Rate which is based on the Eurodollar Rate shall not be
revocable.

 

Changes in the
Stated Rate applicable to a Prime Rate Balance or a Eurodollar Balance shall
become effective without prior notice to the undersigned automatically as of
the opening of business on the date of each change in the Prime Rate or the
Eurodollar Rate, as the case may be.

 

If Bank determines that
deposits in U.S. dollars (in the applicable amounts) are not being offered to
prime banks in the interbank eurodollar market selected by Bank for the
applicable Eurodollar Interest Period, or that the rate at which such dollar
deposits are being offered will not adequately and fairly reflect the cost to
Bank of making or maintaining a Eurodollar Balance for the applicable
Eurodollar Interest Period, Bank shall forthwith give notice thereof to the
undersigned, whereupon, until Bank notifies the undersigned that such
circumstances no longer exist, the right of the undersigned to select an
Interest Option based upon a Eurodollar Rate shall be suspended, and the
undersigned may only select Interest Options based on the Prime Rate.

 

If the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by Bank with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impractical for Bank to make or maintain a
Eurodollar Balance, Bank shall so notify the undersigned and any then-existing
Eurodollar Balance shall automatically convert to a Prime Rate Balance either
(i) on the last day of the then-current Eurodollar Interest Period applicable
to such Eurodollar Balance, if Bank may lawfully continue to maintain and fund
such Eurodollar Balance to such day, or (ii) immediately, if Bank may not
lawfully continue to maintain such Eurodollar Balance to such day. Further,
until Bank notices the undersigned that such conditions or circumstances no
longer exist, the right of the undersigned to select an Interest Option based
on a Eurodollar Rate shall be suspended, and the undersigned may only select
Interest Options based on the Prime Rate.

 

If either (i) the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Bank with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency shall subject Bank to any tax (including without limitation
any United States interest equalization or similar tax, however named), duty or
other charge with respect to any Eurodollar Balance, this Note or Bank’s
obligation to compute interest on the principal balance of this Note at a rate
based upon a Eurodollar Rate, or shall change the basis of taxation of payments
to Bank of the principal of or interest on any Eurodollar Balance or any other
amounts due under this Note in respect of any Eurodollar Balance or Bank’s
obligation to compute the interest on the balance of this Note at a rate based
upon a Eurodollar Rate, or (ii) any governmental authority, central bank or
other comparable authority shall at any time impose, modify or deem applicable
any reserve (including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System), special

 

4

 

deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, Bank, or shall impose on Bank or any relevant interbank eurodollar
market or exchange any other condition affecting any Eurodollar Balance, this
Note or Bank’s obligation to compute the interest on the balance of this Note
at a rate based upon the Eurodollar Rate; and the result of any of the
foregoing is to increase the cost to Bank of maintaining any Eurodollar
Balance, or to reduce the amount of any sum received or receivable by Bank
under or with respect to this Note by an amount deemed by Bank to be material,
then upon demand by Bank, the undersigned shall pay to Bank such additional
amount or amounts as will compensate Bank for such increased cost or reduction.
Bank will promptly notify the undersigned of any event of which it has
knowledge, occurring after the date hereof, which will entitle Bank to
compensation pursuant to this paragraph. A certificate of Bank claiming
compensation under this paragraph and setting forth the additional amount or
amounts to be paid to Bank hereunder shall be conclusive in the absence of
manifest error.

 

If any applicable law,
treaty, rule, or regulation (whether domestic or foreign) now or hereafter in
effect and whether presently applicable to Bank or any change therein or any
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof or compliance by Bank therewith or with any guidance, request or
directive of any such governmental authority, central bank or comparable agency
(whether or not having the force of law), including any risk-based capital
guidelines, affects or would affect the amount of capital required or expected
to be maintained by Bank (or any corporation controlling Bank), and Bank
determines that the amount of such capital is increased by or based upon the
existence of any obligations of Bank hereunder or the maintaining of any
Eurodollar Balance hereunder, and such increase has the effect of reducing the
rate of return on Bank’s (or its controlling corporation’s) capital as a
consequence of such obligations or the maintaining of Eurodollar Balances
hereunder to a level below that which Bank (or such controlling corporation)
could have achieved but for such circumstances (taking into consideration its
policies with respect to capital adequacy), then the undersigned shall pay to
Bank, within 60 days of receipt by the undersigned of written notice from Bank
demanding such compensation, such additional amounts as are sufficient to
compensate Bank (or its controlling corporation) for any increase in the amount
of capital and reduced rate of return which Bank determines to be allocable to
the existence of any obligations of Bank hereunder or maintenance of any
Eurodollar Balances hereunder. A certificate of Bank as to the amount of such
compensation, prepared in good faith and in reasonable detail by Bank, which is
submitted by Bank to the undersigned shall be conclusive and binding for all
purposes absent manifest error.

 

The undersigned may not
repay any Eurodollar Balance or convert all or any portion of a Eurodollar
Balance to a Prime Rate Balance prior to the expiration of the applicable
Eurodollar Interest Period, unless (i) such repayment or conversion is
specifically required by the terms of this Note or the Loan Agreement, (ii)
Bank demands that such repayment or conversion be made, or (iii) Bank, in its
sole discretion, consents to such repayment or conversion. If for any reason,
whether or not consent shall have been given or demand shall have been made by
Bank, any Eurodollar Balance is repaid or converted prior to the expiration of
the corresponding Eurodollar Interest Period, or any Interest Option which
designates a Eurodollar Balance is revoked for any reason whatsoever prior to
the commencement of the applicable Eurodollar Interest Period or the
undersigned fails for any reason to borrow the full amount of any Eurodollar
Balance for which the undersigned has exercised an Interest Option, or if for
any other reason whatsoever, the basis for determining the Stated Rate shall be
changed from a Eurodollar Rate to the Prime Rate prior to the expiration of the
applicable Eurodollar Interest Period, or the undersigned shall fail to make
any payment of principal or interest upon this Note at any time that the Stated
Rate is based on a Eurodollar Rate, then the undersigned shall pay to Bank on
demand any amounts required to compensate Bank for any losses, costs or
expenses which it may incur as a result thereof, including, without limitation,
any loss, cost or expense incurred in obtaining, liquidating, employing or

 

5

 

redeploying deposits from
third parties. Amounts payable by the undersigned to Bank pursuant to this
paragraph may include, without limitation, amounts equal to the excess, if any
of (a) the amounts of interest which would have accrued on any amounts so
prepaid, refunded, converted or not so borrowed, from the respective dates of
prepayment, refund, conversion or failure to borrow through the last day of the
relevant Eurodollar Interest Periods at the applicable rates of interest for
the applicable Eurodollar Balances, as provided under this Note, over (b) the
amounts of interest determined by Bank which would have accrued to Bank on such
respective amounts by placing such amounts on deposit for comparable periods
with leading banks in the interbank eurodollar market selected by Bank. The
calculation of any such amounts under this paragraph shall be made as if Bank
actually funded or committed to fund the relevant Eurodollar Balances hereunder
through the purchase of underlying deposits in amounts equal to the respective
amounts of the applicable Eurodollar Balances and having terms comparable to
the applicable Eurodollar Interest Periods; provided, however, that Bank may
fund Eurodollar Balances hereunder in any manner it may elect in its sole
discretion, and the foregoing assumptions shall be utilized only for the
purpose of calculating amounts payable under this paragraph. Upon written
request by the undersigned, Bank shall deliver to the undersigned a certificate
setting for the basis for determining such losses, costs and expenses which
certificate shall be conclusive in the absence of manifest error.

 

For any Eurodollar
Balance, if Bank shall designate a eurodollar lending office which maintains
books separate from those of Bank, Bank shall have the option of maintaining
and carrying such Eurodollar Balance on the Books of such eurodollar lending
office.

 

This Note and any other indebtedness
and liabilities of any kind of the undersigned (or any of them) to Bank, and
any and all modifications, renewals or extensions of it, whether joint or
several, contingent or absolute, now existing or later arising, and however
evidenced and whether incurred voluntarily or involuntarily, known or unknown,
or originally payable to Bank or to a third party and subsequently acquired by
Bank including, without limitation, any late charges; loan fees or charges;
overdraft indebtedness; costs incurred by Bank in establishing, determining,
continuing or defending the validity or priority of any security interest,
pledge or other lien or in pursuing any of its rights or remedies under any
loan document (or otherwise) or in connection with any proceeding involving
Bank as a result of any financial accommodation to the undersigned (or any of
them); and reasonable costs and expenses of attorneys and paralegals, whether
inside or outside counsel is used, and whether any suit or other action is
instituted, and to court costs if suit or action is instituted, and whether any
such fees, costs or expenses are incurred at the trial court level or on
appeal, in bankruptcy, in administrative proceedings, in probate proceedings or
otherwise (collectively “Indebtedness”)
are secured by and Bank is granted a security interest in and lien upon all
items deposited in any account of any of the undersigned with Bank and by all
proceeds of these items (cash or otherwise), all account balances of any of the
undersigned from time to time with Bank, by all property of any of the
undersigned from time to time in the possession of Bank and by any other
collateral, rights and properties described in each and every deed of trust,
mortgage, security agreement, pledge, assignment and other security or
collateral agreement which has been, or will at any time(s) later be, executed by
any (or all) of the undersigned to or for the benefit of Bank (collectively “Collateral”). Notwithstanding the above,
(i) to the extent that any portion of the Indebtedness is a consumer loan, that
portion shall not be secured by any deed of trust or mortgage on or other
security interest in any of the undersigned’s principal dwelling or in any of
the undersigned’s real property which is not a purchase money security interest
as to that portion, unless expressly provided to the contrary in another place,
or (ii) if the undersigned (or any of them) has (have) given or give(s) Bank a
deed of trust or mortgage covering California real property, that deed of trust
or mortgage shall not secure this Note or any other indebtedness of the
undersigned (or any of them), unless expressly provided to the contrary in
another place, or (iii) if the undersigned (or any of them) has (have) given or
give(s) Bank a deed of trust or mortgage covering

 

6

 

real property which, under
Texas law, constitutes the homestead of such person, that deed of trust or
mortgage shall not secure this Note or any other indebtedness of the
undersigned (or any of them) unless expressly provided to the contrary in
another place.

 

Upon the occurrence of an
Event of Default, then Bank may at its option and without prior notice to the
undersigned (or any of them), declare any or all of the Indebtedness to be
immediately due and payable (notwithstanding any provisions contained in the
evidence of it to the contrary), sell or liquidate all or any portion of the
Collateral, set off against the Indebtedness any amounts owing by Bank to the
undersigned (or any of them), charge interest at the default rate provided in
this Note and exercise any one or more of the rights and remedies granted to
Bank by any agreement with the undersigned (or any of them) or given to it
under applicable law. All payments under this Note shall be in immediately
available United States funds, without setoff or counterclaim.

 

If this Note is signed by
two or more parties (whether by all as makers or by one or more as an
accommodation party or otherwise), the obligations and undertakings under this
Note shall be that of all and any two or more jointly and also of each
severally. This Note shall bind the undersigned, and the undersigned’s
respective heirs, personal representatives, successors and assigns.

 

The undersigned waives
presentment, demand, protest, notice of dishonor, notice of demand or intent to
demand, notice of acceleration or intent to accelerate, and all other notices,
and agrees that no extension or indulgence to the undersigned (or any of them)
or release, substitution or nonenforcement of any security, or release or
substitution of any of the undersigned, any guarantor or any other party,
whether with or without notice, shall affect the obligations of any of the
undersigned. The undersigned waives all defenses or right to discharge
available under Section 3.605 of the Texas Uniform Commercial Code and waives
all other suretyship defenses or right to discharge. The undersigned agrees
that Bank has the right to sell, assign, or grant participations or any
interest in, any or all of the Indebtedness, and that, in connection with this
right, but without limiting its ability to make other disclosures to the full
extent allowable, Bank may disclose all documents and information which Bank
now or later has relating to the undersigned or the Indebtedness. The
undersigned agrees that Bank may provide information relating to this Note or
the Indebtedness or relating to the undersigned to Bank’s parent, affiliates,
subsidiaries and service providers.

 

The undersigned agrees to
reimburse the holder or owner of this Note upon for any and all costs and  expenses (including without limit, court
costs, legal expenses and reasonable attorneys’ fees, and whether or not suit
is instituted and, if suit is instituted, whether at the trial court level,
appellate level, in a bankruptcy, probate or administrative proceeding or
otherwise) incurred in collecting or attempting to collect this Note or
incurred in any other matter or proceeding relating to this Note.

 

The undersigned
acknowledges and agrees that there are no contrary agreements, oral or written,
establishing a term of this Note and agrees that the terms and conditions of
this Note may not be amended, waived or modified except in a writing signed by
an officer of Bank expressly stating that the writing constitutes an amendment,
waiver or modification of the terms of this Note. As used in this Note, the
word “undersigned”  means, individually and collectively, each
maker, accommodation party, indorses and other party signing this Note in a
similar capacity. If any provision of this Note is unenforceable in whole or
part for any reason, the remaining provisions shall continue to be effective. THIS NOTE IS MADE IN THE STATE OF TEXAS AND SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
TEXAS, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

7

 

This Note and the Loan
Agreement and all other documents, instruments and agreements evidencing,
governing, securing, guaranteeing or otherwise relating to or executed pursuant
to or in connection with this Note or the Indebtedness evidenced hereby
(whether executed and delivered prior to, concurrently with or subsequent to
this Note), as such documents may have been or may hereafter be amended from
time to time (collectively, the “Loan
Documents”) are intended to be performed in accordance with, and
only to the extent permitted by, all applicable usury laws. If any provision
hereof or of any of the other Loan Documents or the application thereof to any
person or circumstance shall, for any reason and to any extent, be invalid or
unenforceable, neither the application of such provision to any other person or
circumstance nor the remainder of the instrument in which such provision is
contained shall be affected thereby and shall be enforced to the greatest
extent permitted by law. It is expressly stipulated and agreed to be the intent
of the holder hereof to at all times comply with the usury and other applicable
laws now or hereafter governing the interest payable on the indebtedness
evidenced by this Note. If the applicable law is ever revised, repealed or
judicially interpreted so as to render usurious any amount called for under
this Note or under any of the other Loan Documents, or contracted for, charged,
taken, reserved or received with respect to the indebtedness evidenced by this
Note, or if Bank’s exercise of the option to accelerate the maturity of this
Note, or if any prepayment by the undersigned or prepayment agreement results
(or would, if complied with, result) in the undersigned having paid, contracted
for or being charged for any interest in excess of that permitted by law, then
it is the express intent of the undersigned and Bank that this Note and the
other Loan Documents shall be limited to the extent necessary to prevent such
result and all excess amounts theretofore collected by Bank shall be credited
on the principal balance of this Note or, if fully paid, upon such other
Indebtedness as shall then remaining outstanding (or, if this Note and all
other Indebtedness have been paid in full, refunded to the undersigned), and
the provisions of this Note and the other Loan Documents shall immediately be
deemed reformed and the amounts thereafter collectable hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder or thereunder. All sums paid, or
agreed to be paid, by the undersigned for the use, forbearance, detention,
taking, charging, receiving or reserving of the indebtedness of the undersigned
to Bank under this Note or arising under or pursuant to the other Loan
Documents shall, to the maximum extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such
indebtedness until payment in full so that the rate or amount of interest on
account of such indebtedness does not exceed the usury ceiling from time to
time in effect and applicable to such indebtedness for so long as such
indebtedness is outstanding. To the extent federal law permits Bank to contract
for, charge or receive a greater amount of interest, Bank will rely on federal
law instead of the Texas Finance Code, as supplemented by Texas Credit Title,
for the purpose of determining the Maximum Rate. Additionally, to the maximum
extent permitted by applicable law now or hereafter in effect, Bank may, at its
option and from time to time, implement any other method of computing the
Maximum Rate under the Texas Finance Code, as supplemented by Texas Credit
Title, or under other applicable law, by giving notice, if required, to the
undersigned as provided by applicable law now or hereafter in effect.
Notwithstanding anything to the contrary contained herein or in any of the
other Loan Documents, it is not the intention of Bank to accelerate the
maturity of any interest that has not accrued at the time of such acceleration
or to collect unearned interest at the time of such acceleration.

 

THE
UNDERSIGNED AND BANK, BY ACCEPTANCE OF THIS NOTE, ACKNOWLEDGE THAT THE RIGHT TO
TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY,
AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF
THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVES
ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF

 

8

 

LITIGATION
REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS
NOTE OR THE INDEBTEDNESS.

 

THIS
WRITTEN LOAN AGREEMENT (AS DEFINED BY SECTION 26.02 OF THE TEXAS BUSINESS AND
COMMERCE CODE) REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.

 

This Note is intended to
and does completely amend and restate in its entirety that certain promissory
note from the undersigned payable to the order of Bank in the original
principal amount of $27,664,000.00 dated April 15, 2005 (the “Original Note”) and is intended as and is a
replacement of, and is in substitution for the Original Note, but is not
intended as a novation of the Original Note or any of the obligations evidenced
by the Original Note. The indebtedness evidenced by this Note is in renewal,
extension and modification, but not in extinguishment or novation, of the
indebtedness evidenced by the Original Note. The Original Note is being
retained by Bank with a notation placed on the face thereof indicating that
such Original Note has been amended and restated by this Note.

 

 

	
  

  	
  FRISCO SQUARE LAND,
  LTD.

  a Texas limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Fairways FS Land, LLC,

  a Texas limited liability company

  its General Partner

  
	
   

  
	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James C. Leslie

  
	
   

  	
   

  	
   

  	
  James C. Leslie,
  Manager

  
					

 

 

	
  16250 DALLAS PARKWAY, SUITE 102

  	
   

  	
  DALLAS

  	
   

  	
  TEXAS

  	
   

  	
  75248

  
	
  STREET ADDRESS

  	
   

  	
  CITY

  	
   

  	
  STATE

  	
   

  	
  ZIP CODE

  

 

 

	
  For Bank Use Only

  	
   

  	
  CCAR #

  
	
  LOAN OFFICER INITIALS

  	
   

  	
  LOAN GROUP NAME

  	
   

  	
  OBLIGOR NAME

  	
   

  	
   

  	
   

  	
   

  
	
  LOAN OFFICER ID. NO.

  	
   

  	
  LOAN GROUP NO.

  	
   

  	
  OBLIGOR NO.

  	
   

  	
  NOTE N

  	
   

  	
  AMOUNT

  

 

9Exhibit
10.98

 

	
  [GRAPHIC]

  	
   

  	
  Amended
  and Restated Deed of Trust, Security Agreement and Assignment of Rents

  

 

 

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

 

THIS DEED OF
TRUST, SECURITY AGREEMENT AND ASSIGNMENT OF RENTS is executed effective as of,
although not necessarily on, the 10th day of March, 2006 by FRISCO SQUARE LAND, LTD., a Texas limited
partnership (“Grantor”),
whose address for notice hereunder is 16250 Dallas Parkway, Suite 102, Dallas,
Texas 75248, to Melinda A. Chausse of Dallas County, Texas, as Trustee, for the
benefit of COMERICA BANK (“Bank”), whose address for notice
hereunder is at P.O. Box 650282, Dallas, Texas 75265-0282, Attention Commercial
Lending Services, Mail Code 6514, as follows:

 

RECITALS:

 

A.                     Grantor
and Bank are parties to that certain Loan Agreement dated April 15, 2005 with
respect to a $27,664,000.00 loan from Lender to Borrower (the “Original Loan Agreement”), which
Original Loan Agreement was secured by, among other things, a certain Deed of
Trust, Security Agreement and Assignment of Rents dated effective as of April
15, 2005 executed by and between Grantor and Bank recorded in Volume 05899,
Page 02548 of the real property records of Collin County, Texas (the “Original Deed of Trust”).

 

B.                       Grantor
and Bank are entering into a certain Amended and Restated Loan Agreement of
even date herewith, amending and restating the Original Loan Agreement to
reduce the original loan made under the Original Loan Agreement from
$27,664,000.00 to $26,664,000.00 and to add a revolving line of credit in the
amount of $2,000,000.00.

 

NOW, THEREFORE, in
consideration of the premises and other good and valuable consideration, the
sufficiency of which is hereby acknowledged, Grantor and Bank agree that the
Original Deed of Trust is hereby amended and restated in its entirety as
follows:

 

A.                       DEFINITIONS.

 

The following terms shall
have the defined meaning ascribed to such terms, as set forth below:

 

1.                         “BANK” or “BENEFICIARY”
shall mean COMERICA BANK, as well
as any subsequent holder or holders of the Note (as defined below).

 

2.                         “CODE” shall mean the Texas Business and
Commerce Code, as now written or as hereafter amended, revised or replaced from
time to time.

 

1

 

3.                         “CONTRACTS” shall mean any and all (a)
contracts for the sale of all or any portion of the Property, whether such
Contracts are now or at any time hereafter existing, and together with all
payments, earnings, income, and profits arising from sale of all or any portion
of the Property (defined below) or from the Contracts, and all other sums due
or to become due under and pursuant thereto; (b) contracts, licenses, permits,
and rights relating to utility services whether executed, granted, or issued by
a private person or entity or a governmental or quasi-governmental agency,
which are directly or indirectly related to, or connected with, the Property,
but only to the extent the same affect the Land and only to the extent the same
are assignable; (c) all other contracts, licenses, permits and rights which in
any way relate to the use, enjoyment, occupancy, operation, maintenance, or
ownership of the Property (including, if applicable, any and all leases,
subleases or other agreements pursuant to which Grantor is granted a possessory
interest in or the right to possess, use or enjoy any of the Property),
including but not limited to restrictive covenants, easements, condominium
documents, planned development documents, maintenance agreements, and service
contracts but only to the extent the same affect the Land and only to the
extent the same are assignable; and (d) all renewals, extensions, amendments
and other modifications with respect to any of the foregoing.

 

4.                         “DEED OF TRUST” shall mean this Amended and
Restated Deed of Trust, Security Agreement and Assignment of Rents and all
renewals, extensions, amendments and other modifications hereto.

 

5.                         “EVENT OF DEFAULT” shall have the meaning
set forth in Section D hereof.

 

6.                         “FIXTURES” shall mean all materials,
supplies, equipment, apparatus and other items now or hereafter attached to or
installed in connection with any of the Improvements (as defined below) or the
Land (as defined below), and all renewals, replacements, and substitutions
thereof and additions thereto, all of which property are hereby declared to be
permanent accessions to the Land.

 

7.                         “GOVERNMENTAL AUTHORITY” shall mean any and
all governmental or quasi-governmental entities or instrumentalities of each
and every nature whatsoever, whether federal, state, county, district, city or
otherwise, and whether now or hereafter in existence.

 

8.                         “GOVERNMENTAL REQUIREMENTS” shall mean all
laws, ordinances, statutes, codes, rules, regulations, orders, decrees,
judicial decisions, rulings, permits or certificates of each Governmental
Authority exercising jurisdiction over Grantor or the Property and including,
without limitation, all laws, codes, ordinances, rules, regulations, orders,
decrees and directives pertaining to Hazardous Materials or otherwise intended
to regulate or improve health, safety or the environment.

 

9.                         “GRANTOR” shall mean the party or parties,
whether one or more, who execute this Deed of Trust and who are identified as
such in the initial paragraph of this

 

2

 

Deed of Trust, as well as
the successors, assigns, heirs and legal representatives of such party or
parties.

 

10.                   “GUARANTOR” shall have the meaning set forth
in the Loan Agreement.

 

11.                   “HAZARDOUS MATERIALS” shall mean (a) any “hazardous
waste” as defined by the Resource Conservation and Recovery Act of 1976 (42
U.S.C. Section 6901 et  seq.), as amended from time to time, and
regulations promulgated thereunder; (b) any “hazardous substance” as defined by
the Comprehensive Environmental Response, Compensation and Liability Act of
1980 (42 U.S.C. Section 9601 et  seq.) (“CERCLA”), as
amended from time to time, and regulations promulgated thereunder; (c)
asbestos; (d) polychlorinated biphenyls; (e) any substance the presence of
which on the Property is prohibited by any Governmental Requirement; (f) any
petroleum or petroleum-based products; (g) underground storage tanks; (h)
flammable explosives; (i) radioactive materials; (j) toxic materials; and (k)
any other substance which by any Governmental Requirement requires special
handling or notification of any Governmental Authority in its use, collection,
storage, treatment, or disposal or is otherwise deemed to be a hazardous, toxic
or dangerous waste, substance or material under any Governmental Requirement.

 

12.                   “HAZARDOUS MATERIALS CONTAMINATION” shall
mean the contamination (whether presently existing or hereafter occurring) of
the Property or any facilities, soil, groundwater, air or other elements on or
of the Property by Hazardous Materials, or the contamination of any other
property or the buildings, facilities, soil, groundwater, air or other elements
on or of any other property as a result of Hazardous Materials at any time
(whether before or after the date of this Deed of Trust) emanating from the
Property.

 

13.                   “IMPOSITIONS” shall mean all rates and
charges (including deposits) for: insurance; taxes (both realty and
personalty); water, gas, sewer, electricity, telephone and other utilities;
easements, licenses, agreements and other Contracts maintained for the benefit
of the Property; and all other charges (and any interest, costs or penalties
with respect thereto) of each and every nature whatsoever which may now or
hereafter be assessed, levied or imposed upon the Property or the Rents (as
defined below) or the ownership, use, occupancy or enjoyment thereof.

 

14.                   “IMPROVEMENTS” shall mean any and all
buildings, parking areas and other improvements, and any and all additions,
alterations, or appurtenances thereto, now or at any time hereafter placed or
constructed upon the Land or any part thereof.

 

15.                   “INDEBTEDNESS” shall mean all loans,
advances, indebtedness, obligations and liabilities of Grantor or any other
Loan Party to Bank under this Deed of Trust, the Note (as defined below) or any
other Loan Document (as defined below), together with all other indebtedness,
obligations and liabilities whatsoever of Grantor to Bank, whether matured or
unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, joint or several, due or to become due,

 

3

 

now existing or hereafter
arising, voluntary or involuntary, known or unknown, or originally payable to
Bank or to a third party and subsequently acquired by Bank including, without
limitation, any: late charges; loan fees or charges; overdraft indebtedness;
costs incurred by Bank in establishing, determining, continuing, or defending
the validity or priority of any security interest, pledge or other Lien or in
pursuing any of its right or remedies under any Loan Document or in connection
with any proceeding involving Bank as a result of any financial accommodation
to Grantor; debts, obligations and liabilities for which Grantor would
otherwise be liable to Bank were it not for the invalidity or unenforceability
of them by reason of any bankruptcy, insolvency or other law or for any other
reason; and reasonable costs and expenses of attorneys and paralegals, whether
inside or outside counsel is used, and whether any suit or other action is
instituted, and whether any such fees, costs or expenses are incurred at the
trial court level or on appeal, in bankruptcy, in administrative proceedings,
in probate proceedings or otherwise; provided, however, that the term
Indebtedness shall not include any consumer loan to the extent treatment of
such loan as part of the Indebtedness would violate any Legal Requirement.

 

16.                   “LAND” shall mean the real estate (or
interest therein) as described in Exhibit “A” attached hereto and
incorporated herein by this reference, all Improvements and Fixtures, and all
rights, titles and interests appurtenant thereto.

 

17.                   “LEASES” shall mean all leases (including,
oil, gas and other mineral leases), master leases, subleases, licenses,
concessions, contracts or other agreements (written or oral, now or hereafter
in effect) which grant a possessory interest in and to, or the right to use,
any portion of the Property, together with all security and other deposits or
payments made in connection therewith and any and all guaranties of leases
related thereto.

 

18.                   “LEGAL REQUIREMENTS” shall mean any and all
of the following that may now or hereafter be applicable to Grantor or the
Property: (a) Governmental Requirements; (b) as applicable, Grantor’s bylaws
and articles of incorporation or regulations and articles of organization, or
certificate of limited partnership, agreement of limited partnership or
partnership agreement, or joint venture agreement or trust agreement or
declaration of trust, or other agreements pertaining to any other form of
Grantor’s business entity; (c) Leases; (d) restrictions of record; and (e)
other written or oral agreements or promises of any nature.

 

19.                   “LIEN” shall mean any interest in any
property, whether real, personal or mixed, securing an indebtedness, obligation
or liability owed to or claimed by any person other than the owner of such
property, whether such indebtedness is based on the common law or any statute
or contract and including, but not limited to, a security interest, pledge,
mortgage, assignment, conditional sale, trust receipt, lease, consignment or
bailment for security purposes.

 

4

 

20.                   “LOAN AGREEMENT” shall mean that certain
Amended and Restated Loan Agreement dated of even date herewith executed by and
between Bank and Grantor.

 

21.                   “LOAN DOCUMENTS” shall mean the Note, the
Loan Agreement, this Deed of Trust and all other instruments, documents or
other writings now or hereafter evidencing, governing, securing, guaranteeing
or otherwise relating to or executed pursuant to or in connection with any of
the Indebtedness or any Loan Document (whether executed and delivered prior to,
concurrently with or subsequent to this Deed of Trust), as such documents may
have been or may hereafter be amended from time to time.

 

22.                   “LOAN PARTY” shall mean Grantor and each
other person who or which shall be liable for the payment or performance of all
or any portion of the Indebtedness or who or which shall own any property that
is subject to (or purported to be subject to) a Lien which secures all or any
portion of the Indebtedness.

 

23.                   “MINERALS” shall mean any and all
substances in, on, or under the Property which are now, or may become in the
future, intrinsically valuable, that is, valuable in themselves, and which now
or may be in the future enjoyed through extraction or removal from the
Property, including without limitation, oil, gas, and all other hydrocarbons,
coal, lignite, carbon dioxide and all other nonhydrocarbon gases, uranium and
all other radioactive substances, and gold, silver, copper, iron and all other
metallic substances or ores, upon extraction or removal from the Property. The
term “Minerals” shall include “oil and gas production” and “as extracted
collateral” as such terms are defined in the Code.

 

24.                   “NOTE” shall mean collectively, whether one
or more, (i) the amended and restated promissory note (the terms of which are
incorporated herein by reference) dated April 15, 2005 (as modified effective
March 10, 2006) executed by Grantor, and payable to the order of Bank, in the
maximum face amount of TWENTY SIX MILLION SIX HUNDRED SIXTY FOUR THOUSAND AND
NO/100 DOLLARS ($26,664,000.00), and all extensions, renewals, increases and
other modifications thereof and all other notes given in substitution therefor,
which shall mature on April 15, 2008 unless renewed or extended or unless prior
demand for payment shall be made thereon or the maturity shall be accelerated
for any reason; and (ii) the promissory note (the terms of which are
incorporated herein by reference) dated effective March 10, 2006 executed
by Grantor, and payable to the order of Bank, in the maximum face amount of TWO
MILLION AND NO/100 DOLLARS ($2,000,000.00), and all extensions, renewals,
increases and other modifications thereof and all other notes given in
substitution therefor, which shall mature on March 10, 2007 unless renewed or
extended or unless prior demand for payment shall be made thereon or the
maturity shall be accelerated for any reason.

 

25.                   “PERSONALTY” shall mean all of the right,
title, and interest of Grantor in and to (a) furniture, furnishings, equipment,
machinery, goods (including, but not limited to, crops, farm products, timber
and timber to be cut and extracted

 

5

 

Minerals); (b) general
intangibles, money, insurance proceeds, accounts, chattel paper (including
without limit electronic chattel paper and tangible chattel paper), rights to
payment evidenced by chattel paper, documents or instruments, health care
insurance receivables, commercial tort claims, letters of credit, letter of
credit rights, supporting obligations, and rights to payment for money or funds
advanced or sold, contract and subcontract rights, trademarks, trade names,
inventory; (c) all refundable, returnable, or reimbursable fees, deposits or
other funds or evidences of credit or indebtedness deposited by or on behalf of
Grantor (or otherwise existing for Grantor’s benefit) with any governmental
agencies, boards, corporations, providers of utility services (public or
private) or other person(s) including specifically, but without limitation, all
refundable, returnable, or reimbursable tap fees, utility deposits, commitment
fees and development costs, any awards, remunerations, reimbursements,
settlements, or compensation heretofore made or hereafter to be made by any
Governmental Authority pertaining to the Land, Fixtures, Contracts, or
Personalty, including but not limited to those for any vacation of, or change
of grade in, any streets affecting the Land and those for municipal utility
district or other utility costs incurred or deposits made in connection with
the Property; (d) all software (for purposes of this Deed of Trust “software”
consists of all (i) computer programs and supporting information provided in
connection with a transaction relating to the program, and (ii) computer
programs embedded in goods and any supporting information provided in
connection with a transaction relating to the program whether or not the
program is associated with the goods in such a manner that it customarily is
considered part of the goods, and whether or not, by becoming the owner of the
goods, a person acquires a right to use the program in connection with the
goods, and whether or not the program is embedded in goods that consist solely
of the medium in which the program is embedded), and (e) all other personal
property of any kind or character as defined in and subject to the provisions
of the Code (Article 9  - Secured Transactions); any or
all of which are now owned or hereafter acquired by Grantor, and which are now
or hereafter situated in, on, or about the Property, or used in or necessary or
desirable to the complete and proper planning, development, construction,
financing, use, occupancy, or operation thereof, or acquired (whether delivered
to the Land or stored elsewhere) for use in or on the Property, together with
all accessions, replacements, and substitutions thereto or therefor and the
proceeds thereof.

 

26.                   “PROPERTY” shall mean the Land, Minerals,
Improvements, Fixtures, Personalty, Contracts, Leases and Rents, together with
all or any part of, and any interest in, the following: (a) rights, privileges,
tenements, hereditaments, rights-of-way, easements, licenses, appendages, and
appurtenances in any way pertaining thereto, and rights, titles, and interests
of Grantor in and to any streets, ways, alleys, strips of land adjoining the
Land or any part thereof; (b) additions, substitutions, replacements and
revisions thereof and thereto and all reversions and remainders therein; and
(c) other security and collateral of any nature whatsoever, now or hereafter
given for the repayment or performance of the Indebtedness. In the definition
of Property, a reference to a type of collateral shall not be limited by a
separate reference to a more specific or narrower type of that collateral.

 

6

 

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

 

28.                   “TRUSTEE” shall mean MELINDA A. CHAUSSEE,
Trustee, and her substitutes, successors and assigns.

 

B.                       GRANT.

 

To secure the full and
timely payment and performance of the Indebtedness, and in consideration of the
sum of Ten Dollars ($10.00) and other valuable consideration in hand paid by Beneficiary
to Grantor, the receipt and legal sufficiency of which is hereby acknowledged,
Grantor has GRANTED, BARGAINED, ASSIGNED, SOLD and CONVEYED, and by these
presents does GRANT, BARGAIN, ASSIGN, SELL and CONVEY, unto Trustee the
Property in trust hereunder, for the use and benefit of Beneficiary, TO HAVE
AND TO HOLD the Property unto Trustee forever. It is specifically contemplated
by Grantor and Beneficiary that the Indebtedness secured hereby may be advanced
in subsequent intervals and at periodic times pursuant to the Loan Agreement.
Grantor and each person who, at any time, may claim an interest in or Lien or
encumbrance against all or any portion of the Property agree that all
Indebtedness shall be secured by this Deed of Trust with the same priority as
if all had been advanced, had arisen or had become owing or performable on the
date of this Deed of Trust. This Deed of Trust shall remain in full force and
effect as to all future Indebtedness and to all subsequent advances or
subsequently arising portions of the Indebtedness without loss of priority
until (a) the Indebtedness is fully and finally paid, performed and satisfied,
and (b) all agreements and obligations, if any, of Bank for further advances or
for the extension of additional credit have been terminated (including, without
limitation, any loans made by Bank to Grantor even if advances or loans
thereunder shall be optional or non-obligatory), and (c) this Deed of Trust has
been released of record by Beneficiary. WITHOUT
LIMITING THE FOREGOING, GRANTOR ACKNOWLEDGES AND AGREES THAT THIS DEED OF TRUST
SECURES, AMONG OTHER THINGS, FUTURE ADVANCES, AND GRANTOR, AND EACH PERSON WHO,
AT ANY TIME, CLAIMS AN INTEREST IN OR LIEN OR ENCUMBRANCE AGAINST ALL OR ANY
PORTION OF THE PROPERTY, AGREES THAT ALL ADVANCES MADE BY BANK FROM TIME TO
TIME UNDER ANY OF THE LOAN DOCUMENTS AND ALL OTHER PORTIONS OF THE INDEBTEDNESS
SHALL BE SECURED BY THIS DEED OF TRUST WITH THE SAME PRIORITY AS IF ALL OF THE
SAME HAD BEEN ADVANCED, HAD ARISEN OR HAD BECOME OWING OR PERFORMABLE ON THE
DATE OF THIS DEED OF TRUST, AND NO REDUCTION OF THE OUTSTANDING PRINCIPAL
BALANCE UNDER THE NOTE OR ANY OTHER LOAN DOCUMENT SHALL EXTINGUISH, RELEASE OR
SUBORDINATE ANY RIGHT, TITLE, INTEREST, LIEN, POWER OR PRIVILEGE CREATED OR
ARISING HEREUNDER OR UNDER ANY OTHER LOAN DOCUMENT.

 

7

 

C.                       WARRANTIES,
REPRESENTATIONS, COVENANTS AND OTHER AGREEMENTS.

 

Grantor unconditionally
warrants, represents, covenants and agrees that:

 

1.                         The
Indebtedness is legal, valid and binding on Grantor and, to the extent provided
in the Loan Documents, on each other Loan Party, in accordance with its terms,
and the execution and delivery of, and performance under, the Loan Documents to
which Grantor is a party or by which Grantor or any of Grantor’s property is
(or is purported to be) bound: (a) are within Grantor’s powers and have been
duly authorized by all requisite action (corporate, partnership, trust or
otherwise); (b) have received all requisite approval by all Governmental
Authorities; and (c) will not violate, conflict with, breach or constitute a
default under, any Legal Requirement or result in the imposition of any Lien,
charge or encumbrance of any nature upon any of Grantor’s assets, except as
contemplated in the Loan Documents.

 

2.                         Grantor
has good and indefeasible title to the Land, Improvements, Fixtures and
Personalty, free and clear of any Liens, encumbrances or adverse claims (except
as listed in Exhibit “B” attached hereto). This Deed of Trust shall constitute
a valid, subsisting, first Lien on the Land, Improvements and Fixtures and a
valid, subsisting, exclusive, perfected and prior security interest in and to
the Personalty and Leases, all in accordance with the terms hereof. Beneficiary
shall have the right at its option and at such time or times as it, in its sole
discretion, deems necessary or desirable, to take whatever action it may deem
necessary or desirable to defend or uphold the Lien of this Deed of Trust or
otherwise enforce any of its rights under this Deed of Trust or any obligations
secured by this Deed of Trust including, without limit, the right to institute
appropriate legal proceedings for these purposes. With respect to the right,
title, or Lien of any person which is superior to any Lien of this Deed of
Trust, Beneficiary has the right, but not the obligation, to acquire and/or pay
off the holder of such right, title or Lien and add the amount paid to the
Indebtedness.

 

3.                         The
Property forms no part of any property owned, used or claimed by Grantor as a
residence or business homestead, is not exempt from forced sale under the laws
of the State of Texas, and Grantor hereby disclaims and renounces all and every
claim to the Property as a homestead.

 

4.                         Grantor
and each Loan Party are now solvent, and no bankruptcy or insolvency
proceedings are pending or contemplated by or against any of them, and all
reports, statements, cost estimates and other data, furnished by or on behalf
of any of them are true and correct.

 

5.                         Grantor
will promptly and fully comply with all present and future Legal Requirements,
and all Improvements included or to be included in the Property comply and will
comply with all Legal Requirements.

 

6.                         Grantor
is validly and legally created and is authorized to do business in the State of
Texas; Grantor’s exact name is the name set forth in this Deed of Trust; and
Grantor is, and at all times shall be, located in the State of Texas at the
following place: 16250 Dallas Parkway, Suite 102, Dallas, Texas 75248.

 

8

 

7.                         Grantor
and all Loan Parties, as their interests appear and as stipulated in the Loan
Documents, will duly and punctually pay and perform the Indebtedness, as and
when called for in the Loan Documents, and Grantor will duly and punctually
cause each of the Impositions to be paid and discharged not later than the due
dates thereof and shall immediately furnish Beneficiary with evidence of such
payments.

 

8.                         Grantor
will cause the Property to be maintained and operated in first-class order and
condition.

 

9.                         Grantor
shall obtain and maintain at Grantor’s sole expense: (a) mortgagee title
insurance issued to Beneficiary covering the Land, Improvements and Fixtures as
required by Beneficiary; (b) all-risk insurance with respect to all insurable
Property, against loss or damage by fire, lightening, windstorm, explosion,
hail, tornado and such hazards as are presently included in so-called “all-risk”
coverage and against such other insurable hazards as Beneficiary may require,
in an amount not less than 100% of the full replacement cost, including the
cost of debris removal, without deduction for depreciation and sufficient to
prevent Grantor or Beneficiary from becoming a coinsurer, such insurance to be
in “Builder’s Risk” (non-reporting) form during and with respect to any
construction on the Property; (c) if and to the extent any portion of the
Property is in a special flood hazard area, a flood insurance policy in an
amount equal to the lesser of the principal balance of the Indebtedness or the
maximum amount available; (d) comprehensive general public liability insurance,
on an “occurrence” basis, for the benefit of Grantor and Beneficiary as named
insureds; (e) statutory worker’s compensation insurance with respect to any
work on or about the Property; and (e) such other insurance on the Property as
may from time to time be required by Beneficiary (including but not limited to
business interruption insurance, loss of rents insurance, boiler and machinery
insurance, earthquake insurance, and war risk insurance) and against other
insurable hazards or casualties which at the time are commonly insured against
in the case of premises similarly situated, due regard being given to the
height, type, construction, location, use and occupancy of buildings and
improvements. All insurance policies shall be issued and maintained by
insurers, in amounts, with deductibles, and in form satisfactory to
Beneficiary, and shall require not less than thirty (30) days’ prior written
notice to Beneficiary of any cancellation or change of coverage. All insurance
policies maintained, or caused to be maintained, by Grantor with respect to the
Property, except for public liability insurance, shall provide that each such
policy shall be primary without right of contribution from any other insurance
that may be carried by Grantor or Beneficiary and that all of the provisions
thereof, except the limits of liability, shall operate in the same manner as if
there were a separate policy covering each insured. If any insurer which has
issued a policy of title, hazard, liability or other insurance required
pursuant to this Deed of Trust or any other Loan Document becomes insolvent or
the subject of any bankruptcy, receivership or similar proceeding or if Beneficiary,
in good faith, believes that the financial responsibility of such insurer is or
becomes inadequate, Grantor shall, in each instance, promptly, upon the request
of Beneficiary and at Grantor’s expense, obtain and deliver to Beneficiary a
like policy (or, if and to the extent

 

9

 

permitted by Beneficiary,
a certificate of insurance) issued by another insurer, which insurer and policy
meet the requirements of this Deed of Trust or such other Loan Document, as the
case may be. Without limiting the discretion of Beneficiary with respect to
required endorsements to insurance policies, all such policies for loss of or
damage to the Mortgaged Property shall contain a standard mortgage clause
(without contribution) naming Beneficiary as mortgagee with loss proceeds
payable to Beneficiary notwithstanding (i) any act, failure to act or
negligence of or violation of any warranty, declaration or condition contained
in any such policy by any named insured; (ii) the occupation or use of the
Mortgaged Property for purposes more hazardous than permitted by the terms of
any such policy; (iii) any foreclosure or other action by Beneficiary under the
Loan Documents; or (iv) any change in title to or ownership of the Mortgaged
Property or any portion thereof, such proceeds to be held for application as
provided in the Loan Documents. The originals of each initial insurance policy
(or to the extent permitted by Beneficiary, a copy of the original policy and a
satisfactory certificate of insurance) shall be delivered to Beneficiary at the
time of execution of this Deed of Trust, with premiums fully paid, and each
renewal or substitute policy (or certificate) shall be delivered to
Beneficiary, with premiums fully paid, at least ten (10) days before the
termination of the policy it renews or replaces. Grantor shall pay all premiums
on policies required hereunder as they become due and payable and promptly
deliver to Beneficiary evidence satisfactory to Beneficiary of the timely payment
thereof. If any loss occurs at any time when Grantor has failed to perform
Grantor’s covenants and agreements in this Paragraph, Beneficiary shall
nevertheless be entitled to the benefit of all insurance covering the loss and
held by or for Grantor, to the same extent as if it had been made payable to
Beneficiary. Upon any foreclosure hereof or transfer of title to the Property
in extinguishment of the whole or any part of the Indebtedness, all of Grantor’s
right, title and interest in and to the insurance policies referred to in this
Paragraph (including unearned premiums) and all proceeds payable thereunder
shall thereupon vest in the purchaser at foreclosure or other such transferee,
to the extent permissible under such policies. Beneficiary shall have the right
(but not the obligation) to make proof of loss for, settle and adjust any claim
under, and receive the proceeds of, all insurance for loss of or damage to the
Property, and the expenses incurred by Beneficiary in the adjustment and
collection of insurance proceeds shall be a part of the Indebtedness, shall be
due and payable to Beneficiary on demand and shall bear interest from the date
paid by Beneficiary until reimbursed at the highest rate of interest applicable
to any of the Indebtedness (but not in excess of the highest rate permitted by
applicable law). Beneficiary and Beneficiary’s employees are each irrevocably
appointed attorney-in-fact for Grantor and are authorized to adjust and
compromise each loss without the consent of Beneficiary, to collect, receive
and receipt for all insurance proceeds in the name of Beneficiary and/or
Grantor, and to endorse Grantor’s name upon any check in payment of the loss.
Beneficiary shall not be, under any circumstances, liable or responsible for
failure to collect or exercise diligence in the collection of any of such
proceeds or for the obtaining, maintaining or adequacy of any insurance or for
failure to see to the proper application of any amount paid over to Grantor.

 

10

 

10.                   Upon request
from time to time and at any time, Grantor will deposit with Beneficiary each
month in advance a monetary sum estimated by Beneficiary to equal on a monthly
basis all or such portion of the ad valorem taxes, other Impositions and
insurance premiums for the Property. At least thirty (30) days prior to the
date on which any tax, Imposition or insurance premium must be paid to prevent
delinquency thereof, Grantor will, on request of Beneficiary, deliver to
Beneficiary the statement or statements showing the amount of tax or premium
required to be paid and the concern or authority to which same is payable and
will, at the same time, deposit with Beneficiary such amount as will, when
added to the amount of such deposits previously made and then remaining
available for the purpose, be sufficient to pay such insurance or tax
obligations. Beneficiary shall then make payment to the applicable taxing
authority, insurance carrier or other person. After the occurrence of an Event
of Default, Beneficiary shall have the right (but not the obligation), at its
sole discretion, to apply any or all of the foregoing deposits in payment of
such insurance, taxes and other Impositions or toward payment of the
Indebtedness in such manner and order of priority as Beneficiary, in its sole
discretion, may elect. Beneficiary shall not be required to keep in a separate
account or to pay to Grantor any interest or earnings whatever on the funds
held by Beneficiary for the payment of taxes, other Impositions or insurance
pursuant to this Paragraph or on any other funds deposited with Beneficiary in
connection with this Deed of Trust.

 

11.                   Grantor will:
(a) duly and punctually perform and comply with all representations,
warranties, covenants and agreements binding upon it under the Leases and
Contracts; (b) not voluntarily terminate or waive its rights under any of the
Leases or Contracts; (c) use all reasonable efforts to maintain each of the
Leases and Contracts in force and effect during the full term thereof, and (d)
appear in and defend any action or proceeding in any manner connected with any
of the Leases or Contracts.

 

12.                   Grantor will
permit Trustee or Beneficiary, and their agents, attorneys, representatives and
employees, to enter upon and inspect the Property at all reasonable times and
intervals. If Beneficiary determines that the Property requires inspection,
testing, appraisal, repair, care, alteration or attention of any kind,
Beneficiary or its representatives may (but shall not be obligated to) enter
upon the Property and inspect, test, appraise, repair, alter or maintain the
Property as Beneficiary may deem necessary or desirable, and Grantor shall
reimburse Beneficiary upon demand for all resulting costs and expenses incurred
by Beneficiary. Any inspection, audit, appraisal or examination by Beneficiary
or its representatives of the Property or of information or documents
pertaining to the Property is for the sole purpose of protecting Beneficiary’s
interests under this Deed of Trust and is not for the benefit or protection of
Grantor or any third party. Beneficiary has no obligation to provide Grantor or
any third party with information concerning, or results of, any inspection,
audit, appraisal or examination by Beneficiary or its representatives. If
Beneficiary, in its sole discretion, discloses information to Grantor, this
disclosure is for the sole protection of Beneficiary, does not constitute an
agreement to further disclosure

 

11

 

and does not create a
representation or warranty by Beneficiary as to the accuracy, sufficiency or
any other aspect of disclosure.

 

13.                   Grantor will
defend and hold Beneficiary harmless from any action, proceeding or claim
affecting the Property or the Loan Documents or the Liens created thereby.
Further, Grantor will notify Beneficiary, in writing, promptly of the
commencement of any legal proceedings affecting the Property, or any part
thereof, and will take such action as necessary to preserve Beneficiary’s rights
affected thereby, and Beneficiary may, at its election, take such action on
behalf of and in the name of Grantor and at Grantor’s expense.

 

14.                   Grantor will
promptly pay all debts and liabilities of each and every character (including,
without limitation, all debts and liabilities for labor, material and
equipment) incurred in the construction, operation or development of the
Property and will complete in a good and workmanlike manner any Improvements
that may be constructed or repaired thereon.

 

15.                   Grantor will
keep separate and proper books of record and account pertaining to the Property
in accordance with generally accepted accounting principles and practices and
set aside from its earnings for each fiscal year, and cause to be reflected in
its books, reserves for depreciation, depletion, obsolescence and amortization
of the Property, as well as for the Impositions and other appropriate reserves,
during such fiscal year determined in accordance with generally accepted
accounting principles and practices consistently applied. Beneficiary shall
have the right to examine the books of account of Grantor and to discuss the
affairs, finances and accounts of Grantor with, and to be informed as to the
same by, its and their officers or any other party, all at such reasonable
times and intervals as Beneficiary may desire. Grantor shall provide or cause
to be provided to Beneficiary such financial statements, income and expense
statements, cash flow statements, copies of income tax returns, operating
statements, rent rolls and other reports, statements and information relating
to Grantor or the Property as Beneficiary shall require, from time to time, and
in the format and containing such detail as Beneficiary may require. All
financial statements and information regarding Grantor or the Property
delivered to Beneficiary shall be true and correct in all material respects and
fairly present the financial condition of Grantor and the Property as of the
date thereof. No additional borrowings shall have been made or committed to by
Grantor since the date thereof other than those disclosed in a supplemental
writing accompanying such financial statement.

 

16.                   Upon request
from time to time and at any time, Grantor will promptly correct any defect,
error or omission, which may be discovered in the contents of this Deed of
Trust or the Loan Documents and will execute and deliver any and all additional
instruments as may be requested by Beneficiary to correct such defect, error or
omission or to identify any additional properties which are or become subject
to this Deed of Trust.

 

17.                   Grantor will
give immediate written notice to Beneficiary of any condemnation proceeding or
casualty loss affecting the Property and, in each such instance,

 

12

 

afford Beneficiary an
opportunity to participate in any such proceeding or in the settlement of any
awards thereunder.

 

18.                   Grantor will
promptly pay and hold Beneficiary harmless from all appraisal fees, recording
fees, taxes, abstract fees, title policy fees, escrow fees, attorneys’ fees,
and all other costs of every character incurred by Grantor or Beneficiary in
connection with the closing of the loan evidenced by the Note or the
performance of the covenants of this Deed of Trust or any other Loan Document
to which Grantor is a party or the Property is or is purported to be bound, or
otherwise attributable or chargeable to Grantor as owner of the Property.

 

19.                   Grantor will
not use or occupy, or permit any use or occupancy of, the Property in any
manner which: (a) violates any Legal Requirement; (b) may be dangerous; (c)
constitutes a public or private nuisance; or (d) makes void or voidable any of
the Leases or any insurance on the Property.

 

20.                   Grantor will
not permit: (a) any waste or deterioration of any part of the Property
(including, without limitation, any failure to repair and maintain the
Property, pay property taxes or other Impositions or comply with covenants
respecting the physical care, maintenance, construction, demolition or
insurance of the Property); or (b) any alterations or additions or improvements
to the Property of a material nature regardless of whether the alterations,
additions or improvements would increase the value of the Property, without
Beneficiary’s prior written consent. This consent may be withheld by
Beneficiary in its sole discretion. If Beneficiary consents to the making of
any alterations, additions or improvements, and the same are not completed with
due diligence in accordance with the plans and specifications approved in
writing by Beneficiary, or if construction of the alterations, additions or
improvements should cease before completion for a period of 30 days, then and
in either event, it shall be an Event of Default under this Deed of Trust, and
Beneficiary shall have all the rights and remedies provided in this Deed of
Trust, including without limitation, the right (but not the obligation) to
enter or cause entry to be made upon the Property and complete the alterations,
additions or improvements, and the costs shall be added to the Indebtedness,
shall be payable on demand, and shall bear interest from the date paid by
Beneficiary until reimbursed at the highest interest rate per annum applicable
to any of the Indebtedness, but not in excess of the highest rate permitted by
applicable law. Further, if any action is threatened or commenced which affects
Beneficiary’s interest in the Property including, without limit, building,
environmental or zoning proceedings, Beneficiary may take such action as it
deems necessary or desirable to protect its interests, and its costs shall be
added to the Indebtedness, shall be payable on demand and shall bear interest
from the date paid by Beneficiary until repaid at the highest per annum
interest rate applicable to any of the Indebtedness, but not to exceed the
highest rate permitted by applicable law. Grantor further covenants and agrees
that it will not permit any of the Fixtures or Personalty to be removed at any
time from the Land or Improvements unless the removed item is removed
temporarily for maintenance and repair or, if removed permanently, is replaced
by an article of at

 

13

 

least equal suitability
and value and owned by Grantor free and clear of any other Lien.

 

21.                   Grantor will
not, without the prior written consent of Beneficiary: (a) create, place or
permit to be created or placed, or allow to remain, any mortgage, pledge,
encumbrance or charge, conditional sale or other title retention agreement or
other Lien, regardless of whether same are expressly subordinate to the Liens
of the Loan Documents, with respect to the Property or the Leases; (b) permit
any person, other than Beneficiary to have possession or control (as defined in
the Code) of any Property of such nature that perfection of a security interest
may be accomplished by control; or (c) sell, lease, exchange, assign, convey,
transfer possession of or otherwise dispose of all or any portion of the
Property, or any interest therein, but if ownership of the Property or any part
thereof or interest therein becomes vested in any person or entity other than
Grantor, Beneficiary or any other holder of the Indebtedness may, without
notice to Grantor, deal with such successor or successors in interest with
reference to this Deed of Trust and the Indebtedness in the same manner as with
Grantor without in any way discharging Grantor or any Loan Party from the
Indebtedness. Without limiting the right of Beneficiary to withhold its consent
or to make other requirements prior to granting its consent, Beneficiary: (i)
may require evidence satisfactory to Beneficiary that transferee is
creditworthy and has such management ability as Beneficiary shall deem in its
sole discretion to be necessary; and (ii) may require transferee to execute
such written modification and assumption agreements with regard to the Loan
Documents as Beneficiary shall deem necessary or desirable, including but not
limited to provisions increasing the interest rate on the Note. No transfer of
the Property, no forbearance by Beneficiary, no extension of the time for the
payment or performance of the Indebtedness granted by Beneficiary, no amendment
or other modification of this Deed of Trust or other Loan Document, no release
of any security for or guaranty of any Indebtedness, and no exercise of any
right Beneficiary may have hereunder or under any other Loan Document shall
release, discharge or affect in any way Grantor’s or any other Loan Party’s
liability hereunder or under any other Loan Document. In the event any Lien
shall exist on all or any portion of the Property (no consent by Beneficiary to
the existence of any such Lien shall be implied hereby), it is expressly
understood and agreed that no such lien holder may exercise any rights with
respect to the Property, and all rents and other proceeds from the Property
which may be received by such lien holder shall be held in trust by such lien
holder for the benefit of Beneficiary and shall be immediately paid over to
Beneficiary until the release of this Deed of Trust.

 

22.                   Grantor
represents and covenants that Grantor has not used Hazardous Materials on or
affecting the Property in any manner which violates any Governmental
Requirement and that, except as may be disclosed in that certain Environmental
Site Assessment, prepared by C&E Environmental, LLC dated December 1, 2004
(the “Phase I Report”), a
true and correct copy of which has been provided to Beneficiary, there is no
condition concerning the Property which could require remediation pursuant to
any Governmental Requirement, and that neither Grantor nor, to Grantor’s
knowledge (except as may be disclosed in the 3/05 Phase I

 

14

 

Report), any other person
has ever caused or permitted any Hazardous Materials to be placed, held,
located or disposed of on, under or at the Property or any part thereof in any
manner that violates any Governmental Requirement. No part of the Property is
being used or, to Grantor’s knowledge (except as may be disclosed in the 3/05
Phase I Report), has ever been used for the disposal, storage, treatment,
processing, manufacturing or other handling of Hazardous Materials (other than
Hazardous Materials in de minimis amounts associated with customary and lawful
use of the Property in compliance with all applicable Governmental
Requirements), and no part of the Property is affected by any Hazardous
Materials Contamination. To the best of Grantor’s knowledge(except as may be
disclosed in the 3/05 Phase I Report), no property adjoining the Property is or
has ever been used for the disposal, storage, treatment, processing,
manufacturing or other handling of Hazardous Materials (other than Hazardous
Materials in de minimis amounts associated with customary and lawful use of the
Property in compliance with all applicable Governmental Requirements), and no
other property adjoining the Property is affected by Hazardous Materials
Contamination. To the best of Grantor’s knowledge, no investigation,
administrative order, consent order and agreement, litigation or settlement
with respect to Hazardous Materials or Hazardous Materials Contamination is
proposed, threatened, anticipated or in existence with respect to the Property.
To the best of Grantor’s knowledge (except as may be disclosed in the 3/05
Phase I Report), the Property is not currently on, and has never been on, any
federal or state “Superfund” or “Superlien” list. Notwithstanding that one or
more of the foregoing warranties and representations are “to Grantor’s knowledge”,
the existence at or with respect to the Property of any Hazardous Materials
which is in violation of any Governmental Requirement or Hazardous Materials
Contamination at any time during the term of the Indebtedness shall constitute
an Event of Default hereunder. Grantor covenants and agrees that neither it nor
any occupant of all or any portion of the Property shall use, introduce or
maintain Hazardous Materials on the Property unless done in strict compliance
with all Governmental Requirements. Grantor shall conduct and complete all
investigations, environmental audits, studies, sampling and testing, and all
remedial removal and other actions necessary to clean up and remove all
Hazardous Materials on or affecting the Property, whether caused by Grantor or
a third party, in accordance with all Governmental Requirements to the
satisfaction of Beneficiary and in accordance with the orders and directives of
all Governmental Authorities, and Grantor shall notify Beneficiary in writing
prior to taking, and continually after that of the status of, all such actions.
Grantor shall, promptly upon Beneficiary’s request, provide Beneficiary with
copies of the results of all such actions and all related documents and
information. Any remedial, removal or other action by Grantor shall not be
deemed a cure or waiver of any default under this Deed of Trust or Event of
Default due to the presence or use of Hazardous Materials on or affecting the
Property. Grantor has never received any notice (“Environmental Complaint”) of any potential violation of
any Governmental Requirement with respect to Grantor or the Property (and
within five days of receipt of any Environmental Complaint, Grantor shall give
Beneficiary a copy of it), and to the best of Grantor’s knowledge, there have
been

 

15

 

no actions commenced or
threatened by any party with respect to Grantor or the Property for
noncompliance with any Governmental Requirement. In the event this Deed of
Trust is foreclosed or Grantor tenders a deed in lieu of foreclosure, Grantor
shall deliver the Property to Beneficiary, the purchaser or the grantee, as the
case may be, free of Hazardous Materials so that the condition of the Property
shall not be in violation of any Governmental Requirement.

 

23.                   Grantor will
(a) give notice to Beneficiary immediately upon Grantor’s acquiring knowledge
of the presence of any Hazardous Materials on or affecting the Property (other
than Hazardous Materials in de minimis amounts associated with customary and
lawful use of the Property in compliance with all applicable Legal
Requirements) or of any Hazardous Materials Contamination with a full
description thereof, and (b) promptly comply with all Governmental Requirements
relating to the Property including, without limit, any Hazardous Materials or
Hazardous Materials Contamination affecting the same, and (c) provide
Beneficiary with satisfactory evidence of such compliance.

 

D.                       EVENTS OF DEFAULT.

 

The term “Event of Default” as used in this Deed
of Trust, shall mean the occurrence at any time, and from time to time, of any
one or more of the following:

 

1.                         The
occurrence of an “Event of Default” as defined in the Loan Agreement.

 

2.                         The
issuance or filing of any attachment, levy, garnishment or the commencement of
any proceeding in connection with any of the Property or of any other judicial
process of,  upon or in respect of any of the Property.

 

3.                         Default
under any deed of trust, mortgage, security agreement or other Lien instrument
against all or any portion of the Property after the expiration of any
applicable grace, notice or cure periods provided therein.

 

4.                         The
Property is (a) abandoned or (b) substantially damaged so that in Beneficiary’s
judgment it cannot be restored with available funds to its value and to
approximately the same condition and character that existed immediately prior
to such damage within thirty (30) days after such occurrence.

 

5.                         The
holder of any Lien on any part of the Property (notwithstanding that the
creation of the same may constitute a separate default hereunder) institutes
foreclosure or other proceedings for the enforcement of its remedies.

 

6.                         Any
condemnation proceeding is instituted which would, in Beneficiary’s sole
judgment, materially impair the use or enjoyment of the Property for its
intended purposes and Grantor does not cause such proceeding to be dismissed
within sixty (60) days of filing.

 

E.                         DEFAULT AND FORECLOSURE.

 

To the fullest extent
permitted in equity or at law, by statute or otherwise:

 

16

 

1.                         If an
Event of Default shall occur, Beneficiary may, at Beneficiary’s sole election
and by or through Trustee or otherwise, exercise any or all of the following:

 

(a)                     Declare all
unpaid amounts under the Note and any other unpaid portion of the Indebtedness
immediately due and payable without further notice, presentment, protest,
demand, notice of demand or intent to demand, or notice of acceleration or
intent to accelerate or action of any nature whatsoever (each of which is
hereby expressly waived by Grantor), whereupon the same shall become
immediately due and payable. Subject to Section N, Paragraph 8 of
this Deed of Trust, acceleration of any Indebtedness shall trigger any
applicable pre-payment premium or formula. Without limiting when a pre-payment
premium may be due, it is agreed that, at any time after acceleration, a tender
of payment of the amount necessary to satisfy the entire Indebtedness must
include any applicable pre-payment premium or formula subject, however, to the
terms and provisions of Section N, Paragraph 8 of this Deed of
Trust.

 

(b)                    Enter upon the
Property and take exclusive possession thereof and of all books, records and
accounts relating thereto, and if necessary to obtain such possession,
Beneficiary may invoke any and all legal remedies to dispossess Grantor
including, specifically, one or more actions for forcible entry and detainer,
trespass to try title and writ of restitution.

 

(c)                     Hold, lease,
manage, operate or otherwise use or permit the use of the Property, either itself
or by other persons, in such manner, for such time and upon such other terms as
Beneficiary may deem necessary or desirable under the circumstances (making
such repairs, alterations, additions and improvements thereto and taking such
other action from time to time as Beneficiary shall deem necessary or
desirable) and apply all Rents collected in connection therewith in accordance
with the provisions of Paragraph 7 of this Section E.

 

(d)                    Sell or offer
for sale the Property in such portions, order and parcels as Beneficiary may,
in its sole discretion, determine, with or without having first taken
possession of same, to the highest bidder for cash at public auction. Such sale
or sales shall be made at the courthouse door of the county where the Land is situated
(or if the Land is situated in more than one county, then such Property may be
sold at the courthouse door of any of such counties as designated in the
notices of sale provided for herein) on the first Tuesday of any month between
10:00 A.M. and 4:00 P.M. after giving adequate legal notice of the time, place
and terms of sale, by posting or causing to be posted written or printed
notices thereof at least twenty-one (21) days preceding the date of any such
sale at the courthouse door of the foregoing county, and if the Land is
situated in more than one county, one notice shall be posted at the courthouse
door of each county in which the Land is situated, and by Beneficiary serving
written notice of such proposed sale on each debtor obligated to pay the Indebtedness
at least twenty-one (21) days preceding the date of said sale by certified mail

 

17

 

at the most recent
address for such parties in the records of Beneficiary, or by accomplishing all
or any of the aforesaid in such manner as permitted or required by the Texas
Property Code Section 51.002 (as now written or as hereafter amended or
succeeded) relating to the sale of real estate and/or by Chapter 9 of the Code
relating to the sale of collateral, or by any other present or subsequent laws.
At any such sale: (i) Trustee shall not be required to have physically present,
or to have constructive possession of, the Property to be sold (Grantor hereby
covenanting and agreeing to deliver to Trustee any portion of the Property not
actually or constructively possessed by Trustee immediately upon demand by
Trustee) and the title to and right of possession of any such property shall
pass to the purchaser thereof as completely as if the same had been actually present
and delivered to purchaser at such sale; (ii) each instrument of conveyance
executed by Trustee shall contain a general warranty of title, binding upon
Grantor; (iii) each and every recital contained in any instrument of conveyance
made by Trustee shall conclusively establish the truth and accuracy of the
matters recited therein including, without limitation, nonpayment of the
Indebtedness, advertisement and conduct of such sale in the manner provided
herein and otherwise by law and appointment of any successor Trustee hereunder;
(iv) any and all prerequisites to the validity of such sale shall be
conclusively presumed to have been performed; (v) the receipt of Trustee or of
such other party making the sale shall be a sufficient discharge to the purchaser
for the purchase money, and no such purchaser, or the Purchaser’s assigns or
personal representatives, shall thereafter be obligated to see to the
application of such purchase money or be in any way answerable for any loss,
misapplication or nonapplication thereof; (vi) Grantor shall be completely and
irrevocably divested of all right, title, interest, claim and demand
whatsoever, either at law or in equity, in and to the Property sold, and such
sale shall be a perpetual bar both at law and in equity against Grantor and
against any and all other persons claiming or to claim the Property sold, or
any part thereof; and (vii) Beneficiary may be a purchaser at any such sale.

 

(e)                     Upon, or at
any time after, commencement of foreclosure of any Lien provided for  herein, or any legal proceedings
hereunder, make application to a court of competent jurisdiction as a matter of
strict right and without notice to Grantor or regard to the adequacy of the
Property or any other security for the repayment of the Indebtedness, for
appointment of a receiver of the Property, and Grantor does hereby irrevocably
consent to such appointment. Any such receiver shall have all the usual powers
and duties of receivers in similar cases.

 

(f)                       Exercise
any and all other rights, remedies and recourses granted under the Loan
Documents or as may be now or hereafter existing in equity or at law, by virtue
of statute or otherwise.

 

18

 

2.                         Should
the Property be sold in one or more parcels, the right of sale arising out of
any Event of Default shall not be exhausted by any one or more such sales, but
other and successive sales may be made until all of the Property has been sold
or until the Indebtedness has been fully satisfied.

 

3.                         All
rights, remedies and recourses of Beneficiary granted in the Loan Documents or
otherwise available at law or equity: (a) shall be cumulative and concurrent;
(b) may be pursued separately, successively or concurrently against Grantor or
any Loan Party, or against the Property, or against any one or more of them, at
the sole discretion of Beneficiary; (c) may be exercised as often as occasion
therefor shall arise, it being agreed by Grantor that the exercise or failure
to exercise any of same shall in no event be construed as a waiver or release
thereof or of any other right, remedy or recourse; and (d) shall be
non-exclusive.

 

4.                         Beneficiary
may release, regardless of consideration, any part of the Property without, as
to the remainder, in any way impairing, affecting, subordinating or releasing
the Liens evidenced by the Loan Documents or affecting the obligations of
Grantor or any other Loan Party to pay or perform the Indebtedness. For payment
of the Indebtedness, Beneficiary may resort to any of the security therefor in
such order and manner as Beneficiary may elect. No security heretofore,
herewith or subsequently taken by Beneficiary shall in any manner impair or
affect the security given by the Loan Documents, and all security shall be
taken, considered and held as cumulative.

 

5.                         Grantor
hereby irrevocably and unconditionally waives and releases: (a) all benefits
that might accrue to Grantor by virtue of any present or future law exempting
the Property from attachment, levy or sale on execution or providing for any
appraisement, valuation, stay of execution, exemption from civil process,
redemption or extension of time for payment; (b) all notices of any default or
Event of Default (except as may specifically be required by a Loan Document) or
of Beneficiary’s or Trustee’s exercise of any right, remedy or recourse
provided for under the Loan Documents or otherwise; and (c) any right to a
marshaling of assets or a sale in inverse order of alienation.

 

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

 

7.                         Any
proceeds of any sale of, and any Rents, except as may otherwise be provided in Paragraph
2 of Section H, or other amounts generated by the holding, leasing,
operation or other use of the Property shall be applied in the such order of
priority as Beneficiary, in its sole discretion, may elect including, without
limitation, the following order of priority: (a) first, to the payment of all
costs and expenses of taking possession of the Property and of holding,
leasing, operating, using,

 

19

 

repairing, improving and
selling the same including, without limitation, fees of the Trustee and
attorneys retained by Beneficiary or Trustee (whether inside or outside counsel
is used); fees of any receiver or accountants; recording and filing fees; court
costs; costs of advertisement; and the payment of any and all Impositions,
Liens or other rights, titles or interests equal or superior to the Liens of
this Deed of Trust (without in any way implying Beneficiary’s consent to the
creation thereof); (b) second, to the payment of all accrued and unpaid
interest due on the Note; (c) third, to the payment of the unpaid principal
balance of the Note; (d) fourth, to the payment of all amounts, other than
unpaid principal and accrued interest on the Note, which may be due to
Beneficiary under the Loan Documents, together with interest thereon as
provided therein; (e) fifth, to the payment of any Indebtedness remaining
unpaid; and (f) sixth, to Grantor or such other person who may be entitled
thereto by law.

 

8.                         In
addition to the remedies set forth in this Section E, upon the
occurrence of an Event of Default Beneficiary and Trustee shall have available
to them the remedies set forth in Sections G and H herein as well
as all other remedies available to them at law or in equity.

 

9.                         The
remedies in this Section E are in addition to other remedies available
to Beneficiary, and the exercise of the remedies in this Section shall not be
deemed to be an election of non-judicial or judicial remedies otherwise
available to Beneficiary. The remedies in this Section E are available
under and governed by the real property laws of Texas and, except as described
in Section G hereof, are not governed by the personal property laws of
Texas, including but not limited to, the power to dispose of personal property
in a commercially reasonable manner under Section 9.610 of the Code. No action
by Beneficiary taken pursuant to this Section E shall be deemed to be an
election to dispose of personal property under Section 9.620 of the Code.

 

10.                   In the event an
interest in any of the Property is foreclosed upon pursuant to a judicial or
non-judicial foreclosure sale, Grantor and each other Loan Party hereby make
the agreements as set forth in this paragraph. 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
and each other Loan Party agree that Beneficiary shall be entitled to seek a
deficiency judgment from such party, to the extent such party would otherwise
be liable therefor, equal to the difference between the amount of the
Indebtedness and the amount for which the Property was sold pursuant to
judicial or non-judicial foreclosure sale. Grantor and each other Loan Party
expressly recognize that this Paragraph constitutes a waiver of the above-cited
provisions of the Texas Property Code which would otherwise permit Grantor
and/or other persons against whom recovery of deficiencies is sought to present
competent evidence of the fair market value of the Property that was sold as of
the date of the foreclosure sale and offset, against any deficiency, the amount
by which the foreclosure sale price is determined to be less than such fair
market value. Grantor and each other Loan Party further recognize and agree
that this waiver creates an irrebuttable presumption that the foreclosure sale
price is equal to the fair market value of the

 

20

 

Property that was sold
for purposes of calculating deficiencies owed by Grantor and others against
whom recovery of a deficiency is sought.

 

11.                   In the event
the waiver provided for in the immediately preceding Paragraph is determined by
a court of competent jurisdiction to be unenforceable and under every
circumstance where any of the Property which is the subject matter of a
disposition under this Deed of Trust gives rise to a calculation of any surplus
or deficiency under Section 9.615 (f) of the Code, the following shall be
the basis for the finder of fact’s (a) determination of the fair market value
of the Property that was sold 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) and (b) calculation of surplus or
deficiency under Section 9.615 of the Code: (i) the Property shall be valued in
an “as is” condition as of the date of the foreclosure sale, without any
assumption or expectation that the Property will be repaired or improved in any
manner before a resale of the Property after foreclosure; (ii) the valuation
shall be based upon an assumption that the foreclosure purchaser desires a
resale of the Property for cash promptly (but no later than 30 days in the case
of Personalty and 12 months in the case of all other Property) following the
foreclosure sale; (iii) all reasonable closing costs customarily borne by the
seller in commercial real estate transactions should be deducted from the gross
fair market value of the Property including, without limitation, brokerage
commissions, title insurance, a survey of the Property, tax prorations,
attorneys’ fees, whether inside or outside counsel is used, and marketing
costs; (iv) the gross fair market value of the Property that was sold shall be
further discounted to account for any estimated holding costs associated with
maintaining such Property pending sale including, without limitation, utilities
expenses, property management fees, taxes and assessments (to the extent not
accounted for in (iii) above), and other maintenance, operational and ownership
expenses; and (v) any expert opinion testimony given or considered in
connection with a determination of the fair market value of the Property must
be given by persons having at least 5 years experience in appraising property
similar to the Property and who have conducted and prepared a complete written
appraisal of the Property taking into consideration the factors set forth
above. Furthermore, for purposes of determining the amount of proceeds which
would have been realized in a disposition to a transferee other than a secured
party, a person related to a secured party or a secondary obligor under Section
9-615(f) of the Code, the value of Property that is the subject of the disposition
shall be determined in accordance with this Paragraph.

 

F.                         INSURANCE AND CONDEMNATION
PROCEEDS AND OTHER AWARDS.

 

All proceeds of insurance
and all judgments, decrees or awards now or hereafter arising or resulting from
or in connection with any injury, damage, taking or other loss to the Property,
or awards, settlements or other compensation now or hereafter made by any
Governmental Authority, including those for any variation of, or change of
grade in, any streets affecting the Land or the Improvements, are hereby
assigned in their entirety to Beneficiary and shall be paid directly to
Beneficiary. Beneficiary is hereby authorized, in the name of Grantor, to
execute and

 

21

 

deliver valid acquittances
for, and to appeal from, any such award, judgment or decree. Beneficiary and
each of Beneficiary’s employees is irrevocably appointed attorney-in-fact and
is duly authorized and empowered to receive, receipt for, discharge and satisfy
any judgment, decree or award, whether joint or several, on behalf of Grantor.
Beneficiary shall not be liable for failure to collect any judgment, decree or
award, regardless of the cost of such failure. Any proceeds received by
Beneficiary from any insurance, judgment, decree or award or otherwise arising
or resulting from any injury, damage, taking or other loss to the Property
shall, after deduction therefrom of all reasonable expenses actually incurred
by Beneficiary, including attorneys’ fees, whether inside or outside counsel is
used, at Beneficiary’s sole option (unless otherwise expressly provided
herein), (a) be released to Grantor, or (b) applied (upon compliance with such
terms and conditions as may be required by Beneficiary) to repair or
restoration, either partly or entirely, of the Property, or (c) applied to the
payment of the Indebtedness in such order and manner as Beneficiary, in its
sole discretion, may elect, whether or not due. In any event, any unpaid
portion of the Indebtedness shall remain in full force and effect, and the
payment thereof shall not be excused or postponed. Prepaid amounts shall
constitute voluntary prepayments and shall, subject to Section N,
Paragraph 8 of this Deed of Trust, be subject to applicable prepayment
premiums or formulas. Grantor shall at all times comply with the requirements
of the insurance policies required hereunder and of the issuers of such
policies and of any board of fire underwriters or similar body as applicable to
or affecting the Property. If any act or occurrence of any kind or nature
(including any condemnation or any casualty for which insurance was not
obtained or obtainable) shall result in damage to or loss or destruction of the
Property, Grantor shall give prompt notice thereof to Beneficiary, and Grantor
shall promptly, at Grantor’s sole cost and expense and regardless of whether
insurance, condemnation or other proceeds (if any) shall be available or
sufficient for the purpose, commence and continue diligently to completion to
restore, repair, replace and rebuild the Property to its value and, as nearly
as possible, to its condition and character immediately prior to the damage,
loss or destruction. Notwithstanding anything to the contrary contained in this
Deed of Trust or any other Loan Document, (i) if the Property shall be damaged
or destroyed or if a portion thereof shall be taken by condemnation or an
agreement reached under threat of condemnation, and (ii) if Beneficiary in good
faith determines that the insurance or condemnation proceeds together with such
additional cash amounts that Grantor shall make available for the repair or
restoration of the Property and shall pledge to Beneficiary as additional
security for the payment and performance of the Indebtedness are sufficient to
restore, repair, replace and rebuild the Property within thirty (30) days
following the occurrence of the damage, destruction or taking to its value
immediately prior to such damage, loss or destruction and to approximately the
same condition and character that existed immediately preceding such damage,
loss or destruction, and (iii) provided that no default or Event of Default
shall exist, then the insurance and condemnation proceeds together with such
additional cash amounts provided by Grantor shall be placed in a special
depository account (which may be a non-interest bearing account) with
Beneficiary (or, at Beneficiary’s option, a financial institution approved by
Beneficiary) and disbursed in scheduled payments approved by Beneficiary to
restore, repair, replace and rebuild the Property to a value at least equal to
that which existed immediately prior to the damage, loss or destruction and to
approximately the same condition and character which existed immediately prior
to such damage, loss or destruction. Notwithstanding the foregoing, Beneficiary
shall have no obligation to disburse any such proceeds or other cash amounts if
the total disbursements made prior to completion of the work would exceed 90%
of the value of the work then completed, and each disbursement shall be
conditioned upon receipt by Beneficiary (in form and

 

22

 

content satisfactory to
Beneficiary) of architect certificates, contractor and subcontractor sworn
statements and waivers and releases of Liens together with satisfactory
evidence of the total cost to complete the work, evidence of costs paid by
Grantor as the work progresses, evidence that the work is being completed Lien
free and in a good and workmanlike manner, and evidence that the proceeds and
other cash amounts then on deposit are sufficient for the completion of the
work. The special depository account and all amounts deposited therein together
with all interests and profits, if any, accruing with respect thereto and all
rights, privileges and benefits existing with respect thereto shall be and are
hereby pledged as additional security for the payment and performance of the
Indebtedness. All work to be performed in connection with the repair,
restoration, replacement or rebuilding of the Property shall be performed
pursuant to a written contract, which contract shall be subject to the prior
written approval of Beneficiary and which shall set forth the manner and
schedule of payments to be made thereunder. If, at any time, Beneficiary
determines that the insurance or condemnation proceeds together with other cash
amounts made available by the Grantor are insufficient to repair, restore,
replace and rebuild the Property to the value and condition required hereunder,
Grantor shall deposit additional cash amounts to the special depository account
established (or to be established) for such purpose.

 

G.                       SECURITY AGREEMENT.

 

Grantor hereby grants to
Beneficiary a security interest in and to certain property as follows:

 

1.                         If this
Deed of Trust secures future advances to be used for construction of
Improvements on the Land, this Deed of Trust constitutes a “construction
mortgage” under the Code. This Deed of Trust shall also constitute and serve as
a “security agreement” on personal property and a “fixture filing” within the
meaning of, and shall constitute a first and prior security interest under,
Chapter 9 of the Code with respect to the Personalty, Fixtures, Contracts and
Leases. To this end, Grantor grants to Beneficiary, as a secured party, a first
and prior security interest in, to and under the Personalty, Fixtures,
Contracts and Leases, to secure the full and timely payment and performance of
the Indebtedness.

 

2.                         Grantor
agrees to execute and deliver to Beneficiary, in form and substance satisfactory
to Beneficiary, such financing statements and such further assurances as
Beneficiary may, from time to time, request to create, perfect, and preserve
the security interest herein granted, and Beneficiary may cause any financing
statements and assurances to be recorded and filed at such times and places as
may be required or permitted by law to create, perfect and preserve such
security interest. Without limiting the foregoing, Grantor shall, upon request
of Beneficiary take such actions as Beneficiary shall request to establish
exclusive control (as defined in the Code) by Beneficiary over any Property
which is of such a nature that perfection of a security interest may be
accomplished by control.  Furthermore,
Grantor (a) irrevocably appoints Beneficiary or any agent of Beneficiary (which
appointment is coupled with an interest) the true and lawful attorney of
Grantor (with full power of substitution) to act in the name, place and stead
of, and at the expense of, Grantor and (b) authorizes Beneficiary or any
agent of Beneficiary, in its own name, at Grantor’s expense, to do any of the
following, as Beneficiary, in its sole discretion, deems appropriate: (i) to
demand,

 

23

 

receive, sue for, and
give receipts or acquittances for any moneys due or to become due on any
Property (including, without limit, to draft against Property) and to endorse
any item representing any payment on or proceeds of the Property; (ii) to
execute and file in the name of and on behalf of Grantor all financing
statements or other filings or collateral control agreements deemed necessary
or desirable by Beneficiary to evidence, perfect, or continue the security
interests granted in this Deed of Trust; and (iii) to do and perform any act on
behalf of Grantor permitted or required under this Deed of Trust.

 

3.                         Beneficiary,
as well as Trustee on Beneficiary’s behalf, shall have all the rights, remedies
and recourses with respect to the Personalty, Fixtures, Contracts and Leases
afforded a “secured party” by Chapter 9 of the Code in addition to, and not in
limitation of, the other rights, remedies and recourses afforded Beneficiary
and/or Trustee by the Loan Documents.

 

4.                         The
security interest herein granted shall not be deemed or construed to constitute
Trustee or Beneficiary as a party in possession of any portion of the Property
or to obligate Trustee or Beneficiary to lease the Property or to take any
other action or to incur any expenses or to perform any obligation whatsoever
under any of the Contracts or Leases or otherwise.

 

5.                         Upon the
occurrence of an Event of Default and at any time thereafter:

 

(a)                     Trustee and
Beneficiary shall have, with regard to the Personalty, Fixtures, Contracts and
Leases the remedies provided in this Deed of Trust and in the Code (no such
remedy granted by the Code being excepted, modified or waived herein). Trustee
and Beneficiary may, respectively, use his or its discretion in exercising the
rights and electing the remedies; provided, however, all acts shall be in
compliance with the standards of the Code where applicable and required. For
purposes of the notice requirements of the Code and this Section G, it
is agreed that notice sent or given not less than ten (10) calendar days prior
to the taking of the action to which the notice relates is reasonable notice.

 

(b)                    Trustee and
Beneficiary shall, respectively, be entitled, acting in his or its sole
discretion, to apply the proceeds of any disposition of the Personalty,
Fixtures, Contracts and Leases in the order set forth in Chapter 9 of the Code,
or, if allowed by the Code, in the order set forth in Paragraph 7 of Section
E hereof. Grantor agrees that Beneficiary shall be under no obligation to
accept any noncash proceeds in connection with any sale or disposition of
Property unless failure to do so would be commercially unreasonable. If
Beneficiary agrees in its sole discretion to accept noncash proceeds (unless
the failure to do so would be commercially unreasonable), Beneficiary may
ascribe any commercially reasonable value to such proceeds. Without limiting
the foregoing, Beneficiary may apply any discount factor in determining the
present value of proceeds to be received in the future or may elect to apply
proceeds to be received in

 

24

 

the future only as and
when such proceeds are actually received in cash by Beneficiary.

 

(c)                     Notwithstanding
anything herein to the contrary, Beneficiary, or the Trustee acting on
Beneficiary’s behalf, may at its or his option, dispose of the Fixtures,
Personalty, Contracts and/or Leases and other items of personal property
covered by this Deed of Trust in accordance with Beneficiary’s rights and
remedies in respect of and together with the Land, collectively as the Property,
pursuant to the provisions of Section E of this Deed of Trust in lieu of
proceeding under the Code.

 

6.                         Beneficiary
may require Grantor to assemble the Personalty, Fixtures, Contracts and Leases
and make them available to Beneficiary or Trustee at a place to be designated
by Beneficiary that is reasonably convenient to both parties. All expenses of
retaking, holding, preparing for sale, lease or other use or disposition,
selling, leasing or otherwise using or disposing of the Personalty, Fixtures,
Contracts and Leases and the like which are incurred or paid by Beneficiary as
authorized or permitted hereunder, including also all reasonable attorneys’
fees, whether inside or outside counsel is used, legal expenses and costs,
shall be added to the Indebtedness, and Grantor shall be liable therefor. At
any sale or other disposition of any Property, Beneficiary disclaims all
warranties which would otherwise be given under the Code, including without
limit, a disclaimer of any warranty relating to title, possession, quiet
enjoyment or the like, and Beneficiary may communicate these disclaimers to a
purchaser at such disposition. This disclaimer of warranties will not render
the sale commercially unreasonable.

 

7.                         As to the
Personalty, Fixtures, Contracts and Leases, this Deed of Trust shall be
effective as a financing statement when filed for record in the official real
property records of any county in which any portion of the Land is located. The
record owner of the Land is Grantor, whose mailing address for purposes of such
financing statement is set forth in the opening recital herein above.
Information concerning the security interest created by this Deed of Trust may
be obtained from Beneficiary at its address similarly set forth in such opening
recital. Beneficiary or Trustee may file a carbon, photographic or other
reproduction of this Deed of Trust as a financing statement.

 

8.                         Except as
otherwise expressly provided in this Deed of Trust, all terms in this Deed of
Trust which are defined in the Code shall have the meanings assigned to them in
Article 9 (or, absent definition in Article 9, in any other Article) of the
Code, as those meanings may be amended, revised or replaced from time to time.
Notwithstanding the foregoing, the parties intend that the terms used herein
which are defined in the Code have, at all times, the broadest and most
inclusive meanings possible. Accordingly, if the Code shall in the future be
amended or held by a court to define any term used herein more broadly or
inclusively than the Code in effect on the date of this Deed of Trust, then
such term, as used herein, shall be given such broadened meaning. If the Code
shall in the future be amended or held by a court to define any term used
herein more narrowly, or less inclusively, than the Code in effect on the date
of this Deed of Trust, such

 

25

 

amendment or
holding shall be disregarded in defining terms used in this Deed of Trust.

 

H.                       ASSIGNMENT OF RENTS.

 

Grantor does hereby
absolutely and unconditionally assign, transfer and convey to Beneficiary, as
well as to Trustee on Beneficiary’s behalf, all Rents under the following
provisions:

 

1.                         Grantor
reserves the right, unless and until an Event of Default occurs under this Deed
of Trust, to collect such Rents as a trustee for the benefit of Beneficiary,
and Grantor shall apply the Rents so collected in the order set forth in Paragraph
7 of Section E hereof. All rents collected by Grantor shall be
deposited by Grantor in Grantor’s operating accounts maintained with
Beneficiary. All security deposits collected by Grantor shall be maintained in
an account with Beneficiary for such purpose.

 

2.                         Beneficiary,
or Trustee on Beneficiary’s behalf, may at any time following an Event of
Default, either in person, by agent, or by receiver to be appointed by a court,
enter and take possession of the Property or any part thereof and, in its own
name, sue for or otherwise collect such Rents. Grantor hereby agrees with
Beneficiary that the other parties under the Leases may, upon notice from
Trustee or Beneficiary of the occurrence of an Event of Default, thereafter pay
direct to Beneficiary the Rents due and to become due under the Leases and
attorn to all other obligations thereunder direct to Beneficiary, or Trustee on
Beneficiary’s behalf, without any obligation on their part to determine whether
an Event of Default does in fact exist or has in fact occurred. All Rents
collected by Beneficiary, or Trustee acting on Beneficiary’s behalf, shall be
applied as provided for in Paragraph 7 of Section E above;
provided however, that if the costs, expenses and attorneys’ fees, whether
inside or outside counsel is used, shall exceed the amount of Rents collected,
the excess shall be added to the Note, shall bear interest as provided in Paragraph
5 of Section N below and shall be immediately due and payable. The
entering upon and taking possession of the Property, the collection of Rents,
or the application thereof as aforesaid shall not cure or waive any default or Event
of Default, if any, hereunder or invalidate any act done pursuant to such
notice. Failure or discontinuance of Beneficiary, or Trustee on Beneficiary’s
behalf, at any time or from time to time, to collect said Rents shall not in
any manner impair the subsequent enforcement by Beneficiary, or Trustee on
Beneficiary’s behalf, of the right, power and authority herein conferred upon
it. Nothing contained herein, and no exercise of any right, power or authority
herein granted to Beneficiary, or Trustee on Beneficiary’s behalf, shall be or
be construed to be, an affirmation by it of any tenancy, lease, or option, or
an assumption of liability under or the subordination of the Lien or charge of
this Deed of Trust to any such tenancy, lease, or option.

 

3.                         Grantor
represents and warrants that as of the date of this Deed of Trust there are no
Leases. Grantor will not enter into any Lease without the Beneficiary’s prior
written consent. If any Leases are hereafter entered into with Beneficiary’s
consent, Grantor will not (a) execute an assignment of any of its right, title
or

 

26

 

interest in the Rents, or
(b) except where the lessee is in default thereunder, terminate or consent to
the cancellation or surrender of any Lease, and except further, any Lease may
be canceled if, promptly after the cancellation or surrender thereof a new
Lease is entered into with a new lessee having a credit standing, in the
judgment of Beneficiary, at least equivalent to that of the lessee whose Lease
was canceled, on substantially the same or better terms as the terminated or
canceled Lease, or (c) accept prepayments of any Rents in excess of one month,
except prepayments in the nature of security for the performance of the lessee
under any Lease, or (d) in any other manner impair the value of the Property or
the security of this Deed of Trust. Grantor will at all times promptly and
faithfully perform, or cause to be performed, each covenant, condition and
agreement contained in each Lease hereafter existing on the part of lessor
thereunder to be kept and performed.

 

4.                         No action
taken by Beneficiary under this Deed of Trust shall make Beneficiary a “Mortgagee
in Possession.”

 

I.                            THE TRUSTEE.

 

The following provisions
shall govern with respect to the Trustee:

 

1.                         Trustee
shall not be liable for any error of judgment or act done by Trustee in good
faith, or be otherwise responsible or accountable to Grantor under any
circumstances whatsoever. Furthermore, Trustee shall not be personally liable
in case of entry by him, or anyone entering by virtue of the powers herein
granted, upon the Property for debts contracted or liability or damages
incurred in the management or operation of the Property. Trustee shall have the
right to rely on any instrument, document or signature authorizing or
supporting any action taken or proposed to be taken by him hereunder and
believed by him in good faith to be genuine. Trustee shall be entitled to
reimbursement for expenses incurred by him in the performance of his duties
hereunder and to reasonable compensation for such of his services hereunder as
shall be rendered. Grantor will, from time to time, pay the compensation due to
Trustee hereunder and reimburse Trustee for, and save him harmless against, any
and all liability and expenses which may be incurred by him in the performance
of his duties INCLUDING ANY CLAIMS, LOSSES,
DAMAGES, SUITS, PENALTIES, COSTS, LIABILITIES, OBLIGATIONS AND EXPENSES, RESULTING
FROM TRUSTEE’S OWN NEGLIGENCE; provided, however, that the foregoing
indemnification shall not be applicable, and Grantor shall not be liable for
any such claims, losses, damages, suits, penalties, costs, liabilities,
obligations or expenses, to the extent (but only to the extent) the same arise
or result from any gross negligence or willful misconduct of Trustee.

 

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

 

27

 

3.                         Trustee
may resign at any time with or without notice. If Trustee shall die, resign or
become disqualified from acting in the execution of this trust or shall fail or
refuse to execute the same when requested by Beneficiary so to do, or if, for
any reason, Beneficiary shall prefer to appoint a substitute trustee to act
instead of the afore named Trustee, Beneficiary shall have full power to
appoint a substitute trustee and, if preferred, several substitute trustees in
succession who shall succeed to all the estates, rights, powers and duties of
the afore named Trustee.

 

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

 

J.                         SITE ASSESSMENTS.

 

If Beneficiary shall ever
in good faith believe that there may be a possibility of Hazardous Materials or
Hazardous Materials Contamination affecting any of the Property, Beneficiary
(by its officers, employees and agents) at any time and from time to time after
notice to Grantor of same (except in an emergency or where not practical under
applicable law, in which case notice is waived), either prior to or after the
occurrence of a default or an Event of Default, may contract for the services
of persons (the “Site Reviewers”)
to perform environmental site assessments (“Site
Assessments”) on the Property for the purpose of determining
whether any environmental condition exists which could result in any liability,
cost or expense to the owner, occupier or operator of such Property. The Site
Assessments may be performed at any time or times, upon reasonable notice, and
under reasonable conditions established by Grantor which do not impede the
performance of the Site Assessments. The Site Reviewers are hereby authorized
to enter upon the Property for such purposes. The Site Reviewers are further
authorized to perform both above and below the ground testing for environmental
damage or the presence of Hazardous Materials and such other tests as may be
necessary to conduct the Site Assessments in the opinion of the Site Reviewers.
Grantor will supply to the Site Reviewers such historical and operational
information regarding the Property as may be requested by the Site Reviewers to
facilitate the Site Assessments and will make available for meetings with the
Site Reviewers appropriate personnel having knowledge of such matters. On
request, Beneficiary shall make the results of such Site Assessments fully
available to Grantor. The cost of performing such Site Assessments shall be
paid by Grantor upon demand of Beneficiary. Any such obligations shall be
Indebtedness secured by this Deed of Trust, shall be payable by Grantor upon
demand and shall bear interest from the date paid by Beneficiary until
reimbursed at the highest per annum interest rate applicable to any of the
Indebtedness but not to exceed the highest rate permitted by applicable law.

 

28

 

K.                       INDEMNIFICATION.

 

Regardless of whether any
Site Assessments are conducted hereunder, Grantor shall defend, indemnify and
hold harmless Beneficiary and Trustee and their respective employees, agents,
shareholders, officers and directors from any and all liabilities (including strict
liability), actions, demands, penalties, losses, costs and expenses (including,
without limitation, consultants’ fees, investigation and laboratory fees,
reasonable attorneys’ fees, whether inside or outside counsel is used, expenses
and remedial costs), suits, costs of any settlement or judgment and claims of
each and every kind whatsoever which may now or in the future (whether before
or after the release of this Deed of Trust) be paid, incurred or suffered by or
asserted against Beneficiary or Trustee or such other indemnified party by any
person or entity or Governmental Authority for, with respect to, or as a direct
or indirect result of (a) the presence, disposal, release or threatened release
of any Hazardous Materials on, from or affecting the Property or the soil,
water, air, vegetation, building, personal property, persons or animals on the
Property, (b) any personal injury (including, without limit, wrongful death) or
property damage (real or personal) arising out of or related to Hazardous Materials,
(c) any law suit brought or threatened, settlement reached or government order
related to Hazardous Materials, (d) the cost of removal of Hazardous Materials
from any portion of the Property, (e) taking necessary precautions to protect
against the release of Hazardous Materials on or affecting the Property, (f) complying
with all Governmental Requirements, and/or (g) any violation of any
Governmental Requirement or requirements of this Deed of Trust which are in any
way related to Hazardous Materials including, without limit, attorney’s fees
(whether inside or outside counsel is used) and consultants’ fees (the
attorneys and consultants to be selected by Beneficiary), investigation and
laboratory fees and environmental studies required by Beneficiary (whether
prior to foreclosure, or otherwise) INCLUDING
ANY CLAIMS, LOSSES, DAMAGES, SUITS, PENALTIES, COSTS, LIABILITIES, OBLIGATIONS
OR EXPENSES, RESULTING FROM BENEFICIARY’S, TRUSTEE’S OR SUCH OTHER INDEMNIFIED
PARTY’S OWN NEGLIGENCE; provided, however, that the foregoing
indemnification shall not be applicable, and Grantor shall not be liable for
any such claims, losses, damages, suits, penalties, costs, liabilities,
obligations or expenses, to the extent (but only to the extent) the same arise
or result from any gross negligence or willful misconduct of the indemnified
party. The representations, covenants, warranties and indemnification contained
in this Section K shall survive the release of this Deed of Trust.

 

L.                        BENEFICIARY’S RIGHT TO
REMOVE HAZARDOUS MATERIALS.

 

Beneficiary shall have
the right but not the obligation, without in any way limiting Beneficiary’s
other rights and remedies under this Deed of Trust or any other Loan Document,
to enter onto the Property or to take such other actions which are required by
Legal Requirements or Governmental Requirements (and as Grantor deems necessary
or advisable) to investigate or test for, clean up, remove, resolve or minimize
the impact of, advise any Governmental Authority of the possible existence of,
or otherwise deal with any Hazardous Materials or Hazardous Materials
Contamination on or affecting the Property following receipt of any notice from
any person or entity asserting the existence of any Hazardous Materials or
Hazardous Materials Contamination pertaining to the Property or any part
thereof which, if true, could result in an order, notice, suit, imposition of a
Lien on the Property or other action and/or which, in Beneficiary’s sole
opinion, could adversely affect Beneficiary’s security under this Deed of
Trust. All costs and expenses paid or incurred by Beneficiary in the exercise
of any such rights shall be Indebtedness secured by this Deed of Trust, shall
be payable by Grantor upon demand and shall bear interest from the date paid by
Beneficiary until reimbursed at the highest per annum interest rate applicable
to any of the Indebtedness but not to exceed the highest rate permitted by

 

29

 

applicable law. Any such
actions conducted by Beneficiary shall be solely for the benefit of and to
protect the interests of Beneficiary and shall not be relied upon by Grantor,
any other Loan Party or any third party for any purpose. By conducting any such
actions, Beneficiary does not assume control over the environmental affairs or
operations of Grantor or assume any liability of Grantor any Loan Party or any
third party. The provisions of this Section shall be in addition to all other
obligations and liabilities Grantor may have to Beneficiary at common law or
pursuant to any other agreement and shall survive (a) the repayment and
performance of the Indebtedness, (b) the satisfaction of all other obligations
of Grantor under this Deed of Trust and under any other Loan Document, (c) the
discharge of this Deed of Trust, and (d) the foreclosure of this Deed of Trust
or acceptance of a deed in lieu of foreclosure.

 

M.                     ASSIGNMENT OF CONTRACTS AND
SALES PROCEEDS.

 

1.                         Grantor
hereby collaterally sells, assigns, transfers and sets over unto Beneficiary,
its successors and assigns, all of Grantor’s right, title and interest in, to
and under any and all Contracts, including all of Grantor’s rights to receive
payments, receipts, revenues, interest and income of any kind under the
Contracts (hereinafter collectively called the “Proceeds”) including but not limited to (a) any and
all rights of Grantor to receive the Proceeds, and (b) any and all rights and
remedies which Grantor may have against any other party to any of the
Contracts, whether related to the payment of any portion of the Proceeds or
otherwise.

 

2.                         These
presents are given to additionally secure payment and performance of the
Indebtedness. Grantor shall not cancel or amend any of the Contracts or assign
any of Grantor’s right, title or interest thereunder or permit any of the
Contracts to terminate if they are necessary or desirable for the operation of
the Property without first obtaining the written approval of Beneficiary. This
Section shall not be applicable to any Contract that terminates if it is assigned
without the consent of another party (other than Grantor) unless this consent
has been obtained. Furthermore, this Section shall not be construed as a
present assignment of any Contract that Grantor is required by law to hold.

 

3.                         Beneficiary
shall not be obligated to perform or discharge any obligation or duty to be
performed or discharged by Grantor under any of the Contracts, and Grantor
hereby agrees to indemnify Beneficiary for, and to save Beneficiary harmless
from, any and all liability arising from any of the Contracts or from this
assignment INCLUDING ANY CLAIMS, LOSSES,
DAMAGES, SUITS, PENALTIES, COSTS, LIABILITIES, OBLIGATIONS OR EXPENSES,
RESULTING FROM BENEFICIARY’S OWN NEGLIGENCE; provided, however, that
the foregoing indemnification shall not be applicable, and Grantor shall not be
liable for any such claims, losses, damages, suits, penalties, costs,
liabilities, obligations or expenses, to the extent (but only to the extent)
the same arise or result from any gross negligence or willful misconduct of
Beneficiary. This assignment shall not place responsibility for the control,
care, management or repair of the Property upon Beneficiary or make Beneficiary
responsible or liable for any negligence
in the management, operation, upkeep, repair or control of the Property
resulting in loss or damage or injury or death to any party.

 

30

 

4.                         The
failure of Beneficiary to enforce any of the terms, covenants or conditions
hereof shall not be construed or deemed to be a waiver of any rights or
remedies hereunder. Beneficiary shall have the full right, power and authority
to enforce this assignment, or any of the terms, covenants or conditions
hereof, at any time or times that Beneficiary shall deem fit.

 

N.                       MISCELLANEOUS.

 

The following provisions
shall also apply to and govern this Deed of Trust and the interpretation
hereof:

 

1.                         Each and
every portion of the Indebtedness shall survive the execution and delivery of
the Loan Documents and the consummation of the loans called for therein and
shall continue in full force and effect until the Indebtedness shall have been
paid and performed in full except for the representations, covenants,
warranties and indemnification contained in Section K and Section O
which shall survive the payment and performance of the Indebtedness as
specified therein.

 

2.                         Grantor,
upon the request of Trustee or Beneficiary, will execute, acknowledge, deliver
and record and/or file such further instruments and do such further acts as may
be necessary, desirable or proper, in Beneficiary’s judgment, to carry out more
effectively the purposes of the Loan Documents and to subject to the Liens and
security interests thereof any property intended by the terms thereof to be
covered thereby, including specifically, but without limitation, any renewals,
additions, substitutions, replacements, or appurtenances to the Property.
Grantor will pay all such recording, filing, re-recording and re-filing taxes,
fees and other charges, including those for Lien searches.

 

3.                         All
notices or other communications required or permitted to be given pursuant to
this Deed of Trust (except for notices of a foreclosure sale which shall be
given in the manner set forth in Paragraph 1(d) of Section E
hereof) shall be in writing. A notice or communication shall be deemed to be
given under this Deed of Trust when delivered to the applicable party or when
placed in an envelope addressed to the party and deposited, with postage
prepaid, in a post office or official depository under the exclusive care and
custody of the United States Postal Service or delivered to an overnight
courier. The mailing shall be by overnight courier, certified or first class
mail. In the event that applicable law shall obligate Beneficiary to give prior
notice to the Grantor or any other Loan Party of any action to be taken under
this Deed of Trust or any other Loan Document, the Grantor and other Loan
Parties agree that a written notice given to Grantor or such other Loan Party
at least 10 days before the date of the act shall be reasonable notice of the
act unless a shorter notice period is reasonable under the circumstances. For
purposes of notice, the addresses of the parties shall be as set forth in the
opening Paragraph herein above; provided, however, that either party shall have
the right to change its address for notice hereunder to any other location
within the continental United States by the giving of 10 days’ notice to the
other party in the manner set forth herein above.

 

31

 

4.                         Any
failure by Trustee or Beneficiary to insist, or any election by Trustee or
Beneficiary not to insist, upon strict performance by Grantor or any other Loan
Party of any of the terms, provisions or conditions of the Loan Documents shall
not be deemed to be a waiver of same or of any other term, provision or
condition thereof, and Trustee or Beneficiary shall have the right at any time
or times thereafter to insist upon strict performance by Grantor or any other
Loan Party of any and all of such terms, provisions and conditions.

 

5.                         If
Grantor or any other Loan Party shall fail, refuse or neglect to make any
payment or perform any act required by the Loan Documents, then at any time
after the applicable notice and cure periods have passed, if any, and without
waiving or releasing any other right, remedy or recourse Beneficiary may have
because of same, Beneficiary may (but shall not be obligated to) make such
payment or perform such act for the account of and at the expense of Grantor
and shall have the right to enter the Land and Improvements for such purpose
and to take all such action thereon and with respect to the Property as it may
deem necessary or appropriate. Grantor shall indemnify Beneficiary for all
losses, expenses, damages, claims, and causes of action, including reasonable
attorneys’ fees, whether inside or outside counsel is used, incurred or
accruing by reason of any acts performed by Beneficiary pursuant to this Paragraph
5 of Section N or by reason of any other provision in the Loan
Documents INCLUDING ANY CLAIMS, LOSSES,
COSTS, DAMAGES, LIABILITIES, OBLIGATIONS, AND EXPENSES RESULTING FROM
BENEFICIARY’S OWN NEGLIGENCE, except to the extent, but only to the
extent, caused by Beneficiary’s gross negligence or willful misconduct. All
sums paid by Beneficiary pursuant to this Paragraph 5 of this Section
N and all other sums expended by Beneficiary to which it shall be entitled
to be indemnified, together with interest thereon at the highest per annum rate
of interest applicable to any of the Indebtedness, but not in excess of the
maximum rate permitted by applicable law, from the date of such payment or
expenditure until repaid, shall constitute additions to the Indebtedness, shall
be secured by the Loan Documents and shall be paid by Grantor to Beneficiary
upon demand. TEXAS FINANCE CODE § 307.052
COLLATERAL PROTECTION INSURANCE NOTICE: (A) DEBTOR IS REQUIRED TO: (i) KEEP THE
COLLATERAL INSURED AGAINST DAMAGE IN THE AMOUNT EQUAL TO THE DEBTOR’S
INDEBTEDNESS TO BANK; (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 BANK AS THE PERSON TO BE PAID UNDER THE POLICY IN THE
EVENT OF LOSS; (B) DEBTOR MUST, IF REQUIRED BY BANK, DELIVER TO BANK A COPY OF
THE POLICY AND PROOF OF THE PAYMENT OF PREMIUMS; AND (C) IF DEBTOR FAILS TO
MEET ANY REQUIREMENT LISTED IN CLAUSE (A) OR (B) ABOVE, BANK MAY OBTAIN
COLLATERAL PROTECTION INSURANCE ON BEHALF OF THE DEBTOR THE DEBTOR’S EXPENSE.

 

6.                         All
obligations contained in the Loan Documents are intended by the parties to be,
and shall be construed as, covenants running with the Property.

 

32

 

7.        All of the terms of the
Loan Documents shall apply to, be binding upon and inure to the benefit of the
parties thereto, their respective successors, assigns, heirs and legal
representatives, and all other persons claiming by, through or under them.

 

8.        The Loan Documents are
intended to be performed in accordance with, and only to the extent permitted
by, all applicable Legal Requirements. If any provision of any of the Loan
Documents or the application thereof to any person or circumstance shall, for any
reason or to any extent, be invalid or unenforceable, neither the remainder of
the instrument in which such provision is contained nor the application of such
provision to other persons or circumstances nor the other instruments referred
to herein above shall be affected thereby, but rather, the same shall be
enforced to the greatest extent permitted by law. It is hereby expressly
stipulated and agreed to be the intent of Grantor and Beneficiary at all times
to comply with the usury, and all other laws relating to the Indebtedness or
Loan Documents. If, at any time, the applicable Legal Requirements render
usurious any amount called for in any Loan Document, then it is Grantor’s,
Trustee’s and Beneficiary’s express intent that such document be immediately
deemed reformed, and the amounts collectible be reduced or spread, without the
necessity of the execution of any new documents, so as to comply with the then
applicable law but so as to permit the recovery of the fullest amount otherwise
called for in such Loan Documents.

 

9.        In the event of the
passage after the date of this Deed of Trust of any applicable law changing in
any way the laws for the taxation of deeds of trust or mortgages and/or the
debts secured thereby so as to affect this Deed of Trust, Beneficiary shall
have the right, at Beneficiary’s option, without limiting any other right or
remedy (including, without limitation, the right to demand payment of any
Indebtedness that is payable on a demand basis) to declare the Indebtedness
immediately due and payable after providing Grantor with notice of such tax,
and if such law permits Grantor to pay such tax, the failure of Grantor to pay
such tax within ten (10) days of such notice; provided further, in the event
payment of such tax by Grantor is prohibited under such law, then Grantor shall
not have the option to pay such tax, and the Indebtedness shall be due and
payable after the passage of ten (10) days of notice of such tax assessment
from Beneficiary to Grantor.

 

10.      The Loan Documents contain
the entire agreements between the parties relating to the subject matter hereof
and thereof, and all prior agreements relative thereto which are not contained
herein or therein are terminated. The Loan Documents may be amended, revised,
waived, discharged, released or terminated only by a written instrument or
instruments, executed by the party against which enforcement of the amendment,
revision, waiver, discharge, release or termination is asserted. Any alleged
amendment, revision, waiver, discharge, release or termination which is not so
documented shall not be effective as to any party.

 

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

 

33

 

12.      If any or all of the
proceeds of the Note have been used to extinguish, extend or renew any
indebtedness heretofore existing, then, to the extent of such funds so used,
Beneficiary, the Indebtedness and this Deed of Trust shall be subrogated to all
the rights, claims, Liens, titles and interests heretofore existing to secure
the indebtedness so extinguished, extended or renewed, and the former rights,
claims, Liens, titles and interests, if any, are not waived but rather are
continued in full force and effect in favor of Beneficiary and are merged with
the Liens created herein as cumulative security for the repayment and
performance of the Indebtedness.

 

13.      THE LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE
LAWS OF THE STATE OF TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.

 

14.      The section and paragraph
entitlements hereof are inserted for convenience of reference only and shall in
no way alter, modify or define, or be used in construing, the text of such
sections or paragraphs. Whenever the context hereof requires, references herein
to the singular number shall include the plural, and likewise, the plural shall
include the singular. Words denoting gender shall be construed to include the
masculine, feminine and neuter, where appropriate, and specific enumeration
shall not exclude the general but shall be considered as cumulative.

 

15.      If there is more than one
Grantor or other Loan Party, the obligations of all such Loan Parties shall be
joint and several.

 

16.      Upon payment and performance
in full of all Indebtedness and termination of any and all commitments by
Beneficiary to extend credit to Grantor and termination of all loans made by
Beneficiary to Grantor (whether advances are optional or obligatory), the Liens
created by this Deed of Trust shall be released by Beneficiary.

 

17.      Beneficiary may sell, assign
or grant participations in any of the Indebtedness and any of the Loan
Documents including, without limit, this Deed of Trust. Beneficiary may provide
information relating to this Deed of Trust, the Property, Grantor, or any other
Loan Party to Beneficiary’s parent, affiliates, subsidiaries, service
providers, assignees, participants and prospective assignees and participants.

 

18.      Grantor waives any duty on
the part of Beneficiary and agrees that Grantor is not relying upon or
expecting Beneficiary to disclose to the Grantor any fact now or later known by
Beneficiary relating to the existence, liabilities or financial condition of
any guarantor of the Indebtedness or any other Loan Party. Grantor further
agrees that no security or guaranty now or later held by Beneficiary for the
payment or performance of any Indebtedness, whether from any guarantor, any other
Loan Party or otherwise, and whether in the nature of a security interest,
pledge, lien, assignment, set-off, suretyship, guaranty, indemnity, insurance
or

 

34

 

otherwise, shall affect
in any manner the Liens created under this Deed of Trust, and Beneficiary, in
its sole discretion, without notice to the Grantor may release, exchange,
modify, enforce and otherwise deal with any security or guaranty without
affecting in any manner the Liens under this Deed of Trust. Grantor
acknowledges and agrees that Beneficiary has no obligation to acquire or
perfect any Lien on any assets, whether realty or personalty, or to obtain any
guaranty to secure payment or performance of the Indebtedness, and Grantor is
not relying upon any guaranty which Beneficiary has or may have or assets in
which Beneficiary has or may have a Lien for payment or performance of the
Indebtedness.

 

19.      Notwithstanding any prior
revocation, termination or discharge of this Deed of Trust (except as to the
rights of subsequent intervening bonafide purchasers or lien holders), the
effectiveness of this Deed of Trust shall automatically continue or be
reinstated in the event that (a) any payment received or credit given by
Beneficiary in respect of the Indebtedness is returned, disgorged or rescinded
as a preference, in impermissible set-off, fraudulent conveyance, diversion of
trust funds, or otherwise under any applicable law, in which case this Deed of
Trust shall be enforceable as if the returned, disgorged or rescinded payment
or credit had not been received or given, whether or not Beneficiary relied
upon this payment or credit or changed its position as a consequence of it, or
(b) any liability is sought to be imposed against Beneficiary relating in any
manner as to which Grantor agreed to indemnify Beneficiary under this Deed of
Trust including, without limit, as to the presence of Hazardous Materials or
Hazardous Materials Contamination on, in, about or affecting the Property,
whether this matter is known or unknown, now or later exists (excluding only
matters which arise after any acquisition by Beneficiary of the Property by
foreclosure, deed in lieu of foreclosure or otherwise, to the extent due to the
wrongful act or omission of Beneficiary), in which case this Deed of Trust
shall be enforceable to the extent of all liability, costs and expenses
(including, without limit, attorneys’ fees, whether inside or outside counsel
is used, incurred by Beneficiary as the direct or indirect result thereof. In
the event of continuation or reinstatement of this Deed of Trust, Grantor
agrees, upon demand by Beneficiary, to execute and deliver to Beneficiary those
documents which Beneficiary determines are appropriate to further evidence (in
the public records or otherwise) this continuation or reinstatement, although
the failure of Grantor to do so shall not affect in any way the reinstatement
or continuation. If Grantor does not execute and deliver to Beneficiary upon
demand such documents, Beneficiary and each employee of Beneficiary is
irrevocably appointed (which appointment is coupled with an interest) the true
and lawful attorney of Grantor (with full power of substitution) to execute and
deliver such documents in the name and on behalf of Grantor.

 

O.       INDEMNITY.

 

Grantor shall indemnify,
defend, and hold harmless Beneficiary from and against any and all liability,
damage, loss, cost, or expense (including, without limitation, attorneys’ fees
and expenses, whether inside or outside counsel is used), action, proceeding,
claim or dispute incurred or suffered by Beneficiary, whether voluntarily or
involuntarily incurred or suffered, in

 

35

 

respect of the following:
(a) any litigation concerning this Deed of Trust, the other Loan Documents or
the Property, or any interest of Grantor or Beneficiary therein, or the right
of occupancy thereof by Grantor or Beneficiary, whether or not any such
litigation is prosecuted to a final, non-appealable judgment; (b) any dispute,
including disputes as to the disbursement of proceeds of the Note not yet
disbursed, among or between any of the constituent parties or other partners or
venturers of Grantor (if Grantor is a general or limited partnership) or among
or between any employees, officers, directors, or shareholders of Grantor (if
Grantor is a corporation), or among or between any members, trustees or other
responsible parties (if Grantor is an association, trust or other entity); (c)
any action taken or not taken by Beneficiary or Trustee which is allowed or
permitted under this Deed of Trust or any of the other Loan Documents relating
to Grantor, the Property, any other Loan Party, any constituent parties or
otherwise in connection with the Loan Documents including, without limitation,
the protection or enforcement of any Lien, security interest or other right,
remedy or recourse created or afforded by this Deed of Trust or any other Loan
Document; and (d) any action brought by Beneficiary or Trustee against Grantor
under this Deed of Trust or any other Loan Document, whether or not such action
is prosecuted to a final, non-appealable judgment INCLUDING ANY CLAIMS, LOSSES, COSTS, DAMAGES, LIABILITIES, OBLIGATIONS
AND EXPENSES RESULTING FROM BENEFICIARY’S OWN NEGLIGENCE, except and
to the extent, but only to the extent, caused by Beneficiary’s gross negligence
or willful misconduct. Beneficiary and/or Trustee may employ an attorney or
attorneys to protect or enforce any rights, remedies or recourses under this
Deed of Trust or any other Loan Document and to advise and defend Beneficiary
and/or Trustee with respect to any such actions and other matters. Grantor
shall reimburse Beneficiary and/or Trustee for their respective attorneys’
fees, whether inside or outside counsel is used, and expenses (including
expenses and costs for experts) immediately upon receipt of a written demand
therefor, whether on a monthly or other time interval, and whether or not an
action is actually commenced or concluded. Unless otherwise specified herein,
all reimbursement and indemnity obligations hereunder shall become due and
payable upon demand and shall bear interest from the date paid by Beneficiary
until reimbursed at the highest per annum rate of interest applicable to any of
the Indebtedness, but not in excess of the maximum rate permitted by law. The
provisions of this Paragraph shall survive repayment and performance of the
Indebtedness, the release of the Liens of this Deed of Trust, any foreclosure
(or action in lieu of foreclosure) and the exercise by Beneficiary of any and
all remedies set forth herein or in the Loan Documents.

 

P.        PARTIAL RELEASES.

 

Reference is
hereby made to the Loan Agreement for the terms and conditions under which
Grantor may, so long as no Event of Default has occurred and is continuing,
obtain a release of less than all of the Property from time to time
contemporaneously with a sale of the same to a third party.

 

Q.       NOTICE OF FINAL AGREEMENT.

 

THIS
AGREEMENT AND THE OTHER “LOAN AGREEMENTS” (AS SUCH TERM IS DEFINED IN SECTION
26.02(a)(2) OF THE TEXAS BUSINESS AND COMMERCE CODE, AS AMENDED) REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE

 

36

 

PARTIES.
THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.

 

R.        WAIVER OF RIGHT TO TRIAL BY JURY.

 

GRANTOR
AND BENEFICIARY ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL
ONE BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS CHOICE, KNOWINGLY AND VOLUNTARILY
AND FOR THE MUTUAL BENEFIT OF ALL PARTIES WAIVES ANY RIGHT TO TRIAL BY JURY IN
THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY
WAY RELATED TO, THIS DEED OF TRUST, ANY OTHER LOAN DOCUMENT OR THE
INDEBTEDNESS.

 

S.        RESTATEMENT.

 

This Deed of Trust is
intended to and does completely amend and restate the Original Deed of Trust in
its entirety, without novation, and is intended as a replacement of, and is in
substitution for the Original Deed of Trust, but is not intended as a novation
of the Original Deed of Trust or any of the obligations evidenced by the Original
Deed of Trust.

 

EXECUTED as of, although
not necessarily on, the day and year first above written.

 

	
   

  	
   

  	
   

  	
  GRANTOR:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  FRISCO SQUARE LAND,
  LTD.

  
	
   

  	
   

  	
   

  	
  a Texas limited
  partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Fairways FS Land, LLC 

  
	
   

  	
   

  	
   

  	
  a Texas limited
  liability company 

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  James C. Leslie

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  James
  C. Leslie, Manager

  

 

37

 

	
  STATE OF TEXAS

  	
  §

  
	
   

  	
  §

  
	
  COUNTY OF

  	
  §

  

 

This instrument
was acknowledged before me on March 10, 2006 by James C. Leslie, Manager of
Fairways FS Land, LLC, a Texas limited liability company, in its capacity as
the general partner of FRISCO SQUARE LAND,
LTD., a Texas limited partnership, on behalf of said limited
liability company and partnership.

 

	
   

  	
  JULIE WAKEFIELD

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notary Public, State of Texas

  	
   

  	
   

  	
  /s/
  Julie Wakefield

  	
   

  
	
  [SEAL]

  	
  My Commission Expires

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  JULY 2, 2007

  	
   

  	
   

  	
  Notary
  Public - State of Texas

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  My Commission Expires:

  	
   

  	
   

  	
   

  	
  /s/
  Julie Wakefield

  	
   

  
	
  July
  2, 2007

  	
   

  	
   

  	
   

  	
  (Printed Name of Notary
  Public)

  

 

 

FOLLOWING
RECORDATION, RETURN TO:

 

Comerica Bank

P.O. Box 650282

Dallas, Texas 75265-0282

Attention: Commercial Lending Services, Mail Code 6514

 

38

 

EXHIBIT A

 

TRACT
1 

15.4399 ACRES

 

BEING a tract of land
situated in the W. B. Watkins Survey Abstract No. 1004, in the City of Frisco,
Collin County, Texas; said tract being part of land conveyed to Frisco Square,
Ltd. as recorded in Collin County Clerk’s File No. 2000-0081361 Deed Records
Collin County, Texas (DRCCT); and being more particularly described as follows:

 

BEGINNING at a 1/2” iron
rod with “HAT” cap set for corner on the east line of Dallas North Tollway (a
300 ft. right-of-way), said point being South 06°36’16” East a distance of
24.12 ft. from an “X” found cut in concrete at the intersection of said east
line with the south line of Main Street (old FM 720, a variable width
right-of-way), as recorded in C.C. #94-0048748 and C.C. #94-0083961 DRCCT; said
iron rod also being at the intersection of said east line with the south line
of a 24 ft. wide strip of land conveyed to the City of Frisco as recorded in
Collin County Clerk’s File No. 2000-0081361 DRCCT;

 

THENCE along the south
line of said City of Frisco tract with a circular curve to the left having a
central angle of 03°27’28”, a radius of 5,793.61 feet, a tangent length of
174.87 feet, and a chord of North 87°28’04” East 349.58 feet, for an arc
distance of 349.63 feet to a 1/2” iron rod set with “HAT” cap at said curve’s
point of tangency;

 

THENCE North 85°44’20”
East, continuing along said south line, for a distance of 8.48 feet to a 1/2”
iron rod set with “HAT” cap for corner;

 

THENCE North 86°07’47”
East, continuing along said south line, continuing along said south line for a
distance of 776.11 ft. to a 1/2” iron rod with “HAT” cap set for corner on the
west line of Lot B1-10 of Frisco Square Phase 2 as conveyed to the City of
Frisco and recorded in Cabinet P Page 724 DRCCT;

 

THENCE South 03°52’13”
East, departing said south line and along the west line of said City of Frisco
tract, for a distance of 99.38 ft. to a 1/2” iron rod with “HAT” cap set for
corner;

 

THENCE South 83°23’44”
West, along a north line of said Frisco tract, for a distance of 184.15 ft. to
a 1/2” iron rod with “HAT” cap set for corner;

 

THENCE South 06°36’16”
East, along a west line of said Frisco tract, for a distance of 67.00 ft. to a
1/2” iron rod with “HAT” cap set for corner;

 

THENCE South 83°23’44”
West, along a north line of said Frisco tract, for a distance of 105.76 ft. to
a 1/2” iron rod with “HAT” cap set for corner;

 

THENCE South 06°36’16”
East, along a west line of said Frisco tract, for a distance of 246.50 ft. to a
1/2” iron rod with “HAT” cap set for corner;

 

THENCE North 83°23’44”
East, along a south line of said Frisco tract, for a distance of 57.76 ft. to a
1/2” iron rod with “HAT” cap set for corner;

 

THENCE South 06°36’16”
East, along a west line of said Frisco tract, for a distance of 111.50 ft. to a
1/2” iron rod with “HAT” cap set for corner;

 

THENCE North 83°23’44”
East, along a south line of said Frisco tract, for a distance of 62.41 ft. to a
1/2” iron rod with “HAT” cap set for corner at the northwest corner of future
Lot B1-8 per deed to Frisco Square Properties, Ltd. as recorded in Collin
County Clerk’s File No. 2003-0213220 DRCCT;

 

THENCE South 06°36’16”
East, along the west line of said future Lot B1-8, for a distance of 87.25 ft.
to a 1/2” iron rod with “HAT” cap set for corner;

 

1

 

THENCE South 83°23’44”
West, continuing along said west line, for a distance of 25.33 ft. to a 1/2”
iron rod with “HAT” cap set for corner;

 

THENCE South 06°36’16”
East, continuing along said west line, for a distance of 81.75 to a 1/2” iron
rod with “HAT” cap set for corner on the north line of Frisco Square Blvd.
(recorded as W. Main St.) per the Conveyance Plat recorded in Cabinet N Page
690 DRCCT;

 

THENCE South 83°23’44”
West, along said north line, for a distance of 902.58 ft. to a 1/2” iron rod
with “HAT” cap set for corner at the southeast end of a corner clip at the
intersection of said north line with the east line of said Dallas North
Tollway;

 

THENCE North 51°36’16”
West, along said corner clip, for a distance of 28.28 ft. to a 1/2” iron rod
with “HAT” cap set for corner at the northwest end of said corner clip;

 

THENCE South 83°23’44”
West, for a distance of 10.00 ft. to a 1/2” iron rod with “HAT” cap set for
corner on the east line of said Dallas North Tollway;

 

THENCE North 06°36’16”
West, along said east line, for a distance of 735.46 ft. to the POINT OF
BEGINNING and containing 15.4399 acres of land.

 

TRACT 2 

14.1760 ACRES

 

BEING a tract of land
situated in the W. B. Watkins Survey Abstract No. 1004, in the City of Frisco,
Collin County, Texas; said tract being part of land conveyed to Frisco Square,
Ltd. as recorded in Collin County Clerk’s File No. 2000-0081361 Deed Records
Collin County, Texas (DRCCT); and being more particularly described as follows:

 

BEGINNING at a 1/2” iron
rod with “HAT” cap set for corner on the east line of Dallas North Tollway (a
300 ft. right-of-way), said point being at the intersection of said east line
with the south line of Frisco Square Blvd. (a 73 ft. right-of-way) recorded (as
West Main St.) in Cabinet N Page 690 DRCCT;

 

THENCE North 83°23’44”
East, departing said east line, and along said south line, for a distance of
10.00 ft. to a 1/2” iron rod with “HAT” cap set for corner at the southwest end
of a corner clip at said intersection;

 

THENCE North 38°23’44”
East, along said corner clip, for a distance of 28.28 ft. to a 1/2” iron rod
with “HAT” cap set for corner;

 

THENCE North 83°23’44”
East, continuing along said south line, for a distance of 978.97 ft. to a 1/2”
iron rod with “HAT” cap set for corner;

 

THENCE North 06°36’16”
West, continuing along said south line, for a distance of 12.00 ft. to a 1/2”
iron rod with “HAT” cap set for corner;

 

THENCE North 83°23’44”
East, continuing along said south line, for a distance of 30.00 ft. to a 1/2”
iron rod with “HAT” cap set for corner at the intersection of said south line
with the west line of Church Street (a 121 ft. right-of-way) as recorded in
Cabinet N Page 690 DRCCT;

 

THENCE South 06°36’16”
East, along said west line, for a distance of 606.00 ft. to a 1/2” iron rod
with “HAT” cap set for corner at the intersection of said west line with the
south line of Page Street (a 67 ft. right-of-way) as recorded in Cabinet N Page
690 DRCCT;

 

THENCE South 83°23’44”
West, along the project south line of said Page Street, for a distance of
1,008.97 ft. to a 1/2” iron rod with “HAT” cap set for corner;

 

THENCE South 38°23’44”
West, for a distance of 28.28 ft. to a 1/2” iron rod with “HAT” cap set for
corner;

 

2

 

THENCE South 83°23’44”
West, for a distance of 10.00 ft. to a 1/2” iron rod with “HAT” cap set for
corner on the east line of said Dallas North Tollway;

 

THENCE North 06°36’16”
West, along said east line, for a distance of 594.00 ft. to the POINT OF
BEGINNING and containing 14.1760 acres of land.

 

TRACT 3 

2.5088 ACRES

 

BEING a tract of land
situated in the W.B. Watkins Survey Abstract No. 1004, in the City of Frisco,
Collin County, Texas; said tract being part of land conveyed to Frisco Square,
Ltd. as recorded in Collin County Clerk’s File No. 2000-0081361 Deed Records
Collin County, Texas (DRCCT); and being more particularly described as follows:

 

BEGINNING at a 1/2” iron
rod with “HAT” cap set for corner at the intersection of the south line of Page
Street (a 67 ft. right-of-way) with the west line of West Library Street (a 64
ft. right-of-way) as recorded in Cabinet N Page 690 DRCCT;

 

THENCE South 06°36’16”
East, along said west line, for a distance of 252.00 ft. to a 1/2” iron rod
with “HAT” cap set for corner on the north line of Burnham Street (a 48.5 ft.
right-of-way) as recorded in Cabinet N Page 690 DRCCT;

 

THENCE South 83°23’44”
West, along said north line, for a distance of 2.50 ft. to a 1/2” iron rod with
“HAT” cap set for corner;

 

THENCE South 06°36’16”
East, departing said north line, for a distance of 48.50 ft. to a 1/2” iron rod
with “HAT” cap set for corner on the south line of said Burnham Street;

 

THENCE South 83°23’44”
West, along the project south line of Burnham Street, for a distance of 361.58
ft. to a 1/2” iron rod with “HAT” cap set for corner at the intersection of
said projected south line with the future west line of Church Street;

 

THENCE North 06°36’16”
West, along said future west line, for a distance of 300.50 ft. to a 1/2”  iron rod with “HAT” cap set for corner on
the south line of said Page Street;

 

THENCE North 83°23’44”
East, along said south line, for a distance of 364.08 ft. to the POINT OF
BEGINNING and containing 2.5088 acres of land.

 

TRACT 4 

19.7693 ACRES

 

BEING a tract of land
situated in the W.B. Watkins Survey Abstract No. 1004, in the City of Frisco,
Collin County, Texas; said tract being part of a tract conveyed to Frisco
Square Ltd., as recorded in Collin County Clerk’s File No. 2000-0081361 Deed
Records Collin County, Texas (DRCCT), and being more particularly described as
follows:

 

BEGINNING at a 1/2” iron
rod with “HAT” cap set for corner at the intersection of the south line of a 24
ft. wide strip of land conveyed to the City of Frisco as recorded in Collin
County Clerk’s File No. 2000-0081361 DRCCT with the east line of a Lot F1-9 of
Frisco Square Phase 2 as recorded in Cabinet P Page 724 DRCCT, said Lot F1-9 as
conveyed to the City of Frisco per said Frisco Square Phase 2 final plat;

 

THENCE North 86°07’47”
East, along the south line of said City of Frisco 24 ft.  wide strip of land, for a distance of
162.14 ft. to a 1/2” iron rod with “HAT” cap set for corner and for the
beginning of a circular curve to the right;

 

THENCE continuing along
said south line, with said circular curve to the right having a central angle
of 15°46’18”, a radius of 2,608.02 ft., a tangent length of 361.23 ft., and a
chord of South 85°59’04” East 715.63 ft., for an arc distance of 717.90 ft. to
a 1/2” iron rod with “HAT” cap set for corner and for a point of tangency;

 

3

 

THENCE South 78°05’56”
East, continuing along said south line, for a distance of 162.10 ft. to a 1/2”
iron rod with “HAT” cap set for corner at the intersection of said south line
with the west line of John W. Elliot Drive (a 60 ft. right-of-way);

 

THENCE South 12°16’44”
West, along said west line, for a distance of 536.63 ft. to a 1/2” iron rod
with “HAT” cap set for corner at the intersection of said west line with the
north line of a tract conveyed to the City of Frisco as recorded in Collin
County Clerk’s File No. 2000-0081361 DRCCT;

 

THENCE South 83°23’44”
West, departing said west line and along said north line, for a distance of
8.15 ft. to a 1/2” iron rod with “HAT” cap set for corner at the northwest
corner of said Frisco tract;

 

THENCE South 06°36’16”
East, along the west line of said Frisco tract, for a distance of 23.82 ft. to
a 1/2” iron rod with “HAT” cap set for corner at the intersection of said west
line with the west line of said John W. Elliot Drive;

 

THENCE South 12°16’44”
West, along the west line of said John W. Elliot Drive, for a distance of
865.29 ft. to a 1/2” iron rod with “HAT” cap set for corner at the intersection
of said west line with the south line of Ash Street (a 60 ft. right-of-way);

 

THENCE South 77°43’16”
East, along the south line of said Ash Street, for a distance of 24.50 ft. to a
1/2” iron rod with “HAT” cap set for corner on the west line of a tract
conveyed to the City of Frisco as recorded in County Clerk’s File No.
2000-0081361 DRCCT;

 

THENCE South 12°16’44”
West, along said west line, for a distance of 82.73 ft. to a 1/2” iron rod with
“HAT” cap set for corner;

 

THENCE South 83°23’44”
West, along a north line of said Frisco tract, for a distance of 94.97 ft. to a
1/2” iron rod with “HAT” cap set for corner on the east line of Frisco Square
Phase 1 as recorded in Cabinet N page 637;

 

THENCE North 06°36’16”
West, departing said south line, for a distance of 42.75 ft. to a 1/2” iron rod
with “HAT” cap set for corner on the north line of said Burnham Street;

 

THENCE South 83°23’44”
West, along said north line, for a distance of 239.25 ft. to a 1/2” iron rod
with “HAT” cap set for corner at the intersection of said north line with the
east line of East Library Street (a 64 ft. right-of-way) as recorded in Cabinet
N Page 690 DRCCT;

 

THENCE North 06°36’16”
West, along said east line, for a distance of 252.00 ft. to a 1/2” iron rod
with “HAT” cap set for corner at the intersection of said east line with the
south line of Page Street (a 67 ft. right-of-way) as recorded in Cabinet N Page
690 DRCCT;

 

THENCE North 83°23’44”
East, along said south line, for a distance of 2.50 ft. to a 1/2” iron rod with
“HAT” cap set for corner;

 

THENCE North 06°36’16”
West, departing said south line, for a distance of 67.00 ft. to a 1/2” iron rod
with “HAT” cap set for corner on the north line of said Page Street;

 

THENCE South 83°23’44”
West, along said north line, for a distance of 129.49 ft. to a 1/2” iron rod
with “HAT” cap set for corner at the intersection of said north line with the
east line of Library Street (a 121 ft. right-of-way) as recorded in Cabinet N
Page 690 DRCCT;

 

THENCE North 06°36’16”
West, along said east line, for a distance of 588.00 ft. to a 1/2” iron rod
with “HAT” cap set for corner at the southwest corner of future Lot F1-8 per
deed to Frisco Square Properties, Ltd. as recorded in Collin County Clerk’s
File No. 2003-0213220 DRCCT;

 

THENCE North 83°23’44”
East, departing said east line, and along the south line of said future Lot
F1-8, for a distance of 30.00 ft. to a 1/2” iron rod with “HAT” cap set for
corner;

 

4

 

THENCE North 06°36’16”
West, continuing along said south line, for a distance of 12.00 ft. to a 1/2”
iron rod with “HAT” cap set for corner;

 

THENCE North 83°23’44”
East, continuing along said south line, for a distance of 76.39 ft. to a 1/2”
iron rod with “HAT” cap set for corner at the southeast corner of
said future Lot F1-8;

 

THENCE North 06°36’16”
West, along the east line of said future Lot F1-8, for a distance of 81.75 ft.
to a 1/2” iron rod with “HAT” cap set for corner;

 

THENCE South 83°23’44”
West, continuing along said east line, for a distance of 25.33 ft. to a 1/2”
iron rod with “HAT” cap set for corner;

 

THENCE North 06°36’16”
West, continuing along said east line, for a distance of 87.25 ft. to a 1/2”
iron rod with “HAT” cap set for corner on a south line of said City of Frisco
Lot F1-9;

 

THENCE North 83°23’44”
East, along said south line, for a distance of 15.91 ft. to a 1/2” iron rod
with “HAT” cap set for corner;

 

THENCE North 06°36’16”
West, along an east line of said Lot F1-9, for a distance of 58.99 ft. to a 1/2”
iron rod with “HAT” cap set for corner;

 

THENCE North 83°23’44”
East, along a south line of said Lot F1-9, for a distance of 209.26 ft. to a
1/2” iron rod with “HAT” cap set for corner;

 

THENCE North 06°36’16”
West, along an east line of said Lot F1-9, for a distance of 249.00 ft. to a
1/2” iron rod with “HAT” cap set for corner;

 

THENCE South 83°23’44” West,
along a north line of said Lot F1-9, for a distance of 252.44 ft. to a 1/2”
iron rod with “HAT” cap set for corner;

 

THENCE North 03°52’13”
East, along an east line of said Lot F1-9, for a distance of 84.59 ft. to a 1/2”
iron rod with “HAT” cap set for corner;

 

THENCE South 86°07’47”
West, along a north line of said Lot F1-9, for a distance of 155.29 ft. to a
1/2” iron rod with “HAT” cap set for corner;

 

THENCE North 03°52’13”
East, along an east line of said Lot F1-9, for a distance of 96.00 ft. to the
POINT OF BEGINNING and containing 21.5875 acres SAVE AND EXCEPT THE FOLLOWING
DESCRIBED TRACT:

 

SAVE AND EXCEPT TRACT
FROM TRACT 4

 

BEING a tract conveyed to
the City of Frisco as recorded in Collin County Clerk’s File No. 2000-0081361
Deed Records Collin County, Texas (DRCCT);

 

COMMENCING at a 1/2” iron
rod with “HAT” cap set for corner at the intersection of the north line of Page
Street (a 67 ft. right-of-way) with the east line of Library Street (a 114 ft.
right-of-way) as recorded in Cabinet N Page 690 DRCCT; Thence North 06°36’16”
West, for a distance of 414.00 ft.; Thence North 83°23’44” East, departing said
east line, for a distance of 128.50 ft. to a 1/2” iron rod with “HAT” cap set
for corner and for the POINT OF BEGINNING at the northwest corner of said
tract;

 

THENCE North 83°23’44”
East, along the north line of said tract, for a distance of 255.49 ft. to a 1/2”
iron rod with “HAT” cap set for corner at the northeast corner of said tract;

 

THENCE South 06°36’16”
East, along the east line of said tract, for a distance of 310.00 ft. to a 1/2”
iron rod with “HAT”

 

5

 

cap set for corner at the
southeast corner of said tract;

 

THENCE South 83°23’44”
West, along the south line of said tract, for a distance of 248.19 ft. to a 1/2”
iron rod with “HAT” cap set for corner and for the beginning of a circular
curve to the left;

 

THENCE continuing along
said south line with said circular curve to the left having a central angle of
04°11’05”, a radius of 100.00 ft, a tangent length of 3.65 ft., and a chord of
South 81°18’11” West 7.30 ft., for an arc distance of 7.30 ft. to a 1/2” iron
rod with “HAT” cap set for corner at the southwest corner of said tract;

 

THENCE North 06°36’16”
West, along the west line of said tract, for a distance of 310.27 ft. to the
POINT OF BEGINNING and containing 1.8182 acres of land.

 

LEAVING A NET AREA OF
19.7693 ACRES OF LAND FOR TRACT 4.

 

TRACT 5

1.5713 ACRES

 

BEING a tract of land
situated in the W. B. Watkins Survey Abstract No. 1004, in the City of Frisco,
Collin County, Texas; said tract being part of a called 1.6267 acre tract
described as Tract III, as conveyed to Frisco Square Ltd., as recorded in
Collin County Clerk’s File No. 2000-0081361 Deed Records Collin County, Texas
(DRCCT), and being more particularly described as follows:

 

BEGINNING at a 1/2” iron
rod with “HAT” cap set for corner on the east line of John W. Elliot Drive (a
60 ft. right-of-way), said point being at the intersection of said east line
with the south line of a 24 ft. wide strip of land conveyed to the City of
Frisco as recorded in Collin County Clerk’s File No. 2000-0081361 DRCCT; said
point being South 12°16’44” West a distance of 24.00 ft. from the intersection
of said east line with the south line of Main Street (an 80 ft. right-of-way);

 

THENCE South 78°05’56”
East; along the south line of said City of Frisco tract, for a distance of
100.00 ft. to a 1/2” iron rod with “HAT” cap set for corner on the west line of
a tract conveyed to Sutton Enterprises, L.C. as recorded in Collin County Clerk’s
File No. 96-0106843 DRCCT;

 

THENCE South 12°16’44”
West, departing said south line and along the common line of said Tract III and
said Sutton Enterprises tract, for a distance of 57.56 ft. to a 1/2” iron rod
with “HAT” cap set for corner at the southwest corner of said Sutton tract;

 

THENCE South 77°53’30”
East, along the south line of said Sutton tract, for a distance of 61.81 ft. to
a 1/2” iron rod with “HAT” cap set for corner at the southeast corner of said
Sutton tract and the southwest corner of a tract conveyed to Mary Thatcher
Christie as recorded in County Clerk’s File No. 95-0011327 DRCCT;

 

THENCE South 78°08’74”
East, along the south line of said Christie tract, for a distance of 138.19 ft.
to a 1/2” iron rod found corner at the southeast corner of said Christie tract
and on the west line of the Burlington Northern Railroad (a variable width
right-of-way);

 

THENCE South 12°16’44”
West, along said west line, for a distance of 210.00 ft. to a 1/2” iron rod found
for corner on the north line Main Street (an 80 ft. right-of-way);

 

THENCE North 77°41’49”
West, departing said west line and along said north line, for a distance of
300.00 ft. to a 1/2” iron rod found for corner at the intersection of said
north line with the east line of said John W. Elliot Drive;

 

THENCE North 12°16’44”
East, along said east line, for a distance of 265.58 ft. to the POINT OF
BEGINNING and containing 1.5713 acres of land.

 

6

 

TRACT 6

0.8116 ACRES

 

BEING a tract of land
situated in the W. B. Watkins Survey Abstract No. 1004, in the City of Frisco,
Collin County, Texas; said tract being all of a called 2.0566 acre tract
described as Tract II, as conveyed to Frisco Square Ltd., as recorded in Collin
County Clerk’s File No. 2000-0081361 Deed Records Collin County, Texas (DRCCT),
and being more particularly described as follows:

 

BEGINNING at an “X” found
cut in concrete at the intersection of the east line of John W. Elliot Drive (a
60 ft. right-of-way) with the south line of Main Street (an 80 ft.
right-of-way);

 

THENCE South 77°42’33”
East, along said south line, for a distance of 300.08 ft. to a 1/2” iron rod
with “HAT” cap set for corner on the west line of the Burlington Northern
Railroad (a variable width right-of-way);

 

THENCE South 12°51’45”
West, along said west line, for a distance of 66.78 ft. to a 1/2” iron with “HAT”
cap set for corner at the intersection of said west line with the north line of
a tract conveyed to the City of Frisco as recorded in Collin County Clerk’s
File No. 2000-0081361 DRCCT;

 

THENCE South 83°23’44”
West, along said north line, for a distance of 316.43 ft. to a 1/2” iron rod
with “HAT” cap set for corner at the intersection of said north line with the
east line of said John W. Elliot Drive;

 

THENCE North 12°16’44”
East, along said east line, for a distance of 169.25 ft. to the POINT OF
BEGINNING and containing 0.8116 acres of land.

 

SAID SIX TRACTS
COMPRISING A TOTAL OF 54.2769 ACRES OF LAND, MORE OR LESS.

 

7

 

EXHIBIT “B”

 

PERMITTED EXCEPTIONS

 

EXHIBIT B

 

1.         Real estate taxes and
assessments for the year 2005 and subsequent years;

 

2.         Thirty-five (35) foot
wide temporary drainage easement for a drainage ditch and berm granted by F. M.
720-Tollway, Ltd., to the City of Frisco, dated September 1, 1994, filed for
record on December 28, 1994 and recorded under Clerk’s File No. 94-0112681,
Land Records, Collin County, Texas. (As to Tract 2 only)

 

3.         Ten (10) foot wide line
easement granted by HRC Ranch, Ltd., to the City of Frisco, dated August 20,
1997, filed for record September 2, 1997, and recorded in Volume 3988, Page
2314, Land Records, Collin County, Texas. (As to Tract 2 only)

 

4.         Restrictions limiting
access to the Dallas North Tollway as set out in Deed recorded under Clerk’s
File No. 94-0048748, Land Records, Collin County, Texas.

 

5.         Terms, provisions, and
conditions contained in Agreement executed by and between the City of Frisco,
and F. M. 720-Tollway, Ltd., dated January 6, 1994, filed of record on May 19,
12994 and recorded under Clerk’s File No. 94-0048747, Land Records, Collin
County, Texas.

 

6.         Terms, provisions,
easements and conditions contained in Agreement executed by and between the
City of Frisco, and F. M. 720-Tollway, Ltd., dated July 28, 2000, filed for
record on August 1, 2000 and recorded in Volume 4721, Page 2665, Land Records,
Collin County, Texas.

 

7.         One-half of all the
mineral rights in connection with the land are excepted herefrom, as reserved
by John W. Andrews, Trustee in instrument recorded in Volume 1426, Page 14,
Land Records, Collin County, Texas.

 

8.         Terms, provisions,
conditions and restrictive covenants contained in Memorandum of Contract,
Infrastructure Agreement and Restrictive Covenants executed by and between
Frisco Square, Ltd., and FLLA, Ltd., dated July 9, 2001, filed of record on
July 10, 2001 and recorded in volume 04956, Page 01770, Land Records,
Collin County, Texas. (As to Tract 1 and 2 only)

 

9.         Fifty (50) foot wide drainage
and utility easement for constructing, operating and maintaining storm sewer
lines and systems by Frisco Square, Ltd., a Texas Limited Partnership to the
City of Frisco, dated February 5, 2002, filed for record on February 6, 2002
and recorded under Clerk’s File No. 2002-0019105, Land Records, Collin County,
County, Texas. (As to Tract 2 only)

 

10.       Six (6) foot wide easement
for underground telecommunication systems and lines granted by Frisco Square,
Ltd. to City of Frisco, dated July 6, 2004, filed for record on

 

 

July 9, 2004 and recorded
in Volume 5327, Page 3831, Land Records, Collin County, Texas.

 

11.       Easement for utility
facilities granted by Frisco Square, Ltd. to City of Frisco, dated July 6,
2004, filed for record on July 9, 2004 and recorded in Volume 5706, Page 4119,
Land Records, Collin County, Texas. (As to Tract 2 only)

 

12.       Easement for utility
facilities granted by Frisco Square, Ltd. to City of Frisco, dated July 6,
2004, filed for record on July 9, 2004 and recorded in Volume 5706, Page 4125,
Land Records, Collin County, Texas. (As to Tract 4 only)

 

13.       Thirty-five (35) foot wide
drainage ditch easement granted by Frisco Square, Ltd. To City of Frisco by
instrument dated December 6, 1994, filed for record on December 28, 1994 and recorded
under Clerk’s File No. 94-0112680, Land Records, Collin County, Texas. (As to
Tract 1 only)

 

14.       Thirty foot (30) foot wide
sanitary sewer easement for a sanitary sewer line granted by F. M. 720-Tollway
Ltd to City of Frisco by instrument dated December 20, 1994, filed for record
on December 28, 1994 and recorded under Clerk’s File No. 94-0112679, Land
Records, Collin County, Texas. (As to Tract 4 only)

 

15.       Fifteen (15) foot wide
utility easement granted by Terry N. Tomlin, Trustee to City of Frisco, dated
January 16, 1984, filed for record January 18, 1984 and recorded in Volume
1811, Page 759, Land Records, Collin County, Texas. (As to Tract 4 only)

 

16.       Ten (10) foot wide water
line Easement created for a water line as granted in instrument executed by
James Robert Elliott and wife, Nanella B. Elliott to City of Frisco, dated
September 9, 1997, filed September 17, 1997, recorded in Volume 3999, Page 37,
Land Records, Collin County, Texas. (As to Tract 1 only)

 

17.       Right of way and aerial
easement for electric transmission lines by and between Frisco Independent
School District and Texas Power & Light Company filed for record on March
30, 1942 and recorded in Volume 332, Page 596, Land Records, Collin County,
Texas. (As to Tract 6 only)

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