The URL can be used to link to this page

Home My WebLink AboutContract 31685��a f. � ,: ��, �^ , � ik.� ��°��i� i �-'��i'f�ic,� i �� e u � —��--- . CONSENT TO DEED OF TRUST LIEN UPON LEASEHOLD FORT WORTH MEACHAM INTERNATIONAL AIRPORT IMPROVED AND UNIMPROVED GROUND LEASE AGREEMENT WITH MANDATORY IMPROVEMENTS (LEASE SITE NOS. 5-N, 6-N, 7-N, 8-N, 9-N AND 10-N) (CITY SECRETARY CONTRACT NO. 29135) This CONSENT TO DEED OF TRUST LIEN UPON LEASEHOLD ("Agreement") is made and entered into by and between the CITY OF FORT WORTH ("Lessor"); a home rule municipal corporation organized under the laws of the State of Texas; MEACHAM DEVELOPMENT, LLC ("Lessee"), a Texas limited liability company; and TEXASBANK ("Lender"), a state banking association. A. On or about September 26, 2003, Lessor and Lessee entered into City Secretary Contract ("CSC") No. 29135 (the "Lease"), a lease of improved and unimproved land at Fort Worth Meacham International Airport ("Airport") known as Lease Site Nos. 5-N, 6-N, 7-N, 8-N, 9-N and 10-N (the "Leased Premises"). B. On or about October 15, 2004, Lessor, Lessee, and Southwest Bank of Texas ("Previous Lender") entered into CSC No. 30731 whereby Lessor consented to a Deed of Trust Lien Upon the Leasehoold in favar of the Previous Lender. In accordance with Section 9 of CSC No. 30731, the Previous Lender has notified Lessor in writing that upon closing and secured financing by TexasBank for the leasehold, it will release its rights, duties, obligations and responsibilities including all applicable Assignment of Rents and Modifications as provided in CSC No. 30731, thereby automatically terminating CSC No. 30731. C. In order for Lessee to obtain certain financing related to Lessee's improvements on the Leased Premises, Lessee and Lender desire Lessor to consent to the execution by Lessee of a Leasehold Deed of Trust, Security Agreement and Financing Statement ("Deed of TrusY') in favor of Lender, covering Lessee's leasehold estate in the Leased Premises and an Assignment of Tenant Leases and Rents (the "Assignment of Rents") on the Leased Premises. NOW, THEREFORE, Lessor, Lessee and the Lender hereby agree as follows: 1. The statements set forth in the recitals above are true and correct and form the basis upon which Lessor, Lessee and the Lender have entered into this Agreement. The Lease is a public document on file in Lessor's City Secretary's Office and is incorporated herein by reference for all purposes. 2. Lessor hereby consents to the execution and delivery by Lessee of the Deed of Trust and the Assignment of Rents which is attached hereto as Exhibit "A". Lessor does not adopt, ratify or approve of any of the particular provisions of the Deed of Trust or the Assignment of Rents and does not grant any right, privilege or use to Lessee, Lender, or any successor in interest pursuant to the Deed of Trust or the Assignment of Rents that is different from or more extensive than any right, privilege or use granted to Lessee under the Lease. Notwithstanding anything contrary in the Deed of Trust and the Assignment of Rents, Lessee and the Lender acknowledge, understand and agree that Lessee and the � .,��frJ��::._..._ !.''v''•J��.� DALLAS 1516412v1 �� u l� ^"'�• c�,y o;'�; �, ;�i,:.� ?iL��S'd.. ' :/ '` �1��•I � [. U �1�� ?� 5 �I�i �1 �� ^.': `�:i 1 �fl� � u I�G�`�o Lender do not have any right to convey any interests in the Leased Premises greater than those granted specificaily by the Lease. In the event of any conflict between the Deed of Trust, the Assignment of Rents and the Lease, the Lease shall control in all respects as to Lessor and as to Lessee's and the Lender's obligations to Lessor established by the Lease andlor this Agreement. In the event of any conflict between the Deed of Trust, the Assignment of Rents and this Agreement, this Agreement shall control. In the event of any conflict between this Agreement and the Lease, the Lease shall controi. 3. In the event that Lessor is required by the Lease to provide any kind of written notice to Lessee with regard to the Lease Premises, including notice of breach or default by Lessee, Lessor shall also provide a copy of such written notice to the Lender. Lessor agrees that (i) the Lender may perform any of the obligations or requirements imposed on Lessee by the Lease in order to avoid a breach or default under the Lease by Lessee and (ii) Lessor will accept the Lender's performance the same as if Lessee had performed such obligations or requirements. 4. Lessor agrees and covenants that it will not exercise any rights it may have under the Lease to cancel or terminate the Lease or to force surrender of all or part of the Leased Premises unless it first has provided the Lender with written notice of its intent to exercise any such right. The Lender shall have ten (10) calendar days from the date it receives such notice to cure any monetary default under the Lease and thirty (30) calendar days from the date it receives such notice to cure any other default under the Lease to Lessor's reasonable satisfaction in order to avoid such cancellation, termination or surrender; provided, however, that if the Lender, in good faith and after diligent and continuous efforts to remedy any non-monetary default under the Lease, cannot cure such default within thirty (30) calendar days, it shall notify Lessor in writing and Lessor and the Lender shall negotiate in good faith a reasonable amount of additional time to cure such default. 5. Lessee agrees that it will not request to or consent to any future modifications, amendments or assignments of the Lease without first receiving the Lender's written consent thereto and providing a copy of such written consent to Lessor. Lessee understands and agrees that any such consent granted by Lessor without Lender's advance written consent shall be void and specifically releases, holds harmless and agrees to indemnify Lessor for any damages that may arise as a result of any such consent. 6. In the event that Lender undertakes to enforce its rights to any collateral granted by the Deed of Trust and/or the Assignment of Rents on account default by Lessee under the Deed of Trust and/or the Assignment of Rents, Lessor will cooperate with the Lender in its efforts to assemble and/or remove any personal property of Lessee on the Premises. The Lender hereby agrees to repair any damages at or to the Airport, including the Leased Premises, caused by or incident to such removal. 7. As a condition precedent to the effectiveness of this Agreement, Lessee agrees and covenants that it will endorse all insurance policies required by the Lease to name both Lessor and the Lender as additional insureds and to cover all public risks related to the leasing, use, occupancy, maintenance, existence or location of the Leased Premises. Notwithstanding anything to the contrary in the Deed of Trust or the Assignment of Rents, the Lender hereby agrees and covenants that any and all proceeds payable under the terms of such insurance policies shall first be applied to cover the replacement of all facilities and improvements on the Leased Premises and to satisfy fully the terms and conditions of the Lease. Payment of such proceeds shall apply secondarily to secure any of Lessee's indebtedness to the Lender. 2 DALLAS 1516412v1 8. Subject to Sections 4 and 6 of this Agreement, Lessor may take all action available to it under the Lease, at law or in equity in order to protect its interests, including, but not limited to, cancellation of Lessee's interest as provided by the Lease and in accordance with this Agreement. 9. The Lender agrees that it promptly will notify Lessor in writing when the Lender has released its rights under the Deed of Trust and the Assignment of Rents. This Agreement will automatically terminate on the earlier of (i) the date as of which the Lender releases such rights or (ii) the date upon which the Lease expires or is terminated. 10. The Lender may not sell or otherwise transfer in any way any of the Lender's or Lessee's rights or interest in the Leased Premises to a third party unless Lessor consents to such sale or transfer in the form of a written agreement approved in advance by Lessor's City Council, which approval will not be unreasonably withheld or delayed, except that Lender may sell, assign or participate all or a portion of the promissory note between Lender and Lessee and ail other loan documents evidencing and securing the loan, including the Deed of Trust and the Assignment of Rents, so long as any purchaser and/or assignee takes subject to the terms of this Agreement. 11. Notices to the Lender required pursuant to the provisions of this Agreement shall be conclusively determined to have been delivered when (i) hand-delivered to the Lender, its agents, employees, servants or representatives, or (ii) deposited in the United States Mail, certified, return receipt requested, addressed as follows: TexasBank 300 West 7th Street Fort Worth, Texas 76102 Attn: Robert Molloy 12. The parties hereto understand and agree that upon expiration or termination of the Lease, all structures, improvements and fixtures on the Leased Premises, and any items permanently attached to any such structure, fixture or improvement, wili become the sole property of Lessor, free and clear of all liens, including the Deed of Trust and the Assignment of Rents, except for improvements of a non- permanent nature, all trade fixtures, machinery, furnishings and other items may specifically be removed from the Leased Premises in accordance with the Lease. In the event that the Lease expires or is terminated, Lessee and the Lender covenant and agree that nothing herein shall obligate Lessor to assume in any way Lessee's indebtedness to the Lender. 13. This Agreement may not be withdrawn, amended or modified except by a written agreement executed by the parties hereto and approved by Lessor's City Council. Lessee and Lender covenant and agree that they will not materially amend the Deed of Trust or the Assignment of Rents or assign any rights andlor obligations thereunder (except as permitted in paragraph 10), without the prior written consent of Lessor, which consent shall not be unreasonably withheld or delayed. 14. This Agreement shall be construed in accordance with the laws of the State of Texas. Venue for any action arising under the provisions of this Agreement shall lie in state courts located in Tarrant County, Texas or in the United States District Court for the Northern District of Texas, Fort Worth Division. DALLAS 15164t2v1 15. This written instrument, including any documents attached hereto and/or incorporated herein by reference, contains the entire understanding and agreement between Lessor, Lessee and Lender as to the matters contained herein. Any prior or contemporaneous oral or written agreement concerning such matters is hereby declared null and void to the extent in conflict with this Agreement. n � DALLAS 1516412v1 EXECUTED this day of April, 2005. CITY OF FO�T ,Vy RTH° ' � �/ �� By: � ; Marc Ott l �� Assistant City Manager Date: APPROVED AS TO FORM AND LEGALITY: By: ��L-��-��Ci 6�� Assistant City Attorney Date: `� � � L% — 0,? MEACHAM DEVELOPMENT, LLC a Texas li�nited �iability, company: � � 1 `' '�\� 1 \ By. � a;r, `�1� . �,�•,.�,�� Robert McMurrey, Iblanager Date: TEXASBANK s �t�� By. �. � F �� A , / Name: '��-�� - � � f� �--1,�' y � � Title: � � � i -� � � �� Date: �, � � � DALLAS 1516412v1 ATTEST: , By: Marty He rix City 5ecretary M&C: Date: �� / � Cor:�rac'� �u��or} zatio� � �� _��. 1��-�e -� d � j;:. l �� '�,t ��:� 5 � � J;i��.lJ .,,��; ,�; r,C�7��<< ��`�;' � J U i;� c.' .�-. l� U:W': �1�: li � �V ��i�i;�^oc7�11' �'`��( 9,.<<.% 7 Yl' p S�. � STATE OF TEXAS COUNTY OF TARREINT BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas, on this day personally appeared Marc Ott, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of the City of Fort Worth and that he executed the same as the act of the City of Fort Worth for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN ;R MY HAND AND SEAL OF OFEICE this day of April, 2005. KIM A. HARP fyOTARY PIJBI�IC �� , % STAT� UF T�XRS My Comm. Exp. OZ-25-2009 Notary Public in and for the State of Texas STATE OF TEXAS COUNTY OF TARRANT BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas, on this day personally appeared Robert McMurrey, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that the same was the act of Meacham Development, LLC and that he executed the same as the act of Meacham Development, LLC for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN IJNDER MY HAND AND SEAL OF OFFICE this /.3'� day of April , 2005. �.......,, �� iO�PQY.P^��.,. ��SfE M FOWLER '_� '�*j fVOTARY PUBLIC s*!,��. ,iQ j �Q�tB O} T@Y.SS '° �?r"ar`�r`�Comrn. E>cp. 11-30-2006 � .��«�'e'�::>-_,•::�:,_,--�-:.-,�-��,-��.� 6 DALLAS 1516412v1 Notary Public in and for the State of Texas STATE OF TEXAS COUNTY OF TARRANT BEFORE ME, the ndersigned � uthority, a Notary Public in and for the State of Texas, on this day personally appeared ;��. `, ?� known to me to be the person whose name is subscribed to the foregoing instrument, and ac owledged to me that the same was t he act o f TexasBank and that s/he executed the same as the act of TexasBank for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN LTNDER MY HAND AND SEAL OF OFFICE this � day of April, 2005. _, � � _ . �� _ " "�� ` ' °` � ��Y��t� �� "`��'� '' Notary Public i and for the State of Texas ,�` �, �lQ�f1,(�Y �'��.��I� ��t�� i'.�� ?t�� Tq{PpF'C��P �yl�ii�I1��i�l.�,Y,�_'t-�"%�¢'��V� � �s � ., _ � �€:3F" , . . . , r ... 486602.1 STATE OF TEXAS COUNTY OF T�.RRANT BEFORE ME, the undersigned authority, on this day personally appeared Marc A. Ott, Assistant Cit�anager, of the City of Fort Worth, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same as the act and deed of the City of Fort Worth, a municipal corporation of Tarrant County, Texas, for the purpose and consideration therein expressed and in the capacity therein stated: GIVEN UNDER MY HAND AND SEAL OF OFFICE this i lj � day of �� _ 2005. . :. _o�� ,� � MF_TTIE LAN� ; � MYCOMMISSION EXPIRES + " July 26, 2Q07 DALLAS 1516412v 1 ` , � � . � s 1 �'`j�-�� Notary Public in and for the State of Texas 7 EXHIBIT A 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 RECOROS: YOUR SOCIA� SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER APTER RECORDING RETURN TO: T EXASB ANK 300 WEST7THSTREET FORT WORTH, TEX�S 76102 ATTN: KIM HARP IoANNo.586368 TEXASBANK LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT AND FINANCING STATEMENT THE STATE OF TEXAS COUNTY OFTARRANT THIS LEASEHOLDDEED OFTRUST, SECURITYAGREEMENT, FINANCING STATEMENT, ANDABSOLUTEASSIGNMENTOF RENTS is made by MEACHAM DEVELOPMENT, LLC, a Texas limited Iiabiiity company (" Grantor" whether one or more), to Vernon W. Bryant, Jr. of Tarrant County, Texas, as Trustee ("Trustee"), for the benefit of TEXASBANK (" Bank"). For $10 and other consideration, Grantor grants to Trustee the Mortgaged Property (defined below) in trust, to secure the payment of the Debi (defined beiow), and granis to Bank a securiiy interest in the Personal Property (defined below), to secure payment of the Debt. As additional consideration, 6rantor presentiy and absolutely assigns to Bank the Rents (defined below), subject to a license back to Grantor, as described in Article Three. The conveyance of the Mortgaged Property is subject to the Permitted Encumbrances (defined below). Grantor agrees as follows: 1. Definitions. "Applicable Environmentai Laws" has the meani�g assigned to such term in Section 2.1(f) of this Mortgage. "Applicable Laws" has the meaning assigned to such term in Section 2.1(e) of this Mortgage. "Bank" means TexasBank and its successors and assigns whether or not such successor andior assign is a Financial institution. "Borrower' means Meacham Development, LIC. "Debt" means (a) all of Borrower's obiigations under the Note; (b) all amounts for which Grantor and Borrower may become obligated to Bank pursuant to the Loan Documents; and (c) ail other debt of any kind or character now or later owing by Grantor to Bank whether such other debt is evidenced by promissory note, open account, overdraft, endorsement, surety agreement or otherwise. Debt inciudes all extensions, renewals, modifications, increases and replacements of the Note, whether or not evidenced by a new promissory note or other instrument. "Grantor' means each Person designated in the first sentence of this Mortgage as Grantor and that Person's heirs, personal representatives, successors and assigns. "Guarantor' means each Person which guarantees, in whole, or in part, the repayment of the Note. "imorovements" means aii improvements of every type now or later located on the Land. "Land" means the tract or parcel of land described in Exhibit "A" attached to this Mortgage. "Leases" means ali existing and future Ieases which pertain to the Land and/or improvements. Deed of Trust Page 1 of 15 °Loan Aqreement° means the Reimbursement Agreement of even daie with this Mortgage, and all ame�dments, renewals, extensions and replacements io such. "Loan Documents" means this Mortgage, the Noie, the Loan Agreement, and ali other documents which evidence, secure, guarantee or relate to the indebtedness evidenced by the Note. "Mineral�' means aIl substances in, on, under or above the Land which are now, or may become in the future, intrinsically valuable (that is, valuable in themseives) and which �ow or may be in the future enjoyed through extraction or removal from the property, including without limitation, oil, gas, and all oth er hydrocarbons, coal, lignite, carbon dioxide and all other nonhydrocarbon gases, uranium and all other radioactive substances, and goid, silver, copper, iron and ali other metallic substances or ores. "Mortaaae" means this Deed of Trust, Security Agreement, Financing Statement and Absolute Assignment of Rents and all amendments, renewals, extensions and repiacements to such. "Mortaaaed Proaertv" means: (a) (i) Grantor's leasehold estate in and to the Land created pursuani to that certain Improved and Unimproved Ground Lease Agreement dated September 26, 2003, by and between City of Fort Worth, as Lessor and Meacham Development, LLC, as Lessee, and ali amendments thereto (hereinafter collectively referred io as the "Ground Lease°); (ii) aIl of Grantor's interest in the bed of any stream, creek, or waterway or any street, road, right-of-way or easement, open or proposed, on or adjacent to the Land; (iii) ail of Grantor's interest in any strips and gores between the land and any abutting properties; (iv) all rights of ingress and egress, and all other present or future easements and rights appurtenant to, serving or benefitting the Land; and (v) alI of Grantor's interest in the Minerals; (b) Ali improvements; (c) All equipment and all materials and other goods of every type owned by Grantor now or later situated upon the Land and (a) intended to be incorporated into the Improvements or (b) that are or become fixtures related to the Land or the Improvements; (d) AII other goods of every type, including inventory and equipment, now owned or later acquired by Grantor and now or later situated on the Land or in the improvements and that are necessary to the use or occupancy of the Improvements, but excluding equipment and inventory used principaily in Grantor's business operations; (e) All plans and specifications for the Improvements, ali of Grantor's rights under leases, construction, maintenance and other contracts (including contracts of sale) relating to the Land or the Improveme�ts, ali tenant deposiis under any Leases, all licenses, permits, certificates, documents and generai iniangibles (including trade names and symbols used in connection with the Land or the Improvements), wastewater, fresh water and other utility capacity and facilities available to or aliocated to the Land or the Improvements; {� All of Grantor's right, tiile and interest in and to ali easements and rights of way used in cannection with the Land or Improvements or as a means of ingress to or egress from said Land or Improvements; (g) All right, title and interest of Granior in and to all streets, roads, alleys, public places, easements and rights-of-way, existing or proposed, public or private, adjacent to or used in connection with, belonging or pertaining to the Land or any part thereof; (h) Ail of Grantor's rights, estates, powers, privileges and interests of whatever kind or character appurtenant or incident to the foregoing; and (i) All further or additional title, estates, interests or rights which may exist now or al any time be acquired by Grantor in or to the property demised under the Grou�d Lease inci�ding Grantor's rights, if any, to purchase the property demised under such Ground Lease, or such additional real property if such right or option is so provided in the Ground Lease and, if fee simple titie to any of such property shall ever become vested in Grantor, such fee simple title shall be encumbered by this Mortgage in the same manner as if Grantor had fee simple title to such property as of the date of this Mortgage. Deed of Trust Page 2 of 15 "Note" means the Promissory Nole of even date herewith in the original principal amount of $7,351,366.00 executed by 8orrower and payable to the order of Bank and all amendments, restatements, increases, renewals, and extensions of such Promissory Note. THE NOTE DOES NOT CONTAIN A REVOLVING CREDIT FEATURE. "Permitted Encumbrances" means (a) the lien and security interest created by this Mortgage and any other lien against the Mortgaged Properly in favor of Bank, (b) the liens and/or encumbrances set forth in Exhibit "B" attached hereto and made a part hereof, if any, or (c) the maiters, if any, set forth as exceptions on Schedule B of ihe Title Policy, if any, or (d) if no Exhibit "B" is atiached hereto and no Title Policy is issued, then any liens andlor encumbrances affecting the Morlgaged Property appearing (as of the date of lhis Mortgage) in the Real Property Records of the county(ies) in which lhe Land is situated, but only to the extent the same are valid and subsisting (hereinafter called the "Permifted Encumbrances"). "Person" means any natural person, firm, corporation, association, partnerships, joint venture, trust, or other entily, as applicable. "Personal Prooertv" means all property described in Subsections (c), j,, and jJ of the definition of Mortgaged Property, to the extent it is personal property under applicable law, and all proceeds thereof. "Rents" meansall renl and other income from the Mortgaged Property, including all rent and other income under all exisling or future Leases. "Title Policv" means a Mortgagee Policy of Title Insurance or Binder, if and as required by Bank, issued by a Title Company for the benefit of Bank and relating to the Land and the lien created by this Mortgage. "UCC" means the Texas Business and Commerce Code. All terms defined in the UCC have the same meanings in lhis Mortgage as in the UCC. ARTICLE ONE SECUREDINDEBTEDNESS t.t Secured Indebtedness. This Mortgage is made to secure and enforce the payment of the Debt. ARTICLE TWO REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF GRANTOR 2.1 Representations and Warranties. Grantor does hereby represent and warrant to Bank as follows: (a) Title and Authority. Grantor is the lawful owner of good and indefeasible tille to a leasehold interest in the Land and Improvements and has good righl and authority to grant, bargain, sell, transfer, assign and mortgage the Land and Improvements and to grant a security interest in the Personal Properly. (b) Permitted Encumbrances. The Mortgaged Property is free and clear from all liens, security interests and encumbrances except the Permilted Encumbrances. There are no mechanic's or materialmen's liens, lienable bills or olher claims constituting or [hat may constitute a lien on the Mortgaged Property, or any part lhereof. (c) No Homestead. No portion of the Morlgaged Property is being used as Grantor's business or residential homestead. (d) Compliance with Covenants and Laws. The Mortgaged Property and the intended use lhereof by Grantor comply with all applicable restrictive covenants, zoning ordinances and building codes, flood disaster laws, applicable health and environmental laws and regulations and all other applicable laws, statutes, ordinances, rules, regulations, orders, determinations and court decisions, including, without limitation, the Americans With Disabilities Act of 1990 and TEX. REV. CIV. STAT. ANN. art. 9102, as amended (all of the foregoing hereinafter somelimes colleciively referred to as "Applicable Laws"), without reliance upon grandfather provisions or adjacent or other properties. Grantor has obiained all requisite zoning, utility, building, health and operaling permits from each governmental aulhority or Deed of Trust Page 3 of 15 , , :'il i / . .�I �l. �;: '-�:.I�•. �, ��'`r:�,'�'��J.�!� �:�;�,;,i� �v`Iy('i ;i,�1:I°ll��'i�+,i11S� i�;� .�, �� n-,.o ll, �! :'ci �i� ;1�� L� ��;,v. � municipality having jurisdiction over lhe Mortgaged Property. All engineering specifications with respect to lhe Mortgaged Properly are within applicable environmental standards. (e) Environmental. Without limitation of any of the foregoing, no asbestos, material containing asbestos which is or may become friable or material containing asbestos deemed hazardous by Applicable Laws has been installed in the Mortgaged Property and the Mortgaged Property and Grantorare not in violation of or subject to any existing, pending or, to the best knowledge oF Grantor, threatened investigation or inquiry by any governmental authoriiy or to any remedial obligations under any Applicable Laws pertaining to health or the environment (such Applicable Laws as they now exist or are hereafter enacled and/or amended hereinafter sometimes collectively referred to as "Applicable Environmental Laws"), including wilhout limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Acl of 1986 (collectively, together with any subsequent amendments hereinafter referred to as "CERCLA"), the Resource Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act Amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (collectively, together with any subsequent amendments hereinailer called "RCRA"), the Texas Water Code and the Texas Solid Waste Disposal Act, and this representalion would continue to be true and correct following disclosure to the applicable governmental authorities of all relevant facts, conditions and circumstances, if any, pertaining to the Mortgaged Property and Grantor. Grantor has �ol obtained and is not required to obtain any permits, licenses or similar authorizations to construcl, occupy, operate or use any buildings, improvements, fixlures and equipment forming a part of the Mortgaged Property by reason of any Applicable Environmental Laws. Grantor undertook, at the time of acquisition of lhe Mortgaged Property, all appropriate inquiry into the previous ownership and uses of the Morlgaged Property consistent with good commercial or customary practice to determine that the Mortgaged Properly and the uses therefor are in compliance wilh all Applicable Environmental Laws. Grantor has taken all steps necessary to determine and has determined lhat no hazardous subslances or solid wastes have been disposed of or otherwise released on or to Ihe Mortgaged Property. The use which Grantor makes and intends to make of the Mortgaged Property will not result in the disposal or other release of any hazardous substance or solid waste on or to the Mortgaged Property. The terms "hazardous substance" and "release" as used in this Mortgage shall have the meanings specified in CERCLA, and the terms "solid waste" and "disposai" (or "disposed") shall have the meanings specified in RCRA; provided, in lhe event either CERCLA or RCRA is amended so as to broaden the meaning of any term defined ihereby, then such broader meaning shall apply subsequent to the effective date of such amendment and provided further, to the extent that the laws of the State of Texas establish a meaning for lhe terms "hazardous substance," "release," "solid waste," or "disposal" (or "disposed") which is broader than that specified in either CERCLA or RCRA, such 6roader meaning shall apply. (fl Condition of Property. The Mortgaged Property is in good condition and repair with no deferred mainlenance and is free from damage caused by fire or other casually. (g) Encroachments. None of the improvements on the Mortgaged Property create an encroachment over, across or upon any of the Mortgaged Property boundary lines, rights of way or easements and no buildings or other improvements on adjoining land create such an encroachment. (h) Enforceability. The Note, this Mortgage and all other Loan Documents constitute lhe legal, valid and binding obligalions of Grantor enforceable in accordance with their respective terms subject to applicable deblor reliet laws.. 2.2 Covenants and Agreements. So long as the Debt or any part thereof remains unpaid, Grantor covenants and agrees with Bank as follows: (a) Payment and Performance. Grantor will make prompt payment, as the same becomes due, of the Debt and shall punctually and properly perform all of Grantor's covenants, obligations and liabilities under the Loan Documents. (b) Operation of Mortgaged Property. Grantor will operate lhe Mortgaged Property in accordance with all Applicable Laws and will pay all fees or charges of any kind in connection lherewith. Grantor will nol use, or allow the use of, the Mortgaged Property in any manner which violates any Applicable Law or which constitutes a public or private nuisance or which makes void, voidable or cancelable, any insurance then in force wilh respect thereto. Grantor will not initiate or permit any zoning reclassification of the Mortgaged Property which is unacceptable to Bank or seek any variance under existing zoning ordinances applicable to the Mortgaged Property which is unacceptable to Bank or use or permit lhe use of the Mortgaged Property in such a manner which would result in such use becoming a nonconforming use under applicable zoning ordinances or olher Applicable Laws. Grantor will not impose any restrictive covenants or Deed of Trust Page 4 of 15 � �.. 1 � .�... �: T�; � d, S�: � l..�.. �J �';;;1 �r��'l' �� '�-,i'� ,'}:`, � S�v;� ��,,-1, ';^�U �'�� ;�', �; ' � � i �r . .. .;ilu��.n _ _ ,i. encumbrances upon the Mortgaged Property, execute or fiie any subdivision plat affecting the Mortgaged Property or consent to the annexation of the Mortgaged Property to any municipality, without the prior writte� consent of Bank. Grantor will not agree or consent to any drilli�g or exploration for, or extraction, removal or production of Minerals from the surface or subsurface of the Mortgaged Properiy regardless of the depth thereof or the method of mining or extraction thereof. Grantor will not do or suffer to be done any act whereby the value of any part of the Mortgaged Property may be materially lessened. Grantor will allow Bank or its authorized representative to enter the Mortgaged Property at any reasonable time to inspect the Mortgaged Property and Grantor will assist Bank or said representative in whatever way �ecessary to make such i�spection. if Grantor received a notice or claim from any federal, state or other governmental entity pertaining to the Mortgaged Property, including, without limitation, a notice that the Mortgaged Property is not in compliance with any Applicable Law, Grantor will promptly furnish a copy of such notice or claim to Bank. (c) Debts for Construction. Grantor will cause ail debts and liabiliiies of any character, including without limitation, all debts and liabilities for labor, material and equipment and all debts and charges for utiliiies servicing the Mortgaged Property, incurred in the construction, maintenance, operation and development of the Mortgaged Property, to be promptiy paid. (d) Ad Valorem Taxes. Grantor will cause to be paid prior to delinquency all taxes a�d assessments heretofore or hereafter levied or assessed against the Mortgaged Properiy, or any part thereof, or against Trustee or Bank for or on account of the Note or any oiher Debt or the interest created by this Mortgage and will furnish Bank with receipts showing payment of such taxes and assessments at least ten (10) days prior to the applicable default date therefor; provided that Grantor may in good faith, by appropriate proceedings, contest the validity, applicability, or amount of any asserted tax or assessment; provided, however, that in any event each such contest shall be concluded and the tax, assessment, penalties, interest and costs shall be paid prior to the date any writ or order is issued under which the Mortgaged Property or any part thereof may be sold. (e) Repair and Maintenance. Grantor will keep the Mortgaged Property in good order, repair, operating condition and appearance, causing all necessary repairs, renewals, replacements, additions and improvements to be promptly made, and will not ailow any of the Mortgaged Property to be misused, abused or wasted or to deteriorate (ordinary wear and tear excepted). Grantor wili not, without the prior written consent of Bank, (i) remove from the Mortgaged Property any fixtures or personal property covered by this Mortgage except those replaced by Grantor by an article of equal suitability and value, owned by Grantor, free and clear of any lien or security interest (except that created by this Mortgage); (ii) make any structural aiteration to the Mortgaged Property or any other alterations thereto which impair the value thereof; or (iii) make any alteration to the Mortgaged Property involving an estimated expenditure exceeding $25,000 except pursuant to plans and specifications approved in writing by Bank. (� Insurance and Casualty. Grantor will keep the Mortgaged Property insured against loss or damage by fire, expiosion, windstorm, hail, fiood (if the Mortgaged Property shall at any time be located in an identified "flood prone area" in which flood insurance has been made availabie pursuant to the Fiood Disaster Protection Act of 1973), tornado and such other hazards as may be required by Bank by policies of fire, extended coverage and other insurance in such company or companies, in such amounts, upon such lerms and provisions, and with such endorsements, all as may be acceptable to Bank. Grantor will aiso provide such other insurance as Bank may from time to time require, in such companies, upon such terms a�d provisions, in such amounts, and with such endorsements, ail as are approved by Bank. Grantor further agrees thal Grantor will deliver to Bank the original policies evidencing such insurance and any additional insurance which shall be taken out upon any part of the Mortgaged Property and receipts evidencing the payment of all premiums, and will deiiver certificates evidencing renewals of all such policies of insurance to Bank at least fifteen (15) days before any such insurance shall expire. Without limiting the discretion of Bank with respect to required endorsements to insurance policies, Grantor further agrees that all such policies shall provide that proceeds thereunder will be payabie to Bank as its interest may appear pursuant and subject to a mortgage clause (without contribution) of standard form attached to or otherwise made a part of the appiicabie policy. In the event any of the Mortgaged Property covered by such insurance is destroyed or damaged by fire, explosion, wiodstorm, hail or by any other casualty against which insurance shall have been required hereunder, (i) Baok may, but shall not be obligated to, make proof of loss if not made prompily by Grantor; (ii) each insurance company concerned is hereby authorized and directed to make payment for such loss directly to Bank instead of to Grantor; and (iii) Bank shali have the right to apply the insurance proceeds first, to reimburse Bank or Trustee for all costs and expenses, including, without limitation, reasonable attorneys' fees, incurred i� connection with the coliection of such proceeds and, second, the remainder of said proceeds shall be applied, at the sole discretion of Bank, in payment (without premium or penaity) of the Debt, either in whole or in part, in the order dete�mined by Bank in its sofe discretion, or to the repair, restoration or replacement, either partly or entirely, of the Mortgaged Property so destroyed or damaged, provided that, any insurance proceeds held by Bank to be applied to the repair, restoration or Deed of Trust Page 5 of 15 replacement of the Mortgaged Property shall be so heid withaul payment or allowance of interest thereon and shall be paid out from time to time upon compliance by Grantor with such terms, conditions and requirements as may be reasonably imposed by Bank. in any event the unpaid portion of the Debt shail remain in full force and effect and Grantor shali not be excused in the payment thereof. If any act or occurrence of any kind or �ature (includi�g any casualty on which insurance was not obtained ar obtainabie) shail result in damage io ar loss or destruction of the Mortgaged Property, Grantor shail give immediate written notice thereof to Bank and, unless otherwise so instructed by Bank, shali promptly, at Grantor's sole cost and expense and regardless of whether the insurance proceeds, if any, shali be sufficient for the purpose, restore, repair, replace and rebuild the Mortgaged Property as nearly as possible to its value, condition and character immediateiy prior to such damage, loss or destruction in accordance with plans and specifications submitted to and approved by Bank. (g) Condemnation. Immediately upon obtaining knowledge of the institutio� of any proceedings for the condemnation of the Mortgaged Property or any portion thereof, or any other proceedings arising out of injury or damage to the Mortgaged Property, or any portion thereof, Grantor will notify Bank of the pendency of such proceedings. Grantor shail, at its expense, diligently prosecute any such proceedings, and shali consult with Bank, its atlorneys and experts, and cooperate with them in lhe carrying on a defense of any such proceedings. AII proceeds of condemnation awards or proceeds of saie in lieu of condemnation with respect to the Morigaged Property and all judgments, decrees and awards forinjury or damage to the Mortgaged Property shall be paid to Bank and shall be applied, first, to reimburse BankorTrustee for aIi costs and expenses, inciuding, without limitation, reasonabie attorneys' fees, incurred in connection with collection of such proceeds and, second, the remainder of said proceeds shall be applied, at the sole discretion of Bank, to the payment of the Debt (without premium or penaity) in the order determined by 8ankin its sole discretion or paid out to repair or restore the Mortgaged Property so affected by such condemnation, injury or damage in the same manne� as provided in Subsection (fl of this Section 2.2. In any event the unpaid portion of the Debt shali remain in full force and effect and Grantor shall not be excused in the payment lhereof. Grantor hereby assigns and transfers all such proceeds, judgments, decrees and awards to Bank and agrees to execute such further assignments of ail s�ch proceeds, judgments, decrees and awards as Bank may request. Bank shall not be, in any event or circumstances, liable or responsible for the failure to coilect, or the failure to exercise diiigence in the collection of, any such proceeds, judgments, decrees or awards. (h) No Othe� Liens. Grantor will not, without the prio� written consent of Bank, create, place or permit to be created or piaced, or through any act or failure to act, acquiesce in the placing of, or allow to remain, any deed of tn�st, mortgage, voluntary or involuntary lien, whether statutory, constitutional or contractual (except for the lien for ad valorem taxes on the Mortgaged Property which are not delinquent), security interest, encumbrance or charge, or conditionai sale or other title retention document, against or covering the Mortgaged Property, or any part thereof, other than the Permitted Encumbrances, regardless of whether the same are expressly or otherwise subordinate to the lien or security inierest created i� this Mortgage, and should any of the foregoing become attached hereafter in any manner to any part of the Mortgaged Property without the prior written consent of Bank, Grantor will cause the same to be promptly discharged and released. (i) Books and Records. Grantor will keep accurate hooks and records in accordance with sound accounting principles in which full, true and correct entries shall be promptly made as to all operations on the Mortgaged Property, and wili permit aIl such books and records (including, without limitation, all contracts, statements, invoices, biils and claims for iabor, materiais and services supplied for the construction and operation of the improvements forming a part of the Mortgaged Properiy) to be inspected and copied by Bank and its duly authorized represeniatives at ail times during reasonable business haurs. (j) Escrow. if requested by Bank at any time during the term the Debt is outstandi�g in order to secure the performance and discharge of Grantor's obligations under Subsections (d) and�f of this Section 2.2, but not ia lieu of such obligations, Grantor wiil deposit with Bank a sum eqaal to ad vaiorem taxes, assessments and charges against the Mortgaged Property for the current year and the premiums for such policies of insurance for the current year, all as estimated by 8ank and prorated to the end of the caiendar month foliowing the month during which this Mortgage is executed and delivered, and thereafterwiil depositwith Bank, on each date when an instailment of principal and/or interest is due on the Note, sufficient funds (as estimated from time to time by Bank) to permit Bank to pay, at Ieast fifteen (15) days prior to the due date thereof, the next maturing ad valorem taxes, assessments and charges and premiums for such policies of insurance. All such funds so deposited shall bear �o interest; provided, however, that, if a Default (as hereinatter defined) shali have occurred, such Tunds may at Bank's option be applied to the payment of the Debt. If funds on deposit with Bank are insufficient to make aii payments due, Grantorwiil depositwith Bankthe amount of any deficiency. (k) Further Assurances. Grantor will, on request of Bank, promptly (i) correct any defect, error or omission which may be discovered in the contents of this Mortgage or in any other instrument now or hereafter executed Deed of Trust Page 6 of 15 in connection herewith or in the execution or acknowledgment lhereof; (ii) execute, acknowiedge, deiiver and record or tile such further instruments (including, without Iimitation, further deeds of trust, security agreements, financing statements, continuation statements and assignments of rents and leases) and do such Further acts as may be necessary, desirable or proper to carry out more effectively the purposes of this Mortgage. (I) Fees and Expenses; indemnification. Grantor wiil pay all appraisal fees, filing and recording fees, inspection fees, survey fees, taxes, brokerage fees and commissions, abstract fees, title policy fees, uniform commercial code search fees, escrow fees, reasonable attorneys' fees, and all other costs and expenses of every character incurred by Grantor or Bank in connection with the Debt, either at the ciosing thereof or at any time during the term thereof, or otherwise attributable or chargeable to Grantor as owner of the Mortgaged Property, and will reimburse Bank for all such costs and expenses incurred by Ba�k. Grantor shall pay all expenses and reimburse Bank for any expenditures, i�cluding, without limitation, reasonable attorneys' fees and legai expenses, incurred or expended in connection with (i) the breach by Grantor of any covenant herein or in any other Loan Document; (ii) Bank's exercise of any of its rights and remedies hereunder or under the Note or any other Loan Document or Bank's protection of the Mortgaged Property and its lien and security interest therein; or (iii) any amendments to this Mortgage, the Note or any other loan Document or any matter requested by Grantor or any approval required hereunder. Grantor wiii indemnify and hold harmiess Trustee and Bank (for purposes of this Subsection, the terms "Trustee" and "Bank" shall include the directors, oificers, partners, employees, representatives and agents of Trustee and Bank, respectively, and any persons or entities owned or controlled by, ow�ing or controlling, or under common control or affiliated with Trustee and Bank, respectively) from and against, and reimburse them for, all ciaims, demands, Iiabiiities, losses, damages, causes of action, judgments, penalties, costs and expenses (including, without limitation, reasonable attorneys' fees) which may be imposed upon, asserted against or incurred or paid by them by reason of, on account of or in connection with any bodily injury or death o� property damage occurring in or upon or in the vicinity of the Mortgaged Property through any cause whatsoever or asserted ag ainst them on account of any act performed or omitted to be performed hereunder or on account of any transaction arising out of or in any way connected with the Mortgaged Property or with this Mortgage, the Note or any other Loan Documents. V111THOUT LIMITATION OF THE FOREGOING, IT IS THE INTENTION OF GRANTOR AND GRANTOR AGREES THAT THE FOREGOING INDEMNITIES SHALI. APPLY TO EACH INDEMNIFIED PARTY WITH RESPECT TO CLAIMS, DEMANDS, LIABILITIES, LOSSES, DAMAGES, CAUSES OF ACTION, JUDGMENTS, PENALTIES, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES) WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY. However, such indemnities shall not apply to any indemnified party to the extent the subject of the indemnification is caused by or arises out of the gross negligence or wiliful misconduct of such indemnified party. The foregoing indemnities shall not terminate upon release, foreclosure or other termination of this Mortgage but will survive foreclosure of this Mortgage or conveyance in lieu of foreciosure and the repayment of the Debt and the discharge and release of this Mortgage and the other Loan Documents. Any amount to be paid hereunder by Grantor to Bank and/or Trustee shall be subject to and governed by the provisions of Section 2.3 hereof. (m) Warzanty. Grantor will warrant and forever defend the title to the Mortgaged Property against the claims of all persons making any claim to the same or any part thereof, subject to the Permitted Encumbrances. (n) Permitted Encumbrances. Granior wili comply with and wili perform ail of the covenants, agreements and obligations imposed upon it or the Mortgaged Property in the Permitted Encumbrancesin accordance with their respeciive terms and provisions. Grantor will not modify or permit any modification of any Permitted Encumbrance without the prior written consent of Bank. (o) Title Insurance. If requesled by Bank, Grantor shali, at its sole cost and expense obtain and maintain a Mortgagee's Policy of Title I�surance issued by a title company acceptable to Bank. (p) Environmentai. Grantor will oot cause or permit the Mortgaged Property or Grantor to be in vioiation of, or do anything or permit anything to be done which will subject the Mortgaged Property to any remedial obligations under, any Applicable Environmental Laws, including, without limitation, CERCLA, RCRA, the Texas Water Code and ihe Texas Solid Waste Disposal Act, assuming disclosure to the applicable governmentai authorities of ail relevant facts, conditions and circumstances, if any, pertaining to Grantor and/or the Mortgaged Property, and Grantor will promptly notify Bank in writing of any existing, pending or, to the best knowledge oi Grantor, threatened invesligation or i�quiry by any governmental authority io connection with any Applicable Environmental Laws. Grantor shall obtain any permits, licenses or similar authorizations to construct, occupy, operate or use any buildings, improvements, fixtures and equipment forming a part of the Mortgaged Property by reason of any Applicable Environmental Laws. Grantor shall take aii steps necessary to determine that no hazardous substances or solid waste are being disposed of or otherwise released on or to the Deed of Trust Page 7 of 15 Mortgaged Property. Grantor will not cause or permit the disposal or other release of any hazardous su6stance or soiid waste on or to ihe Mortgaged Property and covenants and agrees to keep or cause the Mortgaged Property to be kept free of any hazardous substance or solid waste and to remove the same (or if removal is prohibited by law, to take whatever action is reqaired by law) promptly upon discovery at its sole expense. Upon Bank's reasonable request, at a�y time and from time to time during the existence of thisMortgage, Grantorwiil provide at Granior's sole expense an inspection or audit of the Mortgaged Property from an engineering or consulting tirm approved by Bank, indicating ihe presence or absence of hazardous substances and solid wastes on the Mortgaged Property. if Grantor fails to provide same after forty-five (45) days' notice, Bank may order same, and Grantor grants to Bank and its agents, employees, contractors and consultants access lo the Mortgaged Property and a license (which is coupied with an interest and irrevocabie while this Mortgage is in effect) to perform inspections a�d tests. The cost of such inspections and tests shall be a demand obiigation owing by Grantor to Bank pursuant to ihis Mortgage and shali be subject to and covered by the provisions of Section 2.3 hereof. (q) Asbestos. Grantor covenants and agrees that it wili not install in the Mortgaged Property, nor permit to be instailed in the Mortgaged Property, asbestos, materiai containing asbestos which is ar may become friable ormaterial containing asbestos deemed hazardous by any Appiicabie Environmental Law, a�d thai if any such asbestos or material containing asbestos exists in or on the Mortgaged Property, wheiher installed by Grantor or others, Grantor will remove the same (or if removal is prohibited by �aw, will take whatever action is required by law, including, without limitation, implementing any required operation and maintenance program) promptly upon discovery at its sole expense. Upon Bank's reasonable request, ai any time and from time to fime during the existence of this Mortgage, Gra�tor shall provide at Grantor's soie expense an inspection or audit of the Mortgaged Property from an engineering or consulting firm approved by Bank, indicating the presence or absence of asbestos or material containing asbestos on the Mortgaged Property. If Grantor Tails to provide same after lhirty (30) days' notice, Bank may order same, and Grantor gra�ts to Bank a�d its agents, empioyees, contractors and consuitants access to the Mortgaged Property and a license (which is coupied with an interest and irrevocabie while this Mortgage is in effect) to perform inspections and tests. The cost of such inspectio�s and tests shall be subject to and covered by the provisions of Section 2.3 hereof. 2.3 Right of Bank to Perform. Grantor agrees that if Grantor fails to perform any act or to take any action which Grantor is required to perform or take hereunder or under any of the other Loan Documents, or to pay any money which Grantor is required to pay hereunder or under any of the other Loan Documents, or takes a�y action prohibited hereby or thereby, Bank, in Grantor's name or io its own name, may but shall not be obligaied to perform or cause to be performed such act or take such action. Bank's performance, as set forth in the preceding sentence, will not waive Grantor's defaalt. Any amounts due and owing by Grantor to Bank pursuant to this Mortgage shall bear interest from the date such amount becomes due until paid at the rate of interest payable on matured but onpaid principal of or interest on the Note and shali be a part of the Debt and shall be secured by this Mortgage and by all of the other Loan Documents. 2.d Indemnification Regarding Environmental Matters. Grantor agrees to indemnify and hold Bank and Trustee (for purposes of lhis Section, the terms "Bank" and "Trustee" shall include the directors, officers, paitners, employees, representatives and agents of Bank and Trustee, respectiveiy, and any persons or entities owned or controlled by, owning or controlling, or under common control or otherwise affiliated with Bank and Trustee, respectively) harmless from and against, and to reimburse Bank and Trustee with respect to, any and all claims, demands, losses, damages (including consequentiai damages), Iiabilities, causes of action, judgments, penaities, costs and expenses (including attorneys' fees and court costs) of any and every kind or character, known or unknown, fixed or contingent, imposed on, asserted against or incurred by Bank and/or the Trustee at any time and from time to time by reason of, in connection with or arising out of (a) the breach of any representation o� warranty of Grantor as set forth herein regarding asbestos, material containing asbestos or Appiicable Environmental Laws, (b) the failure of Grantor to pertorm any obligation herein required to be performed by Grantor regarding asbestos, material containing asbestos or Applicabie Environmental Laws, {c) any violation on or before the Release Date (as hereinafter defined) of any Applicable Environmental Law in effecl on or before the Release Date, (d) the removal of hazardous substances or solid wastes from the Mortgaged Property (or if removal is prohibited by law, the taking of whatever action is required by law), (e) the removai af asbestos or material containing asbestos from the Mortgaged Property (or if removal isprohibited by Applicabie Environmental Laws, the taking of whatever actio❑ is required by Appiicabie Environmentai Laws, including, without limitation, the impiementation of any required operation and maintenance program), (f) any act, omission, event or circumstance existing or occurring on or prior to the Release Date (including, without limitation, the presence on the Morlgaged Property or release from the Mortgaged Property of any hazardous substance or soiid waste disposed of or otherwise released on or prior to the Release Date), resulting from or in connection with the ownership, construction, occupancy, operation, use and/or maintenance of the Mortgaged Property, regardless of whether the act, omission, event or circumstance constituted a vioiation of any Applicable Environmental Law at the time of its existence or occurrence, and (g) any and ail claims or proceedings (wheiher brought by private party or governmental agency) for bodily injury, property damage, abatement or remediation, environmental damage or impairment or any other injury or damage resulting trom or Deed of Trust Page 8 of 15 relaling to any hazardous substance or solid waste located upon or migrating into, from or through the Mortgaged Property (whether or not any or all of the foregoing was caused by Grantor or its tenant or subtenant, or a prior owner of lhe Mortgaged Property or its tenant or subtenant, or any third party and whelher or not the alleged liability is attribulable to the handling, storage, generation, transportation or disposal of such substance or waste or ihe mere presence of such substance or waste on the Mortgaged Property). WITHOUT LIMITATION, THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY WfTH RESPECT TO CLAIMS, DEMANDS, LOSSES, DAMAGES (INCLUDING CONSEQUENTIAL DAMAGES), LIABILITIES, CAUSES OF ACTION, JUDGMENTS, PENALTIES, COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES AND COURT COSTS) WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNIFIEDPARTY OR WHICH ARISE AS A RESULT OF STRICT LIABILITY, WHETHER UNDER APPLICABLE ENVIRONMENTAL LAWS OR OTHERWISE. However, such indemnities shall not apply lo any indemnified parly lo the exlent the subject of the indemnification is caused by or arises oul of the gross negligence or willful misconduct of such indemnified party. The lerm "Release Date" as used herein shall mean lhe earlier of lhe following lwo dates: (i) the date on which the Debt has been paid and performed in full and this Mortgage has been released, or (ii) lhe date on which the lien of this Mortgage is (oreclosed or a conveyance by deed in lieu of such foreclosure is fully effecfive; provided, if such payment, performance, release, foreclosure or conveyance is challenged, in bankruptcy proceedings or otherwise, the Release Date shall be deemed not to have occurred until such challenge is rejected, dismissed or withdrawn with prejudice. The foregoing indemnities shall not terminate upon �he Release Date or upon the release, foreclosure or other termination of this Mortgage but will survive the Release Dale, foreclosure of this Mortgage or conveyance in lieu of foreclosure, and the repayment of the Debt and the discharge and release of this Mortgage and the other Loan Documents. Any amount to be paid hereunder by Grantor lo Bank and/or Trustee shall be a demand obligation owing by Grantor to Bank and/or Trustee and shall be subject to and covered by the provisions of Section 2.3 hereof. Nothing in this Section, elsewhere in this Mortgage or in any other Loan Document shall limit or impair any rights or remedies of Bank and/or Trustee against Grantor or any third party under Applicable Environmental Laws, including withoui limitation, any rights of contribution or indemnification available hereunder or thereunder_ ARTICLE THREE EVENTS OF DEFAULT ' Defaults. The term "DefaulY' as used in this Mortgage shall mean the occurrence of any of the following events (bul subject to any applicable cure and/or grace period): 3.1 Event of Default Under Loan Agreement. The occurrence of an Event of Defauit under the Loan Agreement (as "Event of DefaulC' is defined in the Loan Agreement); or 3.2 Action 6y Other Lienholder. The holder oi any lien or security interest on the Mortgaged Property (withoul hereby implying the consenl of Bank to the existence or creation of any such lien or security inierest) declares a default thereunder or institutes foreclosure or other proceedings for the enforcement of ils remedies thereunder; or 3.3 Transfer of Mortgaged Property. Without the prior written consent of Bank, Grantor sells, leases, exchanges, assigns, transfers, conveys or olherwise disposes of all or any part of the Mortgaged Property or any interest therein, or legal or equitable tiile to the Morlgaged Property, or any interest therein, is vested in any other party, in any manner whatsoever, by operalion of law or otherwise, it being underslood that the consent of Bank required hereunder may be refused by Bank in its sole discretion or may be predicated upon any terms, conditions and covenants deemed advisable or necessary in the sole discretion of Bank, including, without limitation, the right to change the interest rate, date of maturity or payments of principal and/or interest on the Note, to require payment of any amount as addilional consideration as a transfer fee or otherwise and to require assumption of the Note and this Mortgage; or 3.4 Other Liens. Without the prior written consent of Bank, Grantor creates, places or permits to be created or placed, or through any act or failure to act, acquiesces in the placing of, or allows to remain, any deed of lrust, mortgage, voluntary or involuntary lien, whether statutory, constilutional or contractual (except for the lien for ad valorem taxes on the Mortgaged Property which are not delinquent), security interesl, encumbrance or charge, or conditional sale or other title retention document, against or covering lhe Mortgaged Properly, or any parl lhereof, other than the Permil[ed Encumbrances, regardless of whether the same are expressly or otherwise subordinate to [he lien or security interest created in this Mortgage, or acquires any fixtures, equipment or other property forming a part of the Mortgaged Property pursuant to a lease, Iicense or similar agreement; or 3.5 Liquidation, Merger, or Change in Ownership. If an entity, Grantor or Borrower or Guarantor dissolves, liquidates, merges or consolidates voluntarily or involuntarily, or there is any change in ownership of Grantor or Borrower or Guarantor as such ownership exists on the effective date of this Mortgage; or Deed of Trust Page 9 of 15 � . J . . _ � :-. _ .` �.._. .. _ A. `— i�• ,'� ��?t� _•� 5;; ' ; I � �,�11;�'��' G� „ �j;; � -��::��, �;S'lf s'`c 'rj� :'`�:;�� ''di��'111 ��'� � u� �,,; v � G! � 3.6 Transfer of Assets. Grantor, Borrower or Guarantor (collectively the " Transferot') leases, sells, or otherwise transfers all, or a substantial portion, of its assets, property or business, except (a) sales of inventory in the ordinary course of business, and (b) sales of equipment for a fair and adequate consideration provided that if any such equipment is sold, and a replacement is necessary for the proper operation of ihe business of the Transferor, lhe Transferor will replace such equipment with adequate equipment; or 3.7 Death. If an individual, Grantor, Borrower, or any Guarantor, dies; or 3.8 Other Cont�acts. If a"Default" or "Event of Default" (as therein defined) occurs under any other written agreement between Bank and Grantor (as °Defauli° and 'Event of Default' are defined therein); or 3.9 Default under Ground Lease. A default occurs under the Ground Lease which is not cured within a cure period applicable to such default. ARTICLE FOUR REMEDIES AND RELATED RIGHTS If a Default shall occur, Bank may exercise any one or more of the foilowing remedies and shall, in addition to any other rights, have the following related rights, without notice (unless nolice is required by Applicable Laws): 4.1 Acceleration. Upon the occurrence of a Default, Bank shall have the option of declaring all Debt in its entirely to be immediately due and payable, and the liens and security inlerests evidenced hereby shall be subject to foreclosure in any manner provided for herein or provided for by applicable law as Bank may elect. 4.2 Foreclosure. If a Default occurs, Trustee will, at the request of Bank, sell all or any part of the Mortgaged Properly, all as Trustee in Trustee's discretion elects. The sale will be made in accordance with Texas Properly Code Section 51.002 or any successor stalute. If lhe Land is situated in more than one county, lhen required notices will be given in both or all of such counties, lhe Mortgaged Property may be sold in eilher or any such county, and such notices shall designate the county where the Mortgaged Property will be sold. The affidavit of any person having knowledge of the facts to the effect that such service was compleied shall be prima facie evidence of the facl of service. Any sale made by Trustee hereunder may be as an entirety or in such parcels as Bank may request, and any sale may be adjourned by announcemenl at the time and place appointed for such sale without further notice except as may be required by law. The sale by Trustee of less than the whole of the Mortgaged Property shall not exhaust the power of sale herein granted, and Trustee is specifically empowered to make successive sale or sales under such power until the whole of the Mortgaged Property shall be sold; and, if the proceeds of such sale of less than the whole of the Mortgaged Property shall be less than the aggregate of the Debt and the expense of execuling lhis trust as provided herein, this Mortgage and the lien hereof shall remain in full force and effect as lo the unsold portion of the Mortgaged Property just as though no sale had 6een made; provided, however, that Grantor shall never have any right to require lhe sale of less than the whole of the Mortgaged Property but Bank shall have the right, at its sole election, to request Trustee to sell less than the whole of the Mortgaged Property. After each sale, Trustee shali make to the purchaser or purchasers at such sale good and sufficient conveyances in the name of Grantor, conveying the property so sold to the purchaser or purchasers in fee simple with general warranty of title, and shall receive the proceeds of said sale or sales and apply the same as herein provided. Payment of the purchase price to Trustee shall satisfy the obligation of purchaser at such sale therefor, and such purchaser shall not be responsible for ihe application thereof. The power of sale granted herein shall not be exhausted by any sale held hereunder by Trustee or his substitute or successor, and such power of sale may be exercised from time to time and as many times as Bank may deem necessary until all of the Mortgaged Property has been duly sold and all Debt has been fully paid. In the event any sale hereunder is not completed or is defective in lhe opinion of Bank, such sale shall not exhaust the power of sale hereunder and Bank shall have the right to cause a subsequent sale or sales to be made hereunder. Any and all statements of fact or olher recitals made in any deed or deeds given by Trustee or any successor or substitute appointed hereunder as to nonpayment of the Debt, or as to the occurrence of any Default, or as to Bank having declared all of such Debt lo be due and payable, or as to the request to sell, or as to notice of time, place and terms of sale and of the properties to be sold having been duly given, or as to lhe refusal, failure or inability lo act of Trustee or any substitute or successor, or as to lhe appointment of any substitute or successor Trustee, or as to any other act or thing having been duly done by Bank or by Trustee or any substitute or successor, shall be laken as prima facie evidence of the truth of the facts so slated and recited. Trustee, his successor or substitute, may appoint or delegate any one or more persons as agent to perform any act or acts necessary or incident to any sale held by Trustee, including, without limitation, the posting of nolices and the conducting of sales, but in the name and on behalf of Truslee, his successor or substitute. This Mortgage shall be effective as a mortgage as well as a deed of trust and upon the occurrence of a Default may be foreclosed as lo any of the Morigaged Property in any manner permitted Deed of Trust Page 10 of 15 � , J J j ;' � � �, _ . _> � : �� 1 ; � � ' �. �V� i( jJ LI;�1! ' ,� �•,-�;��,r�;C1 ioi\\j � �C u' �'�.> J �L �: . : �'�: �� .,';1,J;' ,, / iu I� �( a ��J:�.�r[� ��:G'�;� — --�2_� by the laws of the State of Texas or of any other state in which any part of the Mortgaged Property is situated, and any foreclosure suit may be brought by Trustee or by Bank. Bank may at any time before the saie direct Trustee to abandon lhe sale, and may at any time thereafter direct Trustee to again commence foreclosure. Whether or not foreciosure is commenced by Trustee, Bank may at any time after a Default occurs institute suit for coliection of all or any part of the Debt or foreclosure of the lien of this Mortgage or both. if Bank institutes suit for collection of the Debt and foreciosure of the lien of this Mortgage, Bank may at any time befo�e the entry of final judgment dismiss the same, and require Trustee to seil the Mortgaged Property in accordance with the provisions of this Mortgage. No single sale or series of sales under this Mortgage or by judicial foreciosure wili extinguish the lien or exhaust the power of sale under this Mortgage except with respect to the items of property sold. 4.3 Proceeds of Sale. The proceeds of any sale held by Trustee or any receiver or pubiic officer in foreclosure of ihe iiens evidenced hereby shall be applied: FIRST, to the payment of ail necessary costs and expenses i�cident to such foreclosure sale, including but not limited to, all court costs and charges of every character in the event foreclosed by suit, attorneys' fees and a reasonable fee to Trustee acting under the provisions of Section 4.3 if foreclosed by power of sale as provided in said paragraph, not exceeding five percent (5°/a) of the proceeds of such sale; SECOND, to the payme�t in fuli of the Debt (including, without limitation, the principal and interest due and unpaid on the Note, attorneys' fees and any oiher amounts due and unpaid and owed to Bank under this Mortgage) in such order as Bank may eiect in its sole direction; and THIRD, the remainder, if any there shail be paid to Grantor or io such other party or parties as may be entitled thereto by applicable law. 4.4 Bank as Purchaser. Bank shall have the right to become the purchaser at a�y sale held by any Trustee or substitute or successor or by any receiver or pubiic officer, and if Bank purchases at any such sale Bank shall have the right to - credit upon the amount of the bid made therefor, to the extent necessary to satisfy such bid, the Debt owing to Bank. 4.5 Remedies Cumulative. Ail remedies herein expressly provided for are cumu�ative of any and all other remedies existing at law or in equity and are cumulative of any and all other remedies provided for in any of the other Loan Documents, or any partthereof, orotherwise benefitiing Bank, and Trustee and Bank shali, in addition to the remedies herein provided, be entitled to avail themselves of aii such other remedies as may now or hereafter exist at law or in equity for the coliection of the Debt and lhe enforcement of the cove�ants herein and the foreclosure of the liens and security interests evidenced hereby, and resori to any remedy provided for hereunder or under any such Loan Documents or provided for by law shall not prevent the concurrent or subsequent employment of any other appropriate remedy or remedies. ARTICLE FNE M�SCELLANEOUS 5.1 Defeasance. if all of the Debt is paid as the same becomes due and payable and if all of the covenants, warranties, undertakings and agreements made in this Mortgage are kept and performed, then and in that event only, ali rights under lhis Mortgage shall terminate and the Mortgaged Property shali become wholly clear of the liens, security interests, conveyances and assignments evidenced hereby, which shall be released by Bank ia due form at Grantor's cost. 5.2 Successor Trustee. Trustee may be removed at any time with or without cause, at the option of Bank, by written declaration of removal executed by Bank, without any notice to or demand upon Trustee, Gra�tor or any other person. If at any time Trustee is removed, dies or refuses, fails or is �nabie to act as Trustee, Bank may appoint any person as successor Trustee hereunder, without any formality other than a written declaration of appointment executed by Bank. Immediatefy upon appointme�t, the successor Trustee so appointed automatically wili be vested with all the estate and titie in the Mortgaged Properiy, and with ali of the rights, powers, privileges, aulhority, options and discretions, and charged with all of lhe duties and liabilities, vested in or imposed upon Trustee by this instrument, and any conveyance executed by any successor Trustee wiil have the same effect and validity as if executed by the Trustee named in this Deed of Trust. 5.3 liability and Indemnification of Trustee. Trustee shall not be liable for any error of judgment or act done by Trustee in good faith, or be otherwise responsibie or accountable under any circumstances whatsoever (including, without limitation, Trustee's negligence), except for Trustee's gross negiigence or wiilfui misconduct. Trustee shall have the right to rely o� _ -- Deed of Trust Page t t of 15 any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith to be genuine. All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated in any manner from any other moneys (except to the extent required by law), and Trustee shali be under no Iiability For interest on any moneys received by him hereunder. Grantorwill �eimburse Trustee for, and indem�ify and save him harmiess against, any and ali liability and expenses (inciuding, without iimitation, reasonahie attorneys' fees) which may be incurred by him in the performance of his duties hereunder (Trustee shall include the directors, officers, partners, emp�oyees, representatives and agents of Trustee and any persons or entities owned or controlled by, owning or controlling or under common control or affiliated with Trustee). The foregoing indemnity shall not terminate upon release, foreclosure or other termination of this Mortgage. 5.4 Waiver by Bank. Bank may at any time and from time to time in writing (a) waive compliance by Grantor with any covenant herein made by Grantor to the extent and in the manner specified in such writing; (b) co�sent to Grantor doing any act which hereunder Grantor is prohibited from doing, or consent to Grantor faiiing to do any act which hereunder Grantor is required to do, to the extent and in the manner specified in such writing; (c) release any part of the Mortgaged Property, or any interest therein, from the lien and security interest of this Mortgage without the joinder of Trustee; or (d) release any party liabie, either directly or indirectiy, for the Debt or for any covenant herein or in any of the other Loan Documents now or hereafter securing the payment of ihe Debt, without impairing or releasi ng the liability of any other party. No such act shall in any way impair the rights of Bank hereunder except to the extent specifically agreed to by Bank in such writing. 5.5 Actions by Bank. The lien, security interest and other security rights of Bank hereunder shali not be impaired by any indulgence, moratorium or reiease granted by Bank, including but not limited to (a) any renewal, extension, increase or modification which Bank may grant with respect to any of the Debt; (b) any surrender, compromise, release, renewal, extension, exchange or substitution which Bank may granf in respect of the Mortgaged Property, or any part thereof or a�y interest therein; or (c) any release or indulgence granied to any endorser, guarantor or surety of any of the Debt. The taking of additionai security by Bank shall not release or impair the lien, security interest or other security rights of Bank hereunder or atfect the liability of Grantor or of any endorser or guarantor or other surety or improve the rights of any permitted junior lienholder in ihe Mortgaged Property. 5.6 Rights of Bank. Bank may waive any Detauit without waiving any other prior or subseque�t Default. Bank may remedy any default without waiving ihe Defaultremedied. Neither the failure by Bank to exercise, nor the delay by Bank in exercising, any right, power or remedy upon any Default shail be construed as a waiver of such Defauit or as a waiver of the right to exercise any such right, power or remedy at a later daie. No modification or waiver of any provision hereof nor consent to any departure by Grantor therefrom shali in any event be eifective unless the same shail be in writing and signed by Bank and then such waiver or consent shali be effective only in the specific instances, for the purpose for which given and to the exte�f therein specified. No notice to nor demand on Grantor in any case shall of itseif entitle Grantor to any other or further notice or demand in similar or other circumstances. Acceptance by Bank of any payment in an amount less than the amount then due on any of the Debt shall be deemed an acceptance on account only and shall not in any way affect the existence of a Default hereunder. 5.7 Fixture Filing. This Mortgage shall be effective as a financing statement filed as a fixture filing with respect io aIl fixiures included within the Mortgaged Property and is to be filed for record in the real property records in the Office of the County Clerk for the county or counties where the Mortgaged Property (including said fixtures) is situated. 5.8 Subrogation. To the extent that proceeds of the Note are used to pay indebtedness secured by any outstanding lien, security interest, charge or prior encumbrance against the Mortgaged Property, such proceeds have been advanced by Bank at Grantor's request and Bank shall be subrogated to any and ail rights, securily interests and liens owned or heid by any owner or holder of such outstanding liens, secarity interests, charges or encumbrances, irrespective of whether said liens, security interests, charges or encumbrances are released; provided, however, that the terms and provisions of this Mortgage shall govern the rights and remedies of Bank and shall supersede the terms, provisions, rights and remedies under and pursuant to the instruments creating the liens, security interests, charges or encumbrances to which Bank is subrogated hereunder. 5.9 Application of Debt. if any part of the Debt cannot be lawfully secured by this Mortgage ar if any part of the Mortgaged Property cannot be lawfuily subject to the iien and security interest hereof to the full extent of the Debt, then aIl payments made shall be applied on said Debt first in discharge of lhat portion thereof which is unsecured by this Mortgage. 5.10 Usury. This Mortgage has been executed under, and shall be construed and enforced in accordance with, the laws of the State of Texas, except as such laws are preempted by federal law. This Mortgage and all of the other 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 ihereoF to any person or circumstance shail, for any reason and to any extent, be invalid or �nenforceabie, neither the application of such provision to any other person or circumstance nor ihe Deed of Trust Page 12 of 15 remainder of the instrument in which such provision is contained shali be affected thereby and shall be enforced to the greatest extent permitted by Applicable Laws. It is expressly stipulated and agreed to be the intent of Grantor and Bank to at alI times comply with the usury and other applicabie laws now or hereafter governing the interest payabie on the Debt. If the applicable law is ever revised, repealed or judicially interpreted so as to render usurious any amount cailed for under the Note or under any of the other Loan Documents, or contracted for, charged, taken, reserved or received with respect to the Debt, or if Bank's exercise of the option to accelerate the maturity of the Debt, or if any prepayment of the Debt results in the payment of any interest in excess of that permitted by law, then it is the express intent of Grantor and Bank that alI excess amounts thereFofore coilected by Bank be credited on the principal balance ot the Note (or, if the Note and all of such other Debt have been paid in full, refunded), and the provisions of the Note and the other Loan Documents immediately be deemed reformed and the amounts thereafter collectable hereunder and thereunder reduced, without the necessity of the execuiion of any new docume�t, so as to compiy with the then Applicabie laws, but so as to permit the recovery of the fullest amount othenvise calied for hereu�der ar thereunder. All sums paid, or agreed to be paid, for the use, forbearance , detention, taking, charging, receiving or reserving on the Debt shall, to the extent permitted by Applicabie Laws, be amortized, prorated, allocated and spread throughout lhe fuil term of such Debt until paymeni in fuli so that the rate or amount of interest on account of such Debt does oot exceed the usury ceiling from time to time in effect and applicable thereto for so long as debt is outstanding under the Debt. To the extent that Bank is relying on Chapter 303 of the Texas Finance Code to determine the maximum rate ("Maximum Rate") payable on the Debt, Bank will utiiize the weekly ceili�g from time to time in effect as provided in such Chapter 303. To the extent federal law permits Bank to contract for, charge or receive a greater amouol of interest, Bank will rely on federal law instead of such article, as amended, for the purpose of determining the Maximum Rate. Additionally, to the extent permitled by applicabie lawnowin effect, Bankmay, at its option and from time to time, implement any other method of computing the Maximum Rate under such article, as amended, or under other applicabie law by giving notice, ii required, to Granior as provided by appiicable law now or hereafter in effect. in no event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving credit loan accounts and revolving triparty accounts) apply to the Debt. Notwithsta�ding anything to the contrary contained herein or in any of the other Loan Documents, it is not the intention of Bank to accelerate the maturily of any interest lhat has not accrued at the time of such acceleration or to collect unearned interest at the time of such acceleration. 5.11 Notice. Any notice, request, demand or other communication required orpermitted hereunder, orunderthe Note, or under any of the other Loan Documents (unless otherwise expressiy provided therein) shall be given in writing by (a) personal delivery, (b) expedited delivery service with proof of delivery, or (c) United States mail, postage prepaid, registered or certified mail, return receipt requested, sent to the intended addressee at the address shown in this Mortgage, or to such different address as the addressee shall have designated by written notice sent in accordance herewith, and shall be deemed to have been given and received either at the time of personal delivery or, in the case of delivery service, as of the date of first attempted delivery at the address and in the manner provided herein, or in the case of mail, upon deposit in a receptacle of United States mail; provided that, service of a notice required by Texas Property Code §51.002 shall be considered complete when the requirements of that statute are met. 5.12 Heirs, Successors and Assigns. The terms, provisions, covenants and conditions hereot shail be binding upon Grantor, and the heirs, devisees, representatives, successors and assigns of Grantor including all successors in interest of Grantor in and to all or any part of the Mortgaged Property, and shall inure to the benefii of Trustee and Bank and their respective heirs, successors, substituies and assigns and shali constitute covenants running with the Land. All references in this Mortgage to Grantor, Trustee or Bank shall be deemed to i�clude all such heirs, devisees, representatives, successors, substitutes and assigns. 5.13 Severability. A determination that any provision of this Mortgage is unenforceabie or invalid shall not affect the enforceability or validity of any other provision and any determination that the application of any provision of this Mortgage to any person or circumstance is iilegal or unenforceabie shail nol affect the enforceabilily or validity of such provision as it may apply to any other persons or circumstances. 5.14 Gender and Number. Within this Mortgage, words of any gender shall be heid and construed to inciude any other gender, and words in the singular number shall be held and construed to include the plural and words in the plural number shall be held and construed to include the singular, unless in each instance the context otherwise requires. 5.15 Joint and Several. Where two or more persons or entities have executed this Mortgage, unless the context clearly indicates otherwise, the term "Grantor" as used in this Mortgage means the grantors hereunder or eilher or any of them and the obiigations of Grantor hereunder shail be joint and several. 5.16 Consent of Bank. Except where otherwise provided herein, in any instance hereunder where the approval, consent or the exercise of judgment of Bank is required, the granting or deniai of such approvai or consent and the exercise of such Deed of Trusl Page 13 of 15 judgment shali be wiihin ihe sole discre#ion of Bank, and Bank shall not, for any reason or to any extent, be required to grant such approval or consent or exercise such judgment i� any particular manner, regardless of the reasonableness of either the request or Bank's judgment. 5.17 Modification or Termination. The Loan Documents may only be modified or terminated by a written instrument or instruments executed by the party against which enforcement of the modification or termination is asserted. Any alleged modification or termination which is not so documented shail not be effective as to any party. 5.18 Entire Agreement. The Loan Documents constitute the entire understanding and agreement between Grantor and Bank with respect to the transactions arising in connection with the Debt and supersede all prior written or oral understandings and agreements belween Grantor and Bank with respect ihereto. Grantor hereby acknowledges that, except as incorporated in writing in the Loan Documents, there are not, and were not, and no Persons are or were authorized by Bank to make, any representations, understandings, stipulations, agreements or promises, oral or written, with respect to the transaction which is the subject of the Loan Documents. 5.19 Rules of Construction. The section headings or captions in this Mortgage are for convenience and are not a part of this instrument for any purpose. Any action permitted to Bank may be taken by any authorized officer, employee or ageot of Bank, or any attorney, accountant, environmental consultant or other advisor or professional retained by Bank. Use of the term "including" doesnot implyany limitation on (but may expand) the antecedent reference. Unless the context clearly requires otherwise, the term "may" does not imply any obiigation to act. Any reference to exhibits or schedules means the exhibits or schedules to this Mortgage, which are fully incorporated by reference into this Mortgage. Any reference to a particuiar document includes all modifications, supplements, repiacements, renewals or extensions of that document, but this ruie of construction does not authorize amendment of any document without Bank's consent. 5.20 Change in Organization. Grantor will not cause or permit any (a) change of Grantor's chief executive office to a jurisdiction other than as represented beiow in this Mortgage, or (b) change the state of Grantor's organization as it exists on the date of this Mortgage, or (c) change Grantor's name as it exists on the date of this Mortgage, uniess Grantor shall have notified Bank in writing of such change at least thirty (30) days prior to the effective date of such change, and shall have first iaken all action required by Bank for the purpose of furiher pertecting or protecting the security interest in favor of Bank in the Mortgaged Property. in any writlen notice furnished pursuant to this Section, Grantor wiil expressly state that the notice is required by this Mortgage and contains facts that may require additional fiiings of financing statements or other notices for the purpose of continuing perfection of Bank's security interest in the Mortgaged Property. EXECUTED to be effective as of _____�_______�, 2005. GRANTOR: MEACHAM DEVEIOPMENT, LLC, a Texas limited Iiability company By: Name: Robert M. McM�rrey Title: Manager Address: 5718 Airport Freeway Fort Worth, Texas 76117 Mailinq Address For Bank: TexasBank 300 West 7`h Street Fort Worth, Texas 76102 Attn: Robert Molloy Deed of Trust Page 14 of 15 STATE OF TEXAS COUNTY OFTARRANT This instrument was acknowledged before me on day af , 2005, by Robert M. McMurrey, Manager of Meacham Development, LIC, a Texas limited liability company, on behalf of said limited liability company. [SEAL] Notary Pubiic, State of Texas 481017.2 Deed of Trust Page 15 of 75 WHEN RECORDED. RETURN TO: TEXASBANK 300 WEST7T"STREET FORT WORTH, TEXAS 76102 ATTN: KIM HARP ASSIGNMENT OF TENANT LEASES AND RENTS STATE OF TEXAS COUNTY OF TARRANT THIS ASSIGNMENT OF TENANT LEASES AND RENTS is dated as of the day of _, 2005, from MEACHAM DEVELOPMENT, LLC ("Assignor") to TEXASBANK ("Assiqnee"). WITNESSETH: WHEREAS, Assignee has heretofore or simultaneously herewith made a loan to Assignor, in the committed amount of $7,351,366.00 of even date herewith, which loan is hereinafter referred to as the "Loan"; and WHEREAS, Assignor acknowledges the receipt of either direct or indirect benefits from all of the Loan as consideration for this Assignment; and WHEREAS, in order to induce Assignee to make the Loan, Assignor is desirous of assigning to Assignee, as additional security for the Loan, all present and future leases (hereinafter collectively called the "Lease") covering the land located in Tarrant County, Texas, and more particularly described in Exhibit 'A" attached hereto and made a part hereof (said land together with all rights and appurtenances thereto and all improvements presently located or hereafter constructed thereon being hereinafter collectively called the "Pro ert ') and rentals and other monies due and to become due to the landlord under the Lease; and WHEREAS, Assignor is the owner of leasehold title in and to the Property and of all of the rights, titles and interests of the landlord under the Lease. NOW, THEREFORE, in consideration of the above and of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by Assignor, Assignor hereby covenants and agrees with Assignee as follows: 1. Assignor hereby sells, assigns, transfers and sets over unto Assignee, and Assignee's successors or assigns (a) the Lease, together with any renewals, modifications and extensions thereof and any guarantees of any tenant's obligations thereunder; and (b) all of the rents, income, receipts, revenues, issues and profits now due or which may hereafter become due under the Lease or any renewals, modifications or extensions thereof, as well as all monies due and to become due to Assignor under the Lease for services, materials or installations supplied whether or not the same were supplied under the terms of the Lease (such rents, income, receipts, revenues, issues, profits and other monies assigned hereby being hereinafter called the "Rents"), together with any and all rights and remedies which Assignor may have against any tenant under the Lease or others in possession of the Property or any part thereof for the collection or recovery of monies so assigned, TO HAVE AND TO HOLD the same unto Assignee, and Assignee's successors or assigns, for the purposes herein recited. 2. These presents are given to additionally secure (a) the payment of the Loan and all interest and principal from time to time outstanding thereon as evidenced by all promissory notes evidencing the Loan, Assignment of Tenant Leases and Rents Page 1 of 4 _�=,-��;=>>;,t ��;��,;��;:,c�. �:�f; �,�>>:-.� �. �.v ,r,; • :ST:io•,�c li+ ��'��i i� ,�j `i U;�?�-.!'!.. �'�� i:'�'�J't' � �� S�I'?�(' i (b) the payment of all other sums which Assignor is or may from time to time be obligated to pay or cause to be paid to Pssignee; and (c) the performance of all obligations hereunder and under all loan agreements, assignments, deeds of trust, guaranties and other instruments evidencing and/or securing the Loan and any indebtedness represented thereby and/or any indebtedness now or hereafter owed by Assignor to Assignee (all loan agreements, promissory notes, assignments, deeds of trust, guarantees and other instruments evidencing, pertaining to and/or securing the Loan and such other indebtedness are hereinafter referred to collectively as the "Loan Documents"). 3. Assignor hereby represents, warrants and agrees that: (a) Assignor has the right, powe� and capacity to make this Assignment and that no person, firm or corporation other than Assignor has or will have any right, title or interest in, under or to the Lease or the Rents, except as previously disclosed in writing by Assignor to Assignee. (b) Assignor will, at Assignor's sole cost and expense, fully and timely perform and discharge all of the obligations and undertakings of the landlord under the Lease. Assignor will use all reasonable efforts to enforce or secure the performance of each and every obligation and undertaking of the tenant under the Lease and to the extent commercially possible, will appear in and prosecute or defend any action or proceeding arising under, or in any manner connected with, the Lease or the obligations and undertakings of the tenant thereunder. (c) Assignor will not without the prior written consent of Assignee (i) pledge, transfer, mortgage or otherwise encumber or assign the Lease or the Rents; (ii) waive, excuse, condone or in any manner release or discharge any tenant under the Lease; (iii) disaffirm, cancel, terminate or consent to any surrender of the Lease; (iv) modify, extend or in any way alter the terms of the Lease so as to reduce or diminish or postpone the payment of Rents; or (v) anticipate Rents more than 31 days prior to accrual. (d) Any default by Assignor in the performance of any obligation or undertaking hereunder which continues beyond the applicable notice and cure periods set forth below, shall constitute and be deemed to be a Default or an Event of Default (as therein defined) under the Loan Documents so as to entitle Assignee to exercise any and all of the rights and remedies thereunder, including the right to declare all sums payable under the Loan Documents immediately due and payable without notice or demand except as specified in the Loan Documents. (e) To the best knowledge of Assignor, there are no existing defaults under the Lease and Assignor has not performed any act or executed any instrument which might prevent Assignee from operating under any of the terms and provisions hereof or which would limit Assignee in such operation. 4. These presents shall not be deemed or construed to constitute Assignee as mortgagee in possession of the Property or to obligate Assignee to take any action hereunder, to incur expenses or to perform or discharge any obligation, duty or liability hereunder or under the Lease. Until the Loan and all indelitedness evidenced and/or secured by the Loan Documents shall have been paid in full, Assignor will from time to time execute and deliver unto Assignee upon demand any and all writings that Assignee may reasonably deem necessary or desirable to carry out the purpose and intent hereof, or to enable Assignee to enforce any right or rights hereunder. Assignment of Tenant Leases and Rents Page 2 of 4 5. The term "Event of DefaulY' as used herein shall mean the occurrence of any one of the following: (a) The occurrence of an Event of Default under the Reimbursement Agreement ("Reimbursement AgreemenY') of even date herewith between Assignor and Assignee (as "Event of DefaulY' is defined in the Reimbursement Agreement); or (b) if Assignor shall, without good cause, fail to comply with any of the terms, covenants or provisions of the landlord under the Lease beyond any applicable grace or cure period specified ir� the Lease. 6. All Rents assigned hereunder shall be paid directly to Assignee; and Assignee may notify the tenant under the Lease or any other parties in possession of the Property to pay all of the Rents directly to Assignee at the mailing address specified for Assignee above, for which this Assignment shall be sufficient warrant. Rents so paid to Assignee shall be applied by Assignee in accordance with Section 5.15 of the Reimbursement Agreement. 7. Anything to the contrary notwithstanding (a) Assignor hereby assigns to Assignee any award made hereafter to Assignor in any court proceeding involving the tenant under the Lease, in any bankruptcy, insolvency or reorganization proceeding in any state or federal court, and any and all payments made by said tenant in lieu of rent; and {b) Assignor hereby appoints Assignee as Assignor's irrevocable attorney-in-fact to appear in any action and/or to collect any such award or payment; any such assignment and appointment to become operative upon the occurrence of an Event of Default and to remain in fu11 force and effect so long as any such Event of Default continues. 8. Assignor, upon the continuance of an Event of Default, hereby authorizes Assignee, at Assignee's option, to enter and take possession of the Property and to manage and operate the same; to cotlect as herein provided all or any Rents accruing therefrom and from the Lease; to let or relet the Property or any part thereof; to cancel and modify the Lease, evict any tenant and bring or defend any suits in connection with the possession of the Property, in Assignee's own name or Assignor's name; to make repairs as Assignee deems appropriate; and to perform such other acts in connection with the management and operation of the Property as Assignee, in Assignee's discretion, may deem proper. 9. The receipt by Assignee of any Rents pursuant to this Assignment after the institution of foreclosure proceedi�gs under the Deed of Trust shall not cure any such Event of Default or affect such proceedings or any sale pursuant thereto. 10. Assignee shalt not be obligated to perform or dis charge any obligation or duty to be performed or discharged by Assignor under the Lease; and Assignor hereby agrees to indemnify Assignee for, and to save Assignee harmtess from, any and all liability arising from the Lease or from this Assignment. This Assignment shall not place responsibility for the control, care, management or repair of the Property upon Assignee, or make Assignee 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 tenant, licensee, employee or stranger; provided, however, the aforesaid indemnity and save harmless of Assignor shall not apply to any liability caused by Assignee's gross negligence or willful misconduct occurring while Assignee has actual possession of the Property and is operating same pursuant hereto, upon foreclosure or otherwise. 11. The failure of Assignee 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. Assignee 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 Assignee shall deem fit. Assignment of Tenant teases and Rents Page 3 of 4 92. All notices required or permitted to be given hereunder shall be deemed to have been duly given if deposited in the United States maii, postage prepaid, registered or certified mail, retum receipt requested, and addressed, if to Assignor, at the maiting address set forth below for Assignor and, if to Assignee, at the mailing address set forth below for Assignee, or to such other place or places as a party hereto may by ten (10) days' prior written notice to the other party hereto from time to time designate for the purpose of receiving notices hereunder. 13. The full performance of the Loan Documents and the duly recorded release of this Assignment executed by Assignee shall render this Assignment of no further force or effect from the date of such release forward. 14. This Assignment applies to and binds the parties hereto and their respective heirs, administrators, executors, successors and assigns, as well as any subsequent owner of the Property (or any portion thereo� and any assignee of the Deed of Trust. Any provision in any other agreement creating rights in Assignee other than those created herein shall be deemed incorporated herein by reference and made a part hereof for all purposes. IN WITNESS WHEREOF, Assignor has caused this instrument to be executed as of the date first above written. ASSIGNOR: MEACHAM DEVELOPMENT, LLC, a Texas limited liability company By: Name: Robert M. McMurrey Title: Manager Address for Assianor: 5718 Airport Freeway Fo�t Wo�th, Texas 76117 Address for IVotices to Assiqnee: TexasBank 300 West 7�' Street Fort Worth, Texas 76102 Attn: Robert Molloy STATE OF TEXAS § § COUNTY OF TARRANT § This instrument was acknowledged before me on the day of , 2005, by Robert M. McMurrey, Manager of Meacham Development, LLC, a Texas limited liability company, on behalf of said limited liability company. Notary Public, State of Texas Assignment of Tenant Leases and Rents Page 4 of 4 City of Fort Worth, Texas Mayor and Council Communication m� - COUNCIL ACTION: Approved on 4/5/2005 DATE: Tuesday, April 05, 2005 LOG NAME: 55MCH DEV REFERENCE NO.: **C-20635 SUBJECT: Authorize Execution of a Deed of Trust Lien by Meacham Development, LLC in Favor of TexasBank Related to Lease Sites 5-N through 10-N at Fort Worth Meacham International Airport RECOMMENDATION: It is recommended that the City Council: 1. Authorize the City Manager to cancel City Secretary Contract No. 30731, consent to Deed of Trust Lien upon leasehold by Meacham Development LLC., in favor of Southwest Bank of Texas N.A. for leasehold on Hangars 5-N through 10-N at Fort Worth Meacham International Airport; and 2. Authorize execution of a written consent, executing a Deed of Trust Lien by Meacham Development, LLC. (Meacham Development); in favor of TexasBank for Meacham Development's leasehold for Hangars 5-N through 10-N at Fort Worth Meacham International Airport. DISCUSSION: Meacham Development currently leases Site Nos. 5-N, 6-N, 7-N, 8-N, 9-N and 10-N (Leased Premises) at Meacham International Airport pursuant to City Secretary Contract No. 29135 (the Lease). Under the lease, Meacham Development was required to demolish the deteriorating hangars on the leased premises and, in their place, to construct two 21,976 square foot aircraft hangars, 4,020 square feet of shop space and 14,520 square feet of office space. Meacham Development has completed the construction of the hangars, the shop and the office space. Meacham Development secured financing for the construction phase of the project through Legacy Bank of Texas and Southwest Bank of Texas N.A. Meacham Development has now secured long-term financing with TexasBank and has requested the execution of a new Deed of Trust. The deed of trust lien will grant the bank the right to operate as the lessee or to secure another tenant in place of Meacham Development, if approved by the City Council, in the event that Meacham Development defaults under the loan or breaches its lease with the City. The lease prohibits Meacham Development from making any assignment of the lease or causing any lien to be made on the constructed improvement without Council approval. This type of transaction is routine for large airport tenants and City staff does not have any objections to Meacham Development's request. Meacham Airport is located in COUNCIL DISTRICT 2. FISCAL INFORMATION/CERTIFICATION: The Finance Director certifies that this action will have no material effect on City funds. � �� r.r r,�,-.� � Pa oP 1 nf i TO Fund/Account/Centers Submitted for City Manager's Office bv: Originatin� Department Head: Additional Information Contact: � FROM Fund/Account/Centers Marc Ott (8476) Mike Feeley (5403) Mike Feeley (5403) ccr,rrrr r�� Pacra 7 r�f 7 FORT WpRTH LANDLORD ESTOPPEL CERTIFICATE As of April_ 2005 To Whom It May Concern: ' Re: Lease (the "Ground Lease") entitled "Fort wort Improved and Unimproved Ground Lease Agreement wi h M ham International and between the City of Fort Airport Worth (the "Cit andatory Improvements" by ("Le��) executed as of September 26, 2003 regard �M1 acha� Developrrient, LLC Meacha.m International Airport in Fort Worth T (the "_�� g and located at Fort Worth , arrant County, Texas as described therein Ladies and Gentlemen: Meacham Development, LLC requested that this office provide the fol owing cor�re pon enc creta ry Contract No. 29135, has e and information: 1• The copy of the Ground Lease attached hereto as Ex '' «»• and complete copy of the Ground Lease, including all assi and modifications thereof, and the Ground Lease is ' hlbit A ls a true, correct modified, su g�ents, amendments, supplements pplemented or amended in ln �11 force and effect and has not been represents the legal and binding obligation of he ay except as attached. its terms and provisions. paxties thereto, enforceab1eTn a co�dan e with The Ground Lease consists of the original lease agreement 2003 between Lessee and the City, and the followin g amendments orarriodifi ationsttheber 23. none, please state " none"): eto (if Improvements (as de ln dEn tibit "C" to the Ground Lease describ' he Ground Lease); ing the amended Mandatory 2• The City has consented to the sublease between L Corporation dated April 25, 2003 and subsequently amende May 27, 2p04, June 25, 2004 and August 11, 2004 collec � essee and Mission Research as Exhibit �B" d July 21, 2003, October 2g, 2p03 and the proposed use of the han ar facilit tively "Sublease") � Sublease for aircraft modification and electronics installat' ' all attached hereto attached hereto. Y and outdoor parlcing facility under the ion, all as described in Exhibit "C'�� 3• The City co�rms that the Exhibit "C" to the Ground Lease and the Discretionar Im Mandatory Improvements shown on the updated with the Airport's architectural standards and have bee provements described herein confo Departments of Development, Engineering and Trans orta ' � specifications conform to n apProved in writing by the City's evidenced by the issuance of he City'S Buildi p tlon/pUblic Worlcs, that the plans and pplicable federal, state and local laws the bonding requirements of Sections 8.5 and 8,6 of the Gr and ordinances, as ng Permit attached hereto as Exhibit ��D", and that ound Lease have been satisfied. DALLAS 1516617v1