HomeMy WebLinkAboutContract 42563 CITY SECRETARY _
CONTRACT N O. 26 0
CONSENT TO DEED OF TRUST LIEN UPON LEASEHOLD
FORT WORTH MEACHAM INTERNATIONAL AIRPORT
GROUND LEASE AGREEMENT
LEASE SITE 44N
(CITY SECRETARY CONTRACT NO.
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; WINSTON AVIATION
GROUP, LLC ("Lessee"), a Texas limited liability company; and THE FROST NATIONAL
BANK("Bank"),a National banking association.
A. On or about �Vf\,Vj-. , 2011, Lessor and Lessee entered into City Secretary
Contract No. 47,13 U lo, (the "Lease"), a lease of ground space at Fort Worth Meacham
International Airport ("Airport") known as Lease Site 44N, also known as 4701 N. Main Street
("Leased Premises").
B. In order for Lessee to obtain certain financing related to Lessee's improvements on the
Leased Premises, Lessee and Bank desire Lessor to consent to the execution by Lessee of a
Leasehold Deed of Trust lien on the Leased Premises (the "Deed of Trust") in favor of the Bank,
securing a note in the amount of$1,500,000.00.
NOW,THEREFORE,Lessor,Lessee and the Bank 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 Bank 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 to the Bank of the Deed of
Trust, 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 and does not grant any right, privilege or use to
Lessee, Bank, or any successor in interest pursuant to the Deed of Trust 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, Lessee and the Bank acknowledge, understand and agree
that Lessee and the Bank do not have any right to convey any interests in the Leased Premises
greater than those granted specifically by the Lease. In the event of any conflict between the Deed
of Trust and the Lease, the Lease shall control in all respects as to Lessor and as to Lessee's and the
Bank's obligations to Lessor established by the Lease and/or this Agreement. In the event of any
Consent to Deed of Trust
Winston Aviation Group. H-C
Lase Site 44N r
Page f of 7
conflict between the Deed of Trust and this Agreement, this Agreement shall control. In the event
of any conflict between this Agreement and the Lease, the Lease shall control.
3. In the event that Lessor is required by the Lease to provide any kind of written notice to
Lessee with regard to the Leased Premises, including notice of breach or default by Lessee, Lessor
shall also provide a copy of such written notice to the Bank. Lessor agrees that (iy) the Bank ma
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 Bank's P erformance the
same as if Lessee had performed such obligations or requirements.
4. (a) 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 Bank with written notice of its intent to exercise such any �such right.
The Bank 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 Bank, 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
Bank shall negotiate in good faith a reasonable amount of additional time to cure such default.
(b) Furthermore, in the event the Lease is rejected by Lessee or any assignee of Lessee in
any bankruptcy proceeding filed by or against Lessee or such assignee, Lessor agrees to •ve Bank
91
written notice of such rejection and Bank will have the right fora eriod of thirty Y (30) days
Y
following receipt of such written notice to reinstate the Lease as a direct lease between Lessor and
Bank or any nominee of Bank, subject to approval by Lessor's City Council of Bank or Bank's
nominee as the new lessee under the Lease as reinstated. To exercise such right to reinstate Bank
must give Lessor written notice no later than thirty (30) days after Bank receives notice that the
Lease has been rejected. As a condition to the reinstatement of the Lease, Bank or Bank's nominee
(as the new lessee) must cure all monetary defaults and commence and diligently prosecute the
curi g Yp ng of all non-monetary defaults to the reasonable satisfaction of Lessor. Subject to the
satisfaction of such conditions, the Lease will be reinstated on the same terms and conditions
existing at the time of rejection.
5. Lessor hereby certifies to Bank that: (a) Lessee has accepted and is in possession of the
. p
Leased Premises, (b) neither Lessor nor Lessee 1s in default in the performance of the Lease- c
no rent under the Lease has been paid more than thirty (30) days in advance of its due date; d
Lessee, as of this date, has no claim or offset against the rent; ( e) except as otherwise P rovided
herein, the Lease has not been modified and is valid and enforceable; (f) Lessor is the resent
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owner and holder of the Leased Premises; (g) all amounts required to be paid under the Lease as
of the date hereof have been paid and all terms required under the Lease as of the date hereof
have been performed; and (h) Lessor agrees to comply in a timely manner with all terms of the
Lease required to be performed by Lessor.
Consent to Deed of Trust
Winston Aviation Group, i_LC
Ixase Site 44N
Page Z of 7
6. Lessee agrees that it will not request to or consent to any future modifications, amendments
or assignments of the Lease without first receiving the Bank'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 Bank'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.
7. In the event that Bank undertakes to enforce its rights to any collateral granted by the Deed
of Trust on account default by Lessee under the Deed of Trust, Lessor will cooperate with the Bank
to its efforts to assemble and/or remove any personal property of Lessee on the Premises. The Bank
hereby agrees to repair any damages at or to the Airport, including the Leased Premises, caused by
or incident to such removal.
S. 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 Bank as additional insureds and to cover all public risks related to the leasing, use, occupancy,
mai anc
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ntenance, existence or location of the Leased Premises. Notwithstanding anythin g to the
contrary in the Deed of Trust, the Bank 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 Bank.
91 Subject to Sections 4 and 7 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.
10. The Bank agrees that it promptly will notify Lessor in writing when the Bank has released
its rights under the Deed of Trust. This Agreement will automatically terminate on the earlier of i
the date as of which the Bank releases such rights or(11) the date upon which the Lease expires or is
terminated.
11. The Bank may not sell or otherwise transfer in any way any of the Bank's or Lessee's rights
or interest in the Leased Premises unless Lessor consents to such sale or transfer in the form of a
written agreement approved in advance by Lessor's City Council; provided, however, Bank will
have the right to transfer the Deed of Trust to another financial institution which acquires the
$1,500,000.00 N q
Note from Bank, so long as written notice of the transfer is given to Lessor within
ten (10) business days of the transfer and the transferee notifies Lessor in writing ithin
g ten (10)
business days that it agrees to assume all of Bank's agreements hereunder.
12. Notices to the Bank required pursuant to the provisions of this Agreement shall be
conclusively determined to have been delivered when (i) hand-delivered to the Bank, its a g ents,
employees, servants or representatives, or (ii) deposited in the United States Mail, certified, return
Consent to Deed of Trust
Winston Aviation Group. LLC
Lease Site 44N
Page 3 of 7
receipt requested, addressed as follows:
The Frost National Bank
P. 0. Box 1600
San Antonio,Texas 78296
Ref Loan No. 4636775-9001
Attn: Mr. Larry Chilton
13. 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, will become the sole property of Lessor, free and
clear of all liens, including the Deed of Trust, 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 Bank covenant and agree that nothing herein shall obligate Lessor to assume in any
way Lessee's indebtedness to the Bank.
14, This Agreement may not be withdrawn, amended or modified except b y a written
agreement executed by the parties hereto and approved by Lessor's City Council. Lessee and Bank
covenant and agree that they will not amend the Deed of Trust, or assign any rights and/or
obligations thereunder,without the prior written consent of Lessor.
15, 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.
16. This written instrument, including any documents attached hereto and/or incorporated
herein by reference, contains the entire understanding and agreement between Lessor, Lessee and
Bank 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.
Consent to Deed of Trust
Winston Aviation Group. LLC
Lease Site 44N
Page 4of7
IN WITNESS HEREOF the parties hereto have executed this Agreement in
multiples on this the j day of , 2011.
CITY OF FORT WORTH:
By:
--NNW CAM
WW
ternando 00STa
Acting Assistant City Manager
//1
Date:
STATE OF TEXAS §
COUNTY OF TARRANT §
BEFORE ME, the undersig ed t on Not4r)i Public in and for the State of Texas,
on this day personally appeared F , 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 scat d.
GIVEN UND R MY D AND SEAL OF OFFICE this day
, 2011.
Y P
41,,, IRMA 5AENZ
,
Y {��!rte f
"'= Notary Public,state of Texas
CV
My Commission Expires Notary Public in and for the State o Texas
january 28, 2012
APPROVED AS TO FORM ATTEST:
AND EGALITY:
By: By:
nd
Charlene Saers
Assistant City Attorney Qy Secretary
Contract Authorization. �
M&C. O'U"
Date Approved: 15- 1 �1
C
*0
1C 00
Can. � i-Asent to Deed of Trust Winston Aviation Group, I_LC`
Lease Site 44N
Page 5 of 7
S
�_� T
LESSEE: ATTEST:
WINSTON AVIATION GROUP,LLC
By: By:-
y.
A 11 isen Prigel
Manager
Date:
STATE OF TEXAS §
COUNTY OF TEXAS §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas,
on this day personally appeared Allisen Prigel, 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
Winston Aviation Group,LLC and that s/he executed the same as the act of Winston Aviation
Group, LLC for the purposes and consideration therein expressed and in the capacity therein
stated.
GIVEN UNDE MY HAND AND SEAL OF OFFICE this day
2011.
is in and for the State of Texas
JUAN FIDEI. CHAVEZ
�:' •'�`�'"w Notary Public,State of Texas
• •6..= My commission Expires
••••}!� July 02,201
Consent to Deed of Trust
Winston Aviation Group, 1-1.0 -
1-,ease Site 44N
Page 6 of 7
gip► � � !
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i %
THE FROST NATIONAL BANK, ATTEST:
a national banking association:
,r
t
By: By: dr
Larr r'hilton
Executive Vice President
Date:
STATE of TEXAS §
COUNTY OF §
BEFORE ME, the undersigned authority, a Notary Public in and for the State of Texas, on
this day personally appeared Larry Chilton, 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
Frost National Bank and that s/he executed the same as the act of The Frost National Bank for
the purposes and consideration therein expressed and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE this day
V'\ ,� , 2011.
� 'p DEBRA Di WAITS Notary Public in and for the State of Texas
4 Notary Public ►
7 * STATE OF TEXAS
14
' of
My Comm.Exp.08-12-2014
Consent to Deed of Trust
Winston Aviation Group, H.0
L-,ase Site 44N '
Page 7 of 7
t
When Recorded, Return To:
THE FROST NATIONAL BANK
P.O. Box 1600
San Antonio, Texas 78296
Loan Documentation Department, RB-2
Ref: 4636775-9001
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON,
YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING
INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN
REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS:
YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER,
All
111
Frost
LEASEHOLD DEED OF TRUST,
SECURITY AGREEMENT - FINANCING STATEMENT
THE STATE OF TEXAS §
COUNTY OF TARRANT §
As of the day of November, 2011, WINSTON AVIATION GROUP, LLC, a Texas
limited liability company (hereinafter, whether one or more,jointly and severally called "Grantor"),
whose mailing address is 2512 College Avenue, Fort worth, Texas 76110, in consideration of the
debt and trust hereinafter mentioned, does hereby GRANT, BARGAIN, SELL, TRANSFER,
ASSIGN and CONVEY unto JIMMY R. LOCKE, Trustee (as hereinafter defined), the following
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described property(all of which is sometimes referred to collectively herein as the "Pra ert "):
(i) all of Grantor's leasehold estate in and to the real estate situated in
Tarrant County, Texas, which is more particularly described in Exhibit A attached
hereto and made a part hereof for all purposes the same as if set forth herein verbatim,
together with all right, title and interest of Grantor in and to (a) all streets, roads, alleys,
easements, rights-of-way, licenses, rights of ingress and egress, vehicle parking rights
and public places, existing or proposed, abutting, adjacent, used in connection with or
pertaining to the real property or the Improvements (as hereinafter defined); (b) any
strips or gores between the real property and abutting or adjacent properties; and (c) all
water and water rights, timber, crops and mineral interests pertaining to the real
property (such real estate and other rights, titles and interests being hereinafter
sometimes called the "Land");
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all of Grantor's right, title and interest in and under that certain Fort
Worth Meacham International Airport Ground Lease Agreement (City Secretary
Contract No. _ ), as well as all renewals, amendments, replacements and
supplements thereto (collectively, the "Lease"). A true and correct copy of the existing
Lease is attached hereto as Exhibit B.
(iii) all of Grantor's right, title and interest in all buildings, hangars, covered
garages, air conditioning, towers, open parking areas, structures and other
improvements of any kind or nature, and any additions, alterations, betterments or
appurtenances thereto, (the "Improvements") now or hereafter situated placed or
constructed on the Land;
(iv) all of Grantor's right, title and interest in all fixtures, equipment,
systems, machinery, furniture, furnishings, inventory, goods, building and construction
materials, supplies, and articles of personal property, of every kind and character, now
owned or hereafter acquired by Grantor, which are now or hereafter attached to or
situated in, on or about the Land or the Improvements, or used in or necessary to the
complete and proper planning, development, use, occupancy or operation thereof, or
acquired (whether delivered to the Land or stored elsewhere) for use or installation in
or on the Land or the Improvements, and all renewals and replacements of,
substitutions for and additions to the foregoing, including, but without limiting the
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foregoing, any and all fixtures, equipment, machinery, systems, facilities and apparatus
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for heating, ventilating, air conditioning, refrigerating, plumbing, sewer, lighting,
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generating, cleaning, storage, incinerating, waste disposal, sprinkler, fire extinguishing,
communications, transportation (of people or things, including, but not limited to,
stairways, elevators, escalators and conveyors), data processing, security and alarm
laundry, food or drink preparation, storage or serving, gas, electrical and electronic
water, and recreational uses or purposes; all tanks,pipes, wiring, conduits, ducts, doors,
partitions, rugs and other floor coverings, wall coverings, windows, drapes, window
screens and shades, awnings, fans, motors, engines and boilers; and decorative items
and all objects (all of which are herein sometimes referred to together, as the
Accessories"),
(v) all of Grantor's right, title and interest in all (a)plans and specifications
for the Improvements; (b) contracts relating to the Land, or the Improvements or the
Accessories or any part thereof; (c) deposits, (including, but not limited to, Grantor's
rights in tenants'security deposits, deposits with respect to utility services to the Land
or the Improvements or the Accessories or any part thereof, and any deposits osits or
reserves hereunder or under any other Loan Document (as hereinafter defined) for
taxes, insurance or otherwise, funds, accounts, contract rights, instruments, documents,
commitments, general intangibles (including, but not limited to, trademarks, trade
names and symbols), notes and chattel paper used in connection with or arisin g from or
by virtue of any transactions related to the Land, or the Improvements or the
Accessories or any part thereof; (d) permits, licenses, franchises, certificates and other
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rights and privileges obtained in connection with the Land, or the Improvements or the
Accessories or any part thereof; (e) leases, rents, royalties, bonuses, issues, p rofits,
revenues and other benefits of the Land, the Improvements and the Accessories; and (f)
other properties, rights, titles and interests, if any, specified in any Section or any
Article of this Deed of Trust as being part of the Property; and
(vi) all of Grantor's right, title and interest in all (a) proceeds of or arising
from the properties, rights, titles and interests referred to above in
(i),paragra hs p
(iii), (iv) and (v), including, but not limited to, proceeds of any sale, lease or other
disposition thereof, proceeds of each policy of insurance relating thereto includin
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premium refunds), proceeds of the taking thereof or of any rights appurtenant thereto
by eminent domain or sale in lieu thereof for public or quasi-public use under any law,
and proceeds arising out of any damage thereto whether caused by such a taking
(including change of grade of streets, curb cuts or other rights of access) or otherwise
caused; and (b) other interests of every kind and character, and proceeds thereof, which
Grantor now has or hereafter acquires in, to or for the benefit of the ro erties, rights,
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titles and interests referred to above in paragraphs (i), (ii), (111), (iv) and v and all
property used or useful in connection therewith, including, but not limited to,
remainders, reversions and reversionary rights or interests. In the event the estate of
Grantor in and to any of the Property is a leasehold estate, this conveyance shall
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include, and the lien and security interest created hereby shall encumber and extend to,
all other further or additional title, estates, interest or rights which may exist now or at
any time be acquired by Grantor in or to the property demised under the lease creating
such leasehold estate and including Grantors rights, if any, to the propert y demised
under such lease and, if fee simple title to any of such property shall ever become
vested in Grantor such fee simple interest shall be encumbered by this Deed of Trust in
the same manner as if Grantor had fee simple title to said property as of the date of
execution hereof.
TO HAVE AND TO HOLD the Property, unto Trustee and Trustee's successors, substitutes
or assigns, in trust and for the uses and purposes herein set forth, forever, together with all rights,
privileges, heredltaments and appurtenances in anywise appertaining or belonging thereto, subject
•ect
only to those title exceptions accepted by Beneficiary(collectively the "Permitted Exceptions'), and
Grantor, for Grantor and Grantor's successors, hereby agrees to warrant and forever defend, all and
singular, the Property unto Trustee and Trustee's successors or substitutes in this trust against the
claim or claims of all persons claiming or to claim the same or any part thereof, subject, however,
as aforesaid.
[.I Atif IR)H)DIA l)(W f kU"s I tiI CIiRI f Y MTRI I'MI NA
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ARTICLE I
THE OBLIGATION
Section 1.01. Bene cia . This Deed of Trust [as used herein, the expression "this Deed of
Trust" shall mean this Leasehold Deed of Trust, Security Agreement -Financing Statement], and all
rights, title, interest, liens, security interests, powers and privileges created hereby arising b
Y or ar g Y
virtue hereof, are given to secure payment and performance of the Obligation as hereinafter
defined}, including the indebtedness described in Section 1.02 hereof payable to the order of THE
FROST NATIONAL BANK, a national banking association ("Bene "), whose mailing
address is P.O. Box 1600, San Antonio, Texas 78296. The word "Beneficiary," as used herein
shall mean Beneficiary named in this Section and all subsequent holders of the Note at the time in
question.
Section 1.02. Obli ation. The word "Obli ation," as used herein, shall mean all of the
indebtedness, obligations and liabilities described as follows:
(a) the indebtedness evidenced by that certain promissory note the "Note" of even date
herewith, incorporated herein by this reference, executed by Grantor, p a Y able to the order of
Beneficiary in the principal amount of ONE MILLION FIVE HUNDRED THOUSAND AND
NO/100 DOLLARS ($1,500,000.00), bearing interest as therein specified, containin g an attorney's
Y
fee clause, interest and principal being payable as therein specified;
(b) all indebtedness, obligations and liabilities arising pursuant to the p rovisions of this
Deed of Trust, any other security agreement, mortgage, deed of trust, the Interest Rate Protection
Agreement, if any (as defined in the Loan Agreement of even date herewith by and between
Grantor and Beneficiary), collateral assignment, pledge agreement, Loan Agreement, contract or
assignment of any kind, now or hereafter existing, as security for or in connection with payment of
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the obligation or any part thereof and of any other document evidencing, securing or executed in
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connection with the obligation as amended, modified or restated, ratified, confirmed, extended or
supplemented (herein referred to individually as a "Loan Document" and collectively as the "Loan
Documents");
(c) all other and any additional debts, obligations and liabilities of every kind and character of
Grantor, whether now or hereafter existing, whether related or unrelated to the p �u ose of the Note
in favor of Beneficiary, regardless of whether such debts, obligations and liabilities be direct or
indirect, primary, secondary, joint, several, joint and several, fixed or contingent, unsecured or
secured by additional or different securities, it being contemplated by Grantor and Beneficiary hat
Oran �
Grantor may hereafter become indebted to Beneficiary in further sum or sums provided, however,
that this Deed of Trust shall not secure any indebtedness of Grantor to Beneficiary which under an
circumstances is prohibited by the Texas Finance Code or any other law; and
11 AS]I]OI D D]I!)o] FRt IS-!.S!r VRI!Y ACTH!I M!N'!
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(d) any and all renewals, modifications, rearrangements, amendments or extensions of all or
any part of the indebtedness, obligations and liabilities described or referred to in Subsections
1.02(a), 1.02(b)and 1.02,c}preceding.
Grantor, and each party at any time claiming an interest in or lien or encumbrance against the
Property, agrees that all advances made by Beneficiary from time to time under any of the Loan
Documents, and all other portions of the obligation herein referred to, shall be secured by this Deed
of Trust with priority as if all of the same had been advanced, had arisen or became owing or
performable on the date of this Deed of Trust. No reduction of the outstanding principal balance
under the Note shall extinguish, release or subordinate any rights, titles, interests, liens, security
interests, powers or privileges intended, created or arising hereunder or under any other Loan
Document, and this Deed of Trust shall remain in full force and effect as to any subsequent
advances or subsequently arising portions of the obligation without loss of priority until the
Obligation is fully paid, performed and satisfied, all agreements and obligations, if any, of
Beneficiary for further advances have been terminated and this Deed of Trust has been released of
record by Beneficiary.
ARTICLE II
CERTAIN REPRESENTATIONS WARRANTIES AND
COVENANTS OF GRANTOR
Section 2.01. Warranties and Representations. Grantor represents, warrants and undertakes
that:
(a) Grantor has full right and authority to execute and deliver this Deed of Trust;
(b) Grantor has, in Grantor's own right, good and indefeasible title in the leasehold estate
to the Property, as created by the Lease, free from any encumbrance superior to the indebtedness
hereby secured, subject only to the Permitted Exceptions;
(c) no part of the Property is Grantor's homestead of any type or character and this Deed
of Trust is g
and shall continue to be a valid and enforceable lien and security interest against the
Property until the obligation is fully discharged;
(d) Grantor and each guarantor of the obligation are solvent and no proceeding under er an Y
Applicable Bankruptcy Laws (as hereinafter defined) is pending or threatened by or against an of
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them, or any affiliate of any of them, as a debtor;
(e) if Grantor is a corporation, partnership, limited liability company, trust or other entity,
Grantor
ntor is and shall until the obligation is fully discharged continue to be (i) duly organized and
validly existing in good standing under the laws of the State of Grantor's organization, and in g ood
standing under Texas law, (ii) in compliance with all conditions prerequisite to Grantor's lawfully
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doing business in the State of Texas and (iii)possessed of all power and authority necessary to own,
encumber and operate the Property;
(f) all Loan Documents executed by Grantor have been duly authorized, executed and
delivered by Grantor, and the obligations thereunder and the performance thereof by Grantor in
accordance with their terms are within Grantor's powers and are not in contravention of any law,
agreement or restriction to which Grantor or the Property is subject;
(g) the loan evidenced by the Note is solely for the purpose of carrying on or acquiring a
business of Grantor, and is not for personal, family, household or agricultural purposes;
(h) Grantor's mailing address as set forth herein is true and correct;
(i) all reports, financial statements and other information heretofore furnished to
Beneficiary by or on behalf or at the request of Grantor with respect to the Property, Grantor, any
guarantor or other party liable for payment or performance of the Obligation or any part thereof are,
and all of the same hereafter furnished to Beneficiary will when furnished be, true, correct and
complete in all material respects and do not, or will not, omit any fact, the inclusion of which is
necessary to prevent the facts contained therein from being materially misleading;
(j} since the date of the financial statements of Grantor or of any guarantor or other party
liable for payment or performance of the Obligation or any part thereof heretofore furnished to
Beneficiary, no material adverse change has occurred in the financial condition of Grantor or any
such other party, and, except as heretofore disclosed in writing to Beneficiary, Grantor or any such
other party has not incurred any material liability, direct or indirect, fixed or contingent; and
(k) the Property is taxed separately without regard to any other real estate and the Land
constitutes a legally subdivided lot under all applicable laws and regulations (or, if not subdivided,
no subdivision or platting of the Land is required under applicable laws or regulations), and for all
purposes may be mortgaged, conveyed or otherwise dealt with as an independent parcel.
Section 2.02. Covenants. Grantor, for Grantor and Grantor's successors and permitted
assigns, hereunder covenants, agrees and undertakes to
(a) pay and perform the Obligation in accordance with the terms thereof;
(b) pay or cause to be paid, before delinquent, all taxes and assessments of every kind or
character in respect of the Property or any part thereof and, from time to time upon request of
Beneficiary, to furnish to Beneficiary evidence satisfactory to Beneficiary of the timely payment of
such taxes and assessments and governmental charges (the word "assessments" as used herein
includes not only assessments and charges by any governmental body, but also all other
assessments and charges of any kind, including, but not limited to, assessments or charges for any
utility or utility service, easement, license or agreement upon, for the benefit of, or affecting the
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Property, and assessments and charges arising under subdivision, condominium, planned unit
development or other declarations, restrictions, regimes or agreements);
(c) purchase policies of insurance with respect to the Property with such insurers, in such
amounts and covering such risks as shall be satisfactory to Beneficiary, including, but not limited
to, (i) loss or damage by fire, lightning, hail, windstorm, explosion and such other hazards,
casualties and contingencies (including at least six (6) months rental insurance in an amount equal
to the gross rentals for such period, and broad form boiler and machinery insurance) as are normally
and usually covered by extended coverage policies in effect where the Property is located, and
provided that in the absence of written direction from Beneficiary each commercial property
insurance policy shall include a "standard mortgagee clause" and shall provide by way of
endorsement, rider or otherwise that no such insurance policy shall be canceled, endorsed, altered,
or reissued to effect a change in coverage unless such insurer shall have first given Beneficiary ten
(10) days prior written notice thereof, such policy shall be on a replacement cost basis in an amount
not less than that necessary to comply with any coinsurance percentage stipulated in the policy, but
not less than 100 percent of the insurable value (based upon replacement cost), and the deductible
clause, if any, of the commercial property insurance policy may not exceed the lesser of one percent
of the face amount of the policy or$1,000.00; (ii)loss or damage by flood, if the Property is located
in an area that has been or is hereafter identified by the Director of the Federal Emergency
Management Agency ("FEMA") as a special flood hazard area using FEMA's Flood Insurance
Rate Map or the Flood Hazard Boundary Map for the community in which the Property is
located, in amounts not less than the maximum limit of coverage then available or the amount of
the Note, whichever is less; (iii) bodily injury and disease, including death resulting therefrom,
personal injury and property damage, as are normally and usually covered by the broadest available
form of commercial general liability insurance written on an "occurrence" basis with respect to the
business and any other activities carried on, in or from the Property and with respect to Grantor's
use and occupancy thereof(including a provision for contractual liability coverage insuring Grantor
for the performance of its indemnity obligations set forth in this Deed of Trust and the Loan
Documents), having limits and deductibles as may be required from time to time by Beneficiary,
naming Beneficiary as an "Additional Insured" (using a form reasonably acceptable to Beneficiary,
without modification and containing standard "other insurance" wording, unmodified in any way
that would make it excess over or contributory with the additional insured's own commercial
general liability coverage); and (iv) such other insurance and endorsements, if any, as Beneficiary
may require from time to time, or which is required by the Loan Documents or the Lease;
(d) cause all insurance (except commercial general liability insurance) carried in
accordance with Subsection 2.oZ c hereof to be payable to Beneficiary as a mortgagee and not as a
co-insured, to deliver copies of such policies of insurance to Beneficiary, and, in the case of all
policies of insurance carried by each lessee of all or any portion of the Property for the benefit of
Grantor, to cause all such policies to be payable to Beneficiary as Beneficiary's interest may appear;
(e) pay, or cause to be paid, all premiums for insurance required hereunder at least ten
(10) days before such premiums become due, furnish to Beneficiary satisfactory proof of the
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timeliness of such payments and deliver all renewal policies to Beneficiary at least ten 10 days
before the expiration date of each expiring policy;
(f) comply with all federal, state, or municipal laws, rules, ordinances and regulations
applicable to the Property and Grantor's leasehold ownership, use and operation thereof, and
comply with all, and not violate any, easements, restrictions, agreements, covenants and conditions
with respect to or affecting the Property or any part thereof. Grantor will also comply with all terms
. . pY
and conditions set forth in the Lease;
(g) at all times maintain,preserve and keep the Property in good repair and condition and
presenting a first class appearance, and from time to time, make all necessary and ro er repairs,
p p p
replacements and renewals, and not commit or permit any waste on or of the Property, and not to do
.
anything to the Property that may impair its value and not permit any condition to exist on the
Property that would permit an insurer to cancel or increase the premium for any insurance olio or
. policy
invalidate such policy in whole or in part;
(h) promptly pay all bills for labor and materials incurred in connection with the Property
. P Y
and never permit to be created or to exist in respect of the Property or any part thereof any lien or
security interest, even though inferior to the liens and security interests hereof, for any such bill, and
in any event never permit to be created or exist in respect of the Property art thereof an
P Y or any y
other or additional lien or security interest on a parity with or superior to an of the liens or security
interests hereof;
Y y
(1) from time to time at the request of Beneficiary, (1)promptly correct any defect error
or omission which may be discovered in the contents of this Deed of Trust or in an other Loan
Doc Y
Document or 1n the execution or acknowledgment thereof; (11) execute, acknowledge, deliver and
record and/or file such further instruments (including, without limitation, further deeds of trust
security agreements, financing statements, continuation statements and assignments of rents or
leases) and perform such further acts and provide such further assurances as may be
Y necessary,
desirable or proper, in Beneficiary's opinion, to carry out more effectively purposes the of this Deed
of Trust and such other instruments and to subject to the liens and security nterests hereof and
i Y
thereof any property intended by the terms hereof or thereof to be covered hereby or thereby,
including specifically, but without limitation, any renewals, additions, substitutions, replacements,
or appurtenances to the Property; and (iii) execute, acknowledge, deliver, procure, and file and/or
record any document or instrument (including specifically, but without limitation, an financing
g
statement) deemed advisable by Beneficiary to protect the liens and the security interests herein
granted against the rights or interests of third persons, and Grantor will a all costs connected with
. pay
any of the foregoing;
(j) from time to time, upon the request of Beneficiary, promptly furnish to• p Y Beneficiary
internally prepared financial statements of Grantor prepared in accordance with sound accounting
principles consistently applied and certified to be true and correct by the chief financial officer of
Grantor and deliver to Beneficiary within sixty (60) days after the end of fiscal ear of Borrower,
'
then
current annual statements including a list of assets and liabilities, an income and expense
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statement and containing such other financial information as Beneficiary may request, all in detail
reasonably satisfactory to Beneficiary and certified by Grantor as true and correct, and to allow
Beneficiary from time to time to inspect the Property and all records relating thereto or to the
Obligation, and to make and take away copies of such records;
(k) continuously maintain Grantor's existence and right to do business in Texas;
(1) at any time any law shall be enacted imposing or authorizing the imposition of an tax
p Y
upon this Deed of Trust, or upon any rights, titles, liens or security interests created hereby, or upon
Y p
the obligation or any part thereof, immediately pay all such taxes; provided that, if such law as
enacted makes it unlawful for Grantor to pay such tax, Grantor shall not pay nor be obligated to a g PY
such tax, and in the alternative, Grantor may, in the event of the enactment of such a law, and must,
if it is unlawful for Grantor to pay such taxes, prepay the obligation in full within sixty days
Y
after demand therefor by Beneficiary;
(m) at any time and from time to time, furnish promptly upon the request of Beneficiary,
a written statement or affidavit, in form satisfactory to Beneficiary, stating the unpaid balance of the
Obligation and that there are no offsets or defenses against full payment of the Obligation and the
terms hereof, or, if there are any such offsets or defenses, specifying them;
(n) not cause or permit the Accessories or any part thereof, to be removed from the
county and state where the Land is located, except items of the Accessories which have become
obsolete or worn beyond practical use and which have been replaced by adequate substitutes having
g
a value equal to or greater than the replaced items when new;
(o) not seek or acquiesce in a zoning reclassification of any portion of the Property or
p Y
grant any easement, dedication, plat or restriction(or allow any easement to become enforceable by
prescription) covering any portion of the Property, or remove, release or terminate any easement,
dedication, plat or restriction previously approved by Beneficiary, without Beneficiary's prior
written consent;
(p) not, without the prior written consent of Beneficiary, permit an drilling g or
exploration for or extraction, removal or production of any mineral, natural element, compound or
substance from the surface or subsurface of the Land regardless of the depth thereof or the method
of mining or extraction thereof and agree to defend, indemnify, save and hold Beneficiary, its
officers, agents, servants, employees, successors and assigns harmless from any and all claims,
liabilities, losses or expenses which may be incurred by P Beneficiary, and any and all other expenses
or losses, either direct or consequential, which are attributable, or alleged in any way to be
attributable, to the development and exploitation of mineral rights in, on or around the Property b
p Y Y
Grantor or any other party; and
(q) subject to the provisions of Section 7.07 hereof, pay on demand all reasonable and
bona fide out-of-pocket costs, fees and expenses and other expenditures, including, but not limited
to, reasonable attorneys' fees and expenses, paid or incurred by Beneficiary or Trustee to third
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parties incident to this Deed of Trust or any other Loan Document (including, but not limited to,
reasonable attorneys" fees and expenses in connection with the negotiation, preparation and
execution hereof and of any other Loan Document and any amendment hereto or thereto, any
release hereof, any consent, approval or waiver hereunder or under any other Loan Document, the
making of any advance under the Note, and any suit to which Beneficiary or Trustee is a party
involving this Deed of Trust or the Property) or incident to the enforcement of the obligation or the
exercise of any right or remedy of Beneficiary under any Loan Document.
ARTICLE III
DEFAULTS AND REMEDIES OF BENEFICIARY
Section 3.01. Default. The term "Default," as used herein, shall mean the occurrence of any
one or more of the following events:
(a) the failure, refusal or neglect of Grantor to pay when due any part of the obligation;
or
(b) the failure of Grantor to timely and properly, observe, keep or perform any covenant,
agreement, warranty or condition required herein, or in the Note, or any renewal, modification,
rearrangement, amendment or extension thereof, or in any Loan Document (other than covenants to
pay any sum of money in accordance with the obligation); or
(c) any representation, covenant or warranty contained herein, in any of the other Loan
Documents or in any other document ever delivered by Grantor to Beneficiary in connection with
the obligation, is false, misleading, erroneous or breached in any material respect; or
(d) If Grantor: (i) becomes insolvent, or makes a transfer in fraud of creditors, or makes
an assignment for the benefit of creditors, or admits in writing its inability to or is unable to a its
P y debts as they become due; (ii)generally is not paying its debts as such debts become due; (iii)has a
receiver, trustee or custodian appointed for, or take possession of, all or substantially all of the
assets of Grantor, either in a proceeding brought by Grantor or in a proceeding brought against
Grantor and such appointment is not discharged or such possession is not terminated within 60 days
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after the effective date thereof or Grantor consents to or acquiesces in such appointment or
possession; (iv) files a petition for relief under the Applicable Bankruptcy Laws or an involuntary
petition for relief is filed against Grantor under any Applicable Bankruptcy Law, or an order for
relief naming Grantor is entered under any Applicable Bankruptcy Law, or any composition,
rearrangement, extension, reorganization or other relief of debtors now or hereafter existing is
requested or consented to by Grantor; (v) fails to have discharged within a period of(thirty) 30 days
any attachment, sequestration or similar writ levied upon any Property of Grantor; or (vi) fails to
pay within thirty (30) days any final money p judgment against Grantor. '"Applicable Bankruptcy
Laws" means the United States Bankruptcy Code or any other present or future insolvency,
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bankruptcy, liquidation, conservatorship, reorganization or moratorium, statute, law, ordinance,
rule, regulation,order,writ, injunction or decree, domestic or foreign, applicable to Grantor.
(e) a levy against the Property or any part thereof or against any material portion of
Grantor's other property or any execution, garnishment, attachment, sequestration or other writ or
similar proceeding which is not permanently dismissed or discharged within thirty (30) days after
such levy; or
(f) abandonment of any portion of the Property or any material portion of any of the other
property of Grantor; or
(g) dissolution, liquidation, termination or forfeiture of Grantor's right to do business, or,
if Grantor is an individual, the death or disability of Grantor; or
(h) the filing by Grantor of either a petition, complaint, answer or other instrument which
seeks to effect a suspension of, or which has the effect of suspending any of the rights or powers of
Beneficiary or Trustee granted in the Note,herein or in any Loan Document; or
(i) the occurrence of any event referred to in Subsections c d and h above with
respect to any guarantor or other person or entity obligated in any manner to pay or perform the
Obligation or any part thereof(as if such guarantor or other person or entity were "Grantor" in such
Subsections); or
0) a default by Grantor under the terms of the Lease, which default is not cured within
any applicable cure period provided for in the Lease; or
(k) Grantor modifies, amends or rejects the Lease without the prior written consent of
Beneficiary.
Section 3.02. Bene cia 's Remedies Upon Default. Upon a Default, Beneficiary may, at
Beneficiary's option, do any one or more of the following:
(a) If Grantor has failed to keep or perform any covenant whatsoever contained in this
Deed of Trust, Beneficiary may, but shall not be obligated to any person to do so, perform or
attempt to perform said covenant, and any payment made or expense incurred in the performance or
attempted performance of any such covenant shall be and become a part of the Obligation, and
Grantor promises, upon demand, to pay to Beneficiary, at the place where the Note is p ayable, all
sums so advanced or paid by Beneficiary, with interest from the date when paid or incurred by
Beneficiary at the rate provided in the Note for past due payment. No such payment by Beneficiary
shall constitute a waiver of any Default. In addition to the liens and security interests hereof,
Beneficiary shall be subrogated to all rights, titles, liens and security interests securing the payment
of any debt, claim, tax or assessment for the payment of which Beneficiary may make an advance,
or which Beneficiary may pay.
f I AS HIM.D DH D 0I N IJS I-Si-(IJRi 1Y M IRI-f Mf N-I �1
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(b) Beneficiary may, without notice, demand, resentment notice of nonpayment payment or
nonperformance, protest, notice of protest, notice of intent to accelerate notice of acceleration t on or
any other notice or any other action, all of which are hereby waived b Grantor and all other r
in Y Y parties
obligated in any manner whatsoever on the Obligation, declare the entire unpaid
. g p balance of the
Obligation. immediately due and payable, and upon such declaration the entire unpaid
. pa d balance of
the obligation shall be immediately due and payable.
(c) Beneficiary may request Trustee to proceed with foreclosure under the ower
p of sale
which is hereby conferred, such foreclosure to be accomplished in accordance with the e following
provisions:
(i) Trustee is hereby authorized and empowered and it shall be Trustee's special
duty, upon such request of Beneficiary, to sell the Property or an art thereof, w'
. P y y p with or
without having taken possession of same. Any such sale (including notice thereo shall
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comply with the applicable requirements, at the time of the sale of Section 51.002 of the
Texas Property Code or, if and to the extent such statute is not then in force with the
applicable requirements, at the time of the sale, of the successor statute or statutes if an
governing sales of Texas real property under powers of sale conferred by deeds of trust. If
there is no statute in force at the time of the sale governing sales of Texas real property under
powers of sale conferred by deeds of trust, such sale shall comply with applicable law, at the
PP
time of the sale, governing sales of Texas real property under of sale conferred b
P Y powers Y
deeds of trust.
(ii) In addition to the rights and powers of sale granted under the preceding
provisions of this Subsection, if default is made in the payment of an installment of the
. . P Ym Y
Obligation, Beneficiary may, at Beneficiary's option, at once or at any time thereafter while
any matured installment remains unpaid, without declaring the entire Obligation to be due
and payable, orally or in writing direct Trustee to enforce this trust and to sell the Property
P Y
subject to such unmatured indebtedness and to the rights,powers, liens security interests and
P � y
assignments securing or providing recourse for payment of such unmatured indebtedness, in
the same manner, all as provided in the preceding provisions of this Subsection. Sales made
without maturing the obligation may be made hereunder whenever there is a default in the
payment of any installment of the obligation, without exhausting the power of sale granted
hereby, and without affecting in any way the power of sale granted under this Subsection the
unmatured balance of the obligation or the rights, powers, liens, security interests and
assignments securing or providing recourse for payment of the Obligation.
(iii) Sale of a part of the Property shall not exhaust the power of sale but sales may
. P � Y
be made from time to time until the obligation is paid and performed in full. It is intended b
. P Y
each of the foregoing provisions of this Subsection that Trustee an request or
may, after
direction Y re q
ection by Beneficiary, sell not only the Land and the Improvements, but also the
P
Accessories and other interests constituting a part of the Property art thereof, along
P Y or any � g
with the Land and the Improvements or any part thereof, as a unit and as a part of a single
P g
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sale, or may sell any part of the Property separately from the remainder of the Property. It
shall not be necessary to have present or to exhibit at any sale any of the Property.
(iv) After any sale under this Subsection, Trustee shall make good and sufficient
deeds, assignments and other conveyances to the purchaser or purchasers thereunder in the
name of Grantor, conveying the Property or any part thereof so sold to the purchaser or
purchasers with general warranty of title by Grantor. It is agreed that, in any deeds,
assignments or other conveyances given by Trustee, any and all statements of fact or other
recitals therein made as to the identity of Beneficiary, or as to the occurrence or existence of
any Default, or as to the acceleration of the maturity of the obligation, or as to the request to
sell, notice of sale, time, place, terms and manner of sale, and receipt, distribution and
application of the money realized therefrom, or as to the due and proper appointment of a
substitute trustee, and, without being limited by the foregoing, as to any other act or thing
having been duly done by or on behalf of Beneficiary or by or on behalf of Trustee, shall be
taken by all courts of law and equity as prima facie evidence that the said statements or
recitals state facts and are without further question to be so accepted, and Grantor does hereby
ratify and confirm any and all acts that Trustee may lawfully do in the premises by virtue
hereof.
(d) Beneficiary may, or Trustee may upon written request of Beneficiary, proceed by suit
or suits, at law or in equity, to enforce the payment and performance of the Obligation in
accordance with the terms hereof and of the Note or the Loan Documents, to foreclose the liens and
security interests of this Deed of Trust as against all or any part of the Property, and to have all or
any part of the Property sold under the judgment or decree of a court of competent jurisdiction.
(e) Beneficiary, as a matter of right and without regard to the sufficiency of the security,
and without any showing of insolvency, fraud or mismanagement on the part of Grantor, and
without the necessity of filing any judicial or other proceeding other than the proceeding for
appointment of a receiver, shall be entitled to the appointment of a receiver or receivers of the
Property or any part thereof, and of the income, rents, issues and profits thereof.
(f) Beneficiary may enter upon the Land, take possession of the Property and remove the
Accessories or any part thereof, with or without judicial process, and, in connection therewith,
without any responsibility or liability on the part of Beneficiary, take possession of any property
located on or in the Property which is not a part of the Property and hold or store such property at
Grantor's expense.
(g) Beneficiary may require Grantor to assemble the Accessories or any part thereof, and
make them available to Beneficiary at a place to be designated by Beneficiary which is reasonably
convenient to Grantor and Beneficiary.
(h) After notification, if any, hereafter provided in this Subsection, Beneficiary may sell,
lease or otherwise dispose of, at the office of Beneficiary or on the Land or elsewhere, as chosen by
Beneficiary, all or any part of the Accessories, in their then condition, or following any
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commercially reasonable preparation or processing, and each Sale (as used in this Subsection, the
term "Sale" means any sale, lease, or other disposition made pursuant to this Subsection)may be as
a unit or in parcels, by public or private proceedings, and by way of one or more contracts, and, at
any Sale it shall not be necessary to exhibit the Accessories or part thereof being sold. The Sale of
any part of the Accessories shall not exhaust Beneficiary's power of sale, but Sales may be made
from time to time until the obligation is paid and performed in full. Reasonable notification of the
time and place of any public Sale pursuant to this Subsection, or reasonable notification of the time
after which any private Sale is to be made pursuant to this Subsection, shall be sent to Grantor and
to any other person entitled under the Code (as hereinafter defined) to notice; provided that if the
Accessories or part thereof being sold are perishable, or threaten to decline rapidly in value, or are
of a type customarily sold on a recognized market, Beneficiary may sell, lease or otherwise dispose
of the Accessories, or part thereof, without notification, advertisement or other notice of any kind.
It is agreed that notice sent or given not less than ten (10) calendar days prior to the taking of the
action to which the notice relates, is reasonable notification and notice for the purposes of this
Subsection.
(i) Beneficiary may surrender the insurance policies maintained p ursuant to Subsection
2.02 c hereof or any part thereof, and receive and apply the unearned premiums as a credit on the
Obligation and, in connection therewith, Grantor hereby appoints Beneficiary as -
agent and attorney-
in-fact g Y
in-fact for Grantor to collect such premiums.
0) Beneficiary may retain the Accessories in satisfaction of the Obligation whenever the
circumstances are such that Beneficiary is entitled to do so under the Code.
sale. p judicial
(k) Beneficiary may buy the Property or any part thereof at any ublic sale or
(1) Beneficiary may buy the Accessories or any part thereof at any p rivate sale, if the
Accessories or part thereof being sold are a type customarily sold in a recognized market or a type
subject to widely distributed standard price quotations.
(m) Beneficiary shall have and may exercise any and all other rights and remedies which
Beneficiary may have at law or in equity, or by virtue of any Loan Document, or under the Code, or
otherwise.
(n) Beneficiary may apply the reserves, if any, required by Section 6.03 hereof toward
payment of the obligation.
Section 3.03. Beneflciaty as Purchaser. If Beneficiary is the purchaser of the Property p Y or
any part thereof, at any sale thereof, whether such sale be under the power of sale hereinabove
vested in Trustee or upon any other foreclosure of the liens and security interests hereof, or
otherwise, Beneficiary shall, upon any such purchase, acquire good title to the Property p Y so
purchased, free of the liens and security interests hereof, unless the sale was made Subject to an
unmatured portion of the obligation and Beneficiary elects that no merger occur.
1.1 ASS I IN.1)1)1 1 1)()I I kUS1.S (VRI I Y M)RI I MI.N 1 ��
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Section 3.04. other Rights of Beneficiary. Should any part of the Property come into the
possession of Beneficiary, whether before or after Default, Beneficiary may use or operate the
Property for the purpose of preserving it or its value, pursuant to the order of a court of appropriate
jurisdiction or in accordance with any other rights held by Beneficiary in respect of the Property.
Grantor covenants promptly to reimburse and pay to Beneficiary on demand, at the place where the
Note is payable, the amount of all reasonable expenses (including the cost of any insurance, taxes or
other charges) incurred by Beneficiary in connection with Beneficiary's custody, preservation, use
or operation of the Property, together with interest thereon from the date incurred by Beneficiary at
the rate provided in the Note for past-due principal, and all such expenses, costs, taxes, interest and
other charges shall be and become a part of the obligation. It is agreed, however, that the risk of
loss or damage to the Property is on Grantor, and Beneficiary shall have no liability whatsoever for
decline in value of the Property, for failure to obtain or maintain insurance, or for failure to
determine whether insurance in force is adequate as to amount or as to the risks insured.
Section 3.05 Possession After Foreclosure. If the liens or security interests hereof shall be
foreclosed by power of Trustee's sale, by judicial action or otherwise, the purchaser at any such sale
shall receive, as an incident to Trustee's ownership, immediate possession of the property
purchased, and if Grantor or Grantor's successors shall hold possession of said property or any part
thereof, subsequent to foreclosure, Grantor and Grantor's successors shall be considered as tenants
at sufferance of the purchaser at foreclosure sale (without limitation of other rights or remedies, at a
reasonable rental per day, due and payable daily,based upon the value of the portion of the Property
so occupied), and anyone occupying such portion of the Property after demand is made for
possession thereof shall be guilty of forcible detainer and shall be subject to eviction and removal,
forcible or otherwise, with or without process of law, and all damages by reason thereof are hereby
expressly waived.
Section 3.06. Apj2lication of Proceeds. The proceeds from any sale, lease or other
disposition made pursuant to this Article, or the proceeds from the surrender of any insurance
policies pursuant to Subsection 3.02(i) hereof, or any rental collected by Beneficiary from the
Property, or the reserves required by Section 6.03 hereof, or sums received pursuant to Section 6.01
hereof, or proceeds from insurance which Beneficiary elects to apply to the obligation pursuant to
Section 6.02 hereof, shall be applied by Trustee, or by Beneficiary, as the case may be, as follows:
first, to the payment of all expenses of advertising, selling and conveying the Property or part
thereof, including reasonable attorneys"fees; second, to accrued interest on the obligation; third, to
principal on the matured portion of the Obligation; fourth, to prepayment of the unmatured portion,
if any, of the obligation applied to installments of principal in inverse order of maturity; and fifth,
the balance, if any, remaining after the full and final payment and performance of the Obligation, to
the person or persons legally entitled thereto.
Section 3.07. Abandonment of Sale. In the event a foreclosure hereunder is commenced by
Trustee in accordance with Subsection 3. hereof, Beneficiary may, at any time before the sale,
direct Trustee to abandon the sale, and may then institute suit for the collection of the Note and for
the foreclosure of the liens and security interests hereof. If Beneficiary should institute a suit for the
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collection of the Note and for a foreclosure of the liens and security interests hereof, Beneficiary
may, at any time before the entry of a final judgement in said suit, dismiss the same and require
Trustee to sell the Property or any part thereof in accordance with the provisions of this Deed of
Trust.
Section 3.08. Payment of Fees. If the Note or any other part of the Obligation shall be
collected or enforced by legal proceedings, whether through a probate or bankruptcy court or
otherwise, or shall be placed in the hands of an attorney for collection after maturity, whether
matured by the expiration of time or by an option given to the beneficiary to mature same, or if
Beneficiary becomes a party to any suit where this Deed of Trust or the Property or any part thereof
is involved, Grantor agrees to pay Beneficiary's attorneys'and collection fees, and such fees shall be
and become a part of the Obligation.
Section 3.09. Indemnification of Trustee. Except for gross negligence or willful misconduct,
Trustee shall not be liable for any act or omission or error of judgment. Trustee may rely on any
document believed by Trustee in good faith to be genuine. All money received by Trustee shall,
until used or applied as herein provided, be held in trust, but need not be segregated (except to the
extent required by law), and Trustee shall not be liable for interest thereon. GRANTOR SHALL
INDEMNIFY TRUSTEE AGAINST ALL LIABILITY AND EXPENSES WHICH TRUSTEE
MAY INCUR IN THE PERFORMANCE OF TRUSTEE'S DUTIES HEREUNDER.
Section 3.10. Substitute Trustee. Beneficiary may appoint a substitute Trustee (a) if Trustee
herein named or any substitute Trustee shall die, resign, or fail, refuse or be unable, for any reason,
to make any such sale or to perform any of the trusts herein declared; or (b) at the option of
Beneficiary from time to time as often and whenever Beneficiary prefers and with or without any
reason or cause. Each appointment shall be in writing, but without the necessity of recordation,
notice to Grantor, or any other action or formality. Each substitute trustee so appointed shall
thereupon by such appointment become Trustee and succeed to all the estates, titles, rights,powers,
trusts and duties of predecessor Trustee. Any such appointment may be executed by Beneficiary or
any authorized representative of Beneficiary, and such appointment shall be presumed conclusively
to have been executed with due and proper authority. Without limiting the generality of the
foregoing, if Beneficiary is a corporation, bank or association, of any type or character, such
appointment may be executed in its behalf by any officer of Beneficiary and shall be presumed
conclusively to have been executed with due and proper authority without necessity of proof of any
action by the board of directors or any superior officer. Wherever herein the word "Trustee" is
used, the same shall mean the duly appointed trustee or substitute trustee hereunder at the time in
question. Trustee may resign by written notice to Beneficiary.
ARTICLE IV
SECURITY AGREEMENT AND FINANCING STATEMENT
This Deed of Trust is also a security agreement between Grantor, as debtor, and Beneficiary,
as secured party. Grantor hereby grants to Beneficiary and Beneficiary's successors and assigns, a
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security interest in those portions of the Property which constitute Accessories and each and every
part thereof, and in all proceeds from the sale, lease or other disposition thereof, and in all sums,
proceeds, funds and reserves described or referred to in Sections 6.01, 6.02 and 6.03 hereof.
However, the grant of a security interest in proceeds shall not be deemed to authorize any action
otherwise prohibited herein. The security interest created hereby is specifically intended to cover
and include all leases of the Property (in this Article IV, together with all amendments and
supplements thereto made as provided therein, called the "Leases"), between Grantor (or parties
acting on behalf of Grantor), as lessor or as successor to or assignee from the lessor, and tenants
which occupy the Property under the Leases, including all extended terms and all extensions and
renewals of the terms thereof, as well as any amendments to or replacements of said Leases,
together with all the right, title and interest of Grantor, as lessor thereunder, including, without
limiting the generality of the foregoing, the present and continuing right to make claim for, collect,
receive and receipt for any and all of the rents, income, revenues, issues and profits and moneys
payable as damages or in lieu of rent and moneys payable as the purchase price of the Property or
any part thereof or of awards or claims for money and other sums of money payable or receivable
thereunder howsoever payable, and to bring actions and proceedings thereunder or for the
enforcement thereof, and to do any and all things which Grantor or any lessor is or may become
entitled to do under the Leases, all as assigned to Beneficiary in accordance with Article V hereof;
provided, that this provision and said Article V shall not impair or diminish any obligation of
Grantor under the Leases, nor shall any obligation be imposed upon Beneficiary. In addition to
Beneficiary's rights hereunder or otherwise, Beneficiary shall have all of the rights of a secured
party under the Texas Business and Commerce Code, as amended (the "Code"). Furthermore,
without limiting Beneficiary's rights hereunder, Grantor authorizes Beneficiary to file financing
statements and amendments thereto under the provisions of the Code. In addition, Grantor, from
time to time, upon each request of Beneficiary, shall promptly(a)execute and deliver to Beneficiary
such other documents as required by Beneficiary in order to establish or maintain the validity,
perfection or priority of the security interest with respect to the Accessories or fixtures; (b) pay to
Beneficiary on demand all costs of preparation and filing of financing statements pursuant hereto
and all costs of Code searches reasonably required by Beneficiary; and (c) give to Beneficiary a
certificate in form satisfactory to Beneficiary listing all trade names of Grantor and under which
Grantor operates or intends to operate the Property or any part thereof, and give to Beneficiary
advance written notice of any proposed change of any such trade name and of any change of name
(or trade name or assumed name), identity or structure of Grantor. A carbon, photographic or other
reproduction of this Deed of Trust or of a financing statement executed pursuant hereto is sufficient
as a financing statement. This Deed of Trust is, without limitation, intended to be a financing
statement filed as a fixture filing with respect to the portions of the Property which are or are to
become fixtures, and as mineral, crop and timber filing. The address of Grantor (debtor) is set forth
on the first page hereof and the address of Beneficiary (secured party) from whom information
concerning the security interest may be obtained, is set forth in Section 1.01 hereof. Grantor is the
record owner of the leasehold estate in the Land, the Improvements and the Accessories. Grantor's
jurisdiction of organization is Texas and Grantor's organizational identification number is
80 1491254, or if no number is inserted, Grantor has none. The record fee owner of the Land is the
City of Fort worth, Texas.
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ARTICLE V
LEASES AND ASSIGNMENT OF RENTS
Section 5.01. Assignment of Rents. In consideration of the obligation and other good
and valuable consideration, Grantor does hereby absolutely and unconditionally assign, transfer
and set over to Beneficiary all rents, income, receipts, revenues, issues,profits and proceeds to be
derived from the Property, including, without limitation, the immediate and continuing right to
collect and receive all of the rents, income, receipts, revenues, issues, profits and other sums of
money that may now or at any time hereafter become due and payable to Grantor under the terms
of any leases now or hereafter covering the Property, or any part thereof (collectively the
"Leases"), including, but not limited to, minimum rents, additional rents, percentage rents,
deficiency rents and liquidated damages following Default, all proceeds payable under any policy
of insurance covering the loss of rents resulting from untenantability caused by destruction or
damage to the Property, and all of Grantor's rights to recover monetary amounts from any tenant
in bankruptcy, including, without limitation, rights of recovery for use and occupancy and
damage claims arising out of lease defaults, including rejections, under any Applicable
Bankruptcy Law, together with any sums of money that may now or at any time hereafter become
due and payable to Grantor by virtue of any and all royalties, overriding royalties, bonuses, delay
rentals and any other amount of any kind or character arising under any and all present and future
oil, gas and mining leases covering the Property or any part thereof (collectively, the "Rents");
and all proceeds and other amounts paid or owing to Grantor under or pursuant to any and all
contracts and bonds relating to the construction, erection or renovation of the Property; subject
however to a license hereby granted by Beneficiary to Grantor to collect and receive all of the
foregoing (such license evidenced by Beneficiary's acceptance of this Deed of Trust), subject to
the terms and conditions hereof. Notwithstanding anything contained herein or in any of the other
Loan Documents to the contrary, the assignment in this Paragraph is an absolute, unconditional
and presently effective assignment and not merely a security interest; provided, however, upon
the occurrence of a Default hereunder or upon the occurrence of any event or circumstance which
with the lapse of time or the giving of notice or both would constitute a Default hereunder, such
license shall automatically and immediately terminate and Grantor shall hold all Rents paid to
Grantor thereafter in trust for the use and benefit of Beneficiary and Beneficiary shall have the
right, power and authority, whether or not it takes possession of the Property, to seek
enforcement of any such lease, contract or bond and to demand, collect, receive, sue for and
recover in its own name any and all of the above described amounts assigned hereby and to apply
the sum(s) collected, first to the payment of expenses incident to the collection of the same, and
the balance to the payment of the obligation; provided further, however, that Beneficiary shall
not be deemed to have taken possession of the Property except on the exercise of its option to do
so, evidenced by its demand and overt act for such purpose. It shall not be necessary for
Beneficiary to institute any type of legal proceedings or take any other action whatsoever to
enforce the assignment provisions in this Section 5.01. Neither this assignment nor the receipt of
Rents by Beneficiary shall effect a pro tanto payment of the obligation and such Rents shall be
applied as provided in this Section 5.01. Furthermore, and notwithstanding the provisions of this
Section 5.01, no credit shall be given by Beneficiary for any Rents until the money constituting
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the Rents collected is actually received by Beneficiary and no such credit shall be given for any
Rents collected or released after termination of the license, after foreclosure or other transfer of
the Property (or part thereof from which Rents are derived pursuant to this Deed of Trust) to
Beneficiary or any other third party.
Section 5.02. Warranties Concerning Leases and Rents. Grantor represents and warrants
that:
(a) Grantor has good title to the Leases and Rents and authority to assign
them, and no other person or entity has any right, title or interest therein;
(b) all existing Leases are valid, unmodified and in full force and effect,
except as indicated herein, and no default exists thereunder;
(c) unless otherwise provided herein, no Rents have been or will be assigned,
mortgaged or pledged;
(d) no Rents have been or will be anticipated, waived, released, discounted,
set off or compromised; and
(e) except as indicated in the Leases, Grantor has not received any funds or
deposits from any tenant for which credit has not already been made on
account of accrued Rents.
Section 5.03. Grantor's Covenants of Performance. Grantor covenants to:
(a) perform all of its obligations under the Leases and give prompt notice to
Beneficiary of any failure to do so;
(b) give immediate notice to Beneficiary of any notice Grantor receives from
any tenant or subtenant under any Leases, specifying any claimed default
by any party under such Leases, excluding, however, notices of default
under residential leases;
(c) enforce the tenant's obligations under the Leases;
(d) defend, at Grantor's expense, any proceeding pertaining to the Leases,
including, if Beneficiary so requests, any such proceeding to which
Beneficiary is a party; and
(e) neither create nor permit any encumbrance upon its interest as lessor of the
Leases, except this Deed of Trust and any other encumbrances permitted
by this Deed of Trust.
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Section 5.04. Prior AMroval far Actions Affecting Leases. Grantor shall not, without the
prior written consent of Beneficiary:
(a) receive or collect Rents more than one month in advance;
(b) encumber or assign future Rents;
(c) waive or release any material obligation of any tenant under the Leases;
(d) cancel, terminate or modify any of the Leases; cause or permit any
cancellation, termination or surrender of any of the Leases; or commence
any proceedings for dispossession of any tenant under any of the Leases,
except upon default by the tenant thereunder;
(e) renew or extend any of the Leases, except pursuant to terms in existing
Leases;
(f) permit any assignment of the Leases; or
(g) enter into any Leases after the date hereof.
Section 5.05. Settlement for Termination. Grantor agrees that no settlement for damages
for termination of any of the Leases under any Applicable Bankruptcy Law shall be made without
the prior written consent of Beneficiary, and any check in payment of such damages will be made
payable to both Grantor and Beneficiary. Grantor hereby assigns any such payment to
Beneficiary to be applied to the obligation as Beneficiary may elect and agrees to endorse any
check for such payment to the order of Beneficiary.
Section 5.05. Beneficiary in Possession. Beneficiary's acceptance of this assignment
shall not, prior to entry upon and taking possession of the Property by Beneficiary, be deemed to
constitute Beneficiary a "mortgagee in possession," nor obligate Beneficiary to appear in or
defend any proceedings relating to any of the Leases or to the Property, take any action
hereunder, expend any money, incur any expenses, or perform any obligation or liability under
the Leases, or assume any obligation for any deposits delivered to Grantor by any tenant and not
delivered to Beneficiary. Beneficiary shall not be liable for any injury or damage to any person
or property in or about the Property.
Section 5.07. Appointment of Attorney. Grantor hereby irrevocably appoints Beneficiary
its attorney-in-fact, coupled with an interest, empowering Beneficiary to subordinate any Leases
to this Deed of Trust.
Section 5.05. Indemnifi'caion. GRANTOR HEREBY INDEMNIFIES AND HOLDS
BENEFICIARY (WHICH SHALL INCLUDE THE DIRECTORS, OFFICERS, PARTNERS,
EMPLOYEES, REPRESENTATIVES AND AGENTS OF BENEFICIARY AND ANY
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PERSONS OR ENTITIES OWNED OR CONTROLLED BY, OWNING OR CONTROLLING,
OR UNDER COMMON CONTROL OR AFFILIATED WITH BENEFICIARY) HARMLESS
FROM ALL LIABILITY, DAMAGE OR EXPENSE IMPOSED ON OR INCURRED BY
BENEFICIARY FROM ANY CLAIMS UNDER THE LEASES, INCLUDING, WITHOUT
LIMITATION, ANY CLAIMS BY GRANTOR WITH RESPECT TO PAYMENTS OF RENTS
MADE DIRECTLY TO BENEFICIARY AFTER DEFAULT AND CLAIMS BY ANY
TENANT FOR SECURITY DEPOSITS OR FOR RENTAL PAYMENTS MORE THAN ONE
(1) MONTH IN ADVANCE AND NOT DELIVERED TO BENEFICIARY. ALL AMOUNTS
INDEMNIFIED AGAINST HEREUNDER, INCLUDING, WITHOUT LIMITATION,
ATTORNEYS' FEES, IF PAID BY BENEFICIARY SHALL BEAR INTEREST AT THE
MAXIMUM LAWFUL RATE AND SHALL BE PAYABLE BY GRANTOR IN
ACCORDANCE WITH SECTION 1.01 HEREOF. THE FOREGOING INDEMNITIES
SHALL NOT TERMINATE UPON THE FORECLOSURE, RELEASE OR OTHER
TERMINATION OF THIS DEED OF TRUST BUT WILL SURVIVE FORECLOSURE OF
THIS DEED OF TRUST OR CONVEYANCE IN LIEU OF FORECLOSURE AND THE
REPAYMENT OF THE OBLIGATION AND THE DISCHARGE AND RELEASE OF THIS
DEED OF TRUST AND THE OTHER LOAN DOCUMENTS.
Section 5.09. Records. Upon request by Beneficiary, Grantor shall deliver to Beneficiary
executed copies of all Leases and copies of all records relating thereto.
Section 5.10. Merger. There shall be no merger of the leasehold estates, created by the
Leases, with the fee estate of the Land without the prior written consent of Beneficiary.
Section 5.11. Right to Rely. Grantor hereby irrevocably authorizes and directs the tenants
under the Leases to pay Rents to Beneficiary upon written demand by Beneficiary without further
consent of Grantor, and the tenants may rely upon any written statement delivered by Beneficiary
to the tenants. Any such payment to Beneficiary shall constitute payment to Grantor under the
Leases. The provisions of this Paragraph are intended solely for the benefit of the tenants and
shall never inure to the benefit of Grantor or any person claiming through or under Grantor, other
than a tenant who has not received such notice. The assignment of Rents set forth in Section
5.01 is not contingent upon any notice or demand by Beneficiary to the tenants.
ARTICLE VI
SPECIAL PROVISIONS
Section 6.01. Condemnation Proceeds. Beneficiary shall be entitled to receive any and all
sums which may be awarded or become payable to Grantor for the condemnation of the Property or
any part thereof, for public or quasi-public use, or by virtue of private sale in lieu thereof, and any
sums which may be awarded or become payable to Grantor for damages caused by public works or
construction on or near the Property. All such sums are hereby assigned to Beneficiary and Grantor
shall, upon request of Beneficiary, make, execute, acknowledge and deliver any and all additional
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assignments and documents as may be necessary from time to time to enable Beneficiary to collect
and receipt for any such sums. Beneficiary shall not be, under any circumstances, liable or
responsible for failure to collect, or exercise diligence in the collection of, any of such sums. Any
sums received by Beneficiary as a result of condemnation shall be applied to installments on the
Obligation in inverse order of maturity.
Section 6.02. Insurance Proceeds. The proceeds of any and all insurance upon the Property
shall be collected by Beneficiary and Beneficiary shall have the option, in Beneficiary's sole
discretion, to apply any proceeds so collected either to the restoration of the Property or to the
liquidation of the Obligation.
Section 6.03. Reserve -for Taxes Assessments and Insurance Premiums. Upon Grantor's
failure to perform the covenants of this Deed of Trust concerning the delivery to Beneficiary of
evidence of the payment of taxes and insurance premiums on the Property and upon written request
by Beneficiary, Grantor shall create a fund or reserve for the payment of all insurance premiums,
taxes and assessments against or affecting the Property by paying to Beneficiary, on the first day of
each calendar month prior to the maturity of the Note, a sum equal to the premiums that will next
become due and payable on the hazard insurance policies covering the Property or any part thereof,
plus taxes and assessments next due on the Property or any part thereof as estimated by Beneficiary,
less all sums paid previously to Beneficiary therefor divided by the number of months to elapse
before one (1) month prior to the date when such premiums, taxes and assessments will become
due; such sums to be held by Beneficiary without interest, unless interest is required by applicable
law, for the purposes of paying such premiums, taxes and assessments. Any excess reserve shall, at
the discretion of Beneficiary, be credited by Beneficiary on subsequent reserve payments or
subsequent payments to be made on the Note by the maker thereof, and any deficiency shall be paid
by Grantor to Beneficiary on or before the date when such premiums, taxes and assessments shall
become delinquent. In the event there exists deficiency in such fund or reserve at any time when
taxes, assessments or insurance premiums are due and payable, Beneficiary may, but shall not be
obligated to, advance the amount of such deficiency on behalf of Grantor and such amounts so
advanced shall become a part of the Obligation, shall be immediately due and payable, and shall
bear interest at the rate provided in the Note from the date of such advance through and including
the date of repayment. Transfer of legal title to the Property shall automatically transfer the interest
of Grantor in all sums deposited with Beneficiary under the provisions hereof or otherwise.
Section 6.04. Ri ht to Accelerate U on Trans er. If Grantor shall sell, convey, assign or
transfer all or any part of the Property or any interest therein or any beneficial interest in Grantor,
Beneficiary may, at Beneficiary's option, without demand, presentment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration or other notice, or any other action, all of which
are hereby waived by Grantor and all other parties obligated in any manner on the Obligation,
declare the obligation to be immediately due and payable, which option may be exercised at any
time following such sale, conveyance, assignment or transfer, and upon such declaration the entire
unpaid balance of the Obligation shall be immediately due and payable. Beneficiary may, in
Beneficiary's sole discretion and at Grantor's request, decide not to exercise said option, in which
event Beneficiary's forbearance may be predicated on such terms and conditions as Beneficiary
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may, in Beneficiary's sole discretion require, including, but not limited to, Beneficiary's approval of
the transferee's creditworthiness and management ability, the execution and delivery to Beneficiary
by transferee prior to the sale, transfer, assignment or conveyance of a written assumption
agreement containing such terms as Beneficiary may require, including, but not limited to, a
payment of a part of the principal amount of the obligation, an increase in the rate of interest
payable by the obligation, the payment of an assumption fee, a modification of the term of the
Obligation and such other terms as Beneficiary may require, or Beneficiary may require any of such
modifications of the terms of the obligation without requiring an assumption thereof by the
transferee. Should the Property be sold, traded, transferred, assigned, exchanged or otherwise
disposed of without the prior written consent of Beneficiary and should payment of any portion of
the obligation thereafter be accepted by Beneficiary, such acceptance shall not be deemed a waiver
of the requirement of Beneficiary's consent in writing thereto or with respect to any other sale,
trade, transfer, assignment, exchange or other disposition. Notwithstanding the foregoing, said
option shall not apply in case of: (a) sales or transfers of items of the Accessories which have
become obsolete or worn beyond practical use and which have been replaced by adequate
substitutes having a value equal to or greater than the replaced items when new; (b) the grant, in
the ordinary course of business, of a leasehold interest in a part of the Property of one year or less
for such longer lease term as Beneficiary may permit by prior written approval) to a tenant for
occupancy not containing an option to purchase; and (c) sales or transfers of beneficial interests in
Grantor, provided that such sales or transfers, together with any prior sales or transfers of beneficial
interests in Grantor, do not result in more than forty-nine percent(49%)of the beneficial interests in
Grantor having been sold or transferred since the date of this Deed of Trust.
Section 6.05. Subordinate Financing. If Grantor, without the prior written consent of
Beneficiary, executes or delivers any pledge, security agreement, mortgage or deed of trust covering
all or any portion of the Property (hereinafter called "Subordinate Mortgage"), Beneficiary may, at
Beneficiary's option, which option may be exercised at any time following such pledge, security
agreement, mortgage or deed of trust, without demand, presentment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration or other notice, or any other action, all of which
are hereby waived by Grantor and all other parties obligated in any manner on the obligation,
declare the obligation to be immediately due and payable. In the event of consent by Beneficiary to
the granting of a Subordinate Mortgage, or in the event the above-described right of Beneficiary to
declare the obligation to be immediately due and payable upon the granting of a Subordinate
Mortgage without the prior written consent of Beneficiary is determined by a court of competent
jurisdiction to be unenforceable under the provisions of any applicable law, Grantor will not
execute or deliver any Subordinate Mortgage unless (i) it shall contain express covenants to the
effect: (a) that the Subordinate Mortgage is in all respects unconditionally subject and subordinate
to the lien and security interest evidenced by this Deed of Trust and each term and provision hereof;
(b) that if any action or proceeding shall be instituted to foreclose the Subordinate Mortgage
(regardless of whether the same is a judicial proceeding or pursuant to a power of sale contained
therein), no tenant of any portion of the Property will be named as a party defendant, nor will any
action be taken with respect to the Property which would terminate any occupancy or tenancy of the
Property without the prior written consent of Beneficiary; (c) that the rents and profits, if collected
through a receiver or by the holder of the Subordinate Mortgage, shall be applied first to the
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obligations secured by this Deed of Trust, including principal and interest due and owing on or to
become due and owing on the Note and the other indebtedness secured hereby, and then to the
payment of maintenance, operating charges, taxes, assessments, and disbursements incurred in
connection with the ownership, operation and maintenance of the Property; and (d) that if any
action or proceeding shall be brought to foreclose the Subordinate Mortgage (regardless of whether
the same is a judicial proceeding or pursuant to a power of sale contained therein), written notice of
the commencement thereof will be given to Beneficiary contemporaneously with the
commencement of such action or proceeding; and (ii) a copy thereof shall have been delivered to
Beneficiary not less than ten (10) days prior to the date of the execution of such Subordinate
Mortgage.
Section 6.06. Environmental Matters; Compliance with Laws. Grantor warrants and
represents to Beneficiary that (a) the occupancy, operation, and use of the Property shall not violate
any applicable law, statute, ordinance, rule, regulation, order, writs, injunctions, decrees, or
determination of any governmental authority or any board of fire underwriters (or other body
exercising similar functions), or any restrictive covenant or deed restriction (of record or otherwise)
affecting the Property, including, without limitation, applicable zoning ordinances and building
codes, the Americans with Disabilities Act of 1990, flood disaster laws and Applicable
Environmental Laws, as they may be amended from time to time (hereinafter sometimes
collectively called the "Applicable Regulations"); (b) Grantor and any lessee of space from Grantor
in the Property shall obtain all permits,licenses, or similar authorizations required by reason of any
Applicable Regulations relating to pollution and the protection of health and the environment or the
release of any materials into the environment, including those related to hazardous substances or
wastes, air emissions and discharges to waste or public systems (hereinafter sometimes collectively
called "Applicable Environmental Laws"), including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1950 ("CERCLA") and the Resource
Conservation and Recovery Act of 1976 ("RCRA"), as each is amended from time to time; and (c)
the use that Grantor intends to make, or intends to allow, of the Property will not result in the
disposal of or release of any hazardous substance or solid waste onto or into the Property, or any
part thereof, in violation of any Applicable Environmental Laws. The terms (as used in this Deed
of Trust) "hazardous substance" and "release" have the meanings specified in CERCLA, and the
terms "solid waste" and "disposal" (or "disposed") have the meanings specified in RCRA. If either
CERCLA or RCRA is amended to broaden the meaning of any term defined thereby, the broader
meaning shall apply to this provision after the effective date of the amendment. Moreover, to the
extent that Texas law establishes a meaning for "hazardous substance", "release", "solid waste", or
"dis osal" that is broader than that specified in either CERCLA or RCRA, the broader meaning
shall apply.
Grantor agrees to give prompt written notices to Beneficiary of: (i) any proceeding or
inquiry by any governmental or nongovernmental entity or person with respect to the presence of
any hazardous substance on, in, under, from or about the Property, the migration thereof from or
to other property, the disposal, storage, or treatment of any hazardous substance generated or
used on, under or about the Property, (ii) all claims made or threatened by any third party against
Grantor or the Property or any other owner or operator of the Property relating to any loss or
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injury resulting from any hazardous substance, and (iii) Grantor's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of the Property that could cause the
Property or any part thereof to be subject to any investigation or cleanup of the Property pursuant
to any Applicable Environmental Law. Grantor shall permit Beneficiary to join and participate in,
as a party if it so elects, any legal proceedings or actions initiated with respect to the Property in
connection with any Applicable Environmental Law or hazardous substance, and Grantor shall
pay all attorneys' fees incurred by Beneficiary in connection therewith. If any remedial work is
required by Applicable Environmental Law or is reasonably necessary in the opinion of
Beneficiary, Grantor shall commence and thereafter diligently prosecute to completion all such
remedial work within thirty (30) days after written demand by Beneficiary for performance
thereof (or such shorter period of time as may be required under any Applicable Environmental
Law). All remedial work shall comply with Applicable Environmental Laws after consultation
and approval by the governing authority under the Applicable Environmental Law. Remedial
work shall be performed by contractors approved in advance by Beneficiary, and under the
supervision of a consulting engineer approved by Beneficiary. All costs and expenses of such
remedial work shall be paid by Grantor including, without limitation, Beneficiary's reasonable
attorneys' fees and costs incurred in connection with monitoring or review of such remedial
work. If Grantor shall fail to timely commence, or cause to be commenced, or fail to diligently
prosecute to completion, such remedial work, Beneficiary may, but shall not be required to, cause
such remedial work to be performed, and all costs and expenses thereof, or incurred in
connection therewith, shall become part of the Obligation.
Beneficiary (through its officers, employees and agents) at any reasonable time and from time
to time, either prior to or after Default in this Deed of Trust or under the Note secured hereby, may
employ persons (the "Site Reviewers") to conduct environmental site assessments ("Site
Assessments") on the Property to determine whether or not there exists on the Property any
environmental condition which might result in any liability, cost or expense to the owner, occupier
or operator of the Property arising under the Applicable Environmental Laws. The Site
Assessments may be performed at any time or times, upon reasonable notice, and under reasonable
conditions established by Beneficiary (so as not to unreasonably interfere with the operation of the
Property). The Site Reviewers are authorized at their own risk to enter upon the Property and to
perform above and below-the-ground testing(including, without limitation, taking of core samples)
to determine environmental damage or presence of any hazardous substance or solid waste in, on or
under the Property and such other tests as may be necessary or desirable, in the opinion of the Site
Reviewers, to conduct Site Assessments. Grantor will supply to the Site Reviewers such historical
and operational information available to Grantor regarding the Property as may be requested by the
Site Reviewers to facilitate the Site Assessments and will make available for meetings with the Site
Reviewers appropriate personnel having knowledge of such matters. The cost of performing such
Site Assessments will be paid by Grantor upon demand of Beneficiary, which, if not paid, will be
added to the indebtedness secured by this Deed of Trust.
GRANTOR SHALL INDEMNIFY, DEFEND (WITH COUNSEL SELECTED BY
BENEFICIARY) AND HOLD BENEFICIARY, ITS OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS AND ATTORNEYS AND ALL PARTIES ACTING ON BEHALF OF BENEFICIARY
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(THE "INDEMNIFIED PARTIES") HARMLESS FROM AND AGAINST, AND REIMBURSE
INDEMNIFIED PARTIES WITH RESPECT TO, ANY AND ALL CLAIMS, DEMANDS,
CAUSES OF ACTION, LOSS, DAMAGE, LIABILITIES, COSTS, AND EXPENSES
(INCLUDING ATTORNEY'S FEES AND COURT COSTS) OF EVERY KIND OR
CHARACTER, KNOWN OR UNKNOWN, FIXED OR CONTINGENT, ASSERTED AGAINST
OR INCURRED BY INDEMNIFIED PARTY AT ANY TIME AND FROM TIME TO TIME BY
REASON OF OR ARISING OUT OF ANY VIOLATION OF AN APPLICABLE
ENVIRONMENTAL LAW AND ALL MATTERS ARISING OUT OF ACTS, OMISSIONS,
EVENTS, OR CIRCUMSTANCES RELATING TO THE PROPERTY, GRANTOR OR
GRANTOR'S BUSINESS (INCLUDING, WITHOUT LIMITATION, THE PRESENCE ON THE
PROPERTY OR RELEASE FROM OR TO THE PROPERTY OF HAZARDOUS
SUBSTANCES OR SOLID WASTES DISPOSED OF OR OTHERWISE RELEASED AND
GRANTOR'S BREACH OF ANY OF ITS COVENANTS, REPRESENTATIONS OR
INDEMNITIES UNDER THIS PROVISION), REGARDLESS OF WHETHER THE ACT,
OMISSION, EVENT, OR CIRCUMSTANCE CONSTITUTED A VIOLATION OF ANY
APPLICABLE ENVIRONMENTAL LAW AT THE TIME OF THE EXISTENCE OR
OCCURRENCE. THE REPRESENTATIONS, COVENANTS, WARRANTIES AND
INDEMNIFICATIONS HEREIN CONTAINED SHALL SURVIVE THE RELEASE AND/OR
JUDICIAL OR NON-JUDICIAL FORECLOSURE (OR TRANSFER IN LIEU THEREOF) OF
THE LIEN OF THIS DEED OF TRUST.
Section 6.07. Apjyaisals. Upon written request of Beneficiary, Grantor agrees to reimburse
Beneficiary for the full cost of narrative appraisals of the Property, such appraisals being required
from time-to-time in Beneficiary's sole discretion to re-evaluate the current value of the Property
due to (a) a deterioration of Grantor's revenue from the property, (b) an increase in Grantor's
operating expenses for the property, or (c) other events which would suggest a deterioration in the
value of the Property. Each appraisal shall be ordered directly by Beneficiary from an appraiser
satisfactory to Beneficiary and shall be in form and substance necessary to comply with all laws and
regulations affecting Beneficiary. Grantor shall reimburse Beneficiary for any requested appraisal
expense within thirty (30) days from the date of the written request by Beneficiary. Appraisals may
be ordered by Beneficiary at any time in its sole discretion, but Grantor is required to reimburse
Beneficiary for only one appraisal in any calendar year. Failure of Grantor to reimburse Beneficiary
for any requested appraisal (not to exceed one appraisal in any twelve month period) shall constitute
a Default under this Deed of Trust.
Section 6.08. Waiver ot De ficiency Statute. (a) In the event an interest in any of the
Property is foreclosed upon pursuant to a judicial or nonjudicial foreclosure sale, Grantor agrees as
follows. Notwithstanding the provisions of Section 51.003, 51.004 and 51.005 of the Texas
Property Code (as the same may be amended from time to time), and to the extent permitted by law,
Grantor agrees that Beneficiary shall be entitled to seek a deficiency judgment from Grantor and
any other party obligated on the Note equal to the difference between the amount owing on the Note
and the amount for which the Property was sold pursuant to judicial or nonjudicial foreclosure sale.
Grantor expressly recognizes that this section constitutes a waiver of the above-cited provisions of
the Texas Property Code which would otherwise permit Grantor and other persons against whom
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recovery of deficiencies is sought or any guarantor independently (even absent the initiation of
deficiency proceedings against them) to present competent evidence of the fair market value of the
Property as of the date of the foreclosure sale and offset against any deficiency the amount by which
the foreclosure sale price is determined to be less than such fair market value. Grantor further
recognizes and agrees that this waiver creates an irrebuttable presumption that the foreclosure sale
price is equal to the fair market value of the Property for purposes of calculating deficiencies owed
by Grantor, any guarantor, and others against whom recovery of a deficiency is sought.
(b) Alternatively, in the event the waiver provided for in subsection (a) above is
determined by a court of competent jurisdiction to be unenforceable, the following shall be the basis
for the finder of fact's determination of the fair market value of the Property as of the date of the
foreclosure sale in proceedings governed by Sections 51.003, 51.004 and 51.005 of the Texas
Property Code (as amended from time to time): (i) the Property shall be valued in an "as is"
condition as of the date of the foreclosure sale, without any assumption or expectation that the
Property will be repaired or improved in any manner before a resale of the Property after
foreclosure; (ii) the valuation shall be based upon an assumption that the foreclosure purchaser
desires a resale of the Property for cash promptly (but no later than twelve (12) months) following
the foreclosure sale; (iii) all reasonable closing costs customarily borne by the seller in commercial
real estate transactions should be deducted from the gross fair market value of the Property,
including, without limitation, brokerage commissions, title insurance, a survey of the Property, tax
prorations, attorneys'fees, and marketing costs; (iv)the gross fair market value of the Property shall
be further discounted to account for any estimated holding costs associated with maintaining the
Property pending sale, including, without limitation, utilities expenses, property management fees,
taxes and assessments (to the extent not accounted for in (iii) above), and other maintenance,
operational and ownership expenses; and (v) any expert opinion testimony given or considered in
connection with a determination of the fair market value of the Property must be given by persons
having at least five (5) years' experience in appraising property similar to the Property and who
have conducted and prepared a complete written appraisal of the Property taking into consideration
the factors set forth above.
Section 6.09. Collateral Protection Notice. In case of Grantor's failure to keep the
Property properly insured as required herein, Beneficiary, after notice to Grantor, at its option
may (but shall not be required to) acquire such insurance as required herein at Borrower's sole
expense. TEXAS FINANCE CODE SECTION 307.052 COLLATERAL PROTECTION
INSURANCE NOTICE: A GRANTOR IS RE UIRED To i KEEP THE
MORTGAGED PROPERTY INSURED AGAINST DAMAGE IN THE AMOUNT
SPECIFIED HEREIN; 60 PURCHASE THE INSURANCE FROM AN INSURER THAT
IS AUTHORIZED To DO BUSINESS IN THE STATE OF TEXAS OR AN ELIGIBLE
SURPLUS LINES INSURER OR OTHERWISE AS PROVIDED HEREIN• AND iii
NAME BENEFICIARY AS THE PERSON TO BE PAID UNDER THE POLICY IN THE
EVENT OF A LOSS AS PROVIDED HEREIN; (BI SUBJECT To THE PROVISIONS
HEREOF GRANTOR MUST IF RE UIRED BY BENEFICIARY DELIVER To
BENEFICIARY A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF
PREMIUMS• AND C SUBJECT TO THE PROVISIONS HEREOF IF GRANTOR
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FAILS TO MEET ANY RE UIREMENT LISTED IN THE FOREGOING SUBPARTS
A OR B BENEFICIARY MAY OBTAIN COLLATERAL PROTECTION
INSURANCE ON BEHALF OF GRANTOR AT GRANTOR'S EXPENSE.
Section 6.10. Contest of Certain Maims. Notwithstanding the provisions of Subsections
2.02 b or 2.02(h) hereof, Grantor shall not be in default for failure to pay or discharge any tax,
assessment, or mechanic's or materialman's lien asserted against the Property if, and so long as, (a)
Grantor shall have notified Beneficiary of same within five days of obtaining knowledge thereof;
(b) Grantor shall diligently and in good faith contest the same by appropriate legal proceedings
which shall operate to prevent the enforcement or collection of the same and the sale of the
Property or any part thereof, to satisfy the same; (c) Grantor shall have furnished to Beneficiary a
cash deposit, or an indemnity bond satisfactory to Beneficiary with a surety satisfactory to
Beneficiary, in the amount of the tax, assessment or mechanic's or materialman's lien claim, plus a
reasonable additional sum to pay all costs, interest and penalties that may be imposed or incurred in
connection therewith, to assure payment of the matters under contest and to prevent any sale or
forfeiture of the Property or any part thereof; (d) Grantor shall promptly upon final determination
thereof pay the amount of any such tax, assessment or claim so determined, together with all costs,
interest and penalties which may be payable in connection therewith; (e) the failure to pay the tax,
assessment or mechanic's or materialman's lien claim does not constitute a default under any other
deed of trust, mortgage or security interest covering or affecting any part of the Property; and (f)
notwithstanding the foregoing, Grantor shall immediately upon request of Beneficiary pay (and if
Grantor shall fail so to do, Beneficiary may, but shall not be required to, pay or cause to be
discharged or bonded against) any such tax, assessment or claim notwithstanding such contest, if in
the reasonable opinion of Beneficiary the Property shall be in jeopardy or in danger of being
forfeited or foreclosed. Beneficiary may pay over any such cash deposit or part thereof to the
claimant entitled thereto at any time when, in the judgment of Beneficiary, the entitlement of such
claimant is established.
ARTICLE VII
MISCELLANEOUS
Section 7.01. Release. If the Obligation is paid in full in accordance with the terms of this
Deed of Trust, the Note and the Loan Documents, and if Grantor shall well and truly perform all of
Grantor's covenants contained herein, then this conveyance shall become null and void and be
released at Grantor's request and expense and Beneficiary shall have no further obligation to make
advances under and pursuant to the provisions hereunder or in the Note.
Section 7.02. Rights Cumulative. Beneficiary shall have all rights, remedies and recourses
granted in the Loan Documents and available at law or in equity (including, without limitation,
those granted by the Code and applicable to the Property or any portion thereof), and the same (a)
shall be cumulative and concurrent, (b) may be pursued separately, successively or concurrently
against Grantor or others obligated for the obligation or any part thereof, or against any one or
more of them, or against the Property, at the sole discretion of Beneficiary, (c) may be exercised as
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often as occasion therefor shall arise, it being agreed by Grantor that the exercise, discontinuance of
the exercise of or failure to exercise any of the same shall in no event be construed as a waiver or
release thereof or of any other right, remedy or recourse, and (d) are intended to be, and shall be,
nonexclusive. All rights and remedies of Beneficiary hereunder and under the other Loan
Documents shall extend to any period after the initiation of foreclosure proceedings, judicial or
otherwise, with respect to the Property.
Section 7.03. Waiver. Any and all covenants in this Deed of Trust may, from time to time,
by instrument in writing signed by Beneficiary and delivered to Grantor, be waived to such extent
and in such manner as Beneficiary may desire, but no such waiver shall ever affect or impair
Beneficiary's rights, remedies, powers, privileges, liens, titles and security interests hereunder
except to the extent so specifically stated in such written instrument. No waiver of any Default on
the part of Grantor or a breach of any of the provisions of this Deed of Trust or of any Loan
Document shall be considered a waiver of any other or subsequent default or breach, and no delay
or omission in exercising or enforcing the rights and powers herein granted shall be construed as a
waiver of such rights and powers, and likewise no exercise or enforcement of any rights or powers
hereunder shall be held to exhaust such rights and powers, and every such right and power may be
exercised from time to time. No notice to or demand on Grantor in any case shall of itself entitle
Grantor to any other or further notice or demand in similar or other circumstances. The granting of
any consent or approval by Beneficiary shall be limited to the specific instance and shall not waive
or exhaust the requirement of consent or approval in any other instance. Except as otherwise
specified herein, in any instance hereunder where Beneficiary's approval or consent is required or
the exercise of Beneficiary's judgment is required, the granting or denial of such approval or
consent and the exercise of such judgment shall be within the sole discretion of Beneficiary, and
Beneficiary shall not, for any reason or to any extent, be required to grant such approval or consent
or exercise such judgment in any particular manner regardless of the reasonableness of the request
or of Beneficiary's judgment.
Section 7.04. Payments. Remittances in payment of any part of the obligation other than in
the required amount in funds immediately available at the place where the Note is payable shall
not, regardless of any receipt or credit issued therefor, constitute payment until the required amount
is actually received by Beneficiary in funds immediately available at the place where the Note is
payable (or such other place as Beneficiary, in Beneficiary's sole discretion, may have established
by delivery of written notice thereof to Grantor) and shall be made and accepted subject to the
condition that any check or draft may be handled for collection in accordance with the practice of
the collecting bank or banks. Acceptance by Beneficiary of any payment in an amount less than the
amount then due shall be deemed an acceptance on account only, and the failure to pay the entire
amount then due shall be and continue to be a default.
Section 7.05. Exce tions to covenants. Grantor shall not be deemed to be permitted to take
any action or to fail to take any action, notwithstanding (a) that the action or omission may be
permitted as an exception to any of the covenants or conditions contained herein, or (b) that
obligations of Grantor or rights of Beneficiary are provided herein with respect to the action or
omission (or the result thereof), if the action or omission would result in the breach of any other
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covenant or condition contained herein or in any of the Loan Documents, nor shall Beneficiary be
deemed to have consented to any such act or omission if the same would provide cause for
acceleration of the obligation.
Section 7.06. Change otSecu riV. Any part of the Property may be released, regardless of
consideration, by Beneficiary from time to time without impairing, subordinating or affecting in any
way the lien, security interest and other rights hereof against the remainder. The lien, security
interest and other rights granted hereby shall not be affected by any other security taken for the
Obligation or any part thereof. The taking of additional security, or the extension, renewal or
rearrangement of the obligation or any part thereof, shall not release or impair the lien, security
interest and other rights granted hereby, or affect the liability of any endorser or guarantor or
improve the right of any junior lienholder; and this Deed of Trust, as well as any instrument given
to secure any renewal, extension or rearrangement of the obligation or any part thereof, shall be and
remain a first and prior lien, except as otherwise provided herein, on all of the Property not
expressly released until the obligation is fully paid and performed.
Section 7.07. Controllj!jg,Agreement. The parties hereto intend to conform strictly to the
applicable usury laws. All agreements between Grantor (and any other party liable for any part of
the obligation) and Beneficiary, whether now existing or hereafter arising and whether written or
oral, are expressly limited so that in no event whatsoever, whether by reason of acceleration of the
maturity of the obligation or otherwise, shall the interest contracted for, charged or received by
Beneficiary hereunder or otherwise exceed the maximum amount permissible under applicable law.
If from any circumstances whatsoever interest would otherwise be payable to Beneficiary in excess
of the maximum lawful amount, the interest payable to Beneficiary shall be reduced automatically
to the maximum amount permitted under applicable law. If Beneficiary shall ever receive anything
of value deemed interest under applicable law which would apart from this provision be in excess
of the maximum lawful amount, the amount which would have been excessive interest shall be
applied to the reduction of the principal amount owing on the obligation in inverse order of
maturity and not to the payment of interest, or if such amount which would have been excessive
interest exceeds the unpaid principal balance of the obligation, such excess shall be refunded to
Grantor, or to the maker of the Note or other evidence of indebtedness if other than Grantor. All
interest paid or agreed to be paid to Beneficiary shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full stated term, including any renewal or
extension, of such indebtedness so that the amount of interest on account of such indebtedness does
not exceed the maximum permitted by applicable law. The terms and provisions of this section
shall control and supersede every other provision of all existing and future agreements between
Grantor, the maker of the Note or other evidence of indebtedness if other than Grantor, and
Beneficiary.
Section 7.08. Effect of Transfer on Grantor's Liability. If the ownership (legal or beneficial)
of the Property or any part thereof becomes vested in a person other than Grantor, or in the event of
a change in ownership (legal or beneficial) of any Grantor other than an individual, Beneficiary
may, without notice to or consent of Grantor or Grantor's successors, deal with such successor or
successors in interest with reference to this Deed of Trust and the Obligation either by way of
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forbearance on the part of Beneficiary, or extension of time of payment of the obligation, or release
of all or any part of the property or any other property securing payment of the obligation, or
otherwise, without in any way modifying or affecting Beneficiary's rights and liens hereunder or the
liability of Grantor or any other party liable for payment of the obligation, in whole or in part.
Section 7.09. Waiver of Right to.Marshal. Grantor hereby waives all rights of marshaling in
the event of any foreclosure of the liens and security interests hereby created.
Section 7.10. Subrogation. To the extent that proceeds of the obligation are used to renew,
extend or pay any outstanding debt or to perform any obligation, such proceeds have been advanced
by Beneficiary at Grantor's request, and Beneficiary shall be subrogated to all liens, security
interests, rights, priorities, powers, titles, equities and interests owned or held by any owner or
holder of such outstanding debt or obligation, however remote, irrespective of whether the same are
released of record, and all of the same are recognized as valid and subsisting and are renewed,
continued and preserved in force to secure the obligation; provided, however, that if and to the
extent Beneficiary desires in each case, the terms and provisions hereof and of the other Loan
Documents shall govern the rights and remedies of Beneficiary and shall supersede the terms,
provisions, rights, and remedies under any lien, security interest, charge or other encumbrance to
which Beneficiary is subrogated hereunder.
Section 7.11. Covenant to Perform. Grantor and each subsequent owner of the Property or
any part thereof, covenants and agrees that Grantor or any subsequent owner will perform or cause
to be performed, each and every condition, term, provision and covenant of this Deed of Trust,
except that Grantor shall have no duty to pay the indebtedness evidenced by the Note except in
accordance with the terms of the Note and all renewals and extensions thereof, and this Deed of
Trust or in accordance with the terms of the transfer to Grantor or any subsequent owner.
Section 7.12. .Notice. Except as otherwise provided herein, all notices, demands, requests
and other communications required or permitted hereunder shall be in writing, and shall be deemed
to be given and delivered when received, or if earlier and regardless of whether or not actually
received (except where actual receipt is specified herein), upon deposit in a regularly maintained
receptacle for the United States mail, registered or certified, postage fully prepaid, return receipt
requested, addressed to the addressee at such addressee's address set forth herein or at such other
address as such party may have specified theretofore by notice delivered in accordance with this
Section and actually received by the addressee. To the extent actual receipt is required herein,
rejection or other refusal to accept or the inability to deliver because of changed address of which
no notice was received shall be deemed to be receipt of the notice, demand, request or other
communication sent.
Section 7.13. En orceabili(y. If any provision of this Deed of Trust or the application thereof
to any person or circumstance shall, for any reason and to any extent, be invalid or unenforceable,
neither the remainder of this Deed of Trust nor the application of such provision to any other person
or circumstances shall be affected thereby, but rather the same shall be enforced to the greatest
extent permitted by law. If the rights and liens created by this Deed of Trust shall be held by a court
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of competent jurisdiction to be invalid or unenforceable as to any part of the Obligation, the portion
of the Obligation which as the result of such invalidity or unenforceability is no longer secured by
the liens and security interests herein granted shall be completely paid prior to the payment of the
portion, if any, of the Obligation which shall continue to be secured hereunder, and all payments
made on the Obligation shall be considered to have been paid on and applied first to the complete
payment of the unsecured portion of the Obligation.
Section 7.14. Bindima Effect. The covenants herein contained shall bind, and the benefits
and advantages shall inure to, the respective heirs, executors, administrators, personal
representatives, successors, and assigns of the parties hereto and shall be covenants running with
the Land. The term "Grantor" shall include in their individual capacities and jointly all parties
hereinabove named a Grantor. The duties, covenants, conditions, obligations, and warranties of
Grantor in this Deed of Trust shall be joint and several obligations of Grantor and, if more than one,
of each party named a Grantor hereinabove, and each such party's heirs, personal representatives,
successors and assigns. Each party who executes this Deed of Trust and each subsequent owner of
the Property or any part thereof(other than Beneficiary), covenants and agrees that it will perform,
or cause to be performed, each term,provision, covenant and condition of this Deed of Trust.
Section 7.15. Headings; construction. The headings which have been used throughout this
Deed of Trust have been inserted for convenience of reference only and do not constitute matter to
be construed in interpreting this Deed of Trust. Words of any gender used in this Deed of Trust
shall be held and construed to include any other gender and words in the singular number shall be
held to include the plural, and vice versa, unless the context requires otherwise. The words
"herein," 'Thereof," "hereunder" and other similar compounds of the words "here" when used in this
Deed of Trust shall refer to the entire Deed of Trust and not to any particular provision or section.
Section 7.16. counterparts. This Deed of Trust has simultaneously been executed in a
number of identical counterparts, each of which, for all purposes, shall be deemed an original. If
any Grantor is a corporation, this instrument is executed, acknowledged and delivered by Grantor's
officers hereunto duly authorized.
Section 7.17. Controllin g Law. This Deed of Trust shall be governed by and construed in
accordance with Texas law and applicable United States federal law.
Section 7.18. Purpose. The Note is given as a part of the purchase price of the leasehold
estate in the Property, and this Deed of Trust is in addition to any implied vendor's lien to
Beneficiary securing the payment of the indebtedness described herein; and it is expressly agreed
that the same shall not operate as a waiver of the lien created by this Deed of Trust, it being agreed
that said lien and rights created by this instrument shall be cumulative and in addition to said
implied vendor's lien above mentioned, and that the owner or holder of the above described
indebtedness may foreclose under either or both of said liens, as the owner or holder may elect,
without waiving the other; said deed above mentioned, together with its record, being herein
referred to and made a part of this instrument.
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Section 7.19. Leasehold Morteage Provisions.
(a) Grantor shall timely pay each rental payment under the Lease and submit to
Beneficiary upon request, from time to time, proof of payment. Grantor shall
timely and properly perform all other obligations of the lessee under the Lease and
furnish Beneficiary with such evidence thereof as Beneficiary may from time to
time require. Beneficiary may, but shall not be obligated to, take any action that
Beneficiary deems necessary or desirable to perform the obligations of Grantor, as
lessee under the Lease, or to cure any default in the performance of any obligation
of Grantor, as lessee under the Lease, and all sums expended by Beneficiary in
such connection shall constitute a portion of the indebtedness secured by this
Deed of Trust and shall bear interest until paid by Grantor at the rate specified in
the Note to be applicable after default thereunder. Beneficiary shall have the right
to enter the Property to perform any obligation of Grantor under the Lease and/or
to inspect the Property. Should Beneficiary take any such action, Beneficiary
shall become subrogated to all rights of the lessor under the Lease as against
Grantor, as lessee, arising on account of Grantor's failure to perform the
obligation performed or cured by Beneficiary. Grantor shall send Beneficiary a
copy of each Notice of Default or other Notice or correspondence received by
Grantor under the Lease within two (2) business days after receipt thereof by
Grantor. No release, waiver or forbearance by the lessor under the Lease of any of
the Grantor's obligations as lessee thereunder shall release Grantor from any of
Grantor's obligations under this Deed of Trust, including Grantor's obligation
regarding the payment of rent and the timely and proper performance of all
obligations of the lessee under the Lease.
(b) Grantor will not surrender its leasehold estate and interest in and to the Land,
Improvements or the Lease, nor terminate, reject or cancel the Lease, and it will
not without the express prior written consent of Beneficiary modify, change,
supplement, alter or amend the Lease, either orally or in writing, and as further
security for the repayment of the indebtedness secured hereby and for the
performance of the covenants set out in this Deed of Trust and in the Lease,
Grantor hereby assigns to Beneficiary all of its rights, privileges and benefits as
lessee under the Lease to terminate, cancel, modify, reject, change, supplement,
alter or amend the Lease, and any other such termination, cancellation,
modification, rejection, change, supplement, alteration or amendment of the Lease
without the prior written consent thereto by Beneficiary shall be void and of no
force in effect.
(c) Unless Beneficiary so otherwise expressly consents in writing, the fee title, if any,
to the property demised by the Lease and the leasehold estate thereunder shall not
merge but shall always remain separate and distinct, notwithstanding the union of
said estates either in the lessor, in Grantor, or in a third-party by purchase or
otherwise, and Grantor further covenants and agrees that, in case it shall acquire
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fee title, or any other estate, title or interest in the property covered by the Lease,
this Deed of Trust shall attach to, and cover, and be a lien upon such other estates
so acquired, and such other estates so acquired by Grantor shall be considered as
granted, assigned, transferred, mortgaged, pledged and set over onto Beneficiary
and the lien hereof shall extend to and encumber such estate with the same force
in effect as though specifically herein granted, assigned, conveyed, transferred,
mortgaged, pledged and set over to Beneficiary.
(d) Grantor shall not, in any event, including the bankruptcy, reorganization or
insolvency of Grantor or the fee owner of the Land (the "Fee Owner"), (i)
surrender its leasehold estate, or any portion thereof, nor terminate, cancel or
acquiesce in the rejection of the Lease; (ii) consent or fail to object to any attempt
by the Fee Owner to sell or transfer its interest in the Land and the Improvements
free and clear of the Lease; or (iii) modify, change, supplement, alter or amend the
Lease in any respect, either orally or in writing. Grantor does hereby expressly
release, assign, relinquish and surrender unto Beneficiary all its right, power and
authority to terminate, cancel, acquiesce in the rejection of, consent or object to
any attempted transfer of Fee Owner's interest in the Land and Improvements free
and clear of the Lease, or modify, change, supplement, alter or amend the Lease in
any respect, either orally or in writing, at any time, including in the event of the
bankruptcy, insolvency or reorganization of Grantor or Fee Owner, and any
attempt on the part of Grantor to exercise any such right without the written
consent of Beneficiary shall be null and void. Notwithstanding the foregoing, in
the event of a threatened termination or rejection of the Lease due to the
bankruptcy, reorganization or rejection of the Lease due to the bankruptcy,
reorganization or insolvency of Grantor, Grantor shall, at Beneficiary's election,
absolutely assign to Beneficiary, or its nominee, in lieu of such termination or
rejection, all of Grantor's right, title and interest in and to the Lease.
EXECUTED to be effective as of the date first above written.
GRANTOR:
WINSTON AVIATION GROUP, LLC,
a Texas limited liability company
By: vloo���
Name: A I I is e4ri Fr-i,4 e
Title: Manager
Schedule of Exhibits:
Exhibit A - Land
Exhibit B - Lease
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o M
THE STATE OF TEXAS §
COUNTY OF TARRANT §
This lnstru ent was acknowledged before me on the day of November, 2411, by
-,Zl�/ -e7? , Manager of Winston Aviation Group, LLC, a Texas limited liability
company, on behalf of said limited liability company.
Not in and for the State of Texas
JUAN FIDEL CHAVEZ
Notary Public,State of Texas
PREPARED IN THE LAW OFFICE OF: 3, r,,,,�}t� My Commission Expires
'•y��s�.��� July 02,2013
James Webb
McDonald Sanders, PC
777 Main Street, Suite 1340
Fort Worth, Texas 76142
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EXHIBIT A
TO
LEASEHOLD DEED OF TRUST SECURITY AGREEMENT AND
FINANCING STATEMENT
Pro art
See attached.
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EXHIBIT A
Part of Block 1 and Part of Lot B-1 of Block 1, Meacham International Airport Addition
San Antonio and Mexican Gulf Railroad Company Survey, Abstract No. 1464
City of Fort Worth, Tarrant County, Texas
DESCRIPTION of a 3.818 acre tract of land situated in the San Antonio and Mexican Gulf
Railroad Company Survey, Abstract No. 1464, Tarrant County, Texas; said tract being part of
Block 1 and Lot B-1 of Block 1, Meacham International Airport Addition, an addition to the City
of Fort Worth, according to plat recorded in Cabinet A, Slides 2445-2447, Plat Records of
Tarrant County, Texas; said 3.818 acre tract being more particularly described as follows:
BEGINNING at a 112-inch iron rod with "LANDES" cap found for the northeast corner of herein
described tract; said point being South 30 degrees 53 minutes 17 seconds East, a distance of
1 56.63 feet from a 60D-nail found for the northeast corner of said Lot B-1; said point being in
the west right-of-way line of North Main Street (Spur No. 496) (a variable width right-of-way) for
the northeast corner of Lot B-1;
THENCE, South 30 degrees, 03 minutes, 29 seconds East, a distance of 353.25 feet to an
angle point;
THENCE, South 17 degrees, 46 minutes, 00 seconds East, a distance of 79.21 feet to a point
for corner in the north line of Lot A-2, Block 1 of said Meacham International Airport Addition;
THENCE, South 81 degrees, 05 minutes, 21 seconds West, along the said north line of Lot A-
2, a distance of 272.25 feet to a point for corner at the northwest corner of said Lot A-2;
THENCE, South 08 degrees, 54 minutes, 39 seconds East, along the west line of said Lot A-2,
a distance of 3.97 feet to a point for corner;
THENCE, South 81 degrees, 11 minutes, 24 seconds West, departing the said west line of Lot
A-2, a distance of 145.22 feet to the southeast corner of Building No. 43N;
THENCE, North 08 degrees, 48 minutes, 36 seconds West, along the east wall of said Building
No. 43N, a distance of 107.67 feet to the northeast corner of said Building No. 43N;
THENCE, North 17 degrees, 17 minutes, 56 seconds West, a distance of 29.32 feet to the
southwest corner of Building No. 44N;
THENCE, North 08 degrees, 48 minutes, 36 seconds West, along the west wall of said Building
No. 44N a distance of 21.02 feet to a point for corner;
THENCE, South 81 degrees, 11 minutes, 24 seconds West, departing the said west wall of
Building No. 44N, a distance of 100.00 feet to a point for corner;
THENCE, North 08 degrees, 48 minutes, 36 seconds West, a distance of 199.25 feet to a point
for corner;
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THENCE, North 81 degrees, 11 minutes, 24 seconds East, a distance of 100.00 feet to a point
for corner in the said west wall of Building No. 44N;
THENCE, North 08 degrees, 48 minutes, 36 seconds West, along the said west wall of Building
No. 44N, a distance of 30.12 feet to the northwest corner of said Building No. 44N;
THENCE, North 03 degrees, 15 minutes, 57 seconds East, a distance of 20.43 feet to the
southeast corner of Building No. 45N;
THENCE, North 08 degrees, 48 minutes, 36 seconds West, along the east wall of said Building
No. 45N, a distance of 4.90 feet to a point for corner;
THENCE, North 81 degrees, 11 minutes, 24 seconds East, departing the said east wall of
Building No. 45N, a distance of 277.17 feet to the POINT OF BEGINNING;
CONTAINING: 166,318 square feet or 3.818 acres of land, more or less.
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EXHIBIT B
TO
LEASEHOLD DEED OF TRUST SECURITY AGREEMENT AND
FINANCING STATEMENT
Lease
See attached.
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City of Fort Worth, Texas
Mayor and Council Commun 'icati'on
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COUNCIL ACTION: Approved on 11/15/2011
DATE: Tuesday, November 15, 2011 REFERENCE NO.: C-25305
LOG NAME: 55FTW WINSTONAVGRP
SUBJECT:
Authorize Execution of a Ground Lease Agreement with Winston Aviation Group, LLC, and a Consent to
Deed of Trust by Winston Aviation Group, LLC, in Favor of The Frost National Bank for Lease Site 44N,
Containing Approximately 166,318 Square Feet of Ground Space and a 59,250 Square Foot Hangar at
Fort Worth Meacham International Airport (COUNCIL DISTRICT 2)
RECOMMENDATION:
It is recommended that the City Council authorize execution of a Ground Lease Agreement with Winston
Aviation Group, LLC, and a Consent to Deed of Trust by Winston Aviation Group, LLC, in favor of The
Frost National Bank, for Lease Site 44N, containing approximately 166,318 square feet of ground space
and a 59,250 square foot hangar, at Fort Worth Meacham International Airport.
DISCUSSION:
Winston Aviation Group, LLC (Winston), has proposed to purchase the leasehold interest of
APIAQ Limited Partnership (APIAQ) in Lease Site 44N at Fort Worth Meacham International
Airport (Meacham). Lease Site 44N, with approximately 166,318 square feet of ground space
and a 59,250 square foot hangar, was previously leased to APIAQ under City Secretary
Contract No. 26292, as amended. City Secretary Contract No. 26292, as amended, was
terminated in conjunction with a request from FTW FBO, LLC, for a new Ground Lease for
Lease Sites 43N and 45N at Meacham.
City Staff has no objection to Winston's request for a new lease. A complete survey of Lease
Site 44N is being conducted to establish the exact square footage, as Winston's request
included adding ground space that is not a part of the current Lease Site 44N. The additional
square footage requested will allow for expansion of parking lots and landside access.
The lease term for Lease Site 44N will be effective upon the date of execution through
November 30, 2040. Based on a ground rate of$0.2402 per square foot per year, lease site
44N will generate estimated revenue of$39,949.58 per year or $3,329.13 per month. Rental
rates shall be subject to an increase on October 1 of any given year to reflect the upward
percentage change, if any, in the Consumer Price Index for the period since the last adjustment,
as described in the Schedule of Rates and Charges in effect at that time. All agreement terms
will be in accordance with established City and Aviation Department policies.
Winston has obtained financing in order to finance the acquisition of the leasehold estate of
Lease Site 44N. Winston and The Frost National Bank (Lender) have requested that the City of
Fort Worth consent to the execution of a Leasehold Deed of Trust by Winston in favor of
Logname: SSFTW WINSTONAVGRP Page 1 of 2
L,Pnder. The Leasehold Deed of Trust Lien will grant Lender the right to operate as the lessee or
to secure another tenant in place of Winston, if previously approved by the City Council, in the
event that Winston defaults under the loan or breaches its lease with the City. The lease
prohibits Winston from making any assignment of the lease or causing any lien to be made on
the constructed improvements without previous City Council approval. This type of transaction is
routine for large airport tenants and City staff has no objection to Winston's request.
The property is located in COUNCIL DISTRICT 2.
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FISCAL INFORMATION 1 CERTIFICATION:
The Financial Management Services Director certifies that the Aviation Department is responsible for the
collection and deposit of funds due to the City.
FUND CENTERS:
TO Fu nd/Accou nt/Centers FROM Fund/Account/Centers
PE40 491052 0551101 $39,949.58
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CERTIFICATIONS:
Submitted for City Manager's Office b Fernando Costa (5122)
Originating Department Head: Kent Penney (5403)
Additional Information Contact: Jonnie Huitt (5409)
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ATTACHMENTS
No attachments found.
Logname: 55FTW WINSTONAVGRP Page 2 of 2