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HomeMy WebLinkAboutContract 32201 r1l"ITY SEC RETARY'Q r' NO CONSENT TO DEED OF TRUST,SECURITY AGREEMENT AND FINANCING STATEMENT FORT WORTH MEACHAM INTERNATIONAL AIRPORT GROUND LEASE AGREEMENT LEASE SITE 44-N (CITY SECRETARY CONTRACT NO. 246292,AS AMENDED) This CONSENT TO DEED OF TRUST AND SECURITY AGREEMENT ("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; APIAQ LIMITED PARTNERSHIP,a Texas limited partnership("Lessee"); and THE FROST NATIONAL BANK("Lender"), RECITALS The following statements are true and correct and form the basis of this Agreement: A. Lessor and Lessee previously entered into City Secretary Contract ("CSC") No. 26292 as assigned to Lessee pursuant to CSC No.26645/27455(collectively,the"Lease"),for the lease of real property located at Fort Worth Meacham International Airport known as lease Site No.44N(the"Leased Premises"). B. Pursuant to that certain Leasehold Deed of Trust and Security Agreement, executed as of August 27,2003,by Lessee as the"Grantor", for the benefit of Lender,and recorded at Volume 17158,Page 0 151 of the Real Property Records of Tarrant County,Texas(the"2003 Leasehold Deed of Trust"),Lessee conveyed a security interest in the Leased Premises to Lender to secure the obligations of Phaero, LLC, a Texas limited liability company and an affiliate of Lessee("Phaero"), under that certain Promissory Note, dated January 26, 2000, in the original principal amount of ONE MILLION SEVEN HUNDRED FIFTY THOUSAND and No/100 Dollars ($1,750,000,00)and payable to the order of Lender, as amended by that certain Modification and Renewal Agreement,entered into on February 18, 2003, to be effective November 26, 2002(the"Note"). C. Lender, as of the date of this Agreement, is the holder of the Note. D. Lessee now desires:(i)that Lender extend to Lessee a short-tenn loan in the principal amount of$2,400,000.00(the"Loan"); (ii) to grant a "junior" security interest in the Leased Premises to Lender to secure the Loan by executing, as"Grantor",a Junior Leasehold Deed of Trust and Security Agreement(the "Junior Deed of Trust"),which form is attached hereto and incorporated herein as Exhibit A,;and(iii)that the Lessor consent to the Junior Deed of Trust,as hereinafter described. E. The Lender has agreed to accept the Junior Deed of Trust as security for the Loan and Lessor has agreed to consent to the Junior Deed of Trust. NOW THEREFORE, in consideration of$10.00 and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,Lessor,Lessee and Lender agree as follows: Consent to Deed of Trust CSC No.26292,APIAQ Limited Partnership Lease Site 44-N Page I of 6 U1111 AGREEMENT I Lessor hereby consents to the execution by Lessee of the Junior Deed of Trust. The Lease is incorporated herein hvreference for all purposes. The Leased Premises are specifically described in Exhibit B utmcbcJ beo:|u and hereby made u part of this Agreement for all purposes. However, Lessee and Lender understand and agree that hyexecuting this Agreement,Lessor does not(i)adopt,ratify ncapprove m[any of the particular provisions of the Junior Deed of Trust or(ii)grant any right, privilege or use toLender orany assignee under the Junior Deed ofTrust that iudifferent from ormore extensive than any right,privilege oruse granted toLessee hythe Lease. l Lessor agrees and covenants that i1mhu]\not exercise any rights itmay 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 Lender with written notice ofits intent(oexercise any such right. Lender shall have ten (l0)calendar days from the date it receives such notice(ocure any monetary default under the Leuue, and thirty(3O)days from the date it receives such notice tocure,perform nrassume any of Lessee's non-monetary obligations under the Lease ,o Lessor's mudo[uotion� provided, however, that if Londer, in good faith and after diligent and continuous efforts toremedy any non-monetary default byLessee under the Lease, cannot cure such default within thirty(30)duyu, it may ouguomt Lessor to provide reasonable amount of additional time to cure such default, inwhich case Lessor will provide Lender with unextended deadline tocure such default uxdetermined byLessor in its sole but reasonable discretion, 3. As aoondition precedent to the effectiveness of this Agreement,Lessee agrees and covenants that it will endorse all insurance policies required bythe Lease(oname both Lessor and Lender moadditional insureds and to cover al I public risks related to the leasing, use,occupancy, maintenance,existence or location of the |cuoedPremimex. Notwithstanding anything to the contrary in the Junior Deed of Trust or any other agreement entered into by and between Lessee and Lender,Lender hereby agrees and covenants that any and all proceeds payable under the terms of such insurance policies shall first be applied to cover the replacement of all facilities and improvements onthe Leased Premises and tosatisfy fully the terms and conditions ofthe Lease. Payment of such proceeds shall apply secondarily to secure any of Lessee's indebtedness to Lender in connection with the Loan. 4. Notwithstanding anything to the contrary in the Junior Deed of Trust,(i)Lender may not assign any of its rights under the Junior Deed o[Trust tuany other person,firm orcorporation,SAVE AND EXCEPT those rights subject to that certain Participation Agreement, dated February 18, 2003. by and between Gary Vy. 8uvener,an individual,and Leoder,and(ii) in the event that Lender forecloses upon Lessee under the Junior Deed of Trust, Lender may not sell or otherwise transfer in any way any of Lender's or Lessee's rights or interest in the Leased Premises unless Lessor consents(which consent shall not unreasonably be withheld)to such sale or transfer in the form of a written consent to Assignment approved by Lessor's City Council. 5. So long as Lessee(or in the event of a foreclosure under the Junior Deed of Trust,Lender or a lawful third party assignee of Lender) is not in default under the Lease at the tinoo. Lender may, at no expense to Lessor and inaccordance with the Junior Deed ofTrust,enter onto the Leased Premises utany time ortimes and take possession of, sever or remove personal property of Lessee that is not permanently affixed to the Leased Premises (other than trade fixturen), inciudin8, but not |imitcd to, muuhinory, oguipmeot, fuondurc, fixtures, inventory and all additions, replacements or substitutions therefore (collectively, the"Property"), which Property may hesold, transferred o,otherwise disposed ofhyLender. 6. Lender agrees that it promptly wil I notify Lessor in writing when Lender has released its rights under the Junior Deed ofTrust. This Agreement will automatically terminate on the date that Lender releases any Consent tnDeed ofTrust CSC No.Zd292.Ay/xVLimited Partnership Lease Site 44-N Page 2of6 such rights. loaddition,this Agreement will automatically terminate upon the expiration octermination ofthe Lease. 7. Notices to Lender required pursuant to the provisions of this Agreement mbo|| be conclusively determined to have been delivered when (i) huod'de|ivcred to Lendor, its agents, emp|oyces, servants or representatives;(ii)deposited in the United States Mail to the address below;or(iii) sent via facsimile to the number below. THE FROST NATIONAL BANK P.O. Box 1600 San Antonio,TX?829h Attention: Loan No. 37D07O7-D003 8Inthe event that the Lease expires or is terminated,nothing herein shall obligate Lessor to assume in any way Lessee's indebtedness or to relieve Lessee of its obligation to liquidate and discharge,at Lessee's sole cost and expense, any lien on the Leased Premises and any structures, improvements and fixtures thereon. Q. In the event of any conflict between this Agreement and the Lease, the Lease shall control. In the event of any conflict between the Junior Deed of Trust and the Lease,the Lease shall control in all respects as to Lessor and as to Lessee's and Lender's obligations and relationship to Lessor as set forth in the Lease and/or this Agreement. In the event of any conflict hnt*oon the Junior Deed of Trust and this Agreement, this Agreement shall control. 10. This Agreement may not be withdrawn,amended or modified except by a written agreement executed bythe parties hereto and approved byLessor's City Council. Lessee and Lender covenant and agree that they wil I not amend the Junior Deed of Trust,or assign any rights and/or obligations thereunder,without the prior written consent n[Lessor. | |. 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 n[Texas,Fort Worth Division. 12. This written \nxtrumcnt, including any documents attached hereto and/or incorporated herein by no/ereuce, contains the entire understanding and agreement between Lessor, Lessee and Lender ox to the matters contained herein. Any prior or contemporaneous oral or written agreement concerning such matters is hereby declared null and void tnthe extent inconflict with this Agreement. Consent/wDeed o(Trust CSC No.z6z0z.ApIAQLimited Partnership Lease Site 44'w Page 3or6 IN WITNESS WHEREOF, the parties hereto have executed this Agreement in multiples as of the last date set forth below, LESSOR: LESSEE: CITY OF FORT WORTH: APIAQ LIMITED PARTNERSHIP: By: Cidema Corporation,a Texas corporation By: a"WN&L.- and its general partner Marc Ott Assistant City Manager By: Date Signed: too; Name: Title: -P1(S( 06A)7 Date Signed: 3 - 6 el APPROVED AS TO FORM AND LEGALITY: LENDER: THE FROST NATIONAL BAN - By: '-)f' — Maleshia f�: Farmer By: Assistant City Attorney Name,__- M&C: Date Signed: s' 1 L Date Signed: ATTEST: By: D(� " Marty Hendrix City Secretary Contract Authors zatiox e mm Consent to Deed of Trust CSC No.26292.APIAQ Limited Partnership Lease Site 44-N Page 4 of 6 STATE OF TEXAS § COUNTY OF TARRANT § A, BEFORE MErthe undersigned authority, a Notary Public in and for the State of Texas, on this day personally appeared A4af@-O*,, known to me to be the person whose name is subscribed to the foregoing instrument,and acknowledged to me that the same was the act of the City of Fort Worth and that he executed the same as the act of the City of Fort Worth for the purposes and consideration therein expressed and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE this ?teLyof 6&Ax2005. MY LAWL- Notary Public in and for the State of Texas CON'"SS!Cil EXPIRES. July 26,2007 STATE OF TEXAS § COUNTY OF r r 4 11 J— § BEFORE ME the undersigned authority, a Notary Public in and for the State of Texas, on this day personally appeared ��16�r%u known tome to be the person whose name is subscribed to the foregoing instrument,an acknowledged to me that the same was the act of APIAQ Limited Partnership, and that s/he executed the same as the act of APIAQ Limited Partnership,for the purposes and consideration therein expressed and in the capacity therein stated. ,�'3 P"'el d GIVEN UNDER MY HAND AND SEAL OF OFFICE this, ay of . ............ 2005, Notary Public,State of Texas RHEA MOORE T)qme- Ixas MY COrnmission Expires Notary Public in and for the State of Texas February 01, 2008 Consent to Deed of Trust CSC No.26292,APIAQ Limited Partnership Lease Site 44-N Page 5 of 6 130 STATE OF TEXAS § COUNTY OFT _�— § BEFOREthe undersigne auth ri a Notary Public in and for the State of Texas, on this day personally appeare�l�7t �,�. Lown 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 thisl-��day of AJ J, , 2005. SUSMI G, MAYBERRY '4� Aj NotaryNbuc,State orTOMS Notary Public in and for the t of exas My Comnrrt:nIon Expires June 26.2008 Consent to Deed of Trust CSC No.26292,APIAQ Limited Partnership Lease Site 44-N Page 6 of 6 A R�ta �iw X <Y 4..,-a Exhibit "A" When Recorded, Return To: THE FROST NATIONAL BANK P. O. Box 180O San Antonio, Texas 78296 Attention: Loan No. 378U7O7-80O3 Loan Documentation Department, RB'2 JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT (mmd UCC Financing Statement for Fixture Filing) STATE OFTEXAS § § KNOW ALL MEN BYTHESE PRESENTS: COUNTY(}FTARRANT § THIS JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT (hereinafter referred to as "Deed of Trust"), in executed to be effective as of the 7th day of July, 2005. by AP|/\(J LIMITED PARTNERSHIP,a Texas limited partnership (hereinafter referred to as"Grantor"),whose address for notice hereunder is 405 VV, Loop 820 Snuth, Ste. 100. Fort Worth, Texas 78108. in favor of JIMMY R. LC}CKE, Trustee, and his successors in the trust hereby created (such Trustee and any sucoenuono'in-trust being hereinafter referred to as "Trustee")for the benefit of the hereinafter defined "Beneficiary": ARTICLE I DEFINITIONS As used hgnain, the following terms shall have the following meanings: (a) Beneficia : THE FROST NATIONAL BANK, whose mddmma for notice hereunder is P. C). Box 1600. San Antooio, Texas, 78296, and the subsequent holder orholders,from time tntime,of the Note(as hereinafter defined). (b) Escrowed Sums: The amounts paid bvGrantor toBeneficiary pursuant to Paragraph 11.15hereof tobe held byBeneficiary in ofund for the payment of Impositions (as hereinafter defined) and insurance premiums. (c) Event of Default: Any happening or occurrence described in Article VI herein. (d) : All materia|a, oupp|ieu, equipment apparatus and other items now orhereafter attached to, installed on or in the Land (as hereinafter defined)orthe Improvements(as hereinafter defined)under the laws of the Stake of Texas, including the Texas Business and Commerce Code. The term "Fixtures"shall include,without limitation, all items of personalty to the extent that the same maybe deemed Fixtures under applicable law. (e) Any and all courtu, bmarda, ogmnciea, nnmmiaaiVna. offices or authorities of any nature whatsoever for any JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-pweev governmental unit (fgdend, state, county, district, municipal, cit/ or otherwise) whether now orhereafter inexistence. (f) ; The above-defined Grantor and any and all subsequent record or equitable owners of any right, title or interest to the Ground Lease (mm hereinafter defined). (g) Ground Lease: That certain Fort Worth K8oaohem International Airport Unimproved Ground Lease Agreement With Mandatory Improvements (Lease Site 44'N) dated October 13'2OOO. byand between the City ofFnd Worth,aoLandlord,and Grantor,aoTenant, pertaining tothe Land,eGwell as all amendments thereto' a copy of which is attached hereto and incorporated herein as Exhibit A. (h) Brian Perryman,anindividual,pursuant to that certain Limited Guaranty Agreement, of even date herewith. (i) That, or those instruments of Guaranty from Guarantor to Beneficiary guaranteeing the repayment (f the Indebtedness (as hereinafter defined) and the performance and satisfaction of,and/or continued compliance with, the Obligations (as hereinafter defined). �) ; All nee| estate and personal property taxes, waher. gas, sewer, electricity and other utility rates and charges;ground rents;charges imposed pursuant to any subdivioion, planned unit development or condominium declaration or restrictions;charges for any easement,license Vragreement maintained for the benefit ofthe Mortgaged Property and all other taxes, charges and assessments and any interest, costs orpenalties with respect thereto of any kind and nature whatsoever which at anytime prior tVorafter the execution hereof may beassessed, levied orimposed upon the Mortgaged Property or the ownership, use, occupancy or enjoyment thereof. (k) : Any and all buildings, structures, open parking areas and other improvements, and any and all accessions, additions, replacements, substitutions or alterations thereof orappurtenances thereto, now orad anytime hereafter situated,placed orconstructed upon the Land orany part thereof. (|) The principal of, interest onand all other amounts and payments due under or secured by the Note and the other Security Documents (as hereinafter defined) and all renevva|n, extensions and modifications thereof, together with all funds hereafter advanced by BoneUoiarytoorforthe benehtofMaker ancontemplated byany covenant or provision herein contained or for any other purpooe, and all other indebtedness, ofwhatever kind orcharacter, direct orindirect, absolute or cont|ngent, owing or which may hereafter become owing by Maker to Beneficiary whether such indebtedness is evidenced by note,open account, m/erdraf\, endorsement, surety agreement, guaranty or ckhenmiae' it being contemplated that Maker may hereafter become indebted toBeneficiary in further sum or sums. (m) The real estate orany interest described in the Ground Lease attached hereto aoExhibit iA. and bythis reference made opart hereof for all purposes, together with all Improvements and Fixtures and all rights. titles and interests appurtenant thereto, JUNIOR LEASEHOLD DEED OF TRUST AND SECURnY AGREEMENT'Page o 1261'51001/245631 (n) subleases, |kmnoes' concessions or other agreements (written or verbal, now cxhereafter )n offaod which grant a possessory interest inand to,n[the right toextract, mine, reside in, sell or use the Mortgaged Proparty, and all other agreements, including, but not limited to, utility contracts, maintenance agreements and service contracts, which in any way relate to the use, oocupancy, opare1ion, maintenance, enjoyment orownership ofthe Mortgaged Property, SAVE AND EXCEPT any and all |oaoao, subleases nrother agreements pursuant to which Grantor iagranted apossessory interest )nthe Land. (o) U>Any and all present and future judicial decisions, statutes, rulings, rules, regulations,permits,certificates or ordinances of any Governmental Authority in any way applicable to Grontor. Maker or any Guarantor(with respect tothe Indebtedness onthe Mortgaged Property)or the Mortgaged Property, including, but not limited to, those respecting the ownership, use,occupancy,possession,operation,maintenance,alteration, repair or reconstruction thereof,(ii)Grantor's or any Guarantor's presentlyor subsequently effective Bylaws and Articles o/ |noorporotion, or any instruments establishing any partnership, limited partnership,jointvan\ure. trust or other form of business association (if either, both or all by any of aomm). (iii) any and all Leases orother contracts (written or oral) of any nature\owhich Grantor urany Guarantor maybe bound,and(iv)any and all reotrinh0na, rooenxuiono, oonditiona, easements o( other covenants or agreements ofrecord affecting the Mortgaged Property. (p) Loan Agreement: N6A (q) Maker(whether one ormome): AP|NQLIMITED PARTNERSHIP,aTexas limited partnership, and Gary VV. Havener, anindividual. (h Mortgaged Prope r The Lund. Improvements (to the extent owned by Grantor), Fixtures, Personalty(as hereinafter defined), Leoaao and Rents (as hereinafter defined), TOGETHER WITH: U) all righto, privi|egan, tenementm, heroditamenta, rights-of- way, easements, appendages and appurtenances in anywise appertaining thereto,and all right,title and interest ofGrantor inand iOany street,ways,alleys,strips orgores of land adjoining the Land or any pad thereof, which Grantor now owns 0ratanytime hereafter acquires; (|i) all betterments, 000eeaiona, additions, appurtanencea, subnhutionu, replacements and revisions thereof and thereto and all reversions and remainders therein; (iii) all ofGrantor's right, title and interest inand toany award, ramuneration, settlement or compensation heretofore made or hereafter to be made by any Governmental Authority toGrantor, including those for any vacation of,or change ofgrade in, any streets affecting the Land orthe Improvements; (iv) all plans and specifications for the Improvements; all contracts and subcontracts relating tothe Improvements, all deposits (including tenant's security deposits), fundn, accounts,contract rights,instruments,documents,general JUNIOR LEASEHOLD DEED OF TRUST AND SECURrTY AGREEMENT-paoon intangibles (including trademarks, service marks, trade names and symbols used in connection 0herewbh), and notes or chattel paper arising from or by virtue of any transactions related to the property described herein; all permits, licenses,franchises, certificates, and other rights and privileges obtained in connection with the property described herein; all proceeds arising from orbyvirtue of the sale, lease nrother disposition o/ all orany part ofthe Mortgaged Property(consent Vosame not granted mrtobe implied hereby); all proceeds (including premium refunds) payable or to be payable under each policy of insurance relating\othe Mortgaged Property; (v) all other interest nfevery kind and character which Grantor now has or at anytime hereafter acquires in and to the above-described real and personal property and all property which is Used or useful in connection therewith, including rights of ingress and egress, easements, licenses, and all reversionary rights or interest of Grantor with respect to such property. To the extent permitted by law, all of the foregoing Personalty and Fixtures are to be deemed and held to be m part of and affixed 1othe rmo| property. In the event the estate of the Grantor in and to any of the Land and Improvements is a leasehold estate, this conveyance shall include,and the lien,security interest and assignment created heneby, aho|| encumber and extend to all other, further or additional hUeo, estates, interest or rights which may exist now or at anytime be acquired byGrantor inurtVthe property demised under the lease creating such leasehold eo1oke and including Grantor's righto, if any, to purchase the property demised under such lease and, if fee simple title tnany of such property shall ever become vested in Grantor, such fee simple interest shall beencumbered bythis Deed cdTrust in the same manner as if Grantor had fee simple title to such property aaofthe date ofexecution hereof; and (vi) any and all other security and collateral of any nature wha1uomver, now or hereafter given for the repayment of the Indebtedness orthe performance and discharge ofthe Obligations. Amused inthis Deed mfTrust,the term "Mortgaged Property" iwexpressly defined asmeaning all,or where the context permits mrrequires,any portion ofthe above and all,wrwhere the context permits or requires, any interest therein. (s) Note; That certain promissory note nf even date herevvith, executed by Maker and payable to the Benefioiary, in the original principal amount of TWO MILLION FOUR HUNDRED THOUSAND AND NCV100 DOLLARS ($2.400.000.00) bearing interest and being payable as therein provided, together with all renewals, extensions and modifications thereof, M covenants,warranties,representations and other obligations (other than to repay the Indebtedness) made or undertaken byMaker, Grantor, Guarantor orothers toBeneficiary,Trustee orothers aaset forth inthe Security Documents, orany lease, sublease or JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-Page 4 1261.51001X845631 other agreement pursuant to which Grantor isgranted apossessory interest inthe Land. (u) easements, building lines, restrictions,security interests and other matters(if any)amset forth on Exhibit "B"attached hereto and bythis reference made npart hereof for all purposes, (v) Personal : All cdthe right,title and interest odGrantor inand\o all tangible and intangible personal property, including all equipment, inventory,goods, consumer goods, ncoounto, chattel paper' instruments, money. general intangibles, dooumenta, minerals, crops and timber (as those terms are defined inthe Texas Business and Commerce Code)which ioattached to, installed onorplaced orused on, inconnection with orioacquired for such attachment, in,teUation, placement or use, or which arises out of the development, improvement, financing, |eaning, operation oruse of, the Land' the Improvements, Fixtures nrother goods located on the Land or Improvements, together with all additiVna, accessions, ucomsmories, amendments and modifications thereto,extensions,renewals,enlargements and proceeds thenood, substitutions therefor. and income and profits \herghom. The following are included,without|imito8ion, in the definition of Personalty: furnishinga, building meberim|a, supplies, maohinee, engines, boilers, stokers,pumps,fans,vents,blowers,dynamos,furnaces,elevators, du(ta, shafts, pipes,furniture,oabinets,shades, b|indu, ocreeno, plumbing, heating, air conditioning, lighting, |ifting, ventilating, refrigerating, cooking, medical, laundry d incinerating equipment, partidono' dnapea' carpeka' rugs and other f loor coverings,awnings,call and sprinkler systems,disposal units,dishwashers, ranges, ovens, kitchen equipment,cafeteria equipment, recreational equipment, loan commitments,financing arrangements,bonds, construction contracts, leases, licenses, permits,sales contracts,insurance policies and the proceeds therefrom, plans and specifications,surveys,rent roUn, books and records, funds, bank deposits and all other intangible personal property used inconnection with the Land and Improvements. (w) Rents: All ofthe rents, revenues, income, proceeds, royalties, profits and other benefits paid orpayable for using, leasing, |icenoing, possessing, operating from or in, residing in, selling, mininQ, extracting or otherwise enjoying or using the Mortgaged Property. (x) Security Documents: The Note,this Deed cfTrust,the Guaranty and any and all other documents now orhereafter executed by Grantor, Maker, Guarantor orany person nrparty toevidence Vrsecure the payment ofthe Indebtedness orthe performance and discharge cdthe Obligations. ARTICLE 11 GRANT To secure the full and timely payment of the Indebtedness secured hereby and the full and timely performance and discharge of the Db|igakinna. Grantor has GRANTED, BARGAJNED, SOLD AND CONVEYED, and by these presents does GRANT, BARGAWN, SELL AND CONVEY unto Trustee the Mortgaged Prnperty, uubieot, however, to the Permitted Enoumbrances, TO HAVE AND TO HOLD the Mortgaged Property unto Trustee,his successors-in-trust and the Trustee's assigns forever,and Grantor does hereby bind hae|f, its successors and assigns 1oWARRANT AND FOREVER DEFEND the title tothe Mortgaged Property unto Trustee against every person whomsoever lawfully claiming ortoclaim the same or any part thereof; provided, however,that if Maker or Grantor shall pay(or cause to be paid)the Indebtedness as and when the same aho|| become due and payable and mho|| perform and discharge (or -pages 1281,51001/245631 performed and discharged)the Obligations onnrbefore the date same are k»he performed and diuuhuro�d. then the |ionu, security interests, oo1aUoo and rights granted by the Security Documents terminate , otherwise same shall remain infull force and effect. Grantor acknowledges that/eAGrantor iureceiving dirgot or indirect benefit from the loan to Maker evidenced by the Security Documents,and(b)Grantor is executing this Deed of Trust in order to induce Beneficiary to accept the Mortgaged Property as security for the Indebtedness and uepart ofthe Security Documents. ARTICLE III WARRANTIES AND REPRESENTATIONS Grantor hereby unconditionally warrants and represents to Beneficiary, as follows: 3.1. Validity of Documents, The execution, delivery and performance byGrantor of the Security Documents (other than the Guaranty), and the borrowing evidenced by the Note (a) are within Grantor's corporate powers and have been duly authorized by Grantor's partners and all other requisite corporate action, /b\ have received all (if any) nmquiaha prior governmental approval in order to be legally binding and enforceable in accordance with the terms thereof,and(c)will not violate, be in conflict with, result in a breach of,or constitute(with due notice or lapse of time,or both)a default under any Legal Requirement or result in the creation or imposition of any lien,charge or encumbrance of any nature whatsoever upon any of Grantor's or Guarantor's property orassets, except as contemplated by the provisions of the Security Documents. The Security Documents constitute the legal,valid and binding obligations of Grantor,Guarantor, Maker and others obligated under the terms Vfthe Security Documents, inaccordance with their respective terms and Grantor has f ull and lawful authority to bargain, grant,sell, mortgage, assign, transfer and convey all ofthe Mortgaged Property aoset forth herein. 3.2. Information. All infnnnedinn, raporto, papers and data given to Beneficiary with respect toGrantor, Maker, Guarantor orothers obligated under the terms cf the Security Documents orthe Mortgaged Property are accurate, complete and correct in all material respects and do not omit any fact,the inclusion of which is necessary to prevent the facts contained therein from being materially misleading. 3.3. . Grantor has good and indefeasible title tothe Land (in fee simple, if the lien created hereunder boVnthe fee, orefirst and prior leasehold estate, if it be created on the leasehold estate)and the Improvements and good and indefeasible title to the Fixtures and Personalty, Leases and Rents, free and clear of any liens, charges, encumbrances, security interests and adverse claims whatsoever, except the Permitted Encumbrances, This Deed ofTrust constitutes a valid, subsisting deed of trust on Grantor's leasehold estate in the Land,the Improvements and the Fixtures and a valid,subsisting lien in and to the Personalty, Leases and Rents,all in accordance with the terms hereof, subject tothe Permitted Encumbrances. 3.4. Taxes and Other Payments. Grantor, Maker and Guarantor have filed all federal, state, county, municipal and city income and other tax returns required to have been filed by them and have paid all taxes which have become due pursuant 1nsuch returns orpursuant toany assessments received by them,and neither Grantor, Maker nor Guarantor know of any basis for anyadditional assessment in respect of any such taxes. Grantor has paid or will pay infull (except for such nmtainagae as may be permitted or required by any Legal Requirements to be withheld by Grantor pending completion of the Improvements)all sums owing or claimed for labor, material, supplies, personal property(whether or not constituting a Fixture hereunder) and services of every kind and character used, furnished or installed in the Mortgaged Property and no claim for same currently exists or will be permitted to become past due. Notwithstanding the foregoing' however, Grantor shall have the right tocontest in good faith by appropriate proceedings the payment ofany claims arising out of construction of the Improvements or any tax or assessment; provided, that as a condition thereto, Grantor shall furnish to Beneficiary a surety bond or other security satisfactory to Beneficiary in its sole discretion fully protecting Beneficiary from the adverse consequences of any such contest. 3.5. Liti-gation. There are noactions,suits orproceedings pending or,tothe knowledge of Grantor,threatened against or affecting the Mortgaged Property or involving the validity or enforceability of this JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-Page 6 1261'51001/245631 Deed ofTrust the priority of the lien and security interest hereof, and there are no actions, suits or proceedings pending or, tothe knowledge of the Grantor, threatened against or affecting Grantor, Makeror any Guarantor which could have a material adverse affect on the ability of each or any of such parties to perform their respective obligations under the Security Documents; and further, no event has occurred (including specifically Grantor's and Guarantor's execution of the Security Documents and the consummation of the loan represented thereto)which will violate, be in conflict with, result in the breach of,or constitute(with due notice or lapse of time, or both) a default under, any Legal Requirement or result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any of Grantor's, Maker's, or any of Grantor's property other than the lien and security interest created by the Security Documents. ARTICLE IV AFFIRMATIVE COVENANTS Grantor hereby unconditionally covenants and agrees with Beneficiary, as follows: 4.1. Payment and Performance. Grantor will pay orcause Maker topay the Indebtedness secured hereby, amand when called for inthe Security Documents, and will perform all ofthe Obligations, }n full and onnrbefore the dates they are 1obe performed. 4.2. Existence, Grantor will preserve and keep in full force and effect its existence,rights, franchises and trade names. 4.3. Compliance with Legal Requirements. Grantor will promptly and faithfully comply with,conform to and obey all present and future Legal Requirements,whether or not same shall necessitate structural changes in, improvements to, orinterfere with, the use orenjoyment of' theN1odgagedPpopehy. 4.4. Payment of Impositions. Subject 10the provisions ofParagraph 11.16herein,Grantor will duly pay and discharge, or cause to be paid and discharged, the Impositions not later than the due date thereof,orthe day any fine,penalty, interest orcost may be added thereto orimposed,orthe day any lien may befiled, for the nonpayment thereof (if such day ioused todetermine the due date cfthe respective item); provided, however, that Grantor may, if permitted by law and if installment payments VYnu|d not create or permit the filing nf alien against the Mortgaged Property, pay the Impositions in installments whether or not interest shall accrue onthe unpaid balance cfsuch Impositions. Grantor may, ingood faith, inlieu cdpaying such Impositions aathey become due and payable, byappropriate proceedings, contest the validity thereof. During such contest, Grantor shall not bedeemed indefault hereunder because cfsuch nonpayment if, prior to delinquency of the asserted tax or assessment, Grantor furnishes the Beneficiary an indemnity hond, conditioned that such tax orassessment with interest,cost and penalties bepaid aoherein stipulated,secured by a deposit in cash or security acceptable tV Beneficiary orwith surety acceptable to Beneficiary, in the amount of the tax or assessment being contested byGrantor and a reasonable additional sum topay all possible costs, interest and penalties imposed or incurred in connection therewith. Upon conclusion ofsuch contest, Grantor shall promptly pay any amount adjudged by a court of competent jurisdiction to be due,with all ooa1a' penalties and interest thereon prior to the date such judgment becomes final or any writ or order issued under which the Mortgaged Property may besold pursuant tosuch judgment. 4.5. Repair. Grantor will keep the Mortgaged Property infirst-class order and condition and presenting o first-class appearance and will make all repairs, replacements, renewals, addi1ione, betterments' improvements and alterations thereof and thereto, interior and exterinr, structural and nonstructural, ordinary and extraordinary, foreseen and unforeseen, which are necessary or reasonably appropriate to keep same in such order and condition and to satisfy the obligations of Grantor under the Ground Lease. Grantor will also use its best efforts toprevent any act oroccurrence which might impair the value o/ usefulness of the Mortgaged Property for its intended usage as met forth in any plans and specifications for the Improvements submitted to Beneficiary or in the Security Documents. In instances where repaim, nap|aoementa, renewals, additions, betterments, improvements oralterations are required in and to the Mortgaged Property on an emergency basis to prevent loss,damage,waste or destruction thereof, Grantor shall proceed to construct same, or cause same to be constructed, notwithstanding anything to the contrary contained in Paragraph 5.2 hereinbelow;provided,however,that in instances where such emergency JUNIOR LEASEHOLD DEED OF TRUST AND SECUR[TY AGREEMENT 'Page v 1261,51001/245631 measures are tobetaken, Grantor will promptly notify Beneficiary in writing of the commencement of same and the measures to be taken,and when same are completed,the completion date and the measures actually taken. 4.6. Insurance. Grantor shall obtain and maintain insurance upon and relating to the Mortgaged Property insuring against {000 by fire and such other hazards, oeoua|Uea and contingencies (including, but not limited to, fire, |ighting, hail, windstorm, explosion, malicious mischief, vandalism and business interruption insurance covering loss of Rents)as are covered by extended coveragepolicies in effect where the Land iulocated and such other risks aamay be specified byBeneficiaryfrom time hotime(including builder's risk insurance),with such insurers of recognized responsibility as are acceptable toBeneficiary,and in an amount equal to the greater of (a)the full insurable replacement value of the Mortgaged Property, and (b) the amount of the Indebtedness. Additionally, Grantor shall obtain and maintain general commercial liability and property insurance with such insurers of recognized responsibility as are acceptable to Beneficiary and in amounts of not |eoa than $2,OOO.00O.00per occurrence for bodily injury, and $2.000.000.00 per occurrence for property damage. |fand tothe extent that the Mortgaged Property iolocated within anarea that has been or is hereafter designated or identified as an area having special flood hazards by the Secretary of Housing and Urban Development or by such other off iciai as shall from time to time bmauthorized byfederal orstate law tomake such designation pursuant tothe National Flood Insurance Act of1968 (^Act"), as,such Act may from time to time be amended and in effect, or pursuant to any other national or state program of flood insurance, Grantor shall carry flood insurance with respect to the Mortgaged Property in amounts not less than the maximum limit of coverage then available with respect to the Mortgaged Property pursuant 10 any and all national and state flood insurance program with respect to the Mortgaged Property orthe amount of the Indebtedness, whichever is less. Each insurance policy issued in connection with the Mortgaged Property shall provide, byway of endorsements, riders or otherwise, that proceeds will be payable to Beneficiary as its interest may appear, and at BeneUcian/m request, Grantor shall provide copies nfsuch policies to Beneficiary. All such insurance shall be issued by carriers reasonably acceptable to the Beneficiary. All ranavva| and substitute policies of insurance shall be delivered at the office of Banef{oiary, premiums paid' at least ton (10) days before the termination of policies theretofore delivered to Beneficiary. Beneficiary shall have the right, but not the obligation,tomake premium payments, atGrantor's expense,tn prevent any cancellation, endorsement, alteration orreisouance. 4.7. Restoration Followinq Casual . It any act or occurrence of any kind or nature (including any casualty for which insurance was not obtained or obtainable)shall result in damage to or loss or destruction of the Mortgaged Property,Grantor will give notice thereof toBeneficiary and Grantor will promptly, at Grantor's sole cost and expense and regardless cfwhether the insurance proceeds (if any) shall be sufficient for the purpose, onmnnenmy and continue diligently to completion to restore, rapair, replace and rebuild the Mortgaged Propertyas nearlyas possibleto its value,condition and character immediately prior to such damage, |oon or destruction. To the extent insurance proceeds are received on account of any such casualty loss, such proceeds shall bepaid toBeneficiaryand Beneficiary shall have the option,inBenefioiaq/o sole discretion,to apply any proceeds so collected either to the restoration of the Mortgaged Property or to the payment of the Indebtedness. /n the event Beneficiary chooses to restore the Mortgaged Property and reasonably determines tha1theinsurance proceeds are insufficient topaytheanticipated costs and expenses of restoring, rebuilding and repairing the Mortgaged Property, Grantor shall within twenty (20) days after demand by Beneficiary, deposit with Beneficiary such additional sums as Beneficiary determines to be necessary tnpay such costs and expenses. Grantor's failure tVtimely deposit such additional sums shall be onEvent ofDefault hereunder. All work tnbeperformed inconnection therewith shall bepursuant tVowritten contract therefor, which contract and general contractor shall bmsubject tothe prior approval VfBeneficiary. All disbursements byBeneficiary shall besubject toreceipt byBeneficiary of(i)certificates ofanindependent engineer Vrarchitect reasonably acceptable toBeneficiary certifying that all work and materials described in Grantor's request for disbursement were satisfactorily performed and furnished,and(ii)evidence satisfactory to Beneficiary that the cost of such work and materials has been paid in full or will be paid in full out of such advance,and(iii)evidence of compliance of all mechanic's and materialmen's lien laws of the State of Texas. Any balance of insurance proceeds after completion of the restoration, rebuilding and repairs shall be paid to Beneficiary to be applied to the Indebtedness and the Obligations hereby secured. Grantor agrees that Beneficiary shall beentitled topadioipate inany adjustment orsettlement ofany casualty insurance claim. JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-pagmo 1261'51001/245631 4.8. leases and Rents. Grantor shall(a)submit any Lease to ' for its approval prior to the execution thereof; (b) duly and punctually perform � 0nn �nd comply with any and all representations, warranties, covenants and agreements expressed as binding upon it under each of the Leases; (c) not voluntarily terminate, cancel,waive, modify oramend its rights orthe obligations ofany party under an- the Leases except on account of defaults by tenants; (d) use all reasonable efforts to maintain each of the Leases in full force and effect during the full term thereof; and (e) appear and/or defend any action or proceeding arising under or in any manner connected with any ofthe Leases or the representations, warranties, covenants and agreements ofitnrofany other party orparties thereto. All Leases entered into byGrantor shall bewith bona fide third party tenants and on an arm's-length basis unless otherwise approved in writing by Beneficiary, Subsequent to an Event of Default, Beneficiary (i) shall have the right \ocollect all Rents' incomes and other sums due and owing from the Mortgaged Property directly from any lessee, tenant or any other obligor obligated tOpay same, (iUa\anytime may contact each and every such lessee,tenant orobligor and any other party obligated on the Leaaea, informing them to make payment of all sums due and owing Grantor or any other party directly to Beneficiary tothe credit of Grantor, and (iii) may demand, sue for, compromise and collect any Rents,either under its own name or in the name of Grantor,with or without the consent ofGrantor. 4.9. Inspection. Grantor will ponnh Trustee and Beneficiary, and their agents, representatives and employees, Voinspect the Mortgaged Property ct all reasonable times. 4.10. . |fthe title ofthe Trustee to, or the interest of Beneficiary in, the Mortgaged Property hereby conveyed,orany part thereof,shall be endangered orshall beattacked,directly or indirectly,Grantor hereby authorizes Beneficiary,at Grantor's expense,to take all necessary and proper steps for the defense of such title or interest, including the employment of counsel, the prosecution or defense of litigation and the compromise or discharge of claims made against such title or interest in the Mortgaged Property. Grantor will indemnify and hold Beneficiary harmless from and against any and all |000, cost, damage, liability or expense incurred by Beneficiary in protecting its interests hereunder in such on event (including all court costs and a8orneyo'feoa). 4.11. Future Impositions. Atanytime any law shall be enacted imposing orauthorizing the imposition ofany tax upon this Deed of Trust or upon any rights,titles,liens or security interest created hereby orupon the No\o, orany part thereof. Grantor shall immediately pay all such taxes; provided, that, in the alternative, Grantor may, inthe event of the enactment odsuch alaw,and must, ifitiaunlawful for Grantor to pay such taxes, prepay the Note in full within ninety(90) days after demand therefor by Beneficiary. 4.12. Books and Records. Grantor will maintain full and accurate books ofaccount and other records reflecting the results of its operations and will furnish or cause to be furnished to Beneficiary,on or before sixty (80) days after the end of Grantor's fiscal year: (a) Grantor's. Maker's and Guarantor's respective financial statements in form acceptable to Beneficiary, including a balance sheet and statement of profit and |oaa (if applicable) for the immediately preceding fiscal year of Granbzr, Maker and Guarantor accompanied by a certification by Grantor, Maker and Guarantor that such financial statements are complete and clearly and accurately represent the true financial condition of such party or entity; and (b) an operating otckement, in such detail as Beneficiary may reasonably require, which anounat*|y, fairly and separately presents Grantor's, Maker's and Guarantor's operations of the Mortgaged Property for the fiscal year then ended. At anytime, and from time to time, Grantor shall deliver to Beneficiary such other financial data as Beneficiary shall reasonably request with respect tothe ownership, maintenance, use and operation nfthe Mortgaged Property,and Beneficiary shall have the right,a1reasonable times and upon reasonable notice,to audit Grantor's, Maker's and/or Guarantor's books of account and records relating to the Mortgaged Property, all of which shall be maintained and made available to Beneficiary and Beneficiary's representatives for such purpose in Grantor's offices or at such other location as Beneficiary may approve. Grantor shall, upon request, promptly furnish ct anytime and from time totime, awritten statement oraffidavit, insuch form ao may be required by Beneficiary, stating the amount of the unpaid balance of the Note and that there are no offsets ordefenses against full payment nf1h Note and performanceqfth terms hereof,orifthere are any such offsets and defenses,specifying them indetail. Upon request byGrantor, Beneficiary shall from time to time, furnish a written statement stating the unpaid principal balance of the Note and stating whether Beneficiary has delivered any notice nfan Event of Default to Grantor. JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-Pagmo 1261'51001/245631 ARTICLE V NEGATIVE COVENANTS Grantor hereby covenants and agrees with Beneficiary that, until the entire Indebtedness secured hereby shall have been paid in full,and all of the Obligations shall have been fully performed and discharged: 5.1. Use Violations. Grantor will not use, meintain, operate oroccupy, orallow the use, maintenance, operation or occupancy of the Mortgaged Property in a manner which (a) violates any Legal Requirement, (b)may be dangerous unless safeguarded as required by law, (c)constitutes a public or private nuisance,or(d)makes void,voidable orcancelable,orincreases the premium of,any insurance then inforce with respect thereto. 5.2. Alterations. Grantor will not commit orpermit any waste onthe Mortgaged Property and will not (subject to the provisions of Paragraph 4.5 and Paragraph 4.7 herein), without the prior written consent of Beneficiary which shall not be unreasonably withheld, make or permit to be made any alterations or additions tothe Mortgaged Property ofamaterial nature. 5.3. Replacement of Fixtures and Personalt . Grantor will not, without the prior written consent ofBeneficiary, permit any of the Fixtures or Personalty to be removed at anytime from the Land or Improvements unless the removed item is removed temporarily for maintenance or repair or, if removed permanently, is replaced by an article of equal suitability and value, owned by Grantor, free and clear of any lien or security interest, except such as may be first approved in writing by Beneficiary. 5.4. No Further Encumbrances. Grantor will not, without the prior written consent of Beneficiary, oreode, place, suffer or permit to be created or p|aced. or through any act or failure to act. acquiesce in the placing of, or allow to remain, any mortgage, pledge, lien (otadutory, constitutional or contractual), security in1ereat, encumbrance or charge on, or conditional sale or other title retention agreement, regardless of whether same are expressly subordinate to the liens of the Security Documents,with respect tothe Mortgaged Property, other than the Permitted Encumbrances. ARTICLE VI EVENTS OF DEFAULT The term "Event of Default"as used herein shall mean the occurrence or happening, at anytime and from time totime, of anyone (1) ormore ofthe following: 6.1. PaVment of Indebtedness. |fGrantor and/or Maker shall fail,refuse orneglect to pay, in full,all of the Indebtedness on the maturity date thereof or any installment or portion of the Indebtedness as and when the same shall become due and payable,whether at the due date thereof stipulated in the Security Documents or at a date fixed for prepayment or by acceleration or otherwise. 6.2. Performance of Obligations. It Grantor shall fail, nafuoo orneglect tnperform and discharge fully and timely any ofthe Obligations aaand when required. 6.3. False Representation. |fany representation orwarranty made byGrantor,Guarantor, Maker orothers in, under or pursuant to the Security Documents orany other documents executed in connection therewith shall be false orerroneous, orshall omit any fact the inclusion ofwhich iunecessary to prevent the facts therein from being materially misleading. 6.4. Judgmen . |fany final mnney'udgmen shall berendered against Grantor,Maker or any Guarantor while such party ieowner of the Mortgaged Property orhas personal liability obligations under the Security Documents and the same shall not be paid orexecution onthe same shall not bestayed by perfection ofanappeal nrother appropriate action. JUNIOR LEASEHOLD DEED OF TRUST AND SECURrrY AGREEMENT-Page 10 1261'51001/245631 6.5. of the Mortgaged Property or has any personal liability obligations under the Security Documents shall(a)seek entry of an order for relief as a debtor in a proceeding under the Bankruptcy Code, (b)seek,consent to or not contest the appointment of a receiver or trustee for itself or himself or for all or any part of its or his property, (c)file a petition seeking relief under the bankruptcy,arrangement, reorganization or other debtor relief laws of the United States or any state or any other competent jurisdiction, (d) make a general assignment for the benefit of its or his creditors, or (e) admit in writing its or his inability to pay its or his debts as they mature. G.G. InvoluntarV Bankruptcy. If, while Grantor, Maker orany Guarantor isowner ofthe Mortgaged Property or has any personal liability obligations under the Security Documents, (o) opetition ia filed against G[an\or. Maker or any Guarantor seeking relief under the bankruptcy, arrangement, reorganization or other debtor relief laws of the United States or any state or other competent jurisdiction, or (b) a court of competent jurisdiction enters an order,judgment or decree appointing, without the consent of Grantor, Maker or any Guarantor,a receiver or trustee for it or him, or for all or any part of its or his property. 67. Foreclosure of Other Liens. If the holder of any lien orsecurity interest on the Mortgaged Property(without implying Bene/ioian/aoonsent tosuch sale orthe existence,placing,creating or permitting of any lien or security interest)institutes foreclosure or other proceedings forthe enforcement of its remedies thereunder and any such proceedings aho|| not be stayed ordischarged within ten (10) days thereafter. 6.8. Sale, Lease or Other Transfer. Any sale, lease,exchange,assignment,conveyance, transfer of possession or other disposition of the Mortgaged Property or any interest therein or any part thereof byGrantor without the prior written consent ofBeneficiary. Nothing inthis Paragraph G.8shall inany way affect or modify the terms of Paragraph 5.4 hereof. Furthermore, notwithstanding anything in the foregoing. Grantor shall have the right to sell orotherwise dispose of worn or obsolete items of furniture,furnishings or fixtures if such items are simultaneously replaced by new like items of at least comparable value, provided that, if the value of such items exceeds$10,000.00, Grantor gives Beneficiary at least twenty(20) days prior written notice of any such sale or other disposition and the items of personal property that will be affected. 6.8. Title and Lien Priori . |ftitle ofthe Grantor tnany orall cfthe Mortgaged Property or the status cdthis Deed ofTrust as a valid lien and security interest on the Mortgaged Property,subject only to the Permitted Encumbrances,shall be challenged or endangered by any party whatsoever,and Grantor shall fail tocure the same upon demand byBeneficiary. 6.10. Other Defaults. The occurrence ofany Event ofDefault, aodefined ordescribed in any of the other Security Documents. 6.11. Levy on Assets. While Maker, Grantor orany Guarantor iaowner of the Mortgaged Properly or has any personal liability obligations under the Security Documents,a levy on any of the assets of the Maker, Grantor nrany Guarantor. G.12. . VVhi|a �Waker. {�rantororany Guarantor inowner ofthe Mortgaged Property or Death any personal liability obligations under the Security Documents, any Maker, Grantor or Guarantor dies or is declared legally incompetent. 6.13. Transfer of Interests. The transfer of a limited partnership interest or interests in Grantor without the prior written consent ofBeneficiary. 6.14. Default under Ground Lease. Default shall occur on the part ofthe Grantor, as Tenant under the Ground Lease. JUNIOR LEASEHOLD DEED OF TRUST AND SECUR[TY AGREEMENT-Page 11 ARTICLE VII DEFAULT AND FORECLOSURE U an Event of Default shall oncur. Beneficiary may, at Beneficio?/a election and by and through Trustee or otherwise, exercise any or all of the following rights, remedies and recourses, in addition to any other remedy which Beneficiary may have: 7.1. Acceleration and Future Advances. Beneficiary may declare the entire Indebtedness, including the Note, Principal Balance (defined hereby asmeaning the then unpaid principal balance onthe Note),the accrued interest and any other accrued, but unpaid interest thereon,court costs and attorneys'fees thereunder immediately due and payable,without notice,presentment,protest,demand or action of any nature whatsoever (each of which hereby is expressly waived by Grantor), whereupon the same ahe|| become immediately due and payable. Additionally, Beneficiary shall not be required to make any further advances on the Note or other Security Documents upon the occurrence of an Event of Default or any event which,with the giving of notice or passing of time, would constitute an Event of Default. 7.2. . Beneficiary may enter upon the Mortgaged Property and take exclusive possession thereof and of all books, records and accounts relating thereto without notice and without being guilty odtrespass. !fGrantor remains inpossession ofall orany part of the Mortgaged Property after an Event of Default and without Benefioian/o prior written consent thena1u. Beneficiary may. without notice to Grantor, invoke any and all legal remedies to dispossess Grantor, including specifically one (1)o,more actions for forcible entry and detainer,trespass ortry title and writ of restitution. Nothing contained inthe foregoing sentence shall, however, beconstrued toimpose any greater obligation urany prerequisites 10 acquiring possession of the Mortgaged Property after an Event of Default than would have existed in the absence ofsuch sentence. 7.3. Operation of Mortgaged Propert . Beneficiary may hold, |eaae, manage,operate or cthanm|Ge use or permit the use ufthe Mortgaged Property' either byitself or byother persons, firms or entities, |nsuch amanner,for such time and upon such other terms aaBeneficiary may deem tobe prudent and reasonable under the circumstances (making such repaira, u|terationa, additions and improvements thereto, and taking and all other action with reference thereto,from time to time,as Beneficiary shall deem necessary or desirable),and apply all Rents and other amounts collected by Trustee in connection therewith in accordance with the provisions ufParagraph 7.12herein. 7.4. . (e) Beneficiary may, byand through the Trustee, orotherwise, sell o, offer for sale the Mortgaged Property in such portions,order and parcels as Beneficiary may determine, with or without having first taken possession of same, to the highest bidder for cash at public auction. |ninstances where the Mortgaged Property is located in the State of Texas, such sale shall be made at the courthouse door of the county in which the Land (or any of that portion thereto to be sold) is situated (whether the parts or parcels thereof, if any, indifferent counties are contiguous ornot, and without the necessity ufhaving any personal property hereby mortgaged present at such sale)on the first Tuesday of any month between the hours of 10:00 o'clock a.m. and 4:00 o'clock p.m. after advertising the time, place and terms Vfsale and that portion ofthe Mortgaged Property\obgsold byposting orcausing to be posted written or printed notice thereof at least twenty-one(21)days preceding the date of said sale at the courthouse door of the county in which the sale is to be made and at the courthouse door of any other county in which a portion of the Mortgaged Property may be eituated, which notice may beposted bythe Trustee acting, orbyany person acting for him, and the holder of the Indebtedness has, at least twenty-one (21)days preceding the date of sale, served written or printed notice of the proposed sale by certified mail on each debtor obligated to pay the Indebtedness secured by this Deed of Trust according to the records of Beneficiary by the deposit of such no\ioe, enclosed in a post-paid wrapper' properly addressed to such debtor at debtor's most recent address as shown by the records of the holder of the Indebtedness, in a post off ice or official depository under the care and custody JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT_Pwoe 12 of the United States Postal Service. The affidavit of any person having knowledge cfthe facts to the effect that such service was completed shall beprima facie evidence cdthe fact of service; (b) 8enefioiarynnay'atits option,accomplish all oranyofthe aforesaid in such manner as permitted or required by Section 51.002 ofthe Texas Property Code relating to the sale of real estate or by Chapter 9 of the Texas Business and Commerce Code relating to the sale of collateral after default byadebtor (as said Article and Chapter now exist or may be hereinafter amended or succeeded), or by any other present or subsequent ad|o|ea or enactments relating 1osame. In instances where the Land is located in states other than Tonao, such sales shall be made in accordance with the Legal Requirements therefor for such state, including,to the extent there relevant,the Uniform Commercial Code ia in effect. Nothing contained in this subparagraph(b)shall beconstrued 10limit inanyway the Trustee's right to sell the Mortgaged Property by private sale if, and to the extent that such private sale is permitted under the laws ofthe state where the Mortgaged Property(or that portion thereof to be sold)is located or by public or private sale after entry of a judgment byany court nf competent jurisdiction ordering the same. /Nany such sale: (i) whether made under the power herein oontuinod, the aforesaid Section 51.0O2' any other Legal Requirement orbyvirtue cdany judicial proceedings or any other legal right, remedy or recourse,it shall not be necessary for the Trustee to have physically preoent, or to have constructive possession of,the Mortgaged Property(Grantor shall deliver to Trustee any portion of the Mortgaged Property not actually or constructively possessed bythe Trustee immediately upon demand bythe Trustee) and the title toand right of possession of any such property shall pass to the purchaser thereof as completely as if the same had been actually present and delivered topurchaser aksuch sale; (ii) each instrument of conveyance executed by the Trustee shall contain a general warranty of Ude' binding upon Grantor; (iii) each and every recital contained in any instrument of conveyance made bythe Trustee shall conclusively establish the truth and accuracy of the matters recited then*in, including, without limitation, non- payment of the Indebtedness,advertisement and conduct of such sale in the manner provided herein and otherwise by law and appointment of any successor trustee hereunder; (iv) any and all prerequisites to the validity thereof ahoU be conclusively presumed tohave been performed; (v) the receipt by Trustee or of such other party or officer making the sale shall be sufficient to discharge to the purchaser or purchasers for his or their purchase money, and no such purchaser or purohaoero, or his or their assigns or personal repreoenta\iveo, shall thereafter beobligated tosee tothe application ofsuch purchase money mr be in any way answerable for any |osm, misapplication or non-application thereof; (vi) to the fullest extent permitted by |mw. Grantor ahoU be completely and irrevocably divested cdall ofits right,title,interest,o|aim and demand whatsoever, either at law or in equity, in and to the property sold, and such sale shall be a perpetual bar, both at law and in equity, against Grantor and against all other persons claiming or10claim the property sold or10any part thereof by, through or under Grantor; and JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-puguvo 1261.51001/246631 � (vii) to the extent and under such circumstances as are permitted bylaw, Beneficiary may beapurchaser aUany such sale. 7.5. Divestment of Rights; Tenant at Sufferance. After sale of the Mortgaged Property, or any portion thereof,Grantor will be divested of any and all interest and claim thereto, including any interest or claim to all insurance policies,bonds, loan commitments and other intangible property covered hereby. Additionally, with respect to the Land, Improvements, Fixtures and Personalty, after a sale of all or any portion thereof, Grantor(and all parties-in-possession)will be considered a tenant at sufferance of the purchaser of the same, and said purchaser shall be entitled to immediate possession thereof and if Grantor shall fail to vacate the Mortgaged Property immediately,purchaser mayand shall have the right,without further notice toGrantor,to go into anyjustice court in any precinct or county in which the Mortgaged Property is located and file an action in forcible entry and detainer,which action shall lie against the Grantoror its assigns or legal representatives, as a tenant at sufferance. This remedy is cumulative of any and all remedies the purchaser may have hereunder or otherwise. 7.6. Trustee or Receiver. (a) Upon, ora1anytime after, commencement offoreclosure of the lien and security interest provided for herein orany legal proceedings hereunder, Beneficiary may make application to aoourt of competent jurisdiction, as a matter of strict right and without notice\oGrantor orregard to the adequacy nfthe Mortgaged Property for the repayment cf the Indebtedness,for appointment of a receiver of the Mortgaged Property and Grantor does hereby irrevocably consent\osuch appointment. Any such receiver shall have all the usual powers and duties ofreceivers insimilar cases,including the full power torent, maintain and otherwise operate the Mortgaged Property upon such terms as may be approved by the court and shall apply such Rents in accordance with the provisions of Paragraph 7.12 herein;and /b\ Beneficiary may exercise any and all other rights, remedies and recourses granted under the Security Documents now or hereafter existing in equity,at law,by virtue or statute orotherwise. 7.7. Separate Sales. The Trustee may sell all orany portion cdthe Mortgaged Property together or in lots or parcels and in such manner and order as the Trustee, in its sole discretion, may elect. The sale or sales by the Trustee of less than the whole of the Mortgaged Property shall not exhaust the power rdsale herein granted,and the Trustee is specifically empowered to make successive sale ovsales under such power until the whole of the Mortgaged Property shall be sold; and if the proceeds of such sale or sales of less than the whole of such Mortgaged Property shall be less than the aggregate of the Indebtedness and the expense of executing this trust,this Deed ofTrust and the lien,security interest and assignment hereof shall remain in full force and effect as to the unsold portion of the Mortgaged Property just as though no sale or sales had been made; provided, however,that Grantor shall never have any right tnrequire the sale orsales pfless than the whole ofthe Mortgaged Property, but Beneficiary shall have the right, etits sole election, torequest the Trustee tosell less than the whole of the Mortgaged Property. /\aamong the various counties inwhich items of the Mortgaged Property may be situated, sales in such counties may be conducted in any order that the Trustee may deem expedient;and any one(1)or more of such sales may be conducted in the same month,or insuccessive ordifferent months, aathe Trustee may deem expedient. If default iamade hereunder, the holder of the Indebtedness orany part thereof on which the payment is delinquent shall have the option to proceed as if under afu|| foreclosure, conducting the sale as herein provided without declaring the entire Indebtedness due, and ifsale iamade because nfdefault ofaninstallment, orapart ofoninstallment, such sale may be made subject to the unmatured part of the Note and the Indebtedness;and such sale,if so made, shall not in any manner affect the unmekured part of the Indebtedness, but an to such unmatured ped, this Deed of Trust shall remain in full force and effect as though no sale had been made under the provisions of this paragraph. Any number 0f sales may bemade hereunder without exhausting the right ofsale for any unma\uredpart ofthe Indebtedness secured hereby, 7.8. . Trustee and Beneficiary shall have all rights, remedies and recourses granted in the Security Documents and available at law orequity(including specifically those granted by the Uniform Commercial Code in effect and applicable totheMortgaged Property JUNIOR LEASEHOLD DEED OF TRUST AND SECURrrY AGREEMENT-Page 10 1267'51881/245831 or any portion thereof)and the same(a)shall be cumulative and concurrent, (b) may be pursued separately, successively or concurrently against Grantor, Maker, any Guarantor or others obligated under the Note, or against the Mortgaged Property, or against any one(1)or more of them at the sole discretion of Beneficiary, (c)may be exercised as often as occasion therefor shall arise, it being agreed by Grantor that the exercise or failure to exercise any of 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, non-exclusive. 7.9. Release of and Resort to Collateral. Any part of the Mortgaged Property may be released by the Beneficiary without affecting, subordinating or releasing the lien, security interest and assignment hereof against the remainder. The lien, security interest and other rights granted hereby shall not affect or be affected by any other security taken for the same indebtedness or any part thereof. The taking of additional security,or the rearrangement,extension or renewal of the Indebtedness,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, guarantor or surety, or improve the right of any permitted junior lienholder; and this Deed of Trust, as well as any instrument given to secure any rearrangement,renewal or extension of the Indebtedness secured hereby, or any part thereof,shall be and remain a first and prior lien,except as otherwise provided herein with respect to the 2003 Leasehold Deed of Trust (hereinafter defined), on all of the Mortgaged Property not expressly released until the Indebtedness is completely paid. 7.10. Waiver of Redemption, Notice and Marshalling of Assets. To the fullest extent permitted by law, Grantor hereby irrevocably and unconditionally waives and releases (a)all benefits that might accrue to Grantor, Maker and/or Guarantor by any present or future laws exempting the Mortgaged Property from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment; (b) all notices of any Event of Default (except as may be provided for under the terms hereof) or of Beneficiarys or Trustee's election to exercise or the actual exercise of any right, remedy or recourse provided for under the Security Documents; (c)any right to appraisal or marshalling of assets or a sale in inverse order of alienation; (d)the exemption of homestead;and(e)the administration of estates of decedents,or other matter whatever to defeat, reduce or affect the right of Beneficiary under the terms of this Deed of Trust, to sell the Mortgaged Property for the collection of the Indebtedness secured hereby(without any prior or different resort for collection)or the right of Beneficiary, under the terms of this Deed of Trust,to the payment of the Indebtedness out of the proceeds of sale of the Mortgaged Property in preference to every other person and claimant whatever(only reasonable expenses of such sale being first deducted). Grantor expressly waives and relinquishes any right or remedy which it may have or be able to assert by reason of the provisions of Chapter 34 of the Business and Commerce Code of the State of Texas pertaining to the rights and remedies of sureties. 7.11. Discontinuance of Proceedinqs. In case Beneficiary shall have proceeded to invoke any right, remedy or recourse permitted under the Security Documents and shall thereafter elect to discontinue or abandon the same for any reason, Beneficiary shall have the unqualified right so to do and, in such event, Grantor and Beneficiary shall be restored to their former positions with respect to the Indebtedness, the Obligations, the Security Documents, the Mortgaged Property and otherwise, and the rights, remedies, recourses and power of Beneficiary shall continue as if same had never been invoked. 7.12. Application of Proceeds; Deficiency Obligations; Limitation on Liabili#y. The proceeds of any sale of, and the rents and other income generated by the holding, leasing, operating or other use of, the Mortgaged Property shall be applied by Beneficiary(or the receiver, if one is appointed) to the extent that funds are so available therefrom in the following orders of priority: (a) first, to the payment of the cost and expenses of taking possession of the Mortgaged Property and of holding, using, leasing, maintaining, repairing, improving and selling the same, including, without limitation (i) reasonable Trustee's fees and receiver's fees, (ii) costs of advertisement, (iii) reasonable attorneys'and accountants'fees, (iv)court costs, and(v)payment of any and all Impositions and prior liens,security interests or other rights,titles or interest on the Mortgaged Property(without in any way implying Beneficiarys prior consent to the creation thereof); (b) second,to the payment of all amounts, other than the principal amount of the Indebtedness secured hereby and accrued but unpaid interest which may be due to the Beneficiary under the Security Documents,together with interest thereon as provided therein; (c)third,to the payment of all accrued but unpaid interest due on the Note; (d)fourth, to the payment of the principal amount outstanding on the Note in inverse order of maturity; (e)fifth,to the payment of any indebtedness or obligation secured by a subordinate deed of trust or security JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-Page 15 1261.51001/245631 interest on the Mortgaged Property and 00a�#I UoGrantor, Maker, Guarantor and any other party liable on the Indebtedness and the Obligations shall beliable for any deficiency remaining inthe Indebtedness and Obligations subsequent toany sale referenced inthis section. 7.13. P[epalme[ . If,following the occurrence of any Event of Default and an acceleration of the Indebtedness secured hereby, but prior\othe sale nfthe Mortgaged Property,Grantor orMaker shall tender \oBeneficiary payment of an amount sufficient tosatisfy the entire Indebtedness secured hereby, such payment shall bedeemed\obeovoluntary prepayment under the Note and,accordingly, Grantor and Maker shall also pay to Beneficiary the premium ()f any) then required under the Note in order to exercise the prepayment privilege contained therein. 7.14. Beneficiary shall have the right\nbecome the purchaser m\the sale ofthe Mortgaged Property hereunder pursuant toany other means and shall have the right tobecredited on the amount of its bid therefor all of the Indebtedness and Obligations due and owing as of the date of such sale. 7.15. Disaff irmation of Contracts. The purchaser e\ any Trustee's nrforeclosure sale hereunder may disaff irm any easement granted, or rental, lease or other contract made in violation of any provisions of this Deed cfTrust and may take immediate possession(f the Mortgaged Property free from. and despite the terms of, such grant of easement and nen\o|. lease orother contact. ART|CLEVUl CONDEMNATION (a) Condemnation Proceeds. Beneficiary h Ubeenth|edtoraceiveenyanda|| sums which may be awarded or become payable toGrantor for the condemnation of the Mortgaged Property nrany part thereof,for public orquasi-public use, orbyvirtue cf private sale inlieu thereof, and any sums which may baawarded orbecome payable toGrantor for damages caused by public works or construction on or near the Mortgaged Property. All such sums are hereby assigned to Beneficiary and Grantor oha||' upon request of Beneficiary, make,execute,acknowledge and deliver any and all additional assignments and documents as may be necessary from time tntime 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 e result of condemnation shall be applied to installments onthe Indebtedness in inverse order ofmaturity. ARTICLE |X SECURITY AGREEMENT 9.1. Security Interest. This Deed odTrust shall boconstrued aaadeed of trust onreal property, and itshall also constitute and serve as a security agreement on personal property within the meaning of,and shall constitute until the grant of this Deed of Trust shall terminate as provided in Article 11 hereof,a pledge and assignment and a security interest under the Uniform Commercial Code (being Chapter 0 of the Texas Business and Commerce Code as to the property within the scope thereof and situated in the State of Texas) with respect to the Persona|ty, Fixtures, Leases and Rents. Grantor has GRANTED. BARGAINED, CONVEYED, ASSIGNED, TRANSFERRED AND SET OVER, and by these presents does GRANT, BARGAIN, CONVEY, ASSIGN, TRANSFER AND SET OVER unto Trustee (acting as both etrustae and agent for the Beneficiary under the terms hereof) a security interest in and to all of Grantor's right, title and interest in, to and under the Personalty, Fixtures, Leases and Rents in trust, tosecure the full and timely payment of the Indebtedness secured hereby and the full and timely performance and discharge of the Obligations. Upon an Event of Default,Grantor shall gather all of the Mortgaged Property which is Personalty a\alocation designated bythe Beneficiary for sale pursuant tothe terms hereof. The security interest herein granted shall be subordinate only to that certain security interest created in that certain Leasehold Deed of Trust and Security Agreement,executed as of August 27,2003, by Grantor for the benefit of Beneficiary,and JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-Page 1V 1261'61001/245631 recorded otVolume 17158. Page 0151 ofthe Real Property Records ofTarrant County, Texas (the "2003 Leasehold Deed ofTnuaf). 9.2. Financing Statements, Grantor aheU execute and deliver to Beneficiary, in form and substance satisfactory to Beneficiary, such financing statements and such further assurances as Beneficiary may,from time to time, consider reasonably necessary to create,perfect and preserve Beneficiary's security interest herein granted and Beneficiary may cause such statements and assurances to be recorded and filed at such times and p|ooee as may he required or permitted bylaw to au oroo1e, perfect and preserve such security interest. Pursuant to the Texas Business and Commerce Code,this Deed of Trust shall be effective as a financing statement filed as a fixture filing from the date of its filing for record covering the Fixtures and Personalty. The address of Grantor,as debtor,and Beneficiary,as secured party,are as set forth herein. The above-described goods are or are to become fixtures related to the Land and Improvements of which Grantor iothe record title owner. 9.3. Uniform Commercial Code Remedies. Trustee and Beneficiary shall have all the hghta, remedies and recourses with respect tnthe Personalty, Fixtures, Leases and Rents afforded asecured party by the aforesaid Uniform Commercial Code in addition to, and not in limitation of, the other rights, remedies and recourses afforded bythe Security Documents and stlaw. 9.4. No Obligation of Trustee or Beneficiary. The assignment and security interest herein granted shall not be deemed or construed to constitute Trustee or Beneficiary as atrustee-in-possession of the Mortgaged Property,toobligate Trustee orBeneficiary tooperate the Mortgaged Property orattempt todothe same, ortake any action, incur expenses orperform ordischarge any obligation, duty orliability whatsoever under any nf the Leases orotherwise. ARTICLE X CONCERNING THE TRUSTEE 10.1. NoLiability. Trustee shall not be liable for any error of judgment or act done by Trustee,or be otherwise responsible or accountable under any circumstances whatsoever. Trustee shall not bepersonally liable incase of entry by him or anyone acting by virtue of the powers herein granted him upon the Mortgaged Property for debts contracted or liability ordamages incurred in the management or operation of the Mortgaged Property. Trustee shall have the right to rely on any instrument,document or signature authorizing orsupporting any action taken nrproposed tobe taken byhim hereunder orbelieved byhim ingood faith tobe genuine. Trustee shall be entitled to reimbursement for expenses incurred by him in the performance of his duties hereunder and to reasonable compensation for such of his services hereunder as shall be rendered. Grantor will,from time to time, pay compensation due to the Trustee hereunder and reimburse Trustee for and save and hold him harmless from and against any and all loss,cost, liability,damage and expense whatsoever incurred byhim inthe performance ofhis duties. 10.2. Retention of Monies. All monies received byTrustee shall, until used orapplied esherein provided' be held in trust for purposes for which they were received, but need not be segregated in any manner from any other monies(except tothe extent required bylaw)and Trustee shall beunder noliability for interest onany monies received byhim hereunder. 10.3. Successor Trustees. Trustee may resign bygiving ofnotice ofsuch resignation inwriting to Beneficiary. |fTrustee shall die, resign orbecome disqualified from acting in the execution of this Deed of Trust or shall fail or refuse to exercise the same when requested by Beneficiary so to do or if for any reason and without cause Beneficiary shall prefer to appoint a substitute trustee to act instead of the original Trustee named herein' or any prior successor or substitute trumtee. Beneficiary ahoU have full power toappoint a substitute trustee and, if preferred, several substitute trustees in succession who shall succeed toall the estate, rights, powers and duties oYthe aforenamed Trustee. 10.4. Succession Instruments. Any new Trustee appointed pursuant toany o(the provisions hereof shaU, without any further act, deed of conveyanco, become vested with all the eata1es, properties, rights, powers and trusts of its or his predecessor in the rights hereunder with like effect as if originally named as JUNIOR LEASEHOLD DEED OF TRUST AND SECURMY AGREEMENT-Page 1r 1261'51001/245631 Trustee herein; but, nevertheless, upon the written request of Beneficiary orhis successor trustee,the Trustee ceasing toact shall execute and deliver oninstrument transferring h)such successor trustee, upon the trust herein expressed, all the ootuhau, ppoperth*e, rights, powers and trusts ofthe Trustee no ceasing tmact, and shall duly assign, transfer and deliver any of the property and monies held by the Trustee tothe successor trustee aoappointed in its orhis place. 10.5. Performance of Duties by Agents. Trustee may authorize one(1)ormore parties tuact onhis behalf to perform the ministerial functions required of him hereunder, including without limitation, the transmittal and posting nfany notice. ARTICLE X| MISCELLANEOUS 11.1. Survival of Obligations. Each and all ofthe Obligations shall survive the execution and delivery of the Security Documents and the consummation of the loan called for therein and shall continue in full force and effect until the Indebtedness secured hereby shall have been paid in full. 11.2. Further Assurances. Grontor, upon the request ofTrustee orBeneficiary, will exooute, acknowledge, deliver and record and/or file such further instruments and do such further acts as may be nec000ary, desirable or proper to carryout more effectively the purposes of the Security Documents, to subject to the liens and security interests thereof any property intended by the terms thereof tobecovered thereby, including apecihcaUy, without limitation, any renewals, additiono, substitutions, replacements or appurtenances to the Mortgaged Property, and to complete, oxecu|o, record and file any document or instrument necessary to place third parties on notice of the liens and security interests granted under the Security Documents. Grantor hereby irrevocably appoints Trustee and Beneficiary anits agents to execute and deliver all such instruments and additionally torecord and file any ofthe same aamay benecessary if Grantor fails{opromptly dothe same upon request byBeneficiary. 11.3. Recording and Filing. Grantor will cause the Security Documents and all amendments and supplements thereto and substitutions therefor to be recorded,filed, re-recorded and refiled in such manner and in such places as Trustee or Beneficiary shall reasonably request and will pay all such recording,filing,re- recording and refiling taxes, fees and other charges. 11.4. Notices. All notices or other communications required or permitted to be given pursuant to this Deed of Trust shall be in writing and shall be considered as properly given if mailed by registered or certified United States mail, postage prepaid,or by delivering the same in person to the intended addressees orbyprepaid telegram; provided, however,that notice regarding any proposed foreclosure sale shall bogiven pursuant toParagraph 7.4hereof. Notice somailed shall beeffective and deemed received forty-eight (4O) hours after being deposited in a post office Vrother official depository under the care and custody of the United States Postal Service. Notice given inany other manner shall beeffective only ifand when received b theaddreuooe. For purposes of notice,the addresses of the parties shall be asset forth in Paragraph 1.1(a) hereof and the opening recital herein; provided,however,that Grantor and Beneficiary shall have the right to change their address for notice hereunder to any other location within the continental United States by the giving ofthirty(3O) days' notice tVthe other party|nthe manner set forth hereinabove. 11.5. No Waiver. Any failure by Trustee or Beneficiary to inoiat, or any election by Trustee or Beneficiary not to insist, upon strict performance by Grantor of any of the terms,provisions or conditions of the Security Documents shall not be deemed to be a waiver of the same or of any other term, provisions or condition thereof, and Trustee orBeneficiary h || havether|ghto1anytime. fromhmotoiimmthereofter. tV insist upon strict performance by Grantor of any and all of such terms, provisions and conditions. 11.6. Benef iciarV's Right to Pay Indebtedness and Pay Obligations. If Maker,Grantor or any other make such payment orperform such act for the account ofand at the expense of Grantor and shall have the right to enter upon the Mortgaged Property for such purpose and to take all such action thereon with respect to the Mortgaged Property as it may deem necessary or appropriate. Grantor shall be obligated to repay Beneficiary for all sums advanced by it pursuant to this Paragraph 11,6 or by reason of any other provision of the Security Documents. All sums paid b Beneficiary pursuant \othis Paragraph 11.Gand all other sums expended byBeneficiary towhich i1shall be entitled tobeindemnified, together with interest thereon ekthe maxim um legal contract rate ofinterest that Beneficiary may charge Grantor frnmthe date ofsuch payment or expenditure shall constitute additions to the Indebtedness and Obligations, shall be secured by the Security Documents and shall bepaid byGrantor\oBeneficiary upon demand. 117. . All obligations contained inthe Security Documents are intended by the parties to be and shall be construed as covenants running with the Mortgaged Property. 11.8. Successors and Assigns. All ofthe terms ofthe Security Documents shall apply to, be bind/ng upon and inure to the benefit of the parties thereto, their respective successors, 000igno' heirs and legal representatives and all other persons claiming by, through or under them. 11.9. Severabilit . The Security Documents are intended 1obeperformed inaccordance with,and only to the extent permitted by, all applicable Legal Requirements. If any provision of any of the Security Documents orthe application thereof to any person or circumstance shall,for any reason and to any extent, beinvalid Vrunenforceable, neither the remainder of the instrument inwhich such provisions iecontained nor the application of such provision to other persons or circumstances o/ other instruments referred to hereinabove shall be affected thereby, but rather,the same shall be enforced to the greatest extent permitted by law. 11.10. . All agreements between Grantor and Beneficiary, whether now existing or hereafter arising and whether written or oral,are hereby limited so that in no contingency,whether by reason of demand or acceleration of the maturity of the Note or otherwise,shall the interest contracted for, charged, received, paid or agreed to be paid to Beneficiary exceed the maximum amount permissible under applicable law. If,from any circumstance whatsoever, interest would otherwise be payable to Beneficiary in excess of the maximum lawful amount,the interest payable to Beneficiary shall be reduced to the maximum amount permitted under applicable law;and if from any circumstance Beneficiary shall ever receive anything of value deemed interest by applicable law in excess of the maximum lawful amount,an amount equal to any excessive interest shall beapplied tothe reduction cf the principal o[the Indebtedness secured hereby and not tothe payment of interest, or if such excessive interest exceeds the unpaid balance of principal of the Indebtedness secured hereby,such excess shall be refunded to 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 period until payment in full of the principal so that the interest on the Indebtedness secured hereby for such full period shall not exceed the maximum amount permitted by applicable law. This section shall control all agreements between Grantor, Maker and Beneficiary. 11.11. Entire Agreement and Modification. The Security Documents contain the entire agreements between the parties relating to the subject matter hereof and thereof,and all prior agreements relative thereto which are not contained herein nrtherein are terminated. The Security Documents may beamended,revised, waived, discharged, released or terminated only by a written instrument or instruments executed by the party against which enforcement of the amendment, revision,waiver, discharge, release or termination is asserted. Any alleged amendment,revision,waiver,discharge, release or termination which is not so documented shall not boeffective aoto any party. 11.12. Counterparts. This Deed ofTrust may beexecuted inany number ofcounterparts, each of which shall bean original, but all ofwhich together shall constitute but one instrument. 11.13. Applicable Law and Uniform Commercial Code. THE SECURITY DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TOTHE LAWS OFTHE STATE{}FTEXAS AND THE LAWS OF THE UNITED STATES APPLICABLE TO TRANSACTIONS IN THE STATE OF TEXAS. All terms used herein which are defined in the Texas Business and Commerce Code shall be used with the definition therefor insaid Texas Business and Commerce Code. JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-Page 1n 11.14. Leasehold Mortga-ge. (a) Grantor agrees with Beneficiary at all times fully to perform and comply with all covenants, warranties, representations and other obligations imposed upon orassumed by Grantor asTenant orotherwise under the Ground Lease. |nthis regard, Grantor hereby grants toBeneficiary the absolute and immediate right tnenter upon the leasehold estate grunted by the Ground Lease to such extent and as often as Benefio\ary, in its opinion, deems necessary or desirable in order to prevent or cure any failures by Grantor to perform its obligations under the preceding sentence. However, Beneficiary shall have moobligation to cure defaults under the Ground Lease. Any sums advanced byBeneficiary tocure defaults by Grantor under the Ground Lease or to protect or preserve the validity or priority of Beneficiary's lien thereon shall become part of the Indebtedness hereby secured,shall bear interest from the date advanced until repaid at the maximum lawful rate of interest permitted under the law applicable tothe Indebtedness and shall bepayable upon demand. Grantor shall immediately notify Beneficiary in writing of anynotice which it receives from the Landlord under the Ground Lease advising that Grantor is in default or that an event has occurred which,with the passage of time or otherwise,would constitute a default by Grantor underthe Ground Lease. Grantor warrants tnBeneficiary that ithas received nosuch notice aaofthe date hereof and has noknowledge ofany default byitunder the Ground Lease. (b) Grantor agrees that it will not without Beneficiary's prior written conoent, terminate, cancel, surrender, modify or amend the Ground Lease in any respect, or permit the fee title to the real property demised by the Ground Lease, and the leasehold estate so created to merge, but rather the said fee title and the said leasehold estate shall always be separate and distinct. (c) From time tVtime, upon request byBeneficiary, Grantor agrees tVuse its best efforts to obtain f rom the Landlord under the Ground Lease a written estoppel certificate concerning matters relating to the Ground Lease which Beneficiary may reasonably request. (d) Uthere shall befiled byoragainst the Landlord under the Ground Lease a petition under the United States Bankruptcy Code, Grantor hereby unconditionally assigns, transfers and sets over to Beneficiary all of Grantor's o|oime and rights to the payment of damages arising from any rejection ofthe Ground Lease bythe Landlord. This assignment constitutes apresent, irrevocable and unconditional assignment ofthe foregoing c|eima, rights and rennedieu, and shall continue in effect until all the Indebtedness and Obligations secured hereby shall have been satisfied and discharged infull. 11.15. Impositions and Insurance Escrow. To implement the provisions of Paragraph 4.4 and Paragraph 4.6 hereof,Grantor,at Beneficiary's request,shall pay to Beneficiary,onthefirstdayof eachmonth until payment infullof the Indebtedness secured hereby and the Obligations,one-twelfth (1/12th)of thesurn of: (a)the annual Impositions (estimated wherever necessary)to become due for the tax year during which such payment is so directed;and (b)the insurance premiums for the same year for those insurance policies as are required hereunder. If Beneficiary determines that any amounts theretofore paid by Grantor are insufficient for the payment in full of such Impositions and insurance premiums, Beneficiary shall notify Grantor of the increased amounts required to provide a sufficient fund, whereupon Grantor shall pay to Beneficiary withinthirty(3O) dayntheremftertheaddibona| emoun1aostatodintheBmnefioimn/ono4ico. The Escrowed Sums may beheld byBeneficiary innon-interest bearing accounts and may be commingled with Benefician/o otherfunda. Upon assignment ofthis Deed ofTrust, Beneficiary shall have the right to pay over the balance of the Escrowed Sums then in its possession to its assignee,whereupon the Beneficiary and Trustee shall then become completely released fromall liability with respect thereto. Upon payment ofthe Indebtedness secured hereby and performance of the Obligations, or at such earlier time that Beneficiary may elect,the balance of the Escrowed Sums in its possession may be paid over to Grantor,and no other party shall have any right or claim thereto. |fmnEvent of Default shall have occurred and the continuing hereunder,however, Beneficiary shall have the additional option of applyingthmfu||mmountof1heEscrowedSumo4Boinot the Indebtedness secured hereby. Notwithstanding anything tnthe contrary contained inthis Paragraph 11.15nrelsewhere in JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-Page 2o this Deed cfTrust,Beneficiary hereby agrees not Uorequest Grantor hopay to Beneficiary any of the Escrowed Sums described in this Paragraph 11.15 as long as an Event of Default has not occurred. 11.16. Headings and General Application. The article, paragraph and subparagraph entitlements hereof are inserted for c onvenience of reference only and shall in no way affect, modify or define, or be used in construing, the text of such mrtio|e, paragraph or subparagraph. If the text requirem, words used in the singular shall be read as including the plural, and pronouns of any gender shall include all genders. 11.17. SoleBenefit. This instrument and the other Security Documents have been executed for the sole benefit of Grantor, Maker, Guarantor and Beneficiary and the heiro, aucceasora, assigns and legal representatives ofBeneficiary. Noother party shall have rights thereunder norbeentitled toasoumethatthe parties thereto will insist upon strict performance of their mutual obligations hereunder, any of which may be waived from time totime, Grantor, Maker and Guarantor shall have noright toassign any of their rights under the Security Documents to any party whatsoever, including the right to receive advances under the Note or otherwise. 11.18. Subrogation. If any or all of the proceeds of the Indebtedness or the Obligations have been used to extinguish,extend or renew any indebtedness heretofore existing against the Mortgaged Property or to am\ioh/ any indebtedness or obligation secured by lien or encumbrance of any kind (including liens securing the payment of any Impositions); such proceeds have been advanced by Beneficiary at Grantor's request,and,to the extent of such funds so used,the Indebtedness and Obligations in this Deed of Trust shall be subrogated to and extend to all of the rights, claims, liens, titles and interests heretofore existing against the Mortgaged Pnopertytooecuretheindeb\ednesaorob|igationuoexinguiahed' paid.axtendedorn*nowad. and the former rights,claims, liens,titles and interest, if any,shall not be waived,but rather shall be continued in full force and effect and in favor of Beneficiary and shall be merged with the lien and security interest created herein 8scumulative security for the repayment cdthe Indebtedness secured hereby and satisfaction ofthe Obligations. 1119. Environmental Provisions, A. Grantor covenants that: (m) no substances, including without |imitation, mobeahoo or any substance containing asbestos and deemed hazardous under any Hazardous Material Law(as defined below), the group of organic compounds known aspolychlorinated bipheny\a, flammable explosives, radioactive materials,chemicals known to cause cancer or reproductive toxicity, pollutants,effluents,contaminants, emissions or related materials and any items included in the definition of hazardous or toxic waste, materials or substances ("Hazardous Materials"') under any law relating toenvironmental conditions and industrial hygiene, ino|uding.without limitation,the Resource Conservation and Recovery Act of 1976("FICRA"),42 U.S.C.§6801 et seg., the Comprehensive Environmental Response, Compensation and Liability Act of 1980("CERCLA"),42U.S.C. §§SGO1'SOG7'maamended bvtheSupedundAmendments and Reauthorization Act of 198G ("SARA^). the Hazardous Materials Transportation Act, 49 U.S.C.§SSO1,et seq..the Federal Water Pollution Control Act,33U.S.C.§§1251et seq..thm Clean Air Act, 4� U.G.C. 8§741 et seq.' the Clean Water Act, 33 U.S.C. G7401, the Toxic Substances Control /\c1' 15 U.S.{}. §§2801'2629. the Safe Drinking Water Act, 42 U.S.C. §§300f-300j, and all similar federal, state and local environmental statutes, ordinances and the regulations, orders, decrees now or hereafter promulgated thereunder(collectively,the "Hazardous Material Lawo^), shall be ineta||od, used, generated' manufactured, tremked, handled, refined, produced, processed,stored or disposed of, or otherwise present in,on or under the Mortgaged Property; (b) no activity ohm|| be undertaken on the Mortgaged Property which would cause (i) the Mortgaged Property to become a hazardous vvaa\e treatment' storage or disposal facility within the meaning of, or otherwise bring the Mortgaged Property within the ambit of RCRA or any Hazardous Material Law. (ii) a release o, threatened release of Hazardous Material from the Mortgaged Property within the meaning of, or otherwi JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-Page u1 1261.51001/245631 k the Mortgaged Property within the ambit of CERCLA or SARA or any Hazardous Material Law' or (iii) the discharge of Hazardous Material into any watercourse, body of surface or subsurface water or wetland,or the discharge into the atmosphere of any Hazardous Material which would require apermit under any Hazardous Material Law; (o) no activity shall be undertaken with respect to the Mortgaged Property which would cause aviolation orsupport oclaim under RCRA. CERCL4, SARA nrany Hazardous Material Law; and (d) nounderground storage tanks orunderground deposits shall belocated on the Mortgaged Property. B. Grantor shall immediately advise Beneficiary in writing of: (a) any governmental orregulatory actions instituted orthreatened under any Hazardous Material Law affecting the Mortgaged Property; (b) all claims made or threatened by any third party against Grantor or the Mortgaged Property relating todamage, contribution, cost recovery, compensation, loss or injury resulting from any Hazardous Material; (o) the discovery ofany occurrence orcondition onany real property adjoining or in the vicinity of the Mortgaged property that could cause the Mortgaged Property to be classified inamanner which may support aclaim under any Hazardous Material Law; and (d) the discovery cfany occurrence orcondition onthe Mortgaged Property or any x*a| property adjoining or in the vicinity cdthe Mortgaged Property which could subject Grantor or the Mortgaged Property to any restrictions on ownership, occupancy, transferability oruse ofthe Mortgaged Property under any Hazardous Material Law. C. Beneficiary may elect to join and participate in any aett|ennen1a, remedial actions, legal proceedings or other actions initiated in connection with any claim under any Hazardous Material Law and tohave its reasonable attornayn'feeopaid byGrantor. AJits sole cost and expense,Grantor agrees when applicable or upon request of Beneficiary to promptly and completely cure and remedy every violation of Hazardous Material Law caused byGrantor orexisting on or because of the Mortgaged Property and\opromptly remove all Hazardous Materials onthe Mortgaged Property and to dispose of the same as required by Hazardous Material Laws or by Beneficiary. D. Beneficiary(by its officers,employees and agents)at anytime and from time to time may contract for the sen/iona of persona (the "Site Reviewers") to perform environmental site assessments ("Site Assessments") on the Mortgaged Property for the purpose of determining whether there exists onthe Mortgaged Partyanyenvironmen\a|oonditiVnwhiohcnu|dneaoonab|y be expected to result in any |iabi|i\y, cost orexpense \Vthe owner, occupier or operator nfthe Mortgaged Property arising under any of the Hazardous Material Laws relating to Hazardous Materials. The Site Reviewers are hereby authorized to enter upon the Mortgaged Property for purposes of conducting Site Assessments. The Site Reviewers are further authorized to perform both above and below the ground testing for environmental damage or the presence of Hazardous Materials on the Mortgaged Property and such other tests on the Mortgaged Property as may be necessary to conduct the Site Assessments in the reasonable opinion of the Site Reviewers. Grantor agrees to supply to the Site Reviewers such historical and operational information regarding the Mortgaged Property as may be reasonably requested by the Site Reviewers to facilitate the Site Assessments and will make available for meetings with the Site Reviewers appropriate personnel having knowledge ofsuch matters. The results ofSite Assessments shall bofurnished \oGrantor upon request. The cost ofperforming such Site Assessments shall bepaid byGrantor. E. Grantor shall indemnify,defend and hold harmless Beneficiary,its directors,officers, employees, agents, successors and assigns from and against: JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT'Page uu (a) any loss, liability,damage,cost,expense or claim arising from the imposition or recording of a lien, the incurring of costs of required repairs,clean-up or detoxification and removal under any Hazardous Material Law with respect \othe Mortgaged Property, or liability to any third party in connection with any violation of a Hazardous Material Law; (b) any other loss, liability,damage,expense or claim which may be incurred by orasserted against Grantor directly orindirectly arising fromthe presence onorunder,orthe discharge, emission or release from the Mortgaged Property into or upon the \ond, atmosphere, or any watercourse, body ofsurface orsubsurface water orwetland, arising from the installation, use,generation, manufacture,treatment, hand|inA, refining,pnoduc\ion, processing,storage, removal,clean-up or disposal of any Hazardous Material whether or not caused by Grantor; (o) loss of value of the Mortgaged Property as a result of any such lien, clean- up, detoxification, |onm. |iebi|/\y, damage, expense or claim orafailure nrdefect in hdo occasioned byany Hazardous Material orHazardous Material Law; and (d) all foreseeable and unforeseeable incidental and consequential damages. 11.20. Business or Commercial Purpose. Grantor warrants that the extension ofcredit evidenced by the Note secured hereby is solely for business or commercial purposes,other than agricultural purposes. The Grantor further warrants that the credit transaction evidenced by the Nn\o is specifically exempted under Regulation Zissued bythe Board ofGovernors ofthe Federal Reserve System and Title I (Tru\h'in-LendinQ Act) of the Consumer Credit Protection Act and that no disclosures are required to be given under such regulations and federal laws inconnection with the above tranoaction. EXECUTED toboeffective aaofthe day and year first above written. GRANTOR: AMAQ LIMITED PARTNERSHIP, aTexas limited partnership By: C|DEK8ACORPORAT|ON. oTexas corporation, its general partner By: Gary VV. Havener, President EXHIBITS: Exhibit A' Ground Lease ExhibdB— PmrmittedEncurnbnanoeo JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-Page 2o ACKNOWLEDGEMENT STATE OFTEXAS G COUNTY OF § BEFORE ME,the undersigned, a Notary Public in and for the State of Texas, on this day personally appeared Gary W. Havener, President of Cidema Corporation` aTexas corporation, on behalf ofAP|AQ LIMITED PARTNERSHIP, aTexas limited partnership,known tome tobethe person and off icer whose name iesubscribed tothe foregoing instrument and acknowledged tomethat the same was the act nfsaid corpora- tion 8ogenara|padner0nbeha|fofoa|d|imitedp8rtOeruhi9'8ndtha1he executed the same as the act of such corporation, as general partner, for the purposes and consideration therein expressed, and in the capacity therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE,this__day n[ 20O6. NOTARY PUBLIC, State ofTexas JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-Payeo« EXHIBIT A (ATTACH COPY OF GROUND LEASE) JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-Page 25 1261.51001/245631 EXHIBIT B (PERMITTED ENCUMBRANCES) Leasehold Deed of Trust and Security Agreement, executed as of August 27, 2003, by the Grantor for the benefit of Beneficiary, and recorded at Volume 17158, Page 0151 of the Real Property Records of Tarrant County, Texas. JUNIOR LEASEHOLD DEED OF TRUST AND SECURITY AGREEMENT-Page 26 1261.51001/245631 APIAQ LP—WEST HANGAR ADDIT. IpN w KHfA/1.29.04/N. T.S, Ex671u� s 112 AT�El `MAI" w. I, LESS THAN ALL BUILDING�p HO5E POLL TO RFRE HYDRANT ERIMETE / EXIST. aaW s° *,, ftf �P. TO PHASE pNEAF H.HN IN ADDMON gQDISOfIlH r Z 4 r H/C�4�5o+cNnn enema WAkL f� f ":sLr M�'xx IE+;xlritu oR+�vAr / P `'`• �'+r 'I y n !f 1 w P^w Inl 1FFEG'C,uiCt+rISN°Wt 44 I re f nW MPAM r a a Pf9AAuE 3 APRON / I-a•Wuae oeWOR ncex w Al e. rnn ,la M •.•xl yra. E/09" Eoom I. . HrufW 444 e.P I - I .f ,v,Yl ll- Ifi IP I f4 � rlr r I'I�:•t o�a �w., �.•n I �..� 100% MONITORED l' tease 3 APRON ' t' IE FANSPRINKLER DE-FUELED SYSTEM IRCRAFT � I a` GROUP TWO HANGAR c - - 777 _ i , w �`}" PFiC7P0&5i'19, �p'��Nrou�wr � iitk? 14Z gip:%KtT ne� Rt Lw m R Sep j I AP#W 43'M,Arra_' 15,72>a 6F. 9 71f ' J Iy i/ Page I of 2 City of Fort Worth, Texas Mayor and Council Communication t �� oio�mmuNmim�m�wm��oioii�wu�!wwiu�r000ioommuomw,w�wiwunwwiw�wwaw�ircoiomoimoou�wuoo�oim!�i�roiowr�rrmrmamuomnauu!a�[�ae6Rut�NworrvmuWoim�amN�w✓�w�wwwww�,!�u�mm�mw;�fi�umr!�mauwvwa�unarvamo�uiomioi�oi�u��u9Mm0000ioiou��,rorumMom�uw�wuum�iv�oimuuuuuuu�s'J�muwmwiww�w��wmuiNmuMnw�umnNmmmrc�orrr�wmmmoummomNouo�¢i2mwmou�rRm.✓n COUNCIL ACTION: Approved on 7/19/2005 mat�m2�iomiwumwwwutiwm�w �,au�u�w:wiar�mimioioi�uouuuuuumiuw�oa�mmuwmo�m,�ursrmmrta�!ami�nm�m _oMammss�om;�auo�murvam�r�,wiww�a�rwi�amsououuuu�ruubrom��rtiu�i�umu�e�m�r,�imi�nar��x�r��re�aiuouimummimorc�oMOMmioioiow!w!uu,��mwim�wuwi�i�mr�u�un �ot�wu�w��wuu �wuu�m��u�ai�m�amav„ DATE: Tuesday, July 19, 2005 LOG NAME: 55APIAQDEED REFERENCE NO.: **C-20849 SUBJECT: Authorize Execution of a Consent to Deed of Trust, Security Agreement and Financing Statement with APIAQ Limited Partnership in Favor of the Frost National Bank for Lease Site 44N at Fort Worth Meacham International Airport �IiIOLLtt�� TWIN!IWWMWWMOII�mMIm0101011pV!WWWWpW�WOpN@NfANtlpl� I�NM�Ifl 0f91PElb'1PWUW!NfitllmlrtWICYIIYNPIW'd'i9RM'J/91Y/�i'�A9W➢MNIOOIIN!�101WN1°94Ytlimfl�RdYINAPP4AA01ClIixiANNlfMli1YkM!44TI,M1MNWP�INlIOWNIIm(iM6PoU111@YD1NN'f�lI11YN144Y4MWi0VWZ!�tlidd'Y:ftbliUlGF��NMOYRflfn1l�f�iIMIIXMY�MiIAiM�IiIIIV�i�CNOtlNAMW1RINIIVW4WN61NNMilNMWP'PIWWWN9'MCS'N��f�Y�IIIIIII�IIIItlIN'i@pld"W�NIWVfMIIY�N!@IULti�W9V��tIIWiIVgtNP�,'vLG RECOMMENDATION: It is recommended that the City Council authorize the City Manager to execute the attached Consent to Deed of Trust, Security Agreement, and Financing Statement in favor of The Frost National Bank for lease site 44N at Fort Worth Meacham International Airport. DISCUSSION: The City of Fort Worth and APIAQ previously entered into City Secretary Contract (CSC) No. 26292 as assigned to APIAQ pursuant to CSC Nos. 26645 and 27455 for the lease of real property located at Fort Worth Meacham International Airport known as lease site No. 44N (Leased Premises). On August 27, 2003, APIAQ conveyed a security interest in the Leased Premises to The Frost National Bank (Lender) to secure the obligation of Phaero, LLC, and an affiliate of Lessee ("Phaero"), under a Promissory Note, dated January 26, 2000, in the original principal amount of One Million Seven Hundred Fifty Thousand and No/100 Dollars ($1,750,000.00), payable to the order of Lender. APIAQ now desires that Lender extend to APIAQ a short-term loan in the principal amount of $2,400,000.00 to grant a junior security interest in the Leased Premises to Lender to secure the Loan by executing a junior Leasehold Deed of Trust and Security Agreement. The junior Leasehold Deed of Trust will grant Lender the right to operate as the lessee or to secure another tenant in place of APIAQ, if approved by the City Council, in the event that APIAQ defaults under the loan or breaches its lease with the City. The lease prohibits APIAQ from making any assignment of the lease or causing any lien to be made on the constructed improvements without Council approval. This type of transaction is routine for large airport tenants and City staff has no objection to APIAQ's request. Fort Worth Meacham International Airport is located in COUNCIL DISTRICT 2. FISCAL INFORMATION/CERT"IFICATION: The Finance Director certifies that this action will have no material effect on City funds. http://www.cfwnet.org/council packet/Reports/mc print.asp $/5/2005 Page 2 of TO Fund/Account/Centers FROM Fund/Account!Cqnters submitted for CitY -Mana9 er's Afficeby.- Marc Oft (8476) Orig:Lnairing -P"artmerit'Head,:, Mike Feeley (871-5403) Additional Information Contact: Mike Feeley (871-5403) httD://www.cfwnet.org/council packet/Reports/mc print.asp 8/5/2005