20-559S:�I,egal\Our pocuxnents\Ordinances�201Consent to Collateral Assignment of Sykes-Vaughan Tract 2.doc
ORDINANCE NO. 20-559
AN ORDINANCE OF THE CITY OF DENTON APPROVING A CONSENT TO
COLLATERAL ASSIGNIVIENT OF AN AIIZPORT LEASE COVERING PROPERTY
LOCATED AT 4700 SPARTAN DRIVE, BETWEEN SYKES-VAUGI-IAN INVESTMENTS,
LLC AND BBVA USA; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, Sykes-Vaughan Investments, LL� ("Sykes-Vaughan") is the current leasee
of 4700 Spartan Drive, property at the Denton Enterprise Airport owned by the City of Denton, a
Texas home-rule municipal corporation (the "City"), as originally leased to GCBSXX, LLC on
7anuary 18, 2005 and subsequently assigned to Sykes-�aughan; and
WHEREAS, Sykes-Vaughan has agreed to collaterally assign its interest in the Lease to
BBVA USA, an Alabama banking corporation (`Bank") as evidenced by that certain Deed of
Trust, dated February 14, 2020; and
WHEREAS, the Lease requires written consent of the City for the Collateral Assignment
to be effective and Sykes-Vaughan has requested the City for such consent; and
WI�REAS, at the February 25, 2020 meeting of the Council Airport Committee, the
committee recommended that the City approve the Consent by a vote of 3-0; and
WHEREAS, the City Council deems it in the public interest to give consent to the
collateral assignment contemplated above; NOW, THEREFORE,
THE COUNCIL OF TI� CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings and recitations contained in the preamble of this Ordinance
are incorporated herein by reference.
SECTION 2. The City Manager, or his designee, is hereby authorized to execute a
Consent to the Collateral Assignment of Lease in the form attached hereto as E�ibit "A" and
made a part of this Ordinance for all purposes.
SECTION 3. This Ordinance shall become effective immediately upon its passage and
approval.
The mot� to approve this ordinance was made by ,� � 1�{G ,,_, and
seconded by �,QS ,L _� Gt�/i j the ordinance was pas� and approved by
the following vote (� - �]:
Aye Nay Abstain Absent
Chris Watts, Mayor: �
Gerard Hudspeth, District 1: _��
1
Keely Briggs, District 2:
7esse Davis, District 3:
John Ryan, District 4:
Deb Armintor, At Large Place 5
Paul Meltzer, At Large Place 6:
1�
��
✓
✓
PASSED AND APPROVED this the ��`� day of i�� 2020.
CHRIS WATTS, MAYOR
ATTEST:
ROSA RIOS, CITY SECRETARY
. ,�.
BY:
APPROVED AS TO LEGAL FORM:
AARON LEAL, CITY ATTORNEY
BY: � `.
�' ���
�
r
� ��
✓
CONSENT TO COLLATERAL ASSIGNMENT OF LEASE
This Consent to Collateral Assignment of Lease is made between the City of Denton, a Texas home
rule municipal corporation ("City" or "Landlord"), Sykes-Vaughan Investments, LLC, a Texas limited
liability company ("Assignor") and BBVA USA, an Alabama banking corporation �"Assignee").
WHEREAS, the City is the sole owner and landlord of a pad site at Denton Enterprise Airport
located at 4700 Spartan Drive, Denton, Texas 76207 (the "Property"); and
WHEREAS, the Property is subject to a ground lease, described as the Airport Lease Agreement
dated January 18, 2005, between the City and GCBSXX LLC, as subsequently amended and assigned to
Sykes-Vaughan Investments, LLC (collectively, the "Lease"); and
WHEREAS, Assignee provided financing for the purchase of the Leasehold Estate and certain
improvements on such ground leased property (the "Leasehold Estate"); and
WHEREAS, far the purpose of securing and enforcing the payment obligations of Assignor to
Assignee, Assignor now wishes to collaterally assign the Lease to the Assignee through the Leasehold Deed
of Trust attached hereto as E�ibit "A;" and
WHEREAS, Section XI of the Lease provides that it may not be collaterally assigned without the
written consent of City, at City's sole discretion, and Assignor has requested the City's consent;
NOW THEREFORE, in consideration of the mutual covenants set forth herein and for other good
and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the City hereby
consents to Assignor's collateral assignment of the Leasehold Estate to Assignee, through the Leasehold
Deed of Trust (the "Collateral Assignment") attached as E�ibit "A," under the following terms and
conditions:
1. Assignor shall pay to the City a transfer fee of One Thousand Dollars ($1,000.00) in connection
with the City providing its consent to the Collateral Assignment of the Leasehold Estate.
2. Assignor will pay or will have Assignee pay for all of the City's administrative costs on
handling and processing the assignment of the Leasehold Estate from Assignor to Assignee.
3. Assignee certifies that it has reviewed the Lease and accepts the provisions applicable to the
Assignee as Lender.
4. Assignee shall give the City copies of any written notice which Assignee gives to Assignar of
any default by Assignor under any financing agreement, promissory note, or the Collateral
Assignment at the same time it gives notice to the Assignor. Any such notice shall be delivered
as follows:
City Manager
City of Denton
215 E. McKinney
Denton, Texas 76201
with copies to:
Consent to Collateral Assignment of Lease (Tract 2) - Page 1
Airport Manager
Denton Enterprise Airport
5000 Airport Road
Denton, Texas 76207
City Attorney
City of Denton
215 E. McKinney
Denton, Texas 76201
The City agrees to provide Assignee a contemporaneous copy of all written notices provided
to Assignor under the Lease. Wherein a notice of default ar breach has been provided by the
City to Assignor and Assignee, Assignee shall be entitled, at its option, to cure such default or
breach, and the City shall accept such cure from Assignee. If the default or breach is not cured
as provided under the Lease, the City shall have the remedies available to it as set out therein.
Any notice to be delivered from City to Assignee shall be delivered to the following:
BBVA USA
8080 North Central Expressway, Suite 1500
Dallas, TX 75206
Attn: Daniel Walsh
6. Should Assignee foreclose or otherwise obtain Assignor's rights and interest in the Leasehold
Estate, the City will not unreasonably withhold its consent to an assignment by Assignee to
future successors upon being provided with the potential successor's (i) financial statement,
(ii) confirmation of no outstanding taxes, liens, or judgments, and (iii) a demonstrated history
of aviation experience. The City shall be the sole judge of any potential successor's
qualifications, which shall be reasonably exercised.
7. In the event of any inconsistency beriveen the terms and conditions of the Lease and the terms
and conditions of this Consent, then the Lease shall govern and control.
8. If any provisions of this Consent shall be held or deemed to be illegal, inoperative, or
unenforceable, the same shall not affect any other provisions contained herein; the remaining
provisions to remain in full force and effect.
9. The City hereby represents and warrants that this Consent is made with proper authority under
Ordinance.
10. Assignee, its authorized representatives or agents, may, upon reasonable advanced notice
(written or oral) to Assignor and City and at any reasonable times, enter the Properly for the
purposes of inspecting, repairing, or removing personal property. Assignee may further, upon
reasonable advanced written notice to City and Assignor and at reasonable times, enter upon
the Property to e�ibit or conduct a sale(s) of any or all of the collateral pledged to Assignee,
subject to the City's interests under the Lease.
11. This Consent to Collateral Assignment shall be governed by and construed in accordance with
the laws of the State of Texas. Exclusive venue for any action related to this Consent shall be
solely in a court of competent jurisdiction in Denton County, Texas.
Consent to Collateral Assignment of Lease (Tract 2) - Page 2
12. This Consent to Collateral Assignment of Lease will bind and inure to the benefit of the parties,
their heirs, executors, administrators, successors in interest, and assigns.
IN WITNESS HEREOF, the parties have executed this Consent to Collateral Assignment of Lease
as of the Date written below.
[Signatures on following page]
Consent to Collateral Assignment of Lease (Tract 2) - Page 3
Dated: � ./ �`� ��, vaf�
ATTEST:
ROSA RIOS, CITY SECRETARY
� _�.
By: _
THIS AGREEMENT HAS BEEN
BOTH REVIEWED AND APPROVED
as to financial and operational
obligations and business terms.
�Si ature
/�DIO /l r %�..iAd�i1
Trt
� Q�
eparhnent
Date Signed: a �/ aOdO
ASSIGNOR:
Sykes-Vaughan Investments, LLC, a Texas
limited liability company
By:
Name: .A. Roper ughan
Title: Manager
ASSIGNEE:
BBVA USA
By:
Name: Daniel Walsh
Title: Senior Vice President
CITY OF DENTON
Landlord
By: �,j� � �'""""_
vd� . ,
Name: 1
Title:
�`��� 0 F' � E ����i
� N .
��• ,�y ��,,,.... ...J�O ��'�
: � .'
r
� V: :� �
" � =
� ; .
:*: �tt=
— : � =
Z : —
. : ;' ?
i�� O ;�� ���. � ``
�j �c '•••.....••• Q� ��
''''��01111��```
Signature Page to Consent to Collateral Assignment of Lease (Tract 2)
APPROVED AS TO LEGAL FORM:
AARON LEAL, CITY ATTORNEY
� � _'�:
By: ` U��
Signature Page to Consent to Collateral Assignment of Lease (Tract 2)
ACKNOWLEDGMENT OF ASSIGNOR
STATE OF TEXAS
COUNTY OF DENTON
This instrument was acknowledged before me on o�� 2020, by W.A. Roper Vaughan,
Manager of Sykes-Vaughan Investments, LLC, a Texas limited iiability company, on behalf of said entity.
�.K' °��, ERICA MAHAN
i ' No[ary ID i1130245091
r, P My Commission Expires
'rE�, t'� July 19, 2023
STATE OF TEXAS
COUNTY OF DENTON
C C/ l/� ��
NOTARY PUBLIC, State of Texas
ACKNOWLEDGMENT OF ASSIGNEE
§
§
§
This instrument was acknowledged before me on , 2020, by Daniel Walsh, Senior Vice
President of BBVA USA, on behalf of said entity.
NOTARY PUBLIC, State of Texas
ACKNOWLEDGMENT OF LANDLORD
STATE OF TEXAS
COUNTY OF DENTON
This instrument was acknowledged before me onl ��t1 �. � I 2020, by Todd Hileman, City
Manager, of the CITY OF DENTON, a Texas home rule municipal corporation, on behalf of said entity.
�� �
' f S
��1
; �;`�'`'"''��; ; KARISA LEtGH RiCHqRDS —`
;�,, :g; MY Notary ID # 131826791 NOTARY PUBLIC, State af Texas
''•'.�'o� �+�� �xpi�Bs De�ember 14, 2022
Signature Page to Consent to Collateral Assignment of Lease (Tract 2}
Dated: 7�i1 �l ZO Za
ASSIGNOR:
Sykes-Vaughan Investments, LLC, a Texas
limited liability company
By: �
Name: W.A. Roper Vaughan
Title: Manager
ASSIGNEE:
BBVA USA
By:
Name: el Walsh
Title: Senior Vice President
CITY OF DENTON
Landlord
� . � �..�
F'�'��-�!!�11 . � - -
4
ATTEST:
ROSA RIOS, CITY SECRETARY
`�����������i��i
g .�•��y .•O F•• D �N�O ��.
y� � C� � ���� � ��
.. : : �
THIS AGREEMENT HAS BEEN � � �
-� : : —
:*: '*_
BOTH REVIEWED AND APPROVED � ; ; _
as to financial and operational � 's � �
. .
obligations and business terms. �'�'��FNT •••••• i�.�,;`.`�
.
������� i�i�+����
Signature
Title
Department
Date Signed:
Signature Page to Consent to Collateral Assignment of Lease (Tract 2)
STATE OF TEXAS
COUNTY OF DENTON
ACKNOWLEDGMENT OF ASSIGNOR
§
§
§
This instrument was acknowledged before me on , 2020, by W.A. Roper Vaughan,
Manager of Sykes-Vaughan Investments, LLC, a Texas limited liability company, on behalf of said entity.
5TATE OF TEXAS
COUNTY OF DENTON
NOTARY PUBLIC, State of Texas
ACKNOWLEDGMENT OF ASSIGNEE
§
§
§
This instrument was acknowledged before me on ��3 �2024, by Daniel Walsh, Senior Vice
President of BBVA USA, on behalf of said entity.
,�F VERONICA �Al1AN
:° � NOTARY PU61.1C•SiATE OF TEXAS
• • m�ett3aa7.�
F co�w. �v o�a��
STATE OF TEXAS
COUNTY OF DENTON
�
//��-���o��-���� - -_.
NOTARY PUBLIC, State of Texas
ACKNOWLEDGMENT OF LANDLORD
§
§
§
This instrument was acknowledged before me on p �� 2020, by Todd Hileman, City
Manager, of the CITY OF DENTON, a Texas home rule municipal corporation, on behalf of said entity.
��G(�� � '�1 ��� r4�
�► ` �� �� `� �
Y �,�,�y� 1V�if�rv�vS �S I
�'�°`:�.;. '�.,
; :*: My Npt�ry ID # 131826791 •
:;� 4�"� peoemt�er 14, 2022 ; NOTARY PUBLIC, State of Texas
l;
•,;�;� �..• � �; :
Signature Page to Consent to Collaterai Assignment of Lease (Tract 2)
• r
� �
Creatir�� �ppor��r�iti�s
DEED OF TRUST
dated as of February 18, 2020
among
SYKES-VAUGHAN INVESTMENTS LLC, a Texas limited liability company
as Grantor,
BBVA USA,
as Beneficiary
and
DANIELLE FARNHAM,
as Trustee
Tract 2
Rev. 6-10-19
NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL
PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE
FOLLOWING INFORMATION FROM TffiS INSTRUMENT BEFORE IT IS
FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY
NUMBER OR YOUR DRIVER'S LICENSE NUMBER
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
AND UCC FINANCING STATEMENT FOR FIXTURE FILING
(Texas)
by
SYKES-VAUGHAN INVESTMENTS LLC, a Texas limited liability company,
as Grantor,
to
DANIELLE FARNHAM,
as Trustee,
for the benefit of
BBVA USA,
as Beneficiary
This Instrument shall be effective as a
UNIFORM CONIMERCIAL CODE FINANCING STATEMENT FILED AS A
FIXTURE FILING
By
Debtor: Sykes-Vaughan Investments LLC
4850 Spartan Drive
Denton, Texas 76207
Attn: W.A. Roper Vaughan
To
Secured Party: BBVA USA
8080 North Central Expressway, Suite 1500
Dallas, TX 75206
Attn: Daniel Walsh
This Financing Statement covers goods described herein by item or type some or all of which are affixed
or are to be affixed to the real properiy described in E�ibit A attached hereto.
THIS INSTRUMENT PREPARED BY AND AFTER RECORDING PLEASE RETURN TO:
Bell Nunnally & Martin LLP
2323 Ross Ave., Suite 1900
Dallas, Texas
Attn: William A. DeLoach
(Denton County)
TABLE OF CONTENTS
Pa�e
ARTICLE1 DEFIMTIONS AND TERMS .................................................................................................1
1.1 Defined Terms ..................................................................................................................... l
1.2 Interpretive Provisions ........................................................................................................3
ARTICLE 2 GRANT OF LIEN; HABENDUM CLAUSE; ASSIGNIVIENT OF LFASES AND
RENTS...................................................................................................................................3
2.1 Grant of Lien; Habendum Clause ........................................................................................3
2.2 Subrogation ......................................................................................................................... 3
2.3 Assignment of Leases and Rents .........................................................................................4
ARTICLE 3 REPRESENTATIONS AND WARRANTIES ........................................................................5
3.1 Deed of Trust Lien .............................................................................................................. 5
3.2 Warrant Title ....................................................................................................................... 5
ARTICLE4 AFFIRMATIVE COVENANTS ..............................................................................................5
4.1 Payment of Impositions .......................................................................................................5
4.2 Repair .................................................................................................................................. 5
4.3 Defense of Tit1e ...................................................................................................................5
4.4 Security and Priority of Advances ...................................................................................... 5
ARTICLE 5 NEGATIVE COVENANTS .....................................................................................................7
5.1 Use Violations .....................................................................................................................7
5.2 Prohibition on Transfer ....................................................................................................... 8
ARTICLE 6 DEFAiJI,T AND FORECLOSURE .........................................................................................8
6.1 Remedies ............................................................................................................................. 8
6.2 Divestment of Rights, Tenant at Sufferance ....................................................................... 9
63 Separate Sales ...............:......................................................................................................9
6.4 Remedies Cumulative, Concurrent, and Nonexclusive .....................................................10
6.5 Release of and Resort to Collateral ...................................................................................10
6.6 Waiver of Redemption, Notice, and Marshaling of Assets ...............................................10
6.7 Discontinuance of Proceedings .........................................................................................11
6.8 Application of Proceeds, Deficiency Obligation ............................................................... l l
6.9 Purchase by Beneiiciary ....................................................................................................11
6.10 Disaffirmation of Contracts ............................................................................................... l l
6.11 Defciency Suit .................................................................................................................. l l
ARTICLE7 CONDEMNATION ...............................................................................................................12
ARTICLE 8 SECURITY AGREEMENT ...................................................................................................12
8.1 Security Interest ................................................................................................................12
8.2 Financing Statements ........................................................................................................12
83 Uniform Commercial Code Remedies ..............................................................................12
8.4 No Obligation of the Trustee or Beneficiary .....................................................................12
ARTICLE9 TRUSTEE ..............................................................................................................................13
9.1 No Liability .......................................................................................................................13
i
9.2 Retention of Monies ..........................................................................................................13
93 Successor Trustee ..............................................................................................................13
9.4 Succession Instruments .....................................................................................................13
9.5 Performance of Duties by Lenders ....................................................................................13
ARTICLE10 MISCELLANEOUS .............................................................................................................14
10.1 Survival of Obligations .....................................................................................................14
10.2 Covenants Running with the Land ....................................................................................14
103 Recording and Filing .........................................................................................................14
10.4 Notices ...............................................................................................................................14
10.5 No Waiver .........................................................................................................................14
10.6 Limitation on Effectiveness of Lien ..................................................................................14
10.7 Governing Law ..................................................................................................................14
10.8 Multiple Counterparts and Facsimile and PDF Signatures ...............................................14
10.9 Waiver of Right to Trial by Jury .......................................................................................15
10.10 Entirety ..............................................................................................................................15
EXHIBITS
E�ibit A Legal Description
ii
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
AND UCC FINANCING STATEMENT FOR FIXTURE FILING
STATE OF TEXAS
COUNTY OF DENTON
This DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
AND UCC FINANCING STATEMENT FOR FIXTURE FILING (as amended, restated, or supplemented,
this "Deed of Trust") is executed by SYKES-VAUGHAN INVESTMENTS LLC, a Texas limited liability
company ("Grantor"), to DANIELLE FARNHAM, Trustee (the "Trustee") for the benefit of BBVA
USA, an Alabama banking corporation (`Beneficiary"), and is to be effective as of February 18, 2020.
ARTICLE 1
DEFINITIONS AND TERMS
1.1 Defined Terms. Unless otherwise defined in this Deed of Trust, or unless the context
otherwise requires, each capitalized term used in this Deed of Trust shall have the meaning given such term
in the Credit Agreements (defined below). As used in this Deed of Trust, the following terms shall have
the following meanings:
City means the City of Denton, Texas.
Credit Agreements mean (i) that certain Credit Agreement dated of even date herewith
among Grantor, as borrower, certain affiliates of Grantor from time to time party thereto, and
Beneficiary, as lender, together with all schedules, e�ibits, and annexes thereto, in each case, as
amended, restated, or supplemented from time to time, and (ii) that certain Credit Agreement dated
of even date herewith among U.S. Aviation Group LLC, a Texas limited liability company, as
borrower, certain affiliates of Grantor from time to time party thereto, and Beneficiary, as le�7dcr,
together with all schedules, e�chibits, and annexes thereto, in each case, as amended, restated, or
supplemented from time to time.
Event of Default means an "Event of Default" under, and as defined in, the Credit
Agreements.
Fixtures means (a) all materials, supplies, equipment, apparatus, and other items now or
hereafter attached to, installed on or in the Leased Premises or the Improvements, or which in some
fashion are deemed to be fixtures to the Leased Premises or Improvements under Applicable Law,
other than those owned by tenants under any Lease, and (b) all items of Personal Property to the
extent that the same may be deemed fixtures under Applicable Law.
Ground Lease means that certain Airport Lease Agreement Ordinance No. 2005-020,
between the CITY OF DENTON and GCBSXX, LLC dated January 18, 2005, filed September 15,
2005, recorded under CC# 2005-115663 and 2005-115663 and refiled September 28, 2005,
recorded under CC# 2005-120811, Real Property Records. Denton County, Texas, as amended and
assigned by that certain First Amendment to Airport Lease Agreement between GCBSXX, LLC
and SYKES-VAUGHAN INVESTMENTS, LLC and CITY OF DENTON, TEXAS filed July 24,
2012 recorded under CC# 2012-79581, Real Property Records, Denton County, Texas.
Grantor means the above defined Grantor and any and all subsequent record or equitable
awners of the Mortgaged Property.
Impositions means all real estate and personal property taxes; water, gas, sewer, electricity,
and other utility rates and charges; charges for any easement, license, or agreement maintained for
the benefit of the Mortgaged Property, and all other taYes, standby fees, charges, and assessments
and any interest, costs, or penalties with respect thereto of any kind and or character whatsoever
which at any time before or after the execution of this Deed of Trust may be assessed, levied, or
imposed upon the Mortgaged Property or the ownership, use, occupancy, or enjoyment thereof.
Improvements means all buildings, structures, open parking areas, and other
improvements, and any and all accessions, additions, replacements, substitutions, or alterations
thereof or appurtenances thereto, now or at any time hereafter situated, placed, constructed, or
renovated upon the Leased Premises or any part of the Leased Premises.
Leased Premises means the real estate or any interest therein described in Exhibit A
attached hereto and made a part hereof, together with all Improvements and Fixtures and all rights,
titles, and interests appurtenant thereto.
Lease means (a) any lease, sublease, license, concession, or other agreement (written or
oral, now or hereafter in effect), which grants a possessory interest in and to, or the right to extract
from, mine, occupy, sell or use the Mortgaged Property, and (b) all other agreements, including,
but not limited to, utility contracts, maintenance agreements, and service contracts which in any
way relate to the use, occupancy, operations, maintenance, enjoyment, or ownership of the
Mortgaged Property, save and except any and all leases, subleases, or other agreements pursuant to
which Grantor is granted a possessory interest in the Leased Premises.
Legal Requirements means (a) any and all present and future Applicable Laws respecting
the ownership, use, occupancy, possession, operation, construction, maintenance, alteration, repair,
or reconstruction of the Mortgage Property, (b) Grantor's Organizational Documents, (c) any and
all Leases and other contracts (written or oral) of any nature to which Grantor may be bound, and
(d) any and all restrictions, reservations, conditions, easements, or other covenants or agreements
of record affecting the Mortgaged Property.
Mortgaged Property means all, any portion, or any interest in, the Ground Lease, the
Leased Premises, Improvements, Fixtures, Personal Property, Leases, and Rents, together with (a)
all rights, privileges, tenements, hereditaments, rights of way, easements, appendages, and
appurtenances in anywise appertaining thereto, and all of Grantor's right, title and interest in and
to any streets, ways, alleys, strips, or gores of land adjoining the Leased Premises or any part
therein, (b) all betterments, accessions, additions, appurtenances, substitutions, replacements,
and revisions thereof and thereto and all reversions and remainders therein, (c) all other interest of
every kind and character which Grantor now has or at any time hereafter acquires in and to the
above described and all property which is used or useful in connection therewith, including rights
of ingress and egress, easements, licenses, and all reversionary rights or interests of Grantor with
respect to such property.
Personal Property means all of Grantor's right, title, and interest in and to all tangible and
intangible personal property, whether or not Fixtures, including all equipment, inventory, goods,
consumer goods, accounts, chattel paper, instruments, money, general intangibles, documents,
minerals, crops, and timber which are attached to, installed, placed, or used on or in connection
with, or is acquired for such attachment, installation, placement, or use, or which arises out of the
2
improvement, financing, leasing, operation, or use of, the Ground Lease, the Leased Premises, the
Improvements, Fixtures, or other goods located on the Leased Premises or Improvements, together
with all additions, accessions, accessories, amendments, and modifications thereto, extensions,
renewals, enlargements, and proceeds thereof, substitutions therefor, and income and profits
therefrom.
Rents means all of the rents, revenues, income, proceeds, royalties, profits, and other
benefits paid or payable for using, leasing, licensing, possessing, operating from or in, residing in,
selling, mining, extracting, ar otherwise enjoying or using the Mortgaged Property.
Secured Obligations means (a) the Obligations under and as defined in the Credit
Agreements, including, without limitation, amounts that would become due but for operation of
any applicable provision of Title 11 of the United States Code (including 11 U.S.C. §§ 502 and
506), together with all pre- and post-maturity interest thereon, which shall include, without
limitation, all post-petition interest if Grantor voluntarily or involuntarily files for bankruptcy
protection, (b) all indebtedness, liabilities, and obligations of Grantor arising under this Deed of
Trust, (c) interest accruing on, and reasonable attorneys' fees, court costs, and other costs of
collection reasonably incurred in the collection or enforcement of, any of the indebtedness,
liabilities, or obligations described in clauses (a) and (b) above, and (d) any and all renewals and
extensions of, or amendments to, any of the indebtedness, liabilities, and obligations described in
clauses (a) through (c) above, together with all funds hereafter advanced by Beneficiary to or for
the benefit of Grantor as contemplated by any covenant or provision contained in any Loan
Document in�ltiding this Deed of Trust, it being contemplated that Grantor may hereafter become
further indebted to Beneficiary in further sum or sums. For the avoidance of doubt, the Secured
Obligations shall not include any Excluded Swap Obligation.
1.2 Interpretive Provisions. All words, terms and provisions of the Credit Agreements shall be
applied to this Deed of Trust in the same manner as applied in the Credit Agreements.
ARTICLE 2
GRANT OF LIEN; HABENDUM CLAUSE; ASSIGNMENT
OF LEASES AND RENTS.
2.1 Grant of Lien; Habendum Clause. To secure the full and timely payment of the Secured
Obligations and the full and timely performance and discharge of Grantar's obligations under this Deed of
Trust, Grantor has GRANTED, BARGAINED, SOLD, and CONVEYED, and by these presents does
GRANT, BARGAIN, SELL, and CONVEY unto the Trustee the Mortgaged Property, TO HAVE AND
TO HOLD the Mortgaged Property unto the Trustee, the Trustee's successors in trust, and the Trustee's
assigns forever, in trust with power of sale, and Grantor does hereby bind itself, and its successors, legal
representatives, and assigns to warrant and forever defend the title to the Mortgaged Property unto the
Trustee against every Person whomsoever lawfully claiming or to claim the same or any part thereof.
2.2 Subro�ation. The Trustee and Beneficiary are hereby subrogated to the claims and liens
of all parties whose claims or liens are fully or partially discharged or paid with the proceeds of the Secured
Obligations secured by this Deed of Trust, notwithstanding that such claims or liens may have been
cancelled and satisfied of record.
3
2.3 Assi�nment of Leases and Rents.
(a) Grantor hereby absolutely, irrevocably and unconditionally grants, transfers, and
assigns to Beneficiary all of Grantor's right, title, and interest in and to any and all Leases and
Rents.
(b) Subject to the terms of the Credit Agreements, if an Event of Default has occurred
and is continuing, Beneficiary shall have the right, power, and authority: (i) to notify any and all
tenants and other obligors on Leases that the Leases have been assigned to Beneficiary and that all
Rents are to be paid directly to Beneficiary whether or not Beneficiary has foreclosed or
commenced foreclosure proceedings against the Mortgaged Properiy and whether or not
Beneficiary has taken possession of the Mortgaged Property; (ii) to settle, compromise, or release,
on terms acceptable to Beneficiary, in whole or in part, any Rents and any amounts owing on the
Leases; (iii) to enforce payment of Rents, prosecute any action or proceeding, and to defend legal
proceedings with respect to any and all Rents and Leases; (iv) to extend the time of payment, make
allowances, adjustments, and discounts under the Leases; (v) to enter upon, take possession of, and
operate the Mortgaged Property; (vi) to lease all or any part of the Mortgaged Property; and (vii)
to enforce all other rights of the lessor or sublessor under the Leases.
(c) Subject to the provisions of Section 2.3(d) below granting Grantor a revocable,
limited license, Beneficiary has the right, power, and authority to use and apply any Rents received
hereunder as Beneficiary may in its sole and absolute discretion deem advisable for the payment of
(i) any and all costs and expenses incurred in connection with enforcing or defending the terms of
this Deed of Trust or the rights of Beneficiary hereunder, collecting any Rents, for the operation
and maintenance of the Property, and the payment of all costs and expenses in connection therewith,
and (ii) the Secured Obligations.
(d) Subject to the terms of the Credit Ageements, Grantor shall have a revocable
license to collect and receive the Rents and to retain, use, and enjoy such Rents subject to the terms
and conditions hereo£ Such license may be revoked by Beneficiary, without notice to Grantor,
upon the occurrence of an Event of Default.
(e) Notwithstanding anything herein to the contrary, Beneficiary shall not be obligated
to perform or discharge, and Beneficiary does not undertake to perform or discharge, any
obligation, duty, or liability with respect to the Leases and the Rents under or by reason of this
Deed of Trust and the assignment of Leases and Rents provided for herein. This assignment shall
not operate to place responsibility for the control, care, maintenance, or repair of the Mortgaged
Properly upon Beneficiary or to make Beneficiary responsible or liable for any liabilities or losses
associated with or arising from the Mortgaged Property, including, but not limited to, any waste
committed on the Mortgaged Property by any tenant or other Person, for any dangerous or defective
condition of the Mortgaged Property, or for the acts or omissions of Grantor or any tenant or other
Person in the management, upkeep, repair, or control of the Mortgaged Property.
(fl Texas Property Code Sections 64.001, 64.002, and 64.051-64.062 shall apply to
the assignment of rents and leases provided in the Deed of Trust.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES.
3.1 Deed of Trust Lien. Grantor hereby unconditionally represents and warrants to the
Beneficiary that this Deed of Trust constitutes a valid, subsisting lien on the Ground Lease, the
Improvements, and the Fixtures, and a valid, subsisting security interest in and to the Personal Property and
a valid, subsisting assignment of the Ground Lease, Leases and Rents. Grantor shall make, execute,
acknowledge and deliver all such further or other deeds, documents, instruments, or assurances, and cause
to be done all such further acts as may at any time hereafter be reasonably required by Beneficiary to protect
fully the lien of this Deed of Trust.
3.2 Warrant Title. Grantor is seized of a leasehold interest, in and to the Leased Premises and
hereby warrants to Beneficiary its rights in and under the Ground Lease. Grantor hereby covenants that
Grantor shall preserve such title and the validity and priority of the lien of this Deed of Trust and shall
forever warrant and defend the same to Beneficiary against all lawful claims whatsoever and the claims of
all Persons whomsoever claiming or threatening to claim the same or any part thereof.
ARTICLE 4
AFFIItMATIVE COVENANTS
Grantor acknowledges that certain covenants in the Credit Agreements are applicable to it or shall
be imposed upon it and Grantor covenants and agrees to comply with each of them. Furthermore, Grantar
hereby unconditionally covenants and agrees with Beneficiary as follows:
4.1 Payment of Impositions. Grantor will pay and discharge, or cause to be paid and
discharged, the Impositions and Grantor's obligations to materialmen, mechanics, carriers, warehousemen,
or other like Persons as and when required to be paid pursuant to the terms of the Credit Agreements unless
contested in good faith by appropriate proceedings.
4.2 Repair. Grantor will keep the Mortgaged Properiy in good order and condition and
presenting a good appearance and will make all repairs, replacements, renewals, additions, betterments,
improvements, and alterations thereof and thereto, interior and exterior, structural and nonstructural,
ordinary and extraardinary, foreseen and unforeseen, which are necessary or reasonably appropriate to keep
same in such order and condition.
43 Defense of Title. If the title of the Trustee to, or the interest of Beneficiary in, the
Mortgaged Property or any part thereof, shall be endangered or shall be attacked, directly or indirectly,
Grantor shall, at Grantor's expense, 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. In the event of
Grantor's failure or inability to proceed initially as provided above, the Trustee and Beneficiary or either
of them (whether or not named as parties to legal proceedings with respect thereto) are hereby authorized
and empowered to take, at Grantor's expense, such additional steps as in their reasonable judgment may be
necessary or proper for the defense of any such legal proceedings or the protection of the validity or priority
of this Deed of Trust and the rights, titles, liens and security interests created or evidenced hereby.
4.4 Security and Priority of Advances. This Deed of Trust secures future advances.
Beneficiary may make additional advances from time to time hereafter and each such advance shall be
secured hereby as if made on the date hereof. This Deed of Trust also secures, and the Credit Agreements
evidence, the obligation of Grantor to repay the Secured Obligations and (a) all advances made after the
date hereof with respect to the Mortgaged Property for the payment of real estate taxes, water and sewer
rents, assessments, maintenance charges, insurance premiums or costs incurred for the protection of the
Mortgaged Property and the lien of this Deed of Trust, (b) all costs and expenses incurred by Beneficiary
by reason of an Event of Default hereunder, and (c) all advances made by Beneficiary to enable completion
of construction of improvements to the Mortgaged Property. This Deed of Trust shall constitute a lien on
the Mortgaged Property from the tirne this Deed of Trust is recarded and secures, among other things, all
such advances and expenses, plus interest thereon, regardless of the time when such advances are made or
such expenses are incurred.
4.5 Ground Lease.
(a) Grantor hereby covenants and agrees that Grantor shall (i) pay all rents, additional
rents and other sums required to be paid by Grantor under and pursuant to the provisions of the
Ground Lease as and when the same shall become � ue, (ii) promptly and faithfully observe, perform
and comply with all of the terms, covenants and provisions of the Ground Lease on the part of
Grantar to be observed, performed and complied with, at the times set forth thereir�, and do all
things necessary to preserve unimpaired its rights under the Ground Lease, and (iii) promptly notify
Secured Party of the giving of any written notice by the landlord under the Ground Lease to Grantor
of any default by Grantar in the performance or observance of any of the terms, covenants or
conditions of the Ground Lease on the part of Grantor to be performed or observed and deliver to
Secured Party a true copy of each such notice. Grantor shall not, without the prior written consent
of Secured Party, which consent will not be unreasonably withheld or delayed, surrender the
leasehold estate created by the Ground Lease or terminate or cancel the Ground Lease or modify,
change, supplement, alter or amend the Ground Lease, in any material respect, either orally or in
writing, and Grantor hereby assigns (upon occurrence and during the continuance of an Event of
Default beyond any applicable notice and cure period) to Secured Party, as further security for the
payment of the Secured Obligations and for the performance and observance of the terms,
covenants and conditions of this Deed of Trust, all of the rights, privileges and prerogatives of
Grantor, as tenant under the Ground Lease, to surrender the leasehold estate created by the Ground
Lease or to terminate, cancel, modify, change, supplement, alter or amend the Ground Lease, and
any such surrender of the leasehold estate created by the Ground Lease or termination, cancellation,
modification, change, supplement, alteration or amendment of the Ground Lease w itf�n�it the prior
written consent of Secured Party shall be void and of no force and effect. Grantor shall, within ten
(10) business days after written request by Secured Party, furnish to Secured Party an estoppel
certificate, together with such supporting information and evidence as Secured Party may
reasonably require which is in the possession or control of Grantor, concerning Grantor's due
observance, performance and compliance with the terms, covenants and provisions of the Ground
Lease.
(b) If Grantor shall default beyond any applicable notice and cure period in the Ground
Lease in the performance or observance of any term, covenant or condition of the Ground Lease
on the part of Grantor to be performed or observed, including, without limitation, any default in the
payment of rent, additional rent and other charges and impositions made payable by the tenant
under the Ground Lease, then, in each and every case, without limiting the generality of the other
provisions of this Deed of Trust and without waiving or releasing Grantor from any of its
obligations hereunder, Secured Party shall have the right, but shall be under no obligation, at its
option and without notice, to pay any sums or perform any act or take any action as may be
appropriate to cause the default or defaults to be remedied and all of the terms, covenants and
conditions of the Ground Lease on the part of Grantor to be performed or observed, to the end that
the rights of Grantor in, to and under the Ground Lease shall be kept unimpaired and free from
0
default, even though the existence of such event of default or the nature thereof be questioned or
denied by Grantor or by any party on behalf of Grantor. In any such event, subject to the rights of
tenants, subtenants and other occupants under any leases, Secured Party and any person designated
by Secured Party shall have, and are hereby granted, the right to enter upon the Leased Premises at
any time and from time to time for the purpose of taking any such action. Grantor shall, on demand,
reimburse Secured Party for all advances made and expenses incurred by Secured Party in curing
any such default (including, without limitation, attorneys' fees and disbursements), together with
interest thereon at the Default Rate from the date that an advance is made or expense is incurred to
and including the date the same is paid, and such monies so expended by Secured Party with interest
thereon shall be secured by this Deed of Trust and by all of the other documents securing all or any
part of the indebtedness evidenced by the Credit Agreements. If the landlord under the Ground
Lease shall deliver to Secured Party a copy of any notice of default sent by said landlord to Grantor,
as tenant under the Ground Lease, such notice shall constitute full authority and protection to
Secured Party for any action taken or omitted to be taken by Secured Party, in good faith, in reliance
thereon.
(c) Grantor shall enforce the obligations of the landlord under the Ground Lease to the
end that Grantor may enjoy all of the rights granted to it under the Ground Lease. Grantor will
promptly notify Secured Pariy in writing of any material default by the landlord under the Ground
Lease of which it is aware in the performance or observance of any of the terms, covenants and
conditions on the part of su�h landlord to be performed or observed under the Ground Lease.
(d) Grantor shall give Secured Party prompt notice of the commencement of any
arbitration or appraisal proceeding to which Grantor is a party or of which Grantor has been
otherwise notified in writing concerning the provisions of the Ground Lease. Secured Party shall
have the right to intervene and participate in any such proceeding if such proceeding, if adversely
determined, would be reasonably expected to ha�e a material adverse effect on Grantor or the
Leased Premises, and Grantor shall confer with Secured Party and its attorneys and experts and
cooperate with them to the extent which Secured Party deems reasonably necessary for the
protection of Secured Party. Upon the reasonable request of Secured Party, Grantor will exercise
all rights of arbitration conferred upon it by the Ground Lease. If at any time such proceeding shall
have commenced, Grantor shall be in material default beyond any applicable notice and cure period
as provided in the Ground Lease in the performance or observance of any covenant, condition or
other requirement of the Ground Lease on the part of Grantor to be performed or observed or a
default shall have occurred and is continuing beyond any applicable notice and cure period
hereunder, Secured Party shall have, and is hereby granted the sole and exclusive right to designate
and appoint on behalf of Grantor, the arbitrator or arbitrators, or appraiser, in such proceeding.
ARTICLE 5
NEGATIVE COVENANTS
Grantor acknowledges that certain covenants in the Credit Agreements are applicable to it or shall
be imposed upon it and covenants and agrees to comply with each of them. Furthermore, Grantor hereby
covenants and agrees that:
5.1 Use Violations. Grantor will not use, maintain, operate, or occupy, or allow the use, maintenance,
operation, or occupancy of the Mortgaged Property in any manner which, in case of any of the following
would constitute a Material Adverse Event, (a) violates any Legal Requirement, (b) may be dangerous
unless safeguarded as required by Applicable Law, or (c) constitutes a public or private nuisance.
7
5.2 Prohibition on Transfer. Except as may be permitted by the Credit Agreements, Grantor
will not sell, trade, transfer, assign, exchange, or otherwise dispose of any of the Mortgaged Property.
5.3 Ground Lease. Grantor will not subordinate or consent to the subordination of the Ground
Lease to any mortgage, security deed, lease or other interest on or in the landlord's interest in all or any part
ofthe Property, unless, in each such case, the written consent of Secured Party shall have been first had and
obtained, which consent will not be unreasonably withheld or delayed.
ARTICLE 6
DEFAULT AND FORECLOSURE
6.1 Remedies. If an Event of Default occurs and is continuing, Beneficiary may, by and
through the Trustee or otherwise, exercise any or all of the following rights, remedies and recourses to the
extent permitted by Applicable Law:
(a) Declare the Secured Obligations immediately due and payable in accordance with
the terms of the Credit Agreements whereupon the same shall become immediately due and
payable. Grantor expressly waives any notice of intent to accelerate, notice of acceleration, or any
other notice, presentment, protest, demand or action of any kind or nature whatsoever.
(b) Enter upon the Mortgaged Properiy and take exclusive possession thereof and of
all Grantor's books, records, and accounts relating thereto without notice and without being guilty
of trespass. If Grantor remains in possession of all or any part of the Mortgaged Properly, and
without Beneficiary's prior written consent thereto, Beneficiary may, without notice to Grantor,
invoke any and all legal remedies to dispossess Grantor, including specifically one or more actions
for forcible entry and detainer, trespass to try title, and writ of restitution. Nothing contained in the
foregoing sentence shall, however, be construed to impose any greater obligation or any
prerequisites to acquiring possession of the Mortgaged Property after an Event of Default than
would have existed in the absence of such sentence.
(c) Hold, lease, manage, operate, or otherwise use or permit the use of the Mortgaged
Property, either itself or by other Persons, in such manner, for such time and upon such other terms
as Beneficiary may deem to be prudent and reasonable under the circumstances (making such
repairs thereto and taking any and all other action with reference thereto, from time to time, as
Beneficiary shall deem reasonably necessary for the purpose of maintaining the Mortgaged
Property in its then current condition but not making any material capital improvements thereto)
and apply all Rents and other amounts collected by the Trustee in connection therewith in
accordance with the provisions of Section 6.8 of this Deed of Trust.
(d) Request the Trustee to proceed with foreclosure. Upon the request, the Trustee is
authorized and empowered, and it shall be his special duty, to sell or offer for sale the Mortgaged
Property. The Mortgaged Property shall be sold at public auction in accordance with then
Applicable Law.
(e) At any sale of the Mortgaged Property (i) the Trustee need not have the Mortgaged
Property physically present or have constructive possession of the Mortgaged Property; provided
that, the title to and right of possession of any such Mortgaged Property shall pass to the purchaser
thereof as completely as if the same had been actually present and delivered to purchaser at such
sale; (ii) each conveyance instrument executed by the Trustee shall contain a general warranty of
title binding upon Grantor; (iii) each and every recital contained in any conveyance instrument
:
executed by the Trustee shall constitute prima facie evidence of the truth and accuracy of the
matters recited therein including, appointment of any successor Trustee hereunder, nonpayment of
the Secured Obligations, notice, filing, posting, and conduct of the sale in the manner provided
herein and by Applicable Law; (iv) all prerequisites to the validity of the sale shall be rebuttably
presumed to have been performed; (v) the receipt from the Trustee, or such other party or officer
conducting the sale, shall be sufficient to discharge the purchaser for his purchase money, and no
purchaser or his assigns or personal representatives, shall thereafter be obligated to see to the
application of such purchase money or be in any way answerable for any loss, misapplication, or
non-application thereof; (vii) Grantor shall be completely and irrevocably divested of all of its right,
title, interest, claim, and demand whatsoever, either at law or in equity, in and to the properiy sold,
and such sale shall be a perpetual bar both at law and in equity against Grantor and against all other
persons claiming or to claim the property sold or any part thereof by, through or under Grantor;
and (viii) Beneficiary may be a purchaser at any such sale and may credit the bid against the Secured
Obligations.
(� Subject to the terms of the Credit Agreements, Beneficiary or the Trustee may
make application to a court of competent jurisdiction, as a matter of strict right and without regard
to the adequacy of the Mortgaged Property far the repayment of the Secured Obligations, for
appointment of a receiver of the Mortgaged Property. Any such receiver shall have all the usual
powers and duties of receivers in similar cases, including the full power to sell, rent, maintain, and
otherwise operate the Mortgaged Property upon such terms as may be approved by the court, and
shall apply the Rents in accordance with the provisions of Section 6.8 in this Deed of Trust.
(g) Except as otherwise prohibited by Applicable Law, in the event Beneficiary is the
successful bidder at a foreclosure sale of all or any part of the Mortgaged Property, it shall have the
right to cancel any insurance policy covering the property foreclosed upon and collect any unearned
premiums from said policy.
(h) Exercise any and all other rights, remedies, and recourses granted under the Loan
Documents or now or hereafter existing in equity, at law, by virtue of statute, or otherwise.
6.2 Divestment of Ri�hts, Tenant at Sufferance. After sale of the Mortgaged Properiy, or any
portion thereof, Grantor shall be divested of any and all interest and claim thereto, including any interest or
claim to all insurance policies, bonds, loan commitments, contracts, and other intangible property covered
by this Deed of Trust. Additionally, with respect to the Ground Lease, the Leased Premises, Improvements,
Fixtures, and Personal Property, after a sale of all or any portion thereof, Grantor 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, said purchaser may and
shall have the right, without further notice to Grantor, to go into any justice ofthe peace court in any precinct
or county in which the Leased Premises and Improvements are located and file an action in forcible entry
and detainer or forcible detainer, which action shall lie against Grantor or its assigns or legal representatives
as a tenant at sufferance.
63 Separate Sales. If an Event of Default occurs and is continuing, the Trustee may sell all or
any portion of the 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 Properiy shall not e�aust the power of sale granted in this Deed of Trust, and the Trustee is
specifically empowered to make successive sale or sales under such power until the whole of the Mortgaged
Property shall be sold; and if the proceeds of such sale or sales of less than the whole of such Mortgaged
Property shall be less than the aggregate of the Secured Obligations and the expense of executing this trust,
this Deed of Trust and the lien, security interest and assignment hereof shall remain in full force and effect
L�
as to the unsold portion of the Mortgaged Property just as though no sale or sales had been made; provided
that, Grantor shall never have any right to require the sale or sales of less than the whole of the Mortgaged
Property, but Beneficiary shall have the right, at its sole election, to request the Trustee to sell less than the
whole ofthe Mortgaged Property. As among the various counties in which items ofthe Mortgaged Property
may be situated, sales in such counties may be conducted in any order that the Trustee may deem expedient;
and any one or more of such sales may be conducted in the same month, ar in successive or different
months, as the Trustee may deem expediei�t. If an Event of Default occurs as to nonpayment of part of the
Secured Obligations, Beneficiary shall have the option to proceed as if under a full foreclosure, conducting
the sale as herein provided without declaring the entire Secured Obligations due, and if sale is made because
of default of an installment, or a part of an installment, such sale may be made subject to the unmatured
part of any Note and the Secured Obligations; and such sale, if so made, shall not in any manner affect the
unmatured part of the Secured Obligations but as to such unmatured part, this Deed of Trust shall remain
in full force and effect as though no sale had been made under the provisions of this Deed of Trust. Any
number of sales may be made under this Deed of Trust without e�austing the right of sale for any
unmatured part of the Secured Obligations secured hereby.
6.4 Remedies Cumulative, Concurrent, and Nonexclusive. The Trustee and Beneficiary shall
have all rights, remedies, and recourses granted in the Loan Documents and available at law or equity and
same (a) shall be cumulative and concurrent; (b) may be pursued separately, successively, or concurrently
against Grantor or others obligated under any Note, or against the Mortgaged Property, or against any one
or more of them at the sole discretion of Beneficiary; (c) may be exercised as often as occasion therefor
shall arise, it being agreed by Grantor that the exercise or failure to exercise any of the same shall in no
event be construed as a waiver or release thereof or of any other right, remedy, or recourse; and (d) are
intended to be, and shall be, nonexclusive.
6.5 Release of and Resort to Collateral. Any part of the Mortgaged Property may be released
by Beneficiary in accordance with the Credit Agreements without affecting, subordinating, or releasing the
lien, security interest, and assignment hereof against the remainder of the Mortgaged Property. The lien,
security interest, and other rights granted hereby shall not affect ar be affected by any other security taken
for the Secured Obligations or any part thereof. The taking of additional security or the rearrangement,
extension, or renewal of the Secured Obligations, 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 Secured Obligations secured hereby, or any
part thereof, shall be and remain a first and prior lien.
6.6 Waiver of Redemption, Notice, and Marshaling of Assets. To the fullest extent permitted
by Applicable Law, Grantor hereby irrevocably and unconditionally waives and releases (a) all benefits
that might accrue to Grantor by any present or future Applicable 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) except as may be provided
for under the terms of the Loan Documents, all notices of any Event of Default or of Beneficiary's or the
Trustee's election to exercise or the actual exercise of any right, remedy, or recourse provided for under the
Loan Documents, (c) any right to appraisal or marshaling 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 matters 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 Secured Obligations 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 Secured Obligations 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).
10
6.7 Discontinuance of Proceedin�s. In case Beneficiary shall have proceeded to invoke any
right, remedy, or recourse permitted under the Loan Documents and shall thereafter elect to discontinue or
abandon the same for any reason, Beneficiary shall have the unqualified right to do so, and, in such event,
Grantor and Beneficiary shall be restored to their former positions with respect to the Secured Obligations,
the Loan Documents, the Mortgaged Property, and otherwise and the rights, remedies, recourses, and power
of Beneficiary shall continue as if same had never been invoked.
6.8 Application of Proceeds, Deficiency Obli ag tion. 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 accordance with the Credit Agreements with any surplus to be paid, at the option of Beneficiary
to the payment of any indebtedness or obligation secured by a subordinate deed of trust or security interest
on the Mortgaged Property or to Grantor. Any other party liable on the Secured Obligations shall be liable
for any deficiency remaining in the Secured Obligations subsequent to the sale referenced in this
Section 6.8.
6.9 Purchase bv Benefciarv. To the extent permitted by Applicable Law, Beneficiary shall
have the right to become the purchaser at the sale of the Mortgaged Property under this Deed of Trust and
shall have the right to be credited on the amount of its bid for the Mortgaged Properiy or any part thereof
being sold, all of the Secured Obligations due and owing as of the date of such sale.
6.10 Disaffirmation of Contracts. To the extent permitted by Applicable Law, the purchaser at
any Trustee's ar foreclosure sale hereunder may disaffirm any easement granted or rental, lease, or other
contract made in violation of any provision of this Deed of Trust or the Credit Agreements and may take
immediate possession of the Mortgaged Property free from, and despite the terms of, such grant of easement
or rental, lease, or other contract. With respect to any Lease of real property submitted to and approved by
Beneficiary, Beneficiary agrees that the holding of a foreclosure sale or conveyance in lieu thereof by it
shall not terminate such Lease nor the rights and obligations of a lessee thereunder, so long as such lessee
continues to perform all of its obligations thereunder, including, without limitation, the payment of all rental
payments thereunder.
6.11 Deficienc,��. It is expressly agreed by Grantor that (a) the "fair market value" of the
Mortgaged Property shall be determined as of the foreclosure date in order to enforce a deficiency against
Grantor or any other party liable for repayment of the Secured Obligations, and (b) the term "fair market
value" shall include those matters required by Applicable Law and, to the extent permitted by Applicable
Law, shall also include the additional factors set forth below:
(a) the Mortgaged Property is to be valued "AS IS" and "WITH ALL FAULTS" and
there shall be no assumption of restoration of or refurbishment of improvements, if any, after the
date of the foreclosure;
(b) there shall be an assumption that the purchaser desires to resell the Mortgaged
Property for an all cash sales price promptly (but no later than 12 months) after the foreclosure sale;
(c) an offset to the fair market value of the Mortgaged Property, as determined
hereunder, shall be made by deducting from such value the reasonable estimated closing costs
relating to the sale of the Mortgaged Property, including but not limited to, brokerage commissions,
title policy expenses, t� prorations, escrow fees, and other common charges which are incurred by
a seller of property; and
11
(d) after consideration of the factors required by Applicable Law and those required
above, an additional discount factor shall be calculated based upon the estimated holding costs
associated with maintaining the Mortgaged Property for the estimated time it will take to effectuate
a sale of the Mortgaged Property including, without limitation, utility expenses, taxes and
assessments (to the extent not accounted for in clause (c) above) so that the "fair market value" as
so determined is discounted to be as of the date of the foreclosure sale of the Mortgaged Property.
ARTICLE 7
CONDEMNATION
If the Mortgaged Property, or any part thereof, shall be condemned or otherwise taken for public
or quasi-public use under the power of eminent domain, or be transferred in lieu thereof, all damages ar
other amounts awarded for the taking, or injury to, the Mortgaged Property shall be paid to Beneficiary,
and Beneficiary shall apply and disburse the proceeds as provided in the Credit Agreements.
ARTICLE 8
SECURITY AGREEMENT
8.1 Securitv Interest. This Deed of Trust shall be construed as a Deed of Trust on a leasehold
interest in real property and it shall also constitute and serve as a security agreement on personal property
within the meaning of and shall constitute a first and prior security interest under the Texas Business and
Commerce Code (Article 9- Secured Transactions) with respect to the Personal Property and Fixtures.
Grantor has granted, bargained, conveyed, assigned, transferred, and set over, and by these presents does
grant, bargain, convey, assign, transfer, and set over unto Beneficiary a first and prior security interest in
and to all of Grantor's right, title, and interest in, to, and under the Personal Property and Fixtures to secure
the full and timely payment of the Secured Obligations and the full and timely performance and discharge
of the Grantor's obligations under this Deed of Trust.
8.2 Financin� Statements. Grantor shall execute and deliver to Beneficiary, in Acceptable
Form, such imancing statements and such further assurances as Beneficiary may, from time to time,
consider reasonably necessary to create, perfect, and preserve the security interest herein granted, and
Beneficiary may cause such statements and assurances to be recorded and filed at such times and places as
may be required or appropriate by Applicable Law to so create, perfect, and preserve such security interest.
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 Personal Property. The addresses of Grantor, as Debtor, and
Beneficiary, as Secured Party, are set forth on the cover page of this Deed of Trust.
83 Uniform Commercial Code Remedies. The Trustee and Beneficiary shall have all the
rights, remedies, and recourses with respect to the Personal Property, Fixtures, Leases, and Rents afforded
a secured pariy by the Applicable Law.
8.4 No Obli�ation of the Trustee or BeneficiarX. The assignment and security interest herein
granted shall not be construed to (a) deem or constitute the Trustee or Beneficiary, as trustees in possession
of the Mortgaged Property, (b) obligate the Trustee or Beneficiary to operate or attempt to operate the
Mortgaged Property, or (c) obligate the Trustee or Beneficiary to take any action, incur any expenses, or
perform or discharge any obligation, duty, or liability whatsoever under any of the Leases ar otherwise.
12
ARTICLE 9
TRUSTEE
9.1 No Liabilitv. The Trustee shall not be liable for any error or judgment or act done by the
Trustee or be otherwise responsible or accountable under any circumstances whatsoever other than the
Trustee's own gross negligence, willful misconduct, violation of law or fraud. The Trustee shall not be
personally liable for any damages resulting from entry on the Mortgaged Property by the Trustee or anyone
acting by virtue of the powers granted the Trustee under this Deed of Trust, or far debts contracted or
liability or damages incurred in the management or operation of the Mortgaged Property. The Trustee shall
have the right to rely on any instrument, document, or signature authorizing or supporting any action taken
or proposed to be taken by him hereunder and believed by him in good faith to be genuine. The Trustee
shall be entitled to reimbursement for reasonable expenses incurred in the performance of the Trustee's
duties under this Deed of Trust and to reasonable compensation for services rendered under this Deed of
Trust. Grantor will, from time to time, reimburse the Trustee for and save and hold the Trustee harmless
from and against any and all loss, cost, liability, damage and expense whatsoever incurred in the
performance of the Trustee's duties other than those arising from his own gross negligence, willful
misconduct, violation of law or fraud.
9.2 Retention of Monies. All monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received, but need not be segregated
in any manner from any other monies (except to the extent required by Applicable Law), and the Trustee
shall be under no liability for interest on any monies received hereunder.
9.3 Successor Trustee. The Trustee may resign by the giving of notice of such resignation in
writing to Beneficiary. If the Trustee shall die, resign, or become disqualified from acting in the execution
of this 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 trustee, Beneficiary shall have full power to
appoint a substitute trustee and, if preferred, several substitute trustees in succession who shall succeed to
all the estate, rights, powers and duties of the Trustee without other formality than designating the successor
or substitute Trustee in writing.
9.4 Succession Instruments. Any new Trustee appointed pursuant to any of the provisions of
this Deed of Trust shall, without any further act, deed, or conveyance, become vested with all the estates,
properties, rights, powers, and trusts of its or his or her predecessor in the rights hereunder with like effect
as if originally named as the Trustee herein; but, nevertheless, upon the written request of Beneficiary, or
any acting successor trustee, the Trustee ceasing to act shall execute and deliver an instrument transferring
to such successor trustee, upon the trust herein expressed, all the estates, properties, rights, powers, and
trusts of the Trustee so ceasing to act, and shall duly assign, transfer, and deliver any of the property and
monies held by the Trustee to the successor trustee so appointed.
9.5 Performance of Duties by Lenders. The Trustee may authorize one or more parties to act
on his behalf to perform any ministerial functions required of the Trustee hereunder.
13
ARTICLE 10
MISCELLANEOUS
10.1 Survival of Obli atg ions. All covenants, agreements, representations, and warranties made
by Grantor in this Deed of Trust and the other Loan Documents shall survive the execution and delivery of
this Deed of Trust and the other Loan Documents.
10.2 Covenants Running with the Land. All obligations contained in this Deed of Trust are
intended by the parties to be and shall be construed as covenants running with the real property.
10.3 Recordin� and Filing. Grantor will cause the Loan 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 the Trustee or Beneficiary shall reasonably request and will pay all such recording,
fling, re-recording and refling, taxes, fees, and other charges.
10.4 Notices. Any notice, request, or other communication required or permitted to be given
hereunder shall be given at the addresses and in accordance with the notice provisions set forth in the Credit
Agreements.
10.5 No Waiver. Any failure by the Trustee or Beneficiary to insist, or any election by the
Trustee or Beneficiary, not to insist, upon strict performance by Grantar of any of the terms, provisions, or
conditions of this Deed of Trust shall not be deemed to be a waiver of the same or of any other term,
provision, or condition thereof, and the Trustee or Beneficiary shall have the right at any time ar times
thereafter to insist upon strict performance by Grantor of any and all of such terms, provisions, and
conditions.
10.6 Limitation on Effectiveness of Lien. It is the intention of Grantor and Beneficiary that the
amount of the Secured Obligations secured by this Deed of Trust shall be in, but not in excess of, the
maximum amount permitted by fraudulent conveyance, fraudulent transfer or similar laws applicable as to
Grantor. Accordingly, notwithstanding anything to the contrary contained in this Deed of Trust or any
other agreement or instrument executed in connection with the payment of any of the Secured Obligations,
the amount of the Secured Obligations secured by this Deed of Trust shall be limited to that amount which
after giving effect thereto would not (a) render Grantor insolvent, (b) result in the fair saleable value of the
assets of Grantor being less than the amount required to pay its debts and other liabilities (including
contingent liabilities) as they mature, or (c) leave Grantor with unreasonably small capital to carry out its
business as now conducted and as proposed to be conducted, including its capital needs, as such concepts
described in (a), (b), and (c) herein are determined under Applicable Law, if the obligations of Grantor
hereunder would otherwise be set aside, terminated, annulled or avoided for such reason by a court of
competent jurisdiction in a proceeding actually pending before such court.
10.7 Governing Law. This Deed of Trust must be construed, and its performance enforced,
under Texas law.
10.8 Multiple Counterparts and Facsimile and PDF Signatures. This Deed of Trust may be
executed in any number of counterparts with the same effect as if all signatories had signed the same
document. All counterparts must be construed together to conytitute one and the same instrument. Loan
Documents may be signed and transmitted by facsimile, portable document format (PDF), or other
electronic means, and shall have the same effect as manually-signed originals and shall be binding on all
parties.
14
,'
10.9 Waiver of Right to Trial by JurY. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUIVIENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIl2 RIGHT TO TRIAL BY JURY.
10.10 Entire . TFIIS DEED OF TRUST, THE CREDIT AGREEMENTS, AND THE
OTHER LOAN DOCUlVIENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE
ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
10.11 Non-Mer�er Provisions. In the event that Grantor shall become the owner and holder of
the fee title to the Leased Premises or any other estate, title or interest in the property demised by the Ground
Leases, or any part thereof, causing the leasehold estate created by the Ground Lease to merge into the fee
title to the Leased Premises, the lien of this Deed of Trust shall attach to, cover and be a lien upon such fee
title to the Leased Premises or other acquired estate, title or interest and the same shall thereupon be and
become a part of the Leased Premises with the same force and effect as if specifically encumbered herein.
Grantor agrees, at its sole cost and expense, including, without limitation, payment by Grantor of Secured
Party's reasonable attorneys' fees, to (i) execute any and all documents or instruments which Secured Party
may reasonably require to subject the fee title to the Leased Premises or such other acquired estate, title or
interest to the lien of this Deed of Trust; and (ii) provide a title insurance policy which shall insure that the
lien of this Deed of Trust is a first lien on the fee title to the Leased Premises or such other acquired estate,
title or interest. Furthermore, if an Event of Default occurs and continues beyond any applicable notice and
cure period, Grantor hereby appoints Secured Party its true and lawful attorney-in-fact to execute and
deliver all such instruments and documents in the name and on behalf of Grantor. This power, being
coupled with an interest, shall be irrevocable as long as the Secured Obligations secured hereby remain
unpaid.
[Signature ancl acknowledgement appear on following page.]
15
IN WITNESS WHEREOF, this Deed of Trust is executed on the date set forth in the notary
acknowledgment below, but is to be effective far all purposes as of the date first set forth in the preamble
to this Deed of Trust.
GRANTOR:
SYKES-VAUGHAN INVESTMENTS, LLC,
a Texas limited liability company
:
:
f.�r:r���7���:4I:
COUNTY OF
W.A. Roper Vaughan, Manager
J. Micheal Sykes, Manager
This instrument was acknowledged before me on February _, 2020, by W.A. Roper Vaughan,
Manager, and J. Micheal Sykes, Manager of Sykes-Vaughan Investments LLC, a Texas limited liability
company, on behalf of said company, and for the purpose and consideration herein stated.
Notary Public in and for the
State of Texas
Signature and Acknowledgement Page to Deed of Trust, Assignment of Leases and Rents,
Security Agreement and UCC Financing Statement for Fixture Filing (Tract 2 Leasehold)
EXHiBIT A
TO DEED OF TRUST
LEGAL DESCRIPTION
3 i � i. Y �� � �� N j i. � i }. # l i k�. .
! # �
� � � � R . � � , � � �. � � � � A
l. � � . � � � � � � 77r � �f . � i . } s l.�F � ; � �. � � ♦
� �. � �. � . � ... � . . . � . � ... . � .. _ � . l 1. � � � , �
r i r � sr �r� � •: sa � � . � �"� �
� . � .- � � 1 i � f - � :� � i � � � � :: � if � ;
� �
� 1 1 i � �� . .� s � � � � ; � .. � :� � � ..
� . � � � . � 111 s -. 1 � } A � . �� " .. f. • ... � � 1 i � � . � ..
7 �
� " 1 � � � 1 � � 3 i. a � � � � � ♦ li � _ � 111 �1 � .
�. � ` * � :�. ~ � � � #� w i ~ � t ; � � ��
� i , , � � 1i ti , � i`� 11
� . � � . � i i # 1 �
�. �• i " � � � ��
� � a 1� A �1 1# � b .. � .�
�, � � � � � „ ,f, � . � Ift � : ! "` '
��r, �� � �s �• • � a � � + •
� �� . � , � �,�. • � `�� � � ' �"' �.. �
� � �' '. � �. � •� � _ � `, . # �. s t+�' i.i , �
� ��i t � r
# i•� ' 's" i l t �
� # + t � � i1 �! � ,•�► � ��, .,�� ,�.
�� � . �� ; �� � � � ! : � '�
� #1 � " �' # � � � ;� , �
� ii � "'# : � :� ' � # � i ; i , . �
• � '� � -'�'��� ��'
E�ibit A, Page 1