2010R06-SPV Ventures, LLC Development Corp.RESOLUTION NO. 10 -R -06
A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF
SCHERTZ, TEXAS APPROVING A $150,000 LOAN FROM THE
SCHERTZ ECONOMIC DEVELOPMENT CORPORATION TO SPV
VENTURES, LLC, AUTHORIZING A LOAN AGREEMENT, DEED OF
TRUST, NOTE, AND RELATED DOCUMENTS, AND OTHER MATTERS
IN CONNECTION THEREWITH
WHEREAS, the City Council (the "City Council ") of the City of Schertz (the "City ") has
determined that it is in the best interest of the City to approve a $150,000 loan from the City of
Schertz Economic Development Corporation (the "SEDC ") to SPV Ventures, LLC ( "SPV "),
relating to a new medical office building in the City; now, therefore,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS
THAT:
Section 1. The City Council hereby approves a loan from the SEDC to SPV (i) in the
principal amount of $150,000, (ii) at an interest rate of 0 %, (iii) subordinate to a loan to SPV
from Schertz Bank & Trust, (iv) for a term of the earliest of (x) twenty years, (y) the conveyance
by SPV one hundred percent (100 %) of its interest in the real property or the SPV entity, or (z)
SPV's refinancing of the property in excess of the actual construction costs. In addition, the loan
shall be partially repaid if SPV sells less than one hundred percent (100 %) of its interest in the
property or the SPV entity (the proportionate share of the outstanding indebtedness shall be due
upon the sale of such interest).
Section 2. The City Council hereby authorizes the President of the SEDC to execute
and deliver the Loan Agreement with SPV in substantially the form set forth on Exhibit A,
modified as appropriate to conform to the Schertz Bank & Trust senior loan documents and
approved by the City Attorney, and any related documents.
Section 3. The City Council hereby authorizes the SEDC to accept a Deed of Trust -
Financing Statement - Fixture Filing and a Promissory Note from SPV in substantially the forms
set forth on Exhibit B and Exhibit C, modified as appropriate to conform to the Schertz Bank &
Trust senior loan documents and approved by the City Attorney, and any related documents.
Section 4. The recitals contained in the preamble hereof are hereby found to be true,
and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a
part of the judgment and findings of the City Council.
Section 5. All resolutions, or parts thereof, which are in conflict or inconsistent with
any provision of this Resolution are hereby repealed to the extent of such conflict, and the
provisions of this Resolution shall be and remain controlling as to the matters resolved herein.
Section 6. This Resolution shall be construed and enforced in accordance with the
laws of the State of Texas and the United States of America.
50291021.1
Section 7. If any provision of this Resolution or the application thereof to any person
or circumstance shall be held to be invalid, the remainder of this Resolution and the application
of such provision to other persons and circumstances shall nevertheless be valid, and the City
Council hereby declares that this Resolution would have been enacted without such invalid
provision.
Section 8. It is officially found, determined, and declared that the meeting at which
this Resolution is adopted was open to the public and public notice of the time, place, and subject
matter of the public business to be considered at such meeting, including this Resolution, was
given, all as required by Chapter 551, Texas Government Code, as amended.
Section 9. This Resolution shall be in force and effect from and after its final
passage, and it is so resolved.
PASSED AND ADOPTED, this 2nd day of February, 2010.
CITY OF HERTZ, TEXAS
Mayor
ATTEST:
City Secretary
(CITY SEAL)
50291021.1
U.S. Department of Housing OMB No. 2502 -0265
A. Settlement Statement and Urban Development
D. 1 y PC Ul LUalz
1. ❑ FHA 2. ❑ FmHA 3. El Conv Unins
6. File Number
7. Loan Number
8. Mortgage Ins Case Number
4. ❑ VA 5. ❑ Conv Ins. 6. ❑ Seller Finance
0904282 -16
401. Contract Sales Price
C. Note: This form is furnished to give you a statement ofactual settlement costs. Amounts
"( .o.c.)" were paid outside the closing; they are shown here for informational purposes and are not included in the totals.
D. Name & Address of Borrower E. Name & Address of Seller F. Name & Address of Lender
SPV Ventures, LLC d /b /a Schertz Parkway Schertz Bank & Trust
Ventures, LLC 519 Main Street
P. O. Box 6029 Schertz, TX 78154
San Antonio, TX 78209
G. Property Location
Lot 1, Block 1, SPV L..L.C., in the City of Schertz, Guadalupe County,
TX.
Schertz Parkway
Schertz, TX 78154 I/We hereby certify this to be a
true and certified copy Of the,
J. Summary of Borrower's Transaction
H. Settlement Agent Name
Mission Title, LP
114 West Glenview
San Antonio, TX 78228 Tax ID: 20- 0334421
Place of Settlement 1. Settlement Date
Mission Title, LP 2/3/2010
2117 Pat Booker Road, Suite B Fund:
Universal City, TX 78148
K. Summary of Seller's Transaction
G A t D from Borrower 1 400. Gross Amount Due to Seller
100. ross moun ue
101. Contract Sales Price
401. Contract Sales Price
102. Personal Property
402. Personal Property
103. Settlement Charges to borrower
$23,331.25
403.
104. Payoff to Schertz Bank
$74,826.64
404.
105. Payoff to Schertz Bank
$75,320.44
405.
Adjustments for items paid by seller in advance
Adjustments for items paid by seller in advance
106. City property taxes
406. City property tares
107. County property taxes
407. County property taxes
108. Other Misc. Taxes
408. Other Misc. Taxes
109. School property taxes
409. School property taxes
110. MUD Taxes
410. MUD Taxes
111. HOA Dues
411. HOA Dues
112.
412.
113.
413.
114.
4
14.
415.
115.
116.
416.
120. Gross Amount Due From Borrower
$173,478.33
420. Gross Amount Due to Seller
$0.00
200. Amounts Paid By Or in Behalf Of Borrower
500. Reductions in Amount Due to Seller
201. Deposit or earnest money
501. Excess Deposit
202. Principal amount of new loan(s)
$2,493,975.00
502. Settlement Charges to Seller (line 1400)
203. Existing loan(s) taken subject to
503. Existing Loan(s) Taken Subject to
204. Loan Amount 2nd Lien
$150,000.00
504. Payoff of first mortgage loan
205
505. Payoff of second mortgage loan
206. Construction Proceeds Withheld
($2,493,975.00)
506.
207.
507.
208.
508.
209.
509.
Adjustments for items unpaid by seller
Adjustments for items unpaid by seller
210. City property taxes
510. City property taxes
211. County property takes
511. County property taxes
212. Other Misc. Taxes
512. Other Misc. Taxes
213. School property taxes
513. School property taxes
214. MUD Taxes
514. MUD Taxes
215. HOA Dues
515. HOA Dues
216.
516.
217.
517.
218
518.
File No. 0904282 -16
L. Jeu�ciucu«.ungca
700. Total SalesBroker's Commission based on price $0.00 @ % _ $0.00
Paid From
Borrower's
Funds at
Settlement
-
Paid From
Seller's
Funds at
Settlement
Division of Commission (line 700) as follows:
701. to
702 to
703. Commission Paid at Settlement
$0.00
$0.00
704. The following persons, firms or
to
705. corporation s received a portion
to
706. of the real estate commission amount
to
707. shown above:
to
800. Items Payable in Connection with Loan
801. Loan Origination Fee %
to
802. Loan Discount %
to
803. Appraisal Fee
to
Joseph N. Wolter & Company POC (B) $2,759.00
804. Credit Report
to
805. Lender's Inspection Fee
to
806. Mortgage Insurance Application
to
807. Assumption Fee
to
808. Commitment Fee
to
Schertz Bank & Trust POC (B) $7,770.00
809. Environmental Fee
to
Schertz Bank & Trust
$35.00
810. Architectural Fees (Partial Payment)
to
DeMunbrun Scarnato Associates Inc
$600.00
811. Flood Cert Fee fbo PCI Services
to
Schertz Bank & Trust
$14.00
900. Items Required by Lender To Be Paid in Advance
901. Interest from 2/3/2010 to 3/1/2010
@ $0 /day
902. Mortgage Insurance Premium for months
to
903. Hazard Insurance Premium for years
to
1000. Reserves Deposited With Lender
1001. Hazard insurance
months @ per month
1002. Mortgage insurance
months @ per month
1003. City property taxes
months @ per month
1004. County property taxes
months @ per month
1005. Other Misc. Taxes
months @ per month
1006. School property taxes
months @ per month
1007. MUD Taxes
months @ per month
1008. HOA Dues
months @ per month
1011. Aggregate Adjustment
1100. Title Charges
1101. Settlement or closing fee
to
Mission Title LP W
1102. Abstract or title search
to
Mission Title LP W
1103. Title examination
to
Mission Title LP W
1 104. Title insurance binder
to
Mission Title LP W
1105. Document preparation
to
Law Office of Raul E. Pena
$50.00
1106. Notary fees
to
1107. Attorney's fees
to
Patrick J. Pape
$7,445.00
(includes above items numbers:
1108. Title insurance
to
Mission Title LP W
$14,173.20
j
(includes above items numbers:
)
1 109. Lender's coverage $2,493,975.00/$14,032:20 . 2 "': $150,000.00 / $141.00
1110. Owner's coverage
$0.00 50.00
ANN
1111. Escrow fee
to
Mission Title LP W
$500.00
1112. Courier Service
to
Mission Title LP W
1113. Guaranty Fee
to
Texas Title Insurance Guaranty Assn W
$10.00
1114. Document Download Fee
to
Mission Title LP W
$20.00
1115. Corporation Search Fee
to
Mission Title LP W
$2.05
1200. Government Recording and Transfer Charges
1201. Recording Fees* Deed $28.00 ; Mortgage 5240.00 ; Rel to Texas Recording Service LLC W
$268.00
1202. Misc Recording Fees* Aff $184.00; Misc
to Texas Recording Service LLC W
$184.00
1203. St tax/stamps Deed ; Mortgage
to
1204. Tax certificates
to
E- TaxCertificate.com W
1205. ( *Line 1201/1202 includes delivery fee)
1 . T�� r:1:_ c-
to
to
Cerretnry of State
$30.00
File No. 0904292 -16
BUYER/BORROWER: SELLER:
SPV VENTURES, LLC, a Texas limited liability company,
d /b /a SCHERTZ PARKWAY VENTURES, LLCC� /
B r! '%'2/
SSE M. HELLUMS, President
SETTLEMENT AGENT CERTIFICATION
The HUD -I Settlement Statement which I have prepared is a true and accurate
account of this transaction. I have c ds to be disbursed in
or wit thiA/7 "
Settlement Agent Date
Warning: It is a crime to knowingly make false statements to the United
States on this or any other similar form. Penalties upon conviction can
include a fine and imprisonment. For details see: Title 18 U.S. Code Section
1001 and Section 1010.
Previous Editions are Obsolete Page 3 form HUD -1 (3/86) mmmnwmm�
Handbook 4305.2
ZNOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU
MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION
FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY
BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL
SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
DEED OF TRUST — FINANCING STATEMENT — FIXTURE FILING
( "Deed of Trust ")
THE STATE OF TEXAS
KNOW ALL PERSONS BY THESE PRESENTS
COUNTY OF GUADALUPE §
Effective Date: F4?-i6 r- Li `( , 2010
Grantor: SPV Ventures, LLC, a Texas limited liability company (d /b /a Schertz
Parkway Ventures, LLC)
Grantor's Address: 16161 College Oak, Suite 100
San Antonio, Texas 78249
UWe hereby certify this to_b
M.
2true a d c ified y o the
Trustee: I Q� sown ,
Trustee's Address: 300 Convent Street, Suite 2200
San Antonio, Texas 78205
Beneficiary: City of Schertz Economic Development Corporation
Beneficiary's Address: 1400 Schertz Parkway
Schertz, Texas 78154
Promissory Note secured by this instrument:
Effective Date of the Note:
Maker:
Payee:
Original Principal Amount:
r +v! OL '2010
Grantor
Beneficiary
ONE HUNDRED AND FIFTY THOUSAND AND NO /100
DOLLARS ($150,000)
Final Scheduled Payment Date: Twenty (20) years after the Effective Date of the Note or
upon such earlier time as Grantor either (1)
sells, demises, or otherwise conveys one hundred
percent (100 %) of its interest in the Property, or
(2) refinances the Property in excess of the actual
construction costs. Further, in the event that
Grantor sells less than one hundred percent (100 %)
of its interest in the Property, the proportionate share
of the outstanding Indebtedness hereunder shall
50243774.1
be due upon the sale of such interest.
Land: That certain real property located in Guadalupe County, State of Texas, more
particularly described on Exhibit "A" attached hereto and incorporated herein for
all purposes.
Grantor, for the purpose of securing the Indebtedness hereinafter described, and in consideration
of the sum of TEN AND NO /100 DOLLARS ($10.00) to Grantor in hand paid by the Trustee, the receipt
and adequacy of which consideration is hereby acknowledged by Grantor, and for the further
consideration of the uses, purposes, and trusts hereinafter set forth, has GRANTED, SOLD, AND
CONVEYED, and by these presents does GRANT, SELL, AND CONVEY unto Trustee and his substitutes
or successors as trustee hereunder, for the benefit of Beneficiary, all of the following described Property:
The Property shall include the foregoing described Land, together with all fixtures and
improvements now or hereafter existing or placed thereon, all rights, privileges, interests, and common
elements pertaining thereto, all appurtenant permits pertaining to the use of the real property, all vacated
alleys and streets abutting the Land and the rights of Grantor with respect to any unvacated, abutting
alleys or streets, and all easements, minerals, mineral rights, water rights, air rights, and all other
appurtenances and incidents of ownership pertaining to such above - described Land and other real
property. The Property also includes all other property and interests described in Section 8.6 below.
This conveyance is made subject to all validly existing encumbrances, conditions, and restrictions,
relating to the Property, reflected in the Official Public Records of Guadalupe County, Texas, as of the
date of this Deed of Trust (the "Permitted Exceptions ").
TO HAVE AND TO HOLD the Property unto the said named Trustee, and his substitutes and
successors as trustee hereunder, and his assigns forever. Grantor does hereby bind himself, and his
heirs, executors, administrators, representatives, successors, and assigns to warrant and forever defend
the Property unto the Trustee, and his substitutes or successors as trustee hereunder, and his assigns
forever, against the claim or claims of all persons claiming or to claim the same or any part thereof.
The following terms and conditions apply to and are part of this Deed of Trust and constitute covenants
and agreements of Grantor:
ARTICLE 1
Indebtedness.
1.1 This conveyance is made in trust to secure payment of all of the following obligations
(collectively hereinafter, the "Indebtedness "):
(a) The above - described promissory note, all principal, interest, and other lawful
charges thereon, and all (if any) renewals, extensions, and modifications thereof (collectively, the "Note ").
(b) All other obligations of Grantor to Trustee or the Beneficiary arising hereunder or
under any other document, instrument, or agreement given in whole or in part to further secure the Note
or evidence the loan or extension of credit represented by the Note.
(c) All other obligations as set forth at Section 12.3, below (the "all other debt"
clause).
1.2 The liens of this Deed of Trust are expressly subordinate and inferior to the liens affecting
the Property given to secure the payment of that certain Promissory Note, dated 2010,
with an original principal amount of and _ /100
Dollars ($ ) payable to Schertz Bank & Trust, (the "First Lien Note ") and
secured by that certain Deed of Trust executed by Grantor and filed in the Official Public Records of
50243774.1 2
Guadalupe County, Texas (the "First Lien Deed of Trust ").
ARTICLE 2
2. Grantor warrants represents, covenants, and agrees as follows:
2.1 That Grantor is lawfully seized of the Property and has the right to convey the same.
2.2 That the Property is free from all liens and encumbrances, except for the First Lien Deed
of Trust described in Section 1.2 above and any other lien or encumbrance being part of the Permitted
Exceptions.
2.3 That Grantor shall protect the title and possession of the Property and pay when due all
taxes and assessments now existing or hereafter levied or assessed upon the Property, or the interest
therein created by this Deed of Trust; and he shall preserve and maintain the lien hereby created as a first
and prior lien on the Property, subject only to any other liens held by or for the benefit of Beneficiary
(unless the lien hereby created is herein specifically designated to be subordinate to one or more prior
liens, in which case, the lien hereby created shall, at all times, be prior and superior to all other liens save
and except such specifically designated liens securing the principal amount(s) herein indicated, with
interest and related costs thereon, only).
2.4 That Grantor shall improve the Property or, at a minimum, keep the improvements and
fixtures on the Property in good repair and condition, and shall not permit or commit any waste thereof;
and Grantor shall improve or keep said improvements maintained as necessary so as not to impair the
insurance carried thereon.
2.5 That Grantor shall insure and keep insured all improvements and fixtures on the Property
against loss or damage by fire, windstorm, and other normal casualties, and any other hazard or hazards,
as may be reasonably required from time to time by Beneficiary, so long as the Indebtedness remains
outstanding, to the extent of the full insurable value of said improvements and fixtures, in such form and
with such insurance company or companies as may be approved by Beneficiary; he shall deliver to
Beneficiary the policies of such insurance naming Beneficiary as additional insured and /or loss payee; he
shall deliver renewals of such policies to Beneficiary at least ten (10) days before any such insurance
policies shall expire; and he shall deliver any proceeds received under such policies to Beneficiary, subject
to the rights of the holder of the First Lien Deed of Trust. Grantor shall provide Beneficiary with certificates
of insurance pertaining to notice of cancellation. Any proceeds which Beneficiary may receive under any
such policy, or policies, may be applied by Beneficiary, at his option, to reduce the Indebtedness hereby
secured (either then matured or accrued or, with respect to principal, to mature in the future), and in such
order as Beneficiary may elect, but if no Event of Default, or event that but for notice or opportunity to cure
would be an Event of Default, has occurred and is continuing Beneficiary will permit Grantor to use said
proceeds to repair or replace all improvements and fixtures damaged or destroyed and covered by said
policy or policies under such reasonable terms and conditions as Beneficiary may impose to assure
prompt repair, replacement, or restoration of the Property. In the event that because of casualty loss,
condemnation, or otherwise the Property is reduced in value or taken and not restored, Beneficiary may
terminate any right of Grantor or any other primary obligor on the Indebtedness described in Article 1 to
receive any further advances on or under such Indebtedness or the loan or extension of credit evidenced
thereby.
TEXAS FINANCE CODE SECTION 307.052. COLLATERAL PROTECTION INSURANCE
NOTICE: (A) GRANTOR IS REQUIRED TO [1] KEEP THE PROPERTY INSURED AGAINST DAMAGE
IN THE AMOUNT BENEFICIARY HEREIN SPECIFIES; [2] PURCHASE THE INSURANCE FROM AN
INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE STATE OF TEXAS OR AN ELIGIBLE
SURPLUS LINES INSURER; AND [3] NAME BENEFICIARY AS THE PERSON TO BE PAID UNDER
THE POLICY IN THE EVENT OF A LOSS; (B) GRANTOR MUST, IF REQUIRED BY BENEFICIARY,
DELIVER TO BENEFICIARY A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF
PREMIUMS; AND (C) IF GRANTOR FAILS TO MEET ANY REQUIREMENT LISTED IN SECTIONS (A)
50243774.1 3
OR (B) OF THIS PARAGRAPH, BENEFICIARY MAY OBTAIN COLLATERAL PROTECTION
INSURANCE ON BEHALF OF GRANTOR AT THE GRANTOR'S EXPENSE.
2.6 In the event Grantor shall fail to keep the improvements and fixtures on the Property in
good repair and condition, or to pay promptly when due all taxes and assessments, as aforesaid, or to
preserve the priority of the lien of this Deed of Trust on the Property, or to keep the improvements and
fixtures insured, as aforesaid, or to deliver the policies of insurance or the renewals thereof to Beneficiary,
as aforesaid, then Beneficiary may, at his option, but without being required to do so, make such repairs,
pay such taxes and assessments, purchase any tax title thereon, remove any prior liens, and prosecute or
defend any suits in relation to the preservation of the priority of the lien of this Deed of Trust on the
Property, or insure and keep insured the improvements and fixtures thereon in an amount not to exceed
that above stipulated; any sums that may be so paid out by Beneficiary and all sums paid for insurance
premiums, as aforesaid, including the costs, expenses, and attorneys' fees paid in any suit affecting the
Property when necessary to protect the Property or the lien hereof shall bear interest from the dates of
such payments at the rate of eighteen percent (18 %) per annum (but not to exceed the highest lawful rate)
and shall be paid by Grantor to Beneficiary upon demand, at the Beneficiary's main business office (or
elsewhere as Beneficiary may designate) and shall be deemed a part of the Indebtedness and
recoverable as such in all respects.
2.7 Beneficiary may, at such time or times as Beneficiary may desire, acting through one or
more agents, go upon the Property for the purpose of testing, inspecting, appraising, or repairing the
Property or determining Grantor's compliance with this Deed of Trust; provided however, in no event shall
Beneficiary be required to so act, nor shall Beneficiary have any duty whatsoever to report any
deficiencies, defects, or other matters learned by Beneficiary to Grantor or any other person, such rights
herein in this section granted being for the purposes of assisting Beneficiary in preserving and protecting
his collateral for the Indebtedness; provided further, in no event shall such rights herein in this section
granted be exercised in any manner to commit a breach of peace or other unlawful act, and such grant is
so limited, but Grantor to the maximum lawful extent hereby authorizes Beneficiary's entry onto and into
the Property for the above - described limited purposes.
2.8 Grantor shall not suffer or permit any other lien, assignment, or security interest to exist
against the Property except (i) liens, assignments, and security interests in favor of Beneficiary; (ii) liens
arising by operation of law securing debts not yet due and payable; and (iii) the liens, assignments, and
security interests related to the First Lien Deed of Trust.
2.9 Grantor expressly covenants, stipulates and agrees to timely pay all installments of
principal and interest due on the First Lien Note prior to the delinquency with respect to any such
installments and to perform and observe all covenants contained in the First Lien Deed of Trust. Grantor
shall provide immediate notice to Beneficiary of any notice or claim of default by the holder of the First
Lien Deed of Trust.
ARTICLE 3
3. Default.
3.1 Upon or following any Event of Default (as defined in Article 10) and subject to the rights
of the holder of the First Lien Deed of Trust, Beneficiary may elect to declare all or any part of the entire
unpaid principal portion of the Indebtedness hereby secured, all earned and unpaid interest accrued
thereon, and all other earned and unpaid obligations hereby secured immediately due and payable. Upon
default in the payment of said Indebtedness (or any part thereof) as and when due or so declared due, it
shall thereupon, or at any time thereafter, be the duty of the Trustee, at the request of Beneficiary (which
request is hereby conclusively presumed), to enforce this trust. Trustee shall advertise the sale of the
Property, then subject to the lien hereof, for at least twenty -one (21) days preceding the date of sale by
posting written or printed notice thereof at the courthouse door of the county where the Land is situated
and by filing a copy of said notice with the county clerk of said county, which notice may be posted and
50243774.1 4
filed by the Trustee acting, or by any person acting for him; and, the Beneficiary or Trustee shall at least
twenty -one (21) days preceding the date of sale, serve 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 notice, enclosed in a postpaid wrapper, properly
addressed to such debtor at debtor's most recent address as shown by the records of Beneficiary, in a
post office or official depository under the care and custody of the United States Postal Service; such
notices shall include such information as is required by applicable law and such other information as the
Trustee or Beneficiary may elect to include. The Trustee shall then sell the Property, then subject to the
lien hereof, at public auction in accordance with such notice at the county courthouse of said county where
the Land is situated (provided where the Land is in more than one county, the notice to be posted and filed
as herein provided shall be posted at the courthouse door of each of such counties where the Land is
situated, and shall be filed with county clerk of each such county and said Property may be sold at the
county courthouse of any one of such counties, and the notices so posted and filed shall designate the
county where the Property will be sold), on the first Tuesday in any month between the hours of ten o'clock
A.M. and four o'clock P.M., to the highest bidder for cash, selling all of the Property as an entirety or in
such parcels as the Trustee acting may elect, and make due conveyance to the purchaser or purchasers,
with general warranty binding Grantor, his heirs, successors, and assigns forever. The sale shall take
place at the area of the county courthouse designated in the manner required by Section 51.002(a), Texas
Property Code, as amended, or any then applicable successor statute thereto; the sale shall begin at the
time stated in the notice of sale or not later than three (3) hours after that time, or at such other time as is
required by applicable law. Out of the money arising from such sale, the Trustee acting shall pay first all
the expenses of advertising the sale and making the conveyance, including a commission of five percent
(5 %) to himself, which commission Grantor stipulates is reasonable and which commission shall be due
and owing in addition to the attorneys' fees provided for in the Indebtedness, and then to Beneficiary the
full amount of principal, interest, attorneys' fees, and other charges due and unpaid on said Indebtedness,
rendering the balance of the sales price, if any, to Grantor, his heirs or assigns, or to whomsoever shall be
legally entitled thereto. The recitals in the conveyance to the purchaser or purchasers shall be full and
conclusive evidence of the truth of the matters therein stated, and all prerequisites to said sale shall be
presumed to have been performed, and such sale and conveyance shall be conclusive against Grantor,
his heirs, successors, and assigns.
3.2 At Beneficiary's option, Beneficiary shall be entitled to send a notice to Grantor at least ten
(10) days prior to the scheduled foreclosure sale, and in the same manner set out above for notices to
debtors, setting out the "fair market value" of the Property (or, if less than all, then that portion to be sold);
the term "fair market value" is intended to have the meaning assigned by Section 51.003, Texas Property
Code, as amended. In the event Grantor does not present credible evidence to Beneficiary prior to the
foreclosure sale that said "fair market value" is incorrect, the price so bid for the Property at foreclosure
shall be presumed to be the "fair market value" of the Property for all purposes, and shall be deemed
admitted as the "fair market value" by the Grantor and its principal who signs this Deed of Trust for the
Grantor.
3.3 Notwithstanding any other provision of this Deed of Trust, if Beneficiary and Trustee
comply with the requirements of Section 51.002, Texas Property Code, as amended, or any successor
provisions of Texas statutes, no further compliance or act by them under this Article 3 (or its sections)
shall be required.
3.4 In the event a foreclosure hereunder should be commenced by the Trustee, Beneficiary
may at any time before the sale of said Property direct the Trustee to abandon the sale, and may then
institute suit for the collection of all Indebtedness then due (or any part thereof) and /or for the foreclosure
of this Deed of Trust lien. If Beneficiary should institute a suit for the collection of all or any part of
Indebtedness and /or for a foreclosure of this Deed of Trust lien, it may at any time before the entry of a
final judgment in said suit dismiss the same or amend it so as to no longer seek judicial foreclosure, and
require the Trustee to sell the Property in accordance with the provisions of this Deed of Trust. Beneficiary
may, at any time, whether or not non judicial foreclosure hereunder has commenced or is proceeding or
has been concluded, commence or pursue a suit on the Indebtedness then due or any deficiency without
seeking judicial foreclosure of the lien hereby created.
50243774.1 5
3.5 Beneficiary shall have the right to purchase at any sale of the Property (or any part
thereof), being the highest bidder, and to have the amount for which such Property (or any part thereof) is
sold credited on the Indebtedness then owing.
3.6 References to the Trustee include any duly appointed substitute trustee hereunder, and
may be one or more persons if so designed by this Deed of Trust or any subsequent appointment by
Beneficiary; in such event, either or any of such Trustees may act in accordance with this instrument
without the joinder of the other designated Trustee.
3.7 Beneficiary, in any event and at any time (whether or not an Event of Default has occurred
or the foreclosure process has been commenced), is hereby authorized to appoint a substitute trustee, or
a successor trustee, to act instead of the Trustee named herein (or subsequently appointed) without other
formality than the designation in writing of a substitute or successor trustee. The authority hereby
conferred shall extend to the appointment of other successor and substitute trustees successively until the
Indebtedness hereby secured has been paid in full, or until said Property is sold hereunder, and each
substitute and successor trustee shall succeed to all of the rights and powers of the original Trustee
named herein. Any requirement that such appointment be recorded in any real property records is, to the
extent not prohibited by applicable law, hereby waived by Grantor.
3.8 In the event any sale is made of the Property, or any portion thereof, under the terms of
this Deed of Trust, Grantor, his heirs, successors, and assigns, shall forthwith upon the making of such
sale surrender and deliver possession of the Property so sold to the purchaser at such sale, and in the
event of their failure to do so they shall thereupon from and after the making of such sale be and continue
as tenants at will of such purchaser, and in the event of their failure to surrender possession of said
Property upon demand, the purchaser, or his heirs, successors, or assigns, shall be entitled to institute
and maintain an action for forcible detainer of said Property in the justice of the peace court in the justice
precinct in which such Property, or any part thereof, is situated, or in any other court of competent
jurisdiction.
3.9 At Beneficiary's request, Trustee shall advertise or sell less than all of the Property, by
sales in tracts or parcels, or by sales of personal property under provisions of the Uniform Commercial
Code, or in any other lawful manner. In such cases, this Deed of Trust and the power of sale herein
contained and the security interests or assignments herein created, as applicable, shall continue in full
force and effect as to the unsold Property, for one or more additional sales, until this Deed of Trust is
released.
3.10 Should the Indebtedness, or any part thereof, be secured by a vendor's lien or other lien,
then said vendor's lien or other lien may be enforced separately, in accordance with applicable law, upon
the occurrence of any Event of Default, at Beneficiary's election.
3.11 Except as prohibited by law: GRANTOR HEREBY INDEMNIFIES AND HOLDS
TRUSTEE AND BENEFICIARY HARMLESS FROM AND AGAINST ANY COST, EXPENSE, CLAIM, OR
LIABILITY WHATSOEVER, INCURRED OR TO BE INCURRED BY TRUSTEE ACTING OR
PURPORTING TO ACT AS TRUSTEE HEREUNDER, SAVE AND EXCEPT FOR TRUSTEE'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT; GRANTOR AGREES THAT GRANTOR HAS
INDEMNIFIED TRUSTEE FOR TRUSTEE'S OWN NEGLIGENCE. GRANTOR AGREES AND
COVENANTS THAT, WITHOUT NECESSARY LIMITATION, TRUSTEE MAY BE AN OFFICER,
DIRECTOR, AGENT, ATTORNEY OF, OR PRINCIPAL IN BENEFICIARY.
3.12 The Trustee may set reasonable conditions for conducting the public sale by Section
51 0075 Texas Property Code or any successor provision(s) of Texas statutes.
Without limitation of the foregoing:
A. To the extent allowed by law, in the event that, at any sale, a bidder whose bid is the highest
50243774.1 6
shall request an opportunity to obtain cash, the Trustee may recess such sale or delay final acceptance of
such bid, for a reasonable time to allow said bidder to obtain cash and Trustee shall announce such
recess and the time at which the sale shall resume; at such appointed time, the Trustee may conclude the
sale without the necessity to reopen bidding if the bidder requesting the recess shall then present such
cash bid price to the Trustee, otherwise the Trustee may, at his election, either reopen the bidding (and
exclude the defaulting bidder) or without reopening bidding accept the second highest bid for cash
previously made, or Trustee may take such other action as is legally required or permitted.
B. The requirement that a bid shall be payable in cash shall be deemed satisfied if payment is
made in the legal tender of the United States of America or by such other commonly recognized cash
equivalent, as Trustee, in his reasonable discretion, may deem acceptable.
C. In the event that the Trustee is required by law to take any other or different action, the
Trustee may so act.
D. The Grantor agrees that the Trustee and the Beneficiary may delay notice, posting, and /or
sale, and modify terms of sale (to the extent permitted by statute) as may be necessary to comply with any
(if any) requirement of applicable law or covenants affecting the Property.
3.13 The duties of the Trustee under this Deed of Trust are limited to exercising the power of sale
in accordance with this Deed of Trust and applicable law.
ARTICLE 4
4. Releases and Extensions: Special Applications: Waivers: Other Security; Other Documents.
4.1 The lien hereby created shall take precedence over and be a prior lien to any other lien of
any character whether vendor's, materialmen's, or mechanic's lien, hereafter created on the Property. In
the event the proceeds of the Indebtedness secured hereby are used to pay off and satisfy the First Lien
Deed of Trust or any liens heretofore existing on said Property or any part thereof, then Beneficiary is, and
shall be, subrogated to all of the rights, powers, equities, liens, and remedies of the holders of the
indebtedness so paid.
4.2 Any extension, or extensions, may be made of the time of payment of all, or any part, of
the Indebtedness secured hereby, and that any part of the Property may be released from this lien without
altering or affecting the priority of the lien created by this Deed of Trust, nor shall any such actions
advance the lien priority of, or create a priority over this lien of, any junior encumbrancer, mortgagee,
purchaser, or any person acquiring an interest in the Property hereby conveyed, or any part thereof. It is
the intention of the parties hereto to preserve this lien on the Property superior to any other liens (except
as herein otherwise specifically provided) that now exist or may hereafter exist, or that may be fixed,
given, or imposed by law notwithstanding any such extension of the time of payment, or the release of a
portion of said Property from this lien. In the event that for any reason the reduction of or repayment of
any part of the Indebtedness has the effect of, or Beneficiary has a good faith belief that such would have
the effect of, adversely affecting the validity of the lien of this instrument, then Beneficiary at its option may
elect to curtail or cease any further advances or undertakings to be secured hereby.
4.3 In the event any portion of the Indebtedness hereinabove described cannot be lawfully
secured by this Deed of Trust lien on said Property, it is agreed that the first payments made on said
Indebtedness shall be deemed applied to the discharge of that portion of said Indebtedness.
4.4 Except as provided in the Note and in Article 10 below, unless (and then to the extent not)
prohibited by applicable law, the Grantor, and each surety, endorser, guarantor, and other person liable or
to become liable for payment of any of the Indebtedness:
(i) waive: opportunity to cure breach or default; grace; all notices, demands, and
50243774.1 7
presentments for payment; all notices of dishonor, non - payment, acceleration of maturity,
or intention to accelerate maturity; protest; dishonor; all other notices whatsoever; and
diligence in taking any action to collect amounts secured hereunder or in the handling of
any collateral securing the Indebtedness at any time; and
(ii) consent and agree (without notice of any of the following): to any substitution,
subordination, exchange, or release of any security for the Indebtedness or the release of
any party primarily or secondarily liable on the Indebtedness; that the Beneficiary shall not
be required first to institute suit or exhaust his remedies against the Grantor or others
liable or to become liable on the Indebtedness or to enforce his rights against them or any
security therefor; and to any extension, renewal, rearrangement, or postponement of the
time or manner of payment of the Indebtedness and to any other indulgence with respect
hereto or thereto. Grantor waives any right of redemption.
Notwithstanding any other provision in this instrument, or in any other document,
instrument, or agreement given to evidence or secure any of the Indebtedness, notice required under
Section 51.002(d), Texas Property Code is not waived to the extent, but only to the extent, applicable
hereto, unless otherwise permitted by applicable law.
4.5 The Indebtedness (or any part thereof) may be secured by other guaranties, sureties,
collateral, assignments, contracts, or agreements than as evidenced herein. Acceptance or taking hereof
or thereof, release or partial release, discharge, modification, extension, or subordination hereof or thereof
or impairment hereof or thereof, shall in no manner reduce, release, affect, or impair remaining security,
and Beneficiary may pursue and recover upon his rights or remedies hereunder or thereunder in such
order as he may elect in his sole discretion. Marshalling of assets is waived.
4.6 Grantor shall execute and deliver to Beneficiary, or obtain and deliver to Beneficiary, at
Grantor's sole cost and expense, such other documents, instruments, agreements, and things as
Beneficiary may reasonably request of Grantor to preserve, protect, enforce, maintain, and defend the
liens hereby created or the rights in Beneficiary hereby conferred.
4.7 Environmental and Other Legal Matters. Subject only to any matters, if any, specifically
disclosed in any written environmental reports pertaining to the Property delivered by or on behalf of
Grantor to Beneficiary prior to the date of this Deed of Trust, Grantor warrants and represents (to the best
of its knowledge) and covenants (as to future use) that the Property, any past or present use of the
Property, and any existing or future development or use of the Property, do not and will not violate any
applicable law, statute, ordinance, rule, regulation, resolution, or order, or any restrictive covenant or deed
restriction or other contract or agreement affecting the Property, including, without limitation, any
applicable zoning ordinance or building code (hereinafter sometimes collectively called "Applicable
Laws "), including, without limitation, any statutes, regulations, or governmental orders pertaining to health
or the environment (hereinafter sometimes collectively called "Applicable Environmental Laws "), including
without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended ( "CERCLA "), the Resource Conservation and Recovery Act of 1976, as amended ( "RCRA '),
the Texas Water Code, and the Texas Solid Waste Disposal Act. GRANTOR AGREES TO INDEMNIFY
AND HOLD BENEFICIARY AND TRUSTEE HARMLESS FROM AND AGAINST AND TO REIMBURSE
BENEFICIARY AND TRUSTEE WITH RESPECT TO, ANY AND ALL CLAIMS, DEMANDS, CAUSES OF
ACTION, LOSS, DAMAGE, LIABILITIES, DEMANDS FOR REMEDIAL ACTIONS, REMEDIAL
OBLIGATIONS, COSTS, AND EXPENSES (INCLUDING ATTORNEYS' FEES AND COURT COSTS)
OF ANY AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, FIXED OR CONTINGENT,
ASSERTED AGAINST OR INCURRED BY BENEFICIARY OR TRUSTEE OR ANY SUCCESSORS OR
ASSIGNS AT ANY TIME BY REASON OF, CONNECTED WITH, OR ARISING OUT OF THE
PROPERTY OR ANY PRIOR, PRESENT, OR FUTURE USE OF OR CONDITION ON THE PROPERTY,
INCLUDING, WITHOUT LIMITATION, ANY VIOLATIONS OF OR CLAIMS UNDER ANY APPLICABLE
LAWS INCLUDING APPLICABLE ENVIRONMENTAL LAWS. THIS INDEMNITY IS A CONTRACTUAL
AGREEMENT THAT SHALL SURVIVE REPAYMENT OF THE INDEBTEDNESS, FORECLOSURE, OR
RELEASE OF THE DEED OF TRUST LIEN, JUDICIAL SALE OF THE PROPERTY, OR RECEIPT OF
50243774.1 8
THE PROPERTY OR ANY PART THEREOF BY BENEFICIARY OR ITS SUCCESSORS OR ASSIGNS
UNDER A DEED IN LIEU OF FORECLOSURE. THIS INDEMNITY SHALL PERTAIN TO ANY MATTER
INDEMNIFIED AGAINST ARISING IN WHOLE OR IN PART PRIOR TO THE TIME THAT THE
INDEBTEDNESS HAS BEEN REPAID IN FULL AND FINALLY AND BENEFICIARY NO LONGER HAS
ANY LIEN OR SECURITY INTEREST ON ANY PART OF THE PROPERTY. THIS INDEMNITY SHALL
RUN IN FAVOR OF AND SHALL BENEFIT BENEFICIARY AND TRUSTEE OR THEIR SUCCESSORS
OR ASSIGNS AND ANY PURCHASER OF THE PROPERTY OR ANY PART THEREOF FROM
BENEFICIARY OR TRUSTEE OR THEIR SUCCESSORS OR ASSIGNS OR UNDER ANY
FORECLOSURE SALE OR UNDER ANY DEED IN LIEU OF FORECLOSURE. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THIS INDEMNITY SHALL SURVIVE THE REPAYMENT OF THE
INDEBETEDNESS The Grantor on the request of any governmental agency or at the reasonable request
of the Beneficiary shall conduct such assessments or remedial work as may be necessary or prudent to
determine the existence or non - existence of, and extent of, or the disposition, leakage, migration, or
occurrence of any toxic or hazardous substance or waste, in, about, over, or under the Property or any
part thereof, and effect a lawful remediation thereof if necessary to comply with Applicable Laws, and shall
commence and complete any such actions with diligence and at the Grantor's sole expense. Any such
studies or reports on such assessment or remediation shall be promptly delivered in their entirety to the
Beneficiary. Without limitation of the foregoing, should the Beneficiary have any reasonable belief that any
toxic or hazardous waste or substance exists on, in, under, or about the Property, or any part thereof, or
should the Beneficiary contemplate foreclosure of its liens or security interests against the Property or any
part thereof, or otherwise have made or contemplate making a demand for possession of the Property or
any part thereof, the Beneficiary may, at its sole option, but at the Grantor's expense, enter upon the
Property or any part thereof, at any time, with or without notice to the Grantor (unless required by
applicable law) and conduct such environmental inspections, testings, borings, drillings, sampling, or any
other similar procedures (including, but not limited to, the installation of monitoring wells or apparatus)
[herein, "Environmental Testing"] as the Beneficiary may believe in its sole discretion to be necessary or
appropriate (no such action shall be deemed to render Beneficiary a mortgagee in possession). Without
limitation of the foregoing, the Beneficiary may, at any time, conduct Environmental Testing at
Beneficiary's own expense without notice to Grantor. The Beneficiary may act through its own employees
or through any agents or contractors it may select. The Grantor shall not impede or restrict in any manner
the Beneficiary's access to the Property, or any part thereof, nor shall the Grantor interfere with the
Beneficiary in any manner in connection with such Environmental Testing. Any reports or assessments
obtained or developed by the Beneficiary shall be the sole property of the Beneficiary and shall not be the
property of the Grantor (regardless of whether the Grantor has paid the cost thereof or not), nor shall the
Grantor be entitled to review such reports; provided, however, should the Beneficiary elect to provide a
copy of any such reports to the Grantor, the Grantor shall retain the same in strict confidence and shall not
reveal the contents thereof to any other person whomsoever (except: (i) where disclosure is required by
law or (ii) on a need -to -know basis in connection with remediation) without the consent of the Beneficiary.
Should any such reports require remediation, then upon Beneficiary's demand (or, if earlier, as soon as
Grantor has knowledge of such matter requiring remediation) the Grantor shall immediately and with all
diligence implement and complete, at the Grantor's sole cost and expense, any actions reasonably
required to alleviate or remediate any environmental condition or other matter identified by such report in
strict conformity with Applicable Laws.
ARTICLE 5
5. The Trustee. The following provisions shall govern with respect to the Trustee:
5.1 Trustee shall not be liable for any error of judgment or act done by Trustee in good faith,
or be otherwise responsible or accountable to Grantor under any circumstances whatsoever.
Furthermore, Trustee shall not be personally liable in case of entry by him or her, or anyone entering by
virtue of the powers herein granted, upon the Property for debts contracted or liability or damages incurred
in the management or operation of the Property. Trustee shall have the right to rely on any instrument,
document, or signature authorizing or supporting any action taken or proposed to be taken by him or her
hereunder and believed by him or her in good faith to be genuine. Trustee shall be entitled to
reimbursement for expenses incurred by him or her in the performance of his or her duties hereunder and
50243774.1 9
to reasonable compensation for such of his or her services hereunder as shall be rendered. Grantor will,
from time to time, pay the compensation due to Trustee hereunder and reimburse Trustee for, and save
him or her harmless against, any and all liability and expenses, which may be incurred by him or her in the
performance of his or her duties, INCLUDING ANY CLAIMS, LOSSES, DAMAGES, SUITS, PENALTIES,
COSTS, LIABILITIES, OBLIGATIONS, AND EXPENSES, RESULTING FROM TRUSTEE'S OWN
NEGLIGENCE; provided, however, that the foregoing indemnification shall not be applicable, and Grantor
shall not be liable for any such claims, losses, damages, suits, penalties, costs, liabilities, obligations, or
expenses, to the extent (but only to the extent) the same arise or result from any gross negligence or
willful misconduct of Trustee.
5.2 All moneys received by Trustee shall, until used or applied as herein provided, be held in
trust for the purposes for which they were received, but need not be segregated in any manner from any
other moneys (except to the extent required by law), and Trustee shall be under no liability for interest on
any money received by him or her hereunder.
5.3 Trustee may resign at any time with or without notice. If Trustee shall die, resign, or
become disqualified from acting in the execution of this trust or shall fail or refuse to execute the same
when requested by Beneficiary so to do, or if, for any reason, Beneficiary shall prefer to appoint a
substitute trustee to act instead of the afore named Trustee, Beneficiary shall have full power to appoint a
substitute trustee, and, if preferred, several substitute trustees in succession who shall succeed to all the
estates, rights, powers, and duties of the afore named Trustee.
5.4 Any new trustee or trustees appointed pursuant to any of the provisions hereof shall,
without any further act, deed, or conveyance, become vested with all the estates, properties, rights,
powers, and trusts of its, his, her, or their predecessor in the rights hereunder with like effect as if originally
named as Trustee herein, but nevertheless, upon the written request of Beneficiary or of the successor
Trustee, the Trustee ceasing to act shall execute and deliver an instrument transferring to such successor
Trustee, upon the trusts herein expressed, all the estates, properties, rights, powers, and trusts of the
Trustee so ceasing to act and shall duly assign, transfer, and deliver any of the property and money held
by such Trustee to the successor Trustee so appointed in his or her place.
ARTICLE 6
6. Condemnation. Beneficiary shall be entitled to receive any and all sums which have or may
become payable to Grantor for the condemnation of the Property, or any part thereof, for public or quasi -
public use, or by virtue of private sale in lieu thereof, and any sums which have or may be awarded or
become payable to Grantor for damages caused by public works or construction on or near the said
Property. All such sums are hereby assigned to Beneficiary, who may, after deducting therefrom all
expenses actually incurred by Beneficiary, including attorneys' fees, release same to Grantor or apply the
same to the reduction of the Indebtedness hereby secured (whether to matured or unmatured principal or
to earned and unpaid interest or other earned and unpaid charges) as and in such manner as Beneficiary
may elect, with the balance, if any, after satisfaction of the Indebtedness, paid to Grantor, his heirs,
assigns, or whomsoever may be legally entitled thereto. Beneficiary shall not be, in any event or
circumstances, liable or responsible for failure to collect or for failure to exercise diligence in the collection
of any such sums. If no Event of Default has occurred and is continuing, and no event or condition, that
but for notice or opportunity to cure would be an Event of Default, Beneficiary will make available such
proceeds to rebuild the Property under such conditions as Beneficiary may reasonably impose.
ARTICLE 7
7. Number: Successors and Assigns; Headings. If this Deed of Trust is executed by more than one
person the singular reference to Grantor (including pronouns) shall mean each and /or all and /or any of the
persons who are Grantor. The obligations of Grantor hereunder (whenever more than one person is
50243774.1 10
bound by the obligations and duties of Grantor) shall be joint and several. References to Grantor, if more
than one, mean each and /or all of Grantor. All of the covenants and agreements herein undertaken to be
performed by and the rights conferred upon the Grantor named herein shall be binding upon and inure to
the benefit of not only said person but also his respective heirs, executors, administrators, grantees,
successors, and assigns. Paragraph, section, and article headings used in this instrument are for
convenience only and do not limit, modify, expand, or restrict the contents of such paragraphs, sections,
and articles; references to a paragraph, section, or article include all sections, paragraphs, sub-
paragraphs, or sub - sections, unless otherwise stated. Use of the terms "herein ", "hereof', or the like
include this entire instrument and not merely the paragraph, section, or article in which such term is used,
unless otherwise specified. References herein to any gender shall include each other gender, unless
otherwise specified; references to the singular shall include the plural and vice versa, unless otherwise
specified. References to the Beneficiary mean the herein named Beneficiary and his successors and
assigns and any future owner and transferee or holder of the debt instruments described or referred to in
Section 1.1. References to the Trustee include the herein named Trustee and any successor or substitute
trustee appointed hereunder. The term "lien" includes security interests and assignments. The terms
"including" or "include" shall be interpreted as if followed by the words "without limitation."
ARTICLE 8
8. Security Agreement.
8.1 It is understood and agreed that by this instrument Grantor has fixed, created, and
perfected a Deed of Trust lien upon and against the Property, inclusive of all goods, which are or are to
become fixtures thereon, and hereby has also created and granted to the Beneficiary, pursuant to the
Uniform Commercial Code of Texas (U.C.C.), a security interest in and to the Property all of which,
including replacements, substitutions, and additions thereto, and all proceeds thereof, shall be deemed to
be and remain a part of the Property covered by this Deed of Trust.
8.2 Grantor shall execute and deliver to Beneficiary all financing statements that may be
required by Beneficiary to establish and maintain the validity and priority of Beneficiary's security interest,
and Grantor shall bear all costs thereof, including all record searches reasonably required by Beneficiary.
Beneficiary may file or record a financing statement reflecting the collateral recited in this Deed of Trust in
any and /or all appropriate filing locations. If Beneficiary should dispose of any of the Property under the
U.C.C., ten (10) days written notice by Beneficiary to Grantor shall be deemed to be reasonable notice;
provided, however, Beneficiary may dispose of all or any such Property in accordance with the real
property foreclosure procedures of this Deed of Trust in lieu of proceeding under the U.C.C., or
Beneficiary may proceed under the U.C.C. as to any Property subject thereto in lieu of proceeding under
the real property foreclosure provisions of this Deed of Trust.
8.3 Grantor shall give advance notice in writing to Beneficiary of any proposed change in
Grantor's name, address, identity, general partners, or structure and shall execute and deliver to
Beneficiary, prior to or concurrently with the occurrence of any such change, all additional financing
statements that Beneficiary may require to establish and maintain the validity and priority of Beneficiary's
security interest with respect to any of the Property described or referred to herein.
8.4 Some of the items of the Property described herein are goods that are or are to become
fixtures related to the Land or improvements thereon, and it is intended that, as to those goods, this Deed
of Trust shall be effective as a financing statement filed as a fixture filing from the date of its filing for
record in the real estate records of the county in which the Land is situated.
8.5 Information concerning the security interest created by this instrument may be obtained
from Beneficiary, as secured party, at its address as set forth above.
8.6 The term Property as used in this Deed of Trust also includes the following, now owned or
hereafter acquired by Grantor or in which Grantor now has or hereafter may acquire an interest:
50243774.1 11
(a) any and all fixtures, machinery, equipment, engines, boilers, incinerators, building
materials, appliances, and goods of every nature whatsoever now or hereafter located in, on, used, or
intended to be used, in connection with the Land, improvements, fixtures, and other rights and interests
first above - described in this instrument (the "Real Property "), including but not limited to: those for the
purposes of supplying or distributing heating, cooling, electricity, gas, water, and air; fire prevention and
extinguishing apparatus; security and access control apparatus; plumbing and plumbing fixtures;
refrigerating, cooking, and laundry equipment; floor coverings and interior and exterior window treatments;
furniture and cabinets; interior and exterior paintings; and plant and lawn maintenance equipment;
(b) any and all plans and specifications for development of or construction of
improvements upon the Real Property;
(c) any and all contracts and subcontracts relating to the Real Property;
(d) any and all accounts, contract rights, instruments, documents, utility service
commitments, and general intangibles arising from or by virtue of any transactions related to the Real
Property, including, without limitation, all leases, licenses, and rental or use agreements, and all receipts
and income therefrom to the extent subject to the U.C.C.;
(e) any and all permits, franchises, certificates, and all other rights and privileges
obtained in connection with the Property, including rights, allocations, taps, and connections; capital
improvement contracts; utility construction agreements with municipal or other public utilities; regional
detention rights; rights to refunds and reimbursements from any municipal utility district or other
governmental (or quasi - governmental) authority; rights under any traffic phasing agreements or similar
contracts; rights under preliminary plans, plats, and other development approvals; rights to receive or
install water, wastewater, electricity, gas, telephone, telecommunications (including cable television,
internet, ISDN lines, DSL lines, etc.), drainage, or other utilities or services; rights to build, construct, or
install streets, driveways, or other access to the Real Property; rights under any declaration of covenants,
conditions, and restrictions, including rights as declarant; and all other development rights, powers,
privileges, options, or other benefits associated with, that pertain to, are attributable to, are appurtenant to,
apply to, or which otherwise benefit the Real Property;
(f) any and all proceeds arising from or by virtue of the sale or other disposition of
any of the Real Property;
(g) any and all proceeds payable or to be payable under each policy of insurance
relating to the Real Property;
(h) any and all proceeds arising from the taking of all or a part of the Real Property,
or any public or quasi - public use under any law, or by any right of eminent domain, or by a private or other
purchase in lieu thereof;
(i) all other interest of every kind and character which Grantor now has or at any
time hereafter acquires in and to the Real Property; and
Q) all substitutions, additions, replacements of the Real Property, and all proceeds
(of.whatever type) from any disposition of any of the Real Property.
ARTICLE 9
9. Conformity with Applicable Laws.
9.1 Notwithstanding anything herein or in any other documents, instruments, or agreements
evidencing, collateral to, or securing the Indebtedness contained, all contracts and other agreements
between Beneficiary and Grantor (or any other obligor on the Indebtedness), now existing or hereafter
50243774.1 12
arising, oral or written, including all such documents, instruments, and agreements, are hereby expressly
limited so that in no event or contingency whatsoever shall the amount paid or to be paid to Beneficiary, or
contracted for, received, charged, or collected by Beneficiary which amounts are or constitute interest,
ever exceed the highest rate allowed by the laws of the State of Texas (or applicable federal law,
whichever shall provide for or permit the higher rate) on the Indebtedness hereby secured (or if different
rates apply to different portions thereof, then each such portion shall be so restricted according to its
respective applicable rate or rates) or on any money obligation hereunder and in no event shall Grantor (or
any other obligor on the Indebtedness) be obligated to pay interest thereon in excess of such rate. The
parties hereto stipulate that in the event any applicable law limiting the amount of interest or other charges
permitted to be collected is interpreted so that any charge provided for in this Deed of Trust or in any other
such documents, instruments, or agreements evidencing, collateral to, or securing the Indebtedness
whether considered separately or together with other charges that are considered a part of this Deed of
Trust or any other such documents, instruments, or agreements evidencing, collateral to, or securing the
Indebtedness or any charge provided in any other part of the Indebtedness secured hereby, would violate
such law by reason of the acceleration of any part of the Indebtedness secured hereby, or deduction to or
the non - funding of principal, or demand, performance of covenants, restrictions on use of funds, escrow of
funds, or compensating balance agreements, or for any other reason, such charge is ipso facto reduced
to the extent necessary to eliminate such violation. In the event of acceleration of (or demand for) all or
any part of the Indebtedness, such acceleration (or demand) shall not be deemed or interpreted to include
unearned interest or unearned charges or principal that is not outstanding or otherwise owing, and any
contrary interpretation is hereby waived and negated. In the event that a late charge is imposed on all or
any part of the Indebtedness, then such late charge, to the extent deemed interest under applicable law,
shall be limited and treated in accordance with this paragraph. The amounts of interest, if any, previously
paid to Beneficiary in excess of the amounts permitted by applicable law shall be applied by Beneficiary to
reduce the principal of the Indebtedness or, at Beneficiary's option, refunded to Grantor, his heirs or
assigns, or to the obligors of the Indebtedness if other than Grantor. To the extent not prohibited by
applicable law, determination of the legal maximum amount of interest shall at all times be made by
amortizing, prorating, allocating, and spreading in equal parts during the period of the full stated term of
the applicable Indebtedness (including, unless prohibited by law, any extension or renewal periods
thereof), all interest and late charges at any time contracted for, charged, or received in connection with
the Indebtedness so that the actual rate of interest is uniform throughout the term thereof. Any reference
herein to a stated rate of interest (e.a_ eighteen percent (18 %) per annum) shall be in all cases deemed to
mean such rate or the highest lawful rate (whichever is the lesser).
9.2 If the enactment or expiration of applicable laws, rules, or regulations has the effect of
rendering any provision of this Deed of Trust or the documents, instruments, or agreements evidencing,
collateral to, or securing the Indebtedness or any part thereof unenforceable or illegal according to their
terms, this Deed of Trust or said documents, instruments, or agreements shall be deemed to be modified
and amended to the minimum extent necessary to cure any such unenforceability or illegality. In addition,
if any subsequently enacted law, rule, or regulation applicable to this Deed of Trust or the documents,
instruments, or agreements evidencing, collateral to, or securing the Indebtedness or any part thereof
shall permit the charging of an interest rate higher than formerly permitted, then unless prohibited by law,
said higher interest rate shall immediately be incorporated herein and therein by reference for all purposes
of determining the maximum legal rate applicable hereto or thereto.
9.3 In the event that other charges or fees are imposed on or with respect to the
Indebtedness or any part thereof that constitute interest under applicable law with regard to any
transaction hereby secured, the contracted -for rate of interest with respect to such portion of the
Indebtedness shall be deemed to be a rate that is the lesser of the specified rate in the applicable
agreement adjusted by said charges or fees, or the maximum rate, if any, applicable to such transaction
(any such charges having also been elsewhere in this paragraph reduced as necessary so as not to
exceed such maximum rate, if any) for the purpose of calculating a contracted -for rate of interest as, if,
and to the extent required by applicable law.
9.4 Grantor agrees that the usury limit or ceiling applicable to the Indebtedness, or any part
thereof, shall be at all times the highest allowed by applicable law; to the extent the documents,
50243774.1 13
instruments, or agreements evidencing, collateral to, or securing the Indebtedness, or any part thereof,
contractually provide for a lesser rate or amount or maximum rate, such provisions shall be solely for the
purpose of calculating and determining the Indebtedness from time to time owing, and shall not be
deemed to establish a lower maximum rate for violation of which Beneficiary would be subject to penalties
for usury. Grantor agrees that should Beneficiary charge, contract for, or receive interest at a rate or
amount that is greater than the agreed upon rate or amount, but less, after giving effect to this Article 9
and after applicable laws, than the highest lawful maximum rate or amount, Grantor's recourse (which
shall to the maximum lawful extent, be its sole recourse) shall be to recover such difference from the then
current transferee or holder of the Indebtedness.
ARTICLE 10
10. Event of Default. An "Event of Default" shall mean any of the following: (i) any failure to pay in full,
when and as due (beyond any applicable cure period), any part of the Indebtedness; (ii) any breach of,
default under, or falsity of any warranty, representation, agreement, or covenant hereunder or under the
Note, or any other instrument, agreement, or document evidencing, collateral to, or securing any part of
the Indebtedness or any falsity in any financial information provided by or on behalf of Grantor or any other
obligor (on any part of the Indebtedness) to Beneficiary; (iii) any Event of Default established under Article
12 below; (iv) the bankruptcy or insolvency of, the filing of any voluntary petition in bankruptcy by, or the
filing of any involuntary petition in bankruptcy against (as debtor), or the death of, Grantor (or any of them
if more than one) or any primary obligor or guarantor of any part of the Indebtedness, or the application for
appointment of a receiver for any property of any such persons, or if Grantor (or any of them) or any
primary obligor or guarantor of the Indebtedness is a corporation or partnership, then its dissolution or
termination or any voluntary or involuntary application therefor; (v) the occurrence of any default or
acceleration or foreclosure under any document, instrument, or agreement evidencing, collateral to, or
secured by any prior or subordinate lien on the Property or any part thereof, including but not limited to the
First Lien Deed of Trust, beyond any applicable cure period, or (vi) Grantor's default under any other debt
owed by Grantor to Beneficiary, beyond any applicable cure period. Any reference in any other document,
instrument, or agreement to any breach or default or event of default hereunder shall be deemed to mean
any one or more of the foregoing Events of Default. Notice to be given under this Article 10 shall be
deemed given when mailed by certified mail, return receipt requested, to the Grantor at Grantors' address
set forth on the first page of this instrument, or when delivered by personal delivery to Grantor, effective
upon mailing if mailed or upon receipt by Grantor if delivered.
ARTICLE 11
11. Defeasance. Should Grantor do and perform all of his obligations herein contained, and should
prompt payment of the Indebtedness be made as the same shall become due and payable, and should
Beneficiary have no further obligations (howsoever conditioned) to make further advances or incur further
undertakings to be secured hereby, then (but only then) this conveyance shall become null and void and
of no further force and effect, and shall be released at the expense of Grantor by the Beneficiary. An
affidavit, certificate, letter, or statement of any officer, agent, or attorney of Beneficiary indicating that any
part of the Indebtedness remains unpaid or that Grantor's obligations remain unperformed or that
Beneficiary is obligated to advances or undertakings to be secured hereby shall be conclusive evidence of
the continuing validity and effectiveness of this instrument and any person may, and is authorized to, rely
thereon.
ARTICLE 12
12. Special Provisions.
12.1 Due On Sale. It shall be an Event of Default under this Deed of Trust if all or any part of the
Property (other than obsolete or worn personal property replaced by substitutes of equal or greater value
50243774.1 14
and function than the replaced items when new and if subject to the lien hereof in the same priority as the
item replaced) shall be leased, sold, transferred, or otherwise disposed of, or if title thereto shall become
vested in any party other than Grantor whether by operation of law or otherwise. Beneficiary may, in his
sole discretion, waive this Event of Default, but he shall have no obligation to do so, and any waiver may
be conditioned upon (to the maximum lawful extent) such one or more of the following which Beneficiary
may require: the grantee's or transferee's integrity, reputation, character, creditworthiness, and
management ability being satisfactory to Beneficiary in his sole judgment, and grantee or transferee
executing, prior to such sale or transfer, a written assumption agreement containing such terms as
Beneficiary may require, a principal paydown on the Indebtedness, an increase in the rate of interest
payable under the Indebtedness, a transfer fee, any other expenses incurred by Beneficiary (including
attorneys' fees) and any other modification of the documents, instruments, or agreements evidencing,
collateral to, or securing the Indebtedness as Beneficiary may require.
12.2 Purpose. Grantor expressly represents that this Deed of Trust and the Note hereby secured
are given for the following purpose, to -wit: The Note secured hereby represents funds advanced by the
Beneficiary at the special instance and request of Grantor.
12.3 Secures Other Debt. It is specifically agreed that this Deed of Trust shall also secure
Beneficiary in the payment of any and all other indebtedness now owing or hereafter to become owing by
Grantor to Beneficiary, howsoever evidenced and whenever created, including creation by notes,
advances, overdrafts, bookkeeping entries, or other methods or means, and all obligations incurred by the
Grantor under any agreement between Grantor and Beneficiary or any affiliate of Beneficiary.
Notwithstanding Article 11, and to the maximum lawful extent, the fact of repayment of all indebtedness of
Grantor to Beneficiary shall not terminate this instrument unless the same be released by Beneficiary at
the request of Grantor, but otherwise it shall remain in full force and effect to secure all future advances
and indebtedness, regardless of any additional security that may be taken as to any past or future
indebtedness, and shall be unaffected by any renewals, extensions, or partial releases hereunder.
Anything to the contrary herein notwithstanding, it is expressly agreed that this Deed of Trust shall not
secure the payment of any such other indebtedness that may not be lawfully secured hereby.
12.4 Land Use. Grantor covenants to comply timely and fully with all applicable statutes,
regulations, laws, and ordinances pertaining to the development, platting, subdivision, regulation, pre -sale,
or sale of the Property and /or any lots created therefrom, including, without limitation, the Interstate Land
Sales Full Disclosure Act, as amended, as such Act may be applicable to Grantor's proposed
development; provided however, nothing in the foregoing clause shall be interpreted to waive any
provisions of this instrument, including, without limitation, any "due -on- sale" provision.
12.5 Costs and Expenses. Grantor shall pay Beneficiary, on demand (on which date the same
shall be due and payable), all costs and expenses incurred at any time by Beneficiary in negotiating,
defending, perfecting, enforcing, or effecting compliance with this Deed of Trust, the Note, or the other
documents, instruments, or agreements further evidencing, collateral to, or securing the loan represented
by the Note, or incurred at any time by Beneficiary in connection with any title policy premiums, inspection
fees, recordation fees, appraisal fees, test appraisal (including appraisals required by applicable agencies
or examiners with authority over Beneficiary) or reappraisal fees, taxes, fees, and expenses of
Beneficiary's counsel, insurance premiums, and any and all costs or out -of- pocket expenses incurred by
Beneficiary, with interest thereon at eighteen percent (18 %) per annum on any unpaid amounts from the
date due until paid, all except as prohibited by law.
12.6 Counterparts. This Deed of Trust may be signed in multiple counterparts, each of which
shall be deemed an original and all of which when taken together shall constitute one instrument.
Signatures and acknowledgments on the following pages ]
50243774.1 15
IN WITNESS WHEREOF, this Deed of Trust is executed as of the date of the acknowledgment to
be effective as of the Effective Date.
GRANTOR:
SPV VENTURES, LLC,
a Texas limited liability company,
d /b /a Schertz Parkway Ventures, LLC
By:
Nam : - ssE M, HELLUMS
Title: ICES / C NT
STATE OF TEXAS §
COUNTY OF �_ §
Th' stru t ack e d befor me pon the ? -day of � 2010, by
yJ�;ey,r�'� of &V Ventures, L xas limited
lability company, d /b /a Schertz Parkway Ventures, LLC, on behalf of said limited liability company.
VICKI G. naR04NN
Notary Public, State of Texas
. p•.:cye My Commission Expires
p p'
6, July Juiy 23 � 20013
AFTER RECORDING, PLEASE RETURN TO:
Fulbright & Jaworski L.L.P.
300 Convent Street, Suite 2200
San Antonio, Texas 78205
ATTN: Michael Spain
Notary Public State of Texas, /
Printed Name of Notary
My Commission Expires:
50243774.1 S -1
EXHIBIT "A"
LEGAL DESCRIPTION OF THE LAND
Being Lot 1 (a 7.600 acres tract), Block 1, situated in the City of Schertz, Guadalupe County, Texas,
being put of the SPY, LLC Subdivision as recorded. in Volume 7, Page 366 of the Deed and Plat
Records of Guadalupe County, Texas.
Said Lot 1, a 7.600 acre tract, being more particularly described by metes and bounds as follows:
BEGINNING: at a bolt found along the north boundary line of Lot 8 of the Live Oak Hills
Subdivision as recorded in Volume 2, Pages 146 -147 of the Deed and Plat Records of Guadalupe
County, Texas, and being the southwest corner of Lot 2 of the Harden Subdivision as recorded in
Volume 4, Pages 100 -102 of the Deed and Plat Records of Guadalupe County, Texas and also being
the southeast corner and POINT OF BEGINNING of this herein described tract.,
THENCE: S. 60° 31' 06" W. (being bearing basis) along the north line of said Live Oak Hills
Subdivision a distance of 513.59 feet (called 51.6.64') to a 1/2" iron rod set along the east right -of-
way line of Schertz Parkway for the southwest corner of this herein described tract;
THENCE: N. 29° 20' 16" W. a distance of 98.07 feet (called N. 29° 31' 12" W. 97.99') along the
same said east right -of -way line of Schertz Parkway to a 1/2" iron rod set for a point of curvature of
this herein described tract;
THENCE: with a curve to right said curve having a radius of 700.00 feet, an arc length of 598.41
feet, a central angle of 48° 58'49", a chord bearing and distance of N. 04° 42'33" W. 580.35 feet to
a 1/2" iron rod set along the east right -of -way line of Schertz Parkway for the point of tangent of this
curve and also being the point of reverse curvature of this herein described tract,
THENCE: with a curve to the left said curve having a radius of 786.00 feet, an arc length of 676.11
feet (failed 676.27'), a central angle of 49° 17' 50 ", a chord bearing and distance of N. 04° 49' 39"
W. 655.61 feet to a 1/2" iron rod set along the west boundary line of said Harden Subdivision and
being the east right -of -way of same said Schertz Parkway for the corner of this herein described
tract;
THENCE: S. 29° 27'49" E. (called S. 29° 49'28" E. 1221.62') along an existing fence line and
being the west boundary line of said Harden Subdivision a distance of 1222.04 feet to the
POINT OF BEGINNING and containing 7.600 acres or 330,988 square feet of land, more or
less.
Bearing Basis- S. 60° 31 '06" W. - from the south boundary line of said Lot I. Block 1, of the
SPV, LLC, Subdivision as recorded in Volume 7, Page 366 of the Deed Records of Guadalupe
County, Texas.
50243774.1 EXHIBIT A, PAGE 1
I/We hereby certify this to be a
true and certified co py of the
LEASE ESTOPPEL,
SUBORDINATION. NON-DISTURBANCE, AND ATTORNMENT AGREEMENT
THIS LEASE ESTOPPEL, SUBORDINATION, NON DISTURBANCE, AND
ATTORNMENT AGREEMENT, is made and entered into as of theZ&_day of
2010, by and between, NORTHEAST OB /GYN ASSOCIATES, a Texas professional limited
liability company, 12602 Toepperwein, Suite 201, Live Oak, Bexar County, Texas 78233,
( "Lessee'), SPV VENTURES, LLC, a Texas limited liability company, doing business as
SCHERTZ PARKWAY VENTURES, LLC, 16161 College Oak, Suite 100, San Antonio, TX
78249, ("Lessor "), and CITY OF SCHERTZ ECONOMIC DEVELOPMENT
CORPORATION, 1400 Schertz Parkway, Schertz, Texas 78154, ( "Lender ").
RECITALS
1. Lender has agreed to make a mortgage loan (the "Loan ") to Lessor, repayment of
which is to be secured, in part, by a Deed of Trust — Financing Statement- Fixture Filing
(the "Deed of Trust ") on real estate (the "Land ") which is more fully described in Exhibit
"A" attached hereto.
2. Lessee is the owner of a leasehold estate under a lease dated October 26, 2009
(the "Lease "), made by Lessor, demising a portion of the Land and the improvements
thereon as more fully described in the Lease (the "Premises ").
3. As a condition precedent to Lender's disbursement of Loan proceeds, Lender has
required that Lessee subordinate the Lease and its interest in the Land and Premises in all
respects to the lien of the Deed of Trust and provide certain representations to Lender.
4. In return the Lender is agreeable to not disturbing Lessee's possession of the
Premises during the term of the Lease or any renewal thereof in accordance with the
Lease.
5. Lender is disbursing the Loan proceeds in reliance upon the agreements contained
in this instrument (the "Agreement').
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, it is hereby agreed as follows:
1. SUBORDINATION. The Lease, and the rights of Lessee in, to or under the Lease
and the Land and the Premises, are hereby subjected and subordinated and shall remain
absolutely, in all respects and for all purposes subject, subordinate and junior to the lien of
the Deed of Trust, and to the rights and interest of the Lender under the Deed of Trust, as
fully and with the same effect as if the Deed of Trust had been duly executed,
acknowledged and recorded, and the indebtedness secured thereby had been fully
disbursed prior to the execution of the Lease or possession of the Land or Premises by
Lessee.
LEASE ESTOPPEL, SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Page 2
2. PURCHASE OPTIONS. Lessee certifies that, except as may otherwise be provided
in the Lease, it does not and shall not have any other option to purchase any portion of the
Land or Premises.
3. LESSEE NOT TO BE DISTURBED. So long as Lessee is not in default (beyond
any period given Lessee to cure such default) in the payment of rent or additional rent or in
the performance of any of the terms, covenants or conditions of the Lease on Lessee's part
to be performed, Lessee's possession of the Premises and Lessee's rights and privileges
under the Lease, or any extensions or renewal rights thereof in the Lease, shall not be
diminished or interfered with by Lender, and Lessee's occupancy of the Premises shall not
be disturbed by Lender for any reason whatsoever during the term of the Lease or any such
extensions or renewals thereof.
4. LESSEE NOT TO BE JOINED IN FORECLOSURE. So long as Lessee is not in
default (beyond any period given Lessee to cure such default) in the payment of rent or in
the performance of any of the terms, covenants, or conditions of the Lease on Lessee's part
to be performed, Lender will not join Lessee as a party defendant in any action or
proceeding foreclosing the Deed of Trust unless procedurally required in such action, and,
if so, then only for such purpose and not for the purpose of terminating the Lease.
5. LESSEE TO ATTORN TO LENDER. If the interests of Lessor shall be transferred
to and owned by Lender by reason of foreclosure or other proceedings brought by it in lieu
of or pursuant to a foreclosure, or by any other manner, and Lender succeeds to the
interest of the Lessor under the Lease, Lessee shall be bound to Lender under all of the
terms, covenants and conditions of the Lease for the balance of the term thereof remaining
and any extensions or renewals thereof which may be effected in accordance with any
option therefor in the Lease, with the same force and effect as if Lender were the Lessor
under the Lease, and Lessee does hereby attorn to Lender as its Lessor, said attornment to
be effective and self-operative immediately upon Lender succeeding to the interest of the
Lessor under the Lease without the execution of any further instruments on the part of any
of the parties hereto. The respective rights and obligations of Lessee and Lender upon such
attornment, to the extent of the then remaining balance of the term of the Lease and any
such extensions and renewals, shall be and are the same as now set forth therein; it being
the intention of the parties hereto for this purpose to incorporate the Lease in this
Agreement by reference with the same force and effect as if set forth at length herein.
6. LENDER NOT BOUND BY CERTAIN ACTS OF LESSOR. Lender shall not be
liable for any act or omission of Lessor; nor shall Lender be (a) subject to any offsets or
defenses which Lessee might have against Lessor, (b) bound by any rent or additional rent
which Lessee might have paid for more than the then current installment, (c) bound by any
security deposit which Lessee may have paid to Lessor, (d) personally liable under the
Lease, or (e) bound by any amendment, modification, or termination of the Lease made
without its prior written consent.
50292095.1
LEASE ESTOPPEL, SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Page 3
7. SUCCESSORS AND ASSIGNS. This Agreement and each and every covenant,
agreement and other provisions hereof shall be binding upon the parties hereto and their
heirs, administrators, representatives, successors and assigns, including without limitation
each and every from time to time holder of the Lease or any other person having an
interest therein, and shall inure to the benefit of the Lender (to include each holder of the
Deed of Trust), its successors and assigns and shall inure to the benefit of the Lessee.
8. CHOICE OF LAW AND VENUE. This Agreement is made and executed under and
in all respects is to be governed and construed by the laws of the State of Texas, and venue
for any action hereon shall be in Guadalupe County, Texas.
9. CAPTIONS AND HEADINGS. The captions and headings of the various sections of
this Agreement are for convenience only and are not to be construed as confining or
limiting in any way the scope or intent of the provisions hereof. Whenever the context
requires or permits, the singular shall include the plural, the plural shall include the
singular and the masculine, feminine and neuter shall be freely interchangeable.
. 10. NOTICES. Any notice which any party hereto may desire or may be required to
give to any other party shall constitute service of notice hereunder if in writing and mailed
by certified mail, or equivalent, to the addresses as set forth above, or to such other places
any party hereto may by notice in writing designate.
11. CERTIFICATION BY LESSEE. Lessee certifies to Lender: that the Lease may
not be amended, modified, assigned, or terminated, without Lender's prior written consent;
that Lessee is not aware of any other or prior assignment of the Lease or any rents, profits
or proceeds thereof other than to Lender; that the Lease represents the entire agreement
between the parties as to the leasing, is in full force and effect and has not been assigned,
modified, supplemented, amended, or terminated in any way except as indicated above;
that the term of the lease will commence on or about August 1, 2010; that the Lessor holds
a security deposit from Lessee in the amount of $13,500.00; that as of this date neither
Lessee nor Lessor is in default under any of the terms, conditions, provisions or
agreements of the Lease and that the Lessee has no defense to enforcement of the Lease
and no offsets, claims, counterclaims, liens, charges or defenses against the Lessor or the
rents or other obligations due under the Lease; and, that Lessee will give Lender prompt
written notice of any default by Lessor under the Lease.
12. Lessee acknowledges that Lender has assumed no liability and undertaken no
obligations with respect to the Lease, except as and only to the extent specifically set forth
herein.
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be
executed as of the date first above written.
50292095.1
LEASE ESTOPPEL, SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Page 4
LESSOR:
SPV VENTURES, LLC,
a Texas limited liability company,
d/b /a SCHERTZ PARKWAY VENTURES, LLC
By.
LESSEE:
NORTHEAST OB /GYNASSOCIATES,
a Texas professional limited liability company
By:
Name:1 K- S Lj � .
Title: C EC
LENDER:
CITY OF SCHERTZ ECONOMIC
DEVELOPMENT CORPORATION
By:_
Name:
Title:
STATE OF TEXAS §
COUNTY OF e-404q §
This instrument was acknowledged before me on the4hay of February, 2010, by
JESSE M. HELLUMS, President of SPV VENTURES, LLC, a Texas limited liability
company, d/b /a SCHERTZ PARKWAY VENTURES, LLC, on behalf of said limited liability
company.
icl Stats of (e,as
Xp��
50292095.1
Notary Public, State of Texas
LEASE ESTOPPEL, SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Page 4
LESSOR:
SPV VENTURES, LLC,
a Texas limited liability company,
d/b /a SCHERTZ PARKWAY VENTURES, LLC
C
LESSEE:
NORTHEAST OB /GYN ASSOCIATES,
a Texas professional limited liability company
By:
Name:
Title:
LENDER:
CITY OF SCHERTZ ECONOMIC
DEVELOPMENT CORPORATION
By. 62—i
M ►T�
Name:"t;.�.�
Title:�'��;i�� G
STATE OF TEXAS §
COUNTY OF §
This instrument was acknowledged before me on the _ day of February, 2010, by
JESSE M. HELLUMS, President of SPV VENTURES, LLC, a Texas limited liability
company, d/b /a SCHERTZ PARKWAY VENTURES, LLC, on behalf of said limited liability
company.
Notary Public, State of Texas
50292095.1
LEASE ESTOPPEL, SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Page 5
STATE OF TEXAS
COUNTY OF LC-V P
This instrument was acknowledgE
�. Kc-f l 1 - 3pouep- , Cgv
professional limited liability company
company.
�,►^v TRACEY L. MITCHELL
NOTARY PUBLIC STATE OF TEXAS
y� COMMISSION EXPIRES:
'�FZE1 07 -07 -201 1
1-11,if
�1'AIJ L.I A n)
3 before me on the! ' day of - F15bruary, 2010, by
of NORTHEAST OB /GYN ASSOCIATES, a Texas
on behalf of said professional limited liability
Notary Public, State of Texas
STATE OF TEXAS §
COUNTY OF §
This instrument was acknowledged before me on the day of February, 2010,
by of CITY OF SCHERTZ
ECONOMIC DEVELOPMENT CORPORATION, on behalf of CITY OF SCHERTZ
ECONOMIC DEVELOPMENT CORPORATION.
Notary Public, State of Texas
AFTER RECORDING RETURN TO:
City of Schertz Economic Development Corporation
1400 Schertz Parkway
Schertz, Texas 78154
50292095.1
LEASE ESTOPPEL, SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Page 5
STATE OF TEXAS
COUNTY OF
This instrument was acknowledged before me on the _ day of February, 2010, by
of NORTHEAST OB /GYN ASSOCIATES, a Texas
professional limited liability company, on behalf of said professional limited liability
company.
STATE OF TEXAS
COUNTY OF
Notary Public, State of Texas
This instrument was acknowledged befq e m on thee_ day of February, 2010,
by _ �� Q y \i� a,._ of CITY OF SCHERTZ
ECONOMIC DEVELOPMENT CORPORATION, on behalf of CITY OF SCHERTZ
ECONOMIC DEVELOPMENT CORPORATION.
BRENUA L. STAAB
MY COMMISSION EXPIRES
NOVEMBER 3, 2010
AFTER RECORDING RETURN TO:
Notary Public, State of Texas
City of Schertz Economic Development Corporation
1400 Schertz Parkway
Schertz, Texas 78154
50292095.1
LEASE ESTOPPEL, SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Page 6
EXHIBIT "A'
TO
LEASE ESTOPPEL, SUBORDINATION, NON-DISTURBANCE, AND ATTORNMENT
AGREEMENT
Lot 1, Block 1, SPV, L.L.C. SUBDIVISION, in the City of Schertz,
Guadalupe County, Texas, according to plat recorded in Volume 7, Page(s)
366, Map and Plat Records of Guadalupe County, Texas.
50292095.1
PROMISSORY NOTE
Effective Date: , 2010
Borrower: SPV Ventures, LLC, a Texas limited liability company, d /b /a
Schertz Parkway Ventures, LLC
Lender: City of Schertz Economic Development Corporation
Promise to Pay. FOR VALUE RECEIVED, Borrower promises to pay to the order of
Lender at the Place for Payment (as hereinafter defined) and according to the terms
of payment herein, the principal amount of ONE HUNDRED AND FIFTY
THOUSAND AND NO /100 DOLLARS ($150,000.00). The indebtedness shall be
subject to an annual interest rate of zero percent (0 %) All unpaid amounts shall be
due by the Payment Due Date.
2. Payment Due Date. The Payment Due Date shall be twenty (20) years after the
Effective Date hereof or upon such earlier time as the Borrower either (1) sells,
demises, or otherwise conveys one hundred percent (100 %) of its interest in that
certain real property located in Guadalupe County, State of Texas, and more
particularly described on Exhibit "A" attached hereto and incorporated herein for all
purposes (the "Property "), or (2) refinances the Property in excess of the actual
construction costs. Further, in the event that Borrower sells less than one hundred
percent (100 %) of its interest in the Property, the proportionate share of the
outstanding indebtedness hereunder shall be due upon the sale of such interest.
3. Late Charge. Subject to statutory and contractual provisions limiting the rate and
amount of interest Lender may charge, collect, or receive, in the event any payment
shall become overdue for a period in excess of ten (10) days, a one -time late charge
of five percent (5 %) of the payment due may be charged by the Lender hereof for
the purpose of defraying the expense incident to the handling of such delinquent
payment.
4. Default. Upon or following any default in the payment of this promissory note (the
"Note "), or upon or following any other Event of Default under the Deed of Trust (as
hereinafter defined), all outstanding principal and accrued, earned, and unpaid
interest under this Note and all obligations (other than the unearned portion thereof,
if any) in this Note and the Deed of Trust shall become immediately due, at the
election of Lender.
5. No Waiver: Remedies Cumulative. No single or partial exercise by Lender of any
power hereunder shall preclude other or further exercise thereof or the exercise of
any other power. No delay or omission on the part of Lender in exercising any right
hereunder shall operate as a wavier of such right or any other right under this Note.
The remedies of Lender as provided herein shall be cumulative and concurrent, and
50243797.1
may be pursued singularly, successively, or together, at the sole discretion of
Lender, and may be exercised as often as occasion therefor shall arise.
6. Prepayment. Borrower may prepay this Note in full or in part at any time prior to the
Payment Due Date without premium or penalty. Prepayment shall not alter the
Payment Due Date.
7. Place of Payment. All payments required to be made hereunder shall be made by
Borrower to Lender at the following location (the "Place of Payment "):
City of Schertz Economic Development Corporation
Attention: President
1400 Schertz Parkway
Schertz, Texas 78154
8. Notations of Payments. Borrower agrees not to send Lender payments marked
"paid in full," "without recourse," "under protest," or similar language. If Borrower
sends such a payment, Lender may accept it without losing any of Lender's rights
under this Note, and Borrower will remain obligated to pay any further amount owed
to Lender.
9. Dishonored Check Charge. Borrower will pay a processing fee of $25.00 if any
check given by Borrower to Lender as a payment on this loan is dishonored, unless
prohibited by law.
10. Fee to Waive Violation of Covenant. Lender reserves the right to assess and collect
a fee in connection with any agreement by Lender to waive the violation of any
covenant contained in the Note or any other document or agreement signed in
connection with the Note or to waive or forego its rights and remedies upon
occurrence of a default. The foregoing statement shall not in any respect obligate
the Lender to waive the violation of any covenant or to forego its rights and remedies
upon the occurrence of a default, which it may or may not do in its sole discretion.
11. Waivers. Except as provided above, unless (and then to the extent not) prohibited
by applicable law, Borrower:
a. waives: opportunity to cure breach or default; grace; all notices, demands, and
presentments for payment; all notices of dishonor, non - payment, acceleration of
maturity, or intention to accelerate maturity; protest; dishonor; all other notices
whatsoever; and, diligence in taking any action to collect amounts hereunder or
in the handling of any collateral securing this Note at any time; and
b. consents and agrees (without notice of any of the following): to any substitution,
subordination, exchange, or release of any security for this Note or the release of
any party primarily or secondarily liable hereon; that the Lender shall not be
required first to institute suit or exhaust its remedies hereon against the Borrower
or others liable or to become liable hereon or to enforce its rights against them or
50243797.1
any security hereof; and to any extension, renewal, rearrangement, or
postponement of time or manner of payment of this Note and to any other
indulgence with respect hereto.
12. Securit . This Note is secured by and entitled to the benefits of that certain Deed of
Trust — Financing Statement — Fixture Filing of even date herewith (the "Deed of
Trust ") from Borrower to Lender, covering certain real and other properties, together
with the improvements and other property of Borrower situated thereon as described
in said instrument.
13. Attorneys' Fees. If this Note is given to an attorney for collection or enforcement, or
if suit is brought for collection or enforcement, or if it is collected or enforced through
probate, bankruptcy, or other judicial proceeding, the Borrower shall pay Lender's
costs and reasonable attorneys' fees in addition to other amounts due.
14. Notices. All notices, demands, requests, and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been given and
deemed received: (i) when presented personally by the party giving such notice to
the party receiving such notice; (ii) when hand delivered to the indicated address of
the party receiving such notice by a delivery service acting for the party giving such
notice; (iii) when delivered to the indicated address of the party receiving such notice
by a nationally recognized overnight courier service; (iv) three (3) days after deposit
in the United States Postal Service, postage prepaid, registered or certified mail,
return receipt requested; (v) when delivered by e-mail with the original deposited in
the United States Postal Service, postage prepaid, registered or certified mail, return
receipt requested; or (vi) when actually received by all persons indicated for each
entity receiving such notice regardless of how delivered. All such notices shall be
delivered to the following addresses, or at such other address(es) within the United
States as Lender or Borrower may from time to time designate by written notice to
the others as herein required.
IF TO LENDER: City of Schertz Economic Development
Corporation
1400 Schertz Parkway
Schertz, Texas 78154
Attention: President
With copy to: Fulbright & Jaworski L.L.P.
300 Convent Street, Suite 2200
San Antonio, Texas 78205
Attention: Michael L. Spain
Telephone: (210) 224 -5575
E -mail: mspain @fulbright.com
50243797.1
IF TO BORROWER: SPV Ventures, LLC, d /b /a Schertz Parkway
Ventures, LLC
16161 College Oak, Suite 100
San Antonio, Texas 78249
Attention: dir 1 ; r-m,m 4 o m
Telephone: 210� -'9 c
E -mail: o birrv% i nn k&m@DSa x. r le eyvl
Notwithstanding the foregoing, any notices given per statutes or applicable laws
shall be effective when given as required by statute or applicable law.
15. Other Agreements. Borrower agrees that: (a) the obligation evidenced by this Note
is an exempted transaction under the Truth in Lending Act, 1 5 U.S.C. Section 1601,
et seq.; (b) said obligation constitutes a business loan for the purposes of the
application of any laws that distinguish between consumer loans and business loans
and that have as their purpose the protection of consumers; (c) the proceeds of the
indebtedness evidenced by this Note will not be used for the purpose of registered
equity securities within the purview of Regulation "U" issued by the Board of
Governors of the Federal Reserve System; (d) Lender shall not have any obligation
to modify this Note; and (e) upon the Payment Due Date, Lender shall not have any
obligation to refinance the indebtedness evidenced by this Note or to extend further
credit to Borrower.
16. Interpretation. The headings of sections and paragraphs in this Note are for
convenience only and shall not be construed in any way to limit, expand, modify, or
define the content, scope, or intent of the provisions hereof. As used in this Note,
the singular shall include the plural, and masculine, feminine, and neuter pronouns
shall be fully interchangeable, where the context so requires. The parties hereto
intend and believe that each provision in this Note comports with all applicable law.
If a court of competent jurisdiction finds any provision(s) of this Note to be illegal,
invalid, or unenforceable as to any circumstance, that finding shall not make the
offending provision illegal, invalid, or unenforceable as to any other circumstance. If
feasible, the offending provision shall be considered modified so that it becomes
legal, valid, and enforceable. If the offending provision cannot be so modified, it
shall be considered deleted from this Note. Unless otherwise required by law, the
illegality, invalidity, or unenforceability of any provision of this Note shall not affect
the legality, validity, or enforceability of any other provision of this Note. Provided,
however, that if any provision of this Note which is found to be in violation of any
applicable law concerns the imposition of interest hereunder, the rights, obligations,
and interests of Borrower and Lender with respect to the imposition of interest
hereunder shall be governed and controlled by the provisions of Paragraph 17
hereof.
17. Compliance with Interest Laws. Nothing in this Note shall authorize the collection of
interest or fees in excess of the highest rate allowed by law. Interest on the debt
50243797.1 4
evidenced by this Note or the Deed of Trust will not exceed the maximum rate or
amount of nonusurious interest that may be contracted for, taken, reserved,
charged, or received under law. Any interest in excess of that maximum amount will
be credited on the principal amount, or if the principal amount has been paid,
refunded. On any acceleration or required or permitted prepayment, any excess
interest will be canceled automatically as of the acceleration or prepayment, or if the
excess interest has already been paid, credited on the principal amount, or if the
principal amount has been paid, refunded. Interest on this Note shall be prorated
and spread over the entire term this indebtedness is outstanding. This provision
overrides any conflicting provisions in this Note and the Deed of Trust concerning
the debt.
18. No Oral Modification. This Note may not be modified or discharged orally, but only
by an agreement in writing signed by both Borrower and Lender.
19. Time. Time is of the essence with regard to the performance of the obligations of
Borrower in this Note and each and every term, covenant, and condition herein by or
applicable to Borrower.
20. Choice of Law, Jurisdiction. THIS NOTE HAS BEEN ACCEPTED, EXECUTED,
AND DELIVERED AND IS INTENDED TO BE PERFORMED IN THE STATE OF
TEXAS. THE RIGHTS AND DUTIES OF THE PARTIES, AND THE VALIDITY,
CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION OF THIS
AGREEMENT SHALL BE GOVERNED AND CONSTRUED ACCORDING TO THE
LAWS OF SUCH STATE, INCLUDING TEXAS LAW WITH RESPECT TO CHOICE
OF LAW, AND THE LAWS OF THE UNITED STATES APPLICABLE TO
TRANSACTIONS IN THE STATE OF TEXAS. NOTWITHSTANDING THE
FOREGOING, IF THE LAWS OF ANY OTHER STATE GOVERN THE EXERCISE
OF REMEDIES AS TO PROPERTIES LOCATED IN THAT STATE, THE LAWS OF
SUCH STATE SHALL APPLY TO THE EXTENT, BUT ONLY TO THE EXTENT,
THAT SUCH LAWS ARE REQUIRED FOR THE ENFORCEMENT OF SUCH
REMEDIES.
21. Replacement Note. Upon receipt of evidence reasonably satisfactory to Borrower of
the loss, theft, destruction, or mutilation of this Note, and in the case of any such
loss, theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory to Borrower, or in the case of any such mutilation, upon surrender and
cancellation of this Note, Borrower will execute and deliver to Lender in lieu thereof,
a replacement note dated as of this Note, identical in form and substance to this
Note and upon such execution and delivery, all references in the Deed of Trust to
this Note shall be deemed to refer to such replacement note.
22. Balloon Payment. THIS LOAN IS PAYABLE IN FULL AT MATURITY. YOU (THE
BORROWER) MUST REPAY THE ENTIRE PRINCIPAL BALANCE OF THE LOAN
AND UNPAID INTEREST THEN DUE. THE LENDER IS UNDER NO OBLIGATION
TO REFINANCE THE LOAN AT THAT TIME. YOU WILL, THEREFORE, BE
REQUIRED TO MAKE PAYMENT OUT OF THE OTHER ASSETS THAT YOU MAY
50243797.1 5
OWN, OR YOU WILL HAVE TO FIND A LENDER WILLING TO LEND YOU THE
MONEY. IF YOU REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO
PAY SOME OR ALL OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH
A NEW LOAN EVEN IF YOU OBTAIN REFINANCING FROM THE SAME LENDER.
23. Borrower and Lender. The terms Borrower and Lender also include their respective
heirs, personal representatives, successors, and assigns. The term Lender also
includes any subsequent holder or transferee of this Note.
[Signature on the following page.]
50243797.1
By signing below, Borrower acknowledges that Borrower has read and agreed to
the terms of this Note. This Note is made as of the Effective Date.
BORROWER:
SPV Ventures, LLC,
a Texas limited liability company
d /b /a Schertz Parkway Ventures, LLC
By:
Nam 0 j5UQMS
Title: <-PR �s Q) JT
50243797.1 S -1
LOAN AGREEMENT
Borrower: SPV Ventures, LLC,
a Texas limited liability
company,
d/b /a Schertz Parkway Ventures,
LLC
Address: 16161 College Oak, Suite 100
San Antonio, Texas 78249
Lender: City of Schertz Economic
Development Corporation
Address: 1400 Schertz Parkway
Schertz, Texas 78154
THIS LOAN AGREEMENT (this "Loan Agreement ") is dated as of the &J day of
f, r a,r , 2010, by and between Borrower and Lender.
ARTICLE I
Definitions and Use of Terms
Section I.l.Certain Definitions. As used herein, the following terms have the meanings
indicated, unless the context otherwise requires:
"Affiliate" means any individual or entity directly or indirectly controlling,
controlled by, or under common control with, another individual or entity.
"Applicable Bankruptcy Law" means the United States Bankruptcy Code or any
other present or future federal or state insolvency, bankruptcy, liquidation, conservatorship,
reorganization or moratorium Governmental Requirements or other similar Governmental
Requirements.
"Business DE" means a day other than a Saturday, Sunday or a day on which
commercial banks in the State of Texas are authorized to be closed.
"Closing Date" means the date of this Loan Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Collateral" means any and all Property and rights and interests in or to Property
of Borrower, whether tangible or intangible, in which a Lien is granted or purported to be
granted pursuant to the Loan Documents.
"Deeds of Trust" means, collectively, mortgages, deeds to secure, deeds of trust,
leasehold mortgages, leasehold deeds to secure, leasehold deeds of trust or other security
documents or instruments of a similar nature which create a Lien or security interest from time to
time in, to or covering the Property or any other property of Borrower to secure the Obligations,
including any modifications, amendments, supplements, ratifications, and restatements thereto.
50243808.1
"Default" means any event or circumstance that constitutes an Event of Default or
that, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Environmental Laws" means any and all Federal, state, local, and foreign
Governmental Requirements, judgments, permits, concessions, grants, franchises, licenses,
agreements or governmental restrictions relating to pollution and the protection of human health
and the environment or the release of any materials into the environment, including those related
to hazardous substances or wastes, air emissions and discharges to waste or public systems.
"Event of Default" has the meaning set forth in Article VII.
"Financial Statements" means financial information of Borrower or any
Subsidiary, as required and set forth in Section 5.01 as, at the time in question, have been most
recently furnished to Lender.
"GAAP" means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board or such other principles as may be approved by a significant
segment of the accounting profession in the United States, that are applicable to the
circumstances as of the date of determination, consistently applied.
"Governmental Authority" means the United States, the state, the county, the city
or any other political subdivision in which the Property is located, and any court or political
subdivision, agency, or instrumentality having jurisdiction over Borrower or its Subsidiaries, or
the Property.
"Governmental Requirements" means all constitutions, statutes, laws, ordinances,
rules, regulations, orders, writs, injunctions or decrees of any Governmental Authority applicable
to Borrower or its Subsidiaries, or the Property.
"Guarantee" means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or other obligation payable or performable by another Person (the " rip mm
obligor ") in any manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation, (ii) to purchase or lease Property, securities
or services for the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other obligation, (iii) to
maintain working capital, equity capital or any other financial statement condition or liquidity or
level of income or cash flow of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any
other manner the obligee in respect of such Indebtedness or other obligation of the payment or
performance thereof or to protect such obligee against loss in respect thereof (in whole or in
part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation
of any other Person, whether or not such Indebtedness or other obligation is assumed by such
Person. The amount of any Guarantee will be deemed to be an amount equal to the stated or
2
50243808.1
determinable amount of the related primary obligation, or portion thereof, in respect of which
such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof. The term "Guarantee" as a verb has a corresponding meaning.
"Hazardous Materials" means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including petroleum or
petroleum distillates, asbestos or asbestos - containing materials, polychlorinated biphenyls, radon
gas, infectious or medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Improvements" means any and all buildings, covered garages, air conditioning
towers, open parking areas, structures and other improvements of any kind or nature, and any
and all additions, alterations, betterments or appurtenances thereto, now or at any time hereafter
situated, placed or constructed upon the Land or any part thereof.
"Indebtedness" means, as to any Person at a particular time, without duplication,
all of the following, whether or not included as indebtedness or liabilities in accordance with
GAAP: (a) all obligations of such Person for borrowed money and all obligations of such Person
evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) all
direct or contingent obligations of such Person arising under letters of credit (including standby
and commercial), bankers' acceptances, bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Interest Rate Protection Agreement; (d) all
obligations of such Person to pay the deferred purchase price of Property or services (other than
trade accounts payable in the ordinary course of business that are not past due); (e) indebtedness
(excluding prepaid interest thereon) secured by a Lien on Property owned or being purchased by
such Person (including indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness will have been assumed by such Person or is
limited in recourse; (f) capital leases and Synthetic Lease Obligations; and (g) all Guarantees of
such Person in respect of any of the foregoing. For all purposes hereof, the Indebtedness of any
Person will include the Indebtedness of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which such Person is a general
partner or a joint venturer, unless such Indebtedness is expressly made non - recourse to such
Person.
"Interest Rate Protection Agreement" means any interest rate swap agreement,
interest rate exchange agreement, currency exchange agreement, interest rate and currency
exchange agreement, forward rate agreement, rate floor agreement, interest rate protection
agreement, any option agreement respecting the foregoing, interest rate cap agreement, rate
collar agreement, International Swaps and Derivatives Association, Inc. (ISDA) Master
Agreement, or any similar agreement or arrangement and any schedule, confirmation, exhibit,
document or instrument evidencing any interest in a transaction covered by any such agreement
now existing or hereafter entered into by a Person to hedge the risk of variable interest rate
volatility or fluctuations of interest rates, as the same may be modified, supplemented, amended
or revised and in effect from time to time.
"IRS" means the United States Internal Revenue Service.
"Land" means the real estate described in Schedule 1.
3
50243808.1
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other
security interest or preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, and any financing lease having substantially
the same economic effect as any of the foregoing).
"Loan" is defined in Section 2.01.
"Loan Documents" means this Loan Agreement, the Notes, all Guaranties, all
Deeds of Trust, all Security Agreements, and such other documents, instruments, agreements,
evidencing, securing or pertaining to the Obligations as will from time to time be executed and
delivered to Lender by Borrower or any Subsidiary, or any other parry pursuant to this Loan
Agreement, and any future amendments, restatements, modifications, ratifications,
confirmations, extensions or supplements hereto or thereto.
"Managerial Official" means, with respect to any Person, an officer or a
governing Person of such Person.
"Margin Stock" has the meaning given thereto in Section 221.3(v) of
Regulation U, promulgated by the Board of Governors of the Federal Reserve System,
F.R.S. Reg. U, 12 C.F.R. part 221 (January 1, 1983 revision), as amended from time to time.
"Material Adverse Change" means (a) a material adverse change in, or a material
adverse effect upon, the operations, business, prospects, properties, liabilities (actual or
contingent), condition (financial or otherwise) of Borrower or Borrower and its Subsidiaries
taken as a whole; or (b) a material adverse effect upon the legality, validity, binding effect or
enforceability against Borrower of any Loan Document to which it is a party or the rights of
Lender under any Loan Document.
"Notes" means the Term Note, and any renewals, extensions, modifications,
refinancings, consolidations, and substitutions thereof.
"Obligations" mean all present and future Indebtedness, obligations and liabilities
of Borrower to Lender arising pursuant to this Loan Agreement or any of the other Loan
Documents or otherwise, and any renewals, extensions, increases, or amendments thereof, or any
part thereof, regardless of whether such Indebtedness, obligations and liabilities are direct,
indirect, fixed, contingent, liquidated, unliquidated, joint, several or joint and several and
including interest and fees that accrue after the commencement by or against Borrower of any
proceeding under any Applicable Bankruptcy Law naming Borrower as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.
"Patriot Act" is defined in Section 4.15.
"Person" means any individual, firm, corporation, association, partnership, joint
venture, trust, limited liability company, entity, unincorporated organization or Governmental
Authority.
"Property" means the Land, the Improvements and all other property, whether real
or personal, tangible or intangible.
4
50243808.1
"SecurityAgreements" means, collectively, (a) the Security Agreement executed
by Borrower, in form and substance satisfactory to Lender, creating a Lien in favor of Lender,
and (b) any security agreement executed by any Person in connection with this Loan Agreement,
as each may be amended, modified, ratified, supplemented, restated or replaced from time to
time.
"Subsidiary" of a Person means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares of securities or other
interests having ordinary voting power for the election of directors or other governing body
(other than securities or interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise specified, all references herein to a "Subsidiary" or to "Subsidiaries" will refer
to a Subsidiary or Subsidiaries of Borrower.
"Survey" means a survey of the Land consisting of a plat and field notes, prepared
by a licensed surveyor, acceptable to Lender, which survey will: (a) reflect the actual
dimensions of the Land, the gross and net area of the Land, the location of any easements, rights -
of -way, setback lines, encroachments or overlaps thereof or thereover and the outside boundary
lines of any Improvements located thereon; (b) identify by recording reference any easements,
setback lines or other matters referred to in the title commitment related thereto; (c) include the
surveyor's registration number and seal and the date of the Survey; (d) include a surveyor's
certificate acceptable to Lender; (e) reflect that the Land has access to and from a publicly
dedicated street, roadway or highway; (f) be sufficient to cause the title company to delete the
"survey exception" in Schedule B of the mortgagee title insurance policy to the extent permitted
by the rules of the State Board of Insurance; and (g) reflect the area within the Land that has
been designated by the Federal Insurance Administration, the Army Corps of Engineers or any
other governmental agency or body as being subject to special or increased flood hazards.
"Synthetic Lease Obligation" means the monetary obligation of a Person under
(a) a so- called synthetic, off - balance sheet or tax retention lease, or (b) an agreement for the use
or possession of Property creating obligations that do not appear on the balance sheet of such
Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as
the Indebtedness of such Person (without regard to accounting treatment).
"Term Loan" is defined in Section 2.01.
"Term Note" means a promissory note executed by Borrower and payable to the
order of Lender, evidencing the Term Loan made by Lender, as the same may be amended,
restated, supplemented, modified, extended or increased from time to time.
"Termination Date" means the maturity date stated in the Term Note.
"UCC" means the Uniform Commercial Code of the State of Texas or of any
other state having jurisdiction with respect to any of the rights and remedies of Lender under the
Loan Documents, as amended.
5
50243808.1
Section I.2.1-feadings. The headings, captions, and arrangements used in any of the Loan
Documents are, unless specified otherwise, for convenience only and will not be deemed to limit,
amplify, or modify the terms of the Loan Documents nor to affect the meaning thereof.
Section I.3.Number and Gender of Words. Whenever herein the singular number is used,
the same will include the plural where appropriate, and words of any gender will include each
other gender where appropriate.
Section IA.Money. Unless stipulated otherwise, all references herein or in any of the
Loan Documents to "Dollars," "money," "payments," or other similar financial or monetary
terms are references to currency of the United States of America.
Section I.5.Articles. Sections and Exhibits. All references herein to Articles and Sections
are, unless specified otherwise, references to articles and sections of this Loan Agreement. All
references herein to an "Exhibit," "Annex" or "Schedule" are references to exhibits, annexes or
schedules attached hereto, all of which are made a part hereof for all purposes, the same as if set
forth herein verbatim, it being understood that if any exhibit, annex or schedule attached hereto,
which is to be executed and delivered, contains blanks, the same will be completed correctly and
in accordance with the terms and provisions contained and as contemplated herein prior to or at
the time of the execution and delivery thereof. The words "herein," "hereof," "hereunder" and
other similar compounds of the word "here" when used in this Loan Agreement will refer to the
entire Loan Agreement and not to any particular provision or section.
Section I.6.Accounting_Terms. Unless otherwise specified, all accounting and financial
terms and covenants set forth above are to be determined according to GAAP. If at any time any
change in GAAP would affect the computation of any financial ratio or requirement set forth in
any Loan Document, and either Borrower or Lender will so request, Lender and Borrower will
negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of Lender), provided that, until so
amended, (a) such ratio or requirement will continue to be computed in accordance with GAAP
prior to such change therein and (b) Borrower will provide to Lender financial statements and
other documents required under this Loan Agreement or as reasonably requested hereunder
setting forth a reconciliation between calculations of such ratio or requirement made before and
after giving effect to such change in GAAP.
ARTICLE II
Loan
Section II.1.Term Loan. Subject to the terms and conditions set forth in this Loan
Agreement and the other Loan Documents, Lender hereby agrees to lend to Borrower, and
Borrower agrees to borrow from Lender, the amount of ONE HUNDRED FIFTY THOUSAND
and NO 1100 ($150,000.00) (the "Term Loan") in a single advance on the Closing Date.
The Term Loan will be called the "Loan ".
Section II.2.Promisso1y Notes. The Loan will be evidenced by one or more Notes.
Interest on the Notes will accrue at the rate set forth therein. The principal of and interest on the
0
50243808.1
Notes will be due and payable in accordance with the terms and conditions set forth in the Notes
and in this Loan Agreement.
ARTICLE III
Conditions Precedent
Section III.1.Initial Extension of Credit. The obligation of Lender to make the Loan is
subject to the condition precedent that Lender will have received on or before the Closing Date,
in form and substance satisfactory to Lender:
(a)Resolutions. Resolutions of the board of directors, members, partners or other
appropriate governing body of Borrower certified by a Managerial Official of such
Person, which resolutions authorize the execution, delivery, and performance by such
Person of this Loan Agreement and the other Loan Documents to which it is a party;
(b)Certificates of Borrower. Certificate of Borrower executed by a Managerial
Official of Borrower certifying as to (i) the names of the officers of Borrower authorized
to sign this Loan Agreement and each of the other Loan Documents to which it is a party
(including the certificates contemplated herein) together with specimen signatures of such
officers; (ii) original certified or file— stamped copies of the certificate or articles of
incorporation, articles of organization, certificate of limited partnership, trust agreement
or other similar organizational document of Borrower, certified as true, correct and
complete by the appropriate authority in their respective jurisdictions of organization as
of a date within 10 days prior to the Closing Date; (iii) bylaws, limited partnership
agreement, operating agreement or other similar organizational document of Borrower
certified as true, correct, and complete by such Managerial Official; and (iv) certificates
of the appropriate government officials as to the existence and good standing (if
applicable) Borrower in (A) their respective jurisdictions of organization and (B) each
other jurisdiction in which Borrower is required to qualify to do business, each dated
within 10 days prior to the Closing Date;
(c)Notes. The Notes executed by Borrower;
(d)Security Agreement. The Security Agreement executed by Borrower;
(e)Deed of Trust. The Deed of Trust executed by Borrower;
(f)Mortgagee Title Insurance Policy. A paid mortgagee policy of title insurance
in an amount acceptable to Lender and insuring that the Deed of Trust creates in favor of
Lender at least second priority Lien on the Collateral described therein. The mortgagee
policy of title insurance will have been issued at Borrower's expense by a title insurance
company acceptable to Lender, will show a state of title and exceptions thereto, if any,
acceptable to Lender, and will contain such endorsements as may be required by Lender;
(g)Survey. The Survey of the Property dated no more than 10 days prior to the
Closing Date and certified to Lender by a registered public surveyor acceptable to
Lender;
7
50243808.1
(h)Easements, etc. Copies of all recorded easements, rights -of -way, restrictive
covenants, leases, encumbrances, and other documents and instruments filed of record
that affect the Collateral, together with evidence satisfactory to Lender that such Property
is properly zoned for its present use;
(i)Insurance Policies. Copies of all insurance policies required by Section 5.06,
together with loss payable and additional insured endorsements in favor of Lender with
respect to all insurance policies covering Collateral and Borrower;
O)UCC, Lien Search. The results of a Uniform Commercial Code, tax Lien and
judgment searches showing all financing statements and other documents or instruments
on file against Borrower with the applicable authority in the jurisdiction of such Person's
principal residence, place of business or chief executive office (as applicable) and such
other jurisdictions requested by Lender, such search to be as of a date no more than 10
days prior to the Closing Date;
(k)Environmental Report. An environmental report addressed to Lender and
prepared by an environmental firm acceptable to Lender certifying that the Property and
Borrower's operations thereon comply with all Environmental Laws, that the Property is
free of Hazardous Materials, and that the Property and any structures thereon are free of
any conditions that present indoor or outdoor air hazards;
(1)Opinion of Counsel. A favorable opinion of legal counsel to Borrower, as to
the matters as Lender may reasonably request;
(m)Independent Public Accountants Letter. A letter in form and substance
acceptable to Lender from Borrower's independent public accountants, pursuant to which
such independent public accountants permit Lender to rely on such independent public
accountants' opinions in connection with the Loan;
(n)Termination of Existing Indebtedness. Evidence that (i) all existing
Indebtedness with respect to the Collateral not otherwise permitted by Section 6.06 have
been or concurrently with the Closing Date are being terminated, and all outstanding
amounts thereunder have been paid in full and (ii) all Liens securing such Indebtedness
with respect to the Collateral have been or concurrently with the Closing Date are being
released;
(o)Attorneys' Fees and Expenses. Evidence that the costs and expenses (including
reasonable attorneys' fees) referred to in Section 8.13, to the extent incurred, will have
been paid in full by Borrower; and
(p)Additional Documentation. Lender will have received such additional
approvals, opinions, instruments or documents as Lender or its legal counsel may request.
ARTICLE IV
Representations and Warranties
Borrower hereby represents and warrants to Lender as follows:
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Section IV.1.Existence Power Compliance with Governmental Requirements. Borrower
and each of its Subsidiaries (a) is a limited liability company duly organized, validly existing and
in good standing, if applicable, under the Governmental Requirements of the jurisdiction of its
organization and all other states where it is doing business, (b) has all requisite power and
authority to execute, deliver and perform the Loan Documents to which it is a parry, to own its
Property, and to conduct its business and (c) is in compliance with all Governmental
Requirements.
Section IV.2.Binding Obligations. The execution, delivery, and performance of this Loan
Agreement and all of the other Loan Documents by Borrower and each of its Subsidiaries have
been duly authorized by all necessary action by Borrower and its Subsidiaries and constitute
legal, valid and binding obligations of Borrower and its Subsidiaries, enforceable in accordance
with their respective terms, except as enforcement of remedies may be limited by Applicable
Bankruptcy Law.
Section IV.3.No Consent. The execution, delivery and performance of this Loan
Agreement and the other Loan Documents, and the consummation of the transactions
contemplated hereby and thereby, do not (a) conflict with, result in a violation of, or constitute a
default under (i) any provision of its charter or organizational documents, or other instrument
binding upon Borrower or any of its Subsidiaries, (ii) any Governmental Requirements or
(iii) any contract, agreement, document or instrument to which Borrower or any of its
Subsidiaries is a party or affecting such Person or the Property of such Person, (b) require the
consent, approval or authorization of or notice to or filing with any third party, not otherwise
obtained and delivered to Lender or (c) result in creation or perfection of a Lien.
Section IVA.Taxes; Governmental Charges. Borrower and each Subsidiary have timely
filed all federal, state and local tax reports and returns required by any Governmental
Requirement to be filed, including, without limitation, all income, franchise, employment,
property and sales tax returns, and have duly paid all their respective liabilities for taxes,
assessments, governmental charges and levies that are due and payable. The reserves reflected
on the balance sheet of Borrower and each Subsidiary are adequate in amount for the payment of
all tax liabilities for Borrower and each Subsidiary, as applicable, accrued through the date of
such balance sheet. To the best of Borrower's knowledge, there is no pending investigation or
audit of Borrower or any Subsidiary by any taxing authority. Furthermore, to the best of
Borrower's knowledge, there is no pending but unassessed tax liability of Borrower or any
Subsidiary or any unresolved questions or claims concerning any tax liability of Borrower or any
Subsidiary.
Section IV.5.No Default. Neither Borrower nor any Subsidiary is in default under or with
respect to any contractual obligation that could, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Change. No Default has occurred and is
continuing or would result from the consummation of the transactions contemplated by this Loan
Agreement or any other Loan Document.
Section IV.6.Financial Statements. The Financial Statements are (a) true, correct and
complete as of the dates specified therein, (b) fully and accurately present the financial condition
and results of operations for the period covered thereby of Borrower and its Subsidiaries, as
applicable, as of the dates specified and (c) prepared in accordance with GAAP. Since the date
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of the Financial Statements, no Material Adverse Change has occurred, except as heretofore
disclosed in writing to Lender, nor has Borrower or any Subsidiary incurred any material
liability, direct or indirect, fixed or contingent. Each of Borrower is solvent.
Section IV.7.Suits, Actions, Etc. There are no investigations, actions, suits or
proceedings pending or to the knowledge of Borrower threatened before or by any Governmental
Authority or arbitration authority against or affecting Borrower or any Subsidiary or the
Collateral, or involving the validity, enforceability or priority of any of the Loan Documents.
Neither Borrower nor any Subsidiary is, and the consummation of the transactions contemplated
hereby and the performance or satisfaction of any of the terms or conditions hereof and of the
other Loan Documents will not cause Borrower or any Subsidiary to be, in violation of or in
default with respect to any Governmental Requirement or in default (or provide cause for
acceleration of Indebtedness) under any mortgage, deed of trust, lease, promissory note, loan
agreement, credit agreement, partnership agreement or other agreement or restriction to which
Borrower or any Subsidiary is a party or by which Borrower or any Subsidiary or the Collateral
may be bound or affected. Borrower's development of the Land and Improvements and any sale
or lease thereof by Borrower are and will be exempt from the registration and reporting
requirements of the Interstate Land Sales Full Disclosure Act and regulations thereunder as
amended from time to time.
Section IV.8.Insurance. Borrower and its Subsidiaries and the Properties of Borrower
and its Subsidiaries are insured with financially sound and reputable insurance companies not
Affiliates of Borrower, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning similar properties in
localities where Borrower or the applicable Subsidiary operates.
Section IV. 9. Subsidiaries. Borrower (a) has no Subsidiaries other than those specifically
disclosed on Schedule 4.09(a), (b) has no equity investments or other interests convertible into
equity in any other corporation or entity other than those specifically disclosed in
Schedule 4.09(b) and (c) has no, and does not transact business under any, assumed names or
trade names other than those specifically disclosed in Schedule 4.09(c).
Section IV. 1O.Ownership of Property; Liens. Borrower and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold interests in, all personal and real
Property, including the Collateral, necessary or used in the ordinary conduct of its business,
except for such defects in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Change. The Collateral is not subject to any Lien other
than Liens in favor of Lender and the First Lien. All Property of Borrower is titled in Borrower's
legal name, and Borrower has not used any other name during the last five years other than the
assumed names or trade names listed on Schedule 4.09(c).
Section IV.I (.Environmental Compliance. Borrower and its Subsidiaries conduct in the
ordinary course of business a review of the effect of existing Environmental Laws and claims
alleging potential liability or responsibility for violation of any Environmental Law on their
respective businesses, operations and properties, and as a result thereof Borrower has reasonably
concluded that such Environmental Laws and claims could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Change.
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Section IV.12.Margin Regulations, Investment Company Act; Public Utility Holding
Company Act.
(a)Borrower is not engaged and will not engage, principally or as one of its
important activities, in the business of purchasing or carrying Margin Stock or extending
credit for the purpose of purchasing or carrying Margin Stock.
(b)None of Borrower, any Person controlling Borrower, or any Subsidiary (i) is a
"holding company," or a "subsidiary company" of a "holding company," or an "affiliate"
of a "holding company" or of a "subsidiary company" of a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, or (ii) is or is required to be
registered as an "investment company" under the Investment Company Act of 1940.
Section IV.13.Disclosure. Borrower has disclosed to Lender all agreements, documents,
instruments and organizational documents or other restrictions to which it, or any of its
Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Change. No report, financial
statement, certificate or other information furnished (whether in writing or orally) by or on
behalf of Borrower or any Subsidiary to Lender in connection with the transactions contemplated
hereby and the negotiation of this Loan Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with respect to
projected financial information, Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
Section IV. 14.Intellectual Propert y. Borrower and its Subsidiaries own, or possess the
right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights,
franchises, licenses, slogans, other advertising products and processes, and other intellectual
property rights that are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person. To the best knowledge of Borrower, no
slogan or other advertising product, process or other material now used by Borrower or any
Subsidiary infringes upon any rights held by any other Person.
Section IV.15.Patriot Act. All capitalized words and phrases and all defined terms used
in the USA Patriot Act of 2001, 107 Public Law 56 (October 26, 2001) (the "Patriot Act ") and in
other statutes and all orders, rules and regulations of the United States government and its
various executive department, agencies and offices related to the subject matter of the Patriot
Act, including, but not limited to, Executive Order 13224 effective September 24, 2001, are
hereinafter collectively referred to as the "Patriot Rules" and are incorporated into this section of
the Loan Agreement. Borrower represents and warrants to Lender that neither it nor any of its
principals, shareholders, members, partners, or Affiliates, as applicable, is a Person named as a
Specially Designated National and Blocked Person (as defined in Presidential Executive Order
13224) and that it is not acting, directly or indirectly, for or on behalf of any such Person.
Borrower further represents and warrants to Lender that Borrower and its principals,
shareholders, members, partners, or Affiliates, as applicable, are not, directly or indirectly,
engaged in, nor facilitating, the transactions contemplated by this Loan Agreement on behalf of
any Person named as a Specially Designated National and Blocked Person. Borrower hereby
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agrees to defend, indemnify and hold harmless Lender from and against any and all claims,
damages, losses, risks, liabilities, and expenses (including reasonable attorneys' fees and costs)
arising from or related to any breach of the foregoing representations and warranties.
ARTICLE V
Affirmative Covenants
Until all Obligations are fully paid and satisfied, Borrower agrees and covenants that it
will, and will cause each Subsidiary to:
Section V.l.Furnish to Lender:
(a)Annual Financial Statements. As soon as available and in any event within
ninety (90) days after the end of each fiscal year of Borrower, a consolidated and
consolidating balance sheet and related statements of income or operations, shareholders'
equity and cash flows of Borrower and its Subsidiaries as of the end of such fiscal year,
in each case prepared by independent public accountants of recognized standing
satisfactory to Lender, accompanied by a report and opinion of such accountants, which
report and opinion shall be prepared in accordance with GAAP and shall not be subject to
any "going concern," "emphasis on going concern," or like qualification or exception, or
any qualification or exception as to the scope of such audit. Borrower (i) shall inform
such independent public accountants that Lender will rely on the results of such financial
statements and any other financial statements provided to Lender and (ii) grants Lender
permission to discuss with such accountants the results of any audit, the field work
undertaken, the Loan and any other matters related to Borrower and any Subsidiary.
(b)Compliance Certificate. A certificate in form acceptable to Lender signed by a
Managerial Official of Borrower, within ninety (90) days after the end of each fiscal year,
stating that Borrower is in full compliance with all of its obligations under this Loan
Agreement and all other Loan Documents and is not in Default of any term or provisions
hereof or thereof.
(c)Tax Returns. Copies of Borrower's income tax returns (federal and state, if
any) within thirty (30) days after the applicable filing date for the tax reporting period
thereof, prepared by a tax professional satisfactory to Lender.
(d)Additional Reports. Such additional information regarding the business,
financial or other affairs of Borrower or any Subsidiary or any Property of Borrower or
any Subsidiary or compliance with the terms of the Loan Documents, as Lender may
from time to time reasonably request.
Section V.2.Notices. Promptly notify Lender:
(a)of the occurrence of any Default;
(b)of any matter that has resulted or could reasonably be expected to result in a
Material Adverse Change, including (i) breach or non - performance of, or any default
under, a contractual obligation of Borrower or any Subsidiary; (ii) any dispute, litigation,
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50243808.1
investigation, proceeding or suspension between Borrower or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material development in,
any litigation or proceeding affecting Borrower or any Subsidiary;
(c)of a change in name of Borrower or a change in the location of Borrower or
any Collateral, in each case, within 30 days prior to such change; and
(d)of any material change in accounting policies or financial reporting practices
by Borrower or any Subsidiary.
Each notice pursuant to this Section will be accompanied by a statement of a Managerial
Official of Borrower setting forth details of the occurrence referred to therein and stating what
action Borrower has taken and proposes to take with respect thereto. Each notice pursuant to this
Section will describe with particularity any and all provisions of this Loan Agreement and any
other Loan Document that have been breached or affected thereby.
Section V.3.Accounts and Records. Maintain its books and records in accordance with
•'
Section V4.Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force
and effect its legal existence and good standing under the Governmental Requirements of the
jurisdiction of its organization and each state in which it is qualified to do business; and (b) take
all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary
or desirable in the normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Change.
Section V.5.Maintenance of Properties. (a) Maintain, preserve and protect all of its
material properties and equipment necessary in the operation of its business in good working
order and condition, ordinary wear and tear excepted; (b) make all necessary repairs thereto and
renewals and replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Change; (c) use the standard of care typical in the industry
in the operation and maintenance of its facilities; and (d) preserve or renew all of its registered
patents, trademarks, trade names and service marks (including licenses thereof), except to the
extent that failure to do so could not reasonably be expected to have a Material Adverse Change.
Section V.6.Maintenance of Insurance. Maintain with financially sound and reputable
insurance companies not Affiliates of Borrower, insurance with respect to its properties and
business against loss or damage of the kinds customarily insured against by Persons engaged in
the same or similar business, including but not limited to, fire insurance, comprehensive property
damage, public liability, worker's compensation, business interruption and other insurance, of
such types and in such amounts as are customarily carried under similar circumstances by such
other Persons and providing for not less than 30 days' prior notice to Lender of termination, lapse
or cancellation of such insurance. Each insurance policy will name Lender as "additional
insured" and "loss payee ". Borrower will deliver to Lender upon Lender's request, copies of
insurance policies or certificates of insurance, each in form and substance satisfactory to Lender.
Section V.7.Right of Inspection. Permit Lender to (a) visit its properties and installations,
(b) examine, audit and make and take away copies or reproductions of its books and records, and
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(c) discuss with its respective directors, partners, principal officers and independent auditors its
respective businesses, assets, liabilities, financial positions, results of operations, and business
prospects, at all reasonable times. Borrower shall be responsible for the reasonable costs and
expenses associated with such inspection. To the extent Borrower maintains any records,
including computer generated records and software programs for the generation of such records
in the possession of a third parry, Borrower will, to the extent such records constitute Collateral,
(i) notify such third parry of Lender's Lien in such records, (ii) cause such party to grant access to
Lender to such records and (iii) provide Lender with copies of any records Lender may request,
all at Borrower's sole cost and expense.
Section V.8.Right to Additional Information. Furnish Lender with such additional
information and statements, lists of assets and liabilities, tax returns, and other reports with
respect to Borrower's or any Subsidiary's financial condition and business operations as Lender
may request from time to time.
Section V.9.Compliance with Governmental Requirements. Conduct its business in an
orderly and efficient manner consistent with good business practices, and perform and comply
with all Governmental Requirements applicable to Borrower, its Subsidiaries, and their
businesses, operations and Property (including without limitation, all applicable Environmental
Laws).
Section V.10.Taxes. Timely pay and discharge when due all of its Indebtedness and
obligations, including without limitation, all assessments, taxes, governmental charges, levies,
Liens and claims, of every kind and nature, imposed upon Borrower, its Subsidiaries or any of
their properties, income, or profits, prior to the earlier of the date on which such obligation
would become delinquent or the date penalties would attach, and all lawful claims that, if unpaid,
might become a Lien or charge upon any of Borrower's or its Subsidiary's properties, income, or
profits; provided, however, Borrower and its Subsidiaries will not be required to pay and
discharge any such assessment, tax, government charge, levy, Lien or claim so long as (a) the
legality of the same will be contested in good faith by appropriate judicial, administrative or
other legal proceedings instituted with reasonable promptness and diligently conducted, and
(b) Borrower and its Subsidiaries will have established on their books adequate reserves with
respect to such contested assessment, tax, government charge, levy, Lien or claim in accordance
with GAAP.
Section V.1 l.Notice of Indebtedness. Promptly inform Lender of the creation, incurrence
or assumption by Borrower or any Subsidiary of any actual or contingent liabilities not permitted
under this Loan Agreement or any other Loan Document.
Section V.12.Additional Documents. Execute and deliver, or cause to be executed and
delivered, to Lender, from time to time as required by Lender, any and all other agreements,
instruments and documents which Lender may reasonably request in order to provide the rights
and remedies to Lender granted or provided for by the Loan Documents or give effect to the
transactions contemplated under this Loan Agreement and the other Loan Documents.
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ARTICLE VI
Neizative Covenants
Until all Obligations are fully paid and satisfied, Borrower will not, nor will it
permit any Subsidiary to, directly or indirectly:
Section VI.1.Nature of Business. Make any material change in the nature of its business
as carried on as of the Closing Date.
Section VI. 2. Liquidations, Mergers, Consolidations. Become a party to a merger or
consolidation, or purchase or otherwise acquire all or a substantial part of the assets of any
Person or any shares or other evidence of beneficial ownership of any Person, or dissolve,
liquidate or cease operations.
Section VI.3.Sale of Assets. Sell, lease, assign, transfer or otherwise dispose of any of its
assets or Properties, other than in the ordinary course of business.
Section VIA.Sale and Leaseback. Enter into any arrangement with any Person pursuant
to which it leases from such Person real or personal Property that has been or is to be sold or
transferred, directly or indirectly, by it to such Person.
Section VI.5.Liens. Create, incur or permit to exist any Lien or encumbrance on any of
the Collateral, other than (a) Liens and security interests securing Indebtedness owing to Lender,
(b) Liens for taxes, assessments or similar charges that are (i) not yet due or (ii) being contested
in good faith by appropriate proceedings and for which Borrower has established adequate
reserves, and (c) Liens and security interests existing as of the Closing Date which have been
disclosed to and approved by Lender in writing.
Section VI.6.Indebtedness. Create, incur, permit or assume any Indebtedness with
respect to the Collateral, other than (a) Indebtedness to Lender, (b) Indebtedness outstanding on
the Closing Date which has been disclosed to and approved by Lender in writing and (c) that
certain Indebtedness in the original principal amount of $ owed by
Borrower to the Schertz Bank & Trust (the "First Lien ").
Section VI.7.Transfer of Ownership. Permit the sale, pledge or other transfer of any of
the ownership interests in Borrower or any Subsidiary.
Section VIXTransactions with Affiliates. Enter into any transaction, including, without
limitation, the purchase, sale or exchange of Property or the rendering of any service, with any
Affiliate of Borrower or any Subsidiary, except in the ordinary course of and pursuant to the
reasonable requirements of Borrower's and its Subsidiaries' business and upon fair and
reasonable terms no less favorable to Borrower or any Subsidiary than would be obtained in a
comparable arm's - length transaction with a Person not an Affiliate of Borrower or any
Subsidiary.
Section VI.9.Use of Proceeds. Use the proceeds for any purpose other than as follows:
direct infrastructure costs associated with the Property, including streets and roads, water and
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sewer utilities, electric and gas utilities, drainage, site improvements, and related improvements,
and not in contravention of any Governmental Requirement or of any Loan Document.
ARTICLE VII
Events of Default
Section VII.I.Events of Default. Each of the following will constitute an "Event of
Default" under this Loan Agreement:
(a)The failure, refusal or neglect of Borrower to pay when due any part of the
principal of, or interest on, the Notes or any other Obligations by Borrower from time to
time.
(b)The failure of Borrower or any Subsidiary to timely and properly observe, keep
or perform any covenant, agreement or condition required in Articles IV, V and VI.
(c)The failure of Borrower or any Subsidiary to timely and properly observe, keep
or perform any covenant, agreement or condition required herein (other than as specified
in clauses a and fb ,, above) or in any of the other Loan Documents and the failure of
Borrower or any Subsidiary to cure such default within 30 days after written notice from
Lender specifying such default, provided that if such default or violation is susceptible of
being remedied, but such remedy can not reasonably be accomplished within the initial
30 day cure period, no Event of Default will be deemed to have occurred so long as
Borrower or any Subsidiary is diligently pursuing such remedy and is successful in
curing the default or violation to the reasonable satisfaction of Lender within such
additional period of time as may be necessary to effect the remedy, not to exceed in any
event an additional 60 days following the end of the initial cure period.
(d)Any representation or warranty contained herein, in any of the other Loan
Documents or in any other document ever delivered by Borrower or any Subsidiary to
Lender in connection with the Obligations is false, misleading, erroneous or breached in
any material respect.
(e)If Borrower or any Subsidiary: (i) becomes insolvent, or makes a transfer in
fraud of creditors, or makes an assignment for the benefit of creditors, or admits in
writing its inability to or is unable to pay its debts as they become due; (ii) generally is
not paying its debts as such debts become due; (iii) has a receiver, trustee or custodian
appointed for, or take possession of, all or substantially all of the assets of such party,
either in a proceeding brought by such parry or in a proceeding brought against such
party and such appointment is not discharged or such possession is not terminated within
60 days after the effective date thereof or such party consents to or acquiesces in such
appointment or possession; (iv) files a petition for relief under the Applicable Bankruptcy
Laws or an involuntary petition for relief is filed against such party under any Applicable
Bankruptcy Law, or an order for relief naming such party is entered under any Applicable
Bankruptcy Law, or any composition, rearrangement, extension, reorganization or other
relief of debtors now or hereafter existing is requested or consented to by such party;
(v) fails to have discharged within a period of 30 days any attachment, sequestration or
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50243808.1
similar writ levied upon any Property of such party; or (vi) fails to pay within 30 days
any final money judgment against such party.
(f)A levy against the Property or any part thereof, or against any material portion
of Borrower's other property, or any execution, garnishment, attachment, sequestration or
other writ or similar proceeding which is not permanently dismissed or discharged within
30 days after such levy.
(g)Abandonment of any portion of the Property or of any material portion of any
of the other property of Borrower.
(h)The dissolution, liquidation, termination or forfeiture of right to do business of
Borrower or any Subsidiary.
(i)Borrower or any Subsidiary will have (i) concealed, removed, or permitted to
be concealed or removed any part of its Property with the intent to hinder, delay or
defraud any of its creditors; or (ii) made or suffered a transfer of any of its Property
which may be fraudulent under any bankruptcy, fraudulent conveyance or similar
Governmental Requirement; or (iii) suffered or permitted while insolvent (under any
applicable definition of the term) any creditor to obtain a Lien upon any of its Property
through legal proceedings or distraint which Lien is not permanently vacated within 30
days from the Closing Date.
O)The occurrence of a Material Adverse Change.
(k)The occurrence of any default under any lease covering any portion of the
Property or the repudiation, termination or attempted repudiation or termination of any
such lease.
(1)Any Loan Document or any provision thereof ceases to be in full force and
effect; or Borrower or any other Person contests the validity or enforceability of any Loan
Document or any provision thereof; or Borrower denies that it has any or further liability
or obligation under any Loan Document, or purports to revoke, terminate or rescind any
Loan Document or any provision thereof.
Nothing contained in this Loan Agreement will be construed to limit the events of default
enumerated in any of the other Loan Documents and all such events of default will be
cumulative.
Section VII.2.Remedies. Upon the occurrence of any Event of Default, (a) the entire
unpaid balance of principal of the Notes, together with all accrued but unpaid interest thereon,
and all other Indebtedness owing to Lender by Borrower at such time will, at the option of
Lender, become immediately due and payable without further notice, demand, presentation,
notice of dishonor, notice of intent to accelerate, notice of acceleration, protest or notice of
protest of any kind, all of which are expressly waived by Borrower, (b) reduce any claim to
judgment, and (b) exercise any and all rights and remedies afforded by any of the Loan
Documents, or by law or equity or otherwise, as Lender will deem appropriate. All rights and
remedies of Lender set forth in this Loan Agreement and in any of the other Loan Documents
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may be exercised by Lender at its option and in its sole discretion, upon the occurrence of an
Event of Default.
Section VII.3.Right of Setoff. If an Event of Default shall have occurred and be
continuing, Lender and its Affiliates are hereby authorized at any time and from time to time, to
the fullest extent not prohibited by applicable Governmental Requirements, to set off and apply
any and all deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any time owing by
Lender or any such Affiliate to or for the credit or the account of Borrower against any and all of
the Obligations now or hereafter existing under this Loan Agreement or any other Loan
Document, irrespective of whether or not Lender shall have made any demand under this Loan
Agreement or any other Loan Document and although the Obligations may be contingent or
unmatured or are owed to a branch or office of Lender different from the branch or office
holding such deposit or obligated on such Indebtedness. The rights of Lender and its Affiliates
under this Section are in addition to other rights and remedies (including other rights of setoff)
that Lender or its Affiliates may have. Lender agrees to notify Borrower promptly after any such
setoff and application, provided that the failure to give such notice shall not affect the validity of
such setoff and application.
Section VII.4.Performance by Lender. Should any covenant, duty, or agreement of
Borrower fail to be performed in accordance with the terms of the Loan Documents, Lender
may, at its option, perform, or attempt to perform, such covenant, duty or agreement on behalf of
Borrower. In such event, Borrower will pay to Lender on demand any amount expended by
Lender in such performance or attempted performance, together with interest thereon at the rate
provided in the Notes for past -due principal from the date of such expenditure by Lender until
paid. Notwithstanding the foregoing, it is expressly understood that Lender does not assume and
will never have any liability or responsibility for the performance of any duties of Borrower
hereunder. Without limiting the generality of the foregoing, upon the occurrence of an Event of
Default, Lender will have the right, in addition to any other right of Lender, but not the
obligation, in its own name or in the name of Borrower, to enter into possession of the Property.
Section VII.5.Rights Cumulative; Election of Remedies. All rights and remedies of
Lender under the terms of this Loan Agreement will be cumulative of, and in addition to, the
rights and remedies of Lender under any and all other agreements between Borrower and Lender
(including, but not limited to, the other Loan Documents), and not in substitution or diminution
of any rights and remedies now or hereafter held by Lender under the terms of any other
agreement. Such rights and remedies may be pursued separately, successively or concurrently
against Borrower or any Property covered under the Loan Documents at the sole discretion of
Lender. The exercise or failure to exercise any of the same will not constitute a waiver or release
thereof or of any other Right, and the same will be nonexclusive.
Section VII.6. Waiver of Deficiency Statute. In the event an interest in any of the
Collateral is foreclosed upon pursuant to a judicial or nonjudicial foreclosure sale, Borrower
agrees, notwithstanding the provisions of Sections 51.003, 51.004 and 51.005 of the Texas
Property Code (as the same may be amended from time to time), and to the extent not prohibited
by Governmental Requirements, that Lender shall be entitled to seek a deficiency judgment from
Borrower equal to the difference between the Obligations and the amount for which the
Collateral was sold pursuant to judicial or nonjudicial foreclosure sale. Borrower acknowledges
18
50243808.1
and agrees that this waiver creates an irrebuttable presumption that the foreclosure sale price is
equal to the fair market value of the Collateral for purposes of calculating deficiencies owed by
Borrower and others against whom recovery of a deficiency is sought.
ARTICLE VIII
Miscellaneous
Section VIII.1.Waiver and Agreement. Neither the failure nor any delay on the part of
Lender to exercise any right, remedy, power or privilege herein or under any of the other Loan
Documents will operate as a waiver thereof, nor will any single or partial exercise of such right,
remedy, power or privilege preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. No waiver of any provision in this Loan Agreement or
in any of the other Loan Documents and no departure by Borrower therefrom will be effective
unless the same will be in writing and signed by Lender, and then will be effective only in the
specific instance and for the purpose for which given and to the extent specified in such writing.
No modification or amendment to this Loan Agreement or to any of the other Loan Documents
will be valid or effective unless the same is signed by the party against whom it is sought to be
enforced.
Section VIII.2.Benefits. This Loan Agreement will be binding upon and inure to the
benefit of Lender and Borrower, and their respective successors and assigns, provided, however,
that Borrower may not, without the prior written consent of Lender, assign or encumber any
interests, rights, remedies, powers, duties or obligations under this Loan Agreement or any of the
other Loan Documents.
Section VIII.3.Notices.
(a)All notices, requests, demands or other communications required or permitted
to be given pursuant to this Loan Agreement shall be in writing and given by (i) personal
delivery, (ii) expedited delivery service with proof of delivery, or (iii) United States mail,
postage prepaid, registered or certified mail, return receipt requested, sent to the intended
addressee at the address set forth on the first page hereof and will be deemed to have
been received either, in the case of personal delivery, as of the time of personal delivery,
in the case of expedited delivery service, as of the date of first attempted delivery at the
address and in the manner provided herein, or in the case of mail, upon deposit in a
depository receptacle under the care and custody of the United States Postal Service.
Either party will have the right to change its address for notice hereunder to any other
location within the continental United States by notice to the other parry of such new
address at least 30 days prior to the effective date of such new address.
(b)Borrower and Lender agree that no notices or other communications by
electronic means between such parties or their representatives in connection with this
Loan Agreement or any instrument executed in connection herewith shall constitute a
transaction, agreement, contract or electronic signature under the Electronic Signatures in
Global and National Commerce Act, any version of the Uniform Electronic Transactions
Act or any other statute governing electronic transactions, unless otherwise specifically
agreed to in writing.
19
50243808.1
Section VIIIA. Continuation and Survival. All covenants, agreements, representations
and warranties made in or pursuant to this Loan Agreement and the other Loan Documents will
be deemed continuing and made at and as of the date of this Loan Agreement and at and as of all
times thereafter. All statements contained in any certificate, financial statement, legal opinion or
other instrument delivered by or on behalf of Borrower or its Subsidiaries pursuant to or in
connection with any of the Loan Documents will constitute additional representations and
warranties made under this Loan Agreement. All covenants, agreements, representations and
warranties made in or pursuant to this Loan Agreement and the other Loan Documents will
survive until payment in full of all sums owing and performance of all other obligations
hereunder by Borrower to Lender and will not be waived by the execution and delivery of this
Loan Agreement, completion of construction of the Improvements, any investigation by Lender
or any other event except a specific written waiver by Lender.
Section VIII.5.Controlling Agreement. The parties hereto intend to conform strictly to
the applicable usury Governmental Requirements. In no event, whether by reason of demand for
payment or acceleration of the maturity of the Obligations or otherwise, will the interest
contracted for, charged or received by Lender hereunder or otherwise exceed the maximum
amount permissible under applicable Governmental Requirements. If, from any circumstance
whatsoever, interest would otherwise be payable to Lender in excess of the maximum lawful
amount, the interest payable to Lender will be reduced automatically to the maximum amount
permitted under applicable Governmental Requirements. If Lender will ever receive anything of
value deemed interest under applicable Governmental Requirements which would apart from this
provision be in excess of the maximum lawful amount, an amount equal to any amount which
would have been excessive interest will be applied to the reduction of the principal amount
owing on the Obligations in the inverse order of its maturity and not to the payment of interest,
or if such amount which would have been excessive interest exceeds the unpaid principal balance
of the Obligations, such excess will be refunded to Borrower. The interest and any other
amounts that would have been payable in respect of any portion of the Obligations or during any
period but were not payable as a result of the operation of this Section shall be cumulated and the
interest and other amounts on any other portion of the Obligations or periods shall be increased
(but not above the maximum amount permitted under applicable Governmental Requirement)
until such cumulated amount shall have been received by Lender. All interest paid or agreed to
be paid to Lender will, to the extent permitted by applicable Governmental Requirements, be
amortized, prorated, allocated and spread throughout the full stated term (including any renewal
or extension) of such Indebtedness so that the amount of interest on account of such
Indebtedness does not exceed the maximum permitted by applicable Governmental
Requirements. The provisions of this Section will control all existing and future agreements
between Borrower and Lender.
Section VIII.6.No Third Party Beneficiary. This Loan Agreement is for the sole benefit
of Lender and Borrower and is not for the benefit of any third party.
Section VIII.7.Lender's Consent or Approval. Except where otherwise expressly
provided in the Loan Documents, in any instance where the approval, consent or the exercise of
judgment of Lender is required, the granting or denial of such approval or consent and the
exercise of such judgment will be (a) within the sole discretion of Lender; and (b) deemed to
have been given only by a specific writing intended for the purpose and executed by Lender.
20
50243808.1
Each provision for consent, approval, inspection, review, or verification by Lender is for
Lender's own purposes and benefit only.
Section VIII.8.Applicable Governmental Requirements. This Loan Agreement and the
other Loan Documents have been executed and delivered in the State of Texas, are performable
in Texas, and will be governed by and construed in accordance with the Governmental
Requirements of the State of Texas and the Governmental Requirements of the United States
applicable to transactions within the State of Texas. Except to the extent that the Governmental
Requirements of the United States may apply to the terms hereof, the substantive Governmental
Requirements of the State of Texas shall govern the validity, construction, enforcement and
interpretation of this Loan Agreement and the other Loan Documents. To the extent that Chapter
303 of the Texas Finance Code is applicable to any Loan or any Loan Document, the "WEEKLY
CEILING" specified in such article is the applicable ceiling; provided that, if any applicable
Governmental Requirement permits greater interest, the Governmental Requirement permitting
the greatest interest will apply.
Section VIII.9.Loan Agreement Governs. This Loan Agreement, together with the other
Loan Documents, comprise the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject
matter. In the event of any conflict between the terms of this Loan Agreement and any terms of
any other Loan Document, the terms of this Loan Agreement will govern; provided, that the
inclusion of supplemental rights or remedies in favor of Lender in any other Loan Document will
not be deemed a conflict with this Loan Agreement. Each Loan Document was drafted with the
joint participation of the respective parties thereto and will be construed neither against nor in
favor of any parry, but rather in accordance with the fair meaning thereof.
Section VIII.1 O.Time of Essence. Time will be of the essence in this Loan Agreement.
Section VIII.I l.Patriot Act Notice. Lender hereby notifies Borrower that pursuant to the
requirements of the Patriot Act, it is required to obtain, verify and record information that
identifies Borrower, which information includes the name and address of Borrower and other
information that will allow Lender to identify Borrower in accordance with the Act.
Section VIII.12.Invalid Provisions. If any provision of this Loan Agreement or any of
the other Loan Documents is held to be illegal, invalid or unenforceable under present or future
Governmental Requirements, such provision will be fully severable and the remaining provisions
of this Loan Agreement or any of the other Loan Documents will remain in full force and effect
and will not be affected by the illegal, invalid or unenforceable provision or by its severance.
Section VIII. I 3.Expenses of Lender. Borrower shall pay to Lender on demand: (a) all
costs and expenses incurred by Lender in connection with the preparation, negotiation, execution
and administration of this Loan Agreement and the other Loan Documents and any and all
amendments, modifications, renewals, extensions, increases, and supplements thereof and
thereto, including, without limitation, the fees and expenses of Lender's legal counsel and
professionals, (b) all costs and expenses incurred by Lender in connection with the enforcement,
workout or restructure of this Loan Agreement or any other Loan Document, including, without
limitation, the fees and expenses of Lender's legal counsel and professionals, and (c) all other
costs and expenses incurred by Lender in connection with this Loan Agreement or any other
21
50243808.1
Loan Document, including, without limitation, all costs, expenses, taxes, assessments, filing fees,
and other charges levied by a Governmental Authority or otherwise payable in respect of this
Loan Agreement or any other Loan Document.
Section VIII. I4.INDEMNIFICATION OF LENDER. BORROWER SHALL
INDEMNIFY AND HOLD LENDER, ITS AFFILIATES AND LENDER'S SUCCESSORS
AND ASSIGNS (EACH SUCH PERSON HEREIN REFERRED TO AS AN
"INDEMNITEE ") ABSOLUTELY HARMLESS FROM AND AGAINST ALL CLAIMS,
LIABILITIES, LOSSES, DAMAGES, OBLIGATIONS OR RELATED EXPENSES
INCURRED BY OR IMPOSED UPON OR ALLEGED TO BE DUE OF INDEMNITEE
IN CONNECTION WITH (a) THE EXECUTION OR DELIVERY OF THIS LOAN
AGREEMENT, ANY OTHER LOAN DOCUMENT OR ANY OTHER AGREEMENT OR
INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE
BY THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER
OR THEREUNDER, THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY, OR, IN THE CASE OF LENDER, THE
ADMINISTRATION OF THIS LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS, (b) ANY LOAN OR THE USE OR PROPOSED USE OF THE
PROCEEDS THEREFROM, (c) ANY ACTUAL OR ALLEGED PRESENCE OR
RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED
OR OPERATED BY BORROWER OR ANY SUBSIDIARY, OR ANY
ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO BORROWER OR ANY
SUBSIDIARY, OR (d) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION,
INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING,
WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY, WHETHER
BROUGHT BY A THIRD PARTY OR BY BORROWER, AND REGARDLESS OF
WHETHER ANY INDEMNITEE IS A PARTY THERETO, IN ALL CASES, WHETHER
OR NOT CAUSED BY OR ARISING, IN WHOLE OR IN PARTY, OUT OF THE
COMPARATIVE, CONTRIBUTORY OR SOLE NEGLIGENCE OF THE
INDEMNITEE; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY
INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH CLAIMS,
LIABILITIES, LOSSES, DAMAGES, OBLIGATIONS OR RELATED EXPENSES (i)
ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND
NONAPPEALABLE JUDGMENT TO HAVE RESULTED BY GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR (ii) RESULT FROM A
CLAIM BROUGHT BY BORROWER AGAINST AN INDEMNITEE FOR BREACH IN
BAD FAITH OF SUCH INDEMNITEE'S OBLIGATIONS HEREUNDER OR ANY
OTHER LOAN DOCUMENT, IF BORROWER HAS OBTAINED A FINAL AND
NONAPPEALABLE JUDGMENT IN ITS FAVOR ON SUCH CLAIM AS
DETERMINED BY A COURT OF COMPETENT JURISDICTION. IN THE EVENT OF
COURT ACTION IN CONNECTION WITH ANY SUCH CLAIM OR DEMAND,
BORROWER WILL ASSUME, TO THE EXTENT REQUESTED BY LENDER, THE
RESPONSIBILITY FOR THE DEFENSE OF ANY SUCH ACTION AND WILL
IMMEDIATELY SATISFY AND DISCHARGE ANY FINAL DECREE OR JUDGMENT
RENDERED THEREIN. LENDER MAY, IN ITS SOLE DISCRETION, MAKE ANY
PAYMENTS SUSTAINED OR INCURRED BY REASON OF ANY OF THE
FOREGOING, AND BORROWER WILL IMMEDIATELY REPAY TO LENDER IN
22
50243808.1
CASH THE AMOUNT OF SUCH PAYMENT, WITH INTEREST THEREON AT THE
RATE SPECIFIED IN THE NOTES TO BE APPLICABLE TO PAST -DUE PRINCIPAL.
LENDER WILL HAVE THE RIGHT TO JOIN BORROWER AND ITS SUBSIDIARIES
AS PARTIES DEFENDANT IN ANY LEGAL ACTION BROUGHT AGAINST LENDER,
AND BORROWER HEREBY CONSENTS TO THE ENTRY OF AN ORDER MAKING
BORROWER AND ITS SUBSIDIARIES AS PARTIES DEFENDANT TO ANY SUCH
ACTION.
Section VIII. 15.Participation of the Loan. Borrower agrees that Lender may, at its
option, sell interests in the Loan and its rights and remedies under this Loan Agreement to one or
more financial institutions or other Person acceptable to Lender and, in connection with each
such sale, Lender may disclose any financial and other information available to Lender
concerning Borrower to each prospective purchaser.
Section VIII. I 6.Conflicts. In the event any term or provision hereof is inconsistent with
or conflicts with any provision of the other Loan Documents, the terms and provisions contained
in this Loan Agreement will be controlling.
Section VIII.17.Counterparts; Facsimile Documents and Signatures. This Loan
Agreement may be separately executed in any number of counterparts, each of which will be an
original, but all of which, taken together, will be deemed to constitute one and the same
instrument. For purposes of negotiating and finalizing this Loan Agreement, if this document or
any document executed in connection with it is transmitted by facsimile machine, electronic mail
or other electronic transmission, it will be treated for all purposes as an original document.
Additionally, the signature of any party on this document transmitted by way of a facsimile
machine or electronic mail will be considered for all purposes as an original signature. Any such
faxed document will be considered to have the same binding legal effect as an original
document. At the request of any party, any faxed or electronically transmitted document will be
re- executed by each signatory party in an original form.
Section VIII. 18.Imag',ing of Documents. Borrower understands and agrees that (a)
Lender's document retention policy may involve the electronic imaging of executed Loan
Documents and the destruction of the paper originals, and (b) Borrower waives any right that it
may have to claim that the imaged copies of the Loan Documents are not originals.
Section VIII.19.No Oral Agreements. The term "WRITTEN AGREEMENT" will
include this Loan Agreement, together with each and every other document relating to and/or
securing the Obligations, regardless of the date of execution. THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[Remainder of Page Intentionally Left Blank]
23
50243808.1
Executed as of the date first written above.
:1 "1 •
SPV Ventures, LLC,
a Texas limited liability company,
d/b /a Schertz Parkway Ventures, LLC
Z414Z 91
Jesse M. Hellums
Title: President
LENDER:
City of Schertz Economic Development
Corporation
By: �� c u�� &h'i
Name: -�5 u (::--4
Title:
50243808.2
Schedule 1
Real Estate
Being Lot 1 (a 7.600 acres tract), Block 1, situated in the City of Schertz, Guadalupe County, Texas,
being put of the SPY, LLC Subdivision as recorded in Volume 7, Page 366 of the Deed and Plat
Records of Guadalupe County, Texas.
Said Lot 1, a 7.600 acre tract, being more particularly described by metes and bounds as follows:
BEGINNING: at a bolt found along the north boundary line of Lot 8 of the Live Oak Hills
Subdivision as recorded in Volume 2, Pages 146 -147 of the Deed and Plat Records of Guadalupe
County, Texas, and being the southwest corner of Lot 2 of the Harden Subdivision as recorded in
Volume 4, Pages 100 -102 of the Deed and Plat Records of Guadalupe County, Texas and also being
the southeast corner and POINT OF BEGINNING of this herein described tract;
THENCE: S. 60° 31' 06" W. (being bearing basis) along the north line of said Live Oak Hills
Subdivision a distance of 513.59 feet (called 51.6.64') to a 1/2" iron rod set along the east right -of
way line of Schertz Parkway for the southwest corner of this herein described tract,
THENCE: N. 29° 20' 16" W. a distance of 98.07 feet (called N. 29° 31' 12" W. 97.99') along the
same said east right -of -way line of Schertz Parkway to a 1/2" iron rod set for a point of curvature of
this herein described tract;
THENCE: with a curve to right said curve having a radius of 700.00 feet, an are length of 598.41
feet, a central angle of 48° 58'49", a chord bearing and distance of N. 04° 42' 33" W. 580.35 feet to
a 1./2" .iron rod set along the east right -of -way line of Schertz Parkway for the point of tangent of
this curve and also being the point of reverse curvature of this herein described tract;
THENCE: with a curve to the left said curve having a radius of 786.00 feet, an are length of 676.11
feet (failed 676.27'), a central angle of 49° 17' 50 ", a chord bearing and distance of N. 04° 49' 39"
W. 655.61 feet to a 1/2" iron rod set along the west boundary line of said Harden Subdivision and
being the east right -of -way of same said Schertz Parkway for the corner of this herein described
tract;
THENCE: S. 29° 27'49" E. (called S. 29° 49'28" E. 1221.62') along an existing fence line and
being the west boundary line of said Harden Subdivision a distance of 1222.04 feet to the
POINT OF BEGINNING and containing 7.600 acres or 330,988 square feet of land, more or
less.
Bearing Basis- S. 60° 31 '06" W. - from the south boundary line of said Lot 1, Block 1, of the
SPV, LLC, Subdivision as recorded in Volume 7, Page 366 of the Deed Records of Guadalupe
County, Texas.
50243808.1
Schedule 4.09(a)
Subsidiaries
50243808.1
Schedule 4.09(b)
EauityInvestments
50243808.1
Schedule 4.09(c)
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