CREDIT AGREEMENT between SANDERS MORRIS HARRIS GROUP INC., as Borrower and PROSPERITY BANK, as Lender Dated as of May 11, 2009

3 Include bracketed text if the Grantor is a guarantor.

 

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"Transfer" means, when used as a noun, any sale, conveyance, assignment, lease or other transfer and, when used as a verb, to sell, convey, assign, lease or otherwise transfer, in each case (i) whether voluntary or involuntary, (ii) whether direct or indirect and (iii) including any agreement providing for a Transfer or granting any right or option providing for a Transfer.

 

"UCC" means the Uniform Commercial Code as in effect in the State in which the Land and Improvements are located provided that if by reason of mandatory provisions of law, the perfection or the effect of perfection or non-perfection of the Lien on any Property is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State in which the Land and Improvements are located, UCC means the Uniform Commercial Code as in effect in such jurisdictions for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection.

 

Section 1.02.     Terminology.  Unless the context clearly indicates a contrary intent or unless otherwise specifically provided in this Deed of Trust, (a) the word "Grantor" means "each Grantor or any subsequent owner or owners of the Property or any part thereof or interest therein," the word "Beneficiary" means the "Beneficiary or any successor agent for the Secured Parties," the word "Trustee" means the "Trustee and any substitute or successor trustee hereunder"; (b) words that include a number of constituent parts, things or elements, including the terms Land, Improvements, Equipment, Minerals, Obligations, Premises and Property shall be construed as referring to each constituent part, thing or element thereof, as well as to all of such constituent parts, things or elements taken as a whole; (c) whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa; (d) references to any Person shall include such Person's successors and assigns and in the case of an individual, the word "successors" includes such Person's heirs, devisees, legatees, executors, administrators and personal representatives; (e) references to any statute or other law shall include all applicable rules, regulations and orders adopted or made thereunder and all statutes or other laws amending, consolidating or replacing the statute or law referred to; (f) the words "include" and "including", and words of similar import, shall be deemed to be followed by the words "without limitation"; (g) the words "hereto", "herein", "hereof" and "hereunder", and words of similar import, refer to this Deed of Trust in its entirety; (h) references to Articles, Sections, Schedules, Exhibits, subsections, paragraphs and clauses are to the Articles, Sections, Schedules, Exhibits, subsections, paragraphs and clauses of this Deed of Trust; (i) the titles and headings of Articles, Sections, Schedules, Exhibits, subsections, paragraphs and clauses are inserted as a matter of reference only and shall not in any way alter, modify or define, or affect the construction of, this Deed of Trust; (j) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented, extended, renewed or otherwise modified (subject to any restrictions on such amendments, restatements, supplements, extensions, renewals or modifications set forth herein or in the Credit Agreement); (j) all obligations of the Grantor hereunder shall be satisfied by the Grantor at the Grantor's sole cost and expense; (k) the expressions "payment in full," "paid in full" and any other similar terms or phrases when used herein with respect to the Obligations shall mean the unconditional, final, indefeasible and irrevocable payment in full, in immediately available funds, of all of the Obligations; and (l) all rights and powers granted to or for the benefit of the Beneficiary shall be deemed to be coupled with an interest and be irrevocable.

 

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Section 1.03.    Resolution of Drafting Ambiguities.  The Grantor acknowledges that it was represented by counsel in connection with this Deed of Trust, that it and its counsel reviewed and participated in the preparation and negotiation of this Deed of Trust and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party or the Grantor shall not be employed in the interpretation of this Deed of Trust.

 

ARTICLE II

 

GRANTING CLAUSES

 

Section 2.01.     Grant of Lien.  To secure the due and punctual payment, performance and observance of the Obligations, the Grantor by these presents does hereby GRANT, BARGAIN, SELL, ASSIGN, TRANSFER, WARRANT AND CONVEY, unto the Trustee and the Trustee's successors, assigns and substitutes, in trust, WITH POWER OF SALE and right of entry and possession, for the use and benefit of the Beneficiary, and (to the extent covered by the UCC) does hereby GRANT to the Beneficiary a continuing security interest in, all of the Grantor's right, title, interest and estate in, to and under any and all of the following property, rights, interests and estates, whether now owned or existing or hereafter arising or acquired (collectively, the "Property"):

 

(a)           the lots, pieces, tracts or parcels of land located in [______] County, Texas, more particularly described in Exhibit A (the "Land");

 

(b)           all buildings, structures, foundations, facilities and other improvements of every kind and description now or hereafter located on or affixed or attached to the Land or any part thereof, including all parking areas, roads, driveways, walks, fences, walls, berms, recreation facilities, drainage facilities, lighting facilities and other site improvements; all water, sanitary and storm sewer, drainage, electricity, steam, gas, telephone, telecommunications and other utility equipment and facilities; all plumbing, lighting, heating, ventilating, air-conditioning, refrigerating, incinerating, compacting, fire protection and sprinkler, surveillance and security, vacuum cleaning, public address and communications equipment and systems; all screens, awnings, floor coverings, partitions, elevators, escalators, motors, machinery, pipes, fittings and other items of equipment and personal property of every kind and description now or hereafter located on or affixed or attached to the Land or attached or affixed to or located in or on the Improvements which by the nature of their location thereon or attachment thereto are real property under applicable law; and including all materials intended for the construction, reconstruction, repair, replacement, alteration, addition or improvement of or to such buildings, structures, equipment, fixtures, and improvements, all of which materials shall be deemed to be part of the Property immediately upon delivery thereof on the Land and to be part of the improvements immediately upon their incorporation therein (the foregoing being collectively called the "Improvements");

 

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(c)           all equipment, machinery, fixtures, chattels and other property now or hereafter located on, or in, or affixed to, the Land or the Improvements, whether or not affixed thereto and which are not real property under applicable law, including all partitions, screens, awnings, shades, blinds, curtains, draperies, carpets, rugs, furniture and furnishings; all heating, lighting, plumbing, ventilating, air conditioning, refrigerating, gas, steam, electrical, incinerating, compacting, water treatment, pollution control, and communications systems, fixtures and equipment; all elevators, ovens, stoves, ranges, other kitchen and laundry appliances, vacuum and other cleaning systems, call systems, switchboards, sprinkler systems and other fire prevention, alarm and extinguishing apparatus; and all materials, motors, machinery, pipes, conduits, dynamos, engines, compressors, generators, boilers, stokers, furnaces, pumps, trunks, ducts, pipes, appliances, equipment, utensils, tools, implements, fittings and fixtures and including any of the foregoing that is temporarily removed from the Land or the Improvements to be repaired and later reinstalled thereon or therein (all of the foregoing being collectively called the "Equipment";

 

(d)           all tenements, hereditaments and appurtenances now or hereafter relating to the Premises; all streets, roads, sidewalks and alleys abutting the Premises; all strips and gores within or adjoining the Land; all land in the bed of any body of water adjacent to the Land; all land adjoining the Land created by artificial means or by accretion; all air space and rights to use air space above the Land; all development or similar rights now or hereafter appurtenant to the Land; all rights of ingress and egress now or hereafter appertaining to the Premises; all easements, servitudes, privileges and rights of way now or hereafter appertaining to the Premises; and all royalties and other rights now or hereafter appertaining to the use and enjoyment of the Premises, including alley, party walls, support, drainage, crop, timber, agricultural, horticultural, oil, gas and other mineral, water stock, riparian and other water rights now or hereafter appertaining to the use and enjoyment of the Premises;

 

(e)           all substances in, on, under, or above the Land or any part thereof which are now, or may become in the future, intrinsically valuable and which now or may in the future be enjoyed through extraction or removal from the Land or any part thereof, including, without limitation, all oil, gas, and all other hydrocarbons, coal, lignite, carbon dioxide and all other nonhydrocarbon gas, uranium and all other radioactive substances, and gold, silver, copper, iron and all other metallic substances or ores (the foregoing being collectively called the "Minerals");

 

(f)           all leases, master leases, subleases, underlettings, concession agreements, management agreements, occupancy agreements, licenses and other agreements, whether written or oral and whether or not of record, now existing or hereafter entered into, granting a possessory interest in and to, or relating to or affecting, the enjoyment, occupancy, operation, possession or use of the Premises or any part thereof (including, without limitation, all leases involving Minerals), together with all guarantees and other supporting obligations of the obligations of any Person thereunder and all security, deposits and payments, security interests and contractual Liens made or existing in connection therewith (the foregoing being collectively called the "Leases");

 

(g)           all rents, royalties, issues, profits, receipts, revenue, income and other benefits now or hereafter accruing or payable with respect to the Premises or any part thereof, including all rents and other sums now or hereafter payable pursuant to the Leases; all other sums now or hereafter payable with respect to the use, occupancy, management, operation or control of the Premises or any part thereof; and all other claims, rights and remedies now or hereafter belonging or accruing or payable with respect to the Premises or any part thereof or the Leases, including fixed, additional and percentage rents, occupancy charges, security deposits, parking, maintenance, common area, tax, insurance, utility and service charges and contributions (whether collected under the Leases or otherwise), proceeds of sale of electricity, gas, heating, air-conditioning and other utilities and services (whether collected under the Leases or otherwise), and deficiency rents and liquidated damages following default or cancellation (all of the foregoing being collectively called the "Rents");

 

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(h)           all Insurance Policies (including all unearned premiums and dividends thereunder);

 

(i)            all guarantees, indemnities, and warranties relating to the Premises; all supply and service contracts for water, sanitary and storm sewer, drainage, electricity, steam, gas, telephone and other utilities now or hereafter relating to the Premises; and all other contracts and agreements (other than Leases) affecting or relating to the construction, use, maintenance, management, ownership, operation, repair, servicing, enjoyment or occupancy of the Premises (the foregoing being collectively called the "Related Agreements");

 

(j)            all licenses, permits, certificates, variances, consents, approvals and other authorizations now or hereafter required for or relating to the Premises or the construction, use, maintenance, management, ownership, operation, enjoyment or occupancy thereof (the foregoing being collectively called the "Permits");

 

(k)           all books and records, including tenant files, credit files, customer files, drawings, designs, plans, specifications, computer print outs, files, programs and other computer and electronic materials and records, now or hereafter relating to the construction, use, maintenance, management, ownership, operation, enjoyment or occupancy of the Premises;

 

(l)           all money now or subsequently on deposit for the payment of real estate taxes or assessments against the Premises or for the payment of premiums on Insurance Policies and all tax refunds, rebates or credits payable with respect to or arising in connection with any of the Property;

 

(m)          all trade names, trademarks, logos, symbols, copyrights, patents, goodwill and other intellectual property relating to or existing or arising from or in connection with the Premises or any part thereof;

 

(n)           all accounts, chattel paper, commercial tort claims, deposit accounts, documents, general intangibles, goods, instruments, inventory, investment property, letters of credit, letter-of-credit rights, supporting obligations and all other personal property of any kind or character, located on, relating to, derived from or arising in connection with the use, ownership, management, operation, enjoyment or occupancy of the Premises;

 

(o)           all reserves, deposits, escrows or impounds required hereunder or under the Credit Agreement or any other Loan Document;

 

(p)           all extensions, improvements, betterments, renewals, substitutions and replacements of, and additions and appurtenances to, any of the Property hereafter acquired by or released to the Grantor or constructed or located on, or attached to, the Property, in each case, immediately upon such acquisition, release, construction, location or attachment, without any further conveyance, mortgage, assignment or other act by the Grantor; and all property and rights which are, by the provisions of the Loan Documents, required to be subjected to the Lien hereof; and all other property and rights which are by any instrument or otherwise subjected to the Lien hereof by the Grantor or by anyone acting on its behalf; and

 

 

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(q)           all products and proceeds, both cash and noncash, of any and all of the foregoing.

 

TO HAVE AND TO HOLD the Property, whether now owned or leased or hereafter acquired and whether now or hereafter existing, together with all the rights, privileges and appurtenances thereunto belonging, unto Trustee for the benefit of the Beneficiary, forever, for the uses and purposes herein set forth.

 

Section 2.02.     Future Advances.  It is the intention of the Grantor and the Beneficiary that this Deed of Trust shall secure any and all future advances, which may or will be advanced from time to time after the date hereof by one or more of the Secured Parties and may include readvances of sums repaid, and this Deed of Trust shall attach upon execution and have priority from the time of recording as to all advances, whether obligatory or discretionary, until this Deed of Trust is released of record.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

The Grantor hereby represents and warrants to the Beneficiary as follows:

 

Section 3.01.     Title to Property; No Liens

 

(a)           The Grantor has and will have good, [indefeasible] [marketable]4 and insurable title to the Land and the Improvements in fee simple, free and clear of all Liens, claims, encumbrances and charges of every kind and character, except for those exceptions set forth in Exhibit B hereto (collectively, the "Permitted Exceptions").  The Grantor owns and will own all of the other Property free and clear of all Liens, claims, encumbrances and charges of every kind and character.

 

(b)           This Deed of Trust creates valid, enforceable first priority Lien on the Property in favor of the Beneficiary, for the benefit of the Secured Parties, as security for the Obligations, subject only to Permitted Exceptions.

 

(c)           The Grantor shall forever warrant and defend (i) its estate, right, title and interest in and to the Property, (ii) the validity, enforceability and priority of the Lien of this Deed of Trust on the Property, and (iii) the right, title and interest of the Beneficiary and any purchaser at any sale of the Property hereunder or relating hereto, in each case, against all other Liens, subject only to the Permitted Exceptions.