DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING

EXHIBIT 10.10

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER.

NOTICE: THIS INSTRUMENT SECURES, INTER ALIA, OBLIGATIONS WHICH PROVIDE FOR A VARIABLE RATE OF INTEREST AND OBLIGATORY FUTURE CREDIT ADVANCES. ALL SUCH OBLIGATORY FUTURE CREDIT ADVANCES SHALL HAVE THE SAME LIEN PRIORITY AS IF MADE ON THE DATE HEREOF. [SEE THE FOLLOWING DEED OF TRUST FOR PARTICULARS.]

THIS DEED OF TRUST SHALL BE EFFECTIVE AS AND SHALL CONSTITUTE A FIXTURE FILING FROM THE DATE OF ITS FILING FOR RECORD IN THE REAL PROPERTY RECORDS OF THE COUNTY IN WHICH THE LAND (AS DEFINED HEREIN) IS LOCATED.

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DEED OF TRUST,
SECURITY AGREEMENT AND FIXTURE FILING

      THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING (hereinafter referred to as this “Deed of Trust”) is made and entered into as of the ___day of                      , 20___, by [NAME OF GRANTOR] a                      (“Grantor”), Grantor having as a business address                                          , Attn:                       [title], to                                          , whose address is                                          ,                      , Texas ___, as Trustee (including any successors or substitutes appointed as herein provided from time to time, hereinafter referred to as “Trustee”) for the benefit of WACHOVIA BANK, NATIONAL ASSOCIATION , a national banking association (hereinafter referred to as “Wachovia”), having as a business address at 171 17 ^TH Street, N.W., GA 4506, Atlanta, Georgia 30363, Attn: Cathy Casey, as Agent for itself and the other lenders from time to time party to the Credit Agreement (as hereinafter defined) (Wachovia, in its capacity as Agent, hereinafter referred to as the “Lender”).

W I T N E S S E T H:

     WHEREAS, NNN Apartment REIT Holdings, L.P., a Virginia limited partnership (“Borrower”), Lender and certain other financial institutions parties thereto from time to time (the Lender, together with such other financial institutions, the “Banks”) are party to a Credit Agreement, dated as of                      , 2006 (hereinafter together with any and all renewals, modifications, consolidations and extensions thereof, referred to as the “Credit Agreement”; terms used but not defined herein shall have the meanings contained in the Credit Agreement), pursuant to which the Banks have made a loan to Borrower up to the original principal amount of TWO HUNDRED MILLION AND NO/100 DOLLARS ($200,000,000.00) (the “Loan”); and

     WHEREAS, it is a condition precedent to the Banks’ obligations under the Credit Agreement that Grantor execute and deliver this Deed of Trust;

     NOW, THEREFORE, FOR AND IN CONSIDERATION OF TEN AND NO/100 DOLLARS ($10.00) AND OTHER GOOD AND VALUABLE CONSIDERATIONS, the receipt and sufficiency whereof are hereby acknowledged by Grantor, and in order to secure the Secured Obligations (as hereinafter defined), Grantor, with general warranty, does hereby grant, bargain, sell, convey, transfer, assign, pledge, set over, confirm and deliver in trust unto Trustee, and his substitutes, successors and assigns, with power of sale, all of Grantor’s estate, right, title and interest in, to and under all and singular, the following described property (hereinafter collectively referred to as the “Property”):

          (a) All that certain tract or parcel of land located in the County of Bexar, State of Texas, more particularly described in Exhibit A attached hereto and by this reference made a part hereof, together with all right, title and interest of Grantor, including any after-acquired title or reversion, in and to the rights-of-ways, streets and alleys adjacent thereto, and all easements, rights-of-way, licenses, operating agreements, strips and gores of land, vaults, streets, ways, alleys, passages, sewers, sewer rights, waters, water courses, water rights and powers, oil, gas and other minerals, flowers, shrubs, crops, trees, timber and other emblements now or hereafter located on the land or under or above same, and all estates, rights, titles, interests, privileges, liberties, tenements, hereditaments and appurtenances whatsoever, in any way belonging, relating to or appertaining to said tract or parcel of land or any part thereof, or which hereafter shall in any way belong, relate or be appurtenant thereto, whether now owned or hereafter acquired by Grantor and the reversion and reversions, remainder and remainders, and all the estate, right, title, interest, property, possession, claim and demand whatsoever at law, as well as in equity, of Grantor of, in and to the same (hereinafter referred to as the “Land”); and

          (b) All buildings, structures, parking areas, landscaping, and other improvements of every nature now or hereafter situated, erected or placed on the Land (hereinafter referred to as the “Improvements”), and all materials intended for construction, reconstruction, alteration and repairs of the Improvements now or hereafter erected, all of which materials shall be deemed to be included within the Improvements immediately upon the delivery thereof to the Land; and

          (c) All fixtures, machinery, equipment, furniture, inventory, building supplies, appliances and other articles of personal property (hereinafter collectively referred to as the “Personal Property”), including, but not limited to, all engines, radiators, heaters, furnaces, boilers, stokers, pumps, tanks, dynamos, motors, generators, switchboards, electrical equipment, heating, plumbing, lifting and ventilating apparatus, air-cooling and air-conditioning apparatus, gas and electric fixtures, elevators and motors, escalators, ranges, ovens, bathtubs, sinks, commodes, basins, pipes, faucets and other plumbing, mirrors, refrigerating plant, refrigerators, iceboxes, dishwashers, carpeting, floor coverings, furniture, light fixtures, signs, lawn equipment, water heaters, cooking apparatus and appurtenances, fittings, machinery, furniture, furnishings, and all other equipment of every kind and description, used or procured for use in the operation of any building, structure or other improvement now or hereafter standing on the Property, and all other fixtures and equipment now or hereafter owned by Grantor and located in, on or about, or used or intended to be used with or in connection with the use, operation, or

declarant under any easements, covenants, restrictions or declarations now or hereafter relating to the Land or the Improvements, all goods (including, without limitation, inventory, property, possession, equipment, fixtures and accessions), investment property, letter-of-credit rights, letters of credit, commercial tort claims, money, supporting obligations, as-extracted collateral, timber to be cut, and all notes or chattel paper (whether tangible or electronic) now or hereafter arising from or by virtue of any transactions related to the Land or the Improvements and all customer lists, other lists, and business information relating in any way to the Land, the Improvements or the use thereof, whether now owned or hereafter acquired;

          (h) All proceeds, products, substitutions and accessions of the foregoing of every type.

     TO HAVE AND TO HOLD the Property and all parts, rights, members and appurtenances thereof, to the use, benefit and behalf of Trustee and the substitutes, successors and assigns of Trustee forever. Grantor covenants and represents that Grantor is lawfully seized and possessed of the Property and has good right to convey and pledge the same, and that the same is unencumbered except for those matters (hereinafter referred to as the “Permitted Encumbrances”) expressly set forth in Exhibit B attached hereto and by this reference made a part hereof. Except for the Permitted Encumbrances, Grantor does warrant and will forever defend the title to the Property unto Trustee, his successors or substitutes in trust and his or their assigns, against the claims of all persons whomsoever.

     This Deed of Trust is given to secure the payment and performance of the following described indebtednesses and obligations (hereinafter collectively referred to as the “Secured Obligations”):

          (a) The debt evidenced by (i) those certain Revolving Notes made by Borrower in the aggregate principal amount of Two Hundred Million and No/100 Dollars ($200,000,000.00) and that certain Swingline Note made by Borrower to the order of Wachovia in the principal face amount of Ten Million and No/100 Dollars ($10,000,000.00), each of which has been issued pursuant to the Credit Agreement and each of which is due and payable in full on or before                      2009, unless extended as provided in the Credit Agreement; and (ii) each other note as may be issued under the Credit Agreement, each as originally executed, or if varied, extended, supplemented, consolidated, amended, replaced, renewed, modified or restated from time to time as so varied, extended, supplemented, consolidated, amended, replaced, renewed, modified or restated (collectively, the “Note”); provided, however, in no event shall the maximum aggregate principal amount of indebtedness under the Note exceed Two Hundred Million and No/100 Dollars ($200,000,000.00);

          (b) The payment, performance and discharge of each and every obligation, covenant and agreement of Grantor contained herein or of Grantor and the other Guarantors in the Guaranty, of Borrower contained in the Credit Agreement, and of Grantor and Borrower in the other Loan Documents including, without limitation, the obligation of Borrower to reimburse Issuing Bank for any draws under the Letters of Credit, and in the other Loan Documents;

          (c) The full and prompt payment and performance of all of the provisions, agreements, covenants and obligations contained in the Credit Agreement;

          (d) The full and prompt payment and performance of all of the provisions, agreements, covenants and obligations of Borrower herein contained and contained in any other agreements, documents or instruments now or hereafter evidencing, securing or otherwise relating to the indebtedness evidenced by the Note (the Note, this Deed of Trust, the Credit Agreement and such other agreements, documents and instruments, together with any and all renewals, amendments, extensions and modifications thereof, are hereinafter collectively referred to as the “Loan Documents”), and the payment of all other sums therein covenanted to be paid;

          (e) Any and all additional advances made by Lender to protect or preserve the Property or the lien and security interest created hereby on the Property, or for taxes, assessments or insurance premiums as hereinafter provided or for performance of any of Grantor’s obligations hereunder or under the other Loan Documents or Borrower’s obligations under the Credit Agreement or under the other Loan Documents or for any other purpose provided herein or in the other Loan Documents (whether or not the original Grantor remains the owner of the Property at the time of such advances); and

          (f) Any and all future advances under any of the Loan Documents, whether such advances are obligatory or are to be made at the option of Lender or otherwise, as are made within twenty (20) years from the date of this Deed of Trust, to the same extent as if such future advances were made on the date of the execution of this Deed of Trust.

     PROVIDED, ALWAYS, and it is the true intent and meaning of the parties to these presents, that when Borrower and Grantor, their respective successors or assigns, shall pay or cause to be paid to Lender, its successors or assigns, the Secured Obligations according to the conditions and agreements of the Note and of this Deed of Trust, and shall perform all of the obligations according to the true intent and meaning of the Note and of this Deed of Trust and the conditions thereunder and hereunder, then this conveyance of the Property shall become of no further force and effect, and the lien and security interest hereof shall be released of record at Grantor’s request and at Grantor’s cost and expense.

     Grantor hereby further covenants and agrees with Lender as follows:

     1.  Payment and Performance of Secured Obligations . Grantor shall promptly pay or cause to be paid the Secured Obligations when due, and fully and promptly perform or cause to be performed all of the provisions, agreements, covenants and obligations of the Secured Obligations.

     2. Funds for Impositions . After the occurrence and during the continuance of an Event of Default, Grantor shall pay to Lender, subject to Lender’s option under Paragraph 3 hereof, on the days that monthly installments of interest are payable under the Note, until the Note is paid in full, a sum (hereinafter referred to as the “Funds”) reasonably estimated by Agent to provide an amount necessary for payment of the following items in full thirty (30) days prior to when such items become due (hereinafter collectively referred to as the “Impositions”): (a) the yearly real estate taxes, ad valorem taxes, personal property taxes, assessments and betterments, and (b) the yearly premium installments for the insurance covering the Property and required by Lender pursuant to Paragraph 4 hereof. The Impositions shall be reasonably estimated initially and from time to time by Lender on the basis of assessments and bills and estimates thereof. The

Funds shall be held by Lender in a separate account free of any liens or claims on the part of creditors of Grantor and as part of the security for the Secured Obligations. Grantor shall pay all Impositions prior to delinquency as required by Paragraph 3 hereof. Provided no Event of Default has occurred and is continuing, within ten (10) days after Grantor furnishes Lender with reasonably satisfactory evidence that Grantor has paid one or more of the items comprising the Impositions, Lender shall reimburse Grantor therefor to the extent of the Funds (plus accrued interest) then held by Lender. Alternatively, Lender shall apply the Funds to pay the Impositions with respect to which the Funds were paid to the extent of the Funds then held by Lender and provided Grantor has delivered to Lender the assessments or bills therefor. Grantor shall be permitted to pay any Imposition early in order to take advantage of any available discounts. Lender shall make no charge for so holding and applying the Funds or for verifying and compiling said assessments and bills. The Funds are pledged as additional security for the Secured Obligations, and may be applied, at Lender’s option and without notice to Grantor, to the payment of the Secured Obligations upon the occurrence of any Event of Default and acceleration of the Note hereunder. If at any time the amount of the Funds held by Lender shall be less than the amount reasonably deemed necessary by Lender to pay Impositions as such become due, Grantor shall pay to Lender any amount necessary to make up the deficiency within fifteen (15) Business Days after notice from Lender to Grantor requesting payment thereof. Upon payment in full of the Secured Obligations, Lender shall promptly refund to Grantor any Funds held by Lender.

     3.  Impositions, Liens and Charges . Grantor shall pay all Impositions and other charges, if any, attributable to the Property prior to delinquency, and at Lender’s option, shall pay in the manner provided under Paragraph 2 hereof. Grantor shall furnish to Lender all bills and notices of amounts due under this Paragraph 3 as soon as received, and in the event Grantor shall make payment directly, Grantor shall, as and when available, furnish to Lender receipts evidencing such payments prior to the dates on which such payments are delinquent, subject to Grantor’s right to contest taxes, assessments and other governmental charges as provided in the Credit Agreement. Grantor shall promptly discharge (by bonding, payment or otherwise) any lien filed against the Property or Grantor (including federal tax liens) and will keep and maintain the Property free from the claims of all persons supplying labor or materials to the Property, subject to Grantor’s right to contest the same as provided in the Credit Agreement. Grantor shall not claim or be entitled to any credit against the taxable value of the Property by reason of this Deed of Trust, or any deduction in or credit on the Secured Obligations by reason of Impositions paid.

     4.  Property and Other Insurance . Grantor shall, at its expense, procure and maintain or caused to be procured or maintained, for the benefit of Grantor and Lender, insurance policies issued by such insurance companies, in such amounts, in such form and substance, and with such coverages, endorsements, deductibles, and expiration dates, providing the types of insurance set forth in the Credit Agreement, as may be required by the Credit Agreement.

     5. Preservation and Maintenance . Grantor (a) shall not permit or commit waste, impairment, or deterioration of the Property or abandon or discontinue operations on the Property, (b) shall restore or repair promptly (following adjustment of any claims for an insured casualty loss, if applicable) and in a good and workmanlike manner all or any part of the Property in the event of any damage, injury or loss thereto, to the substantial equivalent of its

condition prior to such damage, injury or loss, or such other condition as Lender may approve in writing, provided that Lender shall release net insurance proceeds, to the extent actually received by Lender, to Grantor (provided, however, the insufficiency of such proceeds shall not relieve Grantor of its obligations to restore hereunder), (c) shall keep the Property, including the Improvements and the Personal Property, in first class order, repair and tenantable condition and shall replace fixtures, equipment, machinery and appliances on the Property when necessary to keep such items in first class order, repair, and tenantable condition, (d) subject to Grantor’s right to contest the same as provided in this Deed of Trust, shall comply with all laws, ordinances, regulations and requirements of any governmental body applicable to the Property, and (e) shall keep all franchises, trademarks, trade names, service marks and licenses and permits necessary for the use and occupancy of the Property in good standing and in full force and effect. Grantor covenants and agrees to give Lender prompt notice of any non-compliance with such laws, ordinances, regulations or requirements and of any notice of non-compliance therewith which it receives or any threatened or pending proceedings in respect thereto or with respect to the Property (including, without limitation, changes in zoning). Notwithstanding the provisions of this Paragraph 5, Grantor at its own expense after written notice to Lender may contest the applicability or enforcement of such laws, ordinances, regulations or requirements by an appropriate proceeding conducted in good faith and with due diligence, provided that such non-compliance will not result in any lien, charge, fine or other liability against the Property or Grantor and such non-compliance will not place the Property or any part thereof in any danger of being forfeited, lost or closed. Neither Grantor nor any tenant or other person shall remove, demolish or alter any Improvements now existing or hereafter erected on the Property or any Personal Property in or on the Property except when incident to the replacement of Personal Property with items of like kind and value or customary tenant improvements pursuant to Leases approved or deemed approved pursuant to the Credit Agreement.

     6.  Transfers . Except as may be expressly provided in the Credit Agreement, (a) if Grantor shall, directly, indirectly or by operation of law, without the prior written consent of Lender in each instance, (i) sell, convey, assign, transfer, lease, option, mortgage, pledge, hypothecate or dispose of the Property, or any part thereof or interest therein, except as expressly permitted by the terms of this Deed of Trust or the Credit Agreement, or (ii) create or suffer to be created or to exist any lien, encumbrance, security interest, mortgage, pledge, restriction, attachment or other charge of any kind upon the Property, or any part thereof or interest therein, except for Permitted Encumbrances (subject to Grantor’s right to contest certain liens to the extent provided in the Credit Agreement), or (b) if there shall occur, directly, indirectly or by operation of law, without the prior written consent of Lender in each instance, any sale, assignment, transfer, conveyance, disposition, option, mortgage, hypothecation, pledge or other encumbrance of any direct or indirect interest in Grantor, then, in either (a) or (b), an Event of Default shall exist under this Deed of Trust.

     7.  Hazardous Materials .

          (a) Environmental Indemnity . Grantor covenants and agrees, at its sole cost and expense, to indemnify, defend (at trial and appellate levels and with attorneys, consultants and experts acceptable to Lender) and hold each Lender, each of the Banks and each of their respective parents, subsidiaries, affiliates, shareholders, directors, officers, employees and agents, and the successors and assigns of any of them (collectively, the “Indemnified Parties”

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and individually an “Indemnified Party”) harmless against and from any and all liens, damages, losses, liabilities, obligations, settlement payments, penalties, assessments, citations, directives, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses of any kind or of any nature whatsoever (including, without limitation, reasonable attorneys’, consultants’ and experts’ fees and disbursements incurred in investigating, defending against, settling or prosecuting any claim, litigation or proceeding) which may at any time be imposed upon, incurred by or asserted or awarded against such Indemnified Party or the Property and arising directly or indirectly from or out of: (A) the Release or threatened Release of any Hazardous Materials on, in, under or affecting all or any portion of the Property or migrating from the Property to any surrounding areas, regardless of whether or not caused by or within the control of Grantor or any other Obligor; (B) the existence of any Mold Condition on, in, under or affecting all or any portion of the Property, regardless of whether or not caused by or within the control of Grantor or any other Obligor; (C) the violation by Grantor of any Environmental Laws relating to or affecting the Property of Grantor, whether or not caused by or within the control of Grantor or any other Obligor; (D) the failure of Grantor to comply fully with the terms and conditions of this Paragraph 7 or Sections 6.1(p) and 7.9 of the Credit Agreement; (E) the violation of any Environmental Laws which gives or may give rise to any rights whatsoever in any party with respect to the Property by virtue of any Environmental Laws; (F) the breach of any representation or warranty contained in Section 6.1(p) of the Credit Agreement; or (G) the enforcement of this Paragraph 7, including, without limitation, (i) the reasonable costs of assessment, containment and/or removal of any and all Hazardous Materials from all or any portion of the Property or any surrounding areas to which Hazardous Materials have migrated from the Property, (ii) the costs of assessment, containment, abatement, remediation and/or removal of any Mold Condition from all or any portion of the Property so that such Mold Condition no longer exists, (iii) the reasonable costs of any actions taken in response to a Release or threatened Release of any Hazardous Materials on, in, under or affecting all or any portion of the Property or any surrounding areas to which Hazardous Materials have migrated from the Property to prevent or minimize such Release or threatened Release so that it does not migrate or otherwise cause or threaten danger to present or future public health, safety, welfare or the environment, (iv) the costs of any actions taken in response to any Mold Condition on, in, under or affecting all or any portion of the Property to prevent or minimize such Mold Condition so that it does not migrate or otherwise cause or threaten danger to present or future public health, safety, welfare or the environment, and (v) reasonable costs incurred to comply with the Environmental Laws in connection with all or any portion of the Property or any surrounding areas to which Hazardous Materials have migrated from the Property; provided, however, nothing contained in this Paragraph 7 shall require Grantor to indemnify any Indemnified Party from any matter, cost or expense to the extent such matter, cost or expense arises or results solely from such Indemnified Party’s own gross negligence or willful misconduct. GRANTOR AGREES THAT THE INDEMNIFICATION OF ANY INDEMNIFIED PARTY BY GRANTOR SET FORTH IN THIS PARAGRAPH 7 INCLUDES INDEMNIFICATION IN THE EVENT OF ORDINARY NEGLIGENCE OR STRICT LIABILITY ON THE PART OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY BUT DOES NOT INCLUDE INDEMNIFICATION OF SUCH INDEMNIFIED PARTY FOR SUCH INDEMNIFIED PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT . Grantor’s obligations hereunder are separate and distinct from Grantor’s obligations under the other Loan Documents, and Lender’s and the other Indemnified Parties’ rights under this

Agreement shall be in addition to all rights of Lender under the Note, the Credit Agreement, the Guaranty and under any other documents or instruments evidencing, securing or relating to the Secured Obligations, and payments by Grantor under this Paragraph 7 shall not reduce Grantor’s obligations and liabilities, if any, under any of the other Loan Documents. Nothing herein shall require Grantor to indemnify any Indemnified Party from any matter, cost or expense relating to a Release or Threat of Release of Hazardous Substances or violation of any Environmental Law caused by an Indemnified Party or first occurring after the Lender or its nominee acquires title to the applicable Property by the exercise of its foreclosure remedies or by deed in lieu of foreclosure or after repayment of the Loan (unless all or any portion of the Loan is reinstated because such repayment is rescinded or otherwise required to be returned).

          (b) Survival, Assignability and Transferability .

               (i) Except as expressly provided in Paragraph 7(a) above, the indemnity set forth above in subparagraph (a) of this Paragraph 7 and any representations or warranties set forth in Section 6.1(p) of the Credit Agreement and incorporated herein by reference shall survive the payment and performance of the Secured Obligations and any exercise by Lender of any remedies under this Deed of Trust, including without limitation, the power of sale, or any other remedy in the nature of foreclosure, and shall not merge with any deed given by Grantor to Lender in lieu of foreclosure or any deed under a power of sale.

               (ii) It is agreed and intended by Grantor and Lender that the indemnity set forth above in subparagraph (a) of this Paragraph 7 and any representations or warranties set forth in Section 6.1(p) of the Credit Agreement and incorporated herein by reference may be assigned or otherwise transferred by Lender to its successors and assigns in connection with an assignment of this Deed of Trust and to any subsequent purchasers of all or any portion of the Property by, through or under Lender, without notice to Grantor and without any further consent of Grantor. To the extent consent to any such assignment or transfer is required by law, advance consent to any such assignment or transfer is hereby given by Grantor in order to maximize the extent and effect of the warranties, representations and indemnity given hereby.

     8. Protection of Lender’s Security . If Grantor fails to perform the covenants and agreements contained in this Deed of Trust or (to the extent applicable to Grantor) the Credit Agreement, or if any action or proceeding is commenced which affects the Property or title thereto or the interest of Lender therein, including, but not limited to, eminent domain, insolvency, code enforcement or arrangements or proceedings involving a bankrupt or decedent, then Lender at Lender’s option, but without any duty or obligation of any sort to do so and without in any way waiving or relieving any Default or Event of Default, may make such appearances, disburse such sums and take such action as Lender reasonably deems necessary to protect Lender’s interest or cure such Default or Event of Default, including, but not limited to, disbursement of reasonable attorneys’ fees, payment, contest or compromise of any lien or security interest which is prior to the lien or security interest of this Deed of Trust, payment of insurance premiums, taxes, charges and assessments and entry upon the Property to make repairs. Any reasonable amounts disbursed by Lender pursuant to this Paragraph 8, with interest thereon, shall become a portion of the Secured Obligations. Unless Grantor and Lender agree to other terms of payment, such amounts shall be payable upon notice from Lender to Grantor requesting payment thereof and shall bear interest from the date of disbursement at the Post-

Default Rate stated in the Credit Agreement unless collection from Grantor of interest at such rate would be contrary to applicable law, in which event such amounts shall bear interest at the highest rate which may be collected from Grantor under applicable law. Grantor shall have the right to prepay such amounts in whole or in part at any time. Nothing contained in this Paragraph 8 shall require Lender to incur any expense or do any act.

     9.  Inspection . Lender may, at Grantor’s expense, during normal business hours make or cause to be made reasonable entries upon and inspections of the Property as permitted in the Credit Agreement, or at any other time when necessary or appropriate, in the sole reasonable discretion of Lender, to protect or preserve the Property.

     10.  Grantor and Security Title Not Released . From time to time, without affecting any obligation of Grantor or Grantor’s successors or assigns to pay the Secured Obligations and to observe the covenants of Grantor contained in this Deed of Trust and the other Loan Documents, and without affecting the guaranty of any person, corporation, partnership or other entity for payment or performance of the Secured Obligations, and without affecting the lien or security interest or priority of lien or security interest of this Deed of Trust on the Property, Lender may, at Lender’s option, without giving notice to or obtaining the consent of Grantor or Grantor’s successors or assigns or of any guarantor, and without liability on Lender’s part, grant extensions or postponements of the time for payment of the Secured Obligations or any part thereof, release anyone liable on any of the Secured Obligations, accept a renewal note or notes therefor, release from this Deed of Trust any part of the Property, take or release other or additional security, reconvey any part of the Property, consent to any map or plat or subdivision of the Property, consent to the granting of any easement, join in any extension or subordination agreement and agree in writing with Borrower to modify the rate of interest or terms and time of payment or period of amortization of the Note or change the amount of the monthly installments payable thereunder. Grantor shall pay Lender a reasonable service charge, together with such title insurance premiums and reasonable attorneys’ fees as may be incurred, at Lender’s option, for any such action if taken at Grantor’s request.

     11.  Forbearance Not Waiver . Any forbearance by Lender in exercising any right or remedy hereunder, or otherwise afforded by applicable law, shall not be a waiver of or preclude the exercise of any right or remedy hereunder. The procurement of insurance or the payment of taxes or other liens or charges by Lender shall not be a waiver of Lender’s right to accelerate the maturity of the Secured Obligations. Lender’s receipt of any awards, proceeds or damages under Paragraphs 4 and 9 hereof shall not operate to cure or waive any default in payment of the Secured Obligations by any Obligor.

     12.  Estoppel Certificates . Grantor shall within ten (10) Business Days of a written request from Lender, but no more often than quarterly, furnish Lender with a written statement, duly acknowledged, setting forth the amount of the Secured Obligations and any right of set-off, counterclaim or other defense which may exist or be claimed by Grantor against the Secured Obligations and the obligations of Grantor under this Deed of Trust.

     13.  Security Agreement .

          (a) Insofar as any item of property included in the Property which is or might be deemed to be “personal property” is concerned, this Deed of Trust is hereby made and declared to be, among other things, a security agreement, granting a security interest to Lender in and to each and every item of such property included in the Property (hereinafter collectively referred to as the “Collateral”), in compliance with the provisions of the Uniform Commercial Code as enacted in the State of Texas. A financing statement or statements (whether or not reciting this Deed of Trust to be a security agreement), covering all of the Collateral, shall be authorized by Grantor and appropriately filed. The remedies for any violation of the covenants, terms and conditions of the security agreement herein contained shall be (i) as prescribed herein, or (ii) as prescribed by general law, or (iii) as prescribed by the specific statutory consequences now or hereafter enacted and specified in said Uniform Commercial Code, all at Lender’s sole election. Upon the occurrence and continuance of an Event of Default, Lender may require Grantor, at its expense, to assemble all personal property which is a part of the Property, and with respect to which such request or demand is made, and make the same available to Lender at a convenient place upon the Land (or within Improvements upon the Land, as may be appropriate for the protection of such personal property) acceptable to Lender. Any notice of sale, disposition or other action by Lender with respect to personal property which is a part of the Property sent to Grantor in accordance with the provisions hereof relating to communications at least ten (10) days prior to such action shall constitute adequate and reasonable notice to Grantor of such action. Grantor and Lender agree that the filing of such financing statement(s) in the records normally having to do with personal property shall never be construed as in any way derogating from or impairing this declaration and hereby stated intention of Grantor and Lender that everything used in connection with the production of income from the Property and/or adapted for use therein and/or which is described or reflected in this Deed of Trust, is, and at all times and for all purposes and in all proceedings, both legal or equitable, shall be, regarded as part of the real estate irrespective of whether (i) any such item is physically attached to the Land or the Improvements, (ii) serial numbers are used for the better identification of certain items capable of being thus identified in a recital contained herein, or (iii) any such item is referred to or reflected in any such financing statement(s) so filed at any time. Similarly, the mention in any such financing statement(s) of the rights in and to the proceeds of any hazard insurance policy, or any award in eminent domain proceedings for a taking or for loss of value, or Grantor’s interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the Property, whether pursuant to lease or otherwise, shall never be construed as in any way altering any of the rights of Lender as determined by this instrument or impugning the priority of Lender’s lien granted hereby or by any other recorded document, but such mention in such financing statement(s) is declared to be for the protection of Lender in the event any court shall at any time hold, with respect to any such matter, that notice of Lender’s priority of interest, to be effective against a particular class of persons, must be filed in the Uniform Commercial Code records. Grantor warrants that (i) Grantor’s (that is, “Debtor’s”) name, identity or organizational structure and residence or principal place of business are as set forth in Exhibit C attached hereto and by this reference made a part hereof; (ii ) Grantor (that is, “Debtor”) has been using or operating under said name, identity or organizational structure without change for the time period set forth in Exhibit C attached hereto and by this reference made a part hereof; and (iii) the location of all collateral constituting fixtures is upon the Land. Grantor covenants and agrees that Grantor will furnish Lender with notice of any change in name, identity, organizational structure, residence or principal place of business within thirty (30) days of the

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effective date of any such change and Grantor will promptly upon request by Lender execute any financing statements or other instruments deemed necessary by Lender to prevent any filed financing statement from becoming misleading or losing its perfected status. The information contained in this Paragraph 13 is provided in order that this Deed of Trust shall comply with the requirements of the Uniform Commercial Code, as enacted in the State of Texas, for instruments to be filed as financing statements. This Deed of Trust shall be effective as and shall constitute a fixture filing from the date of its filing for record in the Real Property Records of the county in which the Land is located.

          (b) Lender may, at its election, at any time after delivery of this Deed of Trust, sign one or more copies hereof in order that such copies may be used as a financing statement under said Uniform Commercial Code. The signature of Lender may be placed between the last sentence of this Deed of Trust and Grantor’s acknowledgment or may follow Grantor’s acknowledgment. Lender’s signature need not be acknowledged and is not necessary to the effectiveness hereof as a deed of trust, mortgage, assignment, pledge, security agreement or (unless otherwise required by applicable law) as a financing statement. Lender is authorized to file in any jurisdiction where Lender deems it necessary this Deed of Trust, a financing statement or statements and one or more continuation statements, pursuant to said Uniform Commercial Code, in form satisfactory to Lender, and will pay the cost of filing or recording any such instrument, in all public offices at any time and from time to time whenever filing or recording of any financing statement, continuation statement or this Deed of Trust is deemed by Lender to be necessary or desirable. Certain of the Property is or will become “fixtures” (as that term is defined in said Uniform Commercial Code) on the Property of which Grantor is record owner (unless otherwise stated herein) and upon filing of this Deed of Trust for record in the real estate records of the county wherein such fixtures are situated, it shall operate also as a financing statement upon such of the Property which is or may become fixtures.

          (c) The information contained in Exhibit C is provided in order that this Deed of Trust shall comply with the requirements of the Uniform Commercial Code for instruments to be filed as financing statements. The names of “Debtor” and the “Secured Party”, the identity or organizational structure, jurisdiction of organization, organizational number, federal tax identification number and residence or chief executive office of “Debtor,” and the time period for which “Debtor” has been using or operating under said name and identity or organizational structure without change are as set forth in Part 1 of Exhibit C attached hereto and by this reference made a part hereof; the mailing address of the “Secured Party” from which information concerning the security interest may be obtained, and the mailing address of “Debtor,” are as set forth in Part 1 and Part 2 of Exhibit C attached hereto. Exhibit C correctly sets fo