Deed Of Trust

DEED OF TRUST
(WITH ASSIGNMENT OF RENTS AND FIXTURE FILING)


STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS: COUNTY OF DALLAS )


GRANT OF LIEN


BY THIS AGREEMENT, August 16, 1996, the undersigned, BOLLINGER INDUSTRIES, L.P., a Texas limited partnership (herein referred to as the "Grantor"), whose address is 222 West Airport Freeway, Suite 1500, Irving, Texas 75062, to secure the indebtedness and obligations hereinafter described, does hereby GRANT, BARGAIN, SELL, ASSIGN and CONVEY unto David G. Drumm, as trustee ("Trustee"), the following described real property located in Dallas County, Texas (the "Land"):


as described on Exhibit A attached hereto and incorporated herein by reference;


TOGETHER WITH the following, whether now owned or hereafter acquired by Grantor: (a) all improvements now or hereafter attached to or placed, erected, constructed or developed on the Land (the "Improvements"); (b) all equipment, fixtures, furnishings, inventory and articles of personal property (the "Personal Property") owned by Grantor and now or hereafter attached to or used in or about the Improvements or that are necessary or useful for the complete and comfortable use and occupancy of the Improvements for the purposes for which they were or are to be attached, placed, erected, constructed or developed, or which Personal Property is or may be used in or related to the planning, development, financing or operation of the Improvements, and all renewals of or replacements or substitutions for any of the foregoing, whether or not the same are or shall be attached to the Land or Improvements; (c) all water and water rights, timber, crops, and mineral interests pertaining to the Land; (d) all building materials and equipment owned by Grantor and now or hereafter delivered to and intended to be installed in or on the Land or the Improvements; (e) all plans and specifications owned by Grantor for the Improvements or the Personal Property, (f) all deposits (including tenants' security deposits), bank accounts, funds, documents, contract rights, accounts, commitments, construction contracts, architectural agreements, general intangibles (including without limitation trademarks, trade names and symbols) and instruments, notes or chattel paper arising from or by virtue of any transactions related to the Land, the Improvements or the Personal Property; (g) all permits, licenses, franchises, certificates, and other rights and privileges obtained in connection with the Land, the Improvements and the Personal Property; (h) all proceeds arising from or by value of the sale, lease or other disposition of the Land, the Improvements or the Personal Property; (i) all proceeds (including premium refunds) of each


Deed of Trust (with Security Agreement and Assignment of Rents) - Page 1 2 policy of insurance relating to the Land, the Improvements or the Personal Property; (j) all proceeds from the taking of the Land, the Improvements, the Personal Property or any rights appurtenant thereto by right of eminent domain or by private or other purchase in lieu thereof, including change of grade of streets, curb cuts or other rights of access, for any public or quasi-public use under any law; (k) all right, title and interest of Grantor in and to all streets, roads, public places, easements and rights-of-way, existing or proposed, public or private, adjacent to or used in connection with, belonging or pertaining to the Land; (l) all of the leases, rents, royalties, bonuses, issues, profits, revenues or other benefits of the Land, the Improvements or the Personal Property, including, without limitation, cash or securities deposited pursuant to leases to secure performance by the lessees of their obligations thereunder; (m) all consumer goods owned by Grantor and located in, on or about the Land or the Improvements or used in connection with the use or operation thereof; (n) all rights, hereditaments and appurtenances pertaining to the foregoing, and (o) other interests of every kind and character that Grantor now has or at any time hereafter acquires in and to the Land, Improvements, and Personal Property described herein and all property that is used or useful in connection therewith, including rights of ingress and egress and all reversionary rights or interests of Grantor with respect to such property. This conveyance shall include, and the lien and security interest created hereby shall encumber, all additional title, estate, interest, and other rights that may hereafter be acquired by Grantor in the Land. The above-described property is collectively referred to herein as the "Mortgaged Property."


TO HAVE AND TO HOLD the Mortgaged Property, together with the rights, privileges and appurtenances thereto belonging, unto the Trustee and his substitutes or successors, forever, and Grantor hereby binds Grantor and Grantor's heirs, executors, administrators, personal representatives, successors and assigns to warrant and forever defend the Mortgaged Property unto the Trustee, his substitutes or successors and assigns, against the claim or claims of all persons claiming or to claim the same or any part thereof, together with such future exceptions to title as may hereafter be created by Grantor with the written consent of Beneficiary (the "Permitted Exceptions").


ARTICLE 1


INDEBTEDNESS


This Deed of Trust is given to secure the following:


1.1 Payment of Loan. Payment to Beneficiary of all indebtedness evidenced by or arising under that certain Loan and Security Agreement between Grantor and Foothill Capital Corporation, whose address is 11111 Santa Monica Boulevard, Suite 1500, Los Angeles, California 90067-3333 ("Beneficiary"), dated of even date herewith (the "Loan Agreement"), together with interest thereon, including sums added to the principal balance of the Loan Agreement in accordance with the terms thereof, and all prepayment, late or other charges or fees payable thereunder, and any and all modifications, extensions, renewals or substitutions thereof. This loan includes revolving and future advances and repayments on a revolving basis. Future and revolving advances and other future obligations and indebtedness owed by Grantor to Beneficiary shall be secured hereunder.


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1.2 Payment of Further Loans. Payment of such further indebtedness with interest thereon, and performance of and compliance with such further obligations as Grantor may undertake to pay, perform or comply with for the benefit of Beneficiary, its successors or assigns, when such borrowing or obligation is evidenced by a note or by any writing reciting that it or they are so secured.


1.3 Performance Under Loan Documents. Performance of and compliance with each agreement, undertaking, obligation, warranty or representation of Grantor contained in the Loan Documents (as such term is defined in the Loan Agreement), or incorporated therein by reference, or in any and all documents, leases or instruments assigned to Beneficiary or executed in Beneficiary's favor and delivered thereunder, and payment of all sums, fees, costs and expenses as therein set forth or which may otherwise be advanced by or due to Trustee or Beneficiary under any provision thereof with interest thereon at the rate provided therein.


1.4 Deed of Trust. Payment of all sums advanced by Beneficiary to or for the benefit of Grantor contemplated hereby and performance of all obligations and covenants herein contained.


The obligations above described are hereinafter collectively called the "Indebtedness."


ARTICLE 2


FIXTURE FILING


Some of the items of the Mortgaged Property described herein are goods that are or are to become fixtures related to the Land on which such fixtures are located, 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 Mortgaged Property is situated. Information concerning the security interest created by this instrument may be obtained from Beneficiary, as secured party, at the address of Beneficiary stated above. The mailing address of the Grantor, as debtor, is as stated above.


ARTICLE 3


REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS OF GRANTOR


Grantor does hereby covenant, warrant and represent to and agree with Beneficiary as follows:


3.1 Payment and Performance. Grantor shall make all payments on the Indebtedness when due and shall punctually and properly perform all of Grantor's covenants, obligations and liabilities under the Loan Documents.


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3.2 Title to Mortgaged Property and Lien of this Deed of Trust. Grantor has good and indefeasible title to the Land free and clear of any liens, charges, encumbrances, security interests, and adverse claims except the Permitted Exceptions. If the interest of Beneficiary in the Mortgaged Property or any part thereof shall be endangered or shall be attacked, directly or indirectly, Grantor hereby authorizes Beneficiary, at Grantor's expense, to take all necessary and proper steps for the defense of such interest, including the employment of counsel, the prosecution or defense of litigation, and the compromise or discharge of claims made against such interest.


3.3 Insurance. Grantor shall provide, obtain, maintain and keep in full force and effect for each tract comprising the Land, during the term of this Deed of Trust, insurance of the types and in the amounts set forth in the Loan Agreement. Each such insurance policy is hereby deemed to be an incident to the title to the Mortgaged Property and is hereby assigned and pledged as additional security for the indebtedness secured hereby. If this Deed of Trust is foreclosed, the purchaser at the foreclosure sale shall become the sole and absolute owner of any and all such insurance policies with the sole right to collect and retain all unearned premiums thereon.


In no event shall Beneficiary be held responsible for failure to pay for any insurance required hereby or for any loss or damage growing out of a defect in any policy thereof or growing out of any failure of any insurance company to pay for any loss or damage insured against or for failure by Beneficiary to effect such insurance or for failure to collect or to exercise diligence in the collection of any proceeds of any insurance required hereby.


3.4 Taxes and Assessments. Grantor shall pay all taxes and assessments against or affecting the Mortgaged Property as the same become due and payable, and Grantor shall deliver to Beneficiary, on demand, paid receipts or other evidence of the payment thereof, and, if Grantor fails to do so, Beneficiary may pay them, together with all costs and penalties thereon, at Grantor's expense.


3.5 Condemnation. All judgments, decrees and awards for injury or damage to the Mortgaged Property, and all awards pursuit to proceedings for condemnation thereof, are hereby assigned in their entirety to Beneficiary, who may apply the same to the Indebtedness in such manner as it may elect. Beneficiary is hereby authorized, in the name of Grantor, to execute and deliver valid acquittances for, and to appeal from, any such award, judgment or decree. Immediately upon its obtaining knowledge of the institution or the threatened institution of any proceedings for the condemnation Mortgaged Property, Grantor shall notify Beneficiary of such fact. Grantor shall then, if requested by Beneficiary, file or defend its claim thereunder and prosecute same with due diligence to its final disposition and shall cause any awards or settlements (less reasonable costs and expenses incurred in connection therewith) to be paid over to Beneficiary for disposition pursuant to the terms of this Deed of Trust. Beneficiary shall be entitled to participate in and to control same and to be represented therein by counsel of its own choice, and Grantor shall deliver, or cause to be delivered, to Beneficiary such instruments as may be requested by it from time to time to permit such participation. In the event Beneficiary, as a result of any such judgment, decree or award, reasonably believes that the payment or performance of any obligation secured by this Deed of Trust is impaired, Beneficiary shall


Deed of Trust (with Security Agreement and Assignment of Rents) - Page 4 5 provide written notice to Grantor of the extent of the principal payment under the Loan Agreement which would, in the reasonable belief of Beneficiary, remove such impairment and Grantor shall have thirty (30) days thereafter to make such principal payment required (and any prepayment penalty or prohibition on prepayment shall be amended to allow Grantor to make such prepayment without penalty) and if such payment is not made within thirty (30) day period Beneficiary may, without further notice, declare all of the Indebtedness due and payable.


3.6 Taxes on Deed of Trust. At any time any law shall be enacted imposing or authorizing the imposition of any tax upon this Deed of Trust, or upon any rights, titles, liens, or security interests created hereby, Grantor shall immediately pay all such taxes.


3.7 Repair, Waste, Alterations, etc. Grantor shall keep every part of the Mortgaged Property in good operating order, repair and condition and shall not commit or permit any waste thereof. Grantor shall make promptly all repairs, renewals and replacements necessary to such end. Grantor shall discharge all claims for labor performed and material furnished therefor, and shall not suffer any lien or mechanics or materialmen to attach to any part of the Mortgaged Property unless bonded in an amount satisfactory to Beneficiary while being contested. If Grantor shall fail to discharge any such lien, then, in addition to any other right or remedy of Beneficiary, Beneficiary may, but shall not be obligated to, discharge the same, either by paying the amount claimed to be due, or by procuring the discharge of such lien by depositing in court a bond for the amount, or otherwise giving security for such claim, or by taking such action as may be prescribed by law.


3.8 No Drilling or Exploration. Without the prior written consent of Beneficiary, there shall be no drilling or exploring for or extraction, removal, or production of minerals from the surface or subsurface of the land. The term "minerals" as used herein shall include, without limiting the generality of such term, oil, gas, casinghead gas, coal, lignite, hydrocarbons, methane, carbon dioxide, helium, uranium and all other natural elements, compounds and substances, including sand and gravel.


3.9 Compliance With Restrictive Covenants. Grantor shall ensure that the Mortgaged Property complies at all times with the terms of all restrictive covenants and other agreements of record that pertain to the Mortgaged Property.


3.10 Compliance With Laws. Grantor, the Mortgaged Property, and the use thereof by Grantor shall comply with all laws, rules, ordinances, regulations, covenants, conditions, restrictions, orders and decrees of any governmental authority or court applicable to Grantor or the Mortgaged Property and its use, and Grantor shall pay all fees or charges of any kind in connection therewith.


3.11 Hold Harmless. Grantor shall defend, at its own cost and expense, and hold Beneficiary harmless from any proceeding or claim affecting the Mortgaged Property, this Deed of Trust or any of the other Loan Documents, except claims arising as a result of Beneficiary's gross negligence or willful misconduct. All costs and expenses incurred by Beneficiary in protecting its interest hereunder, including all court costs and reasonable attorneys' fees, shall be borne by Grantor.


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3.12 Further Assurances. Grantor, upon the request of Beneficiary, shall execute, acknowledge, deliver, and record such further instruments and do such further acts as may be necessary, reasonably desirable or reasonably proper to carry out the purposes of this Deed of Trust and the other Loan Documents and to subject to the liens and security interests created thereby any property intended by the terms thereof to be covered thereby, including specifically, but without limitation, any renewals, additions, substitutions, replacements, improvements, or appurtenances to the Mortgaged Property.


3.13 Recording and Filing. Grantor shall cause this Deed of Trust and the other Loan Documents and all amendments, supplements and extensions thereto and substitutions therefor to be recorded, filed, re-recorded and refiled in such manner and in such places as Beneficiary shall reasonably request, and shall pay all such recording, filing, re-recording and refiling fees, title insurance premiums, and other charges.


ARTICLE 4


SUBORDINATE DEED OF TRUST
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