flA?.3R' fW AM1~1TI'A NA. of Deed of Trust STATE OF TEXAS COUNTY OF HARRIS Know All Men By These Presents that NationsBank NRA Bank ofAmeraca. N.A. in County of Harris, State of Texas, the legal and equitable owner and holder of that one certain promissory note in the original principal sum of Four Million Five Plzmdred Thousand DOLLARS fELSS4,500,000.0O) dated January10, 1996 executed by Kenneth L Lay and Linda P. Lay, his wife, payable to the order ofNatsortsBank more fully described in a certain Deed otTnut~ duly recorded in Book Page , File Number T7S3 144, of the Real Property Records ofliaris County, Texas, said note being secured by Deed of Trust against the following described property, to-wit: See Attached Exhibit "A" For anti in cenaiderati,a of the hill and fool payment of all indebtedness secured by the aforesaid lion or liens, the receipt of which is hereby acknowledged, has released and diaclsarged, and by these presents hereby releases and dsicharges, the above described pnsperty from aU liens held by NationsBank NRA Bank of America, N.A. securing said indebtedosas. Executed this 10th day of Januaxy, 2002. Bank of Antrica NRA Bank of America, N Teresa C J , Asasasant Vtce~i~nt STATE OF MISSOURI CITY OF ST. LOUIS BEFORE ME, the undersigned authority, on this day personally appeared Teresa C. James, Assistant Vice President of Bank of America, NA., lasown us me to be the person and officer whose name is subscribed to the Ibregoing tnatessment, and acknowledged to me thet ho/she executed the same for the purposes and consideration therein expressed, and as the act and deed of sard sasocianon, and us the capocity therein stared. GIVEN UNDER MY HAND A1~1D SEAL OF OFFICE, this 10th day of lamsary, 2U02. Ii i~. PAMEt.A It MG4ZON llfff'~ LUau. Car4y II '~IL~W t~yai*u5ti an~ Pansela R. Niosteon. Notary Pulilic) My Cominiasime Expires: AlTER FILING PLEASE RETURN TO: Bank of Anrerica, N.A.. Cornrrsercial Loan Adissinistranon ATTN: Bobbie Free 9lONorth 11th St. Sr. Louis, MO 63101 r GOVERNMENT EXHIBIT I 14006 Cnm No H 04 0025 BOA / FBI / LAY: 13018 The following desonbed apartmalt unit and an undividad interest in the Common Elunuits, located in and being pat ofTBE HUNTrNGDON, a Condominium Itauinm in Harda County, Texas, escording to the First Amendment And Restated Declaration Of Condominium OfThe Himtingdon mndilue Suivey Plate, Exhibits and By-Laws attached thereto, recorded anader Film Code No. 161009 mad amended by insttuments recorded under Film Code Not. 161091, 168104 and 169002, all of the Condominium Records of Harris County. Texas. (a) R=sidmrtial Unit 33. on the 33rd Floor~ (b) an undivided 0.03078 peecent interest in and to the General Common Elements of said Condominium pn,ject Cc) together with use of the following Limited Common Elemonta~ (I) PaulcingSpaceNos.30.32,34, l~0, 134,137,140 mnd3Ol; (2) Storage Space Nos. l4~ 131, l3Zand 133; which has the address of2121 Kirby Drive, 33rd Floor, Houston, Texas 77019 ("Prupeity Address"); BOA! FBI / LAY: 13019 3/ ~Si Ass.fl~~~lUSTCT CEARTL~ TITLE CCIEPAZI? 9&O~7O2-~ CR- R~'53144 ~ -. NatronaB Texas, NA. Mc !~ 'S [:~J 5Q6:8~~.I8I3 700Lo iana( 2) P.~Q~51877~\ if ouston, Texas 77252.2518 - . -* J 011191% 100116171 ESpaccAbove This Line For Recording Otia] DEED OF TRUST THIS DEED OF 7RLIST("SecuzityInstrument~') is made on January 10,1996. The grantor is KENNETIoL. LAY and LINDA P. LAY, husband and wife ("Borrower"). The trustee is MICHAEL F. HoRn, whom address is 68th Floor, 901 (V Main Street, Dallas, Dallas County, Texas 75202 ('7nsstee"). The beneficiary Is NATIONSBANK OF TEXAS, NA, a national basking association which is organized sad existing under the laws of the United States of America. and whose address it 700 Louisiana (77002)~ P.O. Box 2518, Houston, Harris County, Texas 77252-2518 ("Lender"). Borrower owes Lender the principal sum of FOUR Mn uo 'wgHuwoun Trsous~m,jm00h100Doa~qits (U.S. $4,500,000.00). This debt is evidenced by Bonower's note dated the same date as this Security Instrument ("Note")~ which provides for monthly payments, with the full debt, if not paid, earlier, due and payable on JANUARY 1,2011. This Security Instrument secures to Lender; (a) the repayment of the debt evidenced by the Note, with interest, and all renewals, extensions and modifications of the Note; (b) the payment of all other sums, with interest, advanced under paragraph 7 to protect the security of this Security Instrument, and(c) the performance of Borrowez~s covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in HAIUus County, Texas: The following described apartment unit and an undivided interest in the Common Elements, located an and being part of TotE HUNrINODON, a Condominium Regime in Harris County, Texas, according to the First Amendment And Restated Declaration OlCondoininium OfThe Huntingdon and the Survey Plats, Exhibits and By-Laws attached thereto, recorded under Film Code No. 168009 and amended by instruments recorded under Film Code Nos. 168090, 168104 sad 169002, all of the Condominium 3I Records of Harris County, Texas. (a) Residential Unit 33, on the 33rd Floor~ (b) an undivided 0.03078 percent interest in and to the General Common Elements of saId Condominium project; (c) together with use oldie following Limited Common Elements: (1) Parking SpaceNos. 30, 32, 34, 130, 134, 137,140 and3Ol; (2) Storage Space Nos. 14, 131, 132 and 133; which has the address of2121 Kirby Drive, 33rd Floor, Houston, Texas 77019 ('Property Address"); TOGETHER WITH all the improvements now or hereafter erected on the property, and all easements, appurtenances, and fixtures now or hereafter a part of the propesty. All replacements and additions shall also be covered by this Security Instrument. All of the foregoing as referred to in this Security Instrument as the "Property. BORRO WER COVENANTS that Borrower is lawiWly seised of the estate hereby conveyed and has the right to grant and convey the Property and tInt the Property is unencumbered, except Ibr encumbrances of record. Borrower warrants and will defend generally the title to the Property against all claims and demands, subject to any encumbrances of record. THIS SECURflY INSTRUMENT combines uniform covenants for national use and non-uniform covenants with limited variations by jurisdiction to constitute a uniform security insinanent covering real property. UNIFORM COVENANTS. Borrower and Lender covenant and agree as follows: L PaytnentofPnneipal and Interess, Prepayment and Late Charges. Borrower shall promptly pay when due the principal of and interest on the debt evidenced by the Note and any prepayment and late charges due under the Note. 2. Funds for Taxes and Insaranee. Subject to applicable law orto a written waiver by Lender, Borrower shall pay to Lender on the day monthly payments are due under the Note, until the Note is paid in full, a sum ("Funds') for: (a) yearly taxes and assessments which may attain priority over this Security Instrument as a lien on the Property, TtoCAS-SW4GLE FAMILY-.-elEv¶AffHLMC UNIFORM INSTRUMENT FOI~I 3044 9150 Page 1 of 5 f4-C ci~ - ~ TITLt BOA/FBI/LAY: 13020 5C666- 614 (b) yearly leasehold payments or ground rents on she Property, if any; (c) yearly bamrd or property insurance premiums; (d) yearly flood insurance premiums, if esty', (e) yearly mortgage insurance premiums, if any; and (I) any sums payable by Borrowerto Lender, in accordance with the provisions of paragraph 8, in lieu of the payment of mortgage insurance premiums. These items are called "Escrow Items." Lender may, at any time, collect and hold Funds in an amount not to exceed the maximum amount a lender for a federally related mortgagc loan may require for Borrower's escrow account under the federal Real Estate Settlement Procedures Act of 1974 as amended from time to time, 12 U.s.c. § 2601 e:saq. ("RESPA"), unless another law that applies to the Funds sets a lesser amount. If so, Lender may, at any time, collect and hold Funds in an amount not to exceed the lesser amount. Lender may estimate the amount of Funds due on the basis of current data and reasonable estimates of expenditures of future Escrow Items or otherwise in accordance with applicable law. The Funds shall be held in an institution whose deposits are insured by a federal agency, instrumentality, or entity (including Lender, if Lender is ~uch an institution) or in any Federal Home Loan Bank. Lender shall apply the Funds to pay the Escrow Items. Lender may not charge Borrower for holding and applying the Funds, annually analyzing the escrow account, or verifying the Escrow hums, unless Lender pays Borrower interest on the Funds and applicable law permits Lender to make such a charge. However, Lender may require Borrower to pay a one-time charge for an independent real estate tax reporting service used by Lender in connection with this loan, unless applicable law provides otherwise. Unless an agreement is made or applicable law requires interest to be paid. Lender shall not be required to pay Borrower any interest or earnings on the Funds. Borrower and Lender may agree in writing, however, that interest shall be paid on the Funds. Lender ahall give to Borrower, without charge, an asmual accounting of the Funds, showing credits and debits to the Funds and the purpose for which each debit to the Funds was made. The Funds are pledged as additional security for all sums secured by this Security Instrument. If the Funds held by Lender exceed the amounts permitted to be held by applicable law, Lender shall account to Borrower for the excess Funds in accordance with the requirements of applicable law. If the amount of the Funds held by Lender at any time is not sufficient to pay the Escrow Items when dna, Lender may so notify Borrower in writing, and, in such case Borrower shall pay to Lander the amount necessary to make up the deficiency. Borrower shall make up the deficiency in no more than twelve monthly payments, at Leader's sole discretion. Upon payment in full of eli sums secured by this Security Insttumcnt, Lender shall promptly refund to Borrower any Funds held by Lender. If, under paregraph 21, Lender shall acquire or sell the Property, Lender, prior to the acquisition or sale of the Property, shall apply any Funds held by Lender at the time of acquisition or sale as a credit against the sums secured by this Security Inatnament. 3. Appileation of Payments. Unless applicable law provides otherwise, all payments received by Lender under paragrapha I and 2 shall be applied: fisit, to any prepayment charges due under the Note; second, to amounts payable under paragraph Z third, to interest due; fourth, so principal due; and last, to any late charges due under die Note. 4. Charges; Liens. Borrower shall pay all taxes, assessments, charges, fines and impositions attributable to the Property which may attain priority over this Security Inatniment, and leasehold payments or ground rents, if any. Borrower shall pay these obligations in the manner provided in paragraph 2, or if not paid an that mamer, Borrower shall pay them on time directly to the person owed payment Borrower shall promptly furnish to Lender all notices of amounts to be paid under this paragraph. If Borrower makes these payments directly, Borrower shall promptly furnish to Lender receipts evidencing the payments. Borrower shall promptly discharge say lien which has priority over this Security Instrument unless Borrower~ (a) agrees in writing to the payment of the obligation secured by the lien in a manner acceptable to Lender; (b) contests in good faith the lien by, or defends against enforcement of the lien in, legal proceedings which in the Lender's opinion operate to prevent the enforeement of the lien; or (c) secures from the holder of the lien an agreement satisfactory to Lender subordinating the lien to this Security Instrument If Lender determines that any part of the Property is subject to a lien which may attain priority over this Security Instrument, Leader may give Borrower a notice identifying the liesi. Borrower shall satisfy the lien or take one or more of the actions set faith above within tOdays of the giving of notice. 5. Kmnl or Pruperty Insurance. Borrower shall keep the improvensents now existing or hereafter erected on the Property innaed against loss by fire, hazards included within the term "extended coverage" and any other hazards, including floods or flooding, for which Lender requires insurance. This insurance shall be maintained in the amounts and for the periods that Lender requires. The insurance ranier providing the insurance shall be chosen by Borrower subject to Lender's approval which shall not be unreasonably withheld. If Borrower fails to maintain coverage described above, Lender may, at Lender's option, obtain coverage to protect Lender's rights in the Property in accordance with paragraph 7. All maurancepolicies and rersewals shall be acceptable to Lendersad shall include a standard mortgage clause. Lender shall have the right to hold the policies and res.wals. If Lender requires, Borrower shall promptly give to Lender all receipts of paid premiums and renewal notices. In the event of loss, Borrower shall give prompt notice to the insurancc carrier and Lender. Lender may make proof of loss if not made promptly by Borrower. Unless Lender and Borrower otherwise agree in writing, insurance proceeds shall be applied to restoration or repair of the Property damaged, if the restoration or repair is eecnomically feasible and Lender's security is not lessened If the restoration or repair is not economically feasible or Lender's security would be lessened, the insurance proceeds shall be applied to the sums secured by this Security Insmnanent, whether or not then due, with any excess paId so Borrower. If Borrower abandons the Property, or does not answer within 30 days a notice from Lender that the insurance carrier has offered to settle a claim, then Leader may collect the insurance proceeds. Lender may use the proceeds to repair or restore the Property or to pay sums secured by this security Instrument, whether or not then due. The 30-day period will begin when the notice is given. Unless Lender and Borrower otherwise agree in writing, any application of proceeds so principal shall not extend or postpone the due date of the monthly payments refemud'to hi paragraphs I and 2 or change the amount of the payments. If under paragraph 21 the Property is acquired by Lender, Borrower's right to any insurance policies and proceeds resulting from damage to the Property pnor to the acquisition shall pass to Lender to the extent of the sums secured by this Security Instnrrnens immediately prior to the acquisition. 6. Occupmaey,Preaervaslon, Maintenance and Protection oldie Property; Berrower's Loan Applicatlon Leaseholds. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within sixty days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall TeXAs-SINGI.2 FASAILY-FNM$JFHLMC UNIFORM INSTRUMENT Fom, 3044 9190 ~'e. 2 sf5 BOA I FBI / LAY: 13021 DS1 4us-2a009-3/14467!C1T 50686- lB 15 notbe unreasonably withheld, or unless extenuating circumstances exist which are be~nd Borrower's control. Borrower shall not destroy, damage or impair the Property, allow the property to deteriorate, or commit waste on the Property. Borrower shall be in default if any forfeiture action or proceeding, whether civil or criminal, is begun that in Lender's goad faith judgment could result in forfeiture of the Property or otherwise materially impair the lien created by this Security Instrument or Lender's sceurity interest. Borrower may cure such a default and reinstate, as provided in paragraph 18, by causing the action or proceeding to be dismissed with a ruling that, in Lender's good faith determination, precludes forfeiture of the Borrower's interest in the Property or other material impairment of the lien created by this Security Instmrnent or Lender's security interest Borrower shall also be in default if Borrower, during the loan application process, gave materially false or inaccurate information or statements to Lender (or failed to provide Lender vvith any material information) in connection with the loan evidenced by the Note, including, but not limited to, representations concerning Borrower's occupancy of the Property as a principal residence. If this Security Instrument is on a leasehold, Borrower shall comply with all the provisions of the lease. If Borrower acquires fee tide to the Property, the leasehold and the fee title shall not merge unless Lender agrees to the merger in writing. 7. Protection of Leader's EIghts lathe Property. If Borrower fails to perform the covenants and agreesslents contained in this Seesinty Instrument, or there is a legal proceeding that may significantly affect Lender's rights in the Property (such as a proceeding in bankruptcy, probate, for condemnation or forfeiture orto enforce laws or regulations), then Lender may do and pay for whatever is necessary to protect the value of the Property and Lender's rights in the Property. Lender's actions may include paying any sums secured by a lien which has priority over this Security Instrument, appearing in court, paying reasonable attorneys' fees and entering on the Property to israke repaira. Although Lender may take action under this paragraph 7, Lender does not have to do so. Any amounts disbursed by Lender under this paragraph 7 shall become additional debt of Borrower secured by this Security Instrument, Unless Borrower asid Lender agree to other terms of payment, theseamounts shall bear interest from the date of disbursement at the Note rate and shall be payable, wit irstesast, upon notice from Lender to Borrower requesting payment 8. Mortgage Insurance. If Lender required mortgage insurance as a condition of making the loan secured by this Security Instrument, Borrower shall pay the premiums required to maintain the mortgage insurance in effect. If, for any reason, the mortgage insurance coverage required by Lender lapses or ceases to be in effect, Borrower shall pay the presnitnus required to obtain coverage substantially equivalent to the mortgage insurance previously in effect, eta cost substantially equivalent to the cost to Borrower of the mortgage insurance previously in effect, from an alternate mortgage insurer approved by Lender. If substantially equivalent mortgage insurance coverage is not available, Borrower shall pay to Lender each month a ann equal to one-twelfth of the yuarly mortgage insurance premium being paid by Bormwer when the insurance coverage lapsed or ceased to be in effect. Lender will accept, me and retain these payments as a loss reserve in lieu of mortgage insurance. Loss reserve payments may no longer be required, at the option of Lender, if mortgage insurance coverage (in the amount and for the period that Lender requires) provided by an insurer approved by Lender again becomes available and is obtained. Borrower shall pay the premiums required to maintain mortgage insurance in efihet, or to provide a loss reserve, until the requirement for mortgage insurance ends in accordance with any written agreement between Borrower and Lender or applicable law. 9. Inspection. Lender or its agents may make reasonable entries upon and inspections of the Property. Lender shall give Borrower notice at the time of or prior to an inspection specifying reasonable curse for the inspection. 10. Coasienination. 'The proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking of any part of the Property, or for conveyance in lieu of condemnation, are hereby assigned and shall be paid to Lender. In the event of a total taking of the Property, the proceeds shall be applied to the sums secured by this Security Instrument, whether or not then due, with any excess paid to Borrower. In the event of a partial taking of the Property in which the fair market value of the Property unmediately before the taking is equal to or greater than the amount of the aunts secured by this Security Instrument immediately before the taking, unless Bonower and Lender otherwise agree in writing, the sums secured bythis Security Instrument shall be reduced by the amount of the proceeds multiplied by the following fraction: (a) the total amount of the sums secured immediately before the taking divided by (b) the fair market value of the Property immediately before the taking. Any balance shall be paid to Borrower. In the event of a partial taking of the Property in which the fair market value of the Property unsuediately before the taking is less than the amount of the sums secrired immediately before the taking, unless Borrower arid Lender otherwise agree in writing or unless applicable law otherwise provides, the proceeds shall be applied to the sums secured by this Security Instrument whether or not the sums are then due. If the Property is abandoned by Borrower, or if; after notice by Lender to Borrower that the condemnor offars to make an award or settle a claim for damages, Borrow fails to respond to Lender within 30 days afier the date the notice is given, Lender is authorized to collect and apply the proceeds, as its option, either to restoration or repair of the Property or to the sums secured by this Security Instrunsent, whether or not then due. Unless Lender and Borrower otherwise agree in writing, any application ofpraceedsto principal shall not extend or postpoere the due date of the monthly payments referred to in paragrapha I and 2 or change the amount of such payments. iL Borrower Not Rnlaaaad~ Forhearamee By Lnader Not a Waivar. Extension of the time for payment or modification of amortization of the sums secured by this Security Instrument granted by Lender to any successor in interest of Borrower shall not operate to release the liability of the original Borrower or Borrower's successors in interest Lender shall not be required to commence proceedings against any successor in interest or refuse to extend time for payment or otherwise modify amortization of the sums secured this Security Issstrrsment by reason of any demand made by the original Borrower or Borrower's successors in interest Any forbearance by Lender in exercising any right or remedy shall not be a waiver of or preclude the ezereise of any right orremedy. 22. Successors maul Awgsssflouad; Joint and Several IJabllky; Co-aiguen. The covenants md agreements of this Security Instrument shall bind and benefit the successors and assigns of Lender and Borrower, subject to the provisions of paragraph 17. Borrower's covenants and agreements shall be joint and several. Any Borrow who co-signs this Security Instrument but does not execute the Note: (a) is co-signing this Security Instrument only to mortgage, grunt and convey that Borrower's interest in the Property under the terms of this Security Instrument, (b) is not personally obligated to pay the sums secured by this Security Instrument, and (c) agrees that Lender and any other TEXAS-SiNOLE FAMILY-P W~W1'HLMC UNFORM IN5TttUMENT Form 3044 stse Page 3 at 5 BOA / FBI I LAY: '13022 D~I-Aw-2m09-3/t4-W~TC~t 506:56:1616 Borrower may agree to extend, modul)', forbear or make any accommodations with regard to the terms of this Security Instrument or the Note without that Borrowers consent. 13. Lou Charges. lfthe loan secured by this Security Instrument is subject to a law which sets maximum ican charges, and that law is finally interpreted so that the interest or other loan charges collected or to be collected in connection with the loan exceed the permitted limus, then: (a) any such loan charge shall be reduced by the amount necessary to reduce the charge to the permitted limit; and (b) any sums already collected from Borrower which exceeded permitted limits will be refunded to Borrower. Lender may choose to make this refund by reducing the principal owed under the Note or by making a direct payment to Borrower. If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge under the Note. 14. Notices. Any notice to Borrower provided for in this Security Instrument shall be given by delivering it or by mailing it by first class mail unless applicable law requires use of another method. This notice shall be directed to the Property Address or any other address Borrower designates by notice to Lender. Any notice to Lender shall be given by first class mail to Lender's address stated herein or any other address Lender designates by notice to Borrower. Any notice provided for in this Security Instrument shall be deemed to have been given to Borrower or Lender when given as provided in this paragraph. 15. Governing Law; Severability. This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located. In the event that any provision or clause of this Security instrument or the Note conflicts with applicable law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision. To this end the provisions of this Security Instrument and the Note are declared to be severable. 16. Borrower's Copy. Borrower shall be given one conformed copy of the Note and of this Security Instrument. 17. Transfer ofdiePropeulyorafleaefieial Interest inflorrower. If all or any part of the Property or any interest in it is sold or transferred (or if a beneficial interest in Borrower is sold or transferred and Borrower is not a natural person) without Lender's prior written consent; Lender may. at its option, require immediate payment in full of all sums secured by this SecurityInstrument. However, this option shall not be exercised by Lender if exercise is prohibited by federal law as of the data of this Security Instrument. If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is delivered or mailed withis which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower. 18. Borrower's Right to Reinstate. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Inatniment discontinued at any time prior to the earlier of: (a) 5 days (or such other period as applicable law may specil~i for reinstatement) before sale of the Property pursuant to any power of sale contained in this Security Instrument; or(b) entry ofajudgment enforcing this Security Instrument. Those conditions are that Borrower (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred, (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument; including, but not limited to, reasonable attorneys' fees; and (d) takes such action as Lender may reasonably require to assure that the lien of this Security Inatnanent; Lender's rights in the Property and Borrower's obligation to pay the sums secured by this Security Instrument shall continue unchanged. Upon reinstatement by Borrower, this Security Instrument and the obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under paragraph 17. 19. Sale of Note; Change of Loan Servicer. The Note or a partial interest in the Note (together with this Security Instrument) may be sold one or more times without prior notice to Borrower. A sale may result in a change in the entity (known as the 'Loan Servicer") that collects monthly payment dun under the Note and this Securmty Instrument There also may be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given written notice of the change in accordance with paragraph 14 above and applicable law. The notice will stare the name and address of the new Loan Servicer and the address to which payments should be made. The notice will also contain any other information required by applicable law. 20. H.azardoiu Substances. Borrower shall not cause or pennit the presence, use, disposal, storage, or release of any Hazardous Substances on or in the Property. Borrower shall not do, nor allow anyone else to do, anything affecting the Property that is in violation of any Environmental Law. The preceding two sentences shall not apply to the presence, use, orstm'age onthe Property of small quantities of Hazardous Substances that are generally recognized to be appropriate to normal residential uses and to maintenance of the Proparty. Borrower shall promptly give Lender written notice of any investigation, claim, demand, lawsuit or other action by any governmental or regulatory agency or private party involving die Property and any Hazardous Substance or Environmental Law of which Borrower has actual knowledge. If Borrower learns, or is notified by any governmental or regulatory authority, that any removal or other remediation of any Hazardous Substance affecting the Property is necessary, Boiruwer shall promptly take all necessary remedial actions in accordance with Environmental Law. As used in this paragraph 20, "Hazardous Substances" are those substances defined as toxic or hazardous substances by Environmental Law and the following substances: gastiline, kerosene, other flammable or toxic petroleum products, toxic pesticides and herbicides, volatile solvents, materials containing asbestos or formaldehyde, and radioactive materials. As used in this paragraph 20, "Environmental Law" means federal laws and laws of the jurisdiction where the Property is located that relate to health, safety or environmental protection. NON-UNIFORM COVENANTS. Borrower and Lender further covenant and agree as follows 21. AcceleratIon; Remedies. Lander shall give notice tG Borrower prior to acceleratIon following Borrower's breads of any eovenant or agreement in this Security lasatransant (but not prior to acceleration under paragraph 17 aidess applicable law provides otherwise). The notice slusil specii~ (a) the defialt; (b) the action reqasred to cure the default; (e) a date, not less than 3O4aya from the date the notice Is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice will rasult in acceleration of the sums secured by this Security Instrument and sale of the Property. The TuXAS-SINOLa PAUlLY-F~WFHLMC uNIFORM INSTRUMENT Fom~ 3044 050 Page 4 ci 5 BOA I FBI I LAY: 13023 r~Sl-Aus-nto9.3Il.a~q6frcT 566:86:1817 notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a defanit or any other defesne of Borrower to acceleration and asic. lithe default ii not cured on or before the date specified in the notice, Lender at its option may require immediate payment in thu of all 'nina secured by this Security Instrument ~iithout further demand and may invoke the power of sale and any other remedies permitted by applicable law. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this paragraph 21, including, but aot limited to, reasonable attorneys fees and costs of title evidence. If Lender invokes the power of sale, Lender or Trustee shall give notice of the time, place and terms of sale by posting and recording the notice at least 21 days prior to sale as provided by applicable law. Lender shall snail a copy of the notice of sale to Borrower in the meaner prescribed by applicable law. Sale shall be made at public vaidue between the hosni of 10 a.m. and 4p.m. on the first Tuesday of the month. Borrower authorizes Trustee to sell the Property to the highest bidder for cash in one or more parcels and in any order Trustee determines. Lender or its designee may purchase the Property at any sale. Trustee shall deliver to the purchaser Trustee's deed conveying IndefeasIble title to the Property with covenants of general warranty. Borrower covenants and agree to defend generally the purchaser's title to the Property against all cisluss and demands. The recitals In the Trustees deed shall be prima fade evidence of the truth of the statements made therein. Trustee shall apply the proceeds of the sale in the following order: (a) to all expemes of the sale, including, but not limited to, reasonable Trustee's and attorneys' fees; (b) to all suns secured by this Security Instrument; and (c) any excess to the person or persons legally entitled to it. lithe Property as sold pursuant to this paragraph 21, Borrower or any person holding possession of the Property through Borrower shall Immediately surrender possession of the Property to the purchaser at that sale. If possession is not surrendered, Borrower or such person shall be a tenant at sutfeaunce and may he removed by writ of possession. 22. Release. Upon payment of all sums secured by this Security Instosment, Lender shall relense this Security Instrument without charge to Borrower. Borrower shall pay any rucordalion costs. 23. SubstItute Trustee. Lender, at its option nod with or without catuc, may from time to time remove Trustee and appoint, by power of attorney or otherwise, a successor trustee to any Trustee appointed hereunder. Without conveyance of the Property, the successor trustee shall succeed to all the title, pown~ and duties conferred upon Trustee herein and by applicable law. 24. Subrogation. AnyoftiseproceedsoftbeNoseusedtotnkeupoutstnndingliensagninstalloranyparrof the Property have been advanced by Lender at Borrower's request and upon Borrower's representation that such amounts are dtte and are secured by valid liens against die Property. Lender shall be subrogated to any and all aights, superior titles, Liens and equities owned or claimed by any owner or holder of any outstanding liens and debts, regardless of whether said liens or debts are acquired by Lender by assignment or are released by the holder thereof upon payment. 25. Partial Invalldity. In the event any portion of the sums intended to be secured bythis Security Instrument cannot be lawfully secured hereby, payments in reduction of such sums shall be applied first to those portions not secured hereby. 26. Waiver of Notice of Inteetion to Accelerate. Borrower waives the right to notice of intention to require immediate payment in full of all sums secured by this Security Instrument except as provided in paragraph 21. 27. RIders to this SecurIty [ustrument. The covenants and agreements of the Condominium Rider, the Construction Loan Rider to Security Instrument and Security Agreement and the Custom Mortgage Rider aunched to and recorded with this Security instrument shall be incorporated into and shall amend and supplement the covenants and agreements of this Security Instrument as if the riders were apart of this Security Instrument. 28. Purchase Money; Vendor's Lien; Renewal and Extension. The Note secured hereby is in renewal and extension, but uot in extinguishment, of that indebtechmess described on the Renewal and Extension Addendum attached hereto and made a pert hereof for all purposes. BY SIGNING BELOW, Borrower accepts and agrees to time terms and covenants contained in this Secuilty Instrument and in any rider(s) executed by Borrower mid recorded with it. (Seat) (Seal) i~«=Nnm L LAY - Bonuwer - Bonowe / (Span Below flat Lite forActsowledenntl STATE OF TEXAS, HARRIS County sin: BEFORE ME, the undersigned, a Notaiy Public in and for said County and State, on this day personally appeared KENNETh L. LAY and LINDA P. LAY, husband and wife, known to use to be the parsons whose names are subscribed to the foregoing instrument and acknowledged to etc that they executed die same for the purposes and consideration therein expressed. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this j~.. day of January. 1996. ........................... ................. ~. ..... *.........................................r\fl~~ - - t. No~,Public-SrareofTex~s ------ TEXAS-SINGLE FAMILY-FNMNFNLMC UMFORM INSTRUMENT Form 3044 9/50 Pages il 5 BOA / FBI / LAY: 13024 50686- 1618 OS Aus-21009-3/l-5-qtflcr CONDOMINIUM IUDER THIS CONDOMINIUM RIDER is made this 10th day of January, 1996, and is incorporated into and shall he deemed to amend and supplement tise Mortgsge~ Deed of Trust or Security Deed (the "Security Instrument") of the same date given by the undersigned (the "Borrower") to secure Borrower's Nate to NationsBank of Texas, N.A., a national banking association (the "Lender"), of the same date and covering the Property described in the Security Insn,.imtnt and located at: 2121 Kirby D'iart 33rd Floor, Houston, Tuar 7~Ol9 The Property includes a unit is. together with an undivided interest in the common elensents at; a condominnun project losown as: The Hsnongdon (the tondominiumProject"). ifthtrowners association or other entity which acm for the Condominium Project (the "Owners Association") holds title so property for the benefit or use of its members or shareholders, the Property also includes Borrower's interest in the Owners Aasociation and the uses, proceeds and benefits of Borrower's interest COemOneiNtUM CovErlAms~ In addition so the covcoants and agreements made in the Security Instrument; Bonuwer and Lender further covenant and agree - follows: A. CondomInIum Obligailouzs. Borrower shall perfoon all of Borrowa~s obligations tinder the Condominium Project's Constituent Documents. The "Constituent Documents" are the: (i) Declaration or any other document which creates the Condominium Project; (ii) by-laws; (iii) code of regulations; and Civ) otlsereqiuvalent documents. Borrower shall promptly pay, when due, all dues and assessments imposed pursuant to the Constiosent Documents. B. Hazard iasura,eL So long as the Owners Association maintains, with a generally accepted insurance carrier, a "master" or"blasikct" policy an the Condominium Project which is sasisfuclosy to Lender and which provides insurance coverage in the umoents, for the periods, and against the bazzds Lender requires, including fire and hazards included within the term extended coverage," sheer (i) Lender waives the provision intlniforun Covassant2fcrllre monthly payment to Lender of one-twelfth of the yearly premium installments for hazard insurance on the Property; and (ii) Borrower's obligasson under Uniform Covenant 5 to maintain humrd insurance coverage on the Property is deemed satisfied to the extent that the required coverage is provided by the Ownera Association policy. Borrower shall give Lender prompt notice of any lapac in requlend hazard insurance coverage. In the event of a distribution of hazard insurance proceeds in lion of restoration or repak Ibilowing a loss to the Property, whether so the unit orto common elemente~ any proceeds payable to Borrower we hereby assigned and shall be paid to Lender for application to the sums secured by the Deed of Trust; with any excess paid to Borrower. C. Public LiabilIty lasurauce. Borrower shall take such actions as may be reasonable to insure that sIte Owners Association maintains a public liability insurance policy acceptable in faint, amount, and extent of coverage to Lender. D. Comdeasiiatiinu. The proceech of any award or claim for damages, direct or consequential, payable toBosiuwer in connection with any condemnation or other taking of all or any put of the Property, whether of the unit or of the common elements, or for any conveyance in lieu of condemnation, are hereby assigned and shall be paid to Lender. Such proceeds shall he applied by Leader to the sums secured by the Deed of Trust as provided in Uniform Covenant 10. £ Lmder~s Prior Cement. Borrower shall not, except after notice so Lender and with Lender's prior written consent; either partition or subdivide she Property or conanut to: (i) the ab adoument or senninasion of the Condominium Project; except for shandosenent or termination required by law hi the case of substantial destruction by fire eroulser casualty or in the case of a takIng by coudemnatien or eminent domain: (li) any amendment to any provision of the Constituent Documents if the provision is for the expreas benefit of Lender, (lii) any action which would have Use ellectof rendering the pubhc llabllity insurance coverage maintained by the Owners Association unacceptable to Lender. F. Remedies. If Borrower does not pay condominium duea and aseesamenis when dim, then Lender may pay than. Any amounts disbursed by Lender under this paragraph F ahall become additional debt of Borrower secured by the Seasrisy Instrument Unless Borrower and Lender agree so other terms of payment, these smoasam shall bear interest from the date of disbursement at the Note rate and shall he payable, with interest; upon notice front Lendar so Borrower requesting payment. BY StoNING BELOW, Borrower accepts and specs so the tarma and provisions contained in thia Condominium Rider. ___________________________________________(Seal) -Borrower (Seal) Ma -Borrowr MULTISTATE CONDOMINIUM RIDER - Single Family - Fannie Mae/Freddie Mac IJNIFORl't SatIRIJUENT Fonts 1140 9/90 BOA! FBI I LAY: 13025 DS1*A~J&-22oo9.1II4-96IrCr 50666- 1619 ~ Trim CONST1WCTION LoAN RIDER TO SECURITY INSTRUMENT AND SECURITY AGRItEMENT is made this 10th day of Januasy, 1996, and is incorporated into and shall be deemed to amend and supplement the Dead of Trust ("Security Instrument") of the same date given by the undersigned, KENNETH L. LAY AND LINDA P. LAY ("Borrower") to secure Bonuwet~s Note (the "Note") to NATIONSBANK OF TEXAS, NA, a national banking association ("Lender") of the same date and coveting the property described in the Security Instrument (the "Property") and located at: 2121 Kirby Drive, 33rd Floor, Houston, Harris County, Texas 77019. ADDiTIONAL COVENANTS In nddition to the covenants and agreements made in the Security Instrument, Borrower and Lender further covenant and agree as follows: A. ~ Lender and Borrower entered intoaCosistruction Loan Agreement this same date (the "Agreement"). The Agreement is incorporated herein by reference. Default under the taunt of the Agreement shall be default under the terms of the Security Instrument, which default entitles the Lender to accelerate the maturity of the Note and to exercise all available remedies. Borrower and C. C. RouSE BUILDING CORPORATION, DOING nus~ntss AS TYWES SMRICs BUILDING CORPORATION (the "Contractor") have entered into Contract for Improvements (With Transfer of Lien) dated January 10, 1996, which describes certain improvements to be made to the Property. Under the Contract for Improvements, Borrower panted a first and valid lien on the Property to Contractor in accordance with the laws and constitution of the State of Texas, which lien Contractor has assigned to Lender. The Note secured by the Security Instrument shall be used to pay for the improvements to be made by Contractor pursuant to the Contract for Improvements. The Contract for Improvements is filed or will be filed for record in the Office of the County Clerk of Harris County, Texas. C. EIEA~YA~C~ The Security Instrument is given wholly or partly to secure future obligations that may be incuemd under the Note. The face amount of obligations evidenced by the Note and secured by the Security Instrument is $4,500,000.00, and the maximum amount, including present as well as future advances evidenced by the Note, that may be secured by the Security Instrument at any one time shall not exceed the face amountoftheNote. Provided, however, the said maximum amount may be increased by such additional amounts as may be advanced by Lender pursuant to the Security Instrument and all such additional amounts shall be deemed necessary expenditures for the protection of the security in accordance with and to the extent allowed by Texas law. Future advances evidenced by tim Note shall be made as provided in the Agreement. Borrower and Lender have not contracted to requite written notation or evidence of ench future advance to be made under the Note. Borrower hereby acknowledges that the Contract for Improvements and the liens created thereby constitute valid and subsisting hens on the Property, and that none of the rights and liens existing thereunder shall be impaired or released hereby, and the same an supplemented hereby shall remain in full force and effect, and that all rights and liens existing and to exist thereunder are renewed, extended, carried forward, and conveyed, and ate not extinguished hereby, to secure all of the indebtedness hereinnbove mentioned. Without limiting any of the provisions of the Security Instrument, Borrower, as Debtor (and being referred to in this paragraph as "Debtor," whether one or more), expressly GRANTS unto Lender, as Secured Party (and being relbemd to in this paragraph as "Secured Party," whether one or more), a security interest in the following described property (including both those now and those hereafter existing) (collectively, "Collateral") to the fail extenrthat such properties may be subject to the Unifonn Commercial Code-Secured Tramactions (Chapter 9 of the Tern Business & Commerce Code, as amended) (the "Texas UCC"): (I) To the extant owned by Debtor, Debtor's successors and assigns, all fixtures, goads, fumishings, equipment, building material, machinery, and personal property now or hereafter located in, on, or used or intended to be used in connection with the Property, including without limimdoru doors, partitions; window and floor coverings; apparatus, material, or equipment for supplying, holding, or distributing heating, cooling, electricity, gas, water, air, and lighting; security, access control, and fire prevention and extinguishing apparatus, material, or equipment, household appliances; bathroom and kitchen fixtures; cabinetry; and landscaping (collectively, "Fixtures and Personal Property"). Camuenoej LoAj~ p.maa Pas~ I~an.~,h & Li,,da Lay BOA / FBI I LAY: 13026 PSI~Aus.2XJO9-3fl-M6flCT 5D6:86~rnao (2) All proceeds on sums payable in lieu of or as compensation for the loss of or damage to the Property and the Fixtures and Personal Property, and all rights in and to all present and future fire and hazard insurance policies. (3) All proceeds of any award or claim for damages, direct or consequential, in connection with any condemnation or other taking, in whole or in part, of the Property, or far conveyance in lieu thereof. (4) All of Debtor's interest and rights, as lessor, in and to all leases now or hereafter affecting the Property, and all rental income payable thereunder or otherwise. (5) All bonds, deposits, letters of credit, and any other sums at any time credited by or due from Secured Party to Debtor or any guarantor, co-maker, or surety of Debtor, and held by Secured Party. (6) Any replacements, additions, or betterments to, or proceeds of, the collateral described hereinabove, the asic or distribution of which is not authorized hereby. In this regard, Debtor and Secured Party further covenant and agree as follows: 1. In addition to any other remedies granted in the Security Instrument to Secured Party or Trustee, Secured Party may in the event of default, proceed under the Texas UCc as to all or any part of the Collateral, and shall have and may exercise with respect to the Collateral all the rights, remedies, and powers ofasecured party under the Texas ucc, inchaling without limitation the right and power to sell at public or private sale or sales or otherwise dispose of, lease, or utilize the Collateral, or any part or parts thereof in any manner authorized or permitted under the Texas ucc after default by a debtor and to apply the proceeds thereof toward payment of any costs, expenses, reasonable attorneys fees, and legal expenses thereby incurred by Secured Party and toward payment of indebtedness described in the Security Instrument in such order or manner as Secured Party may elecL 2. Among the rights of Secured Party in the event of default and without linutatian, Secured Party shall have the right to take possession of the Collateral andto enter upon any premises upon which the Collateral may be situated for such purpose without being deemed guilty of trespass and without liability for damages thereby occasioned and to take any action deemed necessary, appropriate, or desirable by Secured Party, at its option and in its sole discretion, to repair, refurbish, or otherwise prepare the Collateral for sale, lease, or other use or disposition as herein authorized. 3. To the extent permitted by law, Debtor expressly waives any notice of sale or other disposition of the Collateral and any other rights or remedies of a debtor or formalities prescribed by law relative to sale or disposition of the Collateral or exercise of any other right or remedy of Secured Party existing after default hererinder, and to the extent any such notice is required and cannot be waived, Debtor agrees that if such is mailed, postage prepa4 to Debtor at the address shown herein at least ten (10) days before the time of the sale or disposition, such notice shall be deemed reasonable and shall fully satisly any requirement for giving of such notice. 4. After default, Secured Party is expressly granted the right, at its option, to transfer, at any time to itself or to its nominee, the Collateral or any part thereof and to receive the monies, income, proceeds, or benefits attributable or accruing thereto and to hold the sante as security for amounts owing on any of the indebtedness, whether or not then due, in such manner as Secured Party may elect. All rights to marshalling of assets of Debtor, including any such right with respect to the Coflareral, are hereby waived. 5. All recitals in any instrument of assignment or any other brairtanent executed by Secured Party or by Trustee incident to asIc, transfer, assignment, lease or other disposition or utilization of the Collateral orany part thereof hereunder shall be requisite to establish full legal propriety of the asic or other action of any fact, condition, or thing incident thereto, and all prerequisites of such sale or other action and of any fact, condition, or thing incident thereto shall be presumed conclusively to have been performed or to have occurred. 6. Secured Party may require Debtor to assemble the Collateral and make it available to Secured Party at a place to be designated by Secnted Party that is reasonably convenient to both parties. All expenses of retaking, holding, preparing for sale, lease, or other use or disposition, selling, leasing, or otherwise using ordisposlag of the Collateral and the like hererindee, inchiding also all reasonable attorneys' fees, legal expenses, and costs, shall be added to the indebtedness secured by the Security Instrument and Debtor shall be liable therefor. 7. Certain of the Collateral is or will become ilxtures" (as that term is defined in the Texas ucc) on the Property, and the Security Instrument upon being filed forrecosti in the real estate records shall operate also as a financing statement upon such of the Collateral that is or may become fixtures. 8. Acopy of this Security Instrument, which is signed by Debtor, may also serve as a financing statement under the Texas ucc between Debtor and Secured Party, whose addresses are set forth herein. 9. So long as an amount remains unpaid on any indebtedness secured by the Security Instrument, Debtor shall not execute and there shall not be filed in any public office any financing statement Coxanurnow LOM4 area Pa~c 2 I,Zan,c'h & Lin.ta by BOA I FBI I LAY: 13027 OS1.Am.22009.S/I.O.Q&IltZt 50686- 182[ or statements affecting the Collateral other than financing statements in favor of Secured Party hereunder, unless the prior written specific consent and approval of Secured Party shell have first been obtained. 10. Secured Party is authorized to file in jurisdictions where this authorization will be given effect a financing statement signed only by Secured Party, Debtor shall join Secured Party in executing one or more financing statements pursuant to the Texas ucc in fonn satisfactory to Secured Party and shall pay the cost of fihingthe sane or filing or recording the Security Instruinentas ainancing statement in all public offices at anytime and from time to time whenever filing or recording of any financing statement or the Security Instrument is deemed by Secured Party to be necessary or desirable. Any carbon, photographs, or other reproductions of this document may be filed by Secured Party and shall be sufficient as a financing statement. 11. Debtor fbrther warrants and represents to Secured Party that, except for the security interest panted hereby in the Collateral, Debtor is the owner and holder of the Collateral, free of any adverse claim, security interest, or encumbrance, and Debtor agrees to defend the Coilateral against all claims and demands of any person at any time claiming the same or any interest therein, except rights of tenants to usc thcreof and subject to the other matters set forth herein. Debtor further warrants and represents that Debtor has not heretofore signed any financing gatesnents in connection with the Collateral and that there are no financing statements signed by Debtor now on file in any public office. E. The first sentence of Paragraph 6 of the Security Instnsmeot is modified and amended as follows: NBorrower shall occupy, establish, and use the Property as Borrower's principal residence within thirty days after August 1, 1997, end shall continue to occupy the Propertyns Borrower's principal residence for at least one year after the date of occupancy." ~ ~ So long as Borrower is not in default under the terms of the Note, the Agreement, the Contract for Improvements, or the Security Instrument, and provided that Borrower has completed the improvements described art the Agreement, this Rider shall terminate after the advance of all funds as necessary to complete the construction of the Improvements as described in the Agreanent, or the Rollover Date as defined in the Note, whichever is later, and this Rider shall no longer be in effect. By signing below, Borrower accepts and agrees to the terms and covenants contained in this Construction Loan Rider to Security Instrument and Security Agreement. ~9~~eriireth L Lay 6~Lr 2K7~{~ Linda N,L~~y / i~m,,etb & Linda Lay BOA I FBI I LAY: 13028 CoNmuc~rvN LOAN RIng, OS 4us-22009.3/I-896tItT £~~BIi~ER 50685-1622 (TO BE RECORDED WITH DEED OF TRUST) This Custom Mortgage Rider ("Rider") dated this 10th day of January, 1996, shall be deemed to amend and supplement the Deed of Trust (the "Security Instrument") dated January 10, 1996 given by the undersigned (the "Borrower") to secure Borrower's Note to NATIONSBANK OF TExAs, NA. ("Lender") of even date herewith ("Note") covering the Property described in the Security Instrument and known as or located at: 2121 Kirby Drive, 33rd Floor, Houston, Texas 77019 ("Property"). Defined terms used in this Rider shall have the meaning set forth in the Security Instrument unless otherwise indicated. In addition to the covenants made in the Security Instrument, l3orrower farther covenants and agrees as follows: I. Hazardous Substances. Bonitowut SHALL INDENO~TEY LENDER AND TRUSTEE AGAINST, AND REIMBURSE THEM ON DEMAND FOR, ANY AND ALL UABILFIIES, COSTS AND EXPENSES (INCuJDn'to WITHOUT LIMiTATION REASONABLE FEES AND EXPENSES OF ATTORNEYS AND OTHER PROFESSIONAL CONSULTANTS AND EXPERTS) OF EVERY KiND WHiCH MAY BE INCURRED BY LENDER OR TRuSTEE AS A neswz OF TIlE PRESENCE OF ANY HAZARDOUS SUBSTANCE ABOUT THE PROPERTY, OR THE MIGRATION OR RELEASE OR THREATENED MIGRATION OR RELEASE OF ANY HAZARDOUS SUBSTANCE ON, TO, FROM OR THROUGH THE PROPERTY, AT ANY TIME DURING BORROWER'S OWNERSHIP OF THE PROPERTY, OR ANY ACT, OMISSION OR EVENT EIaSTING OR OCCURRING Itt CONNECTION wrnt THE HANDLING, STORAGE, REMOVAL OR DISPOSAL OF ANY SUCH HAZARDOUS SUBSTANCE OR ANY vIOLATION OF ANY ENVIRONMENTAL LAW OR THE FEING OR IMPOSITION OF ANY ENVIRONMENTAL LIEN OR CLAIM AGAINST THE PROPERTY AS A RESULT OF THE ABOVE OCCURRENCE. 2. No Other Liens. Borrower will not, without the prior written consent of Lender, except as otherwise specified by applicable law, grant, suffer or pessnis any contractual or non-contractual lien on or security interest in the Property, except in favor of Lender, or fail to promptly pay when due all lawful claims, whether for labor, materials or otherwise. To the extent applicable law allows the creation of liens against the Property, Borrower will advise Lender its writing within ten (10) days of the creation of any such liens against the Property. Provided however, Borrower shall have the right to contest in good faith the validity of any mechanic's or materialman's lien or other non-contractual lieu, provided Borrower shall first furnish Lender a bond or other security satisfactory to Lender in such amount as Lender shall reasonably require, but not more than two hundred percent (200%) of the assount of the claim, and provide further that Borrower shall thereafter diligently proceed to cause such lien to be removed and discharged. 3. Flazadal St meads/A~praiaala. Lender may at its option obtain once in each ysar (or as otherwise requested by Lender) an appraisal of the Property or any part thereof prepared in accordance with written instructions from Lender by a third party appraiser engaged directly by Leader if any of the following occur as detsrmJned by Lender in its sole discretion: (a) a Default baa occinred and is continumg (b) an adverse change has occurred in real estate market conditions in the area where the Property is located; (c) an appraisal is required or recommended by bank examiners and/or auditors or pursuant to banking regulations or bank policy then in effect; or (d) an adverse change baa occurred lathe financial condition of Borrower. Each such appraiser and appraisal shall be satisfactory to Lender. To the extent not prohibited by applicable law, the cost of each such appraisal shall be payable byBorrowerto Lender on demand (which obligation Borrower hereby promises to pay). Without limitation of other or additional requhunents in any of the other Loan Documents, Borrower will furnish to Lender, upon request by Lender, in form and detail satisfactory so Lender, a financial statement of Borrower no later than ninety (90) days after the anniversary date of the immediately preceding financial statement received by Lender. Each financial statement submitted pursuant to this section shall be certified in writing as true and correct by Borrower. Borrower will furnish to Lender at Borrower's expense all evidence which Lender may from time to time reasonably request as to compliance with all provisions of the Nore~ Security lnssruzneritas supplemented by this Rider, and any other documents provided by Borrower to Lender or executed in connection with the loan evidenced by the Note (collectively the "Loan Documents"). 4. EfhetiveasFmnaudng Stataucat. The Security Inm,nnentshell be effective as a financing statement filed as a fixture filing with respect toall fixtures included within the Property and is to be filed for record in the real estate records of each city or county where the Property (including said fixtures) is situated. 5. Construction Mortpge~ The Security Instrument constitutes a "Construction Mortgage" as defined in the Uniform Commercial Code adopted by the jurisdiction in which the Property is located to the extent that it secures an obligation incurred for the construction of improvements including the acquisition cost of the land. 6. No Liability of Trustee. The Tmstee, where applicable, shall not be liable for any error or act done by Trustee in good faith, or be otherwise responsible or accountable under any circumstances whatsoever (including Trustee's negligence), except for Trustee's gross negligence or willful misconducL BORROWER WILL REIMBUILSE TRUSTEE FOR, AND SAVE HIM ItARMLESS AGAINST, ANY AND ALLLIABILITz' AND EXPENSES WHICH MAYBE INCURRED BY HIM IN THEPERFORMANCE OF HIS DUTIES. THE FOREGOING INDEMNITY Cusic,., MoaroAn! Hines Lanneth & Linda Lay BOA / FBI / LAY: 13029 PSI -Rus-221309-S/I.8.D6fltT 565-aa- I 823 SHAI L HOTTERMINATE UPON DISCHARGE OF THE SECURED INDEBTEDNESS OR FORECLOSURE, OR RELEASE OR OTHER TERMINATION OF THE SECURITY INSTRUMENT. 7. Entire Aireninent; Further Assurances. The Loan Documents constitute the entire understanding and agreement between Borrower and Lender with respect to the irsosactious arising in connection with the indebtedness secured hereby and supersede all prior written or oral understandings and agreements between Borrower and Lender with respect to the matters addressed in the Loan Documents. Borrower will, promptiy onLender's request, execute, deliver, procure and/or file such further documents, and take such further action as is necessary, desirable or proper to ceny out more effectively the purposes of the Loan Documenu~ to correct any defect in the Loan Documents, or to more fully identify and subject to the Security Instrument any property intended to be covered by the Security [nstrwnent. By signing below Borrower accepts and agrees to the lenDs and covenants contained in this Rider. EXECUTED this 10th day of January, 1996. / / Linda Lay Qm~oM MVULTGAOE RE,ER P4a 2 KPKi»=~v' K.mnh & Linda Lay BOA! FBI! LAY: 13030 flSf-AuS-22t09.3/14-96flCt 5O6:a6~Is24 THIS RENEWAL AND EXTENSION ADDENDUM is attached to and made a part of the Deed of Trust (the "Security Instrument"), ftom KENNhTHL. L4Y AND LINDA P. LAY ("Borrower") to Michael F. Hord, Trusree~ for the b tofNATIOI'JSBANIC or TEXAS, N.A., a nations] banking association ("Lender"), given to secure anote in the original principal amount of $4,500,000.00, of even date herewith, executed by Borrower, and payable to the order of Lender (the "Note"). A. . Borrower and C. C. RL)USE BUILDING CORPORATION, DOING BUSINESS AS TYNES SPARKS BUILDING CORPORATION ("Contractor") have entered into a Contract for Improvements (With Transfer of Lien) of even date herewith which describes certain improvements to be made to the Property (as defined in the Security Instrument). Under the Contract for Improvements, Borrower granted to contractor a lien on the Property which Connector has transferred and assigned to Lender. Totheextent of $2,850,000.00, the Note shall be used to~y for the improvements to be made by Contractor pursuant to the Connect for Improvements. Borrower expressly acknowledges that the lien and all other interests in the Property granted to Contractor and assigned to Lender by the Contract for Improvements is for the sole benefit of Lender, that the lien is valid, that it subsists against the Property, that by this Security Instrument it is renewed and extended in full force to secure payment of the Note, and that it may be enforced by Lender in accordance with the terms of the Security Inmment. Borrower acknowledges that by the Security Instrinnent, Lender and Lender's successors and assigns are subrogazed to all rights, titles, powers, estates, security interests, and liens granted to Contractor under the Contract for Improvements. B. Renewal of Vendor's Lien and Deed of Tr"~f To the extent of Sl,600,000.00, the Note secured by this Security Instrument renews, extends and refinances the balance (which may include accrued interest) that Borrower owes on a note in the original principal sum of $1,650,000.00, dated January31, 1995, executed by Kenneth L. Lay and Linda P. Lay, payable to the order of NationsBank of Texas, NA., a national banldng association, and secured by two instruments, both of which create liens against the Property~ a deed retaining a vendor's lien recorded under Harris County Clerk's File No. R253679, Official Public Recatis of Real Property of Harris County, Texas; and a deed of trust recorded under Harris County Clerk's File No. R253680, Official Public Records of Real Property of Harris County, Texas. Borrower acknowledges that the liens securing the refinanced note are valid, that they subsist against the Property, and that by this Security Instrument they are renewed and extended in fell force until the Note is pauL Borroweracltnowledges and agrees that this renewal, extension and refinance shall not be considered a novation of accotmt or a new connect but that all rights, tities, powers, liens, security interests, and estates created by the refinanced note and liens securing it constitute valid and subsisting obligations and liens against the Property. Borrower also acknowledges that by this Security Instrument, Lender and Lander's successors and assigns are subrogated to all rights, titles, powers, estates, security interests, and liens that accrued to the original holder and owner of the refinanced note. I ~ - / / Z-,-- /.*ebnethL.LLY - ~U UE mL'..~ * ~T4 5M~ 114 ~ a33a 1?E STArE OP rEXASI, / WLHIY OP UAARO k m si Pu I~u1 b~ UE AS ~ REW~. m A Pui Pi~mite d JAN 1 91996 ODDIDUlI Pqe I I~a,nXth & Linda L.y BOA / FBI / LAY: 13031