Trust Deed

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.

THE STATE OF TEXAS

COUNTY OF

This Wrap-Around Deed of Trust (Security Instrument) is given on (date). The Trustor is of

The Trustee is of

The Beneficiary is , a corporation organized and existing under the laws of Texas, and whose address is

This conveyance is being made in trust to secure the payment of the principal sum of $ with interest at the rate of % per annum on the unpaid balance, as evidenced by a Promissory Note of even date executed by Borrower, payable to the order of Lender, payable at the office of Lender at in installments of $ each, including both principal and interest, the first installment being due and payable on , and successive installments being due and payable on the first day of each subsequent month, and continuing until principal and interest are fully paid, with the final payment being due on or before

The above-stated Note, referred to in this Security Instrument as the Wrap-Around Note, is an all-inclusive note that includes within its principal amount the unpaid principal balance of $ of an existing promissory note (the primary note) made payable to and held by and described as follows:

...and which primary note is secured by a deed of trust (the first deed of trust), and which is held by , the first lien holder, that covers the property described in Exhibit A attached hereto and made a part hereof, and which first deed of trust was recorded on , in Book at Page in the office of the Official Recorder of , Texas.

For these purposes, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, that certain property located at , and being more particularly described as follows:

Together with all the improvements now or to be erected on the property, and all easements, rights, appurtenances, rents, royalties, mineral, oil and gas rights and profits, water rights and stock and all fixtures now or to become a part of the property. All replacements and additions shall also be covered by this Security Instrument.

Borrower covenants that Borrower is lawfully seized of the estate conveyed by this Security Instrument and has the right to grant and convey the Property and that the Property is unencumbered, except for encumbrances of record.

Borrower and Lender covenant and agree as follows:

2. Primary Note, First Deed of Trust and Wrap-Around Note

A. As to the underlying or primary indebtedness secured by the first deed of trust, there exists no default or any event that would constitute an event of default under the terms of the primary note or the first deed of trust and the information set forth above with respect to the first deed of trust and the primary note that it secures is accurate and correct in every respect.

B. Borrower will pay directly to the holder of the Wrap-Around Note the installments of principal and interest required by the terms of the Wrap-Around Note and will not make any payment directly to the holder of the primary note or request any release, partial release, amendment, or other modification of the primary note or first deed of trust without the prior written consent of Lender.

C. On receipt of such payment and from the proceeds of the same, Lender shall pay each installment of principal and interest on the primary indebtedness at least days before it becomes due and payable and shall submit evidence of the payment to Borrower before the due date.

D. If Lender fails to make such payments on the primary indebtedness when due and payable and furnish evidence of such payment to Borrower as provided in the preceding paragraph, Borrower may, at Borrower’s option, elect to:

i. Make such payments on the primary indebtedness and deduct such amounts from the amount of the installment due on the Wrap-Around Note;

ii. Continue to pay the full amount of the installments on the Wrap-Around Note and, in the event Lender fails to make such payment within days of the due date, make written demand on Lender for reimbursement of any such payments made by Borrower to Lender. Should Lender fail to reimburse Borrower within days after the receipt of such demand, Borrower shall have the right to declare the Wrap-Around Note and this Security Instrument, to be null and void, in which event Lender agrees to return the Wrap-Around Note to Borrower and to execute, acknowledge, and deliver a release of this Security Instrument.

E. If an event of default occurs in the first deed of trust, Lender agrees that on receipt by Lender of any notice of default given by the holder of the primary indebtedness pursuant to the primary note or pursuant to the first deed of trust securing same, Lender shall immediately send to Borrower a copy of same, or if Lender becomes aware of any event of default, Lender shall immediately notify Borrower of the event of default, and Borrower may, at Borrower’s option, perform any act required in any form or manner deemed expedient to cure the event of default.

F. Borrower shall have the right at any time to prepay the primary indebtedness.

G. Lender shall not, without securing the prior written consent and approval of Borrower:

i. Alter, renew, rearrange, restructure, or refinance the primary indebtedness or modify the primary indebtedness or the first deed of trust;

ii. Permit the holder of the primary indebtedness to alter, renew, rearrange, restructure, or refinance the primary indebtedness or modify the primary indebtedness or the first deed of trust securing the same;

iii. Take any action, or authorize any action to be taken, that would have the effect of increasing the total amount of the primary indebtedness; or

iv. Request or accept any extension, postponement, indulgence, or forgiveness of the primary indebtedness. In the event of any such request, Lender, at Borrower’s option, shall grant Borrower a corresponding extension, postponement, indulgence, or forgiveness under the Wrap-Around Note.

H. Any proceeds of condemnation or insurance policies required to be kept in force under this Security Instrument, shall be payable to Lender and the holder of the primary indebtedness "as their interests may appear," and such policies shall be kept by Lender and Lender agrees that its interest in the policies or the proceeds of the same are inferior and subordinate to the interest of the holder of the primary indebtedness.

I. Any reference contained in this Security Instrument, as to the right of Borrower to pay any sum owing on the primary indebtedness shall not constitute an assumption of personal liability by Lender for any such payment, and shall not in any way modify the obligation of Lender to the holder of the primary indebtedness.

3. Payment of Principal and Interest; Prepayment and Late Charges

Borrower shall promptly pay when due the principal of and interest on the debt evidenced by the Wrap-Around Note and any prepayment and late charges due under said Note.

4. Funds for Taxes and Insurance

A. If required by written notice from Lender to Borrower, and subject to applicable law or to a written waiver by Lender, Borrower shall pay to Lender on the day payments are due under the Wrap-Around Note, until the Note is paid in full, a sum (the Funds) equal to one-twelfth of the Escrow Items.

B. If the amount of the Funds held by Lender, together with the future payments of Funds payable prior to the due dates of the Escrow Items, shall exceed the amount required to pay the Escrow Items when due, the excess shall be, at Borrower's option, either promptly repaid to Borrower or credited to Borrower on payments of Funds.

C. On payment in full of all sums secured by this Security Instrument, Lender shall promptly refund to Borrower any funds held by Lender.

5. Charges and Liens

Borrower shall promptly discharge any lien that has priority over this Security Instrument unless Borrower takes one or more permitted actions within days of notice.

6. Hazard Insurance

Borrower shall keep the improvements now existing or to be erected on the Property insured against loss by fire, hazards included within the term extended coverage, and any other hazards for which Lender requires insurance.

If Borrower abandons the Property, or does not answer within days a notice from Lender that the insurance carrier has offered to settle a claim, then Lender may collect the insurance proceeds.

7. Preservation and Maintenance of Property; Leaseholds

Borrower shall not destroy, damage, or substantially change the Property, allow the Property to deteriorate, or commit waste.

8. Protection of Lender’s Rights in the Property

Any amounts disbursed by lender under this Section 8 shall become additional debt of Borrower secured by this Security Instrument.

9. Inspection

Lender or its agent may make reasonable entries on and inspections of the Property.

10. Condemnation

If the Property is abandoned by Borrower, or if, after notice by Lender to Borrower that the condemnor offers to make an award or settle a claim for damages, Borrower fails to respond to Lender within days after the date the notice is given, Lender is authorized to collect and apply the proceeds.

11. Forbearance by Lender not a Waiver

Any forbearance by Lender in exercising any right or remedy shall not be a waiver of or preclude the exercise of any right or remedy.

12. Successors and Assigns Bound; Joint and Several Liability; Cosigners

The covenants and agreements of this Security Instrument shall bind and benefit the successors and assigns of Lender and Borrower, subject to the provisions of Section 18.

13. Loan Charges

If a refund reduces principal, the reduction will be treated as a partial prepayment without any prepayment charge under the Wrap-Around Note.

14. Legislation Affecting Lender’s Rights

If the enactment or expiration of applicable laws has the effect of rendering any provision of the Wrap-Around Note or this Security Instrument unenforceable according to its terms, Lender may require immediate payment in full.

15. Notices

Any notice to Borrower shall be directed to the property address or any other address Borrower designates by notice to Lender.

16. Governing Law; Severability

This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located.

17. Borrower’s Copy

Borrower shall be given one conformed copy of the Wrap-Around Note and of this Security Instrument.

18. Transfer of the Property or a Beneficial Interest in Borrower

If all or any part of the Property or any interest in it is sold or transferred without Lender's prior written consent, Lender may require immediate payment in full.

19. Borrower’s Right to Reinstate

Borrower may have the right to reinstate before sale or judgment, subject to the stated conditions.

20. Acceleration; Remedies

If the default is not cured on or before the date specified in the notice, Lender may require immediate payment in full and may invoke the power of sale and any other remedies permitted by applicable law.

21. Lender in Possession

On acceleration under Section 20, or abandonment of the Property, Lender shall be entitled to enter on, take possession of, and manage the Property and to collect the rents of the Property.

22. Release

On payment of all sums secured by the first deed of trust and this Security Instrument, Lender shall release this Security Instrument without charge to Borrower.

23. Substitute Trustee

Lender may remove Trustee and appoint a successor Trustee.

24. Subrogation

Any of the proceeds of the Wrap-Around Note used to take up outstanding liens against all or any part of the Property have been advanced by Lender at Borrower's request.

25. Partial Invalidity

If any portion of the sums intended to be secured by this Security Instrument cannot be lawfully secured, payments in reduction of such sums shall be applied first to those portions not secured by this Security Instrument.

26. Waiver of Notice of Intent 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 Section 20.

The undersigned Borrower and Lender accepts and agrees to the terms and covenants contained in this Security Instrument effective the

THE STATE OF TEXAS

COUNTY OF

The foregoing instrument was duly acknowledged before me on (date) by .

__________________________________________

Notary Public, State of Texas

[Seal]

Name Printed

Commission Expires

THE STATE OF TEXAS

COUNTY OF

This instrument was acknowledged before me on (date), by , of , a Corporation, on behalf of such Corporation.

____________________________________

Notary Public, State of Texas

[Seal]

Name Printed

Commission Expires