8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION 

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 30, 2015

Green Brick Partners, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-33530	20-5952523
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

2805 Dallas Parkway, Suite 400 Plano, Texas	75093
(Address of principal executive offices)	(Zip code)

Registrant’s telephone number, including area code: (469) 573-6755

(Former name or former address, if changed since last report) 

Not Applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On July 30, 2015, Green Brick Partners, Inc., a Delaware corporation (the “Company”), as borrower, entered into a loan agreement (the “Loan Agreement”) with Inwood National Bank, a national banking association (the “Lender”), JBGL Mustang, LLC, a Texas limited liability company, JBGL Exchange, LLC, a Texas limited liability company, JBGL Chateau, LLC, a Texas limited liability company, Johns Creek 206, LLC, a Georgia limited liability company (collectively, the “Grantors”) and JBGL Builder Finance, LLC, a Texas limited liability company (“JBGL Builder” and, together with the Grantors, the “Guarantors”), such Guarantors being subsidiaries of the Company. The Loan Agreement, which replaces the existing $25.0 million line of credit with the Lender (the “Prior Loan Agreement”), provides for a revolving credit facility in the principal amount of up to $50.0 million, subject to a borrowing base limitation equal to the sum of fifty percent (50%) of the total value of land and sixty percent (60%) of the total value of lots owned by the Grantors, each as determined by an independent appraiser, with the value of land being restricted from being more than fifty percent (50%) of the borrowing base. As of August 5, 2015, the Company had approximately $21.0 million outstanding under the Loan Agreement, which includes amounts that were used to repay all outstanding indebtedness under the Prior Loan Agreement.

As set forth in the note evidencing the amounts borrowed under the Loan Agreement (the “Note”), the outstanding borrowings bear interest at a floating rate per annum equal to the rate announced by Bank of America, N.A., from time to time, as its “Prime Rate” (the “Index”) with such adjustments to the interest rate being made on the effective date of any change in the Index. Notwithstanding the foregoing, the interest may not, at any time, be less than four percent (4%) per annum or more than the lesser amount of eighteen percent (18%) and the highest maximum rate allowed by applicable law. Beginning on August 30, 2015 and continuing on the thirtieth (30th) day of each consecutive month thereafter until July 30, 2017 (the “Maturity Date”), the Company must pay interest on the unpaid principal amount. The entire unpaid principal balance and any accrued but unpaid interest is due and payable on the Maturity Date.

The amounts outstanding under the Loan Agreement are secured by mortgages on real property and security interests in certain personal property (to the extent that such personal property is connected with the use and enjoyment of the real property) that is owned by the Grantors, including land owned in John’s Creek, Georgia, Allen, Texas, and Carrollton, Texas. The amounts outstanding under the Loan Agreement are also guaranteed by the Guarantors, pursuant to a guaranty agreement, dated as of July 30, 2015 (the “Guaranty Agreement”).

The Loan Agreement contains negative covenants, which include, among other things, restrictions on the Company’s ability to: transfer, pledge or encumber a controlling interest in any Grantor; transfer or dispose of property; grant liens in property; and liquidate, dissolve or enter into any consolidation, merger or other combination in which the Company or any Grantor’s separate identity would cease.

The Loan Agreement contains affirmative covenants, which, among other things, require the Company to: maintain its existence; pay taxes; maintain full and accurate accounts and records; provide the Lender with quarterly and annual financial statements and compliance certificates; provide notice of certain material litigation and defaults under material agreements; provide notice of any defaults under any other loan agreements with any other lender, maintain all property that is material to the business of the Company and the Grantors; pay certain costs, expenses and fees incurred by Lender; and indemnify the Lender against certain losses.

Additionally, beginning September 30, 2015 and each quarter-end thereafter, the Company must maintain: a Tangible Net Worth (as defined in the Loan Agreement) of not less than $250 million; a Maximum Consolidated Leverage Ratio (as defined in the Loan Agreement) of not greater than 1.25 to 1 and an Interest Coverage Ratio (as defined in the Loan Agreement) of not less than 2.0 to 1. Each of the financial measures is based upon the Company’s financial statements which, as described above, are required to be provided to the Lender pursuant to the Loan Agreement.

The Loan Agreement also includes customary events of default, including, among other things: non-payment; breach of any covenant; breach of any representation or warranty; the creation of any lien or encumbrance on any property for an amount in excess of twenty-five thousand dollars that is not paid or bonded within a certain thirty or forty-five days, respectively; the loss or sale of all or any portion of property except as otherwise permitted under the loan documents; and the commencement of insolvency proceedings.

The preceding summary of the Loan Agreement, the Note, the Guaranty Agreement and the related deeds of trust and security agreements is qualified in its entirety by reference to the full text of such documents, copies of which are attached hereto as Exhibit 10.1, 10.2, 10.3, 10.4, 10.5, 10.6 and 10.7, respectively, and incorporated herein by reference.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.

The information provided in Item 1.01 above is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

Exhibit No.	Exhibit
10.1	Loan Agreement, dated as of July 30, 2015, by and among Green Brick Partners, Inc., Inwood National Bank, JBGL Mustang, LLC, JBGL Exchange, LLC, JBGL Chateau, LLC, Johns Creek 206, LLC and JBGL Builder Finance, LLC.
10.2	Revolving Line of Credit Note, dated as of July 30, 2015, issued by Green Brick Partners, Inc. in favor of Inwood National Bank.
10.3	Guaranty Agreement, dated as of July 30, 2015, by and among JBGL Mustang, LLC, JBGL Chateau, LLC, JBGL Exchange, LLC, JBGL Builder Finance, LLC, and Johns Creek 206, LLC.
10.4	Deed of Trust and Security Agreement, dated as of July 30, 2015, by JBGL Mustang, LLC, as grantor, to Gary L. Tipton, as trustee, for the benefit of Inwood National Bank.
10.5	Deed of Trust and Security Agreement, dated as of July 30, 2015, by JBGL Exchange, LLC, as grantor, to Gary L. Tipton, as trustee, for the benefit of Inwood National Bank.
10.6	Deed of Trust and Security Agreement, dated as of July 30, 2015, by JBGL Chateau, LLC, as grantor, to Gary L. Tipton, as trustee, for the benefit of Inwood National Bank.
10.7	Deed to Secure Debt, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated as of July 30, 2015, by Johns Creek 206, LLC, as grantor, to Inwood National Bank, as grantee.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

GREEN BRICK PARTNERS, INC.
By:	/s/ Richard A. Costello
Name:	Richard A. Costello
Title:	Chief Financial Officer

Date: August 5, 2015

EXHIBIT INDEX

Exhibit No.	Exhibit
10.1	Loan Agreement, dated as of July 30, 2015, by and among Green Brick Partners, Inc., Inwood National Bank, JBGL Mustang, LLC, JBGL Exchange, LLC, JBGL Chateau, LLC, Johns Creek 206, LLC and JBGL Builder Finance, LLC.
10.2	Revolving Line of Credit Note, dated as of July 30, 2015, issued by Green Brick Partners, Inc. in favor of Inwood National Bank.
10.3	Guaranty Agreement, dated as of July 30, 2015, by and among JBGL Mustang, LLC, JBGL Chateau, LLC, JBGL Exchange, LLC, JBGL Builder Finance, LLC, and Johns Creek 206, LLC.
10.4	Deed of Trust and Security Agreement, dated as of July 30, 2015, by JBGL Mustang, LLC, as grantor, to Gary L. Tipton, as trustee, for the benefit of Inwood National Bank.
10.5	Deed of Trust and Security Agreement, dated as of July 30, 2015, by JBGL Exchange, LLC, as grantor, to Gary L. Tipton, as trustee, for the benefit of Inwood National Bank.
10.6	Deed of Trust and Security Agreement, dated as of July 30, 2015, by JBGL Chateau, LLC, as grantor, to Gary L. Tipton, as trustee, for the benefit of Inwood National Bank.
10.7	Deed to Secure Debt, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated as of July 30, 2015, by Johns Creek 206, LLC, as grantor, to Inwood National Bank, as grantee.

EX-10.1

Green Brick Partners, Inc. 8-K

Exhibit 10.1

LOAN AGREEMENT

between

GREEN BRICK PARTNERS, INC.,

 a Delaware corporation,

 (Borrower)

and

INWOOD NATIONAL BANK,

 a national banking association

 (Lender)

and

JBGL Mustang, LLC,

 a Texas limited liability company,

JBGL Exchange, LLC,

 a Texas limited liability company,

JBGL Chateau, LLC,

 a Texas limited liability company, and

Johns Creek 206, LLC,

 a Georgia limited liability company

(collectively, Grantors)

and

Grantors plus JBGL Builder Finance, LLC,

a Texas limited liability company

(collectively, Guarantors)

 $50,000,000.00 Credit Facility

 July 30, 2015

TABLE OF CONTENTS

RECITALS

ARTICLE I CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION
1.1	Definitions
1.2	Rules of Construction
ARTICLE II CREDIT FACILITY
2.1	Agreement to Lend
2.2	Advances
2.3	Note
2.4	Late Charge
2.5	Maturity Date
2.6	Security Agreements
2.7	Partial Releases; Release of Lots
ARTICLE III ADVANCES
3.1	Initial Conditions
3.2	Conditions to Individual Advances
3.3	Application for Advance is a Representation
3.4	No Waiver
3.5	Advance Not an Approval
3.6	No Liability of Lender to Third Parties
ARTICLE IV REPRESENTATIONS AND WARRANTIES
4.1	Authorization
4.2	No Adverse Conditions
4.3	Correctness of Statements
4.4	Financial Condition
4.5	Supporting Documents
4.6	Conflicts
4.7	Full Disclosure
4.8	Principal Office
4.9	Fiscal Year
ARTICLE V AFFIRMATIVE COVENANTS
5.1	Maintenance of Existence
5.2	Taxes, Assessments and Other Charges
5.3	Payment of Obligations
5.4	Laws
5.5	Records
5.6	Recording and Filing
5.7	Financial Information
5.8	Notice of Certain Events
5.9	Execution of Other Documents

5.10	Loans, Advances and Guarantees
5.11	Property
5.12	Payment of Costs and Expenses
5.13	Direct Disbursement and Application by Lender
5.14	Financial Covenants
5.15	Indemnity
5.16	Processing Fee
5.17	Commitment Fee
ARTICLE VI NEGATIVE COVENANTS
6.1	Transfer of Interests
6.2	Secondary Financing
6.3	Security
6.4	Liquidation and Reorganization
ARTICLE VII EVENTS OF DEFAULT AND CERTAIN REMEDIES
7.1	Default
7.2	Remedies
7.3	Power-of-Attorney
7.4	Remedies Cumulative
ARTICLE VIII MISCELLANEOUS
8.1	Amendment; Waiver
8.2	Severability
8.3	Liability of Lender
8.4	Governing Law
8.5	Notices
8.6	Survival of Agreement
8.7	Attorneys’ Fees
8.8	Jurisdiction
8.9	Commercial Transaction
8.10	Successors
8.11	Time
8.12	Participation of the Loans
8.13	Counterparts
8.14	No Third Party Beneficiary
8.15	Jury Waiver
8.16	Lawful Interest
8.17	Controlling Document
EXHIBIT A     Note

LOAN AGREEMENT

This Loan Agreement (“Agreement”) is made and entered into effective as of the 30th day of July, 2015 (“Effective Date”), by and among GREEN BRICK PARTNERS, INC., a Delaware corporation (“Borrower”), INWOOD NATIONAL BANK, a national banking association (“Lender”), and JBGL Mustang, LLC, a Texas limited liability company (“Mustang”), JBGL Exchange, LLC, a Texas limited liability company (“Exchange”), JBGL Chateau, LLC, a Texas limited liability company (“Chateau”), and Johns Creek 206, LLC, a Georgia limited liability company (“Johns Creek”, which, together with Mustang, Exchange and Chateau may be collectively referred to as “Grantors” or individually as a “Grantor”), and JBGL Builder Finance, LLC, a Texas limited liability company (“JBGL Builder” which, collectively with Grantors may be collectively referred to as “Guarantors”).

RECITALS

WHEREAS, Borrower has applied to Lender for a revolving credit facility in the principal amount of up to $50,000,000.00, but only upon certain terms and conditions as required by Lender, in its reasonable discretion, and more fully described herein; and

WHEREAS, Lender is willing to establish the Credit Facility for Borrower subject to and upon the terms and conditions hereinafter set forth; and

WHEREAS, Guarantors are subsidiaries of Borrower and will receive direct benefit from Lender establishing this Line of Credit for Borrower.

NOW, THEREFORE, for and in consideration of Lender’s extension of credit to Borrower in accordance with this Agreement, the mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, Borrower, Lender and each Grantor do hereby agree as follows:

ARTICLE I 

CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION

1.1     Definitions. In addition to any terms that may be defined elsewhere in this Agreement, the following terms have the following meanings when used in this Agreement:

“Advance” means a disbursement by Lender of any portion of the Credit Facility, whether by journal entry, deposit to Borrower’s account, check to Borrower or third party, or otherwise.

“Application for Advance” means a written application submitted by Borrower with respect to a request for an Advance, in such form as may be reasonably required by Lender and containing any documents and information as specified in this Agreement.

“Borrower Interest” means any Contractual Interest, Debt Interest, or Entity Interest.

“Borrowing Base” has the meaning set forth in Section 2.2.

“Business Day” means every day on which national banks located in the State of Texas are open for commercial banking business generally, except Saturdays, Sundays, and federal holidays.

Loan Agreement 1

“Contractual Interest” means any interest of any kind in any tenancy-in-common agreement, property agreement, ownership agreement, profit sharing agreement, net profits agreement, management agreement, contract, agreement, chose in action, or other similar interest of any kind, other than a Debt Interest or an Entity Interest, owned or held by Borrower with respect to which Lender is expressly granted a Security Interest pursuant to this Agreement.

“Credit Facility” means the revolving line of credit extended by Lender to Borrower in accordance with this Agreement in an aggregate principal amount not to exceed the Maximum Commitment and evidenced by, among other things, the Note.

“Debt Interest” means any interest in any promissory note, bond, debenture, commercial paper or other debt instrument of any kind, together with any and all Security Interests and rights under security instruments of any kind securing same, made or issued by an Entity to or for the benefit of, or otherwise held by, Borrower with respect to which Lender is expressly granted a Security Interest pursuant to this Agreement.

“Entity” means a partnership (general or limited), joint venture, limited liability company, corporation, or other entity of any kind in or with respect to which a Debt Interest or an Entity Interest is held by Borrower.

“Entity Interest” means any partnership interest, joint venture interest, capital stock, membership interest, ownership interest, equity interest, profits interest, right of participation, or other interest of any kind in any Entity, other than a Debt Interest, with respect to which Lender is expressly granted a Security Interest pursuant to this Agreement.

“Event of Default” is defined in Section 7.1 of this Agreement.

“Land” means a portion of any of the Property which is unimproved and which is not platted.

“Loan Documents” means this Agreement, the Note, each Security Agreement, and all other assignments, financing statements, documents, instruments and agreements now existing or hereafter authorized or entered into by Borrower, any Grantor, or any other person with or for the benefit of Lender in relation to the Credit Facility, all of which shall constitute collateral and security for the payment and performance of the Obligations.

“Lot” means a portion of any of the Property which is a separately platted lot intended for the development of a single-family residence thereon.

“Maturity Date” means July 30, 2017.

“Maximum Commitment” means FIFTY MILLION DOLLARS ($50,000,000.00).

“Note” means the Revolving Line of Credit of even date herewith from Borrower made payable to the order of Lender in the stated principal amount of $50,000,000.00 and containing such other terms and conditions as are described therein, which shall be substantially in the form of the promissory note attached hereto as Exhibit A, or in such other form that is reasonably acceptable to Lender and Borrower.

“Obligations” means all present and future indebtedness, obligations, and liabilities of Borrower to Lender, and all renewals and extensions thereof, or any part thereof, arising pursuant to or evidenced by this Agreement, the Note, each and every Security Agreement, or each and every other Loan Document, and all interest accruing thereon, and reasonable attorneys’ fees incurred in the drafting, negotiation, enforcement or collection thereof, regardless of whether such indebtedness, obligations, and liabilities are direct, indirect, fixed, contingent, joint, several, or joint and several, together with all indebtedness, obligations and liabilities of Borrower evidenced or arising pursuant to any of the other Loan Documents, and all renewals, modifications, increases and extensions thereof, or any part thereof.

Loan Agreement 2

“Obligor” or “Obligors” means Borrower and any other parties obligated hereunder or under any of the other Loan Documents.

“Security Agreement” means, collectively, (i) the following (collectively, the “Deeds of Trust”) (a) that certain Deed of Trust and Security Agreement, of even date herewith, executed by Mustang, as grantor, to Lender, as beneficiary, creating a lien and security interest upon the real property and personal property described therein, located in Denton County, Texas (collectively, the “Mustang Property”), (b) that certain Deed of Trust and Security Agreement, of even date herewith, executed by Exchange, as grantor, to Lender, as beneficiary, creating a lien and security interest upon the real property and personal property described therein, located in Collin County, Texas (collectively, the “Exchange Property”), (c) that certain Deed of Trust and Security Agreement, of even date herewith, executed by Chateau, as grantor, to Lender, as beneficiary, creating a lien and security interest upon the real property and personal property described therein, located in Collin County, Texas (collectively, the “Chateau Property”), (d) that certain Deed to Secure Debt, Assignment of Rents and Leases, Security Agreement, and Fixture Filing of even date herewith, executed by Johns Creek, as grantor, to Lender, as beneficiary, creating a lien and security interest upon the real property and personal property described therein, located in Fulton County, Georgia (collectively, the “Johns Creek Property”, which, together with the Mustang Property, the Exchange Property and the Chateau Property may be collectively referred to as the “Property”) and (ii) any form of pledge agreement, collateral assignment agreement, conditional assignment agreement, or other security agreement or security instrument of any kind, in which Borrower, Grantor or any other person or entity collaterally assigns to Lender, or grants to Lender a Security Interest in property or assets, which shall constitute collateral and security for the payment and performance of the Obligations.

“Security Interest” means any lien, security interest, pledge or encumbrance, or any other interest in property designed to secure the repayment of indebtedness or the performance of any obligation, whether arising by agreement or under any statute or law, or otherwise.

“Supporting Documents” means such documents and certificates as Lender or its counsel may reasonably request relating to the organization, existence and good standing of each Obligor, the authorization of any transaction contemplated by this Agreement, and any other legal matters relating to any of the Obligors, this Agreement or any transaction contemplated by this Agreement, all in form and substance reasonably satisfactory to Lender and its counsel.

1.2     Rules of Construction.  References to Loan Documents shall include all amendments, supplements, and replacements thereto. References to specific Exhibits and Schedules shall mean as attached, or intended to be attached, to this Agreement and regardless of whether they are in fact attached to this Agreement, including amendments, supplements, and replacements thereto, all of which are incorporated herein by reference. The Recitals to this Agreement are a part of this Agreement and are incorporated herein. The headings in this Agreement are for convenience only and shall not affect the construction hereof. Unless the specific context requires otherwise, words of any gender include any other gender, and words in the singular include the plural, and vice versa. The term “includes” and variations thereof contemplate “including but not limited to”. The term “or” includes “and/or”. Unless the context requires otherwise, the terms “hereof,” “herein”, “hereinafter” and words of similar import refer to this Agreement as a whole. References to “Articles” and “Sections” are to Articles and Sections of this Agreement.

Loan Agreement 3

ARTICLE II 

CREDIT FACILITY

2.1      Agreement to Lend.   Upon the terms and subject to the conditions and limitations set forth in this Agreement, Lender agrees to make, and shall make, Advances to Borrower prior to the Maturity Date in an aggregate principal amount at any one time outstanding up to but not exceeding the Maximum Commitment. Subject to the conditions in this Agreement, any portion of the principal of the Credit Facility that is repaid prior to the Maturity Date may be re-borrowed prior to the Maturity Date pursuant to the terms of this Agreement. Borrower and Lender agree, pursuant to Chapter 346 of the Texas Finance Code, that such Chapter 346 (which relates to open-end line of credit revolving loans) shall not apply to this Agreement, the Credit Facility, the Note or any Advance, and neither this Agreement, nor the Credit Facility nor the Note nor any Advance shall be governed by such Chapter 346 or subject to its provisions in any manner whatsoever. So long as no Event of Default has occurred and is continuing, and subject to the limitations contained in this Agreement, Lender will continue to make Advances prior to the Maturity Date in accordance with the terms of this Agreement.

2.2      Advances.   Unless otherwise consented to by Lender, in Lender’s reasonable discretion:

(a)      Purpose. Each Advance is being made for Borrower’s working capital needs including, but not limited to, investments in Borrower’s subsidiaries.

(b)      Timing. Each Application for Advance shall be submitted by Borrower to Lender not less than three [3] Business Days prior to the date upon which the Advance requested is desired by Borrower. Borrower shall be entitled only to an Advance in an amount as permitted by the terms of this Agreement.

(c)      Limitation on Advances. No Advance shall be made to the extent that it would cause the aggregate principal amount outstanding under the Note at any time to exceed the lesser of (i) the Borrowing Base (as hereinafter defined), or (ii) the Maximum Commitment.

(d)      To Whom Made. All Advances hereunder will be made by Lender to Borrower in Borrower’s bank account(s) with Lender or in any other manner permitted from time to time by Lender.

(e)      Borrowing Base. As used in this Agreement, the term “Borrowing Base” means an amount equal to the sum of (i) fifty percent (50%) of the total value of Land (“Land Borrowing Base”), as appraised by an independent appraiser acceptable to Lender, plus (ii) sixty percent (60%) of the total value of the Lots, as appraised by an independent appraiser acceptable to Lender, but in no event shall the Land Borrowing Base exceed fifty percent (50%) of the Borrowing Base. Borrower acknowledges and agrees that, for purposes hereof, Lender intends to require an appraisal of all or any part of the Land and Property after the expiration of twelve (12) months from the Effective Date, which appraisal(s) shall be performed by an independent appraiser reasonably acceptable to Lender, at Borrower’s expense.

2.3      Note. The Credit Facility shall be evidenced by, among other things, the Note. Notwithstanding the principal amount of the Note as stated on the face thereof, the actual principal amount due from Borrower to Lender on account of the Note, as of any date of computation, shall be the sum of all Advances then and theretofore made by Lender on account thereof, less all principal payments actually received by Lender in collected funds with respect thereto. At no time shall the outstanding principal balance of the Note exceed the Maximum Commitment. If, by any cause whatsoever, the outstanding principal balance of the Note should ever exceed the Maximum Commitment, Borrower shall immediately pay the amount of such excess to Lender without notice or demand. After the Commitment Termination Date, the obligations of Borrower and the rights and privileges of Lender under this Agreement, the Note and all other Loan Documents shall continue in full force and effect until the Note and the Obligations have been paid and performed in full. The interest rate, payment terms and other pertinent issues shall be as set forth in the Note.

Loan Agreement 4

2.4     Late Charge. Should Borrower fail to make any payment, or part thereof, called for pursuant to this Agreement, or the Note, within ten (10) days after its due date, Lender may, at its sole option, assess, and Borrower shall pay, to the extent permitted by applicable law, a late charge of three percent (3%) of the amount of the late payment, but only once for each such late payment. Borrower acknowledges that Lender will incur additional expenses in handling the delinquent payment, the exact amount of which is difficult to ascertain, but that said late charge is a reasonable estimate of Lender’s expenses so incurred. Late charges shall be in addition to interest, which shall continue to accrue at the rate specified in the Note. Notwithstanding anything contained in this Agreement or any of the Loan Documents to the contrary, it is expressly agreed and acknowledged that upon Borrower’s payment, and Lender’s acceptance of, any late charge authorized by this Section 2.4 along with the payment in full of any past due payment for which such late charge applies, that any Event of Default applicable to such late payment shall be deemed cured for all purposes of this Agreement and all of the Loan Documents.

2.5      Maturity Date. In addition to any earlier payments as may be required by this Agreement or the Note, all Obligations shall be due and payable in full on the Maturity Date.

2.6      Security Agreements. The Note and all other Obligations shall be secured by a Deed of Trust evidencing a collateral assignment of, and a first and prior Security Interest in, each Property with respect to which an Advance is or has been made, and by any other collateral as described in, or required by, the terms of this Agreement. Each Security Agreement, and all Security Interests granted therein, shall remain in effect, notwithstanding that there may not be any amount outstanding under the Note from time to time, until all Obligations have been fully and finally paid, performed and satisfied unless released in accordance with the following provisions of this Section. Borrower and each applicable Grantor will be entitled to obtain the release of Lender’s Security Interest in one or more portions of the Property in accordance with the provisions of Section 2.7 below.

2.7      Partial Releases; Release of Lots.

Borrower, and each applicable Grantor, shall be entitled to transfer Lots and obtain releases from the lien created by the Deed of Trust covering such Lot in connection with such transfers on the following terms and conditions:

(a)     The Lots to be conveyed and released must be approved in advance by Lender, which approval shall not be unreasonably withheld, conditioned or delayed, provided, however, Lender shall not under any circumstances, except upon the occurrence and continuation of an Event of Default, fail to approve the release of any Lot that Borrower, or the applicable Grantor, is obligated to sell to a builder pursuant to an agreement that has previously been provided by Borrower to Lender. Borrower and Lender acknowledge and agree that no payment shall be required to be paid to Lender for the conveyance by Borrower, or the applicable Grantor, to a property owners’ association contemplated by a master development plan or plat approved by Lender or for any dedication of any portion of the Property as may be required by governmental authorities with jurisdiction over the Property.

(b)     Borrower and Lender agree that, upon the sale and release of Land or Lots which are collateral for the loan hereunder and more fully described in any of the Deeds of Trust, Lender will not require application of the proceeds of such sale to the outstanding balance owed hereunder; rather, such net sale proceeds will be used to reduce the value of the collateral pool available for inclusion in calculating and complying with financial covenants and obligations contained in this Agreement including, but not limited to, complying with the Borrowing Base. Notwithstanding the foregoing, if a sale of Land or Lots would cause a violation of the Borrowing Base, then Borrower or the applicable Grantor may only sell and release such Land and Lots by tendering payment to Lender of an amount sufficient to cause the Borrowing Base to be in compliance.

Loan Agreement 5

(c)      Each request for release must be delivered to Lender at least three (3) business days prior to closing accompanied by a description of the tract to be released in a form acceptable to Lender, plus, if applicable, the closing statement for such sale.

(d)      Upon receipt by Lender of Borrower’s or the applicable Grantor’s request for a partial release, and simultaneously with the closing of the sale of the property to be released under this Section 2.7, Lender, at Borrower’s expense, will execute appropriate partial releases and other documents in connection therewith which may be required by a title company, interim, or permanent lender, pursuant to development or construction of improvements on the property partially released, provided, however, that Lender shall never be required to execute any such other documents which would have the effect of giving any party rights in any part of the Property other than the portion of the Property being released or other than the specific right of Borrower to partial releases as contained herein.

(e)       Notwithstanding anything to the contrary contained in this Section 2.7, neither Borrower nor the applicable Grantor shall be entitled to any partial releases hereunder if an Event of Default is continuing at the time of any request for a partial release.

ARTICLE III

 ADVANCES

3.1      Initial Conditions. Lender’s execution of this Agreement shall be conditioned upon, among other terms and conditions, the prior or simultaneous satisfaction of each of the following:

(a)      Lender shall have received from each party hereto or any other Obligor a counterpart of this Agreement signed on behalf of such party.

(b)      Lender shall have received the Note executed by Borrower.

(c)      Lender shall have received such Supporting Documents and other Loan Documents as Lender or its counsel may have reasonably requested.

(d)     Lender shall have received all amounts due and payable on or prior to the Effective Date that have been invoiced to Borrower, including reimbursement or payment of all reasonable out-of-pocket expenses required to be reimbursed or paid by Borrower hereunder.

3.2      Conditions to Individual Advances. The consideration by Lender to make any Advance hereunder shall be subject to, among other terms and conditions, the prior or simultaneous satisfaction of each of the following conditions:

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(a)      All conditions described in Section 3.1 shall have been satisfied in all material respects.

(b)      The Advance shall be in compliance with the provisions of this Section 3.2 in all material respects.

(c)      All Loan Documents previously executed and delivered to Lender shall be and remain valid, binding, and in full force and effect in accordance with their terms, except for any expressly released by Lender.

(d)      Borrower and each other party to such Loan Documents shall have executed and delivered to Lender the Loan Documents and any other documents reasonably requested by Lender in connection with such Advance.

(e)      Borrower shall have executed and delivered to Lender an Application for Advance.

(f)      The representations and warranties made by any Obligor in this Agreement or any other Loan Document to which such Obligor is a signatory shall be true and correct in all material respects on and as of the date of such Advance.

(g)      At the time of and immediately after giving effect to such Advance, no Event of Default shall have occurred and be continuing.

(h)      No event has occurred since the Effective Date which has had, and continues to have, a material adverse effect that has caused Borrower to violate any of the Financial Covenants provided for in Section 5.14 below.

(i)       All Loan Documents required by Lender to be recorded or filed shall have been recorded or filed. Lender shall have received evidence satisfactory to it that it has a first priority, perfected Security Interest in all Property that is securing the Advance.

(i)       Lender shall have received all fees and other amounts due and payable on or prior to the date of such Advance that have been invoiced to Borrower, including reimbursement or payment of all reasonable out-of-pocket expenses required to be reimbursed or paid by Borrower hereunder.

3.3      Application for Advance is a Representation. Each submission by Borrower to Lender of an Application for Advance shall be deemed to constitute a representation and warranty by Borrower on the date thereof that each of the conditions in Sections 3.1 and 3.2 has been satisfied.

3.4       No Waiver. No Advance shall constitute a waiver of any condition precedent to the obligation of Lender to make such Advance or any further Advance or, after the expiration of all applicable notice and cure periods, preclude Lender from thereafter declaring the failure of Borrower to satisfy such condition precedent to be an Event of Default.

3.5      Advance Not an Approval. The making of any Advance or part thereof shall not be deemed an approval or acceptance by Lender of any act or omission related to the Application for Advance. Lender shall have no obligation to make any Advance or part thereof after the happening of any Event of Default, but shall have the right and option so to do. If Lender elects to make any such Advance, it shall not be deemed to be a waiver of the Event of Default or any right or remedy available to Lender, including the right to demand payment of the Note, or any part thereof, or the right to withhold any future Advance.

3.6      No Liability of Lender to Third Parties. Lender shall in no event be responsible or liable to any third party for any Advance, for the manner in which any Advance may be applied by Borrower, or for any refusal or failure to make an Advance hereunder, and third party shall have any right or claim against Lender with respect thereto. Borrower agrees to indemnify, defend and hold harmless Lender harmless from any and all such claims, demands, damages, and causes of action, including related actual, out-of-pocket costs and expenses and reasonable attorneys’ fees.

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ARTICLE IV 

REPRESENTATIONS AND WARRANTIES

Borrower, and each Guarantor, as applicable, makes the following representations and warranties to Lender on the date hereof and at the time any Advance is made, and with respect to each such advance. Lender shall be entitled to rely upon the truth, accuracy, and completeness of each of the following representations and warranties:

4.1     Authorization. Borrower and each of the Guarantors has been duly organized and is validly existing and in good standing under the laws of the state of its organization and in each other jurisdiction where the conduct of its business requires it to be registered to transact business. Borrower and each of the Guarantors has all power and authority to engage in the transactions contemplated by this Agreement, and, if applicable, all action, corporate or otherwise, has been taken which is necessary to authorize the execution, delivery and performance of this Agreement and each of the other Loan Documents to which it is a party. Borrower and each of the Guarantors has obtained and shall maintain all consents, approvals, permits and licenses from any third party, and all court, administrative agency or other governmental authority required in connection with its respective business and this Agreement. To the best of Borrower’s knowledge this Agreement and the other Loan Documents and actions contemplated thereby constitute valid and legally binding obligations of Borrower and each Guarantor enforceable in accordance with their respective terms.

4.2      No Adverse Conditions. To Borrower’s knowledge, there are no disputes, offsets, or adverse claims in connection with or arising out of any of the security assigned or to be assigned to Lender that have not been disclosed in writing to Lender. There is no action, suit or proceeding pending or, to the knowledge of Borrower, threatened before or by any court, administrative agency, or other governmental authority which might materially and adversely affect the business, assets or financial condition of any Obligor or which could have a material adverse effect upon the rights or duties of any Obligor hereunder or under any of the Loan Documents. Each Obligor has filed all tax returns or permitted extensions required to be filed by it and is not in material default in the payment of any taxes levied or assessed against it or any of its assets. To Borrower’s knowledge, no Obligor is in default in any material way with respect to an obligation under any applicable law, judgment, order, decree, rule or regulation of any court, administrative agency or other governmental authority to which it may be subject. To Borrower’s knowledge, neither the execution and delivery of, nor the performance of and compliance with, this Agreement or any other Loan Document or action required by any Obligor pursuant thereto will result in the breach or default under any agreement, obligation, order or undertaking by which any Obligor or any of its properties is bound or affected.

4.3      Correctness of Statements. To Borrower’s knowledge, no financial statement or any other statement made or furnished to Lender by or on behalf of any Obligor in connection with this Agreement contains or will contain any materially untrue statement of fact or omit any fact necessary to make the statements included therein not misleading. All financial statements provided to Lender have been prepared in accordance with generally accepted accounting principles or in accordance with such other standards acceptable to Lender in its reasonable discretion, applied on a basis consistent with prior periods, and fairly and accurately present the financial condition and the results of operations of the respective Obligor as of their respective dates and for the periods covered thereby. There are no facts actually known to any Obligor which have not been disclosed in writing to Lender, which materially and adversely affect the business, properties, assets, operations, condition (financial or otherwise), affairs or prospects of any Obligor.

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4.4      Financial Condition. The financial statements for Borrower and each Guarantor that such party has most recently provided to Lender, were Borrower’s and such party’s most recent financial statements as of the date or dates that such financial statements were provided to Lender. To Borrower’s knowledge, and to each Guarantor’s knowledge, there has been no material adverse change in the financial position of Borrower from the date or dates of the financial statements provided to Lender. To Borrower’s knowledge, and to each Guarantor’s knowledge, there has been no material adverse change in the financial condition of Borrower after the date of said financial statements.

4.5      Supporting Documents. To Borrower’s knowledge, each Supporting Document prepared by or on behalf of any Obligor and delivered to Lender is true, accurate, correct, and complete in all material respects, and, to Borrower’s knowledge, each Supporting Document obtained from a governmental authority and delivered to Lender by or on behalf of an Obligor is true, accurate, correct, and complete in all material respects.

4.6      Conflicts. To Borrower’s knowledge, neither the execution and delivery of the Loan Documents, nor consummation of any of the transactions herein or therein contemplated, nor compliance with the terms and provisions hereof, or with the terms and provisions thereof, will contravene any provision of law, statute, rule, or regulation to which any Obligor is subject, or any judgment, decree, license, order, or permit applicable to any Obligor, or will conflict or will be inconsistent with, or will result in any breach of any of the terms of the covenants, conditions or provisions of, or constitute a delay under, or result in the creation or imposition of a Lien (except liens in favor or Lender) upon any of the property or assets of any Obligor pursuant to the terms of any indenture, mortgage, deed of trust, security agreement or other instrument to which any Obligor is a party or by which any Obligor may be bound, or to which any Obligor may be subject.

4.7      Full Disclosure. To Borrower’s knowledge, there is no fact or condition that Borrower or any Grantor has not disclosed to Lender in writing that could materially adversely affect the properties, business, prospects or condition (financial or otherwise) of Borrower or any Grantor.

4.8      Principal Office. The principal office and principal place of business of each of Borrower and each Grantor is located at 2805 North Dallas Parkway, Suite 400, Plano, Texas 75093.

4.9      Fiscal Year. The fiscal year-end of each of Borrower and each Guarantors is December 31.

As used in this Article IV “to Borrower’s knowledge”, “to the knowledge of Borrower”, “to the best of Borrower’s knowledge” or words of similar meaning shall mean to the direct, actual, conscious knowledge of Richard A. Costello and James R. Brickman, with no duty of investigation. Lender acknowledges and agrees that the named individuals in the immediately preceding sentence shall have no liability of any kind to Lender under this Agreement, under any of the other Loan Documents or otherwise in connection with or related to the Credit Facility.

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ARTICLE V 

AFFIRMATIVE COVENANTS

Borrower and each Guarantor, jointly and severally, covenant and agree that from the date hereof and until payment in full of all amounts owed by any Obligor to Lender hereunder, unless Lender otherwise consents in writing:

5.1      Maintenance of Existence. Borrower and each Guarantor shall each maintain and preserve its respective assets and all rights, franchises and other authority necessary for the conduct of its respective businesses as presently conducted or as contemplated to be conducted as of the date hereof. Borrower and each Guarantor shall each maintain and preserve its respective properties, equipment and facilities in good order, condition and repair. Lender may, upon reasonable notice and at reasonable times, inspect the business properties and records of Borrower or any Guarantor covered by the Credit Facility.

5.2      Taxes, Assessments and Other Charges. Borrower and each Grantor shall each duly and promptly pay and discharge, before delinquency, all taxes, assessments and governmental and other charges, levies or claims levied or imposed, or which if unpaid might become a lien or charge upon any of the Property, except as such are being diligently contested in good faith and by appropriate proceedings and in respect of which an adequately funded reserve or other appropriate provision has been established to pay and discharge same; provided that if a notice of lien has been filed or recorded in respect thereof, then at Lender’s option, Lender may require Borrower to obtain a bond against such lien. Borrower shall, if requested by Lender, deliver evidence of payment to Lender in a form acceptable to Lender.

5.3      Intentionally Deleted.

5.4      Laws. Borrower shall comply with all governmental statutes and regulations affecting the ownership of its property and the conduct of its business.

5.5      Records. Borrower and each Guarantor shall each keep full and accurate accounts and records of its respective operations according to generally accepted accounting principles or according to such other standards acceptable to Lender in its reasonable discretion, and, upon Lender’s reasonable notice, to permit Lender or its agents to examine and audit such accounts and records at any time during regular business hours.

5.6      Recording and Filing. Borrower and each Guarantor shall each reasonably cooperate with Lender in executing, filing and recording any documents and in taking any other actions that Lender may reasonably request in contemplation of the transaction hereunder.

5.7      Financial Information. Borrower and each Guarantor, as applicable, shall furnish or cause to be furnished to Lender:

a.        Financial Statements.

(1)      Quarterly Financial Statements. Within ninety (90) days after the close of each calendar quarter, statements of financial condition, including balance sheets as of the close of such calendar quarter, income and expense statements, statements of changes in financial condition and retained earnings statements for such calendar quarter, for Borrower and each Guarantor, prepared in accordance with accounting principles reasonably acceptable to Lender and applied on a basis consistent with that of the previous quarters during the term hereof (except as otherwise noted in such statements) shall be delivered to Lender.

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(2)      Annual Financial Statements. Within ninety (90) days after the close of each calendar year, statements of financial condition shall be delivered to Lender, including balance sheets as of the close of such calendar year, income and expense statements, statements of changes in financial condition and retained earnings statements for such calendar year, for Borrower and each Guarantor, prepared in accordance with accounting principles reasonably acceptable to Lender and applied on a basis consistent with that of the previous years during the term hereof (except as otherwise noted in such statements) and only Borrower’s financial statements (and not those of any Guarantor) will audited by an independent certified public accountant.

(3)      Compliance Certificate. Within ninety (90) days after the close of each calendar quarter, Borrower shall deliver to Lender: (i) a Certificate of Compliance certified by Borrower’s Chief Financial Officer that Borrower is then in compliance with all financial covenants hereunder, and delivery of all financial information required to be delivered to Lender, in this Agreement, and (ii) written confirmation and certification from Borrower’s Chief Financial Officer that Borrower is in compliance with the Borrowing Base.

b.      IRS Tax Returns. Within ten (10) days after the earlier of the date of filing or the date any duly filed extension of filing expires, but in any event, not later than October 15 of teach year, true, correct, and complete copies of IRS annual tax returns for Borrower shall be delivered to Lender.

c.      Other Information. Such other financial statements and information as Lender may reasonably request of Borrower or Grantor from time to time.

5.8      Notice of Certain Events. Borrower shall give prompt written notice to Lender of any litigation and, if not in the ordinary course of Borrower’s or any Grantor’s business, of all proceedings before any governmental or regulatory agencies affecting it or any Property or other Borrower Interest involving claims and demands in excess of $200,000.00 per each occurrence, as well as events of default under any material agreement entered into with any third party regarding the Property, Borrower Interest, material changes in ownership, and any other matter which has resulted in or might reasonably be expected to result in a violation of any of the Financial Covenants provided for in Section 5.14 below. Additionally, Borrower shall timely comply with and promptly furnish to Lender true and complete copies of any official notice or claim by any governmental authority that Borrower has received pertaining to or affecting Borrower, any Property or any Borrower Interest.

5.9      Execution of Other Documents. Borrower and Guarantors shall each promptly execute and deliver all supplements and amendments hereto and all financing statements, continuation statements and such additional agreements, instruments and assurances in connection with this Agreement as Lender may reasonably request from time to time in order to effectuate the provisions hereof

5.10     Loans, Advances and Guarantees. Borrower shall notify Lender of the existence of a declared event of default or a notice of acceleration in connection with any loans, advances or guarantees, with any other lender, to the extent that such declared event of default or notice of acceleration might reasonably be expected to cause Borrower to violate any of the Financial Covenants provided for in Section 5.14 below.

5.11    Property. Borrower and each Grantor shall maintain, preserve and protect all property that is material to the business of the Borrower and each Grantor, as applicable, including, but not limited to, the Property, and keep such property in good repair, working order and condition.

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5.12    Payment of Costs and Expenses. Borrower will pay all actual, out-of-pocket costs and expenses (including reasonable attorneys’ fees) incurred by Lender for preparation of the Loan Documents, perfecting the Security Interests of Lender in the Properties, and all other reasonable expenses related to the Credit Facility, whether such expenses are incurred before or after the Effective Date, and including all such actual, out-of-pocket costs and expenses as may be incurred by Lender in collecting amounts due under any Loan Documents or in any bankruptcy, insolvency or similar proceeding. Without limiting the foregoing, Borrower agrees to pay on demand all recordation taxes, filing or recording fees, transfer taxes, certificate of title fees, and all other governmental assessments, taxes, charges, and fees that may be due upon the filing or recording of any financing statement, security agreement, document, or like instrument for purposes of documenting or perfecting Lender’s Security Interests in the Property to secure the Credit Facility.

5.13    Direct Disbursement and Application by Lender. After the occurrence of any Event of Default, Lender shall have the right, but not the obligation, to disburse and directly apply the proceeds of any Advance to the satisfaction of any of Borrower’s obligations hereunder or under the Note. Any Advance by Lender for such purpose shall be part of the Obligations and shall be secured by the Loan Documents. Lender will notify Borrower in writing of any disbursements made directly by Lender. Borrower hereby authorizes Lender after the occurrence of an Event of Default to hold, use, disburse, and apply the proceeds of any Advance for the payment or performance of any of the Obligations. Borrower hereby assigns and pledges the proceeds of the Credit Facility to Lender for such purposes. Lender may advance and incur such reasonable expenses as Lender reasonably deems necessary for the proper maintenance of the Credit Facility or any security for the Credit Facility, and all such expenses, even though in excess of the amount of the Maximum Commitment, shall be secured by the Loan Documents, and shall be payable to Lender upon demand.

5.14    Financial Covenants. Until (i) the Note and all other Obligations and liabilities of Borrower under this Agreement and the other Loan Documents are fully paid and satisfied, and (ii) the Lender has no further commitment to lend hereunder, Borrower will maintain, beginning on September 30, 2015, and thereafter each quarter-end, at all times:

(a)      Tangible Net Worth of not less than $250,000,000.00. As used herein, the term “Tangible Net Worth” means, as of any date, Borrower’s total assets, including deferred tax assets, but excluding all intangible assets, less total liabilities;

(b)      a Maximum Consolidated Leverage Ratio of not greater than 1.25 to 1. As used herein, the term “Maximum Consolidated Leverage Ratio” means, as of any date, Borrower’s total consolidated liabilities to Borrower’s total Tangible Net Worth; and

(c)      an Interest Coverage Ratio of not less than 2.0 to 1. As used herein, the term “Interest Coverage Ratio” means net income before interest, taxes, depreciation, amortization, and any non-cash asset impairment write-downs, divided by interest expense.

Tangible Net Worth, Maximum Consolidated Leverage Ratio and Interest Coverage Ratio shall be based upon Borrower’s financial statements prepared in accordance with the standards set forth in Section 5.7.

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5.15     Indemnity. Borrower shall indemnify Lender, its affiliates, subsidiaries and parent companies, and its and their respective directors, officers, agents and employees (“Indemnified Persons”) against, and hold them harmless against, any and all liabilities, actual, out-of-pocket losses and expenses (including but not limited to their reasonable attorney’s fees) and including penalties, damages and settlement amounts, if any, arising from or resulting from any claims, suits, orders, or actions, brought by any person including but not limited to any federal, state, or local governmental authorities and agencies, for any act or failure to act by any person arising from, resulting from or related to (i) the management or operation of Borrower or any Grantor, (ii) the existence, management or operation of any Entity or the assets of any Entity, (iii) any act or omission relating to Borrower or any Grantor, (iv) any actual or alleged violation of or noncompliance with any applicable laws, including but not limited to securities law, by Borrower or any Grantor, or (v) any claim of negligence or strict liability relating to Borrower or any Grantor; provided, however THIS INDEMNITY SHALL NOT INCLUDE INDEMNIFICATION AGAINST ANY ACTS OR OMISSIONS WHICH MAY CONSTITUTE NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART OF ANY OF THE INDEMNIFIED PERSONS. The Indemnified Persons shall not be liable to any person for any violation of or noncompliance with any applicable laws by Borrower, any Grantor or any third party.

5.16    Processing Fee. Concurrently with the execution hereof, and in addition to reasonable legal fees, and actual, out-of-pocket costs, and expenses incurred by Lender in the preparation, negotiation, and execution of all Loan Documents, Borrower shall pay to Lender a processing fee in the amount of $1,000.00.

5.17.  Commitment Fee. Concurrently with the execution hereof, Borrower is paying to Lender an origination fee in the amount of $250,000.00 with respect to the loan evidenced by the Note.

ARTICLE VI 

NEGATIVE COVENANTS

Borrower and each Grantor jointly and severally covenant and agree that from the date hereof and until payment in full of all amounts owed by Borrower to Lender hereunder, unless Lender shall otherwise consent in writing:

6.1      Transfer of Interests. There shall not be a transfer, pledge or encumbrance of any Controlling Interest in Borrower or any Grantor, whether in a single transaction or in multiple transactions, without Lender’s prior written consent, which consent may not be unreasonably withheld, conditioned or delayed. As used in this Section, “Controlling Interest” means a majority of the either the equity or voting interests of all partners, or a change in the general partner.

6.2      Secondary Financing. Unless approved in advance by the Lender in writing, no secondary financing, junior encumbrances, sale, lease, or other transfer or disposition of the Property shall be permitted.

6.3      Security. Borrower shall not create, assume or suffer any pledge, lien, Security Interest, encumbrance, or charge on any Property except in accordance with a Security Agreement.

6.4      Liquidation and Reorganization. Neither Borrower nor any Grantor shall liquidate, dissolve or enter into any consolidation, merger or other combination in which Borrower’s or any Grantor’s separate identity shall cease.

ARTICLE VII 

EVENTS OF DEFAULT AND CERTAIN REMEDIES

7.1      Default. The occurrence of any of the following shall be deemed an Event of Default:

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(a)      Borrower’s failure to pay any interest or principal under the Note when due and the continuance of such default for a period of ten (10) days following written notice of such default from Lender to Borrower. However, Lender shall not be required to give Borrower notice of such default more than twice during any twelve (12) month period, and thereafter Borrower’s failure to pay any interest or principal under the Note when due shall constitute an Event of Default without any notice from Lender.

(b)      Borrower’s failure to pay any amount, other than principal or interest under the Note, when due in accordance with the terms of this Agreement or any other Loan Documents and the continuance of such failure for ten (10) days after Borrower’s receipt of Lender’s written demand for such payment; provided, however, that nothing herein shall require Lender to provide Borrower with notice and opportunity to cure any such payment obligation more than two (2) times in any twelve (12) month period.

(c)      If any representation or warranty made by any Obligor in any Loan Document is not true, accurate and complete in any material respect when made or is otherwise breached in any material respect and which is not cured within thirty (30) days after Borrower’s receipt of Lender’s written notice to Borrower of such default, provided, however, that if Borrower has commenced, and is continuing to utilize commercially reasonable efforts to, effect a cure, then Borrower shall be entitled to a period of up to ninety (90) days in the aggregate from the date of Borrower’s receipt of such written notice to effect a cure.

(d)      The aggregate principal amount outstanding under the Note at any time exceeds the Borrowing Base, unless, within ten (10) days after Borrower’s receipt of written notice from Lender, Borrower either (i) pays sufficient principal on the Note to cause the Borrowing Base to equal or exceed the aggregate principal amount outstanding under the Note, or (ii) pledges sufficient additional collateral acceptable to Lender, in Lender’s reasonable discretion, to cause the Borrowing Base to equal or exceed the aggregate principal amount outstanding under the Note.

(e)      Any other “event of default” under the Note has occurred, which event of default is not cured within thirty (30) days after Borrower’s receipt of Lender’s written notice to Borrower of such event of default, provided, however, that if Borrower has commenced, and is continuing to utilize commercially reasonable efforts to, effect a cure of such event of default, then Borrower shall be entitled to a period of up to ninety (90) days in the aggregate from the date of Borrower’s receipt of such written notice to effect a cure of such event of default.

(f)       The failure by Borrower or any other Obligor to fulfill a covenant of this Agreement, other than a Financial Covenant described in Section 5.14 above, which failure is not covered by any other clause of this Section, and which is not cured within thirty (30) days after Borrower’s receipt of Lender’s written notice to Borrower of such default, provided, however, that if Borrower has commenced, and is continuing to utilize commercially reasonable efforts to, effect a cure, then Borrower shall be entitled to a period of up to ninety (90) days in the aggregate from the date of Borrower’s receipt of such written notice to effect a cure of such failure.

(g)      The failure by Borrower or any other Obligor to timely fulfill a Financial Covenant described in Section 5.14 above, which failure is not cured within ten (10) days after Borrower’s receipt of Lender’s written notice to Borrower of such default

(h)      Borrower intentionally prevents Lender or its authorized representatives to enter upon the Property and inspect Borrower’s records and property, if any, at the Property at all reasonable times after Lender has provided advance written notice of any such entry to Borrower.

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(i)       Any Property, or any portion thereof, is subject to a lien, security agreement, or any other charge or encumbrance for an amount in excess of $25,000.00 in each instance, other than Lender’s Security Interest, and the same is not paid within thirty (30) days, or bonded around within forty-five (45) days, after Borrower’s receipt of written notice from Lender.

(j)       The loss or sale of all or any portion of any Property except as otherwise permitted hereunder or in the Loan Documents that shall cause Borrower to be in violation of the Borrowing Base.

(k)       Borrower’s failure to pay to Lender any principal reduction amount required by the terms of this Agreement to keep Borrower in compliance with the Borrowing Base within ten (10) days after Borrower’s receipt of written notice from Lender.

(l)       Bankruptcy. Borrower:

(1)     is the subject of a finding in any proceeding relating to bankruptcy, insolvency, reorganization or relief of debtors that it does not pay its debts as they become due or admits in writing its inability to pay its debts or makes a general assignment for the benefit of creditors; or

(2)     commences any case, proceeding or other action seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors; or

(3)      in any involuntary case, proceeding or other action commenced against it which seeks to have an order for relief entered against it, as debtor, or seeks reorganization, arrangement, adjustment, liquidation, dissolution or composition of it or its debts under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, (i) fails to obtain a dismissal of such case, proceeding or other action within sixty (60) days of its commencement, or (ii) converts the case from one chapter of the Federal Bankruptcy Code to another chapter, or (iii) is the subject of an order for relief, or (iv) consents thereto; or

(4)     conceals, removes or permits to be concealed or removed, any part of its property, with intent to hinder, delay or defraud its creditors or any of them, or makes or suffers a transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law; or makes any transfer of its property to or for the benefit of a creditor at a time when other creditors similarly situated have not been paid; or suffers or permits, while insolvent, any creditor to obtain a lien upon any of its property through legal proceedings which is not vacated within sixty (60) days from the date thereof; or

(5)     has a trustee, receiver, custodian or other similar official appointed for or take possession of all or any part of its property or has any court take jurisdiction of any of its property which continues for a period of thirty (30) days.

7.2      Remedies. Upon the occurrence of an Event of Default (and after the expiration of all applicable notice and cure periods):

(a)      Lender shall have no further obligation to make any additional Advances to Borrower, and Lender may declare the Note to be immediately due and payable as to principal, interest, and all other charges, premiums, and sums due under the Loan Documents without presentment, protest, or other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the Note to the contrary notwithstanding.

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(b)      Lender may apply any part of the balance of the proceeds of the Credit Facility to the payment of all actual, out-of-pocket costs and expenses that may be incurred by Lender under any Loan Document and to the payment of interest on the Note.

(c)      Lender may exercise all rights and remedies afforded to Lender (i) in any of the Loan Documents, Security Agreements or in any other contract, agreement, security agreement, deed of trust, mortgage, assignment, guaranty, document or instrument now or hereafter made, issued or executed in connection with this Loan, or (ii) by law, provided that Lender shall have provided at least three (3) days prior written notice to Borrower of Lender’s intention to exercise its remedies.

(d)      Lender may expend any sum reasonably necessary to remedy any Event of Default.

7.3      Power-of-Attorney. Borrower hereby irrevocably constitutes and appoints Lender as Borrower’s attorney-in-fact (which appointment shall be deemed coupled with an interest AND IS IRREVOCABLE) for and in its name or the name of Borrower to perform, at Lender’s option, all the obligations of Borrower under the terms of this Agreement; provided, however, that Lender shall not exercise such rights and powers except during the continuation of an Event of Default and, absent the continuation of an Event of Default, such rights and powers of Lender shall be of no force or effect.

7.4      Remedies Cumulative. The rights and remedies of Lender upon the occurrence of an Event of Default set forth herein are in addition to the rights and remedies contained elsewhere in the Loan Documents, and available at law and in equity. No failure by Lender to exercise, and no delay in exercising, any right, power, or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege hereunder preclude any other further exercise thereof or the exercise of any other right, power, or privilege. Each waiver shall be strictly construed and shall apply only to the next succeeding disbursement.

ARTICLE VIII 

MISCELLANEOUS

8.1      Amendment; Waiver. No amendment or waiver of any provision of this Agreement or the Note, nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in writing and signed by Lender. Any such waiver, consent, or approval shall be effective only in the specific instance and for the purpose for which given. No waiver by Lender of any breach or Event of Default by Borrower under this Agreement shall be deemed a waiver of any other previous breach or Event of Default that is then continuing or any thereafter occurring. In no event shall the delay of enforcement of any rights or remedies available to Lender, or any other indulgence, be construed as a waiver of rights or remedies unless the same shall be agreed to in writing by Lender.

8.2      Severability. Any provision of this Agreement prohibited by the laws of an applicable jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, or modified to conform with such laws, without invalidating the remaining provisions of this Agreement, and any such prohibition in any jurisdiction shall not invalidate such provisions in any other jurisdiction.

8.3      Liability of Lender. Lender shall not be liable hereunder for any act or omission by it, in the absence of fraud, willful misconduct or gross negligence. Lender shall incur no liability to Borrower by acting upon any certificate or other paper believed by it to be genuine and purporting to be assigned by the proper party or with respect to anything which Lender may do or refrain from doing unless it amounts to fraud, willful misconduct or gross negligence.

Loan Agreement 16

8.4      Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas.

8.5      Notices. Any notice required or permitted by or in connection with this Agreement shall be in writing and shall be made by confirmed facsimile or by hand delivery, by overnight delivery service, or by certified mail, return receipt requested, addressed to Lender, Borrower or any Grantor at the respective address set forth below or to such other address as may be hereafter specified by written notice by Lender, Borrower or any Grantor. Notice shall be considered given as of the date of the confirmed facsimile or the hand delivery, or upon delivery by overnight delivery service, or three (3) calendar days after the date of mailing.

If to Borrower:	Green Brick Partners, Inc.
	2805 North Dallas Parkway, Suite 400
	Plano, Texas 75093
	Attn: Richard A. Costello
With a copy to:	Mier Law PLLC
	325 N. Saint Paul Street, Suite 4400
	Dallas, Texas 75201
	Attn:  Brian C. Mier
If to Mustang:	JBGL Mustang, LLC
	2805 North Dallas Parkway, Suite 400
	Plano, Texas 75093
	Attn: Richard A. Costello
If to Exchange:	JBGL Exchange, LLC
	2805 North Dallas Parkway, Suite 400
	Plano, Texas 75093
	Attn: Richard A. Costello
If to Chateau:	JBGL Chateau, LLC
	2805 North Dallas Parkway, Suite 400
	Plano, Texas 75093
	Attn: Richard A. Costello
If to Johns Creek:	Johns Creek 206, LLC
	2805 North Dallas Parkway, Suite 400
	Plano, Texas 75093
	Attn: Richard A. Costello
If to Mustang, Exchange, Chateau,
or Johns Creek,
With a copy to:	Mier Law PLLC
	325 N. Saint Paul Street, Suite 4400
	Dallas, Texas 75201
	Attn:  Brian C. Mier

Loan Agreement 17

If to Lender:	Inwood National Bank
	7621 Inwood Road
	Dallas, Texas  75209
	Attn: Keil Strickland, Senior Vice President
With a copy to:	Scott D. Osborn
	Adair, Morris & Osborn, P.C.
	325 N. St. Paul Street, Suite 4100
	Dallas, Texas  75201

8.6     Survival of Agreement. All covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the execution and delivery to Lender of the Note and the making by Lender of any Advance and shall continue in full force and effect so long as the Note, any other Obligation or other amount due hereunder is outstanding and unpaid.

8.7     Attorneys’ Fees. In the event of litigation arising under this Agreement or any of the other Loan Documents, the prevailing party shall be entitled to recover its reasonable attorneys’ fees and its reasonable and out-of-pocket costs and expenses from the other parties in the litigation.

8.8      Jurisdiction. EACH OF LENDER, BORROWER AND EACH GRANTOR, TO THE EXTENT THAT IT MAY LAWFULLY DO SO, HEREBY SUBMITS TO THE JURISDICTION OF THE STATE DISTRICT AND COUNTY COURTS IN DALLAS COUNTY, TEXAS AND THE UNITED STATES DISTRICT COURTS FOR TEXAS IN DALLAS COUNTY AS WELL AS TO THE JURISDICTION OF ALL COURTS FROM WHICH AN APPEAL MAY BE TAKEN FROM THE AFORESAID COURTS, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF ANY OF LENDER’S OR BORROWER’S OR ANY GRANTOR’S OBLIGATIONS UNDER OR WITH RESPECT TO THIS AGREEMENT, AND EACH EXPRESSLY WAIVES ANY AND ALL OBJECTIONS IT MAY HAVE AS TO VENUE IN ANY OF SUCH COURTS.

8.9     Commercial Transaction. BORROWER AND EACH GRANTOR EACH ACKNOWLEDGE THAT THE LOAN IS A COMMERCIAL TRANSACTION AND THAT NO PART OF THE LOAN PROCEEDS WILL BE USED FOR CONSUMER PURPOSES.

8.10    Successors. This Agreement shall be binding upon and inure to the benefit of Borrower, each Grantor and their respective successors, and those assigns of any of them consented to in writing by Lender, and upon Lender, its successors and assigns. Any assignment attempted by Borrower or any Grantor without the written consent of Lender shall be void. No consent by Lender of an assignment by Borrower or any Grantor shall release the assigning party as a party primarily obligated and liable under the terms of this Agreement unless the assigning party shall be released specifically by Lender in writing.

8.11    Time. TIME IS OF THE ESSENCE OF THIS AGREEMENT AND EACH AND EVERY TERM, COVENANT, AND CONDITION.

8.12    Participation of the Loans. Borrower and each Grantor each agree that Lender may, at its option, sell interests in the Credit Facility, any Advance made hereunder, or any of its rights under this Agreement, the Note or any other Loan Documents to a financial institution or institutions and, in connection with each such sale, Lender may disclose any financial and other information available to Lender concerning Borrower or any Grantor to each prospective purchaser, provided, however, in no event shall any purchaser or prospective purchaser disclose any financial information of Borrower or any Grantor to any third parties, other than to its employees, accountants, attorneys or other professionals, governmental agencies or agents, or bank examiners, without the prior written consent of Borrower and, as applicable, each Grantor.

Loan Agreement 18

8.13    Counterparts. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original, but all of which shall constitute one and the same instrument.

8.14    No Third Party Beneficiary. This Agreement is for the sole benefit of Lender, Borrower and each Grantor and is not for the benefit of any third party.

8.15    JURY WAIVER. BORROWER, EACH GRANTOR AND LENDER HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND LENDER ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY RELATIONSHIP BETWEEN LENDER, BORROWER OR EACH GRANTOR. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING DESCRIBED HEREIN OR IN THE OTHER LOAN DOCUMENTS.

8.16    Lawful Interest. It is the intention of Borrower and Lender to conform strictly to applicable usury laws. All agreements between Borrower and Lender are hereby expressly limited so that in no contingency or event whatsoever shall the amount paid or agreed to be paid to Lender for the use, forbearance or detention of the money to be advanced hereunder or otherwise, or for the payment or performance of any covenant or obligation contained herein or in any other document evidencing, securing or pertaining to the indebtedness evidenced hereby, exceed the maximum amount permissible under applicable law. If, from any circumstances whatsoever, fulfillment of any provision hereof or such other documents at the time performance of such provisions shall be due shall involve transcending the limit of validity prescribed by law, then, ipso facto, the obligation to be fulfilled shall be deemed a mistake and the obligation shall be reduced to the limit of such validity; and, if from any circumstances Lender should ever receive an amount deemed to be interest by applicable law which would exceed the maximum rate permitted under applicable law, such amount that would be excessive interest shall be applied to the reduction of the principal amount of the Obligations or to the reduction of any other principal indebtedness of Borrower to Lender, or if such excessive interest exceeds the unpaid balance of the Obligations and such other indebtedness, the excess shall be refunded to Borrower. All sums paid or agreed to be paid by Borrower for the use, forbearance or detention of the indebtedness of Borrower to Lender shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full stated term of such indebtedness until payment in full so that the actual effective rate of interest contracted for, collected or charged on account of such indebtedness is uniform throughout the full stated term thereof. The terms and provisions of this Section shall control and supersede all other provisions of all agreements between Borrower, any Grantor and Lender that are applicable to the contracting for, collecting and charging of interest.

8.17   Controlling Document. To the extent anything contained herein is inconsistent with or contrary to the terms of any of the Loan Documents, the terms of this Agreement shall control.

NOTICE TO COMPLY WITH STATE LAW

For the purpose of this Notice, the term “WRITTEN AGREEMENT” shall include the document set forth above, together with each and every other document relating to and/or securing the same loan transaction, regardless of the date of execution.

Loan Agreement 19

THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[THE REMAINDER OF THIS PAGE IS BLANK; 

SIGNATURE PAGE FOLLOWS]

Loan Agreement 20

IN WITNESS WHEREOF, and intending to be legally bound hereby, Borrower, each Grantor, and Lender execute this Agreement as of the date first above written.

BORROWER:

Green Brick Partners, Inc.,
a Delaware corporation

By:	/s/ James R. Brickman
	James R. Brickman
	Chief Executive Officer

GUARANTORS:

JBGL Mustang, LLC,
a Texas limited liability company

By:	/s/ James R. Brickman
	James R. Brickman, Manager

JBGL Exchange, LLC,
a Texas limited liability company

By:	/s/ James R. Brickman
	James R. Brickman, Manager

JBGL Chateau, LLC,
a Texas limited liability company

By:	/s/ James R. Brickman
	James R. Brickman, Manager

Johns Creek 206, LLC,
a Georgia limited liability company

By:	/s/ James R. Brickman
	James R. Brickman, Manager

Loan Agreement 21

JBGL Builder Finance, LLC,

a Texas limited liability company

By:	/s/ James R. Brickman
	James R. Brickman, Manager

LENDER:

INWOOD NATIONAL BANK,
a national banking association

By:	/s/ Keil Strickland	Address:
Printed Name:	Keil Strickland	7621 Inwood Road
Its:	Senior Vice President	Dallas, Texas 75209

Loan Agreement 22

EXHIBIT A

Note

See attached.

Loan Agreement 23

EX-10.2

Green Brick Partners, Inc. 8-K

Exhibit 10.2

Effective Date
July 30, 2015 $50,000,000.00

REVOLVING LINE OF CREDIT

For value received, GREEN BRICK PARTNERS, INC., a Delaware corporation (“Maker”), whose mailing address is 2805 North Dallas Parkway, Suite 400, Plano, Texas 75093, promises to pay to the order of Inwood National Bank, a national banking association (“Bank”), at 7621 Inwood Road, Dallas, Texas, 75209, or such other address as may be designated by Bank to Maker in writing, in lawful money of the United States of America, the stated principal amount of up to FIFTY MILLION AND 00/100 DOLLARS ($50,000,000.00), or so much thereof as shall be advanced by Bank from time to time hereunder to or for the benefit or account of Maker, together with interest on the unpaid balance thereof from the date of advancement until July 30, 2017 (“Maturity Date”), at a floating rate per annum equal to the rate announced by Bank of America, N.A., its successors and assigns, from time to time, as its “Prime Rate” (herein known as the “Index”). Adjustments due to changes in the Index are to be made on the effective date of any change in the Index. In no event shall the interest charged or paid hereunder exceed the highest maximum rate allowed by applicable law (“Highest Lawful Rate”). The Index is not necessarily the lowest rate charged by Bank on its loans and Maker understands that Bank may make loans based on other rates as well. If the Index becomes unavailable during the term of this note, Bank may designate a substitute index after notice to Maker. Bank will provide Maker with the current Index rate upon Maker’s request. Notwithstanding the foregoing, at no time shall the interest charged be less than four percent (4%) per annum, nor more than the lesser of eighteen percent (18%) per annum or the Highest Lawful Rate.

Maker may borrow, pay, and re-borrow, in one or more advances, on or before the Maturity Date, and in accordance with and subject to the terms and conditions contained herein and in the Loan Agreement (as hereafter defined), the principal amount of this note up to a maximum aggregate principal sum of $50,000,000.00. Advances shall be made hereunder on the condition that no Default or Event of Default (defined in the Loan Agreement) shall then exist and be continuing, and that all of Maker’s representations, warranties, and covenants contained herein, in the Loan Agreement, and the other Security Documents, shall be true, complete and correct in all material respects on the date of such request for an advance and on the date the advance is made. From time to time, Maker may submit to Bank an application for advance in form and content acceptable to Bank, requesting an advance hereunder for any reason stated in the Loan Agreement. Each application for advance shall be submitted by Maker to Bank a reasonable time (but not less than three [3] business days) prior to the date upon which the advance is desired by Maker.

Beginning on August 30, 2015, and continuing on the thirtieth (30th) day of each consecutive month thereafter until the Maturity Date, when the entire unpaid principal balance and accrued but unpaid interest shall be due and payable in full, interest on the unpaid principal amount shall be due and payable.

Promissory Note Page 1

Bank shall accept payments during regular operation hours of 9:00 a.m. to 3:00 p.m., Monday through Friday, except bank holidays. All other payments received will be credited as of the next business day or as otherwise permitted by law. Additionally, Maker agrees to pay a processing fee of $25.00 if any check delivered by Maker to Bank as payment on the loan described herein is dishonored.

Maker agrees that all payments of any obligation due hereunder shall be final, and if any such payment is recovered in any bankruptcy, insolvency or similar proceedings instituted by or against Maker, all obligations due hereunder shall be automatically reinstated in respect of the obligation as to which payment is so recovered.

Should Maker fail to make any payment, or part thereof, called for pursuant to this Note, the Loan Agreement, or any other documents or instruments relating to this loan, within ten (10) days after its due date, Bank may, at its sole option, assess, and Maker shall pay, to the extent permitted by applicable law, a late charge equal to three percent (3%) of the amount of the late payment, but only once for each such late payment. Maker acknowledges that Bank will incur additional expenses in handling the delinquent payment, the exact amount of which is difficult to ascertain, but that said late charge is a reasonable estimate of Bank’s expenses so incurred. Late charges shall be in addition to interest, but only if, and to the extent, permissible under applicable law.

All past due principal and interest, and any amount owed hereunder and under the Loan Agreement and any other documents or instruments relating to this loan, shall bear interest at the lesser of eighteen percent (18%) per annum or the Highest Lawful Rate from the date such principal or interest amount is due until paid. Unless otherwise specified below, interest shall be computed on a per annum basis of a year of 360 days and for the actual number of days (including the first but excluding the last day) elapsed unless such calculation would result in a usurious rate, in which case interest shall be calculated on a per annum basis of a year of 365 or 366 days, as the case may be.

Upon the failure of Maker to timely satisfy its payment of installment obligations set forth in this note, Bank shall give Maker written notice thereof and the opportunity to cure such event of default within ten (10) days from the date of the written notice from Bank. If Maker fails to cure such event of default within ten (10) days from the date of the written notice from Bank, then a default shall be deemed to have occurred and Bank shall have the right to exercise its remedies as provided herein and in the Loan Agreement. Nothing herein shall require Bank to provide Maker with notice and opportunity to cure payment of installment obligations set forth herein more than two (2) times in any twelve (12) month period.

A default, or event of default, shall be deemed to have occurred hereunder if an Event of Default occurs hereunder or under the Loan Agreement.

Promissory Note Page 2

Upon the occurrence of a default, or event of default, hereunder, and if such has not been cured within the designated period of time, if any, then the holder hereof may, at its option, do any one or more of the following: (a) declare the entire unpaid balance of principal of and accrued, unpaid interest upon this note to be immediately due and payable, (b) reduce any claim to judgment, (c) foreclose all liens and security interests securing payment thereof or any part thereof, and/or (d) without notice of default or demand, pursue and enforce any of Bank’s other rights and remedies provided in the Loan Agreement under or pursuant to any applicable laws or agreement. All rights and remedies of Bank shall be cumulative and concurrent and may be pursued singularly, successively, or together, at the sole discretion of Bank, and may be exercised as often as the occasion therefor shall arise. Failure by Bank to exercise any right or remedy upon the occurrence of an event of default shall not constitute a waiver of the right to exercise such right or remedy upon the occurrence of any subsequent event of default.

Except as otherwise provided herein or in the Loan Agreement, Maker hereby waives all notices of non-payment, demands for payment, presentments for payment, notices of intention to accelerate maturity, notices of actual acceleration of maturity, grace, protests, notices of protest, and any other demands or notices of any kind as to this note. Maker agrees that Bank’s acceptance of partial or delinquent payments, or failure of Bank to exercise any right or remedy contained herein or in any instrument given as security for the payment of this note shall not be a waiver of any obligation of Maker to Bank or constitute waiver of any similar default subsequently occurring. The holder of this note is entitled to the benefits and security provided in the Loan Documents.

If this note is not paid at maturity whether by acceleration or otherwise and is placed in the hands of an attorney for collection, or suit is filed hereon, or proceedings are had in probate, bankruptcy, receivership, reorganization, arrangement, or other legal proceedings for collection hereof, Maker and each other liable party agree to pay Bank its reasonable, out-of-pocket collection costs, including a reasonable amount for attorneys’ fees, but in no event to exceed the maximum amount permitted by law. Maker and each other liable party are and shall be directly and primarily, jointly and severally, liable for the payment of all such collection costs called for hereunder, and Maker and each other liable party hereby expressly waive bringing of suit and diligence in taking any action to collect any sums owing hereon and in the handling of any security, and Maker and each other liable party hereby consent to and agree to remain liable hereon regardless of any renewals, extensions for any period, or rearrangements hereof, or any release or substitution of security hereof, in whole or in part, with or without notice, from time to time, before or after maturity.

Promissory Note Page 3

It is the intention of Maker and Bank to conform strictly to applicable usury laws. Accordingly, if the transactions contemplated hereby would be usurious under applicable law, then, in that event, notwithstanding anything to the contrary herein or in any agreement entered into in connection with or as security for this note, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under applicable law that is taken, reserved, contracted for, charged or received under this note or under any of the other aforesaid agreements or otherwise in connection with this note shall under no circumstances exceed the maximum amount of non-usurious interest allowed by applicable law, and any excess shall be credited on this note by the holder hereof (or, to the extent that this note shall have been or would thereby be paid in full, refunded to Maker); and (ii) in the event that maturity of this note is accelerated by reason of an election by the holder hereof resulting from any default hereunder or otherwise, then such consideration that constitutes interest may never include more than the maximum amount of non-usurious interest allowed by applicable law, and excess interest, if any, provided for in this note or otherwise shall be canceled automatically as of the date of such acceleration or prepayment and, if theretofore paid, shall be credited on this note (or, to the extent that this note shall have been or would thereby be paid in full, refunded to Maker).

Maker reserves the option of prepaying the principal of this note, in whole or in part, at any time after the date hereof without penalty. At the option of Bank, it may demand (at any time at or after prepayment) all accrued and unpaid interest with respect to the principal amount prepaid through the date of prepayment. All amounts of principal so prepaid and received by the owner and holder of this note shall be applied to the last maturing installments of this note in the inverse order of their maturity.

To the extent Chapter 303 of the Texas Finance Code, its successor statutes and amendments, and any other applicable Texas law, as then in effect (collectively, the “Statute”), are applicable, the “weekly ceiling” specified in the Statute, as selected by Bank, is the applicable ceiling. Bank may, in accordance with and to the extent permitted by applicable law, at its option and from time to time revise its election of the applicable “rate ceiling” as to current and future balances outstanding, and may use the “quarterly ceiling” or the “monthly ceiling” from time to time in effect, as such terms are defined in the Statute, or any other legally available “ceilings” as the Highest Lawful Rate. If the maximum amount as determined under any applicable federal law shall at any time exceed the maximum rate of interest as determined under applicable Texas law, then to the extent permitted by law, the applicable federal rate shall be deemed controlling for purposes of determining the maximum amount during such period of time. In no event shall the provisions of Chapter 346 of the Texas Finance Code (which regulate certain revolving credit loan accounts and revolving triparty accounts) apply to the indebtedness evidenced hereby.

Whenever used, the singular number shall include the plural, and the plural number shall include the singular. All obligations of Maker that are contained herein shall be joint and several.

Notices or communications to be given under this note shall be given to the respective parties in writing as set forth in the Loan Agreement.

TIME IS OF THE ESSENCE of this note.

Promissory Note Page 4

This note may not be changed or terminated orally, but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification, termination or discharge is sought.

This note and all the covenants, promises, and agreements contained herein shall be binding upon Maker’s successors, assigns, heirs and personal representatives and inure to the benefit of Bank’s successors and assigns.

This note is secured, in part, by: (a) that certain Deed of Trust and Security Agreement to Gary L. Tipton, Trustee, for the benefit of Bank, against certain property in Denton County, Texas, dated of even date herewith, executed and delivered by JBGL Mustang, LLC, a Texas limited liability company and Maker to Bank (b) that certain Deed of Trust and Security Agreement to Gary L. Tipton, Trustee, for the benefit of Bank, against certain property in Collin County, Texas, dated of even date herewith, executed and delivered by JBGL Exchange, LLC, a Texas limited liability company and Maker to Bank (c) that certain Deed of Trust and Security Agreement to Gary L. Tipton, Trustee, for the benefit of Bank, against certain property in Collin County, Texas, dated of even date herewith, executed and delivered by JBGL Chateau, LLC, a Texas limited liability company and Maker to Bank and (d) that certain Deed to Secure Debt, Assignment of Rents and Leases, Security Agreement, and Fixture Filing, to Gary L. Tipton, Trustee, for the benefit of Bank, against certain property in Fulton County, Georgia, dated of even date herewith, executed and delivered by Johns Creek 206, LLC, a Georgia limited liability company, and Maker to Bank, to which reference is hereby made for a description of the mortgaged premises, the nature and extent of the security, and the rights of Bank in respect thereof.

The terms and conditions contained herein are subject to that certain Loan Agreement (“Loan Agreement”) of even date herewith, made by and among Maker, Bank, and other parties thereto, as more fully described and defined therein. All capitalized terms used but not defined in this note shall have the same meaning as used and defined in the Loan Agreement.

Maker acknowledges that Bank is not obligated to fund any principal amount in excess of $50,000,000.00 outstanding at any one time. ON THE MATURITY DATE, A SUBSTANTIAL BALLOON PAYMENT WILL BE DUE. BANK HAS NOT MADE ANY REPRESENTATIONS OR PROMISES TO MAKER, EXPRESSED OR IMPLIED, THAT BANK WILL EXTEND OR POSTPONE THE DUE DATE OF THIS NOTE OR PROVIDE MAKER WITH ANY OTHER LOAN OR ALTERNATIVE FINANCING WITH RESPECT TO ANY AMOUNTS DUE HEREUNDER.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. 

SIGNATURE PAGE(S) ATTACHED HERETO.

Promissory Note Page 5

Executed effective as of the date first written above.

Maker:
Green Brick Partners, Inc.,
a Delaware corporation
By:	/s/ James R. Brickman
	James R. Brickman
	Chief Executive Officer

Lender:
INWOOD NATIONAL BANK
By:	/s/ Keil Strickland
Printed Name:	Keil Strickland
Title:	Senior Vice President

Promissory Note Page 6

EX-10.3

Green Brick Partners, Inc. 8-K

Exhibit 10.3

GUARANTY AGREEMENT

(JBGL Mustang, LLC, JBGL Chateau, LLC, JBGL Exchange, LLC,

JBGL Builder Finance, LLC, Johns Creek 206, LLC)

For and in consideration of the sum of Ten and no/100 Dollars ($10.00) and other good and valuable consideration in hand paid to the undersigned (“Guarantor”), the receipt and sufficiency of which consideration is hereby acknowledged, and for the purpose of enabling GREEN BRICK PARTNERS, INC., a Delaware corporation (“Debtor”), to borrow certain funds from INWOOD NATIONAL BANK, a national banking association (“Holder”), and recognizing that Guarantor has benefited or shall benefit, directly or indirectly, from the making of such loan by Holder to Debtor, and that but for this Guaranty such loan would not be made by Holder to Debtor and the funds advanced thereunder, Guarantor hereby irrevocably, absolutely, and unconditionally guarantees to Holder the prompt payment at maturity and the prompt performance when due of the following (collectively, the “Obligations”): (i) all indebtedness and obligations of any kind of Debtor to Holder, now outstanding or owing or which may hereafter be executed or incurred directly between Debtor and Holder, absolute or contingent, joint and/or several, secured or unsecured, arising by operation of law or otherwise, direct or indirect, and arising out of that certain Revolving Line of Credit Note of even date herewith, made by Debtor, payable to the order of Holder, in the original stated principal amount of FIFTY MILLION AND 00/100 DOLLARS ($50,000,000.00) (“Note”), including all principal, interest, charges and attorneys’ fees which may be or become due or owing on or under or in connection with the Note, and all renewals, rearrangements, extensions, modifications, increases in principal amount, and consolidations thereof, and of any part thereof and any sums due or to become due pursuant to any instrument which secures the payment of the Note; (ii) all of the covenants, agreements, and other obligations undertaken by Debtor in all instruments securing the payment of the Obligations; and (iii) all actual, out-of-pocket costs and expenses and reasonable attorneys’ fees incurred or expended by Holder in collecting any of the Obligations or due to any default in the performance of the Obligations or in enforcing any right granted hereunder. Guarantor’s obligations hereunder shall further be subject to the terms and conditions hereinafter set forth.

1.     Primary Liability.     Guarantor shall be liable as a primary obligor for the payment and performance of the Obligations. This is an absolute, continuing, and unconditional guaranty of payment and not of collection and if at any time or from time to time there are no outstanding Obligations, the obligations of Guarantor with respect to any and all Obligations incurred thereafter shall not be affected. This Guaranty and the Guarantor’s obligations hereunder are irrevocable and, in the event of Guarantor’s death, shall be binding upon Guarantor’s estate. All of the Obligations shall be conclusively presumed to have been made or acquired in acceptance hereof.

Guaranty Agreement Page 1

2.     Payment.     In each event whenever any of the Obligations shall become due and remain unpaid (howsoever the maturity thereof may have occurred), Guarantor will, on demand, pay the amount due thereon to Holder. All amounts becoming payable by Guarantor to Holder under this Guaranty shall be payable at Holder’s offices at 7621 Inwood Road, Dallas, Texas, 75209, or such other place as Holder may from time to time designate. The payment by Guarantor of any amount pursuant to this Guaranty shall not in anywise entitle Guarantor to any right, title or interest (whether by way of subrogation or otherwise) in and to any of the Obligations or any proceeds thereof, or any security or collateral therefor. Nothing contained in this paragraph 2 is intended or shall be construed to give the Guarantor any right of subrogation in or under the documents evidencing the Obligations, or any right to participate in any way therein, notwithstanding any payments made by the Guarantor under the terms and conditions of the documents evidencing the Obligations, all such rights of subrogation and participation being expressly waived and released by the Guarantor’s execution and delivery of this instrument. Whenever Guarantor pays any sum which is or may become due under this Guaranty, written notice must be delivered to Bank contemporaneously with such payment. In the absence of such notice to Holder by Guarantor in compliance with the provisions hereof, any sum received by Holder on account of the Obligations shall be conclusively deemed paid by Debtor.

3.     Waiver of Notice.     Guarantor specifically waives any notice of acceptance of this Guaranty by Holder and of the creation, advancement, existence, extension, renewal, modification, consolidation, or rearrangement from time to time of the Obligations, or increase from time to time in the principal amount thereof, or increase or reduction from time to time of the rate of interest thereon, or any indulgence from time to time with respect to the Obligations, or any part thereof. Guarantor additionally waives grace, demand, protest, presentment and notice of demand, protest, presentment and dishonor with respect to the Obligations, notice of intent to accelerate, notice of acceleration and notice of disposition of collateral, and waives notice of the amount of the Obligations outstanding at any time, and agrees that the maturity of the Obligations, or any part thereof, may be accelerated, extended, modified, amended or renewed from time to time, or any other indulgence may be granted with respect thereto by Holder at its will or as may be agreed by Debtor without notice to or further consent by Guarantor, at any time or times.

4.     Rights of Holder.

a.     Guarantor agrees that no release of Debtor, any co-guarantor, or of any other person primarily or secondarily liable on the Obligations, or any part thereof shall in any manner impair, diminish or affect the liability of Guarantor or the rights of Holder hereunder.

b.     Guarantor specifically agrees that it shall not be necessary or required, and that Guarantor shall not be entitled to require, that Holder mitigate damages, or file suit or proceed to obtain or assert a claim for personal judgment against Debtor for the Obligations, or make any effort at collection of the Obligations from Debtor, or foreclose against or seek to realize upon any security or collateral now or hereafter existing for the Obligations, or file suit or proceed to obtain or assert a claim for personal judgment against any other party (whether maker, guarantor, endorser or surety) liable for the Obligations, or make any effort at collection of the Obligations from any such other party, or exercise or assert any other right or remedy to which Holder is or may be entitled in connection with the Obligations or any security or collateral or other guaranty therefor, or assert or file any claim against the assets or estate of Debtor or any other guarantor or other person liable for the Obligations, or any part thereof, before or as a condition of enforcing the liability of Guarantor under this Guaranty or requiring payment of the Obligations by Guarantor hereunder, or at any time thereafter.

Guaranty Agreement Page 2

c.     If any or all of the Obligations are now or hereafter secured in whole or in part, Guarantor agrees that Holder may, from time to time, at its discretion, and with or without valuable consideration, allow substitution, withdrawal, release, surrender, exchange, subordination, deterioration, waste, loss or other impairment of all or any part of such security or collateral, without notice to or consent by Guarantor, and without in anywise impairing, diminishing or releasing the liability of Guarantor hereunder.

d.     No delay or omission or lack of diligence or care in exercising any right or power with respect to the Obligations or any security or collateral therefor (including without limitation the failure of Holder to perfect a security interest therein) or guarantee thereof or under this Guaranty shall in any manner impair, diminish or affect the liability of Guarantor or the rights of Holder hereunder. Guarantor expressly waives any right to the benefit of or to require or control application of any security or collateral or the proceeds of any security or collateral now existing or hereafter obtained by Holder as security for the Obligations, or any part thereof, and agrees that Holder shall have no duty insofar as Guarantor is concerned to apply upon any of the Obligations any monies, payments or other property at any time received by or paid to or in the possession of Holder, except as Holder shall determine in its sole discretion.

e.     Guarantor’s liability hereunder shall in no manner be affected, reduced, impaired or released by reason of any renewal, extension, modification, consolidation, or rearrangement of or any other indulgence, forbearance or compromise with respect to the Obligations, or any part thereof; or increase in the principal amount thereof; or increase or reduction of the rate of interest thereon.

f.     Guarantor waives all defenses given to sureties or guarantors at law or in equity other than actual payment of the indebtedness, and performance of the actions, constituting the Obligations including, but not limited to, any rights Guarantor has under, or any requirements imposed by, applicable Texas law in effect on the date of this Guaranty or as it may be amended from time to time. Guarantor absolutely and unconditionally covenants and agrees that if all or any part of the Obligations (or any instrument or agreement made or executed in connection therewith) is for any reason found to be invalid, illegal, unenforceable, uncollectible or legally impossible, for any reason whatsoever (including, without limiting the generality of the foregoing, upon the grounds that the payment and/or performance of the Obligations is ultra vires or otherwise without authority, may violate applicable usury laws, is subject to valid defenses, claims or offsets of Debtor, or any instrument evidencing any of the Obligations is forged or otherwise irregular); then in any such case Guarantor shall pay and perform the Obligations as herein provided and that no such occurrence shall in any way diminish or otherwise affect Guarantor’s obligations hereunder.

Guaranty Agreement Page 3

g.     Guarantor agrees, to the full extent he may legally do so, that suit may be brought against Guarantor with or without making Debtor a party to such suit (as Holder may elect).

5.     Liability in the Event of Preference.      In the event any payment of Debtor to Holder is held to constitute a preference under the bankruptcy laws, such payment by Debtor to Holder shall not constitute a release of Guarantor from any liability hereunder, but Guarantor agrees to pay such amount to Holder upon demand and this Guaranty shall continue to be effective or shall be reinstated, as the case may be, to the extent of any such payment or payments.

6.     Assignment.     This Guaranty is intended for and shall inure to the benefit of Holder and each and every other person who shall from time to time be or become the owner or holder of any of the Obligations, and each and every reference herein to “Holder” shall also include and refer to each and every successor or assignee of Holder at any time holding or owning any part of or interest in any part of the Obligations. This Guaranty shall be transferable by Holder, it being understood and stipulated that upon the assignment or transfer by Holder of any of the Obligations (or any part thereof or interest therein thus transferred or assigned by Holder), such transferee shall also, unless provided otherwise by Holder in its assignment, have and may exercise all the rights granted to Holder under this Guaranty to the extent of the part of or interest in the Obligations thus assigned or transferred to said person. Guarantor expressly waives notice of transfer or assignment of the Obligations, or any part thereof, or of the rights of Holder hereunder.

7.     Notice.      Any notice or demand to Guarantor hereunder or in connection herewith may be given and shall conclusively be deemed and considered to have been given and received upon the deposit thereof, in writing, in the U.S. mails, duly stamped and addressed to Guarantor at the address of Guarantor shown below; but actual notice, however given or received, shall always be effective. The last preceding sentence shall not be construed in anywise to affect or impair any waiver of notice or demand herein provided or to require giving of notice or demand to or upon Guarantor in any situation for any reason. Guarantor waives (i) promptness, diligence and notice of acceptance of this Guaranty and notice of the incurring of any obligation, indebtedness or liability to which this Guaranty applies or may apply, and waives present for payment, notice of non-payment, protest, demand, notice of protest, notice of intent to accelerate, notice of acceleration, notice of dishonor, diligence in enforcement and indulgences of every kind, and (ii) the taking of any other action by Bank, including without limitation giving any notice of default or any other notice to, or making any demand on, Debtor, any other guarantor of all or any part of the Obligations or any other party.

Guaranty Agreement Page 4

8.     Covenants.     Guarantor hereby covenants and agrees with Holder as follows:

(a)     Guarantor shall not, so long as its obligations under this Guaranty continue, transfer or pledge any material portion of its assets for less than full and adequate consideration; and

(b)     Guarantor shall promptly furnish to Holder at any time and from time to time such financial statements and other financial information of Guarantor as Holder may require, in form and substance satisfactory to Holder; and

(c)     Guarantor shall comply with all terms and provisions of the Loan Documents that apply to Guarantor; and

(d)     Guarantor shall promptly inform Bank of (i) any litigation or governmental investigation known to Guarantor against Guarantor or affecting any security for all or any part of the Obligations or this Guaranty which, if determined adversely, might have a material adverse effect upon the financial condition of Guarantor or upon such security or might cause a default under any of the Loan Documents, (ii) any claim or controversy known to Guarantor which might become the subject of such litigation or governmental investigation, and (iii) any material adverse change in the financial condition of Guarantor.

9.     Rights of Holder Cumulative.     The rights of Holder hereunder are cumulative and shall not be exhausted by its exercise of any of its rights hereunder, under any prior guaranty or otherwise against Guarantor or by any number of successive actions until and unless all indebtedness constituting the Obligations has been paid, and all other Obligations have been performed. The existence of this Guaranty shall not in any way diminish or discharge the rights of Holder under any prior guaranty agreement executed by Guarantor.

10.     Governing Law/Venue.     THIS GUARANTY SHALL BE DEEMED TO HAVE BEEN MADE UNDER AND SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS IN ALL RESPECTS. THIS GUARANTY SHALL BE PERFORMABLE IN DALLAS COUNTY, TEXAS AND VENUE FOR ANY DISPUTES ARISING UNDER OR PERTAINING TO THIS GUARANTY SHALL BE IN DALLAS COUNTY, TEXAS.

11.     Entire Agreement.     Guarantor acknowledges and agrees that this Guaranty accurately represents and contains the entire agreement between Guarantor and Holder with respect to the subject matter hereof, that Guarantor is not relying, in the execution of this Guaranty, on any representations (whether written or oral) made by or on behalf of Holder except as expressly set forth in this Guaranty, and that any and all prior statements and/or representations made by or on behalf of Holder to Guarantor (whether written or oral) in connection with the subject matter hereof are merged herein. This Guaranty shall not be waived, altered, modified or amended as to any of its terms or provisions except in writing duly signed by Holder and Guarantor.

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12.     Successors and Assigns.      This Guaranty shall bind the heirs, personal representatives, and assigns of Guarantor and shall inure to the benefit of all transferees, credit participants, assignees, and/or endorsees of Holder, notwithstanding that some or all of the monies owed by Guarantor pursuant to this Guaranty may be actually advanced after any bankruptcy, receivership, reorganization or death of Guarantor.

13.     Interpretation.     Headings are provided as a matter of convenience only and are not to be considered in interpreting the meaning of any provision hereunder. The use of any gender herein shall include the other gender.

14.     Severability.     A determination that any provision of this Guaranty is unenforceable or invalid shall not affect the enforceability or validity of any other provision.

15.     Advice of Counsel.     Guarantor acknowledges that, to the extent Guarantor deems necessary, Guarantor has had the benefit of the advice of legal counsel of its own choice in connection with the preparation and negotiation of this Guaranty, and has been afforded an opportunity to review this Guaranty with such legal counsel, and that Guarantor fully understands the implications and ramifications of the agreements herein made by the Guarantor.

16.     Loan Agreement.     The terms and conditions contained herein are subject to that certain Loan Agreement (“Loan Agreement”) of even date herewith, made by and between Debtor, Holder, and the guarantors defined therein. To the extent anything contained herein is inconsistent with or contrary to the terms of the Loan Agreement, the terms of the Loan Agreement shall control. All capitalized terms used but not defined in this Guaranty shall have the same meaning as used and defined in the Loan Agreement.

17.     Beneficial Interest.     This Guaranty may reasonably be expected to benefit directly or indirectly, Guarantor, and members and managers of Guarantor have determined that this Guaranty may reasonably be expected to benefit, directly or indirectly, Guarantor.

THE REMAINDER OF THIS PAGE IS BLANK

SIGNATURE PAGE FOLLOWS

Guaranty Agreement Page 6

EXECUTED effective as of (but not necessarily on) the 30th day of July, 2015.

GUARANTOR:		Address for Notice:
JBGL Mustang, LLC,
a Texas limited liability company
By:	/s/ James R. Brickman	2805 North Dallas Parkway
	James R. Brickman	Suite 400
	Manager	Dallas, Texas 75093
JBGL Chateau, LLC,
a Texas limited liability company
By:	/s/ James R. Brickman	2805 North Dallas Parkway
	James R. Brickman	Suite 400
	Manager	Dallas, Texas 75093
JBGL Exchange, LLC,
a Texas limited liability company
By:	/s/ James R. Brickman	2805 North Dallas Parkway
	James R. Brickman	Suite 400
	Manager	Dallas, Texas 75093
JBGL Builder Finance, LLC
a Texas limited liability company,
By:	/s/ James R. Brickman	2805 North Dallas Parkway
	James R. Brickman	Suite 400
	Manager	Dallas, Texas 75093
Johns Creek 206, LLC,
a Georgia limited liability company
By:	/s/ James R. Brickman	2805 North Dallas Parkway
	James R. Brickman	Suite 400
	Manager	Dallas, Texas 75093

Guaranty Agreement Page 7

EX-10.4

Green Brick Partners, Inc. 8-K

Exhibit 10.4

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

DEED OF TRUST AND SECURITY AGREEMENT

THE STATE OF TEXAS

KNOW ALL MEN BY THESE PRESENTS:

COUNTY OF DENTON

That the undersigned, JBGL MUSTANG, LLC, a Texas limited liability company, (hereinafter “Grantor” whether one or more), to secure the full and timely payment of the Indebtedness (hereinafter defined) and the performance of the Obligations (hereinafter defined), and in further consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration in hand paid by Beneficiary (hereinafter defined) and Gary L. Tipton, Trustee (hereinafter “Trustee” whether one or more) of Dallas County, Texas, the receipt and legal sufficiency of which is hereby acknowledged by Grantor, has Granted, Bargained, Assigned, Sold, Transferred, and Conveyed, and by these presents does Grant, Bargain, Assign, Sell, Transfer, and Convey, unto Trustee, the Property (hereinafter defined), in trust, however, for the use and benefit of Beneficiary.

TO HAVE AND TO HOLD unto the said Trustee and to his successors and his and their assigns forever, hereby covenanting and agreeing to forever warrant and defend the Property, and every part thereof, unto the said Trustee and to any successor Trustee, and to the assigns of any Trustee hereunder, against all persons whomsoever lawfully claiming or to claim the same or any part thereof, for and upon the trusts, terms and conditions contained herein; provided, however, if Grantor shall pay and perform, or cause to be paid and performed the Indebtedness and Obligations in full in accordance with the terms of the Security Documents (hereinafter defined), then this Deed of Trust (exclusive of Grantor’s indemnities contained herein) shall become null and void and be released at Grantor’s request and expense; otherwise, it shall remain in full force and effect.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 1

ARTICLE I

DEFINITIONS AND USAGE

1.01        Definitions.        In addition to any terms defined elsewhere in this Deed of Trust, as used herein the following terms shall have the following defined meanings:

(a)         “Beneficiary” shall mean Inwood National Bank, a national banking association, whose mailing address is 7621 Inwood Road, Dallas, Texas 75209, as well as any subsequent holder or holders of the Note.

(b)        “Code” shall mean the Texas Business and Commerce Code, as now written or as hereafter amended or superseded.

(c)        “Deed of Trust” shall mean the Deed of Trust and Security Agreement evidenced by this document.

(d)        “Event of Default” shall mean any occurrence described in Section 3.01 hereof.

(e)         “Grantor” shall mean the party or parties, whether one or more, first identified in this Deed of Trust by typed or handwritten insertion, whose mailing address is 2805 North Dallas Parkway, Suite 400, Plano, Texas 75093, as well as the successors, assigns, heirs, and legal representatives of such party or parties.

(f)         “Fixtures” shall mean all materials, supplies, equipment, apparatus, and other items now or hereafter attached to, installed in or used (temporarily or permanently) in connection with any of the Improvements (hereinafter defined) or the Land (hereinafter defined), and all renewals, replacements, and substitutions thereof and additions thereto, all of which property and things to the extent permitted by law are hereby declared to be permanent accessions to the Land.

(g)         “Governmental Authority” shall mean any and all governmental or quasi-governmental entities of any nature whatsoever, whether federal, state, county, district, city or otherwise, and whether now or hereafter in existence.

(h)         “Impositions” shall mean any required insurance, taxes, assessments, any easement, license or agreement maintained for the benefit of the Property, including leasehold payments or ground rents, if any, and any interest, costs or penalties with respect thereto, of any nature whatsoever which may now or hereafter be assessed, levied or imposed upon the Property or the ownership, use, occupancy or enjoyment thereof.

(i)        “Improvements” shall mean any and all buildings, parking areas and other improvements, and any and all additions, alterations, or appurtenances thereto, now or at any time hereafter placed or constructed upon the Land or any part thereof.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 2

(j)         “Indebtedness” shall mean the principal, interest, and all other amounts due under the Note (hereinafter defined) or secured by this Deed of Trust and the other Security Documents.

(k)         “Land” shall mean the real estate (or interest therein) described in Exhibit “A” attached hereto and incorporated herein by this reference and, subject to the Permitted Exceptions described in Exhibit “B” attached hereto and incorporated herein by this reference, all Improvements and Fixtures, and all rights, titles and interests appurtenant thereto.

(l)         “Loan Agreement” shall mean that certain Loan Agreement of even date herewith, entered into by and between, among others, Grantor, and Green Brick Partners, Inc., a Delaware corporation, as borrower (“Borrower”), and Beneficiary, as Lender.

(m)         “Legal Requirements” shall mean any and all of the following that may now or hereafter be applicable to Grantor or the Property: (i) judicial decisions, statutes, rulings, rules, regulations, permits, certificates or ordinances of any Governmental Authority having jurisdiction over the Grantor or the Property; and (ii) restrictions of record.

(n)         “Note” shall mean that certain Revolving Line of Credit even date herewith executed by Borrower, as maker, payable to the order of Beneficiary, in the aggregate principal amount of FIFTY MILLION AND 00/100 DOLLARS ($50,000,000.00), and payable as therein provided, and all extensions, renewals, and modifications thereof, and all other notes given in substitution therefor.

(o)         “Obligations” shall mean any and all of the covenants, warranties, representations and other obligations (other than to repay the Indebtedness) made or undertaken by Grantor or Borrower under the Security Documents or Legal Requirements.

(p)         “Permitted Exceptions” shall mean, (i) if any, the liens, encumbrances, security interests, easements, intrusions, reservations, and adverse claims affecting the Property as set forth in Exhibit “B” attached hereto and incorporated herein by this reference, (ii) the lien and security interest created by this Deed of Trust and any other lien against the Land in favor of Beneficiary; and (iii) the matters, if any, set forth as exceptions on Schedule B of any title insurance policy issued in connection with the transaction described in this Deed of Trust or the Loan Agreement.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 3

(q)         “Property” shall mean the Land (including all minerals thereon and thereunder), Improvements, and Fixtures, together with all or any part of and any interest in the following: (i) rights, privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances in any way pertaining thereto, and rights, titles, and interests of Grantor in and to any bed of any stream, creek, or waterway, streets, roads, alleys, strips of land adjoining the Land or any part thereof, and all rights of ingress and egress to the Land; (ii) additions, substitutions, replacements and revisions thereof and thereto and all reversions and remainders therein; and (iii) all leases, rents, royalties, oil and gas rights and profits, water rights, in any manner now or hereafter a part of or relating to the Land.

(r)        “Security Documents” shall mean the Note, this Deed of Trust, the Loan Agreement, and all other instruments, documents, or other writings now or hereafter executed by Grantor or Borrower pertaining to or as security for the payment of the Indebtedness or the performance of the Obligations.

(s)         “Trustee” shall mean the party identified second in this Deed of Trust by typed or handwritten insertion; and his, its or their substitutes, successors and assigns.

1.02       Context and Usage.        Whenever the context hereof requires, reference in this Deed of Trust to the singular number shall include the plural, and likewise the plural shall include the singular; words denoting sex shall be construed to include the masculine, feminine and neuter, where appropriate; and specific enumeration shall not exclude the general, but shall be considered as cumulative.

ARTICLE II

REPRESENTATIONS, WARRANTIES, COVENANTS 

AND OTHER AGREEMENTS OF GRANTOR

2.01       Representations, Warranties, Covenants, and other Agreements of Grantor.        Grantor and Borrower, as applicable, unconditionally represents, warrants, covenants, and agrees that:

(a)         The Obligations set forth in the Security Documents are legal, valid, and binding on Grantor and Borrower, as applicable, in accordance with their terms, and no offsets or defenses exist against Beneficiary in favor of Grantor or Borrower which would in any way lessen or invalidate Grantor’s or Borrower’s liability under the Security Documents or the Indebtedness.

(b)        The execution and delivery of, and performance under, the Security Documents are within Grantor’s and Borrower’s authority and powers.

(c)        Grantor has good and indefeasible title to the Land, Improvements, and Fixtures, free and clear of any liens, encumbrances, security interests, easements, or adverse claims except for those Permitted Exceptions, if any, set forth in Exhibit “B”, attached hereto. This Deed of Trust shall constitute a valid, subsisting first lien on the Land, Improvements, and Fixtures, all in accordance with the terms hereof.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 4

(d)         Borrower will duly and punctually: (i) pay the Indebtedness, as and when called for in the Security Documents; (ii) perform all of its Obligations, in full, on or before the date or dates same are to be performed; and (iii) cause each of the Impositions to be paid and discharged not later than the due dates thereof and furnish Beneficiary with evidence of such payment.

(e)        Grantor (and, to the extent within Borrower’s control, Borrower) will promptly and fully comply with all present and future Legal Requirements and cause all Improvements, included or to be included in the Property, to comply with all Legal Requirements.

(f)        Grantor will use commercially reasonable efforts to maintain, preserve, and keep the Property in condition customary in the single-family development industry and will make, to the extent applicable, any necessary repairs, replacements, additions, improvements and alterations thereof and thereto, both structural and non-structural, which are necessary to keep the Property in such condition.

(g)         To the extent that any vertical improvements are constructed on the Property, Grantor will keep the Property insured against loss or damage by fire, explosion, windstorm, hail, tornado, flood (if the Property is located in an identified “flood hazard area”, in which flood insurance has been made available pursuant to the National Flood Insurance Act of 1968), and other hazards by policies of fire and extended coverage and Grantor shall obtain and maintain such other insurance coverage as Beneficiary shall reasonably require. The insurance carriers providing such insurance shall be chosen by Grantor subject to Beneficiary’s approval, which shall not be unreasonably withheld.

(h)         Either Grantor or Borrower will deliver to Beneficiary true and correct copies of the original policies evidencing such insurance as specified in Section 2.01(f) above and any additional insurance which shall be taken out upon the Property and receipts evidencing the payment of all premiums, and certificates evidencing renewals of all such policies of insurance shall be delivered to Beneficiary at least ten (10) days before any such insurance shall expire; and that any such policies shall be payable to Beneficiary as its interest may appear, pursuant to a mortgagee clause attached which shall be satisfactory to Beneficiary, and shall provide for at least ten (10) days prior written notice to Beneficiary prior to cancellation of such policies. In the event of foreclosure, of this Deed of Trust, or other transfer of title to Property in extinguishment in whole or in part of the Indebtedness, all right, title and interest of Borrower and/or Grantor in and to any such policies then in force concerning the Property and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Beneficiary in the event of such transfer. In case of any insured loss under any such policies, Beneficiary, at its option, shall be entitled to receive and retain the proceeds of any such insurance policies, applying the same upon the Indebtedness or to apply such proceeds to the repair or restoration of the Improvements.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 5

(i)        Upon Beneficiary’s request, but only after an Event of Default has occurred and is continuing, Borrower will deposit with Beneficiary, each month in advance, a monetary sum estimated by Beneficiary to equal, on a monthly basis, all or such portion of the Impositions as Beneficiary may reasonably require. If such monthly deposits are being made, then, at least thirty (30) days prior to the date on which any tax or insurance premium must be paid to prevent delinquency thereof, Borrower will, on request of Beneficiary, deliver to Beneficiary, a statement or statements showing the amount of the tax or premium required to be paid, and the concern or authority to which same is payable, and will, at the same time, deposit with Beneficiary such amount as will, when added to the amount of such impounds and reserves previously deposited with Beneficiary and then remaining available for that purpose, be sufficient to pay such insurance or tax obligations. If such monthly deposits are being made, then Beneficiary shall apply all or any of the foregoing deposits in the payment of such insurance, tax, or other Impositions. Beneficiary shall not be required to pay Borrower any interest or earning on any of the foregoing deposits. As additional security hereunder, Borrower hereby assigns to Beneficiary all impounds or reserve accounts for Impositions and any unexpired insurance with respect to the Property. Upon an Event of Default hereunder, Beneficiary may at any time, without notice, apply the same as provided in Section 3.07 below.

(j)         Grantor will give prompt written notice to Beneficiary of any condemnation proceeding or casualty loss affecting the Property and in each such instance, afford Beneficiary an opportunity to participate in any such proceeding or in the settlement of any awards thereunder.

(k)         Grantor will promptly pay all debts and liabilities of any character related to the Property including, without limitation, all debts and liabilities for labor, material and equipment incurred in the construction, rehabilitation and improvement of the Property, or any part thereof, and will complete in a good and workmanlike manner any Improvements that may be constructed or repaired thereon.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 6

(k)         If the validity or priority of this Deed of Trust or of any rights, titles, liens or interests created or evidenced hereby with respect to the Property or any part thereof shall be endangered or questioned or shall be attacked directly or indirectly or if any legal proceedings are instituted against Grantor with respect thereto, Grantor will promptly give written notice thereof to Beneficiary and at Grantor’s own cost and expense will use commercially reasonable efforts to endeavor to cure any defect that may be developed or claimed, and will take all necessary and proper steps for the defense of such legal proceedings including, but not limited to, the employment of counsel, the prosecution or defense of litigation and the release or discharge of all adverse claims, and the Trustee and Beneficiary, or either of them (whether or not named as parties to legal proceedings with respect thereto) are hereby authorized and empowered to take such additional steps as in their reasonable judgment and discretion may be necessary or proper for the prosecution or defense of any such legal proceedings including, but not limited to, the employment of independent counsel, the prosecution or defense of litigation and the compromise or discharge of any adverse claims made with respect to the Property, and all reasonable and necessary expenses so incurred of any kind and character shall be a demand obligation owing by Grantor and shall bear interest from the date of expenditure until paid at the highest rate of interest which may legally be contracted for under the laws of the State of Texas, and shall be secured by the lien and security interest evidenced by this Deed of Trust, and the party incurring such expenses shall be subrogated to all rights of the person receiving such payment.

(l)        Grantor will defend and hold Beneficiary harmless from, any action, proceeding or claim affecting the Property or the Security Documents or the lien or security interest created thereby except to the extent otherwise provided herein. Further, Grantor will notify Beneficiary, in writing, promptly, of the commencement of any legal proceedings affecting the Property, or any part thereof, and will take all commercially reasonable action to preserve Beneficiary’s rights affected thereby; and Beneficiary may, at its election, take such action in behalf and in the name of Grantor, and at Grantor’s expense, and all reasonable and necessary expenses so incurred of any kind and character shall be a demand obligation owing by Grantor and shall bear interest from the date of expenditure until paid at the highest rate of interest which may legally be contracted for under the laws of the State of Texas, and shall be secured by the lien and security interest evidenced by this Deed of Trust, and the party incurring such expenses shall be subrogated to all rights of the person receiving such payment.

(m)       Grantor agrees that Beneficiary and its authorized agents, attorneys, representatives, and employees, may at all reasonable times and intervals, enter upon and inspect the Property after notice to Grantor and provided that such inspections do not unreasonably interfere with Grantor’s operations on the Property.

(n)        Grantor will not use or occupy, or permit any use or occupancy of the Property in any manner which violates any Legal Requirement; may be dangerous; constitutes a public or private nuisance; or makes void or voidable any insurance on the Property.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 7

(o)         Grantor will not, without the prior written consent of Beneficiary: (i) create, place or permit to be created or placed, or allow to remain, any mortgage, pledge, lien (statutory, constitutional or contractual), security interest, encumbrance or charge, or conditional sale or other title retention agreement, regardless of whether same are expressly subordinate to the liens and security interests of the Security Documents, with respect to the Property; (ii) request change in any zoning ordinance affecting the Property except for zoning changes to single-family residential; (iii) enter into any covenant, contract or other agreement, except in the ordinary course of Grantor’s business, which would materially and adversely affect the use of the Property; or (iv) sell, lease (except in the ordinary course of Grantor’s business) exchange, assign, convey, transfer possession of, or otherwise dispose of, all or any portion of the Property, or any interest therein, but if ownership of the Property or any part thereof or interest therein becomes vested in any person or entity other than Grantor, Beneficiary or any other holder of the Indebtedness may, without notice to Grantor, deal with such successor or successors-in-interest with reference to this Deed of Trust and the Indebtedness in the same manner as with Grantor without in any way discharging Borrower from the Indebtedness or the Obligations. Without limiting the right of Beneficiary to reasonably withhold its consent or to make other requirements prior to granting its consent, Beneficiary may require: (i) evidence reasonably satisfactory to Beneficiary that transferee is credit worthy; and (ii) transferee to execute such written modification and assumption agreements with regard to the Security Documents as Beneficiary shall deem reasonably necessary or desirable, including, but not limited to, provisions increasing the interest rate on the Note. No transfer of the Property, no forbearance by the Beneficiary and no extension of the time for the payment of the Indebtedness or the performance of the Obligations granted by Beneficiary shall release, discharge or affect in any way Borrower’s liability hereunder.

(p)         Neither Borrower nor Grantor will permit: (i) any waste or deterioration of any part of the Property; (ii) any material alterations or additions to the Property, unless in the ordinary course of Grantor’s business; or (iii) any of the Fixtures to be removed at any time from the Land or Improvements, except in the ordinary course of Grantor’s business, unless the removed item is removed temporarily for maintenance and repair or, if removed permanently, is replaced by an article of at least equal suitability and value, and owned by Grantor free and clear of any other lien or security interest.

(q)         Grantor and Borrower will execute and deliver such further instruments and do such further acts as may be necessary or desirable in Beneficiary’s or Trustee’s reasonable opinion, to carry out more effectively the purposes and intent of this Deed of Trust and the Security Documents, and to perfect the rights, titles, liens and security interest herein created or intended to be created and protect the rights, remedies, powers and privileges of Beneficiary hereunder. Further, Grantor and Borrower will, upon request of Beneficiary, promptly correct any defect, error or omission, which may be discovered in the contents of this Deed of Trust, the Note, or the Security Documents, and will execute and deliver any and all additional instruments as may be reasonably requested by Beneficiary or Trustee to correct such defect, error or omission, or to identify any additional properties which are or become subject to this Deed of Trust.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 8

(r)        Borrower will promptly pay and hold Beneficiary harmless from all reasonable attorney’s fees and all other actual, out-of-pocket costs incurred by Grantor or Borrower, or actual, out-of-pocket costs of enforcement incurred by Beneficiary, in connection with the performance of the covenants of this Deed of Trust, or otherwise attributable to or chargeable to Grantor as owner of the Property.

(s)         At all times throughout the term of the Indebtedness made pursuant to and arising out of the Security Documents, Grantor and all of its respective Affiliates (defined below) shall (i) not be a Prohibited Person (defined below), and (ii) be in full compliance with all applicable orders, rules, regulations and recommendations of the Office of Foreign Assets Control (“OFAC”) of the U. S. Department of the Treasury.

The term “Prohibited Persons” shall mean any person or entity: (i) listed in the Annex to, or otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”); (ii) that is owned or controlled by, or acting for or on behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (iii) with whom Beneficiary is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering law, including the Executive Order; (iv) who commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; (v) that is named as a “specially designated national and blocked person” on the most current list published by OFAC at its website, www.ustreas.gov/offices/enforcement/ofac or at any replacement website or other replacement or supplemental official publication of such list; or (vi) who is an Affiliate of or affiliated with a person or entity listed above.

The term “Affiliate” as used herein shall mean, as to any person or entity, any other person or entity that, directly or indirectly, is in control of, is controlled by, or is under common control with such person or entity, or is a director or officer of such person or entity or of an Affiliate of such person or entity. As used herein, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a person or entity, whether through ownership or voting securities or interest, by contract or otherwise.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 9

ARTICLE III

DEFAULT AND REMEDIES

3.01       Events of Default.        The term “Event of Default”, as used in this Deed of Trust, shall mean the occurrence at any time and from time to time, of any one or more of the following, subject to any notice and opportunity to cure provisions contained in the Loan Agreement, and, if no notice and opportunity to cure provisions contained in the Loan Agreement shall apply for a default by Grantor hereunder, then Grantor shall have a period of thirty (30) days after Grantor’s receipt of Lender’s written notice to Grantor of such default, provided, however, that if Grantor has commenced, and is continuing to utilize commercially reasonable efforts to, effect a cure, then Grantor shall be entitled to a period of up to ninety (90) days in the aggregate from the date of Grantor’s receipt of such written notice to effect a cure:

(a)      If any portion of the Indebtedness, as and when the same shall become due and payable, shall fail to be paid fully and timely in accordance with the terms of the Note.

(b)      If any of Grantor’s obligations hereunder or under the Loan Agreement shall fail to be discharged fully and timely after the expiration of any applicable notice and opportunity to cure.

(c)      If any representation, warranty or other information, including, without limitation, financial statements, supplied to Beneficiary under this Deed of Trust shall be false, misleading or erroneous in any material respect and in any manner (whether by omission or inclusion).

(d)      If a default, or event of default, occurs under the Loan Agreement (subject to any applicable notice and opportunity to cure provision).

3.02       Remedies Upon Default.       To the fullest extent permitted in equity or at law, by statute or otherwise, if an Event of Default shall occur, Beneficiary, at Beneficiary’s sole election and by or through the Trustee or otherwise, may exercise any or all of the remedies described below. Prior to exercising any remedies described below for the occurrence of an Event of Default, Grantor and Borrower shall be entitled to all notice and cure rights as provided for in the Loan Agreement. If Borrower fails to cure such Event of Default within the applicable time period as provided for in the Loan Agreement, then Beneficiary shall have the right to exercise its remedies as provided herein.

Beneficiary’s remedies under this Section include the following:

(a)       Declare all unpaid amounts under the Note and any other unpaid portion of the Indebtedness immediately due and payable, without further notice, notice of intent to accelerate maturity, notice of acceleration of maturity, presentment, protest, demand or action of any nature whatsoever (each of which is hereby expressly waived by Grantor and Borrower), whereupon the same shall become immediately due and payable.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 10

(b)       Enter upon the Property and take exclusive possession thereof, and, if necessary to obtain such possession, Beneficiary may invoke any and all legal remedies to dispossess Grantor or any other persons, including specifically one or more actions for forcible entry and detainer, trespass to try title or writ of restitution.

(c)        Hold, lease, manage, operate or otherwise use or permit the use of the Property, either itself or by other persons, firms or entities, in such manner, for such time and upon such other terms as Beneficiary may reasonably deem prudent under the circumstances (making such repairs, alterations, additions and improvements thereto and taking such other action from time to time as Beneficiary shall reasonably deem necessary or desirable), and apply all rents collected in connection therewith in accordance with the provisions of Section 3.07 below.

(d)       Sell or offer for sale the Property in such portions, order and parcels as Beneficiary may determine, with or without having first taken possession of same, to the highest bidder for cash at public auction. Such sale shall be made at the courthouse door of the county where the Land is situated (or if the Land is situated in more than one county, the Property shall be sold at the courthouse door of any of such counties as designated in the notices of sale provided for herein) on the first Tuesday of any month between 10:00 a.m. and 4:00 p.m. after giving adequate legal notice of the time, place and terms of sale, by posting or causing to be posted written or printed notices thereof for at least twenty-one (21) consecutive days preceding the date of said sale at the courthouse door of the foregoing county and, if the Land is situated in more than one county, one notice shall be posted at the courthouse door of each county in which the Land is situated, and by Beneficiary serving written notice of such proposed sale on each debtor obligated to pay the Indebtedness, at least twenty-one (21) days preceding the date of said sale by certified mail at the most recent address for such parties in the records of Beneficiary, or by accomplishing all or any of the aforesaid in such manner as permitted or required by Section 51.002, Texas Property Code (as now written or as hereafter amended or superseded) relating to the sale of collateral after default by a debtor or by any other applicable present or subsequent laws. At any such sale: (i) Trustee shall not be required to have physically present, or to have constructive possession of, the Property (Grantor hereby covenanting and agreeing to deliver to Trustee any portion of the Property not actually or constructively possessed by Trustee immediately upon demand by Trustee) and the title to and right of possession of any such property shall pass to the purchaser thereof as completely as if the same had been actually present and delivered to purchaser at such sale; (ii) each instrument of conveyance executed by Trustee shall contain a special warranty of title, binding upon Grantor; (iii) each and every recital contained in any instrument of conveyance made by Trustee shall presumptively establish the truth and accuracy of the matters recited therein, including, without limitation, nonpayment of the Indebtedness, advertisement and conduct of such sale in the manner provided herein and otherwise by law and by appointment of any successor Trustee hereunder; (iv) any and all prerequisites to the validity of such sale shall be conclusively presumed to have been performed; (v) the receipt of Trustee or of such other party making the sale shall be a sufficient discharge to the purchaser for his purchase money and no such purchaser, or his assigns or personal representatives, shall thereafter be obligated to see to the application of such purchase money or be in any way answerable for any loss, misapplication or nonapplication thereof; (vi) Grantor shall be completely and irrevocably divested of all of its right, title, interest, claim and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against Grantor, and against any and all other person claiming or to claim the property sold or any part thereof by, through or under Grantor; and (vii) Beneficiary may be a purchaser at any such sale. Should the Property be sold in one or more parcels as permitted by this subsection, the right of sale arising out of any Event of Default shall not be exhausted by any one or more such sales, but other and successive sales may be made until all of the Property has been sold or until the Indebtedness has been fully satisfied.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 11

(e)        Upon, or at any time after, commencement of foreclosure of the lien and security interest provided for herein, or any legal proceedings hereunder, make application to a court of competent jurisdiction as a matter of strict right and without notice to Grantor or regard to the adequacy of the Property for the repayment of the Indebtedness, for appointment of a receiver of the Property and Grantor does hereby irrevocably consent to such appointment. Any such receiver shall have all the usual powers and duties of receivers in similar cases, including the full power to rent, maintain, and otherwise operate the Property upon such terms as may be approved by the court, and shall apply such rents in accordance with the provisions of Section 3.07 below.

(f)        Exercise any and all other rights, remedies and recourses granted under this Deed of Trust or the Loan Agreement.

3.03      Remedies Non-Exclusive.        All rights, remedies and recourses of Beneficiary granted in the Security Documents or otherwise available at law or equity:

(a)        Shall be cumulative and concurrent;

(b)        May be pursued separately, successively or concurrently against Grantor or against the Property, at the sole discretion of Beneficiary;

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 12

(c)        May be exercised as often as occasion therefor shall arise, it being agreed by Grantor that the exercise or failure to exercise any of same shall in no event be construed as a waiver or release thereof or of any other right, remedy or recourse; and

(d)        Shall be non-exclusive.

3.04        Non-Waiver.         Beneficiary may release, regardless of consideration, any part of the Property without, as to the remainder, in any way impairing, affecting, subordinating or releasing the lien or security interests evidenced by the Security Documents. For payment of the Indebtedness, Beneficiary may resort to any of the security therefor in such order and manner as Beneficiary may elect. No security heretofore, herewith or subsequently taken by Beneficiary shall in any manner impair or affect the security given by the Security Documents and all security shall be taken, considered and held as cumulative.

3.05      Waiver of Rights by Grantor.     Grantor and Borrower, as applicable, each, hereby irrevocably and unconditionally waives and releases:

(a)        All benefit that might accrue to Grantor by virtue of any present or future law exempting the Property from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment;

(b)        All notices of any Event of Default or of Trustee’s or Beneficiary’s exercise of any right, remedy or recourse except as specifically provided for under the Security Documents;

(c)        Any right to a marshalling of assets for a sale in inverse order of alienation; and

(d)        Any right of offset, or other claim whatsoever which may now or hereafter exist against Beneficiary or in favor of Grantor and no such right or claim shall in any way be used by Grantor to lessen, impair or defeat Beneficiary’s rights hereunder.

3.06        Adjournment of Sale.     In case Beneficiary shall have proceeded to invoke any right, remedy or recourse permitted under the Security Documents and shall thereafter elect to discontinue or abandon same for any reason, Beneficiary shall have the unqualified right so to do and, in such event, Grantor, Borrower, and Beneficiary shall be restored to their former positions with respect to the Indebtedness, the Obligations, the Security Documents, the Property and otherwise, and the rights, remedies, recourses and powers of Beneficiary shall continue as if same had never been invoked.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 13

3.07       Application of Proceeds.     Any proceeds of any sale of, and any rents or other amounts generated by the holding, leasing, operation or other use of the Property shall be applied in the following order of priority:

(a)        First, to the payment of all reasonable costs and expenses of taking possession of the Property and of holding, leasing, operating, using, repairing, improving and selling the same, including, without limitation, reasonable fees of the attorneys retained by Beneficiary or Trustee; reasonable fees of any receiver or accountants; recording and filing fees; court costs; costs of advertisement, and the payment of any and all Impositions, liens, security interest of this Deed of Trust (except those to which the Property has been sold subject to and without in any way implying Beneficiary’s consent to the creation thereof);

(b)        Second, to the payment of all accrued and unpaid interest due on the Indebtedness;

(c)        Third, to the payment of the unpaid principal balance of the Indebtedness;

(d)        Fourth, to the payment of all amounts, other than unpaid principal balance of the Indebtedness, which may be due to Beneficiary under the Security Documents, together with interest thereon as provided therein;

(e)        Fifth, to Grantor.

3.08       Additional Remedies.      In addition to the remedies set forth in this Article III, upon the occurrence of an Event of Default the Beneficiary and Trustee shall, in addition, have available to them the remedies set forth in Article IV below, as well as all other remedies available to them at law or in equity.

ARTICLE IV

SECURITY AGREEMENT

4.01       Grant of Security Interest.       This Deed of Trust shall also constitute and serve as a security agreement on personal property within the meaning of, and shall constitute a first and prior security interest under, Chapter 9 of the Code, with respect to the Fixtures, and all existing and future rents, leases and rentals thereunder, issues, profits, income, condemnation awards (inclusive of all amounts paid in connection with any public taking), insurance proceeds and all proceeds of the foregoing, plans and specifications for the Improvements, all of Grantor’s rights under any licenses, permits, certificates, documents, and general intangibles (including trade names and symbols used in connection with the Land or the Improvements), waste water, fresh water and other utility capacity and facilities available to or allocated to the Land or the Improvements (hereinafter collectively referred to as the “Personal Property”) arising out of or in connection with the Property, all existing and future equipment, machinery, furniture and furnishings, fixtures and trade fixtures used in connection with the Property. To this end, and without limiting any of the provisions of this Deed of Trust, Grantor, as Debtor (and referred to sometimes herein as “Debtor”) has Granted, Bargained, Conveyed, Assigned, Transferred and Set Over and by these presents does Grant, Bargain, Convey, Assign, Transfer and Set Over unto Beneficiary, as Secured Party (and referred to sometimes herein as “Secured Party”), a first and prior security interest in all of Grantor’s right, title and interest in and to the Fixtures and the Personal Property to secure the full and timely payment of the Indebtedness and performance of the Obligations.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 14

4.02       Additional Documents.      Grantor agrees to execute and deliver to Beneficiary, in form and substance satisfactory to Beneficiary, such financing statements and such further assurances as Beneficiary may, from time to time, reasonably consider necessary to create, perfect and preserve the security interest herein granted, and Beneficiary may cause such statements and assurances to be recorded and filed, at such times and places as may be required or permitted by law to create, perfect and preserve such security interest.

4.03      Rights of Trustee.      Beneficiary as well as Trustee on Beneficiary’s behalf, shall have all the rights, remedies and recourses with respect to the Fixtures afforded a “Secured Party” by Chapter 9 of the Code, in addition to, and not in limitation of, the other rights, remedies and recourses afforded Beneficiary and/or Trustee by the Security Documents.

4.04      Exculpation of Beneficiary and Trustee.      The security interest herein granted shall not be deemed or construed to constitute Trustee or Beneficiary as a party in possession of the Property or to obligate Trustee or Beneficiary to lease the Property, or to take any action, incur any expenses or perform any obligation whatsoever under any lease or otherwise.

4.05       Additional Remedies in Event of Default.      Upon the occurrence of an Event of Default as provided in Section 3.01 of this Deed of Trust, and at any time thereafter:

(a)        Trustee or Beneficiary shall have, with regard to the Fixtures, the remedies provided in this Deed of Trust and in the Code (no such remedy granted by the Code being excepted, modified or waived herein). Trustee or Beneficiary may use his or its reasonable discretion in exercising its rights and electing its remedies; provided, however, all actions shall be in compliance with the standards of the Code, where applicable and required. For purposes of the notice requirements of the Code and this Article IV, it is agreed that notice sent or given not less than ten (10) calendar days prior to the taking of the action to which the notice relates, is reasonable notice.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 15

(b)        Trustee or Beneficiary shall be entitled, acting in its sole discretion, to apply the proceeds of any disposition of the Fixtures in the order set forth in Part 5 of Article 9 of the Code, or, if allowed by the Code, in the order set forth in Section 3.07 hereof. If the proceeds are not sufficient to pay the Indebtedness in full, Grantor shall remain liable for any deficiency.

(c)         Notwithstanding anything herein to the contrary, Beneficiary, or the Trustee acting on Beneficiary’s behalf, may at its option dispose of the Fixtures and other items of personal property covered by this Deed of Trust in accordance with Beneficiary’s rights and remedies in respect of the Land pursuant to the provisions of this Deed of Trust, in lieu of proceeding under the Code.

4.06        Assembling of Personalty, Fixtures, Leases and Rents; Expenses. Beneficiary may require Grantor to assemble the Fixtures and make them available to Beneficiary or Trustee at a place to be designated by Beneficiary that is reasonably convenient to both parties. All reasonable expenses of retaking, holding, preparing for sale, lease or other use or disposition, selling, leasing or otherwise using or disposing of the Fixtures and the like which are incurred or paid by Beneficiary as authorized or permitted hereunder, including also all reasonable attorney’s fees, and all actual, out-of-pocket legal and reasonable expenses and costs, shall be added to the Indebtedness and Grantor shall be liable therefor.

4.07        No Lien on Consumer Goods. Notwithstanding anything to the contrary contained in this instrument, (a) if the Beneficiary is a state or national bank, and if any person executing this instrument is a “consumer” as defined in Regulation AA of the Board of Governors of the Federal Reserve System, no lien or security interest created or evidenced by this instrument shall extend to, cover or affect “household goods” as defined in Regulation AA of the Board of Governors of the Federal Reserve System; and (b) in all other cases, if any person executing this instrument is a “consumer” as defined in 16 C.F.R. §444.1, no lien or security interest created or evidenced by this instrument shall extend to, cover or affect “household goods,” as defined in 16 C.F.R. §444.1.

ARTICLE V

CONDEMNATION AND OTHER AWARDS

5.01        Condemnation and Other Awards.      All judgments, decrees or awards now or hereafter made for injury or damage to the Property, or awards, settlements or other compensation now or hereafter made by any Governmental Authority, including those for any variation of, or change of grade in, any streets affecting the Land or the Improvements, are hereby assigned in their entirety to Beneficiary, who may apply the same to the Indebtedness secured hereby or in such manner as Beneficiary may elect, and 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.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 16

ARTICLE VI

THE TRUSTEE

6.01        Exculpation of Trustee.      Trustee shall not be liable for any error of judgment or act done by Trustee in good faith, or be otherwise responsible or accountable to Grantor under any circumstances whatsoever, nor shall Trustee be personally liable in case of entry by him, or anyone entering by virtue of the powers herein granted, upon the Property for debts contracted or liability or damages incurred in the management or operations of the Property, Trustee shall have the right to rely on any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith to be genuine. Trustee shall be entitled to reimbursement for reasonable expenses incurred by him in the performance of his duties hereunder. Grantor will, from time to time, reimburse Trustee for, and save him harmless against, any and all liability and actual, out-of-pocket expenses which may be incurred by him in the performance of his duties.

6.02        Holding of Funds.      All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated in any manner from any other moneys (except to the extent required by law), and Trustee shall be under no liability for interest on any money received by him hereunder.

6.03        Substitute Trustee.      Trustee may resign at any time with or without notice. If Trustee shall die, resign or become disqualified from acting in the execution of this trust or shall fail or refuse to execute the same when requested by Beneficiary so to do, or if, for any reason, Beneficiary shall prefer to appoint a substitute trustee to act instead of the aforenamed Trustee, Beneficiary shall have full power to appoint a substitute trustee and, if preferred, several substitute trustees in succession without any formality whatsoever other than an appointment and designation in writing signed by Beneficiary or its agent or officer (whose authority shall be presumed) which substitute trustee or trustees shall succeed to all the estates, rights, powers and duties of the aforenamed Trustee.

6.04        Rights of Substitute Trustee.      Any new Trustee appointed pursuant to any of the provisions hereof shall, without any further act, deed or conveyance, become vested with all the estates, properties, rights, powers and trust of its or his predecessor in the rights hereunder with like effect as if originally named as Trustee herein; but nevertheless, upon the written request of Beneficiary or of the successor Trustee, the Trustee ceasing to act shall execute and deliver an instrument transferring to such successor Trustee, upon the trusts herein expressed, all the estates, properties, rights, powers and trusts of the Trustee so ceasing to act, and shall duly assign, transfer and deliver any of the property and money held by such Trustee to the successor Trustee so appointed in his place.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 17

ARTICLE VII

MISCELLANEOUS

7.01        Survival of Obligations.      Each and all of the Obligations shall survive the execution and delivery of the Security Documents, and the consummation of the loan called for therein, and shall continue in full force and effect until the Indebtedness shall have been paid in full.

7.02        Additional Documents.      Grantor or Borrower, upon the request of Trustee or Beneficiary, shall execute, acknowledge, deliver and/or file such further instruments and do such further acts as may be reasonably necessary, desirable or proper to carry out more effectively the purposes of the Security Documents and to subject to the liens and security interests thereof any property intended by the terms thereof to be covered thereby, including specifically, but without limitation, any renewals, additions, substitutions, replacements, or appurtenances to the then Property. Borrower will pay all such recording, filing, re-recording, and refiling taxes, and reasonable fees and other charges, including those for security interest searches.

7.03        Notices.      All notices or other communications required or permitted to be given or delivered pursuant to this Deed of Trust (except for notice of a foreclosure sale which shall be given in the manner set forth in Section 3.02 hereof) shall be in writing and shall be deemed properly given and/or delivered upon deposit in the United States mail, postage prepaid, registered or certified with return receipt requested, or upon actually delivering same in person or by duly appointed agent to the intended addressee or upon sending a prepaid telegram. For purposes of notice, the addresses of the parties shall be as set forth in the opening recital or in the Definitions hereinabove; provided, however, that either party shall have the right to change its address for notice hereunder to any other location within the continental United States by giving thirty (30) days prior notice to the other party in the manner set forth hereinabove.

7.04        Non-Waiver.      Any failure by Trustee or Beneficiary to insist, or any election by Trustee or Beneficiary not to insist, upon strict performance by Grantor of any of the terms, provisions or conditions of the Security Documents shall not be deemed to be a waiver of same or of any other term, provision or condition thereof, and Trustee or Beneficiary shall have the right at any time or times thereafter to insist upon strict performance by Grantor of any and all of such terms, provisions and conditions.

7.05        Additional Advances or Expenditures by Beneficiary.      If Grantor or Borrower shall fail, refuse or neglect to make any payment or perform any act required by the Security Documents, then at any time thereafter, and without notice to or demand upon Grantor and without waiving or releasing any other right, remedy or recourse Beneficiary may have because of same, Beneficiary may (but shall not be obligated to) make such payment or perform such act for the account of and at the expense of Borrower, and shall have the right to enter the Property for such purpose and to take all such action thereon and with respect to the Property as it may reasonably deem necessary or appropriate. Borrower shall indemnify Beneficiary for all actual, out-of-pocket losses, expenses, damage, claims and causes of action, including reasonable attorney’s fees, incurred or accruing by reason of any acts performed by Beneficiary pursuant to this Section 7.05 or by reason of any other provision in the Security Documents. All sums paid by Beneficiary pursuant to this Section 7.05 and all other sums expended by Beneficiary to which it shall be entitled to be indemnified, together with interest thereon at the maximum rate of interest allowed by applicable law from the date of such payment or expenditure, shall constitute additions to the Indebtedness; shall be secured by the Security Documents; and shall be paid by Borrower to Beneficiary upon demand.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 18

7.06        Heirs, Successors and Assigns.      All Obligations contained in the Security Documents are intended by the Parties to be, and shall be construed as, covenants running with the Property. Further, all of the terms of the Security Documents shall apply to, be binding upon, and inure to the benefit of the parties thereto, their respective successors, assigns, heirs and legal representatives, and all other persons claiming by, through or under them.

7.07        Partial Invalidity.      The Security Documents are intended to be performed in accordance with, and only to the extent permitted by, all applicable Legal Requirements. If any provision of any of the Security Documents or the application thereof to any person or circumstances shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of the instrument in which such provision is contained nor the application of such provision to other persons or circumstances nor the other instruments referred to hereinabove shall be affected thereby, but rather shall be enforced to the greatest extent permitted by law.

7.08        Lawful Interest.      All agreements between and among Grantor, Borrower, and Beneficiary are expressly limited so that in no contingency or event whatsoever whether by reason of advancement of the proceeds of the Note, acceleration of maturity of the unpaid principal balance thereof, or otherwise, shall the amount contracted for, charged, collected, paid or agreed to be paid to Beneficiary for the use, forbearance or detention of the money to be advanced hereunder exceed the highest lawful rate permissible under applicable law. If, from any circumstances whatsoever, fulfillment of any provision of the Security Documents, or any other agreement referred to herein, at the time performance of such provisions shall be due, shall involve transcending the maximum limit of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto, then, ipso facto, the obligation to be fulfilled shall be reduced to the maximum limit of such validity, and if from any circumstance, Beneficiary shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall: (a) be applied to the reduction of unpaid principal of Indebtedness secured by the Security Documents; or (b) be refunded to the payor of such amount and not applied to the payment of interest. This provision shall control every other provision of all agreements including but not limited to the Security Documents between or among, Grantor, Borrower, and Beneficiary.

7.09        Subsequent Laws.      In the event of the passage after the date of this Deed of Trust of any applicable law changing in any way the laws for the taxation of deeds of trust and/or the debts secured thereby so as to affect this Deed of Trust, Beneficiary shall have the right, at Beneficiary’s option, and if Grantor fails to pay the tax owed within fifteen (15) days after receipt of written notice and demand for payment from Beneficiary, to declare the Indebtedness immediately due and payable.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 19

7.10        Entire Agreement; Amendment.      The Security Documents contain the entire agreements between the parties relating to the subject matter hereof and thereof and all prior agreements relative thereto which are not contained herein or therein are terminated. The Security Documents may be amended, revised, waived, discharged, released or terminated only by a written instrument or instruments, executed by the party against which enforcement of the amendment, revision, waiver, discharge, release or termination is asserted. Any alleged amendment, revision, waiver, discharge, release or termination that is not so documented shall not be effective as to any party.

7.11        Counterparts.      This Deed of Trust may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute but one instrument.

7.12        Subrogation.      If any or all of the proceeds of the Note have been used to extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the extent of such funds so used, the Indebtedness and this Deed of Trust shall be subrogated to all of the rights, claims, liens, titles and interests heretofore existing against the Property to secure the indebtedness so extinguished, extended or renewed and the former rights, claims, liens, titles and interests, if any, are not waived but rather are continued in full force and effect in favor of Beneficiary and are merged with the lien and security interest created herein as cumulative security for the repayment of the Indebtedness and the satisfaction of the Obligations, regardless of whether said indebtedness, rights, claims, liens, title and interests are acquired by Beneficiary by assignment or are released by the holder thereof upon payment.

7.13        Governing Law.      The Security Documents shall be governed by and construed according to the laws of the State of Texas and the applicable laws of the United States of America.

7.14        Headings.      The article and section entitlements hereof are inserted for convenience of reference only and shall in no way alter, modify or define, or be used in construing, the text of such articles and sections.

7.15        Joint and Several Liability.      If Grantor consists of more than one party, the Obligations set forth herein and in the Security Documents shall be the joint and several obligations of each of such parties.

7.16        Other Security.      The security herein and hereby provided shall not affect, or be affected by, any other or further security heretofore or hereafter taken to secure the Indebtedness. Beneficiary may release, without notice, any part of the Property, or other security heretofore or hereafter taken to secure the Indebtedness, or any person liable for all or part of the Indebtedness, and without in any way affecting the lien hereof as to the part, or parts, of the Property so retained, and no creditor of Grantor, nor any other person, firm, or corporation, shall have any objection thereto, or right to hold Beneficiary to account therefor, nor shall the lien of this Deed of Trust be adversely affected in any manner by any such release.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 20

7.17        Fixture Filing.      This Deed of Trust shall be effective as a financing statement filed as a fixture filing with respect to all Fixtures and is to be filed for record in the real property records in the Office of the County Clerk for the county or counties in which the Land is situated.

7.18        Partial Release.      Beneficiary will agree to partial releases of the lien granted herein by Grantor against portions of the Property in accordance with the terms of the Loan Agreement, subject to and conditioned upon satisfaction of each of the requirements contained in the Loan Agreement.

7.19        Controlling Document.      To the extent anything contained herein is inconsistent with or contrary to the terms of the Loan Agreement, the terms of the Loan Agreement shall control.

THE REMAINDER OF THE PAGE IS BLANK 

SIGNATURE PAGE FOLLOWS

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 21

EXECUTED to be effective as of the 30th day of July, 2015.

GRANTOR:
JBGL Mustang, LLC,
a Texas limited liability company
By:	/s/ James R. Brickman
	James R. Brickman, Manager

ALL OBLIGATIONS AND AGREEMENTS

APPLICABLE TO BORROWER IN THIS

DEED OF TRUST ARE HEREBY ACKNOWLEDGED

AND AGREED TO FOR ALL PURPOSES:

Green Brick Partners, Inc.,
a Delaware corporation
By:	/s/ James R. Brickman
	James R. Brickman
	Chief Executive Officer

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 22

STATE OF TEXAS §

§

COUNTY OF DALLAS §

THIS INSTRUMENT was acknowledged before me this 29th day of July, 2015, by James R. Brickman, Manager of JBGL Mustang, LLC, a Texas limited liability company, on behalf of said entity.

/s/ John E. Hampton

Notary Public, State of Texas

Printed Name:

Commission Expires:

STATE OF TEXAS §

§

COUNTY OF DALLAS §

THIS INSTRUMENT was acknowledged before me this 29th day of July, 2015, by James R. Brickman, Chief Executive Officer of Green Brick Partners, Inc., a Delaware corporation, on behalf of said entity.

/s/ John E. Hampton

Notary Public, State of Texas

Printed Name:

Commission Expires:

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 23

AFTER RECORDING RETURN TO:

Scott D. Osborn

Adair, Morris & Osborn, P.C.

325 N. St. Paul Street, Suite 4100

Dallas, Texas 75201

THE TRUSTEE’S ADDRESS IS:

c/o Scott D. Osborn

Adair, Morris & Osborn, P.C.

325 N. St. Paul Street, Suite 4100

Dallas, Texas 75201

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 24

EXHIBIT “A”

(Land)

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 25

EXHIBIT A (MUSTANG 1-2)

TRACT1:

Lots99thru106,Lots136thru180,inBlockA,Lots45thru49,55 thru81, in Block G, Lots 1thru 5, 15 thru 30, 35 thru 47, in Block M, of Mustang Park Phase Seven, an additiontotheCity of Carrollton, Denton County,Texas, accordingtothe Mapor Plat thereof recorded in/under Clerk’s File No. 2014-127, Map/Plat Records, Denton County, Texas.

TRACT2:

Lots57thru59,61thru83and86thru97,inBlockA,Lots40thru44,inBlockG, Lots5 thru 18and20thru 37, in Block L,of MustangPark PhaseNine, anadditionto theCity of Carrollton, DentonCounty, Texas, accordingtothe Mapor Platthereof recorded in/under Clerk’s File No. 2014-424, Map/Plat Records, Denton County, Texas; and Certificate of Correction filed 1/16/2015, recorded in Clerk’s File No. 2015-4948, Real Property Records, Denton County, Texas (correction pertains to Lot 44, Block G therein).

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 26

EXHIBIT “B”

(Permitted Exceptions)

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 27

EXHIBIT “B” (MUSTANG 1-2)

PERMITTED EXCEPTIONS

1. The following restrictive covenants of record:

Clerk’s File No. 2014-127, Map/Plat Records, Denton County, Texas. (Tract 1)

Clerk’s File No(s). 2015-4983, Real Property Records, Denton County, Texas and under Clerk’s File No. 2014-424, Map/Plat Records, Denton County, Texas. (Tract 2)

Clerk’s File No(s). 2012-47185, 2012-95473, 2012-111818,2014-72753, 2014-74978, 2014-75040, 2014-75089,2014-102717 (also filed under Clerk’s File No(s). 2014-1037430, Real Property Records, Collin County, Texas), 2014-105773 and 2015-5809, Real Property Records, Denton County, Texas,. (Tracts 1&2)

2. The matters set forth in the document shown below which, among other things, contains or provides for: certain easements; liens and the subordination thereof; provisions relating to partition; restrictions on severability of component parts; and covenants, conditions and restrictions but omitting any covenants or restrictions, if any, including, but not limited to those based upon race, color, religion, sex, sexual orientation, familial status, marital status, disability, handicap, national origin, ancestry, source of income, gender, gender identity, gender expression, medical condition or genetic information, as set forth in applicable state or federal laws, except to the extent that said covenant or restriction is permitted by applicable law.

Entitled: Condominium Declaration/By-laws

Recording Date: July 24, 2014

Recording No: under Clerk’s File No(s). 2014-72753, 2014-74978, 2014-75040, 2014-75089, 2014-102717 (also filed under Clerk’s File No(s). 2014-1037430, Real Property Records, Collin County, Texas), 2014-105773 and 2015-5809, and 2015-4983 (Tract 2), Real Property Records, Denton County, Texas

Liens and charges as set forth in the above mentioned Declaration, Payable to: Mustang Park Townhomes Residential Community, Inc.

Tracts l and 2

3. Building lines, easements and other matters as shown or provided for on plat recorded under Clerk’s File No. 2014-127, Map/Plat Records, Denton County, Texas. Tract 1

4. Building lines, easements and other matters as shown or provided for on plat recorded under Clerk’s File No. 2014-424, Map/Plat Records, Denton County, Texas. Tract 2

5. Easement(s) and rights incidental thereto, as reserved in a document;

Reserved by: Mustang Carrollton Properties, Ltd.

Purpose: As provided in said document

Recording Date: August 27, 2012

Recording No: under Clerk’s File No(s). 2012-95474, Real Property Records, Denton County, Texas

Affects: Tract 1

6. Matters contained in that certain document

Entitled: Declaration of Easements Dated: May 4, 2012

Executed by: Mustang Park Owners Association, Inc. and Mustang Carrollton Properties, Ltd.

Recording Date: May 7, 2012

Recording No: under Clerk’s File No(s). 2012-47185, Real Property Records, Denton County, Texas

Reference is hereby made to said document for full particulars.

Tracts 1 and 2

7. Matters contained in that certain document Entitled: Declaration of Easements

Dated: August 24, 2012

Executed by: Mustang Carrollton Properties, Ltd. Recording Date: May 7, 2012

Recording No: under Clerk’s File No(s). 2012-95473, Real Property Records, Denton County, Texas

Reference is hereby made to said document for full particulars. Tracts 1 and 2

Affected by instrument(s) filed of record under Clerk’s File No(s). 2012-111818, Real Property Records, Denton County, Texas. Tracts 1 and 2

8. Matters contained in that certain document Entitled: Drainage Agreement

Dated: June 20, 2013

Executed by: JBGL Mustang LLC, a Texas limited liability company and Mustang Carrollton Properties, Ltd., a Texas limited partnership

Recording Date: June 21,2013

Recording No: under Clerk’s File No(s). 2013-76521, Real Property Records, Denton County, Texas

Reference is hereby made to said document for full particulars. Tracts 1 and 2

EX-10.5

Green Brick Partners, Inc. 8-K

Exhibit 10.5

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

DEED OF TRUST AND SECURITY AGREEMENT

THE STATE OF TEXAS
	KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DENTON

That the undersigned, JBGL EXCHANGE, LLC, a Texas limited liability company, (hereinafter “Grantor” whether one or more), to secure the full and timely payment of the Indebtedness (hereinafter defined) and the performance of the Obligations (hereinafter defined), and in further consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration in hand paid by Beneficiary (hereinafter defined) and Gary L. Tipton, Trustee (hereinafter “Trustee” whether one or more) of Dallas County, Texas, the receipt and legal sufficiency of which is hereby acknowledged by Grantor, has Granted, Bargained, Assigned, Sold, Transferred, and Conveyed, and by these presents does Grant, Bargain, Assign, Sell, Transfer, and Convey, unto Trustee, the Property (hereinafter defined), in trust, however, for the use and benefit of Beneficiary.

TO HAVE AND TO HOLD unto the said Trustee and to his successors and his and their assigns forever, hereby covenanting and agreeing to forever warrant and defend the Property, and every part thereof, unto the said Trustee and to any successor Trustee, and to the assigns of any Trustee hereunder, against all persons whomsoever lawfully claiming or to claim the same or any part thereof, for and upon the trusts, terms and conditions contained herein; provided, however, if Grantor shall pay and perform, or cause to be paid and performed the Indebtedness and Obligations in full in accordance with the terms of the Security Documents (hereinafter defined), then this Deed of Trust (exclusive of Grantor’s indemnities contained herein) shall become null and void and be released at Grantor’s request and expense; otherwise, it shall remain in full force and effect.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 1

ARTICLE I

DEFINITIONS AND USAGE

1.01      Definitions.     In addition to any terms defined elsewhere in this Deed of Trust, as used herein the following terms shall have the following defined meanings:

(a)     “Beneficiary” shall mean Inwood National Bank, a national banking association, whose mailing address is 7621 Inwood Road, Dallas, Texas 75209, as well as any subsequent holder or holders of the Note.

(b)      “Code” shall mean the Texas Business and Commerce Code, as now written or as hereafter amended or superseded.

(c)      “Deed of Trust” shall mean the Deed of Trust and Security Agreement evidenced by this document.

(d)     “Event of Default” shall mean any occurrence described in Section 3.01 hereof.

(e)     “Grantor” shall mean the party or parties, whether one or more, first identified in this Deed of Trust by typed or handwritten insertion, whose mailing address is 2805 North Dallas Parkway, Suite 400, Plano, Texas 75093, as well as the successors, assigns, heirs, and legal representatives of such party or parties.

(f)      “Fixtures” shall mean all materials, supplies, equipment, apparatus, and other items now or hereafter attached to, installed in or used (temporarily or permanently) in connection with any of the Improvements (hereinafter defined) or the Land (hereinafter defined), and all renewals, replacements, and substitutions thereof and additions thereto, all of which property and things to the extent permitted by law are hereby declared to be permanent accessions to the Land.

(g)     “Governmental Authority” shall mean any and all governmental or quasi-governmental entities of any nature whatsoever, whether federal, state, county, district, city or otherwise, and whether now or hereafter in existence.

(h)     “Impositions” shall mean any required insurance, taxes, assessments, any easement, license or agreement maintained for the benefit of the Property, including leasehold payments or ground rents, if any, and any interest, costs or penalties with respect thereto, of any nature whatsoever which may now or hereafter be assessed, levied or imposed upon the Property or the ownership, use, occupancy or enjoyment thereof.

(i)       “Improvements” shall mean any and all buildings, parking areas and other improvements, and any and all additions, alterations, or appurtenances thereto, now or at any time hereafter placed or constructed upon the Land or any part thereof.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 2

(j)      “Indebtedness” shall mean the principal, interest, and all other amounts due under the Note (hereinafter defined) or secured by this Deed of Trust and the other Security Documents.

(k)     “Land” shall mean the real estate (or interest therein) described in Exhibit “A” attached hereto and incorporated herein by this reference and, subject to the Permitted Exceptions described in Exhibit “B” attached hereto and incorporated herein by this reference, all Improvements and Fixtures, and all rights, titles and interests appurtenant thereto.

(l)      “Loan Agreement” shall mean that certain Loan Agreement of even date herewith, entered into by and between, among others, Grantor, and Green Brick Partners, Inc., a Delaware corporation, as borrower (“Borrower”), and Beneficiary, as Lender.

(m)    “Legal Requirements” shall mean any and all of the following that may now or hereafter be applicable to Grantor or the Property: (i) judicial decisions, statutes, rulings, rules, regulations, permits, certificates or ordinances of any Governmental Authority having jurisdiction over the Grantor or the Property; and (ii) restrictions of record.

(n)     “Note” shall mean that certain Revolving Line of Credit even date herewith executed by Borrower, as maker, payable to the order of Beneficiary, in the aggregate principal amount of FIFTY MILLION AND 00/100 DOLLARS ($50,000,000.00), and payable as therein provided, and all extensions, renewals, and modifications thereof, and all other notes given in substitution therefor.

(o)     “Obligations” shall mean any and all of the covenants, warranties, representations and other obligations (other than to repay the Indebtedness) made or undertaken by Grantor or Borrower under the Security Documents or Legal Requirements.

(p)     “Permitted Exceptions” shall mean, (i) if any, the liens, encumbrances, security interests, easements, intrusions, reservations, and adverse claims affecting the Property as set forth in Exhibit “B” attached hereto and incorporated herein by this reference, (ii) the lien and security interest created by this Deed of Trust and any other lien against the Land in favor of Beneficiary; and (iii) the matters, if any, set forth as exceptions on Schedule B of any title insurance policy issued in connection with the transaction described in this Deed of Trust or the Loan Agreement.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 3

(q)     “Property” shall mean the Land (including all minerals thereon and thereunder), Improvements, and Fixtures, together with all or any part of and any interest in the following: (i) rights, privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances in any way pertaining thereto, and rights, titles, and interests of Grantor in and to any bed of any stream, creek, or waterway, streets, roads, alleys, strips of land adjoining the Land or any part thereof, and all rights of ingress and egress to the Land; (ii) additions, substitutions, replacements and revisions thereof and thereto and all reversions and remainders therein; and (iii) all leases, rents, royalties, oil and gas rights and profits, water rights, in any manner now or hereafter a part of or relating to the Land.

(r)      “Security Documents” shall mean the Note, this Deed of Trust, the Loan Agreement, and all other instruments, documents, or other writings now or hereafter executed by Grantor or Borrower pertaining to or as security for the payment of the Indebtedness or the performance of the Obligations.

(s)     “Trustee” shall mean the party identified second in this Deed of Trust by typed or handwritten insertion; and his, its or their substitutes, successors and assigns.

1.02 Context and Usage. Whenever the context hereof requires, reference in this Deed of Trust to the singular number shall include the plural, and likewise the plural shall include the singular; words denoting sex shall be construed to include the masculine, feminine and neuter, where appropriate; and specific enumeration shall not exclude the general, but shall be considered as cumulative.

ARTICLE II

REPRESENTATIONS, WARRANTIES, COVENANTS

AND OTHER AGREEMENTS OF GRANTOR

2.01      Representations, Warranties, Covenants, and other Agreements of Grantor. Grantor and Borrower, as applicable, unconditionally represents, warrants, covenants, and agrees that:

(a)     The Obligations set forth in the Security Documents are legal, valid, and binding on Grantor and Borrower, as applicable, in accordance with their terms, and no offsets or defenses exist against Beneficiary in favor of Grantor or Borrower which would in any way lessen or invalidate Grantor’s or Borrower’s liability under the Security Documents or the Indebtedness.

(b)     The execution and delivery of, and performance under, the Security Documents are within Grantor’s and Borrower’s authority and powers.

(c)     Grantor has good and indefeasible title to the Land, Improvements, and Fixtures, free and clear of any liens, encumbrances, security interests, easements, or adverse claims except for those Permitted Exceptions, if any, set forth in Exhibit “B”, attached hereto. This Deed of Trust shall constitute a valid, subsisting first lien on the Land, Improvements, and Fixtures, all in accordance with the terms hereof.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 4

(d)     Borrower will duly and punctually: (i) pay the Indebtedness, as and when called for in the Security Documents; (ii) perform all of its Obligations, in full, on or before the date or dates same are to be performed; and (iii) cause each of the Impositions to be paid and discharged not later than the due dates thereof and furnish Beneficiary with evidence of such payment.

(e)     Grantor (and, to the extent within Borrower’s control, Borrower) will promptly and fully comply with all present and future Legal Requirements and cause all Improvements, included or to be included in the Property, to comply with all Legal Requirements.

(f)      Grantor will use commercially reasonable efforts to maintain, preserve, and keep the Property in condition customary in the single-family development industry and will make, to the extent applicable, any necessary repairs, replacements, additions, improvements and alterations thereof and thereto, both structural and non-structural, which are necessary to keep the Property in such condition.

(g)     To the extent that any vertical improvements are constructed on the Property, Grantor will keep the Property insured against loss or damage by fire, explosion, windstorm, hail, tornado, flood (if the Property is located in an identified “flood hazard area”, in which flood insurance has been made available pursuant to the National Flood Insurance Act of 1968), and other hazards by policies of fire and extended coverage and Grantor shall obtain and maintain such other insurance coverage as Beneficiary shall reasonably require. The insurance carriers providing such insurance shall be chosen by Grantor subject to Beneficiary’s approval, which shall not be unreasonably withheld.

(h)     Either Grantor or Borrower will deliver to Beneficiary true and correct copies of the original policies evidencing such insurance as specified in Section 2.01(f) above and any additional insurance which shall be taken out upon the Property and receipts evidencing the payment of all premiums, and certificates evidencing renewals of all such policies of insurance shall be delivered to Beneficiary at least ten (10) days before any such insurance shall expire; and that any such policies shall be payable to Beneficiary as its interest may appear, pursuant to a mortgagee clause attached which shall be satisfactory to Beneficiary, and shall provide for at least ten (10) days prior written notice to Beneficiary prior to cancellation of such policies. In the event of foreclosure, of this Deed of Trust, or other transfer of title to Property in extinguishment in whole or in part of the Indebtedness, all right, title and interest of Borrower and/or Grantor in and to any such policies then in force concerning the Property and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Beneficiary in the event of such transfer. In case of any insured loss under any such policies, Beneficiary, at its option, shall be entitled to receive and retain the proceeds of any such insurance policies, applying the same upon the Indebtedness or to apply such proceeds to the repair or restoration of the Improvements.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 5

(i)      Upon Beneficiary’s request, but only after an Event of Default has occurred and is continuing, Borrower will deposit with Beneficiary, each month in advance, a monetary sum estimated by Beneficiary to equal, on a monthly basis, all or such portion of the Impositions as Beneficiary may reasonably require. If such monthly deposits are being made, then, at least thirty (30) days prior to the date on which any tax or insurance premium must be paid to prevent delinquency thereof, Borrower will, on request of Beneficiary, deliver to Beneficiary, a statement or statements showing the amount of the tax or premium required to be paid, and the concern or authority to which same is payable, and will, at the same time, deposit with Beneficiary such amount as will, when added to the amount of such impounds and reserves previously deposited with Beneficiary and then remaining available for that purpose, be sufficient to pay such insurance or tax obligations. If such monthly deposits are being made, then Beneficiary shall apply all or any of the foregoing deposits in the payment of such insurance, tax, or other Impositions. Beneficiary shall not be required to pay Borrower any interest or earning on any of the foregoing deposits. As additional security hereunder, Borrower hereby assigns to Beneficiary all impounds or reserve accounts for Impositions and any unexpired insurance with respect to the Property. Upon an Event of Default hereunder, Beneficiary may at any time, without notice, apply the same as provided in Section 3.07 below.

(j)      Grantor will give prompt written notice to Beneficiary of any condemnation proceeding or casualty loss affecting the Property and in each such instance, afford Beneficiary an opportunity to participate in any such proceeding or in the settlement of any awards thereunder.

(k)     Grantor will promptly pay all debts and liabilities of any character related to the Property including, without limitation, all debts and liabilities for labor, material and equipment incurred in the construction, rehabilitation and improvement of the Property, or any part thereof, and will complete in a good and workmanlike manner any Improvements that may be constructed or repaired thereon.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 6

(k)     If the validity or priority of this Deed of Trust or of any rights, titles, liens or interests created or evidenced hereby with respect to the Property or any part thereof shall be endangered or questioned or shall be attacked directly or indirectly or if any legal proceedings are instituted against Grantor with respect thereto, Grantor will promptly give written notice thereof to Beneficiary and at Grantor’s own cost and expense will use commercially reasonable efforts to endeavor to cure any defect that may be developed or claimed, and will take all necessary and proper steps for the defense of such legal proceedings including, but not limited to, the employment of counsel, the prosecution or defense of litigation and the release or discharge of all adverse claims, and the Trustee and Beneficiary, or either of them (whether or not named as parties to legal proceedings with respect thereto) are hereby authorized and empowered to take such additional steps as in their reasonable judgment and discretion may be necessary or proper for the prosecution or defense of any such legal proceedings including, but not limited to, the employment of independent counsel, the prosecution or defense of litigation and the compromise or discharge of any adverse claims made with respect to the Property, and all reasonable and necessary expenses so incurred of any kind and character shall be a demand obligation owing by Grantor and shall bear interest from the date of expenditure until paid at the highest rate of interest which may legally be contracted for under the laws of the State of Texas, and shall be secured by the lien and security interest evidenced by this Deed of Trust, and the party incurring such expenses shall be subrogated to all rights of the person receiving such payment.

(l)      Grantor will defend and hold Beneficiary harmless from, any action, proceeding or claim affecting the Property or the Security Documents or the lien or security interest created thereby except to the extent otherwise provided herein. Further, Grantor will notify Beneficiary, in writing, promptly, of the commencement of any legal proceedings affecting the Property, or any part thereof, and will take all commercially reasonable action to preserve Beneficiary’s rights affected thereby; and Beneficiary may, at its election, take such action in behalf and in the name of Grantor, and at Grantor’s expense, and all reasonable and necessary expenses so incurred of any kind and character shall be a demand obligation owing by Grantor and shall bear interest from the date of expenditure until paid at the highest rate of interest which may legally be contracted for under the laws of the State of Texas, and shall be secured by the lien and security interest evidenced by this Deed of Trust, and the party incurring such expenses shall be subrogated to all rights of the person receiving such payment.

(m)    Grantor agrees that Beneficiary and its authorized agents, attorneys, representatives, and employees, may at all reasonable times and intervals, enter upon and inspect the Property after notice to Grantor and provided that such inspections do not unreasonably interfere with Grantor’s operations on the Property.

(n)     Grantor will not use or occupy, or permit any use or occupancy of the Property in any manner which violates any Legal Requirement; may be dangerous; constitutes a public or private nuisance; or makes void or voidable any insurance on the Property.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 7

(o)     Grantor will not, without the prior written consent of Beneficiary: (i) create, place or permit to be created or placed, or allow to remain, any mortgage, pledge, lien (statutory, constitutional or contractual), security interest, encumbrance or charge, or conditional sale or other title retention agreement, regardless of whether same are expressly subordinate to the liens and security interests of the Security Documents, with respect to the Property; (ii) request change in any zoning ordinance affecting the Property except for zoning changes to single-family residential; (iii) enter into any covenant, contract or other agreement, except in the ordinary course of Grantor’s business, which would materially and adversely affect the use of the Property; or (iv) sell, lease (except in the ordinary course of Grantor’s business) exchange, assign, convey, transfer possession of, or otherwise dispose of, all or any portion of the Property, or any interest therein, but if ownership of the Property or any part thereof or interest therein becomes vested in any person or entity other than Grantor, Beneficiary or any other holder of the Indebtedness may, without notice to Grantor, deal with such successor or successors-in-interest with reference to this Deed of Trust and the Indebtedness in the same manner as with Grantor without in any way discharging Borrower from the Indebtedness or the Obligations. Without limiting the right of Beneficiary to reasonably withhold its consent or to make other requirements prior to granting its consent, Beneficiary may require: (i) evidence reasonably satisfactory to Beneficiary that transferee is credit worthy; and (ii) transferee to execute such written modification and assumption agreements with regard to the Security Documents as Beneficiary shall deem reasonably necessary or desirable, including, but not limited to, provisions increasing the interest rate on the Note. No transfer of the Property, no forbearance by the Beneficiary and no extension of the time for the payment of the Indebtedness or the performance of the Obligations granted by Beneficiary shall release, discharge or affect in any way Borrower’s liability hereunder.

(p)     Neither Borrower nor Grantor will permit: (i) any waste or deterioration of any part of the Property; (ii) any material alterations or additions to the Property, unless in the ordinary course of Grantor’s business; or (iii) any of the Fixtures to be removed at any time from the Land or Improvements, except in the ordinary course of Grantor’s business, unless the removed item is removed temporarily for maintenance and repair or, if removed permanently, is replaced by an article of at least equal suitability and value, and owned by Grantor free and clear of any other lien or security interest.

(q)     Grantor and Borrower will execute and deliver such further instruments and do such further acts as may be necessary or desirable in Beneficiary’s or Trustee’s reasonable opinion, to carry out more effectively the purposes and intent of this Deed of Trust and the Security Documents, and to perfect the rights, titles, liens and security interest herein created or intended to be created and protect the rights, remedies, powers and privileges of Beneficiary hereunder. Further, Grantor and Borrower will, upon request of Beneficiary, promptly correct any defect, error or omission, which may be discovered in the contents of this Deed of Trust, the Note, or the Security Documents, and will execute and deliver any and all additional instruments as may be reasonably requested by Beneficiary or Trustee to correct such defect, error or omission, or to identify any additional properties which are or become subject to this Deed of Trust.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 8

(r)      Borrower will promptly pay and hold Beneficiary harmless from all reasonable attorney’s fees and all other actual, out-of-pocket costs incurred by Grantor or Borrower, or actual, out-of-pocket costs of enforcement incurred by Beneficiary, in connection with the performance of the covenants of this Deed of Trust, or otherwise attributable to or chargeable to Grantor as owner of the Property.

(s)    At all times throughout the term of the Indebtedness made pursuant to and arising out of the Security Documents, Grantor and all of its respective Affiliates (defined below) shall (i) not be a Prohibited Person (defined below), and (ii) be in full compliance with all applicable orders, rules, regulations and recommendations of the Office of Foreign Assets Control (“OFAC”) of the U. S. Department of the Treasury.

The term “Prohibited Persons” shall mean any person or entity: (i) listed in the Annex to, or otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”); (ii) that is owned or controlled by, or acting for or on behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (iii) with whom Beneficiary is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering law, including the Executive Order; (iv) who commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; (v) that is named as a “specially designated national and blocked person” on the most current list published by OFAC at its website, www.ustreas.gov/offices/enforcement/ofac or at any replacement website or other replacement or supplemental official publication of such list; or (vi) who is an Affiliate of or affiliated with a person or entity listed above.

The term “Affiliate” as used herein shall mean, as to any person or entity, any other person or entity that, directly or indirectly, is in control of, is controlled by, or is under common control with such person or entity, or is a director or officer of such person or entity or of an Affiliate of such person or entity. As used herein, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a person or entity, whether through ownership or voting securities or interest, by contract or otherwise.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 9

ARTICLE III

DEFAULT AND REMEDIES

3.01     Events of Default. The term “Event of Default”, as used in this Deed of Trust, shall mean the occurrence at any time and from time to time, of any one or more of the following, subject to any notice and opportunity to cure provisions contained in the Loan Agreement, and, if no notice and opportunity to cure provisions contained in the Loan Agreement shall apply for a default by Grantor hereunder, then Grantor shall have a period of thirty (30) days after Grantor’s receipt of Lender’s written notice to Grantor of such default, provided, however, that if Grantor has commenced, and is continuing to utilize commercially reasonable efforts to, effect a cure, then Grantor shall be entitled to a period of up to ninety (90) days in the aggregate from the date of Grantor’s receipt of such written notice to effect a cure:

(a)     If any portion of the Indebtedness, as and when the same shall become due and payable, shall fail to be paid fully and timely in accordance with the terms of the Note.

(b)     If any of Grantor’s obligations hereunder or under the Loan Agreement shall fail to be discharged fully and timely after the expiration of any applicable notice and opportunity to cure.

(c)     If any representation, warranty or other information, including, without limitation, financial statements, supplied to Beneficiary under this Deed of Trust shall be false, misleading or erroneous in any material respect and in any manner (whether by omission or inclusion).

(d)    If a default, or event of default, occurs under the Loan Agreement (subject to any applicable notice and opportunity to cure provision).

3.02     Remedies Upon Default. To the fullest extent permitted in equity or at law, by statute or otherwise, if an Event of Default shall occur, Beneficiary, at Beneficiary’s sole election and by or through the Trustee or otherwise, may exercise any or all of the remedies described below. Prior to exercising any remedies described below for the occurrence of an Event of Default, Grantor and Borrower shall be entitled to all notice and cure rights as provided for in the Loan Agreement. If Borrower fails to cure such Event of Default within the applicable time period as provided for in the Loan Agreement, then Beneficiary shall have the right to exercise its remedies as provided herein.

Beneficiary’s remedies under this Section include the following:

(a)      Declare all unpaid amounts under the Note and any other unpaid portion of the Indebtedness immediately due and payable, without further notice, notice of intent to accelerate maturity, notice of acceleration of maturity, presentment, protest, demand or action of any nature whatsoever (each of which is hereby expressly waived by Grantor and Borrower), whereupon the same shall become immediately due and payable.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 10

(b)     Enter upon the Property and take exclusive possession thereof, and, if necessary to obtain such possession, Beneficiary may invoke any and all legal remedies to dispossess Grantor or any other persons, including specifically one or more actions for forcible entry and detainer, trespass to try title or writ of restitution.

(c)      Hold, lease, manage, operate or otherwise use or permit the use of the Property, either itself or by other persons, firms or entities, in such manner, for such time and upon such other terms as Beneficiary may reasonably deem prudent under the circumstances (making such repairs, alterations, additions and improvements thereto and taking such other action from time to time as Beneficiary shall reasonably deem necessary or desirable), and apply all rents collected in connection therewith in accordance with the provisions of Section 3.07 below.

(d)     Sell or offer for sale the Property in such portions, order and parcels as Beneficiary may determine, with or without having first taken possession of same, to the highest bidder for cash at public auction. Such sale shall be made at the courthouse door of the county where the Land is situated (or if the Land is situated in more than one county, the Property shall be sold at the courthouse door of any of such counties as designated in the notices of sale provided for herein) on the first Tuesday of any month between 10:00 a.m. and 4:00 p.m. after giving adequate legal notice of the time, place and terms of sale, by posting or causing to be posted written or printed notices thereof for at least twenty-one (21) consecutive days preceding the date of said sale at the courthouse door of the foregoing county and, if the Land is situated in more than one county, one notice shall be posted at the courthouse door of each county in which the Land is situated, and by Beneficiary serving written notice of such proposed sale on each debtor obligated to pay the Indebtedness, at least twenty-one (21) days preceding the date of said sale by certified mail at the most recent address for such parties in the records of Beneficiary, or by accomplishing all or any of the aforesaid in such manner as permitted or required by Section 51.002, Texas Property Code (as now written or as hereafter amended or superseded) relating to the sale of collateral after default by a debtor or by any other applicable present or subsequent laws. At any such sale: (i) Trustee shall not be required to have physically present, or to have constructive possession of, the Property (Grantor hereby covenanting and agreeing to deliver to Trustee any portion of the Property not actually or constructively possessed by Trustee immediately upon demand by Trustee) and the title to and right of possession of any such property shall pass to the purchaser thereof as completely as if the same had been actually present and delivered to purchaser at such sale; (ii) each instrument of conveyance executed by Trustee shall contain a special warranty of title, binding upon Grantor; (iii) each and every recital contained in any instrument of conveyance made by Trustee shall presumptively establish the truth and accuracy of the matters recited therein, including, without limitation, nonpayment of the Indebtedness, advertisement and conduct of such sale in the manner provided herein and otherwise by law and by appointment of any successor Trustee hereunder; (iv) any and all prerequisites to the validity of such sale shall be conclusively presumed to have been performed; (v) the receipt of Trustee or of such other party making the sale shall be a sufficient discharge to the purchaser for his purchase money and no such purchaser, or his assigns or personal representatives, shall thereafter be obligated to see to the application of such purchase money or be in any way answerable for any loss, misapplication or nonapplication thereof; (vi) Grantor shall be completely and irrevocably divested of all of its right, title, interest, claim and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against Grantor, and against any and all other person claiming or to claim the property sold or any part thereof by, through or under Grantor; and (vii) Beneficiary may be a purchaser at any such sale. Should the Property be sold in one or more parcels as permitted by this subsection, the right of sale arising out of any Event of Default shall not be exhausted by any one or more such sales, but other and successive sales may be made until all of the Property has been sold or until the Indebtedness has been fully satisfied.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 11

(e)      Upon, or at any time after, commencement of foreclosure of the lien and security interest provided for herein, or any legal proceedings hereunder, make application to a court of competent jurisdiction as a matter of strict right and without notice to Grantor or regard to the adequacy of the Property for the repayment of the Indebtedness, for appointment of a receiver of the Property and Grantor does hereby irrevocably consent to such appointment. Any such receiver shall have all the usual powers and duties of receivers in similar cases, including the full power to rent, maintain, and otherwise operate the Property upon such terms as may be approved by the court, and shall apply such rents in accordance with the provisions of Section 3.07 below.

(f)       Exercise any and all other rights, remedies and recourses granted under this Deed of Trust or the Loan Agreement.

3.03     Remedies Non-Exclusive. All rights, remedies and recourses of Beneficiary granted in the Security Documents or otherwise available at law or equity:

(a)      Shall be cumulative and concurrent;

(b)     May be pursued separately, successively or concurrently against Grantor or against the Property, at the sole discretion of Beneficiary;

(c)      May be exercised as often as occasion therefor shall arise, it being agreed by Grantor that the exercise or failure to exercise any of same shall in no event be construed as a waiver or release thereof or of any other right, remedy or recourse; and

(d)      Shall be non-exclusive.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 12

3.04     Non-Waiver. Beneficiary may release, regardless of consideration, any part of the Property without, as to the remainder, in any way impairing, affecting, subordinating or releasing the lien or security interests evidenced by the Security Documents. For payment of the Indebtedness, Beneficiary may resort to any of the security therefor in such order and manner as Beneficiary may elect. No security heretofore, herewith or subsequently taken by Beneficiary shall in any manner impair or affect the security given by the Security Documents and all security shall be taken, considered and held as cumulative.

3.05     Waiver of Rights by Grantor. Grantor and Borrower, as applicable, each, hereby irrevocably and unconditionally waives and releases:

(a)      All benefit that might accrue to Grantor by virtue of any present or future law exempting the Property from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment;

(b)     All notices of any Event of Default or of Trustee’s or Beneficiary’s exercise of any right, remedy or recourse except as specifically provided for under the Security Documents;

(c)      Any right to a marshalling of assets for a sale in inverse order of alienation; and

(d)     Any right of offset, or other claim whatsoever which may now or hereafter exist against Beneficiary or in favor of Grantor and no such right or claim shall in any way be used by Grantor to lessen, impair or defeat Beneficiary’s rights hereunder.

3.06     Adjournment of Sale. In case Beneficiary shall have proceeded to invoke any right, remedy or recourse permitted under the Security Documents and shall thereafter elect to discontinue or abandon same for any reason, Beneficiary shall have the unqualified right so to do and, in such event, Grantor, Borrower, and Beneficiary shall be restored to their former positions with respect to the Indebtedness, the Obligations, the Security Documents, the Property and otherwise, and the rights, remedies, recourses and powers of Beneficiary shall continue as if same had never been invoked.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 13

3.07     Application of Proceeds. Any proceeds of any sale of, and any rents or other amounts generated by the holding, leasing, operation or other use of the Property shall be applied in the following order of priority:

(a)      First, to the payment of all reasonable costs and expenses of taking possession of the Property and of holding, leasing, operating, using, repairing, improving and selling the same, including, without limitation, reasonable fees of the attorneys retained by Beneficiary or Trustee; reasonable fees of any receiver or accountants; recording and filing fees; court costs; costs of advertisement, and the payment of any and all Impositions, liens, security interest of this Deed of Trust (except those to which the Property has been sold subject to and without in any way implying Beneficiary’s consent to the creation thereof);

(b)      Second, to the payment of all accrued and unpaid interest due on the Indebtedness;

(c)      Third, to the payment of the unpaid principal balance of the Indebtedness;

(d)     Fourth, to the payment of all amounts, other than unpaid principal balance of the Indebtedness, which may be due to Beneficiary under the Security Documents, together with interest thereon as provided therein;

(e)      Fifth, to Grantor.

3.08     Additional Remedies. In addition to the remedies set forth in this Article III, upon the occurrence of an Event of Default the Beneficiary and Trustee shall, in addition, have available to them the remedies set forth in Article IV below, as well as all other remedies available to them at law or in equity.

ARTICLE IV

SECURITY AGREEMENT

4.01     Grant of Security Interest. This Deed of Trust shall also constitute and serve as a security agreement on personal property within the meaning of, and shall constitute a first and prior security interest under, Chapter 9 of the Code, with respect to the Fixtures, and all existing and future rents, leases and rentals thereunder, issues, profits, income, condemnation awards (inclusive of all amounts paid in connection with any public taking), insurance proceeds and all proceeds of the foregoing, plans and specifications for the Improvements, all of Grantor’s rights under any licenses, permits, certificates, documents, and general intangibles (including trade names and symbols used in connection with the Land or the Improvements), waste water, fresh water and other utility capacity and facilities available to or allocated to the Land or the Improvements (hereinafter collectively referred to as the “Personal Property”) arising out of or in connection with the Property, all existing and future equipment, machinery, furniture and furnishings, fixtures and trade fixtures used in connection with the Property. To this end, and without limiting any of the provisions of this Deed of Trust, Grantor, as Debtor (and referred to sometimes herein as “Debtor”) has Granted, Bargained, Conveyed, Assigned, Transferred and Set Over and by these presents does Grant, Bargain, Convey, Assign, Transfer and Set Over unto Beneficiary, as Secured Party (and referred to sometimes herein as “Secured Party”), a first and prior security interest in all of Grantor’s right, title and interest in and to the Fixtures and the Personal Property to secure the full and timely payment of the Indebtedness and performance of the Obligations.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 14

4.02     Additional Documents. Grantor agrees to execute and deliver to Beneficiary, in form and substance satisfactory to Beneficiary, such financing statements and such further assurances as Beneficiary may, from time to time, reasonably consider necessary to create, perfect and preserve the security interest herein granted, and Beneficiary may cause such statements and assurances to be recorded and filed, at such times and places as may be required or permitted by law to create, perfect and preserve such security interest.

4.03     Rights of Trustee. Beneficiary as well as Trustee on Beneficiary’s behalf, shall have all the rights, remedies and recourses with respect to the Fixtures afforded a “Secured Party” by Chapter 9 of the Code, in addition to, and not in limitation of, the other rights, remedies and recourses afforded Beneficiary and/or Trustee by the Security Documents.

4.04     Exculpation of Beneficiary and Trustee. The security interest herein granted shall not be deemed or construed to constitute Trustee or Beneficiary as a party in possession of the Property or to obligate Trustee or Beneficiary to lease the Property, or to take any action, incur any expenses or perform any obligation whatsoever under any lease or otherwise.

4.05     Additional Remedies in Event of Default. Upon the occurrence of an Event of Default as provided in Section 3.01 of this Deed of Trust, and at any time thereafter:

(a)      Trustee or Beneficiary shall have, with regard to the Fixtures, the remedies provided in this Deed of Trust and in the Code (no such remedy granted by the Code being excepted, modified or waived herein). Trustee or Beneficiary may use his or its reasonable discretion in exercising its rights and electing its remedies; provided, however, all actions shall be in compliance with the standards of the Code, where applicable and required. For purposes of the notice requirements of the Code and this Article IV, it is agreed that notice sent or given not less than ten (10) calendar days prior to the taking of the action to which the notice relates, is reasonable notice.

(b)      Trustee or Beneficiary shall be entitled, acting in its sole discretion, to apply the proceeds of any disposition of the Fixtures in the order set forth in Part 5 of Article 9 of the Code, or, if allowed by the Code, in the order set forth in Section 3.07 hereof. If the proceeds are not sufficient to pay the Indebtedness in full, Grantor shall remain liable for any deficiency.

(c)      Notwithstanding anything herein to the contrary, Beneficiary, or the Trustee acting on Beneficiary’s behalf, may at its option dispose of the Fixtures and other items of personal property covered by this Deed of Trust in accordance with Beneficiary’s rights and remedies in respect of the Land pursuant to the provisions of this Deed of Trust, in lieu of proceeding under the Code.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 15

4.06     Assembling of Personalty, Fixtures, Leases and Rents; Expenses. Beneficiary may require Grantor to assemble the Fixtures and make them available to Beneficiary or Trustee at a place to be designated by Beneficiary that is reasonably convenient to both parties. All reasonable expenses of retaking, holding, preparing for sale, lease or other use or disposition, selling, leasing or otherwise using or disposing of the Fixtures and the like which are incurred or paid by Beneficiary as authorized or permitted hereunder, including also all reasonable attorney’s fees, and all actual, out-of-pocket legal and reasonable expenses and costs, shall be added to the Indebtedness and Grantor shall be liable therefor.

4.07     No Lien on Consumer Goods. Notwithstanding anything to the contrary contained in this instrument, (a) if the Beneficiary is a state or national bank, and if any person executing this instrument is a “consumer” as defined in Regulation AA of the Board of Governors of the Federal Reserve System, no lien or security interest created or evidenced by this instrument shall extend to, cover or affect “household goods” as defined in Regulation AA of the Board of Governors of the Federal Reserve System; and (b) in all other cases, if any person executing this instrument is a “consumer” as defined in 16 C.F.R. §444.1, no lien or security interest created or evidenced by this instrument shall extend to, cover or affect “household goods,” as defined in 16 C.F.R. §444.1.

ARTICLE V

CONDEMNATION AND OTHER AWARDS

5.01     Condemnation and Other Awards. All judgments, decrees or awards now or hereafter made for injury or damage to the Property, or awards, settlements or other compensation now or hereafter made by any Governmental Authority, including those for any variation of, or change of grade in, any streets affecting the Land or the Improvements, are hereby assigned in their entirety to Beneficiary, who may apply the same to the Indebtedness secured hereby or in such manner as Beneficiary may elect, and 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.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 16

ARTICLE VI

THE TRUSTEE

6.01     Exculpation of Trustee. Trustee shall not be liable for any error of judgment or act done by Trustee in good faith, or be otherwise responsible or accountable to Grantor under any circumstances whatsoever, nor shall Trustee be personally liable in case of entry by him, or anyone entering by virtue of the powers herein granted, upon the Property for debts contracted or liability or damages incurred in the management or operations of the Property, Trustee shall have the right to rely on any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith to be genuine. Trustee shall be entitled to reimbursement for reasonable expenses incurred by him in the performance of his duties hereunder. Grantor will, from time to time, reimburse Trustee for, and save him harmless against, any and all liability and actual, out-of-pocket expenses which may be incurred by him in the performance of his duties.

6.02     Holding of Funds. All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated in any manner from any other moneys (except to the extent required by law), and Trustee shall be under no liability for interest on any money received by him hereunder.

6.03     Substitute Trustee. Trustee may resign at any time with or without notice. If Trustee shall die, resign or become disqualified from acting in the execution of this trust or shall fail or refuse to execute the same when requested by Beneficiary so to do, or if, for any reason, Beneficiary shall prefer to appoint a substitute trustee to act instead of the aforenamed Trustee, Beneficiary shall have full power to appoint a substitute trustee and, if preferred, several substitute trustees in succession without any formality whatsoever other than an appointment and designation in writing signed by Beneficiary or its agent or officer (whose authority shall be presumed) which substitute trustee or trustees shall succeed to all the estates, rights, powers and duties of the aforenamed Trustee.

6.04     Rights of Substitute Trustee. Any new Trustee appointed pursuant to any of the provisions hereof shall, without any further act, deed or conveyance, become vested with all the estates, properties, rights, powers and trust of its or his predecessor in the rights hereunder with like effect as if originally named as Trustee herein; but nevertheless, upon the written request of Beneficiary or of the successor Trustee, the Trustee ceasing to act shall execute and deliver an instrument transferring to such successor Trustee, upon the trusts herein expressed, all the estates, properties, rights, powers and trusts of the Trustee so ceasing to act, and shall duly assign, transfer and deliver any of the property and money held by such Trustee to the successor Trustee so appointed in his place.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 17

ARTICLE VII

MISCELLANEOUS

7.01     Survival of Obligations. Each and all of the Obligations shall survive the execution and delivery of the Security Documents, and the consummation of the loan called for therein, and shall continue in full force and effect until the Indebtedness shall have been paid in full.

7.02     Additional Documents. Grantor or Borrower, upon the request of Trustee or Beneficiary, shall execute, acknowledge, deliver and/or file such further instruments and do such further acts as may be reasonably necessary, desirable or proper to carry out more effectively the purposes of the Security Documents and to subject to the liens and security interests thereof any property intended by the terms thereof to be covered thereby, including specifically, but without limitation, any renewals, additions, substitutions, replacements, or appurtenances to the then Property. Borrower will pay all such recording, filing, re-recording, and refiling taxes, and reasonable fees and other charges, including those for security interest searches.

7.03     Notices. All notices or other communications required or permitted to be given or delivered pursuant to this Deed of Trust (except for notice of a foreclosure sale which shall be given in the manner set forth in Section 3.02 hereof) shall be in writing and shall be deemed properly given and/or delivered upon deposit in the United States mail, postage prepaid, registered or certified with return receipt requested, or upon actually delivering same in person or by duly appointed agent to the intended addressee or upon sending a prepaid telegram. For purposes of notice, the addresses of the parties shall be as set forth in the opening recital or in the Definitions hereinabove; provided, however, that either party shall have the right to change its address for notice hereunder to any other location within the continental United States by giving thirty (30) days prior notice to the other party in the manner set forth hereinabove.

7.04     Non-Waiver. Any failure by Trustee or Beneficiary to insist, or any election by Trustee or Beneficiary not to insist, upon strict performance by Grantor of any of the terms, provisions or conditions of the Security Documents shall not be deemed to be a waiver of same or of any other term, provision or condition thereof, and Trustee or Beneficiary shall have the right at any time or times thereafter to insist upon strict performance by Grantor of any and all of such terms, provisions and conditions.

7.05     Additional Advances or Expenditures by Beneficiary. If Grantor or Borrower shall fail, refuse or neglect to make any payment or perform any act required by the Security Documents, then at any time thereafter, and without notice to or demand upon Grantor and without waiving or releasing any other right, remedy or recourse Beneficiary may have because of same, Beneficiary may (but shall not be obligated to) make such payment or perform such act for the account of and at the expense of Borrower, and shall have the right to enter the Property for such purpose and to take all such action thereon and with respect to the Property as it may reasonably deem necessary or appropriate. Borrower shall indemnify Beneficiary for all actual, out-of-pocket losses, expenses, damage, claims and causes of action, including reasonable attorney’s fees, incurred or accruing by reason of any acts performed by Beneficiary pursuant to this Section 7.05 or by reason of any other provision in the Security Documents. All sums paid by Beneficiary pursuant to this Section 7.05 and all other sums expended by Beneficiary to which it shall be entitled to be indemnified, together with interest thereon at the maximum rate of interest allowed by applicable law from the date of such payment or expenditure, shall constitute additions to the Indebtedness; shall be secured by the Security Documents; and shall be paid by Borrower to Beneficiary upon demand.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 18

7.06     Heirs, Successors and Assigns. All Obligations contained in the Security Documents are intended by the Parties to be, and shall be construed as, covenants running with the Property. Further, all of the terms of the Security Documents shall apply to, be binding upon, and inure to the benefit of the parties thereto, their respective successors, assigns, heirs and legal representatives, and all other persons claiming by, through or under them.

7.07     Partial Invalidity. The Security Documents are intended to be performed in accordance with, and only to the extent permitted by, all applicable Legal Requirements. If any provision of any of the Security Documents or the application thereof to any person or circumstances shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of the instrument in which such provision is contained nor the application of such provision to other persons or circumstances nor the other instruments referred to hereinabove shall be affected thereby, but rather shall be enforced to the greatest extent permitted by law.

7.08     Lawful Interest. All agreements between and among Grantor, Borrower, and Beneficiary are expressly limited so that in no contingency or event whatsoever whether by reason of advancement of the proceeds of the Note, acceleration of maturity of the unpaid principal balance thereof, or otherwise, shall the amount contracted for, charged, collected, paid or agreed to be paid to Beneficiary for the use, forbearance or detention of the money to be advanced hereunder exceed the highest lawful rate permissible under applicable law. If, from any circumstances whatsoever, fulfillment of any provision of the Security Documents, or any other agreement referred to herein, at the time performance of such provisions shall be due, shall involve transcending the maximum limit of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto, then, ipso facto, the obligation to be fulfilled shall be reduced to the maximum limit of such validity, and if from any circumstance, Beneficiary shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall: (a) be applied to the reduction of unpaid principal of Indebtedness secured by the Security Documents; or (b) be refunded to the payor of such amount and not applied to the payment of interest. This provision shall control every other provision of all agreements including but not limited to the Security Documents between or among, Grantor, Borrower, and Beneficiary.

7.09     Subsequent Laws. In the event of the passage after the date of this Deed of Trust of any applicable law changing in any way the laws for the taxation of deeds of trust and/or the debts secured thereby so as to affect this Deed of Trust, Beneficiary shall have the right, at Beneficiary’s option, and if Grantor fails to pay the tax owed within fifteen (15) days after receipt of written notice and demand for payment from Beneficiary, to declare the Indebtedness immediately due and payable.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 19

7.10     Entire Agreement; Amendment. The Security Documents contain the entire agreements between the parties relating to the subject matter hereof and thereof and all prior agreements relative thereto which are not contained herein or therein are terminated. The Security Documents may be amended, revised, waived, discharged, released or terminated only by a written instrument or instruments, executed by the party against which enforcement of the amendment, revision, waiver, discharge, release or termination is asserted. Any alleged amendment, revision, waiver, discharge, release or termination that is not so documented shall not be effective as to any party.

7.11     Counterparts. This Deed of Trust may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute but one instrument.

7.12     Subrogation. If any or all of the proceeds of the Note have been used to extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the extent of such funds so used, the Indebtedness and this Deed of Trust shall be subrogated to all of the rights, claims, liens, titles and interests heretofore existing against the Property to secure the indebtedness so extinguished, extended or renewed and the former rights, claims, liens, titles and interests, if any, are not waived but rather are continued in full force and effect in favor of Beneficiary and are merged with the lien and security interest created herein as cumulative security for the repayment of the Indebtedness and the satisfaction of the Obligations, regardless of whether said indebtedness, rights, claims, liens, title and interests are acquired by Beneficiary by assignment or are released by the holder thereof upon payment.

7.13     Governing Law. The Security Documents shall be governed by and construed according to the laws of the State of Texas and the applicable laws of the United States of America.

7.14     Headings. The article and section entitlements hereof are inserted for convenience of reference only and shall in no way alter, modify or define, or be used in construing, the text of such articles and sections.

7.15     Joint and Several Liability. If Grantor consists of more than one party, the Obligations set forth herein and in the Security Documents shall be the joint and several obligations of each of such parties.

7.16     Other Security. The security herein and hereby provided shall not affect, or be affected by, any other or further security heretofore or hereafter taken to secure the Indebtedness. Beneficiary may release, without notice, any part of the Property, or other security heretofore or hereafter taken to secure the Indebtedness, or any person liable for all or part of the Indebtedness, and without in any way affecting the lien hereof as to the part, or parts, of the Property so retained, and no creditor of Grantor, nor any other person, firm, or corporation, shall have any objection thereto, or right to hold Beneficiary to account therefor, nor shall the lien of this Deed of Trust be adversely affected in any manner by any such release.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 20

7.17     Fixture Filing. This Deed of Trust shall be effective as a financing statement filed as a fixture filing with respect to all Fixtures and is to be filed for record in the real property records in the Office of the County Clerk for the county or counties in which the Land is situated.

7.18     Partial Release. Beneficiary will agree to partial releases of the lien granted herein by Grantor against portions of the Property in accordance with the terms of the Loan Agreement, subject to and conditioned upon satisfaction of each of the requirements contained in the Loan Agreement.

7.19     Controlling Document. To the extent anything contained herein is inconsistent with or contrary to the terms of the Loan Agreement, the terms of the Loan Agreement shall control.

THE REMAINDER OF THE PAGE IS BLANK

SIGNATURE PAGE FOLLOWS

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 21

EXECUTED to be effective as of the 30th day of July, 2015.

GRANTOR:

JBGL Exchange, LLC,

a Texas limited liability company

By:	/s/ James R. Brickman
	James R. Brickman, Manager

ALL OBLIGATIONS AND AGREEMENTS

APPLICABLE TO BORROWER IN THIS

DEED OF TRUST ARE HEREBY ACKNOWLEDGED

AND AGREED TO FOR ALL PURPOSES:

Green Brick Partners, Inc.,

a Delaware corporation

By:	/s/ James R. Brickman
	James R. Brickman Chief Executive Officer

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 22

STATE OF TEXAS	§
	§
COUNTY OF DALLAS	§

THIS INSTRUMENT was acknowledged before me this 29th day of July, 2015, by James R. Brickman, Manager of JBGL Exchange, LLC, a Texas limited liability company, on behalf of said entity.

/s/ John E. Hampton

Notary Public, State of Texas

Printed Name:

Commission Expires:

STATE OF TEXAS	§
	§
COUNTY OF DALLAS	§

THIS INSTRUMENT was acknowledged before me this 29th day of July, 2015, by James R. Brickman, Chief Executive Officer of Green Brick Partners, Inc., a Delaware corporation, on behalf of said entity.

/s/ John E. Hampton

Notary Public, State of Texas

Printed Name:

Commission Expires:

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 23

AFTER RECORDING RETURN TO:

Scott D. Osborn

Adair, Morris & Osborn, P.C.

325 N. St. Paul Street, Suite 4100

Dallas, Texas 75201

THE TRUSTEE’S ADDRESS IS:

c/o Scott D. Osborn

Adair, Morris & Osborn, P.C.

325 N. St. Paul Street, Suite 4100

Dallas, Texas 75201

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 24

EXHIBIT “A”

(Land)

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 25

EXHIBIT A (EXCHANGE 3 AND 6)

TRACT 3:

Lots1thru30, inBlockA,Lots1thru 5and11thru 49,inBlock B,Lots1thru15,inBlock C,Lots 37thru 62andLot 66, in Block C, Lots 1thru 5and Lot 9,in Block D,Lots1,2, and 6thru 18,in Block E,Lots 1thru 10,inBlock F,Lots 1thru4, 6and 8 thru 12and 15, in Block GofTheVillageatTwinCreeks PhaseOne,anaddition to theCityof Allen, Collin County, Texas, according to the Map or Plat thereof recorded in/under Clerk’s File No. 2014-507, Map/PlatRecords,CollinCounty, Texas.

TRACT 6:

BEINGatractoflandsituatedintheCatherineParsonsSurvey,AbstractNumber711, CollinCounty,Texas andbeinga portion ofTract10andTract 11 ofthelandconveyedto BossyBootsHoldings, LTD. according to thedocumentfiled of recordin Volume5398, Page6447 (File No.2003-0069932), Deed Recordsof Collin County, Texas, saidtract beingmore particularly described as follows:

COMMENCINGatan“X”cutinconcretefoundfortheintersectionofthewestlineof WattersRoadandtheEastlineofBray CentralDrive, forthemost southerly corner of BrayCentralOneAddition,anadditiontothe Cityof Allen,CollinCounty, Texas, according to theplat filedof recordin Cabinet2010,Slide26,PlatRecords ofCollin County, Texas;

THENCE with the southwesterly line of said addition and the above mentioned Eastline of said Bray Central Drive the following four (4) courses and distances:

North50°32’07”West,adistanceof224.79feettoa1/2”ironrodfoundfora corner;

North55°43’47”West,adistanceof110.45feettoa1/2”ironrodfoundfora corner;

North50°32’07”West,adistanceof131.56feettoapointforacorneratthebeginning of a curve to the right, said curve having a radius of 2376.00 feet, acentral angle of 22° 44” 31” and a chord bearing and distance of North 39° 09’52”

West, 936.91feet;

Withsaidcurvetotherightanarcdistanceof943.08feettoa1/2”ironrodwithyellow plastic cap stamped “DAA” set for the most westerly northwest corner of the above mentioned Bray Central One Addition, same being the southwestcorner ofthistract and thePOINT OF BEGINNING;

THENCEcontinuingwiththeEastlineofsaidBrayCentralDrivethefollowingfour(4) coursesanddistancesasfollows:

Continuingwithsaidcurvetotheright,havingaradiusof2376.00feet,acentral angleof27°24’47”andachordbearinganddistanceofSouth 14°05’13”East, 1125.98 feet;

Withsaidcurveanarcdistanceof1136.79feettoa5/8”ironrodfoundinsaidEast line for a point of tangency and a corner of this tract;

North0°22’49”West,continuingwithsaidEastline,adistanceof1146.11feetto a1/2”ironrodwithyellowplastic cap stamped “DAA”setfora corner of this tract;

North4°48’51”East,adistanceof110.45feettoa1/2” ironrodfoundforacorner of thistract;

North0°22’49”West,adistanceof213.73feettoa1/2”ironrodwithyellow plasticcapstamped“DAA”setfortheNorthwestcornerofthis tractatthe intersection of saidEastline withthe Southline ofExchangeParkway;

THENCEwithsaidSouthlinethefollowingsix(6)courseanddistancesasfollows:

North88°54’49”East,adistanceof24.73feettoa1/2”ironrodwithyellow plasticcapstamped “DAA”setfor acorner ofthistract;

North89°47’41”East,adistanceof140.00feettoa5/8”ironrodfoundfora corner of thistract;

North85°51’02”East,adistanceof145.38feettoa1/2”ironrod foundfora corner of thistract;

North89°47°41”East,adistanceof423.35feettoa5/8”ironrodfoundfora corner of thistract;

North89°44’54”East,adistanceof835.74feettoa5/8”ironrodfoundfora corner of thistract;

South86°29”22”East,adistanceof145.23feettoa5/8”ironrodfoundfora corner of thistract;

North89°47’34”East,adistanceof179.97feettoa1/2”Ironrodwithyellow plasticcapstamped “DAA”setforthe Northeast comerofthistract, atthe intersectionof theabovementionedSouthline withthe West line of theabove mentioned Watters Road;

THENCEwithsaidWestlinethefollowingtwo(2)courseanddistancesasfollows:

South0°14’32”West,adistanceof844.95feettoa1/2”ironrodwithyellow plasticcapstamped “DAA”setforacornerofthis tract;

South0°32’03”West,adistanceof1721.25feettoa1/2” ironrodfoundforthe Southeastcorner of thistractandbeing theNortheastcornerof theabove mentioned Bray Central One Addition;

THENCESouth89° 50’18”West,withthenorthlineofsaidaddition, samebeingtheSouthlineof thistract, a distanceof 1632.24 feet to thePOINTOF BEGINNING and containing 109.79 acres of land, more or less.

SAVE AND EXCEPT: That portion of subject property known as The Village atTwin Creeks Phase One, an addition to the City of Allen, Collin County, Texas, according tothe Map or Plat thereof recorded in/under Clerk’s File No. 2014-507, Map/Plat Records,Collin County,Texas.

EXHIBIT “B”

(Permitted Exceptions)

EXHIBIT “B” (EXCHANGE 3 AND 6)

PERMITTED EXCEPTIONS

1. The following restrictive covenants of record:

Clerk’s File No(s). 2014-925950, 2014-930750, 2014-936290 and 2014-1051090, Real Property Records, Collin County, Texas and under Clerk’s File No. 2014-507, Map/Plat Records, Collin County, Texas. (Tract 3)

Clerk’s File No(s). 1993-73214 and 2009-855790, Real Property Records, Collin County, Texas, (Tracts 3 and 6)

2. Assessments, charges and liens as set forth in the document Entitled: Declaration Recording Date: August 27, 2014

Recording No: under Clerk’s File No(s). 2014-92 5950, 2014-930750,2014-936290 and 2014- 1051090, Real Property Records, Collin County, Texas

Liens and charges as set forth in the above mentioned declaration, Payable to: The Village at Twin Creeks Master Community, Inc.

Tract 3

3. Building lines, easements and other matters as shown or provided for on plat recorded under Clerk’s File No. 2014-507, Map/Plat Records, Collin County, Texas. Tract 3

4. Building lines, easements and other matters as shown or provided for on plat recorded in Volume N, Page 110, Plat Records, Collin County, Texas. Tracts 3 and 6

5. Matters contained in that certain document Entitled: Facilities Agreement

Dated: September 19, 2014

Executed by: JBGL Exchange, LLC and The Village at Twin Creeks Master Community, Inc. Recording Date: September 30, 2014

Recording No: under Clerk’s File No(s). 2014-1064600, Real Property Records, Collin County, Texas

Reference is hereby made to said document for full particulars.

Tract 3

6. Matters contained in that certain document Entitled: Drainage Agreement

Dated: March 5, 2008

Executed by: Bossy Boots Holdings, Ltd., a Texas limited partnership and Exchange Partners, Ltd., a Texas limited partnership, and JBN Junction Partners, Ltd., a Texas limited partnership, and JBN Watters, LLC, a Texas limited liability company Recording Date: March 7, 2008

Recording No: under Clerk’s File No(s). 2008-274900, Real Property Records, Collin County, Texas

Reference is hereby made to said document for full particulars.

Tracts 3 and 6

7. Easement(s) and rights incidental thereto, as granted in a document:

Granted to: Denton County Electric Cooperative, Inc.

Purpose: As provided in said document

Recording Date: March 18, 1953

Recording No: Volume 467, Page 316, Real Property Records, Collin County, Texas

Affects: Tracts 3 and 6

8. Easement(s) and rights incidental thereto, as granted in a document:

Granted to: Allen Management Corporation, a Texas corporation

Purpose: As provided in said document

Recording Date: July 28, 1980

Recording No: Volume 1285, Page 579, Real Property Records, Collin County, Texas

Affects: Tracts 3 and 6

9. Matters contained in that certain document Entitled: Facilities Agreement

Dated: April 25, 1996

Executed by: City of Allen, Texas and Briar Ridge Investments, Inc., a Texas corporation

Recording Date: May 8, 1996

Recording No: under Clerk’s File No(s). 1996-37733, Real Property Records, Collin County, Texas

Reference is hereby made to said document for full particulars.

Tracts 3 and 6

10. Matters contained in that certain document

Entitled: Tree Preservation Dedication and Restrictive Covenant

Dated: June 2, 2009

Executed by: Bossy Boots Holdings, Ltd. Recording Date: July 8, 2009

Recording No: under Clerk’s File No(s). 2009-855790, Real Property Records, Collin County, Texas

Reference is hereby made to said document for full particulars.

Tracts 3 and 6

11. Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Allen

Purpose: As provided in said document

Recording Date: March 31, 2008

Recording No: under Clerk’s File No(s). 2008-374270, Real Property Records, Collin County, Texas

Affects: Tract 6

12. Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Allen

Purpose: As provided in said document

Recording Date: August 21, 2014

Recording No: under Clerk’s File No(s). 2014-900700, Real Property Records, Collin County, Texas

Affects: Tract 6

13. Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Allen

Purpose: As provided in said document

Recording Date: August 21, 2014

Recording No: under Clerk’s File No(s). 2014-900710, Real Property Records, Collin County, Texas Affects: Tract 6

14. Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Allen

Purpose: As provided in said document Recording Date: August 21, 2014

Recording No: under Clerk’s File No(s). 2014-900720, Real Property Records, Collin County, Texas

Affects: Tract 6

EX-10.6

Green Brick Partners, Inc. 8-K

Exhibit 10.6

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

DEED OF TRUST AND SECURITY AGREEMENT

THE STATE OF TEXAS 

KNOW ALL MEN BY THESE PRESENTS:

COUNTY OF DENTON

That the undersigned, JBGL CHATEAU, LLC, a Texas limited liability company, (hereinafter “Grantor” whether one or more), to secure the full and timely payment of the Indebtedness (hereinafter defined) and the performance of the Obligations (hereinafter defined), and in further consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration in hand paid by Beneficiary (hereinafter defined) and Gary L. Tipton, Trustee (hereinafter “Trustee” whether one or more) of Dallas County, Texas, the receipt and legal sufficiency of which is hereby acknowledged by Grantor, has Granted, Bargained, Assigned, Sold, Transferred, and Conveyed, and by these presents does Grant, Bargain, Assign, Sell, Transfer, and Convey, unto Trustee, the Property (hereinafter defined), in trust, however, for the use and benefit of Beneficiary.

TO HAVE AND TO HOLD unto the said Trustee and to his successors and his and their assigns forever, hereby covenanting and agreeing to forever warrant and defend the Property, and every part thereof, unto the said Trustee and to any successor Trustee, and to the assigns of any Trustee hereunder, against all persons whomsoever lawfully claiming or to claim the same or any part thereof, for and upon the trusts, terms and conditions contained herein; provided, however, if Grantor shall pay and perform, or cause to be paid and performed the Indebtedness and Obligations in full in accordance with the terms of the Security Documents (hereinafter defined), then this Deed of Trust (exclusive of Grantor’s indemnities contained herein) shall become null and void and be released at Grantor’s request and expense; otherwise, it shall remain in full force and effect.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 1

ARTICLE I

DEFINITIONS AND USAGE

1.01        Definitions. In addition to any terms defined elsewhere in this Deed of Trust, as used herein the following terms shall have the following defined meanings:

(a)      “Beneficiary” shall mean Inwood National Bank, a national banking association, whose mailing address is 7621 Inwood Road, Dallas, Texas 75209, as well as any subsequent holder or holders of the Note.

(b)     “Code” shall mean the Texas Business and Commerce Code, as now written or as hereafter amended or superseded.

(c)     “Deed of Trust” shall mean the Deed of Trust and Security Agreement evidenced by this document.

(d)     “Event of Default” shall mean any occurrence described in Section 3.01 hereof.

(e)     “Grantor” shall mean the party or parties, whether one or more, first identified in this Deed of Trust by typed or handwritten insertion, whose mailing address is 2805 North Dallas Parkway, Suite 400, Plano, Texas 75093, as well as the successors, assigns, heirs, and legal representatives of such party or parties.

(f)      “Fixtures” shall mean all materials, supplies, equipment, apparatus, and other items now or hereafter attached to, installed in or used (temporarily or permanently) in connection with any of the Improvements (hereinafter defined) or the Land (hereinafter defined), and all renewals, replacements, and substitutions thereof and additions thereto, all of which property and things to the extent permitted by law are hereby declared to be permanent accessions to the Land.

(g)     “Governmental Authority” shall mean any and all governmental or quasi-governmental entities of any nature whatsoever, whether federal, state, county, district, city or otherwise, and whether now or hereafter in existence.

(h)     “Impositions” shall mean any required insurance, taxes, assessments, any easement, license or agreement maintained for the benefit of the Property, including leasehold payments or ground rents, if any, and any interest, costs or penalties with respect thereto, of any nature whatsoever which may now or hereafter be assessed, levied or imposed upon the Property or the ownership, use, occupancy or enjoyment thereof.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 2

(i)      “Improvements” shall mean any and all buildings, parking areas and other improvements, and any and all additions, alterations, or appurtenances thereto, now or at any time hereafter placed or constructed upon the Land or any part thereof.

(j)      “Indebtedness” shall mean the principal, interest, and all other amounts due under the Note (hereinafter defined) or secured by this Deed of Trust and the other Security Documents.

(k)      “Land” shall mean the real estate (or interest therein) described in Exhibit “A” attached hereto and incorporated herein by this reference and, subject to the Permitted Exceptions described in Exhibit “B” attached hereto and incorporated herein by this reference, all Improvements and Fixtures, and all rights, titles and interests appurtenant thereto.

(l)      “Loan Agreement” shall mean that certain Loan Agreement of even date herewith, entered into by and between, among others, Grantor, and Green Brick Partners, Inc., a Delaware corporation, as borrower (“Borrower”), and Beneficiary, as Lender.

(m)    “Legal Requirements” shall mean any and all of the following that may now or hereafter be applicable to Grantor or the Property: (i) judicial decisions, statutes, rulings, rules, regulations, permits, certificates or ordinances of any Governmental Authority having jurisdiction over the Grantor or the Property; and (ii) restrictions of record.

(n)     “Note” shall mean that certain Revolving Line of Credit even date herewith executed by Borrower, as maker, payable to the order of Beneficiary, in the aggregate principal amount of FIFTY MILLION AND 00/100 DOLLARS ($50,000,000.00), and payable as therein provided, and all extensions, renewals, and modifications thereof, and all other notes given in substitution therefor.

(o)      “Obligations” shall mean any and all of the covenants, warranties, representations and other obligations (other than to repay the Indebtedness) made or undertaken by Grantor or Borrower under the Security Documents or Legal Requirements.

(p)      “Permitted Exceptions” shall mean, (i) if any, the liens, encumbrances, security interests, easements, intrusions, reservations, and adverse claims affecting the Property as set forth in Exhibit “B” attached hereto and incorporated herein by this reference, (ii) the lien and security interest created by this Deed of Trust and any other lien against the Land in favor of Beneficiary; and (iii) the matters, if any, set forth as exceptions on Schedule B of any title insurance policy issued in connection with the transaction described in this Deed of Trust or the Loan Agreement.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 3

(q)     “Property” shall mean the Land (including all minerals thereon and thereunder), Improvements, and Fixtures, together with all or any part of and any interest in the following: (i) rights, privileges, tenements, hereditaments, rights-of-way, easements, appendages and appurtenances in any way pertaining thereto, and rights, titles, and interests of Grantor in and to any bed of any stream, creek, or waterway, streets, roads, alleys, strips of land adjoining the Land or any part thereof, and all rights of ingress and egress to the Land; (ii) additions, substitutions, replacements and revisions thereof and thereto and all reversions and remainders therein; and (iii) all leases, rents, royalties, oil and gas rights and profits, water rights, in any manner now or hereafter a part of or relating to the Land.

(r)     “Security Documents” shall mean the Note, this Deed of Trust, the Loan Agreement, and all other instruments, documents, or other writings now or hereafter executed by Grantor or Borrower pertaining to or as security for the payment of the Indebtedness or the performance of the Obligations.

(s)      “Trustee” shall mean the party identified second in this Deed of Trust by typed or handwritten insertion; and his, its or their substitutes, successors and assigns.

1.02        Context and Usage. Whenever the context hereof requires, reference in this Deed of Trust to the singular number shall include the plural, and likewise the plural shall include the singular; words denoting sex shall be construed to include the masculine, feminine and neuter, where appropriate; and specific enumeration shall not exclude the general, but shall be considered as cumulative.

ARTICLE II

REPRESENTATIONS, WARRANTIES, COVENANTS

AND OTHER AGREEMENTS OF GRANTOR

2.01        Representations, Warranties, Covenants, and other Agreements of Grantor. Grantor and Borrower, as applicable, unconditionally represents, warrants, covenants, and agrees that:

(a) The Obligations set forth in the Security Documents are legal, valid, and binding on Grantor and Borrower, as applicable, in accordance with their terms, and no offsets or defenses exist against Beneficiary in favor of Grantor or Borrower which would in any way lessen or invalidate Grantor’s or Borrower’s liability under the Security Documents or the Indebtedness.

(b) The execution and delivery of, and performance under, the Security Documents are within Grantor’s and Borrower’s authority and powers.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 4

(c)      Grantor has good and indefeasible title to the Land, Improvements, and Fixtures, free and clear of any liens, encumbrances, security interests, easements, or adverse claims except for those Permitted Exceptions, if any, set forth in Exhibit “B”, attached hereto. This Deed of Trust shall constitute a valid, subsisting first lien on the Land, Improvements, and Fixtures, all in accordance with the terms hereof.

(d)     Borrower will duly and punctually: (i) pay the Indebtedness, as and when called for in the Security Documents; (ii) perform all of its Obligations, in full, on or before the date or dates same are to be performed; and (iii) cause each of the Impositions to be paid and discharged not later than the due dates thereof and furnish Beneficiary with evidence of such payment.

(e)      Grantor (and, to the extent within Borrower’s control, Borrower) will promptly and fully comply with all present and future Legal Requirements and cause all Improvements, included or to be included in the Property, to comply with all Legal Requirements.

(f)      Grantor will use commercially reasonable efforts to maintain, preserve, and keep the Property in condition customary in the single-family development industry and will make, to the extent applicable, any necessary repairs, replacements, additions, improvements and alterations thereof and thereto, both structural and non-structural, which are necessary to keep the Property in such condition.

(g)     To the extent that any vertical improvements are constructed on the Property, Grantor will keep the Property insured against loss or damage by fire, explosion, windstorm, hail, tornado, flood (if the Property is located in an identified “flood hazard area”, in which flood insurance has been made available pursuant to the National Flood Insurance Act of 1968), and other hazards by policies of fire and extended coverage and Grantor shall obtain and maintain such other insurance coverage as Beneficiary shall reasonably require. The insurance carriers providing such insurance shall be chosen by Grantor subject to Beneficiary’s approval, which shall not be unreasonably withheld.

(h)     Either Grantor or Borrower will deliver to Beneficiary true and correct copies of the original policies evidencing such insurance as specified in Section 2.01(f) above and any additional insurance which shall be taken out upon the Property and receipts evidencing the payment of all premiums, and certificates evidencing renewals of all such policies of insurance shall be delivered to Beneficiary at least ten (10) days before any such insurance shall expire; and that any such policies shall be payable to Beneficiary as its interest may appear, pursuant to a mortgagee clause attached which shall be satisfactory to Beneficiary, and shall provide for at least ten (10) days prior written notice to Beneficiary prior to cancellation of such policies. In the event of foreclosure, of this Deed of Trust, or other transfer of title to Property in extinguishment in whole or in part of the Indebtedness, all right, title and interest of Borrower and/or Grantor in and to any such policies then in force concerning the Property and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure or Beneficiary in the event of such transfer. In case of any insured loss under any such policies, Beneficiary, at its option, shall be entitled to receive and retain the proceeds of any such insurance policies, applying the same upon the Indebtedness or to apply such proceeds to the repair or restoration of the Improvements.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 5

(i)      Upon Beneficiary’s request, but only after an Event of Default has occurred and is continuing, Borrower will deposit with Beneficiary, each month in advance, a monetary sum estimated by Beneficiary to equal, on a monthly basis, all or such portion of the Impositions as Beneficiary may reasonably require. If such monthly deposits are being made, then, at least thirty (30) days prior to the date on which any tax or insurance premium must be paid to prevent delinquency thereof, Borrower will, on request of Beneficiary, deliver to Beneficiary, a statement or statements showing the amount of the tax or premium required to be paid, and the concern or authority to which same is payable, and will, at the same time, deposit with Beneficiary such amount as will, when added to the amount of such impounds and reserves previously deposited with Beneficiary and then remaining available for that purpose, be sufficient to pay such insurance or tax obligations. If such monthly deposits are being made, then Beneficiary shall apply all or any of the foregoing deposits in the payment of such insurance, tax, or other Impositions. Beneficiary shall not be required to pay Borrower any interest or earning on any of the foregoing deposits. As additional security hereunder, Borrower hereby assigns to Beneficiary all impounds or reserve accounts for Impositions and any unexpired insurance with respect to the Property. Upon an Event of Default hereunder, Beneficiary may at any time, without notice, apply the same as provided in Section 3.07 below.

(j)       Grantor will give prompt written notice to Beneficiary of any condemnation proceeding or casualty loss affecting the Property and in each such instance, afford Beneficiary an opportunity to participate in any such proceeding or in the settlement of any awards thereunder.

(k)      Grantor will promptly pay all debts and liabilities of any character related to the Property including, without limitation, all debts and liabilities for labor, material and equipment incurred in the construction, rehabilitation and improvement of the Property, or any part thereof, and will complete in a good and workmanlike manner any Improvements that may be constructed or repaired thereon.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 6

(k)     If the validity or priority of this Deed of Trust or of any rights, titles, liens or interests created or evidenced hereby with respect to the Property or any part thereof shall be endangered or questioned or shall be attacked directly or indirectly or if any legal proceedings are instituted against Grantor with respect thereto, Grantor will promptly give written notice thereof to Beneficiary and at Grantor’s own cost and expense will use commercially reasonable efforts to endeavor to cure any defect that may be developed or claimed, and will take all necessary and proper steps for the defense of such legal proceedings including, but not limited to, the employment of counsel, the prosecution or defense of litigation and the release or discharge of all adverse claims, and the Trustee and Beneficiary, or either of them (whether or not named as parties to legal proceedings with respect thereto) are hereby authorized and empowered to take such additional steps as in their reasonable judgment and discretion may be necessary or proper for the prosecution or defense of any such legal proceedings including, but not limited to, the employment of independent counsel, the prosecution or defense of litigation and the compromise or discharge of any adverse claims made with respect to the Property, and all reasonable and necessary expenses so incurred of any kind and character shall be a demand obligation owing by Grantor and shall bear interest from the date of expenditure until paid at the highest rate of interest which may legally be contracted for under the laws of the State of Texas, and shall be secured by the lien and security interest evidenced by this Deed of Trust, and the party incurring such expenses shall be subrogated to all rights of the person receiving such payment.

(l)      Grantor will defend and hold Beneficiary harmless from, any action, proceeding or claim affecting the Property or the Security Documents or the lien or security interest created thereby except to the extent otherwise provided herein. Further, Grantor will notify Beneficiary, in writing, promptly, of the commencement of any legal proceedings affecting the Property, or any part thereof, and will take all commercially reasonable action to preserve Beneficiary’s rights affected thereby; and Beneficiary may, at its election, take such action in behalf and in the name of Grantor, and at Grantor’s expense, and all reasonable and necessary expenses so incurred of any kind and character shall be a demand obligation owing by Grantor and shall bear interest from the date of expenditure until paid at the highest rate of interest which may legally be contracted for under the laws of the State of Texas, and shall be secured by the lien and security interest evidenced by this Deed of Trust, and the party incurring such expenses shall be subrogated to all rights of the person receiving such payment.

(m)     Grantor agrees that Beneficiary and its authorized agents, attorneys, representatives, and employees, may at all reasonable times and intervals, enter upon and inspect the Property after notice to Grantor and provided that such inspections do not unreasonably interfere with Grantor’s operations on the Property.

(n)    Grantor will not use or occupy, or permit any use or occupancy of the Property in any manner which violates any Legal Requirement; may be dangerous; constitutes a public or private nuisance; or makes void or voidable any insurance on the Property.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 7

(o)    Grantor will not, without the prior written consent of Beneficiary: (i) create, place or permit to be created or placed, or allow to remain, any mortgage, pledge, lien (statutory, constitutional or contractual), security interest, encumbrance or charge, or conditional sale or other title retention agreement, regardless of whether same are expressly subordinate to the liens and security interests of the Security Documents, with respect to the Property; (ii) request change in any zoning ordinance affecting the Property except for zoning changes to single-family residential; (iii) enter into any covenant, contract or other agreement, except in the ordinary course of Grantor’s business, which would materially and adversely affect the use of the Property; or (iv) sell, lease (except in the ordinary course of Grantor’s business) exchange, assign, convey, transfer possession of, or otherwise dispose of, all or any portion of the Property, or any interest therein, but if ownership of the Property or any part thereof or interest therein becomes vested in any person or entity other than Grantor, Beneficiary or any other holder of the Indebtedness may, without notice to Grantor, deal with such successor or successors-in-interest with reference to this Deed of Trust and the Indebtedness in the same manner as with Grantor without in any way discharging Borrower from the Indebtedness or the Obligations. Without limiting the right of Beneficiary to reasonably withhold its consent or to make other requirements prior to granting its consent, Beneficiary may require: (i) evidence reasonably satisfactory to Beneficiary that transferee is credit worthy; and (ii) transferee to execute such written modification and assumption agreements with regard to the Security Documents as Beneficiary shall deem reasonably necessary or desirable, including, but not limited to, provisions increasing the interest rate on the Note. No transfer of the Property, no forbearance by the Beneficiary and no extension of the time for the payment of the Indebtedness or the performance of the Obligations granted by Beneficiary shall release, discharge or affect in any way Borrower’s liability hereunder.

(p)    Neither Borrower nor Grantor will permit: (i) any waste or deterioration of any part of the Property; (ii) any material alterations or additions to the Property, unless in the ordinary course of Grantor’s business; or (iii) any of the Fixtures to be removed at any time from the Land or Improvements, except in the ordinary course of Grantor’s business, unless the removed item is removed temporarily for maintenance and repair or, if removed permanently, is replaced by an article of at least equal suitability and value, and owned by Grantor free and clear of any other lien or security interest.

(q)     Grantor and Borrower will execute and deliver such further instruments and do such further acts as may be necessary or desirable in Beneficiary’s or Trustee’s reasonable opinion, to carry out more effectively the purposes and intent of this Deed of Trust and the Security Documents, and to perfect the rights, titles, liens and security interest herein created or intended to be created and protect the rights, remedies, powers and privileges of Beneficiary hereunder. Further, Grantor and Borrower will, upon request of Beneficiary, promptly correct any defect, error or omission, which may be discovered in the contents of this Deed of Trust, the Note, or the Security Documents, and will execute and deliver any and all additional instruments as may be reasonably requested by Beneficiary or Trustee to correct such defect, error or omission, or to identify any additional properties which are or become subject to this Deed of Trust.

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(r)      Borrower will promptly pay and hold Beneficiary harmless from all reasonable attorney’s fees and all other actual, out-of-pocket costs incurred by Grantor or Borrower, or actual, out-of-pocket costs of enforcement incurred by Beneficiary, in connection with the performance of the covenants of this Deed of Trust, or otherwise attributable to or chargeable to Grantor as owner of the Property.

(s)      At all times throughout the term of the Indebtedness made pursuant to and arising out of the Security Documents, Grantor and all of its respective Affiliates (defined below) shall (i) not be a Prohibited Person (defined below), and (ii) be in full compliance with all applicable orders, rules, regulations and recommendations of the Office of Foreign Assets Control (“OFAC”) of the U. S. Department of the Treasury.

The term “Prohibited Persons” shall mean any person or entity: (i) listed in the Annex to, or otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”); (ii) that is owned or controlled by, or acting for or on behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (iii) with whom Beneficiary is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering law, including the Executive Order; (iv) who commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Order; (v) that is named as a “specially designated national and blocked person” on the most current list published by OFAC at its website, www.ustreas.gov/offices/enforcement/ofac or at any replacement website or other replacement or supplemental official publication of such list; or (vi) who is an Affiliate of or affiliated with a person or entity listed above.

The term “Affiliate” as used herein shall mean, as to any person or entity, any other person or entity that, directly or indirectly, is in control of, is controlled by, or is under common control with such person or entity, or is a director or officer of such person or entity or of an Affiliate of such person or entity. As used herein, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of management, policies or activities of a person or entity, whether through ownership or voting securities or interest, by contract or otherwise.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 9

ARTICLE III

DEFAULT AND REMEDIES

3.01        Events of Default. The term “Event of Default”, as used in this Deed of Trust, shall mean the occurrence at any time and from time to time, of any one or more of the following, subject to any notice and opportunity to cure provisions contained in the Loan Agreement, and, if no notice and opportunity to cure provisions contained in the Loan Agreement shall apply for a default by Grantor hereunder, then Grantor shall have a period of thirty (30) days after Grantor’s receipt of Lender’s written notice to Grantor of such default, provided, however, that if Grantor has commenced, and is continuing to utilize commercially reasonable efforts to, effect a cure, then Grantor shall be entitled to a period of up to ninety (90) days in the aggregate from the date of Grantor’s receipt of such written notice to effect a cure:

(a)      If any portion of the Indebtedness, as and when the same shall become due and payable, shall fail to be paid fully and timely in accordance with the terms of the Note.

(b)    If any of Grantor’s obligations hereunder or under the Loan Agreement shall fail to be discharged fully and timely after the expiration of any applicable notice and opportunity to cure.

(c)    If any representation, warranty or other information, including, without limitation, financial statements, supplied to Beneficiary under this Deed of Trust shall be false, misleading or erroneous in any material respect and in any manner (whether by omission or inclusion).

(d)     If a default, or event of default, occurs under the Loan Agreement (subject to any applicable notice and opportunity to cure provision).

3.02        Remedies Upon Default. To the fullest extent permitted in equity or at law, by statute or otherwise, if an Event of Default shall occur, Beneficiary, at Beneficiary’s sole election and by or through the Trustee or otherwise, may exercise any or all of the remedies described below. Prior to exercising any remedies described below for the occurrence of an Event of Default, Grantor and Borrower shall be entitled to all notice and cure rights as provided for in the Loan Agreement. If Borrower fails to cure such Event of Default within the applicable time period as provided for in the Loan Agreement, then Beneficiary shall have the right to exercise its remedies as provided herein.

Beneficiary’s remedies under this Section include the following:

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(a)      Declare all unpaid amounts under the Note and any other unpaid portion of the Indebtedness immediately due and payable, without further notice, notice of intent to accelerate maturity, notice of acceleration of maturity, presentment, protest, demand or action of any nature whatsoever (each of which is hereby expressly waived by Grantor and Borrower), whereupon the same shall become immediately due and payable.

(b)     Enter upon the Property and take exclusive possession thereof, and, if necessary to obtain such possession, Beneficiary may invoke any and all legal remedies to dispossess Grantor or any other persons, including specifically one or more actions for forcible entry and detainer, trespass to try title or writ of restitution.

(c)     Hold, lease, manage, operate or otherwise use or permit the use of the Property, either itself or by other persons, firms or entities, in such manner, for such time and upon such other terms as Beneficiary may reasonably deem prudent under the circumstances (making such repairs, alterations, additions and improvements thereto and taking such other action from time to time as Beneficiary shall reasonably deem necessary or desirable), and apply all rents collected in connection therewith in accordance with the provisions of Section 3.07 below.

(d)    Sell or offer for sale the Property in such portions, order and parcels as Beneficiary may determine, with or without having first taken possession of same, to the highest bidder for cash at public auction. Such sale shall be made at the courthouse door of the county where the Land is situated (or if the Land is situated in more than one county, the Property shall be sold at the courthouse door of any of such counties as designated in the notices of sale provided for herein) on the first Tuesday of any month between 10:00 a.m. and 4:00 p.m. after giving adequate legal notice of the time, place and terms of sale, by posting or causing to be posted written or printed notices thereof for at least twenty-one (21) consecutive days preceding the date of said sale at the courthouse door of the foregoing county and, if the Land is situated in more than one county, one notice shall be posted at the courthouse door of each county in which the Land is situated, and by Beneficiary serving written notice of such proposed sale on each debtor obligated to pay the Indebtedness, at least twenty-one (21) days preceding the date of said sale by certified mail at the most recent address for such parties in the records of Beneficiary, or by accomplishing all or any of the aforesaid in such manner as permitted or required by Section 51.002, Texas Property Code (as now written or as hereafter amended or superseded) relating to the sale of collateral after default by a debtor or by any other applicable present or subsequent laws. At any such sale: (i) Trustee shall not be required to have physically present, or to have constructive possession of, the Property (Grantor hereby covenanting and agreeing to deliver to Trustee any portion of the Property not actually or constructively possessed by Trustee immediately upon demand by Trustee) and the title to and right of possession of any such property shall pass to the purchaser thereof as completely as if the same had been actually present and delivered to purchaser at such sale; (ii) each instrument of conveyance executed by Trustee shall contain a special warranty of title, binding upon Grantor; (iii) each and every recital contained in any instrument of conveyance made by Trustee shall presumptively establish the truth and accuracy of the matters recited therein, including, without limitation, nonpayment of the Indebtedness, advertisement and conduct of such sale in the manner provided herein and otherwise by law and by appointment of any successor Trustee hereunder; (iv) any and all prerequisites to the validity of such sale shall be conclusively presumed to have been performed; (v) the receipt of Trustee or of such other party making the sale shall be a sufficient discharge to the purchaser for his purchase money and no such purchaser, or his assigns or personal representatives, shall thereafter be obligated to see to the application of such purchase money or be in any way answerable for any loss, misapplication or nonapplication thereof; (vi) Grantor shall be completely and irrevocably divested of all of its right, title, interest, claim and demand whatsoever, either at law or in equity, in and to the property sold and such sale shall be a perpetual bar both at law and in equity against Grantor, and against any and all other person claiming or to claim the property sold or any part thereof by, through or under Grantor; and (vii) Beneficiary may be a purchaser at any such sale. Should the Property be sold in one or more parcels as permitted by this subsection, the right of sale arising out of any Event of Default shall not be exhausted by any one or more such sales, but other and successive sales may be made until all of the Property has been sold or until the Indebtedness has been fully satisfied.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 11

(e)      Upon, or at any time after, commencement of foreclosure of the lien and security interest provided for herein, or any legal proceedings hereunder, make application to a court of competent jurisdiction as a matter of strict right and without notice to Grantor or regard to the adequacy of the Property for the repayment of the Indebtedness, for appointment of a receiver of the Property and Grantor does hereby irrevocably consent to such appointment. Any such receiver shall have all the usual powers and duties of receivers in similar cases, including the full power to rent, maintain, and otherwise operate the Property upon such terms as may be approved by the court, and shall apply such rents in accordance with the provisions of Section 3.07 below.

(f)       Exercise any and all other rights, remedies and recourses granted under this Deed of Trust or the Loan Agreement.

3.03        Remedies Non-Exclusive. All rights, remedies and recourses of Beneficiary granted in the Security Documents or otherwise available at law or equity:

(a)    Shall be cumulative and concurrent;

(b)     May be pursued separately, successively or concurrently against Grantor or against the Property, at the sole discretion of Beneficiary;

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(c)      May be exercised as often as occasion therefor shall arise, it being agreed by Grantor that the exercise or failure to exercise any of same shall in no event be construed as a waiver or release thereof or of any other right, remedy or recourse; and

(d)    Shall be non-exclusive.

3.04        Non-Waiver. Beneficiary may release, regardless of consideration, any part of the Property without, as to the remainder, in any way impairing, affecting, subordinating or releasing the lien or security interests evidenced by the Security Documents. For payment of the Indebtedness, Beneficiary may resort to any of the security therefor in such order and manner as Beneficiary may elect. No security heretofore, herewith or subsequently taken by Beneficiary shall in any manner impair or affect the security given by the Security Documents and all security shall be taken, considered and held as cumulative.

3.05        Waiver of Rights by Grantor. Grantor and Borrower, as applicable, each, hereby irrevocably and unconditionally waives and releases:

(a)      All benefit that might accrue to Grantor by virtue of any present or future law exempting the Property from attachment, levy or sale on execution or providing for any appraisement, valuation, stay of execution, exemption from civil process, redemption or extension of time for payment;

(b)     All notices of any Event of Default or of Trustee’s or Beneficiary’s exercise of any right, remedy or recourse except as specifically provided for under the Security Documents;

(c)      Any right to a marshalling of assets for a sale in inverse order of alienation; and

(d)     Any right of offset, or other claim whatsoever which may now or hereafter exist against Beneficiary or in favor of Grantor and no such right or claim shall in any way be used by Grantor to lessen, impair or defeat Beneficiary’s rights hereunder.

3.06        Adjournment of Sale. In case Beneficiary shall have proceeded to invoke any right, remedy or recourse permitted under the Security Documents and shall thereafter elect to discontinue or abandon same for any reason, Beneficiary shall have the unqualified right so to do and, in such event, Grantor, Borrower, and Beneficiary shall be restored to their former positions with respect to the Indebtedness, the Obligations, the Security Documents, the Property and otherwise, and the rights, remedies, recourses and powers of Beneficiary shall continue as if same had never been invoked.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 13

3.07        Application of Proceeds. Any proceeds of any sale of, and any rents or other amounts generated by the holding, leasing, operation or other use of the Property shall be applied in the following order of priority:

(a)     First, to the payment of all reasonable costs and expenses of taking possession of the Property and of holding, leasing, operating, using, repairing, improving and selling the same, including, without limitation, reasonable fees of the attorneys retained by Beneficiary or Trustee; reasonable fees of any receiver or accountants; recording and filing fees; court costs; costs of advertisement, and the payment of any and all Impositions, liens, security interest of this Deed of Trust (except those to which the Property has been sold subject to and without in any way implying Beneficiary’s consent to the creation thereof);

(b)     Second, to the payment of all accrued and unpaid interest due on the Indebtedness;

(c)      Third, to the payment of the unpaid principal balance of the Indebtedness;

(d)     Fourth, to the payment of all amounts, other than unpaid principal balance of the Indebtedness, which may be due to Beneficiary under the Security Documents, together with interest thereon as provided therein;

(e)     Fifth, to Grantor.

3.08        Additional Remedies. In addition to the remedies set forth in this Article III, upon the occurrence of an Event of Default the Beneficiary and Trustee shall, in addition, have available to them the remedies set forth in Article IV below, as well as all other remedies available to them at law or in equity.

ARTICLE IV

SECURITY AGREEMENT

4.01        Grant of Security Interest. This Deed of Trust shall also constitute and serve as a security agreement on personal property within the meaning of, and shall constitute a first and prior security interest under, Chapter 9 of the Code, with respect to the Fixtures, and all existing and future rents, leases and rentals thereunder, issues, profits, income, condemnation awards (inclusive of all amounts paid in connection with any public taking), insurance proceeds and all proceeds of the foregoing, plans and specifications for the Improvements, all of Grantor’s rights under any licenses, permits, certificates, documents, and general intangibles (including trade names and symbols used in connection with the Land or the Improvements), waste water, fresh water and other utility capacity and facilities available to or allocated to the Land or the Improvements (hereinafter collectively referred to as the “Personal Property”) arising out of or in connection with the Property, all existing and future equipment, machinery, furniture and furnishings, fixtures and trade fixtures used in connection with the Property. To this end, and without limiting any of the provisions of this Deed of Trust, Grantor, as Debtor (and referred to sometimes herein as “Debtor”) has Granted, Bargained, Conveyed, Assigned, Transferred and Set Over and by these presents does Grant, Bargain, Convey, Assign, Transfer and Set Over unto Beneficiary, as Secured Party (and referred to sometimes herein as “Secured Party”), a first and prior security interest in all of Grantor’s right, title and interest in and to the Fixtures and the Personal Property to secure the full and timely payment of the Indebtedness and performance of the Obligations.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 14

4.02        Additional Documents. Grantor agrees to execute and deliver to Beneficiary, in form and substance satisfactory to Beneficiary, such financing statements and such further assurances as Beneficiary may, from time to time, reasonably consider necessary to create, perfect and preserve the security interest herein granted, and Beneficiary may cause such statements and assurances to be recorded and filed, at such times and places as may be required or permitted by law to create, perfect and preserve such security interest.

4.03        Rights of Trustee. Beneficiary as well as Trustee on Beneficiary’s behalf, shall have all the rights, remedies and recourses with respect to the Fixtures afforded a “Secured Party” by Chapter 9 of the Code, in addition to, and not in limitation of, the other rights, remedies and recourses afforded Beneficiary and/or Trustee by the Security Documents.

4.04        Exculpation of Beneficiary and Trustee. The security interest herein granted shall not be deemed or construed to constitute Trustee or Beneficiary as a party in possession of the Property or to obligate Trustee or Beneficiary to lease the Property, or to take any action, incur any expenses or perform any obligation whatsoever under any lease or otherwise.

4.05        Additional Remedies in Event of Default. Upon the occurrence of an Event of Default as provided in Section 3.01 of this Deed of Trust, and at any time thereafter:

(a)      Trustee or Beneficiary shall have, with regard to the Fixtures, the remedies provided in this Deed of Trust and in the Code (no such remedy granted by the Code being excepted, modified or waived herein). Trustee or Beneficiary may use his or its reasonable discretion in exercising its rights and electing its remedies; provided, however, all actions shall be in compliance with the standards of the Code, where applicable and required. For purposes of the notice requirements of the Code and this Article IV, it is agreed that notice sent or given not less than ten (10) calendar days prior to the taking of the action to which the notice relates, is reasonable notice.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 15

(b)     Trustee or Beneficiary shall be entitled, acting in its sole discretion, to apply the proceeds of any disposition of the Fixtures in the order set forth in Part 5 of Article 9 of the Code, or, if allowed by the Code, in the order set forth in Section 3.07 hereof. If the proceeds are not sufficient to pay the Indebtedness in full, Grantor shall remain liable for any deficiency.

(c)      Notwithstanding anything herein to the contrary, Beneficiary, or the Trustee acting on Beneficiary’s behalf, may at its option dispose of the Fixtures and other items of personal property covered by this Deed of Trust in accordance with Beneficiary’s rights and remedies in respect of the Land pursuant to the provisions of this Deed of Trust, in lieu of proceeding under the Code.

4.06        Assembling of Personalty, Fixtures, Leases and Rents; Expenses. Beneficiary may require Grantor to assemble the Fixtures and make them available to Beneficiary or Trustee at a place to be designated by Beneficiary that is reasonably convenient to both parties. All reasonable expenses of retaking, holding, preparing for sale, lease or other use or disposition, selling, leasing or otherwise using or disposing of the Fixtures and the like which are incurred or paid by Beneficiary as authorized or permitted hereunder, including also all reasonable attorney’s fees, and all actual, out-of-pocket legal and reasonable expenses and costs, shall be added to the Indebtedness and Grantor shall be liable therefor.

4.07        No Lien on Consumer Goods. Notwithstanding anything to the contrary contained in this instrument, (a) if the Beneficiary is a state or national bank, and if any person executing this instrument is a “consumer” as defined in Regulation AA of the Board of Governors of the Federal Reserve System, no lien or security interest created or evidenced by this instrument shall extend to, cover or affect “household goods” as defined in Regulation AA of the Board of Governors of the Federal Reserve System; and (b) in all other cases, if any person executing this instrument is a “consumer” as defined in 16 C.F.R. §444.1, no lien or security interest created or evidenced by this instrument shall extend to, cover or affect “household goods,” as defined in 16 C.F.R. §444.1.

ARTICLE V

CONDEMNATION AND OTHER AWARDS

5.01        Condemnation and Other Awards. All judgments, decrees or awards now or hereafter made for injury or damage to the Property, or awards, settlements or other compensation now or hereafter made by any Governmental Authority, including those for any variation of, or change of grade in, any streets affecting the Land or the Improvements, are hereby assigned in their entirety to Beneficiary, who may apply the same to the Indebtedness secured hereby or in such manner as Beneficiary may elect, and 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.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 16

ARTICLE VI

THE TRUSTEE

6.01       Exculpation of Trustee. Trustee shall not be liable for any error of judgment or act done by Trustee in good faith, or be otherwise responsible or accountable to Grantor under any circumstances whatsoever, nor shall Trustee be personally liable in case of entry by him, or anyone entering by virtue of the powers herein granted, upon the Property for debts contracted or liability or damages incurred in the management or operations of the Property, Trustee shall have the right to rely on any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith to be genuine. Trustee shall be entitled to reimbursement for reasonable expenses incurred by him in the performance of his duties hereunder. Grantor will, from time to time, reimburse Trustee for, and save him harmless against, any and all liability and actual, out-of-pocket expenses which may be incurred by him in the performance of his duties.

6.02        Holding of Funds. All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated in any manner from any other moneys (except to the extent required by law), and Trustee shall be under no liability for interest on any money received by him hereunder.

6.03       Substitute Trustee. Trustee may resign at any time with or without notice. If Trustee shall die, resign or become disqualified from acting in the execution of this trust or shall fail or refuse to execute the same when requested by Beneficiary so to do, or if, for any reason, Beneficiary shall prefer to appoint a substitute trustee to act instead of the aforenamed Trustee, Beneficiary shall have full power to appoint a substitute trustee and, if preferred, several substitute trustees in succession without any formality whatsoever other than an appointment and designation in writing signed by Beneficiary or its agent or officer (whose authority shall be presumed) which substitute trustee or trustees shall succeed to all the estates, rights, powers and duties of the aforenamed Trustee.

6.04        Rights of Substitute Trustee. Any new Trustee appointed pursuant to any of the provisions hereof shall, without any further act, deed or conveyance, become vested with all the estates, properties, rights, powers and trust of its or his predecessor in the rights hereunder with like effect as if originally named as Trustee herein; but nevertheless, upon the written request of Beneficiary or of the successor Trustee, the Trustee ceasing to act shall execute and deliver an instrument transferring to such successor Trustee, upon the trusts herein expressed, all the estates, properties, rights, powers and trusts of the Trustee so ceasing to act, and shall duly assign, transfer and deliver any of the property and money held by such Trustee to the successor Trustee so appointed in his place.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 17

ARTICLE VII

MISCELLANEOUS

7.01       Survival of Obligations. Each and all of the Obligations shall survive the execution and delivery of the Security Documents, and the consummation of the loan called for therein, and shall continue in full force and effect until the Indebtedness shall have been paid in full.

7.02       Additional Documents. Grantor or Borrower, upon the request of Trustee or Beneficiary, shall execute, acknowledge, deliver and/or file such further instruments and do such further acts as may be reasonably necessary, desirable or proper to carry out more effectively the purposes of the Security Documents and to subject to the liens and security interests thereof any property intended by the terms thereof to be covered thereby, including specifically, but without limitation, any renewals, additions, substitutions, replacements, or appurtenances to the then Property. Borrower will pay all such recording, filing, re-recording, and refiling taxes, and reasonable fees and other charges, including those for security interest searches.

7.03        Notices. All notices or other communications required or permitted to be given or delivered pursuant to this Deed of Trust (except for notice of a foreclosure sale which shall be given in the manner set forth in Section 3.02 hereof) shall be in writing and shall be deemed properly given and/or delivered upon deposit in the United States mail, postage prepaid, registered or certified with return receipt requested, or upon actually delivering same in person or by duly appointed agent to the intended addressee or upon sending a prepaid telegram. For purposes of notice, the addresses of the parties shall be as set forth in the opening recital or in the Definitions hereinabove; provided, however, that either party shall have the right to change its address for notice hereunder to any other location within the continental United States by giving thirty (30) days prior notice to the other party in the manner set forth hereinabove.

7.04       Non-Waiver. Any failure by Trustee or Beneficiary to insist, or any election by Trustee or Beneficiary not to insist, upon strict performance by Grantor of any of the terms, provisions or conditions of the Security Documents shall not be deemed to be a waiver of same or of any other term, provision or condition thereof, and Trustee or Beneficiary shall have the right at any time or times thereafter to insist upon strict performance by Grantor of any and all of such terms, provisions and conditions.

7.05        Additional Advances or Expenditures by Beneficiary. If Grantor or Borrower shall fail, refuse or neglect to make any payment or perform any act required by the Security Documents, then at any time thereafter, and without notice to or demand upon Grantor and without waiving or releasing any other right, remedy or recourse Beneficiary may have because of same, Beneficiary may (but shall not be obligated to) make such payment or perform such act for the account of and at the expense of Borrower, and shall have the right to enter the Property for such purpose and to take all such action thereon and with respect to the Property as it may reasonably deem necessary or appropriate. Borrower shall indemnify Beneficiary for all actual, out-of-pocket losses, expenses, damage, claims and causes of action, including reasonable attorney’s fees, incurred or accruing by reason of any acts performed by Beneficiary pursuant to this Section 7.05 or by reason of any other provision in the Security Documents. All sums paid by Beneficiary pursuant to this Section 7.05 and all other sums expended by Beneficiary to which it shall be entitled to be indemnified, together with interest thereon at the maximum rate of interest allowed by applicable law from the date of such payment or expenditure, shall constitute additions to the Indebtedness; shall be secured by the Security Documents; and shall be paid by Borrower to Beneficiary upon demand.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 18

7.06       Heirs, Successors and Assigns. All Obligations contained in the Security Documents are intended by the Parties to be, and shall be construed as, covenants running with the Property. Further, all of the terms of the Security Documents shall apply to, be binding upon, and inure to the benefit of the parties thereto, their respective successors, assigns, heirs and legal representatives, and all other persons claiming by, through or under them.

7.07      Partial Invalidity. The Security Documents are intended to be performed in accordance with, and only to the extent permitted by, all applicable Legal Requirements. If any provision of any of the Security Documents or the application thereof to any person or circumstances shall, for any reason and to any extent, be invalid or unenforceable, neither the remainder of the instrument in which such provision is contained nor the application of such provision to other persons or circumstances nor the other instruments referred to hereinabove shall be affected thereby, but rather shall be enforced to the greatest extent permitted by law.

7.08        Lawful Interest. All agreements between and among Grantor, Borrower, and Beneficiary are expressly limited so that in no contingency or event whatsoever whether by reason of advancement of the proceeds of the Note, acceleration of maturity of the unpaid principal balance thereof, or otherwise, shall the amount contracted for, charged, collected, paid or agreed to be paid to Beneficiary for the use, forbearance or detention of the money to be advanced hereunder exceed the highest lawful rate permissible under applicable law. If, from any circumstances whatsoever, fulfillment of any provision of the Security Documents, or any other agreement referred to herein, at the time performance of such provisions shall be due, shall involve transcending the maximum limit of validity prescribed by law which a court of competent jurisdiction may deem applicable hereto, then, ipso facto, the obligation to be fulfilled shall be reduced to the maximum limit of such validity, and if from any circumstance, Beneficiary shall ever receive as interest an amount which would exceed the highest lawful rate, such amount which would be excessive interest shall: (a) be applied to the reduction of unpaid principal of Indebtedness secured by the Security Documents; or (b) be refunded to the payor of such amount and not applied to the payment of interest. This provision shall control every other provision of all agreements including but not limited to the Security Documents between or among, Grantor, Borrower, and Beneficiary.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 19

7.09       Subsequent Laws. In the event of the passage after the date of this Deed of Trust of any applicable law changing in any way the laws for the taxation of deeds of trust and/or the debts secured thereby so as to affect this Deed of Trust, Beneficiary shall have the right, at Beneficiary’s option, and if Grantor fails to pay the tax owed within fifteen (15) days after receipt of written notice and demand for payment from Beneficiary, to declare the Indebtedness immediately due and payable.

7.10       Entire Agreement; Amendment. The Security Documents contain the entire agreements between the parties relating to the subject matter hereof and thereof and all prior agreements relative thereto which are not contained herein or therein are terminated. The Security Documents may be amended, revised, waived, discharged, released or terminated only by a written instrument or instruments, executed by the party against which enforcement of the amendment, revision, waiver, discharge, release or termination is asserted. Any alleged amendment, revision, waiver, discharge, release or termination that is not so documented shall not be effective as to any party.

7.11       Counterparts. This Deed of Trust may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute but one instrument.

7.12       Subrogation. If any or all of the proceeds of the Note have been used to extinguish, extend or renew any indebtedness heretofore existing against the Property, then, to the extent of such funds so used, the Indebtedness and this Deed of Trust shall be subrogated to all of the rights, claims, liens, titles and interests heretofore existing against the Property to secure the indebtedness so extinguished, extended or renewed and the former rights, claims, liens, titles and interests, if any, are not waived but rather are continued in full force and effect in favor of Beneficiary and are merged with the lien and security interest created herein as cumulative security for the repayment of the Indebtedness and the satisfaction of the Obligations, regardless of whether said indebtedness, rights, claims, liens, title and interests are acquired by Beneficiary by assignment or are released by the holder thereof upon payment.

7.13       Governing Law. The Security Documents shall be governed by and construed according to the laws of the State of Texas and the applicable laws of the United States of America.

7.14        Headings. The article and section entitlements hereof are inserted for convenience of reference only and shall in no way alter, modify or define, or be used in construing, the text of such articles and sections.

7.15        Joint and Several Liability. If Grantor consists of more than one party, the Obligations set forth herein and in the Security Documents shall be the joint and several obligations of each of such parties.

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 20

7.16       Other Security. The security herein and hereby provided shall not affect, or be affected by, any other or further security heretofore or hereafter taken to secure the Indebtedness. Beneficiary may release, without notice, any part of the Property, or other security heretofore or hereafter taken to secure the Indebtedness, or any person liable for all or part of the Indebtedness, and without in any way affecting the lien hereof as to the part, or parts, of the Property so retained, and no creditor of Grantor, nor any other person, firm, or corporation, shall have any objection thereto, or right to hold Beneficiary to account therefor, nor shall the lien of this Deed of Trust be adversely affected in any manner by any such release.

7.17       Fixture Filing. This Deed of Trust shall be effective as a financing statement filed as a fixture filing with respect to all Fixtures and is to be filed for record in the real property records in the Office of the County Clerk for the county or counties in which the Land is situated.

7.18        Partial Release. Beneficiary will agree to partial releases of the lien granted herein by Grantor against portions of the Property in accordance with the terms of the Loan Agreement, subject to and conditioned upon satisfaction of each of the requirements contained in the Loan Agreement.

7.19         Controlling Document. To the extent anything contained herein is inconsistent with or contrary to the terms of the Loan Agreement, the terms of the Loan Agreement shall control.

THE REMAINDER OF THE PAGE IS BLANK 

SIGNATURE PAGE FOLLOWS

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 21

EXECUTED to be effective as of the 30th day of July, 2015..

GRANTOR:
JBGL Chateau, LLC,
a Texas limited liability company
By:	/s/ James R. Brickman
	James R. Brickman, Manager

ALL OBLIGATIONS AND AGREEMENTS

APPLICABLE TO BORROWER IN THIS

DEED OF TRUST ARE HEREBY ACKNOWLEDGED

AND AGREED TO FOR ALL PURPOSES:

Green Brick Partners, Inc.,
a Delaware corporation
By:	/s/ James R. Brickman
	James R. Brickman
	Chief Executive Officer

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 22

STATE OF TEXAS §

§

COUNTY OF DALLAS §

THIS INSTRUMENT was acknowledged before me this 29th day of July, 2015, by James R. Brickman, Manager of JBGL Chateau, LLC, a Texas limited liability company, on behalf of said entity.

/s/ John E. Hampton

Notary Public, State of Texas

Printed Name:

Commission Expires:

STATE OF TEXAS §

§

COUNTY OF DALLAS §

THIS INSTRUMENT was acknowledged before me this 29th day of July, 2015, by James R. Brickman, Chief Executive Officer of Green Brick Partners, Inc., a Delaware corporation, on behalf of said entity.

/s/ John E. Hampton

Notary Public, State of Texas

Printed Name:

Commission Expires:

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 23

AFTER RECORDING RETURN TO:

Scott D. Osborn

Adair, Morris & Osborn, P.C.

325 N. St. Paul Street, Suite 4100

Dallas, Texas 75201

THE TRUSTEE’S ADDRESS IS:

c/o Scott D. Osborn

Adair, Morris & Osborn, P.C.

325 N. St. Paul Street, Suite 4100

Dallas, Texas 75201

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 24

EXHIBIT “A”

(Land)

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 25

EXHIBIT A (CHATEAU 4-5)

TRACT 4:

Lots2thru4,8,and23thru25,inBlockA,Lots1thru3,5thru7,9,13,15,17,20,23,and 24,in Block B, Lot1, in BlockC,Lots1, 5, and7,in Block D, Lots1 and5, in Block E,Lots 1, 2,and7,inBlock F,Lots1, 2,7,10, 25,and28,in Block G,Lots1thru4, 6,and9, in Block H, Lots 2, 5, 9, and 10,inBlockICypress Meadows Phase1, anadditiontotheCity of Allen, CollinCounty, Texas,according tothe Mapor Plat thereof recorded in/under Clerk’s FileNo.2013-454,Map/Plat Records,CollinCounty,Texas.

TRACT 5:

Lots11,and12,inBlockA,ofCypressMeadowsPhase1,Lots 10-17,Block A,an addition tothe Cityof Allen,CollinCounty, Texas, according to theMap or Platthereof recorded in/under Clerk’s File No.2014-135, Map/PlatRecords, Collin County,Texas

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 26

TRACT 7

BEING a tract of land situated in the J. Gough Survey, Abstract No. 347, City of Allen, Collin County, Texas, the subject tract being all of a tract of land conveyed to Mary McDermott Cook according to the deeds recorded in Document Number 95-0052413 and Volume 2198, Page 507 of the Deed Records, Collin County, Texas (DRCCT), the subject tract being more particularly described as follows:

BEGINNING at 1/2” iron rod with a plastic cap found for the inset southwest corner of Twin Creeks Phase 6B, an addition to the City of Allen, recorded in Cabinet R, Page 276 of the Plat Records, Collin County, Texas (PRCCT), and being shown in Shallowater Drive (a variable width public right-of-way) per said plat;

THENCE S 02°49’06” E, along the lower west line of Twin Creeks Phase 6B, and same for Shallowater Drive, passing at 1435.36 feet the southwest corner of said Twin Creeks Phase 6B and the northwest corner of Twin Creeks Phase 6C, an addition to the City of Allen, recorded in Cabinet 2007, Page 502 PRCCT, continuing along the west line thereof, a total distance of 2338.93 feet to a 1/2” iron rod found for the southwest corner of Twin Creeks Phase 6C and the northwest comer of The Preserve, an addition to the City of Alien, recorded In Cabinet 2011, Page 370 PRCCT;

THENCE S 02°20’33” E, 27.99 feet along the West line of The Preserve, and same for Shallowater Drive, to a 1/2” iron rod with a plastic cap found for the Northeast corner of that certain tract described in deed to Mrs. Eugene McDermott and Mary McDermott Cook, recorded in Volume 614, Page 93 DRCCT;

THENCE N 89°44’31” W, 1713.02 feet along the common line thereof to a 1/2” iron rod with a plastic cap stamped “SPIARSENG” set on the east line of Custer Road (a called 110 foot public right-of-way);

THENCE along the east line of Custer Road, the following courses:

N 00°33’46” W, 205.56 feet to a 1/2” iron rod with a plastic cap stamped “SPIARSENG” set;

And N 01°08’46” W, 1551.39 feet to a 1/2” iron rod with a plastic cap stamped “SPIARSENG” set for the southwest corner of a 7.5 foot wide tree right-of-way dedicated to the City of Allen, as shown on the Final Plat of Custer Meadow Phase B, an addition to the City of Allen, recorded in Cabinet M, Page 311, PRCCT;

THENCE N 69°38’13” E, 1303.15 feet along said right-of-way to a 1/2” iron rod with a plastic cap stamped “SPIARSENG” set for the southeast corner of said right-of-way, and being on the south line of the remainder of that certain tract described in deed to Briar Ridge Investment Inc., recorded in Document Number 92-0047288 DRCCT;

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 27

THENCE N 71°52’17” E, 58.45 feet along the common line thereof to a 1-1/2” iron pipe found for the northerly southwest comer of said Twin Creels Phase 6B;

THENCE N 70°02 19” E, 375.19 feet along the upper south line thereof, to the PLACE OF BEGINNING with the subject tract containing 3,467,356 square feet or 79.600 acres of land.

SAVE AND EXCEPT: That portion of subject property being known as Cypress Meadows Phase 1, an addition to the City of Allen, Collin County, Texas, according to the Map or Plat thereof recorded in/under Clerk’s File No. 2013-454, Map/Plat Records, Collin County, Texas.

FURTHER SAVE AND EXCEPT: That portion of subject property having been conveyed to the City of Piano in Deed filed of record on October 3, 1991, recorded in Volume 3764, Page 480, Real Property Records, Collin County, Texas

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 28

EXHIBIT “B”

(Permitted Exceptions)

DEED OF TRUST AND SECURITY AGREEMENT – PAGE 29

EXHIBIT “B” (CHATEAU 4-5)

PERMITTED EXCEPTIONS

1. The following restrictive covenants of record:

Clerk’s File No(s). 2013-1397010, 2014-108710 and 2014-890090, Real Property Records, Collin County, Texas, and under Clerk’s File No. 2013-454, Map/Plat Records, Collin County, Texas (Tracts 4 and 5)

Clerk’s File No. 2014-135, Map/Plat Records, Collin County,

2. Assessments, charges and liens as set forth in the document

Entitled: Declaration

Recording Date: October 8, 2013

Recording No: under Clerk’s File No(s). 2013-1397010, Real Property Records, Collin County, Texas

Liens and charges as set forth in the above mentioned declaration, Payable to: Cypress Meadows Homeowners Association, Inc.

Tracts 4 and 5

3. Covenants, conditions and restrictions to impose a transfer fee or a conveyance fee payable upon the transfer of an interest in real property or payable for the right to make or accept such a transfer, and any and all fees, liens, or charges, whether recorded or unrecorded, if any, currently due and payable or that will become due and payable, and any other rights deriving therefrom, that are assessed pursuant thereto, as set forth in document

Recording Date: October 8, 2013

Recording No: under Clerk’s File No(s). 2013-1397010, Real Property Records, Collin County, Texas

Tract 4 and 5

4. Building lines, easements and other matters as shown or provided for on plat recorded under Clerk’s File No. 2013-454, Map/Plat Records, Collin County, Texas. Tracts 4 and 5

5. Building lines, easements and other matters as shown or provided for on plat recorded under Clerk’s File No. 2014-135, Map/Plat Records, Collin County, Texas. Tract 5

6. Matters contained in that certain document

Entitled: Facilities Agreement

Dated: January 29, 2014

Executed by: JBGL Chateau LLC, Allen Cypress Meadows Homeowners Association, Inc. and City of Allen

Recording Date: February 5, 2014

Recording No: under Clerk’s File No(s). 2014-108710, Real Property Records, Collin County, Texas

Reference is hereby made to said document for full particulars. Tracts 4 and 5

EXHIBIT “B” (TRACT 7)

PERMITTED EXCEPTIONS

1. The following restrictive covenants of record:

Easement(s) and rights incidental thereto, as granted in a Document:

Granted to: City of Allen

Purpose: As provided in said document

Recording Date: October 22, 1996

Recording No: under Clerk’s File No(s). 1996-91389, Real Property Records, Collin County, Texas

Affects: Tract 7

Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Piano Purpose:

As provided in said document

Recording Date: October 3, 1991

Recording No: Volume 3765, Page 45, Real Property Records, Collin County, Texas
Affects: Tract 7

Easement(s) and rights incidental thereto, as granted in a document:

Granted to: Southwestern Bell Telephone Company

Purpose: As provided in said document

Recording Date: July 30, 1930

Recording No: Volume 279, Page 305, Real Property Records, Collin County, Texas
Affects: Tract 7

Easement(s) and rights incidental thereto, as granted in a document:

Granted to: American Telephone and Telegraph Company

Purpose: As provided in said document Recording Date: February 26, 1945

Recording No: Volume 349, Page 619, Real Property Records, Collin County, Texas

Affects: Tract 7

Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Allen

Purpose: As provided in said document

Recording Date: September 10, 2013

Recording No: under Clerk’s File No(s). 2013-1278230, Real Property Records,

Collin County, Texas

Affects: Tract 7

Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Allen

Purpose: As provided in said document

Recording Date: September 10, 2013

Recording No: under Clerk’s File No(s). 2013-1278240, Real Property Records,

Collin County, Texas

Affects: Tract 7

Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Allen

Purpose: As provided in said document Recording Date: September 10, 2013

Recording No: under Clerk’s File No(s). 2013-1278250, Real Property Records,

Collin County, Texas

Affects: Tract 7

Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Allen

Purpose: As provided in said document.

Recording Date: September 10, 2013

Recording No: under Clerk’s File No(s). 2013-1278260, Real Property Records,
Collin County, Texas

Affects: Tract 7

Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Allen

Purpose: As provided in said document

Recording Date: September 10, 2013

Recording No: under Clerk’s File No(s). 2013-1278270, Real Property Records, Collin County, Texas

Affects: Tract 7

Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Allen

Purpose: As provided in said document

Recording Date: September 10, 2013

Recording No: under Clerk’s File No(s). 2013-1278280, Real Property Records,
Collin County, Texas

Affects: Tract 7

Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Allen

Purpose: As provided in said document

Recording Date: September 10, 2013

Recording No: under Clerk’s File No(s). 2013-1278290, Real Property Records,
Collin County, Texas

Affects: Tract 7

Easement(s) and rights incidental thereto, as granted in a document:

Granted to: City of Allen

Purpose: As provided in said document

Recording Date: September 10, 2013

Recording No: under Clerk’s File No(s). 2013-1278300, Real Property Records,
Collin County, Texas

Affects: Tract 7

Deed of Trust (with Security Agreement and Assignment of Leases) dated April 1, 2013, executed by JBGL Chateau, LLC, a Texas limited liability company, to Christopher R. Bright, as Trustee, securing payment of note in the amount of $750,000.00 payable to American Legend Homes, LLC, filed May 7, 2013, recorded under Clerk’s File No(s). 2013- 621980, Real Property Records, Collin County, Texas (Affects Tract 7 only)

EX-10.7

Green Brick Partners, Inc. 8-K

Exhibit 10.7

[Space above this line for recorder’s office]

AFTER RECORDING PLEASE RETURN TO:

STATE OF GEORGIA

COUNTY OF FULTON

DEED TO SECURE DEBT, ASSIGNMENT OF RENTS

AND LEASES, SECURITY AGREEMENT AND FIXTURE FILING

THIS INDENTURE (hereinafter called the “Security Deed”), made as of the 30th day of July, 2015, between JOHNS CREEK 206, LLC, a Georgia limited liability company, having an address of 2805 North Dallas Parkway, Suite 400, Plano, Texas 75093 (hereinafter called the “Grantor”), and Inwood National Bank, a national banking association having an address of 7621 Inwood Road, Dallas, Texas 75209 (hereinafter called the “Grantee”),

WITNESSETH:

That for and in consideration of the sum of ONE HUNDRED AND NO/100 DOLLARS ($100.00) in hand paid and the other considerations hereinafter mentioned, receipt whereof is hereby acknowledged, the Grantor does hereby bargain, sell, grant and convey to the Grantee, its successors and assigns, subject to the exceptions set forth on Exhibit B, all of that tract or parcel of land located in Fulton County, Georgia, being more particularly described in Exhibit A, attached hereto and by this reference incorporated herein and made a part hereof, TOGETHER WITH all buildings, structures, improvements, fixtures, furniture and appliances and other personal property now or hereafter located thereon or now or hereafter used in connection therewith (all such land, personal property, and other property hereinafter sometimes collectively called the “premises”).

TOGETHER WITH all rights, title and interest of Grantor in and to the minerals, crops, timber and emblements now or hereafter located on the premises;

TOGETHER WITH all gas and electric fixtures, radiators, heaters, space heaters, engines and machinery, boilers, ranges, ovens, elevators, motors, bathtubs, sinks, water closets, basins, pipes, faucets and other air-conditioning, plumbing, and heating fixtures, drapes, mirrors, mantles, refrigerating plans, refrigerators, iceboxes, dishwashers, carpeting, furniture, furnishings, appliances, fixtures, laundry equipment, cooking apparatus and appurtenances, and all building material and equipment now or hereafter delivered to the premises and intended to be installed therein; “goods,” “equipment,” “contract rights,” “accounts,” “general intangibles” (as said quoted terms are defined in the Georgia Uniform Commercial Code), chattels and personal property of every kind and nature whatsoever located on the premises; TOGETHER WITH all renewals or replacements thereof or articles in substitution therefor and all of the estate, right, title and interest of the Grantor in and to all property of any nature whatsoever, now or hereafter situated on the premises or intended to be used in connection with the operation thereof, all of which shall be deemed to be fixtures and an accession to the freehold and a part of the realty as between the parties hereto and all persons claiming by, through or under them and shall be deemed to be a portion of the security for the indebtedness herein mentioned and secured by this deed, but in no event shall Grantee exercise any rights hereunder except during an Event of Default (as defined in the Loan Agreement) unless otherwise described herein.

TOGETHER WITH all and singular the rights, members and appurtenances whatsoever, in any way belonging, relating or appertaining to any of the premises hereinabove mentioned or which hereafter shall in any way belong, relate or be appurtenant thereto, whether now owned or hereafter acquired by the Grantor, including but not limited to all rents, profits, issues and revenues of the premises from time to time accruing, whether under leases, tenancies or otherwise now existing or hereafter created, reserving only the right to the Grantor to collect the same so long as the Grantor is not in default hereunder and so long as the same are not subject to garnishment, levy, attachment or lien. In addition, Grantor hereby assigns, transfers and conveys to Grantee all Grantor’s right, title and interest in, to and under all leases now or hereafter leasing or affecting the premises or any part thereof.

TO HAVE AND TO HOLD the premises and all parts, rights, members and appurtenances thereof, to the use, benefit and behoof of the Grantee, its successors and assigns, in fee simple forever; and the Grantor covenants that Grantor is lawfully seized and possessed of the premises IN FEE SIMPLE FOREVER, and has good right to convey the same, that the same are unencumbered and that the Grantor will warrant and defend the title thereto against the claims of all persons whomsoever, except as hereinafter expressly provided.

This conveyance is intended (i) to constitute a security agreement as required under the Uniform Commercial Code of Georgia and (ii) to operate and is to be construed as a deed passing title to the premises to the Grantee and is made under those provisions of the existing laws of the State of Georgia relating to Deeds to Secure Debt, and not as a mortgage, and is given to secure (a) a debt evidenced by a Revolving Line of Credit (hereinafter called the “Note” which is incorporated herein by reference) dated effective as of the effective date hereof, executed by GREEN BRICK PARTNERS, INC., a Delaware corporation (“Borrower”), payable to the order of Grantee in the stated principal sum of FIFTY MILLION AND 00/100 DOLLARS ($50,000,000.00), with the final payment being due on or before July 30, 2017, (b) any and all renewals and extensions of the Note, either in whole or in part, whether at the same, a higher or a lower rate of interest than is payable under the Note as originally executed; (c) any consolidation of the Note; and (d) all obligations of Grantor under this Security Deed.

2

Should the indebtedness secured by this Security Deed be paid according to the tenor and effect thereof when the same shall become due and payable, and should Grantor perform all obligations in a timely manner, then this Security Deed shall be cancelled and surrendered.

The Grantor covenants with the Grantee as follows:

ARTICLE I

1.1   Taxes, Liens and Other Charges.   The Grantor shall pay and discharge when due all taxes, liens, assessments and charges of every character already levied or assessed or that may hereafter be levied or assessed upon or against said premises and all utility charges, whether public or private; and upon demand will furnish the Grantee receipted bills evidencing such payment. The Grantor shall not and may not suffer any mechanic’s, materialmens’s, laborer’s, statutory or other lien to be created or to remain outstanding upon any part of the premises.

1.2   Insurance.   To the extent there are any vertical improvements on the premises, the Grantor shall keep all buildings and improvements whether now standing on said premises or hereafter erected, continuously insured for the full insurable value of the premises and against loss or damage by fire, by the perils covered by extended coverage insurance, by builders risk insurance, by loss of rents or business interruption insurance and by malicious mischief insurance and against such other hazards as the Grantee in its reasonable discretion required from time to time for the benefit of the Grantee. The foregoing condition of vertical improvements shall not apply to the requirement for Grantor to provide general liability insurance as required by Grantee. Any policies furnished to Grantee will become its property in the event Grantee becomes owner of said premises by foreclosure or otherwise. Grantee is entitled in its reasonable discretion, to apply any insurance proceeds received under this Section 1.2 to the payment of the indebtedness secured hereby or to allow a portion of such proceeds to be used for restoration.

1.3   Care of Premises.   The Grantor shall keep and maintain the improvements now or hereafter erected on the premises in commercially reasonable condition and repair, shall not threaten, permit, commit or suffer any waste and shall not do or suffer to be done anything which increases the risk of fire or other hazard to the premises or any part thereof. The Grantor shall not, without the prior written consent of the Grantee, remove nor demolish nor alter the design or structural character of any building (nor or hereafter erected), fixture, chattel or other part of the premises unless as a part of Grantor’s ordinary course of business. If the premises or any part thereof is damaged by fire or any other cause, the Grantor shall give immediate written notice of the same to the Grantee. The Grantee or its representative is hereby authorized to enter upon and inspect the premises at any time during normal business hours with prior notice to Grantor provided that such entry and inspection shall not unreasonably interfere with Grantor’s operations on the premises. The Grantor shall promptly comply with all restrictive covenants, present and future laws, ordinances, rules and regulations of any governmental authority affecting the premises or any part thereof. If fire or other casualty damages all or any part of the premises, the Grantor shall, upon request of Grantee, promptly restore the premises to the substantially equivalent of its condition immediately prior to such damage, and if a part of the premises is damaged through condemnation, the Grantor shall, upon request of Grantee, promptly restore, repair or alter the remaining property in a manner reasonably satisfactory to the Grantee.

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1.4   Further Assurances.   At any time, and from time to time, upon request by the Grantee, the Grantor shall, at the expense of Grantor, make, execute and deliver or cause to be made, executed and delivered, to the Grantee, any and all further instruments, certificates and other documents as may, in the reasonable opinion of the Grantee, be necessary or desirable in order to affirm, effectuate, complete, or perfect or to continue and preserve the obligations of the maker of the Note and the security interest of this Security Deed.

1.5   Expenses.   The Grantor shall (a) pay or reimburse the Grantee for all reasonable attorneys’ fees and actual, out-of-pocket costs and expenses incurred by the Grantee in any proceedings involving the estate or a decedent, an insolvent or a bankrupt, or in any action, legal proceeding or dispute of any kind in which the Grantee is made a party, or appears as party plaintiff or defendant, affecting this Security Deed, the interest created herein, the premises or the exercise or enforcement of Grantee’s rights under this Security Deed including but not limited to the exercise of the power of sale of this Security Deed, any condemnation action involving the premises or any action to protect the security hereof, and (b) indemnify and hold Grantee harmless from all actual, out-of-pocket losses and damages incurred by the Grantee in any such proceedings, action or dispute; and any such fees, costs, expenses, losses or damages incurred by Grantee will be added to the indebtedness secured by this Security Deed.

1.6   Subrogation.   The Grantee will be subrogated to the claims and liens of all parties whose claims or liens are discharged or paid with the proceeds of the indebtedness secured hereby.

1.7   Performance by Grantee of Defaults by Grantor.   If the Grantor defaults in the payment of any tax, lien, assessment or charge levied or assessed against the premises, in the payment of any utility charge, whether public or private, in the payment of required insurance premiums, in the procurement of required insurance coverage, or in the performance or observance of any other covenant, condition or term of this Security Deed, then the Grantee shall provide Grantor with written notice of such default and an opportunity to cure as provided for in the Loan Agreement. If Grantee fails or refuses to timely provide such cure and evidence after the expiration of the applicable cure period, then Grantee, at its option, may perform or observe the same, and all payments made or costs incurred by the Grantee in connection therewith, are secured hereby and shall be, without demand, immediately repaid by the Grantor to the Grantee with interest thereon at the rate of ten percent (10%) per annum. Notwithstanding the foregoing, if Grantor’s failure to timely pay any such amounts referenced above would cause Grantor’s required insurance hereunder to lapse, or subject Grantor, Grantee, or the Property to a lien, or otherwise reasonably be considered to constitute an emergency, then such notice of default shall not be required. The Grantee is hereby entitled to enter and to authorize others to enter upon the premises or any part thereof for the purpose of performing or observing any such defaulted covenant, condition or term, without thereby becoming liable to the Grantor or any other person in possession holding under the Grantor.

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1.8   Condemnation.   Grantor, immediately upon obtaining knowledge of the institution any proceedings for the condemnation of the premises or any portion thereof, shall notify Grantor of the pendency of such proceedings. The Grantee is entitled to all compensation, awards, and other payments or relief thereof and is hereby authorized, at its option, to commence, appear in and prosecute, in its own or the Grantor’s name, any action or proceeding relating to any condemnation, and to settle or compromise any claim in connection therewith. All such compensation, awards, damages, claims, rights of action and proceeds and the right thereto are hereby assigned by the Grantor to the Grantee, who, after deducting therefrom all its reasonable, out-of-pocket expenses, including reasonable attorney’s fees, may release any monies so received by it without affecting the security interest of this deed and may apply the same in such manner as the Grantee reasonably determines to the reduction of the indebtedness secured hereby, to any prepayment fee herein or in the Note provided and any balance of such monies then remaining will be paid to the Grantor.

1.9   Authority.   Grantor hereby warrants and represents that: the execution and delivery of this Security Deed and Note have been duly authorized and that there is no provision in Grantor’s articles or certificate of incorporation or by-laws, as same may have been amended, requiring further consent for such action by any other entity or person; Grantor is duly organized, validly existing and in good standing under the laws of the State of Georgia and has (a) all necessary licenses, authorizations, registrations and approvals and (b) full power and authority to own its properties and carry on its business as presently conducted; and the execution and delivery by and performance of its obligations under this Security Deed will not result in Grantor being in default under any provision of its articles or certificate of incorporation or by-laws, as the same may have been amended, or any other security deed, mortgage, deed of trust or security, credit or other agreement to which it is a party. Grantor further warrants and represents that Grantor may reasonably be expected to benefit, directly or indirectly, from granting a lien or security interest in the Property or other assets of Grantor as security for the Note, and it is in the best interest of Grantor for Grantor to grant such lien and security interest.

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1.10   Security Agreement.

(a)      Insofar as the machinery, apparatus, goods, chattels, equipment, fittings, fixtures, building supplies and materials, articles of personal property, contract rights, accounts and general intangibles either referred to or described in this Security Deed, or in any way connected with the use and enjoyment of the premises is concerned, this Security Deed is hereby made and declared to be a security agreement, encumbering each and every item of personal property included herein, in compliance with the provisions of the Uniform Commercial Code as enacted in the State of Georgia. Grantor and Grantee shall execute and file a financing statement or statements reciting this Security Deed to be a security agreement affecting all of said personal property aforementioned. The remedies for any violation of the security agreement herein contained are (i) as prescribed herein, (ii) as prescribed by general law, and (iii) as prescribed by the specific statutory consequences now or hereafter enacted and specified in said Uniform Commercial Code, all at Grantee’s sole election. The filing of such financing statement(s) in the records normally having to do with personal property shall never be construed as in anywise derogating from or impairing this declaration and hereby stated intention of Grantor and Grantee that everything used in connection with the production of income from the premises and/or adapted for use therein and/or which is described or reflected in this Security Deed, is, and at all times and for all purposes and in all proceedings both legal or equitable will be, regarded as part of the real estate irrespective of whether (a) any such item is physically attached to the premises, (b) serial numbers are used for the better identification of certain items capable of being thus identified in a recital contained herein, or (c) any such item is referred to or reflected in any such financing statement(s) so filed at any time. Similarly, the mention in any such financing statement(s) of the rights in and to (aa) the proceeds of any applicable fire, casualty and/or hazard insurance policy, or (bb) any award in condemnation proceedings for a taking or for loss of value, or (cc) Grantor’s interest as lessor in any present or future lease or rights to income growing out of the use and/or occupancy of the premises, whether pursuant to lease or otherwise, shall never be construed as in anywise altering any of the rights of Grantee as determined by this instrument or impugning the priority of Grantee’s lien granted hereby or by any other recorded document, but such mention in such financing statement(s) is declared to be for the protection of Grantee in the event any court shall at any time hold with respect to the aforegoing (aa), (bb) or (cc), that notice of Grantee’s priority of interest to be effective against a particular class of persons, must be filed in the Uniform Commercial Code records. This Security Deed, upon filing, shall constitute a “fixture filing” pursuant to Section 11-9-502(c) of the Uniform Commercial Code. For purposes of satisfaction of the requirements of said section, the names and addresses of Grantor, as “debtor”, the Grantee, as “secured party” are set forth in the introductory paragraph to this Security Deed and the “secured property” is all of the premises that are or are to become fixtures.

(b)      The assignment and security interest herein granted will not be deemed or construed to constitute Grantee as a “trustee in possession” of the premises, to obligate Grantee to lease the premises or attempt to do same, or to take any action, incur any expense or perform or discharge any obligation, duty or liability whatsoever under any of the leases or otherwise.

1.11   Assignment of Rents.   Grantor hereby assigns to Grantee, as further security for the payment of the indebtedness secured hereby, the rents, rental payments and charges, issues and profits of the premises, together with all leases and other documents evidencing such rents, rental payments and charges, issues and profits now or hereafter in effect and any and all deposits held as security under said leases and other documents. Nothing contained in the foregoing sentence will be construed to bind Grantee to the performance of any of the covenants, conditions or provisions contained in any such lease or other document or otherwise to impose any obligation on Grantee, except that Grantee is accountable for any money actually received pursuant to such assignment. Grantee may (i) to enter upon and take possession of the premises for the purpose of collecting the said rents, rental payments and charges, issues and profits, (ii) to dispossess by the usual summary proceedings any tenant or occupant defaulting in the payment thereof to Grantee, (iii) to let the premises, or any part thereof, and (iv) to apply said rents, rental payments and charges, issues and profits, after payment of all necessary charges and expenses, on account of said indebtedness. Such assignment and grant will continue in effect until the indebtedness secured hereby is paid. Until the occurrence of a default hereunder, Grantor is entitled to collect and receive said rents, rental payments and charges, issues and profits. Grantor agrees to use said rents, rental payments and charges, issues and profits in payment of principal and interest becoming due under this Security Deed and in payment of taxes, assessments, water rates, sewer rents and carrying charges becoming due against the premises. Grantee may revoke such right of Grantor to collect and receive such rents, rental payments and charges, issues and profits upon the occurrence of a default hereunder by giving written notice of such revocation, served personally upon or sent by registered or certified mail to the record owner of the premises.

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1.12   Leases and Other Agreements Effecting the Property.   Grantor shall use commercially reasonable effort to duly and punctually perform all terms, covenants, conditions and agreements binding upon it under any lease or any other agreement of any nature whatsoever which involves or effects the premises or any part thereof. Grantor shall, at the request of Grantee, furnish Grantee with executed copies of all Leases now or hereafter created upon the premises or any part thereof. No substantive modifications of any present or future lease may be made without Grantee’s consent. Any and all leases must contain language subordinating such lease, at the option of Grantee, to the lien and security title of the Security Deed.

ARTICLE II

2.1   Event of Default.   An event of default under this Security Deed shall occur if an “Event of Default” occurs under that certain Loan Agreement, dated effective on or about the date hereof, by and between, among others, Grantor, Borrower and Grantee, but subject, in any event, to all applicable notice and cure periods under the Loan Agreement.

2.2   Intentionally Deleted.

2.3   Right of Grantee to Enter and Take Possession

(a)      If any event of default occurs and is continuing, after the expiration of all applicable notice and cure periods, the Grantor, upon demand of the Grantee, must forthwith surrender to the Grantee the actual possession of the premises and if, and to the extent, permitted by law, the Grantee may enter and take possession of the premises and may exclude the Grantor and the Grantor’s agents and employees wholly therefrom. Upon every such entering and taking of possession, the Grantee may hold, store, use, operate, manage, control and maintain the premises and conduct the business thereof, and from time to time;

(i)   make all necessary and proper repairs, renewals, replacements, additions, betterments and improvements thereto and thereon and purchase or otherwise acquire additional fixtures, personalty and other property,

(ii)   insure or keep the premises insured,

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(iii)   manage and operate the premises and exercise all the rights and powers of the Grantor in its name or otherwise, with respect to the same, and

(iv)   enter into any and all agreements with respect to the exercise by others of any of the powers herein granted the Grantee, all as the Grantee may from time to time reasonably determine to be to its best advantage;

and the Grantee may collect and receive all of the income, rents, rental payments and charges, profits, issues and revenues of the premises, including those past due as well as those accruing thereafter and, after deducting

(aa)   all actual and reasonable expenses of taking, holding, managing and operating the premises (including reasonable compensation for the services of all persons employed for such purposes);

(bb) the actual and reasonable cost of all such maintenance, repairs, renewals, replacements, additions, betterments, improvements, purchases, and acquisitions;

(cc)   the reasonable cost of such insurance;

(dd)   such taxes, assessments and other reasonable, out-of-pocket charges prior to the lien of this Security Deed as the Grantee may reasonably determine to pay,

(ee)   other proper and reasonable charges upon the premises or any part thereof, and

(ff)   the reasonable compensation and expenses of attorneys and agents of the Grantee, shall apply the remainder of the money so received by the Grantee, first to the payment of accrued interest and late charges, and finally to the payment of overdue installments of principal.

(b)   For the purpose of carrying out the provisions of this Paragraph 2.3, the Grantor hereby constitutes and appoints the Grantee the true and lawful attorney in fact of the Grantor to do and perform, from time to time, any and all actions necessary and incidental to such purpose and does, by these presents, ratify and confirm any and all actions of said attorney in fact in the premises, provided, however, it is expressly agreed and acknowledged that such appointment is only effective after and during the continuation of an event of default.

(c)   Whenever all such events of default are cured and satisfied, the Grantee shall surrender possession of the premises to the Grantor, provided that the right of the Grantee to take possession, from time to time, pursuant to subparagraph 2.3(a) shall exist if any subsequent event of default.

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2.4   Appointment of a Receiver; Collection of Rents, Issues, Profits and Revenues.   If an event of default occurs and is continuing, after the expiration of all applicable notice and cure periods, the Grantee, is entitled without notice to obtain from any court of competent jurisdiction the appointment of a trustee, receiver, liquidator or conservator of the premises, without regard for the adequacy of the security for the indebtedness secured hereby and without regard for the solvency of Grantor or any other person, firm or other entity liable for the payment of the indebtedness secured hereby, and without regard for any other statutory or common law requirements otherwise applicable to the appointment of a trustee, receiver, liquidator or conservator, to take possession of and to operate the premises and to collect the rents, profits, issues, and revenues thereof; all such rents, issues, profits and revenues so collected by such trustee, receiver, liquidator or conservator are deemed to be collected and held by such receiver for the benefit of Grantee and applied in the manner provided in subparagraph 2.3(a). The Grantor will pay to the Grantee upon demand all reasonable, out-of-pocket expenses, including reasonable receiver’s fees, attorneys’ fees, costs and agents’ compensation, incurred pursuant to the provisions in this Paragraph 2.4; and all such expenses shall be secured by this Security Deed. In the event that the rents, rental payments and charges, issues, profits and revenues of the premises are collected by a trustee, receiver, liquidator or conservator (whether appointed pursuant to the provisions of subparagraph 2.4(a) or otherwise), or a trustee or a debtor in possession pursuant to a bankruptcy, arrangement, reorganization or insolvency proceedings, all such rents, rental payments and charges, issues, profits and revenues so collected deemed to be collected and held by such receiver, liquidator, conservator, trustee or debtor in possession for the benefit of Grantee and shall be applied in the manner provided in subparagraph 2.3(a)

2.5   Power of Sale.   When the indebtedness secured hereby becomes due, whether by acceleration or otherwise, the Grantee, at its option, may sell the premises or any part of the premises at public sale or sales before the door of the courthouse of the County in which the premises or any part of the premises is situated, to the highest bidder for cash, in order to pay the indebtedness secured hereby and any other amounts due thereon or thereunder and insurance premiums, liens, assessments, taxes and charges, including utility charges, if any, with accrued interest thereon, and all expenses of the sale and of all proceedings in connection therewith, including reasonable attorney’s fees, if incurred, after advertising the time, place and terms of sale once a week for four (4) weeks immediately preceding such sale (but without regard to the number of days) in a newspaper in which Sheriff’s sales are advertised in said County. The Grantee may bid for and acquire the premises or any part thereof and in lieu of paying cash therefor may make settlement for the purchase price by crediting upon the indebtedness secured by this Security Deed the net sales price after deducting therefrom the expenses of the sale and the costs of the action and any other sums which Grantee is authorized to deduct under this Security Deed. In case Grantee shall have proceeded to enforce any right, power or remedy under this Security Deed by foreclosure, entry or otherwise, or in the event Grantee commences advertising of the intended exercise of the sale under power provided hereunder, and such proceeding or advertisement shall have been withdrawn, discontinued or abandoned for any reason, or shall have been determined adversely to Grantee, then in every such case, (i) all rights, powers and remedies of Grantee shall continue as if no such proceeding had been taken, (ii) neither this Security Deed, nor the Note, nor the secured indebtedness, nor any other instrument concerned therewith, shall be or shall be deemed to have been reinstated or otherwise affected by such withdrawal, discontinuance or abandonment; and Grantor hereby expressly waives the benefit of any statute or rule of law now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the above.

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2.6   Authority to Convey.   At any such public sale, the Grantee may execute and deliver to the purchaser a conveyance of the premises or any part of the premises in fee simple with full warranties of title and to this end, the Grantor hereby constitutes and appoints the Grantee the agent and attorney in fact of the Grantor to make such sale and conveyance, and thereby to divest the Grantor of all right, title and equity that the Grantor may have in and to the premises and to vest the same in the purchaser or purchasers at such sale or sales, and all the acts and doings of said agent and attorney in fact are hereby ratified and confirmed and any recitals in said conveyance or conveyances as to facts essential to a valid sale shall be binding on the Grantor. The aforesaid power of sale and agency hereby granted are coupled with an interest and are irrevocable by death or otherwise, are granted as cumulative of the other remedies provided by law for collection of the indebtedness secured hereby and shall not be exhausted by one exercise thereof but may be exercised until full payment of all sums secured hereby

2.7   Application of the Proceeds of Sale.   Upon any such public sale pursuant to the aforementioned power of sale and agency, the proceeds of said sale are applied first to payment of the reasonable expenses of such sale and of all proceedings in connection therewith, including reasonable attorneys’ fees, then to that portion of the indebtedness secured hereby which represents accrued unpaid interest and late charges, then to the remaining indebtedness secured hereby, and finally, the remainder, if any, are paid to the Grantor.

2.8   Grantor as Tenant Holding Over.   If a public sale under the aforesaid power of sale and agency occurs, the Grantor is deemed a tenant holding over and shall forthwith deliver possession to the purchaser or purchasers at such sale or be summarily dispossessed according to the provisions of law applicable to tenants holding over.

2.9   No Effect.   No recovery of any judgment by Grantee against Borrower or Grantor and no levy of an execution under any judgment upon the Secured Property or upon any other property of Borrower or Grantor shall affect in any manner or to any extent, the lien and title of this Security Deed upon the Secured Property or any part thereof, or any liens, titles, rights, powers or remedies of Grantee hereunder, but such liens, titles, rights, powers and remedies of Grantee shall continue unimpaired as before.

2.10   Tenants.   Grantee, at its option, is authorized to foreclose this Security subject to the rights of any tenants of the Secured Property, and the failure to make any such tenants parties to any such foreclosure proceedings and to foreclose their rights will not be, nor be asserted to be by Grantor, a defense to any proceedings instituted by Grantee to collect the sums secured hereby.

2.11   Discontinuance of Proceedings and Restoration of the Parties.   If the Grantee proceeds to enforce any right or remedy under this Security Deed by receiver, entry or otherwise, and such proceedings are discontinued or abandoned for any reason or determined adversely to the Grantee, then and in every such case the Grantor and the Grantee are restored to their former positions and rights hereunder, and all rights, powers and remedies of the Grantee continue as if no such proceeding had been taken.

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2.12   Remedies Cumulative.   No right, power or remedy conferred upon or reserved by the Grantee by this Security Deed is intended to be exclusive of any other right, power or remedy, but each and every such right, power and remedy are cumulative and concurrent and in addition to any other right, power and remedy given hereunder or now or hereafter existing at law or in equity or by statute.

2.13   WAIVER.   BY EXECUTION OF THIS SECURITY DEED, GRANTOR EXPRESSLY: (A) ACKNOWLEDGES THE RIGHT TO ACCELERATE THE INDEBTEDNESS EVIDENCED BY THE NOTE AND THE POWER OF ATTORNEY GIVEN HEREIN TO GRANTEE TO SELL THE SECURED PROPERTY BY NONJUDICIAL FORECLOSURE UPON DEFAULT BY GRANTOR WITHOUT ANY JUDICIAL HEARING AND WITHOUT ANY NOTICE (EXCEPT AS OTHERWISE PROVIDED HEREIN); (B) EXCEPT TO THE EXTENT PROVIDED OTHERWISE HEREIN, WAIVES ANY AND ALL RIGHTS WHICH GRANTOR MAY HAVE UNDER THE CONSTITUTION OF THE UNITED STATES (INCLUDING THE FIFTH AND FOURTEENTH AMENDMENTS THEREOF), THE VARIOUS PROVISIONS OF THE CONSTITUTIONS FOR THE SEVERAL STATES, OR BY REASON OF ANY OTHER APPLICABLE LAW, TO NOTICE AND TO JUDICIAL HEARING PRIOR TO THE EXERCISE BY GRANTEE OF ANY RIGHT OR REMEDY HEREIN PROVIDED TO GRANTEE; (C) ACKNOWLEDGES THAT GRANTOR HAS READ THIS SECURITY DEED AND ITS PROVISIONS HAVE BEEN EXPLAINED FULLY TO GRANTOR AND GRANTOR HAS CONSULTED WITH COUNSEL OF GRANTOR’S CHOICE PRIOR TO EXECUTING THIS SECURITY DEED; AND (D) ACKNOWLEDGES THAT ALL WAIVERS OF THE AFORESAID RIGHTS OF GRANTOR HAVE BEEN MADE KNOWINGLY, INTENTIONALLY AND WILLINGLY BY GRANTOR AS PART OF A BARGAINED FOR LOAN TRANSACTION.

ARTICLE III

3.1   Successors and Assigns Included in Parties.   Whenever in this Security Deed one of the parties hereto is named or referred to, the heirs, legal representatives, successors and assigns of such parties are included and all covenants and agreements contained in this Security Deed by or on behalf of the Grantor and by or on behalf of the Grantee bind and inure to the benefit of their respective heirs, legal representatives, successors and assigns, whether so expressed or not.

3.2   Headings.   The headings of the sections, paragraphs and subdivisions of this Security Deed are for the convenience of reference only, are not to be considered a part hereof and do not limit or otherwise affect any of the terms of this Security Deed.

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3.3   Invalid Provisions to Affect No Others.   If fulfillment of any provision hereof or any transaction related hereto or to the Note, at the time performance of such provisions are due, involve transcending the limit of validity prescribed by law, then ipso facto, the obligation to be fulfilled will be reduced to the limit of such validity; and if any clause or provision herein contained operates or would prospectively operate to invalidate this Security Deed in whole or in part, then such clause or provision only will be held for naught, as though not herein contained, and the remainder of this Security Deed remains operative and in full force and effect.

3.4   Number and Gender.   Whenever the singular or plural number, masculine or feminine or neuter gender is used herein, it equally includes the other.

3.5   Severability.   Any provision of this Security Deed which is prohibited or unenforceable in any jurisdiction, is, as to such jurisdiction, ineffective to the extent of such prohibition or unenforceability without validating the remaining provisions hereof or effecting the validity or enforceability of such provisions in any other jurisdiction.

3.6   Legal Construction.   The enforcement of this Security Deed is governed, construed and interpreted by the laws of the State of Georgia. Nothing in this Security Deed, the Note or in any other agreement between Grantor and Grantee requires Grantor to pay, or Grantee to accept interest in an amount which would subject Grantee to any penalty under applicable law. If the payment of any interest due hereunder or under the Note or any such other agreement would subject Grantee to any penalty under applicable law, then automatically the obligations of Grantor to make such payment are reduced at the highest rate authorized under applicable law.

3.7   Controlling Document.   To the extent anything contained herein is inconsistent with or contrary to the terms of the Loan Agreement, the terms of the Loan Agreement shall control.

3.8   Partial Releases.   This Security Deed shall be subject to the Partial Release provisions of the Loan Agreement, subject to and conditioned upon satisfaction of each of the requirements contained in the Loan Agreement.

[SIGNATURES COMMENCE ON FOLLOWING PAGES]

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IN WITNESS WHEREOF, this Security Deed has been duly executed and sealed by Grantor; any such execution and sealing by a company has been carried out by its proper manager(s) or officer(s) thereunto duly authorized; the date and year first above written.

	GRANTOR:
Signed, sealed and delivered	Johns Creek 206, LLC
in the presence of:	a Georgia limited liability company
	By:	/s/ James R. Brickman	(SEAL)
		James R. Brickman, Manager
/s/ Richard A. Costello
Unofficial Witness
/s/ John E. Hampton
Notary Public
My Commission Expires:
January 31, 2016
[NOTARIAL SEAL]

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EXHIBIT “A”

LEGAL DESCRIPTION

ALL THAT TRACT OR PARCEL OF LAND lying and being in Land Lots 385, 386, 395,408,417 and 418 of the 1^st District – 1^st Section of Fulton County, Georgia and being more particularly described as follows:

BEGINNING at a concrete monument found at the corner common to Land Lots 372, 373, 384 and 385; thence running along the northerly line of Land Lots 385, 395 and 408 South 89 degrees 06 minutes 51 seconds East a distance of 4,002.45 feet to a concrete monument found at the corner common to Land Lots 407, 408, 417 and 418; thence running along the westerly line of Land Lot 418 North 01 degrees 39 minutes 24 seconds West a distance of 1,315.84 feet to a concrete monument found at the corner common to Land Lots 406, 407, 418 and 419; thence running along the northerly line of Land Lot 418 South 89 degrees 35 minutes 31 seconds East a distance of 1,407.17 feet to a 2” open top pipe found at the corner common to Land Lots 418, 419, 428 and 429; thence running along the easterly line of Land Lot 418 South 01 degrees 36 minutes 24 seconds East a distance of 1,285.57 feet to a 1/2” rebar and cap found at the corner common to Land Lots 417, 418, 429 and 430; thence running along the easterly line of Land Lot 417 South 01 degrees 09 minutes 09 seconds East a distance of 1,213.66 feet to a 1/2” open top pipe found at the corner common to Land Lots 416, 417, 430 and 431; thence running along the southerly line of Land Lot 417 North 89 degrees 49 minutes 39 seconds West a distance of 1,402.37 feet to a 1/2” open top pipe found at the corner common to Land Lots 408, 409, 416, and 417; thence running along the westerly line of Land Lot 417 North 01 degrees 18 minutes 39 seconds West a distance of 100.00 feet to an iron pin set; thence leaving said Land Lot Line South 89 degrees 58 minutes 45 seconds West a distance of 1,348.22 feet to an iron pin set on the westerly line of Land Lot 408; thence running along said westerly line of Land Lot 408 South 01 degrees 14 minutes 19 seconds East a distance of 100.00 feet to a 2” open top pipe found at the corner common to Land Lots 394, 395, 408 and 409; thence running along the southerly line of Land Lot 395 South 89 degrees 50 minutes 45 seconds West a distance of 1,319.52 feet to a 1/2” rebar found at the corner common to Land Lots 385, 386, 394 and 395; thence running along the easterly line of Land Lot 386 South 00 degrees 50 minutes 28 seconds East a distance of 1,392.53 feet to a 1/2” rebar found at the intersection of the easterly line of Land Lot 386 with the northeasterly R/W line of Bell Road (60’ R/W); thence running along said R/W line the following courses and distances: North 47 degrees 18 minutes 46 seconds West a distance of 172.24 feet to a point; thence running along a curve to the right an arc distance of 803.49 feet, said arc having a radius of 5,699.58 feet and a chord which bears North 43 degrees 16 minutes 28 seconds West a distance of 802.82 feet to a point; thence running North 39 degrees 14 minutes 09 seconds West a distance of 1,111.05 feet to an iron pin set at the intersection of the northeasterly R/W line of Bell Road with the westerly line of Land Lot 385; thence leaving said R/W line North 50 degrees 45 minutes 02 seconds East a distance of 543.30 feet to a 1/2” rebar found; thence running North 39 degrees 14 minutes 58 seconds West a distance of 667.26 feet to a 1/2” rebar found on the westerly line of Land Lot 385; thence running along said westerly line of Land Lot 385 North 00 degrees 09 minutes 18 seconds West a distance of 224.96 feet to the POINT OF BEGINNING.

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Said Tract or Parcel containing 206.405 acres.

LESS AND EXCEPT:

Pod D Phase I Lots: 53, 61, 62, 63, 64, 113, 114 Deed Book 54357, Page 609;

Phase I Lots: 65, 110, 111, 112, 121 Deed Book 54641, Page 236; 

Phase II Lots: 223, 239, 240, 241, 271, 272, 273 Deed Book 54700, Page 663;

Phase I (POD D Phase I) Lots: 52, 54 Deed Book 54792, Page 638; 

Phase II Lots: 266, 267, 268, 269, 270 Deed Book 54792, Page 638; 

Phase II Lots: 244, 246 Deed Book 54924, Page 79; (all the above lots are more particularly described on the below referenced plats which are incorporated herein and made a part hereof)

and

Dedication of right of ways and easements all as shown on those certain recorded plats of survey of The Palisades at Bellmoore Park Phase I aka Bellmoore Park Pod D Phase I recorded in Plat Book 379, Pages 37 through 59, Fulton County, Georgia records, and The Palisades at Bellmoore Park Phase II recorded in Plat Book 380, Pages 106 through 114, Fulton County, Georgia records.

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EXHIBIT B

1. Matters appearing on that certain recorded plat of survey styled Final Plat The Palisades at Bellmoore Park – Phase I a/k/a Belhnoore Park – Pod D – Phase I by Travis Pruitt & Associates, Inc. bearing the seal of H. Lanier Dunn GRLS # 2243 dated October 21, 2014, filed February 3, 2015 and recorded in Plat Book 379, Pages 37 through 59, Fulton County, Georgia records.

2. Matters appearing on that certain recorded plat of survey styled Final Plat The Palisades at Bellrnoore Park – Phase II by Travis Pruitt & Associates, Inc., bearing the seal of H. Lanier Dunn GRLS # 2243 dated March 16, 2015, filed April 9, 2015 and recorded in Plat Book 380, Pages 106 through 114, Fulton County, Georgia records.

3. Right of Way Easement from H. T. Nichols to Sawnee Electric Membership Corporation, dated June 15, 1963, filed August 6, 1963 and recorded in Deed Book 4101, Page 263, aforesaid records.

4. Right of Way Easement from William T. Healey III to Sawnee Electric Membership Corporation, dated September 15, 1980, filed September 19, 1980 and recorded in Deed Book 7648, Page 156, aforesaid records.

5. Right of Way Easement from William T. Healey III to Sawnee Electric Membership Corporation, dated November 24, 1980, filed December 15, 1980 and recorded in Deed Book 7726, Page 6, aforesaid records.

6. Right of Way Easement from Deen Day Smith to Sawnee Electric Membership Corporation, dated December 15, 1988, filed January 6, 1989 and recorded in Deed book 12180, Page 164, aforesaid records.

7. Right of Way Deed and easements from Deen Day Smith to Fulton County, dated March 10, 1989, filed May 25, 1989 and recorded in Deed Book 12524, Page 55, aforesaid records.

8. Sewer Easement from Deen Day Smith to Fulton County, Georgia, dated September 4, 1990, filed October 24, 1990 and recorded in Deed Book 13805, Page 180, aforesaid records.

9. Right of Way Deed and easements from William T. Healey, III to Fulton County, dated June 29, 1990, filed October 24, 1990 and recorded in Deed Book 13805, Page 245, aforesaid records.

10. Right of Way Easement from Deen Day Smith f/k/a Marian U. Day to Sawnee Electric Membership Corporation, dated July 15, 1994, filed November 18, 1994 and recorded in Deed Book 18982, Page 150, aforesaid records.

11. Water Reuse Line Easement between Day Family, LLLP a/k/a Day Family, LLLC, and Fulton County, a Political Subdivision of the State of Georgia, dated February 3, 2006, filed February 8, 2006 and recorded in Deed Book 41903, Page 51, aforesaid records.

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12. Matters appearing on plat of survey styled Pod Exhibit For Bellrnoore Park dated November 13, 2013, appearing in Deed Book 53346, Page 625, aforesaid records, attached to instrument recorded at Deed Book 53346, Page 608, aforesaid records.

13. Memorandum Of Agreement by Robert L. Williams and Deen Day Sanders, Trustees of The Deen Day Sanders Revocable Trust Dated July 29, 2010 in favor of Johns Creek 206, LLC, a Georgia Park - Pod D-Phase I recorded in Plat Book 379, Pages 37 through 59, aforesaid records, and the plat of The Palisades at Bellmoore Park – Phase II recorded at Plat Book 380, Pages 106 through 114, aforesaid records, include property in Land Lot 416.

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