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HomeMy WebLinkAboutResolution 2022-092 Approving and Authorizing the Town Manager to Execute the Lessor's Consent to Leasehold Deed of Trust and Estoppel Certificate MARANA RESOLUTION NO. 2022-092 RELATING TO MARANA REGIONAL AIRPORT; APPROVING AND AUTHORIZING THE TOWN MANAGER TO EXECUTE THE LESSOR'S CONSENT TO LEASEHOLD DEED OF TRUST AND ESTOPPEL CERTIFICATE FOR THE BENEFIT OF WESTERN ALLIANCE BANK, RELATED TO THE MARANA REGIONAL AIRPORT LEASE AGREEMENT WITH THE J.D. RUSSELL COMPANY FOR THE LEASE OF APPROXIMATELY 1.078 ACRES OF REAL PROPERTY LOCATED AT 11155 N. AIR COMMERCE WAY AT THE MARANA REGIONAL AIRPORT WHEREAS the Town of Marana and The J.D. Russell Company ("JDR") are parties to a lease agreement entitled "Marana Regional Airport Lease Agreement" with an Effective Date of June 17, 2020 (the "Lease"), by which the Town leases to JDR approximately 1.078 acres of real property located at 11155 N. Air Commerce Way at the Marana Regional Airport, 11700 West Avra Valley Road, Town of Marana; and WHEREAS paragraph 10.3 of the Lease provides that JDR may mortgage, encumber or assign any portion of its right, title and interest in the leasehold estate created by the Lease to lenders for purposes of financing the construction of any capital improvements; that any such mortgage, encumbrance or assignment shall be subject to all of JDR's obligations under the Lease; and that no person or entity shall have the right to place any mortgages, deeds of trusts, liens or encumbrances of any nature on the property subject to the Lease, nor shall any permitted assignment result in a subordination, in whole or in part, of the Town's rights under the Lease; and WHEREAS JDR has agreed to provide a Leasehold Deed of Trust to Western Alliance Bank (the "Bank") encumbering JDR's leasehold interest in the Lease in exchange for the Bank providing financing to JDR; and WHEREAS JDR and the Bank have requested that the Town as lessor consent to the Leasehold Deed of Trust; and WHEREAS the Mayor and Council of the Town of Marana find that approving the Lessor's Consent to Leasehold Deed of Trust and Estoppel Certificate is in the best interests of the Town of Marana and its citizens. Marana Resolution No.2022-092 1 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COUNCIL OF THE TOWN OF MARANA, AS FOLLOWS: SECTION 1. The Lessor's Consent to Leasehold Deed of Trust and Estoppel Certificate for the benefit of Western Alliance Bank attached to and incorporated within this resolution as Exhibit A is hereby approved and the Town Manager is authorized and directed to execute it for and on behalf of the Town of Marana. SECTION 2. The Town Manager and staff are hereby directed and authorized to undertake all other and further tasks required or beneficial to carry out the terms, obligations, conditions and objectives of the Lessor's Consent to Leasehold Deed of Trust and Estoppel Certificate. PASSED AND ADOPTED by the Mayor and Council of the Town of Marana, Arizona, this 6th day of September 2022. tel -- t Mayor Ed Honea ATTEST: APPROVED AS TO FORM: 4111, David Udall, Interim Town Clerk Ja► - airall, Town Attorney Ae466- Com• MARANA AZ ESTABLISHED 1977 Marana Resolution No.2022-092 2 LESSOR'S CONSENT TO LEASEHOLD DEED OF TRUST AND ESTOPPEL CERTIFICATE The undersigned Lessor hereby consents to the Deed of Trust attached hereto as Exhibit B (the "Deed of Trust"), and the terms and conditions set forth therein and hereby agrees, warrants, represents and certifies to Beneficiary as follows: A. Consent. TOWN OF MARANA, an Arizona municipal corporation (the "Lessor"), the Lessor named in that certain Marana Regional Airport Lease Agreement dated on or about June 17, 2020 (as amended by the First Amendment to Marana Regional Airport Lease Agreement dated December 8, 2021, and as memorialized by that certain Memorandum of Lease dated June 22, 2022,and recorded ,2022,at Instrument No. in the Official Records of Pima County, Arizona, as it may be further amended, the "Lease"), which encumbers the real property more particularly described on Exhibit A, attached hereto (the "Property"), does hereby consent to the encumbrance of the Lease of The J.D. Russell Company, a Michigan corporation (the "Trustor"), pursuant to the recordation of the Deed of Trust, for the benefit of WESTERN ALLIANCE BANK, an Arizona corporation (the "Beneficiary"), upon the following terms and conditions: 1. Enforcement of Deed of Trust. In the event of any default by the Trustor under the Deed of Trust, the Beneficiary shall have the right to enforce the Deed of Trust and acquire title to the leasehold estate in any lawful way, and pending foreclosure of the Deed of Trust may take possession of and rent the premises demised by the Lease, and upon foreclosure thereof or assignment of the Lease to the Beneficiary in lieu of foreclosure, the Beneficiary may, subject to the terms and conditions of the Lease, and all covenants, conditions and restrictions encumbering the Property, sell and assign the leasehold estate to a new assignee by assignment, provided that such assignee is capable of complying with all applicable Federal Aviation Administration(FAA) rules and regulations governing the Property, and upon not less than ten (10) Business Days prior written notice to Lessor. In addition, in the assignment, the assignee shall expressly assume and agree to observe and perform all of the covenants of the lessee under the Lease, and such assignee may make a purchase money deed of trust of the Lease to the Beneficiary, provided that upon execution of any such assignment of deed of trust, a true copy thereof shall be delivered promptly to the Lessor and that no other or further assignment of the Lease for which any provision of the Lease requires the Lessor's written consent shall be made without such consent. The Beneficiary or any tenant of the Beneficiary pending foreclosure shall be liable to perform the obligations imposed upon the lessee by the Lease only during the period such party has possession or ownership of the leasehold estate. Nothing contained in the Deed of Trust shall release or be deemed to relieve the Trustor from the full and faithful observance and performance of the lessee's covenants under the Lease or from any liability for the nonobservance or nonperformance thereof, nor be deemed to constitute a waiver of any rights of the Lessor under the Lease, and the terms, covenants and conditions of the Lease shall control in case of any conflict with the provision of the Deed of Trust, except as herein set forth. 2. Protection of Beneficiary. No agreement between the Lessor and the Trustor modifying,cancelling or surrendering the Lease shall be effective without the prior written consent of the Beneficiary, which shall not be unreasonably withheld. Lessor shall take no action to terminate or cancel the Lease for any reason including a breach by the Trustor unless and until it shall have given Beneficiary thirty(30)days'prior written notice advising Beneficiary of the action proposed to be taken and the reasons thereof. During such thirty(30)day period, Beneficiary may, at its own option, without relieving the Trustor of any of its obligations under any Loan Document, take any actions necessary in order to eliminate the reasons for the proposed action of Lessor. In the event of the bankruptcy of the Trustor, the Lessor agrees to extend the two hundred ten(210)day limitation period under Section 365(d)(4)of the Bankruptcy Code for such period of time as is reasonable and necessary for the Beneficiary to perform the undertakings agreed upon in the paragraph immediately below, provided that all rent and other charges due under the Lease are paid. In consideration of the Lessor's agreement in the paragraph immediately above and to the "New Lease" provisions in favor of the Beneficiary contained in paragraph (a)below, in the event the Beneficiary elects to pursue its rights and remedies in and to the Deed of Trust,the Beneficiary does hereby undertake and agree for the benefit of Lessor that if at any time a bankruptcy proceeding shall be commenced concerning the Trustor and/or the leasehold estate that the Beneficiary shall use its reasonable efforts to diligently and in good faith, obtain or cause the Trustor and/or Trustee in Bankruptcy to obtain within the statutory time period or any extension thereof provided under Section 365 of the Bankruptcy Code for the rejection or assumption of leases,: (i) an extension of the period during which the Lease may be assumed or rejected as ordered by the Court; or (ii) an abandonment of the leasehold estate by the bankruptcy court pursuant to Section 554 of the Bankruptcy Code, as amended; or (iii) an assumption or assumption and assignment of the Lease pursuant to Section 365 of the Bankruptcy Code, as amended. In the event that, notwithstanding the Beneficiary's compliance with the provisions immediately preceding, an actual or deemed rejection of the Lease shall occur under any provision of the Bankruptcy Code (Title 11, United States Code)or any successor law having similar effect, then, and in any such event, the Beneficiary (or the first Beneficiary if more than one) shall thereupon have the option to obtain a new lease("New Lease")of the Property in accordance with and upon the following terms and conditions: (a) Within sixty (60) days after the Beneficiary has delivered to the Lessor written request for a New Lease(such written request to be delivered to Lessor within sixty (60) days after the Beneficiary receives from the Lessor written notice of the actual or deemed rejection of the Lease), Lessor shall enter into a New Lease of the Property with such Beneficiary,or its designee,provided,however,that if Lessor receives no such written request within said sixty (60) day period, then all of Beneficiary's rights to a New Lease hereunder shall automatically terminate. (b) Such New Lease shall be effective as of the date of the actual or deemed rejection of the Lease and shall be for the remainder of the term of the Lease at the same rent, additional rent and other charges therein provided and otherwise upon the same agreements, terms, covenants and conditions contained therein, except that the New Lease shall also include an additional indemnity paragraph under the terms of which the lessee shall indemnify and hold the Lessor harmless from and against all claims, demands or liability whatsoever(except those arising from the negligence or misconduct of Lessor)by whomsoever made for loss or damage arising out of or in connection with the issuance of the New Lease and will promptly reimburse Lessor for its costs and expenses, including reasonable attorney's fees, incurred in connection with the defense of any such claims. The New Lease issued hereunder shall have the same relative priority in time and right as the Lease and have the benefit of and vest in the Beneficiary(or first Beneficiary if more than one) all of the same rights, title, interest, powers and privileges of the Trustor under the Lease. The New Lease shall, subject to the same agreements, terms, covenants and conditions contained in the Lease, also demise to the Beneficiary or its designee all buildings, improvements and appurtenances situated on the Property, together with all equipment,fixtures and machinery therein. Concurrently with execution of the New Lease, Lessor shall assign its interest in and to any then existing sublease under which the tenant has attorned to and been recognized by Lessor. During the period between the actual or deemed rejection of the Lease and execution of the New Lease, Lessor shall not amend or modify the subleases or take any action which will adversely affect the Property or give rise to any liens against the Property. (c) As a condition to and concurrently with delivery of said New Lease, the lessee named therein shall pay any and all sums which would at the time of the execution thereof be due under the Lease but for the rejection as aforesaid, and shall fully otherwise remedy any existing defaults under the Lease susceptible of cure by Beneficiary, or such designee, and shall pay to Lessor all costs and expenses, including but not limited to any insurance premiums paid or incurred by Lessor in order to maintain the insurance coverage required under the terms of the Lease, and the reasonable attorney's fees and costs incurred by Lessor in connection with the preparation, execution and delivery of such New Lease. Any default which cannot be cured by such lessee until it obtains possession shall be cured by the lessee within a reasonable time after it obtains possession. (d) The Beneficiary, if it is the initial lessee under the New Lease, may assign such New Lease to a new assignee by assignment, provided that such assignee is capable of complying with all applicable Federal Aviation Administration (FAA) rules and regulations governing the Property, and upon not less than ten (10) Business Days prior written notice to Lessor. In addition,in the assignment,the assignee shall expressly assume and agree to observe and perform all of the covenants of the lessee under the Lease, and Beneficiary shall thereupon be released from all liability for the performance or observance of the covenants and conditions in such New Lease contained and on the lessee's part to be performed and observed from and after the date of such assignment, provided that a certified copy of such assignment be provided to Lessor. Ownership by or for the same person of both the fee and leasehold estates in the Property shall not effect the merger thereof, without the prior written consent of any beneficiary of either such estate to such merger. B. Estoppel Certificate. The Lessor hereby certifies to the Beneficiary that (1) the Lease is in full force and effect and unmodified by any instruments, except as hereinabove provided, and will not be further modified or amended without the Beneficiary's written consent, so long as the Beneficiary remains in effect; (2)the Trustor is not in default in the payment of rent under the Lease or, to the best of Lessor's knowledge, in the performance or observance of any covenant or condition to be performed or observed by the lessee thereunder; (3) no event has occurred which authorizes, or with the lapse of time will authorize, the Lessor to terminate the Lease; (4) the execution and delivery by the Trustor of the Deed of Trust will constitute neither a breach of the Trustor's obligations as lessee under the Lease, nor an event of default thereunder; and (5) a copy of any notice to be sent by the Lessor to the Trustor pursuant to the Lease shall be sent by the Lessor to the Beneficiary. As used herein,the terms "Lessor", "Trustor"and "Beneficiary" shall mean and include the Lessor, the Trustor and the Beneficiary named above and their respective heirs, executors, administrators, successors, successors in trust and assigns. Where there is more than one Lessor, Trustor or Beneficiary,the use of the singular shall be construed to include the plural wherever the context shall so require. The use of any gender herein shall include all genders. This consent is given upon the understanding and condition that should there be any conflict between the terms of the Lease and the terms of the Deed of Trust,the Lease shall control, except as hereinabove set forth; and that nothing herein shall be construed as being a waiver of any of the terms, covenants and conditions of the Lease. c- IN WITNESS WHEREOF, the Lessor has executed this Consent on the 7 th day of Septcm he( 2022. TOWN OF MARANA, an Arizona municipal corporation By: L : — Name: ERR S RoZe A4A Title: ow ItilAffrEIMII "LESSOR" STATE OF ARIZONA ) ) ss. County of Pima ) The foregoing instrument was acknowledged before me this 7 day of , 2022, by Terry S. Roumo� , the To OA) MM0A 2E'rt, of the Torn of Marana, an Arizona municipal corporation, on behalf of the corporation. Notary Public My Commission Expires: 3/17/ay Diane Mangialardi Notary Public < Pima County,Arizona >.� r z My Comm.Expires 03-17-24 O .2 ° Commission No.580297 EXHIBIT A LEGAL DESCRIPTION [See Attached] EXHIBIT B Deed of Trust [See Attached] EXHIBIT A LEGAL DESCRIPTION THE"REAL PROPERTY" FOR PURPOSES OF THIS DEED OF TRUST IS TRUSTOR'S LEASEHOLD INTEREST IN THE APPROXIMATELY 1.078 ACRES OF LAND SITUATED IN THE COUNTY OF PIMA, STATE OF ARIZONA, AND DESCRIBED AS FOLLOWS: Parcel 1: That Portion of the North Half(N2) of Section 10, Township 12 South, Range 11 East, Gila and Salt River Meridian, Pima County, Arizona, and also being a portion of that 32.72 acre parcel described in Docket 11122 at page 1560 and shown as parcel 2B on Record of survey recorded at Seq. 20133610161 described as Follows: Commencing at the Northwest Corner of Said Section 10, Thence upon the North Line of said Section 10, North 89°26'42" East, a distance of 1317.39 feet to the Northwest Corner of the East Half of the Northwest Quarter(E2NW4) of said Section 10; Thence continuing upon said North Line of Section 10, North 89°26'42" East, a distance of 404.15'feet; Thence South 00°34'21"East, a distance of 7.98 feet; Thence South 45°05'10"West, a distance of 284.70'feet; Thence South 44°53'50"East, a distance of 765.03 feet to the POINT OF BEGINNING; Thence continuing South 44°53'50"East, a distance of 125.00 feet Thence North 45°05'10"East, a distance of 284.70' feet; Thence North 44°53'50"West, a distance of 125.00 feet; Thence South 45°05'10"West, a distance of 284.70'feet to the POINT OF BEGINNING; EXCEPT all coal and other minerals as reserved in the patent to said land. Parcel 2: That portion of the parcel described in Docket 11122 at page 1560, Pima County Records, located in the Northwest quarter of Section 10, Township 12 South, Range 11 East, Gila and Salt River Meridian, Pima County, Arizona, being more particularly described as follows: Commencing at the West one-quarter corner of said Section 10, said point being a 2" brass cap stamped "T.O.M.", from which the Center one-quarter corner of said Section 10 bears North 89°24'46" East at 2,638.51 feet distant, said point being 2" brass cap stamped "T.O.M."; Thence, North 89°24'46" East, 2142.14 feet, upon the South line of the Northwest quarter of said Section 10; Thence, North 00°35'14" West, 1798.65 feet to an 80d nail, tagged "LS 24530" at the South corner of the "5 Acre Plot" Parcel, as described in that non-recorded Legal Description by Aztec Land Surveying Inc., dated May 22, 2020, being the Point of Beginning; Thence, upon the Southeast line of said"5 Acre Plot' Parcel,to a 1/2" rebar tagged"LS 24530",to the East corner thereof, North 45°06'10" East, 284.70 feet; Thence, South 44°53'50" East, 40.00 feet; Thence South 45°06'10"West, 284.70 feet; Thence, North 44°53'50"West, 40.00 feet to the Point of Beginning. APN: 215-10-0530 (covers more property) RECORDATION REQUESTED BY: Western Alliance Bank, an Arizona corporation TUCSON WILLIAMS CENTRE 200 S. CRAYCROFT ROAD TUCSON, AZ 85711 WHEN RECORDED MAIL TO: Western Alliance Bank, an Arizona corporation TUCSON WILLIAMS CENTRE 200 S. CRAYCROFT ROAD TUCSON, AZ 85711 FOR RECORDER'S USE ONLY DEED OF TRUST THIS DEED OF TRUST is dated , 2022, among The J. D. Russell Company, a Michigan corporation, whose address is 4075 N. Highway Drive,Tucson, AZ 85705 ("Trustor");Western Alliance Bank, an Arizona corporation, chartered in the United States of America under the laws of the State of Arizona,whose address is TUCSON WILLIAMS CENTRE, 200 S. CRAYCROFT ROAD, TUCSON, AZ 85711 (referred to below sometimes as"Lender"and sometimes as"Beneficiary"); and Western Alliance Bank, an Arizona corporation, organized or registered in the United States of America under the laws of the State of Arizona, whose address is 1 East Washington Street#100, Phoenix, AZ 85004(referred to below as "Trustee"). CONVEYANCE AND GRANT. For valuable consideration, Trustor conveys to Trustee in trust, with power of sale, for the benefit of Lender as Beneficiary, all of Trustor's right, title, and interest in. to and under the Lease described herein of the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements, rights of way, and appurtenances; and together with all rights (but none of the duties) of Trustor as declarant under any presently recorded declaration of covenants, conditions and restrictions affecting real property; and all other rights, royalties, and profits relating to the real property, including without limitation any rights Trustor later acquires in the fee simple title to the land, subject to the Lease,and all minerals, oil, gas, geothermal and similar matters, (the "real property") located in Pima County, State of Arizona: See Exhibit A, which is attached to this Deed of Trust and made a part of this Deed of Trust as if fully set forth herein. The Real Property or its address is commonly known as 11155 N. Air Commerce Way, Marana, AZ 85653. The Real Property is a leasehold interest in a 1.078 portion of the approximately 19.9 acre parcel of land bearing tax identification number 215-10-0530. Trustor presently assigns to Lender (also known as Beneficiary in this Deed of Trust) all of Trustor's right, title, and interest in and to all present and future leases of the Property and all Rents from the Property. In addition, Trustor grants to Lender a Uniform Commercial Code security interest in the Personal Property and Rents. THIS DEED OF TRUST, INCLUDING THE ASSIGNMENT OF RENTS AND THE SECURITY INTEREST IN THE RENTS AND PERSONAL PROPERTY, IS GIVEN TO SECURE (A) PAYMENT OF THE INDEBTEDNESS AND (B) PERFORMANCE OF ANY AND ALL OBLIGATIONS UNDER THE NOTE, THE RELATED DOCUMENTS, AND THIS DEED OF TRUST. THIS DEED OF TRUST IS GIVEN AND ACCEPTED ON THE FOLLOWING TERMS: PAYMENT AND PERFORMANCE. Except as otherwise provided in this Deed of Trust, Trustor shall pay to Lender all amounts secured by this Deed of Trust as they become due, and shall strictly and in a timely manner perform all of Trustor's obligations under the Note, this Deed of Trust, and the Related Documents. POSSESSION AND MAINTENANCE OF THE PROPERTY. Trustor agrees that Trustor's possession and use of the Property shall be governed by the following provisions: Possession and Use. Until the occurrence of an Event of Default, Trustor may (1) remain in possession and control of the Property; (2) use, operate or manage the Property; and (3) collect the Rents from the Property. Duty to Maintain. Trustor shall maintain the Property in tenantable condition and promptly perform all repairs, replacements, and maintenance necessary to preserve its value. Compliance With Environmental Laws. Trustor represents and warrants to Lender that: (1) During the period of Trustor's leasehold interest in the Property,there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from the Property; (2) Trustor has no knowledge of, or reason to believe that there has been, except as previously disclosed to and acknowledged by Lender in writing, (a) any breach or violation of any Environmental Laws, (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Property by any prior owners or occupants of the Property, or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters; and (3) Except as previously disclosed to and acknowledged by Lender in writing, (a) neither Trustor nor any tenant, contractor, agent or other authorized user of the Property shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from the Property; and (b) any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations and ordinances, including without limitation all Environmental Laws. Trustor authorizes Lender and its agents to enter upon the Property to make such inspections and tests, at Trustor's expense, as Lender may deem appropriate to determine compliance of the Property with this section of the Deed of Trust. Beneficiary, at its option, but without obligation to do so, may correct any condition violating any applicable Environmental Law affecting the Property, and in doing so shall conclusively be deemed to be acting reasonably and for the purpose of protecting the value of its collateral, and all costs of correcting a condition or violation shall be payable to Beneficiary by Trustor as provided in the Expenditures by Lender section of this Deed of Trust. Any inspections or tests made by Lender shall be for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Trustor or to any other person. The representations and warranties contained herein are based on Trustor's due diligence in investigating the Property for Hazardous Substances. Trustor hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Trustor becomes liable for cleanup or other costs under any such laws; and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Deed of Trust or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release occurring prior to Trustor's ownership or interest in the Property, whether or not the same was or should have been known to Trustor. The provisions of this section of the Deed of Trust,including the obligation to indemnify and defend,shall survive the payment of the Indebtedness and the satisfaction and reconveyance of the lien of this Deed of Trust and shall not be affected by Lender's acquisition of any interest in the Property, whether by foreclosure or otherwise. Nuisance, Waste. Trustor shall not cause, conduct or permit any nuisance nor commit, permit, or suffer any stripping of or waste on or to the Property or any portion of the Property. Without limiting the generality of the foregoing, Trustor will not remove, or grant to any other party the right to remove, any timber, minerals (including oil and gas), coal, clay, scoria, soil, gravel or rock products without Lender's prior written consent. Removal of Improvements. Trustor shall not demolish or remove any Improvements from the Real Property without Lender's prior written consent. As a condition to the removal of any Improvements, Lender may require Trustor to make arrangements satisfactory to Lender to replace such Improvements with Improvements of at least equal value. Lender's Right to Enter. Lender and Lender's agents and representatives may enter upon the Real Property at all reasonable times to attend to Lender's interests and to inspect the Real Property for purposes of Trustor's compliance with the terms and conditions of this Deed of Trust. Compliance with Governmental Requirements. Trustor shall promptly comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the use or occupancy of the Property, including without limitation, the Americans With Disabilities Act. Trustor may contest in good faith any such law, ordinance, or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Trustor has notified Lender in writing prior to doing so and so long as, in Lender's sole opinion, Lender's interests in the Property are not jeopardized. Lender may require Trustor to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect Lender's interest. Duty to Protect. Trustor agrees neither to abandon or leave unattended the Property. Trustor shall do all other acts, in addition to those acts set forth above in this section, which from the character and use of the Property are reasonably necessary to protect and preserve the Property. Compliance with Lease. Trustor will pay all rents and will strictly observe and perform on a timely basis all other terms, covenants, and conditions of the Lease. Trustor will indemnify, defend, and hold Lender harmless against all losses, liabilities, actions, suits, proceedings, costs including attorneys' fees claims, demands, and damages whatsoever which may be incurred by reason of Trustor's failure to pay rents or strictly observe or perform under the Lease. Other Agreements Relating to the Lease. Trustor further agrees (1) not to surrender, terminate, or cancel the Lease, and (2) not to modify, change, supplement, alter, or amend the Lease, either orally or in writing, without Lender's prior written consent. Any attempt by Trustor to do any of the foregoing without Lender's prior written consent will be void and of no force and effect. At Lender's option, Trustor will deposit with Lender as further security all original documents relating to the Lease and the leasehold interest in the Property. Unless Trustor is in breach or default of any of the terms contained in this Deed of Trust, Lender will have no right to cancel, modify, change, supplement, alter or amend the leasehold interest. No estate in the Property, whether fee title to the leasehold premises, the leasehold estate, or any subleasehold estate, will merge without Lender express written consent; rather these estates will remain separate and distinct, even if there is a union of these estates in the landlord, Trustor, or a third party who purchases or otherwise acquires the estates. Trustor further agrees that if Trustor acquires all or a portion of the fee simple title, or any other leasehold or subleasehold title to the Property, that title will, at Lender's option, immediately become subject to the terms of this Deed of Trust, and Trustor will execute, deliver and record all documents necessary or appropriate to assure that such title is secured by this Deed of Trust. Notices Relating to the Lease. Trustor will promptly notify Lender in writing: (1) if Trustor is in default in the performance or observance of any of the terms,covenants,or conditions which Trustor is to perform or observe under the Lease; (2) if any event occurs which would constitute a default under the Lease; (3) if any notice of default is given to Trustor by the landlord under the Lease; (4) if, pursuant to the Lease, any proceeds received for the Property are deposited with someone other than Lender, whether received from any insurance on the Property or from the taking of any or all of the Property by eminent domain; and (5) if any arbitration or appraisal proceedings are requested or instituted pursuant to the Lease. Trustor agrees to provide Lender promptly with a copy of all written materials relating to any of the above and to provide Lender with such other information as Lender may reasonably request. Trustor agrees that promptly after the execution and delivery of this Deed of Trust, Trustor will notify the landlord under the Lease in writing of the execution and delivery of this Deed of Trust and of the name and address of Lender and will deliver a copy of this Deed of Trust to the landlord. Option to Cure Lease Default. Upon Lender's receipt of any written notice of Trustor's default under the Lease, Lender may, at Lender's option, cure such default,even though Trustor,or any party on behalf of Trustor, questions or denies the existence of such default or the nature of the default. Trustor expressly grants to Lender the absolute and immediate right to enter upon the Property to such extent and as often as Lender in it sole discretion deems necessary or desirable in order to prevent or cure any such default by Trustor. DUE ON SALE-CONSENT BY LENDER. Lender may, at Lender's option, declare immediately due and payable all sums secured by this Deed of Trust upon the sale or transfer, without Lender's prior written consent, of all or any part of the Real Property, or any interest in the Real Property. A"sale or transfer"means the conveyance of Real Property or any right,title or interest in the Real Property;whether legal, beneficial or equitable;whether voluntary or involuntary; whether by outright sale, deed, installment sale contract, land contract, contract for deed, leasehold interest with a term greater than three (3) years, lease-option contract, or by sale, assignment, or transfer of any beneficial interest in or to any land trust holding title to the Real Property, or by any other method of conveyance of an interest in the Real Property. If any Trustor is a corporation, partnership or limited liability company, transfer also includes any restructuring of the legal entity (whether by merger, division or otherwise) or any change in ownership of more than twenty-five percent (25%) of the voting stock, partnership interests or limited liability company interests, as the case may be, of such Trustor. However,this option shall not be exercised by Lender if such exercise is prohibited by federal law or by Arizona law. TAXES AND LIENS. The following provisions relating to the taxes and liens on the Property are part of this Deed of Trust: Payment. Trustor shall pay when due(and in all events prior to delinquency)all taxes and assessments, including without limitation sales or use taxes in any state, local privilege or excise taxes based on gross revenues, special taxes, charges (including water and sewer), fines and impositions levied against Trustor or on account of the Property, and shall pay when due all claims for work done on or for services rendered or material furnished to the Property. Trustor shall maintain the Property free of all liens having priority over or equal to the interest of Lender under this Deed of Trust, except for the lien of taxes and assessments not due and except as otherwise provided in this Deed of Trust. Beneficiary shall have the right, but not the duty or obligation,to charge Trustor for any such taxes or assessments in advance of payment. In no event does exercise or non-exercise by Beneficiary of this right relieve Trustor from Trustor's obligation under this Deed of Trust or impose any liability whatsoever on Beneficiary. Right to Contest. Trustor may withhold payment of any tax, assessment, or claim in connection with a good faith dispute over the obligation to pay, so long as Lender's interest in the Property is not jeopardized. If a lien arises or is filed as a result of nonpayment, Trustor shall within fifteen (15) days after the lien arises or, if a lien is filed, within fifteen (15) days after Trustor has notice of the filing, secure the discharge of the lien, or if requested by Lender, deposit with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender in an amount sufficient to discharge the lien plus any costs and attorneys'fees, or other charges that could accrue as a result of a foreclosure or sale under the lien. In any contest,Trustor shall defend itself and Lender and shall satisfy any adverse judgment before enforcement against the Property. Trustor shall name Lender as an additional obligee under any surety bond furnished in the contest proceedings. Evidence of Payment. Trustor shall upon demand furnish to Lender satisfactory evidence of payment of the taxes or assessments and shall authorize the appropriate governmental official to deliver to Lender at any time a written statement of the taxes and assessments against the Property. Notice of Construction. Trustor shall notify Lender at least fifteen (15) days before any work is commenced, any services are furnished, or any materials are supplied to the Property, if any mechanic's lien, materialmen's lien, or other lien could be asserted on account of the work, services, or materials and the cost exceeds $10,000.00. Trustor will upon request of Lender furnish to Lender advance assurances satisfactory to Lender that Trustor can and will pay the cost of such improvements. PROPERTY DAMAGE INSURANCE. The following provisions relating to insuring the Property are a part of this Deed of Trust. Maintenance of Insurance. Trustor shall procure and maintain policies of fire insurance with standard extended coverage endorsements on a replacement basis for the full insurable value covering all Improvements on the Real Property in an amount sufficient to avoid application of any coinsurance clause, and with a standard mortgagee clause in favor of Lender. Trustor shall also procure and maintain comprehensive general liability insurance in such coverage amounts as Lender may request with Trustee and Lender being named as additional insureds in such liability insurance policies. Additionally, Trustor shall maintain such other insurance, including but not limited to hazard, business interruption, and boiler insurance, as Lender may reasonably require. Policies shall be written in form, amounts, coverages and basis reasonably acceptable to Lender and issued by a company or companies reasonably acceptable to Lender. Trustor, upon request of Lender, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least ten (10) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Trustor or any other person. Should the Real Property be located in an area designated by the Administrator of the Federal Emergency Management Agency as a special flood hazard area, Trustor agrees to obtain and maintain flood insurance, if available, within 45 days after notice is given by Lender that the Property is located in a special flood hazard area, for the full unpaid principal balance of the loan and any prior liens on the property securing the loan, up to the maximum policy limits set under the National Flood Insurance Program, or as otherwise required by Lender, and to maintain such insurance for the term of the loan. Flood insurance may be purchased under the National Flood Insurance Program, from private insurers providing "private flood insurance" as defined by applicable federal flood insurance statutes and regulations, or from another flood insurance provider that is both acceptable to Lender in its sole discretion and permitted by applicable federal flood insurance statutes and regulations. Application of Proceeds. Trustor shall promptly notify Lender of any loss or damage to the Property if the estimated cost of repair or replacement exceeds$10,000.00. Lender may make proof of loss if Trustor fails to do so within fifteen (15) days of the casualty. Whether or not Lender's security is impaired, Lender may, at Lender's election, receive and retain the proceeds of any insurance and apply the proceeds to the reduction of the Indebtedness, payment of any lien affecting the Property, or the restoration and repair of the Property. If Lender elects to apply the proceeds to restoration and repair, Trustor shall repair or replace the damaged or destroyed Improvements in a manner satisfactory to Lender. Lender shall, upon satisfactory proof of such expenditure, pay or reimburse Trustor from the proceeds for the reasonable cost of repair or restoration if Trustor is not in default under this Deed of Trust. Any proceeds which have not been disbursed within 180 days after their receipt and which Lender has not committed to the repair or restoration of the Property shall be used first to pay any amount owing to Lender under this Deed of Trust,then to pay accrued interest, and the remainder, if any, shall be applied to the principal balance of the Indebtedness. If Lender holds any proceeds after payment in full of the Indebtedness, such proceeds shall be paid to Trustor as Trustor's interests may appear. Trustor's Report on Insurance. Upon request of Lender, however not more than once a year, Trustor shall furnish to Lender a report on each existing policy of insurance showing: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the property insured, the then current replacement value of such property, and the manner of determining that value; and (5) the expiration date of the policy. Trustor shall, upon request of Lender, have an independent appraiser satisfactory to Lender determine the cash value replacement cost of the Property. LENDER'S EXPENDITURES. If any action or proceeding is commenced that would materially affect Lender's interest in the Property or if Trustor fails to comply with any provision of this Deed of Trust or any Related Documents, including but not limited to Trustor's failure to discharge or pay when due any amounts Trustor is required to discharge or pay under this Deed of Trust or any Related Documents, Lender on Trustor's behalf may(but shall not be obligated to)take any action that Lender deems appropriate, to the extent permitted by applicable law, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on the Property and paying all costs for insuring, maintaining and preserving the Property. All such expenditures incurred orpaid byLender for such purposes will then bear interest at the rate charged under the Note from the date P P incurred or paid by Lender to the date of repayment by Trustor. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity. The Deed of Trust also will secure payment of these amounts. Such right shall be in addition to all other rights and remedies to which Lender may be entitled upon the occurrence of any Event of Default and shall be exercisable by Lender to the extent permitted by applicable law. WARRANTY; DEFENSE OF TITLE. The following provisions relating to ownership of the Property are a part of this Deed of Trust: Title. Trustor warrants that: (a)Trustor holds good and marketable title of record to the leasehold interest in the Property pursuant to the Lease, free and clear of all liens and encumbrances other than those set forth in the Real Property description or in any title insurance policy, title report, or final title opinion issued in favor of, and accepted by, Lender, or have otherwise been previously disclosed to and accepted by Lender in writing in connection with this Deed of Trust, and (b)Trustor has the full right, power, and authority to execute and deliver this Deed of Trust to Lender. Defense of Title. Subject to the exception in the paragraph above, Trustor warrants and will forever defend the title to the Property against the lawful claims of all persons. In the event any action or proceeding is commenced that questions Trustor's title or the interest of Trustee or Lender under this Deed of Trust, Trustor shall defend the action at Trustor's expense. Trustor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of Lender's own choice, and Trustor will deliver, or cause to be delivered, to Lender such instruments as Lender may request from time to time to permit such participation. Compliance With Laws. Trustor warrants that the Property and Trustor's use of the Property complies with all existing applicable laws, ordinances, and regulations of governmental authorities. Survival of Representations and Warranties. All representations,warranties,and agreements made by Trustor in this Deed of Trust shall survive the execution and delivery of this Deed of Trust, shall be continuing in nature, and shall remain in full force and effect until such time as Trustor's Indebtedness shall be paid in full. CONDEMNATION. The following provisions relating to condemnation proceedings are a part of this Deed of Trust: Proceedings. If any proceeding in condemnation is filed, Trustor shall promptly notify Lender in writing, and Trustor shall promptly take such steps as may be necessary to defend the action and obtain the award. Trustor may be the nominal party in such proceeding, but Lender shall be entitled to participate in the proceeding and to be represented in the proceeding by counsel of its own choice, and Trustor will deliver or cause to be delivered to Lender such instruments and documentation as may be requested by Lender from time to time to permit such participation. Application of Net Proceeds. If all or any part of the Property is condemned by eminent domain proceedings or by any proceeding or purchase in lieu of condemnation, Lender may at its election require that all or any portion of the net proceeds of the award be applied to the Indebtedness or the repair or restoration of the Property. The net proceeds of the award shall mean the award after payment of all reasonable costs, expenses, and attorneys'fees incurred by Trustee or Lender in connection with the condemnation. IMPOSITION OF TAXES, FEES AND CHARGES BY GOVERNMENTAL AUTHORITIES. The following provisions relating to governmental taxes, fees and charges are a part of this Deed of Trust: Current Taxes, Fees and Charges. Upon request by Lender, Trustor shall execute such documents in addition to this Deed of Trust and take whatever other action is requested by Lender to perfect and continue Lender's lien on the Real Property. Trustor shall reimburse Lender for all taxes, as described below, together with all expenses incurred in recording, perfecting or continuing this Deed of Trust, including without limitation all taxes, fees, documentary stamps, and other charges for recording or registering this Deed of Trust. Taxes. The following shall constitute taxes to which this section applies: (1) a specific tax upon this type of Deed of Trust or upon all or any part of the Indebtedness secured by this Deed of Trust; (2) a specific tax on Trustor which Trustor is authorized or required to deduct from payments on the Indebtedness secured by this type of Deed of Trust; (3) a tax on this type of Deed of Trust chargeable against the Lender or the holder of the Note; and (4) a specific tax on all or any portion of the Indebtedness or on payments of principal and interest made by Trustor. Subsequent Taxes. If any tax to which this section applies is enacted subsequent to the date of this Deed of Trust, this event shall have the same effect as an Event of Default, and Lender may exercise any or all of its available remedies for an Event of Default as provided below unless Trustor either (1) pays the tax before it becomes delinquent, or (2) contests the tax as provided above in the Taxes and Liens section and deposits with Lender cash or a sufficient corporate surety bond or other security satisfactory to Lender. SECURITY AGREEMENT; FINANCING STATEMENTS. The following provisions relating to this Deed of Trust as a security agreement are a part of this Deed of Trust: Security Agreement. This instrument shall constitute a Security Agreement to the extent any of the Property constitutes fixtures, and Lender shall have all of the rights of a secured party under the Uniform Commercial Code as amended from time to time. Security Interest. Upon request by Lender, Trustor shall take whatever action is requested by Lender to perfect and continue Lender's security interest in the Rents and Personal Property. In addition to recording this Deed of Trust in the real property records, Lender may, at any time and without further authorization from Trustor, file executed counterparts, copies or reproductions of this Deed of Trust as a financing statement. Trustor shall reimburse Lender for all expenses incurred in perfecting or continuing this security interest. Upon default, Trustor shall not remove, sever or detach the Personal Property from the Property. Upon default, Trustor shall assemble any Personal Property not affixed to the Property in a manner and at a place reasonably convenient to Trustor and Lender and make it available to Lender within three (3) days after receipt of written demand from Lender to the extent permitted by applicable law. Addresses. The mailing addresses of Trustor (debtor) and Lender (secured party) from which information concerning the security interest granted by this Deed of Trust may be obtained (each as required by the Uniform Commercial Code) are as stated on the first page of this Deed of Trust. FURTHER ASSURANCES; ATTORNEY-IN-FACT. The following provisions relating to further assurances and attorney-in-fact are a part of this Deed of Trust: Further Assurances. At any time, and from time to time, upon request of Lender,Trustor will make, execute and deliver, or will cause to be made, executed or delivered, to Lender or to Lender's designee, and when requested by Lender, cause to be filed, recorded, refiled, or rerecorded, as the case may be, at such times and in such offices and places as Lender may deem appropriate, any and all such mortgages, deeds of trust, security deeds, security agreements, financing statements, continuation statements, instruments of further assurance, certificates, and other documents as may, in the sole opinion of Lender, be necessary or desirable in order to effectuate, complete, perfect, continue, or preserve (1) Trustor's obligations under the Note, this Deed of Trust, and the Related Documents, and (2) the liens and security interests created by this Deed of Trust as first and prior liens on the Property, whether now owned or hereafter acquired by Trustor. Unless prohibited by law or Lender agrees to the contrary in writing,Trustor shall reimburse Lender for all costs and expenses incurred in connection with the matters referred to in this paragraph. Attorney-in-Fact. If Trustor fails to do any of the things referred to in the preceding paragraph, Lender may do so for and in the name of Trustor and at Trustor's expense. For such purposes, Trustor hereby irrevocably appoints Lender as Trustor's attorney-in-fact for the purpose of making, executing, delivering, filing, recording, and doing all other things as may be necessary or desirable,in Lender's sole opinion,to accomplish the matters referred to in the preceding paragraph. FULL PERFORMANCE. If Trustor pays all the Indebtedness when due, and otherwise performs all the obligations imposed upon Trustor under this Deed of Trust, Lender shall execute and deliver to Trustee a request for full reconveyance without warranty and shall execute and deliver to Trustor suitable statements of termination of any financing statement on file evidencing Lender's security interest in the Rents and the Personal Property. Any reconveyance fee required by law shall be paid by Trustor, if permitted by applicable law. EVENTS OF DEFAULT. Each of the following, at Lender's option, shall constitute an Event of Default under this Deed of Trust: Payment Default. Trustor fails to make any payment when due under the Indebtedness. Other Defaults. Trustor fails to comply with or to perform any other term, obligation, covenant or condition contained in this Deed of Trust or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Trustor. Compliance Default. Failure to comply with any other term, obligation, covenant or condition contained in this Deed of Trust, the Note or in any of the Related Documents. Default on Other Payments. Failure of Trustor within the time required by this Deed of Trust to make any payment for taxes or insurance, or any other payment necessary to prevent filing of or to effect discharge of any lien. Environmental Default. Failure of any party to comply with or perform when due any term, obligation, covenant or condition contained in any environmental agreement executed in connection with the Property. Default in Favor of Third Parties. Should Trustor default under any loan,extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Trustor's property or Trustor's ability to repay the Indebtedness or Trustor's ability to perform Trustor's obligations under this Deed of Trust or any of the Related Documents. False Statements. Any warranty, representation or statement made or furnished to Lender by Trustor or on Trustor's behalf under this Deed of Trust or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter. Defective Collateralization. This Deed of Trust or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason. Insolvency. The dissolution or termination of Trustor's existence as a going business, the insolvency of Trustor, the appointment of a receiver for any part of Trustor's property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Trustor. Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Trustor or by any governmental agency against any property securing the Indebtedness. This includes a garnishment of any of Trustor's accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by Trustor as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Trustor gives Lender written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute. Lease Default. Trustor defaults under the terms of the Lease, or any other event (whether or not Trustor's fault) results in the termination or cancellation of Trustor's leasehold rights. Breach of Other Agreement. Any breach by Trustor under the terms of any other agreement between Trustor and Lender that is not remedied within any grace period provided therein, including without limitation any agreement concerning any indebtedness or other obligation of Trustor to Lender, whether existing now or later. Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness. Adverse Change. A material adverse change occurs in Trustor's financial condition, or Lender believes the prospect of payment or performance of the Indebtedness is impaired. Insecurity. Lender in good faith believes itself insecure. RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this Deed of Trust, at any time thereafter, Trustee or Lender may exercise any one or more of the following rights and remedies: Election of Remedies. Election by Lender to pursue any remedy shall not exclude pursuit of any other remedy, and an election to make expenditures or to take action to perform an obligation of Trustor under this Deed of Trust, after Trustor's failure to perform, shall not affect Lender's right to declare a default and exercise its remedies. Accelerate Indebtedness. Lender shall have the right at its option without notice to Trustor to declare the entire Indebtedness immediately due and payable, including any prepayment penalty which Trustor would be required to pay. Foreclosure. With respect to all or any part of the Real Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law. To the extent permitted by law, Trustor shall be and remain liable for any deficiency remaining after sale, either pursuant to the power of sale or judicial proceedings. UCC Remedies. With respect to all or any part of the Personal Property, Lender shall have all the rights and remedies of a secured party under the Uniform Commercial Code. Collect Rents. Lender shall have the right, without notice to Trustor to take possession of and manage the Property and collect the Rents, including amounts past due and unpaid, and apply the net proceeds, over and above Lender's costs, against the Indebtedness. In furtherance of this right, Lender may require any tenant or other user of the Property to make payments of rent or use fees directly to Lender. If the Rents are collected by Lender, then Trustor irrevocably designates Lender as Trustor's attorney-in-fact to endorse instruments received in payment thereof in the name of Trustor and to negotiate the same and collect the proceeds. Payments by tenants or other users to Lender in response to Lender's demand shall satisfy the obligations for which the payments are made, whether or not any proper grounds for the demand existed. Lender may exercise its rights under this subparagraph either in person, by agent, or through a receiver. Appoint Receiver. Lender shall have the right to have a receiver appointed to take possession of all or any part of the Property,with the power to protect and preserve the Property, to operate the Property preceding foreclosure or sale, and to collect the Rents from the Property and apply the proceeds, over and above the cost of the receivership, against the Indebtedness. The receiver may serve without bond if permitted by law. Lender's right to the appointment of a receiver shall exist whether or not the apparent value of the Property exceeds the Indebtedness by a substantial amount. Employment by Lender shall not disqualify a person from serving as a receiver. Tenancy at Sufferance. If Trustor remains in possession of the Property after the Property is sold as provided above or Lender otherwise becomes entitled to possession of the Property upon default of Trustor, Trustor shall become a tenant at sufferance of Lender or the purchaser of the Property and shall, at Lender's option, either (1) pay a reasonable rental for the use of the Property, or (2) vacate the Property immediately upon the demand of Lender. Other Remedies. Trustee or Lender shall have any other right or remedy provided in this Deed of Trust or the Note or available at law or in equity. Notice of Sale. Lender shall give Trustor reasonable notice of the time and place of any public sale of the Personal Property or of the time after which any private sale or other intended disposition of the Personal Property is to be made. Reasonable notice shall mean notice given at least ten (10) days before the time of the sale or disposition. Any sale of the Personal Property may be made in conjunction with any sale of the Real Property. Sale of the Property. To the extent permitted by applicable law,Trustor hereby waives any and all rights to have the Property marshalled. In exercising its rights and remedies, the Trustee or Lender shall be free to sell all or any part of the Property together or separately, in one sale or by separate sales. Lender shall be entitled to bid at any public sale on all or any portion of the Property. Insurance Policies. Lender shall have the right upon an Event of Default, but not the obligation, to assign all of Trustor's right,title and interest in and to all policies of insurance on the Property and any unearned premiums paid on such insurance to any receiver or any purchaser of the Property at a foreclosure sale, and Trustor hereby appoints Lender as attorney in fact to assign and transfer such policies. Attorneys' Fees; Expenses. If Lender institutes any suit or action to enforce any of the terms of this Deed of Trust, Lender shall be entitled to recover such sum as the court may adjudge reasonable as attorneys'fees at trial and upon any appeal. Whether or not any court action is involved, and to the extent not prohibited by law, all reasonable expenses Lender incurs that in Lender's opinion are necessary at any time for the protection of its interest or the enforcement of its rights shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid. Expenses covered by this paragraph include, without limitation, however subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit, including attorneys' fees and expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services, the cost of searching records, obtaining title reports (including foreclosure reports), surveyors' reports, and appraisal fees, title insurance, and fees for the Trustee, to the extent permitted by applicable law. However, Trustor will only pay attorneys' fees of an attorney not Lender's salaried employee, to whom the matter is referred after Trustor's default. Trustor also will pay any court costs, in addition to all other sums provided by law. Rights of Trustee. Trustee shall have all of the rights and duties of Lender as set forth in this section. POWERS AND OBLIGATIONS OF TRUSTEE. The following provisions relating to the powers and obligations of Trustee are part of this Deed of Trust: Powers of Trustee. In addition to all powers of Trustee arising as a matter of law, Trustee shall have the power to take the following actions with respect to the Property upon the written request of Lender and Trustor: (a)join in preparing and filing a map or plat of the Real Property, including the dedication of streets or other rights to the public; (b) join in granting any easement or creating any restriction on the Real Property; and (c) join in any subordination or other agreement affecting this Deed of Trust or the interest of Lender under this Deed of Trust. Obligations to Notify. Trustee shall not be obligated to notify any other party of a pending sale under any other trust deed or lien, or of any action or proceeding in which Trustor, Lender, or Trustee shall be a party, unless the action or proceeding is brought by Trustee. Trustee. Trustee shall meet all qualifications required for Trustee under applicable law. In addition to the rights and remedies set forth above, with respect to all or any part of the Property, the Trustee shall have the right to foreclose by notice and sale, and Lender shall have the right to foreclose by judicial foreclosure, in either case in accordance with and to the full extent provided by applicable law. Successor Trustee. Lender, at Lender's option, may from time to time appoint a successor Trustee to any Trustee appointed under this Deed of Trust by an instrument executed and acknowledged by Lender and recorded in the office of the recorder of Pima County, State of Arizona. The instrument shall contain, in addition to all other matters required by state law, the names of the original Lender, Trustee, and Trustor, the book and page where this Deed of Trust is recorded, and the name and address of the successor trustee, and the instrument shall be executed and acknowledged by Lender or its successors in interest. The successor trustee, without conveyance of the Property, shall succeed to all the title, power, and duties conferred upon the Trustee in this Deed of Trust and by applicable law. This procedure for substitution of Trustee shall govern to the exclusion of all other provisions for substitution. NOTICES. Any notice required to be given under this Deed of Trust, including without limitation any notice of default and any notice of sale shall be given in writing, and shall be effective when actually delivered, when actually received by telefacsimile (unless otherwise required by law), when deposited with a nationally recognized overnight courier, or, if mailed, when deposited in the United States mail, as first class, certified or registered mail postage prepaid, directed to the addresses shown near the beginning of this Deed of Trust. All copies of notices of foreclosure from the holder of any lien which has priority over this Deed of Trust shall be sent to Lender's address, as shown near the beginning of this Deed of Trust. Any party may change its address for notices under this Deed of Trust by giving formal written notice to the other parties, specifying that the purpose of the notice is to change the party's address. For notice purposes,Trustor agrees to keep Lender informed at all times of Trustor's current address. Unless otherwise provided or required by law, if there is more than one Trustor, any notice given by Lender to any Trustor is deemed to be notice given to all Trustors. NOTICE OF FINAL AGREEMENT. By signing this agreement each party represents,warrants and agrees that: (a)this written agreement represents the final agreement between the parties regarding the subject matter hereof, (b) there are no unwritten oral agreements between the parties, and(c) no written agreement to which Lender is a party may be contradicted by evidence of any prior, contemporaneous, or subsequent unwritten agreements or understandings of the parties. RULES OF CONSTRUCTION. As used herein, (i) "includes," including," and similar terms are not limiting; (ii) "may not" and similar terms are prohibitive and not permissive; (iii) the singular includes the plural; (iv) "or" is not exclusive; (v) any reference to a form, plan, policy, procedure, guideline, instruction, title, code, law, statute, ordinance, rule, regulation, order, or other governmental provision, or any part thereof, shall include the same as it may from time to time be amended, succeeded or replaced; and (vi) in construing any ambiguity herein, the agreement shall be interpreted in a neutral manner as to each of the parties, notwithstanding any common law or statutory rule of construction that the terms of an agreement should be interpreted most strongly against the party who caused the uncertainty to exist; (vii) words of any gender include each other gender; (viii)the terms "hereof," "herein," "hereby" and derivative or similar words refer to this entire Agreement (including any schedules, exhibits and attachments hereto); (ix) references to any Person shall be deemed to mean and include the successors and permitted assigns of such Person; (x) any reference to a number of days shall refer to calendar days unless business days are specified; and(xi)any reference to an attached Exhibit or a Schedule, the Exhibit or Schedule shall be deemed to be incorporated by reference. WAIVER OF JURY TRIAL. Notwithstanding anything contained in the Related Documents to the contrary, all Borrower(s), Guarantor(s), and Grantor(s) hereby waive to the fullest extent permitted by law, the right to trial by jury in any action, proceeding or counterclaim, whether in contract, tort or otherwise, relating directly or indirectly to the Loan evidenced by any of the Related Documents, including, without limitation, the Note and any security instrument or any acts or omissions of Lender, its officers, employees, directors or agents in connection therewith. MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of this Deed of Trust: Amendments. This Deed of Trust, together with any Related Documents, constitutes the entire understanding and agreement of the parties as to the matters set forth in this Deed of Trust. No alteration of or amendment to this Deed of Trust shall be effective unless given in writing and signed by the party or parties sought to be charged or bound by the alteration or amendment. Annual Reports. If the Property is used for purposes other than Trustor's residence, Trustor shall furnish to Lender, upon request, a certified statement of net operating income received from the Property during Trustor's previous fiscal year in such form and detail as Lender shall require. "Net operating income" shall mean all cash receipts from the Property less all cash expenditures made in connection with the operation of the Property. Caption Headings. Caption headings in this Deed of Trust are for convenience purposes only and are not to be used to interpret or define the provisions of this Deed of Trust. Merger. There shall be no merger of the interest or estate created by this Deed of Trust with any other interest or estate in the Property at any time held by or for the benefit of Lender in any capacity, without the written consent of Lender. Governing Law. This Deed of Trust will be governed by federal law applicable to Lender and,to the extent not preempted by federal law, the laws of the State of Arizona without regard to its conflicts of law provisions. This Deed of Trust has been accepted by Lender in the State of Arizona. Choice of Venue. If there is a lawsuit, Trustor agrees upon Lender's request to submit to the jurisdiction of the courts of PIMA County, State of Arizona. No Waiver by Lender. Lender shall not be deemed to have waived any rights under this Deed of Trust unless such waiver is given in writing and signed by Lender. No delay or omission on the part of Lender in exercising any right shall operate as a waiver of such right or any other right. A waiver by Lender of a provision of this Deed of Trust shall not prejudice or constitute a waiver of Lender's right otherwise to demand strict compliance with that provision or any other provision of this Deed of Trust. No prior waiver by Lender, nor any course of dealing between Lender and Trustor, shall constitute a waiver of any of Lender's rights or of any of Trustor's obligations as to any future transactions. Whenever the consent of Lender is required under this Deed of Trust, the granting of such consent by Lender in any instance shall not constitute continuing consent to subsequent instances where such consent is required and in all cases such consent may be granted or withheld in the sole discretion of Lender. Severability. If a court of competent jurisdiction finds any provision of this Deed of Trust to be illegal, invalid, or unenforceable as to any circumstance, that finding shall not make the offending provision illegal, invalid, or unenforceable as to any other circumstance. If feasible, the offending provision shall be considered modified so in provision cannot be so modified, it shall be considered that it becomes legal,valid and enforceable. If the offending deleted from this Deed of Trust. Unless otherwise required by law, the illegality, invalidity, or unenforceability of any provision of this Deed of Trust shall not affect the legality, validity or enforceability of any other provision of this Deed of Trust. Successors and Assigns. Subject to any limitations stated in this Deed of Trust on transfer of Trustor's interest, this Deed of Trust shall be binding upon and inure to the benefit of the parties, their successors and assigns. If ownership of the Property becomes vested in a person other than Trustor, Lender, without notice to Trustor, may deal with Trustor's successors with reference to this Deed of Trust and the Indebtedness by way of forbearance or extension without releasing Trustor from the obligations of this Deed of Trust or liability under the Indebtedness. Time is of the Essence. Time is of the essence in the performance of this Deed of Trust. Waiver of Homestead Exemption. Trustor hereby releases and waives all rights and benefits of the homestead exemption laws of the State of Arizona as to all Indebtedness secured by this Deed of Trust. DEFINITIONS. The following capitalized words and terms shall have the following meanings when used in this Deed of Trust. Unless specifically stated to the contrary, all references to dollar amounts shall mean amounts in lawful money of the United States of America. Words and terms used in the singular shall include the plural, and the plural shall include the singular, as the context may require. Words and terms not otherwise defined in this Deed of Trust shall have the meanings attributed to such terms in the Uniform Commercial Code: Beneficiary. The word "Beneficiary" means Western Alliance Bank, an Arizona corporation, and its successors and assigns. Borrower. The word "Borrower" means The J. D. Russell Company, a Michigan corporation and includes all co- signers and co-makers signing the Note and all their successors and assigns. Deed of Trust. The words "Deed of Trust" mean this Deed of Trust among Trustor, Lender, and Trustee, and includes without limitation all assignment and security interest provisions relating to the Personal Property and Rents. Environmental Laws. The words "Environmental Laws" mean any and all state, federal and local statutes, regulations and ordinances relating to the protection of human health or the environment, including without limitation the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq. ("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99- 499 ("SARA"), the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other applicable state or federal laws, rules, or regulations adopted pursuant thereto. Event of Default. The words "Event of Default" mean any of the events of default set forth in this Deed of Trust in the events of default section of this Deed of Trust. Guarantor. The word "Guarantor" means any guarantor, surety, or accommodation party of any or all of the Indebtedness. Guaranty. The word "Guaranty" means the guaranty from Guarantor to Lender, including without limitation a guaranty of all or part of the Note. Hazardous Substances. The words "Hazardous Substances" mean materials that, because of their quantity, concentration or physical, chemical or infectious characteristics, may cause or pose a present or potential hazard to human health or the environment when improperly used,treated, stored, disposed of, generated, manufactured, transported or otherwise handled. The words"Hazardous Substances"are used in their very broadest sense and include without limitation any and all hazardous or toxic substances, materials or waste as defined by or listed under the Environmental Laws. The term "Hazardous Substances" also includes, without limitation, petroleum and petroleum by-products or any fraction thereof and asbestos. Improvements. The word "Improvements" means all existing and future improvements, buildings, structures, mobile homes affixed on the Real Property, facilities, additions, replacements and other construction on the Real Property. Indebtedness. The word "Indebtedness" means all principal, interest, and other amounts, costs and expenses payable under the Note or Related Documents, together with all renewals of, extensions of, modifications of, consolidations of and substitutions for the Note or Related Documents and any amounts expended or advanced by Lender to discharge Trustor's obligations or expenses incurred by Trustee or Lender to enforce Trustor's obligations under this Deed of Trust, together with interest on such amounts as provided in this Deed of Trust. Lease. The word "Lease" means the lease of the Property dated June 3, 2020, between Town of Marana, an Arizona municipal corporation, Landlord and Trustor. Lender. The word "Lender"means Western Alliance Bank, an Arizona corporation, its successors and assigns. Note. The word "Note" means the promissory note dated , 2022, in the original principal amount of $750,000.00 from Trustor to Lender, together with all renewals of, extensions of, modifications of, refinancings of, consolidations of, and substitutions for the promissory note or agreement. Personal Property. The words "Personal Property" mean all equipment, fixtures, and other articles of personal property now or hereafter owned by Trustor, and now or hereafter attached or affixed to the Real Property; together with all accessions, parts, and additions to, all replacements of, and all substitutions for, any of such property; and together with all proceeds (including without limitation all insurance proceeds and refunds of premiums) from any sale or other disposition of the Property. Property. The word "Property" means collectively the Real Property and the Personal Property. Real Property. The words "Real Property" mean the Trustor's leasehold interest, as described in the Lease, which encumbers the real property described on Exhibit A. Related Documents. The words "Related Documents" mean all promissory notes, credit agreements, loan agreements, environmental agreements, guaranties, security agreements, mortgages, deeds of trust, security deeds, collateral mortgages, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with the Indebtedness. Rents. The word "Rents" means all present and future rents, revenues, income, issues, royalties, profits, and other benefits derived from the Property. Trustee. The word "Trustee" means Western Alliance Bank, an Arizona corporation, whose address is 1 East Washington Street#100, Phoenix, AZ 85004 and any substitute or successor trustees. Trustor. The word"Trustor" means The J. D. Russell Company, a Michigan corporation. TRUSTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS DEED OF TRUST, AND TRUSTOR AGREES TO ITS TERMS. TRUSTOR: THE J. D. RUSSELL COMPANY, A MICHIGAN CORPORATION By: Nicholas H. Danna, President of The J. D. Russell Company, a Michigan corporation CORPORATE ACKNOWLEDGMENT STATE OF SS COUNTY OF On this day of ,20 , before me,the undersigned Notary Public, personally appeared Nicholas H. Danna, President of The J. D. Russell Company, a Michigan corporation and known to me to be an authorized agent of the corporation that executed the Deed of Trust and acknowledged the Deed of Trust to be the free and voluntary act and deed of the corporation, by authority of its Bylaws or by resolution of its board of directors, for the uses and purposes therein mentioned, and on oath stated that he or she is authorized to execute this Deed of Trust and in fact executed the Deed of Trust on behalf of the corporation. By Residing at Notary Public in and for the State of My commission expires REQUEST FOR FULL RECONVEYANCE (To be used only when obligations have been paid in full) To: , Trustee The undersigned is the legal owner and holder of all Indebtedness secured by this Deed of Trust. All sums secured by this Deed of Trust have been fully paid and satisfied. You are hereby directed, upon payment to you of any sums owing to you under the terms of this Deed of Trust or pursuant to any applicable statute, to cancel the Note secured by this Deed of Trust(which is delivered to you together with this Deed of Trust), and to reconvey,without warranty, to the parties designated by the terms of this Deed of Trust, the estate now held by you under this Deed of Trust. Please mail the reconveyance and Related Documents to: • Date: Beneficiary: By: Its: LaserPro, Ver. 21.2.0.029 Copr. Finastra USA Corporation 1997, 2022. All Rights Reserved. -AZ D:\LASERPRO\CFI\LPL\G01.FC TR-74636 PR-263 (M)