Exhibit 10.3

 

APN: 005-071-55

 

RECORDING REQUESTED BY,

AND AFTER RECORDING, MAIL TO:

 

Green Bank, N.A.

4000 Greenbriar

Houston, Texas 77098

 

Affirmation Statement: Per NRS 239B.030, the undersigned hereby affirms that
this document, including any exhibit, hereby submitted for recording does not
contain the social security number of any person or persons.

 

 

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING

 

from

 

AQUA METALS RENO, INC,

a Delaware corporation

(“Grantor”)

 

to

 

FIRST AMERICAN TITLE INSURANCE COMPANY,

a Nebraska corporation

(“Trustee”)

 

for the benefit of

 

GREEN BANK, N.A.

(“Beneficiary”)

 

Dated: November 3, 2015

 

THIS DEED OF TRUST SECURES FUTURE ADVANCES

 

 

 

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING

 

STATE OF NEVADA §   §                           KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF STOREY §

 

THIS DEED OF TRUST is made this 3rd day of November, 2015 between AQUA METALS OF
RENO, INC., a Delaware corporation (“Grantor”), whose mailing address is 1010
Atlantic Avenue, Oakland, California 94501-1147; and First American Title
Insurance Company, a Nebraska corporation whose mailing address is 5310 Kietzke
Lane, Suite 100, Reno, Nevada 89511 (hereinafter called “Trustee”); for the
benefit of Green Bank, N.A. (“Beneficiary”) whose address is 400 Greenbriar,
Houston, Texas 77098; Grantor and Beneficiary covenant and agree to as follows:

 

In consideration of the debt and trust hereinafter mentioned, Grantor does
hereby GRANT, BARGAIN, SELL, TRANSFER, ASSIGN, and CONVEY unto Trustee, in
trust, with power of sale for the benefit of Beneficiary, all of Grantor’s
right, title, and interest in and to the following described property:

 

1.     Real Property. The real estate situated in Storey County, Nevada, which
is more particularly described in Exhibit “A” attached hereto and made a part
hereof by reference for all purposes, together with all buildings, structures,
and other improvements (such buildings, structures, and other improvements being
hereinafter sometimes called the “Improvements”) now or hereafter situated
thereon (such real estate, and Improvements being hereinafter sometimes called
the “Land”). The Land or its address is commonly known as 2500 Peru Drive, Reno,
Nevada 89434.

 

2.     Fixtures and Personal Property. All fixtures, equipment, and personal
property in which Grantor now has, or at any time hereafter acquires, an
interest, and which are now, or at any time hereafter, either a part of the Land
or situated in, on, or about the Land and utilized in connection with the
operation of the Land, or acquired or delivered to the Land for use or
incorporation in construction of any improvements on the Land, including, but
not limited to, building and construction materials and equipment; all plans and
specifications for improvements to be placed on the Land; all contracts and
subcontracts relating to the Land; all deposits (including tenant’s security
deposits), funds, accounts, contract rights, instruments, documents, general
intangibles; all permits, licenses, franchises, certificates, and other rights
and privileges obtained in connection with the Land; all proceeds arising from
or by virtue of the sale, lease, or other disposition of any of the real or
personal property described herein; and all renewals, replacements, and
substitutions thereof and additions thereto (all property described or referred
to in this paragraph sometimes called “Accessories”).

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 2

 

 

3.     As-Extracted Collateral. To the extent now owned and/or hereafter
acquired by Grantor: all As-Extracted Collateral (as defined in the Code) and
other substances which may be extracted from the Land, including without
limitation, oil and gas, all Hydrocarbon Property (as defined below), including
all General Intangibles, Accounts, and all other rights to payment arising from
the foregoing and all rights to payment arising therefrom, including but not
limited to, royalties, rentals, and other rights to payment from sale of any of
the foregoing.

 

4.     Other Property. To the extent now owned and/or hereafter acquired by
Grantor: all rights, titles, interests and estates in and to the oil gas and
other minerals in and under the Land and the oil and gas leases and/or oil, gas
and other mineral leases relating to the Land or the lands spaced, pooled or
unitized therewith and including all wellbore interests and other interests and
estates and the lands and premises covered or affected thereby (collectively
called the “Hydrocarbon Property”). All other interest of every kind and
character which Grantor now has or at any time hereafter acquires in and to the
property described or referred to in paragraphs 1, 2, and 3 preceding, including
but not limited to (a) proceeds from the condemnation or threatened condemnation
of the Land, (b) proceeds of any and all insurance covering the Land, (c)
property which is used in connection with the operation of the Land and
Accessories, (d) all water, water allocations, and water rights appurtenant to
or used in connection with the Land (including tributary, nontributary, and not
nontributary), now owned or hereafter acquired, decreed or adjudicated, and (e)
all other interest of Grantor in water, such as ditch and ditch rights,
reservoir or reservoir rights and storage rights, water stock, wells, well
permits, decrees and leased used or to be used in connection with the Land.

 

All properties, rights, and interests described or referred to in paragraphs 1,
2, 3, and 4 preceding are sometimes referred to collectively as the “Property”.

 

5.     Leasehold Estates. In the event the estate of the Grantor in and to any
of the Property is a leasehold estate, this conveyance shall include, and the
lien, security interest, and assignment created hereby shall encumber and extend
to all other further or additional title, estates, interest, or rights which may
exist now or at any time be acquired by Grantor in or to the Property demised
under the lease creating such leasehold estate and including Grantor’s rights,
if any, to the Property demised under such lease and, if fee simple title to any
of such Property shall ever become vested in the Grantor such fee simple
interest shall be encumbered by this Deed of Trust in the same manner as if
Grantor had fee simple title to said Property as of the date of execution
hereof.

 

TO HAVE AND TO HOLD the above-described Property, together with all improvements
thereon and all the rights, hereditaments, and appurtenances in anywise
appertaining or belonging thereto, unto Trustee, and his successors or
substitutes in this trust, and his and their assigns, against the claim or
claims of all persons claiming or to claim the same or any part thereof.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 3

 

 

Grantor, for Grantor and Grantor’s successors, hereby agrees to warrant and
forever defend, all and singular, the Property unto Trustee, and his successors
or substitutes in this trust, and his and their assigns, in trust and for the
uses and purposes hereinafter set forth, forever.

 

Grantor hereby grants to Beneficiary and its successors and assigns, a security
interest in the Property, and each and every part thereof, and in all proceeds
from the sale, lease, or other disposition thereof and in all sums, proceeds,
funds, and reserves described or referred to in Section 5.7, 5.8, and 5.9
hereof; provided that the grant of a security interest in proceeds shall not be
deemed to authorize any action otherwise prohibited herein.

 

ARTICLE I.

The Obligation

 

Section 1.1 Beneficiary and Obligation. This Deed of Trust [as used herein, the
expression “this Deed of Trust” shall mean this Deed of Trust, Security
Agreement and Fixture Filing] and all rights, title, interest, liens, security
interest, powers, and privileges created hereto or arising by virtue hereof, are
given to secure payment and performance of the following indebtedness,
obligations, and liabilities: (a) the indebtedness(es) evidenced by that certain
promissory note of even date herewith (the “Note”) executed by Grantor, payable
to the order of Beneficiary in the principal amount of TEN MILLION AND NO/100
DOLLARS ($10,000,000.00) bearing interest as therein specified, containing an
attorney’s fee clause, interest and principal being payable as therein
specified, and finally maturing twenty one (21) years from the date of the Note;
(b) all indebtedness, obligations, and liabilities arising pursuant to the
provisions of this Deed of Trust, the Note, that certain Loan Agreement between
Borrower and Beneficiary of even date herewith (the “Loan Agreement”;
capitalized terms in this Deed of Trust not otherwise defined herein shall have
the same meanings ascribed to such terms in the Loan Agreement), any guaranty or
such other documents evidencing, securing or pertaining to the indebtedness(es)
referred to in subsection (a) of this Section 1.1, as shall from time to time be
executed and delivered to Beneficiary by Grantor, any guarantor or any other
party (collectively, the “Loan Documents”); and (c) any and all renewals,
modifications, rearrangements, amendments, or extensions of all or any part of
the indebtedness, obligations, and liabilities described or referred to in
Subsections 1.1(a), and 1.1(b). The word “Obligation”, as used herein, shall
mean all of the indebtedness, obligations, and liabilities described or referred
to in Subsections 1.1(a) and 1.1(b) preceding and as described and referred to
in this subsection 1.1(c). The word “Beneficiary”, as used herein, shall mean
the Beneficiary named in the initial paragraph on Page 2 of this Deed of Trust
and all subsequent Beneficiaries of the Obligation at the time in question.
Notice to Grantor: The Note contains a variable interest rate.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 4

 

 

ARTICLE II.

 

Certain Representations;

Warranties, and Covenants of Grantor

 

Section 2.1 Warranties and Representations. Grantor represents, warrants, and
undertakes that (a) Grantor has full right and authority to execute and deliver
this Deed of Trust; and (b) Grantor has in its own right good and indefeasible
title in fee simple to the Property free from any encumbrance superior to the
indebtedness hereby secured.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 5

 

 

Section 2.2 Covenants. Grantor, for Grantor and Grantor’s successors and
permitted assigns hereunder, covenants, agrees, and undertakes to: (a) except as
permitted under the Loan Agreement, pay, or cause to be paid, before delinquent,
all taxes and assessments of every kind or character in respect to the Property,
or any part thereof, from time to time, and, upon request of Beneficiary, to
furnish to Beneficiary evidence satisfactory to Beneficiary of the timely
payment of such taxes and assessments and governmental charges (including, but
not limited to, any general or special taxes or ditch or water assessments
levied or accruing against the Property); (b) purchase policies of insurance
with respect to the Property with such insurers, in such amounts and covering
such risks as shall be satisfactory to Beneficiary, including, but not limited
to, (1) owner’s and contractors’ policies of comprehensive general public
liability insurance; (2) hazard insurance against all risks of loss, including
collapse, in an amount not less than the full replacement cost of all
Improvements, including the cost of debris removal, with annual agreed amount
endorsement and sufficient at all times to prevent Grantor from becoming a
co-insurer, such insurance prior to completion of the Improvements to be in
builder’s risk form on a non-reporting basis and including coverage for all
materials and equipment, wherever located, intended to be installed in or
utilized in the construction of the Improvements; (3) if the Property is in a
“Flood Hazard Area”, a flood insurance policy, or binder therefor, in an amount
equal to the principal amount of the Note or the maximum amount available under
the Flood Disaster Protection Act of 1973, and regulations issued pursuant
thereto, as amended from time to time, whichever is less, in form complying with
the “insurance purchase requirements” of that act; (4) such policies of
mortgagee’s title insurance insuring the validity and priority of this Deed of
Trust and any future renewals or extensions of this Deed of Trust, including any
such mortgagee’s title insurance which the Beneficiary may require during the
term of the Obligation to supplement or replace any mortgagee’s title policy
earlier provided to Beneficiary insuring the validity and priority of the Deed
of Trust; and (5) such other insurance, if any, as Beneficiary may require from
time to time, or which is required by the Loan Documents; (c) cause all
insurance carried in accordance with Section 2.2(b) to be payable to Beneficiary
as a mortgagee, to deliver the original policies of insurance carried by each
Lessee (as that term is hereinafter defined) for the benefit of Grantor, and to
cause all such policies to be payable to Beneficiary as its interest may appear;
(d) pay, or cause to be paid, all premiums for such insurance at least ten (10)
days before such premiums become due, furnish to Beneficiary satisfactory proof
of the timeliness of such payments and deliver all renewal policies to
Beneficiary before the expiration date of each expiring policy; (e) comply with
all federal, state, or municipal laws, rules, ordinances, and regulations
applicable to the Property and its ownership, use and operation, including but
not limited to maintenance of the Property in compliance with the Americans with
Disabilities Act of 1990, and comply with all, and not violate any, easements,
restrictions, agreements, covenants, and conditions with respect to or affecting
the Property or any part thereof; (f) at all times maintain, preserve, and keep
the Property in good repair and condition and presenting a first-class
appearance, and from time to time make all necessary and proper repairs,
replacements, and renewals, and not commit or permit any waste on or of the
Property, and not do anything to the Property that may impair its value; (g)
except as permitted by the Loan Agreement, promptly pay all bills for labor and
materials incurred in connection with the Property and never permit to be
created or to exist in respect to the Property or any part thereof any lien or
security interest even though inferior to the liens and security interest hereof
for any such bill, and in any event never permit to be created or exist in
respect to the Property or any part thereof any other or additional lien or
security interest on a parity with or superior to any of the liens or security
interest hereof; (h) at any time, and from time to time, upon request of
Beneficiary, forthwith, execute and deliver to Beneficiary any and all
additional instruments and further assurances, and do all other acts and things,
as may be reasonably necessary or proper, in Beneficiary’s opinion, to effect
the intent of these presents, more fully evidence and perfect the rights,
titles, liens, and security interests herein created or intended to be created
and to protect the rights, remedies, powers, and privileges of Beneficiary
hereunder; (i) from time to time, upon request of Beneficiary, promptly furnish
to Beneficiary financial statements and reports relating to the Grantor and the
Property as required in the Loan Documents; (j) continuously maintain Grantor’s
existence and its right to do business in every state in which it transacts
business; (k) pay and perform all of the Obligation in accordance with the terms
thereof or of this Deed of Trust; (l) at any time any law shall be enacted
imposing or authorizing the imposition of any tax upon this Deed of Trust, or
upon any rights, titles, liens, or security interests created hereby, or upon
the Obligation, or any part thereof, pay all such taxes on or prior to when due;
provided that, in the alternative, Grantor may, in the event of the enactment of
such a law, and must, if it is unlawful for Grantor to pay such taxes, prepay
the Obligation in full within sixty (60) days after demand therefor by
Beneficiary; (m) at any time and from time to time, furnish promptly upon
request of Beneficiary a written statement or affidavit, in such form as shall
be satisfactory to Beneficiary, stating the unpaid balance of the Obligation and
that there are no offsets or defenses against full payment of the Obligation and
the terms hereof, or, if there are any such offsets or defenses, specifying
them; (n) punctually and properly perform all of Grantor’s covenants, duties,
and liabilities under any other security agreement, mortgage, deed of trust,
collateral pledge agreement, contract, or assignment of any kind now or
hereafter existing as security for or in connection with payment of the
Obligation, or any part thereof (each such security agreement being herein
called “other security instrument”; (o) in accordance with the provisions of the
Loan Agreement, allow Beneficiary from time to time to inspect the Property and
all records relating thereto or to the Obligation, and to make and take away
copies of such records; (p) not cause or permit the Accessories, or any part
thereof, without the prior written consent of the Lender, to be removed from the
county and state where the Land is located, except items of the Accessories
which are not material to the business of Borrower, or have become obsolete or
worn beyond practical use and which have been replaced by adequate substitutes
having a value equal to or greater than the replaced items when new; (q) not
without the prior written consent of Beneficiary sell, trade, transfer, assign,
or exchange or otherwise dispose of (or suffer or permit any of the same to
occur with respect to) (1) any capital stock of Grantor if Grantor is a
corporation, (2) any partnership interest either general or limited if Grantor
is a partnership, or (3) any membership interest in Grantor, if Grantor is a
limited liability company, except by devise, descent, or operation of law upon
the death of a shareholder, partner, joint venturer, or member, as the case may
be; and (r) pay, or cause to be paid, any and all reasonable attorneys’ fees,
filing fees and expenses incurred by Beneficiary for the preparation and
recordation of any and all legal instruments which the Beneficiary may require
at the time of the creation of this Obligation (including this Deed of Trust
and/or any and all other instruments which Beneficiary may require in connection
herewith) or which Beneficiary may require during the term of the Obligation.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 6

 

 

Section 2.3 Nevada Covenants. The following covenants, Nos. 1, 2, 3, 4, 5, 6, 7,
8, and 9 of NRS 107.030 are hereby adopted and made a part of this Deed of Trust
(the “Covenants”). To the extent possible, the Covenants will be construed so as
to augment, and be compatible with, but not replace, the other agreements
contained in this Deed of Trust and the other Loan Documents. However, to the
extent that any of the Covenants are determined to be in conflict with any of
the other agreements and covenants contained in this Deed of Trust and/or the
other Loan Documents, or in conflict with any other right or procedure allowed
by applicable law, the agreement, covenant, right, or procedure which are set
forth in the Loan Documents shall control and be enforceable by Beneficiary.
With respect to Covenant No. 2, the amount of required insurance shall be the
full replacement value of all buildings and improvements now and/or hereafter
located on the Land. With respect to Covenant No. 4, the rate of interest shall
be the Maximum Rate (hereafter defined). With respect to Covenant No. 7, in lieu
of the percentage to be allowed, the “expenses of the trust”, as referenced
therein, shall mean reasonable counsel fees and costs actually incurred.

 

ARTICLE III.

 

Respecting Defaults and Remedies of Beneficiary

 

Section 3.1 Beneficiary’s Remedies Upon Default. Upon an Event of Default which
continues beyond any applicable cure period, Beneficiary may, at its option, do
any one or more of the following:

 

(a)     If Grantor has failed to keep or perform any covenant whatsoever
contained in this Deed of Trust, Beneficiary may, but shall not be obligated to
any person to do so, perform or attempt to perform said covenant, and any
payment made or expense incurred in the performance or attempted performance of
any such covenant shall be a part of the Obligation, and Grantor promises, upon
demand, to pay to Beneficiary, at the place where the Note is payable, or at
such other place as Beneficiary may direct by written notice, all sums so
advanced or paid by Beneficiary, with interest from the date when paid or
incurred by Beneficiary at the rate provided in the Note. No such payment by
Beneficiary shall constitute a waiver of any default. In addition to the liens
and security interest hereof, Beneficiary shall be subrogated to all rights,
titles, liens, and security interest securing the payment of any debt, claim,
tax, or assessment for the payment of which Beneficiary may make an advance, or
which Beneficiary may pay.

 

(b)     Unless otherwise modified herein, Beneficiary may, without notice,
demand, or presentment, which are hereby waived by Grantor and all other parties
obligated in any manner whatsoever on the Obligation, declare the entire unpaid
balance of the Obligation immediately due and payable, and upon such
declaration, the entire unpaid balance of the Obligation shall be immediately
due and payable (hereinafter called “Acceleration”). Grantor hereby waives all
notices allowed by law, including without limitation, demand, presentment,
notice of dishonor, protest, notice of intent to accelerate maturity and notice
of acceleration.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 7

 

 

(c)     Beneficiary may request Trustee to proceed with foreclosure, and in such
event Trustee is hereby authorized and empowered, and it shall be his special
duty, upon such request of Beneficiary, to sell the Property, or any part
thereof, to the highest bidder or bidders for cash, in the manner prescribed or
allowed by law. After such sale, Trustee shall make good and sufficient deeds
and assignments to the purchaser or purchasers thereunder in the name of
Grantor, conveying the Property, or any part thereof, so sold to the purchaser
or purchasers with general warranty of title by Grantor. Sale of a part of the
Property shall not exhaust the power of sale, but sales may be made from time to
time until the Obligation is paid and performed in full. It shall not be
necessary to have present or to exhibit at any such sale any of the Accessories.
In addition to the rights and powers of sale granted under the preceding
provisions of this Subsection 3.1(c), if default is made in the payment of any
installment of the Obligation, Beneficiary may, at its option, at once or at any
time thereafter while any matured installment remains unpaid, without declaring
the entire Obligation to be due and payable, orally or in writing direct Trustee
to enforce this trust and to sell the Property subject to such unmatured
indebtedness and the liens and security interest securing its payment, in the
same manner, all as provided in the preceding provisions of this Subsection
3.1(c). After such sale, Trustee shall make due conveyance to the purchaser or
purchasers. Sales made without maturing the Obligation may be made hereunder
whenever there is a default in the payment of any installment of the Obligation,
without exhausting the power of sale granted hereby, and without affecting in
any way the power of sale granted under this Subsection 3.1(c), the unmatured
balance of the Obligation (except as to any proceeds of any sale which
Beneficiary may apply as prepayment of the Obligation) or the liens and security
interests securing payment of the Obligation. It is intended by each of the
foregoing provisions of this Subsection 3.1(c) that Trustee may, after any
request or direction by Beneficiary, sell, not only the Land but also the
Accessories and other interests constituting a part of the Property, or any part
thereof, along with the Land, or any part thereof, as a unit and as a part of a
single sale, or may sell any part of the Property separately from the remainder
of the Property. It is agreed that, in any deed or deeds given by Trustee, any
and all statements of fact or other recitals therein made as to the identity of
Beneficiary, or as to the occurrence or existence of any default, or as to the
acceleration of the maturity of the Obligation, or as to the request to sell,
notice of sale, time, place, terms, and manner of sale, and receipt,
distribution, and application of the money realized therefrom, or as to the due
and proper appointment of a substitute trustee, and, without being limited by
the foregoing, as to any other act or thing having been duly done by Beneficiary
or by Trustee, shall be taken by all courts of law and equity as prima facie
evidence that the said statements or recitals state facts and are without
further question to be so accepted, and Grantor does hereby ratify and confirm
any and all acts that Trustee may lawfully do in the premises by virtue hereof.
In the event of the resignation or death of Trustee, or his removal from his
county of residence stated on the first page hereof, or his failure, refusal, or
inability, for any reason, to make any such sale or to perform any of the trusts
herein declared, or, at the option of Beneficiary, with or without cause, then
Beneficiary may appoint, in writing, but without the necessity of recordation,
notice or any other formality (unless required by applicable law), a substitute
trustee, who shall thereupon succeed to all the estates, titles, rights, powers,
and trusts herein granted to and vested in Trustee. If Beneficiary is a
corporation or an association, such appointment may be made on behalf of such
Beneficiary by any person who is then the president, or a vice-president, or the
cashier or secretary, or any other authorized officer or agent of Beneficiary.
In the event of the resignation or death of any such substitute trustee, or his
failure, refusal, or inability to make any such sale or perform such trusts, or,
at the option of Beneficiary, without cause, successive substitute trustees may
thereafter, from time to time, be appointed in the same manner. Wherever herein
the word “Trustee” is used, the same shall mean the person who is the duly
appointed trustee or substitute trustee hereunder at the time in question.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 8

 

 

(d)     Beneficiary may, or Trustee may upon written request of Beneficiary,
proceed by suit or suits, at law or in equity, to enforce the payment and
performance of the Obligation in accordance with the terms hereof and of the
Note or other instruments evidencing it, to foreclose the liens, security
interest and this Deed of Trust as against all or any part of the Property, and
to have all or any part of the Property sold under the judgment or decree of a
court of competent jurisdiction.

 

(e)     Beneficiary, as a matter of right and without regard to the sufficiency
of the security, and without any showing of insolvency, fraud, or mismanagement
on the part of Grantor, and without the necessity of filing any judicial or
other proceeding other than the proceeding for appointment of a receiver, shall
be entitled to the appointment of a receiver or receivers of the Property, or
any part thereof, and of the income, rents, issues, and profits thereof.

 

(f)     Beneficiary may enter upon the Land, take possession of the Property and
remove the Accessories, or any part thereof, with or without judicial process,
and, in connection therewith, without any responsibility or liability on the
part of Beneficiary, take possession of any property located on or in the
Property which is not a part of the Property and hold or store such property at
Grantor’s expense.

 

(g)     Beneficiary may require Grantor to assemble the Accessories, or any part
thereof, and make them available to Beneficiary at a place to be designated by
Beneficiary which is reasonably convenient to Grantor and Beneficiary.

 

(h)     After notification, if any, hereafter provided in this Subsection
3.1(h), Beneficiary may sell, lease, or otherwise dispose of, at the office of
Beneficiary, or on the Land, or elsewhere, as chosen by Beneficiary, all or any
part of the Accessories, in their then condition, or following any commercially
reasonable preparation or processing, and each Sale (as used in this Subsection,
the term “Sale” means any such sale, lease, or other disposition made pursuant
to this Subsection 3.1(h)) may be as a unit or in parcels, by public or private
proceedings, and by way of one or more contracts, and at any Sale, it shall not
be necessary to exhibit the Accessories, or part thereof, being sold. The Sale
of any part of the Accessories shall not exhaust Beneficiary’s power of Sale,
but Sales may be made from time to time until the Obligation is paid and
performed in full. Reasonable notification of the time and place of any public
Sale pursuant to this Subsection 3.1(h), or reasonable notification of the time
after which any private Sale is to made pursuant to this Subsection 3.1(h),
shall be sent to Grantor and to any other person entitled to notice under the
Uniform Commercial Code in effect under the laws of the state of Texas (the
“Code”); provided that if the Accessories or part thereof being sold are
perishable, or threaten to decline rapidly in value, or are of a type
customarily sold on a recognized market, Beneficiary may sell, lease, or
otherwise dispose of the Accessories, or part thereof, without notification,
advertisement, or other notice of any kind. 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 notification and notice for the purposes
of this Subsection 3.1(h).

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 9

 

 

(i)     Beneficiary may surrender the insurance policies maintained pursuant to
Subsection 2.2(b) hereof, or any part thereof, and receive and apply the
unearned premiums as a credit on the Obligation, and in connection therewith,
Grantor hereby appoints Beneficiary as the agent and attorney-in-fact for
Grantor to collect such premiums.

 

(j)     Beneficiary may retain the Accessories in satisfaction of the Obligation
whenever the circumstances are such that Beneficiary is entitled to do so under
the Code.

 

(k)   Beneficiary may buy the Property, or any part thereof, at any public or
judicial sale.

 

(l)     Beneficiary may buy the Accessories, or any part thereof, at any private
sale if the Accessories, or part thereof, being sold are a type customarily sold
in a recognized market or are a type which is the subject of widely distributed
standard price quotations.

 

(m)    Beneficiary shall have and may exercise any and all other rights and
remedies which Beneficiary may have at law or in equity, or by virtue of any
other security instrument, or under the Code, or otherwise.

 

(n)     Beneficiary may apply the reserves, if any, required by Section 5.9
hereof, toward payment of the Obligation.

 

Section 3.2 Beneficiary as Purchaser. If Beneficiary is the purchaser of the
Property, or any part thereof, at any sale thereof, whether such sale be under
the power of sale hereinabove vested in Trustee, or upon any other foreclosure
of the liens and security interest hereof, or otherwise, Beneficiary shall, upon
any such purchase, acquire good title to the Property so purchased, free of the
liens and security interest of these presents.

 

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Section 3.3 Other Rights of Beneficiary. Should any part of the Property come
into the possession of Beneficiary, whether before or after default, Beneficiary
may use or operate the Property for the purpose of preserving it or its value,
pursuant to the order of a court of appropriate jurisdiction, or in accordance
with any other rights held by Beneficiary in respect to the Property. Grantor
covenants to promptly reimburse and pay to Beneficiary, at the place where the
Note is payable, the amount of all reasonable expenses (including the cost of
any insurance, taxes, or other charges), incurred by Beneficiary in connection
with its custody, preservation, use, or operation of the Property, together with
interest thereon from the date incurred by Beneficiary at the rate provided in
the Note, and all such expenses, costs, taxes, interest, and other charges shall
be a part of the Obligation. It is agreed, however, that the risk of loss or
damage to the Property is on Grantor, and Beneficiary shall have no liability
whatsoever for decline in value of the Property, or for failure to obtain or
maintain insurance, or for failure to determine whether insurance in force is
adequate as to amount or as to the risks insured.

 

Section 3.4 Possession After Foreclosure. In case the liens or security interest
hereof shall be foreclosed by Trustee’s sale or by judicial action, the
purchaser at any such sale shall receive, as an incident to his ownership,
immediate possession of the property purchased, and if Grantor or Grantor’s
successors shall hold possession of said Property, or any part thereof,
subsequent to foreclosure, Grantor and Grantor’s successors shall be considered
as tenants at sufferance of the purchaser at foreclosure sale, and anyone
occupying the Property after demand is made for possession thereof. shall be
guilty of forcible detainer and shall be subject to eviction and removal,
forcible or otherwise, with or without process of law, and all damages by reason
thereof are hereby expressly waived.

 

Section 3.5 Application of Sales Proceeds Upon Foreclosure. The proceeds from
any sale, lease, or other disposition made pursuant to this Article III, or the
proceeds from surrendering any insurance policies pursuant to Subsection 3.1(i)
hereof, or the reserves required by Section 5.9 hereof, or sums received
pursuant to Section 5.7 hereof, or proceeds from insurance which Beneficiary
elects to apply to the Obligation pursuant to Section 5.8 hereof, shall be
applied by Trustee, or by Beneficiary, as the case may be, as follows: First, to
the payment of all expenses of advertising, preserving, selling, and conveying
the Property, or part thereof, including reasonable attorney’s fees, and
including a reasonable commission to Trustee; second, to interest on the
Obligation; third, to principal on the matured portion of the Obligation;
fourth, to prepayment of the unmatured portion, if any, of the Obligation
applied to installments of principal in inverse order of maturity; and fifth,
the balance, if any, remaining after the full and final payment and performance
of the Obligation, to the person or persons legally entitled thereto.

 

Section 3.6 Abandonment of Sale. In the event a foreclosure hereunder should be
commenced by Trustee in accordance with Subsection 3.1(c) hereof, Beneficiary
may at any time before the sale, direct Trustee to abandon the sale, and may
then institute suit for the collection of the Note, and for the foreclosure of
the liens and security interest hereof. If Beneficiary should institute a suit
for the collection of the Note, and for a foreclosure of the liens and security
interest hereof, it may at any time before the entry of a final judgment in said
suit dismiss the same, and require Trustee to sell the Property, or any part
thereof, in accordance with the provisions of this Deed of Trust.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 11

 

 

ARTICLE IV

 

Miscellaneous

 

Section 4.1 Release. If the Obligation is paid in full in accordance with the
terms of this Deed of Trust and the Note and other instruments evidencing or
securing such Obligation, and if Grantor shall well and truly perform all of
Grantor’s covenants contained herein and in the other Loan Documents, then this
conveyance shall become null and void and be released at Grantor’s request and
expense.

 

Section 4.2 Rights Cumulative. All rights, remedies, powers, and privileges and
all liens, titles, and security interests herein expressly conferred are
cumulative, and shall not be deemed to deprive Beneficiary or Trustee of any
other legal or equitable rights, remedies, powers, privileges, liens, titles, or
security interests by or through judicial proceedings or otherwise appropriate
to enforce the conditions, covenants, and terms of this Deed of Trust, the Note,
and other and other Loan Documents.

 

Section 4.3 Waiver. Any and all covenants in this Deed of Trust may from time to
time, by instrument in writing signed by Beneficiary and delivered to Grantor,
be waived to such extent and in such manner as Beneficiary may desire, but no
such waiver shall ever affect or impair Beneficiary’s rights, remedies, powers,
privileges, liens, titles, and security interest hereunder, except to the extent
so specifically stated in such written agreement. Neither the exercise of, nor
the failure to exercise any option or remedy under the terms of this Deed of
Trust shall be considered as a waiver of the right to exercise same, or any
other option or remedy given herein.

 

Section 4.4 Maximum Rate of Interest. Grantor and Beneficiary intend to comply
with the applicable law governing the Maximum Rate (hereafter defined). All
agreements between Grantor and Beneficiary, whether now existing or hereafter
arising and whether written or oral, are expressly limited so that in no event
whatsoever, whether by reason of acceleration of the maturity of the Obligation
or otherwise, shall the interest contracted for, charged, or received by
Beneficiary hereunder or otherwise exceed the Maximum Rate. If, in any
contingency whatsoever, Beneficiary shall receive anything of value deemed
interest under applicable law which would cause the interest contracted for,
charged, or received by the Beneficiary to exceed the Maximum Rate, the
excessive interest shall be applied to the reduction of the unpaid principal
balance of the Obligation and not to the payment of interest, or if such
excessive interest exceeds the unpaid principal balance of the Obligation, such
excess shall be refunded to Grantor, and the provisions herein and any demand on
Grantor shall immediately be deemed reformed, and the amounts thereafter
collectible hereunder shall be reduced, without the necessity of the execution
of any new documents, so as to comply with the applicable law, but so as to
permit the recovery of the fullest amount otherwise called for hereunder. All
interest paid or agreed to be paid to the Beneficiary, to the extent permitted
by applicable law, shall be amortized, prorated, allocated, and spread
throughout the full term of such indebtedness until payment in full (including
the period of any renewal or extension hereof) so that the rate or amount of
interest on account of such indebtedness does not exceed the Maximum Rate.

 

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The term “Maximum Rate,” as used herein, shall mean the maximum nonusurious
interest rate, if any, that at any time, or from time to time, may under
applicable law be contracted for, taken, reserved, charged or received on the
Obligation, or any portion thereof, under the laws which are presently in effect
of the United States and the State of Texas applicable to such Beneficiary and
such indebtedness or, to the extent allowed by law under such applicable laws of
the United States of America and the State of Texas which may hereafter be in
effect, which allow a higher maximum non-usurious interest rate than applicable
laws now allow; provided, that in determining the Maximum Rate, due regard shall
be given, to the extent required by applicable law, to any and all relevant
payments, fees, charges, deposits, balances, agreements and calculations which
may constitute or be deemed to constitute interest, or be deducted from
principal to calculate the interest rate or otherwise affect interest rate
determinations, so that in no event shall the Beneficiary contract for, charge,
receive, take, collect, reserve or apply, on the Obligation, or any portion
thereof, any amount in excess of the maximum non-usurious rate of interest
permitted by applicable law.

 

Section 4.5 Effect of Transfer on Grantor’s Liability. If the ownership of the
Property or any part thereof becomes vested in a person other than Grantor or in
the event of a change in ownership of any Grantor other than an individual,
Beneficiary may, without notice to Grantor or Grantor’s successors, deal with
such successor or successors in interest with reference to this Deed of Trust
and the Obligation, either by way of forbearance on the part of Beneficiary, or
extension of time of payment of the Obligation, or release of all or any part of
the Property or any other property securing payment of the Obligation, or
otherwise, without in any way modifying or affecting Beneficiary’s rights and
liens hereunder or the liability of Grantor or any other party liable for
payment of the Obligation, in whole or in part.

 

Section 4.6 Waiver of Right to Marshal. Grantor hereby waives all rights of
marshaling in event of any foreclosure of the liens and security interests
hereby created.

 

Section 4.7 Condemnation Proceeds. Beneficiary shall be entitled to receive any
and all sums which may be awarded or become payable to Grantor for the
condemnation of the Property, or any part thereof, for public or quasi-public
use, or by virtue of private sale in lieu thereof, and any sums which may be
awarded or become payable to Grantor for damages caused by public works or
construction on or near the Property. All such sums are hereby assigned to
Beneficiary, and Grantor shall, upon request of Beneficiary, make, execute,
acknowledge, and deliver any and all additional assignments and documents as may
be necessary from time to time to enable Beneficiary to collect and receipt for
any such sums. Beneficiary shall not be, under any circumstances, liable or
responsible for failure to collect or exercise diligence in the collection of
any of such sums. Any sums received by Beneficiary in the event of condemnation
shall be applied to installments on the Obligation in inverse order of maturity.
Notwithstanding anything to the contrary herein, and subject to Beneficiary’s
prior written consent, which will not be unreasonably withheld or delayed, and
so long as there is no Event of Default and Beneficiary reasonably determines
that the Property can be fully restored or repaired to its original value with
available funds, the proceeds of any award shall be disbursed to Grantor for use
to restore or repair the Property, subject to Beneficiary’s standard
construction disbursement procedures.

 

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Section 4.8 Insurance Proceeds. The proceeds of any and all insurance upon the
Property shall be collected by Beneficiary. However, subject to Beneficiary’s
prior written consent, which will not be unreasonably withheld or delayed, and
so long as there is no Event of Default and Beneficiary reasonably determines
that the Property can be fully restored or repaired to its original value with
available funds, the proceeds of any award shall be disbursed to Grantor for use
to restore or repair the Property, subject to Beneficiary’s standard
construction disbursement procedures.

 

Section 4.9 Reserve for Taxes and Insurance Premiums. At the request of
Beneficiary upon an Event of Default which continues beyond any applicable cure
period, Grantor shall create a fund or reserve for the payment of all insurance
premiums, taxes, and assessments against or affecting the Property in accordance
with the Loan Agreement. Any excess reserve shall, at the discretion of
Beneficiary, be credited by Beneficiary on subsequent reserve payments or
subsequent payments to be made on the Note by the maker thereof, and all
deficiency shall be paid by Grantor to Beneficiary on or before the date when
such premiums, taxes, and assessments shall become delinquent. In the event
there exists a deficiency in such fund or reserve at any time when taxes,
assessments, or insurance premiums are due and payable, Beneficiary may, but
shall not be obligated to, advance the amount of such deficiency on behalf of
the Grantor, and such amounts so advanced shall become a part of the Obligation,
shall be immediately due and payable and shall bear interest at the rate
provided in the Note from the date of such advance through and including the
date of repayment. Transfer of legal title to the Property shall automatically
transfer the interest of Grantor in all sums deposited with Beneficiary under
the provisions hereof or otherwise. In the event that Beneficiary does not
request that such a fund be established, Grantor hereby agrees that he will
promptly pay all premiums, taxes, and assessments when due, and will furnish to
Beneficiary proof of payment within 45 days of the due date by submitting
cancelled checks along with the statement concerning such taxes, premiums, or
assessments.

 

Section 4.10 Right to Accelerate Upon Transfer. If Grantor shall sell, convey,
assign, or transfer all or any part of the Property or any interest therein or
any beneficial interest in the Grantor in violation of the Loan Documents,
Beneficiary may at Beneficiary’s option, declare the Obligation to be
immediately due and payable, which option may be exercised at any time following
such sale, conveyance, assignment, or transfer. Beneficiary may in its sole
discretion and at Grantor’s request decide not to exercise said option in which
event Beneficiary’s forbearance may be predicated on such terms and conditions
as Beneficiary may in its sole discretion require, including but not limited to
Beneficiary’s approval of the transferee’s credit worthiness and management
ability, and the execution and delivery to Beneficiary by transferee, prior to
the sale, transfer, assignment, or conveyance of a written assumption agreement
containing such terms as Beneficiary may require, including but not limited to,
a payment of a part of the principal amount of the Obligation, the payment of an
assumption fee, a modification of the term of the Obligation, and such other
terms as Beneficiary may require. Should the Property be sold, traded,
transferred, assigned, exchanged, or otherwise disposed of without the prior
written consent of Beneficiary and payment of any portion of the Obligation is
thereafter accepted by the Beneficiary such acceptance shall not be deemed a
waiver of the requirement of Beneficiary’s consent in writing thereto or with
respect to any other sale, trade, transfer, assignment, exchange, or other
disposition.

 

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Section 4.11 Prohibition Against Subordinate Financing. If Grantor without the
prior written consent of Beneficiary, executes or delivers any pledge, security
agreement, mortgage, or deed of trust covering all or any portion of the
Property (hereafter called “Subordinate Mortgage”) Beneficiary may, at
Beneficiary’s option, which option may be exercised at any time following such
pledge, security agreement, mortgage, or deed of trust, declare the Obligation
to be immediately due and payable. In the event of consent by Beneficiary to the
foregoing or in the event the foregoing prohibition is determined by a court of
competent jurisdiction to be unenforceable under the provisions of any
applicable law, Grantor will not execute or deliver any Subordinate Mortgage
unless there shall have been delivered to Beneficiary not less than ten (10)
days prior to the date thereof a copy thereof which shall contain express
covenants to the effect: (a) that the Subordinate Mortgage is in all respects
unconditionally subject and subordinate to the lien, security interest, and
assignment evidenced by this Deed of Trust and each term and provision hereof;
(b) that if any action or proceeding shall be instituted to foreclose the
Subordinate Mortgage (regardless of whether the same is a judicial proceeding or
pursuant to a power of sale contained therein), no tenant of any portion of the
Property will be named as a party defendant, or will any action be taken with
respect to the Property which would terminate any occupancy or tenancy of the
Property without the prior written consent of Beneficiary; (c) that the rents
and profits, if collected through a receiver or by the Beneficiary of the
Subordinate Mortgage, shall be applied first to the Obligations, including
principal and interest due and owing on or to become due and owing on the Note
and the other indebtedness secured hereby and then to the payment of
maintenance, operating charges, taxes, assessments, and disbursements incurred
in connection with the ownership, operation, and maintenance of the Property;
and (d) that if any action or proceeding shall be brought to foreclose the
Subordinate Mortgage, (regardless of whether the same is a judicial proceeding
or pursuant to a power of sale contained therein), written notice of the
commencement thereof will be given to Beneficiary contemporaneously with the
commencement of such action or proceeding.

 

Section 4.12 Subrogation. It is understood and agreed that the proceeds of the
Note, to the extent the same are utilized to renew or extend any indebtedness or
take up any outstanding liens against the Property, or any portion thereof, have
been advanced by Beneficiary at Grantor’s request and upon Grantor’s
representation that such amounts are due and payable. Beneficiary shall be
subrogated to any and all rights, remedies, powers, privileges, liens, titles,
and security interests owned or claimed by any owner or Beneficiary of said
outstanding indebtedness or lien, however remote, regardless of whether said
indebtedness or lien is acquired by assignment or is released by the Beneficiary
thereof upon payment.

 

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Section 4.13 Covenant to Perform. Grantor and each and every subsequent owner of
the Property, or any part thereof, covenants and agrees that Grantor will
perform or cause to be performed, each and every condition, term, provision, and
covenant of this Deed of Trust, except that Grantor shall have no duty to pay
the indebtedness evidenced by the Note except in accordance with the terms of
the Note and all renewals and extensions thereof, and this Deed of Trust or in
accordance with the terms of the transfer to Grantor.

 

Section 4.14 Notice. Any notice or other written communication required or
permitted hereunder shall be made in accordance with Section 8.2 of the Loan
Agreement.

 

Section 4.15 Enforceability. If the rights and liens created by this Deed of
Trust shall be held by a court of competent jurisdiction to be invalid or
unenforceable as to any part of the Obligation, the unsecured portion of the
Obligation shall be completely paid prior to the payment of the remaining and
secured portion of the Obligation, and all payments made on the Obligation shall
be considered to have been paid on and applied first to the complete payment of
the unsecured portion of the Obligation.

 

Section 4.16 Successors and Assigns. This Deed of Trust is binding upon Grantor
and Grantor’s successors, and shall inure to the benefit of Beneficiary, and its
successors and assigns, and the provisions hereof shall be covenants running
with the Land. The duties, covenants, conditions, obligations, and warranties of
Grantor in this Deed of Trust shall be joint and several obligations of Grantor
and Grantor’s successors.

 

Section 4.17 Counterparts. This Deed of Trust may be executed in a number of
identical counterparts, each of which, for all purposes, shall be deemed an
original. If any Grantor is a corporation, this instrument is executed, sealed,
and attested by Grantor’s officers hereunto duly authorized.

 

Section 4.18 Financing Statement. This Deed of Trust is intended to be a
financing statement filed as a fixture filing with respect to the Accessories
and the goods described at the beginning of this Deed of Trust which are or are
to become fixtures relating to he Land. The address of Grantor (Debtor) is set
forth on the first page hereof and the address of Beneficiary (Secured Party) is
set forth in Section 1.1 hereof. This Deed of Trust is to be filed for record in
the real property records of the county clerk of the county or counties where
the Land is located. Grantor is the record owner of the Land. A carbon,
photographic, or other reproduction of this Deed of Trust or of a financing
statement pursuant hereto is sufficient as a financing statement.

 

Section 4.19 Partial Invalidity. If the lien of this Deed of Trust is invalid or
unenforceable as to any part of the debt, or if the lien is invalid or
unenforceable as to any part of the Land, the unsecured or partially secured
portion of the debt shall be completely paid prior to the payment of the
remaining and secured or partially secured portion of the debt, and all payments
made on the debt, whether voluntary or under foreclosure or other enforcement
action or procedure, shall be considered to have been first paid on and applied
to the full payment of that portion of the debt which is not secured or fully
secured by the lien of this Deed of Trust.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 16

 

 

Section 4.20 Appraisal. Beneficiary may from time to time obtain, or require
Grantor to obtain for Beneficiary, an appraisal performed by a licensed or
certified appraiser acceptable to Beneficiary of any real property securing any
extension of credit by Beneficiary to Grantor. Grantor shall insure that such
appraiser has free and full access to the subject real property for the purpose
of making an appraisal. Grantor consents to such access by appraiser. If Grantor
is not in possession of the real property at the time of the appraisal, Grantor
shall obtain any consent and cooperation of any person in possession of the real
property at the time of the appraisal. Unless prohibited by applicable law,
Grantor shall pay to Beneficiary, on demand, any fees incurred by Beneficiary in
obtaining any appraisal required under a regulation or policy of any applicable
governmental authority or required under Beneficiary’s loan policy. Grantor’s
obligation under this paragraph shall be secured by Beneficiary’s lien upon the
subject real property unless the real property is the homestead of the Grantor.
However, notwithstanding the foregoing, Beneficiary will not require more than
one (1) such appraisal in any calendar year unless there is an Event of Default
which continues beyond any applicable cure period

 

Section 4.21 Attorneys’ Fees. If this Deed of Trust or any document related to
it is given by Beneficiary to an attorney for enforcement, or if suit is brought
for collection or enforcement, or if this Deed of Trust or any document related
to it is collected or enforced through probate, bankruptcy or other judicial
proceeding (or Beneficiary takes action to protect its interests through
probate, bankruptcy or other judicial proceedings), Grantor shall pay
Beneficiary reasonable attorneys’ fees, court costs and expenses in addition to
other amounts due hereunder.

 

Section 4.22 Severability. Except as expressly provided to the contrary herein,
each section, part, term, or provision of this Deed of Trust shall be considered
severable, and if for any reason any article, section, part, term, or provision
herein is determined to be invalid and contrary to or in conflict with any
existing or future law or regulation by a court or governmental agency having
valid jurisdiction, such determination shall not impair the operation of or have
any other effect on other sections, parts, terms, or provisions of this Deed of
Trust as may remain otherwise intelligible, and the latter shall continue to be
given full force and effect and bind the parties hereto, and said invalid
sections, parts, terms, or provisions shall not be deemed to be a part of this
Deed of Trust.

 

Section 4.23 No Agency, Partnership or Joint Venture. Nothing contained herein
nor any acts of the parties hereto shall be deemed or construed by the
Beneficiary or by any other party as creating the relationship between them of
(i) principal and agent, (ii) a partnership, or (iii) a joint venture.

 

Section 4.24 Cross-Default Provision. It is expressly understood and agreed that
should Grantor, fail to pay any other indebtedness or any part thereof,
principal or interest, as the same shall become due and payable, which may be
secured by a lien or liens on the Property herein described, the Obligation
hereby secured, at the option of the Beneficiary, shall become due and payable.
Grantor hereby assigns to Beneficiary any right Grantor may have by reason of
any prior encumbrance on the Property or by law or otherwise to cure any default
under said prior encumbrance.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 17

 

 

Section 4.25 Nevada-Specific Provisions.

 

(a)Principles of Construction. In the event of any inconsistencies between the
terms and conditions of this Section 4.25 and other terms and conditions of this
Deed of trust, the terms and conditions of this Section 4.25 shall control and
be binding.

 

(b)Fixture Filing. Supplementing the provisions of Section 4.18 of this Deed of
Trust, this Deed of Trust shall constitute a fixture filing pursuant to NRS
104.9402, as amended from time to time. Some or all of the collateral may be or
become a fixture in which Beneficiary has a security interest under the security
agreement provided for in Section 4.18 above (the “Security Agreement”). The
rights, remedies and interests of Beneficiary are independent and cumulative,
and there shall be no merger of any lien hereunder with any security interest
created by the Security Agreement.

 

(c)Future Advances. This Deed of Trust secures future advances, as defined in
NRS 106.320, and is to be governed by NRS 106.300 to 106.400, inclusive. The
maximum principal amount to be secured hereby is $15,000,000. The maximum amount
of advances of principal to be secured by this Deed of Trust may increase or
decrease from time to time by amendment of this Deed of Trust.

(d)Cure Period. The time period for curing a default under the loan evidenced by
the Note, if any, shall run concurrently with the 35 day statutory cure period
under NRS 107.080(2)(a)(2).

 

(e)Subject to NRS 107.080 Foreclosure Procedures. Beneficiary’s rights and
remedies under this Deed of Trust shall be subject to NRS 107.080 et seq.

 

(f)Power to Enter for Environmental Issues. Without limiting any rights or
remedies of Beneficiary under any of the Loan Documents, Grantor agrees that
Beneficiary shall have, at a minimum, the same right, power and authority to
enter and inspect the Property as is granted to a secured lender under NRS
40.507, and that Beneficiary will have the right to appoint a receiver to
enforce the right to enter and inspect the Property to the extent such authority
is provided under the Loan Documents and/or Nevada law, including, without
limitation, the authority granted to a secured lender under NRS 32.015.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 18

 

 

(g)Ability to Waive Lien for Environmental Issues. In the event that any portion
of the Property is determined to be “environmentally impaired” (as
“environmentally impaired” is defined in NRS 40.503, then, without otherwise
limiting or in any way affecting Beneficiary’s or Trustee’s rights or remedies
under this Deed of Trust, Beneficiary may elect to exercise its right under NRS
40.501 through 40.512, inclusive, to (i) waive its lien on such environmentally
impaired or affected portion of the Property, and (ii) exercise the rights and
remedies of an unsecured creditor, including the reduction of its claim against
Grantor to judgment and any other rights and remedies permitted by applicable
laws. Grantor shall be deemed to have willfully permitted or acquiesced in a
release or threatened release of hazardous materials, within the meaning of NRS
40.505, if the release or threatened release of hazardous materials was
knowingly or negligently caused or contributed to by any lessee, occupant or
user of any portion of the Property and Grantor knew or should have known of the
activity by such lessee, occupant or user which caused or contributed to the
release or threatened release. Beneficiary shall have the right under this Deed
of Trust to allocate amounts recovered on the Obligation first to those portions
thereof other than damages and other amounts recoverable under NRS 40.509, and
thereafter to damages and other amounts recoverable under said statute.

 

(h)Personal Property May Be Sold as a Single Parcel by Election of Beneficiary.
Any sale of personal property may be held as a part of and in conjunction with
any foreclosure sale of the other properties and rights constituting the
Property in order that the Property, including the personal property, may be
sold as a single parcel if the Beneficiary elects, as permitted by NRS 104.9604,
and grantor agrees that such sale of personal property together with real
property constitutes a commercially reasonable sale of the personal property.

 

(i)Conflicts with Nevada Gaming Laws. All rights, remedies and powers provided
in this Deed of Trust may be exercise don to the extent that the exercise
thereof does not violate any applicable provision of the Nevada Gaming Laws, and
all provisions of this Deed of trust are intended to be subject to all
applicable mandatory provisions of the Nevada Gaming Laws which may be
controlling and to be limited to the extent necessary so that they will not
render this Deed of Trust invalid or unenforceable, in whole or in part.

 

(j)Waiver of Condemnation Proceeds. Grantor hereby specifically, unconditionally
and irrevocably waives all rights of a property owner granted under applicable
law which provide for allocation of condemnation proceeds between a property
owner and a lienholder, including the provisions of NRS 37.115.

 

(k)WAIVER OF CHAPTER 40 PROTECTIONS. GRANTOR DOES HEREBY RELINQUISH AND SHALL
CAUSE THE GUARANTOR, IF ANY, TO WAIVE AND RELINQUISH ALL RIGHTS AND REMEDIES
ACCORDED BY APPLICABLE LAW TO GRANTORS AND GUARANTORS GENERALLY AND AGREES NOT
TO ASSERT OR TAKE ADVANTAGE OF ANY SUCH RIGHTS OR REMEDIES, INCLUDING, WITHOUT
LIMITATION: ANY RIGHT PROVIDED BY NRS 40.430 AND JUDICIAL DECISIONS RELATING
THERETO, AND NRS 40.451 THROUGH 40.4639, INCLUSIVE. AND JUDICIAL DECISIONS
RELATING THERETO, OR ANY OTHER STATUTE OR DECISION, TO REQUIRE BENEFICIARY TO
PROCEED AGAINST GRANTOR OR ANY OTHER PERSON OR TO PROCEED AGAINST OR EXHAUST ANY
SECURITY HELD AT ANY TIME OR TO PURSUE ANY OTHER REMEDY IN BENEFICIARY’S POWER
BEFORE PROCEEDING AGAINST THE GRANTOR, GRANTOR SPECIFICALLY AGREEING THAT SUCH
WAIVERS ARE INTENDED TO TAKE ADVANTAGE OF THE WAIVERS PERMITTED BY NRS 40.495(2)
TO THE MAXIMUM EXTENT PERMITTED.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 19

 

 

EXECUTED and SEALED as of the date first above written.

        AQUA METALS RENO, INC., a   Delaware corporation       By:      /s/
Thomas Murphy          Thomas Murphy          Chief Financial Officer

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 20

 

 

STATE OF NEVADA §   § COUNTY OF STOREY §

 

THE FOREGOING INSTRUMENT was acknowledged before me on this _______ day of
November, 2015, by Thomas Murphy, Chief Financial Officer of AQUA METALS RENO,
INC.

 

WITNESS MY HAND AND OFFICIAL SEAL.

 

My Commission Expires:______________________         Notary Public, State of
Nevada

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 21

 

 

LEGAL DESCRIPTION

 

A TRACT OR PARCEL OF LAND CONTAINING 0.8205 ACRES OF LAND, (35,742 SQUARE FEET),
BEING A PORTION OF UNRESTRICTED RESERVE “B”, NOTTINGHAM COUNTRY, SECTION 7, A
SUBDIVISION IN HARRIS COUNTY, TEXAS, ACCORDING TO THE MAP OR PLAT THEREOF
RECORDED IN VOLUME 265, PAGE 1, OF THE MAP RECORDS OF HARRIS COUNTY, TEXAS, SAID
0.8205 ACRE TRACT OF LAND BEING THAT CERTAIN CALLED 0.8205 ACRE TRACT OF LAND AS
CONVEYED TO JAMES D. SAWYER AND LAWRENCE D. FIEGLEIN GENERAL PARTNERSHIP BY
INSTRUMENT RECORDED IN DOCUMENT CF NO. V507351 OF THE OFFICIAL PUBLIC RECORDS OF
HARRIS COUNTY, TEXAS, AND BEING MORE PARTICULARLY DESCRIBED BY METES AND BOUNDS
AS FOLLOWS: (BEARING BASIS: VOLLUME 265, PAGE 1, OF THE MAP RECORDS OF HARRIS
COUNTY, TEXAS).

 

BEGINNING at a calculated point for the most southeasterly cutback corner at the
intersection of the south right-of-way line of Kingsland Boulevard, (100.00 Foot
Right-of-Way), with the west right-of-way line of Shillington Drive, (60.00 Foot
Right-of-Way), same being the most easterly northeast corner of said Reserve “B”
same being the most easterly northeast corner and POINT OF BEGINNING of the
herein described tract;

 

Thence, S 01°47’36” E, with the west right-of-way line of Shillington Drive, a
distance of 163.66 feet to a 5/8” iron rod found for the northeast corner of
that certain called 1.4320 acre tract of land as conveyed to KOA Group, Inc., by
instrument recorded in Document CF No. 20130518899 of the Official Public
Records of Harris County, Texas, same being the southeast corner of the herein
described tract;

 

Thence, N 82°55’25” W, with the common line of said 1.4320 Acre Tract, a
distance of 229.54 feet to a calculated point on the common line of that certain
called 1.3652 acre tract of land as conveyed to Mustang Kingsland, L.P., by
instrument recorded in Document CF No. X237326 of the Official Public Records of
Harris County, Texas, for the northwest corner of said 1.4320 Acre Tract, same
being the southwest corner of the herein described tract;

 

Thence, N 07°04’35” E, with the common line of said 1.3652 Acre Tract, a
distance of 162.00 feet to a capped, (Precision), iron rod set on the south
right-of-way line of Kingsland Boulevard, on the arc of a curve to the left, for
the northeast corner of said 1.3652 Acre Tract, same being the northwest corner
of the herein described tract;

 

Thence, Southeasterly, with the south right-of-way line of Kingsland Boulevard,
along the arc of said curve to the left, having an included angle of 05°08’42”,
a radius of 2150.00 feet, a chord that bears, S 85°29’48” E, a chord distance of
193.00 feet, for an arc distance of 193.06 feet to a calculated point for the
most northwesterly cutback corner at the intersection of the south right-of-way
line of Kingsland Boulevard with the west right-of-way line of Shillington
Drive, same being the most northwesterly northeast corner of the herein
described tract;

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 22

 

 

Thence, S 44°59’50” E, with the south right-of-way line of Kingsland Boulevard,
a distance of 14.58 feet to the POINT OF BEGINNING and containing 0.8205 acres
of land, (35,742 square feet), more or less.

 

DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILINGPage 23