Exhibit 10.14

SECOND AMENDMENT TO SECOND AMENDED AND RESTATED

CREDIT AND SECURITY AGREEMENT

THIS SECOND AMENDMENT (the “Amendment”), dated February 3, 2014, is entered into
by and between SCHUFF INTERNATIONAL, INC., a Delaware corporation, and the other
Persons listed in Schedule 1.1 of the Credit Agreement, as hereafter defined
(collectively, jointly and severally the “Borrower”), and WELLS FARGO CREDIT,
INC., a Minnesota corporation (“Lender”).

RECITALS

The Borrower and the Lender are parties to a Second Amended and Restated Credit
and Security Agreement dated August 14, 2013 (as amended from time to time, the
“Credit Agreement”). Capitalized terms used in these recitals have the meanings
given to them in the Credit Agreement unless otherwise specified.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:

1. Credit Agreement Amendment. The Credit Agreement is hereby amended as
follows:

(a) Section 6.2(d) of the Credit Agreement is hereby deleted and replaced as
follows:

(d) Capital Expenditures. The Borrower shall not in any fiscal year incur
unfinanced Capital Expenditures in excess of (i) $8,000,000.00 during the
Borrower’s 2013 fiscal year, (ii) $12,000,000.00 in the aggregate during the
Borrower’s 2014 fiscal year, and (iii) $5,000,000.00 in the aggregate in any
fiscal year thereafter.

(b) Exhibit B of the Credit Agreement is hereby deleted and replaced with
Exhibit B attached hereto.

2. No Other Changes. Except as explicitly amended by this Amendment, all of the
terms and conditions of the Credit Agreement shall remain in full force and
effect and shall apply to any advance or letter of credit thereunder.

3. Conditions Precedent. This Amendment shall be effective when the Lender shall
have received an executed original hereof, together with each of the following,
each in substance and form acceptable to the Lender in its sole discretion:

(a) A Certificate of the Secretary of the Borrower certifying as to (i) the
resolutions of the board of directors of the Borrower approving the execution
and delivery of this Amendment, (ii) the fact that the articles of incorporation
and bylaws or articles of organization and operating agreement, as applicable,
of the Borrower, which were certified and delivered to the Lender pursuant to a
previous Certificate of Authority of the Borrower’s secretary or assistant
secretary continue in full force and effect and have not been amended or
otherwise modified except as set forth in the Certificate to be delivered, and
(iii) certifying that the officers and agents of the Borrower who have been
certified to the Lender, pursuant to a previous Certificate of Authority of the
Borrower’s secretary or assistant secretary, as being authorized to sign and to
act on behalf of the Borrower continue to be so authorized or setting forth the
sample signatures of each of the officers and agents of the Borrower authorized
to execute and deliver this Amendment and all other documents, agreements and
certificates on behalf of the Borrower.

 

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(b) The Deed of Trust and Assignment of Rents and Leases in the form attached
hereto as Exhibit 1, duly executed and acknowledged by Guarantor.

(c) Such other matters as the Lender may reasonably require.

4. Representations and Warranties. The Borrower hereby represents and warrants
to the Lender as follows:

(a) The Acknowledgment and Agreement of Guarantors set forth at the end of this
Amendment, duly executed by each Guarantor.

(b) The Borrower has all requisite power and authority to execute this Amendment
and any other agreements or instruments required hereunder and to perform all of
its obligations hereunder, and this Amendment and all such other agreements and
instruments has been duly executed and delivered by the Borrower and constitute
the legal, valid and binding obligation of the Borrower, enforceable in
accordance with its terms.

(c) The execution, delivery and performance by the Borrower of this Amendment
and any other agreements or instruments required hereunder have been duly
authorized by all necessary corporate action and do not (i) require any
authorization, consent or approval by any governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, (ii) violate any
provision of any law, rule or regulation or of any order, writ, injunction or
decree presently in effect, having applicability to the Borrower, or the
articles of incorporation or by-laws of the Borrower, or (iii) result in a
breach of or constitute a default under any indenture or loan or credit
agreement or any other agreement, lease or instrument to which the Borrower is a
party or by which it or its properties may be bound or affected.

(d) All of the representations and warranties contained in Article V of the
Credit Agreement are correct on and as of the date hereof as though made on and
as of such date, except to the extent that such representations and warranties
relate solely to an earlier date.

5. References. All references in the Credit Agreement to “this Agreement” shall
be deemed to refer to the Credit Agreement as amended hereby; and any and all
references in the Security Documents to the Credit Agreement shall be deemed to
refer to the Credit Agreement as amended hereby.

6. No Waiver. The execution of this Amendment and the acceptance of all other
agreements and instruments related hereto shall not be deemed to be a waiver of
any Default or Event of Default under the Credit Agreement or a waiver of any
breach, default or event of default under any Security Document or other
document held by the Lender, whether or not known to the Lender and whether or
not existing on the date of this Amendment.

7. Release. The Borrower, and each Guarantor by signing the Acknowledgment and
Agreement of Guarantors set forth below, hereby absolutely and unconditionally
releases and forever discharges the Lender, and any and all participants, parent
corporations, subsidiary corporations, affiliated corporations, insurers,
indemnitors, successors and assigns thereof, together with all of the present
and former directors, officers, agents and

 

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employees of any of the foregoing, from any and all claims, demands or causes of
action of any kind, nature or description, whether arising in law or equity or
upon contract or tort or under any state or federal law or otherwise, which the
Borrower or each Guarantor has had, now has or has made claim to have against
any such person for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date of this
Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.

8. Costs and Expenses. The Borrower hereby reaffirms its agreement under the
Credit Agreement to pay or reimburse the Lender on demand for all costs and
expenses incurred by the Lender in connection with the Loan Documents, including
without limitation all title insurance premiums and all reasonable fees and
disbursements of legal counsel. Without limiting the generality of the
foregoing, the Borrower specifically agrees to pay all reasonable fees and
disbursements of counsel to the Lender for the services performed by such
counsel in connection with the preparation of this Amendment and the documents
and instruments incidental hereto. The Borrower hereby agrees that the Lender
may, subject to the terms of this Amendment, in its sole discretion and without
further authorization by the Borrower, make a loan to the Borrower under the
Credit Agreement, or apply the proceeds of any loan, for the purpose of paying
any such fees, disbursements, costs and expenses.

9. Release of Guarantor. Lender hereby releases the Guarantor from all of its
obligations under the Limited Recourse Guaranty, dated as of February 15, 2012,
executed by the Guarantor in favor of Lender (the “Guaranty”). Borrower hereby
consents to said release. This release shall be effective only as to the
Guaranty. Nothing herein shall in any be construed as entitling the Borrower or
any other Guarantor to any other or further release in any similar or other
circumstances.

10. Miscellaneous. This Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be deemed an original and all
of which counterparts, taken together, shall constitute one and the same
instrument.

[EXECUTION PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective officers thereunto duly authorized as of the date first
above written.

 

For Each Person Comprising the Borrower

 

c/o Schuff International, Inc.

1841 W. Buchanan Street

Phoenix, Arizona 85007

Telecopier: (602) 452-4465

Attention: Michael R. Hill

e-mail: mike.hill@schuff.com

    SCHUFF INTERNATIONAL, INC., a Delaware corporation     By  

 

LOGO [g739428exc_pg4a.jpg]

 

      Michael R. Hill     Its:   Vice President and Chief Financial Officer    
SCHUFF STEEL COMPANY, a Delaware corporation     By:  

 

LOGO [g739428exc_pg4b.jpg]

 

      Michael R. Hill     Its:   Vice President and Chief Financial Officer    
SCHUFF STEEL – ATLANTIC, LLC., a Florida limited liability company     By:    
Schuff Steel Company, a Delaware corporation         Its Managing Member        
By:  

LOGO [g739428exc_pg4c.jpg]

 

          Michael R. Hill         Its:   Vice President and Chief Financial
Officer     QUINCY JOIST COMPANY, a Delaware corporation     By:  

LOGO [g739428exc_pg4d.jpg]

 

      Michael R. Hill       Its:   Vice President     SCHUFF STEEL – GULF COAST,
INC., a Delaware corporation     By:  

LOGO [g739428exc_pg4e.jpg]

 

      Michael R. Hill       Its:   Vice President

 

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ON-TIME STEEL MANAGEMENT HOLDING, INC., a Delaware corporation By:  

LOGO [g739428exc_pg5a.jpg]

 

  Michael R. Hill   Its:   Vice President SCHUFF HOLDING CO., a Delaware
corporation By  

LOGO [g739428exc_pg5b.jpg]

 

Name:  

Michael R. Hill

Title:  

Chairman and President

ADDISON STRUCTURAL SERVICES, INC., a Florida corporation By  

LOGO [g739428exc_pg5c.jpg]

 

Name:  

Michael R. Hill

Title:  

Chairman and President

SCHUFF STEEL MANAGEMENT COMPANY- SOUTHEAST L.L.C., a Delaware limited liability
company By  

LOGO [g739428exc_pg5d.jpg]

 

Name:  

Michael R. Hill

Title:  

Manager

SCHUFF STEEL MANAGEMENT COMPANY- SOUTHWEST, INC., a Delaware corporation By:  

LOGO [g739428exc_pg5e.jpg]

 

  Michael R. Hill   Its:   Vice President SCHUFF STEEL MANAGEMENT COMPANY-
COLORADO, L.L.C., a Delaware limited liability company By:  

LOGO [g739428exc_pg5fnew.jpg]

 

  Michael R. Hill, Manager

 

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SCHUFF PREMIER SERVICES LLC, a Delaware limited liability company By:  

LOGO [g739428exc_pg6.jpg]

 

  Michael R. Hill Its:  

Manager

WELLS FARGO CREDIT, INC. By  

 

  Its Authorized Signatory

 

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WELLS FARGO CREDIT, INC. By  

LOGO [g739428exc_pg7.jpg]

 

  Its Authorized Signatory

 

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Exhibit B to Credit and Security Agreement

COMPLIANCE CERTIFICATE

 

To:  

 

  Wells Fargo Credit, Inc. Date:                   , 2014 Subject:  

 

  Financial Statements

In accordance with our Second Amended and Restated Credit and Security Agreement
dated August 14, 2013, as amended from time to time (the “Credit Agreement”),
attached are the financial statements of Schuff International, Inc. and its
Subsidiaries as of and for             , 20     (the “Reporting Date”) and the
year-to-date period then ended (the “Current Financials”). All terms used in
this certificate have the meanings given in the Credit Agreement.

I certify that the Current Financials have been prepared in accordance with
GAAP, subject to year-end audit adjustments, and fairly present the Borrower’s
financial condition as of the date thereof.

Events of Default. (Check one):

 

  ¨ The undersigned does not have knowledge of the occurrence of a Default or
Event of Default under the Credit Agreement except as previously reported in
writing to the Lender.

 

  ¨ The undersigned has knowledge of the occurrence of a Default or Event of
Default under the Credit Agreement not previously reported in writing to the
Lender and attached hereto is a statement of the facts with respect to thereto.
The Borrower acknowledges that pursuant to Section 2.8(b) of the Credit
Agreement, the Lender may impose the Default Rate at any time during the
resulting Default Period to be effective as of any date permitted under the
Agreement.

Financial Covenants. I further certify to the Lender as follows: (Check one):

 

  ¨ The Reporting Date marks the end of one of the Borrower’s fiscal months, but
not the end of a fiscal quarter or fiscal year; hence I am completing all items
below except items      and     .

 

  ¨ The Reporting Date marks the end of one of the Borrower’s fiscal quarters
but not the end of a fiscal year, hence I am completing all items below except
items      and     .

 

  ¨ The Reporting Date marks the end of the Borrower’s fiscal year, hence I am
completing all paragraphs below all items below.

 

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I further certify to the Lender as follows:

1. Section 6.2(a) – Fixed Charge Coverage Ratio.

 

Quarter Ending

   Minimum Required Fixed
Charge Coverage Ratio    Actual  

December 31, 2012

   1.20 to 1                     

March 31, 2013

   1.20 to 1   

June 30, 2013

   1.20 to 1   

September 30, 2013

   1.20 to 1   

December 31, 2013

   1.20 to 1   

2. Section 6.2(b) Total Debt to EBITDA

 

Quarter Ending

   Minimum Required Ratio    Actual  

December 31, 2012

   3.0 to 1                     

March 31, 2013

   3.0 to 1   

June 30, 2013

   3.0 to 1   

September 30, 2013

   2.75 to 1   

December 31, 2013

   2.75 to 1   

3. Section 6.2(c) Free Cash Flow

 

Year

   Requirement =    Actual  

Each Fiscal Year from and after 2013

   30% of Free Cash Flow                     

4. Section 6.2(d)

 

Year

   Maximum Permitted
Unfinanced Capital
Expenditures      Actual

2013

   $ 8,000,000.00      

2014

   $ 12,000,000.00      

Each Fiscal Year thereafter

   $ 5,000,000.00      

 

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5. Section 6.2(e)

 

Month

   Maximum Permitted
Net Loss      Actual  

Any single month

   $ 600,000.00                        

Any two consecutive months

   $ 1,000,000.00      

6. Distributions. As of the Reporting Date, the Borrower LOGO
[g739428exc_pg10a.jpg] not in compliance with Section 6.7 of the Credit
Agreement concerning dividends distributions, purchases, retirements and
redemptions.

7. Salaries. As of the Reporting Date, the Borrower LOGO [g739428exc_pg10b.jpg]
not in compliance with Section 6.8 of the Credit Agreement concerning salaries
and other compensation.

8. Transactions With Affiliates. As of the Reporting Date, the Borrower LOGO
[g739428exc_pg10c.jpg] not in compliance with Section 6.27 of the Credit
Agreement concerning transactions with Affiliates.

Attached hereto are all relevant facts in reasonable detail to evidence, and the
computations of the financial covenants referred to above. These computations
were made in accordance with GAAP.

 

 

Chief Financial Officer of Schuff International, Inc.

and authorized agent of the other Persons comprising the Borrower

 

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EXHIBIT 1

Recording Requested By,

And After Recording, Return To:

Thomas E. Halter

Gust Rosenfeld P.L.C.

One East Washington, Suite 1600

Phoenix, AZ 85004-2553

(Property formerly owned by 19th Ave. & Buchanan)

 

DEED OF TRUST

AND ASSIGNMENT OF RENTS AND LEASES

THIS DEED OF TRUST AND ASSIGNMENT (this “Deed of Trust”) is executed as of
                                        , by SCHUFF STEEL COMPANY, a Delaware
corporation (“Trustor”), to WELLS FARGO FINANCIAL NATIONAL BANK (“Trustee”), for
the benefit of WELLS FARGO CREDIT, INC., a Minnesota corporation
(“Beneficiary”). The mailing addresses of Trustor, Trustee and Beneficiary are
the addresses for those parties set forth or referred to in the Section hereof
entitled Notices.

ARTICLE I. GRANT IN TRUST

1.1 Grant. For the purposes and upon the terms and conditions in this Deed of
Trust, Trustor irrevocably grants, conveys and assigns to Trustee, in trust for
the benefit of Beneficiary, with power of sale and right of entry and
possession, Trustor’s interest in: (a) all real property located in Maricopa
County, Arizona, and described on Exhibit A attached hereto; (b) all easements,
rights-of-way and rights used in connection with or as a means of access to any
portion of said real property; (c) all tenements, hereditaments and
appurtenances thereof and thereto; (d) all right, title and interest of Trustor,
now owned or hereafter acquired, in and to any land lying within the
right-of-way of any street, open or proposed, adjoining said real property, and
any and all sidewalks, alleys and strips and gores of land adjacent to or used
in connection with said real property; (e) all buildings, improvements and
landscaping now or hereafter erected or located on said real property; (f) all
development rights, governmental or quasi-governmental licenses, permits or
approvals, zoning rights and other similar rights or interests which relate to
the development, use or operation of, or that benefit or are appurtenant to,
said real property; (g) all mineral rights, oil and gas rights, air rights,
water or water rights, including without limitation, all wells, canals, ditches
and reservoirs of any nature and all rights thereto, appurtenant to or
associated with said real property, whether decreed or undecreed, tributary or
non-tributary, surface or underground, appropriated or unappropriated, and all
shares of stock in any water, canal, ditch or reservoir company, and all well
permits, water service contracts, drainage rights and other evidences of any
such rights; and (h) all interest or estate which Trustor now has or may
hereafter acquire in said real property and all additions and accretions
thereto, and all awards or payments made for the taking of all or any portion of
said real property by eminent domain or any proceeding or purchase in lieu
thereof, or any damage to any portion of said real property (collectively, the
“Subject Property”). The listing of specific rights or property shall not be
interpreted as a limitation of general terms.

 

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1.2 Address. The address of the Subject Property is: 420 S. 19th Avenue.,
Phoenix, Arizona. Neither the failure to designate an address nor any inaccuracy
in the address designated shall affect the validity or priority of the lien of
this Deed of Trust on the Subject Property as described on Exhibit A. In the
event of any conflict between the provisions of Exhibit A and said address,
Exhibit A shall control.

ARTICLE II. OBLIGATIONS SECURED

2.1 Obligations Secured. Trustor makes this grant and assignment for the purpose
of securing the following obligations (each, a “Secured Obligation” and
collectively, the “Secured Obligations”):

(a) Payment of the sum of Sixty Million Dollars ($60,000,000.00) according to
the terms of (i) that Third Replacement Revolving Promissory Note in the
original principal amount of $50,000,000.00, and (ii) that Term Note in the
original principal amount of $10,000,000.00, each made by the other persons or
entities listed on Schedule “B” attached hereto and by this reference made a
part hereof (hereinafter such persons individually and collectively called
“Borrower”), payable to the order of Beneficiary, evidencing lines of credit,
all or parts of which may be advanced to Borrower, repaid by Borrower and
readvanced to Borrower, from time to time, subject to the terms and conditions
thereof and/or of that Amended and Restated Credit and Security Agreement dated
December 18, 2008, as amended from time to time and as amended and restated from
time to time, by and between Borrower and Beneficiary (hereinafter called the
“Loan Agreement”), with interest thereon, extension and other fees, late
charges, prepayment premiums and attorneys’ fees, according to the terms
thereof, and all extensions, modifications, renewals or replacements thereof
(hereinafter collectively, the “Note”). The instruments detailed above bear
interest at a variable rate in accordance with the terms and provisions thereof
which are by this reference incorporated herein; and

(b) payment and performance of all obligations of Trustor under this Deed of
Trust, together with all advances, payments or other expenditures made by
Beneficiary or Trustee as or for the payment or performance of any such
obligations of Trustor; and

(c) payment and performance of all obligations, if any, and the contracts under
which they arise, which any rider attached to and recorded with this Deed of
Trust recites are secured hereby; and

(d) payment to Beneficiary of all liability, whether liquidated or unliquidated,
defined, contingent, conditional or of any other nature whatsoever, and
performance of all other obligations, arising under any swap, derivative,
foreign exchange or hedge transaction or arrangement (or other similar
transaction or arrangement howsoever described or defined) at any time entered
into with Beneficiary in connection with any Secured Obligation; and

(e) payment and performance of all future advances and other obligations that
the then record owner of the Subject Property may agree to pay and/or perform
(whether as principal, surety or guarantor) for the benefit of Beneficiary, when
any such advance or other obligation is evidenced by a writing which recites
that it is secured by this Deed of Trust; and

(f) all modifications, extensions and renewals of any of the Secured Obligations
(including without limitation, (i) modifications, extensions or renewals at a
different rate of interest, or (ii) deferrals or accelerations of the required
principal payment dates or

 

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interest payment dates or both, in whole or in part), however evidenced, whether
or not any such modification, extension or renewal is evidenced by a new or
additional promissory note or notes.

2.2 Obligations. The term “obligations” is used herein in its most comprehensive
sense and includes any and all advances, debts, obligations and liabilities
heretofore, now or hereafter made, incurred or created, whether voluntary or
involuntary and however arising, whether due or not due, absolute or contingent,
liquidated or unliquidated, determined or undetermined, joint or several,
including without limitation, all principal, interest, charges, including
prepayment charges and late charges, and loan fees at any time accruing or
assessed on any Secured Obligation.

2.3 Incorporation. All terms of the Secured Obligations are incorporated herein
by this reference. All persons who may have or acquire an interest in the
Subject Property are hereby deemed to have notice of the terms of the Secured
Obligations and to have notice, if provided therein, that: (a) the Note or any
other Secured Obligation may permit borrowing, repayment and reborrowing; and
(b) the rate of interest on one or more of the Secured Obligations may vary from
time to time.

ARTICLE III. ASSIGNMENT OF RENTS

3.1 Assignment. For the purposes and upon the terms and conditions set forth
herein, Trustor irrevocably assigns to Beneficiary all of Trustor’s right, title
and interest in, to and under all leases, licenses, rental agreements and other
agreements of any kind relating to the use or occupancy of any of the Subject
Property, whether existing as of the date hereof or at any time hereafter
entered into, together with all guarantees of and security for any tenant’s or
lessee’s performance thereunder, and all amendments, extensions, renewals and
modifications thereto (each, a “Lease” and collectively, the “Leases”), together
with any and all other rents, issues and profits of the Subject Property
(collectively, “Rents”). This assignment shall not impose upon Beneficiary any
duty to produce Rents from the Subject Property, nor cause Beneficiary to be:
(a) a “mortgagee in possession” for any purpose; (b) responsible for performing
any of the obligations of the lessor or landlord under any Lease; or
(c) responsible for any waste committed by any person or entity at any time in
possession of the Subject Property or any part thereof, or for any dangerous or
defective condition of the Subject Property, or for any negligence in the
management, upkeep, repair or control of the Subject Property. This is an
absolute assignment, not an assignment for security only, and Beneficiary’s
right to Rents is not contingent upon and may be exercised without taking
possession of the Subject Property. Trustor agrees to execute and deliver to
Beneficiary, within five (5) days of Beneficiary’s written request, such
additional documents as Beneficiary or Trustee may reasonably request to further
evidence the assignment to Beneficiary of any and all Leases and Rents.
Beneficiary or Trustee, at Beneficiary’s option and without notice, may notify
any lessee or tenant of this assignment of the Leases and Rents.

3.2 Protection of Security. To protect the security of this assignment, Trustor
agrees:

(a) At Trustor’s sole cost and expense: (i) to perform each obligation to be
performed by the lessor or landlord under each Lease and to enforce or secure
the performance of each obligation to be performed by the lessee or tenant under
each Lease; (ii) not to modify any Lease in any material respect, nor accept
surrender under or terminate the term of any Lease; (iii) not to anticipate the
Rents under any Lease; and (iv) not to waive or release any lessee or tenant of
or from any Lease obligations. Trustor assigns to Beneficiary all of Trustor’s

 

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right and power to modify the terms of any Lease, to accept a surrender under or
terminate the term of or anticipate the Rents under any Lease, and to waive or
release any lessee or tenant of or from any Lease obligations, and any attempt
on the part of Trustor to exercise any such rights or powers without
Beneficiary’s prior written consent shall be a breach of the terms hereof.

(b) At Trustor’s sole cost and expense, to defend any action in any manner
connected with any Lease or the obligations thereunder, and to pay all costs of
Beneficiary or Trustee, including reasonable attorneys’ fees, in any such action
in which Beneficiary or Trustee may appear.

(c) That, should Trustor fail to do any act required to be done by Trustor under
a Lease, then Beneficiary or Trustee, but without obligation to do so and
without notice to Trustor and without releasing Trustor from any obligation
hereunder, may make or do the same in such manner and to such extent as
Beneficiary or Trustee deems necessary to protect the security hereof, and, in
exercising such powers, Beneficiary or Trustee may employ attorneys and other
agents, and Trustor shall pay necessary costs and reasonable attorneys’ fees
incurred by Beneficiary or Trustee, or their agents, in the exercise of the
powers granted herein. Trustor shall give prompt notice to Beneficiary of any
default by any lessee or tenant under any Lease, and of any notice of default on
the part of Trustor under any Lease received from a lessee or tenant thereunder,
together with an accurate and complete copy thereof.

(d) To pay to Beneficiary immediately upon demand all sums expended under the
authority hereof, including reasonable attorneys’ fees, together with interest
thereon at the highest rate per annum payable under any Secured Obligation, and
the same, at Beneficiary’s option, may be added to any Secured Obligation and
shall be secured hereby.

3.3 License. Beneficiary confers upon Trustor a license (“License”) to collect
and retain the Rents as, but not before, they come due and payable, until the
occurrence of any Default. Upon the occurrence of any Default, the License shall
be automatically revoked, and Beneficiary or Trustee may, at Beneficiary’s
option and without notice, either in person or by agent, with or without
bringing any action, or by a receiver to be appointed by a court: (a) enter,
take possession of, manage and operate the Subject Property or any part thereof;
(b) make, cancel, enforce or modify any Lease; (c) obtain and evict tenants, fix
or modify Rents, and do any acts which Beneficiary or Trustee deems proper to
protect the security hereof; and (d) either with or without taking possession of
the Subject Property, in its own name, sue for or otherwise collect and receive
all Rents, including those past due and unpaid, and apply the same in accordance
with the provisions of this Deed of Trust. The entering and taking possession of
the Subject Property, the collection of Rents and the application thereof as
aforesaid, shall not cure or waive any Default, nor waive, modify or affect any
notice of default hereunder, nor invalidate any act done pursuant to any such
notice. The License shall not grant to Beneficiary or Trustee the right to
possession, except as provided in this Deed of Trust.

ARTICLE IV. RIGHTS AND DUTIES OF THE PARTIES

4.1 Title. Trustor warrants that, except as disclosed to Beneficiary prior to
the date hereof in a writing which refers to this warranty, Trustor lawfully
possesses and holds fee simple title to, or if permitted by Beneficiary in
writing a leasehold interest in, the Subject Property without limitation on the
right to encumber, as herein provided, and that this Deed of Trust is a valid
lien on the Subject Property and all of Trustor’s interest therein.

 

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4.2 Taxes and Assessments. Subject to the right, if any, of Trustor to contest
payment of the following pursuant to any other agreement between Trustor and
Beneficiary, Trustor shall pay prior to delinquency all taxes, assessments,
levies and charges imposed: (a) by any public or quasi-public authority or
utility company which are or which may become a lien upon or cause a loss in
value of the Subject Property or any interest therein; or (b) by any public
authority upon Beneficiary by reason of its interest in any Secured Obligation
or in the Subject Property, or by reason of any payment made to Beneficiary
pursuant to any Secured Obligation; provided however, that Trustor shall have no
obligation to pay any income taxes of Beneficiary. Promptly upon request by
Beneficiary, Trustor shall furnish to Beneficiary satisfactory evidence of the
payment of all of the foregoing. Beneficiary is hereby authorized to request and
receive from the responsible governmental and non-governmental personnel written
statements with respect to the accrual and payment of any of the foregoing.

4.3 Performance of Secured Obligations. Trustor shall promptly pay and perform
each Secured Obligation when due.

4.4 Liens, Encumbrances and Charges. Trustor shall immediately discharge any
lien on the Subject Property not approved by Beneficiary in writing. Except as
otherwise provided in any Secured Obligation or other agreement with
Beneficiary, Trustor shall pay when due all obligations secured by or reducible
to liens and encumbrances which shall now or hereafter encumber the Subject
Property, whether senior or subordinate hereto, including without limitation,
any mechanics’ liens.

4.5 Insurance. Trustor shall insure the Subject Property against loss or damage
by fire and such other risks as Beneficiary shall from time to time require.
Trustor shall carry public liability insurance, flood insurance as required by
applicable law and such other insurance as Beneficiary may reasonably require,
including without limitation, business interruption insurance or loss of rental
value insurance. Trustor shall maintain all required insurance at Trustor’s
expense, under policies issued by companies and in form and substance
satisfactory to Beneficiary. Neither Beneficiary nor Trustee, by reason of
accepting, rejecting, approving or obtaining insurance, shall incur any
liability for: (a) the existence, nonexistence, form or legal sufficiency
thereof; (b) the solvency of any insurer; or (c) the payment of losses. All
policies and certificates of insurance shall name Beneficiary as loss payee, and
shall provide that the insurance cannot be terminated as to Beneficiary except
upon a minimum of ten (10) days’ prior written notice to Beneficiary.
Immediately upon any request by Beneficiary, Trustor shall deliver to
Beneficiary the original of all such policies or certificates, with receipts
evidencing annual prepayment of the premiums.

4.6 Tax and Insurance Impounds. Upon the occurrence of an Event of Default, and
at Beneficiary’s option and upon its demand, Trustor shall, until all Secured
Obligations have been paid in full, pay to Beneficiary monthly, annually or as
otherwise directed by Beneficiary an amount estimated by Beneficiary to be equal
to: (a) all taxes, assessments, levies and charges imposed by any public or
quasi-public authority or utility company which are or may become a lien upon
the Subject Property and will become due for the tax year during which such
payment is so directed; and (b) premiums for fire, other hazard and mortgage
insurance next due. If Beneficiary determines that amounts paid by Trustor are
insufficient for the payment in full of such taxes, assessments, levies and/or
insurance premiums, Beneficiary shall notify Trustor of the increased amount
required for the payment thereof when due, and Trustor shall pay to Beneficiary
such additional amount within thirty (30) days after notice from Beneficiary.
All amounts so paid shall not bear interest, except to the extent and in the
amount required by law. So long as there is no Default, Beneficiary shall apply
said amounts to the payment of, or at Beneficiary’s sole option release said
funds to Trustor for application to and payment of, such

 

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taxes, assessments, levies, charges and insurance premiums. If a Default exists,
Beneficiary at its sole option may apply all or any part of said amounts to any
Secured Obligation and/or to cure such Default, in which event Trustor shall be
required to restore all amounts so applied, as well as to cure any Default not
cured by such application. Trustor hereby grants and transfers to Beneficiary a
security interest in all amounts so paid and held in Beneficiary’s possession,
and all proceeds thereof, to secure the payment and performance of each Secured
Obligation. Upon assignment of this Deed of Trust, Beneficiary shall have the
right to assign all amounts collected and in its possession to its assignee,
whereupon Beneficiary and Trustee shall be released from all liability with
respect thereto. The existence of said impounds shall not limit Beneficiary’s
rights under any other provision of this Deed of Trust or any other agreement,
statute or rule of law. Within ninety-five (95) days following full repayment of
all Secured Obligations (other than as a consequence of a foreclosure or
conveyance in lieu of foreclosure of the liens and security interests securing
any Secured Obligation), or at such earlier time as Beneficiary in its
discretion may elect, the balance of all amounts collected and in Beneficiary’s
possession shall be paid to Trustor, and no other party shall have any right of
claim thereto.

4.7 Damages; Insurance and Condemnation Proceeds.

(a) (i) All awards of damages and all other compensation payable directly or
indirectly by reason of a condemnation or proposed condemnation (or transfer in
lieu thereof) for public or private use affecting the Subject Property; (ii) all
other claims and awards for damages to or decrease in value of the Subject
Property; (iii) all proceeds of any insurance policies payable by reason of loss
sustained to the Subject Property; and (iv) all interest which may accrue on any
of the foregoing, are all absolutely and irrevocably assigned to and shall be
paid to Beneficiary. At the absolute discretion of Beneficiary, whether or not
its security is or may be impaired, but subject to applicable law if any, and
without regard to any requirement contained in any other Section hereof,
Beneficiary may apply all or any of the proceeds it receives to its expenses in
settling, prosecuting or defending any such claim and apply the balance to the
Secured Obligations in any order, and release all or any part of the proceeds to
Trustor upon any conditions Beneficiary may impose. Beneficiary may commence,
appear in, defend or prosecute any assigned claim or action, and may adjust,
compromise, settle and collect all claims and awards assigned to Beneficiary;
provided however, that in no event shall Beneficiary be responsible for any
failure to collect any claim or award, regardless of the cause of the failure.

(b) At its sole option, Beneficiary may permit insurance or condemnation
proceeds held by Beneficiary to be used for repair or restoration but may impose
any conditions on such use as Beneficiary deems necessary.

4.8 Maintenance and Preservation of Subject Property. Subject to the provisions
of any Secured Obligation, Trustor covenants:

(a) to keep the Subject Property in good condition and repair;

(b) except with Beneficiary’s prior written consent, not to remove or demolish
the Subject Property, nor alter, restore or add to the Subject Property, nor
initiate or acquiesce in any change in any zoning or other land classification
which affects the Subject Property;

(c) to restore promptly and in good workmanlike manner any portion of the
Subject Property which may be damaged or destroyed, unless Beneficiary requires
that all of the insurance proceeds be used to reduce the Secured Obligations as
provided in the Section hereof entitled Damages; Insurance and Condemnation
Proceeds;

 

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(d) to comply with and not to suffer violation of any or all of the following
which govern acts or conditions on, or otherwise affect the Subject Property:
(i) laws, ordinances, regulations, standards and judicial and administrative
rules and orders; (ii) covenants, conditions, restrictions and equitable
servitudes, whether public or private; and (iii) requirements of insurance
companies and any bureau or agency which establishes standards of insurability;

(e) not to commit or permit waste of the Subject Property; and

(f) to do all other acts which from the character or use of the Subject Property
may be reasonably necessary to maintain and preserve its value.

4.9 Hazardous Substances: Environmental Provisions. Trustor represents and
warrants to Beneficiary as follows:

(a) Except as disclosed to Beneficiary in writing prior to the date hereof, the
Subject Property is not and has not been a site for the use, generation,
manufacture, storage, treatment, disposal, release or threatened release,
transportation or presence of any substances which are “hazardous substances,”
“hazardous wastes,” “hazardous materials” or “toxic substances” under the
Hazardous Materials Laws, as defined below, and/or other applicable
environmental laws, ordinances and regulations (collectively, the “Hazardous
Materials”).

(b) The Subject Property is in compliance with all laws, ordinances and
regulations relating to Hazardous Materials (collectively, the “Hazardous
Materials Laws”), including without limitation, the Clean Air Act, the Federal
Water Pollution Control Act, the Federal Resource Conservation and Recovery Act
of 1976, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, the
Federal Toxic Substances Control Act and the Occupational Safety and Health Act,
as any of the same may be amended, modified or supplemented from time to time,
and any other applicable federal, state or local environmental laws, and any
rules or regulations adopted pursuant to any of the foregoing.

(c) There are no claims or actions pending or threatened against Trustor or the
Subject Property by any governmental entity or agency, or any other person or
entity, relating to any Hazardous Materials or pursuant to any Hazardous
Materials Laws.

(d) Trustor hereby agrees to defend, indemnify and hold harmless Beneficiary,
its directors, officers, employees, agents, successors and assigns, from and
against any and all losses, damages, liabilities, claims, actions, judgments,
court costs and legal or other expenses (including without limitation,
attorneys’ fees and expenses) which Beneficiary may incur as a direct or
indirect consequence of the use, generation, manufacture, storage, treatment,
disposal, release or threatened release, transportation or presence of Hazardous
Materials in, on, under or about the Subject Property. Trustor shall pay to
Beneficiary immediately upon demand any amounts owing under this indemnity,
together with interest from the date of demand until paid in full at the highest
rate of interest applicable to any Secured Obligation. TRUSTOR’S DUTY AND
OBLIGATION TO DEFEND, INDEMNIFY AND HOLD HARMLESS BENEFICIARY SHALL SURVIVE THE
CANCELLATION OF THE SECURED OBLIGATIONS AND THE RELEASE, RECONVEYANCE OR PARTIAL
RECONVEYANCE OF THIS DEED OF TRUST.

 

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(e) Trustor shall immediately advise Beneficiary in writing upon Trustor’s
discovery of any occurrence or condition on the Subject Property or on any real
property adjoining or in the vicinity of the Subject Property that does or could
cause all or any part of the Subject Property to be contaminated with any
Hazardous Materials or otherwise be in violation of any Hazardous Materials
Laws, or cause the Subject Property to be subject to any restrictions on the
ownership, occupancy, transferability or use thereof under any Hazardous
Materials Laws.

4.10 Protection of Security. Trustor shall, at Trustor’s sole expense:
(a) protect, preserve and defend the Subject Property and Trustor’s title and
right to possession of the Subject Property against all adverse claims; (b) if
Trustor’s interest in the Subject Property is a leasehold interest or estate,
pay and perform in a timely manner all obligations to be paid and/or performed
by the lessee or tenant under the lease or other agreement creating such
leasehold interest or estate; and (c) protect, preserve and defend the security
of this Deed of Trust and the rights and powers of Beneficiary and Trustee under
this Deed of Trust against all adverse claims. Trustor shall give Beneficiary
and Trustee prompt notice in writing of the assertion of any claim, the filing
of any action or proceeding, or the occurrence of any damage, condemnation offer
or other action relating to or affecting the Subject Property and, if Trustor’s
interest in the Subject Property is a leasehold interest or estate, of any
notice of default or demand for performance under the lease or other agreement
pursuant to which such leasehold interest or estate was created or exists.

4.11 Acceptance of Trust; Powers and Duties of Trustee. Trustee accepts this
trust when this Deed of Trust is executed. From time to time, upon written
request of Beneficiary and, to the extent required by applicable law,
presentation of this Deed of Trust for endorsement, and without affecting the
personal liability of any person for payment of any indebtedness or performance
of any of the Secured Obligations, Beneficiary, or Trustee at Beneficiary’s
direction, may, without obligation to do so or liability therefor and without
notice: (a) reconvey all or any part of the Subject Property from the lien of
this Deed of Trust; (b) consent to the making of any map or plat of the Subject
Property; and (c) join in any grant of easement or declaration of covenants and
restrictions with respect to the Subject Property, or any extension agreement or
any agreement subordinating the lien or charge of this Deed of Trust. Trustee or
Beneficiary may from time to time apply to any court of competent jurisdiction
for aid and direction in the execution of the trusts and the enforcement of its
rights and remedies available under this Deed of Trust, and may obtain orders or
decrees directing, confirming or approving acts in the execution of said trusts
and the enforcement of said rights and remedies. Trustee has no obligation to
notify any party of any pending sale or any action or proceeding (including, but
not limited to, actions in which Trustor, Beneficiary or Trustee shall be a
party) unless held or commenced and maintained by Trustee under this Deed of
Trust. Trustee shall not be obligated to perform any act required of it under
this Deed of Trust unless the performance of the act is requested in writing and
Trustee is reasonably indemnified against all losses, costs, liabilities and
expenses in connection therewith.

4.12 Compensation; Exculpation; Indemnification.

(a) Trustor shall pay all Trustee’s fees and reimburse Trustee for all expenses
in the administration of this trust, including reasonable attorneys’ fees.
Trustor shall pay Beneficiary reasonable compensation for services rendered
concerning this Deed of Trust, including without limitation, the providing of
any statement of amounts owing under any Secured Obligation. Beneficiary shall
not directly or indirectly be liable to Trustor or any other person as a
consequence of: (i) the exercise of any rights, remedies or powers granted to
Beneficiary in this Deed of Trust; (ii) the failure or refusal of Beneficiary to
perform or discharge any obligation

 

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or liability of Trustor under this Deed of Trust or any Lease or other agreement
related to the Subject Property; or (iii) any loss sustained by Trustor or any
third party as a result of Beneficiary’s failure to lease the Subject Property
after any Default or from any other act or omission of Beneficiary in managing
the Subject Property after any Default unless such loss is caused by the willful
misconduct or gross negligence of Beneficiary; and no such liability shall be
asserted or enforced against Beneficiary, and all such liability is hereby
expressly waived and released by Trustor.

(b) Trustor shall indemnify Trustee and Beneficiary against, and hold them
harmless from, any and all losses, damages, liabilities, claims, causes of
action, judgments, court costs, attorneys’ fees and other legal expenses, costs
of evidence of title, costs of evidence of value, and other expenses which
either may suffer or incur: (i) by reason of this Deed of Trust; (ii) by reason
of the execution of this trust or the performance of any act required or
permitted hereunder or by law; (iii) as a result of any failure of Trustor to
perform Trustor’s obligations; or (iv) by reason of any alleged obligation or
undertaking of Beneficiary to perform or discharge any of the representations,
warranties, conditions, covenants or other obligations contained in any other
document related to the Subject Property, including without limitation, the
payment of any taxes, assessments, rents or other lease obligations, liens,
encumbrances or other obligations of Trustor under this Deed of Trust. Trustor’s
duty to indemnify Trustee and Beneficiary shall survive the payment, discharge
or cancellation of the Secured Obligations and the release or reconveyance, in
whole or in part, of this Deed of Trust.

(c) Trustor shall pay all indebtedness arising under this Section immediately
upon demand by Trustee or Beneficiary, together with interest thereon from the
date such indebtedness arises at the highest rate per annum payable under any
Secured Obligation. Beneficiary may, at its option, add any such indebtedness to
any Secured Obligation.

4.13 Substitution of Trustees. From time to time, by a writing signed and
acknowledged by Beneficiary and recorded in each Office in which this Deed of
Trust is recorded, Beneficiary may appoint another trustee to act in the place
and stead of Trustee or any successor. Such writing shall set forth any
information required by law, and Beneficiary shall give such additional notice
as may be required by law. Such instrument of substitution and the compliance
with any other requirements of applicable law shall discharge Trustee herein
named and shall appoint the new trustee as the trustee hereunder with the same
effect as if originally named Trustee herein.

4.14 Due on Sale or Encumbrance. Except as permitted by the provisions of any
Secured Obligation or applicable law, if the Subject Property or any interest
therein shall be sold, transferred (including without limitation, where
applicable, through sale or transfer of a majority or controlling interest of
the corporate stock, or any general partnership, limited liability company or
other similar interests, of Trustor), mortgaged, assigned, encumbered or leased,
whether voluntarily, involuntarily or by operation of law (each of which actions
and events is called a “Transfer”), without Beneficiary’s prior written consent,
THEN Beneficiary may, at its sole option, declare all Secured Obligations
immediately due and payable in full. Trustor shall notify Beneficiary in writing
of each Transfer within ten (10) business days of the date thereof.

4.15 Releases, Extensions, Modifications and Additional Security. Without notice
to or the consent, approval or agreement of any persons or entities having any
interest at any time in the Subject Property or in any manner obligated under
any Secured Obligation (each, an “Interested Party”), Beneficiary may, from time
to time, release any Interested Party from liability for the payment of any
Secured Obligation, take any action or make any agreement extending the maturity
or otherwise altering the terms or increasing the amount of any Secured
Obligation,

 

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accept additional security, and enforce, waive, subordinate or release all or a
portion of the Subject Property or any other security for any Secured
Obligation. None of the foregoing actions shall release or reduce the personal
liability of any Interested Party, nor release or impair the priority of the
lien of this Deed of Trust upon the Subject Property.

4.16 Reconveyance. Upon Beneficiary’s written request, and solely to the extent
required by applicable law upon surrender of this Deed of Trust and every note
or other instrument setting forth any Secured Obligations to Trustee for
cancellation, Trustee shall reconvey, without warranty, the Subject Property, or
that portion thereof then covered hereby, from the lien of this Deed of Trust.
The recitals of any matters or facts in any reconveyance executed hereunder
shall be conclusive proof of the truthfulness thereof. To the extent permitted
by law, the reconveyance may describe the grantee as “the person or persons
legally entitled thereto.” Neither Beneficiary nor Trustee shall have any duty
to determine the rights of persons claiming to be rightful grantees of any
reconveyance. When the Subject Property has been fully reconveyed, the last such
reconveyance shall operate as a reassignment of all future Rents to the person
or persons legally entitled thereto. Upon Beneficiary’s demand, Trustor shall
pay all costs and expenses incurred by Beneficiary in connection with any
reconveyance.

4.17 Subrogation. Beneficiary shall be subrogated to the lien of all
encumbrances, whether or not released of record, paid in whole or in part by
Beneficiary pursuant to this Deed of Trust or by the proceeds of any Secured
Obligation.

4.18 Trustor Different From Obligor (“Third Party Trustor”). As used in this
Section, the term “Obligor” shall mean each person or entity obligated in any
manner under any of the Secured Obligations; and the term “Third Party Trustor”
shall mean (1) each person or entity included in the definition of Trustor
herein and which is not an Obligor under all of the Secured Obligations, and
(2) each person or entity included in the definition of Trustor herein if any
Obligor is not included in said definition.

(a) Representations and Warranties. Each Third Party Trustor represents and
warrants to Beneficiary that: (i) this Deed of Trust is executed at an Obligor’s
request; (ii) this Deed of Trust complies with all agreements between each Third
Party Trustor and any Obligor regarding such Third Party Trustor’s execution
hereof; (iii) Beneficiary has made no representation to any Third Party Trustor
as to the creditworthiness of any Obligor; and (iv) each Third Party Trustor has
established adequate means of obtaining from each Obligor on a continuing basis
financial and other information pertaining to such Obligor’s financial
condition. Each Third Party Trustor agrees to keep adequately informed from such
means of any facts, events or circumstances which might in any way affect such
Third Party Trustor’s risks hereunder. Each Third Party Trustor further agrees
that Beneficiary shall have no obligation to disclose to any Third Party Trustor
any information or material about any Obligor which is acquired by Beneficiary
in any manner. The liability of each Third Party Trustor hereunder shall be
reinstated and revived, and the rights of Beneficiary shall continue if and to
the extent that for any reason any amount at any time paid on account of any
Secured Obligation is rescinded or must otherwise be restored by Beneficiary,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise, all as though such amount had not been paid. The determination as to
whether any amount so paid must be rescinded or restored shall be made by
Beneficiary in its sole discretion; provided however, that if Beneficiary
chooses to contest any such matter at the request of any Third Party Trustor,
each Third Party Trustor agrees to indemnify and hold Beneficiary harmless from
and against all costs and expenses, including reasonable attorneys’ fees,
expended or incurred by Beneficiary in connection therewith, including without
limitation, in any litigation with respect thereto.

 

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(b) Waivers.

(i) Each Third Party Trustor waives any right to require Beneficiary to:
(A) proceed against any Obligor or any other person; (B) marshal assets or
proceed against or exhaust any security held from any Obligor or any other
person; (C) give notice of the terms, time and place of any public or private
sale or other disposition of personal property security held from any Obligor or
any other person; (D) take any other action or pursue any other remedy in
Beneficiary’s power; or (E) make any presentment or demand for performance, or
give any notice of nonperformance, protest, notice of protest or notice of
dishonor hereunder or in connection with any obligations or evidences of
indebtedness held by Beneficiary as security for or which constitute in whole or
in part the Secured Obligations, or in connection with the creation of new or
additional obligations.

(ii) Each Third Party Trustor waives any defense to its obligations hereunder
based upon or arising by reason of: (A) any disability or other defense of any
Obligor or any other person; (B) the cessation or limitation from any cause
whatsoever, other than payment in full, of any Secured Obligation; (C) any lack
of authority of any officer, director, partner, agent or any other person acting
or purporting to act on behalf of any Obligor which is a corporation,
partnership or other type of entity, or any defect in the formation of any such
Obligor; (D) the application by any Obligor of the proceeds of any Secured
Obligation for purposes other than the purposes represented by any Obligor to,
or intended or understood by, Beneficiary or any Third Party Trustor; (E) any
act or omission by Beneficiary which directly or indirectly results in or aids
the discharge of any Obligor or any portion of any Secured Obligation by
operation of law or otherwise, or which in any way impairs or suspends any
rights or remedies of Beneficiary against any Obligor; (F) any impairment of the
value of any interest in any security for the Secured Obligations or any portion
thereof, including without limitation, the failure to obtain or maintain
perfection or recordation of any interest in any such security, the release of
any such security without substitution, and/or the failure to preserve the value
of, or to comply with applicable law in disposing of, any such security; (G) any
modification of any Secured Obligation, in any form whatsoever, including
without limitation the renewal, extension, acceleration or other change in time
for payment of, or other change in the terms of, any Secured Obligation or any
portion thereof, including increase or decrease of the rate of interest thereon;
or (H) any requirement that Beneficiary give any notice of acceptance of this
Deed of Trust. Until all Secured Obligations shall have been paid in full, no
Third Party Trustor shall have any right of subrogation, and each Third Party
Trustor waives any right to enforce any remedy which Beneficiary now has or may
hereafter have against any Obligor or any other person, and waives any benefit
of, or any right to participate in, any security now or hereafter held by
Beneficiary. Each Third Party Trustor further waives all rights and defenses it
may have arising out of: (1) any election of remedies by Beneficiary, even
though that election of remedies, such as a non-judicial foreclosure with
respect to any security for any portion of the Secured Obligations, destroys
such Third Party Trustor’s rights of subrogation or such Third Party Trustor’s
rights to proceed against any Obligor for reimbursement; or (2) any loss of
rights any Third Party Trustor may suffer by reason of any rights, powers or
remedies of any Obligor in connection with any anti-deficiency laws or any other
laws limiting, qualifying or discharging any Obligor’s obligations, whether by
operation of law or otherwise, including any rights any Third Party Trustor may
have to a fair market value hearing to determine the size of a deficiency
following any trustee’s foreclosure sale or other disposition of any security
for any portion of the Secured Obligations, and each Third Party Trustor waives
the benefits of A.R.S. §§12-1566, 12-1641 et seq., 33-814, 44-142 and Rule 17(F)
of the Arizona Rules of Civil Procedure.

(iii) If any of said waivers is determined to be contrary to any applicable law
or public policy, such waiver shall be effective to the extent permitted by
applicable law or public policy.

 

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4.19 Community Facilities District. Without Beneficiary’s prior written consent,
Trustor shall not consent to or vote in favor of the inclusion of all or any
part of the Subject Property in any Community Facilities District formed
pursuant to the Community Facilities District Act, A.R.S. §48-701, et seq., as
amended from time to time. Trustor shall immediately give notice to Beneficiary
of any notification or advice that Trustor may receive from any municipality or
other third party of any intent or proposal to include all or any part of the
Subject Property in a Community Facilities District. Beneficiary shall have the
right to file a written objection to the inclusion of all or any part of the
Subject Property in a Community Facilities District, either in its own name or
in the name of Trustor, and to appear at and participate in any hearing with
regard to the formation of any such Community Facilities District.

ARTICLE V. DEFAULT PROVISIONS

5.1 Default. The occurrence of any of the following shall constitute a “Default”
under this Deed of Trust: (a) Trustor shall fail to observe or perform any
obligation or agreement contained herein; (b) any representation or warranty of
Trustor herein shall prove to be incorrect, false or misleading in any material
respect when made; or (c) the maker of the Note has terminated the credit
facility referenced in the Loan Agreement as the same may be amended or replaced
from time to time; or (d) any default in the payment or performance of any
obligation, or any defined event of default, under any provisions of the Note or
any other contract, instrument or document executed in connection with, or with
respect to, any Secured Obligation.

5.2 Rights and Remedies. Upon the occurrence of any Default, and at any time
thereafter, Beneficiary and Trustee shall have all the following rights and
remedies:

(a) With or without notice, to declare all Secured Obligations immediately due
and payable in full.

(b) With or without notice, without releasing Trustor from any Secured
Obligation and without becoming a mortgagee in possession, to cure any Default
of Trustor and, in connection therewith: (i) to enter upon the Subject Property
and to do such acts and things as Beneficiary or Trustee deems necessary or
desirable to protect the security of this Deed of Trust, including without
limitation, to appear in and defend any action or proceeding purporting to
affect the security of this Deed of Trust or the rights or powers of Beneficiary
or Trustee hereunder; (ii) to pay, purchase, contest or compromise any
encumbrance, charge, lien or claim of lien which, in the judgment of either
Beneficiary or Trustee, is senior in priority to this Deed of Trust, the
judgment of Beneficiary or Trustee being conclusive as between the parties
hereto; (iii) to obtain, and to pay any premiums or charges with respect to, any
insurance required to be carried hereunder; and (iv) to employ counsel,
accountants, contractors and other appropriate persons to assist them.

(c) To commence and maintain an action or actions in any court of competent
jurisdiction to foreclose this Deed of Trust as a mortgage or to obtain specific
enforcement of the covenants of Trustor under this Deed of Trust, and Trustor
agrees that such covenants shall be specifically enforceable by injunction or
any other appropriate equitable remedy. For the purposes of any suit brought
under this subsection, Trustor waives the defenses of laches and any applicable
statute of limitations

 

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(d) To apply to a court of competent jurisdiction for and obtain appointment of
a receiver of the Subject Property as a matter of strict right and without
regard to: (i) the adequacy of the security for the repayment of the Secured
Obligations; (ii) the existence of a declaration that the Secured Obligations
are immediately due and payable; or (iii) the filing of a notice of default; and
Trustor consents to such appointment.

(e) To take and possess all documents, books, records, papers and accounts of
Trustor or the then owner of the Subject Property; to make or modify Leases of,
and other agreements with respect to, the Subject Property upon such terms and
conditions as Beneficiary deems proper; and to make repairs, alterations and
improvements to the Subject Property deemed necessary, in Trustee’s or
Beneficiary’s judgment, to protect or enhance the security hereof.

(f) To give such notice of such Default and of election to cause the Subject
Property to be sold as may be required by law or as may be necessary to cause
Trustee to exercise the power of sale granted herein. Trustee shall give and
record such notice as the law then requires as a condition precedent to a
trustee’s sale. When the minimum period of time required by law after such
notice has elapsed, Trustee, without notice to or demand upon Trustor, except as
otherwise required by law, shall sell the Subject Property at the time and place
of sale fixed by it in the notice of sale, at one or several sales, either as a
whole or in separate parcels and in such manner and order, all as directed by
Beneficiary, or by Trustor to the extent required by law, at public auction to
the highest bidder for cash, in lawful money of the United States, payable at
the time of sale. Except as required by law, neither Trustor nor any other
person or entity shall have the right to direct the order in which the Subject
Property is sold. Subject to requirements and limits imposed by law, Trustee may
postpone any sale of the Subject Property by public announcement at such time
and place of sale, and from time to time may postpone such sale by public
announcement at the time and place fixed by the preceding postponement. Trustee
shall deliver to the purchaser at such sale a deed conveying the Subject
Property or portion thereof so sold, but without any covenant or warranty,
express or implied. The recitals in said deed of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person, including Trustee,
Trustor or Beneficiary, may purchase at such sale;

(g) To resort to and realize upon the security hereunder and any other security
now or later held by Beneficiary concurrently or successively and in one or
several consolidated or independent judicial actions or lawfully taken
non-judicial proceedings, or both, and to apply the proceeds received in
accordance with the Section hereof entitled Application of Foreclosure Sale
Proceeds, all in such order and manner as Beneficiary shall determine in its
sole discretion.

(h) Upon sale of the Subject Property at any judicial or non-judicial
foreclosure, Beneficiary may credit bid (as determined by Beneficiary in its
sole discretion) all or any portion of the Secured Obligations. In determining
such credit bid, Beneficiary may, but is not obligated to, take into account all
or any of the following: (i) appraisals of the Subject Property as such
appraisals may be discounted or adjusted by Beneficiary in its sole underwriting
discretion; (ii) expenses and costs incurred by Beneficiary with respect to the
Subject Property prior to foreclosure; (iii) expenses and costs which
Beneficiary anticipates will be incurred with respect to the Subject Property
after foreclosure, but prior to resale, including without limitation, costs of
structural reports and other due diligence, costs to carry the Subject

 

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Property prior to resale, costs of resale (e.g., commissions, attorneys’ fees,
and taxes), Hazardous Materials clean-up and monitoring, deferred maintenance,
repair, refurbishment and retrofit, and costs of defending or settling
litigation affecting the Subject Property; (iv) declining trends in real
property values generally and with respect to properties similar to the Subject
Property; (v) anticipated discounts upon resale of the Subject Property as a
distressed or foreclosed property; (vi) the existence of additional collateral,
if any, for the Secured Obligations; and (vii) such other factors or matters
that Beneficiary deems appropriate. Trustor acknowledges and agrees that:
(A) Beneficiary is not required to use any or all of the foregoing factors to
determine the amount of its credit bid; (B) this Section does not impose upon
Beneficiary any additional obligations that are not imposed by law at the time
the credit bid is made; (C) the amount of Beneficiary’s credit bid need not have
any relation to any loan-to-value ratios specified in any agreement between
Trustor and Beneficiary or previously discussed by Trustor and Beneficiary; and
(D) Beneficiary’s credit bid may be, at Beneficiary’s sole discretion, higher or
lower than any appraised value of the Subject Property.

(i) Notwithstanding anything to the contrary contained herein, in any action of
proceeding brought under this Deed of Trust of under any other instrument
evidencing the Secured Obligations in which a money judgment is sought, the
Beneficiary will look solely to the Subject Property and the Subject Property
income and any other property which may be transferred, conveyed, pledged,
assigned or mortgaged to the Beneficiary as security for this Deed of Trust, and
specifically agrees to waive and does hereby waive any right to seek or obtain a
deficiency judgment against the Trustor; provided, however, that nothing herein
shall limit or impair the enforcement against the Subject Property and other
collateral encumbered in this Deed of Trust, or any other instrument now or
hereinafter securing this Deed of Trust.

5.3 Application of Foreclosure Sale Proceeds. Except as otherwise may be
required by applicable law, after deducting all costs, fees and expenses of
Trustee, and of this trust, including costs of evidence of title and attorneys’
fees in connection with a sale, all proceeds of any foreclosure sale shall be
applied first, to payment of all Secured Obligations (including without
limitation, all sums expended by Beneficiary under the terms hereof and not then
repaid, with accrued interest at the highest rate per annum payable under any
Secured Obligation), in such order and amounts as Beneficiary in its sole
discretion shall determine; and the remainder, if any, to the person or persons
legally entitled thereto.

5.4 Application of Other Sums. All Rents or other sums received by Beneficiary
or any agent or receiver hereunder, less all costs and expenses incurred by
Beneficiary or such agent or receiver, including reasonable attorneys’ fees,
shall be applied to payment of the Secured Obligations in such order as
Beneficiary shall determine in its sole discretion; provided however, that
Beneficiary shall have no liability for funds not actually received by
Beneficiary.

5.5 No Cure or Waiver. Neither Beneficiary’s, Trustee’s or any receiver’s entry
upon and taking possession of the Subject Property, nor any collection of Rents,
insurance proceeds, condemnation proceeds or damages, other security or proceeds
of other security, or other sums, nor the application of any collected sum to
any Secured Obligation, nor the exercise of any other right or remedy by
Beneficiary, Trustee or any receiver shall impair the status of the security of
this Deed of Trust, or cure or waive any breach, Default or notice of default
under this Deed of Trust, or nullify the effect of any notice of default or sale
(unless all Secured Obligations and any other sums then due hereunder have been
paid in full and Trustor has cured all other Defaults), or prejudice Beneficiary
or Trustee in the exercise of any right or remedy, or be construed as an
affirmation by Beneficiary of any tenancy, lease or option of the Subject
Property or a subordination of the lien of this Deed of Trust.

 

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5.6 Costs, Expenses and Attorneys’ Fees. Trustor agrees to pay to Beneficiary
immediately upon demand the full amount of all payments, advances, charges,
costs and expenses, including court costs and reasonable attorneys’ fees (to
include outside counsel fees and all allocated costs of Beneficiary’s in-house
counsel), expended or incurred by Trustee or Beneficiary pursuant to this
Article V, whether incurred at the trial or appellate level, in an arbitration
proceeding or otherwise, and including any of the foregoing incurred in
connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Beneficiary or any
other person) relating to Trustor or in any way affecting any of the Subject
Property or Beneficiary’s ability to exercise any of its rights or remedies with
respect thereto. All of the foregoing shall be paid by Trustor with interest
from the date of demand until paid in full at the highest rate per annum payable
under any Secured Obligation.

5.7 Power to File Notices and Cure Defaults. Trustor hereby irrevocably appoints
Beneficiary and its successors and assigns as Trustor’s true attorney-in-fact to
perform any of the following powers, which agency is coupled with an interest:
(a) to execute and/or record any notices of completion, cessation of labor, or
any other notices that Beneficiary deems appropriate to protect Beneficiary’s
interest; and (b) upon the occurrence of any event, act or omission which with
the giving of notice or the passage of time, or both, would constitute a
Default, to perform any obligation of Trustor hereunder; provided however, that
Beneficiary, as such attorney-in-fact, shall only be accountable for such funds
as are actually received by Beneficiary, and Beneficiary shall not be liable to
Trustor or any other person or entity for any failure to act under this Section.

5.8 Remedies Cumulative; No Waiver. All rights, powers and remedies of
Beneficiary and Trustee hereunder are cumulative and are in addition to all
rights, powers and remedies provided by law or in any other agreements between
Trustor and Beneficiary. No delay, failure or discontinuance of Beneficiary in
exercising any right, power or remedy hereunder shall affect or operate as a
waiver of such right, power or remedy; nor shall any single or partial exercise
of any such right, power or remedy preclude, waive or otherwise affect any other
or further exercise thereof or the exercise of any other right, power or remedy.

ARTICLE VI. MISCELLANEOUS PROVISIONS

6.1 No Merger. No merger shall occur as a result of Beneficiary’s acquiring any
other estate in, or any other lien on, the Subject Property unless Beneficiary
specifically consents to a merger in writing.

6.2 Execution of Documents. Trustor agrees, upon demand by Beneficiary or
Trustee, to execute any and all documents and instruments required to effectuate
the provisions hereof.

6.3 Right of Inspection. Beneficiary or its agents or employees may enter onto
the Subject Property at any reasonable time for the purpose of inspecting the
Subject Property and ascertaining Trustor’s compliance with the terms hereof.

 

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6.4 Notices. All notices, requests and demands which Trustor or Beneficiary is
required or may desire to give to the other party must be in writing, delivered
to Beneficiary at the following address:

c/o WELLS FARGO BANK, NATIONAL ASSOCIATION

100 West Washington Street, 15th Floor

MAC #S4101-158

Phoenix, AZ 85003

Attention: Daniel Barkosky

and to Trustor at its address set forth at the signature lines below, or at such
other address as either party shall designate by written notice to the other
party in accordance with the provisions hereof. Trustee’s address is Wells Fargo
Financial National Bank, c/o Wells Fargo Bank, MAC- S4101-158, 100 W. Washington
Street, 15th Floor, Phoenix, AZ 85003.

6.5 Successors; Assignment. This Deed of Trust shall be binding upon and inure
to the benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties hereto; provided however, that this
Section does not waive the provisions of the Section hereof entitled Due on Sale
or Encumbrance. Beneficiary reserves the right to sell, assign, transfer,
negotiate or grant participations in all or any part of, or any interest in,
Beneficiary’s rights and benefits under the Note, any and all other Secured
Obligations and this Deed of Trust. In connection therewith, Beneficiary may
disclose all documents and information which Beneficiary now has or hereafter
acquires relating to the Subject Property, all or any of the Secured Obligations
and/or Trustor and, as applicable, any partners, joint venturers or members of
Trustor, whether furnished by any Trustor or otherwise.

6.6 Rules of Construction. (a) When appropriate based on the identity of the
parties or other circumstances, the masculine gender includes the feminine or
neuter or both, and the singular number includes the plural; (b) the term
“Subject Property” means all and any part of or interest in the Subject
Property; (c) all Section headings herein are for convenience of reference only,
are not a part of this Deed of Trust, and shall be disregarded in the
interpretation of any portion of this Deed of Trust; (d) if more than one person
or entity has executed this Deed of Trust as “Trustor,” the obligations of all
such Trustors hereunder shall be joint and several; and (e) all terms of Exhibit
A, and each other exhibit and/or rider attached hereto and recorded herewith,
are hereby incorporated into this Deed of Trust by this reference.

6.7 Severability of Provisions. If any provision of this Deed of Trust shall be
held to be prohibited by or invalid under applicable law, such provision shall
be ineffective only to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or any remaining provisions of this
Deed of Trust.

6.8 Recourse to Separate Property. Any married person who executes this Deed of
Trust as a Trustor and who is obligated under any Secured Obligation agrees that
any money judgment which Beneficiary or Trustee obtains pursuant to the terms of
this Deed of Trust or any other obligation of that married person secured by
this Deed of Trust may be collected by execution upon that person’s separate
property, as well as all marital property.

6.9 Governing Law. This Deed of Trust shall be governed by and construed in
accordance with the laws of the State of Arizona.

 

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IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the date first
set forth above.

 

TRUSTOR           ADDRESS SCHUFF STEEL COMPANY, a Delaware corporation      

1841 W. Buchanan Street

Phoenix, Arizona 85007

By:  

 

      Name:  

 

      Title:  

 

     

 

STATE OF ARIZONA    )       )    SS COUNTY OF                         )   

The foregoing instrument was acknowledged before me this      day of
            , 2014 by                                         , the
                                         of Schuff Steel Company, a Delaware
corporation, on behalf of the corporation.

(Seal and Expiration Date)

 

 

Notary Public

 

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EXHIBIT A

(Description of Property)

 

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SCHEDULE B

 

1. Schuff International, Inc., a Delaware corporation

 

2. Schuff Steel Company, a Delaware corporation

 

3. Schuff Steel-Atlantic, LLC, a Florida limited liability company

 

4. Quincy Joist Company, a Delaware corporation

 

5. Schuff Steel-Gulf Coast, Inc., a Delaware corporation

 

6. On-Time Steel Management Holding, Inc., a Delaware corporation

 

7. Schuff Holding Co., a Delaware corporation

 

8. Addison Structural Services, Inc., a Florida corporation

 

9. Schuff Steel Management Company-Southeast L.L.C., a Delaware limited
liability company

 

10. Schuff Steel Management Company-Colorado, L.L.C., a Delaware limited
liability company

 

11. Schuff Steel Management Company-Southwest, Inc., a Delaware corporation

 

12. Schuff Premier Services LLC, a Delaware limited liability company

 

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