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third party. Trustor may, at Trustor's expense; contest the validity or application of any tax,
<br />levy, assessment or charge affecting the Property by appropriate legal proceedings promptly
<br />initiated and conducted in good faith and with due diligence, provided that (i) Beneficiary is
<br />reasonably satisfied that neither the Property nor any part thereof or interest therein will be in
<br />danger of being sold, forfeited, or lost as a result of such contest, and (ii) Trustor shall have
<br />posted a bond or furnished other security as may reasonably be required from time to time by
<br />Beneficiary; and provided further that Trustor shall timely make any payment necessary to
<br />prevent a lien foreclosure, sale, forfeiture or loss of the Property.
<br />7.7 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances,
<br />whether released of record or not, which are discharged in whole or in part by Beneficiary in
<br />accordance with this Leasehold Deed of Trust.
<br />7.8 Hazard, Liability and Workers' Compensation Insurance. At all times during
<br />the term hereof, Trustor shall at Trustor's expense, maintain insurance policies in accordance
<br />with the requirements set forth in the City Documents. Trustor shall file with Beneficiary
<br />prior to the commencement of the term hereof, certificates (or such other proof as Beneficiary
<br />may reasonably require, including without limitation copies of the required insurance
<br />policies) evidencing each of the insurance policies and endorsements thereto as required
<br />pursuant to the City Documents, and such certificates (or policies) shall provide that at least
<br />thirty (30) days' prior written notice shall be provided to Beneficiary prior to the expiration,
<br />cancellation or change in coverage under each such policy. If any insurance policy required
<br />pursuant to the City Documents is canceled or the coverage provided thereunder is reduced,
<br />Trustor shall, within twenty one (2 1) days after receipt of written notice of such cancellation
<br />or reduction in coverage, but in no event later than the effective date of cancellation or
<br />reduction, file with Beneficiary a certificate showing that the required insurance has been
<br />reinstated or provided through another insurance company or companies. Upon failure to so
<br />file such certificate, Beneficiary may, without further notice and at its option, procure such
<br />insurance coverage at Truster's expense, and Trustor shall promptly reimburse Beneficiary
<br />for such expense upon receipt of billing from Beneficiary.
<br />7.9 Condition of Property. Trustor represents and warrants as of the date hereof
<br />that except as disclosed to Beneficiary in writing, as of the date hereof. (i) Trustor has not
<br />received any notice from any governmental authority of any threatened or pending zoning,
<br />building, fire, or health code violation or violation of other governmental regulations
<br />concerning the Land that has not previously been corrected, and no condition on the Land
<br />violates any health, safety, fire, environmental, sewage, building, or other federal, state or
<br />local law, ordinance or regulation; (ii) no contracts, licenses, leases or commitments
<br />regarding the maintenance or use of the Property or allowing any third party rights to use the
<br />Property are in force; (iii) there are no threatened or pending actions, suits, or administrative
<br />proceedings against or affecting the Property or any portion thereof or the interest of Trustor
<br />in the Property; (iv) there are no threatened or pending condemnation, eminent domain, or
<br />similar proceedings affecting the Land or any portion thereof; (v) Trustor has not received
<br />any notice from any insurer of defects of the Property which have not been corrected; (vi)
<br />there are no natural or artificial conditions upon the Land or any part thereof that could result
<br />in a material and adverse change in the condition of the Land; (vii) all information that
<br />Trustor has delivered to Beneficiary, either directly or through Truster's agents, is accurate
<br />and complete; and (viii) Trustor or Trastor's agents have disclosed to Beneficiary all material
<br />facts concerning the Property.
<br />144\259\1892893.2
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