EXHIBIT 10.32
____________________SPACE ABOVE THIS LINE FOR RECORDER'S USE____________________
STATE OF _________________ AFTER RECORDING RETURN TO:
ANE C. PRIESTER
COUNTY OF ________________ LATHAM & WATKINS LLP
633 W. 5TH STREET, SUITE 4000
LOS ANGELES, CA 90071
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DEED TO SECURE DEBT, ASSIGNMENT OF RENTS
AND SECURITY AGREEMENT
DATED AS OF JULY 16, 2003
BY
CALPINE CORPORATION,
A DELAWARE CORPORATION,
AS GRANTOR
TO
THE BANK OF NEW YORK,
A NEW YORK BANKING CORPORATION,
AS GRANTEE
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PURSUANT TO O.C.G.A. SECTION 48-6-61, GEORGIA INTANGIBLE RECORDING TAX IN THE
MAXIMUM AMOUNT OF $25,000 IS BEING PAID WITH RESPECT TO THE SECURED OBLIGATIONS
UPON THE RECORDATION OF THIS SECURITY DEED.
TABLE OF CONTENTS
Page
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ARTICLE 1 - DEFINITIONS .......................................................................... 5
1.1 DEFINED TERMS ........................................................................... 5
1.2 ACCOUNTING TERMS ........................................................................ 7
ARTICLE 2 - GENERAL COVENANTS AND PROVISIONS ..................................................... 7
2.1 GRANTOR PERFORMANCE OF SECURED DEBT DOCUMENTS ........................................... 7
2.2 GENERAL REPRESENTATIONS, COVENANTS AND WARRANTIES ....................................... 7
2.3 COMPLIANCE WITH LEGAL REQUIREMENTS ...................................................... 7
2.4 INSURANCE; APPLICATION OF INSURANCE PROCEEDS; APPLICATION OF EMINENT DOMAIN PROCEEDS .... 7
2.5 ASSIGNMENT OF RENTS ..................................................................... 8
2.6 REJECTION OF GROUND LEASE BY LESSOR ..................................................... 9
2.7 EXPENSES ................................................................................ 9
2.8 GRANTEE ASSUMES NO OBLIGATIONS .......................................................... 9
2.9 FURTHER ASSURANCES ...................................................................... 10
2.10 ACTS OF GRANTOR ......................................................................... 10
2.11 AFTER-ACQUIRED PROPERTY ................................................................. 10
2.12 MORTGAGED PROPERTY ...................................................................... 11
2.13 POWER OF ATTORNEY ....................................................................... 13
2.14 COVENANT TO PAY ......................................................................... 13
2.15 SECURITY AGREEMENT ...................................................................... 14
ARTICLE 3 - REMEDIES ............................................................................. 15
3.1 PROTECTIVE ADVANCES ..................................................................... 15
3.2 INSTITUTION OF EQUITY PROCEEDINGS ....................................................... 15
3.3 GRANTEE'S POWER OF ENFORCEMENT .......................................................... 15
3.4 GRANTEE'S RIGHT TO ENTER AND TAKE POSSESSION, OPERATE AND APPLY INCOME .................. 17
3.5 SEPARATE SALES .......................................................................... 18
3.6 WAIVER OF APPRAISEMENT, MORATORIUM, VALUATION, STAY, EXTENSION AND REDEMPTION LAWS ...... 18
3.7 RECEIVER ................................................................................ 18
3.8 SUITS TO PROTECT THE MORTGAGED PROPERTY ................................................. 19
3.9 PROOFS OF CLAIM ......................................................................... 19
3.10 GRANTOR TO PAY AMOUNTS SECURED HEREBY ON ANY DEFAULT IN PAYMENT; APPLICATION OF
MONIES BY GRANTEE ....................................................................... 19
3.11 DELAY OR OMISSION; NO WAIVER ............................................................ 20
3.12 NO WAIVER OF ONE DEFAULT TO AFFECT ANOTHER .............................................. 20
3.13 DISCONTINUANCE OF PROCEEDINGS; POSITION OF PARTIES RESTORED ............................. 20
3.14 REMEDIES CUMULATIVE ..................................................................... 21
3.15 INTEREST AFTER EVENT OF DEFAULT ......................................................... 21
3.16 FORECLOSURE; EXPENSES OF LITIGATION ..................................................... 21
3.17 DEFICIENCY JUDGMENTS .................................................................... 21
3.18 WAIVER OF JURY TRIAL .................................................................... 22
3.19 EXCULPATION OF GRANTEE .................................................................. 22
ARTICLE 4 - GENERAL .............................................................................. 22
4.1 DISCHARGE ............................................................................... 22
4.2 NO WAIVER ............................................................................... 22
4.3 EXTENSION, REARRANGEMENT OR RENEWAL OF OBLIGATIONS ...................................... 22
4.4 FORCIBLE DETAINER ....................................................................... 23
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4.5 WAIVER OF STAY OR EXTENSION ............................................................. 24
4.6 NOTICES ................................................................................. 23
4.7 SEVERABILITY ............................................................................ 23
4.8 APPLICATION OF PAYMENTS ................................................................. 23
4.9 GOVERNING LAW ........................................................................... 24
4.10 AMENDMENTS .............................................................................. 24
4.11 SUCCESSORS AND ASSIGNS .................................................................. 24
4.12 RENEWAL, ETC ............................................................................ 24
4.13 FUTURE ADVANCES ......................................................................... 24
4.14 LIABILITY ............................................................................... 25
4.15 SEVERABILITY AND COMPLIANCE WITH USURY LAW .............................................. 25
4.16 RELEASE OF COLLATERAL ................................................................... 26
4.17 TIME OF THE ESSENCE ..................................................................... 26
4.18 COUNTERPART EXECUTION ................................................................... 26
4.19 WAIVER OF GRANTOR'S RIGHTS .............................................................. 26
4.20 ATTORNEYS' FEES ......................................................................... 27
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AUGUSTA, GA
DEED TO SECURE DEBT,
ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
This DEED TO SECURE DEBT, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (this
"Security Deed"), dated as of July 16, 2003, is made by CALPINE CORPORATION, a
Delaware corporation ("Grantor"), whose address is 50 West San Fernando Street,
San Jose, CA 95113, to THE BANK OF NEW YORK, a New York banking corporation, not
in its individual capacity but solely as Collateral Trustee under the Collateral
Trust Agreement dated July 16, 2003 (the "Collateral Trust Agreement") among
Grantor, Grantee, the 2007 Trustee, the 2010 Trustee, the 2013 Trustee, Credit
Agreement Agent and Term Loan Administrative Agent ("Grantee"), whose address is
101 Barclay Street, New York, New York 10286. References to this "Security Deed"
shall mean this instrument and any and all renewals, modifications, amendments,
supplements, extensions, consolidations, substitutions, spreaders, restatements
and replacements of this instrument.
Capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in the Collateral Trust Agreement.
Recitals
A. Grantor has entered into an Amended and Restated Credit Agreement
dated as of July 16, 2003 (the "Credit Agreement") among, inter alia, Grantor,
the Lenders referred to therein and The Bank of Nova Scotia as Administrative
Agent, relating to a $500,000,000 senior secured credit facility made available
in the form of revolving loans and term loans, including letters of credit
issued thereunder.
B. Grantor also intends to (a) issue $500,000,000 in aggregate
principal amount of Second Priority Senior Floating Rate Secured Notes due 2007
(the "2007 Notes"), with a maturity date of July 15, 2007, pursuant to the
Indenture dated as of July 16, 2003 (the "2007 Indenture") between Grantor and
Wilmington Trust Company, as Trustee (together with its successors in such
capacity, the "2007 Trustee"), (b) issue $1,150,000,000 in aggregate principal
amount of 8.50% Second Priority Senior Secured Fixed Rate Notes due 2010 (the
"2010 Notes"), with a maturity date of July 15, 2010, pursuant to the Indenture
dated as of July 16, 2003 (the "2010 Indenture") between Grantor and Wilmington
Trust Company, as Trustee (together with its successors in such capacity, the
"2010 Trustee"), (c) issue $900,000,000 in aggregate principal amount of 8.75%
Second Priority Senior Secured Fixed Rate Notes due 2013 (the "2013 Notes"),
with a maturity date of July 15, 2013, pursuant to the Indenture dated as of
July 16, 2003 (the "2013 Indenture") between Grantor and Wilmington Trust
Company, as Trustee (together with its successors in such capacity, the "2013
Trustee"), and (d) borrow $750,000,000 in Term Loans (the "Term Loans"), with a
maturity date of July 15, 2007, pursuant to a Term Loan Agreement dated as of
July 16, 2003 (the "Term Loan Agreement") between Grantor and Goldman Sachs
Credit
Partners L.P., as Administrative Agent (together with its successors in such
capacity, the "Term Loan Administrative Agent").
C. As permitted pursuant to the Secured Debt Documents, Grantor may
incur future debt which could, together with the obligations under the Credit
Agreement, constitute Priority Lien Debt and Grantor may incur future debt which
could, together with the 2007 Notes, the 2010 Notes, the 2013 Notes and the Term
Loans, constitute Parity Lien Debt, provided that the aggregate amount of the
Secured Debt to be secured hereby shall not exceed $4,200,000,000. Grantor
intends to secure the obligations, including the obligations (a) under the
Credit Agreement and any future Priority Lien Debt, equally and ratably, on a
priority basis, and, (b) subject to such priority, under the 2007 Notes, 2010
Notes, 2013 Notes and Term Loans and any future Parity Lien Debt, equally and
ratably, as contemplated in the Collateral Trust Agreement.
D. Grantor (i) is the owner of the interests in the lands described
in Exhibit A attached hereto and (ii) owns, leases or otherwise has the right to
use all of the buildings, improvements, structures and fixtures located on the
lands described in Exhibit A and is executing and delivering this instrument in
order to secure its Obligations (as defined below).
Agreement
NOW, THEREFORE, to secure the prompt and complete payment and performance
when and as required, due and/or payable of all of the obligations and
liabilities of Grantor, by acceleration or otherwise, arising out of or in
connection with the Credit Agreement, the 2007 Indenture, the 2010 Indenture,
the 2013 Indenture, the Term Loan Agreement and other Secured Debt Documents,
and the obligations of Grantor set forth herein (collectively, the
"Obligations") and in consideration of the covenants herein and therein,
Grantor, intending to be legally bound, does hereby grant, bargain, sell,
convey, warrant, assign, transfer, pledge, set-over and confirm unto Grantee as
set forth in this Security Deed, for the use and benefit of Grantee, all of
Grantor's estate, right, title, interest, property, claim and demand, now or
hereinafter arising, in and to the following property and rights (herein
collectively called the "Mortgaged Property"):
(a) Grantor's interest under the Ground Lease executed as of
February 22, 2001, between DSM Chemicals North America, Inc. and Grantor,
as amended by that First Amendment to Land Lease Agreement dated October
16, 2001 (as modified, supplemented or amended from time to time, the
"Ground Lease"), and the leasehold estate created thereby in and to the
lands and premises more particularly described in Exhibit A hereto (the
"Site");
(b) any and all easements, leases, licenses, option rights,
rights-of-way and other rights used in connection with the Site or as a
means of access thereto (including, without limitation, all rights of
Grantor to exercise any election or option, to make any determination or
to give any notice, consent, waiver or approval, or to take any other
action under the Ground Lease), all easements for ingress and egress and
easements for water, natural gas and sewage pipelines, running in favor of
Grantor, or appurtenant to the Site or arising out of the Ground Lease,
and any and all sidewalks, alleys, strips and gores of land adjacent
thereto or used in connection therewith together with all and singular the
tenements,
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hereditaments and appurtenances thereto, and with any land lying within
the right-of-way of any streets, open or proposed, adjoining the same
(including, without limitation, the easements, leases, licenses and other
instruments described in Exhibit B hereto) (collectively, the "Easements";
and the Site and the Easements collectively referred to herein as the
"Real Property");
(c) all buildings, structures, fixtures and other improvements now
or hereafter erected on the Real Property, including the Project
(collectively, the "Improvements");
(d) all machinery, apparatus, equipment, fittings, fixtures,
boilers, turbines and other articles of personal property, including all
goods and all goods which become fixtures, now owned or hereafter acquired
by Grantor and now or hereafter located on, attached to or used in the
operation of or in connection with the Real Property and/or the
Improvements, and all replacements thereof, additions thereto and
substitutions therefor, to the fullest extent permitted by applicable law
(all of the foregoing being hereinafter collectively called the
"Equipment");
(e) all raw materials, work in process and other materials used or
consumed in the construction of, or now or hereafter located on or used in
connection with, the Real Property, the Improvements and/or the Equipment,
(including, without limitation, fuel and fuel deposits, now or hereafter
located on the Real Property or elsewhere or otherwise owned by Grantor)
(the above items, together with the Equipment, being hereinafter
collectively called the "Tangible Collateral");
(f) all rights, powers, privileges and other benefits of Grantor (to
the extent assignable) now or hereafter obtained by Grantor under the
Ground Lease and/or from any Governmental Authority, including, without
limitation, permits issued in the name of Grantor, governmental actions
relating to the ownership, operation, management and use of the Real
Property, Improvements, Equipment or Tangible Collateral, the development
and financing of the Project, the Improvements and the Equipment, and any
improvements, modifications or additions thereto;
(g) any right of Grantor to elect to terminate the Ground Lease or
remain in possession of the Real Property pursuant to 11 U.S.C. section
365(h)(1) or any similar provision of applicable law and any possessory
rights of Grantor in the Real Property pursuant to 11 U.S.C. section
365(h)(2) or any other similar provision of applicable law;
(h) all the lands and interests in lands, tenements and
hereditaments hereafter acquired by Grantor in connection with or
appurtenant to the Real Property and/or any other property or rights
subject to the lien hereof, including (without limitation) all interests
of Grantor, whether as lessor or lessee, in any leases of land hereafter
made and all rights of Grantor thereunder;
(i) any and all other property in any way associated or used in
connection with or appurtenant to the Real Property, Improvements,
Equipment or Tangible Collateral that
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may from time to time, by delivery or by writing of any kind, be subjected
to the lien hereof by Grantor or by anyone on its behalf or with its
consent, or which may come into the possession or be subject to the
control of Grantee pursuant to this Security Deed, being hereby
collaterally assigned to Grantee and subjected or added to the lien or
estate created by this Security Deed forthwith upon the acquisition
thereof by Grantor, as fully as if such property were now owned by Grantor
and were specifically described in this Security Deed and subjected to the
lien and security interest hereof; and Grantee is hereby authorized to
receive any and all such property as and for additional security
hereunder; and
(j) all the remainder or remainders, reversion or reversions, rents,
revenues, issues, profits, royalties, income and other benefits derived
from any of the foregoing, all of which are hereby assigned to Grantee,
who is hereby authorized to collect and receive the same, to give proper
receipts and acquittances therefor and to apply the same in accordance
with the provisions of this Security Deed.
Notwithstanding any provision herein to the contrary, the Mortgaged
Property or any part thereof may be released from conveyance created by this
Security Deed in accordance with the provisions in the Collateral Trust
Agreement.
TO HAVE AND TO HOLD the said Mortgaged Property, whether now owned or held
or hereafter acquired, unto Grantee, its successors and assigns, pursuant to the
provisions of this Security Deed.
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the lien, security
title, security interest or estate created by this Security Deed to secure the
payment of the Obligations, both present and future, shall be first, prior and
superior to any Lien, security interest, reservation of title or other interest
(other than superior Permitted Liens) heretofore, contemporaneously or
subsequently suffered or granted by Grantor, its legal representatives,
successors or assigns, except only those, if any, expressly hereinafter referred
to and that the Mortgaged Property is to be held, dealt with and disposed of by
Grantee, upon and subject to the terms, covenants, conditions, uses and
agreements set forth in this Security Deed.
PROVIDED ALWAYS, that upon payment in full of the Obligations in
accordance with the terms and provisions hereof and of the other Secured Debt
Documents and the observance and performance by Grantor of its covenants and
agreements set forth herein and therein, then this Security Deed and the estate
hereby and therein granted shall be cancelled and surrendered and shall be
reconveyed as provided herein below.
THIS CONVEYANCE is intended to operate and is to be construed as a deed
passing title to the Mortgaged Property to Grantee and is made under those
provisions of the existing laws of the State of Georgia relating to deeds to
secure debt, and not as a mortgage, and is given to secure the Obligations.
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ARTICLE 1 - DEFINITIONS
1.1 Defined Terms. 11 Capitalized terms used in this Security Deed and not
otherwise defined herein shall have the meanings assigned to them in the
Collateral Trust Agreement. Any term defined by reference to an agreement,
instrument or other document shall have the meaning so assigned to it whether or
not such document is in effect. In addition, for purposes of this Security Deed,
the following definitions shall apply:
"Applicable Law" means with respect to any Person or matter, any federal,
state, regional, tribal or local statute, law, code, rule, treaty, convention,
application, order, decree, consent decree, injunction, directive, determination
or other requirement (whether or not having the force of law) relating to such
Person or matter and, where applicable, any interpretation thereof by a
Governmental Authority having jurisdiction with respect thereto or charged with
the administration or interpretation thereof.
"Default Rate" has the meaning ascribed to it in the Secured Debt
Documents.
"Easements" has the meaning ascribed to it in the Granting Clauses.
"Equipment" has the meaning ascribed to it in the Granting Clauses.
"Event of Default" means an Actionable Default as defined under the
Collateral Trust Agreement.
"Governmental Authority" means any and all courts, boards, agencies,
commissions, offices or authorities of any nature whatsoever for any
governmental unit (federal, state, county, district, municipal, city, tribe or
otherwise) whether now or hereafter in existence charged with the
administration, interpretation or enforcement of any Applicable Law.
"Ground Lease" has the meaning ascribed to it in the Granting
Clauses.
"Improvements" has the meaning ascribed to it in the Granting
Clauses.
"Legal Requirements" means (i) any and all present and future
judicial decisions, statutes, rulings, rules, regulations, licenses, decisions,
orders, injunctions, decrees, permits, certificates or ordinances of any
Governmental Authority in any way applicable to Grantor, or the Mortgaged
Property, including the ownership, use, occupancy, operation, maintenance,
repair or reconstruction thereof, and any other Applicable Law enacted by any
Governmental Authority relating to health or the environment, (ii) Grantor's
presently or subsequently effective Organic Documents, (iii) any and all Leases,
(iv) any and all leases and other contracts (written or oral) of any nature to
which Grantor, or the Mortgaged Property may be bound and (v) any and all
restrictions, restrictive covenants or zoning, present and future, as the same
may apply to the Mortgaged Property.
"Mortgaged Property" has the meaning ascribed to it in the Granting
Clauses.
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"Obligations" has the meaning ascribed to it in the Granting
Clauses.
"Organic Documents" means the Articles of Incorporation, Certificate
of Incorporation, limited liability company certificate of formation and
regulations or operating agreement, partnership agreement, limited partnership
agreement, joint venture agreement, trust agreement or other similar documents
governing the organization and operation of a business association.
"Permitted Lien" means the liens, easements, building lines,
restrictions, exceptions, reservations, conditions, limitations, security
interests and other matters (if any) as permitted in the Secured Debt Documents.
"Person" means any natural person, corporation, partnership, limited
liability company, firm, association, trust, government, governmental agency or
any other entity, whether acting in an individual, fiduciary or other capacity.
"Proceeds" has the meaning assigned to it under the UCC and, in any event, shall
include, without limitation, (i) any and all proceeds of any insurance
(including, without limitation, property casualty and title insurance),
indemnity, warranty or guaranty payable from time to time with respect to any of
the Mortgaged Property; (ii) any and all proceeds in the form of accounts (as
such term is defined in the UCC), security deposits, tax escrows (if any), down
payments (to the extent the same may be pledged under applicable law),
collections, contract rights, documents, instruments, letters of credit, chattel
paper, liens and security instruments, guaranties or general intangibles
relating in whole or in part to the Mortgaged Property and all rights and
remedies of whatever kind or nature Grantor may hold or acquire for the purpose
of securing or enforcing any obligation due Grantor thereunder.
"Project" means that certain 500 MW (approximately) power generating
facility located on the Real Property.
"Real Property" has the meaning ascribed to it in the Granting
Clauses.
"Secured Debt Documents" has the meaning ascribed it in the
Collateral Trust Agreement.
"Site" has the meaning ascribed to it in the Granting Clauses.
"State" means that state in which the Site is located.
"Tangible Collateral" has the meaning ascribed to it in the Granting
Clauses.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the State of Georgia, and the terms "Accounts," "Account Debtor, "As
Extracted Collateral," "Chattel Paper," "Contract Rights," "Deposit Accounts,"
"Documents," "Electronic Chattel Paper," "General
6
Intangibles," "Goods," "Equipment," "Fixtures," "Inventory," "Instruments," and
"Proceeds" shall have the respective meanings assigned to such terms in the
Uniform Commercial Code.
1.2 Accounting Terms. As used herein and in any certificate or other
document made or delivered pursuant hereto, accounting terms not defined herein
shall have the respective meanings given to them under GAAP.
ARTICLE 2 - GENERAL COVENANTS AND PROVISIONS
2.1 Grantor Performance of Secured Debt Documents. Grantor shall perform,
observe and comply with each and every provision hereof, and with each and every
provision contained in the Secured Debt Documents and shall promptly pay, when
payment shall become due, the principal with interest thereon and all other sums
required to be paid by Grantor under this Security Deed and the other Secured
Debt Documents at the time and in the manner provided in the Secured Debt
Documents.
2.2 General Representations, Covenants and Warranties. Grantor, to the
best of its knowledge, represents, covenants and warrants that as of the date
hereof: (a) Grantor has good and marketable title to that portion of the Real
Property which constitutes real property interests including the Ground Lease
and the leasehold estate created thereby, free and clear of all encumbrances
except Permitted Liens with respect to the Site, the Ground Lease and other
matters which, individually and in the aggregate, do not have a materially
adverse effect upon the ownership or operation of the Site; (b) Grantor has the
right to hold, occupy and enjoy its interest in the Real Property on and subject
to the terms and conditions of the Ground Lease, and has good right, full power
and lawful authority to grant the same as provided herein, and Grantee may at
all times peaceably and quietly enter upon, hold, occupy and enjoy the Real
Property in accordance with the terms hereof; (c) except as otherwise disclosed
in the Secured Debt Documents, all costs arising from construction of any
improvements, the performance of any labor and the purchase of all Mortgaged
Property have been or shall be paid when due; (d) the Site has access for
ingress and egress to dedicated street(s); and (e) no material part of the
Mortgaged Property has been damaged, destroyed, condemned or abandoned.
2.3 Compliance with Legal Requirements. Grantor shall promptly comply in
all material respects with all Legal Requirements relating to its use and
occupancy of the Mortgaged Property, whether or not such compliance requires
work or remedial measures that are ordinary or extraordinary, foreseen or
unforeseen, structural or nonstructural, or that interfere with the use or
enjoyment of the Mortgaged Property.
2.4 Insurance; Application of Insurance Proceeds; Application of Eminent
Domain Proceeds.
2.4.1 Grantor shall carry, with financially sound and reputable
insurance companies and in amounts as is customary in the industry or as
otherwise required pursuant to the Secured Debt Documents, the following
insurance: (1) workmen's compensation insurance and public liability and
property damage insurance in respect of all activities in which Grantor might
incur personal liability for the death of or injury to an employee or third
person, or damage
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to or destruction of another's property; and (2) to the extent such insurance is
carried by similar companies engaged in similar undertakings in, the same
general areas in which the Mortgaged Property, is located, insurance in respect
of the Equipment, against loss or damage by fire, lightning, hail, tornado,
explosion and other similar risks, hazards, casualties and contingencies
(including business interruption insurance covering loss of revenues) with
limits and sublimits as appropriate; provided, that any such insurance may be
provided by way of self insurance to the extent that similar companies engaged
in similar undertakings in the same general areas also self-insure. Each
insurance policy issued in connection therewith shall provide by way of
endorsements, riders or otherwise that (i) name Grantee as a loss payee on all
property insurance policies and an additional insured on all liability insurance
policies, and provide that proceeds from property insurance policies will be
payable to Grantee as its interest may appear, which proceeds are hereby
assigned to Grantee, it being agreed by Grantor that such payments shall be
applied A) if there be no Event of Default existing or which would exist but for
due notice or lapse of time, or both, to the restoration, repair or replacement
of the Mortgaged Property, or B) if there be an Event of Default existing, or
which would exist but for due notice or lapse of time, or both, in accordance
with the provisions of the Collateral Trust Agreement, either for the above
stated purpose or toward the payment of the Indebtedness; (ii) the coverage of
Grantee shall not be terminated, reduced or affected in any manner regardless of
any breach or violation by Grantor of any warranties, declarations or conditions
in such policy; (iii) no such insurance policy shall be canceled, materially
endorsed, materially altered or reissued to effect a change in coverage for any
reason and to any extent whatsoever unless such insurer, their authorized
representative or Grantor shall have first given Grantee and each Secured Debt
Representative thirty (30) days prior written notice thereof; and (iv) Grantee
may, but shall not be obligated to, make premium payments to prevent any
cancellation, endorsement, alteration or re-issuance and such payments shall be
accepted by the insurer to prevent the same. Grantee shall be furnished with a
certificate evidencing such coverage in form and content as are customary in the
industry. All policies to be maintained under this Mortgage are to be issued on
forms and by companies and with endorsements as are customary in the industry.
Grantor shall maintain insurance in an amount sufficient to prevent Grantor from
becoming a co-insurer under any policy required hereunder. If Grantor fails to
maintain the level of insurance required under this Mortgage, then Grantor shall
and hereby agrees to indemnify Grantee to the extent that a casualty occurs and
insurance proceeds would have been available had such insurance been maintained;
2.4.2 All insurance proceeds and all eminent domain proceeds shall
be paid and/or shall be applied in accordance with the provisions of the Secured
Debt Documents.
2.5 Assignment of Rents. Grantor unconditionally and absolutely assigns to
Grantee all of Grantor's right, title and interest in and to: all leases,
subleases, occupancy agreements, licenses, rental contracts and other similar
agreements now or hereafter existing relating to the use or occupancy of the
Mortgaged Property, together with all guarantees, modifications, extensions and
renewals thereof; and all rents, issues, profits, income and proceeds due or to
become due from tenants of the Mortgaged Property (the "Leases"), including
rentals and all other payments of any kind under any leases now existing or
hereafter entered into, together with all deposits (including security deposits)
of tenants thereunder. This is an absolute assignment to Grantee and not an
assignment as security for the performance of the obligations under the Secured
Debt Documents, or any other indebtedness. Subject to the provisions of herein
below, Grantee shall have the right,
8
power and authority to, but shall not be obligated to: notify any person that
the Leases have been assigned to Grantee and that all rents and other
obligations are to be paid directly to Grantee, whether or not Grantee has
commenced or completed foreclosure or taken possession of the Mortgaged
Property; settle compromise, release, extend the time of payment of, and make
allowances, adjustments and discounts of any rents or other obligations under
the Leases; enforce payment of rents and other rights under the Leases,
prosecute any action or proceeding , and defend against any claim with respect
to rents and Leases; enter upon, take possession of and operate the Mortgaged
Property; lease all or any part of the Mortgaged Property; and/or perform any
and all obligations of Grantor under the Leases and exercise any and all rights
of Grantor therein contained to the full extent of Grantor's rights and
obligations thereunder, with or without the bringing of any action or the
appointment of a receiver. At Grantee's request, Grantor shall deliver a copy of
this Security Deed to each tenant under a Lease. Grantor irrevocably directs any
tenant, without any requirement for notice to or consent by Grantor, to comply
with all demands of Grantee under this Section 2.5 and to turn over to Grantee
on demand all rents which it receives. Grantee shall have the right, but not the
obligation, to use and apply all rents received hereunder in such order and such
manner as Grantee may determine in accordance with the Collateral Trust
Agreement. Notwithstanding that this is an absolute assignment of the rents and
Leases and not merely the collateral assignment of, or the grant of a lien or
security interest in the rents and Leases, Grantee grants to Grantor a revocable
license to collect and receive the rents and to retain, use and enjoy such
rents. Such license may be revoked by Grantee only upon the occurrence of any
Event of Default. Grantor shall apply any rents which it receives to the payment
due under the Obligations, taxes, assessments, water charges, sewer rents and
other governmental charges levied, assessed or imposed against the Mortgaged
Property, insurance premiums, and other obligations of lessor under the Leases
before using such proceeds for any other purpose.
2.6 Rejection of Ground Lease by Lessor. To the extent applicable, if the
lessor under the Ground Lease rejects or disaffirms the Ground Lease or purports
or seeks to disaffirm the Ground Lease pursuant to any bankruptcy law, then:
2.6.1 To the extent permitted by law, Grantor shall remain in
possession of the Real Property demised under the Ground Lease and shall perform
all acts reasonably necessary for Grantor to remain in such possession for the
unexpired term of such Ground Lease (including all renewals), whether the then
existing terms and provisions of such Ground Lease require such acts or
otherwise; and
2.6.2 All the terms and provisions of this Security Deed and the
lien created by this Security Deed shall remain in full force and effect and
shall extend automatically to all of Grantor's rights and remedies arising at
any time under, or pursuant to, any bankruptcy or insolvency laws, including all
of Grantor's rights to remain in possession of the Real Property.
2.7 Expenses. Grantor shall indemnify Grantee with respect to any
transaction or matter in any way connected with any portion of the Mortgaged
Property, or Grantor's use, occupancy, or operation of the Mortgaged Property in
accordance with the Collateral Trust Agreement.
2.8 Grantee Assumes No Obligations. It is expressly agreed that, anything
herein contained to the contrary notwithstanding, Grantor shall remain obligated
under all agreements
9
which are included in the definition of "Mortgaged Property" and shall perform
all of its obligations thereunder in accordance with the provisions thereof, and
neither Grantee nor any of the Secured Debtholders shall have any obligation or
liability with respect to such obligations of Grantor, nor shall Grantee or any
of the Secured Debtholders be required or obligated in any manner to perform or
fulfill any obligations or duties of Grantor under such agreements, or to make
any payment or to make any inquiry as to the nature or sufficiency of any
payment received by it, or to present or file any claim or take any action to
collect or enforce the payment of any amounts which have been assigned to
Grantee hereunder or to which Grantee or the Secured Debtholders may be entitled
at any time or times.
2.9 Further Assurances. Grantor shall, from time to time, at its expense,
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or that Grantee may reasonably request, in
order to perfect and continue the lien and security interest granted hereby and
to enable Grantee to obtain the full benefits of the lien and security interest
granted or intended to be granted hereby. Grantor shall keep the Mortgaged
Property free and clear of all Liens, other than Permitted Liens. Without
limiting the generality of the foregoing, Grantor shall execute and record or
file this Security Deed and each amendment hereto, and such financing or
continuation statements, or amendments thereto, and such other instruments,
endorsements or notices, as may be necessary, or as Grantee may reasonably
request, in order to perfect and preserve the lien and security interest granted
or purported to be granted hereby. Grantor hereby authorizes Grantee to file one
or more financing statements or continuation statements, and amendments thereto,
relative to all or any part of the Mortgaged Property necessary to preserve or
protect the lien and security interest granted hereby without the signature of
Grantor where permitted by law.
2.10 Acts of Grantor. Except as provided in or permitted by the Secured
Debt Documents, Grantor hereby represents and warrants that it has not granted,
mortgaged, hypothecated, assigned or pledged and hereby covenants that it will
not grant, mortgage, hypothecate, assign or pledge, so long as this Security
Deed shall remain in effect, any of its right, title or interest in and to the
Mortgaged Property or any part thereof, other than Permitted Liens, to anyone
other than Grantee.
2.11 After-Acquired Property. Any and all of the Mortgaged Property which
is hereafter acquired shall immediately, without any further conveyance,
assignment or act on the part of Grantor or Grantee, become and be subject to
the lien and security interest of this Security Deed as fully and completely as
though specifically described herein, but nothing contained in this Section 2.11
shall be deemed to modify or change the obligations of Grantor under Section 2.9
hereof. If and whenever from time to time Grantor shall hereafter acquire any
real property or interest therein which constitutes or is intended to constitute
part of the Mortgaged Property hereunder, Grantor shall promptly give notice
thereof to Grantee and Grantor shall forthwith execute, acknowledge and deliver
to Grantee a supplement to this Security Deed subjecting the property so
acquired to the lien of this Security Deed.
10
2.12 Mortgaged Property.
2.12.1 Grantor shall pay or cause to be paid all rent and other
charges required under the Ground Lease as and when the same are due and shall
promptly and faithfully perform or cause to be performed all other material
terms, obligations, covenants, conditions, agreements, indemnities and
liabilities of Grantor under the Ground Lease. Grantor shall observe all
applicable covenants, easements and other restrictions of record with respect to
the Site, the Easements or to any other part of the Mortgaged Property, in all
material respects.
2.12.2 Grantor shall do, or cause to be done, all things necessary
to preserve and keep unimpaired all rights of Grantor as lessee under the Ground
Lease, and to prevent any default under the Ground Lease, or any termination,
surrender, cancellation, forfeiture, subordination or impairment thereof.
Grantor does hereby authorize and irrevocably appoint and constitute Grantee as
its true and lawful attorney-in-fact, which appointment is coupled with an
interest, in its name, place and stead, to take any and all actions deemed
necessary or desirable by Grantee to perform and comply with all the obligations
of Grantor under the Ground Lease, and to do and take upon the occurrence and
during continuation of an Event of Default, but without any obligation so to do
or take, any action which Grantee deems reasonably necessary to prevent or cure
any default by Grantor under the Ground Lease, to enter into and upon the Real
Property and Improvements or any part thereof as provided in the Secured Debt
Documents in order to prevent or cure any default of Grantor pursuant thereto,
to the end that the rights of Grantor in and to the leasehold estate created by
the Ground Lease shall be kept free from default.
2.12.3 Grantor shall use all reasonable efforts to enforce the
obligations of the lessor under the Ground Lease in a commercially reasonable
manner.
2.12.4 Grantor shall not voluntarily surrender its leasehold estate
and interest under the Ground Lease or modify, change, supplement, alter or
amend the Ground Lease or affirmatively waive any provisions thereof, either
orally or in writing, except as permitted in the Secured Debt Documents, and any
attempt on the part of Grantor to do any of the foregoing without the written
consent of Grantee shall be null and void.
2.12.5 If any action or proceeding shall be instituted to evict
Grantor or to recover possession of the Mortgaged Property or any part thereof
or interest therein from Grantor or any action or proceeding otherwise affecting
the Mortgaged Property or this Security Deed shall be instituted, then Grantor
shall, immediately after receipt, deliver to Grantee a true and complete copy of
each petition, summons, complaint, notice of motion, order to show cause and all
other pleadings and papers, however designated, served in any such action or
proceeding.
2.12.6 Grantor covenants and agrees that the fee title to the Real
Property and Improvements and the leasehold estate created under the Ground
Lease shall not merge but shall always remain separate and distinct,
notwithstanding the union of said estates either in Grantor or a third party by
purchase or otherwise and, in case Grantor acquires the fee title or any other
estate, title or interest in and to the Real Property and Improvements, the lien
of this Security Deed shall, without further conveyance, simultaneously with
such acquisition, be spread to cover
11
and attach to such acquired estate and as so spread and attached shall be prior
to the lien of any security deed placed on the acquired estate after the date of
this Security Deed.
2.12.7 No release or forbearance of any of Grantor's obligations
under the Ground Lease by the lessor thereunder, shall release Grantor from any
of its obligations under this Security Deed.
2.12.8 Grantor shall, within ten days after written demand from
Grantee, deliver to Grantee proof of payment of all items that are required to
be paid by Grantor under the Ground Lease, including, without limitation, rent,
taxes, operating expenses and other charges.
2.12.9 The lien of this Security Deed shall attach to all of
Grantor's rights and remedies at any time arising under or pursuant to
bankruptcy or insolvency law, including, without limitation, all of Grantor's
rights to remain in possession of the Mortgaged Property. Grantor shall not
elect to treat the Ground Lease as terminated under bankruptcy or insolvency
law, and any such election shall be void.
2.12.9.1 If pursuant to bankruptcy or insolvency law, Grantor
shall seek to offset against the rent reserved in the Ground Lease the amount of
any damages caused by the nonperformance by the lessor or any other party of any
of their respective obligations thereunder after the rejection by the lessor or
such other party of the Ground Lease under any bankruptcy or insolvency law,
then Grantor shall, prior to effecting such offset, notify Grantee of its intent
to do so, setting forth the amount proposed to be so offset and the basis
therefor. Grantee shall have the right to object to all or any part of such
offset that, in the reasonable judgment of Grantee, would constitute a breach of
the Ground Lease, and in the event of such objection, Grantor shall not effect
any offset of the amounts found objectionable by Grantee. Neither Grantee's
failure to object as aforesaid nor any objection relating to such offset shall
constitute an approval of any such offset by Grantee.
2.12.9.2 If any action, proceeding, motion or notice shall be
commenced or filed in respect of the lessor under the Ground Lease or any other
party or in respect of the Ground Lease in connection with any case under any
bankruptcy or insolvency law, then Grantee shall have the option to intervene in
any such litigation with counsel of Grantee's choice. Grantee may proceed in its
own name in connection with any such litigation, and Grantor agrees to execute
any and all powers, authorizations, consents or other documents required by
Grantee in connection therewith.
2.12.9.3 Grantor shall, after obtaining knowledge thereof,
promptly notify Grantee of any filing by or against the lessor or other party
with an interest in the Mortgaged Property of a petition under any bankruptcy or
insolvency law. Grantor shall promptly deliver to Grantee, following receipt,
copies of any and all notices, summonses, pleadings, applications and other
documents received by Grantor in connection with any such petition and any
proceedings relating thereto.
2.12.9.4 If there shall be filed by or against Grantor a
petition under any bankruptcy or insolvency law, and Grantor, as lessee under
the Ground Lease, shall determine to
12
reject the Ground Lease pursuant to any bankruptcy or insolvency law, then
Grantor shall give Grantee a notice of the date on which Grantor shall apply to
the bankruptcy court for authority to reject the Ground Lease (such notice to be
no later than twenty (20) days prior to such date). Grantee shall have the
right, but not the obligation, to serve upon Grantor at any time prior to the
date on which Grantor shall so apply to the bankruptcy court a notice stating
that Grantee demands that Grantor assume and assign the Ground Lease to Grantee
pursuant to any bankruptcy or insolvency law. If Grantee shall serve upon
Grantor the notice described in the preceding sentence, to the extent permitted
by law or Governmental Authority, Grantor shall not seek to reject the Ground
Lease and shall comply with the demand provided for in the preceding sentence.
In addition, effective upon the entry of an order for relief with respect to
Grantor under any bankruptcy or insolvency law, Grantor hereby assigns and
transfers to Grantee a non-exclusive right to apply to the bankruptcy court
under any bankruptcy or insolvency law for an order extending the period during
which the Ground Lease may be rejected or assumed; and shall (a) promptly notify
Grantee of any default by Grantor in the performance or observance of any of the
terms, covenants or conditions on the part of Grantor to be performed or
observed under the Ground Lease and of the giving of any written notice by the
lessor thereunder to Grantor of any such default, and (b) promptly cause a copy
of each written notice given to Grantor by the lessor under the Ground Lease to
be delivered to Grantee. Grantee may rely on any notice received by it from any
such lessor of any default by Grantor under the Ground Lease and may take such
action as may be permitted by law or Governmental Authority to cure such default
even though the existence of such default or the nature thereof shall be
questioned or denied by Grantor or by any Person on its behalf.
2.13 Power of Attorney. Grantor does hereby irrevocably constitute and
appoint Grantee, its true and lawful attorney (which appointment is coupled with
an interest), with full power of substitution, for Grantor and in the name,
place and stead of Grantor or in Grantee's own name, for so long as any of the
Obligations are outstanding, to ask, demand, collect, receive, receipt for and
sue for any and all rents, income and other sums which are assigned hereunder
with full power to endorse the name of Grantor on all instruments given in
payment or in part payment thereof, to settle, adjust or compromise any claims
thereunder as fully as Grantor itself could do and file any claim or take any
action or proceeding, either in its own name or in the name of Grantor or
otherwise, as are necessary or appropriate to protect and preserve the right,
title and interest of Grantee in and to such rents, income and other sums and
the security intended to be afforded hereby; provided that Grantee shall not
exercise such rights unless an Event of Default has occurred and is continuing.
2.14 Covenant to Pay. If an Event of Default has occurred and is
continuing and such Event of Default could reasonably be expected to materially
and adversely affect Grantee's interest hereunder in the Mortgaged Property or
result in personal injury, then Grantee, among its other rights and remedies,
shall have the right, but not the obligation, to pay, observe or perform the
same, in whole or in part, and with such modifications as Grantee reasonably
shall deem advisable. To the extent provided in the Secured Debt Documents, all
sums, including, without limitation, reasonable attorneys fees, so expended or
incurred by Grantee by reason of the default of Grantor, or by reason of the
bankruptcy or insolvency of Grantor, as well as, without limitation, sums
expended or incurred to sustain the lien or estate of this Security Deed or its
priority, or to protect or enforce any rights of Grantee hereunder, or to
recover any of the Obligations, or to complete construction of the Project for
which the Secured Debt Documents are intended as financing, or for repairs,
13
maintenance, alterations, replacements or improvements thereto or for the
protection thereof, or for real estate taxes or other governmental assessments
or charges against any part of the Mortgaged Property, or premiums for insurance
of the Mortgaged Property, shall be entitled to the benefit of the lien on the
Mortgaged Property as of the date of the recording of this Security Deed, shall
be deemed to be added to and be part of the Obligations secured hereby, whether
or not the result thereof causes the total amount of the Obligations to exceed
the stated amount set forth in the second introductory paragraph of this
Security Deed, and shall be repaid by Grantor as provided in the Secured Debt
Documents.
2.15 Security Agreement.
2.15.1 This Security Deed shall also be a security agreement between
Grantor and Grantee covering the Mortgaged Property constituting personal
property or fixtures (hereinafter collectively called "UCC Collateral") governed
by the UCC in effect in the State as the same may be more specifically set forth
in any financing statement delivered in connection with this Security Deed, and
as further security for the payment and performance of the Obligations, Grantor
hereby grants to Grantee a security interest in such portion of the Mortgaged
Property to the full extent that the Mortgaged Property may be subject to the
UCC. In addition to Grantee's other rights hereunder, Grantee shall have all
rights of a secured party under the UCC. Grantor shall execute and deliver to
Grantee all financing statements and such further assurances that may be
required to establish, create, perfect (to the extent the same can be achieved
by the filing of a financing statement) and maintain the validity and priority
of Grantee's security interests, and Grantor shall bear all reasonable costs
thereof, including all UCC searches. Except as otherwise provided in the Secured
Debt Documents, if Grantee should dispose of any of the Mortgaged Property
comprising the UCC Collateral pursuant to the UCC, ten (10) days prior written
notice by Grantee to Grantor shall be deemed to be reasonable notice; provided,
however, Grantee may dispose of such property in accordance with the foreclosure
procedures of this Security Deed in lieu of proceeding under the UCC. Grantee
may, but shall not be obligated to, from time to time, execute and deliver at
Grantor's expense, all continuation statements, termination statements,
amendments, partial releases, or other instruments relating to all financing
statements by and between Grantor and Grantee. Except as otherwise provided in
the Secured Debt Documents, if an Event of Default shall occur and is
continuing, (a) Grantee, in addition to any other rights and remedies which it
may have, may exercise immediately and without demand to the extent permitted by
law, any and all rights and remedies granted to a secured party under the UCC
including, without limiting the generality of the foregoing, the right to take
possession of the UCC Collateral or any part thereof, and to take such other
measures as may be necessary for the care, protection and preservation of such
collateral and (b) upon request or demand of Grantee, Grantor shall at its
expense, assemble the UCC Collateral and make it available to Grantee at a
convenient place acceptable to Grantee. Grantor shall pay to Grantee on demand,
any and all expenses, including reasonable attorneys' fees and disbursements
incurred or paid by Grantee in protecting the interest in the UCC Collateral and
in enforcing the rights hereunder with respect to such UCC Collateral.
2.15.2 Grantor agrees, to the extent permitted by law, that: (i) all
or a part of the Mortgaged Property are or are to become fixtures; and (ii) the
address of Grantor is as set forth on the first page of this Security Deed.
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ARTICLE 3 - REMEDIES
3.1 Protective Advances. If an Event of Default shall have occurred and is
continuing, then without thereby limiting Grantee's other rights or remedies,
waiving or releasing any of Grantor's obligations, or imposing any obligation on
Grantee, Grantee may, but shall not be obligated to, either advance any amount
owing or perform any or all actions as may be necessary or appropriate to cure
such default. All such advances shall constitute "Protective Advances." No sums
advanced or performance rendered by Grantee shall cure, or be deemed a waiver of
any Event of Default.
3.2 Institution of Equity Proceedings. If an Event of Default occurs and
is continuing, Grantee may institute an action, suit or proceeding in equity for
specific performance of this Security Deed or any other Secured Debt Document,
all of which shall be specifically enforceable by injunction or other equitable
remedy.
3.3 Grantee's Power of Enforcement.
3.3.1 If an Event of Default shall have occurred, Grantee may, but
shall not be obligated to, sell the Mortgaged Property or any part of the
Mortgaged Property at public sale or sales before the door of the courthouse of
the county in which the Mortgaged Property or any part of the Mortgaged Property
is situated, to the highest bidder for cash, in order to pay the indebtedness
secured hereby and accrued interest thereon and insurance premiums, liens,
assessments, taxes and charges, including utility charges, if any, with accrued
interest thereon, and all expenses of the sale and of all proceedings in
connection therewith, including reasonable attorneys' fees actually incurred,
after advertising the time, place and terms of sale once a week for four (4)
weeks immediately preceding such sale (but without regard to the number of days)
in a newspaper in which Sheriff's sales are advertised in said county. At any
such public sale, Grantee may, but shall not be obligated to, execute and
deliver to the purchaser a conveyance of the Mortgaged Property or any part of
the Mortgaged Property in fee simple, with full warranties of title (or without
warranties if Grantee shall so elect) and to this end, Grantor hereby
constitutes and appoints Grantee the agent and attorney-in-fact of Grantor to
make such sale and conveyance, and thereby to divest Grantor of all right,
title, interest, equity and equity of redemption that Grantor may have in and to
the Mortgaged Property and to vest the same in the purchaser or purchasers at
such sale or sales, and all the acts and doings of said agent and
attorney-in-fact are hereby ratified and confirmed and any recitals in said
conveyance or conveyances as to facts essential to a valid sale shall be binding
upon Grantor. The aforesaid power of sale and agency hereby granted are coupled
with an interest and are irrevocable by dissolution, insolvency or otherwise,
are granted as cumulative of the other remedies provided hereby or by law for
collection of the indebtedness secured hereby and shall not be exhausted by one
exercise thereof but may be exercised until full payment of all indebtedness
secured hereby. In the event of any such foreclosure sale by Grantee, Grantor
shall be deemed a tenant holding over and shall forthwith deliver possession to
the purchaser or purchasers at such sale or be summarily dispossessed according
to provisions of law applicable to tenants holding over.
3.3.2 Grantee may adjourn from time to time any sale by it to be
made under or by virtue of this Security Deed by announcement at the time and
place appointed for such sale or
15
for such adjourned sale or sales; and, except as otherwise provided by any
applicable provision of law, Grantee, without further notice or publication, may
make such sale at the time and place to which the same shall be so adjourned.
3.3.3 Upon any sale made under or by virtue of this Section 3.3
(whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale),
Grantee may bid for and acquire the Mortgaged Property or any part thereof and
in lieu of paying cash therefor may make settlement for the purchase price by
crediting upon the indebtedness the net sales price after deducting therefrom
the expenses of the sale and the costs of the action and any other sums which
Grantee is authorized to deduct under this Security Deed.
3.3.4 No recovery of any judgment by Grantee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Grantor shall affect in any manner or to any extent, the lien and
title of this Security Deed upon the Mortgaged Property or any part thereof, or
any liens, titles, rights, powers or remedies of Grantee hereunder, but such
liens, titles, rights, powers and remedies of Grantee shall continue unimpaired
as before.
3.3.5 Grantee is authorized, but shall not be obligated, to
foreclose this Security Deed subject to the rights of any tenants of the
Mortgaged Property, and the failure to make any such tenants parties to any such
foreclosure proceedings and to foreclose their rights will not be, nor be
asserted to be by Grantor, a defense to any proceedings instituted by Grantee to
collect the sums secured hereby.
3.3.6 After deducting all costs, fees and expenses of Grantee and of
this Security Deed, including, without limitation, costs of evidence of title
and reasonable attorneys' fees of Grantee in connection with a sale, Grantee
shall apply the proceeds of such sale to payment of all sums expended under the
terms hereof not then repaid, with accrued interest at the Default Rate then to
the payment of all other sums then secured hereby and the remainder, if any, to
the person or persons legally entitled thereto.
3.3.7 If any Event of Default occurs and is continuing, Grantee may,
either with or without entry or taking possession of the Mortgaged Property, and
without regard to whether or not the indebtedness and other sums secured hereby
shall be due and without prejudice to the right of Grantee thereafter to bring
an action or proceeding to foreclose or any other action for any default
existing at the time such earlier action was commenced, proceed by any
appropriate action or proceeding: (1) to enforce payment of the Obligations, to
the extent permitted by law, or the performance of any term hereof or any other
right; (2) to foreclose this Security Deed in any manner provided by law for the
foreclosure of mortgages or deeds of trust or deeds to secure debt on real
property and to sell, as an entirety or in separate lots or parcels, the
Mortgaged Property or any portion thereof pursuant to the laws of the State or
under the judgment or decree of a court or courts of competent jurisdiction, and
Grantee shall be entitled to recover in any such proceeding all costs and
expenses incident thereto, including reasonable attorneys' fees in such amount
as shall be awarded by the court; (3) to exercise any or all of the rights and
remedies available to it under the Secured Debt Documents; and (4) to pursue any
other remedy available
16
to it. Grantee may take action either by such proceedings or by the exercise of
its powers with respect to entry or taking possession, or both, as Grantee may
determine.
3.3.8 The remedies described in this Section 3.3 may be exercised
with respect to all or any portion of the UCC Collateral, either simultaneously
with the sale of any real property encumbered hereby or independent thereof.
Grantee may at any time be permitted to proceed with respect to all or any
portion of the UCC Collateral in any manner permitted by the UCC. Grantor agrees
that Grantee's inclusion of all or any portion of the UCC Collateral in a sale
or other remedy exercised with respect to the real property encumbered hereby,
as permitted by the UCC, is a commercially reasonable disposition of such
property.
3.4 Grantee's Right to Enter and Take Possession, Operate and Apply
Income.
(a) If an Event of Default occurs and is continuing, Grantor, upon
demand of Grantee, shall forthwith surrender to Grantee the actual possession
and, if and to the extent permitted by law, Grantee itself, or by such officers
or agents as it may appoint, may enter and take possession of all of the
Mortgaged Property, including the Tangible Collateral, without liability for
trespass, damages or otherwise, and may exclude Grantor and its agents and
employees wholly therefrom and may have joint access with Grantor to the books,
papers and accounts of Grantor.
(b) If an Event of Default has occurred and is continuing and
Grantor shall for any reason fail to surrender or deliver the Mortgaged Property
or any part thereof after Grantee's demand, Grantee may obtain a judgment or
decree conferring on Grantee the right to immediate possession or requiring
Grantor to deliver immediate possession of all or part of such property to
Grantee and Grantor hereby specifically consents to the entry of such judgment
or decree. Grantor shall pay to Grantee, upon demand, all costs and expenses of
obtaining such judgment or decree and reasonable compensation to Grantee, its
attorneys and agents, and all such costs, expenses and compensation shall, until
paid, be secured by the lien, security title and security interest of this
Security Deed.
(c) Upon every such entering upon or taking of possession, Grantee
may hold, store, use, operate, manage and control the Mortgaged Property and
conduct the business thereof, and, from time to time and without being under any
duty to so act:
(1) make all necessary and proper maintenance, repairs,
renewals and replacements thereto and thereon, and all necessary additions,
betterments and improvements thereto and thereon and purchase or otherwise
acquire fixtures, personalty and other property in connection therewith;
(2) insure or keep the Mortgaged Property insured;
(3) manage and operate the Mortgaged Property and exercise all
the rights and powers of Grantor in their name or otherwise with respect to the
same;
(4) enter into agreements with others to exercise the powers
herein granted Grantee, all as Grantee from time to time may determine; and
shall apply the monies so received by Grantee in such priority as provided by
the Secured Debt Documents to (1) the payment
17
of interest and principal due and payable to the Grantee, (2) the deposits for
taxes and assessments and insurance premiums due, (3) the cost of insurance,
taxes, assessments and other proper charges upon the Mortgaged Property or any
part thereof; (4) the compensation, expenses and disbursements of the agents,
attorneys and other representatives of Grantee as allowed under this Security
Deed; and (5) any other charges or costs required to be paid by Grantor under
the terms of the Secured Debt Documents.
(5) rent or sublet the Mortgaged Property or any portion
thereof for any purpose permitted by this Security Deed.
Grantee shall surrender possession of the Mortgaged Property to
Grantor (i) as may be required by law or court order, or (ii) when all amounts
under any of the terms of the Secured Debt Documents, including this Security
Deed, shall have been paid current and all Events of Default have been cured or
waived. The same right of taking possession, however, shall exist if any
subsequent Event of Default shall occur and be continuing.
3.5 Separate Sales. To the extent permitted by law or Governmental Rule,
the Mortgaged Property may be sold in one or more parcels and in such manner and
order as Grantee, in its sole discretion, may elect, it being expressly
understood and agreed that the right of sale arising out of any Event of Default
shall not be exhausted by any one or more sales.
3.6 Waiver of Appraisement, Moratorium, Valuation, Stay, Extension and
Redemption Laws. Grantor agrees to the full extent permitted by law that if an
Event of Default occurs and is continuing, neither Grantor nor anyone claiming
through or under it shall or will set up, claim or seek to take advantage of any
appraisement, moratorium, valuation, stay, extension or redemption laws now or
hereafter in force, in order to prevent or hinder the enforcement or foreclosure
of this Security Deed or the absolute sale of the Mortgaged Property or any
portion thereof or the final and absolute putting into possession thereof,
immediately after such sale, of the purchasers thereof, and Grantor for itself
and all who may at any time claim through or under it, hereby waives, to the
full extent that it may lawfully so do, the benefit of all such laws, and any
and all right to have the assets comprising the Mortgaged Property marshaled
upon any foreclosure of the lien hereof and agrees that Grantee or any court
having jurisdiction to foreclose such lien may sell the Mortgaged Property in
part or as an entirety.
3.7 Receiver. If an Event of Default occurs and is continuing, Grantee, to
the extent permitted by law, and without regard to the value, adequacy or
occupancy of the security for the indebtedness and other sums secured hereby,
shall be entitled as a matter of right, but shall not be obligated to, if it so
elects to the appointment of a receiver to enter upon and take possession of the
Mortgaged Property and to collect all earnings, revenues and receipts and apply
the same as the court may direct, and such receiver may be appointed by any
court of competent jurisdiction upon application by Grantee. To the extent
permitted by law, Grantee may have a receiver appointed without notice to
Grantor or any third party, and Grantee may waive any requirement that the
receiver post a bond. To the extent permitted by law, Grantee shall have the
power to designate and select the Person who shall serve as the receiver and to
negotiate all terms and conditions under which such receiver shall serve. To the
extent permitted by law, any receiver appointed on Grantee's behalf may be an
Affiliate of Grantee. The reasonable expenses, including receiver's
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fees, reasonable attorneys' fees, costs and agents' compensation, incurred
pursuant to the powers herein contained shall be secured by this Security Deed.
The right to enter and take possession of and to manage and operate the
Mortgaged Property and to collect all earnings, revenues and receipts, whether
by a receiver or otherwise, shall be cumulative to any other right or remedy
available to Grantee under this Security Deed, the other Secured Debt Documents
or otherwise available to Grantee and may be exercised concurrently therewith or
independently thereof, but such rights shall be exercised in a manner which is
otherwise in accordance with and consistent with the Secured Debt Documents.
Grantee shall be liable to account only for such earnings, revenues and receipts
(including, without limitation, security deposits) actually received by Grantee,
whether received pursuant to this section or any other provision hereof.
Notwithstanding the appointment of any receiver or other custodian, Grantee
shall be entitled as pledgee to the possession and control of any cash,
deposits, or instruments at the time held by, or payable or deliverable under
the terms of this Security Deed to, Grantee.
3.8 Suits to Protect the Mortgaged Property. Grantee shall have the power
and authority to institute and maintain any suits and proceedings as may be
advisable (a) to prevent any impairment of the Mortgaged Property by any acts
which may be unlawful or in violation of this Security Deed, (b) to preserve or
protect its interest in the Mortgaged Property, or (c) to restrain the
enforcement of or compliance with any legislation or other Legal Requirement
that may be unconstitutional or otherwise invalid, if the enforcement of or
compliance with such enactment, rule or order might impair the security
hereunder or be prejudicial to Grantee's interest
3.9 Proofs of Claim. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings affecting Grantor, any Affiliate or any guarantor, co-maker
or endorser of any of Grantor's obligations, its creditors or its property,
Grantee, to the extent permitted by law, shall be entitled, but not obligated to
file such proofs of claim or other documents as may be necessary or advisable in
order to have its claims allowed in such proceedings for the entire amount due
and payable by Grantor under the Secured Debt Documents, at the date of the
institution of such proceedings, and for any additional amounts which may become
due and payable by Grantor after such date.
3.10 Grantor to Pay Amounts Secured Hereby on Any Default in Payment;
Application of Monies by Grantee.
(a) In case of a foreclosure sale of all or any part of the
Mortgaged Property and of the application of the proceeds of sale to the payment
of the sums secured hereby, to the extent permitted by law, the Secured
Debtholders shall be entitled to enforce payment from Grantor of any additional
amounts then remaining due and unpaid and to recover judgment against Grantor
for any portion thereof remaining unpaid, with interest at the Default Rate.
(b) Grantor hereby agrees to the extent permitted by law, that no
recovery of any such judgment by the Secured Debtholders or other action by the
Secured Debtholders and no attachment or levy of any execution upon any of the
Mortgaged Property or any other property shall in any way affect the Lien and
security interest of this Security Deed upon the Mortgaged Property or any part
thereof or any Lien, rights, powers or remedies of Grantee hereunder, but such
Lien, rights, powers and remedies shall continue unimpaired as before.
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(c) Any monies collected or received by Grantee under this Section
3.10 shall be first applied to the payment of compensation, expenses and
disbursements of the agents, attorneys and other representatives of the Grantee
and the Secured Debtholders, and the balance remaining shall be applied as
provided in the Collateral Trustee Agreement.
3.11 Delay or Omission; No Waiver. No delay or omission of Grantee or the
Secured Debtholders to exercise any right, power or remedy upon any Event of
Default shall exhaust or impair any such right, power or remedy or shall be
construed to waive any such Event of Default or to constitute acquiescence
therein. Every right, power and remedy given to Grantee whether contained herein
or in the other Secured Debt Documents or otherwise available to Grantee may be
exercised from time to time and as often as may be deemed expedient by Grantee.
3.12 No Waiver of One Default to Affect Another. No waiver of any defaults
hereunder shall extend to or affect any subsequent or any other defaults then
existing, or impair any rights, powers or remedies consequent thereon. If
Grantee (a) grants forbearance or an extension of time for the payment of any
sums secured hereby; (b) takes other or additional security for the payment
thereof; (c) waives or does not exercise any right granted in this Security Deed
or any other Secured Debt Document; (d) releases any part of the Mortgaged
Property from the lien or security interest of this Security Deed or any other
instrument securing the Obligations; (e) consents to the filing of any map, plat
or replat of the Real Property or any part thereof; (f) consents to the granting
of any easement on the Real Property; or (g) makes or consents to any agreement
changing the terms of this Security Deed or any other Secured Debt Document
subordinating the lien or any charge hereof, no such act or omission shall
release, discharge, modify, change or affect the liability under this Security
Deed or any other Secured Debt Document or otherwise of Grantor, or any
subsequent purchaser of the Mortgaged Property or any part thereof or any maker,
co-signer, surety or guarantor with respect to any other matters not addressed
by such act or omission. No such act or omission shall preclude Grantee from
exercising any right, power or privilege herein granted or intended to be
granted in case of any Event of Default then existing or of any subsequent Event
of Default, nor, except as otherwise expressly provided in an instrument or
instruments executed by Grantee, shall the lien or security interest of this
Security Deed be altered thereby, except to the extent expressly provided in
such acts or omissions. In the event of the sale or transfer by operation of law
or otherwise of all or any part of the Mortgaged Property, Grantee, without
notice to any person, firm or corporation, is hereby authorized and empowered to
deal with any such vendee or transferee with reference to the Mortgaged Property
or the indebtedness secured hereby, or with reference to any of the terms or
conditions hereof, as fully and to the same extent as it might deal with the
original parties hereto and without in any way releasing or discharging any of
the liabilities or undertakings hereunder, or waiving its right to declare such
sale or transfer an Event of Default as provided herein. Notwithstanding
anything to the contrary contained in this Security Deed or any other Secured
Debt Document, (i) in the case of any non-monetary default, Grantee may continue
to accept payments due hereunder without thereby waiving the existence of such
or any other default and (ii) in the case of any monetary Event of Default,
Grantee may accept partial payments of any sums due hereunder without thereby
waiving the existence of such Event of Default if the partial payment is not
sufficient to completely cure such Event of Default.
3.13 Discontinuance of Proceedings; Position of Parties Restored. If
Grantee shall have proceeded to enforce any right or remedy under this Security
Deed by foreclosure, entry of
20
judgment or otherwise and such proceedings shall have been discontinued or
abandoned for any reason, or such proceedings shall have resulted in a final
determination adverse to Grantee, then and in every such case Grantor and
Grantee shall be restored to their former positions and rights hereunder, and
all rights, powers and remedies of Grantee shall continue as if no such
proceedings had occurred or had been taken.
3.14 Remedies Cumulative. Subject to the provisions of Section 4.15
hereof, no right, power or remedy, including without limitation remedies with
respect to any security for the Obligations, conferred upon or reserved to
Grantee by this Security Deed or any other Secured Debt Document is exclusive of
any other right, power or remedy, but each and every such right, power and
remedy shall be cumulative and concurrent and shall be in addition to any other
right, power and remedy given hereunder or under any other Secured Debt
Document, now or hereafter existing at law, in equity or by statute, and Grantee
shall be entitled to resort to such rights, powers, remedies or security as
Grantee may deem advisable.
3.15 Interest After Event of Default. If an Event of Default shall have
occurred and is continuing, all sums outstanding and unpaid under the Secured
Debt Documents, including this Security Deed, may bear interest at the Default
Rate until such Event of Default has been cured. Grantor's obligation to pay
such interest shall be secured by this Security Deed.
3.16 Foreclosure; Expenses of Litigation. If Grantee forecloses,
reasonable attorneys' fees for services in the supervision of said foreclosure
proceeding shall be allowed to the Grantee as part of the foreclosure costs. In
the event of foreclosure of the lien hereof, there shall be allowed and included
as additional indebtedness all reasonable expenditures and expenses which may be
paid or incurred by or on behalf of Grantee for attorneys' fees, appraisers'
fees, outlays for documentary and expert evidence, stenographers' charges,
publication costs, and costs (which may be estimated as to items to be expended
after foreclosure sale or entry of the decree) of procuring all such abstracts
of title, title searches and examinations, title insurance policies and
guarantees, and similar data and assurances with respect to title as are
necessary either to prosecute such suit or to evidence to a bidder at any sale
which may be had pursuant to such decree the true condition of the title to or
the value of the Mortgaged Property or any portion thereof. All expenditures and
expenses of the nature in this section mentioned, and such expenses and fees as
may be incurred in the protection of the Mortgaged Property and the maintenance
of the lien and security interest of this Security Deed, including the
reasonable fees of any attorney employed by Grantee in any litigation or
proceeding affecting this Security Deed or any other Secured Debt Document, the
Mortgaged Property or any portion thereof, including, without limitation, civil,
probate, appellate and bankruptcy proceedings, or in preparation for the
commencement or defense of any proceeding or threatened suit or proceeding,
shall be immediately due and payable by Grantor, with interest thereon at the
Default Rate, and shall be secured by this Security Deed. Grantee waives its
right to any statutory fee in connection with any judicial or nonjudicial
foreclosure of the lien hereof and agrees to accept a reasonable fee for such
services.
3.17 Deficiency Judgments. If after foreclosure of this Security Deed,
there shall remain any deficiency with respect to any amounts payable under the
Secured Debt Documents, including hereunder, or any amounts secured hereby, and
Grantee may institute any proceedings to recover such deficiency or
deficiencies, all such amounts shall continue to bear interest at the Default
Rate.
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Grantor waives any defense to Grantee's recovery against Grantor of any
deficiency after any foreclosure sale of the Mortgaged Property. To the extent
permitted by law, Grantor expressly waives any defense or benefits that may be
derived from any statute granting Grantor any defense to any such recovery by
Grantee. In addition, Grantee shall be entitled to recovery of all of its
reasonable costs and expenditures (including without limitation any court
imposed costs) in connection with such proceedings, including their reasonable
attorneys' fees, appraisal fees and the other costs, fees and expenditures
referred to in Section 3.16 above. This provision shall survive any foreclosure
or sale of the Mortgaged Property, any portion thereof and/or the extinguishment
of the lien hereof.
3.18 Waiver of Jury Trial. Grantee and Grantor each waive any right to
have a jury participate in resolving any dispute whether sounding in contract,
tort or otherwise arising out of, connected with, related to or incidental to
the relationship established between them in connection with this Security Deed
or any other Secured Debt Document. Any such disputes shall be resolved in a
bench trial without a jury.
3.19 Exculpation of Grantee. The acceptance by Grantee of the assignment
contained herein with all of the rights, powers, privileges and authority
created hereby shall not, prior to entry upon and taking possession of the
Mortgaged Property by Grantee, be deemed or construed to make Grantee a
"mortgagee in possession"; nor thereafter or at any time or in any event
obligate Grantee to appear in or defend any action or proceeding relating to the
Mortgaged Property, nor shall Grantee, prior to such entry and taking, be liable
in any way for any injury or damage to person or property sustained by any
Person in or about the Mortgaged Property.
ARTICLE 4 - GENERAL
4.1 Discharge. When all of the Obligations shall have been paid in full,
then this Security Deed and the lien and security interest created hereby shall
be of no further force and effect, Grantor shall be released from the covenants,
agreements and obligations of Grantor contained in this Security Deed and all
right, title and interest in and to the Mortgaged Property shall revert to
Grantor. Grantee, at the request and the expense of Grantor, shall promptly
execute a deed of reconveyance and such other documents as may be reasonably
requested by Grantor to evidence the discharge and satisfaction of this Security
Deed and the release of Grantor from its obligations hereunder.
4.2 No Waiver. The exercise of the privileges granted in this Security
Deed to perform Grantor's obligations under the agreements which constitute the
Mortgaged Property shall in no event be considered or constitute a waiver of any
right which Grantee may have at any time, after an Event of Default shall have
occurred and be continuing, to declare the Obligations to be immediately due and
payable. No delay or omission to exercise any right, remedy or power accruing
upon any default shall impair any such right, remedy or power or shall be
construed to be a waiver of any such default or acquiescence therein; and every
such right, remedy and power may be exercised from time to time and as often as
may be deemed expedient.
4.3 Extension, Rearrangement or Renewal of Obligations. It is expressly
agreed that any of the Obligations at any time secured hereby may be from time
to time extended for any
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period, or with the consent of Grantor rearranged or renewed, and that any part
of the security herein described, or any other security for the Obligations, may
be waived or released, without altering, varying or diminishing the force,
effect or lien or security interest of this Security Deed; and the lien and
security interest granted by this Security Deed shall continue as a prior lien
and security interest on all of the Mortgaged Property not expressly so
released, until the Obligations are fully paid and this Security Deed is
terminated in accordance with the provisions hereof; and no other security now
existing or hereafter taken to secure the payment of the Obligations or any part
thereof or the performance of any obligation or liability of Grantor whatever
shall in any manner impair or affect the security given by this Security Deed;
and all security for the payment of the Obligations or any part thereof and the
performance of any obligation or liability shall be taken, considered and held
as cumulative.
4.4 Forcible Detainer. Grantor agrees for itself and all Persons claiming
by, through or under it, that subsequent to foreclosure hereunder in accordance
with this Security Deed and applicable law if Grantor shall hold possession of
the Mortgaged Property or any part thereof, Grantor or the Persons so holding
possession shall be guilty of trespass; and any such Person (including Grantor)
failing or refusing to surrender possession upon demand shall be guilty of
forcible detainer and shall be liable to Grantee or any purchaser in
foreclosure, as applicable, for reasonable rental on said premises, and shall be
subject to eviction and removal in accordance with law.
4.5 Waiver of Stay or Extension. To the extent permitted to be waived by
law, Grantor shall not at any time insist upon or plead or in any manner
whatever claim the benefit or advantage of any stay, extension or moratorium law
now or at any time hereafter in force in any locality where the Mortgaged
Property or any part thereof may or shall be situated, nor shall Grantor claim
any benefit or advantage from any law now or hereafter in force providing for
the valuation or appraisement of the Mortgaged Property or any part thereof
prior to any sale thereof to be made pursuant to any provision of this Security
Deed or to a decree of any court of competent jurisdiction, nor after any such
sale shall Grantor claim or exercise any right conferred by any law now or at
any time hereafter in force to redeem the Mortgaged Property so sold or any part
thereof; and Grantor hereby expressly waives all benefit or advantage of any
such law or laws and the appraisement of the Mortgaged Property or any part
thereof, and covenants that Grantor shall not hinder or delay the execution of
any power herein granted and delegated to Grantee but that Grantor shall permit
the execution of every such power as though no such law had been made.
4.6 Notices. Except where certified or registered mail notice is required
by applicable law, any notice to Grantor or Grantee required or permitted
hereunder shall be deemed to be given when given in the manner prescribed in the
Collateral Trust Agreement.
4.7 Severability. All rights, powers and remedies provided herein may be
exercised only to the extent that the exercise thereof does not violate any
applicable law, and are intended to be limited to the extent necessary so that
they will not render this Security Deed invalid, unenforceable or not entitled
to be recorded, registered or filed under any applicable law. In the event any
term or provision contained in this Security Deed is in conflict, or may
hereafter be held to be in conflict, with the laws of the State or of the United
States of America, this Security Deed
23
shall be affected only as to such particular term or provision, and shall in all
other respects remain in full force and effect.
4.8 Application of Payments. In the event that any part of the Obligations
cannot lawfully be secured hereby, or in the event that the lien and security
interest hereof cannot be lawfully enforced to pay any part of the Obligations,
or in the event that the lien or security interest created by this Security Deed
shall be invalid or unenforceable as to any part of the Obligations, then all
payments on the Obligations shall be deemed to have been first applied to the
complete payment and liquidation of that part of the Obligations which is not
secured by this Security Deed and the unsecured portion of the Obligations shall
be completely paid and liquidated prior to the payment and liquidation of the
remaining secured portion of the Obligations.
4.9 GOVERNING LAW. THIS SECURITY DEED IS GOVERNED BY AND SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.
4.10 Amendments. This Security Deed may be amended, supplemented or
otherwise modified only by an instrument in writing signed by Grantor and
Grantee.
4.11 Successors and Assigns. All terms of this Security Deed shall run
with the land and bind each of Grantor and Grantee and their respective
successors and assigns, and all Persons claiming under or through Grantor or
Grantee, as the case may be, or any such successor or assign, and shall inure to
the benefit of Grantee and Grantor, and their respective successors and assigns.
4.12 Renewal, Etc. To the extent permitted under the other Secured Debt
Documents, Grantee may, but shall not be obligated to, at any time and from time
to time renew or extend this Security Deed, or alter or modify the same in any
way, or waive any of the terms, covenants or conditions hereof in whole or in
part and may release any portion of the Mortgaged Property or any other
security, and grant such extensions and indulgences in relation to the
Obligations as Grantee may determine, without the consent of any junior lienor
or encumbrancer and without any obligation to give notice of any kind thereto
and without in any manner affecting the priority of the lien and security
interest hereof on any part of the Mortgaged Property; provided that nothing in
this Section 4.12 shall grant Grantee the right to alter or modify the Security
Deed without the consent of the Grantor unless otherwise specifically permitted
in this Security Deed.
4.13 Future Advances. It is understood and agreed that this Security Deed
secures, among other things, (i) the Priority Lien Debt (including future
advances to be made with respect thereto), and all other Obligations of Grantor
under the Priority Lien Documents; (ii) the Parity Lien Debt (including future
advances to be made with respect thereto), and all other Obligations of Grantor
under the Parity Lien Documents; (iii) all Obligations under any other Priority
Lien Debt or Parity Lien Debt; (iv) any sums advanced or expenses or costs
incurred by Grantee or any Secured Debtholder, or by any receiver appointed
hereunder, which are made or incurred pursuant to, or permitted by, the terms
hereof, plus interest thereon at the rate therein specified or otherwise agreed
upon, from the date of the advances or the incurring of such expenses or costs
until reimbursed; (v) any and all other indebtedness of Grantor to Grantee now
or hereafter owing, whether direct or indirect, primary or secondary, fixed or
contingent, joint or several, regardless of how evidenced or
24
arising, where the indebtedness provides that it is secured hereby; and (vi) any
extensions, refinancings, modifications or renewals of all such indebtedness
described in subparagraphs (i) through (iv) above, whether or not Grantor
executes any extension agreement or renewal instrument, and that the lien of any
such future advances shall relate to the date of this Security Deed.
4.14 Liability. Notwithstanding any provision in this Security Deed to the
contrary, none of Grantee or any Secured Debt Representative or any of their
agents shall be liable for any error of judgment or act done in good faith, or
be otherwise responsible or accountable under any circumstances whatsoever. None
of Grantee or any Secured Debt Representative or any of their agents shall be
personally liable in case of entry by them, or anyone entering by virtue of the
powers herein granted them, upon the Mortgaged Property for debts contracted or
liability or damages incurred in the management or operation of the Mortgaged
Property. Such persons shall have the right to rely on any instrument, document
or signature authorizing or supporting any action taken or proposed to be taken
by them hereunder, believed by them in good faith to be genuine. Grantee or any
Secured Debt Representative or any of their agents shall be entitled to
reimbursement for expenses incurred by them in the performance of their duties
hereunder and to reasonable compensation for such of their services hereunder as
shall be rendered. Grantor will, from time to time, pay the compensation due
hereunder and reimburse such parties for, and save them harmless against, any
and all liability and expenses which may be incurred by them in the performance
of their duties.
4.15 Severability and Compliance With Usury Law. The Secured Debt
Documents are intended to be performed in accordance with, and only to the
extent permitted by, all applicable Applicable Laws and Legal Requirements. If
any provision of any of the Secured Debt Documents or the application thereof to
any person or circumstance shall, for any reason and to any extent, be invalid
or unenforceable, neither the remainder of the instrument in which such
provision is contained, nor the application of such provision to other persons
or circumstances, nor the other instruments referred to hereinabove, shall be
affected thereby, but rather shall be enforceable to the greatest extent
permitted by law. It is expressly stipulated and agreed to be the intent of
Grantor at all times to comply with the applicable State law governing the
maximum rate or amount of interest payable on or in connection with the
Obligations. If the Applicable Law is ever judicially interpreted so as to
render usurious any amount called for under the Secured Debt Documents, or
contracted for, charged, taken, reserved or received with respect to the
extension of credit evidenced by the Secured Debt Documents or if acceleration
of the maturity of the Obligations or if any prepayment by Grantor results in
Grantor having paid any interest in excess of that permitted by law, then it is
Grantor's express intent that all excess amounts theretofore collected by
Grantee be credited on the principal balance due under the Secured Debt
Documents (or, if the Secured Debt Documents have been or would thereby be paid
in full, refunded to Grantor), and the provisions of the Secured Debt Documents
immediately be deemed reformed and the amounts thereafter collectible thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder and thereunder. The right to accelerate
maturity of Obligations does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and Grantee
may not collect any unearned interest in the event of acceleration. All sums
paid or agreed to be paid to Grantee for the use, forbearance or detention of
the Obligations
25
may, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of the Obligations until payment
in full so that the rate or amount of interest on account of the Obligations
does not exceed the applicable usury ceiling.
4.16 Release of Collateral. Notwithstanding any provision herein to the
contrary, the Mortgaged Property or any part thereof shall be released from the
security interest created by this Mortgage in accordance with the provisions of
the Collateral Trust Agreement.
4.17 Time of the Essence. Grantor acknowledges that time is of the essence
in performing all of Grantor's obligations set forth herein.
4.18 Counterpart Execution. This Security Deed may be executed by the
parties hereto in any number of counterparts (and be each of the parties hereof
on separate counterparts), each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute but one and the
same instrument.
4.19 WAIVER OF GRANTOR'S RIGHTS. BY EXECUTION OF THIS SECURITY DEED AND BY
INITIALING THIS SECTION 4.19, GRANTOR EXPRESSLY: (A) ACKNOWLEDGES THE RIGHT TO
ACCELERATE THE INDEBTEDNESS EVIDENCED BY THE NOTES AND THE POWER OF ATTORNEY
GIVEN HEREIN TO GRANTEE TO SELL THE MORTGAGED PROPERTY BY NONJUDICIAL
FORECLOSURE UPON DEFAULT BY GRANTOR WITHOUT ANY JUDICIAL HEARING AND WITHOUT ANY
NOTICE (EXCEPT AS OTHERWISE PROVIDED HEREIN); (B) EXCEPT TO THE EXTENT PROVIDED
OTHERWISE HEREIN, WAIVES ANY AND ALL RIGHTS WHICH GRANTOR MAY HAVE UNDER THE
CONSTITUTION OF THE UNITED STATES (INCLUDING THE FIFTH AND FOURTEENTH AMENDMENTS
THEREOF), THE VARIOUS PROVISIONS OF THE CONSTITUTIONS FOR THE SEVERAL STATES, OR
BY REASON OF ANY OTHER APPLICABLE LAW, TO NOTICE AND TO JUDICIAL HEARING PRIOR
TO THE EXERCISE BY GRANTEE OF ANY RIGHT OR REMEDY HEREIN PROVIDED TO GRANTEE;
(C) ACKNOWLEDGES THAT GRANTOR HAS READ THIS SECURITY DEED AND ITS PROVISIONS
HAVE BEEN EXPLAINED FULLY TO GRANTOR AND GRANTOR HAS CONSULTED WITH COUNSEL OF
GRANTOR'S CHOICE PRIOR TO EXECUTING THIS SECURITY DEED; AND (D) ACKNOWLEDGES
THAT ALL WAIVERS OF THE AFORESAID RIGHTS OF GRANTOR HAVE BEEN MADE KNOWINGLY,
INTENTIONALLY AND WILLINGLY BY GRANTOR AS PART OF A BARGAINED FOR LOAN
TRANSACTION:
INITIALED BY GRANTOR:
______________________________________
By:______________________________
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4.20 Attorneys' Fees. Notwithstanding anything contained herein to the
contrary, (i) "reasonable attorneys' fees" are not, and shall not be, statutory
attorneys' fees under the Official Code of Georgia Annotated ("O.C.G.A"), (ii)
if, under any circumstances Grantor is required hereunder to pay any or all of
Grantee's attorneys' fees and expenses, Grantor shall be responsible only for
actual legal fees and out of pocket expenses actually incurred by Grantee at
customary hourly rates for the work done, and (iii) Grantor shall not be liable
under any circumstances for additional attorneys' fees or expenses under the
O.C.G.A Section 13-1-11.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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AUGUSTA, GA
IN WITNESS WHEREOF, Grantor has caused this Security Deed to be duly
executed under seal and delivered as of the day and year first above written.
Signed, sealed and delivered GRANTOR:
in the presence of:
CALPINE CORPORATION,
______________________________ a Delaware corporation
Witness
By: ___________________________
________________________ Name:
Notary Public Title:
My Commission Expires
________________________
[NOTARY SEAL]
[corporate seal]
AUGUSTA, GA
EXHIBIT A
(LEGAL DESCRIPTION)
AUGUSTA, GA
EXHIBIT B
(ACCESS EASEMENT DESCRIPTION)
All that tract or parcel of land situate, lying in the 86th G.M.D. of
Richmond County, Georgia, designated as "INGRESS-EGRESS EASEMENT (0.99 AC.)" on
a plat dated June 15, 2000 (last revised on October 3, 2001) by Cranston,
Robertson & Whitehurst, P.C. for AUGUSTA ENERGY LLC, AUGUSTA ENERGY CENTER. Said
access easement has a uniform width of Fifty (50') feet and begins on the
Northern boundary of an UNNAMED ROAD (C.R. #1028-having a 60' Right of Way) as
much UNNAMED ROAD is extended in a Westerly direction from its intersection with
Columbia Nitrogen Drive to and over the property now or formerly of DSM
CHEMICALS NORTH AMERICA, INC. and from said Northern boundary extends in a
Southerly direction over said uniform width of Fifty feet to the intersection of
the Northern boundary of the property designated as "COGENERATION PLANT SITE
22.02 AC." on the aforesaid plat to which reference is made by incorporation
herein for a more accurate description of the metes bounds and location of the
said Easement.
LAYDOWN YARD "A" EASEMENT AREA
(GRAVEL AREA=4.16 AC)
All that tract or parcel of land situate, lying and being in the 86th
G.M.D. of Richmond County, Georgia known and designated as "LAYDOWN YARD "A"
EASEMENT AREA" (GRAVEL AREA = 4.16 AC) on a plat dated June 15, 2000 (last
revised on October 3, 2001) by Cranston, Robertson & Whitehurst, P.C. for
AUGUSTA ENERGY LLC, AUGUSTA ENERGY CENTER, to which plat reference is made by
incorporation herein for a more accurate description of the metes, bounds and
location of said Easement.
LAYDOWN YARD "B" EASEMENT AREA
(GRAVEL AREA = 12.80 AC.)
All that tract or parcel of land situate, lying and being in the 86th
G.M.D. of Richmond County, Georgia known and designated as "LAYDOWN YARD "B"
EASEMENT AREA" (GRAVEL AREA = 12.80 AC.) on a plat dated June 15, 2000 (last
revised on October 3, 2001) by Cranston, Robertson & Whitehurst, P.C. for
AUGUSTA ENERGY LLC, AUGUSTA ENERGY CENTER, to which plat reference is made by
incorporation herein for a more accurate description of the metes, bounds and
location of said Easement.
(30' GAS LINE EASEMENT)
All that tract or parcel of land situate lying and being in the 86th
G.M.D. of Richmond County, Georgia known and designated as "Proposed 30' Gas
Line Easement" on a plat dated June 15, 2000 (last revised on October 3, 2001)
by Cranston, Robertson, & Whitehurst, P.C. to which plat reference is made by
incorporation herein for a more accurate description of the
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metes, bounds and location of said Easement. Said Easement is located within the
bounds of that parcel of land shown on the aforesaid plat as "Lay Down Yard "B"
Easement Area" and extends from the southern boundary of the "90' Southern
Natural Gas Easement" in a southerly direction to its intersection with the
northern boundary of the "Cogeneration Plant site 22.02 Ac." all as shown on the
aforesaid plat. The purpose of this easement is to provide access to Natural Gas
supply and service from said pipeline to the Cogeneration Plant to be
constructed on said 22.02 acre tract.
(EASEMENT FOR PIPE RACK)
All that tract or parcel of land situate, lying and being in the 86th
G.M.D. of Richmond County, Georgia, designated as "EASEMENT FOR PIPE RACK" on a
plat dated June 15, 2000 (last revised on October 3, 2001) by Cranston,
Robertson & Whitehurst, P.C. for AUGUSTA ENERGY LLC, AUGUSTA ENERGY CENTER. Said
Easement is 75 feet in width and begins on the Eastern Boundary of the
COGENERATION PLANT SITE-22.02 AC, as shown on the aforesaid plat and extents in
an Easterly Direction to the property of DSM CHEMICALS NORTH AMERICA, INC.
located on the Eastern right of way of. Columbia Nitrogen Drive. Reference is
made to the aforesaid plat which is incorporated herein for a more accurate
description of the metes, bounds and location of said Easement.