EXHIBIT 10.34
DEER PARK - TX
RECORDING REQUESTED BY AND
WHEN RECORDED, RETURN TO:
Ane C. Priester
LATHAM & WATKINS LLP
633 W. FIFTH STREET, SUITE 4000
LOS ANGELES, CALIFORNIA 90017
================================================================================
DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
AND FIXTURE FILING
DATED AS OF JULY 16, 2003
BY
CALPINE CORPORATION,
A DELAWARE CORPORATION,
AS TRUSTOR
TO
MALCOLM S. MORRIS,
AS TRUSTEE
FOR THE BENEFIT OF
BANK OF NEW YORK,
A NEW YORK BANKING CORPORATION,
AS BENEFICIARY
================================================================================
THIS DEED OF TRUST IS GIVEN IN CONNECTION WITH A MULTISTATE
TRANSACTION. THE INDEBTEDNESS SECURED HEREBY IS EVIDENCED BY A PROMISSORY NOTE
EXECUTED OUTSIDE THE STATE OF TEXAS. RECOVERY UNDER THIS DEED OF TRUST IS
LIMITED TO TWO BILLION FIVE HUNDRED MILLION
DOLLARS ($2,500,000,000) IN PRINCIPAL PLUS INTEREST, PROTECTIVE ADVANCES AND
COSTS OF COLLECTION IN CONNECTION THEREWITH.
TABLE OF CONTENTS
Page
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ARTICLE 1 - DEFINITIONS .......................................................................... 4
1.1 DEFINED TERMS ........................................................................... 4
1.2 ACCOUNTING TERMS ........................................................................ 6
ARTICLE 2 - GENERAL COVENANTS AND PROVISIONS ..................................................... 7
2.1 TRUSTOR 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 BENEFICIARY ASSUMES NO OBLIGATIONS ...................................................... 9
2.9 FURTHER ASSURANCES ...................................................................... 10
2.10 ACTS OF TRUSTOR ......................................................................... 10
2.11 AFTER-ACQUIRED PROPERTY ................................................................. 10
2.12 TRUST ESTATE ............................................................................ 10
2.13 POWER OF ATTORNEY ....................................................................... 13
2.14 COVENANT TO PAY ......................................................................... 13
2.15 SECURITY AGREEMENT ...................................................................... 14
ARTICLE 3 - REMEDIES ............................................................................. 14
3.1 ACCELERATION OF MATURITY ................................................................ 14
3.2 PROTECTIVE ADVANCES ..................................................................... 15
3.3 INSTITUTION OF EQUITY PROCEEDINGS ....................................................... 15
3.4 BENEFICIARY'S POWER OF ENFORCEMENT ...................................................... 15
3.5 BENEFICIARY'S RIGHT TO ENTER AND TAKE POSSESSION, OPERATE AND APPLY INCOME .............. 17
3.6 SEPARATE SALES .......................................................................... 18
3.7 WAIVER OF APPRAISEMENT, MORATORIUM, VALUATION, STAY, EXTENSION AND REDEMPTION LAWS ...... 18
3.8 RECEIVER ................................................................................ 18
3.9 SUITS TO PROTECT THE TRUST ESTATE ....................................................... 19
3.10 PROOFS OF CLAIM ......................................................................... 19
3.11 TRUSTOR TO PAY AMOUNTS SECURED HEREBY ON ANY DEFAULT IN PAYMENT; APPLICATION OF
MONIES BY BENEFICIARY ................................................................... 19
3.12 DELAY OR OMISSION; NO WAIVER ............................................................ 20
3.13 NO WAIVER OF ONE DEFAULT TO AFFECT ANOTHER .............................................. 20
3.14 DISCONTINUANCE OF PROCEEDINGS; POSITION OF PARTIES RESTORED ............................. 21
3.15 REMEDIES CUMULATIVE ..................................................................... 21
3.16 INTEREST AFTER EVENT OF DEFAULT ......................................................... 21
3.17 FORECLOSURE; EXPENSES OF LITIGATION ..................................................... 21
3.18 DEFICIENCY JUDGMENTS .................................................................... 22
3.19 WAIVER OF JURY TRIAL .................................................................... 22
3.20 EXCULPATION OF BENEFICIARY .............................................................. 22
3.21 FAIR MARKET VALUE DETERMINATION ......................................................... 22
ARTICLE 4 - GENERAL .............................................................................. 23
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4.1 DISCHARGE ............................................................................... 23
4.2 NO WAIVER ............................................................................... 23
4.3 EXTENSION, REARRANGEMENT OR RENEWAL OF OBLIGATIONS ...................................... 23
4.4 FORCIBLE DETAINER ....................................................................... 24
4.5 WAIVER OF STAY OR EXTENSION ............................................................. 24
4.6 NOTICES ................................................................................. 24
4.7 SEVERABILITY ............................................................................ 24
4.8 APPLICATION OF PAYMENTS ................................................................. 24
4.9 GOVERNING LAW ........................................................................... 25
4.10 ENTIRE AGREEMENT ........................................................................ 25
4.11 AMENDMENTS .............................................................................. 25
4.12 SUCCESSORS AND ASSIGNS .................................................................. 25
4.13 RENEWAL, ETC ............................................................................ 26
4.14 FUTURE ADVANCES ......................................................................... 26
4.15 LIABILITY ............................................................................... 26
4.16 SUCCESSOR TRUSTEE ....................................................................... 27
4.17 ACTIONS OR ADVANCES BY BENEFICIARY OR TRUSTEE ........................................... 27
4.18 SEVERABILITY AND COMPLIANCE WITH USURY LAW .............................................. 27
4.19 RELEASE OF COLLATERAL ................................................................... 28
4.20 TIME OF THE ESSENCE ..................................................................... 28
4.21 COUNTERPART EXECUTION ................................................................... 28
4.22 LANDLORD'S INTEREST IN TRUST ESTATE ..................................................... 28
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DEER PARK - TX
DEED OF TRUST, ASSIGNMENT OF
RENTS AND SECURITY AGREEMENT
AND FIXTURE FILING
This DEED OF TRUST, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT AND FIXTURE
FILING, dated as of July 16, 2003 (this "Deed of Trust") by CALPINE CORPORATION,
a Delaware corporation ("Trustor"), whose address is 50 West San Fernando
Street, San Jose, CA 95113, to MALCOLM S. MORRIS, as trustee ("Trustee"), whose
address is c/o Stewart Title Guaranty Company, 1980 Post Oak Blvd., Suite 110,
Houston, Texas 77056, in favor of 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 Trustor, the 2007 Trustee, the 2010 Trustee, the 2013 Trustee,
Credit Agreement Agent and Term Loan Administrative Agent ("Beneficiary"), whose
address is 101 Barclay Street, New York, New York 10286. References to this
"Deed of Trust" 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. Trustor has entered into an Amended and Restated Credit Agreement
dated as of July 16, 2003 (the "Credit Agreement") among, inter alia, Trustor,
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. Trustor has (a) issued $500,000,000 in aggregate principal amount
of Second Priority Senior Floating Rate Secured Notes due 2007 (the "2007
Notes") pursuant to the Indenture dated as of July 16, 2003 (the "2007
Indenture") between Trustor and Wilmington Trust Company, as Trustee (together
with its successors in such capacity, the "2007 Trustee"), (b) issued
$1,150,000,000 in aggregate principal amount of 8.50% Second Priority Senior
Secured Fixed Rate Notes due 2010 (the "2010 Notes") pursuant to the Indenture
dated as of July 16, 2003 (the "2010 Indenture") between Trustor and Wilmington
Trust Company, as Trustee (together with its successors in such capacity, the
"2010 Trustee"), (c) issued $900,000,000 in aggregate principal amount of 8.75%
Second Priority Senior Secured Fixed Rate Notes due 2013 (the "2013 Notes")
pursuant to the Indenture dated as of July 16, 2003 (the "2013 Indenture")
between Trustor and Wilmington Trust Company, as Trustee (together with its
successors in such capacity, the "2013 Trustee"), and (d) borrowed $750,000,000
in Term Loans (the "Term Loans") pursuant to a Term Loan Agreement dated as of
July 16, 2003 (the "Term Loan Agreement") between Trustor 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, Trustor may
incur future debt which could, together with the obligations under the Credit
Agreement, constitute Priority Lien Debt and Trustor may incur future debt which
could, together with the 2007 Notes, 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. Trustor
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, with liens and security interests in, among other collateral, the Trust
Estate under the Existing Deed of Trust, as contemplated in the Collateral Trust
Agreement.
D. Trustor (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 full performance and prompt and complete
payment and performance when and as due and payable of all of the obligations
and liabilities of Trustor to Beneficiary, 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 the obligations of
Trustor set forth herein (collectively, the "Obligations,") and in consideration
of the covenants herein and therein, Trustor, intending to be legally bound,
does hereby grant, bargain, sell, convey, warrant, assign, transfer, mortgage,
pledge, set-over and confirm unto Trustee, for the use and benefit of
Beneficiary, all of Trustor'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 "Trust Estate"):
(a) Trustor's interest under the Ground Lease and Easement Agreement
(as modified, supplemented or amended from time to time, the "Ground
Lease") executed on March 8, 2001 between Shell Chemical, LP, a Delaware
limited partnership ("Landlord"), as lessor, and Deer Park Energy Center,
L.P., as lessee, 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
Trustor 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
Trustor, or appurtenant to the Site or arising under the Ground Lease, and
any and all sidewalks, alleys, strips and gores of land adjacent thereto
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or used in connection therewith together with all and singular the
tenements, 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 Trustor 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 Trustor)
(the above items, together with the Equipment, being hereinafter
collectively called the "Tangible Collateral");
(f) all rights, powers, privileges and other benefits of Trustor (to
the extent assignable) now or hereafter obtained by Trustor under the
Ground Lease and/or from any Governmental Authority, including, without
limitation, permits issued in the name of Trustor, 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 (hereinafter defined), the Improvements and
the Equipment, and any improvements, modifications or additions thereto;
(g) any right of Trustor 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 Trustor 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 Trustor 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 Trustor, whether as lessor or lessee, in any leases of land hereafter
made and all rights of Trustor 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 Trustor or by anyone on its behalf or with its
consent, or which may come into the possession or be subject to the
control of Trustee or Beneficiary pursuant to this Deed of Trust, being
hereby collaterally assigned to Beneficiary and subjected or added to the
lien or estate created by this Deed of Trust forthwith upon the
acquisition thereof by Trustor, as fully as if such property were now
owned by Trustor and were specifically described in this Deed of Trust and
subjected to the lien and security interest hereof; and Trustee and
Beneficiary are 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
Beneficiary, 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 Deed of Trust.
TO HAVE AND TO HOLD the said Trust Estate, whether now owned or held or
hereafter acquired, unto Beneficiary, its successors and assigns, pursuant to
the provisions of this Deed of Trust.
IT IS HEREBY COVENANTED, DECLARED AND AGREED that the lien, security
title, security interest or estate created by this Deed of Trust 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 Trustor, its legal representatives,
successors or assigns, except only those, if any, expressly hereinafter referred
to and that the Trust Estate is to be held, dealt with and disposed of by
Beneficiary, upon and subject to the terms, covenants, conditions, uses and
agreements set forth in this Deed of Trust.
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 Trustor of its covenants and
agreements set forth herein and therein, then this Deed of Trust and the estate
hereby and therein granted shall be cancelled and surrendered and shall be
reconveyed as provided herein below.
ARTICLE 1 - DEFINITIONS
1.1 DEFINED TERMS. 11 Capitalized terms used in this Deed of Trust 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 Deed of Trust,
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,
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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.
"Leases" has the meaning ascribed to it in Section 2.5.
"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 Trustor, or the Trust Estate,
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) Trustor's presently or
subsequently effective Organic Documents, (iii) any and all Leases (as defined
herein), (iv) any and all leases and other contracts (written or oral) of any
nature to which Trustor, or the Trust Estate may be bound and (v) any and all
restrictions, restrictive covenants or zoning, present and future, as the same
may apply to the Trust Estate.
"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.
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"Permitted Lien" means the liens, easements, 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 Trust Estate; (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 Trust Estate and all rights and remedies of
whatever kind or nature Trustor may hold or acquire for the purpose of securing
or enforcing any obligation due Trustor thereunder.
"Project" means that certain electric and steam production 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 to 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.
"Trust Estate" 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, and the terms "Accounts," "Account Debtor, "As Extracted
Collateral," "Chattel Paper," "Contract Rights," "Deposit Accounts,"
"Documents," "Electronic Chattel Paper," "General Intangibles," "Goods,"
"Equipment," "Fixtures," "Inventory," "Instruments," and "Proceeds" shall have
the respective meanings assigned to such terms in the UCC.
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.
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ARTICLE 2 - GENERAL COVENANTS AND PROVISIONS
2.1 TRUSTOR PERFORMANCE OF SECURED DEBT DOCUMENTS. Trustor 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 Trustor under this Deed of Trust 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. Trustor, to the
best of its knowledge, represents, covenants and warrants that as of the date
hereof: (a) Trustor has good and indefeasible 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) Trustor 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 Beneficiary may,
subject to the Permitted Liens and the terms of the Ground Lease, 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 discussed in the
Secured Debt Documents, all costs arising from construction of any Improvements,
the performance of any labor and the purchase of all Tangible Collateral and
Improvements 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 Trust
Estate has been damaged, destroyed, condemned or abandoned.
2.3 COMPLIANCE WITH LEGAL REQUIREMENTS. Trustor shall promptly comply in
all material respects with all Legal Requirements relating to its use and
occupancy of the Trust Estate, 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
Trust Estate.
2.4 INSURANCE; APPLICATION OF INSURANCE PROCEEDS; APPLICATION OF EMINENT
DOMAIN PROCEEDS.
Trustor 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 Trustor might incur personal
liability for the death of or injury to an employee or third person, or damage
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 Trust Estate, 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
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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 Beneficiary 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 Beneficiary as its interest may appear, which proceeds are hereby
assigned to Beneficiary, it being agreed by Trustor 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 Trust Estate, 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 Obligations; (ii) the coverage of
Beneficiary shall not be terminated, reduced or affected in any manner
regardless of any breach or violation by Trustor 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 Trustor shall have first given Beneficiary and each
Secured Debt Representative thirty (30) days prior written notice thereof; and
(iv) Beneficiary 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. Beneficiary 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 Deed of
Trust are to be issued on forms and by companies and with endorsements as are
customary in the industry. Trustor shall maintain insurance in an amount
sufficient to prevent Trustor from becoming a co-insurer under any policy
required hereunder. If Trustor fails to maintain the level of insurance required
under this Deed of Trust, then Trustor shall and hereby agrees to indemnify
Beneficiary to the extent that a casualty occurs and insurance proceeds would
have been available had such insurance been maintained;
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. Trustor unconditionally and absolutely assigns to
Beneficiary all of Trustor'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
Trust Estate, arising by, through or under Trustor, 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
Trust Estate (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 Beneficiary 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 herein, Beneficiary shall have the
right, power and authority to, but shall not be obligated to: notify any person
that the Leases have been assigned to Beneficiary and that all rents and other
obligations are to be paid directly to Beneficiary, whether or not Beneficiary
has commenced or completed foreclosure or taken possession of the Trust Estate;
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
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defend against any claim with respect to rents and Leases; enter upon, take
possession of and operate the Trust Estate; lease all or any part of the Trust
Estate; and/or perform any and all obligations of Trustor under the Leases and
exercise any and all rights of Trustor therein contained to the full extent of
Trustor's rights and obligations thereunder, with or without the bringing of any
action or the appointment of a receiver. At Beneficiry's request, Trustor shall
deliver a copy of this Deed of Trust to each tenant under a Lease. Trustor
irrevocably directs any tenant, without any requirement for notice to or consent
by Trustor, to comply with all demands of Beneficiary under this Section 2.5 and
to turn over to Beneficiary on demand all rents which it receives. Beneficiary
shall have the right, but not the obligation, to use and apply all rents
received hereunder in such order and such manner as Beneficiary 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, Beneficiary grants to Trustor a revocable license to collect and receive
the rents and to retain, use and enjoy such rents. Such license may be revoked
by Beneficiary only upon the occurrence of any Event of Default. Trustor 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 Trust Estate, 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, Trustor shall remain in
possession of the Real Property demised under the Ground Lease and shall perform
all acts reasonably necessary for Trustor 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 Deed of Trust and the
lien created by this Deed of Trust shall remain in full force and effect and
shall extend automatically to all of Trustor's rights and remedies arising at
any time under, or pursuant to, any bankruptcy or insolvency laws, including all
of Trustor's rights to remain in possession of the Real Property.
2.7 EXPENSES. Trustor shall indemnify Beneficiary with respect to any
transaction or matter in any way connected with any portion of the Trust Estate,
or Trustor's use, occupancy, or operation of the Trust Estate in accordance with
the Collateral Trust Agreement.
2.8 BENEFICIARY ASSUMES NO OBLIGATIONS. It is expressly agreed that,
anything herein contained to the contrary notwithstanding, Trustor shall remain
obligated under all agreements which are included in the definition of "Trust
Estate" and shall perform all of its obligations thereunder in accordance with
the provisions thereof, and neither Beneficiary, Trustee nor any of the Secured
Debtholders shall have any obligation or liability with respect to such
obligations of Trustor, nor shall Beneficiary, Trustee or any of the Secured
Debtholders be required or obligated in any manner to perform or fulfill any
obligations or duties of Trustor under such agreements, or to make any payment
or to make any inquiry as to the nature or sufficiency of any payment received
9
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 Beneficiary hereunder or
to which Beneficiary or the Secured Debtholders may be entitled at any time or
times.
2.9 FURTHER ASSURANCES. Trustor 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 required pursuant to the Collateral Trust Agreement
and/or any Secured Debt Document, in order to perfect and continue the lien and
security interest granted hereby and to enable Beneficiary to obtain the full
benefits of the lien and security interest granted or intended to be granted
hereby. Trustor shall keep the Trust Estate free and clear of all Liens, other
than Permitted Liens. Without limiting the generality of the foregoing, Trustor
shall execute and record or file this Deed of Trust 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 may be
required pursuant to the Collateral Trust Agreement and/or any Secured Debt
Document, in order to perfect and preserve the lien and security interest
granted or purported to be granted hereby. Trustor hereby authorizes Beneficiary
to file one or more financing statements or continuation statements, and
amendments thereto, relative to all or any part of the Trust Estate necessary to
preserve or protect the lien and security interest granted hereby without the
signature of Trustor where permitted by law.
2.10 ACTS OF TRUSTOR. Except as provided in or permitted by the Secured
Debt Documents, Trustor 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 Deed of
Trust shall remain in effect, any of its right, title or interest in and to the
Trust Estate or any part thereof, other than Permitted Liens, to anyone other
than Beneficiary.
2.11 AFTER-ACQUIRED PROPERTY. Any and all of the Trust Estate which is
hereafter acquired shall immediately, without any further conveyance, assignment
or act on the part of Trustor or Beneficiary, become and be subject to the lien
and security interest of this Deed of Trust 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 Trustor under Section 2.9
hereof. If and whenever from time to time Trustor shall hereafter acquire any
real property or interest therein which constitutes or is intended to constitute
part of the Trust Estate hereunder, Trustor shall promptly give notice thereof
to Beneficiary and Trustor shall forthwith execute, acknowledge and deliver to
Beneficiary a supplement to this Deed of Trust subjecting the property so
acquired to the lien of this Deed of Trust.
2.12 TRUST ESTATE.
2.12.1 Trustor 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 Trustor under the Ground Lease. Trustor 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 Trust Estate, in all
material respects.
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2.12.2 Trustor shall do, or cause to be done, all things necessary
to preserve and keep unimpaired all rights of Trustor 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.
Trustor does hereby authorize and irrevocably appoint and constitute Beneficiary
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 Beneficiary to perform and comply with all the
obligations of Trustor 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 Beneficiary deems reasonably
necessary to prevent or cure any default by Trustor 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 Trustor pursuant thereto, to the end that the rights of Trustor in and to the
leasehold estate created by the Ground Lease shall be kept free from default.
2.12.3 Trustor shall use all reasonable efforts to enforce the
obligations of the lessor under the Ground Lease in a commercially reasonable
manner.
2.12.4 Trustor 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 Trustor to do any of the foregoing without the written
consent of Beneficiary shall be null and void.
2.12.5 If any action or proceeding shall be instituted to evict
Trustor or to recover possession of the Trust Estate or any part thereof or
interest therein from Trustor or any action or proceeding otherwise affecting
the Trust Estate or this Deed of Trust shall be instituted, then Trustor shall,
immediately after receipt, deliver to Beneficiary 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 Trustor 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 Trustor or a third party by
purchase or otherwise and, in case Trustor acquires the fee title or any other
estate, title or interest in and to the Real Property and Improvements, the lien
of this Deed of Trust shall, without further conveyance, simultaneously with
such acquisition, be spread to cover and attach to such acquired estate and as
so spread and attached shall be prior to the lien of any deed of trust placed on
the acquired estate by Trustor or its successors in title after the date of this
Deed of Trust.
2.12.7 No release or forbearance of any of Trustor's obligations
under the Ground Lease by the lessor thereunder, shall release Trustor from any
of its obligations under this Deed of Trust.
2.12.8 Trustor shall, within ten days after written demand from
Beneficiary, deliver to Beneficiary proof of payment of all items that are
required to be paid by Trustor under the Ground Lease, including, without
limitation, rent, taxes, operating expenses and other charges.
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2.12.9 The lien of this Deed of Trust shall attach to all of
Trustor's rights and remedies at any time arising under or pursuant to
bankruptcy or insolvency law, including, without limitation, all of Trustor's
rights to remain in possession of the Trust Estate. Trustor 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, Trustor
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 Trustor shall, prior to effecting such offset, notify Beneficiary of its
intent to do so, setting forth the amount proposed to be so offset and the basis
therefor. Beneficiary shall have the right to object to all or any part of such
offset that would constitute a breach of the Ground Lease, and in the event of
such objection, Trustor shall not effect any offset of the amounts found
objectionable by Beneficiary. Neither Beneficiary's failure to object as
aforesaid nor any objection relating to such offset shall constitute an approval
of any such offset by Beneficiary.
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 Beneficiary shall have the option to
intervene in any such litigation with counsel of Beneficiary's choice.
Beneficiary may proceed in its own name in connection with any such litigation,
and Trustor agrees to execute any and all powers, authorizations, consents or
other documents required by Beneficiary in connection therewith.
2.12.9.3 Trustor shall, after obtaining knowledge thereof,
promptly notify Beneficiary of any filing by or against the lessor or other
party with an interest in the Trust Estate of a petition under any bankruptcy or
insolvency law. Trustor shall promptly deliver to Beneficiary, following
receipt, copies of any and all notices, summonses, pleadings, applications and
other documents received by Trustor in connection with any such petition and any
proceedings relating thereto.
2.12.9.4 If there shall be filed by or against Trustor a
petition under any bankruptcy or insolvency law, and Trustor, as lessee under
the Ground Lease, shall determine to reject the Ground Lease pursuant to any
bankruptcy or insolvency law, then Trustor shall give Beneficiary a notice of
the date on which Trustor 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). Beneficiary shall have the right, but not the obligation, to
serve upon Trustor at any time prior to the date on which Trustor shall so apply
to the bankruptcy court a notice stating that Beneficiary demands that Trustor
assume and assign the Ground Lease to Beneficiary pursuant to any bankruptcy or
insolvency law. If Beneficiary shall serve upon Trustor the notice described in
the preceding sentence, to the extent permitted by law or Governmental Authority
Trustor 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 Trustor under any bankruptcy or
insolvency law, Trustor hereby assigns and transfers to Beneficiary a
non-exclusive right to apply to the bankruptcy court under any bankruptcy or
insolvency law for an
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order extending the period during which the Ground Lease may be rejected or
assumed; and shall (a) promptly notify Beneficiary of any default by Trustor in
the performance or observance of any of the terms, covenants or conditions on
the part of Trustor to be performed or observed under the Ground Lease and of
the giving of any written notice by the lessor thereunder to Trustor of any such
default, and (b) promptly cause a copy of each written notice given to Trustor
by the lessor under the Ground Lease to be delivered to Beneficiary. Beneficiary
may rely on any notice received by it from any such lessor of any default by
Trustor 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 Trustor or
by any Person on its behalf.
2.13 POWER OF ATTORNEY. Trustor does hereby irrevocably constitute and
appoint Beneficiary, its true and lawful attorney (which appointment is coupled
with an interest), with full power of substitution, for Trustor and in the name,
place and stead of Trustor or in Beneficiary'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 Trustor on all instruments
given in payment or in part payment thereof, to settle, adjust or compromise any
claims thereunder as fully as Trustor itself could do and file any claim or take
any action or proceeding, either in its own name or in the name of Trustor or
otherwise, as is necessary or appropriate to protect and preserve the right,
title and interest of Beneficiary in and to such rents, income and other sums
and the security intended to be afforded hereby; provided that Beneficiary 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 Beneficiary's interest hereunder in the Trust Estate or
result in personal injury, then Beneficiary, 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
Beneficiary 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 Beneficiary by reason of the default
of Trustor, or by reason of the bankruptcy or insolvency of Trustor, as well as,
without limitation, sums expended or incurred to sustain the lien or estate of
this Deed of Trust or its priority, or to protect or enforce any rights of
Beneficiary 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, 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 Trust Estate,
or premiums for insurance of the Trust Estate, shall be entitled to the benefit
of the lien on the Trust Estate as of the date of the recording of this Deed of
Trust, 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 Deed of Trust, and shall be repaid by Trustor as provided in
the Secured Debt Documents.
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2.15 SECURITY AGREEMENT.
2.15.1 This Deed of Trust shall also be a security agreement between
Trustor and Beneficiary covering the Trust Estate 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 Deed of Trust, and as
further security for the payment and performance of the Obligations, Trustor
hereby grants to Beneficiary a security interest in such portion of the Trust
Estate to the full extent that the Trust Estate may be subject to the UCC. In
addition to Beneficiary's other rights hereunder, Beneficiary shall have all
rights of a secured party under the UCC. Trustor shall execute and deliver to
Beneficiary 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 Beneficiary's security interests, and Trustor shall bear all reasonable costs
thereof, including all UCC searches. Except as otherwise provided in the Secured
Debt Documents, if Beneficiary should dispose of any of the Trust Estate
comprising the UCC Collateral pursuant to the UCC, ten (10) days prior written
notice by Beneficiary to Trustor shall be deemed to be reasonable notice;
provided, however, Beneficiary may dispose of such property in accordance with
the foreclosure procedures of this Deed of Trust in lieu of proceeding under the
UCC. Beneficiary may, but shall not be obligated to, from time to time execute
and deliver at Trustor's expense, all continuation statements, termination
statements, amendments, partial releases, or other instruments relating to all
financing statements by and between Trustor and Beneficiary. Except as otherwise
provided in the Secured Debt Documents, if an Event of Default shall occur and
is continuing, (a) Beneficiary, 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 may be necessary for the care, protection and preservation
of such collateral and (b) upon request or demand of Beneficiary, Trustor shall
at its expense, assemble the UCC Collateral and make it available to Beneficiary
at a convenient place acceptable to Beneficiary. Trustor shall pay to
Beneficiary on demand, any and all expenses, including reasonable attorneys'
fees and disbursements incurred or paid by Beneficiary in protecting the
interest in the UCC Collateral and in enforcing the rights hereunder with
respect to such UCC Collateral.
2.15.2 To the extent permitted by law: (i) this Deed of Trust upon
recording or registration in the real estate records of the proper office shall
constitute a financing statement filed as a "fixture filing" within the meaning
of Sections 9.334, 9.502 and 9.604 of the UCC; (ii) all or a part of the Trust
Estate are or are to become fixtures; and (iii) the address of Trustor is as set
forth on the first page of this Deed of Trust.
ARTICLE 3 - REMEDIES
3.1 ACCELERATION OF MATURITY. If an Event of Default occurs and is
continuing, Beneficiary may declare the Obligations to be due and payable
immediately, and upon such declaration such principal and interest and other
sums shall immediately become due and payable without demand, presentment,
notice or other requirements of any kind (all of which Trustor waives).
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3.2 PROTECTIVE ADVANCES. If an Event of Default shall have occurred and is
continuing, then without thereby limiting Beneficiary's other rights or
remedies, waiving or releasing any of Trustor's obligations, or imposing any
obligation on Beneficiary, Beneficiary 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
Beneficiary shall cure, or be deemed a waiver of any Event of Default.
3.3 INSTITUTION OF EQUITY PROCEEDINGS. If an Event of Default occurs and
is continuing, Beneficiary may, but shall not be obligated to, institute an
action, suit or proceeding in equity for specific performance of this Deed of
Trust or any other Secured Debt Document, all of which shall be specifically
enforceable by injunction or other equitable remedy.
3.4 BENEFICIARY'S POWER OF ENFORCEMENT.
3.4.1 If an Event of Default occurs and is continuing, Beneficiary
may, but shall not be obligated to, sell or offer for sale the Trust Estate (i)
in such portions, order and parcels as Beneficiary may determine, with or
without having first taken possession of same, to the highest bidder for cash at
public auction at the county courthouse of any county in which any of the Trust
Estate to be sold is situated, in the area in such courthouse designated for
real property foreclosure sales in accordance with Applicable Law (or in the
absence of any such designation, in the area set forth in the notice of sale
hereinafter described), on the first Tuesday of any month between the hours of
10:00 A.M. and 4:00 P.M. (commencing no earlier than such time as may be
designated in the hereinafter described notice of sale), after giving legally
adequate notice of the time, place and terms of sale and that portion of the
Trust Estate to be sold, by (1) posting or causing to be posted written or
printed notices thereof for at least 21 consecutive days prior to the date of
said sale at the county courthouse door of each county in which the Trust Estate
is situated, (2) filing or causing to be filed a copy of such notice in the
office of the county clerk of each county in which the Trust Estate is situated
at least 21 days preceding the date of such sale, and (3) at least 21 days
preceding the date of such sale, serving written notice (by the Beneficiary or
any person chosen by the Beneficiary) of such proposed sale by certified mail on
each debtor obligated to pay the Obligations according to the records of
Beneficiary; service of such notice to each debtor to be made in the manner
provided in the Credit Agreement, or (ii) in such manner as permitted or
required by Section 51.002 of the Property Code of the State of Texas relating
to the sale of real estate or by the UCC relating to the sale of collateral
after default by a debtor (as the UCC now exists or as may be hereafter
amended), or by any other present or subsequent articles or enactments relating
to same but in a manner consistent with Trustor's rights and the manner of
giving notices under the Credit Agreement; provided, however, that nothing
contained in this Section 3.4 shall be construed so as to limit in any way
Trustee's rights to sell the Trust Estate, or any portion thereof, by private
sale if, and to the extent that, such private sale is permitted under the laws
of the State of Texas or by public or private sale after entry of a judgment by
any court of competent jurisdiction ordering same. At any such sale (i) whether
made under the power herein contained, the aforesaid Property Code Section
51.002, the UCC or any other legal enactment, or by virtue of any judicial
proceedings or any other legal right, remedy or recourse, it shall not be
necessary for Trustee to have physically present, or to have constructive
possession of, the Trust Estate (Trustor hereby covenanting and agreeing to
deliver to Trustee any portion of the Trust Estate not actually or
constructively
15
possessed by Trustee immediately upon demand by Trustee) and the title to and
right of possession of any such property shall pass to the purchaser thereof as
completely as if the same had been actually present and delivered to purchaser
at such sale, (ii) each instrument of conveyance executed by Trustee shall
contain a special warranty of title, binding upon Trustor and its successors and
assigns, (iii) each and every recital contained in any instrument of conveyance
made by Trustee shall establish the truth and accuracy of the matters recited
therein, including, without limitation, nonpayment of the Obligations,
advertisement and conduct of such sale in the manner provided herein and
otherwise by law and appointment of any successor Trustee hereunder, (iv) any
and all prerequisites to the validity thereof shall be presumed to have been
performed, (v) the receipt of Trustee or of such other party or officer making
the sale shall be a sufficient discharge to the purchaser or purchasers for its
purchase money and no such purchaser or purchasers, or its assigns or personal
representatives, shall thereafter be obligated to see to the application of such
purchase money, or be in any way answerable for any loss, misapplication or
nonapplication thereof, (vi) to the fullest extent permitted by law, Trustor
shall be completely and irrevocably divested of all of its right, title,
interest, claim and demand whatsoever, either at law or in equity, in and to the
property sold and such sale shall be a perpetual bar both at law and in equity
against Trustor, and against any and all other persons claiming or to claim the
property sold or any part thereof, by, through or under Trustor, and (vii) to
the extent and under such circumstances as are permitted by law, Beneficiary may
bid for and acquire the Trust Estate or any part thereof and in lieu of paying
cash therefor may make settlement for the purchase price by crediting upon the
Obligations the net sales price after deducting therefrom the expenses of the
sale and the costs of the action and any other sums which Beneficiary is
authorized to deduct under this Deed of Trust.
3.4.2 Beneficiary may adjourn from time to time any sale by it to be
made under or by virtue of this Deed of Trust by announcement at the time and
place appointed for such sale or for such adjourned sale or sales; and, except
as otherwise provided by any Applicable Law, Beneficiary, without further notice
or publication, may make such sale at the time and place to which the same shall
be so adjourned.
3.4.3 No recovery of any judgment by Beneficiary and no levy of an
execution under any judgment upon the Trust Estate or upon any other property of
Trustor shall affect in any manner or to any extent, the lien and title of this
Deed of Trust upon the Trust Estate or any part thereof, or any liens, titles,
rights, powers or remedies of Beneficiary hereunder, but such liens, titles,
rights, powers and remedies of Beneficiary shall continue unimpaired as before.
3.4.4 Beneficiary is authorized but shall not be obligated to
foreclose this Deed of Trust subject to the rights of any tenants of the Trust
Estate, 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
Trustor, a defense to any proceedings instituted by Beneficiary to collect the
sums secured hereby.
3.4.5 After deducting all costs, fees and expenses of Beneficiary
and of this Deed of Trust, including, without limitation, costs of evidence of
title and reasonable attorneys' fees of Beneficiary in connection with a sale,
Beneficiary 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
16
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.
3.4.6 If any Event of Default occurs and is continuing, Beneficiary
may, either with or without entry or taking possession of the Trust Estate, and
without regard to whether or not the indebtedness and other sums secured hereby
shall be due and without prejudice to the right of Beneficiary thereafter to
bring an action or proceeding to foreclose or any other action for any Event of
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 Deed of Trust 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 Trust
Estate 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
Beneficiary 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 to it. Beneficiary may take action either by such
proceedings or by the exercise of its powers with respect to entry or taking
possession, or both, as Beneficiary may determine.
3.4.7 The remedies described in this Section 3.4 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.
Beneficiary 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. Trustor agrees
that Beneficiary'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.
3.5 BENEFICIARY'S RIGHT TO ENTER AND TAKE POSSESSION, OPERATE AND APPLY
INCOME.
(a) If an Event of Default occurs and is continuing, Trustor, upon
demand of Beneficiary, shall forthwith surrender to Beneficiary the actual
possession and, if and to the extent permitted by law, Beneficiary itself, or by
such officers or agents as it may appoint, may enter and take possession of all
of the Trust Estate, including the Tangible Collateral, without liability for
trespass, damages or otherwise, and may exclude Trustor and its agents and
employees wholly therefrom and may have joint access with Trustor to the books,
papers and accounts of Trustor.
(b) Upon every such entering upon or taking of possession, if and to
the extent permitted by law, Beneficiary may hold, store, use, operate, manage
and control the Trust Estate 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;
17
(2) insure or keep the Trust Estate insured;
(3) manage and operate the Trust Estate and exercise all the
rights and powers of Trustor in their name or otherwise with respect to the
same;
(4) enter into agreements with others to exercise the powers
herein granted Beneficiary and Trustee, all as Beneficiary or Trustee from time
to time may determine; and shall apply the monies so received by Beneficiary in
such priority as provided by the Secured Debt Documents to (1) the payment of
interest and principal due and payable to the Beneficiary, (2) the deposits for
taxes and assessments and insurance premiums due, (3) the cost of insurance,
taxes, assessments and other proper charges upon the Trust Estate or any part
thereof; (4) the compensation, expenses and disbursements of the agents,
attorneys and other representatives of Beneficiary or Trustee as allowed under
this Deed of Trust; and (5) any other charges or costs required to be paid by
Trustor under the terms of the Secured Debt Documents.
(5) rent or sublet the Trust Estate or any portion thereof for
any purpose permitted by this Deed of Trust; subject, however, to the Permitted
Liens and the terms of the Ground Lease.
Beneficiary shall surrender possession of the Trust Estate to
Trustor (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 Deed of
Trust, 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.
3.6 SEPARATE SALES. To the extent permitted by law or Governmental
Authority, the Trust Estate may be sold in one or more parcels and in such
manner and order as Beneficiary or Trustee, 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.
3.7 WAIVER OF APPRAISEMENT, MORATORIUM, VALUATION, STAY, EXTENSION AND
REDEMPTION LAWS. Trustor agrees to the full extent permitted by law that if an
Event of Default occurs and is continuing, neither Trustor 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 Deed of Trust or the absolute sale of the Trust Estate or any portion
thereof or the final and absolute putting into possession thereof, immediately
after such sale, of the purchasers thereof, and Trustor 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 Trust Estate marshalled upon any foreclosure
of the lien hereof and agrees that Beneficiary, Trustee or any court having
jurisdiction to foreclose such lien may sell the Trust Estate in part or as an
entirety.
3.8 RECEIVER. If an Event of Default occurs and is continuing,
Beneficiary, to the extent permitted by law, and without regard to the value,
adequacy or occupancy of the security for the Obligations and other sums secured
hereby, shall be entitled as a matter of right, but shall not be
18
obligated to, if it so elects to the appointment of a receiver to enter upon and
take possession of the Trust Estate 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
Beneficiary. To the extent permitted by law, Beneficiary may have a receiver
appointed without notice to Trustor or any third party, and Beneficiary may
waive any requirement that the receiver post a bond. To the extent permitted by
law, Beneficiary 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 Beneficiary's behalf may be an Affiliate of Beneficiary. The
reasonable expenses, including receiver's fees, reasonable attorneys' fees,
costs and agents' compensation, incurred pursuant to the powers herein contained
shall be secured by this Deed of Trust. The right to enter and take possession
of and to manage and operate the Trust Estate 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 Beneficiary under this Deed of Trust,
the other Secured Debt Documents or otherwise available to Beneficiary 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. Beneficiary shall be liable to
account only for such earnings, revenues and receipts (including, without
limitation, security deposits) actually received by Beneficiary, whether
received pursuant to this section or any other provision hereof. Notwithstanding
the appointment of any receiver or other custodian, Beneficiary 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 Deed of Trust to, Beneficiary.
3.9 SUITS TO PROTECT THE TRUST ESTATE. Beneficiary shall have the power
and authority but shall not be obligated to institute and maintain any suits and
proceedings as may be advisable (a) to prevent any impairment of the Trust
Estate by any acts which may be unlawful or in violation of this Deed of Trust,
(b) to preserve or protect its interest in the Trust Estate, 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 Beneficiary's interest
3.10 PROOFS OF CLAIM. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings affecting Trustor, any Affiliate or any guarantor, co-maker
or endorser of any of Trustor's obligations, its creditors or its property,
Beneficiary, to the extent permitted by law, shall be entitled but shall not be
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 Trustor 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 Trustor after such date.
3.11 TRUSTOR TO PAY AMOUNTS SECURED HEREBY ON ANY DEFAULT IN PAYMENT;
APPLICATION OF MONIES BY BENEFICIARY.
(a) In case of a foreclosure sale of all or any part of the Trust
Estate 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 Trustor of any
19
additional amounts then remaining due and unpaid and to recover judgment against
Trustor for any portion thereof remaining unpaid, with interest at the Default
Rate.
(b) Trustor 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
Trust Estate or any other property shall in any way affect the Lien and security
interest of this Deed of Trust upon the Trust Estate or any part thereof or any
Lien, rights, powers or remedies of Beneficiary hereunder, but such Lien,
rights, powers and remedies shall continue unimpaired as before.
(c) Any monies collected or received by Beneficiary under this
Section 3.11 shall be first applied to the payment of compensation, expenses and
disbursements of the agents, attorneys and other representatives of the
Beneficiary and the Secured Debtholders, and the balance remaining shall be
applied as provided in the Collateral Trustee Agreement.
3.12 DELAY OR OMISSION; NO WAIVER. No delay or omission of Beneficiary 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 Beneficiary whether contained
herein or in the other Secured Debt Documents or otherwise available to
Beneficiary may be exercised from time to time and as often as may be deemed
expedient by Beneficiary.
3.13 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
Beneficiary (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 Deed of Trust
or any other Secured Debt Document; (d) releases any part of the Trust Estate
from the lien or security interest of this Deed of Trust 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 Deed of Trust 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 Deed of
Trust or any other Secured Debt Document or otherwise of Trustor, or any
subsequent purchaser of the Trust Estate 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 Beneficiary 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 Beneficiary, shall the lien or security interest of this
Deed of Trust 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 Trust Estate, Beneficiary, 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 Trust Estate or the
Obligations 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
20
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 Deed of Trust or any other Secured Debt Document, (i) in the
case of any non-monetary default, Beneficiary 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, Beneficiary 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.
3.14 DISCONTINUANCE OF PROCEEDINGS; POSITION OF PARTIES RESTORED. If
Beneficiary shall have proceeded to enforce any right or remedy under this Deed
of Trust by foreclosure, whether by the power of sale created in this Deed of
Trust, by judicial foreclosure or otherwise, and such proceedings shall have
been discontinued or abandoned prior to completion for any reason, then and in
every such case Trustor and Beneficiary shall be restored to their former
positions and rights hereunder, and all rights, powers and remedies of
Beneficiary shall continue as if no such proceedings had occurred or had been
taken.
3.15 REMEDIES CUMULATIVE. Subject to the provisions of Section 4.17
hereof, no right, power or remedy, including without limitation remedies with
respect to any security for the Obligations, conferred upon or reserved to
Beneficiary by this Deed of Trust 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
Beneficiary shall be entitled to resort to such rights, powers, remedies or
security as Beneficiary may deem advisable.
3.16 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 Deed of Trust, may bear interest at the Default
Rate until such Event of Default has been cured. Trustor's obligation to pay
such interest shall be secured by this Deed of Trust.
3.17 FORECLOSURE; EXPENSES OF LITIGATION. If Beneficiary or Trustee
foreclose, reasonable attorneys' fees for services in the supervision of said
foreclosure proceeding shall be allowed to the Beneficiary or Trustee 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
Beneficiary 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 Trust Estate 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 Trust Estate and the maintenance of the lien and security interest of this
Deed of Trust, including the reasonable fees of any attorney employed by
Beneficiary in any litigation or proceeding affecting this Deed of Trust or any
other
21
Secured Debt Document, the Trust Estate 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 Trustor, with interest
thereon at the Default Rate, and shall be secured by this Deed of Trust. Trustee
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.
3.18 DEFICIENCY JUDGMENTS. If after foreclosure of this Deed of Trust,
there shall remain any deficiency with respect to any amounts payable under the
Secured Debt Documents, including hereunder, or any amounts secured hereby, and
Beneficiary may institute any proceedings to recover such deficiency or
deficiencies, all such amounts shall continue to bear interest at the Default
Rate. To the extent permitted by law, Trustor waives any defense to
Beneficiary's recovery against Trustor of any deficiency after any foreclosure
sale of the Trust Estate. To the extent permitted by law, Trustor expressly
waives any defense or benefits that may be derived from any statute granting
Trustor any defense to any such recovery by Beneficiary. In addition, and to the
extent permitted by law, Beneficiary and Trustee 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 3.17 above. This provision shall survive any
foreclosure or sale of the Trust Estate, any portion thereof and/or the
extinguishment of the lien hereof.
3.19 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, BENEFICIARY AND TRUSTOR 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 DEED OF TRUST OR ANY OTHER SECURED DEBT
DOCUMENT. ANY SUCH DISPUTES SHALL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
3.20 EXCULPATION OF BENEFICIARY. The acceptance by Beneficiary 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 Trust Estate by Beneficiary, be deemed or construed to make Beneficiary a
"mortgagee in possession"; nor thereafter or at any time or in any event
obligate Beneficiary to appear in or defend any action or proceeding relating to
the Trust Estate, nor shall Beneficiary, 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 Trust Estate.
3.21 FAIR MARKET VALUE DETERMINATION. To the extent Section 51.003 of the
Texas Property Code, or any amendment thereto or judicial interpretation
thereof, requires that the "fair market value" of the Trust Estate shall be
determined as of the foreclosure date in order to enforce a deficiency against
Trustor, the term "fair market value" shall include those matters required by
law and shall also include the following additional factors:
22
(a) The Trust Estate is to be valued "AS IS, WHERE IS" and "WITH ALL
FAULTS" and there shall be no assumption of restoration of or refurbishment of
the Improvements after the date of foreclosure;
(b) There shall be an assumption of a prompt resale of the Trust
Estate for an all cash sales price by the purchaser at the foreclosure so that
no extensive holding period should be factored into the determination of "fair
market value" of Trust Estate;
(c) An offset to the fair market value of the Trust Estate, as
determined hereunder, shall be made by deducting from such value the reasonable
estimated closing costs relating to the sale of the Trust Estate including but
not limited to brokerage commissions, title policy expenses, tax prorations,
escrow fees, and other common charges which are incurred by a seller of real
property similar to the Trust Estate; and
(d) After consideration of the factors required by law and those
required above, an additional discount factor shall be calculated based upon the
estimated time it will take to effectuate a sale of the Trust Estate so that the
"fair market value" as so determined is discounted to be as of the date of the
foreclosure of the Trust Estate.
ARTICLE 4 - GENERAL
4.1 DISCHARGE. When all of the Obligations shall have been paid in full,
then this Deed of Trust and the lien and security interest created hereby shall
be of no further force and effect, Trustor shall be released from the covenants,
agreements and obligations of Trustor contained in this Deed of Trust and all
right, title and interest in and to the Trust Estate shall revert to Trustor.
Beneficiary, at the request and the expense of Trustor, shall promptly execute a
deed of reconveyance and such other documents as may be reasonably requested by
Trustor to evidence the discharge and satisfaction of this Deed of Trust and the
release of Trustor from its obligations hereunder.
4.2 NO WAIVER. The exercise of the privileges granted in this Deed of
Trust to perform Trustor's obligations under the agreements which constitute the
Trust Estate shall in no event be considered or constitute a waiver of any right
which Beneficiary 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 period, or with the consent of Trustor 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
Deed of Trust; and the lien and security interest granted by this Deed of Trust
shall continue as a prior lien and security interest on all of the Trust Estate
not expressly so released, until the Obligations are fully paid and this Deed
23
of Trust 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 Trustor whatever shall in any manner impair or affect the security
given by this Deed of Trust; 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. Trustor agrees for itself and all Persons claiming
by, through or under it, that subsequent to foreclosure hereunder in accordance
with this Deed of Trust and applicable law if Trustor shall hold possession of
the Trust Estate or any part thereof, Trustor or the Persons so holding
possession shall be guilty of trespass; and any such Person (including Trustor)
failing or refusing to surrender possession upon demand shall be guilty of
forcible detainer and shall be liable to Beneficiary 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, Trustor 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 Trust Estate or
any part thereof may or shall be situated, nor shall Trustor claim any benefit
or advantage from any law now or hereafter in force providing for the valuation
or appraisement of the Trust Estate or any part thereof prior to any sale
thereof to be made pursuant to any provision of this Deed of Trust or to a
decree of any court of competent jurisdiction, nor after any such sale shall
Trustor claim or exercise any right conferred by any law now or at any time
hereafter in force to redeem the Trust Estate so sold or any part thereof; and
Trustor hereby expressly waives all benefit or advantage of any such law or laws
and the appraisement of the Trust Estate or any part thereof, and covenants that
Trustor shall not hinder or delay the execution of any power herein granted and
delegated to Beneficiary but that Trustor 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, and subject to the terms of Section 3.4, any notice to
Trustor or Beneficiary 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 Deed of Trust 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 Deed of Trust 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 Deed of Trust 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 Deed of Trust
shall be invalid or unenforceable as to any part of the Obligations,
24
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 Deed of Trust 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 DEED OF TRUST SHALL BE GOVERNED BY, AND ALL THE
RIGHTS AND OBLIGATIONS OF TRUSTOR, TRUSTEE AND BENEFICIARY HEREUNDER SHALL BE
DETERMINED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO THE CONFLICTS OF LAWS PRINCIPLES OF THE STATE OF NEW YORK) AND THE LAWS OF
THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES OF THE
STATE OF NEW YORK) SHALL GOVERN (I) ALL ISSUES RELATING TO THIS TRANSACTION,
INCLUDING THE VALIDITY OR ENFORCEABILITY OF THIS DEED OF TRUST OR ANY PROVISION
OF THIS DEED OF TRUST AND (II) THE INTERPRETATION AND CONSTRUCTION OF THIS DEED
OF TRUST, EXCEPT TO THE EXTENT SECTIONS 1.105 AND 35.51 OF THE TEXAS BUSINESS &
COMMERCE CODE REQUIRE TEXAS LAW TO APPLY NOTWITHSTANDING THE FOREGOING CHOICE OF
LAWS OF THE STATE OF NEW YORK. TO THE EXTENT AND ONLY TO THE EXTENT REQUIRED BY
SECTIONS 1.105 AND 35.51 OF THE TEXAS BUSINESS & COMMERCE CODE, TEXAS LAW SHALL
GOVERN (A) THIS DEED OF TRUST TO THE EXTENT NECESSARY FOR BENEFICIARY TO
PERFECT, PROTECT OR ENFORCE THE RIGHTS AND REMEDIES GRANTED TO IT IN THIS DEED
OF TRUST AND TO OBTAIN THE BENEFIT OF THE RIGHTS AND REMEDIES SET FORTH HEREIN
WITH RESPECT TO THE TRUST ESTATE LOCATED IN TEXAS AND (B) PROCEDURAL
REQUIREMENTS WHICH MUST BE GOVERNED BY THE LAW OF THE STATE IN WHICH THE TRUST
ESTATE IS LOCATED.
4.10 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT AND THE OTHER SECURED DEBT
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
AS OF THE DATE HEREOF, THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
_______________________ _______________________
TRUSTOR BENEFICIARY
4.11 AMENDMENTS. This Deed of Trust may be amended, supplemented or
otherwise modified only by an instrument in writing signed by Trustor and
Beneficiary.
4.12 SUCCESSORS AND ASSIGNS. All terms of this Deed of Trust shall run
with the land and bind each of Trustor and Beneficiary and their respective
successors and assigns, and all
25
Persons claiming under or through Trustor or Beneficiary, as the case may be, or
any such successor or assign, and shall inure to the benefit of Beneficiary and
Trustor, and their respective successors and assigns.
4.13 RENEWAL, ETC. To the extent permitted under the other Secured Debt
Documents, Beneficiary may, but shall not be obligated to, at any time and from
time to time renew or extend this Deed of Trust, 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 Trust Estate or any other security,
and grant such extensions and indulgences in relation to the Obligations as
Beneficiary 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 Trust Estate; provided that nothing in this Section
4.13 shall grant Beneficiary the right to alter or modify the Deed of Trust
without the consent of the Trustor unless otherwise specifically permitted in
this Deed of Trust.
4.14 FUTURE ADVANCES. It is understood and agreed that this Deed of Trust
secures, among other things, (i) the Priority Lien Debt (including future
advances to be made with respect thereto), and all other Obligations of Trustor
under the Priority Lien Documents; (ii) the Parity Lien Debt (including future
advances to be made with respect thereto), and all other Obligations of Trustor
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 Beneficiary 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 Trustor to Beneficiary
now or hereafter owing, whether direct or indirect, primary or secondary, fixed
or contingent, joint or several, regardless of how evidenced or 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 Trustor executes any
extension agreement or renewal instrument, and that the lien of any such future
advances shall relate to the date of this Deed of Trust.
4.15 LIABILITY. Notwithstanding any provision in this Deed of Trust to the
contrary, none of Beneficiary, Trustee 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 Beneficiary, Trustee 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 Trust
Estate for debts contracted or liability or damages incurred in the management
or operation of the Trust Estate. 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. Beneficiary, Trustee 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. Trustor will, from time to time,
pay the compensation due hereunder and reimburse such parties for, and save them
harmless
26
against, any and all liability and expenses which may be incurred by them in the
performance of their duties.
4.16 SUCCESSOR TRUSTEE. Any Trustee may resign in writing addressed to
Beneficiary or may be removed at any time with or without cause by an instrument
in writing duly executed by Beneficiary. In case of the death, resignation or
removal of a Trustee, one or more successor Trustee may be appointed by
Beneficiary by instrument of substitution complying with any applicable
requirements of Applicable Law, and in the absence of any such requirement
without formality other than appointment and designation in writing. Such
appointment and designation shall be full evidence of the right and authority to
make the same and of all facts therein recited, and upon the making of any such
appointment and designation this conveyance shall vest in the named successor
Trustee or Trustee, all the estate and title of the prior Trustee in all of the
Trust Estate, and he or they shall thereupon succeed to all the rights, powers,
privileges, immunities and duties hereby conferred upon the prior Trustee. All
references herein to Trustee shall be deemed to refer to Trustee from time to
time acting hereunder.
4.17 ACTIONS OR ADVANCES BY BENEFICIARY OR TRUSTEE. Each and every
covenant herein contained shall be performed and kept by Trustor solely at
Trustor's expense. If Trustor shall fail to perform or keep any of the covenants
of whatsoever kind or nature contained in this Deed of Trust, Beneficiary, or
Trustee or any receiver appointed hereunder or under Applicable Law, may, but
shall not be obligated to, take action and/or make advances to perform the same
in Trustor's behalf, and Trustor hereby agrees to repay the expense of such
action and such advances upon demand plus interest as set forth in the
Collateral Trust Agreement. No such advance or action by Beneficiary, Trustee or
any receiver appointed hereunder shall be deemed to relieve Trustor from any
default hereunder.
4.18 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 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
Trustor at all times to comply with the Applicable 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 Trustor results in Trustor having paid any interest in
excess of that permitted by law, then it is Trustor's express intent that all
excess amounts theretofore collected by Beneficiary 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 Trustor), 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
27
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 Beneficiary may not collect any unearned
interest in the event of acceleration. All sums paid or agreed to be paid to
Beneficiary for the use, forbearance or detention of the Obligations 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.
4.19 RELEASE OF COLLATERAL. Notwithstanding any provision herein to the
contrary, the Trust Estate or any part thereof may be released from the security
interest created by this Deed of Trust in accordance with the provisions of the
Collateral Trust Agreement.
4.20 TIME OF THE ESSENCE. Trustor acknowledges that time is of the essence
in performing all of Trustor's obligations set forth herein.
4.21 COUNTERPART EXECUTION. This Deed of Trust 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.
4.22 LANDLORD'S INTEREST IN TRUST ESTATE. For purposes of clarification,
the lien of this Deed of Trust shall in no way attach to any of the rights,
titles or interests of Landlord in the "Project Site" (as defined in the Ground
Lease).
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28
EXHIBIT 10.34
DEER PARK - TX
IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be duly
executed and delivered on the date set forth in their respective
acknowledgements below, to be effective as of the day and year first above
written.
TRUSTOR:
CALPINE CORPORATION, a Delaware
corporation
By: ____________________________________
Name: __________________________________
Title: _________________________________
THE STATE OF ss.
ss.
COUNTY OF ss.
This instrument was acknowledged before me on ____________, 2003, by
________________ of ____________, on behalf of such corporation.
________________________________________
Notary Public, State of ________________
My Commission Expires: _________________
________________________________________
Printed Name of Notary
S-2
EXHIBIT 10.34
DEER PARK - TX
EXHIBIT A
DESCRIPTION OF SITE
SEE ATTACHED.
EXHIBIT 10.34
DEER PARK - TX
EXHIBIT B
DESCRIPTION OF EASEMENTS
[LEGAL DESCRIPTIONS TO BE INSERTED AT A LATER DATE]