EXHIBIT 10.36
[OTAY MESA/METCALF], CALIFORNIA
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, FIXTURE FILING AND SECURITY AGREEMENT
DATED AS OF JULY 16, 2003
BY
CALPINE CORPORATION,
A DELAWARE CORPORATION,
AS GRANTOR
TO
CHICAGO TITLE COMPANY,
AS TRUSTEE
FOR THE BENEFIT OF
THE BANK OF NEW YORK,
A NEW YORK BANKING CORPORATION,
AS BENEFICIARY
================================================================================
TABLE OF CONTENTS
Page
----
ARTICLE 1 - DEFINITIONS .......................................................................... 4
1.1 DEFINED TERMS ........................................................................... 4
1.2 ACCOUNTING TERMS ........................................................................ 6
ARTICLE 2 - GENERAL COVENANTS AND PROVISIONS ..................................................... 6
2.1 GRANTOR PERFORMANCE OF SECURED DEBT DOCUMENTS ........................................... 6
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 ...................................................................... 9
2.10 ACTS OF GRANTOR ......................................................................... 10
2.11 AFTER-ACQUIRED PROPERTY ................................................................. 10
2.12 ENCUMBERED PROPERTY ..................................................................... 10
2.13 POWER OF ATTORNEY ....................................................................... 13
2.14 COVENANT TO PAY ......................................................................... 13
2.15 SECURITY AGREEMENT ...................................................................... 13
ARTICLE 3 - REMEDIES ............................................................................. 14
3.1 PROTECTIVE ADVANCES ..................................................................... 14
3.2 INSTITUTION OF EQUITY PROCEEDINGS ....................................................... 14
3.3 BENEFICIARY'S POWER OF ENFORCEMENT ...................................................... 14
3.4 BENEFICIARY'S RIGHT TO ENTER AND TAKE POSSESSION, OPERATE AND APPLY INCOME .............. 16
3.5 SEPARATE SALES .......................................................................... 17
3.6 WAIVER OF APPRAISEMENT, MORATORIUM, VALUATION, STAY, EXTENSION AND REDEMPTION LAWS ...... 18
3.7 RECEIVER ................................................................................ 18
3.8 SUITS TO PROTECT THE ENCUMBERED PROPERTY ................................................ 18
3.9 PROOFS OF CLAIM ......................................................................... 19
3.10 GRANTOR TO PAY AMOUNTS SECURED HEREBY ON ANY DEFAULT IN PAYMENT; APPLICATION OF
MONIES BY BENEFICIARY.19
3.11 DELAY OR OMISSION; NO WAIVER ............................................................ 19
3.12 NO WAIVER OF ONE DEFAULT TO AFFECT ANOTHER .............................................. 19
3.13 DISCONTINUANCE OF PROCEEDINGS; POSITION OF PARTIES RESTORED ............................. 20
3.14 REMEDIES CUMULATIVE ..................................................................... 20
3.15 INTEREST AFTER EVENT OF DEFAULT ......................................................... 20
3.16 FORECLOSURE; EXPENSES OF LITIGATION ..................................................... 21
3.17 DEFICIENCY JUDGMENTS .................................................................... 21
3.18 WAIVER OF JURY TRIAL .................................................................... 21
3.19 EXCULPATION OF BENEFICIARY .............................................................. 21
ARTICLE 4 - GENERAL .............................................................................. 22
4.1 DISCHARGE ............................................................................... 22
4.2 NO WAIVER ............................................................................... 22
4.3 EXTENSION, REARRANGEMENT OR RENEWAL OF OBLIGATIONS ...................................... 22
i
4.4 FORCIBLE DETAINER ....................................................................... 22
4.5 WAIVER OF STAY OR EXTENSION ............................................................. 23
4.6 NOTICES ................................................................................. 23
4.7 SEVERABILITY ............................................................................ 23
4.8 APPLICATION OF PAYMENTS ................................................................. 23
4.9 GOVERNING LAW ........................................................................... 23
4.10 AMENDMENTS .............................................................................. 23
4.11 SUCCESSORS AND ASSIGNS .................................................................. 23
4.12 RENEWAL, ETC ............................................................................ 24
4.13 FUTURE ADVANCES ......................................................................... 24
4.14 LIABILITY ............................................................................... 24
4.15 SUCCESSOR TRUSTEE ....................................................................... 25
4.16 ACTIONS OR ADVANCES BY BENEFICIARY OR TRUSTEE ........................................... 25
4.17 SEVERABILITY AND COMPLIANCE WITH USURY LAW .............................................. 25
4.18 RELEASE OF COLLATERAL ................................................................... 26
4.19 TIME OF THE ESSENCE ..................................................................... 26
4.20 COUNTERPART EXECUTION ................................................................... 26
4.21 FIXTURE FILING .......................................................................... 26
ii
[OTAY MESA/METCALF], CALIFORNIA
DEED OF TRUST, ASSIGNMENT OF RENTS,
FIXTURE FILING AND SECURITY AGREEMENT
This DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING AND SECURITY
AGREEMENT, dated as of July 16, 2003 (this "Deed of Trust") by CALPINE
CORPORATION, a Delaware corporation ("Grantor"), whose address is 50 West San
Fernando Street, San Jose, CA 95113, to CHICAGO TITLE COMPANY ("Trustee"),whose
address is 700 South Flower Street #900, Los Angeles, CA 90017, 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 Grantor, Beneficiary, 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. Grantor has entered into an Amended and Restated Credit Agreement
dated as of July 16, 2003 (the "Credit Agreement") among, inter alia, Grantor,
the Lenders referred to therein and The Bank of Nova Scotia as Administrative
Agent relating to a $500,000,000 senior secured credit facility, made available
in the form of revolving loans and term loans, including letters of credit
issued thereunder.
B. Grantor 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 Grantor 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 Grantor 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 Grantor 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 Grantor and
Goldman Sachs Credit Partners L.P., as Administrative Agent (together with its
successors in such capacity, the "Term Loan Administrative Agent").
C. As permitted pursuant to the Secured Debt Documents, Grantor may
incur future debt which could, together with the obligations under the Credit
Agreement, constitute Priority Lien Debt and Grantor may incur future debt which
could, together with the 2007 Notes, the 2010 Notes, the 2013 Notes and the Term
Loans, constitute Parity Lien Debt, provided that the aggregate amount of the
Secured Debt to be secured hereby shall not exceed $4,200,000,000. Grantor
intends to secure the obligations, including the obligations (a) under the
Credit Agreement and any future Priority Lien Debt, equally and ratably, on a
priority basis, and, (b) subject to such priority, under the 2007 Notes, 2010
Notes, 2013 Notes and Term Loans and any future Parity Lien Debt equally and
ratably, with liens and security interests in, among other collateral, the
Encumbered Property under the Existing Deed of Trust, as contemplated in the
Collateral Trust Agreement.
D. Grantor (i) is the owner of the leasehold in the lands or other
interest 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 Grantor 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
Grantor set forth herein (collectively, the "Obligations,") and in consideration
of the covenants herein and therein, Grantor, intending to be legally bound,
does hereby grant, bargain, sell, convey, warrant, assign, transfer, mortgage,
pledge, set-over and confirm unto Trustee, IN TRUST, WITH POWER OF SALE, for the
use and benefit of Beneficiary, all of Grantor's estate, right, title, interest,
property, claim and demand, now or hereinafter arising, in and to the following
property and rights (herein collectively called the "Encumbered Property"):
(a) Grantor's interest in the lands and premises including Grantor's
interest in the leasehold estate created thereby in and to the lands and
premises more particularly described in Exhibit A attached hereto (the
"Site").
(b) any and all easements, leases, licenses, option rights,
rights-of-way and other rights used in connection with the Site or as a
means of access thereto (including, without limitation, all rights of
Grantor to exercise any election or option, to make any determination or
give any notice, consent, waiver or approval, or to take any other action
under the Ground Lease), all easements for ingress and egress and
easements for water, natural gas and sewage pipelines, running in favor of
Grantor, or appurtenant to the Site or arising under the Ground Lease, and
any and all sidewalks, alleys, strips and gores of land adjacent thereto
or used in connection therewith together with all and singular the
tenements, hereditaments and appurtenances thereto, and with any land
lying within the right-of-way of any streets, open
2
or proposed, adjoining the same (including, without limitation, the
easements, leases, licenses and other instruments described in Exhibit B
hereto) (collectively, the "Easements"; and the Site and the Easements
collectively referred to herein as the "Real Property");
(c) all buildings, structures, fixtures and other improvements now
or hereafter erected on the Real Property, including the Project
(collectively, the "Improvements");
(d) all machinery, apparatus, equipment, fittings, fixtures,
boilers, turbines and other articles of personal property, including all
goods and all goods which become fixtures, now owned or hereafter acquired
by Grantor and now or hereafter located on, attached to or used in the
operation of or in connection with the Real Property and/or the
Improvements, and all replacements thereof, additions thereto and
substitutions therefor, to the fullest extent permitted by applicable law
(all of the foregoing being hereinafter collectively called the
"Equipment");
(e) all raw materials, work in process and other materials used or
consumed in the construction of, or now or hereafter located on or used in
connection with, the Real Property, the Improvements and/or the Equipment,
(including, without limitation, fuel and fuel deposits, now or hereafter
located on the Real Property or elsewhere or otherwise owned by Grantor)
(the above items, together with the Equipment, being hereinafter
collectively called the "Tangible Collateral");
(f) all rights, powers, privileges and other benefits of Grantor (to
the extent assignable) now or hereafter obtained by Grantor and/or from
any Governmental Authority, including, without limitation, permits issued
in the name of Grantor, governmental actions relating to the ownership,
operation, management and use of the Real Property, Improvements,
Equipment or Tangible Collateral, the development and financing of the
Project, the Improvements and the Equipment, and any improvements,
modifications or additions thereto;
(g) all the lands and interests in lands, tenements and
hereditaments hereafter acquired by Grantor in connection with or
appurtenant to the Real Property and/or any other property or rights
subject to the lien hereof, including (without limitation) all interests
of Grantor, whether as lessor or lessee, in any leases of land hereafter
made and all rights of Grantor thereunder;
(h) 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 may from time to time, by delivery
or by writing of any kind, be subjected to the lien hereof by Grantor or
by anyone on its behalf or with its consent, or which may come into the
possession or be subject to the control of 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 Grantor, as fully as if such
property were now owned by Grantor and were specifically described in this
Deed of Trust and subjected to the lien and security interest hereof; and
Trustee and
3
Beneficiary are hereby authorized to receive any and all such property as
and for additional security hereunder; and
(i) any right of Grantor to elect to terminate the Ground Lease or
remain in possession of the Real Property pursuant to 11 U.S.C. section
365(h)(1) or any similar provision of applicable law and any possessory
rights of Grantor in the Real Property pursuant to 11 U.S.C section
365(h)(2) or any other similar provision of applicable law;
(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.
Notwithstanding the foregoing, the Encumbered Property shall not include
that certain turbine that is currently on the Site that is encumbered by the
Siemans' lien as of the date hereof.
TO HAVE AND TO HOLD the said Encumbered Property, 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
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 Grantor, its legal representatives, successors or assigns, except
only those, if any, expressly hereinafter referred to and that the Deed of Trust
Property 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 Grantor 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,
4
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.
"Encumbered Property" 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.
"Improvements" has the meaning ascribed to it in the Granting
Clauses.
"Legal Requirements" means (i) any and all present and future
judicial decisions, statutes, rulings, rules, regulations, licenses, decisions,
orders, injunctions, decrees, permits, certificates or ordinances of any
Governmental Authority in any way applicable to Grantor, or the Encumbered
Property, including the ownership, use, occupancy, operation, maintenance,
repair or reconstruction thereof, and any other Applicable Law enacted by any
Governmental Authority relating to health or the environment, (ii) Grantor's
presently or subsequently effective Organic Documents, (iii) any and all Leases,
(iv) any and all contracts (written or oral) of any nature to which Grantor, or
the Encumbered Property may be bound and (v) any and all restrictions,
restrictive covenants or zoning, present and future, as the same may apply to
the Encumbered Property.
"Obligations" has the meaning ascribed to it in the Granting
Clauses.
"Organic Documents" means the Articles of Incorporation, Certificate
of Incorporation, limited liability company certificate of formation and
regulations or operating agreement, partnership agreement, limited partnership
agreement, joint venture agreement, trust agreement or other similar documents
governing the organization and operation of a business association.
"Permitted Lien" means the liens, easements, restrictions,
exceptions, reservations, conditions, limitations, security interests and other
matters (if any) as permitted in the Secured Debt Documents .
5
"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 Encumbered Property; (ii) any and all proceeds in the form
of accounts (as such term is defined in the UCC), security deposits, tax escrows
(if any), down payments (to the extent the same may be pledged under applicable
law), collections, contract rights, documents, instruments, letters of credit,
chattel paper, liens and security instruments, guaranties or general intangibles
relating in whole or in part to the Encumbered Property and all rights and
remedies of whatever kind or nature Grantor may hold or acquire for the purpose
of securing or enforcing any obligation due Grantor thereunder.
"Project" means that certain electric and steam production facility
located on the Site.
"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.
"Obligations" has the meaning ascribed to it in the Granting
Clauses.
"Site" has the meaning ascribed to it in the Granting Clauses.
"State" means the State of California.
"Tangible Collateral" has the meaning ascribed to it in the Granting
Clauses.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the State of California, 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 Uniform Commercial Code.
1.2 ACCOUNTING TERMS. As used herein and in any certificate or other
document made or delivered pursuant hereto, accounting terms not defined herein
shall have the respective meanings given to them under GAAP.
ARTICLE 2 - GENERAL COVENANTS AND PROVISIONS
2.1 GRANTOR PERFORMANCE OF SECURED DEBT DOCUMENTS. Grantor shall perform,
observe and comply with each and every provision hereof, and with each and every
provision contained in the Secured Debt Documents and shall promptly pay, when
payment shall become due,
6
the principal with interest thereon and all other sums required to be paid by
Grantor 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. Grantor, to the
best of its knowledge, represents, covenants and warrants that as of the date
hereof: (a) Grantor has good and marketable title to that portion of the Real
Property which constitutes real property interests including the Ground Lease
and the leasehold estate created thereby, free and clear of all encumbrances
except Permitted Liens with respect to the Site, the Ground Lease and other
matters which, individually and in the aggregate, do not have a materially
adverse effect upon the ownership or operation of the Site; (b) Grantor has the
right to hold, occupy and enjoy its interest in the Real Property on and subject
to the terms and conditions of the Ground Lease, and has good right, full power
and lawful authority to mortgage the same as provided herein, and Beneficiary
may at all times peaceably and quietly enter upon, hold, occupy and enjoy the
Real Property in accordance with the terms hereof; (c) except as otherwise
permitted in the Secured Debt Documents, all costs arising from construction of
any improvements, the performance of any labor and the purchase of all
Encumbered Property have been or shall be paid when due (except as permitted
(including permitted contests) in the Secured Debt Documents; (d) the Site has
access for ingress and egress to dedicated street(s); and (e) no material part
of the Encumbered Property has been damaged, destroyed, condemned or abandoned.
2.3 COMPLIANCE WITH LEGAL REQUIREMENTS. Grantor shall promptly comply in
all material respects with all Legal Requirements relating to its use and
occupancy of the Encumbered Property, whether or not such compliance requires
work or remedial measures that are ordinary or extraordinary, foreseen or
unforeseen, structural or nonstructural, or that interfere with the use or
enjoyment of the Encumbered Property (except as permitted (including permitted
contests) in the Secured Debt Documents).
2.4 INSURANCE; APPLICATION OF INSURANCE PROCEEDS; APPLICATION OF EMINENT
DOMAIN PROCEEDS.
2.4.1 Grantor shall carry, with financially sound and reputable
insurance companies and in amounts as is customary in the industry or as
otherwise required pursuant to the Secured Debt Documents, the following
insurance: (1) workmen's compensation insurance and public liability and
property damage insurance in respect of all activities in which Grantor might
incur personal liability for the death of or injury to an employee or third
person, or damage 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 Encumbered Property, is located,
insurance in respect of the Equipment, against loss or damage by fire,
lightning, hail, tornado, explosion and other similar risks, hazards, casualties
and contingencies (including business interruption insurance covering loss of
revenues) with limits and sublimits as appropriate; provided, that any such
insurance may be provided by way of self insurance to the extent that similar
companies engaged in similar undertakings in the same general areas also
self-insure. Each insurance policy issued in connection therewith shall provide
by way of endorsements, riders or otherwise that (i) name 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
7
appear, which proceeds are hereby assigned to Beneficiary, it being agreed by
Grantor that such payments shall be applied A) if there be no Event of Default
existing or which would exist but for due notice or lapse of time, or both, to
the restoration, repair or replacement of the Encumbered Property, or B) if
there be an Event of Default existing, or which would exist but for due notice
or lapse of time, or both, in accordance with the provisions of the Collateral
Trust Agreement, either for the above stated purpose or toward the payment of
the Indebtedness; (ii) the coverage of Beneficiary shall not be terminated,
reduced or affected in any manner regardless of any breach or violation by
Grantor of any warranties, declarations or conditions in such policy; (iii) no
such insurance policy shall be canceled, materially endorsed, materially altered
or reissued to effect a change in coverage for any reason and to any extent
whatsoever unless such insurer, their authorized representative or Grantor shall
have first given 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. Grantor shall
maintain insurance in an amount sufficient to prevent Grantor from becoming a
co-insurer under any policy required hereunder. If Grantor fails to maintain the
level of insurance required under this Deed of Trust, then Grantor 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. Grantor unconditionally and absolutely assigns to
Beneficiary all of Grantor's right, title and interest in and to: all leases,
subleases, occupancy agreements, licenses, rental contracts and other similar
agreements now or hereafter existing relating to the use or occupancy of the
Encumbered Property, together with all guarantees, modifications, extensions and
renewals thereof; and all rents, issues, profits, income and proceeds due or to
become due from tenants of the Encumbered Property (the "Leases"), including
rentals and all other payments of any kind under any Leases now existing or
hereafter entered into, together with all deposits (including security deposits)
of tenants thereunder. This is an absolute assignment to 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 of herein
below, 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 Encumbered Property; settle compromise, release,
extend the time of payment of, and make allowances, adjustments and discounts of
any rents or other obligations under the Leases; enforce payment of rents and
other rights under the Leases, prosecute any action or proceeding , and defend
against any claim with respect to rents and Leases; enter upon, take possession
of and operate the Encumbered Property; lease all or any part of the Encumbered
Property; and/or perform any and all obligations of Grantor under the Leases and
exercise any and all rights of Grantor therein contained to the full extent of
Grantor's rights and obligations thereunder, with or without the bringing of any
action or the appointment of a receiver.
8
At Beneficiary's request, Grantor shall deliver a copy of this Deed of Trust to
each tenant under a Lease. Grantor irrevocably directs any tenant, without any
requirement for notice to or consent by Grantor, to comply with all demands of
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 Grantor 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. Grantor shall apply any rents which it receives to the
payment due under the Obligations, taxes, assessments, water charges, sewer
rents and other governmental charges levied, assessed or imposed against the
Encumbered Property, insurance premiums, and other obligations of lessor under
the Leases before using such proceeds for any other purpose.
2.6 REJECTION OF GROUND LEASE BY LESSOR. To the extent applicable, if the
lessor under the Ground Lease rejects or disaffirms the Ground Lease or purports
or seeks to disaffirm the Ground Lease pursuant to any bankruptcy law, then:
2.6.1 To the extent permitted by law, Grantor shall remain in
possession of the Real Property demised under the Ground Lease and shall perform
all acts reasonably necessary for Grantor to remain in such possession for the
unexpired term of such Ground Lease (including all renewals), whether the then
existing terms and provisions of such Ground Lease require such acts or
otherwise; and
2.6.2 All the terms and provisions of this 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 Grantor's rights and remedies arising at
any time under, or pursuant to, any bankruptcy or insolvency laws, including all
of Grantor's rights to remain in possession of the Real Property.
2.7 EXPENSES. Grantor shall indemnify Beneficiary with respect to any
transaction or matter in any way connected with any portion of the Encumbered
Property, or Grantor's use, occupancy, or operation of the Encumbered Property
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, Grantor shall remain
obligated under all agreements which are included in the definition of
"Encumbered Property" 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 Grantor, 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 Grantor under such agreements, or to make any
payment or to make any inquiry as to the nature or sufficiency of any payment
received by it, or to present or file any claim or take any action to collect or
enforce the payment of any amounts which have been assigned to Beneficiary
hereunder or to which Beneficiary or the Secured Debtholders may be entitled at
any time or times.
9
2.9 FURTHER ASSURANCES. Grantor shall, from time to time, at its expense,
promptly execute and deliver all further instruments and documents, and take all
further action, that may be 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. Grantor shall keep the Encumbered Property free and clear of all Liens,
other than Permitted Liens. Without limiting the generality of the foregoing,
Grantor shall execute and record or file this 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. Grantor hereby authorizes Beneficiary
to file one or more financing statements or continuation statements, and
amendments thereto, relative to all or any part of the Encumbered Property
necessary to preserve or protect the lien and security interest granted hereby
without the signature of Grantor where permitted by law.
2.10 ACTS OF GRANTOR. Except as provided in or permitted by the Secured
Debt Documents, Grantor hereby represents and warrants that it has not granted,
mortgaged, hypothecated, assigned or pledged and hereby covenants that it will
not grant, mortgage, hypothecate, assign or pledge, so long as this Deed of
Trust shall remain in effect, any of its right, title or interest in and to the
Encumbered Property or any part thereof, other than Permitted Liens, to anyone
other than Beneficiary.
2.11 AFTER-ACQUIRED PROPERTY. Any and all of the Encumbered Property which
is hereafter acquired shall immediately, without any further conveyance,
assignment or act on the part of Grantor 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 Grantor under
Section 2.9 hereof. If and whenever from time to time Grantor shall hereafter
acquire any real property or interest therein which constitutes or is intended
to constitute part of the Encumbered Property hereunder, Grantor shall promptly
give notice thereof to Beneficiary and Grantor 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 ENCUMBERED PROPERTY.
2.12.1 Grantor shall pay or cause to be paid all rent and other
charges required under the Ground Lease as and when the same are due and shall
promptly and faithfully perform or cause to be performed all other material
terms, obligations, covenants, conditions, agreements, indemnities and
liabilities of Grantor under the Ground Lease. Grantor shall observe all
applicable covenants, easements and other restrictions of record with respect to
the Site, the Easements or to any other part of the Encumbered Property, in all
material respects.
2.12.2 Grantor shall do, or cause to be done, all things necessary
to preserve and keep unimpaired all rights of Grantor as lessee under the Ground
Lease, and to prevent any default under the Ground Lease, or any termination,
surrender, cancellation, forfeiture, subordination or impairment thereof.
Grantor does hereby authorize and irrevocably appoint and
10
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 Grantor under the Ground Lease, and to do and
take upon the occurrence and during continuation of an Event of Default, but
without any obligation so to do or take, any action which Beneficiary deems
reasonably necessary to prevent or cure any default by Grantor under the Ground
Lease, to enter into and upon the Real Property and Improvements or any part
thereof as provided in the Secured Debt Documents in order to prevent or cure
any default of Grantor pursuant thereto, to the end that the rights of Grantor
in and to the leasehold estate created by the Ground Lease shall be kept free
from default.
2.12.3 Grantor shall use all reasonable efforts to enforce the
obligations of the lessor under the Ground Lease in a commercially reasonable
manner.
2.12.4 Grantor shall not voluntarily surrender its leasehold estate
and interest under the Ground Lease or modify, change, supplement, alter or
amend the Ground Lease or affirmatively waive any provisions thereof, either
orally or in writing, except as permitted in the Secured Debt Documents, and any
attempt on the part of Grantor to do any of the foregoing without the written
consent of Beneficiary shall be null and void.
2.12.5 If any action or proceeding shall be instituted to evict
Grantor or to recover possession of the Encumbered Property or any part thereof
or interest therein from Grantor or any action or proceeding otherwise affecting
the Encumbered Property or this Deed of Trust shall be instituted, then Grantor
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 Grantor covenants and agrees that the fee title to the Real
Property and Improvements and the leasehold estate created under the Ground
Lease shall not merge but shall always remain separate and distinct,
notwithstanding the union of said estates either in Grantor or a third party by
purchase or otherwise and, in case Grantor acquires the fee title or any other
estate, title or interest in and to the Real Property and Improvements, the lien
of this 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 after the date of this Deed of Trust.
2.12.7 No release or forbearance of any of Grantor's obligations
under the Ground Lease by the lessor thereunder, shall release Grantor from any
of its obligations under this Deed of Trust.
2.12.8 Grantor 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 Grantor under the Ground Lease, including, without
limitation, rent, taxes, operating expenses and other charges.
11
2.12.9 The lien of this Deed of Trust shall attach to all of
Grantor's rights and remedies at any time arising under or pursuant to
bankruptcy or insolvency law, including, without limitation, all of Grantor's
rights to remain in possession of the Encumbered Property. Grantor shall not
elect to treat the Ground Lease as terminated under bankruptcy or insolvency
law, and any such election shall be void.
2.12.9.1 If pursuant to bankruptcy or insolvency law, Grantor
shall seek to offset against the rent reserved in the Ground Lease the amount of
any damages caused by the nonperformance by the lessor or any other party of any
of their respective obligations thereunder after the rejection by the lessor or
such other party of the Ground Lease under any bankruptcy or insolvency law,
then Grantor shall, prior to effecting such offset, notify 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, Grantor 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 Grantor agrees to execute any and all powers, authorizations, consents or
other documents required by Beneficiary in connection therewith.
2.12.9.3 Grantor shall, after obtaining knowledge thereof,
promptly notify Beneficiary of any filing by or against the lessor or other
party with an interest in the Encumbered Property of a petition under any
bankruptcy or insolvency law. Grantor shall promptly deliver to Beneficiary,
following receipt, copies of any and all notices, summonses, pleadings,
applications and other documents received by Grantor in connection with any such
petition and any proceedings relating thereto.
2.12.9.4 If there shall be filed by or against Grantor a
petition under any bankruptcy or insolvency law, and Grantor, as lessee under
the Ground Lease, shall determine to reject the Ground Lease pursuant to any
bankruptcy or insolvency law, then Grantor shall give Beneficiary a notice of
the date on which Grantor shall apply to the bankruptcy court for authority to
reject the Ground Lease (such notice to be no later than twenty (20) days prior
to such date). Beneficiary shall have the right, but not the obligation, to
serve upon Grantor at any time prior to the date on which Grantor shall so apply
to the bankruptcy court a notice stating that Beneficiary demands that Grantor
assume and assign the Ground Lease to Beneficiary pursuant to any bankruptcy or
insolvency law. If Beneficiary shall serve upon Grantor the notice described in
the preceding sentence, to the extent permitted by law or Governmental Authority
Grantor shall not seek to reject the Ground Lease and shall comply with the
demand provided for in the preceding sentence. In addition, effective upon the
entry of an order for relief with respect to Grantor under any bankruptcy or
insolvency law, Grantor hereby assigns and transfers to Beneficiary a
non-exclusive right to apply to the bankruptcy court under any bankruptcy or
insolvency law for an
12
order extending the period during which the Ground Lease may be rejected or
assumed; and shall (a) promptly notify Beneficiary of any default by Grantor in
the performance or observance of any of the terms, covenants or conditions on
the part of Grantor to be performed or observed under the Ground Lease and of
the giving of any written notice by the lessor thereunder to Grantor of any such
default, and (b) promptly cause a copy of each written notice given to Grantor
by the lessor under the Ground Lease to be delivered to Beneficiary. Beneficiary
may rely on any notice received by it from any such lessor of any default by
Grantor under the Ground Lease and may take such action as may be permitted by
law or Governmental Authority to cure such default even though the existence of
such default or the nature thereof shall be questioned or denied by Grantor or
by any Person on its behalf.
2.13 POWER OF ATTORNEY. Grantor does hereby irrevocably constitute and
appoint Beneficiary, its true and lawful attorney (which appointment is coupled
with an interest), with full power of substitution, for Grantor and in the name,
place and stead of Grantor or in 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 Grantor on all instruments
given in payment or in part payment thereof, to settle, adjust or compromise any
claims thereunder as fully as Grantor itself could do and file any claim or take
any action or proceeding, either in its own name or in the name of Grantor or
otherwise, as are necessary or appropriate to protect and preserve the right,
title and interest of 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 Encumbered Property
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 Grantor, or by reason of the bankruptcy or insolvency of Grantor, as well as,
without limitation, sums expended or incurred to sustain the lien or estate of
this 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 Encumbered
Property, or premiums for insurance of the Encumbered Property, shall be
entitled to the benefit of the lien on the Encumbered Property 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
Recital B of this Deed of Trust, and shall be repaid by Grantor as provided in
the Secured Debt Documents.
2.15 SECURITY AGREEMENT.
2.15.1 This Deed of Trust shall also be a security agreement between
Grantor and
13
Beneficiary covering the Encumbered Property constituting personal property or
fixtures (hereinafter collectively called "UCC Collateral") governed by the UCC
in effect in the State as the same may be more specifically set forth in any
financing statement delivered in connection with this Deed of Trust, and as
further security for the payment and performance of the Obligations, Grantor
hereby grants to Beneficiary a security interest in such portion of the
Encumbered Property to the full extent that the Encumbered Property 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. Grantor
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
Grantor 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 Encumbered Property comprising the UCC Collateral
pursuant to the UCC, ten (10) days prior written notice by Beneficiary to
Grantor shall be deemed to be reasonable notice; provided, however, Beneficiary
may, but shall not obligated to, 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, from time to time, execute and
deliver at Grantor's expense, all continuation statements, termination
statements, amendments, partial releases, or other instruments relating to all
financing statements by and between Grantor and 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 as may be necessary for the care, protection and
preservation of such collateral and (b) upon request or demand of Beneficiary,
Grantor shall at its expense, assemble the UCC Collateral and make it available
to Beneficiary at a convenient place acceptable to Beneficiary. Grantor 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.
ARTICLE 3 - REMEDIES
3.1 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 Grantor'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.
3.2 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.
14
3.3 BENEFICIARY'S POWER OF ENFORCEMENT.
3.3.1 If an Event of Default occurs and is continuing, Beneficiary
may, but shall not be obligated to, prepare and record on its own behalf, or to
deliver to Trustee for recording, if appropriate, written declaration of default
and demand for sale and written notice of breach and election to sell (or other
statutory notice) to cause the Encumbered Property to be sold to satisfy the
obligations hereof, and in the case of delivery to Trustee, Trustee shall cause
said notice to be filed for record.
3.3.2 After the lapse of such time as may then be required by law
following the recordation of said notice of breach of election to sell, and
notice of sale having been given as then required by law, Trustee without demand
on Grantor, shall sell the Encumbered Property or any portion thereof at the
time and place fixed by it in said notice, either as a whole or in separate
parcels, and in such order as it may determine, at public auction to the highest
bidder, of cash in lawful money of the United States payable at the time of
sale. Trustee may, for any cause it deems expedient, postpone the sale of all or
any portion of said property until it shall be completed and, in every case,
notice of postponement shall be given by public announcement thereof at the time
and place last appointed for the sale and from time to time thereafter Trustee
may postpone such sale by public announcement at the time fixed by the preceding
postponement; provided that Trustee shall give Grantor notice of such
postponement to the extent required by law. Trustee shall execute and deliver to
the purchaser its deed, bill of sale, or other instrument conveying said
property so sold, but without any covenant or warranty, express or implied. The
recitals in such instrument of conveyance of any matters or facts shall be
conclusive proof of the truthfulness thereof. Any person, including Beneficiary,
may bid at the sale.
3.3.3 After deducting all costs, fees and expenses of Trustee and of
this Deed of Trust, including, without limitation, costs of evidence of title
and reasonable attorneys' fees of Trustee or Beneficiary in connection with a
sale, Trustee 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
interest rate on the Obligations, then to the payment of all other sums then
secured hereby, and the remainder, if any, to the person or persons legally
entitled thereto.
3.3.4 If any Event of Default occurs and is continuing, Beneficiary
may, but shall not be obligated, to the extent permitted by law, either with or
without entry or taking possession of the Encumbered Property, and without
regard to whether or not the indebtedness and other sums secured hereby shall be
due and without prejudice to the right of Beneficiary thereafter to bring an
action or proceeding to foreclose or any other action for any other Event of
Default existing at the time such earlier action was commended, 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 on real property and to sell, as an
entirety or in separate lots or parcels, the Encumbered Property or any portion
thereof pursuant to the laws of the State of 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
15
exercise of its powers with respect to entry or taking possession, or both, as
Beneficiary may in its sole discretion, determine.
3.3.5 The remedies described in this Section 3.3 may be exercised
with respect to all or any portion of the UCC Collateral, either simultaneously
with the sale of any real property encumbered hereby or independent thereof.
Beneficiary may, at any time, 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.
3.3.6 Where the Encumbered Property consists of real property and
personal property, any reinstatement of the Obligations, following the
occurrence of an Event of Default and an election by the Beneficiary to
accelerate the maturity of the Obligations, which is made by Trustor or any
other person or entity permitted to exercise the right of reinstatement under
Section 2924c of the California Civil Code, or any successor statute, shall, in
accordance with the terms of UCC Section 9604, not prohibit the Beneficiary from
conducting a sale or other disposition of any personally property or from
otherwise proceeding against or continuing to proceed against any personal
property in any manner permitted by the UCC; nor shall any such reinstatement
invalidate, rescind or otherwise affect any sale, disposition or other
proceeding held, conducted or instituted with respect to any personal property
prior to such reinstatement. Any sums paid to Beneficiary, in effecting any
reinstatement pursuant to Section 2924c of the California Civil Code shall be
applied to the Obligations and to Beneficiary's and Trustee's reasonable costs
and expenses in the manner required by Section 2924c.
3.3.7 Beneficiary is authorized, but shall not be obligated, to
foreclose this Deed of Trust subject to the rights of any tenants of the
Encumbered Property, and the failure to make any such tenants parties to any
such foreclosure proceedings and to foreclose their rights will not be, nor be
asserted to be by Grantor, a defense to any proceedings instituted by
Beneficiary to collect the sums secured hereby.
3.3.8 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 may, but shall not be obligated to, apply the proceeds of such sale
to payment of all sums expended under the terms hereof not then repaid, with
accrued interest at the Default Rate then to the payment of all other sums then
secured hereby and the remainder, if any, to the person or persons legally
entitled thereto.
3.4 BENEFICIARY'S RIGHT TO ENTER AND TAKE POSSESSION, OPERATE AND APPLY
INCOME.
(a) If an Event of Default occurs and is continuing, Grantor, upon
demand of 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 Encumbered Property, including the Tangible Collateral, without liability
for trespass, damages or otherwise, and may exclude Grantor and its agents and
employees wholly therefrom and may have joint access with Grantor to the books,
papers and accounts of
16
Grantor.
(b) If an Event of Default has occurred and is continuing and
Grantor shall for any reason fail to surrender or deliver the Encumbered
Property or any part thereof after Beneficiary's demand, Beneficiary may obtain
a judgment or decree conferring on Beneficiary or Trustee the right to immediate
possession or requiring Grantor to deliver immediate possession of all or part
of such property to Beneficiary or Trustee and Grantor hereby specifically
consents to the entry of such judgment or decree. Grantor shall pay to
Beneficiary or Trustee, upon demand, all costs and expenses of obtaining such
judgment or decree and reasonable compensation to Beneficiary or Trustee, its
attorneys and agents, and all such costs, expenses and compensation shall, until
paid, be secured by the lien, security title and security interest of this Deed
of Trust.
(c) Upon every such entering upon or taking of possession,
Beneficiary may hold, store, use, operate, manage and control the Encumbered
Property and conduct the business thereof, and, from time to time and without
being under any duty to so act:
(1) make all necessary and proper maintenance, repairs,
renewals and replacements thereto and thereon, and all necessary additions,
betterments and improvements thereto and thereon and purchase or otherwise
acquire fixtures, personalty and other property in connection therewith;
(2) insure or keep the Encumbered Property insured;
(3) manage and operate the Encumbered Property and exercise
all the rights and powers of Grantor in their name or otherwise with respect to
the same;
(4) enter into agreements with others to exercise the powers
herein granted 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 Encumbered Property 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
Grantor under the terms of the Secured Debt Documents.
(5) rent or sublet the Encumbered Property or any portion
thereof for any purpose permitted by this Deed of Trust.
Beneficiary shall surrender possession of the Encumbered Property to
Grantor (i) as may be required by law or court order, or (ii) when all amounts
under any of the terms of the Secured Debt Documents, including this 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.
17
3.5 SEPARATE SALES. To the extent permitted by law or Governmental
Authority, the Encumbered Property 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.
3.6 WAIVER OF APPRAISEMENT, MORATORIUM, VALUATION, STAY, EXTENSION AND
REDEMPTION LAWS. Grantor agrees to the full extent permitted by law that if an
Event of Default occurs and is continuing, neither Grantor nor anyone claiming
through or under it shall or will set up, claim or seek to take advantage of any
appraisement, moratorium, valuation, stay, extension or redemption laws now or
hereafter in force, in order to prevent or hinder the enforcement or foreclosure
of this Deed of Trust or the absolute sale of the Encumbered Property or any
portion thereof or the final and absolute putting into possession thereof,
immediately after such sale, of the purchasers thereof, and Grantor for itself
and all who may at any time claim through or under it, hereby waives, to the
full extent that it may lawfully so do, the benefit of all such laws, and any
and all right to have the assets comprising the Encumbered Property marshaled
upon any foreclosure of the lien hereof and agrees that Beneficiary, Trustee or
any court having jurisdiction to foreclose such lien may sell the Encumbered
Property in part or as an entirety.
3.7 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 indebtedness and other sums
secured hereby, shall be entitled but not obligated to, if it so elects to the
appointment of a receiver to enter upon and take possession of the Encumbered
Property and to collect all earnings, revenues and receipts and apply the same
as the court may direct, and such receiver may be appointed by any court of
competent jurisdiction upon application by Beneficiary. To the extent permitted
by law, Beneficiary may have a receiver appointed without notice to Grantor 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 Encumbered Property
and to collect all earnings, revenues and receipts, whether by a receiver or
otherwise, shall be cumulative to any other right or remedy available to
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.
3.8 SUITS TO PROTECT THE ENCUMBERED PROPERTY. Beneficiary shall have the
power and authority to institute and maintain any suits and proceedings as may
be advisable (a) to prevent
18
any impairment of the Encumbered Property by any acts which may be unlawful or
in violation of this Deed of Trust, (b) to preserve or protect its interest in
the Encumbered Property, or (c) to restrain the enforcement of or compliance
with any legislation or other Legal Requirement that may be unconstitutional or
otherwise invalid, if the enforcement of or compliance with such enactment, rule
or order might impair the security hereunder or be prejudicial to Beneficiary's
interest.
3.9 PROOFS OF CLAIM. In the case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceedings affecting Grantor, any Affiliate or any guarantor, co-maker
or endorser of any of Grantor's obligations, its creditors or its property,
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 Grantor under the Secured Debt Documents, at
the date of the institution of such proceedings, and for any additional amounts
which may become due and payable by Grantor after such date.
3.10 GRANTOR TO PAY AMOUNTS SECURED HEREBY ON ANY DEFAULT IN PAYMENT;
APPLICATION OF MONIES BY BENEFICIARY.
(a) In case of a foreclosure sale of all or any part of the
Encumbered Property and of the application of the proceeds of sale to the
payment of the sums secured hereby, to the extent permitted by law, the Secured
Debtholders shall be entitled to enforce payment from Grantor of any additional
amounts then remaining due and unpaid and to recover judgment against Grantor
for any portion thereof remaining unpaid, with interest at the Default Rate.
(b) Grantor hereby agrees to the extent permitted by law, that no
recovery of any such judgment by the Secured Debtholders or other action by the
Secured Debtholders and no attachment or levy of any execution upon any of the
Encumbered Property or any other property shall in any way affect the Lien and
security interest of this Deed of Trust upon the Encumbered Property 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 3.10 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.
3.11 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.
3.12 NO WAIVER OF ONE DEFAULT TO AFFECT ANOTHER. No waiver of any defaults
hereunder shall extend to or affect any subsequent or any other defaults then
existing, or impair any rights, powers or remedies consequent thereon. If
Beneficiary (a) grants forbearance or an
19
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 Encumbered Property 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 Grantor, or any subsequent purchaser of the Encumbered Property
or any part thereof or any maker, co-signer, surety or guarantor with respect to
any other matters not addressed by such act or omission. No such act or omission
shall preclude 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 Encumbered
Property, 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 Encumbered Property or the indebtedness secured hereby, or with
reference to any of the terms or conditions hereof, as fully and to the same
extent as it might deal with the original parties hereto and without in any way
releasing or discharging any of the liabilities or undertakings hereunder, or
waiving its right to declare such sale or transfer an Event of Default as
provided herein. Notwithstanding anything to the contrary contained in this 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.
3.13 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, entry of judgment or otherwise and such proceedings
shall have been discontinued or abandoned for any reason, or such proceedings
shall have resulted in a final determination adverse to Beneficiary, then and in
every such case Grantor 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.
3.14 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.
20
3.15 INTEREST AFTER EVENT OF DEFAULT. If an Event of Default shall have
occurred and is continuing, all sums outstanding and unpaid under the Secured
Debt Documents, including this Deed of Trust, may bear interest at the Default
Rate until such Event of Default has been cured. Grantor's obligation to pay
such interest shall be secured by this Deed of Trust.
3.16 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 Encumbered Property or
any portion thereof. All expenditures and expenses of the nature in this section
mentioned, and such expenses and fees as may be incurred in the protection of
the Encumbered Property 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 Secured Debt Document, the Encumbered Property or any portion thereof,
including, without limitation, civil, probate, appellate and bankruptcy
proceedings, or in preparation for the commencement or defense of any proceeding
or threatened suit or proceeding, shall be immediately due and payable by
Grantor, with interest thereon at the Default Rate, and shall be secured by this
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.
3.17 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, to the extent permitted by law, any proceedings to
recover such deficiency or deficiencies, all such amounts shall continue to bear
interest at the Default Rate. Grantor waives any defense to Beneficiary's
recovery against Grantor, to the extent permitted by law, of any deficiency
after any foreclosure sale of the Encumbered Property. To the extent permitted
by law, Grantor expressly waives any defense or benefits that may be derived
from any statute granting Grantor any defense to any such recovery by
Beneficiary. In addition, 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 3.16 above. This provision shall survive any
foreclosure or sale of the Encumbered Property, any portion thereof and/or the
extinguishment of the lien hereof.
3.18 WAIVER OF JURY TRIAL. Beneficiary and Grantor each waive any right to
have a jury participate in resolving any dispute whether sounding in contract,
tort or otherwise arising out of, connected with, related to or incidental to
the relationship established between them in connection with this Deed of Trust
or any other Secured Debt Document. Any such disputes shall be resolved in a
bench trial without a jury.
21
3.19 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 Encumbered Property 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 Encumbered Property, 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 Encumbered Property.
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, Grantor shall be released from the covenants,
agreements and obligations of Grantor contained in this Deed of Trust and all
right, title and interest in and to the Encumbered Property shall revert to
Grantor. Beneficiary, at the request and the expense of Grantor, shall promptly
execute a deed of reconveyance and such other documents as may be reasonably
requested by Grantor to evidence the discharge and satisfaction of this Deed of
Trust and the release of Grantor from its obligations hereunder.
4.2 NO WAIVER. The exercise of the privileges granted in this Deed of
Trust to perform Grantor's obligations under the agreements which constitute the
Encumbered Property 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 Grantor rearranged or
renewed, and that any part of the security herein described, or any other
security for the Obligations, may be waived or released, without altering,
varying or diminishing the force, effect or lien or security interest of this
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 Encumbered
Property not expressly so released, until the Obligations are fully paid and
this Deed 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 Grantor 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. Grantor 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 Grantor shall hold possession of
the Encumbered Property or any part thereof, Grantor or the Persons so holding
possession shall be guilty of trespass; and any such Person
22
(including Grantor) 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, Grantor shall not at any time insist upon or plead or in any manner
whatever claim the benefit or advantage of any stay, extension or moratorium law
now or at any time hereafter in force in any locality where the Encumbered
Property or any part thereof may or shall be situated, nor shall Grantor claim
any benefit or advantage from any law now or hereafter in force providing for
the valuation or appraisement of the Encumbered Property 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 Grantor claim or exercise any right conferred by any law now or at
any time hereafter in force to redeem the Encumbered Property so sold or any
part thereof; and Grantor hereby expressly waives all benefit or advantage of
any such law or laws and the appraisement of the Encumbered Property or any part
thereof, and covenants that Grantor shall not hinder or delay the execution of
any power herein granted and delegated to Beneficiary but that Grantor shall
permit the execution of every such power as though no such law had been made.
4.6 NOTICES. Except where certified or registered mail notice is required
by applicable law, any notice to Grantor or 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, 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 IS GOVERNED BY AND SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
4.10 AMENDMENTS. This Deed of Trust may be amended, supplemented or
otherwise modified only by an instrument in writing signed by Grantor and
Beneficiary.
23
4.11 SUCCESSORS AND ASSIGNS. All terms of this Deed of Trust shall run
with the land and bind each of Grantor and Beneficiary and their respective
successors and assigns, and all Persons claiming under or through Grantor or
Beneficiary, as the case may be, or any such successor or assign, and shall
inure to the benefit of Beneficiary and Grantor, and their respective successors
and assigns.
4.12 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 Encumbered Property 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 Encumbered Property; provided that
nothing in this Section 4.12 shall grant Beneficiary the right to alter or
modify the Deed of Trust without the consent of the Grantor unless otherwise
specifically permitted in this Deed of Trust.
4.13 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 Grantor
under the Priority Lien Documents; (ii) the Parity Lien Debt (including future
advances to be made with respect thereto), and all other Obligations of Grantor
under the Parity Lien Documents; (iii) all Obligations under any other Priority
Lien Debt or Parity Lien Debt; (iv) any sums advanced or expenses or costs
incurred by 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 Grantor 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 Grantor 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.
4.14 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 Encumbered
Property for debts contracted or liability or damages incurred in the management
or operation of the Encumbered Property. Such persons shall have the right to
rely on any instrument, document or signature authorizing or supporting any
action taken or proposed to be taken by them hereunder, believed by them in good
faith to be genuine. 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. Grantor will, from
time to time, pay the compensation due hereunder and reimburse such parties for,
24
and save them harmless against, any and all liability and expenses which may be
incurred by them in the performance of their duties.
4.15 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
Encumbered Property, 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.
4.16 ACTIONS OR ADVANCES BY BENEFICIARY OR TRUSTEE. Each and every
covenant herein contained shall be performed and kept by Grantor solely at
Grantor's expense. If Grantor 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 Grantor's behalf, and Grantor 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 Grantor from any
default hereunder.
4.17 SEVERABILITY AND COMPLIANCE WITH USURY LAW. The Secured Debt
Documents are intended to be performed in accordance with, and only to the
extent permitted by, all applicable Applicable Laws and Legal Requirements. If
any provision of any of the Secured Debt Documents or the application thereof to
any person or circumstance shall, for any reason and to any extent, be invalid
or unenforceable, neither the remainder of the instrument in which such
provision is contained, nor the application of such provision to other persons
or circumstances, nor the other instruments referred to hereinabove, shall be
affected thereby, but rather shall be enforceable to the greatest extent
permitted by law. It is expressly stipulated and agreed to be the intent of
Grantor at all times to comply with the applicable State law governing the
maximum rate or amount of interest payable on or in connection with the
Obligations. If the Applicable Law is ever judicially interpreted so as to
render usurious any amount called for under the Secured Debt Documents, or
contracted for, charged, taken, reserved or received with respect to the
extension of credit evidenced by the Secured Debt Documents or if acceleration
of the maturity of the Obligations or if any prepayment by Grantor results in
Grantor having paid any interest in excess of that permitted by law, then it is
Grantor's and Beneficiary'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 Grantor), and the provisions of the Secured
Debt Documents immediately be deemed reformed and the amounts thereafter
collectible thereunder reduced, without the necessity of the execution of any
new document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder and thereunder.
The right to
25
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.
4.18 RELEASE OF COLLATERAL. Notwithstanding any provision herein to the
contrary, the Encumbered Property 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.
4.19 TIME OF THE ESSENCE. Grantor acknowledges that time is of the essence
in performing all of Grantor's obligations set forth herein.
4.20 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.
4.21 FIXTURE FILING. Under Uniform Commercial Code, Grantor and
Beneficiary agree, to the extent permitted by law, that: (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 9334 and 9502 of the UCC; (ii) all or part of the Encumbered
Property are or are to become fixtures; and (iii) the addresses of Grantor and
Beneficiary are as set forth on the first page of this Deed of Trust.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
26
[OTAY MESA/METCALF], CALIFORNIA
IN WITNESS WHEREOF, Grantor has caused this Deed of Trust to be duly
executed and delivered as of the day and year first above written.
GRANTOR:
CALPINE CORPORATION, a Delaware
corporation
By: ____________________________________
Name: __________________________________
Title: _________________________________
S-1
STATE OF )
)
COUNTY OF _________ )
On _______________, before me, ____________________, a Notary Public
in and for said state, personally appeared _______________, personally known to
me (or proved to me on the basis of satisfactory evidence) to be the person
whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity, and that by his signature on the
instrument the person, or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
________________________________________
Notary Public in and for said State
S-2
[OTAY MESA/METCALF], CALIFORNIA
EXHIBIT A
DESCRIPTION OF LEASED PREMISES
See attached.
[OTAY MESA/METCALF], CALIFORNIA
EXHIBIT B
DESCRIPTION OF EASEMENTS
[legal descriptions to be inserted at a later date]