Exhibit 10.24
RECORDING REQUESTED BY:
WHEN RECORDED RETURN TO:
The Law Offices of David E. Chanover
16776 Bernardo Center Drive
Suite 110B
San Diego, California 92128
Attention: David E. Chanover
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COSO FINANCE PARTNERS
(as Trustor)
to
CHICAGO TITLE INSURANCE COMPANY
(as Trustee)
for the use and benefit of
U.S. BANK TRUST NATIONAL ASSOCIATION
(as Beneficiary)
DEED OF TRUST, ASSIGNMENT OF RENTS,
FIXTURE FILING AND SECURITY AGREEMENT
(NAVY I)
Dated: May 28, 1999
Location: County of Inyo and
County of Kern,
State of California
DEED OF TRUST, ASSIGNMENT OF RENTS,
FIXTURE FILING AND SECURITY AGREEMENT
(NAVY I)
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, FIXTURE FILING AND SECURITY
AGREEMENT (NAVY I) (this "Deed of Trust") is made as of May 28, 1999, by COSO
FINANCE PARTNERS, a California general partnership whose address is c/o New CLOC
Company, 1114 Avenue of the Americas, 41st Floor, New York, New York 10036, as
trustor ("Trustor"), to CHICAGO TITLE INSURANCE COMPANY, a Missouri corporation,
whose address is 2425 West Shaw, Fresno, California 93711, as trustee
("Trustee"), in favor of U.S. Bank Trust National Association, whose address is
One California Street, 4th Floor, San Francisco, California 94111, as
beneficiary ("Beneficiary") not in its individual capacity but solely as trustee
and collateral agent pursuant to the Indenture of even date herewith (the
"Indenture") among Beneficiary, Caithness Coso Funding Corp., as issuer (the
"Issuer"), Trustor, Coso Power Developers, a California general partnership
("CPD") and Coso Energy Developers, a California general partnership ("CED"), as
guarantors. Unless otherwise defined herein, capitalized terms shall have the
meanings set forth in the Indenture, which is hereby incorporated herein by this
reference.
NOW, THEREFORE, in consideration of, and to secure the payment and
performance of the Obligations (as hereinafter defined) which Obligations may
increase, decrease and increase again from time to time and may be evidenced by
one or more notes, Trustor has given, granted, bargained, sold, alienated,
conveyed, confirmed and assigned, and by these presents does give, grant,
bargain, sell, alienate, convey, confirm and assign unto Trustee, its successors
and assigns, with general warranties of title as provided herein or under Civil
Code Section 1113 (but subject to Permitted Liens), in trust with power of sale
and right of entry and possession forever, for the benefit and security of
Beneficiary as Collateral Agent, all right, title and interest of Trustor in and
to the following property, assets, rights and interests, whether now owned or
hereafter acquired (such property, assets, rights and interests being
collectively referred to herein as the "Trust Property"):
(a) all of Trustor's right, title and interest in and to that certain
real property located in the County of Inyo, State of California, described
in Exhibit A attached hereto and by this reference incorporated herein (the
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"Navy I Land");
(b) all of Trustor's right, title and interest in and under that
certain agreement described in Exhibit B attached hereto (the "Navy
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Contract"), together with all renewals, extensions, supplements,
amendments, cancellations or terminations thereof and all credits,
deposits, options, privileges and rights thereunder;
(c) all of Trustor's right, title and interest in and to that certain
approximately 80 megawatt geothermal electrical generating facility (and
each unit thereof) commonly known as Navy I, together with the related
geothermal resource gathering system, geothermal resource disposal and
injection system, geothermal resource reserves, interconnection equipment
and Transmission Line (as defined below) system (the "Navy I Project");
(d) all of Trustor's right, title and interest in and to that certain
real property located in the County of Inyo, State of California, described
in Exhibit C attached hereto and by this reference incorporated herein (the
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"BLM North Lease Premises"), including, without limitation, all of its
right, title and interest in and under those certain geothermal resources
leases (the "BLM North Leases") described in said Exhibit C (as and when
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such right, title and interest is
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transferred to Trustor), together with all renewals, extensions,
supplements, amendments, cancellations or terminations thereof and all
credits, deposits, options, privileges and rights thereunder;
(e) all of Trustor's right, title and interest in and to that certain
real property located in the County of Inyo, State of California, described
in Exhibit D attached hereto and by this reference incorporated herein (the
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"BLM Right-of-Way Premises"), including, without limitation, all of its
right, title and interest in and under those certain right-of-way grants
(the "BLM Rights-of-Way") described in said Exhibit D, together with all
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renewals, extensions, supplements, amendments, cancellations or
terminations thereof and all credits, deposits, options, privileges and
rights thereunder;
(f) all of Trustor's right, title and interest in and to that certain
real property located in the County of Inyo, State of California and in the
County of Kern, State of California, described in Exhibit E attached hereto
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and by this reference incorporated herein (the "Transmission Line
Property"), and all of Trustor's right, title and interest in and to that
certain 115KV electric transmission line (and related improvements,
equipment and facilities) located on the Transmission Line Property that
connects the Navy I Project to Southern California Edison Company's
interconnect facility at Inyokern, California (the "Transmission Line")
(the Navy I Land, the BLM North Lease Premises, the BLM Right-of-Way
Premises and the Transmission Line Property are collectively referred to
herein as the "Site");
(g) all of Trustor's right, title and interest in and under any
contracts, agreements and other documents for or relating to (i) the
acquisition, development, possession, use, exchange or disposition of
geothermal resources, steam, condensate, injectate or other fluids and/or
(ii) the ownership or co-ownership (as the case may be) of pipelines, wells
and/or related improvements, equipment and facilities, including, without
limitation, in and under that certain (1) Coso Geothermal Exchange
Agreement dated as of January 11, 1994 among Trustor, CPD and CED, as
heretofore or hereafter amended or modified, and (2) Cotenancy Agreement of
even date herewith among CED, CPD and Trustor, a Memorandum of which will
be recorded in the Official Records concurrently herewith, in each case
together with all renewals, extensions, supplements, options, amendments,
cancellations or terminations thereof (the "Steam Exchange Agreements");
(h) all of Trustor's right, title and interest in and to any (i)
easements, rights-of-way, licenses and entry rights, (ii) gores of land,
(iii) roads, streets, ways, alleys or passages, (iv) interests in land
lying in the bed of any street, road or avenue, whether opened or proposed,
on, near or adjoining the Site or any part thereof, (v) sewer rights, (vi)
air rights, (vii) waters, water courses, water rights and powers, (viii)
profits-a-prendre, minerals, geothermal substances, oil, gas and other
hydrocarbon substances, (ix) exploration, development and production
rights, and (x) all other estates, rights, titles, interests, privileges,
franchises, liberties, tenements, hereditaments, consents, options,
appendages and appurtenances of any nature whatsoever, in any way
belonging, relating or pertaining to or connected with the Site, the Navy
Contract, the Navy I Project, the BLM North Leases, the BLM Rights-of-Way,
the Transmission Line, the Improvements or any other of the Trust Property,
or any part thereof, together with all renewals, extensions, supplements or
amendments thereof;
(i) all leases (including oil, gas, geothermal and other mineral
leases), subleases, franchises, licenses, concessions, permits, power
purchase and other contracts and agreements affecting the use or occupancy
of the Site, the Navy Contract, the Navy I Project, the BLM North
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Leases, the BLM Rights-of-Way, the Transmission Line, the Improvements or
any other of the Trust Property, or any part thereof, now or hereafter
entered into, and any renewals or extensions thereof (hereinafter referred
to as the "Leases"); and the right to receive and apply the rents, issues,
profits, royalties, income, accounts receivable, revenues, deposits,
security deposits, receipts and other benefits of the Trust Property to the
extent of Trustor's interest therein, including, without limitation, the
proceeds of all hydrocarbons or other minerals produced from the Trust
Property, all delay royalties, rentals and bonuses from any oil, gas,
geothermal or other mineral lease, any revenues under any power purchase or
sale contracts, and any amounts received from the U.S. Navy (hereinafter
referred to as the "Rents") to the payment of the Obligations;
(j) all of Trustor's right, title and interest in and to any and all
buildings, structures, improvements or fixtures of any kind, now or
hereafter erected or located on the Site or any part thereof, including,
without limitation, the Navy I Project (the "Improvements");
(k) all facilities, machinery, equipment, apparatus, appliances,
fittings, goods, materials, supplies, and other items and property of every
kind and nature whatsoever owned by Trustor, or in which Trustor now or
hereafter has any right, title or interest, now or hereafter located in or
upon, or used in connection with the present or future development,
operation, occupancy or other utilization (whether temporarily or
permanently) of or activities on, the Site, the Navy I Project, any of the
other Trust Property or any part thereof, whether or not attached to or
installed in any Improvements, and all renewals, replacements and
substitutions thereof and additions thereto, including, without limitation,
any and all (i) wells, including production, injection, test, temperature
gradient and water wells, well casings, wellhead equipment, geothermal
resource gathering, injection and disposal systems, pipelines, pumps,
sumps, test holes, evaporation ponds and other facilities and equipment
used to produce, inject, store, transport or utilize geothermal substances
or condensate, (ii) turbines, generators, dynamos, separators, scrubbers,
demisters, cooling systems and towers, (iii) overhead and underground
electrical transmission, distribution and collector lines and related
systems (including the Transmission Line), switchyards, substations,
transformers, energy storage facilities, conductors, separators, circuit
breakers, interconnection equipment, conduits, footings, towers, poles,
crossarms, guy lines, anchors and wires, (iv) overhead and underground
control, monitoring, communications and radio relay systems and
telecommunications equipment, (v) roads, erosion control facilities, dikes,
signs and fences, (v) heating, ventilating, plumbing, laundry,
incinerating, air conditioning, air cooling, lighting, alarm, call,
mechanical, electrical, water, gas, telephone, utility, wastewater,
treatment, pollution abatement, sprinkler, fire control, extinguishing,
safety protection and other systems, facilities, installations and
apparatus, (vii) sheds, engines, motors, boilers, stokers, pumps, fans,
blowers, switchboards, computers, software, escalators, elevators,
compressors and tanks, (viii) partitions, ducts, shafts, vents, pipes,
radiators, wiring, floor coverings and awnings, (ix) tools, (x) spare
parts, (xi) motor vehicles, (xii) furnishings, furniture and decorations,
(xiii) building, cleaning, maintenance and service equipment, materials,
supplies, goods and property (whether or not covered by any warehouse
receipts or bills of lading or other such documents), (xiv) maps, plans,
specifications, architectural, engineering, construction or shop drawings,
manuals or similar documents, (xv) copyrights, trademarks, trade names and
other intellectual property, and (xvi) any other facilities, machinery,
equipment, apparatus, fittings, goods, materials, supplies, and other items
and property associated with or incidental to any of the foregoing or to
the generation, conversion, storage, switching, metering, step-up, step-
down, transmission, conducting, wheeling, sale or other use or conveyance
of electricity (collectively, the "Equipment"), as well as the right, title
and interest of Trustor in and to any of the Equipment
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which may be subject to any security agreements (as defined in the Uniform
Commercial Code of the State of California) superior in lien to the lien of
this Deed of Trust;
(l) all awards or payments, including interest thereon, and the right
to receive the same, which may be made with respect to the Trust Property,
whether from state fund sharing, from the exercise of the right of eminent
domain (including any transfer made in lieu of the exercise of said right),
from changes of grade of street, from the U.S. Navy under the Navy
Contract, or for any other injury to or decrease in the value of the Trust
Property now or hereafter located thereon, whether direct or consequential,
which said awards and payments are hereby assigned to Beneficiary, and
Beneficiary is hereby authorized to collect and receive the proceeds
thereof and to give proper receipts and acquittances therefor;
(m) all refunds or rebates of all taxes or charges in lieu of taxes,
assessments, water rates, sewer rents and other charges, including vault
charges and license or permit fees for the use of vaults, chutes and
similar areas on or adjoining the Site, now or hereafter levied or assessed
against the Trust Property (hereinafter referred to as the "Taxes");
(n) all inventory, accounts, books, records and general intangibles
in whatever form and however stored, owned by Trustor, or in which Trustor
now or hereafter has any right, title or interest, now or hereafter located
upon, arising in connection with or concerning the Trust Property;
(o) all proceeds of and any unearned premiums on any insurance
policies now or hereafter covering the Trust Property, including, without
limitation, the right to receive the proceeds of any insurance, judgments
or settlements made in lieu thereof, for damage to the Trust Property or
for any defect in the title to the Trust Property or any part thereof;
(p) the right, in the name and on behalf of Trustor, to appear in and
defend any action or proceeding brought with respect to the Trust Property
and to commence any action or proceeding to protect the interest of
Beneficiary in the Trust Property;
(q) all of Trustor's right, title and interest in and to all plans
and specifications prepared for or relating to the design, development,
construction, management and use of Improvements or Equipment or other
development of the Trust Property (including, without limitation, all
amendments, modifications, supplements, general conditions and addenda
thereof or thereto), and all studies, data and drawings related thereto,
and all contracts and agreements of Trustor relating to the aforesaid plans
and specifications or to the aforesaid studies, data and drawings or to the
design, development, construction, management and use of Improvements, the
Equipment or any of the other Trust Property;
(r) all contracts with property managers, surveyors, real estate
advisors, consultants and brokers, geothermal energy advisors and
consultants, engineers, and other like agents and professionals that relate
to any part of the Trust Property, including without limitation, any
Improvements constructed or to be constructed on the Site or any part
thereof or any Equipment to be placed, installed, used or stored on the
Site or any part thereof, and all maps, reports, surveys, tests and studies
of or relating to any of the Trust Property, owned by Trustor or in which
Trustor has or shall have an interest and now or hereafter in the
possession of Trustor or any such agent or professional;
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(s) all present and future agreements, permits, licenses,
entitlements and approvals, as well as all modifications, supplements,
extensions and renewals thereof, now existing or hereafter made, in which
Trustor now or hereafter has an interest, relating to the use, development
and/or occupancy of the Site, the Improvements and/or the Equipment;
(t) all the estate, right, title, interest, claim or demand of any
nature whatsoever of Trustor, either in law or in equity, in possession or
expectancy, in and to the Trust Property and in all replacements,
substitutes, renewals, betterments and extensions of and all additions to
any of the Improvements or Equipment, or any part thereof;
(u) all products and proceeds of any of the Trust Property herein
described; and
(v) all bank accounts and trust accounts of Trustor.
This Deed of Trust secures the following obligations which shall heretofore
and hereinafter collectively be referred to as the "Obligations":
(i) The payment of all indebtedness and the performance of all
obligations of Trustor as evidenced in Section 9 of the Indenture entitled
"Guarantees" and as further evidenced by that certain Notation of Guarantee
of even date herewith executed by Trustor, CED and CPD, including, without
limitation, the guarantee of payment of (1) $110,000,000 6.80% Senior
Secured Notes due in 2001 and (2) $303,000,000 9.05% Senior Secured Notes
due in 2009 (collectively, the "Senior Secured Notes") issued by the Issuer
(the "Guarantee");
(ii) The payment of such further sums and/or performance of such
further obligations as Trustor or the then record owner of the Trust
Property or any part thereof may undertake to pay and/or perform for
Beneficiary and its successor or assigns, when such borrowing or obligation
is evidenced by a writing or writings reciting that it or they are secured
by this Deed of Trust;
(iii) The payment of all indebtedness of Trustor owing to a Permitted
Additional Senior Lender; and
(iv) The satisfaction and performance of all other debts, obligations,
covenants, agreements and liabilities of the Issuer or Trustor to Trustee,
Beneficiary or any of the other Secured Parties arising out of, connected
with or related to this Deed of Trust, the Guarantee, any of the Financing
Documents or any other agreement now or hereafter executed by the Issuer or
Trustor, and all amendments, extensions, and renewals of the foregoing
documents, whether now existing or hereafter arising, voluntary or
involuntary, absolute or contingent, liquidated or unliquidated, and
whether or not from time to time decreased or extinguished and later
increased, created, or incurred.
To protect the security of this Deed of Trust, Trustor covenants with and
represents and warrants to Trustee and Beneficiary as follows:
1. Payment of Obligations. Trustor will pay and perform the
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Obligations at the time and in the manner provided for its payment and
performance in this Deed of Trust, the Guarantee and the other Financing
Documents, as applicable.
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2. Warranty of Title. Trustor warrants its right, title or interest,
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as applicable, in and to the Site, the Navy Contract, the Transmission Line, the
Improvements, the Equipment and the balance of the Trust Property and the
validity and priority of the lien of this Deed of Trust and the estate hereof
against the claims and demands of all Persons whomsoever, other than with
respect to Permitted Liens. Trustor also represents and warrants that (i)
Trustor is now, and after giving effect to this Deed of Trust, will be, in a
solvent condition, (ii) the execution and delivery of this Deed of Trust by
Trustor does not constitute a "fraudulent conveyance" within the meaning of
Title 11 of the United States Code (the "Bankruptcy Code") as now constituted or
under any other applicable statute, and (iii) no bankruptcy or insolvency
proceedings are pending or contemplated by or, to the best of Trustor's
knowledge, against Trustor.
3. Notice. Trustor hereby requests that a copy of notice of default
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and notice of sale be mailed to it at the address set forth below, and such
address is also the mailing address of Trustor, as debtor, under the California
Uniform Commercial Code. Trustor hereby covenants to cure any default within
the time period required by the Financing Documents upon receipt of notice of
such default. Beneficiary's address given below is the address for Beneficiary
under the California Uniform Commercial Code. Any notice, request, demand,
statement, authorization, approval or consent made hereunder shall be deemed
given or furnished (i) when addressed to the party intended to receive the same
at the address of such party set forth below, and delivered at such address or
(ii) three (3) days after the same is deposited in the United States mail as
first class certified mail, return receipt requested, postage prepaid:
If to Trustor:
Coso Finance Partners
c/o New CLOC Company
1114 Avenue of the Americas, 41st Floor
New York, New York 10036
Attention: President
If to Trustee:
Chicago Title Insurance Company
2425 West Shaw
Fresno, California 93711
Attention: Trust Department
If to Beneficiary:
U.S. Bank Trust National Association
One California Street, Suite 400
San Francisco, California 94111
Attention: Trust Officer
4. Sale of Trust Property. This Deed of Trust hereby contains more
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than one power of sale and Beneficiary, in its sole discretion, may conduct one
or multiple foreclosure sales in connection herewith. If this Deed of Trust is
foreclosed, or the power of sale hereunder is exercised, the Trust Property, or
any interest therein, may, at the discretion of Beneficiary, be sold in one or
more parcels or in several interests or portions and in any order or manner.
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5. No Credits on Account of the Obligations. Trustor will not claim
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or demand or be entitled to any credit or credits on account of the Obligations
for any part of the Taxes assessed against the Trust Property or any part
thereof, and no deduction shall otherwise be made or claimed from the taxable
value of the Trust Property, or any part thereof, by reason of this Deed of
Trust or the Obligations.
6. Offset, Counterclaims and Defenses. Any assignee of this Deed of
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Trust and the Obligations secured hereby shall take the same free and clear of
all offsets, counterclaims or defenses of any nature whatsoever which Trustor
may have against any assignor of this Deed of Trust and the Obligations secured
hereby, and no such offset, counterclaim or defense shall be interposed or
asserted by Trustor in any action or proceeding brought by any such assignee
upon this Deed of Trust or the Obligations secured hereby and any such right to
interpose or assert any such offset, counterclaim or defense in any such action
or proceeding is hereby expressly waived by Trustor.
7. Other Security for the Obligations. Trustor shall observe and
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perform all of the terms, covenants and provisions to be observed or performed
by Trustor contained in this Deed of Trust and in the Financing Documents to
which Trustor shall be a party evidencing, securing or guaranteeing payment of
the Obligations, in whole or in part, or otherwise executed and delivered in
connection with this Deed of Trust or the Financing Documents.
8. Preservation of Trust Property. Trustor shall do any and all
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acts which, from the character or use of the Trust Property, may be reasonably
necessary to protect and preserve the lien, the priority of the lien and the
security of Beneficiary granted herein, the specific enumerations herein not
excluding the general. Trustor shall maintain and preserve the Trust Property
in accordance with the requirements of the Indenture. Further, with respect to
the Navy Contract, the BLM North Leases, the BLM Rights-of-Way, Trustor's rights
in and to the Transmission Line and the Transmission Line Property, and the
Steam Exchange Agreements (collectively, the "Primary Rights"), Trustor hereby
agrees as follows, except as otherwise expressly permitted or required in the
Indenture:
(a) not to amend, change, alter, cancel, surrender, release, waive,
supplement, terminate or modify, nor permit the amendment, change, alteration,
cancellation, surrender, release, waiver, supplement, termination, or
modification (each, an "Amendment") of any of the Primary Rights or the estate
or rights created thereby or any interest therein without the prior written
consent of Beneficiary. Consent to one Amendment shall not be deemed to be a
waiver of the right to require consent to other, future or successive
Amendments. Any Amendment, whether oral or in writing, made without the prior
written consent of Beneficiary, shall not be valid or effective;
(b) to make all payments and to keep and perform promptly each and
every covenant, obligation and agreement of the lessee, transferee, grantee,
licensee or holder (as the case may be) in the Primary Rights, not to commit,
suffer or permit any default thereunder and not to take any action or omit to
take any action which would effect or permit the termination or cancellation of
any of the Primary Rights. Trustor shall take all actions necessary to keep the
Primary Rights unimpaired. Trustor shall promptly deliver to Beneficiary copies
of all material notices, demands or complaints received by Trustor from the
United States Navy, the United States Department of the Interior, Bureau of Land
Management (the "BLM"), CPD, CED or any other third party in connection with any
of the Primary Rights, and promptly notify Beneficiary in writing with respect
to any default or alleged default by any party thereto (whether or not a notice
of default has been issued under any of the Primary Rights) and deliver to
Beneficiary within ten (10) business days of Trustor's receipt of any notice of
default a certificate executed by Trustor describing the default, the actions
Trustor intends to take to cure such default, the length of time Trustor expects
to take to cure such default and the status of any actions
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taken to cure such default. Trustor shall also furnish to Beneficiary such
other information as Beneficiary may reasonably request concerning Trustor's
performance of its covenants, obligations and agreements under or with respect
to the Primary Rights. Beneficiary shall have the option but not the obligation
to cure any such default and to perform any or all of Trustor's obligations
thereunder;
(c) that any subordination of any of the Primary Rights to any fee
mortgage, to any lease, or to any other interest, either orally or in writing,
made without the prior written consent of Beneficiary, shall not be valid or
effective;
(d) that if any of the Primary Rights is terminated prior to the
natural termination of its term by reason of default of Trustor thereunder, and
if, pursuant to any provision of such Primary Rights, or otherwise, Beneficiary
or its designee shall acquire from the United States Navy, the BLM or any other
third party, as the case may be, a new contract, lease or right-of-way in
respect of the Site or any part thereof, then Trustor shall not have any right,
title or interest in or to such new contract, lease or right-of-way or the
estate created thereby; and
(e) that the provisions hereof shall be deemed to be obligations of
Trustor in addition to Trustor's obligations as lessee, grantee, transferee,
licensee or holder, as the case may be, with respect to any similar matters
contained in any of the Primary Rights, and the inclusion herein of any
covenants and agreements relating to similar matters as to which Trustor is
obligated under any of the Primary Rights shall not restrict or limit Trustor's
duties and obligations to keep and perform promptly all of its covenants,
agreements and obligations as lessee, grantee, transferee, licensee or holder,
as the case may be, under the Primary Rights; provided, however, that nothing in
this Deed of Trust shall be construed as requiring the taking of or the
committing to take any action by Trustor or Beneficiary which would cause a
default under any of the Primary Rights.
9. Further Transfer of Trust Property. Except as otherwise
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expressly permitted or required in the Indenture, without the prior written
consent of Beneficiary being first had and obtained, Trustor shall not (a)
execute or deliver any pledge, security agreement, mortgage, deed of trust or
other instrument of hypothecation covering all or any portion of the Trust
Property or any interest therein or (b) sell, contract to sell, lease with
option to purchase, convey, alienate, transfer, sublease or otherwise dispose of
all or any portion of the Trust Property or any interest therein, in each case
whether voluntarily or involuntarily, by operation of law or otherwise. Consent
to one such transaction shall not be deemed to be a waiver of the right to
require consent to future or successive transactions. Beneficiary may grant or
deny such consent in its sole discretion and, if consent should be given, any
such transfer shall be subject to this Deed of Trust, and any such transferee
shall assume all obligations hereunder and agree to be bound by all provisions
contained herein and therein. Such assumption shall not, however, release
Trustor from any liability under this Deed of Trust without the written consent
of Beneficiary.
10. Eminent Domain. In the event that any proceeding or action be
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commenced for the taking of the Trust Property, or any part thereof or interest
therein, for public or quasi-public use under the power of eminent domain,
condemnation or otherwise, or if the same be taken or damaged by reason of any
public improvement or condemnation proceedings, or in any other manner
(collectively, a "Condemnation"), or should Trustor receive any notice or other
information regarding such proceeding, action, taking or damage, Trustor shall
give prompt written notice thereof to Beneficiary. Beneficiary shall be
entitled to give or withhold its consent to any compromise or settlement in
connection with such taking or damage. All compensation, awards, damages,
rights of action and proceeds awarded to Trustor by reason of any such taking or
damage (the "Condemnation Proceeds") are hereby absolutely and unconditionally
assigned to Beneficiary, and Trustor agrees to execute such further assignments
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of the Condemnation Proceeds as Beneficiary or Trustee may require. All such
Condemnation Proceeds shall be applied as provided in the Credit Agreement of
even date herewith between Issuer and Trustor.
11. Assignment of Contracts. In addition to any other grant,
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transfer or assignment effectuated hereby, and without in any manner limiting
the generality of the grants given above, Trustor shall assign to Beneficiary,
as security for the Obligations, Trustor's interest in all agreements,
contracts, leases, licenses and permits affecting the Site and Improvements in
any manner whatsoever, such assignments to be made, if so requested by
Beneficiary, by instruments in form satisfactory to Beneficiary; but no such
assignment shall be construed as a consent by Beneficiary to any agreement,
contract, license or permit so assigned, or to impose upon Beneficiary any
obligations with respect thereto.
12. Anti-Merger. There shall be no merger of any of the Primary
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Rights or the estates or interests created thereby (collectively, the "Estate")
with the fee estate in the Site or any part thereof by reason of any of those
interests coming into common ownership, unless Beneficiary consents in writing
thereto. Further, if Trustor acquires any interest in the fee estate to the
Site or any part thereof, then the lien of this Deed of Trust will
simultaneously and without further action become extended to encumber Trustor's
interest in the fee estate in addition to remaining a lien on the Estate, and
Trustor agrees, upon request by Beneficiary and at no cost to Beneficiary, to
execute, acknowledge and deliver to Beneficiary all further instruments and
documents that Beneficiary believes to be appropriate to provide further
evidence of the lien of this Deed of Trust on such fee interest. Where the lien
of this Deed of Trust has been extended to cover any interest of Trustor in the
fee estate, then in the event of the exercise of any power of sale under this
Deed of Trust, Beneficiary will have the right to sell the Estate and the fee
interest of Trustor separately or together at the election of Beneficiary.
13. Documentary Stamps. If at any time the United States of America,
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any state thereof or any governmental subdivision of any such state, shall
require revenue or other stamps to be affixed to the Financing Documents or this
Deed of Trust, or that any taxes be paid in connection with the Financing
Documents or this Deed of Trust, Trustor shall pay for the same, with interest
and penalties thereon, if any.
14. Right of Entry. Beneficiary, may at any reasonable time or times
--------------
make or cause to be made entry upon and inspection of the Trust Property or any
part thereof in person or by agent.
15. Event of Default. The term "Event of Default," whenever used in
----------------
this Deed of Trust, shall mean any one or more of the events of default listed
or otherwise provided in the Indenture or any other Financing Document, subject
to such cure rights as may be expressly set forth in the Indenture or such other
Financing Document (whether any such event shall be voluntary or involuntary or
come about or be effected by operation of law or pursuant to or in compliance
with any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body).
16. Appointment of Receiver. Trustee or Beneficiary, in any action
-----------------------
(or multiple actions) to foreclose this Deed of Trust or exercise the power of
sale granted under this Deed of Trust or upon the actual or threatened waste to
any part of the Trust Property or upon the occurrence of an Event of Default,
shall be at liberty, without notice, to apply for the appointment of a receiver,
and shall be entitled to the appointment of such receiver as a matter of right,
without regard to the value of the Trust Property as security for the
Obligations, or the solvency or insolvency of any Person then liable for the
payment of the Obligations.
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17. Non-Waiver. The failure of Beneficiary to insist upon strict
----------
performance of any term of this Deed of Trust shall not be deemed to be a waiver
of any term of this Deed of Trust. Trustor shall not be relieved of Trustor's
obligation to pay and perform the Obligations at the time and in the manner
provided for its payment in the Financing Documents and this Deed of Trust by
reason of (i) failure to comply with any request(s) of Trustor to take any
action to foreclose this Deed of Trust or otherwise enforce any of the
provisions hereof or of the Financing Documents or any other mortgage, deed of
trust, instrument or document securing or guaranteeing the payment of the
Obligations or a portion thereof, (ii) the release, regardless of consideration,
of the whole or any part of the Trust Property or any other security for the
Obligations, or (iii) any agreement or stipulation between Beneficiary and any
subsequent owner or owners of the Trust Property or other Person extending the
time of payment or otherwise modifying or supplementing the terms of this Deed
of Trust or the Financing Documents evidencing, securing or guaranteeing payment
of the Obligations or any portion thereof, without first having obtained the
consent of Trustor (but without prejudice to the rights of Trustor under the
Financing Documents), and in the latter event, Trustor shall continue to be
obligated to pay and perform the Obligations at the time and in the manner
provided in the Financing Documents and this Deed of Trust, as so extended,
modified and supplemented, unless expressly released and discharged from such
obligation by Beneficiary in writing. Regardless of consideration, and without
the necessity for any notice to or consent by the holder of any subordinate
lien, encumbrance, right, title or interest in or to the Trust Property,
Beneficiary may release any Person at any time liable for the payment of the
Obligations or any portion thereof or all or any part of the security held for
the Obligations and may extend the time of payment or otherwise modify the terms
of the Financing Documents or this Deed of Trust, including, without limitation,
a modification of the interest rate payable on the principal balance of the
Obligations, without in any manner impairing or affecting this Deed of Trust or
the lien thereof or the priority of this Deed of Trust, as so extended and
modified, as security for the Obligations over any such subordinate lien,
encumbrance, right, title or interest. Beneficiary may resort for the payment
of the Obligations to any other security held by Beneficiary in such order and
manner as Beneficiary in its discretion, may elect. Beneficiary may take action
to recover the Obligations, or any portion thereof, or to enforce any covenant
hereof without prejudice to the right of Beneficiary thereafter to foreclose
this Deed of Trust. Beneficiary shall not be limited exclusively to the rights
and remedies herein stated but shall be entitled to every additional right and
remedy now or hereafter afforded by law or equity. The rights of Beneficiary
under this Deed of Trust shall be separate, distinct and cumulative, and none
shall be given effect to the exclusion of the others. No act of Beneficiary
shall be construed as an election to proceed under any one provision herein to
the exclusion of any other provision.
18. Power of Sale. Upon the occurrence and during the continuance of
-------------
an Event of Default, Beneficiary may at any time, at its option and in its sole
discretion, declare the Obligations to be due and payable and the same shall
thereupon become immediately due and payable, including any prepayment charge or
fee payable under the terms of the Financing Documents. Beneficiary may also do
any or all of the following; provided, however, that any of the following
actions shall be undertaken in a commercially reasonable manner and in
accordance with applicable law; and provided, further, that Beneficiary shall
have no obligation to do any of the following:
(a) Either in person or by agent, with or without bringing any action
or proceeding or by a receiver appointed by a court and without regard to the
adequacy of Beneficiary's security, enter upon and take possession of the Trust
Property or any part hereof and do any acts which Beneficiary deems necessary or
desirable to preserve the value, marketability or rentability of the Trust
Property or to increase the income therefrom or to protect the security hereof
and with or without taking possession of any of the Trust Property, sue for or
otherwise collect all Rents and profits including those past due and unpaid, and
apply the same, less costs and expenses of operation and collection including
11
attorneys' fees and expenses, upon the Obligations secured hereby with the
remainder, if any, to the Person or Persons legally entitled thereto. The
collection of Rents and profits and the application thereof shall not cure or
waive any Event of Default or notice thereof or invalidate any act done in
response thereto or pursuant to such notice.
(b) Bring an action in any court of competent jurisdiction to
foreclose this instrument or to enforce any of the covenants hereof.
(c) Exercise any or all of the remedies available to a secured party
under the Uniform Commercial Code.
(d) Beneficiary may elect to cause the Trust Property or any part
thereof to be sold under the power of sale herein granted in any manner
permitted by applicable law. In connection with any sale or sales hereunder,
Beneficiary may elect to treat any of the Trust Property which consists of a
right in action or which is property that can be severed from the real property
covered hereby or any improvements thereon without causing structural damage
thereto as if the same were personal property, and dispose of the same in
accordance with applicable law, separate and apart from the sale of real
property. Any sale of any personal property hereunder shall be conducted in any
manner permitted by Section 9501 or any other applicable sections of the
California Uniform Commercial Code. Where the Trust Property consists of real
and personal property or fixtures, whether or not such personal property is
located on or within the real property, Beneficiary may elect in its discretion
to exercise its rights and remedies against any or all of the real property,
personal property, and fixtures in such order and manner as is now or hereafter
permitted by applicable law. Without limiting the generality of the foregoing,
Beneficiary may at its sole and absolute discretion and without regard to the
adequacy of its security elect to proceed against any or all of the real
property, personal property and fixtures in any manner permitted under Section
9501(4)(a) of the California Uniform Commercial Code; and if Beneficiary elects
to proceed in the manner permitted under Section 9501(4)(a)(ii) of the
California Uniform Commercial Code, the power of sale herein granted shall be
exercisable with respect to all or any of the real property and fixtures covered
hereby, as designated by Beneficiary, and the Trustee is hereby authorized and
empowered to conduct any such sale of any real property and fixtures in
accordance with the procedures applicable to real property. Where the Trust
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 Beneficiary to accelerate the maturity of the Obligations, which is made by
Trustor or any other Person 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 California Uniform Commercial Code
Section 9501(4)(c)(iii), not prohibit Beneficiary from conducting a sale or
other disposition of any personal property or fixtures or from otherwise
proceeding against or continuing to proceed against any personal property or
fixtures in any manner permitted by the California Uniform Commercial Code; 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 or fixtures 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 such
Section 2924c. Should Beneficiary elect to sell any of the Trust Property which
is real property or which is personal property or fixtures that Beneficiary has
elected under Section 9501(4)(a)(ii) of the California Uniform Commercial Code
to sell together with real property in accordance with the laws governing a sale
of real property, such notice of default and election to sell shall be given as
may then be required by law. Thereafter, upon the expiration of such time and
the giving of such notice of sale as may then be required by law, at the time
and place specified in the notice of sale, Trustee shall sell such property, or
any portion thereof specified by Beneficiary, at public auction to the highest
bidder for cash in lawful
12
money of the United States. Trustee may, and upon request of Beneficiary shall,
from time to time, postpone the sale by public announcement thereof at the time
and place noticed therefor. If the Trust Property consists of several lots,
parcels or interests, Beneficiary may designate the order in which the same
shall be offered for sale or sold. Should Beneficiary desire that more than one
such sale or other disposition be conducted, Beneficiary may, at its option,
cause the same to be conducted simultaneously, or successively on the same day,
or at such different days or times and in such order as Beneficiary may deem to
be in its best interest. Any Person, including Trustor, Trustee or Beneficiary
may purchase at the sale. In the event Beneficiary elects to dispose of the
Trust Property through more than one sale, Trustor agrees to pay the costs and
expenses of each such sale and of any judicial proceedings wherein the same may
be made, including reasonable compensation to Trustee and Beneficiary, their
agents and counsel, and to pay all expenses, liabilities and advances made or
incurred by Trustee in connection with such sale or sales, together with
interest on all such advances made by Trustee at the interest rate then
applicable to the indebtedness to which the Financing Documents apply. Upon any
sale Trustee shall execute and deliver to the purchaser or purchasers a deed or
deeds conveying the property so sold but without any covenant or warranty
whatsoever express or implied, whereupon such purchaser or purchasers shall be
let into immediate possession, and the recitals in any such deed or deeds of
facts such as default, the giving of notice of default and notice of sale, and
other facts affecting the regularity or validity of such sale or disposition,
shall be conclusive proof of the truth of such facts and any such deed or deeds
shall be conclusive against all Persons as to such facts recited therein.
(e) Exercise each of its other rights and remedies under this Deed of
Trust and the other Financing Documents, including, without limitation, any or
all of the following:
(i) exercise the rights of acceleration set forth in the Indenture,
and if the indebtedness is not paid on demand, at Beneficiary's option, (1)
bring suit therefor and demand payment thereof, (2) bring suit under the
Guarantee and/or the Indenture and/or (3) take any and all steps and
institute any and all other proceedings that Beneficiary deems necessary to
enforce the indebtedness and obligations secured hereby and to protect the
lien of this Deed of Trust;
(ii) without assuming liability for the performance of any of
Trustor's obligations hereunder, under the Guarantee or under any Financing
Document, enter and take possession of the Trust Property or any part
thereof, exclude Trustor and all Persons claiming under Trustor whose
claims are junior to this Deed of Trust, wholly or partly therefrom, and
use, operate, manage and control the same either in the name of Trustor or
otherwise as Beneficiary shall deem best, and upon such entry, from time to
time at the expense of Trustor and the Trust Property, make all such
repairs, replacements, alterations, additions or improvements to the Trust
Property or any part thereof as Beneficiary may deem proper and, whether or
not Beneficiary has so entered and taken possession of the Trust Property
or any part thereof, collect and receive all the Rents and apply the same,
to the extent permitted by law, to the payment of all expenses which
Beneficiary may be authorized to make under this Deed of Trust, the
remainder to be applied to the payment of the Obligations until the same
shall have been repaid in full; and if Beneficiary demands or attempts to
take possession of the Trust Property or any portion thereof in the proper
exercise of any rights hereunder, Trustor shall promptly turn over and
deliver complete possession thereto to Beneficiary; and
(iii) personally or by agents, with or without entry, if Beneficiary
shall deem it advisable, proceed to protect and enforce its rights under
this Deed of Trust, by suit for specific performance of any covenant
contained herein or in the Guarantee, in the Indenture or in any Financing
Document or in aid of the execution of any power granted herein or in the
Guarantee,
13
in the Indenture or in any Financing Document or for the foreclosure of
this Deed of Trust and the sale for cash of the Trust Property under the
judgment or decree of a court of competent jurisdiction, or for the
exercise of the power of sale granted under this Deed of Trust or for the
enforcement of any other right as Beneficiary shall deem most effectual for
such purpose; provided that in the event of a sale, by foreclosure or
--------
otherwise, of less than all of the Trust Property, this Deed of Trust shall
continue as a lien on, and security interest in, the remaining portion of
the Trust Property and Beneficiary shall not be obligated to sell upon
credit unless Beneficiary shall have expressly consented in writing to a
sale upon credit.
(f) Except as otherwise required by law, apply the net proceeds of any
foreclosure, collection, recovery, receipt, appropriation, realization or sale
of the Trust Property in the order of priority specified in the Indenture. If
all Obligations and any other amounts due under this Deed of Trust have been
indefeasibly paid, satisfied and discharged in full, any surplus then remaining
shall be paid to Trustor if Trustor is lawfully entitled to receive the same, or
shall be paid to whomsoever a court of competent jurisdiction may direct.
(g) Upon any sale or sales made under or by virtue of this section,
whether made under the power of sale or by virtue of judicial proceedings or of
a judgment or decree of foreclosure and sale, Beneficiary may bid for and
acquire the Trust Property or any part thereof. In lieu of paying cash for the
Trust Property, Beneficiary may make settlement for the purchase price by
crediting against the Obligations the sales price of the Trust Property, as
adjusted for the expenses of sale and the costs of the action and any other sums
for which Trustor is obligated to reimburse Trustee or Beneficiary under this
Deed of Trust.
19. Concerning the Trustee. Trustee shall be under no duty to take
----------------------
any action hereunder except as expressly required hereunder or by law, or to
perform any act which would involve Trustee in any expense or liability or to
institute or defend any suit in respect hereof, unless properly indemnified to
Trustee's reasonable satisfaction. Trustee, by acceptance of this Deed of
Trust, covenants to perform and fulfill the trusts herein created, being liable,
however, only for willful negligence or misconduct, and hereby waives any
statutory fee and agrees to accept reasonable compensation, in lieu thereof, for
any services rendered by Trustee in accordance with the terms hereof. Trustee
may resign at any time upon giving thirty (30) days' notice to Trustor and to
Beneficiary. Beneficiary may remove Trustee at any time or from time to time
and select a successor trustee. In the event of the death, removal,
resignation, refusal to act, or inability to act of Trustee, or in its sole
discretion for any reason whatsoever, Beneficiary may, without notice and
without specifying any reason therefor and without applying to any court, select
and appoint a successor trustee, by an instrument recorded wherever this Deed of
Trust is recorded, and all powers, rights, duties and authority of Trustee, as
aforesaid, shall thereupon become vested in such successor. Such substitute
trustee shall not be required to give bond for the faithful performance of the
duties of Trustee hereunder unless required by Beneficiary.
20. Trustee's Fees. Trustor shall pay all reasonable costs, fees and
--------------
expenses incurred by Trustee and Trustee's agents and counsel in connection with
the performance by Trustee of Trustee's duties hereunder, and all such costs,
fees and expenses shall be secured by this Deed of Trust.
21. Proceeds of Sale. Subject to the provisions of Section 49 of
----------------
this Deed of Trust, no sale or other disposition of all or any part of the Trust
Property shall be deemed to relieve Trustor of its obligations under this Deed
of Trust, the Guarantee or any other Financing Document except and only to the
extent the proceeds are applied to the payment of the Obligations or such other
obligations.
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If the proceeds of sale, collection or other realization of or upon the Trust
Property are insufficient to cover the costs and expenses of such realization
and the payment in full of the Obligations, Trustor shall remain liable for any
deficiency.
22. Trustor as Tenant Holding Over. In the event of any such
------------------------------
foreclosure or other sale by Beneficiary, Trustor shall be deemed a tenant
holding over and shall forthwith deliver possession to the purchaser or
purchasers at such sale or be summarily dispossessed according to provisions of
law applicable to tenants holding over.
23. Leases. Beneficiary is authorized to subordinate this Deed of
------
Trust to any Leases and to foreclose this Deed of Trust subject to the rights of
any tenants of the Trust Property, if any, and the failure to so subordinate or
to make any such tenants parties to any such foreclosure or other proceedings
and to foreclose their rights will not be, nor be asserted to be by Trustor, a
defense to any proceedings instituted by Beneficiary to collect the Obligations.
24. Discontinuance of Proceedings. In case Beneficiary shall have
-----------------------------
proceeded to enforce any right, power or remedy under this Deed of Trust by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
withdrawn, discontinued or abandoned for any reason, or shall have been
determined adverse to Beneficiary, then in every such case, to the fullest
extent permitted by law, (a) Trustor and Beneficiary shall be restored to their
former positions and rights, (b) all rights, powers and remedies of Beneficiary
shall continue as if no such proceeding had been taken, (c) each and every Event
of Default declared or occurring prior or subsequent to such withdrawal,
discontinuance or abandonment shall be or shall be deemed to be an independent
event of default and (d) neither the Obligations, this Deed of Trust nor the
Guarantee shall be or shall be deemed to have been not reinstated or otherwise
affected by such withdrawal, discontinuance or abandonment; and to the fullest
extent permitted by law, Trustor hereby expressly waives the benefit of any
statute or rule of law now provided or which may hereafter conflict with the
above.
25. No Reinstatement. If an Event of Default shall have occurred and
----------------
be continuing and Beneficiary shall have proceeded to enforce any right, power
or remedy permitted hereunder, then a tender of payment by Trustor or by anyone
on behalf of Trustor of any amount less than the amount necessary to satisfy the
Obligations in full, or the acceptance by Beneficiary of any such payment so
tendered, shall not constitute a reinstatement of this Deed of Trust, the
Guarantee or any other document evidencing, securing or guaranteeing the
Obligations.
26. Trustor's Waiver of Rights. Trustor hereby waives and releases,
--------------------------
to the maximum extent permitted by law, any rights, remedies or defenses which
Trustor might otherwise have (i) under California Code of Civil Procedure
Sections 726, 725a, 580a, 580b and 580d, California Civil Code Sections 2809,
2810, 2819, 2822, 2839, 2845, 2850, 2855, 2899 and 3433, under any anti-
deficiency provision of the Uniform Commercial Code, and under any future
judicial decisions or legislation, which statutes, future judicial decisions
and/or legislation might otherwise limit or condition Beneficiary's exercise of
certain of Beneficiary's rights and remedies in connection with the enforcement
of obligations secured by a lien on real property, including, without
limitation, Beneficiary's lien on the Trust Property or on any property
encumbered by other deeds of trust given to Beneficiary to secure obligations
under the Financing Documents (each, an "Additional Deed of Trust"), (ii) under
any laws now existing or hereafter enacted providing for any appraisal before
sale of a portion of the Trust Property or of the real property security of any
Additional Deed of Trust (the "Additional Deed of Trust Property"), (iii) to all
rights of redemption, valuation, appraisal, stay of execution, notice of
election to mature or any so-called "Moratorium Laws", to declare due the
Obligations, to marshalling in the event of the foreclosure of the liens created
under this Deed of Trust or under any Additional Deed of Trust, or the exercise
of the
15
power of sale granted hereunder or thereunder, (iv) pursuant to the defense of
the statute of limitations in any action hereunder or in any action for the
collection or performance of any Obligations secured hereby or any obligations
secured by any Additional Deed of Trust, (v) pursuant to any defense arising
because of Beneficiary's election, in any proceeding instituted under the
Federal Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal
Bankruptcy Code, (vi) pursuant to any defense based upon any borrowing or grant
of a security interest under Section 364 of the Federal Bankruptcy Code, (vii)
under any law limiting remedies, including recovery of a deficiency, under an
obligation secured by a deed of trust on real property and/or a security
agreement on personal property (including, without limitation, the Trust
Property and the Additional Deed of Trust Property) if the real property and/or
personal property is sold under a power of sale contained in the deed of trust,
and all defenses based on any loss whether as a result of any such sale or
otherwise, of Trustor's right to recover any amount from the Issuer, whether by
right of subrogation or otherwise, (viii) under any law to require Beneficiary
to pursue the Issuer or any other Person, any security which Beneficiary may
hold, or any other remedy before proceeding against Trustor, (ix) to all rights
of reimbursement or subrogation, all rights to enforce any remedy that
Beneficiary, the Trustee, the Holders of the Senior Secured Notes or the
Permitted Additional Senior Lenders, if any, may have against the Issuer, or
against the Guarantors as obligors under the Partnership Notes, and all rights
to participate in any security held by Beneficiary until the Obligations have
been paid and the covenants of the Indenture have been performed in full, (x) to
all rights to assert the bankruptcy or insolvency of Issuer as a defense
hereunder or as the basis for rescission hereof, (xi) to all rights under any
law purporting to reduce Trustor's Obligations hereunder if Issuer's obligations
are reduce, (xii) all defenses based on the disability or lack of authority of
Issuer or any Person, the repudiation of the Guarantees or any related Financing
Documents by Issuer or any Person, the failure by Beneficiary, the Trustee, the
Holders of the Senior Secured Notes or any Permitted Additional Senior Lender,
if any, to enforce any claim against Issuer, or the unenforceability in whole or
in part of any Financing Document, (xiii) to all suretyship and guarantor's
defenses generally, (xiv) to all rights to insist upon, plead or in any manner
whatever claim or take the benefit or advantage of, any appraisal, valuation,
stay, extension, marshaling of assets, redemption or similar law, or exemption,
whether now or at any time hereafter in force, which may delay, prevent or
otherwise affect the performance by Trustor of its obligations under, or the
enforcement by Beneficiary of, this Deed of Trust or any Additional Deed of
Trust, (xv) to any requirement on the part of Beneficiary, Trustee, the Holders
of the Senior Secured Notes or any Permitted Additional Senior Lender, if any,
to mitigate the damages resulting from any default (whether hereunder, under any
other Financing Document, under any Additional Deed of Trust or under any other
document or instrument); and (xvi) except as otherwise specifically set forth
herein, all rights of notice and hearing of any kind prior to the exercise of
rights by Beneficiary upon the occurrence and during the continuation of an
Event of Default to repossess with judicial process or to replevy, attach or
levy upon the Trust Property or any Additional Deed of Trust Property. To the
extent permitted by applicable law, Trustor waives the posting of any bond
otherwise required of Beneficiary in connection with any judicial process or
proceeding to obtain possession of, replevy, attach or levy upon the Trust
Property or any Additional Deed of Trust Property, to enforce any judgment or
other security for the Obligations, to enforce any judgment or other court order
entered in favor of Beneficiary, or to enforce by specific performance,
temporary restraining order, preliminary or permanent injunction, this Deed of
Trust, any Additional Deed of Trust or any other agreement or document by which
Trustor or any other Person is bound and which is in whole or in part for the
benefit of Beneficiary, Trustee, the Holders of the Senior Secured Notes or any
Permitted Additional Senior Lender, if any. Trustor further agrees that upon
the occurrence and continuance of any Event of Default, Beneficiary may elect to
nonjudicially or judicially foreclose against any real or personal property
security (including, without limitation, under the Additional Deeds of Trust) it
holds for the Obligations or any part thereof, or to exercise any other remedy
against Issuer, any security or any guarantor, even if the effect of that action
is to deprive Trustor or any other Person of the right to collect reimbursement
from Issuer or any other Person for any sums paid to Beneficiary, Trustee, any
Holder of the Senior
16
Secured Notes or any Permitted Additional Senior Lender, if any. To the extent,
if any, which such laws may be applicable, Trustor waives and releases any right
or defense which Trustor might otherwise have under such provisions and under
any other law of any applicable jurisdiction which might limit or restrict the
effectiveness or scope of any of Trustor's waivers or releases hereunder. If
any law referenced in this Section and now in force, of which Trustor, Trustor's
successors or assigns or any other Person might take advantage despite this
Section, shall hereafter be repealed or cease to be in force, such law shall not
thereafter be deemed to preclude the application of this Section. Trustor
warrants and agrees that each of the waivers and consents set forth in this Deed
of Trust is made voluntarily and unconditionally after consultation with outside
legal counsel and with full knowledge of its significance and consequences, with
the understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect the rights which Trustor
otherwise may have against Beneficiary or any other Person or against any
collateral. If, notwithstanding the intent of the parties that the terms of
this Deed of Trust shall control in any and all circumstances, any such waivers
or consents are determined to be unenforceable under applicable law, such
waivers and consents shall be effective to the fullest extent permitted by law.
27. Assignment of Rents. All of the Rents, whether now due, past due
-------------------
or to become due, and including all prepaid rents and security deposits, are
hereby absolutely, presently and unconditionally assigned, transferred, conveyed
and set over to Beneficiary to be applied by Beneficiary in payment of the
Obligations. It is understood and agreed that neither the foregoing assignment
of Rents to Beneficiary nor the exercise by Beneficiary of any of its rights or
remedies under this Deed of Trust shall be deemed to make Beneficiary a
"mortgagee-in-possession" or otherwise responsible or liable in any manner with
respect to the Trust Property or the use, occupancy, enjoyment, or operation of
all or any portion thereof, unless and until Beneficiary, in person or by agent,
assumes actual possession thereof. The appointment of a receiver for the Trust
Property by any court at the request of Beneficiary or by agreement with
Trustor, or the entering into possession of the Trust Property or any part
thereof by such receiver, also shall not be deemed to make Beneficiary a
mortgagee-in-possession or otherwise responsible or liable in any manner with
respect to the Trust Property or the use, occupancy, enjoyment or operation of
all or any portion thereof.
28. Security Agreement.
------------------
(a) This Deed of Trust is intended to be a security agreement
pursuant to the California Uniform Commercial Code for (i) any and all items of
personal property specified above as part of the Trust Property that, under
applicable law, may be subject to a security interest pursuant to the California
Uniform Commercial Code and that are not effectively made part of the Site, and
(ii) any and all items of property specified above as part of the Trust Property
that, under applicable law, constitute fixtures and may be subject to a security
interest under Section 9313 of the California Uniform Commercial Code. Trustor
hereby grants Beneficiary a security interest in said property, and in all
additions thereto, substitutions therefor, and proceeds thereof, for the purpose
of securing the Obligations. For purposes of treating this Deed of Trust as a
security agreement, Beneficiary shall be deemed to be the secured party and
Trustor shall be deemed to be the debtor. In the event of a conflict between
the provisions of this Deed of Trust and that certain Security Agreement dated
of even date herewith between Trustor and Beneficiary (the "Security
Agreement"), with respect to property of the type described in clause (i) above,
the provisions of the Security Agreement shall control.
(b) Trustor maintains places of business in the State of California,
and Trustor will immediately notify Beneficiary in writing of any change in such
places of business.
17
(c) At the request of Beneficiary, Trustor shall join Beneficiary in
executing one or more financing statements and continuations and amendments
thereof pursuant to the UCC in form reasonably satisfactory to Beneficiary; and
Trustor will pay the cost of filing the same in all public offices wherever
filing is deemed by Beneficiary to be necessary. In the event Trustor fails to
execute such documents within five (5) business days after request by
Beneficiary, Trustor hereby authorizes Beneficiary to file such financing
statements and irrevocably constitutes and appoints Beneficiary, or any officer
of Beneficiary, as its true and lawful attorney-in-fact to execute the same on
behalf of Trustor.
(d) This Deed of Trust constitutes a financing statement filed as a
fixture filing under UCC (S) 9402(6) in the official records of Inyo County and
Kern County with respect to any and all fixtures included within the term "Trust
Property" and with respect to any goods or other personal property that may now
be or hereafter become such a fixture. This filing shall remain in effect as a
fixture filing until this Deed of Trust is released or satisfied of record or
its effectiveness otherwise terminates as to the Trust Property.
(e) Beneficiary has no responsibility for and does not assume any of,
Trustor's obligations or duties under any agreement or obligation which is part
of the Equipment or any obligation relating to the acquisition, preparation,
custody, use, enforcement or operation of any of the Trust Property.
(f) Trustor and Beneficiary agree that the filing of a financing
statement in the records normally having to do with personal property shall
never be construed as in any way derogating from or impairing this Deed of Trust
or the intention of the parties that everything used in connection with the
production of income from the Trust Property or adapted for use therein or which
is described or reflected in this Deed of Trust is, and at all times and for all
purposes and in all proceedings both legal or equitable shall be regarded as
part of the real estate subject to the lien hereof, irrespective of whether (i)
any such item is physically attached to improvements located on such real
property or (ii) any such item is referred to or reflected in any financing
statement so filed at any time. Similarly, the mention in any such financing
statement of (A) the rights in or to the proceeds of any casualty insurance
policy or (B) any award in eminent domain proceedings for taking or for loss of
value or for cause of action or proceeds thereof in connection with any damage
or injury to the Trust Property or any part thereof shall never be construed as
in any way altering any of the rights of Beneficiary as determined by this
instrument or impugning the priority of Beneficiary's lien granted hereby or by
any other recorded document, but such mention in such financing statement is
declared to be for the protection of Beneficiary in the event any court shall at
any time hold with respect to matters (A) and (B) above that notice of
Beneficiary's priority of interest, to be effective against a particular class
of persons, including, without limitation, the Federal government and any
subdivision or entity of the Federal government, must be filed in the personal
property records or other commercial code records.
29. Further Acts, etc. Trustor shall, at the cost of Trustor, and
-----------------
without expense to Beneficiary, execute, acknowledge and deliver all and every
such further acts, deeds, conveyances, financing statements, mortgages, deeds of
trust, assignments, notices of assignments, transfers and assurances as
Beneficiary shall from time to time require, for the better assuring, conveying,
assigning, transferring and confirming unto Beneficiary, the property and rights
hereby conveyed or assigned or intended now or hereafter so to be, or which
Trustor may be or may hereafter become bound to convey or assign to Beneficiary,
or for carrying out the intention or facilitating the performance of the terms
of this Deed of Trust or for filing, registering or recording this Deed of Trust
and, on demand, will execute and deliver and hereby authorizes Beneficiary to
execute in the name of Trustor to the extent they may lawfully do so, one or
more financing statements, chattel mortgages or comparable security instruments,
to evidence and perfect more effectively the lien hereof upon the Trust
Property.
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30. Power of Attorney.
-----------------
(a) Trustor does hereby make, constitute and appoint Beneficiary its
true and lawful exclusive agent and attorney-in-fact for it, and in its name,
place and stead for the following purposes (collectively, the "Power of
Attorney"):
(i) in connection with or following one or more foreclosures under
this Deed of Trust judicially or by power(s) of sale or otherwise, or at such
time as Trustor shall be a debtor in proceedings under federal or state
bankruptcy law, to (1) apply to the United States Navy or the BLM for assignment
to it of the Navy Contract, the BLM North Leases and/or the BLM Rights-of-Way,
and to approve such assignment on behalf of Trustor and (2) subject to the prior
approval of the United States Navy or the BLM, if applicable, to grant, bargain,
sell, convey and assign Trustor's interest under the Navy Contract, the BLM
North Leases and/or the BLM Rights-of-Way to Beneficiary or to any other Person,
for such price or prices, and on such terms and conditions, as Trustor may deem
proper, and in Trustor's name, to make, execute, acknowledge and deliver a good
and sufficient assignment, or other instrument or instruments necessary to
effect such sale, conveyance or assignment;
(ii) to take all actions and exercise all rights and remedies
available to Trustor as holder of the Navy Contract, the BLM North Leases and/or
the BLM Rights-of-Way, including, without limitation, to (1) cure any defaults
thereunder, (2) make rental, royalty or other payments to the United States Navy
and the BLM, if applicable, on behalf of Trustor and/or (3) act as operator,
appoint another to act as operator or have a receiver appointed to act as
operator thereof; and
(iii) to request, demand, sue for, collect, recover, compromise,
settle and receive all monies that may become due and owing to Trustor by reason
of a sale, conveyance, assignment, taking for public use or other disposition of
Trustor's interest under the Navy Contract, the BLM North Leases and/or the BLM
Rights-of-Way.
(b) Trustor hereby grants to Beneficiary full power and authority to
from time to time appoint a substitute to perform any of the acts that
Beneficiary is by this Power of Attorney authorized to perform, and the right to
revoke such appointment of substitution at any time.
(c) Trustor does hereby give and grant Beneficiary full power and
authority to do and perform all and every act and thing whatsoever requisite,
necessary or appropriate to be done in and about the Site and/or with respect to
Navy Contract, the BLM North Leases and/or the BLM Rights-of-Way as fully to all
interests and purposes as Trustor might or could do if personally present,
hereby ratifying all that Beneficiary shall lawfully do or cause to be done by
virtue of theses presents. The powers and authority hereby conferred upon
Beneficiary shall be applicable to any and all interests in the Navy Contract,
the BLM North Leases and the BLM Rights-of-Way now owned or hereafter acquired
by Trustor. Subject to the terms hereof, Beneficiary is empowered to determine
in its sole discretion the time when, purpose for, and manner in which any power
herein conferred upon it shall be exercised, and the conditions, provisions and
covenants of any instrument or document that may be executed by it pursuant
hereto, and in the acquisition or disposition of the Navy Contract, the BLM
North Leases and/or the BLM Rights-of-Way, Beneficiary shall have exclusive
power to fix the terms thereof. This Power of Attorney is coupled with an
interest and cannot be revoked other than by recordation of a statement of
termination by Beneficiary hereunder.
31. Headings, etc. The headings, titles and captions of various
-------------
Sections of this Deed of Trust are for convenience of reference only and are not
to be construed as defining or limiting, in any way, the scope or intent of the
provisions hereof.
19
32. Filing of Deed of Trust, etc. Trustor forthwith upon the
----------------------------
execution and delivery of this Deed of Trust and thereafter, from time to time,
will cause this Deed of Trust, and any security instrument creating a lien or
evidencing or perfecting the lien hereof upon the Trust Property, or in the case
of personal property or fixtures, financing statements with respect thereto, and
each instrument of further assurance, to be filed, registered or recorded in
such manner and in such places as may be required by any present or future law
in order to publish notice of and fully to protect, preserve and perfect the
lien hereof upon, and the interest of Beneficiary in the Trust Property.
Trustor will pay all filing, registration or recording fees, and all expenses
incurred by Beneficiary incident to the preparation, execution and
acknowledgment of this Deed of Trust, any deed of trust or any mortgage or deed
of trust supplemental hereto, any security instrument with respect to the Trust
Property, any financing statement with respect to the Trust Property, and any
instrument of further assurance, and all federal, state, county and municipal
taxes, duties, imposts, assessments and charges arising out of or in connection
with the execution and delivery of this Deed of Trust, any mortgage or deed of
trust supplemental hereto, any security instrument with respect to the Trust
Property or any financing statement, continuation statement or other instrument
of further assurance. Trustor shall hold harmless and indemnify Beneficiary,
its successors and assigns, against any liability incurred by reason of the
imposition of any tax on the making and recording of this Deed of Trust.
33. Usury Laws. This Deed of Trust, the Guarantee and the other
----------
Financing Documents are subject to the express condition that at no time shall
Trustor be obligated or required to pay interest on the principal balance due
under the Financing Documents or otherwise with respect to the Obligations at a
rate which could subject the creditor of the debt evidenced by such instruments
to either civil or criminal liability as a result of being in excess of the
maximum interest rate which Trustor is permitted by law to contract or agree to
pay. If by the terms of this Deed of Trust or the Financing Documents, Trustor
is at any time required or obligated to pay interest on the principal balance
due under any of the Financing Documents at a rate in excess of such maximum
rate, then such rate of interest shall be deemed to be immediately reduced to
such maximum rate and the interest payable shall be computed at such maximum
rate.
34. Recovery of Sums Required to Be Paid. Beneficiary shall have the
------------------------------------
right from time to time to take action to recover any sum or sums which
constitute a part of the Obligations as the same become due, without regard to
whether or not the balance of the Obligations shall be due, and without
prejudice to the right of Beneficiary thereafter to bring an action of
foreclosure, or any other action, for a default or defaults by Trustor existing
at the time such earlier action was commenced.
35. Authority. Trustor, and each of the undersigned acting on behalf
---------
of Trustor, hereby represents, warrants and covenants that it has full power,
authority and legal right to execute this Deed of Trust and to mortgage, give,
grant, bargain, sell, release, pledge, convey, confirm and assign the Trust
Property pursuant to the terms hereof and to keep and observe all of the terms
of this Deed of Trust on Trustor's part to be performed.
36. Invalidity of Certain Provisions. Every provision of this Deed
--------------------------------
of Trust is intended to be severable. In the event any term or provision hereof
is declared to be illegal, invalid or unenforceable for any reason whatsoever by
a court of competent jurisdiction, (i) such term or provision shall be construed
in such a manner as will allow such term or provision to be valid, provided that
such recasting shall be in accordance with the original intention of the
parties, and (ii) such illegality, invalidity or unenforceability shall not
affect the balance of the terms and provisions hereof, which terms and
provisions shall remain binding and enforceable. If the lien of this Deed of
Trust in invalid or unenforceable as to any part of the debt, or if the lien is
invalid or unenforceable as to any part of the Trust Property, the unsecured or
partially unsecured portion of the debt shall be completely paid prior
20
to the payment of the remaining and secured or partially secured portion of the
debt, and all payments made on the debt, whether voluntary or under foreclosure
or other enforcement action or procedure, shall be considered to have been first
paid on and applied to the full payment of that portion of the debt which is not
secured or fully secured by the lien of this Deed of Trust.
37. Duplicate Originals. This Deed of Trust may be executed in any
-------------------
number of duplicate originals and each such duplicate original shall be deemed
to constitute but one and the same instrument.
38. Waiver of Notice. Trustor shall not be entitled to any notices
----------------
of any nature whatsoever from Beneficiary except with respect to matters for
which this Deed of Trust, the Guarantee or applicable law specifically and
expressly provides for the giving of notice to Trustor, and to the fullest
extent permitted by law Trustor hereby expressly waives the right to receive any
notice from Beneficiary with respect to any matter for which this Deed of Trust,
the Guarantee or applicable law does not specifically and expressly provide for
the giving of notice to Trustor.
39. No Oral Change. This Deed of Trust may only be modified, amended
--------------
or changed by an agreement in writing signed by Trustor and Beneficiary, and may
only be released, discharged or satisfied of record by an instrument in writing
signed by the Trustee or its successors and assigns as directed by Beneficiary.
No waiver of any term, covenant or provision of this Deed of Trust shall be
effective unless given in writing by Beneficiary, and if so given by Beneficiary
shall only be effective in the specific instance in which given. Trustor
acknowledges that this Deed of Trust and the Financing Documents set forth the
entire agreement and understanding of Trustor and Beneficiary with respect to
the matters set forth therein and that no oral or other agreements,
understanding, representations or warranties exist with respect to those matters
other than those set forth in this Deed of Trust and the Financing Documents.
40. Absolute and Unconditional Obligation. Trustor acknowledges that
-------------------------------------
Trustor's obligation to perform and pay the Obligations in accordance with the
provision of this Deed of Trust and the Guarantee is and shall at all times
continue to be absolute and unconditional in all respects, and shall at all
times be valid and enforceable irrespective of any other agreements or
circumstances of any nature whatsoever which might otherwise constitute a
defense to this Deed of Trust or the Guarantee or the obligations of Trustor
thereunder to perform and pay the Obligations or the obligations of any other
Person relating to this Deed of Trust or the Guarantee or the obligations of
Trustor under this Deed of Trust or the Guarantee, and to the fullest extent
permitted by law Trustor absolutely, unconditionally and irrevocably waives any
and all right to assert any defense, setoff, counterclaim or crossclaim of any
nature whatsoever with respect to the obligation of Trustor to perform and pay
the Obligations in accordance with the provisions of this Deed of Trust or the
Guarantee or the obligations of any other Person relating to this Deed of Trust
or the Guarantee or the obligations of Trustor under this Deed of Trust or the
Guarantee, or in any action or proceeding brought by Beneficiary to collect the
Obligations, or any portion thereof, or to enforce, foreclose and realize upon
the lien and security interest created by this Deed of Trust or any other
document or instrument securing performance and repayment of the Obligations, in
whole or in part.
41. No Rights; No Set Off. All sums secured by this Deed of Trust
---------------------
shall be paid in accordance with the Indenture and the Guarantee, as applicable,
without counterclaim, setoff, deduction or defense and without abatement,
suspension, deferment, diminution or reduction, and the obligations and
liabilities of Trustor hereunder shall in no way be released, discharged or
otherwise affected (except as expressly provided herein) by reason of (i) any
claim which Trustor has or might have against Beneficiary, (ii) any default or
failure on the part of Beneficiary to perform or comply with any of the
21
terms hereof or (iii) any other occurrence whatsoever, whether similar or
dissimilar to the foregoing and whether or not Trustor shall have notice or
knowledge of any of the foregoing.
42. Action Affecting the Trust Property.
-----------------------------------
(a) Trustor agrees to appear in and contest any action or proceeding
purporting to adversely affect the security hereof or the rights or powers of
Beneficiary, and to pay all costs and expenses of Beneficiary, including costs
of evidence of title and attorneys' fees and expenses, in any such action or
proceeding in which Beneficiary may appear.
(b) Beneficiary shall have the right to appear in and defend any
action or proceeding brought with respect to the Trust Property and to bring any
action or proceeding, in the name and on behalf of Trustor or Beneficiary, which
Beneficiary determines to be necessary or reasonably advisable to be brought to
protect its interest in the Trust Property if (i) Trustor fails to defend or
bring such action or proceeding, as appropriate, in a prompt and diligent
manner, or thereafter fails to proceed with diligence in the defense or
prosecution of the same, or (ii) an Event of Default shall have occurred and be
continuing.
43. Other Actions by Beneficiary. Except as hereinbefore expressly
----------------------------
provided, should Trustor fail to make any payment or do any act as and in the
manner provided in the Guarantee or any Financing Document after the expiration
of any applicable cure or grace period and as a result an Event of Default,
Beneficiary, without obligation so to do and without notice to or demand upon
Trustor and without releasing Trustor from any obligation, may make or do the
same in such manner and to such extent as Beneficiary may deem necessary to
protect the security hereof. In connection therewith (without limiting any
general powers of Beneficiary whether conferred herein or by law), Beneficiary
shall have and is hereby given the right, but not the obligation, (i) to the
fullest extent permitted by law, to make additions, alterations, repairs and
improvements to the Trust Property which it may consider necessary to keep the
Trust Property in good condition and repair and (ii) in exercising such powers,
to pay necessary expenses, including engagement of counsel or other necessary or
desirable consultants. Trustor shall, immediately upon demand therefor by
Beneficiary, pay all reasonable costs and expenses incurred by Beneficiary in
connection with the exercise by Beneficiary of the foregoing rights, including
without limitation, costs of evidence of title, court costs, appraisals, surveys
and attorneys' fees and expenses.
44. Remedies Not Exclusive. Subject to the limitations set forth in
----------------------
Section 49 of this Deed of Trust, Beneficiary shall be entitled to enforce
payment and performance of any indebtedness or obligations secured hereby and to
exercise all rights and powers granted under this Deed of Trust or any other
agreement or any laws now or hereafter in force, notwithstanding some or all of
the said indebtedness and obligations secured hereby may now or hereafter be
otherwise secured, whether by mortgage, deed of trust, pledge, lien, assignment
or otherwise. Subject to the limitations set forth in Section 49 of this Deed
of Trust, neither the acceptance of this Deed of Trust nor its enforcement,
whether by court action or pursuant to the power of sale or other powers herein
contained, shall prejudice or in any manner affect Beneficiary's right to
realize upon or enforce any other security now or hereafter held by Beneficiary,
it being agreed that Beneficiary shall be entitled to enforce this Deed of Trust
and any other security now or hereafter held by Beneficiary in such order and
manner as it may in its absolute discretion determine. No remedy herein
conferred upon or reserved to Beneficiary is intended to be exclusive of any
other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute.
22
45. Relationship. The relationship of Beneficiary to Trustor
------------
hereunder is strictly and solely that of lender and borrower, and nothing
contained in this Deed of Trust is intended to create, or shall in any event or
under any circumstance be construed as creating, a partnership, joint venture,
tenancy-in-common, joint tenancy or other relationship of any nature whatsoever
between or among Beneficiary and Trustor other than as lender and borrower.
46. Guarantee. This Deed of Trust is subject to all of the terms,
---------
covenants and conditions of the Guarantee and the Financing Documents, which
Guarantee and Financing Documents and all of the terms, covenants and conditions
thereof are by this reference incorporated herein and made a part hereof with
the same force and effect as if set forth at length herein. Trustor shall
observe and perform all of the terms, covenants and conditions of the Financing
Documents on Trustor's part to be observed or performed. All advances made and
all indebtedness arising and accruing under the Guarantee or any Financing
Document from time to time shall be secured hereby.
47. Business Purpose. Trustor hereby stipulates and warrants that
----------------
the loans secured hereby are commercial or business loans and are transacted
solely for the purpose of carrying on or acquiring a business or commercial
enterprise or for a proper business purpose under the laws of the jurisdiction
in which the Trust Property is located.
48. Time of the Essence. TIME IS OF THE ESSENCE with respect to each
-------------------
and every covenant, agreement and obligation of Trustor under this Deed of
Trust.
49. No Recourse. Beneficiary agrees that no officer, director,
-----------
employee or shareholder of Trustor nor any Affiliate of any such party
(collectively, the "Nonrecourse Parties") shall be personally liable for the
performance of any obligation contained in this Deed of Trust. Beneficiary
agrees that its rights shall be limited to proceeding against Trustor and the
security provided or intended to be provided pursuant to the Security Documents,
and that it shall have no right to proceed against the Nonrecourse Parties for
(a) the satisfaction of any monetary obligation of, or enforcement of any
monetary claim against, Trustor, (b) the performance of any obligation, covenant
or agreement arising under this Deed of Trust, or (c) any deficiency judgment
remaining after foreclosure of any property securing the obligations hereunder;
provided, however, that: (A) the foregoing provisions of this Section 49 shall
not constitute a waiver, release or discharge of any of the indebtedness, or of
any of the terms, covenants, conditions or provisions of this agreement or any
Financing Document, and the same shall continue until fully paid, discharged,
observed or performed; (B) the foregoing provisions of this Section 49 shall not
limit or restrict the right of Beneficiary or the holders of the Senior Secured
Notes to name Trustor or any other Person as a defendant in any action or suit
for a judicial foreclosure or for the exercise of any other remedy under or with
respect to this Deed of Trust or any Financing Document, or for injunction or
specific performance, so long as no judgment in the nature of a deficiency
judgment shall be enforced against any Nonrecourse Party, except as set forth in
this Section 49; (C) the foregoing provisions of this Section 49 shall not in
any way limit or restrict any right or remedy of Beneficiary, the holders of the
Senior Secured Notes or the Permitted Additional Senior Lenders, if any (or any
assignee or beneficiary thereof or successor thereto) with respect to, and all
of the Nonrecourse Parties shall remain fully liable to the extent that they
would otherwise be liable for their own actions with respect to, any fraud,
negligence or willful misrepresentation, or misappropriation of any amounts to
be deposited in the Revenue Account, Proceeds or any other earnings, revenues,
rents, issues, profits or proceeds that are subject to the Security Documents
that should or would have been paid as provided herein or paid or delivered to
the Depositary Agent, Beneficiary, the holders of the Senior Secured Notes or
the Permitted Additional Senior Lenders (or any assignee or beneficiary thereof
or successor thereto) towards any payment required under this Deed of Trust or
any Financing Document; (D) the foregoing provisions of this Section 49 shall
not affect or diminish or constitute a waiver, release or discharge of
23
any specific written obligation, covenant or agreement in respect of the Project
made by any of the Nonrecourse Parties or any security granted by the
Nonrecourse Parties as security for the obligations of Trustor or Issuer; and
(E) nothing contained herein shall limit the liability of (i) any Person who is
a party to any Project Document or has issued any certificate or statement in
connection therewith with respect to such liability as may arise by reason of
the terms and conditions of such Project Document, certificate or statement, or
(ii) any Person rendering a legal opinion, in each case under this clause (E)
relating solely to such liability of such Person as may arise under such
referenced instrument, agreement or opinion.
50. Severance of Counterclaims. In the event of foreclosure of this
--------------------------
Deed of Trust, any and all counterclaims filed by Trustor against Beneficiary to
the extent permitted by law, shall be severed by the court having jurisdiction
over the foreclosure action, for all purposes from the basic foreclosure action,
on an ex parte basis and without notice to Trustor. Trustor, by its execution
--------
and delivery hereof, hereby expressly consents and agrees to such severance.
51. WAIVER OF JURY TRIAL. AS AN INDEPENDENT COVENANT HEREOF, TRUSTOR
--------------------
HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES ANY RIGHT IT
MIGHT HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS DEED OF TRUST, THE GUARANTEE OR
ANY FINANCING DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PERSONS. THIS WAIVER IS A
MATERIAL INDUCEMENT FOR BENEFICIARY TO ACCEPT DELIVERY OF THIS DEED OF TRUST AND
THE GUARANTEE.
52. GOVERNING LAW. THIS DEED OF TRUST IS GOVERNED BY AND SHALL BE
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
53. Reimbursement; Attorneys' Fees. Trustor shall pay immediately,
------------------------------
without demand, after expenditure, all sums expended or expenses incurred by
Trustee and/or Beneficiary in enforcing the terms of this Deed of Trust,
including, without limitation, all attorneys' fees. As used herein, the terms
"attorneys' fees" or "attorneys' fees and costs" shall mean the fees and
expenses of counsel to Beneficiary, Trustee and the holders of the Senior
Secured Notes, which may include printing, photostating, duplicating and other
expenses, air freight charges, and fees billed for law clerks, paralegals,
librarians and others not admitted to the bar but performing services under the
supervision of an attorney. The terms "attorneys' fees" or "attorneys' fees and
costs" shall also include, without limitation, all such fees and expenses
incurred with respect to appeals, arbitrations and bankruptcy proceedings, and
whether or not any action or proceeding is brought with respect to the matter
for which said fees and expenses were incurred.
54. Shared Draftsmanship. If there is any ambiguity in the terms of
--------------------
this Deed of Trust, the doctrine of construction which holds that the language
of the document shall be construed against its drafter shall not apply, as all
parties have shared in the drafting of this Deed of Trust.
55. No Third Party Beneficiary. This Deed of Trust is for the sole
--------------------------
benefit of Beneficiary, or on behalf of the holders of the Senior Secured Notes,
as applicable, and the Permitted Additional Senior Lenders, and is not for the
benefit of any third party; and no third party shall gain any subrogation rights
against Trustor or in, to or with respect to any portion of the Trust Property
by reason of this Deed of Trust or the provisions hereof.
24
56. Security Only. This Deed of Trust is granted for security
-------------
purposes only. Accordingly, except as otherwise specifically provided in this
Deed of Trust, Beneficiary shall not enforce Trustor's rights with respect to
the Trust Property until such time as an Event of Default shall have occurred
and be continuing.
57. Release by Beneficiary. Upon the payment and performance in full
----------------------
of the Obligations, the security interest granted hereby shall terminate and all
rights to the Trust Property shall revert to Trustor. Upon any such
termination, Trustee shall, at Trustor's expense, execute and deliver to Trustor
such documents as Trustor shall reasonably request to evidence such termination.
If this Deed of Trust shall be terminated or revoked by operation of law,
Trustor will indemnify and save Trustee harmless from any loss which may be
suffered or incurred by Trustee in acting hereunder prior to the receipt by
Trustee, its successors, transferees or assigns of notice of such termination or
revocation.
58. Assignment of the BLM North Leases. Trustor and Beneficiary
----------------------------------
acknowledge that, as of the date of recordation of this Deed of Trust, the
assignment to Trustor of an undivided one third interest in the BLM North Leases
has not yet been completed. As such, Trustor covenants as follows:
(a) that it will cause such assignment to occur as soon as possible,
in connection with which it will, without limitation, (i) obtain the written
approval of the BLM to such assignment and (ii) cause an Assignment and
Assumption Agreement, in form and substance satisfactory to Beneficiary, to be
recorded in the Official Records of Inyo County, California; and
(b) upon completion of such assignment, if and to the extent so
requested by Beneficiary, it will (i) cause this Deed of Trust to be re-recorded
in the Official Records of Inyo County, California, or cause an amendment to
this Deed of Trust or a new deed of trust (with substantially the same
provisions as this Deed of Trust) to be recorded in the Official Records of Inyo
County, California, in each case in form and substance satisfactory to
Beneficiary, (ii) obtain such endorsement(s) or new title insurance policy or
policies (in form and substance satisfactory to Beneficiary) as Beneficiary may
reasonably request to insure Beneficiary that this Deed of Trust constitutes a
first priority lien on Trustor's undivided one third interest in the BLM North
Leases, subject only to the encumbrances and other matters that affected the BLM
North Leases as of the date of recordation of this Deed of Trust, including any
additional Permitted Liens and intervening taxes or assessments and (iii)
perform such further acts as Beneficiary may reasonably determine are necessary
or appropriate to carry out and accomplish the intent of this Section, and
promptly execute and deliver and, if appropriate, acknowledge and cause to be
recorded, any such additional documents, instruments and certificates as
Beneficiary may reasonably request in connection with such assignment and/or the
transfer of any related real or personal property.
59. Consent To Assignment. By executing this Deed of Trust, Trustor
---------------------
irrevocably and unconditionally consents to: (a) Beneficiary (or its assignee or
designee, and/or any receiver) curing any default under the BLM North Leases or
the BLM Rights-of-Way and acting as operator thereof for that purpose (although
Beneficiary shall not be under any obligation to undertake or complete any such
cure) and (b) assignment to Beneficiary of all of its right, title and interest
in and under the BLM North Leases and the BLM Rights-of-Way in the event of a
default under this Deed of Trust, the Guarantee or any of the other Financing
Documents or foreclosure under this Deed of Trust or any of the other Security
Documents; and Trustor acknowledges and agrees that (i) no further consents,
approvals or signatures shall be required from Trustor in order to effectuate
the transfer to Beneficiary of Trustor's right, title and interest in the BLM
North Leases and/or the BLM Rights-of-Way or any thereof and (ii) the BLM may
rely upon this consent.
25
60. Regarding Beneficiary.
---------------------
(a) Beneficiary shall be afforded all of the rights, powers,
protections, immunities and indemnities set forth in that certain Security
Agreement, dated as of the date hereof, between Trustor and Beneficiary, as if
the same were specifically set forth herein.
(b) Trustor hereby agrees to indemnify and hold harmless Beneficiary
and its directors, officers, agents and employees from and against any and all
claims, demands, losses, penalties, liabilities, costs, damages, injuries and
expenses, including, without limitation, reasonable attorneys' fees and
expenses, suffered or sustained by Beneficiary, either directly or indirectly,
relating to or arising out of any Environmental Law (as hereinafter defined),
including, without limitation, any judgment, award, settlement, attorneys' fees
and expenses and other costs or expenses incurred in connection with the defense
of any actual or threatened action, proceeding or claim. As used herein, the
term "Environmental Law" shall mean any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or health or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes into the
environment, including, without limitation, ambient air, surface water, ground
water, or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes.
(c) The obligations of Trustor hereunder shall survive the termination
and release of this Deed of Trust or the earlier resignation or removal of
Beneficiary as trustee under the Indenture.
61. No Waiver. By accepting payment of any sum secured hereby after
---------
its due date or in an amount less than the sum due, Beneficiary does not waive
its rights to require prompt payment when due of all other sums so secured.
62. The CLC Deed of Trust. Trustor acknowledges that concurrently
---------------------
herewith Beneficiary is receiving a Deed of Trust, Assignment of Rents, Fixture
Filing and Security Agreement from Coso Land Company, a California general
partnership (the "CLC Deed of Trust"), which CLC Deed of Trust affects certain
of the Trust Property. Trustor unconditionally and irrevocably agrees that the
lien of this Deed of Trust shall at all times be and remain senior to the lien
of the CLC Deed of Trust. Further, Trustor agrees that any partial or full
release or reconveyance of the CLC Deed of Trust will not cause or create any
loss of priority of this Deed of Trust or any impairment of the lien of this
Deed of Trust. Conversely, in the event that the CLC Deed of Trust remains a
lien against the BLM North Leases, BLM Lease CACA-11401 and/or any other portion
of the Trust Property after an interest in said leases is assigned to Trustor,
then Trustor (i) hereby assumes and agrees to perform all of the obligations of
the trustor under the CLC Deed of Trust and (ii) reaffirms the subordination of
(and hereby unconditionally, irrevocably and at all times subordinates) the lien
of the CLC Deed of Trust to the lien of this Deed of Trust.
[Remainder of page intentionally left blank; signatures on next page]
26
IN WITNESS WHEREOF, Trustor has duly executed this Deed of Trust as of the day
and year first above written.
TRUSTOR: COSO FINANCE PARTNERS,
a California general partnership
By: New CLOC Company, LLC,
a Delaware limited liability company,
its Managing General Partner
By: /s/ Christopher T. McCallion
----------------------------
Christopher T. McCallion
Executive Vice President
By: ESCA, LLC,
a Delaware limited liability company,
its General Partner
By: /s/ Christopher T. McCallion
----------------------------
Christopher T. McCallion
Executive Vice President
27
Consent by CED and CPD:
- ----------------------
As of the day and year first above written, CED and CPD each hereby
consents to CFP entering into this Deed of Trust. CED and CPD each specifically
agrees that this Deed of Trust or the other Financing Documents may, among other
things, assign or delegate to Beneficiary rights to cure defaults under the
Indenture, to exercise voting rights and other rights to manage or control the
Issuer, to substitute itself in place of CFP under the Steam Exchange
Agreements, to act as Trustor's attorney-in-fact, to foreclose on the Trust
Property or to exercise any other rights hereunder or under the other Financing
Documents. CED and CPD each agrees that it will recognize and accept such
assignment and delegation and the exercise of such rights by Beneficiary in
connection with this Deed of Trust.
CED: COSO ENERGY DEVELOPERS,
a California general partnership
By: New CHIP Company, LLC,
a Delaware limited liability company,
its Managing General Partner
By: /s/ Christopher McCallion
-------------------------
Christopher T. McCallion
Executive Vice President
By: Caithness Coso Holdings, LLC,
a Delaware limited liability company,
its General Partner
By: /s/ Christopher T. McCallion
----------------------------
Christopher T. McCallion
Executive Vice President
CPD: COSO POWER DEVELOPERS,
a California general partnership
By: New CTC Company, LLC,
a Delaware limited liability company,
its Managing General Partner
By: /s/ Christopher T. McCallion
----------------------------
Christopher T. McCallion
Executive Vice President
By: Caithness Navy II Group, LLC,
a Delaware limited liability company,
its General Partner
By: /s/ Christopher T. McCallion
----------------------------
Christopher T. McCallion
Executive Vice President
28
ACKNOWLEDGMENT
STATE OF New York )
--------------------
)
COUNTY OF New York )
--------------------
On May 28 , 1999, before me, [name of notary]
------------------ ------------------------------------
Notary Public, personally appeared Christopher T. McCallion 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(ies), and that by his signature(s)
on the instrument the person(s), or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
/s/ signature of notary
- ------------------------------------------------------
Notary/Public
EXHIBIT A
Description of the Navy I Land
------------------------------
THAT CERTAIN REAL PROPERTY LOCATED IN AN UNINCORPORATED AREA OF THE COUNTY OF
INYO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 4; THE SOUTH HALF OF
THE SOUTH HALF OF SECTION 5; THE SOUTH HALF OF THE SOUTHEAST QUARTER AND THE
SOUTHEAST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 6; THE EAST HALF OF
SECTION 7; ALL OF SECTION 8; AND ALL OF SECTION 9; ALL LOCATED IN TOWNSHIP 22
SOUTH, RANGE 39 EAST, MOUNT DIABLO BASE AND MERIDIAN; IN THE COUNTY OF INYO,
STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF.
EXHIBIT B
Description of the Navy Contract
--------------------------------
THAT CERTAIN CONTRACT NO. N62474-79-C-5382, DATED DECEMBER 6, 1979, BY AND
BETWEEN THE UNITED STATES OF AMERICA ACTING THROUGH THE DEPARTMENT OF THE NAVY
AND CALIFORNIA ENERGY COMPANY, INC., AS MODIFIED, AMENDED, ASSIGNED AND RESTATED
BY CONTRACT MODIFICATION P00004 DATED AS OF OCTOBER 19, 1983, A MEMORANDUM OF
WHICH WAS RECORDED ON MARCH 12, 1986 AS INSTRUMENT NO. 86-1043 OF OFFICIAL
RECORDS OF INYO COUNTY, CALIFORNIA, INCLUDING ALL MODIFICATIONS, AMENDMENTS AND
ASSIGNMENTS THERETO AND THEREOF MADE BEFORE THE EFFECTIVE DATE OF THIS DEED OF
TRUST AND ANY PERMITTED MODIFICATIONS, AMENDMENTS AND ASSIGNMENTS THERETO AND
THEREOF MADE AFTER THE EFFECTIVE DATE OF THIS DEED OF TRUST.
EXHIBIT C
Description of the BLM North Lease Premises and the BLM North Leases
--------------------------------------------------------------------
LEASE CACA-11383:
THAT CERTAIN GEOTHERMAL RESOURCES LEASE (SERIAL NO. CACA-11383) APPROVED ON
NOVEMBER 1, 1983 BY THE BLM AND ISSUED TO THE LOS ANGELES DEPARTMENT OF
WATER AND POWER, A CERTIFIED COPY OF WHICH WAS RECORDED ON OCTOBER 8, 1993
AS INSTRUMENT NO. 93-4604 OF OFFICIAL RECORDS, INCLUDING ALL MODIFICATIONS,
AMENDMENTS AND ASSIGNMENTS THERETO AND THEREOF MADE BEFORE THE EFFECTIVE
DATE OF THIS DEED OF TRUST AND ANY PERMITTED MODIFICATIONS, AMENDMENTS AND
ASSIGNMENTS THERETO AND THEREOF MADE AFTER THE EFFECTIVE DATE OF THIS DEED
OF TRUST, WHICH LEASE AFFECTS THAT CERTAIN REAL PROPERTY LOCATED IN AN
UNINCORPORATED AREA OF THE COUNTY OF INYO, STATE OF CALIFORNIA, DESCRIBED
AS FOLLOWS:
PARCEL 1:
--------
ALL OF SECTION 32; THE NORTH HALF OF SECTION 33; THE NORTH HALF OF THE
SOUTH HALF OF SECTION 33; THE SOUTH HALF OF THE SOUTHWEST QUARTER OF
SECTION 33; AND THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF
SECTION 33, ALL IN TOWNSHIP 21 SOUTH, RANGE 39 EAST, MOUNT DIABLO
MERIDIAN, IN THE COUNTY OF INYO, STATE OF CALIFORNIA, ACCORDING TO THE
OFFICIAL PLAT THEREOF.
EXCEPTING THEREFROM THE OIL, HYDROCARBON GAS, AND HELIUM IN SAID LAND
AND THE RIGHT OF THE UNITED STATES OF AMERICA TO EXTRACT SAID OIL,
HYDROCARBON GAS, AND HELIUM FROM GEOTHERMAL STEAM AND ASSOCIATED
GEOTHERMAL RESOURCES PRODUCED FROM SAID LAND (30 U.S.C.A. 1025).
PARCEL 2:
--------
LOTS 2, 3 AND 4 OF SECTION 4; LOTS 1 TO 4 INCLUSIVE OF SECTION 5; THE
SOUTH HALF OF THE NORTH HALF OF SECTION 5; AND THE NORTH HALF OF THE
SOUTH HALF OF SECTION 5, ALL IN TOWNSHIP 22 SOUTH, RANGE 39 EAST,
MOUNT DIABLO MERIDIAN, IN THE COUNTY OF INYO, STATE OF CALIFORNIA.
EXCEPTING THEREFROM THE OIL, HYDROCARBON GAS, AND HELIUM IN SAID LAND
AND THE RIGHT OF THE UNITED STATES OF AMERICA TO EXTRACT SAID OIL,
HYDROCARBON GAS, AND HELIUM FROM GEOTHERMAL STEAM AND ASSOCIATED
GEOTHERMAL RESOURCES PRODUCED FROM SAID LAND (30 U.S.C.A. 1025).
Exhibit "C"
Page 1 of 4
LEASE CACA-11384:
THAT CERTAIN GEOTHERMAL RESOURCES LEASE (SERIAL NO. CACA-11384) APPROVED BY
THE BLM ON FEBRUARY 1, 1982 AND ISSUED TO THE LOS ANGELES DEPARTMENT OF
WATER AND POWER, WHICH LEASE WAS RECORDED ON OCTOBER 8, 1993 AS INSTRUMENT
NO. 93-4605 OF OFFICIAL RECORDS, INCLUDING ALL MODIFICATIONS, AMENDMENTS
AND ASSIGNMENTS THERETO AND THEREOF MADE BEFORE THE EFFECTIVE DATE OF THIS
DEED OF TRUST AND ANY PERMITTED MODIFICATIONS, AMENDMENTS AND ASSIGNMENTS
THERETO AND THEREOF MADE AFTER THE EFFECTIVE DATE OF THIS DEED OF TRUST,
WHICH LEASE AFFECTS THAT CERTAIN REAL PROPERTY LOCATED IN AN UNINCORPORATED
AREA OF THE COUNTY OF INYO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL 1:
--------
THE EAST HALF OF SECTION 11; ALL OF SECTIONS 12 AND 13; AND THE EAST
HALF OF SECTION 14, ALL IN TOWNSHIP 22 SOUTH, RANGE 38 EAST, MOUNT
DIABLO MERIDIAN, IN THE COUNTY OF INYO, STATE OF CALIFORNIA, ACCORDING
TO THE OFFICIAL PLAT THEREOF.
EXCEPTING THEREFROM THE OIL, HYDROCARBON GAS, AND HELIUM IN SAID LAND
AND THE RIGHT OF THE UNITED STATES OF AMERICA TO EXTRACT SAID OIL,
HYDROCARBON GAS, AND HELIUM FROM GEOTHERMAL STEAM AND ASSOCIATED
GEOTHERMAL RESOURCES PRODUCED FROM SAID LAND (30 U.S.C.A. 1025).
PARCEL 2:
--------
LOTS 1 TO 4, INCLUSIVE OF SECTION 7; THE EAST HALF OF THE WEST HALF OF
SECTION 7; LOTS 1 TO 4, INCLUSIVE OF SECTION 18; AND THE EAST HALF OF
THE WEST HALF OF SECTION 18, ALL IN TOWNSHIP 22 SOUTH, RANGE 39 EAST,
MOUNT DIABLO MERIDIAN, IN THE COUNTY OF INYO, STATE OF CALIFORNIA,
ACCORDING TO THE OFFICIAL PLAT THEREOF.
EXCEPTING THEREFROM THE OIL, HYDROCARBON GAS, AND HELIUM IN SAID LAND
AND THE RIGHT OF THE UNITED STATES OF AMERICA TO EXTRACT SAID OIL,
HYDROCARBON GAS, AND HELIUM FROM GEOTHERMAL STEAM AND ASSOCIATED
GEOTHERMAL RESOURCES PRODUCED FROM SAID LAND (30 U.S.C.A. 1025).
LEASE CACA-11385:
THAT CERTAIN GEOTHERMAL RESOURCES LEASE (SERIAL NO. CACA-11385) APPROVED BY
THE BLM ON FEBRUARY 1, 1982 AND ISSUED TO THE LOS ANGELES DEPARTMENT OF
WATER AND POWER, WHICH LEASE WAS RECORDED
Exhibit "C"
Page 2 of 4
ON OCTOBER 8, 1993 AS INSTRUMENT NO. 93-4606 OF OFFICIAL RECORDS, INCLUDING
ALL MODIFICATIONS, AMENDMENTS AND ASSIGNMENTS THERETO AND THEREOF MADE
BEFORE THE EFFECTIVE DATE OF THIS DEED OF TRUST AND ANY PERMITTED
MODIFICATIONS, AMENDMENTS AND ASSIGNMENTS THERETO AND THEREOF MADE AFTER
THE EFFECTIVE DATE OF THIS DEED OF TRUST, WHICH LEASE AFFECTS THAT CERTAIN
REAL PROPERTY LOCATED IN AN UNINCORPORATED AREA OF THE COUNTY OF INYO,
STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL 1:
--------
ALL OF SECTION 36, TOWNSHIP 21 SOUTH, RANGE 38 EAST, MOUNT DIABLO
MERIDIAN, IN THE COUNTY OF INYO, STATE OF CALIFORNIA, ACCORDING TO THE
OFFICIAL PLAT THEREOF.
EXCEPTING THEREFROM THE OIL, HYDROCARBON GAS, AND HELIUM IN SAID LAND
AND THE RIGHT OF THE UNITED STATES OF AMERICA TO EXTRACT SAID OIL,
HYDROCARBON GAS, AND HELIUM FROM GEOTHERMAL STEAM AND ASSOCIATED
GEOTHERMAL RESOURCES PRODUCED FROM SAID LAND (30 U.S.C.A. 1025).
PARCEL 2:
--------
LOTS 1 TO 4 INCLUSIVE, THE SOUTH HALF OF THE NORTH HALF, AND THE SOUTH
HALF OF SECTION 1, TOWNSHIP 22 SOUTH, RANGE 38 EAST, MOUNT DIABLO
MERIDIAN, IN THE COUNTY OF INYO, STATE OF CALIFORNIA, ACCORDING TO THE
OFFICIAL PLAT THEREOF.
EXCEPTING THEREFROM THE OIL, HYDROCARBON GAS, AND HELIUM IN SAID LAND
AND THE RIGHT OF THE UNITED STATES OF AMERICA TO EXTRACT SAID OIL,
HYDROCARBON GAS, AND HELIUM FROM GEOTHERMAL STEAM AND ASSOCIATED
GEOTHERMAL RESOURCES PRODUCED FROM SAID LAND (30 U.S.C.A. 1025).
PARCEL 3:
--------
LOTS 1 TO 4 INCLUSIVE, THE EAST HALF, AND THE EAST HALF OF THE WEST
HALF OF SECTION 31, TOWNSHIP 21 SOUTH, RANGE 39 EAST, MOUNT DIABLO
MERIDIAN, IN THE COUNTY OF INYO, STATE OF CALIFORNIA, ACCORDING TO THE
OFFICIAL PLAT THEREOF.
EXCEPTING THEREFROM THE OIL, HYDROCARBON GAS, AND HELIUM IN SAID LAND
AND THE RIGHT OF THE UNITED STATES OF AMERICA TO EXTRACT SAID OIL,
HYDROCARBON GAS, AND HELIUM FROM GEOTHERMAL STEAM AND ASSOCIATED
GEOTHERMAL RESOURCES PRODUCED FROM SAID LAND (30 U.S.C.A. 1025).
Exhibit "C"
Page 3 of 4
PARCEL 4:
--------
LOTS 1 TO 7 INCLUSIVE, THE SOUTH HALF OF THE NORTHEAST QUARTER, THE
SOUTHEAST QUARTER OF THE NORTHWEST QUARTER, THE NORTHEAST QUARTER OF
THE SOUTHWEST QUARTER, AND THE NORTH HALF OF THE SOUTHEAST QUARTER OF
SECTION 6, TOWNSHIP 22 SOUTH, RANGE 39 EAST, MOUNT DIABLO MERIDIAN, IN
THE COUNTY OF INYO, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL
PLAT THEREOF.
EXCEPTING THEREFROM THE OIL, HYDROCARBON GAS, AND HELIUM IN SAID LAND
AND THE RIGHT OF THE UNITED STATES OF AMERICA TO EXTRACT SAID OIL,
HYDROCARBON GAS, AND HELIUM FROM GEOTHERMAL STEAM AND ASSOCIATED
GEOTHERMAL RESOURCES PRODUCED FROM SAID LAND (30 U.S.C.A. 1025).
Exhibit "C"
Page 4 of 4
EXHIBIT D
Description of the BLM Right-of-Way Premises and the BLM Rights-of-Way
----------------------------------------------------------------------
RIGHT-OF-WAY CACA-13510:
THAT CERTAIN UNRECORDED RIGHT-OF-WAY GRANT (SERIAL NO. CACA-13510) APPROVED
BY THE BLM ON APRIL 12, 1984 AND ISSUED TO CALIFORNIA ENERGY COMPANY, INC.,
INCLUDING ALL MODIFICATIONS, AMENDMENTS AND ASSIGNMENTS THERETO AND THEREOF
MADE BEFORE THE EFFECTIVE DATE OF THIS DEED OF TRUST AND ANY PERMITTED
MODIFICATIONS, AMENDMENTS AND ASSIGNMENTS THERETO AND THEREOF MADE AFTER
THE EFFECTIVE DATE OF THIS DEED OF TRUST, WHICH RIGHT-OF-WAY GRANT AFFECTS
THAT CERTAIN REAL PROPERTY LOCATED IN AN UNINCORPORATED AREA OF THE COUNTY
OF INYO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
TOWNSHIP 21 SOUTH, RANGE 37 EAST, MT. DIABLO MERIDIAN: SECTION 36,
E1/2 OF THE SE1/4;
TOWNSHIP 22 SOUTH, RANGE 37 EAST, MT. DIABLO MERIDIAN: SECTION 1,
NW1/4 OF THE SW1/4; LOTS 1 AND 2 OF THE NE1/4; AND LOT 1 OF THE NW1/4;
AND
TOWNSHIP 21 SOUTH, RANGE 38 EAST, MT. DIABLO MERIDIAN: SECTION 31,
LOTS 9-12, 16; SECTION 32, LOTS 1-3,5,6 AND 8; AND SECTION 33, S1/2 OF
THE S1/2.
RIGHT-OF-WAY CACA-18885:
THAT CERTAIN UNRECORDED RIGHT-OF-WAY GRANT (SERIAL NO. CACA-18885) APPROVED
BY THE BLM ON MAY 7, 1986 AND ISSUED TO CALIFORNIA ENERGY COMPANY, INC.,
INCLUDING ALL MODIFICATIONS, AMENDMENTS AND ASSIGNMENTS THERETO AND THEREOF
MADE BEFORE THE EFFECTIVE DATE OF THIS DEED OF TRUST AND ANY PERMITTED
MODIFICATIONS, AMENDMENTS AND ASSIGNMENTS THERETO AND THEREOF MADE AFTER
THE EFFECTIVE DATE OF THIS DEED OF TRUST, WHICH RIGHT-OF-WAY GRANT AFFECTS
THAT CERTAIN REAL PROPERTY LOCATED IN AN UNINCORPORATED AREA OF THE COUNTY
OF INYO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
TOWNSHIP 22 SOUTH, RANGE 37 EAST, MT. DIABLO MERIDIAN: SECTION 1, LOTS
1 & 2 IN NE1/4, LOT 1 IN NW1/4, AND NW1/4SW1/4;
TOWNSHIP 21 SOUTH, RANGE 37 EAST, MT. DIABLO MERIDIAN: SECTION 36,
SE1/4SE1/4;
TOWNSHIP 21 SOUTH, RANGE 38 EAST, MT. DIABLO MERIDIAN: SECTION 31,
LOTS 13-16; SECTION 32, LOTS 1-5, 8; SECTION 33, S1/2NE1/4,
NE1/4SW1/4, S1/2SW1/4, N1/2SE1/4; SECTION 34, N1/2SW1/4, SE1/4SW1/4
AND SW1/4SE1/4.
EXHIBIT "E"
Description of the Transmission Line Property
---------------------------------------------
THAT CERTAIN REAL PROPERTY LOCATED IN UNINCORPORATED AREAS OF THE COUNTIES OF
INYO AND KERN, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
THE COSO-INYOKERN 115 KV TRANSMISSION LINE BEGINS AT SURVEY STATION 0+00 AT THE
INYOKERN SUBSTATION IN THE SE 1/4, SE 1/4 OF SECTION 20, T26S, R39E, IN KERN
COUNTY, CALIFORNIA AND GOES NORTHERLY APPROXIMATELY 28.3 MILES ENDING AT SURVEY
STATION 1505+03.87 AT COSO GEOTHERMAL PLANT NO. 1 SWITCHYARD IN SW 1/4, NW 1/4
OF SECTION 8, T22S, R39E IN INYO COUNTY, CALIFORNIA.
THE RIGHT-OF-WAY FOR THE TRANSMISSION LINE IS A STRIP OF LAND 200 FEET WIDE OF
WHICH 65 FEET OF THIS RIGHT-OF-WAY IS LOCATED TO THE LEFT (WESTERLY) OF THE
TRANSMISSION LINE CENTERLINE AND 135 FEET IS LOCATED TO THE RIGHT (EASTERLY) OF
THE TRANSMISSION CENTERLINE.
THE TRANSMISSION LINE CENTERLINE IS DESCRIBED AS FOLLOWS:
SECTIONS 20, 17 (7 of record), 8, 5 & 6 OF TOWNSHIP 26 SOUTH, RANGE 39 EAST
---------------------------------------------------------------------------
BEGINNING AT SURVEY STATION 0+00, WHICH IS LOCATED ON THE NORTH BOUNDARY FENCE
LINE OF THE INYOKERN SUB-STATION AND IS 400 FEET WEST AND 320 FEET NORTH OF THE
SE CORNER OF SECTION 20, T26S, R39E. THENCE, FROM STATION 0+00,
N21(degrees)11'57"W A DISTANCE OF 255.00 FEET TO AN ANGLE POINT AT STATION
2+55.00; THENCE N17(degrees)40'18"W A DISTANCE OF 21,637 FEET TO THE LELITER
ROAD CROSSING AT STATION 218+92 WHICH IS A POINT ON THE NORTH BOUNDARY OF
SECTION 6, T26S, R39E AND IS 1410 FEET WEST OF THE NE CORNER OF SECTION 6, T26S,
R39E.
SECTIONS 31, 30 & 19 OF TOWNSHIP 25 SOUTH, RANGE 39 EAST
--------------------------------------------------------
THENCE FROM STATION 218+92, N17(degrees)40'18"W A DISTANCE OF 13,228 FEET TO
STATION 351+20 WHICH IS A POINT ON THE WEST BOUNDARY OF SECTION 19, T25S, R39E
AND IS 1960 FEET NORTH OF THE SW CORNER OF SECTION 19, T25S, R39E.
SECTIONS 24, 13, 12, 1 & 2 OF TOWNSHIP 25 SOUTH, RANGE 38 EAST
--------------------------------------------------------------
THENCE, FROM STATION 351+20, N17(degrees)40'18"W A DISTANCE OF 20,165 FEET TO
SURVEY STATION 552+85 WHICH IS A POINT ON THE KERN AND INYO COUNTY LINE AND ON
THE NORTH BOUNDARY OF SECTION 2, T25S, R38E AND IS 540 FEET WEST OF THE NE
CORNER OF SECTION 2, T25S, R38E.
SECTIONS 35, 34, 27, 22, 15, 10 & 3 OF TOWNSHIP 24 SOUTH, RANGE 38 EAST
-----------------------------------------------------------------------
THENCE, FROM STATION 552+85, N17(degrees)40'18"(degrees)W A DISTANCE OF 980.65
FEET TO AN ANGLE POINT AT STATION 562+65.65; THENCE N00(degrees)32'59"E A
DISTANCE OF 1849.86 FEET
Exhibit "E"
Page 1 of 2
TO AN ANGLE POINT AT STATION 581+15.51; THENCE N18(degrees)55'43"W A DISTANCE OF
8200.72 FEET TO AN ANGLE POINT AT STATION 663+16.23; THENCE N17(degrees)49'44"W
A DISTANCE OF 6843.04 FEET TO AN ANGLE POINT AT STATION 731+59.27; THENCE
N09(degrees)26'36"E A DISTANCE OF 13,280.99 FEET TO AN ANGLE POINT AT EQUATION
STATION 864+40.26 BACK = 873+79.76 AHEAD; THENCE N07(degrees)43'29"E A DISTANCE
OF 1460 FEET TO SURVEY STATION 888+39.76 WHICH IS A POINT ON THE NORTH BOUNDARY
OF SECTION 3, T24S, R38E AND IS 1680 FEET WEST OF THE NE CORNER OF SECTION 3,
T24S, R38E.
SECTIONS 34, 27, 26, 23, 24, 13, 12 & 1, TOWNSHIP 23 SOUTH, RANGE 38 EAST
-------------------------------------------------------------------------
THENCE FROM STATION 888+39.76, N07(degrees)43'29"E A DISTANCE OF 5111.45 FEET TO
AN ANGLE POINT AT STATION 939+51.21; THENCE N31(degrees)43'12"E A DISTANCE OF
9820.50 FEET TO AN ANGLE POINT AT STATION 1037+71.71; THENCE N31(degrees)14'47"E
A DISTANCE OF 10,758.97 FEET TO AN ANGLE POINT AT STATION 1145+30.68; THENCE
N10(degrees)29'29"W A DISTANCE OF 8780.38 FEET TO SURVEY STATION 1233+11.06
WHICH IS A POINT ON THE NORTH BOUNDARY OF SECTION 1, T23S, R38E AND IS 1600 FEET
WEST OF THE NE CORNER OF SECTION 1, T23S, R38E.
SECTION 36 OF TOWNSHIP 22 SOUTH, RANGE 38 EAST
----------------------------------------------
THENCE FROM STATION 1233+11.06, N10(degrees)29'29"W A DISTANCE OF 1200.00 FEET
TO AN ANGLE POINT AT STATION 1245+11.06; THENCE N43(degrees)08'19"E A DISTANCE
OF 2718.94 FEET TO SURVEY STATION 1272+30 WHICH IS A POINT ON THE EAST BOUNDARY
OF SECTION 36, T22S, R38E AND IS 2180 FEET SOUTH OF THE NE CORNER OF SECTION 36,
T22S, R38E.
SECTION 31, 30, 19, 18, 7 & 8 OF TOWNSHIP 22 SOUTH, RANGE 39 EAST
-----------------------------------------------------------------
THENCE, FROM STATION 1272+30, N43(degrees)08'19"E A DISTANCE OF 1922.34 FEET TO
AN ANGLE POINT AT STATION 1291+52.34; THENCE N06(degrees)45'07"E A DISTANCE OF
12,581.98 FEET TO AN ANGLE POINT AT STATION 1417+34.32; THENCE
N00(degrees)50'59"W A DISTANCE OF 4,017.81 FEET TO AN ANGLE POINT AT STATION
1457+52.13; THENCE N55(degrees)41'23"E A DISTANCE OF 1,152.30 FEET TO AN ANGLE
POINT AT STATION 1469+04.43; THENCE N13(degrees)42'55"E A DISTANCE OF 1,065.66
FEET TO AN ANGLE POINT AT STATION 1479+70.09; THENCE N81(degrees)26'21"E A
DISTANCE OF 1,169.68 FEET TO AN ANGLE POINT AT STATION 1491+39.77; THENCE
N25(degrees)26'31"E A DISTANCE OF 1,135.98 FEET TO AN ANGLE POINT AT STATION
1502+75.75; THENCE N05(degrees)40'26"E A DISTANCE OF 228.12 FEET TO THE END OF
THE COSO-INYOKERN 115 KV TRANSMISSION LINE AT SURVEY STATION 1505+03.87. THIS
ENDING POINT IS LOCATED AT THE COSO GEOTHERMAL PLANT NO. 1 SWITCHYARD IN THE SW
1/4, NW 1/4 OF SECTION 8, T22S, R39E IN INYO COUNTY, CALIFORNIA.
Exhibit "E"
Page 2 of 2