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EXHIBIT 4.2(a)
WHEN RECORDED OR FILED RETURN TO:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
Title: DEED OF TRUST, ASSIGNMENT OF LEASES AND
RENTS, SECURITY AGREEMENT, FIXTURE FILING
AND FINANCING STATEMENT
Grantor: PIONEER CHLOR ALKALI COMPANY, INC.
(Taxpayer I.D. No. 51-0302028)
Grantee #1
(Trustee): Transnation Title Insurance Company
Grantee #2
(Beneficiary): UNITED STATES TRUST COMPANY OF NEW YORK,
as Collateral Agent
(Taxpayer I.D. No. 13-3818954)
Abbreviated
Legal
Description: Portions of Blocks 1 and 12 of Ashton's Replat
Full Legal
Description on: Page 51
Assessor's Tax
Parcel Numbers: 227520-004-0
227520-005-0
227520-056-0
Reference
Numbers of Related
Documents: N/A
Washington
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BE ADVISED THAT THE TERM LOAN NOTES SECURED BY THIS DEED OF TRUST PROVIDE FOR A
VARIABLE RATE OF INTEREST.
THIS INSTRUMENT COVERS, AMONG OTHER PROPERTY, GOODS WHICH ARE OR MAY BECOME
FIXTURES ON CERTAIN REAL PROPERTY DESCRIBED ON EXHIBIT A HERETO, AND IS TO BE
FILED FOR RECORD IN THE REAL ESTATE RECORDS AS BOTH A DEED OF TRUST OF REAL
PROPERTY AND A FIXTURES FINANCING STATEMENT UNDER THE UNIFORM COMMERCIAL CODE.
A CARBON, PHOTOGRAPHIC, FACSIMILE OR OTHER REPRODUCTION OF THIS INSTRUMENT IS
SUFFICIENT AS A FINANCING STATEMENT.
THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS, SECURES PAYMENT OF
FUTURE ADVANCES AND COVERS PROCEEDS OF COLLATERAL.
DEED OF TRUST, ASSIGNMENT OF LEASES AND
RENTS, SECURITY AGREEMENT, FIXTURE FILING
AND FINANCING STATEMENT
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT, FIXTURE FILING AND FINANCING STATEMENT (this "Deed of Trust"), dated
as of June 17, 1997, by and between PIONEER CHLOR ALKALI COMPANY, INC., a
Delaware corporation, whose address for notice hereunder is 700 Louisiana
Street, Suite 4200, Houston, Texas 77002 ("Trustor") to Transnation Title
Insurance Company, an Arizona corporation having an address at 6111 100th
Street S.W., Lakewood, Washington 98499, as trustee (the "Deed of Trust
Trustee"), in favor of UNITED STATES TRUST COMPANY OF NEW YORK, with offices at
114 West 47th Street, New York, New York 10036, as Collateral Agent under the
Intercreditor Agreement (as hereinafter defined) (in such capacity and together
with any successors and assigns in such capacity, "Beneficiary"), for (i)
itself, as Trustee under the Indenture (as hereinafter defined) (in such
capacity, the "Note Trustee"), (ii) for the Term Loan Agent (as hereinafter
defined) as agent under the Term Loan Agreement (as hereinafter defined), (iii)
for the Note Holders (as hereinafter defined), and (iv) for the Term Loan
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Lenders (as hereinafter defined) (the Beneficiary, the Note Trustee, the Term
Loan Agent, the Note Holders and the Term Loan Lenders being hereinafter
collectively referred to as the "Secured Parties"). The Note Holders, Term
Loan Lenders, the Note Trustee and the Term Loan Agent shall also be deemed to
be beneficiaries of this Deed of Trust. The Collateral Agent is authorized to
act on behalf of the Note Holders pursuant to the Collateral Agreement.
W I T N E S S E T H :
WHEREAS, pursuant to that certain Indenture dated as of the
date hereof among Pioneer Americas Acquisition Corp. ("PAAC"), the Subsidiary
Guarantors, as defined therein, and the Note Trustee, as trustee for the
holders of the Notes (as hereinafter defined) (the "Note Holders") (as the same
may be amended, amended and restated, supplemented or otherwise modified from
time to time, the "Indenture") PAAC will issue its 9 1/4% Senior Secured Notes
due 2007 (as the same may be amended, amended and restated, supplemented or
otherwise modified from time to time, including all notes issued in exchange or
substitution therefor, upon the registration of such notes pursuant to the
Securities Act of 1933 or otherwise, the "Notes") in the aggregate principal
amount of $200 million; and
WHEREAS, pursuant to that certain Term Loan Agreement dated as
of the date hereof among PAAC, Bank of America Illinois, as administrative
agent (the "Term Loan Agent"), DLJ Capital Funding, Inc., as syndication agent,
Salomon Brothers Holding Company Inc, as documentation agent, and the lenders
named therein (the "Term Loan Lenders") (as the same may be amended, amended
and restated, supplemented or otherwise modified from time to time, the "Term
Loan Agreement"), the Term Loan Lenders will make certain loans to PAAC to be
evidenced by notes (as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time, including all notes
issued in exchange or substitution therefor, the "Term Loan Notes") in an
aggregate amount of $100 million; and
WHEREAS, pursuant to Article Thirteen of the Indenture,
Trustor has guaranteed (such guarantee by Trustor being hereinafter referred to
as the "Note Guarantee") the payment and
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performance of the Indenture Obligation (as hereinafter defined); and
WHEREAS, pursuant to the Subsidiary Guaranty dated as of the
date hereof (as the same may be amended, amended and restated, supplemented or
otherwise modified from time to time), Trustor has guaranteed (such guarantee
by Trustor being hereinafter referred to as the "Term Loan Guarantee") the
payment and performance of the Term Loan Obligation (as hereinafter defined);
and
WHEREAS, Beneficiary is the collateral agent under that
certain Intercreditor and Collateral Agency Agreement (as the same may be
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Intercreditor Agreement"), dated as of the date hereof, among PAAC,
Trustor, Pioneer Americas, Inc. ("PAI" and together with PAAC and Trustor
sometimes referred to herein as the "Companies"), the Note Trustee, the Term
Loan Agent and Beneficiary, as collateral agent.
SECTION I - GRANTING CLAUSES
To secure the Secured Obligations (as hereinafter defined),
including, without limitation, Trustor's guarantees of payment and performance
of the Indenture Obligation and the Term Loan Obligation under the Note
Guarantee and the Term Loan Guarantee, respectively, and the payment and
performance of the covenants and obligations herein contained and in
consideration of the sum of $10.00 and other valuable consideration in hand
paid by Beneficiary to Trustor and in consideration of the debts and trusts
hereinafter mentioned, the receipt and sufficiency of all of which is hereby
acknowledged, Trustor does by these presents GRANT, BARGAIN, SELL, ASSIGN,
MORTGAGE, WARRANT, TRANSFER and CONVEY unto the Deed of Trust Trustee and its
successors and substitutes in trust with power of sale hereunder for the use
and benefit of Beneficiary all of Trustor's rights, titles, interests and
estates in and to the real and personal property described in Subparagraphs (a)
through (h) of this Section I (collectively herein called the "Mortgaged
Property"); provided, however, that the term Mortgaged Property shall not
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include any Obligor Collateral, as such term is defined in the Revolving Credit
Agreement (as hereinafter defined)), to- wit:
(a) Trustor's undivided 100% interest in and to the lands
described on Exhibit A hereto (the "Land"), together with any and all
other rights, titles and interests of Trustor of whatever kind or
character (whether now owned or hereafter acquired by operation of law
or otherwise) in and to such Land.
(b) All of Trustor's rights, titles and interests in all
plants, buildings, structures, towers and other improvements now owned
or hereafter acquired and located on the Land, including, without
limitation, that certain chlor alkali plant and all equipment,
fixtures, heating, lighting and power plants, pipelines, transmission
lines, buildings, housing and improvements, together with all other
machinery, equipment, appliances and apparatus of whatsoever character
or description (except for any motor vehicles, licensed or registered
with the Department of Motor Vehicles of the State), and all
replacements, substitutions and additions to said property, owned by
Trustor and located on the Land or located elsewhere and used in the
operation, conduct and maintenance of that certain chlor alkali plant
located thereon (collectively, the "Improvements") (the Land, together
with the Improvements, being hereinafter collectively referred to as
the "Chlor Alkali Plant").
(c) To the extent permitted by law, all of Trustor's rights,
titles and interests in, to and under all franchises, licenses,
permits and certificates, consents, approvals, authorizations, however
characterized, used or held for use in connection with Trustor's
ownership and operation of the Chlor Alkali Plant and issued or in any
way furnished, whether now existing or hereafter entered into and
whether necessary or not for the operation and use of the Chlor Alkali
Plant, including, without limitation, building permits, certificates
of occupancy, environmental certificates, industrial permits or
licenses or certificates of operation.
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(d) All of Trustor's rights, title and interest in all
absorbers, equipment, machinery, drums, engines, motors, regulators,
meters, exchangers, tanks, docks, racks, heaters, above ground storage
facilities, under ground storage facilities, loading facilities,
fractionation facilities, absorption equipment, distillation
equipment, deethanizers, depropanizers, debutanizers, olefin
splitters, stills, power plants, disposal pits, warehouses, dwelling
houses, cooling equipment, compressors, pipelines, piping flow lines,
wiring, boilers, vessels, dehydration equipment or any of them (except
for any motor vehicles, licensed or registered with the Department of
Motor Vehicles of the State), whether now owned or hereafter acquired
and located or to be located upon the Land or leaseholds now or
hereafter owned by Trustor and used or held for use in connection with
Trustor's ownership and operation of the Chlor Alkali Plant
(collectively, "Equipment").
(e) All Trustor's right, title and interest, as landlord,
franchisor, licensor or grantor, in all leases and subleases of space,
oil, gas and mineral leases, franchise agreements, licenses, occupancy
or concession agreements now existing or hereafter entered into
relating in any manner to the Chlor Alkali Plant or the Equipment and
any and all amendments, modifications, supplements and renewals of any
thereof (each such lease, license or agreement, together with any such
amendment, modification, supplement or renewal, a "Lease"), whether
now in effect or hereafter coming into effect including, without
limitation, all rents, additional rents, management fees payable by
tenants, cash, guarantees, letters of credit, bonds, sureties or
securities deposited thereunder to secure performance of the lessee's,
franchisee's, licensee's or obligee's obligations thereunder,
revenues, earnings, profits and income, advance rental payments,
payments incident to assignment, sublease or surrender of a Lease,
claims for forfeited deposits and claims for damages, now due or
hereafter to become due, with respect to any Lease (collectively,
"Rents").
(f) All surveys, title insurance policies, drawings,
plans, specifications, construction contracts, file materials,
operating and maintenance records, catalogues,
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tenant lists, correspondence, advertising materials, operating
manuals, warranties, guaranties, appraisals, studies and data relating
to the Chlor Alkali Plant or the Equipment or the construction of any
Alteration (as hereinafter defined) or the maintenance of any Permit
(as hereinafter defined).
(g) All general intangibles now owned or hereafter
acquired by Trustor (but not including the Obligor Collateral),
including without limitation (i) all of Trustor's rights, titles and
interests, whether now owned or hereafter acquired, of Trustor in, to
and under the contracts, agreements or other instruments and documents
relevant to Trustor's ownership and operation of the Chlor Alkali
Plant (collectively, "Plant Agreements"), (ii) all contract rights
relating to the Chlor Alkali Plant or the Equipment and all reserves,
deferred payments, deposits, refunds and claims of every kind or
character relating thereto, but not including Accounts Receivable, as
defined in the Revolving Credit Agreement (collectively, "Contract
Rights") and (iii) all processes, designs, methodologies and related
documentation, technical information, manufacturing, engineering and
technical drawings related to the ownership and operation of the Chlor
Alkali Plant.
(h) All proceeds of the conversion, voluntary or involuntary,
of any of the foregoing into cash or liquidated claims, including,
without limitation, proceeds of insurance and condemnation or other
awards or payments with respect thereto and interest thereon
(collectively, "Proceeds").
TO HAVE AND TO HOLD the Mortgaged Property unto the Deed of
Trust Trustee and Beneficiary and to their successors and assigns forever to
secure the payment and performance of the Secured Obligations.
None of the Mortgaged Property is used principally or at all
for agricultural or farming purposes.
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SECTION II - SECURITY INTEREST
(a) With respect to all personal property (both tangible and
intangible) and any fixtures constituting a part of the Mortgaged Property,
this Deed of Trust shall likewise be a security agreement and a financing
statement and for valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and for the purpose of further securing payment of the
Secured Obligations, Trustor hereby grants to Beneficiary a security interest
in all of Trustor's rights, titles and interests in and to the Mortgaged
Property insofar as the Mortgaged Property consists of equipment, contract
rights, general intangibles, documents, instruments, chattel paper, fixtures
and any and all other personal property of any kind or character defined in and
subject to the provisions of the Uniform Commercial Code as in effect in the
State (the "Uniform Commercial Code"), including the proceeds, profits, rents,
revenues and products from any and all of such personal property. Upon the
occurrence and during the continuance of any Event of Default (as hereinafter
defined), Beneficiary is and shall be entitled to all of the rights, powers and
remedies afforded a secured party by the Uniform Commercial Code with reference
to the personal property and fixtures in which Beneficiary has been granted a
security interest herein, or the Deed of Trust Trustee or Beneficiary may
proceed as to both the real and personal property covered hereby in accordance
with the rights and remedies granted under this Deed of Trust in respect of the
real property covered hereby. Such rights, powers and remedies shall be
cumulative and in addition to those granted to the Deed of Trust Trustee or
Beneficiary under any other provision of this instrument or under any other
instrument executed in connection with or as security for the Secured
Obligations. A carbon or photographic or other reproduction of this Deed of
Trust shall be sufficient as a financing statement covering the Mortgaged
Property.
(b) Trustor shall, forthwith after the execution and
delivery of this Deed of Trust and thereafter, from time to time, cause this
Deed of Trust and any financing statement, continuation statement or similar
instrument relating to any thereof or to any property intended to be subject to
the Lien of this Deed of Trust to be filed, registered and recorded in such
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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 the validity and priority
thereof or the Lien hereof upon the Mortgaged Property and the interest and
rights of the Deed of Trust Trustee and Beneficiary herein and therein.
Trustor shall pay or cause to be paid all taxes and fees incident to such
filing, registration and recording, all expenses incident to the preparation,
execution and acknowledgment thereof, and of any instrument of further
assurance, and all federal or State stamp taxes or other taxes, duties and
charges arising out of or in connection with the execution and delivery of such
instruments.
(c) Trustor shall, at the sole cost and expense of
Trustor, do, execute, acknowledge and deliver all and every such further acts,
deeds, conveyances, deeds of trust, mortgages, assignments, notices of
assignment, transfers, financing statements, continuation statements and
assurances as the Deed of Trust Trustee or Beneficiary shall from time to time
reasonably request which may be necessary in the requesting party's judgment to
assure, perfect, convey, assign, mortgage, transfer and confirm unto the Deed
of Trust Trustee or Beneficiary the property and rights hereby conveyed or
assigned, or which Trustor may be or may hereafter become bound to convey or
assign to Beneficiary or which may facilitate the performance of the terms of
this Deed of Trust or the filing, registering or recording of this Deed of
Trust. In the event Trustor shall fail to execute any instrument required to
be executed by Trustor pursuant to this subsection II(c), Beneficiary may
execute the same as the attorney-in-fact for Trustor, such power of attorney
being coupled with an interest and irrevocable.
SECTION III - SECURED OBLIGATIONS
This Deed of Trust is executed and delivered by Trustor to
secure the payment and performance of the obligations (collectively, the
"Secured Obligations") described below:
(a) Any and all indebtedness, obligations and liabilities of
Trustor now or hereafter existing under or in respect of the Note Guarantee,
including, without limitation, payment of principal, premium, if any, interest
and Liquidated
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Damages (as defined in the Indenture), if any, when due and payable, and all
other amounts due or to become due under or in connection with the Indenture
(including, without limitation, all sums due to the Note Trustee pursuant to
Section 606 thereof), the Notes and the performance of all other obligations to
the Note Trustee and the Note Holders under the Indenture and the Notes,
according to the terms thereof (collectively, the "Indenture Obligation);
(b) Any and all indebtedness, obligations and liabilities of
Trustor now or hereafter existing under or in respect of the Term Loan
Guarantee, including, without limitation, payment of principal, premium, if
any, and interest when due and payable, and all other amounts due or to become
due under or in connection with the Term Loan Agreement (including, without
limitation, all sums due to the Term Loan Agent pursuant to Sections 10.3 and
10.4 thereof) and the Term Loan Notes and the performance of all other
obligations to the Term Loan Agent and the Term Loan Lenders under the Term
Loan Agreement and the Term Loan Notes according to the terms thereof
(collectively, the "Term Loan Obligation");
(c) Any sums which may be advanced or paid by Beneficiary
under the terms hereof on account of the failure of Trustor to comply with the
covenants of Trustor contained herein;
(d) All covenants, agreements, and obligations of Trustor
herein contained; and
(e) All renewals, rearrangements, increases,
substitutions and extensions, and all amendments, supplements and
modifications, to any of the obligations described in the preceding clauses (a)
through (d).
This Deed of Trust secures all future advances and obligations
constituting Secured Obligations and all future advances to preserve and
protect the Mortgaged Property and advances for attorneys' fees and expenses in
all cases pursuant to the terms of the Deed of Trust. The maximum amount of
advances of principal to be secured by this Deed of Trust may increase or
decrease from time to time by amendment to this Deed of Trust.
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SECTION IV - REPRESENTATIONS, WARRANTIES AND COVENANTS
Trustor hereby represents, warrants and covenants as follows:
(a) Good Title; Authority and Validity. Trustor has good and
marketable title to the Mortgaged Property and the landlord's interest and
estate under or in respect of the Leases, subject to the Excepted Liens, and
has, in all material respects, full corporate power and lawful authority to
bargain, grant, sell, mortgage, assign, transfer, convey and grant a security
interest in all of the Mortgaged Property all in the manner and form herein
provided and without obtaining the waiver, consent or approval of any lessor,
sublessor, Governmental Authority or entity or other party whomsoever or
whatsoever which has not been obtained, except in the case of certain
environmental permits and approvals which, by their terms, are not transferable
or cannot be transferred without the prior approval of the issuing agency. The
Improvements upon the Land are all within the boundary lines of the Land except
as set forth on Schedule 1 attached hereto or have the benefit of valid
easements, and there are no encroachments thereon that would materially impair
the use thereof. The Mortgaged Property is free and clear of any and all Liens
or encumbrances of any nature or kind except for the Excepted Liens and the
Leases. Trustor has all necessary permits, franchises, licenses,
rights-of-way, servitudes or other rights or authority needed in connection
with the operation and maintenance of the Chlor Alkali Plant, except where the
failure to have the same would not have a Material Adverse Effect; all of the
Plant Agreements are presently in full force and effect and no default has
occurred or exists thereunder, except where such default would not individually
or in the aggregate have a Material Adverse Effect; except as provided in the
Excepted Liens, Trustor's grant of a Lien and security interest in the
Mortgaged Property in the manner herein provided does not result in the
creation or imposition of any other Lien or security interest, adverse claim or
option upon any of the Mortgaged Property. Trustor's chief executive
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office and chief place of business is located at the address set forth in the
initial paragraph of this Deed of Trust. Trustor will not change its name,
identity or corporate structure or its chief executive office or chief place of
business without notifying the Deed of Trust Trustee and Beneficiary at least
thirty (30) days prior to the effective date of such change.
(b) Defense of Title. Trustor will warrant and defend title
to the Mortgaged Property, subject to Excepted Liens, against the claims and
demands of all other Persons whomsoever and will maintain and preserve the Lien
created hereby so long as any of the Secured Obligations secured hereby remains
unpaid. Should an adverse claim be made against the title to any material part
of the Mortgaged Property, Trustor agrees it will immediately notify
Beneficiary in writing thereof and defend against such adverse claim to the
extent necessary to preserve the Deed of Trust Trustee's and Beneficiary's
rights and benefits hereunder, subject to Excepted Liens, and Trustor further
agrees that the Deed of Trust Trustee and/or Beneficiary may take such other
reasonable action as they deem advisable to protect and preserve their
interests in the Mortgaged Property, and in such event Trustor will indemnify
the Deed of Trust Trustee and Beneficiary against any and all costs, reasonable
attorney's fees and other expenses which they may incur in defending against
any such adverse claim. Such obligations shall be payable on demand and shall
bear interest from the date of demand therefor until paid at the Note Rate.
Any proceeds of any policy of title insurance maintained by Trustor with
respect to the Mortgaged Property shall, for the purposes of this Deed of
Trust, be paid and applied in the same manner as Insurance Proceeds (as
hereinafter defined).
(c) First Lien. This Deed of Trust is, and always will be
kept, a direct first Lien and security interest upon the Mortgaged Property,
subject to the Excepted Liens, and Trustor will not create or suffer to be
created or permit to exist any Lien, security interest or charge prior or
junior to or on parity with the Lien and security interest of this Deed of
Trust upon the Mortgaged Property or any part thereof or upon the rents,
issues, revenues, profits or other income therefrom, except for the Excepted
Liens.
(d) Maintenance of Mortgaged Property. Trustor will at its
own expense do or cause to be done all things necessary to preserve and keep in
full repair, working order and efficiency,
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reasonable wear and tear excepted, all of the Mortgaged Property, including,
without limitation, all equipment, machinery and facilities, and from time to
time will make all the needful and proper repairs, renewals and replacements so
that at all times the state and condition of the Mortgaged Property will be
fully preserved and maintained, unless the failure to repair, renew or replace
would not materially interfere with the present use or operation of the
Mortgaged Property.
(e) Performance of Contracts; Operation of Plant. Trustor
will promptly pay and discharge all rentals, or other payments and will perform
or cause to be performed each and every act, matter or thing required by, each
and all of the contracts, instruments or agreements executed in connection with
or incident to the ownership and operation of the Chlor Alkali Plant (including
without limitation the Plant Agreements) and being a portion of the Mortgaged
Property and will do all other things necessary to keep unimpaired Trustor's
rights with respect thereto and to prevent any forfeiture thereof or default
thereunder, unless such forfeiture or default would not individually or in the
aggregate have a Material Adverse Effect. Trustor will operate the facilities
comprising the Chlor Alkali Plant in a good and workmanlike manner and in
accordance with the practices of the industry and in compliance in all material
respects with all Governmental Requirements affecting ownership and operation
of such facilities, including without limitation, Environmental Laws.
(f) Payment by the Trustee and/or Beneficiary. Trustor
agrees that if Trustor fails to perform any act or to take any action which
Trustor is required to perform or take hereunder or pay any money which Trustor
is required to pay hereunder (taking into account applicable grace or cure
periods), the Deed of Trust Trustee and/or Beneficiary in Trustor's name or its
own name may, but shall not be obligated to, during the continuance of an Event
of Default, perform or cause to perform such act or take such action or pay
such money, and any expenses so incurred by the Deed of Trust Trustee or
Beneficiary and any money so paid by the Deed of Trust Trustee or Beneficiary
shall be a demand obligation owing by Trustor to the Deed of Trust Trustee or
Beneficiary, and the Deed of Trust Trustee or Beneficiary, upon making such
payment, shall be subrogated to all
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of the rights of the Person receiving such payment. Each amount due and owing
by Trustor to holders of the Secured Obligations and/or the Deed of Trust
Trustee pursuant to this Deed of Trust shall bear interest from the date of
such expenditure or payment or other occurrence which gives rise to such amount
being owed to the Deed of Trust Trustee or Beneficiary until paid at the Note
Rate, and all such amounts together with such interest thereon shall be a part
of the Secured Obligations and shall be secured by this Deed of Trust.
(g) Name of Trustor. Trustor does not do business with
respect to the Mortgaged Property under any name other than Pioneer Chlor
Alkali Company, Inc.
(h) Operation by Third Parties. To the extent any of the
Mortgaged Property is operated by a party or parties other than Trustor,
Trustor's covenants as expressed in this Section IV are modified to require
that Trustor use its best efforts (including without limitation the reasonable
exercise of all rights and remedies as are available to Trustor) to obtain
compliance with such covenants by the operator or operators of the Mortgaged
Property.
(i) Compliance with Laws. The Chlor Alkali Plant
complies in all material respects with all local zoning, land use, setback and
other development, use and occupancy requirements of governmental authorities
except for possible nonconforming uses or violations which do not and will not
materially interfere with the present use, operation or maintenance thereof as
now used, operated or maintained.
(j) Payment of Taxes, Insurance Premiums, Assessments;
Compliance with Law and Insurance Requirements. (i) Unless contested in
accordance with the provisions of subsection IV(j)(v) hereof, Trustor shall pay
and discharge or cause to be paid and discharged, from time to time when the
same shall become due, all real estate and other taxes, special assessments,
levies, permits, inspection and license fees, all premiums for insurance, all
water and sewer rents and charges, and all other public charges imposed upon or
assessed against the Mortgaged Property or any part thereof or upon the
revenues, rents, issues, income and profits of the Mortgaged Property,
including, without
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limitation, those arising in respect of the occupancy, use or possession
thereof.
(ii) During the continuance of an Event of Default,
Trustor shall deposit with Beneficiary, on the first day of each month, an
amount reasonably estimated by Trustor to be equal to one-twelfth (1/12th) of
the annual taxes, assessments and other items required to be discharged by
Trustor under subsection IV(j)(i) and amounts reasonably estimated by Trustor
to be necessary to maintain the insurance coverages contemplated in subsection
IV(l) below, which estimates shall not be less than one-twelfth (1/12th) of the
annual taxes, assessments, insurance premiums and other items required to be
discharged by Trustor during the year immediately preceding the year during
which such Event of Default occurred. Such amounts shall be held by
Beneficiary without interest to Trustor and applied to the payment of each
obligation in respect of which such amounts were deposited, in such order or
priority as Beneficiary shall determine, on or before the date on which such
obligation would become delinquent. If at any time the amounts so deposited by
Trustor shall, in Beneficiary's judgment, be insufficient (when added to the
installments anticipated to be paid thereafter) to discharge any of such
obligations when due, Trustor shall, immediately upon demand, deposit with
Beneficiary such additional amounts as may be requested by Beneficiary.
Nothing contained in this subsection IV(j) shall affect any right or remedy of
the Deed of Trust Trustee or Beneficiary under any provision of this Deed of
Trust or of any statute or rule of law to pay any such amount from its own
funds (provided, however, that neither the Deed of Trust Trustee nor
Beneficiary shall in any event be obligated to pay any of such amounts from its
own funds) and to add the amount so paid, together with interest at the Note
Rate, to the Secured Obligations, or relieve Trustor of its obligations to make
or provide for the payment of the annual taxes, assessments and other charges
required to be discharged by Trustor under subsection IV(j)(i). Trustor hereby
grants to Beneficiary a security interest in all sums held pursuant to this
subsection IV(j)(ii) to secure payment and performance of the Secured
Obligations. During the continuance of any Event of Default, Beneficiary may
apply all or any part of the sums held pursuant to this subsection IV(j)(ii) to
payment and performance of the Secured Obligations in accordance with the
provisions of
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the Intercreditor Agreement. Trustor shall redeposit with Beneficiary an
amount equal to all amounts so applied as a condition to the cure, if any, of
such Event of Default, in addition to fulfillment of any other required
conditions.
(iii) Unless contested in accordance with the provisions of
subsection IV(j)(v), Trustor shall timely pay (or obtain a bond in the amount
of) all lawful claims and demands of mechanics, materialmen, laborers,
warehousemen, employees, suppliers, government agencies administering worker's
compensation insurance, old age pensions and social security benefits and all
other claims, judgments, demands or amounts of any nature which, if unpaid or
not bonded, could result in or permit the creation of a Lien (other than an
Excepted Lien) on the Mortgaged Property or any part thereof or the Rents
arising therefrom, or which might result in forfeiture of all or any part of
the Mortgaged Property.
(iv) Trustor shall maintain, or cause to be maintained, in full
force and effect, all permits, certificates, authorizations, consents,
approvals, registrations, filings, licenses, franchises or other instruments
now or hereafter required by any Governmental Authority to operate or use and
occupy the Chlor Alkali Plant and the Equipment for its intended uses
(collectively, the "Permits"; each, a "Permit"), unless the failure to maintain
such Permits would not individually or in the aggregate have a Material Adverse
Effect. Trustor represents that, to its knowledge and subject to those
requirements for notice, approval or reissuance set forth by applicable law,
none of the Permits will be subject to cancellation, forfeiture or any
limitation on the scope thereof solely by virtue of the execution of this Deed
of Trust or the foreclosure of the Lien hereof. Unless contested in accordance
with the provisions of subsection IV(j)(v), Trustor shall comply promptly with,
or cause prompt compliance with, all requirements set forth in the Permits and
all Governmental Requirements applicable to all or any part of the Mortgaged
Property or the condition, use or occupancy of all or any part thereof or any
recorded deed of restriction, declaration, covenant running with the land or
otherwise, now or hereafter in force unless the compliance therewith would not
individually or in the aggregate have a Material Adverse Effect. Trustor shall
not initiate or consent to any change in the
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zoning, subdivision or any other use classification of the Land, if such action
could have a material adverse effect on the Lien of this Deed of Trust or
materially impair the present use and operation of the Mortgaged Property or
materially impair Beneficiary's rights or benefits hereunder, without the prior
written consent of Beneficiary.
(v) Trustor may at its own expense contest the amount or
applicability of any of the obligations described in subsections IV(j)(i),
IV(j)(iii) and IV(j)(iv) by appropriate legal proceedings, prosecution of which
operates to prevent the collection or enforcement thereof or the sale or
forfeiture of the Mortgaged Property or any part thereof to satisfy such
obligations; provided, however, that (A) any such contest shall be conducted in
good faith by appropriate legal proceedings promptly instituted and diligently
conducted and (B) in connection with such contest, Trustor shall have made
provision for the payment or performance of such contested obligation on
Trustor's books if and to the extent required by generally accepted accounting
principles then utilized by Trustor in the preparation of its financial
statements, or shall have deposited with Beneficiary a sum sufficient to pay
and discharge such obligation and Beneficiary's estimate of all interest and
penalties related thereto. Notwithstanding the foregoing provisions of this
subsection IV(j)(v), (A) no contest of any such obligations may be pursued by
Trustor if such contest would expose the Deed of Trust Trustee, Beneficiary, or
any other Secured Party to any possible criminal liability or, unless Trustor
shall have furnished an Additional Undertaking (as hereinafter defined)
therefor satisfactory to the Deed of Trust Trustee, Beneficiary, or such other
Secured Party, as the case may be, any civil liability for failure to comply
with such obligations and (B) if at any time payment or performance of any
obligation contested by Trustor pursuant to this subsection IV(j)(v) shall
become necessary to prevent the delivery of a tax or similar deed conveying the
Mortgaged Property or any portion thereof because of nonpayment or
nonperformance, Trustor shall pay or perform the same in sufficient time to
prevent the delivery of such tax or similar deed.
(vi) Trustor shall not in its use and occupancy of the Chlor
Alkali Plant or the Equipment (including, without
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limitation, in the making of any Alteration) take any action that would cause
the termination, revocation or denial of any insurance coverage required to be
maintained under this Deed of Trust or that pursuant to written notice from any
applicable insurer, would be the basis for a defense to any claim under any
insurance policy maintained in respect of the Chlor Alkali Plant or the
Equipment and Trustor shall otherwise comply in all material respects with the
requirements of any insurer that issues a policy of insurance in respect of the
Chlor Alkali Plant or the Equipment.
(vii) Trustor shall, promptly upon receipt of any written notice
regarding any failure by Trustor to pay or discharge any of the obligations
described in subsection IV(j)(i) or (vi), furnish a copy of such notice to
Beneficiary. Trustor shall, promptly upon receipt of any written notice
regarding any failure by Trustor to pay or discharge any of the obligations
described in subsection IV(j)(iii) or (iv), furnish a copy of such notice to
Beneficiary, if such failure would have a Material Adverse Effect.
(k) Certain Tax Law Changes. In the event of the passage
after the date of this Deed of Trust of any law deducting from the value of
real property, for the purpose of taxation, amounts in respect of any Lien
thereon or changing in any way the laws for the taxation of deeds of trust or
debts secured by deeds of trust for state or local purposes or the manner of
the collection of any such taxes, and imposing a new tax, either directly or
indirectly, on this Deed of Trust or the interest of any Secured Party in any
Mortgaged Property (other than income, franchise or similar taxes imposed on
such Secured Party), or in the event that any regulation or regulatory
amendment becoming effective after the date hereof imposes any State tax on
interest income received with respect to any Secured Obligation, Trustor shall
promptly pay the applicable Secured Party such amount or amounts as may be
necessary from time to time to pay such tax.
(l) Required Insurance Policies. (i) Trustor shall
maintain, or cause to be maintained, in full force and effect the following
insurance coverages in respect of the Chlor Alkali Plant and the Equipment:
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(A) Physical hazard insurance on an "all risk" basis covering
hazards commonly covered by fire and extended coverage, lightning,
civil commotion, hail, riot, strike, water damage, sprinkler leakage,
collapse and malicious mischief, in an amount equal to the full
replacement cost of the Improvements and all Equipment, with such
deductibles as would be maintained by a prudent operator of property
similar in use and configuration to the Chlor Alkali Plant and located
in the locality where the Chlor Alkali Plant is located. "Full
replacement cost" means the cost of construction to replace the
Improvements and the Equipment, exclusive of depreciation, excavation,
foundation and footings, as determined from time to time by a proper
officer of Trustor in consultation with its insurance company or
insurance agent, as appropriate;
(B) Comprehensive general liability insurance against claims
for bodily injury, death or property damage occurring on, in or about
the Chlor Alkali Plant and any adjoining streets, sidewalks and
passageways and covering any and all claims, including, without
limitation, all legal liability, subject to customary exclusions, to
the extent insurable, imposed upon Beneficiary or any Secured Party
and all court costs and attorneys' fees, arising out of or connected
with the possession, use, leasing, operation or condition of the Chlor
Alkali Plant, with policy limits and deductibles in such amounts as
would be maintained by a prudent operator of property similar in use
and configuration to the Chlor Alkali Plant and located in the
locality where the Chlor Alkali Plant is located;
(C) Workers' compensation insurance as required by the laws
of the State to protect Trustor against claims for injuries sustained
in the course of employment at the Chlor Alkali Plant;
(D) Comprehensive boiler and machinery insurance to cover
sudden and accidental breakdown, including but not limited to,
explosion of any boilers and machinery located on the Chlor Alkali
Plant or comprising any Equipment, with policy limits and deductibles
in such amounts as would be maintained by a prudent operator of
property similar in use
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and configuration to the Chlor Alkali Plant and the Equipment and
located in the locality where the Chlor Alkali Plant is located;
(E) Comprehensive automobile liability insurance policy
against claims for bodily injury, death and property damage covering
all owned, leased, non-owned and hired motor vehicles, including
loading and unloading in such amounts as would be maintained by a
prudent operator of property similar in use and configuration to the
Chlor Alkali Plant and the Equipment and located in the locality where
the Chlor Alkali Plant is located;
(F) Business interruption insurance on an annual basis in
amounts not less than the projected gross profit of the Chlor Alkali
Plant during the applicable twelve-month period but in no event less
than the amount necessary to pay the fixed charges and other expenses
of owning, operating and maintaining the Mortgaged Property for the
same period;
(G) To the extent not otherwise covered by the insurance
required under clauses (A) and (B) of this subsection IV(l)(i), during
the performance of any alterations, renovations, repairs, restorations
or construction, broad form Builders Risk Insurance on an all-risk
completed value basis; and
(H) Such other insurance, against such risks and with policy
limits and deductibles in such amounts as would be maintained by a
prudent operator of property similar in use and configuration to the
Chlor Alkali Plant and located in the locality in which the Chlor
Alkali Plant is located.
(ii) Trustor may maintain the coverages required by this
subsection IV(l) under blanket policies covering the Chlor Alkali Plant and
other locations owned or operated by Trustor if the terms of such blanket
policies otherwise comply with the provisions of this subsection IV(l) and
contain specific coverage allocations in respect of the Chlor Alkali Plant
determined in accordance with the provisions of this subsection IV(l). All
insurance policies in respect of the coverages required by subsections
IV(l)(i)(A), IV(l)(i)(D), IV(l)(i)(G) and, if
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applicable, IV(l)(i)(H) shall be in amounts at least sufficient to prevent
coinsurance liability and all losses thereunder shall be payable to
Beneficiary, as loss payee, subject to the terms of the Intercreditor
Agreement, pursuant to a standard noncontributory New York mortgage endorsement
or local equivalent, and each such policy shall, to the extent obtainable at
commercially reasonable costs, (A) include effective waivers (whether under the
terms of such policy or otherwise) by the insurer of all claims for insurance
premiums against all loss payees and named insureds other than Trustor and all
rights of subrogation against any named insured, and (B) provide that any
losses thereunder shall be payable notwithstanding (1) any act, failure to act,
negligence of, or violation or breach of warranties, declarations or conditions
contained in such policy by Trustor or Beneficiary or any other named insured
or loss payee, (2) the occupation or use of the Chlor Alkali Plant or the
Equipment for purposes more hazardous than permitted by the terms of the
policy, (3) any foreclosure or other proceeding or notice of sale relating to
the Chlor Alkali Plant or the Equipment or (4) any change in the title to or
ownership or possession of the Chlor Alkali Plant or the Equipment; provided,
however, that (with respect to items contemplated in clauses (3) and (4) above)
any notice requirements of the applicable policies are satisfied. All
insurance policies in respect of the coverages required by subsections
IV(l)(i)(B), IV(l)(i)(E) and, if applicable, IV(l)(i)(H) shall name Beneficiary
as an additional insured. Each policy of insurance required under this
subsection IV(l) shall provide that (A) notices of any failure by Trustor to
pay any insurance premium in respect thereof, be furnished to Beneficiary
contemporaneously with any such notice given to Trustor and (B) it may not be
cancelled or otherwise terminated without at least twenty (20) days' prior
written notice to Beneficiary and shall permit Beneficiary to pay any premium
therefor within twenty (20) days after receipt of any notice stating that such
premium has not been paid when due. The policy or policies of such insurance
or certificates of insurance evidencing the required coverages and all renewals
or extensions thereof shall be delivered to Beneficiary upon receipt by
Trustor. Settlement of any claim under any of the insurance policies referred
to in this subsection IV(l) (other than the insurance contemplated in clause(C)
of this subsection IV(l)(i)) which in Trustor's reasonable judgment involves
loss of
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$1,000,000 or more, shall require the prior approval of Beneficiary (acting
pursuant to the provisions of the Intercreditor Agreement) and Trustor shall
use its best efforts to cause each such insurance policy to contain a provision
to such effect.
(iii) At least fifteen (15) days prior to the expiration of
any insurance policy required by this subsection IV(l), Trustor shall deliver
to Beneficiary evidence that such policy or policies shall be renewed or
extended and Trustor shall deliver promptly to Beneficiary after receipt
thereof the policy or policies renewing or extending such expiring policy or
renewal or extension certificates or other evidence of renewal or extension,
together with a receipt showing payment of the premium thereof.
(iv) Trustor shall not purchase additional policies in
respect of the insurance coverages required to be maintained under this
subsection IV(l), unless Beneficiary is included thereon as an additional named
insured and, if applicable, with loss payable to Beneficiary under an
endorsement containing the provisions described in subsection IV(l)(ii) and the
policy evidencing such insurance otherwise complies with the requirements of
subsection IV(l)(ii). Trustor immediately shall notify Beneficiary whenever
any such separate insurance policy is obtained and promptly shall deliver to
Beneficiary the policy or certificate evidencing such insurance.
(m) Inspection. Trustor shall permit Beneficiary, by its
agents, accountants and attorneys, to visit and inspect the Mortgaged Property
upon reasonable prior notice at such times as may be reasonably requested by
Beneficiary.
(n) Trustor To Maintain Improvements. Trustor shall not
commit any waste on the Chlor Alkali Plant or with respect to any Equipment or
make any change in the use of the Chlor Alkali Plant or any Equipment. Trustor
represents and warrants that (i) to Trustor's knowledge, the Chlor Alkali Plant
is served by all electric, gas, sewer, water facilities and any other utilities
required or necessary for the current use thereof and any easements or
servitudes necessary to the furnishing of such utility service by Trustor have
been obtained and duly recorded,
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and (ii) Trustor has access to the Chlor Alkali Plant from public roads
sufficient to allow Trustor and its tenants and invitees to conduct its and
their businesses at the Chlor Alkali Plant as it is currently conducted.
Trustor shall not materially alter the occupancy or use of the Chlor Alkali
Plant without the prior written consent of Beneficiary. Except as otherwise
permitted by the Intercreditor Agreement no Improvements comprising a portion
of the Chlor Alkali Plant may be demolished nor shall any Equipment be removed
without the prior written consent of Beneficiary.
(o) Leases. (i) All of the Leases are valid and effective
in accordance with their respective terms, except that the enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or
other similar law affecting or relating to enforcement of creditors' rights
generally, and (ii) general equitable principles. To Trustor's knowledge,
Trustor is not in material breach of or in default (and to Trustor's knowledge,
no event has occurred which with due notice or lapse of time or both, may
constitute such a material breach or default) under any Lease, and no party to
any Lease has given Trustor written notice of or made a claim with respect to
any breach or default, the consequences of which, individually or in the
aggregate, would have a Material Adverse Effect on Trustor.
(ii) Trustor shall manage and operate the Mortgaged Property
or cause the Mortgaged Property to be managed and operated in a reasonably
prudent manner and, except as otherwise permitted under subsection IV(p), will
not enter into any Lease (or any amendment or modification thereof) or other
agreement subsequent to the date hereof with any Person which, in the
reasonable judgment of Trustor, individually or in the aggregate, would have a
Material Adverse Effect on the value of the property subject thereto.
(iii) Trustor shall not:
(A) receive or collect, or permit the receipt or collection
of, any rental or other payments under any Lease more than one (1)
month in advance of the respective period in respect of which they are
to accrue, except that (a) in
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connection with the execution and delivery of any Lease or of any
amendment to any Lease, rental payments thereunder may be collected
and received in advance in an amount not in excess of one (1) month's
rent and (b) Trustor may receive and collect escalation and other
charges in accordance with the terms of each Lease;
(B) assign, transfer or hypothecate (other than to
Beneficiary hereunder or as otherwise permitted under subsection IV(p)
of this Deed of Trust) any rental or other payment under any Lease
whether then due or to accrue in the future, the interest of Trustor
as lessor under any Lease or the rents, issues, revenues, profits or
other income of the Mortgaged Property;
(C) enter into any Lease after the date hereof that does not
contain terms to the effect as follows:
(1) such Lease and the rights of the tenant
thereunder shall be subject and subordinate to the rights of
Beneficiary under and the Lien of this Deed of Trust;
(2) such Lease has been assigned as collateral
security by Trustor as landlord thereunder to Beneficiary
under this Deed of Trust;
(3) in the case of any foreclosure hereunder, the
rights and remedies of the tenant in respect of any
obligations of any successor landlord thereunder shall be
limited to the equity interest of such successor landlord in
the Chlor Alkali Plant and any successor landlord shall not
(a) be liable for any act, omission or default of any prior
landlord under the Lease or (b) be required to make or
complete any tenant improvements or capital improvements or
repair, restore, rebuild or replace the demised premises or
any part thereof in the event of damage, casualty or
condemnation or (c) be required to pay any amounts to tenant
arising under the Lease prior to such successor landlord
taking possession;
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(4) the tenant's obligation to pay rent and any
additional rent shall not be subject to any abatement,
deduction, counterclaim or setoff as against Beneficiary or
any purchaser upon the foreclosure of any portion of the Chlor
Alkali Plant or the giving or granting of a deed in lieu
thereof by reason of a landlord default occurring prior to
such foreclosure, and Beneficiary or such purchaser will not
be bound by any advance payments of rent in excess of one
month or any security deposits unless such security was
actually received; and
(5) the tenant agrees to attorn, at the option of
Beneficiary or any purchaser of the Chlor Alkali Plant, to the
successor owner upon a foreclosure of the Chlor Alkali Plant
or the giving or granting of a deed in lieu thereof; and
(D) terminate or permit the termination of any Lease of
space, accept surrender of all or any portion of the space demised
under any Lease prior to the end of the term thereof or accept
assignment of any Lease to Trustor which, in the reasonable judgment
of Trustor, individually or in the aggregate, would have a Material
Adverse Effect or materially impair the Lien of this Deed of Trust
therein unless:
(1) the tenant under such Lease has not paid the
equivalent of two months' rent and Trustor has made reasonable
efforts to collect such rent; or
(2) Trustor shall deliver to Beneficiary an
Officers' Certificate to the effect that Trustor has entered
into a new Lease (or Leases) for the space covered by the
terminated or assigned Lease with a term (or terms) which
expire(s) no earlier than the date on which the terminated or
assigned Lease was to expire (excluding renewal options), and
with a tenant (or tenants) having a creditworthiness (as
reasonably determined by Trustor) sufficient to pay the rent
and other charges due under the new Lease (or Leases), and the
tenant(s) shall have commenced paying rent,
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including, without limitation, all operating expenses and
other amounts payable under the new Lease (or Leases), without
any abatement or concession, in an amount at least equal to
the amount which would have then been payable under the
terminated or assigned Lease.
(iv) Trustor timely shall perform and observe all the terms,
covenants and conditions required to be performed and observed by Trustor under
each Lease and will not engage in any conduct in respect of any Lease which
would have individually or in the aggregate a Material Adverse Effect or
materially impair the Lien of this Deed of Trust or the security interest
created hereby. Trustor promptly shall notify Beneficiary of the receipt of
any notice from any lessee under any Lease claiming that Trustor is in material
default in the performance or observance of any of the terms, covenants or
conditions thereof to be performed or observed by Trustor and will cause a copy
of each such notice to be delivered promptly to Beneficiary.
(p) Transfer Restrictions. Except as otherwise permitted by
the Intercreditor Agreement, Trustor shall not, without the prior written
consent of Beneficiary, further mortgage, encumber, hypothecate, sell, convey
or assign all or any part of the Mortgaged Property or suffer any of the
foregoing to occur by operation of law or otherwise (each a "Transfer");
provided, however, Trustor may so encumber the Mortgaged Property to the extent
such encumbrances are of the kind listed in clause (e) of the definition of
"Excepted Liens". Any proceeds of such permitted Transfer shall be deemed
Collateral Proceeds (as such term is defined in the Indenture) and are hereby
assigned and shall be paid to Beneficiary to be held in the Collateral Account
and disbursed pursuant to the Intercreditor Agreement.
(q) Destruction; Condemnation.
(i) Destruction; Insurance Proceeds. If there shall occur
any damage to, or loss or destruction of, the Improvements and Equipment, or
any part of any thereof (each, a "Destruction"), Trustor shall promptly send to
Beneficiary a notice setting forth the nature and extent of such Destruction.
The proceeds of any insurance payable in respect of any such
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Destruction are hereby assigned and shall be paid to Beneficiary to be held in
the Collateral Account; provided, however, that so long as no Event of Default
shall have occurred and be continuing, if such proceeds are in an amount less
than $1,000,000, such proceeds shall be paid directly to Trustor. All
insurance proceeds paid to Beneficiary pursuant to this subsection, less the
amount of any expenses incurred in litigating, arbitrating, compromising or
settling any claim arising out of such Destruction (the "Insurance Proceeds"),
shall constitute Trust Moneys and be applied in accordance with the provisions
of subsections IV(q)(iii), IV(q)(iv) and IV(q)(v).
(ii) Condemnation; Assignment of Award. If there shall occur
any taking of the Mortgaged Property or any part thereof, in or by condemnation
or other eminent domain proceedings pursuant to any law, general or special, or
by reason of the temporary requisition of the use or occupancy of the Mortgaged
Property or any part thereof, by any governmental authority, civil or military
(each, a "Taking"), Trustor immediately shall notify Beneficiary upon receiving
notice of such Taking or commencement of proceedings therefor. Beneficiary may
(but shall not be obligated to) participate in any proceedings or negotiations
which might result in any Taking. Beneficiary may be represented by counsel
satisfactory to it at the expense of Trustor. Trustor shall deliver or cause
to be delivered to Beneficiary all instruments requested by it to permit such
participation. Trustor shall in good faith and with due diligence file and
prosecute what would otherwise be Trustor's claim for any such award or payment
and cause the same to be collected and paid over to Beneficiary, and hereby
irrevocably authorizes and empowers Beneficiary, in the name of Trustor as its
true and lawful attorney-in-fact or otherwise, during the continuance of an
Event of Default to collect and to receipt for any such award or payment, and,
in the event Trustor fails so to act, to file and prosecute such claim.
Trustor shall pay all costs, fees and expenses incurred by Beneficiary in
connection with any Taking and seeking and obtaining any award or payment on
account thereof. Any proceeds, award or payment in respect of any Taking are
hereby assigned and shall be paid to Beneficiary to be held in the Collateral
Account; provided, however, that so long as no Event of Default shall have
occurred and be continuing, if such proceeds are in an amount less than
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$1,000,000, such proceeds shall be paid directly to Trustor. Trustor shall
take all steps necessary to notify the condemning authority of such assignment.
Such proceeds, award or payment paid to Beneficiary, less the amount of any
expenses incurred in litigating, arbitrating, compromising or settling any
claim arising out of such Taking ("Net Award"), shall constitute Trust Moneys
and be applied in accordance with the provisions of subsections IV(q)(iii),
IV(q)(iv) and IV(q)(v).
(iii) Payment or Restoration. So long as no Event of Default
shall have occurred and be continuing, Trustor shall have the right, at
Trustor's option, to require Beneficiary to apply such Net Award or Insurance
Proceeds to the payment of the Secured Obligations, in accordance with the
Intercreditor Agreement or to perform a restoration (each, a "Restoration") of
the affected portions of the Chlor Alkali Plant and the Equipment. In the
event that Trustor elects to make such payment, such Net Award or Insurance
Proceeds shall be delivered to the Beneficiary to be held as Trust Moneys
subject to withdrawal and application by Beneficiary in accordance with the
provisions of the Intercreditor Agreement. In the event Trustor elects to
perform a Restoration, Trustor shall give written notice ("Restoration Election
Notice") of such election to Beneficiary within twenty (20) business days after
the date that Beneficiary receives the applicable Insurance Proceeds or Net
Award, as the case may be. Trustor shall, within twenty (20) business days
following the date of delivery of a Restoration Election Notice, commence and
diligently continue to perform the Restoration of that portion or portions of
the Chlor Alkali Plant and Equipment subject to such Destruction or affected by
such Taking so that, upon the completion of the Restoration, the Mortgaged
Property shall be in the same condition and shall be of at least equal utility
for its intended purposes as the Mortgaged Property was immediately prior to
such Destruction or Taking. Trustor shall so complete such Restoration with
its own funds to the extent that the amount of any Net Award or Insurance
Proceeds is insufficient for such purpose. In the event Beneficiary does not
receive a Restoration Election Notice within such twenty (20) business day
period, Beneficiary shall apply such Insurance Proceeds or Net Award to the
payment of the Secured Obligations, in accordance with the provisions of the
Intercreditor Agreement.
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(iv) Restoration. In the event a Restoration is to be
performed under this subsection IV(q)(iv), Beneficiary shall not release any
part of the Net Award or the Insurance Proceeds except in accordance with the
provisions of subsection IV(q)(v) and Trustor shall, prior to commencing any
work to effect a Restoration of the Chlor Alkali Plant and the Equipment,
promptly (but in no event later than one-hundred twenty (120) days following
any Destruction or Taking) furnish to Beneficiary:
(A) complete plans and specifications (the "Plans and
Specifications") for the Restoration;
(B) an officers' certificate stating that all permits and
approvals required by law to commence work in connection with the
Restoration have been obtained;
(C) a certificate (an "Architect's Certificate") of an
independent, reputable architect or engineer acceptable to Beneficiary
and licensed in the State (1) stating that the Plans and
Specifications have been reviewed and approved by the signatory
thereto, (2) containing such signatory's estimate (an "Estimate") of
the costs of completing the Restoration, and (3) upon completion of
such Restoration in accordance with the Plans and Specifications, the
utility of the Chlor Alkali Plant and the Equipment will be equal to
or greater than the utility thereof immediately prior to the
Destruction or Taking relating to such Restoration; and
(D) if the Estimate exceeds the Insurance Proceeds or the Net
Award, as the case may be, by $5,000,000 or more, an Additional
Undertaking in an amount equal to not less than the Estimate less the
amount of the Insurance Proceeds or the Net Award, as the case may be,
then held by Beneficiary for application toward the cost of such
Restoration.
Upon receipt by Beneficiary of each of the items required
pursuant to clauses (A) through (D) above, Beneficiary shall acknowledge
receipt of the Plans and Specifications. Promptly upon such acknowledgment of
receipt by Beneficiary, Trustor shall commence and diligently continue to
perform the Restoration substantially in accordance with such Plans and
Specifications and in material compliance with all Governmental
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Requirements, free and clear of all Liens except Excepted Liens. Trustor shall
so complete such Restoration with its own funds to the extent that the amount
of any Net Award or Insurance Proceeds is insufficient for such purpose.
(v) Restoration Advances Following Destruction or Taking of
Mortgaged Property. In the event Trustor performs a Restoration of the Chlor
Alkali Plant and Equipment as provided in subsection IV(q)(iv), Beneficiary
shall apply any Insurance Proceeds or Net Award held by Beneficiary on account
of the Destruction or Taking to the payment of the cost of performing such
Restoration pursuant to the relevant provisions of the Intercreditor Agreement.
In the event there shall be any surplus after application of the Net Award or
the Insurance Proceeds to Restoration of the Chlor Alkali Plant and the
Equipment, such surplus shall become Net Proceeds, as defined in the Indenture
and shall be paid by Beneficiary to the Note Trustee for application in
accordance thereunder; provided, however, that if an Event of Default shall
have occurred and be continuing, such surplus shall be applied by Beneficiary
to the payment of the Secured Obligations, in accordance with Article 6 of the
Intercreditor Agreement. Notwithstanding anything to the contrary herein, if a
Destruction or Taking of all or substantially all of the Mortgaged Property
occurs on a date which is less than 12 months prior to Maturity, as such term
is defined in the Indenture, all Insurance Proceeds and Net Awards shall be
applied to the permanent repayment or prepayment of any Secured Obligations
then outstanding in accordance with the Intercreditor Agreement.
(r) Alterations. Trustor shall not make any material
structural addition, modification or change (each, an "Alteration") to the
Chlor Alkali Plant or the Equipment which would materially diminish the utility
of the Mortgaged Property or impair the Lien of this Deed of Trust thereon.
Whether or not Beneficiary has consented to the making of any Alteration,
Trustor shall (i) complete each Alteration promptly, in a good and workmanlike
manner and in material compliance with all applicable local laws, ordinances
and requirements and (ii) pay when due all claims for labor performed and
materials furnished in connection with such Alteration, unless contested in
accordance with the provisions of subsection IV(j)(v).
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(s) Hazardous Material.
(i) Except with respect to those matters which would not
reasonably be expected to have a Material Adverse Effect, to the best knowledge
of Trustor, Trustor holds all Permits required to permit Trustor to conduct its
business in the manner now conducted and none of the Trustor's operations are
being conducted in a manner that violates in any material respect the terms and
conditions under which any such Permit was granted, including without
limitation, under any Environmental Laws, except those permits that are
expected to be transferred in the ordinary course after the date hereof; to the
best knowledge of Trustor all such Permits are valid and in full force and
effect; and to the knowledge of Trustor, no suspension, cancellation,
revocation or termination of any such Permit is threatened.
(ii) Except as set forth in the Term Loan Agreement, there
are no material claims, actions, suits, proceedings or investigations pending
or to the knowledge of Trustor, threatened, before any Governmental Authority
or before any arbitrator brought by or against Trustor or with respect to any
of the Mortgaged Property the basis of which is any Environmental Law.
(iii) Trustor shall (or shall cause other parties obligated
to do so under contract or indemnity to) (A) take all commercially reasonable
actions to comply with any and all applicable present and future Environmental
Laws relating to the Chlor Alkali Plant; (B) pay in a timely fashion the cost
of any removal, response measure or corrective action relating to any Hazardous
Materials required by any Environmental Law or any order, regulation, consent
decree or similar agreement or instrument and keep the Mortgaged Property free
of any Lien imposed pursuant to any Environmental Law; (C) take all
commercially reasonable actions to not release, discharge or dispose of any
Hazardous Materials on, under or from the Mortgaged Property in violation of
any Environmental Law; (D) apply any insurance proceeds or other sums received
by it in respect of the removal of any Hazardous Material or any other
corrective action relating to any Hazardous Material to such removal or
corrective action; and (E) not take, or fail to take any action with respect to
any Environmental Laws or in connection with any Hazardous Materials that could
reasonably be expected to result in the incurrence of any obligation or
liability of any Secured Party. During the continuance of an Event of Default,
in the event Trustor fails to comply with the covenants in the preceding
sentence, Beneficiary may (upon receipt of an indemnity satisfactory to
Beneficiary), in addition to any other remedies set forth herein, but shall not
be obligated to, as trustee for and at Trustor's sole cost and expense cause to
be taken, any remediation, removal, response or corrective action relating to
Hazardous Materials that is required by Environmental Law and is not being done
or contested by Trustor. Any costs or expenses incurred by Beneficiary for
such purpose shall be immediately due and payable by Trustor and shall bear
interest at the Note Rate. Trustor shall provide to Beneficiary and its agents
and employees access to the Mortgaged Property to take any action required by
Environmental Laws, or in
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connection with any Hazardous Materials, that could be expected to result in
the incurrence of any obligation or liability of any Secured Party, if Trustor
fails to do so and such action or removal is required under any Environmental
Laws as provided above. Upon written request by Beneficiary, which shall
include a reasonably specific statement of the basis thereof (which shall be
specific to the condition of the Mortgaged Property and the alleged violation
of Environmental Law) and which shall be made not more frequently than once in
any twelve-month period or at any time that Beneficiary is exercising its
remedies under this Deed of Trust, Beneficiary shall have the right (upon
receipt of an indemnity satisfactory to Beneficiary), but shall not be
obligated, at the sole cost and expense of Trustor, to conduct an environmental
audit or review of the Mortgaged Property relating to the specific items as
required in writing or relating to the remedy that Beneficiary is exercising
under this Deed of Trust by persons or firms appointed by Beneficiary, and
Trustor shall cooperate in all reasonable respects in the conduct of such
environmental audit or review, including, without limitation, by providing
reasonable access to the Mortgaged Property and to all records relating
thereto. Such audit or review shall be conducted in a manner that would not
reasonably be expected to impose any additional material obligation upon, or
materially increase any obligation of, OCC Tacoma, Inc. or its successors
("OCC") under that certain Asset Purchase Agreement dated as of June 17, 1997
between OCC and Pioneer Companies, Inc., which
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agreement was assigned by Pioneer Companies, Inc. to Trustor pursuant to the
Assignment and Assumption Agreement dated as of June 17, 1997, or any Related
Agreements (as defined in said Asset Purchase Agreement), with respect to
Hazardous Materials at the Mortgaged Property. Trustor shall indemnify and
hold the Secured Parties harmless from and against all loss, cost, damage or
expense (including, without limitation, attorneys' fees) that any Secured Party
may sustain by reason of the assertion against such party of any claim relating
to such Hazardous Materials or actions taken with respect thereto as authorized
hereunder. Nothing contained herein shall result in any Secured Party being
deemed an "owner" or "operator" under applicable Environmental Law.
(iv) Trustor may at its own expense contest the amount or
applicability of any of the obligations described in the first sentence of
subsection IV(s)(iii) by appropriate legal proceedings, prosecution of which
operates to prevent the enforcement thereof; provided, however, that (A) any
such contest shall be conducted in good faith by appropriate legal proceedings
promptly instituted and diligently conducted and (B) in connection with such
contest, Trustor shall have made provision for the payment or performance of
such contested obligation on Trustor's books if and to the extent required by
generally accepted accounting principles then utilized by Trustor in the
preparation of its financial statements, or shall have deposited with
Beneficiary a sum sufficient to pay and discharge such obligation and
Beneficiary's estimate of all interest and penalties related thereto.
Notwithstanding the foregoing provisions of this subsection IV(s)(iv), no
contest of any such obligations may be pursued by Trustor if such contest would
expose the Deed of Trust Trustee, Beneficiary, or any other Secured Party to
any possible criminal liability or, unless Trustor shall have furnished an
Additional Undertaking (as hereinafter defined) therefor satisfactory to the
Deed of Trust Trustee, Beneficiary or such other Secured Party, as the case may
be, any civil liability for failure to comply with such obligations.
(t) Asbestos. Trustor shall not install nor permit to be
installed in the Mortgaged Property friable asbestos or any asbestos-containing
material (collectively, "ACM") except in
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compliance with all applicable Environmental Laws respecting such material.
With respect to any ACM currently present in the Mortgaged Property, except
with respect to matters which would not have a Material Adverse Effect, Trustor
shall comply with all federal, state or local laws, regulations or orders
applicable to ACM located on the Chlor Alkali Plant, all at Trustor's sole cost
and expense. If Trustor shall fail so to comply with such laws or regulations,
Beneficiary may (upon receipt of an indemnity satisfactory to Beneficiary)
during the continuance of an Event of Default, but shall not be obligated to,
in addition to any other remedies set forth herein, take those steps reasonably
necessary to comply with applicable law, regulations or orders. Any costs or
expenses incurred by Beneficiary for such purpose shall be immediately due and
payable by Trustor and bear interest at the Note Rate. Trustor shall provide
to Beneficiary and its agents and employees reasonable access to the Mortgaged
Property upon reasonable prior notice to remove such ACM if Trustor fails to do
so and removal is required under any Environmental Law as provided for above;
provided, however, that nothing contained herein shall obligate Beneficiary to
exercise any rights under such license. Trustor shall indemnify and hold the
Secured Party harmless from and against all loss, cost, damage and expense that
any Secured Party may sustain as a result of the presence of any ACM and any
removal thereof in compliance with any applicable Environmental Law.
(u) Books and Records; Reports. Trustor shall keep proper
books of record and account, which shall accurately represent the financial
condition of Trustor and the business affairs of Trustor relating to the
Mortgaged Property. Beneficiary and its authorized representatives shall have
the right, from time to time, upon reasonable prior notice to examine the books
and records of Trustor relating to the operation of the Mortgaged Property at
the office of Trustor.
(v) No Claims Against Beneficiary. Nothing contained in this
Deed of Trust shall constitute any consent or request by Beneficiary, express
or implied, for the performance of any labor or services or the furnishing
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of any materials or other property in respect of the Chlor Alkali Plant or any
part thereof, nor as giving Trustor any right, power or authority to contract
for or permit the performance of any labor or services or the furnishing of any
materials or other property in such fashion as would permit the making of any
claim against Beneficiary in respect thereof or any claim that any Lien based
on the performance of such labor or services or the furnishing of any such
materials or other property is prior to the Lien of this Deed of Trust.
(w) Utility Services. Trustor shall pay, or cause to be
paid, when due all charges for all public or private utility services, all
public or private rail and highway services, all public or private
communication services, all sprinkler systems, and all protective services, any
other services of whatever kind or nature at any time rendered to or in
connection with the Chlor Alkali Plant or any part thereof, shall comply in all
material respects with all contracts relating to any such services, and shall
do all other things reasonably required for the maintenance and continuance of
all such services to the extent required to fulfill the obligations set forth
in subsection IV(n).
(x) Notwithstanding any provisions herein to the contrary,
Trustor shall retain the right, at all times prior to foreclosure (or
deed-in-lieu thereof), to exercise custody and control with respect to actions
to be taken at the Mortgaged Property relating to the environmental condition
thereof, but only to the extent Trustor's exercise of such custody and control
of the Mortgaged Property is necessary for Trustor and/or its affiliates to
retain any and all benefits inuring to Trustor and/or its affiliates under the
indemnification provided by OCC in Article III of the Environmental Operating
Agreement dated as of June 17, 1997 between Trustor and OCC.
SECTION V - ASSIGNMENT OF LEASES, RENTS, ISSUES AND PROFITS
(a) Trustor absolutely, presently and irrevocably assigns,
transfers and sets over to Beneficiary and grants to Beneficiary, subject to
the terms and conditions hereof, all Trustor's estate, right, title and
interest (the "Trustor's Interest") in the Leases including, without
limitation, the following:
(i) the immediate and continuing right to receive and collect
Rents payable by all tenants or other parties pursuant to Leases;
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(ii) all claims, rights, powers, privileges and remedies of
Trustor, whether provided for in any Lease or arising by statute or at
law or in equity or otherwise, consequent on any failure on the part
of any tenant to perform or comply with any term of any Lease;
(iii) all rights to take all actions upon the happening of a
default under any Lease as shall be permitted by such Lease or by law,
including, without limitation, the commencement, conduct and
consummation of proceedings at law or in equity; and
(iv) the full power and authority, in the name of Trustor or
otherwise, to enforce, collect, receive and receipt for any and all of
the foregoing and to do any and all other acts and things whatsoever
which Trustor or any landlord is or may be entitled to do under the
Leases.
(b) Any Rents receivable by Beneficiary hereunder, after
payment of all proper costs and charges, shall be applied, in accordance with
the Intercreditor Agreement, to all amounts due and owing with respect to the
Secured Obligations. Beneficiary shall be accountable to Trustor only for
Rents actually received by Beneficiary pursuant to this assignment. The
collection of such Rents and the application thereof shall not cure or waive
any Event of Default or waive, modify or affect notice of an Event of Default
or invalidate any act done pursuant to such notice.
(c) So long as no Event of Default shall have occurred and be
continuing, Trustor shall have a license to collect and apply the Rents and to
enforce the obligations of tenants under the Leases. Immediately upon the
occurrence and during the continuance of any Event of Default, the license
granted in the immediately preceding sentence shall cease and terminate, with
or without any notice, action or proceeding. Upon such Event of Default and
during the continuance thereof, Beneficiary may (but shall not be obligated to)
to the fullest extent permitted by the Leases (i) exercise any of Trustor's
rights under the Leases, (ii) enforce the Leases, (iii) demand, collect, sue
for, attach, levy, recover, receive, compromise and adjust, and make, execute
and deliver receipts and releases for all Rents or other payments
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that may then be or may thereafter become due, owing or payable with respect to
the Leases and (iv) generally do, execute and perform any other act, deed,
matter or thing whatsoever that ought to be done, executed and performed in and
about or with respect to the Leases, as fully as allowed or authorized by the
Trustor's Interest.
(d) During the continuance of an Event of Default, Trustor
hereby irrevocably authorizes and directs the tenant under each Lease to pay
directly to, or as directed by, Beneficiary all Rents accruing or due under its
Lease. Trustor hereby authorizes the tenant under each Lease to rely upon and
comply with any notice or demand from Beneficiary for payment of Rents to
Beneficiary and Trustor shall have no claim against any tenant for Rents paid
by such tenant to Beneficiary pursuant to such notice or demand.
(e) Trustor at its sole cost and expense shall enforce all
material provisions of the Leases in accordance with their terms. Neither this
Deed of Trust nor any action or inaction on the part of Beneficiary shall
release any tenant under any Lease, any guarantor of any Lease or Trustor from
any of their respective obligations under the Leases or constitute an
assumption of any such obligation on the part of Beneficiary. No action or
failure to act on the part of Trustor shall adversely affect or limit the
rights of Beneficiary under this Deed of Trust or, through this Deed of Trust,
under the Leases.
(f) All rights, powers and privileges of Beneficiary herein
set forth are coupled with an interest and are irrevocable, subject to the
terms and conditions hereof, and Trustor shall not take any action under the
Leases or otherwise which is inconsistent with this Deed of Trust or any of the
terms hereof and any such action inconsistent herewith or therewith shall be
void. Trustor shall, from time to time, upon request of Beneficiary, execute
all instruments and further assurances and all supplemental instruments and
take all such action as Beneficiary from time to time may reasonably request in
order to perfect, preserve and protect the interests intended to be assigned to
Beneficiary hereby.
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(g) Trustor shall not, unilaterally or by agreement,
subordinate, amend, modify, extend, discharge, terminate, surrender, waive or
otherwise change any term of any of the Leases in any manner which would
violate this Deed of Trust. If the Leases shall be amended as permitted
hereby, they shall continue to be subject to the provisions hereof without the
necessity of any further act by any of the parties hereto.
(h) Nothing contained herein shall operate or be construed to
(i) obligate the Deed of Trust Trustee or Beneficiary to perform any of the
terms, covenants or conditions contained in the Leases or otherwise to impose
any obligation upon the Deed of Trust Trustee or Beneficiary with respect to
the Leases (including, without limitation, any obligation arising out of any
covenant of quiet enjoyment contained in the Leases in the event that any
tenant under a Lease shall have been joined as a party defendant in any action
by which the estate of such tenant shall be terminated) or (ii) place upon the
Deed of Trust Trustee or Beneficiary any responsibility for the operation,
control, care, management or repair of any portion of the Mortgaged Property.
(i) Beneficiary may also, at any time after an Event of
Default, apply to any court of competent jurisdiction for the appointment of a
receiver and Trustor agrees that such appointment shall be made upon a prima
facie showing of a claimed Event of Default without reference to any offsets or
defenses against such Event of Default. Such receiver shall have all the
rights and powers provided to Beneficiary pursuant to this section or otherwise
provided hereunder or by law. Said receiver may borrow monies and issue
certificates therefor. Said certificates shall be a lien on the Mortgaged
Property subordinate only to this Deed of Trust and the Leases; provided,
however, that should any of said certificates be acquired by Beneficiary the
amount thereof shall constitute additional indebtedness secured hereby. Such
receiver may lease all or any portion of the Mortgaged Property on such terms
and for such a term (which may extend beyond the terms of such receiver's
appointment and/or, if Beneficiary so consents, sale of the Mortgaged Property
hereunder) as such receiver may deem appropriate in its sole and absolute
discretion. The entering upon and taking possession of the Mortgaged Property
pursuant to
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this section and the collection of the Rents, issues and profits therefrom
shall not cure or waive any Event of Default or notice of an Event of Default
hereunder or invalidate any act of Beneficiary pursuant thereto.
SECTION VI - EVENTS OF DEFAULT
(a) Events of Default. As used in this Deed of Trust,
"Event of Default" shall mean the occurrence of an Event of Default under the
Indenture or the Term Loan Agreement or a breach or violation of the terms of
this Deed of Trust.
(b) Remedies. Upon the occurrence and during the continuance
of any Event of Default, in addition to any other rights and remedies
Beneficiary may have pursuant to this Deed of Trust or as provided by law, and
without limitation, Beneficiary may, subject to the terms of the Intercreditor
Agreement, declare all sums secured hereby immediately due and payable in full
and/or take such action, without notice or demand, as it deems advisable and is
permitted by law to protect and enforce its rights against Trustor and in and
to the Mortgaged Property, including, but not limited to, the following
actions, each of which may be pursued concurrently or otherwise, at such time
and in such manner as Beneficiary may determine, in its sole discretion,
without impairing or otherwise affecting the other rights and remedies of
Beneficiary, except to the extent otherwise provided by law:
(i) (A) Beneficiary shall have the right and option to
foreclose this Deed of Trust judicially, in the same manner as a
mortgage, or direct the Deed of Trust Trustee to sell the Mortgaged
Property pursuant to the Deed of Trust Trustee's power of sale in
accordance with the Washington Deed of Trust Act (RCW Ch. 61.24) and
the procedures set forth below. The procedure for exercise of the
Deed of Trust Trustee's power of sale shall be as follows:
Upon written request therefor by Beneficiary specifying the
nature of the default, or the nature of the several defaults, and the
amount or amounts due and owing, the Deed of Trust Trustee shall
execute a written notice of breach
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and of its election to cause the Mortgaged Property to be sold to
satisfy the obligation secured hereby, and shall cause such notice to
be recorded and otherwise given according to law.
Notice of sale having been given as then required by law and
not less than the time then required by law having elapsed after
recordation of such notice of breach, the Deed of Trust Trustee,
without demand on Trustor, shall sell the Mortgaged Property at the
time and place of sale specified in the notice, as provided by
statute, either as a whole or in separate parcels and in such order as
it may determine, at public auction to the highest and best bidder for
cash in lawful money of the United States, payable at time of sale.
Trustor agrees that such a sale (or a sheriff's sale pursuant to
judicial foreclosure) of all the Mortgaged Property as real estate
constitutes a commercially reasonable disposition thereof, but that
with respect to all or any part of the Mortgaged Property which may be
personal property the Deed of Trust Trustee shall have and exercise,
at Beneficiary's sole election, all the rights and remedies of a
secured party under the Uniform Commercial Code. Whenever notice is
permitted or required hereunder or under the Uniform Commercial Code,
ten (10) days shall be deemed reasonable. The Deed of Trust Trustee
may postpone sale of all or any portion of the Mortgaged Property, and
from time to time thereafter may postpone such sale, as provided by
statute. The Deed of Trust Trustee shall deliver to the purchaser its
deed and bill of sale conveying the Mortgaged Property so sold, but
without any covenant or warranty, express or implied. The recital in
such deed and bill of sale of any matters or facts shall be conclusive
proof of the truthfulness thereof. Any person other than the Deed of
Trust Trustee, including Trustor or Beneficiary, may purchase at such
sale.
After deducting all costs, fees and expenses of the Deed of
Trust Trustee and of this trust, including the cost of evidence of
title search and reasonable counsel fees in connection with sale, the
Deed of Trust Trustee shall apply the proceeds of sale to payment of:
all sums expended under the terms hereof not then repaid, with accrued
interest at
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the Default Rate of interest specified in the Note; all other sums
then secured hereby; and the remainder, if any, to the clerk of the
superior court of the county in which the sale took place, as provided
in RCW 61.24.080.
(B) Trustor agrees to surrender possession of the hereinabove
described Mortgaged Property to the purchaser at the aforesaid sale,
immediately after such sale, in the event such possession has not
previously been surrendered by Trustor. Upon receipt of the sale
price in the case of a third party purchase or upon the crediting of
the applicable portion of the Secured Obligations to the sales price
if the purchaser is Beneficiary, the Deed of Trust Trustee is hereby
authorized, empowered and directed to make due conveyance to the
purchaser or purchasers, with general warranty binding upon Trustor
and the heirs, successors and assigns of Trustor. The right of sale
hereunder shall not be exhausted by one or more such sales, and the
Deed of Trust Trustee may make other and successive sales until all of
the Mortgaged Property be legally sold or all of the Secured
Obligations shall have been paid. Trustor hereby irrevocably appoints
the Deed of Trust Trustee to be the attorney of Trustor and in the
name and on behalf of Trustor to execute and deliver any deeds,
transfers, conveyances, assignments, assurances and notices which
Trustor ought to execute and deliver and do and perform any and all
such acts and things which Trustor ought to do and perform under the
covenants herein contained and generally, to use the name of Trustor
in the exercise of all or any of the powers hereby conferred on the
Deed
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of Trust Trustee. Recitals contained in any conveyance made by the
Deed of Trust Trustee to any purchaser at any sale made pursuant hereto
shall conclusively establish the truth and accuracy of the matters
therein treated, including, without limiting the generality of the
foregoing, nonpayment of the unpaid principal sum of, or the interest
accrued on, any of the Secured Obligations after the same has become
due and payable, advertisement and conduct of such sale in the manner
provided herein and appointment of any successor trustee hereunder.
The Deed of Trust Trustee or its successor or substitute may appoint
or delegate any one or more persons as agent to perform any act or
acts necessary or incident to any sale held by the Deed of Trust
Trustee, including the posting of notices and the conduct of sale, but
in the name and on behalf of the Deed of Trust Trustee, his successor
or substitute. If the Deed of Trust Trustee or his successor or
substitute shall have given notice of sale hereunder, any successor or
substitute Deed of Trust Trustee thereafter appointed may complete the
sale and the conveyance of the property pursuant thereto as if such
notice had been given by the successor or substitute Deed of Trust
Trustee conducting the sale.
(ii) (A) Upon the occurrence and during the continuance
of any Event of Default, the Deed of Trust Trustee or Beneficiary
shall have the right and power to proceed by a suit or suits in equity
or at law, whether for the specific performance of any covenant or
agreement herein contained or in aid of the execution of any power
herein granted, or for any foreclosure hereunder or for the sale of
the Mortgaged Property under the judgment or decree of any court or
courts of competent jurisdiction, or for the appointment of a receiver
pending any foreclosure hereunder or the sale of the Mortgaged
Property under the order of a court or courts of competent
jurisdiction or under executory or other legal process, or for the
enforcement of any other appropriate legal or equitable remedy. Any
money advanced by the Deed of Trust Trustee and/or Beneficiary in
connection with any such receivership shall be a demand obligation
(which obligation Trustor hereby expressly promises to pay) owing by
Trustor to the Deed of Trust Trustee and/or Beneficiary and shall bear
interest from the date of making such advance by the Deed of Trust
Trustee and/or Beneficiary until paid at the Note Rate.
(B) Trustor agrees to the full extent that it lawfully may,
that, in case one or more of the Events of Default shall have occurred
and shall not have been remedied, then, and in every such case, the
Deed of Trust Trustee or Beneficiary shall have the right and power to
enter into and upon and take possession of all or any part of the
Mortgaged Property in the possession of Trustor, its successors or
assigns, or its or their agents or servants, and may exclude Trustor,
its successors or assigns, and all persons claiming under Trustor, and
its or their agents or servants wholly or
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partly therefrom; and, holding the same, the Deed of Trust Trustee may
use, administer, manage, operate and control the Mortgaged Property
and conduct the business thereof to the same extent as Trustor, its
successors or assigns, might at the time do and may exercise all
rights and powers of Trustor, in the name, place and stead of Trustor,
or otherwise as the Deed of Trust Trustee shall deem best. All costs,
expenses and liabilities of every character incurred by the Deed of
Trust Trustee and/or Beneficiary in administering, managing,
operating, and controlling the Mortgaged Property shall constitute a
demand obligation (which obligation Trustor hereby expressly promises
to pay) owing by Trustor to the Deed of Trust Trustee and/or
Beneficiary and shall bear interest from date of expenditure until
paid at the Note Rate, all of which shall constitute a portion of the
Secured Obligations and shall be secured by this Deed of Trust and by
any other instrument securing the Secured Obligations. In connection
with any action taken by the Deed of Trust Trustee and/or Beneficiary
pursuant to this subsection (ii), the Deed of Trust Trustee and/or
Beneficiary shall not be liable for any loss sustained by Trustor
resulting from any act or omission of the Deed of Trust Trustee and/or
Beneficiary in administering, managing, operating or controlling the
Mortgaged Property, including a loss arising from the ordinary
negligence of the Deed of Trust Trustee and/or Beneficiary, unless
such loss is caused by its own gross negligence or willful misconduct
and bad faith, nor shall the Deed of Trust Trustee and/or Beneficiary
be obligated to perform or discharge any obligation, duty or liability
of Trustor.
(C) Trustor shall and does hereby agree to indemnify the Deed
of Trust Trustee and/or Beneficiary for, and to hold the Deed of Trust
Trustee and/or Beneficiary harmless from, any and all liability, loss
or damage which may or might be incurred by the Deed of Trust Trustee
and/or
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Beneficiary by reason of this Deed of Trust or the exercise of rights
or remedies hereunder, including a loss arising from the ordinary
negligence of the Deed of Trust Trustee and/or Beneficiary, except as
such liability, loss or damage is occasioned by the gross negligence
or willful misconduct of such party; should the Deed of Trust Trustee
and/or Beneficiary make any expenditure on account of any such
liability, loss or damage, the amount thereof, including costs,
expenses and reasonable attorneys' fees, shall be a demand obligation
(which obligation Trustor hereby expressly promises to pay) owing by
Trustor to the Deed of Trust Trustee and/or Beneficiary and shall bear
interest from the date expended until paid at the Note Rate, shall be
a part of the Secured Obligations and shall be secured by this Deed of
Trust and any other instrument securing the Secured Obligations.
(D) Trustor hereby assents to, ratifies and confirms any and
all actions of the Deed of Trust Trustee and/or Beneficiary with
respect to the Mortgaged Property taken under this paragraph (ii).
(iii) Every right, power and remedy herein given to the Deed
of Trust Trustee and Beneficiary shall be cumulative and in addition
to every other right, power and remedy herein specifically given or
now or hereafter existing in equity, at law or by statute; and each
and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time and so often and
in such order as may be deemed expedient by the Deed of Trust Trustee
and Beneficiary, and the exercise, or the beginning of the exercise,
of any such right, power or remedy shall not be deemed a waiver of the
right to exercise, at the same time or thereafter any other right,
power or remedy. No delay or omission by the Deed of Trust Trustee or
Beneficiary in the exercise of any right, power or remedy shall impair
any such right, power or remedy or operate as a waiver thereof or of
any other right, power or remedy then or thereafter existing.
(iv) To the extent permitted under applicable law,
Beneficiary shall have the right (but shall not be obligated to) to
become the purchaser at any sale held by the Deed of Trust Trustee or
by any receiver or public officer, whether by power of sale, judicial
procedure or otherwise, and shall have the right (but shall not be
obligated to) to have all or any part of the Secured Obligations then
owing credited
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against the amount of the bid made by Beneficiary at such sale.
(v) Upon any sale, whether under the power of sale hereby
given or by virtue of judicial proceedings, it shall not be necessary
for the Deed of Trust Trustee or any public officer acting under
execution or order of court to have physically present or
constructively in his or her possession any of the Mortgaged Property,
and Trustor hereby agrees to deliver all of such personal property to
the purchasers at such sale on the date of sale, and if it should be
impossible or impracticable to make actual delivery of such property,
then the title and right of possession to such property shall pass to
the purchaser at such sale as completely as if such property had been
actually present and delivered.
(vi) Upon any sale, whether made under the power of sale
hereby given or by virtue of judicial proceedings, the receipt of the
Deed of Trust Trustee, or of the officer making a sale under judicial
proceedings, shall be a sufficient discharge to the purchaser or
purchasers at any sale for his or her or their purchase money, and
such purchaser or purchasers, his or her or their assigns or personal
representatives, shall not, after paying such purchase money and
receiving such receipt of the Deed of Trust Trustee or of such officer
therefor, be obliged to see to the application of such purchase money,
or be in anywise answerable for any loss, misapplication or
nonapplication thereof.
(vii) (A) Any sale or sales of the Mortgaged Property or any
part thereof, whether under the power of sale herein granted and
conferred or under and by virtue of judicial proceedings, shall
operate to divest all right, title, interest, claim and demand
whatsoever, either at law or in equity, of Trustor of, in and to the
premises and the property sold, and shall be a perpetual bar, both at
law and in equity, against Trustor, its successors and assigns, and
against any and all persons claiming or who shall thereafter claim all
or any of the property sold from, through or under Trustor, its
successors and assigns; and Trustor, if
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requested by the Deed of Trust Trustee or Beneficiary to do so, shall
join in the execution and delivery of all proper conveyances,
assignments and transfers of the properties so sold.
(B) The proceeds of any sale of the Mortgaged Property or any
part thereof and all other moneys received by the Deed of Trust
Trustee in any proceedings for the enforcement hereof, whose
application has not elsewhere herein been specifically provided for,
shall be applied first, to the payment of all expenses incurred by the
Deed of Trust Trustee or Beneficiary incident to the enforcement of
this Deed of Trust or any of the Secured Obligations (including,
without limiting the generality of the foregoing, expenses of any
entry or taking of possession, of any sale, of advertisement thereof,
and of conveyances, and court costs, compensation of agents and
employees and reasonable legal fees), and to the payment of all other
charges, expenses, liabilities and advances incurred or made by the
Deed of Trust Trustee or Beneficiary under this Deed of Trust or in
executing any trust or power hereunder; and then to the payment of the
Secured Obligations in such order and manner as is determined by
Beneficiary in its sole discretion, subject to the terms of the
Intercreditor Agreement.
(C) Beneficiary may resort to any security given by this Deed
of Trust or to any other security now existing or hereafter given to
secure the payment of any of the Secured Obligations secured hereby,
in whole or in part, and in such portions and in such order as may
seem best to Beneficiary in its sole discretion, subject to the terms
of the Intercreditor Agreement, and any such action shall not in
anywise be considered as a waiver of any of the rights, benefits or
liens created by this Deed of Trust.
(D) Trustor agrees, to the full extent that it may lawfully
so agree, that it will not at any time insist upon or plead or in any
manner whatever claim or take the benefit or advantage of any
appraisement, valuation, stay, extension or redemption law now or
hereafter in force, in order to prevent or hinder the enforcement or
foreclosure of this Deed of Trust or the absolute sale of the
Mortgaged Property
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or the possession thereof by any purchaser at any sale made pursuant
to any provision hereof, or pursuant to the decree of any court of
competent jurisdiction; but Trustor, for itself and all who may claim
through or under it, so far as it or they now or hereafter lawfully
may, hereby waives the benefit of all such laws. Trustor, for itself
and all who may claim through or under it, waives to the extent that
it may lawfully do so, any and all right to have the property included
in the Mortgaged Property marshaled upon any foreclosure of the lien
hereof, and agrees that any court having jurisdiction to foreclose
such lien may sell the Mortgaged Property as an entirety. If any law
referred to herein and now in force, of which Trustor or its successor
or successors might take advantage despite the provisions hereof,
shall hereafter be repealed or cease to be in force, such law shall
not thereafter be deemed to constitute any part of the contract herein
contained or to preclude the operation or application of the
provisions hereof.
(E) If the proceeds of any sale or other lawful disposition
of the Mortgaged Property by the Deed of Trust Trustee and/or
Beneficiary are insufficient to pay the Secured Obligations, then
Trustor shall pay or cause to be paid any deficiency.
(viii) Without in any manner limiting the generality of any
of the other provisions of this Deed of Trust; (A) some portions of
the goods described or to which reference is made herein are or are to
become fixtures on the land described or to which reference is made
herein; (B) the security interests created hereby under the Uniform
Commercial Code will attach to minerals including oil and gas; (C)
this instrument is to be filed of record in the real estate records as
a financing statement; and (D) Trustor is the record owner of the real
estate or interests in the real estate comprised of the Mortgaged
Property.
(ix) The Mortgaged Property may be sold in one or more
parcels and in such manner and order as Beneficiary, in its sole
discretion, may determine.
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Beneficiary's exercise of the foregoing remedies will not be
construed to constitute Beneficiary as a mortgagee in possession of the
Mortgaged Property nor to obligate Beneficiary to take any action or to incur
expenses or perform or discharge any obligation, duty or liability of Trustor
under any lease, or for the control, care, management, or repair of the
Mortgaged Property; nor will it operate to make Beneficiary responsible or
liable for any waste committed on the Mortgaged Property by any Person or for
any dangerous or defective condition of the Mortgaged Property, or for any act
or omission relating to the management, upkeep, repair, or control of the
Mortgaged Property that results in loss or injury or death to any Person.
SECTION VII - THE DEED OF TRUST TRUSTEE
(a) It shall be no part of the duty of the Deed of Trust
Trustee to see to any recording, filing or registration of this Deed of Trust
or any other instrument in addition or supplemental thereto, or to give any
notice thereof, or to see to the payment of or be under any duty in respect of
any tax or assessment or other governmental charge which may be levied or
assessed on the Mortgaged Property, or any part thereof, or against Trustor, or
to see to the performance or observance by Trustor of any of the covenants and
agreements contained herein. The Deed of Trust Trustee shall not be
responsible for the execution, acknowledgment or validity of this Deed of Trust
or of any instrument in addition or supplemental hereto or for the sufficiency
of the security purported to be created hereby, and makes no representation in
respect thereof or in respect of the rights of Beneficiary. The Deed of Trust
Trustee shall have the right to consult with counsel upon any matters arising
hereunder and shall be fully protected in relying as to legal matters on the
advice of counsel. The Deed of Trust Trustee shall not incur any personal
liability hereunder except for the Deed of Trust Trustee's own gross negligence
or willful misconduct; and the Deed of Trust Trustee shall have the right to
rely on any instrument, document or signature authorizing or supporting any
action taken or proposed to be taken by the Deed of Trust Trustee hereunder,
believed by the Deed of Trust Trustee in good faith to be genuine.
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(b) The Deed of Trust Trustee may resign by written notice
addressed to Beneficiary (but such resignation shall not be effective until and
unless a successor trustee is appointed by Beneficiary and such successor
trustee accepts the appointment) or be removed at any time with or without
cause by an instrument in writing duly executed on behalf of Beneficiary.
Beneficiary may, at any time, by instrument in writing, appoint a successor or
successors to the Deed of Trust Trustee named herein or acting hereunder, which
instrument, executed and acknowledged by Beneficiary, and recorded in the
appropriate office in the State, shall be conclusive proof of the proper
substitution of such successor trustee, who shall have all the estate, powers,
duties and trusts in the premises vested in or conferred on the original
trustee.
SECTION VIII - CERTAIN DEFINITIONS
As used herein, the following terms shall have the following
meanings:
"Additional Undertaking" shall mean (a) cash or cash
equivalents or (b) a Surety Bond, an Additional Undertaking Guarantee or an
Additional Undertaking Letter of Credit which is (i) provided by a Person, (ii)
whose long- term unsecured debt is rated at least "AA" (or equivalent) by a
nationally recognized statistical rating agency and (iii) is otherwise
satisfactory to Beneficiary. Additional Undertakings shall be addressed
directly to Beneficiary and shall name Beneficiary as the beneficiary thereof
and the party entitled to make claims thereunder.
"Additional Undertaking Guarantee" shall mean the
unconditional guarantee of payment of any corporation or partnership organized
and existing under the laws of the United States of America or any State or the
District of Columbia or Canada or province thereof that has a long-term
unsecured debt rating satisfactory to Beneficiary at the time such guarantee is
delivered, given to Beneficiary, accompanied by an opinion of counsel to such
guarantor to the effect that such guarantee has been duly authorized, executed
and delivered by such guarantor and constitutes the legal, valid and binding
obligation of such guarantor enforceable against such guarantor by Beneficiary
in
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accordance with its terms, subject to customary exceptions at the time for
opinions for such instruments, together with an opinion of counsel to the
effect that, taking into account the purpose under this Deed of Trust for which
such guarantee will be given, such guarantee and accompanying opinion are
responsive to the requirements of this Deed of Trust.
"Additional Undertaking Letter of Credit" shall mean a clean,
irrevocable, unconditional letter of credit in favor of Beneficiary and
entitling Beneficiary to draw thereon in The City of New York issued by a bank
satisfactory to Beneficiary, accompanied by an opinion of counsel to such bank
to the effect that such letter of credit has been duly authorized, executed and
delivered by such bank and constitutes the legal, valid and binding obligation
of such bank enforceable against such bank by Beneficiary in accordance with
its terms subject to customary exceptions at the time for opinions for such
instruments, together with an opinion of counsel to the effect that, taking
into account the purpose under this Deed of Trust for which such letter of
credit will be given, such letter of credit and accompanying opinion are
responsive to the requirements of this Deed of Trust.
"Collateral Account" shall have the meaning set forth in the
Intercreditor Agreement.
"Environmental Laws" shall mean any and all Governmental
Requirements pertaining to occupational health or the environment in effect in
the State, including without limitation, the Oil Pollution Act of 1990 ("OPA"),
the Clean Air Act, as amended, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the Federal
Water Pollution Control Act, as amended, the Occupational Safety and Health Act
of 1970, as amended, the Resource Conservation and Recovery Act of 1976
("RCRA"), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and
Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation
Act, as amended, and other environmental conservation or protection laws. The
term "oil" shall have the meaning specified in OPA, the terms "hazardous
substance" and "release" (or "threatened release") have the meanings specified
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in CERCLA, and the terms "solid waste" and "disposal" (or "disposed") have the
meanings specified in RCRA; provided, however, that (i) in the event either
OPA, CERCLA or RCRA is amended so as to broaden the meaning of any term defined
thereby, such broader meaning shall apply subsequent to the effective date of
such amendment and (ii) to the extent the laws of the State establish a meaning
for "oil", "hazardous substance", "release", solid waste" or "disposal" which
is broader than that specified in either OPA, CERCLA or RCRA, such broader
meaning shall apply with respect to the Mortgaged Property.
"Excepted Liens" shall mean (a) Liens for taxes, assessments
or other governmental charges or levies not yet due or which are being
contested in good faith by appropriate action and for which appropriate
reserves have been maintained; (b) operators', vendors', carriers',
warehousemen's, repairmen's, mechanics', workmen's, materialmen's, construction
or other like Liens arising by operation of law in the ordinary course of
business or statutory landlord's liens; (c) any Liens reserved in leases for
rent and for compliance with the terms of the leases in the case of leasehold
estates, to the extent that any such Lien referred to in this clause does not
materially impair the use of the Mortgaged Property covered by such Lien for
the purposes for which such Mortgaged Property is held by Trustor or materially
impair the value of such Mortgaged Property subject thereto; (d) the Liens
listed on Schedule 1 attached hereto and made a part hereof; and (e) Liens and
encumbrances (other than to secure the payment of borrowed money or the
deferred purchase price of Mortgaged Property or services), easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations in any rights of way for the purpose of roads, pipelines,
transmission lines, transportation lines, distribution lines for the removal of
gas, oil, coal or other minerals or timber, and other like purposes, or for the
joint or common use of real estate, rights of way, facilities and equipment,
and defects, irregularities, zoning restrictions and deficiencies in title to
the Mortgaged Property of which in the aggregate do not prevent the use of the
Mortgaged Property for the purposes of which it is currently held by Trustor or
have a Material Adverse Effect on the Companies taken as a whole.
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"Governmental Authority" shall include the country, the state,
county, city and political subdivisions in which any Person or such Person's
Property is located or which exercises valid jurisdiction over any such Person
or such Person's Property, and any court, agency, department, commission,
board, bureau or instrumentality of any of them including monetary authorities
which exercises valid jurisdiction over any such Person or such Person's
Property. Unless otherwise specified, all references to Governmental Authority
herein shall mean a Governmental Authority having jurisdiction over, where
applicable, Trustor or any Secured Party.
"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or other
directive or requirement, including, without limitation, Environmental Laws,
energy regulations and occupational safety and health standards or controls, of
any Governmental Authority.
"Hazardous Materials" shall mean any pollutants, contaminants,
or industrial, toxic or hazardous substances or wastes.
"Lien" shall mean any interest in Mortgaged Property owed to,
or a claim by a Person, whether such interest is based on the common law,
statute or contract, and whether such obligation or claim is fixed or
contingent, and including but not limited to the lien or security interest
arising from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt or a lease, consignment or bailment for security
purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting the Mortgaged
Property.
"Material Adverse Effect" shall mean, as to any Person, asset
or Property, a material adverse effect on the business, assets, properties,
condition (financial or other), operations or results of operations of such
Person, asset or Property, which effect is not adequately and effectively
insured or indemnified against by a financially sound insurance company, and
excepting
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effects arising solely out of general national economic conditions and/or
effects arising solely out of matters affecting the industry in which such
Person, asset or Property conducts business a whole.
"Note Rate" shall mean the rate borne by the Notes.
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, trust, unincorporated
organization or government or any agency, instrumentality or political
subdivision thereof, or any other form of entity.
"Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Revolving Credit Agreement" shall mean that certain Loan and
Security Agreement dated as of June 17, 1997 among PAAC, as borrower, Bank of
America Illinois, as agent and a lender, and the lenders named therein, as in
effect on the date hereof.
"State" shall mean the state where the Land is located.
"Surety Bond" shall mean a clean irrevocable surety bond or
credit insurance policy in favor of Beneficiary issued by an insurance company
the claims paying ability rating of which at the time such surety bond or
credit insurance policy is delivered is satisfactory to Beneficiary,
accompanied by an opinion of counsel to such insurance company to the effect
that such surety bond or credit insurance policy has been duly authorized,
executed and delivered by such insurance company and constitutes the legal,
valid and binding obligation of such insurance company enforceable against such
insurance company by Beneficiary in accordance with its terms subject to
customary exceptions at the time for opinions for such instruments, together
with an opinion of counsel to the effect that, taking into account the purpose
under this Deed of Trust for which such surety bond will be given, such surety
bond and accompanying opinions are responsive to the requirements of this Deed
of Trust.
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"Trust Money" shall mean those certain proceeds set forth in
subsections IV(q)(i) and IV(q)(ii).
SECTION IX - MISCELLANEOUS
(a) Choice of Law. The terms and provisions of this Deed of
Trust and the enforcement hereof shall be governed by and construed in
accordance with the laws of the state where the Land is located.
(b) Severability. If any provision hereof is invalid or
unenforceable in any jurisdiction, the other provisions hereof shall remain in
full force and effect in such jurisdiction and the remaining provisions hereof
shall be liberally construed in favor of the Deed of Trust Trustee and
Beneficiary in order to effectuate the provisions hereof, and the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of any such provision in any other jurisdiction.
If any part of the Secured Obligations cannot be lawfully secured by this Deed
of Trust or if any part of the Mortgaged Property cannot be lawfully subject to
the Lien and security interest hereof to the full extent of such Secured
Obligations, then all payments made shall be applied on said Secured
Obligations first in discharge of that portion thereof which is not secured by
this Deed of Trust.
(c) Construction of this Instrument. This instrument may be
construed as a mortgage, deed of trust, chattel mortgage, conveyance,
assignment, security agreement, fixture filing, pledge, financing statement,
hypothecation or contract, or any one or more of them, in order fully to
effectuate the Lien hereof and the purposes and agreements herein set forth.
(d) Captions; Gender and Number. The captions and section
headings of this Deed of Trust are for convenience only and are not to be used
to define the provisions hereof. The term "Beneficiary" as used herein shall
mean and include any successor(s) to United States Trust Company of New York in
its capacity as Collateral Agent under the Intercreditor Agreement. The terms
used to designate the Deed of Trust Trustee, Beneficiary and Trustor shall be
deemed to include the respective
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heirs, legal representatives, successors and assigns of such parties. All
terms contained herein shall be construed, whenever the context of this Deed of
Trust so requires, so that the singular includes the plural and so that the
masculine includes the feminine.
(e) Rights of Beneficiary. The Lien, security interest
and other security rights of Beneficiary hereunder shall not be impaired by any
indulgence, moratorium or release granted by Beneficiary, the Note Trustee or
the Term Loan Agent, including, but not limited to, any renewal, extension or
modification with respect to any Secured Obligation, or any surrender,
compromise, release, renewal, extension, exchange or substitution which
Beneficiary may grant in respect of the Mortgaged Property, or any part thereof
or any interest therein, or any release or indulgence granted to any endorser,
guarantor or surety of any Secured Obligation.
(f) Waiver of an Event of Default. Beneficiary may waive
any Event of Default without waiving any other prior or subsequent Event of
Default. Beneficiary may remedy any Event of Default without waiving the Event
of Default remedied. No single or partial exercise by Beneficiary of any
right, power or remedy hereunder shall exhaust the same or shall preclude any
other or further exercise thereof, and every such right, power or remedy
hereunder may be exercised at any time and from time to time. No modification
or waiver of any provision hereof nor consent to any departure by Trustor
therefrom shall in any event be effective unless the same shall be in writing
and signed by Beneficiary and then such waiver or consent shall be effective
only in the specific instances, for the purpose for which given and to the
extent therein specified. No notice to nor demand on Trustor in any case shall
of itself entitle Trustor to any other or further notice of demand in similar
or other circumstances. Acceptance by Beneficiary of any payment in an amount
less than the amount then due on any Secured Obligations shall be deemed an
acceptance on account only and shall not in any way excuse the existence of an
Event of Default hereunder.
(g) Successor Trustor. In the event the ownership of the
Mortgaged Property or any part thereof becomes vested in a person other than
Trustor, Beneficiary may, without notice to
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Trustor, deal with such successor or successors in interest with reference to
this Deed of Trust and the Secured Obligations in the same manner as with
Trustor, without in any way vitiating or discharging Trustor's liability
hereunder or for the payment of the Secured Obligations or performance of the
obligations secured hereby. No transfer of the Mortgaged Property, no
forbearance on the part of Beneficiary and/or any Secured Party, and no
extension of the time for the payment of the Secured Obligations, in whole or
in part, shall affect the liability of Trustor or any other person hereunder or
for obligations secured hereby.
(h) Outstanding Lien, Security Interest, Charge or Prior
Encumbrance. To the extent that proceeds of the Notes or proceeds of advances
under the Term Loan Agreement are used to pay indebtedness secured by any
outstanding Lien, security interest, charge or prior encumbrance against the
Mortgaged Property, such proceeds have been advanced at Trustor's request, and
Beneficiary shall be subrogated to any and all rights, security interests and
Liens owned by any owner or holder of such outstanding Liens, security
interests, charges or encumbrances, irrespective of whether said Liens,
security interests, charges or encumbrances are released, and it is expressly
understood that, in consideration of the payment of such indebtedness, Trustor
hereby waives and releases all demands and causes of action for offsets and
payments to, upon and in connection with the said indebtedness.
(i) Covenants Running with the Land. The covenants and
agreements herein contained shall constitute covenants running with the land
and interests covered or affected hereby and shall be binding upon the heirs,
legal representatives, successors and assigns of the parties hereto.
(j) Notices. All notices requests, demands and other
communications provided for or permitted hereunder shall be in writing
(including telex and telecopy communications) and shall be sent by mail, telex,
telecopier or hand delivery:
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If to Trustor, to the following address:
4200 NationsBank Center
700 Louisiana Street
Suite 4200
Houston, Texas 77002
Attention: Vice President, General Counsel
and Secretary
If to Beneficiary, to the following address:
United States Trust Company of New York
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
If to the Deed of Trust Trustee, to the following address:
Transnation Title Insurance Company
6111 100th Street S.W.
Lakewood, Washington 98499
All such notices, requests, demands and communications shall be deemed to have
been duly given or made, when delivered by hand or five (5) business days after
being deposited in the mail, postage paid, when telexed answer back received
and when telecopied, receipt acknowledged. Any party hereto may change its
address set forth in this subsection (j) by notice to the other parties given
in accordance with the provisions of this subsection (j).
(k) Beneficiary's Consent. Except where otherwise
expressly provided herein, in any instance hereunder where the approval,
consent or the exercise of judgment of Beneficiary is required, the granting or
denial of such approval or consent and the exercise of such judgment shall be
within the sole discretion of Beneficiary, and Beneficiary shall not, for any
reason or to any extent, be required to grant such approval or consent or
exercise such judgment in any particular manner, regardless of the
reasonableness of either the request or Beneficiary's judgment.
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(l) Foreclosure. In the event there is a foreclosure
sale hereunder, and at the time of such sale Trustor or Trustor's successors or
assigns or any other person claiming any interest in the Mortgaged Property by,
through or under Trustor, are occupying or using the Mortgaged Property or any
part thereof, each and all shall immediately become the tenant of the purchaser
at such sale, which tenancy shall be a tenancy from day to day, terminable at
the will of either the landlord or tenant, or at a reasonable rental per day
based upon the value of the property occupied, such rental to be due daily to
the purchaser; to the extent permitted by applicable law, the purchaser at such
sale shall, notwithstanding any language herein apparently to the contrary,
have the sole option to demand immediate possession following the sale or to
permit the occupants to remain as tenants at will. In the event the tenant
fails to surrender possession of said property upon demand, the purchaser shall
be entitled to institute and maintain a summary action for possession of the
Mortgaged Property (such as an action for forcible entry and detainer) in any
court having jurisdiction. The purchaser or purchasers at foreclosure shall
have the right to affirm or disaffirm any lease of the Mortgaged Property or
any part thereof.
(m) Reimbursement. Trustor shall reimburse the Deed of
Trust Trustee and Beneficiary, upon demand, for all fees, costs and expenses
incurred by the Deed of Trust Trustee and Beneficiary in connection with the
administration and enforcement of this Deed of Trust. If any action or
proceedings, including, without limitation, bankruptcy or insolvency
proceedings, is commenced to which action or proceeding the Deed of Trust
Trustee or Beneficiary is made a party or in which it becomes necessary to
defend or uphold the Lien or validity of this Deed of Trust, Trustor shall,
upon demand, reimburse the Deed of Trust Trustee and Beneficiary for all
expenses (including, without limitation, attorneys' and agents' fees and
disbursement) incurred by the Deed of Trust Trustee or Beneficiary in such
action or proceedings. In any action or proceeding to foreclose this Deed of
Trust or to recover or collect the Secured Obligations, the provisions of law
relating to the recovery of costs, disbursements and allowances shall prevail
unaffected by this covenant. Trustor's obligations under this subsection IX(m)
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shall survive the satisfaction of this Deed of Trust and the discharge of
Trustor's other obligations hereunder.
(n) Waiver of Stay. (i) Trustor agrees that in the
event that Trustor or any property or assets of Trustor shall hereafter become
subject of a voluntary or involuntary proceeding under the Bankruptcy Code or
Trustor shall otherwise be a party to any federal or state bankruptcy,
insolvency, moratorium or similar proceeding to which the provisions relating
to the automatic stay under Section 362 of the Bankruptcy Code or any similar
provision in any such law is applicable, then, in any such case, whether or not
Beneficiary has commenced foreclosure proceedings under this Deed of Trust,
Beneficiary shall be entitled to relief from any such automatic stay as it
relates to the exercise of any of the rights and remedies (including, without
limitation, any foreclosure proceedings) available to Beneficiary as provided
in this Deed of Trust or in any other document evidencing or securing the
Secured Obligations.
(ii) Beneficiary shall have the right to petition or move
any court having jurisdiction over any proceeding described in subsection
IX(n)(i) for the purposes provided therein, and Trustor agrees (a) not to
oppose any such petition or motion and (b) at Trustor's sole cost and expense,
to assist and cooperate with Beneficiary, as may be requested by Beneficiary
from time to time, in obtaining any relief requested by Beneficiary, including,
without limitation, by filing any such petitions, supplemental petitions,
requests for relief, documents, instruments or other items from time to time
requested by Beneficiary or any such court.
(o) Waiver of Jury Trial. To the extent permitted by
law, Trustor hereby knowingly, voluntarily and intentionally waives any rights
it may have to a trial by jury in the respect of any litigation based hereon,
or directly or indirectly arising out of, under or in connection with, this
Deed of Trust or any course of conduct, course of dealing, statements (whether
verbal or written) or actions of Trustor, the Deed of Trust Trustee or
Beneficiary.
(p) Counterparts. This instrument may be executed in
several counterparts, all of which are identical. Each of such
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counterparts shall for all purposes be deemed to be an original and all such
counterparts shall together constitute but one and the same instrument.
(q) Provisions of the Intercreditor Agreement.
Notwithstanding anything to the contrary contained in this Deed of Trust, it is
the understanding of the parties hereto that any actions by the Deed of Trust
Trustee and/or Beneficiary are subject to the provisions of the Intercreditor
Agreement.
[Signature page follows]
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IN WITNESS WHEREOF, this Deed of Trust has been duly executed
by Trustor as of the date first written above.
PLEASE BE ADVISED THAT ORAL AGREEMENTS OR ORAL COMMITMENTS TO
LOAN MONEY, EXTEND CREDIT OR FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE
UNENFORCEABLE UNDER WASHINGTON LAW.
Trustor:
PIONEER CHLOR ALKALI COMPANY, INC.
By: /s/ Kent R. Stephenson
Name: Kent R. Stephenson
Title: Vice President
The name and address of Trustor is:
PIONEER CHLOR ALKALI COMPANY, INC.
700 Louisiana Street, Suite 4200
Houston, Texas 77002
The name and address of Beneficiary is:
UNITED STATES TRUST COMPANY OF NEW YORK
114 West 47th Street
New York, New York 10036
Attention: Corporate Trust Department
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STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
I certify that I know or have satisfactory evidence that
Kent Stephenson is the person who appeared before me, and said person
acknowledged that said person signed this instrument, on oath stated that said
person was authorized to execute the instrument and acknowledged it as the
Vice President of Pioneer Chlor Alkali Company, Inc., a corporation, to be
the free and voluntary act of such corporation for the uses and purposes
mentioned in the instrument.
Dated this 17th day of June, 1997.
/s/ Christopher Tung
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Notary Public in and for
the state of New York,
residing at
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My appointment expires 9/29/98
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