EXHIBIT 4.37
Recording Requested By and When
Recorded Return to:
Attention:
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LEATHERS, L.P.
(as Trustor)
to
CHICAGO TITLE COMPANY,
(as Trustee)
for the use and benefit of
CHEMICAL TRUST COMPANY OF CALIFORNIA,
for and on behalf
of Salton Sea Funding Corporation
and the Secured Parties
(as Beneficiary)
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DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
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Dated: As of June 20, 1996
Location: County of Imperial
State of California
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DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING (the "Deed of Trust") is made as of June 20, 1996, by
LEATHERS, L.P., a California limited partnership ("Leathers"), whose address
is 302 South 36th Street, Suite 400-C, Omaha, Nebraska 68131, as trustor
("Trustor"), to CHICAGO TITLE COMPANY, whose address is 925 B Street, San
Diego, California 92101, as trustee ("Trustee"), and in favor of CHEMICAL
TRUST COMPANY OF CALIFORNIA, a California corporation, whose address is 50
California Street, 10th Floor, San Francisco, California 94111, as beneficiary
("Beneficiary") acting in its capacity as collateral agent for and on behalf
of Salton Sea Funding Corporation, a Delaware corporation ("Funding
Corporation") and the Secured Parties (the "Secured Parties") under that
certain Collateral Agency and Intercreditor Agreement by and among
Beneficiary, Funding Corporation and the Guarantors and Secured Parties
thereto (the "Intercreditor Agreement") and that certain Trust Indenture dated
as of July 21, 1995, as the same may be amended, modified or supplemented,
including pursuant to that certain Supplemental Trust Indenture, dated as of
even date herewith, by and between Funding Corporation and Beneficiary, as
trustee (as so amended, modified or supplemented, the "Indenture"). This Deed
of Trust is entered into pursuant to that certain Amended and Restated Credit
Agreement (Partnership Guarantors) dated as of even date herewith by and
between Trustor and Funding Corporation (the "Partnership Credit Agreement"),
the Indenture and the other Financing Documents. Unless otherwise defined
herein, capitalized terms shall have the meanings set forth in Exhibit A to
the Indenture, which Exhibit A is hereby incorporated by this reference.
NOW, THEREFORE, in consideration of, and to secure the
payment and performance of the Debt (as hereinafter defined) which Debt may
increase, decrease and increase again from time to time, Trustor has given,
granted, bargained, sold, alienated, conveyed, confirmed and assigned, and by
these presents does give, grant, bargain, sell, alienate, convey, confirm and
assign unto Trustee, its successors and assigns, with general warranties of
title, in trust with power of sale and right of entry and possession forever,
for the benefit and security of Beneficiary as collateral agent for Funding
Corporation and the Secured Parties, all right title and interest of Trustor
in and to, the following property, rights and interests, whether now owned or
hereafter acquired (such property, rights and interests being hereinbefore and
hereinafter collectively referred to as the "Trust Property") :
(a) all of Trustor's right, title and interest in
that certain real property in the County of Imperial, State of
California, described in Exhibit A attached hereto and by this
reference incorporated herein (the "Resource Easement Area
Premises"), pursuant to that certain Easement Grant Deed and
Agreement Regarding Rights for Geothermal Development dated as of
August 15, 1988 between Magma Power Company, a Nevada corporation, as
grantor ("Magma"), and Trustor, as grantee, as amended by that
certain First Amendment to Easement Grant Deed and Agreement
Regarding Rights for Geothermal Development dated as of October 26,
1988 (a Short Form of which was recorded on October 26, 1988 in Book
1613, Page 324 of the Official Records of
Imperial County, California (the "Official Records")), as amended by
that certain Clarification and Amendment dated as of June 17, 1996
between Magma and Trustor (the "Clarification and Amendment"), which
is being recorded in the Official Records concurrently herewith
(collectively, and as the same may from time to time be further
amended and be in effect in accordance with the other Financing
Documents, the "Easement Grant Deed"), together with all renewals,
extensions, supplements, amendments, cancellations or terminations
thereof and all credits, deposits, options, privileges and rights
thereunder;
(b) all of Trustor's right, title and interest in
that certain real property in the County of Imperial, State of
California, described in Exhibit B attached hereto and by this
reference incorporated herein (the "Ground Lease Premises") (the
Resource Easement Area Premises and the Ground Lease Premises being
hereinafter collectively referred to as the "Leathers Premises");
pursuant to that certain Ground Lease dated as of October 26, 1988
between Magma, as landlord, and Trustor, as tenant (a Memorandum of
which was recorded on October 26, 1988 in Book 1613, Page 318 of
Official Records), as amended by the Clarification and Amendment
(collectively, and as the same may from time to time be further
amended and be in effect in accordance with the other Financing
Documents, the "Ground Lease"), together with all renewals,
extensions, supplements, amendments, cancellations or terminations
thereof and all credits, deposits, options, privileges and rights
thereunder;
(c) all buildings, improvements and fixtures now or
hereafter located on the Leathers Premises (hereinafter referred to
as the "Improvements");
(d) the Easement Grant Deed and the rights and
interests created thereunder together with all renewals, extensions,
supplements, amendments, cancellations or terminations thereof;
(e) the Ground Lease and the rights and interests
created thereunder together with all renewals, extensions,
supplements, amendments, cancellations or terminations thereof;
(f) all the estate, right, title, claim or demand
of any nature whatsoever of Trustor, either in law or in equity, in
possession or expectancy, in and to the Trust Property and in all
replacements, substitutes, renewals, betterments and extensions of
and all additions to any of the Improvements, or any part thereof;
(g) all easements (other than as created under and
pursuant to the Easement Grant Deed), rights-of-way, gores of land,
streets, ways, alleys, passages, sewer rights, waters, water courses,
water rights and powers, and all estates, rights, titles, interests,
privileges, liberties, tenements, hereditaments, revocable consents,
options, appendages and appurtenances of any nature whatsoever, in
any way belonging, relating or pertaining to the Trust Property
(including, without limitation, any and all development rights, air
rights, water rights or similar or comparable rights of any
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nature whatsoever now or hereafter appurtenant to the Leathers
Premises or now or hereafter transferred to the Leathers Premises)
together with all renewals, extensions, supplements or amendments
thereof, and Trustor's interest in all land lying in the bed of any
street, road or avenue, opened or proposed, in front of or adjoining
the Leathers Premises to the center line thereof;
(h) all machinery, apparatus, equipment, fittings,
fixtures and other property of every kind and nature whatsoever owned
by Trustor, or in which Trustor has or shall have an interest, now or
hereafter located upon the Trust Property, or appurtenances thereto,
and usable in connection with the present or future operation and
occupancy of the Trust Property and all equipment, materials,
supplies, apparatus and other items now or hereafter attached to,
installed in or used (temporarily or permanently) of any nature
whatsoever, now or hereafter located upon the Trust Property and all
renewals, replacements and substitutions thereof and additions
thereto, including but not limited to any and all partitions, ducts,
shafts, pipes, radiators, conduits, wiring, floor coverings, awnings,
motors, engines, boilers, stokers, pumps, dynamos, transformers,
turbines, generators, fans, blowers, vents, switchboards, elevators,
mail or coal conveyors, escalators, compressors, furnaces, cleaning
equipment, call and sprinkler systems, fire extinguishing apparatus,
water and other tanks, heating, ventilating, plumbing, laundry,
incinerating, air conditioning and air cooling systems and water,
gas, telephone, telecommunications, telemetry, electric equipment,
wells, sumps, test holes, pipelines, separators, clarifiers,
crystallizers, headers, scrubbers, demisters, cooling towers,
turbines, generators, geothermal electric generating facilities,
buildings sheds, roads, transformers and transmission lines
(hereinafter collectively referred to as the "Equipment"), and the
right, title and interest of Trustor in and to any of the Equipment
which may be subject to any security agreements (as defined in the
Uniform Commercial Code of the State of California) superior in lien
to the lien of this Deed of Trust;
(i) all awards or payments, including interest
thereon, and the right to receive the same, which may be made with
respect to the Trust Property, whether from state fund sharing or
from the exercise of the right of eminent domain (including any
transfer made in lieu of the exercise of said right), changes of
grade of street or for any other injury to or decrease in the value
of the Trust Property now or hereafter located thereon, whether
direct or consequential, which said awards and payments are hereby
assigned, and Beneficiary is hereby authorized to collect and receive
the proceeds thereof and to give proper receipts and acquittances
therefor;
(j) all refunds or rebates of all taxes or charges
in lieu of taxes, assessments, water rates, sewer rents and other
charges, including vault charges and license or permit fees for the
use of vaults, chutes and similar areas on or adjoining the Premises,
now or hereafter levied or assessed against the Trust Property
(hereinafter referred to as the "Taxes");
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(k) all leases (including oil, gas and other
mineral leases), subleases, franchises, licenses, concessions,
permits, contracts and other agreements affecting the use or
occupancy of the Trust Property now or hereafter entered into and any
renewals or extensions thereof (hereinafter referred to as the
"Leases") and the right to receive and apply the rents, issues and
profits of the Trust Property to the extent of Trustor's interest
therein, including but not limited to the proceeds of all
hydrocarbons or other minerals produced from the Trust Property and
all delay rentals and bonuses from any oil, gas or other mineral
lease (hereinafter referred to as the "Rents") to the payment of the
Debt;
(l) all inventory, accounts and general intangibles
owned by Trustor, or in which Trustor now has or hereafter shall have
any right, title or interest, now or hereafter located upon, arising
in connection with or concerning the Trust Property;
(m) all proceeds of and any unearned premiums on
any insurance policies covering the Trust Property, including,
without limitation, the right to receive the proceeds of any
insurance, judgments, or settlements made in lieu thereof, for damage
to the Trust Property;
(n) the right, in the name and on behalf of
Trustor, to appear in and defend any action or proceeding brought
with respect to the Trust Property and to commence any action or
proceeding to protect the interest of Beneficiary, Funding
Corporation and the Secured Parties in the Trust Property;
(o) all of Trustor's right, title and interest in
and to all plans and specifications prepared for construction of
Improvements or other development of the Trust Property (including
all amendments, modifications, supplements, general conditions and
addenda thereof or thereto) and all studies, data and drawings
related thereto, and all contracts and agreements of Trustor relating
to the aforesaid plans and specifications or to the aforesaid
studies, data and drawings or to the construction of Improvements on
the Trust Property;
(p) all contracts with property managers,
surveyors, real estate advisors and consultants, geothermal advisors
and consultants, geothermal engineers, real estate brokers, and other
like agents and professionals that relate to any part of the Trust
Property, including without limitation, any Improvements constructed
or to be constructed on the Trust Property, and all maps, reports,
surveys, and studies of or relating to any of the Trust Property,
owned by Trustor or in which Trustor has or shall have an interest
and now or hereafter in the possession of Trustor or any such agent
or professional;
(q) all present and future agreements, permits,
licenses and approvals, as well as all modifications, supplements,
extensions and renewals thereof, now existing or hereafter made, in
which Trustor has or shall have an interest relating to the use,
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development and/or occupancy of the Resource Easement Area Premises,
the Ground Lease Premises and/or the Improvements;
(r) all products and proceeds of any of the Trust
Property herein described; and
(s) all bank accounts and trust accounts of
Trustor, including without limitation Trustor's accounts in the
Capital Improvements Fund and any other funds of Trustor on deposit
pursuant to the Indenture and the Depositary Agreement.
This Deed of Trust secures the following
obligations which shall heretofore and hereinafter collectively be referred to
as the Debt:
(i) The payment of all indebtedness of Trustor
evidenced by the Financing Documents to which it is a party; and
(ii) The satisfaction and performance of all other
debts, obligations, covenants, agreements, and liabilities of Trustor to
Trustee and Beneficiary arising out of, connected with, or related to this
Deed of Trust or the Financing Documents and all amendments, extensions, and
renewals of the foregoing documents, whether now existing or hereafter
arising, voluntary or involuntary, absolute or contingent, liquidated or
unliquidated, and whether or not from time to time decreased or extinguished
and later increased, created, or incurred.
To protect the security of this Deed of Trust,
Trustor covenants with and represents and warrants to Trustee, Beneficiary,
Funding Corporation and the Secured Parties as follows:
2. Payment of Debt. Trustor will pay the Debt at
the time and in the manner provided for its payment in this Deed of Trust and
the Financing Documents, as applicable.
3. Warranty of Title. Subject only to Permitted
Liens, Trustor warrants its right, title or interest, as applicable, to the
Resource Easement Area Premises, the Ground Lease Premises, the Improvements,
the Equipment and the balance of the Trust Property and the validity and
priority of the lien of this Deed of Trust and the estate hereof against the
claims and demands of all persons whomsoever. Trustor also represents and
warrants that (i) Trustor is now, and after giving effect to this Deed of
Trust, will be, in a solvent condition, (ii) the execution and delivery of
this Deed of Trust by Trustor does not constitute a "fraudulent conveyance"
within the meaning of Title 11 of the United States Code as now constituted or
under any other applicable statute, and (iii) no bankruptcy or insolvency
proceedings are pending or contemplated by or, to the best of Trustor's
knowledge, against Trustor.
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4. Notice. Trustor hereby requests that a copy of
notice of default and notice of sale be mailed to it at the address set forth
below, and such address is also the mailing address of Trustor, as debtor,
under the California Uniform Commercial Code. Beneficiary's address given
below is the address for Beneficiary on behalf of Funding Corporation and the
Secured Parties, as secured party, under the California Uniform Commercial
Code. In addition, any notice, request, demand, statement, authorization,
approval or consent made hereunder shall be made pursuant to the provisions of
the Partnership Credit Agreement as follows:
If to Trustor:
Leathers, L.P.
302 South 36th Street, Suite 400-C
Omaha, Nebraska 68131
Attention: General Counsel
to Trustee:
Chicago Title Insurance Company
925 B Street
San Diego, California 92101
Attention: Legal Department
If to Beneficiary:
Chemical Trust Company of California
50 California Street, 10th Floor
San Francisco, California 94111
Attention: Legal Department
5. Sale of Trust Property. If this Deed of Trust is
foreclosed, or the power of sale hereunder is exercised, the Trust Property,
or any interest therein, may, at the discretion of Beneficiary, be sold in one
or more parcels or in several interests or portions and in any order or
manner.
6. No Credits on Account of the Debt. Trustor will
not claim or demand or be entitled to any credit or credits on account of the
Debt for any part of the Taxes assessed against the Trust Property or any part
thereof, and no deduction shall otherwise be made or claimed from the taxable
value of the Trust Property, or any part thereof, by reason of this Deed of
Trust or the Debt.
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7. Offset, Counterclaims and Defenses. Any assignee
of this Deed of Trust and the Debt secured hereby shall take the same free and
clear of all offsets, counterclaims or defenses of any nature whatsoever which
Trustor may have against any assignor of this Deed of Trust and the Debt
secured hereby, and no such offset, counterclaim or defense shall be
interposed or asserted by Trustor in any action or proceeding brought by any
such assignee upon this Deed of Trust or the Debt secured hereby and any such
right to interpose or assert any such offset, counterclaim or defense in any
such action or proceeding is hereby expressly waived by Trustor.
8. Other Security for the Debt. Trustor shall
observe and perform all of the terms, covenants and provisions to be observed
or performed by Trustor contained in this Deed of Trust and in the Financing
Documents to which Trustor shall be a party evidencing, securing or
guaranteeing payment of the Debt, in whole or in part, or otherwise executed
and delivered in connection with this Deed of Trust or the Financing
Documents.
9. Documentary Stamps. If at any time the United
States of America, any state thereof or any governmental subdivision of any
such state, shall require revenue or other stamps to be affixed to the
Financing Documents or this Deed of Trust, Trustor will pay for the same, with
interest and penalties thereon, if any.
10. Right of Entry. Beneficiary, Funding
Corporation and each of the Secured Parties shall have the right to enter and
inspect the Trust Property at all reasonable times as provided in the
Partnership Credit Agreement.
11. Books and Records. Trustor will comply with all
of the provisions and requirements of Section 4.16 of the Partnership Credit
Agreement concerning its books, records and accounts reflecting all of the
financial affairs of Trustor.
12. Right to Cure Defaults. Upon the occurrence and
during the continuance of a Credit Agreement Event of Default under the
Partnership Credit Agreement or a Guarantee Event of Default under the
Partnership Guarantee, Beneficiary, Funding Corporation or the Secured Parties
may, at their discretion, remedy the same in accordance with the applicable
provisions of the Partnership Credit Agreement and for such purpose shall have
the right to enter upon the Trust Property or any portion thereof without
thereby becoming liable to Trustor or any person in possession thereof holding
under Trustor in each case to the extent set forth in the Partnership Credit
Agreement. If Beneficiary, Funding Corporation or the Secured Parties shall
remedy such a default or appear in, defend, or bring any action or proceeding
to protect their interest in the Trust Property or to foreclose this Deed of
Trust or to exercise the power of sale granted under this Deed of Trust or to
collect the Debt or to otherwise exercise any remedies available to
Beneficiary, Funding Corporation or the Secured Parties under this Deed of
Trust, the costs and expenses thereof (including attorneys' fees to the extent
permitted by law) shall be treated as set forth in Section 5.4 of the
Partnership Credit Agreement.
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13. Appointment of Receiver. Trustee or
Beneficiary, in any action to foreclose this Deed of Trust or exercise the
power of sale granted under this Deed of Trust or upon the actual or
threatened waste to any part of the Trust Property or upon the occurrence of a
Credit Agreement Event of Default under the Partnership Credit Agreement or a
Guarantee Event of Default under the Partnership Guarantee, shall be at
liberty, without notice, to apply for the appointment of a receiver of the
Rents, and shall be entitled to the appointment of such receiver as a matter
of right, without regard to the value of the Trust Property as security for
the Debt, or the solvency or insolvency of any person then liable for the
payment of the Debt.
14. Non-Waiver. The failure of Beneficiary to
insist upon strict performance of any term of this Deed of Trust shall not be
deemed to be a waiver of any term of this Deed of Trust. Trustor shall not be
relieved of Trustor's obligation to pay and perform the Debt at the time and
in the manner provided for its payment in the Financing Documents and this
Deed of Trust by reason of (i) failure to comply with any request of Trustor
to take any action to foreclose this Deed of Trust or otherwise enforce any of
the provisions hereof or of the Financing Documents or any other mortgage,
deed of trust, instrument or document securing or guaranteeing the payment of
the Debt or a portion thereof, (ii) the release, regardless of consideration,
of the whole or any part of the Trust Property or any other security for the
Debt, or (iii) any agreement or stipulation between Beneficiary and any
subsequent owner or owners of the Trust Property or other person extending the
time of payment or otherwise modifying or supplementing the terms of this Deed
of Trust or the Financing Documents evidencing, securing or guaranteeing
payment of the Debt or any portion thereof, without first having obtained the
consent of Trustor (but without prejudice to the rights of Trustor under the
Partnership Credit Agreement), and in the latter event, Trustor shall continue
to be obligated to pay and perform the Debt at the time and in the manner
provided in the Financing Documents and this Deed of Trust, as so extended,
modified and supplemented, unless expressly released and discharged from such
obligation by Beneficiary in writing. Regardless of consideration, and without
the necessity for any notice to or consent by the holder of any subordinate
lien, encumbrance, right, title or interest in or to the Trust Property,
Beneficiary, Funding Corporation or the Secured Parties may release any person
at any time liable for the payment of the Debt or any portion thereof or all
or any part of the security held for the Debt and may extend the time of
payment or otherwise modify the terms of the Financing Documents or this Deed
of Trust, including, without limitation, a modification of the interest rate
payable on the principal balance of the Debt, without in any manner impairing
or affecting this Deed of Trust or the lien thereof or the priority of this
Deed of Trust, as so extended and modified, as security for the Debt over any
such subordinate lien, encumbrance, right, title or interest. Beneficiary,
Funding Corporation and the Secured Parties may resort for the payment of the
Debt to any other security held by Beneficiary, Funding Corporation or the
Secured Parties in such order and manner as Beneficiary, Funding Corporation
or the Secured Parties, in their discretion, may elect. Beneficiary, Funding
Corporation or the Secured Parties may take action to recover the Debt, or any
portion thereof, or to enforce any covenant hereof without prejudice to the
right of the Beneficiary thereafter to foreclose this Deed of Trust. The
Beneficiary, Funding Corporation and the Secured Parties shall not be limited
exclusively to the rights and remedies herein stated
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but shall be entitled to every additional right and remedy now or hereafter
afforded by law or equity. The rights of the Beneficiary, Funding Corporation
and the Secured Parties under this Deed of Trust shall be separate, distinct
and cumulative, and none shall be given effect to the exclusion of the others.
No act of Funding Corporation, the Secured Parties or Beneficiary shall be
construed as an election to proceed under any one provision herein to the
exclusion of any other provision.
15. Power of Sale. Subject to the provisions of the
Intercreditor Agreement, upon the occurrence and during the continuance of a
Credit Agreement Event of Default under the Partnership Credit Agreement or a
Guarantee Event of Default under the Partnership Guarantee, Beneficiary may at
any time, at its option and in its sole discretion, declare the Debt to be due
and payable and the same shall thereupon become immediately due and payable,
including any prepayment charge or fee payable under the terms of the
Financing Documents. Beneficiary may also do any or all of the following;
provided, however, that any of the following actions shall be undertaken in a
commercially reasonable manner in accordance with applicable law; and
provided, further, that Beneficiary shall have no obligation to do any of the
following:
(a) Either in person or by agent, with or without
bringing any action or proceeding or by a receiver appointed by a court and
without regard to the adequacy of Beneficiary's, Funding Corporation's and the
Secured Parties' security, enter upon and take possession of the Trust
Property or any part hereof and do any acts which Beneficiary deems necessary
or desirable to preserve the value, marketability or rentability of the Trust
Property or to increase the income therefrom or to protect the security hereof
and with or without taking possession of any of the Trust Property, sue for or
otherwise collect all Rents and profits including those past due and unpaid,
and apply the same, less costs and expenses of operation and collection
including attorneys' fees and expenses, upon the Debt, all in such order as
provided in Section 6 of the Intercreditor Agreement. The collection of Rents
and profits and the application thereof shall not cure or waive any event of
default or notice thereof or invalidate any act done in response thereto or
pursuant to such notice.
(b) Bring an action in any court of competent
jurisdiction to foreclose this instrument or to enforce any of the covenants
hereof.
(c) Exercise any or all of the remedies available
to a secured party under the Uniform Commercial Code.
(d) Beneficiary may elect to cause the Trust
Property or any part thereof to be sold under the power of sale herein granted
in any manner permitted by applicable law. In connection with any sale or
sales hereunder, Beneficiary may elect to treat any of the Trust Property
which consists of a right in action or which is property that can be severed
from the real property covered hereby or any improvements thereon without
causing structural damage thereto as if the same were personal property, and
dispose of the same in accordance with applicable law, separate and apart from
the sale of real property. Any sale of any personal property hereunder shall
be conducted in any manner permitted by Section 9501 or any other
9
applicable sections of the California Uniform Commercial Code. Where the Trust
Property consists of real and personal property or fixtures, whether or not
such personal property is located on or within the real property, Beneficiary
may elect in its discretion to exercise its rights and remedies against any or
all of the real property, personal property, and fixtures in such order and
manner as is now or hereafter permitted by applicable law. Without limiting
the generality of the foregoing, Beneficiary may at its sole and absolute
discretion and without regard to the adequacy of its security elect to proceed
against any or all of the real property, personal property and fixtures in any
manner permitted under Section 9501(4)(a) of the California Uniform Commercial
Code; and if the Beneficiary elects to proceed in the manner permitted under
Section 9501(4)(a)(ii) of the California Uniform Commercial Code, the power of
sale herein granted shall be exercisable with respect to all or any of the
real property and fixtures covered hereby, as designated by Beneficiary, and
the Trustee is hereby authorized and empowered to conduct any such sale of any
real property and fixtures in accordance with the procedures applicable to
real property. Where the Trust Property consists of real property and personal
property, any reinstatement of the Debt, following the occurrence of a Credit
Agreement Event of Default under the Partnership Credit Agreement or a
Guarantee Event of Default under the Partnership Guarantee and an election by
the Beneficiary to accelerate the maturity of the Debt, which is made by
Trustor or any other person or entity permitted to exercise the right of
reinstatement under Section 2924c of the California Civil Code or any
successor statute, shall, in accordance with the terms of California Uniform
Commercial Code Section 9501(4)(c)(iii), not prohibit the Beneficiary from
conducting a sale or other disposition of any personal property or fixtures or
from otherwise proceeding against or continuing to proceed against any
personal property or fixtures in any manner permitted by the California
Uniform Commercial Code; nor shall any such reinstatement invalidate, rescind
or otherwise affect any sale, disposition or other proceeding held, conducted
or instituted with respect to any personal property or fixtures prior to such
reinstatement. Any sums paid to Beneficiary, Funding Corporation or the
Secured Parties in effecting any reinstatement pursuant to Section 2924c of
the California Civil Code shall be applied to the Debt and to Beneficiary's,
Funding Corporation's, the Secured Parties' and Trustee's reasonable costs and
expenses in the manner required by Section 2924c. Should Beneficiary elect to
sell any of the Trust Property which is real property or which is personal
property or fixtures that Beneficiary has elected under Section 9501(4)(a)(ii)
of the California Uniform Commercial Code to sell together with real property
in accordance with the laws governing a sale of real property, such notice of
default and election to sell shall be given as may then be required by law.
Thereafter, upon the expiration of such time and the giving of such notice of
sale as may then be required by law, at the time and place specified in the
notice of sale, Trustee shall sell such property, or any portion thereof
specified by Beneficiary, at public auction to the highest bidder for cash in
lawful money of the United States. Trustee may, and upon request of
Beneficiary shall, from time to time, postpone the sale by public announcement
thereof at the time and place noticed therefor. If the Trust Property consists
of several lots, parcels or interests, Beneficiary may designate the order in
which the same shall be offered for sale or sold. Should Beneficiary desire
that more than one such sale or other disposition be conducted, Beneficiary
may, at its option, cause the same to be conducted simultaneously, or
successively on the same day, or at such different days or times and in such
order as Beneficiary may deem to be in its best interest. Any person,
including Trustor, Trustee, Beneficiary, Funding Corporation or any of
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the Secured Parties, may purchase at the sale. In the event Beneficiary elects
to dispose of the Trust Property through more than one sale, Trustor agrees to
pay the costs and expenses of each such sale and of any judicial proceedings
wherein the same may be made, including reasonable compensation to Trustee and
Beneficiary, their agents and counsel, and to pay all expenses, liabilities
and advances made or incurred by Trustee in connection with such sale or
sales, together with interest on all such advances made by Trustee at the
interest rate then applicable to the indebtedness evidenced by the Partnership
Credit Agreement. Upon any sale Trustee shall execute and deliver to the
purchaser or purchasers a deed or deeds conveying the property so sold but
without any covenant or warranty whatsoever express or implied whereupon such
purchaser or purchasers shall be let into immediate possession, and the
recitals in any such deed or deeds of facts such as default, the giving of
notice of default and notice of sale, and other facts affecting the regularity
or validity of such sale or disposition, shall be conclusive proof of the
truth of such facts and any such deed or deeds shall be conclusive against all
persons as to such facts recited therein.
(e) Exercise each of its other rights and remedies
under this Deed of Trust and the Financing Documents, including, any or all of
the following:
(i) declare the Debt, with all interest thereon and
all other sums secured hereby, to be immediately due and payable, and
if the same is not paid on demand, at Beneficiary's option, bring
suit therefor and demand payment thereof and if the same is not paid
on demand, bring suit for any delinquent installment payment under
the Financing Documents and take any and all steps and institute any
and all other proceedings that Beneficiary deems necessary to enforce
the indebtedness and obligations secured hereby and to protect the
lien of this Deed of Trust;
(ii) without assuming liability for the performance
of any of Trustor's obligations hereunder or under the Partnership
Project Documents, enter and take possession of the Trust Property or
any part thereof, exclude Trustor and all persons claiming under
Trustor whose claims are junior to this Deed of Trust, wholly or
partly therefrom, and use, operate, manage and control the same
either in the name of Trustor or otherwise as Beneficiary shall deem
best, and upon such entry, from time to time at the expense of
Trustor and the Trust Property, make all such repairs, replacements,
alterations, additions or improvements to the Trust Property or any
part thereof as Beneficiary may deem proper and, whether or not
Beneficiary has so entered and taken possession of the Trust Property
or any part thereof, collect and receive all the Rents and apply the
same, to the extent permitted by law, to the payment of all expenses
which Beneficiary may be authorized to make under this Deed of Trust,
the remainder to be applied to the payment of the Debt until the same
shall have been repaid in full; if Beneficiary demands or attempts to
take possession of the Trust Property or any portion thereof in the
proper exercise of any rights hereunder, Trustor shall promptly turn
over and deliver complete possession thereto to Beneficiary; and
(iii) personally or by agents, with or without
entry, if Beneficiary shall deem it advisable, proceed to protect and
enforce its rights under this Deed of Trust, by suit
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for specific performance of any covenant contained herein or in the Financing
Documents or in aid of the execution of any power granted herein or in the
Financing Documents, or for the foreclosure of this Deed of Trust and the sale
for cash of the Trust Property under the judgment or decree of a court of
competent jurisdiction, or for the exercise of the power of sale granted under
this Deed of Trust or for the enforcement of any other right as Beneficiary
shall deem most effectual for such purpose; provided that in the event of a
sale, by foreclosure or otherwise, of less than all of the Trust Property,
this Deed of Trust shall continue as a lien on, and security interest in, the
remaining portion of the Trust Property and Beneficiary shall not be obligated
to sell upon credit unless Beneficiary shall have expressly consented in
writing to a sale upon credit.
(f) Except as otherwise required by law, apply the
proceeds of any foreclosure or disposition in the manner set forth in the
Intercreditor Agreement.
(g) Upon any sale or sales made under or by virtue
of this section, whether made under the power of sale or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, Beneficiary or
any of the Secured Parties may bid for and acquire the Trust Property or any
part thereof. In lieu of paying cash for the Trust Property, Beneficiary
and/or any of the Secured Parties may make settlement for the purchase price
by crediting against the Debt the sales price of the Trust Property, as
adjusted for the expenses of sale and the costs of the action and any other
sums for which Trustor is obligated to reimburse Trustee or Beneficiary and
the Secured Parties under this Deed of Trust.
16. Concerning the Trustee. Trustee shall be under
no duty to take any action hereunder except as expressly required hereunder or
by law, or to perform any act which would involve Trustee in any expense or
liability or to institute or defend any suit in respect hereof, unless
properly indemnified to Trustee's reasonable satisfaction. Trustee, by
acceptance of this Deed of Trust, covenants to perform and fulfill the trusts
herein created, being liable, however, only for willful negligence or
misconduct, and hereby waives any statutory fee and agrees to accept
reasonable compensation, in lieu thereof, for any services rendered by Trustee
in accordance with the terms hereof. Trustee may resign at any time upon
giving thirty (30) days' notice to Trustor and to Beneficiary. Beneficiary may
remove Trustee at any time or from time to time and select a successor
trustee. In the event of the death, removal, resignation, refusal to act, or
inability to act of Trustee, or in its sole discretion for any reason
whatsoever Beneficiary may, without notice and without specifying any reason
therefor and without applying to any court, select and appoint a successor
trustee, by an instrument recorded wherever this Deed of Trust is recorded and
all powers, rights, duties and authority of Trustee, as aforesaid, shall
thereupon become vested in such successor. Such substitute trustee shall not
be required to give bond for the faithful performance of the duties of Trustee
hereunder unless required by Beneficiary.
17. Trustee's Fees. Trustor shall pay all costs,
fees and expenses incurred by Trustee and Trustee's agents and counsel in
connection with the performance by Trustee of
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Trustee's duties hereunder and all such costs, fees and expenses shall be
secured by this Deed of Trust.
18. Proceeds of Sale.
(a) The proceeds or avails of any foreclosure sale
or other remedy exercised pursuant to Section 14, above, entitled "Power of
Sale" together with all other sums which then may be held by Beneficiary under
this Deed of Trust, or under a judgment, order or decree made in any action to
foreclose or to enforce this Deed of Trust whether under the provisions of
this Deed of Trust, or otherwise, shall be distributed according to the terms
of the Intercreditor Agreement.
(b) Subject to the provisions of Section 43 of this
Deed of Trust, no sale or other disposition of all or any part of the Trust
Property shall be deemed to relieve Trustor of its obligations under this Deed
of Trust or the Financing Documents except and only to the extent the proceeds
are applied to the payment of the Debt or such other obligations. If the
proceeds of sale, collection or other realization of or upon the Trust
Property are insufficient to cover the costs and expenses of such realization
and the payment in full of the Debt, Trustor shall remain liable for any
deficiency.
19. Trustor as Tenant Holding Over. In the event of
any such foreclosure or other sale by Beneficiary and/or the Secured Parties,
Trustor shall be deemed a tenant holding over and shall forthwith deliver
possession to the purchaser or purchasers at such sale or be summarily
dispossessed according to provisions of law applicable to tenants holding
over.
20. Leases. Beneficiary is authorized to
subordinate this Deed of Trust to any Leases and to foreclose this Deed of
Trust subject to the rights of any tenants of the Trust Property, if any, and
the failure to so subordinate or to make any such tenants' parties to any such
foreclosure or other proceedings and to foreclose their rights will not be,
nor be asserted to be by Trustor, a defense to any proceedings instituted by
Beneficiary to collect the Debt.
21. Discontinuance of Proceedings. In case
Beneficiary, Funding Corporation or the Secured Parties shall have proceeded
to enforce any right, power or remedy under this Deed of Trust by foreclosure,
sale, entry or otherwise, and such proceeding shall have been withdrawn,
discontinued or abandoned for any reason, or shall have been determined
adverse to Beneficiary, Funding Corporation or the Secured Parties, then in
every such case, to the fullest extent permitted by law, (a) Trustor and
Beneficiary, Funding Corporation or the Secured Parties shall be restored to
their former positions and rights, (b) all rights, powers and remedies of
Beneficiary, Funding Corporation and the Secured Parties shall continue as if
no such proceeding had been taken, (c) each and every Credit Agreement Event
of Default under the Partnership Credit Agreement and each and every Guarantee
Event of Default under the Partnership Guarantee declared or occurring prior
or subsequent to such withdrawal, discontinuance or abandonment shall be or
shall be deemed to be an independent event of default and (d) neither the
Debt, this Deed of Trust nor any of the Financing Documents shall be or shall
be deemed to have been not reinstated or otherwise affected by
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such withdrawal, discontinuance or abandonment; and to the fullest extent
permitted by law, Trustor hereby expressly waives the benefit of any statute or
rule of law now provided or which may hereafter conflict with the above.
22. No Reinstatement. If a Credit Agreement Event
of Default under the Partnership Credit Agreement or a Guarantee Event of
Default under the Partnership Guarantee shall have occurred and be continuing
Beneficiary, Funding Corporation or the Secured Parties shall have proceeded
to enforce any right, power or remedy permitted hereunder, then a tender of
payment by Trustor or by anyone on behalf of Trustor of any amount less than
the amount necessary to satisfy the Debt in full, or the acceptance by
Beneficiary, Funding Corporation or the Secured Parties of any such payment so
tendered, shall not constitute a reinstatement of this Deed of Trust, the
Financing Documents or any other document evidencing, securing or guaranteeing
the Debt.
23. Trustor's Waiver of Rights. To the fullest
extent permitted by law, Trustor waives the benefit of all laws now existing
or that hereafter may be enacted providing for (i) any appraisal before sale
of any portion of the Trust Property and (ii) the benefit of all laws that may
be hereafter enacted in any way extending the time for the enforcement of the
collection of the Debt, or creating or extending a period of redemption from
any sale made in collecting said Debt. To the fullest extent that Trustor may
do so, Trustor agrees that Trustor will not at any time insist upon, plead,
claim or take the benefit or advantage of any law now or hereafter in force
providing for any appraisal, valuation, stay, extension or redemption, or any
so-called "Moratorium Laws" and Trustor, for Trustor and its successors and
assigns, and for any and all persons ever claiming any interest in the Trust
Property, to the fullest extent permitted by law, hereby waives and releases
all rights of redemption, valuation, appraisal, stay of execution, notice of
election to mature or declare due the whole of the Debt and marshaling in the
event of the exercise of the power of sale granted under this Deed of Trust or
foreclosure of the liens hereby created. If any law referred to in this
Section and now in force, of which Trustor, Trustor's successors and assigns
or any other person might take advantage despite this Section, shall hereafter
be repealed or cease to be in force, such law shall not thereafter be deemed
to preclude the application of this Section.
24. Security Agreement. (a) Trustor maintains
places of business in the State of California and Trustor will immediately
notify Beneficiary in writing of any change in such places of business.
(a) At the request of Beneficiary, Trustor shall
join Beneficiary in executing one or more financing statements and
continuations and amendments thereof pursuant to the UCC in form reasonably
satisfactory to Beneficiary; and Trustor will pay the cost of filing the same
in all public offices wherever filing is deemed by Beneficiary to be
necessary. In the event Trustor fails to execute such documents within five
(5) business days after request by Beneficiary, Trustor hereby authorizes
Beneficiary to file such financing statements and irrevocably constitutes and
appoints Beneficiary, or any officer of Beneficiary, as its true and lawful
attorney-in-fact to execute the same on behalf of Trustor.
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(b) This Deed of Trust constitutes a financing
statement filed as a fixture filing under UCC ss. 9402(6) in the official
records of Imperial County with respect to any and all fixtures included
within the term "Trust Property" and with respect to any goods or other
personal property that may now be or hereafter become such a fixture.
(c) Beneficiary has no responsibility for and does
not assume any of, Trustor's obligations or duties under any agreement or
obligation which is part of the Equipment or any obligation relating to the
acquisition, preparation, custody, use, enforcement or operation of any of the
Trust Property.
(d) Trustor and Beneficiary agree that the filing
of a financing statement in the records normally having to do with personal
property shall never be construed as in any way derogating from or impairing
this Deed of Trust and the intention of the parties that everything used in
connection with the production of income from the Trust Property or adapted
for use therein or which is described or reflected in this Deed of Trust is,
and at all times and for all purposes and in all proceedings both legal or
equitable shall be regarded as part of the real estate subject to the lien
hereof, irrespective of whether (i) any such item is physically attached to
improvements located on such real property or (ii) any such item is referred
to or reflected in any financing statement so filed at any time. Similarly,
the mention in any such financing statement of (A) the rights in or to the
proceeds of any fire hazard insurance policy or (B) any award in eminent
domain proceedings for taking or for loss of value or for cause of action or
proceeds thereof in connection with any damage or injury to the Trust Property
or any part thereof shall never be construed as in any way altering any of the
rights of Beneficiary, Funding Corporation and the Secured Parties as
determined by this instrument or impugning the priority of Beneficiary's,
Funding Corporation's and the Secured Parties' lien granted hereby or by any
other recorded document, but such mention in such financing statement is
declared to be for the protection of Beneficiary, Funding Corporation and the
Secured Parties in the event any court shall at any time hold with respect to
matters (A) and (B) above that notice of Beneficiary's, Funding Corporation's
and the Secured Parties' priority of interest, to be effective against a
particular class of persons, including, without limitation, the Federal
government and any subdivision or entity of the Federal government must be
filed in the personal property records or other commercial code records.
25. Further Acts, etc. Trustor will, at the cost of
Trustor, and without expense to Beneficiary, Funding Corporation or the
Secured Parties, execute, acknowledge and deliver all and every such further
acts, deeds, conveyances, financing statements, mortgages, deeds of trust,
assignments, notices of assignments, transfers and assurances as Beneficiary
shall, from time to time, reasonably require, for the better assuring,
conveying, assigning, transferring and confirming unto Beneficiary, the
property and rights hereby conveyed or assigned or intended now or hereafter
so to be, or which Trustor may be or may hereafter become bound to convey or
assign to Beneficiary, or for carrying out the intention or facilitating the
performance of the terms of this Deed of Trust or for filing, registering or
recording this Deed of Trust and, on demand, will execute and deliver and
hereby authorizes Beneficiary to execute in the name of Trustor to the extent
they may lawfully do so, one or
15
more financing statements, chattel mortgages or comparable security instruments,
to evidence and perfect more effectively the lien hereof upon the Trust
Property.
26. Headings, etc. The headings, titles and
captions of various Sections of this Deed of Trust are for convenience of
reference only and are not to be construed as defining or limiting, in any
way, the scope or intent of the provisions hereof.
27. Filing of Deed of Trust, etc. Trustor forthwith
upon the execution and delivery of this Deed of Trust and thereafter, from
time to time, will cause this Deed of Trust, and any security instrument
creating a lien or evidencing or perfecting the lien hereof upon the Trust
Property and each instrument of further assurance to be filed, registered or
recorded in such manner and in such places as may be required by any present
or future law in order to publish notice of and fully to protect, preserve and
perfect the lien hereof upon, and the interest of Beneficiary, Funding
Corporation and the Secured Parties in the Trust Property. Trustor will pay
all filing, registration or recording fees, and all expenses incurred by the
Beneficiary, Funding Corporation or Secured Parties incident to the
preparation, execution and acknowledgment of this Deed of Trust, any deed of
trust or any mortgage or deed of trust supplemental hereto, any security
instrument with respect to the Trust Property and any instrument of further
assurance, and all Federal, state, county and municipal taxes, duties,
imposts, assessments and charges arising out of or in connection with the
execution and delivery of this Deed of Trust, any mortgage or deed of trust
supplemental hereto, any security instrument with respect to the Trust
Property or any financing statement, continuation statement or other
instrument of further assurance. Trustor shall hold harmless and indemnify
Beneficiary, Funding Corporation and the Secured Parties, their successors and
assigns, against any liability incurred by reason of the imposition of any tax
on the making and recording of this Deed of Trust.
28. Usury Laws. This Deed of Trust and the
Financing Documents are subject to the express condition that at no time shall
Trustor be obligated or required to pay interest on the principal balance due
under the Financing Documents at a rate which could subject the creditor of
the debt evidenced by such instruments to either civil or criminal liability
as a result of being in excess of the maximum interest rate which Trustor is
permitted by law to contract or agree to pay. If by the terms of this Deed of
Trust or the Financing Documents Trustor is at any time required or obligated
to pay interest on the principal balance due under any of the Financing
Documents at a rate in excess of such maximum rate, the rate of interest under
such Financing Document shall be deemed to be immediately reduced to such
maximum rate and the interest payable shall be computed at such maximum rate.
29. Recovery of Sums Required to Be Paid.
Beneficiary, Funding Corporation and the Secured Parties shall have the right
pursuant to the Financing Documents from time to time to take action to
recover any sum or sums which constitute a part of the Debt as the same become
due, without regard to whether or not the balance of the Debt shall be due,
and without prejudice to the right of Beneficiary, Funding Corporation or the
Secured Parties thereafter to bring an action of foreclosure, or any other
action, for a default or defaults by Trustor existing at the time such earlier
action was commenced.
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30. Authority. Trustor (and the undersigned acting
on behalf of Trustor) has full power, authority and legal right to execute
this Deed of Trust and to mortgage, give, grant, bargain, sell, release,
pledge, convey, confirm and assign the Trust Property pursuant to the terms
hereof and to keep and observe all of the terms of this Deed of Trust on
Trustor's part to be performed.
31. Inapplicable Provisions. If any term, covenant
or condition of this Deed of Trust shall be held to be invalid, illegal or
unenforceable in any respect, this Deed of Trust shall be construed to recast
such term, covenant or condition in a manner which will allow such term,
covenant or condition to be valid provided any recasting shall be in
accordance with the original intention of the parties. When recasting any
term, covenant or condition, if it is not possible to reflect the original
intention of the parties, this Deed of Trust shall be construed without such
provision.
32. Duplicate Originals. This Deed of Trust may be
executed in any number of duplicate originals and each such duplicate original
shall be deemed to constitute but one and the same instrument.
33. Waiver of Notice. Trustor shall not be entitled
to any notices of any nature whatsoever from Beneficiary, Funding Corporation
or the Secured Parties except with respect to matters for which this Deed of
Trust, the Financing Documents or applicable law specifically and expressly
provides for the giving of notice to Trustor, and to the fullest extent
permitted by law Trustor hereby expressly waives the right to receive any
notice from Beneficiary, Funding Corporation or the Secured Parties with
respect to any matter for which this Deed of Trust, the Financing Documents or
applicable law does not specifically and expressly provide for the giving of
notice to Trustor.
34. No Oral Change. This Deed of Trust may only be
modified, amended or changed by an agreement in writing signed by Trustor and
Beneficiary, and may only be released, discharged or satisfied of record by an
instrument in writing signed by Beneficiary. Funding Corporation and the
Secured Parties shall join in any such agreement, release, discharge or
satisfaction if required for such agreement to be effective under applicable
law. No waiver of any term, covenant or provision of this Deed of Trust shall
be effective unless given in writing by Beneficiary and if so given by
Beneficiary shall only be effective in the specific instance in which given.
Trustor acknowledges that this Deed of Trust and the Financing Documents set
forth the entire agreement and understanding of Trustor and Beneficiary with
respect to the matters set forth therein and that no oral or other agreements,
understanding, representations or warranties exist with respect to those
matters other than those set forth in this Deed of Trust and the Financing
Documents.
35. Absolute and Unconditional Obligation. Trustor
acknowledges that Trustor's obligation to pay the Debt in accordance with the
provision of this Deed of Trust and the Financing Documents is and shall at
all times continue to be absolute and unconditional in all respects, and shall
at all times be valid and enforceable irrespective of any other
17
agreements or circumstances of any nature whatsoever (other than any express
written agreements to the contrary by Funding Corporation and the Secured
Parties) which might otherwise constitute a defense to this Deed of Trust or
the Financing Documents or the obligations of Trustor thereunder to pay the
Debt or the obligations of any other person relating to this Deed of Trust or
the Financing Documents or the obligations of Trustor under this Deed of Trust
or the Financing Documents and to the fullest extent permitted by law Trustor
absolutely, unconditionally and irrevocably waives any and all right to assert
any defense, setoff, counterclaim or crossclaim of any nature whatsoever with
respect to the obligation of Trustor to pay the Debt in accordance with the
provisions of this Deed of Trust or the Financing Documents or the obligations
of any other person relating to this Deed of Trust or the Financing Documents
or the obligations of Trustor under this Deed of Trust or the Financing
Documents, or in any action or proceeding brought by Beneficiary to collect
the Debt, or any portion thereof, or to enforce, foreclose and realize upon
the lien and security interest created by this Deed of Trust or any other
document or instrument securing repayment of the Debt, in whole or in part.
36. Indemnification.
(a) Trustor shall indemnify and hold harmless
Beneficiary, Funding Corporation and the Secured Parties from and against all
loss, cost, liability, other expense in the manner and to the extent required
under the Financing Documents.
(b) All sums secured by this Deed of Trust shall be
paid in accordance with the Financing Documents, as applicable, without
counterclaim, setoff, deduction or defense and without abatement, suspension,
deferment, diminution or reduction, and the obligations and liabilities of
Trustor hereunder shall in no way be released, discharged or otherwise
affected (except as expressly provided herein) by reason of (i) any claim
which Trustor has or might have against Funding Corporation, any of the
Secured Parties or Beneficiary or (ii) any default or failure on the part of
Funding Corporation, any of the Secured Parties or Beneficiary to perform or
comply with any of the terms hereof, of the Partnership Credit Agreement or of
any other Financing Document.
37. Action Affecting the Trust Property.
(a) Trustor agrees to appear in and contest any
action or proceeding purporting to adversely affect the security hereof or the
rights or powers of Funding Corporation, the Secured Parties or Beneficiary
and to pay all costs and expenses of Funding Corporation, the Secured Parties
and Beneficiary, including cost of evidence of title and attorneys' fees and
expenses, in any such action or proceeding in which Funding Corporation, the
Secured Parties or Beneficiary may appear.
(b) Beneficiary shall have the right to appear in
and defend any action or proceeding brought with respect to the Trust Property
and to bring any action or proceeding, in the name and on behalf of Trustor,
Beneficiary, Funding Corporation or the Secured Parties, which Beneficiary
determines to be necessary or reasonably advisable to be brought to
18
protect its, Funding Corporation's or the Secured Parties' interest in the Trust
Property if (i) Trustor fails to defend or bring such action or proceeding, as
appropriate, in a prompt and diligent manner, or thereafter fails to proceed
with diligence in the defense or prosecution of the same, or (ii) a Credit
Agreement Event of Default under the Partnership Credit Agreement or a
Guarantee Event of Default under the Partnership Guarantee shall have occurred
and be continuing.
38. Actions by Beneficiary to Preserve the Trust
Property. Except as hereinbefore expressly provided, should Trustor fail to
make any payment or do any act as and in the manner provided in any of the
Financing Documents after the expiration of any applicable cure or grace
period and as a result a Credit Agreement Event of Default under the
Partnership Credit Agreement or a Guarantee Event of Default under the
Partnership Guarantee shall occur and be continuing, Beneficiary for the
benefit of Funding Corporation and the Secured Parties, without obligation so
to do and without notice to or demand upon Trustor and without releasing
Trustor from any obligation, may make or do the same in such manner and to
such extent as Beneficiary may deem necessary to protect the security hereof.
In connection therewith (without limiting any general powers of Beneficiary,
Funding Corporation or the Secured Parties), Beneficiary, for the benefit of
Funding Corporation and the Secured Parties, shall have and is hereby given
the right, but not the obligation, (i) to the fullest extent permitted by law,
to make additions, alterations, repairs and improvements to the Trust Property
which it may consider necessary to keep the Trust Property in good condition
and repair and (ii) in exercising such powers, to pay necessary expenses,
including engagement of counsel or other necessary or desirable consultants.
Trustor shall, immediately upon demand therefor by Beneficiary, pay all costs
and expenses incurred by Funding Corporation, the Secured Parties or
Beneficiary in connection with the exercise by Beneficiary of the foregoing
rights, including without limitation, costs of evidence of title, court costs,
appraisals, surveys and attorneys' fees and expenses.
39. Remedies Not Exclusive. Subject to the
limitations set forth in Section 43 of this Deed of Trust, Beneficiary,
Funding Corporation and the Secured Parties, and each of them, shall be
entitled to enforce payment and performance of any indebtedness or obligations
secured hereby and to exercise all rights and powers granted under this Deed
of Trust or under the Financing Documents or any other agreement or any laws
now or hereafter in force, notwithstanding some or all of the said
indebtedness and obligations secured hereby may now or hereafter be otherwise
secured, whether by mortgage, deed of trust, pledge, lien, assignment or
otherwise. Subject to the limitations set forth in Section 43 of this Deed of
Trust, neither the acceptance of this Deed of Trust nor its enforcement,
whether by court action or pursuant to the power of sale or other powers
herein contained, shall prejudice or in any manner affect Beneficiary's,
Funding Corporation's or the Secured Parties' right to realize upon or enforce
any other security now or hereafter held by Beneficiary, Funding Corporation
or the Secured Parties, it being agreed that Beneficiary, on behalf of Funding
Corporation and the Secured Parties collectively and individually, shall be
entitled to enforce this Deed of Trust and any other security now or hereafter
held by Beneficiary, Funding Corporation or the Secured Parties in such order
and manner as they, collectively and individually, may in their absolute
discretion determine. No remedy herein conferred upon or reserved to
Beneficiary,
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Funding Corporation or the Secured Parties is intended to be exclusive of any
other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute. Every right, power
or remedy given by any of the Financing Documents to Beneficiary, Funding
Corporation or the Secured Parties, or to which either of them may be otherwise
entitled, may be exercised, concurrently or independently, from time to time
and as often as may be deemed expedient by Beneficiary, Funding Corporation or
the Secured Parties. Every right, power or remedy given by this Deed of Trust
to Funding Corporation and the Secured Parties may be exercised on their behalf
by Beneficiary, whether so expressed or not. Notwithstanding any other provision
of this Deed of Trust, the rights and remedies of Beneficiary, the Funding
Corporation and the Secured Parties shall be subject to the provisions of the
Intercreditor Agreement.
40. Relationship. The relationship of Beneficiary,
Funding Corporation and the Secured Parties to Trustor hereunder is strictly
and solely that of lender and borrower, and nothing contained in this Deed of
Trust or the Financing Documents is intended to create, or shall in any event
or under any circumstance be construed as creating, a partnership, joint
venture, tenancy-in-common, joint tenancy or other relationship of any nature
whatsoever between or among Beneficiary, Funding Corporation and the Secured
Parties and Trustor other than as lender and borrower.
41. Financing Documents. This Deed of Trust is
subject to all of the terms, covenants and conditions of the Financing
Documents, which Financing Documents and all of the terms, covenants and
conditions thereof are by this reference incorporated herein and made a part
hereof with the same force and effect as if set forth at length herein.
Trustor shall observe and perform all of the terms, covenants and conditions
of the Financing Documents on Trustor's part to be observed or performed. All
advances made and all indebtedness arising and accruing under the Financing
Documents from time to time shall be secured hereby.
42. Business Purpose. Trustor hereby stipulates and
warrants that the loans secured hereby are commercial or business loans and
are transacted solely for the purpose of carrying on or acquiring a business
or commercial enterprise or for a proper business purpose under the laws of
the jurisdiction in which the Trust Property is located.
43. Time of the Essence. TIME IS OF THE ESSENCE
with respect to each and every covenant, agreement and obligation of Trustor
under this Deed of Trust and the Financing Documents.
44. Non-Recourse. The obligations hereunder are
subject to the limitations set forth in Section 6.11 of the Partnership Credit
Agreement, the provisions of which are hereby incorporated by reference.
45. Severance of Counterclaims. In the event of
foreclosure of this Deed of Trust, any and all counterclaims filed by Trustor
against Beneficiary, Funding Corporation or the Secured Parties, to the extent
permitted by law, shall be severed by the court having
20
jurisdiction over the foreclosure action, for all purposes from the basic
foreclosure action, on an ex parte basis and without notice to Trustor. Trustor,
by its execution and delivery hereof, hereby expressly consents and agrees to
such severance.
46. WAIVER OF JURY TRIAL. AS AN INDEPENDENT
COVENANT HEREOF, TRUSTOR HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND
IRREVOCABLY WAIVES THE RIGHT IT MIGHT HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS DEED OF TRUST OR THE FINANCING DOCUMENTS, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY
PERSONS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BENEFICIARY TO ACCEPT
DELIVERY OF THIS DEED OF TRUST AND THE FINANCING DOCUMENTS.
47. GOVERNING LAW. THIS DEED OF TRUST IS GOVERNED
BY AND SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
CALIFORNIA.
48. Attorneys' Fees. Attorneys shall be entitled to
fees in connection with the enforcement, amendment, extension or modification
of this Deed of Trust.
49. Shared Draftsmanship. If any ambiguity in the
terms of this Deed of Trust, the doctrine of construction which holds that the
language of the document shall be construed against its drafter shall not
apply as all parties have shared in the drafting of this Deed of Trust.
50. No Third Party Beneficiary. This Deed of Trust,
the Partnership Credit Agreement and the other Financing Documents are for the
sole benefit of Beneficiary, Funding Corporation and each of the Secured
Parties, as applicable, and Trustor and are not for the benefit of any third
party and no third party shall gain any subrogation rights against Trustor or
in, to or with respect to any portion of the Trust Property by reason of this
Deed of Trust or the provisions hereof.
51. Security Only. This Deed of Trust is granted
for security purposes only. Accordingly, except as otherwise permitted by the
Partnership Credit Agreement or as otherwise specifically provided in this
Deed of Trust, neither Beneficiary, Funding Corporation nor the Secured
Parties, as applicable, shall enforce Trustor's rights with respect to the
Trust Property until such time as (a) an Credit Agreement Event of Default
under the Partnership Credit Agreement shall have occurred and be continuing
or (b) a Guarantee Event of Default under the Partnership Guarantee shall have
occurred and be continuing.
52. Release by Beneficiary. Upon written request of
Beneficiary stating that the Debt has been paid and upon surrender by
Beneficiary, Funding Corporation and the Secured Parties of this Deed of Trust
to Trustee for cancellation and retention and upon payment by Trustor of
Trustee's fees and the costs of executing and recording any requested
21
reconveyance, Trustee shall reconvey, without cost or expense to Beneficiary,
Funding Corporation and any of the Secured Parties, to Trustor or to the
person or persons legally entitled thereto, without warranty, any portion of
the Trust Property then held hereunder. The recitals in any such reconveyance
of any matter or fact shall be conclusive proof of the truthfulness thereof.
The grantee in any such reconveyance may be described as the person or persons
legally entitled thereto.
53. Waiver. Trustor waives and releases any rights
or defenses which Trustor might otherwise have (i) under California Code of
Civil Procedure Sections 726, 725a, 580a, 580b, 580c and 580d and California
Civil Code Section 2889, which statutes might otherwise limit or condition
Beneficiary's, Funding Corporation's and/or the Secured Parties' exercise of
certain of Beneficiary's, Funding Corporation's and/or the Secured Parties'
rights and remedies in connection with the enforcement of obligations secured
by a lien on real property or (ii) under any laws now existing or hereafter
enacted providing for any appraisal before sale of a portion of the Trust
Property and (iii) to all rights of redemption, valuation, appraisal, stay of
execution, notice of election to mature or to declare due the Debt and
marshalling in the event of the foreclosure of the liens created under this
Deed of Trust or the exercise of the power of sale granted hereunder. To the
extent, if any, which such laws may be applicable, Trustor waives and releases
any right or defense which Trustor might otherwise have under such provisions
and under any other law of any applicable jurisdiction which might limit or
restrict the effectiveness or scope of any of Trustor's waivers or releases
hereunder.
54. Sole Discretion of Beneficiary or Trustee.
Except as otherwise provided in the Financing Documents, wherever pursuant to
this Deed of Trust, Beneficiary, Funding Corporation, the Secured Parties or
Trustee exercises any right given to them to approve or disapprove, or any
arrangement or term is to be satisfactory to Beneficiary, Funding Corporation,
the Secured Parties or Trustee, the decision of Beneficiary, Funding
Corporation, the Secured Parties or Trustee to approve or disapprove or to
decide that arrangements or terms are satisfactory or not satisfactory shall
be in the sole discretion of Beneficiary, Funding Corporation, the Secured
Parties or Trustee and shall be final and conclusive.
55. Partial Release. Upon receipt of written notice
from Magma to the effect that Magma has exercised the Remaining Area
Termination Option provided in Section 41 of the Ground Lease, (i) Trustor
shall have the right to quitclaim all its right, title and interest in the
Remaining Area (as that term is defined in the Ground Lease) to Magma and to
surrender and deliver possession thereof to Magma as provided in such Section
41 and (ii) Beneficiary, acting on behalf of Funding Corporation and the
Secured Parties, shall promptly execute and deliver, in recordable form, such
documents and instruments as may reasonably be necessary or appropriate to
fully release said Remaining Area from the Security Documents.
IN WITNESS WHEREOF, Trustor has duly executed this
Deed of Trust the day and year first above written.
22
LEATHERS, L.P.,
a California limited partnership
By: CalEnergy Operating Company,
a Delaware corporation,
its general partner
By: /s/ John G. Sylvia
Name: John G. Sylvia
Title: Senior Vice President
23
STATE OF NEW YORK)
)
COUNTY OF NEW YORK)
On June 20, 1996, before me, Patricia Peterson, Notary Public,
personally appeared John G. Sylvia, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Patricia Peterson
- ------------------------------------
Notary/Public
[Signature Page to Deed of Trust, Assignment of Rents]
24
EXHIBIT A
Description of the Resource Easement Area Premises
Lease No. 1:
THE SUBSURFACE OF THAT CERTAIN PORTION OF THE SOUTHWEST QUARTER OF SECTION 25,
TOWNSHIP 11 SOUTH, RANGE 13 EAST, SAN BERNARDINO MERIDIAN, COUNTY OF IMPERIAL,
STATE OF CALIFORNIA, ACCORDING TO OFFICIAL PLAT THEREOF, INCLUDING ALL
MINERALS AND GEOTHERMAL RESOURCES CONTAINED THEREIN, DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID SECTION 25; THENCE EAST ALONG THE
SOUTHERLY LINE THEREOF 1170 FEET; THENCE NORTH 33(Degree) 50' WEST 1130 FEET;
THENCE NORTH 71(Degree) 00' WEST 310 FEET; THENCE WEST 247.7 FEET TO THE WEST
LINE OF SAID SECTION; THENCE SOUTH ALONG THE WESTERLY LINE 1039.6 FEET TO THE
POINT OF BEGINNING. EXCEPTING ANY PORTION OF SAID SECTION NOT LYING SOUTH AND
WEST OF THE ALAMO RIVER.
Lease No. 2:
PARCEL 1:
SECTION 25, TOWNSHIP 11 SOUTH, RANGE 13 EAST, SAN BERNARDINO MERIDIAN, COUNTY
OF IMPERIAL, STATE OF CALIFORNIA, ACCORDING TO OFFICIAL PLAT THEREOF.
EXCEPTING THEREFROM THAT PORTION OF THE SOUTHWEST QUARTER OF SAID SECTION 25,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID SECTION 25; THENCE EAST ALONG THE
SOUTH LINE THEREOF, 1170 FEET; THENCE NORTH 33(Degree)50' WEST, 1130 FEET;
THENCE NORTH 71(Degree)0' WEST, 310 FEET; THENCE WEST 247.7 FEET TO THE WEST
LINE OF SAID SECTION; THENCE SOUTH ALONG SAID WEST LINE, 1039.6 FEET TO THE
POINT OF BEGINNING.
FURTHER EXCEPTING THEREFROM THAT PORTION OF THE SOUTHEAST QUARTER OF SAID
SECTION 25, DESCRIBED AS FOLLOWS:
PARCEL 1, AS SHOWN ON PARCEL MAP M-1901 FILED OCTOBER 6, 1988 IN BOOK 7, PAGE
86 OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF IMPERIAL COUNTY.
PARCEL 2:
THE SOUTHEAST QUARTER OF SECTION 24, IN TOWNSHIP 11 SOUTH, RANGE 13 EAST, SAN
BERNARDINO MERIDIAN, COUNTY OF IMPERIAL, STATE OF CALIFORNIA, ACCORDING TO
OFFICIAL PLAT THEREOF.
PARCEL 3:
THAT PART OF THE NORTHEAST QUARTER OF SECTION 26, IN TOWNSHIP 11 SOUTH, RANGE
13 EAST, SAN BERNARDINO MERIDIAN, COUNTY OF IMPERIAL, STATE OF CALIFORNIA,
ACCORDING TO OFFICIAL PLAT THEREOF, LYING EASTERLY OF A LINE DRAWN FROM THE
SOUTHEAST CORNER OF SAID NORTHEAST QUARTER TO A POINT IN THE NORTH LINE, WHICH
IS 1122 FEET WEST OF THE NORTHEAST CORNER OF SAID NORTHEAST QUARTER.
PARCEL 4:
ALL MINERALS, INCLUDING, WITHOUT LIMITATION, OIL, HYDROCARBON GAS AND OTHER
HYDROCARBON SUBSTANCES AND GEOTHERMAL RESOURCES LYING BELOW THE SURFACE OF
THAT PORTION OF THE SOUTHEAST QUARTER OF SECTION 25, TOWNSHIP 11 SOUTH, RANGE
13 EAST, SAN BERNARDINO MERIDIAN, COUNTY OF IMPERIAL, STATE OF CALIFORNIA,
DESCRIBED AS FOLLOWS:
PARCEL 1, AS SHOWN ON PARCEL MAP M-1901 FILED OCTOBER 6, 1988 IN BOOK 7, PAGE
86 OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF IMPERIAL COUNTY.
AS EXCEPTED AND RESERVED IN THE DEED FROM RIVER RANCH, INC., RECORDED OCTOBER 7,
1988 AS INSTRUMENT NO. 88-16258, IN BOOK 1612, PAGE 399 OF OFFICIAL RECORDS.
Lease No. 3:
THAT CERTAIN PORTION OF THE NORTH HALF OF SECTION 36, TOWNSHIP 11 SOUTH, RANGE
13 EAST, SAN BERNARDINO MERIDIAN, COUNTY OF IMPERIAL, STATE OF CALIFORNIA,
ACCORDING TO OFFICIAL PLAT THEREOF, DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT IN THE SOUTH LINE OF SAID NORTH HALF OF SECTION 36, WHICH
POINT IS NORTH 89(Degree)59'30" WEST, 15 FEET FROM THE SOUTHEAST CORNER
THEREOF; THENCE NORTH 0(Degree)01'30" EAST, 2530.0 FEET PARALLEL WITH AND 15
FEET WEST OF THE EAST LINE TO A POINT, WHICH POINT IS SOUTH 0(Degree)01'30"
WEST 110 FEET AND NORTH 89(Degree)58'30" WEST 15 FEET FROM THE NORTHEAST
CORNER OF SAID SECTION 36; THENCE NORTH 89(Degree)58'30" WEST, 95 FEET TO A
POINT; THENCE NORTH 0(Degree)01'30" EAST, 10 FEET TO A POINT; THENCE NORTH
89(Degree)58'30" WEST, 3719.3 FEET PARALLEL WITH AND 100 FEET SOUTH OF THE
NORTH LINE OF SAID SECTION 36 TO A POINT; WHICH POINT IS SOUTH
89(Degree)58'30" EAST, 1419.0 FEET AND SOUTH 17(Degree)41'30" EAST, 105.0 FEET
FROM THE NORTHWEST CORNER OF SAID SECTION 36; THENCE SOUTH 17(Degree)41'30"
EAST, 76.5 FEET TO A POINT; THENCE SOUTH 36(Degree)36'30" EAST, 1247.0 FEET TO
A POINT; THENCE SOUTH 9(Degree) 49'30" EAST, 749.0 FEET TO A POINT; THENCE
EXHIBIT A TO DEED OF TRUST
(LEATHERS)
Page 2 of 3
SOUTH 61(Degree)10' EAST 268.0 FEET TO A POINT; THENCE SOUTH 29(Degree)47'
EAST, 117.8 FEET TO A POINT IN THE WEST LINE OF THE NORTHEAST QUARTER OF SAID
SECTION 36, WHICH POINT IS NORTH 0(Degree)01' EAST 498.6 FEET FROM THE CENTER
OF SAID SECTION 36; THENCE SOUTH 29(Degree)47' EAST, 574.6 FEET TO A POINT IN
THE SOUTH LINE OF SAID NORTHEAST QUARTER OF SECTION 36, WHICH POINT IS SOUTH
89(Degree)59'30" EAST 285.6 FEET FROM THE CENTER OF SAID SECTION 36; THENCE
SOUTH 89(Degree)59'30" EAST, 2339.5 FEET TO THE POINT OF BEGINNING.
EXHIBIT A TO DEED OF TRUST
(LEATHERS)
Page 3 of 3
EXHIBIT B
Description of the Ground Lease Premises
PARCEL 1, AS SHOWN ON PARCEL MAP M-1901 FILED OCTOBER 6, 1988 IN BOOK 7, PAGE
86 OF PARCEL MAPS IN THE OFFICE OF THE COUNTY RECORDER OF IMPERIAL COUNTY,
BEING A PORTION OF THE SOUTHEAST QUARTER OF SECTION 25, TOWNSHIP 11 SOUTH,
RANGE 13 EAST, SAN BERNARDINO MERIDIAN, IN THE COUNTY OF IMPERIAL, STATE OF
CALIFORNIA.
EXCEPTING THEREFROM ALL MINERALS LYING BELOW THE SURFACE OF SAID LAND,
INCLUDING, WITHOUT LIMITATION, OIL, HYDROCARBON GAS AND OTHER HYDROCARBON
SUBSTANCES AND GEOTHERMAL RESOURCES, BUT WITHOUT THE RIGHT OF SURFACE ENTRY;
AS EXCEPTED AND RESERVED IN THE DEED FROM RIVER RANCH, INC., RECORDED OCTOBER
7, 1988 AS INSTRUMENT NO. 88-16258, IN BOOK 1612, PAGE 399 OF OFFICIAL RECORDS.
EXHIBIT B TO DEED OF TRUST
(LEATHERS)
Page 1 of 1