EXHIBIT 4.2
---------------------------
STERLING CHEMICALS, INC.
TRUSTOR
TO
XXXXXX X. XXXXXXXXX, AN INDIVIDUAL
TRUSTEE
FOR THE BENEFIT OF
NATIONAL CITY BANK, IN ITS CAPACITY AS DESCRIBED HEREIN
BENEFICIARY
--------------------------------------------
DEED OF TRUST, ASSIGNMENT OF LEASES
AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
---------------------------------------------
DATED DECEMBER 19, 2002
THIS INSTRUMENT AFFECTS CERTAIN REAL AND PERSONAL PROPERTY
LOCATED IN GALVESTON COUNTY,
STATE OF TEXAS
----------------------------------------------
RECORDED AND RETURN TO:
XXXXXX XXXXX XXXXXXXX & XXXXXXX LLP
000 XXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
ATTENTION: XXXX X. XXXXXX, ESQ.
THIS INSTRUMENT WAS PREPARED BY THE ABOVE-NAMED ATTORNEY.
DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS DEED OF TRUST, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
AND FIXTURE FILING, dated December 19, 2002 (this "Deed of Trust"), made by
STERLING CHEMICALS, INC., a Delaware corporation (the "Trustor"), having an
address at 0000 Xxxxx Xx., Xxxxx 0000, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000-0000
to XXXXXX X. XXXXXXXXX, an individual, having an address at c/o Floyd, Isgur,
Xxxx and Wahrlich, P.C. 000 Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, as
trustee (the "Trustee") for the benefit of NATIONAL CITY BANK, a national
banking association, having an address at 000 X. Xxxxxxxxxx Xxxxxx, Xxxxx 000X,
Xxxxxxxxxxxx, XX 00000, as indenture trustee (the "Indenture Trustee") for the
benefit of the Holders (the "Holders") of the Senior Secured Notes due 2007 of
the Trustor (the "Beneficiary").
W I T N E S S E T H T H A T:
WHEREAS, the Trustor is on the date of the delivery hereof the owner of
fee title (or easement or leasehold title if otherwise indicated on Exhibit A
hereto) to the parcels of land described in Exhibit A hereto (the "Land") and of
the Improvements (hereinafter defined);
WHEREAS, pursuant to the terms, conditions and provisions of the
Indenture, dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture"), among Trustor, as
issuer, Sterling Chemicals Energy, Inc., as guarantor, and the Indenture
Trustee, as trustee, Trustor issued Senior Secured Notes due 2007 in the
aggregate principal amount of NINETY FOUR MILLION TWO HUNDRED SEVENTY FIVE
THOUSAND AND 00/100 DOLLARS ($94,275,000.00) (together with any Additional Notes
(as defined in the Indenture) issued pursuant to such Indenture in lieu of
payment of interest in cash and any Senior Secured Notes issued pursuant to such
Indenture in replacement thereof or substitution therefor, the "Senior Notes");
WHEREAS, pursuant to that certain Order (the "Confirmation Order")
Confirming Joint Plan of Reorganization Under Chapter 00, Xxxxx 00, Xxxxxx
Xxxxxx Code of Sterling Chemicals Holdings, Inc., et al., Debtors, as modified
(the "Reorganization Plan") entered by the Bankruptcy Court of the Southern
District of Texas, Houston Division on November 20, 2002, each of Sterling
Chemicals, Inc. and the Trustor are authorized to enter into, execute and
deliver the Deed of Trust;
WHEREAS, pursuant to the Confirmation Order and the Reorganization
Plan, the Trustor possesses all of the rights, interests, privileges and
property of Sterling Chemicals, Inc. and is responsible and liable for all
liabilities and obligations of Sterling Chemicals, Inc.; and
WHEREAS, the Trustor has duly authorized the execution, delivery and
performance of this Deed of Trust.
GRANT:
NOW, THEREFORE, for and in consideration of the premises, and of the
mutual covenants herein contained, and in order to secure the full, timely and
proper payment and performance of and compliance with each and every one of the
Secured Obligations (as hereinafter defined), the Trustor hereby irrevocably
grants, bargains, sells, mortgages, warrants, aliens, demises, releases,
hypothecates, pledges, assigns, transfers and conveys to the Trustee, IN TRUST,
WITH POWER OF SALE, for the benefit of Beneficiary and its successors and
assigns, forever, all of the following (collectively, the "Trust Premises"):
(a) Real Estate. All of Trustor's right, title and
interest in, and to all of the Land and all additional lands and
estates therein now owned by the Trustor for use or development with
the Land or any portion thereof, together with all and singular the
tenements, rights, easements, hereditaments, rights of way, privileges,
liberties, appendages and appurtenances now belonging or in any way
pertaining to the Land and such additional lands and estates therein
(including, without limitation, all rights relating to storm and
sanitary sewer, water, gas, electric, railway and telephone services);
all development rights, air rights, riparian rights, water, water
rights, water stock, all rights in, to and with respect to any and all
oil, gas, coal, minerals and other substances of any kind or character
underlying or relating to the Land and such additional lands and
estates therein and any interest therein; all estate, claim, demand,
rights, title or interest of the Trustor in and to any street, road,
highway or alley, vacated or other, adjoining the Land or any part
thereof and such additional lands and estates therein; all strips and
gores belonging, adjacent or pertaining to the Land or such additional
lands and estates (herein collectively referred to as the "Real
Estate");
(b) Improvements. All of Trustor's right, title and
interest in and to all buildings, structures and other improvements now
existing on the Land and any additions and alterations thereto or
replacements thereof, now or hereafter built, constructed or located
upon the Real Estate; and, to the extent that any of the following
items of property constitutes fixtures under applicable laws, all
furnishings, fixtures, fittings, appliances, apparatus, equipment,
machinery, building and construction materials, and other articles of
every kind and nature whatsoever and all replacements thereof, now or
hereafter affixed or attached to, placed upon or used in any way in
connection with the Real Estate and the complete and comfortable use,
enjoyment, occupation, operation, development and/or maintenance of the
Real Estate or such buildings, structures, and other improvements,
including, but not limited to, partitions, furnaces, boilers, oil
burners, radiators and piping, plumbing and bathroom fixtures,
refrigeration, heating, ventilating, air conditioning and sprinkler
systems, other fire prevention and extinguishing apparatus and
materials, vacuum cleaning systems, gas and electric fixtures,
incinerators, compactors, elevators, engines, motors, generators and
all other articles of property which are considered fixtures under
applicable law (such buildings, structures and other improvements and
such other property constituting fixtures under applicable law are
herein collectively referred to as the "Improvements"; the Real Estate
and the Improvements are herein collectively referred to as the
"Property");
(c) Goods. All of Trustor's right, title and interests in
and to all building materials, construction materials, appliances
(including, without limitation, stoves,
2
ranges, ovens, disposals, refrigerators, water fountains and coolers,
fans, heaters, dishwashers, clothes washers and dryers, water heaters,
hood and fan combinations, kitchen equipment, laundry equipment,
kitchen cabinets and other similar equipment), stocks, supplies,
blinds, window shades, drapes, carpets, floor coverings, manufacturing
equipment and machinery, office equipment, growing plants and
shrubberies, control devices, equipment (including window cleaning,
building cleaning, swimming pool, recreational, monitoring, garbage,
pest control and other equipment), motor vehicles, tools, furnishings,
furniture, lighting, non-structural additions to the Real Estate and
Improvements and all other tangible property of any kind or character,
together with all replacements thereof, now or hereafter located on or
in or used or useful in connection with the complete and comfortable
use, enjoyment, occupation, operation, development and/or maintenance
of the Property, regardless of whether or not located on or in the
Property or located elsewhere for purposes of storage, fabrication or
otherwise but excluding any and all "inventory" as defined in the State
Uniform Commercial Code and any other "goods" as defined in the State
Uniform Commercial Code which are not necessary for the operation of
the plants located on the Land (herein collectively referred to as the
"Goods");
(d) Leases. All rights of the Trustor in, to and under
all leases, licenses, occupancy agreements, concessions and other
arrangements, oral or written, now existing or replacements thereof
hereafter entered into, whereby any Person agrees to pay money or any
other consideration for the use, possession or occupancy of, or any
estate in, the Property or any portion thereof or interest therein
(herein collectively referred to as the "Leases"), and the right,
subject to applicable law, upon the occurrence of any Event of Default
hereunder, to receive and collect the Rents (as hereinafter defined)
paid or payable thereunder;
(e) Plans. All rights of the Trustor in and to all plans
and specifications, designs, drawings and other information, materials,
and matters heretofore or hereafter prepared relating to the
Improvements or any construction on the Real Estate (herein
collectively referred to as, the "Plans");
(f) Permits. All rights of the Trustor, to the extent
assignable, in, to and under all permits, franchises, licenses,
approvals and other authorizations respecting the use, occupation and
operation of the Property and every part thereof and respecting any
business or other activity conducted on or from the Property, and any
product or proceed thereof or therefrom, including, without limitation,
all building permits, certificates of occupancy and other licenses,
permits and approvals issued by governmental authorities having
jurisdiction (collectively, the "Permits");
(g) Contracts. All right, title and interest of the
Trustor, to the extent assignable, in and to all certificates,
warranties, appraisals, engineering, environmental, soils, insurance
and other reports and studies, books, records, correspondence, files
and advertising materials, now or hereafter obtained or entered into,
as the case may be, pertaining to the construction, use, occupancy,
possession, operation, management, leasing, maintenance and/or
ownership of the Property (but only to the extent necessary
3
or appropriate for the continued operation of the plants located on the
Land and excluding in any event any such items constituting or in any
way relating to "accounts" or "inventory" as those terms are defined in
the State Uniform Commercial Code) and all right, title and interest of
the Trustor therein (collectively, the "Contracts");
(h) Leases of Furniture, Furnishings and Equipment. All
right, title and interest of the Trustor as lessee in, to and under any
leases of furniture, furnishings, equipment and any other Goods now or
hereafter installed in or at any time used in connection with the
Property;
(i) Rents. All rents, issues, profits, royalties, avails,
income and other benefits other than accounts receivable derived or
owned, directly or indirectly, by the Trustor from the Property,
including, without limitation, all rents and other consideration
payable by tenants, claims against guarantors, and any cash or other
securities deposited to secure performance by tenants, under the Leases
(herein collectively referred to as the "Rents"); and
(j) Proceeds. All proceeds of the conversion, voluntary
or involuntary of any of the foregoing Trust Premises into cash or
liquidated claims, including, without limitation, proceeds of insurance
and condemnation awards (herein, collectively referred to as the
"Proceeds");
PROVIDED, HOWEVER, the Trust Premises shall not include any rights
arising under any contracts, instruments, licenses or other documents as to
which the grant of a lien and/or security interest would constitute a violation
of a valid and enforceable restriction in favor of a third party on such grant,
unless and until any required consents shall have been obtained;
AND, without limiting any of the other provisions of this Deed of
Trust, the Trustor expressly grants to the Beneficiary, as secured party, a
security interest in all of those portions of the Trust Premises which are or
may be subject to the State Uniform Commercial Code provisions applicable to
secured transactions subject only to the Permitted Encumbrances;
TO HAVE AND TO HOLD the Trust Premises unto the Trustee and the
successors, successors in trust and assigns of the Trustee for the benefit of
the Beneficiary, its successors and assigns, forever, subject only to the
Permitted Encumbrances;
FURTHER to secure the full, timely and proper payment and performance
of the Secured Obligations, the Trustor hereby covenants and agrees with and
warrants to the Trustee and the Beneficiary as follows:
ARTICLE I
COVENANTS AND AGREEMENTS OF THE TRUSTOR
SECTION 1.1 Payment of Secured Obligations. (i) The Trustor
agrees that:
4
(a) it will duly and punctually pay and perform or cause
to be paid and performed each of the Secured Obligations at the time and in
accordance with the terms of the Indenture and the Senior Notes; and
(b) when and as due and payable from time to time in
accordance with the terms hereof or of any other Security Document, pay and
perform, or cause to be paid and performed, all other Secured Obligations.
SECTION 1.2 Title to Trust Premises, etc. The Trustor
represents and warrants to and covenants with the Trustee and the Beneficiary
that:
(a) except as otherwise permitted by the terms of the
Indenture, as of the date hereof and at all times hereafter while this Deed of
Trust is outstanding, the Trustor (i) is and shall be the absolute owner of the
legal and beneficial title to the applicable interest in the Property and to all
other property included in the Trust Premises, and (2) has and shall have good
and indefeasible title in fee simple absolute, or good and sufficient easement
or leasehold title, as currently represented in the granting clause as of the
date hereof, to the Property; provided, however, that the portion of the Land
described on Part III of Exhibit A is hereby excluded from these covenants,
subject in each case only to this Deed of Trust, the Permitted Liens (as defined
in the Indenture) and the encumbrances set forth in Exhibit B hereto
(collectively, the "Permitted Encumbrances");
(b) the Trustor has good and lawful right, power and
authority to execute this Deed of Trust and to convey, transfer, assign,
mortgage and grant a security interest in the Trust Premises, all as provided
herein;
(c) this Deed of Trust has been duly executed,
acknowledged and delivered on behalf of the Trustor, all consents and other
actions required to be taken by the officers, directors, shareholders and
partners, as the case may be, of the Trustor have been duly and fully given and
performed, all governmental and court approvals required have been obtained by
Trustor, and this Deed of Trust constitutes the legal, valid and binding
obligation of the Trustor, enforceable against the Trustor in accordance with
its terms; and
(d) the Trustor, at its expense, will warrant and defend
the Trustee and the Beneficiary and any purchaser under the power of sale herein
or at any foreclosure sale such title to the Trust Premises and the first deed
of trust lien and first perfected security interest of this Deed of Trust
thereon and therein against all claims and demands and will maintain, preserve
and protect such lien and security interest and will keep this Deed of Trust a
valid, direct, first deed of trust lien of record on the Property and a first
perfected security interest in the Trust Premises other than the Property,
subject only to the Permitted Encumbrances.
SECTION 1.3 Title Insurance.
SECTION 1.3.1 Title Insurance Policy. Concurrently with the
execution and delivery of this Deed of Trust, the Trustor has obtained and
delivered to the Beneficiary a loan policy or policies of title insurance in an
amount, and in form and substance, reasonably satisfactory to the Beneficiary
naming the Beneficiary as the insured, insuring the title to and the
5
first deed of trust lien of this Deed of Trust on the portion of the Land
described on Exhibit A with endorsements reasonably requested by the
Beneficiary. The premiums and other charges due in connection with the issuance
of such policy or policies of title insurance shall be shared equally by Trustor
and Beneficiary.
SECTION 1.3.2 Title Insurance Proceeds. All proceeds received
by and payable to the Beneficiary for any loss under the loan policy or policies
of title insurance delivered to the Beneficiary pursuant to Section 1.3.1, or
under any policy or policies of title insurance delivered to the Beneficiary in
substitution therefor or replacement thereof, shall be the property of the
Beneficiary and shall be applied by the Beneficiary in accordance with the
provisions of Section 2.3.
SECTION 1.4 Recordation. The Trustor, at its expense, will at
all times cause this Deed of Trust and any instruments amendatory hereof or
supplemental hereto and any instruments of assignment hereof or thereof (and any
appropriate financing statements or other instruments and continuations
thereof), and each other instrument delivered in connection with the Indenture,
the Senior Notes or any Security Documents and intended thereunder to be
recorded, registered and filed, to be kept recorded, registered and filed, in
such manner and in such places, and will pay all such recording, registration,
filing fees, taxes and other charges, and will comply with all such statutes and
regulations as may be required by law in order to establish, preserve, perfect
and protect the lien and security interest of this Deed of Trust as a valid,
direct, first deed of trust lien on the Property and first perfected security
interest in the Trust Premises other than the Property, subject only to the
Permitted Encumbrances. The Trustor will pay or cause to be paid, and will
indemnify the Trustee and the Beneficiary in respect of, all taxes (including
interest and penalties) at any time payable in connection with the filing and
recording of this Deed of Trust and any and all supplements and amendments
hereto.
SECTION 1.5 Payment of Impositions, etc. Subject to Section
1.8 (relating to permitted contests), the Trustor will pay or cause to be paid
before the same would become delinquent and before any fine, penalty, interest
or cost may be added for non-payment, all taxes, assessments, water and sewer
rates, charges, license fees, inspection fees and other governmental levies or
payments, of every kind and nature whatsoever, general and special, ordinary and
extraordinary, unforeseen as well as foreseen, which at any time may be
assessed, levied, confirmed, imposed or which may become a lien upon the Trust
Premises, or any portion thereof, or which are payable with respect thereto, or
upon the rents, issues, income or profits thereof, or on the occupancy,
operation, use, possession or activities thereof, whether any or all of the same
be levied directly or indirectly or as excise taxes or as income taxes, and all
taxes, assessments or charges which may be levied on the Secured Obligations, or
the interest thereon (collectively, the "Impositions"). The Trustor will deliver
to the Beneficiary, upon request, copies of official receipts or other
satisfactory proof evidencing such payments.
SECTION 1.6 Insurance and Legal Requirements. Subject to
Section 1.8 (relating to permitted contests), the Trustor, at its expense, will
comply in all material respects, or cause compliance in all material respects
with
(a) all provisions of any insurance policy covering or
applicable to the Trust Premises or any part thereof, all requirements of the
issuer of any policy, and all orders, rules,
6
regulations and other requirements of the National Board of Fire Underwriters
(or any other body exercising similar functions) applicable to or affecting the
Trust Premises or any part thereof or any use or condition of the Trust Premises
or any part thereof (collectively, the "Insurance Requirements"); and
(b) all laws, including Environmental Laws, statutes,
codes, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, permits, licenses, authorizations, directions and requirements of
all governments, departments, commissions, boards, courts, authorities,
agencies, officials and officers, foreseen or unforeseen, ordinary or
extraordinary, which now or at any time hereafter may be applicable to the Trust
Premises or any part thereof, or any of the adjoining sidewalks, curbs, vaults
and vault space, if any, streets or ways, or any use or condition of the Trust
Premises or any part thereof (collectively, the "Legal Requirements");
noncompliance of which could reasonably be expected to cause a Material
Adverse Effect.
SECTION 1.7 Security Interests, etc. The Trustor will not
directly or indirectly create or permit or suffer to be created or to remain,
and will promptly discharge or cause to be discharged, any deed of trust,
mortgage, encumbrance or charge on, pledge of, security interest in or
conditional sale or other title retention agreement with respect to or any other
lien on or in the Trust Premises or any part thereof or the interest of the
Trustor or the Beneficiary therein, or any Proceeds thereof or Rents or other
sums arising therefrom, other than (a) Permitted Encumbrances, and (b) liens of
mechanics, materialmen, suppliers or vendors or rights thereto incurred in the
ordinary course of the business of the Trustor for sums not yet due or any such
liens or rights thereto which are at the time being contested as permitted by
Section 1.8. The Trustor will not postpone the payment of any sums for which
liens of mechanics, materialmen, suppliers or vendors or rights thereto have
been incurred (unless such liens or rights thereto are at the time being
contested as permitted by Section 1.8), for more than 60 days after the
completion of the action giving rise to such liens or rights thereto.
SECTION 1.8 Permitted Contests. The Trustor at its expense
may contest, or cause to be contested, by appropriate legal proceedings
conducted in good faith and with due diligence, the amount or validity or
application, in whole or in part, of any Imposition, Legal Requirement, or
Insurance Requirement or lien of a mechanic, materialman, supplier or vendor,
provided that, (a) in the case of an unpaid Imposition, lien, encumbrance or
charge, such proceedings shall suspend the collection thereof from the Trustor,
the Beneficiary, and the Trust Premises (including any rent or other income
therefrom) and shall not materially interfere with the payment of any such rent
or income, (b) neither the Trust Premises nor any rent or other income therefrom
nor any part thereof or interest therein would be in any material danger of
being sold, forfeited, lost, impaired or interfered with, (c) in the case of a
Legal Requirement, neither the Trustor nor the Beneficiary would be in material
danger of any material civil or any criminal liability for failure to comply
therewith, (d) the Trustor shall have furnished such security, if any, as may be
required in the proceedings or as may be reasonably requested by Beneficiary,
(e) the non-payment of the whole or any part of any Imposition will not result
in the delivery of a tax deed to the Trust Premises or any part thereof because
of such non-payment, (f) the payment of any sums required to be paid with
respect to the Senior Notes or under this Deed
7
of Trust (other than any unpaid Imposition, lien, encumbrance or charge at the
time being contested in accordance with this Section 1.8) shall not be
interfered with or otherwise affected, and (g) in the case of any Insurance
Requirement, the failure of the Trustor to comply therewith shall not affect the
validity of any such insurance required to be maintained by the Trustor under
Section 2.1 and (h) that adequate reserves, determined in accordance with GAAP,
shall have been set aside on the Trustor's books.
SECTION 1.9 Leases. The Trustor represents and warrants to
the Trustee and the Beneficiary that, as of the date hereof, there are no
written or oral leases or other agreements of any kind or nature, other than the
Permitted Encumbrances, relating to the occupancy or use of any portion of the
Trust Premises by any Person other than the Trustor. Except as is permitted by
the Indenture, the Senior Notes or any of the Security Documents, the Trustor
will not enter into any such written or oral lease or other agreement with
respect to any portion of the Property without first obtaining the written
consent of the Beneficiary.
SECTION 1.10 Compliance with Instruments. The Trustor at its
expense will promptly comply in all material respects with all rights of way or
use, privileges, franchises, servitudes, licenses, easements, tenements,
hereditaments and appurtenances forming a part of the Property and all
instruments creating or evidencing the same, in each case, to the extent
compliance therewith is required of the Trustor under the terms thereof. The
Trustor will not take any action which may result in a forfeiture or termination
of the rights afforded to the Trustor under any such instruments, and will not,
without the prior written consent of the Beneficiary, amend any such instruments
in any manner adverse to the Beneficiary and the Holders in any material
respect, except as is permitted by the Indenture, the Senior Notes or any
Security Document.
SECTION 1.11 Maintenance and Repair, etc. Subject to the
provisions of Section 1.12, the Trustor will keep or cause to be kept all
presently and subsequently erected or acquired Improvements and the sidewalks,
curbs, vaults and vault space, if any, located on or adjoining the same, and the
streets and the ways adjoining the same, in good and substantial order and
repair and in such a fashion that neither the value nor utility of the Trust
Premises will be materially diminished, and, at its sole cost and expense, will
promptly make or cause to be made all necessary and appropriate repairs,
replacements and renewals thereof, whether interior or exterior, structural or
nonstructural, ordinary or extraordinary, foreseen or unforeseen, so that its
business carried on in connection therewith may be properly conducted at all
times. The Trustor at its expense will do or cause to be done all shoring of
foundations and walls of any building or other Improvements on the Property and
(to the extent permitted by law) of the ground adjacent thereto, and every other
act necessary and appropriate for the preservation and safety of the Property by
reason of or in connection with any excavation or other building operation upon
the Property and upon any adjoining property.
SECTION 1.12 Alterations, Additions, etc. So long as no Event
of Default shall have occurred and be continuing, the Trustor shall have the
right at any time and from time to time to make or cause to be made alterations
of and additions to the Property or any part thereof, provided that any
alteration or addition: (a) shall not materially change the general character or
the use of the Property or materially reduce the fair market value thereof below
its value
8
immediately before such alteration or addition, or materially impair the
usefulness of the Property; (b) is effected with due diligence, in a good and
workmanlike manner and in compliance in all material respects with all Legal
Requirements and Insurance Requirements; (c) subject to Section 1.8 is promptly
and fully paid for , or caused to be paid for, by the Trustor; and (d) is made,
in case the estimated cost of such alteration or addition exceeds U.S.
$1,000,000, under the supervision of a qualified architect or engineer or
another professional.
SECTION 1.13 Acquired Property Subject to Lien. Subject to
the Permitted Encumbrances and except as otherwise permitted by the Indenture,
all property at any time acquired by the Trustor and provided or required by
this Deed of Trust to be or become subject to the lien and security interest
hereof, whether such property is acquired by exchange, purchase, construction or
otherwise, shall forthwith become subject to the lien and security interest of
this Deed of Trust without further action on the part of the Trustor or the
Beneficiary. Upon written request of Beneficiary, the Trustor, at its expense,
will execute and deliver to the Beneficiary (and will record and file as
provided in Section 1.4) an instrument supplemental to this Deed of Trust
reasonably satisfactory in substance and form to the Beneficiary, whenever such
an instrument is necessary under applicable law to subject to the lien and
security interest of this Deed of Trust all right, title and interest of the
Trustor in and to all property provided or required by this Deed of Trust to be
subject to the lien and security interest hereof.
SECTION 1.14 Assignment of Rents. The assignment, grant and
conveyance of the Leases and Rents, Proceeds and other rents, income proceeds
and benefits of the Trust Premises contained in the Granting Clause of this Deed
of Trust shall constitute an absolute, present and irrevocable assignment, grant
and conveyance, provided, however, that permission is hereby given to the
Trustor, so long as no sale, foreclosure or other proceeding pursuant to Article
III hereof to convey any interest in the Trust Premises has been commenced (each
of the foregoing, a "Triggering Event"), to: (i) collect, receive and apply such
Rents, Proceeds and other rents, income, proceeds and benefits from the Trust
Premises as they become due and payable, but not further in advance thereof than
is customary, and in accordance with all of the other terms, conditions and
provisions hereof, of the Indenture, the Security Documents, Leases, Contracts
and any other agreements and/or instruments with respect to which such payments
are made or such other benefits are conferred; or (ii) pledge to the
Administrative Agent the right to collect, receive and apply such Rents,
Proceeds and other rents, income, proceeds and benefits to the extent same
constitute Proceeds of Indenture Collateral that are Credit Agreement Collateral
(as each such phrase is defined in the Senior Debt Intercreditor Agreement).
Upon the occurrence and continuance of a Triggering Event, such permission under
subsection (i) above shall terminate immediately and automatically, without
notice to the Trustor or any other Person except as required by law, and shall
not be reinstated without the express written consent of the Beneficiary and
upon the occurrence of a Disposition such permission under subsection (ii) above
shall terminate immediately and automatically with respect to any Rents,
Proceeds and other rents, income, proceeds and benefits from Trust Premises that
are the subject of a Disposition, without notice to the Trustor or any other
Person except as required by law. Such assignment shall be fully effective
without any further action on the part of the Trustor, the Trustee, or the
Beneficiary, and the Beneficiary shall be entitled, at its option, upon the
occurrence of a Triggering Event, to collect, receive and apply all Rents,
Proceeds and all other rents, income, proceeds and benefits from the Trust
Premises, including all right, title and
9
interest of the Trustor in any escrowed sums or deposits or any portion thereof
or interest therein, whether or not the Trustee or the Beneficiary takes
possession of the Trust Premises or any part thereof. The Trustor further grants
to the Beneficiary the right, at the Beneficiary's option, upon the occurrence
and continuance of a Triggering Event hereunder, to:
(a) enter upon and take possession of the Property for
the purpose of collecting Rents, Proceeds and said rents, income, proceeds and
other benefits;
(b) dispossess by the customary summary proceedings any
tenant, purchaser or other Person that is not a party to a Permitted Lease (as
defined in Section 1.22 below);
(c) let or convey the Trust Premises or any portion
thereof or any interest therein; and
(d) apply Rents, Proceeds and such other rents, income,
proceeds and other benefits of the Trust Premises, after the payment of all
necessary fees, charges and expenses, on account of the Secured Obligations in
accordance with Section 3.11.
Notwithstanding the foregoing, if Trustor has pledged to the Administrative
Agent the right to collect, receive and apply such Rents, Proceeds and other
rents, income, proceeds and benefits to the extent same constitute Proceeds of
Indenture Collateral that are Credit Agreement Collateral, then permission is
given to Administrative Agent to continue to collect, receive and apply same
until a Disposition occurs affecting the Trust Premises from which such Rents,
Proceeds and other rents, income, proceeds and benefits are generated. Nothing
in this Section 1.14 shall be deemed to modify any of the provisions of the
Senior Debt Intercreditor Agreement.
SECTION 1.15 No Claims Against the Trustee or the
Beneficiary. Nothing contained in this Deed of Trust shall constitute any
consent or request by the Trustee or the Beneficiary, express or implied, for
the performance of any labor or the furnishing of any materials or other
property in respect of the Property or any part thereof, or be construed to
permit the making of any claim against the Trustee or the Beneficiary in respect
of labor or services or the furnishing of any materials or other property or any
claim that any lien based on the performance of such labor or the furnishing of
any such materials or other property is prior to the lien and security interest
of this Deed of Trust. ALL CONTRACTORS, SUBCONTRACTORS, VENDORS AND OTHER
PERSONS DEALING WITH THE PROPERTY, OR WITH ANY PERSONS INTERESTED THEREIN, ARE
HEREBY ADVISED TO TAKE NOTICE OF THE PROVISIONS OF THIS SECTION.
SECTION 1.16 Indemnification. The Trustor will protect,
indemnify, save harmless and defend the Trustee and the Beneficiary, the Holders
and each of their respective officers, directors, shareholders, employees,
representatives and agents (collectively, the "Indemnified Parties" and
individually, an "Indemnified Party"), from and against any and all liabilities,
obligations, claims, damages, penalties, causes of action, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) imposed
upon or incurred by or asserted against any Indemnified Party by reason of (a)
ownership of an interest in this Deed of Trust, the Indenture, the Senior Notes
or any of the Security Documents, (b) any accident, injury to or death of
persons or loss of or damage to or loss of the use of property occurring on or
about the Property or any part thereof or the adjoining sidewalks, curbs, vaults
10
and vault spaces, if any, streets, alleys or ways, (c) any use, non-use or
condition of the Trust Premises or any part thereof or the sidewalks, curbs,
vaults and vault spaces, if any, streets, alleys or ways adjoining the Property,
(d) any failure on the part of the Trustor to perform or comply with any of the
terms of this Deed of Trust the Indenture, the Senior Notes or any of the other
Security Documents, (e) performance of any labor or services or the furnishing
of any materials or other property in respect of the Trust Premises or any part
thereof made or suffered to be made by or on behalf of the Trustor, (f) any
negligence or tortious act on the part of Trustor or any of its agents,
contractors, lessees, licensees or invitees, (g) any work in connection with any
alterations, changes, new construction or demolition of or additions to the
Trust Premises, or (h)(i) any Hazardous Material on, in, under or affecting all
or any portion of the Property, the groundwater, or any surrounding areas, (ii)
any misrepresentation, inaccuracy or breach of any warranty, covenant or
agreement contained or referred to in Sections 1.20 and 1.21, (iii) any
violation or claim of violation by the Trustor of any Environmental Laws, or
(iv) the imposition of any lien for damages caused by or the recovery of any
costs for the cleanup, release or threatened release of any Hazardous Material,
except to the extent that any of the matters described in subsections (a)-(h)
arise out of the gross negligence, unlawful acts or willful misconduct of any
Indemnified Party. THE TRUSTEE SHALL NOT BE LIABLE FOR ANY ACT OR OMISSION OR
ERROR OF JUDGMENT IN CONNECTION WITH THIS DEED OF TRUST, IT BEING THE INTENT OF
THE PARTIES HERETO THAT THE TRUSTEE SHALL NOT BE LIABLE FOR THE TRUSTEE'S SOLE
OR CONTRIBUTORY NEGLIGENCE. If any action or proceeding be commenced, to which
action or proceeding any Indemnified Party is made a party by reason of the
execution of this Deed of Trust, the Indenture, the Senior Notes, or any of the
other Security Documents, or in which it becomes necessary to defend or uphold
the lien of this Deed of Trust, all sums paid by the Indemnified Parties, for
the expense of any litigation to prosecute or defend the rights and lien created
hereby or otherwise, shall be paid by the Trustor to such Indemnified Parties,
as the case may be, as hereinafter provided. The Trustor will pay and save the
Indemnified Parties harmless against any and all liability with respect to any
intangible personal property tax or similar imposition of the State or any
subdivision or authority thereof now or hereafter in effect, to the extent that
the same may be payable by the Indemnified Parties in respect of this Deed of
Trust, the Indenture, the Senior Notes or any other Secured Obligation. All
amounts payable to the Indemnified Parties under this Section 1.16 shall be
deemed indebtedness secured by this Deed of Trust any such amounts which are not
paid within ten (10) days after written demand therefor by any Indemnified Party
shall bear interest at the rate provided for in the Indenture and the Senior
Notes from the date of such demand. In case any action, suit or proceeding is
brought against any Indemnified Party by reason of any such occurrence, the
Trustor, upon request of such Indemnified Party, will, at the Trustor's expense,
resist and defend such action, suit or proceeding or cause the same to be
resisted or defended by counsel designated by the Trustor and approved by such
Indemnified Party. The obligations of the Trustor under this Section 1.16 shall
survive any discharge or reconveyance of this Deed of Trust and payment in full
of the Secured Obligations.
SECTION 1.17 No Credit for Payment of Taxes. The Trustor
shall not be entitled to any credit against the Secured Obligations by reason of
the payment of any tax on the Trust Premises or any part thereof or by reason of
the payment of any other Imposition, and shall
11
not apply for or claim any deduction from the taxable value of the Trust
Premises or any part thereof by reason of this Deed of Trust.
SECTION 1.18 No Transfer of the Trust Premises. Except as is
provided in the Indenture, the Senior Notes or the Security Documents, and
except for the Permitted Encumbrances, the Trustor shall not, without the prior
written consent of the Beneficiary, which consent shall not be unreasonably
withheld, conditioned or delayed, (i) sell, convey, assign or otherwise transfer
the Trust Premises or any portion of the Trustor's interest therein or (ii)
further encumber the Trust Premises or permit the Trust Premises to become
encumbered by any lien, claim, security interest or other indebtedness of any
kind or nature other than the Permitted Encumbrances.
SECTION 1.19 Security Agreement. With respect to the items of
personal property and fixtures referred to and described in the Granting Clause
of this Deed of Trust and included as part of the Trust Premises, this Deed of
Trust is hereby made and declared to be a security agreement encumbering each
and every item of such personal property and fixtures included as part of the
Trust Premises now or hereafter owned by Trustor, in compliance with the
provisions of the Uniform Commercial Code as enacted in the State. In this
respect (and notwithstanding the conveyance to the Trustee rather than directly
to the Beneficiary as provided in this Deed of Trust), Trustor, as "Debtor",
expressly grants to Beneficiary, as "Secured Party", a security interest in and
to all of the property now or hereafter owned by Trustor which constitutes the
personal property and fixtures included as part of the Trust Premises
hereinabove referred to and described in this Deed of Trust, including all
extensions, accessions, additions, improvements, betterments, renewals,
replacements and substitutions thereof or thereto, and all proceeds from the
sale or other disposition thereof. Trustor agrees that Beneficiary may file this
Deed of Trust, or a reproduction thereof, in the real estate records or other
appropriate index, as, and this Deed of Trust shall be deemed to be, a financing
statement filed as a fixture filing in accordance with the laws of the State.
Any reproduction of this Deed of Trust or of any other security agreement or
financing statement executed by Trustor shall be sufficient as a financing
statement. In addition, Trustor agrees to execute and deliver to Beneficiary,
upon Beneficiary's request, financing statements, as well as extensions,
renewals, and amendments thereof, and reproductions of this Deed of Trust, in
such form as Beneficiary may reasonably require to perfect a security interest
with respect to said items. Trustor shall pay all costs of filing such financing
statements and any extensions, renewals, amendments and releases thereof, and
shall pay all reasonable costs and expenses of any record searches for financing
statements Beneficiary may reasonably require. Except as is provided in the
Indenture, the Senior Notes or the Security Documents, and except for the
Permitted Encumbrances, without the prior written consent of Beneficiary,
Trustor shall not create or suffer to be created pursuant to the Uniform
Commercial Code any other security interest in the above-described personal
property and fixtures, including any replacements and additions thereto. Upon
the occurrence and continuance of an Event of Default under this Deed of Trust,
the Beneficiary shall have and shall be entitled to exercise any and all of the
rights and remedies (i) as prescribed in this Deed of Trust, or (ii) as
prescribed by general law, or (iii) as prescribed by the specific statutory
provisions now or hereafter enacted and specified in said Uniform Commercial
Code, all at Beneficiary's sole election. Trustor and Beneficiary agree that the
filing of any financing statements in the records normally having to do with
personal property shall not in any way
12
affect the agreement of Trustor and Beneficiary that everything located in, on
or about, or used or intended to be used with or in connection with the use,
operation or enjoyment of, the Trust Premises, which is described or reflected
as a fixture in this Deed of Trust, is, and at all times and for all purposes
and in all proceedings, both legal and equitable, shall be, regarded as part of
the Real Estate conveyed hereby. Trustor warrants that Trustor's correct name,
identity, state of incorporation and address are as set forth herein. Trustor
agrees that it shall provide Trustee and Beneficiary with thirty (30) days prior
written notice of any change in Trustor's name, identity, state of incorporation
or address. The mailing address of the Beneficiary from which information may be
obtained concerning the security interest created herein is also set forth
herein. This information hereof is provided in order that this Deed of Trust
shall comply with the requirements of the Uniform Commercial Code as enacted in
the State for instruments to be filed as financing statements. In accordance
with the laws of the State, this Deed of Trust shall remain effective as a
fixture filing until this Deed of Trust is released or satisfied of record or
its effectiveness otherwise terminates as to the Trust Premises.
SECTION 1.20 Representations and Warranties. In order to
induce the Beneficiary to enter into this Deed of Trust, the Indenture and the
other Security Documents, the Trustor agrees that all of the representations and
warranties of Trustor set forth in the Indenture are incorporated into this Deed
of Trust by reference as if fully set forth herein.
SECTION 1.21 Trustor's Covenants. In order to induce the
Beneficiary to accept this Deed of Trust and enter into the Indenture and the
other Security Documents, the Trustor agrees that all of the covenants of
Trustor set forth in the Indenture are incorporated in this Deed of Trust by
reference as if fully set forth herein.
SECTION 1.22 Attornment. Beneficiary, by its acceptance of
this Deed of Trust, hereby acknowledges and agrees that the liens granted herein
are or will be subject to the rights of certain lessees under: (i) certain
Leases in existence on the date hereof; (ii) Leases entered into by Trustor
after the date hereof provided that Trustor obtains the written consent of
Beneficiary prior to entering into such Leases; and (iii) Leases entered into by
Trustor after the date hereof without the consent of Trustor provided that such
Lease is described in item 19 of the definition of Permitted Lien set forth in
the Indenture (each of the Leases described in clauses (i) (ii) and (iii), a
"Permitted Lease"). The rights of the tenants under the Permitted Leases shall
not be adversely affected by the exercise by Beneficiary of any of its rights
hereunder, nor shall any such tenant be in any way deprived of its rights under
the applicable Permitted Lease except in accordance with the terms of such
lease. In the event that Beneficiary succeeds to the interest of Trustor under a
Permitted Lease, such Permitted Lease shall not be terminated or affected
thereby except as set forth therein, and any sale of the applicable leased
premises by Beneficiary or pursuant to the judgment of any court in an action to
enforce the remedies provided for in this Deed of Trust shall be made subject to
such Permitted Lease and the rights of such tenant expressly set forth
thereunder. If Beneficiary succeeds to the interests of Trustor in and to the
applicable leased premises or under such Permitted Lease or enters into
possession of such leased premises, the Beneficiary, and such tenants, shall be
bound to each other under all of the express terms, covenants and conditions of
such Permitted Lease, as if the Beneficiary was originally the Trustor as lessor
thereunder.
13
SECTION 1.23 Inspections. Trustor will permit the Trustee or
the Beneficiary, or the agents of either of them, to enter upon the Property and
all parts thereof, for the purpose of investigating and inspecting the condition
and operation thereof and of the other Trust Premises. If an Event of Default
has occurred and is continuing, then such investigation and inspection shall be
performed at the cost and expense of Trustor.
ARTICLE II
INSURANCE; DAMAGE, DESTRUCTION OR TAKING, ETC.
SECTION 2.1 Insurance.
SECTION 2.1.1 Risks to be Insured. The Trustor will, at its
expense, maintain or cause to be maintained: (a) insurance with respect to the
Improvements against loss or damage by fire, lightning and such other risks as
are included in standard "all-risk" policies, in amounts sufficient to prevent
the Trustor and the Beneficiary from becoming a co-insurer of any partial loss
under the applicable policies, but in any event in amounts not less than the
then full insurable value (accrual replacement value) of the Improvements
(subject to commercially reasonable deductibles), as determined by the Trustor
in accordance with generally accepted insurance practice and approved by the
Beneficiary (provided that: (x) Beneficiary's approval shall be deemed given if
Beneficiary fails to respond within five (5) business days after receipt of a
request for Beneficiary's approval clearly stating that Beneficiary's failure to
respond within the aforesaid period shall be deemed Beneficiary's approval; and
(y) Beneficiary, by its acceptance of this Deed of Trust, approves the amount of
insurance maintained by Trustor on the date hereof pursuant to this clause (a)),
(b) comprehensive public liability, including bodily injury and product
liability and property damage, insurance, with personal injury endorsements,
applicable to the Trust Premises in such amounts as are customarily carried by
Persons operating similar properties in the same general locality, but in any
event with a combined single limit of not less than Twenty Million Dollars
($20,000,000) per occurrence, (c) explosion insurance in respect of any steam
and pressure boilers and similar properties in the same general locality, but in
any event in an amount not less than Twenty Million Dollars ($20,000,000), (d)
business interruption insurance (including added expense coverage against all
insurable perils for a period of not fewer than twelve (12) months (subject to a
reasonable aggregate deductible), (e) worker's compensation insurance to the
full extent required by applicable law for all employees of the Trustor engaged
in any work on or about the Property, (f) employer's liability insurance with a
limit of not less than Ten Million Dollars ($10,000,000) for each occurrence,
and (g) all-risk, builders' risk insurance with respect to the Property during
any period during which there is any construction work being performed, against
loss or damage by fire or other risks, including vandalism, malicious mischief
and sprinkler leakage, as are included in so-called "extended coverage" clauses
at the time available and (h) such other insurance with respect to the Property
in such amounts and against such insurable hazards as the Beneficiary from time
to time my reasonably require by written notice to the Trustor and is then being
required by lenders of facilities similar to the Trust Premises, which
facilities are located in a similar geographic area to the Trust Premises.
Notwithstanding the foregoing, to the extent any insurance required herein is no
longer available Trustor shall not be in default of its obligations hereunder if
it fails to obtain such unavailable insurance. In addition, to the extent it
becomes commercially
14
unreasonable to maintain any such insurance (which shall be true if such
insurance is: (i) not being renewed or obtained by substantially all owners of
facilities similar to the Trust Premises which are located in a similar
geographic area to the Trust Premises; and (ii) the Board of Directors of
Trustor resolves that such insurance is not available on commercially reasonable
terms) then Trustor shall not be required to maintain such insurance until the
earlier of: (A) the time such insurance is available on commercially reasonable
terms; or (B) one (1) year from the date of the resolution of the Board of
Directors of Trustor (subject to the extension of such waiver if the Board of
Directors of Trustor issues a new resolution confirming the unavailability of
such insurance on commercially reasonable terms).
SECTION 2.1.2 Policy Provisions. All insurance maintained by
the Trustor pursuant to Section 2.1.1 shall: (a) be provided by insurers that
are approved and licensed to conduct business or authorized to write insurance
in the State of Texas with a minimum Best rating of "A-VIII" (provided that,
with respect to the insurance maintained by Trustor on the date hereof, Trustor
may maintain or renew such insurance with its current insurers if the Financial
Size Category ("FSC") of such insurer is no lower than the lower of VIII or such
insurers FSC on the date hereof); (b) (except for worker's compensation
insurance) list the Beneficiary, as an additional insured as its interest may
appear; (c) (except for worker's compensation and public liability insurance)
provide that the proceeds of any losses shall be adjusted by the Trustor subject
to the approval of the Beneficiary in the event the proceeds shall exceed
$1,000,000, and shall be payable to the Beneficiary, to be held and applied as
provided in Section 2.3; (d) include effective waivers by the insurer of all
rights of subrogation against any named insured, the indebtedness secured by
this Deed of Trust and the Trust Premises and all claims for insurance premiums
against the Beneficiary; (e) (except for worker's compensation and public
liability insurance) provide that any losses shall be payable notwithstanding
(i) any act, failure to act or negligence of or violation of warranties,
declarations or conditions contained in such policy by any named insured, (ii)
the occupation or use of the Trust Premises for purposes more hazardous than
permitted by the terms thereof, (iii) any foreclosure or other action or
proceeding taken by the Beneficiary pursuant to any provision of this Deed of
Trust, or (iv) any change in title or ownership of the Trust Premises; (f)
provide no cancellation, reduction in amount or material change in coverage
thereof or any portion thereof shall be effective until at least thirty (30)
days after receipt by the Beneficiary of written notice thereof; (g) provide
that any notice under such policies shall be simultaneously delivered to the
Beneficiary. Any insurance maintained pursuant to this Section 2.1 may be
evidenced by blanket insurance policies covering the Property and other
properties or assets of the Trustor, provided that any such policy shall specify
the portion, if less than all, of the total coverage of such policy that is
allocated to the Trust Premises and shall in all other respects comply with the
requirements of this Section 2.1.
SECTION 2.1.3 Delivery of Certificates, etc. The Trustor will
deliver to the Beneficiary, promptly upon request, (a) certificates of all
policies evidencing all insurance required to be maintained under Section 2.1.1
(or, in the case of blanket policies, certificates thereof by the insurers
together with a counterpart of each blanket policy), and (b) evidence as to the
payment of all premiums due thereon (with respect to public liability insurance
policies, all installments for the current year due thereon to such date),
provided that the Beneficiary shall not be deemed by reason of its custody of
such certificates to have knowledge of the contents thereof or of the applicable
policies. The Trustor will also deliver to the Beneficiary fifteen (15) days
15
prior to the expiration of any policy, a binder or certificate of the insurer
evidencing the replacement thereof and when the new policy is issued a
certificate of the new policy (or, in the case of a replacement blanket policy,
a certificate thereof of the insurer together with a counterpart of the blanket
policy). If Trustor fails to obtain insurance in accordance herewith,
Beneficiary may do so (but shall not be obligated to do so) and without limiting
any of Beneficiary's other remedies exercise its rights under Section 3.14.
SECTION 2.1.4 Separate Insurance. The Trustor will not take
out separate insurance concurrent in form or contributing in the event of loss
with that required to be maintained pursuant to this Section 2.1 unless such
additional insurance will not affect Beneficiary's rights with respect to the
insurance maintained pursuant to this Section 2.1.
SECTION 2.2 Damage, Destruction or Taking; Trustor to Give
Notice; Assignment of Awards. In case of:
(a) any material damage to or destruction of the Trust
Premises or any material part thereof; or
(b) any taking, whether for permanent or temporary use,
of all or any material part of the Trust Premises or any material interest
therein or material right accruing thereto, as the result of the exercise of the
right of condemnation or eminent domain (a "Taking"), or the commencement of any
proceedings or negotiations which may result in a Taking,
the Trustor will promptly give written notice thereof to the Beneficiary,
generally describing the nature and extent of such damage or destruction and the
Trustor's best estimate of the cost of restoring the Trust Premises, or the
nature of such proceedings or negotiations and the nature and extent of the
Taking which might result therefrom, as the case may be. The Beneficiary shall
be entitled to all insurance proceeds payable on account of such damage or
destruction and to all awards or payments allocable to the Trust Premises on
account of such Taking up to the amount of the Secured Obligations, and the
Trustor hereby irrevocably assigns, transfers and sets over to the Beneficiary
all rights, title and interest of the Trustor to any such proceeds, awards or
payments up to the amount of the Secured Obligations and irrevocably authorizes
and empowers the Beneficiary, at its option, in the name of the Trustor or
otherwise, to file and prosecute what would otherwise be the Trustor's claim for
any such proceeds, award or payment and to collect, receipt for and retain the
same for disposition in accordance with Section 2.3. The Trustor will pay all
reasonable costs and expenses incurred by the Beneficiary in connection with any
such damage, destruction or Taking and seeking and obtaining any insurance
proceeds, awards or payments in respect thereof.
SECTION 2.3 Application of Proceeds and Awards. The
Beneficiary may, at its option, apply all amounts recovered under any insurance
policy covering the Trust Premises required to be maintained by the Trustor
hereunder and all awards and payments received by it on account of any Taking
covering the Trust Premises in any one or more of the following ways:
(a) to the payment of the reasonable costs and expenses
incurred by the Beneficiary in obtaining any such insurance proceeds or awards,
including the reasonable fees and expenses of attorneys and insurance and other
experts and consultants, the costs of litigation,
16
arbitration, mediation, investigations and other judicial, administrative or
other proceedings and all other out-of-pocket expenses;
(b) to the payment of the principal of the Senior Notes
and any interest (including Post Petition Interest to the extent such interest
is a Secured Obligation) accrued and unpaid thereon, without regard to whether
any portion or all of such amounts shall be matured or unmatured, and, in case
such amount shall be insufficient to pay in full all such amounts, then such
amount shall be applied, first, to the payment of all amounts of interest
(including Post-Petition Interest to the extent such interest is a Secured
Obligation) accrued on the Senior Notes and unpaid, second, to the payment of
all amounts of principal in the time outstanding;
(c) to the payment of, or the application to, any Secured
Obligations (other than as provided in clause (b) above); and
(d) to fulfill any of the other covenants contained
herein, in the Indenture, the Senior Notes, and the Security Documents, as the
Beneficiary may determine in its reasonable discretion;
(e) to the Trustor for application to the cost of
restoring the Trust Premises and the replacement of Goods destroyed, damaged or
taken; and
(f) to the Trustor.
Notwithstanding the foregoing provisions of this Section 2.3 to the contrary
(but subject to the provisions of Section 2.4), and if each of the following
conditions is satisfied, the Beneficiary, upon request of the Trustor, shall
apply insurance proceeds or condemnation awards paid with respect to the Trust
Premises and received by it to the restoration or replacement of the Trust
Premises, to the extent necessary for the restoration or replacement thereof:
(i) there shall then exist no uncured Event of Default;
(ii) the Trustor shall furnish to the Beneficiary a
certificate of an architect or engineer reasonably acceptable to the Beneficiary
stating (x) that the Trust Premises is capable of being restored, prior to the
maturity of the Indenture, to substantially the same condition as existed prior
to the casualty or Taking, (y) the aggregate estimated direct and indirect costs
of such restoration and (z) as to any Taking, that the property taken in such
Taking, or sold under threat thereof, is not necessary to the Trustor's
customary use or occupancy of the Property or Trustor otherwise provides
Beneficiary adequate assurance that the Trust Premises can be restored or is not
necessary to Trustor's customary use or occupancy of the Property; and
(iii) in the event that the estimated cost of restoration
set forth in the certificate of such architect or engineer (and such revisions
to such estimate as are from time to time made) exceeds the net insurance
proceeds or condemnation awards actually received from time to time, the Trustor
shall deposit the amount of such excess with the Beneficiary.
In the event that such insurance proceeds or condemnation awards are to
be utilized in the restoration of the Trust Premises, the Beneficiary shall
disburse such Proceeds and the additional
17
amounts deposited by the Trustor for such restoration after receipt of a written
request for disbursement, on not fewer than five (5) Business Days' notice to be
disbursed in accordance with standard construction loan practices. In the event
that such insurance or condemnation awards are to be utilized to replace the
Trust Premises so destroyed or taken, the Beneficiary shall disburse such
Proceeds after receipt of a written request for disbursement, on not fewer than
five (5) Business Days' notice simultaneously with the acquisition of such
replacement property by the Trustor. In the event that, after the restoration or
replacement of the Trust Premises, any insurance or condemnation awards shall
remain, such amount shall be paid to the Trustor. Insurance proceeds and
condemnation awards shall be invested in the manner reasonably requested by the
Trustor and reasonably approved by the Beneficiary, and all interest earned
thereon shall be applied as provided in this Section 2.3. If, prior to the
receipt by the Beneficiary of such insurance proceeds or condemnation awards,
the Trust Premises shall have been sold on foreclosure, the Beneficiary shall
have the right to receive said insurance proceeds or condemnation awards to the
extent of any deficiency found to be due upon such sale, with legal interest
thereon, whether or not a deficiency judgment shall have been sought or received
or denied, and the reasonable attorneys' fees, costs and disbursements incurred
by the Beneficiary in connection with the collection of such award payment.
SECTION 2.4 Total Taking and Total Destruction. In the event
of a Total Destruction or a Total Taking, the Beneficiary shall apply all
amounts recovered under any insurance policy referred to in Section 2.1.1 and
all awards received by it on account of any such Taking as follows:
(a) first, to the payment of the reasonable costs and
expenses incurred by the Beneficiary in obtaining any such insurance proceeds or
awards, including the reasonable fees and expenses of attorneys and insurance
and other experts and consultants, the costs of litigation, arbitration,
mediation, investigations and other judicial, administrative or other
proceedings and all other out-of-pocket expenses;
(b) second, to the payment of the principal of the Senior
Notes and any interest (including Post-Petition Interest to the extent such
interest is a Secured Obligation) accrued and unpaid thereon, without regard to
whether any portion or all of such amounts shall be matured or unmatured;, and,
in case such amount shall be insufficient to pay in full all such amounts, then
such amount shall be applied, first, to the payment of all amounts of interest
(including Post-Petition Interest to the extent such interest is a Secured
Obligation) accrued to the Senior Notes and unpaid, and second, to the payment
of all amounts of principal at the time outstanding;
(c) third, to the payment of, or the application to, any
Secured Obligation (other than as provided in clause (b) above);
(d) fourth, to fulfill any of the other covenants
contained herein as the Beneficiary may determine; and
(e) fifth, the balance, if any, to the Trustor.
18
ARTICLE III
EVENTS OF DEFAULT; REMEDIES, ETC.
SECTION 3.1 Event of Default; Acceleration. If an Event of
Default shall have occurred and be continuing, then and in any such event the
Beneficiary may at any time thereafter (unless all Events of Default shall
theretofore have been remedied and all costs and expenses including, without
limitation, attorneys' fees and expenses, incurred by or on behalf of the
Beneficiary of which Trustor has notice shall have been paid in full by the
Trustor) declare, by written notice to the Trustor, the Senior Notes and all
other Secured Obligations to be due and payable immediately or on a date
specified in such notice, and on such date the same shall be and become due and
payable, together with interest accrued thereon, without presentment, demand,
protest or notice, all of which the Trustor hereby waives. The Trustor will pay
on demand all reasonable costs and expenses, including, without limitation,
reasonable attorneys' fees and expenses, incurred by or on behalf of the
Beneficiary in enforcing this Deed of Trust, the Indenture, the Senior Notes, or
the Security Documents that are occasioned by any default hereunder.
SECTION 3.2 Legal Proceedings; Judicial Foreclosure. If an
Event of Default shall have occurred and be continuing, the Beneficiary at any
time may, at its election, proceed at law or in equity or otherwise to enforce
the payment and performance of the Secured Obligations in accordance with the
terms hereof and thereof and to foreclose the lien of this Deed of Trust as
against all or any part of the Trust Premises and to have the same sold under
the judgment or decree of a court of competent jurisdiction. The Beneficiary
shall be entitled to recover in such proceedings all costs incident thereto,
including reasonable attorneys' fees and expenses in such amounts as may be
fixed by any court.
SECTION 3.3 Power of Sale. If an Event of Default shall have
occurred and be continuing, the Beneficiary may direct the Trustee to sell or
offer for sale the Trust Premises in such portions, order and parcels as the
Beneficiary may determine, with or without having first taken possession of the
same, to the highest bidder for cash at public auction. Such sale shall be made
at the courthouse of the county wherein the Land (or any of that portion thereof
to be sold) is situated (whether the parts or parcels thereof, if any, in
different counties are contiguous or not, and without the necessity of having
any personal property hereby mortgaged present at such sale) on the first
Tuesday of any month between the hours of 10:00 a.m. and 4:00 p.m. after posting
a written or printed notice or notices of the place, the earliest time at which
the sale will begin and terms of the sale of the Trust Premises for twenty-one
(21) days prior to the date of the sale at the courthouse door of the county in
which the sale is to be made and at the courthouse door of any other county in
which a portion of the Trust Premises may be situated and filing a copy of such
notice(s) in the office of the county clerk in each of such counties, and by
serving written notice of the proposed sale at least twenty-one (21) days
preceding the date of sale by certified mail on each debtor obligated to pay the
Secured Obligations according to the records of the Beneficiary. Service of such
notice shall be completed upon deposit of the notice, enclosed in a postpaid
wrapper, properly stamped and addressed to such debtor at the most recent
address as shown by the records of the Beneficiary, in a post office or official
depository under the care and custody of the United States. It is agreed that
the posting and transmittal of notices
19
may be performed by the Trustee, Beneficiary, or by any person acting for them.
In lieu of the foregoing, the sale may be accomplished by following the
procedures permitted or required by Section 51.002 of the Texas Property Code,
as same may be amended from time to time, relating to the sale of real estate
and/or by the Texas Uniform Commercial Code-Secured Transactions (same being
Chapter 9 of the Texas Business and Commerce Code) relating to the sale of
personal property collateral after default by a debtor (as said Section and
Chapter may now exist or may hereafter be amended or succeeded), or by any other
present or subsequent articles or enactments relating to the same. Nothing
contained in this Section shall be construed to limit in any way the Trustee's
rights to sell the Trust Premises by private sale if, and to the extent, that
such private sale is permitted under the laws of the State or by public or
private sale after entry of judgment by any court of competent jurisdiction
ordering the same. At any such sale (i) whether made under power herein
contained, Section 51.002 of the Texas Property Code, the Texas Uniform
Commercial Code- Secured Transactions, any other legal requirement or by virtue
of any judicial procedure or any other legal right, remedy or recourse, it shall
not be necessary for the Trustee to have physically present, or to have
constructive possession of, the Trust Premises (Trustor hereby covenanting and
agreeing to deliver to the Trustee any portion of the Trust Premises not
actually or constructively possessed by the Trustee immediately upon demand by
the Trustee), and the title to and right of possession of any such property
shall pass to the purchaser thereof as completely as if the same had been
actually present and delivered to purchaser at such sale, (ii) each instrument
of conveyance executed by the Trustee shall contain a special warranty of title,
binding upon Trustor, (iii) each and every recital contained in any instrument
of conveyance made by the Trustee shall conclusively establish the truth and
accuracy of the matters recited therein, including, without limitation,
nonpayment of the Secured Obligations, advertisement and conduct of such sale in
the manner provided herein and otherwise by law and appointment of any successor
to the Trustee hereunder, (iv) any and all prerequisites to the validity thereof
shall be conclusively presumed to have been performed, (v) the receipt of the
Trustee or of such other party or officer making the sale shall be a sufficient
discharge to the purchaser or purchasers for his or their purchase money and no
such purchaser or purchasers, or his or their assigns or personal
representatives, shall thereafter be obligated to see to the application of such
purchase money or be in any way answerable for any loss, misapplication or
nonapplication thereof, (vi) to the fullest extent permitted by law, Trustor
shall be completely and irrevocably divested of all of its right, title,
interest, claim and demand whatsoever, either at law or in equity, in and to the
property sold and such sale shall be a perpetual bar, both at law and in equity,
against Trustor, and against any and all other persons claiming or to claim the
property sold or any part thereof, by, through or under Trustor, and (vii) to
the extent and under such circumstances as are permitted by law, Beneficiary may
be a purchaser at any such sale. The Trust Premises may be sold in one or more
parcels and in such manner and order as Trustee and Beneficiary, in their sole
discretion, may elect, it being expressly understood and agreed that the right
of sale arising out of any Event of Default shall not be exhausted by any one or
more sales but other and successive sales may be made until all of the Trust
Premises have been sold or until the Secured Obligations have been fully
satisfied. The Trustee may postpone the sale of all or any portion of such Trust
Premises by public announcement at the time and place of such sale, and from
time to time thereafter may further postpone such sale by public announcement
made at the time of sale fixed by the preceding postponement. In case
Beneficiary shall have proceeded to invoke any right, remedy or recourse
permitted under this Deed of Trust and shall thereafter elect to discontinue or
abandon the same for any reason, Beneficiary shall have the
20
unqualified right so to do and, in such event, Trustor and Beneficiary shall be
restored to their former positions with respect to the Secured Obligations, the
Trust Premises and otherwise, and the rights, remedies, recourses and powers of
Beneficiary shall continue as if same had never been invoked.
SECTION 3.4 Uniform Commercial Code Remedies. If an Event of
Default shall have occurred and be continuing, the Beneficiary may exercise from
time to time and at any time any rights and remedies available to it under
applicable law upon default in the payment of indebtedness, including, without
limitation, any right or remedy available to it as a secured party under the
Uniform Commercial Code of the State. The Trustor shall, promptly upon request
by the Beneficiary, assemble the Trust Premises, or any portion thereof
generally described in such request, and make it available to the Beneficiary at
such place or places designated by the Beneficiary and reasonably convenient to
the Beneficiary and the Trustor. If the Beneficiary elects to proceed under the
Uniform Commercial Code of the State to dispose of portions of the Trust
Premises, the Beneficiary, at its option, may give the Trustor notice of the
time and place of any public sale of any such property, or of the date after
which any private sale or other disposition thereof is to be made, by sending
notice by registered or certified first class mail, postage prepaid, to the
Trustor at least ten (10) days before the time of the sale or other disposition.
If any notice of any proposed sale, assignment or transfer by the Beneficiary of
any portion of the Trust Premises or any interest therein is required by law,
the Trustor conclusively agrees that ten (10) days notice to the Trustor of the
date, time and place (and, in the case of a private sale, the terms) thereof is
reasonable.
SECTION 3.5 Beneficiary Authorized to Execute Deeds, etc. The
Trustor irrevocably appoints the Trustee and the Beneficiary (which appointment
is coupled with an interest) the true and lawful attorney-in-fact of the
Trustor, in its name and stead and on its behalf, for the purpose of
effectuating any sale, assignment, transfer or delivery for the enforcement
hereof, whether pursuant to power of sale, foreclosure or otherwise, to execute
and deliver all such deeds, bills of sale, assignments, releases and other
instruments as may be designated in any such request; provided, however, Trustee
and Beneficiary are permitted to take such actions only upon and during the
continuation of an Event of Default or when otherwise permitted under the
Indenture or any Security Document.
SECTION 3.6 Purchase of Trust Premises by Beneficiary. The
Beneficiary may be a purchaser of the Trust Premises or of any part thereof or
of any interest therein at any sale thereof, whether pursuant to power of sale,
foreclosure or otherwise, and the Beneficiary may apply upon the purchase price
thereof the indebtedness secured hereby owing to the Beneficiary. Such purchaser
shall, upon any such purchase, acquire good title to the properties so
purchased, free of the security interest and lien of this Deed of Trust and free
of all rights of redemption in the Trustor.
SECTION 3.7 Receipt a Sufficient Discharge to Purchaser. Upon
any sale of the Trust Premises or any part thereof or any interest therein,
whether pursuant to power of sale, foreclosure or otherwise, the receipt of the
Trustee or the officer making the sale under judicial proceedings shall be a
sufficient discharge to the purchaser for the purchase money, and such purchaser
shall not be obliged to see to the application thereof.
21
SECTION 3.8 Waiver of Appraisement Valuation, etc. The
Trustor hereby waives, to the fullest extent it may lawfully do so, the benefit
of appraisement, valuation, stay, extension and redemption laws now or hereafter
in force and all rights of marshaling in the event of any sale of the Trust
Premises or any part thereof or any interest therein.
SECTION 3.9 Sale a Bar Against Trustor. Any lawfully
conducted sale of the Trust Premises or any part thereof or any interest therein
under or by virtue of this Deed of Trust, whether pursuant to power of sale,
foreclosure or otherwise, shall forever be a bar against the Trustor.
SECTION 3.10 Secured Obligations to Become Due on Sale.
Except as otherwise provided in the Indenture or herein, upon any sale of the
Trust Premises or any portion thereof or interest therein by virtue of the
exercise of any remedy by the Beneficiary, or the Trustee on behalf of the
Beneficiary, under or by virtue of this Deed of Trust, whether pursuant to power
of sale, foreclosure or otherwise in accordance with this Deed of Trust or by
virtue of any other remedy available at law or in equity or by statute or
otherwise, at the option of the Beneficiary, any sums or monies due and payable
pursuant to the Indenture or Security Documents and in connection with the
Secured Obligations shall, if not previously declared due and payable,
immediately become due and payable, together with interest accrued thereon, and
all other indebtedness which this Deed of Trust by its terms secures.
SECTION 3.11 Application of Proceeds of Sale and Other
Moneys. Except as otherwise provided in the Indenture or in this Deed of Trust,
the proceeds of any sale of the Trust Premises or any part thereof or any
interest therein under or by virtue of this Deed of Trust, whether pursuant to
power of sale, foreclosure or otherwise, and all other moneys at any time held
by the Beneficiary as part of the Trust Premises, shall be applied in such order
of priority as the Beneficiary shall determine in its sole and absolute
discretion including, without limitation, as follows:
(a) first, to the payment of the reasonable costs and
expenses of such sale (including, without limitation, the cost of evidence of
title and the costs and expenses, if any, of taking possession of, retaining
custody over, repairing, managing, operating, maintaining and preserving the
Trust Premises or any part thereof prior to such sale), all reasonable costs and
expenses incurred by the Beneficiary or any other Person in obtaining or
collecting any insurance proceeds, condemnation awards or other amounts received
by the Beneficiary, all reasonable costs and expenses of any receiver of the
Trust Premises or any part thereof, and any Impositions or other charges or
expenses prior to the security interest or lien of this Deed of Trust, which the
Beneficiary may consider it necessary or desirable to pay;
(b) second, to the payment of any Secured Obligations,
applied
(i) first to fees and expense reimbursements
then due to the Indenture Trustee;
(ii) then to interest due to the Indenture
Trustee;
(iii) then to pay the remaining outstanding
Secured Obligations, and
22
(c) third, the balance, if any, held by the Beneficiary
after payment in full of all amounts referred to in subdivisions Sections
3.11(a) and (b) above, shall, unless a court of competent jurisdiction may
otherwise direct by final order not subject to appeal, be paid to or upon the
direction of the Trustor.
SECTION 3.12 Appointment of Receiver. If an Event of Default
shall have occurred and be continuing, the Beneficiary shall, as a matter of
right, be entitled to seek a court order for the appointment of a receiver for
all or any part of the Trust Premises, whether such receivership be incidental
to a proposed sale of the Trust Premises or otherwise, and the Trustor hereby
consents to the appointment of such a receiver and will not oppose any such
appointment.
SECTION 3.13 Possession, Management and Income. If an Event
of Default shall have occurred and be continuing, in addition to, and not in
limitation of, the rights and remedies provided in Section 1.14, the Trustee and
the Beneficiary, upon five (5) days written notice to the Trustor, may enter
upon and take possession of the Trust Premises or any part thereof by force,
summary proceeding, ejectment or otherwise and may remove the Trustor and all
other Persons and any and all property therefrom and may hold, operate,
maintain, repair, preserve and manage the same and receive all earnings, income,
Rents, issues and Proceeds accruing with respect thereto or any part thereof.
The Trustee and the Beneficiary shall be under no liability for or by reason of
any such taking of possession, entry, removal or holding, operation or
management, except that any amounts so received by the Trustee and the
Beneficiary shall be applied to pay all costs and expenses of so entering upon,
taking possession of, holding, operating, maintaining, repairing, preserving and
managing the Trust Premises or any part hereof, and any Impositions or other
charges prior to the lien and security interest of this Deed of Trust which the
Trustee and the Beneficiary may consider it necessary or desirable to pay, and
any balance of such amounts shall be applied as provided in Section 3.11.
SECTION 3.14 Right of Beneficiary to Perform Trustor's
Covenants, etc. If the Trustor shall fail to make any payment or perform any act
required to be made or performed hereunder or under the Indenture or the Senior
Notes, the Beneficiary, without notice to or demand upon the Trustor and without
waiving or releasing any obligation or Event of Default, may (but shall be under
no obligation) at any time thereafter make such payment or perform such act for
the account and at the expense of the Trustor, and may enter upon the Trust
Premises for such purpose and take all such action thereon as, in the
Beneficiary's opinion, may be necessary or appropriate therefor. No such entry
and no such action shall be deemed an eviction of any lessee of the Property or
any part thereof. All sums so paid by the Beneficiary and all costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses) so
incurred, together with interest thereon at the rate provided in the Indenture
from the date of payment or incurring, shall constitute additional indebtedness
under the Security Documents and shall be paid by the Trustor to the Trustee or
the Beneficiary, as the case may be, on demand.
SECTION 3.15 Subrogation. To the extent that the Beneficiary,
on or after the date hereof, pays any sum due under any provision of any Legal
Requirement or any instrument creating any lien prior or superior to the lien of
this Deed of Trust, or the Trustor or any other Person pays any such sum with
the proceeds of the Senior Notes, the Beneficiary shall have and be entitled to
a lien on the Trust Premises equal in priority to the lien discharged, and the
23
Beneficiary shall be subrogated to, and receive and enjoy all rights and liens
possessed, held or enjoyed by, the holder of such lien, which shall remain in
existence and benefit the Beneficiary in securing the Secured Obligations.
SECTION 3.16 Remedies, etc., Cumulative. Each right, power
and remedy of the Beneficiary provided for in this Deed of Trust, the Indenture
and in the Senior Notes or now or hereafter existing at law or in equity or by
statute or otherwise shall be cumulative and concurrent and shall be in addition
to every other right, power or remedy provided for in this Deed of Trust, the
Indenture, the Senior Notes or the other Security Documents or now or hereafter
existing at law or in equity or by statute or otherwise, and the exercise or
beginning of the exercise by the Beneficiary or the Trustee of any one or more
of the rights, powers or remedies provided for in this Deed of Trust, the
Indenture, the Senior Notes, or the other Security Documents or now or hereafter
existing at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by the Beneficiary or the Trustee of any or all
such other rights, powers or remedies.
SECTION 3.17 Provisions Subject to Applicable Law. All
rights, powers and remedies provided in this Deed of Trust may be exercised only
to the extent that the exercise thereof does not violate any applicable
provisions of law and are intended to be limited to the extent necessary so that
they will not render this Deed of Trust invalid, unenforceable or not entitled
to be recorded, registered or filed under the provisions of any applicable law.
If any term of this Deed of Trust or any application thereof shall be invalid or
unenforceable, the remainder of this Deed of Trust and any other application of
such term shall not be affected thereby.
SECTION 3.18 No Waiver, etc. No failure by the Trustee or the
Beneficiary to insist upon the strict performance of any term hereof or of the
Indenture, the Senior Notes, or the other Security Documents or to exercise any
right, power or remedy consequent upon a breach hereof or thereof, shall
constitute a waiver of any such term or of any such breach. No waiver of any
breach shall affect or alter this Deed of Trust, which shall continue in full
force and effect with respect to any other then existing or subsequent breach.
By accepting payment or performance of any amount or other Secured Obligations
secured hereby before or after its due date, neither the Trustee nor the
Beneficiary shall be deemed to have waived its right either to require prompt
payment or performance when due of all other amounts and Secured Obligations
payable or performance due hereunder or to declare a default for failure to
effect such prompt payment or performance.
SECTION 3.19 Compromise of Actions, etc. Any action, suit or
proceeding brought by the Beneficiary pursuant to any of the terms of this Deed
of Trust, the Indenture, the Senior Notes, or the other Security Documents, or
otherwise, and any claim made by the Beneficiary hereunder or thereunder, may be
compromised, withdrawn or otherwise dealt with by the Beneficiary without any
notice to or approval of the Trustor.
24
ARTICLE IV
DEFINITIONS
SECTION 4.1 Terms Defined in this Deed of Trust. When used
herein the following terms have the following meanings:
"Administrative Agent" means the CIT Group/Business Credit, Inc. as
administrative agent under the Credit Agreement (as defined in the Indenture),
or any successor thereto.
"Beneficiary" shall have the meaning set forth in the preamble.
"Contracts" shall have the meaning set forth in clause (g) of the
granting clause.
"Disposition" shall have the meaning set forth in the Senior Debt
Intercreditor Agreement.
"Deed of Trust" shall have the meaning set forth in the preamble.
"Event of Default" means any Event of Default under and as defined in
the Indenture.
"Goods" shall have the meaning set forth in clause (c) of the granting
clause.
"Hazardous Material" shall have the meaning specified in the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
subsequently modified, supplemented or amended ("CERCLA"), provided, in the
event that CERCLA 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, provided further, to the extent the laws of any jurisdiction
where the Trust Premises is located on the date hereof or on any subsequent date
establish a meaning for "hazardous material," which is broader than that
specified in either CERCLA, such broader meaning shall apply.
"herein", "hereof", "hereto", and "hereunder" and similar terms refer
to this Deed of Trust and not to any particular Section, paragraph or provision
of this Deed of Trust.
"Highest Lawful Rate" shall have the meaning set forth in Section 5.16.
"Holders" means, collectively, the Holders of the Senior Notes from
time to time.
"Impositions" shall have the meaning set forth in Section 1.5.
"Improvements" shall have the meaning set forth in clause (b) of the
granting clause.
"Indemnified Parties" shall have the meaning set forth in Section 1.16.
"Indenture" is defined in the second recital.
"Indenture Trustee" is defined in the preamble.
25
"Insurance Requirements" shall have the meaning set forth in paragraph
(a) of Section 1.6.
"Land" shall have the meaning set forth in the first recital.
"Leases" shall have the meaning set forth in clause (d) of the granting
clause.
"Legal Requirements" shall have the meaning set forth in paragraph (b)
of Section 1.6.
"Material Adverse Effect" means a material adverse effect on the Trust
Premises taken as a whole.
"Permits" shall have the meaning set forth in clause (f) of the
granting clause.
"Permitted Encumbrances" shall have the meaning set forth in Section
1.2.
"Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency or officer.
"Plans" shall have the meaning set forth in clause (e) of the granting
clause.
"Post-Petition Interest" means interest accruing at the rate provided
for in the documents evidencing the Senior Notes after the filing of a petition
by or against the Trustor under any Bankruptcy Law (as defined in the
Indenture), whether or not allowed as a claim in any such proceeding.
"Proceeds" shall have the meaning set forth in clause (j) of the
granting clause.
"Property" shall have the meaning set forth in clause (b) of the
granting clause.
"Real Estate" shall have the meaning set forth in clause (a) of the
granting clause.
"Rents" shall have the meaning set forth in clause (i) of the granting
clause.
"Secured Obligations" means the Obligations, as defined in the
Indenture.
"Secured Parties" means the Indenture Trustee, for the benefit of the
Holders.
"Security Agreement" shall have the meaning set forth in the Indenture.
"Senior Debt Intercreditor Agreement" means the Intercreditor
Agreement, dated as of the date hereof between the Trustee and The CIT
Group/Business Credit, Inc.
"Security Documents" shall have the meaning set forth in the Indenture.
"Senior Notes" is defined in the second recital.
"State" means the State of Texas.
26
"State Uniform Commercial Code" means the Uniform Commercial Code of
the State of Texas, in effect and as amended from time to time.
"Total Destruction" means any damage to or destruction of the
Improvements or any part thereof which, in the reasonable estimation of the
Beneficiary shall require the expenditure of an amount in excess of Forty
Million Dollars ($40,000,000) to restore the Improvements to substantially the
same condition of the Improvements immediately prior to such damage or
destruction.
"Total Taking" means a Taking, whether permanent or for temporary use,
which, in the reasonable judgment of the Beneficiary, shall substantially
interfere with and adversely affect the normal operation of the Property by the
Trustor to such an extent as would reasonably be anticipated to cause a Material
Adverse Effect.
"Trustee" shall have the meaning set forth in the preamble.
"Trustor" shall have the meaning set forth in the preamble.
"Trust Premises" shall have the meaning set forth in the granting
clause.
SECTION 4.2 Use of Defined Terms. Terms for which meanings
are provided in this Deed of Trust shall, unless otherwise defined or the
context requires, have such meanings when used in any certificate and any
opinion, notice or other communication delivered from time to time in connection
with this Deed of Trust or pursuant hereto.
SECTION 4.3 Indenture Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Deed of Trust,
including its preamble and recitals, have the meanings provided in the
Indenture.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Further Assurances; Financing Statements.
SECTION 5.1.1 Further Assurances. The Trustor, at its
expenses, will execute, acknowledge and deliver all such instruments and take
all such other action as the Beneficiary from time to time may reasonably
request:
(a) to better subject to the lien and security interest
of this Deed of Trust all or any portion of the Trust Premises,
(b) to perfect, publish notice or protect the validity of
the lien and security interest of this Deed of Trust,
(c) to preserve and defend the title to the Trust
Premises and the rights of the Beneficiary therein against the claims of all
Persons as long as this Deed of Trust shall remain undischarged,
27
(d) to better subject to the lien and security interest
of this Deed of Trust or to maintain or preserve the lien and security interest
of this Deed of Trust with respect to any replacement or substitution for any
Trust Premises or any other after-acquired property except as provided in the
Indenture, or
(e) in order to further effectuate the purposes of this Deed of Trust and to
carry out the terms hereof and to better assure and confirm to the Beneficiary
its rights, powers and remedies hereunder.
SECTION 5.2 Financing Statements. Notwithstanding any other
provision of this Deed of Trust, the Trustor hereby agrees that, without notice
to or the consent of the Trustor, the Beneficiary may file with the appropriate
public officials such financing statements, continuation statements, amendments
and similar documents as are or may become necessary to perfect, preserve or
protect the security interest granted by this Deed of Trust.
SECTION 5.3 Additional Security. Without notice to or consent
of the Trustor, and without impairment of the security interest and lien and
rights created by this Deed of Trust, the Trustee or the Beneficiary may accept
from the Trustor or any other Person additional security for the Secured
Obligations. Neither the giving of this Deed of Trust nor the acceptance of any
such additional security shall prevent the Trustee or the Beneficiary from
resorting, first, to such additional security, or, first, to the security
created by this Deed of Trust, or concurrently to both, in any case without
affecting the Trustee's or the Beneficiary's lien and rights under this Deed of
Trust.
SECTION 5.4 Defeasance; Partial Release etc.
SECTION 5.4.1 Defeasance. If the Secured Obligations and all
other amounts owing pursuant to the Indenture and the Security Documents and all
other sums payable hereunder by the Trustor shall be irrevocably repaid in full
in accordance with the terms thereof and Trustor shall have complied with all
the terms, conditions and requirements hereof and of the Secured Obligations, or
otherwise as may be provided in the Indenture, then on such date, the
Beneficiary shall, upon the request of the Trustor and at the Trustor's sole
cost and expense, execute and deliver such instruments, in form and substance
reasonably satisfactory to the Beneficiary, as may be necessary to effectively
reconvey, release and discharge this Deed of Trust.
SECTION 5.4.2 Partial Release, etc. The Beneficiary may at
any time and from time to time, without liability therefor, and without prior
notice to the Trustor, release or reconvey any part of the Trust Premises,
consent to the making of any map or plat of the Property, join in granting any
easement thereon or join in any extension agreement or agreement subordinating
the lien of this Deed of Trust.
SECTION 5.5 Notices, etc. All notices and other
communications provided to any of the parties hereto shall be in writing and
addressed, delivered or transmitted to such party as set forth in the Indenture.
28
SECTION 5.6 Waivers, Amendments, etc. The provisions of this
Deed of Trust may be amended, discharged or terminated and the observance or
performance of any provision of this Deed of Trust may be waived, either
generally or in a particular instance and either retroactively or prospectively,
only by an instrument in writing executed by the Trustor and the Beneficiary.
SECTION 5.7 Cross-References. References in this Deed of
Trust and in each instrument executed pursuant hereto to any Section or Article
are, unless otherwise specified, to such Section or Article of this Deed of
Trust or such instrument, as the case may be, and references in any Section,
Article or definition to any clause are, unless otherwise specified, to such
clause of such Section, Article or definition.
SECTION 5.8 Headings. The various headings of this Deed of
Trust and of each instrument executed pursuant hereto are inserted for
convenience only and shall not affect the meaning or interpretation of this Deed
of Trust or such instrument or any provisions hereof or thereof.
SECTION 5.9 Currency. Unless otherwise expressly stated, all
references to any currency or money, or any dollar amount, or amounts
denominated in "Dollars" herein will be deemed to refer to the lawful currency
of the United States.
SECTION 5.10 Governing Law. THIS DEED OF TRUST SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE.
SECTION 5.11 Successors and Assigns, etc. This Deed of Trust
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns.
SECTION 5.12 Concerning the Trustee.
SECTION 5.12.1 Acceptance of Trusts; Certain Terms of the
Trusts. The Trustee, for itself and its successors, hereby accepts the trusts of
this Deed of Trust, but only upon the terms herein set forth, including the
following:
(a) The recitals in this Deed of Trust and in any
supplement hereto which may hereafter be executed by the Trustor and the Trustee
shall be taken as the statements of the Trustor and shall not be considered as
made by, or imposing any obligation or liability upon, the Trustee.
(b) The Trustee may execute any of the trusts or powers
hereof and perform any duty hereunder either directly or through its agents or
attorneys, and the Trustee shall not be responsible for the acts of any agent or
attorney appointed by it in good faith and without negligence.
29
(c) The Trustee may, at the expense of the Trustor,
consult with legal counsel to be selected by it, and the Trustee shall not be
liable for any action taken, suffered or omitted to be taken by it in good faith
in accordance with the advice of counsel.
(d) The Trustor will pay to the Trustee from time to
time, on demand, compensation for all services rendered hereunder (which shall
not be limited to the compensation of trustees of any express trust as provided
by law) and also all reasonable expenses, charges, counsel fees and other
disbursements and those of its agents and attorneys, made or incurred in the
administration of the trusts hereby created and any other duties hereby imposed.
The Trustor agrees to indemnify and save harmless the Trustee against and from
any liability or damages which it may incur or sustain, in good faith, in the
exercise and performance of any of its powers and duties hereunder.
(e) The Trustee shall not be liable, in case of taking
possession of the Trust Premises, for debts contracted or liability or damages
incurred in the management or operation of the Trust Premises for the salaries
of employees of the Trustor or for nonfulfillment of contracts by the Trustor.
(f) The Trustee shall be protected in acting upon any
notice, resolution, request, consent, order, certificate, report, opinion,
statement, obligation, appraisal or other document believed by it to be genuine
and to have been signed by the proper party or parties or by a person or persons
authorized to act on his or their behalf.
(g) The Trustee shall not be responsible for the validity
or genuineness of any securities, personal property, notes or deeds of trust at
any time pledged and deposited hereunder.
SECTION 5.12.2 Duties and Responsibility of Trustee; In Case
of Default; Prior to Default; When Acting Under Direction of Beneficiary. If an
Event of Default shall have occurred and shall be continuing to the actual
knowledge of the Trustee, or if the Trustee shall have received notice thereof
from the Beneficiary, the Trustee, only if so directed by the Beneficiary, shall
exercise such of the rights and powers vested in it by this Deed of Trust, and
in so doing shall use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs. None of the provisions of this Deed of Trust shall be construed as
relieving the Trustee from liability for its own negligent action, own negligent
failure to act, or own willful misconduct, except that,
(a) so long as no Event of Default shall have occurred
and be continuing,
(i) the Trustee shall not be liable except for
the performance of such duties as are specifically set forth in this Deed of
Trust, and no implied covenants or obligations shall be read into this Deed of
Trust against the Trustee, whose duties and obligations shall be determined
solely by the express provisions of this Deed of Trust, and
(ii) in the absence of bad faith on the part of
the Trustee, the Trustee may conclusively rely, as to the truth of the
statements and the correctness of opinions expressed therein, upon certificates
or opinions conforming to the requirements of this Deed of Trust;
30
(b) the Trustee shall not be liable for any error of
judgment made in good faith by an officer or officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(c) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
provisions of applicable law and the direction of the Beneficiary, relating to
the time, method, and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred upon the
Trustee under this Deed of Trust;
(d) the Trustee shall not be liable for any error of
judgment made in good faith by an officer or officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(e) if an Event of Default shall have occurred and shall
be continuing, the Trustee shall not exercise any of the powers granted to it
hereunder unless and until specifically requested to do so by the Beneficiary;
and
(f) none of the provisions contained in this Deed of
Trust shall require the Trustee to advance or use its own funds or otherwise
incur personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers.
SECTION 5.12.3 Resignation and Removal; Appointment of
Successor Trustee.
(a) The Trustee may resign and be discharged from the
trusts hereby created by giving written notice thereof to the Trustor and to the
Beneficiary. Such resignation shall become effective upon the appointment of its
successor and such successor's acceptance of such appointment, provided that, if
a successor Trustee has not been so appointed, or, if so appointed, has not
accepted the appointment within thirty (30) days after the date of such written
notice of resignation, the Trustee may apply to any court of competent
jurisdiction for the appointment of a successor Trustee.
(b) The Trustee may be removed at any time, in the
Beneficiary's sole discretion, by an instrument or instruments signed by the
Beneficiary and filed with the Trustor and the Trustee.
(c) The Beneficiary may appoint a successor Trustee at
any time by filing for record in the office of the Register of Deeds of the
County in which the Property is located a substitution of Trustee. From the time
the substitution is filed for record, the successor Trustee shall succeed to all
of the powers, duties, authority and title of the Trustee without the necessity
of any conveyance from the Trustee originally herein named or any successor.
Each such substitution shall be executed and acknowledged, and notice thereof
shall be given and proof thereof made in accordance with applicable law. The
Trustor agrees to accept and confirm any such successor Trustee hereunder by
executing and delivering a supplemental Deed of Trust and security agreement or
any other appropriate agreement.
31
SECTION 5.13 Waiver of Jury Trial; Submission to
Jurisdiction. EACH OF THE TRUSTOR AND THE BENEFICIARY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS DEED OF TRUST, THE INDENTURE, THE SENIOR NOTES, THE SECURITY DOCUMENTS
OR ANY OTHER RELATED INSTRUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE TRUSTOR OR THE
BENEFICIARY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE BENEFICIARY AND THE
HOLDERS TO ENTER INTO THE TRANSACTIONS PROVIDED FOR IN THE INDENTURE.
(b) FOR THE PURPOSE OF ANY ACTION OR PROCEEDING INVOLVING
THIS DEED OF TRUST OR THE INDENTURE, THE SENIOR NOTES, OR THE SECURITY
DOCUMENTS, THE TRUSTOR, TRUSTEE AND BENEFICIARY HEREBY EXPRESSLY AND IRREVOCABLY
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ALL FEDERAL AND STATE COURTS LOCATED
IN THE STATE AND CONSENT THAT THEY MAY BE SERVED WITH ANY PROCESS OR PAPER BY
REGISTERED MAIL OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE IN ACCORDANCE
WITH APPLICABLE LAW, PROVIDED A REASONABLE TIME FOR APPEARANCE IS ALLOWED. THE
TRUSTOR AND THE BENEFICIARY EACH EXPRESSLY WAIVES, TO THE EXTENT IT MAY LAWFULLY
DO SO, ANY OBJECTION, CLAIM OR DEFENSE WHICH IT MAY HAVE AT ANY TIME TO THE
LAYING OF VENUE OF ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF THIS DEED OF
TRUST OR THE INDENTURE IN ANY SUCH COURT, IRREVOCABLY WAIVES ANY CLAIM THAT ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM AND FURTHER IRREVOCABLY WAIVES THE RIGHT TO OBJECT, WITH
RESPECT TO ANY SUCH CLAIM, SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT,
THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER THE PERSON OF THE TRUSTOR.
NOTHING CONTAINED HEREIN WILL BE DEEMED TO PRECLUDE EITHER OF THE TRUSTEE OR THE
BENEFICIARY FROM BRINGING AN ACTION AGAINST THE TRUSTOR IN ANY OTHER
JURISDICTION.
SECTION 5.14 Severability; Conflicts. Any provision of this
Deed of Trust, the Indenture, the Senior Notes, or any other Security Document
which is prohibited or unenforceable in any jurisdiction shall as to such
provision and such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions of
this Deed of Trust, the Indenture, the Senior Notes, or other Security Documents
or affecting the validity or enforceability of such provision in any other
jurisdiction. In the event of any conflict between the terms of this Deed of
Trust and the terms of the Indenture, the terms of the Indenture shall control.
SECTION 5.15 Security Agreement. This Deed of Trust is a
document executed pursuant to the Indenture and, unless otherwise expressly
indicated herein, shall be construed, administered and applied in accordance
with the terms and provisions thereof.
32
SECTION 5.16 Usury Savings Clause. In no event shall any
provision of this instrument, the Indenture, the Senior Notes, or any other
instrument evidencing or securing the Secured Obligations ever obligate Trustor,
to pay or allow Beneficiary to collect interest on the Senior Notes or any other
Secured Obligations secured hereby at a rate greater than the maximum
non-usurious rate permitted by applicable law (herein referred to as the
"Highest Lawful Rate"), or obligate Trustor to pay any amounts that would be
held or deemed to constitute interest under applicable law which, when added to
the interest payable on the Senior Notes, would be held to constitute the
payment by Trustor of interest at a rate greater than the Highest Lawful Rate;
and this provision shall control over any provision to the contrary. To the
extent the Highest Lawful Rate is determined by reference to the laws of the
State of Texas, same shall be determined by reference to the indicated rate
ceiling (as defined and described in Chapter 303 of the Texas Finance Code, as
amended) at the applicable time in effect.
Without limiting the generality of the foregoing, in the event the
maturity of all or any part of the principal amount of the Secured Obligations
shall be accelerated for any reason, then such principal amount so accelerated
shall be credited with any interest theretofore paid thereon in advance and
remaining unearned at the time of such acceleration. If, pursuant to the terms
of this Deed of Trust or the Senior Notes, any funds are applied to the payment
of any part of the principal amount of the Secured Obligations prior to the
maturity thereof, then (a)(a) any interest which would otherwise thereafter
accrue on the principal amount so paid by such application shall be canceled,
and (b) the Secured Obligations remaining unpaid after such application shall be
credited with the amount of all interest, if any, theretofore collected on the
principal amount so paid by such application and remaining unearned at the date
of said application; and if the funds so applied shall be sufficient to pay in
full all the Secured Obligations, then Beneficiary shall refund to Trustor all
interest theretofore paid thereon in advance and remaining unearned at the time
of such acceleration. Regardless of any other provision in this instrument, or
in any of the written evidences of the Secured Obligations, Trustor shall never
be required to pay any unearned interest on the Secured Obligations or any
portion thereof, and shall never be required to pay interest thereon at a rate
in excess of the Highest Lawful Rate construed by courts having competent
jurisdiction thereof.
It is the intention of the Trustor and the Beneficiary to conform
strictly to the usury laws governing the Indenture and the Security Documents,
and any interest payable under the Indenture and the Security Documents executed
pursuant to the Indenture shall be subject to reduction to the amount not in
excess of the maximum non-usurious amount allowed under such laws, as construed
by the courts having jurisdiction over such matters. In the event the maturity
of the Secured Obligations is accelerated by reason of any provision of the
Indenture and the Security Documents executed pursuant or by reason of an
election by the Beneficiary resulting from an Event of Default, then earned
interest may never include more than the maximum amount permitted by law,
computed from the dates of each advance of loan proceeds under the Indenture
until payment, and any interest in excess of the maximum amount permitted by law
shall be canceled automatically or, if theretofore paid, at the option of the
Beneficiary, shall be rebated to the Trustor, or shall be credited on the
principal amount of the Secured Obligations or, if all principal has been
repaid, then the excess shall be rebated to the Trustor. If any interest is
canceled, credited against principal or rebated to the Trustor in accordance
with the foregoing sentence and, if thereafter the interest payable hereunder is
less than the maximum amount
33
permitted by applicable law, the rate hereunder shall automatically be increased
to the maximum extent possible to permit repayment to the Beneficiary and the
Lenders as soon as possible of any interest in excess of the maximum amount
permitted by law which was earlier canceled, credit against principal or rebated
to the Trustor pursuant to the provisions of the foregoing sentence.
SECTION 5.17 Entire Agreement. THIS WRITTEN DEED OF TRUST,
ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE FILING REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
SECTION 5.18 No Partnership. Nothing contained herein is
intended or shall be construed to create a partnership or joint venture among
Trustor, Trustee and/or Beneficiary.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[SIGNATURE PAGE FOLLOWS]
34
In Witness Whereof, the undersigned, by its duly elected officers and
pursuant to proper authority of its board of directors has duly executed,
sealed, acknowledged and delivered this instrument as of the day and year first
above written.
STERLING CHEMICALS, INC.,
a Delaware corporation
By:
______________________________
Name:
__________________________
Title: Treasurer
[NOTARY PAGE FOLLOWS]
35
[CORPORATE NOTARY PAGE]
Multi-State Corporate Acknowledgement
TRUSTOR
State of
County of
On this __________________ day of November, 2002, before me, the undersigned
officer, personally appeared ____________________________, with a residence at
___________________ personally known and acknowledged himself/herself/themselves
to me, or produced _________________________________'s identification to be the
____________________ ___ of _____________________________, hereinafter, (the
"Corporation") and that as such officer(s), being duly authorized to do so
pursuant to its bylaws or a resolution of its board of directors, executed,
subscribed and acknowledged the foregoing instrument for the purposes and
consideration therein contained, by signing the name of the Corporation by
himself/herself/themselves in their authorized capacities as such officer(s) as
his/her/their free and voluntary act and deed and the free and voluntary act and
deed of said Corporation.
In Witness Whereof, I hereunto set my hand and official seal.
______________________________
Notary
36
EXHIBIT A
The Land
EXHIBIT B
Permitted Encumbrances
