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EXHIBIT 4.31
When recorded, return to:
Fennemore Craig, P.C.
3003 North Central Avenue
Suite 2600
Phoenix, Arizona 85012
Attn: Sarah A. Strunk, Esq.
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
This Deed of Trust, Assignment of Rents, Security Agreement and
Fixture Filing
(hereinafter called "Deed of Trust") is made as of the day of
November 8, 2005
by and among NORD RESOURCES CORPORATION, a Delaware corporation and
the
successor by merger to Nord Copper Corporation, whose mailing
address is P.O.
Box 384, Dragoon, AZ 85609, hereinafter called "Trustor," FIRST
AMERICAN TITLE
INSURANCE COMPANY, whose mailing address is 2398 E. Camelback Road,
Suite 1060,
Phoenix, Arizona 85016, attention Peggy Barber, hereinafter called
"Trustee,"
and NEDBANK LIMITED, a limited liability company organized under
the laws of the
Republic of South Africa, whose mailing address is 1st Floor, Old
Mutual Place,
2 Lambeth Hill, London EC4V 4GG, Attn: Kevin Ryder
("Beneficiary").
WITNESSETH:
SECTION 1. GRANTING CLAUSE; WARRANTY OF TITLE.
1.1
Except as provided in Paragraph 4.2 hereof, Trustor hereby
irrevocably
grants, transfers, and assigns to Trustee, in trust, with power of
sale, all of
Trustor's present and future estate, right, title and interest in
and to that
real property and all buildings and other improvements now thereon
or hereafter
constructed thereon (the "Premises"), in the County of Cochise,
State of
Arizona, described on Schedule "A" attached hereto and by this
reference made a
part hereof, subject to those matters specifically described on
Schedule "B"
attached hereto and by this reference made a part hereof (the
"Permitted
Exceptions"), together with all of the following which, with the
Premises
(except where the context otherwise requires), are hereinafter
collectively
called the "Trust Property":
(a) All appurtenances
in and to the Premises;
(b) All water and
water rights, ditches and ditch rights, reservoir
and reservoir rights, stock or interests in irrigation or ditch
companies, minerals, oil and gas rights, royalties, lease or
leasehold interests owned by Trustor, now or hereafter used or
useful in connection with, appurtenant to or related to the
Premises;
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(c) All right, title
and interest of Trustor now owned or hereafter
acquired in and to all streets, roads, alleys and public
places,
and all easements and rights of way, public or private, now or
hereafter used in connection with the Premises;
(d) All machinery,
equipment, fixtures and materials now or at any
time attached to the Premises together with all processing,
manufacturing and service equipment and other personal property
now or at any time hereafter located on or appurtenant to the
Premises and used in connection with the management and
operation
thereof;
(e) Any licenses,
contracts, permits and agreements required or used
in connection with the ownership, operation or maintenance of
the
Premises, and the right to the use of any tradename, trademark,
or service mark now or hereafter associated with the operation
of
any business conducted on the Premises;
(f) Any and all
insurance proceeds, and any and all awards, including
interest, previously and hereafter made to Trustor for taking
by
eminent domain of the whole or any part of the Premises or any
easements
therein; and
(g) Subject to the
rights of Beneficiary under Section 3 hereof, all
existing and future leases, subleases, licenses and other
agreements for the use and occupancy of all or any portion of
the
Premises and all income, receipts, revenues, rents, issues and
profits arising from the use or enjoyment of all or any portion
of the Premises.
TRUSTOR FURTHER REPRESENTS, WARRANTS, COVENANTS AND AGREES AS
FOLLOWS:
SECTION 2. OBLIGATION SECURED
This Deed of Trust is given for the purpose of securing the payment
by Trustor
of the aggregate amount of Three Million Nine Hundred Thousand
Dollars
($3,900,000.00) with interest thereon, extension and other fees,
late charges
and costs, according to the terms of that Secured Promissory Note,
dated as of
November 8, 2005, made by Trustor, payable to the order of
Beneficiary, and all
amendments, modifications, renewals or replacements thereof
(hereinafter called
the "Note") and payment, performance and observance by Trustor of
each covenant,
condition, provision and agreement contained herein and of all
monies expended
or advanced by Beneficiary pursuant to the terms hereof, or to
preserve any
right of Beneficiary hereunder, or to protect or preserve the Trust
Property or
any part thereof. All of the indebtedness and obligations secured
by this Deed
of Trust are hereinafter collectively called the "Obligation."
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SECTION 3. LEASES; ASSIGNMENT OF RENTS AND LEASES
3.1
To facilitate payment and performance of the Obligation, Trustor
hereby
absolutely transfers and assigns to Beneficiary all right, title
and interest of
Trustor in and to (i) all existing and future leases, subleases,
licenses and
other agreements for the use and occupancy of all or any part of
the Trust
Property, whether written or oral and whether for a definite term
or month to
month, including but not limited to those described on Schedule "C"
attached
hereto and by this reference made a part hereof, together with all
guarantees of
the lessee's obligations thereunder and together with all
extensions,
modifications and renewals thereof (hereinafter called the
"LEASES"), and (ii)
all income, receipts, revenues, rents, issues and profits now or
hereafter
arising from or out of the Leases or from or out of the Trust
Property or any
part thereof, including without limitation room rents, minimum
rents, additional
rents, percentage rents, parking and maintenance charges and fees,
tax and
insurance contributions, proceeds of the sale of utilities and
services,
cancellation premiums, claims for damages arising from any breach
of the Leases,
proceeds from any sale or other disposition of all or any portion
of the Trust
Property, and all other benefits arising from the use or enjoyment
of, or the
lease, sale or other disposition of, all or any portion of the
Trust Property,
together with the immediate and continuing right to receive all of
the foregoing
(hereinafter called the "RENTS"). In furtherance of this Assignment
and not in
lieu hereof, Beneficiary may require a separate assignment of rents
and leases
and/or separate specific assignments of rents and leases covering
one or more of
the Leases; the terms of all such assignments are incorporated
herein by
reference.
3.2
Trustor hereby authorizes and directs the lessees and tenants under
the
Leases that, upon written notice from Beneficiary all Rents shall
be paid
directly to Beneficiary as they become due. Trustor hereby relieves
the lessees
and tenants from any liability to Trustor by reason of the payment
of the Rents
to Beneficiary. Nevertheless, Trustor shall be entitled to collect
the Rents
until Beneficiary notifies the lessees and tenants in writing to
pay the Rents
to Beneficiary. Beneficiary is hereby authorized to give such
notification upon
the occurrence of an Event of Default and at any time thereafter
while such
Event of Default is continuing. Receipt and application of the
Rents by
Beneficiary shall not constitute a waiver of any right of
Beneficiary under this
Deed of Trust or applicable law, shall not cure any Event of
Default hereunder,
and shall not invalidate or affect any act done in connection with
such Event of
Default, including, without limitation, any trustee's sale or
foreclosure
proceeding.
3.3
All Rents collected by Trustor shall be applied in the
following
manner:
First, to the payment of all taxes and lien assessments levied
against
the Trust Property, if any, where provision for paying such is
not
otherwise made;
Second, to the payment of ground rents (if any) payable with
respect
to the Trust Property;
Third, to the payment of any amounts due and owing under the
Obligation;
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Fourth, to the payment of current operating costs and expenses
(including repairs, maintenance and necessary acquisitions of
property
and expenditures for capital improvements) arising in connection
with
the Trust Property;
Fifth, to Trustor or its designee.
All Rents collected by Beneficiary may be applied to the items
above listed in
any manner that Beneficiary deems advisable and without regard to
the
aforestated priorities.
3.4
Trustor represents and warrants that: (i) the Leases are in full
force
and effect and have not been modified or amended; (ii) the Rents
have not been
waived, discounted, compromised, setoff or paid more than one month
in advance;
(iii) there are no other assignments, transfers, pledges or
encumbrances of any
Leases or Rents; and (iv) neither Trustor nor the lessees and
tenants are in
default under the Leases.
3.5
Trustor shall (i) fulfill or perform each and every material
term,
covenant and provision of the Leases to be fulfilled or performed
by the lessor
thereunder; (ii) give prompt notice to Beneficiary of any notice
received by
Trustor of default thereunder or of any alleged default or failure
of
performance that could become a default thereunder, together with a
complete
copy of any such notice; and (iii) enforce, short of termination
thereof, the
performance or observance of each and every material term, covenant
and
provision of each Lease to be performed or observed by the lessees
and tenants
thereunder.
3.6
Trustor, without the prior written consent of Beneficiary (not to
be
unreasonably withheld) shall not: (i) cancel, modify or alter, or
accept the
surrender of, any Lease; (ii) assign, transfer, pledge or encumber,
the whole or
any part of the Leases and Rents to anyone other than Beneficiary;
(iii) accept
any Rents more than one month in advance of the accrual thereof;
(iv) do or
permit anything to be done, the doing of which, or omit or refrain
from doing
anything, the omission of which, could be a breach or default under
the terms of
any Lease or a basis for termination thereof.
3.7
Beneficiary does not assume and shall not be liable for any
obligation
of the lessor under any of the Leases and all such obligations
shall continue to
rest upon Trustor as though this assignment had not been made.
Beneficiary shall
not be liable for the failure or inability to collect any
Rents.
3.8
Neither the Assignment of Rents and Leases contained herein or in
any
separate assignment nor the exercise by Beneficiary of any of its
rights or
remedies thereunder or in connection therewith, prior to
Beneficiary obtaining
actual possession of the Trust Property as provided in Paragraph
8.2 hereof,
shall constitute Beneficiary a "mortgagee in possession" or
otherwise make
Beneficiary responsible or liable in any manner with respect to the
Trust
Property or the occupancy, operation or use thereof. In the event
Beneficiary
obtains actual possession of the Trust Property as provided in
Paragraph 8.2
hereof, Beneficiary shall have the rights, and Beneficiary's
liability shall be
limited, as provided in that Paragraph.
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SECTION 4. SECURITY AGREEMENT
4.1
Except as provided in Paragraph 4.2 hereof, this Deed of Trust
shall
cover, and the Trust Property shall include, all property now or
hereafter
affixed or attached to or incorporated upon the Premises, which, to
the fullest
extent permitted by law, shall be deemed fixtures and a part of the
Premises. To
the extent any of the Trust Property consists of rights in action
or personal
property covered by the Uniform Commercial Code, this Deed of Trust
shall also
constitute a security agreement, and Trustor hereby grants to
Beneficiary, as
secured party, a security interest in such property, including all
proceeds
thereof, for the purpose of securing the Obligation. In addition,
except as
provided in Paragraph 4.2 hereof, for the purpose of securing the
Obligation,
Trustor hereby grants to Beneficiary, as secured party, a security
interest in
all of the property located on, or used in connection with or
associated with
the Premises described below in, to, or under which Trustor now has
or hereafter
acquires any right, title or interest, whether present, future, or
contingent:
all equipment, inventory, accounts, general intangibles,
instruments, documents,
and chattel paper, as those terms are defined in the Uniform
Commercial Code,
and all other personal property of any kind (including without
limitation money
and rights to the payment of money), whether now existing or
hereafter created,
that are now or at any time hereafter (i) in the possession or
control of
Beneficiary in any capacity; (ii) erected upon, attached to, or
appurtenant to,
the Premises; (iii) located or used on the Premises or identified
for use on the
Premises (whether stored on the Premises or elsewhere); or (iv)
used in
connection with, arising from, related to, or associated with the
Premises or
any of the personal property described herein, the construction of
any
improvements on the Premises, the ownership, development,
maintenance, leasing,
management, or operation of the Premises, the use or enjoyment of
the Premises,
or the operation of any business conducted on the Premises;
including without
limitation all such property more particularly described as
follows:
(a) Buildings,
structures and improvements, and building materials,
fixtures and equipment to be incorporated into any buildings,
structures or improvements;
(b) Goods, materials,
supplies, fixtures, equipment, machinery,
furniture and furnishings, including without limitation, all
such
items used for
(i) generation, storage or transmission of air,
water, heat, steam, electricity, light, fuel, refrigeration or
sound; (ii) ventilation, air-conditioning, heating,
refrigeration, fire prevention and protection, sanitation,
drainage, cleaning, transportation, communications, maintenance
or recreation; (iii) removal of dust, refuse, garbage or snow;
(iv) transmission, storage, processing or retrieval of
information; and (v) floor, wall, ceiling and window coverings
and decorations;
(c) Income, receipts,
revenues, rents, issues and profits, including
without limitation, room rents, minimum rents, additional
rents,
percentage rents, parking and maintenance charges and fees, tax
and insurance contributions, proceeds of the sale of utilities
and services, cancellation premiums, and claims for damages
arising
from the breach of any leases;
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(d) Water and water
rights, ditches and ditch rights, reservoirs and
reservoir rights, stock or interest in irrigation or ditch
companies, minerals, oil and gas rights, royalties, and lease
or
leasehold interests;
(e) Plans and
specifications prepared for the construction of any
improvements, including without limitation, all studies,
estimates, data, and drawings;
(f) Documents,
instruments and agreements relating to, or in any way
connected with, the operation, control or development of the
Premises, including without limitation, any declaration of
covenants, conditions and restrictions and any articles of
incorporation, bylaws and other membership documents of any
property owners association or similar group;
(g) Claims and causes
of action, legal and equitable, in any form
whether arising in contract or in tort, and awards, payments
and
proceeds due or to become due, including without limitation
those
arising on account of any loss of, damage to, taking of, or
diminution in value of, all or any part of the Premises or any
personal property described herein;
(h) Sales agreements,
escrow agreements, deposit receipts, and other
documents and agreements for the sale or other disposition of
all
or any part of the Premises or any of the personal property
described herein, and deposits, proceeds and benefits arising
from the sale or other disposition of all or any part of the
Premises or any of the personal property described herein;
(i) Policies or
certificates of insurance, contracts, agreements or
rights of indemnification, guaranty or surety, and awards, loss
payments, proceeds, and premium refunds that may be payable
with
respect to such policies, certificates, contracts, agreements
or
rights;
(j) Contracts,
agreements, permits, licenses, authorizations and
certificates, including without limitation all architectural
contracts, construction contracts, management contracts,
service
contracts, maintenance contracts, franchise agreements, license
agreements, building permits and operating licenses;
(k) Trade names,
trademarks, and service marks (subject to any
franchise or license agreements relating thereto);
(l) Refunds and
deposits due or to become due from any utility
companies or governmental agencies;
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(m) Replacements and
substitutions for, modifications of, and
supplements, accessions, addenda and additions to, all of the
personal property described herein;
(n) Books, records,
correspondence, files and electronic media, and
all information stored therein;
together with all products and proceeds of all of the foregoing, in
any form,
including all proceeds received, due or to become due from any
sale, exchange or
other disposition thereof, whether such proceeds are cash or
non-cash in nature,
and whether represented by checks, drafts, notes or other
instruments for the
payment of money. The personal property described or referred to in
this
Paragraph 4.1 is hereinafter called the "Personal Property." The
security
interests granted in this Paragraph 4.1 are hereinafter severally
and
collectively called the "Security Interest." The Personal Property
includes and
the Security Interest extends to the particular items shown on
Schedule "D"
attached hereto. The parties hereto agree that this Deed of Trust
shall be
deemed and is a Security Agreement as defined in and for all
purposes under the
Uniform Commercial Code as in effect in the State of Arizona.
4.2
Notwithstanding anything herein to the contrary, the Trust
Property
shall not include and the Security Interest granted to Beneficiary
under
Paragraph 4.1 shall not extend to and shall not be in any
buildings, structures,
improvements, fixtures, machinery, equipment, furniture and
furnishings, or any
contracts, leases documents, instruments or agreements thereof;
hereafter
acquired by Trustor unless such property was acquired in whole or
in part with
the proceeds of the Trust Property or are replacements in whole or
in part for
the Trust Property.
4.3
The Security Interest shall be self-operative with respect to
the
Personal Property, but Trustor shall execute and deliver upon
receipt of written
request therefor from Beneficiary such additional security
agreements, financing
statements and other instruments as may be reasonably requested in
order to
impose the Security Interest more specifically upon the Personal
Property. The
Security Interest, at all times, shall be prior to any other
interests in the
Personal Property except any lien or security interest granted in
connection
with any Permitted Exception. Trustor shall act and perform as
necessary and
shall execute and file all security agreements, financing
statements,
continuation statements and other documents reasonably requested by
Beneficiary
to establish, maintain and continue the perfected Security
Interest. Trustor, on
demand, shall promptly pay all costs and expenses of filing and
recording.
4.4
Trustor shall not sell, transfer, assign or otherwise dispose of
any
Personal Property or any interest therein without obtaining the
prior written
consent of Beneficiary not to be unreasonably withheld, except
Personal Property
that Trustor is obliged to replace pursuant to the terms hereof.
Unless
Beneficiary then agrees otherwise in writing, all proceeds from any
permitted
sale or disposition in excess of that required for replacements
shall be paid to
Beneficiary to be applied to the Obligation, whether or not then
due. Trustor
shall keep the Personal Property free of all security interests or
other
encumbrances, except the Security Interest and any security
interests and
encumbrances granted in connection with any Permitted Exception.
Although
proceeds of Personal Property are covered hereby, this shall not be
construed to
mean that Beneficiary consents to any sale of the Personal
Property.
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4.5
Trustor shall keep and maintain the Personal Property in at least
as
good condition and repair as in existence as of the date hereof,
normal wear and
tear excepted, and shall promptly replace any part thereof that
from time to
time may become obsolete, badly worn or in a state of disrepair.
All such
replacements shall be free of any other security interest or
encumbrance, except
any security interest or encumbrance granted in connection with any
Permitted
Exception.
4.6
Except for purposes of replacement and repair, Trustor, without
the
prior written consent of Beneficiary not to be unreasonably
withheld, shall not
remove, or permit the removal of, any Personal Property from the
Premises.
4.7
Trustor hereby warrants, covenants and agrees that: (1) the
Personal
Property is or will be used primarily for business (other than
farm) purposes;
(ii) the Personal Property will be kept at the Premises; and (iii)
Trustor's
records concerning the Personal Property will be kept at Trustor's
address as
set forth in the beginning of this Deed of Trust or at the
Premises.
4.8
Trustor represents and warrants that (i) the name specified above
for
Trustor is the true and correct legal name of Trustor, and (ii) the
address
specified above is the address of Trustor's chief executive office.
Trustor
shall give Beneficiary immediate written notice of any change in
the location
of: (1) Trustor' s chief executive office, as set forth in the
beginning of this
Deed of Trust; (ii) the Personal Property or any part thereof; or
(iii) Trustor'
s records concerning the Personal Property. Trustor shall give
Beneficiary
immediate written notice of any change in the name, identity or
structure of
Trustor.
4.9
All covenants and warranties of Trustor contained in this Deed of
Trust
shall apply to the Personal Property whether or not expressly
referred to in
this Section 4. The covenants and warranties of Trustor contained
in this
Section 4 are in addition to, and not in limitation of, those
contained in the
other provisions of this Deed of Trust.
4.10
Upon its recording in the real property records, this Deed of
Trust
shall be effective as a financing statement filed as a fixture
filing. In
addition, a carbon, photographic or other reproduced copy of this
Deed of Trust
and/or any financing statement relating hereto shall be sufficient
for filing
and/or recording as a financing statement. The filing of any other
financing
statement relating to any personal property, rights or interests
described
herein shall not be construed to diminish any right or priority
hereunder.
SECTION 5. PROTECTION AND PRESERVATION OF THE TRUST PROPERTY
5.1
Trustor shall neither commit nor permit to occur any waste upon
the
Trust Property but shall at all times make or cause to be made all
commercially
reasonable repairs, maintenance, renewals and replacements as may
be necessary
to maintain the Trust Property in at least as good condition and
repair as in
existence as of the date hereof, normal wear and tear excepted.
Trustor shall
neither use nor permit the use of the Trust Property in material
violation of
any applicable statute, ordinance or regulation, including, without
limitation,
the Americans With Disabilities Act of 1990 and corresponding rules
and
regulations (the "ADA"), or any
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policy of insurance insuring the Trust Property. Trustor shall not
Release on,
under or about the Premises any Hazardous Substance nor permit any
third party
to do so except in substantial accordance with Environmental Law.
As used
herein, the following terms shall have the meanings specified
below:
The term "Environmental Law" shall mean any federal, state or local
statute,
ordinance, or regulation pertaining to health, industrial hygiene,
or the
environment, including, without limitation, the Comprehensive
Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. Section
9601, et seq. ("CERCLA"); the Resource Conservation and Recovery
Act of 1976, 42
U.S.C. Section 6901, et. seq. ("RCRA"); and the Arizona
Environmental Quality
Act, Title 49, Arizona Revised Statutes, and all rules adopted and
guidelines
promulgated pursuant to the foregoing.
The term "Hazardous Substance" shall include:
(a) those substances
included within the definitions of "hazardous
substances," "hazardous materials," "toxic substances," or
"solid
waste" in CERCLA, RCRA, and the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801, . and in the
regulations promulgated pursuant thereto;
(b) those substances
defined as "hazardous substances" in A.R.S.
Section 49- 201 and in rules adopted or guidelines promulgated
pursuant thereto;
(c) those substances
listed in the United States Department of
Transportation Table (49 CFR 172.101 and amendments thereto) or
by the Environmental Protection Agency as hazardous substances
(40 CFR Part 302 and amendments thereto); and
(d) all other
substances, materials and wastes that are, or that
become, regulated under, or that are classified as hazardous or
toxic under, any Environmental Law.
The
term "Release" shall mean any releasing, spilling, leaking,
pumping,
pouring, emitting, emptying, discharging, injecting, escaping,
leaching,
disposing, or dumping.
5.2
Trustor shall promptly complete any improvements that may be
commenced,
in good and workmanlike manner and in conformity with the ADA.
Trustor shall
repair and restore, in conformity with the ADA, any portions of the
Trust
Property that may be damaged or destroyed. Trustor shall pay when
due all claims
for work performed and materials furnished on or in connection with
the Trust
Property or any part thereof and shall pay, discharge, or cause to
be removed,
all mechanic's, artisan's, laborer's or materialman's charges,
liens, claims of
liens or encumbrances upon the Trust Property. Trustor shall
substantially
comply with all material laws, ordinances and regulations now or
hereafter
enacted, including, without limitation, the ADA, affecting the
Trust Property or
requiring any alterations or improvements to be made. Except as
required by law,
Trustor shall not remove, substantially alter, or demolish any
building
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or improvement included in the Trust Property without Beneficiary's
prior
written consent not to be unreasonably withheld.
5.3 (a) Trustor shall
provide and maintain policies of fire and extended
coverage insurance on the Trust Property in an amount not less than
the full
insurable value, on a replacement-cost basis, of the Trust Property
and, when
requested by Beneficiary, shall also provide and maintain policies
of insurance
in amounts commercially reasonable covering vandalism and malicious
mischief,
sprinkler leakage, rent abatement and/or business loss, flood
damage, earthquake
and all other risks commonly insured against by persons owning like
properties
in the locality of the Trust Property or commonly required by
prudent
institutional lenders making loans secured by liens against such
properties. All
such policies shall contain standard, non-contributory trust
beneficiary clauses
making losses payable to Beneficiary. Trustor shall also provide
and maintain
comprehensive public liability insurance in amounts reasonably
required by
Beneficiary and containing endorsements naming Beneficiary as an
additional
insured. All insurance policies shall be with companies from time
to time
reasonably approved by Beneficiary, shall provide that Beneficiary
is to receive
thirty (30) days' notice prior to cancellation and shall otherwise
be in form
and substance reasonably satisfactory to Beneficiary. Original
policies of
insurance shall be delivered to Beneficiary; renewal policies shall
be delivered
to Beneficiary thirty (30) days before the expiration of the
then-existing
policies with satisfactory proof that the premiums for renewal have
been paid.
(b) In the event of loss, Trustor shall give immediate notice
to
Beneficiary, and Beneficiary may make proof of loss if not made
promptly by
Trustor. Each insurance company is hereby authorized and directed
to make
payment for loss directly to an escrow account with a third party
bank selected
by Beneficiary in its reasonable discretion upon the written
discretion of
Beneficiary, instead of to Trustor or to Trustor and Beneficiary
jointly;
Beneficiary may apply all or any part of such insurance proceeds to
the payment
of the Obligation, whether or not then due, or the restoration or
repair of the
Trust Property. Beneficiary shall not be responsible for any
insurance, for the
collection of any insurance proceeds, or for the insolvency of any
insurer.
Application of insurance proceeds in an amount less than the full
outstanding
amount of the Obligations by Beneficiary shall not cure nor waive
any Event of
Default nor invalidate any act done hereunder because of any such
Event of
Default. In the event of the sale of the Trust Property under the
power of sale
herein granted to Trustee, or upon foreclosure of this Deed of
Trust as a
mortgage, or in the event Beneficiary or a receiver appointed by
the court shall
take possession of the Trust Property without sale, then all right,
title and
interest of Trustor in and to all insurance policies then in force
shall inure
to the benefit of and pass to the beneficiary in possession,
receiver or
purchaser at such sale, as the case may be. Beneficiary is hereby
appointed
attorney in fact for Trustor to assign and transfer such
policies.
(c) If the insurance proceeds are to be used for the restoration
and
repair of the Trust Property, they shall be held in a non-interest
bearing
escrow account with a third party bank selected by Beneficiary in
its reasonable
discretion (the "Restoration Account"). Trustor, at its expense,
shall promptly
prepare and submit to Beneficiary all plans and specifications
necessary for the
restoration and repair of the damaged Trust Property, together with
evidence
reasonably acceptable to Beneficiary setting forth the total
expenditure needed
for the restoration
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and repair based upon a fixed price contract with a reputable
builder and
covered by performance and labor and material payment bonds. The
plans and
specifications and all other aspects of the proposed restoration
and repair
shall be subject to Beneficiary's approval not to be unreasonable
withheld. In
the event the insurance proceeds held in the Restoration Account
are
insufficient to complete the restoration and repair, Trustor shall
deposit in
the Restoration Account an amount equal to the difference between
the amount
then held in the Restoration Account and the total contract price
for the
restoration and repair. Trustor may commence restoration and repair
of the
damaged Trust Property only when authorized in writing by
Beneficiary to do so
and thereafter shall proceed in a commercially reasonable manner
with the
restoration and repair until completed. Disbursements shall be made
from the
Restoration Account for the restoration and repair in accordance
with a
disbursement schedule, and subject to other terms and conditions,
reasonably
acceptable to Beneficiary. Disbursements from the Restoration
Account shall be
charged first against funds deposited by Trustor and, after such
funds are
exhausted, against the insurance proceeds deposited therein. In the
event the
amounts held in the Restoration Account exceed the cost of the
restoration and
repair of the damaged Trust Property, the excess funds shall be
disbursed to
Trustor to the extent of any amounts deposited therein by Trustor.
Any funds
remaining after such disbursement, at Beneficiary's option, may be
applied by
Beneficiary to the payment of the Obligation, whether or not then
due, or may be
disbursed to Trustor. All funds held in the Restoration Account are
hereby
assigned to Beneficiary as further security for the Obligation.
Beneficiary, at
any time, may apply all or any part of the funds held in the
Restoration Account
to the curing of any Event of Default.
5.4
Trustor shall maintain and preserve all patented and unpatented
mining
claims that are a part of the Trust Property. Trustor shall pay or
cause to be
paid all taxes and assessments of every kind, nature and
description levied or
assessed on or against the Trust Property and shall deliver to
Beneficiary, at
least ten (10) days before they become delinquent, receipts showing
payment of
all such taxes and assessments. Trustor shall maintain and preserve
all permits
associated with the Trust Property and shall pay or cause to be
paid all fees
and charges of every kind, nature and description with respect to
the permits
and shall deliver to Beneficiary at least ten (10) days before they
become
delinquent, receipts showing payment of all such fees and charges.
Trustor also
shall pay when due all dues and charges for water and water
delivery,
electricity, gas, sewers, waste removal, bills for repairs, and any
and all
other claims, encumbrances and expenses incident to the ownership
of the Trust
Property and when requested by Beneficiary, Trustor shall promptly
deliver to
Beneficiary evidence of payment of such expenses. Trustor may
contest in good
faith the validity or amount of any tax, assessment, charge or
encumbrance in
the manner provided by law, provided that Trustor shall have
furnished
Beneficiary a cash deposit to be held in an escrow account with a
third party
bank selected by Beneficiary in its reasonable discretion to
protect Beneficiary
against the creation of any lien on, or any sale or forfeiture of,
the Trust
Property. Upon the final determination of Trustor's contest,
Trustor shall
promptly pay all sums determined to be due. Any deposit or security
provided by
Trustor shall be returned to Trustor upon the final determination
of Trustor's
contest and the payment by Trustor of the sums, if any, determined
to be due.
5.5
Beneficiary may contest, by appropriate legal proceedings, the
validity
of any valuation for real or personal property tax purposes or of
any levy or
assessment of any real or personal property taxes against the Trust
Property
either in the name of Beneficiary or the name
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of Trustor or both. Trustor, upon notice and request by
Beneficiary, shall join
in any such proceedings. Trustor shall cooperate with Beneficiary
in any such
proceeding and execute any documents or pleadings required for such
purposes.
Trustor shall provide Beneficiary with a copy of the Notice of
Valuation within
ten (10) days after receipt (five (5) days in the case of personal
property). If
Beneficiary is successful in contesting any valuation, Trustor
shall reimburse
Beneficiary for all reasonable costs and legal expenses incurred by
Beneficiary
in connection with any such proceedings, but in no event shall
such
reimbursement exceed the tax savings achieved for the period
covered by the
Notice of Valuation. To facilitate the right of a Beneficiary to
contest any
real or personal property tax valuation, levy, or assessment as
described above,
Trustor does hereby make, constitute and appoint Beneficiary, and
its successors
and assigns, Trustor's true and lawful attorney-in-fact, in
Trustor's name,
place and stead, or otherwise, to file any claim or proceeding or
to take any
action, either in its own name, in that of its nominee, in the name
of Trustor,
or otherwise, to contest any real or personal property tax
valuation, levy, or
assessment. The power of attorney given herein is a power coupled
with an
interest and shall be irrevocable so long as any part of the
Obligation remains
unpaid or unperformed. Beneficiary shall have no obligation to
exercise any of
the foregoing rights and powers in any event.
5.6
In order to insure the payment of taxes and assessments that are
now,
or hereafter may be, a lien upon the Trust Property, and to insure
the payment
of all premiums on policies of insurance required herein, Trustor,
if required
by Beneficiary after an Event of Default, shall pay to Beneficiary
each month to
be held in an escrow account in a third party bank selected by
Beneficiary in
its reasonable discretion, in addition to any other payments
required hereunder,
an amount equal to the taxes and special assessments levied or to
be levied
against the Trust Property and the premium or premiums that will
become due and
payable to maintain the insurance on the Trust Property, all as
reasonably
estimated by Beneficiary (giving due consideration to the previous
year's taxes,
assessments and premiums) less all deposits therefore already made,
divided by
the number of months remaining before one month prior to the date
when the
taxes, assessments and premiums become delinquent. If amounts paid
to
Beneficiary under the terms of this paragraph are insufficient to
pay all taxes,
assessments and premiums as they become due, Trustor shall pay to
Beneficiary
upon demand all additional sums necessary to fully pay and
discharge these
items. All moneys paid to Beneficiary under the terms of this
paragraph may be
either held by Beneficiary in an escrow account with a third party
bank selected
by Beneficiary in its reasonable discretion to pay the taxes,
assessments and
premiums before the same become delinquent or applied to the
Obligation upon
payment by Beneficiary from its own funds of the taxes, assessments
and
premiums. To the extent provision is not made for payment pursuant
to this
paragraph, Trustor shall remain obligated to pay all taxes,
assessments and
premiums as they become due and payable. Beneficiary shall have no
liability to
Trustor for interest on any deposits.
5.7
Trustor hereby assigns, transfers and conveys to Beneficiary
all
compensation and each and every award of damages in connection with
any
condemnation for public or private use of, or injury to, the Trust
Property or
any part thereof, to the extent of the Obligation then remaining
unpaid, and all
such compensation and awards shall be paid directly to Beneficiary.
Beneficiary
may apply all or any part of such compensation and awards to the
payment of the
Obligation, whether or not then due, or to the restoration or
repair of the
Trust Property.
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SECTION 6. PROTECTION AND PRESERVATION OF BENEFICIARY'S
INTEREST
6.1
Trustor, by the payment of any such tax or taxes, shall protect
Beneficiary against any and all loss from any taxation of
indebtedness or deeds
of trust, direct or indirect, that may be imposed upon this Deed of
Trust, the
lien of this Deed of Trust on the Trust Property, or upon the
Obligation, by any
law, rule, regulation or levy of the federal government, any state
government,
or any political subdivision thereof. In the event the burden of
such taxation
cannot lawfully be shifted from Beneficiary to Trustor, Beneficiary
may declare
the entire Obligation due and payable sixty (60) days after notice
to Trustor.
6.2
If Trustor shall fail to pay any taxes, assessments, expenses
or
charges, to keep all of the Trust Property free from liens and
claims of liens,
to maintain and repair the Trust Property, or to procure and
maintain insurance
thereon, or otherwise fail to perform as required herein,
Beneficiary may
advance the monies necessary to pay the same, to accomplish such
maintenance and
repairs, to procure and maintain such insurance or to so perform;
Beneficiary is
hereby authorized to enter upon the Trust Property for such
purposes.
6.3
Upon written request by Beneficiary, and excluding any actions
by
Beneficiary to object to claims in Beneficiary's pending Chapter ii
bankruptcy
case, Trustor shall appear in and prosecute or defend any action or
proceeding
that may affect the lien or the priority of the lien of this Deed
of Trust or
the rights of Beneficiary hereunder and shall pay all costs,
expenses (including
the cost of searching title) and attorneys' fees incurred in such
action or
proceeding. Beneficiary may appear in and defend any action or
proceeding
purporting to affect the lien or the priority of the lien of this
Deed of Trust
or the rights of Beneficiary. Beneficiary may pay, purchase,
contest or
compromise any adverse claim, encumbrance, charge or lien that in
the judgment
of Beneficiary appears to be prior or superior to the lien
