Exhibit 10.4
(For Recorder's use only)
RECORDING REQUESTED BY:
Xxxxx Xxxxxx
Xxxxxxx & Xxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
AND WHEN RECORDED MAIL TO:
Xxxxx Xxxxxx
Xxxxxxx & Xxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Travelers Loan No. 030234459
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TRUST DEED, SECURITY AGREEMENT, ASSIGNMENT
OF RENTS AND FIXTURE FILING
THIS TRUST DEED, SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND FIXTURE
FILING, made this 21st day of April, 2004, by and between Xxxxx Xxxxxxxx, an
individual, Xxxxxxxx Knightsbridge, LLC, a California limited liability company,
and Xxxxxxxx Cattle Co., a general partnership, having an address of Xxx
Xxxxxxxx Xxxxx Xxxx, Xxxx, Xxxxxxxxxx 00000, hereinafter the TRUSTOR, First
American Title Insurance Company, having an address of 1850 Mt. Diablo Blvd.,
Suite 000, Xxxxxx Xxxxx, Xxxxxxxxxx 00000, hereinafter the TRUSTEE, and THE
TRAVELERS INSURANCE COMPANY, a corporation organized and existing under the laws
of the State of Connecticut, having its office 0000 Xxxxx Xxxx Xxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxxxx 00000, hereinafter the BENEFICIARY.
WITNESSETH: FOR GOOD AND VALUABLE CONSIDERATION, including the
indebtedness herein recited and the trust herein created, the receipt of which
is hereby acknowledged, TRUSTOR hereby irrevocably grants, bargains, sells,
transfers and conveys to TRUSTEE in trust, with power of sale, for the benefit
and security of BENEFICIARY, under and subject to the conditions hereinafter set
forth, all of TRUSTOR'S right, title and interest now owned or hereafter
acquired in and to the following described real estate situated in the County of
Napa, and the State of California, to wit:
SEE EXHIBIT A ATTACHED HERETO AND INCORPORATED HEREIN
BY REFERENCE FOR DESCRIPTION OF REAL PROPERTY
COVERED BY THIS TRUST DEED
TOGETHER WITH, all rents, issues, profits, royalties, income and other
benefits derived from the real property; all leases or subleases covering the
real property or any portion thereof, now or hereafter existing or entered into,
and all right, title and interest of
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TRUSTOR thereunder; all interests, estates or other claims, both in law and in
equity, which TRUSTOR now has or may hereafter acquire in the real property; all
easements, rights-of-way, tenements, hereditaments and appurtenances thereof and
thereto;
TOGETHER WITH all right, title and interest of TRUSTOR in all leases,
permits, allotments, licenses, and privileges pertaining to the real property,
whether or not appurtenant, from the United States or the State of California or
any department or other agency of either for the purpose of grazing, pasturing
or feeding livestock on any of the public lands of the United States or the
State of California;
TOGETHER WITH all oil, gas and mineral rights and profits pertaining to
the real property; all Water Rights (as such term is defined in Paragraph 10);
all cotton histories, all acreage rice allotments, corn allotments, wheat or
barley allotments pertaining to the real property presently held or hereafter
acquired by TRUSTOR; and all rights of TRUSTOR under Conservation Reserve
Contracts (CRP) now existing or hereafter made that affect the real property;
all right, title and interest of TRUSTOR, now owned or hereafter acquired, in
and to any land lying within the right-of-way of any road, street, or highway
adjoining the real property; any and all buildings, fixtures, improvements, and
appurtenances now or hereafter erected thereon or belonging thereto (herein
referred to as "Improvement" or "Improvements");
TOGETHER WITH all right, title and interest of TRUSTOR in and to all
water production, distribution, irrigation and drainage equipment, and
facilities, all frost protection equipment and facilities, all crop storage
equipment and facilities, all livestock handling facilities, including gates,
panels, chutes and fences, and including all pumps, pumping stations, motors,
panels, switchboxes, gearheads, booster pumps, transformers, engines, machinery,
tanks, reservoirs, sumps, pivots, hoses, drip hoses, underground pipeline, fan
jets, pipes, sprinklers, flumes, wheel lines, drip irrigation lines, wind
machines, grain bins, grain augers and elevators and other machinery and
equipment now or hereafter affixed (whether actually or constructively) to the
real property, or used for the production of water on said real property or for
the irrigation or drainage thereof, and all additions thereto and replacements
thereof; all of which, to the extent permitted by applicable law, shall be
deemed an accession to the freehold and a part of the real property as between
the parties hereto. All of the foregoing property and interests conveyed to
TRUSTEE are herein collectively referred to as the "Property".
This TRUST DEED is given to secure:
ONE: Payment of the indebtedness (the "Loan") evidenced by a certain
promissory note dated April 21, 2004 in the principal sum of Twenty Million
Dollars ($20,000,000), with a final maturity of date of March 1, 2009
(hereinafter referred to as the "Note") and interest thereon according to the
terms of the Note with any and all extensions, renewals, modifications or
substitutions thereof and each and every debt, liability and obligation of every
type and description, including guarantees or accommodations, which TRUSTOR may
now or at any time hereafter, owe or be obligated to BENEFICIARY, whether such
debt, liability or obligation now exists, is direct or indirect, due or to
become due, absolute or contingent, primary or secondary, liquidated or
unliquidated, or joint, several, or joint and several, when evidenced by a
promissory note or other document reciting that such obligation is secured by
this TRUST DEED.
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TWO: Payment of all other moneys herein agreed or provided to be paid
by TRUSTOR, including sums advanced or expended by BENEFICIARY or TRUSTEE, and
interest thereon, pursuant to the provisions hereof, and including sums advanced
or expended by BENEFICIARY or TRUSTEE for the protection of the Property or for
the protection of the interest of BENEFICIARY in the Property.
THREE: Performance and discharge of each and every obligation, promise
and agreement of TRUSTOR herein contained or incorporated herein by reference,
including each and every obligation, promise and agreement of TRUSTOR contained
in any and all loan applications, commitment letters, security agreements,
supplemental agreements, assignments of lessor's interest in leases, or other
instruments of security executed by TRUSTOR as of even date herewith or at any
time subsequent to the date hereof for the purpose of further securing any
indebtedness hereby secured, or any part thereof, or any further advancements or
further or additional loans of any sums hereafter made by BENEFICIARY to TRUSTOR
during the continuance of this TRUST DEED and secured hereby, or for the purpose
of supplementing or amending this TRUST DEED or any instrument secured hereby
(hereinafter collectively referred to, together with the Note and this TRUST
DEED, as the "Loan Documents").
The Note and all such debts, liabilities, and obligations referred to
in Paragraphs One, Two and Three above, are all collectively hereinafter
referred to as the "Obligations".
TRUSTOR warrants, covenants and agrees as follows:
1. PAYMENT AND PERFORMANCE: TRUSTOR shall pay and perform the
Obligations when due.
2. WARRANTY OF TITLE: TRUSTOR is lawfully seized and possessed of good
and indefeasible title to the Property, and TRUSTOR hereby warrants the Property
to be free and clear of all liens and encumbrances not set out herein; TRUSTOR
will defend the title against any claims by any party at any time during the
term of this TRUST DEED; and TRUSTOR has good, right and lawful authority to
grant to TRUSTEE and BENEFICIARY the rights in the Property covered by this
TRUST DEED. If BENEFICIARY is made a party defendant to any litigation
concerning this TRUST DEED or the Property or any part thereof or interest
therein, or the occupancy thereof by TRUSTOR, then TRUSTOR shall indemnify,
defend and hold BENEFICIARY harmless from all liability by reason of said
litigation, including reasonable attorneys' fees and expenses incurred by
BENEFICIARY in any such litigation, whether or not any such litigation is
prosecuted to judgment.
3. FULL FORCE AND EFFECT: The provisions of this TRUST DEED shall
remain in full force and effect through any extension of time for payment of the
Obligations, and until the Property is reconveyed or released.
4. To protect the Property, TRUSTOR shall
(a) TAXES AND OTHER CHARGES: Pay before the same become
delinquent all taxes and assessments, and other charges against the Property
including assessments on Water Rights (as defined in Paragraph 10), all payments
required to be made under the provisions of any leases, permits, allotments or
licenses relating to grazing, pasturing,
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or feeding livestock on any public lands, the rights under which are covered
hereby, and all other taxes and assessments of any kind or nature whatsoever
that are assessed or imposed upon the Property or become due and payable, and
that create a lien upon the Property or any part thereof, and in default
thereof, BENEFICIARY may pay the same at the cost of TRUSTOR. TRUSTOR covenants
to furnish to BENEFICIARY, upon request, official receipts of the appropriate
taxing authority or other proof satisfactory to BENEFICIARY evidencing the
payment thereof.
(b) PRESERVATION, REPAIR AND USE OF PROPERTY: Not commit
waste, or authorize the repair, demolition, modification or removal of any of
the structures, fixtures, or improvements on the Property, or do or permit any
act that would result in the creation of a lien upon the Property or the
structures, fixtures or improvements thereon without first obtaining prior
written consent of BENEFICIARY, and otherwise to maintain the Property in as
good condition as at present. Upon any failure to maintain, BENEFICIARY, at its
option, may cause reasonable repair and maintenance work to be performed at the
cost of TRUSTOR, and BENEFICIARY, acting through its employees, agents or
attorneys, by a receiver to be appointed by the court, or by an independent
third party contractor retained by BENEFICIARY is hereby authorized at its
option to enter upon and take possession of the Property for such purpose.
(c) WATER RIGHTS: Proceed with due diligence to perfect any
existing or future Water Rights (as defined in Paragraph 10). In the event
TRUSTOR fails to so proceed to perfect such Water Rights, BENEFICIARY or TRUSTEE
may at its option (but shall not be required to) so perfect such Water Rights,
or, at the election of BENEFICIARY, may require that the Obligations shall
become immediately due and payable, or may do both. If TRUSTOR is or becomes the
owner of irrigable land subject to and in excess of the land limitation
provisions of the Reclamation Act of 1902, the Omnibus Adjustment Act of 1926,
the Reclamation Reform Act of 1982 or any act or law supplementary thereto or
any rule or regulation promulgated thereunder and, pursuant to the provisions
thereof, is required to designate part thereof as non-excess and part as excess
lands, TRUSTOR agrees to designate the irrigable lands on the Property, or so
much thereof as may be so designated within said limitation provisions, as
non-excess lands. TRUSTOR also shall not encumber, sell, lease, assign, or
otherwise transfer any Water Rights without the prior written consent of
BENEFICIARY. In particular, and without limiting the generality of the
foregoing, TRUSTOR shall not, without the prior written consent of BENEFICIARY,
agree to any sale or transfer of any state water project entitlement that would
deprive the Property of Water Rights.
(d) CROP HISTORY, ACREAGE ALLOTMENT AND CRP: If the Property
is now subject to a crop history, an acreage allotment, or a Conservation
Reserve Contract (CRP), TRUSTOR shall maintain the full history or allotment now
or hereafter appertaining to the Property, and will plant and harvest the
Property to said crop to the full extent required or permitted by law or
governmental regulations to maintain said history or allotment including any
increase in allotment which may, from time to time, be attributable to the
Property, will stay in compliance with any such CRP contract and will not
pledge, transfer, sell, lease or otherwise encumber, dispose or convey said
history, allotment or CRP contract or any part thereof, without the prior
written consent of BENEFICIARY, nor do any other act or fail to perform any
requirement of any governmental rule or regulation required from time to time to
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maintain or improve the history or allotment on the Property or to stay in
compliance with such CRP contracts now existing or hereafter made.
(e) OBLIGATIONS OF TRUSTOR: Comply with all laws, ordinances,
regulations, covenants, conditions and restrictions affecting the Property, or
requiring alterations or improvements to be made thereon, and TRUSTOR shall not
suffer nor permit any act to be done in or upon the Property in violation
thereof. TRUSTOR shall observe and comply with all conditions and requirements
necessary to preserve and extend any and all rights, licenses, permits
(including zoning variances, special exceptions and nonconforming uses),
privileges, franchises and concessions that are applicable to the Property or
that have been granted to or contracted for by TRUSTOR in connection with any
existing or presently contemplated use of the Property. TRUSTOR represents and
warrants that prior use of the Property has been in compliance with all
applicable laws and regulations.
(f) HAZARDOUS WASTE AND SUBSTANCES: Warrant, and does hereby
warrant that, except as set forth in the Environmental Disclosure Statement
delivered by TRUSTOR to BENEFICIARY (the "Environmental Disclosure Statement"),
there has not been, since the date TRUSTOR acquired title to the Property any
release or discharge of any type whatsoever (including any "release" (as defined
in 42 U.S.C. Section 9601 (22)) or threat of any release or discharge (such a
release or threatened release being hereafter referred to as a "Release") of any
"hazardous substances" (as defined in 42 U.S.C. Section 9601 (14) or as defined
as hazardous or toxic under any other federal, state, or local law), petroleum,
including crude oil or any fraction thereof, or natural gas liquids, liquefied
natural gas, or synthetic gas (all such items being hereafter referred to as
"Hazardous Substances") on, upon or into the Property and, to TRUSTOR'S
knowledge, there has never been any Release on, upon or into the Property nor
on, upon or into any real property adjoining or in the vicinity of the Property
which could have come to be located upon the Property or the water or ground
water thereon or thereunder. TRUSTOR further warrants that, except as disclosed
in the Environmental Disclosure Statement: (a) to the best of TRUSTOR'S
knowledge, the Property has never been used for a mine, a landfill, a dump, or
other disposal facility; (b) TRUSTOR has no knowledge of any underground storage
tanks of any kind or character, whether empty or containing substances of any
nature, located or ever located in the past within the Property, and from the
date of acquisition by TRUSTOR, the Property and the use thereof, including the
use of any and all such underground storage tanks described on the Environmental
Disclosure Statement, has been and is in compliance with all applicable laws,
statutes, ordinances, rules and regulations of all governmental and
quasi-governmental authorities, specifically including all laws, statutes,
ordinances, rules and regulations relating to environmental protection, toxic
waste, underground storage tanks, and hazardous substance handling, treatment,
storage and disposal (hereafter "Environmental Regulations"); (c) TRUSTOR has
received no notice of any violation or any alleged violation of any
Environmental Regulation from any governmental entity or agency with respect to
the Property, and there is not now nor has there ever been any other
investigation or report involving the Property by any governmental entity or
agency which in any way relates to Hazardous Substances; (d) to the best of
TRUSTOR'S knowledge, no person, party or private or governmental agency or
entity has given any notice of or asserted or threatened to assert any claim,
cause of action, penalty, cost or demand for payment or compensation, whether or
not involving any injury or threatened injury to human health, the environment
or natural resources, resulting or allegedly resulting from any violation of any
Environmental Regulation in
5
connection with the Property; (e) to the best of TRUSTOR'S knowledge, there are
not now, nor have there ever been, any actions, suits, proceedings or damage
settlements relating in any way to Hazardous Substances, in, upon, under, over
or from the Property; (f) to the best of TRUSTOR'S knowledge, the Property is
not listed in the United States Environmental Protection Agency's List of
Hazardous Waste Sites or any other list of "hazardous substance" sites
maintained by any federal, state or local governmental agency. If TRUSTOR
becomes aware that any of the representations and warranties contained in this
paragraph are untrue, but for the fact that such representations and warranties
were qualified by any limitation based on TRUSTOR'S knowledge, TRUSTOR shall
notify BENEFICIARY thereof within ten (10) days of TRUSTOR'S becoming aware
thereof. TRUSTOR further agrees as follows:
(i) NOTICE OF HAZARDOUS SUBSTANCES AND
RELATED CLAIMS: TRUSTOR shall provide BENEFICIARY with copies
of any notifications of (A) Releases of Hazardous Substances,
(B) any violation or any alleged violation of any
Environmental Regulation, (C) or of any environmental hazards
or potential hazards, which are given by or on behalf of
TRUSTOR to any federal, state or local agencies or authorities
or which are received by TRUSTOR from any federal, state, or
local agencies or authorities with respect to the Property.
TRUSTOR shall provide notice to BENEFICIARY if any person,
party, or private or governmental agency or entity has given
any notice of or asserted or threatened to assert any claim,
cause of action, penalty, cost, or demand for payment or
compensation, whether or not involving any injury or
threatened injury to human health, the environment or natural
resources, which results or allegedly results from any
violation of any Environmental Regulation in connection with
the Property. TRUSTOR shall provide notice to BENEFICIARY of
any actions, suits, proceedings, or damage settlements
relating in any way to Hazardous Substances, in, upon, under,
over, or from the Property or if the Property shall ever
become listed in the United States Environmental Protection
Agency's List of Hazardous Waste Sites or any other list of
"hazardous substance" sites maintained by any federal, state
or local governmental agency. Copies of any notices sent or
received by TRUSTOR shall be sent to BENEFICIARY promptly, but
no later than ten (10) days, after their being mailed or
delivered to the governmental agencies or authorities or other
person and within ten (10) days after they are received by
TRUSTOR.
(ii) NOTICE OF CHEMICAL DISCLOSURES: TRUSTOR
agrees to provide BENEFICIARY with copies of all emergency and
hazardous chemical inventory forms (hereinafter "Notices")
previously given by TRUSTOR with respect to the Property, as
of the date hereof, to any federal, state or local
governmental authority or agency as required pursuant to the
Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C. Section 11011 et. seq., and to provide BENEFICIARY with
copies of all such Notices subsequently sent to any such
governmental authority or agency with respect to the Property
as required pursuant to the Emergency Planning and Community
Right-to-Know Act of 1986. Such copies of subsequent Notices
shall be sent to BENEFICIARY concurrently with their being
mailed to any such governmental authority or agency.
(iii) LIMITATIONS ON USE OF HAZARDOUS
SUBSTANCES: TRUSTOR covenants and agrees that (A) it shall not
permit the
6
Property to be used for a mine, a landfill, a dump, or other
disposal facility, (B) it shall not permit any underground
storage tanks of any kind or character, whether empty or
containing substances of any nature to be located on the
Property, (C) it shall not locate, produce, treat, transport,
incorporate, discharge, emit, release, deposit or dispose of
any Hazardous Substance in violation of any Environmental
Regulation in, upon, under, over or from the Property, (D) it
shall not permit any Hazardous Substances to be located
(except for farm equipment fuel located in above-ground
storage tanks that are in compliance with applicable
Environmental Regulations), produced, treated, transported,
incorporated, discharged, emitted, released, deposited,
disposed of on the Property or to escape therein, thereupon,
thereunder, thereover or therefrom in violation of any
Environmental Regulation, and (E) it shall comply with all
Environmental Regulations which are applicable to the
Property.
(iv) INDEMNITY: TRUSTOR hereby covenants and
agrees to indemnify, protect and hold harmless BENEFICIARY
from and against any and all claims, demands, liabilities and
costs, including attorneys' fees, arising from (a) any
Release, actual or alleged, of any Hazardous Substances upon
or about the Property or respecting any products or materials
previously, now or hereafter located upon, delivered to or in
transit to or from the Property, or respecting any products or
materials previously, now or hereafter located upon, delivered
to or in transit to or from the Property, regardless of
whether such Release or threat of Release or alleged Release
or threat of Release has occurred prior to the date hereof or
hereafter occurs and regardless of whether such Release occurs
as the result of the negligence or misconduct of TRUSTOR or
any third party or otherwise, (b) any violation, actual or
alleged, of or any other liability under or in connection with
any Environmental Regulation, including the Resource
Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act
("CERCLA"), the Emergency Planning and Community Right-to-Know
Act of 1986, as same may be amended, or any other
environmental protection or toxic waste or hazardous substance
handling, treatment, storage, or disposal laws, statutes,
ordinances, rules or regulations, relating to the Property or
respecting any products or materials previously, now or
hereafter located upon, delivered to or in transit to or from
the Property, regardless of whether such violation or alleged
violation or other liability has occurred or arisen prior to
the date hereof or hereafter occurs or arises and regardless
of whether such violation or other liability occurs or arises
as the result of the negligence or misconduct of TRUSTOR or
any third party or otherwise. Notwithstanding a provision in
the TRUST DEED or any Loan Document, if any, that limits the
liability of TRUSTOR hereunder, this indemnity shall survive
the extinguishment of the lien of this TRUST DEED by
foreclosure or reconveyance or otherwise as to any such
Release or any such violation, alleged violation or other
liability occurring or arising prior to such foreclosure or
reconveyance, and this covenant shall survive such
extinguishment.
(v) ENVIRONMENTAL AUDITS: At any time after
an Event of Default and from time to time thereafter, if
BENEFICIARY so requests, TRUSTOR shall have any environmental
review, audit, assessment and/or report relating to the
Property heretofore provided to BENEFICIARY updated, at
TRUSTOR'S sole cost and expense, by an engineer or scientist
acceptable to BENEFICIARY, and shall
7
promptly provide BENEFICIARY with a copy of all such audits.
BENEFICIARY may also at its option and at TRUSTOR'S sole
expense, contract for a "Phase 1" environmental inspection
report prepared and certified by an environmental consultant
satisfactory to BENEFICIARY to determine whether the Property
complies with all Environmental Regulations. If, based on a
Phase 1 environmental audit, BENEFICIARY determines that
additional testing or investigation including a Phase II
environmental audit, should be performed on the Property,
BENEFICIARY may contract for such testing, which shall be
performed at TRUSTOR'S sole expense. TRUSTOR shall cooperate
in all reasonable ways with BENEFICIARY in connection with any
such audits or tests.
In addition to the other rights and remedies provided hereunder,
BENEFICIARY and TRUSTEE shall have the following rights and remedies: With or
without notice (except for such notice as is required by applicable law), and
without releasing TRUSTOR from any obligation hereunder, BENEFICIARY may, but
shall not be obligated to, cure any breach by TRUSTOR of this Paragraph 4(f)
and, in connection therewith, BENEFICIARY or its agents, acting by themselves or
through a court-appointed receiver, or through an independent third party
contractor, may enter upon the Property or any part thereof and perform such
acts and things as BENEFICIARY deems necessary or desirable to inspect,
investigate, assess, and protect the security hereof. BENEFICIARY may also
obtain a court order to enforce BENEFICIARY'S right to enter and inspect the
Property pursuant to California Civil Code Section 2929.5; and to have a
receiver appointed pursuant to California Code of Civil Procedure Section 564 to
enforce BENEFICIARY'S right to enter and inspect the Property for Hazardous
Substances.
5. DEPOSITS FOR TAXES AND INSURANCE PREMIUMS: BENEFICIARY may, at its
option, which may be exercised at any time after the occurrence of an Event of
Default, require TRUSTOR to deposit with BENEFICIARY on the first day of each
month, in addition to making payments of regular installments of principal and
interest, until the Note is fully paid, an amount equal to one-twelfth (1/12) of
the yearly taxes, assessments and other similar charges and/or of the yearly
premiums for all insurance as estimated by BENEFICIARY in order to accumulate
with BENEFICIARY sufficient funds to pay such amounts thirty (30) days prior to
their due dates. Such deposits shall not be, nor be deemed to be, trust funds,
but may be commingled with the general funds of BENEFICIARY, and no interest
shall be payable in respect thereof. Upon demand by BENEFICIARY, TRUSTOR shall
deliver to BENEFICIARY such additional monies as are necessary to make up any
deficiencies in the amounts necessary to enable BENEFICIARY to pay such premiums
when due. Upon the occurrence of an Event of Default, BENEFICIARY may apply such
deposits in BENEFICIARY'S possession to the reduction of the sums secured
hereby, in such order, priority and proportions as BENEFICIARY shall determine,
in its sole and absolute discretion, and any amount under this paragraph
remaining on account of such deposits and any return premium received from
cancellation of any insurance policy by BENEFICIARY upon foreclosure of this
TRUST DEED. Upon an assignment of this TRUST DEED by BENEFICIARY and upon
assumption by the assignee thereof of the obligations of BENEFICIARY as escrow
holder, BENEFICIARY shall have the right to pay over the balance of such
deposits in its possession to the assignee. BENEFICIARY shall thereupon be
completely released from all liability with respect to such deposits, and
TRUSTOR shall look solely to the assignee or transferee with
8
respect thereto. This provision shall apply to every transfer of such deposits
to a new assignee. All deposits are hereby pledged as additional security for
the Obligations and shall be held by BENEFICIARY and be applied for the purposes
provided herein, and shall not be subject to the direction or control of
TRUSTOR. Notwithstanding anything herein to the contrary, BENEFICIARY shall not
be liable for any failure to apply the deposits unless TRUSTOR shall have
requested BENEFICIARY in writing to make application of such deposits on hand to
the payment of the taxes or premiums for the payment of which such deposits were
made, accompanied by the bills therefor.
6. PROTECTION OF SECURITY: BENEFICIARY or TRUSTEE, without obligation
to do so and without notice to or demand upon TRUSTOR and without releasing
TRUSTOR from any obligations or Events of Default hereunder, may appear in and
defend any action or proceeding purporting to affect TRUSTOR'S obligations
and/or the Note, the security hereof, or the rights or powers of BENEFICIARY or
TRUSTEE, and TRUSTOR shall pay all costs and expenses, including costs of
evidence of title and reasonable attorney's fees, in such action or proceeding
in which BENEFICIARY may appear.
7. ABSOLUTE ASSIGNMENT OF RENTS AND PROFITS: TRUSTOR hereby absolutely,
presently and unconditionally assigns all the present and future rents, income,
issues and profits (the "Rents") to BENEFICIARY, and hereby gives to and confers
upon BENEFICIARY the right, power and authority during the continuance of this
TRUST DEED to collect the Rents of the Property and of any personal property
located thereon with or without taking possession of the Property affected
hereby. BENEFICIARY, however, hereby grants to TRUSTOR a license for TRUSTOR'S
collection and retention of such Rents as they accrue and become payable (but no
more than one month in advance) so long as TRUSTOR is not, prior to or at such
times, in default under any of the Loan Documents. This license will terminate
immediately upon the occurrence of any Event of Default. This assignment of
Rents is intended to be an absolute assignment from TRUSTOR to BENEFICIARY and
not merely the passing of a security interest.
Upon the occurrence of an Event of Default, BENEFICIARY may at any
time, either in person, by agent, or by a receiver to be appointed by a court,
or through a third party independent contractor, without notice and without
regard to the adequacy of any security for the indebtedness secured hereby and
without being deemed a mortgagee in possession:
(a) enter upon and take possession of, manage and operate the
Property or any part thereof, and either with or without taking possession of
the Property, in its own name or in the name of TRUSTOR sue for or otherwise
collect such Rents, including those past due and unpaid, and apply the same,
less costs and expenses of operation and collection, including reasonable
attorney's fees, upon any indebtedness secured hereby, and in such order as
BENEFICIARY may determine;
(b) perform such acts of repair or protection as may be
necessary or proper to conserve the value of the Property; and
9
(c) make, cancel, enforce or modify leases, obtain and evict
tenants, and fix or modify rents or do any acts which BENEFICIARY deems proper
to protect the security hereof.
Unless TRUSTOR and BENEFICIARY agree otherwise in writing, any
application of Rents to any indebtedness secured hereby shall not extend or
postpone the due date of the installment payments as provided in said Note or
change the amount of such installments. The entering upon and taking possession
of the Property, the collection of such Rents, or the application thereof as
described herein, shall not waive or cure any Event of Default or notice of
default hereunder, or invalidate any act done in response to such Event of
Default or pursuant to such notice.
TRUSTOR also assigns to BENEFICIARY, as further security for the
performance of the Obligations secured hereby, all prepaid rents and all monies
which may have been or may hereafter be deposited with TRUSTOR by a lessee of
the Property, to secure the payment of any rent, and upon the occurrence of an
Event of Default, TRUSTOR agrees to deliver such rents and deposits to the
BENEFICIARY. Delivery of written notice of BENEFICIARY'S exercise of the rights
granted herein, to any tenant occupying said premises shall be sufficient to
require said tenant to pay said rent directly to BENEFICIARY until further
notice.
8. CONDEMNATION; MINERALS PAYMENTS: If the Property, or any part
thereof or interest therein, is taken or damaged permanently or temporarily by
reason of any public improvement or condemnation proceeding, or by any
proceeding or purchase in lieu thereof, including a change of grade of streets,
or in any other manner, or if TRUSTOR shall receive or be entitled to receive
any compensation for any loss in value of or any damage to the Property from any
person or entity holding any interest in mineral rights (including oil and gas)
associated with the Property (such compensation, which shall not include
contractual royalty or lease payments is hereafter referred to as "Minerals
Payments") or should TRUSTOR receive any notice or other information regarding
such a matter or proceeding, TRUSTOR shall give prompt written notice thereof to
BENEFICIARY and will deliver to BENEFICIARY copies of any and all papers served
in connection therewith. Any award of damages, severance damages, settlement, or
compensation in connection with any eminent domain action for public use of or
an injury to the Property or with any Minerals Payments, or any part thereof, is
hereby assigned by TRUSTOR to BENEFICIARY, and all money received by BENEFICIARY
may, in BENEFICIARY'S sole discretion, be applied to the indebtedness secured by
this TRUST DEED, or released by it in the same manner and with the same effect
as herein provided for the disposition of the proceeds of insurance. Neither the
application nor the release of any such sums shall cure or waive any default or
notice of default hereunder or invalidate any act done pursuant to such notice,
nor shall anything in this section affect the liability of TRUSTOR for payment
of the entire balance of the Obligations secured hereby. BENEFICIARY or TRUSTEE,
without obligation to do so, may appear in and prosecute in its own name any
action or proceedings or to make any compromise or settlement in connection with
such taking or damage.
9. INSURANCE, CASUALTY, GENERAL LIABILITY AND RESTORATION:
10
TRUSTOR shall, at TRUSTOR'S sole cost and expense, keep the
improvements, buildings and other fixtures upon the Property insured against
such hazards and in such amounts and form as may be required by BENEFICIARY.
After the happening of any casualty to the Property or any part thereof, TRUSTOR
shall give prompt written notice thereof to BENEFICIARY.
TRUSTOR shall further maintain general liability insurance in an amount
not less than $1,000,000.00 per occurrence, acceptable to BENEFICIARY, with
Citigroup, Inc., its affiliates, subsidiaries, successors, and assigns, ATIMA,
named as additional insured and with companies satisfactory to BENEFICIARY, with
respect to damages or injuries arising from use or occupation of the Property
and against such risks or hazards as BENEFICIARY from time to time reasonably
may designate. TRUSTOR shall observe and comply with the requirements of all
policies of general liability, fire and other policies of insurance at any time
in force with respect to the Property.
In the event of any damage to or destruction of the Improvements,
BENEFICIARY shall have the option, in its sole discretion, of applying all or
part of the insurance proceeds (a) to the Obligations, in such order, priority
and proportions as BENEFICIARY may determine in its sole and absolute
discretion; (b) to the restoration of the improvements; or (c) to TRUSTOR.
In the event of such loss or damage, all proceeds of insurance shall be
payable to Citigroup, Inc., and TRUSTOR hereby assigns said proceeds to
Citigroup, Inc. and authorizes and directs any affected insurance company to
make payment of such proceeds directly to Citigroup, Inc. BENEFICIARY is hereby
authorized and empowered by TRUSTOR to settle, adjust or compromise any claims
for loss, damage or destruction under any policy or policies of insurance.
Except to the extent that insurance proceeds are received by
BENEFICIARY and applied to the Obligations, nothing herein contained shall be
deemed to excuse TRUSTOR from repairing or maintaining the Property as provided
in this TRUST DEED or restoring all damage or destruction to the Property,
regardless of whether or not there are insurance proceeds available or whether
any such proceeds are sufficient in amount, and the application or release by
BENEFICIARY of any insurance proceeds shall not cure or waive any default or
notice of default under this TRUST DEED or invalidate any act done pursuant to
such notice.
All insurance policies required herein shall be written with companies
satisfactory to BENEFICIARY, and shall have a rating of (A-)(VIII) or higher
according to the most recent edition of Best's Insurance Guide, shall contain
non-contributory standard mortgagee clauses, shall name Citigroup, Inc., its
affiliates, subsidiaries, successors, and assigns ATIMA, as an additional
insured or, at the option of BENEFICIARY, contain a lender's loss payable
endorsement, shall be maintained throughout the term of the Note without cost to
BENEFICIARY, and shall contain such provisions as BENEFICIARY deems necessary or
desirable to protect its interest including a provision for thirty (30) days
prior written notice to Citigroup, Inc. of cancellation of the Policy or any
changes in the risk or coverages insured. At least fifteen (15) days prior to
the expiration of each policy of insurance, TRUSTOR shall furnish BENEFICIARY
with evidence satisfactory to BENEFICIARY of the payment of the
11
premium and the reissuance of a policy continuing insurance in force as required
by this TRUST DEED. In the event TRUSTOR fails to provide, maintain, keep in
force or deliver and furnish to BENEFICIARY the policies of insurance required
by this paragraph, BENEFICIARY may procure such insurance for such risks
covering BENEFICIARY'S interest, and TRUSTOR shall pay all premiums thereon
promptly upon demand by BENEFICIARY, and until such payment is made by TRUSTOR,
the amount of all such premiums, together with interest thereon at the default
rate as defined in the Note (the "Default Rate"), shall be secured by this TRUST
DEED.
10. SECURITY INTEREST: TRUSTOR hereby grants to BENEFICIARY a security
interest in all of the personal property identified on the first few pages of
this TRUST DEED and in all of the following property, whether now owned or
hereafter acquired, affixed to, located on or at the Property and used in
connection with the operation of the Property or the Improvements (hereinafter
referred to collectively as the "Collateral").
EQUIPMENT: All equipment of TRUSTOR, including all machinery, vehicles,
fixtures, manufacturing equipment, farm machinery and equipment, shop equipment,
office and recording equipment, parts, and tools, including those items
described in Exhibit "B" attached hereto and by this reference incorporated
herein.
WINERY EQUIPMENT: All winery equipment of TRUSTOR, including all
presses, destemmers, must pumps, stainless steel cooperage, refrigeration
equipment and filters including those items described in Exhibit "B" attached
hereto and by this reference incorporated herein.
CROP STORAGE, IRRIGATION, DRAINAGE, LIVESTOCK HANDLING AND FROST
PROTECTION EQUIPMENT: All right, title and interest of TRUSTOR in and to all
water rights, water production, distribution, irrigation, and drainage equipment
and facilities, all frost protection equipment and facilities, all crop storage
equipment and facilities, all livestock handling facilities, including gates,
panels, chutes and fences, and including all pumps, pumping stations, motors,
panels, switchboxes, transformers, engines, gearheads, booster pumps, machinery,
tanks, reservoirs, sumps, pivots, hoses, fan jets, pipes, sprinklers, flumes,
wheel lines, drip irrigation lines, drip hose, underground pipeline, fences,
gates, chutes, wind machines, grain bins, grain augers and elevators, and other
machinery, equipment and facilities now or hereafter installed on, affixed to
(whether actually or constructively), placed upon, or used in connection with or
for the benefit of the Property, including any such items not located on the
property but used to deliver water to the Property, whether now owned or
hereafter acquired, and all replacements, additions and substitutions made
thereto, and including all insurance proceeds on any of said collateral,
including, but not limited to, those items described in Exhibit "B" attached
hereto and by this reference incorporated herein.
FARM PRODUCTS: All farm products of TRUSTOR, including all crops
growing or to be grown on the Property; and all crop insurance payments. "Crops"
includes annual and perennial crops growing or to be grown, whether harvested or
unharvested, regardless of where stored; all products, purchases and exchanges
thereof; all seed, fertilizers, herbicides, insecticides, chemicals and supplies
used in connection therewith; all warehouse receipts, letters of entitlement
issued by the Commodity Credit Corporation, or other documents issued for grain
stored or to be stored, including all of TRUSTOR'S rights, title and interest in
said receipts,
12
letters and documents; and all government subsidy payments of whatever kind or
form, including payment-in-kind, storage, deficiency and interest payments.
CROPS; GOVERNMENT PAYMENTS: All crops growing or to be grown on the
Property; all crop insurance payments, and all government subsidy payments of
whatever kind or form, including payment-in-kind, storage, deficiency and
interest payments. "Crops" includes annual and perennial crops and crops grown
on trees or vines.
WATER RIGHTS: The ground water on, under, pumped from or otherwise
available to the Property or any other water rights appurtenant to the Property,
whether as a result of groundwater rights, contractual rights, or otherwise and
whether riparian, appropriative, or otherwise; the right to remove or extract
any such ground water including any permits, rights or licenses granted by any
governmental authority or agency and any rights granted or created by any
easement, covenant, agreement or contract with any person or entity; and any
rights to which the Property is entitled with respect to surface water, whether
such rights are appropriative, riparian, prescriptive or otherwise and whether
or not pursuant to permit or other governmental authorization; the right to
store any such water; any water right, water allocation for water not yet
delivered, distribution right, delivery right, water storage right, or other
water-related entitlement appurtenant to or otherwise applicable to the Property
by virtue of the Property being situated within the boundaries of any
governmental water district or within the boundaries of any private water
company, mutual water company, or other non-governmental entity; and any shares,
or any rights under such shares, of any private water company, mutual water
company, or other non-governmental entity pursuant to which TRUSTOR or the
Property may receive water, including those water rights described in Exhibit
"C" attached hereto and by this reference incorporated herein. (The property and
rights to referred to in this paragraph are the "Water Rights."
GENERAL INTANGIBLES, ETC: All general intangibles (as such term is
defined in the California Commercial Code), and all contract rights, licenses,
permits, and the like, relating in any way to operation of the Property or the
business being conducted on the Property, including winery permits, use permits,
winegrower licenses, agricultural processor licenses, and contracts with
winegrowers and others for processing grapes and other commodities and all
trademarks, trademark applications, wine labels, any continuations or extensions
of the foregoing and all goodwill associated with the foregoing.
MISCELLANEOUS: All CRP Contracts now existing or hereafter made
relating to the Property or any portion thereof together with any extensions,
renewals or replacements thereof.
together with all substitutions and replacements for and products of any of the
foregoing property and together with proceeds of any and all of the foregoing
property and all improvements, accessions, additions to, accessories,
attachments, parts, and repairs now or hereafter attached or affixed to or used
in connection with any such property.
TRUSTOR warrants, represents and covenants as follows:
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(a) The Collateral is not used or bought for personal, family
or household purposes;
(b) Except for the security interest granted hereby, TRUSTOR
is the owner of the Collateral free from any prior lien, security interest or
encumbrance; and TRUSTOR will defend the Collateral against all claims and
demands of all persons at any time claiming the same or any interest therein.
(c) TRUSTOR will maintain insurance on the Collateral in such
amounts and of such types as may be requested by BENEFICIARY, and the type,
terms and provisions of such insurance shall be governed by the terms of
Paragraph 9, above.
(d) All covenants and obligations of TRUSTOR contained herein
relating to the Property shall be deemed to apply to the Collateral whether or
not expressly referred to herein.
(e) TRUSTOR maintains a place of business in the state where
the real property is located and TRUSTOR shall immediately notify BENEFICIARY in
writing of any change in such place of business as set forth in this TRUST DEED.
(f) TRUSTOR shall obtain UCC searches on such parties as
BENEFICIARY may require to confirm that the Collateral is owned by TRUSTOR and
is free from all liens and encumbrances.
This TRUST DEED constitutes a security agreement with respect to the
Collateral in which BENEFICIARY is hereby granted a security interest, (and also
constitutes a financing statement and a fixture filing) and BENEFICIARY shall
have all of the rights and remedies of a secured party under the California
Commercial Code as well as all other rights and remedies available at law or in
equity. TRUSTOR hereby agrees to execute and deliver on demand and hereby
irrevocably constitutes and appoints BENEFICIARY the attorney-in-fact of
TRUSTOR, to execute, deliver and, if appropriate, to file with the appropriate
filing officer or office such security agreements, financing statements,
continuation statements or other instruments as BENEFICIARY may request or
require in order to impose, perfect or continue the perfection of the lien or
security interest created hereby. Upon the occurrence of any Event of Default
hereunder (taking into account any applicable period of grace or to cure),
BENEFICIARY shall have the right to cause any of the Collateral which is
personal property to be sold at any one or more public or private sales as
permitted by applicable law, and BENEFICIARY shall further have all other rights
and remedies, whether at law, in equity, or by statute, as are available to
secured creditors under applicable law. Any such disposition may be conducted by
an employee or agent of BENEFICIARY or TRUSTEE. Any person, including both
TRUSTOR and BENEFICIARY, shall be eligible to purchase any part or all of such
Collateral at any such disposition.
11. COLLECTION RIGHTS - ACCOUNTS: BENEFICIARY may, at any time both
before and after the occurrence of an Event of Default, notify any account
debtor, or other person obligated to pay any amount due to TRUSTOR (but only if
BENEFICIARY has a lien, security interest, or assignment in such account or
right to payment), that such account or
14
other right to payment has been assigned or transferred to BENEFICIARY for
security and shall be paid directly to BENEFICIARY. If BENEFICIARY requests at
any time, TRUSTOR will notify such account debtors and other obligors in writing
and will indicate on all invoices to such account debtors or other obligors that
the amount due is payable directly to BENEFICIARY. At any time after BENEFICIARY
or TRUSTOR gives such notice to an account debtor or other obligor, BENEFICIARY
may (but need not), in its own name or in TRUSTOR'S name, demand, sue for,
collect or receive any money or property at any time payable or receivable on
account of, or securing, any such chattel paper, account, or other right to
payment; or grant any extension to, make any compromise or settlement with or
otherwise agree to waive, modify, amend or change the obligations (including
collateral obligations) of any such account debtor or other obligor.
12. PARTIAL PAYMENT: Acceptance by BENEFICIARY of any sum in payment or
part payment of any portion of the Obligations after the same is due shall not
constitute a waiver of BENEFICIARY'S right to require prompt payment when due of
the remainder of the Obligations, nor shall such acceptance cure or waive any
remaining default or waive any subsequent default or prejudice any of the rights
of BENEFICIARY under this TRUST DEED.
13. ACTIONS BY TRUSTEE AND/OR BENEFICIARY: Without affecting the
personal liability of any person, including TRUSTOR (other than any person
released pursuant hereto), for the payment of the Obligations, and without
affecting the lien of this TRUST DEED for the full amount of the Obligations
remaining unpaid upon any property not reconveyed pursuant hereto, BENEFICIARY
and TRUSTEE are respectively authorized and empowered as follows: BENEFICIARY
may at any time and from time to time, either before or after the maturity of
the Note, and without notice: (a) release any person liable for the payment of
any of the Obligations, (b) make any agreement extending the time or otherwise
modifying the terms of payment of any of the Obligations, (c) accept additional
security therefor of any kind or (d) without the prior consent of junior
lienholders, release, and instruct the TRUSTEE to execute partial reconveyances
of, portions of any property, real or personal, securing the Obligations, from
the lien of this TRUST DEED. TRUSTEE may, without liability therefor and without
notice, at any time and from time to time so long as the lien or charge hereof
shall subsist, but only upon the written request of BENEFICIARY: (a) consent to
the making of any map or plat of the property, (b) join in granting an easement
thereon or in creating any covenants restricting use or occupancy thereof, (c)
reconvey, without warranty, any part of such Property, or (d) join in any
extension or modification agreement or in any agreement subordinating the lien
or charge hereof.
14. HUSBANDRY: TRUSTOR shall at all times work, prune, cultivate,
fertilize, spray, dust, harvest, care for and maintain in a husbandlike manner
according to the most current approved methods and consistent with accepted
industry standards any grove and orchard trees, vineyard, or crops now on the
Property or hereafter planted thereon, and shall protect said grove and orchard
trees, vineyard, and crops against loss or damage by fire, and where
appropriate, by making and maintaining proper fire breaks in and around said
grove and orchard trees, vineyard, or crops in a good and workmanlike manner,
and if the property is improved with a dairy, TRUSTOR shall at all times care
for and maintain according to the most current approved methods any such dairy
facilities, and shall protect such dairy facilities against loss or damage by
fire as described above. If an Event of Default shall occur as a result of the
15
breach of any of the provisions of this paragraph (or for any other reason),
BENEFICIARY may without notice or demand ask for and obtain the appointment of a
receiver for the protection and management of said security or may remedy such
default, and carry out and perform all of the obligations of TRUSTOR hereunder
at the cost and expense of TRUSTOR and pay the cost thereof, and TRUSTOR xxxxxx
agrees immediately to repay to BENEFICIARY on demand any sums so paid, with
interest thereon from the respective dates of such payments at the Default Rate
as specified in the Note secured hereby, and all sums paid by BENEFICIARY with
interest shall be a part of the indebtedness secured hereby and in default of
immediate repayment thereof by TRUSTOR the entire indebtedness secured hereby
shall at the option of BENEFICIARY become due and payable forthwith without
notice. BENEFICIARY shall be permitted to enter upon and inspect the Property
for purposes of this paragraph at all reasonable times during the term of this
TRUST DEED.
15. FINANCIAL STATEMENTS: TRUSTOR shall furnish BENEFICIARY with
financial statements within ninety (90) days of TRUSTOR'S fiscal year end.
Statements shall also include financial information on any and all related
entities obligated under the Loan Documents and shall be in a format
substantially similar to the statements submitted at the time of application for
the Loan, or statements which have been prepared in accordance with generally
accepted accounting principles. TRUSTOR also agrees to submit any and all other
financial information as may reasonably be requested by BENEFICIARY from time to
time.
16. FULL PAYMENT: Upon written request of BENEFICIARY stating that all
Obligations have been paid, TRUSTEE shall reconvey without warranty, any
portions of the estate in the Property then held by TRUSTEE. The grantee in such
reconveyance may be designated and described as the "person or persons legally
entitled thereto," or by other appropriate terms. The recitals in such
reconveyance of any matters or facts shall be conclusive proof of the
truthfulness thereof.
17. TRANSFER OF PROPERTY: For the purpose of protecting BENEFICIARY'S
security, keeping the Property free from subordinate financing liens, and/or
allowing BENEFICIARY to raise the interest rate and to collect assumption fees,
TRUSTOR agrees that any sale, conveyance, further encumbrance, or other transfer
of legal, equitable or beneficial title to the Property, or any interest therein
(whether voluntarily or by operation of law), without BENEFICIARY'S prior
written consent, shall be an Event of Default hereunder. In the event TRUSTOR,
without the prior written consent of BENEFICIARY, shall sell, convey, alienate,
transfer, mortgage or encumber the Property described herein or any part
thereof, or any interest therein, whether legal, equitable or beneficial, or
shall be divested of its title or any interest therein, in any manner or way,
whether voluntary or involuntary, the entire balance of the Obligations shall
become immediately due and payable at the option of BENEFICIARY. In addition, at
the option of BENEFICIARY, any such transfer may result in an adjustment of the
interest rate as set forth in the Note.
For the purpose of, and without limiting the generality of the
foregoing, the occurrence at any time of any of the following events, without
BENEFICIARY'S prior written consent, shall be deemed to be an unpermitted
transfer of title of the Property and therefore an Event of Default hereunder:
16
(a) Any sale, conveyance, assignment, grant or other transfer
of, or grant of a security interest in or lien upon, all or any part of a legal,
equitable and/or beneficial interest in the Property;
(b) Any sale, conveyance, assignment, grant or other transfer
of (including upon foreclosure of a security interest), any share of stock of
any TRUSTOR that is a corporation and which affects twenty-five percent (25%) or
more of such stock, cumulatively since the date of the Note;
(c) Any sale, conveyance, assignment, grant or other transfer
of (including upon foreclosure of a security interest), any general partnership
interest in TRUSTOR or, if any TRUSTOR is a limited liability company, the role
of managing member of such TRUSTOR;
(d) Any sale, conveyance, assignment, grant or other transfer
(including upon foreclosure of a security interest) affecting twenty-five
percent (25%) or more of all limited partnership interests in TRUSTOR or, if
TRUSTOR is a limited liability company, of all membership interests in TRUSTOR,
cumulatively since the date of the Note;
(e) Any sale, conveyance, assignment, grant or other transfer
of the legal, equitable and/or beneficial title to the Property which occurs by
operation of law, by trustees in bankruptcy, receivers or estate administrators,
personal representatives or executors, or by or through a bankruptcy court; or
(f) Any transfer, assignment, sale, exchange, gift,
encumbrance, pledge, hypothecation, or other disposition of, directly,
indirectly or in trust, voluntarily or involuntarily, by operation of law or
otherwise, or the entry into a binding agreement to do any of the foregoing with
respect to any Water Rights.
Without limiting the generality or effect of the foregoing, waiver by
BENEFICIARY of its right to accelerate the Obligations upon any transfer or
contract to transfer, or to require satisfaction of the conditions set forth
above, shall not be deemed a waiver by BENEFICIARY of its right to accelerate
the Obligations upon any other transfer or contract to transfer or of its right
upon such transfer or contract to transfer to require satisfaction of the
conditions set forth above. Any consent by BENEFICIARY, or any waiver of any
Event of Default under this paragraph, shall not constitute a consent to, or
waiver of, any right, remedy or power of BENEFICIARY upon a subsequent event of
default under this Paragraph.
18. ERISA: TRUSTOR covenants and agrees that so long as any Obligations
remain outstanding, unless BENEFICIARY shall have previously consented in
writing, (a) it will take no action which would cause it to become an "employee
benefit plan" as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended from time to time ("ERISA"), or a "governmental
plan" as defined in Section 3(32) of ERISA, or its assets to become "plan
assets" as defined in 29 C.F.R. Section 2510.3-101, or "assets of a governmental
plan" subject to regulation under state statutes, and (b) it will not sell,
assign or transfer the Property, or any portion thereof or interest therein, to
any transferee which does not execute and deliver to BENEFICIARY its written
assumption of the obligations of this covenant. TRUSTOR
17
further covenants and agrees to protect, defend, indemnify and hold BENEFICIARY
harmless from and against all loss, cost, damage and expense (including all
attorney's fees and excise taxes, costs of correcting any prohibited transaction
or obtaining an appropriate exemption) which BENEFICIARY may incur as a result
of TRUSTOR'S breach of this covenant. Notwithstanding a provision in the TRUST
DEED or a Loan Document, if any, that limits the liability of TRUSTOR hereunder,
this indemnity shall survive the extinguishment of the lien of this TRUST DEED
by foreclosure or reconveyance or otherwise, and this covenant shall survive
such extinguishment.
19. EVENTS OF DEFAULT: Any of the following events shall be deemed an
"Event of Default" hereunder:
(a) TRUSTOR shall fail to pay any installment of principal or
interest of the Obligations or any other sum secured hereby when due, after the
expiration of any applicable cure or grace period as provided by the Note;
(b) TRUSTOR or any other party that may be liable upon the
Obligations by guarantee or by execution of the Note or any additional note(s),
assumption, endorsement or otherwise, shall file any petition in bankruptcy
(whether for liquidation or reorganization) or an order for relief shall be
entered as to it under any bankruptcy or reorganization law; or TRUSTOR or any
such party shall file any petition or answer seeking or acquiescing in any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief for itself under any present or future federal, state or other
statute, law or regulation relating to bankruptcy, insolvency or other relief
for debtors; or TRUSTOR or any such party shall seek or consent to or acquiesce
in the appointment of any trustee, receiver or liquidator of TRUSTOR or such
other party or of all or any part of the Property or of any or all of the Rents,
or shall make any general assignment for the benefit of creditors, or shall
admit in writing its inability to pay its debts generally as they become due;
(c) TRUSTOR or any other party that may be liable upon the
Obligations by guarantee or by execution of the Note or any additional note(s),
assumption, endorsement or otherwise, shall have filed against it any
involuntary petition in bankruptcy (whether for liquidation or reorganization)
or any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief for under any present or future federal, state or
other statute, law or regulation relating to bankruptcy, insolvency or other
relief for debtors and such petition or other matter shall not have been
dismissed within sixty (60) days after having been filed or initiated;
(d) Any lien shall attach to the Property or any portion
thereof or interest therein (other than liens for non-delinquent taxes and
assessments) that is senior to the lien of this TRUST DEED; or any lien shall
attach to the Property or any portion thereof or interest therein that is junior
to the lien of this TRUST DEED, including any writ of execution or attachment or
any similar process the entry of which against TRUSTOR shall become a lien and
such lien is not released, bonded, satisfied, vacated or stayed within thirty
(30) days; provided that the thirty (30) day cure period shall be applicable
only to involuntary liens and there is no cure period with respect to voluntary
liens;
18
(e) There has occurred a breach of or default under any term,
covenant, agreement, condition, or provision contained herein or in the Note or
in any of the other Loan Documents, any agreement between BENEFICIARY and
TRUSTOR relating to the Property, or any other agreement between BENEFICIARY and
TRUSTOR, other than those breaches or defaults covered by other subparagraphs of
this Paragraph 19, including any event defined in this TRUST DEED as an Event of
Default and not otherwise specifically referred to in this Paragraph 19;
(f) The assignment by TRUSTOR, as lessor or sublessor, as the
case may be, of the Rents or any part thereof (other than to BENEFICIARY)
without the prior written consent of BENEFICIARY;
(g) The failure of TRUSTOR to notify BENEFICIARY in writing
immediately after damage or loss to the Property by reason of fire or other
casualty, and prior to the making of any repairs thereto, or TRUSTOR'S refusal
to permit BENEFICIARY to inspect such damage or loss prior to the making of any
repairs thereto;
(h) There shall occur a breach of or default under Paragraph
17 entitled "Transfer of Property";
(i) Any representation or warranty made by TRUSTOR or others
hereunder or in, under or pursuant to the Loan Documents or in the application
for the loan evidenced by the Note (or in the related documents) shall have been
false or misleading in any material respect as of the date on which such
representation or warranty was made;
(j) Any of the Loan Documents at any time after their
respective execution and delivery and for any reason, shall cease to be in full
force and effect or shall be declared to be null and void, or the validity or
enforceability thereof shall be contested by TRUSTOR, or any stockholder or
partner of TRUSTOR, or TRUSTOR shall deny that it has any further liability or
obligation under any of the Loan Documents to which it is a party; or
(k) TRUSTOR fails to perform any terms, conditions, covenants
or agreements which are part of this TRUST DEED or any other document or
agreement which secures all or any part of the Obligations.
20. ACCELERATION, REMEDIES, POWER OF SALE: Upon an Event of Default by
TRUSTOR, as defined herein, BENEFICIARY may declare all Obligations immediately
due and payable and the same shall thereupon become due and payable without any
presentment, demand, protest or notice of any kind. Thereafter, BENEFICIARY may:
(a) In person or by agent or by a receiver appointed by a
court, with or without bringing any action or proceeding and without regard to
the adequacy of its security, the solvency of TRUSTOR or the existence of waste,
enter upon and take possession of the Property, or any part thereof, in its own
name or in the name of TRUSTEE, and do any acts that it deems necessary or
desirable to preserve the value, marketability or rentability of the Property,
or part thereof or interest therein, to increase the income therefrom or to
protect the security hereof; and, with or without taking possession of the
Property, sue for or otherwise collect the Rents, including those past due and
unpaid, and apply the same, less costs and expenses of operation
19
and collection including attorneys' fees, upon any indebtedness secured by this
TRUST DEED, all in such order as BENEFICIARY may determine. The entering upon
and taking possession of the Property, the collection of such Rents and the
application thereof as aforesaid shall not cure or waive any Event of Default or
notice of default hereunder or invalidate any act done in response to such Event
of Default or pursuant to such notice of default and, notwithstanding the
continuance in possession of the Property or the collection, receipt and
application of Rents, TRUSTEE or BENEFICIARY shall be entitled to exercise every
right provided for in any of the Loan Documents or by law upon occurrence of any
Event of Default, including the right to exercise the power of sale;
(b) At TRUSTOR'S sole expense, contract for a "Phase 1"
environmental inspection report prepared and certified by an environmental
consultant satisfactory to BENEFICIARY to determine whether the Property
complies with all Environmental Regulations. If, based on the Phase 1
environmental audit, BENEFICIARY determines that additional testing or
investigation should be performed on the Mortgaged Premises, such testing shall
be performed at TRUSTOR'S sole expense;
(c) Commence an action to foreclose this TRUST DEED as a
mortgage or otherwise, appoint a receiver, or specifically enforce any of the
covenants hereof;
(d) Deliver to TRUSTEE a written declaration of default and
demand for sale, and a written notice of default and election to cause TRUSTOR'S
interest in the Property to be sold, which notice TRUSTEE or BENEFICIARY shall
cause to be duly filed for record in the Official Records of the county in which
the Property is located; or
(e) Proceed as to both the real and personal property in
accordance with BENEFICIARY'S rights and remedies in respect of the Property, or
proceed to sell any personal property separately and without regard to the
Property in accordance with BENEFICIARY'S rights and remedies.
If an Event of Default shall have occurred and be continuing,
BENEFICIARY, as a matter of right and without notice to TRUSTOR or anyone
claiming under TRUSTOR, and without regard to the then value of the Property or
the interest of TRUSTOR herein, shall have the right to apply to any court
having jurisdiction to appoint a receiver or receivers of the Property, and
TRUSTOR hereby irrevocably consents to such appointment and waives notice of any
application therefor. Any such receiver or receivers shall have all the powers
and duties available to receivers under law and all the powers and duties of
BENEFICIARY in case of entry as provided above and shall continue as such and
exercise all such powers until the date of confirmation of sale of the Property
unless such receivership is sooner terminated.
Should BENEFICIARY elect to foreclose by exercise of the power of sale
herein contained, BENEFICIARY shall notify TRUSTEE. Upon receipt of such notice
from BENEFICIARY, TRUSTEE shall cause to be recorded, delivered or mailed to
TRUSTOR such notice of default and election to sell as is then required by law
and by this TRUST DEED. TRUSTEE shall, without demand on TRUSTOR, after lapse of
such time as may then be required by law and after recordation of such notice of
default and after notice of sale has been given as required by law, sell the
Property at the time and place of sale fixed by it in said notice
20
of sale, either as a whole, or in separate lots or parcels or items as TRUSTEE
or BENEFICIARY shall deem expedient, and in such order as it may determine, at
public auction to the highest bidder for cash in lawful money of the United
States payable at the time of sale. TRUSTEE shall deliver to such purchaser or
purchasers thereof its good and sufficient deed or deeds conveying the property
so sold, but without any covenant or warranty, express or implied. The recitals
in such deed of any matters or facts shall be conclusive proof of the
truthfulness thereof. Any person, including TRUSTOR, TRUSTEE or BENEFICIARY, may
purchase at such sale and TRUSTOR hereby covenants to warrant and defend the
title of such purchaser or purchasers. TRUSTOR hereby expressly waives any right
of redemption after sale that TRUSTOR may have at the time of sale or that may
apply to the sale.
After deducting all costs, fees and expenses of TRUSTEE and of this
TRUST DEED, including costs of evidence of title in connection with sale and
reasonable Trustee's and attorneys' fees for conducting the sale, TRUSTEE shall
apply the proceeds of sale to payment of all sums expended under the terms
hereof and not then repaid (with accrued interest at the Default Rate provided
in the Note) and to all other sums then secured hereby in such order as
BENEFICIARY shall determine, and the remainder, if any, to the person or persons
legally entitled thereto. TRUSTOR expressly waives any rights it may have to
require that the sale proceeds of a trustee's sale of the Property conducted
pursuant to California Civil Code Section 2924h, be distributed in accordance
with California Civil Code Section 2924k.
TRUSTEE may postpone sale of all or any portion of the Property by
public announcement at such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time fixed by
the preceding postponement or subsequently noticed sale, and without further
notice make such sale at the time fixed by the last postponement; or TRUSTEE
may, in its discretion, give a new notice of sale. BENEFICIARY may rescind any
such notice of default at any time before TRUSTEE's sale. The exercise by
BENEFICIARY of the right of rescission shall not constitute a waiver of any
default and demand for sale, or notices of default and of election to cause the
Property to be sold, nor otherwise affect the Note or this TRUST DEED, or any of
the rights, obligations or remedies of BENEFICIARY or TRUSTEE hereunder.
In the event the foreclosure sale is not concluded and BENEFICIARY has
allowed TRUSTOR to cure any and all defaults occasioned hereunder, TRUSTOR shall
pay to BENEFICIARY all costs and expenses incurred by BENEFICIARY as a result of
TRUSTOR'S default, including reasonable attorneys' fees.
In the event of a sale of the Property or any part thereof, and the
execution of a deed or deeds therefor, the recital therein of default, and of
recording notice of breach and election of sale, and of the elapsing of the
required time (if any) between the foregoing recording and the following notice,
and of the giving of notice of sale, and of a demand by BENEFICIARY, or its
successors or assigns, that such sale should be made, shall be conclusive proof
of such default, recording, election, elapsing of time, and of the due giving of
such notice, and that the sale was regularly and validly made on due and proper
demand by BENEFICIARY, its successors or assigns; and any such deed or deeds
with such recitals therein shall be effectual and conclusive against TRUSTOR,
its successors and assigns, and all other persons; and the receipt for the
purchase money recited or contained in any deed executed to the purchaser as
21
aforesaid shall be sufficient discharge to such purchaser from all obligations
to see to the proper application of the purchase money.
21. PREPAYMENT: Upon any Event of Default hereunder and the
acceleration of maturity in the manner allowed herein, any tender of payment of
the amount necessary to satisfy the debt evidenced by the Note made by TRUSTOR,
TRUSTOR'S successors or assigns, or by anyone on behalf of TRUSTOR, or on behalf
of TRUSTOR'S successors or assigns, or by any holder of a subordinate or
superior interest in the Property shall constitute a "prepayment" as that term
is used in the Note, and shall be deemed a voluntary prepayment hereunder. In
the event of any prepayment as described herein or as otherwise defined in the
Note, the amount due shall include the premium which is thereupon due under the
prepayment privilege provisions of the Note.
22. REMEDIES NONEXCLUSIVE: No remedy herein conferred upon or reserved
to TRUSTEE or BENEFICIARY is intended to be exclusive of any other remedy herein
or by law provided or permitted, but each shall be cumulative and shall be in
addition to every other remedy given hereunder, or now or hereafter existing at
law or in equity or by statute. Every power or remedy given by any of the Loan
Documents to TRUSTEE or BENEFICIARY, or to which either of them may be otherwise
entitled, may be exercised, concurrently or independently, from time to time and
as often as may be deemed expedient by TRUSTEE or BENEFICIARY and either of them
may pursue inconsistent remedies.
23. SUCCESSOR TRUSTEE: BENEFICIARY may at any time appoint a successor
TRUSTEE by filing for record in each county where the Property or any part
thereof is located a notice of substitution of trustee containing the statements
required by law. The successor TRUSTEE so appointed shall be substituted as
TRUSTEE hereunder with the same effect as if originally named TRUSTEE herein,
and the TRUSTEE named herein shall thereupon be discharged.
24. NO IMPLIED WAIVER: The failure of BENEFICIARY or TRUSTEE promptly
to exercise any right, power or remedy provided herein or at law or in equity
shall not constitute a waiver of the same, nor shall TRUSTEE or BENEFICIARY be
estopped from later exercising such right, power or remedy.
25. NOTICE: Whenever BENEFICIARY, TRUSTOR or TRUSTEE shall desire or is
required to give or serve any notice, demand, request or other communication
with respect to this TRUST DEED, each such notice, demand, request or other
communication shall be in writing and shall be deemed to have been given, sent,
served and received, upon the following dates in the following manner: (i) in
person with receipt acknowledged on the date of receipt; or (ii) by facsimile
transmission, with receipt electronically confirmed during normal business hours
of recipient, on the date of transmission, provided that no later than one (1)
business day following such transmission, a copy of such facsimile shall be
mailed by first class mail, postage prepaid; or (iii) by overnight delivery
service on the next business day following delivery to such overnight delivery
service, in each case addressed as set forth below, or at such other address or
facsimile transmission number as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such notice.
22
TRUSTOR:
Xxxxx Xxxxxxxx
Xxxxxxxx Knightsbridge, LLC
Xxxxxxxx Cattle Co.
Xxx Xxxxxxxx Xxxxx Xxxx
Xxxx, XX 00000
TRUSTEE:
First American Title Insurance Company
1850 Mt. Diablo Blvd., Xxxxx 000
Xxxxxx Xxxxx, XX 00000
BENEFICIARY:
The Travelers Insurance Company
0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Loan No. 030234459
TRUSTOR hereby requests that a copy of any notice of default and a copy
of any notice of sale under this TRUST DEED be mailed to TRUSTOR at the address
above given, with a courtesy copy to BENEFICIARY at 0000 Xxxxx Xxxx Xxxxxx,
Xxxxx 000, Xxxxxx, XX 00000.
26. PRESERVATION, REPAIR AND USE OF PROPERTY: TRUSTOR shall constantly
maintain and shall not diminish the value of any of the Property during the
existence of the TRUST DEED. TRUSTOR shall not destroy, remove, or sell any
buildings, or Improvements, irrigation or dairy equipment. TRUSTOR shall
constantly maintain or cause to be maintained the Improvements in accordance
with standards customary in the area and standards of similar ranches or farms.
27. FEES: If TRUSTOR shall at any time request any consent or waiver
from BENEFICIARY or request BENEFICIARY to execute or approve any documents or
any action by TRUSTOR or request BENEFICIARY to take any steps, BENEFICIARY
shall have the right to charge to TRUSTOR a fee determined by BENEFICIARY as a
condition to BENEFICIARY'S providing such waiver, consent, document, or
approval. TRUSTOR shall pay such fee to BENEFICIARY at the time of and as a
condition of obtaining such waiver, consent, document, or approval.
28. SALE OF PROPERTY: BENEFICIARY shall have the right, in the sole
discretion of BENEFICIARY, to direct how any sale of the Property hereunder is
conducted, and to direct whether said Property be offered for sale in parcels,
in one block or both.
29. INSPECTION: TRUSTOR agrees to permit BENEFICIARY and/or its agents,
representatives or employees, or independent third party contractors retained by
BENEFICIARY at reasonable time and intervals, to inspect the Property described
herein for the
23
purpose of determining whether TRUSTOR is in compliance with the provisions of
the Note and of this TRUST DEED and the other Loan Documents. Any costs or
expenses incurred in connection with this inspection shall be paid by TRUSTOR to
BENEFICIARY upon demand therefor by BENEFICIARY. Without notice to TRUSTOR,
BENEFICIARY may either add such costs and expenses to the principal to accrue
interest at the Default Rate until maturity of the Note or bill TRUSTOR for such
costs and expenses plus interest at the Default Rate from the date of
advancement until repaid.
30. ATTORNEY'S FEES AND OTHER PROFESSIONAL FEES: If BENEFICIARY shall
employ the services of legal counsel or other third party professionals
(including without limitation, appraisers or environmental professionals) in
connection with (i) any request made by TRUSTOR to BENEFICIARY for a
modification, amendment, waiver, or consent in connection with the Loan
Documents, (ii) defending or protecting BENEFICIARY'S interests in any Loan
Document or any real or personal property securing the Loan (including the
Property) from and against any claim or assertion made by any third party, (iii)
rendering advice or other legal services to BENEFICIARY concerning the Loan, any
Loan Documents, or the Property, (iv) rendering advice to BENEFICIARY, enforcing
BENEFICIARY's legal rights, or performing other legal services for BENEFICIARY
upon the occurrence or in anticipation of an Event of Default, including without
limitation, any services relating to any so-called "workout" or other
negotiations in anticipation of or following the occurrence of any Event of
Default, (v) representing the interests of BENEFICIARY in any lawsuit arising
out of or in connection with the Loan Documents or BENEFICIARY'S position as
secured party or beneficiary under any Loan Document, or (vi) any other judicial
or nonjudicial action, suit or proceeding instituted by or against BENEFICIARY
or any other person connected with or related to or with reference to the Loan
or to reclaim, seek relief from a judicial or statutory stay, sequester,
protect, preserve or enforce BENEFICIARY'S interest in this Note or the TRUST
DEED or any other Loan Document (including proceedings under federal bankruptcy
law, in eminent domain, under probate proceedings, or in connection with any
state or federal tax lien), then in such event TRUSTOR promises to pay
reasonable attorney's fees and reasonable costs and expenses, and other
professional fees incurred by BENEFICIARY and/or its attorney in connection with
the above mentioned events (any such fees and expenses being collectively
referred to herein as "Professional Fees"). BENEFICIARY shall have all rights
relating to such payments and expenses as set forth in Paragraph 8 of the Note.
31. ACTIONS BY BENEFICIARY TO PRESERVE THE PROPERTY: If TRUSTOR fails
to make any payment, whether of real estate taxes, insurance premiums,
attorney's fees, or otherwise, or fails to pay, purchase or compromise any
encumbrance, charge or lien that in the judgment of BENEFICIARY or TRUSTEE is
prior or superior hereto, or fails to do any act as may be required hereunder,
BENEFICIARY may, at the discretion of BENEFICIARY, without obligation so to do
and without releasing TRUSTOR from any obligation, make or do the same in such
manner and to such extent as BENEFICIARY shall deem necessary to protect the
Property. BENEFICIARY shall have all rights relating to such payments and
expenses as set forth in Paragraph 8 of the Note.
32. REPRESENTATIONS AND WARRANTIES OF TRUSTOR: TRUSTOR hereby
represents and warrants to BENEFICIARY and TRUSTEE that:
24
(a) If TRUSTOR is a partnership, corporation, or limited
liability company, it is duly organized, validly existing and in good standing
under the laws of the state of its organization and is duly qualified to do
business in the State of California;
(b) TRUSTOR has the requisite power and authority to own and
manage its properties, to carry on its business as now being conducted and to
own, develop and operate the Property;
(c) TRUSTOR is in compliance with all laws, regulations,
ordinances and orders of public authorities applicable to TRUSTOR;
(d) The execution, delivery and performance by TRUSTOR of the
Loan Documents (i) are within the power of TRUSTOR; (ii) have been duly
authorized by all requisite corporate, partnership, or limited liability company
action, as appropriate; (iii) have received all necessary governmental approval;
and (iv) will not violate any provision of law, any order of any court or agency
of government, the charter documents of TRUSTOR, or any indenture, agreement or
any other instrument to which TRUSTOR is a party or by which TRUSTOR or any of
its property is bound, or be in conflict with, result in a breach of or
constitute (with due notice and/or lapse of time) a default under any such
indenture, agreement or other instrument, or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon
TRUSTOR'S property or assets, except as contemplated by the provisions of the
Loan Documents;
(e) Each of the Loan Documents, when executed and delivered to
BENEFICIARY, will constitute a legal, valid and binding obligation enforceable
in accordance with its terms;
(f) All financial data that has been given to BENEFICIARY with
respect to TRUSTOR: (i) is complete and correct in all material respects; (ii)
accurately presents the financial condition of TRUSTOR on each date as of which,
and the results of TRUSTOR'S operations for the periods for which, the same have
been furnished; and (iii) have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
covered thereby;
(g) There has been no adverse change in the financial
condition or operations of TRUSTOR since the date of the most recent of each
such financial statement given to BENEFICIARY other than changes in the ordinary
course of business, none of which changes has been materially adverse
individually or in the aggregate;
(h) TRUSTOR is not in default in the performance, observance
or fulfillment of any of the material obligations, covenants or conditions set
forth in any agreement or instrument to which TRUSTOR is a party;
(i) All other reports, papers, data and information given to
BENEFICIARY with respect to TRUSTOR and the Property are accurate and correct in
all material respects;
25
(j) There is not now pending against or affecting TRUSTOR, nor
to the knowledge of TRUSTOR is there threatened, any action, suit or proceeding
at law or in equity or by or before any administrative agency that, if adversely
determined, would materially impair or affect the financial condition of TRUSTOR
or the Property or operation thereof;
(k) TRUSTOR has filed all federal, state, county and municipal
income tax returns required to have been filed by TRUSTOR and has paid all taxes
that have become due pursuant to such returns or pursuant to any assessments
received by TRUSTOR, and TRUSTOR knows of no basis for any additional assessment
against it in respect of such taxes;
(l) The Property is used principally or primarily for
agricultural purposes; and
(m) No portion of the Property is within a water district that
has been deemed subject to federal reclamation law or, if any such portion shall
be, TRUSTOR shall have provided a "Non-Excess" letter from the Bureau of
Reclamation with respect thereto.
33. ENTIRE AGREEMENT: This instrument, together with the Note and other
Loan Documents, constitutes and sets forth the entire understanding and
agreement between the parties, and no party hereto has relied upon any
representations, agreements or understandings, verbal or written, not set forth
herein or in the Note and such other Loan Documents, whether made by any party
hereto or by any agent, employee or representative of any party hereto.
Specifically, without limiting the generality of the foregoing, the parties
agree that BENEFICIARY has made no agreement to extend or renew any of the
Obligations, and no such agreement will be binding upon BENEFICIARY unless made
in writing, subsequent to the date hereof, and executed by a duly authorized
representative of BENEFICIARY.
34. BINDING AGREEMENT: This TRUST DEED inures to the benefit of, and
binds all parties hereto, their heirs, legal representatives, successors and
assigns. The term BENEFICIARY shall mean the owner and holder of the Note
described above, whether or not named as BENEFICIARY herein.
35. TRUSTOR NOT RELEASED: Extension of the time for payment or
modification of amortization of the sums secured by this TRUST DEED granted by
BENEFICIARY to any successor in interest of TRUSTOR shall not operate to
release, in any manner, the liability of the original TRUSTOR or TRUSTOR'S
successor in interest. BENEFICIARY shall not be required to commence proceedings
against such successor or refuse to extend time for payment or otherwise modify
amortization of the sums secured by this TRUST DEED by reason of any demand made
by the original TRUSTOR and TRUSTOR'S successors in interest.
36. GOVERNING LAW: This TRUST DEED and each instrument securing it
shall be governed by and construed according to the laws of the State of
California.
37. SEVERABILITY: In the event any one or more of the provisions
contained in this TRUST DEED, or the Note or any other Loan Documents shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall, at the option of BENEFICIARY,
not affect any other provision of this
26
TRUST DEED, but this TRUST DEED shall be construed as if such invalid, illegal,
or unenforceable provision had never been contained herein or therein. If the
lien of this TRUST DEED is invalid or unenforceable as to any part of the
Obligations, or if the lien is invalid or unenforceable as to any part of the
Property, the unsecured or partially secured portion of the Obligations shall be
completely paid prior to the payment of the remaining and secured or partially
secured portion of the Obligations, and all payments made on the Obligations,
whether voluntary or under foreclosure or other enforcement action or procedure,
shall be considered to have been first paid on and applied to the full payment
of that portion of the Obligations which is not secured or not fully secured by
the lien of this TRUST DEED.
38. CONSENT BY BENEFICIARY: Any consent by BENEFICIARY in any single
instance shall not be deemed or construed to be BENEFICIARY'S consent in any
like matter arising at a subsequent date and the failure of BENEFICIARY to
promptly exercise any right, power, remedy, consent or approval provided herein
or at law or in equity shall not constitute or be construed as a waiver of the
same nor shall BENEFICIARY be estopped from exercising such right, power,
remedy, consent or approval at a later date. Any consent or approval requested
of and granted by BENEFICIARY pursuant hereto shall be narrowly construed to be
applicable only to TRUSTOR and the matter identified in such consent or approval
and no third party shall claim any benefit by reason thereof, and any such
consent or approval shall not be deemed to constitute BENEFICIARY a venturer or
partner with TRUSTOR nor shall privity of contract be presumed to have been
established with any such third party. If BENEFICIARY deems it to be in its best
interest to retain the assistance of persons, firms or corporations (including
attorneys, appraisers, engineers, consultants and surveyors) with respect to a
request for consent or approval, TRUSTOR shall reimburse BENEFICIARY for all
costs incurred in connection with the employment of such persons, firms or
corporations. Without notice to TRUSTOR, BENEFICIARY may either add such costs
to the principal to accrue interest at the Default Rate until maturity of the
Note or bill TRUSTOR for such costs plus interest at the Default Rate from the
date of advancement until repaid.
39. FURTHER ASSURANCES: TRUSTOR, at any time upon the reasonable
request of BENEFICIARY, shall at TRUSTOR'S expense execute, acknowledge and
deliver all such additional papers and instruments and all such further
assurances of title, and will do or cause to be done all further acts and
things, as may be proper or reasonably necessary to carry out the purpose hereof
and of the Loan Documents and to subject to the liens thereof any property
intended by the terms thereof to be covered thereby and any renewals, additions,
substitutions, replacements or betterments thereto.
40. TRUSTOR'S WAIVER OF RIGHTS: All sums payable by TRUSTOR hereunder
shall be paid without notice, demand, counterclaim, setoff, deduction or
defense, and the obligations and liabilities of TRUSTOR hereunder shall in no
way be released, discharged or otherwise affected (except as expressly provided
herein) by reason of: (i) any damage to or destruction of or any condemnation or
similar taking of the Property or any part thereof; (ii) any restriction or
prevention of or interference with any use of the Property or any part thereof;
(iii) any title defect or encumbrance or any eviction from the Property or any
part thereof by title, paramount or otherwise; (iv) any claim TRUSTOR has or
might have against BENEFICIARY; (v) any default or failure on the part of
BENEFICIARY to perform or comply with any of the terms hereof or of any other
agreement with TRUSTOR; or (vii) any other occurrence
27
whatsoever, whether similar or dissimilar to the foregoing, whether or not
TRUSTOR shall have notice or knowledge of any of the foregoing. To the fullest
extent that TRUSTOR may do so, TRUSTOR agrees that TRUSTOR will not at any time
insist upon, plead, claim or take the benefit or advantage of any law now or
hereafter in force providing for any redemption, valuation, appraisement, stay
of execution or extension, and TRUSTOR, for TRUSTOR, TRUSTOR'S heirs, devisees,
representatives, successors and assigns, and for any and all persons ever
claiming any interest in the Property, to the extent permitted by law, hereby
waives and releases all rights of redemption, valuation, appraisement, stay of
execution, extension, notice of election to mature or declare due the whole of
the secured indebtedness and marshaling in the event of foreclosure of the liens
hereby created.
41. LIMITATION OF INTEREST: It is the intent of TRUSTOR and BENEFICIARY
in the execution of this TRUST DEED and all other Loan Documents to contract in
strict compliance with the usury laws of the State of California governing the
loan evidenced by the Note. In furtherance thereof, BENEFICIARY and TRUSTOR
stipulate and agree that none of the terms and provisions contained in the Loan
Documents shall ever be construed to create a contract for the use, forbearance
or detention of money requiring payment of interest at a rate in excess of the
maximum interest rate permitted to be charged by the laws of the State of
California governing the loan evidenced by the Note. TRUSTOR or any guarantor,
endorser or other party now or hereafter becoming liable for the payment of the
Note shall never be liable for unearned interest on the Note and shall never be
required to pay interest on the Note at a rate in excess of the maximum interest
that may be lawfully charged under the laws of the State of California, and the
provisions of this Paragraph shall control over all other provisions of the Note
and any other instrument executed in connection herewith which may be in
apparent conflict herewith. In the event any holder of the Note shall collect
monies that are deemed to constitute interest and that would otherwise increase
the effective interest rate on the Note to a rate in excess of that permitted to
be charged by the laws of the State of California, all such sums deemed to
constitute interest in excess of the legal rate shall be applied to the
reduction of the unpaid principal balance and not to the payment of interest, or
as otherwise provided for in the Note, at the discretion of BENEFICIARY.
42. SUBROGATION: To the extent that proceeds of the Note are used,
directly or indirectly, to pay off, satisfy or discharge, in whole or in part,
any outstanding lien, charge or prior encumbrance against the Property or any
part thereof, then as additional security hereunder BENEFICIARY shall be
subrogated to any and all rights, superior titles and liens owned or claimed by
any owner or holder of such outstanding liens, charges and prior encumbrances,
however remote and irrespective of whether said liens, charges or encumbrances
have been released of record by the holder thereof upon payment.
43. PARTIAL RELEASE: The BENEFICIARY may, at any time, without notice
and without the prior consent of junior lienholders, release and instruct the
TRUSTEE to execute partial reconveyances of portions of the Property from the
lien of this TRUST DEED and it is expressly understood and agreed that such
partial reconveyances shall not affect or impair the personal liability of any
person on the obligations secured hereby or the lien or priority of the lien of
this TRUST DEED on the Property remaining subject to this TRUST DEED for the
full amount of the obligations then remaining unpaid.
28
44. HEADINGS; INTERPRETATION: Headings are for convenience only and are
not intended as a limitation on the content of the paragraph following nor as an
aid to the construction thereof. Use of the word "including" shall not be
construed as a limitation and the word "including" shall be deemed to mean
"including, but not limited to."
45. ANTI-FORFEITURE: TRUSTOR hereby represents and warrants to
BENEFICIARY that there has not been committed by TRUSTOR or any other person in
occupancy of or involved with the operation or use of the Property any act or
omission affording any governmental authority the right of forfeiture as against
the Property or any part thereof or any monies paid in performance of TRUSTOR'S
obligations under the Note or under any of the other Loan Documents. TRUSTOR
hereby covenants and agrees not to commit, permit, or suffer to exist any act or
omission affording such right of forfeiture. In furtherance thereof, TRUSTOR
hereby indemnifies BENEFICIARY and agrees to defend and hold BENEFICIARY
harmless from and against any loss, damage, or injury by reason of the breach of
the covenants and agreements or damage or injury by reason of the breach of the
covenants and agreements or the warranties and representations set forth in this
Paragraph 45. Without limiting the generality of the foregoing, the filing of
formal charges or the commencement of proceedings against TRUSTOR, BENEFICIARY,
or all or any part of the Property under any federal or state law for which
forfeiture of the Property or any part thereof or of any monies required to be
paid to BENEFICIARY or the TRUSTEE, or to be used in performance of TRUSTOR'S
obligations under the Loan Documents, is a potential result, shall, at the
election of BENEFICIARY, constitute an Event of Default if TRUSTOR shall not
have caused such charges or proceedings to be dismissed within ninety (90) days
of the filing thereof; provided that if such charges or proceedings have been
filed as a result of criminal proceedings against TRUSTOR or any officer or
general partner or trustee thereof, the filing of such charges or proceedings
shall constitute an Event of Default without notice or opportunity to cure.
During the 90-day period referred to in the previous sentence, BENEFICIARY
shall, upon prior notice to TRUSTOR and at TRUSTOR'S cost and expense but
without having to obtain TRUSTOR'S consent, be entitled to appear with respect
to such charges or proceedings and to take whatever steps BENEFICIARY shall deem
appropriate to protect its interests.
46. COVENANTS RUNNING WITH THE LAND: All covenants contained in the
Loan Documents shall run with the Property and be binding on TRUSTOR and any
successor owners of the Property; provided, however, that any limitation of
liability contained in this TRUST DEED or in any Loan Document, shall not inure
to the benefit of any successor owner of the Property unless the prior written
consent of BENEFICIARY to the transfer of Property to such owner shall have been
obtained in accordance with Paragraph 17 (Transfer of Property). If the
ownership of the Property or any portion thereof becomes vested in a person or
persons other than TRUSTOR, BENEFICIARY may, without notice to TRUSTOR, deal
with such successor or successors in interest of TRUSTOR with reference to this
TRUST DEED and the Obligations in the same manner as with TRUSTOR without in any
way releasing or discharging TRUSTOR from its obligations hereunder. By
accepting title to all or any portion of the Property, any such successor to
TRUSTOR shall be deemed to have assumed, without the need for executing further
documentation, TRUSTOR'S obligations
29
hereunder and under the other Loan Documents, and such successor shall, at the
request of BENEFICIARY, execute such additional documents, certificates,
affidavits, and instruments as BENEFICIARY deems necessary and appropriate to
evidence such successor's assumption of TRUSTOR'S obligations hereunder and
under the other Loan Documents. TRUSTOR will give immediate written notice to
BENEFICIARY of any conveyance, transfer or change of ownership of the Property
or any portion thereof or interest therein and any transfer, whether or not
prohibited, described by Paragraph 17 (Transfer of Property), but nothing in
this Paragraph shall vary or negate the effect of the provisions of Paragraph 17
(Transfer of Property).
47. SUCCESSORS AND ASSIGNS: Subject to the provisions of Paragraph 17
(Transfer of Property), all of the terms and covenants and conditions contained
herein or in any of the other Loan Documents shall apply to and be binding upon,
and inure to the benefit of (except as expressly set forth in Paragraph 46
(Covenants Running With the Land)), the successors and assigns of TRUSTOR and
BENEFICIARY, respectively, and all persons claiming by, under, or through them.
Wherever herein BENEFICIARY is referred to, such reference shall be deemed to
include the holder from time to time of the Note, whether so expressed or not,
and each such holder from time to time of the Note shall have and enjoy all of
the rights, privileges, powers, options, and benefits afforded to BENEFICIARY
hereby and hereunder, and may enforce all and every of the terms and provisions
hereof, as fully and to the same extent and with the same effect as if such
holder of the Note from time to time were herein by name specifically granted
such rights, privileges, powers, options, and benefits and was herein by name
designated as the BENEFICIARY hereof.
48. SUBORDINATION OF SECURITY INTEREST IN CROPS: Upon request of
TRUSTOR, so long as no Event of Default has occurred and is continuing,
BENEFICIARY shall subordinate its security interest in crops growing on the
Property to a security interest granted by TRUSTOR to an entity that provides
crop financing to TRUSTOR to produce crops on the Property. The form of any such
subordination shall be in form and substance reasonably satisfactory to
BENEFICIARY. A subordination shall not extend for a period longer than one crop
year and only one such subordination may be in effect at any one time.
49. CASH COLLATERALIZATION OF CONTINGENT OBLIGATIONS: If at the time
TRUSTOR pays to BENEFICIARY all principal, interest, fees, costs, and other
charges accrued and owing to BENEFICIARY under the Note, there remains any
pending or threatened action, claim or proceeding involving BENEFICIARY that has
or foreseeably may result in any claim by BENEFICIARY against TRUSTOR under any
Loan Document, including claims for indemnification, reimbursement,
contribution, or the like, then TRUSTOR shall, as a condition to the
reconveyance of the lien of this TRUST DEED, deposit cash with BENEFICIARY in
such amount as BENEFICIARY shall reasonably determine as necessary to protect
the interest of BENEFICIARY. Such amount shall be held as collateral by
BENEFICIARY and may be applied by BENEFICIARY on account of any such claim.
BENEFICIARY shall refund any excess to TRUSTOR at such time as BENEFICIARY shall
reasonably determine that such claim will not be made. TRUSTOR may, at its
option, decline to provide the foregoing cash deposit without breaching this
TRUST DEED and, in such event, the lien hereof in favor of BENEFICIARY shall
continue until such pending or threatened action(s), claim(s), or proceeding(s)
are definitively resolved.
REMAINDER OF XXXX INTENTIONALLY LEFT BLANK
30
IN WITNESS WHEREOF, the undersigned has executed this TRUST DEED on the
day and year first written above.
TRUSTOR:
------------------------------------------
Xxxxx Xxxxxxxx, as an individual
XXXXXXXX KNIGHTSBRIDGE, LLC, a
California limited liability company
By: Knightsbridge Fine Wines, Inc., a Nevada
corporation, Manager-Member
By:
---------------------------
Xxxx Xxxxxxx
Chief Executive Officer
By: Xxxxxxxx Ranch, LLC, a California
limited liability company, Manager-Member
By:
---------------------------
Xxxxx X. Xxxxxxxx, Manager
By:
---------------------------
Xxxxxx X. Xxxxxxxx, Manager
XXXXXXXX CATTLE CO., a California
general partnership
By:
---------------------------------
Xxxxxx X. Xxxxxxxx, partner
By:
---------------------------------
Xxxxx X. Xxxxxxxx, partner
31
ACKNOWLEDGMENT OF INSTRUMENTS
STATE OF )
--------------------------------------------
) SS.
COUNTY OF )
--------------------------------------------
On __________________________ before me, the undersigned notary public
in and for said state, personally appeared ________________________, personally
known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument, the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
Signature _______________________________ (Seal)
32
EXHIBIT A
Property Description
1
EXHIBIT B
List of Equipment
Item Quantity Manufacturer Model Serial No.
---- -------- ------------ ----- ----------
Stemmer/Crusher 1 Delta 50 7300
Grape Press 2 Diemme AR150 C297121
Bottling Line Conveyor 1 FP
Carton Taping Machine 1 3M 983124
Labeller 1 Cavagnino & Xxxxx B5005
Corker 1 Bertolasso Delta 503R M5000044
Capsule Spinner 1 Xxxxxx & Galadrino Astra 4 32/94119855
Filler Bowl 1 Bertolaso Olimpia 20 9020032
Orbitor 1 XxXxxxx Engineering #100 A5411069
Pallet Stretch Wrapper 1 Lantech Q300 QM008184
Conveyor System & Xxxxxx 1 Cornish Enterprises Custom
Refrigeration System 1 Irapp
Item Size Quantity Manufacturer Model Serial No.
---- ---- -------- ------------ ----- ----------
Stainless Steel
Fermentation Tanks 19 Xxxxxx 7500 Gallon 3500-01E
5 Xxxxxx 5100 Gallon 3500-02C
4 Xxxxxx 4100 Gallon 3500-03C
12 Xxxxxx 2700 Gallon 3500-04B
8 Xxxxxx 1600 Gallon 3500-05B
4 Xxxxxx 800 Gallon 3500-06B
1
EXHIBIT C
List of Water Rights
1. Permit for Diversion and Use of Water (Permit No. 20762) issued by
State Water Resources Control Board.
1
