6.18 Loan Documents with Comerica Bank
LOAN AGREEMENT
THIS LOAN AGREEMENT ("Agreement") is made as of this 10th day of
December, 1998, by and between AWG, Ltd., a Nevada corporation ("Borrower"),
and COMERICA BANK, a Michigan Banking Corporation ("Lender").
1. DEFINITIONS OF TERMS USED IN THIS AGREEMENT.
1.1 Borrower's Interest: The rate of interest to be paid to Lender in
respect to the Loan as set forth in the Notes.
1.2 Default Interest: That rate of interest specified in the Notes
which shall be in effect in the event of default hereunder.
1.3 Environmental Indemnity: The unsecured environmental indemnity
agreement executed in favor of Lender of even date herewith.
1.4 Financial Statements: Financial statements of the Borrower and
Guarantor and such other entity required by Lender including operating
statements, balance sheets and such other financial reports that Lender may
require.
1.5 Governmental Authority: The authority of the United States, the
State in which the Property is located, any political subdivision thereof,
any city and any governmental or quasi-governmental agency, department,
commission, board, bureau or instrumentality of any of them, or any court,
administrative tribunal, or public utility.
1.6 Governmental Requirements: Any present or future law, ordinance,
order, rule or regulation of a Governmental Authority applicable to Borrower
or the construction, maintenance, use, operation or sale of the Property.
1.7 Guarantor(s): The Guarantor(s) of the obligations evidenced by
the Notes, the Trust Deed and the Environmental Indemnity, i.e.: Xxxxxx X.
Xxxxxxxx and Xxxxx Xxxxxxxx.
1.8 Guaranty: The guaranty, if any, executed by the person or persons
named herein as Guarantor(s), which guarantees the performance of Borrower's
obligations specified herein.
1.9 Improvements: the buildings/structures located on the Property.
1.10 Litigation Amount: Fifty Thousand Dollars ($50,000).
1.11 Loan: The total amount evidenced by the Notes, i.e.: up to Two
Million Seven Hundred Thousand Dollars ($2,700,000), representing the First
Non-Revolving Loan, the Second Non-Revolving Loan, and the Revolving Loan.
1.12 Loan Documents: This Agreement, the loan documents and
instruments listed in Paragraph 4.1 of this Agreement, and all documents
given to Lender from time to time to secure the Loan, provided, however, that
the Guaranty and the Environmental Indemnity are not Loan Documents.
Notwithstanding any provision of any Loan Document, Borrower's obligations
under the Environmental Indemnity are not secured by the Trust Deed.
1.13 Loan Fee: The fee to be paid to Lender in consideration for
Lender agreeing to make the Loan and entering into this Agreement, which fee
shall not be subject to reduction or be refundable under any and all
circumstances, and which fee is the sum of Twelve Thousand Five Hundred
Dollars ($12,500), payable upon Recordation.
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1.14 Loan-to-Value Ratio: On the First Non-Revolving Loan shall be
seventy-five percent (75%). On the Second Non-Revolving Loan shall be
sixty-five percent (65%).
1.15 Major Leases: Those Leases, if any, described on Exhibit A
attached hereto and made a part hereof.
1.16 Notes: The First Non-Revolving Note, the Second Non-Revolving
Note, and the Revolving Note, collectively, of even date herewith executed by
Borrower as maker and payable to Lender or order, in the aggregate principal
amount of the Loan.
1.17 Personal Property: That personal property described in the Trust
Deed and which is collateral for the Loan.
1.18 Project: The Property, the Improvements and the Personal
Property.
1.19 Property: That certain real property legally described in the
Trust Deed and the Improvements thereon.
1.20 Recordation: The act of recording the Trust Deed in the official
records of the County in which the Property is situated.
1.21 Title Insurer: The issuer of the title insurance policy required
by Paragraph 7.2, i.e.: Chicago Title Company.
1.22 Trust Deed: The deed of trust in favor of Lender of even date
herewith encumbering the Property and given to secure the Notes.
2. LOAN.
2.1 Borrower has applied to Lender for the Loan for the purpose of
refinancing the current mortgage and for other debt obligations, and for
working capital.
2.2 Lender and Borrower agree that Lender shall make the Loan to
Borrower and Borrower shall accept the Loan upon the terms, conditions,
covenants, representations and warranties contained herein. All Loan funds
disbursed hereunder shall be evidenced by the Notes, bear interest at the
rate of Borrower's Interest or Default Interest, as the case may be, and be
secured by the Trust Deed.
3. LOAN PROCEEDS. Upon Recordation, Lender is authorized to disburse the
Loan Proceeds pursuant to the instructions given by Borrower in the Loan
Disbursement Authorization in the form attached as Exhibit B hereto and made
a part hereof.
4. CONDITIONS PRECEDENT TO RECORDATION. Prior to Recordation the
following conditions shall have been satisfied:
4.1 Lender shall have received:
4.1.1 this executed Agreement;
4.1.2 the executed Notes;
4.1.3 the executed Trust Deed;
4.1.4 the executed Security Agreement;
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4.1.5 the executed Environmental Indemnity;
4.1.6 executed UCC-1 Financing Statements;
4.1.7 UCC-3 search for Borrower and its general partner(s), if
any;
4.1.8 the Financial Statements;
4.1.9 a counterpart original of insurance policies or
certificates thereof for the insurance required by
Paragraph 7.5 hereof;
4.1.10 Preliminary title report issued by Title Insurer showing
the condition of title to the Property with the
Property's legal description and a copy of all documents
listed as exceptions to said Report;
4.1.11 [Intentionally omitted.]
4.1.12 a "phase one" environmental assessment, in form and
substance satisfactory to Lender ("Environmental
Assessment") prepared by a qualified licensed
environmental consultant acceptable to Lender confirming
the absence of hazardous or toxic materials in, on,
under or around the Property. The Environmental
Assessment shall, at a minimum, include a description of
current and former uses of the Property and the results
of an inspection of the Property and adjacent and
neighboring property sufficient to form a basis for a
reasoned opinion concerning the existence of, or
potential for, hazardous material contamination on or in
the vicinity of the Property. In the event the
Environmental Assessment indicates that the Property may
be affected by hazardous or toxic materials, or is
otherwise unsatisfactory to Lender, in Lender's sole
discretion, Lender may require additional or further
environmental testing, inspection and/or assessment of
the Property.
4.2 If required by Lender as indicated by an "X" in the box opposite
the required item, Lender shall have received:
/x/ 4.2.1 Executed Guaranty;
/ / 4.2.2 A current ALTA/ACSM Land Title Survey of the Property
including dimensions, delineations and locations of all
easements thereon, satisfactory to the Title Insurer if
required by it and to Lender;
/ / 4.2.3 A complete set of the "as built" plans and
specifications for the Improvements;
/ / 4.2.4 An Opinion Letter from Borrower's counsel to the effect
set forth in Paragraphs 6.1, 6.2, 6.3, 6.4, 6.5, 6.7,
6.8, 6.9, 6.11 and 6.15 hereof, and containing such
other opinions as may be required by Lender;
/x/ 4.2.5 If Borrower or a general partner of Borrower or any
Guarantor is a corporation:
(a) a certified copy of its Articles of Incorporation and
by-laws and all amendments thereof, as filed with the
Office of the Secretary of State;
(b) a Certificate of Status; and
(c) certified Resolution of Board of Directors of Borrower
authorizing the consummation of the transactions
contemplated hereby and providing for the
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execution of a written direction of payment if Loan
proceeds are to be paid to a person other than Borrower;
/ / 4.2.6 If Borrower or any Guarantor is a limited liability
company:
(a) a certified copy of its Articles of Organization, as
filed with the Office of the Secretary of State, and all
amendments, restatements and corrections thereto;
(b) a copy of its by-laws and all amendments thereof, if any;
(c) a copy of its Operating Agreement, and all amendments,
restatements and corrections thereto;
(d) a Certificate of Status;
(e) in the case of a member-managed limited liability
company, the consent of all of the members of the
limited liability company authorizing the transactions
contemplated hereby and the execution of the documents
contemplated by this Agreement; and
(f) in the case of a manager-managed limited liability
company, the consent of all of the managers of the
limited liability company authorizing the transactions
contemplated hereby and the execution of the documents
contemplated by this Agreement.
/ / 4.2.7 If Borrower or a general partner of Borrower or any
Guarantor is a General Partnership or Joint Venture, the
Partnership or Joint Venture Agreement;
/ / 4.2.8 If Borrower or a general partner of Borrower or any
Guarantor is a Limited Partnership:
(a) the Limited Partnership Agreement;
(b) a certified copy of the Certificate of Limited
Partnership (LP-1), as filed with the Office of the
Secretary of State; and
(c) a Certificate of Good Standing;
/ / 4.2.9 If Borrower or a general partner of Borrower or any
Guarantor is a Trust, a copy of the Trust indenture;
/ / 4.2.10 Copy of executed Major Leases;
/x/ 4.2.11 Executed Assignment of Real Property Leases and Rents;
/ / 4.2.12 Subordination, Attornment and Non-disturbance Agreements
from each tenant under a Major Lease executed in
recordable form and an estoppel certificate acceptable
to Lender from each tenant under a Major Lease; and
/ / 4.2.13 If the Property is situated outside the State of
California, an opinion of local counsel of Lender's
selection to the effect that (i) upon due authorization
and execution by the parties thereto and upon such
recording or filing thereof as may be specified in the
opinion, the Notes, Trust Deed, this Agreement, the
Guaranty, and the Completion
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Agreement will be legal, valid and binding instruments,
enforceable against the makers thereof in accordance
with their respective terms; (ii) the Trust Deed creates
the lien it purports to create on the Property, and
effectively assigns the leases purported to be assigned
thereby, and stating the manner of recording or filing
to be effected in order to establish, preserve and
protect the Lender's interest therein, and whether there
is any necessity for the re-recording of the Trust Deed
or re-filing requirements, if any; (iii) upon due
recording or filing of the Trust Deed, it will, to the
extent of all advances made hereunder, be prior to all
subsequently filed constitutional or statutory liens for
services rendered or materials furnished to the Property
regardless of the time such services were rendered or
materials furnished as the case may be; (iv) in the
event of the foreclosure or other method of enforcement
of the remedies provided for in the Trust Deed, any
leases of the Property will, at Lender's option, remain
in full force and effect between the lessees thereunder
and the Lender or any purchaser of the Property pursuant
to such remedial action; (v) all rights of redemption of
Borrower shall be extinguished upon the consummation of
the foreclosure sale of the Trust Deed; (vi) Lender, by
making the Loan, (a) shall not be deemed to be doing
business in that state or, if the making of the Loan
constitutes doing business in that state, that the
Lender has been duly qualified to do business in that
state, (b) shall not become subject to the payment of
any income, franchise, capital or other similar taxes or
assessments with respect to its ownership of the Notes
or the receipt of principal or interest thereunder other
than customary corporate income taxes on the interest
received thereon, (c) shall not be violating the usury
laws of that state, and (vii) as to such other matters,
incident to the transactions contemplated hereby, as
Lender may require.
4.3 To comply with California legislation, the title company handling
funds in an escrow capacity is required to have deposited into its escrow
depository account before recording a transaction immediately available funds
representing disbursements to be made by it.
5. CONDITIONS PRECEDENT TO DISBURSEMENT. Prior to the disbursement of the
Loan Proceeds, the following conditions shall have been satisfied:
5.1 Title Insurer shall have issued or agreed to issue the title
policy described in Paragraph 7.2 hereof, naming Lender as insured to the
extent of the Loan amount.
5.2 Lender shall have received the Loan Disbursement Authorization.
5.3 UCC-1 Financing Statements shall have been filed with the
Secretary of State for the state where the Property is situated describing
the Personal Property.
5.4 Lender shall have been furnished with a Certificate issued by the
filing officer of the Secretary of State for the state in which the Property
is situated showing Lender's Financing Statement as prior to all other
Financing Statements in Borrower's name relative to the Personal Property.
5.5 The representations and warranties of Borrower made in Paragraph
6 hereof shall be true and correct on and as of the date of the disbursement
with the same effect as if made on such date.
6. REPRESENTATIONS AND WARRANTIES OF BORROWER. Borrower represents and
warrants, which representations and warranties shall survive any
investigations, inspections or inquiries made by Lender or any of its
representatives or the disbursement of Loan proceeds hereunder, that:
6.1 If Corporation: If a corporation, it is duly organized and
validly existing, in good standing under the laws of the state of its
incorporation, has stock outstanding which has been duly and validly issued,
is qualified to do business, and is in good standing under the laws of the
state in which the Property is situated, with full power and authority to
consummate the transactions contemplated hereby.
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6.2 If Limited Liability Company: If a limited liability company, it
is duly organized and validly existing, in good standing under the laws of
the state of its formation, and is in good standing under the laws of the
state in which the Property is situated, with full power and authority to
consummate the transactions contemplated hereby.
6.3 If General Partnership: If a general partnership, it is duly
organized and validly existing, with full power and authority to consummate
the transactions contemplated hereby.
6.4 If Limited Partnership: If a limited partnership, it is duly
organized and validly existing, in good standing under the laws of the state
in which the Property is situated, with full power and authority to
consummate the transactions contemplated hereby, and each of Borrower's
ownership interests has been issued in compliance with all federal and state
securities laws and regulations.
6.5 If Trust: If a trust, it is duly organized, validly existing and
the trustees thereof are qualified to act as trustee, with full power and
authority to consummate the transactions contemplated hereby.
6.6 Financial Statements: The Financial Statements heretofore
delivered to Lender are true and correct in all respects, have been prepared
in accordance with generally accepted accounting practice, fairly present the
respective financial conditions of the subjects thereof as of their
respective dates; no materially adverse change has occurred in the financial
conditions reflected therein since their respective dates and no additional
borrowings have been made by Borrower or any Guarantor since the date thereof
other than the borrowing contemplated hereby or approved by Lender.
6.7 Litigation: There are no actions, suits or proceedings pending
or, to the knowledge of Borrower, threatened against or affecting it, the
Property or Guarantor, or involving the validity or enforceability of the
Trust Deed or the priority of the lien thereof, at law or in equity, or
before or by any Governmental Authority. To Borrower's knowledge, it is not
in default with respect to any order, writ, injunction, decree or demand of
any court or any Governmental Authority.
6.8 No Breach: The consummation of the transaction hereby
contemplated and performance of this Agreement and the other Loan Documents
and the Environmental Indemnity will not result in any breach of, or
constitute a default under any mortgage, deed of trust, lease, bank loan or
security agreement, corporate charter, by laws or other instrument to which
the Borrower or any Guarantor is a party or by which it may be bound or
affected.
6.9 Other Liens: Borrower has made no contract or arrangement of any
kind, the performance of which by the other party thereto would give rise to
a lien on the Property.
6.10 Major Leases: The Major Leases, if any, are in full force and
effect, there are no defaults under any of the provisions thereof, and all
conditions to the effectiveness or continuing effectiveness thereof required
to be satisfied as of the date hereof have been satisfied.
6.11 No Default: There is no default on the part of Borrower under
this Agreement, any other Loan Document, or the Environmental Indemnity and
no event has occurred and is continuing which with notice or the passage of
time or either would constitute a default under any thereof.
6.12 CC&R's, Zoning: It has examined, is familiar with, and the
Improvements in all respects conform to and comply with, all covenants,
conditions, restrictions, reservations and zoning ordinances affecting the
Property.
6.13 Title to Personal Property: Any personal property required by
Lender as additional security for the Notes is vested in Borrower free and
clear of all liens, encumbrances and adverse claims and that the security
interest of Lender in the personal property shall be a first lien thereon.
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6.14 Other Financing: It has not received other financing for the
Property and/or the Improvements except as has been specifically disclosed to
and approved by Lender prior to Recordation.
6.15 Borrower's Powers; Enforceability: Borrower has full power and
authority to execute this Agreement, the Notes, and the other Loan Documents
and to undertake and consummate the transactions contemplated hereby and
thereby, and to pay, perform and observe its conditions, covenants,
agreements and obligations herein and therein contained. Each of the Loan
Documents, the Environmental Indemnity and the Guaranty, if any, when
executed and delivered to Lender, will constitute a legal, binding and valid
obligation, enforceable in accordance with its terms.
6.16 Finder's Fees: Borrower hereby warrants and represents that it
has not dealt with any person, firm or corporation who is or may be entitled
to any finder's fee, brokerage commission, loan commission or other sum in
connection with the execution of this Agreement, consummation of the
transactions contemplated hereby and the making of the Loan by Lender to
Borrower, and Borrower does hereby indemnify and agree to hold Lender
harmless from and against any and all loss, cost, liability or expense,
including reasonable attorney's fees Lender may suffer or sustain should such
warranty or representation prove inaccurate in whole or in part.
6.17 Accuracy: All documents, reports, instruments, papers,
information and forms of evidence delivered to Lender by Borrower with
respect to the Loan are accurate and correct, are complete insofar as
completeness may be necessary to give Lender true and accurate knowledge of
the subject matter thereof, and do not contain any misrepresentations or
omissions. Lender may rely on such documents, reports, instruments, papers,
information and forms of evidence without investigation or inquiry, and any
payment made by Lender in reliance thereon shall be a complete release in its
favor of all sums so paid.
7. BORROWER'S COVENANTS. Borrower covenants and agrees until the full and
final payment of the Loan, unless Lender waives compliance in writing, that
it will
7.1 Inspection: Permit Lender, or its representatives (and Lender
shall have the right) to enter upon the Property and inspect the Property and
the Improvements to determine Borrower's compliance with the Loan Documents,
and will cooperate with Lender in making its inspections. Inspections by
Lender shall be for the purpose of protecting the security of Lender and
preserving Lender's rights under the Loan Documents. No inspection shall be
deemed to constitute a waiver of any default of Borrower.
7.2 Title Insurance: Deliver or cause to be delivered to Lender at
Recordation or within a reasonable time thereafter a 1970 ALTA Lender's
Policy of Title Insurance or its equivalent with a liability limit of not
less than the face amount of the Notes, issued by Title Insurer, insuring
Lender's interest under the Trust Deed as a valid first lien on the Property,
together with such reinsurance or coinsurance agreements or endorsements to
said policy as Lender may require. Said policy shall contain only such
exceptions from its coverage as shall have been approved in writing by
Lender. After Recordation, Borrower shall, at its own cost and expense,
maintain the Trust Deed as a first lien on the Property. Borrower shall
furnish to Title Insurer surveys and any other information required to enable
it to issue such policy and endorsements.
7.3 Leases: Lender has approved all of the Major Leases identified on
Exhibit A. Borrower shall submit to Lender for its written approval a pro
forma schedule setting forth Borrower's projections regarding leasing of the
individual tenant spaces within the Improvements including, without
limitation, "effective" rental rate, triple net (i.e., exclusive of all
expenses, taxes, insurance, common area or other reimbursements or
recoveries) or gross rents, tenant improvement allowances, lease term, and
"free rent" or rent deferral periods ("Pro Forma Schedule"). All new leases
and tenants of the Improvements shall be subject to Lender's written approval
prior to execution of any such lease. For purposes hereof, an "Approved
Lease" shall mean a lease fully executed by the tenant thereunder and
Borrower on Borrower's current standard form lease for the Project, as
approved by Lender, and meeting the following criteria (except as may be
specifically approved otherwise by Lender):
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7.3.1 the minimum overall average "effective" rental rate over
the term of the lease shall be not less than the amount set forth in the Pro
Forma Schedule, on a triple net or gross rents basis as set forth in the Pro
Forma Schedule;
7.3.2 the lease term shall be for at least the minimum term set
forth in the Pro Forma Schedule;
7.3.3 any "free rent" period or other rent deferral period
provided for in the lease shall not exceed the maximum period or amount set
forth in the Pro Forma Schedule;
7.3.4 any material modifications to the approved standard form
lease shall be subject to the approval of Lender; and
7.3.5 Lender shall have approved the financial statements of the
proposed tenant, which approval shall be in the sole discretion of Lender. In
addition, Lender may require additional financial information concerning the
proposed tenant to be provided, which shall include a minimum of one (1)
year's operating statements.
Borrower shall deliver all proposed leases to Lender for review and
approval prior to execution. Proposed leases shall be delivered to Lender,
Attention: Real Estate Loan Department, or to such specific individual as may
designated in writing by Lender. Lender shall approve or disapprove any lease
so submitted by Borrower within ten (10) working days after Lender's receipt
thereof. Failure by Lender to approve or disapprove a lease within said ten
(10) day period shall be deemed an approval of said lease.
Borrower shall use its best and diligent efforts to lease all of
the Project, in accordance with the standards for Approved Leases set forth
above, and to keep the Project fully leased under leases complying with such
standards. Borrower shall fully and faithfully perform each and every
covenant, agreement, or obligation of lessor under any and all leases
covering any portion of the Project. Upon the request of Lender, Borrower
shall provide Lender with a current rent roll supplying the name of the
lessee and the net monthly rental for each space and such other information
as Lender may request.
7.4 Personal Property Installation: Not install materials, personal
property, equipment, or fixtures subject to any security agreement or other
agreement or contract wherein the right is reserved to any person, firm or
corporation to remove or repossess any such material, equipment or fixtures,
or whereby title to any of the same is not completely vested in Borrower at
time of installation, without Lender's written consent.
7.5 Insurance: Prior to Recordation, procure and deliver to Lender
and thereafter maintain a policy or policies of insurance in form and content
and by an insurer or insurers satisfactory to Lender, including a clause
giving Lender a minimum of thirty (30) days' notice if such insurance is
cancelled, as follows: (i) hazard insurance in an amount not less than the
face amount of the Notes or the full insurable value of the Improvements on a
replacement cost basis, whichever amount is lesser, with the normal
conditions including fire, extended coverage, vandalism, malicious mischief,
and a lender's loss payable endorsement naming Lender as loss payee; (ii)
comprehensive liability insurance on an "occurrence" basis, indicating
coverage satisfactory to Lender, and naming Lender as an additional insured;
(iii) any additional or different coverage as may be specified in Lender's
insurance letter; and (iv) any and all additional insurance that Lender in
its reasonable judgment may from time to time require (including, without
limitation, earthquake and/or flood coverage), against insurable hazards
which at the time are commonly insured against in the case of property
similarly situated. At Lender's request, Borrower shall supply Lender with a
counterpart original of any policy.
7.6 Maintain Records: Keep and maintain full and accurate books,
accounts and records of its operations according to generally accepted
accounting principles and practices for its type of business. All records
relating to the income, expenses, management, operation, maintenance, repair,
construction, alteration of or addition to the Property shall be kept at the
principal business office of Borrower for not less than three (3) years after
delivery of the annual statement required to be delivered pursuant to
Paragraph 7.7. Borrower shall permit Lender and its representatives or agents
to audit and/or examine from time to time upon reasonable written notice, all
books
and accounts and records pertaining to the Property and to make extracts
therefrom and copies thereof. Borrower shall make all such books and records
specified in the notice available at the time specified in the notice and at
the place where the records are kept, or at the election of Lender, at
Lender's office. If Borrower defaults in any obligations under this Agreement
or the Loan Documents, Lender may perform any of the acts authorized by this
paragraph at the sole cost of Borrower. Borrower shall promptly reimburse
Lender for its costs and such costs shall be secured by the Trust Deed.
7.7 Financial Information: Furnish to Lender at least annually,
within ninety (90) days after the end of its fiscal year, or more frequently
if requested by Lender, a full and complete financial statement concerning
income, expenses, assets, and liabilities applicable or attributable to the
Property and the operations thereof. Such statement shall be prepared in
accordance with generally accepted accounting principles and shall be
certified as true, complete and correct by Borrower.
7.8 Taxes: Pay and discharge all lawful claims, including taxes,
assessments, and governmental charges or levies imposed upon it or its income
or profits or upon any properties belonging to it prior to the date upon
which penalties attach thereto; provided that Borrower shall not be required
to pay any such tax, assessment, charge, or levy, the payment of which is
being contested in good faith and by proper proceedings.
7.9 Notification of Default: Promptly notify Lender in writing of the
occurrence of any event of default under this Agreement, the Notes, the Trust
Deed or the Environmental Indemnity or of any facts then in existence which
would become an event of default hereunder or thereunder upon the giving of
notice or the lapse of time or both.
7.10 Payment of Costs: Pay all costs and expenses required to satisfy
the conditions of this Agreement. Without limitation of the generality for
the foregoing, Borrower will pay:
7.10.1 all taxes and recording expenses, including stamp taxes,
if any;
7.10.2 the fees and commissions lawfully due to brokers in
connection with this transaction and hold Lender harmless from all such
claims; and
7.10.3 the fees of Lender's counsel in connection with the
negotiation and preparation of this Agreement and the Loan Documents.
7.11 No Conveyance or Encumbrance: Not to sell, convey, transfer,
dispose of or further encumber the Property or the Improvements or any part
thereof or any interest therein or enter into a lease covering all or any
portion thereof or an undivided interest therein, either voluntarily,
involuntarily or otherwise, or enter into an agreement so to do without the
prior written consent of Lender being first had and obtained. All easements,
declarations of covenants, conditions and restrictions, and private or public
dedications affecting the Property shall be submitted to Lender for its
approval and such approval shall be obtained prior to the execution or
granting of any thereof by Borrower, accompanied by a drawing or survey
showing the precise location of each thereof.
7.12 Loan-to-Value Ratio: Maintain the ratio of (i) the then
outstanding principal balance of the First Non-Revolving Loan to (ii) the
value of the Property at stabilized occupancy at less than or equal to its
respective Loan-to-Value Ratio; and maintain the ratio of (i) the then
outstanding principal balance of the Second Non-Revolving Loan to (ii) the
value of the Property at stabilized occupancy at less than or equal to its
respective Loan-to-Value Ratio. Lender may from time to time determine the
value of the Property at stabilized occupancy using a method which (a)
conforms to then-current regulatory requirements, (b) is determined by Lender
to be reasonable and appropriate under the circumstances, and (c) takes into
account then-current market conditions, including vacancy factors, estimated
date of stabilization, rental rates and concessions, all as determined by
Lender. If Lender at any time determines that the Loan-to-Value Ratio has
been exceeded, Lender may, at Lender's option, make written demand on
Borrower to repay principal of the Loan in an amount sufficient to reduce the
then outstanding principal balance of the Loan so that the Loan-to-Value
Ratio is not exceeded. Borrower shall make any such payment of principal
within fifteen (15) days after delivery of such demand by Lender.
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7.13 Compliance with Governmental Requirements: Comply promptly with
any Governmental Requirement. Within ten (10) days after Borrower's receipt
of any governmental permits, approvals or disapprovals, Borrower shall
deliver copies of all such matters to Lender.
7.14 Satisfy Conditions: Cause all conditions hereof to be satisfied
at the time and in the manner herein provided.
7.15 Furnishing Notices: Borrower shall promptly furnish Lender with
copies, or notify Lender in writing, of the following:
7.15.1 any litigation affecting Borrower or any Guarantor, or if
Borrower is a partnership, any general partner of Borrower, where the amount
claimed is in excess of the Litigation Amount.
7.15.2 any communication, whether written or oral, that Borrower
may receive from any governmental, judicial or legal authority, giving notice
of any claim or assertion that the Improvements fail in any respect to comply
with any Governmental Requirements, or of any dispute which may exist between
Borrower and any governmental, judicial or legal authority that may adversely
affect Borrower, the Property or the Project;
7.15.3 any material adverse change in Borrower's or any
Guarantor's financial condition or operations or in the physical condition of
the Property and if Borrower is a partnership, in the financial condition or
operation of its general partner(s);
7.15.4 any filings (with true copies thereof) with any
Governmental Authority regarding or pursuant to any law related to Hazardous
Materials (as defined in the Trust Deed) or the environment;
7.15.5 any proceeding or inquiry by any Governmental Authority
(including, without limitation, the California State Department of Health
Services) with respect to the presence of any Hazardous Materials on the
Property or the migration thereof from or to other property;
7.15.6 all claims made or threatened by any third party against
Borrower or the Property relating to any loss or injury resulting from any
Hazardous Materials;
7.15.7 Borrower's discovery of any occurrence or condition on
any real property adjoining or in the vicinity of the Property or any part
thereof to be subject to any restriction on the ownership, occupancy,
transferability or use of the Property under any Hazardous Materials Laws; or
7.15.8 any proposed or contemplated change in the organization
or management of Borrower or in the nature of its business.
7.16 Organization and Management: Without the prior written consent
of Lender, Borrower shall not permit or suffer any management, organizational
or other material changes in its structure or operations and if Borrower is a
partnership, in the structure or operations of its general partner(s).
8. DEFAULT. At the option of Lender, the following shall constitute events of
default hereunder (including, if Borrower consists of more than one person,
the occurrence of any of such events which respect to any one or more of said
persons):
8.1 Any default in the performance of any covenant, condition or
agreement set forth herein, in the Trust Deed, Notes or other Loan Documents
or in any ground lease if the Property is a leasehold estate.
8.2 Borrower voluntarily suspends the transaction of business or
there is an attachment, execution or other judicial seizure of any portion of
Borrower's assets and such seizure is not discharged within ten (10) days.
10
8.3 Borrower becomes insolvent or unable to pay its debts as they
mature or makes an assignment for the benefit of creditors.
8.4 Borrower files or there is filed against Borrower a petition to
have Borrower adjudicated a bankrupt or a petition of reorganization or
arrangement under any law relating to bankruptcy unless, in the case of a
petition filed against Borrower, the same is dismissed within ten (10) days.
8.5 Borrower applies for or consents to the appointment of a
receiver, trustee or conservator for any portion of Borrower's property or
such appointment is made without Borrower's consent and is not vacated within
ten (10) days.
8.6 Any representation by Borrower to Lender concerning Borrower's
financial condition or credit standing or any representation or warranty
contained herein proves to be false or misleading.
8.7 Default by Borrower on any other debt at Comerica
Bank-California.
8.8 The imposition, voluntary or involuntary, of any lien or
encumbrance upon the Property without Lender's written consent or unless an
adequate counter bond is provided and such lien is accordingly released
within ten (10) days of the imposition of such lien.
8.9 The occurrence of any event enumerated in Paragraphs 8.2, 8.3,
8.4, 8.5, 8.6, and 8.7 hereof with respect to any Guarantor.
9. REMEDIES. If any of the events of default set forth in Paragraph 8 occur,
then Lender, in addition to its other rights hereunder, may at its option,
without prior demand or notice:
9.1 Declare the Notes immediately due and payable.
9.2 Proceed as authorized by law to satisfy the indebtedness of
Borrower to Lender and in that regard, Lender shall be entitled to all of the
rights, privileges and benefits contained in the Trust Deed or other Loan
documents.
10. SECURITY INTEREST. Borrower does hereby give and grant to Lender a
security interest in all funds and deposits of Borrower on deposit at Lender
or any branch of Lender, as additional security for the obligations of
Borrower contained in the Notes, Trust Deed and the other Loan Documents.
11. RELEASE AND INDEMNITY. Borrower agrees to release and indemnify, defend
and hold Lender harmless from and against all liabilities, claims, actions,
damages, costs and expenses (including all reasonable legal fees and expenses
of Lender's counsel) arising out of or resulting from any failure to satisfy
any of the Governmental Requirements; Lender's performance of any act
permitted under the Loan Documents (excluding Lender's willful misconduct);
breach of any representation or warranty made or given by Borrower to Lender;
breach of any obligation of Borrower contained in any of the Loan Documents;
or any claim or cause of action of any kind by any party that Lender is
liable for any act or omission committed or made by Borrower or any other
person or entity in connection with the ownership or operation of the
Property, whether on account of any theory of derivative liability,
comparative negligence or otherwise. Upon demand by Lender, Borrower shall
defend any action or proceeding brought against Lender arising out of or
alleging any claim or cause of action covered by this indemnity, all at
Borrower's own cost and by counsel to be approved by Lender in the exercise
of its reasonable judgment. In the alternative, Lender may elect to conduct
its own defense at the expense of Borrower. The provisions of this Paragraph
11 shall survive the termination of this Agreement, the repayment of the
Loan, and the release of the Property or any portion of it from the Trust
Deed.
11
12. GENERAL CONDITIONS.
12.1 No Waiver: No delay or omission of Lender in exercising any
right or power arising from any default by Borrower shall be construed as a
waiver of such default or as an acquiescence therein, nor shall any single or
partial exercise thereof preclude any further exercise thereof. Lender may,
at its option, waive any of the conditions herein and any such waiver shall
not be deemed a waiver of Lender's rights hereunder but shall be deemed to
have been made in pursuance of this Agreement and not in modification
thereof. No waiver of any event of default shall be construed to be a waiver
of or acquiescence in or consent to any preceding or subsequent event of
default.
12.2 No Third Party Benefits: This Agreement is made for the sole
benefit of Borrower and Lender, their successors and assigns and no other
person or persons shall have any rights or remedies under or by reason of
this Agreement nor shall Lender owe any duty whatsoever to any claimant to
exercise any right or power of Lender hereunder or arising from any default
by Borrower.
12.3 Notice: All notices or demands of any kind which either party
may be required or desire to serve upon the other under the terms of this
Agreement shall be in writing and shall be given by personal delivery,
national overnight courier, or by certified or registered United States mail,
postage prepaid, to the address for the party to be served set forth below
its signature. Notices shall be effective upon receipt or when proper
delivery is refused. In case of service by mail, notices shall be deemed
complete at the expiration of the second day after the date of mailing. If
Borrower consists of more than one person, service of any notice or demand of
any kind by Lender upon any one of said persons in the manner hereinabove
provided shall be complete service upon all. Either party may change its
address for purposes of notice by giving notice of such change of address to
the other party in accordance with the provisions of this paragraph.
12.4 Entire Agreement: This Agreement, the other Loan Documents and
the Environmental Indemnity constitute the entire understanding between the
parties regarding the matters mentioned in or incidental to this Agreement.
The Loan Documents and the Environmental Indemnity supersede all oral
negotiations and prior writings concerning the subject matter of the Loan
Documents and the Environmental Indemnity, including any inconsistent terms
of Lender's loan commitment to Borrower, if any; provided, however, that all
obligations of Borrower under the loan commitment (including, without
limitation, the obligation to pay any fees to Lender and any costs and
expenses relating to the Loan) shall survive the execution and delivery of
this Agreement, the other Loan Documents and the Environmental Indemnity, and
any failure by Borrower to perform any such obligation shall constitute an
event of default hereunder. If there is any conflict between the terms,
conditions and provisions of this Agreement and those of any other agreement
or instrument, including any of the Loan Documents or the Environmental
Indemnity, the terms, conditions and provisions of this Agreement shall
prevail. This Agreement may not be modified, amended or terminated except by
a written agreement signed by each of the parties hereto.
12.5 Documentation: In addition to the instruments and documents
mentioned or referred to herein, Borrower will, at its own cost and expense,
supply Lender with such other instruments, documents, information and data as
may, in Lender's opinion, be reasonably necessary for the purposes hereof,
all of which shall be in form and content acceptable to Lender.
12.6 Borrower Information: Borrower agrees that Lender may provide
any financial or other information, data or material in Lender's possession
relating to Borrower, the Loan, this Agreement, the Property or the
Improvements, to Lender's parent, affiliate, subsidiary, participants or
service providers, without further notice to Borrower.
12.7 Not Assignable: Neither this Agreement nor any right of Borrower
to receive any sums, proceeds or disbursements hereunder, or under the Notes
may be assigned, pledged, hypothecated, anticipated or otherwise encumbered
by Borrower without the prior written consent of Lender. Subject to the
foregoing restrictions, this Agreement shall inure to the benefit of Lender,
its successors and assigns and bind Borrower, its heirs, executors,
administrators, successors and assigns.
12.8 Time is of the Essence: Time is hereby declared to be of the
essence of this Agreement and of every part hereof.
12
12.9 Supplement to Loan Documents: The provisions of this Agreement
are not intended to supersede the provisions of the Trust Deed or any other
Loan Document or the Environmental Indemnity but shall be construed as
supplemental thereto.
12.10 Joint and Several Obligations: If Borrower consists of more
than one person, the obligations of Borrower shall be the joint and several
obligations of all such persons, and any married person who executes this
Agreement agrees that recourse may be had against his or her separate
property for satisfaction of his or her obligations hereunder. When the
context and construction so require, all words used in the singular herein
shall be deemed to have been used in the plural and the masculine shall
include the feminine and neuter and vice versa.
12.11 Governing Law: This Agreement (and any and all disputes between
the parties arising directly or indirectly from the transaction or from the
lending relationship contemplated hereunder) shall be governed by and
construed in accordance with the laws of the State of California.
12.12 Governmental Regulations: If payment of the indebtedness
secured by the Trust Deed is to be insured or guaranteed by any governmental
agency, Borrower shall comply with all rules, regulations, requirements and
statutes relating thereto or provided in any commitment issued by any such
agency to insure or guarantee payment of such indebtedness.
12.13 Collection Costs: Borrower shall pay promptly to Lender without
demand, with interest thereon from date of expenditure at the Default
Interest rate, reasonable attorneys' fees and all costs and other expenses
paid or incurred by Lender in enforcing or exercising its rights or remedies
created by, connected with or provided in this Agreement, and payment thereof
shall be secured by the Trust Deed.
12.14 Survival: The representations, warranties and covenants herein
shall survive the disbursement of the Loan and shall remain in force and
effect until the Loan is paid in full.
12.15 Waiver of Jury Trial: LENDER AND BORROWER EACH ACKNOWLEDGE AND
AGREE THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT OR THE
LENDING RELATIONSHIP ESTABLISHED HEREBY WOULD BE BASED UPON DIFFICULT AND
COMPLEX ISSUES, AND THEREFORE, BORROWER AND LENDER EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING (INCLUDING ACTIONS
SOUNDING IN TORT) TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT RELATING HERETO OR ARISING FROM THE TRANSACTION
CONTEMPLATED HEREUNDER OR THE LENDING RELATIONSHIP ESTABLISHED HEREBY AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE AND NOT BY A JURY.
13. SEVERABILITY. Invalidation of any one or more of the provisions of this
Agreement, the Trust Deed, the other Loan Documents or the Environmental
Indemnity by judgment or court order shall in no way affect any of the other
provisions thereof which shall remain in force and effect.
14. SPECIAL CONDITIONS. The special conditions, if any, are set forth in
Exhibit C attached hereto and made a part hereof and are, by this reference,
incorporated herein.
13
IN WITNESS WHEREOF, the parties have executed this Agreement the
day and year first above written.
COMERICA BANK,
a Michigan Banking Corporation
By: ____________________________________
Xxxx X. XxXxxxxxx, Vice President
Address:
0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attn: Xxxx XxXxxxxxx
BORROWER
AWG, LTD.
By: ____________________________________
Xxxx X. Xxxxxxxxx, Secretary
Address:
c/o J.E.A. Enterprises, L.L.C.
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
14
SCHEDULE OF MAJOR LEASES
(Exhibit A)
Square Term of
Premises Date of Lease Tenant Feet Lease
-------- ------------- ------ ------ -------
15
LOAN DISBURSEMENT AUTHORIZATION
(Exhibit B)
THE LOAN PROCEEDS IN THE AMOUNT OF $______________ SHALL BE
DISBURSED AS FOLLOWS:
Lender is hereby authorized and directed to make disbursements for
the purposes, in the amounts, and to the persons indicated:
1. As a non-refundable Loan Fee to COMERICA BANK-CALIFORNIA, a
California Banking Corporation, the sum of $12,500.
2. To Chicago Title Company, for payment of title policy premiums
and recording fees, the approximate sum of $________________.
3. For payment of taxes, the sum of $_______________.
4. Upon demand of _______________________________________, pay the
principal sum of $______________ plus interest thereon, if any,
to _______________________ for the credit of Borrower for use in
their escrow number _______________.
5. To COMERICA BANK-CALIFORNIA, a California Banking
Corporation, for appraisal fees and other costs of
processing the Loan the approximate sum of $___________.
6. Credit Account No. __________________ at COMERICA BANK-
CALIFORNIA, a California Banking Corporation, in the sum
of $_____________.
7. Pay to COMERICA BANK-CALIFORNIA, a California Banking
Corporation, for credit to Loan No. _______________ the
sum of $_______________.
8. Other: _______________________________________________________.
THIS LOAN DISBURSEMENT AUTHORIZATION IS EXECUTED BY BORROWER AND LENDER AS OF
THIS 10TH DAY OF DECEMBER, 1998.
BORROWER LENDER
AWG, LTD. COMERICA BANK,
a Michigan Banking Corporation
By: ____________________________ Address:
Xxxx X. Xxxxxxxxx, Secretary 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx Xxxxx, XX 00000
Attn: Xxxx XxXxxxxxx
Address:
c/o J.E.A. Enterprises, L.L.C.
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
16
SPECIAL CONDITIONS
(Exhibit C)
1. In addition to the definitions under Paragraph 1 of the Agreement, the
following definitions shall be used in the Agreement:
(a) First Non-Revolving Loan: That certain loan evidenced by the
First Non-Revolving Note in the principal amount of One Million Six Hundred
Fifty Thousand Dollars ($1,650,000).
(b) First Non-Revolving Note: That promissory note of even date
herewith executed by Borrower as Maker and payable to Lender or order, in the
principal amount of the First Non-Revolving Loan.
(c) Revolving Loan: That certain loan evidenced by the Revolving
Note in the principal amount of up to Two Hundred Thousand Dollars
($200,000).
(d) Revolving Note: The promissory note of even date herewith,
executed by Borrower as Maker and payable to Lender or order, in the
principal amount of the Revolving Loan.
(e) Second Non-Revolving Loan: That certain loan evidenced by the
Second Non-Revolving Note in the principal amount of Eight Hundred Fifty
Thousand Dollars ($850,000).
(f) Second Non-Revolving Note: The promissory note of even date
herewith, executed by Borrower as Maker and payable to Lender or order, in
the principal amount of the Second Non-Revolving Loan.
2. In addition to the conditions to disbursement in Paragraph 5 of the
Agreement, the following conditions shall have been satisfied prior to any
disbursements under the Revolving Loan pursuant to the Revolving Note:
(a) Borrower shall have received no less than Three Million
Dollars ($3,000,000) in proceeds from the sale or issuance of its equity
securities in an initial public offering of its preferred stock under XXX
Xxxxxxxxxxxx Xx. 000.
(b) Lender shall have received copies of all equipment invoices
from equipment that was puchased on or after December 31, 1997. Further
Borrower shall deliver to Lender copies of all equipment invoices for
equipment purchased within six months after the date of the Agreement.
(c) Borrower shall have furnished Lender with details, satisfactory
to Lender, of the operating expenses for Borrower's fiscal years 1996 and
1997.
(d) Borrower has completed construction of the Improvements and
paid for the Improvements, and has delivered evidence thereof satisfactory to
Lender to clear title to the Property.
(e) Lender shall have received copies of the individual tax returns
of Xxxxxx X. Xxxxxxxx for the years 1996 and 1997.
(f) Lender has received evidence, satisfactory to Lender, of
Borrower's debt repayment for the refinancing of Borrower's debt existing on
the date of the Agreement.
17
FIRST NON-REVOLVING NOTE
(SECURED BY DEED OF TRUST/FLOATING OR FIXED RATE OPTION, AMORTIZING)
==============================================================================
BORROWER'S NAME AND ADDRESS OFFICER MATURITY DATE
==============================================================================
AWG Ltd. Xxxx XxXxxxxxx December 9, 2005
c/o J.E.A. Enterprises, L.L.C.
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
==============================================================================
$1,650,000 San Jose, California December 10, 1998
FOR VALUE RECEIVED, AWG, Ltd. ("Borrower"), jointly and severally, promise(s)
to pay to the order of COMERICA BANK, a Michigan Banking Corporation
("Lender"), at its office at 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx Xxxxx, XX 00000 or at such other place as the holder of this Note
may from time to time designate in writing, the principal sum of One Million
Six Hundred Fifty Thousand Dollars ($1,650,000), or so much thereof as may be
advanced from time to time, together with interest from the date hereof
computed on the principal balances hereof from time to time outstanding at
the rate of one of the following options to be chosen by Borrower and notice
thereof shall be given to Lender prior to the initial advance hereunder: the
(i) fixed rate of seven and one-tenth percent (7.1%) per annum or (ii) rate
equal to the Base Rate (as herein defined) of interest, adjusted daily.
Principal and interest shall be payable in monthly installments of
__________________________ Dollars ($__________) each on the first day of
each calendar month commencing with the first day of January, 1999 and
continuing until December 9, 2005 (the "Maturity Date"), on which date the
entire balance of principal and interest then unpaid shall be due and
payable. For the purpose of this Note, the Base Rate is that rate so
announced by Lender as its "base rate" from time to time and which serves as
the basis upon which effective rates of interest are calculated for those
loans making reference thereto. If applicable, the interest rate payable
hereunder shall fluctuate with any change in the Base Rate, and such
fluctuation in the interest rate shall be effective on the effective date of
each and every change in the Base Rate as, from time to time, announced by
Lender at its corporate headquarters in Detroit, Michigan.
Any amounts borrowed hereunder and repaid may not be readvanced.
Interest shall be computed daily based upon a three hundred sixty (360) day
year for the actual number of days elapsed. Should interest not be paid when
due, it shall become part of the principal and thereafter bear interest as
herein provided. Each payment shall be credited first to interest then due
and the remainder to principal. If, on the due date of the first installment
of principal and interest, interest is due and accrued for a period of more,
or less, than one month, the amount of said installment shall be increased or
decreased to the extent that the amount of interest due and accrued exceeds
or is less than one month's interest.
Should default be made in the payment of principal or interest when due or in
the performance or observance when due of any term, covenant or condition of
any deed of trust, security agreement or other agreement (including
amendments and extensions thereof) securing or pertaining to this Note, then,
at the option of the holder hereof and without notice or demand, the entire
balance of principal and accrued interest then remaining unpaid shall become
immediately due and payable and thereafter bear interest, until paid in full,
at the increased rate of five percent (5%) per annum over and above the
interest rate contracted for herein as it may vary from time to time.
Borrower acknowledges and agrees that during the time that any payment of
principal, interest or other amounts due under this Note is delinquent, the
holder will incur additional costs and expenses attributable to its loss of
use of the money due and to the adverse impact on the holder's ability to
avail itself of other opportunities. Borrower acknowledges and agrees that it
is extremely difficult and impractical to ascertain the extent of such costs
and expenses and that proof of actual damages would be costly or
inconvenient. Borrower therefore agrees that interest
1
at the increased rate of five percent (5%) per annum over and above the
interest rate contracted for in this Note represents a reasonable sum
considering all the circumstances existing on the date of this Note and
represents a fair and reasonable estimate of such costs and expenses. No
delay or omission on the part of the holder hereof in exercising any right
hereunder or under any such deed of trust, security agreement or other
agreement shall operate as a waiver of such right or of any other right under
this Note or under any such deed of trust, security agreement or other
agreement.
If any payment of principal or interest under this Note shall not be made
within ten (10) calendar days of the date due, a late charge of five percent
(5%) of the overdue amount may be charged by the holder for the purpose of
defraying the expenses incident to handling such delinquent payments.
Borrower acknowledges and agrees that it is extremely difficult and
impractical to ascertain the extent of such expenses and that proof of actual
damages would be costly or inconvenient. Borrower therefore agrees that such
late charge represents a reasonable sum considering all of the circumstances
existing on the date of this Note and represents a fair and reasonable
estimate of the costs that will be sustained by the holder due to the failure
of the undersigned to make timely payments. Such late charge shall be paid
without prejudice to the right of the holder to collect any other amounts
provided to be paid or to declare a default under this Note or under the Deed
of Trust referred to in this Note or from exercising any of the other rights
and remedies of the holder, including, without limitation, the right to
declare the entire balance of principal and accrued interest then remaining
unpaid immediately due and payable.
In no event shall interest accrue or be payable hereon or under any such deed
of trust, security agreement or other agreement in excess of the maximum
amount of interest permitted on the date hereof by the laws of the State of
California.
If this Note is not paid when due, whether at its specified or accelerated
maturity date, Borrower promises to pay all costs of collection and
enforcement of this Note, including, but not limited to, reasonable
attorneys' fees and costs incurred by the holder hereof on account of such
collection or enforcement, whether or not suit is filed hereon.
Principal and interest shall be payable in lawful money of the United States
without setoff, demand or counterclaim. Borrower waives the defense of the
statute of limitations in any action on this Note. Presentment, notice of
dishonor, and protest are waived by all makers, sureties, guarantors and
endorsers of this Note. Such parties expressly consent to any extension of
the time of payment hereof or any installment hereof, to any renewal, and to
the release of any or all of the security given for the payment of this Note
or the release of any party liable for this obligation.
Borrower agrees that Lender may provide any financial or other information,
data or material in Lender's possession relating to Borrower, the Loan, this
Note, the property or the improvements, to Lender's parent, affiliate,
subsidiary, participants or service providers, without further notice to
Borrower.
This Note is secured by, among other things, a deed of trust ("Deed of
Trust") bearing even date herewith encumbering certain property located in
the County of Napa, State of California. This Note shall be governed and
construed in accordance with the laws of the State of California.
The Deed of Trust securing the obligation evidenced hereby contains the
following provision: "That should Trustor sell, convey, transfer, dispose of
or further encumber said property or any part thereof or any interest therein
or enter into a lease covering all or any portion thereof or an undivided
interest therein, either voluntarily, involuntarily or otherwise, or enter
into an agreement so to do, without the prior written consent of Beneficiary
being first had and obtained, then Beneficiary may, at its option, declare
all sums secured hereby immediately due and payable. Consent to one such
transaction shall not be deemed to be a waiver of the right to require such
consent to future or successive transactions."
Lender does not have to accept any prepayment of principal under this Note
except as described below. The undersigned may prepay principal of this Note
in increments of Five Hundred Dollars ($500) at any time as long as Lender is
provided written notice of the prepayment at least five (5) business days
prior to the date of prepayment. The notice of prepayment shall contain the
following information: (a) the date of prepayment (the "Prepayment
2
Date") and (b) the amount of principal to be prepaid. On the Prepayment Date,
the undersigned will pay to Lender, in addition to the other amounts then due
on this Note, the Prepayment Amount described below. Lender, in its sole
discretion, may accept any prepayment of principal even if not required to do
so under this Note and may deduct from the amount to be applied against
principal the other amounts required as part of the Prepayment Amount.
The Prepaid Principal Amount (as defined below) will be applied to this Note
in the reverse order of which the principal payments would have been due
under this Note's principal amortization schedule. In other words, if this
Note requires multiple principal payments, then as opposed to prepaying the
next Principal Payment due, the Prepaid Principal Amount will be applied
beginning with the final principal payment due on this Note.
If Lender exercises its right to accelerate the payment of this Note prior to
the Maturity Date, the undersigned will pay to Lender, in addition to the
other amounts then due on this Note, on the date specified by Lender as the
Prepayment Date, the Prepayment Amount.
Lender's determination of the Prepayment Amount will be conclusive in the
absence of obvious error or fraud. If requested in writing by the
undersigned, Lender will provide the undersigned a written statement
specifying the Prepayment Amount.
The following (the "Prepayment Amount") shall be due and payable in full on
the Prepayment Date:
(a) If the face amount of this Note exceeds Seven Hundred Fifty
Thousand Dollars ($750,000) (regardless of what the outstanding
principal balance may be on the Prepayment Date), then the Prepayment
Amount is the sum of: (i) the amount of principal which the
undersigned has elected to prepay or the amount of principal which
Lender has required the undersigned to prepay because of
acceleration, as the case may be (the "Prepaid Principal Amount");
(ii) interest accruing on the Prepaid Principal Amount up to, but not
including, the Prepayment Date; (iii) Five Hundred Dollars ($500)
plus (iv) the present value, discounted at the Reinvestment Rates (as
defined below) of the positive amount by which (A) the interest
Lender would have earned had the Prepaid Principal Amount been paid
according to the Note's amortization schedule at the Note's interest
rate exceeds (B) the interest Lender would earn by reinvesting the
Prepaid Principal Amount at the Reinvestment Rates.
"Reinvestment Rates" mean the per annum rates of interest equal to one-half
percent (1/2%) above the rates of interest reasonably determined by Lender to
be in effect not more than seven days prior to the Prepayment Date in the
secondary market for United States Treasury Obligations in amount(s) and with
maturity(ies) which correspond (as closely as possible) to the principal
installment amount(s) and the payment date(s) against which the Prepaid
Principal Amount will be applied.
THE UNDERSIGNED ACKNOWLEDGE(S) AND AGREE(S) THAT: (A) THERE IS NO RIGHT TO
PREPAY THIS NOTE, IN WHOLE OR IN PART, WITHOUT PAYING THE PREPAYMENT AMOUNT;
(B) THE UNDERSIGNED SHALL BE LIABLE FOR PAYMENT OF THE PREPAYMENT AMOUNT IF
LENDER EXERCISES ITS RIGHT TO ACCELERATE PAYMENT OF THIS NOTE, INCLUDING
WITHOUT LIMIT ACCELERATION UNDER A DUE-ON-SALE PROVISION; (C) THE UNDERSIGNED
WAIVE(S) ANY RIGHTS UNDER SECTION 2954.10 OF THE CALIFORNIA CIVIL CODE, OR
ANY SUCCESSOR STATUTE; AND (D) LENDER HAS MADE THE LOAN EVIDENCED BY THIS
NOTE IN RELIANCE ON THESE AGREEMENTS.
INITIALS: __________ __________
3
No partial prepayment shall affect the obligation of Borrower to pay the next
and subsequent regular installments payable hereunder until the entire
balance of principal and interest shall have been paid in full.
BORROWER
AWG, LTD.
By: _______________________________
Xxxx X. Xxxxxxxxx, Secretary
Address:
c/o J.E.A. Enterprises, L.L.C.
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
4
SECOND NON-REVOLVING NOTE
(SECURED BY DEED OF TRUST/FLOATING OR FIXED RATE OPTION, AMORTIZING)
==============================================================================
BORROWER'S NAME AND ADDRESS OFFICER MATURITY DATE
==============================================================================
AWG Ltd. Xxxx XxXxxxxxx December 9, 2005
c/o J.E.A. Enterprises, L.L.C.
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
==============================================================================
$850,000 San Jose, California December 10, 1998
FOR VALUE RECEIVED, AWG, Ltd. ("Borrower"), jointly and severally, promise(s)
to pay to the order of COMERICA BANK, a Michigan Banking Corporation
("Lender"), at its office at 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx Xxxxx, XX 00000 or at such other place as the holder of this Note
may from time to time designate in writing, the principal sum of Eight
Hundred Fifty Thousand Dollars ($850,000), or so much thereof as may be
advanced from time to time, together with interest from the date hereof
computed on the principal balances hereof from time to time outstanding at
the rate of one of the following options to be chosen by Borrower and notice
thereof shall be given to Lender prior to the initial advance hereunder: the
(i) the fixed rate of seven percent (7%) per annum or (ii) rate equal to the
Base Rate (as herein defined) of interest, adjusted daily. Principal and
interest shall be payable in monthly installments of
_________________________ Dollars ($_______) each on the first day of each
calendar month commencing with the first day of January, 1999 and continuing
until December 9, 2005 (the "Maturity Date"), on which date the entire
balance of principal and interest then unpaid shall be due and payable. For
the purpose of this Note, the Base Rate is that rate so announced by Lender
as its "base rate" from time to time and which serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto. If applicable, the interest rate payable hereunder shall fluctuate
with any change in the Base Rate, and such fluctuation in the interest rate
shall be effective on the effective date of each and every change in the Base
Rate as, from time to time, announced by Lender at its corporate headquarters
in Detroit, Michigan.
Any amounts borrowed hereunder and repaid may not be readvanced.
Interest shall be computed daily based upon a three hundred sixty (360) day
year for the actual number of days elapsed. Should interest not be paid when
due, it shall become part of the principal and thereafter bear interest as
herein provided. Each payment shall be credited first to interest then due
and the remainder to principal. If, on the due date of the first installment
of principal and interest, interest is due and accrued for a period of more,
or less, than one month, the amount of said installment shall be increased or
decreased to the extent that the amount of interest due and accrued exceeds
or is less than one month's interest.
Should default be made in the payment of principal or interest when due or in
the performance or observance when due of any term, covenant or condition of
any deed of trust, security agreement or other agreement (including
amendments and extensions thereof) securing or pertaining to this Note, then,
at the option of the holder hereof and without notice or demand, the entire
balance of principal and accrued interest then remaining unpaid shall become
immediately due and payable and thereafter bear interest, until paid in full,
at the increased rate of five percent (5%) per annum over and above the
interest rate contracted for herein as it may vary from time to time.
Borrower acknowledges and agrees that during the time that any payment of
principal, interest or other amounts due under this Note is delinquent, the
holder will incur additional costs and expenses attributable to its loss of
use of the money due and to the adverse impact on the holder's ability to
avail itself of other opportunities. Borrower acknowledges and agrees that it
is extremely difficult and impractical to ascertain the extent of such costs
and expenses and that proof of actual damages would be costly or
inconvenient. Borrower therefore agrees that interest at the increased rate
of five percent (5%) per annum over and above the interest rate contracted
for in this Note
1
represents a reasonable sum considering all the circumstances existing on the
date of this Note and represents a fair and reasonable estimate of such costs
and expenses. No delay or omission on the part of the holder hereof in
exercising any right hereunder or under any such deed of trust, security
agreement or other agreement shall operate as a waiver of such right or of
any other right under this Note or under any such deed of trust, security
agreement or other agreement.
If any payment of principal or interest under this Note shall not be made
within ten (10) calendar days of the date due, a late charge of five percent
(5%) of the overdue amount may be charged by the holder for the purpose of
defraying the expenses incident to handling such delinquent payments.
Borrower acknowledges and agrees that it is extremely difficult and
impractical to ascertain the extent of such expenses and that proof of actual
damages would be costly or inconvenient. Borrower therefore agrees that such
late charge represents a reasonable sum considering all of the circumstances
existing on the date of this Note and represents a fair and reasonable
estimate of the costs that will be sustained by the holder due to the failure
of the undersigned to make timely payments. Such late charge shall be paid
without prejudice to the right of the holder to collect any other amounts
provided to be paid or to declare a default under this Note or under the Deed
of Trust referred to in this Note or from exercising any of the other rights
and remedies of the holder, including, without limitation, the right to
declare the entire balance of principal and accrued interest then remaining
unpaid immediately due and payable.
In no event shall interest accrue or be payable hereon or under any such deed
of trust, security agreement or other agreement in excess of the maximum
amount of interest permitted on the date hereof by the laws of the State of
California.
If this Note is not paid when due, whether at its specified or accelerated
maturity date, Borrower promises to pay all costs of collection and
enforcement of this Note, including, but not limited to, reasonable
attorneys' fees and costs incurred by the holder hereof on account of such
collection or enforcement, whether or not suit is filed hereon.
Principal and interest shall be payable in lawful money of the United States
without setoff, demand or counterclaim. Borrower waives the defense of the
statute of limitations in any action on this Note. Presentment, notice of
dishonor, and protest are waived by all makers, sureties, guarantors and
endorsers of this Note. Such parties expressly consent to any extension of
the time of payment hereof or any installment hereof, to any renewal, and to
the release of any or all of the security given for the payment of this Note
or the release of any party liable for this obligation.
Borrower agrees that Lender may provide any financial or other information,
data or material in Lender's possession relating to Borrower, the Loan, this
Note, the property or the improvements, to Lender's parent, affiliate,
subsidiary, participants or service providers, without further notice to
Borrower.
This Note is secured by, among other things, a deed of trust ("Deed of
Trust") bearing even date herewith encumbering certain property located in
the County of Napa, State of California. This Note shall be governed and
construed in accordance with the laws of the State of California.
The Deed of Trust securing the obligation evidenced hereby contains the
following provision: "That should Trustor sell, convey, transfer, dispose of
or further encumber said property or any part thereof or any interest therein
or enter into a lease covering all or any portion thereof or an undivided
interest therein, either voluntarily, involuntarily or otherwise, or enter
into an agreement so to do, without the prior written consent of Beneficiary
being first had and obtained, then Beneficiary may, at its option, declare
all sums secured hereby immediately due and payable. Consent to one such
transaction shall not be deemed to be a waiver of the right to require such
consent to future or successive transactions."
Lender does not have to accept any prepayment of principal under this Note
except as described below. The undersigned may prepay principal of this Note
in increments of Five Hundred Dollars ($500) at any time as long as Lender is
provided written notice of the prepayment at least five (5) business days
prior to the date of prepayment. The notice of prepayment shall contain the
following information: (a) the date of prepayment (the "Prepayment Date") and
(b) the amount of principal to be prepaid. On the Prepayment Date, the
undersigned will pay to Lender,
2
in addition to the other amounts then due on this Note, the Prepayment Amount
described below. Lender, in its sole discretion, may accept any prepayment of
principal even if not required to do so under this Note and may deduct from
the amount to be applied against principal the other amounts required as part
of the Prepayment Amount.
The Prepaid Principal Amount (as defined below) will be applied to this Note
in the reverse order of which the principal payments would have been due
under this Note's principal amortization schedule. In other words, if this
Note requires multiple principal payments, then as opposed to prepaying the
next Principal Payment due, the Prepaid Principal Amount will be applied
beginning with the final principal payment due on this Note.
If Lender exercises its right to accelerate the payment of this Note prior to
the Maturity Date, the undersigned will pay to Lender, in addition to the
other amounts then due on this Note, on the date specified by Lender as the
Prepayment Date, the Prepayment Amount.
Lender's determination of the Prepayment Amount will be conclusive in the
absence of obvious error or fraud. If requested in writing by the
undersigned, Lender will provide the undersigned a written statement
specifying the Prepayment Amount.
The following (the "Prepayment Amount") shall be due and payable in full on
the Prepayment Date:
(a) If the face amount of this Note exceeds Seven Hundred Fifty
Thousand Dollars ($750,000) (regardless of what the outstanding
principal balance may be on the Prepayment Date), then the Prepayment
Amount is the sum of: (i) the amount of principal which the
undersigned has elected to prepay or the amount of principal which
Lender has required the undersigned to prepay because of
acceleration, as the case may be (the "Prepaid Principal Amount");
(ii) interest accruing on the Prepaid Principal Amount up to, but not
including, the Prepayment Date; (iii) Five Hundred Dollars ($500)
plus (iv) the present value, discounted at the Reinvestment Rates (as
defined below) of the positive amount by which (A) the interest
Lender would have earned had the Prepaid Principal Amount been paid
according to the Note's amortization schedule at the Note's interest
rate exceeds (B) the interest Lender would earn by reinvesting the
Prepaid Principal Amount at the Reinvestment Rates.
"Reinvestment Rates" mean the per annum rates of interest equal to one-half
percent (1/2%) above the rates of interest reasonably determined by Lender to
be in effect not more than seven days prior to the Prepayment Date in the
secondary market for United States Treasury Obligations in amount(s) and with
maturity(ies) which correspond (as closely as possible) to the principal
installment amount(s) and the payment date(s) against which the Prepaid
Principal Amount will be applied.
THE UNDERSIGNED ACKNOWLEDGE(S) AND AGREE(S) THAT: (A) THERE IS NO RIGHT TO
PREPAY THIS NOTE, IN WHOLE OR IN PART, WITHOUT PAYING THE PREPAYMENT AMOUNT;
(B) THE UNDERSIGNED SHALL BE LIABLE FOR PAYMENT OF THE PREPAYMENT AMOUNT IF
LENDER EXERCISES ITS RIGHT TO ACCELERATE PAYMENT OF THIS NOTE, INCLUDING
WITHOUT LIMIT ACCELERATION UNDER A DUE-ON-SALE PROVISION; (C) THE UNDERSIGNED
WAIVE(S) ANY RIGHTS UNDER SECTION 2954.10 OF THE CALIFORNIA CIVIL CODE, OR
ANY SUCCESSOR STATUTE; AND (D) LENDER HAS MADE THE LOAN EVIDENCED BY THIS
NOTE IN RELIANCE ON THESE AGREEMENTS.
INITIALS: __________ __________
3
No partial prepayment shall affect the obligation of Borrower to pay the next
and subsequent regular installments payable hereunder until the entire
balance of principal and interest shall have been paid in full.
BORROWER
AWG, LTD.
By: _______________________________
Xxxx X. Xxxxxxxxx, Secretary
Address:
c/o J.E.A. Enterprises, L.L.C.
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
4
REVOLVING NOTE
(SECURED BY DEED OF TRUST/FLOATING RATE NOTE)
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BORROWER'S NAME AND ADDRESS OFFICER MATURITY DATE
==============================================================================
AWG Ltd. Xxxx XxXxxxxxx, Vice December 9, 1999
c/o J.E.A. Enterprises, L.L.C. President
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
==============================================================================
$200,000 San Jose, California December 10, 1998
On December 9, 1999 (the "Maturity Date"), for value received, AWG, Ltd.
("Borrower"), jointly and severally, promise(s) to pay to the order of
COMERICA BANK, a Michigan Banking Corporation ("Lender"), at its office at
0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, XX 00000, or at such
other place as the holder of this Note may from time to time designate in
writing, the principal sum of Two Hundred Thousand Dollars ($200,000), or so
much thereof as may be advanced and re-advanced from time to time and not
repaid as provided below (but not to exceed a maximum principal amount at any
given time of Two Hundred Thousand Dollars ($200,000), together with interest
from the date hereof computed on the principal balances hereof outstanding,
adjusted daily to the rate equal to the Base Rate of interest (as herein
defined) being charged by Lender. For the purpose of this Note, the Base Rate
is that rate so announced by Lender as its "base rate" from time to time and
which serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto. The interest rate
payable hereunder shall fluctuate with any change in the Base Rate, and such
fluctuation in the interest rate shall be effective on the effective date of
each and every change in the Base Rate as, from time to time, announced by
Lender at its corporate headquarters in _____________________________________
_________________________ Detroit, Michigan.
Interest shall be payable on the first day of each calendar month following
the date hereof. Interest shall be computed daily based upon a three hundred
sixty (360) day year for the actual number of days elapsed. Should interest
not be paid when due, it shall become part of the principal and thereafter
bear interest as herein provided.
The principal amount payable under this Note shall be the sum of all advances
made by Lender to or at the request of Borrower, less principal payments
actually received in cash by Lender. The books and records of Lender shall be
the best evidence of the principal amount and the unpaid interest amount
owing at any time under this Note and shall be conclusive absent manifest
error. No interest shall accrue under this Note until the date of the first
advance made by Lender, thereafter interest on all advances shall accrue and
be computed on the principal balance outstanding from time to time under this
Note until the same is paid in full.
Should default be made in the payment of principal or interest when due or in
the performance or observance when due of any term, covenant or condition of
any deed of trust, security agreement or other agreement (including
amendments and extensions thereof) securing or pertaining to this Note, then,
at the option of the holder hereof and without notice or demand, the entire
balance of principal and accrued interest then remaining unpaid shall become
immediately due and payable and thereafter bear interest, until paid in full,
at the increased rate of five percent (5%) per annum over and above the
interest rate contracted for herein as it may vary from time to time.
Borrower acknowledges and agrees that during the time that any payment of
principal, interest or other amounts due under this Note is delinquent, the
holder will incur additional costs and expenses attributable to its loss of
use of the money due and to the adverse impact on the holder's ability to
avail itself of other opportunities. Borrower acknowledges and agrees that it
is extremely difficult and impractical to ascertain the extent of such costs
and expenses and that proof of actual damages would be costly or
inconvenient. Borrower therefore agrees that interest
1
at the increased rate of five percent (5%) per annum over and above the
interest rate contracted for in this Note represents a reasonable sum
considering all the circumstances existing on the date of this Note and
represents a fair and reasonable estimate of such costs and expenses. No
delay or omission on the part of the holder hereof in exercising any right
hereunder, or under any such deed of trust, security agreement or other
agreement shall operate as a waiver of such right or of any other right under
this Note or under any such deed of trust, security agreement or other
agreement.
If any payment of principal or interest under this Note shall not be made
within ten (10) calendar days of the date due, a late charge of five percent
(5%) of the overdue amount may be charged by the holder for the purpose of
defraying the expenses incident to handling such delinquent payments.
Borrower acknowledges and agrees that it is extremely difficult and
impractical to ascertain the extent of such expenses and that proof of actual
damages would be costly or inconvenient. Borrower therefore agrees that such
late charge represents a reasonable sum considering all of the circumstances
existing on the date of this Note and represents a fair and reasonable
estimate of the costs that will be sustained by the holder due to the failure
of Borrower to make timely payments. Such late charge shall be paid without
prejudice to the right of the holder to collect any other amounts provided to
be paid or to declare a default under this Note or under the Deed of Trust
referred to in this Note or from exercising any of the other rights and
remedies of the holder, including, without limitation, the right to declare
the entire balance of principal and accrued interest then remaining unpaid
immediately due and payable.
In no event shall interest accrue or be payable hereon or under any such deed
of trust, security agreement or other agreement in excess of the maximum
amount of interest permitted on the date hereof by the laws of the State of
California.
If this Note is not paid when due, whether at its specified or accelerated
maturity date, Borrower promises to pay all costs of collection and
enforcement of this Note, including, but not limited to, reasonable
attorneys' fees and costs, incurred by the holder hereof on account of such
collection or enforcement, whether or not suit is filed hereon.
Principal and interest shall be payable in lawful money of the United States
without setoff, demand or counterclaim. Borrower waives the defense of the
statute of limitations in any action on this Note. Presentment, notice of
dishonor, and protest are waived by all makers, sureties, guarantors and
endorsers of this Note. Such parties expressly consent to any extension of
the time of payment hereof or any installment hereof, to any renewal, and to
the release of any or all of the security given for the payment of this Note
or the release of any party liable for this obligation.
Borrower agrees that Lender may provide any financial or other information,
data or material in Lender's possession relating to Borrower, the Loan, this
Note, the property or the improvements, to Lender's parent, affiliate,
subsidiary, participants or service providers, without further notice to
Borrower.
This Note is secured by, among other things, a deed of trust ("Deed of
Trust") bearing even date herewith encumbering certain property located in
the County of Napa, State of California. This Note shall be governed and
construed in accordance with the laws of the State of California.
The Deed of Trust securing the obligation evidenced hereby contains the
following provision: "That should Trustor sell, convey, transfer, dispose of
or further encumber said property or any part thereof or any interest therein
or enter into a lease covering all or any portion thereof or an undivided
interest therein, either voluntarily, involuntarily or otherwise, or enter
into an agreement so to do, without the prior written consent of Beneficiary
being first had and obtained, then Beneficiary may, at its option, declare
all sums secured hereby immediately due and payable. Consent to one such
transaction shall not be deemed to be a waiver of the right to require such
consent to future or successive transactions."
2
Borrower may prepay this Note in whole or in part on any interest payment
date without penalty upon thirty (30) days prior written notice to holder. No
partial prepayment shall affect the obligation of Borrower to pay the next
and subsequent regular installments payable hereunder until the entire
balance of principal and interest shall have been paid in full.
BORROWER
AWG, LTD.
By: _____________________________________
Xxxx X. Xxxxxxxxx, Secretary
Address:
c/o J.E.A. Enterprises, L.L.C.
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
NOTICE: THIS NOTE CONTAINS PROVISIONS FOR A VARIABLE INTEREST RATE WHICH MAY
RESULT IN INCREASES IN THE INTEREST RATE AND IN MONTHLY INSTALLMENTS.
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
Name COMERICA BANK
Street 0000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxxxx Suite 255
City Xxxxxxxxxx Xxxxx, XX 00000
State Attn: Xxxx XxXxxxxxx
Zip
SPACE ABOVE THIS LINE FOR RECORDER'S USE
--------------------------------------------------------------
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS AND LEASES)
This Deed of Trust, Security Agreement and Fixture Filing (With Assignment of
Rents and Leases) is made as of this 10th day of December, 1998, by AWG, Ltd.
(hereinafter called "Trustor") whose address is c/o J.E.A. Enterprises,
L.L.C., 0000 Xxxx Xxxxx Xxxx, Xxxxx 000, Xxxx, Xxxxxxxx 00000, to Chicago
Title Company (hereinafter called "Trustee"), whose address is 0000 Xxxxxxxxx
Xxxxxx, Xxxx, Xxxxxxxxxx 00000, for the benefit of COMERICA BANK, a Michigan
Banking Corporation (hereinafter called "Beneficiary"), whose address is 0000
Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx Xxxxx, XX 00000.
Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to
Trustee, its successors and assigns, in Trust, with POWER OF SALE TOGETHER
WITH RIGHT OF ENTRY AND POSSESSION the following property (the "Trust
Estate"):
I. all that certain real property now or hereafter acquired, in
the County of Napa, State of California (the "Land"), more particularly
described as follows:
See attached Exhibit A.
II. all buildings, structures and other improvements now or in the
future located or to be constructed on the Land (the "Improvements");
III. all tenements, hereditaments, appurtenances, privileges,
franchises and other rights and interests now or in the future benefitting or
otherwise relating to the Land or the Improvements, including easements,
rights-of-way, development rights, mineral rights, water and water rights,
pumps and pumping plants and all shares of stock evidencing the same (the
"Appurtenances," and together with the Land and the Improvements, the "Real
Property");
IV. subject to the assignment to Beneficiary set forth in
Paragraph 11 below, all rents, issues, income, revenues, royalties and
profits now or in the future payable with respect to or otherwise derived
from the Trust Estate or the ownership, use, management, operation, leasing
or occupancy of the Trust Estate, including those past due and unpaid (the
"Rents");
V. all present and future right, title and interest of Trustor in
and to all inventory, equipment, fixtures and other goods (as those terms are
defined in Division 9 of the California Uniform Commercial Code (the "UCC"),
and whether existing now or in the future) now or in the future located at,
upon or about, or affixed or attached to or installed in, the Real Property,
or used or to be used in connection with or otherwise relating to the Real
Property or the ownership, use, development, construction, maintenance,
management, operation, marketing, leasing or occupancy of the Real Property,
including furniture, furnishings, machinery, appliances, building materials
and supplies, generators, boilers, furnaces, water tanks, heating,
ventilating and air conditioning equipment and all other
1
types of tangible personal property of any kind or nature, and all
accessories, additions, attachments, parts, proceeds, products, repairs,
replacements and substitutions of or to any of such property (the "Goods,"
and together with the Real Property, the "Property"); and
VI. all present and future right, title and interest of Trustor in
and to all accounts, general intangibles, chattel paper, deposit accounts,
money, instruments and documents (as those terms are defined in the UCC) and
all other agreements, obligations, rights and written materials (in each case
whether existing now or in the future) now or in the future relating to or
otherwise arising in connection with or derived from the Property or any
other part of the Trust Estate or the ownership, use, development,
construction, maintenance, management, operation, marketing, leasing,
occupancy, sale or financing of the Property or any other part of the Trust
Estate, including (to the extent applicable to the Property or any other
portion of the Trust Estate) (i) permits, approvals and other governmental
authorizations, (ii) improvement plans and specifications and architectural
drawings, (iii) agreements with contractors, subcontractors, suppliers,
project managers, supervisors, designers, architects, engineers, sales
agents, leasing agents, consultants and property managers, (iv) takeout,
refinancing and permanent loan commitments, (v) warranties, guaranties,
indemnities and insurance policies (whether or not required to be carried by
Trustor pursuant to the terms hereof), together with insurance payments and
unearned insurance premiums, (vi) claims, demands, awards, settlements and
other payments arising or resulting from or otherwise relating to any
insurance (whether or not Beneficiary is named as a loss payee of such
insurance) or any loss or destruction of, injury or damage to, trespass on or
taking, condemnation (or conveyance in lieu of condemnation) or public use of
any of the Property, (vii) license agreements, service and maintenance
agreements, purchase and sale agreements and purchase options, together with
advance payments, security deposits and other amounts paid to or deposited
with Trustor under any such agreements, (viii) reserves, deposits, bonds,
deferred payments, refunds, rebates, discounts, cost savings, escrow
proceeds, sale proceeds and other rights to the payment of money, trade
names, trademarks, goodwill and all other types of intangible personal
property of any kind or nature, and (ix) all supplements, modifications,
amendments, renewals, extensions, proceeds, replacements and substitutions of
or to any of such property (the "Intangibles").
Trustor further grants to Trustee and Beneficiary, pursuant to the
UCC, a security interest in all present and future right, title and interest
of Trustor in and to all Goods and Intangibles and all of the Trust Estates
described above in which a security interest may be created under the UCC
(collectively, the "Personal Property"). This Deed of Trust constitutes a
security agreement under the UCC, conveying a security interest in the
Personal Property to Trustee and Beneficiary. Trustee and Beneficiary shall
have, in addition to all rights and remedies provided herein, all the rights
and remedies of a "secured party" under the UCC and other applicable
California law. Trustor covenants and agrees that this Deed of Trust
constitutes a fixture filing under Section 9313 and 9402(6) of the UCC.
FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may
elect, (1) payment of an indebtedness in the sum of TWO MILLION SEVEN HUNDRED
THOUSAND DOLLARS ($2,700,000), evidenced by that certain First Non-Revolving
Note of even date herewith, in the original principal amount of ONE MILLION
SIX HUNDRED FIFTY THOUSAND DOLLARS ($1,650,000), that certain Second
Non-Revolving Note of even date herewith, in the original principal amount of
EIGHT HUNDRED FIFTY THOUSAND DOLLARS ($850,000) and that certain Revolving
Note of even date herewith, in the original principal amount of up to TWO
HUNDRED THOUSAND DOLLARS ($200,000), executed by Trustor to the order of
Beneficiary and any and all modifications, extensions or renewals thereof,
whether hereafter evidenced by said notes or otherwise; (2) payment of
interest on said indebtedness according to the terms of said promissory
notes; (3) payment of all other sums, with interest as herein provided,
becoming due or payable under the provisions hereof to Trustee or
Beneficiary; (4) due, prompt and complete observance, performance and
discharge of each and every condition, obligation, covenant and agreement
contained herein, or in said notes, or in any loan agreement relative to any
indebtedness evidenced by said notes or in any document or instrument
evidencing, securing or pertaining to the indebtedness evidenced by said
notes, excluding, however, any guaranty or unsecured environmental indemnity
("Loan Documents") and all modifications, renewals or extensions of any of
the foregoing; and (5) payment of such additional sums with interest thereon
as may be hereafter borrowed from Beneficiary, its successors or assigns by
Trustor or the then record owner or owners of the Trust Estate when evidenced
by another promissory note or notes, which are by the terms thereof secured
by this Deed of Trust.
2
TO PROTECT AND MAINTAIN THE SECURITY OF THIS DEED OF TRUST, TRUSTOR AGREES:
(1) To pay, perform, observe and discharge each and every
condition, obligation, covenant and agreement for which this Deed of Trust
has been given as security as provided above.
(2) To keep the Property in good condition and repair; not to
remove or demolish any improvement thereon; to complete or restore promptly
and in good and workmanlike manner any improvement which may be constructed,
damaged or destroyed thereon and to pay when due all claims for labor
performed and materials furnished therefor; to comply with all laws affecting
the Trust Estate or requiring any alterations or improvements to be made
thereon; not to commit or permit waste thereof; to perform, in the event all
or any portion of the Trust Estate constitutes a leasehold estate belonging
to Trustor, each and every obligation of Trustor under the terms of the lease
agreement relating to the demise of such property; not to commit, suffer or
permit any act upon the Trust Estate in violation of law; to do all acts
which from the character or use of the Property may be reasonably necessary,
the specific enumerations herein not excluding the general.
(3) To fully insure, or cause to be insured, the Property against
loss or damage by fire, earthquake, flood, and such other risks as
Beneficiary shall, from time to time, require. Trustor shall carry public
liability and other insurance as Beneficiary may require. Trustor shall
maintain all required insurance in companies, amounts, coverages,
deductibles, and forms satisfactory to the Beneficiary and at least equal to
that required on the date of this Deed of Trust. Such insurance shall be
carried in amounts not less than amounts determined by the insurance company
or Beneficiary to prevent the application of co-insurance or similar clauses,
or in such greater amounts as Beneficiary may require. Neither Beneficiary
nor Trustee, by reason of accepting, rejecting, approving or obtaining
insurance, shall incur any liability for (i) the existence, nonexistence,
form or legal sufficiency thereof, (ii) the solvency or insolvency of any
insurer, or (iii) the payment of losses. All property insurance policies
shall name Beneficiary as the primary loss payee, all liability insurance
policies shall name Beneficiary as an additional insured, and all policies
shall provide that they cannot be terminated as to Beneficiary except upon
thirty (30) days' prior written notice to Beneficiary. Trustor shall deliver
to Beneficiary the original of all such policies, or with Beneficiary's
consent certificates, together with receipts satisfactory to the Beneficiary,
evidencing payment of the premiums therefor. Should Trustor fail to insure or
fail to pay the premiums on any required insurance or fail to deliver the
policies or renewals of them as provided above, Beneficiary may (but is not
obligated to) have the insurance issued or renewed (and pay the premiums on
it for the account of Trustor) in amounts and with companies and at premiums
as Beneficiary deems appropriate. If Beneficiary elects to have insurance
issued or renewed to insure Beneficiary's interest, Beneficiary shall have no
obligation to also insure Trustor's interest or to notify Trustor of
Beneficiary's actions. All sums advanced by Beneficiary to pay premiums on
insurance policies which Trustor is required to maintain hereunder shall be
due and payable by Trustor to Beneficiary upon demand, and failing prompt
reimbursement, shall be added to the indebtedness secured by this Deed of
Trust and earn interest at the default rate set forth in the notes secured
hereby until paid in full.
As of the date this Deed of Trust is recorded and continuously
until this Deed of Trust is fully reconveyed, the insurance policies shall
conform to the following requirements:
(a) All insurance policies must be underwritten by insurers with a
Best's rating of B+, VI or better;
(b) In the event all or any portion of the Real Property secured
by this Deed of Trust constitutes rental or non-residential property, Trustor
shall maintain a Commercial General Liability insurance policy, including
broad form coverages or their equivalents, with One Million Dollars
($1,000,000) combined single limit coverage for bodily injury and property
damage; provided, however, if improvements similar to the Improvements
secured hereby are generally insured at higher limits of coverage, such
higher limits shall be obtained. In all other cases, Trustor shall maintain
such liability insurance coverages as Beneficiary may require from time to
time;
(c) Trustor shall provide, as required by Beneficiary, additional
property and rental income insurance coverages as follows:
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1. All risk coverage (including earthquake insurance) in the
amount of the full replacement cost of the Improvements;
2. A waiver of co-insurance endorsement or agreed value
endorsement (relative to casualty);
3. A replacement cost coverage endorsement (relative to
casualty);
4. A standard mortgage clause (438BFU or CP12-18) with
Beneficiary named as loss payee in the Declarations;
5. A waiver of subrogation clause;
6. To the extent that any portion of the Real Property
constitutes rental property, loss of rents coverage in an amount equal to at
least twelve (12) months of rentals from the Real Property secured hereby and
any expenses that are payable or reimbursable by tenants;
7. Flood insurance in an amount sufficient to provide full
replacement cost coverage of the Real Property in the event the Real Property
is located within any flood hazard area; and
8. Such other coverages as Beneficiary may request from time
to time.
The amount collected under any fire or other insurance policy maintained by
Trustor with respect to the Property (whether or not required hereunder and
whether or not Beneficiary is named as loss payee) may be applied by
Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary the entire amount so
collected or any part thereof may be released to Trustor. Such application or
release shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice.
(4) To appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary or Trustee;
and to pay all costs and expenses, including cost of evidence of title and
attorney's fees in a reasonable sum, in any such action or proceeding in
which Beneficiary or Trustee may appear, and in any suit brought by
Beneficiary to foreclose this Deed of Trust.
(5) To pay and discharge, at least ten days prior to delinquency,
all taxes of every kind and nature, including real and personal property
taxes and income, franchise, withholding, profits and gross receipts taxes,
all general and special assessments, including assessments on appurtenant
water stock, levies, permits, inspection and license fees, all water and
sewer rents and charges, and all other public charges whether of a like or
different nature, imposed upon or assessed against Trustor or the Trust
Estate or any part thereof or upon the revenues, rents, issues, income and
profits thereof or upon this Deed of Trust or the indebtedness now or
hereafter secured hereby; when due, all encumbrances, charges and liens, with
interest, on the Trust Estate or any part thereof, which appear to be prior
or superior hereto or subject or subordinate hereto; all costs, fees and
expenses of this Trust; or, if and as required by Beneficiary, to pay to
Beneficiary in equal installments on the day on which monthly payments of
principal and interest are due under said notes, sufficient funds (as
estimated by Beneficiary from time to time) to pay when due the next maturing
taxes, assessments and hazard insurance (including flood insurance, if
required) premiums. When so provided with sufficient funds, Beneficiary shall
pay such taxes, assessments and hazard insurance premiums before delinquency.
Any excess over the amount required for such purposes shall be held for
future use, applied to any indebtedness hereby secured or refunded to Trustor
at Beneficiary's option.
To promptly and completely observe, perform, and discharge each
and every condition, obligation, covenant and agreement affecting the Trust
Estate, whether the same is prior and superior or subject and subordinate
hereto including, if the security hereunder is or will be a condominium,
community apartment or part of a planned development, each and every
provision to be performed by Trustor under any Declaration of Covenants,
Conditions and Restrictions pertaining to the condominium, community
apartment or planned development project and, upon
4
written request of Beneficiary, to pay maintenance charges, if the same have
not been paid or legal steps have not been initiated to enforce such payment
within ninety (90) days after such written request is made.
Should Trustor fail to make any payment or to do any act as herein
provided, then Beneficiary or Trustee, but without obligation so to do and
without notice to or demand upon Trustor and without releasing Trustor from
any obligation hereof, may: make or do the same in such manner and to such
extent as either may deem necessary to protect the security hereof,
Beneficiary or Trustee being authorized to enter upon the Real Property for
such purposes; appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary or Trustee;
pay, purchase, contest or compromise any encumbrance, charge or lien which in
the judgment of either appears to be prior or superior hereto; and, in
exercising any such powers, pay necessary expenses, employ counsel and pay
reasonable attorneys' fees and costs in connection therewith.
(6) To pay immediately and without demand all sums so expended by
Beneficiary or Trustee, with interest from date of expenditure until paid in
full by Trustor at a rate equal to five percent (5%) per annum over and above
the rate set forth in the promissory notes secured hereby, which sums shall
be secured by this Deed of Trust to the same extent and with the same
priority as the principal and interest payable under the promissory notes
hereby secured, and such sums shall be deemed mandatory advances required for
the preservation and protection of the lien of this Deed of Trust and
Trustee's and Beneficiary's rights hereunder.
(7) That any award of damages in connection with any condemnation
for public use of or injury to the Property or any part thereof is hereby
assigned and shall be paid to Beneficiary who may apply or release such
moneys received by him in the same manner and with the same effect as above
provided for disposition of proceeds of fire or other insurance.
Notwithstanding the fact that the security given hereby may not be impaired
by a partial condemnation, Beneficiary, in its sole and absolute discretion,
shall have the right to apply all compensation, award or other payments or
relief therefor made on account thereof to either the payment of accrued but
unpaid interest and second to the prepayment of principal under said
promissory notes or reimbursement of Trustor for expenses incurred by it in
the restoration of the Property, and in respect thereto, Trustor hereby
waives the benefit of any statute or rule of law which may be contrary
thereto.
(8) That by accepting the payment, performance or observance of
any condition, obligation, covenant or agreement contained herein after the
date to be paid, performed or observed as provided hereunder, Beneficiary
does not waive its right either to require prompt payment, performance or
observance when due of all other conditions, obligations, covenants or
agreements contained herein or to declare a default for failure so to do.
(9) That at any time or from time to time, without liability
therefor and without notice, upon written request of Beneficiary and
presentation of this Deed of Trust and said notes for endorsement, and
without affecting the personal liability of any person for payment of the
indebtedness secured hereby, Trustee may: reconvey any part of the Trust
Estate; consent to the making of any map or plat thereof; join in granting
any easement thereon; join in the execution of or subordination of the lien
or charge hereof to any covenants, conditions or restrictions affecting said
property; or join in any extension agreement or any agreement subordinating
the lien or charge hereof.
(10) That upon written request of Beneficiary stating that all
sums secured hereby have been paid, and upon surrender of this Deed of Trust
and said notes to Trustee for cancellation and retention and upon payment by
Trustor of its fees, Trustee shall reconvey, without warranty, the Trust
Estate then held hereunder. The recitals in such reconveyance of any matters
or facts shall be conclusive proof of the truthfulness thereof. The grantee
in such reconveyance may be described as "the person or persons legally
entitled thereto."
(11) That Trustor absolutely and unconditionally hereby assigns,
transfers, conveys and sets over to Beneficiary all the Rents; provided,
however, prior to any default by Trustor in the payment, observance,
performance and discharge of any condition, obligation, covenant or agreement
of Trustor contained herein, Trustor shall have the right as the agent and
fiduciary representative of Beneficiary for collection and distribution
purposes only, to collect and receive the Rents as they become due and
payable to be applied by Trustor to the payment of the principal and interest
and all other sums due or payable on said promissory notes and to the payment
of all other sums payable under this Deed of Trust and, thereafter, so long
as no default as aforesaid has occurred, the balance
5
shall be distributed to the account of Trustor. Upon any such default,
Beneficiary may at any time without notice, either in person, by agent or by
a receiver to be appointed by a court, and without regard to the adequacy of
any security for the indebtedness hereby secured, enter upon and take
possession of the Property or any part thereof, in its own name or in the
name of Trustor, xxx for or otherwise collect the Rents, including those past
due and unpaid and apply the same, less costs and expenses of operation and
collection, including reasonable attorneys' fees and expenses, to the payment
of the principal and interest and all other sums due or payable on said
promissory notes and to the payment of all other sums payable under this Deed
of Trust and in such order as Beneficiary may determine. The entering upon
and taking possession of the Property, the collection of the Rents and the
application thereof as aforesaid, shall not cure or waive any default or
notice of default hereunder or invalidate any act done pursuant to such
notice.
All leases and rental agreements now or hereafter affecting the
Real Property, including all oil and gas leases and other subsurface leases
and the royalties derived therefrom, are hereby assigned and transferred to
Beneficiary by the Trustor, and Trustor hereby agrees and covenants that none
of said leases or rental agreements will be modified or terminated without
the consent in writing of Beneficiary. Trustor shall provide to Beneficiary a
non-disturbance and attornment agreement, in form acceptable to Beneficiary,
executed by each tenant under a lease or rental agreement for a portion of
said Real Property executed after the date hereof.
Trustor agrees that it will not (a) execute any further assignment
of any of its right, title and interest in the Rents without the prior
written consent of Beneficiary; (b) accept prepayments of any installments of
Rents to become due under any leases or rental agreements in excess of one
(1) month except prepayments in the nature of security which security will
not exceed an amount equal to one (1) month's rent under the lease or rental
agreement; (c) with respect to any lease or rental agreement having a term of
two (2) years or more, Trustor will not terminate, amend or modify any such
lease or rental agreement without the prior written consent of the
Beneficiary or (d) accept a surrender of any such lease or rental agreement.
(12) Trustor hereby represents, warrants and covenants that:
(a) Neither the Real Property which is the subject of this Deed of
Trust nor any other real property occupied and/or owned by Trustor has ever
been used by Trustor or any other previous owner and/or operator in
connection with the disposal of or to refine, generate, manufacture, produce,
store, handle, treat, transfer, release, process or transport flammable
explosives, radioactive materials, asbestos, PCB, hazardous wastes, toxic
substances or related materials, including, without limitation, any
substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," or "toxic substances"
under any Hazardous Materials Laws (defined below) (collectively, "Hazardous
Materials"), and Trustor will not at any time use the Real Property or such
other real property for the disposal, refining, generating, manufacturing,
producing, storing, handling, treating, transferring, releasing, processing
or transporting of any Hazardous Materials.
(b) After diligent investigation including, but not limited to,
engineering reports and an environmental assessment report provided to
Beneficiary, Trustor warrants and represents that the Real Property is free
of Hazardous Materials and contaminants which are or could be detrimental to
the Real Property, human health or the environment or in violation of any
governmental laws or regulations.
(c) Neither the Real Property or any other real property owned
and/or occupied by Trustor has been designated, listed or identified in any
manner by the United States Environmental Protection Agency ("EPA") or under
and pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, set forth at 42 U.S.C. 9601 et seq.
("CERCLA"), the Resource Conservation and Recovery Act of 1986, as amended,
set forth at 42 U.S.C. 6901 et seq. ("RCRA"), or any other environmental
protection statute as a hazardous waste or hazardous substance disposal or
removal site, superfund or cleanup site or candidate for removal of closure
pursuant to RCRA, CERCLA or any other environmental protection statute.
(d) Trustor has not received a notice, summons, citation,
directive, letter or other communication, written or oral (collectively,
"Notice") from the EPA or any other federal or state governmental agency or
instrumentality, authorized pursuant to an environmental protection statute,
concerning any intentional or
6
unintentional action or omission by Trustor resulting in the releasing,
spilling, leaking, pumping, pouring, emitting, emptying, dumping or otherwise
disposing of Hazardous Materials into the environment resulting in damage
thereto or to the fish, shellfish, wildlife, biota or other natural
resources.
Trustor shall, and shall cause all tenants, employees, agents,
contractors and subcontractors of Trustor and any other persons present on or
occupying the Real Property to, keep and maintain the Real Property,
including the soil and groundwater thereof, in compliance with, and not cause
or permit the Real Property, including the soil and groundwater thereof, to
be in violation of, any federal, state or local laws, ordinances or
regulations relating to industrial hygiene or to the environmental conditions
thereon, including but not limited to any Hazardous Materials Laws. Neither
Trustor nor tenants, employees, agents, contractors and subcontractors of
Trustor nor any other persons occupying or present on the Real Property shall
use, generate, manufacture, store or dispose of on, under or about the Real
Property or transport to or from the Real Property any Hazardous Materials.
The intended use of the Real Property is for raising vineyards and
producing wine purposes ("Permitted Use") and Trustor shall not change or
alter the Permitted Use unless Trustor shall have first notified Beneficiary
thereof in writing and Beneficiary shall have determined, in its sole and
absolute discretion, that such change or modification will not result in the
presence of Hazardous Materials on the Real Property in such a level that
would increase the potential liability for Hazardous Materials Claims.
Trustor shall immediately advise Beneficiary in writing of: (a)
any Notices (whether such Notices are received from the EPA, the Occupational
Safety and Health Agency, the Department of Health Services, the State Water
Quality Control Board, the Department of Sanitation, the Department of Public
Works or any other federal, state or local governmental agency or regional
office thereof) of violation or potential violation which are received by
Trustor of any applicable federal, state or local laws, ordinances or
regulations relating to any Hazardous Materials, including but not limited to
CERCLA, RCRA, the Hazardous Materials Transportation Act, the Hazardous
Substances Account Act, the Hazardous Substances Act, the Occupational Health
and Safety Act, the Xxxxxx-Cologne Water Quality Control Act, the Solid Waste
Management Act of 1980, the Toxic Pit Cleanup Act, the Underground Tank Act
of 1984, and the California Water Quality Improvement Act (collectively,
"Hazardous Materials Laws"); (b) any and all enforcement, cleanup, removal or
other governmental or regulatory actions instituted, completed or threatened
pursuant to any Hazardous Materials Laws; (c) all claims made or threatened
by any third party against Trustor or the Trust Estate relating to damage,
contribution, cost recovery compensation, loss or injury resulting from any
Hazardous Materials (the matters set forth in clauses (a), (b) and (c) above
are collectively referred to herein as "Hazardous Materials Claims"); and (d)
Trustor's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of the Real Property that could cause the Real
Property or any part thereof to be classified as "border-zone property" under
the provisions of California Health and Safety Code, Sections 25220 et seq.,
or any regulation adopted in accordance therewith, or to be otherwise subject
to any restrictions on the ownership, occupancy, transferability or use of
the Real Property under any Hazardous Materials Laws.
To the extent Beneficiary has a reasonable basis to believe its
security for the Loan is or might be impaired by any Hazardous Materials
Claims or in the event of any default hereunder or under any other Loan
Document, Beneficiary shall have the right but not the obligation to join and
participate in, as a party if it so elects, any legal proceedings or actions
initiated in connection with any Hazardous Materials Claims and to have its
reasonable attorneys' and consultants' fees in connection therewith paid by
Trustor upon demand.
Trustor shall be solely responsible for, and shall indemnify and
hold harmless Beneficiary, its directors, officers, employees, agents,
successors and assigns, from and against any loss, damage, cost, expense or
liability directly or indirectly arising out of or attributable to the use,
generation, storage, release, threatened release, discharge, disposal or
presence (whether prior to or during the term of the Loan) of Hazardous
Materials on, under or about the Real Property (whether by Trustor or a
predecessor in title or any employees, agents, contractor or subcontractors
of Trustor, or any predecessor in title, any third persons at any time
occupying or present on the Real Property, or from any other cause
whatsoever), including, without limitation: (a) all foreseeable and
unforeseeable consequential damages including third party claims; (b) the
costs of any required or necessary repair, cleanup or detoxification of the
Real Property, including the soil and groundwater thereof, and the
preparation and
7
implementation of any closure, remedial or other required plans; (c) damage
to any natural resources; and (d) all reasonable costs and expenses incurred
by Beneficiary in connection with clauses (a), (b) and (c), including but not
limited to reasonable attorneys' and consultants' fees.
Any costs or expenses incurred by Beneficiary for which Trustor is
responsible or for which Trustor has indemnified Beneficiary shall be paid to
Beneficiary on demand, and failing prompt reimbursement, shall be added to
the indebtedness secured by this Deed of Trust and earn interest at the
default rate set forth in the notes secured hereby until paid in full.
Trustor shall not undertake any cleanup, containment, restoration,
removal or other remedial work (collectively, "Remedial Work") in response to
the presence of any Hazardous Materials on, under or about the Real Property
without prior written notice to Beneficiary of the scope and nature of such
Remedial Work; provided, however, that prior written notice shall not be
necessary in the event that the presence of Hazardous Materials on, under or
about the Real Property either poses an immediate threat to the health,
safety or welfare of any individual or is of such a nature that an immediate
remedial response is necessary and it is not possible to notify Beneficiary
before taking such action. In such event, Trustor shall notify Beneficiary as
soon as practicable of any action so taken. Trustor shall not, without
Beneficiary's prior written consent, which shall not be unreasonably
withheld, enter into any settlement agreement, consent decree or other
compromise in respect to any Hazardous Material Claims, which remedial
action, settlement, consent or compromise might, in Beneficiary's reasonable
judgment, impair the value of Beneficiary's security hereunder.
In the event any investigation or monitoring of conditions on the
Real Property or any Remedial Work is required under any applicable Hazardous
Materials Laws, by any judicial order, by any governmental entity, or in
order to comply with any agreements affecting the Real Property because of or
in connection with any Hazardous Material Claims, Trustor shall perform or
cause to be performed the Remedial Work in compliance with such Hazardous
Material Laws or agreement. All Remedial Work shall be performed by one or
more contractors, selected by Trustor and approved in advance in writing by
Beneficiary, and under the supervision of a consulting engineer, selected by
Trustor and approved in writing by Beneficiary. All costs and expenses of
such Remedial Work shall be paid by Trustor, including, without limitation,
the charges of such contractors and/or the consulting engineer, and
Beneficiary's reasonable attorneys' fees and costs incurred in connection
with monitoring or reviewing such Remedial Work. In the event Trustor shall
fail to timely commence or cause to be commenced, or fail to diligently
prosecute to completion, such Remedial Work, Beneficiary may, but shall not
be required to, cause such Remedial Work to be performed, and all costs and
expenses thereof shall be due and payable upon demand therefor by Trustor.
If during the term of the loan secured by this Deed of Trust
Beneficiary has reasonable cause to believe that Hazardous Materials have
migrated onto the Real Property or have otherwise come onto the Real Property
in violation of the terms of this Deed of Trust or there has been a default
by Trustor hereunder with respect to Hazardous Materials, at Beneficiary's
request, Trustor shall retain, at Trustor's sole cost and expense, a licensed
geologist, industrial hygienist or an environmental consultant (a
"Consultant") acceptable to Beneficiary to conduct an environmental site
assessment of the Real Property for the presence of Hazardous Materials
("Environmental Audit"). The Environmental Audit shall be performed in a
manner reasonably calculated to discover the presence of Hazardous Materials
contamination. The Consultant shall concurrently deliver the results of its
investigation in writing directly to Trustor and Beneficiary without prior
consultation with either party unless conducted in the presence of the other
party.
If Trustor fails to pay for or obtain an Environmental Audit as
provided for herein, Beneficiary may, but shall not be obligated to, obtain
the Environmental Audit, and either demand reimbursement from Trustor or add
the cost thereof to the indebtedness secured by this Deed of Trust, in which
case interest shall accrue on such sum at the default rate set forth in the
notes secured hereby. Furthermore, Trustor hereby grants Beneficiary, its
employees and agents the right, exercisable at any time and at Beneficiary's
sole cost and expense, to enter upon the Real Property for the purpose of
conducting an inspection, sampling and testing to determine whether there
have been any violations of the covenants contained in this Paragraph 12.
8
Trustor's liability under this Paragraph 12 shall not terminate
until the earlier of (i) the sale of the Real Property pursuant to the
enforcement of the lien of this Deed of Trust, the proceeds of which are
applied to the indebtedness secured hereby, or (ii) the payment in full of
the indebtedness.
(13) Trustor agrees to indemnify, defend and hold harmless Trustee
and Beneficiary from and against any and all losses, liabilities, suits,
obligations, fines, damages, judgments, penalties, claims, charges, costs and
expenses (including attorneys' fees and disbursements) which may be imposed
on, incurred or paid by or asserted against Trustee and/or Beneficiary by
reason or on account of, or in connection with (a) any willful misconduct of
Trustor or any default or event of default by Trustor hereunder or under any
other Loan Document; (b) Trustee's and/or Beneficiary's good faith and
commercially reasonable exercise of any of their rights and remedies, or the
performance of any of their duties hereunder or under the other Loan
Documents to which Trustor is a party; (c) Trustor's failure to perform or
comply with any of the covenants set forth in Paragraph 12 above; (d) the
construction, reconstruction or alteration of the Real Property; (e) any
negligence of Trustor, or any negligence or willful misconduct of any lessee
of the Real Property or any portion thereof, or any of their respective
agents, contractors, employees, licensees or invitees; or (f) any accidents,
injury, death or damage to any person or property occurring in, on or about
the Real Property or any street, drive, sidewalk, curb or passageway adjacent
thereto, except for the willful misconduct or gross negligence of Beneficiary
or Trustee. Upon demand by Trustee and/or Beneficiary, Trustor shall defend
any action or proceeding brought against Trustee and/or Beneficiary arising
out of or alleging any claim or cause of action covered by this indemnity,
all at Trustor's own cost and by counsel to be approved by Beneficiary in the
exercise of its reasonable judgment. In the alternative, Trustee and/or
Beneficiary may elect to conduct its own defense at the expense of Trustor.
The provisions of this Paragraph 13 shall survive the foreclosure or the
delivery of a deed in lieu of foreclosure of this Deed of Trust or the
payment in full of the indebtedness secured hereby and the termination and
reconveyance of this Deed of Trust, as the case may be.
Any amount payable to Trustee or Beneficiary under Paragraph 12 or
this Paragraph 13 shall be due and payable immediately after demand therefor
and receipt by Trustor of a statement setting forth in reasonable detail the
amount claimed and the basis therefor, and such amounts shall bear interest
at the rate specified in Paragraph 6 hereof from and after the date such
amounts are paid by Beneficiary or Trustee, as the case may be, until paid in
full by Trustor.
(14) That upon default by Trustor in payment of any indebtedness
secured hereby or in performance of any agreement hereunder, Beneficiary may
take any action or pursue any right or remedy permitted under applicable law
specifically including, without limiting, impairing or otherwise affecting
its other rights and remedies declare all sums secured hereby immediately due
and payable by delivery to Trustee written declaration of default and demand
for sale and of written notice of default and of election to cause to be sold
the Real Property, which notice Trustee shall cause to be filed for record.
Beneficiary also shall deposit with Trustee this Deed of Trust, said notes
and all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law
following the recordation of said notice of default, and notice of the sale
having been given as then required by law, Trustee, without demand on
Trustor, shall sell the Real Property at the time and place fixed by it in
said notice of sale, either as a whole or in separate parcels, 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 time of sale. Trustee may
postpone sale of all or any portion of said Real 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. Trustee shall deliver to such purchaser its deed
conveying the Real 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 as herein defined, may purchase at such
sale.
After deducting all costs, fees and expenses of Trustee and of
this Trust, including cost of evidence of title in connection with sale,
Trustee shall apply the proceeds of sale to payment of: all sums expended
under the terms hereof, not then repaid, with accrued interest at the rate
specified in Paragraph 6 hereof; all other sums then secured hereby; and the
remainder, if any, to the person or persons legally entitled thereto.
10
If this Deed of Trust or any notes secured hereby provides for any
charge for prepayment of any indebtedness secured hereby, Trustor agrees to
pay said charge if any of said indebtedness shall be paid prior to the date
thereof stated in said notes or this Deed of Trust, even if and
notwithstanding Trustor shall have defaulted in payment thereof, or in
performance of any agreement hereunder, and Beneficiary, by reason thereof,
shall have declared all sums secured hereby immediately due and payable.
(15) Following recordation of a notice of default, Beneficiary and
prospective bidders at any foreclosure sale shall have the right to enter and
inspect said Real Property at reasonable times and upon reasonable notice to
Trustor. Trustor shall, promptly following the recordation of a notice of
default, but in any event prior to the date of sale set in the notice of
sale, disclose to Beneficiary in writing all material facts regarding said
Real Property.
Trustor hereby waives any claims against Beneficiary or Trustee
arising out of or in connection with any disclosures regarding said Real
Property which may be made by Beneficiary or Trustee to prospective bidders
at or prior to the foreclosure sale. In addition, Trustor shall indemnify,
defend and hold harmless Trustee and Beneficiary from and against all losses,
liabilities, suits, damages claims or judgments which may arise out of or in
connection with any disclosures regarding said Real Property which may be
made by Beneficiary or Trustee to prospective bidders at or prior to the
foreclosure sale. All costs, fees and expenses incurred by Beneficiary or
Trustee in connection with such inspections and disclosures shall be payable
by Trustor upon demand therefor, and such amounts shall bear interest at the
rate specified in Paragraph 6 hereof from the date paid by Beneficiary until
paid in full by Trustor, and if not so paid shall be added to the amount
secured hereby.
(16) That if the Trustor, or any subsequent owner of the Real
Property covered hereby, shall occupy said property, or any part thereof,
after any default in payment of any amount secured by this Deed of Trust, the
Trustor, or such owner, shall pay to the Beneficiary in advance on the first
day of each month a reasonable rental for the premises so occupied, and upon
failure to pay such reasonable rental, the Trustor, or such owner, may be
removed from said premises by summary dispossess proceedings or by any other
appropriate action or proceeding.
(17) Trustor hereby represents and warrants: (a) that it is or
will be the lawful owner of all of the Trust Estate free of all claims, liens
or encumbrances whatsoever, other than the security interests granted
pursuant hereto and such other matters as may be approved in writing by
Beneficiary in Beneficiary's sole and absolute discretion; (b) all
information, including but not limited to financial statements furnished by
Trustor to Beneficiary heretofore or hereafter, whether oral or written, is
and will be correct and true as of the date given; and (c) if Trustor is a
business entity, the execution, delivery and performance hereof are within
its powers and have been duly authorized.
(18) With respect to the Personal Property and the security interest granted
to Beneficiary under the Deed of Trust, the following shall apply:
(a) Trustor shall: (i) execute such financing statements and other
documents and do such other acts and things, all as Beneficiary may from time
to time require, to establish and maintain a valid security interest in the
Personal Property, including payment of all costs and fees in connection with
any of the foregoing when deemed necessary by Beneficiary; (ii) keep the
Personal Property separate and identifiable and at the location described
herein and permit Beneficiary and its representatives to inspect the Personal
Property and/or records pertaining thereto from time to time during normal
business hours; (iii) at Trustor's expense upon Beneficiary's request remove
any unauthorized lien or security interest and defend any claim affecting the
Personal Property; (iv) reimburse Beneficiary for any expenses including but
not limited to reasonable attorneys' fees and legal expenses, incurred by
Beneficiary in seeking to protect, collect or enforce any rights in the
Personal Property; (v) maintain the Personal Property in good condition and
not use the Personal Property for any unlawful purpose; and (vi) at its own
expense, upon request of Beneficiary, notify any parties obligated to Trustor
on any of the Personal Property to make payment to Beneficiary, and Trustor
hereby irrevocably grants Beneficiary power of attorney to make said
notifications and collections. Trustor does hereby authorize Beneficiary to
perform any and all acts which Beneficiary in good xxxxx xxxxx necessary for
the protection and preservation of the Personal
10
Property or its value or Beneficiary's security interest therein, including
transferring any of the Personal Property into its own name and receiving the
income thereon as additional security hereunder.
(b) Whenever a default exists under this Deed of Trust,
Beneficiary, at its option may: (i) transfer any of the Personal Property
into its own name or that of its nominee; (ii) notify any parties obligated
on any of the Personal Property consisting of accounts, instruments, chattel
paper, choses in action or the like to make payment to Beneficiary and
enforce collection of any of the Personal Property herein; (iii) require
Trustor to assemble and deliver any of the Personal Property to Beneficiary
at a reasonable convenient place designated by Beneficiary. No delay on the
part of Beneficiary in the exercise of any right or remedy shall constitute a
waiver thereof and any exercise, or partial exercise, by Beneficiary of any
right or remedy under this Paragraph 18 shall not preclude the exercise of
any other right or remedy of Beneficiary under this Paragraph 18, this Deed
of Trust or at law or in equity or the further exercise of the same remedy.
This Paragraph 18 shall not be construed to derogate or impair the lien or
provisions of any other provision of the Deed of Trust with respect to any
property described in the Deed of Trust that is real property or which the
parties have agreed to treat as real property. Beneficiary's rights, power
and remedies as to the Personal Property shall be exercisable as to any part
or all of the Personal Property as Beneficiary may elect.
(c) Trustor hereby assumes, and releases Beneficiary from, all
risk of loss, destruction or damage to all or any part of the Personal
Property by reason of any casualty or cause whatsoever except as caused by
the intentional misconduct of Beneficiary, and Trustor shall indemnify and
hold Beneficiary harmless from and against all liabilities, obligations,
claims, damages, penalties, causes of action, costs and expenses (including,
reasonable attorneys' fees and costs) imposed upon or incurred by or asserted
against Beneficiary by reason of (i) any failure by Trustor to perform or
comply with the terms of this Deed of Trust or (ii) the exercise by
Beneficiary of any rights or remedies provided hereunder or at law or in
equity, except as caused by Beneficiary's intentional misconduct.
(d) Upon transfer by Beneficiary of any part of the obligations
secured hereby, Beneficiary shall be fully discharged from all liability with
respect to the Personal Property transferred therewith.
(e) The grant of a security interest in proceeds, replacements,
substitutions or the like does not imply any right of Trustor to sell or
dispose of any Personal Property described herein without the express written
consent by Beneficiary.
(19) Beneficiary, acting alone, may from time to time, by
instrument in writing, substitute a successor or successors to any Trustee
named herein or acting hereunder, which instrument, executed and acknowledged
by each and recorded in the office of the recorder of the county or counties
where said property is situated, shall be conclusive proof of proper
substitution of such successor Trustee or Trustees, who shall, without
conveying from the Trustee predecessor, succeed to all its title, estate,
rights, powers and duties. Said instrument must contain the name of the
original Trustor, Trustee and Beneficiary hereunder, the book and page or
document number where this Deed of Trust is recorded, and the name and
address of the new Trustee. If notice of default shall have been recorded,
this power of substitution cannot be exercised until after the costs, fees
and expenses of the then acting Trustee shall have been paid to such Trustee,
who shall endorse receipt thereof upon such instrument of substitution.
(20) That any Trustor who is a married person hereby expressly
agrees that recourse may be had against his or her separate property, but
without hereby creating any lien or charge thereon, for any deficiency after
sale of the property hereunder.
(21) If requested, that Trustor shall furnish at least annually,
within ninety (90) days after the end of its fiscal year, or more frequently
if requested by Beneficiary, a full and complete financial statement
concerning income, expenses, assets and liabilities of Trustor, and/or
applicable or attributable to the Trust Estate encumbered hereby and the
operations thereof, and such other information as Beneficiary may request.
Such statement shall be prepared in accordance with generally accepted
accounting principles and shall be certified as true, complete and correct by
Trustor. Trustor shall keep true and correct records upon which annual
statements are based for not less than three (3) years after delivery of the
required annual statement. Beneficiary shall have the right, at its cost and
at any time and from time to time after giving prior written notice to
Trustor, to do or cause to be done any of the
11
following: to audit the records; to cause an audit of the records to be made;
to make abstracts from the records; to make copies of any or all of the
records; to examine any or all leases and rental agreements (if such leases
and rental agreements exist); and to make copies of any or all leases and
rental agreements (to the extent such leases and rental agreements exist).
Trustor shall make all records specified in the notice available at the time
specified in the notice and at the place where the records are customarily
kept, or at Beneficiary's option at Beneficiary's office. Upon any default
under the notes described above, this Deed of Trust or other Loan Documents,
Beneficiary may perform any of the acts authorized by this paragraph at the
sole cost of Trustor. Trustor shall promptly reimburse Beneficiary for its
costs and such costs shall be secured by this Deed of Trust.
(22) That the pleading of any statute of limitations as a defense
to any and all obligations secured by this Deed of Trust is hereby waived to
the full extent permissible by law.
(23) That this Deed of Trust applies to, inures to the benefit of,
and binds all parties hereto, their heirs, legatees, devisees,
administrators, executors, successors and assigns. The term Beneficiary shall
mean the owner and holder, including pledgees, of the notes secured hereby,
whether or not named as Beneficiary herein. In this Deed of Trust, whenever
the context so requires, the masculine gender includes the feminine and
neuter, and the singular number includes the plural. If more than one (1)
person executes this Deed of Trust as Trustor, the obligations of such
persons are joint and several.
(24) Trustor agrees that Lender may provide any financial or other
information, data or material in Beneficiary's possession relating to
Trustor, the Loan, this Deed of Trust, the Property or the Improvements, to
Beneficiary's parent, affiliate, subsidiary, participants or service
providers, without further notice to Trustor.
(25) That Trustee accepts this Trust when this Deed of Trust, duly
executed and acknowledged, is made a public record as provided by law.
Trustee is not obligated to notify any party hereto of pending sale under any
other deed of trust or of any action or proceeding in which Trustor,
Beneficiary or Trustee shall be a party unless brought by Trustee.
(26) To pay Beneficiary for each and every beneficiary statement
furnished at Trustor's request the maximum fee allowed by law and if there be
no maximum, then in accordance with Beneficiary's schedule therefor. Such fee
shall be computed as of the time said statement is furnished.
(27) That should Trustor sell, convey, transfer, dispose of or
further encumber the Trust Estate or any part thereof or any interest therein
or enter into a lease covering all or any portion thereof or an undivided
interest therein, either voluntarily, involuntarily or otherwise, or enter
into an agreement so to do, without the prior written consent of Beneficiary
being first had and obtained, then Beneficiary may, at its option, declare
all sums secured hereby immediately due and payable. Consent to one such
transaction shall not be deemed to be a waiver of the right to require such
consent to future or successive transactions.
(28) Should any of the following occur, then Beneficiary may, at
its option, declare all sums secured hereby immediately due and payable
unless Beneficiary shall have given its prior written consent thereto:
(a) If Trustor is a corporation, and should there occur a sale,
conveyance, transfer, disposition or encumbrance, either voluntary or
involuntary, or should an agreement be entered into to accomplish any
thereof, with respect to more than ten percent (10.0%) of the issued and
outstanding capital stock of Trustor; or
(b) If Trustor is a trust, and should there occur a sale,
conveyance, transfer, disposition or encumbrance, either voluntary or
involuntary, or should an agreement be entered into to accomplish any
thereof, with respect to the beneficial interest of Trustor; or
(c) If Trustor is a limited partnership, a general partnership or
a joint venture, and should there occur a sale, conveyance, transfer,
disposition or encumbrance, either voluntary or involuntary, or should an
agreement be entered into to accomplish any thereof, with respect to a change
in any general partner of Trustor; or
12
(d) If Trustor is a limited liability company, and should there
occur a sale, conveyance, transfer, disposition or encumbrance, either
voluntary or involuntary, or should an agreement be entered into to
accomplish any thereof, with respect to a change in any membership interest.
Consent to one such transaction shall not be deemed to be a waiver of
Beneficiary's right to require such consent to future or successive
transactions.
(29) That in the event of the passage after the date hereof of any
law deducting from the value of real property, for taxation purposes, any
lien thereon or changing in any way the laws now in force for the taxation of
deeds of trust or debts whether or not secured thereby for federal, state or
local purposes or the manner of the collection of any such taxes so as to
affect this Deed of Trust or the obligations hereby secured, Trustor agrees
to pay any thereof and if Trustor fails to so do or if it would be illegal
for Trustor so to do then, the whole of the principal sum secured by this
Deed of Trust, together with accrued interest thereon shall, at the option of
Beneficiary, without demand or notice, immediately become due and payable.
(30) To the fullest extent permitted by law, Trustor hereby waives
the provisions of Section 431.70 of the California Code of Civil Procedure
and all amendments thereto.
(31) That no remedy herein conferred upon, reserved to Trustee or
Beneficiary is intended to be exclusive of any other remedy herein or by law
provided, 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. No delay or omission of Trustee or Beneficiary in the
exercising of any right or power accruing upon any event of default hereunder
shall impair such right or power or any other right or power nor shall the
same be construed to be a waiver of any default or any acquiescence therein;
and every power and remedy given by this Deed of Trust to Trustee or
Beneficiary may be exercised from time to time as often as may be deemed
expedient by Trustee or Beneficiary. If there exists additional security for
the obligations secured hereby, Beneficiary, at its sole option, and without
limiting or affecting any of the rights or remedies hereunder, may exercise
any of the rights or remedies to which it may be entitled hereunder either
concurrently with whatever rights it may have in connection with such other
security or in such order and in such manner as Beneficiary may deem fit
without waiving any rights with respect to any other security. The granting
of consent by Beneficiary to any transaction as required by the terms
hereunder shall not be deemed a waiver of the right to secure the consent of
Beneficiary to future or successive transactions.
(32) That in the event any one or more of the provisions contained
in this Deed of Trust or in the promissory notes hereby secured shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provision of this Deed of Trust or said promissory notes, but this Deed of
Trust and said promissory notes shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein or
therein.
(33) TRUSTOR ACKNOWLEDGE(S) AND AGREE(S) THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT OR THE LENDING RELATIONSHIP ESTABLISHED
HEREBY WOULD BE BASED UPON DIFFICULT AND COMPLEX ISSUES, AND THEREFORE,
TRUSTOR HEREBY WAIVE(S) ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING (INCLUDING ACTIONS SOUNDING IN TORT) TO ENFORCE OR DEFEND ANY
RIGHTS UNDER THIS DEED OF TRUST OR ANY OTHER LOAN DOCUMENT OR ARISING FROM
THE TRANSACTION CONTEMPLATED HEREUNDER OR THE LENDING RELATIONSHIP
ESTABLISHED HEREBY AND AGREE(S) THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE AND NOT BY A JURY.
(34) This Deed of Trust has been executed and delivered in the
State of California and is to be construed and enforced according to and
governed by the laws thereof except that with respect to any portion of the
Trust Estate covered hereby located outside of the State of California, only
to the extent required for Trustee or Beneficiary to enforce or realize upon
the rights and remedies hereunder with respect thereto, the laws of the state
in which such property is located shall be applicable hereto.
13
The undersigned Trustor requests that a copy of any notice of
default and of any notice of sale hereunder be mailed to him at his address
hereinbefore set forth.
TRUSTOR:
AWG, LTD.
By: _______________________________
Xxxx X. Xxxxxxxxx, Secretary
Address:
c/o J.E.A. Enterprises, L.L.C.
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
14
STATE OF CALIFORNIA )
) ss.
COUNTY OF _________________________ )
On ___________________, 19__, before me, the undersigned, a 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.
___________________________
NOTARY PUBLIC
15
EXHIBIT "A"
LEGAL DESCRIPTION
COMMENCING AT A POINT ON THE NORTHEASTERN LINE OF THE COUNTY ROAD
COMMONLY KNOWN AS THE "BIG RANCH ROAD", WHERE THE SAME IS INTERSECTED BY THE
CENTER LINE OF A CERTAIN STONE DITCH RUNNING THROUGH LOT 12 AS SAID LOT IS
SHOWN UPON THE MAP HEREINAFTER REFERRED TO, SAID POINT OF COMMENCEMENT BEING
FURTHER DESCRIBED AS BEING THE POINT OF INTERSECTION OF SAID NORTHEASTERN
LINE OF THE "BIG RANCH ROAD" WITH THE SOUTHEASTERN LINE OF THE 39.25 ACRE
TRACT HERETOFORE CONVEYED TO L. L. JORDAN BY DEED OF RECORD IN BOOK 112 OF
DEEDS, AT PAGE 18, RECORDS OF SAID NAPA COUNTY AND RUNNING THENCE FROM SAID
POINT OF COMMENCEMENT, AND ALONG THE NORTHEASTERN LINE OF SAID COUNTY ROAD
SOUTH 30(degree) 30' EAST 849.5 FEET TO THE SOUTHEASTERN LINE OF SAID XXX 00,
XXXXXX XXXXX 00(xxxxxx) XXXX XXX XXXXX THE SOUTHEASTERN LINE OF SAID LOT 12,
A DISTANCE OF 46.90 CHAINS, MORE OR LESS, TO THE CENTER OF NAPA RIVER; THENCE
UP SAID RIVER AND FOLLOWING MEANDERINGS OF THE CENTER LINE THEREOF TO THE
SOUTHEASTERN LINE OF THE 33 ACRE TRACT CONVEYED TO X.X. XXXXXXX BY DEED OF
RECORD IN BOOK 110 OF DEEDS, AT PAGE 362, SAID NAPA COUNTY RECORDS, THENCE
WESTERLY ALONG THE SOUTHEASTERN LINE OF SAID 33 ACRE TRACT TO A LARGE OAK
TREE AND THENCE SOUTH 55 3/4(degree) WEST AND ALONG THE SOUTHEASTERN LINE OF
SAID XXXXXXX AND THE SOUTHEASTERN LINE OF PREMISES CONVEYED TO JORDAN
HEREINABOVE REFERRED TO, 1697 FEET TO THE POINT OF COMMENCEMENT. BEING A
PORTION OF LOT 12, AS SHOWN ON THAT CERTAIN MAP, DUPLICATE PLAT OF THE SAUSAL
RANCHO, RECORDED NOVEMBER 21, 1864 IN BOOK 1 OF DEEDS AT PAGE 99, NAPA COUNTY
RECORDS, AND BEING THE SAME AS SET FORTH ON RECORD OF SURVEY MAP NO. 3998,
FILED FEBRUARY 2, 1987 IN BOOK 25 OF SURVEYS, PAGE 62, NAPA COUNTY RECORDS.
APN 000-000-000
16
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO
Name COMERICA BANK
Street 0000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx/Xx/Xxx Xxxxxxxxxx Xxxxx, XX 00000 SPACE ABOVE THIS LINE
Attn: Xxxx XxXxxxxxx FOR RECORDER'S USE
ASSIGNMENT OF
REAL PROPERTY LEASES AND RENTS
For value received, AWG, Ltd. ("Assignor") does hereby sell,
assign, transfer and set over to COMERICA BANK, a Michigan Banking
Corporation (hereinafter referred to as "Lender"), (1) those certain lease
agreements for the lease of real property commonly known as 0000 Xxx Xxxxx
Xxxx, Xxxx xx Xxxx, Xxxxx of California, more particularly described on
Exhibit A attached hereto and incorporated herein by this reference (the
"Property"), such lease agreements being set forth in Exhibit B attached
hereto and incorporated herein by this reference, entered into by and between
Assignor (or any predecessor in interest of Assignor), and the lessees
identified therein; (2) any other leases, rental agreements or use agreements
of all or any portion of the Property, whether now existing or hereafter
entered into; (3) any and all extensions renewals, modifications, supplements
and amendments thereof or thereto; (4) any and all guaranties of any of the
lessees' obligations under the terms and conditions of said leases and under
any extensions, renewals, modifications and amendments thereof or thereto
((1) through (4) are hereinafter collectively referred to as the "Leases" and
singularly referred to as a "Lease"); (5) any cash or securities deposited
with the lessor under any Lease to secure performance of the lessees'
obligations thereunder; and (6) all rentals and sums due and to become due
under the Leases ("Rents").
Assignor does hereby consent that, without further notice and
without releasing the liability of Assignor, Lender may, at its discretion,
give grace or indulgence in the collection of all Rents due or to become due
on or under the Leases and grant extensions of time for the payment of the
same before, at or after maturity. Assignor warrants that all rental payments
and other sums due under the Leases as well as the right to collect same are
hereby vested in Lender; that the Leases are genuine; that the lessees
thereunder have capacity to contract; that Assignor has the right to make
this assignment and that rental payments and other sums due thereunder are
free from liens, encumbrances, claims and set-offs of every kind whatsoever,
and that as of the date hereof, the unpaid balance of rental payments
specified in the Leases are as is set forth in each of the Leases.
Assignor agrees that Lender may proceed against Assignor directly
or independently of the lessees and that the cessation of the liability of
the Lessees under said Leases for any reason other than full payment, shall
not in any way affect the liability of Assignor hereunder, nor any extension,
forbearance of acceptance, release or substitution of security or any
impairment of suspension of Lender's remedies or rights against the lessees
shall not in any way affect the liability of Assignor hereunder.
Lender does not assume any of the obligations arising under said
Leases, and Assignor does hereby covenant and agree: (a) to keep and perform
all of the obligations of the lessor under the Leases and to save Lender
harmless from the consequences of any failure to do so; (b) to preserve the
Property free and clear of liens and encumbrances, except with the consent of
Lender; (c) to neither consent to nor enter into any alteration, amendment,
cancellation, renewal or extension of the Leases without first having
obtained the written consent of Lender.
1
Assignor hereby irrevocably constitutes and appoints Lender its
true and lawful attorney to demand, receive and enforce payment and to give
receipts, releases and satisfactions, and to xxx for all sums payable either
in the name of Assignor, or in the name of the Lender, with the same force
and effect as Assignor could do if this assignment had not been made.
Assignor hereby represents and warrants to Lender that it is the
lawful owner of the Leases and all rights and interests therein, and that it
will not assign any other interest in the Leases.
Notwithstanding any provision herein to the contrary, this
Assignment of Real Property Leases and Rents is intended to be an absolute
assignment from Assignor to Lender and not the granting of a security
interest. The Rents and Leases are hereby assigned absolutely by Assignor to
Lender.
Lender shall have the present right to collect and receive any and
all Rents assigned hereunder; provided, that so long as no event of default
has occurred hereunder or under (1) that certain promissory note of even date
herewith in the amount of One Million Six Hundred Fifty Thousand Dollars
($1,650,000) (the "First Non-Revolving Note"), that certain promissory note
of even date herewith in the amount of Eight Hundred Fifty Thousand Dollars
($850,000) (the "Second Non-Revolving Note"), and that certain promissory
note of even date herewith in the amount of Two Hundred Thousand Dollars
($200,000) (the "Revolving Note") (collectively, the "Notes"); (2) that
certain deed of trust of even date herewith executed by Assignor, as trustor,
in favor of Lender, as beneficiary (the "Deed of Trust"); and (3) that
certain loan agreement of even date herewith executed by and between Assignor
and Lender (collectively, the "Loan Documents"), Lender shall forebear from
collecting such Rents and Assignor shall have the duty to collect all Rents
for so long as Lender forebears. If an event of default has occurred under
any of the Loan Documents, any Rents received by Assignor shall be held in
trust for Lender and shall be paid over to Lender immediately. If an event of
default has occurred, Lender may, without thereby becoming or being deemed a
mortgagee in possession, notify any lessee, tenant or other occupant of any
part of the Property to pay Rents to Lender and all such rents shall
thereafter be paid directly to Lender until Lender agrees otherwise. The
obligation of any such lessee, tenant or occupant shall be satisfied and
discharged to the extent of any such payment to Lender without regard to
whether an event of default has in fact occurred, the application of the
Rents made by Lender, or otherwise. If an event of default has occurred under
the terms of any of the Loan Documents, to facilitate Lender's collection of
Rents, Assignor hereby irrevocably authorizes and empowers Lender to endorse
on behalf of Assignor and in Assignor's name or checks and other instruments
received by Lender as payment of Rents.
Lender shall be entitled to apply the Rents (in such order of
priority as Lender desires) to the payment of: (1) all expenses of managing
the Property, including without limitation, the salaries, fees and wages of
the managing agent and such other employees as Lender may deem necessary or
desirable, and all expenses of operating and maintaining the Property,
including without limitation, all taxes, charges, claims, assessments,
utility charges and insurance premiums, and the cost of all alterations,
renovations, repairs or replacements, and all expenses incident to taking and
retaining possession of the Property; (2) the principal and interest and
other sums due under the Notes together with all costs and attorneys' fees
(to the extent permitted by law); and (3) payment of any other obligations of
Assignor under the Loan Documents.
Notice of this assignment may be given to the lessees under the
Leases at any time at Lender's option. In the event any payment or payments
of Rents under the Leases are made to Assignor, Assignor agrees promptly to
transmit such payment or payments to Lender in the same manner as it is
received by Assignor except that Assignor will endorse checks so received
which are payable to Assignor.
Assignor agrees to indemnify and hold Lender harmless from all
liability, loss, damage or expense which it may incur by reason of this
assignment, or any action taken by Lender hereunder, except for the gross
negligence or willful misconduct of Lender. Should Lender incur any such
liability, loss, damage or expense, Assignor shall pay the amount thereof
(including reasonable attorneys' fees), with interest thereon at the default
rate provided in the Notes, to Lender immediately and without demand, and
such payment shall be secured by the Deed of Trust.
2
In the event the Assignor fails to perform any of the covenants or
agreements herein contained or any of the warranties or representations
herein contained prove to be untrue, then Lender, at its option, may
accelerate any indebtedness secured by the Deed of Trust and demand that
payment in full immediately be made.
In the event either party hereto shall bring any action or legal
proceeding for damages for an alleged breach of any provision of this
assignment, to enforce an indemnity obligation, or to enforce, protect,
interpret or establish any term, condition or covenant of this assignment or
right or remedy of either party, the prevailing party shall be entitled to
recover as a part of such action or proceeding, reasonable attorneys' fees
and court costs, including attorneys' fees and costs for appeal, as may be
fixed by the court or jury.
Assignor has granted Lender an assignment of rents in the Deed of
Trust which assignment supplements and is not intended to supersede, modify
or vary this assignment. Both assignments shall be construed together, but in
the event of a conflict, this assignment shall control.
This assignment is irrevocable and shall remain in full force and
effect until and unless either of the following shall occur: (1) payment in
full of the indebtedness secured by the Deed of Trust; or (2) execution by
Lender of a written release of this assignment.
Assignor agrees that Lender may provide any financial or other
information, data or material in Lender's possession relating to Assignor,
the Loan, this Assignment, the Property or the improvements, to Lender's
parent, affiliate, subsidiary, participants or service providers, without
further notice to Assignor.
Whenever the context so requires, the singular number includes the
plural.
Dated at San Jose, California this 10th day of December, 1998.
ASSIGNOR:
AWG, LTD.
By: ____________________________
Xxxx X. Xxxxxxxxx, Secretary
Address:
c/o J.E.A. Enterprises, L.L.C.
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
3
STATE OF CALIFORNIA )
) ss.
COUNTY OF _______________________ )
On ________________, 19___, before me, the undersigned, a 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.
______________________________
NOTARY PUBLIC
4
EXHIBIT "A"
LEGAL DESCRIPTION
COMMENCING AT A POINT ON THE NORTHEASTERN LINE OF THE COUNTY ROAD
COMMONLY KNOWN AS THE "BIG RANCH ROAD", WHERE THE SAME IS INTERSECTED BY THE
CENTER LINE OF A CERTAIN STONE DITCH RUNNING THROUGH LOT 12 AS SAID LOT IS
SHOWN UPON THE MAP HEREINAFTER REFERRED TO, SAID POINT OF COMMENCEMENT BEING
FURTHER DESCRIBED AS BEING THE POINT OF INTERSECTION OF SAID NORTHEASTERN
LINE OF THE "BIG RANCH ROAD" WITH THE SOUTHEASTERN LINE OF THE 39.25 ACRE
TRACT HERETOFORE CONVEYED TO L. L. JORDAN BY DEED OF RECORD IN BOOK 112 OF
DEEDS, AT PAGE 18, RECORDS OF SAID NAPA COUNTY AND RUNNING THENCE FROM SAID
POINT OF COMMENCEMENT, AND ALONG THE NORTHEASTERN LINE OF SAID COUNTY ROAD
SOUTH 30(degree) 30' EAST 849.5 FEET TO THE SOUTHEASTERN LINE OF SAID XXX 00,
XXXXXX XXXXX 00(xxxxxx) XXXX XXX XXXXX THE SOUTHEASTERN LINE OF SAID LOT 12,
A DISTANCE OF 46.90 CHAINS, MORE OR LESS, TO THE CENTER OF NAPA RIVER; THENCE
UP SAID RIVER AND FOLLOWING MEANDERINGS OF THE CENTER LINE THEREOF TO THE
SOUTHEASTERN LINE OF THE 33 ACRE TRACT CONVEYED TO X.X. XXXXXXX BY DEED OF
RECORD IN BOOK 110 OF DEEDS, AT PAGE 362, SAID NAPA COUNTY RECORDS, THENCE
WESTERLY ALONG THE SOUTHEASTERN LINE OF SAID 33 ACRE TRACT TO A LARGE OAK
TREE AND THENCE SOUTH 55 3/4(degree) WEST AND ALONG THE SOUTHEASTERN LINE OF
SAID XXXXXXX AND THE SOUTHEASTERN LINE OF PREMISES CONVEYED TO JORDAN
HEREINABOVE REFERRED TO, 1697 FEET TO THE POINT OF COMMENCEMENT. BEING A
PORTION OF LOT 12, AS SHOWN ON THAT CERTAIN MAP, DUPLICATE PLAT OF THE SAUSAL
RANCHO, RECORDED NOVEMBER 21, 1864 IN BOOK 1 OF DEEDS AT PAGE 99, NAPA COUNTY
RECORDS, AND BEING THE SAME AS SET FORTH ON RECORD OF SURVEY MAP NO. 3998,
FILED FEBRUARY 2, 1987 IN BOOK 25 OF SURVEYS, PAGE 62, NAPA COUNTY RECORDS.
APN 000-000-000
5
EXHIBIT "B"
SCHEDULE OF LEASES
6
SECURITY AGREEMENT
(Chattel Mortgage)
COMERICA BANK
0000 XXXXX XXXXXXXX XXXXXX
XXXXX 000
XXXXXXXXXX XXXXX, XX 00000
This Security Agreement (this "Agreement") is executed at San Jose,
California, on December 10, 1998, by AWG, Ltd., a Nevada corporation (herein
called "Debtor").
As security for the payment and performance of the following obligations: (i)
payment to COMERICA BANK, a Michigan Banking Corporation ("Lender"), of all
sums at any time owing under that certain First Non-Revolving Note of even
date herewith, in the original principal amount of ONE MILLION SIX HUNDRED
FIFTY THOUSAND DOLLARS ($1,650,000), that certain Second Non-Revolving Note
of even date herewith, in the original principal amount of EIGHT HUNDRED
FIFTY THOUSAND DOLLARS ($850,000) and that certain Revolving Note of even
date herewith, in the original principal amount of up to TWO HUNDRED THOUSAND
DOLLARS ($200,000) (collectively, the "Notes"), executed by Debtor and
payable to the order of Lender, and any and all modifications, extensions or
renewals thereof, whether hereafter evidenced by said Notes or otherwise;
(ii) payment and performance of all obligations of Debtor under that certain
Term Loan Agreement (the "Loan Agreement") and that certain Deed of Trust,
each of even date herewith, and all modifications, extensions or renewals of
either of the foregoing; and (iii) payment of such additional sums with
interest thereon as may be hereafter borrowed from Lender, its successors or
assigns by Debtor or the then record owner of the Collateral (defined below)
when evidenced by a promissory note or notes, which are by the terms thereof
secured by this Agreement; Debtor does hereby grant to Lender a continuing
security interest in all of the following described property (herein called
"Collateral"):
A. All of the personal property, fixtures and furnishings described
in Exhibit "A" and situated on or used in connection with the real
property described in Exhibit "B," commonly known as 0000 Xxx
Xxxxx Xxxx, Xxxxxx xx Xxxx, Xxxxx of California, and all other
property of the same character which Debtor may hereafter acquire
at any time, including, but not limited to, all accretions,
additions, replacements, improvements, repairs and increases to
such property;
B. All personal property of any kind which is delivered to or in the
possession or control of Lender or its agents, including any
accounts established pursuant to the Loan Agreement;
C. Proceeds of any of the above-described property; provided,
however, that the grant of a security interest in proceeds does
not imply any right of Debtor to sell or dispose of any Collateral
described herein without the express written consent by Lender.
All of the terms and conditions set forth on pages 2 and 3 hereof are
incorporated herein as though set forth in full above.
AGREEMENT
1. The term credit is used throughout this Agreement in its
broadest and most comprehensive sense. Credit may be granted at the request
of any one Debtor without further authorization or notice to any other
Debtor, including an Accommodation Debtor. Collateral shall be security for
all obligations of Debtor to Lender in accordance with the terms and
conditions herein.
2. Debtor will: (a) execute such Financing Statement(s) and other
documents and do such other acts and things, all as Lender may from time to
time require, to establish and maintain a valid security interest in
Collateral, including payment of all costs and fees in connection with any of
the foregoing when deemed necessary
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by Lender; (b) pay promptly when due all indebtedness to Lender; (c) furnish
Lender such information concerning Debtor and Collateral as Lender may from
time to time request, including but not limited to current financial
statements; (d) keep Collateral separate and identifiable and at the location
described herein and permit Lender and its representatives to inspect
Collateral and/or records pertaining thereto from time to time during normal
business hours; (e) not sell, assign or create or permit to exist any lien on
or security interest in Collateral in favor of anyone other than the Lender
unless Lender consents thereto in writing and at Debtor's expense upon
Lender's request remove any unauthorized lien or security interest and defend
any claim affecting the Collateral; (f) pay all charges against Collateral
prior to delinquency including but not limited to taxes, assessments,
encumbrances, insurance and drivers claims, and upon Debtor's failure to do
so Lender may pay any such charge as it deems necessary and add the amount
paid to the indebtedness of Debtor hereunder, (g) reimburse Lender for any
expenses including but not limited to reasonable attorneys' fees and legal
expenses, incurred by Lender in seeking to protect, collect or enforce any
rights in Collateral; (h) when required, provide insurance in form and
amounts and with companies acceptable to Lender and when required assign the
policies or the rights thereunder to Lender; (i) maintain Collateral in good
condition and not use Collateral for any unlawful purpose; (j) at its own
expense, upon request of Lender, notify any parties obligated to Debtor on
any Collateral to make payment to Lender and Debtor hereby irrevocably grants
Lender power of attorney to make said notifications and collections; (k) and
does hereby authorize Lender to perform any and all acts which Lender in good
xxxxx xxxxx necessary for the protection and preservation of Collateral or
its value or Lender's security interest therein, including transferring any
Collateral into its own name and receiving the income thereon as additional
security hereunder. Lender may not exercise any right under any corporate
security which might constitute the exercise of control by Lender so as to
make any such corporation an affiliate of Lender within the meaning of the
banking laws until after default.
3. The term default shall mean the occurrence of any of the
following events: (a) non-payment of any indebtedness when due or
non-performance of any obligation when due, whether required hereunder, under
the Notes or otherwise; (b) deterioration or impairment of the value of
Collateral; (c) default by Debtor under this Agreement, the Loan Agreement or
the Deed of Trust or under of any other agreement with Lender dealing with
the extension of credit or with debt owing Lender or any misrepresentation of
Debtor or its representative to Lender whether or not contained herein; or
(d) a change in or the actual existence of, any deterioration or impairment
in the ability of Debtor to meet any of its obligations to Lender.
4. Whenever a default exists, Lender, at its option may: (a)
without notice accelerate the maturity of any part or all of the secured
obligations and terminate any agreement for the granting of further credit to
Debtor; (b) sell, lease or otherwise dispose of Collateral at public or
private sale; unless Collateral is perishable and threatens to decline
speedily in value or is a type customarily sold on a recognized market,
Lender will give Debtor at least five (5) days prior written notice of the
time and place of any public sale or of the time after which any private sale
or any other intended disposition may be made; (c) transfer any Collateral
into its own name or that of its nominee; (d) retain Collateral in
satisfaction of obligations secured hereby, with notice of such retention
sent to Debtor as required by law; (e) notify any parties obligated on any
Collateral consisting of accounts, instruments, chattel paper, chooses in
action or the like to make payment to Lender and enforce collection of any
Collateral herein; (f) require Debtor to assemble and deliver any Collateral
to Lender at a reasonable convenient place designated by Lender; (g) apply
all sums received or collected from or on account of Collateral including the
proceeds of any sales thereof to the payment of the costs and expenses
incurred in preserving and enforcing rights of Lender including but not
limited to reasonable attorneys' fees, and indebtedness secured hereby in
such order and manner as Lender in its sole discretion determines; Lender
shall account to Debtor for any surplus remaining thereafter, and shall pay
such surplus to the party entitled thereto, including any second secured
party who has made a proper demand upon Lender and has furnished proof to
Lender as requested in the manner provided by law, in like manner, Debtor,
unless an Accommodation Debtor only, agrees to pay to Lender without demand
any deficiency after any Collateral has been disposed of and proceeds applied
as aforesaid; and (h) exercise its Lender's lien or right of setoff in the
same manner as though the credit were unsecured. Lender shall have all the
rights and remedies of a secured party under the Uniform Commercial Code of
California in any jurisdiction where enforcement is sought, whether in
California or elsewhere. All rights, powers and remedies of Lender hereunder
shall be cumulative and not alternative. No delay on the part of Lender in
the exercise of any right or remedy shall constitute a waiver thereof and any
exercise, or partial exercise, by Lender of any right or remedy under this
Agreement shall not preclude the exercise of any other right or remedy of
Lender under this Agreement or at law or in equity or the further exercise
2
of the same remedy. The execution and delivery of this Agreement shall not be
construed to derogate or impair the lien or provisions of the Deed of Trust
with respect to any property described in the Deed of Trust that is real
property or which the parties have agreed to treat as real property. Lender's
rights, power and remedies as to the Collateral shall be exercisable as to
any part or all of the Collateral as Lender may elect.
5. Debtor waives: (a) all right to require Lender to proceed
against any other person including any other Debtor hereunder or to apply any
Collateral Lender may hold at any time or to pursue any other remedy.
Collateral, endorsers or guarantors may be released, substituted or added
without affecting the liability of Debtor hereunder; (b) the defense of the
Statute of Limitations in any action upon any obligations of Debtor secured
hereby; (c) if Debtor is an Accommodation Debtor, all rights under Uniform
Commercial Code Section 9112; and (d)any right of subrogation and any right
to participate in Collateral until all obligations hereby secured have been
satisfied in full.
6. Debtor warrants: (a) that it is or will be the lawful owner of
all Collateral free of all claims, liens or encumbrances whatsoever, other
than the security interest granted pursuant hereto; (b) all information,
including but not limited to financial statements furnished by Debtor to
Lender heretofore or hereafter, whether oral or written, is and will be
correct and true as of the date given; and (c) if Debtor is a business
entity, the execution, delivery and performance hereof are within its powers
and have been duly authorized.
7. Debtor hereby assumes, and releases Lender from, all risk of
loss, destruction or damage to all or any part of the Collateral by reason of
any casualty or cause whatsoever except as caused by the intentional
misconduct of Lender, and Debtor shall indemnify and hold Lender harmless
from and against all liabilities, obligations, claims, damages, penalties,
causes of action, costs and expenses (including, reasonable attorneys' fees
and costs) imposed upon or incurred by or asserted against Lender by reason
of (a) any failure by Debtor to perform or comply with the terms of this
Agreement or (b) the exercise by Lender of any rights or remedies provided
hereunder or at law or in equity, except as caused by Lender's intentional
misconduct.
8. If more than one Debtor executes this Agreement the obligations
hereunder are joint and several. All words used herein in the singular shall
be deemed to have been used in the plural when the context and construction
so require. Any married person who signs this Agreement expressly agrees that
recourse may be had against his/her separate property for all of his/her
obligations to Lender.
9. This Agreement shall inure to the benefit of and bind Lender,
its successors and assigns and each of the undersigned and their respective
heirs, executors, administrators and successors in interest. Upon transfer by
Lender of any part of the obligations secured hereby, Lender shall be fully
discharged from all liability with respect to Collateral transferred
therewith.
3
10. Whenever possible each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but, if any provision of this Agreement shall be prohibited or invalid under
applicable law, such provisions shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such or the
remaining provisions of this Agreement.
DEBTOR
AWG, LTD.
By: ____________________________
Xxxx X. Xxxxxxxxx, Secretary
Address:
c/o J.E.A. Enterprises, L.L.C.
0000 Xxxx Xxxxx Xxxx, Xxxxx 000
Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxx
4
EXHIBIT "A"
DESCRIPTION OF PERSONAL PROPERTY
Some of the "Collateral" granted to Secured Party is the following located on
or generated by the real property ("Property") described on Exhibit "B":
(a) All goods, materials, fixtures, furnishings, as well as any
other personal property owned by Debtor, now or hereafter attached to,
installed, incorporated, or placed in, on, or about the Property for use as a
part of the Property or in conjunction with the use and occupancy of the
Property, including, but not limited to, all machinery, vehicles (including
motor vehicles and trailers), motors, fittings, doors, windows, signs,
pylons, store fronts, screenings, awnings, shades, blinds, carpets, floor
coverings, draperies, furnaces, boilers, gas and oil and electric burners and
heaters, ducts, vents, hood, flues and registers, hot water heaters, sinks,
stoves, ovens, cabinets, drainboards, refrigerators, heating, cooling and
air-conditioning equipment, fans, ventilators, wiring, panels, all lighting
fixtures and globes and tubes, time clocks and other electrical equipment,
and all plumbing and plumbing fixtures and equipment, sprinklers and
sprinkler equipment, and all trees, plants, shrubs and other landscaping, and
any interest in any of the foregoing, and all attachments, accessories,
assessions, replacements, substitutions, additions, and improvements to any
of the foregoing, wherever located; subject however, to the right of Debtor
to remove, in the ordinary course of business, such goods, fixtures,
furnishings, and equipment for the purpose of replacement with similar items
of the same quality performing the same functions, which replacements shall,
themselves, become part of the collateral;
(b) All income, rents, issues, profits, earnings, receipts,
accounts, royalties, and revenues, which, after the date of this Agreement
and while any portion of the indebtedness secured by the Security Agreement
remains unpaid, may accrue from the goods, fixtures, furnishings, and
equipment, or any part of them or from the Property or any part of it, or
that may be received or receivable by Debtor from any hiring, using, letting,
leasing, subhiring, subletting, or subleasing of any of the above items or
the Property;
(c) All inventory, farm products and crops, now owned of hereafter
acquired, including, without limitation, all merchandise, raw materials,
vines, grapes, grape juice, wine, parts, supplies, packing and shipping
materials, work in process and finished products including such inventory as
is temporarily out of Debtor's custody or possession or in transit and
including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above, and
Debtor's books relating to any of the foregoing;
(d) All reserves, deferred payments, deposits, refunds, cost
savings, and payments of any kind relating to the construction of any
improvements on the Property;
(e) All water stock relating to the Property;
(f) All causes of action, claims, compensation, and recoveries,
for any damage to or condemnation or taking of the Property, or for any
conveyance in lieu thereof, whether direct or consequential, or for any
damage or injury to the Property, or for any loss or diminution in value of
the Property;
(g) All winery permits, and all equipment, including but not
limited to winery equipment;
(h) All architectural, structural, mechanical, and other
improvements on the Property, and all studies, data, and drawings related to
such improvements; and also all contracts and agreements of the debtor
relating to those plans and specifications or to those studies, data, and
drawings, or to the construction of improvements on the Property; and
5
(i) All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, servicemarks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer list, route lists, infringements, claims, computer programs,
computer discs, computer tapes, literature, reports, catalogs, design rights,
income tax refunds, payments of insurance and rights to payment of any kind.
6
EXHIBIT "B"
DESCRIPTION OF REAL PROPERTY
COMMENCING AT A POINT ON THE NORTHEASTERN LINE OF THE COUNTY ROAD COMMONLY
KNOWN AS THE "BIG RANCH ROAD", WHERE THE SAME IS INTERSECTED BY THE CENTER
LINE OF A CERTAIN STONE DITCH RUNNING THROUGH LOT 12 AS SAID LOT IS SHOWN
UPON THE MAP HEREINAFTER REFERRED TO, SAID POINT OF COMMENCEMENT BEING
FURTHER DESCRIBED AS BEING THE POINT OF INTERSECTION OF SAID NORTHEASTERN
LINE OF THE "BIG RANCH ROAD" WITH THE SOUTHEASTERN LINE OF THE 39.25 ACRE
TRACT HERETOFORE CONVEYED TO L. L. JORDAN BY DEED OF RECORD IN BOOK 112 OF
DEEDS, AT PAGE 18, RECORDS OF SAID NAPA COUNTY AND RUNNING THENCE FROM SAID
POINT OF COMMENCEMENT, AND ALONG THE NORTHEASTERN LINE OF SAID COUNTY ROAD
SOUTH 30(degree) 30' EAST 849.5 FEET TO THE SOUTHEASTERN LINE OF SAID XXX 00,
XXXXXX XXXXX 00(xxxxxx) XXXX XXX XXXXX THE SOUTHEASTERN LINE OF SAID LOT 12,
A DISTANCE OF 46.90 CHAINS, MORE OR LESS, TO THE CENTER OF NAPA RIVER; THENCE
UP SAID RIVER AND FOLLOWING MEANDERINGS OF THE CENTER LINE THEREOF TO THE
SOUTHEASTERN LINE OF THE 33 ACRE TRACT CONVEYED TO X.X. XXXXXXX BY DEED OF
RECORD IN BOOK 110 OF DEEDS, AT PAGE 362, SAID NAPA COUNTY RECORDS, THENCE
WESTERLY ALONG THE SOUTHEASTERN LINE OF SAID 33 ACRE TRACT TO A LARGE OAK
TREE AND THENCE SOUTH 55 3/4(degree) WEST AND ALONG THE SOUTHEASTERN LINE OF
SAID XXXXXXX AND THE SOUTHEASTERN LINE OF PREMISES CONVEYED TO JORDAN
HEREINABOVE REFERRED TO, 1697 FEET TO THE POINT OF COMMENCEMENT. BEING A
PORTION OF LOT 12, AS SHOWN ON THAT CERTAIN MAP, DUPLICATE PLAT OF THE SAUSAL
RANCHO, RECORDED NOVEMBER 21, 1864 IN BOOK 1 OF DEEDS AT PAGE 99, NAPA COUNTY
RECORDS, AND BEING THE SAME AS SET FORTH ON RECORD OF SURVEY MAP NO. 3998,
FILED FEBRUARY 2, 1987 IN BOOK 25 OF SURVEYS, PAGE 62, NAPA COUNTY RECORDS.
APN 000-000-000
7
