EXHIBIT 10.4
EXHIBIT 10.4 TO XXXX STORES, INC. THIRD QUARTER 2000 FORM 10-Q
EXECUTIVE RELOCATION
LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement") is entered into as of this 14th day
of August, 2000, by and between XXXX STORES, INC., a Delaware corporation (the
"Company"), and Xxxxx X. Xxxxxx ("Executive").
WHEREAS, Executive has relocated to California to serve as the Company's
President and Chief Operating Officer;
WHEREAS, Executive and the Company have agreed that the Company shall lend
Executive Two Million Five Hundred Thousand Dollars ($2,500,000.00) for the
purpose of facilitating Executive's relocation to California; and
WHEREAS, the Company has agreed to provide Executive with the loan as
additional consideration for Executive's services as an employee of the Company.
NOW THEREFORE, the parties hereto agree as follows:
1. LOAN. The Company shall lend Executive a total of Two Million Five
Hundred Thousand Dollars ($2,500,000.00) (the "Loan") upon the terms and
conditions contained herein. The Loan shall be made on or after the date first
above written.
2. PROMISSORY NOTE. The Loan shall be made pursuant to a promissory
note in the form attached hereto as EXHIBIT A (the "Note"). Executive shall
execute and deliver the Note to Company concurrently with the execution of
this Agreement.
3. DEED OF TRUST WITH ASSIGNMENTS OF RENTS. The Loan shall be
secured by a Deed of Trust on the property purchased by Executive and
Executive's spouse as their new principal residence (the "Property") in the
form attached hereto as EXHIBIT B (the "Deed of Trust"), which Deed of Trust
shall be executed and delivered to Company concurrently with the closing of
the purchase of the Property by Executive. The Deed of Trust shall constitute
a valid and enforceable first priority lien on the Property.
4. INSURANCE AND PROPERTY TAXES. While the Loan or any portion
thereof, including any interest due thereunder, remains unpaid, Executive
hereby agrees to maintain at Executive's expense such fire, flood,
earthquake, property and casualty insurance coverage on the Property on terms
and from an insurance carrier acceptable to the Company in a sufficient total
amount to cover the full fair market value of the building and other
improvements on the Property, and Executive also hereby agrees to pay all
property taxes and any assessments applicable to the Property when due.
5. TITLE INSURANCE. As a condition for the Loan, Executive shall
procure title insurance on the Property for the benefit of the Company on
terms and from a title insurance company acceptable to the Company.
6. METHOD OF FUNDING. The Loan proceeds shall be advanced by bank
wire transfer from the Company to the escrow agent for the purchase of the
Property, with directions to be provided by the Company. The escrow agent
will be directed not to release such Loan
1.
proceeds until the Note and Deed of Trust are properly executed by Executive,
and his spouse where applicable, and delivered to escrow agent.
7. CONDITION ON FUTURE EMPLOYMENT. The Loan is conditioned on the
future performance of substantial services by Executive.
8. REPAYMENT OF LOAN. The Loan shall be repaid in accordance with
the terms set forth in the Note.
9. NON-TRANSFERABLE. The right of Executive to request and receive
the Loan hereunder, as well as the benefits of the interest arrangements
under this Agreement, shall not be assignable or otherwise transferable by
Executive.
10. QUALIFICATION AS EMPLOYEE-RELOCATION MORTGAGE LOAN. The parties
intend that the loan shall qualify as an employee relocation mortgage loan as
permitted by Section 7872 of the Internal Revenue Code of 1986, as amended,
and Treasury Regulation Section 1.7872-5T(c)(1)(i). Executive hereby
certifies to the Company that he reasonably expects to be entitled to and
will itemize income tax deductions for each year the loan is outstanding.
Executive agrees that the loan proceeds shall only be used to purchase the
new principal residence of the Executive.
11. GENERAL PROVISIONS.
a. This Agreement shall be governed by the laws of the State of
California applicable to contracts made and performed in such state, without
regard to principles of conflicts of laws.
b. This Agreement, including its Exhibits, contains the entire
agreement between Executive and the Company, and is the complete, final, and
exclusive embodiment of their agreement with regard to this subject matter.
Executive and the Company each acknowledge and represent that this Agreement is
entered into without reliance on any promise or representation other than those
expressly contained herein and that this Agreement cannot be modified except by
a separate written document signed by both parties.
c. Except as otherwise specified herein, any notice, demand or
request required or permitted to be given by either the Company or Executive
pursuant to the terms of this Agreement shall be in writing and shall be
deemed given when delivered personally, three days after being deposited in
the U.S. Mail, registered mail, return receipt requested, postage prepaid, or
one business day after delivery to an overnight carrier service and addressed
to the Company at its then current principal office and to Executive at the
address listed for him on the Company's payroll records.
d. Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement. The rights
granted both parties herein are cumulative and shall not constitute a waiver
of either party's right to assert all other legal remedies available to it
under the circumstances.
e. Executive agrees upon request to execute any further
documents or instruments necessary or desirable to carry out the purpose or
intent of this Agreement.
2.
f. If any provision of this Agreement shall be held to be
invalid or unenforceable by a court of competent jurisdiction, such
determination shall not affect the remaining provisions of this Agreement.
g. In the event of any litigation concerning this Agreement,
the prevailing party shall be entitled to a reasonable sum for attorneys'
fees, costs, and litigation expenses, whether or not such action is
prosecuted to judgment. "Prevailing Party" includes without limitation a
party who agrees to dismiss an action upon payment by the other party of sums
allegedly due or performance of the covenants allegedly breached, or who
obtains substantially the relief sought by that party. In the event that the
Company is the Prevailing Party, the Company shall also be entitled to
reasonable costs associated with the collection of the Loan.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first set forth above.
XXXX STORES, INC. EXECUTIVE
a Delaware corporation
By: /s/Xxxxxxx X. Xxxxxxx /s/Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx Xxxxx X. Xxxxxx
Chief Executive Officer
3.
EXHIBIT A TO EXECUTIVE RELOCATION LOAN AGREEMENT
PROMISSORY NOTE
SECURED BY DEED OF TRUST
$2,500,000 August 11, 0000
Xxxxxx, Xxxxxxxxxx
FOR VALUE RECEIVED, Xxxxx X. Xxxxxx ("BORROWER"), an employee of Xxxx
Stores, Inc. a Delaware corporation ("COMPANY") hereby unconditionally promises
to pay to the order of Company, in lawful money of the United States of America
and in immediately available funds, the principal sum of two million five
hundred thousand dollars ($2,500,000) (the "LOAN") together with accrued and
unpaid interest thereon, if any, each due and payable on the dates and in the
manner set forth below.
It is the intent of the parties that the purpose of this Note is not for
consumer, family or household purposes.
This Promissory Note Secured by Deed of Trust is the Note referred to in and is
executed and delivered in connection with that certain Loan Agreement ("LOAN
AGREEMENT") and Deed of Trust with Assignment of Rents dated as of even date
herewith relating to certain therein-described real property ("PROPERTY") and
executed and delivered by Borrower in favor of Company (as the same may from
time to time be amended, modified or supplemented or restated, the "DEED OF
TRUST"). Additional rights of Company are set forth in the Deed of Trust. All
capitalized terms used herein and not otherwise defined herein shall have the
respective meanings given to them in the Loan Agreement.
1. PRINCIPAL REPAYMENT. The outstanding principal amount of the Loan
shall be due and payable on the earliest to occur of: (a) July 31, 2008; or (b)
the one hundred twentieth (120th) day following the date of termination of
Borrower's employment with the Company for any reason; or (c) any sale, transfer
or hypothecation of all or any part of the Property. The earliest of such dates
is hereinafter referred to as the "REPAYMENT DATE."
2. INTEREST RATE. From the date hereof through the Repayment Date, this
Note shall be a non-interest bearing note and, as such, will be subject to the
provisions of Section 7872 of the Internal Revenue Code of 1986, as amended, and
the Treasury Regulations thereunder. Borrower represents and warrants that with
respect to himself and his spouse (i) they expect to itemize deductions on their
annual income tax returns for each year during which any amounts remain
outstanding under the Loan, (ii) they are relocating to the Danville, California
area due to a transfer to a new work location, (iii) the Loan proceeds shall be
used only for the purchase of their new principal residence located on the
Property, and (iv) the fair market value of the property described in the Deed
of Trust with Assignment of Rent, as determined by an appraiser acceptable to
Company, equals or exceeds the aggregate amount of all indebtedness secured by
liens upon such property.
4.
From and after the Repayment Date until paid in full, Borrower further
promises to pay interest on the outstanding principal amount of the Loan, if
any, which interest shall be payable at a fixed rate of ten percent (10.0%) per
annum (the "INTEREST RATE"). Interest, if any, shall be paid at the same time
that the outstanding principal amount of the Loan is paid and shall be
compounded annually and calculated on the basis of a 360-day year for the actual
number of days elapsed. Lender shall have all remedies available to it by law as
a creditor hereunder.
3. PLACE/MANNER OF PAYMENT. All amounts payable hereunder shall be
payable at the office of Company unless another place of payment shall be
specified in writing by Company.
4. APPLICATION OF PAYMENTS. Payment on this Note shall be applied first
to accrued interest, if any, and thereafter to the outstanding principal balance
hereof.
5. SECURED NOTE. The full amount of this Note is secured by the
collateral identified and described as security therefor in the Deed of Trust.
Borrower shall not, directly or indirectly, create, permit or suffer to exist,
and shall defend the collateral against and take such other action as is
necessary to remove, any lien on or in the collateral, or in any portion
thereof.
6. DEFAULT. Each of the following events shall be an "EVENT OF DEFAULT"
hereunder:
a. Borrower fails to pay timely any of the principal amount due
under this Note on the date the same becomes due and payable or any accrued
interest or other amounts due under this Note on the date the same becomes due
and payable;
b. Borrower files a petition or action for relief under any
bankruptcy, insolvency or moratorium law or any other law for the relief of, or
relating to, debtors, now or hereafter in effect, or makes any assignment for
the benefit of creditors or takes any action in furtherance of any of the
foregoing;
c. An involuntary petition is filed against Borrower (unless such
petition is dismissed or discharged within sixty (60) days) under any bankruptcy
statute now or hereafter in effect, or a custodian, receiver, trustee, assignee
for the benefit of creditors (or other similar official) is appointed to take
possession, custody or control of any property of Borrower;
d. Borrower defaults on an obligation contained in the Loan
Agreement; or
e. Borrower's employment by or association with Company is
terminated for any reason or no reason, including, without limitation, death of
Borrower.
Upon the occurrence of an Event of Default pursuant to (a), (d) or (e) above,
all unpaid principal, accrued interest and other amounts owing hereunder shall,
at the option of Company, be immediately due, payable and collectible by Company
pursuant to applicable law. Upon the occurrence of an Event of Default pursuant
to (b) or (c) above, all unpaid principal, accrued interest and other amounts
owing hereunder shall automatically be immediately due, payable and collectible
by Company pursuant to applicable law. Company shall have all rights and may
exercise any remedies available to it under law, successively or concurrently.
Borrower expressly acknowledges and agrees that Company shall have the right to
offset any obligations of Borrower hereunder against salaries, bonuses or other
amounts that may be payable to Borrower by Company.
5.
7. WAIVER. Borrower waives presentment and demand for payment, notice of
dishonor, protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorneys'
fees, costs and other expenses.
The right to plead any and all statutes of limitations as a defense to any
demands hereunder is hereby waived to the full extent permitted by law.
8. GOVERNING LAW. This Note shall be governed by, and construed and
enforced in accordance with, the laws of the State of California, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.
9. SUCCESSORS AND ASSIGNS. The provisions of this Note shall inure to the
benefit of and be binding on any successor to Borrower and shall extend to any
holder hereof. Borrower shall not, without the prior written consent of holder,
assign any of its rights or obligations hereunder.
BORROWER: /s/ Xxxxx X. Xxxxxx
--------------------------
Xxxxx X. Xxxxxx
6.
EXHIBIT B TO EXECUTIVE RELOCATION LOAN AGREEMENT
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WHEN RECORDED MAIL TO: |
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SPACE ABOVE THIS LINE FOR RECORDER'S USE
DEED OF TRUST WITH ASSIGNMENT OF RENTS
(SHORT FORM)
This DEED OF TRUST, made AUGUST 10, 2000, between XXXXX X. XXXXXX and XXXXXX X.
XXXXXX, husband and wife, herein collectively called TRUSTOR, whose address is ,
OLD REPUBLIC TITLE COMPANY, a California corporation, herein called TRUSTEE, and
XXXX STORES, INC. a Delaware corporation, herein called BENEFICIARY.
WITNESSETH: That Trustor grants to Trustee in trust, with power of sale, that
property in the City of , County of State of California, described as:
SEE LEGAL DESCRIPTION ATTACHED HERETO AND MADE A PART HEREOF
together with the rents, issues and profits thereof, subject, however, to
the right, power and authority hereinafter given to and conferred upon
Beneficiary to collect and apply such rents, issues and profits for the
Purpose of Securing (1) payment of the sum of $2,500,000 with interest
thereon according to the terms of a promissory note or notes of even
date herewith made by XXXXX X. XXXXXX, payable to order of Beneficiary, and
extensions or renewals thereof, (2) the performance of each agreement of
Trustor incorporated by reference or contained herein, and (3) payment of
additional sums and interest thereon which may hereafter be loaned to
Trustor, or Trustor's successors or assigns, when evidenced by a
promissory note or notes reciting that they are secured by this Deed of
Trust.
To protect the security of this Deed of Trust, and with respect to the
property above described Trustor expressly makes each and all of the
agreements, and adopts and agrees to perform and be bound by each and
all of the terms and provisions set forth in subdivision A, and it is
mutually agreed that each and all of the terms and provisions set forth in
subdivision B of the fictitious deed of trust recorded in Orange County
August 17, 1964, and in all other counties August 18, 1964, in the book
and at the page of Official Records in the office of the county recorder of
the county where said property is located, noted below opposite the name
of such county, namely:
7.
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
ALAMEDA 1288 556 KINGS 858 713 PLACER 1028 379 SIERRA 38 187
ALPINE 3 130-31 LAKE 437 110 PLUMAS 166 1307 SISKIYOU 000 000
XXXXXX 000 000 LASSEN 192 367 RIVERSIDE 3778 347 XXXXXX 1287 621
BUTTE 1330 513 LOS ANGELES T-3878 874 SACRAMENTO 5039 124 SONOMA 2067 427
CALAVERAS 000 000 XXXXXX 000 000 SAN XXXXXX 300 405 STANISLAUS 1970 56
COLUSA 323 391 MARIN 1849 122 SAN BERNARDINO 6213 768 XXXXXX 655 585
CONTRA COSTA 4684 1 MARIPOSA 90 453 SAN FRANCISCO A-804 596 TEHAMA 000 000
XXX XXXXX 000 000 MENDOCINO 667 99 SAN XXXXXXX 2855 283 TRINITY 108 595
EL DORADO 704 635 MERCED 1660 753 SAN XXXX OBISPO 1311 137 TULARE 2530 108
FRESNO 5052 623 MODOC 191 93 SAN MATEO 4778 175 TUOLUMNE 177 160
XXXXX 469 76 MONO 69 302 SANTA XXXXXXX 2065 881 VENTURA 2607 237
HUMBOLDT 801 83 MONTEREY 357 239 SANTA XXXXX 6626 664 YOLO 769 16
IMPERIAL 1189 701 NAPA 704 742 SANTA XXXX 1638 607 YUBA 000 000
XXXX 000 000 NEVADA 363 94 SHASTA 800 633
XXXX 3756 690 ORANGE 7182 18 SAN DIEGO SERIES 5 BOOK 1964, PAGE 149774
shall inure to and bind the parties hereto, with respect to the property
above described. Said agreements, terms and provisions contained in said
subdivisions A and B, (identical in all counties, and printed on Pages 3 and
4 hereof) are by the within reference thereto, incorporated herein and made
a part of this Deed of Trust for all purposes as fully as if set forth
at length herein, and Beneficiary may charge for a statement regarding
the obligation secured hereby, provided the charge therefor does not exceed
the maximum allowed by law.
The undersigned Trustor, requests that a copy of any Notice of Default and
any Notice of Sale hereunder be mailed to Trustor at the address
hereinbefore set forth.
SEE ADDENDUM 1 AND ADDENDUM 2 ATTACHED HERETO AND INCORPORATED HEREIN BY
THIS REFERENCE FOR ADDITONAL PROVISIONS.
STATE OF _______________________________} Signature of Trustor
}SS.
COUNTY OF_______________________________} /s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
On_______________________________________
before me,_______________________________,
personally appeared______________________, /s/ Xxxxxx X. Xxxxxx
_________________________________________, Xxxxxx X. Xxxxxx
personally known to me (or proved to me on
the basis of satisfactory evidence) to be _____________________________
the person(s) whose name(s) is/are subscribed
to the within instrument and acknowledged to _____________________________
me that he/she/they executed the same in
his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the
instrument the person(s) or the entity upon
behalf of which the person(s) acted, executed
the instrument. WITNESS my hand and official
seal.
Signature________________________________
(This area for official notarial seal)
8.
DO NOT RECORD
The following is a copy of Subdivisions A and B of the fictitious Deed of
Trust recorded in each county in California as stated in the foregoing Deed
of Trust and incorporated by reference in said Deed of Trust as being a
part thereof as if set forth at length therein.
A. To protect the security of this Deed of Trust, Trustor agrees:
(1) To keep said property in good condition and repair; not to
remove or demolish any building thereon; to complete or restore promptly and in
good and workmanlike manner any building 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 said property or
requiring any alterations or improvements to be made thereon; not to commit or
permit waste thereof; not to commit, suffer or permit any act upon said property
in violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do
all other acts which from the character or use of said property may be
reasonably necessary, the specific enumerations herein not excluding the
general.
(2) To provide, maintain and deliver to Beneficiary fire insurance
satisfactory to and with loss payable to Beneficiary. The amount collected under
any fire or other insurance policy 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.
(3) 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.
(4) To pay: at least ten days before delinquency all taxes and
assessments affecting said property, including assessments on appurtenant water
stock; when due, all encumbrances, charges and liens, with interest, on said
property or any part thereof, which appear to be prior or superior hereto; all
costs, fees and expenses of this Trust.
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 said 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
his reasonable fees.
(5) To pay immediately and without demand all sums so expended by
Beneficiary or Trustee, with interest from date of expenditure at the amount
allowed by law in effect at the date hereof, and to pay for any statement
provided for by law in effect at the date hereof regarding the obligation
secured hereby any amount demanded by the Beneficiary not to exceed the maximum
allowed by law at the time when said statement is demanded.
B. It is mutually agreed:
(1) That any award of damages in connection with any condemnation
for public use of or injury to said property or any part thereof is hereby
assigned and shall be paid to Beneficiary who may apply or release such monies
received by him in the same manner and with the same effect as above provided
for disposition of proceeds of fire or other insurance.
(2) That by accepting payment of any sum secured hereby after its
due date, Beneficiary does not waive his right either to require prompt payment
when due of all other sums so secured or to declare default for failure so to
pay.
(3) 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 and said note for endorsement, and without affecting
the personal liability of any person for payment of the indebtedness secured
hereby, Trustee may: reconvey any part of said property; consent to the making
of any map or plat thereof; join in granting any easement thereon; or join in
any extension agreement or any agreement subordinating the lien or charge
hereof.
(4) That upon written request of Beneficiary stating that all sums
secured hereby have been paid, and upon surrender of this Deed and said note to
Trustee for cancellation and retention or other disposition as Trustee in its
sole discretion may choose and upon payment of its fees, Trustee shall reconvey,
without warranty, the property 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."
(5) That as additional security, Trustor hereby gives to and
confers upon Beneficiary the right, power and authority, during the continuance
of these Trusts, to collect the rents, issues and profits of said property,
reserving unto Trustor the right, prior to any default by Trustor in payment of
any indebtedness secured hereby or in performance of any agreement hereunder, to
collect and retain such rents, issues and profits as they become due and
payable. 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 said property or any part thereof, in
his own name xxx
9.
for or otherwise collect such rents, issues, and profits, including those
past due and unpaid, and apply the same, less costs and expenses of operation
and collection, including reasonable attorney's fees, upon any indebtedness
secured hereby, and in such order as Beneficiary may determine. The entering
upon and taking possession of said property, the collection of such rents,
issues and profits 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.
(6) That upon default by Trustor in payment of any indebtedness
secured hereby or in performance of any agreement hereunder, Beneficiary may
declare all sums secured hereby immediately due and payable by delivery to
Trustee of written declaration of default and demand for sale and of written
notice of default and of election to cause to be sold said property, which
notice Trustee shall cause to be filed for record. Beneficiary also shall
deposit with Trustee this Deed, said note 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 sale having been
given as then required by law, Trustee, without demand on Trustor,
shall sell said 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 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 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 hereinafter 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 amount allowed
by law in effect at the date hereof; all other sums then secured hereby; and
the remainder, if any, to the person or persons legally entitled thereto.
(7) Beneficiary, or any successor in ownership of any
indebtedness secured hereby, 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 by the Beneficiary and duly
acknowledged 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
conveyance 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 where
this Deed is recorded and the name and address of the new Trustee.
(8) That this Deed 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 note secured hereby, whether or not
named as Beneficiary herein. In this Deed, whenever the context so requires,
the masculine gender includes the feminine and/or neuter, and the singular
number includes the plural.
(9) That Trustee accepts this Trust when this Deed, 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.
DO NOT RECORD REQUEST FOR FULL RECONVEYANCE
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TO OLD REPUBLIC TITLE COMPANY, TRUSTEE:
The undersigned is the legal owner and holder of the note or notes, and of
all other indebtedness secured by the foregoing Deed of Trust. Said note or
notes, together with all other indebtedness secured by said Deed of Trust, have
been fully paid and satisfied; and you are hereby requested and directed, on
payment to you of any sums owing to you under the terms of said Deed of Trust,
to cancel said note or notes above mentioned, and all other evidences of
indebtedness secured by said Deed of Trust delivered to you herewith, together
with the said Deed of Trust, and to reconvey, without warranty, to the parties
designated by the terms of said Deed of Trust, all the estate now held by you
under the same.
Dated____________________________
____________________________________
____________________________________
Please mail Deed of Trust,_____________________________________________________
Note and Reconveyance to_______________________________________________________
DO NOT LOSE OR DESTROY THIS DEED OF TRUST OR THE NOTE WHICH IT SECURES. BOTH
MUST BE DELIVERED TO THE TRUSTEE FOR CANCELLATION BEFORE RECONVEYANCE WILL BE
MADE.
10.
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
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[To be provided by escrow agent]
2.
ADDENDUM 1
ADDITIONAL PROVISIONS
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Trustor also agrees that it shall not encumber, hypothecate, sell, assign,
or otherwise transfer the property above described, and the performance
of such agreement is one of the purposes secured by this Deed of Trust.
3.
ADDENDUM 2
Attached to and made a part of the Deed of Trust dated August 10, 2000,
executed by Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx, husband and wife,
collectively as Trustor ("Deed of Trust").
1. DEFINITIONS. As used in this Addendum:
a. "Third Party Secured Obligation" means any obligation which is
required to be performed by Employee which is secured by this Deed of Trust;
b. "Spouse" means Xxxxxx X. Xxxxxx; and
c. "Employee" means Xxxxx X. Xxxxxx.
As used herein, "Beneficiary" shall mean Beneficiary (as defined in the
Deed of Trust) or Trustee (as defined in the Deed of Trust) if acting on behalf
of Beneficiary (as defined in the Deed of Trust). All other capitalized words
are used herein as they are defined in the attached Deed of Trust.
2. RIGHTS OF BENEFICIARY. Spouse authorizes Beneficiary to perform any
or all of the following acts at any time in its sole discretion, all without
notice to Spouse and without affecting Beneficiary's rights or Spouse's
obligations under this Deed of Trust:
a. Beneficiary may alter any terms of the Third Party Secured
Obligation or any part of it, including renewing, compromising, extending or
accelerating, or otherwise changing the time for payment of, or increasing or
decreasing the rate of interest on, the Third Party Secured Obligation or any
part of it.
b. Beneficiary may take and hold any additional security for the
Third Party Secured Obligation, accept substituted security for that obligation,
and subordinate, exchange, enforce, waive, release, compromise, fail to perfect
and sell or otherwise dispose or any such security.
c. Beneficiary may direct the order and manner of any sale of all
or any part of any security now or later to be held for the Third Party Secured
Obligation, and Beneficiary may also bid at any such sale.
d. Beneficiary may apply any payments or recoveries from Employee
or any other source, and any proceeds of any security, to the Third Party
Secured Obligation in such manner, order and priority as Beneficiary may elect,
whether that obligation is secured by this Deed of Trust or not at the time of
the application.
e. Beneficiary may release Employee of Employee's liability for the
Third Party Secured Obligation or any part of it.
f. Beneficiary may substitute, add or release any one or more
guarantors or endorsers.
4.
g. In addition to the Third Party Secured Obligation, Beneficiary
may extend other credit to Employee, and may take and hold security for the
credit so extended, all without affecting Beneficiary's rights or Spouse's
liability under this Deed of Trust.
3. DEED OF TRUST TO BE ABSOLUTE. Spouse expressly agrees that until
each and every term, covenant and condition of this Deed of Trust and the Third
Party Secured Obligation is fully performed, Spouse shall not be released by or
because of:
a. Any act or event which might otherwise discharge, reduce, limit
or modify Spouse's obligations under this Deed of Trust.
b. Any waiver, extension, modification, forbearance, delay or other
act or omission of Beneficiary, or its failure to proceed promptly or otherwise
as against Employee, any other person or any security.
c. Any action, omission or circumstance which might increase the
likelihood that Spouse may be called upon to perform under this Deed of Trust or
which might affect the rights or remedies of Spouse as against Employee; or
d. Any dealings occurring at any time between Employee and
Beneficiary, whether relating to the Third Party Secured Obligation or
otherwise.
Spouse hereby expressly waives and surrenders any defense to Spouse's
liability under this Deed of Trust based upon any of the foregoing acts,
omissions, agreements, waivers or matters. It is the purpose and intent of this
Deed of Trust that the obligations of Spouse under it shall be absolute and
unconditional under any and all circumstances.
4. SPOUSE'S WAIVERS. Spouse waives:
a. All statutes of limitations as a defense to any action or
proceeding brought against Spouse by Beneficiary, to the fullest extent
permitted by law;
b. Any right it may have to require Beneficiary to proceed against
Employee, proceed against or exhaust any other security held from Employee, or
pursue any other remedy in Beneficiary's power to pursue;
c. Any defense based on any claim that Spouse's obligations exceed
or are more burdensome than those of Employee.
d. Any defense based on: (i) any legal disability of Employee, (ii)
any release, discharge, modification, impairment or limitation of the liability
of Employee to Beneficiary from any cause, whether consented to by Beneficiary
or arising by operation of law or from any bankruptcy or other voluntary of
involuntary proceeding, in or out of court, for the adjustment of
debtor-creditor relationships ("Insolvency Proceeding") and (iii) any rejection
or disaffirmance of the Third Party Secured Obligation, or any part of it, or
any security held for it, in any such Insolvency Proceeding;
5.
e. Any defense based on any action taken or omitted by Beneficiary
in any Insolvency Proceeding involving Employee, including any election to have
Beneficiary's claim allowed as being secured, partially secured or unsecured,
any extension of credit by Beneficiary to Employee in any Insolvency Proceeding,
and the taking and holding by Beneficiary of any security for any such extension
of credit.
f. All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices of
acceptance of this Deed of Trust and of the existence, creation, or incurring of
new or additional indebtedness, and demands and notices of every kind;
g. Any defense based on or arising out of any defense that Employee
may have to the payment or performance of the Third Party Secured Obligation or
any part of it;
h. All rights and defenses that the Spouse may have because the
Third Party Secured Obligation is secured by real property. This means, among
other things:
(i) The Beneficiary may foreclose under this Deed of Trust
without first foreclosing on any other real or personal property collateral.
(ii) If the Beneficiary forecloses on any real property
collateral pledged as collateral:
(1) The amount of the Third Party Secured Obligation
may be reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale price.
(2) The Beneficiary may foreclose pursuant to this
Deed of Trust even if the Beneficiary, by foreclosing on the real property
collateral, has destroyed any right the Spouse may have to collect from the
Employee.
i. The Spouse waives all rights and defenses arising out of an
election of remedies by the Beneficiary, even though that election of remedies,
such as a nonjudicial foreclosure, has destroyed the Spouse's rights of
subrogation and reimbursement against the Employee by the operation of Section
580d of the California Code of Civil Procedure or otherwise.
This is an unconditional and irrevocable waiver of any rights and defenses
the Spouse may have because the Third Party Secured Obligation is secured by
real property. These rights and defenses include, but are not limited to, any
rights or defenses based upon Section 580a, 580b, 580d or 726 of the California
Code of Civil Procedure.
5. WAIVERS OF SUBROGATION AND OTHER RIGHTS.
a. Upon a default by Employee, Beneficiary in its sole discretion,
without prior notice to or consent of Spouse, may elect to: (i) foreclose either
judicially or nonjudicially against any real or personal property security it
may hold for the Third Party Secured Obligation, (ii) accept a transfer of any
such security in lieu of foreclosure, (iii) compromise or adjust the
6.
Third Party Secured Obligation or any part of it or make any other accommodation
with Employee or Spouse, or (iv) exercise any other remedy against Employee or
any security. No such action by Beneficiary shall release or limit the liability
of Spouse, who shall remain liable under this Deed of Trust after the action,
even if the effect of the action is to deprive Spouse of any subrogation rights,
rights of indemnity, or other rights to collect reimbursement from Employee for
any sums paid to Beneficiary, whether contractual or arising by operation of law
or otherwise. Spouse expressly agrees that under no circumstances shall it be
deemed to have any right, title, interest or claim in or to any real or personal
property to be held by Beneficiary or any third party after any foreclosure or
transfer in lieu of foreclosure of any security for the Third Party Secured
Obligation.
b. Regardless of whether Spouse may have made any payments to
Beneficiary, Spouse hereby waives: (i) all rights of subrogation, all rights of
indemnity, and any other rights to collect reimbursement from Employee for any
sums paid to Beneficiary, whether contractual or arising by operation of law
(including the United Bankruptcy Code or any successor or similar statute) or
otherwise, (ii) all rights to enforce any remedy that Beneficiary may have
against Employee, and (iii) all rights to participate in any security now or
later to be held by Beneficiary for the Third Party Secured Obligation. The
waivers given in this subsection 5(b) shall be effective until the Third Party
Secured Obligation has been paid and performed in full.
c. Spouse understands and acknowledges that if Beneficiary
forecloses judicially or nonjudicially against any real property security for
the Third Party Secured Obligation, that foreclosure could impair or destroy any
ability that Spouse may have to seek reimbursement, contribution, or
indemnification from Employee or others based on any right Spouse may have of
subrogation, reimbursement, contribution or indemnification. Spouse further
understands and acknowledges that in the absence of this Deed of Trust and
Addendum, such potential impairment or destruction of Spouse's rights, if any,
may entitle Spouse to assert a defense to this Deed of Trust and Addendum based
on Section 580d of the California Code of Civil Procedure as defined in UNION
BANK X. XXXXXXX, 265 Cal.App.2d 40 (1968). By executing this Deed of Trust and
Addendum, Spouse freely, irrevocably and unconditionally: (i) waives and
relinquishes that defense and agrees that Spouse will be fully liable under this
Deed of Trust and Addendum even though Beneficiary may foreclose judicially or
nonjudicially against any real property security for the Third Party Secured
Obligation; (ii) agrees that Spouse will not assert that defense in any action
or proceeding which Beneficiary may commence to enforce this Deed of Trust;
(iii) acknowledges and agrees that the rights and defense that Spouse may have
or be entitled to assert based upon or arising out of any one or more Sections
580a, 580b, 580d or 726 of the California Code of Civil Procedure or Section
2848 of the California Civil Code; and (iv) acknowledges and agrees that
Beneficiary is relying on this waiver in making the Third Party Secured
Obligation, and that this waiver is a material part of the consideration which
Beneficiary is receiving for making the Third Party Secured Obligation.
6. REVIVAL AND REINSTATEMENT. If Beneficiary is required to pay, return
or restore to Employee or any other person any amounts previously paid on the
Third Party Secured Obligation because of any Insolvency Proceeding of Employee,
any stop notice or any other reason, the obligations of Spouse shall be
reinstated and revived and the rights of Beneficiary shall continue with regard
to such amounts, all as though they had never been paid.
7.
7. INFORMATION REGARDING EMPLOYEE. Before signing this Deed of Trust,
Spouse acknowledges that Spouse is aware of the financial condition and business
operations of Employee and such other matters as Spouse deemed appropriate to
assure Spouse of Employee's ability to discharge its obligations in connection
with the Third Party Secured Obligation. Spouse assumes full responsibility for
that due diligence, as well as for keeping informed of all matters which may
affect Employee's ability to pay and perform its obligations to Beneficiary.
Beneficiary has no duty to disclose to Spouse any information which Beneficiary
may have or receive about Employee's financial condition or business operations,
or any other circumstances.
8.
