Exhibit 10.9
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Security Agreement") dated as of
April 21 1995, is entered into by GOLDEN STATE VINTNERS, a California
corporation (the "Company"), in favor of XXXX XXXXXXX MUTUAL LIFE INSURANCE
COMPANY (the "Secured Party").
W I T N E S S E T H:
A. The Company owns certain real property located in the State of
California, as more particularly described on SCHEDULE I attached hereto and
incorporated herein by this reference, together with certain improvements
thereon (collectively, the "Real Property") and certain personal property used
in connection with the Real Property and certain intangible property associated
with the Real Property.
B. Pursuant to that certain Securities Purchase Agreement, dated as
of April 21, 1995 (as amended, supplemented, or restated from time to time, the
"Securities Purchase Agreement"), by and between the Company, as the issuer, and
the Purchasers of the Securities (including, without limitation, the Secured
Party as Purchaser of the Mortgage Notes and any successor Mortgage
Noteholders), the Company has authorized the issuance and sale of up to
$35,000,000 in aggregate principal amount of its First Mortgage Notes due 2005
(as further described in the Securities Purchase Agreement, the "Mortgage
Notes").
In furtherance of the foregoing, the Company hereby agrees as follows:
SECTION 1. DEFINITIONS
Capitalized terms used herein without other definition are used as
defined in the Securities Purchase Agreement.
SECTION 2. SECURITY AGREEMENT
Section 2.1 GRANT OF SECURITY INTEREST: COLLATERAL ASSIGNMENTS. The
Company hereby pledges, assigns, transfers and grants to the Secured Party for
the benefit of the Mortgage Noteholders a security interest in and to the
property described in Section 2.2 below (collectively and severally, the
"Collateral") to secure the Obligations (as defined in Section 2.3 below).
Section 2.2 COLLATERAL. The Collateral shall consist of the
following:
(a) all of the Company's right, title and interest in and to the
following personal property of any kind or description relating to, attached to,
located on or used in the operation of or in connection with the Real Property,
wherever located and whether now
existing, owned or held or hereafter acquired or arising, including, without
limitation, the following (collectively, the "Goods"; and, together with the
Real Property, the "Property"):
(i) All goods, farm products, machinery, equipment, apparatus,
fittings and fixtures of every kind and nature whatsoever, wherever
located, and all parts thereof relating to, attached to, located on or used
in the operation of or in connection with the Real Property, whether
located at the Real Property or elsewhere (including, without limitation,
all crops (growing and severed), vines, fruit and vegetable products
(including grapes), timber, tanks, pipes, fittings, hoses, packaging lines,
bottling lines, tractors, plows, harvesters, fork lifts, trellises, stakes,
posts, wires, water supply equipment, irrigation equipment, pumps, scales,
tanks, cooperage, pipes, computers, laboratory equipment, tools,
appliances, heating, ventilating and air conditioning systems, plumbing,
mechanical and electrical systems, elevators, lighting, alarm systems, fire
control systems, carpets and carpet furnishings, furniture, service
equipment and building or maintenance equipment, storage facilities and
furniture) and all additions and accessions thereto and replacements
therefore, whether now owned or had or hereafter acquired;
(ii) All proceeds and claims arising on account of any damage to
or taking of the Goods or any part thereof and all causes of action and
recoveries for any loss or diminution in the value of any of the Goods or
any portion thereof, now owned or hereafter acquired; and
(iii) All inventory now owned or hereafter acquired by the
Company, including but not limited to, all raw materials, work in progress,
finished goods, merchandise, parts and supplies of every kind or
description relating to, located on or used in the operation of or in
connection with the Real Property, whether located at the Real Property or
elsewhere, together with all returns on accounts;
(b) All general intangibles relating to or used in connection with
the Property or any part thereof or in the ownership, occupancy, operation,
maintenance or leasing of the Property or any part thereof, and all amendments,
supplements, substitutions and renewals thereof, now owned or hereafter
acquired, including, without limitation:
(i) all contracts and agreements now or hereafter existing with
respect to the Property or the ownership, occupancy, operation, maintenance
or leasing of the Property or any part thereof (including, without
limitation, (A) insurance policies with respect to the Real Property or the
Goods, (B) all proceeds of and any unearned premiums on all policies
required under the Securities Purchase Agreement or otherwise carried by
the Company, and (C) contracts for the purchase or sale of the Real
Property or the Goods), and including, without limitation, the contracts
described on SCHEDULE II attached hereto and incorporated herein by this
reference;
(ii) all patents, copyrights, trademarks, tradenames and service
marks relating to the Property and all reissues, extensions or renewals
thereof and all licenses
thereof and all licenses to use, applications for and other rights to
copyrights, trademarks, tradenames and service marks relating to the
Property.
(iii) all governmental approvals pertaining to the Property to the
extent such governmental approvals can be assigned or subjected to security
interests under applicable law and all consents, licenses, permits,
authorizations and agreements and any other rights necessary for the
Property or to own, occupy, operate, maintain and lease any of the Property
or any part thereof;
(iv) all books, records, customer and supplier lists, and other
information in whatever form and however stored relating to the Property or
any part thereof;
(v) all goodwill in any way relating to the Property or any part
thereof;
(vi) all warranties, indemnities and guaranties with respect to
the Property or any part thereof; and
(vii) all claims arising thereunder and all rights to compel
performance of the terms of any of the foregoing;
(c) All architectural drawings, specifications and plans relating to
the Property or any part thereof and all operating, maintenance and repair
manuals, plans, specifications, drawings, schedules and similar papers relating
to the Property or any part thereof or necessary or useful for the ownership,
occupancy, leasing and maintenance of the Property or any part thereof, wherever
located, now owned or hereafter acquired;
(d) All data and information relating to or used in connection with
the Property or any part thereof, including, without limitation, patented and
unpatented inventions, trade secrets, know-how, techniques, engineering
information, construction information, operation information and other similar
information, now owned or hereafter acquired;
(e) All reciprocal easement agreements;
(f) All building and use permits issued by any governmental agency;
(g) All of the estate, interest or other claim or demand, which the
Company now has or may hereafter acquire, in and to the Real Property described
in this Security Agreement including, without limitation, all deposits made with
or other security given to utility companies by the Company with respect to the
Real Property and the improvements thereon, and all advance payments of
insurance premiums made by the Company with respect to the Property and claims
or demands relating to insurance;
(h) Insofar as permitted by applicable law, all licenses including,
but not limited to, any operating licenses, contracts, management contracts or
agreements, franchise
agreements, permits, authorizations or certificates required or used in
connection with the operation or maintenance of the Property;
(i) All damages, royalties and revenue of every kind, nature and
description whatsoever that the Company may be entitled to receive from any
person or entity owning or having or hereafter acquiring a right to the oil, gas
or mineral rights and reservations regarding the Real Property, with the right
in Secured Party to receive and receipt therefor and apply the same to the
Obligations secured hereby either before or after any default hereunder, and
Secured Party may demand, xxx for and recover any such payments but shall not be
required to do so;
(j) All accounts, instruments, documents and chattel paper now or
hereafter acquired or created by the Company; and
(k) All products or proceeds of the foregoing Collateral.
For purposes of this Security Agreement, the term "proceeds" includes, without
limitation, whatever is receivable or received when Collateral or proceeds are
sold, collected, exchanged, or otherwise disposed of, whether such disposition
is voluntary or involuntary, and includes, without limitation, all rights to
payment, including, without limitation, return premiums and insurance proceeds,
with respect to any insurance relating thereto (whether or not the Secured Party
is the loss payee thereof), any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the Collateral
and all rights to payment with respect to any cause of action affecting or
relating to the Collateral.
Section 2.3 OBLIGATIONS. The "Obligations" secured by this Security
Agreement shall consist of the following:
(a) Payment in full to the Secured Party and the Mortgage Noteholders
of all principal of and interest and premium, if any, due on the Mortgage Notes
from time to time outstanding (including, without limitation, any Mortgage Note
Make-Whole Amount), and of all other amounts payable under the Mortgage Note
Documents, and any modifications, extensions or renewals thereof (including,
without limitation, (i) modifications of the required principal, interest and/or
payment dates, deferring or accelerating said payment dates in whole or in part,
and/or (ii) modifications, extensions or renewals at a different rate of
interest, whether or not any such modification, extension or renewal is
evidenced by a new or additional promissory note or notes); and
(b) The payment, satisfaction, observance and performance of all
other debts, obligations, covenants, agreements, and liabilities of the Company
to the Secured Party and the Mortgage Noteholders arising out of, connected
with, or related to this Security Agreement, and the other Mortgage Note
Documents, and the transactions contemplated thereby (including, without
limitation, all interest, fees, charges, expenses, reasonable attorneys' fees
and reasonable accountants' fees); and
(c) With respect to each of the foregoing, whether now existing or
hereafter arising, voluntary or involuntary, whether or not jointly owed with
others, direct or indirect, absolute or contingent, liquidated or unliquidated,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all amendments, revisions or renewals
thereof.
Section 2.4 IMMEDIATE GRANT. The grant in Section 2.1 shall
constitute an immediate and present assignment by the Company to the Secured
Party of all rights of the Company to receive and to enforce the payment of the
full amount of all insurance proceeds, warranty, condemnation or requisition
payments or other payments of any kind for or with respect to any of the
Collateral or any part thereof, subject to the rights to rebuild, replace or
repair any Collateral or similar rights set forth in the Mortgage Note Documents
and the Deeds of Trust. The Secured Party shall exercise such rights and apply
such payments in accordance with the terms and conditions of this Security
Agreement, Mortgage Note Documents and the Deeds of Trust.
Section 2.5 APPOINTMENT OF THE SECURED PARTY AS ATTORNEY. The Company
hereby irrevocably constitutes the Secured Party the true and lawful attorney of
the Company with full power coupled with an interest to ask, require, demand,
receive, compound and give acquittance (in the name of the Company or otherwise)
for any and all monies and claims for monies due and to become due to the
Company as described in Section 2.4, to endorse any checks or other instruments
or orders in connection therewith and to file any claims or take any action or
institute any proceedings which the Secured Party may deem to be necessary or
advisable.
Section 2.6 FURTHER ASSURANCES; FINANCING STATEMENTS; NAME CHANGE.
(a) The Company hereby authorizes the Secured Party, at the Company's
expense, to file this Security Agreement or Uniform Commercial Code financing
statements with respect to the Secured Party's security interest in the
Collateral with any appropriate governmental office in order to perfect such
security interest in accordance with (i) the Uniform Commercial Code as adopted
in the state in which the Collateral is or will be located or (ii) any other law
applicable to establishing lien priority in and to the Collateral.
(b) At any time and from time to time, upon the request of the
Secured Party, the Company shall promptly and duly execute and deliver any and
all such further instruments and documents as may be specified in such request
and as are deemed by Secured Party to be necessary or desirable to perfect,
preserve or protect the mortgages, liens, security interests and assignments
created or intended to be created by the Security Documents, or to obtain for
the Secured Party the full benefit of the specific rights and powers herein and
therein granted, including, without limitation, the execution and delivery of
Uniform Commercial Code financing statements and continuation statements or
amendments with respect thereto, or similar instruments relating to the
perfection of the mortgages, liens, security interests or assignments created or
intended to be created by the Security Documents.
(c) The Company shall not change its name unless and until it has
(i) delivered written notice of such name change to Secured Party not less than
thirty (30) days
before such name change is to take effect, and (ii) caused to be completed and
executed by the Company, in connection with any such name change, such
instruments and documents as may be requested by Secured Party and as are deemed
by Secured Party to be necessary or desirable to perfect, preserve or protect
the mortgages, liens, security interests and assignments created or intended to
be created by the Security Documents, or to obtain for the Secured Party the
full benefit of the specific rights and powers herein and therein granted,
including, without limitation, the execution and delivery of Uniform Commercial
Code financing statements, continuation statements or amendments with respect
thereto, or similar instruments relating to the perfection of the mortgages,
liens, security interests or assignments created or intended to be created by
the Security Documents. All reasonable fees, costs and expenses in connection
with the foregoing shall be the sole responsibility of the Company.
Section 2.7 TERMINATION OF INTEREST IN COLLATERAL. The Secured Party
shall have no further interest in, or other right with respect to, the
Collateral, and no further right under this Security Agreement, when and if the
principal of, premium, if any, and interest on, all Mortgage Notes and all other
Obligations due and owing shall have been paid in full (other than contingent
obligations which are not claimed, due or liquidated but that, by their terms,
may survive the termination of this Security Agreement) whereupon the Secured
Party shall, upon the written request of the Company, execute and deliver to, or
as directed in writing by, the Company an appropriate instrument (in due form
for recording) and Uniform Commercial Code Termination Statements on form UCC-2
sufficient to release from the Lien of this Security Agreement the Collateral
and all other property subject therein.
Section 2.8 ADDITIONAL SECURITY. Without notice to or consent of the
Company, and without impairment of the Lien and rights created by this Security
Agreement and the other Security Documents, the Secured Party may accept from
the Company or from any other Person additional security for the obligations
secured hereby. Neither the giving of this Security Agreement nor the
acceptance of any such additional security shall prevent the Secured Party from
resorting first to such additional security, or first to the security created by
the Security Documents, or concurrently, to both, in any case without affecting
the Secured Party's Lien and rights under the Security Documents.
Section 2.9 LIMITATION ON REPRESENTATIONS AND WARRANTIES. THE SECURED
PARTY MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, (a) AS TO THE
TITLE, VALUE, CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE
OF THE COLLATERAL, OR ANY OTHER REPRESENTATION OF WARRANTY WITH RESPECT TO THE
COLLATERAL WHATSOEVER, (b) as to the validity or enforceability of this Security
Agreement, the other Security Documents, the Mortgage Notes or the other
Mortgage Note Documents, or (c) as to the correctness of any statement contained
in any thereof.
SECTION 3. DEFAULTS AND REMEDIES.
Section 3.1 REMEDIES UPON AN EVENT OF DEFAULT. Upon the occurrence of
an Event of Default and the acceleration of the Mortgage Notes pursuant to the
Securities Purchase Agreement, the Secured Party, without further notice to the
Company, at its option and in addition to all other rights and remedies
available to the Secured Party, may do any one or more of the following:
(i) proceed to protect and enforce the rights, privileges and remedies
granted to it by this Security Agreement and the Deeds of Trust by such judicial
proceedings as the Secured Party shall deem necessary or appropriate, either at
law, in equity, in bankruptcy or otherwise, whether for specific enforcement of
any covenant or agreement contained in this Security Agreement, or any other
Mortgage Note Document, or in aid of the exercise of any right, power, privilege
or remedy therein or herein granted;
(ii) Foreclose or otherwise enforce the Secured Party's security
interest in any manner permitted by law, or provided for in this Security
Agreement, and exercise at any time all rights and remedies of a secured party
under the Uniform Commercial Code in effect in the State of California, or for
any foreclosure of the Collateral provided under the Security Documents and sale
under any judgment or decree in any judicial proceeding, or to enforce any other
legal or equitable right or remedy granted or otherwise available to the Secured
Party hereunder or under the Mortgage Note Documents;
(iii) Enter onto property where any Collateral is located and take
possession thereof with or without judicial action;
(iv) Prior to the disposition of the Collateral, store, process,
repair or recondition it or otherwise prepare it for disposition in any manner
and to the extent the Secured Party deems appropriate and in connection with
such preparation and disposition, without charge, use any copyright, patent,
technical process permit, approval, license, consent or governmental approval
used or held by the Company;
(v) Demand, xxx for, collect or receive any money or property at any
time payable to or receivable by the Company on account of or in exchange for
any part of the Collateral;
(vi) Secure the appointment of a receiver without notice to the
Company;
(vii) Sell, lease, or otherwise dispose of any Collateral at one or
more public or private sales, whether or not such Collateral is present at the
place of sale, without assumption of any credit risk, for cash or credit or
future delivery, on such terms and in such manner as the Secured Party may
determine in its sole and complete discretion and in light of its own best
interests, with or without any previous demand on or notice to the Company or
advertisement of any such sale or other disposal (the Obligations being the
equivalent of cash for the purposes of such sale); and for the aforesaid
purposes, all notice of sale, advertisement, and demand, and any right or equity
of redemption otherwise required by, or available to the
Company under the law are hereby waived by the Company to the fullest extent
permitted by law;, other than as required by the Uniform Commercial Code; and in
any case where notice of any sale or disposition of any of the Collateral is
required by law, the Company hereby agrees that ten (10) days notice of such
sale is reasonable; the power of sale hereunder shall not be exhausted by one or
more sales, and the Secured Party may from time to time adjourn any sale to be
made hereunder; the Secured Party or any other Person may be the purchaser of
any or all of the Collateral so sold and thereafter hold the same absolutely
free from any claim or right of whatsoever kind, including any equity of
redemption, of the Company; to the extent permitted by law, the Company waives
all claims, damages and demands against the Secured Party arising out of the
repossession, retention or sale of the Collateral, except for claims based on
the gross negligence or wilful misconduct of the Secured Party; and
(viii) Take any other action and seek any other remedy available to a
secured party under the law.
Section 3.2 WAIVER OF APPRAISEMENT, VALUATION, ETC.. To the full
extent it may lawfully do so, the Company, for itself and for any other Person
who may claim through or under it, hereby (a) agrees that neither it nor any
such Person will set up, plead, claim or in any manner whatsoever take advantage
of, any appraisal, valuation, stay, moratorium, extension or redemption laws,
now or hereafter in force, or any rights of marshalling in the event of any sale
of the Collateral or any part thereof or any interest therein, (b) waives all
benefit or advantage of any such laws and waives and releases any and all such
rights and covenants not to hinder, delay or impede the exercise of any right or
remedy permitted herein or in the Deeds of Trust but to suffer and permit every
such right or remedy as though no such laws were in effect, (c) consents and
agrees that the Property and the Collateral may be sold by the Secured Party as
an entirety or in parts and (d) agrees that it will neither claim, demand or
otherwise be entitled to any credit against or deduction from the principal of
or premium, if any, or interest on the Mortgage Notes or any other sums which
may become payable under the terms of this Security Agreement or the Deeds of
Trust by reason of the payment of any tax, assessment or other municipal or
governmental charge or imposition on or relating to the Property or the
Collateral or any part thereof, nor claim or otherwise be entitled to any
deduction from the taxable or assessed value of the Property or the Collateral
or any part thereof by reason of this Security Agreement, the Deeds of Trust or
the Mortgage Notes.
Section 3.3 WAIVER OF MARSHALLING AND OTHER DEFENSES. The Company
hereby (a) waives any and all rights of marshalling and specifically agrees that
in the event of foreclosure, whether by action or advertisement, all of the
Collateral and all interests in the Collateral may, at the option of the Secured
Party, be sold together in a single sale, and (b) agrees that the Lien of the
Security Documents as to the interests of the Company will not be released,
impaired or subordinated by any amendment to or termination of any Debt
Document, any extension of time or waiver of right or remedy under any Debt
Document, or any other act, inaction or thing which, but for this provision,
would so release, impair or subordinate.
Section 3.4 REMEDIES CUMULATIVE. Each and every right, power and
remedy herein or in the other Mortgage Note Documents specifically given to the
Secured Party or otherwise in this Security Agreement shall be cumulative and
shall be in addition to every other right, power and remedy herein or in the
other Mortgage Note Documents specifically given or now or hereafter existing at
law, in equity or by statute or otherwise, and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time and as often and in such order as may be deemed expedient by
the Secured Party, and the exercise or the beginning of the exercise of any
right, power or remedy shall not be construed to be a waiver of the right to
exercise at the same time or thereafter any other right, power or remedy.
Secured Party shall exercise all such rights and remedies in a commercially
reasonable manner.
Section 3.5 DISCONTINUANCE OF PROCEEDINGS. If the Secured Party shall
have proceeded to enforce any right, power or remedy under this Security
Agreement or the other Security Documents by foreclosure, entry or otherwise,
and such proceedings shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Secured Party, then, and in every
such case, the Company and the Secured Party shall be restored to their former
positions and rights hereunder and under the other Security Documents with
respect to the Real Property and the Collateral, and all rights, powers and
remedies of the Secured Party shall continue as if no such proceedings had been
taken.
Section 3.6 COSTS AND EXPENSES, ATTORNEYS FEES, ETC. OF THE SECURED
PARTY. The Company shall pay all reasonable costs, fees and expenses of the
Secured Party, its agents and counsel in connection with the performance of its
duties hereunder and under the other Security Documents, including, without
limitation, the reasonable cost of any trustee's sale guaranty or other title
insurance coverage ordered in connection with any foreclosure proceedings
hereunder, and shall pay all taxes (except federal and state income taxes) or
other governmental charges or impositions imposed on the Secured Party by reason
of its interest in the Mortgage Notes, this Security Agreement, the other
Mortgage Note Documents, the Real Property or the Collateral. The Company shall
pay to the Secured Party on demand any reasonable costs and expenses, including
reasonable attorneys fees and expenses, paid or incurred by the Secured Party in
connection with the collection of any amount payable by the Company to the
Secured Party hereunder, whether or not any legal proceeding is commenced
hereunder and whether or not any Default or Event of Default shall have occurred
and is continuing, together with interest thereon at the Overdue Rate from the
date of payment or incurring by the Secured Party until paid by the Company.
Section 3.7 NO WAIVER, ETC. The failure of the Secured Party to
exercise or delay in exercising, or to insist on the strict performance of, any
right, remedy, power or privilege under this Security Agreement shall not impair
or operate as a waiver of any such right, remedy, power or privilege or a waiver
of any Default or Event of Default. The single or partial exercise of any
right, remedy, power or privilege hereunder by the Secured Party shall not
preclude any other or further exercise of the same or of any other right,
remedy, power or privilege. No waiver by the Secured Party of any Default or
Event of Default shall be deemed to be a waiver of any other or similar,
previous or subsequent Default or Event of Default or affect or alter this
Security Agreement or the other Mortgage Note Documents which shall
continue in full force and effect. By accepting payment of any amount secured
by the Security Documents after its due date, the Secured Party shall not be
deemed to waive its right either to require prompt payment when due of all other
amounts payable hereunder or under the other Security Documents or any other
Debt Document or to declare a default for failure to effect such prompt payment.
Section 3.8 COMPROMISE OF ACTIONS, ETC. Any action, suit or
proceeding brought by the Secured Party pursuant to any of the terms of this
Security Agreement, the other Mortgage Note Documents or otherwise, and any
claim made by the Secured Party hereunder or thereunder, may be compromised,
withdrawn or otherwise dealt with by the Secured Party upon notice to, but
without approval of, the Company.
Section 3.9 RIGHT OF THE SECURED PARTY TO PERFORM THE COMPANY'S
COVENANTS, ETC. If (a) the Company shall fail to make any payment or perform
any act which failure would constitute an Default or Event of Default, or
(b) any action or proceeding is commenced that materially and adversely affects
the Secured Party's interest in the Real Property or the Collateral or any part
thereof, the Secured Party with notice to, but without demand upon, the Company,
and without waiving or releasing any Obligation, Default or Event of Default,
may at any time thereafter make such appearances or such payment or perform such
act for the account and at the expense of the Company, and may enter upon the
Real Property for such purpose, and take all such action thereon as, in the
Secured Party's opinion, may be necessary or appropriate therefor, including,
without limitation, payment, purchase, contest or compromise of any Lien that in
the judgment of the Secured Party appears to be prior or superior to the Lien of
the Security Documents. No such entry and no such action shall be deemed an
eviction of any lessee of the Real Property, the Collateral or any part thereof.
All sums so paid by the Secured Party and all reasonable costs and expenses
(including, without limitation, reasonable attorneys fees and expenses) so
incurred, together with interest thereon at the Overdue Rate from the date of
payment or incurring, shall constitute additional Obligations secured by the
Security Documents and shall be paid by the Company to the Secured Party on
demand. The Secured Party shall not be liable for any damages resulting from
any such payment or action unless such damages shall be a consequence of willful
misconduct or gross negligence on the part of the Secured Party.
SECTION 4. THE COMPANY
Section 4.1 CERTAIN COVENANTS OF THE COMPANY.
(a) NO OTHER LIENS ON COLLATERAL. The Company warrants and
represents that except for Permitted Liens, it has not assigned or pledged, and
hereby covenants that except for Permitted Liens, and except as expressly
permitted by the Securities Purchase Agreement and the Deeds of Trust, it will
not assign or pledge, so long as this Security Agreement and the other Security
Documents shall remain in effect, any of its estate, right, title or interest in
the Collateral pledged and assigned or intended to be pledged or assigned by the
Security Documents to anyone other than the Secured Party. The Company will, in
its individual capacity and at its own cost and expense, promptly take such
action as may be necessary to discharge any such Lien on any of its estate,
right, title or interest in the
Collateral so pledged or assigned or intended to be pledged or assigned under
the Security Documents.
(b) PAYMENT OF MONIES TO THE SECURED PARTY. Promptly on receipt
thereof, the Company will transfer to the Secured Party any and all monies from
time to time received by it and constituting part of the Collateral or otherwise
assigned or pledged to the Secured Party under the Security Documents, in each
case for application by the Secured Party pursuant to this Security Agreement,
subject to the terms of the Mortgage Note Documents and the Deeds of Trust.
(c) NOTICES OF DEFAULT. The Company shall give prompt telex,
telegraphic, facsimile or telephonic notice (confirmed by certified mail, return
receipt requested) to the Secured Party of any Default or Event of Default of
which the Company shall have knowledge. The notice shall set forth in
reasonable detail the circumstances of such default known to the Company and
shall describe in reasonable detail the action the Company is taking or proposes
to take in respect thereof.
Section 4.2 THE COMPANY'S REPRESENTATIONS AND WARRANTIES. The Company
hereby confirms for the benefit of each Mortgage Noteholder that each of its
representations and warranties in the Securities Purchase Agreement was true and
correct when made and on the Closing Date thereunder.
SECTION 5. MISCELLANEOUS
Section 5.1 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights, powers
and remedies provided in this Security Agreement may be exercised only to the
extent that the exercise thereof does not violate any applicable provisions of
law and are intended to be limited to the extent necessary so that they will not
render this Security Agreement invalid, unenforceable or not entitled to be
recorded, registered or filed under the provisions of any applicable law. If
any term of this Security Agreement or any application thereof shall be invalid
or unenforceable, the remainder of this Security Agreement and any other
application of such term shall not be affected thereby.
Section 5.2 NO LEGAL TITLE TO COLLATERAL IN MORTGAGE NOTEHOLDERS. No
Mortgage Noteholder shall have legal title to any part of the Collateral. No
transfer, by operation of law or otherwise, of any Mortgage Note or other right,
title and interest of any Mortgage Noteholder in and to the Collateral or
hereunder shall operate to terminate the Security Documents or entitle any
successor or transferee of such Mortgage Noteholder to an accounting or to the
transfer to it of legal title to any part of the Collateral.
Section 5.3 BENEFITS OF SECURITY AGREEMENT. Nothing in this Security
Agreement or the other Security Documents, whether express or implied, shall be
construed to give to any Person other than the parties hereto and the Mortgage
Noteholders any legal or equitable right, remedy or claim under or in respect of
this Security Agreement or the other Security
Documents, and this Security Agreement and the other Security Documents shall be
held for the sole and exclusive benefit of the parties hereto and thereto and
the Mortgage Noteholders.
Section 5.4 NOTICES. Unless otherwise specifically provided herein,
all notices, requests, demands, instructions, consents and other communications
required or contemplated by the provisions hereof shall be in writing or by
telex or telegraph or facsimile (if by facsimile, confirmed by certified mail,
return receipt requested), and shall be deemed to have been given or made when
received (or upon rejection if receipt is rejected) if sent as required by
Section 17.1 of the Securities Purchase Agreement, or, if to any Mortgage
Noteholder not a party to the Securities Purchase Agreement, if sent to the
address of such Mortgage Noteholder appearing on the register or other record of
Mortgage Noteholders maintained pursuant to Section 8.1 of the Securities
Purchase Agreement.
Section 5.5 SEVERABILITY. Any provision of this Security Agreement
that is illegal, invalid, prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such illegality,
invalidity, prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such illegality, invalidity, prohibition or
unenforceability in any jurisdiction shall not of itself invalidate or render
unenforceable such provision in any other jurisdiction.
Section 5.6 AMENDMENTS; WAIVERS; MODIFICATIONS. No term or provision
of this Security Agreement or any Mortgage Note may be amended, modified,
supplemented, changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
amendment, modification, change, waiver, discharge or termination is sought; and
no such instrument shall be effective, unless a signed copy thereof shall have
been delivered to the Secured Party.
Section 5.7 COUNTERPARTS. This Security Agreement may be executed by
the parties hereto in separate counterparts and or any number of counterparts,
each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute but one and the same instrument.
Section 5.8 BINDING EFFECT; SUCCESSORS AND ASSIGNS. The terms and
provisions of this Security Agreement and the respective rights and obligations
of the parties hereunder and the Mortgage Noteholders shall be binding upon, and
inure to the benefit of, their respective permitted successors and assigns.
Section 5.9 CAPTIONS; REFERENCES; RULES OF CONSTRUCTION. The captions
in this Security Agreement are for convenience of reference only and shall not
define, affect or limit any of the terms or provisions hereof. Reference herein
to Sections, subsections, clauses, paragraphs, Exhibits or Schedules without
reference to the document in which they are contained are references to
Sections, subsections, clauses, paragraphs, Exhibits or Schedules of or to this
Security Agreement.
Section 5.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF CALIFORNIA. THIS SECURITY AGREEMENT HAS BEEN NEGOTIATED WITH REFERENCE
TO THE LAWS OF, AND IS BEING MADE AND DELIVERED IN, THE STATE OF CALIFORNIA.
Section 5.11 INTEGRATION. This Security Agreement, together with all
exhibits and schedules hereto, the other Security Documents, the Mortgage Notes
and the Mortgage Note Documents constitute the entire agreement among the
parties hereto pertaining to the subject matter hereof and supersedes all prior
agreements, understandings, negotiations and discussions, whether oral or
written, of the parties.
Section 5.12 DIRECTLY OR INDIRECTLY. Any provision in this Security
Agreement, or the other Security Documents, the Mortgage Notes and the Mortgage
Note Documents referring to action to be taken by any Person, or that such
Person if prohibited from taking, shall be applicable whether such action is
taken directly or indirectly by such Person.
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
The Company: GOLDEN STATE VINTNERS,
a California corporation
By
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Name:
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Title:
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