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EXHIBIT 10.17
DEED OF TRUST, SECURITY AGREEMENT
ASSIGNMENT OF LEASES AND RENTS AND FIXTURE FILING
THIS DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF LEASES
AND RENTS AND FIXTURE FILING (the "Deed of Trust"), made as of
the 17th day of September 1996 by PSF FINANCE L.P., a Delaware
limited partnership with a business address at ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Trustor"), to [ ],
with a business address in care of Lawyers Title Insurance
Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ (together with her successors and substitutes, the
"Trustee"), as trustee for the benefit of CHEMICAL BANK, a New
York banking corporation with a business address at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, as collateral agent (in such
capacity, the "Collateral Agent") for the benefit of the Secured
Parties (defined below) (together with its successors and
assigns, the "Beneficiary").
W I T N E S S E T H :
A. Reference is made to that certain Credit Agreement dated as of
September 17, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") by and among Trustor, Premium Standard Farms,
Inc., a Missouri corporation, as guarantor, the lenders from time to time party
thereto (the "Lenders") and Chemical Bank, as administrative agent for the
Lenders (in such capacity, the "Agent"), as Collateral Agent and as fronting
bank (in such capacity, the "Fronting Bank"). Terms used herein without
definition shall have the meanings ascribed to such terms in the Credit
Agreement. As used herein, the term "Secured Parties" shall mean (i) the
Lenders, (ii) the Agent, (iii) the Collateral Agent, (iv) the Fronting Bank,
(v) each counterparty to a Rate Protection Agreement or a Hedging Contract
entered into with Trustor if such counterparty was a Lender at the time such
Rate Protection Agreement or Hedging Contract was entered into, (vi) the
beneficiaries of each indemnification obligation undertaken by Trustor under
any Loan Document and (vii) the successors and permitted assigns of each of the
foregoing.
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B. Pursuant to the Credit Agreement, (i) the Lenders have loaned or
agreed to make to Trustor on a revolving basis revolving loans at any time and
from time to time in an aggregate principal amount at any time outstanding not
to exceed (together with the LC Exposure at such time) [$99,600,000] and (ii)
the Fronting Bank has issued and has agreed to issue Letters of Credit in an
aggregate face amount at any time outstanding not to exceed [$5,000,000], in
each case on the terms and subject to the conditions of the Credit Agreement.
C. The obligations of the Lenders to make Loans and of the Fronting
Bank to issue Letters of Credit under the Credit Agreement are conditioned
upon, among other things, the execution and delivery by Trustor of this Deed of
Trust, in the form hereof, to secure (a) the due and punctual payment of (i)
the principal of, premium, if any, and interest (including interest accruing
during the pendency of any bankruptcy, insolvency, receivership or other
similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by Trustor under the Credit Agreement in respect of
any Letter of Credit, when and as due, including payments in respect of
reimbursement of disbursements, interest thereon and obligations to provide
cash collateral, and (iii) all other monetary obligations, including fees,
costs expenses and indemnities whether primary, secondary, direct, contingent,
fixed or otherwise (including monetary obligations incurred during the pendency
of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding) of Trustor, now
existing or hereafter incurred under, arising out of or in connection with the
Credit Agreement, this Deed of Trust, the other Loan Documents and any Rate
Protection Agreements or Hedging Contracts, (b) the due and punctual
performance of all other covenants, agreements, obligations and liabilities of
Trustor under or pursuant to the Credit Agreement, this Deed of Trust, the
other Loan Documents and any Rate Protection Agreements or Hedging Contracts,
and (c) any and all additional advances made by the Secured Parties to protect
or preserve the Property (as hereinafter defined) or the security interest or
lien created hereby on the Property, or for taxes, assessments or insurance
premiums or for performance of any of Trustor's obligations hereunder or under
any other Loan Document, or for any other purpose provided herein or in any
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of the other Loan Documents (whether or not the original Trustor remains the
owner of the Property at the time of such advances) (all the monetary
obligations referred to in clauses (a) and (c) of this paragraph, being
referred to as the "Indebtedness"; the obligations referred to in clause (b) of
the paragraph and the Indebtedness are collectively referred to as the "Secured
Obligations").
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING AND IN ORDER TO
SECURE to Beneficiary (for the ratable benefit of the Secured Parties) the due
and punctual payment and performance of the Secured Obligations, with interest
thereon at the rate of interest specified herein, Trustor is executing and
delivering and taking the actions described in this Deed of Trust.
GRANTING CLAUSE A
Fee Estate
Trustor does, by these presents, GRANT, BARGAIN and SELL, CONVEY and
CONFIRM, TRANSFER, PLEDGE, WARRANT and ASSIGN to Trustee, those certain parcels
of real estate described in Exhibit A-1 (the "National Hog Farms Property"),
Exhibit A-2 (the "High Plains Ranch Property"), Exhibit A- 3 (the "▇▇▇▇▇▇
Property"), and Exhibit A-4 (the "Headquarters Property") attached hereto and
made a part hereof (each hereinafter referred to as, a "Fee Parcel" and
collectively referred to as, the "Land"), all buildings, structures and
improvements now or hereafter erected on the Land (hereinafter collectively
referred to as the "Improvements") and fixtures and goods which are, or are to
become, fixtures ("Fixtures") on or in the Land and/or Improvements, including,
without limitation, (i) houses, barns, sheds, warehouses, pumphouses,
bunkhouses, hothouses and all other buildings, (ii) grain bins, storage bins,
metal sheds and buildings, water towers, windmills, (iii) all towers, fences,
gates, and posts, (iv) all electric, water and gas lines, wiring, pipe and
equipment together with meters, transformers, switch boxes, fuse panels,
circuit breakers, timing devices, thermostats, and control valves, (v)
irrigation and drainage equipment of all types (other than portable irrigation
motors customarily towed by a motor vehicle) including, without limitation,
pipe, pumps, motors, gearheads, sprinkler systems, control valves, culverts,
and well casings, (vi) air conditioning
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and heating equipment including coils, compressors, ducts and heaters, (vii)
all wall to wall carpet, built-in refrigerators, stoves and other built-in
equipment and (viii) all additions, substitutions and replacements thereof.
The Land, Improvements and Fixtures are hereinafter collectively
referred to as the "Trust Premises". Each Fee Parcel and the Improvements and
Fixtures located thereon are hereinafter referred to as a "Trust Property".
GRANTING CLAUSE B
Further Property Conveyed
Trustor does by these presents further GRANT, BARGAIN and SELL, CONVEY
and CONFIRM, TRANSFER, PLEDGE, WARRANT and ASSIGN to Trustee all right, title
and interest of Trustor, whether now held or hereafter acquired, in and to:
(a) All interests or estates in the Trust Premises, both in
possession and expectancy, including, without limitation, any right of
homestead and dower.
(b) All property and rights, if any, which are by the express
provisions of this Deed of Trust required to be subjected to the lien
hereof and any additional property and rights that may from time
hereafter, by installation or writing of any kind, be subjected to the
lien hereof by Trustor or by anyone in Trustor's behalf.
(c) All rights in and to easements, common areas and access or
use rights over roads or rights-of-way or utility easements on
adjacent properties heretofore granted to Trustor and any
after-acquired title or reversion in and to any ways, roads, streets,
avenues, alleys or other property adjoining the Trust Premises.
(d) All materials ("Materials") intended for the construction,
reconstruction, alteration and repair of all buildings and
improvements now or hereafter erected or constructed on the Trust
Premises, all of which materials shall be deemed to be included as a
part of said Trust Premises immediately upon delivery thereof to said
Trust Premises.
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(e) All rents, profits, revenues, royalties, bonuses, rights
and benefits under any and all oil, gas or mineral rights of the Trust
Premises, or the property described in Granting Clause B, or any part
thereof, now existing or hereafter made, with the right to receive and
receipt therefor and apply the same to said Indebtedness after any
Event of Default hereunder, and Trustee or Beneficiary may demand, ▇▇▇
for and recover any such payments but shall not be required so to do.
(f) All judgments, awards of damages, settlements and other
compensation hereafter made resulting from condemnation proceedings or
the taking of the Trust Premises or the property described in Granting
Clause B or any part thereof under power of eminent domain, whether
permanent or temporary, or for any damage (whether caused by such
taking or otherwise) to said property or the improvements thereon or
any part thereof, or to any rights appurtenant thereto including
severance and consequential damage and any award for change of grade
of streets. Beneficiary is hereby authorized, on behalf and in the
name of Trustor, to execute and deliver valid acquittances for and to
appeal from any such judgments or awards. Beneficiary may apply all
such sums or any part thereof so received, after the payment of all
its expenses (including costs and attorneys' fees) on the Indebtedness
secured hereby in such manner as it elects, notwithstanding the fact
that the amount owing thereon may not then be due and payable or that
the said Indebtedness is otherwise adequately secured, or, at
Beneficiary's sole option, the entire amount or any part thereof so
received may be released to Trustor.
(g) All rights of Trustor to water for irrigation or other
purposes including but not limited to Trustor's riparian rights (if
any), rights to subsurface water, rights now or in the future obtained
in water available through irrigation projects whether public or
private, together with all rights and ownership in any water stock
owned in connection with a right to receive water for use upon or in
connection with the Trust Premises.
(h) All rights to receive, participate in, or otherwise secure
the benefits of any and all government programs, including but not
limited to the Conservation
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Reserve Program, set aside programs, payment in kind programs, and
government loans which are available for use in connection with the
Trust Premises.
(i) All rights to drain the Trust Premises including rights in
drainage districts (and the right to vote for and elect
representatives in such drainage districts) together with all rights
of Trustor in agricultural cooperatives for milling, ginning,
grinding, storage and marketing of crops harvested from the Trust
Premises.
All of the property, rights and interest described in the foregoing
Granting Clauses A and B being collectively hereinafter referred to as the
"Property" or the "Collateral".
TO HAVE AND TO HOLD the Property unto Trustee, her successors or
substitutes in this trust and to her or their successors and assigns, IN TRUST,
however, upon the terms, provisions and conditions herein set forth.
Trustor covenants and agrees with Trustee and Beneficiary as follows:
1. Title to the Property. (a) Trustor represents and covenants that
Trustor has good and indefeasible title in fee simple in the case of real
estate, and has the right to encumber the Property in the manner set forth
herein; that as of the date hereof the Property is free from liens and
encumbrances except for those liens and encumbrances which are expressly
permitted by Section 7.02 of the Credit Agreement (the "Permitted
Encumbrances") and will continue to be free from all liens and encumbrances
except for Permitted Encumbrances; and that Trustor does forever warrant and
will defend (subject to Permitted Encumbrances)its title to the Property, the
rights of Beneficiary under this Deed of Trust and the validity and priority of
the lien of this Deed of Trust against all claims of all persons and parties
whomsoever.
(b) Trustor represents and covenants that (i) the National Hog Farms
Property is approximately fourteen thousand (14,000) acres and is the same land
that is described on Exhibit A-1 hereto, (ii) the High Plains Ranch Property is
approximately thirty-one thousand (31,000) acres and is the same land that is
described on Exhibit A-2 hereto, (iii) the ▇▇▇▇▇▇ Property is approximately
seven
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thousand and ninety (7,090) acres and is the same land that is described on
Exhibit A-3 hereto, (iv) the Headquarters Property is approximately thirty one
(31) acres and is the same land that is described on Exhibit A-4 hereto and (v)
all the Improvements now or hereafter located on the Trust Premises are or will
be located entirely within the boundaries of the Land and do not or will not
encroach on any easements. The representations, covenants and warranties of
this Section 1 shall survive foreclosure of this Deed of Trust and shall run
with the land.
2. Payment of Indebtedness and Performance of Obligations. Trustor
shall promptly pay when due all amounts which shall become due on the
Indebtedness and shall keep and observe all covenants and agreements under the
Loan Documents and shall perform all obligations under the Loan Documents when
due thereunder, in all events, subject to applicable cure periods, if any.
3. Taxes and Assessments. (a) Except as otherwise provided in the
Credit Agreement, Trustor shall pay, before penalty might attach for
non-payment thereof, all taxes and assessments and all other charges whatsoever
levied upon or assessed or placed against the Property or arising in respect of
the operation, occupancy, use or possession thereof.
(b) In the event of the passage of any state, Federal, municipal or
other governmental law, order, rule or regulation subsequent to the date hereof
(i) deducting from the value of real property for the purpose of taxation any
lien or encumbrance thereof or in any manner changing or modifying the laws now
in force governing the taxation of this Deed of Trust or debts secured by
mortgages (other than laws governing income, franchise and similar taxes
generally) or the manner of collecting taxes thereon and (ii) imposing a tax to
be paid by any of the Secured Parties, either directly or indirectly, on this
Deed of Trust or any of the Loan Documents or to require any amount of taxes to
be withheld or deducted therefrom, Trustor will promptly notify Beneficiary of
such event. In such event Trustor shall (i) agree to enter into such further
instruments as may be reasonably necessary or desirable to obligate Trustor to
make any applicable additional payments, and (ii) Trustor shall make such
additional payments under such instruments. If Trustor is not permitted by law
to do that which is required by the preceding sentence, the Agent shall be
entitled to exercise any or all of its rights and
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remedies under the Loan Documents, including the right to accelerate the
Indebtedness.
(c) At any time that an Event of Default shall occur and be continuing
hereunder, or if required by any law applicable to Trustor or to any Secured
Party, Beneficiary shall have the right to direct Trustor to make an initial
deposit on account of real estate taxes and assessments and insurance premiums,
levied against or payable in respect of the Property in advance and thereafter
semi-annually, each such deposit (including the initial deposit) to be equal to
one-half of any such annual charges reasonably estimated by Beneficiary in
order to accumulate with Beneficiary sufficient funds to pay such taxes,
assessments and insurance premiums. Such amounts shall be held by Beneficiary
with interest and applied to the payment of the obligations in respect of which
such amounts were deposited. Nothing herein contained shall be deemed to
affect any right or remedy of Beneficiary under this Deed of Trust, including,
without limitation, its rights under Section 5 hereof.
4. Remedies Upon Sale or Encumbrance. Without limiting the
generality of the provisions of Section 13, if an Event of Default under the
Credit Agreement shall occur as a result of Trustor's failure to keep, observe
or perform any covenant, agreement or undertaking set forth in the Credit
Agreement relating to the sale, conveyance, alienation, encumbrance or leasing
of the Property or any interest therein or relating to the sale, alienation or
encumbrance of any interest in Trustor or any general partner of Trustor or
relating to the merger, consolidation or dissolution of Trustor or any general
partner of Trustor, then, such Event of Default shall also be an Event of
Default under this Deed of Trust.
5. Failure to Make Payments. In the event Trustor fails to pay any
taxes, assessments or other charges or liens or judgments as herein provided or
fails to maintain insurance as herein provided, Beneficiary, at its sole
option, may make such payment(s) or procure such insurance, and the amount paid
therefor shall be payable on demand, shall be secured by this Deed of Trust and
shall bear interest at the rate set forth in Section 2.07 of the Credit
Agreement (the "Default Interest Rate") until paid. Such payment by
Beneficiary shall not in any way restrict Beneficiary's other rights afforded
hereunder or by operation of law. Nothing contained herein shall be
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construed as requiring Beneficiary to make any payment or maintain any
insurance whatsoever pertaining to the subject Property.
6. Insurance. For so long as this Deed of Trust shall be in effect,
Trustor shall keep the Trust Premises insured against such risks, and in the
manner, required by Section 6.02 of the Credit Agreement.
7. Casualty and Condemnation. (a) Notwithstanding any other
provision of this Deed of Trust or the Credit Agreement, Beneficiary is
authorized, at its option (for the benefit of the Secured Parties), to collect
and receive, to the extent payable to any Loan Party, all insurance proceeds,
damages, claims and rights of action under any insurance policies with respect
to any casualty or other insured damage ("Casualty") to any portion of any
Trust Property (collectively, the "Insurance Proceeds"), unless the amount of
the related Insurance Proceeds is less than $250,000 and an Event of Default
shall not have occurred and be continuing. Trustor shall notify Beneficiary,
in writing, promptly after Trustor obtains notice or knowledge of any Casualty,
which notice shall set forth a description of such Casualty and Trustor's good
faith estimate of the amount of related damages. Subject to the foregoing
limitations, Trustor shall endorse and transfer or cause to be endorsed or
transferred any Insurance Proceeds received by it or any other Loan Party to
Beneficiary.
(b) Trustor will notify Beneficiary immediately upon obtaining
knowledge of the institution of any action or proceeding for the taking of any
Trust Property, or any part thereof or interest therein, for public or
quasi-public use under the power of eminent domain, by reason of any public
improvement or condemnation proceeding, or in any other manner (a
"Condemnation"). No settlement or compromise of any claim in connection with
any such action or proceeding shall be made without the consent of Beneficiary,
which consent shall not be unreasonably withheld. Beneficiary is authorized,
at its option (for the benefit of the Secured Parties), to collect and receive
all proceeds of any such Condemnation (in each case, the "Condemnation
Proceeds"). Trustor shall execute or cause to be executed such further
assignments of any Condemnation Proceeds as Beneficiary may reasonably require.
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(c) In the event of a Condemnation of all or substantially all of any
Trust Property (a "substantially all" Condemnation) (which determination shall
be made by Beneficiary in its reasonable discretion), unless Trustor shall have
notified Beneficiary in writing promptly after such Condemnation that it
intends to replace the Trust Property (and no Default or Event of Default shall
have occurred and be continuing at the time of such election), Beneficiary
shall apply the Condemnation Proceeds received as a result of such Condemnation
(less the reasonable costs, if any, incurred by Beneficiary in the recovery of
such Condemnation Proceeds, including reasonable attorneys' fees, other charges
and disbursements) to prepay the obligations under the Credit Agreement, with
any remaining Condemnation Proceeds being returned to Trustor. If Trustor
shall elect to replace the Trust Property as contemplated above, (i) the
replacement property shall be of utility or value comparable to that of the
replaced Trust Property and (ii) the insufficiency of any Condemnation Proceeds
to defray the entire expense of the related location, acquisition and
replacement of such replacement property shall in no way relieve Trustor of its
obligation to complete the construction of any replacement property if Trustor
shall have made such election and shall have acquired the related real
property.
(d) In the event of any Condemnation of any Trust Property, or any
part thereof (other than a Condemnation described in paragraph (c) above
(unless Trustor shall be permitted and shall have elected to replace the Trust
Property, as provided in paragraph (c) above) and subject to the provisions of
paragraph (f) below), Beneficiary shall apply the Condemnation Proceeds first,
in the case of a partial Condemnation, to the repair or restoration of any
integrated structure subject to such Condemnation or, in the case of a
"substantially all" condemnation, to the location of a replacement property,
acquisition of such replacement property and construction of the replacement
structures, and second, shall apply the remainder of such Condemnation Proceeds
(less the reasonable costs, if any, incurred by Beneficiary in the recovery of
such Condemnation Proceeds) to the obligations under the Credit Agreement, with
any remaining Condemnation Proceeds being returned to Trustor.
(e) In the event of any Casualty of less than 50% of the useable
square footage of the Improvements of any Trust Property, Trustor shall,
subject to the conditions contained in paragraph (f), restore the Trust
Property to
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substantially its same condition immediately prior to such Casualty. In the
event of any Casualty of greater than 50% of the useable square footage of the
Improvements of any Trust Property and so long as no Default or Event of
Default has occurred and is continuing, Trustor shall have the option to
either:
(i) restore the Trust Property to a condition substantially
similar to its condition immediately prior to such Casualty and
to invest the balance, if any, of any Insurance Proceeds in
equipment or other assets used in Trustor's principal lines of
business within 180 days after the receipt thereof, provided that
Trustor, pending such reinvestment, promptly deposits such excess
Insurance Proceeds in a cash collateral account established with
Beneficiary for the benefit of the Secured Parties, or
(ii) direct Beneficiary to apply the related Insurance Proceeds
to prepay obligations outstanding under the Credit Agreement,
with any remaining Insurance Proceeds being returned to Trustor.
Trustor agrees that any excess Insurance Proceeds that are not reinvested in
Trustor's principal lines of business as contemplated above will be applied to
prepay the obligations under the Credit Agreement.
If required to do so, Trustor shall make the election contemplated by
the immediately preceding paragraph by notifying Beneficiary promptly after the
earlier to occur of (A) five days after Trustor and its insurance carrier reach
a final determination of the amount of any Insurance Proceeds and (B) 30 days
after the occurrence of the Casualty. If Trustor shall be required or shall
elect to restore the Trust Property, the insufficiency of any Insurance
Proceeds to defray the entire expense of such restoration shall in no way
relieve Trustor of such obligation so to restore. In the event Trustor shall
be required to restore or shall notify Beneficiary of its election to restore,
Trustor shall diligently and continuously prosecute the restoration of the
Trust Property to completion. In the event of a Casualty where Trustor is
required to make the election set forth above and Trustor shall fail to notify
Beneficiary of its election within the period set forth above or shall elect
not to restore the Trust Property, Beneficiary shall (after being reimbursed
for all reasonable costs of recovery of such Insurance
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Proceeds) apply such Insurance Proceeds to prepay obligations outstanding under
the Credit Agreement. In addition, upon such prepayment, Trustor shall be
obligated to place the remaining portion, if any, of the Trust Property in a
safe condition that is otherwise in compliance with the requirements of
applicable Governmental Authorities and the provisions of this Deed of Trust
and the Credit Agreement.
(f) Except as otherwise specifically provided in this Section 7, all
Insurance Proceeds and all Condemnation Proceeds recovered by Beneficiary (A)
are to be applied to the restoration or replacement of any applicable Trust
Property (less the reasonable cost, if any, to Beneficiary of such recovery and
of paying out such proceeds, including reasonable attorneys' fees, other
charges and disbursements and costs allocable to inspecting the Work (as
defined below)) and (B) shall be applied by Beneficiary to the payment of the
cost of restoring or replacing the Trust Property so damaged, destroyed or
taken or of the portion or portions of the Trust Property not so taken (the
"Work") and (C) shall be paid out from time to time to Trustor as and to the
extent the Work (or the location and acquisition of any replacement of any
Trust Property) progresses for the payment thereof, but subject to each of the
following conditions:
(i) Trustor must promptly commence the restoration process or
the location, acquisition and replacement process (in the case of
a "substantially all" Condemnation) in connection with the Trust
Property;
(ii) the Work shall be in the charge of an architect or
engineer and before Trustor commences any Work, other than
temporary work to protect property or prevent interference with
business, Beneficiary shall have received the plans and
specifications and the general contract for the Work from
Trustor. The plans and specifications shall provide for such
Work that, upon completion thereof, the improvements shall (A) be
in compliance with all requirements of applicable Governmental
Authorities such that all representations and warranties of
Trustor relating to the compliance of the Trust Property with
applicable laws, rules or regulations in this Deed of Trust and
the Credit Agreement will be correct in all respects and (B) be
at least equal in value and general utility to the
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improvements that were on the Trust Property (or that were on
the Trust Property that has been replaced, if applicable) prior
to the Casualty or Condemnation, and in the case of a
Condemnation, subject to the effect of such Condemnation;
(iii) except as provided in (iv) below, each request for
payment shall be made on seven Business Days' prior notice to
Beneficiary and shall be accompanied by a certificate to be made
by such architect or engineer, stating (A) that all the Work
completed has been done in substantial compliance with the plans
and specifications, (B) that the sum requested is justly required
to reimburse Trustor for payments by Trustor to, or is justly due
to, the contractor, subcontractors, materialmen, laborers,
engineers, architects or other persons rendering services or
materials for the Work (giving a brief description of such
services and materials) and that, when added to all sums
previously paid out by Beneficiary, does not exceed the value of
the Work done to the date of such certificate;
(iv) each request for payment in connection with the
acquisition of replacement Trust Property (in the case of a
"substantially all" Condemnation) shall be made on 30 days' prior
notice to Beneficiary and, in connection therewith, (A) each such
request shall be accompanied by a copy of the sales contract or
other document governing the acquisition of the replacement
property by Trustor and a certificate of Trustor stating that the
sum requested represents the sales price under such contract or
document and the related reasonable transaction fees and expenses
(including brokerage fees) and setting forth in sufficient detail
the various components of such requested sum and (B) Trustor
shall (I) in addition to any other items required to be delivered
under this Section 7, provide Beneficiary with such opinions,
documents, certificates, title insurance policies, surveys and
other insurance policies as it may reasonably request and (II)
take such other actions as Beneficiary may reasonably deem
necessary or appropriate (including actions with respect to the
delivery to Beneficiary of a first priority Mortgage with respect
to such real property for the ratable benefit of the Secured
Parties);
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(v) each request shall be accompanied by waivers of lien
satisfactory to Beneficiary covering that part of the Work for
which payment or reimbursement is being requested and, if
required by Beneficiary, by a search prepared by a title company
or licensed abstractor or by other evidence satisfactory to
Beneficiary, that there has not been filed with respect to the
Trust Property any mechanics' or other lien or instrument for the
retention of title in respect of any part of the Work not
discharged of record or bonded to the reasonable satisfaction of
Beneficiary;
(vi) there shall be no Default or Event of Default that has
occurred and is continuing;
(vii) the request for any payment after the Work has been
completed shall be accompanied by a copy of any certificate or
certificates required by law to render occupancy of the
improvements being rebuilt, repaired or restored legal; and
(viii) after commencing the Work, Trustor shall continue to
perform the Work diligently and in good faith to completion in
accordance with the approved plans and specifications.
Upon completion of the Work and payment in full therefor, Beneficiary will
disburse to Trustor the amount of any Insurance Proceeds or Condemnation
Proceeds then or thereafter in the hands of Beneficiary on account of the
Casualty or Condemnation that necessitated such Work to be applied (x) to
prepay obligations outstanding under the Credit Agreement, with any excess
being returned to Trustor or (y) to be reinvested in equipment or other assets
used in Trustor's principal lines of business within 180 days after the receipt
thereof, provided that Trustor, pending such reinvestment, promptly deposits
such amounts in a cash collateral account established with Beneficiary for the
benefit of the Secured Parties.
(g) Notwithstanding any other provisions of this Section 7, if Trustor
shall have elected to replace a Trust Property in connection with a
"substantially all" Condemnation as contemplated in paragraph (c) above, all
Condemnation Proceeds held by Beneficiary in connection therewith shall be
applied to prepay obligations outstanding under this Agreement if (i) Trustor
notifies Beneficiary that it does not intend to replace the Trust Property,
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(ii) a Responsible Officer of Trustor shall not have notified
Trustor in writing that Trustor has acquired or has entered into a binding
contract to acquire land upon which it will construct the replacement
property within six months after the related Condemnation or (iii) Trustor
shall have not notified Beneficiary in writing that it has begun construction
of the replacement structures within one year after the related Condemnation.
(h) Nothing in this Section 7 shall prevent Beneficiary from applying
at any time all or any part of the Insurance Proceeds or Condemnation Proceeds
to (i) the curing of any Default under the Credit Agreement or (ii) the payment
of any of the obligations under the Credit Agreement after the occurrence and
during the continuance of an Event of Default.
8. Preservation of Property. (a) Trustor shall keep the Improvements
now or hereafter erected on the Land in good repair and condition and shall
provide all utility services necessary for the operation and preservation of
the Property. Trustor shall commit or permit no waste and in no event shall
Trustor do any act or thing which would unduly impair or depreciate the value
of the Property. Trustor shall not abandon the Property. Trustor shall comply
with all present and future laws, all ordinances and regulations and
requirements of any governmental body applicable to the Property and to the
occupation and operation thereof and all recorded and unrecorded agreements
affecting the Property. Trustor shall obtain and maintain all licenses
authorizations, permits and/or approvals necessary for the ownership, and
operation of the property and the construction of improvements on the Land.
Trustor shall conform to the standards of good husbandry and shall, at all
times, act so as to minimize erosion and depletion of the soil. Trustor shall
utilize available water in conformance with current agricultural practices so
as to avoid excessive depletion of available water supplies.
(b) Without otherwise limiting Trustor's covenant not to commit or
permit waste, Trustor shall not (a) remove or permit the removal of sand,
gravel, topsoil or timber (other than caliche), (b) engage in borrow pit
operations, (c) use or permit the use of the Trust Premises as a land fill or
dump, (d) request or permit a change in zoning or land use classification or
(e) transfer or permit the transfer of any crop allotment or crop basis as the
same relates to the Trust Premises.
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9. Right to Inspect. Beneficiary, or its agents, shall have the
right, at all reasonable times, to enter upon the Trust Premises for the
purposes of inspection thereof and of the other Property without thereby
becoming liable to Trustor or any person in possession holding under Trustor;
provided, however, Beneficiary shall give Trustor notice prior to any such
inspection.
10. Protection of Beneficiary's Security. If Trustor fails to perform
any of the covenants and agreements contained in this Deed of Trust or if any
action or proceeding is commenced which does or may adversely affect the
Property or any portion thereof or the interest of Trustor, Trustee or
Beneficiary therein, or the title of Trustor thereto, or if Beneficiary shall
be made a party to any such action or proceeding, including a bankruptcy
proceeding in which Trustor or the then owner of the Property is a debtor, then
the Beneficiary, at its sole option, may perform such covenants and agreements,
defend against and/or investigate such action or proceeding, obtain appraisals
and take such other action as Beneficiary deems necessary to protect
Beneficiary's interest. Beneficiary shall be the sole judge of the legality,
validity and priority of claims, liens, encumbrances, taxes, assessments,
charges and premiums paid by it and of the amount necessary to be paid in
satisfaction thereof. All amounts disbursed or incurred by Beneficiary
pursuant to this Section, including but not limited to reasonable attorney's
fees, disbursements and other charges shall be payable upon demand, shall bear
interest from the date of disbursement or the date incurred at the Default
Interest Rate and shall become an additional amount secured hereunder.
Beneficiary shall, at its option, be subrogated to any encumbrance, lien, claim
or demand, paid or discharged by Beneficiary, and to all the rights and
securities for the payment thereof and any such subrogation rights shall be
additional and cumulative security for this Deed of Trust. Nothing contained
in this Section shall require Beneficiary to incur any expense or do any act
hereunder and Beneficiary shall not be liable to Trustor for any damages or
claims arising out of action taken or not taken by Beneficiary pursuant to this
Section.
11. Forbearance Not a Waiver. Any delay or forbearance by any Secured
Party in exercising any right or remedy hereunder or otherwise afforded by law
or equity shall not be a waiver of or preclude the exercise of any such right
or remedy or any other right or remedy hereunder
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or at law or equity. The procurement of insurance or the payment of taxes or
other liens or charges by Beneficiary shall not be a waiver of Beneficiary's
rights hereunder. Beneficiary's receipt of any awards, proceeds or damages
under Section 7 hereof shall not operate to cure or waive default by Trustor.
12. Trustor Not Released; Priority Subsequent to Modification.
Extension of time for payment or modification of amortization of sums secured
by this Deed of Trust granted by any Secured Party to any successor in interest
of Trustor shall not operate to release, in any manner, the liability of the
original Trustor and Trustor's successors in interest. Beneficiary shall not
be required to commence proceedings against any such successor and the Agent
and the Lenders may or may not refuse to extend time for payment or otherwise
modify amortization of the sums secured by this Deed of Trust by reason of any
demand made by the original Trustor and Trustor's successors in interest. Any
agreement hereafter made by Trustor and any Secured Party relative and pursuant
to this Deed of Trust shall be superior to the rights of the holder of any
intervening lien or encumbrance.
13. Default. (a) It shall be an Event of Default under this Deed of
Trust if any Event of Default (as therein defined) shall exist pursuant to the
Credit Agreement.
(b) Upon the occurrence and during the continuance of any Event of
Default, the Agent may declare immediately due and payable all Indebtedness and
the liens and security interests evidenced hereby shall be subject to
foreclosure in any manner provided for herein or provided for by law as the
Beneficiary may elect.
14. Waiver; Homestead and Separate Tracts. Trustor acknowledges that
the Property has been offered to Trustee as a single economic unit, and has
been valued as such by the Collateral Agent and the Lenders for the purpose of
appraising the security furnished thereby. Trustor, for itself and for all
others claiming through or under it, hereby irrevocably waives and relinquishes
(to the extent permitted by applicable law) all benefit from, and agrees to
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never plead or take advantage of, any and all present and future laws,
regulations or decisions, in every jurisdiction, state or federal, relating to:
(a) homestead, dower, curtesy or other similar exemptions;
(b) any requirement that the real estate mortgaged and
encumbered hereby be sold as separate tracts or units in event of
foreclosure hereof and Trustor hereby authorizes and empowers
Trustee, in such event, to sell the Trust Premises in one tract
or otherwise, at its sole option, anything in this Deed or Trust
to the contrary notwithstanding;
(c) the valuation or appraisement of the Property prior to any
sale thereof;
(d) any stay, moratorium or extension of the time of any sale
of the Property;
(e) marshalling of assets;
(f) any right or remedy which Trustor may have or be able to
assert by reason of the provisions of Chapter 34 of the Business
and Commerce Code of the State of Texas, as now or hereafter in
effect, and any other laws with respect to the rights and
remedies of sureties; and
(g) redemption of the Property, or any part thereof, after any
sale.
To the extent not prohibited by law, the right of Beneficiary to
foreclose on and sell all or any part of the Property shall not be affected or
impaired by the purported "cure" of any Event of Default.
15. Separate Estates. As an inducement to the Collateral Agent, the
Agent and the Lenders to enter into the Credit Agreement and for other good and
valuable consideration to Trustor, in hand paid, receipt whereof is hereby
acknowledged, Trustor does hereby waive for itself, its heirs, executors,
successors and assigns, in the event of foreclosure of this Deed of Trust or
any other Security Document, any equitable right, otherwise available to
either, in respect to marshalling of assets hereunder or under any other
Security Document so as to require the
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separate sales of the fee estate and any leasehold estate encumbered hereby or
by any other Security Document or to require Beneficiary to exhaust its
remedies as against either the fee estate or any such leasehold estate,
encumbered hereby or by any other Security Document, before proceeding against
the other and further, in the event of such foreclosure, Trustor does hereby
expressly consent to and authorize, at the option of the Beneficiary, the sale,
either separately or together, of the fee estate and any such leasehold estate,
encumbered hereby or by any other Security Document, or the merger, prior to
sale, of any such leasehold estate into the fee estate in order that the fee
estate may be sold free and clear of any such leasehold estate.
16. Additional Security Documents. This Deed of Trust shall
constitute a security agreement with respect to and Trustor hereby grants the
Beneficiary a security interest in all Fixtures, Materials and other personal
property included in the Property. For this purpose, Trustor is the debtor and
Beneficiary is the secured party. The address of Beneficiary from which
information concerning the security interest granted hereby may be obtained is
the address for Beneficiary set forth on the first page of this Deed of Trust.
The recording of this Deed of Trust shall constitute a "fixture filing" within
the meaning of Sections 9.313 and 9.402 of the Texas Business and Commerce
Code. Trustor, upon request by Beneficiary, will execute, acknowledge and
deliver to Beneficiary a security agreement, financing statement or other
similar security instruments, in form satisfactory to Beneficiary, covering all
Fixtures, Materials and other personal property of any kind whatsoever owned by
Trustor which is necessary or useful to the operation of the Trust Premises and
concerning which there may be any doubt whether the title to same has been
conveyed by or a security interest perfected by this Deed of Trust under the
laws of the State of Texas and Trustor will further execute, acknowledge and
deliver any financing statement, affidavit, continuation statement or
certificate or other document as Beneficiary may request in order to correct or
perfect, preserve, maintain, continue and extend the security interest under
and the priority of such security instrument and/or the encumbrance granted by
this Deed of Trust. Trustor further agrees to pay to Beneficiary, on demand,
all costs and expenses incurred by Beneficiary (including reasonable attorneys'
fees) in connection with the preparation, execution, recording, filing and
refiling of any such document and in connection
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with the exercise of any right or remedy hereunder. Upon the occurrence and
during the continuance of an Event of Default, Beneficiary may exercise its
rights of enforcement with respect to the Fixtures, Materials and other
personal property included in Property under the Texas Business and Commerce
Code.
17. No Water Sales. Trustor shall not enter into contracts to supply
water to third persons or other properties without the prior written consent of
Beneficiary. No such contract shall subject Trustor or any successor in
interest to regulation and governance by a public body or as a public utility
or water company.
18. Additional Filings. Trustor shall, as may be requested by
Beneficiary from time to time, execute such documents and assist in filing or
recording thereof as may be necessary in the sole judgment of Beneficiary to
perfect the lien granted hereunder upon water rights, water and/or subsidy or
other governmental programs offered in connection with the Trust Premises
and/or Property.
19. Further Assurances. Upon demand by Beneficiary, Trustor will, at
the cost of Trustor and without expense to Beneficiary, do, execute,
acknowledge and deliver all such further acts, deeds, conveyances, mortgages,
assignments, notices of assignment, transfers and assurances as Beneficiary
shall from time to time reasonably require for the better assurance, conveying,
assigning, transferring and confirming unto Beneficiary the property and rights
hereby conveyed or assigned or intended now or hereafter so to be, or which
Trustor may be or may hereafter become bound to convey or assign to
Beneficiary, or for carrying out the intention or facilitating the performance
of the terms of this Deed of Trust or for filing, registering or recording this
Deed of Trust and, on demand, Trustor will also execute and deliver and hereby
appoints Beneficiary as its true and lawful attorney-in-fact and agent, for
Trustor and in its name, place and stead, in any and all capacities, to execute
and file, to the extent it may lawfully do so, one or more financing
statements, chattel mortgages or comparable security instruments reasonably
requested by Beneficiary to evidence more effectively the lien hereof upon the
personal property and to perform each and every act and thing requisite and
necessary to be done to accomplish the same.
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20. Additions to Property. All right, title and interest of Trustor
in and to all extensions, improvements, betterments, renewals, substitutes and
replacements of, and all additions and appurtenances to, the Property hereafter
acquired by or released to Trustor or constructed, assembled or placed by
Trustor upon the Trust Premises and all conversions of the security constituted
thereby, immediately upon such acquisition, release, construction, assembling,
placement or conversion, as the case may be, and in each such case without any
further deed, mortgage, conveyance, assignment or other act by Trustor, shall
become subject to the lien and security interest of this Deed of Trust as fully
and completely and with the same effect as though now owned by Trustor and
specifically described in the grant of the Property above, but at any and all
times Trustor will execute and deliver to Beneficiary any and all such further
assurances, deeds, mortgages, conveyances or assignments thereof as Beneficiary
may reasonably require for the purpose of expressly and specifically subjecting
the same to the lien and security interest of this Deed of Trust.
21. Assignment of Leases and Rents. In order to provide a source of
future payment of the Indebtedness, Trustor does hereby absolutely and
unconditionally assign, transfer and set over to the Beneficiary all right,
title and interest of Trustor in, to and under the lease agreements which now
or hereafter cover or affect all or any portion of the Trust Premises, together
with all renewals, extensions, modifications, amendments, subleases and
assignments of such lease agreements (such lease agreements, renewals,
extensions, modifications, amendment, subleases and assignments herein called
the "Leases") (provided that the foregoing assignment shall not impair or
diminish the obligation of Trustor under the provisions of the Leases nor shall
the obligation be imposed upon Trustee or Beneficiary) and all of the rents,
income, receipts, revenues, issues, profits and other sums of money
(hereinafter collectively called the "Rent") that are now or at any time
hereafter become due and payable to Trustor under the terms of any Leases, or
any part thereof, or arising or issuing from or out of the Leases or from or
out of the Trust Premises or any part thereof, including but not limited to
minimum rents, additional rents, percentage rents, deficiency rents and
liquidated damages following default, security deposits, advance rents, all
proceeds payable under any policy of insurance covering loss of rents resulting
from untenantability caused by destruction or damage to the Trust Premises, and
all of Trustor's rights to recover monetary
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amounts from any lessee in bankruptcy including, without limitation, rights of
recovery for use and occupancy and damage claims arising out of lease defaults,
including rejections, under any applicable bankruptcy law, including
specifically the immediate and continuing right to collect and receive each and
all of the foregoing. Until receipt from the Beneficiary of notice of the
occurrence of an Event of Default (hereinafter called a "Notice of Default"),
each lessee under the Leases may pay Rent directly to Trustor and Trustor shall
have the right to receive such Rent provided that Trustor shall hold such Rent
as a trust fund to be applied as required by the Beneficiary and Trustor hereby
covenants so to apply the Rent, before using any part of the same for any other
purposes. Upon receipt from the Beneficiary of a Notice of Default, each
lessee under the Leases is hereby authorized and directed to pay directly to
the Beneficiary all Rent thereafter accruing and the receipt of Rent by the
Beneficiary shall be a release of such lessee to the extent of all amounts so
paid. The receipt by a lessee under the Leases of a Notice of Default shall be
sufficient authorization for such lessee to make all future payments of Rent
directly to the Beneficiary and each such lessee shall be entitled to rely on
such Notice of Default and shall have no liability to Trustor for any Rent paid
to the Beneficiary after receipt of such Notice of Default. Rent so received
by the Beneficiary for any period prior to foreclosure under this Deed of Trust
or acceptance of a deed in lieu of such foreclosure shall be applied by the
Beneficiary to the payment (in such order as the Beneficiary shall determine)
of: (a) all expenses of managing the Trust Premises, including but not limited
to the salaries, fees and wages of a managing agent and such other employees as
the Beneficiary may deem necessary or desirable; all expenses of operating and
maintaining the Trust Premises, including but not limited to all taxes,
assessments, charges, claims, utility costs and premiums for insurance, and the
cost of all alterations, renovations, repairs or replacements; and all expenses
incident to taking and retaining possession of the Trust Premises and/or
collecting the Rent due and payable under the Leases; and (b) the Indebtedness
secured by this Deed of Trust, principal, interest, attorneys' and collection
fees and other amounts, in such order as Beneficiary in its sole discretion may
determine. In no event will the assignment pursuant to this Section reduce the
Indebtedness evidenced by the Loan Documents or otherwise secured by this Deed
of Trust, except to the extent, if any, that Rent is actually received by the
Beneficiary and applied upon or after said receipt to such
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indebtedness in accordance with the preceding sentence. Without impairing its
rights hereunder, the Beneficiary may, at its option, at any time and from time
to time, release to Trustor Rent so received by the Beneficiary or any part
thereof. As between Trustor and the Beneficiary, and any person claiming
through or under Trustor, other than any lessee under the Leases who has not
received a Notice of Default pursuant to this Section, the assignment contained
in this Section is intended to be absolute, unconditional and presently
effective and the provisions of this Section for notification of lessees under
the Leases upon the occurrence of an Event of Default are intended solely for
the benefit of each such lessee and shall never inure to the benefit of Trustor
or any person claiming through or under Trustor, other than a lessee who has
not received such notice. It shall never be necessary for the Beneficiary to
institute legal proceedings of any kind whatsoever to enforce the provisions of
this Section. The Beneficiary shall not be deemed to have taken possession of
the Trust Premises except on the exercise of its option to do so, evidenced by
its demand and overt act for such purpose.
22. Miscellaneous Rights of Beneficiary. Any personal property of
Trustor remaining upon the Trust Premises after the Trust Premises have been
possessed or occupied by Beneficiary following foreclosure of this Deed of
Trust or any deed in lieu of foreclosure (whether or not included in the
Property) shall be conclusively presumed to have been abandoned by Trustor.
Beneficiary shall in no way incur any liability or obligation to Trustor by
reason of any action which Beneficiary in its sole discretion chooses to take
with respect to said personal property. In no event shall Beneficiary be
required to take any affirmative action in preserving, protecting or otherwise
overseeing the deployment or storage of said personal property, nor shall
Beneficiary incur any liability to Trustor of said personal property because of
failure to take such affirmative action with respect thereto.
23. Beneficiary's Remedies Cumulative. All remedies of Beneficiary
and the other Secured Parties are distinct and cumulative to any other remedy
and right under this Deed of Trust, any other Loan Document or afforded by law
or equity and may be exercised concurrently or independently and as often as
the occasion therefor arises. If the Secured Obligations are now or hereafter,
in whole or in part, further secured by other deeds of trust, chattel deeds of
trust, pledges, contracts of guaranty, security
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agreements or otherwise, Beneficiary may, at its sole option, exhaust any one
or more of said securities and the security hereunder, either concurrently or
independently, and in such order as it may determine.
24. Successors and Assigns; Joint and Several Liability; Captions.
The covenants and agreements herein contained shall bind, and the rights
hereunder shall inure to, the successors and assigns of the Secured Parties and
Trustee and the permitted successors and assigns of Trustor. Wherever used,
the singular number shall include the plural, the plural the singular, and the
use of any gender shall be applicable to all genders. If Trustor is comprised
of more than one person and/or entity, all covenants and agreements of Trustor
shall be joint and several. The captions and headings of the paragraphs of
this Deed of Trust are for convenience only and are not to be used to interpret
or define the provisions hereof.
25. Appointment of Receiver. Trustor hereby grants to Beneficiary the
right, upon the occurrence and during the continuance of an Event of Default,
to secure and receive a court appointed Receiver (the "Receiver") for the
Property or any part thereof. THE APPOINTMENT OF THE RECEIVER MAY BE UPON EX
PARTE MOTION BY BENEFICIARY WITHOUT NOTICE TO TRUSTOR. Trustor hereby waives
any right to notice for the appointment of a Receiver, but Trustor reserves the
right to contest, at a later date, the existence of Trustor's default. The
Receiver shall have the right to immediately take possession of the Property or
any part thereof, collect rents, engage a farm, ranch or livestock management
company to oversee daily activities, hire attorneys and accountants, expend
funds for the preservation of the Property, sell livestock, crops or other
products produced on the Trust Premises and otherwise control the Property
under direction of the court. All costs and expenses of the Receiver,
including fees and commissions payable to the Receiver and the Receiver's
attorney's and accountant's fees, shall be paid by Trustor, and such repayment
is secured by this Deed of Trust.
26. Litigation, Collection and Bankruptcy Fees and Expenses. (a)
Beneficiary may appear in or defend any action or proceeding at law or in
equity purporting to affect the security hereof, and in such event Beneficiary
shall be allowed and paid and Trustor hereby agrees to pay (to the full extent
permitted by law) all costs, charges and expenses, including costs of evidence
of title and
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attorney's fees, in a reasonable sum, incurred in any such action or proceeding
in which Beneficiary may appear or defend.
(b) Upon the commencement of any proceedings to collect the
Indebtedness or disbursements secured hereby, or any part thereof, by
foreclosure of this Deed of Trust or otherwise, there shall become due and
Trustor agrees to pay (to the full extent permitted by law) all costs, fees and
expenses of such proceeding, including a reasonable sum as and for attorneys'
fees, as an additional Indebtedness hereunder and it is agreed that this Deed
of Trust shall stand as security therefor. It is also agreed that Trustor will
pay any amount Beneficiary may incur or pay for any abstract or continuation of
abstract of title, certificate of insurance or title or other evidence of
title, subsequent to this date, on any of the Trust Premises and this Deed of
Trust shall secure payment thereof.
27. Continuing Liability of Trustor. Without affecting the liability
of Trustor or any other person for payment of any Indebtedness secured hereby
or for performance of any obligation contained herein, and without affecting
the rights of the Secured Parties with respect to any security not expressly
released in writing, the Secured Parties, as applicable, may at any time and
from time to time, and without notice or consent:
(a) release any person liable for payment of all or any part
of the Indebtedness or for performance of any Secured Obligation;
(b) make any agreement extending the time or otherwise
altering the terms of payment of all or any part of the
Indebtedness, or any other terms of the Loan Documents, or
modifying or waiving any Secured Obligation, or subordinating,
modifying or otherwise dealing with the lien or charge hereof;
(c) exercise or refrain from exercising or waive any right any
Secured Party may have;
(d) accept additional security of any kind;
(e) release or otherwise deal with any property, real or
personal, securing the Secured Obligations, including all or any
part of the Property herein described; and
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(f) consent to the creation of any easement affecting the
Trust Premises or any covenants restricting the use or occupancy
of the Trust Premises.
28. Inspection of ASCS Records. Trustor hereby grants to Beneficiary,
its officers and employees and Beneficiary's successors and assigns, the right
to inspect and copy any and all records, reports, applications, forms and
correspondence in the office of the United States of America, Department of
Agriculture, Agricultural Stabilization & Conservation Service ("ASCS") which
relate to Trustor or the Trust Premises.
29. Trustee's Sale on Default. (a) Upon the occurrence and during
the continuance of an Event of Default hereunder, Trustee, her successor or
substitute, is authorized and empowered and it shall be her special duty at the
request of the Beneficiary to sell the Trust Premises or any part thereof
situated in the State of Texas at the courthouse of any county in the State of
Texas in which any part of the Trust Premises is situated, at public vendue to
the highest bidder for cash between the hours of 10 o'clock a.m. and 4 o'clock
p.m. on the first Tuesday in any month after having given notice of such sale
in accordance with the statutes of the State of Texas then in force governing
sales of real estate under powers conferred by deed of trust. Any sale made by
Trustee hereunder may be as an entirety or in such parcels as the Beneficiary
may request, and any sale may be adjourned by announcement at the time and
place appointed for such sale without further notice except as may be required
by law. The sale by Trustee of less than the whole of the Trust Premises shall
not exhaust the power of sale herein granted, and Trustee is specifically
empowered to make successive sale or sales under such power until the whole of
the Trust Premises shall be sold; and, if the proceeds of such sale of less
than the whole of the Trust Premises shall be less than the aggregate of the
Indebtedness secured hereby and the expense of executing this trust as provided
herein, this Deed of Trust and the lien hereof shall remain in full force and
effect as to the unsold portion of the Trust Premises just as though no sale
had been made; provided, however, that Trustor shall never have any right to
require the sale of less than the whole of the Trust Premises but the
Beneficiary shall have the right, at its sole election, to request Trustee to
sell less than the whole of the Trust Premises. As among the various counties
in which items of the Trust Premises may be situated, sales in such counties
may be conducted in any
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order that the Trustee may deem expedient; and any one or more of such sales
may be conducted in the same month, or in successive or different months, as
the Trustee may deem expedient. After each sale, Trustee shall make to the
purchaser or purchasers at such sale good and sufficient conveyances in the
name of Trustor, conveying the property so sold to the purchaser or purchasers
in fee simple with special warranty of title, and shall receive the proceeds of
said sale or sales and apply the same as herein provided. Payment of the
purchase price to Trustee shall satisfy the obligation of purchaser at such
sale therefor, and such purchaser shall not be responsible for the application
thereof. The power of sale granted herein shall not be exhausted by any sale
held hereunder by Trustee or her substitute or successor, and such power of
sale may be exercised from time to time and as many times as the Beneficiary
may deem necessary until all of the Trust Premises has been duly sold and all
secured indebtedness has been fully paid. In the event any sale hereunder is
not completed or is defective in the opinion of the Beneficiary, such sale
shall not exhaust the power of sale hereunder and the Beneficiary shall have
the right to cause a subsequent sale or sales to be made hereunder. Any and
all statements of fact or other recitals made in any deed or deeds given by
Trustee or any successor or substitute appointed hereunder as to nonpayment of
the indebtedness secured hereby, or as to the occurrence of any Event of
Default, or as to the Beneficiary having declared all of such indebtedness to
be due and payable, or as to the request to sell, or as to notice of time,
place and terms of sale and of the properties to be sold having been duly
given, or as to the refusal, failure or inability to act of Trustee or any
substitute or successor, or as to the appointment of any substitute or
successor trustee, or as to any other act or thing having been duly done by the
Beneficiary or by such Trustee, substitute or successor, shall be taken as
prima facie evidence of the truth of the facts so stated and recited. Trustee,
her successor or substitute, may appoint or delegate any one or more persons as
agent to perform any act or acts necessary or incident to any sale held by
Trustee, including the posting of notices and the conduct of sale, but in the
name and on behalf of Trustee, her successor or substitute. Any persons,
including any Secured Party, may purchase at the sale.
(b) Upon the occurrence and during the continuance of an Event of
Default hereunder, Beneficiary shall have the right to proceed with foreclosure
of the liens and security
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interests evidenced hereby without declaring the entire Indebtedness due, and
in such event any such foreclosure sale may be made subject to the unmatured
part of the Indebtedness; and any such sale shall not in any manner affect the
unmatured part of the Indebtedness, but as to such unmatured part, this Deed of
Trust shall remain in full force and effect just as though no sale had been
made. The proceeds of any such sale shall be applied as provided in paragraph
(b) of Section 31 except that the amount paid under subparagraph "SECOND"
thereof shall be applied only to the matured portion of the Indebtedness and
any proceeds of such sale in excess of such matured portion shall be applied to
installments of principal of and interest on the Loans in the inverse order of
maturity. Any number of sales may be made hereunder without exhausting the
right of sale for any unmatured part of the Indebtedness.
(c) In the event there is a foreclosure sale hereunder and at the time
of such sale Trustor or Trustor's heirs, devisees, representatives, successors
or assigns or any other persons claiming any interest in the Trust Premises by,
through or under Trustor are occupying or using the Trust Premises, or any part
thereof, each and all shall immediately become tenant from day-to-day,
terminable at the will of either landlord or tenant, at a reasonable rental per
day based upon the value of the property occupied, such rental to be due daily
to the purchaser. In the event the tenant fails to surrender possession of
said property upon demand, the purchaser shall be entitled to institute and
maintain an action for forcible entry and detainer of said property in the
Justice of the Peace Court in the Justice Precinct in which such property, or
any part thereof, is situated.
30. Appointment of Substitute Trustee. Without consent of or notice
to Trustor, Beneficiary has the absolute right and power, whether with or
without cause, to remove Trustee and/or appoint one or more substitute Trustees
to act in the place of Trustee or a substitute Trustee without any formality
other than by a document executed by Beneficiary alone, without the joinder or
approval of the Secured Parties or any other Person. Such appointment or
removal need not be filed of record. Following an appointment of a substitute
Trustee by Beneficiary, the substitute Trustee shall have all rights, powers,
benefits, indemnities and authority herein granted to Trustee in this Deed of
Trust.
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31. Option to Foreclose. (a) Upon the occurrence and during the
continuance of any Event of Default hereunder, Beneficiary shall have the
option and reserves the right to foreclose this Deed of Trust in the manner
provided by law for the foreclosure of mortgages on real property.
(b) After any foreclosure sale of all or any of the Trust Premises,
Trustee or Beneficiary shall receive the proceeds of sale, no purchaser shall
be required to see to the application of the proceeds and Trustee or
Beneficiary shall apply the proceeds of the sale and any other sums that then
may be held by Trustee or Beneficiary under this Deed of Trust as follows:
FIRST, to the payment of the costs and expenses of such sale,
including compensation to Trustee or to Beneficiary's attorneys
and agents, and of any judicial proceedings wherein the same may
be made, and of all expenses, liabilities and advances made or
incurred by Beneficiary under this Deed of Trust, together with
interest at the Default Interest Rate on all advances made by
Beneficiary, including all taxes or assessments (except any
taxes, assessments or other charges subject to which the Trust
Premises shall have been sold) and the cost of removing any
Permitted Encumbrance (except any Permitted Encumbrance subject
to which the Trust Premises was sold);
SECOND, to Beneficiary for the distribution to the Secured
Parties for the satisfaction of the Indebtedness owed to the
Secured Parties; and
THIRD, to Trustor, its successors or assigns, or as a court of
competent jurisdiction may otherwise direct.
Beneficiary shall have absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Deed of Trust.
32. Acknowledgement of Trustor. Trustor understands and acknowledges
that (a) this document is a deed of trust and not a mortgage, and (b) the power
of sale provided for in this deed of trust provides different rights and
obligations to Trustor than a mortgage in the event of a default or breach of
obligation.
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33. Release of Lien. (a) If Trustor shall have paid the Indebtedness
and shall have kept and performed all of its obligations hereunder and under
the Loan Documents and the Lenders' commitment to make Loans under the Credit
Agreement has expired and no Letters of Credit are outstanding and the Issuing
Bank's commitment to issue Letters of Credit has expired, then Beneficiary
shall deliver to Trustor, at Trustor's expense, all such documents, in
recordable form, that shall be reasonably necessary to release this Deed of
Trust; otherwise, it shall remain in full force and effect. The release may be
for the benefit of "the person or persons entitled thereto".
(b) Upon any sale, transfer or other disposition of the Trust Premises
or any part thereof that is permitted under the Credit Agreement, the
Beneficiary shall, at the Trustor's expense, execute and deliver to the Trustor
such documents as the Trustor shall reasonably request to evidence the release
of the Trust Premises or any part thereof from the lien and security interest
granted hereby; provided, however, that at the time of such request and such
release, (i) no Event of Default shall have occurred and be continuing, (ii)
the Trustor shall have delivered to the Beneficiary, at least ten Business Days
prior to the date of the proposed release, a written request for release
(describing the terms of the sale or transfer or other disposition in
reasonable detail, including the price thereof and any expenses in connection
therewith, together with a form of release for execution by the Beneficiary and
a certification by the Trustor to the effect that the transaction is in
compliance with the Loan Documents and as to such other matters as the
Beneficiary may reasonably request) and (iii) the proceeds of any such sale,
transfer or other disposition are applied in accordance with the Credit
Agreement.
34. Notice. Any notice from Beneficiary or Trustee to Trustor
hereunder shall be deemed to have been given by Beneficiary or Trustee and
received by Trustor when mailed to Trustor by certified mail, personally
delivered to Trustor, deposited with a bonded air courier service for express
delivery to Trustor or telecopied to Trustor at the address stated above, to
the attention of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, (if by telecopy to (▇▇▇) ▇▇▇-▇▇▇▇) or at such
other address or telecopier number as Trustor may designate, in writing;
provided that, service of a notice required by Tex. Property Code Section
51.002 shall be considered complete when the requirements of that statute are
met. Any notice from
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Trustor to Beneficiary or Trustee under this Deed of Trust shall be deemed to
have been given by Trustor and received by Beneficiary or Trustee, as the case
may be, when received by such person at its address stated above (and with
respect to Beneficiary, to the attention of _____________) or at such other
address as such person may have designated to Trustor.
35. Governing Law; Severability; Usury. (a) This Deed of Trust shall
be governed by and construed in accordance with the internal law of the State
of Texas. In the event any provision or clause of this Deed of Trust conflicts
with applicable law, such conflict shall not affect other provisions of this
Deed of Trust which can be given effect without the conflicting provisions and,
to this end, the provisions of the Deed of Trust are declared to be severable.
(b) The Secured Parties intend to contract in strict compliance with
applicable usury law from time to time in effect. All agreements between the
Trustor and the Secured Parties whether now existing or hereafter arising and
whether written or oral, are expressly limited so that in no contingency or
event whatsoever, whether by reason of acceleration of the maturity of the
Indebtedness or otherwise shall the amount paid or agreed to be paid to the
Secured Parties for the use, forbearance or detention of the Indebtedness or
for the performance or payment of any covenant or obligation contained herein
or in any other instrument evidencing, securing or pertaining to the
Indebtedness, exceed the maximum amount that may be lawfully charged under
applicable law from time to time in effect (the "Maximum Rate"). If from any
circumstances whatsoever fulfillment of any provision hereof or of any such
other document, at the time performance of such provision shall be due, shall
involve exceeding the Maximum Rate, then, the terms of Section 11.09 of the
Credit Agreement shall apply.
36. Possession. Upon the occurrence of an Event of Default, the
Beneficiary (either in person or by agent with or without bringing on any
action or proceeding or by a receiver appointed by court and without regard to
the adequacy of its security) is authorized prior or subsequent to the
institution of any foreclosure proceedings to enter upon the Trust Premises, or
any part thereof, and to take possession of the Trust Premises and of all
books, records and accounts relating thereto and to exercise without
interference from Trustor any and all rights which Trustor
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has with respect to the management, possession, operation, protection or
preservation of the Trust Premises, including the right to engage a farm ranch
or livestock management company to oversee daily activities, sell livestock,
crops or other products produced on the Trust Premises, rent the Trust Premises
for the account of Trustor and to deduct from such rents and any other income
from the Trust Premises all costs, expenses and liabilities of every character
incurred by the Beneficiary in collecting such rents and in managing,
operating, maintaining, protecting or preserving the Trust Premises and to
apply the remainder of such rents and any other income from the Trust Premises
on the Indebtedness secured hereby in such manner as the Beneficiary may elect.
All such costs, expenses and liabilities incurred by the Beneficiary in
collecting such rents and in managing, operating, maintaining, protecting or
preserving the Trust Premises, if not paid out of rents as hereinabove
provided, shall constitute a demand obligation owing by Trustor and shall bear
interest from the date of expenditure until paid at the Default Interest Rate,
all of which shall constitute a portion of the Indebtedness. If necessary to
obtain the possession provided for above, the Beneficiary may invoke any and
all legal remedies to dispossess Trustor, including specifically one or more
actions for forcible entry and detainer, trespass to try title and restitution.
In connection with any action taken by the Beneficiary pursuant to this Section
36, the Beneficiary shall not be liable for any loss sustained by Trustor
resulting from any failure to let the Trust Premises, or any part thereof, or
from any other act or omission of the Beneficiary in managing the Trust
Premises unless such loss is caused by the willful misconduct or gross
negligence (BUT NOT THE NEGLIGENCE) of the Beneficiary, nor shall the
Beneficiary be obligated to perform or discharge any obligation, duty or
liability under any lease agreement covering the Trust Premises or any part
thereof or under or by reason of this instrument or the exercise of rights or
remedies hereunder. Trustor shall and does hereby agree to indemnify the
Beneficiary for, and to hold the Beneficiary harmless from, any and all
liability, loss or damage which may or might be incurred by the Beneficiary
under any such lease agreement or under or by reason of this Deed of Trust or
the exercise of rights or remedies hereunder and from any and all claims and
demands whatsoever which may be asserted against the Beneficiary by reason of
any alleged obligations or undertakings on its part to perform or discharge any
of the terms, covenants or agreements contained in any such lease agreement.
Should the Beneficiary incur any such liability, the amount
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thereof, including costs, expenses and reasonable attorney's fees, shall be
secured hereby and Trustor shall reimburse the Beneficiary therefor immediately
upon demand. Nothing in this Section 36 shall impose any duty, obligation or
responsibility upon the Beneficiary for the control, care, management or repair
of the Trust Premises, nor for the carrying out of any of the terms and
conditions of any such lease agreement; nor shall it operate to make the
Beneficiary responsible or liable for any waste committed on the Trust Premises
by the tenants or by any other parties or for any dangerous or defective
condition of the Trust Premises, OR FOR ANY NEGLIGENCE IN THE MANAGEMENT,
UPKEEP, REPAIR OR CONTROL OF THE TRUST PREMISES RESULTING IN LOSS OR INJURY OR
DEATH TO ANY TENANT, LICENSEE, EMPLOYEE OR STRANGER. Trustor hereby assents
to, ratifies and confirms any and all actions of the Beneficiary with respect
to the Trust Premises taken under this Section 36.
37. Liability and Indemnification of Trustee. TRUSTEE SHALL NOT BE
LIABLE FOR ANY ERROR OF JUDGMENT OR ACT DONE BY TRUSTEE IN GOOD FAITH, OR BE
OTHERWISE RESPONSIBLE OR ACCOUNTABLE UNDER ANY CIRCUMSTANCES WHATSOEVER
(INCLUDING TRUSTEE'S NEGLIGENCE), EXCEPT FOR TRUSTEE'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. Trustee shall have the right to rely on any instrument,
document or signature authorizing or supporting any action taken or proposed to
be taken by her hereunder, believed by her in good faith to be genuine. All
moneys received by Trustee shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received, but need not be
segregated in any manner from any other moneys (except to the extent required
by law), and Trustee shall be under no liability for interest on any moneys
received by her hereunder. Trustor will reimburse Trustee for, and indemnify
and save her harmless against, any and all liability and expenses (including
reasonable attorneys' fees) which may be incurred by her in the performance of
her duties hereunder. The foregoing indemnity and other agreements shall not
terminate upon release, foreclosure or other termination of this Deed of Trust.
38. Future Advances. This Deed of Trust is given to secure, among
other things, the Loans and Letters of Credit and shall secure not only
presently existing indebtedness in respect of the Loans and Letters of Credit,
but also any and all other indebtedness which may hereafter be owing by Trustor
in respect of future advances of the Loans and Letters of Credit, whether such
advances are
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obligatory or to be made at the option of the Lenders or the Fronting Bank, to
the same extent as if such future advances were made on the date of the
execution of this Deed of Trust. The lien of this Deed of Trust with respect
to any future advances, modifications, extensions, and renewals referred to
herein and made from time to time, shall have the same priority to which this
Deed of Trust otherwise would be entitled as of the date this Deed of Trust is
executed and recorded without regard to the fact that any such future advance,
modification, extension, or renewal may occur after the Deed of Trust is
executed.
39. No Partnership. Notwithstanding anything to the contrary
contained herein or otherwise (a) the relationship between the Trustor and the
Beneficiary hereunder and otherwise shall be deemed, construed and treated by
the Trustor and the Beneficiary for all purposes to be solely that of
debtor/creditor; (b) the various consent, approval and other rights afforded to
the Beneficiary under this Deed of Trust have been granted and designed solely
to protect the value of the Trust Premises and to assure the Trustor's payment
of the Indebtedness and all of such rights as are customarily granted lenders
in a secured lending transactions; (c) the Trustor and the Beneficiary hereby
expressly disclaim any sharing of liabilities, losses, costs or expenses with
respect to the ownership or operation of all or any portion of the Trust
Premises, or otherwise; and (d) the terms contained herein are not intended by
the Trustor and the Beneficiary and shall not for any purpose be deemed,
construed or treated by the Trustor and the Beneficiary so as (i) to create a
partnership or joint venture between the Beneficiary and the Trustor or between
the Beneficiary and any other party, or (ii) to cause the Beneficiary to be or
become liable in any way for the debts and obligations of the Trustor
(including, without limitation, any losses attributable to the Trustor's
operation of the Trust Premises) or any other party.
40. Section 26.02 Notice. IN ACCORDANCE WITH SECTION 26.02 OF THE
TEXAS BUSINESS AND COMMERCE CODE, THIS DEED OF TRUST AND THE OTHER DOCUMENTS
EVIDENCING, SECURING OR PERTAINING TO ALL OR ANY PORTION OF THE INDEBTEDNESS
AND OTHER SECURED OBLIGATIONS REPRESENT THE FINAL AGREEMENT BETWEEN THE TRUSTOR
AND THE SECURED PARTIES AS TO THE SUBJECT MATTER THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF SUCH PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN SUCH PARTIES.
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IN TESTIMONY WHEREOF, Trustor has executed this Deed of Trust the day
and year first above written.
PSF FINANCE L.P., a Delaware
limited partnership,
by ▇▇▇▇▇▇▇▇ FARM, INC., a
Missouri corporation,
General Partner,
by
__________________________
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, )
) ss.:
COUNTY OF NEW YORK, )
This instrument was acknowledged before me on , 1996
by of ▇▇▇▇▇▇▇▇ Farms, Inc., a Missouri corporation, on
behalf of said corporation, acting in its capacity as general partner of PSF
Finance L.P., a Delaware limited partnership.
__________________________________
Notary Public, State of New York
__________________________________
(printed name)
My commission expires:
______________________