DEED OF TRUST/SECURITY AGREEMENT/FINANCING STATEMENT
(HEREINAFTER REFERRED TO AS THE "DEED OF TRUST")
THE STATE OF TEXAS
As of the 16th day of August, 2001, Stockton Feed and Milling, Inc. and Ranchers
Feed Yards, Inc. (hereinafter collectively referred to as "Grantor"), whose
mailing address is c/o Loch Harris, Inc. 8303 North Mopac, Suite A-101, Austin,
Texas 78759, in consideration of the debt and trust hereinafter mentioned, does
hereby GRANT, BARGAIN, SELL, TRANSFER, ASSIGN and CONVEY unto Paul Dionne,
Trustee, whose mailing address is P.O. Drawer 190, Fort Stockton, Texas 78735:
(i) the real property described on Exhibit A attached hereto;
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(ii) all improvements now or hereafter situated on such real property
inclusive of all goods which are fixtures, now or hereafter located in
and about such improvements;
(iii) all equipment, office furniture, appliances, rolling stock, and other
personal property now owned or hereafter acquired by Grantor and
constituting a part of the real property, together with all inventory,
accounts and notes receivable and intangibles; and
(iv) all proceeds of the above
(all of which are sometimes referred to collectively herein as the "Property").
TO HAVE AND TO HOLD the Property, together with the rights, privileges, and
appurtenances thereto, unto the said Trustee, and to his substitutes or
successors forever, Grantor does hereby bind itself, and Grantor's successors
and assigns to warrant and forever defend the Property unto the said Trustee,
his substitutes or successors and assigns forever, against the claim or claims
of all persons claiming or to claim the Property or any pat thereof, subject to
the Permitted Encumbrances (hereinafter defined).
This conveyance, however, is made in TRUST to secure payment of the indebtedness
evidenced by (a) that certain promissory note (the "Note") of even date
herewith, in the principal amount of $1,722,000.12 executed by Grantor and
payable to the order of Elton Holland, Jr. ("Beneficiary"), whose address is
10255 CR 303, Dublin, Texas 76446, such Note bearing interest as therein
specified, and with interest and principal being payable as therein specified.
The Note and this Deed of Trust were executed and delivered pursuant to the Loan
Agreement of even date herewith (the "Loan Agreement") between Grantor and
Beneficiary. Terms used herein but not defined shall have the meaning assigned
to such terms in the Loan Agreement.
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If Grantor performs all of the covenants and agreements herein contained, and if
Grantor makes prompt payment of all indebtedness secured hereby as the same
shall become due and payable, then this conveyance shall become null and void
and of no further force and effect, and this Deed of Trust shall be immediately
released, at the expense of Grantor, by the Beneficiary.
Grantor covenants and agrees as follows:
1. Title. That it is lawfully seized of the Property, and has the right to
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convey the same, and that the Property is free from all liens and encumbrances,
subject to: general real estate taxes on the Property for the current year,
zoning laws, regulations and ordinances of municipal and other governmental
authorities, if any, affecting the Property and any and all restrictions,
easements and other encumbrances of record affecting the Property, and all
matters that would be disclosed in a current, accurate ALTA/ACSM Land Title
Survey of the Property (collectively, the "Permitted Encumbrances").
2. Taxes, Assessments. To pay when due all taxes and assessments now
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existing or hereafter levied or assessed upon the Property.
3. Default, Foreclosure. Upon the occurrence of any one or more of the
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following events (individually a "Default" and collectively, "Defaults"):
(a) the failure of Grantor to pay any sum of money in accordance with
the Note or any part thereof, as it becomes due and payable, whether at the
scheduled due date thereof or when accelerated pursuant to any power to
accelerate, or otherwise and failure to cure same within ten (10) days after
written notice from Lender; or
(b) the failure of Grantor to timely and properly observe, keep or
perform any other covenant, agreement, warranty or condition required herein or
in any of the other Loan Documents and the failure of Grantor to cure such
default with thirty (30) days after written notice from Lender specifying such
default, provided that if such default or violation is susceptible of being
remedied, but such remedy cannot reasonably be accomplished within the initial
thirty (30) day cure period, the Default shall be deemed to have occurred so
long as Grantor is diligently pursuing such remedy.
Beneficiary may elect, after the giving of any required notice and expiration of
any applicable cure period set forth in the Loan Documents, to declare the
entire principal indebtedness hereby secured, with all interest accrued thereon
and all other sums hereby secured, immediately due and payable; and in the event
of default in the payment of said indebtedness when due or declared due, it
shall thereupon, or at any time thereafter, be the duty of the Trustee, or his
successor or substitute as hereinafter provided, at the request of Beneficiary
(which request is hereby conclusively presumed), to enforce this trust; and
after advertising the time, place and terms of sale of the above Property then
subject to the lien hereof, and after mailing and filing notices as required by
applicable law, as then amended, and after otherwise complying with that
statute, the Trustee shall sell the Property then subject to the lien hereof, at
public auction in accordance with such notices, on the first Tuesday in any
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month between the hours of nine o'clock A.M. and four o'clock P.M. Central
Standard Time, to the highest bidder for cash, selling all of the Property as an
entirety or in such parcels as the Trustee acting may elect, and make due
conveyance to the purchaser or purchasers, with general warranty binding
Grantor, and Grantor's successors and assigns; and out of the money arising from
such sale, the Trustee acting shall first pay all the expenses of the sale and
making the conveyance, and then pay to Beneficiary the full amount of principal,
interest and other charges due and unpaid on the Note at the time of
foreclosure, and then to all other indebtedness secured by the Property and then
subject to applicable law, rendering the balance of the sales price, if any, to
Grantor, and Grantor's successors or assigns; and the recitals in the conveyance
to the Purchaser or Purchasers shall be full and conclusive evidence of the
truth of the matters therein stated, and all prerequisites to said sale shall be
presumed to have been performed and such sale and conveyance shall be conclusive
against Grantor, and Grantor's successors and assigns.
4. Right to Purchase. Any Beneficiary may purchase the Property at
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foreclosure for its own account and may credit its pro rata portion of the
foreclosure bid against its own note, but (notwithstanding anything to the
contrary contained herein) no Beneficiary may purchase the Property at
foreclosure for the account of another Beneficiary and no Beneficiary may credit
the foreclosure bid against the note of another Beneficiary without having first
received specific written authority from the other Beneficiary.
5. Substitute Trustee. Beneficiary in any event is hereby authorized to
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appoint a substitute trustee, or a successor trustee, to act instead of the
Trustee named herein, without other formality than the designation in writing of
a substitute or successor trustee; and the authority hereby conferred shall
extend to the appointment of other successor and substitute trustees
successively until the indebtedness hereby secured has been paid in full, or
until the Property is sold hereunder, and each substitute and successor trustee
shall succeed to all of the rights and powers of the original trustee named
herein.
6. Possession. In the event any sale is made of the Property, or any
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portion thereof, under the terms of this Deed of Trust, Grantor, and Grantor's
successors and assigns, shall forthwith upon the making of such sale surrender
and deliver possession of the Property so sold to the Purchaser at such sale,
and, in the event of their failure to do so, they shall thereupon from and after
the making of such sale be and continue as tenants at will of such Purchaser,
and in the event of their failure to surrender possession of the Property upon
demand, the Purchaser, and the Purchaser's successors or assigns, shall be
entitled to institute and maintain an action for forcible detainer of the
Property in the Justice of the Peace Court in the Justice Precinct in which such
Property, or any part thereof, is situated or in such other appropriate court.
7. Condemnation; Insurance Proceeds. Beneficiary shall be entitled to
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receive any and all sums which may become payable to Grantor for the
condemnation of the Property, or any part thereof, for public or quasi-public
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use, or by virtue of private sale in lieu thereof, and any sums which may be
awarded or become payable to Grantor for damages caused by public works or
construction on or near the Property. Beneficiary shall be entitled to receive
and retain any and all proceeds which may become payable to Grantor as a result
of any casualty relating to the Property, unless Grantor agrees in writing with
Beneficiary to use said proceeds to repair or restore the Property.
8. Controlling Agreement. Nothing contained herein, or in the Note, shall
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ever entitle Beneficiary, upon the arising of any contingency whatsoever, to
receive or collect interest in excess of the highest rate allowed by the laws of
the State of Texas, the United States or any other applicable law on the
principal indebtedness hereby secured or on any money obligation hereunder, and
in no event shall Grantor be obligated to pay interest thereon in excess of such
rate.
9. Limitation on Interest. The parties hereto intend to conform strictly to
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the applicable usury laws. All agreements between Grantor (and any other party
liable for any part of the Note) and Beneficiary, whether now existing or
hereafter arising and whether written or oral, are expressly limited so that in
no event whatsoever, whether by reason of acceleration of the maturity of the
Note or otherwise, shall the interest contracted for, charged or received by
Beneficiary hereunder or otherwise exceed the maximum amount permissible under
applicable law. If from any circumstances whatsoever interest would otherwise
be payable to Beneficiary in excess of the maximum lawful amount, the interest
payable to Beneficiary shall be reduced automatically to the maximum amount
permitted under applicable law. If Beneficiary shall ever receive anything of
value deemed interest under applicable law which would, apart from this
provision, be in excess of the maximum lawful amount, the amount which would
have been excessive interest shall be applied to the reduction of the principal
amount owing on the Note in inverse order of maturity and not to the payment of
interest, or if such amount which would have been excessive interest exceeds the
unpaid principal balance of the Note, such excess shall be refunded to Grantor,
or to the maker of the Note or other evidence of indebtedness if other than
Grantor. All interest paid or agreed to be paid to Beneficiary shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full stated term, including any renewal or extension, of such
indebtedness so that the amount of interest on account of such indebtedness does
not exceed the maximum permitted by applicable law. The terms and provisions of
this section shall control and supersede every other provision of all existing
and future agreements between Grantor, the maker of the Note or other evidence
of indebtedness if other than Grantor, and Beneficiary.
10. Binding Effect. The covenants herein contained shall bind, and the
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benefits and advantages shall inure to, the respective heirs, executors,
administrators, personal representatives, successors, and assigns of the parties
hereto and shall be covenants running with the Property. The duties, covenants,
conditions, obligations, and warranties of Grantor in this Deed of Trust shall
be joint and several obligations of Grantor and, if more than one, of each party
named a Grantor hereinabove, and each such party's heirs, personal
representatives, successors and assigns. Each party who executes this Deed of
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Trust and each subsequent owner of the Property or any part thereof (other than
Beneficiary), covenants and agrees that it will perform, or cause to be
performed, each term, provision, covenant and condition of this Deed of Trust.
Words of any gender used in this Deed of Trust shall be held and construed to
include any other gender and words in the singular number shall be held to
include the plural, and vice versa, unless the context requires otherwise.
11. Limitations on Liability. The liability of Grantor for the payment of
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the Note and for the performance and observance of the covenants,
representations and warranties of Grantor contained in the Note and in this Deed
of Trust is limited in the manner, and subject to the exceptions to such
limitation, described in the Note, reference to which is hereby made for all
purposes.
12. Insurance/Governmental Action. Grantor agrees (a) to the extent
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available, to maintain property insurance with respect to the Property (listing
Beneficiary as a loss payee) and (b) notify Beneficiary of any actual or
threatened adverse governmental action which is filed or taken against the
Property.
13. Venue. Venue for any lawsuit related to this instrument or to the
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debt(s) or promissory note(s) secured hereby shall lie only in Travis County,
Texas and no place else.
14. Security Interest. It is understood and agreed that, by this
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instrument, Grantor in addition to fixing and creating a Deed of Trust lien upon
and against the real property interests herein described under subparagraph (i)
of Exhibit "A" hereto, also has created and granted to the Lender pursuant to
the Uniform Commercial Code of Texas a Security Interest in all property herein
described under subparagraph (iii) and that in the event of a foreclosure sale,
whether made by the Trustee or Substitute Trustee, or under the terms of this
Deed of Trust, or under judgment of a court, all of which real property herein
described, as well as all personal property described under said subparagraph
(iii) hereof may at the option of the Beneficiary be sold as a whole and it
shall not be necessary to have present at the place of sale the property or any
part thereof.
EXECUTED to be effective as of the date first written above.
GRANTOR
STOCKTON FEED AND MILLING, INC. RANCHERS FEED YARDS, INC.
By:______________________________ By:______________________________
Name:____________________________ Name:____________________________
Title:___________________________ Title:___________________________
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STATE OF TEXAS Sec.
Sec.
COUNTY OF TRAVIS Sec.
This instrument was acknowledged before me on the ___day of August 2001 by
_______________________________, the ________________________ of Stockton Feed
and Milling, Inc.
_______________________________________________
Notary Public in and for the State of Texas
STATE OF TEXAS Sec.
Sec.
COUNTY OF TRAVIS Sec.
This instrument was acknowledged before me on the ____ day of August 2001 by
_______________________, the __________________________ of Ranchers Feed Yards,
Inc.
_______________________________________________
Notary Public in and for the State of Texas
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