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HomeMy WebLinkAbout1995-06-27; Industrial Development Authority; 003 Exhibit 8; Security Agreementa- m SECURITY AGREEMENT Loan NO THIS SECURITY AGREEMENT (this llAgreementlm) is made as of the first day of July, 1995, between CIP LIMITED, L.P., a California Limited Partnership, (mlDebtorlr), and FIRST INTERSTATE BANK OF CALIFORNIA, a California corporation, (Wecured Partylu) , acting as Trustee under that certain Indenture (IIIndenturel~), dated July 1, 1995, between First Interstate Bank of California and Industrial Development Authority of the City of Carlsbad, California, is issuer^^) . FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1 . Definitions . All terms used herein which are defined in that certain Loan Agreement, dated July 1, 1995, (the llLoan Agreementti) between Debtor, as borrower, and Issuer, shall have the same meaning herein unless the context requires otherwise. Pursuant to the Indenture, the rights of the Issuer under the Loan Agreement were assigned to the Secured Party. 2. Creation of Security Interest. Debtor hereby grants to Secured Party a security interest in and to all personal property in which Debtor now or hereafter owns or acquires any interest or right, including, without limitation leased personal property and the personal property described in Exhibit B hereto and by this reference incorporated herein and which are now or hereafter located on or used or useful in the construction, operation, use or occupancy of the Project (as defined in the Loan Agreement) or the real property described in Exhibit A hereto and by this reference incorporated herein (the llPropertyl1), and all insurance proceeds from any policy of insurance covering any of the aforesaid property now or hereafter acquired by Debtor (such personal property and insurance proceeds are hereinafter collectively called IICollateralIl) , for the purposes of securing: (a) payment of all amounts due under the Loan Agreement, and all modifications, extensions, renewals and replacements thereof; (b) payment of all sums advanced by Secured Party to protect the Collateral, with interest thereon at the Default Rate (as defined in the Loan Agreement) ; (c) payment of all indebtedness of Debtor, or its successors or assigns, to Secured Party evidenced by a promissory note or notes or other instruments or agreements reciting that they are secured hereby; and (d) performance of every obligation, covenant and agreement of Debtor contained herein and in the Loan Agreement and in any other loan agreement, promissory note or other agreement now or hereafter executed by Debtor which recites that performance of the obligations thereunder is secured hereby. 3. Warranties, Representations andcovenants of Debtor. To induce Secured Party to accept this Security Agreement, Debtor hereby represents, warrants and covenants as follows: (a) Except for the security interest granted hereby and the liens of other security agreements expressly subordinated and subject to the lien of this Agreement, Debtor is, and as to portions of the Collateral to be acquired after the date hereof will be, the sole owner of the Collateral, free from any adverse lien, security interest, or adverse claim of any lA01/792?2.2 6/1/95 1 kind whatsoever. Debtor will notify Secured Party of and will defend the Collateral against all claims and demands of all persons at any time claiming the same or any interest therein. (b) The Collateral is not used or bought for personal, family or household purposes. (c) Except as otherwise provided in the Loan Agreement, the tangible Collateral will be kept on or at the Property and Debtor will not, without the prior written consent of Secured Party, remove the Collateral therefrom except such portions or items of Collateral which are consumed or worn out in ordinary usage, all of which shall be promptly replaced by Debtor with property of similar nature and of equal or greater value. (d) At the request of Secured Party, Debtor will execute one or more financing statements and fixture filings pursuant to the Uniform Commercial Code of California, in form satisfactory to Secured Party, and will pay the cost of filing the same in all public offices wherever filing is deemed by Secured Party to be necessary or desirable. (e) Debtor's principal place of business is at the address set forth in the Loan Agreement. Debtor does not do business under any trade name or fictitious business name other than CIP, LIMITED, L.P., a California Limited Partnership. Debtor will immediately notify Secured Party in writing of any change in its place of business or the adoption or change of any trade name or fictitious business name, and will upon request of Secured Party, execute any additional financing statements or other certificates necessary to reflect the adoption or change in trade names or fictitious business name. (f) Debtor will not, without the prior written consent of Secured Party, sell, offer to sell or otherwise transfer, exchange or dispose of the Collateral or any interest therein, unless in the normal course of business the Collateral is being replaced by collateral of similar nature and of equal or greater value. If the Collateral or any part thereof is sold, transferred, exchanged, or otherwise disposed of (either with or without the written consent of Secured Party), the security interest of Secured Party shall extend to the proceeds of such sale, transfer, exchange or other disposition and Debtor will hold said proceeds in a separate account for Secured Party's benefit and will, at Secured Party's request, transfer such proceeds to Secured Party in kind. (9) Debtor will keep the Collateral in good condition and repair, and will not misuse, abuse, allow to deteriorate, waste or destroy the Collateral or any part thereof, except for ordinary wear and tear resulting from its normal and expected use in Debtor's business. Secured Party may examine and inspect the Collateral at any reasonable time, wherever located. (h) Debtor, in a timely manner, will execute any document, alone or with Secured Party, procure any document, give any notices, do all other acts, and pay all costs associated with the foregoing that Secured Party determines is reasonably necessary to protect the Collateral against rights, claims or interests of third parties, or will otherwise preserve the Collateral as security hereunder. Debtor shall immediately notify Secured Party of any claim against the Collateral adverse to the interest of Secured Party therein. (i) LA01/79272.2 6/1/95 2 4. Preservation of Collateral by Secured Party. Should Debtor fail or refuse to make any payment, perform or observe any other covenant, condition, or obligation, or take any other action which Debtor is obligated hereunder to make, perform, observe, take or do at the time or in the manner herein provided, then Secured Party may, at Secured Party's sole discretion, without notice to or demand upon Debtor and without releasing Debtor from any obligation, covenant, or condition hereof, make, perform, observe, take or do the same in such manner and to such extent as Secured Party may deem necessary to protect the security interest in or the value of the Collateral. Furthermore, Secured Party, in its sole discretion, may commence, appear or otherwise participate in any action or proceeding purporting to affect Secured Party's security interest in or the value or ownership of the Collateral. Debtor agrees to pay Secured Party, on demand, the amount of any payment made or expense incurred by Secured Party pursuant to the foregoing authorizations (including attorneys' fees), together with interest thereon at the Default Rate from the date of each such payment by Secured Party. 5. Use of Collateral by Debtor. Until the occurrence of an Event of Default, Debtor may have possession of the Collateral and use it in any lawful manner not inconsistent with this Agreement and not inconsistent with any policy of insurance thereon. 6. Default. The occurrence of any of the following shall be deemed an event of default hereunder (Wvent of Defaultll) : (a) Debtor fails, breaches or defaults in the payment or performance of any of the obligations, representations, covenants or conditions in this Agreement which are not cured within any applicable notice and cure period set forth in the applicable provision of the Loan Agreement; or (b) An Event of Default (as defined therein) shall occur under any other Loan Document. 7. Remedies Upon Default. (a) Upon the occurrence of an Event of Default hereunder, Secured Party may, at its option, do any one or more of the following: (i) Declare all indebtedness secured hereby to be immediately due and payable, whereupon all unpaid principal of and interest on said indebtedness and other amounts declared due and payable shall be and become immediately due and payable without presentment, demand, protest or notice of any kind; (ii) Either personally, or by means of a court appointed receiver, take possession of all or any part of the Collateral and exclude therefrom Debtor and all others claiming under Debtor, and thereafter hold, store, use, operate, manage, maintain and control, make repairs, replacements, alterations, additions and improvements to and exercise all rights and powers of Debtor with respect to the Collateral or any part thereof. In the event Se- cured Party demands, or attempts to take possession of the Collateral in the exercise of any rights under this Agreement, Debtor promises and agrees to promptly turn over and deliver complete possession thereof to Secured Party; lA01/79272.2 6/1/95 3 (iii) Require Debtor to assemble the Collateral, or any portion thereof, at a place designated by Secured Party and reasonably convenient to both parties, and promptly to deliver such Collateral to Secured Party, or an agent or representative designated by it. Secured Party, and its agents and representatives, shall have the right to enter upon any or all of Debtor's premises and property to exercise Secured Party's rights hereunder: (iv) Foreclose this Agreement as herein provided or in any manner permitted by law, and exercise any and all of the rights and remedies conferred upon Secured Party by any deed of trust or in any other document executed by Debtor in connection with indebtedness secured hereby, either concurrently or in such order as Secured Party may determine, and sell or cause to be sold in such order as Secured Party may determine, as a whole or in such parcels as Secured Party may determine, the Collateral or the property described in any such deed of trust, or both, without affecting in any way the rights or remedies to which Secured Party may be entitled under the other such instruments: (v) Sell, lease or otherwise dispose of the Collateral at public sale, without having the Collateral at the place of sale, and upon terms and in such manner as Secured Party may determine. Secured Party may be a purchaser at any sale: and (vi) Exercise any remedies of a secured party under the Uniform Commercial Code of California or any other applicable law. (b) Unless the Collateral is perishable or threatens to decline rapidly in value or is of a type customarily sold on a recognized market, Secured Party shall give Debtor at least five (5) days' prior written notice of the time and place of any public sale of the Collateral or other intended disposition thereof to be made. Such notice may be mailed to Debtor at the address set forth in the Loan Agreement. (c) The proceeds of any sale under Paraarax, h 7(a) shall be applied by Secured Party, in its sole discretion, to any of the following: (i) To the repayment of the reasonable costs and expenses of retaking, holding and preparing for the sale and the selling of the Collateral (including attorneys' fees and costs) and the discharge of all assessments, encumbrances, charges or liens, if any, on the Collateral prior to the lien hereof (except any taxes, assessments, encumbrances, charges or liens subject to which such sale shall have been made); (ii) To the payment of the amount then due and unpaid of the indebtedness of Debtor to Secured Party (including principal and interest) referred to in Paraaranh 2 above: (iii) To the payment of all other amounts (including principal and interest) then secured hereunder: and (iv) The surplus, if any, shall be paid to the Debtor or to whomsoever may be lawfully entitled to receive the same, or as a court of competent jurisdiction may direct. LAOW9272.2 6/1/95 4 Secured Party shall have the right to enforce one or more remedies hereunder, successively or concurrently, and such action shall not operate to estop or prevent Secured Party from pursuing any further remedy which it may have, and any repossession or retaking or sale of the Collateral pursuant to the terms hereof shall not operate to release Debtor until full payment of any deficiency has been made in cash. 8. Notices. All notices, requests and demands to be made hereunder to the parties hereto shall be in writing and shall be given as provided in the Loan Agreement. 9. Other Remedies. Any and all remedies herein expressly conferred upon Secured Party shall be deemed cumulative with and not exclusive of any other remedy conferred hereby or by law on Secured Party, and the exercise of any one remedy shall not preclude the exercise of any other. 10. Waiver. By exercising or failing to exercise any of its rights, options or elections hereunder, Secured Party shall not be deemed to have waived any Potential Default, Potential Balancing Default or Event of Default on the part of Debtor or to have released Debtor from any of its obligations secured hereby, unless such waiver or release is in writing and is signed by Secured Party. In addition, the waiver by Secured Party of any Potential Default, Potential Balancing Default or Event of Default for default in payment of any indebtedness secured hereby shall not be deemed to constitute a waiver of any succeeding Potential Default, Potential Balancing Default or Event of Default. 11. Affixed Collateral. The inclusion in this Agreement of any Collateral which may now be, or hereafter become, affixed or in any manner attached to the Property shall be without prejudice to any claim at any time made by Secured Party that such Collateral is, or has become, a part of the Property, or an accession to such Property. 12. Further Security Agreements. Debtor further promises and agrees to execute from time to time, as Secured Party may require, security agreements and financing statements specifically including, in addition to the Collateral listed in Exhibit B , such additional goods, documents, contract rights, accounts receivable or general intangibles of type or kind similar to those listed in Exhibit B in which Debtor hereafter owns or acquires any interest or right, including, without limitation, leased personal property, and which are now or hereafter located on or used or useful in the construction, operation, use or occupancy of the Project. 13. Attorneys' Fees. Debtor agrees to pay all charges, expenses and costs, including reasonable attorneys' fees, which may be incurred in the enforcement of this Agreement whether or not such enforcement includes the filing of a lawsuit. As used herein, tlattorneys' feest1 shall have the meaning given such term in the Loan Agreement. 14. Binding Upon Successors. All agreements, covenants, conditions and provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA. 16. Amendment. This Agreement can be modified or rescinded only by a writing expressly referring to this Agreement and signed by all of the parties. LAO1 /79272.2 6/ 1 /95 5 17. Invalidity of Provisions. Every provision of this Agreement is intended to be severable. If any term or provision hereof is declared by a court of competent jurisdiction to be illegal, invalid or unenforceable for any reason whatsoever, such illegality, invalidity or unenforceability shall not affect the balance of the terms and provisions hereof, which terms and provisions shall remain binding and enforceable, and to the extent possible all of the other provisions shall nonetheless remain in full force and effect. 18. Counterparts. This Agreement may be executed in counterparts each of which shall be deemed an original and all of which shall constitute one and the same Agreement with the same effect as if all parties had signed the same signature page. Any signature page of this Agreement may be detached from any counterpart of this Agreement and reattached to any other counterpart of this Agreement identical in form hereto but having attached to it one or more additional signature pages. LA01/79272.2 6/1/95 6 IN WITNESS WHEREOF, the undersigned has executed this Security Agreement Documents as of the date first above written. DEBTOR: CIP LIMITED8 L.P. A California Limited Partnership BY its Ge neral Partner: Whammy, Inc. A California corporation By: By: By: By: By: By: Jeffrey C. Hamann, President Daniel M. Whitaker, Secretary Jeffrey C. Hamann, as an individual and as Trustee of the J.C. Hamann Family Trust, UTD 4/25/86 Gregg Hamann, as an individual and as Trustee of the Gregg Hamann Family Trust, UTD 4/25/86 Daniel M. Whitaker as an individual Daniel M. Whitaker and/or Dona C. Whitaker, Co- Trustees of the Whitaker Family Trust, UTD 10/22/79, as Amended and Restated 12/22/83 SECURED PARTY: FIRST INTERSTATE BANK OF CALIFORNIA8 A California corporation By: LA01/79272.2 6/1/95 7 EXHIBIT A LEGAL DESCRIPTION OF PROPERTY LA01/79272.2 6/ 1 /95 A-1 EXHIBIT B DESCRIPTION OF THE COLLATERAL As used in this Exhibit B, the term l1Propertyl1 means that certain real property, including all improvements now or hereafter located thereon, more particularly described in Exhibit A attached hereto. (a) All personal property, including, without limitation, all goods, supplies, equipment, furniture, furnishings, fixtures, machinery, inventory and construction materials which Debtor now or hereafter owns or in which Debtor now or hereafter acquires an interest or right, including, without limitation, those which are now or hereafter located on or affixed to the Property or used or useful in the operation, use or occupancy thereof or the construction of any improvements thereon, including, without limitation, any interest of Debtor in and to personal property which is leased or subject to any superior security interest, or which is being manufactured or assembled for later installation into the improvements to be located or constructed at the Property, whenever located, and all books, records, leases and other documents, of whatever kind or character, relating to the Property; earnings, receipts, royalties and revenues which, after the date hereof and while any portion of the indebtedness secured hereby remains unpaid, may accrue from said goods, fixtures, furnishings, equipment and building materials or any part thereof or from the Property or any part thereof, or which may be received or receivable by Debtor from any hiring, using, letting, leasing, subhiring, subletting, or subleasing therefor; (b) All fees, income, rents, issues, profits, (c) All of Debtor's present and future rights to receive payments of money, services or property including, without limitation, rights to all deposits from tenants of the Property, deposits from prospective purchasers of the Property, capital contributions from the constituent partners of Debtor (if Debtor is a partnership), amounts payable on account of the sale of partnership interests or stock of Debtor, accounts receivable, deposit accounts, chattel paper, notes, drafts, contract rights (including, without limitation, all rights under any interest rate hedging or similar agreement), instruments, general intangibles and principal, interest and payments due on account of goods sold, services rendered, loans made or credit extended, together with title or interest in all documents evidencing or securing the same; All other intangible property and rights relating to the Property or the operation thereof, or used in connection therewith, including but not limited to all governmental permits relating to construction or other activities on the Property, all names under or by which the Property may at any time be operated or known, all rights to carry on business under any such names, or any variant thereof, all trade names and trademarks relating in any way to the Property, good will in any way relating to the Property, and all licenses and permits relating in any way to, or to the operation of, the Property; (d) (e) All proceeds from sale or disposition of the aforesaid collateral; B-1 . . ., (f) covering the Property or any of the aforesaid collateral, and all proceeds, loss payments and premium refunds payable regarding the same; Debtor's rights under all insurance policies (9) All reserves, deferred payments, deposits, refunds, cost savings and payments of any kind relating to the construction of any improvements on the Property; (h) All water stock relating to the Property; (i) All causes of action, claims compensation and recoveries for any damage to or condemnation or taking of the Property or the aforesaid collateral, or for any conveyance in lieu thereof, whether direct or consequential, or for any damage or injury to the Property or the aforesaid collateral, or for any loss or diminution in value of the Property or the aforesaid collateral; (j) All architectural, structural, mechanical and engineering plans and specifications prepared for construction of improvements or extraction of minerals from the Property and all studies, data and drawings related thereto: and also all contracts and agreements of the Debtor relating to the aforesaid plans and specifications or to the aforesaid studies, data and drawings or to the construction of improvements on or extraction of minerals or gravel from the property; (k) All Debtor's rights in proceeds of the loan evidenced by that certain Loan Agreement of even date herewith executed between Debtor and Issuer: (1) All Debtor's rights to receive the proceeds of any Vake-outII or permanent financing or commitment to provide such financing. All terms used herein which are defined in the California Commercial Code shall have the same meanings when used herein, unless the context requires otherwise. LA01/79272.2 6/1/95 B-2