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Whitney, Thompson & Jeffcoach LLP
Mandy L. Jeffcoach, #232313 E-FILED
mijeffcoach@wtjlaw.com 3/25/2019 2:08 PM
8050 N. Palm Avenue, Suite 110 FRESNO COUNTY SUPERIOR COURT
Fresno, California 93711 By: A. Rodriguez, Deputy
Telephone: (559) 753-2550
Facsimile: (559) 795-2560
Attorneys for AMC DIRECT, INC.
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF FRESNO
AMC DIRECT, INC., Case No, 19CECG01026
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Plaintiff, COMPLAINT FOR BREACH OF
11 CONTRACT; MONEY HAD AND
Vv. RECEIVED; ACCOUNT STATED
12
JOSE LUIS PADILLA BRACAMONTES, an Demand Exceeds: $25,000.00
13 individual, and DOES 1 through 25, inclusive,
14 Defendants.
15
16 Plaintiff AMC DIRECT, INC., a Delaware Corporation, doing business in California
17 alleges as follows:
18 BACKGROUND ALLEGATIONS
19 1 Plaintiff AMC DIRECT, INC., (hereinafter “Plaintiff”), is and at all relevant times
20 herein was, a corporation authorized by and existing by virtue of the laws of the State of
21 Delaware, and authorized to do business under the laws of the State of California, and is in the
22 business of packing, selling and marketing fresh agricultural products. Plaintiff also provides
23 development financing to certain qualifying growers. Plaintiff regularly conducts business in the
24 County of Fresno, State of California.
25 2 Plaintiff is informed, believes, and thereon alleges that Defendant JOSE LUIS
26 PADILLA BRACAMONTES (“Defendant”) is an individual who resides in Mexicali, B.C.
27 Mexico, and may also reside in Fresno County, California.
28 3 The agreements between Plaintiff and Defendant, which are the subject of this
110.2 05262021.000 1
COMPLAINT FOR BREACH OF CONTRACT; MONEY HAD AND RECEIVED; ACCOUNT STATED
action, were entered into and expressly provided that they were to be performed in the County of
Fresno, State of California. Further, the parties stipulated that venue was proper in the County of
Fresno. Accordingly, venue is proper in Fresno County under CCP § 395(a).
4 The true names and capacities, whether individual, corporate, associate,
governmental, or otherwise, of Defendants DOES 1 through 25, inclusive, are unknown to
Plaintiff, who therefore sues said Defendants by such fictitious names pursuant to Section 474 of
the Code of Civil Procedure and prays leave of Court to amend its Complaint to set forth the true
names and capacities of said Defendants when the same have been ascertained.
5 Plaintiff is informed and believes, and on such information and belief alleges that,
10 at all times herein relevant, each of said Defendants was acting as the agent, servant, employee,
11 partner and/or joint venturer of each of the remaining said Defendants, and was acting in concert
12 with each remaining said Defendants in doing the things herein alleged, while at all times acting
13 within the course and scope of such agency, employment, partnership and/or concert of action.
14 FIRST CAUSE OF ACTION
15 (Breach of Contract against All Defendants)
16 6 Plaintiff re-alleges and by this reference incorporates herein each and every
17 allegation contained in Paragraphs 1 through 5, above.
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18 On or about March 22, 2017 Defendant executed and delivered to Plaintiff a Loan
19 and Security Agreement (the “Security Agreement”), as well as a Secured Promissory Note (the
20 “Note”). In connection with same, Defendant also executed a Marketing Agreement (the
21 “Agreement”). Pursuant to the terms of the Agreement, Plaintiff has the exclusive right to market
22 and sell Defendant’s packaged table grapes each year, until either Defendant, or Plaintiff canceled
23 the contract. Under the terms of the Security Agreement, Plaintiff agreed to loan Defendant up to
24 $210,000 for crop financing and Plaintiff was granted security interest in the Collateral which was
25 defined in Paragraph 3.3 to include Defendant’s crops, equipment and accounts receivable. The
26 Security Agreement and Note were due and payable on December 31, 2017. A true and correct
27 copy of the Security Agreement, Note and Agreement are attached hereto as Exhibit “A-C”
28 respectively and are incorporated by this reference.
110.2 05262021.000 2
COMPLAINT FOR BREACH OF CONTRACT; MONEY HAD AND RECEIVED; ACCOUNT STATED
8 Under Section 7.1(a) of the Security Agreement, Defendant was in default if he
“fail[ed] to pay any amount when due to Lender” and under Section 7.2(b) of the agreement Plaintiff
was entitled to demand the “entire principal balance of the Security Promissory Note, all interest
accrued and unpaid thereon, and all other amounts payable hereunder” if Defendant failed to
perform.
9 Defendant breached the Security Agreement in or around December 31, 2017 by
failing to timely repay the Note and currently owe Plaintiff $223,034.14.
10. On October 18, 2018, Plaintiff sent a demand letter to Defendant demanding
immediate repayment of the outstanding balance. Defendant has failed to acknowledge Plaintiff's
10 demands, much less remit the outstanding balance.
11 ll. Plaintiff has yet to receive full satisfaction of the Note which remains outstanding
12 and due.
13 12. As a direct and approximate result of Defendant’s breaches, Plaintiff has been
14 damaged in an amount in excess of the jurisdictional limit. Pre-judgment interest accrues on the
15 foregoing balance from the date of Defendant’s breach until the date of entry of judgment at the
16 legal rate of interest of 10 percent per annum. In addition, Plaintiff is entitled to post-judgment
17 interest on the amount of judgment at the maximum legal rate.
18 13. The Security Agreement provides that Defendants agree to pay all of Plaintiff's costs
19 and expenses, including attorney’s fees and legal expenses, incurred in connection with the
20 enforcement thereof. By reason of Defendant’s default, Plaintiff has retained the law firm of
21 Whitney Thompson & Jeffcoach LLP to prosecute this action. Plaintiff also previously retained
22 other counsel in its efforts to collect upon the debt. Plaintiff is therefore entitled to its reasonable
23 attorney’s fees and costs associated with Defendant’s failure to perform his contractual obligations.
24 WHEREFORE, Plaintiff prays for Judgment against Defendant as set forth below.
25 SECOND CAUSE OF ACTION
26 (Common Count for Money Had and Received — against Defendants)
27 14. Plaintiff re-alleges and by this reference incorporates herein each and every
28 allegation contained in Paragraphs 1 through 17, above.
110.2 05262021.000 3
COMPLAINT FOR BREACH OF CONTRACT; MONEY HAD AND RECEIVED; ACCOUNT STATED
15. Defendant is indebted to Plaintiff in the sum of at least $223,034.14 for money had
and received by Defendant which was provided by Plaintiff and was to be repaid.
16. Despite demand being made, no part of the sum of at least $223,034.14 has been
paid.
17. As aresult of Defendant’s failure to pay the sum of at least $223,034.14 to Plaintiff,
Plaintiff has been damaged in an amount in excess of the jurisdictional limit.
WHEREFORE, Plaintiff prays for Judgment against Defendant as set forth below.
THIRD CAUSE OF ACTION
(Account Stated — against Defendants)
10 18. Plaintiff re-alleges and by this reference incorporates herein each and every
11 allegation contained in Paragraphs 1 through 17, above.
12 19. Within the last four years, an account was stated in writing by and between Plaintiff,
13 AMC, on the one hand, and Defendant, on the other hand, wherein and whereby it was granted that
14 said Defendant was indebted to Plaintiff in the principal sum of $210,000, in connection with the
15 Security Agreement.
16 20. There is now due, owing and unpaid from Defendant to Plaintiff, the principle sum
17 of $223,034.14, together with interest at the statutory ten percent (10%) per annum, from and after
18 the date of breach.
19 WHEREFORE, Plaintiff prays for judgment against Defendant as follows:
20 1 For damages according to proof but in excess of the jurisdictional limits as of
21 December 31, 2017 on the Security Agreement;
22 2 For pre-judgment interest at the legal rate of 10 percent per annum from the date of
23 breach to the date of entry of judgment;
24 3 For reasonable attorney’s fees;
25 4 For costs of suit;
26 5 For interest on judgment at the maximum legal rate from the date of entry of
27 judgment until paid in full; and
28 6 For such other and further relief as the Court may deem just and proper.
110.2 05262021.000 4
COMPLAINT FOR BREACH OF CONTRACT; MONEY HAD AND RECEIVED; ACCOUNT STATED
Dated: March|4{__, 2019 WHITNEY, THOMPSON & JEFFCOACH LLP
By
auomeret i ifficoach
C DIRECT, INC.
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110.2 05262021.000 <
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COMPLAINT FOR BREACH OF CONTRACT; MONEY HAD AND RECEIVED; ACCOUNT STATED
EXHIBIT “A”
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (“Agreement”) is made and
entered into as of 0! , 2017 (the “Effective Date”), by and between (i) AMC
DIRECT, INC, a Delaware corporation (“Lender”), and (ii) JOSE LUIS PADILLA
BRACAMONTES (“Borrower”).
RECITALS:
This Agreement is made with respect to the following facts and circumstances.
A Lender is in the business of packing, selling, and marketing fresh
agricultural products. Lender also provides development financing to certain of its qualifying
growers.
B. Borrower is the owner of certain farm property CARRETERA
MEXICALI A SAN FELIPE KM 178 MNA 7 L2 PLAN NATIONAL AGRARIO CP 21850
SAN FELIPE, MEXICALI, B.C. MEXICO, parcel number 164 Z-4 P1/land incorporated herein
by this reference (the “Property”).
Cc Borrower has requested, and Lender has agreed to provide certain crop
the
financing for the crops to be grown by Borrower on the Property, on the terms and subject to
conditions as herein set forth.
NOW THEREFORE, in consideration of the recitals and agreements contained
herein and for other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
THE LOAN
11 The Crop Financing. Lender shall make funds available for certain of
Borrower's cultural, picking and packing costs on the Ranch Property (sometimes hereinafter
referred to as "advances") up to an aggregate amount not to exceed the total principal amount of
Two Hundred Ten Thousand and No/100 Dollars ($210,000.00), subject to the terms and
conditions set forth below (collectively, the "Crop Financing"). The Crop Financing shall be
evidenced by and repaid in accordance with the terms of a promissory note in the form
substantially similar to the note attached hereto as Exhibit "A" and incorporated herein by this
reference (the "Secured Promissory Note"), which Borrower shall execute and deliver to Lender
concurrently with the execution and delivery of this Agreement. In particular, the Secured
Promissory Note will provide for the accrual of interest on the outstanding principal balance
equal to three percent (3.00%) per annum. All principal and interest under the Secured
Promissory Note shall be payable in accordance with the terms of the Secured Promissory Note
but in no event later than December 31, 2017. The Secured Promissory Note by and between
1941996v1 / 18876.0001
Lender and Borrower will allow Lender to withhold from Borrower's crop proceeds the amount
of principal and interest advanced under the Secured Promissory Note.
1.2 Use of Crop Financing. Borrower shall use the Crop Financing only for
cultural work on the 2017 table grape crop, which shall consist of Flames and Sugraones grape
varieties, and for no other purpose whatsoever except as expressly set forth in this Agreement.
13 No Obligation for Additional Financing. BORROWER EXPRESSLY
ACKNOWLEDGES AND AGREES THAT LENDER HAS NO EXPRESS OR IMPLIED
OBLIGATION TO EXTEND THE MATURITY DATE OF THE SECURED PROMISSORY
NOTE, OR TO PROVIDE BORROWER WITH ANY ADDITIONAL FINANCING FOR THE
DEVELOPMENT OF THE PROPERTY NOT SPECIFICALLY DESCRIBED HEREIN. If
Lender, in its sole discretion, advances funds for crop expenses at Borrower's request in excess
of the amounts stated above or at a time when it is not obligated to do so (including without
limitation any advance made after the maturity date of the Secured Promissory Note), such
advances shall nevertheless be subject to the terms and conditions of this Agreement and shall be
deemed advanced under the Secured Promissory Note. Repayment of such advances shall be
secured by all the security provided to Lender for repayment of the Secured Promissory Note.
ARTICLE I
CROPS AND MARKETING
2.1 Crops. Beginning on the Effective Date and continuing until the
expiration or termination of the Marketing Agreement (as defined below), Borrower agrees to
operate and maintain a vineyard on the Property consisting of the following grape varieties:
Flames, Vintage Red, and Scarlet Royals.
2.2 Marketing. Concurrent with the execution of this Agreement, Borrower
and Lender shall execute a marketing agreement substantially in the form attached hereto as
Exhibit "B" and incorporated herein by this reference (the "Marketing Agreement"), pursuant to
which Borrower appoints Lender as its agent to market the Flames and Sugraones grapes
the
growing or to be grown, matured or harvested on the Property during the Term (as defined in
Marketing Agreement) as follows: a minimum of 70,000 cases per season of Flames and
Sugraones.
ARTICLE III
SECURITY AGREEMENT
3.1 Grant of Security Interest, Borrower hereby grants to Lender a security
interest in the Collateral described in Section 3.3 and its proceeds to secure payment and
performance of the duties and obligations described in Section 3.2, pursuant to the terms and
subject to the conditions set forth herein.
3.2 Obligations Secured. The security interest granted by Borrower to
Lender in the Collateral and its proceeds is given to secure the “Obligations” of Borrower which
are defined as:
1941996vI / 18876.0001
@ Any and all debts, obligations and liabilities of Borrower to Lender
arising out of or related to the Secured Promissory Note, together with interest thereon,
and renewals or extensions thereof, and any and all promissory notes hereafter made by
Borrower in replacement or in addition to the Secured Promissory Note, payable to the
order of Lender, or its assignee;
(b) Any and all debts, obligations, and liabilities of Borrower to
Lender arising out of or related to the Property;
(©) Any and all debts, obligations and liabilities of Borrower to Lender
arising out of or related to the Loan Documents. For purposes of this Agreement, “Loan
Documents” means, collectively, this Agreement, the Secured Promissory Note, the
Financing Statement (as defined below), the Marketing Agreement, the Insurance
Proceeds Assignment (as defined below), and all documents and instruments executed in
connection herewith or therewith, as originally executed or as the same have been or may
from time-to-time be supplemented, modified, amended, restated, extended or replaced;
@) Any and all obligations and liabilities of Borrower under the Loan
Documents, and all amounts advanced or expended by Lender or its assigns under the
terms of any of the Loan Documents;
@) Any and all other obligations of Borrower to Lender, direct,
indirect or contingent, joint or several, whether or not otherwise secured, and whether
now existing or hereafter incurred; and
® Any and all amounts advanced or expended by Lender for the
maintenance or preservation of the Collateral.
3.3 Description of Collateral. The term “Collateral” in this Agreement shall
described
mean and include, and the security interest created herein shall cover all the property
nts
in subsections (a) through (g) of this Section 3.3, as well as any additions and attachme
thereto, and the proceeds and products thereof:
(a) All crops, growing or to be grown, matured or harvested on the
Property;
() All Borrower's rights under any governmental agricultural
in
programs (including the Perishable Agricultural Commodities Act), rights to payments
kind for crops or other farm products (including, insurance proceeds), revolving fund
credits, patronage dividends, retains and other similar rights;
(c) All Borrower’s rights in any equipment consisting of machines,
machinery, tools, pumps, tractors, plows, rolling stock, motor vehicles and other
equipment of all kinds and types, and all other items of personal property all of which is
used in the farming operations of Borrower;
@) All accounts receivable or money due to Borrower from every
source generated by the sale of the crops, farms products, inventory or equipment
1941996v1 / 18876.0001 3
described in paragraphs (a) through (g) of this Section 3.3 whether currently owned or
hereafter acquired by Borrower;
©) All farms products on or hereafter acquired by Borrower whether
growing on, attached to, severed from, or harvested from and packaged for later sale in
the form of bulk farm products or individually packaged units for immediate shipment
and sale, or held in storage as inventory by Borrower for later sale, including the
proceeds from any and all said sales;
® All of Borrower’s interests under any real property leases in which
Borrower is a tenant; and
(8) All products, natural increase, improvements, assessions, and
additions thereto and replacements and proceeds thereof from the real or personal
property described in paragraphs (a) through (f) above, whether currently owned or
hereafter acquired by Borrower.
3.4 Terms and Conditions of Security Agreement. In addition to the
representations, warranties and covenants contained elsewhere in this Agreement, Borrower
hereby represents, warrants and covenants to Lender as follows with respect to the security
interest granted in this Article 3. Borrower represents and warrants as follows:
ql) Binding Obligation. The security interest granted in Article
3 of this Agreement constitutes the legal, valid and binding obligation of
Borrower, enforceable in accordance with its terms, and the security interest
grants to Lender a valid, perfected and enforceable lien on the Collateral.
Borrower agrees to terminate any financing statements currently on file naming
Borrower as “debtor”, and agrees that Borrower is not currently indebted to any
third parties on account of any crops grown or sold in prior years.
(2) Other Security Interests, Borrower will not execute or
permit any liens or security interests (other than Lender’s security interest) to
attach to the Collateral; dispose of any of the Collateral except in the ordinary
t;
course of business as it was conducted on the date of execution of this Agreemen
dispose of any rights with respect to water, or leases used in connection with the
Collateral; or permit anything to be done that may impair the value of the
Collateral or the security interest granted in this Agreement without the prior
written consent of Lender and where necessary unless also ordered by a court of
appropriate jurisdiction.
G) No Violation, By granting a security interest in the
Collateral to Lender, Borrower will not violate any agreement, including, without
limitation, partnership agreements, trust instruments, tenancy-in-common
agreements, joint venture agreements, buy-sell agreements, marketing
agreements, lease agreements or similar documents respecting or to which
Borrower is a party.
1941996v1 / 18876.0001
10
@) Information. All information heretofore, herein or
hereafter supplied to Lender by Borrower with respect to the Loan Documents or
this Agreement is true and correct in all material respects.
(b) Borrower covenants and agrees as follows:
(1) Payment. To promptly pay to Lender all amounts due and
payable under the Obligations, including, without limitation, the Secured
Promissory Note, on or before the date when due and payable.
(2) Repay Advances. Immediately pay Lender, as part of the
Obligations, all amounts, with interest, paid or advanced by Lender for (i) taxes,
levies, insurance, and repairs to or maintenance of the Collateral; (ii) the taking of
possession of, disposing of, or preserving of the Collateral after any default
described in this Agreement; and (iii) attorneys’ fees incurred by Lender in the
enforcement of its rights under this Agreement.
@) Good Husbandry. As to all crops and trees affected hereby,
to attend to and care for such crops and trees, to do all acts which may at any time
be necessary to grow, cultivate, spray, irrigate, cut, harvest, pick, clean, preserve
and protect trees and vines according to the most approved methods of farming
and husbandry; to give Lender prompt notice of any damage to such crops; to
permit Lender to enter upon the Property at reasonable times for the purpose of
examining the crops and trees; to prepare the crops for packing and marketing and
when they are ready for packing and marketing to promptly notify Lender of that
fact; to follow Lender’s instructions (if any) with reference to holding, shipping,
storing and marketing the crops; and to keep the crops separate and always
capable of identification.
4) Care of Collateral. As to all Collateral, including crops, to
do all acts that may be necessary to maintain, preserve and protect the Collateral
and to keep the Collateral in good condition and repair; to pay before delinquency
all taxes, assessments and liens now or hereafter imposed upon the Collateral; not
to sell, lease, encumber or dispose of all or any part of the Collateral; at any time
upon demand of Lender to exhibit to and allow inspection by Lender of the
Collateral; not to remove or permit the removal of the Collateral from the
premises where it is now located, without the prior written consent of Lender; and
to provide and maintain (and, if requested by Lender, to deliver to Lender)
policies insuring the Collateral against loss or damages by such risks and in such
amounts, forms and companies as Lender requires (and with loss payable solely to
Lender if Lender so requests). If Lender takes possession of the Collateral, the
insurance policy or policies and any unearned or returned premium thereon shall
at the option of Lender become the sole property of Lender, upon Lender
crediting the amount of any unearned premium upon the obligations secured
hereby, such policies being hereby pledged and assigned to Lender.
1941996v1 / 18876.0001
11
6) Additional Documents. At any time, and from time to
time, as Lender may request, to execute and deliver to Lender, assignments of
insurance proceeds in any form requested by Lender (the “Insurance Proceeds
Assignments”). Borrower shall also execute and deliver to Lender amendments
or modifications to the above-described documents with respect to the Collateral
(in number, form, and substance satisfactory to Lender) and such additional
security documentation as and when Lender may request to effect the purposes of
this Agreement; and deliver to Lender at its request reasonable financial
information, accounts, budgets, books and records, reports, contracts, and other
information relating in any manner to the Collateral. Borrower hereby authorizes
Lender to file or record any documents necessary to perfect its security interest in
the Collateral, including, without exception, a UCC-1 Financing Statement (the
“Financing Statement”).
(6) Duty to Notify Lender, Immediately notify Lender in
writing when Borrower becomes aware of any event that substantially affects the
value of the Collateral, the ability of Borrower or Lender to dispose of the
Collateral, or the rights and remedies of Lender in relation to the Collateral,
al
including, without limitation, the levy of any legal process against the Collater
and the adoption of any marketing order, arrangement, or procedur e affecting the
Collateral, whether governmental or otherwise; and of any change in the name,
identity or the structure of Borrower.
(7) Additional Duties of Borrower. Upon Lender’s request,
s
notify any account debtors, buyers of the Collateral or other persons of Lender’
interest in the Collateral and its products and proceeds; make direct demand for
and collect any receivables and proceeds of the Collateral. Borrower agrees to
to
execute such assignments or other documents as is necessary to enable Lender
collect any receivables and proceeds of the Collateral; and do all things incident
to such notifications, demands, and collection.
(8) Collateral Proceeds. To account fully for and promptly
,
deliver to Lender, in the form received, all proceeds of the Collateral received
endorsed to Lender as appropriate, and until so delivered all proceeds shall be
r
held by Borrower in trust for Lender, separate from all other property of Borrowe
and identified as the property of Lender.
3.5 Appointment as Attorney-In-Fact. Borrower appoints Lender, and its
Event of
officers, as Borrower’s attorney-in-fact, with full power of substitution to (a) upon an
Default (as defined in Section 7.1 below), sign any certificate or evidence of ownershi p,
registration card, application therefor, affidavits, assignments or documents necessary to transfer
title to any of the Collateral, to receive and provide a receipt for all licenses, registration cards
and certificates of ownership and to do all acts necessary or incident to the powers granted to
Lender herein, as fully as Borrower might, and (b) perform all acts and things that Lender may
and to
consider necessary or advisable to perfect and continue perfection of the security interest,
g
protect the Collateral, including, without exception, filing any necessary UCC-1 financin
statement.
941996v1 / 18876.0001
12
3.6 Assignment of Rights in Collateral. Borrower hereby assigns to Lender
right to
all rents, issues, income and profits of or from the Collateral and grants the Lender the
l in their possessio n. Borrower hereby
contact and collect from third parties any of the Collatera
the proceeds of sale
further assigns to Lender all sums now or hereafter payable to Borrower as
the terms
from the Collateral, and any and all sums now or hereafter payable to Borrower under
g of the Collateral . Should any of the Collatera l
of any agreement for the sale or marketin
public authority and Borrower becomes
become infected with disease or be destroyed by order of
hereby. assigns to
entitled to be indemnified by the State or other public unit or agency, Borrower
Lender all such sums due from said State or other public unit or agency, and Lender is hereby
that such
authorized to receive, collect and sue for same, and Borrower hereby orders and directs
hereof
sums be paid directly to Lender. Any monies received by Lender under the provisions
The provisions
may at its option be applied upon any indebtedness secured hereby, or released.
Lender’s
of this Section 3.6 shall not be construed, however, to waive or in any way affect
right to deal with the
security interest or the limitations contained herein upon Borrower’s
in full all
Collateral without Lender’s written consent. At such time as Lender has been paid
Borrower shall
sums due it by Borrower, Lender shall re-assign all interest in the Collateral and
not be required to assign any further interest therein.
3.7 Rights of Lender; Waiver. It is specifically understood and agreed that
any person now
Lender may from time to time and without notice, release or otherwise deal with
obligati on hereunde r or secured
or hereafter liable for the payment or performance of any
such obligatio n, and
hereby, and renew, extend or alter the time or terms of payment of any
n, or accept
release, surrender, or substitute any collateral or other security for any such obligatio
r of
any type of further security therefor, without in any way affecting the obligations hereunde
payment or
Borrower, and consent is hereby given to delay or indulgence in enforcing
performance of any such obligation, and diligence, presentment, protest and demand and notice
liable for the
of every kind, as well as the right to require Lender to proceed a; gainst any person
or collect or
payment of any such obligation or to foreclose upon, sell, or otherwise realize upon
n or prior to
apply any other property, real or personal, securing any such obligation, as a conditio
r
proceeding hereunder, are hereby waived. To the fullest extent permissible by law, Borrowe
hereby waives the right to p lead the statute of limitations as a defense to any and all obligati ons
secured hereby.
Default, Borrower shall be in default hereunder upon the happening of
3.8
any event or condition described in Section 7.1 of this Agreement.
3.9 Remedies. In the case of an Event of Default (as defined in Section 7.1),
:
Lender may, subject to the provisions of Article 7, do any one or more of the following
@ Declare all sums secured hereby immediately due and payable;
(b) Immediately take possession of the Collateral wherever it may be
l
found, using all necessary force to do so, or require Borrower to assemble the Collatera
ly
and make it available to Lender at a place designated by Lender which is reasonab
to
convenient to Borrower and Lender, and Borrower waives all claims for damages due
or arising from or connected with any such taking;
941996v1 / 18876.0001
13
Proceed in the foreclosure of Lender’s security interest and sale of
(©)
the Collateral in any manner permitted by law, or provided for herein;
@ Sell, lease or otherwise dispose of the Collateral at public or
private sale, with or without having the Collateral at the place of sale, and upon terms and
in such manner as Lender may determine, and Lender may purchase same at any such
sale;
@) Retain the Collateral in full satisfaction of the obligations secured
thereby; or
Exercise any and all remedies of a secured party allowed under the
@®
Uniform Commercial Code.
be
Prior to any such disposition, Lender may, at its option, cause any of the Collateral to
repaired or reconditioned in such manner and to such e’ xtent as Lender may deem advisable , and
Ifa
any sums expended therefor by Lender shall be repaid by Borrower and secured hereby.
sufficient sum is not realized from any such sale to pay all the Obligations, Borrower hereby
promises and agrees to pay Lender any deficiency.
3.10 Additional Rights of Lender. Lender, at its option and without prior
n to
notice to Borrower, whether before or after an Event of Default, may, but without obligatio
s and do such acts as
do so, and without notice to or demand upon Borrower, make such payment
purchase,
Lender may deem necessary to protect its security interest in the Collateral; pay,
to Lender's
contest, and compromise any encumbrance, charge or lien which is prior or superior
g any
security interest and which is not expressly approved in this Agreement, and in exercisin
and pay reasonab le fees
such powers and authority, pay necessary expenses, employ counsel
of the
therefore; pay for the repair, improvement, testing, maintenance and preservation
Collateral; pay any filing, recording, registrat ion, licensing or ce! tification fees or other fees and
and protect the Collater al and
charges related to the Collateral; take any other action to preserve
y or
Lender’s rights and remedies under this Agreement as Lender may deem necessar
immedia tely, and without demand, all sums so
appropriate. Borrower hereby agrees to repay
expended by Lender under this Section 3.10, with interest from the date of expendit ure at the rate
of ten percent (10%) per annum.
3.11 Right to Possess and Care for the Collateral Upon an Event of
limiting the
Default, In the case of an Event of Default, Lender is hereby authorized (without
on of the Collatera l, to go
general nature of the authority hereinabove conferred) to take possessi
farm, manage, grow,
upon the land where any crops affected hereby are located and care for,
connection
protect, harvest, preserve, remove and market the crops, and to take such measures in
therewith as Lender shall deem adequate and proper. Borrower hereby agrees to repay
Section 3.11, with
immediately, and without demand, all sums so expended by Lender under this
interest from the date of expenditure at the rate of ten percent (10%) per annum.
3.12 Remedies Cumulative. Lender shall have the right to enforce one or
Lender
more remedies hereunder successively or concurrently, and such rights and remedies of
, any
are cumulative of any other rights or remedies at law or equity, including, without limitation
1941996v1 / 18876.0001
14
right of setoff to which Lender may be entitled. Lender’s exercise of any one or more of the
rights or remedies provided in this Agreement or at law or equity shall not be deemed an election
of rights or remedies or a waiver of any other right or remedy.
3.13 Receiver. In any action of foreclosure, Lender shall be entitled to the
appointment of a receiver with the minimum notice required by applicable law, to take
possession of all or any part of the Collateral and to exercise such powers as the Court shall
confer upon Lender and/or the receiver.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions Precedent to Lender’s Obligations, Lender’s obligations
under this Agreement are expressly made subject to the satisfaction of each one of the following
conditions:
(a)Lender’s receipt of each of the following documents duly executed
and acknowledged as appropriate:
(1) This Agreement;
@) The Secured Promissory Note in accordance with Section
1.1 above;
G) The Insurance Proceeds Assignments in accordance with
Section 3.4(b)(5) above; and
(4) The Marketing Agreement.
(b) The representations and warranties contained in this Agreement or
otherwise made in connection with this Agreement shall be accurate and complete in all
material respects and Lender shall not have discovered any misrepresentation or
inaccuracy therein.
ARTICLE V
BORROWER’S REPRESENTATIONS AND WARRANTIES
As an inducement to Lender to enter into this Agreement, Borrower
hereby makes the following representations and warranties to Lender.
5.1 Authority, Borrower has full power, authority and legal right to execute,
deliver and perform this Agreement. The execution, delivery and performance of this
Agreement does not in any way violate or conflict with (a) any law or any order of any court or
governmental agency, (b) any contract, instrument or agreement to which Borrower is a party or
by which Borrower or the assets of Borrower are bound, or (c) any right, title or interest of any
other person or entity with respect to any assets of Borrower.
1941996v1 / 188760001
15
Execution. The Borrower has duly-executed this Agreement, and any
5.2
documents to be executed concurrently herewith or pursuant hereto, and no other approvals are
such
necessary for the consummation by Borrower of its obligations under this Agreement or any
other documents,
5.3 Truth of Representations. Each statement made in this Agreement,
including the recitals and exhibits hereto (subject to any qualifications stated in such statements)
is true, correct and complete; and each representation, warranty, acknowledgment and statement
or
of fact (subject to any qualifications stated in such representation, warranty, acknowledgment
,
statement) made to Lender by or on behalf of Borrower in any instrument, agreement, certificate
t, is true,
financial statement or other document provided in connection with this Agreemen
correct and complete.
5.4 Liens and Encumbrances. The Collateral shall not be subject to any
or
prior liens or encumbrances. No person (whether an individual, trust, partnership, corporation
other entity) that is not a party to this Agreement or to the document s executed pursuant to this
Agreement has, or to the knowledge of Borrower claims to have, any legal or beneficial
ownership interest in any of the Collateral.
Litigation. There is no action, suit, arbitration, claim, cause of action or
5.5
other proceeding at law or in equity (or by or before any governmental agency, official,
commissioner, board, bureau, instrumentality or authority of any local, state or federal
d against
government) now pending or, to the best of Borrower’s knowledge an
Preview
Whitney, Thompson & Jeffcoach LLP Mandy L. Jeffcoach, #232313 E-FILED mijeffcoach@wtjlaw.com 3/25/2019 2:08 PM 8050 N. Palm Avenue, Suite 110 FRESNO COUNTY SUPERIOR COURT Fresno, California 93711 By: A. Rodriguez, Deputy Telephone: (559) 753-2550 Facsimile: (559) 795-2560 Attorneys for AMC DIRECT, INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF FRESNO AMC DIRECT, INC., Case No, 19CECG01026 10 Plaintiff, COMPLAINT FOR BREACH OF 11 CONTRACT; MONEY HAD AND Vv. RECEIVED; ACCOUNT STATED 12 JOSE LUIS PADILLA BRACAMONTES, an Demand Exceeds: $25,000.00 13 individual, and DOES 1 through 25, inclusive, 14 Defendants. 15 16 Plaintiff AMC DIRECT, INC., a Delaware Corporation, doing business in California 17 alleges as follows: 18 BACKGROUND ALLEGATIONS 19 1 Plaintiff AMC DIRECT, INC., (hereinafter “Plaintiff”), is and at all relevant times 20 herein was, a corporation authorized by and existing by virtue of the laws of the State of 21 Delaware, and authorized to do business under the laws of the State of California, and is in the 22 business of packing, selling and marketing fresh agricultural products. Plaintiff also provides 23 development financing to certain qualifying growers. Plaintiff regularly conducts business in the 24 County of Fresno, State of California. 25 2 Plaintiff is informed, believes, and thereon alleges that Defendant JOSE LUIS 26 PADILLA BRACAMONTES (“Defendant”) is an individual who resides in Mexicali, B.C. 27 Mexico, and may also reside in Fresno County, California. 28 3 The agreements between Plaintiff and Defendant, which are the subject of this 110.2 05262021.000 1 COMPLAINT FOR BREACH OF CONTRACT; MONEY HAD AND RECEIVED; ACCOUNT STATED action, were entered into and expressly provided that they were to be performed in the County of Fresno, State of California. Further, the parties stipulated that venue was proper in the County of Fresno. Accordingly, venue is proper in Fresno County under CCP § 395(a). 4 The true names and capacities, whether individual, corporate, associate, governmental, or otherwise, of Defendants DOES 1 through 25, inclusive, are unknown to Plaintiff, who therefore sues said Defendants by such fictitious names pursuant to Section 474 of the Code of Civil Procedure and prays leave of Court to amend its Complaint to set forth the true names and capacities of said Defendants when the same have been ascertained. 5 Plaintiff is informed and believes, and on such information and belief alleges that, 10 at all times herein relevant, each of said Defendants was acting as the agent, servant, employee, 11 partner and/or joint venturer of each of the remaining said Defendants, and was acting in concert 12 with each remaining said Defendants in doing the things herein alleged, while at all times acting 13 within the course and scope of such agency, employment, partnership and/or concert of action. 14 FIRST CAUSE OF ACTION 15 (Breach of Contract against All Defendants) 16 6 Plaintiff re-alleges and by this reference incorporates herein each and every 17 allegation contained in Paragraphs 1 through 5, above. 7 18 On or about March 22, 2017 Defendant executed and delivered to Plaintiff a Loan 19 and Security Agreement (the “Security Agreement”), as well as a Secured Promissory Note (the 20 “Note”). In connection with same, Defendant also executed a Marketing Agreement (the 21 “Agreement”). Pursuant to the terms of the Agreement, Plaintiff has the exclusive right to market 22 and sell Defendant’s packaged table grapes each year, until either Defendant, or Plaintiff canceled 23 the contract. Under the terms of the Security Agreement, Plaintiff agreed to loan Defendant up to 24 $210,000 for crop financing and Plaintiff was granted security interest in the Collateral which was 25 defined in Paragraph 3.3 to include Defendant’s crops, equipment and accounts receivable. The 26 Security Agreement and Note were due and payable on December 31, 2017. A true and correct 27 copy of the Security Agreement, Note and Agreement are attached hereto as Exhibit “A-C” 28 respectively and are incorporated by this reference. 110.2 05262021.000 2 COMPLAINT FOR BREACH OF CONTRACT; MONEY HAD AND RECEIVED; ACCOUNT STATED 8 Under Section 7.1(a) of the Security Agreement, Defendant was in default if he “fail[ed] to pay any amount when due to Lender” and under Section 7.2(b) of the agreement Plaintiff was entitled to demand the “entire principal balance of the Security Promissory Note, all interest accrued and unpaid thereon, and all other amounts payable hereunder” if Defendant failed to perform. 9 Defendant breached the Security Agreement in or around December 31, 2017 by failing to timely repay the Note and currently owe Plaintiff $223,034.14. 10. On October 18, 2018, Plaintiff sent a demand letter to Defendant demanding immediate repayment of the outstanding balance. Defendant has failed to acknowledge Plaintiff's 10 demands, much less remit the outstanding balance. 11 ll. Plaintiff has yet to receive full satisfaction of the Note which remains outstanding 12 and due. 13 12. As a direct and approximate result of Defendant’s breaches, Plaintiff has been 14 damaged in an amount in excess of the jurisdictional limit. Pre-judgment interest accrues on the 15 foregoing balance from the date of Defendant’s breach until the date of entry of judgment at the 16 legal rate of interest of 10 percent per annum. In addition, Plaintiff is entitled to post-judgment 17 interest on the amount of judgment at the maximum legal rate. 18 13. The Security Agreement provides that Defendants agree to pay all of Plaintiff's costs 19 and expenses, including attorney’s fees and legal expenses, incurred in connection with the 20 enforcement thereof. By reason of Defendant’s default, Plaintiff has retained the law firm of 21 Whitney Thompson & Jeffcoach LLP to prosecute this action. Plaintiff also previously retained 22 other counsel in its efforts to collect upon the debt. Plaintiff is therefore entitled to its reasonable 23 attorney’s fees and costs associated with Defendant’s failure to perform his contractual obligations. 24 WHEREFORE, Plaintiff prays for Judgment against Defendant as set forth below. 25 SECOND CAUSE OF ACTION 26 (Common Count for Money Had and Received — against Defendants) 27 14. Plaintiff re-alleges and by this reference incorporates herein each and every 28 allegation contained in Paragraphs 1 through 17, above. 110.2 05262021.000 3 COMPLAINT FOR BREACH OF CONTRACT; MONEY HAD AND RECEIVED; ACCOUNT STATED 15. Defendant is indebted to Plaintiff in the sum of at least $223,034.14 for money had and received by Defendant which was provided by Plaintiff and was to be repaid. 16. Despite demand being made, no part of the sum of at least $223,034.14 has been paid. 17. As aresult of Defendant’s failure to pay the sum of at least $223,034.14 to Plaintiff, Plaintiff has been damaged in an amount in excess of the jurisdictional limit. WHEREFORE, Plaintiff prays for Judgment against Defendant as set forth below. THIRD CAUSE OF ACTION (Account Stated — against Defendants) 10 18. Plaintiff re-alleges and by this reference incorporates herein each and every 11 allegation contained in Paragraphs 1 through 17, above. 12 19. Within the last four years, an account was stated in writing by and between Plaintiff, 13 AMC, on the one hand, and Defendant, on the other hand, wherein and whereby it was granted that 14 said Defendant was indebted to Plaintiff in the principal sum of $210,000, in connection with the 15 Security Agreement. 16 20. There is now due, owing and unpaid from Defendant to Plaintiff, the principle sum 17 of $223,034.14, together with interest at the statutory ten percent (10%) per annum, from and after 18 the date of breach. 19 WHEREFORE, Plaintiff prays for judgment against Defendant as follows: 20 1 For damages according to proof but in excess of the jurisdictional limits as of 21 December 31, 2017 on the Security Agreement; 22 2 For pre-judgment interest at the legal rate of 10 percent per annum from the date of 23 breach to the date of entry of judgment; 24 3 For reasonable attorney’s fees; 25 4 For costs of suit; 26 5 For interest on judgment at the maximum legal rate from the date of entry of 27 judgment until paid in full; and 28 6 For such other and further relief as the Court may deem just and proper. 110.2 05262021.000 4 COMPLAINT FOR BREACH OF CONTRACT; MONEY HAD AND RECEIVED; ACCOUNT STATED Dated: March|4{__, 2019 WHITNEY, THOMPSON & JEFFCOACH LLP By auomeret i ifficoach C DIRECT, INC. 10 11 12 14 15 16 17 18 19 20 21 22 24 25 26 27 28 110.2 05262021.000 < 2 COMPLAINT FOR BREACH OF CONTRACT; MONEY HAD AND RECEIVED; ACCOUNT STATED EXHIBIT “A” LOAN AND SECURITY AGREEMENT THIS LOAN AND SECURITY AGREEMENT (“Agreement”) is made and entered into as of 0! , 2017 (the “Effective Date”), by and between (i) AMC DIRECT, INC, a Delaware corporation (“Lender”), and (ii) JOSE LUIS PADILLA BRACAMONTES (“Borrower”). RECITALS: This Agreement is made with respect to the following facts and circumstances. A Lender is in the business of packing, selling, and marketing fresh agricultural products. Lender also provides development financing to certain of its qualifying growers. B. Borrower is the owner of certain farm property CARRETERA MEXICALI A SAN FELIPE KM 178 MNA 7 L2 PLAN NATIONAL AGRARIO CP 21850 SAN FELIPE, MEXICALI, B.C. MEXICO, parcel number 164 Z-4 P1/land incorporated herein by this reference (the “Property”). Cc Borrower has requested, and Lender has agreed to provide certain crop the financing for the crops to be grown by Borrower on the Property, on the terms and subject to conditions as herein set forth. NOW THEREFORE, in consideration of the recitals and agreements contained herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows: ARTICLE I THE LOAN 11 The Crop Financing. Lender shall make funds available for certain of Borrower's cultural, picking and packing costs on the Ranch Property (sometimes hereinafter referred to as "advances") up to an aggregate amount not to exceed the total principal amount of Two Hundred Ten Thousand and No/100 Dollars ($210,000.00), subject to the terms and conditions set forth below (collectively, the "Crop Financing"). The Crop Financing shall be evidenced by and repaid in accordance with the terms of a promissory note in the form substantially similar to the note attached hereto as Exhibit "A" and incorporated herein by this reference (the "Secured Promissory Note"), which Borrower shall execute and deliver to Lender concurrently with the execution and delivery of this Agreement. In particular, the Secured Promissory Note will provide for the accrual of interest on the outstanding principal balance equal to three percent (3.00%) per annum. All principal and interest under the Secured Promissory Note shall be payable in accordance with the terms of the Secured Promissory Note but in no event later than December 31, 2017. The Secured Promissory Note by and between 1941996v1 / 18876.0001 Lender and Borrower will allow Lender to withhold from Borrower's crop proceeds the amount of principal and interest advanced under the Secured Promissory Note. 1.2 Use of Crop Financing. Borrower shall use the Crop Financing only for cultural work on the 2017 table grape crop, which shall consist of Flames and Sugraones grape varieties, and for no other purpose whatsoever except as expressly set forth in this Agreement. 13 No Obligation for Additional Financing. BORROWER EXPRESSLY ACKNOWLEDGES AND AGREES THAT LENDER HAS NO EXPRESS OR IMPLIED OBLIGATION TO EXTEND THE MATURITY DATE OF THE SECURED PROMISSORY NOTE, OR TO PROVIDE BORROWER WITH ANY ADDITIONAL FINANCING FOR THE DEVELOPMENT OF THE PROPERTY NOT SPECIFICALLY DESCRIBED HEREIN. If Lender, in its sole discretion, advances funds for crop expenses at Borrower's request in excess of the amounts stated above or at a time when it is not obligated to do so (including without limitation any advance made after the maturity date of the Secured Promissory Note), such advances shall nevertheless be subject to the terms and conditions of this Agreement and shall be deemed advanced under the Secured Promissory Note. Repayment of such advances shall be secured by all the security provided to Lender for repayment of the Secured Promissory Note. ARTICLE I CROPS AND MARKETING 2.1 Crops. Beginning on the Effective Date and continuing until the expiration or termination of the Marketing Agreement (as defined below), Borrower agrees to operate and maintain a vineyard on the Property consisting of the following grape varieties: Flames, Vintage Red, and Scarlet Royals. 2.2 Marketing. Concurrent with the execution of this Agreement, Borrower and Lender shall execute a marketing agreement substantially in the form attached hereto as Exhibit "B" and incorporated herein by this reference (the "Marketing Agreement"), pursuant to which Borrower appoints Lender as its agent to market the Flames and Sugraones grapes the growing or to be grown, matured or harvested on the Property during the Term (as defined in Marketing Agreement) as follows: a minimum of 70,000 cases per season of Flames and Sugraones. ARTICLE III SECURITY AGREEMENT 3.1 Grant of Security Interest, Borrower hereby grants to Lender a security interest in the Collateral described in Section 3.3 and its proceeds to secure payment and performance of the duties and obligations described in Section 3.2, pursuant to the terms and subject to the conditions set forth herein. 3.2 Obligations Secured. The security interest granted by Borrower to Lender in the Collateral and its proceeds is given to secure the “Obligations” of Borrower which are defined as: 1941996vI / 18876.0001 @ Any and all debts, obligations and liabilities of Borrower to Lender arising out of or related to the Secured Promissory Note, together with interest thereon, and renewals or extensions thereof, and any and all promissory notes hereafter made by Borrower in replacement or in addition to the Secured Promissory Note, payable to the order of Lender, or its assignee; (b) Any and all debts, obligations, and liabilities of Borrower to Lender arising out of or related to the Property; (©) Any and all debts, obligations and liabilities of Borrower to Lender arising out of or related to the Loan Documents. For purposes of this Agreement, “Loan Documents” means, collectively, this Agreement, the Secured Promissory Note, the Financing Statement (as defined below), the Marketing Agreement, the Insurance Proceeds Assignment (as defined below), and all documents and instruments executed in connection herewith or therewith, as originally executed or as the same have been or may from time-to-time be supplemented, modified, amended, restated, extended or replaced; @) Any and all obligations and liabilities of Borrower under the Loan Documents, and all amounts advanced or expended by Lender or its assigns under the terms of any of the Loan Documents; @) Any and all other obligations of Borrower to Lender, direct, indirect or contingent, joint or several, whether or not otherwise secured, and whether now existing or hereafter incurred; and ® Any and all amounts advanced or expended by Lender for the maintenance or preservation of the Collateral. 3.3 Description of Collateral. The term “Collateral” in this Agreement shall described mean and include, and the security interest created herein shall cover all the property nts in subsections (a) through (g) of this Section 3.3, as well as any additions and attachme thereto, and the proceeds and products thereof: (a) All crops, growing or to be grown, matured or harvested on the Property; () All Borrower's rights under any governmental agricultural in programs (including the Perishable Agricultural Commodities Act), rights to payments kind for crops or other farm products (including, insurance proceeds), revolving fund credits, patronage dividends, retains and other similar rights; (c) All Borrower’s rights in any equipment consisting of machines, machinery, tools, pumps, tractors, plows, rolling stock, motor vehicles and other equipment of all kinds and types, and all other items of personal property all of which is used in the farming operations of Borrower; @) All accounts receivable or money due to Borrower from every source generated by the sale of the crops, farms products, inventory or equipment 1941996v1 / 18876.0001 3 described in paragraphs (a) through (g) of this Section 3.3 whether currently owned or hereafter acquired by Borrower; ©) All farms products on or hereafter acquired by Borrower whether growing on, attached to, severed from, or harvested from and packaged for later sale in the form of bulk farm products or individually packaged units for immediate shipment and sale, or held in storage as inventory by Borrower for later sale, including the proceeds from any and all said sales; ® All of Borrower’s interests under any real property leases in which Borrower is a tenant; and (8) All products, natural increase, improvements, assessions, and additions thereto and replacements and proceeds thereof from the real or personal property described in paragraphs (a) through (f) above, whether currently owned or hereafter acquired by Borrower. 3.4 Terms and Conditions of Security Agreement. In addition to the representations, warranties and covenants contained elsewhere in this Agreement, Borrower hereby represents, warrants and covenants to Lender as follows with respect to the security interest granted in this Article 3. Borrower represents and warrants as follows: ql) Binding Obligation. The security interest granted in Article 3 of this Agreement constitutes the legal, valid and binding obligation of Borrower, enforceable in accordance with its terms, and the security interest grants to Lender a valid, perfected and enforceable lien on the Collateral. Borrower agrees to terminate any financing statements currently on file naming Borrower as “debtor”, and agrees that Borrower is not currently indebted to any third parties on account of any crops grown or sold in prior years. (2) Other Security Interests, Borrower will not execute or permit any liens or security interests (other than Lender’s security interest) to attach to the Collateral; dispose of any of the Collateral except in the ordinary t; course of business as it was conducted on the date of execution of this Agreemen dispose of any rights with respect to water, or leases used in connection with the Collateral; or permit anything to be done that may impair the value of the Collateral or the security interest granted in this Agreement without the prior written consent of Lender and where necessary unless also ordered by a court of appropriate jurisdiction. G) No Violation, By granting a security interest in the Collateral to Lender, Borrower will not violate any agreement, including, without limitation, partnership agreements, trust instruments, tenancy-in-common agreements, joint venture agreements, buy-sell agreements, marketing agreements, lease agreements or similar documents respecting or to which Borrower is a party. 1941996v1 / 18876.0001 10 @) Information. All information heretofore, herein or hereafter supplied to Lender by Borrower with respect to the Loan Documents or this Agreement is true and correct in all material respects. (b) Borrower covenants and agrees as follows: (1) Payment. To promptly pay to Lender all amounts due and payable under the Obligations, including, without limitation, the Secured Promissory Note, on or before the date when due and payable. (2) Repay Advances. Immediately pay Lender, as part of the Obligations, all amounts, with interest, paid or advanced by Lender for (i) taxes, levies, insurance, and repairs to or maintenance of the Collateral; (ii) the taking of possession of, disposing of, or preserving of the Collateral after any default described in this Agreement; and (iii) attorneys’ fees incurred by Lender in the enforcement of its rights under this Agreement. @) Good Husbandry. As to all crops and trees affected hereby, to attend to and care for such crops and trees, to do all acts which may at any time be necessary to grow, cultivate, spray, irrigate, cut, harvest, pick, clean, preserve and protect trees and vines according to the most approved methods of farming and husbandry; to give Lender prompt notice of any damage to such crops; to permit Lender to enter upon the Property at reasonable times for the purpose of examining the crops and trees; to prepare the crops for packing and marketing and when they are ready for packing and marketing to promptly notify Lender of that fact; to follow Lender’s instructions (if any) with reference to holding, shipping, storing and marketing the crops; and to keep the crops separate and always capable of identification. 4) Care of Collateral. As to all Collateral, including crops, to do all acts that may be necessary to maintain, preserve and protect the Collateral and to keep the Collateral in good condition and repair; to pay before delinquency all taxes, assessments and liens now or hereafter imposed upon the Collateral; not to sell, lease, encumber or dispose of all or any part of the Collateral; at any time upon demand of Lender to exhibit to and allow inspection by Lender of the Collateral; not to remove or permit the removal of the Collateral from the premises where it is now located, without the prior written consent of Lender; and to provide and maintain (and, if requested by Lender, to deliver to Lender) policies insuring the Collateral against loss or damages by such risks and in such amounts, forms and companies as Lender requires (and with loss payable solely to Lender if Lender so requests). If Lender takes possession of the Collateral, the insurance policy or policies and any unearned or returned premium thereon shall at the option of Lender become the sole property of Lender, upon Lender crediting the amount of any unearned premium upon the obligations secured hereby, such policies being hereby pledged and assigned to Lender. 1941996v1 / 18876.0001 11 6) Additional Documents. At any time, and from time to time, as Lender may request, to execute and deliver to Lender, assignments of insurance proceeds in any form requested by Lender (the “Insurance Proceeds Assignments”). Borrower shall also execute and deliver to Lender amendments or modifications to the above-described documents with respect to the Collateral (in number, form, and substance satisfactory to Lender) and such additional security documentation as and when Lender may request to effect the purposes of this Agreement; and deliver to Lender at its request reasonable financial information, accounts, budgets, books and records, reports, contracts, and other information relating in any manner to the Collateral. Borrower hereby authorizes Lender to file or record any documents necessary to perfect its security interest in the Collateral, including, without exception, a UCC-1 Financing Statement (the “Financing Statement”). (6) Duty to Notify Lender, Immediately notify Lender in writing when Borrower becomes aware of any event that substantially affects the value of the Collateral, the ability of Borrower or Lender to dispose of the Collateral, or the rights and remedies of Lender in relation to the Collateral, al including, without limitation, the levy of any legal process against the Collater and the adoption of any marketing order, arrangement, or procedur e affecting the Collateral, whether governmental or otherwise; and of any change in the name, identity or the structure of Borrower. (7) Additional Duties of Borrower. Upon Lender’s request, s notify any account debtors, buyers of the Collateral or other persons of Lender’ interest in the Collateral and its products and proceeds; make direct demand for and collect any receivables and proceeds of the Collateral. Borrower agrees to to execute such assignments or other documents as is necessary to enable Lender collect any receivables and proceeds of the Collateral; and do all things incident to such notifications, demands, and collection. (8) Collateral Proceeds. To account fully for and promptly , deliver to Lender, in the form received, all proceeds of the Collateral received endorsed to Lender as appropriate, and until so delivered all proceeds shall be r held by Borrower in trust for Lender, separate from all other property of Borrowe and identified as the property of Lender. 3.5 Appointment as Attorney-In-Fact. Borrower appoints Lender, and its Event of officers, as Borrower’s attorney-in-fact, with full power of substitution to (a) upon an Default (as defined in Section 7.1 below), sign any certificate or evidence of ownershi p, registration card, application therefor, affidavits, assignments or documents necessary to transfer title to any of the Collateral, to receive and provide a receipt for all licenses, registration cards and certificates of ownership and to do all acts necessary or incident to the powers granted to Lender herein, as fully as Borrower might, and (b) perform all acts and things that Lender may and to consider necessary or advisable to perfect and continue perfection of the security interest, g protect the Collateral, including, without exception, filing any necessary UCC-1 financin statement. 941996v1 / 18876.0001 12 3.6 Assignment of Rights in Collateral. Borrower hereby assigns to Lender right to all rents, issues, income and profits of or from the Collateral and grants the Lender the l in their possessio n. Borrower hereby contact and collect from third parties any of the Collatera the proceeds of sale further assigns to Lender all sums now or hereafter payable to Borrower as the terms from the Collateral, and any and all sums now or hereafter payable to Borrower under g of the Collateral . Should any of the Collatera l of any agreement for the sale or marketin public authority and Borrower becomes become infected with disease or be destroyed by order of hereby. assigns to entitled to be indemnified by the State or other public unit or agency, Borrower Lender all such sums due from said State or other public unit or agency, and Lender is hereby that such authorized to receive, collect and sue for same, and Borrower hereby orders and directs hereof sums be paid directly to Lender. Any monies received by Lender under the provisions The provisions may at its option be applied upon any indebtedness secured hereby, or released. Lender’s of this Section 3.6 shall not be construed, however, to waive or in any way affect right to deal with the security interest or the limitations contained herein upon Borrower’s in full all Collateral without Lender’s written consent. At such time as Lender has been paid Borrower shall sums due it by Borrower, Lender shall re-assign all interest in the Collateral and not be required to assign any further interest therein. 3.7 Rights of Lender; Waiver. It is specifically understood and agreed that any person now Lender may from time to time and without notice, release or otherwise deal with obligati on hereunde r or secured or hereafter liable for the payment or performance of any such obligatio n, and hereby, and renew, extend or alter the time or terms of payment of any n, or accept release, surrender, or substitute any collateral or other security for any such obligatio r of any type of further security therefor, without in any way affecting the obligations hereunde payment or Borrower, and consent is hereby given to delay or indulgence in enforcing performance of any such obligation, and diligence, presentment, protest and demand and notice liable for the of every kind, as well as the right to require Lender to proceed a; gainst any person or collect or payment of any such obligation or to foreclose upon, sell, or otherwise realize upon n or prior to apply any other property, real or personal, securing any such obligation, as a conditio r proceeding hereunder, are hereby waived. To the fullest extent permissible by law, Borrowe hereby waives the right to p lead the statute of limitations as a defense to any and all obligati ons secured hereby. Default, Borrower shall be in default hereunder upon the happening of 3.8 any event or condition described in Section 7.1 of this Agreement. 3.9 Remedies. In the case of an Event of Default (as defined in Section 7.1), : Lender may, subject to the provisions of Article 7, do any one or more of the following @ Declare all sums secured hereby immediately due and payable; (b) Immediately take possession of the Collateral wherever it may be l found, using all necessary force to do so, or require Borrower to assemble the Collatera ly and make it available to Lender at a place designated by Lender which is reasonab to convenient to Borrower and Lender, and Borrower waives all claims for damages due or arising from or connected with any such taking; 941996v1 / 18876.0001 13 Proceed in the foreclosure of Lender’s security interest and sale of (©) the Collateral in any manner permitted by law, or provided for herein; @ Sell, lease or otherwise dispose of the Collateral at public or private sale, with or without having the Collateral at the place of sale, and upon terms and in such manner as Lender may determine, and Lender may purchase same at any such sale; @) Retain the Collateral in full satisfaction of the obligations secured thereby; or Exercise any and all remedies of a secured party allowed under the @® Uniform Commercial Code. be Prior to any such disposition, Lender may, at its option, cause any of the Collateral to repaired or reconditioned in such manner and to such e’ xtent as Lender may deem advisable , and Ifa any sums expended therefor by Lender shall be repaid by Borrower and secured hereby. sufficient sum is not realized from any such sale to pay all the Obligations, Borrower hereby promises and agrees to pay Lender any deficiency. 3.10 Additional Rights of Lender. Lender, at its option and without prior n to notice to Borrower, whether before or after an Event of Default, may, but without obligatio s and do such acts as do so, and without notice to or demand upon Borrower, make such payment purchase, Lender may deem necessary to protect its security interest in the Collateral; pay, to Lender's contest, and compromise any encumbrance, charge or lien which is prior or superior g any security interest and which is not expressly approved in this Agreement, and in exercisin and pay reasonab le fees such powers and authority, pay necessary expenses, employ counsel of the therefore; pay for the repair, improvement, testing, maintenance and preservation Collateral; pay any filing, recording, registrat ion, licensing or ce! tification fees or other fees and and protect the Collater al and charges related to the Collateral; take any other action to preserve y or Lender’s rights and remedies under this Agreement as Lender may deem necessar immedia tely, and without demand, all sums so appropriate. Borrower hereby agrees to repay expended by Lender under this Section 3.10, with interest from the date of expendit ure at the rate of ten percent (10%) per annum. 3.11 Right to Possess and Care for the Collateral Upon an Event of limiting the Default, In the case of an Event of Default, Lender is hereby authorized (without on of the Collatera l, to go general nature of the authority hereinabove conferred) to take possessi farm, manage, grow, upon the land where any crops affected hereby are located and care for, connection protect, harvest, preserve, remove and market the crops, and to take such measures in therewith as Lender shall deem adequate and proper. Borrower hereby agrees to repay Section 3.11, with immediately, and without demand, all sums so expended by Lender under this interest from the date of expenditure at the rate of ten percent (10%) per annum. 3.12 Remedies Cumulative. Lender shall have the right to enforce one or Lender more remedies hereunder successively or concurrently, and such rights and remedies of , any are cumulative of any other rights or remedies at law or equity, including, without limitation 1941996v1 / 18876.0001 14 right of setoff to which Lender may be entitled. Lender’s exercise of any one or more of the rights or remedies provided in this Agreement or at law or equity shall not be deemed an election of rights or remedies or a waiver of any other right or remedy. 3.13 Receiver. In any action of foreclosure, Lender shall be entitled to the appointment of a receiver with the minimum notice required by applicable law, to take possession of all or any part of the Collateral and to exercise such powers as the Court shall confer upon Lender and/or the receiver. ARTICLE IV CONDITIONS PRECEDENT 4.1 Conditions Precedent to Lender’s Obligations, Lender’s obligations under this Agreement are expressly made subject to the satisfaction of each one of the following conditions: (a)Lender’s receipt of each of the following documents duly executed and acknowledged as appropriate: (1) This Agreement; @) The Secured Promissory Note in accordance with Section 1.1 above; G) The Insurance Proceeds Assignments in accordance with Section 3.4(b)(5) above; and (4) The Marketing Agreement. (b) The representations and warranties contained in this Agreement or otherwise made in connection with this Agreement shall be accurate and complete in all material respects and Lender shall not have discovered any misrepresentation or inaccuracy therein. ARTICLE V BORROWER’S REPRESENTATIONS AND WARRANTIES As an inducement to Lender to enter into this Agreement, Borrower hereby makes the following representations and warranties to Lender. 5.1 Authority, Borrower has full power, authority and legal right to execute, deliver and perform this Agreement. The execution, delivery and performance of this Agreement does not in any way violate or conflict with (a) any law or any order of any court or governmental agency, (b) any contract, instrument or agreement to which Borrower is a party or by which Borrower or the assets of Borrower are bound, or (c) any right, title or interest of any other person or entity with respect to any assets of Borrower. 1941996v1 / 188760001 15 Execution. The Borrower has duly-executed this Agreement, and any 5.2 documents to be executed concurrently herewith or pursuant hereto, and no other approvals are such necessary for the consummation by Borrower of its obligations under this Agreement or any other documents, 5.3 Truth of Representations. Each statement made in this Agreement, including the recitals and exhibits hereto (subject to any qualifications stated in such statements) is true, correct and complete; and each representation, warranty, acknowledgment and statement or of fact (subject to any qualifications stated in such representation, warranty, acknowledgment , statement) made to Lender by or on behalf of Borrower in any instrument, agreement, certificate t, is true, financial statement or other document provided in connection with this Agreemen correct and complete. 5.4 Liens and Encumbrances. The Collateral shall not be subject to any or prior liens or encumbrances. No person (whether an individual, trust, partnership, corporation other entity) that is not a party to this Agreement or to the document s executed pursuant to this Agreement has, or to the knowledge of Borrower claims to have, any legal or beneficial ownership interest in any of the Collateral. Litigation. There is no action, suit, arbitration, claim, cause of action or 5.5 other proceeding at law or in equity (or by or before any governmental agency, official, commissioner, board, bureau, instrumentality or authority of any local, state or federal d against government) now pending or, to the best of Borrower’s knowledge an