UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
FORM 10-K
(Mark One)
X Annual report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 [Fee Required] for the
fiscal year ended DECEMBER 31, 1995 or
Transition report pursuant to section 13 or 15(d) of
the Securities Exchange Act of 1934 [No Fee Required]
for the transition period from to .
Commission File No. 1-4385
DUNES HOTELS AND CASINOS INC.
(Exact name of registrant as specified in its charter)
NEW YORK 11-1687244
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or No.)
organization)
4045 South Spencer, Suite 206, Las Vegas, Nevada 89119
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (702) 732-7474
Securities Registered Pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
NONE NONE
Securities Registered Pursuant to Section 12(g) of the Act:
SERIES B, $7.50 CUMULATIVE
COMMON STOCK, $.50 PAR VALUE PREFERRED STOCK, $.50 PAR VALUE
(Title of class) (Title of class)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)
The aggregate market value of the voting stock held by
non-affiliates of the Registrant (2,007,453 common shares) computed
by reference to the price at March 1, 1996 ($.09375 per share)
was approximately $188,198. No market value is assigned to the
Series B preferred stock. See "Item 5. Market for Registrant's
Common Equity and Related Matters".
The number of shares of common stock outstanding as of March 1,
1996 was 6,375,096.
Documents Incorporated by Reference Not Applicable
This document consists of pages with exhibits, pages
without exhibits.
ITEM 1. BUSINESS
Dunes Hotels and Casinos Inc. was incorporated in New York
in 1956. In this report the term "the Company" refers to Dunes
Hotels and Casinos Inc., individually, or with its wholly-owned
subsidiaries, Continental California Corporation (Continental),
Dunes Inc., Dunes Hotel and Casino of Atlantic City Inc. (DAC), M
& R Corporation (MRC) and MRC's subsidiary M & R Investment
Company, Inc. (MRI) and MRI's subsidiaries SHF Acquisition
Corporation (SHF) and Southlake Acquisition Corporation
(Southlake).
On May 18, 1995, Continental filed a Petition for Relief
Under Chapter 11 of the United States Bankruptcy Code. The
Petition for Relief was filed in the United States District of
Nevada, Case No. 95-21992 LBR. The case was subsequently
transferred to the United States Bankruptcy Court for the
Southern District of California. The bankruptcy case was
dismissed on November 9, 1995.
The Company considers its principal business to be the
acquisition, development and sale of real estate, and related
financing thereof. In that connection, the Company has invested
in a number of operating entities or properties, the most
significant of which is engaged in the retail land sales
business. Other enterprises, which are held primarily for their
real estate investment potential, include less significant
operations in rice storage and drying, cattle feeding and
rentals. Because these operations are continued primarily to
minimize the carrying costs of the underlying real estate
investments, pending their ultimate disposition, management
considers the Company to be engaged in only one business segment,
real estate-related investments.
RESOLUTION OF SASA DISPUTE AND THE SAN DIEGO PROPERTY
Continental owned four parcels of unimproved noncontiguous
real property located northwest of San Diego, California (the San
Diego Property). The San Diego Property was encumbered by a Deed
of Trust in favor of San Antonio Savings Association (SASA),
which real property was pledged as partial security for the
Company's obligation to SASA (the SASA Obligation) relating to
the Company's guarantee of a loan by SASA in the original amount
of $15,000,0000.
From 1988, in connection with the SASA Obligation, the
Company has been involved in various disputes and litigation with
SASA and the Resolution Trust Corporation as receiver for SASA
(the RTC). On November 28, 1994, the RTC recorded a Notice of
Default and Election to sell the San Diego Property. On February
2, 1995, the Company, along with Continental and another
subsidiary, filed a lawsuit in the United States District Court,
Southern District of California against the RTC and SASA, seeking
(i) an injunction to enjoin the RTC and SASA from foreclosing on,
and selling the San Diego Property, (ii) damages in excess of
$5,000,000, and (iii) an accounting by the RTC and SASA. On
April 3 and May 8, 1995, the District Court denied the Company's
request for an injunction. The Company then sought stay relief
from the United States District Court of Appeals for the Ninth
Circuit. On May 18, 1995, the Court of Appeals denied the
Company's request for stay relief. The Company received notice
of a trustee's sale of the San Diego Property scheduled for May
19, 1995. Because the San Diego Property would otherwise be
subject to sale on that date, Continental filed a petition for
Relief under Chapter 11 of the United States Bankruptcy Code on
May 18, 1995. The bankruptcy case was subsequently transferred
to the United States Bankruptcy Court for the Southern District
of California.
On October 24, 1995, the Company, along with Continental,
MRI and SHF, entered into a Settlement, Release and Loan
Modification Agreement (the Settlement Agreement) with the RTC in
connection with the SASA Obligation, which the RTC alleged was
$21,107,796 as of October 10, 1995. The Settlement Agreement
became effective on December 6, 1995. As a result of the
settlement, the Company recorded a one-time extraordinary gain of
$8,346,000. Pursuant to the terms of the Settlement Agreement
and as full payment of the SASA Obligation, (i) Continental
transferred the San Diego Property to the RTC in consideration of
a $1,500,000 credit against the SASA Obligation, (ii) the Company
paid $290,000 to the RTC, and (iii) the Company delivered a
secured promissory note to the RTC (the RTC Settlement Note) in
the amount of $2,710,000. In addition, Continental received an
order dismissing its bankruptcy case, and the Company received
orders dismissing all of the litigation between the Company, SASA
and the RTC. The RTC Settlement Note bears interest at an annual
rate of 1% over the prime rate, adjustable semi-annually;
provided, however, that the interest rate shall not be less than
8% or more than 12% per annum. The RTC Settlement Note requires
monthly payments of interest until December 6, 2000, at which
time the entire unpaid principal amount and all accrued and
unpaid interest is due. The RTC Settlement Note is
collateralized by (i) a deed of trust (the Rancho Murieta Deed of
Trust) on 69 unsold residential lots at The Fairways in Rancho
Murieta, California, (ii) a deed of trust (the Nevada Deed of
Trust) on 53 partially developed residential lots located in Las
Vegas, Nevada, and (iii) a collateral assignment (the Collateral
Assignment) of purchase money promissory notes (the SHF Notes) in
the aggregate principal amount of $725,520 secured by 7
residential lots previously sold at The Fairways.
REAL ESTATE AND RELATED ACTIVITIES:
THE FAIRWAYS
The Company, through SHF, developed approximately 50 acres
of real property as a residential planned unit development known
as "The Fairways" in Rancho Murieta, California. Rancho Murieta
is a 3,500 acre master planned unit development located
approximately 25 miles from Sacramento, California. Rancho
Murieta consists primarily of single family homes, town houses,
commercial property and two 18-hole championship golf courses,
including country club facilities. The Fairways, located within
the boundaries of one of the golf courses at Rancho Murieta, was
subdivided into 110 single family estate lots. As of March 1,
1996, 69 lots remain unsold.
In connection with its development of The Fairways, SHF was
required to construct several water, sewer and drainage
facilities (The Improvements) that are oversized to serve lands
outside the boundaries of The Fairways (the Benefited
Properties). SHF and Rancho Murieta Community Services District
(the District) have entered into an agreement (the Reimbursement
Agreement) wherein SHF and the District have agreed that the
total cost of The Improvements was $1,597,425 and that of this
amount, $276,088 is allocable to The Fairways and $1,321,337 is
allocable to the Benefited Properties. SHF and the District also
agreed that future construction of certain other facilities will
benefit both The Fairways and the Benefited Properties. The
Reimbursement Agreement provides that the amount that will be
allocable to The Fairways will be approximately $176,500 and will
be deducted from the amount due SHF resulting in a net amount due
to SHF of approximately $1,140,900. The funds will be reimbursed
to SHF out of proceeds of any subsequent community facilities
district or by direct payment by subsequent developers of the
Benefited Properties. SHF's right to reimbursement under the
Reimbursement Agreement will expire in twenty years. The Company
is unable to predict what amount, if any, will be received under
the Reimbursement Agreement. The rights to reimbursement under
the Reimbursement Agreement are personal to SHF and do not run
with The Fairway property unless assigned by SHF.
As part of the development of The Fairways, SHF entered into
a Parks Development Agreement dated February 20, 1991, (the Parks
Agreement) with Rancho Murieta Association (RMA). The Agreement
provides, among other things, that the developers of properties
in Rancho Murieta pay to RMA a park fee for each developed lot.
It was RMA's contention that the park fees were due in full when
the common areas within a subdivision are annexed into RMA. SHF
maintained that the park fees, applicable to each lot, were due
only when that lot was sold. In August 1994, SHF entered into a
Settlement Agreement Regarding Payment of Park Fees (the Park Fee
Payment Agreement). The Park Fee Payment Agreement acknowledged
that the total park fees owing to RMA were $173,238. The Park
Fee Payment Agreement further provided that SHF would pay $17,323
upon signing of the Park Fee Payment Agreement and that the
balance would be paid ratably as the remaining lots were sold.
In the event all of the lots are not sold by December 31, 1997,
then any remaining amount due must be paid in full. In the event
that SHF makes any sale or transfer of multiple lots within the
Fairways to any other person, the allocable share of the SHF park
fees attributable to the lots so conveyed shall be immediately
due and payable to RMA. However, SHF is permitted to transfer
multiple lots to an entity in which SHF holds at least a 50%
interest without accelerating payment of the park fees allocable
to the lots transferred.
As part of the Settlement Agreement described above with the
Resolution Trust Corporation as Receiver for San Antonio Savings
Association (the RTC), all of the unsold lots in The Fairways are
encumbered by a deed of trust in favor of the RTC. The deed of
trust requires a $40,000 payment for the release of a lot.
On January 16, 1996, the Company signed a Letter of Intent
with West Coast Properties, LLC (WCP), whereby WCP offered to
purchase from the Company, 20 lots (the Phase I Lots) at The
Fairways and obtain an option to purchase an additional 20 lots
(the Phase II lots), with the intent of constructing single
family residences on the lots purchased. The purchase price of
the Phase I Lots would be the sum of $40,000 per lot plus payment
of the Park Fees applicable to the Phase I Lots. In addition,
the Company would receive 20% of the gross sale price of each
residential dwelling sold, less $40,000 (the Phase I Success
Payments), which would be paid to the Company upon the close of
each escrow. The option to purchase the Phase II Lots would be
exercisable upon WCP's sale of an aggregate of any 15 of the
Phase I Lots with completed single-family residences located on
such lots and the Company's receipt of the Phase I Success
Payments. The option expires on June 30, 1997, unless extended
by mutual agreement of the parties. When WCP notifies the
Company that it intends to exercise the option it will make a
$25,000 non-refundable deposit, which deposit will be applied to
the purchase of the Phase II Lots upon exercise of the option.
The purchase price of the Phase II Lots will be $45,000 per lot
plus payment of the Park Fees due on the Phase II Lots. In
addition, the Company would receive 20% of the gross sale price
of each residential dwelling sold, less the $45,000, (the Phase
II Success Payments), which would be paid to the Company upon the
close of each escrow. The Company will be permitted to sell any
of the Phase II Lots until such time as WCP exercises its option.
Any Phase II Lots sold by the Company will be replaced with
comparable lots. The parties are currently negotiating the final
terms of the document. No assurance can be given that the
parties will be successful in completing the final documentation.
GRAIN STORAGE AND RICE DRYING FACILITIES
SHF owns a grain storage facility (The Storage Facility)
located in Yolo County, California. The Storage Facility
generally stores, for a fee, grains owned by various grain
growers, grain co-ops and grain processors. The Storage Facility
can store approximately 34,000 tons of grain.
In July 1993, SHF entered into a lease agreement with
California Dehydrating Co. (Cal-Dehy), an entity controlled by
John B. Anderson, the Chairman of the Board, President and
controlling stockholder of the Company (each entity controlled by
John B. Anderson will hereinafter be identified as an Anderson
Entity), whereby SHF leased a rice drying facility (the Drying
Facility), owned by Cal-Dehy, located in West Sacramento,
California. The term of the lease is for three years at an
annual rental of $60,000. As a result of entering into the
aforementioned lease, it was no longer necessary to retain
Cal-Dehy to operate the storage facility. In connection with its
operation of the drying and storage facility, it became necessary
for SHF to become licensed by the Commodity Credit Corporation.
In February 1995, the Drying Facility was the subject of a
foreclosure action which terminated the SHF lease. On March 1,
1995, the Company entered into a new lease with the new owner of
the Drying Facility. The term of the new lease is for 2 years at
an annual rent of $54,000.
On January 1, 1996, the Company entered into an agreement
with Cal-Dehy whereby the Company would pay to Cal-Dehy $60,000,
payable $5,000 per month, for the use of the Cal-Dehy name and a
Covenant Not To Compete. The agreement, including the Covenant
Not to Compete, is for one year.
In January 1996, the Company's Board of Directors authorized
management to pursue the possibility of constructing a new drying
facility adjacent to the rice storage facility in Yolo County,
California (The New Drying Facility). The cost of constructing
The New Drying Facility is estimated to be between $1,300,000 and
$1,500,000. The Company has made a $47,484 deposit on a rice
dryer in anticipation of constructing The New Drying Facility.
The total cost of the rice dryer is $221,373. Construction of
The New Drying Facility is subject to various governmental
approvals and the ability of the Company to obtain adequate
financing. It is anticipated that construction of the New Drying
Facility will begin in November 1996, and be completed in July
1997. In the event the Company does not proceed with the
construction of The New Drying Facility, the Company will lose
its deposit on the rice dryer.
WHITE RANCH
The Company, through Southlake, owns a 50% interest in the
White Ranch which consists of approximately 10,000 acres of
agricultural land, located in Kings and Tulare Counties,
California. The other 50% owner and Southlake share equally in
profits and losses on the operation and sale of the White Ranch.
Approximately 5,850 acres of the White Ranch have been leased for
the 1996 crop year, to various tenants at rents ranging from
approximately $40 to $75 per acre. Of the 10,000 acres, only
8,000 acres are farmable in its present condition. Tenants are
required to pay all water usage charges applicable to the leased
land.
SAM HAMBURG FARM
MRI owns approximately 150 acres of agricultural property
called Sam Hamburg Farm (Hamburg Farm) in Fresno and Merced
Counties, California. MRI's 150 acres are operated by SHF. Of
the 150 acres, 40 acres contain the airstrip and the shop areas
which are the focus of continuing attempts at chemical clean-up.
The remaining 110 acres are leased to various tenants at an
annual rental of approximately $20,000.
In connection with a potential 1991 sale of a portion of
Hamburg Farm, SHF was advised of possible contamination on the
site. The Company retained a specialist to inspect the sites,
take samples, analyze the samples and report to the Company. The
specialist indicated that there were two major sites of chemical
spillage, a storage facility for diesel fuels and an old airstrip
which had been used for the loading and fueling of aircraft
applying agricultural chemicals to the surrounding farm lands.
The Company has substantially completed the cleanup relating to
the diesel storage tanks at a cost of approximately $100,000.
Clean up of the airstrip has required major excavation of
contaminated earth and the treatment and disposal thereof. The
Company has disposed of a large amount of the contaminated earth
at an approved site for the storage of toxic wastes. However,
4,000 cubic yards of contaminated earth still remain to be
disposed of. The Company, through its chemical and toxic clean-up
consultant, has been working with the California State
Environmental Protection Agency, in seeking alternate means to
the disposal in toxic dump sites of chemical and toxics-laden
soil. The State has participated in the funding of several
projects by a number of chemical treatment firms in efforts to
try other detoxification methods on the soil.
Because of the ongoing testing the State has not imposed a
disposal date upon the Company. Cost of disposal is estimated at
$100 per cubic yard. The Company is unable to predict when the
ongoing testing will be completed or what the outcome of these
tests will be. As of December 31, 1995, the Company has paid
$448,000 and has accrued $60,000 relating to the clean up,
including the $100,000 expended for the diesel storage tanks.
The Company has not made an accrual for the cost, if any, of
removing the contaminated earth pending the results of the
various ongoing tests.
RESIDENTIAL LOTS, NORTH LAS VEGAS
On May 3, 1995, the Company, through a foreclosure sale,
acquired 53 partially developed residential lots in North Las
Vegas, Nevada. The 53 lots were formerly owned by Pine Ridge
Joint Venture (PRJV). As part of the Settlement with the RTC,
the 53 lots are encumbered by a deed of trust in favor of the
RTC. The Nevada Deed of Trust requires a $6,000 payment for the
release of a lot.
AJD JOINT VENTURE
In June 1993, MRI entered into a joint venture known as PRJV
with AJD, a Nevada limited partnership, for the purpose of
developing approximately 92 single family residences in Clark
County, Nevada. The development was scheduled to be completed in
two phases consisting of 32 residences which were to be completed
in 1994 in the first phase and the balance to be completed in
1994 and 1995 in the second phase. The holder of the first lien
on the land in the second phase, which consisted of 53 partially
developed residential lots, filed a Notice of Default and
Election to Sell Under Deed of Trust. On May 3, 1995, SHF
acquired the lots at the foreclosure sale for approximately
$440,000. See "Residential Lots, North Las Vegas" above. MRI
made an initial contribution to the joint venture of $500,000 in
return for a 20% interest in the joint venture capital and
profits. During 1994, MRI contributed, both in the form of
capital and loans, an additional $280,000 and in return received
an additional 31% interest in the joint venture capital and
profits bringing MRI's interest to 51% as of December 31, 1994.
MRI is to receive a preferential distribution on its capital
contributions and loans plus 15% interest thereon. On November
1, 1994, the Company assumed all management responsibility of the
joint venture. See Item 7. -- "Management's Discussion and
Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources."
SOLANO COUNTY OPTION
The Company has an option (the Solano County Option) to
acquire approximately 1,690 acres of farm land located in Solano
County, California. The Company acquired the Solano County
Option as part of a settlement agreement between Baby Grand Corp.
(BGC), an Anderson Entity, Bank One and MRI. The purchase price
of the Solano County Option was $1,043,902. The Solano County
Option provides that the Company can purchase the 1,690 acres at
a price of $3,000,000. The Company will receive a credit of
$1,000,000 against the purchase price. The option expires on May
1, 2003. Upon certain conditions and the consent of the first
lienholder on BGC's Maxim Hotel and Casino and the Nevada Gaming
Control Board, MRI can require BGC to repurchase the Solano
County Option (The Repurchase Agreement). The Repurchase
Agreement expires on the earlier of: (i) May 1, 2002 or (ii) 1
year prior to the date the Option Agreement expires.
OTHER ACTIVITIES:
CERTAIN LOANS
From time to time the Company has made loans to various
Anderson Entities, Directors and Executive Officers and other
unrelated third parties. All loans to related parties were
approved by the Company's Audit Committee. The most significant
of these are as follows:
BABY GRAND CORP.
BGC d/b/a Maxim Hotel and Casino (the Maxim), Las Vegas,
Nevada, an Anderson Entity, owed the Company $2,523,000 plus
accrued interest in the amount of $171,000 at December 31,1995,
pursuant to a promissory note dated November 2, 1992, in the
original amount of $2,650,000 (the BGC Note). The BGC Note bears
interest at the rate of 9% per annum. Monthly payments under the
BGC Note are currently $50,000. The BGC Note is due in full on
December 1, 1997 at which time the note to the present holder of
the first deed of trust indebtedness on The Maxim is due. BGC is
precluded from paying the final installment due on the BGC Note
until it pays the amount due to the present holder of the first
deed of trust indebtedness. If BGC is unable to pay the amount
due to the present holder of the first deed of trust
indebtedness, it would have a material adverse effect on the
Company's ability to collect on the BGC Note. If BGC is unable
to make the final payment, the Company would have a loss of
approximately $1,732,000 for which $1,400,000 has been previously
provided. The BGC Note is collateralized by approximately
1,280,000 shares of the Company's common stock. BGC is current
in payment of monetary obligations under the BGC Note. The
present holder of the first deed of trust indebtedness on The
Maxim filed and later canceled a Notice of Breach and Election to
Sell under its indebtedness in July 1995. Since that time, the
first trust deed holder has threatened a further declaration of
default primarily as a result of the appointment of a receiver
for Mr. Anderson's assets (See Item 12, "Security Ownership Of
Certain Beneficial Owners And Management"). In the event the
Maxim first trust deed holder declares a default, the BGC Note
will also be in default.
RANCHO MURIETA PROPERTIES, INC./CBC BUILDERS, INC.
During 1990 and 1991, the Company, through certain of its
subsidiaries, made loans to Rancho Murieta Properties, Inc.
(RMPI) (the RMPI Note) and to CBC Builders, Inc. (CBC) (the
RMPI/CBC Loan) each of which are Anderson Entities located in
Rancho Murieta, California, in the approximate amount of
$1,400,000.
The notes were collateralized by subordinated liens on
undeveloped land owned both by RMPI and CBC and an assignment of
notes receivable due CBC by Rancho Murieta Country Club (RMCC).
In April 1994, the Federal Deposit Insurance Corporation (the
FDIC) foreclosed on all of the properties owned by CBC. In June
1994, an arbitrator ruled that the notes owing to CBC by RMCC
were unenforceable. The assignment of the RMCC notes was subject
to an inter-creditor agreement between SHF, MRI, and RMPI'S and
CBC'S legal counsel (the Inter-Creditor Agreement).
In connection with a settlement agreement (the Agreement)
between RMPI and the Pension Trust Fund for Operating Engineers
(PTF) and RMCC, the Agreement provided for a payment in
satisfaction of certain of the obligations that had been pledged
to SHF and MRI. Pursuant to the terms of the Inter-Creditor
Agreement, MRI and SHF received, on June 7, 1995, $345,337 of the
final settlement payment. The Company does not anticipate
receiving any further payments, with the exception of the
assigned directors fees, on either the RMPI Note or the RMPI/CBC
Loan and therefore has written off the balance of the loans,
$1,055,000, against their related reserve.
Mr. Anderson and Erik J. Tallstrom, a member of the
Company's Board of Directors, who also has an interest in RMPI
and CBC, assigned their directors fees to the Company to be
applied to the RMPI Note and the RMPI/CBC Loan. The assignment
continues to remain in effect until changed by the Board of
Directors.
DIRECTORS
In 1992, Mr. Andrew Marincovich, a member of the Company's
Board of Directors and Chairman of the Company's Audit Committee,
brought to the Company's Board of Directors, a proposal whereby
the Company and El Dorado Vineyards (El Dorado), a company
wholly-owned by Mr. Marincovich, would form a joint venture to
raise table grapes on vineyard land in which, according to Mr.
Marincovich, he had a 10% interest. During the course of the
Company's due diligence period, Mr. Marincovich informed the
Company that he had acquired the remaining 90% interest in the
vineyard land. During the course of its due diligence period,
the Company advanced $500,000 which was to be the Company's
contribution to the joint venture. At the end of the due
diligence period, the Company decided not to go forward with the
joint venture and the advance was converted to a term loan to El
Dorado.
In an effort to protect the Company's interest in ultimately
collecting the loan, the Company continued to advance funds (a)
to El Dorado, which funds were used by El Dorado for operating
expenses and (b) for payments, on behalf of Mr. Marincovich, to
the first lienholder on the vineyard land. The advances were
evidenced by notes signed by El Dorado. In addition, Mr.
Marincovich signed his personal guarantee, the recourse under
which was limited to the vineyard land and assigned his directors
fees to the Company to be applied to the El Dorado loans. The
assignment continues to remain in effect until changed by the
Board of Directors. Mr. Marincovich also executed a power of
attorney coupled with an interest to MRI or MRI's designee
allowing MRI or the designee the full right, power, and authority
to execute any and all documents necessary to sell, transfer,
and/or otherwise convey the vineyard land.
In December 1995, the Company informed both Mr. Marincovich
and the first lienholder that it would no longer farm the
vineyard and therefore would no longer advance any additional
funds. The Company was advised that Mr. Marincovich was unable
to make the required payments to the first lienholder on the
vineyard land. On December 27, 1995, the first lienholder filed
a Notice of Default and Election to Sell Under Deed of Trust. In
the event the vineyard land, owned by Mr. Marincovich, is sold at
the foreclosure sale for more than the demand of the first
lienholder, estimated to be approximately $1,400,000, Mr.
Marincovich is entitled to any excess proceeds. Pursuant to Mr.
Marincovich's guarantee, the Company asserts a claim against such
excess proceeds, if any.
As a result of the foregoing, the Company has written off as
a bad debt, approximately $881,000, which includes both principal
and unpaid interest, that was advanced to El Dorado.
OTHER TRANSACTIONS
In July 1995, the Company committed to invest up to $200,000
in a cattle feeding operation, with an unrelated third party,
known as Steadfast Cattle Co. (Steadfast). The feed lot is
located in Gonzales, California on land leased from the former
operator. The operation consists of feeding both beef and dairy
cattle on a per diem basis. It is estimated that it will take
between 5,000 and 6,000 head of cattle in order for the operation
to break even. As of March 1, 1996, there were approximately
1,200 head of cattle in the feed lot. In addition to its
original commitment, the Company has purchased approximately
$225,000 of equipment that it leases to the feed lot operation.
On November 17, 1995, the holder of the first mortgage lien
on the feed lot, leased by Steadfast, filed a Notice of Default
and Election to Sell Under Deed of Trust. The Trustee Sale is
scheduled to take place on March 22, 1996. If Steadfast is unable
to negotiate a lease with the new owner of the feed lot, the
Company would be unable to recover its investment in the cattle
feeding operation and would suffer a significant loss on the sale
of the equipment that was purchased by the Company for use in the
cattle feeding operation.
MADDOCKS
In May 1990, the Company made a loan to William Maddocks, et
al, a Central California real estate investment group (Maddocks),
in the principal amount of $1,000,000. The loan was
collateralized by real property in northern California. Maddocks
paid all but $315,000 of the loan. In 1992, the Company and
Maddocks formed a partnership called Willows Ranch. The
Company's contribution was the balance remaining on the original
$1,000,000 loan and Maddocks contributed the net equity in the
real estate that served as collateral for the Company's loan. In
return for its contribution, the Company received a 25% interest
in the partnership. Existing liens on the property remained the
sole liability of Maddocks. The partnership agreement provided
that no distribution would be made to Maddocks until the Company
received its capital contribution plus cumulative interest at the
rate of 10% from June 1, 1992.
In November 1995, Maddocks and the Company agreed to sell
the partnership land, the partnership's only asset, for a price
of $835,000. The sale closed on February 5, 1996. Out of the
sale proceeds, the Company received cash of approximately
$209,000 and a 91.90% interest in a note in the amount of
$243,430. The note bears interest at the rate of 8.25% annually.
Principal payments of $24,343 plus accrued interest are due
annually commencing February 1, 1997 and continuing until
February 1, 2001, when the then remaining balance of principal
and accrued interest shall be all due and payable. The note is
collateralized by a deed of trust on the property sold.
TRI-STAR JOINT VENTURE
Tri-Star International Development (Tri-Star) and another
entity entered into a joint venture agreement relating to the
acquisition and development of real property located in North Las
Vegas, Nevada (the Tri-Star Joint Venture). Tri-Star held a 50%
interest in the Tri-Star Joint Venture (the Tri-Star Interest).
In April 1994, the Company invested $287,500 in the Tri-Star
Interest, in exchange for which the Company received a 25%
interest in the Tri-Star Interest. The Company's investment was
to be used for certain engineering costs and mapping the
property. The Company's interest was to be calculated as a
function of distributions payable to Tri-Star. As a result of
the Company's investment, the Company had an indirect 12 1/2%
interest in the Tri-Star Joint Venture.
On July 29, 1994, the other venturer in the Tri-Star Joint
Venture notified Tri-Star that Tri-Star had not fulfilled certain
of its obligations under the Tri-Star Joint Venture Agreement and
therefore the Tri-Star Joint Venture was terminated. Termination
of the Tri-Star Joint Venture had the effect of terminating the
Company's indirect interest in the Tri-Star Joint Venture (and
the property to be developed).
In January 1995, Tri-Star and the other venturer in the Tri-Star
Joint Venture agreed to take the issue of termination of the
Tri-Star Joint Venture to arbitration. The Company intervened in
the arbitration. The Company was subsequently informed that Tri-Star
had settled its dispute with the other joint venturer and
that the arbitration had been dismissed.
The Company has been unable to determine the disposition of
the $287,500 it invested in the Tri-Star Joint Venture. The
Company is considering what legal remedies may be available in
order to recover its investment. See Item 7. -- "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources."
COMPETITION
The real estate investment and development business is
highly competitive. The Company competes for real estate
investments with investors of all types, including domestic and
foreign corporations, financial institutions, other real estate
investment companies and individuals, many of which have
substantially greater resources than the Company. In addition,
the Company's properties are subject to local competitors from
the surrounding areas. The Company does not consider its real
estate business to be seasonal in nature.
With respect to the residential real estate, the Company
competes with numerous other developers and residential
properties in the greater Sacramento area of California and in
Las Vegas, Nevada, ranging from regional and national firms to
local companies, many of which have substantially greater
resources than the Company. In the greater Sacramento area, the
Company's residential lots compete on the basis of, among other
things, location, price and quality of amenities, such as the
golf course and country club facilities at Rancho Murieta. In
Las Vegas, the Company competes on the basis of, among other
things, location, design and price of its entry level single-family homes.
With respect to the Company's agricultural real estate, the
Company competes for tenants from other regional or local
agricultural properties in their respective areas of California
where the Company's properties are located. Competition for
tenants is intense. Leasing property to prospective tenants is
generally determined on the basis of, among other things, lease
rates and quality of top soil. The Company's leases of
agricultural property are generally for a short-term period of
one year or less.
SALES AND MARKETING
The Company employs a sales consultant for the sale of its
residential lots at the Fairways, although sales by independent
real estate brokers are also encouraged. The residential lots
are marketed primarily by means of media advertising, customer
referrals and Realtor contacts. Selling prices are set based on
the local market conditions and competitive factors.
Additionally, in October 1995, the Company sponsored the "Street
of Dreams" at the Fairways. The Street of Dreams selects certain
custom home builders to build luxury custom homes at a high-end
residential development and opens the homes to the viewing
public. Attendance at the Street of Dreams at the Fairways was
estimated to be approximately 75,000 people in 1995.
The Company employs a sales consultant for the sale of its
entry level single-family homes in Las Vegas, Nevada, although
sales by independent real estate brokers are also encouraged.
The Company primarily advertises in magazines and local
newspapers. Additionally, the homes are marketed by means of
brochures, signs, customer referrals and Realtor contacts.
Selling prices are set based on the market conditions and
competitive factors in Las Vegas. As of December 31, 1995, there
were three unsold homes remaining.
REGULATION
The Company must comply with various federal, state and
local zoning, building, pollution, environmental, health, and
advertising ordinances, rules and regulations, including
regulations relating to specific building materials to be used,
building design and minimum elevations of properties. All of
these regulations have increased the time and cost required to
market the Company's products.
CERTAIN INACTIVE SUBSIDIARIES
The Company has been advised by the state of New Jersey,
Department of State, Division of Commercial Recording that
neither Dunes, Inc. nor Dunes Hotel and Casino of Atlantic City
Inc. (DAC) filed reports required by state statutes for two
consecutive years. As a result, as of February 28, 1995, the
state of New Jersey revoked the active status of Dunes, Inc. and
DAC which can result in denial of their privilege of doing
business under their respective names. The Company has no
current plans to resume operations or pursue business
opportunities in New Jersey and does not intend to contest the
action.
EMPLOYEES
At March 1, 1996, the Company had 10 employees. None of the
Company's employees are covered by collective bargaining
agreements. The Company believes its employee relations to be
satisfactory.
ITEM 2. PROPERTIES
THE FAIRWAYS
The Fairways is comprised of approximately 50 acres of land
which has been developed into 110 single family estate lots. It
is located in Rancho Murieta, California, adjacent to Highway 16,
approximately 25 miles southeast of the city of Sacramento. The
land is encumbered by bonds in the approximate amount of
$600,000, which is the pro rata share of a bonded indebtedness
incurred that enabled the Rancho Murieta Community Services
District to acquire the water and sewer facilities that serve the
community of Rancho Murieta, which includes the Fairways and by a
deed of trust in favor of RMA securing the payment of Park Fees
due RMA. The bonded indebtedness will be assumed, pro rata, by
the individual lot buyers. The amount due RMA will be paid as
individual lot sales are closed. If all of the lots are not sold
by December 31, 1997, then the remaining balance will be due and
payable. As part of the settlement of the SASA Obligation, the
Company signed a note in favor of the RTC in the original
principal amount of $2,710,000. The note is collateralized by,
among other things, a deed of trust on the lots at The Fairways.
The deed of trust provides for lots to be released upon payment
of $40,000 per lot to the RTC. See "Item 1. Business -- Real
Estate and Related Activities -- The Fairways."
GRAIN STORAGE AND RICE DRYING FACILITIES
The Storage Facility is located in Yolo County, California,
approximately 15 miles west of the city of Sacramento. The
Storage Facility can store approximately 34,000 tons of grain.
The Company also leases a rice drying facility located in West
Sacramento, California. The Company considers the drying
facility adequate at the present time. See "Item 1. Business --
Real Estate and Related Activities -- Grain Storage and Rice
Drying Facilities."
WHITE RANCH
White Ranch, in which the Company holds a 50% interest, is
comprised of approximately 10,000 acres of agricultural land. It
is located on the western edge of Tulare County, California,
adjacent to State Highway 43 and the community of Angiola,
approximately 10 miles south of Corcoran and 30 miles southwest
of Tulare. See "Item 1. Business -- Real Estate and Related
Activities -- White Ranch."
SAM HAMBURG FARM
Sam Hamburg Farm consists of approximately 150 acres
remaining from an original 4,600 acres of agricultural land. The
land is located in the most southwesterly corner of Merced
County, California and the most northwesterly corner of Fresno
County California, approximately two miles east of Interstate
Highway 5. It is approximately ten miles south of the city of
Los Banos. The Company leases the remaining land to various
tenants, whose current crops include cotton, small grains, and
certain types of melons. The terms of the leases are usually one
crop year on a cash rent basis. See "Item 1. Business - Real
Estate and Related Activities - Sam Hamburg Farm".
RESIDENTIAL LOTS, NORTH LAS VEGAS
The residential lots consist of 53 partially developed
residential lots located in the City of North Las Vegas. As part
of the settlement of the SASA Obligation, the Company delivered
the RTC Settlement Note in the original principal amount of
$2,710,000. The RTC Settlement Note is collateralized by, among
other things, the Nevada Deed of Trust on the Las Vegas
residential lots. The deed of trust provides for lots to be
released upon payment of $6,000 per lot to the RTC. See "Item 1.
Business - Real Estate and Related Activities - Residential Lots,
North Las Vegas."
EXECUTIVE OFFICES
The Company's executive offices are located in an office
building in Las Vegas, Nevada. The executive offices are 1,744
square feet and are leased under terms of a lease agreement
expiring July 31, 1996. The Company also leases office space in
Davis, California on a month to month basis at a monthly rent of
$2,500. The Company believes that the executive offices and the
Davis office are suitable for its needs.
ITEM 3. LEGAL PROCEEDINGS
SAN ANTONIO SAVINGS ASSOCIATION V. JACK BONA AND DUNES
HOTELS AND CASINOS INC., United States District Court for the
District of New Jersey, Case Number 85-5461(R), instituted
January 8, 1986. These proceedings were dismissed on December 6,
1995. See "Item 1 - Business - Resolution of SASA Dispute and
the San Diego Property."
MORRIS A. SHENKER V. ANDREW MARINCOVICH, United States
Bankruptcy Court for the Eastern District of Missouri (Eastern
Division), Case No. 84-00001-BKC-JJB, Adversary No. 88-0161,
instituted June 28, 1988. This case was dismissed on January 16,
1996.
DUNES HOTELS AND CASINOS INC., ET AL. V. RESOLUTION TRUST
CORPORATION, ET AL., United States District Court, Southern
District of California, Case No. 95-139-R(RBB), instituted on
February 2, 1995. These proceedings were dismissed on December
6, 1995. See "Item 1 - Business - Resolution of SASA Dispute and
the San Diego Property" for a discussion of the Settlement
Agreement between the parties to this litigation.
DUNES HOTELS AND CASINOS INC., ET AL., APPELLANT V.
RESOLUTION TRUST CORPORATION, APPELLEE, Ninth Circuit Court of
Appeals, Case No. 95-55591, instituted on April 24, 1995. These
proceedings were dismissed on December 19, 1995. See "Item 1 -
Business - Resolution of SASA Dispute and the San Diego Property"
for a discussion of the Settlement Agreement between the parties
to this litigation.
IN RE: CONTINENTAL CALIFORNIA CORPORATION, United States
Bankruptcy Court, Southern District of California, Case No. 95-21992
LBR, instituted on May 18, 1995. These bankruptcy
proceedings were dismissed on November 9, 1995. See "Item 1 -
Business - Resolution of SASA Dispute and the San Diego
Property" for a discussion of the Settlement Agreement between
the parties to this litigation.
CONTINENTAL CALIFORNIA CORPORATION V. RESOLUTION TRUST
CORPORATION, ET AL., United States Bankruptcy Court, Southern
District of California, Adversary Proceeding No. 95-90469-LA11,
instituted on May 18, 1995. These adversary proceedings were
dismissed on November 24, 1995. See "Item 1 - Business -
Resolution of SASA Dispute and the San Diego Property" for a
discussion of the Settlement Agreement between the parties to
this litigation.
FEDERAL DEPOSIT INSURANCE CORPORATION, ET AL. V. JOHN B.
ANDERSON ET AL., United States District Court, District of
Nevada, Case No. CV-S-95-00679 (LRL), instituted on July 14,
1995. The FDIC, acting as a successor and assignee of EurekaBank
formerly known as Eureka Federal Savings and Loan Association
(Eureka), filed a complaint against John B. Anderson, Edith
Anderson, Cedar Development Company, J.A., Inc. and J.B.A.
Investments, Inc. (collectively, the Anderson Parties). The
complaint arises out of a judgment in the original principal
amount of approximately $33,700,000 obtained by Eureka against
the Anderson Parties in the District Court for Clark County,
Nevada. In consideration of Eureka's forbearance from executing
on the judgment, the Anderson Parties executed a debtor-creditor
agreement and related pledge and security agreements. Among
other things, approximately 3,000,000 shares of the Company's
common stock is pledged as collateral to the FDIC. The FDIC
alleges, among other things, that the Anderson Parties have
breached the debtor-creditor agreement and seek relief including
(i) specific performance, (ii) appointment of a receiver, (iii)
injunctive relief, (iv) judicial foreclosure, and (v) enforcement
of the judgment, which together with interest, is alleged to be
in excess of $63,000,000. On September 15, 1995, the Anderson
Parties entered into a Stipulation and Order For: Entry of Order
Appointing Receiver and For Injunctive Relief, and For Entry of
Consent Judgment (the Stipulation). The District Court entered
its order (the Order) staying certain powers granted to the
receiver, but allowing the receiver to review the assets, observe
the operations, and inspect the books and records, including the
Company's, relating to the assets of the Anderson Parties.
Pursuant to the Stipulation and the Order, the FDIC and the
Anderson Parties agreed to a 60 day period (the Negotiation
Period) to attempt to negotiate and execute a written agreement
for the resolution of the FDIC claims. The original Negotiation
Period was extended for an additional 60 day period and has since
been extended to March 15, 1996. The Company has been advised
that on March 13, 1996, Mr. Anderson, the Anderson Parties and
the FDIC submitted to the court a stipulation which extends the
negotiation period to the thirtieth day following delivery of
notice from the FDIC that the period is to terminate. If a
written settlement agreement is reached, Mr. Anderson and the
Anderson Parties will have an additional 60 days from the date of
execution of the settlement agreement to perform under the
settlement agreement. Both periods may be extended by written
agreement of the parties. If a settlement is not reached prior
to the close of the Negotiation Period, the FDIC may submit the
original consent judgment to the District Court, (i) the Anderson
Parties will be liable to the FDIC for a sum in excess of
$63,000,000, (ii) the pledged assets of the Anderson Parties,
including the 3,000,000 shares of common stock of the Company,
will come into control of a receiver, and (iii) the interests of
the Anderson Parties in the pledged assets will be foreclosed.
Although the Company is not a party to the complaint, if the
original consent judgment is entered, it will result in a change
in control of the Company and may adversely effect the Company's
ability to collect on certain obligations owed to the Company by
the Anderson Parties.
ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
No matter was submitted during the fourth quarter of the
fiscal year covered by this report to a vote of security holders,
through the solicitation of proxies or otherwise. No matter has
been submitted to a vote of security holders since December 19,
1984. See "Item 10. - Directors and Executive Officers of the
Registrant."
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The principal United States market in which the Company's
common stock is traded is the over-the-counter market. There is
no established public trading market for the Company's Series B
preferred stock. Neither the Company's common stock nor the
Company's preferred stock is listed for trading on an exchange.
The following table sets forth for the periods indicated the
range of the high and low bid quotations for the Company's common
stock as reported by the National Quotation Bureau. The reported
bid quotations reflect inter-dealer prices, without retail
markup, markdown or commissions, and may not necessarily
represent actual transactions.
1996 HIGH LOW
1st Quarter
(through March 1, 1996) 3/32 3/16
1995 HIGH LOW
1st Quarter 7/32 1/8
2nd Quarter 7/32 1/8
3rd Quarter 3/16 3/32
4th Quarter 3/16 1/32
1994 HIGH LOW
1st Quarter 7/8 3/16
2nd Quarter 1/2 1/8
3rd Quarter 3/8 1/16
4th Quarter 9/16 1/8
At December 31, 1995, the Company's transfer agent reported
that there were approximately 1,838 holders of record of the
Company's common stock, and approximately 759 holders of record
of the Company's Series B Preferred Stock.
Dividends on the Company's common stock have not been paid
since the second quarter of 1979. Dividends on the Company's
Series B preferred stock have not been paid since the first
quarter of 1982. The Company is in arrears on such dividends in
the amount of approximately $1,028,000 as of December 31, 1995.
Because of the settlement of the SASA Obligation, the Company's
second tier subsidiary, MRI, is no longer prohibited from paying
dividends to MRC, which in turn is no longer prohibited from
paying dividends to the Company. The Company has no present
intention to pay dividends on either its common or preferred
shares. See "Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations".
^M
ITEM 6. SELECTED FINANCIAL DATA
The following table summarizes certain selected financial
data for the periods indicated. The data for the years ended
December 31, 1993, 1994 and 1995 should be read in conjunction
with the more detailed audited Consolidated Financial Statements
and Notes thereto appearing elsewhere herein, including the
Independent Auditors' Report.
<TABLE>
<CAPTION>
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
SELECTED FINANCIAL DATA
(NOT COVERED BY INDEPENDENT AUDITORS' REPORTS)
Year ended December 31,
1991 1992 1993 1994 1995
(Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Continuing operations:
Net sales and other
operating revenue $ 544 $ 1,232 $ 1,387 $3,203 $4,014
Income (loss) from
continuing operations $ 3,931 ($ 1,431) ($ 1,678) ($ 1,195) ($2,075)
Extraordinary item,
net of tax $8,346
Earnings (loss) per
common share before
extraordinary item $ .51 ($ .20) ($ .25) ($ .19) ($ .32)
Extraordinary item
per common share $ 1.30
Earnings (loss) per
common share $ .51 ($ .20) ($ .25) ($ .19) $ .98
As of the end of period:
Total assets $28,190 $22,963 $21,262 $19,962 $16,727
Working capital
(deficiency) ($ 6,081) ($ 9,395) ($10,736) ($ 9,702) $ 496
Long-term debt and
capital lease
obligations $ 41 $ 25 $ 25 $ 146 $2,589
Shareholders'
equity $12,412 $ 9,298 $ 7,545 $6,275 $12,304
Book value per
common share $ 1.65 $ 1.43 $ 1.16 $ .97 $ 1.93
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Consolidated Financial Statements and the Notes thereto
are an integral part of this report, including this Item 7, and
are incorporated herein by this reference and should be read in
conjunction herewith.
LIQUIDITY AND CAPITAL RESOURCES. As of December 31, 1995,
the Company had working capital of $496,000 as compared to a
deficit working capital of $9,702,000 as of December 31, 1994.
The increase in working capital was due primarily to the
settlement of the SASA Obligation. During the year ended
December 31, 1995, cash and cash equivalents decreased by
$379,000 from $874,000 at December 31, 1994, to $495,000 at
December 31, 1995. The most significant sources of cash were
provided by operations ($728,000), the collection of loans made
to others ($1,873,000), including $600,000 received from BGC, the
sale of marketable securities ($435,000) and proceeds received
from short term debt ($133,000). The most significant uses of
cash in 1995, consisted of payments made to the RTC on the SASA
Obligation ($410,000), the purchase of the Solano County Option
($1,043,000), loans made to related parties ($594,000), the
purchase of 53 partially developed lots in North Las Vegas
($445,000), the purchase of 85,000 shares of the Company's common
stock from Morris Shenker, et al. ($170,000), the investment in
Steadfast Cattle Company and the purchase of equipment related
thereto ($364,000), payments on short term debt ($134,000) and
the purchase of two notes receivable collateralized by real
estate ($120,000). In addition, the Company received a credit of
$1,500,000 against the SASA Obligation as a result of the
transfer of the San Diego property to the RTC which is described
in more detail below.
Results of operations for the year ended December 31, 1995,
were adversely impacted due to a number of factors including:
(i) a bad debt write off of a loan made to a company wholly-owned
by a Director of the Company ($454,000); (ii) a write-down to
estimated realizable value of real estate held for sale
($284,000); (iii) a loss related to the Pine Ridge Joint Venture
($706,000); and (iv) bad debts, related to other loans, in the
amount of $226,000. The Company anticipates that these types of
losses will not occur in the future.
The Company believes that its primary requirements for
liquidity in the coming fiscal year will be to fund ongoing
expenses at The Fairways, which include, among other things,
association dues, water and sewer fees and property taxes; to
fund the cost of the cattle operation; to fund the required
payments due on the note to the RTC; to fund the build out of the
53 lots in North Las Vegas, if the Company decides to do so; to
fund a portion of the construction costs of the New Drying
Facility; and to fund general and administrative expenses.
The Company believes that sources of required liquidity will
be cash generated from the storage and drying facilities,
anticipated lot sales at The Fairways, collection of notes
resulting from sales at The Fairways, collection of rents at the
White Ranch, Success Payments related to the WCP venture, the
collection of the Maddocks investment, and the sale or build out
of the 53 lots in North Las Vegas. Based on known commitments,
the Company believes that the sources of cash described will be
adequate to fund known liquidity requirements. However, if the
sources of required liquidity prove to be insufficient to cover
the Company's primary liquidity requirements, it will be
necessary to sell some of the Company's non-income producing
assets.
In connection with the Company's loan to El Dorado, a
company wholly owned by Andrew Marincovich, the Company assumed
responsibility for farming the vineyard land which consisted of
raising different varieties of table grapes. The Company
expended approximately $432,000 on growing costs, including
$55,000 paid to the holder of the first lien on the vineyard
property and approximately $496,000 on harvesting, storage and
selling costs. Revenue from the sale of the table grapes as of
December 31, 1995, approximated $875,000. The vineyard property,
owned by Mr. Marincovich, is encumbered by a loan and first deed
of trust in the original amount of $1,300,000 (the Marincovich
Loan). On January 5, 1995 the Company paid the first lienholder
$50,000 as a principal reduction on the Marincovich Loan. The
Marincovich Loan was due in full on July 1, 1995. In December
1995, the Company informed both Mr. Marincovich and the first
lienholder that it would no longer farm the vineyard and
therefore would no longer advance additional funds. The Company
was advised that Mr. Marincovich was unable to make the required
payments to the first lienholder on the vineyard property. On
December 27, 1995, the first lienholder filed a Notice of Default
and Election to Sell Under Deed of Trust. In the event the
vineyard land is sold at the foreclosure sale for more than the
demand of the first lienholder, estimated to be $1,400,000, Mr.
Marincovich is entitled to any excess proceeds. Pursuant to Mr.
Marincovich's guarantee, the Company asserts a claim against such
excess proceeds, if any. No assurance can be given that the
vineyard property will sell for an amount in excess of the first
lienholders demand. See "Item 1. -- Business -- Other Activities
- -- Certain Loans -- Directors" for a more comprehensive
discussion of the El Dorado Loan and related issues.
On October 24, 1995, the Company, along with its
subsidiaries Continental, MRI, and SHF, entered into the
Settlement Agreement with the RTC in connection with the SASA
Obligation, which the RTC alleged was $21,107,796 as of October
10, 1995. The Settlement Agreement became effective on December
6, 1995. The Settlement Agreement modifies and restructures and
refinances and extends further credit to the Company in
accordance with the terms and conditions set forth in the
Settlement Agreement, which terms and conditions are intended to
entirely supersede and replace the terms of the SASA Obligation.
The SASA Obligation is more fully described in the Company's
report on Form 10-K for the year ended December 31, 1994, "Item
7. Management's Discussion and Analysis of Financial Condition
and Results of Operations," and in the Company's reports on Form
8-K dated February 2, 1995, April 3, 1995, April 26, 1995 and May
18, 1995.
Pursuant to the terms of the Settlement Agreement and as
full payment of the SASA Obligation, (i) Continental transferred
the San Diego Property to the RTC in consideration of a
$1,500,000 credit against the SASA Obligation, (ii) the Company
paid $290,000 to the RTC, and (iii) the Company delivered a
secured promissory note to the RTC (the RTC Settlement Note) in
the amount of $2,710,000. In addition, Continental received an
order dismissing its bankruptcy case, and the Company received
orders dismissing all of the litigation between the Company, SASA
and the RTC. The RTC Settlement Note bears interest at an annual
rate of 1% over the prime rate as published in The Wall Street
Journal. The interest rate is adjusted semi-annually; provided,
however, that the interest rate shall not be less than 8% or more
than 12% per annum. The Company will make monthly payments of
interest until December 6, 2000, at which time the entire
principal amount and all accrued interest is due.
The RTC Settlement Note is collateralized by (i) the Rancho
Murieta Deed of Trust on 69 unsold residential lots at The
Fairways in Rancho Murieta, California, (ii) the Nevada Deed of
Trust on 53 unsold partially developed, residential lots located
in Las Vegas, Nevada, and (iii) the Collateral Assignment of the
SHF Notes in the aggregate principal amount of $725,250 secured
by 7 residential lots previously sold at The Fairways. The
Rancho Murieta Deed of Trust provides for individual lots to be
released upon payment of $40,000 per lot to the RTC. The Nevada
Deed of Trust provides for individual lots to be released upon
payment of $6,000 per lot to the RTC. The RTC will apply such
payments to the outstanding principal due on the RTC Settlement
Note. Principal collections received by the Company on the SHF
Notes will be remitted to the RTC for application to the
outstanding principal due on the RTC Settlement Note.
The holder of the first lien on 8 completed lots in phase 1
of the PRJV foreclosed on the lots in December 1995. The Company
anticipates that the sale of the remaining completed homes in
phase 1 will cover any additional cash requirements that may be
needed. Due to cash overruns, lack of timely completion and sale
of houses, disbursements made not benefitting the joint venture
and the apparent inability of AJD to cover its deficit equity in
the joint venture, the Company has provided a $486,000 reserve
against its investment in the joint venture.
In May 1995, the Company acquired 53 partially developed,
residential lots at a foreclosure sale. The lots were formerly
owned by PRJV. The Company is currently evaluating whether to
sell the lots "as is" or to build single family homes on them.
The Company has retained a consultant and a general contractor to
advise the Company as to what course of action it should take.
On January 16, 1996, the Company signed a Letter of Intent
with West Coast Properties, LLC (WCP), whereby WCP offered to
purchase from the Company, 20 lots (the Phase I Lots) at The
Fairways and obtain an option to purchase an additional 20 lots
(the Phase II lots), with the intent of constructing single
family residences on the lots purchased. The purchase price of
the Phase I Lots would be the sum of $40,000 per lot plus payment
of the Park Fees applicable to the Phase I Lots. In addition,
the Company would receive 20% of the gross sale price of each
residential dwelling sold, less $40,000, (the Phase I Success
Payments), which would be paid to the Company upon the close of
each escrow. The option to purchase the Phase II Lots would
commence upon WCP'S sale of an aggregate of any 15 of the Phase I
Lots with completed single-family residences located on such lots
and the Company's receipt of the Phase I Success Payments. The
term of the option will expire on June 30, 1997, unless extended
by mutual agreement of the parties. When WCP notifies the
Company that it intends to exercise the option it will make a
$25,000 non-refundable deposit, which deposit will be applied to
the purchase of the Phase II Lots upon exercise of the option.
The purchase price of the Phase II Lots will be $45,000 per lot
plus payment of the Park Fees due on the Phase II Lots. In
addition, the Company would receive 20% of the gross sale price
of each residential dwelling sold, less the $45,000, (the Phase
II Success Payments), which would be paid to the Company upon the
close of each escrow. The Company will be permitted to sell any
of the Phase II Lots until such time as WCP exercises its option.
Any Phase II Lots sold by the Company will be replaced with
comparable lots. The parties are currently negotiating the final
terms of the document. No assurance can be given that the
parties will be successful in completing the final documentation.
In January 1996, the Company's Board of Directors authorized
management to pursue the possibility of constructing a new rice
drying facility adjacent to the rice storage facility in Yolo
County, California (The New Drying Facility). The cost of
constructing The New Drying Facility is estimated to be between
$1,300,000 and $1,500,000. The Company has made a $47,484
deposit on a rice dryer in anticipation of constructing The New
Drying Facility. The total cost of the rice dryer is $221,373.
Construction of The New Drying Facility is subject to various
governmental approvals and the ability of the Company to obtain
adequate financing. It is anticipated that construction of the
New Drying Facility will begin in November 1996 and be completed
in July 1997. In the event the Company does not proceed with the
construction of The New Drying Facility, the Company will lose
its deposit on the rice dryer.
In July 1995, the Company committed to invest up to $200,000
in a cattle feeding operation, with an unrelated third party,
known as Steadfast Cattle Company (Steadfast). The feed lot is
located in Gonzales, California on land leased from the former
owner. The operation consists of feeding both beef cattle and
dairy cattle on a per diem basis. It is estimated that it will
take between 5,000 and 6,000 head of cattle in order for the
operation to break even. As of March 1, 1996, there were
approximately 1,200 head of cattle in the feed lot. In addition
to its original commitment, the Company has purchased
approximately $225,000 of equipment that it leases to the feed
lot operation. On November 17, 1995, the holder of the first
mortgage lien on the feed lot filed a Notice of Default and
Election to Sell Under Deed of Trust. The Trustee Sale is
scheduled to take place on March 22, 1996. If Steadfast is unable
to negotiate a lease with the new owner of the feed lot, the
Company would be unable to recover its investment in the cattle
feeding operation and would suffer a significant loss on the sale
of the equipment that was purchased by the Company for use in the
cattle feeding operation.
If Mr. Anderson and the Anderson Parties and the FDIC do not
reach a settlement, and the FDIC were to foreclose on Mr.
Anderson's and the Anderson Parties assets, it will result in a
change in control of the Company and may adversely effect the
Company's ability to collect on the BGC Note.
The Company continues to have ongoing cash requirements,
which may be as much as $400,000 in the next twelve month period,
arising out of environmental clean up costs at its Hamburg Farm
property. The Company has not made an accrual for the cost, if
any, of removing the contaminated earth pending the results of
the various ongoing tests. See "Item 1. -- Business -- Real
Estate and Related Activities -- Sam Hamburg Farm".
Because the Company operates predominantly in the
Sacramento, California area and the Las Vegas, Nevada area, the
Company's land sales and other operations could be affected by
adverse changes in economic conditions in those areas.
The Company has no present intention to pay dividends on
either its common or preferred shares.
RESULTS OF OPERATIONS: 1995 vs. 1994. The loss before the
extraordinary item for the year ended December 31, 1995,
increased by $880,000 when compared with the year ended December
31, 1994. Net income, after the extraordinary item, for the year
ended December 31, 1995, increased by $7,466,000 when compared
with the year ended December 13, 1994. The increase in net
income, after the extraordinary item, was due to the gain that
was recognized on the settlement of the SASA Obligation. The
$880,000 increase in the loss before the extraordinary item for
the year ended December 31, 1995, was due to a decrease in the
profit margin on sales of real estate ($134,000) and a decrease
in rental income of $385,000. The decrease in rental income was
due to fewer acres being leased and lower rental rates than in
prior years. Operating expenses for the year ended December
31,1995 increased by $251,000 when compared with the year ended
December 31, 1994. The increases and decreases in certain
component of operating expenses consists of the following: (i)
the reclassification of write-down of real estate held for sale
from Other (Charges) Credits to operating expense ($284,000),
(ii) an increase in advertising expense as a result of sponsoring
the Street Of Dreams (150,000), (iii) a decrease in consulting
fees resulting from completion of construction work at The
Fairways, (iv) a decrease of $68,000 in property taxes,
homeowners dues and utility charges as a result of lot sales at
The Fairways.
RESULTS OF OPERATIONS: 1994 vs. 1993. The loss before
income taxes and cumulative effect of change in accounting
principle for the year ended December 31, 1994 decreased by
approximately $609,000 when compared with the year ended December
31, 1993. Income from real estate operations increased by
approximately $501,000 in 1994 when compared to 1993. This was
due to an increase in the sale of lots at The Fairways, 13 lots
in 1994 as compared to 3 lots in 1993. Rental income increased
by approximately $306,000 in 1994 when compared to 1993. This
increase was partially offset by an increase in water assessments
of approximately $278,000 in 1994. Storage and drying income
increased by approximately $253,000 in 1994 when compared to
1993. This increase is due primarily to operating the drying
facility for 12 months in 1994 as compared to 6 months in 1993.
Total operating expenses decreased by $41,000 in 1994 when
compared with 1993. Selling, general and administrative expenses
increased by approximately $286,000. This was due to the
decision to expense the carrying costs applicable to The Fairways
in 1994, which similar expenses were capitalized in 1993. Bad
debt expense decreased by approximately $630,000 in 1994 when
compared with 1993. This was due in part by the write off
applicable to the Continental Connector loan in 1993. Increases
in farming and storage and drying expenses were attributable to
operation of the drying facilities for 12 months in 1994 vs. 6
months in 1993 and an increase in water assessment fees in 1994.
Other items having an adverse effect on 1994 operations included
a $500,000 write down of investments made in certain real estate
joint ventures and a provision for doubtful notes receivable of
$427,000 relating to a loan to a company wholly owned by a
director.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and supplementary data
of Dunes Hotels and Casinos Inc. are located at pages F-1 to F-34
and are listed and included under Item 14, Exhibits, Financial
Statement Schedules and Reports on Form 8-K of Part IV hereof and
are incorporated herein by reference.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The By-laws of the Company provide that the number of
directors constituting the entire board shall be twelve.
Directors are elected at each annual meeting of shareholders to
hold office until the next annual meeting and until a successor
has been elected and qualified. The Company has not held an
annual meeting of stockholders since December 19, 1984. Of the
nine directors elected at the December 19, 1984 annual meeting of
shareholders, three have resigned, and only two of such vacancies
thereby created have been filled. As a result, the number of
directors currently serving is eight.
Pursuant to a Securities and Exchange Commission consent
decree, the Company has been required to have an Audit Committee
of the Board of Directors (Audit Committee) since 1978, a
majority of which must be independent directors.
The Company's Audit Committee has been evaluating whether
the loan transaction with El Dorado, a company wholly owned by
Mr. Marincovich, described elsewhere herein, adversely impacted
Mr. Marincovich's independence as a director serving on the Audit
Committee. At its March 5, 1996 Board meeting, upon
recommendation of the independent directors, other than
Mr. Marincovich, the Company's Board of Directors ruled that
Mr. Marincovich was independent. See "Item 1 -- Business --
Other Activities -- Directors."
The directors elect from their number the chairman of the
board and the president of the Company, which offices are
occupied by John B. Anderson. The board appoints other officers
as the board deems suitable, to serve at the pleasure of the
board. The officers of the Company hold office for the term for
which such officer is appointed and until his successor has been
elected and qualified. Currently there are no executive officers
of the Company who do not also serve as directors.
Identified herein are all directors and executive officers
of the Company. The information set forth as to each Director
and Executive Officer has been furnished by such person.
John B. Anderson, 53, is and has been since May 1984, a
director, chairman of the board, and president of the Company.
Anderson, through various subsidiaries, operates two
hotel/casinos in Nevada, and real estate and other businesses in
California. On March 10, 1992, BGC (an Anderson Entity) filed a
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code in the United States Bankruptcy Court for the District of
Nevada. On November 10, 1992, the United States Bankruptcy Court
confirmed and approved BGC's plan of reorganization which became
effective December 1, 1992. On December 20, 1994, the Chapter 11
case was closed. On April 6, 1992, Maxim Development Co. (an
Anderson Entity) filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the Eastern District of California, which bankruptcy
was subsequently dismissed on March 12, 1993.
Brent L. Bowen, 67, is and has been a director, officer and
member of the audit committee of the Company; and director and
officer of certain of the Company's subsidiaries since December
1984. He is and has been employed by Anderson Farms (an Anderson
Entity) since 1981 as a business and financial analyst. Mr.
Bowen has experience in the hotel/casino, farming, real estate,
home-building, rice mill, commodities and banking industries.
James H. Dale, 64, is and has been since January 1988, a
director of the Company. Mr. Dale was elected Treasurer of the
Company in 1990. From September 1986 to October 1991, Mr. Dale
was employed by Anderson Farms (an Anderson Entity) as Chief
Financial Officer. Prior to 1986, he was a partner in Grant
Thornton, Certified Public Accountants. Mr. Dale became an
employee of MRI in October 1991 when he was elected president of
MRI and its subsidiaries.
Andrew Marincovich, 74, is and has been since August 1978, a
director and member of the Audit Committee of the Company. He
is, and has been since July 1983, Chairman of the Audit
Committee. He is President and Executive Officer of Marincovich
& Company, accountancy corporation, a certified public accounting
firm in Rancho Palos Verdes, California, and is President of El
Dorado Vineyards, Inc., a table grape vineyard. He is a
Certified Public Accountant, licensed to practice in California.
Donald J. O'Leary, 65, was elected to the Company's Board of
Directors and appointed to the Company's Audit Committee on May
19, 1994. Mr. O'Leary is an attorney and is a member of the
California, Virginia and District of Columbia Bars. He is
currently in private practice in California. Prior to entering
private practice, Mr. O'Leary was a trial attorney for the U.S.
Department of Justice and resident counsel for several large real
estate companies.
Edward Pasquale, 52, is and has been a director and officer
of the Company since December 1984; and was a director and
officer of certain of the Company's subsidiaries from December
1984 until September 1988. He is presently, and has been since
September 1983, self-employed as a financial consultant, with
emphasis in litigation support services, bankruptcy proceedings,
and corporate reorganization. He is a Certified Public
Accountant, licensed to practice in the States of California and
Nevada. Mr. Pasquale was elected to the Company's Audit
Committee on May 19, 1994.
Wayne O. Pearson, 65, is and has been since August 1978, a
director and member of the Audit Committee of the Company. From
March 1975 to May 1993, he was a marketing analyst for R & R
Advertising Agency, Las Vegas, Nevada; and since January 1970,
sole proprietor, Wayne Pearson Consulting, Las Vegas, Nevada, a
business and public opinion research company.
Erik J. Tallstrom, 48, is and has been a director of the
Company since December 1984. Prior to 1985, he was self-employed
as a certified public accountant, and was a financial consultant
to Anderson. Since November 1985, he has been a business partner
with Anderson in several real estate developments, including
Rancho Murieta in California. Currently, Mr. Tallstrom acts as a
consultant to various real estate companies.
There is no family relationship between any director or
executive officer of the Company. No director holds a
directorship in any company with a class of securities registered
pursuant to Section 12 of the Exchange Act or subject to the
requirements of Section 15(d) of such Act or any company
registered as an investment company under the Investment Company
Act of 1940, as amended.
Compliance with Section 16(a) of the Exchange Act. Based
solely upon a review of the Commission's Forms 3 and 4 received
by the Company during the last fiscal year and upon written
representations solicited by the Company, no Officer, Director,
beneficial owner of more than 10% of any class of the Company's
equity securities or any other person subject to Section 16 of
the Exchange Act failed to file on a timely basis as disclosed in
the above forms, reports required by Section 16(a) of the
Exchange Act during the year ended December 31, 1995.
ITEM 11. EXECUTIVE COMPENSATION
The following table sets forth the annual compensation paid
to John B. Anderson, the Company's Chairman of the Board and
President, and to James H. Dale, the only executive officer of
the Company who received compensation in excess of $100,000 for
the year ended December 31, 1995.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
(a) (b) (c) (d) (e) (i)
Other
annual All other
compen- compen-
Name and prin- sation sation
cipal position Year Salary($) Bonus($) ($) ($)
<S> <C> <C> <C> <C> <C>
John B.
Anderson, 1995 $ -- $ -- $ -- $64,278(1)
Chairman of 1994 -- -- -- 73,134(1)
the Board and 1993 -- -- -- 68,640(1)
President
James H. Dale, 1995 $102,400 $20,000 -- $15,000(2)
Treasurer 1994 100,000 1,800 -- 15,000(2)
1993 90,660 -- -- 15,000(2)
<FN>
(1) All other compensation to John B. Anderson, the
Company's Chairman of the Board and President consists
of the following for the years indicated:
1995 Annual Directors fees $ 15,000
Payments of certain
expenses on behalf
of Mr. Anderson 49,278
$ 64,278
1994 Annual Directors fees $ 15,000
Payments of certain
expenses on behalf
of Mr. Anderson 58,134
$ 73,134
1993 Annual Directors fees $ 15,000
Payments of certain
expenses on behalf
of Mr. Anderson 53,640
$ 68,640
(2) All other compensation to James H. Dale, the Company's
Treasurer, consists of annual directors fees in the
amount of $15,000.
</FN>
</TABLE>
As a result of the purchase of two lots in The Fairways in
1993, Mr. Dale was indebted to the Company in the amount of
$105,000 which consisted of two notes in the amount of $52,500
each. Mr. Dale paid the notes on May 12, 1995.
COMPENSATION OF DIRECTORS
The Company pays each director an annual fee of $15,000 paid
quarterly. Directors fees due Mr. Anderson and Mr. Tallstrom are
retained by the Company and applied against amounts due the
Company from entities owned or controlled by Mr. Anderson and Mr.
Tallstrom. Directors fees due Mr. Marincovich are retained by
the Company and applied against amounts due the Company by El
Dorado. The assignments will remain in effect until changed by
the Board of Directors. See "Item 1. -- Business -- Other
Activities -- Certain Loans".
Messrs. Marincovich, Pearson, Bowen, Pasquale and O'Leary
are all members of the Company's Audit Committee. Until May
1995, members of the Company's Audit Committee were compensated
at the rate of $175 per hour. Beginning in June 1995, Audit
Committee members receive compensation of $1,000 per month plus a
travel allowance of $300 for each meeting attended. For services
rendered as Audit Committee members during the fiscal year 1995,
Messrs. Marincovich, Pearson, Pasquale, O'Leary and Bowen were
paid $15,140, $12,500, $10,480, $15,500, and $7,000 respectively.
Mr. Bowen began receiving Audit Committee fees on June 1, 1995.
The Company does not have a plan, pursuant to which cash or
non-cash compensation is paid or distributed, or is proposed to
be paid or distributed in the future. The Company does not have
any pension or other benefit plans.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The table shown below (1) contains certain information with
respect to any person (including any "group" as that term is used
in Section 13(d)(3) of the Exchange Act), who are known to the
Company to be beneficial owners (as that term is defined in rules
and regulations of the Commission under the federal securities
laws) of more than 5% of the Company's common stock. No person
is known to the Company to be the beneficial owner of more than
5% of the Company's Series B preferred stock.
Percent of
Name and Address of Amount and Nature of Common Stock
Beneficial Owner Beneficial Ownership(1) Outstanding
John B. Anderson(2) 4,367,643 68.5%
P.O. Box 1410
Davis, CA 95617
Federal Deposit Insurance 4,367,643 68.5%
Corporation(2)
550-17th N.W.
Washington, D.C.
The table shown below (1) contains certain information with
respect to the Company's common stock beneficially owned (as that
term is defined in rules and regulations of the Commission under
the federal securities laws) by all directors, and directors and
executive officers of the Company as a group. No director or
executive officer of the Company is known to the Company to be
the beneficial owner of any of the Company's Series B preferred
stock.
Percent of
Name of Beneficial Amount and Nature of Common Stock
Owner Beneficial Ownership(1) Outstanding
John B. Anderson(2) 4,367,643 68.5%
Brent L. Bowen(3) 2,000 *
Andrew P. Marincovich(3) 200 *
All Directors and Officers
as a Group (3 Persons) 4,369,843 68.5%
* Less than one percent
(1) In furnishing this information, the Company is relying
upon the contents of statements filed with the Commission
pursuant to Section 13(d) and Section 13(g) of the Exchange
Act.
(2) Anderson, through various entities owned or controlled
by him, claims beneficial ownership of, and shared voting
and shared investment power with respect to the reported
shares (the Anderson Shares). Of the Anderson Shares,
86,887 shares are held by an entity in which Erik
Tallstrom, a director of the Company, is a general partner
with Anderson.
Of the Anderson Shares, approximately 3,000,000 shares
are pledged in favor of the FDIC. On February 17, 1993,
the Company received a copy of Securities and Exchange
Commission Schedule 13D dated February 12, 1993 filed with
the Commission on behalf of EurekaBank (Eureka). The
Eureka Schedule 13D reports that Eureka possesses "sole
voting power" and "sole dispositive power" with respect to
3,000,000 shares of the Company's common stock. The Eureka
Schedule 13D also reports that Eureka may be deemed to have
acquired beneficial ownership of 4,367,643 shares of the
Company's common stock which amounts to 68.5% of the class
represented by said shares. In July 1993, Eureka
representatives advised the Nevada Gaming Control Board
that the FDIC had assumed management and supervision of
efforts to collect Mr. Anderson's obligation under a
debtor-creditor agreement dated November 30, 1988, by and
between John B. Anderson, Edith Anderson and Eureka Federal
Savings and Loan Association. On July 14, 1995, the FDIC
filed an action in the United District Court for the
District of Nevada against Anderson, Edith Anderson, CDC,
J.A. Inc. and J.B.A. Investments, Inc. The Company is not
a party to the action. The action arose out of a judgment
in the original principal amount of $33,700,000 entered in
the Nevada State Court in 1986 against Anderson and others.
On September 12, 1995, Anderson and the named
defendants entered into that certain Stipulation and Order
For: Entry of Order Appointing Receiver and For Injunctive
Relief, and For Entry of Consent Judgment (the
Stipulation). The Stipulation includes a provision for a
consent judgment against Anderson and the named defendants
(the Consent Judgment). If the Consent Judgment is entered
in accordance with the Stipulation, Anderson and the named
defendants will be liable to the FDIC for a sum in excess
of $66,000,000; the assets of Anderson and the named
defendants, including common stock of the Company, will
come into the control of a receiver; and the interests of
Anderson and the named defendants in the assets will be
foreclosed. On the same day, the Nevada Federal Court
entered its Order Appointing Receiver and Granting
Injunctive Relief (the Order). The Order stayed certain
powers granted to the receiver, but allows the receiver to
review the assets, observe the operations, and inspect
certain books and records, including the Company's,
relating to the assets of Anderson and the named
defendants.
Pursuant to the Stipulation and Order, the FDIC,
Anderson and the named defendants reached various
agreements with regard to the claims of the FDIC. The FDIC
and Anderson and the named defendants agreed to a 60 day
negotiation period (the Negotiation Period) to attempt to
negotiate and execute a written agreement for the
resolution of the FDIC claims (the Settlement Agreement).
The original negotiation period was extended for an
additional sixty day period and has since been extended to
March 15, 1996. The Company has been advised that on March
13, 1996, Mr. Anderson and the Anderson Parties and the
FDIC submitted to the court a stipulation which extends the
negotiation period to the thirtieth day following delivery
of notice from the FDIC that the period is to terminate.
If the Settlement Agreement is reached by the end of the
Negotiation Period, unless extended by written agreement,
Anderson and the named defendants will have an additional
60 days from the date of execution of the Settlement
Agreement, unless extended by written agreement, in which
to perform under the Settlement Agreement (the Closing
Period). If Anderson and the named defendants do not
perform the Settlement Agreement within the Closing Period,
the FDIC may submit the Consent Judgment to the Nevada
Federal Court for immediate entry.
Of the Anderson Shares, approximately 1,280,000 shares
are pledged in favor of the Company to secure indebtedness
to the Company. The balance of the Anderson Shares are
pledged in favor of other creditors of Anderson.
The transfer agent's records maintained for the Company
show that Anderson or entities owned or controlled by him
own 4,510,912 shares. The difference between what the
transfer agent's records show and the information provided
to the Company by Anderson is 143,269 shares. The
difference consists of 250,000 shares which were purchased
by the Company in January 1992, and 106,731 shares
purchased by BGC. Neither of these transactions have been
changed on the transfer agent's records.
(3) Messrs. Marincovich and Bowen claim beneficial
ownership of, and sole investment and sole voting powers
with respect to the reported shares.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Anderson and Anderson Entities own approximately 68.5% of
the Company's common stock. Refer to the Company's report on
Form 8-K dated February 12, 1993 regarding Securities and
Exchange Commission Schedule 13D filed on behalf of Eureka
wherein Eureka claims "sole voting" and "sole dispositive power"
with respect to 3,000,000 shares of the Company's common stock
and beneficial ownership of 4,367,643 shares of the Company's
common stock. In July 1993, the FDIC assumed the position of
Eureka with respect to the Debtor-Creditor Agreement.
As of December 31, 1995, BGC was indebted to MRI in the
principal amount of $2,523,000 plus accrued interest in the
amount of $171,000. Refer to "Item 1. -- Business -- Certain
Loans" for a more detailed discussion of the BGC loan.
As of December 31, 1995, the Company wrote off the RMPI
Note and the RMPI/CBC Loan against the related reserves. In
addition to Mr. Anderson, director Erik Tallstrom holds ownership
interests in RMPI and CBC. Refer to "Item 1. -- Business --
Certain Loans" for a more detailed discussion of the RMPI and
RMPI/CBC loans.
On February 9, 1995 the Company purchased from BGC, an
option, held by BGC, to purchase approximately 1,690 acres of
real property in Solano County, California. The purchase price
was $1,043,000. Refer to "Item 7. -- Management's Discussion and
Analysis of Financial Condition and Results of Operations" for a
more detailed discussion of this transaction.
In December 1992, MRI made available to El Dorado, a grape
vineyard corporation owned by Andrew Marincovich, a member of the
Company's Board of Directors and Chairman of the Company's Audit
Committee, a line of credit in the amount of $500,000 which was
converted to a loan when the full amount of the line of credit
was drawn. In an effort to protect the Company's interest in
ultimately collecting the loan, the Company continued to advance
funds to El Dorado. In December 1995, the Company wrote off as a
bad debt, approximately $881,000 that was advanced to El Dorado.
Refer to "Item 1. -- Business -- Certain Loans" for a more
detailed discussion of the El Dorado loan.
As a result of the purchase of two lots in The Fairways in
1993, Mr. Dale was indebted to the Company in the amount of
$105,000, which consisted of two notes in the amount of $52,500
each. Mr. Dale paid the notes on May 12, 1995.
OTHER
In July 1993, SHF entered into a lease agreement with Cal-Dehy
whereby SHF leased from Cal-Dehy its rice drying facility
located in West Sacramento, California. On January 1, 1996, the
Company entered into an agreement with Cal-Dehy regarding the use
of the Cal-Dehy name and a Covenant Not To Compete. Refer to
"Item 1. -- Business -- Real Estate and Related Activities --
Grain Storage and Drying Facilities" for a more detailed
discussion of this transaction.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report.
1. Financial Statements.
PAGE
Independent Auditors' Report F-1
Dunes Hotels and Casinos Inc. and Subsidiaries
Consolidated Financial Statements:
Balance sheets as of December 31, 1995 and 1994 F-2
Statements of income (loss), three years ended
December 31, 1995, 1994 and 1993 F-4
Statements of shareholders' equity, three years
ended December 31, 1995, 1994 and 1993 F-6
Statements of cash flows, three years ended
December 31, 1995, 1994 and 1993 F-7
Notes to Consolidated Financial Statements, three
years ended December 31, 1995, 1994 and 1993 F-9
2. Financial Statement Schedules:
Schedule VIII S-1
Schedule XI S-4
Schedule XII S-5
3. Exhibits.
3.01 Restated Certificate of Incorporation of Dunes
Hotels and Casinos Inc. dated June 17, 1982, is
incorporated herein by reference to Dunes Hotels
and Casinos Inc. Annual Report on Form 10-K (file
no. 1-4385) for the year ended December 31, 1994,
Part IV, Item 14(a)(3), Exhibit 3.01.
3.02 Certificate of Amendment of Restated Certificate of
Incorporation of Dunes Hotels and Casinos Inc.
dated December 19, 1984, is incorporated herein by
reference to Dunes Hotels and Casinos Inc. Annual
Report on Form 10-K (file no. 1-4385) for the year
ended December 31, 1994, Part IV, Item 14(a)(3),
Exhibit 3.02.
3.03 Revised By-laws of Dunes Hotels and Casinos Inc.
dated December 1984, is incorporated herein by
reference to Dunes Hotels and Casinos Inc. Annual
Report on Form 10-K (file no. 1-4385) for the year
ended December 31, 1994, Part IV, Item 14(a)(3),
Exhibit 3.03.
4.01 Specimen Certificate for the Common Stock of Dunes
Hotels and Casinos Inc., is incorporated herein by
reference to Dunes Hotels and Casinos Inc. Annual
Report on Form 10-K (file no. 1-4385) for the year
ended December 31, 1994, Part IV, Item 14(a)(3),
Exhibit 4.01.
4.02 Specimen Certificate for the Preferred Stock of
Dunes Hotels and Casinos Inc., is incorporated
herein by reference to Dunes Hotels and Casinos
Inc. Annual Report on Form 10-K (file no. 1-4385)
for the year ended December 31, 1994, Part IV, Item
14(a)(3), Exhibit 4.02.
10.02 Agreement dated November 21, 1989 by and between
CCC Nevada Inc. (formerly Continental Connector
Corporation), and Continental Industries, Inc.;
Promissory Note dated November 20, 1984, in the
principal amount of $3,000,000 made by Continental
Industries, Inc. to Continental Connector
Corporation; Allonge to Promissory Note, dated
November 20, 1989, in the original principal amount
of $3,000,000 made by Continental Industries, Inc.
to Continental Connector Corporation; Security
Agreement dated as of November 20, 1984 by and
between Continental Industries, Inc. and
Continental Connector Corporation; and Continuing
Guaranty dated April 2, 1985, by Morris Blinder and
Meyer Blinder in favor of Continental Connector
Corporation, are incorporated herein by reference
to Dunes Hotels and Casinos Inc. Annual Report on
Form 10-K (file no. 1-4385) for the year ended
December 31, 1994, Part IV, Item 14(a)(3), Exhibit
10.02.
10.04 Settlement Agreement dated June 28, 1988, by and
between San Antonio Savings Association and Dunes
Hotels and Casinos Inc.; First Amendment to
Settlement Agreement dated December 5, 1989, by and
between San Antonio Savings Association, F.A.
(assignee of San Antonio Savings Association) and
Dunes Hotels and Casinos Inc., is incorporated
herein by reference to Dunes Hotels and Casinos
Inc. Annual Report on Form 10-K (file no. 1-4385)
for the year ended December 31, 1994, Part IV, Item
14(a)(3), Exhibit 10.04. Settlement Release and
Loan Modification Agreement dated October 24, 1995,
by and among the Resolution Trust Corporation,
Dunes Hotels and Casinos Inc., Continental
California Corporation, M & R Investment Company,
Inc. and SHF Acquisition Corporation, is
incorporated herein by reference to Dunes Hotels
and Casinos Inc. Quarterly Report on Form 10-Q for
the nine months ended September 30, 1995, Item 6,
Exhibit 10.01. Order Granting Joint Motion to
Dismiss Bankruptcy Case and Adversary Proceeding,
dismissing bankruptcy case of Continental
California Corporation, is incorporated herein by
reference to Dunes Hotels and Casinos Inc. Current
Report on Form 8-K dated November 22, 1995, Item
7(c), Exhibit 99.01.
10.05 Stipulation and Order for Dismissal with Prejudice
filed in the United States Bankruptcy Court,
District of Nevada, Case No. BK-S-92-20989 (RCJ)
executed by The Valley National Bank of Arizona,
EurekaBank, M&R Investment Company, Inc. and Baby
Grand Corp.; Compromise Agreement dated November 9,
1992, by and among Maxim Development, The Valley
National Bank of Arizona and Redwood Bank;
Settlement Agreement and Mutual Release dated
November 2, 1992, by and among EurekaBank, The
Valley National Bank of Arizona, M&R Investment
Company, Inc. and Baby Grand Corp.; Addendum to
Settlement Agreement and Mutual Release dated
November 2, 1992, by and among EurekaBank, The
Valley National Bank of Arizona, M&R Investment
Company, Inc., and Baby Grand Corp.; Stipulation
for Dismissal of Appeal with Prejudice filed in the
United States District Court, District of Nevada,
Case No. CV-S-92-675-LVG (RCH) dated November 2,
1992 and executed by The Valley National Bank of
Arizona, Baby Grand Corp., M&R Investment Company,
Inc. and the official Unsecured Creditors'
Committee; Promissory Note dated November 2, 1992,
in the principal amount of $2,650,000 made by Baby
Grand Corp. to M&R Investment Company, Inc.;
Amended and Restated Pledge Agreement dated
November 2, 1992, by and between Baby Grand Corp.
and M&R Investment Company, Inc.; and Release of
Assignment of Leases, Rents and Revenues dated
November 2, 1992, by M&R Investment Company, Inc.,
are incorporated herein by reference to Dunes
Hotels and Casinos Inc. Annual Report on Form 10-K
(file no. 1-4385) for the year ended December 31,
1992, Part IV, Item 14(a)(3), Exhibit 10.05.
Second Settlement and Forbearance Agreement dated
February 9, 1995, by and among Baby Grand Corp., M
& R Investment Company, Inc. and Bank One, Arizona,
NA.; and Purchase Agreement (including Option
Agreement) dated February 9, 1995, by and between
Baby Grand Corp. and M & R Investment Company,
Inc., are incorporated herein by reference to Dunes
Hotels and Casinos Inc. Current Report on Form 8-K
(file no. 1-4385) dated February 9, 1995, Item 7,
Exhibit Nos. 10.01 and 10.02.
10.06 Straight Note dated August 28, 1990, in the
principal amount of $486,000 made by Rancho Murieta
Properties, Inc. to SHF Acquisition Corporation;
and Deed of Trust with Assignment of Rents (Short
Form) dated August 28, 1990, by and between Rancho
Murieta Properties, Inc., First American Title
Insurance Company and SHF Acquisition Corporation,
securing $486,000 Straight Note, are incorporated
herein by reference to Dunes Hotels and Casinos
Inc. Annual Report on Form 10-K (file no. 1-4385)
for the year ended December 31, 1990, Part IV, Item
14(a)(3), Exhibit 10.07. Second Extension
Agreement dated September 30, 1993, by and between
SHF Acquisition Corporation and Rancho Murieta
Properties, Inc.; Pre-workout Letter Agreement
dated November 9, 1993, by and between SHF
Acquisition Corporation and Rancho Murieta
Properties, Inc.; Assignment of Membership Proceeds
dated September 30, 1993, by and among SHF
Acquisition Corporation, Rancho Murieta Properties,
Inc. and M & R Investment Company, Inc.; and UCC-1
Financing Statement dated November 29, 1993, by
Rancho Murieta Properties, Inc. in favor of SHF
Acquisition Corporation and M & R Investment
Company, Inc., are incorporated herein by reference
to Dunes Hotels and Casinos Inc. Annual Report on
Form 10-K (file no. 1-4385) for the year ended
December 31, 1993, Part IV, Item 14(a)(3), Exhibit
10.10.
10.09 Promissory Note dated May 31, 1990, in the
principal amount of $1,100,000, made by Yolo Oil
and Gas, Inc. to SHF Acquisition Corporation;
Guaranty of Payment and Performance dated May 29,
1990, by 500 First Street, a California general
partnership, Kent N. Calfee, William Maddocks and
Kenneth Wallace in favor of SHF Acquisition
Corporation; Deed of Trust and Security Agreement
dated May 31, 1990, by and among Yolo Oil and Gas,
Inc., Chicago Title Insurance Company and SHF
Acquisition Corporation; Deed of Trust and Security
Agreement dated May 29, 1990, by and among 500
First Street, Wildlife Artisan, Inc., Chicago Title
Insurance Company and SHF Acquisition Corporation;
Assignment of Rents and Leases dated May 31, 1990,
by and between Wildlife Artisan, Inc. and 500 First
Street, for the benefit of SHF Acquisition
Corporation; Environmental Indemnity Agreement
dated May 31, 1990, by Yolo Oil & Gas, Inc., 500
First Street, Kent N. Calfee, William Maddocks and
Kenneth Wallace in favor of SHF Acquisition
Corporation; Loan Agreement dated May 25, 1990, by
and among Yolo Oil & Gas, Inc., SHF Acquisition
Corporation, 500 First Street, and William
Maddocks; Lender's Escrow Instructions dated May
31, 1990, by Yolo Oil & Gas, Inc., Chicago Title
Insurance Company and SHF Acquisition Corporation;
Deed of Trust and Security Agreement dated May 29,
1990, by 500 First Street, Wildlife Artisan, Inc.,
Chicago Title Insurance Company and SHF Acquisition
Corporation; and Assignment of Rents and Leases
dated May 31, 1990, by Wildlife Artisan, Inc., 500
First Street, and SHF Acquisition Corporation, are
incorporated herein by reference to Dunes Hotels
and Casinos Inc. Annual Report on Form 10-K (file
no. 1-4385) for the year ended December 31, 1990,
Part IV, Item 14(a)(3), Exhibit 10.11.
10.10 Letter Agreement dated July 21, 1991, by and among
Calfee & Young (on behalf of M & R Investment
Company, Inc.), Rancho Murieta Properties, Inc. and
CBC Builders, Inc.; Promissory Note in the
principal amount of $955,500 made by Rancho Murieta
Properties, Inc. and CBC Builders, Inc. to M&R
Investment Company, Inc.; Deed of Trust with
Assignment of Rents dated July 22, 1991, by CBC
Builders, Inc. in favor of M&R Investment Company,
Inc.; Deed of Trust dated July 22, 1991 by CBC
Builders, Inc. in favor of M&R Investment Company,
Inc.; Collateral Assignment of Partnership Interest
dated July 22, 1991, by Erik J. Tallstrom in favor
of M&R Investment Company, Inc.; Assignment of
Director's Fees dated July 22, 1991, by and between
CBC Builders, Inc. and M&R Investment Company,
Inc.; Memorandum of Option to Purchase dated July
22, 1991, by and between CBC Builders, Inc. and M&R
Investment Company, Inc.; and Personal Guaranty
dated July 22, 1991, by Erik J. Tallstrom, are
incorporated by reference to Dunes Hotels and
Casinos Inc. Annual Report on Form 10-K (file no 1-4385)
for the year ended December 31, 1991, Part
IV, Item 14(a)(3), Exhibit 10.12. Extension
Agreement dated September 30, 1993, by and among M
& R Investment Company, Inc., Rancho Murieta
Properties, Inc. and CBC Builders, Inc.; Pre-workout
Letter Agreement dated November 9, 1993, by
and among M & R Investment Company, Inc., Rancho
Murieta Properties, Inc. and CBC Builders, Inc.;
Extension of Option Agreement dated September 30,
1993, by and between M&R Investment Company, Inc.
and CBC Builders, Inc, are incorporated herein by
reference to Dunes Hotels and Casinos Inc. Annual
Report on Form 10-K (file no. 1-4385) for the year
ended December 31, 1993, Part IV, Item 14(a)(3),
Exhibit 10.10.
10.14 Corporation Deed of Trust with Assignment of Rents
dated March 23, 1993, by and among Andrew P.
Marincovich and Matilda C. Marincovich, First
American Title Insurance Company and M&R Investment
Company, Inc.; Promissory Note dated July 22, 1992,
in the principal amount of $500,000 made by El
Dorado Vineyards, Inc. to M&R Investment Company,
Inc.; Business Loan Agreement by and among M&R
Investment Company, Inc., El Dorado Vineyards, Inc.
and Andrew P. Marincovich; Security Agreement by El
Dorado Vineyards, Inc. in favor of M&R Investment
Company, Inc.; Personal Guaranty dated April 7,
1993, by Andrew P. Marincovich in favor of M&R
Investment Company, Inc., are incorporated herein
by reference to Dunes Hotels and Casinos Inc.
Annual Report on Form 10-K (file no. 1-4385) for
the year ended December 31, 1992, Part IV, Item
14(a)(3), Exhibit 10.14. Promissory Note in the
principal amount of $500,000, made by El Dorado
Vineyards, Inc. to M&R Investment Company, Inc.;
Promissory Note in the principal amount of $8,800
made by El Dorado Vineyards, Inc. to M&R Investment
Company, Inc.; Promissory Note in the principal
amount of $3,945.21 made by El Dorado Vineyards,
Inc. to M&R Investment Company, Inc.; Promissory
Note in the principal amount of $39,591.29 made by
El Dorado Vineyards, Inc. to M&R Investment
Company, Inc.; Business Loan Agreement by and among
M&R Investment Company, Inc., El Dorado Vineyards,
Inc. and Andrew P. Marincovich; Personal Guaranty
by Andrew P. Marincovich in favor of M&R
Investment Company, Inc.; and Security Agreement by
El Dorado Vineyards, Inc. in favor of M&R
Investment Company, Inc., are incorporated herein
by reference to Dunes Hotels and Casinos Inc.
Annual Report on Form 10-K (file no. 1-4385) for
the year ended December 31, 1993, Part IV, Item
14(a)(3), Exhibit 10.14. Loan Modification
Agreement dated July 15, 1994, by and among El
Dorado Vineyards, Inc., Andrew P. Marincovich and
M&R Investment Company, Inc.; Durable Special Power
of Attorney dated July 21, 1994 by Andrew P.
Marincovich; Promissory Note dated July 15, 1994,
in the principal amount of $500,000 made by El
Dorado Vineyards, Inc. to M&R Investment Company,
Inc.; Promissory Note dated July 15, 1994, in the
principal amount of $39,591.32 made by El Dorado
Vineyards, Inc. to M&R Investment Company, Inc.;
Promissory Note dated July 15, 1994, in the
principal amount of $3,945.21 made by El Dorado
Vineyards, Inc. to M&R Investment Company, Inc.;
Promissory Note dated July 15, 1994, in the
principal amount of $8,800.00 by El Dorado
Vineyards, Inc. to M&R Investment Company, Inc.;
Promissory Note dated July 15, 1994, in the
principal amount of $12,184.86 made by El Dorado
Vineyards, Inc. to M&R Investment Company, Inc.;
and Promissory Note dated July 19, 1994, in the
principal amount of $153,428.94 by El Dorado
Vineyards, Inc. to M&R Investment Company, Inc.,
are incorporated herein by reference to Dunes
Hotels and Casinos Inc. Quarterly Report on Form
10-Q (file no. 1-4385) for the six months ended
June 30, 1994, Item 6, Exhibit 10.01. Note
Modification Agreement (with Exhibits A through F)
dated January 5, 1995, by and among El Dorado
Vineyards, Inc., Andrew P. Marincovich and M&R
Investment Company, Inc., is incorporated herein by
reference to Dunes Hotels and Casinos Inc. Annual
Report on Form 10-K (file no. 1-4385) for the year
ended December 31, 1994, Part IV, Item 14(a)(3),
Exhibit 10.14.
10.16 Parks Development Agreement dated February 20,
1991, by and among the Rancho Murieta Association,
the Rancho Murieta Community Services District,
Rancho Murieta Properties, Inc., CBC Builders, Inc.
and SHF Acquisition Corporation, is incorporated
herein by reference to Dunes Hotels and Casinos
Inc. Annual Report on Form 10-K (file no. 1-4385)
for the year ended December 31, 1993, Part IV, Item
14(a)(3), Exhibit 10.16. Settlement Agreement
Regarding Payment of Park Fees (not dated) by and
among Rancho Murieta Association, SHF Acquisition
Corporation, CBC Builders, Inc., Rancho Murieta
Properties, Inc. and Rancho Murieta Community
Services District of Sacramento County, is
incorporated herein by reference to Dunes Hotels
and Casinos Inc. Annual Report on Form 10-K (file
no. 1-4385) for the year ended December 31, 1994,
Part IV, Item 14(a)(3), Exhibit 10.16.
10.17 Inter-Creditor Agreement dated September 30, 1993,
by and among SHF Acquisition Corporation, M & R
Investment Company, Inc. and Calfee & Young, is
incorporated herein by reference to Dunes Hotels
and Casinos Inc. Annual Report on Form 10-K (file
no. 1-4385) for the year ended December 31, 1993,
Part IV, Item 14(a)(3), Exhibit 10.17.
10.18 Commercial Premises Lease dated July 1, 1993, by
and between California Dehydrating Company and SHF
Acquisition Corporation, is incorporated herein by
reference to Dunes Hotels and Casinos Inc. Annual
Report on Form 10-K (file no. 1-4385) for the year
ended December 31, 1993, Part IV, Item 14(a)(3),
Exhibit 10.18.
10.19 Renewal Promissory Note secured by Security
Agreement Modification Agreement dated June 1989,
by and between Eureka Federal Savings and Loan
Association and Andco Development Group, Inc.;
Security Agreement-Pledge dated June 1989, by and
between Rancho Murieta Properties, Inc. and Eureka
Federal Savings and Loan Association; Agreement to
Modify Promissory Note dated June 1989, by and
among Eureka Federal Savings and Loan Association,
Andco Development Group, Inc., Andco Land and
Development Company, Inc. and CBC Builders, Inc.;
Extension Agreement dated February 1, 1990, by and
among Eureka Federal Savings and Loan Association,
Andco Development Group, Inc., Andco Land and
Development Company, Inc., Rancho Murieta
Properties, Inc., Erik J. Tallstrom and John B.
Anderson; Guaranty dated October 1, 1987, by John
B. Anderson in favor of Eureka Federal Savings and
Loan Association; Guaranty dated October 1, 1987,
by Erik J. Tallstrom in favor of Eureka Federal
Savings and Loan Association; Guaranty dated
October 1, 1987, by Rancho Murieta Properties, Inc.
in favor of Eureka Federal Savings and Loan
Association; Amendment No. 1 to Guaranty dated June
1989, by and between John B. Anderson and Eureka
Federal Savings and Loan Association; Amendment No.
1 to Guaranty dated June 1989, by and between Erik
J. Tallstrom and Eureka Federal Savings and Loan
Association; Amendment No. 1 to Guaranty dated June
1989, by and between Rancho Murieta Properties,
Inc. and Eureka Federal Savings and Loan
Association; Corporation Deed of Trust with
Assignment of Rents dated June 1989, by and between
Rancho Murieta Properties, Inc. and Eureka Federal
Savings and Loan Association; Agreement for
Purchase and Sale of Promissory Note dated November
24, 1993, by and between Realecon, Inc. and M&R
Investment Company, Inc.; Assignment of Promissory
Note dated November 24, 1993, by and between
Realecon, Inc. and M&R Investment Company, Inc.;
Assignment and Assumption Agreement of Security
Agreement and Guaranties dated November 24, 1993,
between Realecon, Inc. and M&R Investment Company,
Inc.; Secured Promissory Note dated November 24,
1993, in the principal amount of $125,000 by M&R
Investment Company, Inc. to Realecon, Inc.;
Assignment of Deed of Trust with Request for
Special Notice dated November 24, 1993, by
Realecon, Inc. in favor of M&R Investment Company,
Inc.; and Corporation Deed of Trust with Assignment
of Rents dated November 24, 1993, by SHF
Acquisition Corporation in favor of Realecon, Inc,
are incorporated herein by reference to Dunes
Hotels and Casinos Inc. Annual Report on Form 10-K
(file no. 1-4385) for the year ended December 31,
1993, Part IV, Item 14(a)(3), Exhibit 10.19.
10.20 Pine Ridge Joint Venture Agreement dated June 1993,
by and between AJD and M & R Investment Company,
Inc., is incorporated herein by reference to Dunes
Hotels and Casinos Inc. Annual Report on Form 10-K
(file no. 1-4385) for the year ended December 31,
1993, Part IV, Item 14(a)(3), Exhibit 10.20. Pine
Ridge Joint Venture -- Joint Venture Meeting--
November 10, 1994, discussing additional capital
requirements for the continuing operations of Pine
Ridge Joint Venture and equity increases to M&R
Investment Company, Inc. related thereto, is
incorporated herein by reference to Dunes Hotels
and Casinos Inc. Annual Report on Form 10-K (file
no. 1-4385) for the year ended December 31, 1994,
Part IV, Item 14(a)(3), Exhibit 10.20.
10.21 Letter dated March 28, 1994 from M&R Investment
Company, Inc. to Michael Shipsey and Tri-Star
International Development regarding purchase of a
25% interest of Tri-Star International
Development's 50% interest in Arroyo Grande Joint
Venture Agreement of distributable cash; and Letter
dated July 29, 1994 from Dennis L. Kennedy of
Lionel Sawyer & Collins to Tri-Star International
Development regarding termination of Tri-Star
International Development's interest in the Arroyo
Grande Joint Venture, are incorporated herein by
reference to Dunes Hotels and Casinos Inc. Annual
Report on Form 10-K (file no. 1-4385) for the year
ended December 31, 1994, Part IV, Item 14(a)(3),
Exhibit 10.21.
10.22 Agreement dated January 1, 1996, by and between
California Dehydrating Company, Inc. and SHF
Acquisition Corporation regarding use of the
California Dehydrating name and a Covenant Not to
Compete.
10.23 Commercial Premises Lease dated March 1, 1995, by
and between Pheasant Investment Corporation and SHF
Acquisition Corporation regarding the lease of the
rice drying facility in West Sacramento,
California.
10.24 Reimbursement Agreement dated September 20, 1995,
by and between Rancho Murieta Community Services
District and SHF Acquisition Corporation regarding
the amount of the reimbursement due SHF for excess
work done at The Fairways at Rancho Murieta that
will benefit other properties within the boundaries
of Rancho Murieta.
10.25 Assignment of promissory note in the original
principal amount of $57,000 made by James P. Parks
and Dale A. Parks in favor of SHF Acquisition
Corporation; Promissory Note dated February 13,
1995, made by James P. Parks and Dale A. Parks in
favor of SHF Corporation; Deed of Trust dated
February 13, 1995, made by James P. Parks and Dale
A. Parks.
10.26 Assignment of promissory note in the original
principal amount of $70,000 made by Chandler T.
Martin and Debra L. Martin in favor of SHF
Acquisition Corporation; Promissory Note dated
March 2, 1992, made by Chandler T. Martin and Debra
L. Martin in favor of SHF Acquisition Corporation;
Letter dated April 6, 1994, extending the due date
of the note to March 10, 1998; Deed of Trust dated
March 2, 1992, made by Chandler T. Martin and Debra
L. Martin.
10.27 Assignment of promissory note in the original
principal amount of $164,160 made by Consolidated
Kapital, Inc. in favor of SHF Acquisition
Corporation; Promissory Note dated January 24,
1992, made by Consolidated Kapital, Inc in favor of
SHF Acquisition Corporation; Deed of Trust dated
January 24, 1992, made by Consolidated Kapital,
Inc.
10.28 Assignment of promissory note in the original
principal amount of $85,360 made by William A.
Brown in favor of SHF Acquisition Corporation;
Promissory Note dated April 6, 1995, made by
William A. Brown in favor of SHF Acquisition
Corporation; Deed of Trust dated April 6, 1995,
made by William A. Brown.
10.29 Assignment of promissory note in the original
principal amount of $76,000 made by John P.
Xepoleas and Monterey A. Xepoleas in favor of SHF
Acquisition Corporation; Promissory Note dated
March 10, 1995, made by John P. Xepoleas and
Monterey A. Xepoleas in favor of SHF Acquisition
Corporation; Deed of Trust dated March 10, 1995,
made by John P. Xepoleas and Monterey A. Xepoleas.
10.30 Assignment of promissory note in the original
principal amount of $193,800 made by T. E. Duerr
and P. A. Duerr, Trustees of the Duerr Family
Revocable Trust dated October 14, 1987, in favor of
SHF Acquisition Corporation; Promissory Note dated
July 22, 1992, made by T.E. Duerr and P. A. Duerr,
Trustees of the Duerr Family Revocable Trust in
favor of SHF Acquisition Corporation; Deed of Trust
dated July 22, 1992, made by T.E. Duerr and P. A.
Duerr, Trustees of the Duerr Family Revocable
Trust.
10.31 Assignment of promissory note in the original
principal amount of $79,000 made by Raymond L.
James and Cheryle James in favor of SHF Acquisition
Corporation; Promissory Note dated December 7,
1994, made by Raymond L. James and Cheryle James in
favor of SHF Acquisition Corporation; Deed of Trust
dated December 7, 1994, made by Raymond L. James
and Cheryle James.
10.32 Installment Note dated January 17, 1996, made by
Mukhtar Ahmad and Nazra P. Ahmad in favor of
Willows Ranch Group, consisting of SHF Acquisition
Corporation and 500 First Street wherein SHF
Acquisition Corporation has a 91.90% interest.
10.33 Purchase and Option Agreement by and between SHF
Acquisition Corporation and West Coast Properties,
LLC, undated, regarding the sale of 20 lots and an
option to purchase an additional 20 lots at The
Fairways.
21.01 Subsidiaries of Registrant.
27.01 Financial Data Schedule
(b) Reports on Form 8-K
8K.01 November 22, 1995. This report on Form 8-K, Item
5, reported the dismissal of the Continental
Bankruptcy Case.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
DUNES HOTELS AND CASINOS INC. DUNES HOTELS AND CASINOS INC.
By /s/ John B. Anderson By /s/ James H. Dale
John B. Anderson James H. Dale
Chairman of the Board and Treasurer (Principal
President Accounting and
(Principal Executive Officer) Financial Officer)
Dated March 28, 1996
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the date indicated.
Signature Title Date
/s/ John B. Anderson
John B. Anderson Chairman of the Board
and President March 28, 1996
/s/ Brent L. Bowen
Brent L. Bowen Director March 28, 1996
/s/ James H. Dale
James H. Dale Director March 28, 1996
/s/ Andrew P. Marincovich
Andrew P. Marincovich Director March 28, 1996
/s/ Donald J. O'Leary
Donald J. O'Leary Director March 28, 1996
/s/ Edward Pasquale
Edward Pasquale Director March 28, 1996
/s/ Wayne O. Pearson
Wayne O. Pearson Director March 28, 1996
/s/ Erik J. Tallstrom
Erik J. Tallstrom Director March 28, 1996
INDEPENDENT AUDITORS' REPORT
Board of Directors and Shareholders
Dunes Hotels and Casinos Inc.
Las Vegas, Nevada
We have audited the accompanying consolidated balance sheets
of Dunes Hotels and Casinos Inc. and Subsidiaries as of December
31, 1995 and 1994, and the related consolidated statements of
income (loss), shareholders' equity and cash flows for the three
years ended December 31, 1995, 1994 and 1993. These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Dunes Hotels and Casinos Inc. and Subsidiaries as of December
31, 1995 and 1994, and the results of their operations and their
cash flows for the three years ended December 31, 1995, 1994 and
1993, in conformity with generally accepted accounting
principles.
The Company has engaged in significant business activity and
transactions with related parties including real estate
investment and lending (Note 4). Some of these loans have
resulted in losses and another may result in future losses
depending upon the outcome of the matter involving the Federal
Deposit Insurance Corporation discussed in Note 4a(1).
In connection with our audit of the financial statements
referred to above, we audited the financial statement schedules
listed under Item 14(a)2. In our opinion, these financial
statement schedules present fairly, in all material respects, the
information stated therein, when considered in relation to the
financial statements taken as a whole.
/s/ Piercy, Bowler, Taylor & Kern
Las Vegas, Nevada
March 1, 1996
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
ASSETS
1995 1994
(Dollars in thousands)
Current assets:
Cash and cash equivalents $ 495 $ 874
Marketable securities 511 855
Trade receivables, less allowance of $23 in 1995 256 514
Current maturities of long-term notes receivable:
Related parties 398 357
Real estate sales 272 335
Other 167 655
Inventory 89
Prepaid expenses 142 249
Total current assets 2,330 3,839
Real estate held for development and sale 6,565 7,951
Property and equipment, less accumulated depreciation
and amortization, 1995, $325; 1994, $261 4,701 4,744
Other assets:
Long-term notes receivable, less current maturities:
Related parties, including interest, less allowance
of $1,566 in 1995 and $2,967 in 1994 729 1,123
Officer and director, less allowance of $427 in 1994 421
Other, less allowance of $1,174 in 1994 784 530
Investments 1,566 1,346
Deferred costs and other 52 8
3,131 3,428
$ 16,727 $ 19,962
(continued)
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND 1994
LIABILITIES AND SHAREHOLDERS' EQUITY
1995 1994
(Dollars in thousands)
Current liabilities:
Short-term debt, contract payable $ 75 $ 76
Current portion of long-term debt 208 22
Resolution Trust Corporation as Receiver
for San Antonio Savings Association 11,985
Trade payables 100 174
Accrued expenses and other 73 58
Accrued preferred stock dividend 1,028 956
Deferred income 23 23
Income taxes 327 247
Total current liabilities 1,834 13,541
Long-term debt, net of current portion 2,589 146
Shareholders' equity:
Preferred stock - authorized 10,750,000
shares ($.50 par); issued 10,512 shares,
Series B $7.50 cumulative Preferred
stock, aggregate liquidation value $2,229
including dividends in arrears 5 5
Common stock, $.50 par; authorized 25,000,000
shares; issued 7,799,780 shares, outstanding
6,375,096 shares in 1995 and 6,460,096 shares
in 1994 3,900 3,900
Capital in excess of par 25,881 25,881
Deficit (15,482) (21,681)
14,304 8,105
Treasury stock at cost; Preferred - Series B,
902 shares, Common 1,424,684 shares in 1995
and 1,339,684 shares in 1994 (2,000) (1,830)
Total shareholders' equity 12,304 6,275
$ 16,727 $ 19,962
See notes to consolidated financial statements.
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
(Dollars in thousands,
except per share)
Operating Revenues:
Sales of real estate, including sales
to officer of $150,000 in 1993 $ 1,901 $ 1,558 $ 301
Cost of real estate sales 1,824 1,347 285
77 211 16
Other operating revenue 2,113 1,645 1,086
Cost of other operating revenue 1,913 1,155 851
200 490 235
277 701 251
Operating expenses:
Selling, administrative and general 1,479 1,388 1,102
Bad debts 226 197 827
Depreciation 69 63 64
Write-down of real estate held for sale 284 839
2,058 1,648 2,832
Loss before other (charges) credits, income
taxes, cummulative effect of change in
accounting principle and extraordinary
item (1,781) (947) (2,581)
Other (charges) credits:
Interest and dividend income 595 578 583
Interest expense (37) (10) (7)
Provision for doubtful notes receivable,
El Dorado Vineyards, Inc., wholly-owned
by a director of the Company (454) (427)
Loss on real estate investments (500)
Bad debt recovery 336
Partnership income (loss) (781) 23
Securities gains, net:
Realized 37
Unrealized 26 20
Other credits 34 39 209
(281) (240) 785
(continued)
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1995 1994 1993
(Dollars in thousands,
except per share)
Loss before income taxes, cumulative effect
of change in accounting principle and
extraordinary item (2,062) (1,187) (1,796)
Income taxes (13) (8)
Loss before cumulative effect of change in
accounting principle and extraordinary item (2,075) (1,195) (1,796)
Effect of change in accounting principle 118
Loss before extraordinary item (2,075) (1,195) (1,678)
Extraordinary item, net of taxes of $80 8,346
Net income (loss) $ 6,271 $ (1,195) $ (1,678)
Income (loss) per common share:
Income (loss) before cumulative effect
of change in accounting principle $ (0.32) $ (0.19) $ (0.27)
Effect of change in accounting principle 0.02
Extraordinary item 1.30
Net income (loss) $ 0.98 $ (0.19) $ (0.25)
<TABLE>
<CAPTION>
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(Dollars in thousands)
Preferred stock Common stock Capital
issued (1) issued in
excess
Shares Amount Shares Amount of par Deficit
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1993 10,152 $5 7,799,780 $3,900 $25,881 ($18,658)
Accrued dividends, Preferred (75)
Net loss (1,678)
Balance, December 31, 1993 10,152 5 7,799,780 3,900 25,881 (20,411)
Accrued dividends, Preferred (75)
Net loss (1,195)
Balance, December 31, 1994 10,152 5 7,799,780 3,900 25,881 (21,681)
Accrued dividends, Preferred (72)
Purchase of treasury stock
Net income 6,271
Balance, December 31, 1995 10,152 $5 7,799,780 $3,900 $25,881 ($15,482)
<CAPTION>
Preferred Common Total
treasury stock treasury stock share-
holders'
Shares Amount Shares Amount equity
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1993 (902) ($70) (1,339,684) ($1,760) (1,830)
Accrued dividends, Preferred 0
Net loss 0
Balance, December 31, 1993 (902) (70) (1,339,684) (1,760) (1,830)
Accrued dividends, Preferred 0
Net loss 0
Balance, December 31, 1994 (902) (70) (1,339,684) (1,760) (1,830)
Accrued dividends, Preferred 0
Purchase of treasury stock (85,000) (170) (170)
Net income 0
Balance, December 31, 1995 (902) ($70) (1,424,684) ($1,930) ($2,000)
<FN>
(1) Series B, $7.50 dividend, voting and non-convertible
(liquidation value $125 per share)
</FN>
</TABLE>
See notes to consolidated financial statements.
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1995, 1994 and 1993
1995 1994 1993
(Dollars in Thousands)
Cash flows from operating activities:
Net income (loss) $ 6,271 $ (1,195) $ (1,678)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Provision for losses on accounts and notes
receivable, related parties and others 331 717 951
Non-cash gain from settlement of
liabilility (8,619)
Depreciation 69 63 64
Cost of real estate sold 1,732 1,172 254
Gain on disposition of assets (2)
Non-cash portion of real estate sales (323) (777) (178)
Write-down of real estate held for sale 284 837
Provision for losses on investments 346 428
Partnership loss - net 435 50
Gain on marketable securities (26) (57)
Changes in certain assets and liabilities:
Decrease (increase) in trade receivables 235 (123) (242)
Decrease (increase) in inventory (89)
Decrease (increase) in prepaid expenses 107 2 90
Decrease (increase) in deferred costs
and other (44) (2) 27
Increase (decrease) in trade payables (74) (175) (37)
Increase (decrease) in accrued expenses 15 (20) 54
Increase (decrease) in deferred income 4 (12)
Increase (decrease) in income taxes 80 (119)
(5,543) 1,282 1,689
Net cash provided by operating activities 728 87 11
Cash flows from investing activities:
Payments made for real estate held
for sale (445) (6) (608)
Capital expenditures (146) (21)
Cash paid for other investments (1,367) (568) (500)
Proceeds from other investments 12 124
Investment in marketable securities (65) (835) (124)
Proceeds from sale of marketable
securities 435 1,286
Payments received on notes receivable 1,873 1,282 624
Loans made to related parties (594) (718) (558)
Loans made to others (193) (645) (200)
Cash from funds held in escrow 459
Proceeds from disposition of property 10 87
Net cash provided by (used in) investing
activities (492) 354 (1,263)
(continued)
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
YEARS ENDED DECEMBER 31, 1995, 1994 and 1993
1995 1994 1993
(Dollars in Thousands)
Cash flows from financing activities:
Proceeds from short-term debt $ 133 $ 137 $
Payments on short-term debt (134) (186) (20)
Payments on long-term debt (444) (38) (9)
Payments for treasury stock (170)
Net cash (used in) financing activities (615) (87) (29)
Increase (decrease) in cash and cash
equivalants (379) 354 (1,281)
Cash and cash equivalents, beginning of
year 874 520 1,801
Cash and cash equivalents, end of year $ 495 $ 874 $ 520
Supplemental disclosures of cash flow
information:
Cash paid during the year for:
Interest $ 10 $ 10 $ 7
Supplemental schedules of non-cash
investing and financing activities:
Total liability settled $ 8,985 $ $ 25
Less cash paid (20)
Less assets transferred (366)
Non-cash gain from extraordinary
items -- settlement of liabilities $ 8,619 $ $ 5
Total revenue from real estate sold $ 1,901 $ 1,558 $ 301
Less cash received from real estate
sales $ (1,578) $ (781) $ (123)
Notes receivable resulting
from sales 323 777 178
Property and equipment acquired
through a capitalized lease $ 73
Dividends paid through accrued
liability $ 72 $ 75 $ 75
See notes to consolidated financial statements.
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
1. Summary of significant accounting policies:
Consolidation:
The accompanying consolidated financial statements include
the accounts of the Company and its wholly-owned
subsidiaries Continental California Corporation
(Continental), Dunes Inc., Dunes Hotel and Casino of
Atlantic City, Inc. (DAC), M & R Corporation (MRC) and
MRC's subsidiary, M & R Investment Company, Inc. (MRI) and
MRI's subsidiaries SHF Acquisition Corporation (SHF) and
Southlake Acquisition Corporation (Southlake), after
elimination of all material intercompany balances and
transactions.
The Company did not consolidate Pine Ridge Joint Venture
(PRJV), a joint venture in which the Company has a 51%
interest at December 31, 1994, because the Company intends
to liquidate its interest in 1996. PRJV is accounted for
on the equity method. The Company did not consolidate
Steadfast Cattle Company (Steadfast), a Limited Liability
Company in which the Company has a 50% interest.
Steadfast is accounted for on the equity method.
Description of business:
The Company considers its principal business to be the
acquisition, development and sale of real estate, and
related financing thereof. In that connection, the Company
has invested in a number of operating entities or
properties, the most significant of which is engaged in
the retail land sales business. Other enterprises, which
are held primarily for their real estate investment
potential, include less significant operations in rice
storage and drying, cattle feeding and rentals. Because
these operations are continued primarily to minimize the
carrying costs of the underlying real estate investments,
pending their ultimate disposition, management considers
the Company to be engaged in only one business segment,
real estate-related investments.
The Company's real estate investments are concentrated in
Northern California and, to a lesser extent, near Las
Vegas, Nevada. Accordingly, ultimate realization of these
investments will be affected by changes in local economic
conditions.
Property and equipment and depreciation and amortization:
Property and equipment are stated at cost. Depreciation and
amortization are provided by the straight-line method over
the estimated useful lives of the assets.
1. Summary of significant accounting policies (continued):
Income (loss) per share:
Income (loss) per common share has been computed using the
weighted average number of shares outstanding during the
year: 6,429,822, 6,460,096 and 6,460,096 for the years
ended December 31, 1995, 1994 and 1993, respectively.
Dividends on nonconvertible preferred stock - Series B
have been deducted from income or added to the loss
applicable to common shares.
Cash and cash equivalents:
Cash equivalents are short-term (original maturity of 90
days or less), highly liquid investments that are both
readily convertible to known amounts of cash and so near
their maturity that they present insignificant risk of
changes in value because of changes in interest rates.
Reclassifications:
Certain amounts in the Company's consolidated statements of
income (loss) for the years ended December 31, 1994 and
1993 have been reclassified to conform to the 1995
presentation. Such reclassification has no effect on the
results of operations.
Inventory:
Growing crop inventory consists of costs associated with
table grapes, being grown by the Company, at El Dorado
Vineyards. The inventory is stated at estimated market
value, which is less than cost. Cattle inventory consists
of the cost of cattle held in a feed lot for future sale.
The cattle inventory is stated at estimated market value,
which is less than cost.
Real estate held for development and sale:
Real estate held for development and sale is stated at the
lower of cost or net realizable value. Costs include
primarily acquisition costs and improvements costs. Costs
are allocated to individual properties using the method
appropriate in the circumstances.
Use of estimates:
The timely preparation of financial statements in conformity
with generally accepted accounting principles requires
management to make estimates and assumptions that affect
certain reported amounts and disclosures. Actual results
could differ from those estimates.
2. Bankruptcy proceeding:
On May 18, 1995, Continental filed a Petition for Relief
Under Chapter 11 of the United States Bankruptcy Code.
The Petition for Relief was filed in the United States
District of Nevada, Case No. 95-21992 LBR. The case was
subsequently transferred to The United States Bankruptcy
Court for the Southern District of California. The
bankruptcy case was dismissed on November 9, 1995.
3. Fair value of financial instruments:
Estimated fair value of the Company's financial instruments
(all of which are held for nontrading purposes) are as
follows:
Carrying Fair
Amount Value
(Dollars in thousands)
Cash, cash equivalents and
marketable securities $1,006 $1,006 (a)
Notes receivable, real estate
sales 1,224 1,224 (b)
Note receivable, related party
(the BGC Note) 1,127 (c)
Solano County Option 1,043 1,043 (d)
Long-term debt (2,797) (e)
(a) The carrying amount approximates fair value of cash,
cash equivalents and marketable securities. For
marketable securities, fair values are estimated based
on quoted market prices.
(b) The fair value of the notes receivable are based on
their outstanding balances and their respective
interest rates. Notes receivable are collateralized by
first deeds of trust on the real estate sold. In the
event any purchaser were to default on the real estate
notes, the Company could institute foreclosure
proceedings and reacquire the property which serves as
the collateral for the note. The Company believes that
the fair value of the collateral is in excess of the
principal amount of the related note.
(c) It is not possible to determine the fair value of the
BGC Note because the Company is unable to predict
whether BGC will be able to pay the first lien note on
its due date, which is the same date that the BGC Note
comes due. See Note 4a(1) of Notes to Consolidated
Financial Statements.
3. Fair value of financial instruments (continued):
(d) The fair value of the Solano County Option is estimated
based on an appraisal of the real property to which the
option relates and the length of the option period
which enables the Company to have some flexibility as
to when and if the option should be exercisable. The
Company can only recover the fair value of the option
(i) by exercising the option and selling the property
or (ii) selling the option. However, if the fair value
of the real property should drop below the option
purchase price, the Company would not be able to
recover all of its investment in the Solano County
Option.
(e) The fair value of long-term debt is not subject to
reasonable estimation because the debt arose
principally as a result of the settlement of a dispute.
See Note 9 of Notes to Consolidated Financial
Statements.
4. Related party transactions:
a. John B. Anderson (Anderson), the Company's controlling
stockholder and Chairman of the Board of Directors of
the Company, and entities owned or controlled by him
(Anderson Entities) own approximately 68.5% of the
Company's common stock as of March 1, 1995.
(1) Baby Grand Corp. d/b/a Maxim Hotel and Casino (the
Maxim), Las Vegas, Nevada, an Anderson Entity,
owed the Company $2,523,000 plus accrued interest
in the amount of $171,000 at December 31, 1995,
pursuant to a promissory note dated November 2,
1992, in the original amount of $2,650,000 (the
BGC Note). The BGC Note bears interest at the
rate of 9% per annum. Monthly payments under the
BGC Note are currently $50,000. The BGC Note is
due in full on December 1, 1997 at which time the
note to the present holder of the first deed of
trust indebtedness on The Maxim is due. BGC is
precluded from paying the final installment due on
the BGC Note until it pays the amount due to the
present holder of the first deed of trust
indebtedness. If BGC is unable to pay the amount
due to the present holder of the first deed of
trust indebtedness, it would have a material
adverse effect on the Company's ability to collect
on the BGC Note. If BGC is unable to make the
final payment, the Company would have a loss of
approximately $1,732,000 for which $1,400,000 has
been previously provided for. The BGC Note is
collateralized by approximately 1,280,000 shares
of the Company's common stock. BGC is current in
payment of monetary obligations under the note.
The present holder of the first deed of trust
indebtedness on The Maxim filed and later canceled
a Notice of Breach and Election
4. Related party transactions (continued):
a. (1) continued
to Sell under its indebtedness in July 1995.
Since that time, the first trust deed holder has
threatened a further declaration of default
primarily as a result of the appointment of a
receiver for Mr. Anderson's assets. In the event
the first trust deed lender declares a default,
the BGC Note will also be in default.
On February 6, 1996, the Company was informed that
the Nevada State Gaming Control Board had
instituted an administrative disciplinary action
against BGC. The complaint alleges that BGC
violated certain conditions relating to BGC's
gaming license when it purchased the Solano County
Option and seeks a fine in an undetermined amount.
(There may also be a declaration of default by the
present holder of the first deed of trust
indebtedness, which would trigger a default under
the BGC Note). If this action results in a
material fine against BGC, there could be a
material adverse effect on the Company's ability
to collect the BGC Note.
The Federal Deposit Insurance Corporation (the
FDIC), acting as a successor and assignee of
EurekaBank formerly known as Eureka Federal
Savings and Loan Association (Eureka), filed a
complaint against Anderson, Edith Anderson, Cedar
Development Company, J. A. Inc. and J.B.A.
Investments, Inc. (collectively, the Anderson
Parties). The complaint arises out of a judgment
in the original principal amount of approximately
$33,700,000 obtained by Eureka against the
Anderson Parties in the District Court for Clark
County, Nevada. In consideration of Eureka's
forbearance from executing on the judgment, the
Anderson Parties executed a debtor-creditor
agreement and related pledge and security
agreements. Among other things, approximately
3,000,000 shares of the Company's common stock is
pledged to the FDIC. The FDIC alleges, among
other things, that the Anderson Parties have
breached the debtor-creditor agreement and seek
relief including (i) specific performance, (ii)
appointment of a receiver, (iii) injunctive
relief, (iv) judicial foreclosure, and (v)
enforcement of the judgment, which together with
interest, is alleged to be in excess of
$63,000,000. On September 15, 1995, the Anderson
Parties entered into a Stipulation and Order For:
Entry of Order Appointing Receiver and For
Injunctive Relief, and For Entry of Consent
Judgment (the Stipulation). The District Court
entered its order (the Order) staying certain
powers granted to the receiver, but allowing the
receiver to review the assets, observe the
operations, and inspect the books and records,
including the Company's, relating to the assets of
the Anderson Parties.
4. Related party transactions (continued):
a. (1) continued
Pursuant to the Stipulation and Order, the FDIC
and the Anderson Parties agreed to a 60 day period
(the Negotiation Period) to attempt to negotiate
and execute a written agreement for the resolution
of the FDIC claims. The original Negotiation
Period was extended for an additional 60 day
period and has since been extended to March 15,
1996. The Company has been advised that on March
13, 1996, Mr. Anderson and the Anderson Parties
and the FDIC submitted to the court a stipulation
which extends the negotiation period to the
thirtieth day following delivery of notice from
the FDIC that the period is to terminate. If a
written settlement agreement is reached, Mr.
Anderson and the Anderson Parties will have an
additional 60 days from the date of execution of
the settlement agreement to perform under the
settlement agreement. Both periods may be
extended by written agreement of the parties. If
a settlement is not reached prior to the close of
the Negotiation Period, the FDIC may submit the
original consent judgment to the District Court,
(i) $63,000,000, (ii) the pledged assets of the
Anderson Parties, including the 3,000,000 shares
of common stock of the Company, will come into
control of a receiver, and (iii) the interests of
the Anderson Parties in the pledged assets will be
foreclosed. If such a foreclosure were to take
place, it would have a material adverse effect on
the Company's ability to collect on the BGC Note.
Although the Company is not a party to the
complaint, if the original consent judgment is
entered, it will result in a change in control of
the Company.
The Company is unable to predict whether Anderson
will be able to reach the Settlement Agreement,
perform the Settlement Agreement, or the other
circumstances under which the Consent Judgement
could be entered.
(2) For the year ended December 31, 1993, the Company
paid an Anderson Entity accounting and consulting
fees of $47,240. For the years ended December 31,
1995, 1994 and 1993, $49,278, $58,134 and $53,640,
respectively, was paid on behalf of Anderson for
certain of Anderson's expenses, which payments
were considered compensation to Anderson and were
approved by the Company's Audit Committee. At its
January 1996 Board of Directors and Audit
Committee meeting, the Audit Committee approved
payments on behalf of Mr. Anderson of up to
$65,000 for the year 1996.
(3) During 1990 and 1991, the Company, through certain
of its subsidiaries, made loans to Rancho Murieta
Properties, Inc. (RMPI) (the RMPI Note) and to CBC
Builders, Inc. (CBC) (the RMPI/CBC Loan) each of
which are Anderson Entities located in Rancho
Murieta, California, in the approximate amount of
$1,400,000.
4. Related party transactions (continued):
a. (3) continued
The notes were collateralized by subordinated
liens on undeveloped land owned by both RMPI and
CBC and an assignment of notes receivable due CBC
by Rancho Murieta Country Club (RMCC). In April
1994, the FDIC foreclosed on all of the properties
owned by CBC. In June 1994, an arbitrator ruled
that the notes owing to CBC by RMCC were
unenforceable. The assignment of the RMCC notes
was subject to an inter-creditor agreement between
SHF, MRI, and RMPI'S and CBC'S legal counsel (the
Inter-creditor Agreement).
In connection with a settlement agreement (the
Agreement) between RMPI and the Pension Trust Fund
for Operating Engineers and RMCC, the Agreement
provided for a payment in satisfaction of certain
of the obligations that had been pledged to SHF
and MRI. Pursuant to the terms of the Inter-creditor
Agreement, MRI and SHF received, on June
7, 1995, $345,337 of the final settlement payment.
The Company does not anticipate receiving any
further payments, except for the assignment of
directors fees discussed below, on either the RMPI
Note or the RMPI/CBC Loan and therefore, has
written the loans off against their related
reserves.
Mr. Anderson and Erik J. Tallstrom, a member of
the Company's Board of Directors, who also has an
interest in RMPI and CBC, assigned their directors
fees to the Company to be applied to the RMPI Note
and the RMPI/CBC Loan. The assignment continues
to remain in effect until changed by the Board of
Directors.
(4) Directors:
In 1992, Mr. Andrew Marincovich, a member of the
Company's Board of Directors and Chairman of the
Company's Audit Committee, brought to the
Company's Board of Directors, a proposal whereby
the Company and El Dorado Vineyards (El Dorado), a
company wholly-owned by Mr. Marincovich, would
form a joint venture to raise table grapes on
vineyard land in which, according to Mr.
Marincovich, he had a 10% interest. During the
course of the Company's due diligence period, Mr.
Marincovich informed the Company that he had
acquired the remaining 90% interest in the
vineyard land. During the course of its due
diligence period, the Company advanced $500,000
which was to be the Company's contribution to the
joint venture. At the end of the due diligence
period, the Company decided not to go forward with
the joint venture and the advances were converted
to a term loan to El Dorado.
4. Related party transactions (continued):
a. (4) continued
In an effort to protect the Company's interest in
ultimately collecting the loan, the Company
continued to advance funds to (a) El Dorado, which
funds were used by El Dorado for operating
expenses and (b) for payments, on behalf of Mr.
Marincovich, to the first lien holder on the
vineyard land. The advances were evidenced by
notes signed by El Dorado. In addition, Mr.
Marincovich signed his personal guarantee, the
recourse under which, was limited to the vineyard
land and assigned his directors fees to the
Company to be applied to the El Dorado loans. The
assignment continues to remain in effect until
changed by the Board of Directors. Mr.
Marincovich also executed a power of attorney
coupled with an interest to MRI or MRI'S designee
allowing MRI or the designee the full right,
power, and authority to execute any and all
documents necessary to sell, transfer, and/or
otherwise convey the vineyard land.
In 1995, the Company assumed responsibility for
farming the vineyard land which consisted of
raising different varieties of table grapes. The
Company expended approximately $432,000 on growing
costs, including interest of $55,000 paid to the
holder of the first lien on the vineyard property,
and approximately $496,000 on harvesting, storage
and selling costs. Revenues from the sale of the
table grapes approximated $875,000. The vineyard
property, owned by Mr. Marincovich, is encumbered
by a loan and first deed of trust in the original
amount of $1,300,000 (the Marincovich Loan). On
January 5, 1995, the Company paid the first lien
holder $50,000 as a principal reduction on the
Marincovich Loan. The Marincovich Loan was due in
full on July 1, 1995. In December 1995, the
Company informed both Mr. Marincovich and the
first lien holder that it would no longer farm the
vineyard and therefore would no longer advance
additional funds. The Company was advised that
Mr. Marincovich was unable to make the required
payments to the first lienholder on the vineyard
property. On December 27, 1995, the first lien
holder filed a Notice of Default and Election to
sell Under Deed of Trust. In the event the
vineyard land is sold at the foreclosure sale for
more than the demand of the first lien holder,
estimated to be approximately $1,400,000,
Mr. Marincovich is entitled to any excess
proceeds. Pursuant to Mr. Marincovich's personal
guarantee, the Company asserts a claim against
such excess proceeds, if any. No assurance can be
given that the vineyard property will sell for an
amount in excess of the first lienholder's demand.
As a result of the foregoing, the Company has
written off as a bad debt, approximately $881,000,
which includes both principal and unpaid interest,
that was advanced to El Dorado.
4. Related party transactions (continued):
a. (4) continued
The Company's Audit Committee has been evaluating
whether the loan transaction with El Dorado, a
company wholly-owned by Mr. Marincovich, adversely
impacted Mr. Marincovich's independence as a
director serving on the Audit Committee. At its
March 5, 1996 Board meeting, upon the
recommendation of the independent directors, other
than Mr. Marincovich, the Company's Board of
Directors ruled that Mr. Marincovich was
independent.
(5) SHF entered into an agreement with California
Dehydrating Co. (Cal-Dehy) an Anderson entity
which owns a rice drying facility in West
Sacramento, California (the Cal-Dehy Facility)
whereby SHF paid Cal-Dehy $50,000 per year to
operate the grain storage facility. Fees paid to
Cal-Dehy for the year ended December 31, 1993,
amounted to $37,500. In July 1993, SHF entered
into a lease agreement with Cal-Dehy whereby SHF
leased the Cal-Dehy Facility. The term of the
lease is for three years at an annual rental of
$60,000. As a result of entering into the
aforementioned lease, it was no longer necessary
to retain Cal-Dehy to operate the storage
facility. In connection with its operation of the
drying and storage facilities, it became necessary
for SHF to become licensed by the Commodity Credit
Corporation. In February 1995, the Cal-Dehy
facility was the subject of a foreclosure action
which terminated the SHF lease. On March 1, 1995,
the Company entered into a lease with the new
owner of the drying facility. The term of the new
lease is for two years at an annual rental of
$54,000.
On January 1, 1996, the Company entered into an
agreement with Cal-Dehy whereby the Company would
pay to Cal-Dehy $60,000 per year for the use of
the Cal-Dehy name and a Covenant Not To Compete.
The agreement, including the Covenant Not To
Compete, is for a one year period.
In January 1996, the Company's Board of Directors
authorized management to pursue the possibility of
constructing a new rice drying facility adjacent
to the rice storage facility in Yolo County,
California (The New Drying Facility). The cost of
constructing The New Drying Facility is estimated
to be between $1,300,000 and $1,500,000. The
Company has made a $47,484 deposit on a rice dryer
in anticipation of constructing The New Drying
Facility. The total cost of the rice dryer is
$221,373. Construction of The New Drying Facility
is subject to various governmental approvals and
the ability of the Company to obtain adequate
financing. It is anticipated that construction of
the New Drying Facility will begin in November
1996 and be completed in July 1997. In the event
the Company does not proceed with the construction
of The New Drying Facility, the Company will lose
its deposit on the rice dryer.
5. Real estate held for development and sale:
Real estate held for development and sale consists of the
remaining portion of approximately 50 acres of developed
residential land in Rancho Murieta, Sacramento County,
California (now known as The Fairways) and 53 partially
developed, single-family residential lots located in the
City of North Las Vegas (the Las Vegas Lots).
The Company, through SHF, developed the 50 acres of
residential land located at Rancho Murieta, California as
a residential planned unit development known as "The
Fairways". Rancho Murieta is a 3,500 acre master planned
unit development located approximately 25 miles from
Sacramento, California. Rancho Murieta consists primarily
of single family homes, town houses, commercial property
and two 18-hole championship golf courses, including
country club facilities. The Fairways, located within the
boundaries of one of the golf courses located at Rancho
Murieta, was subdivided into 110 single-family estate
lots. As of March 1, 1996, 69 lots remain unsold.
In connection with its development of The Fairways, SHF was
required to construct several water, sewer and drainage
facilities (The Improvements) that are oversized to serve
lands outside the boundaries of The Fairways (the
Benefited Properties). SHF and Rancho Murieta Community
Services District (the District) have entered into an
agreement (the Reimbursement Agreement) wherein SHF and
the District have agreed that the total cost of The
Improvements was $1,597,425, and that of this amount,
$276,088 is allocable to The Fairways and $1,321,337, is
allocable to the Benefited Properties. SHF and the
District also agreed that future construction of certain
other facilities will benefit both The Fairways and the
Benefited Properties. The Reimbursement Agreement
provides that the amount that will be allocable to The
Fairways will be approximately $176,500 and will be
deducted from the amount due SHF resulting in a net amount
due to SHF of approximately $1,140,900. The funds will be
reimbursed to SHF out of proceeds of any subsequent
community facilities district or by direct payment by
subsequent developers of the Benefited Properties. SHF's
right to reimbursement will expire in twenty years. The
Company is unable to predict what amount, if any, will be
received under the Reimbursement Agreement. The rights to
reimbursement are personal to SHF and do not run with the
Fairway property unless assigned by SHF.
As part of the development of The Fairways, SHF entered into
a Parks Development Agreement dated February 20, 1991 (the
Parks Agreement) with Rancho Murieta Association (RMA).
The Parks Agreement provides, among other things, that the
developers of properties in Rancho Murieta pay to RMA a
park fee for each developed lot. It was RMA's contention
that the park fees were due in full when the common areas
within a subdivision are annexed into RMA. SHF
5. Real estate held for development and sale (continued):
maintained that the park fees, applicable to each lot,
were due only when that lot was sold. In August 1994, SHF
entered into a Settlement Agreement Regarding Payment of
Park Fees (the Park Fee Payment Agreement). The Park Fee
Payment Agreement acknowledged that the total park fees
owing to RMA were $173,238. The Park Fee Payment
Agreement further provided that SHF would pay $17,323 upon
signing of the Park Fee Payment Agreement and that the
balance would be paid ratably as the remaining lots were
sold. In the event all of the lots are not sold by
December 31, 1997, then any remaining amount due must be
paid in full. In the event that SHF makes any sale or
transfer of multiple lots within the Fairways to any other
person, the allocable share of the SHF park fees
attributable to the lots so conveyed shall be immediately
due and payable to RMA. However, SHF is permitted to
transfer multiple lots to an entity in which SHF holds at
least a 50% interest without accelerating payment of the
park fees allocable to the lots transferred.
As part of the Settlement Agreement with the Resolution
Trust Corporation as Receiver for San Antonio Savings
Association (the RTC), all of the unsold lots in The
Fairways are encumbered by a deed of trust in favor of the
RTC. The deed of trust requires a $40,000 payment for the
release of a lot.
On February 11, 1994, the Board of Directors of RMCC adopted
a resolution whereby a RMCC golfing membership may be
transferred by a member lot owner to another lot or to any
other lot owner within the Rancho Murieta subdivision.
During 1994, RMCC, RMPI and PTF entered into various
agreements which settled all litigation between the
parties and affirmed the right of the members of RMCC to
purchase the Country Club facilities. The Company
believes that both of these events will have a positive
impact on the sale of lots at The Fairways.
The Company has instituted incentives at The Fairways
whereby lot buyers who finance the purchase of a lot with
the Company, will not be required to pay interest for
certain periods depending on their down payment. In
October 1995, the Company sponsored the Street Of Dreams.
The Street of Dreams selects high-end custom home
developments, selects custom home builders to build luxury
custom homes and opens the homes to the viewing public.
Attendance at the Street of Dreams was estimated to be
approximately 75,000 people.
On January 16, 1996, the Company signed a Letter of Intent
with West Coast Properties, LLC (WCP), whereby WCP offered
to purchase from the Company, 20 lots (the Phase I Lots)
at The Fairways and obtain an option to purchase an
additional 20 lots (the Phase II lots), with the intent of
constructing single family residences on the lots
purchased. The purchase price of the Phase I Lots would
be the sum of $40,000 per lot plus payment of the Park
Fees applicable to
5. Real estate held for development and sale (continued):
the Phase I Lots. In addition, the Company would receive
20% of the gross sale price of each residential dwelling
sold, less $40,000, (the Phase I Success Payments) which
would be paid to the Company upon the close of each
escrow. The option to purchase the Phase II Lots would be
exercisable upon WCP'S sale of an aggregate of any 15 of
the Phase I Lots with completed single-family residences
located on such lots and the Company's receipt of the
Phase I Success Payments. The term of the option will
expire on June 30, 1997, unless extended by mutual
agreement of the parties. When WCP notifies the Company
that it intends to exercise the option it will make a
$25,000 non-refundable deposit, which deposit will be
applied to the purchase of the Phase II Lots upon exercise
of the option. The purchase price of the Phase II Lots
will be $45,000 per lot plus payment of the Park Fees due
on the Phase II Lots. In addition, the Company would
receive 20% of the gross sale price of each residential
dwelling sold, less the $45,000, (the Phase II Success
Payments), which would be paid to the Company upon the
close of each escrow. The Company will be permitted to
sell any of the Phase II Lots until such time as WCP
exercises its option. Any Phase II Lots sold by the
Company will be replaced with comparable lots. The
parties are currently negotiating the final terms of the
document. No assurance can be given that the parties will
be successful in completing the final documentation.
On May 3, 1995, the Company, through a foreclosure sale,
acquired 53 partially developed residential lots located
in the City of North Las Vegas, Nevada. The 53 lots were
formerly owned by Pine Ridge Joint Venture (PRJV). As
part of the settlement with the RTC, the 53 lots are
encumbered by a deed of trust in favor of the RTC. The
deed of trust requires a $6,000 payment for the release of
a lot.
6. Property and equipment and accumulated depreciation and amortization:
1995 1994
(Dollars in thousands)
Land and land improvements $ 3,106 $ 3,290
Building and improvements 1,679 1,679
Machinery and equipment 241 36
5,026 5,005
Less accumulated depreciation
and amortization 325 261
$ 4,701 $ 4,744
6. Property and equipment and accumulated depreciation and amortization
(continued):
Included in land and land improvements is $2,800,000
relating to the White Ranch and $146,000 relating to Sam
Hamburg Farms. The White Ranch consists of 10,000 acres
of agricultural land in which the Company has a 50%
interest. The Company and the other co-owner share
profits and losses equally. The Company has leased, for
the 1996 crop year, approximately 5,850 acres of the White
Ranch to various tenants, at rents ranging from
approximately $40 to $75 per acre. Of the 10,000 acres,
only 8,000 acres are farmable in its present condition.
Tenants are required to pay all water usage charges
applicable to the leased land. Sam Hamburg Farm consists
of 150 acres. Of the 150 acres, 40 acres contain the
airstrip and the shop areas which are the focus of
continuing attempts at chemical cleanup. The remaining
110 acres are leased to various tenants at an annual
rental of approximately $20,000.
7. Long-term notes receivable:
1995 1994
(Dollars in thousands)
RMPI and CBC, including accrued
interest $ $ 1,401
Prime plus 1% note due from
Continental Industries, Inc.(a) 1,174
BGC, including interest 2,692 3,047
Officer and Director 105
El Dorado, wholly-owned by a
director of the Company 744
Various real estate notes,
collateralized by deeds of trust
with interest ranging from
8% to 10% (b) 1,224 648
Other 870
3,916 7,989
Less allowances for doubtful
collectibility (c) (1,566) (4,568)
Less current maturities (837) (1,347)
$ 1,513 $ 2,074
(a) The note arose from the sale of the former electronic
subsidiary's assets. As of December 31,1995, the
Continental Industries, Inc. note has been written off
against the related allowance.
(b) Included in the various real estate notes is
approximately $725,000 resulting from the sale of lots
at the Fairways at Rancho Murieta. These notes are
subject to a collateral assignment in favor of the RTC.
See Note 10 of Notes to Consolidated Financial
Statements.
7. Long-term notes receivable (continued):
(c) The allowance for doubtful collectibility applies to
and consists of the following:
1995 1994
(Dollars in thousands)
RMPI and CBC $ $ 1,401
Continental Industries, Inc. 1,174
Baby Grand Corp. 1,566 1,566
El Dorado 427
$ 1,566 $ 4,568
8. Investments:
1995 1994
(Dollars in thousands)
Investments at cost, net of
valuation allowances, consist of:
Solano County Option (a) $ 1,045 $
Unimproved land, San Diego,
California (b) 366
Pine Ridge Joint Venture (c) 45 568
Partnership, Willows Ranch (d) 406 406
Tri-Star Joint Venture (e)
Steadfast Cattle Company (f) 64
Other 6 6
$ 1,566 $ 1,346
(a) The Company has an option (the Solano County Option) to
acquire approximately 1,690 acres of farm land located
in Solano County, California. The Company acquired the
Solano County Option as part of a settlement agreement
between BGC, and Anderson Entity, Bank One and MRI.
The purchase price of the Solano County Option was
$1,043,902. The Solano County Option provides that the
Company can purchase the 1,690 acres at a price of
$3,000,000. The Company will receive a credit of
$1,000,000 against the purchase price. The option
expires on May 1, 2003. Upon certain conditions and
the consent of the first lien holder on BGC's Maxim
Hotel and Casino and the Nevada Gaming Control Board,
MRI can require BGC to repurchase the Solano County
Option. (the Repurchase Agreement). The Repurchase
Agreement expires on the earlier of: (i) May 1, 2002
or (ii) 1 year prior to the date the option agreement
expires.
8. Investments (continued):
(b) Continental owned four parcels of unimproved
noncontiguous real property located northwest of San
Diego, California. Pursuant to the terms of the
settlement agreement with the RTC, Continental
transferred the San Diego Property to the RTC in
consideration of a $1,500,000 credit against the SASA
Obligation. See Notes 9 and 10 of Notes To
Consolidated Financial Statements.
(c) In June 1993, MRI entered into a joint venture known as
Pine Ridge Joint Venture (PRJV) with AJD, a Nevada
limited partnership, for the purpose of developing
approximately 92 single-family residences in Clark
County, Nevada. The development was scheduled to be
completed in two phases consisting of 32 residences
which were to be completed in 1994 in the first phase
and the balance to be completed in 1994 and 1995 in the
second phase. In connection with MRI's participation
in the joint venture, Mr. Wayne Pearson, a member of
the Company's Board of Directors and the Company's
Audit Committee, received a $5,000 finder's fee.
MRI contributed $500,000 to the joint venture in return
for a 20% interest in profits and capital. In
addition, the joint venture agreement provides that MRI
is to receive a 15% preference on its capital
contribution and a 15% increase in its share of profits
and capital each time MRI was required to make an
additional capital contribution. AJD's capital
contribution consisted of their net equity in the lots
to be developed. In addition, AJD was to be
responsible for the financing, construction and sale of
the finished residences. In June 1994, AJD informed
MRI that the joint venture needed an additional $75,000
to cover operating expenses and construction costs.
MRI contributed the $75,000 to the joint venture and in
return received an additional 10% interest in the
profits and capital of the joint venture thereby
bringing MRI's interest to 30%. During the months from
July to November 1994, the joint venture continued to
experience financial difficulties and MRI was forced to
make additional advances to the joint venture which
totaled $205,000. On or about November 1, 1994, MRI
informed AJD that it was taking control of the entire
operation of the joint venture at which time the
$205,000 advanced by MRI was converted to a loan
bearing interest at the rate of 15%. In addition,
MRI's interest in profits and capital was increased by
21% thereby bringing MRI's interest in the joint
venture to 51%.
In August 1994, the Company was notified that a Notice
of Default and Election to Sell Under Deed of Trust had
been filed in connection with a $400,000 note which was
collateralized by property representing approximately
60% of the property owned by PRJV. PRJV had until
December 30, 1994 to cure the default. PRJV was unable
to find financing satisfactory to the Company. On
December 31, 1994, SHF purchased the note from the note
holder for approximately $426,600 which included
approximately $20,000 in delinquent interest and
foreclosure and title fees in the approximate amount of
$6,600.
8. Investments (continued):
(c) continued
Due to cost overruns, lack of timely completion and
sales of houses, disbursements made not benefitting the
joint venture and the apparent inability of AJD to
cover its deficit equity in the joint venture, the
Company has provided a $486,000 allowance against its
investment in the joint venture.
Summarized condensed unaudited financial information of
PRJV as of 1995 and 1994 is as follows:
1995 1994
(Dollars in thousands)
BALANCE SHEET DATA
Assets:
Cash and construction
funds held in escrow $ 1 $ 293
Work in progress, including
land held for sale 574 2,178
Other 25 46
$ 600 $ 2,517
Liabilities and Equity:
Accounts payable $ 144 $ 270
Construction and land
loans payable 799 1,884
Equity (343) 363
$ 600 $ 2,517
OPERATING STATEMENT DATA
Sales $ 1,266 $ 1,180
Cost of sales (1,580) (1,276)
Loss from operations (706) (234)
Net loss (706) (582)
On February 6, 1996, the holder of the first lien
foreclosed on 8 finished lots in Phase 1. The Company
anticipates however, that the sale of the remaining
homes in Phase 1 will cover any additional cash
requirements that may be needed by PRJV.
(d) In May 1990, the Company made a loan to William
Maddocks, et al, a Central California real estate
investment group, (Maddocks) in the principal amount of
$1,000,000. The loan was collateralized by real
property in northern California. Maddocks paid all but
$315,000 of the loan. In 1992, the Company and
Maddocks formed a partnership called Willows Ranch.
The Company's contribution was the balance remaining on
the original $1,000,000
8. Investments (continued):
(d) continued
loan and Maddocks contributed the net equity in the
real estate that served as collateral for the Company's
loan. In return for its contribution, the Company
received a 25% interest in the partnership. Existing
liens on the property remained the sole liability of
Maddocks. The partnership agreement further provided
that no distribution would be made to Maddocks until
the Company had received its capital contribution plus
cumulative interest at the rate of 10% from June 1,
1992.
In November 1995, Maddocks and the Company agreed to
sell the partnership land, the partnership's only
asset, for a price of $835,000. The sale closed on
February 5, 1996. Out of the sale proceeds, the
Company received cash of approximately $209,000 and a
91.90% interest in a note in the amount of $243,430.
The note bears interest at the rate of 8.25% annually.
Principal payments of $24,343 plus accrued interest are
due annually commencing February 1, 1997, and
continuing until February 1, 2001, when the then
remaining balance of principal and accrued interest
shall be due and payable. The note is secured by a
deed of trust on the property sold.
(e) Tri-Star International Development (Tri-Star) and
another entity entered into a joint venture agreement
relating to the acquisition and development of real
property located in North Las Vegas, Nevada (the
Tri-Star Joint Venture). Tri-Star held a 50% interest in
the Tri-Star Joint Venture (the Tri-Star Interest). In
April 1994, the Company invested $287,500 in the Tri-Star
Interest, in exchange for which the Company
received a 25% interest in the Tri-Star Interest. The
Company's investment was to be used for certain
engineering costs and mapping the property. The
Company's interest was to be calculated as a function
of distributions payable to Tri-Star. As a result of
the Company's investment, the Company had an indirect
12 1/2% interest in the Tri-Star Joint Venture.
On July 29, 1994, the other venturer in the Tri-Star
Joint Venture notified Tri-Star that Tri-Star had not
fulfilled certain of its obligations under the Tri-Star
Joint Venture Agreement and therefore the Tri-Star
Joint Venture was terminated. Termination of the
Tri-Star Joint Venture had the effect of terminating the
Company's indirect interest in the Tri-Star Joint
Venture (and the property to be developed).
8. Investments (continued):
(e) continued
In January 1995, Tri-Star and the other venturers in
the Tri-Star Joint Venture agreed to submit the issue
of termination of the Tri-Star Joint Venture to
arbitration. The Company intervened in the
arbitration. The Company was subsequently informed
that Tri-Star had settled its dispute with the other
joint venturer and that the arbitration had been
dismissed. The Company has been unable to determine the
disposition of the $287,500 it invested in the MRI
Joint Venture. The Company is considering what legal
remedies may be available in order to recover its
investment.
(f) In July 1995, the Company's Board of Directors
authorized the Company to invest up to $200,000 for a
50% interest in a cattle feeding operation with an
unrelated third party. The parties formed a Limited
Liability Company named Steadfast Cattle Company
(Steadfast). Steadfast's primary operation is feeding
cattle, on leased land located in Gonzales, California,
that are owned by various ranchers and dairymen. As of
December 31, 1995, the Company has contributed
approximately $140,000 to Steadfast. In addition, the
Company has purchased equipment in the amount of
$225,000 which it leases to Steadfast. Because the
Company is the sole source of funding for Steadfast,
Steadfast has not made any of the required lease
payments. For the period ending December 31, 1995,
Steadfast had a $75,000 operating loss. On November
17, 1995, the holder of the first mortgage lien on the
feed lot filed a Notice of Default and Election to Sell
Under Deed of Trust. The Trustee Sale is scheduled to
take place on March 22, 1996. If Steadfast is unable to
negotiate a lease with the new owner of the feed lot,
the Company would be unable to recover its investment
in the cattle feeding operation and would suffer a
significant loss on the sale of the equipment that was
purchased by the Company for use in the cattle feeding
operation.
8. Investments (continued):
(f) continued
Summarized condensed unaudited financial information of
Steadfast as of and for the period ended December 31,
1995 is as follows:
BALANCE SHEET DATA (Dollars in thousands)
Assets:
Cash and receivables $ 256
Inventory 33
Other 3
292
Liabilities and Equity:
Accounts payable $ 228
Equity 64
$ 292
OPERATING STATEMENT DATA
Revenues $ 501
Operating Expenses 576
Net Loss $ (75)
9. Resolution Trust Corporation, as Receiver for San Antonio Savings
Association:
On October 24, 1995, the Company, along with Continental,
MRI and SHF, entered into a Settlement, Release and Loan
Modification Agreement (the Settlement Agreement) with the
RTC in connection with the SASA Obligation, which the RTC
alleged was $21,107,796 as of October 10, 1995. The
Settlement Agreement became effective December 6, 1995.
Pursuant to the Settlement Agreement and as full payment
of the SASA Obligation, (i) Continental transferred the
San Diego Property to the RTC in consideration of a
$1,500,000 credit against the SASA Obligation, (ii) the
Company paid $290,000 to the RTC, and (iii) the Company
delivered a secured promissory note to the RTC (the RTC
Settlement Note) in the amount of $2,710,000. In
addition, Continental received an order dismissing its
bankruptcy case, and the Company received orders
dismissing all of the litigation between the Company,
SASA, and the RTC. See Notes 10 and 14 of Notes to
Consolidated Financial Statements for a detailed
discussion of the terms of the RTC Settlement Note.
10. Long-term debt:
Long-term debt consists of the following at December 31:
1995 1994
(Dollars in thousands)
RTC Settlement Note $ 2,590 $
RMA 114 143
Other 93 25
Less current maturities
of long-term debt (208) (22)
$ 2,589 $ 146
Five year maturities of long-term debt are as follows:
(Dollars in thousands)
1996 $ 208
1997 132
1998 20
1999 27
2000 2,399
Thereafter 11
$ 2,797
The amount due RMA is for payment of park fees, is
non-interest bearing and is collateralized by a first deed of
trust on The Fairway lots. Principal payments, in the
amount of $1,658 per lot, are paid upon the close of escrow
of each sale of a lot in The Fairways. If on December 31,
1997, any lots remain unsold, then the balance of the amount
due becomes payable in full.
Other long-term debt consists of an equipment lease payable
in annual installments ranging from approximately $13,000 to
$24,000 and an unsecured note payable in annual installments
of $5,000.
The RTC Settlement Note is dated December 6, 1995, and is
due December 6, 2000. The note bears interest at the rate of
1% per annum in excess of the prime rate as published in the
Wall Street Journal. The rate is adjusted semi-annually
(the Interest Adjustment Date), provided, however, that
under no circumstances shall the rate be less than 8% or
more than 12% per annum. Payment terms are interest only,
payable monthly. Monthly payments are adjusted semi-annually
on the Interest Adjustment Date. The entire
remaining principal amount and all accrued and unpaid
interest is due and payable in full on the maturity date.
10. Long-term debt (continued):
The note is collateralized by the following:
a. A deed of trust with an assignment of rents (Nevada
Deed of Trust) with SHF. The Nevada Deed of Trust
encumbers 53 partially improved residential lots
located in Las Vegas, Nevada. SHF is entitled to the
release of a lot upon the payment of $6,000 to the RTC
for each lot released. The RTC will apply such
payments to the outstanding principal due on the note.
b. A deed of trust with an assignment of rents (Rancho
Murieta Deed of Trust) with SHF. The Rancho Murieta
Deed of Trust encumbers approximately 74 finished
residential lots located at The Fairways at Rancho
Murieta, California. SHF is entitled to the release of
a lot upon the payment of $40,000 to the RTC for each
lot released. The RTC will apply such payments to the
outstanding principal due on the note.
c. A collateral assignment of purchase money promissory
notes (The Promissory Notes) secured by deeds of trust
(Collateral Assignment) with SHF as pledgor and the RTC
as pledgee. The Collateral Assignment provides for SHF
to assign to the RTC the promissory notes and deeds of
trust in the approximate principal amount of $725,000.
Principal collections on the Promissory Notes will be
remitted to the RTC for application to the outstanding
principal due on the note.
11. Shareholders' equity:
On August 23, 1995, pursuant to an earlier agreement, the
Company purchased 85,000 shares of its common stock at $2
per share from the bankruptcy estates of Morris A. Shenker
and IJK Nevada, Inc. (the Bankruptcy Estates). The
Company has no further obligation to the Bankruptcy
Estates to purchase any additional common stock of the
Company that they may own. The acquired common stock is
included in treasury stock in the accompanying financial
statement.
The Company is authorized to issue 10,750,000 shares of
$0.50 par value Preferred shares. The Company gave
authority to its Board of Directors to issue such
Preferred shares in one or more series, and to fix the
number of shares in each series, and all designations,
relative rights preferences and limitations of the shares
issued in each series. As of December 31, 1995, the Board
of Directors has not exercised the authority granted, and
no such Preferred shares have been issued except for the
10,512 shares of Series B, $7.50 cumulative Preferred of
which 902 shares are held as Treasury stock.
11. Shareholders' equity (continued):
Dividends on the Company's Series B Preferred stock have not
been paid since the first quarter of 1982. The Company is
in arrears on such dividends in the amount of
approximately $1,028,000 as of December 31, 1995.
12. Contingencies:
a. The Company is involved in various legal proceedings
which are considered to be incidental to the ordinary
course of business. The Company believes that the
impact, if any, will not materially affect the
Company's operating results or consolidated financial
position.
b. SHF was advised of possible contamination on two sites
at Hamburg Farms, a storage facility for diesel fuels
and an old airstrip which had been used for the loading
and fueling of aircraft applying agricultural chemicals
to the surrounding farm lands. The Company has
completed the cleanup relating to the diesel storage
tanks at a cost of approximately $100,000. Clean up of
the airstrip has required major excavation of
contaminated earth and the treatment and disposal
thereof.
The Company has disposed of a large amount of the
contaminated earth at an approved site for the storage
of toxic wastes. However, 4,000 cubic yards of
contaminated earth still remain to be disposed of. The
Company, through its chemical and toxic clean-up
consultant, has been working with the California State
Environmental Protection Agency, in seeking alternate
means to the disposal in toxic dump sites of chemical
and toxics-laden soil. The State has participated in
the funding of several projects by a number of chemical
treatment firms in efforts to try other detoxification
methods on the soil.
Because of the ongoing testing, the State has not
imposed a disposal date upon the Company. Cost of
disposal is estimated at $100 per cubic yard. The
Company is unable to predict when the ongoing testing
will be complete or what the outcome of these tests
will be. As of December 31, 1995, the Company has paid
$448,000 and accrued $60,000 relating to the clean up,
including the $100,000 expended for the diesel storage
tank. The Company has not made an accrual for the
cost, if any, of removing the contaminated earth
pending the results of the various ongoing tests.
12. Contingencies (continued):
c. The Company has received a notice from the State of
California Franchise Tax Board (FTB) wherein the FTB
alleges that one of the Company's subsidiaries owes
California franchise tax, penalties and interest of
approximately $316,000. The FTB claims that the
Company is not permitted to file a unitary tax return
in California. The Company has retained legal counsel
to resolve the matter with the FTB. The matter is
currently being appealed to the California State Board
of Equalization.
d. The Company has been advised by the State of New
Jersey, Department of State, Division of Commercial
Recording that neither Dunes, Inc. nor DAC filed
reports required by state statutes for two consecutive
years. As a result, as of February 28, 1995, the state
of New Jersey revoked the active status of Dunes, Inc.
and DAC which can result in denial of their privilege
of doing business under their respective current names.
The Company has no current plans to resume operations
or pursue business opportunities in New Jersey and does
not intend to contest the action.
e. As more fully described in Note 4a(1), Mr. Anderson and
the Anderson Parties are involved in litigation with
the FDIC, the result of which could cause a foreclosure
of the pledged assets of the Anderson Parties. Such a
foreclosure of the Anderson Parties assets would have
a material adverse effect on the Company's ability to
collect the BGC Note, and in addition, will result in a
change in control of the Company.
13. Taxes:
The Company and its subsidiaries file a consolidated federal
income tax return.
In January 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes
(FAS 109). Previously, the Company accounted for income
taxes under Opinion No. 11 of the Accounting Principles
Board. The adjustments to the December 31, 1993 balance
sheet to adopt FAS 109 netted to $118,000. This amount is
reflected in the Consolidated Statements of Loss for 1993,
as the effect of a change in accounting principle.
13. Taxes (continued):
Deferred tax assets (liabilities) are comprised of the
following at December 31, 1995 and 1994:
1995 1994
(Dollars in thousands)
Loan reserves $ 536 $ 1,554
Accounts receivable reserves 8 61
Investment reserves 195 145
Real estate reserves 382 285
Loss carry forwards 14,702 14,572
Other 4 7
Gross deferred tax assets 15,827 16,624
Deferred tax assets
valuation allowance (15,810) (16,427)
17 197
Installment sales (73)
Real estate basis timing
difference (117)
Marketable securities valuation
allowance (17) (7)
Gross deferred tax liabilities (17) (197)
Net deferred tax assets $ 0 $ 0
A reconciliation of the changes in deferred tax assets
valuation allowance for 1995 and 1994 is as follows:
1995 1994
(Dollars in thousands)
Write-off of installment notes
receivable $ 73 $
Tax recognition of real estate
basis timing difference 117
Tax recognition of passive loss (7)
Book marketable securities
unrealized gain (10) (7)
Current year loss carry forwards 130 31
(Decrease) increase in loan reserves (1,018) 257
(Decrease) increase in accounts
receivable reserves (53) 16
Book reserve of investments loss 54 145
Book reserve of real estate loss 97
Change in deferred tax asset
valuation allowance (617) 442
Deferred tax assets valuation
allowance, beginning of year 16,427 15,985
Deferred tax assets valuation
allowance, end of year $ 15,810 $ 16,427
13. Taxes (continued):
A reconciliation of the federal statutory tax rate to the
effective tax rate for 1995, 1994 and 1993, is as follows:
Percentage of pre-tax income
1995 1994 1993
Federal statutory rate 34.00% (34.00%) (34.00%)
Net operating loss applied (18.38%)
Debt discharges and other (21.55%) (37.36%)
Non-deductible items:
Loss reserves 0.03% 21.91% 35.12%
Valuation adjustments 0.03% 12.22% 34.74%
Other 5.88% (0.13%) 1.50%
0.01% 0.00% 0.00%
The Company has the following net operating loss carryovers
available for income tax reporting purposes:
Year of expiration (Dollars in thousands)
2001 $10,000
2003 22,034
2004 1,908
2005 1,896
2006 3,550
2007 825
2008 2,425
2009 604
As more fully described in Note 4a(1), a change in control
of the Company could take place. If such a change in
control were to take place, it would have an effect as to
when and as to the amount of net operating losses that the
Company could use to offset future taxable income in any
given year. This annual amount, to the extent not used in
any given taxable year, may be carried forward and added
to the limitation of subsequent years.
13. Taxes (continued):
A subsidiary has not paid State of New Jersey income taxes
since 1980 due to a dispute with the taxing authorities
over the method of determining the tax liability. In
1983, judgments were entered in favor of the State
amounting to $247,000 exclusive of interest and penalties
for which the Company believes adequate provision has been
made in the consolidated financial statements.
Non-payment of New Jersey state income taxes could result
in suspension of the subsidiary's right to do business in
the state. This suspension would have no effect on the
current operations of the Company.
14. Extraordinary Item:
At December 31, 1995, the Company recorded as an
extraordinary item, a gain in the amount of $8,346,000,
net of tax of $80,000, resulting from the settlement of
the SASA Obligation with the RTC. The settlement resulted
in the Company and the RTC entering into a Settlement,
Release and Loan Modification Agreement (The Agreement).
The Agreement provided, among other things, that upon
execution of The Agreement, the Company would pay to the
RTC the sum of $290,000, transfer to the RTC the San Diego
property at an agreed upon price of $1,500,000 and sign a
promissory note in favor of the RTC in the principal
amount of $2,710,000. The effect of the foregoing was to
reduce the amount of the SASA Obligation by $8,616,000.
In connection with the settlement, the Company incurred
legal fees and other costs in the approximate amount of
$190,000.
<TABLE>
<CAPTION>
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
December 31, 1995
SCHEDULE VIII
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
(1) (2)
Balance at Charges to Charges to Other changes Balance
beginning Costs and other accounts- add (deduct) at end of
Classification of period expenses describe describe period
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts:
Notes Receivable - Director $427 $382 $72 (2) ($881)(1) $0
Long-term notes receivable -
related party 2,967 41 (2) (1,442)(1) 1,566
Accounts receivables 23 23
Long-term notes receivable 1,174 61(2) (1,235)(1) 0
$4,568 $405 ($3,558) $1,589
<FN>
(1) Credit to related notes receivable
(2) Interest income
</FN>
</TABLE>
S-1
<TABLE>
<CAPTION>
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
December 31, 1994
SCHEDULE VIII
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
(1) (2)
Balance at Charges to Charges to Other changes Balance
beginning Costs and other accounts-add (deduct) at end of
Classification of period expenses describe describe period
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Allowance for doubtful
accounts:
Accounts Receivable $131 $72 ($203)(1) $0
Long-term notes receivable 1,092 $82(2) 1,174
Notes Receivable - Director 427 427
Long-term notes receivable -
related party 2,759 125 111(2) (28)(3) 2,967
$3,982 $624 $193 ($231) $4,568
<FN>
(1) Write off against allowance
(2) Interest income
(3) Bad debt recovery
</FN>
</TABLE>
S-2
<TABLE>
<CAPTION>
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
December 31, 1993
SCHEDULE VIII
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
(1) (2)
Balance at Charges to Charges to Other changes Balance
beginning Costs and other accounts- add (deduct) at end of
Classification of period expenses describe describe period
(Dollars in thousands)
<S> <C> <C> <C> <C>
Allowance for doubtful
accounts:
Long-term notes receivable
- Related Party $2,670 $89 $2,759
Accounts receivable 142 ($11)(1) 131
Long-term notes receivable 219 873 1,092
$3,031 $962 ($11) $3,982
<FN>
(1) Bad debt recovery
</FN>
</TABLE>
S-3
<TABLE>
<CAPTION>
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
SCHEDULE XI - REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 1995
SCHEDULE XI
COLUMN A COLUMN B COLUMN C
Initial cost to Company
Buildings
and
Description Encumbrances Land Improvements
<S> <C> <C> <C> <C>
REAL ESTATE HELD FOR SALE (D o l l a r s i n T h o u s a n d s)
Approximately 110 residential lots Deed of Trust in
located in Rancho Murieta, California favor of Resolution
(The Fairways) Trust Corporation (2) $2,590
Deed of Trust in
favor of Rancho
Murieta Association 114 $3,880
Approximately 80 acres of unimproved
land located in Auburn, California 40
53 partially improved residential lots Deed of Trust in
located in North Las Vegas, Nevada favor of Resolution
Trust Corporation (2) 2,590 428
2,704 4,348
REAL ESTATE INCLUDED IN PROPERTY,
PLANT AND EQUIPMENT
Approximately 10,000 acres located in Kings
and Tulare County, California 2,800
Approximately 4,600 acres located in Fresno
and Merced County, California 1,866
Rice storage facility located in Yolo County,
California 159 1,678
4,825 1,678
$2,704 $9,173 $1,678
<CAPTION>
COLUMN A COLUMN D COLUMN E
Costs capitalized subsequent Gross amount at which carried
to acquisition at close of period (Note 1)
Buildings
Carrying and
Description Improvements costs Land Improvements Total
<S> <C> <C> <C> <C> <C>
REAL ESTATE HELD FOR SALE
Approximately 110 residential lots
located in Rancho Murieta, California
(The Fairways)
$6,837 $6,097 $6,097
Approximately 80 acres of unimproved
land located in Auburn, California 40 40
53 partially improved residential lots
located in North Las Vegas, Nevada
428 428
6,837 6,565 6,565
REAL ESTATE INCLUDED IN PROPERTY,
PLANT AND EQUIPMENT
Approximately 10,000 acres located in Kings
and Tulare County, California 2,800 2,800
Approximately 4,600 acres located in Fresno
and Merced County, California 276 146 146
Rice storage facility located in Yolo County,
California 159 1,678 1,837
276 3,105 1,678 4,783
$6,837 $276 $9,670 $1,678 $11,348
<CAPTION>
COLUMN A COLUMN F COLUMN G COLUMN H COLUMN I
Life on which
depreciation in
latest income
Accumulated Date of Date statement is
Description depreciation construction acquired computed
<S> <C> <C> <C> <C>
REAL ESTATE HELD FOR SALE
Approximately 110 residential lots
located in Rancho Murieta, California
(The Fairways)
01/31/90
Approximately 80 acres of unimproved
land located in Auburn, California 03/08/94
53 partially improved residential lots
located in North Las Vegas, Nevada
1995
REAL ESTATE INCLUDED IN PROPERTY,
PLANT AND EQUIPMENT
Approximately 10,000 acres located in Kings
and Tulare County, California
Approximately 4,600 acres located in Fresno
and Merced County, California 03/23/88
Rice storage facility located in Yolo County,
California 301 1985 11/14/90 10-31 years
301
$301
<CAPTION>
December 31,
1995 1994 1993
<S> <C> <C> <C>
Accumulated Depreciation
Reconciliation:
Balance-beginning of period $243 $185 $127
Additions during period:
Provision for depreciation 58 58 58
Balance - end of period $301 $243 $185
<CAPTION>
December 31,
1995 1994 1993
<S> <C> <C> <C>
Reconciliation:
Balance-beginning of period $12,920 $13,872 $13,714
Additions during period:
Improvements 17 239 1,222
Other acquisitions 427 40
13,364 14,151 14,936
Deductions during period:
Cost of sales 1,732 1,231 225
Valuation allowance (3) 284 839
Balance - close of period $11,348 $12,920 $13,872
<FN>
Note 1 The cost basis for Federal Income Tax purposes is the same as
for financial reporting purposes.
Note 2 The Deed of Trust in favor of the Resolution Trust Corporation
encumbers both properties in the total amount of $2,590.
Note 3 Valuation allowances have been provided against the lots in Rancho
Murieta. The purpose of the valuation allowance was to reduce the
carrying value to estimated market value.
</FN>
<CAPTION>
DUNES HOTELS AND CASINOS INC. AND SUBSIDIARIES
SCHEDULE XII - MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 1995
SCHEDULE XII
COLUMN A COLUMN B COLUMN C COLUMN D
Final Periodic
Interest Maturity Payment
Description Rates Date Term
<S> <C> <C> <C>
Collateralized by Sam Hamburg Farm Property:
Delgado 9.00% 02/22/00 Note 1
ATB Packing 8.50% 02/08/00 Note 2
Collateralized by Las Vegas Property:
Pine Ridge Joint Venture 12.00% 08/06/95 Note 3
Pine Ridge Joint Venture 13.00% 03/01/95 Note 3
Collateralized by Residence:
Johnson, Marvin 8.00% 06/29/96 Note 3
Collateralized by the Fairways Property:
Consolidated Kapital, Inc. 8.00% 01/25/97 Note 3 & 4
Martin, Chandler T. & Debra L. 8.00% 03/05/98 Note 3 & 4
Duerr Family Revocable Trust 8.00% 08/10/96 Note 3 & 4
James, Raymond L. & Cheryle 10.00% 12/14/97 Note 3 & 4
Parks, James P. & Dale A. 9.00% 02/22/98 Note 3 & 4
Xepoleas, John P. & Monterey A. 8.00% 03/15/98 Note 3 & 4
Brown, William A. 10.00% 04/14/98 Note 3 & 4
<CAPTION>
COLUMN A COLUMN E COLUMN F COLUMN G COLUMN H
Principal
Amount of
Loans
Carrying Subject to
Face Amount of Delinquent
Prior Amount of Mortgages Principal
Description Liens Mortgages (Note 3) or Interest
<S> <C> <C> <C> <C>
Collateralized by Sam Hamburg Farm Property:
Delgado None $50,099 $50,099 $0
ATB Packing None 126,737 107,727 0
Subtotal 176,836 157,826 0
Collateralized by Las Vegas Property:
Pine Ridge Joint Venture None 37,560 37,560 37,560
Pine Ridge Joint Venture None 82,398 82,398
Subtotal 119,958 119,958 37,560
Collateralized by Residence:
Johnson, Marvin None 85,000 85,000
Collateralized by the Fairways Property:
Consolidated Kapital, Inc. None 164,160 164,160 0
Martin, Chandler T. & Debra L. None 70,000 70,000 70,000
Duerr Family Revocable Trust None 193,800 193,800 0
James, Raymond L. & Cheryle None 79,200 79,200 0
Parks, James P. & Dale A. None 57,000 57,000 0
Xepoleas, John P. & Monterey A. None 76,000 76,000 0
Brown, William A. None 85,360 83,976 0
Subtotal 725,520 724,136 70,000
TOTAL $1,107,314 $1,086,920 $107,560
12/31/94
Balance at Beginning of Period $1,341,368
Additions During Period:
New Mortgage Loans 600,154
1,941,522
Deduction During Period:
Collections of Principal 854,602
Balance at End of Period $1,086,920
<FN>
Note 1 - Interest Payable Quarterly - Principal payable in 5 equal annual installments.
Note 2 - Principal and interest payable quarterly until maturity.
Note 3 - Interest payable monthly until maturity.
Note 4 - Subject to a collateral assignment in favor of the Resolution
Trust Corporation as Receiver for San Antonio Savings
Association, F.A.
</FN>
</TABLE>
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION PAGE NO.
3.01 Restated Certificate of Incorporation of
Dunes Hotels and Casinos Inc. dated June 17,
1982, is incorporated herein by reference to
Dunes Hotels and Casinos Inc. Annual Report
on Form 10-K (file no. 1-4385) for the year
ended December 31, 1994, Part IV, Item
14(a)(3), Exhibit 3.01.
3.02 Certificate of Amendment of Restated
Certificate of Incorporation of Dunes Hotels
and Casinos Inc. dated December 19, 1984, is
incorporated herein by reference to Dunes
Hotels and Casinos Inc. Annual Report on
Form 10-K (file no. 1-4385) for the year
ended December 31, 1994, Part IV, Item
14(a)(3), Exhibit 3.02.
3.03 Revised By-laws of Dunes Hotels and Casinos
Inc. dated December 1984, is incorporated
herein by reference to Dunes Hotels and
Casinos Inc. Annual Report on Form 10-K
(file no. 1-4385) for the year ended
December 31, 1994, Part IV, Item 14(a)(3),
Exhibit 3.03.
4.01 Specimen Certificate for the Common Stock of
Dunes Hotels and Casinos Inc., is
incorporated herein by reference to Dunes
Hotels and Casinos Inc. Annual Report on
Form 10-K (file no. 1-4385) for the year
ended December 31, 1994, Part IV, Item
14(a)(3), Exhibit 4.01.
4.02 Specimen Certificate for the Preferred Stock
of Dunes Hotels and Casinos Inc., is
incorporated herein by reference to Dunes
Hotels and Casinos Inc. Annual Report on
Form 10-K (file no. 1-4385) for the year
ended December 31, 1994, Part IV, Item
14(a)(3), Exhibit 4.02.
10.02 Agreement dated November 21, 1989 by and
between CCC Nevada Inc. (formerly
Continental Connector Corporation), and
Continental Industries, Inc.; Promissory
Note dated November 20, 1984, in the
principal amount of $3,000,000 made by
Continental Industries, Inc. to Continental
Connector Corporation; Allonge to Promissory
Note, dated November 20, 1989, in the
original principal amount of $3,000,000 made
by Continental Industries, Inc. to
Continental Connector Corporation; Security
Agreement dated as of November 20, 1984 by
and between Continental Industries, Inc. and
Continental Connector Corporation; and
Continuing Guaranty dated April 2, 1985, by
Morris Blinder and Meyer Blinder in favor of
Continental Connector Corporation, are
incorporated herein by reference to Dunes
Hotels and Casinos Inc. Annual Report on
Form 10-K (file no. 1-4385) for the year
ended December 31, 1994, Part IV, Item
14(a)(3), Exhibit 10.02.
10.04 Settlement Agreement dated June 28, 1988, by
and between San Antonio Savings Association
and Dunes Hotels and Casinos Inc.; First
Amendment to Settlement Agreement dated
December 5, 1989, by and between San Antonio
Savings Association, F.A. (assignee of San
Antonio Savings Association) and Dunes
Hotels and Casinos Inc., is incorporated
herein by reference to Dunes Hotels and
Casinos Inc. Annual Report on Form 10-K
(file no. 1-4385) for the year ended
December 31, 1994, Part IV, Item 14(a)(3),
Exhibit 10.04. Settlement Release and Loan
Modification Agreement dated October 24,
1995, by and among the Resolution Trust
Corporation, Dunes Hotels and Casinos Inc.,
Continental California Corporation, M & R
Investment Company, Inc. and SHF Acquisition
Corporation, is incorporated herein by
reference to Dunes Hotels and Casinos Inc.
Quarterly Report on Form 10-Q for the nine
months ended September 30, 1995, Item 6,
Exhibit 10.01. Order Granting Joint Motion
to Dismiss Bankruptcy Case and Adversary
Proceeding, dismissing bankruptcy case of
Continental California Corporation, is
incorporated herein by reference to Dunes
Hotels and Casinos Inc. Current Report on
Form 8-K dated November 22, 1995, Item 7(c),
Exhibit 99.01.
10.05 Stipulation and Order for Dismissal with
Prejudice filed in the United States
Bankruptcy Court, District of Nevada, Case
No. BK-S-92-20989 (RCJ) executed by The
Valley National Bank of Arizona, EurekaBank,
M&R Investment Company, Inc. and Baby Grand
Corp.; Compromise Agreement dated November
9, 1992, by and among Maxim Development, The
Valley National Bank of Arizona and Redwood
Bank; Settlement Agreement and Mutual
Release dated November 2, 1992, by and among
EurekaBank, The Valley National Bank of
Arizona, M&R Investment Company, Inc. and
Baby Grand Corp.; Addendum to Settlement
Agreement and Mutual Release dated November
2, 1992, by and among EurekaBank, The Valley
National Bank of Arizona, M&R Investment
Company, Inc., and Baby Grand Corp.;
Stipulation for Dismissal of Appeal with
Prejudice filed in the United States
District Court, District of Nevada, Case No.
CV-S-92-675-LVG (RCH) dated November 2, 1992
and executed by The Valley National Bank of
Arizona, Baby Grand Corp., M&R Investment
Company, Inc. and the official Unsecured
Creditors' Committee; Promissory Note dated
November 2, 1992, in the principal amount of
$2,650,000 made by Baby Grand Corp. to M&R
Investment Company, Inc.; Amended and
Restated Pledge Agreement dated November 2,
1992, by and between Baby Grand Corp. and
M&R Investment Company, Inc.; and Release of
Assignment of Leases, Rents and Revenues
dated November 2, 1992, by M&R Investment
Company, Inc., are incorporated herein by
reference to Dunes Hotels and Casinos Inc.
Annual Report on Form 10-K (file no. 1-4385)
for the year ended December 31, 1992, Part
IV, Item 14(a)(3), Exhibit 10.05. Second
Settlement and Forbearance Agreement dated
February 9, 1995, by and among Baby Grand
Corp., M & R Investment Company, Inc. and
Bank One, Arizona, NA.; and Purchase
Agreement (including Option Agreement) dated
February 9, 1995, by and between Baby Grand
Corp. and M & R Investment Company, Inc.,
are incorporated herein by reference to
Dunes Hotels and Casinos Inc. Current Report
on Form 8-K (file no. 1-4385) dated February
9, 1995, Item 7, Exhibit Nos. 10.01 and
10.02.
10.06 Straight Note dated August 28, 1990, in the
principal amount of $486,000 made by Rancho
Murieta Properties, Inc. to SHF Acquisition
Corporation; and Deed of Trust with
Assignment of Rents (Short Form) dated
August 28, 1990, by and between Rancho
Murieta Properties, Inc., First American
Title Insurance Company and SHF Acquisition
Corporation, securing $486,000 Straight
Note, are incorporated herein by reference
to Dunes Hotels and Casinos Inc. Annual
Report on Form 10-K (file no. 1-4385) for
the year ended December 31, 1990, Part IV,
Item 14(a)(3), Exhibit 10.07. Second
Extension Agreement dated September 30,
1993, by and between SHF Acquisition
Corporation and Rancho Murieta Properties,
Inc.; Pre-workout Letter Agreement dated
November 9, 1993, by and between SHF
Acquisition Corporation and Rancho Murieta
Properties, Inc.; Assignment of Membership
Proceeds dated September 30, 1993, by and
among SHF Acquisition Corporation, Rancho
Murieta Properties, Inc. and M & R
Investment Company, Inc.; and UCC-1
Financing Statement dated November 29, 1993,
by Rancho Murieta Properties, Inc. in favor
of SHF Acquisition Corporation and M & R
Investment Company, Inc., are incorporated
herein by reference to Dunes Hotels and
Casinos Inc. Annual Report on Form 10-K
(file no. 1-4385) for the year ended
December 31, 1993, Part IV, Item 14(a)(3),
Exhibit 10.10.
10.09 Promissory Note dated May 31, 1990, in the
principal amount of $1,100,000, made by Yolo
Oil and Gas, Inc. to SHF Acquisition
Corporation; Guaranty of Payment and
Performance dated May 29, 1990, by 500 First
Street, a California general partnership,
Kent N. Calfee, William Maddocks and Kenneth
Wallace in favor of SHF Acquisition
Corporation; Deed of Trust and Security
Agreement dated May 31, 1990, by and among
Yolo Oil and Gas, Inc., Chicago Title
Insurance Company and SHF Acquisition
Corporation; Deed of Trust and Security
Agreement dated May 29, 1990, by and among
500 First Street, Wildlife Artisan, Inc.,
Chicago Title Insurance Company and SHF
Acquisition Corporation; Assignment of Rents
and Leases dated May 31, 1990, by and
between Wildlife Artisan, Inc. and 500 First
Street, for the benefit of SHF Acquisition
Corporation; Environmental Indemnity
Agreement dated May 31, 1990, by Yolo Oil &
Gas, Inc., 500 First Street, Kent N. Calfee,
William Maddocks and Kenneth Wallace in
favor of SHF Acquisition Corporation; Loan
Agreement dated May 25, 1990, by and among
Yolo Oil & Gas, Inc., SHF Acquisition
Corporation, 500 First Street, and William
Maddocks; Lender's Escrow Instructions dated
May 31, 1990, by Yolo Oil & Gas, Inc.,
Chicago Title Insurance Company and SHF
Acquisition Corporation; Deed of Trust and
Security Agreement dated May 29, 1990, by
500 First Street, Wildlife Artisan, Inc.,
Chicago Title Insurance Company and SHF
Acquisition Corporation; and Assignment of
Rents and Leases dated May 31, 1990, by
Wildlife Artisan, Inc., 500 First Street,
and SHF Acquisition Corporation, are
incorporated herein by reference to Dunes
Hotels and Casinos Inc. Annual Report on
Form 10-K (file no. 1-4385) for the year
ended December 31, 1990, Part IV, Item
14(a)(3), Exhibit 10.11.
10.10 Letter Agreement dated July 21, 1991, by and
among Calfee & Young (on behalf of M & R
Investment Company, Inc.), Rancho Murieta
Properties, Inc. and CBC Builders, Inc.;
Promissory Note in the principal amount of
$955,500 made by Rancho Murieta Properties,
Inc. and CBC Builders, Inc. to M&R
Investment Company, Inc.; Deed of Trust with
Assignment of Rents dated July 22, 1991, by
CBC Builders, Inc. in favor of M&R
Investment Company, Inc.; Deed of Trust
dated July 22, 1991 by CBC Builders, Inc. in
favor of M&R Investment Company, Inc.;
Collateral Assignment of Partnership
Interest dated July 22, 1991, by Erik J.
Tallstrom in favor of M&R Investment
Company, Inc.; Assignment of Director's Fees
dated July 22, 1991, by and between CBC
Builders, Inc. and M&R Investment Company,
Inc.; Memorandum of Option to Purchase dated
July 22, 1991, by and between CBC Builders,
Inc. and M&R Investment Company, Inc.; and
Personal Guaranty dated July 22, 1991, by
Erik J. Tallstrom, are incorporated by
reference to Dunes Hotels and Casinos Inc.
Annual Report on Form 10-K (file no 1-4385)
for the year ended December 31, 1991, Part
IV, Item 14(a)(3), Exhibit 10.12. Extension
Agreement dated September 30, 1993, by and
among M & R Investment Company, Inc., Rancho
Murieta Properties, Inc. and CBC Builders,
Inc.; Pre-workout Letter Agreement dated
November 9, 1993, by and among M & R
Investment Company, Inc., Rancho Murieta
Properties, Inc. and CBC Builders, Inc.;
Extension of Option Agreement dated
September 30, 1993, by and between M&R
Investment Company, Inc. and CBC Builders,
Inc, are incorporated herein by reference to
Dunes Hotels and Casinos Inc. Annual Report
on Form 10-K (file no. 1-4385) for the year
ended December 31, 1993, Part IV, Item
14(a)(3), Exhibit 10.10.
10.14 Corporation Deed of Trust with Assignment of
Rents dated March 23, 1993, by and among
Andrew P. Marincovich and Matilda C.
Marincovich, First American Title Insurance
Company and M&R Investment Company, Inc.;
Promissory Note dated July 22, 1992, in the
principal amount of $500,000 made by El
Dorado Vineyards, Inc. to M&R Investment
Company, Inc.; Business Loan Agreement by
and among M&R Investment Company, Inc., El
Dorado Vineyards, Inc. and Andrew P.
Marincovich; Security Agreement by El Dorado
Vineyards, Inc. in favor of M&R Investment
Company, Inc.; Personal Guaranty dated April
7, 1993, by Andrew P. Marincovich in favor
of M&R Investment Company, Inc., are
incorporated herein by reference to Dunes
Hotels and Casinos Inc. Annual Report on
Form 10-K (file no. 1-4385) for the year
ended December 31, 1992, Part IV, Item
14(a)(3), Exhibit 10.14. Promissory Note in
the principal amount of $500,000, made by El
Dorado Vineyards, Inc. to M&R Investment
Company, Inc.; Promissory Note in the
principal amount of $8,800 made by El Dorado
Vineyards, Inc. to M&R Investment Company,
Inc.; Promissory Note in the principal
amount of $3,945.21 made by El Dorado
Vineyards, Inc. to M&R Investment Company,
Inc.; Promissory Note in the principal
amount of $39,591.29 made by El Dorado
Vineyards, Inc. to M&R Investment Company,
Inc.; Business Loan Agreement by and among
M&R Investment Company, Inc., El Dorado
Vineyards, Inc. and Andrew P. Marincovich;
Personal Guaranty by Andrew P. Marincovich
in favor of M&R Investment Company, Inc.;
and Security Agreement by El Dorado
Vineyards, Inc. in favor of M&R Investment
Company, Inc., are incorporated herein by
reference to Dunes Hotels and Casinos Inc.
Annual Report on Form 10-K (file no. 1-4385)
for the year ended December 31, 1993, Part
IV, Item 14(a)(3), Exhibit 10.14. Loan
Modification Agreement dated July 15, 1994,
by and among El Dorado Vineyards, Inc.,
Andrew P. Marincovich and M&R Investment
Company, Inc.; Durable Special Power of
Attorney dated July 21, 1994 by Andrew P.
Marincovich; Promissory Note dated July 15,
1994, in the principal amount of $500,000
made by El Dorado Vineyards, Inc. to M&R
Investment Company, Inc.; Promissory Note
dated July 15, 1994, in the principal amount
of $39,591.32 made by El Dorado Vineyards,
Inc. to M&R Investment Company, Inc.;
Promissory Note dated July 15, 1994, in the
principal amount of $3,945.21 made by El
Dorado Vineyards, Inc. to M&R Investment
Company, Inc.; Promissory Note dated July
15, 1994, in the principal amount of
$8,800.00 by El Dorado Vineyards, Inc. to
M&R Investment Company, Inc.; Promissory
Note dated July 15, 1994, in the principal
amount of $12,184.86 made by El Dorado
Vineyards, Inc. to M&R Investment Company,
Inc.; and Promissory Note dated July 19,
1994, in the principal amount of $153,428.94
by El Dorado Vineyards, Inc. to M&R
Investment Company, Inc., are incorporated
herein by reference to Dunes Hotels and
Casinos Inc. Quarterly Report on Form 10-Q
(file no. 1-4385) for the six months ended
June 30, 1994, Item 6, Exhibit 10.01. Note
Modification Agreement (with Exhibits A
through F) dated January 5, 1995, by and
among El Dorado Vineyards, Inc., Andrew P.
Marincovich and M&R Investment Company,
Inc., is incorporated herein by reference to
Dunes Hotels and Casinos Inc. Annual Report
on Form 10-K (file no. 1-4385) for the year
ended December 31, 1994, Part IV, Item
14(a)(3), Exhibit 10.14.
10.16 Parks Development Agreement dated February
20, 1991, by and among the Rancho Murieta
Association, the Rancho Murieta Community
Services District, Rancho Murieta
Properties, Inc., CBC Builders, Inc. and SHF
Acquisition Corporation, is incorporated
herein by reference to Dunes Hotels and
Casinos Inc. Annual Report on Form 10-K
(file no. 1-4385) for the year ended
December 31, 1993, Part IV, Item 14(a)(3),
Exhibit 10.16. Settlement Agreement
Regarding Payment of Park Fees (not dated)
by and among Rancho Murieta Association, SHF
Acquisition Corporation, CBC Builders, Inc.,
Rancho Murieta Properties, Inc. and Rancho
Murieta Community Services District of
Sacramento County, is incorporated herein by
reference to Dunes Hotels and Casinos Inc.
Annual Report on Form 10-K (file no. 1-4385)
for the year ended December 31, 1994, Part
IV, Item 14(a)(3), Exhibit 10.16.
10.17 Inter-Creditor Agreement dated September 30,
1993, by and among SHF Acquisition
Corporation, M & R Investment Company, Inc.
and Calfee & Young, is incorporated herein
by reference to Dunes Hotels and Casinos
Inc. Annual Report on Form 10-K (file no. 1-4385)
for the year ended December 31, 1993,
Part IV, Item 14(a)(3), Exhibit 10.17.
10.18 Commercial Premises Lease dated July 1,
1993, by and between California Dehydrating
Company and SHF Acquisition Corporation, is
incorporated herein by reference to Dunes
Hotels and Casinos Inc. Annual Report on
Form 10-K (file no. 1-4385) for the year
ended December 31, 1993, Part IV, Item
14(a)(3), Exhibit 10.18.
10.19 Renewal Promissory Note secured by Security
Agreement Modification Agreement dated June
1989, by and between Eureka Federal Savings
and Loan Association and Andco Development
Group, Inc.; Security Agreement-Pledge dated
June 1989, by and between Rancho Murieta
Properties, Inc. and Eureka Federal Savings
and Loan Association; Agreement to Modify
Promissory Note dated June 1989, by and
among Eureka Federal Savings and Loan
Association, Andco Development Group, Inc.,
Andco Land and Development Company, Inc.
and CBC Builders, Inc.; Extension Agreement
dated February 1, 1990, by and among Eureka
Federal Savings and Loan Association, Andco
Development Group, Inc., Andco Land and
Development Company, Inc., Rancho Murieta
Properties, Inc., Erik J. Tallstrom and John
B. Anderson; Guaranty dated October 1, 1987,
by John B. Anderson in favor of Eureka
Federal Savings and Loan Association;
Guaranty dated October 1, 1987, by Erik J.
Tallstrom in favor of Eureka Federal Savings
and Loan Association; Guaranty dated October
1, 1987, by Rancho Murieta Properties, Inc.
in favor of Eureka Federal Savings and Loan
Association; Amendment No. 1 to Guaranty
dated June 1989, by and between John B.
Anderson and Eureka Federal Savings and Loan
Association; Amendment No. 1 to Guaranty
dated June 1989, by and between Erik J.
Tallstrom and Eureka Federal Savings and
Loan Association; Amendment No. 1 to
Guaranty dated June 1989, by and between
Rancho Murieta Properties, Inc. and Eureka
Federal Savings and Loan Association;
Corporation Deed of Trust with Assignment of
Rents dated June 1989, by and between Rancho
Murieta Properties, Inc. and Eureka Federal
Savings and Loan Association; Agreement for
Purchase and Sale of Promissory Note dated
November 24, 1993, by and between Realecon,
Inc. and M&R Investment Company, Inc.;
Assignment of Promissory Note dated November
24, 1993, by and between Realecon, Inc. and
M&R Investment Company, Inc.; Assignment and
Assumption Agreement of Security Agreement
and Guaranties dated November 24, 1993,
between Realecon, Inc. and M&R Investment
Company, Inc.; Secured Promissory Note dated
November 24, 1993, in the principal amount
of $125,000 by M&R Investment Company, Inc.
to Realecon, Inc.; Assignment of Deed of
Trust with Request for Special Notice dated
November 24, 1993, by Realecon, Inc. in
favor of M&R Investment Company, Inc.; and
Corporation Deed of Trust with Assignment of
Rents dated November 24, 1993, by SHF
Acquisition Corporation in favor of
Realecon, Inc, are incorporated herein by
reference to Dunes Hotels and Casinos Inc.
Annual Report on Form 10-K (file no. 1-4385)
for the year ended December 31, 1993, Part
IV, Item 14(a)(3), Exhibit 10.19.
10.20 Pine Ridge Joint Venture Agreement dated
June 1993, by and between AJD and M & R
Investment Company, Inc., is incorporated
herein by reference to Dunes Hotels and
Casinos Inc. Annual Report on Form 10-K
(file no. 1-4385) for the year ended
December 31, 1993, Part IV, Item 14(a)(3),
Exhibit 10.20. Pine Ridge Joint Venture --
Joint Venture Meeting-- November 10, 1994,
discussing additional capital requirements
for the continuing operations of Pine Ridge
Joint Venture and equity increases to M&R
Investment Company, Inc. related thereto, is
incorporated herein by reference to Dunes
Hotels and Casinos Inc. Annual Report on
Form 10-K (file no. 1-4385) for the year
ended December 31, 1994, Part IV, Item
14(a)(3), Exhibit 10.20.
10.21 Letter dated March 28, 1994 from M&R
Investment Company, Inc. to Michael Shipsey
and Tri-Star International Development
regarding purchase of a 25% interest of
Tri-Star International Development's 50%
interest in Arroyo Grande Joint Venture
Agreement of distributable cash; and Letter
dated July 29, 1994 from Dennis L. Kennedy
of Lionel Sawyer & Collins to Tri-Star
International Development regarding
termination of Tri-Star International
Development's interest in the Arroyo Grande
Joint Venture, are incorporated herein by
reference to Dunes Hotels and Casinos Inc.
Annual Report on Form 10-K (file no. 1-4385)
for the year ended December 31, 1994, Part
IV, Item 14(a)(3), Exhibit 10.21.
10.22 Agreement dated January 1, 1996, by and
between California Dehydrating Company, Inc.
and SHF Acquisition Corporation regarding
use of the California Dehydrating name and
a Covenant Not to Compete.
10.23 Commercial Premises Lease dated March 1,
1995, by and between Pheasant Investment
Corporation and SHF Acquisition Corporation
regarding the lease of the rice drying
facility in West Sacramento, California.
10.24 Reimbursement Agreement dated September 20,
1995, by and between Rancho Murieta
Community Services District and SHF
Acquisition Corporation regarding the amount
of the reimbursement due SHF for excess work
done at The Fairways at Rancho Murieta that
will benefit other properties within the
boundaries of Rancho Murieta.
10.25 Assignment of promissory note in the
original principal amount of $57,000 made by
James P. Parks and Dale A. Parks in favor of
SHF Acquisition Corporation; Promissory Note
dated February 13, 1995, made by James P.
Parks and Dale A. Parks in favor of SHF
Corporation; Deed of Trust dated February
13, 1995, made by James P. Parks and Dale A.
Parks.
10.26 Assignment of promissory note in the
original principal amount of $70,000 made by
Chandler T. Martin and Debra L. Martin in
favor of SHF Acquisition Corporation;
Promissory Note dated March 2, 1992, made by
Chandler T. Martin and Debra L. Martin in
favor of SHF Acquisition Corporation; Letter
dated April 6, 1994, extending the due date
of the note to March 10, 1998; Deed of Trust
dated March 2, 1992, made by Chandler T.
Martin and Debra L. Martin.
10.27 Assignment of promissory note in the
original principal amount of $164,160 made
by Consolidated Kapital, Inc. in favor of
SHF Acquisition Corporation; Promissory Note
dated January 24, 1992, made by Consolidated
Kapital, Inc in favor of SHF Acquisition
Corporation; Deed of Trust dated January 24,
1992, made by Consolidated Kapital, Inc.
10.28 Assignment of promissory note in the
original principal amount of $85,360 made by
William A. Brown in favor of SHF Acquisition
Corporation; Promissory Note dated April 6,
1995, made by William A. Brown in favor of
SHF Acquisition Corporation; Deed of Trust
dated April 6, 1995, made by William A.
Brown.
10.29 Assignment of promissory note in the
original principal amount of $76,000 made by
John P. Xepoleas and Monterey A. Xepoleas in
favor of SHF Acquisition Corporation;
Promissory Note dated March 10, 1995, made
by John P. Xepoleas and Monterey A. Xepoleas
in favor of SHF Acquisition Corporation;
Deed of Trust dated March 10, 1995, made by
John P. Xepoleas and Monterey A. Xepoleas.
10.30 Assignment of promissory note in the
original principal amount of $193,800 made
by T. E. Duerr and P. A. Duerr, Trustees of
the Duerr Family Revocable Trust dated
October 14, 1987, in favor of SHF
Acquisition Corporation; Promissory Note
dated July 22, 1992, made by T.E. Duerr and
P. A. Duerr, Trustees of the Duerr Family
Revocable Trust in favor of SHF Acquisition
Corporation; Deed of Trust dated July 22,
1992, made by T.E. Duerr and P. A. Duerr,
Trustees of the Duerr Family Revocable
Trust.
10.31 Assignment of promissory note in the
original principal amount of $79,000 made by
Raymond L. James and Cheryle James in favor
of SHF Acquisition Corporation; Promissory
Note dated December 7, 1994, made by Raymond
L. James and Cheryle James in favor of SHF
Acquisition Corporation; Deed of Trust dated
December 7, 1994, made by Raymond L. James
and Cheryle James.
10.32 Installment Note dated January 17, 1996,
made by Mukhtar Ahmad and Nazra P. Ahmad in
favor of Willows Ranch Group, consisting of
SHF Acquisition Corporation and 500 First
Street wherein SHF Acquisition Corporation
has a 91.90% interest.
10.33 Letter of Intent by and between SHF
Acquisition Corporation and West Coast
Properties, LLC, dated January 11, 1996,
regarding the sale of 20 lots and an
option to purchase an additional 20
at The Fairways.
21.01 Subsidiaries of Registrant.
27.01 Financial Data Schedule
AGREEMENT
DATE: January 1, 1996
PARTIES: CALIFORNIA DEHYDRATING COMPANY, INC. ("Cal Dehy"); and
SHF ACQUISITION CORPORATION ("SHF")
RECITALS:
A. Cal Dehy formerly owned and operated that certain rice
drying and storage facility located at 805 S. River Road, West
Sacramento, California ("Facility").
B. SHF desires to lease the Facility and to operate under
the historic name California Dehydrating Company and/or Cal Dehy.
SHF further desires to maintain the historical customers of the
Facility and desires that Cal Dehy not compete against SHF in the
rice drying and storage business.
AGREEMENTS:
In consideration of the mutual covenants contained
herein, the parties agree as follows:
1. LICENSE AGREEMENT. Cal Dehy hereby authorizes SHF to
use the names California Dehydrating Company and/or Cal Dehy in
connection with any and all business operations in any way
associated with the Facility. All such rights shall automatically,
without notice, terminate at the end of the term hereof.
2. COVENANT NOT TO COMPETE. Prior to the end of the term
hereof Cal Dehy expressly agrees not to compete in any way,
directly or indirectly, with SHF s rice drying and storage
operations. Provided further that Cal Dehy shall cooperate with
SHF in all reasonable attempts of SHF to maintain the business and
customers of Cal Dehy.
3. TERM. The term of this agreement shall commence on the
date first set forth above and continue until December 31, 1996.
4. CONSIDERATION. As and for consideration hereunder SHF
agrees to pay al Dehy the sum of Five Thousand Dollars ($5,000.00)
per month commencing January 1, 1996, and continuing to and
including December 1, 1996. SHF shall also indemnify and hold Cal
Dehy harmless from any and all liability, claims, defense costs or
other expenses, costs, or sums relating to or resulting from SHF s
operation of the Facility and/or SHF s use of the name California
Dehydrating Company and/or Cal Dehy.
5. ATTORNEYS' FEES. If either party files an action or
brings any proceeding against the other arising out of this
agreement, then as between the parties, the prevailing party shall
be entitled to recover as an element of its costs of suit, and not
as damages, reasonable attorneys fees to be fixed by the court.
The "prevailing party" shall be the party who is entitled to
recover its costs of suit, whether or not suit proceeds to final
judgment. A party not entitled to recover its costs shall be
counted in calculating the amount of a judgment for purposes of
determining whether a party is entitled to its costs or attorneys
fees.
Executed as of the date first set forth above.
SHF: SHF Acquisition Corporation
By:/s/ James H. Dale
James Dale
Cal Dehy: CALIFORNIA DEHYDRATING COMPANY, INC.
By:/s/ John B. Anderson
John B. Anderson
COMMERCIAL PREMISES LEASE
DATE: March 1, 1995
PARTIES: PHEASANT INVESTMENT CORPORATION (hereinafter referred to
as "Landlord"); and
SHF ACQUISITION CORPORATION, a Nevada corporation
(hereinafter referred to as "Tenant").
RECITALS:
A. The Landlord is the owner of certain real property and
attached grain drying and storage machinery, equipment and
warehouses located at 805 South River Road, West Sacramento,
California, and more particularly described as Parcel No. 058-320-141
on the records of Yolo County, California, and hereinafter
referred to as the "Premises."
B. Landlord desires to lease to Tenant and Tenant desires
to lease from Landlord the Premises, together with all
appurtenances, subject to the terms and conditions contained
herein.
AGREEMENTS:
In consideration of the mutual covenants contained
herein, the parties agree as follows:
1. LEASE: The Landlord leases to Tenant and the Tenant
leases from landlord, on the terms and conditions set forth in this
Lease, the Premises, together with all appurtenances.
2. TERM: The term of this Lease starts on the date hereof
and terminates on February 28, 1997.
3. RENT: Tenant shall pay to Landlord, as rent for the
Premises, without deduction or set off, at such place or places as
may be designated from time-to-time by Landlord, the sum of Four
Thousand Five Hundred Dollars ($4,500.00) per month on the first
day of each month commencing March 1, 1995, and continuing on the
first day of each day thereafter to and including February 1, 1997.
Such rental to be paid to Landlord and mailed to Landlord
at P.O. Box 2143, Woodland, California 95776.
4. RELATIONSHIP OF THE PARTIES: The relationship of the
parties hereto is that of landlord and Tenant, and Landlord shall
not be deemed a partner or a joint venturer with Tenant by reasons
of the provisions of this Lease.
5. USE: The Premises are to be used by Tenant for the
drying and storage of rice or other grains. All operations
incident to the use of the Premises shall be carried out in
accordance with the standards of such facilities in the general
area, and in accordance with any and all rules, regulations and
conditions lawfully imposed by appropriate governmental units or
agencies.
6. ENTRY BY OWNER: Tenant shall permit Landlord, and
Landlord s agents and assigns, at all reasonable times, to enter
the Premises, for the purposes of inspection, compliance with the
terms of this Lease, posting notices, and all other lawful terms of
this lease, posting notices, and all other lawful purposes. Tenant
shall supply Landlord and its agents and assigns with keys and
other instruments necessary to effect entry on the Premises.
Tenant shall make and keep pertinent records of all
operations conducted under this Lease and shall make them available
to Landlord and Landlord s agents and assigns at all reasonable
times for inspection.
7. EXPENSES: Tenant shall pay all costs and expenses in
connection with the use and occupation of the Premises during the
term of this Lease, including but not limited to, taxes, insurance,
utilities, and normal maintenance and repair.
8. WASTE: Tenant shall not commit, or permit others to
commit waste on the Premises, or to maintain a nuisance on the
Premises. Tenant accepts the Premises in its present condition and
agrees on the last day of the term or upon sooner termination of
the lease, to surrender the Premises in the same condition as when
received, except for normal wear and tear.
9. ALTERATIONS: Tenant shall not make or permit to be
made any alterations on the Premises without first obtaining the
Landlord s consent. Additions to or alterations of the Premises
shall become at once the property of the Landlord. Tenant shall
keep the Premises free from any liens arising out of work
performed, materials furnished, or any other obligations incurred
by the Tenant.
10. LIABILITY AND INSURANCE: Tenant agrees to keep
Landlord free from all liability claims for damages arising from
any injury from any cause to any person, including Tenant, or to
property of any kind belonging to anyone, including Tenant, arising
from Tenant s operations while in or upon the Premises. Tenant
further agrees to take out and to keep in full force and effect
during the term of this Lease, at Tenant s expense, a policy of
public liability insurance for protection against liability to the
public arising as an incident to the use of, or resulting from any
action occurring in or about the Premises. The policy shall
provide for combined single limit coverage in an amount not less
than One Million Dollars ($1,000,000.00). Upon demand by Landlord,
Tenant shall deliver to Landlord a certificate of such insurance
coverage. Tenant further agrees to take out and keep in force
during the term of this Lease at its own expense, proper and
adequate workers compensation insurance.
11. ASSIGNMENT AND SUBLETTING: Tenant shall not assign
this Lease, or any rights under it, and shall not sublet the entire
or any part of the Premises, or any right or privilege appurtenant
to the Premises, or permit any other person (the agents and
employees of the Tenant excepted) to occupy or use the Premises
without first obtaining the Landlord s consent. A consent to one
assignment, subletting, occupation, or use by another person is not
a consent to a future assignment, subletting or occupation, or use
by the same or another person.
12. RIGHTS OF OTHERS: This Lease is subject to all
existing easements, servitudes, licenses, and rights of way for
roads, highways, telephone, electric power lines, railroads,
pipelines, and other purposes, whether recorded or not.
13. COMPLIANCE WITH LAW AND REGULATIONS: Tenant shall
comply with all requirements of governmental authorities, enforced
either now or in the future, affecting the Tenant s use of the
Premises. It is understood by both Tenant and Landlord that
regulations pertaining to air pollution and the emission of
particulate matter affect the Premises. Should Tenant be served
with notice from appropriate authorities to desist from handling,
storage or drying operations due to unlawful pollution or emissions
from the Premises. Tenant will make reasonable efforts to correct
conditions leading to such notice and to comply with the
requirements of the authorities; however, Tenant shall not be
obligated beyond reasonable monetary and physical efforts. If
after the expenditure of such reasonable efforts by the Tenant the
notice to desist remains in effect, Tenant may choose to
discontinue operations and shall pay Landlord the pro-rata share of
rental for the period up to the time of the discontinuance.
14. ATTORNEYS FEES: In any action or proceeding by
either party to enforce this Lease or any part hereof, the
prevailing party shall be entitled to all costs incurred band
reasonable attorneys fees.
15. NOTICE: Any notice to be given to either party by the
other shall be in writing and shall be served either personally or
by registered or certified mail addressed as follows:
If to Landlord: Pheasant Investment Corporation
P.O. Box 2143
Woodland, CA 95776
If to Tenant: SHF Acquisition Corporation
4045 S. Spencer Street
Las Vegas, NV 89119
WAIVER OF CONFLICT OF INTEREST
1. CONFLICT OF INTEREST: Kent N. Calfee ("Calfee") and
his wife Susan Calfee own all of the stock of Pheasant Investment
Corporation ("Landlord") and Calfee is the sole officer and
director of Landlord. Calfee is also an attorney and owns an
interest in Calfee & Young, A Professional Corporation ("C&Y").
Calfee and C&Y have in the past and continue to represent SHF
Acquisition Corporation ("Tenant") and numerous affiliated people
and entities on various legal matters. The proposed Commercial
Premises Lease for the facility located at 805 South River Road,
West Sacramento, California ("Lease") creates a conflict of
interest between Calfee and C&Y and Tenant. Calfee is entering
into this Lease in a position adverse to Tenant and neither Calfee
nor C&Y is acting as attorney for Tenant in connection with this
Lease.
Tenant hereby waives the conflict of interest described
herein and expressly acknowledges the following:
a. Calfee and C&Y are acting adverse to Tenant and
not as attorneys for Tenant in connection with the Lease;
b. Calfee has advised Tenant to obtain independent
legal counsel in connection with the Lease and has afforded Tenant
reasonable and adequate opportunity to obtain independent counsel;
and
c. Tenant has elected not to obtain independent
counsel.
BY EXECUTING THIS WAIVER OF CONFLICT OF INTEREST BELOW
THE PERSONS EXECUTING THIS LEASE ACKNOWLEDGE AND REPRESENT THAT
THEY HAVE READ AND UNDERSTOOD THE FOREGOING AND AGREE THERETO.
Landlord: PHEASANT INVESTMENT CORPORATION
By:/s/ Kent N. Calfee
Kent N. Calfee, President
Tenant: SHF ACQUISITION CORPORATION
By:/s/ James H. Dale
Its: President
REIMBURSEMENT AGREEMENT
This Agreement is made by and between Rancho Murieta
Community Services District ("District") and SHF Acquisition
Corporation ("SHF") with respect to the following:
RECITALS
WHEREAS, SHF has developed over 100 improved lots
collectively known as Unit 6 in the Rancho Murieta Subdivision
which are within the District (the "Property").
WHEREAS, in its development of Unit 6, SHF was required to
construct several water, sewer and drainage facilities (the
"Phase I Facilities") that are oversized to serve lands outside
the boundaries of Unit 6.
WHEREAS, construction of the Phase I Facilities has been
completed.
WHEREAS, the lands contained within Unit 6 will benefit from
future sewer facilities (the "Phase II Facilities") that will be
constructed to replace the temporary sewer facilities which were
constructed for the Unit 6 project.
WHEREAS, the Phase II Facilities will also benefit property
not a part of Unit 6 (the "Benefited Properties").
WHEREAS, SHF and District desire to make provision for
reimbursement of the costs incurred and the funds advanced by SHF
out of the proceeds of any subsequent community facilities
district or by direct payment by subsequent developers of the
Benefited Properties.
NOW, THEREFORE, District and SHF agree as follows:
AGREEMENT
1. REIMBURSEMENT FOR NET EXTERNAL BENEFIT.
A. District and SHF acknowledge that SHF was required
to construct the Phase I Facilities, which are described on
Exhibit A, attached hereto and incorporated herein, as a
condition of development of Unit 6. District and SHF further
acknowledge that the Phase I Facilities are oversized facilities
which will benefit lands both inside and outside the boundaries
of Unit 6. District and SHF agree that the total cost of the
Phase I Facilities was $1,597,425.75, and that of this amount,
$276,088.44 is allocable to Unit 6 and $1,321,337.31 is allocable
to the Benefited Properties. The allocation of such costs is
shown on Exhibit A.
B. District and SHF acknowledge that the future
construction of the Phase II Facilities, which are described on
Exhibit B, attached hereto and incorporated herein, will benefit
lands both inside and outside the boundaries of Unit 6. District
and SHF agree that the estimated cost of the Phase II Facilities
(including the bond financing costs therefor) will be
approximately $3,597,750.00, and that of this amount, $130,725.00
is allocable to Unit 6 and $3,467,025.00 is allocable to the
Benefited Properties. The allocation of such costs is shown on
Exhibit B.
C. District and SHF agree that the reciprocal claims
arising from construction of the Phase I Facilities and the Phase
II Facilities result in a net amount due to SHF of approximately
$1,190,612.31 (the "Net External Benefit") from the Benefited
Properties. This amount is determined as follows:
ITEM AMOUNTS
I.
Cost of the Phase I Facilities $ 1,597,425.75
Unit 6 share of the cost of the
Phase I Facilities < 276,088.44 >
Benefited Properties share of the
cost of the Phase I Facilities $ 1,321,337.31
II.
Estimated cost of the Phase II Facilities
less Financing (bond issuance) expense $ 2,665,000.00
Unit 6 share of the cost of the
Phase II Facilities < 130,725.00 >
Benefited Properties share of the cost
of the Phase II Facilities (exclusive
of bond issuance costs) $ 2,534,275.00
Benefited Properties share of the cost
of the bond issuance costs for the
Phase II Facilities $ 886,996.25
Total Benefited Properties share of
the cost of the Phase II Facilities $ 3,421,271.25
III.
Benefited Properties share of the cost
of the Phase I Facilities $ 1,321,337.31
Unit 6 share of the cost of the
Phase II Facilities < 130,725.00 >
Net Amount due SHF from Benefited
Properties $ 1,190,612.31
D. To assure a fair and equitable sharing of the
costs of the Phase I Facilities and Phase II Facilities by the
owners benefiting therefrom, District shall not enter into any
agreement to extend or provide facilities, nor shall it issue
"will serve" letters with respect to a Benefited Property, unless
and until the owner of such Benefited Property has reimbursed, or
has entered into an agreement with District to reimburse, SHF for
its pro rata share of the Net External Benefit (to the extent
that SHF has not previously been reimbursed or credited for the
costs of such Net External Benefit). The Net External Benefit
shall be spread among the Benefited Properties as shown in
Exhibits A and B and in accordance with the following percentage
allocations or such other allocations as District may adopt
through the formation of a Benefit District or a district created
in whole or in part for the purpose of financing reimbursement of
the Net External Benefit:
Pro Rata
Share of Net Net
Description of External External
Benefiting Property Benefit Benefit
I. PHASE I FACILITIES:
Calero 2.97% $ 39,183.00
RM North - East 41.96% 554,497.29
RM North - West 48.78% 644,482.87
RM North - School 2.49% 32,868.38
Hotel Site 3.81% 50,305.78
TOTAL Phase I Facilities: 100.00% $1,321,337.31
II. PHASE II FACILITIES:
Calero 9.80% $ 335,199.60
RM North - East 65.53% 2,241,815.13
RM North - West 22.81% 780,516.54
RM North- School 1.86% 63,739.98
TOTAL PHASE II FACILITIES: 100.00% $3,421,271.25
The pro rata shares of the Net External Benefit set forth
above have been calculated in accordance with the allocation of
benefit for the Phase I Facilities and Phase II Facilities
described in Exhibits A and B, respectively, and further, in
accordance with the distribution of dwelling units pursuant to
the allocations approved for Improvement District No. 1
E. If any Improvement District, Assessment District,
Community Facilities District or other public financing mechanism
is created by the District which includes any or all of the
Benefited Properties, the amount to be financed by such entity
shall include, and the proceeds of any bonds issued by such
entity shall first be used to reimburse SHF for that portion of
the External Benefit attributable to the benefits received by the
Benefited Properties included therein.
F. District agrees to use its best efforts to carry
out the provisions of this Section 1, but makes no warranty that
it will be successful in securing reimbursement of the External
Benefit as contemplated herein.
G. Any and all financing costs or other expenses
arising out of the issuance of bonds as provided in Section 1.E,
above, shall be borne by the owners of the Benefited Properties.
2. REIMBURSEMENT PERSONAL. The rights to
reimbursement under this Agreement are personal to SHF and shall
not run with the Unit 6 Property unless expressly assigned by
SHF.
3. ASSIGNMENT. SHF may assign its rights and
obligations under this Agreement, with the prior written consent
of District, which consent shall not be unreasonably withheld.
4. REIMBURSEMENT - TWENTY YEAR TERM. SHF s rights to
reimbursement under this Agreement shall expire twenty (20) years
following the effective date of this Agreement.
5. SEVERABILITY. In the event that any provision of
this Agreement is held to be invalid, void or otherwise
unenforceable by any court of competent jurisdiction, such
provision(s) shall be deemed severable from the remainder of this
Agreement and shall in no way affect, impair or invalidate any
other provisions contained herein. Should any provision of this
Agreement be held unenforceable, SHF and District shall take such
steps as equity and good faith require to provide for completion
of the Phase II Facilities and reimbursement of the External
Benefit costs incurred by SHF.
6. INDEMNIFICATION. SHF agrees to defend, indemnify
and save and hold harmless District, its officers, agents and
employees from any and all claims, damages, liability or actions
arising out of or connected with this Agreement, expressly
including any action challenging the validity of this Agreement.
Such agreement to defend, indemnify and save and hold harmless
District shall expressly exclude any and all claims made or
actions brought by SHF or SHF s heirs or assigns against District
to enforce the provisions of this Agreement.
7. OBLIGATIONS ARISING FROM AGREEMENT. Neither
District funds nor District monies, except future CFD funds and
accounts and funds acquired for reimbursement, shall be liable
for payment of any obligations arising from this Agreement.
Neither the full faith and credit nor the taxing power of the
District is pledged for the payment of any obligations arising
from this Agreement. SHF may not compel the exercise of
Districts taxing power or the forfeiture of any of its property
to satisfy any obligations arising from this Agreement. The
obligations arising from this Agreement are not a debt of the
District, nor a legal or equitable pledge, charge, lien or
encumbrance upon any of its property, or upon any of its income,
receipts or revenues, except the revenues to a CFD arising from
the Bonds.
8. LEGAL FEES. In the event that legal action is
necessary to enforce the provisions of this Agreement, the
prevailing party(ies) shall be entitled to reasonable attorneys
fees and costs.
9. AMENDMENT. Amendment or modifications to this
Agreement shall be in writing and executed by all parties.
10. ENTIRE AGREEMENT. This Agreement and any
attachments hereto constitute the entire agreement and
understanding between District and SHF concerning the subject
matter contained herein.
11. NOTICES. All notices requested by this Agreement
shall be in writing and delivered in person or sent by certified
mail, postage prepaid. Written notices or communications
required by or concerning this Agreement shall be addressed as
follows:
District:
Rancho Murieta Community Services District
15160 Jackson Road
Rancho Murieta, CA 95683
SHF:
SHF Acquisition Corporation
Attn: Jim Dale
4045 S. Spencer Street, Suite 206
Las Vegas, NV 89119
SHF Attorney:
Calfee & Young, P.C.
Attn: Christopher J. Konwinski
611 North Street
Woodland, CA 9569
Any party may change the address stated herein by giving
notice in writing to the other parties, and thereafter notices
and correspondence shall be addressed and transmitted to the new
address.
12. COUNTERPART EXECUTION. This Agreement may be
executed in counterpart.
13. INTERPRETATION. Notwithstanding the fact that one
or more provisions of this agreement may have been drafted by one
of the parties to this Agreement, such provisions shall be
interpreted as though they were the product of a joint drafting
effort and no provision shall be interpreted against a party on
the ground that said party was wholly or primarily for drafting
the language to be interpreted.
14. EXHIBITS. Attached hereto and incorporated herein
by this reference are the following Exhibits:
A. Allocation of Phase I Facilities to Unit 6
and the Benefited Properties.
B. Allocation of Phase II Facilities to Unit 6
and the Benefited Properties.
IN WITNESS WHEREOF the parties execute this Agreement on the
date(s) set forth below.
District:
RANCHO MURIETA COMMUNITY SERVICES
DISTRICT
Dated: 9/20/95 By: /s/ John R. Thurston
President
Board of Directors
Attest:
/s/ Sandra A. Hickman
Secretary
SHF:
SHF ACQUISITION CORPORATION
Dated: Aug 18, 1995 By: /s/ James H. Dale
Its: President
EXHIBIT "A" Gibberson & Associates, INC.
UNIT 6 BENEFIT/COST ANALYSIS 11344 Coloma Road, Suite 380
version 19.9 PAGE 1 of 2 Sacramento, CA 95670
February 22, 1995 (916)638-4060
FILENAME: MELLO199.wb1
JOB S: 840018k
PHASE STRA #11A
STRA #9 STRA #10 RM NORTH-
DESCRIPTION ACTUAL CALERO UNIT 6 EAST
RES.DU OR COMM/IND.EDU COST 189 122 897
PHASE I.
A. WATER TRANSMISSION
PIPELINE(UNIT No. 6) 368,034.46 32,383.69 237,538.61
B. PUMP STATION "B" 7.40% 10.50% 59.86%
(UNIT No. 6) 231,662.09 17,142.99 24,324.52 138,672.93
C. SEWER FORCE MAIN 7.40% 10.50% 59.86%
(UNIT No. 6) 297,837.87 22,040.00 31,272.98 178,285.75
D. DETENTION BASIN 25.21%
(UNIT No. 6) 446,195.82 112.485.97
E. THROUGH DRAINAGE
FACILITIES - SHED "A" 39.90%
(UNIT No. 6) 119,476.22 47,671.01
F. THROUGH DRAINAGE
FACILITIES - SHED "B" 19.25%
(UNIT No. 6) 111,643.84 21,491.44
G. 10" SEWER MAIN
& MANHOLES 28.61%
(UNIT No. 6) 22,575.45 6,458.84
PHASE I TOTAL COSTS 1,597,425.75 39,183.00 276,088.44 554,497.29
RECAP OF RELATIVE
SHARES:
Unit No. 6 276,088.44
Other Properties 1,321,337.31
TOTAL 1,597,425.75
PHASE STRA #11B STRA #11C STRA #14
RM NORTH- RMN HOTEL TOTAL
DESCRIPTION WEST SCHOOL SITE EDU'S TOTAL
RES.DU OR COMM/IND.EDU 164 17 190 1579 COST
PHASE I.
A. WATER TRANSMISSION
PIPELINE(UNIT No. 6) 43,297.39 4,508.99 50,385.78 1,390 368,034.46
B. PUMP STATION "B" 20.84% 1.40%
(UNIT No. 6) 48,278.38 3,243.27 1,389 231,662.09
C. SEWER FORCE MAIN 20.84% 1.40%
(UNIT No. 6) 62,069.41 4,169.73 1,389 297,837.87
D. DETENTION BASIN 71.89% 2.90%
(UNIT No. 6) 320,770.17 12,939.68 303 446,195.82
E. THROUGH DRAINAGE
FACILITIES - SHED "A" 53.92% 6.18%
(UNIT No. 6) 64,421.58 7,383.63 303 119,476.22
F. THROUGH DRAINAGE
FACILITIES - SHED "B" 80.75%
(UNIT No. 6) 90,152.40 286 111,643.84
G. 10" SEWER MAIN
& MANHOLES 68.63% 2.76%
(UNIT No. 6) 15,493.53 623.08 303 22,575.45
PHASE I TOTAL COSTS 644,482.87 32,868.38 50,385.78 1,597,425.75
RECAP OF RELATIVE
SHARES:
Unit No. 6
Other Properties
TOTAL
Version 19.9 February 22, 1995 EXHIBIT "A"
UNIT 6 BENEFIT/COST ANALYSIS
PAGE 2 of 2
Giberson & Associates, Inc.
11344 Coloma Road, Suite 380
Sacramento, CA 95670 (916) 638-4060
FILENAME: MELLO199.wb1 JOB S: 840018k
______________________________________________________________________________
NOTES:
1. Estimated costs are in constant April 1994 dollars (ENR index = 6521)
derived by taking the estimated cost from the CFD No. 1 Engineer's
report and escalating that amount to April 1994 (ENR index of April
1994 divided by ENR index of CFD No. 1 report multiplied by CFD No.
1 cost).
2. Estimated costs are by their nature approximations of the probable
magnitude of project costs (incl. construction, contingencies,
engineering, supervision and inspection).
3. Equivalent dwelling unit counts for the parcels were provided by the
developer of each parcel. These densities were verified by Rancho
Murieta CSD yield estimates using assumed densities for residential
land uses multiplied by parcel acreages and EDU ratios multiplied by
assumed yield ratios for non-residential land uses. This analysis
utilizes the dwelling unit counts from Improvement District No. 1 for
residential properties and the equivalent number of dwelling units,
derived from total original assessments, for non-residential
properties.
5. This analysis subdivides STRA No. 11 into three sub-areas to more e
quitably spread the costs of Phase I Facility Nos. D, E, F & G.
EXHIBIT "B"
Version 19.10 UNIT 6 BENEFIT/COST ANALYSIS
May 22, 1995 PAGE 1 of 2
PHASE
DESCRIPTION ESTIMATED STRA #9 STRA #10 STRA #11A
RES.DU OR COMM/IND.EDU COST CALERO UNIT 6 RM NORTH-
189 122 EAST
PHASE II. 897
H. SEWER PUMP STATION
NO. 5 (SOUTH OF UNIT 7.40% 10.50% 50.86%
NO. 6) 1,245,000.00 92,130.00 130,725.00 745,257.00
I. SEWER PUMP STATION
& FORCE MAIN No. 4
(EAST OF GRANLEES 10.46% 0.00% 64.94%
ESTATE) 726,000.00 75,939.60 - 471,464.40
J. SEWER PUMP STATION
& FORCE MAIN No. 3 11.56% 0.00% 63.96%
(SOUTH OF BASS LAKE) 694,000.00 80,226.40 - 443,882.40
SUBTOTAL PHASE II 2,665,000.00 248,296.00 130,725.00 1,660,603.80
Less Unit #6 share (130,725.00)
SUBTOTAL PHASE II 2,534,275.00
PHASE II BOND 886,996.25 86,903.60 - 581,211.33
FINANCING COSTS
(ESTIMATED AT 35%)
PHASE II TOTAL COSTS 3,551,996.25 335,199.60 130,725.00 2,241,815.13
RECAP OF RELATIVE
SHARES:
Unit No. 6 130,725.00
Other Properties 3,421,271.25
TOTAL 3,551,996.25
PHASE
STRA #11B STRA #11C STRA #1
RM NORTH- RMN HOTEL TOTAL
DESCRIPTION WEST SCHOOL SITE EDU'S TOTAL
RES.DU OR COMM/IND.EDU 164 17 190 1,579 COST
PHASE II.
H. SEWER PUMP STATION
NO. 5 (SOUTH OF UNIT 20.84% 1.40%
NO. 6) 259,458.00 17,430.00 1,389 1,245,000.00
I. SEWER PUMP STATION
& FORCE MAIN No. 4
(EAST OF GRANLEES 22.61% 1.99%
ESTATE) 164,148.60 14,447.40 1,389 726,000.00
J. SEWER PUMP STATION
& FORCE MAIN No. 3 22.27% 2.21%
(SOUTH OF BASS LAKE) 154,553.80 15,337.40 1,389 694,000.00
SUBTOTAL PHASE II 578,160.40 47,214.80 - 2,665,000.00
Less Unit #6 share
SUBTOTAL PHASE II
PHASE II BOND 202,356.14 16,525.18 886,996.25
FINANCING COSTS
(ESTIMATED AT 35%)
PHASE II TOTAL COSTS 780,516.54 63,739.98 - 3,551,996.25
RECAP OF RELATIVE
SHARES:
Unit No. 6
Other Properties
TOTAL
Version 19.10 May 22, 1995
EXHIBIT "B"
UNIT 6 BENEFIT/COST ANALYSIS
PAGE 2 of 2
_____________________________________________________________________
NOTES:
1. Estimated costs are in constant April 1994 dollars (ENR
index = 6521) derived by taking the estimated cost from
the CFD No. 1 Engineer s report and escalating that
amount to April 1994 (ENR index of April 1994 divided
by ENR index of CFD No. 1 report multiplied by CFD No.
1 costs).
2. Estimated costs are by their nature approximations of
the probable magnitude of project costs (including
construction, contingencies, engineering, supervision
and inspection).
3. Equivalent dwelling unit counts for the parcel were
provided by the developer of each parcel. These
densities were verified by Rancho Murieta CSD yield
estimates using assumed densities for residential land
uses multiplied by parcel acreage and EDU ratios for
non-residential land uses.
4. This analysis includes an estimate of the bond
financing and formation costs.
5. This analysis utilizes the dwelling unit counts from
Improvement District No. 1 for residential properties
and the equivalent number or dwelling units, derived
from the total original assessments, for non-residential properties.
6. This analysis subdivides STRA No. 11 into three sub-areas
to more equitably spread the costs of Phase I
Facility Nos. D, E, F & G.
7. This analysis reflects the decision of the District
Improvement Committee to waive any Unit No. 6 cost
sharing responsibility for Phase II improvements
(Improvements Nos. I & J.)
Pay to the order of The Resolution Trust Corporation, as
Receiver for San Antonio Savings Association, F.A.
This endorsement is attached to and made a part of that
certain Promissory Note in the original principal amount of
$57,000.00 dated February 13, 1995, made by James P. Parks and Dale
A. Parks, husband and wife, in favor of SHF Acquisition
Corporation, a Nevada corporation.
Dated: Nov 6, 1995
SHF ACQUISITION CORPORATION,
a Nevada corporation
By: /s/ James H. Dale
Title: President
When paid, this note, if
DO NOT DESTROY THIS NOTE: secured by Deed of Trust, must
be surrendered to Trustee for
cancellation, before
reconveyance will be made
PROMISSORY NOTE
(Interest Included Until Paid)
$57,000.00 Orangevale, California February 13, 1995
For value received, James P. Parks and Dale A. Parks, husband
and wife promise to pay to SHF ACQUISITION CORPORATION, a Nevada
corporation, or order at 4045 Spencer Street, Las Vegas, NV 89119,
the principal sum of Fifty Seven Thousand and No/100th Dollars with
interest from date of recording on unpaid principal at the rate of
nine percent (9%) per annum; principal and interest payable as
follows: 36 equal consecutive, monthly installments of interest
only at $427.50 or more, with the first such installment due on or
before March 22, 1995 and continuing on the same day of each month
until complete and one FINAL BALLOON payment of principal and
interest due on or before February 22, 1998 in the amount of Fifty-Seven
Thousand Four Hundred Twenty-Seven and 50/100.
The holder of this note shall, not less than 60 days nor more
than 150 days before the balloon payment is due, deliver or mail by
first-class mail to the trustor, or his or her successor in
interest, at the last known address of such person a written notice
to include:
(1) A statement of the name and address of the person to whom
the balloon payment is required to be paid.
(2) The date on or before which the balloon payment was or is
required to be paid.
(3) The amount of the balloon payment, or if its exact amount
is unknown a good faith estimate of the amount thereof, including
unpaid principal, interest, and any other charges (assuming payment
in full of all scheduled installments coming due between the date
of the notice and the date when the balloon payment is due).
(4) A description of the trustor s right, if any, to refinance
the balloon payment, including a summary of the actual terms of the
refinancing or an estimate or approximation thereof, to the extent
known.
This note is subject to SECTION 2966 of the Civil Code, which
provides that the holder of this note shall give written notice to
the trustor, or his successor in interest, of prescribed
information at least 60 and not more than 150 days before any
balloon payment is due.
*If the trustor shall sell, convey or alienate said property,
or any part thereof, or any interest therein or shall be divested
of his title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option to declare any indebtedness or obligations
secured hereby, immediately due and payable irrespective of the
maturity date specified in any note evidencing the same.
Each payment shall be credited first on interest then due and
the remainder on principal.
Should default be made in payment of any installment when due,
the whole sum of principal and interest shall become immediately
due at the option of the holder of this note, without notice;
principal and interest payable in lawful money of the United
States. If action be instituted on this note, maker shall pay such
sum as the Court may fix as attorney s fees. This note is secured
by a DEED OF TRUST OF EVEN DATE. LATE CHARGE: SUBJECT TO ANY
NOTICE REQUIRED BY LAW. MAKER AGREES TO PAY A LATE CHARGE OF 6% OF
THE OVERDUE INSTALLMENT OR $5.00 WHICHEVER IS GREATER, IF PAYMENT
IS NOT MADE WITHIN 10 DAYS OF ITS DUE DATE.
1. Cash Price . . . . . . . . . . . . $ $71,250.00
2. Less: Cash Down Payment . . . . . $
3. Other. . . . . . . . . . . . . . .
4. Total Down Payment . . . . . . . . $ $14,250.00
5. Unpaid Balance of Cash Price . . . $57,000.00
6. Other Charges. . . . . . . . . . . $
7. Amount Financed (5 + 6). . . . . . $57,000.00
8. FINANCE CHARGE . . . . . . . . . . $15,390.00
9. Total of Payments. . . . . . . . . $72,390.00
10. Deferred Payment Price (1 + 8) . . $86,640.00
11. ANNUAL PERCENTAGE RATE . . . . . . $ 9.00%
NOTICE TO BUYER
YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR AGREEMENT OF SALE BY
NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE SEVENTH DAY FOLLOWING
THE SIGNING OF THE CONTRACT OR AGREEMENT.
CAUTION TO BUYER
IF YOU DO NOT HAVE THE FUNDS TO PAY THE BALLOON PAYMENT WHEN DUE,
IT MAY BE NECESSARY FOR YOU TO OBTAIN A NEW LOAN AGAINST YOUR
PROPERTY FOR THIS PURPOSE. NEITHER THE SELLER NOR THE LENDER IS
UNDER ANY OBLIGATION TO REFINANCE THE PROPERTY.
I acknowledge receipt of a
copy of this note and of the
Deed of Trust securing
payment of this note. Dated Executed February 21, 1995
/s/ JAMES P. PARKS
JAMES P. PARKS
/s/ DALE A. PARKS
DALE A. PARKS
MAKER
Order No.
Escrow No. 719819-KJ
Loan No.
WHEN RECORDED MAIL TO:
SHF Acquisition Corporation
4045 South Spencer Street #206
Las Vegas, NV 89119
DEED OF TRUST WITH ASSIGNMENT OF RENTS
(This Deed of Trust contains an acceleration clause)
This DEED OF TRUST, made the 13th day of February, 1995, between
James P. Parks and Dale A. Parks, husband and wife, as joint
tenants, herein called TRUSTOR, whose address is 108 Hard Rock
Court, Folsom, CA 95630, FOUNDERS TITLE COMPANY of Sacramento
County, a California corporation, herein called TRUSTEE, and SHF
ACQUISITION CORPORATION, a Nevada Corporation, herein called
BENEFICIARY.
WITNESSETH: That Trustor grants to Trustee in Trust, with Power
of sale, that property in the unincorporated area.
County of Sacramento, State of California, described as:
Lot No. 3119, as shown upon that certain "Plat of Rancho Murieta
Unit No. 6, filed in the office of the County Recorder of
Sacramento County, State of California, on January 9, 1991, in Book
213 of Maps, Map No. 6.
NOTICE TO BUYER: YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR
AGREEMENT OF SALE BY NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE
SEVENTH DAY FOLLOWING THE SIGNING OF THE CONTRACT OR AGREEMENT.
If the trustor shall sell, convey or alienate said property, or any
part thereof, or any interest therein or shall be divested of his
title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option, except as prohibited by law, to declare any
indebtedness or obligations secured hereby, immediately due and
payable irrespective of the maturity date specified in any note
evidencing the same.
TOGETHER WITH rents, issues and profits thereof, SUBJECT, HOWEVER,
to the right, power and authority given to and conferred upon
Beneficiary by paragraph (10) of the provisions incorporated herein
by reference to collect and apply such rents, issues and profits.
For the Purpose of Securing: 1. Performance of each agreement of
Trustor incorporated by reference or contained herein. 2. Payment
of the indebtedness evidenced by one promissory note of even date
herewith, and any extension or renewal thereof, in the principal
sum of $57,000.00 executed by Trustor in favor of Beneficiary or
order. 3. Payment of such further sums as the then record owner
of said property hereafter may borrow from Beneficiary, when
evidenced by another note (or notes) reciting it is so secured.
To Protect the Security of this Deed of Trust. Trustor Agrees: By
the execution and delivery of this Deed of Trust and the note
secured hereby, that provisions (1) to (14), inclusive, of the
fictitious deed of trust recorded in Santa Barbara County and
Sonoma County October 18, 1961, and in other counties October 23,
1961, in the book and at the page of Official Records in the office
of the county recorder of the county where said property located,
noted below opposite the name of such county, viz:
<TABLE>
<CAPTION>
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
<S> <C> <C> <S> <C> <C> <S> <C> <C> <S> <C> <C>
Alameda 435 684 Kings 792 833 Placer 895 301 Sierra 29 335
Alpine 1 250 Lake 362 39 Plumas 151 5 Siskiyou 468 181
Amador 104 348 Lansen 171 471 Riverside 3005 523 Solano 1105 182
Butte 1145 1 Los Angeles 12055 899 Sacramento 4331 62 Sonoma 1851 689
Calaveras 145 152 Madera 810 170 San Benito 271 383 Stanislaus 1715 456
Colusa 296 617 Marin 1508 339 San Bernardino 5567 61 Sutter 572 297
Contra Costa 3978 47 Mariposa 77 292 San Francisco A332 905 Tehama 401 289
Del Norte 78 414 Mendocino 579 530 San Joaquin 2470 311 Trinity 93 366
El Dorado 568 456 Merced 1547 538 San Luis Obispo 1151 12 Tulare 2294 275
Fresno 4626 572 Modoc 184 851 San Mateo 4078 420 Tuelumne 135 47
Glenn 422 184 Mono 52 429 Santa Barbara 1878 860 Ventura 2062 386
Humboldt 657 527 Monterey 2194 538 Santa Clara 5336 341 Yolo 653 245
Imperial 1091 501 Napa 639 86 Santa Cruz 1431 494 Yuba 334 486
Inyo 147 598 Nevada 305 320 Shasta 684 528
Kern 3427 60 Orange 5889 611 San Diego Series 2 Book 1961, Page 183887
</TABLE>
(which provisions, identical in all counties, are printed on the
reverse hereof) hereby are adopted and incorporated herein and made
a part hereof as fully as though set forth herein at length; that
he will observe and perform said provisions; and that the
references to property, obligations, and parties in said provisions
shall be construed to refer to the property, obligations, and
parties set forth in this Deed of Trust.
The undersigned Trustor requests that a copy of any Notice of
Default and of any Notice of Sale hereunder be mailed to him at his
address hereinbefore set forth.
STATE OF CALIFORNIA )
) SS. Signature of Trustor
COUNTY OF )
/s/ James D. Parks
On before me, the James D. Parks
undersigned, a Notary Public
in and for said State, /s/ Dale A. Parks
personally appeared Dale A. Parks
, proved upon
satisfactory evidence OR
personally known to me to be
the person(s) whose name(s)
subscribed to the within
instrument and acknowledged
that executed the same.
WITNESS my hand and official seal.
Signature
Name (Typed or Printed) (This area for official
notary seal)
The following is a copy of provisions (1) to (14), inclusive, of the
fictitious deed of trust, recorded in each county in California, as
stated in the foregoing Deed of Trust and incorporated by reference in
said Deed of Trust as being a part thereof as if set forth at length
therein.
To Protect the Security of This Deed of Trust, Trustor Agrees:
(1) To keep said property in good condition and repair, not to remove
or demolish any building thereon, to complete or restore promptly and in
good and workmanlike manner any building which may be constructed,
damages or destroyed thereon and to pay when due all claims for labor
performed and materials furnished therefor, to comply with all laws
affecting said property or requiring any alterations or improvements to
be made thereon, not to commit or permit waste thereon, not to commit,
suffer or permit any act upon said property in violation of law, to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts
which from the character of use of said property may be reasonably
necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance
satisfactory to and with loss payable to Beneficiary. The amount
collected under any fire or other insurance policy may be applied by
Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary the entire amount
so collected or any part thereof may be released to Trustor. Such
application or release shall not cure or waive any default hereunder or
invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary as
Trustee, and to pay all costs and expenses, including cost of evidence of
title and attorney s fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear, and in any suit
brought by Beneficiary to foreclose this Deed.
(4) To pay at least ten days before delinquency all taxes and
assessments affecting said property, including assessments on appurtenant
water stock, when due, all encumbrances, charges and liens, with
interest, on said property or any part thereof, which appear to be prior
or superior hereto, all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein
provided, then Beneficiary or Trustee, but without obligation so to do
and without notice to or demand upon Trustor and without releasing
Trustor from any obligation hereof, may make or do the same in such
manner and to such extent as either may deem necessary to protect the
security hereof. Beneficiary or Trustee being authorized to enter upon
said property for such purposes, appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee, pay, purchase, contest or compromise
any encumbrance, charge or lien which in the judgment of either appears
to be prior or superior hereto, and, in exercising any such powers, pay
necessary expenses, employ counsel and pay his reasonable fees.
(5) To pay immediately and without demand all sums to so expended by
Beneficiary or Trustee, with interest from date of expenditure at the
amount allowed by law in effect at the date hereof, and to pay for any
statement provided for by law in effect at the date hereof regarding the
obligation secured hereby any amount demanded by the Beneficiary not to
exceed the maximum allowed by law at the time when said statement is
demanded.
(6) That any award of damages in connection with any condemnation for
public use of or injury to said property or any part thereof is hereby
assigned and shall e paid to Beneficiary who may apply or release such
moneys received by him in the same manner and with the same effect as
above provided for disposition of proceeds of fire or other insurance.
(7) That by accepting payment of any sum secured hereby after the due
date. Beneficiary does not waive his right either to require prompt
payment when due of all other sums so secured or to declare default for
failure to so pay.
(8) That at any time or from time to time, without liability therefor
and without notice, upon written request of Beneficiary and presentation
of this Deed and said note for endorsement, and without affecting the
personal liability of any person for payment of the indebtedness secured
hereby, Trustee may reconvey any part of said property, consent to the
making of any map or plat thereof, join in granting any easement thereon,
or join in any extension agreement or any agreement subordinating the
lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums
secured hereby have been paid, and upon surrender of this Deed and said
note to Trustee for cancellation and retention and upon payment of its
fees, Trustee shall reconvey, without warranty, the property then held
hereunder. The recitals in such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof. The grantee in
such reconveyance may be described as the person or persons legally
entitled thereto. Five years after issuance of such full reconveyance,
Trustee may destroy said note and this Deed of (unless directed in such
request to retain them).
(10) That as additional security, Trustor hereby gives to and confers
upon Beneficiary the right, power and authority, during the continuance
of these Trusts, to collect the rents, issues and profits of said
property, reserving unto Trustor the right, prior to any default by
Trustor in payment of any indebtedness secured hereby or in performance
of any agreement hereunder, to collect and retain such rents, issues and
profits as they become due and payable. Upon any such default,
Beneficiary may at any time without notice, either in person, by agent,
or by a receiver to be appointed by a court, and without regard to the
adequacy of any security for the indebtedness hereby secured, enter upon
and take possession of said property or any part thereof, in his own name
sue for or otherwise collect such rents, issues and profits, including
those past due and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorney s fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may
determine. The entering upon and taking possession of said property, the
collection of such rents, issues and profits and the application thereof
as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness
secured hereby or in performance of any agreement hereunder, Beneficiary
may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale
and of written notice of default and of election to cause to be sold said
property, which notice Trustee shall cause to be filed for record.
Beneficiary also shall deposit with Trustee this Deed, said note and all
documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following
the recordation of said notice of default, and notice of sale having been
given as then required by law, Trustee, without demand on Trustor, shall
sell said property at the time and place fixed by it in said notice of
sale, either as a whole or in separate parcels, and in such order as it
may determine, at public auction to the highest bidder for cash in lawful
money of the United States, payable at time of sale. Trustee may
postpone sale of all or any portion of said property by public
announcement of such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such
purchaser its deed conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of
any matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Trustor, Trustee, or Beneficiary as
hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this
Trust, including cost of evidence of title in connection with sale,
Trustee shall apply the proceeds of sale to payment of all sums expended
under the terms hereof, not then repaid, with accrued interest at the
amount allowed by law in effect at the date hereof, all other sums then
secured hereby, and the remainder, if any, to the person or persons
legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness
secured hereby, may from time to time, by instrument in writing,
substitute a successor or successors to any Trustee named herein or
acting hereunder, which instrument, executed by the Beneficiary and duly
acknowledged and recorded in the office of the recorder of the county or
counties where sold property is situated, shall be conclusive proof of
proper substitution of such successor Trustee or Trustees, who shall,
without conveyance from the Trustee predecessor, succeed to all its
title, estate, rights, powers and duties. Said instrument must contain
the name of the original Trustor, Trustee and Beneficiary hereunder, the
book and page where this Deed is recorded and the name and address of the
new Trustee.
(13) That this Deed applies to, inures to the benefit of, and binds
all parties hereto, their heirs, legatees, devisees, administrators,
executors, successors and assigns. The term Beneficiary shall mean the
owner and holder, including pledgees, of the note secured hereby, whether
or not named as Beneficiary herein. In this Deed, whenever the context
to requires, the masculine gender includes the feminine and or neuter,
and the singular number includes the plural.
(14) That Trustee accepts this Trust when this Deed, duly executed
and acknowledged, is made a public record as provided by law Trustee is
not obligated to notify any party hereto of pending sale under any other
Deed of Trust or of any action or proceeding in which Trustor,
Beneficiary or Trustee shall be a party unless brought by Trustee.
REQUEST FOR FULL CONVEYANCE
To be used only when note has been paid
To FOUNDERS TITLE COMPANY, Trustee: Dated __________________
The undersigned is the legal owner and holder of all
indebtedness secured by the within Deed of Trust. All sums secured
by said Deed of Trust have been fully paid and satisfied; and you
are hereby requested and directed, on payment to you of any sums
owing to you under the terms of said Deed of Trust, to cancel all
evidences of indebtedness, secured by said Deed of Trust, delivered
to you herewith together with said Deed of Trust, and to reconvey,
without warranty, to the parties designated by the terms of said
Deed of Trust, the estate now held by you under the same.
Mail Reconveyance to:
By
By
Do not lose or destroy this Deed of Trust OR THE NOTE which it
secures. Both must be delivered to the Trustee for cancellation
before reconveyance will be made.
STATE OF CALIFORNIA
}ss.
COUNTY OF SACRAMENTO
On February 21, 1995 before me, the undersigned, a Notary
Public in and for said State, personally appeared James D. Parks
and Dale A. Parks, personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
Witness my hand and official seal.
(This area for official
Signature /s/ L.E. James notary seal)
Name L.E. James
(typed or printed)
1
Pay to the order of The Resolution Trust Corporation, as
Receiver for San Antonio Savings Association, F.A.
This endorsement is attached to and made a part of that
certain Promissory Note in the original principal amount of
$70,000.00 dated March 2, 1992, made by Chandler T. Martin and
Debra L. Martin, husband and wife, in favor of SHF Acquisition
Corporation, a Nevada corporation.
Dated: Nov 6, 1995
SHF ACQUISITION CORPORATION,
a Nevada corporation
By: /s/ James H. Dale
Title: President
When paid, this note, if
DO NOT DESTROY THIS NOTE: secured by Deed of Trust, must
be surrendered to Trustee for
cancellation, before
reconveyance will be made
PROMISSORY NOTE
(Interest Included Until Paid)
$70,000.00 Folsom, California March 2, 1992
For value received, CHANDLER T. MARTIN and DEBRA L. MARTIN,
husband and wife, as joint tenants promise to pay to SHF
ACQUISITION CORPORATION, a Nevada corporation, or order at 14813
Jackson Road, Rancho Murieta, California 95683, the principal sum
of Seventy Thousand and No/100th Dollars with interest from date of
recording on unpaid principal at the rate of eight percent (8%) per
annum; principal and interest payable as follows: 24 equal
consecutive, monthly installments of interest only at $466.67 or
more, with the first such installment due on or before April 10,
1993 and continuing on the same day of each month until complete
and one FINAL BALLOON payment of principal and interest due on or
before March 10, 1995 in the amount of Seventy Thousand and
No/100th Dollars.
The holder of this note shall, not less than 60 days nor more
than 150 days before the balloon payment is due, deliver or mail by
first-class mail to the trustor, or his or her successor in
interest, at the last known address of such person a written notice
to include:
(1) A statement of the name and address of the person to whom
the balloon payment is required to be paid.
(2) The date on or before which the balloon payment was or is
required to be paid.
(3) The amount of the balloon payment, or if its exact amount
is unknown a good faith estimate of the amount thereof, including
unpaid principal, interest, and any other charges (assuming payment
in full of all scheduled installments coming due between the date
of the notice and the date when the balloon payment is due).
(4) A description of the trustor s right, if any, to refinance
the balloon payment, including a summary of the actual terms of the
refinancing or an estimate or approximation thereof, to the extent
known.
This note is subject to SECTION 2966 of the Civil Code, which
provides that the holder of this note shall give written notice to
the trustor, or his successor in interest, of prescribed
information at least 60 and not more than 150 days before any
balloon payment is due.
*If the trustor shall sell, convey or alienate said property,
or any part thereof, or any interest therein or shall be divested
of his title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option to declare any indebtedness or obligations
secured hereby, immediately due and payable irrespective of the
maturity date specified in any note evidencing the same.
Each payment shall be credited first on interest then due and
the remainder on principal.
Should default be made in payment of any installment when due,
the whole sum of principal and interest shall become immediately
due at the option of the holder of this note, without notice;
principal and interest payable in lawful money of the United
States. If action be instituted on this note, maker shall pay such
sum as the Court may fix as attorney s fees. This note is secured
by a DEED OF TRUST OF EVEN DATE. LATE CHARGE: SUBJECT TO ANY
NOTICE REQUIRED BY LAW. MAKER AGREES TO PAY A LATE CHARGE OF 6% OF
THE OVERDUE INSTALLMENT OR $5.00 WHICHEVER IS GREATER, IF PAYMENT
IS NOT MADE WITHIN 10 DAYS OF ITS DUE DATE.
1. Cash Price . . . . . . . . . . . $ $100,000.00
2. Less: Cash Down Payment . . . . $
3. Other. . . . . . . . . . . . . . $
4. Total Down Payment . . . . . . . $ $ 30,000.00
5. Unpaid Balance of Cash Price . . $ 70,000.00
6. Other Charges. . . . . . . . . . $
7. Amount Financed (5 + 6). . . . . $ 70,000.00
8. FINANCE CHARGE . . . . . . . . . $
9. Total of Payments. . . . . . . . $
10. Deferred Payment Price (1 + 8) . $
11. ANNUAL PERCENTAGE RATE . . . . . $ %
NOTICE TO BUYER
YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR AGREEMENT OF SALE BY
NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE SEVENTH DAY FOLLOWING
THE SIGNING OF THE CONTRACT OR AGREEMENT.
CAUTION TO BUYER
IF YOU DO NOT HAVE THE FUNDS TO PAY THE BALLOON PAYMENT WHEN DUE,
IT MAY BE NECESSARY FOR YOU TO OBTAIN A NEW LOAN AGAINST YOUR
PROPERTY FOR THIS PURPOSE. NEITHER THE SELLER NOR THE LENDER IS
UNDER ANY OBLIGATION TO REFINANCE THE PROPERTY.
I acknowledge receipt of a
copy of this note and of the
Deed of Trust securing
payment of this note. Dated Executed
/s/ CHANDLER T. MARTIN
CHANDLER T. MARTIN
/s/ DEBRA L. MARTIN
DEBRA L. MARTIN
MAKER
Order No.
Escrow No. 719826-LJ
Loan No.
WHEN RECORDED MAIL TO:
DEED OF TRUST WITH ASSIGNMENT OF RENTS
(This Deed of Trust contains an acceleration clause)
This DEED OF TRUST, made the 2nd day of March, between CHANDLER T.
MARTIN and DEBRA L. MARTIN, husband and wife, as joint tenants,
herein called TRUSTOR, whose address is 8531 Jasmine Crest Court,
Elk Grove, California 95624, FOUNDERS TITLE COMPANY of Sacramento
County, a California corporation, herein called TRUSTEE, and SHF
ACQUISITION CORPORATION, a Nevada Corporation, herein called
BENEFICIARY.
WITNESSETH: That Trustor grants to Trustee in Trust, with Power of
sale, that property in the unincorporated area.
County of Sacramento, State of California, described as:
Lot No. 3126, as shown upon that certain "Plat of Rancho Murieta
Unit No. 6, filed in the office of the County Recorder of
Sacramento County, State of California, on January 9, 1991, in Book
213 of Maps, Map No. 6.
NOTICE TO BUYER: YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR
AGREEMENT OF SALE BY NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE
SEVENTH DAY FOLLOWING THE SIGNING OF THE CONTRACT OR AGREEMENT.
If the trustor shall sell, convey or alienate said property, or any
part thereof, or any interest therein or shall be divested of his
title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option, except as prohibited by law, to declare any
indebtedness or obligations secured hereby, immediately due and
payable irrespective of the maturity date specified in any note
evidencing the same.
TOGETHER WITH rents, issues and profits thereof, SUBJECT, HOWEVER,
to the right, power and authority given to and conferred upon
Beneficiary by paragraph (10) of the provisions incorporated herein
by reference to collect and apply such rents, issues and profits.
For the Purpose of Securing: 1. Performance of each agreement of
Trustor incorporated by reference or contained herein. 2. Payment
of the indebtedness evidenced by one promissory note of even date
herewith, and any extension or renewal thereof, in the principal
sum of $70,000.00 executed by Trustor in favor of Beneficiary or
order. 3. Payment of such further sums as the then record owner
of said property hereafter may borrow from Beneficiary, when
evidenced by another note (or notes) reciting it is so secured.
To Protect the Security of this Deed of Trust. Trustor Agrees: By
the execution and delivery of this Deed of Trust and the note
secured hereby, that provisions (1) to (14), inclusive, of the
fictitious deed of trust recorded in Santa Barbara County and
Sonoma County October 18, 1961, and in other counties October 23,
1961, in the book and at the page of Official Records in the office
of the county recorder of the county where said property located,
noted below opposite the name of such county, viz:
<TABLE>
<CAPTION>
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
<S> <C> <C> <S> <C> <C> <S> <C> <C> <S> <C> <C>
Alameda 435 684 Kings 792 833 Placer 895 301 Sierra 29 335
Alpine 1 250 Lake 362 39 Plumas 151 5 Siskiyou 468 181
Amador 104 348 Lansen 171 471 Riverside 3005 523 Solano 1105 182
Butte 1145 1 Los Angeles 12055 899 Sacramento 4331 62 Sonoma 1851 689
Calaveras 145 152 Madera 810 170 San Benito 271 383 Stanislaus 1715 456
Colusa 296 617 Marin 1508 339 San Bernardino 5567 61 Sutter 572 297
Contra Costa 3978 47 Mariposa 77 292 San Francisco A332 905 Tehama 401 289
Del Norte 78 414 Mendocino 579 530 San Joaquin 2470 311 Trinity 93 366
El Dorado 568 456 Merced 1547 538 San Luis Obispo 1151 12 Tulare 2294 275
Fresno 4626 572 Modoc 184 851 San Mateo 4078 420 Tuelumne 135 47
Glenn 422 184 Mono 52 429 Santa Barbara 1878 860 Ventura 2062 386
Humboldt 657 527 Monterey 2194 538 Santa Clara 5336 341 Yolo 653 245
Imperial 1091 501 Napa 639 86 Santa Cruz 1431 494 Yuba 334 486
Inyo 147 598 Nevada 305 320 Shasta 684 528
Kern 3427 60 Orange 5889 611 San Diego Series 2 Book 1961, Page 183887
</TABLE>
(which provisions, identical in all counties, are printed on the
reverse hereof) hereby are adopted and incorporated herein and made
a part hereof as fully as though set forth herein at length; that
he will observe and perform said provisions; and that the
references to property, obligations, and parties in said provisions
shall be construed to refer to the property, obligations, and
parties set forth in this Deed of Trust.
The undersigned Trustor requests that a copy of any Notice of
Default and of any Notice of Sale hereunder be mailed to him at his
address hereinbefore set forth.
STATE OF CALIFORNIA )
) SS. Signature of Trustor
COUNTY OF SACRAMENTO )
/s/ Chandler T. Martin
On March 5, 1992 before me, the CHANDLER T. MARTIN
undersigned, a Notary Public in
and for said State, personally /s/ Debra L. Martin
appeared DEBRA L. MARTIN
CHANDLER T. MARTIN and DEBRA L.
MARTIN
, proved upon
satisfactory evidence OR personally
known to me to be the person(s)
whose name(s) subscribed to the
within instrument and acknowledged
that executed the same.
WITNESS my hand and official seal.
Signature
/s/ Virginia Baldwin
Virginia Baldwin
Name (Typed or Printed) (This area for official
notary seal)
The following is a copy of provisions (1) to (14), inclusive, of the
fictitious deed of trust, recorded in each county in California, as
stated in the foregoing Deed of Trust and incorporated by reference in
said Deed of Trust as being a part thereof as if set forth at length
therein.
To Protect the Security of This Deed of Trust, Trustor Agrees:
(1) To keep said property in good condition and repair, not to remove
or demolish any building thereon, to complete or restore promptly and in
good and workmanlike manner any building which may be constructed,
damages or destroyed thereon and to pay when due all claims for labor
performed and materials furnished therefor, to comply with all laws
affecting said property or requiring any alterations or improvements to
be made thereon, not to commit or permit waste thereon, not to commit,
suffer or permit any act upon said property in violation of law, to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts
which from the character of use of said property may be reasonably
necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance
satisfactory to and with loss payable to Beneficiary. The amount
collected under any fire or other insurance policy may be applied by
Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary the entire amount
so collected or any part thereof may be released to Trustor. Such
application or release shall not cure or waive any default hereunder or
invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary as
Trustee, and to pay all costs and expenses, including cost of evidence of
title and attorney s fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear, and in any suit
brought by Beneficiary to foreclose this Deed.
(4) To pay at least ten days before delinquency all taxes and
assessments affecting said property, including assessments on appurtenant
water stock, when due, all encumbrances, charges and liens, with
interest, on said property or any part thereof, which appear to be prior
or superior hereto, all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein
provided, then Beneficiary or Trustee, but without obligation so to do
and without notice to or demand upon Trustor and without releasing
Trustor from any obligation hereof, may make or do the same in such
manner and to such extent as either may deem necessary to protect the
security hereof. Beneficiary or Trustee being authorized to enter upon
said property for such purposes, appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee, pay, purchase, contest or compromise
any encumbrance, charge or lien which in the judgment of either appears
to be prior or superior hereto, and, in exercising any such powers, pay
necessary expenses, employ counsel and pay his reasonable fees.
(5) To pay immediately and without demand all sums to so expended by
Beneficiary or Trustee, with interest from date of expenditure at the
amount allowed by law in effect at the date hereof, and to pay for any
statement provided for by law in effect at the date hereof regarding the
obligation secured hereby any amount demanded by the Beneficiary not to
exceed the maximum allowed by law at the time when said statement is
demanded.
(6) That any award of damages in connection with any condemnation for
public use of or injury to said property or any part thereof is hereby
assigned and shall e paid to Beneficiary who may apply or release such
moneys received by him in the same manner and with the same effect as
above provided for disposition of proceeds of fire or other insurance.
(7) That by accepting payment of any sum secured hereby after the due
date. Beneficiary does not waive his right either to require prompt
payment when due of all other sums so secured or to declare default for
failure to so pay.
(8) That at any time or from time to time, without liability therefor
and without notice, upon written request of Beneficiary and presentation
of this Deed and said note for endorsement, and without affecting the
personal liability of any person for payment of the indebtedness secured
hereby, Trustee may reconvey any part of said property, consent to the
making of any map or plat thereof, join in granting any easement thereon,
or join in any extension agreement or any agreement subordinating the
lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums
secured hereby have been paid, and upon surrender of this Deed and said
note to Trustee for cancellation and retention and upon payment of its
fees, Trustee shall reconvey, without warranty, the property then held
hereunder. The recitals in such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof. The grantee in
such reconveyance may be described as the person or persons legally
entitled thereto. Five years after issuance of such full reconveyance,
Trustee may destroy said note and this Deed of (unless directed in such
request to retain them).
(10) That as additional security, Trustor hereby gives to and confers
upon Beneficiary the right, power and authority, during the continuance
of these Trusts, to collect the rents, issues and profits of said
property, reserving unto Trustor the right, prior to any default by
Trustor in payment of any indebtedness secured hereby or in performance
of any agreement hereunder, to collect and retain such rents, issues and
profits as they become due and payable. Upon any such default,
Beneficiary may at any time without notice, either in person, by agent,
or by a receiver to be appointed by a court, and without regard to the
adequacy of any security for the indebtedness hereby secured, enter upon
and take possession of said property or any part thereof, in his own name
sue for or otherwise collect such rents, issues and profits, including
those past due and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorney s fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may
determine. The entering upon and taking possession of said property, the
collection of such rents, issues and profits and the application thereof
as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness
secured hereby or in performance of any agreement hereunder, Beneficiary
may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale
and of written notice of default and of election to cause to be sold said
property, which notice Trustee shall cause to be filed for record.
Beneficiary also shall deposit with Trustee this Deed, said note and all
documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following
the recordation of said notice of default, and notice of sale having been
given as then required by law, Trustee, without demand on Trustor, shall
sell said property at the time and place fixed by it in said notice of
sale, either as a whole or in separate parcels, and in such order as it
may determine, at public auction to the highest bidder for cash in lawful
money of the United States, payable at time of sale. Trustee may
postpone sale of all or any portion of said property by public
announcement of such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such
purchaser its deed conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of
any matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Trustor, Trustee, or Beneficiary as
hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this
Trust, including cost of evidence of title in connection with sale,
Trustee shall apply the proceeds of sale to payment of all sums expended
under the terms hereof, not then repaid, with accrued interest at the
amount allowed by law in effect at the date hereof, all other sums then
secured hereby, and the remainder, if any, to the person or persons
legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness
secured hereby, may from time to time, by instrument in writing,
substitute a successor or successors to any Trustee named herein or
acting hereunder, which instrument, executed by the Beneficiary and duly
acknowledged and recorded in the office of the recorder of the county or
counties where sold property is situated, shall be conclusive proof of
proper substitution of such successor Trustee or Trustees, who shall,
without conveyance from the Trustee predecessor, succeed to all its
title, estate, rights, powers and duties. Said instrument must contain
the name of the original Trustor, Trustee and Beneficiary hereunder, the
book and page where this Deed is recorded and the name and address of the
new Trustee.
(13) That this Deed applies to, inures to the benefit of, and binds
all parties hereto, their heirs, legatees, devisees, administrators,
executors, successors and assigns. The term Beneficiary shall mean the
owner and holder, including pledgees, of the note secured hereby, whether
or not named as Beneficiary herein. In this Deed, whenever the context
to requires, the masculine gender includes the feminine and or neuter,
and the singular number includes the plural.
(14) That Trustee accepts this Trust when this Deed, duly executed
and acknowledged, is made a public record as provided by law Trustee is
not obligated to notify any party hereto of pending sale under any other
Deed of Trust or of any action or proceeding in which Trustor,
Beneficiary or Trustee shall be a party unless brought by Trustee.
REQUEST FOR FULL CONVEYANCE
To be used only when note has been paid
To FOUNDERS TITLE COMPANY, Trustee: Dated _____________________
The undersigned is the legal owner and holder of all
indebtedness secured by the within Deed of Trust. All sums secured
by said Deed of Trust have been fully paid and satisfied; and you
are hereby requested and directed, on payment to you of any sums
owing to you under the terms of said Deed of Trust, to cancel all
evidences of indebtedness, secured by said Deed of Trust, delivered
to you herewith together with said Deed of Trust, and to reconvey,
without warranty, to the parties designated by the terms of said
Deed of Trust, the estate now held by you under the same.
Mail Reconveyance to:
By
By
Do not lose or destroy this Deed of Trust OR THE NOTE which it
secures. Both must be delivered to the Trustee for cancellation
before reconveyance will be made.
LEGAL DESCRIPTION
Lot 3126 as shown on the "RANCHO MURIETA UNIT NO. 6" recorded
in Book 213 of Maps, Map No. 6, records of said County.
The Real Property herein described is in close proximity to the
Rancho Murieta County Club Golf Course. Because of the close
proximity of the golf course it is foreseeable that golfers will
need temporary access for the purpose of retrieving errant golf
balls.
SHF Acquisition Corporation, a Nevada corporation, as grantor
herein hereby reserves an easement of temporary access over the
enclosed area of the lots conveyed herein for the benefit of
golfers to enable them to search for and retrieve golf balls which
have been inadvertently hit by them onto lots. The easement so
reserved is subject to the following limitations: (a) no golfer
shall deface or injure the landscaping or other personal property
on the Lot; (b) no golfer shall enter a fenced, walled or hedged
area of the Lot without the prior express permission of the Lot
owner; and (c) any golfer shall exercise reasonable care in
entering any lot and shall be financially responsible for any
damage to person or property occasioned by stray golf balls or the
retrieving thereof. Except as set forth above the Lot owner
assumes the risk of harm that may result from errant golf balls
which stray from the Rancho Murieta Country Club Golf Course.
The Lot owner agrees to take reasonable measures to insure
that adequate warning is given to all invitee, licensee or guests
on Lot of personal harm or property damage.
Lot owner hereby waives any and all liability against SHF
Acquisition Corporation for any personal harm or property damage
resulting from golf balls straying on the Lot.
This Deed is made and accepted upon the Covenants, Conditions
and Restrictions as set forth in that Declaration recorded Book
740308, at page 358, modifications recorded in Book 740529, at page
266, Book 740910, page 320, Book 770525, page 699, Book 810623,
page 442, Book 880222, page 1394, and Declaration of Annexation
recorded December 29, 1989, in Book 891229, page 5114, and
Modification recorded May 31, 1990 in Book 900531, page 917,
Official Records of Sacramento County.
SHF ACQUISITION CORPORATION
4045 South Spencer Street, Suite 206
Las Vegas, Nevada 89119
Telephone (702) 732-7474 Fax (702) 737-1065
April 6, 1994
Mrs. Debra L. Martin
8530 Jasmine Crest Court
Elk Grove, CA 95624
Dear Debbie:
This letter will serve as an extension for your loan on Lot
3126, Rancho Murieta, Unit 6.
With the exception of the extended due date, which is
March 10, 1998, all other terms and conditions of the loan will
remain the same.
Sincerely
/s/ James H. Dale
SHF Acquisition Corporation
by James H. Dale, President
Pay to the order of The Resolution Trust Corporation, as
Receiver for San Antonio Savings Association, F.A.
This endorsement is attached to and made a part of that
certain Promissory Note in the original principal amount of
$164,160.00 dated January 24, 1992, made by Consolidated Kapital,
Inc., a Nevada corporation, in favor of SHF Acquisition
Corporation, a Nevada corporation.
Dated: Nov 6, 1995
SHF ACQUISITION CORPORATION,
a Nevada corporation
By: /s/ James H. Dale
Title: President
DO NOT DESTROY THIS NOTE: When paid, this note, if
secured by Deed of Trust, must
be surrendered to Trustee for
cancellation, before
reconveyance will be made
PROMISSORY NOTE
(Interest Included Until Paid)
$164,160.00 Folsom, California January 24, 1992
For value received, CONSOLIDATED KAPITAL, INC., a Nevada
corporation, promises to pay to SHF ACQUISITION CORPORATION, a
Nevada corporation, or order at 14813 Jackson Road, Rancho Murieta,
California 95683, the principal sum of One Hundred Sixty-Four
Thousand One Hundred Sixty and No/100th Dollars with interest from
six months from date of recording on unpaid principal at the rate
of eight percent (8%) per annum; principal and interest payable as
follows: 29 equal consecutive, monthly installments of interest
only at $1,094.40 or more, with the first such installment due on
or before August 25, 1992 and continuing on the same day of each
month until complete and one FINAL BALLOON payment of principal and
interest due on or before July 25, 1995 in the amount of One
Hundred Sixty-Four Thousand One Hundred Sixty and No/100.
The holder of this note shall, not less than 60 days nor more
than 150 days before the balloon payment is due, deliver or mail by
first-class mail to the trustor, or his or her successor in
interest, at the last known address of such person a written notice
to include:
(1) A statement of the name and address of the person to whom
the balloon payment is required to be paid.
(2) The date on or before which the balloon payment was or is
required to be paid.
(3) The amount of the balloon payment, or if its exact amount
is unknown a good faith estimate of the amount thereof, including
unpaid principal, interest, and any other charges (assuming payment
in full of all scheduled installments coming due between the date
of the notice and the date when the balloon payment is due).
(4) A description of the trustor s right, if any, to refinance
the balloon payment, including a summary of the actual terms of the
refinancing or an estimate or approximation thereof, to the extent
known.
This note is subject to SECTION 2966 of the Civil Code, which
provides that the holder of this note shall give written notice to
the trustor, or his successor in interest, of prescribed
information at least 60 and not more than 150 days before any
balloon payment is due.
*If the trustor shall sell, convey or alienate said property,
or any part thereof, or any interest therein or shall be divested
of his title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option to declare any indebtedness or obligations
secured hereby, immediately due and payable irrespective of the
maturity date specified in any note evidencing the same.
Each payment shall be credited first on interest then due and
the remainder on principal.
Should default be made in payment of any installment when due,
the whole sum of principal and interest shall become immediately
due at the option of the holder of this note, without notice;
principal and interest payable in lawful money of the United
States. If action be instituted on this note, maker shall pay such
sum as the Court may fix as attorney s fees. This note is secured
by a DEED OF TRUST OF EVEN DATE. LATE CHARGE: SUBJECT TO ANY
NOTICE REQUIRED BY LAW. MAKER AGREES TO PAY A LATE CHARGE OF 6% OF
THE OVERDUE INSTALLMENT OR $5.00 WHICHEVER IS GREATER, IF PAYMENT
IS NOT MADE WITHIN 10 DAYS OF ITS DUE DATE.
1. Cash Price . . . . . . . . . . $ $205,200.00
2. Less: Cash Down Payment . . . $
3. Other. . . . . . . . . . . . . $
4. Total Down Payment . . . . . . $41,040.00 $ 41,040.00
5. Unpaid Balance of Cash Price . $164,160.00
6. Other Charges. . . . . . . . . $
7. Amount Financed (5 + 6). . . . $164,160.00
8. FINANCE CHARGE . . . . . . . . $ 32,832.00
9. Total of Payments. . . . . . . $196,992.00
10. Deferred Payment Price (1 + 8) $238,032.00
11. ANNUAL PERCENTAGE RATE . . . . $ 8.00%
NOTICE TO BUYER
YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR AGREEMENT OF SALE BY
NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE SEVENTH DAY FOLLOWING
THE SIGNING OF THE CONTRACT OR AGREEMENT.
CAUTION TO BUYER
IF YOU DO NOT HAVE THE FUNDS TO PAY THE BALLOON PAYMENT WHEN DUE,
IT MAY BE NECESSARY FOR YOU TO OBTAIN A NEW LOAN AGAINST YOUR
PROPERTY FOR THIS PURPOSE. NEITHER THE SELLER NOR THE LENDER IS
UNDER ANY OBLIGATION TO REFINANCE THE PROPERTY.
I acknowledge receipt of a
copy of this note and of the
Deed of Trust securing
payment of this note. Dated Executed 1/24/92
CONSOLIDATED KAPITAL, INC.
BY: /s/ KERRY STRAINE, PRESIDENT
KERRY STRAINE
BY: /s/ DONALD ROLLOFSON
DONALD P. ROLLOFSON MAKER
(Corporation)
STATE OF CALIFORNIA )
) SS.
COUNTY OF SACRAMENTO )
On February 7, 1992 before me, the undersigned, a Notary Public in and
for said State, personally appeared Donald P. Rollofson known to me to
be the Vice President of the corporation that executed the within
Instrument, known to me to be the persons who executed the within
Instrument on behalf of the corporation therein named, and acknowledged
to me that such corporation executed the within instrument pursuant
to its by-laws or a resolution of its board of directors.
WITNESS my hand and official seal.
Signature /s/ Bonnie J. Garcia
Bonnie J. Garcia
Name (Typed or Printed) (This area for official
notary seal)
(Corporation)
STATE OF CALIFORNIA )
) SS.
COUNTY OF SACRAMENTO )
On January 24, 1992 before me, the undersigned, a Notary Public in and
for said State, personally appeared Kerry Straine known to me to
be the President of the corporation that executed the within
Instrument, known to me to be the persons who executed the within
Instrument on behalf of the corporation therein named, and acknowledged
to me that such corporation executed the within instrument pursuant
to its by-laws or a resolution of its board of directors.
WITNESS my hand and official seal.
Signature /s/ Bonnie J. Garcia
Bonnie J. Garcia
Name (Typed or Printed) (This area for official
notary seal)
Order No.
Escrow No. 719828-LJ
Loan No.
WHEN RECORDED MAIL TO:
SHF Acquisition Corporation
14813 Jackson Road
Rancho Murieta, CA 95683
DEED OF TRUST WITH ASSIGNMENT OF RENTS
(This Deed of Trust contains an acceleration clause)
This DEED OF TRUST, made the 24th day of January, 1992, between
CONSOLIDATED KAPITAL, INC., a Nevada corporation, herein called
TRUSTOR, whose address is , FOUNDERS TITLE COMPANY of
Sacramento County, a California corporation, herein called TRUSTEE,
and SHF ACQUISITION CORPORATION, a Nevada Corporation, herein
called BENEFICIARY.
WITNESSETH: That Trustor grants to Trustee in Trust, with Power
of sale, that property in the unincorporated area.
County of Sacramento, State of California, described as:
Lot No. 3128, as shown upon that certain "Plat of Rancho Murieta
Unit No. 6, filed in the office of the County Recorder of
Sacramento County, State of California, on January 9, 1991, in Book
213 of Maps, Map No. 6.
NOTICE TO BUYER: YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR
AGREEMENT OF SALE BY NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE
SEVENTH DAY FOLLOWING THE SIGNING OF THE CONTRACT OR AGREEMENT.
If the trustor shall sell, convey or alienate said property, or any
part thereof, or any interest therein or shall be divested of his
title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option, except as prohibited by law, to declare any
indebtedness or obligations secured hereby, immediately due and
payable irrespective of the maturity date specified in any note
evidencing the same.
TOGETHER WITH rents, issues and profits thereof, SUBJECT, HOWEVER,
to the right, power and authority given to and conferred upon
Beneficiary by paragraph (10) of the provisions incorporated herein
by reference to collect and apply such rents, issues and profits.
For the Purpose of Securing: 1. Performance of each agreement of
Trustor incorporated by reference or contained herein. 2. Payment
of the indebtedness evidenced by one promissory note of even date
herewith, and any extension or renewal thereof, in the principal
sum of $164,160.00 executed by Trustor in favor of Beneficiary or
order. 3. Payment of such further sums as the then record owner
of said property hereafter may borrow from Beneficiary, when
evidenced by another note (or notes) reciting it is so secured.
To Protect the Security of this Deed of Trust. Trustor Agrees: By
the execution and delivery of this Deed of Trust and the note
secured hereby, that provisions (1) to (14), inclusive, of the
fictitious deed of trust recorded in Santa Barbara County and
Sonoma County October 18, 1961, and in other counties October 23,
1961, in the book and at the page of Official Records in the office
of the county recorder of the county where said property located,
noted below opposite the name of such county, viz:
<TABLE>
<CAPTION>
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
<S> <C> <C> <S> <C> <C> <S> <C> <C> <S> <C> <C>
Alameda 435 684 Kings 792 833 Placer 895 301 Sierra 29 335
Alpine 1 250 Lake 362 39 Plumas 151 5 Siskiyou 468 181
Amador 104 348 Lansen 171 471 Riverside 3005 523 Solano 1105 182
Butte 1145 1 Los Angeles 12055 899 Sacramento 4331 62 Sonoma 1851 689
Calaveras 145 152 Madera 810 170 San Benito 271 383 Stanislaus 1715 456
Colusa 296 617 Marin 1508 339 San Bernardino 5567 61 Sutter 572 297
Contra Costa 3978 47 Mariposa 77 292 San Francisco A332 905 Tehama 401 289
Del Norte 78 414 Mendocino 579 530 San Joaquin 2470 311 Trinity 93 366
El Dorado 568 456 Merced 1547 538 San Luis Obispo 1151 12 Tulare 2294 275
Fresno 4626 572 Modoc 184 851 San Mateo 4078 420 Tuelumne 135 47
Glenn 422 184 Mono 52 429 Santa Barbara 1878 860 Ventura 2062 386
Humboldt 657 527 Monterey 2194 538 Santa Clara 5336 341 Yolo 653 245
Imperial 1091 501 Napa 639 86 Santa Cruz 1431 494 Yuba 334 486
Inyo 147 598 Nevada 305 320 Shasta 684 528
Kern 3427 60 Orange 5889 611 San Diego Series 2 Book 1961, Page 183887
</TABLE>
(which provisions, identical in all counties, are printed on the
reverse hereof) hereby are adopted and incorporated herein and made
a part hereof as fully as though set forth herein at length; that
he will observe and perform said provisions; and that the
references to property, obligations, and parties in said provisions
shall be construed to refer to the property, obligations, and
parties set forth in this Deed of Trust.
The undersigned Trustor requests that a copy of any Notice of
Default and of any Notice of Sale hereunder be mailed to him at his
address hereinbefore set forth.
STATE OF CALIFORNIA )
) SS. Signature of Trustor
COUNTY OF SACRAMENTO )
CONSOLIDATED KAPITAL, INC.
/s/ Kerry Straine
On January 24, 1992 before me, the Kerry Straine
undersigned, a Notary Public in and /s/ Donald P. Rollofson
for said State, personally appeared Donald P. Rollofson
Kerry Straine
, proved upon
satisfactory
evidence OR personally known to me
to be the person(s) whose name(s)
subscribed to the within instrument
and acknowledged that executed
the same.
WITNESS my hand and official seal.
Signature /s/ Bonnie J. Garcia
Bonnie J. Garcia
Name (Typed or Printed) (This area for official
notary seal)
The following is a copy of provisions (1) to (14), inclusive, of the
fictitious deed of trust, recorded in each county in California, as
stated in the foregoing Deed of Trust and incorporated by reference in
said Deed of Trust as being a part thereof as if set forth at length
therein.
To Protect the Security of This Deed of Trust, Trustor Agrees:
(1) To keep said property in good condition and repair, not to remove
or demolish any building thereon, to complete or restore promptly and in
good and workmanlike manner any building which may be constructed,
damages or destroyed thereon and to pay when due all claims for labor
performed and materials furnished therefor, to comply with all laws
affecting said property or requiring any alterations or improvements to
be made thereon, not to commit or permit waste thereon, not to commit,
suffer or permit any act upon said property in violation of law, to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts
which from the character of use of said property may be reasonably
necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance
satisfactory to and with loss payable to Beneficiary. The amount
collected under any fire or other insurance policy may be applied by
Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary the entire amount
so collected or any part thereof may be released to Trustor. Such
application or release shall not cure or waive any default hereunder or
invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary as
Trustee, and to pay all costs and expenses, including cost of evidence of
title and attorney s fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear, and in any suit
brought by Beneficiary to foreclose this Deed.
(4) To pay at least ten days before delinquency all taxes and
assessments affecting said property, including assessments on appurtenant
water stock, when due, all encumbrances, charges and liens, with
interest, on said property or any part thereof, which appear to be prior
or superior hereto, all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein
provided, then Beneficiary or Trustee, but without obligation so to do
and without notice to or demand upon Trustor and without releasing
Trustor from any obligation hereof, may make or do the same in such
manner and to such extent as either may deem necessary to protect the
security hereof. Beneficiary or Trustee being authorized to enter upon
said property for such purposes, appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee, pay, purchase, contest or compromise
any encumbrance, charge or lien which in the judgment of either appears
to be prior or superior hereto, and, in exercising any such powers, pay
necessary expenses, employ counsel and pay his reasonable fees.
(5) To pay immediately and without demand all sums to so expended by
Beneficiary or Trustee, with interest from date of expenditure at the
amount allowed by law in effect at the date hereof, and to pay for any
statement provided for by law in effect at the date hereof regarding the
obligation secured hereby any amount demanded by the Beneficiary not to
exceed the maximum allowed by law at the time when said statement is
demanded.
(6) That any award of damages in connection with any condemnation for
public use of or injury to said property or any part thereof is hereby
assigned and shall e paid to Beneficiary who may apply or release such
moneys received by him in the same manner and with the same effect as
above provided for disposition of proceeds of fire or other insurance.
(7) That by accepting payment of any sum secured hereby after the due
date. Beneficiary does not waive his right either to require prompt
payment when due of all other sums so secured or to declare default for
failure to so pay.
(8) That at any time or from time to time, without liability therefor
and without notice, upon written request of Beneficiary and presentation
of this Deed and said note for endorsement, and without affecting the
personal liability of any person for payment of the indebtedness secured
hereby, Trustee may reconvey any part of said property, consent to the
making of any map or plat thereof, join in granting any easement thereon,
or join in any extension agreement or any agreement subordinating the
lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums
secured hereby have been paid, and upon surrender of this Deed and said
note to Trustee for cancellation and retention and upon payment of its
fees, Trustee shall reconvey, without warranty, the property then held
hereunder. The recitals in such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof. The grantee in
such reconveyance may be described as the person or persons legally
entitled thereto. Five years after issuance of such full reconveyance,
Trustee may destroy said note and this Deed of (unless directed in such
request to retain them).
(10) That as additional security, Trustor hereby gives to and confers
upon Beneficiary the right, power and authority, during the continuance
of these Trusts, to collect the rents, issues and profits of said
property, reserving unto Trustor the right, prior to any default by
Trustor in payment of any indebtedness secured hereby or in performance
of any agreement hereunder, to collect and retain such rents, issues and
profits as they become due and payable. Upon any such default,
Beneficiary may at any time without notice, either in person, by agent,
or by a receiver to be appointed by a court, and without regard to the
adequacy of any security for the indebtedness hereby secured, enter upon
and take possession of said property or any part thereof, in his own name
sue for or otherwise collect such rents, issues and profits, including
those past due and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorney s fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may
determine. The entering upon and taking possession of said property, the
collection of such rents, issues and profits and the application thereof
as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness
secured hereby or in performance of any agreement hereunder, Beneficiary
may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale
and of written notice of default and of election to cause to be sold said
property, which notice Trustee shall cause to be filed for record.
Beneficiary also shall deposit with Trustee this Deed, said note and all
documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following
the recordation of said notice of default, and notice of sale having been
given as then required by law, Trustee, without demand on Trustor, shall
sell said property at the time and place fixed by it in said notice of
sale, either as a whole or in separate parcels, and in such order as it
may determine, at public auction to the highest bidder for cash in lawful
money of the United States, payable at time of sale. Trustee may
postpone sale of all or any portion of said property by public
announcement of such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such
purchaser its deed conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of
any matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Trustor, Trustee, or Beneficiary as
hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this
Trust, including cost of evidence of title in connection with sale,
Trustee shall apply the proceeds of sale to payment of all sums expended
under the terms hereof, not then repaid, with accrued interest at the
amount allowed by law in effect at the date hereof, all other sums then
secured hereby, and the remainder, if any, to the person or persons
legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness
secured hereby, may from time to time, by instrument in writing,
substitute a successor or successors to any Trustee named herein or
acting hereunder, which instrument, executed by the Beneficiary and duly
acknowledged and recorded in the office of the recorder of the county or
counties where sold property is situated, shall be conclusive proof of
proper substitution of such successor Trustee or Trustees, who shall,
without conveyance from the Trustee predecessor, succeed to all its
title, estate, rights, powers and duties. Said instrument must contain
the name of the original Trustor, Trustee and Beneficiary hereunder, the
book and page where this Deed is recorded and the name and address of the
new Trustee.
(13) That this Deed applies to, inures to the benefit of, and binds
all parties hereto, their heirs, legatees, devisees, administrators,
executors, successors and assigns. The term Beneficiary shall mean the
owner and holder, including pledgees, of the note secured hereby, whether
or not named as Beneficiary herein. In this Deed, whenever the context
to requires, the masculine gender includes the feminine and or neuter,
and the singular number includes the plural.
(14) That Trustee accepts this Trust when this Deed, duly executed
and acknowledged, is made a public record as provided by law Trustee is
not obligated to notify any party hereto of pending sale under any other
Deed of Trust or of any action or proceeding in which Trustor,
Beneficiary or Trustee shall be a party unless brought by Trustee.
REQUEST FOR FULL CONVEYANCE
To be used only when note has been paid
To FOUNDERS TITLE COMPANY, Trustee: Dated ___________________
The undersigned is the legal owner and holder of all
indebtedness secured by the within Deed of Trust. All sums secured
by said Deed of Trust have been fully paid and satisfied; and you
are hereby requested and directed, on payment to you of any sums
owing to you under the terms of said Deed of Trust, to cancel all
evidences of indebtedness, secured by said Deed of Trust, delivered
to you herewith together with said Deed of Trust, and to reconvey,
without warranty, to the parties designated by the terms of said
Deed of Trust, the estate now held by you under the same.
Mail Reconveyance to:
By
By
Do not lose or destroy this Deed of Trust OR THE NOTE which it
secures. Both must be delivered to the Trustee for cancellation
before reconveyance will be made.
SHF ACQUISITION CORPORATION
4045 South Spencer Street, Suite 206
Las Vegas, Nevada 89119
Telephone (702) 732-7474 Fax (702) 737-1065
January 10, 1995
Kerry K. Straine
Business Services Group
955 University Avenue, Suite 103
Sacramento, CA 95825
Re: Consolidated Kapital, Inc.
Dear Kerry:
I've received your letter of December 21, 1995 and I'm not
quite sure what you are asking for.
It appears you're asking to have the note extended for an
additional two years, however, there was no mention as to any terms
and conditions surrounding the extension.
In order to expedite matters, SHF is willing to extend the
Consolidated Kaptial note for a period of two years from the
current due date. All conditions of the existing note will remain
in full force and effect and interest will continue to be payable
monthly.
Sincerely,
/s/ James H. Dale
James H. Dale
President
JHD:ms
Legal Description
Lot 3128 as shown on the, "RANCHO MURIETA UNIT NO. 6",
recorded in Book 213 of Maps, Map No. 6, records of said County.
THE REAL PROPERTY herein desecribed is in close proximity to
the Rancho Murieta County Club Golf Course. Because of the close
proximity of the golf course it is foreseeable that golfers will
need temporary access for the purpose of retrieving errant gold
balls.
SHF Acquisition Corporation, a Nevada corporation, as grantor
herein hereby reserves an easement of temporary access over the
enclosed area of the lots conveyed herein for the benefit of
golfers to enable them to search for and retrieve golf balls which
have been inadvertently hit by them onto lots. The easement so
reserved is subject to the following limitations: (a) no golfer
shall deface or injure the landscaping or other personal property
on the Lot; (b) no golfer shall enter a fenced, walled or hedged
area of the Lot without the prior express permission of the Lot
owner; and (c) any golfer shall exercise reasonable care in
entering any lot and shall be financially responsible for any
damage to person or property occasioned by stray golf balls or the
retrieving thereof. Except as set forth above the Lot owner
assumes the risk of harm that may result from errant golf balls
which stray from the Rancho Murieta Country Club Golf Course.
The Lot owner agrees to take reasonable measures to insure
that adequate warning is given to all invitee, licensee or guests
on Lot of personal harm or property damage.
Lot owner hereby waives any and all liability against SHF
Acquisition Corporation for any personal harm or property damage
resulting from golf balls straying on the Lot.
This Deed is made and accepted upon the Covenants, Conditions
and Restrictions as set forth in that Declaration recorded Book
740308, at page 358, modifications recorded in Book 740529, at page
266, Book 740910, page 320, Book 770525, page 699, Book 810623,
page 442, Book 880222, page 1394, and Declaration of Annexation
recorded December 29, 1989, in Book 891229, page 5114, and
Modification recorded May 31, 1990 in Book 900531, page 917,
Official Records of Sacramento County.
Pay to the order of The Resolution Trust Corporation, as
Receiver for San Antonio Savings Association, F.A.
This endorsement is attached to and made a part of that
certain Promissory Note in the original principal amount of
$85,360.00 dated April 6, 1995, made by William A. Brown, an
unmarried man, in favor of SHF Acquisition Corporation, a Nevada
corporation.
Dated: Nov 6, 1995
SHF ACQUISITION CORPORATION,
a Nevada corporation
By: /s/ James H. Dale
Title: President
When paid, this note, if
DO NOT DESTROY THIS NOTE: secured by Deed of Trust, must
be surrendered to Trustee for
cancellation, before
reconveyance will be made
PROMISSORY NOTE
(Interest Included Until Paid)
$85,360.00 Orangevale, California April 6, 1995
For value received, WILLIAM A. BROWN, an unmarried man,
promise to pay to SHF ACQUISITION CORPORATION, a Nevada
corporation, or order at 4045 South Spencer Street, Las Vegas,
Nevada 89119, the principal sum of Eighty-Five Thousand Three
Hundred Sixty and No/100th Dollars with interest from date of
recording on unpaid principal at the rate of ten percent (10%) per
annum; principal and interest payable as follows: 36 equal
consecutive, monthly installments of interest only at $711.33 or
more, with the first such installment due on or before May 14, 1995
and continuing on the same day of each month until complete and one
FINAL BALLOON payment of principal and interest due on or before
April 14, 1998 in the amount of Eighty-Five Thousand Three Hundred
Sixty and No/100th Dollars.
The holder of this note shall, not less than 60 days nor more
than 150 days before the balloon payment is due, deliver or mail by
first-class mail to the trustor, or his or her successor in
interest, at the last known address of such person a written notice
to include:
(1) A statement of the name and address of the person to whom
the balloon payment is required to be paid.
(2) The date on or before which the balloon payment was or is
required to be paid.
(3) The amount of the balloon payment, or if its exact amount
is unknown a good faith estimate of the amount thereof, including
unpaid principal, interest, and any other charges (assuming payment
in full of all scheduled installments coming due between the date
of the notice and the date when the balloon payment is due).
(4) A description of the trustor s right, if any, to refinance
the balloon payment, including a summary of the actual terms of the
refinancing or an estimate or approximation thereof, to the extent
known.
This note is subject to SECTION 2966 of the Civil Code, which
provides that the holder of this note shall give written notice to
the trustor, or his successor in interest, of prescribed
information at least 60 and not more than 150 days before any
balloon payment is due.
*If the trustor shall sell, convey or alienate said property,
or any part thereof, or any interest therein or shall be divested
of his title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option to declare any indebtedness or obligations
secured hereby, immediately due and payable irrespective of the
maturity date specified in any note evidencing the same.
Each payment shall be credited first on interest then due and
the remainder on principal.
Should default be made in payment of any installment when due,
the whole sum of principal and interest shall become immediately
due at the option of the holder of this note, without notice;
principal and interest payable in lawful money of the United
States. If action be instituted on this note, maker shall pay such
sum as the Court may fix as attorney s fees. This note is secured
by a DEED OF TRUST OF EVEN DATE. LATE CHARGE: SUBJECT TO ANY
NOTICE REQUIRED BY LAW. MAKER AGREES TO PAY A LATE CHARGE OF 6% OF
THE OVERDUE INSTALLMENT OR $5.00 WHICHEVER IS GREATER, IF PAYMENT
IS NOT MADE WITHIN 10 DAYS OF ITS DUE DATE.
1. Cash Price . . . . . . . . . . . . $ $ 106,700.00
2. Less: Cash Down Payment . . . . . $
3. Other. . . . . . . . . . . . . . . $
4. Total Down Payment . . . . . . . . $ $ 21,340.00
5. Unpaid Balance of Cash Price . . . $ 85,360.00
6. Other Charges. . . . . . . . . . . $
7. Amount Financed (5 + 6). . . . . . $ 85,360.00
8. FINANCE CHARGE . . . . . . . . . . $ 25,608.00
9. Total of Payments. . . . . . . . . $ 110,968.00
10. Deferred Payment Price (1 + 8) . . $ 132,308.00
11. ANNUAL PERCENTAGE RATE . . . . . . $ 10.00%
NOTICE TO BUYER
YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR AGREEMENT OF SALE BY
NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE SEVENTH DAY FOLLOWING
THE SIGNING OF THE CONTRACT OR AGREEMENT.
CAUTION TO BUYER
IF YOU DO NOT HAVE THE FUNDS TO PAY THE BALLOON PAYMENT WHEN DUE,
IT MAY BE NECESSARY FOR YOU TO OBTAIN A NEW LOAN AGAINST YOUR
PROPERTY FOR THIS PURPOSE. NEITHER THE SELLER NOR THE LENDER IS
UNDER ANY OBLIGATION TO REFINANCE THE PROPERTY.
I acknowledge receipt of a
copy of this note and of the
Deed of Trust securing
payment of this note. Dated Executed April 11, 1995
/s/ William A. Brown
WILLIAM A. BROWN
MAKER
Order No.
Escrow No. 719829-KJ
Loan No.
WHEN RECORDED MAIL TO:
SHF Acquisition Corporation
4045 S. Spencer Street, #206
Las Vegas, Nevada 89119
DEED OF TRUST WITH ASSIGNMENT OF RENTS
(This Deed of Trust contains an acceleration clause)
This DEED OF TRUST, made the 6th day of April, 1995, between
WILLIAM A. BROWN, an unmarried man, herein called TRUSTOR, whose
address is 7031 Lindero Lane, Rancho Murieta, California, 95683,
OLD REPUBLIC TITLE COMPANY of Sacramento County, a California
corporation, herein called TRUSTEE, and SHF ACQUISITION
CORPORATION, a Nevada Corporation, herein called BENEFICIARY.
WITNESSETH: That Trustor grants to Trustee in Trust, with Power of
sale, that property in the unincorporated area.
County of Sacramento, State of California, described as:
Lot No. 3129, as shown upon that certain "Plat of Rancho Murieta
Unit No. 6, filed in the office of the County Recorder of
Sacramento County, State of California, on January 9, 1991, in Book
213 of Maps, Map No. 6.
NOTICE TO BUYER: YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR
AGREEMENT OF SALE BY NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE
SEVENTH DAY FOLLOWING THE SIGNING OF THE CONTRACT OR AGREEMENT.
If the trustor shall sell, convey or alienate said property, or any
part thereof, or any interest therein or shall be divested of his
title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option, except as prohibited by law, to declare any
indebtedness or obligations secured hereby, immediately due and
payable irrespective of the maturity date specified in any note
evidencing the same.
TOGETHER WITH rents, issues and profits thereof, SUBJECT, HOWEVER,
to the right, power and authority given to and conferred upon
Beneficiary by paragraph (10) of the provisions incorporated herein
by reference to collect and apply such rents, issues and profits.
For the Purpose of Securing: 1. Performance of each agreement of
Trustor incorporated by reference or contained herein. 2. Payment
of the indebtedness evidenced by one promissory note of even date
herewith, and any extension or renewal thereof, in the principal
sum of $85,360.00 executed by Trustor in favor of Beneficiary or
order. 3. Payment of such further sums as the then record owner
of said property hereafter may borrow from Beneficiary, when
evidenced by another note (or notes) reciting it is so secured.
To Protect the Security of this Deed of Trust. Trustor Agrees: By
the execution and delivery of this Deed of Trust and the note
secured hereby, that provisions (1) to (14), inclusive, of the
fictitious deed of trust recorded in Santa Barbara County and
Sonoma County October 18, 1961, and in other counties October 23,
1961, in the book and at the page of Official Records in the office
of the county recorder of the county where said property located,
noted below opposite the name of such county, viz:
<TABLE>
<CAPTION>
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
<S> <C> <C> <S> <C> <C> <S> <C> <C> <S> <C> <C>
Alameda 435 684 Kings 792 833 Placer 895 301 Sierra 29 335
Alpine 1 250 Lake 362 39 Plumas 151 5 Siskiyou 468 181
Amador 104 348 Lansen 171 471 Riverside 3005 523 Solano 1105 182
Butte 1145 1 Los Angeles 12055 899 Sacramento 4331 62 Sonoma 1851 689
Calaveras 145 152 Madera 810 170 San Benito 271 383 Stanislaus 1715 456
Colusa 296 617 Marin 1508 339 San Bernardino 5567 61 Sutter 572 297
Contra Costa 3978 47 Mariposa 77 292 San Francisco A332 905 Tehama 401 289
Del Norte 78 414 Mendocino 579 530 San Joaquin 2470 311 Trinity 93 366
El Dorado 568 456 Merced 1547 538 San Luis Obispo 1151 12 Tulare 2294 275
Fresno 4626 572 Modoc 184 851 San Mateo 4078 420 Tuelumne 135 47
Glenn 422 184 Mono 52 429 Santa Barbara 1878 860 Ventura 2062 386
Humboldt 657 527 Monterey 2194 538 Santa Clara 5336 341 Yolo 653 245
Imperial 1091 501 Napa 639 86 Santa Cruz 1431 494 Yuba 334 486
Inyo 147 598 Nevada 305 320 Shasta 684 528
Kern 3427 60 Orange 5889 611 San Diego Series 2 Book 1961, Page 183887
</TABLE>
(which provisions, identical in all counties, are printed on the
reverse hereof) hereby are adopted and incorporated herein and made
a part hereof as fully as though set forth herein at length; that
he will observe and perform said provisions; and that the
references to property, obligations, and parties in said provisions
shall be construed to refer to the property, obligations, and
parties set forth in this Deed of Trust.
The undersigned Trustor requests that a copy of any Notice of
Default and of any Notice of Sale hereunder be mailed to him at his
address hereinbefore set forth.
STATE OF CALIFORNIA )
) SS. Signature of Trustor
COUNTY OF ) /s/ William A. Brown
WILLIAM A. BROWN
On before me, the undersigned,
a Notary Public in and for said State,
personally appeared
, proved upon satisfactory
evidence OR personally known to me to
be the person(s) whose name(s)
subscribed to the within instrument
and acknowledged that executed the same.
WITNESS my hand and official seal.
Signature
Name (Typed or Printed) (This area for official
notary seal)
The following is a copy of provisions (1) to (14), inclusive, of the
fictitious deed of trust, recorded in each county in California, as
stated in the foregoing Deed of Trust and incorporated by reference in
said Deed of Trust as being a part thereof as if set forth at length
therein.
To Protect the Security of This Deed of Trust, Trustor Agrees:
(1) To keep said property in good condition and repair, not to remove
or demolish any building thereon, to complete or restore promptly and in
good and workmanlike manner any building which may be constructed,
damages or destroyed thereon and to pay when due all claims for labor
performed and materials furnished therefor, to comply with all laws
affecting said property or requiring any alterations or improvements to
be made thereon, not to commit or permit waste thereon, not to commit,
suffer or permit any act upon said property in violation of law, to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts
which from the character of use of said property may be reasonably
necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance
satisfactory to and with loss payable to Beneficiary. The amount
collected under any fire or other insurance policy may be applied by
Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary the entire amount
so collected or any part thereof may be released to Trustor. Such
application or release shall not cure or waive any default hereunder or
invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary as
Trustee, and to pay all costs and expenses, including cost of evidence of
title and attorney s fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear, and in any suit
brought by Beneficiary to foreclose this Deed.
(4) To pay at least ten days before delinquency all taxes and
assessments affecting said property, including assessments on appurtenant
water stock, when due, all encumbrances, charges and liens, with
interest, on said property or any part thereof, which appear to be prior
or superior hereto, all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein
provided, then Beneficiary or Trustee, but without obligation so to do
and without notice to or demand upon Trustor and without releasing
Trustor from any obligation hereof, may make or do the same in such
manner and to such extent as either may deem necessary to protect the
security hereof. Beneficiary or Trustee being authorized to enter upon
said property for such purposes, appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee, pay, purchase, contest or compromise
any encumbrance, charge or lien which in the judgment of either appears
to be prior or superior hereto, and, in exercising any such powers, pay
necessary expenses, employ counsel and pay his reasonable fees.
(5) To pay immediately and without demand all sums to so expended by
Beneficiary or Trustee, with interest from date of expenditure at the
amount allowed by law in effect at the date hereof, and to pay for any
statement provided for by law in effect at the date hereof regarding the
obligation secured hereby any amount demanded by the Beneficiary not to
exceed the maximum allowed by law at the time when said statement is
demanded.
(6) That any award of damages in connection with any condemnation for
public use of or injury to said property or any part thereof is hereby
assigned and shall e paid to Beneficiary who may apply or release such
moneys received by him in the same manner and with the same effect as
above provided for disposition of proceeds of fire or other insurance.
(7) That by accepting payment of any sum secured hereby after the due
date. Beneficiary does not waive his right either to require prompt
payment when due of all other sums so secured or to declare default for
failure to so pay.
(8) That at any time or from time to time, without liability therefor
and without notice, upon written request of Beneficiary and presentation
of this Deed and said note for endorsement, and without affecting the
personal liability of any person for payment of the indebtedness secured
hereby, Trustee may reconvey any part of said property, consent to the
making of any map or plat thereof, join in granting any easement thereon,
or join in any extension agreement or any agreement subordinating the
lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums
secured hereby have been paid, and upon surrender of this Deed and said
note to Trustee for cancellation and retention and upon payment of its
fees, Trustee shall reconvey, without warranty, the property then held
hereunder. The recitals in such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof. The grantee in
such reconveyance may be described as the person or persons legally
entitled thereto. Five years after issuance of such full reconveyance,
Trustee may destroy said note and this Deed of (unless directed in such
request to retain them).
(10) That as additional security, Trustor hereby gives to and confers
upon Beneficiary the right, power and authority, during the continuance
of these Trusts, to collect the rents, issues and profits of said
property, reserving unto Trustor the right, prior to any default by
Trustor in payment of any indebtedness secured hereby or in performance
of any agreement hereunder, to collect and retain such rents, issues and
profits as they become due and payable. Upon any such default,
Beneficiary may at any time without notice, either in person, by agent,
or by a receiver to be appointed by a court, and without regard to the
adequacy of any security for the indebtedness hereby secured, enter upon
and take possession of said property or any part thereof, in his own name
sue for or otherwise collect such rents, issues and profits, including
those past due and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorney s fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may
determine. The entering upon and taking possession of said property, the
collection of such rents, issues and profits and the application thereof
as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness
secured hereby or in performance of any agreement hereunder, Beneficiary
may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale
and of written notice of default and of election to cause to be sold said
property, which notice Trustee shall cause to be filed for record.
Beneficiary also shall deposit with Trustee this Deed, said note and all
documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following
the recordation of said notice of default, and notice of sale having been
given as then required by law, Trustee, without demand on Trustor, shall
sell said property at the time and place fixed by it in said notice of
sale, either as a whole or in separate parcels, and in such order as it
may determine, at public auction to the highest bidder for cash in lawful
money of the United States, payable at time of sale. Trustee may
postpone sale of all or any portion of said property by public
announcement of such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such
purchaser its deed conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of
any matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Trustor, Trustee, or Beneficiary as
hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this
Trust, including cost of evidence of title in connection with sale,
Trustee shall apply the proceeds of sale to payment of all sums expended
under the terms hereof, not then repaid, with accrued interest at the
amount allowed by law in effect at the date hereof, all other sums then
secured hereby, and the remainder, if any, to the person or persons
legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness
secured hereby, may from time to time, by instrument in writing,
substitute a successor or successors to any Trustee named herein or
acting hereunder, which instrument, executed by the Beneficiary and duly
acknowledged and recorded in the office of the recorder of the county or
counties where sold property is situated, shall be conclusive proof of
proper substitution of such successor Trustee or Trustees, who shall,
without conveyance from the Trustee predecessor, succeed to all its
title, estate, rights, powers and duties. Said instrument must contain
the name of the original Trustor, Trustee and Beneficiary hereunder, the
book and page where this Deed is recorded and the name and address of the
new Trustee.
(13) That this Deed applies to, inures to the benefit of, and binds
all parties hereto, their heirs, legatees, devisees, administrators,
executors, successors and assigns. The term Beneficiary shall mean the
owner and holder, including pledgees, of the note secured hereby, whether
or not named as Beneficiary herein. In this Deed, whenever the context
to requires, the masculine gender includes the feminine and or neuter,
and the singular number includes the plural.
(14) That Trustee accepts this Trust when this Deed, duly executed
and acknowledged, is made a public record as provided by law Trustee is
not obligated to notify any party hereto of pending sale under any other
Deed of Trust or of any action or proceeding in which Trustor,
Beneficiary or Trustee shall be a party unless brought by Trustee.
REQUEST FOR FULL CONVEYANCE
To be used only when note has been paid
To FOUNDERS TITLE COMPANY, Trustee: Dated _________________
The undersigned is the legal owner and holder of all
indebtedness secured by the within Deed of Trust. All sums secured
by said Deed of Trust have been fully paid and satisfied; and you
are hereby requested and directed, on payment to you of any sums
owing to you under the terms of said Deed of Trust, to cancel all
evidences of indebtedness, secured by said Deed of Trust, delivered
to you herewith together with said Deed of Trust, and to reconvey,
without warranty, to the parties designated by the terms of said
Deed of Trust, the estate now held by you under the same.
Mail Reconveyance to:
By
By
Do not lose or destroy this Deed of Trust OR THE NOTE which it
secures. Both must be delivered to the Trustee for cancellation
before reconveyance will be made.
STATE OF CALIFORNIA }
}ss.
COUNTY OF SACRAMENTO }
On April 11, 1995 before me, the undersigned, a Notary Public
in and for said State, personally appeared WILLIAM A. BROWN
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
Witness my hand and official seal.
Signature /s/ L.E. James
(This area for official
Name L.E. James notary seal)
(typed or printed)
Pay to the order of The Resolution Trust Corporation, as
Receiver for San Antonio Savings Association, F.A.
This endorsement is attached to and made a part of that
certain Promissory Note in the original principal amount of
$76,000.00 dated March 10, 1995, made by John P. Xepoleas and
Monterey A. Xepoleas, husband and wife, in favor of SHF Acquisition
Corporation, a Nevada corporation.
Dated: Nov 6, 1995
SHF ACQUISITION CORPORATION,
a Nevada corporation
By: /s/ James H. Dale
Title: President
When paid, this note, if
DO NOT DESTROY THIS NOTE: secured by Deed of Trust, must
be surrendered to Trustee for
cancellation, before
reconveyance will be made
PROMISSORY NOTE
(Interest Included Until Paid)
$76,000.00 Orangevale, California March 10, 1995
For value received, JOHN P. XEPOLEAS and MONTEREY A. XEPOLEAS,
husband and wife promise to pay to SHF ACQUISITION CORPORATION, a
Nevada corporation, or order at 4045 S. Spencer Street, Las Vegas,
Nevada 89119, the principal sum of Seventy-Six Thousand and
No/100th Dollars with interest from date of recording on unpaid
principal at the rate of 8 percent (8%) per annum; principal and
interest payable as follows: 36 equal consecutive, monthly
installments of interest only at $506.67 or more, with the first
such installment due on or before April 15, 1995 and continuing on
the same day of each month until complete and one FINAL BALLOON
payment of principal and interest due on or before March 15, 1998
in the amount of Seventy Six Thousand Five Hundred Six and 67/100.
The holder of this note shall, not less than 60 days nor more
than 150 days before the balloon payment is due, deliver or mail by
first-class mail to the trustor, or his or her successor in
interest, at the last known address of such person a written notice
to include:
(1) A statement of the name and address of the person to whom
the balloon payment is required to be paid.
(2) The date on or before which the balloon payment was or is
required to be paid.
(3) The amount of the balloon payment, or if its exact amount
is unknown a good faith estimate of the amount thereof, including
unpaid principal, interest, and any other charges (assuming payment
in full of all scheduled installments coming due between the date
of the notice and the date when the balloon payment is due).
(4) A description of the trustor s right, if any, to refinance
the balloon payment, including a summary of the actual terms of the
refinancing or an estimate or approximation thereof, to the extent
known.
This note is subject to SECTION 2966 of the Civil Code, which
provides that the holder of this note shall give written notice to
the trustor, or his successor in interest, of prescribed
information at least 60 and not more than 150 days before any
balloon payment is due.
*If the trustor shall sell, convey or alienate said property,
or any part thereof, or any interest therein or shall be divested
of his title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option to declare any indebtedness or obligations
secured hereby, immediately due and payable irrespective of the
maturity date specified in any note evidencing the same.
Each payment shall be credited first on interest then due and
the remainder on principal.
Should default be made in payment of any installment when due,
the whole sum of principal and interest shall become immediately
due at the option of the holder of this note, without notice;
principal and interest payable in lawful money of the United
States. If action be instituted on this note, maker shall pay such
sum as the Court may fix as attorney s fees. This note is secured
by a DEED OF TRUST OF EVEN DATE. LATE CHARGE: SUBJECT TO ANY
NOTICE REQUIRED BY LAW. MAKER AGREES TO PAY A LATE CHARGE OF 6% OF
THE OVERDUE INSTALLMENT OR $5.00 WHICHEVER IS GREATER, IF PAYMENT
IS NOT MADE WITHIN 10 DAYS OF ITS DUE DATE.
1. Cash Price . . . . . . . . . . . $ $ 95,000.00
2. Less: Cash Down Payment . . . . $
3. Other. . . . . . . . . . . . . .
4. Total Down Payment . . . . . . . $ $ 19,000.00
5. Unpaid Balance of Cash Price . . $ 76,000.00
6. Other Charges. . . . . . . . . . $
7. Amount Financed (5 + 6). . . . . $ 76,000.00
8. FINANCE CHARGE . . . . . . . . . $ 18,240.12
9. Total of Payments. . . . . . . . $ 94,240.12
10. Deferred Payment Price (1 + 8) . $113,240.12
11. ANNUAL PERCENTAGE RATE . . . . . $ 8.0 %
NOTICE TO BUYER
YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR AGREEMENT OF SALE BY
NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE SEVENTH DAY FOLLOWING
THE SIGNING OF THE CONTRACT OR AGREEMENT.
CAUTION TO BUYER
IF YOU DO NOT HAVE THE FUNDS TO PAY THE BALLOON PAYMENT WHEN DUE,
IT MAY BE NECESSARY FOR YOU TO OBTAIN A NEW LOAN AGAINST YOUR
PROPERTY FOR THIS PURPOSE. NEITHER THE SELLER NOR THE LENDER IS
UNDER ANY OBLIGATION TO REFINANCE THE PROPERTY.
I acknowledge receipt of a
copy of this note and of the
Deed of Trust securing
payment of this note. Dated Executed
/s/ John P. Xepoleas
JOHN P. XEPOLEAS
/s/ Monterey A. Xepoleas
MONTEREY A. XEPOLEAS
MAKER
Order No. FOUNDERS TITLE COMPANY
Escrow No. 719837-KJ
Loan No.
WHEN RECORDED MAIL TO:
SHF Acquisition Corporation
4045 South Spencer Street
Las Vegas, NV 89119
DEED OF TRUST WITH ASSIGNMENT OF RENTS
(This Deed of Trust contains an acceleration clause)
This DEED OF TRUST, made the 10th day of March, 1995, between JOHN
P. XEPOLEAS and MONTEREY A. XEPOLEAS, husband and wife, as joint
tenants, herein called TRUSTOR, whose address is 9228 Premier Way,
Sacramento, California 95826, FOUNDERS TITLE COMPANY of Sacramento
County, a California corporation, herein called TRUSTEE, and SHF
ACQUISITION CORPORATION, a Nevada Corporation, herein called
BENEFICIARY.
WITNESSETH: That Trustor grants to Trustee in Trust, with Power
of sale, that property in the unincorporated area.
County of Sacramento, State of California, described as:
Lot No. 3137, as shown upon that certain "Plat of Rancho Murieta
Unit No. 6, filed in the office of the County Recorder of
Sacramento County, State of California, on January 9, 1991, in Book
213 of Maps, Map No. 6.
NOTICE TO BUYER: YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR
AGREEMENT OF SALE BY NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE
SEVENTH DAY FOLLOWING THE SIGNING OF THE CONTRACT OR AGREEMENT.
If the trustor shall sell, convey or alienate said property, or any
part thereof, or any interest therein or shall be divested of his
title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option, except as prohibited by law, to declare any
indebtedness or obligations secured hereby, immediately due and
payable irrespective of the maturity date specified in any note
evidencing the same.
TOGETHER WITH rents, issues and profits thereof, SUBJECT, HOWEVER,
to the right, power and authority given to and conferred upon
Beneficiary by paragraph (10) of the provisions incorporated herein
by reference to collect and apply such rents, issues and profits.
For the Purpose of Securing: 1. Performance of each agreement of
Trustor incorporated by reference or contained herein. 2. Payment
of the indebtedness evidenced by one promissory note of even date
herewith, and any extension or renewal thereof, in the principal
sum of $76,000.00 executed by Trustor in favor of Beneficiary or
order. 3. Payment of such further sums as the then record owner
of said property hereafter may borrow from Beneficiary, when
evidenced by another note (or notes) reciting it is so secured.
To Protect the Security of this Deed of Trust. Trustor Agrees: By
the execution and delivery of this Deed of Trust and the note
secured hereby, that provisions (1) to (14), inclusive, of the
fictitious deed of trust recorded in Santa Barbara County and
Sonoma County October 18, 1961, and in other counties October 23,
1961, in the book and at the page of Official Records in the office
of the county recorder of the county where said property located,
noted below opposite the name of such county, viz:
<TABLE>
<CAPTION>
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
<S> <C> <C> <S> <C> <C> <S> <C> <C> <S> <C> <C>
Alameda 435 684 Kings 792 833 Placer 895 301 Sierra 29 335
Alpine 1 250 Lake 362 39 Plumas 151 5 Siskiyou 468 181
Amador 104 348 Lansen 171 471 Riverside 3005 523 Solano 1105 182
Butte 1145 1 Los Angeles 12055 899 Sacramento 4331 62 Sonoma 1851 689
Calaveras 145 152 Madera 810 170 San Benito 271 383 Stanislaus 1715 456
Colusa 296 617 Marin 1508 339 San Bernardino 5567 61 Sutter 572 297
Contra Costa 3978 47 Mariposa 77 292 San Francisco A332 905 Tehama 401 289
Del Norte 78 414 Mendocino 579 530 San Joaquin 2470 311 Trinity 93 366
El Dorado 568 456 Merced 1547 538 San Luis Obispo 1151 12 Tulare 2294 275
Fresno 4626 572 Modoc 184 851 San Mateo 4078 420 Tuelumne 135 47
Glenn 422 184 Mono 52 429 Santa Barbara 1878 860 Ventura 2062 386
Humboldt 657 527 Monterey 2194 538 Santa Clara 5336 341 Yolo 653 245
Imperial 1091 501 Napa 639 86 Santa Cruz 1431 494 Yuba 334 486
Inyo 147 598 Nevada 305 320 Shasta 684 528
Kern 3427 60 Orange 5889 611 San Diego Series 2 Book 1961, Page 183887
</TABLE>
(which provisions, identical in all counties, are printed on the
reverse hereof) hereby are adopted and incorporated herein and made
a part hereof as fully as though set forth herein at length; that
he will observe and perform said provisions; and that the
references to property, obligations, and parties in said provisions
shall be construed to refer to the property, obligations, and
parties set forth in this Deed of Trust.
The undersigned Trustor requests that a copy of any Notice of
Default and of any Notice of Sale hereunder be mailed to him at his
address hereinbefore set forth.
STATE OF CALIFORNIA )
) SS. Signature of Trustor
COUNTY OF )
/s/ John P. Xepoleas
On before me, the JOHN P. XEPOLEAS
undersigned, a Notary Public
in and for said State, personally /s/ Monterey A. Xepoleas
appeared MONTEREY A. XEPOLEAS
, proved upon
satisfactory evidence OR
personally known to me to be the
person(s) whose name(s)
subscribed to the within
instrument and acknowledged
that executed the same.
WITNESS my hand and official seal.
Signature
Name (Typed or Printed) (This area for official
notary seal)
The following is a copy of provisions (1) to (14), inclusive, of the
fictitious deed of trust, recorded in each county in California, as
stated in the foregoing Deed of Trust and incorporated by reference in
said Deed of Trust as being a part thereof as if set forth at length
therein.
To Protect the Security of This Deed of Trust, Trustor Agrees:
(1) To keep said property in good condition and repair, not to remove
or demolish any building thereon, to complete or restore promptly and in
good and workmanlike manner any building which may be constructed,
damages or destroyed thereon and to pay when due all claims for labor
performed and materials furnished therefor, to comply with all laws
affecting said property or requiring any alterations or improvements to
be made thereon, not to commit or permit waste thereon, not to commit,
suffer or permit any act upon said property in violation of law, to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts
which from the character of use of said property may be reasonably
necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance
satisfactory to and with loss payable to Beneficiary. The amount
collected under any fire or other insurance policy may be applied by
Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary the entire amount
so collected or any part thereof may be released to Trustor. Such
application or release shall not cure or waive any default hereunder or
invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary as
Trustee, and to pay all costs and expenses, including cost of evidence of
title and attorney s fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear, and in any suit
brought by Beneficiary to foreclose this Deed.
(4) To pay at least ten days before delinquency all taxes and
assessments affecting said property, including assessments on appurtenant
water stock, when due, all encumbrances, charges and liens, with
interest, on said property or any part thereof, which appear to be prior
or superior hereto, all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein
provided, then Beneficiary or Trustee, but without obligation so to do
and without notice to or demand upon Trustor and without releasing
Trustor from any obligation hereof, may make or do the same in such
manner and to such extent as either may deem necessary to protect the
security hereof. Beneficiary or Trustee being authorized to enter upon
said property for such purposes, appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee, pay, purchase, contest or compromise
any encumbrance, charge or lien which in the judgment of either appears
to be prior or superior hereto, and, in exercising any such powers, pay
necessary expenses, employ counsel and pay his reasonable fees.
(5) To pay immediately and without demand all sums to so expended by
Beneficiary or Trustee, with interest from date of expenditure at the
amount allowed by law in effect at the date hereof, and to pay for any
statement provided for by law in effect at the date hereof regarding the
obligation secured hereby any amount demanded by the Beneficiary not to
exceed the maximum allowed by law at the time when said statement is
demanded.
(6) That any award of damages in connection with any condemnation for
public use of or injury to said property or any part thereof is hereby
assigned and shall e paid to Beneficiary who may apply or release such
moneys received by him in the same manner and with the same effect as
above provided for disposition of proceeds of fire or other insurance.
(7) That by accepting payment of any sum secured hereby after the due
date. Beneficiary does not waive his right either to require prompt
payment when due of all other sums so secured or to declare default for
failure to so pay.
(8) That at any time or from time to time, without liability therefor
and without notice, upon written request of Beneficiary and presentation
of this Deed and said note for endorsement, and without affecting the
personal liability of any person for payment of the indebtedness secured
hereby, Trustee may reconvey any part of said property, consent to the
making of any map or plat thereof, join in granting any easement thereon,
or join in any extension agreement or any agreement subordinating the
lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums
secured hereby have been paid, and upon surrender of this Deed and said
note to Trustee for cancellation and retention and upon payment of its
fees, Trustee shall reconvey, without warranty, the property then held
hereunder. The recitals in such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof. The grantee in
such reconveyance may be described as the person or persons legally
entitled thereto. Five years after issuance of such full reconveyance,
Trustee may destroy said note and this Deed of (unless directed in such
request to retain them).
(10) That as additional security, Trustor hereby gives to and confers
upon Beneficiary the right, power and authority, during the continuance
of these Trusts, to collect the rents, issues and profits of said
property, reserving unto Trustor the right, prior to any default by
Trustor in payment of any indebtedness secured hereby or in performance
of any agreement hereunder, to collect and retain such rents, issues and
profits as they become due and payable. Upon any such default,
Beneficiary may at any time without notice, either in person, by agent,
or by a receiver to be appointed by a court, and without regard to the
adequacy of any security for the indebtedness hereby secured, enter upon
and take possession of said property or any part thereof, in his own name
sue for or otherwise collect such rents, issues and profits, including
those past due and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorney s fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may
determine. The entering upon and taking possession of said property, the
collection of such rents, issues and profits and the application thereof
as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness
secured hereby or in performance of any agreement hereunder, Beneficiary
may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale
and of written notice of default and of election to cause to be sold said
property, which notice Trustee shall cause to be filed for record.
Beneficiary also shall deposit with Trustee this Deed, said note and all
documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following
the recordation of said notice of default, and notice of sale having been
given as then required by law, Trustee, without demand on Trustor, shall
sell said property at the time and place fixed by it in said notice of
sale, either as a whole or in separate parcels, and in such order as it
may determine, at public auction to the highest bidder for cash in lawful
money of the United States, payable at time of sale. Trustee may
postpone sale of all or any portion of said property by public
announcement of such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such
purchaser its deed conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of
any matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Trustor, Trustee, or Beneficiary as
hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this
Trust, including cost of evidence of title in connection with sale,
Trustee shall apply the proceeds of sale to payment of all sums expended
under the terms hereof, not then repaid, with accrued interest at the
amount allowed by law in effect at the date hereof, all other sums then
secured hereby, and the remainder, if any, to the person or persons
legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness
secured hereby, may from time to time, by instrument in writing,
substitute a successor or successors to any Trustee named herein or
acting hereunder, which instrument, executed by the Beneficiary and duly
acknowledged and recorded in the office of the recorder of the county or
counties where sold property is situated, shall be conclusive proof of
proper substitution of such successor Trustee or Trustees, who shall,
without conveyance from the Trustee predecessor, succeed to all its
title, estate, rights, powers and duties. Said instrument must contain
the name of the original Trustor, Trustee and Beneficiary hereunder, the
book and page where this Deed is recorded and the name and address of the
new Trustee.
(13) That this Deed applies to, inures to the benefit of, and binds
all parties hereto, their heirs, legatees, devisees, administrators,
executors, successors and assigns. The term Beneficiary shall mean the
owner and holder, including pledgees, of the note secured hereby, whether
or not named as Beneficiary herein. In this Deed, whenever the context
to requires, the masculine gender includes the feminine and or neuter,
and the singular number includes the plural.
(14) That Trustee accepts this Trust when this Deed, duly executed
and acknowledged, is made a public record as provided by law Trustee is
not obligated to notify any party hereto of pending sale under any other
Deed of Trust or of any action or proceeding in which Trustor,
Beneficiary or Trustee shall be a party unless brought by Trustee.
REQUEST FOR FULL CONVEYANCE
To be used only when note has been paid
To FOUNDERS TITLE COMPANY, Trustee: Dated _________________
The undersigned is the legal owner and holder of all
indebtedness secured by the within Deed of Trust. All sums secured
by said Deed of Trust have been fully paid and satisfied; and you
are hereby requested and directed, on payment to you of any sums
owing to you under the terms of said Deed of Trust, to cancel all
evidences of indebtedness, secured by said Deed of Trust, delivered
to you herewith together with said Deed of Trust, and to reconvey,
without warranty, to the parties designated by the terms of said
Deed of Trust, the estate now held by you under the same.
Mail Reconveyance to:
By
By
Do not lose or destroy this Deed of Trust OR THE NOTE which it
secures. Both must be delivered to the Trustee for cancellation
before reconveyance will be made.
STATE OF CALIFORNIA
}ss.
COUNTY OF SACRAMENTO
On March 13, 1995, before me, the undersigned, a Notary Public
in and for said State, personally appeared JOHN P. XEPOLEAS and
MONTEREY A. XEPOLEAS personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
Witness my hand and official seal.
Signature /s/ L.E. James
(This area for official
Name L.E. JAMES notary seal)
(typed or printed)
Pay to the order of The Resolution Trust Corporation, as
Receiver for San Antonio Savings Association, F.A.
This endorsement is attached to and made a part of that
certain Promissory Note in the original principal amount of
$193,800.00 dated July 22, 1992, made by T.E. Duerr and P.A. Duerr,
Trustees of the Duerr Family Revocable Trust dated October 14,
1987, in favor of SHF Acquisition Corporation, a Nevada
corporation.
Dated: Nov 6, 1995
SHF ACQUISITION CORPORATION,
a Nevada corporation
By: /s/ James H. Dale
Title: President
When paid, this note, if
DO NOT DESTROY THIS NOTE: secured by Deed of Trust, must
be surrendered to Trustee for
cancellation, before
reconveyance will be made
PROMISSORY NOTE
(Interest Included Until Paid)
$193,800.00 Folsom, California July 22, 1992
For value received, T.E. DUERR and P.A. DUERR, Trustees of the
DUERR FAMILY REVOCABLE TRUST DATED OCTOBER 14, 1987, promise to pay
to SHF ACQUISITION CORPORATION, a Nevada corporation, or order at
14813 Jackson Road, Rancho Murieta, California 95683, the principal
sum of One Hundred Ninety-Three Thousand Eight Hundred and No/100th
Dollars with interest from date of recording on unpaid principal at
the rate of eight percent (8%) per annum; principal and interest
payable as follows: 24 equal consecutive, monthly installments of
interest only at $1,292.00 or more, with the first such installment
due on or before September 10, 1993, and continuing on the same day
of each month until complete and one FINAL BALLOON payment of
principal and interest due on or before August 10, 1995 in the
amount of One Hundred Ninety-Five Thousand Ninety-Two and No/100th
Dollars.
The holder of this note shall, not less than 60 days nor more
than 150 days before the balloon payment is due, deliver or mail by
first-class mail to the trustor, or his or her successor in
interest, at the last known address of such person a written notice
to include:
(1) A statement of the name and address of the person to whom
the balloon payment is required to be paid.
(2) The date on or before which the balloon payment was or is
required to be paid.
(3) The amount of the balloon payment, or if its exact amount
is unknown a good faith estimate of the amount thereof, including
unpaid principal, interest, and any other charges (assuming payment
in full of all scheduled installments coming due between the date
of the notice and the date when the balloon payment is due).
(4) A description of the trustor's right, if any, to
refinance the balloon payment, including a summary of the actual
terms of the refinancing or an estimate or approximation thereof,
to the extent known.
This note is subject to SECTION 2966 of the Civil Code, which
provides that the holder of this note shall give written notice to
the trustor, or his successor in interest, of prescribed
information at least 60 and not more than 150 days before any
balloon payment is due.
*If the trustor shall sell, convey or alienate said property,
or any part thereof, or any interest therein or shall be divested
of his title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option to declare any indebtedness or obligations
secured hereby, immediately due and payable irrespective of the
maturity date specified in any note evidencing the same.
Each payment shall be credited first on interest then due and
the remainder on principal.
Should default be made in payment of any installment when due,
the whole sum of principal and interest shall become immediately
due at the option of the holder of this note, without notice;
principal and interest payable in lawful money of the United
States. If action be instituted on this note, maker shall pay such
sum as the Court may fix as attorney's fees. This note is secured
by a DEED OF TRUST OF EVEN DATE. LATE CHARGE: SUBJECT TO ANY
NOTICE REQUIRED BY LAW. MAKER AGREES TO PAY A LATE CHARGE OF 6% OF
THE OVERDUE INSTALLMENT OR $5.00 WHICHEVER IS GREATER, IF PAYMENT
IS NOT MADE WITHIN 10 DAYS OF ITS DUE DATE.
1. Cash Price . . . . . . . . . . . . . .$ $ 22,000.00
2. Less: Cash Down Payment . . . . . . .$
3. Other. . . . . . . . . . . . . . . . .
4. Total Down Payment . . . . . . . . . .$ $ 34,200.00
5. Unpaid Balance of Cash Price . . . . . $193,800.00
6. Other Charges. . . . . . . . . . . . . $
7. Amount Financed (5 + 6). . . . . . . . $193,800.00
8. FINANCE CHARGE . . . . . . . . . . . . $ 31,008.00
9. Total of Payments. . . . . . . . . . . $224,808.00
10. Deferred Payment Price (1 + 8) . . . . $259,008.00
11. ANNUAL PERCENTAGE RATE . . . . . . . . $ 5.33%
NOTICE TO BUYER
YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR AGREEMENT OF
SALE BY NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE SEVENTH DAY
FOLLOWING THE SIGNING OF THE CONTRACT OR AGREEMENT.
CAUTION TO BUYER
IF YOU DO NOT HAVE THE FUNDS TO PAY THE BALLOON PAYMENT WHEN
DUE, IT MAY BE NECESSARY FOR YOU TO OBTAIN A NEW LOAN AGAINST YOUR
PROPERTY FOR THIS PURPOSE. NEITHER THE SELLER NOR THE LENDER IS
UNDER ANY OBLIGATION TO REFINANCE THE PROPERTY.
I acknowledge receipt of a
copy of this note and of the
Deed of Trust securing
payment of this note. Dated Executed
DUERR REVOCABLE FAMILY TRUST
DATED 10-14-87
BY: /s/ T.E. DUERR
T.E. DUERR, Trustee
BY: /s/ P.A. DUERR
P.A. DUERR, Trustee MAKER
Order No.
Escrow No. 719847-LJ
Loan No.
WHEN RECORDED MAIL TO:
SHF Acquisition Corporation
14813 Jackson Road
Rancho Murieta, CA 95683
DEED OF TRUST WITH ASSIGNMENT OF RENTS
(This Deed of Trust contains an acceleration clause)
This DEED OF TRUST, made July 22, 1992, between T.E.
DUERR and P.A. DUERR, Trustees of the DUERR FAMILY REVOCABLE TRUST
DATED OCTOBER 14, 1987, herein called TRUSTOR, whose address is
11087 Roanoke River Court, Rancho Cordova, California 95670,
FOUNDERS TITLE COMPANY of Sacramento County, a California
corporation, herein called TRUSTEE, and SHF ACQUISITION
CORPORATION, a Nevada Corporation, herein called BENEFICIARY.
WITNESSETH: That Trustor grants to Trustee in Trust, with Power
of sale, that property in the unincorporated area.
County of Sacramento, State of California, described as:
Lot No. 3147, as shown upon that certain "Plat of Rancho Murieta
Unit No. 6, filed in the office of the County Recorder of
Sacramento County, State of California, on January 9, 1991, in Book
213 of Maps, Map No. 6.
NOTICE TO BUYER: YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR
AGREEMENT OF SALE BY NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE
SEVENTH DAY FOLLOWING THE SIGNING OF THE CONTRACT OR AGREEMENT.
If the trustor shall sell, convey or alienate said property, or any
part thereof, or any interest therein or shall be divested of his
title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option, except as prohibited by law, to declare any
indebtedness or obligations secured hereby, immediately due and
payable irrespective of the maturity date specified in any note
evidencing the same.
TOGETHER WITH rents, issues and profits thereof, SUBJECT, HOWEVER,
to the right, power and authority given to and conferred upon
Beneficiary by paragraph (10) of the provisions incorporated herein
by reference to collect and apply such rents, issues and profits.
For the Purpose of Securing: 1. Performance of each agreement of
Trustor incorporated by reference or contained herein. 2. Payment
of the indebtedness evidenced by one promissory note of even date
herewith, and any extension or renewal thereof, in the principal
sum of 193,800.00 executed by Trustor in favor of Beneficiary or
order. 3. Payment of such further sums as the then record owner
of said property hereafter may borrow from Beneficiary, when
evidenced by another note (or notes) reciting it is so secured.
To Protect the Security of this Deed of Trust. Trustor Agrees: By
the execution and delivery of this Deed of Trust and the note
secured hereby, that provisions (1) to (14), inclusive, of the
fictitious deed of trust recorded in Santa Barbara County and
Sonoma County October 18, 1961, and in other counties October 23,
1961, in the book and at the page of Official Records in the office
of the county recorder of the county where said property located,
noted below opposite the name of such county, viz:
<TABLE>
<CAPTION>
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
<S> <C> <C> <S> <C> <C> <S> <C> <C> <S> <C> <C>
Alameda 435 684 Kings 792 833 Placer 895 301 Sierra 29 335
Alpine 1 250 Lake 362 39 Plumas 151 5 Siskiyou 468 181
Amador 104 348 Lansen 171 471 Riverside 3005 523 Solano 1105 182
Butte 1145 1 Los Angeles 12055 899 Sacramento 4331 62 Sonoma 1851 689
Calaveras 145 152 Madera 810 170 San Benito 271 383 Stanislaus 1715 456
Colusa 296 617 Marin 1508 339 San Bernardino 5567 61 Sutter 572 297
Contra Costa 3978 47 Mariposa 77 292 San Francisco A332 905 Tehama 401 289
Del Norte 78 414 Mendocino 579 530 San Joaquin 2470 311 Trinity 93 366
El Dorado 568 456 Merced 1547 538 San Luis Obispo 1151 12 Tulare 2294 275
Fresno 4626 572 Modoc 184 851 San Mateo 4078 420 Tuelumne 135 47
Glenn 422 184 Mono 52 429 Santa Barbara 1878 860 Ventura 2062 386
Humboldt 657 527 Monterey 2194 538 Santa Clara 5336 341 Yolo 653 245
Imperial 1091 501 Napa 639 86 Santa Cruz 1431 494 Yuba 334 486
Inyo 147 598 Nevada 305 320 Shasta 684 528
Kern 3427 60 Orange 5889 611 San Diego Series 2 Book 1961, Page 183887
</TABLE>
(which provisions, identical in all counties, are printed on the
reverse hereof) hereby are adopted and incorporated herein and made
a part hereof as fully as though set forth herein at length; that
he will observe and perform said provisions; and that the
references to property, obligations, and parties in said provisions
shall be construed to refer to the property, obligations, and
parties set forth in this Deed of Trust.
The undersigned Trustor requests that a copy of any Notice of
Default and of any Notice of Sale hereunder be mailed to him at his
address hereinbefore set forth.
STATE OF CALIFORNIA ) Signature of Trustor
) SS.
COUNTY OF SACRAMENTO )
DUERR FAMILY REVOCABLE TRUST
DATED 10-14-87
On July 24, 1992 before me, the
undersigned, a Notary Public in BY:/s/ T.E. DUERR
and for said State, personally T.E. DUERR, Trustee
appeared
T.E. Duerr and P.A. Duerr, BY:/s/ P.A. DUERR
Trustees P.A. DUERR, Trustee
, proved upon
satisfactory evidence OR
personally known to me to be the
person(s) whose name(s) are
subscribed to the within
instrument and acknowledged that
they executed the same.
WITNESS my hand and official seal.
Signature /s/ L.E. JAMES
L.E. JAMES
Name (Typed or Printed) (This area for official
notary seal)
The following is a copy of provisions (1) to (14), inclusive, of the
fictitious deed of trust, recorded in each county in California, as stated
in the foregoing Deed of Trust and incorporated by reference in said Deed of
Trust as being a part thereof as if set forth at length therein.
To Protect the Security of This Deed of Trust, Trustor Agrees:
(1) To keep said property in good condition and repair, not to
remove or demolish any building thereon, to complete or restore promptly and
in good and workmanlike manner any building which may be constructed, damages
or destroyed thereon and to pay when due all claims for labor performed and
materials furnished therefor, to comply with all laws affecting said property
or requiring any alterations or improvements to be made thereon, not to
commit or permit waste thereon, not to commit, suffer or permit any act upon
said property in violation of law, to cultivate, irrigate, fertilize,
fumigate, prune and do all other acts which from the character of use of said
property may be reasonably necessary, the specific enumerations herein not
excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire
insurance satisfactory to and with loss payable to Beneficiary. The
amount collected under any fire or other insurance policy may be applied
by Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary the entire amount
so collected or any part thereof may be released to Trustor. Such
application or release shall not cure or waive any default hereunder or
invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting
to affect the security hereof or the rights or powers of Beneficiary as
Trustee, and to pay all costs and expenses, including cost of evidence of
title and attorney's fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear, and in any suit
brought by Beneficiary to foreclose this Deed.
(4) To pay at least ten days before delinquency all taxes and
assessments affecting said property, including assessments on appurtenant
water stock, when due, all encumbrances, charges and liens, with
interest, on said property or any part thereof, which appear to be prior
or superior hereto, all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein
provided, then Beneficiary or Trustee, but without obligation so to do
and without notice to or demand upon Trustor and without releasing
Trustor from any obligation hereof, may make or do the same in such
manner and to such extent as either may deem necessary to protect the
security hereof. Beneficiary or Trustee being authorized to enter upon
said property for such purposes, appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee, pay, purchase, contest or compromise
any encumbrance, charge or lien which in the judgment of either appears
to be prior or superior hereto, and, in exercising any such powers, pay
necessary expenses, employ counsel and pay his reasonable fees.
(5) To pay immediately and without demand all sums to so expended
by Beneficiary or Trustee, with interest from date of expenditure at the
amount allowed by law in effect at the date hereof, and to pay for any
statement provided for by law in effect at the date hereof regarding the
obligation secured hereby any amount demanded by the Beneficiary not to
exceed the maximum allowed by law at the time when said statement is
demanded.
(6) That any award of damages in connection with any condemnation
for public use of or injury to said property or any part thereof is
hereby assigned and shall e paid to Beneficiary who may apply or release
such moneys received by him in the same manner and with the same effect
as above provided for disposition of proceeds of fire or other insurance.
(7) That by accepting payment of any sum secured hereby after the
due date. Beneficiary does not waive his right either to require prompt
payment when due of all other sums so secured or to declare default for
failure to so pay.
(8) That at any time or from time to time, without liability
therefor and without notice, upon written request of Beneficiary and
presentation of this Deed and said note for endorsement, and without
affecting the personal liability of any person for payment of the
indebtedness secured hereby, Trustee may reconvey any part of said
property, consent to the making of any map or plat thereof, join in
granting any easement thereon, or join in any extension agreement or any
agreement subordinating the lien or charge hereof.
(9) That upon written request of Beneficiary stating that all
sums secured hereby have been paid, and upon surrender of this Deed and
said note to Trustee for cancellation and retention and upon payment of
its fees, Trustee shall reconvey, without warranty, the property then
held hereunder. The recitals in such reconveyance of any matters or
facts shall be conclusive proof of the truthfulness thereof. The grantee
in such reconveyance may be described as the person or persons legally
entitled thereto. Five years after issuance of such full reconveyance,
Trustee may destroy said note and this Deed of (unless directed in such
request to retain them).
(10) That as additional security, Trustor hereby gives to and
confers upon Beneficiary the right, power and authority, during the
continuance of these Trusts, to collect the rents, issues and profits of
said property, reserving unto Trustor the right, prior to any default by
Trustor in payment of any indebtedness secured hereby or in performance
of any agreement hereunder, to collect and retain such rents, issues and
profits as they become due and payable. Upon any such default,
Beneficiary may at any time without notice, either in person, by agent,
or by a receiver to be appointed by a court, and without regard to the
adequacy of any security for the indebtedness hereby secured, enter upon
and take possession of said property or any part thereof, in his own name
sue for or otherwise collect such rents, issues and profits, including
those past due and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorney's fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may
determine. The entering upon and taking possession of said property, the
collection of such rents, issues and profits and the application thereof
as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness
secured hereby or in performance of any agreement hereunder, Beneficiary
may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale
and of written notice of default and of election to cause to be sold said
property, which notice Trustee shall cause to be filed for record.
Beneficiary also shall deposit with Trustee this Deed, said note and all
documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law
following the recordation of said notice of default, and notice of sale
having been given as then required by law, Trustee, without demand on
Trustor, shall sell said property at the time and place fixed by it in
said notice of sale, either as a whole or in separate parcels, and in
such order as it may determine, at public auction to the highest bidder
for cash in lawful money of the United States, payable at time of sale.
Trustee may postpone sale of all or any portion of said property by
public announcement of such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such
purchaser its deed conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of
any matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Trustor, Trustee, or Beneficiary as
hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of
this Trust, including cost of evidence of title in connection with sale,
Trustee shall apply the proceeds of sale to payment of all sums expended
under the terms hereof, not then repaid, with accrued interest at the
amount allowed by law in effect at the date hereof, all other sums then
secured hereby, and the remainder, if any, to the person or persons
legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any
indebtedness secured hereby, may from time to time, by instrument in
writing, substitute a successor or successors to any Trustee named herein
or acting hereunder, which instrument, executed by the Beneficiary and
duly acknowledged and recorded in the office of the recorder of the
county or counties where sold property is situated, shall be conclusive
proof of proper substitution of such successor Trustee or Trustees, who
shall, without conveyance from the Trustee predecessor, succeed to all
its title, estate, rights, powers and duties. Said instrument must
contain the name of the original Trustor, Trustee and Beneficiary
hereunder, the book and page where this Deed is recorded and the name and
address of the new Trustee.
(13) That this Deed applies to, inures to the benefit of, and
binds all parties hereto, their heirs, legatees, devisees,
administrators, executors, successors and assigns. The term Beneficiary
shall mean the owner and holder, including pledgees, of the note secured
hereby, whether or not named as Beneficiary herein. In this Deed,
whenever the context to requires, the masculine gender includes the
feminine and or neuter, and the singular number includes the plural.
(14) That Trustee accepts this Trust when this Deed, duly executed
and acknowledged, is made a public record as provided by law Trustee is
not obligated to notify any party hereto of pending sale under any other
Deed of Trust or of any action or proceeding in which Trustor,
Beneficiary or Trustee shall be a party unless brought by Trustee.
REQUEST FOR FULL CONVEYANCE
To be used only when note has been paid
To FOUNDERS TITLE COMPANY, Trustee: Dated___________________
The undersigned is the legal owner and holder of all
indebtedness secured by the within Deed of Trust. All sums
secured by said Deed of Trust have been fully paid and satisfied;
and you are hereby requested and directed, on payment to you of
any sums owing to you under the terms of said Deed of Trust, to
cancel all evidences of indebtedness, secured by said Deed of
Trust, delivered to you herewith together with said Deed of
Trust, and to reconvey, without warranty, to the parties
designated by the terms of said Deed of Trust, the estate now
held by you under the same.
Mail Reconveyance to:
By
By
Do not lose or destroy this Deed of Trust OR THE NOTE which
it secures. Both must be delivered to the Trustee for
cancellation before reconveyance will be made.
Pay to the order of The Resolution Trust Corporation, as
Receiver for San Antonio Savings Association, F.A.
This endorsement is attached to and made a part of that
certain Promissory Note in the original principal amount of $-
79,200.00 dated December 7, 1994, made by Raymond L. James and
Cheryle James, husband and wife, in favor of SHF Acquisition
Corporation, a Nevada corporation.
Dated: Nov 6, 1995
SHF ACQUISITION CORPORATION,
a Nevada corporation
By: /s/ James H. Dale
Title: President
When paid, this note, if
DO NOT DESTROY THIS NOTE: secured by Deed of Trust, must
be surrendered to Trustee for
cancellation, before
reconveyance will be made
PROMISSORY NOTE
(Interest Included Until Paid)
$79,200.00 Orangevale December 7, 1994
For value received, RAYMOND L. JAMES and CHERYLE JAMES,
husband and wife as community property, promise to pay to SHF
ACQUISITION CORPORATION, a Nevada corporation, or order at 4183
Jackson Road, Rancho Murieta, California 95683, the principal sum
of Seventy-Nine Thousand Two Hundred and No/100th Dollars with
interest from date of recording on unpaid principal at the rate of
ten percent (10%) per annum; principal and interest payable as
follows: 36 equal consecutive, monthly installments of interest
only at $660.00 or more, with the first such installment due on or
before January 14, 1995 and continuing on the same day of each
month until complete and one FINAL BALLOON payment of principal and
interest due on or before December 14, 1997 in the amount of
Seventy Nine Thousand Eight Hundred and No/100 Dollars.
The holder of this note shall, not less than 60 days nor more
than 150 days before the balloon payment is due, deliver or mail by
first-class mail to the trustor, or his or her successor in
interest, at the last known address of such person a written notice
to include:
(1) A statement of the name and address of the person to whom
the balloon payment is required to be paid.
(2) The date on or before which the balloon payment was or is
required to be paid.
(3) The amount of the balloon payment, or if its exact amount
is unknown a good faith estimate of the amount thereof, including
unpaid principal, interest, and any other charges (assuming payment
in full of all scheduled installments coming due between the date
of the notice and the date when the balloon payment is due).
(4) A description of the trustor s right, if any, to refinance
the balloon payment, including a summary of the actual terms of the
refinancing or an estimate or approximation thereof, to the extent
known.
This note is subject to SECTION 2966 of the Civil Code, which
provides that the holder of this note shall give written notice to
the trustor, or his successor in interest, of prescribed
information at least 60 and not more than 150 days before any
balloon payment is due.
*If the trustor shall sell, convey or alienate said property,
or any part thereof, or any interest therein or shall be divested
of his title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option to declare any indebtedness or obligations
secured hereby, immediately due and payable irrespective of the
maturity date specified in any note evidencing the same.
Each payment shall be credited first on interest then due and
the remainder on principal.
Should default be made in payment of any installment when due,
the whole sum of principal and interest shall become immediately
due at the option of the holder of this note, without notice;
principal and interest payable in lawful money of the United
States. If action be instituted on this note, maker shall pay such
sum as the Court may fix as attorney s fees. This note is secured
by a DEED OF TRUST OF EVEN DATE. LATE CHARGE: SUBJECT TO ANY
NOTICE REQUIRED BY LAW. MAKER AGREES TO PAY A LATE CHARGE OF 6% OF
THE OVERDUE INSTALLMENT OR $5.00 WHICHEVER IS GREATER, IF PAYMENT
IS NOT MADE WITHIN 10 DAYS OF ITS DUE DATE.
1. Cash Price . . . . . . . . . . $ $ 99,000.00
2. Less: Cash Down Payment . . . $
3. Other. . . . . . . . . . . . .
4. Total Down Payment . . . . . . $ $ 19,800.00
5. Unpaid Balance of Cash Price . $ 79,200.00
6. Other Charges. . . . . . . . . $
7. Amount Financed (5 + 6). . . . $ 79,200.00
8. FINANCE CHARGE . . . . . . . . $ 23,760.00
9. Total of Payments . . . . . . $102,960.00
10. Deferred Payment Price (1 + 8) $122,760.00
11. ANNUAL PERCENTAGE RATE . . . . $ 10 %
NOTICE TO BUYER
YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR AGREEMENT OF SALE BY
NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE SEVENTH DAY FOLLOWING
THE SIGNING OF THE CONTRACT OR AGREEMENT.
CAUTION TO BUYER
IF YOU DO NOT HAVE THE FUNDS TO PAY THE BALLOON PAYMENT WHEN DUE,
IT MAY BE NECESSARY FOR YOU TO OBTAIN A NEW LOAN AGAINST YOUR
PROPERTY FOR THIS PURPOSE. NEITHER THE SELLER NOR THE LENDER IS
UNDER ANY OBLIGATION TO REFINANCE THE PROPERTY.
I acknowledge receipt of a
copy of this note and of the
Deed of Trust securing
payment of this note. Dated Executed December 9, 1994
/s/ Raymond L. James
/s/ Cheryle James
MAKER
Order No.
Escrow No. 719855-KJ
Loan No.
WHEN RECORDED MAIL TO:
SHF Acquisition Corporation
P.O. Box 1410
Davis, CA 95617
DEED OF TRUST WITH ASSIGNMENT OF RENTS
(This Deed of Trust contains an acceleration clause)
This DEED OF TRUST, made the 7th day of December, 1994, between
RAYMOND L. JAMES and CHERYLE JAMES, husband and wife, as community
property, herein called TRUSTOR, whose address is 3050 Fite Circle
#112, Sacramento, California 95827, FOUNDERS TITLE COMPANY of
Sacramento County, a California corporation, herein called TRUSTEE,
and SHF ACQUISITION CORPORATION, a Nevada Corporation, herein
called BENEFICIARY.
WITNESSETH: That Trustor grants to Trustee in Trust, with Power
of sale, that property in the unincorporated area.
County of Sacramento, State of California, described as:
Lot No. 3155, as shown upon that certain "Plat of Rancho Murieta
Unit No. 6, filed in the office of the County Recorder of
Sacramento County, State of California, on January 9, 1991, in Book
213 of Maps, Map No. 6.
NOTICE TO BUYER: YOU HAVE THE OPTION TO CANCEL YOUR CONTRACT OR
AGREEMENT OF SALE BY NOTICE TO THE SELLER UNTIL MIDNIGHT OF THE
SEVENTH DAY FOLLOWING THE SIGNING OF THE CONTRACT OR AGREEMENT.
If the trustor shall sell, convey or alienate said property, or any
part thereof, or any interest therein or shall be divested of his
title or any interest therein in any manner or way, whether
voluntarily or involuntarily, without the written consent of the
beneficiary being first had and obtained beneficiary shall have the
right, at its option, except as prohibited by law, to declare any
indebtedness or obligations secured hereby, immediately due and
payable irrespective of the maturity date specified in any note
evidencing the same.
TOGETHER WITH rents, issues and profits thereof, SUBJECT, HOWEVER,
to the right, power and authority given to and conferred upon
Beneficiary by paragraph (10) of the provisions incorporated herein
by reference to collect and apply such rents, issues and profits.
For the Purpose of Securing: 1. Performance of each agreement of
Trustor incorporated by reference or contained herein. 2. Payment
of the indebtedness evidenced by one promissory note of even date
herewith, and any extension or renewal thereof, in the principal
sum of $79,200.00 executed by Trustor in favor of Beneficiary or
order. 3. Payment of such further sums as the then record owner
of said property hereafter may borrow from Beneficiary, when
evidenced by another note (or notes) reciting it is so secured.
To Protect the Security of this Deed of Trust. Trustor Agrees: By
the execution and delivery of this Deed of Trust and the note
secured hereby, that provisions (1) to (14), inclusive, of the
fictitious deed of trust recorded in Santa Barbara County and
Sonoma County October 18, 1961, and in other counties October 23,
1961, in the book and at the page of Official Records in the office
of the county recorder of the county where said property located,
noted below opposite the name of such county, viz:
<TABLE>
<CAPTION>
COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE COUNTY BOOK PAGE
<S> <C> <C> <S> <C> <C> <S> <C> <C> <S> <C> <C>
Alameda 435 684 Kings 792 833 Placer 895 301 Sierra 29 335
Alpine 1 250 Lake 362 39 Plumas 151 5 Siskiyou 468 181
Amador 104 348 Lansen 171 471 Riverside 3005 523 Solano 1105 182
Butte 1145 1 Los Angeles 12055 899 Sacramento 4331 62 Sonoma 1851 689
Calaveras 145 152 Madera 810 170 San Benito 271 383 Stanislaus 1715 456
Colusa 296 617 Marin 1508 339 San Bernardino 5567 61 Sutter 572 297
Contra Costa 3978 47 Mariposa 77 292 San Francisco A332 905 Tehama 401 289
Del Norte 78 414 Mendocino 579 530 San Joaquin 2470 311 Trinity 93 366
El Dorado 568 456 Merced 1547 538 San Luis Obispo 1151 12 Tulare 2294 275
Fresno 4626 572 Modoc 184 851 San Mateo 4078 420 Tuelumne 135 47
Glenn 422 184 Mono 52 429 Santa Barbara 1878 860 Ventura 2062 386
Humboldt 657 527 Monterey 2194 538 Santa Clara 5336 341 Yolo 653 245
Imperial 1091 501 Napa 639 86 Santa Cruz 1431 494 Yuba 334 486
Inyo 147 598 Nevada 305 320 Shasta 684 528
Kern 3427 60 Orange 5889 611 San Diego Series 2 Book 1961, Page 183887
</TABLE>
(which provisions, identical in all counties, are printed on the
reverse hereof) hereby are adopted and incorporated herein and made
a part hereof as fully as though set forth herein at length; that
he will observe and perform said provisions; and that the
references to property, obligations, and parties in said provisions
shall be construed to refer to the property, obligations, and
parties set forth in this Deed of Trust.
The undersigned Trustor requests that a copy of any Notice of
Default and of any Notice of Sale hereunder be mailed to him at his
address hereinbefore set forth.
STATE OF CALIFORNIA )
) SS. Signature of Trustor
COUNTY OF ) /s/ RAYMOND L. JAMES
RAYMOND L. JAMES
On before me, the
undersigned, a Notary Public /s/ CHERYLE JAMES
in and for said State, personally CHERYLE JAMES
appeared
, proved upon
satisfactory evidence OR
personally known to me
to be the person(s) whose
name(s) subscribed to the
within instrument and
acknowledged that
executed the same.
WITNESS my hand and official seal.
Signature
Name (Typed or Printed) (This area for official
notary seal)
The following is a copy of provisions (1) to (14), inclusive, of the
fictitious deed of trust, recorded in each county in California, as
stated in the foregoing Deed of Trust and incorporated by reference in
said Deed of Trust as being a part thereof as if set forth at length
therein.
To Protect the Security of This Deed of Trust, Trustor Agrees:
(1) To keep said property in good condition and repair, not to remove
or demolish any building thereon, to complete or restore promptly and in
good and workmanlike manner any building which may be constructed,
damages or destroyed thereon and to pay when due all claims for labor
performed and materials furnished therefor, to comply with all laws
affecting said property or requiring any alterations or improvements to
be made thereon, not to commit or permit waste thereon, not to commit,
suffer or permit any act upon said property in violation of law, to
cultivate, irrigate, fertilize, fumigate, prune and do all other acts
which from the character of use of said property may be reasonably
necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary fire insurance
satisfactory to and with loss payable to Beneficiary. The amount
collected under any fire or other insurance policy may be applied by
Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary the entire amount
so collected or any part thereof may be released to Trustor. Such
application or release shall not cure or waive any default hereunder or
invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to
affect the security hereof or the rights or powers of Beneficiary as
Trustee, and to pay all costs and expenses, including cost of evidence of
title and attorney s fees in a reasonable sum, in any such action or
proceeding in which Beneficiary or Trustee may appear, and in any suit
brought by Beneficiary to foreclose this Deed.
(4) To pay at least ten days before delinquency all taxes and
assessments affecting said property, including assessments on appurtenant
water stock, when due, all encumbrances, charges and liens, with
interest, on said property or any part thereof, which appear to be prior
or superior hereto, all costs, fees and expenses of this Trust.
Should Trustor fail to make any payment or to do any act as herein
provided, then Beneficiary or Trustee, but without obligation so to do
and without notice to or demand upon Trustor and without releasing
Trustor from any obligation hereof, may make or do the same in such
manner and to such extent as either may deem necessary to protect the
security hereof. Beneficiary or Trustee being authorized to enter upon
said property for such purposes, appear in and defend any action or
proceeding purporting to affect the security hereof or the rights or
powers of Beneficiary or Trustee, pay, purchase, contest or compromise
any encumbrance, charge or lien which in the judgment of either appears
to be prior or superior hereto, and, in exercising any such powers, pay
necessary expenses, employ counsel and pay his reasonable fees.
(5) To pay immediately and without demand all sums to so expended by
Beneficiary or Trustee, with interest from date of expenditure at the
amount allowed by law in effect at the date hereof, and to pay for any
statement provided for by law in effect at the date hereof regarding the
obligation secured hereby any amount demanded by the Beneficiary not to
exceed the maximum allowed by law at the time when said statement is
demanded.
(6) That any award of damages in connection with any condemnation for
public use of or injury to said property or any part thereof is hereby
assigned and shall e paid to Beneficiary who may apply or release such
moneys received by him in the same manner and with the same effect as
above provided for disposition of proceeds of fire or other insurance.
(7) That by accepting payment of any sum secured hereby after the due
date. Beneficiary does not waive his right either to require prompt
payment when due of all other sums so secured or to declare default for
failure to so pay.
(8) That at any time or from time to time, without liability therefor
and without notice, upon written request of Beneficiary and presentation
of this Deed and said note for endorsement, and without affecting the
personal liability of any person for payment of the indebtedness secured
hereby, Trustee may reconvey any part of said property, consent to the
making of any map or plat thereof, join in granting any easement thereon,
or join in any extension agreement or any agreement subordinating the
lien or charge hereof.
(9) That upon written request of Beneficiary stating that all sums
secured hereby have been paid, and upon surrender of this Deed and said
note to Trustee for cancellation and retention and upon payment of its
fees, Trustee shall reconvey, without warranty, the property then held
hereunder. The recitals in such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof. The grantee in
such reconveyance may be described as the person or persons legally
entitled thereto. Five years after issuance of such full reconveyance,
Trustee may destroy said note and this Deed of (unless directed in such
request to retain them).
(10) That as additional security, Trustor hereby gives to and confers
upon Beneficiary the right, power and authority, during the continuance
of these Trusts, to collect the rents, issues and profits of said
property, reserving unto Trustor the right, prior to any default by
Trustor in payment of any indebtedness secured hereby or in performance
of any agreement hereunder, to collect and retain such rents, issues and
profits as they become due and payable. Upon any such default,
Beneficiary may at any time without notice, either in person, by agent,
or by a receiver to be appointed by a court, and without regard to the
adequacy of any security for the indebtedness hereby secured, enter upon
and take possession of said property or any part thereof, in his own name
sue for or otherwise collect such rents, issues and profits, including
those past due and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorney s fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may
determine. The entering upon and taking possession of said property, the
collection of such rents, issues and profits and the application thereof
as aforesaid, shall not cure or waive any default or notice of default
hereunder or invalidate any act done pursuant to such notice.
(11) That upon default by Trustor in payment of any indebtedness
secured hereby or in performance of any agreement hereunder, Beneficiary
may declare all sums secured hereby immediately due and payable by
delivery to Trustee of written declaration of default and demand for sale
and of written notice of default and of election to cause to be sold said
property, which notice Trustee shall cause to be filed for record.
Beneficiary also shall deposit with Trustee this Deed, said note and all
documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following
the recordation of said notice of default, and notice of sale having been
given as then required by law, Trustee, without demand on Trustor, shall
sell said property at the time and place fixed by it in said notice of
sale, either as a whole or in separate parcels, and in such order as it
may determine, at public auction to the highest bidder for cash in lawful
money of the United States, payable at time of sale. Trustee may
postpone sale of all or any portion of said property by public
announcement of such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time
fixed by the preceding postponement. Trustee shall deliver to such
purchaser its deed conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of
any matters or facts shall be conclusive proof of the truthfulness
thereof. Any person, including Trustor, Trustee, or Beneficiary as
hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this
Trust, including cost of evidence of title in connection with sale,
Trustee shall apply the proceeds of sale to payment of all sums expended
under the terms hereof, not then repaid, with accrued interest at the
amount allowed by law in effect at the date hereof, all other sums then
secured hereby, and the remainder, if any, to the person or persons
legally entitled thereto.
(12) Beneficiary, or any successor in ownership of any indebtedness
secured hereby, may from time to time, by instrument in writing,
substitute a successor or successors to any Trustee named herein or
acting hereunder, which instrument, executed by the Beneficiary and duly
acknowledged and recorded in the office of the recorder of the county or
counties where sold property is situated, shall be conclusive proof of
proper substitution of such successor Trustee or Trustees, who shall,
without conveyance from the Trustee predecessor, succeed to all its
title, estate, rights, powers and duties. Said instrument must contain
the name of the original Trustor, Trustee and Beneficiary hereunder, the
book and page where this Deed is recorded and the name and address of the
new Trustee.
(13) That this Deed applies to, inures to the benefit of, and binds
all parties hereto, their heirs, legatees, devisees, administrators,
executors, successors and assigns. The term Beneficiary shall mean the
owner and holder, including pledgees, of the note secured hereby, whether
or not named as Beneficiary herein. In this Deed, whenever the context
to requires, the masculine gender includes the feminine and or neuter,
and the singular number includes the plural.
(14) That Trustee accepts this Trust when this Deed, duly executed
and acknowledged, is made a public record as provided by law Trustee is
not obligated to notify any party hereto of pending sale under any other
Deed of Trust or of any action or proceeding in which Trustor,
Beneficiary or Trustee shall be a party unless brought by Trustee.
REQUEST FOR FULL CONVEYANCE
To be used only when note has been paid
To FOUNDERS TITLE COMPANY, Trustee: Dated ________________
The undersigned is the legal owner and holder of all
indebtedness secured by the within Deed of Trust. All sums secured
by said Deed of Trust have been fully paid and satisfied; and you
are hereby requested and directed, on payment to you of any sums
owing to you under the terms of said Deed of Trust, to cancel all
evidences of indebtedness, secured by said Deed of Trust, delivered
to you herewith together with said Deed of Trust, and to reconvey,
without warranty, to the parties designated by the terms of said
Deed of Trust, the estate now held by you under the same.
Mail Reconveyance to:
By
By
Do not lose or destroy this Deed of Trust OR THE NOTE which it
secures. Both must be delivered to the Trustee for cancellation
before reconveyance will be made.
STATE OF CALIFORNIA
}ss.
COUNTY OF SACRAMENTO
On December 9, 1994, before me, the undersigned, a Notary
Public in and for said State, personally appeared RAYMOND L. JAMES
and CHERYLE JAMES personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized
capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
Witness my hand and official seal.
Signature /s/ L.E. JAMES THIS AREA FOR NOTARY STAMP
OR SEAL
Name L.E. JAMES
(typed or printed)
DO NOT DESTROY THIS NOTE: When paid, this note and the Deed of
Trust must be surrendered to GLENN COUNTY TITLE COMPANY with
request for reconveyance.
INSTALLMENT NOTE
(INTEREST EXTRA)
(This note contains an acceleration clause)
$243,430.00 Willows, California January 17, 1996
IN INSTALLMENTS AN AT THE TIMES HEREINAFTER STATED, FOR VALUE
RECEIVED MUKHTAR AHMAD AND NAZRA P. AHMAD, husband and wife as
joint tenants PROMISE TO PAY TO:
WILLOWS RANCH GROUP, a California partnership, consisting of SHF
ACQUISITION GROUP, a Nevada corporation, as Partner and 500 FIRST
STREET, A California general partnership, as Partner OR ORDER,
AT 4045 So. Spencer Street, Suite 206, Las Vegas NV 89119 THE
PRINCIPAL SUM OF TWO HUNDRED FORTY THREE THOUSAND FOUR HUNDRED
THIRTY --- (243,430.00 --DOLLARS, WITH INTEREST FROM FEBRUARY 1,
1996 ON THE AMOUNTS OF PRINCIPAL REMAINING FROM TIME TO TIME
UNPAID, UNTIL SAID PRINCIPAL SUM IS PAID, AT THE RATE OF EIGHT
AND ONE-QUARTER (8.25%) PER CENT, PER ANNUM, PAYABLE WITH
PRINCIPAL. SAID PRINCIPAL SUM DUE IN ANNUAL INSTALLMENTS OF
TWENTY FOUR THOUSAND THREE HUNDRED FORTY THREE DOLLARS
($24,343.00), OR MORE ON THE 1ST DAY OF EACH AND EVERY FEBRUARY,
BEGINNING ON THE FIRST DAY OF FEBRUARY 1997; AND CONTINUING UNTIL
FEBRUARY 1, 2001 WHEN THE THEN REMAINING BALANCE OF PRINCIPAL AND
ACCRUED INTEREST SHALL BE ALL DUE AND PAYABLE.
THE DEED OF TRUST SECURING THIS NOTE CONTAINS THE FOLLOWING
PROVISION: If the trustor shall sell, convey or alienage said
property, or any part thereof, or any interest therein, or shall
be divested of his title or any interest therein in any manner or
way, whether voluntarily or involuntarily, without the written
consent of the beneficiary being first had and obtained
beneficiary shall have the right, at its option, except as
prohibited by law, to declare any indebtedness or obligations
secured hereby, irrespective of the maturity date specified in
any note evidencing the same, immediately due and payable.
Each payment shall be credited first, on the interest then due;
and the remainder on the principal sum; and interest shall
thereupon cease upon the amount so credited on the said principal
sum. Should default be made in the payment of any of said
installments when due, then the whole sum of principal and
interest shall become immediately due and payable at the option
of the holder of this note. Should suit be commenced to collect
this note or any portion thereof, such sum as the Court may deem
reasonable shall be added hereto as attorney's fees. Principal
and interest payable in lawful money of the United States of
America. This note is secured by a certain DEED OF TRUST to
Glenn County Title Company, A corporation.
letter (continued)
/s/ MUKHTAR AHMAD /s/ NAZRA P. AHMAD
MUKHTAR AHMAD NAZRA P. AHMAD
By: /s/ By: /s/
HIS ATTORNEY IN FACT HER ATTORNEY IN FACT
THE PARTNERS OF THE HOLDER OF THIS NOTE, WILLOWS RANCH GROUP,
UPON ITS CREATION, HEREBY SET OUT THEIR RESPECTIVE INTEREST
WITHIN THIS NOTE AS FOLLOWS:
SHF ACQUISITION GROUP, a Nevada corporation as to an
undivided $223,743.00/ 243,430ths; and 500 FIRST STREET, a
California General Partnership as to an undivided $19,686.00/
243,300ths.
SHF ACQUISITION GROUP 500 FIRST STREET
a Nevada corporation A California General Partnership
by: /s/ James H. Dale By: /s/ William H. Maddocks
James Dale, President William H. Maddocks
by: / / By: /s/ Kenneth Wallace
Kenneth Wallace
By: /s/ Kent N. Calfee
Kent N. Calfee
Page 2 of 2 pages
LEVERAGED EQUITY MANAGEMENT, INC.
ONE MARKET - STEWART STREET TOWER - SUITE 2601
SAN FRANCISCO, CALIFORNIA (415) 284-0778
ERIC P. VON der PORTEN
MANAGING DIRECTOR
January 11, 1996
Mr. James Dale
President
SHF Acquisition Corp.
4045 South Spencer Street, Suite 206
Las Vegas, NV 89119
Dear Mr. Dale:
The purpose of this letter, if accepted by you in the manner
provided below, is to evidence the following agreements between
West Coast Properties, LLC ("WCP") , and affiliate of Leveraged
Equity Management, Inc. and SHF Acquisition Corp. ("SHF"), a
subsidiary of Dunes Hotels and Casinos, Inc.
1. OUTSIDE DATA. As used in this letter, "Outside Date" means
February 29, 1996 or other date mutually agreed, time being of
the essence.
2 PROPERTY PURCHASE. WCP is interested to acquire from SHF 20
finished single family lots in Village 6 of Rancho Murieta. The
Purchase Price shall be paid in installments of $40,000 per lot
at the closing of the property purchase plus the Success Payments
(as defined below) when each home is sold. In addition to the
Purchase Price, WCP will satisfy, at the closing the first trust
deed in the amount of approximately $2,000 per lot payable to
Rancho Murieta Association for park fees. All amounts due to SHF
under a reimbursement agreement with Rancho Murieta Community
Services District are not included in this transaction. WCP and
SHF acknowledge and agree that such proposed transactions will b
e entered into only if and when, on or before the Outside Date,
the parties are able to reach agreement, on all of the terms and
conditions to be contained in the definitive agreements
("Definitive Agreements") documenting the transactions, and WCP
and SHF are both satisfied with all their business and legal due
diligence in connection with the proposed transactions. It is
further understood that the terms of this letter of intent will
be subject to the approval of the Board of Directors of Dunes
Hotel and Casinos Inc. In the event the Board of Directors of
Dunes Hotels and Casinos Inc. approves the terms of this letter
of intent, SHF and WCP agree
Mr. James Dale
SHF Acquisition Corp.
Page 2
to use good faith efforts until the Outside Date to attempt to
reach agreement on all of the terms of the Definitive Agreements.
It is further understood that the terms of the Definitive
Agreement will be subject to the approval of the Board of
Directors of Dunes Hotels and Casinos Inc.
3. SUCCESS PAYMENTS. When each home is sold, WCP will pay to
SHF a Success Payment equal to the difference between 20 percent
of the gross sales price of the home and $40,000.
4. LOT SELECTION AND OPTION. One half of the initial 20 lots
will be fairway lots and one half will be interior lots.
Provided WCP has built and closed the sale of at least 15 homes
by June 30, 1997, WCP be entitled to exercise and option to
purchase and additional 20 lots for a total price of $45,000 per
lot plus the Success Payments.
5. LOT SALES AND LOT EXCHANGES. WCP agrees to sell finished
homes only. If any buyer identified by WCP wishes to purchase a
lot owned by SHF, WCP will receive a six percent commission from
SHF on that sale. If any buyer wishes tp [purchase a home from
WCP on a lot owned by SHF, WCP shall have the right to exchange a
comparable lot in its inventory for the subject lot. The
definitive Agreements shall include a mechanism for determining
comparability of lots.
6. DUE DILIGENCE. WCP and SHF have commenced business and legal
due diligence with respect to the proposed transactions. SHF and
WCP shall cooperate with all due diligence activities of the
respective parties.
7. REIMBURSEMENT. WCP and SHF will each cover their own legal
expenses.
8. EXCLUSIVITY. SHF agrees that until the Outside Date, neither
SHF nor any affiliate of SHF shall solicit, discuss or entertain
other offers or proposals which would replace, in whole or part,
the proposed transactions. This provision does not preclude SHF
from selling individual lots in the ordinary course of business.
9. CONFIDENTIALITY. Neither WCP or SHF shall disclose the
existence of this letter or the proposed transactions
contemplated herein, except for disclosure required by law or
disclosure to accountants, attorneys, consultants and others in
connection with the activities contemplated herein.
10. NO LIABILITY. After the Outside Date, except for the
obligations of the parties pursuant to paragraph 9 above, WCP and
SHF shall have no liability or obligations in connection with the
proposed transactions if for any reason the proposed transactions
shall have failed to close.
Mr. James Dale
SHF Acquisition Corp.
Page 3
If the foregoing is acceptable to SHF, please execute and return
a copy of this letter to the undersigned.
Sincerely,
/s/ Eric P. Von der Porten
Eric P. Von der Porten
Agreed & Accepted:
SHF Acquisition Corp.
By: /s/ James H. Dale
James H. Dale, President Date: 1/16/96
SUBSIDIARIES OF THE REGISTRANT
M & R CORPORATION ("MRC"), Delaware
M & R Investment Company, Inc. ("MRI"), Nevada
wholly owned by MRC
SHF Acquisition Corporation, Nevada
wholly owned by MRI
Southlake Acquisition Corporation, Nevada
wholly owned by MRI
CONTINENTAL CALIFORNIA CORPORATION, Delaware
wholly owned by Registrant
DUNES, INC., New Jersey
wholly owned by Registrant
Dunes Hotels and Casinos of Atlantic City, Inc., New Jersey
wholly owned by Dunes, Inc.
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<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet and consolidated statements of income (loss) on pages
pages F-2 through F-5 of the Company's annual report on Form 10-K and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
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<ALLOWANCES> 23
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<CURRENT-ASSETS> 2330
<PP&E> 5026
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<TOTAL-ASSETS> 16727
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0
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<COMMON> 3900
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