September 30, 1998
Rampart Capital Corporation, et al.
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Re: SIXTH AMENDMENT TO LOAN AGREEMENT (Sixth Amendment) dated as of September
30, 1998 by and between Southwest Bank of Texas N.A. and Rampart Capital
Corporation, et. al
Gentlemen:
This Sixth Amendment is made and entered into as of the date above between
SOUTHWEST BANK OF TEXAS N.A. ("Bank") and Borrower(hereinafter defined) to
evidence the parties' agreement to modify and amend the existing Loan Agreement,
as last amended by Fifth Amendment to Loan Agreement dated on May 1, 1998
effective as of January 1, 1998 (all capitalized terms which are defined in the
Loan Agreement shall have the same meaning herein, unless expressly modified
hereby).
Borrower has requested that the Loan Agreement be modified and the Bank has
agreed to such modifications upon the terms set forth herein. For sufficient
consideration, the parties hereby agree that the Loan Agreement is modified to
the extent required to accomplish the intent of the specific modifications of
this Sixth Amendment.
The term "Borrower" is hereby defined to include the following entities, jointly
and severally, Rampart Capital Corporation, a Texas corporation ("RCC"); Rampart
Facilities Corporation, a Texas corporation; Rampart Ventures Corporation,
L.L.C., a Texas limited liability company; Rampart Acquisition Corporation, L.
L. C., a Texas limited liability company; Rampart Properties Corporation, a
Nevada corporation; IGBAF, inc., a Texas corporation; IGBF, inc., a Texas
corporation; Ag Capital Corporation, an Oklahoma corporation; Xxxxxxxx'x, Inc.,
a Texas corporation; and BCL Enterprises, inc. a Texas corporation; provided,
however, (i) as to filings with the Bank and compliance issues under the Loan
Agreement, RCC shall remain the entity primarily responsible for all such
matters unless otherwise agreed to in writing by the Bank, and (ii) without
further approval by the Bank, IGBP, inc. and Ag Capital Corporation may be
consolidated into IGBAF, inc. Other subsidiaries of RCC maybe converted into
limited liability companies without further approval from the Bank, as along as
the transaction does not affect the Bank's lien position on the collateral.
This Sixth Amendment modifies the Loan Agreement to accomplish the following:
1. Borrower hereby agrees that the Bank may designate an independent
party to perform a collateral field audit of Borrower's assets to be done
at the expense of Borrower butnot to exceed $2,000. The audit shall be
completed by April 30, 1999 and annually thereafter. The Bank shall define
the scope of such audit which will include, at a minimum, a review of the
status of property taxes, the existence of tax liens and the adequacy of
insurance coverage for all Eligible Class A Note Receivable, Eligible Class
B Notes Receivable, Eligible Class C Notes Receivable, Status F Foreclosed
Real Estate and Status G Foreclosed Real Estate.
2. The term "Note" shall be that certain promissory note of even date
herewith from Borrower to the Bank in the face amount of $5,000,000 due and
payable on or before December 31, 1999.
3. The term "Guaranty" or "Guaranties" shall refer individually to the
respective Guaranty Agreements of Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxxxxxx,
Xxxxx Family Partnership, Ltd., X. X. Xxxxxxxxx Family Partnership Ltd. and
In source Financial Corporation, a Texas corporation or severally to more
than one such Guaranty.
4. The term "Eligible Class F & I Assets" shall mean Eligible REO
classified by Borrower as "Status F-Foreclosed R/E - Major Assets" and
"Status I-Investment and Commercial Real Estate" as defined by Borrower.
5. The Borrower will not permit its tangible net worth (on a
consolidated basis) to be less than $2,800,000 at any time after December
31, 1998. As used herein, "tangible net worth" shall mean the sum of
preferred stock (if any), par value of common stock, capital in excess of
par value of common stock, and retained earnings less treasury stock (if
any), less good will, cost in excess of net assets acquired, deferred
development costs and all other assets as are properly classified as
intangible assets.
6. The Borrower shall maintain on a consolidated basis a ratio of
Total Liabilities to Tangible Net Worth not exceeding 2.00:1.00. As used
"total Liabilities "means the sum of current liabilities plus long term
liabilities, excluding any deferred income taxes.
7. Borrower has requested and the Bank has agreed to release the
principal amount of $1,200,000 of that certain $1,700,000 Certificate of
Deposit No. 25850 in the name of Xxxxx Family Partnership, Ltd. so that
only the remaining $500,000 of the certificate of deposit shall secure the
Loan.
8. Borrower shall pay to the Bank a facilities availability fee of
THIRTY-THREE THOUSAND SEVEN HUNDRED FIFTY DOLLARS ($33,750.00).
9. Borrower shall provide the Bank with instruments reasonably
required by the Bank to evidence the extension of all liens and security
interests in favor of the Bank securing the Loan.
To the extent that the terms and provisions of the Loan Agreement require
modification to accomplish the specific terms set forth above, the parties agree
that they shall cooperate to permit advances upon the terms set forth above. To
the extent that the Bank, in its reasonable opinion, does not have adequate
information to make an Advance based upon this Sixth Amendment, the Bank shall
not be required to make an advance as to that item or items until such
information is provided to the Bank in form required by the Bank. To further
update and consolidate the reporting and covenants of Borrower set forth in
paragraphs 13 and 14 of the Loan Agreement, such paragraphs, as amended, are
attached hereto as Schedule 1 and made a part hereof for all purposes.
The representations and warranties of Borrower contained in the Loan Agreement
and the other Security instruments and otherwise made in writing by or on behalf
of the Borrower pursuant to the Loan Agreement and the other Security
instruments were true and correct when made, and are true and correct in all
material respects at and as of the time of delivery of this Sixth Amendment,
except for such changes in the facts represented and warranted which are not in
violation of the Loan Agreement, this Sixth Amendment or the other Security
instruments and those matters which were not in compliance and the Bank was
notified of same and as to those exceptions (but not to any future exceptions)
which the Bank approved as exceptions to the Loan Agreement requirements.
Previous items of non-compliance were approved and accepted by the Bank.
Borrower has performed and complied with all Loan Agreements and conditions
contained in the Loan Agreement and the Security instruments required to be
performed or complied with by Borrower prior to or at the time of delivery of
this Sixth Amendment.
There exists, and after giving effect to this Sixth Amendment will exist, no
default or Event of Default, or any condition, or act which constitutes, or with
notice or lapse of time (or both) would constitute an Event of Default under any
loan agreement, note agreement, or trust indenture to which the Borrower is a
party, including without limitation, the Loan Agreement, the Notes and the
Security instruments, to the knowledge of the parties hereto.
Nothing in this Sixth Amendment is intended to amend any of the representations
or warranties contained in the Loan Agreement.
Borrower represents that this is a commercial, business and/or investment
transaction and that the proceeds of the Notes have not and will not be used for
personal, family, household or residential purposes; that all disclosures, if
any, required by law have been received by Borrower prior to the execution
hereof; and requests that Bank rely upon this representation, and the Bank has
relied upon the representations and warranties contained in this Sixth Amendment
in agreeing to the amendments and supplements to the Loan Agreement set forth
herein.
Except as otherwise expressly provided herein, the Loan Agreement, the Security
Instruments, the Notes and the other instruments and agreements referred to
therein are not amended, modified or affected by this Sixth Amendment. Except as
expressly set forth herein, all of the terms, conditions, covenants,
representations, warranties and all other provisions of the Loan Agreement are
herein ratified and confirmed and shall remain in full force and effect.
On and after the date on which this Sixth Amendment becomes effective, the
terms, "this Loan Agreement," "hereof," "herein," "hereunder" and terms of like
import, when used herein or in the Loan Agreement shall, except where the
context otherwise requires, refer to the Loan Agreement, as amended by this
Sixth Amendment.
This Sixth Amendment may be executed in two or more counterparts, and it shall
not be necessary that the signatures of all parties hereto be contained on any
one counterpart hereof; each counterpart shall be deemed an original, but all of
which together shall constitute one and the same instrument.
It is understood between the parties hereto that Borrower shall provide Bank, at
Borrower's expense, all other reports, further agreements and instruments, title
policies, surveys, and other documentation as reasonably requested during the
term of the Notes, so as to preserve, protect and perfect, or maintain the
perfection, of all liens created by the instruments securing payment of the
Notes or other required documentation so that Bank shall have all documentation
necessary to comply with Bank's internal lending policies and that documentation
required by any applicable regulatory agency/authority.
All notices to Borrower shall be sent to the address set forth above. All
notices to Guarantors or any other liable parties shall be given to them at the
Borrower's address and also to the last home address in the files of the Bank.
Borrower and Bank agree that without the written consent of Xxxxxxx X. Xxxxx and
Xxxxx X. Xxxxxxxxx, the Borrower may not increase the maximum amount of the
Loan.
The Bank acknowledges and conditionally consents (such consent is subject to
review of actual documents submitted to the Bank at which time the Bank's final
consent will not be unreasonably withheld or delayed) to the fact that Borrower
and one or more Guarantors are entering into (a) indemnity Agreements with
respect to the Loan and Guaranties, (b) Stock Pledge Agreements with respect to
collateral for the indemnity Agreements, (c) Security Agreements with respect to
collateral for the Indemnity Agreements, (d) By Law Modifications, and (e)
Shareholder Buy/Sell Agreements; all of which will potentially result in (i) a
change in ownership percentages of Borrower, (ii) one or more Guarantors
purchasing (after an event of default which is not timely cured) the Loan and
all collateral related thereto upon the terms provided in the Loan Documents,
and (3) related undertakings. Bank agrees that the existence and substance of
the above documents (now or those documents consented to in the future by the
Bank) and arrangement do not create a default under any document pertaining to
the Loan.
The Bank hereby confirms that the Bank has returned the Guaranty Agreement of
Xxxx Xxxxx given in connection with the original transaction involving this Loan
and that Xxxx Xxxxx is no longer a Guarantor of this Loan.
NOTICE TO OBLIGERS: THIS DOCUMENT AND ALL OTHER DOCUMENTS RELATING TO THIS LOAN
CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES TO THIS LOAN. THE TERM "PARTIES" INCLUDES THE
UNDERSIGNED PERSONS AND ENTITIES. THE TERM "LOAN" INCLUDES THIS AGREEMENT AND
THE DOCUMENTS REFERENCED HEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Sixth Amendment to be
executed on the date first set forth above but in all respects effective as of
September 30, 1998.
BORROWER:
RAMPART CAPITAL CORPORATION
BY: /S/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx
President
RAMPART FACILITIES CORPORATION
BY: /S/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
RAMPART VENTURES CORPORATION, L.L.C.,
BY /S/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, Managing Member
RAMPART ACQUISITION CORPORATION, L.L.C.
BY: /S/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, Managing Member
RAMPART PROPERTIES CORPORATION
BY: /S/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
IGBAF, INC.
BY: /S/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
IGBF, INC.
BY: /S/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
AG CAPITAL CORPORATION
BY: /S/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
XXXXXXXX'X INC.
BY: /S/Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
BCL ENTERPRISES. INC.
BY: /S/Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
BANK:
SOUTHWEST BANK OF TEXAS N.A.
BY: /S/Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, Vice President
ATTACHMENT: SCHEDULE I - Paragraphs 13 and 14 of the Loan Agreement
SCHEDULE I
to Sixth Amendment to Loan Agreement
Restatement of Paragraphs 13 and 14 (after Sixth Amendment):
13. Without request by Bank, Borrower agrees to furnish, or cause to be
furnished, Bank with true, correct and complete copies of the following as
indicated, until the Notes are paid in full and the Bank's commitment to lend
under the Line of Credit Note is terminated:
a. promptly after becoming available and in any event within thirty (30) days
after the end of each month, Borrower's financial statements in comparable
form as previously furnished to Bank, consisting of at least (i) the
balance sheet of Borrower as of the end of such year prepared on a cost
basis, (ii) the statement of profit and loss of Borrower for such year
prepared on a cash basis, and (iii) the statement of reconciliation of
capital accounts of Borrower for such year; certified by the principal
financial officer of Borrower to be true and correct and fairly reflect
Borrower's financial condition and operations;
b within thirty (30) days after the filing of same, copies of the federal
income tax return of Borrower;
c. as soon as available and in any event within thirty (30) days after the end
of each calendar month, a Borrowing Base Certificate, substantially in the
form as previously approved by the Bank, calculating the amount of the
Borrowing Base;
d. as soon as available and in any event within thirty (30) days after the end
of each calendar month, a full and complete list of all Eligible Notes
Receivable and all liens securing same which are owned by Borrower and
pledged to Bank under any of the Collateral Assignments; such list shall be
in the form and containing information of a type and scope as currently
delivered to Bank in connection with the Prior Collateral Assignment unless
and until Bank requests additional information;
e. such other information regarding the business and affairs and financial
condition of Borrower, and the Guarantors, as Bank may reasonably request;
f. a monthly officer's certificate of Borrower that Borrower has paid and
discharged all taxes, assessments and governmental charges or levies
imposed on Borrower or on its income or profits or on any of its property
prior to the date on which penalties or liens attach thereto; provided,
however, Borrower shall not be required to pay any. such tax, assessment,
charge, levy or claim the payment of which is being contested in good faith
and by proper proceedings; provided further, however, the parties
acknowledge and agree that it is Borrower's customary practice not to pay
real property taxes on its real estate interests unless the failure to do
so would have an immediate and material adverse effect on Borrower's
ability to continue its operations;
g. Prompt notice of all litigation and all proceedings before any governmental
or regulatory agencies against Borrower, except litigation or proceedings
not materially adversely affecting the financial condition of Borrower;
h. Prompt notice of all litigation and all proceedings before any governmental
or regulatory agencies against any Guarantor, except litigation or
proceedings not materially adversely affecting the financial condition of
such Guarantor; and
i. as soon as available and in any event within one hundred twenty (120) days
after December 31, 1996, and all calendar years thereafter, the financial
statements listed in Paragraph 1 3(a) as of the end of such calendar year
audited by a Certified Public Accountant or Firm approved by the Bank.
14. Borrower will not permit any material change to be made in the character of
its business as carried on at the date hereof;
a. Borrower shall furnish executed Deeds of Trust on any property covered by
the Collateral Assignments to which Borrower obtains title promptly after
taking such action, such that upon recording of such Deed of Trust, Bank
will have a first priority lien; provided, however, this provision shall
apply only to foreclosure (or deed in lieu thereof) against properties
which secure any Eligible Note Receivable to which Borrower has an
allocated cost of over $100,000.00;
b. Borrower agrees that 100% of the Net Purchase Price received by Borrower
from the sale, compromise or settlement of any Eligible Note Receivable and
Eligible REO shall be applied to the payment of the Notes;
c. Borrower shall maintain, or cause to be maintained, accurate books and
records pertaining to the Eligible Notes Receivable in accordance with
generally accepted practices and procedures Borrower will, upon Bank's
request, xxxx Borrower's ledger cards, books of account and other records
relating to the Eligible Notes Receivable with appropriate notations
satisfactory to Bank, disclosing that Borrower has granted to Bank a
security interest in the Eligible Notes Receivable or containing such other
designations as Bank may require. All such records shall be kept at
Borrower's address as it appears in this Loan Agreement;
d. Borrower will, promptly upon learning thereof, report to Bank all matters
materially affecting the value, enforceability or collectability of any of
the Eligible Notes Receivable such as claims or disputes asserted by any
maker as to the amount of principal or interest owing on such promissory
notes and/or the enforceability of the liens securing the payment thereof;
e. Borrower will promptly provide Bank with notice of any event which will
have an immediate and material adverse effect on the Borrower's ability to
conduct its business as presently conducted;
f. Borrower shall continue to be a corporation duly incorporated and existing
in good standing under the laws of the State of Texas or the State of
Oklahoma or the State of Nevada, as applicable, and continue to be duly
licensed or qualified as a foreign corporation in all jurisdictions wherein
the character of the property owned or leased by it or the nature of the
business transacted by it makes licensing or qualification necessary as a
foreign corporation;
g. Subsequent to Bank taking legal title to the Eligible Notes Receivable by
commercially reasonable means in accordance with applicable law, Bank shall
have the right to receive, endorse, assign and/or deliver in the name of
Bank or Borrower any and all checks, drafts and other instruments for the
payment of money relating to the Eligible Notes Receivable, and Borrower
hereby waives notice or presentment, protest and of non-payment of any
instrument so endorsed. Borrower further authorizes Bank to sign Borrower's
name on any verifications of Eligible Notes Receivable, to send
verifications of Eligible Notes Receivable to any party and to do all other
acts and things necessary to carry out the provisions of this Loan
Agreement. Bank and its officers, directors, agents and designees shall not
be liable for any acts of omission or commission, or for any error of
judgment or mistake of act or law by Bank after taking such legal title,
unless done maliciously or with gross negligence;
h. To the limited extent required by any regulatory authority having
jurisdiction over Bank, Borrower will furnish to Bank appraisals of the
real property held as collateral prepared in accordance with Bank's
instructions and in form and substance satisfactory to Bank, within ninety
(90) days of each request, the cost of which is to be borne solely by
Borrower;
i. Borrower will permit any officer, employee or agent of Bank to visit and
inspect its principal place of business, both interior and exterior,
examine so books ofrecord and accounts, take copies and extracts therefrom,
and discuss the affairs, finances and accounts of Borrower with Borrower's
accountants and auditors, all at such reasonable times and as often as Bank
may desire;
j. Bank shall hold the originals of all Eligible Notes Receivable in its
possession and Borrower shall take such other and further action as may be
necessary to maintain Bank's perfected security interest in the Eligible
Notes Receivable;
k. Borrower will permit any officer, agent or employee of the Bank's real
estate department to review the Eligible Class A Notes Receivable and
Eligible Class F & I Assets to assess a valuation of such collateral to
determine the Borrowing Base and to determine whether any such property
should be reclassified as Eligible Remaining Assets:
l. Borrower will not permit its tangible net worth (on a consolidated basis)
to be less than $2,800,000 at any time after December 31, 1998. As used
herein, "tangible net worth" shall mean the sum of preferred stock (if
any), par value of common stock, capital in excess of par value of common
stock, and retained earnings less treasury stock (if any), less good will,
cost in excess of net assets acquired, deferred development costs and all
other assets as are properly classified as intangible assets; and
m. Borrower shall maintain on a consolidated basis a ratio of Total
Liabilities to Tangible Net Worth not exceeding 2.00: 1.00. As used "Total
Liabilities" means the sum of current liabilities plus long term
liabilities, excluding any deferred income taxes.
