EXHIBIT B
ASSIGNMENT OF TRUSTS' ACCOUNT
THIS ASSIGNMENT OF TRUSTS' ACCOUNT ("Assignment") is entered into
this 23rd day of December, 1997 by and among CROWN HILL TRUSTS (hereinafter
referred to as "Assignor"), a group of five (5) Texas trusts (identified on
Exhibit "A" attached hereto and incorporated herein by reference for all
purposes), NATIONAL WESTERN LIFE INSURANCE COMPANY, a Colorado insurance
corporation, (hereinafter, together with its successors and assigns, referred to
as "Assignee"), and XXXXX NATIONAL BANK OF GALVESTON (hereinafter referred to as
"MNB").
R E C I T A L S
A. Assignee and THE RANCH ON POSSUM KINGDOM, L.P. ("Borrower"), a
Texas limited partnership, entered into that certain Loan Commitment dated
November 13, 1997 (the "Commitment") wherein the Assignee agreed to make a loan
evidenced by a promissory note (the "Note") from Borrower to Assignee in the
original principal amount of FIVE MILLION AND NO/100 DOLLARS ($5,000,000.00)
(the "Loan").
B. A condition of the Commitment requires Assignor to establish an
account with MNB at its principal office in Galveston, Texas in the amount of
ONE MILLION AND NO/100 DOLLARS ($1,000,000.00) and to assign said account to
Assignee as collateral for the Loan.
C. Assignor has made a loan to Borrower and will make future advances
to Borrower subject to certain terms and conditions including, but not limited
to, the receipt by Assignor of 39.2% of all distributions received by the Athens
Trust, a limited partner in Borrower. Therefore, Assignor deems it to be in its
best interest to satisfy the condition described in Section B.
NOW, THEREFORE, for and in consideration of the Loan from Assignee
to Borrower, the benefits accruing to Assignee and Assignor, the premises
herein, and other good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged, Assignee and Assignor hereby agree as follows:
1. RECITALS. The foregoing recitals are true and correct and are
incorporated herein by reference and agreed upon by the parties hereto.
2. ASSIGNMENT.
(a) Contemporaneously with closing the Loan, Assignor shall wire funds
in the amount of ONE MILLION and NO/100 DOLLARS ($1,000,000.00) (the "Deposit")
to MNB to be deposited into an account in the name of Assignor with MNB (the
"Trusts' Account") which funds shall be invested in accordance with the
provisions of the investment guidelines set forth in Exhibit "B" attached hereto
and incorporated herein by reference for all purposes.
(b) Assignor agrees to pay the fees set forth on Exhibit "C" attached
hereto to MNB and incorporated herein by reference for all purposes.
(c) Assignor hereby pledges, transfers, assigns and sets over to
Assignee, its successors and assigns, all of the Assignor's right, title and
interest of Assignor in and to the Trusts' Account.
(d) In the event that the market value of the Trusts' Account falls
below ONE MILLION AND NO/100 DOLLARS, within 30 days of receipt of written
notice from MNB, Assignor shall wire funds to MNB in an amount equal to the
difference between the market value of the Trusts' Account and ONE MILLION AND
NO/100 DOLLARS.
3. TRUSTS' ACCOUNT.
(a) So long as there shall exist no default by Borrower, beyond any
applicable period for notice and/or opportunity for cure, if any, the funds in
the Trusts' Account shall be invested in accordance with the agreement between
Assignor and MNB and no withdrawals by Assignor shall be permitted prior to
payment in full of the indebtedness owed by Borrower to Assignee, provided,
however, in the event Assignor makes additional contributions to the account
pursuant to Section 2(d) above, Assignor may subsequently withdraw amounts up to
but not exceeding such additional contributions provided that the account has a
market value not less than $1,000,000 after such withdrawal(s).
(b) MNB shall send quarterly and annual statements to Assignor with
copies to Assignee at the addresses shown below.
(c) In the event of any uncured default by Borrower under the Note or
any instruments evidencing, securing, or executed in connection with the Loan
(the "Security Instruments"), and Guarantor's failure to cure said default
within the cure periods applicable to Borrower after notice thereof to
Guarantor, Assignee shall have the right to receive the sum of ONE MILLION AND
NO/100 DOLLARS ($1,000,000.00) from the Trusts' Account. Assignor hereby
expressly authorizes MNB and MNB agrees, upon receipt of written notice and
demand from Assignee, to pay the sum of ONE MILLION AND NO/100 DOLLARS to
Assignee. MNB may act in full reliance on such written notice and demand from
Assignee. No other notice, confirmation, or other action shall be required by or
on behalf of Assignor or Assignee. Upon
the occurrence of an uncured Event of Default, Assignor hereby authorizes MNB
and MNB agrees to sell any or all investments that would result in cash proceeds
in an amount sufficient to cure said default and to remit said proceeds to the
Assignee for application to the indebtedness owed by Borrower to Assignee;
however, if such sales proceeds exceed ONE MILLION and NO/100 DOLLARS
($1,000,000.00), the excess shall be remitted to Assignor by MNB or reinvested
by MNB pursuant to express written instructions from Assignor.
(d) For the purposes of interest earnings and federal income tax
reporting requirements, Assignor's tax identification number is: 00-0000000.
(e) Assignor agrees that the Trusts' Account shall continue to exist
until all indebtedness owed by Borrower to Assignee has been paid in full.
4. INDEMNIFICATION. ASSIGNOR AGREES TO INDEMNIFY AND HOLD ASSIGNEE AND MNB,
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, CONTRACTORS
AND SUCCESSORS AND ASSIGNS (REFERRED TO COLLECTIVELY HEREINAFTER AS
"INDEMNITEES") HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, COSTS,
DAMAGES, LIENS, LIABILITIES, PENALTIES, FINES, LAWSUITS AND OTHER PROCEEDINGS
AND COSTS AND EXPENSES (INCLUDING ATTORNEYS' FEES AND DISBURSEMENTS)
(COLLECTIVELY, "DAMAGES"), WHICH MAY BE INCURRED OR SUSTAINED BY ASSIGNEE, MNB,
OR ANY OTHER PARTY INDEMNIFIED HEREUNDER IN CONNECTION WITH THE TRUSTS' ACCOUNT.
ASSIGNOR AGREES THAT THIS INDEMNIFICATION IS EXPRESSLY INTENDED TO INCLUDE
DAMAGES CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF INDEMNITEES, PROVIDED,
HOWEVER, THIS INDEMNITY SHALL NOT APPLY IN THE CASE OF GROSS NEGLIGENCE OF
INDEMNITEES. ASSIGNOR HEREBY WAIVES ALL CLAIMS AND HOLDS THE INDEMNITEES
HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, COSTS, AND DAMAGES
RELATING TO A DIMINUTION IN MARKET VALUE OF INVESTMENTS MADE PURSUANT TO
ASSIGNOR'S INSTRUCTIONS. IF REQUESTED TO DO SO BY ANY INDEMNITEE, ASSIGNOR WILL
ASSUME, WITHOUT EXPENSE TO INDEMNITEES, THE DEFENSE OF ANY SUCH CLAIMS OR
ACTIONS. THE INDEMNITY OBLIGATIONS CONTAINED IN THIS SECTION 4 SHALL SURVIVE THE
TERMINATION OR EXPIRATION OF THIS ASSIGNMENT.
5. TERMINATION OF TRUST ACCOUNT AND RELEASE OF ASSIGNMENT.
Upon payment in full of all indebtedness owed by Borrower to
Assignee, Assignee shall send written notice to MNB that this Assignment is no
longer in effect and Assignor shall have full power to terminate the Trusts'
Account if it so wishes.
6. REMEDIES NOT EXCLUSIVE; WAIVER.
(a) Assignee shall be entitled to enforce the payment and performance
of any indebtedness or obligations secured hereby and to exercise all rights and
powers under
-2-
this Pledge Agreement, the Note, and any Security Instruments or other agreement
or any laws now or hereafter in force, notwithstanding the fact that some or all
of the indebtedness and obligations secured hereby may now or hereafter be
otherwise secured, whether by mortgage, deed of trust, guaranty, pledge, lien,
assignment or otherwise, subject to any applicable limitation of liability.
Neither Assignee's excise of its rights hereunder nor refraining to exercise
such rights shall prejudice or in any manner affect Assignee's right to realize
upon or enforce any other security now or hereafter held by Assignee or to
enforce its rights hereunder at another time. Assignee shall be entitled to
enforce its rights hereunder and under the Note and the Security Instruments in
such order and manner as it may, in its absolute discretion, determine, subject
to applicable law. No remedy herein conferred upon or reserved to Assignee is
intended to be exclusive of any other remedy contained herein or in the Security
Instruments, or by law provided or permitted, but each shall be cumulative and
shall be in addition to every other remedy given hereunder and in the Security
Instruments and now or hereafter existing at law or in equity or by statute.
Every power or remedy given by the Note and the Security Instruments to Assignee
may be exercised, concurrently or independently, from time to time and as often
as may be deemed expedient by Assignee, and Assignee may pursue inconsistent
remedies, subject to applicable law. By exercising or by not exercising any
right, option or election hereunder. Assignee shall not be deemed to have waived
any provision hereof or to have released Assignor from any of the obligations
secured hereby unless such waiver or release is in writing and signed by
Assignee. The waiver by Assignee of Borrower's failure to perform or observe any
term, covenant, or condition referred to or contained in the Note or Security
Instruments to be performed or observed by Borrower shall not be deemed to be a
waiver of such term, covenant or condition or of any subsequent failure of
Borrower to perform or observe the same or any other such term, covenant or
condition referred to or contained in the Security Instruments, and no custom or
practice which may develop between Borrower and Assignee shall be deemed a
waiver of or any way affect the right of Assignee to insist upon the performance
by Borrower of the obligations secured hereby and the right of Assignee to
exercise its rights hereunder.
(b) Except for notice of default under the Note or Security
Instruments securing the Note, Assignor (i) waives notice of any kind, including
but not limited to presentment for payment, protest and demand, notice of
non-payment, protest, notice of protest, and diligence in collecting the
indebtedness evidenced by the Note or enforcing any of the security therefor,
(ii) agrees to the substitution, exchange or release of any such security or the
release of any party primarily or secondarily liable thereon, and (iii) further
agrees that it will not be necessary for the Assignee, in order to enforce its
rights under this Assignment, to first institute suit or exhaust its remedies
against Borrower or any other liable party or to enforce its rights against any
other security therefor, and consents to any one or more rearrangements,
modifications, extensions or postponements of the time, amount or manner of
payment of the Note on any terms or any other indulgences with respect thereto,
without notice thereof and without discharging or reducing any of Assignor's
liability hereunder.
7. CONTROLLING LAW. This Assignment shall be governed by and construed in
accordance with the Uniform Commercial Code and other laws of the State of
Texas.
8. SEVERABILITY. In case any one or more of the provisions contained in
this Pledge Security Agreement shall for any reason be held to be invalid,
illegal or
-3-
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision hereof and this Pledge Security Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
9. SECTION HEADINGS. Section headings appearing in this instrument have
been inserted for convenience only and shall be given no substitute meaning or
significance whatever in construing the terms and provisions of this Assignment.
10. NOTICES. All notices required herein shall be sent to the following
addresses or to such addresses as the parties hereto may designate in writing at
some future date(s):
ASSIGNEE: NATIONAL WESTERN LIFE INSURANCE COMPANY
000 Xxxx Xxxxxxxx Xxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Mortgage Loan Department
With copy to:
XXXXX, HERZ & XXXXX, L.L.P.
Xxx Xxxxx Xxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
ASSIGNOR: CROWN HILL TRUSTS
0000 Xxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxxxx, Trustee
XXXXX NATIONAL BANK OF GALVESTON
2302 Postoffice
Xxxxxxxxx, Xxxxx 00000
All notices to be given pursuant to this Assignment shall be deemed
to have been received on the earlier of (x) actual receipt or (y) three (3) days
after being mailed postage prepaid, Certified Mail Return Receipt Requested or
one (1) day after having been deposited with a recognized overnight delivery
service, fee prepaid, or upon delivery, if hand delivered, in each case
addressed to the parties designated above or to such other address as a party
hereto may designate in writing.
11. NOTICE OF INDEMNIFICATION. THE PARTIES TO THIS ASSIGNMENT HEREBY
ACKNOWLEDGE AND AGREE THAT THIS ASSIGNMENT CONTAINS CERTAIN INDEMNIFICATION
PROVISIONS PURSUANT TO SECTION 4 OF THIS ASSIGNMENT THAT OPERATE TO SURRENDER OR
OTHERWISE MODIFY THE LEGAL RIGHTS AND OBLIGATIONS OF THE PARTIES, INCLUDING
RELIEVING A PARTY FOR THE CONSEQUENCES OF ITS OWN NEGLIGENCE OR OTHER FAULT.
-4-
IN WITNESS WHEREOF, Assignor and Assignee each have caused this
Assignment to be executed by their duly authorized representatives to be
effective on the date first set forth above.
ASSIGNOR:
CROWN HILL TRUSTS, a group of 5 Texas
trusts
By: ___________________________________
Name:_____________________________________
Title: ___________________________________
ASSIGNEE:
NATIONAL WESTERN LIFE INSURANCE COMPANY,
a Colorado insurance corporation
By: ___________________________________
Name:_____________________________________
Title: __________________________________
XXXXX NATIONAL BANK OF GALVESTON
By: ___________________________________
Name:_____________________________________
Title: __________________________________
THE STATE OF TEXAS
COUNTY OF ________________________
On this ___________ day of __________________, 1997, personally
appeared Xxxxxx X. Xxxxxxxxx, Trustee, who being duly sworn, did say before me
that he is the Trustee of CROWN HILL TRUSTS, a group of 5 Texas trusts and that
he executed the foregoing instrument by authority of and on behalf of the CROWN
HILL TRUSTS, and that he acknowledged said instrument to be his and the CROWN
HILL TRUSTS' voluntary act and deed.
[SEAL] __________________________________________
XXXX X. XXXXXXXX NOTARY PUBLIC in and for the State of Texas
Notary Public
STATE OF TEXAS __________________________________________
Exp. 11/16/2000 (Printed Name of Notary)
My Commission Expires:____________________
THE STATE OF TEXAS
COUNTY OF GALVESTON
On this____day of 1997, personally appeared the
____________________, who being duly sworn, did say before me that he is the
Senior Vice President, of NATIONAL WESTERN LIFE INSURANCE COMPANY, a Colorado
insurance corporation ("the Corporation"), and that he executed the foregoing
instrument by authority of and on behalf of the Corporation and that he
acknowledged said instrument to be his and the Corporation's voluntary act and
deed.
(CONTINUED ON NEXT PAGE)
-6-
------------------------------------------
NOTARY PUBLIC in and for the
State of Texas
--------------------------------------------
(Printed Name of Notary)
My Commission Expires:____________
THE STATE OF TEXAS
COUNTY OF GALVESTON
On this ___day of day of , 1997, personally appeared the , who being
duly sworn, did say before me that he is the _______________ of XXXXX NATIONAL
BANK OF GALVESTON (the "Bank"), and that he executed the foregoing instrument by
authority of and on behalf of the Bank and that he acknowledged said instrument
to be his and the Bank's voluntary act and deed.
---------------------------------
NOTARY PUBLIC in and for the
State of Texas
----------------------------------
(Printed Name of Notary)
My Commission Expires:____________
-7-
EXHIBIT "A"
Hal Xxxxxx Xxxxxxxxx, Xx. Trust
Xxxxxxx Xxxxxx Xxxxxxxxx Trust
Xxxxx Xxxxxxxx Xxxxxxxxx Trust
Xxxxxxxx Xxxxxx Xxxxxxxxx Trust
Xxx Xxx Xxxxxxxx Xxxxxxxxx
Trust
EXHIBIT "B"
INVESTMENT GUIDELINES
ASSETS OF THE TRUSTS SHALL BE INVESTED IN CORPORATE SECURITIES,
SECURITIES TRADED ON THE NASDAQ STOCK EXCHANGE, SECURITIES TRADED ON THE NEW
YORK STOCK EXCHANGE, SHORT SALES OF PUBLICLY TRADED SECURITIES, U.S. TREASURY OR
AGENCY SECURITIES, MARGIN ACCOUNTS WITH COVERED PUTS OR CALLS, AND MONEY-MARKET
ACCOUNTS, AS SHALL BE DIRECTED, FROM TIME TO TIME BY ASSIGNOR. UPON WRITTEN
INSTRUCTION FROM ASSIGNOR, MNB SHALL CONSUMMATE SUCH SECURITIES TRANSACTIONS AS
SOON AS IS PRACTICABLE. FUNDS NOT INVESTED IN SECURITIES SHALL BE DEPOSITED IN
AN INTEREST BEARING MONEY-MARKET ACCOUNT AT MNB. IN NO EVENT SHALL MORE THAN
$200,000 BE INVESTED AT ANY ONE TIME IN ANY SINGLE ENTITY.
XXXXX NATIONAL BANK
TRUST DEPARTMENT
--------------------------------------------------------------------------------
Schedule of Annual Fees (Payable Quarterly)
--------------------------------------------------------------------------------
CURRENT MARKET VALUE PERCENTAGE
OF ACCOUNT RATE
---------- ----
FIRST $1,000,000.00 1%
NEXT $1,000,000.00 .80 OF 1%
NEXT $2,000,000.00 .70 OF 1%
OVER $4,000,000.00 .50 OF 1%
-10-
