Exhibit (b):
AMENDED AND RESTATED
LETTER LOAN AGREEMENT
June 18, 0000
Xxxx Xxx, Xxxxx, N.A.
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxx, Xx.
Gentlemen:
The undersigned, XXXXXX-XXXXXX, INC., a Texas corporation ("Borrower"),
duly organized and existing under the laws of the State of Texas, has requested
that BANK ONE, TEXAS, N.A. ("Lender") make a loan to Borrower. Lender has
advised Borrower that Lender is willing to make such loan to Borrower upon the
terms and subject to the conditions set forth in this letter loan agreement (the
"Agreement"). In consideration for the above premises and the mutual promises
and covenants herein contained, Borrower and Lender do hereby agree as follows:
1. Loans. On the terms and subject to the conditions hereinafter set
forth, Lender agrees to lend to Borrower, a sum evidenced by the below described
promissory notes (the "Loans"). The Loans shall be evidenced by (i) a Term
Promissory Note (the "Real Estate Note") in a form satisfactory to Lender and
Borrower, in the principal amount of $4,200,000.00 (ii) a Term Promissory Note
(the "Equipment Note") in a form satisfactory to Lender and Borrower, in the
principal amount of $1,390,000.00, and (iii) a Revolving Promissory Note (the
"Revolving Note") in a form satisfactory to Lender and Borrower, in the
principal amount of $2,200,000.00, and (iv) an Advancing Term Promissory Note
(the "Advancing Note") in a form satisfactory to Lender and Borrower, in the
original principal amount of $1,000,000.00. The Real Estate Note, the Equipment
Note, the Revolving Note and the Advancing Note and any renewals and extensions
thereof, are collectively referred to as the "Notes". Each of the Notes shall
be duly executed Borrower, and principal and interest thereon shall be due and
payable in the manner and at the times set forth in such Notes.
2. Advances.
(a) Subject to the terms hereof, Borrower may borrow, pay, reborrow
and repay under the Revolving Note, provided, however, the maximum principal
outstanding under the Revolving Note shall not exceed the lesser of (i)
$2,200,000 or (ii) the Borrower's Loan Limit, as such term is defined in
Schedule "A" attached hereto and made a part hereof. Borrower's requests for
advances, whether for cash or Letter of Credit (hereinafter defined), under the
Revolving Note shall specify the aggregate amount of the advance and the date of
such advance. Borrower shall furnish to Lender a request for borrowing in a
form satisfactory to Lender at least two (2) business days prior to the
requested borrowing date. Lender shall make the requested funds or Letter of
Credit available on the requested borrowing date to Borrower at Lender's
principal banking office in Houston, Texas. If at any time prior to the
maturity date of the Revolving Note, the outstanding advances under the
Revolving Note exceed Borrower's Loan Limit as shown on any reports delivered to
Lender under Paragraph 5(c) or as indicated by Lender's own records, Borrower
shall, on the date of the delivery of such report to Lender or on
the date of notice from Lender as to Lender's records, prepay on the Revolving
Note such amount as may be necessary to eliminate such excess.
(b) On the terms and subject to the conditions hereinafter set forth,
Lender agrees to make advances on the Revolving Note to Borrower for the
issuance of one or more letters of credit the total outstanding amount of which
shall not exceed $500,000.00 at any one time. Each of the letters of credit
shall be evidenced by an Application and Agreement for Standby and/or Commercial
Letter of Credit (the "Application") in a form satisfactory to Lender and
Borrower, and shall mature no later than ninety (90) days after the maturity
date of the Revolving Note. Each of these letters of credit and any renewals,
extensions and modifications thereof are collectively referred to herein as the
"Letter of Credit". Repayment of drafts against the Letter of Credit shall be
governed by this Agreement and the Application, and shall be and is secured by
the collateral and guaranties provided in Paragraph 9 hereof.
(c) Subject to the terms hereof, Lender will lend to Borrower an
aggregate amount not to exceed $1,000,000.00 to be used for Borrower's equipment
purchases. From time to time, Borrower may submit to Lender requests for
advances under the Advancing Note, which requests shall specify the aggregate
amount of the advance and the date of such advance. Borrower shall only be
entitled to an advance under the Advancing Note in an amount approved by Lender,
and in no event shall any such advance exceed Borrower's actual cost of any such
purchased equipment. Borrower shall furnish to Lender a request for borrowing
in a form satisfactory to Lender and a copy of the invoice for the assets to be
purchased, at least two (2) business days prior to the requested borrowing date.
Lender shall make the requested funds available to Borrower at Lender's
principal banking office in Houston, Texas. In connection with advances, Lender
shall not be obligated to make any advances under the Advancing Note after June
18, 1998. Borrower shall not be entitled to reborrow any sums already repaid
under the Advancing Note.
3. Conditions Precedent.
(a) The obligation of Lender to make the initial advance under each
Loan is subject to the condition precedent that Lender shall have received:
(i) Duly executed copies of each document listed on the last page
hereof relating to such Loan, in form and substance acceptable to
Lender and its legal counsel (all such documents, together with
this Agreement and any other security documents relating to the
Loans, and any modifications thereof, to be hereinafter
collectively referred to as the "Loan Documents");
(ii) Written confirmation from Borrower that the Securities and
Exchange Commission has no further comments in regard to
Borrower's purchase of all of its issued and outstanding shares
of common stock held or controlled by shareholders other than
Xxxxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx (the
"Public Shares") pursuant to the tender offer by Borrower to
purchase the Public Shares;
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(iii) Confirmation that the price at which Borrower shall
purchase its issued and outstanding shares shall not exceed that
which is acceptable to Lender;
(iv) An origination fee of 1/4 percent (0.25%) of funds advanced
hereunder, as consideration for Lender's commitment to make such
advances;
(v) A Mortgagee Policy of Title Insurance in an amount and form
satisfactory to Lender and Borrower; and
(vi) An environmental assessment report for the real estate
portion of the Collateral (described in Paragraph 9 hereof),
which shall be in form and content satisfactory to Lender.
(b) Lender's obligation to make any advances under the Loans shall be
subject to the additional conditions precedent that, as of the date of such
advance and after giving effect thereto: (i) all representations and warranties
made by Borrower to Lender are true and correct, as if made on such date, (ii)
all documents and proceedings shall be reasonably satisfactory to legal counsel
for Lender, (iii) no condition or event exists which constitutes an Event of
Default (as hereinafter defined) or which, with the lapse of time and/or giving
of notice, would constitute an Event of Default, and (iv) all conditions
precedent set forth in subparagraph (a) above shall have been satisfied.
4. Representations and Warranties. In order to induce Lender to make the
Loans, Borrower represents and warrants to Lender that:
(a) The Loan Documents are the legal and binding obligations of
Borrower, enforceable in accordance with their respective terms, except as
limited by bankruptcy, insolvency or other laws of general application relating
to the enforcement of creditors' rights;
(b) All financial statements delivered by Borrower to Lender prior to
the date hereof are true and correct, fairly present the financial condition of
Borrower and have been prepared in accordance with generally accepted accounting
principles, consistently applied; as of the date hereof, there are no
obligations, liabilities or indebtedness (including contingent and indirect
liabilities) which are material to Borrower and not reflected in such financial
statements; and no material adverse changes have occurred in the financial
condition or business of Borrower since the date of the most recent financial
statements which Borrower has delivered to Lender;
(c) Neither the execution and delivery of this Agreement and the other
Loan Documents, nor consummation of any of the transactions herein or therein
contemplated, nor compliance with the terms and provisions hereof or thereof,
will contravene or conflict with any provision of law, statute or regulation to
which Borrower is subject or any judgment, license, order or permit applicable
to Borrower or any indenture, mortgage, deed of trust or other instrument to
which Borrower may be subject; no consent, approval, authorization or order of
any court, governmental authority or third party is required in connection with
the execution and delivery by Borrower of this Agreement or transactions
contemplated herein or therein;
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(d) No litigation, investigation, or governmental proceeding is
pending, or, to the knowledge of any of Borrower's officers, threatened against
or affecting Borrower, which may result in any material adverse change in
Borrower's business, properties or operations;
(e) There is no specific fact known to Borrower that Borrower has not
disclosed to Lender in writing which is likely to result in any material adverse
change in Borrower's business, properties or operations;
(f) Borrower owns all of the assets reflected on its most recent
balance sheet free and clear of all liens, security interests or other
encumbrances, except as previously disclosed in writing to Lender;
(g) The principal office, chief executive office and principal place
of business of Borrower is in Houston, Texas;
(h) All taxes required to be paid by Borrower have in fact been paid,
except for taxes being contested in good faith by appropriate proceedings for
which adequate reserves have been established;
(i) Borrower is not in violation of any law, ordinance, governmental
rule or regulation to which it is subject, and is not in default under any
material agreement, contract or understanding to which it is a party;
(j) No written certificate or written statement herewith or heretofore
delivered by Borrower to Lender in connection herewith, or in connection with
any transaction contemplated hereby, contains any untrue statement of a material
fact or fails to state any material fact necessary to keep the statements
contained therein from being misleading; and
(k) Borrower has taken all steps necessary to determine and has
determined that no hazardous substances, or other substances known or suspected
to pose a threat to health or the environment which are in violation of
Applicable Environmental Laws ("Hazard[s]") exist with respect to the Collateral
(hereinafter defined). No prior use, either by Borrower or, to Borrower's
knowledge, the prior owners of the Collateral, has occurred, which violates any
laws pertaining to health or the environment ("Applicable Environmental Laws"),
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended ("CERCLA"), the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA"), the Texas Water Code
and the Texas Solid Waste Disposal Act. The Borrower's handling and maintenance
of the Collateral does not and will not result in the disposal or release of any
hazardous substance or Hazard on, in or to the Collateral. The terms "hazardous
substance" and "release" shall each have the meanings specified in CERCLA, and
the terms "solid waste" and "disposal" (or "disposed") shall each have the
meanings specified in RCRA; provided, however, that in the event either CERCLA
or RCRA is amended so as to broaden the meaning of any term defined thereby,
such broader meaning shall apply subsequent to the effective date of such
amendment; and provided further that, to the extent that the laws of the State
of Texas establish a meaning for "hazardous substance", "release", "solid
waste", or "disposal" which is broader than that specified in either CERCLA or
RCRA, such broader definition shall apply.
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5. Affirmative Covenants. Until payment in full of the Notes and all
other obligations and liabilities of Borrower hereunder, Borrower agrees and
covenants that (unless Lender shall otherwise consent in writing):
(a) As soon as available, and in any event within thirty (30) days
after the close of each calendar quarter of each fiscal year of Borrower,
Borrower shall deliver to Lender an unaudited financial statement showing the
consolidated and consolidating financial condition of Borrower and any
subsidiary at the close of each such quarter and the results of operations
during such quarter, which financial statements shall include, but shall not be
limited to, a profit and loss statement, balance sheet and such other matters as
Lender may reasonably request; all such quarterly financial statements shall be
forwarded to Lender with a letter of transmittal from him in which he shall
certify that Borrower is in compliance with all of the affirmative covenants
contained in this Paragraph 5 and further stating that no Event of Default
exists in the performance by Borrower of any of the other terms, conditions and
covenants required under this Agreement to be performed by Borrower;
(b) Within ninety (90) days after the end of each fiscal year of
Borrower, Borrower shall deliver to Lender a copy of the annual audited
financial statement of Borrower prepared in conformity with generally accepted
accounting principles, certified (with no material qualifications or exceptions)
by independent public accountants selected by Borrower and satisfactory to
Lender, which show the consolidated and consolidating financial condition of
Borrower and any subsidiary at the close of such fiscal year and the results of
operations during such fiscal year, and shall include, but not be limited to, a
profit and loss statement, balance sheet and such other matters as Lender may
reasonably request;
(c) As soon as available, and in any event within thirty (30) days
after the end of each month, and upon each request for an advance Borrower shall
deliver to Lender a Borrowing Base Report and Compliance Certificate in the form
of Schedule "B" attached hereto together with such other information as may be
deemed necessary or appropriate by Lender, and as soon as available, and in any
event within thirty (30) days after the end of each month, Borrower shall
deliver to Lender an aging and listing of all accounts of Borrower in a form
acceptable to Lender;
(d) Borrower shall conduct its business in an orderly and efficient
manner consistent with good business practices and in accordance with all valid
regulations, laws and orders of any governmental authority and will act in
accordance with customary industry standards in maintaining and operating its
assets, properties and investments;
(e) Borrower shall maintain complete and accurate books and records of
its transactions in accordance with generally accepted accounting principles,
and will give Lender access during business hours to all books, records and
documents of Borrower and permit Lender to make and take away copies thereof;
(f) Borrower shall furnish to Lender, immediately upon becoming aware
of the existence of any condition or event constituting an Event of Default or
event which, with the lapse of time and/or giving of notice, would constitute an
Event of Default, written notice specifying the nature and period of existence
thereof and any action which Borrower is taking or proposes to take with respect
thereto;
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(g) Borrower shall promptly notify Lender of (i) any material adverse
change in its financial condition or business; (ii) any default under any
material agreement, contract or other instrument to which Borrower is a party or
by which any of its properties are bound, or any acceleration of any maturity of
any indebtedness owing by Borrower, (iii) any material adverse claim against or
affecting Borrower or any of its properties; and (iv) any litigation, or any
claim or controversy which might become the subject of litigation, against
Borrower or affecting any of Borrower's property, if such litigation or
potential litigation might, in the event of an unfavorable outcome, have a
material adverse effect on Borrower's financial condition or business or might
cause an Event of Default;
(h) Borrower shall promptly pay all lawful claims, whether for labor,
materials or otherwise, which might or could, if unpaid, become a lien or charge
on any property or assets of Borrower, unless and to the extent only that the
same are being contested in good faith by appropriate proceedings and reserves
deemed adequate by Lender have been established therefor;
(i) Borrower shall maintain or cause to be maintained insurance from
responsible and reputable companies in such amounts and covering such risks as
is acceptable to Lender, is prudent and is usually carried by companies engaged
in businesses similar to that of Borrower; Borrower shall furnish Lender, on
request, with certified copies of insurance policies or other appropriate
evidence of compliance with the foregoing covenant;
(j) Borrower shall preserve and maintain all licenses, privileges,
franchises, certificates and the like necessary for the operation of its
business; and
(k) Borrower shall promptly furnish to Lender, at Lender's request,
such additional financial or other information concerning assets, liabilities,
operations and transactions of Borrower as Lender may from time to time
reasonably request;
(l) Borrower shall give notice to Lender immediately upon acquiring
knowledge of the presence of any Hazards relating to the Collateral, which is in
a condition that is resulting or could reasonably be expected to result in any
adverse environmental impact, with a full description thereof; promptly comply
with all Applicable Environmental Laws requiring the notice, removal, treatment,
or disposal of such hazardous substances; and provide Lender, within thirty (30)
days after demand by Lender, with financial assurance evidencing to Lender's
satisfaction that sufficient funds are available to pay the cost of removing,
treating and disposing of any such known Hazards and discharging any liens or
assessments that may be established relating to the Collateral; and
(m) Borrower shall pay a letter of credit commission to Lender in
respect of each Letter of Credit issued by Lender equal to the greater of $150
or an amount determined by multiplying (i) one percent (1%) of the face amount
of such Letter of Credit by (ii) a fraction, the numerator of which shall be the
number of days between the date of such Letter of Credit and the stated
expiration date thereof and the denominator of which shall be 365; such
commission shall be payable at the time a Letter of Credit is issued and upon
any renewal or extension thereof; additionally, Borrower agrees to reimburse
Lender for all actual out-of-pocket expenses incurred by Lender, such as
advising or confirming bank fees, telex charges and the like and to pay those
fees customarily charged by Lender for any amendments to a Letter of Credit.
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6. Negative Covenants. Until payment in full of the Notes and all other
obligations and liabilities of Borrower hereunder, Borrower covenants that it
shall not (unless Lender shall otherwise consent in writing):
(a) Permit, at any time, its ratio of Current Assets to Current
Liabilities to be less than 1.20 to 1.00; as used herein, the term "Current
Asset" shall mean all assets of Borrower that, in accordance with generally
accepted accounting principles, would be included as current assets on a balance
sheet as of such date, and the term "Current Liabilities" shall mean all
liabilities of Borrower that, in accordance with generally accepted accounting
principles, would be included as current liabilities on a balance sheet as of
such date;
(b) Permit, at any time, its Fixed Charge Coverage Ratio to be less
than 1.20 to 1.00; as used herein, the term "Fixed Charge Coverage Ratio" shall
mean the ratio of (i) Borrower's after-tax net income, less dividends, plus
depreciation and amortization, plus interest expense, plus lease expense, to
(ii) Borrower's interest expense, plus current maturities of long term debt and
capital leases (not including debt under the Revolving Note), plus lease
expense, all of which (except current maturities of long term debt and capital
leases) are based on the immediately preceding four fiscal quarters of Borrower;
(c) Permit Borrower's Tangible Net Worth to be less than $3,000,000 at
any time during calendar year 1997; and each calendar year thereafter a sum
equal to the previous calendar year's required minimum Tangible Net Worth, plus
fifty percent (50%) of Borrower's Net Income for the previous calendar year; as
used herein, the term "Tangible Net Worth" shall mean Borrower's shareholders'
equity, minus all intangibles; "Net Income" shall mean net earnings (after
income and state franchise taxes) determined in accordance with generally
accepted accounting principles;
(d) Permit, at any time, its ratio of total liabilities to Tangible
Net Worth to be more than 2.50 to 1.00;
(e) Incur or assume any indebtedness or borrow money, except for (i)
the Loans; (ii) debt incurred in the ordinary course of business; and (iii) debt
reflected on Borrower's most recent balance sheet; or sell any of its accounts
receivable with or without recourse;
(f) Endorse, guarantee, or otherwise become liable for the obligations
of any person, firm or corporation except for endorsements of negotiable
instruments by Borrower in the ordinary course of business;
(g) Mortgage, assign, encumber, incur, assume or grant a security
interest in or lien upon any of Borrower's assets, except to Lender (provided,
however, that the foregoing shall not apply to an inchoate lien for taxes which
are not delinquent or which are being contested in good faith and liens
resulting from deposits to secure the payments of worker's compensation or
social security or to secure the performance of bids or contracts in the
ordinary course of business) and except for purchase money security interests
required to secure the debt permitted pursuant to Subparagraph 6(e) hereinabove;
(h) Liquidate, dissolve or reorganize; or merge or consolidate with,
or acquire all or substantially all of the assets of, any other company, firm or
association; or make any other
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substantial change in its capitalization or its business, except for Borrower's
purchase of the Public Shares and the possible merger pursuant to the tender
offer described in Paragraph 3(a)(ii) hereof;
(i) Sell any of its assets used or useful in its business, except in
the ordinary course of business; or sell any of its assets to any other person,
firm or corporation with the agreement that such assets shall be leased back to
Borrower;
(j) Own, purchase or acquire, directly or indirectly, any promissory
notes, stock or securities of any other person, firm or corporation, other than
securities guaranteed as to the principal and interest by the United States
government; or make any loans or advances to any other person, except those
trade accounts receivable arising in the normal course of business and the
purchase of the Public Shares pursuant to the tender offer described in
Paragraph 3(a) (ii) hereof; or
(k) Expend or enter into any commitment to expend any amount for the
acquisition or lease of tangible, fixed or capital assets, including repairs,
replacements and improvements, which are capitalized under proper accounting
practice, which exceeds $2,000,000.00 in the aggregate during any fiscal year
during the term hereof.
7. Default. An "Event of Default" shall exist if any one or more of the
following events (herein collectively called "Events of Default") shall occur:
(a) Borrower shall fail to pay when due any principal of, or interest
on, the Notes or any other fee or payment due hereunder or under any of the Loan
Documents within ten (10) days of Lender's sending written demand therefor;
provided, Lender shall not be obligated to send such demand more than twice per
calendar year, and thereafter Borrower shall be in default upon its failure to
pay such sums when due;
(b) Any representation or warranty made in any of the Loan Documents
shall prove to be untrue or inaccurate in any material respect as of the date on
which such representation or warranty is made;
(c) Default shall occur in the performance of any of the covenants or
agreements of Borrower contained herein or in any of the other Loan Documents;
provided, however, with respect to the Affirmative Covenants set forth in
Paragraph 5 of this Agreement [specifically excluding Subparagraphs 5(f) and
5(g)] Borrower shall be entitled to a ten (10) day opportunity to cure such
default after Lender has sent written notice of such occurrence; provided,
Lender shall not be obligated to send such notice more than twice per calendar
year, and thereafter Borrower shall be in default upon any such occurrence;
(d) Borrower shall (i) apply for or consent to the appointment of a
receiver, custodian, trustee, intervenor or liquidator of it or of all or a
substantial part of its assets, (ii) voluntarily become the subject of a
bankruptcy, reorganization or insolvency proceeding or be insolvent or admit in
writing that it is unable to pay debts as they become due, (iii) make a general
assignment for the benefit of creditors, (iv) file a petition or answer seeking
reorganization or an arrangement with creditors or to take advantage of any
bankruptcy or insolvency laws, (v) file an answer admitting the material
allegations of, or consent to, or default
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in answering, a petition filed against it in any bankruptcy, reorganization or
insolvency proceeding, (vi) become the subject of an order for relief under any
bankruptcy, reorganization or insolvency proceeding, or (vii) fail to pay any
money judgment against it before the expiration of thirty (30) days after such
judgment becomes final and no longer subject to appeal;
(e) An order, judgment or decree shall be entered by any court of
competent jurisdiction or other competent authority approving a petition
appointing a receiver, custodian, trustee, intervenor or liquidator of Borrower
or of all or substantially all of its assets, and such order, judgment or decree
shall continue unstayed and in effect for a period of thirty (30) days; or a
complaint or petition shall be filed against Borrower seeking or instituting a
bankruptcy, insolvency, reorganization, rehabilitation or receivership
proceeding of Borrower, and such petition or complaint shall not have been
dismissed within thirty (30) days;
(f) Borrower shall default in the payment of any indebtedness of
Borrower or in the performance of any of Borrower's material obligations and
such default shall continue for more than any applicable period of grace; or
(g) Any change in either (i) the management of Borrower at the Chief
Executive Officer level and President level, or (ii) the ownership of
controlling interest of the stock of Borrower (after the purchase of the shares
pursuant to the tender offer described in paragraph 3(a)(ii) hereof) during the
term of the Loans; as used herein, the term "controlling interest" shall mean
51% of the stock of Borrower; and if a shareholder is an individual, the death
of such shareholder shall not be deemed to be a change in the ownership of such
stock of Borrower.
8. Remedies Upon Event of Default. If an Event of Default shall have
occurred and be continuing, then Lender, at its option, may (i) declare the
principal of, and all interest then accrued on, the Notes and any other
liabilities of Borrower to Lender to be forthwith due and payable, whereupon the
same shall forthwith become due and payable without notice, presentment, demand,
protest, notice of intention to accelerate, or other notice of any kind, all of
which Borrower hereby expressly waives, anything contained herein or in the
Notes to the contrary notwithstanding, (ii) reduce any claim to judgment, and/or
(iii) without notice of default or demand, pursue and enforce any of Lender's
rights and remedies under the Loan Documents or otherwise provided under or
pursuant to any applicable law or agreement.
9. Collateral. Payment of the Notes and performance of the obligations
described herein shall be secured, or guaranteed, directly or indirectly, by a
first priority (except as otherwise specified below) perfected security interest
or mortgage, as the case may be, in and upon the following property and assets
(the "Collateral"):
(i) All of Borrower's general intangibles, equipment, accounts,
inventory, instruments, chattel paper and documents; and
(ii) Certain real estate located in Houston, Xxxxxx County, Texas,
together with all improvements located or to be located thereon, and Xxxxxx
City, Tarrant County, Texas, together with all improvements located or to
be located thereon.
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10. Miscellaneous.
(a) Waiver. No failure to exercise, and no delay in exercising, on
the part of Lender, any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right. The rights of Lender
hereunder and under the other Loan Documents shall be in addition to all other
rights provided by law. No notice or demand given in any case shall constitute
a waiver of the right to take other action in the same, similar or other
instances without such notice or demand.
(b) Notices. Any notices or other communications required or
permitted to be given by any of the Loan Documents must be given in writing and
must be personally delivered or mailed by prepaid certified or registered mail
to the party to whom such notice or communication is directed at the address of
such party as follows:
(i) Borrower: Xxxxxx-Xxxxxx, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxx 00000
(ii) Lender: Bank One, Texas, NA
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Corporate Lending
Any such notice or other communication shall be deemed to have been given
(whether actually received or not) on the day it is personally delivered as
aforesaid, or, if mailed, on the third day after it is mailed as aforesaid. Any
party may change its address for purposes of this Agreement by giving notice of
such change to all other parties pursuant to this Paragraph 10(b).
(c) Governing Law. This Agreement and the other Loan Documents are
being executed and delivered, and are intended to be performed, in the State of
Texas, and the substantive laws of Texas shall govern the validity,
construction, enforcement and interpretation of this Agreement and all other
Loan Documents, except to the extent: (i) otherwise specified therein; (ii) the
federal or state laws governing national banking associations expressly
supersede and have contrary application; or (iii) federal laws governing maximum
interest rates shall provide for rates of interest higher than those permitted
under the laws of the State of Texas.
(d) Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term of this Agreement, such provision shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement.
(e) Maximum Interest Rate. It is the intention of the parties hereto
to comply with the usury laws of the State of Texas and the United States;
accordingly, it is agreed that notwithstanding any provision to the contrary in
the Notes, or in any of the documents securing
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payment hereof or otherwise relating hereto, no such provision shall require the
payment or permit the collection of interest in excess of the maximum permitted
by applicable state or Federal law. If any excess of interest in such respect
is provided for, or shall be adjudicated to be so provided for, in the Notes or
in any of the documents securing payment hereof or otherwise relating hereto, or
in the event the maturity of the indebtedness evidenced by the Notes is
accelerated in whole or in part, or in the event that all or part of the
principal or interest of the Notes shall be prepaid, so that under any of such
circumstances the amount of interest contracted for, charged or received under
the Notes or under any of the instruments securing payment hereof or otherwise
relating hereto, on the amount of principal actually outstanding from time to
time under the Notes shall exceed the maximum amount of interest permitted by
the usury laws of the State of Texas and the United States, then, in any such
event, (i) the provisions of this paragraph shall govern and control, (ii)
neither Borrower nor its heirs, legal representatives or assigns or any other
party liable for the payment hereof shall be obligated to pay the amount of such
interest to the extent that it is in excess of the maximum amount permitted by
applicable state or Federal law, (iii) any such excess which may have been
collected shall be, at the holder's option (at maturity or in the Event of
Default hereunder), either applied as a credit against the then unpaid principal
amount hereof or refunded to Borrower, and (iv) the effective rate of interest
shall be automatically subject to reduction to the maximum lawful contract rate
allowed under the usury laws of the State of Texas or the United States as now
or hereafter construed by the courts having jurisdiction. It is further agreed
that without limitation of the foregoing, all calculations of the rate of
interest contracted for, charged or received under the Notes or under such other
documents which are made for the purpose of determining whether such rate
exceeds the maximum lawful rate of interest, shall be made, to the extent
permitted by the laws of the State of Texas and the United States, by
amortizing, prorating, allocating and spreading in equal parts during the period
of the full stated term of the Loans, all interest at any time contracted for,
charged or received from Borrower or otherwise by the holder of the Notes in
connection with such Loans.
(f) Entirety and Amendments. The Loan Documents embody the entire
agreement between the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof and thereof, and
this Agreement and the other Loan Documents may be amended only by an instrument
in writing executed by the party, or an authorized officer of the party, against
whom such amendment is sought to be enforced.
(g) Parties Bound. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns; provided, however, that Borrower may
not, without the prior written consent of Lender, assign any rights, powers,
duties or obligations hereunder.
(h) Headings. Paragraph and section headings are for convenience of
reference only and shall in no way affect the interpretation of this Agreement.
(i) Financial Terms. As used in this Agreement, all financial and
accounting terms not otherwise defined herein shall be defined and calculated in
accordance with generally accepted accounting principles consistently applied.
(j) Hazardous Substances; Indemnification. Borrower shall protect,
indemnify and hold Lender, its directors, officers, employees and agents, and
any immediate successors to
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Lender's interest in the Collateral and any other person who acquires any
portion of the Collateral at a foreclosure sale or otherwise through the
exercise of Lender's rights and remedies under the Loan Documents, and all
directors, officers, employees and agents of all of the aforementioned
indemnified parties, harmless from and against any and all actual or potential
claims, proceedings, lawsuits, liabilities, damages, losses, fines, penalties,
judgments, awards, costs and expenses (including, without limitation, attorneys'
fees and costs and expenses of investigation) which arise out of or relate in
any way to any use, handling, production, transportation, disposal or storage of
any hazardous substance or solid waste whether by Borrower or any tenant or any
other person during the ownership of the Collateral by Borrower, including,
without limitation, (i) all foreseeable and all unforeseeable consequential
damages directly or indirectly arising out of (A) the use, generation, storage,
discharge or disposal of the Collateral by Borrower or (B) any residual
contamination affecting any natural resource or the environment, and (ii) the
cost of any required or necessary repair, cleanup, or detoxification of the
Collateral and the preparation of any closure or other required remedial plans.
In addition, Borrower agrees that in the event the Collateral is assigned an
identification number by the Environmental Protection Agency, the Collateral
shall be solely in the name of Borrower or other responsible person and, as
between Borrower and Lender, Borrower shall assume any and all liability for
such removed Collateral. All such costs, damages, and expenses referred to
herein shall hereinafter be referred to as "Expenses". Borrower understands and
agrees that its liability to the aforementioned indemnified parties shall arise
upon the earlier to occur of (a) discovery of any violation of the Applicable
Environmental Laws or (b) the institution of any Hazardous Materials Claim, and
not upon the realization of loss or damage, and Borrower agrees to pay to Lender
from time to time, immediately upon Lender's request, an amount equal to such
Expenses, as reasonably determined by Lender. In addition, Borrower agrees that
any Expenses incurred by Lender and not paid by Borrower shall be additional
indebtedness of Borrower and shall be secured by the Loan Documents and shall
accrue interest at the Maximum Rate. The agreements contained herein shall
survive the repayment of the Note and the termination of the Loan Documents. As
used herein, "Hazardous Materials Claims" shall mean any and all enforcement,
clean-up, removal or other governmental or regulatory actions or orders
threatened, instituted or completed pursuant to any Applicable Environmental
Laws, together with all claims made or threatened by any third party against
Borrower or the Collateral relating to damage, contribution, cost recovery
compensation, loss or injury resulting from any hazardous substance or solid
waste. Notwithstanding anything to the contrary contained in this subparagraph
or in the Loan Documents, it is hereby expressly agreed and understood that
Borrower's obligation to protect, indemnify and hold Lender and the other
aforementioned indemnified parties harmless from and against any and all
Hazardous Materials Claims and Expenses pursuant to this subparagraph shall not
apply to Hazardous Materials Claims or Expenses arising out of or relating in
any way to any use, handling, production, transportation, disposal or storage of
the Collateral directly caused by Lender or any such other indemnified party
during the management, operation, possession or ownership of the Collateral by
Lender or any such other indemnified party, and not resulting from a condition
existing prior to the commencement of such management, operation, possession or
ownership of the Collateral by Lender or any such other indemnified party.
11. Construction and Conflicts. The provisions of this Agreement shall be
in addition to those of the Notes, the Loan Documents and any guaranty, pledge
or security agreement, note or other evidence of liability held by Lender, all
of which shall be construed as complementary to each other. Nothing herein
contained shall prevent Lender from enforcing the Notes, the Loan Documents and
any and all other notes, guaranty, pledge or security agreements in accordance
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with their respective terms. To the extent of any irreconcilable conflict
between the terms hereof and the terms of the Notes, the Loan Documents or any
other document executed in connection herewith, the terms of this Agreement
shall control.
12. NO ORAL AGREEMENTS. THE WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
If Lender agrees to the foregoing, Lender should execute this Agreement in
the space indicated below.
"BORROWER"
XXXXXX-XXXXXX, INC.
By /s/ XXXXXX X. XXXXXX
------------------------
Xxxxxx X. Xxxxxx,
Chairman of the Board
ACCEPTED:
"LENDER"
BANK ONE, TEXAS, NA
/s/ XXXX X. XXXX
By _________________________________
Xxxx X. Xxxx, Xx., Vice President
List of Loan Documents
1. Amended and Restated Letter Loan Agreement
2. $4,200,000.00 Term Promissory Note (Real Estate Note)
3. $1,390,000.00 Term Promissory Note (Equipment Note)
4 $2,200,000.00 Revolving Credit Note
5. $1,000,000.00 Advancing Line of Credit
6. Deed of Trust, Security Agreement and Assignment of Rents
7. Amended and Restated Security Agreement
8. Corporate Resolutions
9. Notice of Invalidity of Oral Agreements
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SCHEDULE "A"
"BORROWER'S LOAN LIMIT", as used herein, shall be based upon, and shall not
exceed, the sum of: (a) eighty percent (80%) of Borrower's Eligible Accounts (as
defined below) outstanding on the date of a request for a Loan advance; plus (b)
the lesser of (i) $1,250,000 or (ii) fifty percent (50%) of the Net Security
Value of Inventory (as defined below) of Borrower.
An "ELIGIBLE ACCOUNT" shall mean an account which continuously meets each
of the following requirements is an Eligible Account: (i) it is lawfully owned
by Borrower, and Borrower has the right to transfer any interest therein; (ii)
if it arises from the sale or lease of goods, the goods have been shipped or
delivered to the person who is obligated on the account (the "account debtor");
(iii) if it arises from the performance of services, such services have been
fully rendered, to the extent of the billing; (iv) it is a valid obligation of
the account debtor, enforceable in accordance with its terms and free and clear
of all liens, security interests, restrictions, setoffs, adverse claims,
assessments, defaults, prepayments, defenses and conditions precedent other than
the security interest created by this Letter Agreement; (v) rendered to the
account debtor and is not evidenced by any instrument or chattel paper; (vi) it
is not aged more than ninety (90) days from the date of invoice; (vii) it is not
owed by any account debtor closely affiliated with, related to or employed by
Borrower or domiciled outside of the United States (unless, in the case of an
account debtor domiciled outside of the United States, such account is deemed by
Lender to be properly secured); and (viii) it is not owed by an account debtor
that has fifteen percent (15%) or more of its accounts with Borrower aged more
than ninety (90) days from the date of invoice.
"NET SECURITY VALUE OF INVENTORY" shall mean the net value of all
inventory, with the exception of work in process, and after taking into account
charges, liens and security interests (other than the interest of Lender) of all
kinds against inventory, changes in the market value thereof, all
transportation, processing and other handling charges affecting the value
thereof, inventory surplus and estimated earnings on uncompleted contracts, all
as determined by Lender in its reasonable discretion.
SCHEDULE "B"
BORROWING BASE REPORT AND COMPLIANCE CERTIFICATE
I. Total Accounts Receivable: $____________
Less: Ineligible Accounts -$____________
Eligible Accounts Receivable =$____________
II. Eligible Inventory: $____________
III. 80% x Eligible Accounts Receivable: $____________
The lesser of (i) 50% x Inventory
or (ii) $1,250,000: +$____________
Borrower's Loan Limit: =$____________
(maximum $2,200,000)
IV. Current Principal Balance: $____________
V. Advance Request: $____________
VI. Total Outstanding After Draw: $____________
VII. Available Funds/(Repayment Amount): $____________
The undersigned officer or Controller of Borrower, hereby certifies to
Lender that to the best of his/her knowledge (i) the computations set forth
above are true, correct and complete as of the date set forth above or as of the
date of execution hereof, as the case may be, (ii) such computations have been
made in full compliance with and conformity to the Letter Loan Agreement (the
"Loan Agreement") between Borrower and Lender, and (iii) the matters set forth
in Paragraph 3(b) of the Loan Agreement are true and correct.
All capitalized terms used herein which have been defined in the Loan
Agreement have been used in accordance with the definitions ascribed to them in
the Loan Agreement.
EXECUTED this ____ day of _____________, 19__.
_________________________________
(Signature of Certifying Officer)
RENEWAL AND MODIFICATION
PROMISSORY NOTE
(REAL ESTATE NOTE)
$4,200,000.00 HOUSTON, TEXAS JUNE 18, 1997
THIS RENEWAL AND MODIFICATION PROMISSORY NOTE (THE "NOTE") IS EXECUTED IN
RENEWAL, EXTENSION, MODIFICATION AND ENLARGEMENT, BUT NOT EXTINGUISHMENT,
SUBSTITUTION, NOVATION OR DISCHARGE, OF THE INDEBTEDNESS EVIDENCED BY THAT ONE
CERTAIN PROMISSORY NOTE IN THE ORIGINAL PRINCIPAL AMOUNT OF $2,000,000.00 DATED
JANUARY 29, 1988, EXECUTED BY XXXXXX-XXXXXX, INC. IN FAVOR OF KEYSTONE
INTERNATIONAL, INC., AND SECURED BY A DEED OF TRUST OF EVEN DATE THEREWITH, DULY
RECORDED UNDER CLERK'S FILE NO. L524904 OF THE OFFICIAL PUBLIC RECORDS OF REAL
PROPERTY OF XXXXXX COUNTY, TEXAS, WHICH NOTE AND LIENS WERE DULY TRANSFERRED AND
ASSIGNED TO BANK ONE, TEXAS, N.A. BY THAT ONE CERTAIN TRANSFER OF NOTE AND LIENS
DATED MAY 20, 1991 AS RECORDED IN THE OFFICIAL PUBLIC RECORDS OF REAL PROPERTY
OF XXXXXX COUNTY, TEXAS, UNDER CLERK'S FILE NO. N191393, AND INCLUDING ANY AND
ALL AMENDMENTS, MODIFICATIONS AND/OR RENEWALS THEREOF.
FOR VALUE RECEIVED, the undersigned, XXXXXX-XXXXXX, INC., a Texas
corporation (hereinafter called the "Maker"), promises to pay to the order of
BANK ONE, TEXAS, N.A., a national banking association (hereinafter called the
"Payee"), at its office located at 000 XXXXXX XXXXXX, XXXXXXX, XXXXX 00000, or
at such other place as the Payee may designate in writing to the Maker, in
lawful money of the United States of America, the principal sum of up to FOUR
MILLION TWO HUNDRED THOUSAND AND NO/100 DOLLARS ($4,200,000.00), or so much
thereof that may be advanced and outstanding pursuant to the hereinafter defined
Loan Agreement, together with interest thereon from the date hereof until
maturity (determined on a daily basis and for the actual number of days elapsed
based on either a 365 or 366 day year, as the case may be) at a fluctuating rate
per annum equal to the lesser of (i) the Base Rate in effect from day-to-day and
(ii) the Maximum Rate. If at any time and from time to time the rate of
interest calculated pursuant to item (i) above would exceed the Maximum Rate,
thereby causing the interest payable hereon to be limited to the Maximum Rate,
then any subsequent reduction in the rate specified in item (i) above shall not
reduce the rate of interest hereon below the Maximum Rate until the total amount
of interest accrued hereon from and after the date of the first advance
hereunder equals the amount of interest which would have accrued hereon if the
rate specified in item (i) above had at all times been in effect.
As used herein, the term "Base Rate" means, at any time, the rate of
interest per annum established from time to time by Payee. Without notice to
the Maker or any other person, the Base Rate shall change automatically from
time to time as and in the amount
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by which such Base Rate shall fluctuate, with each such change to be effective
as of the date of each change in such Base Rate. The Base Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. The Payee may make commercial loans or other loans at rates of
interest at, above or below the Base Rate.
As used herein, the term "Maximum Rate" shall mean, with respect to the
holder hereof, the maximum nonusurious interest rate, if any, that at any time,
may be under applicable law contracted for, taken, reserved, charged or received
on the indebtedness evidenced by this Note. If applicable law ceases to provide
for such a maximum rate of interest, the Maximum Rate shall be equal to eighteen
percent (18%) per annum.
The principal of and all accrued but unpaid interest on this Note shall be
due and payable as follows:
Monthly principal installments of TWENTY-THREE THOUSAND THREE HUNDRED
THIRTY-THREE AND 33/100 DOLLARS ($23,333.33) each, plus interest accrued on
the outstanding principal balance, the first installment becoming due and
payable on or before JULY 21, 1997, with a like installment of principal,
plus interest accrued on the outstanding principal balance becoming due and
payable on or before the 21st day of each calendar month thereafter until
JUNE 18, 2002, when this Note, including all principal and accrued and
unpaid interest hereon shall be finally due and payable.
The Maker reserves the right to prepay this Note, in whole or in part, at
any time, without penalty or notice. All payments hereunder, whether designated
as payments of principal or interest, shall be applied: first to unpaid and
accrued interest; then to the discharge of any expenses or damages for which the
Payee may be entitled to receive reimbursement under the terms of this Note or
under the terms of any document executed in connection herewith; and, lastly, to
unpaid principal in the inverse order of maturity. Unless changed in accordance
with law, the applicable method of calculating the usury ceiling rate under
Texas law shall be the indicated (weekly) ceiling rate in effect and applicable
to the loan evidenced by this Note, as provided in Tex. Rev. Civ. Stat. Xxx.
art. 5069-1.04, as amended; provided, that the Payee may also rely on alternate
maximum rates of interest under other applicable laws if they are higher. All
past due principal and interest on this Note, whether due as the result of
acceleration of maturity or otherwise, shall bear interest from the date the
payment thereof shall have become due until the same have been fully discharged
by payment at the Maximum Rate.
This Note has been executed and delivered pursuant to, and is subject to
certain terms and conditions in, that certain Amended and Restated Letter Loan
Agreement of even date herewith, (said Agreement as previously amended and as it
may hereafter be amended
Initialed for
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or modified from time to time being the "Loan Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein defined),
and is the "Real Estate Note" referred to therein. The Payee shall be entitled
to the benefits provided for in the Loan Agreement. Reference is made to the
Loan Agreement for the statement of any obligation of the Payee to advance funds
hereunder and the Events of Default (as defined therein) upon which the maturity
of this Note may be accelerated. The time of payment of this Note is also
subject to acceleration in the event the Maker defaults or otherwise fails to
discharge its obligations under any of the instruments securing payment hereof.
In the Event of Default hereunder or under any of the instruments securing
payment hereof and the placing of this Note in the hands of an attorney for
collection (whether or not suit is filed), or if this Note is collected by suit
or legal proceedings or through the probate court or bankruptcy proceedings, the
Maker agrees to pay the holder hereof the costs and reasonable attorney's fees
incurred in the collection hereof.
As recited in Paragraph 10(e) of the Loan Agreement, which paragraph is
incorporated by reference herein, notwithstanding any provision herein to the
contrary, the Payee shall never be entitled to receive or collect interest
hereunder, nor shall or may amounts received hereunder be credited to interest
hereunder, so that the Payee shall receive or be paid interest exceeding the
maximum amount permitted by applicable law.
Any check, draft, money order or other instrument given in payment of all
or any portion hereof may be accepted by the holder hereof and handled in
collection in the customary manner, but the same shall not constitute payment
hereunder or diminish any rights of the holder hereof except to the extent that
actual cash proceeds of such instrument are unconditionally received by the
holder and applied to this indebtedness in the manner elsewhere herein provided.
It is further agreed that the Payee shall have a first lien on all deposits
and other sums at any time credited by or due from the Payee to any maker,
endorser, surety or guarantor hereof as collateral security for the payment of
this Note, and the Payee, at its option, may at any time, without notice and
without any liability, hold all or any part of any such deposits or other sums
until all sums owing on this Note have been paid in full and/or apply or set off
all or any part of any such deposits or other sums credited by or due from the
Payee to or against any sums due on this Note in any manner and in any order of
preference which the Payee, in its sole discretion, chooses.
The loan evidenced by this Note was negotiated and consummated in the State
of Texas and it is agreed and understood that the legality, enforceability and
construction hereof shall be governed by Texas law and, to the extent
applicable, by the laws of the United States of America. The Maker and the
Payee expressly agree, pursuant to Article 15.10(b) of Chapter 15 ("Chapter 15")
of the Texas Credit Code, that Chapter 15 shall not
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apply to this Note or to any advance evidenced by this Note and that this Note
and all such advances shall not be governed by or subject to the provisions of
Chapter 15 in any manner whatsoever.
This Note is secured as described in one or more Loan Documents referred to
in the Loan Agreement, and secured as more particularly described in that
certain Deed of Trust, Security Agreement, and Assignment of Rents and Profits
of even date herewith.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
XXXXXX-XXXXXX, INC.
By /s/ XXXXXX X. XXXXXX
---------------------------
Xxxxxx X. Xxxxxx, Chairman
of the Board of Directors
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RENEWAL AND MODIFICATION
PROMISSORY NOTE
(EQUIPMENT NOTE)
$1,390,000.00 HOUSTON, TEXAS JUNE 18, 1997
THIS RENEWAL AND MODIFICATION PROMISSORY NOTE (THE "NOTE") IS EXECUTED IN
RENEWAL, EXTENSION, MODIFICATION AND ENLARGEMENT, BUT NOT EXTINGUISHMENT,
SUBSTITUTION, NOVATION OR DISCHARGE, OF THE INDEBTEDNESS EVIDENCED BY THAT ONE
CERTAIN PROMISSORY NOTE IN THE ORIGINAL PRINCIPAL SUM OF $575,000.00, DATED
SEPTEMBER 22, 1987, EXECUTED BY XXXXXX-XXXXXX, INC. IN FAVOR OF TEXAS COMMERCE
BANK OF FORT WORTH, WHICH NOTE WAS DULY TRANSFERRED AND ASSIGNED TO BANK ONE,
TEXAS, N.A., INCLUDING ANY AND ALL AMENDMENTS, MODIFICATIONS AND/OR RENEWALS
THEREOF.
FOR VALUE RECEIVED, the undersigned, XXXXXX-XXXXXX, INC., a Texas
corporation (hereinafter called the "Maker"), promises to pay to the order of
BANK ONE, TEXAS, N.A., a national banking association (hereinafter called the
"Payee"), at its office located at 000 XXXXXX XXXXXX, XXXXXXX, XXXXX 00000, or
at such other place as the Payee may designate in writing to the Maker, in
lawful money of the United States of America, the principal sum of up to ONE
MILLION THREE HUNDRED NINETY THOUSAND AND NO/100 DOLLARS ($1,390,000.00), or so
much thereof that may be advanced and outstanding pursuant to the hereinafter
defined Loan Agreement, together with interest thereon from the date hereof
until maturity (determined on a daily basis and for the actual number of days
elapsed based on either a 365 or 366 day year, as the case may be) at a
fluctuating rate per annum equal to the lesser of (i) the Base Rate in effect
from day-to-day and (ii) the Maximum Rate. If at any time and from time to time
the rate of interest calculated pursuant to item (i) above would exceed the
Maximum Rate, thereby causing the interest payable hereon to be limited to the
Maximum Rate, then any subsequent reduction in the rate specified in item (i)
above shall not reduce the rate of interest hereon below the Maximum Rate until
the total amount of interest accrued hereon from and after the date of the first
advance hereunder equals the amount of interest which would have accrued hereon
if the rate specified in item (i) above had at all times been in effect.
As used herein, the term "Base Rate" means, at any time, the rate of
interest per annum established from time to time by Payee. Without notice to
the Maker or any other person, the Base Rate shall change automatically from
time to time as and in the amount by which such Base Rate shall fluctuate, with
each such change to be effective as of the date of each change in such Base
Rate. The Base Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. The Payee may make
commercial loans or other loans at rates of interest at, above or below the Base
Rate.
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As used herein, the term "Maximum Rate" shall mean, with respect to the
holder hereof, the maximum nonusurious interest rate, if any, that at any time,
may be under applicable law contracted for, taken, reserved, charged or received
on the indebtedness evidenced by this Note. If applicable law ceases to provide
for such a maximum rate of interest, the Maximum Rate shall be equal to eighteen
percent (18%) per annum.
The principal of and all accrued but unpaid interest on this Note shall be
due and payable as follows:
Monthly installments of (i) all accrued and unpaid interest hereon, plus
(ii) a principal installment in an amount based on an eighty-four (84)
month equal amortization of the original outstanding principal amount of
this Note; the first installment becoming due and payable on or before the
thirtieth day after the advance of principal hereunder, with a like
installment of principal, plus interest accrued on the outstanding
principal balance becoming due and payable on or before the same day of
each calendar month thereafter until JUNE 18, 2002, when this Note,
including all principal and accrued and unpaid interest hereon shall be
finally due and payable.
The Maker reserves the right to prepay this Note, in whole or in part, at
any time, without penalty or notice. All payments hereunder, whether designated
as payments of principal or interest, shall be applied: first to unpaid and
accrued interest; then to the discharge of any expenses or damages for which the
Payee may be entitled to receive reimbursement under the terms of this Note or
under the terms of any document executed in connection herewith; and, lastly, to
unpaid principal in the inverse order of maturity. Unless changed in accordance
with law, the applicable method of calculating the usury ceiling rate under
Texas law shall be the indicated (weekly) ceiling rate in effect and applicable
to the loan evidenced by this Note, as provided in Tex. Rev. Civ. Stat. Xxx.
art. 5069-1.04, as amended; provided, that the Payee may also rely on alternate
maximum rates of interest under other applicable laws if they are higher. All
past due principal and interest on this Note, whether due as the result of
acceleration of maturity or otherwise, shall bear interest from the date the
payment thereof shall have become due until the same have been fully discharged
by payment at the Maximum Rate.
This Note has been executed and delivered pursuant to, and is subject to
certain terms and conditions in, that certain Amended and Restated Letter Loan
Agreement of even date herewith, (said Agreement as previously amended and as it
may hereafter be amended or modified from time to time being the "Loan
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined), and is the "Equipment Note" referred to
therein. The Payee shall be entitled to the benefits provided for in the Loan
Agreement. Reference is made to the Loan Agreement for the statement of any
obligation of the Payee to advance funds hereunder and the Events of Default (as
defined therein) upon which the maturity of this Note may be accelerated. The
time of payment
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of this Note is also subject to acceleration in the event the Maker defaults or
otherwise fails to discharge its obligations under any of the instruments
securing payment hereof.
In the Event of Default hereunder or under any of the instruments securing
payment hereof and the placing of this Note in the hands of an attorney for
collection (whether or not suit is filed), or if this Note is collected by suit
or legal proceedings or through the probate court or bankruptcy proceedings, the
Maker agrees to pay the holder hereof the costs and reasonable attorney's fees
incurred in the collection hereof.
As recited in Paragraph 10(e) of the Loan Agreement, which paragraph is
incorporated by reference herein, notwithstanding any provision herein to the
contrary, the Payee shall never be entitled to receive or collect interest
hereunder, nor shall or may amounts received hereunder be credited to interest
hereunder, so that the Payee shall receive or be paid interest exceeding the
maximum amount permitted by applicable law.
Any check, draft, money order or other instrument given in payment of all
or any portion hereof may be accepted by the holder hereof and handled in
collection in the customary manner, but the same shall not constitute payment
hereunder or diminish any rights of the holder hereof except to the extent that
actual cash proceeds of such instrument are unconditionally received by the
holder and applied to this indebtedness in the manner elsewhere herein provided.
It is further agreed that the Payee shall have a first lien on all deposits
and other sums at any time credited by or due from the Payee to any maker,
endorser, surety or guarantor hereof as collateral security for the payment of
this Note, and the Payee, at its option, may at any time, without notice and
without any liability, hold all or any part of any such deposits or other sums
until all sums owing on this Note have been paid in full and/or apply or set off
all or any part of any such deposits or other sums credited by or due from the
Payee to or against any sums due on this Note in any manner and in any order of
preference which the Payee, in its sole discretion, chooses.
The loan evidenced by this Note was negotiated and consummated in the State
of Texas and it is agreed and understood that the legality, enforceability and
construction hereof shall be governed by Texas law and, to the extent
applicable, by the laws of the United States of America. The Maker and the
Payee expressly agree, pursuant to Article 15.10(b) of Chapter 15 ("Chapter 15")
of the Texas Credit Code, that Chapter 15 shall not apply to this Note or to any
advance evidenced by this Note and that this Note and all such advances shall
not be governed by or subject to the provisions of Chapter 15 in any manner
whatsoever.
This Note is secured as described in one or more Loan Documents referred to
in the Loan Agreement.
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/s/ TR
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THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
XXXXXX-XXXXXX, INC.
By /s/ XXXXXX X. XXXXXX
------------------------------
Xxxxxx X. Xxxxxx, Chairman
of the Board of Directors
Page 4 of a 4 Page $1,390,000.00
Renewal and Modification Promissory Note
RENEWAL MASTER REVOLVING CREDIT NOTE
$2,200,000.00 HOUSTON, TEXAS JUNE 18, 1997
THIS RENEWAL MASTER REVOLVING CREDIT NOTE (THE "NOTE") IS EXECUTED AND
DELIVERED IN REPLACEMENT, RENEWAL AND EXTENSION (NOT IN EXTINGUISHMENT) OF THE
INDEBTEDNESS, BOTH UNPAID PRINCIPAL AND ACCRUED UNPAID INTEREST, AS OF THE DATE
HEREOF, ON A CERTAIN REVOLVING PROMISSORY NOTE DATED APRIL 21, 1995, IN THE
ORIGINAL PRINCIPAL AMOUNT OF $2,200,000.00 (THE "ORIGINAL NOTE"), WHICH ORIGINAL
NOTE WAS EXECUTED BY XXXXXX-XXXXXX, INC. AND PAYABLE TO THE ORDER OF BANK ONE
TEXAS, N.A., INCLUDING ANY AND ALL AMENDMENTS, MODIFICATIONS AND/OR RENEWALS
THEREOF, AND ALL LIENS, SECURITY INTERESTS, PLEDGES, COLLATERAL ASSIGNMENTS AND
GUARANTIES SECURING AND/OR GUARANTEEING PAYMENT OF THE ORIGINAL NOTE ARE HEREBY
RATIFIED, CONFIRMED, RENEWED, EXTENDED AND BROUGHT FORWARD AS SECURITY AND/OR
GUARANTY FOR THE PAYMENT HEREOF.
FOR VALUE RECEIVED, the undersigned, XXXXXX-XXXXXX, INC., a Texas
(hereinafter called the "Maker"), promises to pay to the order of BANK ONE
TEXAS, N.A., a national banking association (hereinafter called the "Payee"), at
its office located at 000 XXXXXX XXXXXX, XXXXXXX, XXXXX 00000, or at such other
place as the Payee may designate in writing to the Maker, in lawful money of the
United States of America, the principal sum of TWO MILLION TWO HUNDRED THOUSAND
AND NO/100 DOLLARS ($2,200,000.00), or so much thereof that may be advanced and
outstanding pursuant to the hereinafter defined Loan Agreement, together with
interest thereon from the date hereof until maturity (determined on a daily
basis and for the actual number of days elapsed based on either a 365 or 366 day
year, as the case may be) at a fluctuating rate per annum equal to the lesser of
(i) the Base Rate in effect from day-to-day and (ii) the Maximum Rate. If at
any time and from time to time the rate of interest calculated pursuant to item
(i) above would exceed the Maximum Rate, thereby causing the interest payable
hereon to be limited to the Maximum Rate, then any subsequent reduction in the
rate specified in item (i) above shall not reduce the rate of interest hereon
below the Maximum Rate until the total amount of interest accrued hereon from
and after the date of the first advance hereunder equals the amount of interest
which would have accrued hereon if the rate specified in item (i) above had at
all times been in effect.
As used herein, the term "Base Rate" means, at any time, the rate of
interest per annum established from time to time by Payee. Without notice to
the Maker or any other person, the Base Rate shall change automatically from
time to time as and in the amount by which such Base Rate shall fluctuate, with
each such change to be effective
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/s/ TR
---------------
as of the date of each change in such Base Rate. The Base Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. The Payee may make commercial loans or other loans at rates of
interest at, above or below the Base Rate.
As used herein, the term "Maximum Rate" shall mean, with respect to the
holder hereof, the maximum nonusurious interest rate, if any, that at any time,
may be under applicable law contracted for, taken, reserved, charged or received
on the indebtedness evidenced by this Note. If applicable law ceases to provide
for such a maximum rate of interest, the Maximum Rate shall be equal to eighteen
percent (18%) per annum.
Accrued interest hereon on the outstanding principal balance of this Note
shall be due and payable in monthly installments as it accrues, the first
installment becoming due and payable on or before JUNE 30, 1997, with a like
installment becoming due and payable on or before the last day of each
succeeding calendar month thereafter until APRIL 30, 1999 (the "Maturity Date"),
when the outstanding principal balance of this Note, and all accrued and unpaid
interest hereon, shall be finally due and payable. Until the earlier of an
Event of Default or the Maturity Date, the Maker may borrow, pay, prepay in
whole or in part and reborrow hereunder, subject to the terms and provisions
relating to this Note as set forth in the Amended and Restated Letter Loan
Agreement of even date herewith (said Agreement, as it may hereafter be amended
or otherwise modified from time to time, being the "Loan Agreement", the terms
defined therein and not otherwise defined herein being used herein as therein
defined) of even date herewith, so long as not more than $2,200,000 is
outstanding at any one time, it being understood that this Note is a master
revolving credit note and it being expressly contemplated that by reason of
prepayments hereon there may be times when no indebtedness is owing hereunder;
but, notwithstanding such occurrences, this Note shall remain valid and shall be
in full force and effect as to loans or advances made subsequent to such
occurrences.
The Maker reserves the right to prepay this Note, in whole or in part, at
any time, without penalty or notice. All payments hereunder, whether designated
as payments of principal or interest, shall be applied: first to unpaid and
accrued interest; then to the discharge of any expenses or damages for which the
Payee may be entitled to receive reimbursement under the terms of this Note or
under the terms of any document executed in connection herewith; and, lastly, to
unpaid principal in the inverse order of maturity. Unless changed in accordance
with law, the applicable method of calculating the usury ceiling rate under
Texas law shall be the indicated (weekly) ceiling rate in effect and applicable
to the loan evidenced by this Note, as provided in Tex. Rev. Civ. Stat. Xxx.
art. 5069-1.04, as amended; provided, that the
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/s/ TR
---------------
Payee may also rely on alternate maximum rates of interest under other
applicable laws if they are higher. All past due principal and interest on this
Note, whether due as the result of acceleration of maturity or otherwise, shall
bear interest from the date the payment thereof shall have become due until the
same have been fully discharged by payment at a per annum rate equal to the
lesser of (i) the Base Rate plus five percent (5%) or (ii) the Maximum Rate.
This Note has been executed and delivered pursuant to, and is subject to
certain terms and conditions in, the Loan Agreement and is the "Revolving Note"
referred to therein. The Payee shall be entitled to the benefits provided for
in the Loan Agreement. Reference is made to the Loan Agreement for the
statement of any obligation of the Payee to advance funds hereunder and the
Events of Default (as defined therein) upon which the maturity of this Note may
be accelerated. The time of payment of this Note is also subject to
acceleration in the event the Maker defaults or otherwise fails to discharge its
obligations under any of the instruments securing payment hereof.
All co-signers and endorsers of this Note are to be regarded as principals
as to their respective joint and several liability to any legal holder hereof
and the Maker, and each of the guarantors, sureties and endorsers, hereby
expressly and severally waive grace, and all notices, demands, presentments for
payment, notice of nonpayment, protest and notice of protest, notice of intent
to accelerate, notice of acceleration of the indebtedness due hereunder, and
diligence in collecting this Note or enforcing any security rights of the Payee
under any document securing this Note, and agree (i) that the Payee or other
legal holder of this Note may, at any time, and from time to time, on request of
or by agreement with the Maker, extend the date of maturity of all or any part
hereof, without notifying or consulting with any Maker or principal hereof, who
shall remain fully obligated for the payment hereof; (ii) that it will not be
necessary for the Payee or any holder hereof, in order to enforce payment of
this Note, to first institute or exhaust its remedies against the Maker or other
party liable therefor or to enforce its rights against any security for this
Note; and (iii) to any substitution, exchange or release of any security now or
hereafter given for this Note or the release of any party primarily or
secondarily liable hereon.
In the event of default hereunder or under any of the instruments securing
payment hereof and the placing of this Note in the hands of an attorney for
collection (whether or not suit is filed), or if this Note is collected by suit
or legal proceedings or through the probate court or bankruptcy proceedings, the
Maker agrees to pay the holder hereof the costs and reasonable attorney's fees
incurred in the collection hereof.
Initialed for
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/s/ TR
---------------
As recited in Paragraph 10(e) of the Loan Agreement, which Paragraph is
incorporated by reference herein, notwithstanding any provision herein to the
contrary, the Payee shall never be entitled to receive or collect interest
hereunder, nor shall or may amounts received hereunder be credited to interest
hereunder, so that the Payee shall receive or be paid interest exceeding the
maximum amount permitted by applicable law.
Any check, draft, money order or other instrument given in payment of all
or any portion hereof may be accepted by the holder hereof and handled in
collection in the customary manner, but the same shall not constitute payment
hereunder or diminish any rights of the holder hereof except to the extent that
actual cash proceeds of such instrument are unconditionally received by the
holder and applied to this indebtedness in the manner elsewhere herein provided.
It is further agreed that the Payee shall have a first lien on all deposits
and other sums at any time credited by or due from the Payee to any maker,
endorser, surety or guarantor hereof as collateral security for the payment of
this Note, and the Payee, at its option, may at any time, without notice and
without any liability, hold all or any part of any such deposits or other sums
until all sums owing on this Note have been paid in full and/or apply or set off
all or any part of any such deposits or other sums credited by or due from the
Payee to or against any sums due on this Note in any manner and in any order of
preference which the Payee, in its sole discretion, chooses.
The loan evidenced by this Note was negotiated and consummated in the State
of Texas and it is agreed and understood that the legality, enforceability and
construction hereof shall be governed by Texas law and, to the extent
applicable, by the laws of the United States of America. The Maker and the
Payee expressly agree, pursuant to Article 15.10(b) of Chapter 15 ("Chapter 15")
of the Texas Credit Code, that Chapter 15 shall not apply to this Note or to any
advance evidenced by this Note and that this Note and all such advances shall
not be governed by or subject to the provisions of Chapter 15 in any manner
whatsoever.
Payment of this Note is secured as described in one or more Loan Documents
referred to in the Loan Agreement.
Initialed for
Page 4 of a 5 Page $2,200,000.00 Credit Note Identification:
/s/ TR
---------------
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
XXXXXX-XXXXXX, INC.
By /s/ XXXXXX X. XXXXXX
------------------------------
Xxxxxx X. Xxxxxx, Chairman
of the Board of Directors
Page 5 of a 5 Page $2,200,000.00 Credit Note
RENEWAL AND MODIFICATION ADVANCING PROMISSORY NOTE
("ADVANCING NOTE")
$1,000,000.00 HOUSTON, TEXAS JUNE 18, 1997
THIS RENEWAL AND MODIFICATION ADVANCING PROMISSORY NOTE (THE "NOTE") IS
EXECUTED AND DELIVERED IN REPLACEMENT, MODIFICATION, RENEWAL AND EXTENSION (NOT
IN EXTINGUISHMENT) OF THE INDEBTEDNESS, BOTH UNPAID PRINCIPAL AND ACCRUED UNPAID
INTEREST, AS OF THE DATE HEREOF, ON A CERTAIN PROMISSORY NOTE (ADVANCING TERM)
DATED MAY 28, 1996, IN THE ORIGINAL PRINCIPAL AMOUNT OF UP TO $1,000,000.00 (THE
"ORIGINAL NOTE"), WHICH ORIGINAL NOTE WAS EXECUTED BY XXXXXX-XXXXXX, INC. AND
PAYABLE TO THE ORDER OF BANK ONE TEXAS, N.A., INCLUDING ANY AND ALL AMENDMENTS,
MODIFICATIONS AND/OR RENEWALS THEREOF, AND ALL LIENS, SECURITY INTERESTS,
PLEDGES, COLLATERAL ASSIGNMENTS AND GUARANTIES SECURING AND/OR GUARANTEEING
PAYMENT OF THE ORIGINAL NOTE ARE HEREBY RATIFIED, CONFIRMED, RENEWED, EXTENDED
AND BROUGHT FORWARD AS SECURITY AND/OR GUARANTY FOR THE PAYMENT HEREOF.
FOR VALUE RECEIVED, the undersigned, XXXXXX-XXXXXX, INC., a Texas
corporation (hereinafter called the "Maker"), promises to pay to the order of
BANK ONE, TEXAS, NA, a national banking association (hereinafter called the
"Payee"), at its office located at 000 XXXXXX XXXXXX, XXXXXXX, XXXXX 00000, or
at such other place as the Payee may designate in writing to the Maker, in
lawful money of the United States of America, the principal sum of ONE MILLION
AND NO/100 DOLLARS ($1,000,000.00), or so much thereof that may be advanced and
outstanding pursuant to the hereinafter defined Loan Agreement, together with
interest thereon from the date hereof until maturity (determined on a daily
basis and for the actual number of days elapsed based on either a 365 or 366 day
year, as the case may be) at a fluctuating rate per annum equal to the lesser of
(i) the Base Rate in effect from day-to-day and (ii) the Maximum Rate. If at
any time and from time to time the rate of interest calculated pursuant to item
(i) above would exceed the Maximum Rate, thereby causing the interest payable
hereon to be limited to the Maximum Rate, then any subsequent reduction in the
rate specified in item (i) above shall not reduce the rate of interest hereon
below the Maximum Rate until the total amount of interest accrued hereon from
and after the date of the first advance hereunder equals the amount of interest
which would have accrued hereon if the rate specified in item (i) above had at
all times been in effect.
Initialed for
Identification:
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---------------
As used herein, the term "Base Rate" means, at any time, the rate of
interest per annum established from time to time by Payee. Without notice to
the Maker or any other person, the Base Rate shall change automatically from
time to time as and in the amount by which such Base Rate shall fluctuate, with
each such change to be effective as of the date of each change in such Base
Rate. The Base Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer. The Payee may make
commercial loans or other loans at rates of interest at, above or below the Base
Rate.
As used herein, the term "Maximum Rate" shall mean, with respect to the
holder hereof, the maximum nonusurious interest rate, if any, that at any time,
may be under applicable law contracted for, taken, reserved, charged or received
on the indebtedness evidenced by this Note. If applicable law ceases to provide
for such a maximum rate of interest, the Maximum Rate shall be equal to eighteen
percent (18%) per annum.
The principal of and all accrued but unpaid interest on this Note shall be
due and payable as follows:
Accrued interest hereon shall be due and payable in monthly
installments as it accrues, the first such installment becoming due and
payable on or before JULY 31, 1997, with a like installment being due and
payable on or before the last day of each succeeding calendar month
thereafter until and including JUNE 18, 1998 (the "Advancing Termination
Date"). Thereafter, this Note shall be due and payable in monthly
installments of (i) all accrued and unpaid interest hereon, plus (ii) a
principal installment in an amount based on a sixty (60) month equal
amortization of the outstanding principal amount of this Note as of the
Advancing Termination Date; the first such installment becoming due and
payable on or before one month after the Advancing Termination Date, with a
like installment becoming due and payable on or before the same day of each
of the succeeding calendar months thereafter until JUNE 18, 2003, when this
Note, including all outstanding principal and accrued, unpaid interest
hereon shall be fully and finally paid.
The Maker reserves the right to prepay this Note, in whole or in part, at
any time, without penalty or notice. All payments hereunder, whether designated
as payments of principal or interest, shall be applied: first to unpaid and
accrued interest; then to the discharge of any expenses or damages for which the
Payee may be entitled to receive reimbursement under the terms of this Note or
under the terms of any document executed in connection herewith; and, lastly, to
unpaid principal in the
Initialed for
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---------------
inverse order of maturity. Unless changed in accordance with law, the
applicable method of calculating the usury ceiling rate under Texas law shall be
the indicated (weekly) ceiling rate in effect and applicable to the loan
evidenced by this Note, as provided in Tex. Rev. Civ. Stat. Xxx. art. 5069-1.04,
as amended; provided, that the Payee may also rely on alternate maximum rates of
interest under other applicable laws if they are higher. All past due principal
and interest on this Note, whether due as the result of acceleration of maturity
or otherwise, shall bear interest from the date the payment thereof shall have
become due until the same have been fully discharged by payment at the Maximum
Rate.
This Note has been executed and delivered pursuant to, and is subject to
certain terms and conditions in, that certain Amended and Restated Letter Loan
Agreement of even date herewith (said Agreement as it may hereafter be amended
or modified from time to time being the "Loan Agreement", the terms defined
therein and not otherwise defined herein being used herein as therein defined),
and is the "Advancing Note" referred to therein. The Payee shall be entitled to
the benefits provided for in the Loan Agreement. Reference is made to the Loan
Agreement for the statement of any obligation of the Payee to advance funds
hereunder and the Events of Default (as defined therein) upon which the maturity
of this Note may be accelerated. The time of payment of this Note is also
subject to acceleration in the event the Maker defaults or otherwise fails to
discharge its obligations under any of the instruments securing payment hereof.
In the Event of Default hereunder or under any of the instruments securing
payment hereof and the placing of this Note in the hands of an attorney for
collection (whether or not suit is filed), or if this Note is collected by suit
or legal proceedings or through the probate court or bankruptcy proceedings, the
Maker agrees to pay the holder hereof the costs and reasonable attorney's fees
incurred in the collection hereof.
As recited in Paragraph 10(e) of the Loan Agreement, which paragraph is
incorporated by reference herein, notwithstanding any provision herein to the
contrary, the Payee shall never be entitled to receive or collect interest
hereunder, nor shall or may amounts received hereunder be credited to interest
hereunder, so that the Payee shall receive or be paid interest exceeding the
maximum amount permitted by applicable law.
Any check, draft, money order or other instrument given in payment of all
or any portion hereof may be accepted by the holder hereof and handled in
collection in the customary manner, but the same shall not constitute payment
hereunder or diminish any rights of the holder hereof except to the extent that
actual cash proceeds of such
Initialed for
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---------------
instrument are unconditionally received by the holder and applied to this
indebtedness in the manner elsewhere herein provided.
It is further agreed that the Payee shall have a first lien on all deposits
and other sums at any time credited by or due from the Payee to any maker,
endorser, surety or guarantor hereof as collateral security for the payment of
this Note, and the Payee, at its option, may at any time, without notice and
without any liability, hold all or any part of any such deposits or other sums
until all sums owing on this Note have been paid in full and/or apply or set off
all or any part of any such deposits or other sums credited by or due from the
Payee to or against any sums due on this Note in any manner and in any order of
preference which the Payee, in its sole discretion, chooses.
The loan evidenced by this Note was negotiated and consummated in the State
of Texas and it is agreed and understood that the legality, enforceability and
construction hereof shall be governed by Texas law and, to the extent
applicable, by the laws of the United States of America. The Maker and the
Payee expressly agree, pursuant to Article 15.10(b) of Chapter 15 ("Chapter 15")
of the Texas Credit Code, that Chapter 15 shall not apply to this Note or to any
advance evidenced by this Note and that this Note and all such advances shall
not be governed by or subject to the provisions of Chapter 15 in any manner
whatsoever.
This Note is secured as described in one or more Loan Documents referred to
in the Loan Agreement.
THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
XXXXXX-XXXXXX, INC.
By /s/ XXXXXX X. XXXXXX
---------------------------
Xxxxxx X. Xxxxxx, Chairman
of the Board of Directors
Page 4 of a 4 Page $1,000,000.00 Advancing Note
DEED OF TRUST, SECURITY AGREEMENT
AND ASSIGNMENT OF RENTS
THE STATE OF TEXAS (S)
(S) KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF TARRANT (S)
COUNTY OF XXXXXX (S)
THAT THE UNDERSIGNED, XXXXXX-XXXXXX, INC., a Texas corporation (hereinafter
called "Grantor"), whose address is 0000 Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxx 00000,
for and in consideration of the indebtedness hereinafter described, have
granted, bargained, sold and conveyed, and by these presents do grant, bargain,
sell and convey, in trust, unto Xxxx Xxxxxxxx, 000 Xxxxxx, Xxxxxxx, Xxxxx 00000,
as Trustee and all substitute trustees hereunder (all of whom are hereinafter
called "Trustee"), and unto his or their successors and assigns, forever, all
and singular the property hereinafter described, situated in the Counties of
Xxxxxx and Tarrant, and State of Texas, to wit:
Those certain tracts or parcels of land being more particularly described
by metes and bounds on Exhibit "A" attached hereto and made a part hereof
for all purposes
together with (a) all rights, titles, interests, estates, reversions and
remainders owned and to be owned by Grantors in and to the above described
premises and in and to the properties covered hereby and all lands owned or to
be owned by Grantors next or adjacent to any land herein described or herein
mentioned; (b) all buildings and improvements now or hereafter located on the
lands described or mentioned; (c) all rights, titles and interests now owned or
hereafter acquired by Grantors in and to all easements, streets and rights-of-
way of every kind and nature adjoining the said lands, and all public or private
utility connections thereto, and all appurtenances, servitudes, rights, ways,
privileges and prescriptions thereunto; (d) the escrowed sums described in
paragraph (5) hereof, all goods, equipment, fixtures, inventory, machinery,
furniture, furnishings and other personal property that is now owned or
hereafter acquired by Grantors and now or hereafter affixed to, or located on,
the above described real estate and used or usable for any present or future
operation of any building or buildings now or hereafter located on said lands,
including without limitation, all rights, titles and interests of Grantors in
and to any such personal property that may be subject to any title retention or
security agreement superior in lien or security interest to the lien or security
interest of this Deed of Trust; (e) all permits, licenses, franchises,
certificates, utility commitments and/or reservations, wastewater capacity
reservations and other rights and privileges obtained in connection with the
property described herein; (f) all rights, titles and interests of Grantors in
and to all timber to be cut, or crops to be harvested, from the real estate
covered hereby and all minerals in, under, and upon, produced and to be produced
from said real estate; and without limitation of the foregoing, any and all
rights, rents, revenues, benefits, leases, contracts, accounts, general
intangibles, money, instruments, documents, tenements, hereditaments and
appurtenances now or hereafter owned by Grantors and appertaining to, generated
from, arising out of or belonging to the above-described properties or any part
thereof (all of the aforesaid being hereinafter sometimes called the "Mortgaged
Property").
TO HAVE AND TO HOLD the Mortgaged Property unto Trustee and his assigns,
forever, and Grantors do hereby bind Grantors, their respective heirs, legal
representatives, successors and assigns, to warrant and forever defend the
Mortgaged Property unto Trustee, his successors and assigns, forever, against
the claim or claims of all persons whomsoever claiming or to claim the same, or
any part thereof.
This conveyance is made in trust, however, to secure and enforce the
payment of those certain promissory notes (hereinafter sometimes called "Note",
whether one or more) of even date herewith as follows: (i) a Term Promissory
Note in the original principal amount of $4,200,000.00 (the "Real Estate Note")
with a final maturity date of June 18, 2002; (ii) a Term Promissory Note in the
original principal amount of $1,390,000.00 (the "Equipment Note") with a final
maturity date of June 18, 2002; (iii) a Revolving Promissory Note (the
"Revolving Note") in the original principal amount of $2,200,000.00 with a final
maturity date of April 30, 1999; and (iv) an Advancing Term Promissory Note (the
"Advancing Note") in the original principal amount of $1,000,000.00 with a final
maturity date of June 18, 2003, executed by Grantors, payable to the order of
BANK ONE, TEXAS, N.A. (hereinafter called "Beneficiary"), whose address is 000
Xxxxxx, Xxxxxxx, Xxxxx 00000, which Note bears interest at the rate therein
stated, such Note providing in part, that if certain defaults occur, the unpaid
principal thereof and all accrued unpaid interest may be declared due and
payable, at the holder's option, prior to the stated maturity thereof, and
providing further for the payment of attorney's fees and other expenses of
collection under certain circumstances, and (b) the performance of all covenants
and agreements of Grantors herein.
This Deed of Trust, Security Agreement and Assignment of Rents (herein
called "Deed of Trust") shall secure, in addition to the Note, all funds
hereafter advanced by Beneficiary to or for the benefit of Grantors, as
contemplated by any covenant or provision herein contained or for any other
purpose related thereto, (all of the aforesaid, including all amounts payable
under the Note, being hereinafter sometimes called the "Indebtedness"). Said
indebtedness shall be payable at the above stated address of Beneficiary or at
such other place as Beneficiary may hereafter direct in writing; and, unless
otherwise provided herein or in the instrument evidencing the Indebtedness,
shall bear interest at the same rate per annum as the Note bears, from date of
accrual of the Indebtedness until paid. In addition, any and all attorney's
fees and expenses of collection payable under the terms of the Note shall be and
constitute a part of the Indebtedness secured hereby. This Deed of Trust shall
also secure all renewals, rearrangements, extensions and enlargements of any of
the Indebtedness.
For $10.00 and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantors have GRANTED, BARGAINED,
SOLD, ASSIGNED and CONVEYED, and by these presents do GRANT, BARGAIN, SELL,
ASSIGN and CONVEY absolutely unto Beneficiary, any and all rents, revenues,
income, proceeds, profits, security and other benefits paid or payable by
parties for the use, lease, license, operation or other enjoyment of the
Mortgaged Property (herein collectively called "Rents"), subject only to the
hereinafter described license, TO HAVE AND TO HOLD unto Beneficiary forever, and
Grantors do hereby bind Grantors, their respective heirs, legal representatives,
successors and assigns to warrant and forever defend the title to the Rents unto
Beneficiary against every person whomsoever lawfully claiming or to claim the
same, or any part thereof. Grantors represent and warrant that Grantors have
not previously assigned or pledged, and will not hereafter assign or pledge, all
or any portion of the Rents. Beneficiary hereby grants Grantors a limited
license to exercise and enjoy
-2-
all incidences of ownership of the Rents, including without limitation the right
to collect, demand, xxx for, attach, levy, recover and receive the Rents.
Grantors hereby agree to receive all Rents and hold the same as a trust fund to
be applied first to the payment of the Note, second to the payment of all taxes,
insurance premiums, utility charges, maintenance and repair costs, replacement
reserves and other operating, management and maintenance expenses of the
Mortgaged Property, as same become due, and finally, Grantors may use the
balance of the Rents collected in any manner not inconsistent with this Deed of
Trust. So long as the license is in effect, Grantors (a) shall comply with
their obligations under all leases of all or portions of the Mortgaged Property,
(b) shall maintain each of such leases in full force and effect during the term
thereof, (c) shall, upon Beneficiary's request, deliver to each tenant under
such leases a notice of this assignment of Rents in a form acceptable to
Beneficiary, (d) upon request by Beneficiary, shall deliver Beneficiary true and
correct copies of such leases, and (e) shall not anticipate or collect any Rents
more than thirty (30) days in advance of the time when the same become due under
the terms of the leases.
Upon the occurrence of a default under this Deed of Trust, which continues
after the expiration of the applicable curative or grace period (if any), the
hereinabove described license shall immediately terminate without any action
being required of Beneficiary, and any and all tenants are hereby authorized by
Grantors, upon written notice to such tenants by Beneficiary, to make future
payments of Rents to Beneficiary without further consent of Grantors.
Thereafter, Beneficiary shall have the exclusive right, power and authority to
collect the Rents, regardless of whether a foreclosure sale of the remainder of
the Mortgaged Property has occurred under this Deed of Trust, or whether
Beneficiary has taken possession of the remainder of the Mortgaged Property or
attempted to do any of the same.
Neither the acceptance by Beneficiary of this assignment of Rents, nor the
granting of any other right, power, privilege or authority herein concerning the
Rents, nor the exercise of any of the aforesaid, shall (a) prior to the actual
taking of physical possession and operational control of the Mortgaged Property
by Beneficiary, be deemed to constitute Beneficiary as a "mortgagee in
possession", or (b) at any time thereafter, obligate Beneficiary (i) to appear
in or defend any action or proceeding relating to the Rents or the remainder of
the Mortgaged Property, (ii) to take any action hereunder, (iii) to expend any
money or incur any expenses or perform or discharge any obligation, duty or
liability with respect to any lease, (iv) to assume any obligation or
responsibility for any deposits which are not physically delivered to
Beneficiary, or (v) for any injury or damage to person or property sustained in
or about the Mortgaged Property.
Upon the payment in full of the Indebtedness secured by this Deed of Trust,
Beneficiary agrees to re-assign the Rents to Grantors.
In order to better secure payment of the Indebtedness, and to secure
performance of Grantors' covenants and agreements set forth herein, Grantors do
hereby jointly and severally covenant and agree with Beneficiary and with
Trustee and represent and warrant to Beneficiary and Trustee as follows:
1. Payment of Indebtedness. Grantors shall pay all of the Indebtedness,
together with the interest and other appurtenant charges thereon, when the same
shall become due, in accordance with the terms of the Note and all other
instruments evidencing the Indebtedness or
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evidencing any renewals, rearrangements, extensions or enlargements of the same,
or any part thereof.
2. Title of Grantors; Legal Existence; Compliance with Laws. Grantors
represent and warrant that they have good and indefeasible title in fee simple
to the above described land and the improvements thereon, that the Mortgaged
Property is free from encumbrance superior to the liens and security interests
hereby created, unless otherwise herein provided, and that Grantors have full
right and authority to make this conveyance. Grantors agree to maintain and
preserve their legal existence (as permitted in Letter Loan Agreement of even
date herewith) and all related rights, franchises and privileges. Grantors shall
at all times comply with and perform all obligations under any applicable laws,
statutes, regulations or ordinances relating to the Mortgaged Property and
Grantors' use and operation thereof. Except as otherwise reflected in any
written environmental report furnished by Grantors to Beneficiary (the
"Environmental Report"), the Mortgaged Property has never been used as a toxic
or hazardous waste or substance disposal site, nor are any toxic or hazardous
wastes or substances disposed of, stored on, or contained in the Mortgaged
Property in any way which could subject Grantors, Beneficiary, or any subsequent
lienholder of the Mortgaged Property to liability or damages under any
applicable laws pertaining to health or the environment. Grantors will defend,
at their own cost and expense, indemnify and hold Beneficiary harmless from and
against, any action, proceeding, claim, liability or damages arising from, in
connection with, or in any way affecting or related to, the Mortgaged Property
or any breach, default or noncompliance with any legal requirement (including,
without limitation, any applicable laws pertaining to health or the
environment), and all costs and expenses incurred by Beneficiary in protecting
its interests hereunder or defending itself in such an event (including all
court costs and attorneys' fees) shall be borne by Grantors.
3. Insurance. Grantors shall keep all buildings and other property
covered by this Deed of Trust insured against fire and lightning with extended
coverage and against such other risks as Beneficiary may require, in an amount
not less than 100% of the full insurable value, with loss made payable to
Beneficiary pursuant to the Texas standard mortgagee clause, without
contribution, and shall deliver certificates of the policies of insurance to
Beneficiary promptly as issued. Such policies shall provide, by way of riders,
endorsements or otherwise (so long as readily available), that the insurance
provided thereby shall not be terminated, reduced or otherwise limited
regardless of any breach of the representations and agreements set forth
therein, and that no such policy shall be cancelled, endorsed or amended to any
extent unless the issuer thereof shall have first given Beneficiary at least
fifteen (15) days' prior written notice. If Grantors fail to furnish such
certificates, Beneficiary, at its option, may procure such insurance at
Grantors' expense. All certificates (or binders) for the renewal and substitute
policies of insurance shall be delivered to Beneficiary at least ten (10) days
before termination of the insurance protection replaced by such renewal or
substituted policies. In case of loss, Beneficiary, at its option, shall be
entitled to receive and retain the proceeds of the insurance policies, applying
the same toward payment of the Indebtedness as Beneficiary shall see fit, or at
Beneficiary's option, Beneficiary may pay the same over wholly or in part to
Grantors for the repair of said building or buildings or for the erection of a
new building or buildings in their place, or for any other purpose satisfactory
to Beneficiary, but Beneficiary shall not be obligated to see to the proper
application of any amount paid over to Grantors; provided, however, Beneficiary
shall fund the insurance proceeds to Grantors, at Grantor's request, for the
repairs or replacement of the building or buildings if, as determined in the
sole discretion of Beneficiary: (A) the insurance proceeds plus the amount of
cash deposited by Grantors with Beneficiary are
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adequate to complete such restoration work; and (B) the construction of all
improvements (including the restoration work) will be completed no later than
eighteen months from the date of this Deed of Trust. If Beneficiary allows
payment of all or part of such proceeds to Grantors, such payments shall be
disbursed on such terms and subject to such conditions as Beneficiary may
specify. Grantors agree that regardless of whether any insurance proceeds
payable to them are sufficient to pay the costs of repair and restoration of the
Mortgaged Property, they shall promptly commence and carry out the repair,
replacement, restoration and rebuilding of any and all of the Mortgaged Property
damaged or destroyed by fire or other casualty so as to return same, to the
extent practicable, to its condition immediately prior to such damage to or
destruction thereof. Grantors shall not permit or carry on any activities
within or relating to the Mortgaged Property that are prohibited by the terms of
any insurance policy covering any part of the Mortgaged Property. In the event
of a foreclosure of this Deed of Trust, the purchaser of the Mortgaged Property
shall succeed to all of the rights of Grantors, including any right to unearned
premiums, in and to all policies of insurance assigned and delivered to
Beneficiary pursuant to the provisions of this Deed of Trust. Regardless of the
types or amounts of insurance required and approved by Beneficiary, Grantors
shall assign and deliver to, and do hereby assign to, Beneficiary all policies
of insurance that insure against any loss or damage to the Mortgaged Property,
as collateral and further security for the payment of the Indebtedness.
Grantors shall also obtain and maintain in force and effect such liability and
other insurance policies and protection as Beneficiary may from time to time
specify.
4. Taxes and Assessments. Grantors shall pay all taxes and assessments
against the Mortgaged Property, including, without limitation, all taxes in lieu
of ad valorem taxes, as the same become due and payable. Upon request of
Beneficiary, Grantors shall provide Beneficiary with copies of paid tax receipts
or other satisfactory evidence showing that all taxes and assessments against
the Mortgaged Property have been paid in full at least fifteen (15) days prior
to the date such taxes or other assessments are delinquent. At any time any law
shall be enacted imposing or authorizing the imposition of any tax upon this
Deed of Trust, or upon any rights, titles, liens, or security interests created
hereby, or upon the Note, or any part thereof, Grantors shall immediately pay
all such taxes; provided, that, if it is unlawful for Grantors to pay such
taxes, Grantors shall prepay the Note in full without penalty within thirty (30)
days after demand therefor by Beneficiary.
5. Intentionally Deleted.
6. Assignment of Condemnation Proceeds. Immediately upon their obtaining
knowledge of the institution or threatened institution of any proceeding for the
condemnation of the Mortgaged Property or any portion thereof, Grantors shall
notify Beneficiary of such fact. All judgments, decrees and awards or payment
for injury or damage to the Mortgaged Property, and all awards pursuant to
proceedings for condemnation thereof, including interest thereon, are hereby
assigned in their entirety to Beneficiary, who shall apply the same first to
reimbursement of all costs and expenses incurred by Beneficiary in connection
with such condemnation proceeding and the balance shall be applied to the
Indebtedness in such manner as it may elect; and Beneficiary is hereby
authorized, in the name of Grantors, to execute and deliver valid acquittances
for, and to appeal from, any such award, judgment or decree. Notwithstanding
the foregoing, if (A) the total proceeds of such condemnation equal less than
$250,000.00 and (B) the portion of the Mortgaged Property so taken has
improvements thereon, Beneficiary agrees to pay all or a portion of such
proceeds over to Grantors for the actual costs of repair of said
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improvements or the erection of new improvements in their place, which repair
and restoration work Grantors shall promptly commence and complete to the
satisfaction of Beneficiary. Any proceeds in excess of such actual costs of
restoration and repair shall be retained by Beneficiary and credited against the
Indebtedness. If Beneficiary allows a portion of the proceeds of any
condemnation proceeding to be paid to Grantors for use in rebuilding, restoring
or repairing the Mortgaged Property, then the disbursement of such proceeds
shall be on such terms and subject to such conditions as Beneficiary may
specify. Beneficiary shall have the right to participate in any such
condemnation proceeding.
7. Defense of Title. If, while this trust is in force, the title of
Trustee to the Mortgaged Property, or any part thereof, shall be endangered or
shall be attacked directly or indirectly, Grantors hereby authorize Beneficiary,
at Grantors' expense, to take all necessary and proper steps for the defense of
said title, including the employment of counsel, the prosecution or defense of
litigation, and the compromise or discharge of claims made against said title.
8. Costs and Expenses. All costs and expenses incurred in performing and
complying with Grantors' covenants set forth herein shall be borne solely by
Grantors. If Grantors shall fail, refuse or neglect to make any payment or
perform any act required herein, then at any time thereafter, and without notice
to or demand upon Grantors and without waiving or releasing any other right,
remedy or recourse Beneficiary may have because of same, Beneficiary may (but
shall not be obligated to) make such payment or perform such act for the account
of and at the expense of Grantors, and shall have the right to rent the
Mortgaged Property for such purpose and to take all such actions and expend such
sums thereon and with respect to the Mortgaged Property as it may deem necessary
or appropriate. Grantors shall pay or reimburse Beneficiary against any and all
such expenses and costs. To the extent not prohibited by applicable law,
Grantors will pay all costs and expenses and reimburse Beneficiary for any and
all expenditures of every character incurred or expended from time to time,
regardless of whether or not a default shall have occurred hereunder, in
connection with Beneficiary's evaluating, monitoring, administering and
protecting the Mortgaged Property, and creating, perfecting and realizing upon
Beneficiary's security interests in and liens on the Mortgaged Property,
including, without limitation, all appraisal fees, consulting fees, filing fees,
taxes, brokerage fees and commissions, fees incident to security interest, lien
and other title searches and reports, escrow fees, attorneys' fees, legal
expenses, court costs, auctioneer fees and expenses, other fees and expenses
incurred in connection with the liquidation or sale of the Mortgaged Property
and all other professional fees. Any amount to be paid hereunder by Grantors to
Beneficiary, to the extent not prohibited by applicable law, shall be payable
upon demand and shall bear interest from the date of expenditure until paid at
the lesser of (i) the rate of interest provided in the Note for past due
installments of principal and/or interest, or (ii) the maximum nonusurious rate
of interest from time to time permitted by applicable law ("Highest Lawful
Rate"). At all such times, if any, that Chapter One ("Chapter One") of Title
79, Texas Revised Civil Statutes, 1925, as amended (the "Texas Credit Code")
establishes the Highest Lawful Rate, the Highest Lawful Rate shall be the
"indicated rate ceiling" (as defined in Chapter One) from time to time in effect
unless the Note specifically provides otherwise. Grantors shall indemnify
Beneficiary for any expenses incurred by Beneficiary pursuant to this paragraph,
and shall indemnify Beneficiary against all losses, expenses, damage, claims and
causes of action, incurred or accruing by reason of any acts performed by
Beneficiary pursuant to the provisions of this paragraph. To the extent not
prohibited by applicable law, the sum of all such costs and expenses incurred by
Beneficiary pursuant to this paragraph and not reimbursed by Grantors shall be
added to the Indebtedness and
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thereafter shall form a part of the same; and it shall be secured by this Deed
of Trust and by subrogation to all of the rights of the person, corporation or
body politic receiving such payment.
9. Maintenance of Property; No Other Liens or Security Interests.
Grantors shall keep every part of the Mortgaged Property in good condition, make
promptly all repairs, renewals and replacements necessary to such end, prevent
waste to any part of the Mortgaged Property, and do promptly all else necessary
to such end; and Grantors shall discharge all claims for labor performed and
material furnished therefor, and shall not suffer any lien of mechanics or
materialmen therefor to attach to any part of the Mortgaged Property. Grantors
shall guard every part of the Mortgaged Property from removal, destruction and
damage, and shall not do or suffer to be done any act whereby the value of any
part of the Mortgaged Property may be lessened. Except as Grantors have
described in writing to Beneficiary, no building or other property now or
hereafter covered by the lien of this Deed of Trust shall be removed, demolished
or materially altered or enlarged. Grantors shall not initiate, join in, or
consent to any change in any private restrictive covenants, zoning ordinances or
other public or private restrictions limiting or defining the uses that may be
made of the Mortgaged Property or any part thereof without the prior written
consent of Beneficiary. Beneficiary and its agents or representatives shall
have access to the Mortgaged Property at all reasonable times in order to
inspect same and verify Grantors' compliance with their duties and obligations
under this Deed of Trust. Grantors shall not, without the prior written consent
of Beneficiary, grant, convey or otherwise create or permit to be created, any
type of mortgage, lien, security interest or other encumbrance on any of the
Mortgaged Property, regardless of whether the same shall be inferior and
subordinate to the liens and security interests of Beneficiary in and to the
Mortgaged Property.
10. Restrictions on Transfer. Upon a sale or transfer (including a lease
for a term of longer than five years), without Beneficiary's prior written
consent, of (i) all or any part of the Mortgaged Property, or any interest
(beneficial or otherwise) therein, or (ii) actual or beneficial interests in
Grantors (if Grantors are not natural persons but are corporations,
partnerships, trusts or other legal entities), Beneficiary (pursuant to
Paragraph 12 hereof), at Beneficiary's option, and without demand, presentment
for payment, notice of nonpayment, grace, protest, notice of protest, notice of
intent to accelerate the indebtedness, notice of acceleration of the
indebtedness, or any other notice, all of which are expressly waived by
Grantors, may declare the entire unpaid principal balance and accrued interest
on the Note and any other unpaid indebtedness secured hereby immediately due and
payable, and Beneficiary may invoke any of its remedies hereunder. Grantors
agree that Beneficiary may condition its consent to any such sale or transfer on
(a) execution by the transferee of a written assumption agreement containing
such terms as Beneficiary may require, (b) an increase in the rate of interest
payable under the Note, and/or (c) the payment to Beneficiary of a reasonable
transfer fee.
11. Grantors' Successors in Interest. In the event the ownership of the
Mortgaged Property or any part thereof becomes vested in a person other than
Grantors, Beneficiary may, without notice to Grantors, deal with such successor
or successors in interest with reference to this Deed of Trust and to the
Indebtedness in the same manner as with Grantors, without in any way vitiating
or discharging Grantors' liability hereunder or upon the Indebtedness or waiving
the provisions of paragraph 10 hereof. No sale of the Mortgaged Property and no
forbearance on the part of Beneficiary, and no extension of the time for the
payment of the Indebtedness given by Beneficiary, shall operate to release,
discharge, modify, change or affect, either in whole or in
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part, any original liability of Grantors, or the liability of the guarantors or
sureties of Grantors, or of any other party liable for the payment of the
Indebtedness or any part thereof.
12. Default and Acceleration. In the event Grantors shall default in the
prompt payment, when due, of the Indebtedness, or any part thereof, or fail to
keep and perform any of the covenants or agreements contained herein or in any
other document securing the payment of the Indebtedness, or, in the event
Grantors or any person liable for the Indebtedness, or any part thereof, files a
voluntary petition in bankruptcy or for corporate reorganization, makes an
assignment for the benefit of any creditor, or if the Mortgaged Property or any
property owned by a person liable for the Indebtedness is placed under control
or in the custody of any court or receiver, or if Grantors abandon any of the
Mortgaged Property, then, in any such event, Beneficiary, at Beneficiary's
option, and without demand, presentment for payment, notice of nonpayment,
grace, protest, notice of protest, notice of intent to accelerate the
Indebtedness, notice of acceleration of the Indebtedness, or any other notice
(EXCEPT AS MAY BE PROVIDED TO THE CONTRARY in the Letter Loan Agreement of even
date herewith between Grantors and Beneficiary), all of which are hereby
expressly waived by Grantors, may declare the entire unpaid balance and accrued
interest on the Note and any other unpaid Indebtedness immediately due and
payable, whereupon it shall be so due and payable.
13. Prepayment. If, following the occurrence of an event of default
hereunder and an acceleration of the Indebtedness or any portion thereof, but
prior to a foreclosure sale of the Mortgaged Property, Grantors shall tender to
Beneficiary payment of an amount sufficient to satisfy the entire amount of the
Note, such tender shall be deemed to be a voluntary prepayment under the Note
and accordingly, Grantors shall also pay to Beneficiary the premium (if any)
then required under the Note in order to exercise the prepayment privilege
contained therein.
14. Survival of Covenants and Liens. All of the covenants and agreements
of Grantors set forth herein shall survive the execution and delivery of this
Deed of Trust and shall continue in force until the Indebtedness is paid in
full. Accordingly, if Grantors shall perform faithfully each and all of the
covenants and agreements herein contained, then, and then only, this conveyance
shall become null and void and shall be released in due form, upon Grantors'
written request and at Grantors' expense; otherwise, it shall remain in full
force and effect. No release of this conveyance or the lien thereof shall be
valid unless executed by Beneficiary.
15. Foreclosure and Sale. If an event of default hereunder shall occur,
Beneficiary may, at Beneficiary's election and by or through Trustee or
otherwise, sell or offer for sale, in one or more sales, all or any part of the
Mortgaged Property, in such portions, order and parcels as Beneficiary may
determine, with or without having first taken possession of same, to the highest
bidder for cash (or credit on the indebtedness if Beneficiary is the highest
bidder) at public auction. Such sale shall be made at the courthouse door of
the County wherein the Mortgaged Property (or any of that portion thereof to be
sold) is located, on the first Tuesday of any month between the hours of 10:00
A.M. and 4:00 P.M. after giving legally adequate written notice of sale of that
portion of the Mortgaged Property to be sold, at least twenty-one (21)
consecutive days prior to the date of said sale:
(a) by posting at the courthouse door of each county in which the Mortgaged
Property (or the portion thereof to be sold) is located, a written notice
designating the county in which the Mortgaged Property will be sold;
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(b) by filing in the office of the county clerk of each county in which the
Mortgaged Property (or the portion thereof to be sold) is located, a copy of the
notice posted under subparagraph (a); and
(c) by serving written notice of the sale by certified mail on each debtor
who, according to the records of Beneficiary, is obligated to pay the Note (and,
in the event the proceeds of the foreclosure sale are to be applied to a portion
of the indebtedness other than or in addition to the Note, then to each debtor
who, according to the records of Beneficiary, is obligated to pay such portion
of the indebtedness), such service to be complete and effective when the notice
is deposited in the United States mail, postage prepaid and addressed to the
debtor at the debtor's last known address as shown by the records of
Beneficiary.
In the alternative, such notice and sale may be accomplished in such manner as
permitted or required by Title 5, Section 51.002 of the Texas Property Code
relating to the sale of real property under contract lien and/or by Chapter 9 of
the Texas Business and Commerce Code relating to the sale of collateral after
default by a debtor (as said title and chapter now exist or may be hereafter
amended or succeeded), or by any other present or subsequent articles or
enactments relating to same. In instances where the Mortgaged Property is
located in states other than Texas, such sales shall be made in accordance with
the legal requirements therefor for such state, including, to the extent there
relevant, the Uniform Commercial Code there in effect. Nothing contained in this
Paragraph 15 shall be construed to limit in any way Trustee's rights to sell the
Mortgaged Property by private sale if, and to the extent that, such private sale
is permitted under the laws of the state where the Mortgaged Property (or that
portion thereof to be sold) is located, or by public or private sale after entry
of a judgment by any court of competent jurisdiction ordering same. At any such
sale (i) whether made under the power herein contained, the aforesaid Title 5,
Section 51.002 of the Texas Property Code, the Texas Business and Commerce Code,
any other legal requirement or by virtue of any judicial proceedings or any
other legal right, remedy or recourse, it shall not be necessary for Trustee to
have physically present, or to have constructive possession of, the Mortgaged
Property (Grantors hereby covenanting and agreeing to deliver to Trustee any
portion of the Mortgaged Property not actually or constructively possessed by
Trustee immediately upon demand by Trustee), and the title to and right of
possession of any such property shall pass to the purchaser thereof as
completely as if the same had been actually present and delivered to purchaser
at such sale, (ii) each instrument of conveyance executed by Trustee shall
contain a general warranty of title, binding upon Grantors, (iii) each and every
recital contained in any instrument of conveyance made by Trustee shall
conclusively establish the truth and accuracy of the matters recited therein,
including, without limitation, nonpayment of the Note (and/or other portion of
the Indebtedness with respect to which the sale has been conducted),
advertisement and conduct of such sale in the manner provided herein and
otherwise by law, and appointment of any successor Trustee hereunder, (iv) any
and all prerequisites to the validity thereof shall be conclusively presumed to
have been performed, (v) the receipt of Trustee or of such other party or
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers for his or their purchase money and no such purchaser or purchasers,
or his or their assigns or personal representatives, shall thereafter be
obligated to see to the application of such purchase money or be in any way
answerable for any loss, misapplication or nonapplication thereof, (vi) to the
fullest extent permitted by law, Grantors shall be completely and irrevocably
divested of all of their right, title, interest, claim and demand whatsoever,
either at law or in equity, in and to the property sold, and such sale shall be
a perpetual bar both at law and in equity against Grantors, and against any and
all other persons
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claiming or to claim the property sold or any part thereof, by, through or under
Grantors and (vii) to the extent and under such circumstances as are permitted
by law, Beneficiary may be a purchaser at any such sale. The Mortgaged Property
may be sold in one or more parcels and in such manner and order as Trustee, in
his sole discretion, may elect, it being expressly understood and agreed that
the right of sale arising out of any event of default shall not be exhausted by
any one or more sales. The Trustee making such sale shall receive the proceeds
thereof and shall apply the same as follows: (i) he shall pay the reasonable
expense of executing this trust, including a commission to himself of five per
cent (5%) of the gross proceeds of the sale; (ii) after paying such expenses, he
shall pay, so far as may be possible, the Indebtedness (including the Note),
discharging first the portion of the Indebtedness arising under the covenants or
agreements herein contained and not evidenced by the Note; (iii) he shall pay
the residue, if any, to Grantors, their respective heirs, legal representatives,
successors or assigns.
16. Fair Market Value Calculation. The following shall be the basis for
the finder of fact's determination of the fair market value of the Mortgaged
Property as of the date of the foreclosure sale in proceedings governed by
Sections 51.003, 51.004 and 51.005 of the Texas Property Code (as amended from
time to time):
(a) The Mortgaged Property shall be valued in an "as is" condition as of
the date of the foreclosure sale, without any assumption or expectation that the
Mortgaged Property will be repaired or improved in any manner before a resale of
the Mortgaged Property after foreclosure;
(b) The valuation shall be based upon an assumption that the foreclosure
purchaser desires a prompt resale of the Mortgaged Property for cash promptly
(but no later than twelve months) following the foreclosure sale;
(c) All reasonable closing costs customarily borne by the seller in a
commercial real estate transaction should be deducted from the gross fair market
value of the Mortgaged Property, including, without limitation, brokerage
commissions, title insurance, a survey of the Mortgaged Property, tax
prorations, attorney's fees, and marketing costs;
(d) The gross fair market value of the Mortgaged Property shall be further
discounted to account for any estimated holding costs associated with
maintaining the Mortgaged Property pending sale, including, without limitation
utilities expenses, property management fees, taxes and assessments (to the
extent not accounted for in subparagraph (c) above), and other maintenance
expenses; and
(e) Any expert opinion testimony given or considered in connection with a
determination of the fair market value of the Mortgaged Property must be given
by persons having at least five (5) years experience in appraising property
similar to the Mortgaged Property and who have conducted and prepared a complete
written appraisal of the Mortgaged Property taking into consideration the
factors set forth above.
17. Substitute Trustee. If the herein named Trustee shall die or become
disqualified from acting in the execution of this trust, or shall fail or refuse
to execute the same when requested by Beneficiary so to do, or if, for any
reason, Beneficiary shall prefer to appoint a substitute trustee to act instead
of the herein named Trustee, Beneficiary shall have full power to appoint, at
any time by written instrument, a substitute trustee, and, if necessary, several
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substitute trustees in succession, who shall succeed to all the estate, rights,
powers and duties of Trustee named herein, and no notice of such appointment
need to be given to Grantors or to any other person or filed for record in any
public office. Such appointment may be executed by any authorized agent of
Beneficiary; and if Beneficiary be a corporation and such appointment be
executed in its behalf by any officer of such corporation, such appointment
shall be conclusively presumed to be executed with authority and shall be valid
and sufficient without proof of any action by the board of directors or any
superior officer of the corporation. Grantors, severally, hereby ratify and
confirm any and all acts that the Trustee, or his successor or successors in
this trust, shall lawfully do by virtue hereof.
18. Purchaser's Right to Disaffirm. The purchaser at any trustee's or
foreclosure sale hereunder may disaffirm any easement granted, or rental or
lease contract made, in violation of any provision of this Deed of Trust, and
may take immediate possession of the Mortgaged Property free from, and despite
the terms of, such grant of easement and rental or lease contract.
19. Beneficiary as Purchaser. Beneficiary may bid and being the highest
bidder therefor, become the purchaser of any and all Mortgaged Property offered
for sale at any trustee's or foreclosure sale hereunder and shall have the right
to credit the amount of the bid upon the amount of the Indebtedness owing to
Beneficiary, in lieu of cash payment.
20. Recovery of Unmatured Indebtedness. It is agreed that if default be
made in the payment of any installment of the Note or other Indebtedness secured
by this Deed of Trust, or in the observance or performance of any covenant or
agreement of Grantors contained or referred to herein, the holder of the
Indebtedness or any part thereof under which such default occurs shall have the
option to proceed with foreclosure in satisfaction of such default either
through the courts or by directing Trustee or his successors in trust to proceed
as if under a full foreclosure, conducting the sale as herein provided, and
without declaring the whole Indebtedness due, and provided that if a sale is
made because of default of an installment, or a part of an installment, such
sale may be made subject to the unmatured part of the Note or other Indebtedness
secured by this Deed of Trust; and it is agreed that such sale, if so made,
shall not in any manner affect the unmatured portion of the Indebtedness, but as
to such unmatured portion of the Indebtedness, this Deed of Trust shall remain
in full force and effect just as though no sale had been made under the
provisions of this paragraph. It is further agreed that several sales may be
made hereunder without exhausting the right of sale for any unmatured portion of
the Indebtedness, it being the intention of the parties hereto to provide for a
foreclosure and sale of the security for any matured portion of the Indebtedness
without exhausting the power to foreclose and to sell the security for any other
portion of the Indebtedness whether matured at the time or subsequently
maturing. It is agreed that an assignee holding any installment or part of any
installment of the Note or other indebtedness secured hereby shall have the same
powers as are hereby conferred on the holder of the Indebtedness to proceed with
foreclosure on a matured installment or installments, and also to request
Trustee or his successors in trust to sell the Mortgaged Property or any part
thereof; but if an assignee forecloses or causes a sale to be made to satisfy
any installment, part of an installment, or installments, then the purchaser at
such foreclosure or sale shall be made subject to all of the terms and
provisions hereof with respect to the unmatured part of the Note and other
indebtedness secured hereby owned by the then holder of such indebtedness.
-11-
21. Rights of Beneficiary Upon Default. In the event of default by
Grantors in the performance of one or more of their covenants and agreements as
set forth herein, then Beneficiary may, at its option, enter upon and take
exclusive possession of the Mortgaged Property and thereafter manage, use, lease
and otherwise operate same in such manner and by and through such persons,
objects or employees as it may deem proper and necessary. Beneficiary shall be
likewise entitled to possession of all books and records of Grantors that relate
to the Mortgaged Property. The rights of Beneficiary under this paragraph may
be enforced through an action for forcible entry and detainer or any other means
authorized by law. Any and all rents or other issues or profits received by
Beneficiary shall be accounted for in the manner provided for in the opening
provisions of this Deed of Trust. Grantors hereby indemnify and hold
Beneficiary harmless from and against any and all liability, loss, cost, damage
or expense which Beneficiary may incur under or by reason of this paragraph or
for any action taken by Beneficiary hereunder.
22. Election to Discontinue Remedy. In the event Beneficiary shall elect
to invoke any of the rights or remedies provided for herein, but shall
thereafter determine to withdraw or discontinue same for any reason, it shall
have the unqualified right to do so, whereupon all parties shall be
automatically restored and returned to their respective positions regarding the
Indebtedness and this Deed of Trust as shall have existed prior to the
invocation of Beneficiary's rights hereunder, and the rights, powers and
remedies of Beneficiary hereunder shall be and remain in full force and effect.
23. Release or Renewal of Liens. Any part of the Mortgaged Property may
be released by Beneficiary without affecting the lien, security interest and
rights hereof against the remainder. The lien, security interest and rights
hereby granted shall not affect or be affected by any other security taken for
the Indebtedness or any part thereof. The taking of additional security, or the
extension or renewal of the Indebtedness or any part thereof, shall at no time
release or impair the lien, security interest and rights granted hereby, or
affect the liability of any endorser, guarantor or surety, or improve the right
of any junior lienholder; and this Deed of Trust, as well as any instrument
given to secure any renewal or extension of the Indebtedness, or any part
thereof, shall be and remain a first and prior lien and security interest on all
of the Mortgaged Property not expressly released, until the Indebtedness is
completely paid.
24. Maximum Interest. The invalidity, or unenforceability in particular
circumstances, of any provisions of this Deed of Trust shall not extend beyond
such provision in such circumstances and no other provision of this Deed of
Trust shall be affected thereby. It is the intention of the parties hereto to
comply with the applicable usury laws; accordingly, it is agreed that,
notwithstanding any provisions to the contrary in the Note or any instrument
evidencing the Indebtedness, or in this Deed of Trust or any of the documents or
instruments securing payment of the Indebtedness or otherwise relating thereto,
in no event shall the Note or such documents require the payment or permit the
collection of interest in excess of the maximum amount permitted by such laws.
If any such excess interest is contracted for, charged or received, under the
Note or any instrument evidencing the Indebtedness, or under this Deed of Trust
or under the terms of any of the other documents securing payment of the
Indebtedness or otherwise relating thereto, or in the event the maturity of any
of the Indebtedness is accelerated in whole or in part, or in the event that all
or part of the principal or interest of the Indebtedness shall be prepaid, so
that under any of such circumstances, the amount of interest contracted for,
charged or received under the Note or any instruments evidencing the
Indebtedness, or under this Deed of
-12-
Trust or under any of the instruments securing payment of the Indebtedness or
otherwise relating thereto, shall exceed the maximum amount of interest
permitted by the applicable usury laws, then in any such event (a) the
provisions of this paragraph shall govern and control, (b) neither Grantors nor
any other person or entity now or hereafter liable for the payment of the Note
or any instrument evidencing the Indebtedness shall be obligated to pay the
amount of such interest to the extent that it is in excess of the maximum amount
of interest permitted by the applicable usury laws, (c) any such excess that may
have been collected shall be either applied as a credit against the then unpaid
principal amount of the Indebtedness or refunded to Grantors, at the holder's
option, and (d) the effective rate of interest shall be automatically reduced to
the maximum lawful contract rate allowed under the applicable usury laws as now
or hereafter construed by the courts having jurisdiction thereof. It is further
agreed that without limitation of the foregoing, all calculations of the rate of
interest contracted for, charged or received under the Note, or any instrument
evidencing the Indebtedness, or under this Deed of Trust or under such other
documents that are made for the purpose of determining whether such rate exceeds
the maximum lawful contract rate, shall be made, to the extent permitted by the
applicable usury laws, by amortizing, prorating, allocating and spreading in
equal parts during the period of the full stated term of the loans evidenced by
the Note or the instruments evidencing the Indebtedness, all interest at any
time contracted for, charged or received from Grantors or otherwise by the
holder or holders hereof in connection with such loans.
25. Waiver of Marshalling and Certain Rights. To the extent that Grantors
may lawfully do so, Grantors hereby expressly waive any right pertaining to the
marshalling of assets, the administration of estates of decedents, or other
matters to defeat, reduce or affect (a) the right of Beneficiary to sell all or
any part of the Mortgaged Property for the collection of the Indebtedness
(without any prior or different resort for collection), or (b) the right of
Beneficiary to the payment of the Indebtedness out of the proceeds of the sale
of all or any part of the Mortgaged Property in preference to every other person
and claimant.
26. Waivers. It is expressly agreed that (i) no waiver of any default on
the part of Grantors or breach of any of the provisions of this Deed of Trust
shall be considered a waiver of any other or subsequent default or breach, and
no delay or omission in exercising or enforcing the rights and powers herein
granted shall be construed as a waiver of such rights and powers, and likewise
no exercise or enforcement of any rights or powers hereunder shall be held to
exhaust such rights and powers, and every such right and power may be exercised
from time to time; (ii) any failure by Beneficiary to insist upon the strict
performance by Grantors of any of the terms and provisions herein shall not be
deemed to be a waiver of any of the terms and provisions herein, and
Beneficiary, notwithstanding any such failure, shall have the right thereafter
to insist upon the strict performance by Grantors of any and all of the terms
and provisions of this Deed of Trust; (iii) neither Grantors nor any other
person now or hereafter obligated for the payment of the whole or any part of
the Indebtedness shall be relieved of such obligations by reason of the failure
of Beneficiary or Trustee to comply with any request of Grantors, or of any
other person so obligated, to take action to foreclose this Deed of Trust or
otherwise enforce any of the provisions of this Deed of Trust or of any
obligations secured by this Deed of Trust, or by reason of the release,
regardless of consideration, of the whole or any part of the security held for
the Indebtedness, or by reason of the subordination in whole or in part by
Beneficiary of the lien, security interest or rights evidenced hereby, or by
reason of any agreement or stipulation with any subsequent owner or owners of
the Mortgaged Property extending the time of payment or modifying the terms of
the Indebtedness or this Deed of Trust
-13-
without first having obtained the consent of Grantors or such other person, and,
in the latter event, Grantors and all such other persons shall continue to be
liable to make such payments according to the terms of any such agreement of
extension or modification unless expressly released and discharged in writing by
Beneficiary; (iv) regardless of consideration, and without the necessity for any
notice to or consent by the holder of any subordinate lien or security interest
on the Mortgaged Property, Beneficiary may release the obligation of anyone at
any time liable for any of the Indebtedness or any part of the security held for
the Indebtedness and may extend the time of payment or otherwise modify the
terms of the Indebtedness and/or this Deed of Trust without, as to the security
or the remainder thereof, in anywise impairing or affecting the lien or security
interest of this Deed of Trust or the priority of such lien or security
interest, as security for the payment of the Indebtedness as it may be so
extended or modified over any subordinate lien or security interest; (v) the
holder of any subordinate lien or security interest shall have no right, and
shall not be granted the right, to terminate any lease affecting the Mortgaged
Property whether or not such lease be subordinate to this Deed of Trust; and
(vi) Beneficiary may resort for the payment of the Indebtedness to any security
therefor held by Beneficiary in such order and manner as Beneficiary may elect.
27. Terminable Tenancy Upon Foreclosure. In the event of a Trustee's sale
hereunder, and, if at the time of such sale, Grantors, or any other party
occupies the Mortgaged Property so sold, each and all shall immediately become
the tenant of the purchaser at such sale, which tenancy shall be terminable at
the will of landlord. An action of forcible detainer and/or any other legal
proceedings shall lie if the tenant holds over after a demand in writing for
possession of said property.
28. Application of Payments on Indebtedness. In the event any portion of
the Indebtedness is not, for any reason whatsoever, secured by this Deed of
Trust on the Mortgaged Property, the full amount of all payments made on the
Indebtedness shall first be applied to such unsecured portion of the
Indebtedness until the same has been fully paid.
29. Appointment of Receiver. It is agreed that Beneficiary, in any action
to foreclose, shall be entitled to the appointment of a receiver of the rents
and profits of the Mortgaged Property as a matter of right and without notice,
with power to collect the rents, issues and profits of the Mortgaged Property
due and coming due during the pendency of such foreclosure suit, without regard
to the value of the Mortgaged Property or the solvency of any person or persons
liable for the payment of the Indebtedness involved in said suit. Grantors, for
themselves and any subsequent owner or owners, hereby waive any and all defenses
to the application for a receiver as above provided, and hereby specifically
consent to such appointment without notice; but nothing herein contained is to
be construed to deprive Beneficiary of any other right, remedy or privilege it
may now have under the law to have a receiver appointed. The provision for the
appointment of a receiver of the rents and profits is made an express condition
upon which the loan evidenced by the Note is made.
30. Subrogation. To the extent that proceeds of the Note are used to pay
any prior indebtedness secured by an outstanding lien, security interest, charge
or prior encumbrance against the Mortgaged Property, such proceeds have been
advanced by Beneficiary at Grantors' request; and Beneficiary shall be
subrogated to any and all rights, powers, equities, liens and security interests
owned or granted by any owner or holder of such prior indebtedness,
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irrespective of whether said security interests, liens, charges or encumbrances
are released of record.
31. Security Agreement.
(a) Security Interest. This Deed of Trust shall be a security
agreement between Grantors, as the debtor, and Beneficiary, as the secured
party, covering the Mortgaged Property constituting personal property or
fixtures governed by the Texas Uniform Commercial Code (the "Code"), and
Grantors grant to Beneficiary a security interest in such portion of the
Mortgaged Property. In addition to Beneficiary's other rights hereunder,
Beneficiary shall have all rights of a secured party under the Code. Grantors
shall execute and deliver to Beneficiary all financing statements that may be
required by Beneficiary to establish and maintain the validity and priority of
Beneficiary's security interest, and Grantors shall bear all costs thereof,
including all state and county UCC record searches reasonably required by
Beneficiary. If Beneficiary should dispose of any of the Mortgaged Property
pursuant to the Code, ten (10) days' written notice by Beneficiary to Grantors
shall be deemed to be reasonable notice; provided, however, Beneficiary may
dispose of such property in accordance with the foreclosure procedures of this
Deed of Trust in lieu of proceeding under the Code. Beneficiary and Grantors
agree that a carbon, photographic or other reproduction of this Deed of Trust is
sufficient as a financing statement.
(b) Notice of Changes. Grantors shall give advance notice in writing
to Beneficiary of any proposed change in Grantors' name, identity, or structure,
and shall execute and deliver to Beneficiary, prior to or concurrently with the
occurrence of any such change, all additional financing statements that
Beneficiary may require to establish and maintain the validity and priority of
Beneficiary's security interest with respect to any of the Mortgaged Property
described or referred to herein.
(c) Fixtures. Some of the items of the Mortgaged Property described
herein are goods that are or are to become fixtures related to the land
described herein, and it is intended that, as to those goods, this Deed of Trust
shall be effective as a financing statement filed as a fixture filing from the
date of its filing for record in the real estate records of the county in which
the Mortgaged Property is situated. Information concerning the security
interest created by this Deed of Trust may be obtained from Beneficiary, as
secured party, at the address of Beneficiary stated above. The mailing address
of the Grantors, as debtor, is as stated above.
32. Income and Expense Statements. Grantors shall, upon reasonable
request of Beneficiary, deliver to Beneficiary, (i) then current annual
statements, in form and content satisfactory to Beneficiary, itemizing the
income and expenses of the Mortgaged Property, and (ii) then current financial
statements of Grantors and all guarantors of the Indebtedness.
33. Beneficiary's Consent. In any instance hereunder where Beneficiary's
prior approval or consent is required to be obtained by Grantors, or
Beneficiary's judgment is required to be exercised as to any matter, the
granting or denial of such approval or consent and the exercise of such judgment
shall be within the sole discretion of Beneficiary, and Beneficiary shall not,
for any reason and to any extent, be required to grant such approval or consent
or exercise such judgment in any particular manner regardless of the
reasonableness of either the request or Beneficiary's judgment.
-15-
34. Notices. All notices or other communications required or permitted to
be given pursuant to this Deed of Trust shall be in writing and shall be
considered as properly given if (i) mailed by first class United States mail,
postage prepaid, registered or certified with return receipt requested, or (ii)
delivered in person to the address of the intended addressee, or (iii) by
prepaid telegram. Notice by mail shall be effective upon the expiration of
three (3) business days after its deposit in the United States mail, except as
otherwise set forth in Paragraph 15 above when notice is effective upon deposit
in the United States mail. Notice given in any other manner shall be effective
only if and when received at the address of the addressee. For purposes of
notice, the addresses of the parties shall be as set forth in the opening
recitals hereinabove; provided, however, that either party shall have the right
to change its address for notice hereunder to any other location within the
United States by the giving of fifteen (15) days' notice to the other party in
the manner set forth hereinabove.
35. Environmental Matters. Grantors have taken the steps necessary to
determine and have determined that no hazardous substances, solid wastes, or
other substances known or suspected to pose a threat to health or the
environment ("Hazard(s)") have been disposed of or otherwise released on or to
the Mortgaged Property or exist on or within any portion of the Mortgaged
Property except as disclosed in the Environmental Report. Grantors are not
aware of any prior uses of the Mortgaged Property which violate any laws
pertaining to health or the environment ("Applicable Environmental Laws"),
including, without limitation, the Comprehensive Environment Response,
Compensation, and Liability Act of 1980, as amended ("CERCLA"), the Resource
Conservation and Recovery Act of 1976, as amended ("RCRA"), the Texas Water Code
and the Texas Solid Waste Disposal Act, except as described in the Environmental
Report. The use which Grantors make and intend to make of the Mortgaged
Property will not result in the disposal or release of any hazardous substance,
solid waste or Hazard on, in or to the Mortgaged Property in violation of
Applicable Environmental Laws. The terms "hazardous substance" and "release"
shall each have the meanings specified in CERCLA, and the terms "solid waste"
and "disposal" (or "disposed") shall each have the meanings specified in RCRA;
provided, however, that in the event either that CERCLA or RCRA is amended so as
to broaden the meaning of any term defined thereby, such broader meaning shall
apply subsequent to the effective date of such amendment; and provided further
that, to the extent that the laws of the State of Texas establish a meaning for
"hazardous substance", "release", "solid waste", or "disposal" which is broader
than that specified in either CERCLA or RCRA, such broader definition shall
apply. Grantors shall give notice to Beneficiary immediately upon (i)
Grantors' receipt of any notice from any governmental authority of a violation
of any Applicable Environmental Laws and (ii) acquiring knowledge of the
presence of any hazardous substances, solid wastes or Hazards on the Mortgaged
Property in a condition that is resulting or could reasonably be expected to
result in any adverse environmental impact, with a full description thereof;
promptly comply with all Applicable Environmental Laws requiring the notice,
removal, treatment, or disposal of such hazardous substances; and provide
Beneficiary, within thirty (30) days after demand by Beneficiary, with financial
assurance evidencing to Beneficiary's satisfaction that sufficient funds are
available to pay the cost of removing, treating and disposing of such hazardous
substances, solid wastes or Hazards and discharging any liens or assessments
that may be established on the Mortgaged Property or the improvements thereon as
a result thereof. Grantors hereby defend, indemnify and hold harmless
Beneficiary, its employees, agents, shareholders, officers and directors
(collectively, the "Indemnified Parties"), from and against any claims, demands,
obligations, penalties, fines, suits, liabilities, settlements, damages, losses,
costs or expenses (including, without limitation, attorney and consultant fees
and expenses,
-16-
investigation and laboratory fees and expenses, cleanup costs, and court costs
and other litigation expenses) of whatever kind or nature, known or unknown,
contingent or otherwise, arising out of or in any way related to (i) the
presence, disposal, release, threatened release, removal or production of any
hazardous substances, solid wastes or Hazards which are on, in, from or
affecting any portion of the Mortgaged Property; (ii) any personal injury
(including wrongful death) or property damage (real or personal) arising out of
or related to such hazardous substances, solid wastes or Hazards; (iii) any
lawsuit brought or threatened, settlement reached, or order by a governmental
authority relating to such hazardous substances, solid wastes or Hazards, and/or
(iv) any violation of any applicable laws, or demands of governmental
authorities, or violation of any policies or requirements of Beneficiary, which
are based upon or in any way related to such hazardous substances, solid wastes
or Hazards, regardless of whether or not any of the conditions described under
any of the foregoing subsections (i) through (iv), inclusive, was or is caused
by or within the control of Grantors, AND REGARDLESS OF WHETHER SUCH IS CAUSED
BY THE NEGLIGENCE OF AN INDEMNIFIED PARTY. Grantors agree, upon notice and
request by an Indemnified Party, to contest and defend any demand, claim, suit,
proceeding or action with respect to which Grantors have hereinabove indemnified
and held the Indemnified Parties harmless and to bear all costs and expenses of
such contest and defense. Grantors further agree to reimburse any Indemnified
Party upon demand for any costs or expenses incurred by any Indemnified Party in
connection with any matters with respect to which Grantors have hereinabove
indemnified and held the Indemnified Parties harmless. The provisions of this
paragraph shall be in addition to any other obligations and liabilities Grantors
may have to Beneficiary at common law, in equity or under documentation executed
in connection with the Note, and shall survive the closing, funding and payment
in full of the Note.
36. Professional Services. Promptly upon Beneficiary's request (but no
more often than once per calendar year, unless required by banking regulations
or regulators) , Grantors, at Grantors' sole cost and expense, shall: (a) cause
an inspection and written appraisal of the Mortgaged Property (or such parts of
it as are designated in Beneficiary's request), to be made by an appraiser
approved by Beneficiary in its sole discretion; and (b) cause to be conducted or
prepared any other written report, summary, opinion, inspection, review, survey,
audit or other professional service relating to the Mortgaged Property or any
operations in connection with it (all as designated in Beneficiary's request),
including without limitation any accounting, auctioneering, architectural,
consulting, engineering, design, legal, management, pest control, surveying,
title abstracting or other technical, managerial or professional service
relating to the Mortgaged Property or its operations. Beneficiary may elect to
deliver any such request orally, by telegram, by mail or by hand delivery
addressed to Grantors as provided in this Deed of Trust or by any other legally
effective method, and it may be given at anytime and from time to time before
the complete and final release and discharge of the security for the Note.
37. Further Documentation. Grantors agree that Grantors shall execute and
deliver such other and further documents and do and perform such other acts as
may be reasonably necessary and proper to carry out the intention of the parties
as herein expressed and to effect the purposes of this Deed of Trust and the
loan transaction referred to herein. Without limitation of the foregoing,
Grantors agree to execute and deliver such documents as may be necessary to
cause the liens and security interests granted hereby to cover and apply to any
property placed in, on or about the Mortgaged Property in addition to, or as
replacement or substitute for any of the Mortgaged Property.
-17-
38. Binding on Successors. The covenants herein contained shall inure to
the benefit of Beneficiary and Trustee, their heirs, legal representatives,
successors and assigns, and shall be binding upon the respective heirs, legal
representatives, successors and assigns of Grantors, but nothing in this
paragraph shall constitute an authorization for Grantors to sell or in any way
dispose of the Mortgaged Property or any part thereof if otherwise prohibited by
any of the terms hereof.
39. Definitions. Wherever used in this Deed of Trust, unless the context
clearly indicates a contrary intent or unless otherwise specifically provided
herein, the words "Deed of Trust" shall mean "this Deed of Trust, Security
Agreement and Assignment of Rents and any supplement or supplements hereto"; the
word "Grantors" shall mean "Grantors, their respective heirs, legal
representatives, successors and assigns, and/or any subsequent owner or owners
of the Mortgaged Property"; the word "Beneficiary" shall mean "Beneficiary or
any subsequent lawful holder or holders of the Note or other indebtedness
secured hereby"; the word "Note" shall mean the "Note secured by this Deed of
Trust and any renewals, extensions, rearrangements and enlargements thereof";
the word "person" shall mean "an individual, corporation, trust, partnership or
unincorporated association"; and the pronouns of any gender shall include the
other genders, and either the singular or plural shall include the other.
40. Renewal of Deeds of Trust. The Notes hereinbefore described and
secured hereby have, in part, been given to renew and extend the unpaid balance
owing on those certain promissory notes referenced in and secured by:
(1) a Deed of Trust, Security Agreement and Financing Statement
("Tarrant County Deed of Trust") filed for record in the Official Public Records
of Real Property of Tarrant County, Texas, under Clerk's File No. 594747 and
corrected and re-recorded under Clerk's File No. 602929, covering the property
more fully described therein (the "Tarrant County Property"); which liens were
transferred and assigned to Lender by that certain Transfer of Note and Liens
dated to be effective January 29, 1990 and filed for record in the Official
Public Records of Real Property of Tarrant County, Texas under Vol. 09943, Page
0973; further secured by that certain Modification, Renewal and Extension of
Note and Liens (the "Xxxxxx County Modification") dated May 21, 1991, and filed
for record in the Official Public Records of Real Property of Xxxxxx County,
Texas, under Clerk's File No. N191391; as same were modified, renewed and
extended pursuant to the terms and conditions of (a) a Second Modification,
Renewal and Extension of Note and Liens dated March 24, 1992, and filed for
record in the Official Public Records of Real Property of Tarrant County, Texas
under Vol. 10637, Page 1665 and in the Official Public Records of Real Property
of Xxxxxx County, Texas, under Clerk's File No. P001208; (b) a Third
Modification of Note and Liens dated April 30, 1993, and filed for record in the
Official Public Records of Real Property of Tarrant County, Texas; (c) a Fourth
Modification of Note and Liens dated April 30, 1994, and filed for record in the
Official Public Records of Real Property of Xxxxxx County, Texas under Clerk's
File No. P924820, wherein Borrower requested, and Lender agreed, among other
things, to release the Tarrant County Property from the liens securing the
Tarrant County Deed of Trust; (d) a Fifth Modification of Note and Liens dated
effective April 21, 1995, and filed for record in the Official Public Records of
Real Property of Xxxxxx County, Texas; and, most recently, by (e) a Sixth
Modification Agreement dated May 28, 1996, filed for record in the Official
Public Records of Real Property of Xxxxxx County, Texas on March 31, 1997 under
County Clerk's File No. S379149; and
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(2) a Deed of Trust filed for record in the Official Public Records of
Real Property of Xxxxxx County, Texas, under Clerk's File No. L524904 covering
the property more fully described therein; which liens were transferred and
assigned to Lender by that certain Transfer of Note and Liens dated May 20,
1991, and filed for record in the Official Public Records of Real Property of
Xxxxxx County, Texas under Clerk's File No. N191393; which liens were modified,
renewed and extended pursuant to the terms and conditions of (a) the Xxxxxx
County Modification; and (b) that certain Supplemental Deed of Trust dated May
21, 1991, and filed for record in the Official Public Records of Real Property
of Tarrant County, Texas, under Volume 10321, Page 2277.
It is expressly agreed that the holder of the Note secured hereby is subrogated
to all the rights, liens and equities securing the original indebtedness above
described.
41. NO ORAL AGREEMENTS. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
EXECUTED to be effective as of the 18th day of June, 1997.
"BORROWER"
XXXXXX-XXXXXX, INC.,
a Texas corporation
By: /s/ XXXXXX X. XXXXXX
-------------------------
Xxxxxx X. Xxxxxx
Chairman of the Board of Directors
THE STATE OF TEXAS (S)
(S)
COUNTY OF XXXXXX (S)
This instrument was acknowledged before me on June 18, 1997, by Xxxxxx X.
Xxxxxx, Chairman of the Board of Directors of Xxxxxx-Xxxxxx, Inc., a Texas
corporation, on behalf of said corporation.
/s/ XXXXXX X. XXXXXXX
-----------------------------
Notary Public, Xxxxx xx Xxxxx
-00-
XXXXXXX "X"
XXXXXX XXXXXX PROPERTY
Tract I:
Being 13.400 acres out of the Xxxx Xxxxxxx 1/3 League, Xxxxxxxx Xx. 000,
Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx; said 13.400 acre tract being part of and out of
that certain tract described by instrument filed under County Clerk's File No.
F921426, and recorded under Film Code No. 000-00-0000, of the Official Public
Records of Real Property of Xxxxxx County, Texas, and being a portion of that
certain tract described by instrument filed under Xxxxxx County Clerk's File No.
F921425, and recorded under Film Code No. 000-00-0000, of said property records;
said 13.400 acre tract of land being more fully described as follows:
COMMENCING at a found 1-1/4 inch iron pipe marking the southeasterly corner of
Central Park Northwest, Section Two, as recorded in Volume 286, Page 62 of the
Xxxxxx County Map Records of Xxxxxx County, Texas; said 1-1/4 inch iron pipe
also marking the northerly right-of-way line of Dacoma Street (width varies);
THENCE S 89 degrees 04' 00" W, a distance of 278.80 feet along said northerly
right of way line for Dacoma Street to a found 1-3/8 inch iron rod marking the
beginning of a curve to the right;
THENCE along said curve to the right having a central angle of 13 degrees 34'
20" and a radius of 1357.50 feet, an arc distance of 321.57 feet, subtended by a
chord bearing S 89 degrees 08' 50" E, 320.82 feet in length, to a found 5/8 inch
iron rod in the northerly right-of-way line of Dacoma Street (width varies),
said point also marking the southeast corner of the remainder of Lot 4 out of
the XXXXXX Subdivision as recorded in Volume 25, page 1 of the Xxxxxx County Map
Records;
THENCE N 15 degrees 54' 06" E, along the easterly line of said XXXXXX
Subdivision, for total length of 574.57 feet to a found 1/2 inch iron rod; said
point being the Point of Beginning;
THENCE S 49 degrees 45' 31" E, a distance of 143.98 feet to a found 5/8 inch
iron rod found in the westerly line of a 21.9867 acre tract as described by
instrument filed under County Clerk's File No. F808743, and recorded under Film
Code No. ###-##-####, of the Official Public Records of Real Property of Xxxxxx
County, Texas;
THENCE N 17 degrees 35' 00" E, along westerly line of said 21.9867 acre tract a
distance of 91.10 feet to a set 5/8 inch iron rod marking the beginning of a
curve to the left;
THENCE along said curve to the left having a central angle of 16 degrees 18'
00", a radius of 270.00 feet, subtending by a chord bearing N 09 degrees 26' 00"
E, 76.55 feet in length, and a total distance of 76.81 feet to a found 5/8 inch
iron rod, said rod being in the westerly line of said 21.9867 acre tract;
Page 1 of 3 Pages
THENCE N 01 degrees 17' 00" E, along the westerly line of said 21.9867 acre
tract a distance of 574.58 feet to a set 5/8 inch iron rod;
THENCE N 66 degrees 23' 00" W, a distance of 570.83 feet to a set 5/8 inch iron
rod marking an interior corner of said 21.9867 acre tract;
THENCE S 23 degrees 37' 00" W, with the easterly line for the Fairway Park
Subdivision as recorded in Volume 184, Page 135, of the Xxxxxx County Map
Records, a distance of 931.73 feet to a set 5/8 inch iron rod;
THENCE S 66 degrees 24' 48" E, a distance of 479.00 feet to a set 5/8 inch iron
rod;
THENCE N 16 degrees 06' 00" E, a distance of 314.37 feet to a found cyclone
fence corner;
THENCE S 74 degrees 14' 34" E, a distance of 85.04 feet to a found 1/2 inch iron
rod;
THENCE S 49 degrees 46' 17" E, a distance of 164.47 feet to the PLACE OF
BEGINNING and containing 13.400 acres (583,704 square feet) of land more or
less.
Tract II:
Easement rights appurtenant to 13.400 acres, more or less, described as Tract I
hereinabove, out of the Xxxx Xxxxxxx 1/3 League, Abstract No. 269, Houston,
Xxxxxx County, Texas, as such rights were created by and between Xxxxxx X.
Xxxxxx, Trustee, et. al., and Keystone International, Inc., as set forth under
instrument filed under Clerk's File No. J851285 of the Official Public Records
of Real Property of Xxxxxx County, Texas.
Page 2 of 3 Pages
EXHIBIT "A"
TARRANT COUNTY PROPERTY
Xxxx 0, 0, 0, 0, 0, 0, 0 and 10, Block 1, XXXXXX ADDITION to the City of Xxxxxx
City, Tarrant County, Texas, according to plat recorded in Volume 388-18, Page
73, Deed Records of Tarrant County, Texas.
Page 3 of 3 Pages
AMENDED AND RESTATED
SECURITY AGREEMENT
(ACCOUNTS, INVENTORY, EQUIPMENT, FIXTURES,
GENERAL INTANGIBLES, OTHER)
June 18, 1997
XXXXXX-XXXXXX, INC., a Texas corporation with its office and its address
for notice being 0000 Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx 00000
(hereinafter called "Debtor"), for value received, the receipt and sufficiency
of which are hereby acknowledged, hereby grants to BANK ONE TEXAS, N.A., a
national banking association (hereinafter called "Secured Party"), the security
interest hereinafter set forth and agrees with Secured Party as follows:
SECTION 1. SECURITY INTEREST.
1.1 Collateral. Debtor hereby grants to Secured Party a security interest
in and agrees that Secured Party has and shall continue to have a security
interest in the following property, to-wit:
ACCOUNTS:
All accounts now owned or existing as well as any and all that may
hereafter arise or be acquired by Debtor, and all the proceeds and
products thereof, including without limitation, all notes, drafts,
acceptances, instruments and chattel paper arising therefrom, and all
returned or repossessed goods arising from or relating to any such
accounts, or other proceeds of any sale or other disposition of
inventory;
INVENTORY:
All of Debtor's inventory, including all goods, merchandise, raw
materials, goods in process, finished goods and other tangible
personal property now owned or hereafter acquired and held for sale or
lease or furnished or to be furnished under contracts for service or
used or consumed in Debtor's business and all additions and accessions
thereto and contracts with respect thereto and all documents of title
evidencing or representing any part thereof, and all products and
proceeds thereof;
FIXTURES:
All of Debtor's fixtures and appurtenances thereto, and such other
goods, chattels, fixtures, equipment and personal property affixed or
in any manner attached to the real estate and or building(s) or
structure(s) described in Exhibit "A" attached hereto, including all
additions and accessions thereto and
replacements thereof and articles in substitution therefor, howsoever
attached or affixed;
EQUIPMENT:
All equipment of every nature and description whatsoever now owned or
hereafter acquired by Debtor including all accessions, appurtenances
and additions thereto and substitutions therefor, wheresoever located,
including all tools, parts and accessories used in connection
therewith;
GENERAL INTANGIBLES:
All property (including things in action) other than goods, accounts,
chattel paper, documents, instruments and money;
CHATTEL PAPER:
All of Debtor's interest under lease agreements and other instruments
or documents, whether now existing or owned by Debtor or hereafter
arising or acquired by Debtor, evidencing both a debt and security
interest in or lease of specific goods;
INSTRUMENTS AND DOCUMENTS:
All of Debtor's now owned or existing as well as hereafter acquired or
arising instruments, documents and money;
and accessions, additions and attachments thereto and the proceeds and products
thereof, including without limitation, all cash, general intangibles, accounts,
inventory, equipment, fixtures, farm products, notes, drafts, acceptances,
instruments and chattel paper or other property, benefits or rights arising
therefrom, and in and to all returned or repossessed goods arising from or
relating to any of the collateral described herein or other proceeds of any sale
or other disposition of such collateral (all of the foregoing hereinafter
sometimes called the "Collateral").
1.2 Obligations. The security interest granted hereby is to secure the
payment of (i) a Master Revolving Credit Note executed by Debtor, of even date
herewith, in the principal amount of $2,200,000.00 and made payable to the order
of Secured Party, and any and all extensions, renewals and rearrangements
thereof, (ii) a Renewal and Modification Promissory Note of even date herewith,
executed by Debtor in the principal amount of $4,200,000.00 and made payable to
the order of Secured Party, which Note represents a consolidation, renewal and
enlargement of certain promissory notes more fully described therein, (iii) a
Renewal and Modification Advancing Promissory Note of even date herewith, duly
executed by Debtor in the principal amount of $1,000,000.00 and made payable to
the order of Secured Party, and any and all extensions, renewals and
rearrangements thereof,
-2-
(iv) a Promissory Note executed by Debtor in the original principal amount of
$1,390,000.00 of even date herewith, and made payable to the order of Secured
Party, and any and all extensions, renewals, and rearrangements thereof, and (v)
any and all other indebtedness and liabilities whatsoever of Debtor to Secured
Party whether direct or indirect, absolute or contingent, due or to become due
and whether now existing or hereafter arising and howsoever evidenced or
acquired, whether joint or several (all of which are hereinafter sometimes
called the "Obligations"). Debtor acknowledges that the security interest
hereby granted shall secure all future advances as well as any other obligations
and liabilities of Debtor to Secured Party whether now in existence or hereafter
arising.
SECTION 2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.
2.1 Ownership. Except for the security interest granted hereby and any
security interests approved by Secured Party, the Debtor is, and as to the
Collateral acquired after the date hereof which is included within the security
interest specified in Section 1 hereof, Debtor will be, the owner of all such
Collateral free from all adverse claims, security interests and encumbrances.
2.2. Liens. There is no financing statement now on file in any public
office covering any part of the Collateral, and so long as any amount remains
unpaid on any Obligations of the Debtor to Secured Party, Debtor will not
execute and there will not be on file in any public office any such enforceable
financing statement or statements except the financing statement filed or to be
filed in respect to the security interest hereby granted.
2.3 Financial Information. Subject to any limitation stated therein or in
connection therewith, all information furnished to Secured Party concerning the
Collateral and proceeds thereof, or otherwise for the purpose of obtaining
credit or an extension of credit, is or will be at the time the same is
furnished, accurate and correct in all material respects.
2.4 Business Use. The Collateral will be used by the Debtor primarily for
business use.
2.5 Removal. Except as herein provided, Debtor will not remove the
Collateral from the county or counties designated at the beginning of this
Agreement without the written consent of Secured Party. The address of Debtor
designated at the beginning of this Agreement is Debtor's place of business if
Debtor has no place of business. Debtor agrees to notify Secured Party promptly
of any change in such address.
SECTION 3. PROVISIONS REGARDING ACCOUNTS.
The following provisions shall apply to all accounts included within the
Collateral:
3.1 Eligible Accounts. The term "account", as used in this Agreement
shall have the same meaning as set forth in the Uniform Commercial Code of Texas
(the "UCC") in effect as of the date of execution hereof, and as set forth in
any amendment to the UCC to become effective after the date of execution hereof,
and also shall include all present and
-3-
future notes, instruments, documents, general intangibles, drafts, acceptances
and chattel paper of Debtor, and the proceeds thereof. As of the time any
account becomes subject to such security interest, Debtor shall be deemed to
have warranted as to each and all of such accounts (i) that each account and all
papers and documents relating thereto are genuine and in all respects what they
purport to be, (ii) that each account is valid and subsisting and arises out of
a bona fide sale of goods sold and delivered to, or out of and for services
therefore actually rendered by Debtor to, the account debtor named in the
account, (iii) that the amount of the account represented as owing is the
correct account actually and unconditionally owing except for normal cash
discounts and is not subject to any set-offs, credits, deductions or
countercharges, (iv) that Debtor is the owner thereof free and clear of all
liens, encumbrances and security interest of any and every nature whatsoever.
3.2 Collection. Secured Party shall have the right in its own name or in
the name of Debtor, after an Event of Default by Debtor and upon five (5) days'
advance notice to Debtor, to demand, collect, receive, receipt for, xxx for,
compound and give acquittal for, any and all amounts due or to become due on the
accounts and to endorse the name of Debtor on all commercial paper given in
payment or part payment thereof, and in its discretion to file any claim or take
any other action or proceeding which Secured Party may deem necessary or
appropriate to protect and preserve and realize upon the security interest of
Secured Party in the Collateral. In order to assure collection of accounts in
which Secured Party has a security interest hereunder, Secured Party may notify
the post office authorities to change the address for delivery of mail addressed
to Debtor to such address as Secured Party may designate, and to open and
dispose of such mail and receive the collections of accounts included herewith.
3.3 Further Action. Debtor will from time to time execute such further
instruments and do such further acts and things as Secured Party may reasonably
require, by way of further assurance to Secured Party, including without
limitation, an assignment or other form of identification in the form required
by Secured Party of all accounts and/or chattel paper, together with such other
evidence of the existence and identity of such accounts or chattel paper as
Secured Party may reasonably require.
SECTION 4. PROVISIONS REGARDING INVENTORY.
The following provisions shall apply to all inventory included within the
Collateral:
4.1 Location. Debtor will promptly notify Secured Party in writing of any
addition to, change in or discontinuance of its places of business, the places
at which inventory that is included in the Borrower's Loan Limit (as defined in
the Loan Agreement described in Section 7.5 hereof) is located as shown herein,
the location of its chief executive office and the location of the office where
it keeps its records as set forth herein. All Collateral included in said
Borrower's Loan Limit will be located at Debtor's places of business existing on
the date hereof as modified by any notice(s) given pursuant hereto.
4.2 Use of Inventory. Until an Event of Default, Debtor may use the
inventory in any lawful manner not inconsistent with this Agreement or with the
terms or conditions of
-4-
any policy of insurance thereon and may also sell that part of the Collateral
consisting of inventory provided that all of such sales are in the ordinary
course of business. A sale in the ordinary course of business does not include
a transfer in partial or total satisfaction of a debt. Until an Event of
Default, Debtor may also use and consume any raw materials or supplies, the use
and consumption of which are necessary in order to carry on Debtor's business.
4.3 Proceeds. All accounts which are proceeds of the inventory collateral
covered hereby shall be subject to all of the terms and provisions hereof
pertaining to accounts.
SECTION 5. GENERAL COVENANTS.
5.1 Financing Statements. Debtor agrees to execute and deliver such
financing statement or statements, or amendments thereof or supplements thereto,
or other instruments as Secured Party may from time to time require in order to
comply with the UCC (or other applicable State law of the jurisdiction where any
of the Collateral is located) and to preserve and protect the security interest
hereby granted.
5.2 Performance by Secured Party. Secured Party may, at its option, after
an Event of Default, but without obligation to Debtor, discharge taxes, liens or
security interests or other encumbrances at any time levied or placed upon the
Collateral, and may place and pay for insurance thereon, or pay for the repair,
improvement, maintenance and preservation of the Collateral and pay any filing
or recording fees necessary to preserve and protect the security interest hereby
granted. Debtor agrees to reimburse Secured Party on demand for any payment
made or any expense incurred by Secured Party pursuant to the foregoing
authorization, and such amount shall constitute additional obligations of Debtor
which shall be secured by and entitled to the benefits of this Agreement.
Debtor agrees to pay interest on such amounts at a rate per annum at all times
equal to the highest lawful contract rate permitted by applicable usury laws
from the date such are incurred by Secured Party until paid by Debtor.
5.3 Collection of Accounts and Chattel Paper. Secured Party shall have
the right at any time, in its own name or in the name of Debtor, after an Event
of Default by Debtor and upon five (5) days' notice to Debtor, to notify any and
all account debtors or lessees under chattel paper to make payment thereof
directly to Secured Party and to demand, collect, receive, receipt for, xxx for,
compound for and give acquittal for, any and all amounts due or to become due on
the accounts and chattel paper, and to endorse the name of Debtor on all
commercial paper or chattel paper, as the case may be, given in payment or part
payment thereof, and in its discretion to file any claim or take any other
action or proceeding which Secured Party may deem necessary or appropriate to
protect and preserve and realize upon the security interest of Secured Party in
the Collateral; but to the extent Secured Party does not so elect, Debtor shall
continue to collect the accounts and rents under chattel paper. Except as
otherwise permitted by the provision to this sentence, all proceeds of
collection of accounts and chattel paper received by Debtor shall forthwith be
accounted for and transmitted to Secured Party in the form as received by Debtor
and shall not be commingled with any funds of Debtor; provided, however, that
prior to an Event of Default by Debtor in
-5-
the payment of any Obligations to Secured Party or until the privilege given to
Debtor by this provision shall be revoked by Secured Party in writing, Debtor
need transmit to Secured Party only the proceeds of accounts included in the
identification or assignment made pursuant to Section 3.3.
5.4 Inspection of Collateral. Debtor shall at all reasonable times allow
Secured Party by or through any of its officers, agents, attorneys or
accountants, to examine or inspect the Collateral wherever located and to
examine, inspect and make extracts from Debtor's books and records. Debtor
shall do, make execute and deliver all such additional and further acts, things,
deeds, insurances, instruments as Secured Party may require, to more completely
vest in and assure to Secured Party its rights hereunder and in or to the
Collateral.
5.5 Insurance. Debtor shall have and maintain insurance at all times with
respect to all tangible Collateral covered hereby insuring against risks of fire
(including so-called extended coverage), theft and other risks as Secured Party
may reasonably require, containing such terms, in such form and amounts and
written by such companies as may be reasonably satisfactory to Secured Party,
all of such insurance to contain loss payable clauses in favor of Secured Party
as its interest may appear. All policies of insurance shall provide for ten
(10) days' written minimum cancellation notice to Secured Party and at request
of Secured Party shall be delivered to and held by it. Secured Party is hereby
authorized to act as attorney for Debtor in obtaining, adjusting, settling and
cancelling such insurance and endorsing any drafts or instruments. Secured
Party shall be authorized to apply the proceeds from any insurance to the
Obligations secured hereby whether or not such Obligations are then due and
payable.
5.6 Additional Collateral. As additional security for payment of the
Obligations, Debtor hereby grants to Secured Party a security interest, and a
contractual pledge and assignment of, in and to any and all money, property,
accounts, securities, documents, chattel paper, claims, demands, instruments,
items or deposits of Debtor, or to which Debtor is a party, now held or
hereafter coming within Secured Party's custody or control, including without
limitation, all certificates of deposit and other depository accounts, whether
such have matured or the exercise of Secured Party's rights results in loss of
interest or other penalty on such deposits. Without prior notice to or demand
upon Debtor, Secured Party may exercise its rights granted above, as well as
other rights and remedies at law and equity (all of which are cumulative), at
any time when an Event of Default has occurred.
SECTION 6. DEFAULT.
6.1 Event of Default. The occurrence of any one or more of the following
events or conditions shall constitute an event of default (herein called an
"Event of Default"): (a) an Event of Default under the terms of the Loan
Agreement; (b) the title of Debtor to a substantial part of the Collateral shall
become the subject of litigation which would or might, in Secured Party's
opinion, upon final determination result in substantial impairment or loss of
the security provided by this Agreement and upon notice by Secured Party to
Debtor such litigation is not dismissed within sixty (60) days of such notice;
(c) any sale, lease, encumbrance, transfer or other disposition of the
Collateral without Secured Party's consent;
-6-
or (d) the Collateral becomes, in the reasonable judgment of Secured Party,
unsatisfactory or insufficient in character or value.
6.2 Maturity of Obligation. Upon the occurrence of an Event of Default,
and at any time thereafter, Secured Party, may, at its option, without demand,
notice of intention to accelerate, notice of acceleration, notice of nonpayment,
presentment, protest, notice of dishonor, or any other notice whatsoever, to the
Debtor, declare all Obligations secured hereby immediately due and payable and
Secured Party shall thereupon have the rights and remedies of a secured party
under the UCC and as otherwise granted herein or under any applicable law or in
any other agreement executed by Debtor (all of which rights and remedies shall
be cumulative), including, without limitation, the right to sell, lease or
otherwise dispose of any or all of the Collateral and to apply the proceeds
thereof toward payment of any costs and expenses and attorney's fees and legal
expenses thereby incurred by the Secured Party and toward payment of the
Obligations in such order or manner as the Secured Party may elect. Secured
Party shall have the right to take immediate possession of the Collateral, with
or without process of law, and for that purpose Secured Party may enter upon any
premises on which the Collateral or any part thereof may be situated and remove
the same therefrom. Secured Party may require Debtor to assemble the Collateral
and make it available to Secured Party at a place to be designated by the
Secured Party which is reasonably convenient to both parties. Unless the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, Secured Party will send Debtor
reasonable notice of the time and place of any public sale thereof or of the
time after which any private sale or other disposition thereof is to be made.
The requirement of sending a reasonable notice shall be met if such notice is
mailed, postage prepaid, to Debtor at the address designated at the beginning of
this Agreement at least ten (10) days before the time of the sale or
disposition. Expenses of sale, legal expenses, plus interest thereon at a rate
per annum at all times equal to the highest lawful contract rate permitted by
applicable usury laws, shall constitute additional Obligations of Debtor which
shall be due on demand and which shall be secured by and entitled to the
benefits of this Agreement. If the proceeds of any sale or other lawful
disposition by Secured Party of the Collateral following its retaking are
insufficient to pay the expenses of retaking, repairing, holding, preparing the
Collateral for sale, selling it and the like, to satisfy the Obligations of
Debtor to Secured Party, then Debtor agrees to pay any deficiency, but Debtor
shall be entitled to any surplus if one results after lawful application of all
such proceeds.
6.3 Remedy. Secured Party may remedy any Event of Default and may waive
any default without waiving the Event of Default remedied or without waiving any
other prior or subsequent Event of Default.
6.4 Limitation of Charges. It is the intention of the parties hereto to
comply with applicable laws; accordingly, it is agreed that notwithstanding any
provision to the contrary in this Agreement, or in any of the documents
evidencing the Obligations or otherwise relating thereto, no such provision
shall require the payment or permit the collection of interest in excess of the
maximum permitted by such laws. If any excess of interest in such respect is
provided for, or shall be adjudicated to be so provided for, in this Security
Agreement, or in any of the documents evidencing the Obligations or otherwise
relating
-7-
thereto, then in such event (a) the provisions of this Section shall govern and
control, (b) neither Debtor hereof nor its successors or assigns or any other
party liable for the payment thereof, shall be obligated to pay the amount of
such interest to the extent that it is in excess of the maximum amount permitted
by such laws, (c) any such excess which may have been collected shall be, at the
option of the holder of the instrument evidencing the Obligations, either
applied as a credit against the then unpaid principal amount thereof or refunded
to the maker thereof and (d) the effective rate of interest shall be
automatically subject to reduction to the maximum lawful rate allowed to be
lawfully contracted for by Debtor under applicable usury laws as now or
hereafter construed by the courts having jurisdiction. It is further agreed
that without limitation of the foregoing, all calculations of the rate of
interest contracted for, charged or received under the Note or under such other
documents which are made for the purpose of determining whether such rate
exceeds the maximum lawful rate of interest, shall be made, to the extent
permitted by applicable laws, by amortizing, prorating, allocating and spreading
in equal parts during the period of full stated term of the Obligations, all
interest at any time contracted for, charged or received from Debtor or
otherwise by the holder of the Obligations in connection with such Obligations.
6.5 Cumulative Remedies. The remedies of Secured Party hereunder are
cumulative, and the exercise of any one or more of the remedies provided herein
shall not be construed as a waiver of any of the other remedies of Secured
Party.
SECTION 7. GENERAL.
7.1 Partial Invalidity and Construction. Any provision hereon found to be
invalid under the law of the State of Texas, or any other State having
jurisdiction or other applicable law, shall be invalid only with respect to the
offending provision. All words used herein shall be construed to be of such
gender or number as the circumstances require. If this Agreement is executed by
more than one Debtor, the obligations of all such Debtors shall be joint and
several. This Agreement shall be binding upon the heirs, personal
representatives, successors or assigns of the parties hereto, but shall inure to
the benefit of successor or assigns of Secured Party only. The law of the State
of Texas shall apply to this Agreement and its construction and interpretation.
7.2 Reproduction as Financing Statement. Any carbon, photographic or
other reproduction of any financing statement signed by Debtor is sufficient as
a financing statement for all purposes, including without limitation, filing in
any state as may be permitted by the provisions of the Uniform Commercial Code
of such state.
7.3 Prior Agreements. This Agreement and the security interest herein
granted are in addition to, and not in substitution, novation or discharge of,
any and all prior or contemporaneous security agreements and security interests
in favor of Secured Party or assigned to Secured Party by others. All rights,
powers and remedies of Secured Party in all such security agreements are
cumulative, but in the event of actual conflict in terms and conditions, the
terms and conditions of the latest security agreement shall govern and control.
-8-
7.4 Continuing Effect. The security interest hereby granted and all the
terms and provisions hereof shall be deemed a continuing security agreement and
shall continue in full force and effect, and all the terms and provisions hereof
shall remain effective as between the parties, until first to occur of the
following: (i) the expiration of four (4) years from the date of payment of
Debtor's last Obligations to Secured Party; or (ii) repayment by Debtor of all
Obligations secured hereby and the giving by Debtor of ten (10) days' written
notice of revocation of the terms and provisions hereof.
7.5 Loan Agreement. This Agreement is being executed in connection with
that certain Amended and Restated Letter Loan Agreement (the "Loan Agreement")
by and between Debtor and Secured Party of even date herewith, reference to
which is here made for all purposes.
7.6 Amendment and Restatement. This Agreement is given in amendment and
restatement of that certain Amended and Restated Security Agreement dated April
21, 1995, executed by and between Debtor and Secured Party. All security
interests securing the Obligations are hereby ratified, confirmed, renewed,
extended and brought forward and said security interests shall not in any manner
be waived, the purpose of this amendment and restatement being simply to carry
forward all security interests securing the Obligations, which security
interests are acknowledged by Debtor to be valid and subsisting.
7.7 No Oral Agreements. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
SIGNED in multiple counterparts and delivered on the day and year first
above written.
Debtor:
XXXXXX-XXXXXX, INC.
By /s/ XXXXXX X. XXXXXX
-------------------------
Xxxxxx X. Xxxxxx,
Chairman of the Board
-9-
EXHIBIT "A"
XXXXXX COUNTY PROPERTY
Tract I:
Being 13.400 acres out of the Xxxx Xxxxxxx 1/3 League, Xxxxxxxx Xx. 000,
Xxxxxxx, Xxxxxx Xxxxxx, Xxxxx; said 13.400 acre tract being part of and out of
that certain tract described by instrument filed under County Clerk's File No.
F921426, and recorded under Film Code No. 000-00-0000, of the Official Public
Records of Real Property of Xxxxxx County, Texas, and being a portion of that
certain tract described by instrument filed under Xxxxxx County Clerk's File No.
F921425, and recorded under Film Code No. 000-00-0000, of said property records;
said 13.400 acre tract of land being more fully described as follows:
COMMENCING at a found 1-1/4 inch iron pipe marking the southeasterly corner of
Central Park Northwest, Section Two, as recorded in Volume 286, Page 62 of the
Xxxxxx County Map Records of Xxxxxx County, Texas; said 1-1/4 inch iron pipe
also marking the northerly right-of-way line of Dacoma Street (width varies);
THENCE S 89 degrees 04' 00" W, a distance of 278.80 feet along said northerly
right of way line for Dacoma Street to a found 1-3/8 inch iron rod marking the
beginning of a curve to the right;
THENCE along said curve to the right having a central angle of 13 degrees 34'
20" and a radius of 1357.50 feet, an arc distance of 321.57 feet, subtended by a
chord bearing S 89 degrees 08' 50" E, 320.82 feet in length, to a found 5/8 inch
iron rod in the northerly right-of-way line of Dacoma Street (width varies),
said point also marking the southeast corner of the remainder of Lot 4 out of
the XXXXXX Subdivision as recorded in Volume 25, page 1 of the Xxxxxx County Map
Records;
THENCE N 15 degrees 54' 06" E, along the easterly line of said XXXXXX
Subdivision, for total length of 574.57 feet to a found 1/2 inch iron rod; said
point being the Point of Beginning;
THENCE S 49 degrees 45' 31" E, a distance of 143.98 feet to a found 5/8 inch
iron rod found in the westerly line of a 21.9867 acre tract as described by
instrument filed under County Clerk's File No. F808743, and recorded under Film
Code No. ###-##-####, of the Official Public Records of Real Property of Xxxxxx
County, Texas;
THENCE N 17 degrees 35' 00" E, along westerly line of said 21.9867 acre tract a
distance of 91.10 feet to a set 5/8 inch iron rod marking the beginning of a
curve to the left;
THENCE along said curve to the left having a central angle of 16 degrees 18'
00", a radius of 270.00 feet, subtending by a chord bearing N 09 degrees 26' 00"
E, 76.55 feet in length, and a total
Page 1 of 3 Pages
distance of 76.81 feet to a found 5/8 inch iron rod, said rod being in the
westerly line of said 21.9867 acre tract;
THENCE N 01 degrees 17' 00" E, along the westerly line of said 21.9867 acre
tract a distance of 574.58 feet to a set 5/8 inch iron rod;
THENCE N 66 degrees 23' 00" W, a distance of 570.83 feet to a set 5/8 inch iron
rod marking an interior corner of said 21.9867 acre tract;
THENCE S 23 degrees 37' 00" W, with the easterly line for the Fairway Park
Subdivision as recorded in Volume 184, Page 135, of the Xxxxxx County Map
Records, a distance of 931.73 feet to a set 5/8 inch iron rod;
THENCE S 66 degrees 24' 48" E, a distance of 479.00 feet to a set 5/8 inch iron
rod;
THENCE N 16 degrees 06' 00" E, a distance of 314.37 feet to a found cyclone
fence corner;
THENCE S 74 degrees 14' 34" E, a distance of 85.04 feet to a found 1/2 inch iron
rod;
THENCE S 49 degrees 46' 17" E, a distance of 164.47 feet to the PLACE OF
BEGINNING and containing 13.400 acres (583,704 square feet) of land more or
less.
Tract II:
Easement rights appurtenant to 13.400 acres, more or less, described as Tract I
hereinabove, out of the Xxxx Xxxxxxx 1/3 League, Abstract No. 269, Houston,
Xxxxxx County, Texas, as such rights were created by and between Xxxxxx X.
Xxxxxx, Trustee, et. al., and Keystone International, Inc., as set forth under
instrument filed under Clerk's File No. J851285 of the Official Public Records
of Real Property of Xxxxxx County, Texas.
Page 2 of 3 Pages
EXHIBIT "A"
TARRANT COUNTY PROPERTY
Xxxx 0, 0, 0, 0, 0, 0, 0 and 10, Block 1, XXXXXX ADDITION to the City of Xxxxxx
City, Tarrant County, Texas, according to plat recorded in Volume 388-18, Page
73, Deed Records of Tarrant County, Texas.
XXXXXX-XXXXXX, INC.
CERTIFICATE
The undersigned hereby certifies that he is the duly elected and acting
Secretary of XXXXXX-XXXXXX, INC., a Texas corporation (the "Company"), and as
such has custody of the corporate records of the Company and is authorized to
execute and deliver this Certificate on behalf of the Company; and with
reference to loans being extended by BANK ONE TEXAS, N.A. (the "Lender") to the
Company, the undersigned hereby further certifies as follows:
1. Attached hereto as Exhibit "A" is a full, true and correct copy of the
Resolutions duly adopted by the Board of Directors of the Company by a unanimous
written consent effective June 18, 1997, in accordance with the Texas Business
Corporation Act, and the Articles of Incorporation and Bylaws of the Company.
2. The Resolutions attached as Exhibit "A" hereto have not been amended,
modified or rescinded and are in full force and effect on the date hereof.
3. The undersigned officers have been duly elected to the positions set
forth next to their respective names below, and are qualified to act in such
capacities and execute documents on behalf of the Company, and the signature
appearing opposite each name is the authentic signature of each such officer.
Name Office Signature
---- ------ ---------
/s/ XXXXXXXXX X. XXXXXX
Xxxxxxxxx X. Xxxxxx President ________________________
Chairman of the Board /s/ XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx and ________________________
Chief Executive Officer
/s/ XXXXXXXX X. XXXXXXX
Xxxxxxxx X. Xxxxxxx Secretary ________________________
4. The Company is duly organized and existing under the laws of the State
of Texas.
5. All franchise and other taxes required to maintain the Company's
existence have been paid and no such taxes are delinquent.
6. No proceedings are pending for the forfeiture of the Company's
authority to do business or to force its dissolution, voluntarily or
involuntarily.
7. There is no provision in the Articles of Incorporation or Bylaws of the
Company limiting the above-described resolutions, and said resolutions are in
conformity with the provisions of the Company's Articles of Incorporation and
Bylaws, and with the proceedings of the Board of Directors.
8. The Articles of Incorporation of the Company previously delivered to
the Lender are in full force and effect and have not been amended or modified,
except as may have been disclosed in writing to the Lender.
9. The Bylaws of the Company previously delivered to the Lender are in
full force and effect and have not been amended or modified except as may have
been disclosed in writing to the Lender.
EXECUTED the 18th day of June, 1997.
/s/ XXXXXXXX X. XXXXXXX
____________________________________
Xxxxxxxx X. Xxxxxxx, Secretary
The undersigned, the Chairman of the Board of the Company, hereby certifies
that Xxxxxxxx X. Xxxxxxx is the Secretary of the Company and is authorized to
execute and deliver this Certificate for and on behalf of the Company.
/s/ XXXXXX X. XXXXXX
____________________________________
Xxxxxx X. Xxxxxx, Chairman of the Board
-2-
EXHIBIT "A"
WHEREAS, XXXXXX-XXXXXX, INC. (the "Company") shall secure loans (the
"Loans") from BANK ONE TEXAS, N.A. (the "Lender"), in the total amount of
$8,790,000.00, pursuant to the terms of the Amended and Restated Letter Loan
Agreement.
RESOLVED, further, in regard to the Loan that any one of the President, the
Chairman of the Board of Directors, the Chief Executive Officer, or the
Secretary of the Company is hereby authorized and directed to execute and
deliver, for and on behalf of the Company, documents as may be deemed necessary
or desirable by such officers or required by the Lender in regard to the Loan;
and further
RESOLVED, that the drafts of such documents presented to the Board of
Directors of the Company are hereby approved; and further
RESOLVED, that the officers executing and delivering any of the above-
described documents are hereby authorized and empowered to execute and deliver
the same in the name and on behalf of the Company, and in such manner of
counterparts as the officer or officers executing the same shall deem necessary
or desirable, and with such terms, conditions and provisions, including
modifications from the drafts presented to the Board of Directors, as the
officer or officers executing the same may approve, the execution of such
documents to evidence with approval conclusively; and further
RESOLVED, that any and all instruments executed and delivered on behalf of
the Company in connection with the foregoing resolutions by any person
purporting to be an officer of the Company shall be deemed to be the act of the
Company and shall be in all respects binding against the Company; and further
RESOLVED, that the officers of the Company be, and they hereby are,
authorized and empowered on behalf of and in the name of the Company to take or
cause to be taken in the name of the Company all such other and further action,
to make all payments and to execute, acknowledge and deliver any and all
certificates, opinions, documents and other instruments in such form and under
the corporate seal as required, as in the judgment of such officers may be
necessary, proper or convenient in order to carry out the foregoing resolutions,
to consummate the Loan described herein, and to comply with the terms and
provisions of all the documents described above; and further
RESOLVED, that all actions by any and all officers of the Company taken or
performed up to the date hereof and in respect to the preparation, execution and
delivering of the documents, certificates or other instruments required pursuant
to the provisions of the above-described documents, and the taking prior to the
date hereof of any and all actions otherwise required by the terms and
provisions of said documents or any other documents executed in connection
therewith be, and they are hereby, in all respects approved, ratified and
confirmed; and further
RESOLVED, that any one of the President, the Chairman of the Board of
Directors, the Chief Executive Officer or the Secretary of the Company is hereby
authorized to make applications for and effect other loans from time to time on
behalf of the Company from the
A-1
Lender and for such loans, to make, execute and deliver promissory notes,
drafts, bonds or other written obligations of the Company in such form, date and
maturity and at such rate of interest as such officer or officers of the Company
may determine and in the event the Company adopts a corporate seal, to cause the
same to be affixed to any such instruments whenever necessary or required. It
is further resolved that said officers are hereby authorized in the name of the
Company to renew or extend any loan or loans from time to time and execute and
deliver promissory notes, drafts, bonds or other obligations or extensions to
any notes theretofore given; and further
RESOLVED, that the authority hereinabove given to said officers to
negotiate loans in excess of the Loan specifically referenced herein shall
remain irrevocable insofar as the Lender is concerned until the Lender be
notified of the revocation of such authority and shall in writing acknowledge
receipt of such notification.
A-2
NOTICE OF INVALIDITY OF ORAL AGREEMENTS
TO: BORROWER AND ALL OTHER DEBTORS AND OBLIGORS WITH RESPECT TO THE LOAN WHICH
IS IDENTIFIED BELOW.
1. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
2. As used in this Notice:
"Borrower" means the borrower identified below.
"Debtor" and "Obligor" mean any entity who (i) is obligated or becomes
obligated to pay the Loan (for example, as maker, cosigner or guarantor) or (ii)
has pledged any property as security for the Loan.
"Lender" means the lender identified below.
"Loan" means the loans by Lender which are evidenced by the promissory
notes and note modification agreements of even date herewith executed by
Borrower, payable to the order of Lender, as more fully described in the Amended
and Restated Letter Loan Agreement of even date herewith.
"Loan Agreement" means one or more promises, promissory notes, agreements,
undertakings, security agreements, deeds of trust or other documents, or
commitments, or any combination of those actions or documents, relating to the
Loan.
3. Each Borrower, Debtor, and Obligor who signs below acknowledges,
represents, and warrants to Lender that Lender has given and such party has
received a copy of this Notice on the date stated above, prior to the execution
of any Loan Agreement.
LENDER: BORROWER:
BANK ONE TEXAS, X.X. XXXXXX-XXXXXX, INC.
By /s/ XXXX X. XXXX, XX. By /s/ XXXXXX X. XXXXXX
--------------------------------- ------------------------------
Xxxx X. Xxxx, Xx., Vice-President Xxxxxx X. Xxxxxx, Chairman
of the Board of Directors
Date: June 18, 1997 Date: June 18, 1997
--------------------------------- ----------------------------
