MASTER
PROMISSORY NOTE
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$5,000,000.00 (this "Note") March 6, 1998
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FOR VALUE RECEIVED, the undersigned, TITAN RESOURCES, L.P., a Texas limited
partnership ("Company") promises to pay to the order of CHASE BANK OF TEXAS,
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NATIONAL ASSOCIATION ("Bank"), on or before December 31, 1999 ("Final Maturity
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Date") at its offices located at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000 in lawful
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money of the United States of America and in immediately available funds, the
principal amount of each loan (a "Loan") shown in Bank's records to have been
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made by Bank and on the relevant maturity date as set forth in Bank's records.
Each Loan shall also have its own date of maturity agreed by Company and Bank
which will occur prior to the Final Maturity Date. The rate of interest on each
Loan evidenced hereby from time to time shall be the interest rate which shall
be determined for each Loan by agreement between Company and Bank but, in no
event, shall exceed the maximum interest rate permitted under applicable law
("Highest Lawful Rate"). If Texas law determines the Highest Lawful Rate, Bank
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has elected the "indicated" (weekly) ceiling as defined in the Texas Credit Code
or any successor statute. All past due amounts shall bear interest at a per
annum interest rate equal to the Prime Rate plus one percent (1%). "Prime Rate"
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means the rate determined from time to time by Bank as its prime rate. The
Prime Rate shall change automatically from time to time without notice to
Borrower or any other person. THE PRIME RATE IS A REFERENCE RATE AND MAY NOT BE
BANK'S LOWEST RATE.
Interest on each Loan shall be: (i) computed on the unpaid principal amount of
the Loan outstanding from the date of advance until paid; (ii) payable at
maturity and thereafter on demand; and (iii) shall be calculated on the basis of
a year of 360 days for the actual days elapsed.
The total amount of interest (as defined under applicable law) contracted for,
charged or collected under this Note will never exceed the Highest Lawful Rate.
If Bank contracts for, charges or receives any excess interest, it will be
deemed a mistake. Bank will automatically reform the contract or charge to
conform to applicable law, and if excess interest has been received, Bank will
either refund the excess or credit the excess on the unpaid principal amount of
this Note. All amounts constituting interest will be spread throughout the full
term of this Note in determining whether interest exceeds lawful amounts.
Each of the following is an event of default ("Events of Default"):
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(a) Company shall fail to pay any amount of principal of or interest on
this Note when due;
(b) Company shall fail to pay when due any amount of principal or interest
with respect to any obligation to Bank (other than this Note); or
(c) Company shall fail to pay any amount relating to any other
indebtedness for borrowed money or other pecuniary obligation
(including any contingent such obligation) or an event or condition
shall occur or exist which gives the holder of any such indebtedness
or obligation the right or option to accelerate the maturity thereof.
(d) Company shall commence any bankruptcy, reorganization or similar case
or proceeding relating to it or its property under the law of any
jurisdiction, or a trustee or receiver shall be appointed for itself
or any substantial part of its property;
(e) any involuntary bankruptcy, reorganization or similar case or
proceeding under the law of any jurisdiction shall have been commenced
against Company or any substantial part of its property and such case
or proceeding shall not have been dismissed within 60 days, or Company
shall have consented to such case or proceeding; or
(f) Company shall admit in writing its inability to pay its debts as they
become due.
Upon the happening of any Event of Default specified in paragraphs (d), (e) or
(f) above, automatically the Loans evidenced by this Note (with accrued interest
thereon) shall immediately become due and payable, and upon the happening of an
Event of Default specified in paragraphs (a), (b) or (c) above, Bank may, by
notice to Company, declare the Loans evidenced by this Note (with accrued
interest thereon) to be due and payable, whereupon the same shall immediately
become due and payable. Except as expressly provided above, presentment,
demand, protest, notice of intent to accelerate, acceleration and all other
notices of any kind are hereby expressly waived.
The Company hereby agrees to pay on demand, in addition to unpaid principal
and interest, all Bank's costs and expenses incurred in attempting or effecting
collection hereunder, including the reasonable fees and expenses of counsel
(which may include, to the extent permitted by applicable law, allocated costs
of in-house counsel), whether or not suit is instituted.
This Note is executed and delivered by Company to evidence Loans which may be
made by Bank to Company not to exceed $5,000,000.00. COMPANY UNDERSTANDS THAT
BANK HAS NO OBLIGATION TO MAKE ANY LOAN TO COMPANY UNDER THIS NOTE.
All Loans evidenced by this Note are and will be for business and commercial
purposes and no Loan will be used for the purpose of purchasing or carrying any
margin stock as that term is defined in Regulation U of the Board of Governors
of the Federal Reserve System (the "Board").
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Chapter 346 of the Texas Finance Code does not apply to this Note or to any
Loan evidenced by this Note. This Note shall be governed by the laws of the
State of Texas and the laws of the United States as applicable.
Bank shall, and is hereby authorized by Company, to record in its records the
date, amount, interest rate and due date of each Loan as well as the date and
amount of each payment by the undersigned in respect thereof. Payments may be
applied to accrued interest or principal in whatever order Bank chooses.
Loans evidenced by this Note may not be prepaid. In the event any such
prepayment occurs, Company shall indemnify Bank against any loss, liability,
damage, cost or expense which Bank may sustain or incur as a consequence
thereof, including without limitation any loss, liability, damage, cost or
expense sustained or incurred in liquidating or employing deposits from third
parties acquired to effect or maintain such Loan or any part thereof. Bank
shall provide to Company a written statement explaining the amount of any such
loss or expense, which statement shall be conclusive absent manifest error.
No waiver of any default shall be deemed to be a waiver of any other default.
No failure to exercise or delay in exercising any right or power under this Note
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power preclude any further or other exercise thereof or the
exercise of any other right or power. No amendment, modification or waiver of
this Note shall be effective unless the same is in writing and signed by the
person against whom such amendment, modification or waiver is sought to be
enforced. No notice to or demand on any person shall entitle any person to any
other or further notice or demand in similar or other circumstances.
This Note shall be binding upon the successors and assigns of Company and
inure to the benefit of Bank, its successors, endorsees and assigns
(furthermore, Bank may assign or pledge this Note or any interest therein to any
Federal Reserve Bank). If any term or provision of this Note shall be held
invalid, illegal or unenforceable the validity of all other terms and provisions
will not be affected.
THIS NOTE 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.
TITAN RESOURCES, L.P., A TEXAS LIMITED PARTNERSHIP
By:TITAN RESOURCES I INC., ITS GENERAL PARTNER
By: /s/ Xxxx Xxxxxxxxx
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Name: XXXX XXXXXXXXX
Title: PRESIDENT
(The Bank's signature is provided as
its acknowledgment of the above as
the final written agreement between the parties.)
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President
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