AMENDED AND RESTATED
LETTER LOAN AGREEMENT
April 21, 0000
Xxxx Xxx, Xxxxx, NA
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxx
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, NA ("Lender") lend to Borrower the aggregate sum of
$5,567,818.20. Lender has advised Borrower that Lender is willing to lend such
funds 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, the aggregate sum of $5,567,818.20
(the "Loans"). The Loans shall be evidenced by (i) a Master Revolving Credit
Note (the "Revolving Note") in a form satisfactory to Lender, duly executed by
Borrower in the principal amount of $2,200,000.00 and made payable to the order
of Lender, (ii) a Term Promissory Note (the "Real Estate Note") in a form
satisfactory to Lender, duly executed by Borrower in the principal amount of
$488,604.20 as of January 29, 1990 as evidenced by an assignment to Lender from
Texas Commerce Bank-Fort Worth ("TCB"), of an existing promissory note from
Borrower, payable to the order of TCB in the original face amount of
$575,000.00, (iii) a Term Promissory Note (the "Central Parkway Note") in a form
satisfactory to Lender, duly executed by Borrower in the principal amount of
$1,879,214.00 as of May 20, 1991 as evidenced by an assignment to Lender from
Keystone International, Inc. ("Keystone"), of an existing promissory note from
Borrower, payable to the order of Keystone in the original face amount of
$2,000,000.00, and (iv) an Advancing Term Promissory Note (the "Equipment Note")
in a form satisfactory to Lender, duly executed by Borrower in the principal
amount of $1,000,000.00 and payable to the order of Lender. The Real Estate
Note, the Revolving Note, the Central Parkway Note and the Equipment Note, and
any renewals and extensions thereof, are collectively referred to as the
"Notes". Principal and interest on each of the Notes 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
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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 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 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 Equipment Note, which requests shall specify the aggregate
amount of the advance and the date of such advance. Borrower shall be entitled
only to an advance under the Equipment 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 Equipment Note after April
30, 1996. Borrower shall not be entitled to reborrow any sums already repaid
under the Equipment Note.
3. Conditions Precedent.
(a) The obligation of Lender to make the initial advances under each
Loan to Borrower is subject to the conditions precedent that, as of the date of
such advance, Lender shall have received 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
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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").
(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;
(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;
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(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
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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;
(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
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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.
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, at any time, its Tangible Net Worth to be less than
$4,900,000; as used herein, the term "Tangible Net Worth" shall mean Borrower's
shareholders' equity minus all intangibles;
(d) Permit, at any time, its ratio of total liabilities to Tangible
Net Worth to be more than 2.00 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 (which may
include up to $200,000 of purchase money indebtedness incurred for the
acquisition of assets); 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;
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(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 substantial change in its capitalization or its
business;
(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; 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,
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Lender shall not be obligated to send such notice more than twice per calendar
year, and thereafter Borrower shall be in default upon 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 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 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.
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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, which
property and assets are more particularly described in a Deed of Trust
filed of record in the Official Public Records of Real Property of Xxxxxx
County, Texas under Clerk's File No. L524904, and under Film Code No.
###-##-####, which Deed of Trust has been assigned to Lender by the terms
of a Transfer of Note and Liens from Keystone to Lender.
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: Xxxxx X. Xxxxx
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).
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(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 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
-11-
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 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
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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
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.
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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
By /S/ Xxxxx X. Xxxxx
------------------------------
Xxxxx X. Xxxxx, Vice President
List of Loan Documents
1. Amended and Restated Letter Loan Agreement
2. Master Revolving Credit Note
3. Equipment Note
4. Corporate Resolutions
5. Modification of Note and Liens (Real Estate Note)
6. Supplemental Deed of Trust
7. Amended and Restated Security Agreement
-14-
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 Lender 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 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)
MASTER REVOLVING CREDIT NOTE
$2,200,000.00 Houston, Texas April 21, 1995
FOR VALUE RECEIVED, the undersigned, XXXXXX-XXXXXX, INC., a Texas
(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 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 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.
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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 May 30, 1995, with a like
installment becoming due and payable on or before the same day of each
succeeding calendar month thereafter until April 30, 1997 (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 (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 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
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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.
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
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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 given in renewal, extension, modification and restatement (but
not in extinguishment) of that certain master revolving credit note dated
January 29, 1990, as amended. Payment of 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 $2,200,000.00 Promissory Note
PROMISSORY NOTE
(Advancing Term)
$1,000,000.00 Houston, Texas April 21, 1995
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.
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
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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 May 31, 1995, with a like installment being
due and payable on or before the last day of each succeeding calendar
month thereafter until and including April 30, 1996 (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 April 30, 2001, 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 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.
Initialed for
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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 "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 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
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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 by (i) a Supplemental Deed of Trust of even date
herewith executed by the Maker for the benefit of the Payee covering the
property described therein, given to supplement that certain Deed of Trust dated
January 29, 1988 executed by the Maker for the benefit of Keystone
International, Inc. ("Keystone") and filed for record in the Official Public
Records of Real Property of Xxxxxx County, Texas under Clerk's File No. L524904,
and subsequently transferred and assigned by Keystone to the Payee by Transfer
of Note and Liens dated May 20, 1991, filed for record in the Official Public
Records of Real Property of Xxxxxx County, Texas, under Clerk's File No.
N191393, and (ii) an Amended and Restated Security Agreement of even date
herewith executed by the Maker to the Payee.
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 Promissory Note
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, renewed and modified by BANK ONE, TEXAS, NA
(the "Lender"), 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 April 21, 1995, 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
Xxxxxxxxx Xxxxxx President /s/ Xxxxxxxxx Xxxxxx
------------------------
Chairman of the Board
Xxxxxx X. Xxxxxx and /s/ Xxxxxx X. Xxxxxx
Chief Executive Officer ------------------------
Xxxx Xxxxxxx Secretary /s/ Xxxx Xxxxxxx
------------------------
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.
-1-
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 21st day of April, 1995.
By /S/ Xxxx Xxxxxxx
-----------------------
Xxxx Xxxxxxx, Secretary
The undersigned, the Chairman of the Board of the Company, hereby certifies
that Xxxx Xxxxxxx is the Secretary of the Company and is authorized to execute
and deliver this Certificate for and on behalf of the Company.
By /S/ Xxxxxx X. Xxxxxx
----------------------
Xxxxxx X. Xxxxxx,
Chairman of the Board
-2-
EXHIBIT "A"
WHEREAS, XXXXXX-XXXXXX, INC. (the "Company") has obtained loans (the
"Existing Loans") from BANK ONE, TEXAS, NA, successor in interest to Team Bank
(the "Lender") pursuant to the terms of that certain Amended and Restated Letter
Loan Agreement (the "Loan Agreement") of even date herewith; and
WHEREAS, Lender has agreed (i) to modify, renew and extend the Existing
Loans and (ii) to loan additional funds in the amount of $1,000,000 (together
with the Existing Loans is hereinafter collectively called the "Loan") to the
Company, pursuant to the terms of the Loan Agreement;
RESOLVED, further, in regard to the Loan that any one of the President, the
Chairman of the Board of Directors, the Secretary, or the Chief Executive
Officer 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
-1-
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, Secretary or the Chief Executive Officer 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 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.
-2-
FIFTH MODIFICATION OF NOTE AND LIENS
(Real Estate Note)
THE STATE OF TEXAS )
) KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF XXXXXX )
THIS FIFTH MODIFICATION OF NOTE AND LIENS (herein called "Agreement") is
entered into effective as of April 21st, 1995, by and between BANK ONE, TEXAS,
NA, successor in interest by merger with TEAM BANK (herein called "Lender"), and
XXXXXX-XXXXXX, INC., a Texas corporation, (herein called "Borrower").
W I T N E S S E T H:
WHEREAS, Borrower made, executed and delivered that certain Promissory Note
(herein called the "Note") dated September 22, 1987, in the original principal
sum of FIVE HUNDRED SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS ($575,000.00)
payable to the order of TEXAS COMMERCE BANK OF FORT WORTH, TEXAS, which is now
known as Texas Commerce Bank National Association ("TCB"), as therein provided,
said Note being secured by a Deed of Trust, Security Agreement and Financing
Statement (the "Tarrant County Deed of Trust") of even date therewith, executed
by Borrower to Xxxxxxx X. Xxxxxxxxxx, Trustee for the benefit of TCB, and 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 (the "Tarrant County Property") more
fully described therein; and
WHEREAS, the Note and liens were transferred and assigned from TCB 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; and
WHEREAS, Borrower made, executed and delivered 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, wherein
Borrower and Lender agreed that the liens encumbering the property (the "Xxxxxx
County Property") securing the indebtedness described therein, shall also secure
the Note; and
WHEREAS, the Note and Security Documents (hereinafter defined) were
modified, renewed and extended pursuant to the terms and conditions of a Second
Modification, Renewal and Extension of Note and Liens ("Second Modification")
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; and
-1-
WHEREAS, the Note and Security Documents were modified, renewed and
extended pursuant to the terms and conditions of a Third Modification of Note
and Liens ("Third Modification") dated April 30, 1993, and filed for record in
the Official Public Records of Real Property of Tarrant County, Texas; and
WHEREAS, the Note and Security Documents were modified, renewed and
extended pursuant to the terms and conditions of a Fourth Modification of Note
and Liens ("Fourth Modification") 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; and
WHEREAS, Borrower has requested, and Lender has agreed, on the terms and
conditions set forth herein, to modify the terms of the Note.
NOW, THEREFORE, in consideration of the mutual covenants, rights and
obligations contained herein, the benefits to be derived therefrom and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree and contract as follows:
1. Lender and Borrower hereby acknowledge that the outstanding principal
balance of the Note on the effective date hereof is TWO HUNDRED SEVENTY-
NINE THOUSAND SEVEN HUNDRED NINETY FOUR AND 20/100 DOLLARS ($279,794.20).
2. The Borrower hereby promises to pay to the order of the Lender the sum of
TWO HUNDRED SEVENTY-NINE THOUSAND SEVEN HUNDRED NINETY FOUR AND 20/100
DOLLARS ($279,794.20) (representing the balance due under the Note) at the
offices of the Lender in Houston, Xxxxxx County, Texas, together with
interest thereon from and after the date hereof until maturity on the
unpaid principal balance outstanding from time to time thereon at a per
annum rate (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) equal
to the lesser of (i) the Base Rate in effect from day-to-day or (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 and had at all
times been in effect.
The term "Base Rate" shall mean, at any time, the rate of interest per
annum established from time to time by Lender. Without notice to the
Borrower 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
-2-
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 Lender may make commercial loans or other loans at rates of
interest at, above or below the Base Rate.
3. This Agreement is entered into in modification (and not in extinguishment,
substitution, novation or discharge) of the unpaid principal balance of
the Note. All liens, security interests and obligations securing and
guaranteeing payment of the Note, including without limitation the Xxxxxx
County Modification, the Second Modification, the Third Modification and
the Fourth Modification (collectively the "Security Documents") are hereby
ratified, confirmed, renewed, extended and brought forward as security for
the payment hereunder.
4. The Security Documents are hereby amended to provide that the Notes
described therein shall mean (i) the Note, as modified hereby, and (ii)
the Revolving Note (with an extended maturity of April 30, 1997), as
modified, renewed and extended by the terms of a master revolving credit
note of even date herewith and the Loan Agreement.
5. All other terms, conditions and provisions contained in the Note, except
as otherwise specifically set forth herein, shall continue and remain in
full force and effect.
6. All terms, conditions and provisions contained in the Security Documents,
except as modified, restated (where applicable), renewed and extended by
the documents referred to herein, shall continue and remain in full force
and effect.
7. This Agreement has been executed and delivered pursuant to, and is subject
to certain terms and conditions set forth in, that certain Amended and
Restated Letter Loan Agreement of even date herewith (the "Loan
Agreement"), and is the "Real Estate Note" referred to therein. The
Lender shall be entitled to the benefits provided in the Loan Agreement.
Reference is made to the Loan Agreement for the statement of any
obligation of the Lender to advance funds hereunder and the Events of
Default upon which the maturity of the Note may be accelerated.
8. As additional consideration for the execution, delivery and performance of
this Agreement by the parties hereto and to induce Lender to enter into
this Agreement, Borrower warrants and represents to Lender that to its
best knowledge and belief no facts, events, statuses or conditions exist
or have existed which, either now or with the passage of time or giving of
notice, or both, constitute or will constitute a basis for any claim or
cause of action against Lender or any defense to (a) the payment of any
obligations and indebtedness under the Note and/or the Security Documents
or (b) the performance of any of its obligations in respect to the Note
and/or Security Documents, and in the event any such facts, events,
statuses or conditions exist or have existed, Borrower unconditionally and
irrevocably waives any and all claims and causes of action against Lender
and any defenses to its payment and performance obligations in respect to
the Note and the Security Documents.
-3-
9. Borrower shall have taken reasonable 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
Property or exist on or within any portion of the Property. Borrower is
not aware of any prior uses of the 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. The use which
Borrower makes and intends to make of the Property will not result in the
disposal or release of any hazardous substance, solid waste or Hazard on,
in or to the Property. 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.
10. Borrower shall give notice to Lender immediately upon (i) Borrower's
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
Property in a condition that is resulting or could reasonably be expected
to result in any adverse environmental impact and impending remediation
cost of $50,000 or more, 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 such hazardous
substances, solid wastes or Hazards and discharging any liens or
assessments that may be established on the Property or the improvements
thereon as a result thereof.
11. This Agreement shall be governed by and construed in accordance with the
laws of the State of Texas. If any provision of this Agreement or the
application thereof to any person or circumstances shall, for any reason
and to any extent, be invalid or unenforceable, neither the remainder of
this Agreement, nor the application of such provision to any other persons
or circumstances shall be affected thereby, but rather same shall be
enforced to the greatest extent permitted by law.
-4-
12. This Agreement, and all the terms, provisions and conditions hereof, shall
be binding upon each party hereto and such party's heirs, legal
representatives, successors and assigns.
13. This Agreement may be executed in multiple originals. This Agreement may
also be executed in multiple counterparts, and all so executed shall
constitute one agreement, binding on the parties hereto, notwithstanding
that all parties are not signatories to the original or the same
counterpart.
14. This Agreement represents the entire understanding and agreement between
the parties hereto with respect to the subject matter hereof, supersedes
all prior negotiations, oral representations and writings between the
parties, and cannot be amended or supplemented orally, but only by an
agreement in writing signed by Lender. The Borrower certifies that it is
relying on no representation, warranty, covenant or agreement except for
those set forth herein.
15. 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 by each party on the date of its respective acknowledgment, but to
be effective for all purposes as of the date first above written.
"BORROWER"
XXXXXX-XXXXXX, INC.
By /S/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx,
Chairman of the Board
"LENDER"
BANK ONE, TEXAS, NA
By /S/ Xxxxx X. Xxxxx
------------------------------
Xxxxx X. Xxxxx, Vice-President
-0-
XXX XXXXX XX XXXXX )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me this 21st day of April, 1995, by
Xxxxxx X. Xxxxxx, Chairman of the Board of Xxxxxx-Xxxxxx, Inc., a Texas
corporation, on behalf of said corporation.
/S/ Xxxxxx X. Xxxxxxx
------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
THE STATE OF TEXAS )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me this 21st day of April, 1995, by
Xxxxx X. Xxxxx, Vice-President of Bank One, Texas, NA, a national banking
association, on behalf of said association.
/S/ Xxxxxx X. Xxxxxxx
------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF TEXAS
-6-
SUPPLEMENTAL DEED OF TRUST
THE STATE OF TEXAS )
) KNOW ALL PERSONS BY THESE PRESENTS:
COUNTY OF XXXXXX )
THIS SUPPLEMENTAL DEED OF TRUST is entered into effective as of April 21,
1995, by and between BANK ONE TEXAS, NA, a national banking association (herein
called "Lender"), and XXXXXX-XXXXXX, INC., a Texas corporation (herein called
"Borrower").
RECITALS:
1. Borrower made, executed and delivered that certain Promissory Note
(herein called the "Original Note") dated January 29, 1988, in the original
principal sum of Two Million and No/100 Dollars ($2,000,000.00), payable to the
order of Keystone International, Inc., a Texas corporation ("Keystone"), as
therein provided, said Original Note being secured in part by a Deed of Trust
(the "Deed of Trust") of even date therewith, executed by Borrower to W. Xxxxx
Xxxxxxxxx, as Trustee ("Trustee") for the benefit of Keystone and filed for
record in the Official Public Records of Real Property of Xxxxxx County, Texas
under Clerk's File No. L524904, covering the property (the "Property"), more
fully described on Exhibit "A" annexed hereto. The Deed of Trust, and any other
instruments securing or guaranteeing the Original Note are herein called the
"Security Documents".
2. The Original Note and liens securing same were transferred and
assigned from Keystone to Lender by that certain Transfer of Note and Liens
dated May 20, 1991, which was filed for record in the Official Public Records of
Real Property of Xxxxxx County, Texas, under Clerk's File No. N191393 and,
thereafter, modified by the terms of a Modification, Renewal and Extension of
Note and Liens dated May 21, 1991, which was filed for record in the Official
Public Records of Real Property of Xxxxxx County, Texas, under Clerk's File No.
N191391, pursuant to the terms of a Second Amendment to Letter Loan Agreement
dated May 21, 1991, which has been amended by a Third Amendment to Letter Loan
Agreement dated May 24, 0000, Xxxxxx Xxxxxxxxx to Letter Loan Agreement dated
April 30, 1993, Fifth Amendment to Letter Loan Agreement dated May 21, 1993 and
Sixth Amendment to Letter Loan Agreement dated April 30, 1994.
3. Borrower has this date entered into an Amended and Restated Letter
Loan Agreement with Lender, whereby Lender has agreed, subject to the terms and
conditions thereof, to provide the Borrower with an additional loan facility in
the amount of One Million and No/100 Dollars ($1,000,000.00) (the "Equipment
Loan"), to be evidenced by an Advancing Term Promissory Note of even date
herewith, provided, among other things, Borrower supplements the Deed of Trust
to include the Equipment Loan as being secured by the liens granted in the Deed
of Trust.
-1-
4. Borrower has agreed to supplement the Deed of Trust as provided
hereinbelow.
A G R E E M E N T:
1. NOW, THEREFORE, Borrower, in consideration of Ten And No/100 Dollars
($10.00) and other good and valuable consideration in hand paid, the receipt and
sufficiency of which are hereby acknowledged, has GRANTED, BARGAINED, SOLD and
CONVEYED and by these presents does GRANT, BARGAIN, SELL and CONVEY unto
Trustee, the Property. TO HAVE AND TO HOLD THE PROPERTY, together with all and
singular the rights, privileges, hereditaments and appurtenances thereto and in
anywise incident, appertaining or belonging unto Trustee, and his successors or
substitutes forever; and Borrower hereby binds itself, its successors and
assigns, to warrant and forever defend title to the Property unto Trustee, his
successors, substitutes and assigns, against every person whomsoever lawfully
claiming or to claim the same or any part thereof.
2. This conveyance is made in trust to secure and enforce the payment of
the Equipment Loan, and the Security Documents shall be from and after this date
deemed modified as necessary to secure the Equipment Loan. Henceforth, the term
"said indebtedness" as defined in the Deed of Trust shall include the Equipment
Loan, as well as all renewals, extensions, modifications and rearrangements
thereof.
3. As supplemented hereby, the Borrower hereby reaffirms all covenants,
representations and warranties made in the Deed of Trust and Borrower hereby
agrees that all of the terms and conditions thereof are incorporated herein by
this reference.
4. All terms, conditions and provisions contained in the Security
Documents, except as modified, restated (where applicable), or amended hereby,
shall continue and remain in full force and effect.
5. The Property shall be and remain in all respects subject to the lien,
charge or encumbrance of the Security Documents, as modified, and nothing herein
contained and nothing done pursuant hereto shall affect or be construed to
affect the lien, charge or encumbrance of the Security Documents, as modified,
or the priority thereof over any other liens, charges or encumbrances or to
release or affect the liability of any party or parties whomsoever who may now
or hereafter be liable under or on account of the Security Documents, as
amended, nor shall anything herein contained or done in pursuance hereof affect
or be construed to affect any other security for the said indebtedness, if any,
held by the Lender.
6. No renewal or extension of the time of payment of any part or all of
the Equipment Loan, no releases or surrender of any security for the Equipment
Loan, no release of any person primarily or secondarily liable on the Equipment
Loan (including any maker, endorser or guarantor), no delay in enforcement of
payment of the Equipment Loan, and no delay or omission in exercising any right
or power with respect to the Equipment Loan, shall in any way or manner impair
or affect the rights of the Lender hereunder.
-2-
7. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBJECT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
EXECUTED by each part on the date of its respective acknowledgment, but to
be effective for all purposes as of the date first above written.
"BORROWER"
XXXXXX-XXXXXX, INC.
By:/S/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx, Chairman
of the Board of Directors
"LENDER"
BANK ONE, TEXAS, NA
By:/S/ Xxxxx X. Xxxxx
------------------------------
Xxxxx X. Xxxxx, Vice President
THE STATE OF TEXAS )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me on this April 21, 1995, 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
-0-
XXX XXXXX XX XXXXX )
)
COUNTY OF XXXXXX )
This instrument was acknowledged before me on this April 21, 1995, by Xxxxx
X. Xxxxx, Vice President of Bank One, Texas, NA, a national banking association,
on behalf of said association.
/S/ Xxxxxx X. Xxxxxxx
----------------------------------
Notary Public, State of Texas
-4-
AMENDED AND RESTATED
SECURITY AGREEMENT
(Accounts, Inventory, Equipment, Fixtures,
General Intangibles, Other)
April 21, 1995
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, NA, 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, including without limitation the items
described on Exhibits, if any, attached hereto and made a part hereof, 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
-1-
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 personal 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 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
Term Promissory Note executed by Debtor in the principal amount of $488,604.20
as of January 29, 1990 and made payable to the order of Texas Commerce Bank-Fort
Worth, and subsequently assigned to Secured Party, and any and all extensions,
renewals and rearrangements thereof, (iii) a Term Promissory Note executed by
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Debtor in the principal amount of $1,879,214.00 and made payable to the order of
Keystone International, Inc., and subsequently assigned to Secured Party, and
any and all extensions, renewals and rearrangements thereof, and (iv) an
Advancing Term Promissory Note 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, and (vi) 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:
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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 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
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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 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
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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 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.
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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; 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.
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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 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.
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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.
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
30, 1994, 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.
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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
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