September 24, 2003
Rampart Services Corporation, L.L.C., et al.
00000 Xxxxxxx Xxxx Xx.
Xxxxxx, Xxxxx 00000
RE: Sixteenth Amendment to Loan Agreement (this Amendment) dated as of
September 24, 2003, by and between Southwest Bank of Texas N.A. and
Rampart Services Corporation, L.L.C. et al.
Dear Gentlemen:
This Amendment is made and entered into as of the date above between
Southwest Bank of Texas N.A. ("Bank") and Borrower (hereinafter defined) to
evidence the parties' agreement to modify and amend the existing Loan Agreement,
as last amended by the Fifteenth Amendment to Loan Agreement dated effective as
of June 26, 2003 (all capitalized terms which are defined in the Loan Agreement,
as amended, shall have the same meaning herein, unless expressly modified
hereby).
Borrower has requested that the Loan Agreement be modified and the Bank has
agreed to such modifications upon the terms set forth herein. For sufficient
consideration, the parties hereby agree that the Loan Agreement is modified to
the extent required to accomplish the intent of the specific modifications of
this Amendment.
The term "Borrower" is hereby defined to include the following entities,
jointly and severally, RAMPART SERVICES CORPORATION, L.L.C., a Texas limited
liability company ("RSC"); RAMPART CAPITAL CORPORATION, a Texas corporation;
RAMPART VENTURES CORPORATION, L.L.C., a Texas limited liability company; RAMPART
ACQUISITION CORPORATION, L.L.C., a Texas limited liability company; RAMPART
PROPERTIES, L.L.C., a Nevada limited liability company; NEWPORT FUND, , L.L.C.,
an Oklahoma limited liability company; RAMPART NEWPORT CORPORATION, L.L.C., a
Texas limited liability company; and SOURCEONE CAPITAL GROUP, L.L.C., a Nevada
limited liability company; provided, however, as to filings with the Bank and
compliance issues under the Loan Agreement, RSC shall be the entity primarily
responsible for confirming to the Bank all compliance matters under the Loan
Agreement unless otherwise agreed to in writing by the Bank.
This Amendment modifies the Loan Agreement to accomplish the following:
1. Borrower agrees to pay the Bank an up-front facilities fee in the
amount of $22,500.00 upon execution of this Amendment;
Rampart Services Corporation, L.L.C., et al.
September 24, 2003
Page 2
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2. The term "Note" shall be that certain Revolving Promissory Note of
even date herewith from Borrower to the Bank in the face amount of
$4,500,000.00 due and payable on or before September 23, 2004, which
Note amount represents an increase in the commitment of the Bank from
$3,000,000.00;
3. The Borrower will not permit its tangible net worth (on a consolidated
basis) to be less than $8,500,000 at any time after the date hereof.
As used herein, "tangible net worth" shall mean the sum of preferred
stock (if any), par value of common stock, capital in excess of par
value of common stock, cost in excess of net assets acquired, deferred
development costs and all other assets as are properly classified as
intangible assets;
4. The Borrower shall maintain on a consolidated basis a ratio of Total
Liabilities to Tangible Net Worth not exceeding 2.50:1.00. As used
"Total Liabilities" means the sum of current liabilities plus long
term liabilities, excluding any deferred income taxes; and
5. The Borrower shall maintain on a consolidated basis a ratio of
Adjusted Total Liabilities to Tangible Net Worth not exceeding
1.75:1.00. As used "Adjusted Total Liabilities" means Total
Liabilities excluding "High Yield Lending Program" notes payable.
6. As used herein, the term "Borrowing Base" shall mean an amount at any
time equal to the sum of: (a) fifty percent (50%) of the value of the
six (6) specific assets pledged to Bank set forth in Exhibit A
attached to this Amendment (the initial value set forth in Exhibit A
is subject to adjustment if a property's value decreased per a
subsequent appraisal of such property), (b) fifty percent (50%) of the
purchase price not to exceed $250,000 for new asset acquisitions
without an acceptable Bank appraisal; provided, however, assets with
an acceptable Bank appraised value may be granted borrowing
availability of fifty percent (50%) of the appraised value at the sole
discretion of the Bank.
7. Borrower agrees that advances on the Loan (except for advances to
re-purchase stock of Borrower up to $2,600,000) shall be made for the
purpose of acquisition of assets or for improving existing assets
pledged to the Bank; provided, however, the Bank must pre-approve the
collateral for the advance prior to the advance which approval by the
Bank shall be in the Bank's sole discretion. In addition, the Borrower
may have up to $250,000 advanced at any one time for Borrower's
working capital requirements.
8. Borrower agrees that all advances for acquisitions will be governed by
FIRREA regulations regarding real estate asset appraisals and no
advance will be approved for a real estate asset with a value in
excess of $250,000 without an appraisal approved by the Bank.
Rampart Services Corporation, L.L.C., et al.
September 24, 2003
Page 3
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9. Bank's obligation to make advances on the Note is subject to the Bank
receiving the following additional Security Instruments:
(a) Guaranty Agreements in form acceptable to the Bank from Xxxxxxx
X. Xxxxx and X. X. Xxxxxxxxx (collectively, the "Guarantors");
and
(b) Deeds of Trust in form approved by the Bank executed by the
Borrower entity that is the current owner of the six (6)
properties listed on Exhibit A;
10. Borrower agrees that Borrower will furnish or have furnished to Bank
annual year end financial statements of the Guarantors in form
consistent with the financial statements previously furnished to the
Bank on or before March 1.
11. Borrower confirms that among other information that the Bank may
request, the Borrower is obligated under the Loan Agreement to provide
an annual audited financial statement prepared by an acceptable
certified public accountant within 120 days of each fiscal year end; a
monthly financial statement prepared in accordance with generally
accepted accounting principles within 30 days of month end; a monthly
portfolio listing of assets within 30 days of month end; a borrowing
base/no default certificate in form acceptable to the Bank within 30
days of month end; and that the Bank will conduct annual field audits
of the Borrower.
To the extent that the terms and provisions of the Loan Agreement require
modification to accomplish the specific terms set forth above, the parties agree
that they shall cooperate to permit advances upon the terms set forth above.
The representations and warranties of Borrower contained in the Loan
Agreement and the other Security Instruments and otherwise made in writing by or
on behalf of the Borrower pursuant to the Loan Agreement and the other Security
Instruments were true and correct when made, and are true and correct in all
material respects at and as of the time of delivery of this Amendment.
Borrower has performed and complied with all Loan Agreements and conditions
contained in the Loan Agreement and the Security Instruments required to be
performed or complied with by Borrower prior to or at the time of delivery of
this Amendment.
There exists, and after giving effect to this Amendment will exist, no
default or Event of Default, or any condition, or act which constitutes, or with
notice or lapse of time (or both) would constitute an Event of Default under any
loan agreement, note agreement, or trust indenture to which the Borrower is a
party, including without limitation, the Loan Agreement, the Note and the
Security Instruments, to the knowledge of the parties hereto.
Nothing in this Amendment is intended to amend any of the representations
or warranties contained in the Loan Agreement.
Rampart Services Corporation, L.L.C., et al.
September 24, 2003
Page 4
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Borrower represents that this is a commercial, business and/or investment
transaction and that the proceeds of the Note have not and will not be used for
personal, family, household or residential purposes; that all disclosures, if
any, required by law have been received by Borrower prior to the execution
hereof; and requests that Bank rely upon this representation, and the Bank has
relied upon the representations and warranties contained in this Amendment in
agreeing to the amendments and supplements to the Loan Agreement set forth
herein.
Except as otherwise expressly provided herein, the Loan Agreement, the
Security Instruments, the Note and the other instruments and agreements referred
to therein are not amended, modified or affected by this Amendment. Except as
expressly set forth herein, all of the terms, conditions, covenants,
representations, warranties and all other provisions of the Loan Agreement are
herein ratified and confirmed and shall remain in full force and effect.
On and after the date on which this Amendment becomes effective, the terms,
"this Loan Agreement," "hereof," "herein," "hereunder" and terms of like import,
when used herein or in the Loan Agreement shall, except where the context
otherwise requires, refer to the Loan Agreement, as amended by this Amendment.
This Amendment may be executed in two or more counterparts, and it shall
not be necessary that the signatures of all parties hereto be contained on any
one counterpart hereof; each counterpart shall be deemed an original, but all of
which together shall constitute one and the same instrument.
It is understood between the parties hereto that Borrower shall provide
Bank, at Borrower's expense, all other reports, further agreements and
instruments, title policies, surveys, and other documentation as reasonably
requested during the term of the Note, so as to preserve, protect and perfect,
or maintain the perfection, of all liens created by the instruments securing
payment of the Note or other required documentation so that Bank shall have all
documentation necessary to comply with Bank's internal lending policies and that
documentation required by any applicable regulatory agency/authority.
All notices to Borrower shall be sent to the address set forth above.
NOTICE TO OBLIGORS: THIS DOCUMENT AND ALL OTHER DOCUMENTS RELATING TO THIS
LOAN CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES TO THIS LOAN. THE TERM
"PARTIES" INCLUDES THE UNDERSIGNED PERSONS AND ENTITIES. THE TERM "LOAN"
INCLUDES THIS AGREEMENT AND THE DOCUMENTS REFERENCED HEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the date first set forth above.
Rampart Services Corporation, L.L.C., et al.
September 24, 2003
Page 5
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BORROWER: RAMPART SERVICES CORPORATION, L.L.C.,
a Texas limited liability company
By: /s/ X. X. Xxxxxxxxx
----------------------
X. X. Xxxxxxxxx, President
RAMPART CAPITAL CORPORATION,
a Texas corporation
By: /s/ X. X. Xxxxxxxxx
----------------------
X. X. Xxxxxxxxx, President
RAMPART VENTURES CORPORATION, L.L.C.,
a Texas limited liability company
By: /s/ X. X. Xxxxxxxxx
----------------------
X. X. Xxxxxxxxx, President
RAMPART ACQUISITION CORPORATION, L.L.C.,
a Texas limited liability company
By: /s/ X. X. Xxxxxxxxx
----------------------
X. X. Xxxxxxxxx, President
RAMPART PROPERTIES, L.L.C.,
a Nevada limited liability company
By: /s/ X. X. Xxxxxxxxx
----------------------
X. X. Xxxxxxxxx, President
Rampart Services Corporation, L.L.C., et al.
September 24, 2003
Page 6
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NEWPORT FUND, L.L.C.
an Oklahoma limited liability company
By: /s/ X. X. Xxxxxxxxx
----------------------
X. X. Xxxxxxxxx, President
RAMPART NEWPORT CORPORATION, L.L.C.,
a Texas limited liability company
By: /s/ X. X. Xxxxxxxxx
----------------------
X. X. Xxxxxxxxx, President
SOURCEONE CAPITAL GROUP, L.L.C.,
a Nevada limited liability company
By: Rampart Properties, L.L.C.,
its Manager
By: /s/ X. X. Xxxxxxxxx
------------------------
X. X. Xxxxxxxxx, President
BANK: SOUTHWEST BANK OF TEXAS N.A.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------
Xxxxxxx X. Xxxxx
Vice President
ATTACHMENT:
EXHIBIT A - LIST OF PROPERTIES AND VALUE OF PROPERTIES
EXHIBIT A
(ATTACHED TO SIXTEENTH
AMENDMENT TO LOAN AGREEMENT)
List of Properties Pledged to the Bank:
1. Conroe Office Building
------------------------
1.2226 acres of land, a part of Reserve "D", CROSSROADS PARK, a
subdivision of 45.007 acres of land out of the Xxxxxxx Xxxxx Survey,
A-289, Xxxxxxxxxx County, Texas, according to the map or plat thereof
recorded in Plat Cabinet B, Sheet 7, of the County Map Records of
Xxxxxxxxxx County, Texas, and all as more particularly described in
Substitute Trustee's Deed filed for record under Clerk's File No.
9457465 and recorded under Film Code No. 627-00-0878 in the Real
Property Records of Xxxxxxxxxx County, Texas.
Approved Value:
$510,000
2. Brazoria County Acreage
-------------------------
Approximately 249.5362 acres, more or less, out of a 419.84 acre tract
of land, being a part of a 192 acre tract of land, part of a 269 acre
tract of land and all of a 64.3 acre tract of land, all being
described in Volume 320, Page 43, Deed Records, Brazoria County,
Texas, situated in the Xxxxxxx X. Xxxxxx 7-1/3 League Grant, Abstract
20, Brazoria County, Texas.
Approved Value:
$561,500
3. Bay Colony
-----------
8.9214 acres, more or less, and being the tract of land containing
10.07 acres, save and except a tract of land containing, 1.1486 acres,
and being in the Perry and Austin League, Abstract 19, Galveston
County, Texas, as more particularly described a Special Warranty Deed
with Vendor's Lien filed for record under County Clerk's File No.
9831375 and recorded under Film Code No. ###-##-#### in the Real
Property Records of Galveston County, Texas.
Approved Value:
$1,260,000
4. Newport Golf Course and Land
--------------------------------
Thirteen (13) tracts of land in Xxxxxx County, Texas as more
particularly described in Special Warranty Deed recorded and
re-recorded under Clerk's File Nos. T528516 and T870808 in the Real
Property Records of Xxxxxx County, Texas.
Approved Value
$2,500,000
5. San Antonio Retail Center
----------------------------
Xxx 00, Xxxxx 0, Xxxxxxxxxxx Xxxxxxx Subdivision Unit 1, in the City
of Xxxx Valley, Bexar County, Texas, according to the plat thereof
recorded a Volume 9513, Page 12, Deed and Plat Records of Bexar
County, Texas.
Approved Value
$970,000
6. Dallas Retail Center
----------------------
Four (4) tracts of land in Dallas County, Texas described in Warranty
Deed filed under Clerk's File No. 329599 and recorded under Film Code
No. 98199 04526 in the Real Property Records of Dallas County, Texas.
Approved Value
$2,350,000
Total Agreed Approved Value
All six (6) properties: $8,151,500
Fifty Percent (50%) of aggregate value $4,075,750
Borrowing Base as of September 24, 2003 $4,075,750
