EXHIBIT 10.1
MASTER NOTE
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Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
$14,000,000.00 01-27-1997 514 120 2313836285 43542
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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Borrower: Industrial Holdings, Inc., Lender: Comerica Bank - Texas
Xxxxxxxx Engineering Company, Houston-One Shell-Middle Market
Pipeline Valve Specialty, X.X.Xxx 000000
Inc., The Xxx Group, Inc., Xxx Xxxxxx, XX 00000-0000
Machinery Sales, Inc., Xxx
Machinery Movers, Inc., U.S.
Crating, Inc., Xxx
International Corporation,
First Texas Credit
Corporation, XTEL Corporation,
Xxxxx, Inc., Xxx Supply
Corporation, American Rivet
Company, Inc., LSS-Lone
Star-Houston, Inc., and Amflow
Master Environmental, Inc.
(TIN: 000000000)
7135 Ardmore
Xxxxxxx, Xxxxx 00000
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FOR VALUE RECEIVED, the undersigned promise(s) to pay ON DEMAND to the order of
Comerica Bank-Texas ("Lender"), at any office of the Lender in the State of
Texas, Fourteen Million AND NO/100 DOLLARS ($14,000,000.00) (or such portion
thereof as shall have been advanced by the Lender and not repaid as hereinafter
provided) with interest until demand at a per annum rate equal to the Lender's
prime rate from time to time in effect plus zero percent (%), and thereafter at
a default rate equal to the rate of interest otherwise prevailing hereunder plus
three percent (3%) per annum (but in no event in excess of the maximum rate
permitted by law). The Lender's "prime rate" is that annual rate of interest so
designated by the Lender and which is changed by the Lender from time to time.
Interest rate changes will be effective for interest computation purposes as and
when the Lender's prime rate changes. Interest shall be calculated on the basis
of a 360-day year for the actual number of days outstanding. The Lender's "prime
rate" is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any of its customers. The Lender may make commercial
loans at rates of interest at, above or below its "prime rate."
If at any time the interest rate which would otherwise prevail hereunder exceeds
the Maximum Legal Rate (as hereinafter defined), any subsequent reductions in
such otherwise prevailing rate shall nor reduce the rate of interest hereunder
below the Maximum Legal Rate until the amount of accrued interest hereunder
equals the amount that xxxx have accrued if the prevailing rate had at all times
equaled the Maximum Legal Rate.
The principal amount payable hereunder shall be the sum of all advances made by
the Lender to or at the request of the undersigned, less principal payments
actually received in cash by the Lender. The books and records of the Lender
shall be the best evidence of the principal amount and the unpaid interest
amount owing at any time hereunder and shall be conclusive absent manifest
error. No interest shall accrue hereunder until the date of the first advance
made by the Lender; thereafter, interest on all advances shall accrue and be
computed on the principal balance outstanding from time to time hereunder until
the same is paid in full. Advances made hereunder shall be made at the sole
discretion of the Lender, and the Lender shall have no obligation whatsoever to
make advances.
This Master Note (herein called the "Note") and any other indebtedness and
liabilities whatsoever of the undersigned (or any of them) to the Lender, and
any and all renewals, modifications or extensions thereof, whether joint or
several, contingent or absolute, now existing or hereafter arising, and
howsoever evidenced (herein collectively called "Indebtedness") are secured by
all items deposited in any account of any of the undersigned with the Lender and
by all proceeds of such items (cash or otherwise), all account balances of any
of the undersigned from time to time with the Lender, by all property of any of
the undersigned from time to time in the possession of the Lender and by any
other collateral, rights and properties described in each and every mortgage,
security agreement, pledge, assignment and other security or collateral
agreement which has been, or will hereafter from time to time be, executed by
any (or all) of the undersigned to or for the benefit of the Lender (all herein
collectively called the "Collateral").
If the undersigned or any endorser, guarantor or accommodation party (or any of
them) fails to pay this Note on demand, or any other Indebtedness when due, by
demand, maturity, acceleration or otherwise, then the Lender may at its option
and without prior notice to the undersigned (or any of them) declare any or all
of such other indebtedness to be immediately due and payable (notwithstanding
any provisions contained in the evidence thereof to the contrary), sell or
liquidate all or any portion of the Collateral offset against the Indebtedness
any amounts owing by the Lender to the undersigned (or any of them), charge
interest at the default rate herein provided and exercise any one or more of the
rights and remedies granted to the Lender by the agreement with the undersigned
(or any of them) or given to the Lender under applicable law.
If the Note is signed by two or more (whether by all as makers or by one or more
as accommodation party), the obligations hereunder and each undertaking hereby
made shall be that of all and any two or more jointly and also of each
severally. This Note shall bind the undersigned and the undersigned's respective
heirs, personal representatives, successors and assigns.
Each maker and endorser waives presentment, demand, protest and notice of
dishonor and agrees that no extension or indulgence to the undersigned (or any
of them) or release or nonenforcement of any security, or release of any party,
whether with or without notice, shall affect the obligations of any maker,
indorser or accommodation party.
Each maker and indorser agrees to reimburse to the holder of this Note for any
and all costs and expenses (including , but not limited, to, reasonable attorney
fees) incurred in collecting or attempting to collect the Note.
No agreements, conditions, provisions or stipulations contained in this Note, or
the default of the undersigned, or the exercise by the holder hereof
of the right to accelerate the payment or the maturity of principal and
interest, or to exercise any option whatsoever contained herein, or in any other
agreements between
Ex-2
the undersigned and Lender, or the arising of any contingency whatsoever, shall
entitle the holder of this Note to contract for, charge or collect, in any
event, interest exceeding the maximum rate of nonusurious interest allowed from
time to time by applicable state or federal law as now or as may hereinafter be
in effect, including, as to article 5069-1.04 Vernon's Texas Civil Statutes (and
as the same may be incorporated by reference in other Texas statutes), but
otherwise without limitation, that rate based upon the "indicated rate ceiling"
(herein referred to as the "Maximum Legal Rate") and in no event shall the
undersigned be obligated to pay interest exceeding such Maximum Legal Rate; and
all agreements, conditions or stipulations, if any, which may in any event or
contingency whatsoever operate to bind, obligate or compel the undersigned to
pay a rate of interest exceeding the Maximum Legal Rate shall be without binding
force or effect, at law or in equity, to the extent only of the excess of
interest over such Maximum Legal Rate. In the event any interest is contracted
for, charged or collected in excess of the Maximum Legal Rate (hereinafter
referred to as the "Excess"), the undersigned acknowledges and stipulates that
any such contract, charge or receipt shall be the result of an accidental and
bona fide error, and that any Excess received by Lender shall be first applied
to reduce the principal then unpaid hereunder; second, applied to reduce any
other Indebtedness; and third, returned to the undersigned, it being the
intention of the parties hereto not to enter at any time into an usurious or
other illegal relationship. The undersigned recognizes that such an
unintentional result could inadvertently occur. By the execution of this Note,
the undersigned covenants that (a) the credit or return of any Excess shall
constitute the acceptance by the undersigned of such Excess, and (b) the
undersigned shall not seek or pursue any other remedy, legal or equitable,
against Lender, or any holder hereof based, in whole or in part, upon the
contracting for, charging or receiving of any interest in excess of the Maximum
Legal Rate. For the purpose of determining whether or not any Excess has been
contracted for, charged or received by Lender or any holder hereof, all interest
at any time contracted for, charged or received by Lender or any term of this
Note.
THIS NOTE SHALL BE CONSTRUED UNDER AND GOVERNED BY THE LAWS OF THE STATE OF
TEXAS AND APPLICABLE FEDERAL LAW, BUT IN ANY EVENT CHAPTER 15 OF TITLE 79,
VERNON'S TEXAS CIVIL STATUTES (AND AS THE SAME MAY BE INCORPORATED BY REFERENCE
IN OTHER TEXAS STATUTES) SHALL NOT APPLY TO THE INDEBTEDNESS EVIDENCED BY THIS
NOTE. BORROWER HEREBY WAIVES THE RIGHT TO ANY JURY TRIAL IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER BORROWER OR LENDER AGAINST THE
OTHER.
The undersigned acknowledges and agrees that this Note is payable on demand at
any time notwithstanding any provisions for acceleration or events of default
contained herein or in any security agreement, deed of trust or other agreement
securing payment hereof.
BORROWER:
Industrial Holdings, Inc., Xxxxxxxx Engineering Company, Pipeline Valve
Specialty, Inc., The Xxx Group, Inc., Xxx Machinery Sales, Inc., Xxx
Machinery Movers, Inc., U.S. Crating, Inc., Xxx International Corporation,
First Texas Credit Corporation, XTEL Corporation, Xxxxx, Inc., Xxx Supply
Corporation, American Rivet Company, Inc., LSS-Lone Star-Houston, Inc.,
and Amflow Master Environmental, Inc.
By: /s/ XXXXXX X. XXXX
Xxxxxx X. Xxxx, President of Industrial Holdings, Inc.
By: /s/ XXXXXX X. XXXX
Xxxxxx X. Xxxx, Chief Executive Officer of the following: American
Rivet Company, Inc., Xxxxxxxx Engineering Company, Pipeline Valve
Specialty, Inc., The Xxx Group, Inc., Xxx Supply Corporation, Xxx
Machinery Sales, Inc., Xxx Machinery Movers, Inc., U.S. Crating, Inc., Xxx
International Corporation, First Texas Credit Corporation, XTEL
Corporation, Xxxxx, Inc., LSS-Lone Star-Houston, Inc., and Amflow Master
Environmental, Inc.
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