EXHIBIT 4
EXHIBIT 10
LOAN AGREEMENT
This Loan Agreement made and entered into this 12 day of November, 2001, by
RETRACTABLE TECHNOLOGIES, INC., a Texas corporation with an office at 000 Xxxx
Xxxx, Xxxxxx Xxx, Xxxxx 00000-0000, hereinafter referred to as "Borrower,"
XXXXXX X. XXXX, an individual whose mailing address is 0000 Xxxxxxxxx Xxxxx,
Xxxxxx Xxx, Xxxxx 00000, hereinafter referred to as "Guarantor," and KATIE
PETROLEUM, INC., a Texas corporation with an office at 10325 Gaywood, Xxxxxx,
Xxxxx 00000, hereinafter referred to as "Lender;"
RECITALS
1. Borrower is in the business of manufacturing retractable syringes, used
in the medical field, at a plant owned by it and located at 000 Xxxx Xxxx,
Xxxxxx Xxx, Xxxxx.
2. Borrower is currently indebted to FIRST INTERNATIONAL BANK, of Plano,
Texas under a promissory note dated February 18, 2000 in original principal
amount of $1,500,000.00 and with a current unpaid principal balance of
$1,458,201.05, said note being hereinafter referred to as the "FIB Note." The
FIB Note is secured by a Deed of Trust lien on certain real estate and equipment
owned by Borrower and by an Assignment of Rents. The payment of the FIB Note is
guaranteed by Guarantor under an Unlimited Continuing Guaranty dated February
18, 2000 .
3. Borrower is the owner of equipment in its plant used in the manufacture
of its product.
4. Borrower wants to construct a warehouse facility and related
infrastructure, estimated to cost $1,000,000.00, for use in its business.
5. Borrower requires additional funds for use as working capital in its
business and to build the warehouse facility, and Lender has agreed to loan
funds to Borrower on the terms and conditions hereinafter stated.
For a valuable consideration received by each of the undersigned parties to
this Loan Agreement, it is hereby agreed as follows:
1. Lender agrees upon the closing of this Loan Agreement to purchase the
FIB Note from FIRST INTERNATIONAL BANK for a consideration equal to the unpaid
principal balance of the FIB Note and interest accrued since the last payment
by Borrower. The Deed of Trust lien, the Unlimited Continuing Guaranty and
other security for the payment of the FIB Note shall be assigned to Lender. The
terms of payment, personal guaranty and other conditions of the FIB Note shall
continue in force and effect after the assignment to Lender.
2. Lender also agrees upon the closing of this Loan Agreement to loan to
Borrower on a new promissory note the principal sum of $2,500,000.00, to be used
by Borrower as working capital in its manufacturing business. This promissory
note will be secured by a first lien on the plant equipment owned by Borrower.
The promissory note evidencing such loan shall be in the
form attached hereto as Exhibit A and the security for the loan shall be in the
form of the Security Agreement attached hereto as Exhibit B.
3. Lender further agrees to loan Borrower an additional $1,000,000.00
under a construction loan for the purpose of building the warehouse facility
required by Borrower. The terms and conditions of the construction loan are set
forth in the Construction Loan Agreement attached hereto as Exhibit C and made
a part hereof.
4. The loans made by Lender secured by the plant equipment of Borrower and
for the construction of the warehouse facility shall be personally guaranteed by
Guarantor under a Guaranty agreement attached as Exhibit II to Exhibit C of
this Loan Agreement.
5. As an inducement to cause Lender to make the commitments contained
herein, Borrower and Guarantor hereby represent and warrant to Lender as
follows:
a. Borrower is not in default of any of its obligations to First
International Bank, of Plano, Texas, and Borrower and Guarantor are not
in default under any material loan agreement, indenture, mortgage,
security agreement or other agreement or obligation to which they are a
party or by which their respective properties may be bound; except the
failure of Borrower to meet the financial ratios required under the
Fleet Lease Agreement, which has been disclosed by Borrower to Lender.
b. Borrower is and shall remain the sole owner of the collateral pledged
as security under this Loan Agreement;
c. All of Borrower's collateral pledged hereunder shall be located on
premises owned by Borrower;
d. Borrower has furnished Lender with Borrower's financial statements and
other information regarding Borrower's business, all of which is true
and correct and does not omit any material fact necessary to make such
information not misleading;
e. No action, suit, proceeding, governmental investigation or arbitation
is or shall be pending or, to the knowledge of Borrower, threatened
against Borrower or Guarantor which might result in any material and
adverse change in Borrower's financial condition or materially affect
the collateral pledged hereunder, and there are no outstanding
judgments against Borrower or Guarantor.
f. Borrower and Guarantor are and shall continue to be Solvent, as such
term is defined in the Loan Agreement with First International Bank, of
Plano, Texas, after the execution of this Loan Agreement and the
creation of Lender's lien and security interests in the collateral
pledged hereunder.
g. Borrower and Guarantor have filed and shall file all tax returns
required to be filed by federal, state or local law and have paid and
shall pay when due all of the tax liabilities and other fees and
assessments charged against
Borrower and Guarantor, or their respective property. Neither Borrower
or Guarantor know of any pending investigation of Borrower or Guarantor
by any taxing or governmental authority or of any pending but
unassessed tax liability or other fee or assessment owing by Borrower
or Guarantor.
h. Borrower and its property subject to this Loan Agreement are and shall
be in compliance with all environmental, health and safety laws, rules
and regulations and Borrower is or shall be subject to any liability or
obligation for remedial action thereunder.
i. Neither Borrower or Guarantor to their knowledge have violated or shall
violate any applicable federal, state, county or municipal statute,
regulation or ordinance which may materially and adversely affect
Borrower's business operations or financial condition or the collateral
pledged hereunder.
j. Borrower is duly organized , validly existing and in good standing
under the laws of the State of Texas and is licensed to conduct
business in all jurisdictions in which its business is conducted.
k. Borrower and Guarantor are authorized to enter into this Loan Agreement
and their becoming a party to this Loan Agreement will not violate or
constitute a default under any other agreement to which Borrower or
Guarantor is a party.
l. Borrower shall furnish Lender with a copy of its annual federal income
tax returns, and quarterly financial information including but not
limited to its balance sheet, income statement, cash flow and profit
and loss.
m. There has been no adverse material financial change to Borrower or
Guarantor since the last financial statements were provided to Lender.
6. Borrower and Guarantor acknowledge that: (i) Lender has not exercised
or attempted to exercise any control or influence of any kind over the business
or financial affairs of Borrower; (ii) Lender does not have and shall not have
any fiduciary or similar duty to Borrower or Guarantor; (iii) Lender has not
participated and shall not participate in any type of joint venture or
partnership with Borrower or Guarantor; the execution and consummation of this
Loan Agreement, other documents executed pursuant hereto, and consummation of
the transactions contemplated hereby do not and shall not constitute or amount
to a joint venture or partnership; and (iv) Lender has not acted and shall not
act in any respect as the agent of Borrower or Guarantor for any purpose and no
agency relationship has been or shall be created by the execution of this Loan
Agreement and other documents executed pursuant hereto.
7. While any unpaid indebtedness of Borrower is held by Lender, Lender
shall have the continuing right and option, upon written notice to Borrower, to
exchange all or any part of such indebtedness into the authorized common capital
stock of Borrower. The exchange ratio of debt to stock shall be one share of
Borrower's capital stock for each $7 of indebtedness exchanged by Lender for
such stock. The exchange ratio shall be adjusted up or down in the event of a
split or reverse split of Borrower's capital stock while Lender's right and
option to exchange debt for
stock is in effect. The issuance of stock by Borrower to Lender pursuant hereto
shall be in compliance with applicable federal and state securities laws.
8. Upon completion of Borrower's warehouse construction project, if
Borrower is not in default hereunder, Borrower and Lender will consolidate the
unpaid balance of the FIB Note with the unpaid balance of the construction loan
made by Lender into a new twenty year mortgage loan with monthly principal and
interest payments determined at the time of such consolidation of debt.
9. At the closing is this Loan Agreement, Borrower agrees to pay to Lender
a closing fee equal to one percent (1%) of the principal balance of the FIB Note
purchased by Lender, the principal amount of the working capital loan loan
secured by equipment, and the principal amount of the construction loan.
10. 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 HERETO.
11. Lender's obligation to perform any of Lender's obligations hereunder
shall be subject to the following conditions precedent, all of which shall be
satisfied at Borrower's expense:
a. Borrower shall execute and deliver this Loan Agreement and the
necessary loan documents and all other documents related thereto, each
in form and substance acceptable to Lender;
b. Lender shall be provided with such written evidence, as required by
Lender, that the representatives of Borrower are authorized to execute
this Loan Agreement and the loan documents on behalf of Borrower and
to bind Borrower to the terms and conditions set forth therein;
c. Documents necessary to perfect Lender's liens, security interests, and
other encumbrances upon the collateral pledged hereunder executed by
Borrower and furnished to Lender.
d. Borrower shall furnish to Lender a certificate from Commonwealth Land
Title Insurance Company showing any documents filed of record in
Xxxxxx County, Texas, affecting the title to the land securing the FIB
Note since the date of Mortgagee Policy of Title Insurance Policy
Number 535-435420 issued by Commonwealth Land Title Insurance Company,
and Lender shall be satisfied with Borrower's title to said land.
e. Lender shall be furnished with a certificate of UCC searches which
shows that there are no security interests outstanding in the
property owned by Borrower and pledged as collateral for the working
capital loan.
f. Borrower shall have furnished to Lender financial statements and other
financial information on Borrower as requested by Lender.
g. All of the respective representations and warranties of Borrower and
Guarantor under this Loan Agreement shall be true and correct on and
as of the date of execution of the documents required to be executed
hereunder or on the date of any advances required of Lender.
h. No event of default shall exist under this Loan Agreement or the loan
documents on the date hereof or the date of any advances required of
Lender.
12. THIS LOAN AGREEMENT SHALL BE SUBJECT TO AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO ANY
CONFLICTS OF LAWS PRINCIPLES. IT IS LENDER'S INTENTION TO COMPLY FULLY WITH
TEXAS LAW, AND FEDERAL LAW AS APPLICABLE, REGULATING CREDIT TERMS, INTEREST,
FEES, CHARGES, EXPENSES, AND OTHER AMOUNTS.
13 The closing of this Loan Agreement shall be held on November 12, 2001,
at a location mutually agreeable to the parties hereto, or such earlier date as
the parties shall mutually agree. The representations and warranties by
Borrower and Guarantor contained in this Loan Agreement shall survive the
closing hereof.
EXECUTED in multiple original counterparts on the day and year first above
written.
BORROWER:
RETRACTABLE TECHNOLOGIES, INC.
By: \s\ Xxxxxx X. Xxxx
-----------------------------------------
President
LENDER:
KATIE PETROLEUM, INC.
By: \s\ Xxxx Xxxxxxx
-------------------------------------------
President
GUARANTOR:
\s\ Xxxxxx X. Xxxx
--------------------------------------------
Xxxxxx X. Xxxx
NOTE
(Secured by Security Agreement)
Date: November 12, 2001
Maker: RETRACTABLE TECHNOLOGIES, INC.
Maker's Mailing Address (including county): 000 Xxxx Xxxx, Xxxxxx Xxx, Xxxxxx
Xxxxxx, Xxxxx 00000
Payee: KATIE PETROLEUM, INC.
Place for Payment (including county) 10325 Gaywood, Dallas, Xxxxxx Xxxxxx, Xxxxx
00000-0000
Principal Amount: Two Million Five Hundred Thousand Dollars ($2,500,000.00)
Annual Interest Rate on Unpaid Principal from Date: 1% over "Prime Rate" as
shown in the Money Rates column of the Wall Street Journal, redetermined on the
first business day at the beginning of each calendar quarter
Annual Interest Rate on Matured, Unpaid Amounts: Same as Annual Interest Rate
Terms of Payment (principal and interest): Interest only payable quarterly until
the first Anniversary date of this Note; thereafter in equal quarterly payments
of principal and interest until Maturity on November 12, 2006
Security for Payment
A Security Interest Created and Granted in the Following Security
Agreement:
Date: November 12, 2001
Debtor: RETRACTABLE TECHNOLOGIES, INC.
Secured Party: Payee
County Where Collateral Located: Xxxxxx County, Texas
Collateral: Manufacturing machines and equipment as set forth in
Exhibit I
Other Security for Payment:
Personal Guaranty of Xxxxxx X. Xxxx
Maker promises to pay to the order of Payee at the place for payment and
according to the terms of payment the principal amount plus interest at the
rates stated above. All unpaid amounts shall be due by the final scheduled
payment date.
If Maker defaults in the payment of this note or in the performance of any
obligation in any instrument securing or collateral to it, and the default
continues for thirty (30) days after Payee gives Maker notice of the default and
the time within which it must be cured, as may be required by law or by written
agreement, then Payee may declare the unpaid principal balance and earned
interest on this note immediately due. Maker and each surety, endorser, and
guarantor waive all demands for payment, presentations for payment, notices of
intention to accelerate maturity, notices of acceleration of maturity, protests,
and notices of protest, to the extent permitted by law.
If this note or any instrument securing or collateral to it is given to an
attorney for collection or enforcement, or if suit is brought for collection or
enforcement, or if it is collected or enforced through probate, bankruptcy, or
other judicial proceeding, then Maker shall pay Payee all costs of collection
and enforcement, including reasonable attorney's fees and court costs, in
addition to other amounts due.
Interest on the debt evidenced by this note shall not exceed the maximum
amount of nonusurious interest that may be contracted for, taken, reserved,
charged, or received under law; any interest in excess of that maximum amount
shall be credited on the principal of the debt or, if that has been paid,
refunded. On any acceleration or required or permitted prepayment, any such
excess shall be canceled automatically as of the acceleration or prepayment or,
if already paid, credited on the principal of the debt or, if the principal of
the debt has been paid, refunded. This provision overrides other provisions in
this and all other instruments concerning the debt.
The Maker is responsible for all obligations represented by this note.
When the context requires, singular nouns and pronouns include the plural.
KATIE PETROLEUM, INC. RETRACTABLE TECHNOLOGIES, INC.
By: \s\ Xxxx Xxxxxxx By: \s\ Xxxxxx X. Xxxx
--------------------------------- -------------------------------------
President President
Secured Party Debtor
PREPARED IN THE LAW OFFICE OF: Xxxxxx X. Xxxxx
EXHIBIT I
Retractable Technologies, Inc.
1cc assembly equipment detail
As of 9/30/2001
Vendor Invoice # Invoice Date Amount Serial #'s
------ --------- ------------ -------- ------------
Sortimat Cameron Automation, L.P. 991492 10/6/1999 $ 39,720.00
-automated assembly equipment 991460 9/8/1999 39,720.00
Ck req. 4/16/2001 5,193.00
Ck req. 1/22/2001 600,000.00
Ck req. 7/20/2000 38,000.00
Ck req. 8/4/1999 223,377.00
Ck req. 6/23/1999 200,000.00
Ck req. 5/24/1999 200,000.00
Ck req. 4/19/1999 200,000.00
Ck req. 3/11/1999 200,000.00
Ck req. 2/1/1999 200,000.00
981093 11/5/1998 152,500.00
981093 6/15/1998 152,500.00
Ck req. 3/11/1998 305,000.00
----------------
$ 2,556,010.00 5022,5023,5024,5031
----------------
Trans Tech 619106 7/10/2000 $ 4,800.00
-barrell printing machinery 618718 6/30/2000 5,104.00
618718 6/30/2000 5,895.12
618717 6/30/2000 28,172.64
617334 6/15/2000 63,127.00
596759 10/25/1999 68,231.00
613135 5/9/2000 68,231.00
----------------
$ 243,560.76 6217
----------------
Multivac 8046959FP 8/9/2000 $ 12,987.60
-packaging equipment 8046959S 6/1/2000 70,994.00
Q9261DP2 2/17/2000 19,362.00
Q90261DP3 2/17/2000 6,454.00
Q90261DP1 12/21/1999 19,362.00
----------------
$ 129,159.60 980
----------------
Magor Mold, Inc. Ck req. 9/14/1999 87,250.00
-component molds DP1746 12/27/2000 28,725.00
1672 1/19/2000 57,875.00
1674 1/19/2000 40,900.00
1675 1/19/2000 52,050.00
1676 1/19/2000 29,875.00
1677 1/19/2000 33,650.00
1678 1/19/2000 37,600.00
1679 1/19/2000 37,400.00
1680 1/19/2000 34,900.00
DP1674 3/3/2000 40,900.00
DP1675 3/3/2000 52,050.00
8598A 5/17/2000 29,875.00
8597A 5/17/2000 26,025.00
8596 5/17/2000 42,690.00
8597 5/17/2000 26,025.00
8598 5/17/2000 29,875.00
Retractable Technologies, Inc.
1cc assembly equipment detail
As of 9/30/2001
Vendor Invoice # Invoice Date Amount Serial #'s
------ --------- ------------ -------- ------------
8644 6/19/2000 134,848.75
8599 5/17/2000 16,825.00
8600 5/17/2000 18,800.00
8601 5/17/2000 18,700.00
8602 5/17/2000 17,450.00
DP1672 12/1/1999 34,725.00
DP1674A 12/1/1999 24,540.00
DP1675A 12/1/1999 31,230.00
DP1676 12/1/1999 29,875.00
DP1677 12/1/1999 10,095.00
DP1678 12/1/1999 11,280.00
DP1679 12/1/1999 11,220.00
DP1680 12/1/1999 10,470.00
----------------
$ 1,057,723.75 1) 32 cavity syringe barrell #1675
---------------- 2) 16 cavity plunger handle #1676
3) 32 cavity short needle cap #1672
4) 32 cavity needle holder #1674
5) 16 cavity plunger handle #1746
6) 32 cavity friction ring #1677
7) 32 cavity plunger seal #1680
8) 32 cavity plunger cap #1678
9) 32 cavity plunger plug #1679
Comtech 100000 1/12/2001 21,247.94
-spring machine 99447 5/8/2001 26,122.91
99439 4/19/2001 42,495.88
----------------
$ 89,866.73 900135
----------------
----------------
KSE Texas, Inc. paid with Visa 11/10/2000 $ 683.18
----------------
-light fixture for the 1cc machine
----------------
Trust X 037023 1/3/2001 $ 4,374.00 983110
----------------
-tape machine for packaging product
----------------
Xxxxxxx Fabrication 0006836 1/4/2001 $ 580.58
----------------
-misc. assembly of machinery
----------------
Cisco-Eagle, Inc. 71778 11/8/2000 $ 864.86
----------------
-labor to install conveyor belt
----------------
Equipment total $ 4,082,823.46
================
SECURITY AGREEMENT
Date: November 12, 2001
Debtor: RETRACTABLE TECHNOLOGIES, INC.
Debtor's Mailing Address (including county): 000 Xxxx Xxxx, Xxxxxx Xxx, Xxxxxx
Xxxxxx, Xxxxx 00000
Secured Party: KATIE PETROLEUM, INC.
Secured Party's Mailing Address (including county): 10325 Gaywood, Dallas,
Xxxxxx Xxxxxx, Xxxxx 00000-0000
Classification of Collateral: Manufacturing machinery and equipment
Collateral (including all accessions): As shown in Exhibit I attached hereto
Obligation
Note
Date: November 12, 2001
Amount: Two Million Five Hundred Thousand Dollars ($2,500,000.00)
Maker: RETRACTABLE TECHNOLOGIES, INC.
Payee: KATIE PETROLEUM, INC.
Final Maturity Date: November 12, 2006
Terms of Payment (optional):
Other Obligation:
Debtor's Representation Concerning Location of Collateral (optional):
Collateral to be located at 000 Xxxx Xxxx, Xxxxxx Xxx, Xxxxxx Xxxxxx, Xxxxx
00000
Subject to the terms of this agreement, Debtor grants to Secured Party a
security interest in the collateral and all its proceeds to secure payment and
performance of Debtor's obligation in this security agreement and all renewals
and extensions of any of the obligation.
Debtor's Warranties
1. Financing Statement. Except for that in favor of Secured Party, no
financing statement covering the collateral is filed in any public office.
2. Ownership. Debtor owns the collateral and has the authority to grant
this security interest. Ownership is free from any setoff, claim, restriction,
lien, security interest, or encumbrance except this security interest and liens
for taxes not yet due.
3. Fixtures and Accessions. None of the collateral is affixed to real
estate, is an accession to any goods, is commingled with other goods, or will
become a fixture, accession, or part of a product or mass with other goods
except as expressly provided in this agreement.
4. Financial Statements. All information about Debtor's financial
condition provided to Secured Party was accurate when submitted, as will be any
information subsequently provided.
Debtor's Covenants
1. Protection of Collateral. Debtor will defend the collateral against
all claims and demands adverse to Secured Party's interest in it and will keep
it free from all liens except those for taxes not yet due and from all security
interests except this one. The collateral will remain in Debtor's possession or
control at all times, except as otherwise provided in this agreement. Debtor
will maintain the collateral in good condition and protect it against misuse,
abuse, waste, and deterioration except for ordinary wear and tear resulting from
its intended use.
2. Insurance. Debtor will insure the collateral in accord with Secured
Party's reasonable requirements regarding choice of carrier, casualties insured
against, and amount of coverage. Policies will be written in favor of Debtor
and Secured Party according to their respective interests or according to
Secured Party's other requirements. All policies will provide that Secured
Party will receive at least ten days' notice before cancellation, and the
policies or certificates evidencing them will be provided to Secured Party when
issued. Debtor assumes all risk of loss and damage to the collateral to the
extent of any deficiency in insurance coverage. Debtor irrevocably appoints
Secured Party as attorney-in-fact to collect any return, unearned premiums, and
proceeds of any insurance on the collateral and to endorse any draft or check
deriving from the policies and made payable to Debtor.
3. Secured Party's Costs. Debtor will pay all expenses incurred by
Secured Party in obtaining, preserving, perfecting, defending, and enforcing
this security interest or the collateral and in collecting or enforcing the
note. Expenses for which Debtor is liable include, but are not limited to,
taxes, assessments, reasonable attorney's fees, and other legal expenses. These
expenses will bear interest from the dates of payments at the highest rate
stated in notes that are part of the obligation, and Debtor will pay Secured
Party this interest on demand at a time and place reasonably specified by
Secured Party. These expenses and interest will be part of the obligation and
will be recoverable as such in all respects.
4. Additional Documents. Debtor will sign any papers that Secured Party
considers necessary to obtain, maintain, and perfect this security interest or
to comply with any relevant law.
5. Notice of Changes. Debtor will immediately notify Secured Party of any
material change in the collateral; change in Debtor's name, address, or
location; change in any matter warranted or represented in this agreement;
change that may affect this security interest; and any event of default.
6. Use and Removal of Collateral. Debtor will use the collateral
primarily according to the stated classification unless Secured Party consents
otherwise in writing. Debtor will not permit the collateral to be affixed to
any real estate, to become an accession to any goods, to be commingled with
other goods, or to become a fixture, accession, or part of a product or mass
with other goods except as expressly provided in this agreement.
7. Sale. Debtor will not sell, transfer, or encumber any of the
collateral without the prior written consent of Secured Party.
Rights and Remedies of Secured Party
1. Generally. Secured Party may exercise the following rights and
remedies after default:
a. take control of any proceeds of the collateral;
b. release any collateral in Secured Party's possession to any
debtor, temporarily or otherwise;
c. take control of any funds generated by the collateral, such as
refunds from and proceeds of insurance, and reduce any part of
the obligation accordingly or permit Debtor to use such funds to
repair or replace damaged or destroyed collateral covered by
insurance; and
d. demand, collect, convert, redeem, settle, compromise, receipt
for, realize on, xxx for, and adjust the collateral either in
Secured Party's or Debtor's name, as Secured Party desires.
2. Insurance. If Debtor fails to maintain insurance as required by this
agreement or otherwise by Secured Party, then Secured Party may purchase single-
interest insurance coverage that will protect only Secured Party. If Secured
Party purchases this insurance, its premiums will become part of the obligation.
Events of Default
Each of the following conditions is an event of default:
1. if Debtor defaults in timely payment or performance of any obligation,
covenant, or liability in any written agreement between Debtor and Secured Party
or in any other transaction secured by this agreement;
2. if any warranty, covenant, or representation made to Secured Party by
or on behalf of Debtor proves to have been false in any material respect when
made;
3. if a receiver is appointed for Debtor or any of the collateral;
4. if the collateral is assigned for the benefit of creditors or, to the
extent permitted by law, if bankruptcy or insolvency proceedings commence
against or by any of these parties: Debtor; any partnership of which Debtor is a
general partner; and any maker, drawer, acceptor,
endorser, guarantor, surety, accommodation party, or other person liable on or
for any part of the obligation;
5. if any financing statement regarding the collateral but not related to
this security interest and not favoring Secured Party is filed;
6. if any lien attaches to any of the collateral; and
7. if any of the collateral is lost, stolen, damaged, or destroyed, unless
it is promptly replaced with collateral of like quality or restored to its
former condition.
Remedies of Secured Party on Default
During the existence of any event of default, Secured Party may declare the
unpaid principal and earned interest of the obligation immediately due in whole
or part, enforce the obligation, and exercise any rights and remedies granted by
chapter 9 of the Texas Business and Commerce Code or by this agreement,
including the following:
1. require Debtor to deliver to Secured Party all books and records
relating to the collateral;
2. require Debtor to assemble the collateral and make it available to
Secured Party at a place reasonably convenient to both parties;
3. take possession of any of the collateral and for this purpose enter any
premises where it is located if this can be done without breach of the peace;
4. sell, lease, or otherwise dispose of any of the collateral in accord
with the rights, remedies, and duties of a secured party under chapters 2 and 9
of the Texas Business and Commerce Code after giving notice as required by those
chapters; unless the collateral threatens to decline speedily in value, is
perishable, or would typically be sold on a recognized market, Secured Party
will give Debtor reasonable notice of any public sale of the collateral or of a
time after which it may be otherwise disposed of without further notice to
Debtor; in this event, notice will be deemed reasonable if it is mailed, postage
prepaid, to Debtor at the address specified in this agreement at least ten days
before any public sale or ten days before the time when the collateral may be
otherwise disposed of without further notice to Debtor;
5. surrender any insurance policies covering the collateral and receive
the unearned premium with proceeds applied against the loan;
6. apply any proceeds from disposition of the collateral after default in
the manner specified in chapter 9 of the Texas Business and Commerce Code,
including payment of Secured Party's reasonable attorney's fees and court
expenses; and
7. if disposition of the collateral leaves the obligation unsatisfied,
collect the deficiency from Debtor.
General Provisions
1. Parties Bound. Secured Party's rights under this agreement shall inure
to the benefit of its successors and assigns. Assignment of any part of the
obligation and delivery by Secured Party of any part of the collateral will
fully discharge Secured Party from responsibility for that part of the
collateral. If Debtor is more than one, all their representations, warranties,
and
agreements are joint and several. Debtor's obligations under this agreement
shall bind Debtor's personal representatives, successors, and assigns.
2. Waiver. Neither delay in exercise nor partial exercise of any of
Secured Party's remedies or rights shall waive further exercise of those
remedies or rights. Secured Party's failure to exercise remedies or rights does
not waive subsequent exercise of those remedies or rights. Secured Party's
waiver of any default does not waive further default. Secured Party's waiver of
any right in this agreement or of any default is binding only if it is in
writing. Secured Party may allow remedy for any default without waiving it.
3. Reimbursement. If Debtor fails to perform any of Debtor's obligations,
Secured Party may perform those obligations and be, reimbursed by Debtor on
demand at the place where the note is payable for any sums so paid, including
attorney's fees and other legal expenses, plus interest on those sums from the
dates of payment at the rate stated in the note for matured, unpaid amounts.
The sum to be reimbursed shall be secured by this security agreement.
4. Interest Rate. Interest included in the obligation shall not exceed
the maximum amount of nonusurious interest that may be contracted for, taken,
reserved, charged, or received under law; any interest in excess of that maximum
amount shall be credited to the principal of the obligation or, if that has been
paid, refunded. On any acceleration or required or permitted prepayment of the
obligation, any such excess shall be canceled automatically as of the
acceleration or prepayment or, if already paid, credited on the principal amount
of the obligation or, if the principal amount has been paid, refunded. This
provision overrides other provisions in this and all other instruments
concerning the obligation.
5. Modifications. No provisions of this agreement shall be modified or
limited except by written agreement.
6. Severability. The unenforceability of any provision of this agreement
will not affect the enforceability or validity of any other provision.
7. After-Acquired Consumer Goods. This security interest shall attach to
after-acquired consumer goods only to the extent permitted by law.
8. Applicable Law. This agreement will be construed according to Texas
laws.
9. Place of Performance. This agreement is to be performed in the county
of Secured Party's mailing address.
10. Financing Statement. A carbon, photographic, or other reproduction of
this agreement or any financing statement covering the collateral is sufficient
as a financing statement.
11. Presumption of Truth and Validity. If the collateral is sold after
default, recitals in the xxxx of sale or transfer will be prima facie evidence
of their truth, and all prerequisites to the sale specified by this agreement
and by chapter 9 of the Texas Business and Commerce Code will be presumed
satisfied.
12. Singular and Plural. When the context requires, singular nouns and
pronouns include the plural.
13. Priority of Security Interest. This security interest shall neither
affect nor be affected by any other security for any of the obligations.
Neither extensions of any of the obligation nor releases of any of the
collateral will affect the priority or validity of this security interest with
reference to any third person.
14. Cumulative Remedies. Foreclosure of this security interest by suit
does not limit Secured Party's remedies, including the right to sell the
collateral under the terms of this agreement. All remedies of Secured Party may
be exercised at the same or different times, and no remedy shall be a defense to
any other. Secured Party's rights and remedies include all those granted by law
or otherwise, in addition to those specified in this agreement.
15. Agency. Debtor's appointment of Secured Party as Debtor's agent is
coupled with an interest and will survive any disability of Debtor.
16. Attachments Incorporated. The addendum indicated below is attached to
this agreement and incorporated into it for all purposes:
( ) addendum relating to accounts, inventory, documents, chattel
paper, and general intangibles
( ) addendum relating to instruments
KATIE PETROLEUM, INC. RETRACTABLE TECHNOLOGIES, INC.
By: \s\ Xxxx Xxxxxxx By: \s\ Xxxxxx X. Xxxx
---------------------------------- ----------------------------------
President President
Secured Party Debtor
EXHIBIT I
Retractable Technologies, Inc.
1cc assembly equipment detail
As of 9/30/2001
Vendor Invoice # Invoice Date Amount Serial #'s
------ --------- ------------ ------ ----------
Sortimat Cameron Automation, L.P. 991492 10/6/1999 $ 39,720.00
-automated assembly equipment 991460 9/8/1999 39,720.00
Ck req. 4/16/2001 5,193.00
Ck req. 1/22/2001 600,000.00
Ck req. 7/20/2000 38,000.00
Ck req. 8/4/1999 223,377.00
Ck req. 6/23/1999 200,000.00
Ck req. 5/24/1999 200,000.00
Ck req. 4/19/1999 200,000.00
Ck req. 3/11/1999 200,000.00
Ck req. 2/1/1999 200,000.00
981093 11/5/1998 152,500.00
981093 6/15/1998 152,500.00
Ck req. 3/11/1998 305,000.00
----------------
$ 2,556,010.00 5022,5023,5024,5031
----------------
Trans Tech 619106 7/10/2000 $ 4,800.00
-barrell printing machinery 618718 6/30/2000 5,104.00
618718 6/30/2000 5,895.12
618717 6/30/2000 28,172.64
617334 6/15/2000 63,127.00
596759 10/25/1999 68,231.00
613135 5/9/2000 68,231.00
----------------
$ 243,560.76 6217
----------------
Multivac 8046959FP 8/9/2000 $ 12,987.60
-packaging equipment 8046959S 6/1/2000 70,994.00
Q9261DP2 2/17/2000 19,362.00
Q90261DP3 2/17/2000 6,454.00
Q90261DP1 12/21/1999 19,362.00
----------------
$ 129,159.60 980
----------------
Magor Mold, Inc. Ck req. 9/14/1999 87,250.00
-component molds DP1746 12/27/2000 28,725.00
1672 1/19/2000 57,875.00
1674 1/19/2000 40,900.00
1675 1/19/2000 52,050.00
1676 1/19/2000 29,875.00
1677 1/19/2000 33,650.00
1678 1/19/2000 37,600.00
1679 1/19/2000 37,400.00
1680 1/19/2000 34,900.00
DP1674 3/3/2000 40,900.00
DP1675 3/3/2000 52,050.00
8598A 5/17/2000 29,875.00
8597A 5/17/2000 26,025.00
8596 5/17/2000 42,690.00
8597 5/17/2000 26,025.00
8598 5/17/2000 29,875.00
Retractable Technologies, Inc.
1cc assembly equipment detail
As of 9/30/2001
Vendor Invoice # Invoice Date Amount Serial #'s
------ --------- ------------ ------ ----------
8644 6/19/2000 134,848.75
8599 5/17/2000 16,825.00
8600 5/17/2000 18,800.00
8601 5/17/2000 18,700.00
8602 5/17/2000 17,450.00
DP1672 12/1/1999 34,725.00
DP1674A 12/1/1999 24,540.00
DP1675A 12/1/1999 31,230.00
DP1676 12/1/1999 29,875.00
DP1677 12/1/1999 10,095.00
DP1678 12/1/1999 11,280.00
DP1679 12/1/1999 11,220.00
DP1680 12/1/1999 10,470.00
----------------
$ 1,057,723.75 1) 32 cavity syringe barrell #1675
----------------
2) 16 cavity plunger handle #1676
3) 32 cavity short needle cap #1672
4) 32 cavity needle holder #1674
5) 16 cavity plunger handle #1746
6) 32 cavity friction ring #1677
7) 32 cavity plunger seal #1680
8) 32 cavity plunger cap #1678
9) 32 cavity plunger plug #1679
Comtech 100000 1/12/2001 21,247.94
-spring machine 99447 5/8/2001 26,122.91
99439 4/19/2001 42,495.88
----------------
$ 89,866.73 900135
----------------
----------------
KSE Texas, Inc. paid with Visa 11/10/2000 $ 683.18
----------------
-light fixture for the 1cc machine
----------------
Trust X 037023 1/3/2001 $ 4,374.00 983110
----------------
-tape machine for packaging product
----------------
Xxxxxxx Fabrication 0006836 1/4/2001 $ 580.58
----------------
-misc. assembly of machinery
----------------
Cisco-Eagle, Inc. 71778 11/8/2000 $ 864.86
----------------
-labor to install conveyor belt
----------------
Equipment total $ 4,082,823.46
================
CONSTRUCTION LOAN AGREEMENT
This Construction Loan Agreement made and entered into this 12 day of
November, 2001, by RETRACTABLE TECHNOLOGIES, INC., a Texas corporation with an
office at 000 Xxxx Xxxx, Xxxxxx Xxx, Xxxxx 00000-0000, hereinafter called
"Borrower," XXXXXX X. XXXX, an individual whose mailing address is 0000
Xxxxxxxxx Xxxxx, Xxxxxx Xxx, Xxxxx 00000, hereinafter referred to as
"Guarantor," and KATIE PETROLEUM, INC., a Texas corporation with an office at
10325 Gaywood, Xxxxxx, Xxxxx 00000, hereinafter referred to as "Lender."
RECITALS
1. Borrower is in the business of manufacturing retractable syringes, used
in the medical field, at a plant owned by it and located at 000 Xxxx Xxxx,
Xxxxxx Xxx, Xxxxx.
2. Borrower needs to have a warehouse building constructed on land now
owned by Borrower, and Borrower and Guarantor have requested Lender to assist in
providing financing up to but not exceeding $1,000,000.00 for the construction
of the warehouse building..
3. Lender is willing to provide financing to assist Borrower in the
construction of the warehouse facility on the terms and conditions hereinafter
set forth.
For a valuable consideration received by each of the undersigned parties to
this Construction Loan Agreement, it is hereby agreed as follows:
1. Subject to the approval of Lender, Borrower shall enter into a contract
for the construction of the warehouse building with Xxxxx Xxxxx Construction
Co., Inc., of Denton, Texas, hereinafter referred to as "Contractor."
2. Lender agrees to advance funds to Borrower as construction progresses
on the warehouse building equal to 90% of the draw requests made from time to
time by Contractor as provided in the construction contract.
3. To evidence the loan commitment made by Lender hereunder, Borrower
shall execute and deliver to Lender a promissory note, in the form attached
hereto as Exhibit I, in principal amount of $1,000,000.00, with a maturity date
of one year from the date of the promissory note. The payment of the note to
Lender shall be guaranteed by Guarantor under a Guaranty agreement in the form
attached hereto as Exhibit II. The note shall bear interest at a rate which is
1% greater than the "Prime Rate" as shown in the Money Rates column of the Wall
Street Journal, such interest rate to be redetermined each calender quarter on
the first business day of the calendar quarter. Accrued interest shall be paid
by Borrower to Lender at the time a request is made for an advance payment on
the loan commitment.
4. The land on which the warehouse building is to be constructed is now
subject to a first lien deed of trust in favor of First International Bank, of
Denton, Texas, and Borrower shall execute and deliver to Lender a second lien
deed of trust, in the form attached here as Exhibit III,
to secure the payment of Borrower's indebtedness to Lender.
5. This Construction Loan Agreement is entered into as a part of a Loan
Agreement of even date herewith made by the undersigned parties to this
agreement. All of the representations and warranties by Borrower and Guarantor
to Lender and the agreements of the parties contained in Paragraphs 5, 6 and 7
of said Loan Agreement are incorporated herein by reference to the same extent
as if said paragraphs were copied herein in full. The Lender's obligations
hereunder are also subject to the same conditions contained in Paragraph 11 of
said Loan Agreement.
6. THIS LOAN AGREEMENT SHALL BE SUBJECT TO AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO ANY
CONFLICTS OF LAWS PRINCIPLES. IT IS LENDER'S INTENTION TO COMPLY FULLY WITH
TEXAS LAW, AND FEDERAL LAW AS APPLICABLE, REGULATING CREDIT TERMS, INTEREST,
FEES, CHARGES, EXPENSES, AND OTHER AMOUNTS.
7. The closing of this Construction Loan Agreement shall be held on the
same date, time and place as provided in the Loan Agreement of even date
herewith by the undersigned parties.
EXECUTED in multiple original counterparts on the day and year first above
written.
BORROWER:
RETRACTABLE TECHNOLOGIES, INC.
By: \s\ Xxxxxx X. Xxxx
----------------------------------------
President
LENDER:
KATIE PETROLEUM, INC.
By: \s\ Xxxx Xxxxxxx
-------------------------------------------
President
GUARANTOR:
\s\ Xxxxxx X. Xxxx
--------------------------------------------
Xxxxxx X. Xxxx
Real Estate Lien Note
Date: November 12, 2001
Maker: RETRACTABLE TECHNOLOGIES, INC.
Maker's Mailing Address (including county): 000 Xxxx Xxxx, Xxxxxx Xxx, Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Payee: KATIE PETROLEUM, INC.
Place for Payment (including county): 10325 Gaywood, Dallas, Xxxxxx Xxxxxx,
Xxxxx 00000
Principal Amount: One Million Dollars ($1,000,000.00)
Annual Interest Rate on Unpaid Principal from Date: 1% over "Prime Rate" as
shown in the Money Rates column of the Wall Street Journal, redetermined on the
first business day at the beginning of each calendar quarter.
Annual Interest Rate on Matured, Unpaid Amounts: Same as Annual Interest Rate
Terms of Payment (principal and interest): Principal due and payable on November
12, 2002. Accrued interest payable at time of second and subsequent draws on the
principal of this Note and at maturity.
Security for Payment: Second lien deed of trust on property described in Exhibit
A hereof.
Maker promises to pay to the order of Payee at the place for payment and
according to the terms of payment the principal amount plus interest at the
rates stated above. All unpaid amounts shall be due by the final scheduled
payment date.
If Maker defaults in the payment of this note or in the performance of any
obligation in any instrument securing or collateral to it, and the default
continues after Payee gives Maker notice of the default and the time within
which it must be cured, as may be required by law or by written agreement, then
Payee may declare the unpaid principal balance and earned interest on this note
immediately due. Maker and each surety, endorser, and guarantor waive all
demands for payment, presentations for payment, notices of intention to
accelerate maturity, notices of acceleration of maturity, protests, and notices
of protest, to the extent permitted by law.
If this note or any instrument securing or collateral to it is given to an
attorney for collection or enforcement, or if suit is brought for collection or
enforcement, or if it is collected or enforced through probate, bankruptcy, or
other judicial proceeding, then Maker shall pay Payee all costs of collection
and enforcement, including reasonable attorney's fees and court costs, in
addition to other amounts due. Reasonable attorney's fees shall be 10% of all
amounts due unless either party pleads otherwise.
Interest on the debt evidenced by this note shall not exceed the maximum
amount of nonusurious interest that may be contracted for, taken, reserved,
charged, or received under law; any interest in excess of that maximum amount
shall be credited on the principal of the debt or, if that has been paid,
refunded. On any acceleration or required or permitted prepayment, any such
excess shall be cancelled automatically as of the acceleration or prepayment or,
if already paid, credited on the principal of the debt or, if the principal of
the debt has been paid, refunded. This provision overrides other provisions in
this and all other instruments concerning the debt.
Each maker is responsible for all obligations represented by this note.
When the context requires, singular nouns and pronouns include the plural.
RETRACTABLE TECHNOLOGIES, INC.
By: \s\ Xxxxxx X. Xxxx
---------------------------------------
President
PREPARED IN THE LAW OFFICE OF: Xxxxxx X. Xxxxx
EXHIBIT A
TRACT ONE:
Xxxx 0 xxx 0, Xxxxx X, xx Xxxxxxxxxxx Technologies, Inc. Addition, an Addition
to the City of Little Elm, Xxxxxx County, Texas, according to the Plat thereof
recorded in volume M, Page 295, of the Plat Records of Xxxxxx County, Texas,
SAVE AND EXCEPT:
Being a 5 foot strip of land out of the Xxxx Xxxx Survey, Abstract Number 718,
in Xxxxxx County, Texas, and being a portion of a tract of land deeded to
Retractable Technologies, Inc., as recorded in CC# 96-5984 of the Deed Records
of Xxxxxx County, Texas, and being situated in the Town of Little Elm, Texas and
being more particularly described as follows:
BEGINNING at a 1/2 inch iron rod found at the northeast corner of said
Retractable Technologies, Inc. tract, said point also being in the west right of
way line of Lobo Lane (a 100 foot right of way);
Thence South 00 degrees 07 minutes 39 seconds East, along and parallel with the
east property line of said Retractable Technologies, Inc. tract and the west
right of way line of Lobo Lane, a distance of 5.00 feet, to a point for corner;
Thence South 89 degrees 42 minutes 56 seconds West, leaving the east property
line of said Retractable Technologies, Inc., tract and the west right of way
line of Lobo Lane, parallel with the north property line of said Retractable
Technologies, Inc. tract, a distance of 500.00 feet to a point for corner;
Thence North 00 degrees 07 minutes 39 seconds West, a distance of 5.00 feet, to
a point for corner, said point is lying in the north property line of said
Retractable Technologies, Inc. tract;
Thence North 89 degrees 42 minutes 56 seconds East, along and parallel with the
north property line of said Retractable Technologies, Inc. tract, a distance of
500.00 feet to the Place of Beginning and containing 2,500 square feet or .0574
acres of land, more or less.
TRACT TWO:
Being a tract of land in the Xxxx Xxxx Survey, Abstract No. 718, situated in the
City of Little Elm, Xxxxxx County, Texas, and being a part of that certain tract
of land conveyed to Xxxxxxx X. Xxxx and wife, Xxxx Xxxxxxxxx Xxxx by the United
States of America by Quit Claim deed recorded in volume 466, Page 202 of the
Deed Records of Xxxxxx County, Texas, and being more particularly described as
follows:
BEGINNING at a concrete monument at the Northwest corner of said Xxxx tract,
said point being on the property line of Xxxxx-Xxxxxx Elm Reservoir;
Thence South 89 degrees 57 minutes 36 seconds East along the North line of the
Xxxx tract, 1706.34 feet to its Northeast corner;
Thence South 0 degrees 01 minutes 08 seconds West along the East line of the
Xxxx tract, 444.69 feet;
Thence North 89 degrees 57 minutes 36 seconds West, 1347.05 feet to a point on
the property line of Xxxxx-Xxxxxx Elm Reservoir;
Thence along the property line of Xxxxx-Xxxxxx Elm Reservoir as follows:
North 52 degrees 58 minutes 52 seconds West, 328.64 feet to a concrete monument;
North 21 degrees 23 minutes 02 seconds West, 265.34 feet to the PLACE OF
BEGINNING, and containing 16.11 acres of land, more or less.
GUARANTY
This Guaranty made this 12 day of November, 2001 by XXXXXX X. XXXX, an
individual whose mailing address is 0000 Xxxxxxxxx Xxxxx, Xxxxxx Xxx, Xxxxx
00000, hereinafter called "Guarantor," for the benefit of KATIE PETROLEUM,
INC., a Texas corporation with an office at 10325 Gaywood, Xxxxxx, Xxxxx 00000,
hereinafter referred to as "Lender."
RECITALS
1. Lender has entered into a Construction Loan Agreement dated November
12, 2001, with RETRACTABLE TECHNOLOGIES, INC., hereinafter referred to as
"Borrower," whereby Lender has agreed to loan to Borrower up to Five Million
Dollars ($5,000,000.00) for the payment of a Real Estate loan, working capital,
and the construction of a warehouse facility to be used in Borrower's business
operations;
2. As an inducement to Lender to make said loan to Borrower, Guarantor has
agreed to guarantee the payment of the loan by Borrower to Lender.
For the consideration stated above, the parties to this Guaranty hereby
agree as follows:
1. Guarantor hereby unconditionally guarantees the prompt and full payment
and performance, and promises to pay all of Borrower's present and future, joint
and/or several, direct and indirect, absolute and contingent, express and
implied, indebtedness, liabilities, obligations and covenants (cumulatively
referred to herein as "indebtedness,") to Lender when due (whether upon maturity
or by demand, acceleration or otherwise) . Guarantor's liabilities and
obligations under this Guaranty agreement shall be unlimited and shall include
all present and future written agreements between Borrower and Lender (whether
executed for the same or different purposes than the foregoing), evidencing the
indebtedness, together with all interest and all of Lender's expenses and costs
incurred in connection with the indebtedness including any amendments,
extensions, renewals, replacements or substitutions thereto, including, but not
limited to, the indebtedness described above.
2. Guarantor's obligations hereunder are absolute and continuing and shall
not be affected or impaired if Lender repeatedly and unconditionally amends,
renews, extends, compromises, exchanges. Fails to exercise or perfect rights in,
impairs or releases any collateral of any of the indebtedness owed by Borrower
or collateral.
3. Guarantor's obligations are direct and unconditional and may be
enforced without requiring Lender to exercise, enforce or exhaust any right or
remedy against Borrower or any security or collateral.
4. Guarantor hereby waives notice of present and future extensions of
credit and other financial accommodations by Lender to Borrower; notice of the
obtaining or release of any guaranty, assignment, or other security for any of
the indebtedness, notice or demand, notice of
non-payment, notice of intention to accelerate, presentment, and notice of
dishonor pertaining to the indebtedness and this Guaranty and all other notices
and demands pertaining to the indebtedness and this Guaranty, as permitted by
law.
5. This Guaranty is a guaranty of payment and not of collection, and
Guarantor hereby waives the right to require that any action be brought first
against Borrower or any security or collateral, or require that resort be made
to any security or collateral.
6. An Event of Default shall occur under this Guaranty in the event that
Guarantor:
(a) fails to pay any amount under this Guaranty or any obligation to
Lender when due (whether such amount is due by acceleration or
otherwise;
(b) fails to perform any obligation or breaches any warranty or covenant
to Lender contained in any loan document or this Guaranty or any other
present or future promissory note or written agreement;
(c) has a garnishment, judgment, tax levy, attachment or lien entered or
served against Guarantor;
(d) dies, becomes legally incompetent, becomes insolvent, makes an
assignment for the benefit of creditors, or becomes the subject of any
bankruptcy, insolvency or debtor rehabilitation proceeding;
(e) fails to provide Lender evidence of satisfactory financial condition;
or
(f) causes Lender to deem itself insecure due to a significant decline in
the value of any collateral securing the indebtedness due to Lender.
7. If there is an Event of Default under this Guaranty, Lender shall be
entitled to exercise one or more of the following remedies without notice or
demand (except as required by law):
(a) Declare Guarantor's obligations under this Guaranty immediately due
and payable in full, such acceleration shall be automatic and
immediate if the Event of Default is a filing under the Bankruptcy
Code;
(b) Collect the outstanding obligations under this Guaranty with or
without resorting to judicial process; and
(c) Exercise all other rights available to Lender under any other
agreement or applicable law.
8. Guarantor is the owner of certain U.S. Patents used by Borrower in its
business under a license agreement between Guarantor and Borrower. In the event
of an Event of Default by Borrower, the result of which Lender becomes the owner
of Borrower's land, buildings and equipment pledged as collateral to Lender,
Guarantor agrees to enter into a nontransferable, nonexclusive license with
Lender on the same terms as the license of Guarantor's patent by Borrower, so
that utilizing the property securing the debt owed by Borrower, Lender can
continue to operate the business of Borrower after Lender become the owner of
Borrower's land, buildings and equipment.
9. Guarantor acknowledges the absolute and continuing nature of this
Guaranty and voluntarily accepts the full range of risks associated herewith
including, but not limited to, the
risk that Borrower may incur future additional indebtedness to Lender.
10. This Guaranty shall remain in full force and effect until Lender
executes and delivers to Guarantor a written release thereof. Notwithstanding
the foregoing, Guarantor shall be entitled to terminate any unlimited guaranty
of Borrower's future indebtedness to Lender following any anniversary of this
Guaranty by providing Lender with sixty (60) or more days' written notice of
termination by hand-delivery or certified mail.
11. The modification or waiver of any of Guarantor's obligations or
Lender's rights under this Guaranty must be contained in writing signed by
Lender. Lender may delay in exercising or failing to exercise any of its rights
without causing a waiver of those rights. A waiver on one or more occasion
shall not constitute a waiver on any other occasion.
12. This Guaranty shall be binding upon and inure to the benefit of
Guarantor and Lender and their respective successors, assigns, trustees,
receivers, administrators, personal representatives, legatees, and devisees.
13. Any notice or other communication to be provided under this Guaranty
shall be in writing and sent to the parties at the addresses described in this
Guaranty or such other addresses as the parties may designate in writing from
time to time.
14. If any provision of this Guaranty is invalid, illegal or
unenforceable, the validity and enforceability or the remaining provisions shall
not in any way be affected or impaired thereby.
15. THIS GUARANTY SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND
ALL APPLICABLE FEDERAL LAWS.
16. If Lender hires an attorney to assist in collecting any amount due or
enforcing any right or remedy under this Guaranty, Guarantor agrees to pay
Lender's reasonable attorneys' fees, legal expenses, and other costs permitted
by law.
17. Guarantor acknowledges receipt of reasonably equivalent value in
consideration for the execution of this Guaranty and represents that, after
giving effect to this Guaranty, the fair market value of Guarantor's assets
exceeds Guarantor's total liabilities, including contingent, subordinate and
unliquidated liabilities, that Guarantor has sufficient cash flow to meet debts
as they mature, and that Guarantor does not have unreasonably small capital.
18. Guarantor and Lender agree that time is of the essence. Guarantor
will provide Lender with current financial statements and other financial
information upon request.
19. GUARANTOR ACKNOWLEDGES THAT GUARANTOR HAS READ, UNDERSTANDS, AND
AGREES TO THE TERMS AND CONDITIONS OF THIS GUARANTY. GUARANTOR HAS EXECUTED
THIS GUARANTY WITH THE INTENT
TO BE LEGALLY BOUND. GUARANTOR ACKNOWLEDGES RECEIPT OF AN EXACT COPY OF THIS
GUARANTY.
EXECUTED in multiple original copies on the day and year first above
written.
LENDER: GUARANTOR:
KATIE PETROLEUM, INC.
By: \s\ Xxxx Xxxxxxx \s\ Xxxxxx X. Xxxx
---------------------------------- -----------------------------------
President Xxxxxx X. Xxxx
DEED OF TRUST
Date: November 12, 2001
Grantor: RETRACTABLE TECHNOLOGIES, INC.
Grantor's Mailing Address (including county): 000 Xxxx Xxxx, Xxxxxx Xxx, Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Trustee: Xxxxx X. Xxxxxxx, Xx.
Trustee's Mailing Address (including county): 00000 Xxxxxxxx Xxxx, Xxxxxx,
Xxxxxx Xxxxxx, Xxxxx 00000
Beneficiary: KATIE PETROLEUM, INC.
Beneficiary's Mailing Address (including county): 10325 Gaywood, Dallas, Xxxxxx
Xxxxxx, Xxxxx 00000
Note(s)
Date: November 12, 2001
Amount: One Million Dollars ($1,000,000.00)
Maker: Grantor
Payee: Beneficiary
Final Maturity Date: November 12, 2002
Terms of Payment (optional):
Property (including any improvements): As described in Exhibit A attached
hereto.
Prior Lien(s) (including recording information): Deed of Trust dated Feb. 18,
2000 to X.X. Xxxx, Trustee, recorded in Vol. 4533, Page 0377, of tbe records of
Other Exceptions to Conveyance and Warranty: Xxxxxx County, Texas
For value received and to secure payment of the note, Grantor conveys the
property to Trustee in trust. Grantor warrants and agrees to defend the title
to the property. If Grantor performs all the covenants and pays the note
according to its terms, this deed of trust shall have no further effect, and
Beneficiary shall release it at Grantor's expense.
-1-
Grantor's Obligations
Grantor agrees to:
1. keep the property in good repair and condition;
2. pay all taxes and assessments on the property when due;
3. preserve the lien's priority as it is established in this deed of
trust;
4. maintain, in a form acceptable to Beneficiary, an insurance policy
that:
a. covers all improvements for their full insurable value as
determined when the policy is issued and renewed, unless
Beneficiary approves a smaller amount in writing;
b. contains an 80% coinsurance clause;
c. provides fire and extended coverage, including windstorm coverage;
d. protects Beneficiary with a standard mortgage clause;
e. provides flood insurance at any time the property is in a flood
hazard area; and
f. contains such other coverage as Beneficiary may reasonably
require;
5. comply at all times with the requirements of the 80% coinsurance
clause;
6. deliver the insurance policy to Beneficiary and deliver renewals to
Beneficiary at least ten days before expiration;
7. keep any buildings occupied as required by the insurance policy; and
8. if this is not a first lien, pay all prior lien notes that Grantor is
personally liable to pay and abide by all prior lien instruments.
Beneficiary's Rights
1. Beneficiary may appoint in writing a substitute or successor trustee,
succeeding to all rights and responsibilities of Trustee.
2. if the proceeds of the note are used to pay any debt secured by prior
liens, Beneficiary is subrogated to all of the rights and liens of the holders
of any debt so paid.
3. Beneficiary may apply any proceeds received under the insurance policy
either to reduce the note or to repair or replace damaged or destroyed
improvements covered by the policy.
4. If Grantor fails to perform any of Grantor's obligations, Beneficiary
may perform those obligations and be reimbursed by Grantor on demand at the
place where the note is payable for any sums so paid, including attorney's fees,
plus interest on those sums from the dates of payment at the rate stated in the
note for matured, unpaid amounts. The sum to be reimbursed shall be secured by
this deed of trust.
5. If Grantor defaults on the note or fails to perform any of Grantor's
obligations or if default occurs on a prior lien note or other instrument, and
the default continues after Beneficiary gives Grantor notice of the default and
the time within which it must be cured, as may be required by law or by written
agreement, then Beneficiary may:
a. declare the unpaid principal balance and earned interest on the
note immediately due;
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b. request Trustee to foreclose this lien, in which case Beneficiary
or Beneficiary's agent shall give notice of the foreclosure sale
as provided by the Texas Property Code as then amended; and
c. purchase the property at any foreclosure sale by offering the
highest bid and then have the bid credited on the note.
Trustee's Duties
If requested by Beneficiary to foreclose this lien, Trustee shall:
1. either personally or by agent give notice of the foreclosure sale as
required by the Texas Property Code as then amended;
2. sell and convey all or part of the property to the highest bidder
for cash with a general warranty binding Grantor, subject to prior liens and to
other exceptions to conveyance and warranty; and
3. from the proceeds of the sale, pay, in this order:
a. expenses of foreclosure, including a commission to Trustee
of 5% of the bid;
b. to Beneficiary, the full amount of principal, interest,
attorney's fees, and other charges due and unpaid;
c. any amounts required by law to be paid before payment to
Grantor; and
d. to Grantor, any balance.
General Provisions
1. If any of the property is sold under this deed of trust, Grantor shall
immediately surrender possession to the purchaser. If Grantor fails to do so,
Grantor shall become a tenant at sufferance of the purchaser, subject to an
action for forcible detainer.
2. Recitals in any Trustee's deed conveying the property will be presumed
to be true.
3. Proceeding under this deed of trust, filing suit for foreclosure, or
pursuing any other remedy will not constitute an election of remedies.
4. This lien shall remain superior to liens later created even if the time
of payment of all or part of the note is extended or part of the property is
released.
5. If any portion of the note cannot be lawfully secured by this deed of
trust, payments shall be applied first to discharge that portion.
6. Grantor assigns to Beneficiary all sums payable to or received by
Grantor from condemnation of all or part of the property, from private sale in
lieu of condemnation, and from damages caused by public works or construction on
or near the property. After deducting any expenses incurred, including
attorney's fees, Beneficiary may release any remaining sums to Grantor or apply
such sums to reduce the note. Beneficiary shall not be liable for failure to
collect or to exercise diligence in collecting any such sums.
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7. Grantor assigns to Beneficiary absolutely, not only as collateral, all
present and future rent and other income and receipts from the property. Leases
are not assigned. Grantor warrants the validity and enforceability of the
assignment. Grantor may as Beneficiary's licensee collect rent and other income
and receipts as long as Grantor is not in default under the note or this deed of
trust. Grantor will apply all rent and other income and receipts to payment of
the note and performance of this deed of trust, but if the rent and other
income and receipts exceed the amount due under the note and deed of trust,
Grantor may retain the excess. If Grantor defaults in payment of the note or
performance of this deed of trust, Beneficiary may terminate Grantor's license
to collect and then as Grantor's agent may rent the property if it is vacant and
collect all rent and other income and receipts. Beneficiary neither has nor
assumes any obligations as lessor or landlord with respect to any occupant of
the property. Beneficiary may exercise Beneficiary's rights and remedies under
this paragraph without taking possession of the property. Beneficiary shall
apply all rent and other income and receipts collected under this paragraph
first to expenses incurred in exercising Beneficiary's rights and remedies and
then to Grantor's obligations under the note and this deed of trust in the order
determined by Beneficiary. Beneficiary is not required to act under this
paragraph, and acting under this paragraph does not waive any of Beneficiary's
other rights or remedies. If Grantor becomes a voluntary or involuntary
bankrupt, Beneficiary's filing a proof of claim in bankruptcy will be tantamount
to the appointment of a receiver under Texas law.
8. Interest on the debt secured by this deed of trust shall not exceed the
maximum amount of nonusurious interest that may be contracted for, taken,
reserved, charged, or received under law; any interest in excess of that maximum
amount shall be credited on the principal of the debt or, if that has been paid,
refunded. On any acceleration or required or permitted prepayment, any such
excess shall be canceled automatically as of the acceleration or prepayment or,
if already paid, credited on the principal of the debt or, if the principal of
the debt has been paid, refunded. This provision overrides other provisions in
this and all other instruments concerning the debt.
9. When the context requires, singular nouns and pronouns include the
plural.
10. The term note includes all sums secured by this deed of trust.
11. This deed of trust shall bind, inure to the benefit of, and be
exercised by successors in interest of all parties.
12. If Grantor and Maker are not the same person, the term Grantor shall
include Maker.
13. Grantor represents that this deed of trust and the note are given for
the following purposes: Construction of warehouse facility and related
infrastructure for use in Grantor's business.
RETRACTABLE TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxx
------------------------------------
President
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EXHIBIT A
TRACT ONE:
Xxxx 0 xxx 0, Xxxxx X, xx Xxxxxxxxxxx Technologies, Inc. Addition, an Addition
to the City of Little Elm, Xxxxxx County, Texas, according to the Plat thereof
recorded in volume M, Page 295, of the Plat Records of Xxxxxx County, Texas,
SAVE AND EXCEPT:
Being a 5 foot strip of land out of the Xxxx Xxxx Survey, Abstract Number 718,
in Xxxxxx County, Texas, and being a portion of a tract of land deeded to
Retractable Technologies, Inc., as recorded in CC# 96-5984 of the Deed Records
of Xxxxxx County, Texas, and being situated in the Town of Little Elm, Texas and
being more particularly described as follows:
BEGINNING at a 1/2 inch iron rod found at the northeast corner of said
Retractable Technologies, Inc. tract, said point also being in the west right of
way line of Lobo Lane (a 100 foot right of way);
Thence South 00 degrees 07 minutes 39 seconds East, along and parallel with the
east property line of said Retractable Technologies, Inc. tract and the west
right of way line of Lobo Lane, a distance of 5.00 feet, to a point for corner;
Thence South 89 degrees 42 minutes 56 seconds West, leaving the east property
line of said Retractable Technologies, Inc., tract and the west right of way
line of Lobo Lane, parallel with the north property line of said Retractable
Technologies, Inc. tract, a distance of 500.00 feet to a point for corner;
Thence North 00 degrees 07 minutes 39 seconds West, a distance of 5.00 feet, to
a point for corner, said point is lying in the north property line of said
Retractable Technologies, Inc. tract;
Thence North 89 degrees 42 minutes 56 seconds East, along and parallel with the
north property line of said Retractable Technologies, Inc. tract, a distance of
500.00 feet to the Place of Beginning and containing 2,500 square feet or .0574
acres of land, more or less.
TRACT TWO:
Being a tract of land in the Xxxx Xxxx Survey, Abstract No. 718, situated in the
City of Little Elm, Xxxxxx County, Texas, and being a part of that certain tract
of land conveyed to Xxxxxxx X. Xxxx and wife, Xxxx Xxxxxxxxx Xxxx by the United
States of America by Quit Claim deed recorded in volume 466, Page 202 of the
Deed Records of Xxxxxx County, Texas, and being more particularly described as
follows:
BEGINNING at a concrete monument at the Northwest corner of said Xxxx tract,
said point being on the property line of Xxxxx-Xxxxxx Elm Reservoir;
Thence South 89 degrees 57 minutes 36 seconds East along the North line of the
Xxxx tract, 1706.34 feet to its Northeast corner;
Thence South 0 degrees 01 minutes 08 seconds West along the East line of the
Xxxx tract, 444.69 feet;
Thence North 89 degrees 57 minutes 36 seconds West, 1347.05 feet to a point on
the property line of Xxxxx-Xxxxxx Elm Reservoir;
Thence along the property line of Xxxxx-Xxxxxx Elm Reservoir as follows:
North 52 degrees 58 minutes 52 seconds West, 328.64 feet to a concrete monument;
North 21 degrees 23 minutes 02 seconds West, 265.34 feet to the PLACE OF
BEGINNING, and containing 16.11 acres of land, more or less.
