Exhibit 4
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FORM OF
COLLATERAL MAINTENANCE AGREEMENT
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This Collateral Maintenance Agreement (this "Agreement") is made and
entered into effective November 22, 1994, by and between _____________________
("Pledgor") whose address is 0000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxx 00000, and NATIONSBANK OF TEXAS, N.A., a national banking association
("Bank"), whose address is 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000.
W I T N E S S E T H:
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WHEREAS, Pledgor has requested that Bank make a loan to it in the
maximum principal amount of ____________________________________________ Dollars
($__________) (the "Loan") to be evidenced by a promissory note dated November
22, 1994 (as hereafter modified, renewed or extended, the "Note") and in
accordance with the terms of that certain Loan Agreement of even date herewith
between Pledgor and Bank (the "Loan Agreement"); and
WHEREAS, as a condition to the making of the Loan, Bank has required
Pledgor's promise to collateralize the Loan at all times in accordance with this
Agreement; and
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Bank and Pledgor hereby agree as follows:
1. Loan. The Loan shall be evidenced by and subject to the terms,
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conditions and covenants of the Loan Agreement, the Note, the Pledge Agreement
(as defined herein), this Agreement and all other documents now or hereafter
securing, guaranteeing or otherwise pertaining to the Loan, as renewed,
extended, amended or supplemented from time to time (collectively, the "Loan
Documents"), and shall be due and payable to Bank as provided therein. Pledgor
agrees that the Collateral Value (as defined herein) shall equal or exceed 200%
of the initial advance or any subsequent advance under the Loan.
2. Security for the Loan. To secure payment and satisfaction of the
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Loan, and all renewals, extensions or rearrangements thereof, Pledgor has
executed and delivered to Bank, contemporaneously with the execution of this
Agreement, a Pledge Agreement of even date herewith (the "Pledge Agreement")
pursuant to which Bank is granted a valid, perfected and enforceable first
priority security interest in the securities identified in the Pledge Agreement
(the "Collateral").
Pledgor agrees to execute any and all amendments or supplements to the
Pledge Agreement and other Loan Documents and to take other actions which Bank
deems reasonably necessary to evidence, perfect, or protect its security
interest in any Collateral concurrently herewith or hereafter pledged to secure
the Loan and to comply with all applicable laws, including without limitation,
Regulation U of the Board of Governors of the Federal Reserve System. Pledgor
also agrees to immediately deliver or cause to be delivered to Bank all
Collateral pledged or to be pledged to Bank and such stock powers as are
requested by Bank.
3. Maintenance of Collateral. Pledgor agrees at all times during the
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term of the Loan, and any renewals, extensions or rearrangements thereof, to
maintain Collateral securing the Loan such that the Collateral Value will at all
times equal or exceed 150% of outstanding principal balance of the Loan (the
"Loan Balance").
4. Value of Collateral. For the purposes of this Agreement, the
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"Collateral Value" shall be determined at any given time by multiplying the per
share price of such stock at the most recent close of trading on a trading
exchange for such stock times (ii) the number of shares of such stock held by
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Bank as Collateral.
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In the event that stock held as Collateral is not traded on an exchange, the
Collateral Value of such stock shall be determined by obtaining a quote of value
of such stock from a reputable brokerage firm selected by Bank.
5. Events of Default. Pledgor and Bank understand and agree that if at any
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time the Collateral Value is less than 150% of the Loan Balance, Bank shall
notify Pledgor of such occurrence and Pledgor shall have five (5) business days
to either: (i) pledge additional Collateral satisfactory to Bank, in Bank's sole
opinion, such that the ratio of the Collateral Value to the Loan Balance equals
or exceeds 166% or (ii) reduce the Loan Balance by an amount such that the ratio
of the Collateral Value to the Loan Balance equals or exceeds 166%. Any such
reduction in the Loan Balance shall not affect or reduce any future principal
payments due on the Loan except to the extent such reductions are applied
against Loan payments in accordance with the Loan Documents. In the event
Pledgor fails to pledge additional Collateral or reduce the Loan Balance within
said five (5) business day period so that the ratio of the Collateral Value to
the Loan Balance equals or exceeds 166%, such occurrence shall constitute an
event of default under the Loan Documents and at Bank's option, all obligations
of Bank to extend credit pursuant to the Note and the other Loan Documents shall
terminate, and notwithstanding any notice provisions in the Note or other Loan
Documents, at Bank's option, the principal and interest accrued on the Note
shall become due and payable without any presentment, acceleration, demand,
protest, notice of intent to accelerate, notice of acceleration, notice of
protest or notice of any kind, all of which are hereby expressly waived by
Pledgor. In addition to any other remedies that may be available to Bank, upon
an event of default as described herein, Bank may, and Pledgor hereby authorizes
Bank to, sell all or any part of the Collateral and to apply the proceeds of
such Collateral to payment of the principal, interest and any other costs or
expenses due on the Loan. Pledgor specifically understands and agrees that any
such sales by Bank of all or part of the Collateral pursuant to the terms of
this Agreement may be effected by Bank at times and in manners which could
result in the proceeds of such sales being significantly and materially less
than might have been received if such sales had occurred at different times or
in different manners, and Pledgor hereby indemnifies Bank from and against any
and all obligations and liabilities arising out of or related to the timing or
manner of any such sales.
Unless Pledgor has no liability therefor otherwise than under this Agreement,
Pledgor shall be liable to Bank for any deficiency that exists on the Loan if
the application of such proceeds does not satisfy the principal, interest and
other costs and expenses due on the Loan in full, and any proceeds in excess of
the principal, interest and other costs and expenses due on the Loan (if any)
shall be delivered by Bank to the person or persons legally entitled to it. To
the extent necessary to enable Bank to sell the Collateral or any part thereof,
Pledgor hereby grants Bank a power of attorney and designates Bank as Pledgor's
attorney-in-fact to sell the Collateral and apply the proceeds as herein
provided. This power of attorney is coupled with an interest, is irrevocable,
and shall not terminate upon the disability of Pledgor. Bank may waive any
default without waiving any other prior or subsequent default.
6. Sale or Substitution of Collateral. Subject to the provisions of
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paragraph 3 above, Bank and Pledgor understand and agree that at any time
Pledgor is not in default on the Note, Pledge Agreement or other Loan Documents,
Pledgor may sell or substitute any or all of the Collateral, provided that the
entirety of the net proceeds (i.e., one hundred percent (100%) of the proceeds
net of any brokerage firm sales commission) of any sale of any Collateral shall
be delivered to Bank to be applied by Bank first to the payment of any unpaid
interest then accrued on the Loan and then to principal of the Loan, or if a
substitution of Collateral, that new Collateral shall be acceptable to Bank in
its sole discretion and the ratio of the Collateral Value to the Loan Balance
shall be as determined by Bank in its sole discretion. Notwithstanding anything
in this paragraph to the contrary, any sales or substitutions of Collateral
shall comply with Regulation U of the Board of Governors of the Federal Reserve
System.
7. Term of Agreement. This Agreement shall remain in full force and effect
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until the Loan, including all renewals, extensions and rearrangements thereof,
has been paid in full.
8. Entire Agreement. This Agreement, the Note and the other Loan Documents
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constitute the entire agreement, understanding, representations and warranties
of the parties hereto and supersede all prior
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agreements, arrangements and understandings between the parties. Should a
conflict in any terms, conditions or covenants exist between this Agreement and
any other document, this Agreement shall be controlling.
9. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Texas (without regard to its conflicts
of law provisions) and federal laws governing national banking associations.
10. Controlling Agreement. The parties intend to comply with applicable
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usury laws. All existing and future agreements regarding the debt evidenced by
the Note are hereby limited and controlled by the provisions of this paragraph.
In no event (including but not limited to prepayment, default, demand for
payment, or acceleration) shall the interest taken, reserved, contracted for,
charged or received under the Note or other Loan Documents or otherwise exceed
the Maximum Amount. If from any possible construction of any document, interest
would otherwise be payable in excess of the Maximum Amount, such document shall
be automatically reformed and the interest payable automatically reduced to the
Maximum Amount, without necessity of execution of any amendment or new document.
If Bank ever receives interest in an amount which apart from this provision
would exceed the Maximum Amount, the excess shall, without penalty, be applied
to principal of the Note in inverse order of maturity of installments or be
refunded to the payor if the Note is paid in full. Bank does not intend to
charge or receive unearned interest on acceleration. All interest paid or agreed
to be paid shall be spread throughout the full term (including extensions) of
the debt so that the amount of interest does not exceed the Maximum Amount. For
purposes of this paragraph "Maximum Amount" shall mean the maximum nonusurious
amount of interest permitted by whichever of applicable United States federal
law or Texas law permits the higher interest rate, including to the extent
permitted by applicable law, any amendments thereof hereafter or any new law
hereafter coming into effect to the extent a higher maximum rate is permitted
thereby.
THIS WRITTEN 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.
BANK: PLEDGOR:
NATIONSBANK OF TEXAS, N.A. ---------------------------
By: By:
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Xxxxx X. Xxxxxx ---------------
Vice President, Private Banking
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