Exhibit 10.74
CREDIT AGREEMENT
by and between
TCTB PARTNERS, LTD.
A Texas Limited Partnership
as Borrower
AND
XXXXX FARGO BANK TEXAS. N.A.
as Lender
DATED: June 5, 2002
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS
1.1 - Certain Defined Terms 1
1.2 - Other Definitional Provisions 6
ARTICLE II LOANS
2.1 - Loan Commitment 6
2.2 - Notes 6
2.3 - Manner of Borrowing under the Revolving Line of Credit Note 7
2.4 - Interest Rate 7
2.5 - Principal and Interest Payments 8
2.6 - Processing and Origination Fees. 8
2.7 - Accrual Base Standard 8
2.8 - Manner and Application of Payments 8
ARTICLE III PURPOSE AND MANNER OF FUNDS AVAILABILITY
3.1 - Purpose of Loan 9
3.2 - Prepayment Penalties 9
3.3 - Re-evaluation--Valuation Percentage-Paydown. 9
ARTICLE IV SECURITY AND ASSIGNMENT
4.1 - Collateralization 10
ARTICLE V CONDITIONS PRECEDENT
5.1 - Initial Advance 10
5.2 - All Advances 11
ARTICLE VI REPRESENTATIONS AND WARRANTIES
6.1 - Existence and Authority 12
6.2 - Powers 12
6.3 - Financial Statements 12
6.4 - Liabilities 12
6.5 - Litigation 12
6.6 - Taxes 13
6.7 - Purpose of Loan 13
6.8 - Properties; Liens 13
6.9 - Material Agreements 13
6.10 - ERISA 13
6.11 - Location of Records 13
6.12 - Permits and Franchises, Etc 13
6.13 - Subsidiaries 14
6.14 - Hazardous Wastes and Substances 14
6.15 - General 14
6.16 - Closing Compliance 14
ARTICLE VII AFFIRMATIVE COVENANTS
7.1 - Financial Statements and Other Information 15
7.2 - Financial Condition 16
7.3 - Cash and Accounts Receivable and Available Funding 16
7.4 - Accounts Payable 16
7.5 - Taxes 17
7.6 - Discharge of Contractual Obligations 17
7.7 - Legal Status 17
7.8 - Maintenance and Evidence of Priority of WFBT's Lien 17
7.9 - Insurance 17
7.10 - Reimbursement of Fees and Expenses 17
7.11 - Indemnification 18
7.12 - Curing of Defects 19
7.13 - Inspection and Visitation 19
7.14 - Notices 19
7.15 - Compliance 19
7.16 - Compliance With Environmental Laws 20
7.17 - Primary Operating Account 20
7.18 - Real Estate Debt Service Coverage Ratio 20
ARTICLE VIII NEGATIVE COVENANTS
8.1. - Other Indebtedness 21 8.2. -Use of Funds 21
8.3 - Dividends, Distributions (LLC, Partnership) 21
8.4 - Merger, Consolidation, Transfer of Assets. 21
8.5 - Liens, Etc 21
8.6 - ERISA Compliance 22
8.7 - Mergers, Consolidations 22
8.8 - Accounting Methods and Fiscal Year 22
8.9 - Nature of Business 23
8.10 - Disposition of Assets 23
ARTICLE IX DEFAULT AND REMEDIES
9.1 - Events of Default 23
9.2 - Remedies 24
ARTICLE X MISCELLANEOUS
10.1 - Survival of Representations and Warranties 25
10.2 - Communications 25
10.3 - Non-Waiver 25
10.4 - Strict Compliance 26
10.5 - Cumulative Rights 26
10.6 - Governing Laws 26
10.7 - Enforceability 26
10.8 - Binding Effect 26
10.9 - No Third Party Beneficiary 26
10.10 - Delegation by Lender 27
10.11 - Additional Documents 27
10.12 - Counterparts 27
10.13 - Amendments 27
10.14 - Headings 27
10.15 - Conflicts 28
10.16 - Entirety 28
10.17 - Confidentiality 28
10.18 - Financing Statements 28
10.19 - Arbitration - Binding Arbitration. 28
10.20 - Notice of Final Agreement 30
List of Exhibits and Schedules
Exhibit "A" "Notes"
Schedule 1 "Term Note"
Schedule 2 "Revolving Line of Credit Note"
Exhibit "B" Forms of Deeds of Trust,
Assignments of Rents and Security Agreements
Schedule 1 "Lubbock County, Texas"
Schedule 2 "Midland County, Texas"
Exhibit "C" Form of Assignment of Leases
Schedule 1 "Lubbock County, Texas"
Schedule 2 "Midland County, Texas
Exhibit "D" Form of Assignment of Ground Lease
Exhibit "E" UCC-1 Financing Statement
Schedule 4.1 Closing Documents
Schedule 5.4 Schedule of Liabilities
Schedule 5.5 Schedule of Litigation
Schedule 5.9 List of Material Agreements
Schedule 5.13 List of Other Business Relationships
Schedule 7.1 Certificates of Compliance
Schedule 8.1 Liens
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (hereinafter referred to as this "Agreement") is entered
into as of the 5th day of June, 2002, by and between TCTB PARTNERS, LTD., a
Texas Limited Partnership, acting by and through its General Partner, TCTB
COMPANY, a Texas corporation, whose address is P. O. Xxx 0000, Xxxxxxx Xxxxx,
00000, as Borrower (hereinafter referred to as the "Borrower") and XXXXX FARGO
BANK TEXAS, N.A., whose address is MAC T5717-011,500 Xxxx Xxxxx Xxxxxx, X.X. Xxx
0000, Xxxxxxx, Xxxxx 00000-0000 (hereinafter referred to herein as "Lender"or
"WFBT"), the Borrower and Lender sometimes hereinafter being referred to
collectively as the "Parties Hereto".
The Borrower has requested a loan (hereinafter referred to as "the Loan") from
the Lender in the total amount of SEVEN MILLION AND NO/100 DOLLARS
($7,000,000.00) to be evidenced by: (1) a TERM NOTE in the amount of SIX MILLION
EIGHT HUNDRED THOUSAND AND NO/100 DOLLARS ($6,800,000.00) and (2) a REVOLVING
LINE OF CREDIT NOTE in amount of TWO HUNDRED THOUSAND AND NO/100 DOLLARS
($200,000.00) (hereinafter sometimes referred to as "the Notes", and the Lender
is agreeable to such request, but only on the terms and conditions as set forth
herein.
In consideration of the premises and mutual covenants herein contained and Ten
Dollars ($10.00) and other good and valuable consideration, the receipt of which
is hereby acknowledged, the Parties Hereto do hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 - Certain Defined Terms. For the purposes of this Agreement, the following
terms, when and if used herein, shall have the respective meanings assigned to
them in this section or in the section or recital referred to below:
"Advance" means any disbursement to or on behalf of Borrower under any of the
Loan Papers, including, without limitation, all amounts advanced under the
Revolving Line of Credit Note.
"Agreement" is defined in the preamble, and means this Credit Agreement
instrument.
"Annual Debt Service" means and shall be calculated as the sum of principal and
interest due on an annual basis (the preceding twelve (12) months period of
time). Annual Debt Service for the year 2002 shall include the pro rata part of
the year 2002 of principal and interest due and paid on the Notes for the
calendar year 2002.
"Assignment of Leases" means any assignment of leases in favor of Borrower, or
Borrower's predecessors in title arising out of rental or lease space located in
the Mortgaged Properties.
"Assignment of Rents" means any assignment of rents or rentals due under the
leases which are the subject of the Assignment of Leases.
"Base Rate", shall mean the Xxxxx Fargo Bank Texas, N.A. Base Rate.
"Borrower" refers to TCTB PARTNERS, LTD., a Texas Limited Partnership, acting by
and through TCTB COMPANY, a Texas corporation, its General Partner.
"Business Day" means every day (other than Saturday or Sunday) on which Lender
is open to the public generally for the transaction of business.
"Collateral" is defined in Article IV.
"Credit Agreement (this Agreement)" is defined in the preamble.
"Debt" means, as to Borrower, all liabilities, obligations, and indebtedness to
Borrower, of any kind or nature, now or hereafter owing, arising, due or
payable, howsoever evidenced, created, incurred, acquired or owing, whether
primary, secondary, direct, contingent, fixed, or otherwise. The amount of
Borrower's contingent Debt for purposes of this Agreement and the other Loan
Papers shall be equal to the amount required to be included as a liability on a
balance sheet of the Borrower in accordance with Generally Accepted Accounting
Principles (GAAP) applied on a consistent basis.
"Deed of Trust" means one or more Deeds of Trust as either may be amended from
time to time, in favor of Lender encumbering every interest of Borrower in
Mortgaged Property now owned or, to the extent such acquisition is or was
financed by Lender, hereafter acquired by Borrower and selected by Lender to be
encumbered as security for the Obligation. The Deeds of Trust are to cover and
do cover real properties in Lubbock and Midland Counties, Texas, and may be
alternatively and interchangeably referred to as the "Mortgaged Property" or the
"Mortgaged Properties".
"Default Interest Rate" means that rate, if any, provided for in the Notes.
"ERISA" is defined in Section 8.7.
"Event of Default" is defined in Section 9.1.
"GAAP" means generally accepted accounting principles and practices that are
recognized as such by the American Institute of Certified Public Accountants
acting through its Accounting Principles Board or by the Financial Accounting
Standards Board (or any other appropriate board or committee thereof), applied
on a basis consistent with that of prior periods so as to properly reflect the
financial condition, results of operations, and cash flows of a person, except
that any accounting principle or practice required to be changed by said
Accounting Principles Board or Financial Standards Board (or any other board or
committee thereof) in order to continue as a generally accepted accounting
principle or practice may so be changed and when so changed shall constitute
generally accepted accounting principles in accordance with the terms hereof.
"Interest" means the interest called for in the Notes.
"Leases" means those leases from tenants in the Mortgaged Properties from which
rents and rentals are payable to Borrower, which may be referred to individually
as "Lease".
"Lender" is defined in the preamble which may be sometimes referred to as
"WFBT".
"Lien" means any lien, mortgage, security interest, charge, or encumbrance of
any kind, including, without limitation, the liens upon the Mortgaged
Properties, including liens upon the rents and rentals accruing to Borrower
under the Leases.
"Loan" or "the Loan" shall refer to the indebtedness created hereunder and
evidenced by the Notes and the Loan Papers.
"Loan Papers" mean the Credit Agreement, the Notes and any and all mortgages,
act of mortgage, deeds of trust, security agreements, financing statements, and
other agreements, assignments of Leases, assignments of Rents, documents,
certificates, letters and instruments delivered or executed pursuant to, or in
connection with, this Agreement, as any of the same may hereafter be amended,
supplemented or restated (including, without limitation, the Notes), and any and
all future renewals and extensions or restatements of, or amendments or
supplements to, all or any part of the foregoing.
"Material Adverse Change" or "material change" or "material" or "materially"
means any set of changed circumstances or events which (i) will or could
reasonably be expected to have any significant and adverse effect upon the
validity, performance, or enforceability of the Loan Papers, (ii) is or could
reasonably be expected to be material and adverse to the financial condition or
business operations or the Collateral or Mortgaged Property of Borrower taken as
a whole, (iii) will or could reasonably be expected to impair the ability of
Borrower to timely fulfill its payment obligations under the terms and
conditions of the Loan Papers, or (iv) will or could reasonably be expected to
cause an Event of Default unless cured within any applicable grace period, or
(v) when used in connection with change in management it shall be deemed to be
material or a material change if it involves the resignation of the general
partner or if the Borrower or a general partner are generally not paying its
debts as they become due.
"Material Agreement" means any written or oral agreement, contract, Lease,
commitment, or understanding to which Borrower is a party, by which Borrower is
directly or indirectly bound, or to which any assets of Borrower may be subject,
which may not be canceled by Borrower upon ninety (90) days or less notice
without liability for further payment other than nominal penalty.
"Mortgaged Property" or "Mortgaged Properties" shall mean those tracts or
parcels of land covered, or to be covered, by the Deeds of Trust, including the
proceeds and income from Rents or Rentals derived from the Lease or Leases of
particular premises located within the Mortgaged Properties.
"Net Income" shall mean that figure reflected as net income in the financial
statements to be submitted by Borrower in accordance with Section 6.3
hereinbelow.
"Net Operating Income" shall mean the income from the Project less operating
expenses (before deducting taxes, interest expense and depreciation) for the
Project.
"Notes" refers to the Term Note and the Revolving Line of Credit Note executed
by Borrower to Lender pursuant to the terms of this Agreement.
"Obligation" means all present and future indebtedness, obligations and
liabilities, and all renewals and extensions thereof, or any part thereof, now
or hereafter owed to Lender by (i) Borrower arising from, by virtue of, or
pursuant to any of the Loan Papers, together with all interest accruing thereon
and costs, expenses, and attorneys' fees incurred in the enforcement or
collection thereof, whether such indebtedness, obligations, and liabilities are
direct, indirect, fixed, contingent, liquidated, unliquidated, joint, several,
or joint and several or were, prior to acquisition thereof by Lender, owed to
some other person, or (ii) any obligation of Borrower to Lender.
"Origination Fee" and "Processing Fee" shall mean the fees due as described in
Section 2.6 hereinbelow.
"Person" shall mean any natural person or legal entity, included, but not
limited to corporations, limited liability companies, general and limited
partnerships or sole proprietorships.
"Project" means the business of the ownership and operation of the Mortgaged
Properties (which includes the improvements located thereon) as properties
producing income from the rental of premises located therein.
"Property" or "Properties" shall mean the same properties as "Mortgaged
Property" or "Mortgaged Properties".
"Rate" means the rate of interest being charged hereunder and as provided in the
Notes.
"Real Estate Debt Service Coverage Ratio" shall mean a ratio of not less than
1.5 to 1.0 from the Project being derived by the Net Operating Income divided by
the Annual Debt Service.
"Rent Roll" shall mean that current list of tenants occupying the Mortgaged
Properties, and which roll shall include, but not be limited to, the following
information relating to each tenant located in the Mortgaged Properties: (1) the
total number of square feet comprising the leased space of said tenant, (2) the
name of the tenant, (3) the calendar year in which each lease commenced, (4) the
minimum, or base, rental, (5) the amount of security deposit (and any other
deposits) and /or prepaid rental, (6) the date through which each tenant's
rental is paid, (7) the expiration date of each Tenant's lease, (8) the pro rata
portion to be contributed for common area maintenance, utilities, taxes,
insurance premiums and all other assessments, together with any applicable base
year figures, (9) fully executed copies of all tenant leases, and any amendments
or modifications thereto (Tenant Leases) together with a certification by
Borrower that said Rent Roll is true, complete and correct in all material
respects, to the best knowledge of the Borrower as of the date shown on said
Rent Roll.
"Revolving Line of Credit Note" refers to any revolving line of credit note form
executed by Borrower to Lender pursuant to the Terms of this Agreement.
"Rights" shall mean rights, remedies, powers, privileges and benefits.
"Subsidiary" means any corporation more than fifty percent (50%) of the Voting
Shares of which is owned, directly or indirectly, by the Borrower.
"Term Note" refers to any term note form executed by Borrower to Lender pursuant
to the Terms of this Agreement.
"Valuation Percentage" means that at all times during the term of the Loan the
percentage of value of the outstanding principal balance of the Loan shall not
exceed sixty percent (60%) of the then appraised market value of the Mortgaged
Property as agreed to by Xxxxx Fargo Bank Real Estate Technical Services Group
(said Group sometimes referred to with the acronym "RETECHS"). "Xxxxx Fargo Bank
Texas N.A. Base Rate" shall mean the rate announced by Xxxxx Fargo Bank Texas
N.A. as its base rate as of the beginning of each banking day on which Xxxxx
Fargo Bank Texas N.A. is open for business in accordance with the laws of the
State of Texas (and for holidays or weekends the Base Rate shall be the Xxxxx
Fargo Bank Texas, N.A. Base Rate as of the close of business on the most recent
banking day immediately preceding such weekend or holiday) before all sums
payable hereunder have been paid in full. Without notice to the Borrower or any
other person, the Base Rate may change from time to time pursuant to the
preceding sentence. The Base Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer. Xxxxx Fargo
Bank Texas may make commercial loans or other loans at rates of interest at,
above or below the Base Rate.
"WFBT" is defined in the preamble to this Agreement .
"WFBT Liens" means Liens in favor of Lender, securing all or any portion of the
Obligation, including, without limitation, Rights in any of the Collateral
created in favor of Lender, whether by mortgage, pledge, hypothecation,
assignment, transfer or other granting or creation of Liens.
1.2 - Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the above described meanings
when used in any other Loan Paper, or in any certificate, report, schedule, or
other document made or delivered pursuant to this Agreement or unless the same
shall otherwise expressly require.
(b) Terms used herein in the singular shall import the plural and vice versa.
(c) Terms not specifically defined herein shall have the meanings accorded them
under accounting principles or the Texas Uniform Commercial Code, as
appropriate.
(d) The words "hereof," "herein," "hereinabove", "hereinafter", "hereinbefore",
"hereinbelow", "hereto," "hereunder" and similar terms when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provisions of this Agreement.
ARTICLE II
LOANS
2.1 - Loan Commitment. Subject to the terms and conditions of this Agreement,
and the fulfillment of the conditions precedent of Article V, Lender agrees to
make Advances to Borrower in aggregate amounts not to exceed Seven Million and
No/100 Dollars ($7,000,000.00) from time to time outstanding in the manner set
forth below and in the Notes. Contemporaneously with the execution hereof, the
Borrower has executed and delivered to the Lender the Notes as described in
Section 2.2 hereinbelow; provided, however, Lender is obligated to make Advances
thereunder only upon the conditions set forth in Article V.
2.2 - Notes. Contemporaneously with the execution hereof, Borrower has executed
and delivered to the Lender the following described Notes, in the forms attached
hereto as Exhibit "A", Schedules 1 and 2, and incorporated herein for all
purposes:
A. Term Note in the original principal amount of $6,800,000.00.
B. Revolving Line of Credit Note in the original principal amount of
$200,000.00.
The Notes are non recourse as to Borrower so that Borrower shall have no
personal liability for the repayment thereof or for any cost, expense,
obligation, indemnity or damage, but Lender shall have resort to, and only to
the Mortgaged Properties referred to in Article IV (Mortgaged Properties)
hereinbelow, notwithstanding anything to the contrary in any of the Loan Papers.
Notwithstanding the foregoing it is also understood by the Parties Hereto that
the failure of Borrower to perform under the terms, conditions, covenants and
representations of the Loan Papers can cause "Events of Default" or other
breaches and violations of the Loan Papers which do not preclude Lender from
seeking any remedies available to it under law or the Loan Papers so long as
such remedies do not create personal liability to Borrower contrary to the non
recourse nature of the Notes; provided further that for purposes of this
Agreement "Mortgaged Properties" shall be deemed to include, among other items,
the assignment of leases and rents, assignment of rights under ground lease and
rights to replacement reserve account as provided in section 7.19 hereinbelow.
2.3 - Manner of Borrowing under the Revolving Line of Credit Note.
A. Each request by Borrower to Lender for an Advance under the Revolving Line of
Credit Note shall specify the aggregate amount (not to be less than $10,000.00
per Advance)of such requested Advance and shall be in writing or by telephone
notice promptly followed by written confirmation (which confirmation may be
submitted by facsimile transmission). Notwithstanding anything to the contrary,
requests for advances to the office of Lender set forth herein by any person
believed by Lender in good faith to be authorized to make the request, whether
written, or electronic, may be acted upon by Lender, and Borrower will be liable
for sums advanced by Lender pursuant to such request. Such requests for advances
shall be deemed authorized by Borrower, and Lender shall not be liable for such
advances made in good faith, and with respect to advances deposited to the
credit of any deposit account of Borrower, such advances, when so deposited,
shall be conclusively presumed to have been made to or for the benefit of
Borrower regardless of the fact that persons other than those authorized to
request advances may have authority to draw against such account. Borrower
agrees to indemnify and hold Lender harmless from and against all damages,
liabilities, costs and expenses (including attorney's fees) arising out of any
claim by Borrower or any third party against Lender in connection with Lender's
performance of transfers as described above.
B. Upon fulfillment of all applicable conditions set forth in Sections 5.1 and
5.2, Lender shall before 2:00 o'clock p.m. (Midland, Texas time) on the
requested borrowing date, pay or deliver each Advance under the Note to or upon
the order of Borrower at the account maintained pursuant to Section 7.17 of this
Agreement in immediately available funds.
2.4 - Interest Rate. The interest rates under the Notes shall be computed and
paid upon the actual principal amounts advanced to Borrower which interest rates
shall be as follows:
A. Term Note. A fixed rate per annum of 7.23 per cent per annum (Fixed rate).
B. Revolving Line of Credit Note. A variable rate per annum ("Variable Rate")
equal to the "Xxxxx Fargo Bank Texas N.A. Base Rate," as herein defined, plus
one-half of one percentage point (0.5000%). Adjustments in the Variable Rate
shall be made on the same date as any change in the Base Rate and adjustments
due to changes in the Highest Lawful Rate to be made on the effective date of
any change in the Highest Lawful Rate. Interest payable hereunder shall be
calculated in the manner set forth in the Note after giving effect to the
foregoing.
2.5 - Principal and Interest Payments
A. Term Note. Borrower shall be required to make monthly payments of principal
and interest in the amount of $53,663.20 beginning on June 30, 2002, with
subsequent monthly payments, each in the amount of $53,663.20, due and payable
on the 30th day of each and every succeeding month thereafter until maturity of
the Note on May 31, 2009, at which time all unpaid principal and interest shall
be due and payable.
B. Revolving Line of Credit Note. The principal balance of this Note shall be
due and payable on May 31, 2003. Interest, computed on the unpaid principal
balance of this Note shall be due and payable as it accrues monthly, commencing
on June 30, 2002 and on the same day of each and every succeeding month
thereafter during the term hereof, and at maturity, May 31, 2003, when the
entire amount of this Note, principal and accrued, unpaid interest, shall be due
and payable.
2.6 - Processing and Origination Fees. The following fees shall be paid as
provided hereinbelow:
A. Processing Fee. At closing of this Loan Borrower shall pay to Lender the sum
of Five Thousand Dollars ($5,000.00) as a processing fee, and
B. Origination Fee. Sixty Eight Thousand Dollars ($68,000.00), being one percent
(1%) of the Six Million Eight Hundred Thousand Dollars ($6,800,000.00) face
amount of the Term Note to be payable upon closing of this Loan, it being
understood that Twenty Thousand Dollars ($20,000.00) to be placed in a DDA
titled "TCTB Partnership, Ltd.", said amount to be applied toward the fees and
expenses for the purposes of paying and reimbursing the fees and expenses
incurred by Lender in the preparation and closing of this Loan, including, but
not limited to those fees and expenses set forth in section 7.10 hereinbelow.
2.7 - Accrual Base Standard. All past due principal and interest on the Notes
shall bear interest from the maturity thereof until paid, at the Default Rate.
Interest on the Notes shall be computed on a 365/360 simple interest basis; that
is, by applying the ratio of the annual interest over a year of 360 days, times
the outstanding principal balance, times the actual number of days the principal
is outstanding, unless such calculation would result in a usurious rate, in
which case interest shall be calculated on a per diem basis of 365 or 366 days,
as applicable.
2.8 - Manner and Application of Payments. All payments of principal and interest
on the Notes shall be made by Borrower to Lender before 2:00 o'clock p.m.
(Midland, Texas time), in lawful money of the United States of America and in
immediately available funds, at Lender's principal office in Midland, Texas or
as Lender and Borrower may agree. Payments received by Lender at or before 2:00
o'clock p.m. (Midland, Texas, time) shall be applied in reduction of the
Obligation on and as of such date for the benefit of Borrower. In any case where
a payment of principal or interest on the Notes, or any commitment or other fee,
is due on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day, but interest shall continue to
accrue until the payment is in fact made. All payments and prepayments, if any,
on the Obligation, including proceeds from the exercise of any Rights under the
Loan Papers or proceeds of any of the Collateral, shall be applied to the
Obligation in the order deemed appropriate by Lender, but Lender shall always
retain the right to apply same in the following order: (i) to expenses for which
Lender shall not have been reimbursed under the Loan Papers and then to all
indemnified amounts due Lender under the terms of the Loan Papers; (ii) to
accrued and unpaid interest on the Notes; (iii) to principal of the Notes; and
(iv) to the remaining Obligation
ARTICLE III
PURPOSE AND MANNER OF FUNDS AVAILABILITY
3.1 - Purpose of Loan. The proceeds from the Loan funds are to be used (1) as to
the Term Note to purchase the Mortgaged Properties and (2) as to the Revolving
Line of Credit Note for working capital in connection with the operation of the
Mortgaged Properties.
3.2 - Prepayment Penalties. During the first three (3) years of the Loan insofar
as it relates to the Term Note, the Borrower agrees that it shall not be able to
prepay the Loan; provided, however, in the event that the Loan is paid in full
during this period of time, then Borrower shall pay to Lender a prepayment
penalty of four percent (4%) of the full balance of amount so prepaid. In the
event of a prepayment of the Term Note during the fourth (4th) year the Borrower
shall pay to Lender a penalty of four percent (4 %) of any amount so prepaid; if
a prepayment of the Term Note during the fifth (5th) year the Borrower shall pay
to Lender a penalty of three percent (3%) of any amount so prepaid; if a
prepayment of the Term Note during the sixth (6th) year the Borrower shall pay
to Lender a penalty of two percent (2%) of any amount so prepaid; and if a
prepayment of the Term Note during the seventh (7th) and final year of the Term
Note the Borrower shall pay to Lender a penalty of one percent (1%) of any
amount so prepaid. Notwithstanding the foregoing, it is understood that any
single prepayment less than Two Hundred and Fifty Thousand Dollars ($250,000.00)
shall not be deemed a "prepayment" for purposes of the prepayment penalty
provisions of this section 3.2. Provided further it is understood that any
payment required for purposes of complying with the provisions of section 3.3
hereinbelow shall not be deemed a "prepayment" for purposes of the prepayment
penalty provisions of this section 3.2.
3.3 - Re-evaluation--Valuation Percentage-Paydown. Upon request of the Lender,
but in the absence of a default by Borrower, such requests by Lender to be no
more frequently than once within any three (3) year period, Lender has the
right, at Lender's discretion, to re-evaluate and/or re-appraise the Mortgaged
Properties, at the expense of Borrower. In such event if it is determined that
the Valuation Percentage exceeds sixty percent (60%), then, and in such event,
Borrower shall immediately repay such principal amount of the Loan as may be
necessary to result in a Valuation Percentage less than or equal to sixty
percent (60%) as satisfactory to Lender.
ARTICLE IV
SECURITY AND ASSIGNMENT
4.1 - Collateralization. To secure full and complete payment and performance of
the Obligation, Borrower hereby grants and conveys to and creates in favor of
Lender, liens in, to and on all of the following items and types of property
insofar as the same relate to the Leases, accounts relating to rentals under
Leases, Receivables, Inventory, Equipment, Contract Rights, General Intangibles
all of which may be located on, or used in connection with the Mortgaged
Properties, as well as the Mortgaged Properties (referred to collectively herein
as the "Collateral"), all as more particularly described in the Loan Papers:
(a) All present and future interests now owned or hereafter acquired by Borrower
in the Collateral, the Mortgaged Property identified in the Deeds of Trust,
Assignments of Rents and Security Agreements attached hereto as Exhibit B",
Schedules 1 and 2, the Assignments of Leases attached hereto as Exhibit "C",
Schedules 1 and 2, and incorporated herein for all purposes and in the Financing
Statement, attached hereto as Exhibit "E" and incorporated herein for all
purposes, (including the rights of Borrower under any ground lease, the form of
which Assignment of Ground Lease is attached hereto as Exhibit "D") relating to
the Mortgaged Properties) together with all proceeds and rentals from Leases
covering premises located in and on the Mortgaged Properties;
(b) All present and future increases, profits, combinations, reclassifications,
improvements and products of, accessions, attachments, and other additions to,
and substitutes and replacements for, any of the Collateral;
(c) All cash and non-cash proceeds and other Rights arising from or by virtue
of, or from the voluntary or involuntary sale, lease or other disposition of, or
collections with respect to, or insurance proceeds payable with respect to, or
proceeds payable by virtue of warranty or other claims against manufacturers of,
or claims against any other persons with respect to, any of the Collateral.
ARTICLE V
CONDITIONS PRECEDENT
5.1 - Initial Advance. The obligation of Lender to make the initial Advances
under the Loan shall be subject to satisfaction of each of the following
conditions precedent:
(a) Borrower shall have duly executed the Notes and all other Loan Papers, other
required resolutions including a borrowing resolution executed by the General
Partner, evidencing that Borrower is a valid and existing Texas Limited
Partnership in good standing with all state regulatory agencies and evidence
that appropriate filings with state agencies in all other states in which
Borrower now conducts business have been made, appraisals, and other documents
and instruments necessary or advisable in connection with the Loan, in order to
assure that Lender receives the consideration called for by this Agreement, all
of which shall be in form and substance satisfactory to the Lender and its
counsel and such other documents as Lender may require;
(b) All Deeds of Trust, financing statements, notices, releases, terminations,
and other documents and instruments deemed by Lender and its counsel to be
necessary or advisable in connection with the Collateral shall have been sent to
or received by all necessary persons and recording offices, as the case may be,
and copies of all title data relating to the Mortgaged Property which Lender may
have requested including satisfactory evidence that Borrower holds record title
to the Mortgaged Property; and
(c) That the Collateral and the Mortgaged Property are free and clear of any
mortgages or other encumbrances so that Lender obtains a first and superior lien
by virtue of the Loan Papers except as may be provided for in Section 8.5
hereinbelow; and
(d) Lender shall have reviewed Borrower's environmental policies and records and
determined that such policies and records are satisfactory for its purposes,
based upon representations by Borrower that such environmental policies and
records are consistent with those of prudent commercial real estate operations
and management.
5.2 - All Advances. The obligation of Lender to make any Advances hereunder
shall be subject to satisfaction of the conditions stated hereinabove and each
of the following conditions precedent:
(a) Borrower shall have requested such Advance, in a minimum amount in
accordance with the requirements of paragraph 2.3 hereof.
(b) No Event of Default shall have occurred that has not been waived in writing
by Lender, and there shall exist no condition or event that with the giving of
notice or lapse of time or both, would constitute an Event of Default.
(c) Borrower shall have materially observed, performed, and complied with all
covenants, agreements, duties, and obligations contained in the Loan Papers.
(d) Lender shall be under no obligation in any event to make any Advance to a
third party.
(e) All Deeds of Trust, financing statements, notices, releases, terminations,
and other documents and instruments deemed by Lender and its counsel to be
necessary or advisable in connection with the Collateral shall have been
recorded or filed in all necessary places, or sent to or received by all
necessary persons, as the case may be, and Lender shall have received copies of
all title data relating to the Mortgaged Property which Lender may have
reasonably requested including satisfactory evidence that Borrower holds record
title to the Collateral and the Mortgaged Property; and
(f) That the Collateral and the Mortgaged Property are free and clear of any
mortgages or other encumbrances so that Lender obtains a first and superior lien
by virtue of the Loan Papers except as provided for herein.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lender as of the date hereof, which
representations and warranties shall survive the delivery of the Notes, as
follows:
6.1 - Existence and Authority. Borrower is a Texas Limited Partnership whose
General Partner is TCTB Company, a Texas corporation, which are duly organized,
legally existing, and have made appropriate filings and paid current all fees,
taxes and any other assessments required of such entities under the laws of the
State of Texas and is otherwise duly qualified and in good standing in all other
jurisdictions wherein its respective operations, transactions of business, or
ownership of property makes such qualifications necessary.
6.2 - Powers. Borrower is duly authorized to execute and issue the Notes, and
this Agreement, the other Loan Papers and all other instruments referred to or
mentioned herein, and all action on its part requisite for the due creation,
issuance and delivery of the Notes and the due execution and delivery of the
other Loan Papers has been duly and effectively taken. This Agreement is, and
the other Loan Papers when duly executed and delivered will be legal, valid and
binding obligations of Borrower enforceable in accordance with their terms
(subject to any applicable bankruptcy, insolvency or other laws generally
affecting the enforcement of creditors' rights). The Loan Papers do not violate
any provisions of any material agreement, law or regulation to which Borrower is
subject, and the same do not require the consent or approval of any regulatory
authority or governmental body of the United States, any state or subdivisions
thereof.
6.3 - Financial Statements. The most recent financial statements of Borrower,
signed and dated by Borrower, have been delivered to Lender, are complete and
correct in all material respects and fairly present the financial condition and
results of the operations of Borrower in all material respects as of the date
and for the periods stated therein. There have been no Material Adverse Changes
in the financial conditions of the Borrower since the closing date of each such
submitted financial statement.
6.4 - Liabilities. As of the date hereof, except for the Debt established under
the Notes, and any Debt set forth on Schedule 6.4, Borrower has no debts other
than those set forth in its financial statements referred to in Section 6.3
hereof. Borrower knows of no fact, circumstance, act, condition or development
that will or could reasonably be expected to cause a Material Adverse Change in
such financial statement.
6.5 - Litigation. Except for the litigation, if any, described on Schedule 6.5,
Borrower is not involved in, nor is it aware of the threat of, any litigation,
nor are there any outstanding or unpaid judgments against Borrower, and none of
the litigation, if any, described on Schedule 6.5 could, create a Material
Adverse Change if determined adversely against Borrower.
6.6 - Taxes. All tax returns required to be filed by Borrower in all
jurisdictions have been filed, and all taxes, assessments, fees and other
governmental charges upon Borrower or upon any of Borrower's property , income
or franchises, which are due and payable, have been paid, or adequate reserves
determined in conformity to GAAP have been provided for payment thereof.
6.7 - Purpose of Loan. The proceeds of the Loan shall be used for the purpose
set forth in Section 3.1 above. The proceeds of any advances (i) are not and
will not be used directly or indirectly for the purpose of purchasing or
carrying, or for the purpose of extending credit to others for the purpose of
purchasing or carrying, any "margin stock" as that term is defined in Regulation
U of the Board of Governors of the Federal Reserve System, as amended; and in
violation of Regulations G, U or X, and (ii) will be otherwise used for lawful
purposes.
6.8 - Properties; Liens.
(a) Contemporaneously with the making of an Advance hereunder, with regard to
the Mortgaged Properties included in the Deeds of Trust and Borrower shall hold
good and defensible record title thereto, free and clear of all Liens except
Liens permitted under Section 8.5 hereof, and shall have full authority to
create WFBT's Liens thereon.
(b) Subject to the Liens permitted under Section 8.5 hereof and Liens that
neither materially detract from the marketability and value of the Mortgaged
Property nor materially impair the use of the Mortgaged Property, and except as
may be limited or otherwise affected by bankruptcy, insolvency, reorganization
or similar laws affecting creditors' rights generally, upon execution, delivery
and recording, or filing, as appropriate, the Loan Papers will be effective to
create in favor of Lender a legal, valid and continuing first Lien on the
Collateral (real and personal, tangible and intangible) described therein.
6.9 - Material Agreements. Except for the Loan Papers, the Material Agreements
which may be listed on Schedule 6.9, Leases and related agreements, documents
and instruments giving rise to the Collateral, or any portion of the Collateral,
there are no Material Agreements of Borrower affecting the Collateral; Borrower
is not, nor will the execution, delivery and performance of and compliance with
the terms of the Loan Papers cause Borrower to be, in default (nor has any
potential default occurred) under any Material Agreement.
6.10 - ERISA. Borrower maintains no plans subject to Title IV of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA").
6.11 - Location of Records. The records of Borrower, including all records
concerning the Collateral, are kept at the offices of Borrower located at 000
Xxxx Xxxx Xxxxxx, Xxxxxxx, Xxxxx 00000.
6.12 - Permits and Franchises, Etc. Borrower has all rights, licenses, permits,
franchises, patents, patent rights, trademarks, trademark rights and copyrights
that are required in order for Borrower to conduct its business as now conducted
without known conflict with the rights of others. Borrower is not aware of any
fact or condition that might cause any of such rights not to be renewed in due
course.
6.13 - Subsidiaries. Borrower is not a subsidiary of another legal entity.
Borrower is not a member of any general or limited partnership (except Borrower
itself), joint venture or association of any type whatsoever except
associations, joint ventures, partnerships, or other relationships that are
disclosed to Lender on Schedule 6.13.
6.14 - Hazardous Wastes and Substances. To the knowledge of Borrower the
Mortgaged Property is in compliance with applicable material state and federal
environmental laws and regulations and Borrower is not aware of and has not
received any notice of any violation of any applicable state or federal
environmental law or regulation and to the knowledge of Borrower there has not
heretofore been filed any complaint, nor commenced any administrative procedure,
against Borrower, or any of their predecessors, that is pending and that has not
been otherwise resolved, alleging a violation of any environmental law or
regulation with respect to the Mortgaged Property. In the event Borrower may use
or generate on a portion of its properties materials which are Hazardous
Materials, as hereinafter defined, Borrower has and will make a good faith
attempt to comply with all applicable statutes and regulations in the use,
generation and disposal of such materials. To the best of its knowledge,
Borrower has not otherwise installed, used, generated, stored or disposed of any
hazardous waste, toxic substance, asbestos or related material ("Hazardous
Materials") on the Mortgaged Property. For the purposes of this Agreement,
Hazardous Materials shall include, but shall not be limited to, substances
defined as "hazardous substances" or "toxic substances" in the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, 42
U.S.C. 9061, et seq., Hazardous Materials Transportation Act, 49 U.S.C. 1802, et
seq., and the Resource Conservation and Recovery Act, 42 U.S.C. 6901, et q., or
as "hazardous substances," "hazardous waste" or "pollutant or contaminant" in
any other applicable federal, state or local environmental law or regulation.
There do not exist upon the Mortgaged Property any underground storage tanks or
facilities, and to the best knowledge of Borrower, none of the Mortgaged
Property has ever been used for the treatment, storage, recycling, or disposal
of any Hazardous Materials.
6.15 - General. To the knowledge of Borrower there are no significant material
facts or conditions relating to the Loan Papers, any of the Collateral, or the
financial condition or business of Borrower that could, collectively or
individually, cause a Material Adverse Change and that have not been related or
disclosed, in writing, to Lender as an attachment or schedule to this Agreement;
and all writings heretofore or hereafter exhibited or delivered to Lender by or
on behalf of Borrower are and will be genuine and in all respects what they
purport and appear to be.
6.16 - Closing Compliance. To the knowledge of Borrower, Borrower represents to
Lender for all purposes that as of the date of the execution of this Agreement,
Borrower is in full and complete compliance with all applicable regulatory
requirements and all provisions of the Loan Papers except where non-compliance
will not have a material adverse effect on the security intended to be granted
to Lender.
ARTICLE VII
AFFIRMATIVE COVENANTS
As an inducement to Lender to enter into this Agreement, Borrower covenants and
agrees that from the date hereof and until termination of this Agreement and
payment in full of the Obligation (except as otherwise provided in this
Article), unless otherwise agreed to by Lender in writing, as follows:
7.1 - Financial Statements and Other Information. Borrower shall promptly
furnish to Lender copies of (i) such information regarding its business and
affairs and financial condition as Lender may reasonably request, and (ii)
without request, the following:
(a) Financial Statements: Borrower shall provide to Lender reviewed financial
statements, prepared by a certified public accountant not later than 120 days
after and as of the end of each fiscal year to include a statement of profit and
loss and of changes to owner's equity. Interim statements shall be provided
quarterly not later than 30 days after and as of the end of each such interim
period. Periodic financial statements shall include a balance sheet as of the
end of each such period, and a statement of profit and loss and of changes in
owners equity, from the beginning of the then fiscal year to the end of such
period, certified as correct by one of Borrower's authorized agents. If Borrower
has subsidiaries, annual financial statements shall be provided on a
consolidated and consolidating basis.
(b) Tax Returns: Borrower shall provide to Lender, within 30 days after filing,
but in no event later than October 31 of each calender year, copies of
Borrower's filed federal income tax returns for such year including all
supporting schedules.
(c) Certificates of compliance: Contemporaneously with each annual and quarterly
financial statement of Borrower required hereinabove, Borrower shall submit to
Lender a certificate of the general partner, or other authorized representative
of Borrower satisfactory to Lender, that the financial statements required
herein are accurate and that there exists no Event of Default nor any condition,
act or event which with the giving of notice or the passage of time or both
would constitute and Event of Default. The form of certificate of compliance and
with the attachments requested in the format reflected on Schedule 7.1 attached
hereto, which certificates of compliance shall then be attached to the financial
statements required in (a) above, and which may be modified from time to time by
Lender;
(d) Rent Roll: Borrower shall furnish to Lender, not later than sixty (60) days
after, and as of the 31st day of December of each year, (and more frequently
upon request of Lender), an annual Rent Roll in form and substance acceptable to
Lender;
(e) Immediately upon becoming aware of the existence of, or any material change
in the status of, any litigation which could create a Material Adverse Change if
determined adversely against Borrower, a written communication to Lender of such
matter;
(f) Immediately upon becoming aware of an Event of Default or the existence of
any condition or event that constitutes, or with notice or lapse of time, or
both, would constitute an Event of Default, a verbal notification to Lender
specifying the nature and period of existence thereof and what action Borrower
is taking or proposes to take with respect thereto and, immediately thereafter,
a written confirmation to Lender of such matters;
(g) Immediately upon becoming aware that any Person has given notice or taken
any other action with respect to a claimed default under any material indenture,
mortgage, deed of trust, promissory note, credit agreement, agreement, or any
other Material Agreement or undertaking to which Borrower is a party which does
or could result in a claim, fine or judgment against Borrower in excess of One
Hundred Thousand Dollars ($100,000.00) if not paid or otherwise resolved, a
verbal notification to Lender specifying the notice given or action taken by
such person and the nature of the claimed default and what action Borrower is
taking or proposes to take with respect thereto and, immediately thereafter, a
written communication to Lender of such matters; and
(h) Immediately upon becoming aware of the commencement of any material action
or material proceeding against either Borrower or any of the Mortgaged
Properties by any governmental agency, including, without limitation, the
Internal Revenue Service, the Environmental Protection Agency, or any other
governmental or other regulatory agency, having jurisdiction whether federal or
state, which does or could result in a claim, fine or judgment against Borrower
in excess of One Hundred Thousand Dollars ($100,000.00) if not paid or otherwise
resolved, a written communication to Lender of such matter.
All financial statements, schedules and other financial information delivered
hereunder shall be prepared in conformity with the requirements of Lender and
shall be certified as true and correct by the appropriate officer or
representative (satisfactory to Lender) of the general partner of Borrower, in
such person's official capacity as such officer or representative by signature
and date thereon.
7.2 - Financial Condition. Borrower shall maintain its financial condition as
follows using generally accepted accounting principles consistently applied and
used consistently with prior practices.
7.3 - Cash and Accounts Receivable and Available Funding. Borrower will maintain
cash plus accounts receivable plus available funding under the line of credit
greater than or equal to accounts payable.
7.4 - Accounts Payable. Borrower will maintain all accounts payable at less than
sixty (60) days.
7.5 - Taxes. Borrower will pay and discharge, or cause to be paid and
discharged, all taxes, assessments and governmental charges or levies imposed
upon it or upon its income and profits or upon any part of the Mortgaged
Properties, before the same shall become in default, as well as all lawful
claims for labor, materials and supplies or otherwise, which, if not paid, might
become a Lien upon such properties or any part thereof; provided that Borrower
shall not be required to pay and discharge or cause to be paid or discharged any
such tax, assessment, charge, levy or claim contested by it in good faith by
appropriate proceedings; and provided, further, that the immediately preceding
proviso shall not apply to any Lien imposed by the U.S. Government for failure
to pay income, payroll, FICA or similar taxes, and payment with respect to any
such tax, assessment, charge, levy or claim shall be made before any property of
Borrower shall be seized and sold in satisfaction thereof.
7.6 - Discharge of Contractual Obligations. Borrower will do and perform every
material act and discharge all of the material obligations provided to be
performed and discharged under the Loan Papers and any and all of the Material
Agreements or documents referred to or mentioned herein at the time or times and
in the manner required.
7.7 - Legal Status. Borrower will use its best efforts to do, or cause to be
done, all things necessary to preserve, renew and keep in full force and effect
its existence, rights, licenses, permits and franchises and comply with all
material laws and regulations applicable to it, and, further, comply with all
applicable laws and regulations, whether now in effect or hereafter enacted or
promulgated by any governmental authority having jurisdiction over the Mortgaged
Property, noncompliance with which would cause a Material Adverse Change.
7.8 - Maintenance and Evidence of Priority of WFBT's Lien. Borrower shall
perform such acts and duly authorize, execute, acknowledge, deliver, file, and
record such additional assignments, security agreements, deeds of trust,
mortgages and other agreements, documents, instruments and certificates as
Lender may reasonably deem necessary or appropriate in order to perfect and
maintain WFBT's Lien as a first lien (except as may be provided in Section 8.5)
and preserve and protect the Rights of Lender in respect of all present and
future Collateral.
7.9 - Insurance. Borrower will maintain such policies of liability, hazard,
damage, and worker's compensation insurance as are customarily carried by
companies similarly situated operating properties of the type and character as
the Mortgaged Properties. If requested by Lender, any such policies of insurance
shall show Lender therein as loss payee. Upon request by Lender, Borrower will
cause to be furnished to Lender certificates or policies necessary to give
Lender reasonable assurance of the existence of such coverage insofar as it
applies to the Mortgaged Property. Borrower agrees to notify Lender promptly of
any termination or other material change in such insurance coverage, and to
provide Lender, upon request, with all information about the renewal of each
policy at least 10 days prior to the expiration thereof.
7.10 - Reimbursement of Fees and Expenses. Borrower will promptly(and in any
event, within thirty (30) days after any invoice or other statement or notice,
pay:
(i) all transfer, stamp, mortgage, documentary, or similar taxes, assessments or
charges levied by any governmental or revenue authority in respect of this
Agreement or any of the other Loan Papers or any other document referred to
herein or therein;
(ii) all reasonable costs and expenses incurred by or on behalf of Lender,
including attorney's fees, auditor's fees (whether for work by Lender's in-house
auditors or independent auditors), real estate appraisal fees, survey fees,
environmental reports and collateral audits, travel costs and miscellaneous
expenses in connection with
(1) the negotiation, preparation, execution and delivery of the Agreement or
any renewal or extension thereof, the Loan Papers, and any and all consents,
waivers, or other documents or instruments relating thereto,
(2) the filing, recording, refiling, and re-recording of any Loan Papers and
any other documents or instruments or further assurances required to be filed or
recorded or refiled or re-recorded by the terms of the Loan Papers,
(3) the borrowing hereunder and other action reasonably required in the course
of the administration hereof,
(4) monitoring, or confirming (or preparation or negotiation of any documents
related to) Borrower's compliance with any covenants or conditions contained in
this Agreement or any of the Loan Papers,
(iii) all reasonable costs and expenses incurred by or on behalf of Lender
(including attorneys' fees, consultants' fees and accounting fees in connection
with the defense or enforcement of this Agreement or any of the Loan Papers
(including this section) or the defense of Lender's exercise of its rights
hereunder. In addition to the foregoing, until all obligations have been paid in
full, Borrower will also pay or reimburse Lender all reasonable out of pocket
costs and expenses of Lender or Lender's employees in connection with the
administration of the Notes and the related due diligence of Lender, including
travel and miscellaneous expenses and fees and expenses of Lender's outside
counsel and consultants engaged in connection with the renewal or extension of
the Agreement or the Loan Papers.
7.11 - Indemnification. Except for willful misconduct or grossly negligent
actions of Lender, Borrower agrees to indemnify Lender from and against any and
all liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, remedial actions, costs, expenses or disbursements
(collectively, "Claims") of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against Lender by any third party growing out of or
resulting from (i) the Loan Papers and the transactions and events at any time
associated therewith (including, without limitation, the enforcement of the Loan
Papers and the defense of Lender's actions and inactions in connection with the
Loan; (ii) the presence of any Hazardous Materials on or under the Mortgaged
Property; or (iii) any activity carried on or undertaken on or off the Mortgaged
Property (resulting from activities arising on the Mortgaged Property), whether
prior to or during the term hereof and whether by Borrower or any third person,
in connection with the treatment, storage, recycling, removal, handling or
disposal of Hazardous Materials at any time located on or under the Mortgaged
Property. The covenants and conditions of this section shall at all times be
construed to be personal covenants in favor of Lender and shall not run with the
lands; provided, however, that such covenants and indemnity shall remain in full
force and effect for a period of five (5) years from the termination of this
Agreement as renewed and extended from time to time notwithstanding the payment
in full of the Obligation and the release, either partially or wholly, of the
Lender's Liens or any foreclosure thereunder. All such Claims as may be paid by
Lender shall bear interest at the Highest Lawful Rate per annum if not paid by
the Borrower within sixty (60) days of presentation, until paid by Borrower and
shall be part of the Obligation secured by the WFBT Liens. THE PARTIES HERETO
INTEND FOR THE PROVISIONS OF THIS PARAGRAPH TO APPLY TO AND PROTECT EACH
INDEMNIFIED PARTY FROM THE CONSEQUENCES OF STRICT LIABILITY IMPOSED OR
THREATENED TO BE IMPOSED ON ANY INDEMNIFIED PARTY AS WELL AS FROM THE
CONSEQUENCES OF ITS OWN NEGLIGENCE (EXCEPT GROSS NEGLIGENCE), WHETHER OR NOT
THAT NEGLIGENCE IS THE SOLE, CONTRIBUTING, OR CONCURRING CAUSE OF ANY CLAIMS
INDEMNIFIED AGAINST.
7.12 - Curing of Defects. Borrower will promptly cure any defects in the
execution and delivery of any of the Loan Papers, and in any other instrument or
document referred to or mentioned herein. Borrower will immediately execute and
deliver to Lender upon request, all such other and further instruments as may be
reasonably required or desired by Lender from time to time in compliance with or
accomplishment of the covenants and agreements of Borrower made in the Loan
Papers.
7.13 - Inspection and Visitation. Borrower will grant Lender access to all of
its books and records, as well as to all of the Collateral, and allow inspection
and copying of same by Lender or its designated representatives at any time
during normal business hours or such other time as Lender may reasonably request
and following reasonable notice.
7.14 - Notices. Borrower will give prompt written notice to Lender of any
proceedings instituted against it by or in any federal or state court or before
any commission or other regulatory body, federal, state or local, which, if
adversely determined, would cause a Material Adverse Change.
7.15 - Compliance. Borrower will observe and comply with:
(a) All laws, statutes, codes, acts, ordinances, rules, regulations, directions
and requirements of all federal, state, county, municipal and other governments,
departments, commissions, boards, courts, authorities, officials and officers,
domestic and foreign, including but not limited to all applicable regulatory
requirements promulgated by any governmental agency including OSHA, the EPA, the
Pension Benefit Guaranty Fund, ERISA, and any other applicable regulatory
agency, where the failure to observe or comply would cause a Material Adverse
Change;
(b) All orders, judgments, decrees, injunctions, certificates, franchises,
permits, licenses, and authorizations of all federal, state, county, municipal,
and other governments, departments, commissions, boards, courts, authorities,
officials, and officers, domestic and foreign, with which the failure to observe
or comply would cause a Material Adverse Change and against which it shall
maintain such reserves as are appropriate; and
(c) All obligations necessary to maintain the Mortgaged Property.
7.16 - Compliance With Environmental Laws. Borrower, to its knowledge, is in
substantial compliance with all state and federal environmental laws and
regulations and will remain in substantial compliance with same and will not
place or permit to be placed any Hazardous Materials on the Mortgaged Property
in violation of applicable state and federal environmental laws. In the event
Borrower should discover any Hazardous Materials on the Mortgaged Property which
could result in a breach of the foregoing covenant, Borrower shall notify Lender
within ten (10) days after such discovery. Borrower shall dispose of all
material amounts of Hazardous Materials generated by them only at facilities
and/or with carriers that maintain valid governmental permits under the Resource
Conservation and Recovery Act, 42 U.S.C. 6901. In the event of any notice or
filing of any procedure against Borrower alleging a violation of any
environmental law or regulation, Borrower shall give notice to Lender within ten
(10) days after receiving notice of such notice or filing.
7.17 - Primary Operating Account. Borrower shall maintain its primary depository
and disbursement accounts with Xxxxx Fargo Bank Texas, N.A.
7.18 - Real Estate Debt Service Coverage Ratio. Borrower shall maintain a Real
Estate Debt Service Coverage Ratio of not less than 1.5 to 1.0 from the
"Project" with "Real Estate Debt Service Coverage Ratio" defined as Net
Operating Income divided by Annual Debt Service for the Project.
7.19 - Replacement Reserve: Borrower shall maintain in a DDA with Lender a
replacement reserve equal to four percent (4%) to be calculated upon the Net
Operating Income after deducting Annual Debt Service, and shall be paid by
Borrower into said DDA on a quarterly basis beginning with the first quarterly
payment being made on September 30, 2002, and quarterly thereafter.
ARTICLE VIII
NEGATIVE COVENANTS
Borrower further covenants that so long as Lender remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or un-liquidated) of Borrower to Lender under any of the
Loan Documents remain outstanding, and until payment in full of all obligations
of Borrower subject hereto, Borrower will not without Lender's prior written
consent:
8.1. - Other Indebtedness. Create, incur, assume or permit to exist any
indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or unsecured, matured or un-matured, liquidated or
un-liquidated, joint or several, except (a) the liabilities of Borrower to
Lender, and (b) any other liabilities of Borrower existing as of, and disclosed
to Lender prior to, the date hereof.
8.2. -Use of Funds. Use any of the proceeds of any credit extended hereunder
except for the purposes stated herein.
8.3 - Dividends, Distributions (LLC, Partnership). Borrower shall not, without
the written consent of Lender, declare or pay any distributions in excess of tax
liability due annually (but in any event, no more than forty percent (40%) of
net income), either in cash or any other property to any partner or member in
Borrower, nor redeem, retire, repurchase or otherwise acquire any interest of
any partner or member in Borrower.
8.4 - Merger, Consolidation, Transfer of Assets. Merge into or consolidate with
any other entity; make any substantial change in the nature of Borrower's
business as conducted as of the date hereof; acquire all or substantially all of
the assets of any other entity; nor sell, lease, transfer or otherwise dispose
of all or a substantial or material portion of Borrower's assets except in the
ordinary course of its business.
8.5 - Liens, Etc. Except as may otherwise be permitted herein Borrower will not
create, assume or suffer to exist any Lien upon the Mortgaged Properties,
excluding, however, from the operation of this section:
(a) The Lender's Liens;
(b) Any Liens reflected on Schedule 8.1 hereto;
(c) Deposits or pledges to secure payments of worker's compensation,
unemployment insurance, old age pensions or other social security;
(d) Deposits or pledges to secure performance of bids, tenders, contracts (other
than contracts for the payment of money), leases, public or statutory
obligations, surety or appeal bonds, or other deposits or pledges for purposes
of like general nature in the ordinary course of business;
(e) Liens for taxes, assessments or other governmental charges or levies that
are not delinquent or that are in good faith being contested or litigated,
provided, that this exception shall not allow any Lien imposed by the U.S.
Government for failure to pay income, payroll, FICA or similar taxes;
(f) Mechanics', carriers', workmen's, repairmen's or other like Liens arising in
the ordinary course of business securing obligations less than ninety (90) days
from the date of invoice, and on which no suit to foreclose has been filed, or
which are in good faith being contested or litigated;
(g) Liens securing any additional indebtedness which may be specified in Section
6.4 hereinabove or securing obligations under 7.1 above; or
(h) Liens created by or resulting from any litigation or legal proceeding that
is currently being contested in good faith by appropriate proceedings;
(i) Liens, charges and encumbrances incidental to the conduct of its business or
the ownership of its properties or assets, which were not incurred in connection
with the borrowing of money or the obtaining of advances of credit and that do
not materially detract from the value of such property or assets or materially
impair the use thereof in the operation of its business; and
(j) Liens arising in the normal course of business under operating agreements or
joint operating agreement covering all or part of the Mortgaged Properties.
8.6 - ERISA Compliance. Borrower will not at any time permit any plan subject to
ERISA maintained by it to:
(a) Engage in any "prohibited transaction" as such term is defined in Section
4975 of the Internal Revenue Code of 1986, as amended;
(b) Incur any "accumulated funding deficiency" as such term is defined in
Section 302 of ERISA; or
(c) Terminate any such plan in a manner which could result in the imposition of
a lien on its property pursuant to Section 4068 of ERISA.
8.7 - Mergers, Consolidations. Borrower will not, without the consent of Lender,
form any new subsidiary company, or consolidate with or merge into, or acquire
any party or permit any party to consolidate with or merge into, or acquire it,
unless Borrower is the surviving entity of such merger, consolidation, or
acquisition.
8.8 - Accounting Methods and Fiscal Year. Borrower will not make any change in
its present accounting method nor change its present fiscal year unless such
changes are approved by Lender or as may be required by changes in GAAP.
8.9 - Nature of Business. Borrower will not engage in any business other than
that in which Borrower is presently engaged and business activities directly
related thereto.
8.10 - Disposition of Assets. Except for sales in the ordinary course of
business and the disposition of obsolete or unneeded equipment in the ordinary
course of business, Borrower shall not, without Lender's consent, sell,
transfer, lease, exchange, alienate or otherwise dispose of any of the Mortgaged
Property or assets located thereon other than on fair and reasonable terms no
less favorable than could be obtained in an arm's length transaction between
Borrower and a non-related entity. Lender agrees to terminate its liens and its
interest in any collateral disposed of in accordance with the foregoing.
ARTICLE IX
DEFAULT AND REMEDIES
9.1 - Events of Default. If any one or more of the following shall occur and
shall not have been remedied in the period, if any, provided, an "Event of
Default" shall be deemed to have occurred hereunder and with respect to all of
the Obligation, unless waived in writing by Lender:
(a) Default shall occur in the payment when due of the outstanding principal of
the Obligation;
(b) Default shall occur in the payment within three (3) Business Days of when
due of any accrued interest upon the Obligation;
(c) Any material representations, warranty or statement made by Borrower in any
of the other Loan Papers or in any certificate furnished to Lender hereunder
shall be breached or shall prove to be untrue or misleading in any material
respect at the time when made;
(d) Default shall occur in the observation or performance of any covenants
duties, agreements, or obligations herein set forth including financial
covenants under Sections 7.1 above, and such default shall continue for a period
of thirty (30) consecutive days after Borrower's receipt of written notice of
such default;
(e) Borrower shall (i) apply for or consent to the appointment of a receiver,
trustee or liquidator of its or of all or a substantial part of its assets; (ii)
be unable, or admit in writing its inability, to pay its debts as they become
due; (iii) make a general assignment for the benefit of creditors; (iv) be
adjudicated a bankrupt or insolvent or file a voluntary petition in bankruptcy;
(v) file a petition or an answer seeking reorganization or an arrangement with
creditors or to take advantage of any bankruptcy or insolvency law; (vi) file an
answer admitting the material allegations of, or consent to, or default in
answering, a petition filed against it in any bankruptcy, reorganization or
insolvency proceedings; or (vii) take any action (corporate or otherwise) for
the purpose of effecting any of the foregoing;
(f) An order, judgment or decree shall be entered by any court of competent
jurisdiction approving a petition seeking reorganization of Borrower or
appointing a receiver, trustee or liquidator of Borrower or of all or a
substantial part of its assets, and such order, judgment or decree shall
continue unstayed in effect for any period of forty five (45) consecutive days;
(g) Any Lien for failure to pay income, payroll, FICA or similar taxes shall be
filed by the U.S. Government or any agent or instrumentality thereof against the
Borrower and shall not be terminated, discharged or stayed at least thirty (30)
days thereafter;
(h) There shall occur any default, notice of default, filing of suit or notice
of breach by any other party to any Material Agreement to which Borrower is a
party wherein the amount involved or claimed exceeds $100,000.00, following the
passage of the greater of thirty (30) days or any applicable grace period
provided for thereunder, unless contested by Borrower in good faith by
appropriate proceedings;
(i) Any final judgment or judgments for the payment of money in the amount of
$100,000.00 or more, in the aggregate, shall be rendered against Borrower, and
shall not be satisfied or discharged at least thirty (30) days prior to the date
on which any of its assets could be lawfully sold to satisfy such judgment or
judgments, unless Borrower shall bring litigation to stay same;
(j) Any attachment, sequestration or similar proceeding against any of the
assets of Borrower having a fair market value of $100,000.00 or more shall be
commenced and shall not be terminated, discharged or stayed at least thirty (30)
days prior to the date on which any of such assets could be lawfully sold;
(k) A Material Adverse Change has occurred with respect to Borrower; or
(l) Lender, in good faith, considers Lender's prospect of or right to payment of
principal or interest under this Agreement or the Notes executed by the Borrower
to be materially impaired.
9.2 - Remedies. Upon the occurrence of any Event of Default, Lender's obligation
to make any further Advances shall automatically be suspended and Lender may
declare all of the Obligation to be forthwith due and payable, whereupon the
same shall forthwith become due and payable without further presentment, demand,
protest, notice of acceleration or the intent to accelerate, or other notice of
any kind, all of which Borrower hereby expressly waives, anything contained
herein, in the Notes or in any of the other Loan Papers to the contrary
notwithstanding; provided that any default under subsection (d) of Section 9.1
shall result in all of the Obligation becoming immediately due and payable in
full without the necessity of any act by Lender. Further, Lender may, in its
discretion, but shall not be required to, exercise such Rights as are provided
it in any of the Loan Papers or at law or in equity. Nothing contained in this
Article shall be construed to limit or amend in any way the Events of Default
enumerated in the Loan Papers or any other document executed in connection with
the transactions contemplated herein. Further, in such event, Lender shall have
all other Rights afforded to it with respect to Borrower, or any of the
Collateral under any of the Loan Papers or under any applicable law or in
equity.
ARTICLE X
MISCELLANEOUS
10.1 - Survival of Representations and Warranties. All representations and
warranties of Borrower herein, and all covenants, agreements, duties and
obligations of Borrower not fully performed on or before the date of this
Agreement, shall survive such date.
10.2 - Communications. Unless specifically otherwise provided, whenever any Loan
Paper requires or permits any consent, approval, notice, request, or demand from
one party to another, such communication must be in writing to be effective and
shall be deemed to have been given on the day actually delivered or, if mailed,
on the third day (or if such third day is not a Business Day, then on the next
succeeding Business Day) after it is enclosed in an envelope, addressed to the
party to be notified at the address stated below, properly stamped, sealed, and
deposited in the appropriate official postal service; provided, however such
communications may also be by telecopy or overnight delivery . Until changed by
notice pursuant hereto, the address for each party for purposes hereof is as
follows:
BORROWER: TCTB PARTNERSHIP, LTD.
P. O. Xxx 0000
Xxxxxxx, XX 00000
Attention: Xxx X. Xxxxxx
LENDER: Xxxxx Fargo Bank Texas N.A.
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Vice President
10.3 - Non-Waiver.
(a) The acceptance by Lender at any time and from time to time of part payment
on the Obligation shall not operate as a waiver of any Event of Default then
existing.
(b) No waiver by Lender of any Event of Default shall operate as a waiver of any
other then existing or subsequent Event of Default.
(c) No delay or omission by Lender in exercising any Right shall impair such
Right or operate as a waiver thereof, nor shall any single or partial exercise
of any such Right preclude other or further exercise thereof, or the exercise of
any other Right under the Loan Papers or otherwise.
(d) No notice or demand given by Lender in any case shall operate as a waiver of
Lender's right to take other action in the same, similar or other instances
without such notice or demand.
(e) No Advance hereunder shall operate as a waiver by Lender of (i) the
representations, warranties and covenants of Borrower under the Loan Papers;
(ii) any Event of Default; or (iii) any of the conditions to Lender's
obligation, if any, to make further Advances.
10.4 - Strict Compliance. If any action or failure to act by Borrower violates
any of its respective covenants contained herein or in any other Loan Paper,
then such violation shall not be excused by the fact that such action or failure
to act would otherwise be required or permitted by any covenant (or exception to
any covenant) other than the covenant violated.
10.5 - Cumulative Rights. The Rights of Lender under the Loan Papers are in
addition to all other Rights provided by law, whether or not the Obligation is
due and payable and whether or not Lender has instituted any suit for collection
or other action in connection with the Loan Papers.
10.6 - Governing Laws. This Agreement has been prepared, is being executed and
delivered, and is intended to be performed, in the State of Texas. The
substantive laws of such state and the applicable federal laws of the United
States of America shall govern the validity, construction, enforcement and
interpretation of this Agreement and the other Loan Papers; provided, however,
that the rights provided in the Loan Papers with reference to properties
situated in other states may be governed by the laws of such other states.
10.7 - Enforceability. If one or more of the provisions contained in the Loan
Papers shall, for any reason, be held to be invalid, illegal or unenforceable in
any respect, such validity, illegality, or unenforceability shall not affect any
other provision of the Loan Papers or any other instrument referred to herein.
10.8 - Binding Effect. The Loan Papers shall be binding upon and inure to the
benefit of Borrower and Lender and their respective successors and assigns;
provided, however, that Borrower may not assign any Rights, duties or
obligations under the Loan Papers without the prior written consent of Lender.
10.9 - No Third Party Beneficiary.
(a) The Parties Hereto do not intend the benefit of the Loan Papers to inure to
any third party, nor shall the Loan Papers be construed to make or render Lender
liable to any third party, including, without limitation, any materialman,
supplier, contractor, subcontractor, purchaser, lessor or lessee having a claim
against Borrower. Notwithstanding anything contained in the Loan Papers, or any
conduct or course of conduct by any or all of the parties hereto, whether before
or after signing this Agreement or any other Loan Paper, no Loan Paper shall be
construed as creating any right, claim or cause of action against Lender in
favor of any third party, including, without limitation, any materialman,
supplier, contractor, subcontractor, purchaser, lessor or lessee having a claim
against Borrower, provided, however this provision shall not be deemed to
prohibit Lender from assigning the Loan Papers to a third party purchaser.
Nothing herein, however, shall limit Lender's right to negotiate the Notes
and/or assign its interest under the Credit Agreement or the Loan Papers.
(b) All conditions to the obligation of Lender to make Advances hereunder are
imposed solely and exclusively for the benefit of Lender, and no other person
shall have standing to require satisfaction of such conditions in accordance
with their terms or be entitled to assume that Lender will make or refuse to
make Advances in the absence of strict compliance therewith, and any or all of
such conditions may be freely waived in whole or in part by Lender at any time
if Lender, in its sole and absolute discretion, deems it advisable to do so.
10.10 - Delegation by Lender. Lender may perform any of its duties or exercise
any of its Rights by or through its officers, directors, employees, attorneys,
agents or other representatives.
10.11 - Additional Documents. It is contemplated that there may be certain
supplementary and/or corrective mortgages, deeds of trust, security agreements,
assignments, consents and similar items prepared by Lender to be executed by
Borrower or third parties through which Borrower has obtained title to the
Mortgaged Property subsequent hereto, as well as certain other corrective and
additional documentation not executed concurrently with this Agreement because
of the unavailability of information such as property and collateral
descriptions at the time of the execution hereof. Borrower agrees to cooperate
with Lender and to provide such information in connection therewith as Lender
may reasonably request, and to execute and deliver such other and further
documentation as Lender shall reasonably request so as to provide Lender with a
WFBT Lien on the Collateral. Further, upon Lender's reasonable request, Borrower
shall provide such title opinions, contracts, assignments, transfer orders,
division orders and such other documents and instruments as are necessary to
establish Borrower's title to the Mineral Interests.
10.12 - Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument. An electronic
transmission or other facsimile of this document or any related document shall
be deemed an original and shall be admissible as evidence of the document and
the signer's execution. The Parties Hereto agree that Lender shall gather all
such counterparts and is authorized to take the same apart and reassemble the
parts into one complete counterpart, copies of which will be delivered to
Borrower.
10.13 - Amendments. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally but only by an instrument in
writing signed by Borrower and Lender.
10.14 - Headings. All headings used herein are for convenience and reference
purposes only and shall not affect the substance of this Agreement.
10.15 - Conflicts. In the event that there exists any conflict or inconsistency
between the terms hereof and the terms of any other Loan Paper, the terms hereof
shall govern and control, provided that the fact that any representation,
warranty or covenant contained in any other Loan Paper is not contained herein
shall not be, or be deemed to be, a conflict or inconsistency.
10.16 - Entirety. This Agreement and the other Loan Papers embody the entire
agreement among the parties and supersede and supplant all prior agreements and
understandings with respect to the matters contained herein.
10.17 - Confidentiality. Lender will make all reasonable efforts, consistent
with its rights under the Loan Papers, to hold all information relating to the
Borrower and the Mortgaged Property in confidence.
10.18 - Financing Statements. Borrower appoints Lender, its officers
and employees, as Borrower's agent and attorney-in-fact to execute and/or file
all required Uniform Commercial Code Forms as may be necessary to perfect the
security interests granted under this Agreement or any other Loan Document
contemplated hereby.
10.19 - Arbitration - Binding Arbitration. Lender and each party to this
Agreement hereby agree, upon demand by any party, to submit any Dispute to
binding arbitration in accordance with the terms of this Arbitration Program. A
"Dispute" shall include any dispute, claim or controversy of any kind, whether
in contract or in tort, Legal or equitable, now existing or hereafter arising,
relating in any way to this Agreement, the Notes, or any related Loan Papers
whether incorporating this Arbitration Program, or any past, present, or future
loans, transactions, contracts, agreements, relationships, incidents or injuries
of any kind whatsoever relating to or involving Business Banking, Community
Banking, or any successor group or department of Lender. DISPUTES SUBMITTED TO
ARBITRATION ARE NOT RESOLVED IN COURT BY A JUDGE OR JURY.
Governing Rules. Any arbitration proceeding will (i) be governed by the Federal
Arbitration Act (Title 9 of the United States Code), notwithstanding any
conflicting choice of law provision in any of the documents between the parties;
and (ii) be conducted by the AAA (American Arbitration Association), or such
other administrator as the parties shall mutually agree upon, in accordance with
the AAA's commercial dispute resolution procedures, unless the claim or
counterclaim is at least $1,000,000.00 exclusive of claimed interest,
arbitration fees and costs in which case the arbitration shall be conducted in
accordance with the AAA's optional procedures for large, complex commercial
disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to, as
applicable, as the "Rules"). If there is any inconsistency between the terms
hereof and the Rules, the terms and procedures set forth herein shall control.
Arbitration proceedings hereunder shall be conducted at a location mutually
agreeable to the parties, or if they cannot agree, then at a location selected
by the AAA in the state of the applicable substantive law primarily governing
the Credit. Any party who fails or refuses to submit to arbitration following a
demand by any other party shall bear all costs and expenses incurred by such
other party in compelling arbitration of any Dispute. Arbitration may be
demanded at any time, and may be compelled by summary proceedings in Court. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief. The
arbitrator shall award all costs and expenses of the arbitration proceeding.
Nothing contained herein shall be deemed to be a waiver by any party that is a
Bank of the protections afforded to it under 12 U.S.C. 91 or any similar
applicable state law.
No Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration
requirement does not limit the right of any party to (i) foreclose against real
or personal property collateral; (ii) exercise self-help remedies relating to
collateral or proceeds of collateral such as setoff or repossession; or (iii)
obtain provisional or ancillary remedies such as replevin, injunctive relief,
attachment or the appointment of a receiver, before during or after the pendency
of any arbitration proceeding. This exclusion does not constitute a waiver of
the right or obligation of any party to submit any Dispute to arbitration or
reference hereunder, including those arising from the exercise of the actions
detailed in sections (i), (ii) and (iii) of this paragraph.
Arbitrator Qualifications and Powers. Any arbitration proceeding in which the
amount in controversy is $5,000,000.00 or less will be decided by a single
arbitrator selected according to the Rules, and who shall not render an award of
greater than $5,000,000.00. Any Dispute in which the amount in controversy
exceeds $5,000,000.00 shall be decided by majority vote of a panel of three
arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. Every arbitrator must be a
practicing attorney or a retired member of the state or federal judiciary, in
either case with a minimum of ten years experience in the substantive law
applicable to the subject matter of the Dispute. The arbitrator will determine
whether or not an issue is arbitratable and will give effect to the statutes of
limitation in determining any claim. In any arbitration proceeding the
arbitrator will decide (by documents only or with a hearing at the arbitrator's
discretion) any pre-hearing motions which are similar to motions to dismiss for
failure to state a claim or motions for summary adjudication. The arbitrator
shall resolve all Disputes in accordance with the applicable substantive law and
may grant any remedy or relief that a court of such state could order or grant
within the scope hereof and such ancillary relief as is necessary to make
effective any award. The arbitrator shall also have the power to award recovery
of all costs and fees, to impose sanctions and to take such other action as the
arbitrator deems necessary to the same extent a judge could pursuant to the
Federal Rules of Civil Procedure, the applicable State Rules of Civil Procedure,
or other applicable law. Judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction.
Discovery. In any arbitration proceeding discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters
directly relevant to the Dispute being arbitrated and must be completed no later
than 20 days before the hearing date and within 180 days of the filing of the
Dispute with the AAA. Any requests for an extension of the discovery periods, or
any discovery disputes, will be subject to final determination by the arbitrator
upon a showing that the request for discovery is essential for the party's
presentation and that no alternative means for obtaining information is
available.
Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators and
the parties shall take all action required to conclude any arbitration
proceeding within 180 days of the filing of the Dispute with the AAA. The
resolution of any Dispute shall be determined by a separate arbitration
proceeding and such Dispute shall not be consolidated with other disputes or
included in any class proceeding. No arbitrator or other party to an arbitration
proceeding may disclose the existence, content or results thereof, except for
disclosures of information by a party required in the ordinary course of its
business or by applicable law or regulation. If more than one agreement for
arbitration by or between the parties potentially applies to a Dispute, the
arbitration provision most directly related to the documents between the parties
or the subject matter of the Dispute shall control. This arbitration provision
shall survive termination, amendment or expiration of any of the documents or
any relationship between the parties.
10.20 - Notice of Final Agreement. THIS AGREEMENT, THE NOTES, THE LOAN PAPERS
AND ANY CONTRACTS OR INSTRUMENTS RELATING THERETO, REPRESENT THE ENTIRE
AGREEMENT BETWEEN THE PARTIES, AND IT IS EXPRESSLY UNDERSTOOD THAT ALL PRIOR
CONVERSATIONS OR MEMORANDA BETWEEN THE PARTIES REGARDING THE TERMS OF THIS
AGREEMENT SHALL BE SUPERSEDED BY THIS AGREEMENT. ANY AMENDMENT, APPROVAL, OR
WAIVER BY LENDER OF THE TERMS OF THIS AGREEMENT, THE Notes, LOAN PAPERS AND ANY
CONTRACTS OR INSTRUMENTS RELATING THERETO, MUST BE IN WRITING OR CONFIRMED IN
WRITING, AND SHALL BE EFFECTIVE ONLY TO THE EXTENT SPECIFICALLY SET FORTH IN
SUCH WRITING. THIS AGREEMENT, IN CONJUNCTION WITH THE NOTES, LOAN PAPERS AND ANY
CONTRACTS OR INSTRUMENTS RELATING THERETO SHALL SERVE TO EVIDENCE THE TERMS OF
THE ENTIRE AGREEMENT BETWEEN THE PARTIES.
EFFECTIVE as of the date first hereinabove written.
BORROWER:
TCTB PARTNERSHIP, LTD.
BY: TCTB COMPANY, Its General Partner
By:____/s/ Xxx Morgan______________
Xxx X. Xxxxxx, President
LENDER:
XXXXX FARGO BANK TEXAS N.A.
By: ____/s/ Xxxxx Lucas_____________
Xxxxx X. Xxxxx, Vice President