HomeMy WebLinkAboutPR 14714: EDC - ORBITAL INSULATION CORPP. R. No. 14714
05/02/2008 gg/mts
RESOLUTION NO.
A RESOLUTION APPROVING AN ECONOMIC
INCENTIVE CONTRACT AND LOAN AGREEMENT
BETWEEN ORBITAL INSULATION CORP. AND CITY OF
PORT ARTHUR SECTION 4A ECONOMIC
DEVELOPMENT CORPORATION
WHEREAS, the City Council deems it in -the public interest to authorize the City of Port
Arthur Section 4A Economic Development Corporation to enter into an Economic Incentive
Contract and Loan Agreement with Orbital Insulation Corp. (the "Agreement") attached hereto
as Attachment "A"; and
WHEREAS, Germer Gertz, L.L.P. has indicated this as a Section 4A project; and
WHEREAS, Orbital Insulation Corp. has reviewed and approved the Agreement.
WHEREAS, the agreement has been clarified to delineate that a payroll of $2,882,500
will be created for the period beginning May 6, 2008 and ending December 31, 2012
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL. OF THE
CITY OF PORT ARTHUR:
Section 1. That the facts and opinions in the preamble are true and correct.
Section 2. That the City of Port Arthur Section 4A Economic Development Corporation
is herein authorized to enter into an Economic Incentive Contract and Loan Agreement with
Orbital Insulation Corp., and the President and Secretary of the City of Port Arthur Section 4A
Economic Development Corporation are authorized to sign the Agreement in substantially the
same form as attached hereto with Exhibits "A", "B", "C", "D", "E", "F", "G" and "H", with the
clarification that the payroll of $2,882,500 will be created for the period beginning May 6, 2008
and ending December 31, 2012 .
Section 3. That a copy of this Resolution shall be spread upon the Minutes of the City
Council.
READ, ADOPTED AND APPROVED on this _ day of
A.D., 2008,
at a Meeting of the City Council of the City of Port Arthur, Texas, by the following vote:
AYES:
Mayor
DECOKES "BOBBIE" PRINCE, MAYOR
ATTEST:
TERRI HANKS, ACTING CITY SECRETARY
APPROVED:
FLOYD BATISTE, EDC CEO
A622280 ~ Page 2' -.. .__
APPROVED AS TO FORM:
See confidential memorandum
MARK T. SOKOLOW,
CITY ATTORNEY
APPROVED AS TO THE AVAILABILITY OF FUNDS:
Director of Finance
8622280 Page 3
ATTACHMENT "A"
TO THE RESOLUTION
ECONOMIC INCENTIVE CONTRACT
& LOAN AGRffiuIENT BETWEEN
CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
ORBITAL INSULATION CORP.
ERCQ1tiVe marv _. -
Orbital Insulation Corp., a Texas corporation with its principal offices in Port Arthur, Texas ("Orbital")
plans to expand its Port Arthur facility to provide warehousing for industrial projects, industrial insulation,
fabrication of fittings of insulation and fabrication of remove blankets. Orbital has spent $225,000 initially on this
expansion, and the City of Port Arthur Section 4A Economic Development Corporation ("PAEDC") will provide
Orbital with a ONE HUNDRED F~'I'Y THOUSAND AND NO/100 DOLLARS ($150,000.00) conditional grant
for purchase of equipment (the "Equipment"), renovation and improvements (the "Improvements") to the property
and building generally described as 817 Houston Avenue, Port Arthur, Texas and more fully described and
referenced in Exhibit `A" to the Deed of Trust attached as Exhibit "E" to this Economic Incentive Contract and
Loan Agreement (the "Building"). Orbital plans to acquire Equipment and to design and construct the
Improvements to the Building in order to start operation on Houston Avenue by July 31, 2008. Grow America Fund
will provide a THREE HUNDRED SEVENTY SIX THOUSAND AND NO/100 DOLLARS ($376,000.00) loan to
Orbital for the renovations and Improvements to the Building and construction of a new pazking lot on property
adjacent to 835 Houston Avenue, Port Arthur, Texas. The Grow America Fund will be administered and serviced
by the National Development Council -Grow America Fund, Inc.
In return, Orbital promises to reach a payroll from June through December, 2008 of $262,500 and thereafter
payrolls of $550,000, $620,000, $700,000 and $750,000, respectfully, for yeazs 2009 through year 2012; its total
payroll aggregating $2,882,500 for the period beginning May 6, 2008 and ending December 3I, 2012, as measured
by the Internal Revenue Service (IRS) W-2 and W-3 forms. In addition, Orbital promises that at least fifty (50%)
percent of its employees wfll be Port Arthur residents. Finally, Orbital promises to pay all of PAEDC's attorney
fees and expenses incurred for any modification of or amendment to this Agreement, including any legal documents
support this Agreement.
If Orbital breaches this Agreement, then the PAEDC grant, minus any credits earned, will automatically
convert to a loan by the PAEDC to Orbital, as liquidated damages and in lieu of any other damages (the "Loan").
The Loan will have a three yeaz term, with montltIy payments beginning on the date of Orbital's breach, and an
interest rate of ten (10%) percent. Orbital will execute Commercial Security Agreements as to the Equipment and a
Subordinated Deed of Trust on the Building to secure the Loan in the event of a default by Orbital. Additionally, as
provided in the Economic Incentive Contract and Loan Agreement, personal guazantees shall be provided by
principals of Orbital and their.wives. PAEDC may place Orbital in default and foreclose on the Building if Orbital
faits to perform its obligations under the Loan.
Orbital will eazn credits to reduce the duration of this Agreement or to reduce liquidated damages in the
event of a breach. Starting on the effective date of the Agreement, Orbital will receive $1.00 in credit for each
$9.00 in approved payroll for Port Arthur residents only.
To keep the PAEDC informed on its progress, Orbital agrees to send PAEDC status reports on its
equipment acquisitions, building improvements and its annualized payroll, quarterly for the first yeaz and twice per
yeaz thereafter for the life of this Agreement.
If Orbital fails to timely submit a status report, then PAEDC shall place Orbital on notice of its default, and
Orbital will forfeit its credits accruing during. any reporting period for which it did not issue a status report if it fails
to provide the status report within fifteen (157 days after receipt of the notice of default issued by PAEDC.
ECONOMIC INCENTIVE CONTRACT & LOAN AGREEMENT BETWEEN
CITY OF PORT ARTIiUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
AND
ORBITAL INSULATION CORP.
IN'I'RODUCTION ..........................................................................:..................................-1
AGREEbII31VT DATES ......................................................................................................- 1
PARTIES .......................................................................................................................: . -
PROMISED PERFORMANCE ..................................................................................... - 2 -
(A) PERFORMANCE BY PAIDC ...............................:................................................ - 2 -
(H) PERFORMANCE BY ORBTTAL .........................................................................................- 2 -
(C) ORBTTAL INSULATION CRIDTTS - SUBST11gJTE PERFORMANCE ...................................... - 4 -
ORBITAL INSULATION'S PERFORMANCE MILESTONE SCHEDULE ..................................- 4 -
PAEDC'S CONDITIONAL OBLIGATIONS AND LIMTTBD LIABII.TTY .................................. .- 5 -
LIQUIDATID DAMAGES FOR BREACH OF AGREIIvffsNT BY ORBITAL INSULATION.........- 6 -
RECORDS /INSPECTION / PAEDC AUD1T ....................................................................... .- 6 -
HOLD HARMLESS ......................................................................................................... .- 7 -
SUBCONTRACTS ........................................................................................................... : 7 -
CONFLICT OP IIVTII2FST /DISCLOSURE OBLIGATION ....................................................- 8 -
NONDISCRA4IIVATION /EMPLOYMENT /REPORTING .................................................... .- 8 -
LEGAL AUTHORITY ..................................................................................................... .: 9 -
NOTICE OF LEGAL OR REGULATORY CLAIMS AGAINST ORBITAL INSULATION ........... ... 9 -
CHANGES AND AMENDMENTS .................................................................................... ..- 9 -
DEFAULT /TERMINATION ........................................................................................... - 10 -
ORBLTAL INSULATION AUDiTS .................................................................................... - 10 -
ENVIRONMENTAL CLEARANCE REQUII2IINENTS ......................................................... - 11-
ORAL AND WRITTEN AGREh'MEDITS /PRIOR AGREEMENT'S ......................................... . 11-
-12 -
VENII& ............................:...........................................................................................
ADDRESS OF NOTICE AND C:OMMUNIGATTONS ............................................................ . 12 -
CAPTIONS ................................................................................................................... .12 -
COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS ........................:.................. . 12 -
CONDTI'IONS pRECIDENT ............................................................................................ . 12 -
ATTORNEY APPROVALS .............................................................................................. -13 -
AGR&El•~IV'T EXECUTTON ............................................................................................ - 13 -
EXHIBITS:
Exlvbit "A" Conditional Commercial Promissory Note
Ex}v'bit "B" Commercial Security Agreement
Exhibit "C" UCC-1
Exlubit "D" Personal Guaranties
Exhibit "E" Deed of Trust
Exhibit °P" Asset List
Exhibit °G" Certification Regarding Lobbying
Exhibit `H" Compliance Statement
ii
ECONOMIC INCENTIVE CONTRACT & LOAN AGREEMENT
BETWEEN
CPfY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
AND
ORBTTAL INSULATION CORP.
Orbital Insulation Corp. ("Orbital°) is a Texas corporation with its principal offices in Port
Arthur, Texas and plans to expand its Port Arthur facilities to provide warehousing for industrial projects,
industrial insulation, fabrication of fittings for insulation and fabrication of remove blankets. Orbital has
initiated the expansion of its operations on Houston Avenue in Port Arthur, Texas due to current market
demand for its services in the geographic area extending from Lake Charles, Louisiana and North
Louisiana to Houston, Texas. The City of Port Arthur Section 4A Economic Development Corporation
("PAEDC') will assist Orbital in this business endeavor by providing conditional grant and loan funds in
exchange for the promise of jobs and a payroll of $2,882,500 for the period beginning May 6, 2008 and
ending December 31, 2012.
AGREBMENT DATES
AGAEE[~iENT START DATE
1. This Economic Incentive Contract and Loan Agreement ("Agreement") is entered into with an
effective date of May 6, 2008, but in no case later than Lune 1,.2008, by and between PAEDC and Orbital.
A~ttEEt~rtT Et1n DATE
2. This Agreement expires the earlier of December 31, 2012, or 30 days after Orbital either
performs fully or breaches the Agreement, subject to earlier termination or extension, voluntary or
involuntary, as provided herein. The period from the effective date of this Agreement through and
including the expiration date of this Agreement as provided in the previous sentence hereof, is sometimes
referred to in this Agreement as the "Term" of this Agreement.
PARTIES
3. PAEDC located at 4173-39s' Street, Port Arthur, Texas, 77642, is a Texas non-profit
economic development corporation authorized to do business in the State of Texas under Section 4A,
Article 5190.6 V.T.C.A. (the Development Corporation Act of 1979) and duly authorized by Resolution of
the City Council of the City of Port Arthur to enter into this Agreement. So authorized and as provided by
the PAEDC bylaws, the designated officers of the PAEDC Boazd have the authority to execute this
Agreement.
4. Orbital is a Texas corporafion organized and in existence since August 8, 2006. The
registered agent in Texas for Orbital is James E. Wimberley az 3120 Central Mall Drive, Port Arthur,
Texas 77642.
PROMLSED PERFORMANCE
5. The parties agree to perform as follows.
(a) PExr'oRhsAxca BY PAEDC
PAEDC shall conditionally grant Orbital up to $150,000, subject to the conditions and
limitations herein, which Orbital is not required to repay unless Orbital breaches this
Agreement and fails to timely cure its default after notice. If Orbital breaches this
Incentive Agreement and fails to timely cure it default afer notice, then the Grant shall
convert to a loan made by [he PAEDC [o Orbital under the terms provided in the
Conditional Commercial Promissory Note as provided in Eahtbit "A".
u. PAEDC will provide said grant by either paying vendor invoices or reimbursing Orbital
for payment of vendor invoices for approved acquisition of Equipment and the
Improvements to -the Building. PAEDC will use its best efforts to pay invoices or
reimburse Orbital within forty-five (45) days after receipt of a payment request. These
reimbursements up to the aggregate amount of $15Q000 aze PAEDC's only obligations
under this Agreement.
iii. Orbital agrees to execute a Commercial Security Agreement, constituting a subordinate
security interest, junior in priority to commercial security agreements and financing
statements issued in favor of Community Bank, N.A. and the Grow America Fund to
provide a subordinate collateral security interest in the Equipment and Improvements
acquired and utilized by Orbital in its business operations. Orbital further agrees to
provide an asset list of Equipment and to allow the PAEDC to file subordinated financing
statemenu enumerating-such Equipment and noting the subordinate security interest, junior
in priority to the liens of Community Bank, N.A. and the Grow America Fund on said
Equipment all as more fuily enumerated in the Commercial Security Agreement and UCC-
1 Financing Statement attached hereto respectively as Exhffiit "B" and "C".
iv. The principals of Orbital, Eduazdo Gracian and Bruno Fernandez and their wives, further
agree to execute personal guazanties as to the financial commitments undertaken by Orbital
through the PAEDC in accordance with the personal guaranties attached hereto as Exhibit
"D"
Orbital agrees that the Deed of Trust provided in Exhibit "E" is for the benefit of PAEDC
shall constitute a second lien, junior in priority to a deed of trust on the Building and its
improvements for the benefit of Grow America Fund, Inc. which is lending Orbital
THREE HUNDRED SEVENTY SIX THOUSAND AND NO/100 DOLLARS ($376,000).
(b) Pt~xFOtuvrANCB BY ORBTTAt,
(1) Orbital shall use We $150,000 grant monies exclusively toward the purchase of Equipment
and [he Improvements to the Building which are required for Orbital's planned business
expansion.
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(2) By December 31, 2012 Orbital shall increase its annual payroll to $750,000. Employment
and payroll wID be monitored with Orbital status reports to PAEDC and Orbital's fled
Internal Revenue Service ("IRS") Forms V/-2 and W-3.
(3) Orbital covenants that at least fifty percent (50%) of its employees will be Port Arthur
residents.
(4) Contemporaneously with PAEDC's grant to Orbital, Orbital will execute the Commercial
Security Agreement, the UCC-1 Financing Statement and provide the Asset List.
(5) Contemporaneously with the PAEDC's grant to Orbital its principals, Eduardo Gracian
and Bruno Fernandez and [heir wives, will execute personal guaranties.
(6) Contemporaneously with PAEDC's grant to Orbital, Orbital will execute a Subordinate
Deed of Trust on the Building, and shall perform all Grantor obligations, including the
obligations added to protect the PAEDC as the junior lien holder, to wit:
a) Provide the PAEDC copied of ail notices, financial statements, reports and other
information provided to the senior lien holder;
b) Punctually pay or cause to be paid the principal and interest to become due in respect
to the senior debt according to the term thereof;
c) Perform all of iu obligations under the senior lender documents;
d) Arrange for senior lien holder to send PAEDC notices of Orbital defaults;
e) Immediately report to PAEDC in writing any default by Orbital under the senior lien;
f) Immediately report to PAEDC in writing any tax, judgment, materialnlan's or
mechanic's lien on the Building; and
g) In the event the PAEDC herein deems itself reasonable insecure in its ability to realize
upon its junior lien in the Building, upon notice thereof to Orbital, provide the PAEDC
with such additional collateral as may reasonably secure the PAEDC's position, subject
to the rights and restrictions unposed by the senior lien holder.
(7) Orbital shall not, without the prior written consent of PAEDC:
a) Materially alter any of the terms and conditions of the senior debt or increase the
maxitnum indebtedness available [o Orbital under the senior lender documents; or
b) Further encumber the Building; or
c) Allow any change in ownership of Orbital either by the sale of any capital stack or
interest in Orbita] or a sale of the operating assets of Orbital.
(8) Orbital shall use the Grant monies provided by the PAEDC exclusively for the purchase of
Equipment identified on Exhibit "F" and the Improvements that are not materially
differenP from those identified by Orbital to PAEDC.
(9) On demand by PAEDC and in response to Orbital's failure to achieve a performance
milestone, Orbital shall provide PAEDC with reasonable assurances, proposed by Orbital
and reasonably acceptable to PAEDC, that it has both the intention and the capabilities to
perform fully its contractual obligations.
' `Materially difterent° is defined as a change in the type of asset that changes the overall busircss plan in place at the time that this cotmact was
cxeculed. - _
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(c) OxsTTAI. CttED1TS - StrBSrlro'I'1? PeRroRMAtvcti
Orbital may earn credits according to the following terms, to either reduce the duration of this
Agreement or reduce the amount of liquidated damages in the event Orbital breaches this
Agreement.
(1) Starting on the effective date of the Agreement and for as long as Orbital performs. as
specified in 5(b){1), Orbital will receive a $1.00 credit for each $9.00 of approved payroll
paid to residents of Port Arthur. Payroll to non-residents cannot be credited.
(2) Total credit cannot exceed $150,000
(3) Orbital will forfeit any credits it earned during. a period for which a report is scheduled but
Orbital fails to submit as provided in this Agreement.
(4) Once Orbital has earned credits equal to $150,000, this Agreement and its Term shall
terminate pursuant to Section 2 hereinabove.
(5) If Orbital does not earn credits equal to ONE HUNDRED FIFTY THOUSAND AND
NO/100 DOLLARS ($150,000.00) during the term of and in accordance with the terms
and conditions of this Agreement, the Note (Exhibit "A"), Commercial Security
Agreement (Exhtbit "B"), UCC-1 Financing Statement (Exhibit "C"), personal guazanties
(Exhibit °D") and Deed of Trust (Exhibit "E") shaIl remain in effect until the Note is paid
in full.
ORBITAL'S PERFORMANCE MILESTONE SCHIDULE
6. Although failure to achieve a performance milestone is not a breach of contract, a failure is
grounds for PAEDC to withhold further payments or reimbursements and/or demand reasonable
asswancesz from Orbital that it can and will fully perform its contractual obligations. Failure to provide
such reasonable assurances following demand of PAEDC is a breach of contract.
7. Orbital's performance milestones aze contained in the table on the following page.
EXAMPLE OF ORBITAL'S PERFORMANCE MII.PSTOIVE SCHEDULE
~ Deadline Milestone
(a) July 31, 2008 Issue a status report (refer to footnote 3) to PAEDC's Chief Executive Officer
(°CEO") for [he period from the April 1, 2008 to June 3Q, 2008.
(b) October 31, 2008 Issue a status report (refer to footnote ') to PAEDC's Chief Executive Officer
("CEO") for the period from July 1, 2008 to September 30, 2008.
(c) Januazy 31, 2009 Issue a status report (refer to footnote ') to PAEDC's Chief Executive Officer
("CEO") for the period from October 1, 2008 to December 31, 2008
(d) July 31, 2009 Achieve performance of annualized payroll of $450,000 for yeaz ending December
31, 2008 to June 30, 2009
'Examples of reasooaLle assurances are copies of IRS g2sand was confvminS payroll Po[t Artlrur Residents hired:
y607.761 - ~ 4
(e) ]uly 31, 2009 Issue a status report (refer to footnote 3) to PAEDC's Chief Executive Officer
("CEO") for the period from January 1, 2009 to June 30, 2009.
(f) j January 31, 2010 Issue a stales report (refer to footnote 3) to PAEDC's Chief Executive Officer
~ ("CEO") for the period from July f, 2009 to December 31, 2009
(g) July 31, 2010 Achieve performance of annualized payroll of $550,000 for year ending December
31, 2009 i
(h) July 31, 2010 Issue a status report (refer to foomote 3) to PAEDC's Chief Executive Officer
("CEO") for the period from January 1, 2010 to June 30; 2010.
(i) January 31, 2011 Issue a status report (refer to foomote ') to PAEDC's Chief Executive Officer
("CEO°) for the period from July 1, 2010 to December 31, 2010
(j) ~ July 31, 2011 Achieve performance of annualized payroll of $620,000 for yeaz ending December
31, 2010
(k) July 31, 2011 Issue a status report (refer to footnote ') to PAEDC's Chief Executive Officer
("CEO") for the period from January 1, 2011 to June 30, 2011.
(1) January 31, 2012 Issue a stancs report (refer to footnote ') [o PAEDC's Chief Executive Officer
("CEO") for the period from July 1, 2011 to December 31, 2011
(m) 7uly 30, 2012 Achieve performance of annualized payroll of $700,000 for year ending December
31, 2011
(n) ~ July 30, 2012 Issue a status report (refer to footnote ') [o PAEDC's Chief Executive Officer
("CEO") for the period from January 1, 2012 to June 30, 2012.
(o) January 31, 2013 Issue a status report (refer to footnote ~) to PAEDC's Chief Executive Officer
("CEO°) for the period from July 1, 2012 to December 31, 2012
(p) January 31, 2013 Achieve performance of annualized payroll of $750,000 for yeaz ending December
31, 2012
PAEDC'S CONDITIONAL OBLIGATIONS AND LIMITID LIABILITY
8. It is expressly understood and agreed by the parties hereto that the PAEDC obligations herein
aze contingent upon the actual receipt of adequate sales [ax revenue funds ro meet the PAEDC's obligations
under this Agreement. If adequate funds aze not available to make payments under this Agreement, the
PAEDC shall notify Orbital in writing within a reasonable time after such fact is reasonably determined by
the PAEDC Board of Directors. The PAEDC, at its sole option, may then terminate this Agreement
without further liability. In the event of such termination by the PAEDC, the PAEDC may, at its sole
option, immediately cease all further funding, if any, required by this Agreement and the PAEDC shall not
be liable to Orbital or to any third parties for failure to make payments to Orbital under the terms and
conditions of this Agreement.
9. The PAEDC shall not be liable, in Agreemem or otherwise, to Orbital, or to any person or
entity claiming by or through Orbital, for any expense, expenditure or cos[ incurred by or on behalf of
Orbital related to the project made the basis of this Agreement. The PAEDC's sole liabilitylobliga[ions, if --
any, shall be to Orbital and shall be limited to the conditional funding obligations detailed in this
Agreement. ----
8602761' - - 5 -
10. Orbital shall not use the funds herein for any purpose(s) other than that specifically disclosed
herein and as further disclosed within that certain application made by or on behalf of Orbital, which
application is incorporated herein for all purposes.
11. Funds granted by the PAEDC hereunder shall not be utilized by Orbital for repayment of
costs, expenditures or expenses incurred prior to the date of this Agreement.
LIQUIDATED DAMAGES FOR BRBACH OF AGRBEMBNT BY ORBITAL
12. In the event Orbital fails to perform its obligations under this Agreement, following notice
thereof from PAEDC and thirty-day (30-day) opportunity to cure the same, the PAEDC grant, minus any
credits earned, will automatically convert to a loan (liquidated damages), effective on the day of breach, as
agreed by Orbital in the executed Commercial Promissory Note contained in Bxhibit "A". Following such
conversion to a loan as aforesaid, the PAEDC, at its sole option, may terminate its remaining funding
obligations, if any, detailed in Section 5 herein. Further, the PAEDC shall be entitled to recover its
reasonable and necessary attorney's fees and court costs incurred in collection of said obligation and such
remedies as aze provided at law or in equity.
13. It is expressly understood and agreed by the parties that any right or remedy shall not preclude
the exercise of any other right or remedy under this Agreement or under any provision of law, nor shall
any action taken in the exercise of any right or remedy be deemed a waiver of any other rights or
remedies. Failure to exercise any right or remedy hereunder shall not constitute a waiver of the right to
exercise that or any other right or remedy at any time.
RECORDS /INSPECTION /PAEDC AUDIT
14. Orbital must establish and maintain sufficient records, as reasonably determined by the
PAEDC, to account for the expenditure and utilization of funds received by Orbital from PAEDC under
the terms and conditions of this Agreement.
15. Orbital shall maintain records of the receipt and disposition of all funds provided hereunder as
necessary to allow the PAEDC to audit and verify proper utilization of said funds in compliance with this
Agreement and the representations and warranties contained herein and in Orbital's application. Orbital
shall provide reports of utilization of said funds, as reasonably requested by the PAEDC, and upon final
termination of this Agreement.
16. Upon ten (10) day advance notice, Orbital shall give the PAEDC, or any of its duty authorized
representatives, access to and right to examine all books, accounts, records, reports, files and other papers,
things or property belonging to or in use by Orbital. Such rights to access shall continue as long as the
records aze maintained by Orbital. Orbital agrees to maintain such records in an accessible location. All
information obtained by the PAEDC, or its duly authorized representatives, shall be regazded as [he
confidential business information of Orbital and the PAEDC shall take reasonable measures to protect such
information from disclosure to third parties; however, PAEDC is subject to the requirements of the Texas
Open Meetings Act and Open Records Act (Tex. Gov. Code, 551 & 552). Orbital agrees that disclosures
to the public required by the Texas Open Meetings Act, Texas Open Records Act, or any other legal
requirement will not expose PAEDC (or any party acting by, through or under PAEDC) to any claim,
liability or action by Orbital (or any party working by, through or under Orbital).
Y60I7fi1 "6'
17. All records pertinent to this Agreement shall be retained by Orbital at least three years
following the date of termination of this Agreement, whether said termination is a result of default or
whether said termination is a result of final submission of a close out report by Orbital detailing Orbital's
compliance with its obligations provided herein. Further, in the event any litigation, claim or audit azising
out of or related to this Agreement is instituted before the expiration of the three (3) yeaz period and
extends beyond the three year period, the records will be maintained until all litigation, claims or audit
findings involving this Agreement and the records made the basis of same have been resolved, Further,
records relating to real property acquisition, including any long-term lease, shall be retained for a period
equal to the useful life of any asset purchased with PAEDC funds.
18. Orbital shall provide PAEDC with all reports necessary for PAEDC compliance with Article
5190.6 V.T.C.A.
19. It is expressly understood and agreed by [he parties hereto that if Orbital fails to submit to
PAEDC in a timely and satisfactory manner any report required by this Agreement, PAEDC may, at its
sole discretion, withhold further payments to Orbital and/or demand assurances that Orbital can and will
fully perform its contractual obligations. If Orbital fails to provide adequate assurances then Orbital is in
breach and any monies advanced by PAEDC automatically become a loan. If PAEDC withholds such
payments, it shall notify Orbital in writing of its decision and the reasons therefore. Payments withheld
pursuant to this paragraph may be held by PAEDC until such time as the delinquent obligations for which
funds are withheld aze fulfilled by Orbital.
20. The PAEDC reserves the right, from time to time, to carry out field inspectionslaudits to
ensure compliance with the requirements of this Agreement. Afrer completion of any such audit, the
PAEDC may provide Orbital with a written report of the audit findings. If the audit report details
deficiencies in Orbital's performance under the terms and conditions of this Agreement, the PAEDC may
establish requirements for the timely correction of any such deficiencies by Orbital.
HOLD HAR)1H •FSS
21. Orbital agrees to hold harmless the PAEDC and the Ciry of Port Arthur from any and all
claims, demands, and causes of action of any Idnd or character which may be asserted by any third party
occurring, arising out of or in any way related to this Agreement, the project made the basis of this
Agreement, and the utilization of gram funds provided by this Agreement, provided that such claim,
demand or cause of action does not arise from any fraud or misconduct on the part of the PAEDC or the
City of Port Arthur, or any agent, employee or representative of either.
22. Orbital may not subcontract for performance credits described in this Agreement without
obtaining PAEDC's written approval, which may be withheld for any reason. Orbital shall only
subcontract for performance credits described in this Agreement afrer Orbital has submitted a
Subcontractor Eligibility Request, as specified by PAEDC, far each proposed subcontract, and Orbital has
obtained PAEDC's prior written approval. Orbital, in subcontracting for any performances described in
this Agreement, expressly understands that in entering into such subcontracts, PAEDC is in no way liable
to Orbital's subcontractor(s).
23. in no event shall PAEDC's prior written approval of a subcontractor's eligibility, be constmed
as relieving Orbital of the responsibility for ensuring that the performances rendered under all subcontracts
aze rendered so as to comply with al] terms of this Agreement, as if such performances rendered were
p6W76T '7'
rendered by Orbital. PAEDC's approval does not constitute adoption, ratification, or acceptance of
Orbital's or subcontractor's performance hereunder. PAEDC maintains the right to insist upon Orbital's
full compliance with the terms of this Agreement, and by the act of subcontractor approval, PAEDC does
not waive any right of action which may exist or which may subsequently accrue [o PAEDC under this
Agreement.
24. Orbital, as well as all of its approved subcontractors, shall comply with all applicable federal,
state, and local laws, regulations, and ordinances for making procurement under this Agreement.
CONFLICT OF nv'rF,~FeT /DISCLOSURE OBLIGATION
25. No employee, agent, officer or elected or appointed official of the City of Port Arthur or the
PAEDC who has participated in a decision making process related to this Agreement (without recusing
him herself and executing a conflict affidavit) may obtain a personal or financial interest or benefit from an
PAEDC assisted activity, or have an interest in any contract, subcontract, or agreement (or proceeds
thereof) with respect to an PAEDC assisted activity, during their tenure or for one (1) year thereafter.
Insofar as relates to the conduct hereunder of Orbital, its agents, employees or representatives, Orbital
shall ensure compliance with applicable provisions under Article 5190.6 V.T.C.A. and Chapter 171 Local
Government Code V.T.C.A.
26. In conjunction with execution of this Agreement, Orbital has fully disclosed to PAEDC all
known and potential owners of interests in Orbital (whether stockholder, manager, member or otherwise).
In the event of any change in ownership or control of Orbital of five (5 %) percent or greater, Orbital shall
notify PAEDC in writing. Further, Orbital shall be obligated to notify in writing the PAEDC in the event
any time prior to, during or one (1) year after the term of this Agreement, any City or PAEDC employee
or representative or any third pazty with a conflict of interest obtains or proposes to obtain a financial
benefit, direct or indirect, from Orbital. Failure to provide said notice immediately or no later than five
(5) business days after receipt of information shall constitute a default herein.
NONDISCRIIvIINATION / EMPIAYMENT /REPORTING
27. Orbital shall ensure that no person shall on the grounds of race, color, religion, sex, handicap,
or national origin be excluded from participation in, be denied the benefits of, or be subjected to
discrimination under any program or activity funded in whole or in part with funds provided under this
Agreement. Additionally, funds shall be used in accordance with the following requirements:
(a) To the greatest extent feasible, opportunities for training and employment azising in connection
with the planning and carrying out of any project assisted with PAEDC funds provided under
this Agreement be given tc Port Arthur, Texas residents; and
(b) To the greatest extern feasible, Agreements for work to be performed in connection with any
such project be awazded to Port Arthur residents and businesses, including, but not limited to,
individuals or firms doing business in the field of planning, consulting, design, azchitecture,
building construction, rehabilitation, maintettance, or repair, which are located in or owned in
substantial part by persons residing in the City of Port Arthur, Texas;
(c) If Orbital advertises for employment then it will advertise in the Port Arthur News; however,
PAEDC has no intent to restrain advertising in additional publications or media.
16D2161. - -a- .°....' -.
LEGAL AUTHORITY
28. Orbital assures and guarantees that it possesses legal and/or corporate authority to enter into
this Agreement, receive funds authorized by this Agreement, and to perform the services Orbital has
obligated to perform hereunder and has provided, and will in the future provide, as requested by the
PAEDC, such corporate resolutions necessary to evidence this authority.
29. The person or persons signing and executing this Agreement on behalf of Orbital, or
representing themselves as signing and executing this Agreement on.behalf of Orbital, do hereby warrant
and guarantee that he, she, or they have been duly authorized by Orbital to execute this Agreement on
behalf of Orbital and to validly and legally bind Orbital to all terms, performances, and provisions herein
set forth.
NOTICE OF LEGAL OR REGULATORY CLAIMS AGAINST ORBTTAL
30. Orbital shall give PAIDC immediate notice in writing of 1) any legal or regulatory action,
including any proceeding before an administrative agency fled against Orbital, directly or indirectly; and
2) any material claim against Orbital, which may impact continued operations. For purposes herein,
"material" claims shall mean claims in excess of $5,000. Except as otherwise drrected by PAEDC,
Orbital shall furnish immediately to PAEDC copies of all pertinent documentation of any ]rind received by
Orbital with respect to such action or claim.
CHANGES AND AMENDMENTS
31. Except as specifically provided otherwise in this Agreement, any alterations, additions, or
deletions to the terms of this Agreement shall be by amendment in writing and executed by all parties to
this Agreement. Such amendments must be approved by the PAEDC Boazd of Duectors and, in many
cases, by the City of Port Arthur, City Council.
32. It is understood and agreed by the parties hereto that performances under this Agreement must
be rendered in accordance with Article 5190.6 V.T.C.A. (the Development Corporation act of 1979), the
regulations promulgated under Article 5190.6 V.T.C.A., the assurances and certifications made to PAEDC
by Orbital, and the assurances and certifications made to the City of Port Arthur with regazd to the
operation of the PAEDC's Projects. Based on these considerations, and in order to ensure the legal and
effective performance of this Agreement by till parties, it is agreed by the parties hereto that the
performances under this Agreement are by the provisions of the PAEDC Program and any amendments
thereto and may further be amended in the following manner: PAEDC may from time to time during the
period of performance of this Agreement issue policy duect5ves which serve to interpret, or clarify
performance requirements under this Agreement. Such policy d'uectives shall be promulgated by the
PAEDC Boazd of Directors in the form of PAEDC issuances, shall be approved by the Ciry Council and
shall have the effect of qualifying the terms of this Agreement and shall be binding upon Orbital, as if
written herein.
33. Any alterations, additions, or deletions to the terms of this Agreement which aze required by
changes in Federal, state law or local law aze antomafically incorporated into this Agreement without
written amendment hereto, and shall become effective on the date designated by such law or regulation.
abone~ - v-
DEFAULT / TERMIIdATION
34. 1n' the event of default of any of the obligations of Orbital detailed herein or in the event of
breach of any of the representations of or wazranties of Orbital either detailed herein or in Orbital's
application to the PAEDC, and following any notice' and opportunity to cure provided for in this
Agreement, the PAEDC .may, at its sole option, terminate this Agreement, in whole or in part. In the
event of such termination, the PAEDC may, at its sole option, utilize one or more of the following actions
to resolve or otherwise remedy said default:
(a) Declare the Commercial Promissory Note executed in conjunction with this Agreement
immediately effective. If Orbital defaults on the note, then the PAEDC may exercise its
default remedies provided under collateral documentation executed in conjunction with said
Note and this Agreement
(b) Exercise any remedies provided herein and/or within the Commercial Security Agreement
and/or the Deed of Tmst;
(c) Call upon the guarantors under the personal guaranty agreements;
(d) Withhold, whether temporazily or otherwise, disbursement of grant proceeds pending
correction of the deficieney(s) by Orbital;
(e) Disallow all or a part of the incentives which are not in compliance with the terms and
conditions of this Agreement or in compliance with the representations and wazranties
contained within this Agreement and Orbital's application to the PAEDC;
(~ Withhold and/or disallow further PAEDC incentives to Orbital; and
(g) Exercise any and all other remedies that may be legally available to the PAEDC, under the
laws of the State of Texas and as authorized by the terms and conditions of this Agreement.
35. In addition to the foregoing, the parties agree that this Agreement may be temtinated at any
time when both parties agree, in writing, to the terms and conditions of any such voluntary termination.
O12BITAL AUDITS
36. If directed by PAEDC Board, Orbital shall arrange for the performance of a compliance audit,
by a certified public accountant, of funds received and performances rendered under this Agreement,
subject to the following conditions and limitations:
(a) Orbital shall have a compliance audit which may be limited to use of funds received from the
PAEDC, made for any of its fiscal years included within the Term of this Agreement in which
Orbital receives more than $50,000 in PAEDC financial assistance provided by PAEDC in the
form of grants, contracts, loans, loan guazantces, property, cooperative agreements, interest
subsidies, or direct appropriations. Backup documentation regarding actual expenditures shall
be provided by Orbital. Said audit must be received and accepted by the Chief Executive
Officer of PAEDC and/or the PAEDC Boazd.
A60276r ~ ~~
(b) At the option of Orbital, each audit required by this section may cover either Orbital's entire
operations or each department, agency, or establishment of Orbital which received, expended,
or otherwise administered PAEDC funds;
(c) Unless otherwise specifically authorized by PAEDC in writing, Orbital shall submit the report
of such audit to PAEDC within thirty (30) days after completion of the audit, but no later than
one hundred twenty (120) days after the end of each fiscal period included within the Term of
this Agreement.
37. Orbital understands and agrees that it shall be liable to reimburse immediately PAEDC for any
costs disallowed pursuant to financial and wmpliance audit(s) of funds received under [his Agreement and
it may be required to submit formal audits at Orbital's expense.
38. 'Orbital shall take all necessazy actions to facilitate the performance of any and all such audits,
whedter annual, mandatory or otherwise requested uttder this Agreement.
39. Subject to financial privacy requirements of Orbital and properly designated requests for non-
disclosure due to proprietary reasons, all approved audit reports may be made available for public
inspection.
40. PAEDC shall not release any funds for costs incurred by Orbital under this Agreement until
PAEDC has received certification from Orbital that its fiscal control and fund accounting procedures are
adequate to assure proper disbursal of and accounting for funds provided under this Agreement. PAEDC
shall specify the content and form of such certification.
ENVIRONMENTAL CLEARANCE REQUIREIVIENTS
41. Orbital understands and agrees that by execution of this Agreement, Orbital shall be
responsible for providing to PAEDC all information, concerning this PAEDC funded project, required for
PAEDC to meet its responsibilities for environmental review, decision making, and other action which
applies to PAEDC in accordance with and to the extent specified in Federal, State and Local Law. Orbital
further understands and agrees that Orbital shall make all reasonable efforts to assist PAEDC in handling
inquiries and complaints from persons and agencies seeking redress in relation to environmental reviews
covered by approved certifications.
ORAL AND WRITTEN AGREEMENTS /PRIOR AGREEIv~NTS
42. Alt oral and written contracts between the parties to this Agreement relating to the subject
matter of this Agreement that were made prior to the execution of this Agreement have been reduced to
writing and are contained in this Agreement.
43. The documents listed below are hereby made a part of this Agreement, and constitute promised
performances by Orbital in accordance with this Agreement:
Exhibit "A" Conditional Commercial Promissory No[e
Exhibit "B' Commercial Security Agreement
Exhibit "C" UCC-1
Exhibit "D' Personal Guazan6es
Exhibit "E" Deed of Trust
Exhibit "F" Asset List
O'602J61 ~ 11
Exhibit "G" Certification Regazding Lobbying
Exhibit "H" Compliance Statement
Orbital's Application to PAEDC for funding, by reference
VENUE
44. For purposes of litigation that may accrue under this Agreement, venue shall lie in Iefferson
County, Texas, where substantially all the performance will occur. '
ADDRESS OF NOTICE AND COMMUNICATIONS
City of Port Arthur Section 4A Economic Development Corporation
4173 39'" Street
Port Arthur, Texas 77642
ATTN: Floyd Batiste, Chief Executive Officer
Orbital Insulation Corp.
817 Houston Avenue
Port Arthur, Texas 77642
ATTN: Eduazdo Gracian
CAPTIONS
45. This Agreement has been supplied with captions to serve only as a guide to the contents. The
caption does not control the meaning of any pazagraph or in any way determine its interpretation or
application.
COMPLIANCE WITH FEDERAL. STATE AND LOCAL LAWS
46. Orbital shall comply with all Federal, State and local laws, statutes, ordinances, resolutions,
rules, regulations, orders and decrees of any court or administrative body or tribunal, including those
related to the activities and performances of Orbital under this Agreement. Upon request by PAEDC and
by the Ciry, Orbital shall furnish satisfactory proof of its comphance herewith.
CONDITIONS PRECEDENT
47. This agreement has no legal consequences, and neither party shall rely on the agreement,
unless and until both the PAEDC Boazd and the Port Arthur City Council approve this Agreement in its
final form.
R6U2761 - 12 -
ATTORNEY APPROVALS
APPROVED AS TO FORM:
VERIITED AS CONSISTANT
WITH CITY COUNCIL RESOLUTION:
AGREEMENT EXECUTION
Guy Goodson, General Counsel for PAEDC
Resolution Number:
Mark T. Sokolow, City Attorney
CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION
SIGNED AND AGREED TO on the _ day of , 2008.
By:
President
Witness
By:
Secretary
Witness
ORBITAL INSULATION CORP.
SIGNED AND AGREED TO on the day of , 2008.
By:
Its:
ATTEST:
XWY1761
-13-
EXFIIBIT "A"
CONDTI`IONAL COMMIIZCIAL PROMISSORY NOTE
Port Arthur, Texas
This CONDITIONAL COMMERCIAL PROMISSORY NOTE becomes effective on the date when
Orbital Insulation Corp., a Texas corporation (hereinafter called "Maker") breaches that certain
Economic Incentive Contract and Loan Agreement between the City of Port Arthur Section 4A Economic
Development Corporation (hereinafter called "bender") and Maker, dated _ , ZOOg,
Effective Date of Note: the day of , 200 .("date of breach")
Principal Amount: $ ,which is $150,000 minus the incentive credits earned by Maker
according to that certain Economic Incentive Contract and Loan Agreement between the Lender and Maker
(described hereinbefore).
Term of the Loaa Three years from effective date.
Payment Schedtde: Montldy until the Principal Amount and interest as hereinafter specified is paid in full
FOR VALUE RECEIVED, the undersigned "Maker", promises to pay to Lender, az its office at P.O. Box
1089, Port Arthur, Texas, 77640-1089, or such other place or places as the holder hereof shall from time
to time designate in written notice to Maker, the principal amount, in legal and lawful money of the United
States of Atnerica, together with interest thereon from the date hereof until maturity az the rate of ten
percent (10%) per annum as detailed herein.
All past due principal and interest shall bear interest from date of maturity until paid at the rate of
fifteen percent (1596) per annum, or to the rnaximum extent allowed by law (whichever is greater) as may
hereafter be in effect, payable on demand after mamrity.
This Note is due and payable as follows: Thirty-six (3~ equaI monthly installments of princi al
and interest on the fifteenth of each month, starting on the month immediately following the effective date
of the Note.
Any notices required or permitted to be given by the holder hereof to Maker pursuant to the
provisions of this Note shall be in writing and shall be either personally delivered or transmitted by first
class United States mail, addressed to Maker az the address designated below for receipt of notice (or at
such other address as Maker may, from time to time, designate in wilting to the holder hereof for receipt
of notices hereunder). Any such notice personally delivered shall be effective as of the date of delvery,
and any notice transmited by mail, in accordance with the foregoing provisions, slap be deemed to have
been given to and received by Maker as of the daze on which such notice was deposited with the United
States Postal Service, properly addressed and with postage prepaid.
This Note is also secured by and etrtitled to the benefits of all other security agreements, pledges,
collateral assignments, deeds of trust, guaranties, mortgages, assignments, and lien insmrments, if any, of
any kind executed by Maker or by any other party as security for any loans owing by Maker to the Lender.
Such lien instruments shall include those executed simultaneously herewith, those heretofore executed, and
[hose hereafter executed.
If any installment or payment of principal or interest of this Note is no[ paid when due or any
drawer, acceptor, endorser, guarantor, surety, accommodation party or other person now or hereafter
primarily or secondarily ]fable upon or for payment of all or any part of this Note (each hereinafter called
an "other liable party"} shall die, or become insolvent (however such insolvency may be evidenced); or if
any proceeding, procedure or remedy supplementary to or in enforcement of judgment shall be resorted tc
or commenced against Maker or any other fable party, or with respect to a~ property of a~+ of them; or
if any governmental authority or any court at the instance thereof shall take possession of any substantial
part of the property of or assume control over the affairs or operations of, or a receiver shall be appointed
for or take possession of the property of, or a writ or order of attachmem or garnishment shall be issued or
made against any of the property of Maker or any other liable party; or if any indebtedness for which
Maker or a~ other liable party is primarily or secondarily liable shall not be paid when due or shall
become due and payable by acceleration of maturity thereof, or if any evem or condition shall occur which
shall permit the holder of arty such indebtedness to declaze it due and payable upon the lapse of time,
giving of notice or otherwise; or if Maker or any other liable party (if other than a natural person) shall be
dissolved, wound up, liquidated or otherwise terminated, or a parry to any merger or consolidation without
the written consem of Lender; or if Maker or any other liable party shall sell substantially all or an integral
pomon of its assets without the written consent of Lender; or if Maker or arty other liable party fails to
furnish financial information requested by Lender; or if Maker or any other Iiable party furnishes or has
furnished a~ financial or other information or statements which are misleading in any respect; or if a
default occurs under any instntment now or hereafter executed in connection with or as security for this
Note; or any event occurs or condition exists which causes Lender to in good faith deem itself insecure or
in good faith believe the prospect of payment or performance by Maker or any other liable party under this
Note, under any ins[nunent or agreement executed in connection with or as security for this Note, or under
any other indebtedness of Maker or any other liable party to Lender is impaired; thereupon, at the option of
Lender, the principal balance and accrued interest of this Note and any and all other indebtedness of Maker
to Lender shall become and be due and payable forthwith without demand, notice of default, notice of
acceleration, notice of intent to accelerate the maturity hereof, notice of no~ayment, presentment, protest
or notice of dishonor, all of which are hereby expressly waived by Maker and each other Iiable party.
Lender may waive any default without waiving any prior or subsequent default.
If this Note is not paid at mahtriry whether by acceleration or otherwise, and is placed in the hands
of any attorney for collection, or suit is filed hereon, or prceeedings are had in probate, ban]¢ttptcy,
receivership, reorganization, arrangement or other legal proceedings for collection hereof, Maker and each
other liable party agree to pay Lender its collection costs, including court costs and a reasonable amount
for attorney's fees.
It is the intemion of Maker and Lender to conform strictly to applicable usury laws. Accordingly,
if the transaction contemplated hereby would be usurious under applicable law, then, in that event,
notwithstanding anything to the contrary herein or in any agreemem entered into in connection with or as
security for this Note, it is agreed as follows: (i) the aggregate of all consideration which constitutes
interest under applicable ]aw that is taken, reserved, contracted for, chazged or received under this Note or
under any of the other aforesaid agreements or otherwise in connection with this Note shall under no
circumstances exceed the maYirm~m amount of interest allowed by applicable law, and any excess shall be
credited on this Note by the holder hereof {or, if this Note shall have been paid in full, refunded to Maker);
(ii) in the event that maturity of this Note is accelerated by reason of an election by the holder hereof
resulting from any default hereunder or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never include more than fhe maximum
amount allowed by applicable law, and excess interest, if any, provided for in this Note or otherwise shall
be canceled automatically as of the date of such acceleration or prepaymem and, if theretofore prepaid,
shall be credited on this Note (or if this Note shall have been paid in full, refunded to Maker); and (iii) all
calculations of the rate of interest taken, reserved, contracted for, chu~ged or received under this Note or
under any of the other aforesaid agreements or otherwise in connecton with this Note, that aze made for
the purpose of determining whether such rate exceeds the maximum lawful rate shall be made, to the extent
pemutted by applicable law, by amortizing, prorating, allocating, and spreading such interest over Ste
emire term of the Loan evidenced by this Note (including all renewal and extended terms).
Maker may prepay all or any part of the principal of this Nate before maturity without penalty. No
partial prepayment shall reduce, postpone or delay the obligation of Maker to contimre paying the
tnstalhnents herein provided on their respective due dates following any such partial prepayment unfil this
Note is fully paid.
Y6@761 - 6:Ifibi1'A'
-2-
The Maker shall be directly and primarily liable for the payment of all sums called for hereunder;
and, except for notices specifically required rp be given by the holder. hereof to Maker pursuant to the
eazlier provisions of this Note, Maker and each other liable party hereby expressly waive demand,
presentment for paymem, notice of nonpayment, protest, notice of protest, noice of intention to accelerate
maturity, notice of acceleration of maturity, and all other notice, filing of suit and diligence in collecting
this Note or enforcing or handling any of the security therefor, and do hereby agree to any substitution,
exchange or release, in whole or in part, of any security here-for or the release of any other liable party,
and do hereby consent to any and all renewals or extensions from time to time, of this Note, or any part
hereof, either before or after maturity, all without any notice thereof to any of them and without affecting
or releasing the liability of any of them. Each holder hereof, in order to enforce payment of this Note by
any other liable party, shall be required to first institute suit or exhaust its remedies against Maker and to
enforce its rights against any security therefor prior to enforcing payment of this Note by any other liable
PaztY•
SIGNED AND AGREED TO on the _ day of , 2008.
a Texas
AC%NOWLEGE[vIENT
THE STATE OF TEXAS
COUNTY OF JEFFERSON r
BEFORE ME, TIIE UNDERSIGNED No[ary Public, on this day personally appeared
lmown to me to be the person whose name is subscribed to the
foregoing instmment, and acknowledged to me that he/she executed the same as the act and deed of
a Texas for the purposes. and consideration therein
expressed, and the Capacities therein stated.
GIVEN UNDER MY HAND .AND SEAL OF OFFICE, this the day of
200
Notary Public, State of Texas
M603'!61 - aWtit'A'
-7-
MAI~RS' ADDRESS FOR RECEIPT OP NOTICE:
a Texas
Texas 77
8602761- Fild6it'A'
_f-
EXHIBIT "B"
COMMERCIAL SECURITY AGREEMENT
Dated
Debtor s
2008
Secured Par
Orbital Insulation Corp. ("Orbits]") Port Arthur Economic Development
Co orafion ("PAEDC")
817 Houston Avenue 4173 39`" Street
Port Arthur, Texas 77642 Port Arthur, Texas 77642
~ucicumuct lrtc[[w [O aS --LBDLOI'" WnemeC One Or more) (hereinafter referred to as
"Secured Party")
FOR VALUE RECEIVED, the receipt and sufficiency of which is hereby ac]mowledged,
Debtor grants to Secured Party the security interest (and the pledges and assignments as applicable)
hereinafter set forth and agrees with Secured Party as follows:
A. OBLIGATIONS SECURED. The first priority lien and pledges and assignments as
applicable granted hereby are to secure punctual payment and performance of the following: (i) certain
Conditional Commercial Promissory Note of even date herewith in the original principal sum of
$150,000, executed by Debtor and payable [o the order of Secured Party; and any and all extensions,
renewals, modifications and reartangemenu thereof,. (ii) certain obligations of Debtor to Secured Party
under that certain Economic Incentive Contract and Loan Agreement of even date and all extensions,
renewals, modifications and rearrangements thereof, and (iii) any and all other indebtedness, liabilities
and obligations whatsoever and of whatever nature of Debtor [o Secured Party whether direct or
indirect, absolute or contingent, primary or secondary, due or to become due and whether now existing
or hereafter arising and howsoever evidenced or acquired, whether joint or several, or join[ and several
(all of which aze herein separately and collectively referred to as the "Obligations"). Debtor
acla~owledges that the security interest (and pledges and assignments as applicable) hereby granted shall
secure all future advances as well as any and all other indebtedness, liabilities and obligations of Debtor
to Secured Parry whether now in existence or hereafter azising.
B. USE OF COLLATERAL. Debtor represents, warrants and covenants that Collateral
will be used by the Debtor primarily for business use, unless otherwise specified as follows: Personal,
family or household purposes; Farming operations.
C. DESCRIPTION OF COLLATERAL. Debtor hereby grants to Secured Pazty a first
priority lien in (and hereby pledges and assigas as applicable) and agrees that Secured Party shall
continue to have a security interest in (and a pledge and assignment of as applicable}, the following
property, to wit: (DEBTOR TO IIQITIAL APPROPRIATE BLANKS)
~ All Accounts. A security interest in all accounts now owned or existing as well as any and
ali that may hereafter arise or be acquired by Debtor, and all the proceeds and products thereof,
including without limitation, all notes, drafts, acceptances, instruments and chattel paper azising
therefrom, and all returned or repossessed goods azising from or relating to any such accounts,
or other proceeds of any sale or other disposition of inventory.
_^ Specific Accounts. A security interest in the supervised account at Texas State Bank,
including earned interest, described by the Deposit Agreement between the Financial
Institution, the Debtor and the Secured Party. Such agreemem attached or which may hereafrer
be attached hereto.
^ All Inventory. A security interest in all of Debtor's inventory, including all goods,
merchandise, raw materials, goods in process, finished goods and other tangible personal
property, wheresoever located, now owned or hereafter acquired and held for sale or ]ease or
furnished or to be furnished under contracts for service or used or consumed in Debtor's
business and all additions and accessions thereto and contracts with respect thereto and all
documents of title evidencing or representing any part thereof, and all products and proceeds
thereof, including, without Iimita6on, all of such which is now or hereafter located at the
following locations: (give locations)
^ All Fixtures. A security interest in all of Debtor's fixtures and appurtenances thereto, and such
other goods, chattels, fixtures, equipment and personal property affixed or in any manner
attached to the real estate and/or building(s) or structure(s), including all additions and
accessions thereto and replacements thereof and articles in substitution therefor, howsoever
attached or affixed, located a[ the following locations: (give legal address)
The record owner of the real estate is:
^ All Equipment. A security interest in all equipment of every nature and description whatsoever
now owned or hereafter acquired by Debtor including all appurtenances and additions thereto
and substitutions therefor, wheresoever ]orated, including all tools, pazts and accessories used
in connection therewith.
_^ General Intangibles. A security interest in all general intangibles and other personal property
now owned or hereafrer acquired by Debtor other than goods, accounts, chattel paper,
documents and instmments.
_^ Chattel Paper. A security interest in all of Debtor's interest under chattel paper, lease
agreements and other instruments or documents, whether now existing or owned by Debtor or
hereafter arising or acquired by Debtor, evidencing both z debt and security interest in or lease
of specific goods.
^ Farm Products. A security interest in alt of Debtor's interest in any and all crops, livestock
and supplies used or produced by Debtor in farming operations wheresoever located: Debtor's
residence is in the county shown at the beginning of this Agreement and Debtor agrees to notify
promptly Secured Party of any change in the county of Debtor's residence; al] of Debmr's
crops or livestock are presently located in the following counties: (give counties)
_^ Securities. A pledge and assignment of and security interest in the securities described below,.
together with all instruments and general intangibles related thereto and all monies, income;
proceeds and benefits attributable or accruing to said property, including, but not limited to, all
stock rights, options, rights to subscribe, dividends, liquidating dividends, stock dividends,
dividends paid in stack, new security or other properties or benefits to which the Debtor is or
may hereafrer become entitled to receive on account of said property. (give description)
A6a2'r61 - ERhibit'8'
.q.
Certificates of Deposit. A pledge and assignment of and security interest in all of Debtor's
interest in and to the certificates of deposit described below and instruments related thereto, and
all renewals or substitutions therefor, together with all monies, income, interest, proceeds and
benefits attributable or accruing to said property or to which Debtor is or may hereafter be
entitled to receive on account of said property. (give description)
~ Instrtmme~s. A pledge and assignment of and security interest in all of Debtor's now owned or
existing as well as hereafter acquued or arising instmments and documents.
X ^ Other. A subordinate lien on all of Debtor's interest, now owned or hereafer acquired, in
and to the Equipment described in the Asset List attached as Exhibit °F" to that certain
Economic Incentive Contract and Loan Agreement between Debtor and Secured Party and
attached to this Collateral Security Agreement.
The term "Collateral" as used in this Agreement shall mean and include, and the security
interest (and pledge and assignment as applicable) shall cover, all of the foregoing property, as well as
any accessions, additions and attachments thereto and the proceeds and products thereof, including
without limitation, all cash, general intangibles, accounts, inventory, equipmem, fixtures, farm
products, notes, drafts, acceptances, securities, instruments, chattel paper, insurance proceeds payable
because of loss or damage, or other property, benefits or rights azising therefrom, and in and to all
returned or repossessed goods arising from or reiating to any of the property described herein or other
proceeds of any sale or other disposition of such property.
As additional security for the punctual payment and performance of the Obligations, and as part
of the Collateral, Debtor hereby grants to Secured Party a security interest in, and a pledge and
assignment of, any and all money, property, deposit accounts, accounts, securities, documents, chattel
paper, claims, demands, instruments, items or deposits of the Debtor, and each of them, or to which
any of them is a party, now held or hereafter coming within Secured Party's custody or control,
including without limitation, all certificates of deposit and other depository accounts, whether such have
matured or the exercise of Secured Party's rights results in loss of interest or principal or other penalty
on such deposits, but excluding deposits subject to tax penalties if assigned. Without prior notice to or
demand upon the Debtor, Secured Party may exercise its rights granted above at any time when a
default has occurred or Secured Party deems itself insecure. Secured Pazty's rights and remedies under
this pazagraph shall be in addition to and cumulative of any other rights or remedies at law and equity,
including, without limitation, any rights of set-off to which Secured Party may be entitled.
D. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR. Debtor
represents and wazrants as follows:
1. Ownership; No Enctanbrattces: Except for the security interest (and pledges and
assignments as applicable) granted hereby, the Debtor is, and as to any property acquired after the date
hereof which is included within the Collateral, Debtor will be, the owner of all such Collateral free and
clear from all chazges, liens, security interests, adverse claims and encumbrances of any and every - --
nature whatsoever.
2. No Financing Statements: There is no financing statement or similaz filing now on file
in any public office covering any part of the Collateral, and Debtor will no[ execute and there will not
be on file in any public office any financing statement or similaz filing except the financing statements
filed os to be filed in favor of Secured Party.
6fi@761-FiJU3i1 •a• •3-
3. Accuracy of Information: Alt information furnished to Secured Party concerning
Debtor, the Collateral and the Obligations, or otherwise for the purpose of obtaining or maintaining
credit, is or will be at the time the same is furnished, accurate and complete in all material respects.
4. Authority: Debtor has full right and authority to execute and perform this Agreement
and to create the security interest (and pledges and assignment as applicable) created by this Agreement.
The making and performance by Debtor of this Agreement will not violate any articles of incorporation,
bylaws or similaz document respecting Debtor, any provision of law, any order of court or
govemmental agency, or any indenture or other agreement to which Debtor is a party, or by which
Debtor or any of Debtor's property is bound, or be in conflict with, result in a breach of or constitute
(with due notice and/or lapse of time) a default under any such indenmre or other agreement, or result
in the creation or imposition of any chazge, lien, security interest, claim or encumbrance of any and
every namre whatsoever upon the Collateral, except as contemplated by this Agreement.
5. Addresses: The address of Debtor designated at the beginning of this Agreement is
Debtor's place of business if Debtor has only one place of business; Debtor's chief executive office if
Debtor has more than one place of business; or Debtor's residence if Debtor has no place of business.
Debtor agrees not to change such address without advance written notice to Secured Party.
E. GENERALCOVENANTS. Debtor covenants and agrees as follows:
1. Operation of the Collateral: Debtor agrees to maintain and use the Collateral solely in
the conduct of its own business, in a careful and proper manner, and in conformity with all applicable
permits or licenses. Debtor shall comply in all respects with all applicable statutes, laws, ordinances
and regulations. Debtor shall not use the Collaieral in any unlawful. manner or for any unlawful
purposes, or in any manner or for any purpose that would expose the Collateral to unusual risk, or to
penalty, forfeiture or capture, or that would render inoperative any insurance in connection with the
Collateral.
2. Condition: Debtor shall maintain, service and repair the Collateral so as to keep it in
good operating condition. Debtor shall replace within a reasonable time all parts that may be. wom out,
lost, destroyed or otherwise rendered unfit for use, with appropriate replacement parts. Debtor shall
obtain and maintain in good standing at all times all applicable permits, hcenses, registrations and
certificates respecting the Collateral.
3. Assessments: Debtor shall promptly pay when due all taxes, assessments, licettse fees,
registration fees, and governmental chazges levied or assessed against Debtor or with respect to the
Collateral or any part thereof.
4. No Encumbrances: Debtor agrees not to suffer or permit any chazge, lien, security
interest, adverse claim or encumbrance of any and every nature whatsoever against the Collateral or
any part thereof.
5. No Removal: Except as otherwise provided in this Agreement, Debtor shall not remove
the Collateral from the county or countie_ s designated at the beginning of this Agreement without
Secured Party's prior written consent.
0602T61 - Ediibit'B" - "4'
6. No Transfer: Except as otherwise provided in [Iris Agreement with respect to inventory,
Debtor shall not, without the prior written consent of Secwed Party, sell, assign, transfer, lease,
charter, encumber, hypothecate or dispose of the Collateral, or any part thereof, or interest therein, or
offer to do any of the foregoing.
7. Notices and Reports; Debtor shad promptly notify Secured Party in writing of any
change in the name, identity or stmcture of Debtor, any change, lien, secwity interest, claim or
encumbrance asserted against the Collateral, any litigation against Debtor or the Collateral, any thefr,
loss, injury or similaz incident involving the Collateral, and any other material matter adversely
affecting Debtor or the Collateral. Debtor shall furnish such other reports, information and data
regazding Debtor's fmancial condition and operations, the Collateral and such other matters as Secured
Party may request from time to tune.
8. Landlord's Waivers: Debtor shall famish to Secured Pazry, if requested, a landlord's
waiver of all liens with respect to any Collateral covered by this Agreement that is or may be ]orated
upon Leased premises, such landlord's waivers to be in such fotm and upon such terms as aze acceptable
to Secured Party.
9. Additional Filings: Debtor agrees to execute and deliver such financing statement or
statements, or amendments thereof or supplemenu [hereto, or other documents as Secured Party may
from time to time require in order to comply with the Texas Uniform Commercial Code (or other
applicable state law of the jurisdiction where any of the Collateral is located) and to preserve and
protect the Secwed Party's rights to the Collateral.
10. Protection of Collateral: Secured Party, at its option, whether before or after default,
but without any obligation whatsoever to do so, may (a) dischazge taxes, claims,- chazges, liens,
security interests, assessments or other encumbrances of any and every nature whatsoever at any time
levied, placed upon or asserted against the Collateral, (b) place and pay for inswance on the Collateral,
including insurance that only protects Secured Party's interest, (c) pay for the repair, improvement,
testing, maintenance and preservation of the Collateral, (d) pay any filing, recording, regishation,
licensing or certification fees or other fees and chazges related to the Collateral, or (e) take any other
action to preserve and protect the Collateral and Secured Party's rights and remedies under this
Agreement as Secured Party may deem necessary or appropriate- Debtor agrees that Secured Party shall
have no duty or obligation whatsoever to take any of the foregoing acflon. Debtor agrees to promptly
reimbwse Secwed Party upon demand for any payment made or any expense incurred by the Secured
.Party pwsuant to this authorization. These. payments and expenditwes, together with interest thereon
from date incwred until paid by Debtor at the maximum contract rate allowed under applicable laws,
which Debtor agrees to pay, shall constitute additional Obligations and shall be secured by and entitled
to the benefits of this Agreement.
11. Inspection: Debtor shall at ai] reasonable times allow Secured Party by or through any
of its officers, agents, attorneys or accountants, to examine the Collateral, wherever located, and to
examine and make extracts from Debtor's books and records.
12. Fwtlter Asswances: Debtor shall do, make, procure, execute and deliver all such
additional and further acts, things, deeds, interests and assurances as Secured Party may require from
time so time to protect, assure and enforce Secured Party's rights and remedies.
A'602761 - Exhibit'B'
-S-
13. Insurance: Debtor shall have and maintain insurance at all times with respect to all
tangible Collateral insuring against risks of fire (including so-called extended coverage), Utefr and other
risks as Secured Pazty may require, containing such terms, in such form and amounts and written by
such companies as may be satisfactory to Secured Party, all of such insurance to contain toss payable
clauses in favor of Secured Party as its interest may appeaz. All policies of insurance shall provide for
ten (10) days written minimum cancellation notice to Secured Party and at the request of Secured Pazry
shall be delivered to and held by it. Secured Party is hereby authorized to act as attorney for Debtor in
obtaining, adjusting, settling and canceling such insurance and endorsing any drafts or instmments.
Secured Party shall be authorized to apply the proceeds from any insurance to the Obligations secured
hereby whether or not such Obligations are then due and payable. Debtor specifically authorizes
Secured Party to disclose information from the policies of insurance to prospective insurers regarding
the Collateral.
14. Additional Collateral; If Secured Party should at any time be of the opinion that the
Collateral is impaired, not sufficient or has declined or may decline in value, or should Secured Parry
deem payment of the Obligations to be insecure, then Secured Party may call for additional security
satisfactory to Secured Party, and Debtor promises to furnish such additional security forthwith. The
call for additional security may be oral, by telegram, or United States mail addressed to Debtor, and
shall not affect any other subsequent right of Secured Party to exercise the same.
F. ADDITIONAL PROVISIONS REGARDING ACCOUNTS. The foIIowing provisions
shall apply to all accounts included within the Collateral:
1. Definitions: The term "account", as used in [his Agreement, shall have the same
meaning as set forth in the Uniform Commercial Code of Texas in effect as of the date of execution
hereof, and as set forth in any amendment to .the Uniform Commercial Code. of Texas to became
effective after the date of execution hereof, and also shall include all present and future notes,
instruments, documents, general intangibles, drafts, acceptances and chattel paper of Debtor, and the
proceeds thereof.
2, Additional Warranties: As of the time any account becomes subject to the security
interest (or pledge or assignment as applicable) granted hereby, Debtor shall be deemed further to have
wazranted as to each and all of such accounts as follows: (a) each account and all papers and documents
relating thereto aze genuine and in all respects what they purport to be; (b) each account is valid and
subsisting and arises out of a bona fide sale of goods sold and delivered to, or out of and for services
theretofore actually rendered by the Debtor to the account debtor named in the account; (c) the amount
of the account represented as owing is the correct amount actually and unconditionally owing except for
'normal cash discounts and is not subject to any setoffs, credits, defenses, deductions or countercharges;
and (d) Debtor is the owner thereof free and cleaz of any chazges, liens, security interests, adverse
claims and encumbrances of any and every nature whatsoever.
3. Collection of Accounts: Secured- Party shall have the right in its own name or in the
name of the Debtor, whether before or after default, to require Debtor forthwith to transmit alt
proceeds of collection of accounts to Secured Party, [o notify any and all account debtors to make
payments of [he accounts directly to Secured Party, to demand, collect, receive, receipt for, sue for,
compound and give acquittal for, any and all amounts due or to become due on the accounts and to
endorse the name of the Debtor on all commercial paper given in payment or part payment thereof, and
in Secured Party's discretion to file any claim or take any other action or proceeding that Secured Party
may deem necessary or appropriate to protect and preserve and realize upon the accounts and related
p6@761 - Exh3it'B"
-6-
Collateral. Unless and until Secured Party elects to collect accounts, and the privilege of Debtor to
collect accounts is revoked by Secured Party in writing, Debtor shall continue to collect accounts,
account for same to Secured Party, and shall not commingle the proceeds of collection of accounts with
any funds of the Debtor. In order to assure collection of accounts in which Secured Party has a security
interest (or pledge or assignment of as applicable) hereunder, Secured Party may notify the post office
authorities to change [he address for delivery of mail addressed to Debtor to such address as Secured
Party may designate, and to open and dispose of such mail and receive the collections of accounts
included herewith. Secured Party shall have no duty or obligation whatsoever to collect any account, or
to take any other action to preserve or protect the Collateral; however, should Secured Party elect to
collect any account or take possession of any Collateral, Debtor releases Secured Party from any claim
or claims for loss or damage azising from any act or omission in wnnection therewith.
4. Identificafion and Assig~em of Atxounts: Upon Secured Party's request, whether
before or after default, Debtor shall take such action and execute and deliver such documents as
Secured Party may reasonably request in order to identify, confirm, mark, segregate and assign
accounts and to evidence Secured Party's interest in same. Without limitation of the foregoing, Debtor,
upon request, agrees to assign accounts to Secured Party, identify and mark accounts as being subject to
[he security interest (or pledge or assignment as applicable) granted hereby, mark Debtor's books and
records to reflect such assignments, and forthwith to transmit to Secured Party in the form as received
by Debtor any and all proceeds of collection of such accounts.
5. Account Reports: Debtor will deliver to Secured Party, prior to the tenth (10) day of
each month, or on such odter frequency as Secured Party may request, a written report in form and
content satisfactory to Secured Party, showing a listing and aging of accounts and such other
information as Secured Pazty may request from time to time. Debtor shall immediately notify Secured
Party of the assertion by any account debtor of any set-off, defense or claim regazding an account or
any other matter adversely -affecting an account.
6. Segregation of Returned Goods: Returned or repossessed goods azising from or relating
to any accounts included within the Collateral shag if requested by Secured Party be held sepazate and
apart from any other property. Debtor shall as often as requested by Secured Party, but not less often
than weekly even though no special request has been made, report to Secured Party the appropriate
identifying information with respect to any such returned or repossessed goods relating to accounts
included in assignments or identifications made pursuant hereto.
G. ADDITIONAL PROVLSIONS REGARDING INVENTORY. The following provisions
shall apply to all invemory included within the Collateral:
1. Inventory Reports: Debtor will deliver to Secured Party, prior to [he temp (10th) day of
each month, or on such other frequency as Secured Party may request, a written report in form and
content satisfactory to Secured Party, with respect to the preceding month or other applicable period,
showing Debtor's opening invemory, inventory acquired, inventory sold, inventory returned, inventory
used in Debtor's business, closing inventory, any other inventory not within the preceding categories,
and such other information as Secured Party may request from time to time. Debtor shall immediately
notify Secured Party of any matter adversely affecting the inventory, including, without limitation, any
event causing loss or depreciation in the value of the inventory and the amount of such possible loss or
depreciation.
P6627b1 - aWbit'B" - ~ -
2. Location of Im~entory: Debtor will promptly notify Secured Parry in writing of any
addition to, change in or discontinuance of its place(s) of business as shown in this agreement, the
places at which inventory is located as shown herein, the location of its chief executive office and the
location of the office where it keeps its records as set forth herein. All Collateral will be located at the
place(s) of business shown at the beginning of this agreement as modified by any written notice(s) given
pursuant hereto.
3. Use of Inve~ory: Unless and until the privilege of Debtor to use inventory in the
ordinary course-of Debtor's business is revoked by Secured Parry in the even[ of default or if Secured
Party deems itself insecure, Debtor may use the inventory in any manner not inconsistent with this
Agreement, may sell that part of the Collateral consisting of inventory provided that all such sales aze
in the ordinary course of business, and may use and consume any raw materials or supplies that aze
necessary in order to carry on Debtor's business. A sale in the ordinary course of business does not
include a transfer in paraial or total satisfaction of a debt.
4. Accounts as Proceeds: All accounts that aze proceeds of the inventory included within
the Collateral shall be subject to all of the terms and provisions hereof pertaining to accounts.
5. Protection of Inventory: Debtor shall take all action necessary to protect and preserve
the inventory.
H. ADDITIONAL PROVISIONS REGARDING SECURITIES AND SIMILAR
COLLATERAL. The following provisions shall apply to all securities and similar property included
within the Collateral:
1. Additional Warranties: As to each and all securities and similaz property included
within the Collateral (mcluding securities hereafrer acquired that aze part of [he Collateral), Debtor
further represents and warrants (a5 of the time of delivery of same to Secured Party) as follows: (a)
such securities are genuine, validly issued and outstanding, fully paid and non-. assessable, and aze not
issued in violation of the preemptive rights of any person or of any agreement by which the issuer or
obligor thereof ar Debtor is bound; (b) such securities aze not subject to any interest, option or right of
any third person; (c) such securities are in compliance with applicable law concerning form, content
and manner of prepazation and execution; and (d) Debtor acquired and holds the securities in
compliance with all applicable laws and regulations.
2. Dividends atui Proceeds: Any and all payments, dividends, other distributions
(including stock redemption proceeds), or other securities in respect of or in exchange for the
Collateral, whether by way of dividends, stock dividends, recapitalizations, mergers, consolidations,
stock splits, combinations or exchanges of shares or otherwise, received by Debtor shall be held by
Debtor in trust for Secured Party and Debtor shall immediately deliver same to Secured Party to be held
as pazt of the Collateral. Debtor may retain ordinary cash dividends unless and until Secured Party
requests that same be paid and delivered to Secured Party (which Secuted Party may request either
before or after default).
3. Collections: Secured Party shall have the right at any time and from time to time
(whether before or after default) to notify and dtrect the issuer or obligor to make all payments,
dividends and distributions regarding the Collateral duectly to Secured Party. Secured Party shall have
the authority to demand of the issuer or obligor, and to receive and receipt for, any and all payments,
dividends and other distributions payable in respect thereof, regazdless Of the medium in which paid
X60276[ • ExldbiF'B'
•S-
and whether they are ordinary or extraordinary. Each issuer and obligor malting payment to Secured
Party hereunder shall be fully protected in relying on the written statement of Secured Party that it then
holds a security interest which entitles it to receive such payment, and the receipt by Secured Party for
such payment shall be full acquittance therefor to the one making such payment.
4. Voting Rights: Upon default, or if Secured Party deems itself insecure, Secured Party
shall have the right, at its discretion, to transfer to or register in the name of Secured Party or any
nominee of Secured Party any of the Collateral and/or to exercise any or all voting rights as to any or
all of the Collateral. For such purposes, Debtor hereby names, constitutes and appoints the Presidem or
any Vice President of Secured Party as Debtor's proxy in the Debtor's name, place and stead to vote
any and all of the securities, as such proxy may elect, for and in the name, place and stead of Debtor,
as to all matters coming before shazeholders, such proxy to be irrevocable and deemed coupled with an
interest. The rights, powers and authority of said proxy shall remain in full force and effect, and shall
not be rescinded, revoked, terminated, amended or otherwise modified, until all Obligations have been
fully satisfied.
5. No Duty: Secured Party shall never be liable for its failure to give notice to Debtor of
default in the payment of or. upon the Collateral: Secured Party shall have no duty to fix or preserve
rights against prior parties to the Collateral and shall never be liable for its failure to use diligence to
collect any amount payable in respect to the Collateral, but shall be liable only to account to Debtor for
what it may actually collect or receive thereon. Without limiting the foregoing, it is specifically
understood and agreed that Secured Pazry shall have no responsibility for ascertaining any maturities,
calls, conversions, exchanges, offers, tenders, or similaz matters relating to any of the Collateral or for
informing Debtor with respect to any of such matters (irrespective of whether Secured Patty actually
has, or may be deemed to have, knowledge thereat). The foregoing provisions of this pazagraph shall
he fully applicable to all securities or similar property held in pledge hereunder, irrespective of whether
Secured Party may have exercised any right to have such securities or similar-property registered in its
name or in the name of a nonunee.
6. Further Assurances: Debtor agrees to execute such stock powers, endorse such
instrutnents, or execute such additional pledge agreements or other documenu as may be required by
the Secured Parry in order effectively to grant to Secured Party the security interest in (and pledge and
assignment ot) the Collateral and to enforce and exercise Secured Party's rights regazding same.
7. Securities Laws: Debtor hereby agrees to cooperate fully witlt Secured Party in order to
permit Secured Party to sell, at foreclosure or other private' sale, the Collateral pledged hereunder.
Specifically, Debtor agrees to fully comply with the securities laws of the United States and of the State
of Texas and to take such action as may be necessary to permit Secured Party to sell or otherwise
transfer the securities pledged hereunder in compliance with such laws. Without limiting the foregoing,
Debtor, at its own expense, upon request by Secured Party, agrees to effect and obtain such
registrations, filings, statemems, rulings, consents and other matters as Secured Pazty may request.
8. Power of Attorney; Debtor hereby makes,. constitutes, and appoints Secured Party or its
nominee, its true and ]awful attorney in fact and in its name, place and stead, and on its behalf, and for
its use and benefit to complete, execute and file `with the United States Securities and Exchange
Commission one or more notices of proposed sale of securities pursuant to Rule 144 under [he
Securities Act of 1433 and/or any similar filings or notices with any applicable state agencies, and said
attorney in fact shall have full power and authority to do, take and perform all and every act and thing
whatsoever requisite, proper or necessary to be done, in the exercise of the rights and powers herein
9fio2761- Frltihit 'B"
-q_
granted, as fully to al] intents and purposes as Debtor might or could do if personally present. This
power shall be irrevocable and deemed coupled with an interest. The rights, powers and authority of
said attorney in fact herein granted shall commence and be in full force and effect from the date of this
agreement, and such rights, powers and authority shall remain in full force and effect, and this power
of attorney shall not be rescinded, revoked, terminated, amended or otherwise modified, until all
Obligations have been fully satisfied.
9. Private Sales: Because of the Securities Act of 1933, as amended, or any other laws or
regulations, there may be legal restrictions or limitations affecting Secured Party in any attempts to
dispose of certain portions of the Collateral in the enforcement of its rights and remedies hereunder.
For these reasons Secured Party is hereby authorized by Debtor, but not obligated, in the event any
default hereunder, to sell all or any part of the Collateral at private sale, subject to inveshnent letter or
in any other manner which will not require the Collateral, or any part thereof, to be registered in
accordance with the Securities Act of 1933, as amended, or the rules and regulations promulgated
thereunder, or any other laiv or regulation. Secured Patty is also hereby authorized by Debtor, but not
obligated, to take such actions, give such notices, obtain such rulings and consents, and do such other
things as Secured Party may deem appropriate in the event of a sale or disposition of any of the
Collateral. Debtor cleazly
understands that Secured Party may in its discretion approach a restricted number of potential
purchasers and that a sale under such circumstances may yield a lower price for the Collateral or any
part or parts thereof than would otherwise be obtainable if same were registered and sold in the open
market, and Debtor agrees that such private sales shall constitute a commercially reasonable method of
disposing of the Collateral.
[. ADDITIONAL PROVISIONS REGARDING CERTIFICATES OF DEPOSTT AND
SIMILAR COLLATERAL. The following provisions shall apply to certificates of deposit and sintilaz
property included within the Collateral:
1. Collection of Deposits: Debtor agrees that Secured -Party may, at any time (whether
before or after default) and in its sole discretion, surrender for payment and obtain payment of any
portion of the Collateral, whether such have matured or the exercise of Secured Party's rights results in
loss of interest or principal or ocher penalty on such deposits, and, in connection therewith, cause
payment to tie made directly to Secured Party.
2. Notice to Third Party Isstter; With regard to any certifcates, of deposit or sintilaz
Collateral for which Secured Party is not the issuer, Debtor agrees to notify the issuer or obligor of the
interests hereby granted to Secured Patty and to obtain from such issuer or obligor acknowledgement of
the interests in favor of Secured Parry and the issuer's or obligor's agreement to waive in favor of
Secured Pazry any and all rights of set-off or similaz rights or remedies to which such issuer or obligor
may be entitled, and, in connection therewith, to execute and cause the issuer or obligor to execute, any
and alT acknowledgments, waivers and other agreements in such form and upon such terms as Secured
Party may request.
3. Proceeds: Any and all replacement or renewal certificates, instruments, or other
benefits or proceeds related to the Collateral that aze received by Debtor shall be held by Debtor in tmst
for Secured Pazty and immediately delivered to Secured Party to be held as part of the CollateraU.
4. Na Duty: Secured Party shall never be liable for its failure to give notice to Debtor of
default in the payment of or upon the Collateral. Secured Party shall have no dory to fu or preserve
p602761 - E~h[bi['B'
-10-
rights against prior parties to the Collateral and shall never be liable for its failure to use diligence to
collect any amount payable in respect to the Collateral, but shall be liable only to account to Debtor for
what it may actually collect or receive thereon. Without limiting the foregoing, it s specifically
understood and agreed that Secured Party shall have no responsibility for ascertaining any maturities or
similar matters relating to any of the Collazeral or for informing Debtor with respect to any of such
matters (irrespective of whether Secured Party actually has, or may be deemed, to have, knowledge
thereof).
J. EVENTS OF DEFAULT. Debtor shall be in default hereunder upon the happening of
any of the following events or conditions: (i) non-payment when due (whether by acceleration of
maturity or otherwise) of any payment of principal, interest or other amount due on any Obligation; (ii)
the occurrence of any event which under the terms of any evidence of indebtedness, indenture, loan
agreement, security agreemem or, similar instrument permits the acceleration of maturity of any
obligation of Debtor (whether to Secured Party or to others); (iii) any representation or warranty made
by Debtor to Secured Party in eonnec[ion with [Iris Agreement, the Collateral or the Obligations, or in
any statements or certificates, proves incorrect in any material respect as of the date of the making or
the issuance thereof; (iv) default occurs in the observance or performance of, or if Debtor fails to
famish adequate
evidence of performance of, any provision of this Agreement or of any note, assignment, transfer, other
agreement, document or instrument delivered by Debtor to Secured Party in connection with this
Agreement, the Collateral or the Obligations; (v) death, dissolution, liquidation, termination. of
existence, insolvency, business failure or winding-up of Debtor or any maker, endorser, guarantor,
surety or other party liable in any capacity for any of the Obligations; (vi) the commission of an act of
bankruptcy by, or the application for appointment of a receiver or any other legal custodian for any part
of the property of, assignment for the benefit of creditors by, or the commencement of any proceedings
under any bankmptcy, azrangement, reorganization, insolvency or similar laws for the relief of debtors
by or against, the Debtor or any maker, endorser, guarantor, surety or other party primarily or
secondarily liable for any of the Obligations: (vii) the Collateral becomes, in the judgment of Secured
Pazty, impaired, unsatisfactory or insufficient in character or value; or (viii) the filing of any levy,
attachment, execution, garnishment or other process against the Debtor or any of the Collateral or any
maker, endorser, guarantor, surety or other party liable in any capacity for any of the Obligations.
K. REMEDIES: Upon the occurrence of an event of default, or if Secured Party deems
payment of the Obligations to be insecure, Secured Party, at its option, shall be entitled to exercise any
one or more of the following remedies (all of which are cumulative):
1. .Declare Obligations Dne: Secured Party, at its option, may declare the Obligations or
any part thereof immediately due and payable, without demand, notice of intention to accelerate, notice
of acceleration, notice of non-payment, presentment, protest, notice of dishonor, or any other notice
whatsoever, all of which are hereby waived by Debtor and any maker, endorser, guarantor, surety or
other party liable in any capacity for any of the Obligations.
2. Remedies: Secured party shall have al! of the rights and remedies provided for in this
Agreement and in any other agreements executed by Debtor, the rights and remedies Of the Uniform
Commercial Code of Texas, and any and all of the rights and remedies at law and in equity, all of
which shall be deemed cumulative. Without limiting the foregoing, Debtor agrees that Secured Party
shall have the right to: (a) require Debtor to assemble the Collateral and make it available to Secured
Party at a place designated by Secured Party that is reasonably convenient m both parties, which Debtor
agrees to do; (b) peaceably take possession of the Collateral and remove same, with or without judicial
A602761 - Exlulit'B'
-11-
process; (c) without removal, render equipment included within the Collateral unusable, and dispose of
the Collateral on the Debtor's premises; (d) sell, ]ease or otherwise dispose of the Collateral, at one or
more locations, by public or private proceedings for cash or credit, without assumption of credit risk;
and/or (e) whether before or after default, collect and receipt for, compound, compromise, and settle,
and give releases, discharges and acquittances with respect to, any and all amounts owed by any person
or entity with respect to the Collateral. Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized mazket, Secured Party will send
Debtor reasonable notice of the time and place of any public sale or of the time after which any private
sale or other disposition will be made. Any requirement of reasonable notice to Debtor shall be met if
such notice is mailed, postage prepaid, to Debtor at the address of Debtor designated at the beginning
of this Agreement, at least five (5) days before the day of any public sale or at ]east five (5) days before
the time after which any private sale or other disposition will be made.
3. Expenses: Debtor shall be liable for and agrees to pay the reasonable expenses incurred
by Secured Party in enforcing .its rights and remedies, in retaking, holding, testing, repairing,
improving, selling, ]easing or disposing of the Collateral, or like expenses, including, without
limitation, attorneys' fees and legal expenses incurred by Secured Party. These expenses, together with
interest thereon from date incurred until paid by Debtor at the maximum contract rate allowed under
applicable laws, which Debtor agrees [o pay, shall constitute additional Obligations and shall be secured
by and entitled tc the benefits of this Agreement.
4. Proceeds, Surplus, Deficiencies: Proceeds received by Secured Party from disposition
of the Collateral shall be applied toward Secured Party's expenses and other Obligations in such order
or manner as Secured Party may elect. Debtor shall be entitled to any surplus if one results after lawful
application of the proceeds. Debtor shall remain liable for any deficiency.
5. Remedies Cumulative: The rights and remedies of Secured Party are cumulative and the
exercise of any one or more of the rights or remedies shall not be deemed an election of rights or
remedies or a waiver of any other right or remedy. Secured Party may remedy any default and may
waive any default without waiving the default remedied or without waiving any other prior or
subsequent default.
L. OTHER AGREEMENTS.
1. Savings Clause: Notwithstanding any provision to the contrary herein, or in any of the
documents evidencing the Obligations or otherwise relating thereto, no such provision shall require the
payment or permit the collection of interest in excess of the maximum permitted by applicable usury
laws. If any such excessive interest is so provided for, then in such event (i) the provisions of this
paragraph shall govern and control; (ii) neither the Debtor nor his heirs, legal representatives,
successors or assigns or any other party liable for. the payment thereof, shall be obligated to pay the
amount of such interest to the extent that is in excess of the maximum amount permitted by ]aw; (iii)
any such excess interest that may have been collected shall be, at the option of the holder of the
instrument evidencing the Obligations, either applied as a credit against the then unpaid principal
amount thereof or refunded to the maker thereof; and (iv) the effective rate of interest shall be
automatically reduced to the maximum lawful rate under applicable usury laws as now or hereafter
construed by the courts having jurisdiction.
2. Joint and Several Responsibility; If this Security Agreement is executed by more than
Tone Debtor, the obligations of all such Debtors shall be joint and several.
d6@76L - Fafi'hi4'B'
-12-
3. Waivers: Debtor and any maker, endorser, guarantor, surety or other party liable in
any capacity respecting the Obligations hereby waive demand, notice of intention to accelerate, notice
of acceleration, notice of non-payment, presentment, protest, notice of dishonor and_any other similaz
notice whatsoever.
4. Severability: Any provision hereof found to be invalid by courts having jurisdiction
shall be invalid only with respect to such provision (and then only to the extern necessary to avoid such
invalidity). The offending provision shall be modified to the maximum extent possible to confer upon
Secured Party the benefits intended thereby. Such provision as modified and the remaining provisions
hereof shall be constmed and enforced to the same effect as if such
offending provision (or portion thereof) had not been contained herein, to the maximum extent possible.
5. Use of Copies: Any carbon, photographic or other reproduction of any financing
statement signed by Debtor is sufficient as a financing statement for all purposes, including without
limitation, filing in any state as may be permitted by the provisions of the Uniform Commercial Code
of such state.
6. Relationship to Other APrermenrc; This Security Agreement. and the security interests
(and pledges and assignments as applicable) herein granted aze in addition to (and not in substitution,
novation or dischazge ot) any and all prior or contemporaneous security agreements, security interests,
pledges, assignments, liens, rights, titles or other interests in favor of Secured Party or assigned to
Secured Party by others in connection with the Obligations. All lights and remedies of Secured Party in
all such agreements are cumulative, but in the event of actual conflict in temts and conditions; the temts
and conditions of the latest security agreement shall govern and control.
7. Notices: Any notice or demand given by Secured Party to Debtor in connection with
this Agreement, the Collateral or the Obligations, shall be deemed given and effective upon deposit in
the United States mail, postage prepaid, addressed to Debtor at the address of Debtor designated at the
beginning of this Agreetent. Actual notice to Debtor shall always be effective no matter how given or
received.
8. Headings a~ Gender: Paragraph headings in this Agreemeut aze for convenience only
and shall be given no meaning or significance in interpreting this Agreement. All words used herein
shall be constmed to be of such gender or number as the circumstances require.
9. Amendmems: Neither this Agreement nor any of its provisions may be changed,
amended, modified, waived or dischazged orally, but only by an instrument in writing signed by the
party against whom enforcement of the change, amendment, modification, waiver or discharge is
sought.
10. Contimting Agreement: The security interest (and pledges and assignments as
applicable) hereby granted and all of the terms and provisions in this Agreement shall be deemed a
continuing agreement and shall continue in full force and effect until terminated in writing, Any such
revocation or terminafion shall only be effective if explicitly confirmed in a signed writing issued by
Secured Pazty to such effect and shale in no way impair or affect any transactions entered into or rights
created or Obligations incurred or arising prior to such revocation or termination, as to which this
Agreement shall be fully operative until same are repaid and dischazged in full. Unless otherwise.
required by applicable la Secured Party shall be under no obligation to issue a termination statemem or
8602761 - Bxhibit'B'
-13-
similaz documents unless Debtor requests same in writing and, provided further, that all Obligations
have been repaid and dischazged in full and [here aze no commitments to make advances, incur any
Obligations or otherwise give value.
11. Binding Effect: The provisions of this Security Agreement shall be binding upon the
heirs, personal representatives, successors and assigns of Debtor and the rights, powers and remedies of
Secured Party hereunder shall inure to the benefit of the successors and assigns of Secured Party.
12. Governing Law: This Security Agreement shall be governed by the law of the State of
Texas and applicable federal law.
EXECUTED this _ day of , Zpp
By:
Y6D276I - 5xhvbiF'B' - l4 -
~TT rCe
UCC-1
To be completed and filed upon receipt of Model and Serial Numbers and/or Vehicle Identification
Numbers for the Equipment identified in Exhtbit "F" to the Economic Incentive Contract and Loan
Agreement.
EXfIIBTf "D"
GUARANTY AGREENffiVT
THIS GUARANTY AGREEMENT, dated as of 20pg
(the "Guazanry'), is made between the City of Port Art>ntr Section 4A Economic Development
Corporation (the "PAEDC"), a corporation validly existing under its Charter and the constiwtion and laws
of the State of Texas, and Eduardo Gracian (the "Guaramor"), a natural person residing in Texas.
Capitalized terms used in this Guaranty and not defined otherwise are used herein as defined in the
Economic Incentive Contract and Loan Agreement, dated ,2008 (the "Agreement")
between the PAEDC, as Grantor, and Orbital Insulation Corp., a Texas corporation with its principal
offices in Port Arthur, Texas (the "Gramee"). Those definitions are incorporated in this Guazanty by
reference.
WITNESSETH THAT: WHEREAS,
A. Upon the terms and conditions set forth in the Agreemem, the PAEDC is willing [o loan
the Grantee the sum of ONE HUNDRED FIFfY THOUSAND AND NO/100 DOLLARS
($150,000.00) to enable the Gramee to acquire Equipment to design and construct Improvements to the
Building descnbed as 817 Houston Avenue, Pon Arthur, Texas and to adjacent properties of the Grantee.
B. in order to enhance the security of the PAEDC thaz the benefits under the Agreement will
inure to the benefit. of the residents of Port Arthur, Texas, the Guarantor is willing, in this Guazanty, to
guaranty the obligations of the Grantee under the Agreement.
C. Tbe PAEDC and the Guarantor each have full right and lawful authority to enter into this
Guaranty and to perform and observe the provisions hereof on their respective parts to be performed and
observed.
NOW, THEREFORE, in consideration of the premises and representations and agreements
hereinafrer contained and subject to the terms hereof, and for other good and valuable consideraflon, the
receipt of which is aclmowledged hereby, the Guazantor agrees with the PAEDC as follows:
ARTICLE I.
REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR
Section 1.1. The Gtu¢antor represents and warrarus as follows:
(a) The financial statements provided to Grow America Fund, Inc. to severe their
U.S. Small Business Administration ("SBA") Guaranteed Loan Corrmritment are
tnre and correct, and [here aze no material amendments or modifications thereto
since the date of their submission to the Grow America Fund, Inc.,
(b) The signing, delivery, observance and performance by the Guarantor of this
Guaranty azai the Guarantor's covenants, agreemers and obligations hereunder do
not, and will not, (i) violate any law now existing, or (ii) contravene or constitute
a default under any agreement, indenture, trust agreement or understanding to
which the Guarantor is a party or by which it or its property may be bound.
ARTICLE II.
COVENANTS AND GUARANTEES
Section 2.I. The Guarantor hereby absolutely and uttwnditionally guarantees to the PAIDC at
any time:
(a) the full and prompt performance of all covenants, agreements and obligations of
the Grantee under the Agreement, and
(b) dre payment of all principal; interest and other sums due, whether by acceleration
or otherwise, together with all late chazges, disbursements, expenses, and
deficiencies pursuant to that certain Commercial Promissory Note made by the
Grantee to the PAEDC as of even date herewith (collectively the "Guaranteed
Debt") together with the performance of Grantee's obligations under any
documents or instruments executed in connection with or given to secure the
Guaraneed Debt, and
(c) the full and prompt payment of all expenses and chazges, including without
limitation, to the extent permitted by law, reasonable attorneys' fees and expenses,
paid or inwrred by the PAEDC acting as Grantor under the Agreement and in
realizing any of the payments guaranteed hereby or in enforcing this Guazanty.
The Guaramor will pay all payments in lawful money of the United States of America. Each default in
payment of any amount payable hereunder shall give rise to a separate cause of action hereunder, and
sepazate suits may be brought hereunder as each cause of action arises.
Section 2.2. The Guazantor's covenants, agreements and obligations under this Guazanty aze
absolute and unconditional, are a present, and shall be a continuing, guazanty of performance and payment
and not collechbility, and shall remain in full force and effect until all covenants, agreements and
obligations of the Grantee under the Agreement have been performed or met, and all other amounts
payable hereunder shall have been paid or provision shall have been made therefor to the satisfaction of the
PAEDC, regazdless of the legality, validity, regularity or enforceabflity of the Agreement or any other
document.
The obligations of the Guarantor described in the preceding paragraph shall not be amended,
modified or impaired upon the happening of any event, including without limitation, any of the following,
regazdless of whether there is notice to or consent of the Guaaantor with respect thereto:
(a) the compromise, settlement, release or termination of any or all of the covenants,
agreements or obligafions of dre PAEDC under the Agreement;
(b) the failure to give notice to the Guaaantor of the occurrence of a default under t}ris
Guaranty or an Event of Default under the Agreement, except as provided
specifically in this Guazanty;
(c) the waiver of the paymem, observance or performance by the PAEDC or the
Guaramor of any of their covenants, agreements or obligations under this
Guaranty or the Agreement;
(d) the extension of the time for observance or performance of any covenant,
agreement or obligation under this Guaranty or the Agreement, or the extension or
the renewal of a~ extension;
N602761 - F.dubi~ `D" -1'
(e) the modification or amendment of arty covenant, agreement or obligation under
the Agreement;
(t) the taking or the omission of any action under this Guazanty or the Agreement;
(g) any failure, omission or delay on the part of the PAIDC to enforce, assert or
exercise any right, power or remedy conferred on dre PAIDC under this
Guazamy or the Agreement, or any act or omission on the part of the PAEC at
any time;
(h} the occurrence of any of the following:
(i) the admission by the Guarantor in writing of its inability to pay its debts
generally as they become due,
(ii) the entering of an order for relief in any case commenced by or against the
Guazantor (except cases commenced by the Guarantor against third parties) under
federal barilmtptcy law, as in effect from time to time,
(iii) a general assignment by the Guarantor for the benefit of creditors, or
(iv) the appointment of a receiver for the Guarantor or for the whole or any
substantial part of its property;
(j) to the extent permitted by law, the release or discharge by operation of law of the
Gbazantor from the observance or performance of any covenant, agreement or
obligation under this Guaranty or any other agreement, contract or other
insnument or document to which it is a party or by which it or its property is or
may be bound;
(k) the default or failure of the Guarantor to observe or perform fully any of its
covenants, agreements or obligations under this Guaranty or any other agreement,
contract or other instnunent or documem to which ii is a party or by which it or
its property is or may be bound;
(I) the default of the PAIDC under the Agreement; or
(m} to the extent permitted by law, the invalidity of the Agreement, this Guaranty, any
agreement, contract or other instrument or document to which the Guazantor is a
party or by which it or its property is or may be bound.
Section 2.3. No setoff, counterclaim, reduction, or diminution of arty covenant, agreement os
obligation, or any defense of any kind, which the Guarantor has or may have against the PAIDC or the
Grantee, shall be available hereunder to the Guarantor against the PAIDC; provided, however, that the
Guazantor shall be entitled to assert in a timely manner in a separate action against the PAIDC or the
Grantee, as the case may be, any rights that could not be asserted, by virtue of this Section 2.3, by the
Guazantor as a setoff; counterclaim, reduction, diminution or defense in the action on this (;ttaranty. The
Glrazantor shall not exercise any right of subrogation under this Guaranty until its obligatiotu hereunder
have been discharged in full, and such obligations shall not be discharged by virtue of any i~ahment of
such rights of subrogation.
Section 2.4. If there is a default by the Grantee under the Agreement or the Commercial
Promissory Note made by the Grantee thereunder, the PAIDC is not. oblieated m proceed first against the
Grantce and exhaust its remedies. against the Grantee and its security or other rights in the collateral of the ,-_.
M60T16r - Erhbil "D' -;
Gramee, prior to resorting to any remedy of the PAEDC as to the Guazantor; If Guarantor finds that
further action against Grautee is futile, Guarantor may request in writing that PAEDC halt executing
remedies against Grantee, after which PAEDC may proceed with remedies against Guarantor.
Section 2.5. The Guarantor covenants and agrees to pay all reasonable costs, expenses and fees
(including without limitation, to the extent penrtitted by law, all court costs and attomeys' fees) that may be
incurred by the PAEDC in enforcing or attempting to enforce this Guaranty, whether by suit or otherwise,
following any default on the part of the Guarantor under this Guaranty.
Section 2.6.
(a) The failure of the Guazantor to abide by or to observe or perform any covenant,
agreement or obligation hereunder, or any inaccuracy in any material adverse
respect of, .or any material adverse omission from, any representation or
wazranty herein, shall constimte a default hereunder.
(b) The occurrence of any of the following shall also constitute a default hereunder:
(i) the admission by the Guazantor in writing of its inability to pay its debts
generally as they become due;
(ii) the entering of an order for relief in any case commenced by or against
the Guarantor (except any case commenced by the Guazantor against a
third party) under federal bankruptcy law, as in effect from time to time;
(ii) a general assignment by the Guarantor for the benefit of creditors;
(iv) the appointment of a receiver for the Guazantor or for dte whole or any
substantial part of its property; or
The declaration of a default hereunder and the exercise of remedies upon the declaration shall
be subject to any applicable limitations of federal bankruptcy law affecting or precluding the
declaration or exercise during the pendency of or immediately following a~ bankruptcy,
liquidation or reorganization proceedings.
(c) If the default hereunder shall consist of the breach of any of the covenants,
agreements or obligations of the Guazantor under Section 2.1, or if any default
shall occur under Section 2.6(b), upon written demand by the PAEDC, the
Guarantor shall (i) cause any such covenant, agreeroem or obligation to be
performed or met and (n) pay forthwith, or make provision far payment, to the
PAEDC without further demand or notice and regazdless of whether there has
been any other default or event of default under the Agreement, the amount due
and payable under the Agreement and the Guaranty.
Tn the event that the Guarantor shall be required to make payment to the PAEDC as described
in the preceding paragraph, in addition to that payment, the Guazantor shall (i) cause any such
covenant, agreement or obligation to be performed or met and (i) pay tc the PAEDC any
further amount that is necessary to cover (i) the reasonable costs and expenses of collection,
including reasonable compensation to the PAEDC, its agents and, to the extent perrnitted by
law, the PAEDC's attomeys and counsel, and (ii) arty reasonable expenses or liabilities
incurred by the PAEDC hereunder.
(d) In the case of a default hereunder, other than under Sections 2.1 and 2.6(b), the
PAEDC upon obtainine knowledee of such default shall promptly ¢ive the.
p662761-men •n° -<-
reeistered or certified mail, postage prepaid, return receipt requested, and if the
default continues umemedied for 30 days following the giving of the notice, the
PAIDC shall have the rights, remedies and powers, and the Guaramor shall make
the payments, descn'bed in Section 2.6(c); provided, however, that if the default
(other than a default under Sections 2.1 or 2.6(b)) can be remedied but not within
thaz period, that failure shall not constitute a default, so long as the Guarantor is
taking appropriate corrective action as permitted under the Agreement.
Section 2.7. Rights, remedies and powers under this Guatartty may be exercised, either
separately or cumulatively, in the event of one or more defaults under this Guaranty.
ARTICLE iII.
NOTICE AND SERVICE OF PROCESS. PLEADINGS AND OTIIER PAPERS
Section 3.1. The Guazantor covenants and agrees to be subject to service of process in the State
of Texas, and thaz it will remain so subject to that service of process so long as the Agreement remains in
full force and effect or any obligations of the Grantee remain outstanding thereunder.
Section 3.2. Any process, pleadings, notices or other papers served upon any agent appointed
by Guarantor shall be sent at the same time by registered or certified mail, postage prepaid, to the
Guarantor's Notice Address aril to any other addresses that tray be famished by the Guarantor to the
PAEDC in writing from time to time.
ARTICLE PJ.
MISCELLANEOUS
Section 4.1. The covenants, agreements and obligations of the Guarantor hereunder shall arise
absolutely and unconditionally when the Agreement becomes effective.
Section 4.2. No remedy, right or power conferred herein upon or reserved hereunder to the
PAEDC is intended to be exclusive of any other available remedy, right or power, but each remedy, right
and power shall be cumulative and shall be in addition to every other remedy, right and power under the
Agreement or any other document emered into in connection wilt the Agreement or existing az law, in
equity or by statute or otherwise from time to time.
No delay in exercising, or omission to exercise, any remedy, right or power upon any defau]t,
omission or failure of observance or performance hereunder shall impair any remedy, right or power or
shall be construed to be a waiver thereof, but any remedy, right and power may be exercised whenever and
as often as may be deemed expedient.
To entitle the PAEDC to exercise any remedy, right or power reserved to it under this Guaranty, it
shall not be necessary for the PAEDC to give arty rwdce, other than any notice that may be expressly
required herein.
Tn the event any provision contained in this Guaranty shall be breached by a~ party and the breach
shall be duly waived thereafter by the other party so empowered to act, the waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach hereunder. No waiver,
amendmem, modification or release of this Guaranty shall be established by conduct, custom or course of
dealing, but arty amendment, modification or release shall be made solely by an instrument or document in
writing duly signed by the parties hereto who have been duly authorised by this Guaranty so to amend this
Guaranty.
6'602'!61 - Ezhibit'D° - 5
Section 4.3. This Guaranty may be amended and supplemented, to the same extent and upon
the same conditions that the Agreement may be further amended and supplemented, by a written agreement
signed by the parties hereto. The purposes for which an amendment of or supplement to this Guazanry
may be made pursuant to this Section include, without limitation, the addition of, or substitution for the
Guazantor as guarantor hereunder of, any Person that succeeds to or assumes, as the case may be, the
Guazantor's covenants, agreements and obligations hereunder.
Section 4.4. This Guazanty shall inure to the benefit of the PAEDC and its respective
successors and assigns and is binding upon the PAEDC and the Guazantor and his heirs and assigns.
Serzion 4.5. This Guazanty constitutes the entire agreement, and supersedes. all prior
agreements and understandings, both written and oral, between the Guarantor and the PAEDC with respect
to the subject matter hereof. This Guazanry may be signed simultaneously in several counterparts, each of
which shall be deemed to constitute an original, but a1I of which together shall wnstimte but one and the
same instrument. It shall not be necessary in proving this (hlazanty to produce or account for more than
one of those counterparts.
Section 4.6. The invalidity or unenforceabiliry of any one or more phrases, sentences, clauses
or sections contained in this Guaranty shall not affect the validity or enforceability of the remaining
phrases, sentences, clauses and sections hereof.
Section 4.7. This Guaranty shall be governed by and construed in accordance with the laws of
the State of Texas.
Section 4.8. All representations and warranties herein shall survive Uie signing and delivery
hereof.
IN WITNESS WHEREOF, this Guaranty has been duly signed and delivered for and in dre
name and on behalf of the Guazantor and the PAEDC by their duly authorized officers or representatives,
as of the date first above written.
II~C[TTSD BY:
Dated:
Eduardo C~rtaaan
STATE OF TEXAS
COUNTY OF JEFFERSON
On this day of , 2008, before me, a Notary Public in and for said
County and State, personally appeazed Eduardo Gracian, who acknowledged that he did sign the
foregoing instrument and that the same is his free act and deed.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on
the day and year aforesaid.
(SEAL)
-Notary Public, State of Texas
46QL761 - p•hibil'D° ~ 6
ACCEPTED BY:
Date:
STATE OF TEXAS
COUNTY OF JEFFERSON
CITY OF PORT ARTHUR SECTION 4A ECONOMIC
DEVELOPMENT CORPORATION
Ey:
President
On this day of ,2008, before me, a Notary Public in and for
said County and State, personally appeazed ,President of the PAEDC, who
acknowledged that, with due authorisation, he did sign the foregoing instrument on behalf of the
PAEDC and that the same is his free act and deed individually as such officer and the free act and deed
of the PAEDC.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on
the day and yeaz aforesaid.
(SEAL)
Notary Public, State of Texas
1,602761 - Exhibit'D' - 7 -
EXFIIBIT "D"
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of 2008
(the °Guazanty"), is made between the City of Part Arttur Section 4A Economic Development
Corporation (the "PAEDC"), a corporation validly existing under its Chazter and the constitution and laws
of the State of Texas, and Bruno Fetnattdez ([he "Guazantor"), a natural. person residing in Texas.
Capitalized terms used in this Guaranty and not defined otherwise are used herein as defimed in the
Economic Incentive Contract and Loan Agreement, dated 2008 (the "Agreement')
between the PAEDC, as Grantor, and Orbital Insulation Corp., a Texas corporation with its principal..
offices in Port Arthur, Texas (the "Grantee°). Those definitions aze incorporated in this Guazanty by
reference.
WITNESSETH THAT: WHEREAS,
A. Upon the terms and conditions set forth in the Agreement, the PAEDC is wffiing to loan
the Grantee the sum of ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($150,000.00) to enable the Grantee to acquire Equipment to design and construct Improvements to the
Building described as 817 Houston Avenue, Port Arthur, Texas aril to adjacent properties of the Grantee.
B. Tn order to enhance the security of the PAEDC that the benefits under the Agreement will
inure to the benefit of the residents of Port Arthur, Texas, the Guarantor is willing, in this Guaranty, to
guaranty.the obligations of the Grantee under the Agreement.
C. The PAEDC and the Guarantor each have full right and lawful authority to enter into this
Guazanty and to perform and observe the provisions hereof on their respective parts to be performed and
observed.
NOW, THEREFORE, in consideration of the premises and representations and agreements
hereinafrer contained and subject to the terms hereof, and for other good and valuable consideration, the
receipt of which is aclmowledged hereby, the Guarantor agrees with the PAEDC as follows:
ARTICLE I.
REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR
Section 1.1. The Guazamor represents and warrants as follows:
(c) The 5nancial statements provided to Grow America Fund, Inc. to secure their
U.S. Small Business Administration ("SBA") Guaranteed Loan Commitment are
true and correct, and there aze no material amendments or modifications thereto
since the date of their submission to the Grow America Fund, Inc.,
(d) The signing, delivery, observance and performance by the Guarantor of this
Guazanty and the Guarantor's covenants, agreements and obligarions hereunder do
not, and will not, (i) violate anylaw now existing, or (i) contravene or constitute
a default under any agreement, indenture, trust agreement or understanding to
-which the Guazantor is a party or by whir]t it or its property may be bound.
$60'1761 - E[hibi[ "n' - 8 -
ARTICLE II.
COVENANTS AND GUARANTEES
Section 2.1. The Guarantor hereby absolutely and unconditionally guarantees to the PAEDC at
any time:
(a) the full and prompt performance of all covenants, agreements and obligations of
the Grantee under the Agreement, and
(b) the paymem of all principal, interest and other sums due, whether by acceleration
or otherwise, together with all late charges, disbursements, expenses, and
deficiencies pursuam to that certain Commercial Promissory Note made by the
Grantee to the PAEDC as of even date herewith (collectively the "Guaranteed
Debt") together with the performance of Grantee's obligations under any
documents or instruments executed in connection with or given to secure the
Guaranteed Debt, and
(c) the full and prompt payment of all expetues and charges, including without
limitation, to the extent permitted by law, reasonable attorneys' fees and expenses,
paid or incurred by the PAEDC acting as Grantor under the Agreement and in
realizing any of the payments guaranteed hereby or in enforcing this Guazanty.
The Guarantor will pay all payments in lawful mottey of the United States of America. Each default in
payment of any amoum payable hereunder shall give rise to a separate cause of action hereunder, and
separate suits may be brought hereunder as each cause of action arises.
Section 2.2. The Guarantor's covenanu, agreemetts and obligations under this Guazanty aze
absolute and unconditional, aze a present, and shall be a continuing, guazanty of performance and payment
and not collectibility, and shall. remain in full force and effect antil all covenants, agreements and
obligations of the Grantee under the Agrcemem have been performed or met, and all other amounts
payable hereunder shall have been paid or provision shall have been made therefor to the safisfaction of the
PAEDC, regardless of the legality, validity, regularity or enforceability of the Agreement or any other
documem.
The obligations of the Guazantor described in the preceding paragraph shall not be amended,
modified or impaired upon the happening of any event, including without limitation, any of the following;
regardless of whether there is notice to or consent of the Guarantor with respect thereto:
(a) the compromise, settlement, release or termination of a>ry or all of the covenants,
agreements or obligations of the PAEDC under the Agreement;
(b) the failure to give notice to the Guazamor of the occurrence of a default under this
Guazanry or an Event of Default under the Agreement, except as provided
specifically in this Guazanry;
(c) the waiver of the payment, observance or performance by the PAEDC or the
Guarantor of any of their covenants, agreements or obligations under this
Guaranty or the Agreement;
(d) the extension of the time foz observance or performance of any covenant,
agreement or obligation under this Guaranty or the Agreemem, or the extension or
the renewal of any extension;
/6W761 - F.xhitit'D' - B
(e) the modification or amendment of any covenant, agreement or obligazion under
the Agreement;
(f) the taking or the omssion of any action under this Guaranty or the Agreement;
(g) any failure; omission or delay on the part of the PAEDC to enforce, assert or
exercise any right, power or remedy conferred on the PAEDC under this
Guaranty or the Agreement, or any act or omission on the part of the PAIDC at
any time;
(h) the occurrence of any of the following:
(i) the admission by the Guaaantor in writing of its inability to pay its debts
generally as they become due,
(ii) the entering of an order for relief in any case commenced by or against the
Guarantor (except cases commenced by the Guaramor against third parties) urxler
federal banla-uptcy law, as in effect from time to time,
(iii) a general assignment by the Guaramor for the benefit of creditors, or
(iv) the appointment of a receiver for the Guarantor or for the whole or any
substantial part of its property;
(j) to the extent permitted by law, the release or discharge by operation of law of the
Guarantor from the observance or performance of any covenant, agreement or
obligation under this Guaranty or any other agreement, contract or other
instrument or document to which it is a party or by which it or its property is or
may be bound;
(k) the default or failure of the Guarantor to observe or perform fully any of its
covenants, agreements or obligations under this Guaranty or any other agreement,
cottnact or other instrument or doaunent to which it is a party or by which it or
its property is or may be bound;
(1) the default of the PAEDC under the Agreement; or
(m) to the extent pemlitted by law, the invalidity of dre Agreement, this Guaranty, any
agreement, contract or other instrumem or document to which the Guarantor is a
party or by which it or its property is or may be bound.
Section 2.3. No setoff, counterclaim, reduction, or diminution of any covenant, agreement or
obligation, or any defense of any kind, which the Guarantor has or tnay have against the PAEDC or the
Grantee, shall be available hereunder to the Guarantor against the PAfiDC; provided, however, that the
Guarantor shall be entitled to assert in a timely manner in a separate action against the PAEDC or the
Grantee, as dte case may be, any rights that could not be asserted, by virtue of this Section 2.3, by the
Guarantor as a setoff, counterclaim, reduction, dimimution or defense in the action on this Guaranty. The
Guarantor shall not exercise atry right of subrogation under this Guaranty until its obligations hereunder
have been discharged in full, and such obligations shall not be discharged by virtue of any impairment of
such rights of subrogation.
Section 2.4. If there is a default by the Grantee under the Agreement or the Commercial
Promissory Note made by the Grantee thereunder, the PA&DC is not obligated to tiroceed first against the
Grantee and exhaust its remedies against the Grantee and its security or other rights in the collateral of the
. to -
g6@761 - F.xWbit'D'
Grantee, prior to resorting to any remedy of the PAEDC as to the Guarantor; If Guarantor finds that
further action against Grantee is futile, Guazantor may request in writing that PAEDC halt executing
remedies against Grantee, after which PAEDC tray proceed with remedies agair-st Guarantor.
Section 2.5. The Guarantor covenants and agrees to pay all reasonable costs, expenses and fees
(including without limitation, to the extent permitted by law, all court costs and attorneys' fees) that may be
incurred by the PAEDC in enforcing or attempting to enforce this Grtaranty, whether by suit or otherwise,
following any default on the part of the Guarantor under this Guaranty.
Section 2.6.
(a) The failure of the Guarantor to abide by or to observe or perform any covenant,
agreement or obligation hereunder, or any inaccuracy in any material adverse
respect of, or any material adverse omission from, any representation or
wazranry herein, shall constitute a default hereunder.
(b) The occurrence of any of the following shall also constitute a default hereunder:
(i) the admission by the Guarantor in writing of its inability to pay its debts
generally as they become due;
(ii) the entering `of an order for relief in any case commenced by or against
the Guaranor (except any case commenced by the Guazantor against a
third party) under federal banlmrptcy law, as in effect from time to time;
(ii) a general assignment by the Guarantor for the benefit of creditors;
(iv) the appointment of a receiver for the Guarantor or for the whole or any
substantial part of its property; or
The declazation of a default hereunder and the exercise of remedies upon the declaration shall
be subject to any applicable limitations of federal bankruptcy law affecting or precluding the
declazation or exercise during the pendency of or immediately following any bankuptcy,
liquidation or reorganization proceedings.
(c) If the default hereunder shall consist of the breach of arty of the covenants,
agreements or obligations of the (tit tazantor under Section 2.1, or if any default
shalt occur under Section 2.6(b), upon written demand by the PAEDC, the
Guarantor shall (i) cause any such covenant, agreement or obligation to be
performed or met and (ii) pay forthwith, or make provision for payment, to the
PAEDC without further demand or notice and regardless of whether there has
been any other default or event of default under the Agreement, the amount due
and payable under the Agreemem and the Guazanry.
In the event that the Guazantor shall be required to make payment to the PAEDC as described
in the preceding paragraph, in addition to thaz payment, the Guazantor shall (i) cause any such
covenant, agreement or obligation to be performed or met and (ii) pay to the PAEDC any
further amount that is necessary to cover (i) the reasonable costs and expenses of collection,
including. reasonable compensation m dre PAEDC, its agents and, to the extent pemutted by
law, the PAEDC's attomeys and counsel, and (ii) any reasonable expenses or liabilities
incurred by the PAEDC hereunder.
(d) In the case of a default hereunder, other than under Sections 2.1 and 2.6(b), the
PAEDC uDOn obtainins! knowledee of such default shall -Dromtitly ¢ive the
_ ]t.
4602"161 - Fil,ibit'D'
rexistered or certified mail, postage prepaid, return receipt requested, and if the
default continues unremedied for 30 days following the giving of the notice, the
PAEDC shall have the rights, remedies and powers, and the Guarantor shall make
the payments, described in Section 2.6(c); provided, however, that if the default
(other than a default under Sections 2.1 or 2.6(b)) can be remedied but not within
that period, that failure shall not constitute a default, so long as the Guarantor is
takirtg appropriate correcfive action as pemritted under the Agreement.
Section 2.7. Rights, remedies and powers under this Guaranty may be exercised, either
separately or crmmulatively, in the event of one or more defaults under this Guazanry.
ARTICLE III.
NOTICE AND SERVICE OF PROCESS PLEADINGS AND OTHER PAPERS
Section 3.1. The Guarantor covenants and agrees to be subject to service of process in the State
of Texas, and that it will remain so subject to that service of process so long as the Agreement remains in
full force and effect or any obligations of the Grantee remain outstanding thereunder.
Section 3.2. Arry process, pleadings, notices or other papers served upon any agent appointed
by Guazantor shall be sent .az the same time by registered or certified mail, postage prepaid, to the
Guazantor's Notice Address and to arty other addresses that may be furnished by the Guarantor [o the
PAEDC in writing from time to time.
ARTICLE N.
MISCELLANEOUS
Section 4.1. The covenants, agreements and obligations of the Guazantor hereunder shall arise
absolutely and unconditionally when the Agreement becomes effective.
Section 4.2. No remedy, right or power conferred herein upon or reserved hereunder to the
PAEDC is intended to be exclusive of any other available remedy, right or power, but each remedy, right
and power shall be cl>mulative and shall be in addition to every other remedy, right and power under the
Agreement or any other document entered into in connection with the Agreement or existing at law, in
equity or by statute or otherwise from time to time.
No delay in exercising, or omission to exercise, any remedy, right or power upon any default,.
omission or failure of observance or performance hereunder shall impair any remedy, right or power or
shall be construed to be a waiver thereof, but any remedy, right and power may be exercised whenever and
as often as may be deemed expedient.
To entitle the PAEDC to exercise any remedy, right or power reserved to it under this Guazanry, it
shall not be necessary for the PAEDC to give any notice, other than any notice that may be expressly
required herein.
In the event any provision contained in this Guaranty shall be breached by a~ party and the breach
shall be duly waived thereafter by the other party so empowered to act, the waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach hereunder. No waiver,
amendment, modification or release of this Guaranty shall be established by conduct, custom or course of
dealing, but any amendment, modification or release shall be made solely by an instrument or document in
writing duly signed by the parties hereto who have been duly authorized by this Guazanty so to amend this
(i3razanty.
.n-
/fi02761 - Exhibit "D"
Section 4.3. This Guaranty may be amended and supplemented, to the same extent and upon
the same conditions that the Agreement maybe further amended and supplemented, by a written agreement
signed by the patties hereto. The pueposes for which an amendment of or supplement to this Guazanty
may be made pursuant to this Section include, without limitation, the addition of, or substitution for the
Guazantor as guarantor hereunder of, any Person that succceds to or assumes, as the case may be, the
Guarantor's covenants, agreements and obligations hereunder.
Section 4.4. This Guazanty shall inure to the benefit of the PAEDC and its respective
successors and assigns and is binding upon the PAEDC and the Guarantor aril his heirs and.assigns.
Section 4.5. This (~i raranty constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, between the Guarantor and the PAIDC with respect
to the subject matter hereof. This Guaranty may be signed simultaneously in several counterparts, each of
which shall be deemed to constitute an original, but all of which together shall constitute but one and the
same instrument. It shall not be necessary in proving this Guaranty to produce or account for more than
one of those coumerparts.
Section 4.6. The invalidity or unenforceability of any one or more phrases, semences, clauses
or sections cotltained in this Guaranty shall not affect the validity or enforceability of the remaining
phrases, sentences, clauses and sections hereof.
Section 4.7. This Guaranty shall be governed by and construed in accordance with the laws of
the State of Texas.
Section 4.8. All representations and warranties herein shall survive the signing and delivery
hereof.
IN WITNESS R+HII2EOF, this Guaranty has been duly signed and delivered for and in the
name and on behalf of the Guarantor and the PAEDC by their duly authorized officers or representatives,
as of the date fast above written.
EXECUTED BY:
Dated:
Bnmo Fernandez
STATE OF TEXAS
COUNTY OF JEFFERSON
On this day of 2008, before me, a Notary Public in and for said
County and State, personally appeazed Bttmo Fetna~ez, who aclmowledged that he did sign the
foregoing instrument and that the same is his free act and deed.
IN WTTNESS WHEREOF, I have hereunto subscnbed my name and affixed my official seal on
the day and year aforesaid.
(SEAL)
Notary Public, State of Texas
-ts-
A602761 • ExNbit'D'
ACCEPTED BY:
Date:
STATE OF TEXAS
COUNTY OF JEFFERSON
CITY OF PORT ARTHUR SECTION 4A ECONOMIC
DEVELOPMHNT CORPORATION
By:
President
On this _ day of , 2008, before me, a Notary Public in and for
said County and State, personally appeazed ,President of the PAEDC, who
acknowledged that, with due authorization, he did sign the foregoing instrument on behalf of the
PAEDC and that the same is his free act and deed individually as such officer and the free act and deed
of the PAEDC.
IN WITNESS WHEREOF,
the day and yeaz aforesaid.
(SEAL)
9602761 - Fihibi~'D"
I have hereunto subscribed my name and affixed my official seal on
Notary Public, State of Texas
~a-
EXI-IIBIT "D"
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of 2008
(the "Guazanty"), is made between [he City of Port Artlulr Section 4A Economic Development
Corporation (the "PAEDC"), a corporation validly existing under its Charter and the wnstitution and laws
of the Siate of Texas, and itma Barragan (the "Guarantor"}, a natural person residing in Texas.
Capitalized terms used in this Guaranty and not defined otherwise aze used herein as defined in the
Economic Incentive Contract and Loan Agreement, dated ,2(108 (the "Agreement")
between the PAEDC, as Grantor, and Orbital Insulation Corp., a Texas corporation with its. principal
offices in Port Arthur, Texas (the "Grantee"). Those definitions are incorporated in this Guaranty by
reference.
WITNFSSETH THAT: WHEREAS,
A. Upon the terms and conditions set forth in the Agreement, the PAIDC is willing to loan
the Grantee the sum of ONE HUNDRED FIF"I'I' THOUSAND AND NO/100 DOLLARS
($150,000.00) to enable the Grantee to acquire Equipment to design and construct Improvements to the
Building described as 8I7 Houston Avenue, Port Arthur, Texas and to adj acent properties of the Grantee.
B. In order to enhance the security of the PAEDC that the benefits under the Agreem~yw'o
inure to the benefit of the residents of Port Arthur, Texas, ttre Gltazantor is willing, in this Guaz
guaranty the obligations of the Grantee under the Agreement.
C. The PAEDC and the C7lazantor each have full right and lawful authority to enter into this
Guaranty and to perform and observe the provisions hereof on their respective parts [o be performed and
observed.
NOW, THEREFORE, in consideration of the premises and representations and agreements
hereinafter wntained and subject to the terms hereof, and for other good and valuable consideration, the
receipt of which is aclmowledged hereby, the Guarantor agrees with the PAEDC as follows:
ARTICLE I.
REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR
Section 1.1. The Guazantor represents and warrants as follows:
(e) The financial statements provided to Grow America Fund, Inc. to secure their
U.S. Small Business Administration (°SBA") Guararrteed Loan Commitment aze
true and correct, and there aze no material amendments or modifications thereto
since the date of their submission to the Grow America Fund, Inc.,
(fl The signing, delivery, observance and performance by the Guarantor of this
Guaranty and the Guarantor's covenants, agreements and obligations hereunder do
not, and will not, (i) violate any law now existing, or Cud contravene or constitute
a default under any agreement, indenture, trust agreement or understanding to
which the Guarantor is a party or by which it or its property may be bound.
p602761 - Fshibit'D'
ls -
ARTICLE II.
COVENANTS AND GUARANTEES
Section 2.1. The Guarantor hereby absolutely and uncorxGtionally guazan[ees to the PAEDC at
any time:
(a) the full and prompt performance of all covenants, agreements and obligations of
the Grantee under the Agreement, and
(b) the payment of all principal, interest and other sums due, whether by acceleration
or otherwise, together with all late chazges, disbursements, expenses, and
deficiencies pursuant to that certain Commercial Promissory Nate made by the
Grantee to the PAEDC as of even date herewith (collectively the "Guaranteed
Debt") together with the performance of Grantee's obligations under any
docrimetrts or instruments executed in connection with or given to secure the
Guazameed Debt, and
(c} the full and prompt payment of all expenses and charges, including without
limitation, to the extent peratitted by law, reasonable attorneys' fees and expenses,
paid or incurred by the PAEDC acting as Grantor under the Agreement and in
realizing any of the payments guaranteed hereby or in enforcing this Guaranty.
The Guarantor will pay all payments in lav.~ful money of the United States of America. Each default in
payment of any amount payable hereunder shall give rise to a separate cause of action hereunder, and
separate suits may be brought hereunder as each cause of action azises.
Section 2.2. The Guatarttor's covenants, agreements and obligations under this Guaranty are
absolute and unconditional, aze a present, and shall be a continuing, guazanty of performance and payment
and not collecUbility, and shall remain in full force and effect until all covenants, agrcements and
obligations of the Grantee under the Agreement have been performed or met, and all other amounts
payable hereunder shall. have been paid or provision shall have been made therefor to the satisfaction of the
PAEDC, regazdless of the legality, validity, regularity or enforceability of the Agreement or any other
document.
The obligations of the Guarantor described in the preceding paragraph shall not be amended,
modified or impaired upon the happening of any evem, including without limitation, any of the following,
regardless of whether there is notice tD or consent of the Guazantor with respect thereto:
(a) the compromise, settlement, release or temrination of any or all of the covenants,
agrcemerrts or obligations of the PAEDC under the Agreement;
(b) the failure to give notice to the Guarantor of the occurrence of a default under this
Guazanty or an Event of Default under the Agreement, except as provided
specifically in this Guaranty;
(c) the waiver of the payment, observance or performance by the PAEDC or the
Guarantor of any of their covenants, agreements or obligations under this
Guaranty or the Agreement;
(d) the extension of the time for observance or performance of any covenant,
agreement or obligation under this Guaranty or the Agreement, or the extension or
the renewal of a~ extension;
-16-
6fiG2761- ExW'bit'D'
(e) the modification or amendment of any wvenant, agreement or obligation under
the Agreement;
(f) the taking or'the omission of any action under this Guazanty or the Agreement;
(g) any failure, omission or delay on the part of the PAEDC to enforce, assert or
exercise a~ right, power or remedy conferred on the PAEDC under this
Guaranty or the Agreement, or any act or omission on the part of the PAEDC at
any tone;
(h) the occurrence of any of the following:
(i) the admission by the Guarantor in writing of its inability to pay its debts
generally as they become due,
(ii) the entering of an order for relief in any case commenced by or against the
Guazantor (except cases commenced by the Guarantor against third parties) under
federal banla~ttptcy law, as in effect from time to time,
(ii) a general assignment by the Guarantor for the benefit of creditors, or
(ivj the appointment of a receiver for the Guarantor or for the whole or any
substantial part of its property;
(j) to the extent permitted by law, the release or dischazge by operatiori of law of the
Guazantor from the observance or performance of any covenant, agreement or
obligation under this Guaranty or any other agreement, contract or other
inshument or document to which it is a party or by which it or its property is or
may be bound;
(k) the default or failure of the Ulrarantor to observe or perform fully any of its
covenants, agreements or obligations under this Guazanty or anY other agreement,
rA~as or other instrument or doctnnent to which it is a party or by which it or
its property is or may be bound;
(1) the default of the PAEDC under the Agreement; or
(m) to the extem permitted by law, the im~alidity of the Agreement, this Guazanty, any
agreement, contras or other inshumem or dotarment to which the (;irarantor is a
party or by which it or its property is or may be bound.
Section 2.3. No setoff, counterelaim, reduction, or diminution of a~ covenant, agreement or
obligation, or any defense of a~ kind, which the Guarantor has or may have against the PAIDC or the
Grantee, shall be available hereunder to the Guarantor against the PAIDC; provided, however, that the
Guazantor shall be entitled to assert in a timely manner in a sepazate action against the PAEDC or the
Grantee, as the case may be, any rights-that could not be asserted, by virtue of this Section 2.3, by [he
Guarantor as a setoff, counterclaim, reduction, diminution or defense in the action on this Guaranty. The
Guarantor shall not exercise any right of subrogation under this Guaranty until its obligations hereunder
have been discharged in full, and such obligations shall not be dischazged by virtue of any impairment of
such rights of subrogadon.
Section2.4. If there is a default by the.Grantee under the Agreement or the Commercial
Promissory Note-made by the Grantee thereunder, the PAEDC is not obligated m proceed first against the
Grantee and ex}iaust its remedies against the Grantee and its security or other rights in the collateral of the
pboz761 - ExN'bi['D' - 17 -
Grantee, prior to resorting to any remedy of the PAIDC as to the Guazantor; If Guarantor fmds that
further action against Grantee is futile, Guazantor may request in writing that PAEDC halt executing
remedies against Grantee, after which PAEDC may proceed with remedies against Guaranior.
Section 2.5. The Guazantor covenants and agrees to pay all reasonable costs, expenses and fees
(mcluding without limitation, to the extent permitted by law, all court costs and attomeys' fees) thaz may be
incurred by the PAEDC in enforcing or attempting to enforce this Guaranty,.whedter by suit or otherwise,
following any default on the part of the Guarantor under this Guaranty.
Section 2.6.
(a) The failure of the Guarantor to abide by or to observe or perform any covenant,
agreement or obligation hereunder, or any inaccuracy in any material adverse
respect of, or any material adverse omission from, any representation or
warranty herein, shall constitute a default hereunder.
(b) The occurrence of any of the following shall also constitute a default hereunder:
(i) the admission by the Guazamor in writing of its inability to pay its debts
generally as they become due;
(i) the entering of an order for relief in any case commenced by or against
the Guarantor (except any case commenced by the Guazantor against a
third party) under federal bankuptcy law, as in effect from time to time;
(rii) a general assignment by the Guazantor for the benefit of creditors;
(iv) the appointment of a receiver for the Guazantor or for the whole or any
substantial part of its property; or
The declazation of a default hereunder and the exercise of remedies upon the declaration shall
be subject to any applicable limitations of federal bankruptcy law affecting or precluding the
declaration or exercise during. the pendency of or immediately following any bankmptcy,
liquidation or reorganization proceedings.
(c) If the default hereunder shall consist of the breach of .any of the covenants,
agreements or obligations of the Guarantor under Section 2.1, or if any default
shall occur under Section 2.6(b), upon written demand by the PAEDC, the
Guazantor shall (i) cause any such covenant, agreement or obligation to be
performed or met and (ii) pay forthwith, or make provision for payment, to the
PAEDC without further demand or notice and regazdless of whether there has
been any other default or event of default under the Agreement, the amount due
and payable under the Agreement and the Guaranty.
In the event that the Guarantor shall be required to make payment to the PAIDC as described
in the preceding paragraph, in addition to that payment, the Guazantor shall (i) cause any such
covenant, agreement or obligation to be performed' or met and (ii) pay to the PAIDC any
further amount that is necessary to cover (i) the reasonable costs and expenses of collection;
including reasonable compensation to the PAIDC, its agents and, to the extent permitted by
law, the PAIDC's attomeys and counsel, and (a) any reasonable expenses or liabilities
incurred by the PAEDC hereunder.
(d) In the case of a default hereunder, other than under Sections 2:1 and 2.6(b), the
K1A2761 - ExlSbit'D" - I8 -
registered or certified mail, postage prepaid, return receipt requested, and if the
default wntinues unremedied for 30 days following the giving of the notice, the
PAEDC shall have the rights, remedies and powers, and the Guarantor shall make
the payments, described in Section 2.6(c); provided, however, that if the default
(other than a default under Sections 2.1 or 2.6(b)) can be remedied but not within
that period, that failure shall not constitute a default, so long as the Guazantor is
taking appropriate corrective action as pemritted under the Agreement.
Section 2.7. Rights, remedies and powers under this Guaranty may be exercised, either
separately or cumulatively, in the event of one or more defaults under this Guaranty.
ARTICLE III.
NOTICE AND SERVICE OF PROCESS. PLEADINGS AND OTHER PAPERS
Section 3.1. The Guarantor covenants and agrees to be subject to service of process in the State
of Texas, and that it will remain so subject to that service of process so long as the Agreement remains in
full force and effect or any obligations of the Grantee remain outstanding thereunder.
Section 3.2. Any process, pleadings, notices or other papers served upon any agent appointed
by Guazantor shall be sent at the same time by registered or certified mail, postage prepaid, to the
Guazantor's Notice Address and to any other addresses that may be furnished by the Guarantor to the
PAEDC in writing from time to time.
ARTICLE PJ.
MISCELLANEOUS
Section 4.1. The covenants, agreements and obligations of the Guazantor hereunder shall arise
absolutely and unconditionally when the Agreement becomes effective.
Section 4.2. No remedy, right or power conferred herein upon or reserved hereunder to the
PAEDC is intended to be exclusive of any other available remedy, right or power, but each remedy, right
and power shall be cumulative and shall be in addition to every other remedy, right and power under the
Agreement or any other documem entered imo in wnnection with dte Agreemem or existing at law, in
equity or by statute or otherwise fmm tune to time.
No delay in exercising, or omission to exercise, any remedy, right or power upon any default,
omission or failure of observance or performance hereunder shall impair any remedy, right or power or
shall be construed to be a waiver thereof, but any remedy, right and power may be exercised whenever and
as often as may be deemed expedient.
To entitle the PAEDC to exercise any remedy, right or power reserved to it under this Guaranty, it
shall not be necessary for the PAEDC to give any notice, other than any notice that may be expressly
required herein.
In the event any provision contained in this Guazanty shall be breached by any party and the breach
shall be duly waived thereafter by the other parry so empowered to act, the waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach hereunder. No waiver,
amendment, modification or release of this Guaranty shall be established by conduct, custom or course of
dealing, but any amendmem, modification or release shall be made solely by an instrument or doamment in
writing duly signed by the parties hereto who have been duly authorized by this Guaranty so to amend this
Guaranty.
^
8'602761 - Edribi[ "D" - 19'
Section 4.3: This Guazanry may be amended and supplememed, to the same extent and upon
the same conditions that the Agreement may be further amended and supplemented, by a written agreement
signed by the parties hereto. The purposes for which an amendment of or supplement to this Guaranty
may be made pursuant to this Section include, without limitation, the addition of, or substitution for the
Guazantor as guaantor hereunder of, arty Person that succeeds to or assumes, as the case may be, the
Guazantor's covenants, agreements and obligations hereunder.
Section 4.4. This Guaranty shall inure to the benefit of the PAEDC and its respective
successors and assigns and is binding upon the PAEDC and the Guazantor and his heirs and assigns.
Section 4.5. This Guazanty co~titutes the entire agreement, and supersedes all prior
agreemems and understandings, both written and oral, between the Guarantor and the PAEDC with respect
to the subject matter hereof. This Guazanty may be signed simultaneously in several counterparts, each of
which shall be deemed to consdrute an original, but all of which together shall constitute but one and the
same instrument. It shall not be necessary in proving this Guaranty to produce or account for more than
one of those counterparts.
Section 4.6. The invalidity or unenforceability of any one or more phrases, sentences, clauses
or sections contained in this Guazanty shall not affect the validity or enforceability of the remaining
phrases, sentences, clauses and sections hereof.
Section 4.7. This Guaranty shall be governed by and construed in accordance with the laws of
the State of Texas.
hereof.
Section 4.8. All representations and warranties herein shall survive the signing and delivery
IN WITNESS WHEREOF, this Guazanty has been duly signed and delivered for and in the
nartle and on behalf of the Guazantor and the PAEDC by their duly authorized officers or representatives,
as of the date first above written.
EJO:CUTED BY:
Dated:
Irma Harragan
STATE OF TEXAS §
COUNTY OF JEFFERSON §
On this day of , 2008, before me, a Notary Public in and for said
County and State, personally appeazed Irma Baas who aclmowledged that she did sign the
foregoing instrumem and that the same is her free act and deed.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seat on
the day and year aforesaid.
(SEAL)
Notary Public, State of Texas
p60r761 • Er~ibi['D' ~ m'
ACCBPI'ED BY:
Date:
STATE OF TEXAS §
COUNTY OF JEFFERSON §
CITY OF PORT ARTHUR SECPION 4A ECONOMIC
DEVELOPMIIdT CORPORATION
Ey:
President
On this day of , 2008, before me, a Notary Public in and for
said County and State, personally appeared ,President of the PAEDC, who
aclmowledged that, with due authorization, he did sign the foregoing instrument on behalf of the
PAEDC and that the same is his free act and deed individually as such officer and the free act and deed
of the PAEDC.
IN WITNESS WHEREOF, I have herennro subscribed my name and affixed my official seal on
the day and year aforesaid.
(SEAL)
Notary Public, State of Tezas
YNtt761 - FiL[EI['D' - 21 -
EXFIIBTT "D"
GUARANTY AGREENffiNT
THIS GUARANTY AGREEMENT, dated as of 2008
(the "Guazanry"), is made between the City of Port Arthur Setxian 4A Emnomic Development
Corporation (the "PAIDC"), a corporation validly existing under its Charter and the constitution and laws
of the State of Texas, and Julie A. Rivera (tbe "Guarantor"), a natural person residing in Texas.
Capitalized terms used in this Guaranty and not defined otherwise aze used herein as defined in the
Economic Incentive Contract and Loan Agreement, dated ,2008 (the "Agreement")
between the PAEDC, as Grantor, and Orbital Insulation Corp., a Texas corporation with its principal
offices in Port Arthur, Texas (the "Grantee"). Those definitions are incorporated in this Guazanry by
reference.
WITNESSETH THAT: WHEREAS,
A. Upon the terms and condiflons set forth in the Agreement, the PAEDC is willing to loan
the Grantee the sum of ONE HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS
($150,000.00) to enable the Grantee to acquire Equipment to design and construct Improvements to the
Building described as 817 Houston Avenue, Port Arthur, Texas and to adjacent properties of the Grantee.
B. In order to enhance the security of the PAIDC that the benefits under the Agreement will
inure to the benefit of the residents of Port Arthur, Texas, the Guazantor is willing, in this Guazanry, to
guaranty the obligations of Ure Grantee under the Agreement.
C. The PAEDC and the Guaaantor each have full right and lawful authority to enter into this
Guazanry and to perform and observe the provisions hereof on their respective parts to be performed and
observed.
NOW, THEREFORE, in consideration of the premises and representations and agreements
hereinafter contained and subject to the terms hereof, and for other good and valuable consideration, the
receipt of which is acknowledged hereby, the Guarantor agrees with the PAEDC as follows:
ARTICLE I.
REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR.
Section 1.1. The Guaaantor represents artd warrants as follows:
(g) The financial statements provided to Grow America Fund, Inc. to secure their
U.S. Small Business Administration ("SBA") Guazanteed Loan Commitment aze
true and correct, and there are no material amendments or modifications thereto
since the date of their submission to the Grow America Fund, Inc.,
(h) The signing, delivery, observance and performance by the Guaaantor of this
Guaranty and the Guarantor's covenants, agreements and obligations hereunder do
not, and will not, (i) violate any ]aw now existing, or (ii) wntravene or constitute
a default under any agreement, indenture, trust agreement or understanding to
which the Guarantor is a party or by which it or its property may be bound.
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ARTICLE II.
COVENANTS AND GUARANTEES
Section 2.1. The Guarantor hereby absolutely and unconditionally guazantees to the PAEDC at
any time:
(a) the full and prompt performance of all covenants, agreements and obligations of
the Grantee under the Agreement, and
(b) the payment of all principal, interest and other sums due, whether by acceleration
or otherwise, together with all late charges, disbursements, expenses, and
deficiencies pursuant to that certain Commercial Promissory Note made by the
Grantee to the PAEDC as of even date herewith (wlledively the "Guaranteed
Debt") together with the performance of Grantee's obligations under any
documents or instruments executed in connection with or given to secure the
Guazanteed Debt, and
(c) the full and prompt payment of alI expenses and charges, including without
limitation, to the extent permitted by law, reasonable attorneys' fees and expenses,
paid or incurred by the PAEDC acting as Grantor under the Agreement and in
realizing any of the payments guaranteed hereby or in enforcing this Guazanry.
The Guarantor wil! pay all payments in lawful money of the United States of America. Each default in
paymem of any amount payable hereunder shall give rise to a separate cause of action hereunder, and
separate suits may be brought hereunder as each cause of action arises.
Section2.2. The Guarantor's covenants, agreements and obligations under this Guazanry aze.
absolute and unconditional, aze a present, and shall be a continuing, guaranty of performance and payment
and not collecubiliry, and shall remain in full force and effect until all covenants, agreements and
obligations of the Grantee under the Agreement have been performed or met, and all other amounts
payable hereunder shall have been paid or provision shall have been made therefor to the satisfaction of the
PAEDC, regazdless of the legality, validity, regularity or enforceability of the Agreement or any other
document.
The obligations of the Guazantor described in the preceding pazagraph shall not be amended,
modified or impaired upon the happening of any event, including without limitation, any of the following,
regardless of whether there is notice to or consent of the Guazantor with respect thereto:
(a) the compromise, setflemem, release or termination of any or all of the covenants,
agreements or obligations of the PAEDC under the Agreement;
(b) the failure to give notice to the Guazantor of the occurrence of a default under this
Guaranty or an Event of Default under the Agreement, except as provided
specifically in this Guaranty;.
(c) the waiver of the paymem, observance or performance by the PAEDC or the
Guazantor of any of their covenants, agreemems or obligations under this
Guaranty or the Agreement;
(d) the extension of the time for observance or performance of any covettant,
agreement or obligation under this Guaranty or the Agreement, or the extension or
the renewal of a~ extension;
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8602761 -FxluLit'D'
(e) the modification or amendment of any covenant, agreement or obligation under
the Agreement;
(f) the taking or the omission of any action under this Guaranty or the Agreemem;
(g) any failure, omission or delay on the part of the PAEDC to enforce, assert or -
exercise any right, power or remedy conferred on the PAEDC under this
Guazanry or the Agreement, or any act or omission on the part of the PAEDC at
any time;
(h) the occurrence of any of the following:
(i) the admission by the Guazantor in writing of its inability to pay its debts
generally as they become due,
(ii) the entering of an order for relief in any case commenced by or against the
Guazantor (except cases commenced by the Guarantor against third parties) under
federal banlavptcy law, as in effect fmm time to time,
(iii) a general assignment by ilte Guazantor for the benefit of creditors, or
(iv) the appointment of a receiver for the Guarantor or for the whole or any
substantial part of its property;
(j) to the extent permitted by law, the release or dischazge by operation of law of the
Guazantor from the observance or performance of any covenant, agreement or
obligation under this Guazanty or a~ other agreement, contract or other
instrument or document to which it is a party or by which it or its property is or
may be bound;
(k) the default or failure of the Guarantor to observe or perform fully any of its
covenants, agreements or obligations under this Guaranty or any other agreement,
contract or other instrument or document to which it is a party or by which it or
its property is or may be bound;
p) the default of the PAEDC under the Agreement; or
(m) to the extern permitted by law, the invalidity of the Agreement, this Guazanry, any
agreement, contract or other instrument or doaunent to which the Guazantor is a
party or by which it or its property is or may be bound.
Section 2.3. No setoff, wunterclaim, reduction, or diminution of any. wvenant, agreement or
obligation, or any defense of any kind, which the Guarantor has or may have against the PAEDC or the
Grantee, shall be available hereunder to the Guazantor against the PAEDC; provided, however, that the
Guazantor shall be entitled to assert in a timely manner in a sepazate action against the PAEDC or the
Grantee, as the case may be, any rights that could not be asserted, by virtue of this Section 2.3, by the
Guazamor as a setoff, counterclaim, reduction, diminution or defense in the action on this Guaranty. T'he
Guazantor shall not exercise any right of subrogation under this Guaranty until its obligations hereunder
have been dischazged in full, and such obligations shall not be discharged by virtue of any impahment of
such rights of subrogation.
Section 2.4. If there is a default by the Grantee under the Agreement or the Commercial
Promissory Note made by ttte Grantee thereunder, the PAEDC is not oblieated to proceed first against the
Grantee `and exhaust its remedies against the Grantee and its secuiiry or other rights in the wllateral of the
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pti027fi1 - ENibit °D°
Grantee, prior to resorting to any remedy of the PAEDC as to the Guarantor; If Guarantor fords that
further action against Grantee is futile, Guaaantor may request in writing that PAIDC halt executing
remedies against Grantee, after which PAEDC may proceed with remedies against Guarantor.
Section 2.5. The (lrazantor covenants and agrees to pay all reasonable costs, expenses and fees
(including without limitation, to the extent permitted by law, all court costs and attorneys' fees) that may be
incurred by the PAEDC in enforcing or attempting to enforce this Guaranty, whether by suit or otherwise,
following any default on the part of the Guarantor under this Guazanty.
Section 2.6.
(a) The failure of the Guarantor to abide by or to observe or perform any covenant,
agreement or obligation hereunder, or any inaccuracy in any material adverse
respect of, or any material adverse omission from, any representation or
warranty herein, shall constitute a default hereunder.
(b) The occurrence of any of the following shall also constitute a default hereunder:
(i) the admission by the Guaaantor in writing of its inability to pay its debts
generally as they become due;
(ii) the entering of an order for relief in any case commenced by or against
the Guarantor (except any case commenced by the Guarantor against a
third parry) under federal banlauptcy law, as in effect from time to time;
(iii) a general assignment by the Guarantor for the benefit of creditors;
(iv) the appointment of a receiver for the Guaaantor or for the whole or any
substantial part of its property; or
The declaration of a default hereunder and the exercise of remedies upon the declaration shall
be subject to any applicable limitations of federal bankruptcy ]aw affecting or precluding the
declaration or exercise during the pendency of or immediately following a~ banlatlptcy,
liquidation or reorganization proceedings.
(c) If the default hereunder shall consist of the breach of any of the covenants,
agreements or obligations of the Guazamor under Section 2.1, or if any default
shall occur under Section 2.6(b), upon written demand by the PAEDC, the
Guaaantor shall (i) cause a~ such covenantt, agreemem or obligation to be
performed or met and (ii) pay forthwith, or make provision for payment, to dre
PAEDC without further demand or notice and regazdless of whether there has
been a~ other default or evem of default under the Agreement, the amount due
and payable under the Agreement and the Guaranty.
Tn the event that the Guarantor shall be required to make payment to the PAEDC as described
in the preceding paragraph, in addition to that payment, the Guaaantor shall (i) cause any such
covenant, agreement or obligation to be performed or met and (ii) pay to the PAEDC any
further amount that is necessary to cover (i) the reasonable costs and expenses of collection,
including reasonable compensation to the PAEDC, its agents and, to the extent perritted by
law, the PAIDC's attorneys and counsel, and (ii) any reasonable expenses or liabilities
inwrred by the PAEDC hereunder.
(d) in the case of a default hereunder,-other than under Sections 2.1 and 2.6(b), the
#602761 ~ FiLtbit "D" -$'
registered or certified mail, postage prepaid, remm receipt requested, and if the
default continues unremedied for 30 days following the giving of the notice, the
PAEDC shall have the rights, remedies and powers,. and the Guarantor shall make
the payments, descnbed in Section 2.6(c); provided, however, [hat if the default
(other than a default under Sections 2.1 or 2.6(b)) can be remedied but not within
that period, that failure shall not constitute a default, so long as the Guarantor is
taking appropriate corrective action as permitted under [he Agreemem.
Section 2.7. Rights, remedies and powers under this Guaranty tray be exercised, either
sepazately or cumulatively, in the event of one or more defaults under this Guaranty.
ARTICLE III.
NOTICE AND SERVICE OF PROCESS. PLEADINGS AND OTHER PAPERS
Section 3.1. The Guarantor covettattts and agrees to be sutiject to service of process in the State
of Texas, and that it will remain so subject to that service of process so long as the Agreement remains in
full force and effect or any obligations of the Grantee remain outstanding thereunder.
Section 3.2. Any process, pleadings, notices or other papers served upon any agent appointed
by Guazamor shall be sent at the same time by registered or certified mail, postage prepaid, to the
Guazantor's Notice Address and to any other addresses that may be furnished by the Guarantor to the
PAEDC in writing from time to time.
ARTICLE IV.
MISCELLANEOUS
Section 4.1. The covenants, agreements and obligations of the Guazantor hereunder shall arise
absolutely and unconditionally when the Agreement becomes effective.
Section 4.2. No remedy, right or power conferred herein upon or reserved hereunder to the
PAEDC is intended to be exclusive of any other available remedy, right or power, but each remedy, right
and power shall be cumulative and shall be in addition to every other remedy, right and power under the
Agreement or any other document entered into in connection with the Agreement or existing at law, in
equity or by statute or otherwise from time to time.
No delay in exercising, or omission to exercise, any remedy, right or power upon any default,
omission or failure of observance or performance hereunder shall impair any remedy, right or power or
shall be construed to be a waiver thereof, but any remedy, right and power may be exercised whenever and
as often as may be deemed expedient.
To entitle the PAEDC to exercise any remedy, right or power reserved to it under [his Guazanty, it
shall not be necessary for the PAEDC to give any notice, other than any notice that may be expressly
required herein.
in the evem any provision contained in this Guazanty shall be breached by airy party and the breach
shall be duly waived thereafter by the other party so empowered to aa, the waiver shall be limited to the
particulaz breach so waived and shall not be deemed to waive any other breach hereunder. No waiver,
amendment, modification or release of this Guazanty shall be established by conduct, custom or course of
dealing, but any amendment, modification or release shall be made solely by an instrument or document in
writing duly signed by the parties hereto who have been duly authorized by this Guaranty so to. amend this
A6027fi1 - P.xhibit "D" - ~'
Section 4.3. This Guazanty may be amended and supplemented, to the same extern and upon
the same conditions that the Agreement may be further amended and supplemented, by a written agreement
signed by the parties hereto. The purposes for which an amendment of or supplement to this Guazamy
may be made pursuam to this Section include, without limitation, the addition of, or substitution for the
Guarantor as guazaaror hereunder of, any Person that succeeds to or assumes, as the case may be, the
Guazantor's covenants, agreements and obligations hereunder.
Section 4.4. This Guazanty shall inure to the benefit of the PAEDC and its respective
successors and assigns and is binding upon the PAEDC and the Guazantor and his heirs and assigns.
Section 4.5. This Guaranty constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, between the Guarantor and the PAEDC with respect
to the subject matter hereof. This Guaranty may be signed simultaneously in several counterparts, each of
which shall be deemed to constitute an original, but all of which together shall wnstitute but one and the
same instrument. It shall not be necessary in proving this Guazanty to produce or account for more than
one of those counterparts.
Section 4.6. The utvalidiry or unenforceability of any one or more phrases, sentences, clauses
or sections contained in this Guaranty shall not affect the validity or enforceabihry of the remaining
phrases, sentences, clauses and sections hereof.
Section 4.7. This Guazanty shall be governed by and construed in accordance with the laws of
[he State of Texas.
Section 4.8. All representations and wazranties herein shall survive the signing and delivery
hereof.
IN WITNESS WHEREOF, this Guazanty has been duly signed and delivered for and in the
name and on behalf of the Guarantor and the PAEDC by their duly authorized officers or representatives,
as of the date first above written.
&~~CUTID BY:
Dated:
Ju&e A. Rivera
STATE OF TEXAS §
COUNTY OF JEFFERSON §
On this day of , 2W8, before me, a Notary Public in and for said
County and State, personally appeared Julie A. Rivera, who acknowledged that she did sign the
foregoing instrument and that the same is her free act and deed.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on
the day and yeaz aforesaid.
(SEAL)
Notary Public, Stale of Texas
swne~ - FsWrou °o° - n -
ACCEPTED BY:
Dale:
STATE OF TEXAS
COUNTY OF JEFFERSON
CITY OP PORT ARTHUR SECITON 4A ECONOMIC
DEVEfoPhIEN'P CORPORATION
By:
President
On this day of , 2008, before me, a Notary Public in and for
said County and State, personally appeared ,President of the PAEDC, who
aclmowledged that, with due authorization, he did sign the foregoing instrument on behalf of the
PAEDC and that the same is his free act and deed individually as such officer and the free act and deed
of the PAEDC.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on
the day and year aforesaid.
(SEAL)
Notary Public, State of Texas
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EXI-IIBTf "E"
DEED OF TRUST
Date: , 2008
Grantor: ORBITAL INSULATION CORP.
Grantors' Mailing Address
(including county): 817 Houston Avenue
Port Arthur, Texas 77642-5057
(Jefferson County)
Trustee: GUY N. GOODSON
Trustee's Mailing Address: Germer Gertz, L.L.P.
P.O. Box 4915
Beaumont, Texas 77704
(Jefferson County)
Beneficiazy: CITY OF PORT ARTHUR SECTION 4A ECONOMIC
DEVELOPMENT CORPORATION ("PAEDC°)
Beneficiary's Mailing Address
(including county): 4173 39m Street
Port Arthur, Texas 77642
(Jefferson County)
Note
Date: .2008
Amount: , $150,000 minus incentive credits
earned by Maker according to that certain Economic Incentive
Contract and Loan Agreement between Grantor and
Beneficiary.
Maker:
ORBITAL INSULATION CORP.
Payee: CPfY OF PORT ARTHUR SECTION 4A ECONOMIC
DEVELOPMENT CORPORATION (Beneficiary)
Final Maturity Date: Three yeazs after the date of the Note.
Pro a -See Attachment for Legal Description.
Physical address is 817 Houston Avenue, Port Arthur, Texas.
The Property covered by this Instntment' includes the Land and the following items, whether
now owned or hereafrer acquired, all of which; including ieplacemdnts and additions thereto, shall be
deemed to be and remain part of the Property covered by this Instrument, and all rights, herediiaments
and appurtenances pertaining thereto, all of which aze referred to as the "Property":
(a) Any and all buildings, improvements, and tenements now or hereafter attached to or placed,
erected, constructed, or developed on the Land;
(b) all fixtures, now or hereafter attached to Land or Improvements, that aze necessary or
useful for the wmplete and comfortable use and occupancy of the Land and Improvements;
(c) all water and water rights, timber, crops, and mineral interest pertaining to the Land;
(d) all building materials and fixtures now or hereafter delivered to and intended to be installed
in or on the Land or the Improvements;
(e) all plans and. specifications for the Improvements and for any future development of or
construction on the Land;
(t) all Grantor's rights (but not Grantor's obligations) under any contracts relating to the Land
or the Improvements;
(g) all deposits (including tenant security deposits), bank accounts, funds, instnunents, notes or
chattel paper arising from or by virtue of any transactions related to the Land or the
Improvements;
(h) all Grantor's rights (but not Grantor's obligations) under any documents, contract rights,
accounts, commitments, construction contracts (and all payment and performance bonds,
statutory or otherwise, issued by any surety in wnnection with. any such. construction
contracts, and the proceeds of such bonds), azchitectural contracts and engineering contracts
arising from or by virtue of any transactions related to the Land or the Improvements;
(i) all permits, licenses, franchises, certificates, and other. rights and privileges now owned or
held or hereafter obtained in connection with the Land and the Improvements;
(j) all development rights, utility commitments, water and wastewater taps, capital
improvement project contracts, utiIiry construction agreements with any governmental
authority, including municipal utility districts, or with any utility companies (and all refunds
and reimbursements thereunder} relating to the Land or the hprovements;
(k) all proceeds azising from or by virtue of the sale, lease or other disposition of the Land or
the Improvements;
p) all proceeds (including premium refunds) of each policy of insurance relating to the Land
and the Improvements;
(m) all procceds from the taking of any of the Land or the Improvements or any rights
appurtenant thereto by right of eminent domain or by private or other purchase in lieu
thereof, including change of grade of streets, curb cuts or other rights of access, for any
public or quasi-public use under any law;
(n) all right, title, and interest of Grantor in and to all streets, roads, public places, easements,
and rights-of--way, existing or proposed, public or private, adjacent to or used in connection
with, belonging or pertaining to the Land;
(o) all of the Leases, rents, royalties, bonuses, issues, profits, revenues, or other benefits of the
Land or the Improvements, including without limitation cash or severities deposited
pursuant to leases to secure performance by the tenants of their obligations thereunder
(subject to the Assignment of Rents made in Article V below); and
(p) other interest of every kind and chazacter that Grantor now has or at any time hereafter
acquires in and to the Land and the Improvements, including rights of ingress and egress
and all reversionary rights or interests of Grantor with respect to such. property and all of
Grantor's rights (but not Grantor's obligations) under any covenants, conditions, and
restrictions for the Land, as the same may be amended from time to time, including
Grantor's rights, title, and interests thereunder as declarant or developer, if applicable.
gfi02761 - F,fi'Fic'E' - 2
Prior Lien(s) (including recording information):Senior lien Deed of Trust dated _ day of
2008 and recorded under Clerk's file no. in the Official Public Records of Jefferson
County, Texas for the benefit of GIOW America Fund, Inc. This Deed of Trust shall be senior in
priority to the within Deed of Trust to a maximum aggregate amount of THREE HUNDRED
SEVENTY SIX THOUSAND AND NO/I00 DOLLARS ($376,000.00).
Other Exceptions to Conveyance and Warranty:
This conveyance is made expressly SUBJECT TO any ,and all restrictions, covenants,
conditions, easements, right-of--ways, and mineral and/or royalty reservations of record, if any,
affecting this Property.
For value received and to secure payment of the note, Grantor conveys the property to Trustee
in trust. Grantor warrants and agrees to defend [he title to the property. If Grantor performs all the
covenants and pays the notes according to their terms, this deed of trust shall have no further effect,
and Beneficiary shall release it at Grantor's expense.
Grantor's Obligations
Grantor agrees to:
1. keep the property in good repair artd condition;
2. pay all taxes and assessments on the property when due and by January 31 of the year
immediately following, furnishing Beneficiary copies of tax receipts showing that al]
such taxes and assessments have been paid;
3. preserve the lien's priority as it is established in this deed of trust;
4. maintain, in a form acceptable to Beneficiary, an i*+c~„ante policy that
a. covers all improvements far their full insurable value as determined when the
policy is issued and renewed, unless Beneficiary approves a smaller amount in
writing;
b. contains an 80% coinsurance clause;
c. provides fire and extended coverage, including windstorm coverage;
d. protects Beneficiary with a standazd mortgage clause;
e. provides flood insurance at any time the property is in a flood hazazd azea; and
f. contains such other coverage as Beneficiary may reasonably require;
5. comply at all times with the requirements of the 80 % coinsurance clause;
6. deliver the insurance policy to Beneficiary and deliver renewals to Beneficiary at ]east
ten days before expiration;
7. keep any buildings occupied as required by the insurance policy; and
8. if this is not a first lien, pay al lien notes that Grantor is personally liable to pay and
abide by all prior lien instruments.
Beneficiary's Rights
1. Beneficiary may appoint in writing a subsfitute or successor trustee, succeeding to all
rights and responsibilities of Trustee;
2. If the proceeds of the note are used to pay any debt secured by prior liens, Beneficiary
is subrogated to all of the rights and liens of the holders of any debt so paid;
3. Beneficiary shall apply any proceeds received under the insurance policy to repair or
replace damaged or destroyed improvements covered by the policy, unless Grantor is in
default of Notes or Deed of Trust in which case insurance proceeds may be applied to
reduce Grantor's obligation under Notes or Deed of Trust;
6601761- E:hihit'E' - 3
4. If Grantor fails to perform any of Grantor's obligations, Beneficiary may perform those
obligations and be reimbursed by Grantor on demand at the place where the note is
payable for any sums so paid, including attorney's fees, plus interest on those sums
from the dates of payments at the rate stated. in the note for matured, unpaid amounts.
The sum to be reimbursed shall be secured by this deed of trust.
5. If Grantor defaults on the note or fails to perform any of Grantor's obligations or if
default occurs on a prior lien note or other instrument, and the default continues after
Beneficiary gives Grantor notice of the default and the time within which it must be
cured; as may be required by law or by written agreement, then Beneficiary may:
a. Declaze the unpaid principle balance and earned interest on the note immediately
due;
b. Request Trustee to foreclosure this lien, in which case Beneficiary or Beneficiary's
agent shall give notice of the foreclosure sale, as provided by the Texas Property
Code as then amended; and
c. Purchase the property at any foreclosure sale by offering the highest bid and then
have the bid credited on the note(s).
Trustee's Duties
If requested by Beneficiary to foreclose this lien, Trustee shall:
1. Either personally or by agent give notice of the foreclosure sale as required by the
Texas Property Code as then amended;
2. Sell and convey all or part of the property to the highest bidder for cash with a general
warranty binding Grantor subject to prior liens and other exceptions to conveyance and
warranty; and
3. From the proceeds of the sale, pay in this order
a. Expenses of foreclosure;
b. To Beneficiary, the full amount of principle, interest, attorney's fees, and other
charges due and unpaid;
c. Any amount required by law to be paid before payment to Grantor; and
d. To Grantor, any balance.
General Provisions
1. If any of the property is reconveyed under this deed of trust, Grantor shall immediately
surrender possession to the Beneficiary. If Grantor fails to do so, Grantor shall become
a tenant at sufferance of the Beneficiary, subject to an action for forcible detainer.
2. Recitals in any Trustee's deed conveying the property will be presumed to be true.
3. ' Proceeding under this deed of trust, filing suit or pursuing any other remedy will not
constitute an election of remedies.
4. This lien shall remain superior to liens later created even if the time of payment of all
or part of the note is extended or part of the property is released.
5. If any portion of the note cannot be lawfully secured by this deed of trust, payments
shall be applied fast to discharge that portion.
6. Grantor assigns to Beneficiary all sums payable to or received by Grantor from
condemnation of all or part of the property, from private sale in lieu of condemnadon,
and. from damages caused by public works or construction on or neaz the property.
After deducting any expenses incurred, including attorney's fees, Beneficiary may
release any remaining sums [o Grantor or apply such sums to reduce the note
Beneficiary shall not be liable for failure to collect or to exercise diligence in collecting
. any such-sums.
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F602761- Fshibit'E
7: Grantor assigns to Beneficiary absolutely, not only as collateral, all present and future
rent and other income and receipts from the property. Leases are not assigned.
Grantor warrants [he validity and enforceability of the assignmem. Grantor may as
Beneficiary's licensee collect rent and other income and receipts as long as Grantor is
not in default under the note or this deed of trust. Grantor will apply all rent and other
income and receipts to payment of the note and performance of this deed of trust, but if
the rent and other income and receipts exceed the amount due under the note and deed
of trust, Grantor may retain the excess. If Grantor defaults in payment of the note of
performance of this deed of trust, Beneficiary may terminate Grantor's license to collect
and then as Grantor's agent may rent the property if it is vacant and collect all rent and
other income and receipts. Beneficiary neither has not assumes any obligations as
]essor or landlord with respect to any occupant of the property. Beneficiary may
exercise Beneficiary's rights and remedies under this paragraph without taking
possession of the property. Beneficiary shall apply ail rent and other income and
receipts collected under this pazagraph fast to expenses incurred in exercising
Beneficiary's rights and remedies and then to Grantor's obligations under the note and
this deed of trust in the order determined by Beneficiary. Beneficiary is not required to
act under this pazagraph, and acting under this paragraph does not waive any of
Beneficiary's other rights or remedies. [f Grantor becomes a voluntary or involuntary
bankrupt, Beneficiary's filing a proof of claim in banlQUptcy will be tantamoum to the.
appointment of a receiver under Texas law.
8. Interest on the debt secured by Oils deed of ttvst shall not exceed the maximum amount
of nonusurious interest that may be wnuacted for, taken, reserved, charged, or
received under law; any interest in excess of that maximum amount shall be credited on
the principal of the debt or, if that has been paid, refunded. On any acceleration or
required or permitted prepayment, any such excess shall be canceled automatically as of
the acceleration or prepayment or, if already paid, credited on the principal of the debt
or, if the principal of the debt has been paid, refunded. This provision overrides other
provisions in this and all other instruments concerning the debt.
9. When the context requires, singulaz nouns and pronouns include the plural.
10. The term note includes all sums secured by this deed of trust.
11. This deed of trust shall bind, insure to the benefit of, and be exercised by successors in
interest of all parties.
12. If Grantor and Maker are not the same person, the term Grantor shall include Maker.
13. If all or any part of the Property is sold, conveyed, leased for a period longer than three
(3) yeazs, leased with the option to purchase, or otherwise sold (including contract for
deed), without the prior written consent of Beneficiary, then Beneficiary may at its
option declare the outstanding balance of the Note(s), plus accrued interest to be
immediately due and payable. The creation of a subordinate lien, any sale thereunder,
any deed under threat or order of condemnation, any conveyance solely between.
Makers, the passage of title by reason of the death of a Maker oz by operation of law
shall not be construed as a sale or conveyance of the Property.
14. THIS DEED OF TRUST IS GRANTED IN CONJUNCTION WITH THAT
CERTAIN ECONOMIC INCENTNE CONTRACT AND LOAN AGREEMENT OF
EVEN DATE.
By:
cvmre~ - ~~a~ _E. - 5
By:
BEFORE ME, TFIB UNDERSIGNED Notary Public, on this day personally appeared
known to me to be the person whose name is subscribed to the foregoing instument, and
acknowledged to me that he/she executed the same as the act and deed of
a Texas ,for the purposes and consideration therein expressed, and the Capacities
[herein stated.
GIVEN UNDER IvIY HAND ANA SEAL OF OFFICE, this dte day of
200
Notary Public, State of Texas
BEFORE ME, THE UNDERSIGNID Notary Public, on this day personally appeared
known to me to be the person whose name is subscribed to the foregoing instrument,
and acknowledged to me that he/she executed the same as the act and deed of
a Texas ,for the purposes and consideration therein
expressed, and the Capacities therein stated.
GIVEN UNDER Iyly HAND AND SEAL OF OFFICE, this the day of
200
Notary Public, State of Texas
AFTER RECORDING RBTURN TO:
Guy N. Goodson
Gertner Gertz, L.L.P.
P.O. Box 4915
Beaumont, Texas 77704 -
-6-
7607761- Ecbibit'E°
Attachment to Deed of Tntst
)dal Property Description
Lot Four (4) and the North Fifreen feet of Lot Five (N. 15' of 5), in Block Seventy-Four (74) an
Addition to the CITY OF PORT ARTHUR, in Jefferson County, Texas, according to the map or plat
thereof recorded in Volume 1, Page 50 of the Map Records of Jefferson County, Texas.
The South Ten feet of Lot Five (S. 10' of 5) and all of Lots Six (~ and Seven (7) in Block Seventy-
Four {74) an Addition to the CITY OF PORT ARTHUR, in Jefferson County, Texas, according to the
map or plat thereof recorded in Volume 1, Page 50 of the Map Records of Jefferson County, Texas.
Lots Numbered Eight, Nine, Ten, Eleven, Twelveof dtetClTY OFtPORT ARTHUR, Jefferson County,
13, 14, IS) in Block Number Seventy-Four (74), e 50 of
Texas, as the same appeazs upon the map or plat thereof on file and of record in Volume 1, pag
the Map Records in the Office of the County Clerk of Jefferson County, Texas.
-7-
yG@761 - Exdibit'E'
EXHIBIT
~b~tal
~~ ~- Orbital Insulation Corp
August 20, 2007
Economic Development Corporation
4173 39u` Street
port Arthur, T}G T7442
Atril: Stephanie Dugan
SEC
Dear Mg. Dugan
As a response to your request for infomta$on, the equipment that we need for our warehouse to
be able to operate is the following.
1 Fork IiR 3 tons
I Fork lift 5 tons all terrain
i truck 6 tons with cover long bed
1 buck flat bed 2 ton
The approximately cost for this equipment is the amount of $ 109,000.00. I€ there is any
question canceming this letter, do-trot hesitate to cell anytime.
B o Fernandez
3101 GULFWAY-nR. PORT ARTHUR, TSf. 77642 PHONE 409 965-9662 FAX 409 985-9687
EXfIIBIT "G"
CERTIFICATION REGARDING LOBBYING
For Cotrtracts Grants Loans. and Cooperative Aereements
The undersigned certifies, to fire best of his lmowledge and belief, that:
1. No funds have been paid or will be paid, by or on behalf of the undersigned, to any
person for influencing or attempting to influence an officer or employee of any agency,
a member of the City or of the PAEDC in connection with the awarding of any
contract, the malting of any grant, the malting of any loan, the entering into of any
cooperative agreement, or modification of any contract, grant, loan, or cooperative
agreement.
2 The undersigned shall require that the language of this certificaaion be included in the
awazd documents for all sub-awards at all tiers (including subcontracts, sub-grants, and
contracts under grants, loans, and cooperative agreements), and that all Subs shall
certify and disclose accordingly.
This certification is material representation of fact which reliance was placed when this transaction was
made or entered into. Submission of this certification is a prerequisite for malting or entering into this
transaction.
Signed:
By:
Signature
Its:
Position
nwn6~
EXI~BIT "H"
COMPLIANCE STATEMENT
hereby certifies that it has fully complied with Local
Government Code §I76.006, effective Lune 18, 2005, which mandates the disclosure requirements for
persons who contract or seek to contract with a local governmental entity.
a Texas
By:
p6U2761