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HomeMy WebLinkAboutAPRIL 14, 2009 - JOINT/SPECIAL MEETINGJOINT/ SPECIAL MEETING -April 14, 2009 I. INVOCATION, PLEDGE & ROLL CALL Councilmember Henderson gave the invocation followed with the pledge to the flag. The City Council of the City of Port Arthur met in a Joint/Special Session with the Port Arthur Section 4A Economic Development Corporation on Tuesday, April 14, 2009 at 5:20 p.m. in the City Council Chamber, City Hall, with the following City Councilmembers present: Mayor Deloris "Bobbie" Prince; Councilmembers Elizabeth "Liz" Segler, Morris Albright, III, Martin Flood, Robert E. "Bob" Williamson, Dawana K. Wise and Thomas ]. "Tom" Henderson; City Manager Steve Fitrgibbons, City Secretary Terri Hanks, City Attorney Mark T. Sokolow, and Sergeant At Arms Chief of Police Mark Blanton Mayor Pro Tem Jack Chatman joined the Joint/Special Meeting at 5:41 p.m. Councilmember John Beard, Jr. joined the Joint/Special Meeting at 7:36 p.m. The following members of Port Arthur Section 4A Economic Development Corporation were present: President Eli Roberts; Vice President Kerry Thomas; Board of Directors Carolyn Guillory, Kelly Shanks and Keith Daws; and Chief Executive Officer Floyd Batiste. Board of Director Kaprina Frank joined the Joint/Special Meeting at 5:56 p.m. Board of Director/Secretary Doris Green was absent for the Joint/Special Meeting. II. *CLOSED MEETING EXECUTIVE SESSION Closed Meeting: (1) Section 551.087 Government Code - To Discuss Incentives For EDC Prospects (2) Section 551.072 Government Code - To Discuss The Value Of Land At The City Of Port Arthur Section 4A Economic Development Corporation Business Parks (3) Section 551.074 Government Code - To Discuss The Duties And Evaluation Of The Chief Executive Officer Of The Port 7Arthur Section 4A Economic Development Corporation The City Council recessed their Joint/Special Meeting at 5:22 p.m. to meet in Executive Session with the Port Arthur Section 4A Economic Development Corporation to consider the above-mentioned topics, and reconvened their Joint/Special Meeting at 7:38 p.m. with the following members present: Mayor Prince; Mayor Pro Tem Chatman; Councilmembers Segler, Albright, Flood, Beard, Williamson, Wise and Henderson; City Manager Fitrgibbons; City Secretary Hanks, City Attorney Sokolow and Sergeant At Arms Blanton. Mayor Pro Tem Chatman arrived during the Executive Session at 5:41 p.m. Councilmember Beard arrived during the Executive Session at 7:36 p.m. The Port Arthur Section 4A Economic Development Corporation recessed their Joint/Special Meeting at 5:22 p.m. to meet in Executive Session with the Port Arthur City Council to consider the above-mentioned topics, and reconvened their Joint/Special Meeting at 7:38 p.m. with the following members present: President Eli Roberts; Vice President Kerry Thomas; Board of Directors Carolyn Guillory, Kaprina Frank, Kelly Shanks and Keith Daws; and Chief Executive Officer Floyd Batiste. Board of Director Kaprina Frank arrived during the Executive Session at 5:56 p.m. IV. ITEMS REQUIRING INDIVIDUAL ACTION P.O. No. 6000 - An Ordinance Approving An Agreement Of Employment For Floyd Batiste As Chief Executive Officer Of The City Of Port Arthur Section 4A Economic Development Corporation And Authorizing The City Council Of The City Of Port Arthur To Execute The Agreement Pursuant To The Bylaws Mayor Prince introduced the above-mentioned Proposed Ordinance. The motion was made by Councilmember Albright and seconded by Councilmember Wise-that Proposed Ordinance No. 6000 be adopted. The motion was made by Councilmember Beard and seconded by Councilmember Henderson that Proposed Ordinance No. 6000 be tabled to prepare a new agreement in accordance with Human Resources' Personnel policies. The following roll call vote was taken on the motion to adopt Proposed Ordinance No. 6000: Councilmember Albright "No" Councilmember Beard "Yes" Mayor Pro Tem Chatman "Yes" Councilmember Flood "Yes" Councilmember Henderson "Yes" Councilmember Segler "No" Councilmember Williamson "Yes" Councilmember Wise "No" Mayor Prince "No" Proposed Ordinance No. 6000 was tabled over the dissenting votes of Mayor Prince and Councilmembers Segler, Albright and Wise. Proposed Ordinance No. 6000 was tabled. III. DISCUSSION (i) Discussion On Proposed Section 46 (Type B) Proposition For The May 9, 2009 Special Election EDC Chief Executive Office Floyd Batiste appeared before the City Council to address the duties and responsibilities of the Economic Development Corporation concerning funding guidelines. Mayor Pro Tem Chatman left the Joint/Special Meeting at 7:52 p.m. (2) Discussion On Proposed Downtown Redevelopment EDC Chief Executive Office Floyd Batiste appeared before the City Council to present the Rice School of Architecture's Architectural Plan for Downtown Port Arthur as shown in Exhibit "A" of the Meeting Minutes. Councilmember Albright left the Joint/Special Meeting at 7:57 p.m. Councilmember Flood left the Joint/Special Meeting at 7:58 p.m. (3) Discussion On Economic Effect Of Current EDC Incentive Contracts EDC Chief Executive Office Floyd Batiste appeared before the City Council to discuss the economic effect of current incentive contracts. City Council Minutes - Joint/Special Meeting April 14, 2009 2 (4) Discussion On Proposed New Policies And Procedures Of The EDC As To Incentive Agreements And Rescinding Of Resolution 03-307. EDC Chief Executive Office Floyd Batiste appeared before the City Council to present the proposed revisions to the Internal and Operating Police and Procedures Manual as shown in Exhibit "B. V. FUTURE AGENDA ITMES OR REQUESTED REPORTS Councilmember Beard: (1) Requested staff revisit the plastic refining business at the EDC Business Park. (2) Requested an assessment of current industrial skills needed to enhance employment opportunities. III. ADJOURNMENT OF MEETING Upon the motion of Councilmember Segler, seconded by Councilmember Beard and carried unanimously, the City Council adjourned the Joint/Special Meeting at 8:13 p.m. Upon the motion of EDC Board Director Daws, seconded by EDC Board Vice President Thomas and carried unanimously, the Economic Development Corporation adjourned the Joint/Special Meeting at 8:13 p.m. An audio-tape of this meeting is on file in the office of the City Secretary and is made a part of the official minutes of this meeting. MAYOR DELORIS "BOBBIE" PRINCE ATTEST: CITY SECRETARY TERRI HANKS END OF JOINT/SPECIAL MEETING HELD: April 14, 2009 APPROVED: City Council Minutes - Joint/Special Meeting April 14, 2009 3 Exhibit "A" Carmelia Staley Port Arthur Economic Development Corporation 4173 39th St. Port Arthur, Texas 77642 4/13/2009 RE: Landscape Architecture Plan for Downtown Port Arthur Carmelia; The purpose of this letter is to indicate that a class at the Rice School of Architecture consisting of approximately 5 students under my supervision will undertake this project next fall. The scope of the project will include the development of a typical landscape/ streetscape proposal for downtown Port Arthur and the development of signage and other structures that might be appropriate for 2 "gateway' locations, approaching the city by automobile. The Downtown Port Arthur Area project area will include MLK to Stilwell, and 7ch street to the Sabine Neches Channel. The purpose of this project is to provide the city with a viable proposal for which a cost estimate and working drawings could be developed for eventual construction. The "deliverables" in this case would include computer generated two and three dimensional images mounted on poster boards for public display and CD's with an electronic copy of the presentation. Work on the project would begin this summer (July) with data gathering. The students would begin working on the project during the last week in August and the presentation would be ready by December 1. We will provide you with periodic updates on the project approximately every 30 days. As we discussed, we typically ask for funds to offset the costs of reproduction and travel for students. In my experience a budget of $4000. would be adequate. We will ask for $1500. at the beginning of the project (July 1, 2009) to cover the costs of a graduate student assembling research materials and the remainder, $2500. at the conclusion of the project to cover reproduction and mounting costs. The only addition to this work that I would like to suggest and that we have not discussed is An expansion of the work we are doing to include a planning proposal for the downtown area. I realize that you have a group working on this now, but I think we would also like to provide you with a proposal. The reason for this is primarily pedagogical. That is to say, if we are going to have our students make proposals, we would want these proposals to be based on sound research and that would include an analysis of possibilities for revitalizing the downtown area. So, in a sense, we will need to do this work anyway and it would really make it a better project for the students if we included it. This would in noway detract from the work we will do on the primary project and you obviously are under no obligation to use it. It would, however, provide with a different point of view and might help you guide the development of the proposal you already have underway. I look forward to working with you. Sincerely; Gordon Wittenberg Professor of Architecture Rice University ~. ® CHE 40x64 (column surrounds by others) -Dallas, TX ® CHE 20 x 24 -Roseville, MN © CHE 20 x 34 - Clemmens, NC Page 88 for sizes and line drawings. Chelsea (Clerestory Gable Rood CHE v~rvwv.poligoncom 800.354.7721 Exhibit "B" EXHIBIT A PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION INTERNAL AND OPERATING POLICIES AND PROCEDURES MANUAL PREFACE The Port Arthur Section 4A Economic Development Corporation (PAEDC) operators are governed by relevant state statutes, Attorney General Opinions and policies of the PAEDC and the Ciry of Port Arthur. This Internal and Operating Policies and Procedures Manual, together with the Bylaws and the City of Port Arthur Personnel Policy handbook defines and clarifies the daily operations of the PAEDC in order to 1) establish, maintain and clarify the PAEDC's Boazd and Staff responsibilities, authority and accountability as per the By-laws; and 2) to establish an effective relationship between the City of Port Arthur and the PAEDC. TABLE OF CONTENTS INTERNAL POLICIES & PROCEDURES ........................................................4 MISSION STATEMENT .................................................................5 VISION STATEMENT ...................................................................5 OFFICE HOURS ...........................................................................5 PERSONNEL POLICIES ..................................................................6 STAFF POSITIONS & RESPONSIBILTI'IES ..........................................6 BOARD OF DIRECTORS .................................................................7 BOARD MEETINGS ......................................................................8 SECURTI'Y ..................................................................................8 COMPUTER NETWORK SYSTEM ....................................................8 OPERATING POLICIES & PROCEDURES ....................................................9 AGENDAS .................................................................................10 MINiJTES ..................................................................................10 RESOLUTIONS ...........................................................................I1 FILE ORGANIZATION ..................................................................11 APPLICATION PROCESS ..............................................................11 COMPLIANCE ...........................................................................12 BUSINESS RETENTION & EXPAi~ISION ...........................................12 PAYING BILLS ...........................................................................13 REQUEST FOR INFORMATION ......................................................14 AUDIT ......................................................................................15 APPENDIX ................................................................................16 4A & 4B APPLICATIONS INTERNAL POLICIES AND PROCEDURES 4 MISSION STATEMENT The mission of the Port Arthur Economic Development Corporation (PAEDC) is to implement a proactive, aggressive industrial recruitment process focused upon specific industrial clusters that can achieve world-class competitive stature in Port Arthur. The Port Arthur Economic Development Corporation is a 4A sales tax corporation created to enhance Port Arthur's business climate and overall economic development. The PAEDC is responsible for encouraging and developing business growth and attracting new business to Port Arthur. Our 300 acre Business Pazk is especially beneficial to business in the areas of manufacturing, light industrial and commercial development. Port Arthur is ready to help you work, grow and play. Call us today to fmd out how we can help you realize better working conditions, higher profits and happier employees. With a mild climate and a superchazged business atmosphere, Port Arthur can help you attain your goals. From economic incentives to old fashioned work ethics, the employees and Board of Directors of the Port Arthur Economic Development Corporafion will make every effort to make your business grow. VISION STATEMENT Port Arthur 4A Economic Development Corporation provides leadership and technical support related to developing and implementing a citywide economic development strategy which establishes Port Arthur as a model local economy creating quality jobs, stimulating investment in both business opportunities and community amenities, generating tax revenue to support city services, and ultimately creating a high standazd of living for all city residents. OFFICE HOURS The Economic Development Corporation conducts office hours Monday through Friday of each week from 8:00 a.m. unti15:00 p.m. Each full-time employee is entitled to an hour lunch break and two fifteen minute breaks per day. The office observes holidays in accordance with the City policies. The following holidays aze considered official paid holidays: New Year's Day Martin Luther King Day Good Friday Memorial Day Independence Day Labor Day Thanksgiving Day The day after Thanksgiving Christmas Day An additional floating holiday shall be observed and shall be designated annually by the City Council. If a holiday falls on Saturday, it shall be observed on the preceding Friday or if it falls on Sunday, it shall be observed the following Monday. PERSONNEL POLICIES Personnel policies shall comply with the City's personnel policies as stated in the City of Port Arthur Personnel Policy handbook. STAFF POSITIONS & RESPONSIBILITIES Below is a list of staff positions and responsibilities. Chief Executive Officer (CEO) -The Chief Executive Officer of the Corporation is responsibility for carrying out the Corporation's program as adopted and directed by the Boazd. The Executive Director oversees all of the administrative functions of the Corporation, develops policies and procedures for the Corporation including fmancial, accounting, and purchasing policies and procedures to be approved by the Board and the City Council. The Executive Director of the Corporation is also authorized to distribute and manage corporate funds and is bonded as per policy. The Executive Director has authority to employ such full or part-time employees as needed to carry out the programs of the Corporation. These employees shall perform those duties as aze assigned to them by the Director. The Duector is responsible for hiring, directing and controlling the work of all Corporation employees, consistent with Personnel policies of the City and in keeping with the current fiscal yeaz budget of the Corporation. Economic Development Specialist (EDS) -The Economic Development Specialist is responsible for collecting all grantlloan application documents as well as providing a financial analysis of those documents. The EDS is also responsible for preparing EDC's annual budget, paying bills, travel advances/reimbursements, financial compliance, monitoring of PAEDC's finances and any special projects that may be assigned. Moreover, the EDS act as a liaison between PAEDC and the National Development Council (NDC). 6 Business Retention & Exnansion Specialist -The Business Retention and Expansion Specialist is responsible for the development, coordination and provision of business development services on behalf of the PAEDC Board. This includes business retention and expansion activities (focused on industrial and manufacturing companies) and assisting in the coordination of the City Revolving Loan Fund. The Business Retention and Expansion Specialist have secondary responsibilities for other economic development programs, including mazketing and business recruitment activities. Attomev -The Port Arthur Section 4A Economic Development Corporation retains an attorney for all legal needs. This attomey is notified of all meetings, workshops, fact- finding tours, and any other gathering of PAEDC Boazd Members. An agenda packet is also given to the attorney within 72 hours of meetings. The attomey also receives copies of all correspondence sent out by the EDC. Administrative Clerk II -Act as a receptionist assisting the public over the telephone or in person by providing routine information pertaining to policies and procedures of PAEDC and refer inquiries as appropriate. Prepaze and review a variety of memorandums, correspondence, reports and public notices. Perform a wide variety of general clerical work including the maintenance of accurate and detailed records and files, verifying accuracy of information, reseazching discrepancies and recording information. Sort and file documents and records maintaining alphabetical index and cross-reference files. Research and compile easily accessible information and data for the use in statistical and fmancial reports; maintain a variety of statistical records; check and tabulate statistical data. Contact the public and outside agencies in acquiring and providing infonnation and making referrals. Schedule appointments and meetings for PAEDC. Receive, sort and distribute incoming and outgoing correspondence; maintain accurate records pertaining to outgoing mail including postage and pieces of mail distributed. Order and maintain office supplies and perform related duties as assigned. Custodian -The custodian is responsible for the maintenance of PAEDC which includes, but not limited to, vacuuming, mopping, dusting, landscaping, window cleaning; mail pick-up/delivery and maintenance of EDC's vehicle. BOARD OF DIRECTORS The Boazd of Directors shall consist of nine members. The business and affairs of the Corporation and all corporate powers shall be exercised by or under authority of the Boazd of Directors (the "Board"), appointed by the City Council of the City of Port Arthur, and subject to applicable limitations imposed by the Texas Non-Profit Corporation Act, the Texas Business Corporation Act, the Articles of Incorporation, or the Bylaws. The Boazd may, by contract, resolution, or otherwise, gives general or limited or special power and authority to the officers and employees of the Corporation to transact the general business or any special business of the corporation, and may give powers of attorney to agents of the Corporation to transact any special business requiring such authorization. The number of Directors may only be increased or decreased by an amendment to the Articles of Incorporation as allowed by amendments to the Act. For more information on the Boazd of Directors, see PAEDC's Bylaws. BOARD MEETINGS Boazd meetings are held every other Wednesday at 6:OOpm at PAEDC's office. SECURITY Although most of the files in the EDC office aze considered accessible under the Open Meetings Act, all are still considered confidential. Security of these files is to be maintained at all times. All files aze to be locked in file cabinets on a daily basis. Computer files are to be backed up on CD on a daily basis. During regular Boazd Meetings, security is provided for the public's safety and protection. COMPUTER NETWORK SYSTEM All computers in the office aze connected via an Ethernet System. The server is named "PAEDC", and is located in the server room. There aze files located on all of the computers that each staff member may access. Some files aze secure and only the appropriate staff member may access these files. The server is nwning Microsoft Windows 2003 Server, and all office computers connect to this server using their unique usemame and password. Do not share your computer passwords with anyone. Lock your computer every- time you leave your desk and shut down at the end of the day. All computers have ananti-virus program installed and running, but this does not completely protect your computer or data. To help protect your data do not go to unfamiliar websites or open unsolicited email attachments. Anti-spam softwaze is available for free and will improve the performance of your computer when run frequently. OPERATING POLICIES -AND PROCEDURES 9 AGENDAS Each month the Boazd of Directors holds two to three meetings. The meetings are held on the second Wednesday of the month at the EDC office. Each meeting must have an agenda of items to be covered in the meeting. Agenda items should be placed on the agenda on the opposite week of the meeting; on Wednesday's, staff shall meet and review the agenda, on Thursday's, staff shall meet to review the agenda and the accountant should let the CEO know if funds aze available for agenda items that need funding; and on Friday's, staff shall meet with the President of the Corporation for his approval to post the agenda. This agenda MUST be posted at the EDC office and on the website no later than 72 hours prior to the meeting date. A copy of the agenda must be broadcasted to all the media groups as well the Chamber of Commerce by fax. In the event of a cancellation of a boazd meeting, written notice must be posted in City Hall and the media must be notified. There is not always time to contact the media via landline telephone. A fax copy of the cancellation notice must be sent as well. Each meeting must be recorded in accordance with the Open Meetings Act and copies of the tapes aze to be maintained by the EDC in a secure place. MINUTES The minutes of each meeting must be transcribed in a timely manner. Transcription should be made as soon as possible for public viewing and submission to the Secretary of the Boazd for signature. The Boai•d has adopted that the minutes be transcribed with minimum explanation of discussion and listing the motion as stated including the person making the motion and the person seconding the motion. In the event that "For the Record" is stated in the meeting, this information must be transcribed completely and be kept in the file with the regulaz minutes of the meeting. The minutes of each meefing aze kept in the file room for public viewing and easy access. The minutes are also presented at the following monthly meeting for approval by the Boazd and at such time of approval, the Secretary of the Board signs the minutes. A preliminazy copy is kept in the binder until the original with signature is obtained. The preliminary copy is then replaced with the signed copy. A copy of all signed minutes is to be forwazded to the City Secretary for record keeping. This copy must be the signed copy completed by the Secretary of the Boazd. 10 RESOLUTIONS Staff shall prepaze resolution(s) only if agenda items pertain to project contracts or invoices larger than $5,000. Resolutions should reflect the agenda items that were approved by the boazd members in the meeting. After resolutions aze prepazed, they should be forwazded with necessary attachments to the City Attorney's office for final preparation. City Attorney's staff shall put the resolution on the City's agenda for approval. FILE ORGANIZATION A file is prepazed when the business prospect has turned in an application. All business prospects file folders should consist of four tabs for Application/Resolutions, Contracts/Status Reports, Outgoing Con•espondence/Incoming Correspondence, and finally Notes. Therefore, all file folders aze consistent. File folders should be scanned in the Intranet for easy access to Boazd Members and staff. APPLICATION PROCESS When people inquire about receiving an incentive and/or application from PAEDC for their business, we ask them what type of business it is and if at least fifty-one percent of its services/products will be sold outside of Port Arthur. If less than fifty-one percent of a business's services/products aze sold outside of Port Arthur, then the company does not qualify fora 4A incentive. If the type of business is industriaUmanufacturing, recycling, distribution, wazehousing or commercial, a 4A application is given. If the type of business is not one mentioned above then a 4B application is given. Below is a comparison of 4A and 4B incentives. 4A 4B Incentive Given: Grants & Loans Loans only Incentive Max: No limit. No limit Incentive Provided By: PAEDC City Revolving Loan Fund (also called Grow PA Fund) Export of Product/Services Outside of Port Arthur: 51 % or more 51 % or more 11 If the customer's business is eligible, an application is given along with instructions on how to complete the application and documents that needs to be submitted with the application. When the application is returned to us, we check for completeness, documentation and again for NAICS code and percentage of goods/products sold outside of Port Arthur to make sure the client qualifies for a grant or loan. Notification of the project is given to the EDC boazd after application is received. Upon receiving all documents, file is sent to Attomey for review and approval to move forwazd. A financial analysis and spread is done and the Quality Indicator Check List is prepared. Then the file is sent to CEO for review, approval and preparation of recommendation of the project. After approval from the Attomey, the client makes a presentation to the EDC Boazd. After the presentation of the project, the EDC Boazd decides to approve or disapprove of the project. After the EDC Boazd approves the project, a resolution, draft of the incentive agreement (prepazed by EDC's Attomey) and EDC's CEOBoazd recommendation is sent to the City Attorney for review and approval. The incentive draft is also reviewed by the applicant. After review and approval from the City Attorney, the project is placed on the City Council Agenda for approval by the Council. COMPLIANCE During the step of the review of the construction & equipment invoices, payroll, deliverance of materials as to consistency with incentive agreement the EDS and BRES will work together with the CEO. Performance Milestones will be add/delete/update company information or milestones status. View/edit documentation log is updated as information is gathered from project managers. As this operational step is set in place, it is at this time that retention and/or expansion for the active projects of the EDC and existing companies aze created. BUSINESS RETENTION & EXPANSION The Business Retention and Expansion program is designed to develop and implement Industry needs, screen business assistance inquires, provide counseling and business plan assistance to entrepreneurs and small business owners; oversee, implement and provide services for State programs; assist new and existing companies with development of loan applications to various financing sources, provide information on various business incentive programs, help develop workforce development programs to meet the needs of industry by working with other community-based providers; identify and provide assistance/referrals to companies deemed to be at-risk; identify and assist existing companies who aze planning to expand their business and coordinate with local partners involved in providing business assistance, assist in the prepazation and submittal of state, federal and private source grant applications. 12 PAYING BILLS There aze four ways to pay bills or request money from the city. 1. Check Request or Travel Request 2. Release Orders (used for Blanket Orders) 3. Purchase Orders (used when a requisition is done in AS400 to pay invoices) 4. Field Orders (city limit is under $300) Below aze detailed procedures for paying bills or requesting money from the city CHECK REQUESTS -Check requests aze used when the vendor you need to pay doesn't have a vendor number set up in the system. Just fill out the check request form located on the shaze drive. Make sure you state where you want the check to be mailed or sent under the "Special Handling Instructions" section on the check request form. If the invoice you aze paying needs to be expensed from more than one account, list the different accounts along with the total for that account under the "Multi-Account Distribution" section of the check request form. Send all check requests to Accounting. TRAVEL REQUESTS -Travel requests are used to get advanced money for business trips. Make sure the entire form is filled out ahead of time and sent to the City so employees boazd members can receive their money in a timely manner. Only transportation (air fazes and rental cars) and hotel expenses can be advanced for boazd members. Employees can be advanced for transportation, hotel and food per diem. Food per diem is $75 per day for CEO and boazd members and $38 per day for other employees. All other expenses (such as pazking, tolls, tips, mileage or gas, taxi and telephone expenses) will be reimbursed if receipts are provided. Send all travel requests to Accounting. RELEASE ORDERS -Release orders are used to pay vendors that we have contracts with and that the City has set up a blanket order to pay the vendor from. A blanket order is an assigned amount of money set aside for a specific vendor to be used in a certain period of time for each contract. In order to pay an invoice that has a blanket order set up, you must have a signed resolution pertaining to the invoices from the City Secretary. Once the resolution is received, the release order must be filled out. The "Date Issued" is the "Effective Date" printed on the blanket order. If multiple invoices exist, then list the invoice numbers and amounts on the release order. Have the CEO sign the release order and send the white copy of the release order, the original invoice and a copy of the resolution to Accounting to process the payment of the invoice(s). PURCHASE ORDERS -Purchase orders aze used to pay recurring bills (invoices) that we have no blanket order for (or not under contract with). These invoices have to be requisitioned in AS400. All utilities (gas, water and telephone) bills do not have to be requisitioned in AS400, just have the CEO review and sign off on the invoice for approval to pay it, make a copy of the invoice and send the original invoice to 13 Accounting for payment. For all other bills that's not a utility bill, fill out a requisition in AS400 for each bilUinvoice. Attached aze the procedures for filling out a requisition in AS400. When requisition is done have the CEO approve the invoices and wait for Purchasing/Accounting to send you the Purchase Order (PO) for the invoice. When the PO is received, make of copy of it and the invoice for your records and send the original PO and invoice to Accounting for payment. FIELD ORDERS -Field Orders aze used to purchase goods on credit. The field order book must betaken to place of purchase so that the goods purchased, quantity and amount can be listed on the field order. Make sure the vendor's name and address, invoice number and invoice date and proper signature is filled out on the field order. Field orders can not exceed $300. When the invoice for the field order come in, check to make sure the items, quantities and amounts aze correct. If so, make a copy of the invoice for your records and send the original invoice and yellow copy of the field order to Accounting for payment. All invoices need to be date stamped, reviewed and signed by the CEO. And all purchase orders and invoices need to be copied for PAEDC records. REQUEST FOR INFORMATION According to the Public Information Act (formerly the Open Records Act), information that is collected, assembled, or maintained under a law or ordinance or in connection with the transaction or official business by 1) a governmental body or 2) for a governmental body and the governmental body owns the information or has a right of access to it aze subject to the Public Information Act (PIA). All requests must be written. PIA does not require that the public direct its written request to any specific employee or officer. An exception to this rule is if the govern body has designated a person that is authorized to receive a-mails or faxes, the PIA is only triggered if the request is directed to the assigned individual. Release of information shall be promptly, depending on the circumstances within a reasonable time, but no later than ten business days. Requestee can not ask the requestor why the information is wanted, but can ask for clarification and narrowing of the scope. APIA request can not ask the govern body to compile statistics, perform research or provide answers to questions. PIA only requires providing documents that relate to the information being sought; however, if the request only requires program or manipulating existing data, it is not a request for creation of new information. Below aze the different responses that can be made to a requestor: • Release the information that the requestor wants. • Notice to requestor that additional time is needed to produce records. • Notice to requestor that additional time is needed to produce records that aze in active use or in storage. 14 • Notice to requestor of programming or manipulation cost. • Notice to requestor that EDC sought Attorney General Open Records Ruling Every time the EDC wants to withhold requested information, an Attorney General Open Records Ruling must be requested unless there is a previous detemunation. For more information on previous determination see Section 552.101: Information Confidential by Law, Section 552.110: Certain Commercial Information (trade secrets and commercial or financial information privileged or confidential by law) and Section 552.131: Information Relating to Economic Development Negotiations. The Economic Development Negotiation Exception states that EDC's aze allowed to withhold certain information related to economic development negotiations between a governmental entity and a business that the governmental body is seeking to have locate, stay, or expand within or neaz the city. Under this provision, the EDC could withhold trade secrets of the business prospect that were related to economic development negotiations. Prior to issuing any information, the request and information should be reviewed by the CEO. AUDIT PAEDC is audited in conjunction with the City's annual audit. 15 APPENDIX 16 EXHIBIT B PAEDC INCENTIVE AGREEMENT FLOWCHART . Preliminary inquiry by .Applicant Confidential report by. EDCstaff/NDC as. td credit, experience, fnancigls, business marketing. plan, capi[alization and .accounting If interested, CEO yerif es budget and sends. letter describing project to termer Gertz CEO reviews confidential financial.report and:gives recommendation as to budget City Council' receives contract and CEO recommendation for approvat termer Gertz sends. preliminary. letter as to eligibility for, § 4A. funds Confdential frrtancial report and CEO' recommendation is presen;ed to Board,• Is Board still interested?. City Attorney reviews: contract for consistency with Resolution Application received by EDC & CEO checks . application as to .being complete termer Gertz receives ..application ver fes projects eligibility to receive § 4A funds EDC Board receives project presentation and decides if rn erested in the. proposedprgjech ~~ City Attorney Incentive EDC Beard reviews Agreement is approves proposed prepared by Incentive Resolution, F.DC counsel Agreement Incentive and reviewed by Agreement, applicant. confidential financial report and CBO budget report PAEDC CEO Closing/Execution EDC requests check of EDC Incentive Compliance only if monies Agreement at Officer reviews pa:d at offices of termer payroll and contract/note i Gertz status reports s gning ~PABDC Grant Incentive Committee will be used as necessary to review major projects. EXHIBIT C Guidelines for Letter of Intent All grant applicants are required to submit a letter of intent to the CEO prior to submitting a fiill application and supporting documents. The letter of intent is a one to two page letter briefly describing the project. Please include the following in your letter: 1 • Your organization and its experience in the field. 2. What do you propose to do, state if project is for a new business or expansion. 3 • The amount of the grant request, how the funds would be used, the amount of the total project and other sources of funds. Mail letters to: Port Arthur Economic Development Corporation P.O. Box 3934 Port Arthur, TX 77642 Email letters to: lbatisterc"r aede.ore Fax letters to: (409)962-4445 P73A3E! Port Mhm 6ao°onve Development Cptpp~atipII Argoant itequs,+ted: g Date: Name of F,ntitq: l4'Al.SC -Code CootactParty: Addneas: Sam Numbs Pkonei ~~ ~ ~' sum ~ ao Code Nom6s Fa: B U Ba8lnpa ^ Ne Cade Numbs Strnceure ~. ^~ ~F~n~P Sole Offi1B/MWBE dNon.Ptofit Fmpriato~ip Business Dlndusnial/ ORecycliaB ~Distrtbutian Tree Mannfaeturing OSmall OCommercial Wareleouse Date Business Famhlished Date Business ~~~~~ Prosent a of- 11 _~~_ _. ...__._ _ Kot~Plorasaftcr Grant or TOml Psyrotl Scale ~--- ~ ~Jeb Qassiticetiaas & Owners with Five (5°/moo pe~tofmpplicent Company Greater Ownmship of iha Company Name Thle %of Owoetship List all requrstand/or approvals of fnads 6om other sdtmes °°~ avd/or Equity _ dates of application, status and funding solace coatact (~ ~~~' tatdit onions, govt. entkies, etc.) together wiffi PAY name: Project Cost Land $ SOU°t Source of Funds BIdgJRenovation g Equipment $ Furniture/Fizturcs 5 Working Capital S . Total E EXHIBIT D City of Port Arthur Section 4A Economic Development Corporation Grant/Loan Incentive Application Date: Please complete the following information and return along with the requested documents. We will review the information that you provide to deternune if you aze eligible for assistance from the PAEDC. Business Name: Address: Phone: Email andlor Website Information: Owners: Please list al] owners with Fax: (5%) Percent or Greater Ownership of the Company S. Corp. C. Corp. HUB/MWBE Non-Profit Type of Business Organization: Not Established (Please Check One) Sole Proprietorship ,Please describe the type of business (product or service): Has the business, or any principals of the business been involved in bankruptcy or insolvency proceedings? Yes ONo ff yes, Please explain: Are there any personal/business judgments, liens, unsettled lawsuits or major disputes? DYes ONo If yes, please explain: Have you taken any business development lasses? DYes Are you working with a counselor at the Small Business Development Center? DYes ONO Name of Counselor: Phone Number: 0 No Are you working with a counselor at the Service Corps or Retired Executive (SCORE)? DYes ONo Name of Counselor: Phone Number: Have you completed a Business Plan? DYes ~No If yes, when/by whom was the Business Plan prepared? Name: Type of Business: (Please Check One) Phone Number: triallManufacturing (Fill Out Sections A-H) ;ling (Fill Out Sections A-H) ~ution (Fill Out Sections A-H) louse (Fill Out Sections A-H) iercial (Fill Out Sections A-H) tructure (Fill Out Sections A-C) Purchase (Fill Out Section A Only) ng (Fill Out Sections A-C) ~SL~'F~CI1~ B~~GObDS ~IY~I~R~~ . Please indicate the percentage of services or goods sold to persons or companies outside of the Ciry or Port Arthur: Please explain: Please indicate the percentage of services or goods sold tc persons or companies outside of Jefferson County: Please explain: Please indicate the percentage of services or goods sold to persons or companies outside of the Golden Triangle: Please explain: Please indicate the NAICS (North American Industry Classification System) number that applies to your industry and the name given that number. For assistance, please see htto://v~ww.census.cov/eocd/naics02/naicode02.htm NAICS Number: Example: 322222/Coated/Laminated Paper Manufacturing SEE~YUPT~C`PRO~J~~ST ~~ ~ ~~# ~~,r ,.~ Please, briefly describe your project: PROJECT Total amount requested: Project Cost JOB TRAIN OTHER Personal cash available to invest in project:$ Source: What bank have you contacted for financing: Name of Banker: Phone Number: Please list all request andlor approvals of funds from other sources (e.g., banks, credit unions, governmental entities, etc.) together with dates of application, status and funding source contact information: ~.. _ _~ f Number of Current Employees: FT PT Please list current Job Classifications & Wage Scales: Job Classification Wage Scale No. of Employees in this Class cation Current Total Payroll: $ Number of Employees after completion of Project: FT PT Please list current Job Classfcations & Wage Scales: Job Classification Wage Scale jNo. of Employees in this Total Projected Payroll: $ S~C~'FtTr~T`~:,G;()i~,~I~T~E}F~-~5'T,~~`~ _ -~- -~ ~'_ ._ ` The undersigned, as officers, shareholders, and/or principals of ("Applicant"), acknowledge that: 0 there are no elected or appointed public officials wfth any ownership interest in said company ("Applicant") 0 there are elected or appointed public officials with ownership interest in said company ("Applicant"), listed as below: Name (Printed): Signature: Name (Printed): Signature: Name (Printed): Signature: Date: Name (Printed): Date: Name (Printed): Name (Printed): Date: `5~~~~f3t'~7, ReREI11'1_~ItEE~~'.".~'.. ~g ~ - ~ CERTIFICATION: Please read the following and sign the application form below. All owners, officers, partners and/or principals must sign this application. This is an Equal Opportunity Program.-Discrimination is prohibited by Federal Law. Complaints of discrimination may be filed with the appropriate authorities. The information in this application is provided for the purpose of applying for funds under the City of Port Arthur Section 4A Economic Development Corporation's incentive programs. The information in this application is accurate to the best of my knowledge. I understand that personal and/or business information may be requested pursuant to this application and I herby give cdnsent for such information to be provided to the City of Port Arthur Section 4A Economic Development Corporation. I also understand that the City o Port Arthur Section 4A Economic Development Corporation retains the sole decision as to whether or not this application is application is approved, disapproved or mod~ed. It is my right to accept or decline the grant and/or loan amount, rate and terms as apprdved by the Program. I authorize the City of Port Arthur Section 4A Economic Development Corporation to obtain'a credit report on me through the credit reporting agency of its choice. If an adverse credit decision is made due totally or partly to the information on the credit report, the City or Port Arthur Section 4A Economic Development Corporation will give me a copy of the credit report, a summary of my rights under the Fair Credit Reporting Act, and the source of the credit report so that I may contact them if I wish. I UNDERSTAND THAT ALL INFORMATION SUBMITTED TO THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION WILL BE KEPT ON FILE ACCORDING TO THE RECORDS RETENTION LAWS OF THE STATE OF TEXAS. IF I DO NOT REQUEST THE RETURN OF CERTAIN PRIVILEGED INFORMATION, IT WILL BE DISPOSED ON IN THE MANNER REQUIRED BY LAW. Name (Printed): Signature: Name (Printed): Signature: Name (Printed): Signature: Name (Printed): Signature: Name (Printed): Date: Name (Printed): Signature: Date: r .` - ~ -- 3 `~ x ~~ ~~,~--~ T~.; The undersigned, as officers, shareholders, and/or principals of ("Applicant"), acknowledge that in conjunction with the Applicant's application for economic incentive assistance form the City of Port Arthur Section 4A Economic Development Corporation.("PAEDC"), the PAEDC may require that one or more officers, shareholders and/or principals of applicant execute personal guarantees and/or security agreement-pledge agreements whereby said officer, shareholder and/or principal may be called upon to either guarantee all or a portion of the obligations of the Applicant and/or pledge all or portion of the officer, shareholder and/or principal's ownership interest in the Applicant in order to secure performance of the Applicant's obligations. Said potential guarantee and/or pledge may be in addition to any corporate obligation and/or pledge of corporate assets provided by the Applicant in conjunction with its execution of any future Grant Incentive and Loan Agreement. I acknowledge that I have been advised, in advance, df the potential request 6y the PAEDC for personal liability, whether direct or indirect, and with full knowledge of said potential, I am requesting that the PAEDC continue its investigation, review and consideration of the application filed on behalf of Applicant. Name (Printed): Signature: Name (Printed): Signature: Name (Printed): Name (Printed): Signature: Name (Printed): Signature: Name (Printed): Signature: Please submit the following information along with your application. Information Information Not Enclosed AppliL_.J Business and Marketing Plan ~~ Business Financial Statements for last 3 years ~ ~~ ProForma Financial Statement ~ ~~ Existing Business: At least one year profit/loss & cash flow on a monthly basis, but not less than the period covered by the grant. Start-Up Business: At least two years profiUloss 8 cash flow on a monthly basis, but not less than the period covered by the grant. ~-7 Business Tax Returns for the last three years 0 r-~ Must be signed and dated. If past April 15th, please include prior year copy of extension. Interim Business Financial Statement ~ 0 Within the last 90 days. Resumes on the principals of the business 0 Owners with 20% ownership or greater Personal Financial Statements of the principals Owners with 20% ownership or greater Personal Tax Return for each principal Owners 0 ~~ with 20% ownership or greater for last 3 years Anticipated Environmental Impact 0 r~ Economic Impact Analysis 0 ~~ Certifcates of Good Standing L-J r_~ Secretary of State State Comptroller Acknowledgement of Conflict of Interest Policy Acknowledgement of Grant Incentive Policy & Procedures ~ I__.~ Copies of all licenses and permits 0 Proof of Insurance Coverage Dun & Bradstreet Report EXHIBIT E Port Arthur Economic Development Corporation Economic Impact Data Sheets The information requested on these data sheets is needed by the Port Arthur Area Economic Development Corporation to perform an economic impact analysis of your frm's proposed facility or expansion in Port Arthur, Texas. Please enter the information requested and email these completed sheets to cstalev(a.oaedc.org. Port Arthur Economic Development Corporation 4173 39th Street Port Arthur, TX 77642 (409) 963-0579 (409) 962445 fax www.paedc.org If you have any questions concerning the information being requested on these data sheets, please call or a-mail Floyd Batiste, CEO, Port Arthur Economic Development Corporation, fbatiste@paedc.org. About Your Firm: Name of f rm: Current address: Phone number: Fax number: Person completing this form: Location of the firm's proposed or existing facility in the Port Arthur, TX area: Description of the firm's business and plans to develop or expand in the Port Arthur, TX area: The firm's primary NAICS: Page 1 of 5 Your Firm's Taxable Assets, Employees and Operations: Market value of the firm's new or additional property purchased each year at its local facility that will be on local property tax rolls on January 1: Furniture, Buildings Fixtures and -and Yr. Land Improvements Equipment Total 1 2 3 4 5 6 7 8 9 10 Total $0 $0 $0 $0 $D $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Will the costs of buildings and real property improvements be new wnstruction? ^ Yes ^ No Percent of construction costs for materials and labor: Materials Labor (Enter 50% /or each if unknown.) Percent of construction materials that will be taxable and purchased in Port Arthur, if known (Enter 20% if unknown.) Percent of taxable spending by construction workers that will be in Port Arthur, 'rf known (Enter 25% if unknown.) Percent of furniture, fixtures and equipment that will be purchased in Port Arthur, 'rf known (Enter 25% N unknown. Machinery and equipment used in manufacfuring or processing operations are not taxable.) Percent of furniture, fixtures and equipment that will be purchased that will be subject to sales taxes (Enter 25% if unknown. Machinery and equipment used in manufacturing or processing operations are not taxable.) 50% 50% 0% 0% 0% 0% Page 2 of 5 Estimated taxable inventories, at the end of each year: Year 1 2 3 4 5 6 7 8 9 10 The firm's monthly utilities: Year Water Wastewater Solid Waste 1 2 3 4 5 6 7 8 9 10 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Electricity Natural Gas Cable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Percent of the firm's electricity and natural gas usage for manufacturing or processing operations Number of phone lines The firm's estimated taxable purchases of materials, supplies and services in Port Arthur: Year 1 $0 2 $0 3 $0 4 $0 5 $0 6 $0 7 $0 8 $0 9 $0 10 $0 Q°/a Page 3 of 5 The firm's estimated taxable sales in the Port Arthur: Year 1 $0 2 $0 3 $0 4 $0 5 $0 6 $0 7 $0 8 $0 9 $0 10 $0 New employees to be hired: New employees to be hired Year each year The number of these new employees who will move to the Port Arthur from somewhere else to take job with the firm 1 - - 2 - - 3 - - 4 - - 5 - - 6 - - 7 - - 8 - - 9 - - 10 - - Average annual salaries of new employees in the first year Percent of expected annual salary increases after the first year Household size of a typical new worker moving to the County (Enter 3 d unknown.) . Number of school age children, grades K-12, in the household of a typical new worker who will move to the County (Enter.75 if unknown.) , Other Will any of the firm's inventories be subject to freeport exemption? ^ Yes ^ No Inventory items used in assembling, storing, manufacturing, repair, maintenance, $0 0% Page 4 of 5. processing or fabricating that will be shipped out of Texas within 175 days of being acquired or brought info Texas are generally subject to freeport exemption. Therefore, property taxes are collected on this exempt inventory. However, not all local taxing districts in the Port Arthur, TX area currently offer this tax break. Percent of the firm's inventories that would be subject to freeport exemption 0% Will the firm apply for freeport exemption, ff available? ^ Yes ^ No Out-of-Town Visitors the will Visit the Firrn: Number of out-of-town visitors expected at the firm in the first year Percent of annual increase in the number of visitors 0% Average number of days that each visitor will stay in the 0 community Average daily taxable visitor spending, excluding lodging $0 Average number of nights that a typical visitor will stay in 0 a local motel Out-of-Town Truckers Loading or Unloading at the Firm Number of out-of-town truckers expected to load or unload at the firm in the first year Percent of annual increase in the number outof-town truckers 0% Average daily taxable by a typical trucker 30 Percent of truckers who will stay one night in a local motel 0% Page 5 of 5 EXHIBIT F I. BALANCE SHEET Compiled/reviewed/audited date 12/31/94 ASSETS 1 Cash & Mktable Securities $0 $0 2 Accounts Receivable $0 $0 31nve~tory $~ $0 4 Prepaid Ex enses $0 $0 5 6 7 8CURRENT ASSETS $0 $0 $0 $0 $0 9 Net Fixed Assets 10 Notes Receivable 11 Investment in Subsidiaries 12 Intan ibles 13 14 15 TOTAL ASSETS $0 $0 $0 $0 $0 LIABILITIES 8~ NET WORTH 16 Note Pa able -Bank 17 Note Pa able -Other 18 Accounts Pa able 19 Accruals 20 Income Tax Payable 21 Current Portion of LTD 22 23 24 25 CURRENT LIABILITIES $0 $0 $0 $0 $0 26 Long Term Debt 27 Subordinated Officer Debt 28 29 30 TOTAL LIABILITIES $0 $0 $0 $0 $0 31 Common Stock 32 Cap. Surplus & Paid in Cap. 33 Retained Earnings 34 Less Treasu Stock 35 TOTAL NET WORTH $0 $0 $0 $0 $0 36 TOTAL. LIABILITIES 8~ NW $0 $0 $0 $0 $0 37 Contin ent Liabilities 38 Check if Co. chan ed Accts. II. PROFIT & LOST STATEMENT # of months Period Endin 39 Sales 40 COGS 41 Gross Profit $0 $0 $0 $0 42 SGA 43 Operatin Profit- $0 $0 $0 $0 44 Owners Sala 45 De r. & Amort. Ex . 46 Interest Ex ense 47 Rent 48 Other Inc./Exp. 49 EBT $0 $0 $0 $0 50 Income Taxes 51 PAT $0 $0 $0 $0 III. OPERATING CYCLE 52 Days Receivable 53 Days Inventory 54 Days Payable 55 Da s Accrual 56 Operatin C cle IV. RATIO ANALYSIS 57 Sales Growth Ratio 58 Workin Capital $0 59 Current Ratio 60 Quick Ratio 61 DebUEqui Ratio $0 $0 $0 V. CAPITAL EXPENDITURES 62 Endin Net Fixed Assets $0 $0 $0 63 Depreciation $0 $0 $0 64 Be inning Net Fixed Assets 65 Net Capital Expenditures VI. RECONCILIATION OF NET WORTH 66 Endin Net Worth $0 $0 $0 67 PAT $0 $0 $0 68 Beginning Net Worth $0 69 New Equity (Distributions) $0 VII. CASH FLOW STATEMENT Year 2 Year 3 Year 4 70 PAT $0 $0 $0 71 Depr. & Amort $0 $0 $0 71 Gross Funds Flow • $0 $0 $0 OPERATING USES Year 2 Year 3 Year 4 OPERATING SOURCES Year 2 Year 3 Year 4 73a Incr. Receivables 73b Decr. Receivables 74a Incr. Invento 74b Decr. Invento 75a Decr Pa ables 75b Incr. Pa able 76a Decr Accruals 76b Incr. Accruals 77a Opperatin Uses $0 $D $0 77b O eratin Sources $0 $0 $0 77a Opr. Uses $0 $0 $0 77b Opr. Sources $0 $0 $0 78 O r. Cash Flow $0 $0 $0 NON-OPR. USES NON-OPR. SOURCES 79a Make Capital Exp 79b Sell Fixed Assets 80a Buy Other Assets 80b Sell Other Assets 81a Incr. OtherClA 81b Decr. Other C/A 82a Repa N/P Bank 82b Borrow N/P Bank $0 83a Repa N/P Other 83b Borrow N/P Other 84a Repa LTD 84b Borrow LTD 85a Repay Sub. Off Dt. 85b Incr. Sub. Off. Debt 86a Distrib. to Owner 86b Invest New Equity 87a Incr. Notes/Rec 87b Decr. Notes/Rec. 88a Decr. Taxes/Pa 88b Incr. Taxes/Pa able 89a Decr. Other Liab. 89b Incr. Other Liab. 90a Non-Opr. Uses $0 $0 $0 90b Non-Opr. Sources $0 $0 $0 90a Non-Opr. Uses $0 $0 $0 90b Non-O r. Sources $0 $0 $0 91 NET CASH FLOW $0 $0 $0 PERMANENT WORKING CAPITAL ANALYSIS WORKSHEET PART I: THE OPERATING CYCLE vear 1 vear 2 vear 3 vear 4 Days Receivable Da s Invento Days Payable Days Accrual Operatin C cle PART II: PERMANENT WORKING CAPITAL vear 1 vear 2 vear 3 vear 4 Accounts Receivable $0 $0 $0 $0 Invento $0 $0 $0 $0 Accounts Payable $0 $0 $0 $0 Accruals $0 $0 $0 $0 PWC $0 $0 $0 $0 Change in PWC Gross Funds Flow $0 $0 $0 Operating Cash Flow EXHIBIT G NAiVIE OF BUSINESS: DATE QUALITY INDICATOR CHECKLIST Good Bad Neutral Balance Sheet Does company collect? Are days A/R neazly a ual to collection terms? Does company pay? Are days A/P about equal to payment term? Is A/P greater than or equal to inventory? Are day's accruals about equal to the payroll cycle? Are taxes current? Does company control inventory? Are da s inventory neazly a ual to the inventory cycle? Are officers committed? Are there notes receivable? Are there notes payable or subordinated officer debt? (officer debt is a good indicator if truly subordinated) Is debt/e uity ratio reasonable? Does company have a profitable operating history? Are retained earning ositive? Profit & Loss Statement Is company growing? Are sales risin ? Does company maintain margins? Is COGS/sales stable? Does company control overhead? Is SGA/sales profit/sales stable or falling? Is officer com ensation reasonable? Is company proftable? Is operating profit/sales stable or rising? Is EBT/sales stable or rising? Does company have any hidden cash flow? Are there any discretionary expenses available to repay debt? CEO RECOMMENDATON: APPROVED NOT APPROVED FLOYD BATISTE -CEO EXHIBIT H FORM OF ECONOMIC INCENTIVE CONTRACT 8~ LOAN AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION Executive Summary A narrative description of the property prepared after the contract is fully created to include: • Description of the business • Grant and loan provided • Promised performance • Reporting requirements. GG Doc. k473091 I vemm~ r ECONOMIC INCENTIVE & LOAN AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION AND INTRODUCTION ............................ AGREEMENT DATES ................... PARTIES ........................................ PROMISED PERFORMANCE...... (A) (B) (C) PERFORMANCE 8Y PAEDC PERFORMANCE BY CREDITS -SUBSTITUTE PERFORMANCE 'S PERFORMANCE MILESTONE SCHEDULE.......... PAEDC'S CONDITIONAL OBLIGATIONS AND LIMITED LIABILITY LIQUIDATED DAMAGES FOR BREACH OF AGREEMENT BY_ RECORDS! INSPECTION /PAEDC AUDIT ....................................... HOLD HARMLESS .............................................................................. SUBCONTRACTS ................................................................................ CONFLICT OF INTEREST /DISCLOSURE OBLIGATION ................. NONDISCRIMINATION !EMPLOYMENT !REPORTING ................... H RITY ................... -1 - ................... -1 ................... -1 ................... - 2 - ................................... - 2 - ................................... - 2 - ............... - 3 - ...................................... - 3 - ...................................... - 4 - ...................... - 5 - ...................................... - 5 - ...................................... - 7 - ...................................... - 7 - ...................................... - 7 - LEGAL AUTO ................................................................................. NOTICE OF LEGAL OR REGULATORY CLAIMS AGAINST CHANGES AND AMENDMENTS .............................................................. DEFAULT !TERMINATION ....................................................................... AUDITS ............................................................................... ENVIRONMENTAL CLEARANCE REQUIREMENTS .............................. ORAL AND WRITTEN AGREEMENTS /PRIOR AGREEMENTS..:......... VENUE ............................................:..................................:....................... ADDRESS OF NOTICE AND COMMUNICATIONS .................................. CAPTIONS ................................................................................................. COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS ................ CONDITIONS PRECEDENT ...................................................................... ATTORNEY APPROVALS ......................................................................., AGREEMENT EXECUTION ...................................................................... Exhibit "A1" Commercial Promissory Note for Loan Exhibit "A2" Commercial Promissory Note for Conditional Grant Exhibit "B" Deed of Trust Exhibit "C" Commercial Security Agreement Exhibit "D" UCC-1 Financing Statement Exhibit "E" Manufacturing Equipment List Exhibit "F" Manufacturing Equipment Lease Exhibit "G" Certification Regarding Lobbying Exhibit "H" Guaranty Agreement Exhibit "I" Guaranty Agreement Exhibit "J" Compliance Statement ,............. - 8 - .............. - 8 - ,............. - 9 - .............. - 9 - ............ -10 - ............ -10 - ............ -11 - ............ -12 - ............ -12 - ............ -12 - ............ -12 - ............ -13 - ............ .13 - ............ .13 - ............ .14 - ii ~~~a~ ro, ECONOMIC INCENTIVE CONTRACT ~ LOAN AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION AND INTRODUCTION (Description of legal entities and summary of business planned) e.g. (" ") is a Texas ,doing business in Port Arthur, Texas. will manufacture small- to medium-sized metal buildings and sells the majority of its product outside the Port Arthur area. Current market demand for the product is such that plans to initiate and expand operation of its facility in Port Arthur. The City of Port Arthur Section 4A Economic Development Corporation ("PAEDC") will assist in this business endeavor by providing conditional grant and loan funds in exchange for the promise of fulltime permanent jobs. AGREEMENT DATES AGREEMENT START DATE 1. This Economic Incentive Contract and Loan Agreement ("Agreement") is entered into with an effective date of , 2006, but in no.case later than 200_, by and between the PAEDC and AGREEMENT END DATE 2. This Agreement expires the earlier of , 20 , or 30 days after 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. City of Port Arthur Section 4A Economic Development Corporation ("PAEDC"), located at 4173-39`" Street, Port Arthur, Texas, 77642, is a corporation. It is duly 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 President and Secretary of the PAEDC Board have the authority to execute this Agreement. 4. registered agent in Texas for _ Texas 77 (". ") is a Texas .The is at , Ex. "Al" - 1, - Version for PRObIISED PERFORD~fANCE 5. The parties agree to perform as follows. (d) PERFORMANCE BY PAEDC i. PAEDC shall loan the amount of $ ,according to the terms in the Commercial .Promissory Note contained in Exhibit "A1", with material terms being _ percent ~%) interest for a term of _ (~ years. ii. PAEDC shall conditionally grant up to $ ,subject to the conditions and limitations herein,- which is not required to pay back unless breaches this Agreement. If breaches this Incentive Agreement then the grant will become a loan as provided in Exhibit "A2". iii. PAEDC will use its best efforts to pay invoices, or reimburse for its payments, for the equipment, machinery, real estate improvements and/or working capital, hereinunder "assets", listed in Exhibit "E", within forty-five (45) days of receipt. HOWEVER, PAEDC will only release funds up to the value of the property to which PAEDC holds the superior Deed of Trust. Initially, PAEDC will only release up to $ ,based on the Jefferson County Appraisal District's public information on assessed value. As makes improvements to the property and can demonstrate increased property value, to the satisfaction of PAEDC Staff, PAEDC will release more funds. These payments are PAEDC's only obligations. (b) PERFORMANCE BY (1) By the end of the Agreement term, promises to employ ( 1 employees at an annual total payroll of $180,000,' as measured by Internal Revenue Service (IRS) forms W-2 and W-3. (2) promises that at least fifty percent (50%) of its employees will be Port Arthur residents. (3) Contemporaneously with PAEDC's loan to The Deed of Trust is contained in Exhibit "B". in Port Arthur, Texas. (4) shall use the Grant monies provided by the PAEDC exclusively for the assets that are not materially differentz from the list of t Payroll is based on 2080 hours per yeaz and a starting wage of $ per hour, per 's application. z "Materially different" is defined as a change in the type of asset that changes the overall business plan in - 2. - ~'ersian for assets provided to PAEDC by , a copy of which is attached as Exhibit "E". With each invoice or request for reimbursement sent to PAEDC, will include a copy of the Exhibit "E" list with the specific asset highlighted. This will enable PAEDC to verify compliance with the list in Exhibit "E". (5) On demand by PAEDC and in response to 's failure to achieve a performance milestone, shall rp oxide PAEDC with reasonable assurances proposed by and 'rea§onably acceptable to PAEDC, that it has both the intention and the capabilities to perform fully its contractual obligations. (C) CREDITS -SUBSTITUTE PERFORMANCE 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 breaches the Agreement. (1) Starting on the effective date of the Agreement and for as long as performs as specified in 5(b)(1), will receive a $1.00 credit for each $ of payroll paid to residents of Port Arthur. Payroll to non- residents cannot be credited. (2) Total credit cannot exceed $ (3) will forfeit any credits it earned during a period for which a report is scheduled but fails to issue it. (4) Once has earned credits equal to $ this Agreement and the Term thereof shall terminate pursuant to Section 2 hereinabove; however, the contemporaneous Note (Exhibit "A1") and superior Deed of Trust (Exhibit "B") shall remain in effect until the Note is paid in full. 'S PERFORMANCE MILESTONE SCHEDULE 6. Although failure to achieve a performance milestone is not a breach of contract, a failure is grounds for PAEDC to withhold further payments to and/or demand reasonable assurances3 from 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. _'s performance milestones are contained in the table on the following page. place at the time that this contract was executed. Examples of reasonable assurances are copies of pending contracts and customer commitment letters. _ 3 _ vmm~r, EXAMPLE OF 'S PERFORMANCE MILESTONE SCHEDULE Dea line Milestone (a) Apr 30, 2006 e.g., Issue a status report4 to PAEDC's Chief Executive Officer ("CEO") for the period from the effective date of-this Agreement to March 31, 2006. (b) June 30, 2006 e.g., Achieve performance of 4 full-time, permanent employee; Annualized payroll of $18,000. (c) Feb 28, 2007 e.g., Status reports for January 1, 2006 to December 31, 2006. (d) (e) (fl (g) I I (h) (i) a) ~ (k) (I) (m) (n) (o) (P) (q) PAEDC'S CONDITIONAL OBLIGATIONS AND LIMITED LIABILITY 8. It is expressly understood. and agreed by the parties hereto that the PAEDC funding obligations herein are contingent upon the actual receipt of adequate sales tax ° Status reports shall include copies of invoices and check payments for assets purchased with PAEDC funds during the reporting period, quarterly balance sheets, quarterly profit and loss statements, and employee reports. As to job creation performance, interim status reports shall include documentation substantiating the accuracy of such reports, including, for example, 941 payment reports, Texas Workforce Commission reports, or other such reports confirming total jobs, payroll and other relevant information. Driver's license information is appropriate for interim reporting of Port Arthur residents hired. The reporting objective is to include documentation necessary for PAEDC to veri said report without further outside inquiry. e End of February status reports shall also include identity of all shareholders who own more than five percent (5%) of the company. Year end reports shall be substantiated with IRS Forms W-2 and W3. 4 - Version for revenue funds to meet the PAEDC's liabilities under this Agreement. If adequate funds are not available to make payments under this Agreement, the PAEDC shall notify 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 or to any. third parties for failure to make payments to under the terms and conditions of this Agreement. 9. The PAEDC shall not be liable, in Agreement or otherwise, to , or to any person or entity claiming by or through ,for any expense, expenditure or cost incurred by or on behalf of related to the project made the basis of this Agreement. The PAEDC's sole liability/obligations, if any, shall be to and shall be limited to the conditional funding obligations detailed in this Agreement. 10. shall not use the funds herein for any purpose(s) other than that specRically disclosed herein and as further disclosed within that certain application made by or on behalf of ,which application is incorporated herein for all purposes. 11. Funds granted by the PAEDC hereunder shall not be utilized by for repayment of costs, expenditures or expenses incurred rip or to the date of this Agreement. LIQUIDATED DAMAGES FOR BREACH OF AGREEMENT BY 12. In the event 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 in the executed Commercial Promissory Note contained in Exhibit "A2." 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 customary attomev's fees and court costs incurred in collection of said obligation and such remedies as are 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 I PAEDC AUDIT 14. must establish and maintain sufficient records, as reasonably determined by the PAEDC, to account for the expenditure and utilization of funds received by from PAEDC under the terms and conditions of this Agreement. . - 5 - ~~~ ~, 15. 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 's application. shall provide reports of utilization of said funds, as reasonably requested by the PAEDC, and upon final termination of this Agreement. 16. Upon ten-day (10-day) advance notice, shall give the PAEDC, or any of its duly 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 .Such rights to access shall continue as long as the records are maintained by agrees to maintain such records in an accessible location. All information obtained by the PAEDC, or its duly authorized representatives, shall be regarded as the confidential business information of and the PAEDC shall take reasonable measures to protect such ihfomtation 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). 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 (or any party working by, through or under). 17. All records pertinent to this Agreement shall be retained by 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 detailing 's compliance with its obligations provided herein. Further, in the event any litigation, claim or audit arising out of or related to this Agreement is instituted before the expiration of the three (3) year 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. 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 the parties hereto that if fails to submit to PAEDC in a timely and satisfactory manner any report required by this Agreement, PAEDC may, at its sale discretion, withhold further payments to and/or demand assurances that can and will fully perform its contractual obligations. If fails to provide adequate assurances then is in breach and any monies advanced by PAEDC automatically become a loan. If PAEDC withholds such payments, it shall notify 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 are fulfilled by 20. The PAEDC reserves the right, from time to time, to carry out Feld inspections/audits to ensure compliance with the requirements of this Agreement. After - 6 - ~eR,o~:o~ completion of any such audit, the PAEDC may provide with a written report of the audit findings. If the audit report details deficiencies in 's performance under the terms and conditions of this Agreement, the PAEDC may establish requirements for the timely correction of any such deficiencies by HOLD HARMLESS 21. agrees to hold harmless the PAEDC and the City of Port Arthur from any and all claims, demands, and causes of action of any kind 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 grant 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. SUBCONTRACTS 22. may not subcontract for performance credits described in this Agreement without obtaining PAEDC's written approval, which may be withheld for any reason. shall only subcontract for performance credits described in this Agreement after has submitted a Subcontractor Eligibility Request, as specified by PAEDC, for each proposed subcontract, and has obtained PAEDC's prior written approval. , in subcontracting for any performances described in this Agreement, expressly understands that in entering into such subcontracts, PAEDC is in no way liabl"e to 's subcohtractor(s). 23. In no event shall PAEDC's prior written approval of a subcontractor's eligibility, be construed as relieving of the responsibility for ensuring that the performances rendered under all subcontracts are rendered so as to comply with all terms of this Agreement, as if such performances rendered were rendered by PAEDC's approval does not constitute adoption, ratification, or acceptance of 's or subcontractor's performance hereunder: PAEDC maintains the right to insist upon '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 to PAEDC under this Agreement. 24. , 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 INTEREST! DISCLOSURE OBLIGATION 25. Cohflict of Interest: 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 ,its agents, employees or representatives, 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. Disclosure: In conjunction with execution of this Agreement, has fully disclosed to PAEDC all known and potential owners of interests in (whether stockholder, manager, member or otherwise). In the event of any change in ownership or control of of five percent (5 %) or greater, shall notify PAEDC in writing: Further, 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 party with a conflict of interest obtains or proposes to obtain a financial benefit, direct or indirect, from Failure to provide said notice immediately or no later than five (5) business days after receipt of information shall constitute a default herein. NONDISCRIMINATION /EMPLOYMENT /REPORTING 27. 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, opporturiities for training and employment arising in connection with the planning and carrying out of any project assisted with PAEDC funds provided under this Agreement be given to Port Arthur residents; and (b) To the greatest extent feasible, Agreements for work to be performed in connection with any such project be awarded to Port Arthur residents and businesses, including, but not limited to, individuals or firms doing business in the field of planning, consulting, design, architecture, building construction, rehabilitation, maintenance, or repair, which are located in or owned in substantial part by persons residing in the City of Port Arthur. (c) If 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. LEGAL AUTHORITY 28. (company) assures and guarantees that (person) possesses legal and/or corporate authority to enter into this Agreement, receive funds authorized by this Agreement, and to perform the services 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. ' O - Version far 29. The person or persons signing and executing this Agreement on behalf of or representing themselves as signing and executing this Agreement on behalf of , do hereby warrant and guarantee that he, she, or they have been duly authorized by to execute this Agreement on behalf of and to validly and legally bind to all terms, performances, and provisions herein set forth. NOTICE OF LEGAL OR REGULATORY CLAIMS AGAINST 30. shall give PAEDC immediate notice in writing of 1) any legal or regulatory action, including any proceeding before an administrative agency filed against directly or indirectly; and 2) any material claim against which may impact continued operations. For purposes herein, "material° claims shall mean claims in excess of $5,000. Except as otherwise directed by PAEDC, shall furnish immediately to PAEDC copies of all pertinent documentation of any kind received by with respect to such action or claim. CHANGES AND AMENDMENTS 31. Except as spec~cally 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 Board of Directors 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 ,and the assurances and certifications made to the City of Port Arthur with regard 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 all 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 op IICV directives which serve to interpret, or clarify performance requirements under this Agreement. Such policy directives shall be promulgated by the PAEDC Board of Directors in the form of PAEDC issuances, shall be approved by the City Council and shall have the effect of qualifying the terms of this Agreement and shall be binding upon as if written herein. 33. Any alterations, additions, or deletions to the terms of this Agreement which are required by changes in Federal, state law or local law are automatically incorporated into this Agreement without written amendment hereto, and shall become effective on the date designated by such law or regulation. 9 - v-rse~ r DEFAULT I TERMINATION 34. In the event of default of any of the obligations of detailed herein or in the event of breach of any of the representations of or warranties of either detailed herein or in '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 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 Loan/Collateral Documents; (c) Withhold, whether temporarily or otherwise, disbursement of grant proceeds pending correction of the deficiency(s) by ; (d) 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 warranties contained within this Agreement and 's application to the PAEDC; (e) Withhold and/or disallow further PAEDC incentives to ;and (f) 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 terminated at any time when both parties agree, in writing, to the terms and conditions of any such voluntary termination. AUDITS 36. If directed by PAEDC Board, 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) 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 receives more than $50,000 in PAEDC financial assistance provided by PAEDC in the form of grants, - 10 - ~~o~ fay contracts, loans, loan guarantees, property, cooperative agreements, interest subsidies, or direct appropriations. Backup documentation regarding actual expenditures shall be provided by Said audit must be received and accepted by the Chief Executive Officer of PAEDC and/or the PAEDC Board. (b) At the option of ,each audit required by this section may cover either 's entire operations or each department, agency, or establishment of which received, expended, or otherwise administered PAEDC funds; (c) Unless otherwise specifically authorized by PAEDC in writing, 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. (d) As a part of its audit, shall verify that the expenditures were exclusively for the assets listed in Exhibit "E". Any discrepancies in excess of $500 shall be specifically documented in writing. 37. understands and agrees that it shall be liable to reimburse immediately PAEDC for any costs disallowed pursuant to financial and compliance audit(s) of funds received under this Agreement and it may be required to submit formal audits at 's expense. 38. shall take all necessary actions to facilitate the performance of any and all such audits, whether annual, mandatory or otherwise requested under this Agreement. 39. Subject to financial privacy requirements of 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 under this Agreement until PAEDC has received certification from 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 specrfy the content and form of such certification. ENVIRONMENTAL CLEARANCE REQUIREMENTS 41. understands and agrees that by execution of this Agreement, 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. further understands and agrees that shall make all reasonable efforts to assist - 11 - ~~~o~ fa. 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 AGREEMENTS 42. All 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 in accordance with this Agreement: Exhibit "A1" Commercial Promissory Note for Loan Exhibit "A2" Commercial Promissory Note for Conditional Grant Exhibit "B" Deed of Trust Exhibit "C" Commercial Security Agreement Exhibit `D" UCC-1 Financing Statement Exhibit "E" Manufacturing Equipment List Exhibit "F" Manufacturing Equipment Lease Exhibit "G" Certification Regarding Lobbying Exhibit "H" Guaranty Agreement Exhibit "I" Guaranty Agreement Exhibit "J" Compliance Statement 's Application to PAEDC for funding, by reference VENUE 44. For purposes of litigation that may accrue under this Agreement, venue shall lie in Jefferson County, Texas, where substantially all the performance will occur. ADDRESS OF NOTICE AND COMMUNICATIONS City of Port Arthur Section 4A Economic Development Corporation 444 4th Street Port Arthur, Texas 77640 ATTN: Floyd Batiste, Chief Executive Officer Texas 77 ATTN: 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 paragraph or in any way determine its interpretation or application. - 12 - v~ap"r. COMPLIANCE WITH FEDERAL STATE AND LOCAL LAWS 46. 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 under this Agreement. Upon request by PAEDC and by the City, shall furnish satisfactory proof of its compliance herewith. CONDITIONS PRECEDENT 47. This agreement has no legal consequerices, and neither party shall rely on the agreement, unless and until a. Both the PAEDC Board and the Port Arthur City Council approve the Agreement in its final executed form. b. c. d. ATTORNEY APPROVALS APPROVED AS TO FORM: Guy Goodson, General CounseFfor PAEDC VERIFIED AS CONSISTANT WITH CITY COUNCIL RESOLUTION: Resolution Number: Mark T. Sokolow, City Attorney - 13 - ~en~e~ eo. AGREEMENT EXECUTION CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION SIGNED AND AGREED TO on the day of , 2006. ay: ay: President Eli Roberts Secretary Linda Spears Witness Witness SIGNED AND AGREED TO on the day of , 200_ a Texas Position Witness - 14 - v~m~ ra, EXHIBIT "A1" Port Arthur, Texas Effective Date: the Principal Amount: _ ($ ) AND /100 DOLLARS Term of the Loan: U years from effective date. Payment Schedule: Monthly until principal is paid fully, starting on the 15"' day of .2007. FOR VALUE RECEIVED, the undersigned "Maker', promises to pay to Lender, at its office at P.O. Box 1089, Port Arthur, Texas, 77646-1089, 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 America, together with interest thereon from the date hereof until maturity at the rate of _ percent L%) 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 (15%) per annum, or to the maximum extent allowed by law (whichever is _~ as may hereafter be in effect, payable on demand after maturity. This note is due and payable as follows: Eighty four (84) equal monthly installments of principal and interest paid on the fifteenth of each month. 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 at the address designated below for receipt of notice (or at such other address as Maker may, from time to time, designate in writing to the holder hereof for receipt of notices hereunder). Any such notice personally delivered shall be effective as of the date of delivery, and any notice transmitted by mail, in accordance with the foregoing provisions, shall be deemed to have been given to and received by Maker as of the date 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 entitled to the benefits of all other security agreements, pledges, collateral assignments, deeds of trust, guaranties, mortgages, assignments, and lien instruments, 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 those hereafter executed. If any installment or payment of principal or interest of this note is not paid when due or any drawer, acceptor, endorser, guarantor, surety, accommodation party or other person now or hereafter primarily or secondarily liable 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 to or commenced against Maker or any other liable party, or with respect to any property of any of them; or if any governmental authority or any court at the instance thereof shall take possession of any COMMERCIAL PROMISSORY NOTE day of 200 Ex. "AP' -), - Version for 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 attachment 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 any other liable party is pprimarily or secondarily liable shall not be paid when due or shall become due and payable by acceleration of maturity thereof, or if any event or condition shall occur which shall permit the holder of any such indebtedness to declare it due and payable upon the lapse of time, giving of notice or otherwise; or if Maker or an other liable party (if other than a natural person) shall be dissolved, wound up, liquidatedyor otherwise terminated, or a party to any merger or consolidation without the written consent of Lender; oi• if Maker or any other liable party shall sell substantially all or an integral portion of its assets without the written consent of Lender, or ff Maker or any other liable party fails to furnish financial information requested by Lender; or if Maker or any other liable party furnishes or has furnished any financial or other information or statements which are misleading in any respect; or if a default occurs under any instrument 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 instrument 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 nonppayment, presentment, protest or notice of dishonor, all of which are hereby expressly waived by Maker and each other liable party. Lender may waive any default without waiving any prior or subsequent default. If this note is not paid at maturity whether by acceleration or otherwise, and is placed in the hands of any attorney for collection, or suit is filed hereon, or proceedings. are had in probate, bankruptcy, receivership, reorganization, arrangemeht 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 intention 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 agreement 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 law that is taken, reserved, contracted for, charged 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 maximum 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 the 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 prepayment 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, charged or received under this note or under any of the other aforesaid agreements or otherwise in connection with this note, that are made for the purpose of determining whether such rate exceeds the maximum lawful rate shall be made, to the extent permitted gy applicable law, by amortizing, prorating, allocating, and spreading such interest over the entire 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 note before maturity without Ex. "Al" - 2 - Version for penalty. No partial prepayment shall reduce, postpone or delay the obligation of Maker to continue paying the installments herein provided on their respectroe due dates following any such partial prepayment until this note is fully paid. The Maker shall be directly and primarily liable for the payment of all sums called for hereunder; and, except for notices specifically required to be given by the holder hereof to Maker pursuant to the earlier provisions of this note, Maker and each other liable party hereby expressly waive demand, presentment for payment, notice of nonpayment, protest, notice of protest, notice 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 nghts against any security therefor prior to enforcing payment of this Note by any other liable party. SIGNED AND AGREED TO on the day of , 2006. a Texas By: Signature Its: Position Ex. "AI" - 3 - Version for ACKNOWLEGEMENT THE STATE OF TEXAS COUNTY OF JEFFERSON BEFORE ME, THE UNDERSIGNED 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 MY HAND AND SEAL OF OFFICE, this the day of 200 Notary Public, State of Texas MAKERS' ADDRESS FOR RECEIPT OF NOTICE: c/o Texas 77_ Ex. "AI" a Texas - 4 - Version for EXHIBIT "A2" CONDITIONAL COMMERCIAL PROMISSORY NOTE Port Arthur, Texas This COMMERCIAL PROMISSORY NOTE becomes effective on the date when a Texas (hereinafter called "Maker") reac es that certain Economic Incentive Contract an Loan Agreement between the City of Port Arthur Section 4A Economic Development Corporation (hereinafter called "Lender") and Maker, dated _ , 2006. Effective Date of Note: the day of , 200_ ("date of breach") Principal Amount: $ which is $ 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 Loan: Three years from effective date. Payment Schedule: Monthly until principal is paid fully. FOR VALUE RECEIVED, the undersigned "Maker", promises to pay to Lender, at 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 America, together with interest thereon from the date hereof until maturity at 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 (15%) per annum, or to the maximum extent allowed by law (whichever is greater) as may hereafter be in effect, payable on demand after maturity. This note is due and payable as follows: Thirty-six (36) equal monthly installments of principal 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 td 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 at the address designated below for receipt :of notice (or at such other address as Maker may, from time to time, designate in venting to the holder hereof for receipt of notices hereunder). Any such notice personally delivered shall be effective as of the date of delivery, and any notice transmitted by mail, in accordance with the foregoing provisions, shall be deemed to have been given to and received by Maker as of the date 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 entitled to the benefits of all other security agreements, pledges, collateral assignments, deeds of trust, guaranties, mortgages, assignments, and lien instruments, 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 those hereafter executed. Ex. "A2" -). - Version for If any installment or payment of principal or interest of this note is not paid when due or any drawer, acceptor, endorser, guarantor, surety, accommodation party or other person now or hereafter primarily or secondarily liable 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 to or commenced against Maker or any other liable party, or with respect to any property of any of them; or if any governmental authority nr 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 attachment 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 any -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 event or condition shall occur which shall permit the holder of any such indebtedness to declare it due and payable upon-the lapse of time, giving of notice or otherwise; or if Maker or any other liable party (~f other than a natural person) shall be dissolved, wound up, liquidated or otherwise terminated, or a party to any merger or consolidation without the written consent of Lender; or if Maker or any other liable pa shall sell substantially all or an integral portion of its assets without the written consent of Lender, or if Maker or any other liable party fails to furnish financial information requested by Lender; or if Maker or any other liable party furnishes or has furnished any financial or other information or statements which are misleading in any respect; or if a default occurs under any instrument 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 instrument 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 nonpayment, presentment, protest or notice of dishonor, all of which are hereby expressly waived by Maker and each other liable party. Lender may waive any default without waiving any prior or subsequent default. If this note is not paid at maturity whether by acceleration or otherwise, and is placed in the hands of any attorney for collection, or sud is filed hereon, or proceedings are had in probate, bankruptcy, receroership, reorganization, arrangement or other legal proceedings for collection hereof, Maker and each other liable pafij agree to pay Lender its collection costs, including court costs and a reasonable amount for attorney's fees. It is the intention 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 agreement 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 law that is taken, reserved, contracted for, charged 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 maximum 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 the maximum amount allowed by applicable law, and excess interest, if any, provided for in this note or Ex. "A2" - 2. - Version for otherwise shall be canceled automatically as of the date of such acceleration or prepayment 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, charged or received under this note or under any of the other aforesaid agreements or othewwse in connection with this note, that are made for the purpose of determining whether such rate exceeds the maximum lawful rate shall be made, to the extent permitted by applicable law, by amortizing, prorating, allocatingg, and spreading such interest over the entire 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 note before maturity without penalty. No partial prepayment shall reduce, postpone or delay the obligation of aker to continue paying the installments herein provided on their respective due dates following any such partial prepayment until this note is fully paid. The Maker shall be directly and primarilyy liable for the payment of all sums called for hereunder; and, except for notices spec~cally required to be given by the holder hereof to Maker pursuant to the earlier provisions of this note, Maker and each other liable party hereby exaressly waive demand, presentment for payment, notice of nonpayment, protest, notice of protest, notice of intention to accelerate maturity, notice of acceleration of maturity, and al! 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 arty 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 party. SIGNED AND AGREED TO on the day of , 200 a Texas Signature Position Ex. "A2" - 3 - version for ACKNOWLEGEMENT THE STATE OF TEXAS + COUNTY OF JEFFERSON + BEFORE ME, THE UNDERSIGNED 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 MY HAND AND SEAL OF OFFICE, this the day of 200 Notary Public, State of Texas MAKERS' ADDRESS FOR RECEIPT OF NOTICE: c/o Texas 77 a Texas Ex. "A2" - 4 - Version for EXHIBIT "B" Date: DEED OF TRUST 2006 Texas 77_ ( County) KATHLEEN A. MCGLYNN Germer Gertz, L.L.P. P.O. Box 4915 Beaumont, Texas 77704 (Jefferson County) PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION ("PAEDC") 4173 39a` Street Port Arthur, Texas 77642 (Jefferson County) 2006 Grantor: Grantors' Mailing Address (including county): Trustee: Trustee's Mailing Address Beneficiary: Beneficiary's Mailing Address (including county): Note (No. 1) Date: Amount: Maker: Payee: Final Maturity Date: Note (No. 21 Date: Amount: Maker: Payee: Final Maturity Date: Ex. "B" PAEDC (Beneficiary) 20 2006 $ minus incentive credits earned by Maker according to that certain Economic Incentive Contract and Loan Agreement between Grantor and Beneficiary. PAEDC (Beneficiary) Three yeazs after the date of the Note. -I- Version for Pro a See Attachment for legal description. Physical address is ,Texas The Property covered by this Instrument includes the Land and the following items, whether now owned or hereafter acquired, all of which, including replacements and additions thereto, shall be deemed to be and remain part of the Property covered by this Instrument, and all rights, hereditaments 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 complete and comfortable ase 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; (f) 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, instruments, 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 connection 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 pernuts, .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, utility construction agreements with any governmental authority, including municipal utility districts, or with any utility companies (and ail refunds and reimbursements thereunder) relating to the Land or the Improvements; (k) all proceeds arising from or by virtue of the sale, lease or.other disposition of the Land or the Improvements; (1) all proceeds (including premium refunds) of each policy of insurance relating to the Land and the Improvements; (m) all proceeds 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 orquasi-public use under any law; Ex. "B" - 2 - Version for (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 securities 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 declazant or developer, if applicable. Prior Lien(s) (including recording information): None 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 wan•ants and agrees to defend the 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 and condition; 2. pay all taxes and assessments on the property when due and by January 31 of the yeaz immediately following, furnishing Beneficiary copies of tax receipts showing that all 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 insurance policy that a. covers all improvements for their full insurable value as determined when the policy is issued and renewed, unless Beneficiary approves a smaller amount in writing; b. contains an 80% coinsurance clause; c. provides fue 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 Beneficiazy may reasonably require; 5. comply at all times with the requirements of the 80% coinsurance clause; 6. deliver the insurance policy to Beneficiary and deliver renewals to Beneficiary at least ten days before expiration; Ex. "B" - 3 - Version for keep any buildings occupied as required by the insurance policy; and i?: 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. yr~ticaac~r's~ Rights 1. Beneficiary may appoint in writing a substitute or successor trustee, succeeding to all rights and responsibilities of Trustee; 2. If the proceeds of the note are used to pay any debt secured by prior liens, Beneficiary is subrogated to all of the rights and liens of the holders of any debt so paid; 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 ~e applied to reduce Grantor's obligation under Notes or Deed of Trust; 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. ~. If Grantor defaults on the note or fails to perform any of Grantor's obligations or if default occurs on a prior lien note or other instrument, and the default continues after Beneficiary gives Grantor notice of the default and the time within which it must be cured, as may be required by law or by written agreement, then Beneficiary may: a. Declare the unpaid 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). e':-ustee's Duties If requested by Beneficiary to foreclose this lien, Trustee shall: .. 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. - 4 - Version £or Pro e See Attachment for legal description. Physical address is ,Texas The Property covered by this Instrument includes the Land and the following items, whether now owned or hereafter acquired, all of which, including replacements and additions thereto, shall be deemed to be and remain part of the Property covered by this Instrument, and all rights, hereditaments and appurtenances pertaining thereto, all of which aze refen•ed 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 complete 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; j (f) all Grantor's rights (but not Grantor's obligations) under any contracts relating to the Land or the Improvements; j (g) all deposits (including tenant security deposits), bank accounts, funds, instruments, -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 connection with any such construction contracts, and the proceeds of such bonds), architectural 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; Q) all development rights, utility commitments, water and wastewater taps; capital improvement project contracts, utility 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 Improvements; (k) all proceeds arising from or by virhxe of the sale, lease or other disposition of the Land or the Improvements; (1) all proceeds (including premium refunds) of each policy of insurance relating to the Land and the Improvements; (m) all proceeds 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; Ex. "B" - 2 - Version for (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 securities 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 character 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. Prior Lien(s) (including recording information): None 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 the 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 and condition; 2. pay all taxes and assessments on the property when due and by January 31 of the yeaz immediately following, famishing Beneficiary copies of tax receipts showing that all 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 insurance policy that a. covers all improvements for their full insurable value as determined when the policy is issued and renewed, unless Beneficiary approves a smaller amount in writing; b. contains an 80% coinsurance clause; c. provides fire and extended coverage, including windstorm coverage; d. protects Beneficiary with a 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 Beneficiazy may reasonably require; 5. comply at all times with the requirements of the 80% coinsurance clause; 6. deliver the insurance policy to Beneficiary and deliver renewals to Beneficiary at least ten days before expiration; Ex. "B" - 3 - Version for 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 substitute or successor trustee, succeeding to all rights and responsibilities of Trustee; 2. If the proceeds of the note are used to pay any debt secured by prior liens, Beneficiary is subrogated to all of the rights and liens of the holders of any debt so paid; 3. Beneficiary 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; 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 Beneficiazy, the full amount of principle, interest, attorney's fees, and other chazges due and unpaid; c. Any amount required by law to be paid before payment to: Grantor; and d. To Grantor, any balance. Ex. "B" - 4 - Version for 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 first to dischazge that portion. 6. Grantor assigns to Beneficiary all sums payable to or received by Grantor from condemnation of all or part of the property, from private sale in lieu of condemnation, and from damages caused by public works or construction on or neaz the property. After deducting any expenses incurred, including attorney's fees, Beneficiary may release any remaining sums to Grantor or apply such sums to reduce the note Beneficiary shall not be liable for failure to collect or to exercise diligence in collecting any such sums. 7. Grantor assigns to Beneficiary absolutely, not only as collateral, all present and future rent and other income and receipts from the property. Leases aze not assigned. Grantor warrants the validity and enforceability of the assignment. Grantor may as Beneficiary's licensee collect rent and other income and receipts as long as Grantor is not in default under the note or this deed of trust. Grantor will apply all rent and other income and receipts to payment of the note and performance of this deed of trust, but if the rent and other income and receipts exceed the amount due under the note and deed of trust, Grantor may retain the excess. If Grantor defaults in payment of the note 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 lessor or landlord with respect to any occupant of the property. Beneficiazy may exercise Beneficiary's rights and remedies under this paragraph without taking possession of the property. .Beneficiary shall apply all rent and other income and receipts collected under this paragraph first to expenses incurred in exercising Beneficiary's rights and remedies and then to Grantor's obligations under the note and this deed of trust in the order determined by Beneficiazy. Beneficiary is not required to act under this paragraph, and acting under this pazagraph does not waive any of Beneficiary's other rights or remedies. If Grantor becomes a voluntary or involuntary bankrupt, Beneficiary's filing a proof of claim in bankruptcy will be tantamount to the appointment of a receiver under Texas law. 8. Interest on the debt secured by this deed of trust shall not exceed the maximum amount of nonusurious interest that may be contracted for, taken, reserved, chazged, 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 Ex. "B" - S - Version for be canceled automafically 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. I1. 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 aze 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 fitle by reason of the death of a Maker or 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 INCENTIVE CONTRACT AND LOAN AGREEMENT OF EVEN DATE. By: By: Ex. "B" - 6 - Version for BEFORE ME, THE UNDERSIGNED 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 MY HAND AND SEAL OF OFFICE, this the day of 200 Notary Public, State of Texas BEFORE ME, THE UNDERSIGNED 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 MY HAND AND SEAL OF OFFICE, this the day of 200 Notary Public, State of Texas AFTER RECORDING RETT JRN TO: Kathleen A. McGlynn Germer Gertz, L.L.P. P.O. Box 4915 Beaumont, Texas 77704 Ex. "B" - 7 - Version for Attachment to Deed of Trust Le a~o~rtv Description Ex. "B" - $ - Version for EXHIBIT "C" COMMERCIAL SECURITY AGREEMENT Dated Debtor(sl 200 c,....._,.a n^_.... Port Arthur Economic Development Co oration ("PAEDC") 4173 39`" Street Texas 77 Port Arthur, Texas 77642 •° -° --~^•~• ^••_~_• _••_ _• •••_•_~ ~neremaaer recerrea m as "~ecurea razty") FOR VALUE RECEIVED, the receipt and sufficiency of which is hereby acknowledged, Debtor grants to Secured Parry the security interest (and the pledges and assignments as applicable) hereinafter set forth and agrees with Secured Party as follows: A. OBLIGATIONS SECURED. The fast priority lien and pledges and assignments as applicable granted hereby are to secure punctual payment and performance of the following: (i) certain promissory note(s) of even date herewith in the original principal sum of $200,000, executed by Debtor and payable to the order of Secured Party, and any and all extensions, renewals, modifications and rearrangements 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 to 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 joint and several (all of which are herein separately and collectively referred to as the "Obligations"). Debtor acknowledges 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 Party whether now in existence or hereafter arising. 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 Party a first priority lien in (and hereby pledges and assigns 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 INITIAL APPROPRIATE BLANKS) All Accounts. A security interest in all accounts now owned or existing as well as any and all that may hereafter arise or be acquired by Debtor, and all the proceeds and products thereof, including without limitation, all notes, drafts, acceptances, Ex. "C" - 1 - Version for instruments and chattel paper arising therefrom, and all returned or.repossessed goods arising 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 agreement attached or which may hereafter 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 lease 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 limitation, 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 at the following locations: (give legal address) The record owner of the real estate is: -0 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 located, including all tools, parts and accessories used in connection therewith. _~ General Intangibles. A security interest in all general intangibles and other personal property now owned or hereafter acquired by Debtor other than goods, accounts, chattel'paper, documents and instruments. _~ 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 a debt and Ex. °C" - 2 - Version for 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; all of Debtor's crops or livestock are presently located in the following counties: (give counties) 0 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 stock, new security or other properties or benefits to which the Debtor is or may hereafter become entitled to receive on account of said property. (give description) 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) _~ Instruments. A pledge and assignment of and security interest in all of Debtor's now owned or existing as well as hereafter acquired or arising instruments and documents. _0 Other. , A first priority lien on all of Debtor's interest, now owned or hereafter acquired, in and to , as detailed in that certain Incentive Contract and Loan Agreement between Debtor and Secured Party. Invoice for is attached. Model Number: Serial Number: 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, equipment, Fixtures, farm products, notes, drafts, acceptances, securities, instruments, chattel paper, insurance proceeds payable because of loss or damage, or other Ex. "C" - 3 - Version for property, benefits or rights arising therefrom, and in and to all returned or repossessed goods arising from or relating 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 parry, 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 Party's rights and remedies under this paragraph 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 warrants as follows: 1. Ownership; No Encumbrances: 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 charges, liens, security interests, adverse claims and encumbrances of any and every nature whatsoever. 2. No Financing Statements: There is no financing statement or similar filing now on file in any public office covering any part of the Collateral, and Debtor will not execute and there will not be on file in any public office any financing statement or similar filing except the financing statements filed or to be filed in favor of Secured Party. 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 similar document respecting Debtor, any provision of law, any order of court or governmental agency, or any indenture or other agreement to which Debtor is a party, or by which Debtor or any of Debtor's property is Ex. "C" - 4 - Version ror 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 indenture or other agreement, or result in the creation or imposition of any charge, lien, security interest, claim or encumbrance of any and every nature 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 Collateral 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 worn 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, licenses, registrations and certificates respecting the Collateral. 3. Assessments: Debtor shall promptly pay when due all taxes, assessments, license fees, registration fees, and governmental charges 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 charge, 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 counties designated at the beginning of this Agreement without Secured Parry's prior written consent. 6. No Transfer: Except as otherwise provided in this Agreement with respect to inventory, Debtor shall not, without the prior written consent of Secured 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. Ex. "C" - J - Version for 7. Notices and Reports: Debtor shall promptly notify Secured Party in writing of any change in the name, identity or structure of Debtor, any charge, lien, security interest, claim or encumbrance asserted against the Collateral, any litigation against Debtor or the Collateral, any theft, loss, injury or similar incident involving the Collateral, and any other material matter adversely affecting Debtor or the Collateral. Debtor shall furnish such other reports; information and data regarding Debtor's financial conditiori and operations, the Collateral and such other matters as Secured Party may request from time to time. 8. Landlord's Waivers: Debtor shall furnish to Secured Party, if requested, a landlord's waiver of all liens with respect to any Collateral covered by this Agreement that is or may be located upon leased premises, such landlord's waivers to be in such form and upon such terms as are acceptable to Secured Party. 9. Additional Filings: Debtor agrees to execute and deliver such financing statement or statements, or amendments thereof or supplements thereto, 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 Secured 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) discharge taxes, claims, charges, 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 insurance 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, registration, licensing or certification fees or other fees and charges 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 action. Debtor agrees to promptly reimburse Secured Party upon demand for any payment made or any expense incurred by the Secured .Party pursuant to this authorization. These. payments and expenditures, together with interest thereon from date incurred 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 all 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. Further Assurances: Debtor shall do, make, procure, execute and deliver all such additional and further acts, things, deeds, interests and assurances as Secured Patty may require from time so time to protect, assure and enforce Secured Party's rights and remedies. Ex. "C" - 6 - Version for 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), theft and other risks as Secured Parry 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 appear. All policies of insurance shall provide for ten (10) days written in;mum cancellation notice to Secured Parry and at the request of Secured Party 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 instruments. Secured Parry 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 Party 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 following provisions shall apply to all accounts included within the Collateral: 1. Definitions: The term "account", as used in this 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 ahe Uniform Commercial Code of Texas to become 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 warranted as to each and all of such accounts as follows: (a) each account and all papers and documents relating thereto are 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 clear of any charges, liens, security interests, adverse claims and encumbrances of any and every nature whatsoever. Ex. "C" - ~ - Version for 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 all proceeds of collection of accounts to Secured Party, to notify any and all account debtors to make payments of the 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 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 the 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 arising from any act or omission in connection therewith. 4. Identification and Assignment of Accounts: 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, confum, 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 the 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 other 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 Party 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 regarding an account or any other matter adversely -affecting an account. 6. Segregation of Returned Goods: Returned or repossessed goods arising from or relating to any accounts included within the Collateral shall if requested by Secured Party be held separate 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 Ex. "C" - 8 - Version for repossessed goods relating to accounts included in assignments or identifications made pursuant hereto. G. ADDITIONAL. PROVISIONS REGARDING INVENTORY. The following provisions shall apply to all inventory included within the Collateral: 1. Inventory Reports: Debtor will deliver to Secured Party, prior to the tenth (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 Parry, with respect to the preceding month or other applicable period, showing Debtor's opening inventory, 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. 2. Location of Inventory: Debtor will promptly notify Secured Party 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 Inventory: Unless and until the privilege of Debtor to use inventory in the ordinary course-of Debtor's business is revoked by Secured Party in the event of default or cif 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 are in the ordinary course of business, and may use and consume any raw materials or supplies that are necessary in order to carry on Debtor's business. A sale in the ordinary course of business does not include a transfer in partial or total satisfaction of a debt. 4. Accounts as Proceeds: All accounts that are 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 Ex. "C" - 9 - Version £or included within the Collateral (including securities hereafter acquired that are part of the Collateral), Debtor further represents and warrants (as of the time of delivery of same to Secured Parry) as follows: (a) such securities are genuine, validly issued and outstanding, fully paid and non-. assessable, and are not issued in violation of the preemptive rights of any person or of any agreement by which the issuer or obligor thereof or Debtor is bound; (b) such securities are 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 bf preparation and execution; and (d) Debtor acquired and holds the securities in compliance with all applicable laws and regulations. 2. Dividends and 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 shazes 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 part 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 Secured 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 direct the issuer or obligor to make all payments, dividends and distributions regarding the Collateral directly 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, regardless Of the medium in which paid and whether they are ordinary or extraordinary. Each issuer and obligor making 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 President 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 shareholders, 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 Ex. °C" - 1O - Version for 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 Party shall have no responsibility for ascertaining any maturities, calls, conversions, exchanges, offers, tenders, or similar matters relating to any of the Collateral or for informing Debtor with respect to any of such matters (irrespective of whether Secured Parry actually has, or may be deemed to have, knowledge thereof). The foregoing provisions of this paragraph 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 nominee. 6. Further Assurances: Debtor agrees to execute such stock powers, endorse such instruments, or execute such additional pledge agreements or other documents as may be required by the Secured Party in order effectively to grant to Secured Party the security interest in (and pledge and assignment of) the Collateral and to enforce and exercise Secured Party's rights regarding same. 7. Securities Laws: Debtor hereby agrees to cooperate fully with 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 Parry, agrees to effect and obtain such registrations, filings, statements, rulings, consents and other matters as Secured Party may request. 8. Power of Attorney: Debtor hereby makes, constitutes, and appoints Secured Party or its nominee, its true and lawful 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 the Securities Act of 1933 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 granted, as fully to all 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 Ex. "C" - 11 - Version £or 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 investment 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 law or regulation. Secured Party 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 clearly 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 mazket, and Debtor agrees that such private sales shall constitute a commercially reasonable method of disposing of the Collateral. I. ADDITIONAL PROVISIONS REGARDING CERTIFICATES OF DEPOSIT AND SIMILAR COLLATERAL. The following provisions shall -apply to certificates of deposit and similar 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 other penalty on such deposits, and, in connection therewith, cause payment to be made directly to Secured Party. 2. Notice to Third Party Issuer: With regard to any certificates of deposit or similar Collateral for which Secured Party is not the issuer, Debtor agrees to notify the issuer or obligor of the interests hereby granted to Secured Party and to obtain from such issuer or obligor acknowledgement of the interests in favor of Secured Party and the issuer's or obligor's agreement to waive in favor of Secured Parry any and all rights of set-off or similar 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 all 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 are received liy Debtor shall be held by Debtor in trust for Secured Party and immediately delivered to Secured Party to be held as part of the Collateral. 4. 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 Ex. "C" - 12 - Version for 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 Collateral 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). . 7. 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 teens of any evidence of indebtedness, indenture, loan agreement, security agreement 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 connection with this 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 furnish 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 bankruptcy, arrangement, 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 Party, 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 Due: 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 all of the rights and remedies provided for in this Agreement and in any other agreements executed by Debtor, the rights and remedies Of Ex °C" - 13 - Version for 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 to both parties, which Debtor agrees to do; (b) peaceably take possession of the Collateral and remove same, with or without judicial process; (c) without removal, render equipment included within the Collateral unusable, and dispose of the Collateral on the Debtor's premises; (d) sell, lease 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 market, 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 least fiye (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, leasing 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 to pay, shall constitute additional Obligations and shall be secured by and entitled to 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 applicafion 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 Ex. "C" - 14 - Version for EXHIBIT "D" UCC-1 Ex "D" - 1 - Version for EXHIBIT "E" ASSET LIST Ex "E" - 1 - Version Cor EXHIBIT "F" Manufacturing Equipment Lease Between City of Port Arthur Section 4A Economic Development Corporation and Panelized Systems Technology, L.L.C. This Equipment Lease Agreement (the "Agreement") is made and entered on 2006, by and between the City of Port Arthur Section 4A Economic Development Corporation (hereinafter "Lessor") and Panelized System Technology, L.L.C. (hereinafter "Lessee"), collectively referred to as the "Parties". Lessee Full Leaal Name: Panelized System Technology, L.L.C. Lessee Address: The Parties agree as follows: 1. EQUIPMENT: Lessor hereby leases to Lessee the equipment listed in the attached Table, hereinafter the "Equipment". At the time of Lease execution, Lessor has not acquired title to the Equipment. Lessee shall (1) be responsible for ordering the Equipment; (2) ensure each item is purchased in Lessor's name; and (3) negotiate a repurchase provision with each of the Equipment vendors, whereby vendors agree to repurchase the equipment-for a set price or prices. The total cost of the new Equipment shall not exceed THREE HUNDRED THOUSAND DOLLARS ($300,000), not including freight and installation, as provided in that certain Economic Incentive Contract and Loan Agreement of even date, hereinafter "Incentive Agreement". When Lessee places an order and again when the order is delivered to Lessee's manufacturing location, Lessee shall update the attached Table and send a true and correct copy to Lessor at P.O. Box 3934, Port Arthur, Texas, 77642, or at any other address later designated by Lessor, along with the corresponding purchase orders and/or invoices. Lessee shall keep copies of all documents sent to Lessor. 2. LEASE TERM: The Lease will start o execution of this Lease. The agreement wil as Lessee fully complies with this Lease sooner. n the first (1ST) day of the month following I continue for ten (10) years, or for as long and the Incentive Contract, whichever is Start Date: Planned End Date: 3. LEASE PAYMENTS: Lessee agrees to pay to Lessor as rent for the Equipment the amount of DOLLAR ($ "Rent") each in advance on the that is on the (day) of Rent payments shall be Ex. "F" - 1 - Version far sent to Lessor at P.O. Box 3934, Port Arthur, Texas, 77642 or at any other address later designated by Lessor. 4. LATE CHARGES: If any amount under this Lease is more than thirty (30) days late, Lessee agrees to pay a late fee equal to DOLLARS ($~ for each late. The late charge is due the same day the rent is paid. 5. SECURITY DEPOSIT: Prior to taking pdssession of the Equipment, Lessee shall deposit with Lessor, in trust, a security deposit of DOLLARS ($ ) as security for the performance by Lessee of the terms under this Lease and for any damages caused by Lessee or Lessee's agents to the Equipment during the Lease Term. Lessor may use part or all of the security deposit to repair any damage to Equipment caused by Lessee or Lessee's agents; however, Lessor is not just limited to the security deposit amount and Lessee remains liable for any balance. If Lessee breaches any terms or conditions of this Lease or breaches the Incentive Agreement, Lessee shall forfeit any deposit, as permitted by law, in additional to all other remedies available to Lessor. 6. DELIVERY: Lessee shall be responsible for the cost of shipping the Equipment from the vendor to Lessee's manufacturing location. 7. DEFAULTS: If Lessee fails to perform or fulfill any obligation under this Lease or under the Incentive Agreement, Lessee shall be in -default of both the Lease and the Incentive Agreement. Lessee-shall have seven 7 da s from the date of notice of default by Lessor to cure the default. In the event that Lessee does not cure default, Lessor may, at Lessor's sole option, (a) declare Lessee in default of the Lease; or (b) cure such default and the cost of such action may be added to Lessee's financial obligations under this Lease and the Incentive Agreement. In the event Lessor declares default, Lessor may, as permitted by law, take possession of the Equipment and sell it. Lessor may, at its sole option, hold Lessee liable for the difference between the price Lessor paid to acquire the Equipment and the repurchase price negotiated with the vendor, per Section 1, or the difference between the price paid and the price at which the Equipment actually sold, whichever difference is less, plus freight; however, it is Lessor's sole option whether to sell the equipment to the vendor or to another party. If Lessee shall become insolvent, cease to do business as a going concern or'rf a petition has been filed by or against Lessee under the Bankruptcy Act or similar federal or state statute, Lessor may immediately declare Lessee in default of this Lease. 8. POSSESSION AND SURRENDER OF EQUIPMENT: Lessee shall be entitled to possession of the Equipment upon delivery from the Vendor. At the expiration of the Lease Term, unless a Lease renewal is successfully negotiated, Lessee shall surrender the Equipment to Lessor by delivering the Equipment to Lessor or Lessor's agent, at a location identified by Lessor, in good condition and working order, ordinary wear and tear excepted, as it was at the commencement of the Lease. Ex. "F' - 2 - Version for 9. USE OF EQUIPMENT: Lessee shall only use the Equipment in a careful and proper manner and will comply with all laws, rules, ordinances, statutes and orders regarding the use, maintenance and storage of the Equipment. 10. CONDITION OF EQUIPMENT AND REPAIR: Upon delivery, Lessee or Lessee's agent shall inspect each item of the Equipment. Lessee acknowledges that the Equipment is in good and acceptable condition when Lessee signs the attached Table. If Equipment is not in good and acceptable condition then Lessee shall contact the appropriate vendor to have the condition remedied. Lessee or Lessee's agent agrees and acknowledges that all caution stickers/labels and required warnings are properly affixed to the Equipment and that Lessee shall be responsible for repairing the caution stickers labels and warnings if they become illegible or damaged in any way during the term of this Lease. 11. MAINTENANCE, DAMAGE AND LOSS: Lessee will, at Lessee's sole expense, keep and maintain the Equipment clean and in good working order and repair during the Lease Term. All risk of loss or damage to the equipment, accidental or otherwise shall be borne by Lessee. In the event the Equipment is lost or damaged beyond repair, Lessee shall pay to Lessor the replacement cost of the Equipment. If Lessor is forced to maintain or repair the equipment, because Lessee defaults on this obligation, then Lessee shall be responsible for the cost of maintenance or repair, plus twenty percent (20%) of the cost to compensate Lessor for its time and expenses. This .cost consequence is not a penalty and is in addition to all other remedies available to Lessor on account of this default. 12. LESSORS REPRESENTATIONS: Lessor represents and warrants that Lessee shall be entitled to quietly hold and possess the Equipment, and Lessor will not interfere with that right as long as Lessee pays the Rent in a timely manner and performs all other obligations under this Lease and the Incentive Contract. There are no other warranties. Lessor is leasing the equipment to Lessee "AS IS". LESSOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE; SUITABLILITY OR MERCHANTABILITY IN CONNECTION WITH THIS LEASE. So long as Lessee is not in default under any term of this Lease, Lessor transfers to Lessee any warranties made to Lessor by the manufacturer or vendor. LESSEE AGREES THAT, REGARDLESS OF CAUSE, LESSEE WILL NOT ASSERT ANY CLAIM WHATSOEVER AGAINST LESSOR FOR LOSS OF PROFITS LESSEE EXPECTED TO MAKE OR ANY OTHER DIRECT, SPECIAL OR INDIRECT DAMAGES. 13. INSURANCE: Lessee agrees to keep the equipment fully insured- against loss during the term of this Lease. Prior to the delivery of the first item of Equipment, Lessee agrees to obtain, as of the start date of the Lease, A. Comprehensive general liability, including contractual liability protecting the interests of both Lessor and Lessee against property damage and personal injury or death arising out of maintenance, repair, use, and operation of this equipment with limits of liability no less than $500,000/$100,000 or $1,000,000 Combined Ex. "F" ~ - 3 - Version for Single Limit (CSL); B. Physical Damage Insurance for the full replacement value of the equipment. C. Umbrella liability with limits of liability of no less than $1,000,000; and D. Workers compensation and employer's liability insurance in accordance with all applicable state and federal law. Lessee shall name Lessor as an additional insured on the insurance policies. Lessee agrees to provide Lessor with a certificate or other evidence of insurance acceptable to Lessor. Additionally, any insurance policy must include a provision that the policy cannot be cancelled for any reason, by insurer or Lessee, unless and until insurer provides Lessor with a written notice of cancellation at least thirty (30) days in advance of such planned cancellation. If any insurance proceeds are paid as a result of any such loss or damage to the equipment, Lessee agrees that such insurance proceeds shall be paid to Lessor. 14. ENCUMBRANCES, TAXES AND OTHER LAWS: Lessee shall keep the Equipment free and clear of any liens or other encumbrances, and shall not permit any act where Lessor's title or rights may be negatively affected. Lessee shall be responsible for complying with and conforming to all laws and regulations relating to the possession, use or maintenance of the Equipment. Furthermore, Lessee shall promptly pay all taxes, fees, licenses and governmental charges, together with any penalties or interest thereon, relating to the possession, use or maintenance of the Equipment. 15. OWNERSHIP: The Equipment is and shall remain the exclusive property of Lessor. 16. SEVERABILITY: If any part or parts of this Lease shall be held unenforceable for any reason, the remainder of this Lease shall continue in full force and effect. If any provision of this Lease is deemed invalid or unenforceable by any court of competent jurisdiction, and if limiting such provision would make the provision valid, then such provision shall be deemed to be construed as so limited. 17. ASSIGNMENT: LESSEE MAY NOT SELL, TRANSFER, ASSIGN OR SUBLEASE THE EQUIPMENT. Lessor may, without notifying Lessee, sell, assign, or transfer this Lease and Lessor's ownership of the equipment; Lessee agrees that if Lessor does so, the assignee will have the same rights and benefits that Lessor has. Lessor agrees that any such sale, assignment or transfer of this Lease and/or the equipment by Lessor or Lessor's assignee or transferee will not materially change Lessee's duties or obligations under this Lease nor materially increase Lessee's burdens or risks. Lessee agrees that the rights of the assignee will not be subject to any claims, defenses, or set-offs that Lessee may have against Lessor. 18. BINDING EFFECT: The covenants and conditions contained in the Lease shall apply to and bind the Parties and the heirs, legal representatives, successors and permitted assigns of the Parties. 19. GOVERNING LAW: This Lease, and any and all amendments, modifications or other writings pertaining thereto, shall be construed under and pursuant to the laws of Ex. "F" - 4 - Version for the State of Texas. All obligations under this Lease are performable in Jefferson County, Texas, which is where venue will lie. 20. NOTICE: Any notice required or otherwise given pursuant to this Lease shall be in writing and mailed certified return receipt requested, postage prepaid, or delivered by overnight delivery service to: Lessor: Lessee: City of Port Arthur Section 4A Economic Development Corporation 4173 39~' Street P.O. Box 3934 Port Arthur, TX, 77642 Either party may change such addresses from time to time by providing notice as set forth above. 21. ENTIRE LEASE: This Lease constitutes the entire Lease between the Parties and supersedes any prior understanding or representation of any kind preceding the date of this Lease. There are no other promises, conditions, understandings or other Leases, whether oral or written, relating to the subject matter of this Lease. This Lease may not be altered, amended, modified, terminated, or otherwise changed except in writing and signed by both Lessor and Lessee. 22. CUMULATIVE RIGHTS: Lessor's and Lessee's rights under this Lease are cumulative, and shall not be construed as exclusive of each other unless otherwise required by lawn 23. WAIVER: The failure of either party to enforce any provisions of this Lease shall not be deemed a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Lease. The acceptahce of rent by Lessor does not waive Lessor's right to enforce any provisions of this Lease. 24. LIABILITY; INDEMNIFICATION: LESSEE SHALL INDEMNIFY, HOLD HARMLESS AND DEFEND LESSOR .AND ITS OFFICERS, DIRECTORS, SHAREHOLDERS, AFFILIATES, SUCCESSORS, ASSIGNS, EMPLOYEES, REPRESENTATIVES, AND AGENTS, FROM AND AGAINST ANY AND ALL LIABILITY FOR ANY KIND OR NATURE WHATSOEVER, INCLUDING ATTORNEY'S FEES, BY REASON OF ANY INJURY ARISING OUT OF, CONNECTED WITH OR RESULTING FROM THE SELECTION, ACCEPTANCE, DELIVERY, MAINTENANCE, USE _ OPERATION AND/OR CONTROL OF THE EQUIPMENT BY LESSEE, :PRESENTATIVES. Lessee's obligation to indemnify Lessor as provided for all survive expiration or termination of this Lease. Ex. "F" - 5 - Version for 25. IMPORTANT CONDITION: LESSEE UNDERSTANDS THAT LESSOR AND VENDOR OR MANUFACTURER ARE TWO SEPARATE, INDEPENDENT COMPANIES, AND THAT NEITHER VENDOR, MANUFACTURER NOR ANY OTHER PERSON IS LESSOR'S AGENT. LESSEE AGREES THAT NO REPRESENTATION, GUARANTEE OR WARRANTY BY THE VENDOR, MANUFACTURER OR OTHER PERSON IS BINDING ON LESSOR, AND NO BREACH BY THE VENDOR, MANUFACTURER OR OTHER PERSON WILL EXCUSE LESSEE'S OBLIGATIONS TO LESSOR. Lessee also understands that only an action of the Lessor's Board of Directors is authority to waive or alter any of the terms of this Lease. 26. ADDITIONAL TERMS 8r CONDITIONS -All terms and conditions of the Incentive Agreement. A default or breach of either the Lease or the Incentive Contract is a default or breach of both the Lease and the Incentive Agreement. IN WITNESS WHEREOF, the parties have caused this Lease to be executed the day and year first above written. LESSEE: a Texas By: Witness: LESSOR: Date: City of Port Arthur Section 4A Economic Development Corporation, a Texas not-for-profit corporation By' Date: Eli Roberts, President Witness: By' Date: Linda Spears, Secretary Witness: Ex ,.F„ - 6 - Versian for TABLE EQUIPMENT LIST6 AND DISPOSITION Equipment Description Order Order Delivery Model Serial Acceptance Date Verification- Date Number Number Sig~~e 1 Si afore 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 e This is the same list of equipment as in Exhibit "_" of the Incentive Contract. Ex. "F" _ 7 Version for Equipment Description Order Order Delivery Model Serial Acceptance Date Verification Date Number Number Signature 28 Signature 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 Ex. "F' - $ - ~ Version for EXHIBIT "G" CERTIFICATION REGARDING LOBBYING For Contracts, Grants, Loans, and Cooperative Agreements The undersigned certifies, to the best of his knowledge and belief, that: 7. 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 making of any grant, the making of any loan, the entering into of any cooperative agreement, or mod cation of any contract, grant, loan, or cooperative agreement. 2 The undersigned shall require that the language of this certification be included in the award 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 making or entering into this transaction. Signed: By: Signature Its: Position Ex "G" _ 1 Vecsian for EXHIBIT "H" GUARANTY AGREEMENT THIS GUARANTY AGREEMENT, dated as of 2006 (the "Guaranty', is made between The City of Port Arthur Section 4A Economic Development Corporation (the "PAEDC"), a corporation validly existing under its Charter and the constitution and laws of the State of Texas, and (the "Guarantor"), a private corporation duly organized and validly ex>stmg under the laws of the State of Capitalized terms used in this Guaranty and not defined otherwise are used herein as defined in the Economic Incentive Contract and Loan Agreement, dated 200 (the "Agreement"), between the PAEDC, as grantor, and as grantee (the "Grantee'. Those defimhons aze incorporated in this Guazanty by reference. WITNESSETH THAT: WHEREAS, A. Upon the terms and conditions set forth in the Agreement, the PAEDC is willing to convey certain real property to the Grantee and make certain financial grants to the Grantee to enable the Grantee to improve and construct the Project, and the Grantee is willing to agree to provide certain employment and economic opportunities to the residents of Port Arthur, Texas. B. In 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 Guazanty, to guaranty the obligations of the Grantee under the Agreement. C. The PAEDC and the Guazantor 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. agreements heremafter containedOand subject t dthe terms hereeof and for other goodeandlvaluable consideration, the receipt of which is acknowledged hereby, the Guazantor agrees with the PAEDC as follows: ARTICLE I. REPRESENTATIONS AND WARRANri'IES OF THE GUARANTOR Section 1.1. The Guazantor represents and warrants as follows: (a) The Guazantor has full corporate power under applicable ]aw and its articles of incorporation, code of regulations and bylaws, each as amended to date, to enter into, observe and perform ail covenants, agreements and obligations on its part hereunder. (b) The Guarantor has authorized the signing and delivery of this Guazanty by all necessary and.proper corporate action. (c) The signing delivery, observance and performance by the Guarantor of this Guaranty and the Guazan#or's covenants, agreements and obligations hereunder do not, and will not, (i) violate any law now existing, (ii) contravene or constitute a default under any agreement, indenture, trust agreement or understanding to which the Guazantor is a party or by which it or its property may be bound, or (iii) contravene any provision of the Guarantor's articles of incorporation, code of regulations or bylaws, each as amended to date. Ex. "H" - 1 - Version for Guazandt r was in orporated((ii) is necessary to promote and fuher°the businesscof the Guazantor and is, in the estimation of the Guazantor, desirable to promote the best interests and further the mission of the Guazantor, and (iii) will result in direct financial benefits to the Guarantor. ARTICLE II. COVENANTS AND GUARANTEES Section 2.1. The Guarantor, jointly and severally with any other guazantor to the PAEDC of the obligations of the Grantee herein guazanteed, 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 payment of all principal, interest and other sums due, whether by acceleration or otherwise, together with all late charges, disbur,ements, 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 Guaranteed Debt, and (c) the full and prompt payment of all expenses and chazges, including without limitation, to the extent pemutted 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 guazanteed hereby or in enforcing this Guazanty. The Guarantor will pay all payments in lawful money of the United States of America. Each default in payment of any amount payable hereunder shall g>ve rise to a sepazate cause of action hereunder, and separate suits may be brought hereunder as each cause of action arises. Section 2.2. The Guarantor's covenants, agreements and obligations under this Guazanty aze absolute and unconditional, aze a present, and shall be a continuing, guaranty of performance and payment and not collectibility, 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 pazd or provision shall have been made therefor to the safisfaction 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 event, including without limitation, any of the following, regazdless of whether there is notice to or consent of the Guazantor with respect thereto: (a) the compromise, settlement, release or ternvnation 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 Guazanty or an Event of Default under the Agreement, except as provided specifically in this Guaranty; Ex. "H" - 2 - Version for (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 any extension; (e) the modification or amendment of any covenant, agreement or obligation under the Agreement; (fj the taking or the omission 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 Guazanty or the Agreement, or any act or omission on the part of the PAEDC at any time; (h) the dissolution or liquidation of the Guarantor or any failure by the Guarantor to vacate promptly any execution, garnishment or attachment of such consequence that it will impair the Guarantor's ability to observe and perform its covenants, agreements and obligations under any 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; provided that the term "dissolution or liquidation," as used in this subsection, shall not be construed to include the cessation of the corporate existence of the Guarantor resulting either from a merger of consolidation of the Guarantor into or with another Person, or from a dissolution or liquidation of the Guarantor following a transfer of all or substantially all of its assets as an entirety; (i) 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 Guarantor (except cases commenced by the Guarantor against third parties) under federal bankruptcy law, as in effect from time to time, (iii) a general assignment by the Guaaantor 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 Guazanty or any other agreement, contract or other instnunent or document to which it is a party or by which it or its property is or may be bound; Ex. "H" - 3 - Version for (1) the default of the PAEDC under the Agreement; or (m) to the extent permitted by law, the invalidity of the Agreement, this Guaranty, any agreement, contract or other instnunent 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 Guaaantor has or may have against the PAEDC or the Grantee, shall be available hereunder to the Guaaantor against the PAEDC; 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 the case may be, any rights that could not be asserted, by virtue of this Section 2.3, by the Guaaantor 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 dischazged in full, and such obligations shall not be dischazged 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 PAEDC shall proceed first against the Grantee, but is not required to exhaust its remedies against the Grantee and its security or other rights in the collateral of the Grantee, prior to resorting to any remedy of the PAEDC as to the Guarantor; however, Guaaantor will pay all reasonable costs, expenses and fees (including without limitation, to the extent permitted by law, all court costs, attomeys' fees, expenses, prejudgment interest and post judgment interest) that the PAEDC incurs in the process of exercising its remedies against Grantee, to comply with this section. If Guarantor fords that further action against Grantee is futile, Guaaantor may request in writing that PAEDC halt executing remedies against Grantee, after which PAEDC may proceed with remedies against Guarantor. Secfion 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 Guaranty, whether by suit or otherwise, following any default on the part of the Guaaantor under this Guaranty. Section 2.6. The Guarantor covenants and agrees that, so long as the Agreement is in effect, the Guarantor will preserve and will keep in full force and effect its corporate existence. Section 2.7. (a) The failure of the Guaaantor 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 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 Guarantor (except any case commenced by the Guarantor against a third party) under federal bankruptcy law, as in effect from time to time; (iii) a general assignment by the Guarantor for the benefit of creditors; Ex. "FP' - 4 - Version for (iv) the appointment of a receiver for the Guarantor or for the whole or any substantial part of its property; or (v) the dissolution or liquidation of the Guazantor or the failure by the Guazantor to vacate within 90 days any execufion, garnishment or attachment of such a consequence that it will impair the Guazantor's ability to .carry out its covenants, agreements and obligations hereunder. The term "dissolution or liquidation of the Guazantor," as used in this clause, shall not be construed to include the cessation of the corporate existence of the Guarantor resulting either from a merger or consolidation of the Guarantor into or with another Person, or from a dissolution or liquidation of the Guarantor following a transfer of all or substantially all of its assets as an entirety, in accordance with the Agreement. 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 any 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 Guarantor under Section 2.1, or if any default shall occur under Section 2.7(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 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 PAEDC as described in the preceding pazagraph, in addition to that payment, the Guarantor 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 permitted by law, the PAEDC's attorneys 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 2.7(b), the PAEDC unnn nhtainino 1rnnu,lr AnA .,F ~..,.t, aac .. i. .t,.n ___~_.~__ _ or ceruned mart, 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 2.7(c); provided, however, that if the default (other than a default under Sections 2.1 or 2.7(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 permitted under the Agreement. Section 2.8. Rights, remedies and powers under this Guazanty may be exercised, either separately or cumulatively, in the event of one or more defaults under this Guaranty. Ex. "fP' - $ - Veaion for ARTICLE III. NOTICE AND SERVICE OF PROCESS PLEADINGS AND OTHER PAPERS Section 3.1. The Guarantor covenants and agrees that it is 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. If the Guazantor should not be subject to that service of process for any reason, it designates and appoints as the Guarantor's agent, without power of revocation, (a) the Texas 77_, and his successors, or (b) if that agent shall cease to act, the Secretary of State of the State of upon whom shall be served all process, pleadings, notices or other papers that may be served upon the Guarantor as a result of any of its covenants, agreements and obligations under this Guaranty. Secfion 3.2. Any process, pleadings, notices or other papers served-upon any agent appointed in the preceding Secfion shall be sent at the same tune 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 Secfion 4.1. The covenants, agreements and obligations of the Guarantor hereunder sha(1 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 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 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 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 Guaranty. Ex. "Ei" - (7 - Vttsion for Section 4.3. This Guaranty may be amended and supplemented, to the same extent and upon the same conditions that the Agreement may be 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 Guarantor as guazantor hereunder of, any Person that succeeds to or assumes, as the case maybe, 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 their respective successors and assigns. Section 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 Guaranty may be signed simultaneously iri 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 counterparts. Section 4.6. The invalidity or unenforceability of any one or more phrases, sentences, clauses or sections contained in this Guaranty shall not affect the validity or enforceability of the rerriaining 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 WHEREOF, 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 first above written. CITY OF PORT ARTHUR SECTION 4A ECONOivIIC DEVELOPMENT CORPORATION By: Eli Roberts, President By: Linda Speazs, Secretary By:. Approved as to form: Guy N. Goodson, GER iMER GERTZ, L.L.P. Ex. "H" - 7 - Version for STATE OF TEXAS COUNTY OF JEFFERSON § On this day of 2006, before me, a Notary Public in and for said County and State, personally appeared Eli Roberts, 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, I have hereunto subscribed my name and affixed my official seal on the day and yeaz aforesaid. Notary Public, State of Texas STATE OF TEXAS COUNTY OF JEFFERSON On this day of , 2006, before me, a Notary Public in and for said County and State, personally appeazed Linda Speazs, Secretary of the PAEDC, who acknowledged that, with due authorization, she did sign the foregoing instrument on behalf of the PAEDC and that the same is her 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. Notary Public, State of Texas STATE OF COUNTY OF On this day of 2006, before me, a Notary Public in and for said County and State, personally appeazed authorized agent of ,who acknowledged that, with due authorization, he did sign the foregoing instrument on behalf of and that the same is his free act and deed individually as such officer and the free act and deed of IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day and yeaz aforesaid. Notary Public, State of Ex. "H" - 8 - Version for EXHIBfT "I" GUARANTY AGREEMENT THIS GUARANTY AGREEMENT dated as of 2006 (the "Guaranty"), is made between The City of Port Arthur Section 4A Economic Development Corporation (the "PAEDC"), a corporation validly existing under its Charter and the constitution and laws of the State of Texas, and (the "Guarantor"), a private oorporation duly organized and validly existing under the laws of the State of Capitalized terms used in this Guaranty and not defined otherwise aze used herein as defined in the Economic Incentive Contract and Loan Agreement, dated 2005 (the "Agreement"), between the PAEDC, as grantor, and . a Texas ~ grantee (the "Grantee"). Those definitions are incorporated in this Guaranty by reference. WI"TNESSETH THAT: WHEREAS, A. Upon the terms and conditions set forth in the Agreement, the PAEDC is willing to convey certain real property to the Grantee and make certain financial grants to the Grantee to enable the Grantee to improve and construct the Project, and the Grantee is willing to agree to provide certain employment and economic opportunities to the residents of Port Arthur, Texas. B. In 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 hereinafter contained and subject to the temps hereof, and for other good and valuable consideration, the receipt of which is acknowledged hereby, the Guazantor agrees with the PAEDC as follows: ARTICLE I. REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR Section 1.1. The Guarantor represents and warrants as follows: (a) The Guazantor has full corporate power under applicable law and its articles of incorporation, code of regulations and bylaws, each as amended to date, to enter into, observe and perform all covenants, agreements and obligations on its part hereunder. The Guarantor has authorized the signing and delivery of this Guazanty by all necessary and proper corporate action. (c) The signing, delivery, observance and performance by the Guazantor of this Guaranty and the Guarantor's covenants, agreements and obligations hereunder do not, and will not, (i) violate any law now existing, (ii) contravene or constitute a default under any agreement, indenture, trust agreement or understanding to which the Guazantor is a party or by which it or its property may be bound, or (iii) contravene any provision of the Guarantor's articles of incorporation, code of regulations or bylaws, each as amended to date. Ex."P - 1 - Version for (d). This Guaranty (i) is made in furtherance of the purposes for which the Guazantor was incorporated, (ii) is necessary to promote and further the business of the Guarantor and is, in the estimation of the Guazantor, desirable to promote the best interests and further the mission of the Guazantor, and (iii) will result in direct financial benefits to the Guarantor. ARTICLE II. COVENANTS AND GUARANTEES Section 2.1. The Guarantor, jointly and severally with any other guarantor to the PAEDC of the obligations of the Grantee herein guaranteed, hereby absolutely and unconditionally guarantees to the PAEDC at any time: (a) the full and pmmpt 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 (collectively the "Guazanteed Debt") together with the performance of Grantee's obligations under any documents or instnunents executed in connection with or given to secure the Guaranteed 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 incurred by the PAEDC acting as Grantor under the Agreement and in realizing any of the payments guazanteed hereby or in enforcing this Guaranty. The Guarantor 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 sepazate cause of action hereunder, and separate suits may be brought hereunder as each cause of action arises. Section 2.2. The Guarantor's covenants, agreements and obligations under this Guaranty are absolute and unconditional, aze a present, and shall be a continuing, guaranty of performance and payment and not collectibility, 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 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 Guazantor with respect thereto: (a) the compromise, settlement, release or temvnation 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; Ex. "P' - 2 - Version for (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 any extension; (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 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 PAEDC at any time; (h) the dissolution or liquidation of the Guarantor or any failure by the Guarantor to vacate promptly any execution, garnishment or attachment of such consequence that it will impair the Guazantor's ability to observe and perform its covenants, agreements and obligations under any 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; provided that the term "dissolution or liquidation," as used in this subsection, shall not be construed to include the cessation of the corporate existence of the Guarantor resulting either from a merger or consolidation of the Guarantor into or with another Person, or from a dissolution or liquidation of the Guarantor following a transfer of all or substantially all of its assets as an entirety; (i) 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 Guarantor (except cases commenced by the Guarantor against third parties) under federal bankruptcy 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 dischazge by operation of law of the Guarantor from the observance or performance of any covenant, agreement or obligation under this Guazanty 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 Guaaantor to observe or perform fully any of its covenants, agreements or obligations under this Guazanty or any other agreement, contract or other instnunent or document to which it is a party or by which it or its property is or may be bound; Ex. "I" - 3 - Version for (I) the default of the PAEDC under the Agreement; or (m) to the extent permitted by law, the invalidity of the Agreement, this Guaranty, any agreement, contract or other instnunent 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 any covenant, 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 Guarantor against the PAEDC; 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 the 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, 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 dischazged in full, and such obligations shall not be dischazged 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 PAEDC shall proceed first against the Grantee, but is not required to exhaust its remedies against the Grantee and its security or other rights in the collateral of the Grantee, prior to resorting to any remedy of the PAEDC as to the Guarantor; however, Guazantor will pay all reasonable costs, expenses and fees (including without limitation, to the extent permitted by law, all court costs, attomeys' fees, prejudgment interest and post-judgment interest) that the PAEDC incurs in the process of exercising its remedies against Grantee, as part of this Guaranty. If Guazantor finds 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 Guazantor. Section 2.5. The Guazantor covenants and agrees to pay all reasonable costs, expenses and fees (including without limitation, to the extent pemutted by law, all court costs and attorneys' fees) that may be incurred by the PAEDC in enforcing or attempfing to enforce this Guaranty, whether by suit or otherwise, following any default on the part of the Guarantor under this Guazanty. Section 2.6. The Guarantor covenants and agrees that, so long as the Agreement is in effect, the Guarantor will preserve and will keep in full force and effect its corporate existence. Section 2.7. (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 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 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 Guarantor against a third party) under federal bankruptcy law, as in effect from time to time; (iii) a general assignment by the Guazantor for the benefit of creditors; Ex. "P' - 4 - Version for (iv) the appointment of a receiver for the Guaaantor or for the whole or any substantial part of its property; or (v) the dissolution or liquidation of the Guaaantor of the failure by the Guazantor to vacate within 90 days any execution, garnishment or attachment of such a consequence that it will impair the Guazantor's ability to carry out its covenants; agreements and obligations hereunder. The term "dissolution or ligmdation of the Guarantor," as used in this clause, shall not be construed to include the cessation of the corporate existence of the Guaaantor resulting either from a merger or consolidation of the Guarantor into or with another Person, or from a dissolution or liquidation of the Guarantor following a transfer of all or substantially all of its assets as an entirety, in accordance with the Agreement. 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 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 Guarantor under Section 2.1, or if any default shall occur under Section 2.7(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 provisron 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 Guazantor shall be required to make payment to the PAEDC as described in the preceding pazagraph, in addition to that payment, the Guarantor 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 permitted by law, the PAEDC's attorneys 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 2.7(b), the PAEDC upon nhtaininn knnwlrAan of ~„mot, aof „tr ..t,.,tt ....,...-_a_. _._._ a_ or certrneo mall, 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 Guazantor shall make the payments, described in Section 2.7(c); provided, however, that if the default (other than a default under Secflons 2.1 or 2.7(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 the Agreement Secfion 2.8. Rights, remedies and powers under this. Guazanty may be exercised, either sepazately or cumulatively, in the event of one or more defaults under this Guaranty. Ex. "P' - 5 - Version for ARTICLE III. NOTICE AND SERVICE OF PROCESS PLEADINGS AND OTHER PAPERS Section 3.1. The Guarantor covenants and agrees that it is 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. ff the Guarantor should not be subject to that service of process for any reason, it designates and appoints as the Guarantor's agent, without power of revocation, (a) the _ .Texas 77 ,and his successors, or (b) if that agent shall cease to act, the Secretary of State of the State of upon whom shall be served all process, pleadings, nofices or other papers that may be served upon the Guarantor as a result of any of its covenants, agreements and obligations under this Guaranty. Section 3.2. Any process, pleadings, notices or other papers served upon any agent appointed in the preceding Section shall be sent at the same time by registered or certified mail, postage prepaid, to the Guarantor'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 this Guazanty, it shall not be necessary for the PAEDC to give any noflce, other than any notice that may be expressly required herein. In the event any provision contained in this Guaranty shall be breached by any party and the breach shall be duly waived thereafter by the other party so empowered to act, 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 Guaranty shall be established by conduct, custom or course of dealing, but any amendment, modification or release shall be made solely by an instnunent or document in writing duly signed by the parties hereto who have been duly authorized by this Guaranty so to amend this Guazanty. Ex. "P' - 6 - Version for Section 4.3. This Guaranty may be amended and supplemented, to the same extent and upon the same conditions that the Agreement may be 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 guarantor hereunder of, any Person that succeeds 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 and their respective successors and assigns. Section 4.5. This Guaranty constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, between the Guazantor 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 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. Secfion 4.6. The invalidity or unenforceability 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 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 Guazantor and the PAEDC by their duly authorized officers or representatives, as ofthe date first above written. Accepted by: CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION sy: Eli Roberts, President ay: Linda Speazs, Secretary Ex. "I° - 7 - Version for STATE OF TEXAS § COUNTY OF JEFFERSON § On this day of 2006, before me, a Notary Public in and for said County and State, personally appeazed Eli Roberts, .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, I have hereunto subscribed my name and affixed my official seal on the day and yeaz aforesaid. Notary Public, State of Texas STATE OF TEXAS § COUNTY OF JEFFERSON § said C Oun ~ and State ay of 2006, before me, a Notary Public in and for ty ,personally appeazed Linda Spears, Secretary of the PAEDC, who acknowledged that, with due authorization, she did sign the foregoing instrument on behalf of the PAEDC and that the same is her free act and deed individually as such officer and the free act and deed of the PAEDC. IN WITNESS WHEREOF, I have hereurto subscribed my name and affixed my official seal on the day and yeaz aforesaid. Notary Public, State of Texas STATE OF COUNTY OF On this day of .2006, before me, a Notazy Public in and for said County and State, personally appeazed authorized agent of ,who acknowledged that, with due authorization, he did sign the foregoing instrument on behalf of and that the same is his free act and deed individually as such officer and the free act and deed of IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day and yeaz aforesaid. Notary Public, State of Ex. "P' - g - Version EXHIBIT "J" COMPLIANCE STATEMENT hereby certifies that it has fully complied with Local Government Code §176.006, effective June 18, 2005, which mandates the disclosure requirements for persons who contract or seek to contract with a local governmental entity. a Texas By: Ex. "P' - 1 - Version for