HomeMy WebLinkAboutPR 15306: EDC - POLICIES & PROCEDURES FOR INCENTIVE CONTRACTSinteroffice
MEMORANDUM
To: Mayor, City Council, and City Manager _
From: Mark T. Sokolow, City Attorney j''%.,.~ ~~f-'G~'"'~
Date: September 17, 2009
Subject: P. R. No. 15306; Council Meeting of October 6, 2009
Attached is P. R. No. 15306 approving the City of Port
Arthur Section 4A Economic Development Corporation's
Policies and Procedures for Incentive Contracts and
repealing Resolution No. 03-307.
Attachment
cc: Floyd Batiste, CEO of EDC
z.pr15306_memo
P. R. No. 15306
09/16/09 gg
RESOLIITION NO.
A RESOLIITION .APPROVING THE CITY OF PORT
ARTHIIR SECTION 4A ECONOMIC DEVELOPMENT
CORPORATION'S POLICIES AND PROCEDORSS FOR
INCENTIVE CONTRACTS AND REPEALING RESOLIITION
NO. 03-307
WHEREAS, per Resolution No. 03-307, the City Council
approved policies and procedures for the City of Port Arthur
Section 4A Economic Development Corporation (the "PAEDC")
incentive contracts; and
WHEREAS, these policies and procedures were for Type A
Projects under Chapter 504 Local Government Code, formerly
Section 4A, Article 5190.6 VTCA; and
WHEREAS, on June 1, 2009 at its regular meeting, the Board
of Directors of the PAEDC approved new policies and procedures
for the PAEDC incentive contracts in substantially the same form
as described in Exhibits "A", "B", "C", "D", "E", `F", "G", and
"H"; and
WHEREAS, the City Council deems it in the best interests of
the citizens of Port Arthur to approve the new PAEDC's policies
and procedures for incentive contracts as described in Exhibits
"A" "B" "C" "D" "E" `F" "G" and "H"; and
WHEREAS, alternative policies and procedures will be
developed and approved for the Section 4B (Type B) projects that
were approved at the May 2006 election and at the May 2009
election;
NOW, THEREFORE, BE IT RESOLVED BY TBE CITY COpNCIL OF THE
CITY OF PORT ARTHIIR, TEAS:
Section 1. That the facts and opinions in the preamble are
true and correct.
Section 2. That the policies and procedures for incentive
contracts of the City of Port Arthur Section 4A Economic
„ „ „C„
Development Corporation, as described in Exhibits A `B ,
"D", "E", `F", "G", and "H" are approved for Type A Projects
under Chapter 504 Local Government Code, formerly Section 4A,
Article 5190.6 VTCA.
Section 3. That Resolution No. 03-307 is hereby repealed.
Section 4. That a copy of the caption of this Resolution
be spread upon the Minutes of the City Council.
READ, ADOPTED AND APPROVED on this day of
A.D., 2009, at a Meeting of the City Council of the City of Port
Arthur, Texas, by the following vote: AYES:
Mayor
Councilmembers
NOES:
z.pr15306
MAYOR:
DELORIS "BOBBIE" PRINCE
ATTEST:
TERRI HANKS, CITY SECRETARY
APPROVED:
FLOYD BATISTE, PAEDC CEO
APPROVED AS TO FORM:
MARK T. SOKOLOW, CITY ATTORNEY
z.pr75306
Table of Contents
Exhibit A Internal and Operating Policies and Procedures
Exhibit B PAEDC Incentive Agreement Flowchart
Exhibit C Guidelines for Letter of ]ntent
Exhibit D PAEDC GranULoan Incentive Application
Exhibit E PAEDC Economic Impact Data Sheets
Exhibit F Business Balance Sheet
Business Profit & Loss Statement
Business Operating Cycle
Business Ratio Analysis
Business Capital Expenditures
Business Reconciliation of New Worth
Business Cash Flow Statement
Business Operating Uses
Business Non-Operating Uses
Business Working Capital
Exhibit G Quality Indicator Checklist
Exhibit H Economic Incentive Contract & Loan Agreement
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) operations
are governed by relevant state statutes, Attorney General Opinions and policies of the
PAEDC and the City of Port Arthur.
This Internal and Operating Policies and Procedures Mamral, together with the Bylaws
and the City ofPort,4rthur Personnel Policy handbook defines and clarifies the daily
operations of the PAEDC in order to 1) establish, maintain and clarify the PAEDC's
Board 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 & RESPONSIBILITIES ............ ..............................6
BOARD OF DIRECTORS .................................. ...............................7
........................................
BOARD MEETINGS • •' •' • • • • • •' • • • •"""""""8
.........................
SECURITY ......................... .. ..............................8
COMPUTER NETWORK SYSTEM ...................... ..............................8
OPERATING POLICIES & PROCEDURES ..............:...... ...............................9
....................................................
AGENDAS .........................10
....
10
MINUTES ..................................................... .............................
1 l
.........................
RESOLUTIONS .............. ...... ..............................
......................
FILE ORGANIZATION .............. .................1 t
.............
APPLICATION PROCESS ................................ ..............................11
.12
COMPLIANCE .............................................. ............................
BUSINESS RETENTION & EXPANSION ............. ..............................12
13
PAYING BILLS ....................................:........ ..............................
REQUEST FOR INFORMATION ....................... ...............................14
.........15
..................................
AUDIT ..................... ..............
........
APPENDIX .................................................. ..............................lb
4A APPLICATIONS
3
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 wortd-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 developrrient.
The PAEDC is responsible for encouraging and developing business growth and
attracting new business to Port Arthur. Our 300 acre Business Park is especially
beneficial to business in the azeas of manufacturing, light industrial and commercial
development.
Port Arthur is ready to help you work, grow and play. Callus today to find out how we
can help you realize better working conditions, higher profits and happier employees.
With a Hold climate and a supercharged 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 Corporation 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 standard 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 Employees shall be at their places of work
in accordance with these rules and general or departmental regulations. All departments
shall maintain daily attendance records of employees. An employee is considered to be
on-duty when he/she reports for work to his/her immediate supervisor. An employee
shall not be considered on-duty in the commute from home to work or from work to
home, nor during lunch breaks or the commute thereto or from.
Employees may be allowed one fifteen (15) minute break for every four (4) hours of
actual work, provided the break does not interfere with departmental operations and is
approved in advance by the immediate supervisor. Breaks are normally to be taken once
in the morning and once in the afternoon.
The taking of a rest period is a privilege and is not to be considered by any employee as
an automatic right. If the employee is behind in his/her work, the immediate supervisor
has the authority to suspend the granting of rest periods until the employee is caught up.
Employees shall not be allowed to "save" break time as a means to leave the work site
early at the end of the day.
The following holidays are 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
Petsonnel policies shall comply with the City's personnel policies as stated in the City of
Port Arthur Personnel Policy handbook.
6
STAFF POSITIONS & RESPONSIBILITIES
Below is a list of staff positions and responsibilities.
Chief Executive Oiiicer fCEO) -The Chief Executive Officer of the Corporation is
responsible for carrying out the Corporation's program as adopted and directed by the
Board. The Executive Director oversees all of the administrative functions of the
Corporation, develops policies and procedures for the Corporation including financial,
accounting, and purchasing policies and procedures to be approved by the Boazd 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 are assigned to them
by the Director. The Director is responsible for hiring, directing and controQing the work
of all Corpomtion employees, consistent with Personnel policies of the Ciry and in
keeping with the current fiscal year budget of the Corporation.
Economic Development Specialist (EDS) -The Economic Development Specialist is
responsible for collecting all granUloan 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).
Business Retention & Ezpansion 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 marketing and business recruitment activities.
Attorney -The Port Arthur Section 4A Economic Development Corporation retains an
attorney for all legal needs. This attorney is notified of all meetings, workshops, fact-
fmdingtours, and any other gathering of PAEDC Board Members. An agenda packet is
also given to the attorney within 72 hours of meetings. The attorney also receives copies
of all correspondence sent out by the EDC.
Administrative Secretary -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. Prepare and review a variety of
memorandums, correspondence, reports and public notices. Perform a wide variety of
general clerical work including the maintenance of accurate aad detailed records and
7
files, verifying accuracy of information, researching 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 financial reports; maintain a variety of statistical records; check
and tabulate statistical data. Contact the public and outside agencies in acquiring and
providing information and making refettals. 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-upJdelivery and maintenance of EDC's vehicle.
BOARD OF DIRECTORS
The Board 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 Board may, by contract, resolution, or otherwise, give 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
Board meetings are held every other Monday at 6:OOpm at PAEDC's office.
SECURITY
Although most of the files in the EDC office are 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 are to be locked in file cabinets on a daily basis.
Computer files are to be backed up on CD on a daily basis.
COMPUTER NETWORK SYSTEM
All computers in the office are connected via an Ethernet System. The server is named
"PAEDC", and is located in the server room. There are files located on all of the
computers that each statl'member may access. Some files are secure and only the
appropriate staff member may access these files. The server is running Microsoft
Windows 2003 Server, and all office computers connect to this server using their unique
username and password.
Do not share yow computer passwords with anyone. Lock yow computer every time you
leave yow desk and shut down at the end of the day. All computers have an anti-virus
program installed and Homing, but this does not completely protect yow computer or
data. To help protect yow data do not go to unfamiliar websites or open unsolicited
email attachments. Anti-spam software is available for free and will improve the
performance of yow computer when run frequently.
9
OPERATING POLICIES AND
PROCEDURES
AGENDAS
Each month the Board of Directors holds two to three meetings. The meetings are held
on every other Monday 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 Wednesdays, staff shall meet and review
the agenda and the accountant should let the CEO know if funds are available for agenda
items that need funding; and on Thursday, 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 cogy
of the agenda must be broadcasted to all the media groups as well the Chamber of
Commerce by fax or email.
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/cd's are 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 Board for signature.
The Boazd 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
regular minutes of the meeting.
The minutes of each meeting are kept on file at the EDC-office as well as on the website
for public viewing and easy access. The minutes are also presented at the following
monthly meeting for approval by the Board and at such time of approval, the Secretary of
the Board signs the minutes. A preliminary copy is kept in the binder until the original
with signature is obtained. The preliminary copy is then replaced with the signed copy.
10
RESOLUTIONS
Staff shall prepare 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 board members in the meeting. After resolutions are prepared, they
should be forwarded with necessary attachments to the City Attomey'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 prepared 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 Coaespondence/Incoming Correspondence, and
finally Notes. Therefore, all file folders are consistent. File folders should be scamted in
the Intranet for easy access to Board 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 are sold outside of Port Arthur, then the company does not
qualify fora 4A incentive. In order to qualify fora 4A Incentive, the type of business is
also limited to industriallmanufacturing, recycling, distribution, wazehousing or
commercial, in which case a 4A application is given. If the business does not meet the
criteria specified for qualifying for 4A Incentives, then the business may apply for the
City Revolving Loan Fund administered by the EDC Board of Directors, in this case a 4A
Application is also used to process the business' request for a loan.
Once an evaluation of the type of business and request has been done by staff, an
application is given along with instructions on how to complete the application and
documents that need 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
fora 4A grant or loan. Notification of the project is given to the EDC board after
application is received.
Upon receiving all documents, 4A file is sent to EDC Attomey for review and approval
to move forward. A furancial 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 Board. After the presentation of the project, the EDC Board
decides to approve or disapprove of the project.
After the EDC Board approves the project, a resolution, draft of the 4A incentive
agreement (prepared by EDC's Attomey) and EDC's CEOBoazd recommendation is sent
11
[o the City Attomey 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 ED5 and BRES
will work together with the CEO. Performance Milestones will be addldelete/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 fime that retention and/or expansion for the active projects of the EDC and
existing companies are created.
BUSINESS RETENTION & EXPANSION
The Busine~ 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 are planning to expand their business and coordinate with local partners
involved in providing business assistance, assist in the preparation and submittal of state,
federal and private source grant applications.
PAYING BILLS
There are 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 are detailed procedures for paying bills or requesting money from the city.
CHECK REQUESTS -Check requests are used when dte vendor you need to pay
doesn't have a vendor number setup in the system. Just fill out the check request form
located on the share 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 are 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 Acwunting.
12
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 fares and rental cars) and hotel expenses can be advanced for boazd
members. Employees can be advanced for transportation, hotel and food per diem. All
other expenses (such as parking, tolls, tips, mileage or gas, taxi and telephone expenses)
will be reimbursed if receipts are provided. Send all travel requests to Accounting.
The domestic per diem rates for Texas are attached.
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).
PURCIIASE ORDERS -Purchase orders are 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. AH 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
Accounting for payment. For all other bills that's not a utility bill, fill out a requisition in
AS400 for each bilUinyoice. Attached are the procedures for filling out a requisition in
AS400. When requisition is done have U1e CEO approve the invoices and wait for
PurchasinglAccounting 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 are used to purchase goods on credit. Field orders can
not exceed $300. When the invoice for the field order come in, check to make sure the
items, quantities and amounts are correct. If so, make a copy of the invoice for your
records and send the original invoice and a signed copy of the computer generated field
order to Accounting for payment.
All iovoicea 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 Rewrds 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 govemmental body or 2) for a governmental
13
body and the governmental body owns the information or has a right of access to it are
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.
A PIA request can not ask the govern body to compile statistics, perform reseazch 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 are 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 are in
active use or in storage.
• 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 determination. 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
furatrcial 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 near 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.
14
Finance Department
Memo
To: AllOepartments
would like to point out a few things that have not changed. (t) Overnight
travel must be authorized in advance by the city manager or his designee.
(2) All expense accounts shall be approved by the department head prior to
submission to the accounting division for audit within seven days after the trip
is complete.
RECEIVED APR 081008
Date: April 9, 2009
Re: New Per Diem Rates for Meals and Incidental Expenses
On April 7, 2009 the City Council adopted the U.S. General Services
Administration {GSA) meals and incidental expenses rates to determine the
per diem rates for City employees on overnight travel.
Employees requesting Vavel must go to www.psa.aov to find the M&IE Rate
for their destination city. Print a copy of the rate and attach it to e~nse
report before submitting it to accounting. i„ •i~~is'~bt~listgd~~th'~ f~~%S}r
~c~u~# ~k~~~[iY' 0)~. The rates are updated annually.
s~s'"'S'n'°m,~
f~ IiQ I ~ ~ ~r ~' + ,n ~ii'oiri~rMt$I efFp~n~ ~lltb~~
~ ~ i ~' I§a i~t av ~~
~ puenn n ~ s = fE ~ /,# ~ 1 `tielii` '~tf~~a~l,~1t#ir
~j n ~ Fo7 ._.,.~..~~:~~~ x~_:~( ~~0-l0} for
o da ~ nd;.1!+'l~~!" ~ ay,~"ar ~,OatftSYti~Le~lay+
I have attached printouts from the GSA website to show the navigation to the
per diem rates. I've also attached a revised Travel and Reimbursement
Report.
Thanks for your cooperation.
GSA Home
® U.S. General Services Administratlon
M nested Links
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Imbureament
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Regulations: FAR, FMR, FTR
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418!2009
GSA -Domestic Per Diem Rates
® U.S General Servlcos AdminlstratEon
Page 1 of 1
Home I Regions I SUaI(Orectory I Careers I forms l e-Tools I QuickLinks
---'-.
t_--.__-.~-. ___.__~.__.._-...
Per Uklm acme > Posh y~ ~9ulation a jt~Yg.I,Jf3+u'.oaLation ,S Relocadon> Tl~vnl tA~i1W6n$t > $!-5ID>
Perblenl RatlS
Ovcrvlew CONTAC75
FAQ Domestic Per Diem Rates -
PerDrem ..__.__._,_.-_._._.._.._.-____._._...__..______._____..-___..__. _____-._.._ ' Additional Contacts FOr
.._ Ratox____
- _'...
I ntyerdlem'18te'tliSAg¢5'FTR•179yei8ultetRT022?.~- -TfaVEIYTAIOIJ'C'n@rICPo11Cy'---'-----__
!
Meals and _ ..
~ '
IncMental
Exveme - ~~
Rates are set by fiscal year, effective October 1. Ta look up rates throughout the
Breakdown Continental United States (CONUS), eelect a year and [lick on a state. X4,4 REFERENCE
Factors DownloarJ~ IF-g~F (dg Federal Travel Re la i n
IMluerrcbg jFTR]
L°agkg Find Rates for Fiscal Year: 2009 (Current Year)
tares
FY 09 Per
Obm
Hlphllphls
Fire Safe
HmeLs
Neve a Per
Olem
Qu°stlon7
Por Oksm
Files
(Current 6
Archived)
q[eNUf
PER DIFFE RATES
(ALASxA HAWAII
U.f. TFRLHURlFf.
a PDSSESSIDMSI
roxnDr+
PFP mFM MIEf
-- bl vaBtl requests postmarked by 12/31 wiA be considered fora "spedal' rote review
within the current fistal year. Valid requests received after the deadline will Le indutled I
In the next annual per diem review. Rate changes wi0 he annourxed on our website. ~°! ,
' qem 6uRg(j~0RUUncinn Reyjs0~.1 t s
___..___.. _...___.____._._ I
Oovmindrlahle Files FOfmaL Sire Oars
FY 09 Per the n Rates Lowe, IpAAabl1 Excel ~ / 1 Bk 03/20/2009
The shortcut fa this page is www.gsa.gov/perdiem.
ID RATE THIS PACE
Printer Friendly format Last Reviewed 3/19/2009
RELATED GSA fOP1CS
EGou Travel
State Tax Exerhoton Forr is
FedROOms~
Tra el E-mail Notification
POV Mteaue Rdmtwrsement
Ilav:s
GOVERNMENT LINKS
Ask a Pe Diem ~restlan
Fag~fety Information
HNO l Sitama~l AaaSS~Abs l :rr~n l Prw:cv and Secudiv l Gmtoct U:
Also of Interest: Wtiranovse.mv 10.ermarygov I Uf0.y°+I E~Gav.yav 1 E•Pectlgreyw I SvgaesaE Wv<nma+r Skes
http:Nwww.gsa.gov/Portal/gsalep/contentView.do?contentType=GSA_BASIC&conient]d=... 4/8/2009
Domestic Perdiem Rates Page 1 of 2
ll.S. General Services Administration
Domestic Perdiem Rates
Texas - FY 09
Back to ri in~l
(October 1, 2008 through September 30, 2009)
Cities not appearing below may be located within a county for which rates are listed. To determine what county a
city is located in, visitShglVatiorl3Lgsociation~ounties NACO) website (anon-federal website).
NOTE: If neither the cit nor the c my is listed, the location is a standard CONUS destination wkh a rate of
$70.00 for lodging a $39.00 for~meals and incidental expenses (M&IE).
Pia i at~Qiem (i~dBsQm;;).
j Arlington /Fort Worth / I Tarrant county and City limits of 149 '• ~ 44 193 ~ 33.0
Grapevine j Grapevine '
Austin 'Travis 114 ~ ~ 54 168 44 S ;
(October 1 March 31) ~ I I I
_-_ _ . _.. _ ___
1 Austin i
Travis 107 ' i 54 ~ 161
~ I i 40.5
I
i {April 1 -August 31)
-__-- - ----_._ - ...._ . .._._.. -
- ---- _
]- ---------- ~ _ -- r _r
-- -L
~ .__ _- ---~
.
40
5
Austin
Travis i 54 168
n a
i .
i
.
(September 1 -September 30) '
' Beaumont ! Jefferson 82 49 131 , 36 75 ;
~ College Station Brazos 86 39 ; 125 29 25 }
' Corpus Christi ~ Nueces 89 44 - 133 33 0
I Dallas Dallas Lounty and City of Oallas 115 ' S9 174 44 25
(October 1 -December 31) _-._~ ,,,,-._.__ I
4 25
Dallas ' Dallas County and City of Dallas i 129 i S9 i ~ 188 4
I
i (January 1 -March 31) +---- ----- -- - --' -I .._ ~ ~ ---
Dallas Dallas County and City of Dallas 115 ; i 59 ~ 174
~
~ 44.25
~ (April 1 - September 30) t I
~
~
__- _ - i
~_ _ _,.
_
El Paso El Paso 92 ! 44 136 ~ 33.0
Galveston i Galveston i 99 j 49 148 36.75
'
(October 1 -May 31) ,
--------- ~_ I
- _.._.._._. .. _.-- ------ -
I Galveston - r_---
~ Galveston ~ 121 49 i 170
i 36.75 i
! (June 1 -July 31)
R
------ `-- -----~ ---- - -- ---.. .
1----.. _-- - ----------
Galveston ..__ __
--
-
;Galveston i
99 °Q-T1-4~3.fi_ZS
A
j (ugust 1 -September 30) ':.
_„_.v._
- _ I
-_..~~..~_! ---.;-._~._._.__
-i_._-~...._--,.
Houston (L.B. Johnson Space ! Montgomery, fort Bend and 110 ~ 59 ~ ; 169 144.25
http://www.gsa.gov/Portal/gsa/ep/perdiem.do?pf y&queryYear=2009&queryState=Texas 4/8/2009
Domestic Perdiem Rates
Page 2 of 2
'. Center) Hams ~ _' ____..... _ .
Hunt County ;Hunt County 87 39 120 ', 29 2S i
i Laredo Webb 88 ! 44 ~
__ 732
- 33 0
-
__ - -
i McAllen --
{Hidalgo _
_. .. - r
-
~ 84 ~ 44 ~
128
33 0 _
r
Plano Collor
- -_
~
708 ', 149 :
_. _.- _~
157 _
36 75 _ ,
~ ~
r _ ._ _. _
~ Round Rock --
--
~ Williamson ~ 9S i ~ 44
~__ 139 i 33 0
_~
~ ! 117 - 54 ~ 771 40 5
San Antonio 8exar =- -
~ South Padre Island :Cameron
- . _ _ ~ 84 !~~ 44 _ 7 28 ~ 33 0
r (actober 1-=~May~t) _ i -
_ ~
__. i_
__. T-_...._ .---
._.____..__...__._...._.____.-~.
! South Padre Island _...__..v.~_._~_
~ Cameron i 710 ; 44 , 154 33 0
~ (June t -July 31)
f ~ !.__ !.-- -
__ ._ --- - -- ' - .------
-_ - --------- -----r i
84 i 44
728
', 33 0
! South Padre Island :Cameron
~ (August i -September 30) ! ~- - ';
I Waco ;McLennan 85 ! 39 I 124 ', 29 25
httpalwww.gsa.gov/Portal/gselep/perdiem.do?pf=y&queryYear-20098cqueryState=Texas 4/8/2009
EXHIBIT B
PAEDC INCENTIVE AGREEMENT FLOWCHART
preliminary
inquiry by
Appdicant
If interested;
CEO.verifres.
budget and sends. .
letter describing
project ro
Gerrner Gertz
Germer Gertz Application Germer.Gertz - EDC Board
sends received by EDC, receives receives project
l k
& CED
h application resentation and
iminary
pre c
ec
s p
letter as to
application as to verges projects decides i
f
eligibilityfor,§
.,.being complete eligtbiliry ro
receive § 4A funds
tnterestedinthe.
4A funds proposed project
Conftdenda!
. report by
EDCsra,~7NDC
as to credit,
experience,
fmanctals, .:
business &
marketingplarti ,
capitalization and
accounting
CEO reviews
confidential
financial report
and gives
recommeidation
as to budget
Confidential
fitumcial report
and CEO
recommendation
is presented to .
Board,' .Ts Board
still interested?.
Incentive
Agreement is
prepared by
EDC counsel
and reviewed by
applicpnt
EDC Board
approves
Incentive
Agreement
Ciry Attorney
reviews
proposed
Resolution,
Incentive
Agreement,
co~dential
financial report
and CEO budget
repor6
i
Ciry Council.
Ciry Attorney
PAEDC CEO ,.
Closing/F.zecution
EDC
receives contract reviews contract regeests check of EDC Incentive Compliance
s
s l
i
i t
-
A er reviews
D
~
and CEO i
tency
for. con on
y
f mon
es greemen
a
. ,
c
recommendation . .with t2esolution paid at a~ees of Germer :payroll and
for appraroal contract/note : Gem status reports
signing
~PAEDC Grant Incentive Committee will be used as necessary to review major projects.
EXHIBIT C
Guidelines for Letter of Intent
All grant appIicanls aze required to submit a letter of intent to the CEO prior to
submitting a full application and supporting documents. The setter 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:
tbatiste~r~ oaedc.org
Fax letters to:
(409) 962-4445
P8A8SI
- Port AAhor Hconomic Development Cotpotatitm
Dab:
Amouut Aagoeted: 4' IHYI~SL~ Code
Noma of Bntiq:
CbeuactPerry:
Addtrac
stcr trmer ad tart. ~ 2M
Phone ~j FacNL~ .
NnGaa~ Nunhe ~ M(Lb Nullhp
Bmloeae t7Cgtp, ^LIL OPaMetchip dgole ~IiUB/MWBB t7Non•Prolit
6itveturo Proptiatarehip
Btulnets OlndwtriaU Ogeryeln:g ODietrlbutlon ^Sault Ot;ammeroial
4ypa Mannfeoluriag ~ Warahonro
DateDYeinatLttehi6hed DueBYtlCedlhnxcporeted
PimeM~ofBmploysee or TonlPgmil {ofBmployeec after 0»ntxToW payrotl
cl.~igdtio~t t
n seats
Owmnhip of Appiiceut t.omptny
Ovnmrt with Five (596) Petoect m Onater Ownerehfp of tlu Campt:ry
Nerve
Tk1n
M of Owecrship
' - Other8antcasofBundaand/or]Squlq~
l.tet ail requmt and/or approvals of fhndt 9wn other edureet(ag- hanks, otffiit unions, govt. eirtitim, ate J topther vrllh
deter ofapplication, thwa and Ntnding amore eomact imro mime:
ProJeoe cwt
Amount gotvcaofFunda
lwnd
B1d;JRenovatwn
8qulpment
FunoitutolFixtwae
Wodtiog Capital
4
S
4
4 ..
4
Tote-
EXHIBIT D
City of Port Arthur Section 4A Economic Development Corporation
Graot/I.oan Incentive Application
Date:
Please complete the following information and return along with the requested documents.
We will review the information that you provide to detennioe if you are eligible for assistance
from the PAEDC.
Business Name:
Business
Website Information:
Owners: Please list all owners with Five (5%) Percent or Greater
Company
Type of Business Organization: Not Established
(Please Gheck One) Sole Proprietorship
5. Corp.
C. Corp.
LLC
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 ~No If yes, please explain:
Are there any personaUbusinessjudgmenls, bens, unsettled lawsuits or major disputes?
Yes ~No If yes, pleaseexplein:
Have you taken any business development classes? Yes ~No
Are ou working with a counselor at the Small Business Development Center9
Yes ONO
Name of Counselor: Phone Number.
Are ou working with a counselor at the Service Corps or Retired Executive (SCORE)?
~~Yes r-~No
Name of Counselor: Phone Number:
Have you completed a Business PIan7 ~-Yes ~No
If yes, when/by whom was the Business Plan prepared?
Namo: Phone Number.
Type of Business: IndustriaUManufacturing (Fill Out Sections A-H)
(Please Check One) Recycling (FIII Out Sections A-H)
Distribution (FNI Out Sectbns A-H)
Warehouse (Fill Out Sacflorrs A-H)
Commercial (Fill Out Sections A-H)
Infrastructure (FIII Out Sections A-C)
Land Purchase (Fill Out Seetion A Only)
Training (Fig Out Sections A-C)
Please indicate the percentage of services or goods sold or to 6e sold to persons or companies outside of
the City or Port Arthur.
a~
Please explain:
Please indicate the percentage of services or goods sold or to be sold to persons or companies outside of
Jefferson County:
o~
Please explain:
Please indicate the percentage of services or goods sold or to be 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 http~//uvuvw census oovhocdlnalcs02/nalcode02.htm
NAICS Number:
Example: 3222221CoatedlLaminated Paper Manufacturing
PROJECT
Please, briefly describe your project
Total amount requested:
Project Cost
AMOUNT SOURCE OF FUNDS
LAND
BU ILDI NGIRENOVATIONS
EQUIPMENT
FURNITURE/FIXTURES
INVENTORY
JOB TRAINING
INFRASTRUCTURE
OTHER Please S c'
TOTAL:
Personal cash available to invest in projeck$ Source:
What bank have you contacted for financing:
Name of Banker:
Phone Number.
Please list all request and/or 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:
p, ~ - -
Number of Current Employees: FT PT
Please list current Job Classifications & Wage Scales:
Job Classification Wage Scale No. of Employees in this
Classifieatlon
Current Total Payroll: $
Number of Employees after completion of Project: FT PT
Please list current Job Classifications & Wage Scales:
Job Classification Wage Scale No. of Employees in this
Classification
Total Projected Payroll: $
The undersigned, as officers, shareholders, andlor principals of
("Applicant"), acknowledge that:
I_J there are no elected or appointed public officials with any ownership Interest
in said company ("Applicant')
there are elected or appointed public ofFlcials with ownership interest
in said company ("Applicant'), listed as below:
Name {Printed):
Signature:
Name (Printed):
Signature:
Oate:
Name (Printed):
Signature:
Oate:
Name (Printed):
Signature:
Date:
Neme (Printed):
Signature:
Name (Printed):
Signature:
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 apps"icatlon is provided for the purpose of applying foriunds under the City of
Port Arthur Section 4A Economic Devetopment 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 consent for such
information to be provided to the City of Port Arthur Section 4A Economic Development Corporation and the
City of Port Arthur. I also understand that the City of Port Arthur retains the sole decision as to whether or
not this application is approved, disapproved or modified. The approval of this application is subject
to the City of Port Arthur as well as the Port Arthur Section 4A Economic Development Corporation.
It is my right to accept or decline the grant and/or ban amount, rate and terms as
approved by the Program.
1 authorize the City of Port Arthur Section 4A Economic Development Corporelion 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 partty 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 1 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. 1F I DO NOT REQUEST THE
RETURN OF CERTAIN PRIVILEGED INFORMATION, IT WILL BE DISPOSED ON IN THE MANNER
REQUIRED BY LAW.
Name (Printed):
Signature:
Date:
Name (Printed):
Signature:
Name (Printed):
Signature:
Date:
Name (Printed):
Signature:
Name (Printed):
Signature:
Name (Printed):
Signature:
Date:
The undersigned, as officers, shareholders, and/or principals of
("Applicant°), acknowledge that in conjunction with the Applicants 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 prinapal 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, of the potential request by fhe PAEDC for personal
liability, whether director indirect, and with full knowledge of said potential, 1 am requesting that the
PAEDC continue its investigation, review and consideration of the application filed on behalf of
Applicant.
Name (Printed):
Signature:
Date:
Name (Printed):
Signature:
Date:
Name (Printed}:
Signature:
Date:
Name (Printed):
Signature:
Date:
Name (Printed):
Signature:
Date:
Name (Printed):
Signature:
Date:
your
Business and Marketing Plan
Business Financial Statements for last 3 years
ProForma Financial Statement
Exlstlnst Bu 1~: At least one year profltlloss &
cash flow on a monthy basis, but not less than
the period covered by the grant.
Start-UD Bustneas: At least two years profitlloss &
cash flow on a monthly basis, but not less than
the period covered by the grant.
Business Tax Returns for the last three years
Must be signed and dated. If past April 15th,
please indude prior year Dopy of exteruion.
Interim Business Financial Statement
Within the last 90 days.
Resumes on the principals of the business
Owners with 20% ownership or greater
Personal Financial Statements of the principals
Owners with 20% ownership or greater
Personal Tax Retum for each principal Owners
with 20% ownership or greater for Isst 3 years
Anticipated Environmental Impact
Economic Impact Analysis
Certificates of Good Standing
Secretary of State
State Comptroller
Information
Enclosed
~~
O
Acknowledgement oFConflict of Interest Policy 0
Acknowledgement of Grant Incentive Policy 8 Procedures
Copies of all licenses and permits
Proof of Insurance Coverage
Dun & Bradstreet Report ~~
Information
Not
AA 1~
D
EXHIBIT E
Port Arthur Economic Development Corporation
Economic Impact Data Sheets
The information requested on these data sheets Is needed by the PoR Arthur Area Economic Development
Corporation to perform an economic impact analysis of your firm's proposed facility or expansion in
Port Arthur, Texas. Please enter the information requested and email these completed sheets to
GStaIBVnq DaedC.Orq.
Port Arthur Economic Development Corpgretion
4173 39th SVeet
Port ARhur, TX 77842
{409)983-0579
(409)962-4445 fax
vrww.paedc.org
If you have any questions concerning the information being requested on these data sheets, please call
or a-mail Fioyd Batiste, CEO, Port Arthur Economic Development Corporation, (batiste@paedc.org.
About Your Firm:
Name of firm:
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, Ernployees and Operations:
Market value of the firm's new or additional property purchased each year at ifs local facility that will
be on local property tax rolls on January 1:
Furniture,
Buildings Fixtures
and and
Yr. Land Improvements Equipment
1
2
3
4
5
6
7
8
9
10
Total
Total $ - $ - $ . - $
Will the costs of buildings and real property improvements be new construction?
^ Yes ^. tdo
Percent of construction costs for materials and labor:
Materials
Labor
(Enter 50% for earn fl unknown.)
Percent of construction materials that will be taxable and purchased
in Port Arthur, if known
(Enter 20% 8 unknown.)
Percent of taxable spending by consfiuction workers that will
be in Port Arthur, if known
(Enter 25% i/ unknown.)
Percent of furniture, fixtures and equipment that will be
purchased in Port Arthur, if known
(Enter 25% ff unknown. MecMnery end equipment used 7n menufecfudng
a processirry operations are rrot taxable.)
Percent of furniture, fixtures and equipment that will be
purchased that will be subject to sales taxes
(Enter 25% 11 unknown. Machinery end equipment used M manufacturing
or process/ng operations en; not taza6le.)
Page 2 of 5
Estimated taxable inventories, at the end of each year:
Year
1
2
3
4
5
6
8
9
10
The firm's monthly utilities:
Year Water Wastewater Solid Waste Electricity Natural Gas Cable
7
2
3
4
5
6
7
8
9
10
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 end services In Port Arthur:
Year
2
3
4
5
6
B
8
10
Page 3 of 5
The firm's estimated taxable sales in the Port Arthur:
Year
1
2
3
4
5 _
6
7
8 _ ..
9
10
New employees to be hired:
New employees
to be hired
Year each year
1
2
3
4
5
6
8
9
10
Average annual salaries of new employees in tha 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 it unknown.)-
Number of school age children, grades K-12, in the household
of a typical new worker who will move to the County
(Enfer.75 rr unkrrown.)
Other
The number of these new
employees who will
move to the Port Arthur from
somewhere else
to take job with the firm
Will any of the firm's Inventories be subJect to fraeport exemption?
^ Yes ^ No
inventory items used in assembling, storing, manulacturing, mpalr, mairMenance,
Page 4 of 5
processing or fabricating the! will be snipped out of Texas within 175 days of befog acquired or
brought into Texas are generally subject to ireeport exemption. Therefore, property texas are
collected on tMs exempf inventory. However, not all local taxing dfshicts in foe Fbrt Arthur, TX area currentty
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, if available?
^ Yes . ^ No
Outof-Town Visitors the will Visit the Firm: rr-~-I
Number of out-0f-town visitors expected at the firm in the first year ~J
Percent of annual increase in the number of visitors r~7
Average number of days that each visitor will stay in the L-J
community
Average daily taxable visitor spending, excluding lodgingL_J
Average number of nights that a typical visitor will stay in
a local motel
Outof-Town Truckers Loading o- Unloading at the Firm ~-'I
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 out-of-town truckers
I -I
Average dairy taxable by a typical trucker ~.J
i
Percent of truckers who will stay one night in a local motel
Page 5 of 5
EXHIBIT F
I. BALANCE SHEET
Compiledireviewed/aud ited
date
ASSETS
1 Cash & Mktable Securities $ - $
2 Accounts Receivable $ - $
3lnventory $ - $ -
4Pre aid Ex enses $ - $ -
5
6
7
8CURRENT ASSETS $ - $ - $ - $ - $ -
9Net Fixed Assets
10 Notes Receivable
11 Investment in Subsidiaries
12 Intan ibles
13
14
15 TOTAL ASSETS $ - $ - $ - $ - $
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 $ - $ - $ - $ - $ -
26 Long Term Debt
27 Subordinated Officer Debt
28
29
30 TOTAL LIABILITIES $ - $ - $ - $ - $ -
31 Common Stock
32 Cap. Surplus & Paid in Cap.
33 Retained Earnin s
34 Less Treasu Stock
35 TOTAL NET WORTH $ - $ - $ - $ - $ -
36 TOTAL LIABILITIES 8 NW $ - $ - $ - $ - $ -
37 Contin ent Liabilities
38 Check ii Co. than ed Accts.
II. PROFIT 8 LOST STATEMENT
ik of months
Period Endin
39 Sales
40 COGS
41 Gross Protit $ - $ - $ - $ -
42 SGA
43 O eratin Protit $ - $ - $ - $ -
44 Owners Sala
45 De r. & Amort. Ex .
46 Interest Ex erase
47 Rent
48 Other Inc./Exp.
49 EBT $ - $ - $ - $ -
50 Income Taxes
51 PAT $ - $ - $ - $ -
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 Ca ital $ - $ - $ - $ -
59 Current Ratio
60 Quick Ratio
61 Debt1E uit Ratio
V. CAPITAL EXPENDITURES
62 Endin Net Fixed Assets $ $ - $ -
63 Depreciation $ $ - $ -
64 Be innin Net Fixed Assets
65 Net Capital Expenditures
VI. RECONCILIATION OF NET W ORTH
66 Endin Net Worth $ $ - $ -
67 PAT $ - $ - $ -
68 Beginning Net Worth $ -
69 New Equity {Distributions) $ -
VII. CASH FLOW STATEMENT
Year 2 Year 3 Year 4
70 PAT
71 Depr. & Amort $ - $ - $ -
71 Gross Funds Flow $ - $ - $ -
OPERATING USES Year 2 Year 3 Year 4 OPERATING SOURCES Year 2 Year 3 Year 4
73a Incr. Receivables 73b Decr. Receivables
74a Incr. Inventor 74b Decr. Inventor
75a Decr Pa ables 75b Incr. Pa able
76a Decr Accruals 76b Incr. Accruals
77a Op ratin Uses $ - $ - $ - 77b O erating Sources $ - $ - $ -
77a O r. Uses $ - $ - $ -
77b O r.Sources $ - $ - $ -
78 O r. Cash Flow $ - $ - $ -
NON-OPR. USES NON-OPR. SOURCES
79a Make Capital Exp 79b Sell Fixed Assets
BOa Buy Other Assets 80b Sell Other Assets
81a Incr. Other C/A 81b Decr. OtherClA
82a Rea NIP Bank 82b Borrow NIP Bank $
83a Rea NIP Other 83b Borrow N/P Other
84a Rea 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-0 r. Uses $ - $ - $ - 90b Non-O r. Sources $ - $ - $ -
90a Non-Opr. Uses $ - $ - $ -
90b Non-O r. Sources $ - $ - $ -
91 NET CASH FLOW $ - $ - $ -
PERMANENT WORKING CAPITAL ANALYSIS WORKSHEET
PART I: TH
PART II: PI
E OPERATING CYCLE
ear 1 ear 2 ear 3 ear 4
Days Receivable
Da s Inventor
Da s Payable
Da s Accrual
O eratin C cle
_RMANENT WORKING CAPITAL
ear 1 ear 2 ear 3 ear 4
Accounts Receivable $ - $ - $ - $ -
Inventor $ - $ - $ - $ -
Accounts Payable $ - $ - $ - $ -
Accruals $ - $ - $ - $ -
PWC $ - $ - $ - $ -
Change in PWC
Gross Funds Flow
Operating Cash Flow
EXHIBIT G
NAME OF BUSINESS:
DATE
UALITY INDICATOR CHECKLIST
Good Bad Neutral
Balance Sheet
Doea company collect?
Are da s A/R near) 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 inventor nearl a ual to the invento c cle?
Are officers committed?
Are there notes receivable?
Are there notes payable or subordinated officer debt?
(officer debt is a good indicator if truly subordinated)
[s debd oily ratio reasonable?
Does company have a profitable operating history?
Are retained eamin 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 profitable?
Is operating ptofit/sales stable or rising?
Is EBT/sales stable or risin ?
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
ECONOMIC INCENTIVE CONTRACT & 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.
ECONOMIC INCENTIVE & LOAN AGREEMENT BETWEEN
THE CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
AND
("INCENTIVE RECIPIENT")
INTRODUCTION.» .................»..............................._...»...............».............. .............................................»... i
......»...............................
.
AGREEMENT TERM ...................»....................»..._..1
.........» ................................
. 1
PARTIES _..» ............................»................................»................................... ..................................................
PROMISED PERFORMANCE .............................................................»....._...........».....»............»........2
(A) PERFORMANCE BY PAEDC ..........».....» ...............»...................... ..................»............»....._........2
(B) PERFORMANCE BY INCENTIVE RECIPIENT ...............................». ............»........................._........2
(C) CREDITS-SUBSTITUTE PERFORMANCE .............._...»................. .....»..........................»..............3
PERFORMANCE MII,ESTONE SCHEDULE .............»..»...................... ..............................................._.. 4
CONDITIONAL OBLIGATIONS AND LIMITED LIABILITY OF PAEDC ......................................... S
LIQUIDATED DAMAGES FOR BREACH OF AGREEMENT ........................................................»..... S
RECORDS J INSPECTTON / PAEDC AUDTT ....................»..................... ..._.............................................. 6
7
HOLD HA~~CS» .......................».................................».»..._................. ...»..............................................
7
SUBCONTRACTS..» ............................».._........................».»................»...» ..................................................
CONFLICT OF IlVTEREST /DISCLOSURE OBLIGATION ..........» ... ................................................... 8
NONDISCRDrIDVATION /EMPLOYMENT /REPORTING .........._... ..._ .............................................. 8
9
LEGAL AUTHORITY .....................».._.._.......................»..».._...........».... ....».............................................
NOTICE OF LEGAL OR REGULATORY CLAIMS ........................».... .................................................. 9
CHANGES AND AMENDMENTS.....»..._ ..........................».................».. »................................................10
DEFAULT /TERMINATION.........» ........................................»................. .................................................10
11
COMPLIANCE AUDTPS .................».._..»................................_...........».... ...».......»...................................
SUPPLEMENTAL COVENANT........»..».......» ...................»..»................ ».._............................................12
ENVIRONMENTAL REQUIREMENTS .................................................. »..»..........................................» 12
ORAL AND WRITTEN AGREEMENTS /PRIOR AGREEMENTS.......» ............................................13
13
........................»..._...............................»................
.
.
VENUE .....»...........................................
......... _ ...........
.
..
ADDRESS OF NOTICE AND COMMUNICATIONS..........»..........._.. .....»......» ...................................13
13
......._ ................._.._............................_....................
CAPTIONS ....»............................................
...»..»...».»..
COMPLL4NCE WTI7I FEDERAL, STATE AND LOCAL LAWS ...... »..» ..........................................» 14
CONDITIONS PRECEDENT.........»..»..._ .........................._...»................ ..................................................14
ATTORNEY APPROVALS ............»..»...» ...............................»...........»... ................................................» 14
AGREEMENT EXECUTION .............»................................»...............»... ....»........................................-15 -
E:hibit "AI" Commercial Promissory Note for Loao
E3[hlblt "A2» Commercial Promissory Note for Conditional Grant
Eahlbit "B" Deed of Truaf
E>chibit "C" Coromercial Security Agreement
E><hlblt "D° UCC-1 Floancing Statemeut
E><61bit "E" Manufacturing Equipment List
E:616it "F' Certifccation Aegerding Lobbying
E=hibit "G" Guaranty Agreement
E><hibit "B" Guaranty Agreement
E>chibi[ "I" Compliance Statement
M473091
ECONOMIC INCENTIVE CONTRACT & LOAN AGREEMENT BETWEEN
THE CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
AND
(INCENTIVE RECIPIENT")
INTRODUCTION
The Incentive Recipient is a (description of legal entities} doing business in
Port Arthur, Texas. The Incentive Recipient intends to undertake the following business:
(summary of business planned).
Current market demands are such that Incentive Recipient plans to initiate and/or expand the above-
referenced business operations at its facility in Port Arthut. The City of Port Arthur Section 4A
Economic Development Corporation ("PAEDC") will assist Incentive Recipient in this business
endeavor by providing the hereinafter described conditional grant and/or loan or other incentives in
exchange for the promise by Incentive Recipient of creation of fulltime permanent jobs.
AGREEMENT TERM
EFFECTIVE DATE
1. This Economic Incentive Contract and Loan Agreement ("Agreement") is entered into
with an effective date of , 200 but in no case later than , 200_, by
and between the PAEDC and Incentive Recipient.
TERMINATION DATE
2. This Agreement expires the earlier of 200_, 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. Ciri 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 Chapter 504, Local Government Code (the "Development
Corporation Act of 1979") and duty authorized by Resolution of the City Council of the City of Port
Arthur to enter into this Agreement. As 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. ("Incentive Recipient's is a The
registered agent in Texas for the Incentive Recipient is at
,Texas 77
PROMISED PERFORMANCE
5. The parties agree to perform as follows.
(a) PERFORMANCE BY PAEDC
PAEDC shall loan Incentive Recipient the amount of $ ,according to the
terms in the Commercial Promissory Note (the "Note") contained in Exhibit "Al",
at an interest rate of _ percent (_%) interest and for a term of _ (, years or;
ii. PAEDC shall conditionally grant Incentive Recipient up to $ .subject to
the conditions and limitations herein, which Incentive Recipient is not required to
pay back unless Incentive Recipient breaches this Agreement. If Incentive Recipient
breaches this Incentive Agreement, then the grant will become a loan as provided in
Exhibit "AZ".
iii. PAEDC will use its best efforts to pay invoices, or reimburse Incentive Recipient
within forty-five (45) days of receipt for the capital outlays listed in Exhibit "E".
HOWEVER, PAEDC WILL ONLY RELEASE FUNDS IN AN AMOUNT
EQUIVALENT TO REAL PROPERTY OR EQUIPMENT FOR WHICH PAEDC HAS
DULY EXECUTED COLLATERAL SECURITY INTEREST. AS TO REAL
PROPERTY, PAEDC WILL ONLY RELEASE FUNDS TO A MAXIMUM BASED
ON THE JEFFERSON COUNTY APPRAISAL DISTRICT'S ASSESSED
VALUATION AS TO REAL PROPERTY. AS INCENTIVE RECIPIENT EXPENDS
FUNDS FOR IMPROVEMENTS TO REAL PROPERTY, PAEDC WILL RELEASE
ADDITIONAL FUNDS BASED ON DEMONSTRATED INCREASES IN REAL
PROPERTY VALUE. AS TO CAPITAL OUTLAYS, AS HEREIN DESCRIBED,
PAEDC WILL ONLY RELEASE FUNDS UPON RECEIPT OF REQUIRED
DOCUMENTATION OF THE PURCHASE, BY INCENTIVE RECIPIENT OF SUCH
CAPITAL EQUIPMENT AND MATERIALS FREE OF ANY LIEN OR
ENCUMBRANCE.
These payments are PAEDC's only obligations.
(b) PERFORMANCE BY INCENTIVE RECIPIENT
(1) By the end ofthe Agreement term, Incentive Recipient promises to employ _ (~
employees at an annual total payroll of $ ,t as measured by [ntemal
Revenue Service (IRS} forms W-2 and W-3.
(2) Incentive Recipient promises that at least _ percent (__%) of its employees
will be Port Arthur residents.
(3) If the Loan or conditional Grant provided by PAEDC to Incentive Recipient is to be
secured by an interest in real property, Incentive Recipient shall execute the Deed of
Trust contained in Exhibit "B". Further, if the Loan or conditional Grant by
PAEDC to Incentive Recipient is to be secured additionally or alternatively by other
collateral security agreements including by not limited to a commercial security
agreement as specified in Exhibit "C" and filed of record with the Secretary of State
for the State of Texas by a Uniform Commercial Code filing as described in Exhibit
'Payroll is based on 2080 fours per year and a starting wage of S per hour, per Incentive Recipient's application.
@113091 - 2 -
"D", Incentive Recipient will provide a detailed outlay of all equipment and material
to be acquired and to be secwed by the collateral security agreement by providing an
enumeration of capital outlays as described on Exhibit "E°.
(4) Incentive Recipient shall use the Grant monies provided by the PAEDC exclusively
for the capital outlays that are not materially different2 from the list provided to
PAEDC by Incentive Recipient, a copy of which is attached as Eahibit "E". With
each invoice or request for reimbwsement sent to PAEDC, Incentive Recipient will
provide a listing of the specific equipment, material or other capital outlays requested
for reimbursement and covenant that such request for reimbursement is being made
for the specific assets and that all such assets have been acquired by the Incentive
Recipient free of any lien or encumbrance. This will enable PAEDC to verify
compliance with the list in Exhibit "E".
(5) On demand by PAEDC and in response to Incentive Recipient's failwe to achieve a
performance milestone, Incentive Recipient shall provide PAEDC with reasonable
asswances, proposed by Incentive Recipient and reasonably acceptable to PAEDC,
that it has both the intention and the capabilities to perform fully its contractual
obligations.
(C) CREDITS -SUBSTITUTE PERFORMANCE
Incentive Recipient 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
Incentive Recipient breaches the Agreement.
(1) Starting on the effective date of the Agreement and for as long as Incentive Recipient
performs as specified in Section 5(6x1) of this Agreement, Incentive Recipient will
receive a $1.00 credit for each $ of payroll paid to residents of Port Arthw.
Payroll to non-residents cannot be credited.
(2) Total credit cannot exceed $
(3) Incentive Recipient will forfeit any credits it earned during a period for which a
report is scheduled but Incentive Recipient fails to issue the report.
(4) Once Incentive Recipient has earned credits equal to $ ,the conditional
Grant and all obligations to PAEDC shall terminate; however, no termination of the
obligations for a conditional Grant shall eliminate the obligations of Incentive
Recipient to PAEDC to repay any loan described in Eahibit "Al° nor to eliminate
any obligadons under any collateral security agreements including by not limited to
those described in Eahibit "l3", "C" and "D" which shall remain in full force and
effect until the Note is paid in full.
PERFORMANCE MILESTONE SCHEDULE
2 "Matorielly different" is defused as a change in the type of asset that changes the overnll business plan in place at the
time that this contract was executed.
R47509i ' ~'
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 Incentive Recipient and/or demand
reasonable,assurances3 from Incentive Recipient 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. Incentive Recipient's performance milestones are comtained in the following table.
PERFORMANCE MILESTONE SCI-IEDULE
Deadline Milr~tone
{a) e.g., Issue a status reporr° to PAEDC's Chief Executive Officer ("CEO's for
the period from the effective date of this Agreement to
(b) e.g., Achieve performance of _ full-time, permanent employees;
Annualized payroll of $
(c) e.g., Stares reports for January 1, 200_ to , 200_.
(d)
(e)
(~
{g)
~)
(i)
G>
(k}
(1)
(m)
(n)
s Examples of reasonable assurances are copies of pending contracts and customer commitment letters.
`Status reports shell include copies of invoices and check payments for assets purchased with PAEDC funds during the
reporting period, quarterly balance sheets, quarterly pro£t 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 confnming fatal 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 verify said report without
further outside inquiry-
' End of February status reports shall also include identity of all shareholders who own more than five percent (5%) of
the company. Yeaz end reports shall be substantiated with IRS Forms W-2 and W-3.
Nd73091 -4-
(o)
(P)
(~
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 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 Incentive Recipient in writing within a
reasonable time after such fact is reasonably determined by the PAEDC Baazd 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 Incentive
Recipient or to any third parties for failure to make payments to Incentive Recipient under the terms
and conditions of this Agreement.
9. The PAEDC shall not be liable, in Agreement or otherwise, to Incentive Recipient, or to
any person or entity claiming by or through Incentive Recipient, for any expense, expenditure or
cost incurred by or on behalf of Incentive Recipient related to the project made the basis of this
Agreement. The PAEDC's sole liabilitylobligations, if any, shall be to Incentive Recipient and
shall be limited to the obligations detailed in Section 5(a) of this Agreement.
10. Incentive Recipient shall not use the funds herein for any purpose(s) other than that
specifically disclosed herein and as further disclosed within that certain application made by or on
behalf of Incentive Recipient, which application is incorporated herein for all purposes.
11. Funds granted by the PAEDC hereunder shall not be utilized by Incentive Recipient for
repayment of costs, expenditures or expenses incurred prior to the date of this Agreement.
LIQUIDATED DAMAGES FOR BREACH OF AGREEMENT
12. In the event Incentive Recipient fails to perform its obligations under this Agreement,
following nofice 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 Incentive Recipient in the executed Commercial
Promissory Note contained in Eabibit "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 S herein. Further, the PAEDC shall be entitled to recover its reasonable and customary
attorney'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
M47309I ' S "
other rights or remedies. Failure to exercise any right or remedy hereunder shall not constitute a
waiver of the right to exercise that or any other right or remedy at any time.
RECORDS /INSPECTION /PAEDC AUDIT
14. Incentive Recipient must establish and maintain sufficient records, as reasonably
determined by the PAEDC, to account for the expenditure and utilization of funds received by
Incentive Recipient from PAEDC under the terms and conditions of this Agreement.
15. Incentive Recipient 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 Incentive Recipient's application. Incentive Recipient shall provide reports of utilization of
said funds, as reasonably requested by the PAEDC, and upon termination of this Agreement:
16. Upon ten-day (10-day) advance notice, Incentive Recipient 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 Incentive
Recipient. Such rights to access shall continue as long as the records are maintained by Incentive
Recipient. incentive Recipient 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 Incentive Recipient and the PAEDC shall take reasonable
measures to protect such information from disclosure to third parties; however, PAEDC is subject to
the requirements of the Texas Open Meetings Act and Open Records Act (Tex.Gov.Code, 551 &
552). Incentive Recipient 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 Incentive
Recipient (or any party working by, through or under}.
I7. All records pertinent to this Agreement shall be retained by Incentive Recipient 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
Incentive Recipient detailing its 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 fmdings 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. Incentive Recipient shall provide PAEDC with all reports necessary for PAEDC
compliance with the Development Corporation Act.
l9. It is expressly understood and agreed by the parties hereto that if Incentive Recipient
fails to submit to PAEDC in a timely and satisfactory manner any report required by this
Agreement, PAEDC may, at its sole discretion, withhold further payments to Incentive Recipient
and/or demand assurances that Incentive Recipient can and will fully perform its contractual
obligations. If Incentive Recipient fails to provide adequate assurances then Incentive Recipient is
We77091 .6'
in breach, and any monies advanced by PAEDC automatically become a loan. If PAEDC withholds
such payments, it shall notify Incentive Recipient 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 ]ncentive Recipient.
20. The PAEDC reserves the right, from time to time, to carry out field inspections/audits to
ensure wmpliance with the requirements of this Agreement. After completion of any such audit,
the PAEDC may provide Incentive Recipient with a written report of the audit findings. If the audit
report details deficiencies in its performance under the terms and conditions of this Agreement, the
PAEDC may establish requirements for the timely coeection of any such deficiencies by Incentive
Recipient.
HOLD HARMLESS
21. INCENTIVE RECIPIENT 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 TH[S 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.
22. Incentive Recipient may not subcontract for performance credits described in this
Agreement without obtaining PAEDC's written approval, which may be withheld for any reason.
Incentive Recipient shall only subcontract for performance credits described in this Agreement after
Incentive Recipient has submitted a Subcontractor Eligibility Request, as specified by PAEDC, for
each proposed subcontract, and Incentive Recipient has obtained PAEDC's prior written approval.
Incentive Recipient, in subcontracting for any performances described in this Agreement, expressly
understands that in entering into such subcontracts, PAEDC is in no way liable to Incentive
Recipient's subcontractor(s).
23. In no event shall PAEDC's prior written approval of a subcontractor's eligibility, be
construed as relieving Incentive Recipient 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 [ncentive Recipient. PAEDC's approval does not
constitute adoption, ratification, or acceptance of Incentive Recipient's or subcontractor's
performance hereunder. PAEDC maintains the right to insist upon Incentive Recipient'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. Incentive Recipient, 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.
8673091 '7"
CONFLICT OF INTEREST /DISCLOSURE OBLIGATION
25. Conflict 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. Insofaz as relates to the conduct hereunder of Incentive
Recipient, its agents, employees or representatives, Incentive Recipient shall ensure compliance
with applicable provisions under Chapter 504, Local Government Code and Chapter 171 Local
Government Code V.T.C.A.
26. Disclosure: hi conjunction with execution of this Agreement, Incentive Recipient has
fully disclosed to PAEDC all known and potential owners of interests in Incentive Recipient
(whether shareholder, partner, limited partner, manager, member or otherwise). In the event of any
change in ownership or control of Incentive Recipient of five percent (5 %) or greater, Incentive
Recipient shall notify PAEDC in writing. Further, Incentive Recipient 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 Incentive Recipient.
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. Incentive Recipient shall ensure that no person shall on the grounds of race, color,
religion, sex, handicap, or national origin be excluded from participation in, be denied the benefits
of, or be subjected to discrimination under any program or activity funded in whole or in part with
funds provided under this Agreement. Additionally, funds shall be used in accordance with the
following requirements:
(a) To the greatest extent feasible, opportunities for training and employment 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,
Texas.
(c) If Incentive Recipient advertises for employment then it shall among any other
advertising that it chooses to undertake covenants that it will advertise in the Port Arthur
News. Incentive Recipient acknowledges that PAEDC does not intend to restrain any
advertising in additional publications or media nor direct any others than that stated.
wno~i -e-
LEGAL AUTHORITY
28. Incentive Recipient assures and guarantees it possesses legal and/or corporate authority
(i) to enter into this Agreement, receive funds authorized by this Agreement, and (ii) to perform the
obligations hereunder. Incentive Recipient has provided, or shall provide, as requested by the
PAEDC, such resolutions or other required authorizations necessary to evidence this authority.
29. The person or persons signing and executing this Agreement on behalf of Incentive
Recipient, or representing themselves as signing and executing this Agreement on behalf of
Incentive Recipient, do hereby warrant and guarantee that he, she, or they have been duly
authorized by Incentive Recipient to execute this Agreement on behalf of Incentive Recipient and to
validly and legally bind Incentive Recipient to all terms, performances, and provisions herein set
forth.
NOTICE OF LEGAL OR REGULATORY CLAIMS
30. Incentive Recipient shall give PAEDC immediate notice in writing of 1) any legal or
regulatory action, including any proceeding before an administrative agency filed against Incentive
Recipient, directly or indirectly; and 2) any material claim against Incentive Recipient, which may
impact continued operations. For purposes herein, "material" claims shall mean claims in excess of
$5,000. Except as otherwise directed by PAEDC, Incentive Recipient shall furnish immediately to
PAEDC copies of all pertinent documentation of any kind received by Incentive Recipient with
respect to such action or claim.
H473091 ~ 9
CHANGES AND AMENDMENTS
31. Except as specifically provided otherwise in this Agreement, any alterations, additions,
or deletions to the terms of this Agreement shall be by amendment in writing and executed by all
parties to this Agreement. Such amendments must be approved by the PAEDC Board of Directors
and, in many cases, by the City Council for City of Port Arthw.
32. It is understood and agreed by the parties hereto that performances under this Agreement
must be rendered in accordance with the regulations promulgated under the Development
Corporation Act, the assurances and certifications made to PAEDC by Incentive Recipient, and the
asswances and certifications made to the City of Port Arthw with regazd to the operation of the
PAEDC's Projects. Based on these considerations, and in order to enswe the legal and effective
performance of this Agreement by all parties, it is agreed by the parties hereto that the performances
under this Agreement aze by the provisions of the PAEDC Program and any amendments thereto
and may further be amended in the following manner: PAEDC may from time to time during the
period of performance of this Agreement issue policy directives which serve to interpret, or clarify
performance requirements under this Agreement. Such policy directives shall be promulgated by
the PAEDC Boazd of Directors in the form of PAEDC issuances, shall be approved by the City
Council and shall have the effect of qualifying the leans of this Agreement and shall be binding
upon Incentive Recipient, 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.
DEFAULT /TERMINATION
34. In the event of default of any of the obligations of Incentive Recipient detailed herein or
in the event of breach of any of the representations of or warranties of Incentive Recipient either
detailed herein or in its 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. Tn 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:
(e) Declare the Commercial Promissory Note executed in conjunction with this Agreement
immediately effective. If Incentive Recipient 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 Collateral Security Documents;
(c} Withhold, whether temporarily or otherwise, disbwsement of grant proceeds pending
coaection of the deficiency(s) by Incentive Recipient;
(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 waaanties
contained within this Agreement and Incentive Recipient's application to the PAEDC;
M7309i -10 -
(e) Withhold and/or disallow further PAEDC incentives to Incentive Recipient 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.
COMPLIANCE AUDITS
36. If directed by PAEDC Boazd, Incentive Recipient 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) Incentive Recipient 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 Incentive Recipient receives more than $50,000 in PAEDC
financial assistance provided by PAEDC in the form of grants, contracts, loans, loan
guarantees, property, cooperative agreements, interest subsidies, or direct appropriations.
Backup documentation regarding actual expenditures shall be provided by Incentive
Recipient. Said audit must be received and accepted by the Chief Executive Officer of
PAEDC and/or the PAEDC Board.
(b) At the option of Incentive Recipient, each audit required by this section may cover either
its entire operations or each department, agency, or establishment of Incentive Recipient
which received, expended, or otherwise administered PAEDC funds;
(c) Unless otherwise specifically authorized by PAEDC in writing, Incentive Recipient shall
submit the reporE of such audit to PAEDC within thirty (30) days after completion of the
audit, but no later than one hundred twenty (l20) days after the end of each fiscal period
included within the Term of this Agreement.
(d) As a part of its audit, Incentive Recipient 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. Incentive Recipient 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 its expense.
38. Incentive Recipient shall take all necessary actions to facilitate the performance of any
and all such audits, whether annual, mandatory or otherwise requested under this Agreement.
9677091
39. Subject to financial privacy requirements of Incentive Recipient 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 Incentive Recipient under this
Agreement until PAEDC has received certification from Incentive Recipient that its fiscal control
and fund accounting procedures are adequate to assure proper disbursal of and accounting for funds
provided under this Agreement. PAEDC shall specify the content and form of such certification.
SUPPLEMENTAL COVENANT
41. Incentive Recipient and any branch, division or department of Incentive Recipient
certifies that they have not and will not knowingly employ an "undocumented worker" which
means "an individual who, at the time of employment, is not lawfully admitted for permanent
residence to the United States or authorized under law to be employed in that manner in the United
States."
42. Incentive Recipient acknowledges that it has reviewed Chapter 2264, Texas Government
Cade and hereby affirmatively agrees by execution of this Agreement to repay the amount of any
incentive with interest at the rate often (10%) percent per annum not later than the 1201h day after
the date PAEDC notifies Incentive Recipient of a violation.
43. Incentive Recipient acknowledges PAEDC may bring a civil action or cover any
amounts owed under this Chapter and further acknowledges that PAEDC may recover court costs
and reasonable attorneys' fees incurred in an action brought under §2264.101(a). Incentive
Recipient is not liable for a violation of this Chapter by a subsidiazy, affiliate or franchisee of the
Incentive Recipient or by a person with whom the Incentive Recipient contracts.
ENVIRONMENTAL REQUIREMENTS
44. Incentive Recipient understands and agrees that by execution of this Agreement,
Incentive Recipient 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. Incentive Recipient further understands and agrees that
Incentive Recipient shall make all reasonable efforts to assist PAEDC in handling inquiries and
complaints from persons and agencies seeking redress in relation to environmental reviews covered
by approved certifications.
%C73091 - I3
ORAL AND WRITTEN AGREEMENTS /PRIOR AGREEMENTS
45. 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.
46. The documents required below are hereby made a part of this Agreement, and constitute
promised performances by Incentive Recipient in accordance with this Agreement:
Re uired
Exhibit "Al" Commercial Promissory Note for Loan
Exhibit "A2" Commercial Promissory Note for Conditional Grant
Exhibit "B" Dad of Trust
Exhibit "C" Commercial Security Agrament
Exhibit "D" UCC-1 Financing Statement
Exhibit "E" Manufacturing Equipment List
Exhibit "F" Certification Regarding Lobbying
Exhibit "G" Guaranty Agreement of
Exhibit "H" Guaranty Agrcement of
Exhibit "I"Co mpliance Statement
Incentive Recipient Application to PAEDC
VENUE
47. For purposes of litigation that may accrue under this Agrament, 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
Incentive Recipient
ATTN:
Texas 77_
CAPTIONS
48. 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.
COMPLIANCE WITH FEDERAL. STATE AND LOCAL LAWS
W77091 - I7 -
49. Incentive Recipient 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 Incentive Recipient under this
Agreement. Upon request by PAEDC and by the City, Incentive Recipient shall famish satisfactory
proof of its compliance herewith.
CONDITIONS PRECEDENT
50. This agreement has no legal consequences, 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:
VERIFIED BY
CITY COUNCIL RESOLUTION:
Guy Goodson, General Counsel for PAEDC
Resolution Number:
Mark T. Sokolow, City Attorney
W73091 ~ l4 -
AGREEMENT EXECUTION
CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION
SIGNED AND AGREED TO on the
President
day of , 200_.
By:
EDC Representative
Secretary
EDC Representative
SIGNED AND AGREED TO on the _ day of , 200_.
a
Title
Acknowledgment
wno9i . is .
EXHIBIT "Al"
Port Arthur, Texas
Effective Date: the
COMMERCIAL PROMISSORY NOTE
day of
200_
AND _/100 DOLLARS
Principal Amonnt:
($
Term of the Loan:
U from effective date.
Payment Schedule: Monthly until principal is paid fully, starting on the 15t' day of
.200
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 _ percent L%) per annum as detailed herein.
All past due principal and interest shall bear interest from date of melon 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:
Any notices required or permitted to be ven by the holder hereof to Maker pursuant to the
provisions of this note shall be in wri ' gand shall be either personally delivered or transmitted by first
class United States mail, addressed to~lvtaker 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
deliveeryry 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 Gen
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 pang, or with respect m
any property of any of them; or if any governmental authority or any court at the instance thereof shall
take possession of any substantial part of the properly 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, gwing of notice or otherwise; or if
Maker of any other liable party (if 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 party 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 falls to furimish
financial infommation requested by Lender, or if Maker or any other liable party furnishes or has
famished 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 securittyy for this
note; or any event occurs or condition exists which causes Lender to in ood faith deem itselfmsecure
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 coanection 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 suit is 61ed hereon, or proceedings are had in probate,
bankruptcy, receivership, reorganization, arrangement or other legal proceedings for collection hereof,
Maker and each other liable party agree to pay Lender its collection costs, including court costs and a
reasonable amount for attorney's fees.
It is the 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: () 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 maxunum 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, iftheretofore 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 detemuning
whether such rate exceeds the maximum lawful rate shall be made, to the extent permitted by
applicable law, by amortizing, rorating, allocating, and spreading such interest over the entire term of
the loan evidenced by this note~mcluding 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 Maker 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 primarily liable for the payment of all sums called for
hereunder; and, except for notices specifically regmred 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
Ex. "AI" .Z•
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 art, 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 onier
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 tts 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 , 200_.
Signature
Title
THE STATE OF TEXAS §
ACKNOWLEGEMENT
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 ,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:
,a
c/o
Texas 77,
Ex."AI" -3-
EXHIBIT "A2"
CONDITIONAL CONIl1'fERCLAL PROMISSORY NOTE
Port Arthur, Texas
This COMMERCIAL PROMISSORY NOTE becomes effective on the date when
a Texas (hereinafter called "Maker") breaches
t certain omrc Incentive Conh~act an o~~reement between the City of Port Arthur
Section 4A Economic Development Corporation (hereinafter called "Lender") and Maker, dated
.2006.
Effective Dete of Note: the day of , 200_.("date of breach")
Principal Amouut: $ ,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:
Peymeot Schedule:
FOR VALUE RECEIVED, the undersigned "Maker", romises 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 desi~ate 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 often 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 frfteen 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:
Any notices required or permitted to be given by the holder hereof to Maker pursuant to the
provisions of this note shall be m wrih'ng and shall be either personally delivered or transmitted by
fast 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 writingg 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
u~shvrrrents, if any, of any kind executed by Maker or by any other party as secunry for any toaas
owing by Maker to the Lender. Such lien instruments shall include those executed simultaneously
herewith, those heretofore executed, and those hereafter executed.
]f 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 became 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 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 parry is primarily
or secondarily liable shall not be paid when due or shall become due and payable by acceleration of
maturity thereof, ar if any event or condition shall occur which shall pemut 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 (rf 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 party shall sell substantially all or an inte 1
portion of its assets without the written consent of bender; or if Maker or any other liable party ails
to famish fuumcial information requested by Lender; or if Maker or any other liable party furnishes
or has famished an 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 ood
faith deem itself irLSecure 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 pnor 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 roceedings are had in probate,
bankruptcy, receivership, reorganization, arrangement or other legal proceedings for collection
hereof, Maker and each other liable party agree to pay Lender its coltecUOn 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 secunty for this note, it is ageed as follows: (i) the aggregate of all
consideration which constitrtes 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 maxunum 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 maxunum 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 (ui~ 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 by applicable law, by amortizing, prorating, allocating, and spreading such interest
over the entire term of the loan evidenced by this note(includmg all renewal and extended terms).
Ex. "A1" • ~
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 Maker 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 primarily liable for the payment of all sums called for
hereunder; and, except for notices s ecifically required to be given by the holder hereof to Maker
pursuant to the earlier provisions of this note, Maker and each other hable 1~ 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 da hereb consent to any and all renewals or extensions
from time to time, of this note, or anp part hereof either before or after maturity, all without an
notice thereof to an 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 remedres eg~nst Maker and to enforce its nghts against any security
therefor prior to enforcing payment of this Note by any other liable parry.
SIGNED AND AGREED TO on the _ day of , 200_.
sy:
signature
Its:
Title
THE STATE OF TEXAS
ACKNOWLEGEMENT
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 helshe executed the same as the act and
deed of a ,for the purposes and consideration therein
expressed, and the Capacities therein stated.
GIVEN [ENDER MY HAND AND SEAL OF OFFICE, this the day of
_ ,200
Notary Public, State of Texas
MAKERS' ADDRESS FOR RECEIPT OF NOTICE:
Ex. "A2" -3-
c/o
. Texas 77
Ex. "A2" _G_
EXHIBTT "B"
Date:
Grantor:
Grantors' Mailing Address
(including county):
Trustee:
Trustee's Mailing Address:
Beneficiary:
DEED OF TRUST
200
Texas 77_
County)
GUY N. GOODSON
Getmer Gertz, L.L.P.
P.O. Box 4915
Beaumont, Texas 77704
(Jefferson County)
PORT ARTIIUR SECTION 4A ECONOMIC
DEVELOPMENT CORPORATION ("PAEDC")
Beneficiary's Mailing Address
(including county): 4173 39'" Street
Port Arthur, Texas 77642
(Jefferson County)
Note (No. I l
Date: , 200_
Amount: $
Maker:
Payee: PAEDC (Beneficiary)
Final Maturity Date: , 20^
Note fNo. 21
Date: , 200_
Amount: , $ minus
incentive credits earned by Maker according to that certain
Economic Incentive Contract and Loan Agreement between
Grantor and Beneficiary.
Maker:
Payee: PAEDC {Beneficiary)
Fina] Maturity Date:
Pro 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 are 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 are 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 pans 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), 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;
(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 all 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;
(t) 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
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thereof, including change of grade of streets, curb cuts or other rights of access, for
any public or quasi-public use under any law;
(n) all right, title, and interest of Grantor in and to ail 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 tights of
ingress and egress and all reversionary rights or interests of Grantor with respect to
such property and al] of Grantors 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
year 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 standard mortgage clause;
e. provides flood insurance at any time the property is in a flood hazazd area; and
f. contains such other coverage as Beneficiary may reasonably require;
5. comply at all times with the requirements of the 80% coinsurance clause;
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6. deliver the inswance policy to Beneficiary and deliver renewals to Beneficiary at
least ten days before expiration;
7. keep any buildings occupied as required by the inswance 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
t. Beneficiary may appoint in writing a substitute or successor trustee, succeeding to
all rights and responsibilities ofTrustee;
2. if the proceeds of the note are used to pay any debt secwed 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, wiles
Grantor is in default of Notes or Deed of Trust in which case insurance proceeds
may be applied to reduce Grantor's obligation under Nates 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 attomey's fees, plus interest on
those sums from the dates of payments at the rate stated in the note for matwed,
unpaid amounts. The sum to be reimbwsed 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 s prior lien note or other instrwnent, 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 forecloswe this lien, in which case Beneficiary or
Beneficiary's agent shall give notice of the forecloswe sale, as provided by
the Texas Property Code as then amended; and
c. Pwchase 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 forecloswe 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 warratrty 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 forecloswe;
b. To Beneficiary, the full amount of principle, interest, attorney's fees, and
other charges due and unpaid;
c. Any amount required by law to be paid before payment to Grantor; and
d. To Grantor, any balance.
General Provisions
1. If any of the property is reconveyed under this deed of trust, Grantor shall
immediately surrender possession to the Beneficiary. If Grantor fails to do so,
Grantor shall become a tenant at sufferance of the Beneficiary, subject to an
action for forcible detainer.
2. Recitals in any Trustee's deed conveying the property will be presumed to be Uve.
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.
S. 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 Beneficiazy 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 are not
assigned. Grantor warrants the validity and enforceability of the assignment.
Grantor may as Beneficiary's licensee collect rent and other income and receipts
as long as Grantor is not in default under the note or this deed of trust. Grantor
will apply all rent and other income and receipts to payment of the note and
performance of this deed of trust, but if the rent and other income and receipts
exceed the amount due under the note and deed of trust, Grantor may retain the
excess. If Grantor defaults in payment of the note 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. Beneficiary may exercise
Beneficiary's rights and remedies under this paragraph without taking possession
of We property. Beneficiary shall apply all rent and other income and receipts
collected under this paragraph fast to expenses incurred in exercising
Beneficiary's rights and remedies and then to Grantor's obligations under the note
and this deed of trust ut the order determined by Beneficiary. Beneficiary is not
required to act under this paragraph, and acting under this paragraph does not
waive any of Beneficiary's other rights or remedies. If Grantor becomes a
voluntary or involuntary bankrupt, Beneficiary's filing a proof of claim in
bankruptcy will be tantamount to the appointment of a receiver under Texas law.
8. Interest on the debt secured by this deed of trust shall not exceed the maximum
amount of nonusurious interest that may be contracted for, taken, reserved,
chazged, or received under law; any interest in excess of that maximum amount
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shall be credited on the principal of the debt or, if that has been paid, refunded.
On any acceleration or required or permitted prepayment, any such excess shall
be canceled automatically as of the acceleration or prepayment or, if already paid,
credited on the principal of the debt or, if the principal of the debt has been paid,
refunded. This provision overrides other provisions in this and all other
instruments concerning the debt.
9. When the context requires, singulaz nouns and pronouns include the plural.
10. The term note includes all sums secured by this deed of trust.
11. This deed of trust shall bind, insure to the benefit of, and be exercised by
successors in interest of all parties.
12. If Grantor and Maker are not the same person, the term Grantor shall include
Maker.
l3. If all or any part of the Property is sold, conveyed, leased for a period longer than
three (3) years, leased with the option to purchase, or otherwise sold (including
contract for deed), without the prior written consent of Beneficiary, then
Beneficiary may at its option declare the outstanding balance of the Note(s), plus
accrued interest to be immediately due and payable. The creation of a subordinate
lien, any sale thereunder, any deed under threat or order of condemnation, any
conveyance solely between Makers, the passage of title by reason of the death of
a Maker 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 CONNNCT[ON WITH THAT
CERTAIN ECONOMIC INCENTIVE CONTRACT AND LOAN AGREEMENT
OF EVEN DATE.
SIGNED AND AGREED TO on the day of , 200_.
Signature
Title
THE STATE OF TEXAS
COUN"I'Y OF JEFFERSON
AC'KNOWLEGEMENT
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 helshe executed the same as the act and
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deed of , a , 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 RETURN TO:
Guy N. Goodson
Germer Gertz, L.L.P.
P.O. Box 4915
Beaumont, Texas 77704
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Attachment to Deed of Trust
Leal Proaerty Description
Ex.°B" 'g'
EXHIBIT "C"
COMMERCIAL SECURITY AGREEMENT
Dated
Tlrhtnrlcl
zoo
Secured Party
Port Arthw Economic Development
Co oration "PAEDC"
4173 39 Street
Texas 77 Port Arthw, Texas 77642
(hereinefttt referred to as "Debtor" whether one or more) (htreinafter referred to es "Secured Party )
FOR VALUE RECEIVED, the receipt and sufficiency of which is hereby acknowledged,
Debtor grants to Secwed Party the security interest (and the pledges and assignments as
applicable) hereinafter set forth and agrees with Secwed Party as follows:
A. OBLIGATIONS SECURED. The first priority lien and pledges and assignments
as applicable granted hereby are to secure punctual payment and performance of the following:
(i) certain promissory note(s) of even date herewith in the original principal sum of $
executed by Debtor and payable to the order of Secwed Party, and any and all extensions,
renewals, modifications and rearrangements thereof, (ii) certain obligations of Debtor to Secwed
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 natwe 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 sepazately and collectively referred
to as the "Obligations"). Debtor acknowledges that the security interest (and pledges and
assignments as applicable) hereby granted shall secwe all future advances as well as any and all
other indebtedness, liabilities and obligations of Debtor to Secwed 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, 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.
~^ Specltic 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, fuushed goods and other tangible personal
property, wheresoever located, now owned or hereafter acquired and held for sale or
lease or famished 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 winch is now or
hereafter located at the following locations: {give locations}
^ All Futures. 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 andlor 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:
_^ 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 docuuments, whether rww existing or owned by
Debtor or hereafter arising or acquired by Debtor, evidencing both a debt and security
interest in or lease of specific goods.
_^ Farm Products. A security interest in alt of Debtor's interest in any and all crops,
livestock and supplies used or produced by Debtor in farming operations wheresoever
located: Debtor's residence is in the county shown at the beginning of this Agreement
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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 hr the
following counties: (give counties)
^ Securities. A pledge and assignment of and security interest in the securities
described below, together with alt instruments and general intangibles related thereto and
all monies, income, proceeds end 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.
_^ 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 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 Parry 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 ofset-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 similaz 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 famished 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 famished, accurate and complete in all
material respects.
4. Authority: Debtor has full right and authority to execute and perform this
Agreement and to create the security interest (and pledges and assignment as applicable} created
by this Agreement. The making and performance by Debtor of this Agreement will not violate
any articles of incorporation, bylaws or similaz document respecting Debtor, any provision of
law, any order of court or governmental agency, or any indentwe or other agreement to which
Debtor is a party, or by which Debtor or any of Debtor's property is bound, or be in conflict
with, result in a breach of or constitute (with due notice and/or lapse of time) a default under any
such indenture or other agreement, or result in the creation or imposition of any chazge, 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.
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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 inconformity 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 tmusual risk, or to penalty, forfeiture or capture, or that would render inoperative any
insurance ht 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 pernut any chazge, lien,
security interest, adverse claim or encumbrance of any and every nature whatsoever against the
Collateral or any part thereof.
5. No Removal: Except as otherwise provided in this Agreement, Debtor shall not
remove the Collateral from the county or counties designated at the beginning of this Agreement
without Secured Party'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.
7. Notices and Reports: Debtor shall promptly notify Secured Party in writing of
any change in the name, identity or structure of Debtor, any chazge, 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 famish such other reports, information
and data regazding Debtor's financial condition 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.
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9. Additional Filings: Debtor agrees to execute and deliver such financing
statement or statements, or amendments thereof or supplements thereto, or other documents as
Secwed Party may from time to time require in order to comply with the Texas Uniform
Commercial Code (or other applicable state law of the jurisdiction where any of the Collateral is
located) and to preserve and protect the Secwed Party's rights to the Collateral.
10. Protection o[ Collateral: Secwed Party, at its option, whether before or after
default, but without any obligation whatsoever to do so, may (a) discharge taxes, claims, chazges,
liens, security interests, assessments or other encumbrances of any and every nattue whatsoever
at any time levied, placed upon or asserted against the Collateral, (b) place and pay for insurance
on the Collateral, including inswance that only protects Secwed 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 chazges related to the
Collateral, or {e) take any other action to preserve and protect the Collateral and Secured Party's
rights and remedies under this Agreement as Secwed 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 Secwed Party upon demand for any
payment made or any expense incurred by the Secwed .Party pursuant to this authorization.
These. payments and expenditwes, 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 Secwed 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, procwe, execute and deliver all such
additional and further acts, things, deeds, interests and assurances as Secwed Party may requ'ue
from time so time to protect, assure and enforce Secwed Party's rights and remedies.
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), then
and other risks as Secwed Party may require, containing such terms, in such form and amounts
and written by such companies as may be satisfactory to Secwed Party, ali of such inswance to
contain toss payable clauses in favor of Secwed Party as its interest may appear. All policies of
inswance shall provide for ten (10) days written minimum cancellation notice to Secwed Party
and at the request of Secwed Party shall be delivered to and held by it. Secwed Party is hereby
authorized to act as attorney for Debtor in obtaining, adjusting, settling and canceling such
inswance and endorsing any drafts or instruments. Secwed Party shall be authorized to apply the
proceeds from any inswance to the Obligations Secwed hereby whether or not such Obligations
are then due end payable. Debtor specifically authorizes Secured Party to disclose information
from the policies of inswance to prospective inswers regarding the Collateral.
14. Additional Collateral: If Secwed 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
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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 the 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 aze genuine and in all respects what they purport to be; (b)
each account is valid and subsisting and arises out of a bona fide sale of goods sold and delivered
to, or out of and for services theretofore actually rendered by the Debtor to the account debtor
named in the account; (c) the amount of the account represented as owing is the correct amount
actually and unconditionally owing except for normal cash discounts and is not subject to any
setoffs, credits, defenses, deductions or countercharges; and (d) Debtor is the owner thereof free
and clear of any charges, liens, security interests, adverse claims and encumbrances of any and
every nature whatsoever.
3. Collection of Accounts: Secured Party shall have the right in its own name or in
the name of the Debtor, whether before or after default, to require Debtor forthwith to transmit
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 Pally in writing,
Debtor shall continue to collect accounts, account for same to Soured Party, and shall not
commingle the proceeds of collection of accounts with any funds of the Debtor. [n 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
Secwed 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 Secwed Party's request,
whether before or after default, Debtor shall take such action and execute and deliver such
documents as Secwed Parry may reasonably request in order to identify, confirm, mark,
segregate and assign accounts and to evidence Secured Party's interest in same. Without
limitation of the foregoing, Debtor, upon request, agrees to assign accounts to Secwed Percy,
identify and mark accounts as being subject to the security interest (or pledge or assignment as
applicable) granted hereby, mazk Debtor's books and records to reflect such assignments, and
forthwith to transmit to Secwed Party in the form as received by Debtor any and all proceeds of
collection of such accounts.
5. Account Reports: Debtor will deliver to Secwed Party, prior to the tenth (10) day
of each month, or on such other frequency as Secwed Party may request, a written report in form
and content satisfactory to Secwed 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
Secwed Party of the assertion by any account debtor of any set-ofl; 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
Secwed Party the appropriate identifying information with respect to any such returned or
repossessed goods relating to accounts included in assignments or identifications made pwsuant
hereto.
G. ADDITIONAL PROVISIONS REGARDING INVENTORY. The following
provisions shell 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 Secwed Party may request, a written report in
form and content satisfactory to Secured Party, with respect to the preceding month or other
applicable period, showing Debtor's opening 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 Secwed 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
Ez. "C.. - B
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 if
Secured Party deems itself insecure, Debtor may use the inventory in any manner not
inconsistent with this Agreement, may sell that part of the Collateral consisting of inventory
provided that all such sales 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 cotuse 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 ell action necessary to protect and
preserve the inventory.
H. ADDITIONAL PROVISIONS REGARDING SECURITIES AND SIMILAR
COLLATERAL. The following provisions shall apply to all securities and similar property
included within the Collateral:
1. Additional Warranties: As to each and all securities and similaz property
included within the Collateral (including securities hereafter acquired that aze part of the
Collateral), Debtor further represents and warrants (as of the time of delivery of same to Secured
Patty) as follows: (a) such securities are genuine, validly issued and outstanding, fully paid and
non-. assessable, and aze not issued in violation of the preemptive rights of any person or of any
agreement by which the issuer or obligor thereof or Debtor is bound; (b) such securities aze not
subject to any interest, option or right of any third person; (c) such securities aze in compliance
with applicable lew concerning form, content and mannec of prepazation and execution; and (d)
Debtor acquired and holds the securities in compliance with all applicable taws 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 shares or otherwise, received by
Debtor shall be held by Debtor in trust for Secured Party and Debtor shall immediately deliver
same to Secured Party to be held as 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 Parry shall
have the authority to demand of the issuer or obligor, and to receive and receipt for, any and all
payments, dividends and other distributions payable in respect thereof, regazdless Of the medium
•9-
Ez."C"
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
rocking such payment.
4. Voting Rights: Upon default, or if Secured Party deems itself insecure, Secured
Parry 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 shazeholders, such proxy to be
irrevocable and deemed coupled with an interest. The rights, powers and authority of said proxy
shall remain in full force and effect, and shall not be rescinded, revoked, terminated, amended or
otherwise modified, until all Obligations have been fully satisfied.
5. No Duty: Secured Party shall never be liable for its failure to give notice to
Debtor of default in the payment of or. upon the Collateral: Secured Party shall have no duty to
1 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 Party actually has, or may be deemed to have, knowledge
thereof). The foregoing provisions of this paragraph shall he fully applicable to all securities or
similaz 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.
1 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 Party,
agrees to effect and obtain such registrations, filings, statements, rulings, consents and other
matters as Secured Party may request.
e: -c° ~ 10
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 andlor any similar filings or notices with any
applicable state agencies, and said attorney in fact shall leave full power and authority to do, take
and perform all and every act and thing whatsoever requisite, proper or necessazy 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, tbere may be legal restrictions or limitations affecting Secured Party in any
attempts to dispose of certain portions of the Collateral in the enforcement of its rights and
remedies hereunder. Far these reasons Secured Party is hereby authorized by Debtor, but not
obligated, in the event any default hereunder, to sell al( 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 Patty
is also hereby authorized by Debtor, but not obligated, to take such actions, give such notices,
obtain such rulings and consents, and do such other things as Secured Party may deem
appropriate in the event of a sale or disposition of any of the Collateral. Debtor cleazly
understands that Secured Party may in its discretion approach a restricted number of potential
purchasers and that a sale under such circumstances may yield a lower price for the Collateral or
any part or parts thereof than would otherwise be obtainable if same were registered and sold in
the open 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
E..'C" -II-
agreement to waive in favor of Secured Party any and all rights of set-off or similaz rights or
remedies to which such issuer or obligor may be entitled, and, in connection therewith, to
execute and cause the issuer or obligor to execute, any and 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 by 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 limiting the
foregoing, it s specifically understood and agreed that Secured Party shall have no responsibility
for ascertaining any maturities or similaz 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).
J. EVENTS OF DEFAiJLT. Debtor shall be in default hereunder upon the
happening of any of the following events or conditions: (i) non-payment when due (whether by
acceleration of maturity or otherwise) of any payment of principal, interest or other amount due
on any Obligation; (ii) the occurrence of any event which under the terms of any evidence of
indebtedness, indenture, loan agreement, security agreement or, similar instrument permits the
acceleration of maturity of any obligation of Debtor (whether to Secured Parry 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 Parry 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 aze 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 ate hereby waived by Debtor and
any maker, endorser, guazantor, surety or other party fiable 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 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
five (5) days before the time after which any private sale or other disposition will be made.
3. Expenses: Debtor shall be liable for and agrees to pay the reasonable expenses
incurred by Secured Party in enforcing its rights and remedies, in retaking, holding, testing,
repairing, improving, selling, 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, shat] 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 towazd Secured Party's expenses and other
Obligations in such order or manner as Secured Parry may elect. Debtor shall be entitled to any
surplus if one results after lawful application of the proceeds. Debtor shall remain liable for any
deficiency.
Es. "C•• . ~ ~ _
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 contrazy herein, or in any
of the documents evidencing the Obligations or otherwise relating thereto, no such provision
shall require the payment or permit the collection of interest in excess of the maximum permitted
by applicable usury laws. If any such excessive interest is so provided for, then in such event (i)
the provisions of this paragraph shall govern and control; (ii) neither the Debtor nor his heirs,
legal representatives, successors or assigns or any other party liable for the payment thereof,
shall be obligated to pay the amount of such interest to the extent that is in excess of the
maximum amount permitted by law; (iii) any such excess interest that may have been collected
shall be, at the option of the holder of the instrument evidencing the Obligations, either applied
as a credit against the then unpaid principal amount thereof or refunded to the maker thereof; and
(iv) the effective rate of interest shall be automatically reduced to the maximum lawful rate
under applicable usury laws as now or hereafter construed by the courts having jurisdiction.
2. Joint and Several Responsibility: If this Security Agreement is executed by
more than one Debtor, the obligations of all such Debtors shall be joint and several.
3. Waivers: Debtor and any maker, endorser, guarantor, surety or other party liable
in any capacity respecting the Obligations hereby waive demand, notice of intention to
accelerate, notice of acceleration, notice of non-payment, presentment, protest, notice of
dishonor and any other similaz notice whatsoever.
4. Severability: Any provision hereof found to be invalid by courts having
jurisdiction shall be invalid only with respect to such provision (and then only to the extent
necessary to avoid such invalidity). The offending provision shall be modified to the maximum
extent possible to confer upon Secured Party the benefits intended thereby. Such provision as
modified and the remaining provisions hereof shall be construed and enforced to the same effect
as ifsuch
offending provision (or portion thereof} had not been contained herein, to the maximum extent
possible.
5. Use of Copies: Any carbon, photographic or other reproduction of any financing
statement signed by Debtor is sufficient as a financing statement for all purposes, including
without limitation, filing in any state as may be permitted by the provisions of the Uniform
Commercial Code of such state.
6. Relationship to Other Agreements: Tltis Security Agreement and the security
interests (and pledges and assignments as applicable) herein granted aze in addition to (and not in
substitution, novation or dischazge ot) any and all prior or contemporaneous security agreements,
e~.c. -'^
EXHIBIT "D"
UCC-1
EXHIBIT "E"
CAPITAL OUTLAYS
i
1
1
EXHIBIT "F"
CERTIFICATION REGARDING LOBBYING
For Contracts, Grants, Loans, and Cooperative Agreements
The undersigned certifies, to the best of his knowledge and belief, that:
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 modification of any contract, grant,
loan, or cooperative agreement.
The undersigned shall require that the language of this certification be included in
the award documents for all sub-awazds 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 materia- 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.
By:
Signature
Its:
Title
EXHIBIT "G"
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT, dated as of , 200 (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 constiNtion
and laws of the State of Texas, and (the "Guarantor'), a private
corporation duly organized and validly existing under the laws of the State of
Capitalized terms rued 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 . a
as grantee (the "Grantee"). Those defuritions are incorporated in this Guaranty by reference.
WITNESSETHTHAT: 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 fmancial grants to the
Grantee to enable the Grantee to improve and construct the Project, and the Grantee rs 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 lawfiil authority to
enter into this Guaranty and to perform and observe the provisions hereof on their respective parts to
be performed and observed.
NOW, THEREFORE, in consideration of the premises and representations and
agreements hereinafter contained and subject to the terms hereof, and for other good and valuable
consideration, the receipt of which is acknowledged hereby, the Guarantor agrees with the PAEDC
as follows:
ARTICLE I.
REPRESENTATIONS AND WARRANCIES OF THE GUARANTOR
Section 1.1. The Guarantor represents and warrants as follows:
(a) The Guarantor 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.
(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 Guararttot's covenants, agreements and obligations hereunder do not,
and will not, (i) violate any law now existmg, (ii) contravene or constitute a default
under any agreement, indenhue, trust agreement or understanding to which the
Guarantor is a party or by which it or its property maybe bound, or (iii) contravene any
provision of the Guarantor's articles of incorporation, code of regulations or bylaws,
each as amended to date.
(d) This Guaranty (i) is made in furtherance of the purposes for which the
Guarantor was incorporated, (ii) is necessary to promote and further the business of the
Guarantor and is, in the estimation of the Guarantor, desirable to promote the best
interests and farther the mission of the Guarantor, and (iii) will result in duect fmancial
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 anytime:
(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 otherwtse, together with all late chazges, disbursements, expenses, and
deficiencies pursuant to that certain Commercial Promissory Note made by the Grantee
to the PAEDC as of even date herewith (collectively the "Guaranteed Debt") together
with the performance of Grantee's obligations under any documents or instruments
executed in connection with or given to secure the 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 guaranteed 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 separate cause of acflon hereunder,
and separate suits maybe brought hereunder as each cause of action arises.
Section 2.2. The Guarantor's wvenants, agreements and obligations under this
Guaranty are absolute and unconditional, are a present, and shall be a contmumg, 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 pard or provision shalt 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 wrthout hmitation, any
of the following, regardless of whether there is nonce to or consent of the Guarantor with respect
thereto:
(a) the compromise, settlement, release or termination of any or all of the
covenants, agreements or obligations of the PAEDC under the Agreement;
Ez. "Ff _ 7 _
(b) the failure to give notice to the Guarantor of the occurrence of a default
under this Guaranty or an Event of Default under the Agreement, except as provided
specifically in this Guaranty;
(c) the waiver of the 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 extenston of 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 wilt impair the Guarantor's ability to observe and perform its
covetants, 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 maybe
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 pemtitted 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 i[ or its property is or may be bound;
e~ .K. - r .
(k} the default or failure of the Guarantor to observe or perform fully any of its
covenants, agreements or obligations under this Guaranty or any other agreement,
contract or other instrument or document to which it is a party or by which it or its
property is or may be bound;
(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 instrument 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 obligafion, 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, dimutution or
defense in the action on this Guaranty. The Guarantor shall not exercise any right of subrogation
under this Guaranty until its obligations hereunder have been discharged in full, and such
obligations shall not be discharged by virtue of any impainnent 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, Guarantor 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 ds remedies
against Grantee, to comply with this section. If Guarantor fmds that further action against Grantee is
futile, Guarantor may request in writing that PAEDC halt executing remedies against Grantee, after
which PAEDC may proceed with remedies against Guarantor.
Section 2.5. The Guarantor covenants and agrees to pay all reasonable costs,
expenses and fees {including without limitation, to the extent permitted by law, all court costs and
attomeys' fees) that may be incurred by the PAEDC in enforcing or attempting to enforce this
Guaranty, whether by suit or otherwise, following any default on the part of the Guarantor under
this Guaranty.
Section 2.6. 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 Guarantor to abide by or to observe or perform
any covenant, agreement or obligation hereunder, or any ittaccuracy in any material
adverse respect of, or any matenal 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
Ex. ^H"
against a third parry) under federal bankruptcy law, as in effect from
time to time;
(iii) a general assignment by the Guarantor for the benefit of creditors;
(iv) the appointment of a receiver for the Guarantor or for the whole or
any substantial part of its property; or
(v) the dissolufion or liquidation of the Guarantor or the failure by the
Guarantor to vacate within 90 days any execution, garnishment or
attachment of such a consequence that it will impair the Guarantor's
ability to carry out its covenants, agreements and obligations
hereunder. The term "dissolution or liquidafion of the Guarantor," 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 declaretion or exercise during the pendency of or
immediately following any bankruptcy, liquidation or reorganization proceedings.
(c) [f the default hereunder shall consist of the breach of any of the covenants,
agreements or obligations of the Guarantor under Section 2.1, or rf 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 regardless 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.
)n the event that the Guarantor shall be required to make payment to the PAEDC as
described in the preceding pazagraph, in addition to that ppayment, 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 bylaw, the PAEDC's attorneys and counsel, and (u)
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 obtaining knowledge of such default shall promptly give the
Guarantor written notice of the default at the Guarantor's Notice Address, by registered
or certified mail, postage prepaid, return receipt requested, and if the default continues
unremedied for 30 days following the giving of the notice, the PAEDC shall have the
rights, remedies and powers, and the Guarantor shall make the payments, described in
Section 2.7(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 Guarantor is taking appropriate corrective action as
permitted under the Agreement.
e: -n•• . s .
Section 2.8. Rights, remedies and powers under this Guaranty may be exercised,
either separately or cumulatively, in the event of one or more defaults under this Guaranty.
ARTICLE III.
NOTICE AND SERVICE OF PROCESS PLEADINGS AND OTHER PAPERS
Section 3.1. The Guarantor covenants and agrees 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, tt
designates and appoints es the Guarantor's agent, without power of revocation,
(a) the
,Texas 77~ and lus 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 gapers that may be served upon
the Guarantor as a result of any of its covenants, agreements and obligations under dus Guaranty.
Section 3.2. Any process, pleadings, notices ar other papers served upon any agent
appointed in the preceding Section shall be sent at the same time by registered or certified marl,
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 fiom time to time.
ARTICLE IV.
MISCELLANEOUS
Section 4.1. The covenants, agreements and obligations of the Guarantor hereunder
shall arise absolutely and unconditionally when the Agreement becomes effective.
Section 4.2. No remedy, right or power conferred herein upon or reserved hereunder
to the PAEDC is intended to be exclusive of any other available remedy, right or power, but each
remedy, rigJtt 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, inequity 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 maybe 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 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 particular breach so waived and shall not be deemed to waive any other
breach hereunder. No waiver, amendment, modification or release of this Guaranty shall be
established by conduct, custom or course of dealing, but any amendment, modification or release
Ex "M' .6.
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.
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 guarantor hereunder of, any Person that succeeds to or assumes, as
the case maybe, the Guarantor'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 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 Guarantor and the PAEDC with
respect to the subject matter hereof. This Guaranty may be signed simultaneously in several
counterparts, each of which shall be deemed to constitute an original, but all of which together shall
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 unenforeeability 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 acwrdance 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
ECONOMIC DEVEI,oPMENT CORPORATION
ay:
President
Secretary
sy:
Signature
Its:
Title
APPROVED AS TO FORM:
Guy N. Goodson, GERMER GERTZ, L.L.P.
Es. "}f - 8"
STATE OF TEXAS
COUNTY OF JEFFERSON
On this day of , 200 before me, a Notary Public in and
for said County and State, personally appeared ,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 year aforesaid.
Notary Public, State of Texas
STATE OF TEXAS
COUNTY OF JEFFERSON
On this day of , 200_, before me, a Notary Public in and
for said County and State, personally appeazed ,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.
CN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official
seal on the day and yeaz aforesaid.
Notazy Public, State of Texas
STATE OF
COUNTY OF
On this day of , 200_, before me, a Notary Public in and
for said County and State, personally appeazed 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 year aforesaid.
Notary Public, State of
Ec"H" -9-
EXHIBIT "H"
GUARANTY AGREEMENT
TH[S GUARANTY AGREEMENT, dated as of _~ 200_ {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 existing 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 a as grantee (the
"Grantee"). Those defutitions sre incorporated in this Guaranty 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 Guaranty, 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 Guaranty and to perform and observe the provisions hereof on their respective parts to
be performed and observed.
NOW, THEREFORE, in consideration of the premises and representations and
agreements hereinafter contained and subject to the terms hereof, and for other good and valuable
consideration, the receipt of which is acknowledged hereby, the Guarantor agrees with the PAEDC
as follows:
ARTICLE I.
REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR
Section 1.1. The 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.
(b) The Guarantor has authorized the signing and delivery of this Guaranty by
all necessary and proper corporate action.
(c) The signing, delivery, observance and performance by the Guarantor of this
Guaranty and the Guarantor's covenants, agreements and obligations hereunder do not,
and will not, (i) violate any law now existing, (ii) contravene or constitute a default
under any agreement, indenture, trust agreement or understanding to which the
Guarantor is a party or by which it or its property may be bound, or (iit) contravene any
provision of the Guarantor's articles of incorporation, code of regulations or bylaws,
each as amended to date.
(d) This Guaranty (i) is made in furtherance of the purposes for which the
Guarantor 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 indirect financial
benefits to the Guarantor.
ARTICLE R.
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 prompt performance of all covenants, agreements and
obligations of the Grantee under the Agreement, and
(b) the payment of all principal, interest and other sums due, whether by
acceleration or otherwise, together with all late charges, disbursements, expenses, and
deficiencies pursuant to that certain Commercial Promissory Note made by the Grantee
to the PAEDC as of even date herewith (collectively the "Guazanteed Debt") together
with the performance of Grantee's obligations under any documents or instruments
executed m connection with or given to secure the Guazanteed 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 guaranteed hereby or in enforcing this Guazanty.
The Guarantor will pay alt payments in lawful money of the United States of America. Each default
in payment of any amount payable hereunder shall give rise to a separate cause of action hereunder,
and 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, are a present, and shall be a continuing, guazanty 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, regardless of the legality, validity, regularity or
enforceability ofthe Agreement or any other document.
The obligations of the Guazantor described in the preceding paragraph shall not be
amended, modified or impaired upon [he happening of any event, including without limitation, any
of the following, regardless of whether there is notice to or consent of the Guarantor with respect
thereto:
(a) the compromise, settlement, release or termination of any or all of the
covenants, agreements or obligations of the PAEDC under the Agreement;
~.^r -z-
(b) the failure to give notice to the Guarantor of the occurrence of a default
under this Guaranty or an Event of Default under the Agreement, except as provided
specifically in this Guaranty;
(c) the waiver of the payment, observance or performance by the PAEDC or
the Guarantor of any of their covenants, agreements or obligations under this Guazanty
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
i under the Agreement;
~ (t) the taking or the omission of any action under this Guaranty or the
Agreement;
(g} any failure, omission or delay on the paR of the PAEDC to enforce, assert
1 or exercise any right, power or remedy conferred on the PAEDC under this Guazanty or
j 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 impa"v the Guarantor's ability to observe and perform its
covenants, agreements and obligations under any agreement, contract or other
instnuent 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 m ttus subsection,
shall not be construed to include the cessation of the corporate existence of the
Guarantor resulting either fiom 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 Guazantor in writing of its inability to pay its
debts generally as they become due,
(ii) the entering of an order for relief in any case commenced by or
against the Guazantor (except cases commenced by the Guarantor
against third parties) under federal bankntptcy 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 pemritted 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 parry or by which it or its property is or may be bound;
~
i e,. °r
-3~
(k) the default or failure of the Guarantor to observe or perform fully any of its
covenants, agreements or obligations under this Guaranty or any other agreement,
contract or other instrument or document to which it is a party or by which it or its
property is or may be bound;
(I) the default of the PAEDC under the Agreement; or
(m) to the extent pemtitted by law, the invalidity of the Agreement, this
Guararty, any agreement, contract or other instrument or doctunent 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 Guazantor 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 Guazanry. The Guarantor shall not exercise any right of subrogation
under this Guaranty until its obligations hereunder have been discharged in full, and such
obligations shall not be discharged by virtue of any impairment of such rights of subrogation.
Section 2.4. If there is a default by the Grantee under the Agreement or the
Commercial Promissory Note made by the Grantee thereunder, the PAEDC shall proceed fast
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, Guarantor 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,
Guarantor may request in writing that PAEDC halt executing remedies against Grantee, after which
PAEDC may proceed with remedies against Guarantor.
Section 2.5. The Guarantor covenants and agrees to pay all reasonable costs,
expenses and fees (including without limitation, to the extent pemtitted by law, all court costs and
attomeys' fees) that may be incurred by the PAEDC in enforcing or attempting to enforce this
Guazanty, whether by suit or otherwise, following any default on the part of the Guarantor 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 Guarantor to abide by or to observe or perform
any covenant, agreement or obligation hereunder, or any inaccuracy in any material
adverse respect of, or any material adverse omission from, any representation or
warranty herein, shall constitute a default hereunder.
(b) The occurrence of any of the fallowing 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;
ax. °i° . a .
(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;
(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 Guarantor or the failure by the
Guarantor to vacate within 90 days any execution, garnishment or
attachment of such a consequence that it will impair the Guarantor's
ability to carry out its covenants, agreements and obligations
hereunder. The term "dissolution or liquidation of the Guarantor," as
used in this clause, shall not be construed to include the cessation of
the corporate existertce 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, liquidafion 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 proviston for payment, to the PAEDC without further demand or
notice and regardless of whether there has been any other default or event of default
under the Agreement, the amount due and payable under the Agreement and the
Guaranty.
In the event that the Guarantor shall be required to make payment to the PAEDC as
described in the preceding paragraph, in addition to that payment, the 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 pemutted by law, the PAEDC's attorneys and counsel, and (ii)
any reasonable expenses or liabilities incurred by the PAEDC hereunder.
(d) to the case of a default hereunder, other than under Sections 2.1 and 2.7(b),
the PAEDC upon obtaining knowledge of such default shall promptly give the
Guarantor written notice of the default at the Guarantor's Notice Address, by registered
or certified mail, postage prepaid, retttm 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
Sections 2.l 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.
~-~. .s.
Section 2.8. Rights, remedies and powers under this Guaranty may be exercised,
eithec separately or cumulatively, in the event of one or more defaults under this Guaranty.
ARTICLE III.
NOTICE AND SERVICE OF PROCESS PLEADINGS AND OTI~R PAPERS
Section 3.1. The Guarantor coverants 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 effector any obligations of the Grantee remain outstanding
thereunder. If the Guarantor should not be subject to that service of process for any reason, tt
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 tray 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 CV.
MISCELLANEOUS
Section 4.1. The covenants, agreements and obligations of the Guarantor hereunder
shall arise absolutely and unconditlonallytyhen 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, inequity 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 wnstrued 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 Guaranty shall be breached by any patty
and the breach shall be duly waived thereafter by the other patty so empowered to act, the waiver
shall be limited to the particular breach so waived and shall not be deemed to waive any other
breach hereunder- No waiver, amendment, modification or release of this Guaranty shall be
eK°r -6-
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 ties Guaranty so to amend this Guaranty.
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 guarantor hereunder of, any Person that succeeds to or assumes, as
the case maybe, the Guarantor'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.
i, Section 4.5. This Guaranty constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, between the Guarantor and the PAEDC with
respect to the subject matter hereof. This Guaranty may be signed simultaneously in several
counterparts, each of which shall be deemed to constitute an original, but all of which together shall
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 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.
1N 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 they duly authorized officers or
representatives, as of the date first above written.
CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
By:
President
By:
Secretary
Ex. "I" - ~ ,
Signature
Title
APPROVED AS TO FORM:
Guy N. Goodson, GERMER GERTZ, L.L.P.
1
e=.^r.
'8'
STATE OF TEXAS
COUNTY OF JEFFERSON
On this day of .200_, before me, a Notary Public in and
for said County and State, personally appeazed ,President of the PAEDC, who
acknowledged that, with due authorization, he did sign the foregoing instnunent on behalf of the
PAEDC and that the same is his free act and deed individually as such officer and the free act
and deed of the PAEDC.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official
seal on the day and year aforesaid.
Notary Public, State of Texas
STATE OF TEXAS
COUNTY OF JEFFERSON
On this day of , 200_, before me, a Notary Public in and
for said County and State, personally appeazed ,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 year aforesaid.
Notazy Public, State of Texas
STATE OF
COUNTY OF
On this day of , 200_, before me, a Notary Public
in and for said County and State, personally appeared 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 year aforesaid.
Notary Public, State of
~„~.. ,y.
EXHIBIT "I"
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.
sy:
Signature
Title