HomeMy WebLinkAboutPR 12964:ECOSEPA LLCinteroffice
MEMORANDUM
To: Mayor, City Council, City Manager
From: Mark T. Sokolow, City Attorney /~
Date: December 10, 2004
Subject: P. R. No. 12964; EDC/City Joint Meeting of December
14, 2004
Attached is P. R. No. 12964 approving an economic incentive
agreement between the City of Port Arthur Section 4A Economic
Development Corporation and ECOSEPA, LLC.
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Attachment
cc: ECOSEPA
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P. R. No. 12964
12/10/2004 jw
RESOLUTION NO.
A RESOLUTION APPROVING AN ECONOMIC INCENTIVE
AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION AND ECOSEPA, LLC
WHEREAS, it is in the public interest to the citizens for the City of
Port Arthur Section 4A Economic Development Corporation to enter into an
economic incentive agreement with ECOSEPA; and
WHEHEAS, ECOSEPA desires a grant of $450,000 and a loan of $450,000 to
build a recycling facility; and
WHEREAS, the facility will be located adjacent to the Proctor Street
Extension; and
NOW THEREFORE, HE IT HESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT
ARTHUR:
Section 1. That the facts and opinions in the preamble are true and
correct.
Section 2. That the Executive Director of City of Port Arthur Section
4A Economic Development Corporation is herein authorized to execute an
Economic Incentive Agreement with ECOSEPA in substantially the same form as
attached hereto as Exhibit "A", with an effective date (starting date) of
January 1, 2005.
Section 3. That the recipient will also sign a Deed of Trust,
Guarantees, and other security instruments as detailed in the agreement.
Section 4. That a copy of the caption be spread upon the Minutes of the
City Council.
READ, ADOPTED AND APPROVED on this day of , A.D.,
2004, at a Regular Meeting of the City Council of the City of Port Arthur,
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Texas, by the following vote: AYES: Mayor
Council Members '
;
NOES:
MAYOR
ATTEST:
CITY SECRETARY
APPROVED AS TO FORM:
CITY ATTORNEY
APPROVED FOR ADMINISTRATION:
CITY MANAGER
APPROVED AS TO THE AVAILABILITY OF FUNDS:
DIRECTOR OF FINANCE
APPROVED BY THE CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION:
SEE CONFIDENTIAL MEMO
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EXHIBIT "A"
PORT ARTHUR ECONOMIC DEVELOPMENT CORPORATION
ECONOMIC INCENTIVE CONTRACT and LOAN AGREEMENT
This Economic Incentive Contract and Loan Agreement ("Agreement") is entered into, with
an effective date of January 1, 2005, by and between the Port Arthur Economic Development
Corporation and ECOSEPA ENVIRONMENTAL INDUSTRIES. LLC.
RECITALS
WHEREAS, the Recipient is a limited liability corporation that has been formed by EcoWater
Industries L.L.C. and SEPA. EcoWater Industries has represented itself as a leader in madne,
industrial and commercial liquid waste treatment and recycling. EcoWater has also represented
itself as incorporating revolutionary technologies to efficiently recover oils and clean or recycle
wastewater and that it generates most of its revenues by recycling oily wastewater (from ship bilges,
spill clean up, industrial wash water, gas stations, shipyards and similar industries. EcoWater has
also stated that it has a 160 company client base ranging from majors including the US Navy, PPG
and BASF FINA. SEPA has represented itself as a twenty year old Australian multi-national
engineering design firm; and
WHEREAS, the Recipient has represented that the Recipient will take the best of
EcoWater's history and technology and SEPA's equipment and chemical expertise to build a world-
class recycling facility in Port Arthur; and
WHEREAS, the Recipient has represented that the Recipient will expend or commit in cash,
land and in equipment in excess of two million dollars to this project,
WHEREAS, the EcoWater presently owns approximately one acre of land on the Proctor
Extension that has been owner financed in the amount of $ 70,000 from Coral Marine Services, Inc.
that is described in Exhibit "H-1" with the financing document being attached hereto as Exhibit H-la"
(having an outstanding arrearage of appreximately $60,000 as of December 7, 2004) and presently
has an option to purchase another approximately 6 acres of adjacent land described in Exhibit "H-2"
with the option being attached hereto as Exhibit "H-2a"; and
WHEREAS, EcoWater is in the process of moving its operations from barges located along
the intracoastal canal to the land described in Exhibit "H-I"; and
WHEREAS, EcoWater presently has and plans to move additional equipment on the site
described in Exhibit "H-2" which is capable of recovering oils and clean or recycle wastewater.
WHEREAS, SEPA has indicated that it has a bank guarantee facility of $ 200,000, which
can be increased to $ 500,000 if required, and
WHEREAS, SEPA has represented that its shareholders can provide up to $1 million in
project working capital if and when required,
WHEREAS, SEPA has represented thai it operates a quality assurance system in
accordance with the principles of lSO 9002 and that it can provide project specific quality manuals,
and
a.economic incentive agreement_ecosepa
WHEREAS, SEPA has represented that it specializes in the field of waste water treatment,
industrial waste, the treatment of hazardous and toxic wastes including the rehabilitation of
contaminated sites and sludge treatment and dewatering
WHEREAS, the Recipient will be creating a recycling facility, to-wit: a methyl ester facility
which will be receiving waste and virgin animal and vegetable fats, oils, and greases, recycling it
and producing up to 300,000 gallons per month of biodiesel and other products; and
WHEREAS, the Recipient also plans to build additional facilities as to continue to recycle
waste oil so that oit can be recovered and so/d; and
WHEREAS, the project costs including the dedication of land, buildings, equipment is
approximately $ 3,115,000 as delineated in the application of the Recipient for funding.; and
WHEREAS, the EDC has funds derived from sales tax revenue that may be utilized for
economic development projects as defined under Article 5190.6 V.T.C.A.; and
WHEREAS, the proposed project and economic incentive agreements related to same Must
be approved by the City of Port Arthur, as well as the Port Arthur Economic Development
Corporation ("PAEDC"); and
WHEREAS, projects undertaken by the Recipient pumuant to this Contract must principally
be for economic development as has been determined by the PAEDC and as established under the
guidelines of Article 5190.6 V.T.C.A., as amended;
NOW, THEREFORE, The Parties hereto do mutually agree as follows:
AGREEMENT TERMS
SECTION 1. PARTIES
This Economic Incentive Contract ("Agreement") is made and entered into by and between
the City of Port Arthur Section 4A Economic Development Corporation (hereinafter called the "EDC')
acting herein by its Executive Director, duly authorized by Resolution of the City Council of the City
of Port Arthur and ECOSEPA ENVIRONMENTAL INDUSTRIES, LLC, (hereinafter called
"Recipient") acting herein by its President, duly authorized by its Board of Directors. Recipient
agrees by the execution hereof, that it is bound to the obligations and to the pertormance of the
tasks described herein.
SECTION 2. CONTRACT TERM
This Agreement shall commence on initial funding and shall continue for a term of seventy-
two (72) months, subject to earlier termination, voluntary or involuntary, as provided herein.
SECTION 3. PERFORMANCE BY RECIPIENT
A/Recipient has represented and warranted to the EDC and the loan of $450,000 and the
conditional grant of $450,000 has been extended in reliance upon said representations as to the
following:
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1. Construction of recycling center: The Recipient shall build a recycling center in
Port Arthur that can receive grease trap effluent and recycle it to biodiesel and other
marketable fuels and receive waste oil and recycle it to a fuel on the property as
described in Exhibit "H-I" and "H-2" (as detailed in Recipient's application to the
EDC) within the City of Port Arthur within the budget as delineated in Exhibit "A" and
in the timetables as delineated in Exhibit "B".
2. Retention of Employees. The Recipient will employ not less than twenty-two (22)
new full-time equivalent employees as delineated in their application over a 72
month period at an average base wage rate of $10 per hour. The timing of said
employment shall be as detailed in Exhibit H-3 attached hereto and incorporated
herein for all purposes.
3. Performance Criteria. The Recipient shall perform ail activities in accordance with
the Performance Statement attached hereto as Exhibit A, the Budget attached
hereto as Exhibit B, the Project Implementation Schedule attached hereto as Exhibit
C, the Applicable Laws and Regulations attached hereto as Exhibit D, the
Certifications attached hereto as Exhibit E, and the assurances, certifications and
other statements, representations and warranties made by the Recipient in its
application for the project funded under the terms and conditions of this Agreement.
4. Accounting and Bookkeeping: It shall be Recipient's responsibility to furnish its
own accounting services including clerical, statistical and bookkeeping for
expenditures made by the Recipient in performance with the obligations detailed
herein.
5. Performance Credits against the Conditional Grant: Recipient shall receive
"performance credits" to satisfy its conditional obligations grant detailed in Exhibit
"G-la" as follows: For each $16.00 in payroll (Excluding management payroll which
shall be deemed to include those management personnel/positions identified in
Exhibit "F") created, Recipient will receive a $1.00 credit against said Note subject
to a maximum credit in year one of $ 50,000, a maximum credit in year two of
$50,000, a maximum credit in year three of $75,000, a maximum credit in year four
of $75,000, a maximum credit in year five of $100,000 and a maximum credit of
$100,000 in year six for a total of $450,000 in credits which will satisfy the
employment conditions for the grant and for the note. Notwithstanding the foregoing,
for each new employee of Recipient who is a Port Arthur resident, rather than the
$1.00 credit for each $8.00 in payroll provided hereinabove, Recipient shall earn
$1.00 to be applied against payment of the conditional grant evidenced by Exhibit
"G- I a" for each $4.00 in payroll paid to a Port Arthur resident. Proof of residency
shall be provided by Recipient t o t he P AEDC in such form and content as
reasonably requested by the PAEDC and/or its counsel. This shall include but not
be limited to water bills, driver's licenses and voting registration certificates.
(B) Loan/Collateral Documents: The Recipient shall execute and deliver to the EDC, in
conjunction with the execution of the Agreement, the following:
(a) Conditional Grant in the form and content detailed in Exhibit "G-la"
and Commercial Promissory Note "G-lb";
(b) Commercial Security Agreement evidenced by Exhibit "G-2";
(c) Security Agreement Pledge evidenced by Exhibit "G-3";
(d) Deed of Trust evidenced by Exhibit "G-4";
(e) Guaranty Agreement(s) to be executed by EcoWater Industries, LLC and by
SEPA in the form and content evidenced by Exhibits "G-5a and G-5b';
(f) UCC-1 financing statements in conjunction with Exhibit "G-2" and in the form of G-6;
(g) Such Corporate Authorizations as requested by EDC; and
(h) Such other documentation detailed in Exhibit "G-7" as reasonably requested by
EDC and/or its counsel.
SECTION 4. EDC'S OBLIGATIONS
A. Conditional Fundinq Obliqations of EDC
The EDC's sole obligation to Recipient hereunder shall be to provide funding of the
loan/conditional grant, not to exceed the funding limitation declared both herein and within
the Promissory Note, for actual and reasonable costs incurred by Recipient for "Authorized
Expenditures" defined herein. This conditional funding shall be subject to limitations detailed
herein and shall further constitute the EDC's sole obligation under the terms and conditions
of this Contract.
1. The EDC is, per the Agreement, reserving $900,000 of its reserves to this project
during the fiscal year. The funding hereof is also subject to the annual budget cycle
of the EDC, public hearings thereon and EDC Board and Council approval as
required by/aw. For future fiscal years, it is expressly understood and agreed by the
parties hereto that the EDC funding obligations herein are contingent upon the actual
receipt of adequate sales tax revenue funds to meet the EDC's liabilities under this
Agreement. In future fiscal years, if adequate funds are not available to make
payments under this Agreement, the EDC shall notify Recipient in writing within a
reasonable time after such fact is reasonably determined by the EDC Board of
Directors. The EDC, at its sole option, may then terminate this Agreement without
further liability. In the event of such termination by the EDC, the EDC may, at its sole
option, immediately cease all further funding, if any, required by this Agreement, and
the EDC shall not be liable to Recipient or to any third parties for failure to make
payments to Recipient under the terms and conditions of this Agreement.
2. The EDC shall not be liable, in contract or otherwise, to the Recipient, or any person
or entity claiming by or through Recipient, for any expense, expenditure or cost
incurred by or on behalf of Recipient related to the project made the basis of this
Agreement. The EDC's sole liability/obligations, if any, shall be to Recipient and
shall be limited to the conditional funding obligations detailed in Section 4 of this
Agreement.
3. Recipient shall not use the funds conditionally granted 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 Recipient, which application is
incorporated herein for all purposes.
4. Funds conditionally granted by the EDC hereunder shall not be utilized by Recipient
for repayment of costs, expenditures or expenses incurred prior to the date of this
Agreement unless specifically disclosed in writing by Recipient as part of or incident
to Recipient's application and as specifically approved by this Agreement.
4
5. EDC shall not be liable for costs incurred or performances rendered by Recipient
before commencement of this Contract or after termination of this Contract.
Notwithstanding the foregoing, Recipient shall be authorized to submit for
reimbursement of Authorized Expenditures incurred prior to the execution date of
this Contract, subiect to the maximum liability limit detailed in Section 4B.
B. Maximum
(a) Subject to the limitations provided herein, the EDC shall provide credit extensions
to Recipient in the amount of not more than $900,000, as detailed in Exhibits "G-la"
(Conditional Grant - $450,000) and "G-1 b" (the Promissory Notes - $450,000),
repayment of which shall be governed by the terms of this Agreement and said
Instrument.
(b) The Recipient shall execute the Conditional G rantand Promissory N ore,
evidenced by Exhibits "G-la" and "G-1 b", of which the conditional/partial repayment
of Exhibit "G-la" is governed herein.
SECTION 5. DEFAULT/REFUND OBLIGATIONS
A. In the event Recipient defaults in performance of its obligations hereunder, including failure
to meet the new employment schedule attached hereto as Exhibit C (Employment
Obligations), the performance schedule attached hereto as Exhibit D or in the event
Recipient breaches its representations and warranties to the EDC contained herein or in its
application for grant, the EDC, at its sole option, may terminate its remaining funding
obligations, if any, detailed in Section 4 herein. Further, as provided in Section 5 (B) herein,
the EDC may recover from Recipient all or a portion of the conditional grant made the basis
of this Agreement, in addition to such remedies as are defined in Section 18 herein.
B. In the event the EDC demands that Recipient reimburse all or any part of the funds
advanced hereunder, same shall be due and payable immediately upon tender of EDC's
demand advising of Recipient's full or partial default. In the event Recipient fails to
reimburse said funds within sixty (60) days of the tender of written demand by EDC, in
addition to reimbursement of the principle funds advanced hereunder, Recipient shall further
be obligated to reimburse EDC interest on said advanced funds at the default rate detailed
within the Promissory Notes, accruing from thirty days subsequent to EDC's default notice.
Further, in the event of default and failure of the Recipient to reimburse to EDC the funds
advanced hereunder, the EDC shall further be entitled to recover its reasonable and
customary attorney's fees and costs of Court incurred in collection of said obligation.
C. It is expressly understood and agreed by the parties hereto that any dght or remedy provided
for in this Section 5 or in any other provision of this Contract shall not preclude the exercise
of any other dght or remedy under this Contract or under any provision of law, nor shall any
action taken in the exercise of any right or remedy be deemed a waiver of any other rights
or remedies. Failure to exercise any dght or remedy hereunder shall not constitute a waiver
of the right to exercise that or any other right or remedy at any time.
SECTION 6. RECORDS / INSPECTION / AUDIT
A. Recipient must establish and maintain sufficient records, as reasonably determined by the
EDC, to account for the expenditure and utilization of funds received by Recipient from the
EDC under the terms and conditions of this Agreement. Recipient shall further submit such
records to the EDC using Exhibit "H-4".
B. Recipient shall maintain records of the receipt and disposition of all grant funds provided
hereunder as necessary to allow the EDC to audit and verify proper utilization of said funds
in compliance with this Agreement and the representations and warranties contained herein
and in Recipient's application. Recipient shall provide reports of utilization of said grant
funds, as reason to be requested by the EDC, and upon final termination of this contract.
C. Recipient shall give the EDC, 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 Recipient pertaining to this Agreement. Such rights to
access shall continue as long as the records are maintained by Recipient. Recipient agrees
to maintain such records in an accessible location. Recipient further agrees to provide to
the EDC, not less than ua__q.g.~, such reports in a form and content acceptable to the EDC,
confirming Recipient's performance status, including performance related to project
construction (as may be applicable) and job creation performance. Although other reports
may be provided by Recipient and/or required by the EDC, at a minimum, Recipient shall
complete the reports attached hereto as Exhibit "H-5" (with attachment) quarterly. As to job
creation performance, such reports shall include such documentation substantiating the
accuracy of such reports, including, at a minimum, 941 payment reports, Texas Workforce
Commission reports, or other such reports confirming total jobs, payroll and other relevant
information. In the event the EDC prescribes a form for such reporting, Recipient shall utilize
same and attach such relevant documentation necessary to allow the EDC to verify said
report without further outside inquiry.
D. All records pertinent to this Agreement shall be retained by 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
Recipient detailing Recipient's compliance with its obligations provided herein. Further, in
the event any litigation, claim or audit arising out of or related to this Agreement is instituted
before the expiration of the three year period and extends beyond the three year period, the
records will be maintained until all litigation, claims or audit findings involving this Agreement
and the records made the basis of same have been resolved. Further, records relating to
real property acquisition, including any long-term lease, shall be retained for a period equal
to the useful life of any repairs made by the Recipient utilizing EDC funds.
E. All records pertinent to this Contract shall be retained by Recipient for three years following
the date of termination of this Contract or submission of the final close-out report, whichever
is later, with the following exceptions:
1. If any litigation, claim or audit is started before the expiration of the three year period
and extends beyond the three year period, the records will be maintained until all
litigation (including any appeal), claims or audit(s) involving the records have been
resolved.
2. Records relating to real property acquisition or long-term lease shall be retained for
a period equal to the useful life of any repairs made with EDC funds.
F. Recipient shall submit to EDC such reports on the operation and performance of this
Contract as may be required by EDC including but not limited to the reports specified in this
Section 8. Recipient shall provide EDC with all reports necessary for EDC compliance with
Article 5190.6 V.T.C.A. Recipient further agrees to provide to the EDC, not less than
quarterly, such reports in a form and content acceptable to the EDC, confirming Recipient's
performance status, including performance related to project construction (as may be
applicable) and job creation performance. As to job creation performance, such reports
shall include such documentation substantiating the accuracy of such reports, including, at
a minimum, 941 payment reports, Texas Workforce Commission reports, or other such
reports confirming total jobs, payroll and other relevant information. In the event the ED(:;
prescribes a form for such reporting, Recipient shall utilize same and attach such relevant
documentation necessary to allow the EDC to vedfy said report without further outside
inquiry.
G. It is expressly understood and agreed by the parties hereto that if Recipient fails to submit
to EDC in a timely and satisfactory manner any report required by this Contract, EDC may,
at its sole discretion, withhold any or all payments otherwise due or requested by Recipient
hereunder. If EDC withholds such payments; it shall notify Recipient in wdting of its decision
and the reasons therefore. Payments withheld pursuant to this paragraph may be held by
EDC until such time as the delinquent obligations for which funds are withheld are fulfilled
by Recipient. Notwithstanding the foregoing, if Recipient fails to fullyand completely comply
with its reporting requirements despite wdtten demand by EDC, after expiration of thirty (30)
days from the date of said written notice, EDC, at its sole option, may terminate this
Agreement and demand reimbursement of all, or any portion thereof, of the funds advanced
hereunder.
H. The EDC reserves the fight, from time to time, to carry out field inspections/audits to ensure
compliance with the requirements of this Agreement. Recipient shall attend a compliance
meeting after the notice of award of funds provided herein and prior to the first draw of any
such funds. After completion of any such audit, the EDC, at its option, may provide the
Recipient with a wdtten report of the audit findings. If the audit report details deficiencies in
the Recipient's performance under the terms and conditions of this Agreement, the EDC
may establish requirements for the timely correction of any such deficiencies by the
Recipient.
I. CHANGE IN CONTRACT/OWNERSHIP: In conjunction with execution of this Agreement,
Recipient has fully disclosed to EDC all owners/known potential owners of interests in
Recipient (whether stockhold or otherwise). In the event of any change in ownership or
control of Recipient of five percent (5 %) or greater, Recipient shall notify EDC in writing.
Any change in ownership or contract in excess of twenty percent (20 %) (whether individual
or aggregate) shall constitute an event of default under this Agreement, the Promissory
Notes attached as Exhibit "G-la" and "G-lb" and all collateral documentation at the sole
discretion of EDC. In the event of exercise of said discretion, the EDC shall be entitled to all
default remedies provided herein, within the Promissory Note or within the collateral
documentation.
SECTION 10. HOLD HARMLESS
Recipient agrees to hold harmless the EDC and the City of Port Arthur from any and all claims,
demands, and causes of action of any kind or character which may be asserted by any third party
occurring, arising out of or in any way related to this Agreement, the project made the basis of this
Agreement and the utilization of grant funds provided by this Agreement.
SECTION 11. SUBCONTRACTS
A. Recipient may not subcontract for performances described in this Contract without obtaining
EDC's written approval, which should not be unreasonably withheld. Recipient shall only
subcontract for performance described in this Contract after Recipient has submitted
Subcontractor Eligibility Request, as specified by EDC, for each proposed subcontract, and
Recipient has obtained EDC's prior written approval, based on the information submitted,
of Recipient's intent to enter into such proposed subcontract. Recipient, in subcontracting
for any performances described in this contact, expressly understands that in entering into
such subcontracts, EDC is in no way liable to Recipient's subcontractor(s).
B. In no event shall any provision of this Section 11, specifically the requirement that Recipient
obtain EDC's prior wdtten approval of a subcontractor's eligibility, be construed as relieving
Recipient of the responsibility for ensuring that the performances rendered under all
subcontracts are rendered so as to comply with all terms of this Contract, as if such
performances rendered were rendered by Recipient. EDC's approval under Section 11 does
not constitute adoption, ratification, or acceptance of Recipient's or subcontractor's
performance hereunder. EDC maintains the right to insist upon Contractor's full compliance
with the terms of this Contract, and by the act of approval under Section 11, EDC does not
waive any right of action which may exist or which may subsequently accrue to EDC under
this Contract.
C. Recipient, as well as all of its approved subcontractors, shall comply with all applicable
federal, state, and local laws, regulations, and ordinances for making preocurement under this
Contract.
SECTION 12. CONFLICT OF INTEREST/DISCLOSURE OBLIGATION
A. Conflict of Interest: No person who (1) is an employee, agent, officer or elected or appointed
official of the City of Port Arthur or the EDC and (2) who has participated in a decision
making process (without recusing him/herself and executing a conflict affidavit) may obtain
a personal or financial interest or benefit from an EDC assisted activity, or have an interest
in any contract, subcontract, or agreement (or proceeds thereof) with respect to a ED(:;
assisted activity, during their tenure or for one year thereafter. Recipient shall ensure
compliance with applicable provisions under Article 5190.6 V.T.C.A. and Chapter 171 Local
Government Code V.T.C.A.
B. Disclosure: In conjunction with execution of this Agreement, Recipient has fully disclosed
to EDC all owners/known potential owners of interests in Recipient (whether stockholders
or otherwise). In the event of any change in ownership or control of Recipient of five percent
(5 %) or greater, Recipient shall notify EDC in wdting. Any change in ownership or contract
in excess of twenty percent (20 %) (whether individual or aggregate) shall constitute an
event of default under this Agreement, the Promissory Notes attached as Exhibit "G-la" and
"G-lb" and all collateral documentation at the sole discretion of EDC. In the event of
exercise of said discretion, the ED(:; shall be entitled to all default remedies provided herein,
within the Promissory Note or within the collateral documentation. Further, Recipient shall
be obligated to notify in writing the EDC Director and EDC counsel in the event any time
prior to, dudng or one (1) year after the term of this Agreement, any City or EDC employee
or representative or any third party with a conflict of interest (whether disclosed or not)
detailed in Section 12 (A) obtains or proposes to obtain a financial benefit, direct or indirect,
from Recipient. Failure to provide said notice immediately or no later than five (5) business
days after receipt of information detailing said violation shall constitute a default herein.
SECTION 13. NONDISCRIMINATION/EMPLOYMENT/REPORTING
A. 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 pad with
funds provided under this Contract. Funds shall be used in accordance with the following
requirements:
1. To the greatest extent feasible, opportunities for training and employment arising in
connection with the planning and carrying out of any project assisted with EDC funds
provided under this Contract be given to Port Arthur residents; and
2. To the greatest extent feasible, contracts 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. The recipient can abide by this Agreement by awarding the contract to
the lowest responsible bidder.
3. The Recipient shall notify the Economic Development Corporation of employment
opportunities as to give the EDC a reasonable opportunity to forward names and
resumes of Port Arthur residents.
4. The Recipient shall advertise in the Port Arthur News as to all contracting
employment and/or training opportunities.
B. Beginning on the 6 month anniversary of the Contract and continuing at each 6 month
interval of the term of the Contract, the Recipient shall furnish to the EDC confidential
reports detailing the total number of new full time employees hired by Recipient, with said
report detailing (i) the new employee(s) by number or otherwise so as to ensure pdvacy, (ii)
the job description/position, (iii) the wage rate, (iv) date of hire, (v) residence of the
employee(s) and, (vii) any other information reasonably requested by EDC, together with
supporting documentation. Further, said report shall provide similar information on all
terminations (whether voluntary or otherwise) occurring dudng the same period, together
with supporting documentation.
C. The Specialty Contractors and persons delineated in Exhibit "K' are herein approved.
SECTION 14. LEGAL AUTHORITY
A. Recipient assures and guarantees that Recipient possesses legal and/or corporate authority
to enter into this Contract, receive funds authorized by this Contract, and to perform the
services Recipient has obligated to perform hereunder and has provided, and will in the
future provide, as requested by the EDC, such corporate resolutions necessary to evidence
this authority.
The person or persons signing and executing this Contract on behalf of Recipient, or
representing themselves as signing and executing this Contract on behalf of Recipient, do
hereby warrant and guarantee that he, she or they have been duly authorized by Recipient
to execute this Contract on behalf of Recipient and to validly and legally bind Recipient to
all terms, performances, and provisions herein set forth.
B. Identity of Officers/Directors/Shareholders of Recipient shall be disclosed in wdting annually
to EDC within ten (10) days of the Recipient's annual meeting but in no event later than
March 31 of any calendar year. This disclosure shall be in addition to change in control
disclosure required by Section 9 (I) hereinabove.
SECTION 15. LITIGATION AND CLAIMS
Recipient shall give EDC immediate notice in writing of 1 ) any legal or regulatory action, including
any proceeding before an administrative agency filed against Recipient, directly or indirectly, in
compliance with this Contract; and 2) any material claim against Recipient which may impact
continued operations. For purposes herein, "material" claims shall mean claims in excess of
$50,000. Except as otherwise directed by EDC, Recipient shall furnish immediately to EDC copies
of all pertinent documentation of any kind received by Recipient with respect to such action or claim.
SECTION 16. CHANGES AND AMENDMENTS
A. Except as specifically provided otherwise in this Contract, any alterations, additions, or
deletions to the terms of this Contract shall be by amendment in wdting and executed by
both parties to this Contract.
B. It is understood and agreed by the parties hereto that performances under this Contract must
be rendered in accordance with Article 5190.6 V.T.C.A., the regulations promulgated under
Article 5190.6 V.T.C.A., the assurances and certifications made to EDC by Recipient, and
the assurances and certifications made the City of Port Arthur with regard to the operation
of the EDC's Projects. Based on these considerations, and in order to ensure the legal and
effective performance of this Contract by both parties, it is agreed by the parties hereto that
the performances under this Contract are by the provisions of the EDC Program and any
amendments thereto and may further be amended in the following manner: EDC may from
time to time during the pedod of performance of this Contract issue policy directives which
serve to establish, interpret, or clarify performance requirements under this Contract. Such
policy directives shall be promulgated by the Executive Director when authorized by the City
Council of Port Arthur and the EDC Board of Directors in the form of EDC issuances shall
have the effect of qualifying the terms of this Contract and shall be binding upon Recipient,
as if written herein.
C. Any alterations, additions, or deletions to the terms of this Contract which are required by
changes in Federal, state law or local law are automatically incorporated into this Contract
without written amendment hereto, and shall become effective on the date designated by
such law or regulation.
SECTION 17. DEFAULT/TERMINATION
t0
In the event of default of any of the obligations of the Recipient detailed heroin or in the event of
breach of any of the representations of or warranties of Recipient either detailed herein or in
Recipient's application to the EDC, the EDC may, at its sole option, terminate this Agroement, in
whole or in part. In the event of such termination, in addition to (i) any other remedies available to
the EDC as provided by the laws of the State of Texas or (ii) any other remedies available to the
EDC as provided herein, the EDC may, at its sole option, utilize one or more of the following actions
to resolve or otherwise remedy said default:
1. Exercise any remedies provided herein and/or within the Loan/Collateral Documents
identified in Section 3 (B; and
2. Withhold, whether temporarily or otherwise, disbursement of grant proceeds pending
corroction of the deficiency(s) by Recipient; and
3. Disallow all or a part of the grant expendituro which is not in compliance with the
terms and conditions of this Agreement or in compliance with the roprosentations
and warranties contained within this Agroement and the Recipient's application to
the EDC; and
4. Withhold and/or disallow further EDC grants to the Recipient; and
5. Take any and all other remedies that may be legally available to the EDC, as
authorized by the terms and conditions of this Agreement and as may be authorized
by the laws of the State of Texas; and
6. Notwithstanding the foregoing, if Recipient fails to fully and completely comply with
its obligations hereunder despite written demand by EDC, after expiration of thirty
(30) days from the date of said wdtten notice, EDC, at its sole option, may terminate
this Agreement and demand roimbursement of all, or any portion thereof, of the
funds advanced hereunder as provided moro particularly in Section 5 (B)
hereinabove; and
7. Declaro the Promissory Notes executed in conjunction with this Agroement
immediately due and payable, in full and exercise its default romedies provided
under collateral documentation (Deed of Trust, Secudty Agroement and/or Pledge)
executed in conjunction with said Note and this Agroement.
In addition to the forogoing, the parties agroe that this Agreement may be terminated at any time
when both parties agroe, in wdting, to the terms and conditions of any such voluntary termination.
SECTION 18. AUDIT
A. Unless otherwise directed by EDC, Recipient shall arrange for the performance of an annual
financial and compliance audit of funds received and performances rendered under this
Contract, subject to the following conditions and limitations:
1. Recipient shall have an audit, which audit may be limited to use of funds received
from the EDC, made for any of its fiscal years included within the contract period
specified in Section 2 of this Contract in which the Recipient receives more than
$25,000 in EDC financial assistance provided by EDC 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 the Recipient. Said audit must be received and
accepted by the Director of the Recipient and/or the Board of Directors of the
Recipient.
2. At the option of Recipient, each audit required by this section may cover either
Recipient's entire operations or each department, agency, or establishment of
Recipient which received, expended, or otherwise administered EDC funds;
3. Unless otherwise specifically authorized by EDC in writing, Recipient shall submit the
report of such audit to EDC within thirty (30) days after completion of the audit, but
no later than one hundred twenty (120) days after the end of each fiscal period
included within the period of this Contract.
4. As a part of its audit, Recipient shall verify expenditures according to the Budget
attached as Exhibit B. Any discrepancies in excess of $1,000 shall be specifically
documented in writing.
B. Notwithstanding Subsection A of this Section 18, EDC reserves the right to conduct annual
and/or semiannual financial and compliance audit(s) of funds received and performances
rendered under this Contract. Recipient agrees to permit EDC or its authorized
representative to audit Recipient's records and to obtain any documents, materials, or
information necessary to facilitate such audit.
C. Recipient understands and agrees that it shall be liable to immediately reimburse EDC for
any costs disallowed pursuant to financial and compliance audit(s) of funds received under
this Contract.
D. 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, including
audits conducted pursuant to this Section 18.
E. Subject to financial primary requirements and properly designated requests for non-
disclaimer due to proprietary reasons, all approved EDC audit reports may be made
available for public inspection.
F. EDC shall not release any funds for costs incurred by Recipient under this Contract until
EDC has received certification from Recipient that its fiscal control and fund accounting
procedures are adequate to assure proper disbursal of and accounting for funds provided
under this Contract. EDC shall specify the content and form of such certification.
SECTION 19. ENVIRONMENTAL CLEARANCE REQUIREMENTS
A. Recipient understands and agrees that by execution of this Contract Recipient shall be
responsible for providing to EDC all information that it has available, concerning this EDC
funded project, required for EDC to meet its responsibilities for environmental review,
decision making, and other action which applies to EDC in accordance with and to the extent
specified in Federal, State and Local Law. Recipient further understands and agrees that
Recipient shall make all reasonable efforts to assist EDC in handling inquiries and
complaints from persons and agencies seeking redress in relation to environmental reviews
covered by approved certifications.
SECTION 20. ORAL AND WRITTEN CONTRACTS/PRIOR AGREEMENTS
A. All oral and written contracts between the parties to this Contract relating to the subject
matter of this Contract that were made pdor to the execution of this Contract have been
reduced to writing and are contained in this Contract.
B. The attachments enumerated and denominated below are hereby made a part of this
Contract, and constitute promised performances by Recipient in accordance with Section
3 of this Contract:
1. Exhibit "A", Performance Statement
2. Exhibit "B", Budget
3. Exhibit "C", Project Implementation Schedule
4. Exhibit "D", Applicable Laws and Regulations
5. Exhibit "E", Certifications
6. Exhibit "F", Management Position/Payroll
7. Exhibit"G (1-7)";
· Exhibit Gla Promissory Note Conditional Grant wherein credits can be obtained
based on payroll expended
· Exhibit Glb Promissory Note which is payable over a pedod of five (5)
years at 5% interest from the date that each installment thereof is made
with the first payment due one (1) year from the effective date of this
Agreement.
· Exhibit G2 CommerciaI Security Agreement
· Exhibit G-3 Security Agreement Pledge
· Exhibit G-4 Deed of Trust for land described in Exhibits H-1 and H-2 by the
Recipient
· Exhibit G-Sa Guarantee Agreements by EcoWater
· Exhibit G-5b Guarantee Agreement bySEPA
· Exhibit G-6 UCC Forms for all equipment listed in Exhibit"H-4"
· Exhibit G-7 List of other documents to be reasonably requested by the EDC or
its counsel
8. Exhibit"H"
· Exhibit H-1 Description of land wherein Eco-Water is presently
located
· Exhibit H~la Owner financing Agreement on land as described in
Exhibit H-1
· Exhibit H-2 Description of adjacent land which Eco-Water has an option for
· Exhibit H-2a Option Agreement
· Exhibit H-3 Equipment that Eco-Water presently has
· Exhibit H-4 List of equipment that Recipient will purchase which includes
but is not limited to equipment in Exhibit H-3
9. Exhibit "1", Reporting Exhibits
10. Exhibit "J"
(i) Schematic of plant to be built on the land described in Exhibit H-1
(ii) Schematic of plant to be built on the land described in Exhibit H-2
11. Application for funding by the Recipient
]3
12. Exhibit "K', Specialty Contractors
SECTION 21. OPERA T/ON OF THE FACILITY
The Recipient shall operate the facility so that it will not materially interfere with the adjacent
businesses. Measures will be taken to control odors. Also, measures will be taken so that all truck
traffic will be directed to and from Highway 73 and truckers will be discouraged from traveling the
road from the facility toward Stadium Road.
SECTION 22. VENUE
For purposes of collection litigation pursuant to this Contract, venue shall lie in Jefferson County,
Texas.
SECTION 23. ARBITRATION
At the discretion of the EDC, the Recipient agrees that any disputes related to this Agreement shall
be resolved through binding arbitration. The arbitration proceeding shall take place in Jefferson
County, Texas unless both parties agree otherwise. Further, the arbitrator shall be selected by the
parties and in the event the parties do not agree as to the selection of an arbitrator, the dispute shall
be arbitrated by the American Arbitration Association and the Houston office of the American
Arbitration Association shall be authorized to select the arbitrator utilizing its normal selection
procedures.
SECTION 24. ADDRESS OF NOTICE AND COMMUNICATIONS
PORT ARTHUR ECONOFalC DEVELOPNIENT CORPORATION
444 4th Street
Port Arthur, Texas 77640
ATTN: Ignacious "lke' Mills, Executive Director
ECOSEPA ENVIRONMENTAL INDUSTRIES, LLC
6200 Procter Street Extension
Port Arthur, TX 77642
ATTN: Michael Laws, President
(409) 962-7480 (phone)
(409) 962-7469 (facsimile)
SECTION 25. CAPTIONS
Each paragraph of this Contract has been supplied with a caption to serve only as a guide to
contents. The caption does not control the meaning of any paragraph or in any way determine its
interpretation or application.
SECTION 26. COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS
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 related to the
14
activities and performances of Recipient under this Contract. Upon request by City, Recipient shall
fumish satisfactory proof of its compliance herewith.
SECTION 27. OTHER ECONOMIC INCENTIVES
Even though the Recipient may have asked for other incentives, the only incentives that are being
approved and authorized heroin is a $450,000 loan and a $450,000 conditional grant.
APPROVED AS TO FORM:
Mark Sokolow, City Attorney
SIGNED on the day of ,2004.
CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
By:
Igalious "lke" Mills, Executive Director
Witnessed
SIGNED on the _day of ,2004.
ECOSEPA ENVIRONMENTAL INDUSTRIES, LLC
By:
Its: Michael Laws, President
By:
Its: John Meyers, Chairman
Witnessed
]5
EXHIBIT A
Performance Statement
Recipient's performance:
Recipient shall complete construction of the Recycling Facility as defined and detailed in Section
3 and operate the recycling facility.
Over a 72 month period, the Recipient will worn with the City to establish a "Waste Safe" system to
facilitate grease arrestors to be serviced on a defined regular basis. The Recipient will provide to
the City of Port Arthur a grease trap program monitoring software package that would include
barcodes for each restaurant and the disposal site. As material is picked up, a scanner reads the
restaurant's code and automatically reports which restaurants are in compliance. It shall also track
the material to ensure it is not imprepefly dumped.
The Recipient will provide the recycling services at the rates as substantially delineated in their
application.
Funding Parameters:
Upon execution of this Contract and the Promissory Notes and related Other Loan and Collateral
Documentation, Recipient shall receive loans, the funding of which shall be limited to Budget items
as detailed herein, and the repayment of the Note evidenced by Exhibit "El(a)" may be forgiven, in
whole or in part, pursuant to the terms of this Agreement. The funds shall be utilized by Recipient
and/or advanced on behalf of Recipient solely for costs related to "Authorized Expenditures" as
defined within the Agreement. As detailed therein, Authorized Expenditures shall be limited to
expenses detailed in Recipient Budget attached hereto as Exhibit B including costs incurred by or
on behalf of the Recipient related to (i) construction of the Facility, (ii) acquisition and/or construction
of fixtures within the Facility, and/or (iii) acquisition and/or installation of equipment, furniture and
fixtures to be utilized in operation of the business operations which comprise the Facilities. Funds
hereunder shall be advanced to Recipient by EDC, subject to the maximum sum of $900,000.00,
solely to reimburse Recipient for the Authorized Expenditures detailed hereinabove, with verification
related to said Authorized Expenditures being provided to the EDC, prior to funding, in the form of
invoices, purchase orders or other appropriate documentation which would be reasonably necessary
to allow the EDC to vedflj that the requested advance and/or reimbursement are for costs/expenses
which constitute Authorized Expenditures. Recipient agrees to complete construction of the Facility
and complete acquisition of all furniture, fixtures, equipment, software and other components utilized
in operation of the Facility within twelve (12) months of the effective date of this Agreement.
Administrative Costs:
Recipient shall utilize its own funds to carry out all project administration activities, including the
costs associated with the required annual program in compliance in fiscal audits as detailed in the
Agreement. It is further understood that any costs incurred by Recipient for these activities shall be
paid with private and/or other funds.
EXHIBIT B
BUDGET
PHASEI
The Economic Development Corporation will loan the Recipient up to $150,000 toward the
pumhase all of the land described in Exhibits "H-'/" and "H-2" with the Economic Development
Corporation receiving a first lien as evidenced by a Deed of Trust. The Economic Development
Corporation will receive a copy of a title report and title insurance issued by Port Arthur Abstract
showing clear and marketable title as well as a copy of all inspection reports on the property.
PHASE II
The Economic Development Corporation will loan the Recipient up to $125,000 toward facility
development costs and the relocation of the equipment listed in Exhibit "H-I" to the land
described in Exhibit "H-2" so that its current operations can be continued as described in its
application.
PHASE III
The Recipient wifl provide the equipment and plants as described in Exhibit "-'7"to the land
described in Exhibit "H-l" and "H-2: and the recipient shall provide all design'engineedng
services. The Economic Development Corporation will loan the Recipient up to Sf 75,000 and
will issue grant funds of $380,000 toward the construction of the facility described in Exhibit ",7".
The Recipient shall bid its contracts and shall select the lowest responsible bidder who
shall also be required to provide performance and payment bonds. Said performance bonds
shall ensure the performance of the contract based on the amount of amount bid, the amount of
working days committed, and the specifications listed. Said payment bond shall ensure the
payment of laborers. The Recipient must prepare a project manual with detailed specifications
and submit the specifications to the City's Director of Public Works, Director of Utility Operations,
and to other City staff form comment and will obtain the necessary building permits in
accordance with City codes. The final payment of $70,000 will only be issued once the civil
construct by third parties is substantially completed.
* The total amount of funds that are being committed by the City of Port Arthur Section 4A
Economic Development Corporation shall not exceed sgo0, o00. All other funds to
complete the construction contract shall be made by the Recipient.
** The City of Port Arthur Section 4A Economic Development Corporation will not
commence funding of Phase III construction project unless and until the design
specifications are approved by the City, and applicable permits have been obtained.
]7
EXHIBIT C
Project Implementation Schedule
CONTRACT START DATE: January f, 2005 CONTRACT ENDING DATE: December 3t, 2011
IMPLEMENTATION SCHEDULE
MONTHS
Activities ~ 72
Construction/Start up___ -~-
General Administratio~n
New Full-Time Equivalent 22
Jobs (aggregate)
· Recipient shall complete acquisition and refurbishing/repair/upgrade construction of the recycling
Facilities, including construction, acquisition and installation of all furniture, fixtures, equipment,
software and other components utilized in operation of the recycling Facilities and commence
actual operation of the recycling facility, including all businesses located therein, on or before
December 31, 2005.
· Recipient shall operate continuously the Facility until at least December 3~, 20~ ~. This does not
include brief periods for turn arounds, maintenance, or restoration.
· Recipient shall retain and hire 4 managers, ~ accountant, f engineer, I chemist, 3 clerical
workers, 2 supervisors, 8 operators, and 2 maintenance workers or a reasonable combination
thereof over a period of 72 months as reasonably delineated in the timetable above.
1.7
EXHIBIT D
The Applicable Laws and Regulations
Recipient shall comply with all federal, state, and local laws and regulations applicable to the
activities and per-[ormances rendered by Recipient under this Contract including, but not limited to,
the civil rights laws and regulations as well as Articles 5190.6 V.T.C.A.
z.economic incentive agreement_ecosepa 19
EXHIBIT E
Certification Regarding Lobbying for
Contracts, Grants, Loans, and Cooperative Agreements
The undersigned certifies, to the best of his knowledge and belief, that:
1. No federal appropriated 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 congress, an officer or employee of
congress, or an employee of a member of congress in connection with the awarding
of any federal contract, the making of any federal grant, the making of any federal
loan, the entedng into of any cooperative agreement, or modification of any federal
contract, grant, loan, or cooperative agreement.
2. If any funds other than federal appropriated funds have been paid or will be paid to
any person for influencing or attempting to influence an officer or employee of any
agency, a member of congress, an officer or employee of congress, or an employee
of a member of congress in connection with this federal contract, grant, loan, or
cooperative agreement, the undersigned shall complete and submit standard form
-LLL, "Disclosure Form to Report Lobbying", in accordance with its instructions.
3. The undersigned shall require that the language of this certification be included in
the award documents for all sub-awards at all tiers (including subcontracts, sub-
grants, and contracts under grants, loans, and cooperative agreements) and
that all Sub-recipients shall certify and disclose accordingly.
This certification is material representation of fact which reliance was placed when this transaction
was made or entered into. Submission of this certification is a prerequisite for making or entering
into this transaction imposed by section 1352, Title 31, U.S. Code. Any person who fails to file the
required certification shall be subject to a civil penalty of not less than $100,000 for each such
failure.
Signed: , Recipient
By:
Its:
Date:
z.economic incentive agreement_ecosepa 20
EXHIBIT F
MANAGEMENT PERSONNEL
No Position Person Hourly Annual PA Commence
Rate Salary Resi ment Date
dent
1 President Mike Laws 30.00 60,000.00 YES 0t 01 05
2 Accountant TBA 20.00 40,006.00 TBA 01 09 05
3 Sales Manager TBA 20.00 40,000.00 TBA 01 01 05
4 Biodiesel Manager TBA 20.00 40,000.00 TBA 01 02 05
5 Chemist TBA 16.00 32,000.00 TBA 01 06 05
6 Operations Manager TBA 20.00 40,000.00 TBA 01 01 05
7 Book-keeper TBA 12.00 24,000.00 TBA 01 01 05
8 Receptionist TBA 8.00 16,000.00 TBA 01 01 05
EXHIBIT' ~G- la"
COMMERCIAL PROMISSORY NOTE - CONDITIONAL GRANT
Port Arthur, Texas ,200__ $ 450,000
FOR VALUE RECEiVED, the undersigned (hereinafter called "Maker", whether one or more, and
if more than one, then jointly and severally) promise(s) to pay to the order of PORT ARTHUR
ECONOMIC DEVELOPMENT CORPORATION, a 4A development corporation (herein called
"Lender"), at its office at P.O. Box 1089, Port Arthur, Texas 77640, or such other place or places as
the holder hereof shall from time to time designate in written notice to Maker, the sum of FOUR
HUNDRED FIFTY THOUSAND AND NO/100 ($450,000) DOLLARS, 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 6.00% per annum as detailed herein. Notwithstandip. g anythi~ng to the
contrary contained herein, absent a prior default by Maker and a resulting acceleration ot maturity
date, this note shall not begin to accrue interest until the expiration of ( )
months after the date of advance of the funds provided hereunder.
All past due principal and interest shall bear interest from date of maturity until paid at the
lesser of (a) eighteen percent (18%) per annum, or (b) at the maximum rate of non-usurious interest
allowed from time to time by law as now, or to the extent allowed by law, as may hereafter be in
effect, payable on demand after maturity.
Interest shall be computed on a per annum basis of a year of three hundred sixty (360) days
and for the actual number of days (including the first but excluding the last day) elapsed, unless.
such calculation would result in a usurious rate of imerest, in which case interest shall be calculated
on a per annum basis of three hundred sixty-five (365) or three hundred sixty-six (366) days, as the
case may be.
This note is due and payable as follows. On demand; if no demand, then:
In consecutive equal monthly installments of
$ , including interest, or more, each. The first
installment is payable on or before ,
, and a like installment is payable on or before the same day of
~ succeeding month, with a th and final installment
consisting of the entire unpaid b ~al~-~-of principal and accrued
interest being due and payable on or before
, . Each installment will be applied
first to the payment of ac~ interest payable on the unpaid
principal, and the remainder will be applied to reduction of principal.
THIS LOAN IS DUE AND PAYABLE 1N FULL ON OR BEFORE
, __. AT MATURITY MAKER MUST
REPAY THE ENTIRE PRINCIPAL BALANCE OF THE LOAN AND
UNPAID INTEREST THEN DUE. LENDER IS UNDER NO
OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. MAKER
WILL THEREFORE BE REQUIRED TO MAKE PAYMENT OUT O F
OTHER ASSETS IT MAY OWN, OR IT WILL HAVE TO FIND A
LENDER WlLL1NG TO LEND IT THE MONEY AT PREVAILING
MARKET RATES, WHICH MAY BE CONSIDERABLY HIGHER
THAN THE INTEREST ON THIS LOAN. IF MAKER REFINANCES
THIS LOAN AT MATURITY, IT MAY HAVE TO PAY SOME OR ALL
OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW
LOAN EVEN IF IT OBTAINS REFINANCING FROM THE SAME
LENDER.
Any notices required or permitted to be given by the holder hereof to Maker pursuant to the
provisions of this note shall be in writing and shall be either personally delivered or transmitted by
first class United States mall, addressed to Maker at the address designated below for receipt of
notice (or at such other address as Maker may, fi:om time to time, designate in writing to the holder
hereof for receipt of notices hereunder). Any such notice personally delivered shall be effective as
of the date of delivery, and any notice transmitted by mail, in accordance with the foregoing
provisions, shall be deemed to have been given to and received by Maker as of the date on which
such notice was deposited with the United States Postal Service, properly addressed and with
postage prepaid.
Prior to maturity of this note, whether by acceleration or otherwise, Maker agrees to pay
Lender a late payment service charge (a "Late Charge") to cover the extra expense of handling
delinquent payments in an amount equal to five percent (5%) of any installment not received by
Lender within fifteen (15) days after such installment is due. The Late Charge will be collected
only once on any late payment. The Late Charge will be paid promptly upon Lender's notice
thereof to Maker.
THE FUNDS ADVANCED HEREUNDER AND PAYMENT OF THIS NOTE ARE
BEING MADE PURSUANT TO THAT CERTAIN ECONOMIC INCENTIVE CONTRACT
AND LOAN AGREEMENT ("INCENTIVE AGREEMENT") OF EVEN DATE ENTERED
INTO BY AND BETWEEN MAKER AND LENDER. PREPAYMENT OF THIS DEBT
SHALL BE GOVERNED NOT ONLY BY THE TERMS O F THIS NOTE AND T HE
COLLATERAL DOCUMENTATION EXECUTED IN CONJUNCTION WITH SAME,
AND BUT SHALL ALSO BE GOVERNED BY THE TERMS OF THE SUBJECT
INCENTIVE AGREEMENT WHICH MAY PROVIDE, AMONG OTHER THINGS, FOR
NON-PAYMENT RELATED CREDITS IN PARTIAL SATISFACTION OF THIS NOTE
IN CONJUNCTION WITH PERFORMANCE CRITERIA DETAILED WITHIN THE
INCENTIVE CONTRACT.
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
instmments, 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 included 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 if
Maker defaults incident to any of Maker's obligations under the terms and conditions of that certain
Economic Incentive Contract and Loan Agreement between Maker and Lender of even date and as
a result of same, Lender declares Maker to be in default of said Economic Inventive Contract and
Loan Agreement; or if Maker or any drawer, accepter, endorser, guarantor, surety, accommodation
party or other person now or hereafter primarily or secondarily liable upon or for payment of all or
any part of this note (each hereinafter called an "other liable party") shall die, or become insolvent
(however such insolvency may be evidenced); or if any proceeding, procedure or remedy
supplementary to or in enforcement of judgment shall be resorted to or commenced against Maker
or any other liable party, or with respect to any property of any of them; or if any govemmental
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 party is primarily or secondarily liable shall not be paid when due
or shall become due and payable by acceleration of maturity thereof, or if any event or condition
shall occur which shall permit the holder of any such indebtedness to declare it due and payable
upon the lapse of time, giving of notice or otherwise; or if Maker or any other liable party (if other
z.ecosepa.promisnote 2
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 ail or an integral portion of its assets without the written consent of
Lender; or if Maker or any other liable party fails to furnish financial information requested by
Lender; or if Maker or any other liable party furnishes or has furnished any financiai or other
information or statements which are misleading in any respect; or if a default occurs under any
instrument now or hereafter executed in connection with or as security for this note; or any event
occurs or condition exists which causes Lender to in good faith deem itself insecure or to in good
faith believe the prospect of payment or perform.an, ce by Mais. er or..any other liab.!e pfirt~.~ .und~ this
note, under any instrument or agreement executed ~n conneetson w~ or as secumy xor mas note, or
under any other indebtedness of Maker or any other liable party to Lender is impaired; thereupon, at
the option of Lender, the principai balance and acemed 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 filed hereon, or proceedings are had in probate,
bankruptcy, receivership, reorganization, arrangement or other legai 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 ~n.trary her~ein or~ i~ any a~,e .e?ent enter~ intoo ~1
connection with or as security for this note, ~t ~s agreed as mnow. s: [0 me ~aggregate o.t_at
consideration which constitutes interest under applicable law that is taxen, reserved, contracted tor,
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 maxanum amount of interest
allowed by applicable law, and any excess shall be credited on this note by the holder hereof (or, if
this note shail 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 fi.om 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 shail be canceled automatically as
of the date of such acceleration or prepayment and, if theretofore prepaid, shall be credited on this
note (or if this note shall have been paid in full, refunded to Maker); and (iii) all calculations of the
rate of interest taken, reserved, contracted for, charged or received under this note or under any of
the other aforesaid agreements or otherwise in connection with this note, that are made for the
purpose of determining whether such rate exceeds the maximum lawful m~te shai!.be m~e., t.o the.
extent permitted by applicable law, by amorfiz(n.g, pror ~a. tin.g, .al. loca, t,mg and s, preafimg su, cn~ mteres, t
over the entire term of the loan evidenced by tlus note(including an renewal and extenaen terms).
This note shall be construed under and governed by the laws of the State of Texas (including
applicable federal law), but in any event Tex. Rev. Civ. Stat. Ann. art. 5069 ch. 15 (which regulates
certain revolving loan accounts and revolving triparty accounts) shall not apply to the loan
evidenced by this note. Unless changed in accordance with law, the applicable rate ceiling under
Texas law shall be the indicated (weekly) rate ceiling in effect as provided in Tex. Rev. Civ. Stat.
Ann. att. 5069-1.04, as amended; except, however, if any other lawful rate exceeds the indicated
(weekly) ceiling rate referenced above, then such higher ceiling rote shall apply.
Maker may prepay ail or any part of the principal of this note before maturity without
penaity. No partial prepayment shail 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.
z.ecosepa.promisnote 3
The Maker and each other liable party are and shall be directly and primarily, jointly and
severally, liable for the payment of all sums called for hereunder; and, except for notices specifically
required to be given by the holder hereof to Maker pursuant to the earlier provisions of this note,
Maker and each other liable party hereby express, ly w~v.e der~. and, presen, tm .ent for. pa..yment,..notiCo~
of nonpayment, protest, notice of protest, notme oI mtent~on to accelerate matumy, nouce
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 herefor 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 other liable party does further agree that it
will not be necessary for the holder hereof, in order to enforce payment of this note by such
other liable party, to first institute suit or exhaust its remedies against Maker or any other liable
party or to enforce its fights against any security therefor.
ECOSEPA ENVIRONMENTAL INDUSTRIES, LLC
By:
Name: Michael Laws
Title: President
"Maker"
By:
Name: John Meyers
Title: Chairman
"Maker"
MAKER'S ADDRESS FOR RECEIPT OF NOTICE:
ECOSEPA Environmental Industries, LLC
6200 Procter Street Extension
Port Arthur, Texas 77642
z.ecosepa.promisnote 4
EXHIBIT "G-B"
COMMERCIAL PROMISSORY NOTE
Port Arthur, Texas ~ 200_ $ 450,000
FOR VALUE RECEIVED, the undersigned (hereinafter called "Maker", whether one or more, and
if more than one, then jointly and severally) promise(s) to pay to the order of PORT ARTHUR
ECONOMIC DEVELOPMENT CORPORATION, a 4A development corporation (herein called
"Lender"), at its office at P.O. Box 1089, Port Arthur, Texas 77640, or such other place or places as
the holder hereof shall from time to time designate in written notice to Maker, the sum of FOUR
HUNDRED FIFTY THOUSAND AND NO/100 ($450,000) DOLLARS, 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 6.00% per annum as detailed herein. Notwithstanding anything to the
contrary contained herein, absent a prior default by Maker and a resulting acceleration of maturity
date, this note shall not begin to accrue interest until the expiration of ( )
months after the date of advance of the funds provided hereunder.
All past due principal and interest shall bear interest from date of maturity until paid at the
lesser of(a) eighteen percent (18%) per annum, or (b) at the maximum rate of non-usurious interest
allowed from time to time by law as now, or to the extent allowed by law, as may hereafter be in
effect, payable on demand after maturity.
Interest shall be computed on a per annum basis of a year of three hundred sixty (360) days
and for the actual number of days (including the first but excluding the last day) elapsed, unless
such calculation would result in a usurious rate of interest, in which case interest shall be calculated
on a per annum basis of three hundred sixty-five (365) or three hundred sixty-six (366) days, as the
case may be.
This note is due and payable as follows. On demand; if no demand, then:
In consecutive equal monthly installments of
$ , including interest, or more, each. The first
installment is payable on or before ,
, and a like installment is payable on or before the same day of
each succeeding month, with a th and final installment
consisting of the entire unpaid b~lance of principal and accrued
interest being due and payable on or before
· Each installment will be applied
first to the payment of accrued interest payable on the unpaid
principal, and the remainder will be applied to reduction of principal.
THIS LOAN IS DUE AND PAYABLE 1N FULL ON OR BEFORE
· AT MATURITY MAKER MUST
REPAY THE ENTIRE PRINCIPAL BALANCE OF THE LOAN AND
UNPAID INTEREST THEN DUE. LENDER IS UNDER NO
OBLIGATION TO REFINANCE THE LOAN AT THAT TIME. MAKER
WILL THEREFORE BE REQUIRED TO MAKE PAYMENT OUT OF
OTHER ASSETS IT MAY OWN, OR IT WILL HAVE TO FiND A
LENDER WILLING TO LEND IT THE MONEY AT PREVAILING
MARKET RATES, WHICH MAY BE CONSIDERABLY HIGHER
THAN THE INTEREST ON THIS LOAN. IF MAKER REFINANCES
THIS LOAN AT MATURITY, IT MAY HAVE TO PAY SOME OR ALL
OF THE CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW
LOAN EVEN IF IT OBTAINS REFINANCiNG FROM THE SAME
LENDER.
Any notices required or permitted to be given by the holder hereof to Maker pursuant to the
provisions of this note shall be in writing and shall be either personally delivered or transmitted by
first class United States mail, addressed to Maker at the address designated below for receipt of
notice (or at such other address as Maker may, from time to time, designate in writing to the holder
hereof for receipt of notices hereunder). Any such notice personally delivered shall be effective as
of the date of delivery, and any notice transmitted by mail, in accordance with the foregoing
provisions, shall be deemed to have been given to and received by Maker as of the date on which
such notice was deposited with the United States Postal Service, properly addressed and with
postage prepaid.
Prior to maturity of this note, whether by acceleration or otherwise, Maker agrees to pay
Lender a late payment service charge (a "Late Charge") to cover the extra expense of handling
delinquent payments in an amount equal to five percent (5%) of any installment not received by
Lender within fifteen (15) days after such installment is due. The Late Charge will be collected
only once on any late payment. The Late Charge will be paid promptly upon Lender's notice
thereof to Maker.
THE FUNDS ADVANCED HEREUNDER AND PAYMENT OF THIS NOTE ARE
BEING MADE PURSUANT TO THAT CERTAIN ECONOMIC INCENTIVE CONTRACT
AND LOAN AGREEMENT ("INCENTIVE AGREEMENT") OF EVEN DATE ENTERED
INTO BY AND BETWEEN MAKER AND LENDER. PREPAYMENT OF THIS DEBT
SHALL BE GOVERNED NOT ONLY BY THE TERMS OF THIS NOTE AND THE
COLLATERAL DOCUMENTATION EXECUTED IN CONJUNCTION WITH SAME,
AND BUT SHALL ALSO BE GOVERNED BY THE TERMS OF THE SUBJECT
INCENTIVE AGREEMENT WHICH MAY PROVIDE, AMONG OTHER THINGS, FOR
NON-PAYMENT RELATED CREDITS IN PARTIAL SATISFACTION OF THIS NOTE
IN CONJUNCTION WITH PERFORMANCE CRITERIA DETAILED WITHIN THE
INCENTIVE CONTRACT.
This note is also secured by and entitled to the benefits of all other security agreements,
pledges, collateral assignments, deeds of t_rust, guaranties, mortgages, assignments and lien
instruments, if any, of any kind executed by Maker or by any other party as security for any loans
owing by Maker to the Lender. Such lien instruments shall included those executed simultaneously
herewith, those heretofore executed, and those hereafter executed.
If any installment or payment of,p?ncipal or interest of this note is not paid when due; or if
Maker defaults incident to any of Maker s obligations under the terms and conditions of that certain
Economic Incentive Contract and Loan Agreement between Maker and Lender of even date and as
a result of same, Lender declares Maker to be in default of said Economic Inventive Contract and
Loan Agreement; or if Maker or any drawer, accepter, endorser, guarantor, surety, accommodation
party or other person now or hereafter primarily or secondarily liable upon or for payment of all or
any part of this note (each hereinafter called an "other liable party") shall die, or become insolvent
(however such insolvency may be evidenced); or if any proceeding, procedure or remedy
supplementary to or in enforcement of judgment shall be resorted to or commenced against Maker
or any other liable party, or with respect to any property of any of them; or if any governmental
authority or any court at the instance thereof shall take possession of any substantial part of the
property of or assume control over the affairs or operations of, or a receiver shall be appointed for or
take possession of the property of, or a writ or order of attachment or garnishment shall be issued or
made against any of the property of Maker or any other liable party; or if any indebtedness for
which Maker or any other liable party is primarily or secondarily liable shall not be paid when due
or shall become due and payable by acceleration of maturity thereof, or if any event or condition
shall occur which shall permit the holder of any such indebtedness to declare it due and payable
upon the lapse of time, giving of notice or otherwise; or if Maker or any other liable party (if other
z.ecosepa.promisnote 2
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 fails to furnish financial information requested by
Lender; or if Maker or any other liable party furnishes or has fumished any financial or other
information or statements which are misleading in any respect; or if a default occurs under any
instrument now or hereafter executed in connection with or as security for this note; or any event
occurs or condition exists which causes Lender to in good faith deem itself insecure or to in good
faith believe the prospect of payment or performance by Maker or .any other lial~le p~art~..under this
note, under any instrument or agreement executed in connection with or as security lor th~s 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 ex. pressly waived
by Maker and each other liable party. Lender may waive any default without waiving any prior or
subsequent default.
If this note is not paid at maturity whether by acceleration or otherwise and is placed in the
hands of any attorney for collection, or suit is filed hereon, or proceedings are had in probate,
bankruptcy, receivership, reorganization, arrangement or other leg.al proceedings fo, r ,c. ollection.
hereof, Maker and each other liable party agree to pay Lender its collection costs, incmmng 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 agree.ment entered ino}O
connection with or as security for this note, it is agreed as follows: (i) the aggregate o a
consideration which constitutes interest under applicable law that is taken, reserved, contracted for,
charged or received under this note or under any of the other aforesaid agreements or otherwise in
connection with this note shall under no circumstances exceed the maximum amount of interest
allowed by applicable law, and any excess shall be credited on this note by the holder hereof(or, if
this note shall have been paid in full, refunded to Maker); (ii) in the event that maturity of this note
is accelerated by reason of an election by the holder hereof resulting from any default hereunder or
otherwise, or in the event of any required or permitted prepayment, then such consid.e, rat, io, n .that
constitutes interest may never include more than the maximum amount allowed by apphcame law,
and excess interest, if any, provided for in this note or otherwise shall be canceled automatically as
of the date of such acceleration or prepayment and, if theretofore prepaid, shall be credited on this
note (or if this note shall have been paid in full, refunded to Maker); and (iii) all calculations of the
rate of interest taken, reserved, contracted for, charged or received under this note or under any of
the other aforesaid agreements or otherwise in connection with this note, that are made for the
purpose of determining whether such rate exceeds the maximum lawful rate shall be made, to the
extent permitted by applicable law, by amortizing, prorating, allocating and spreading such interest
over the entire term of the loan evidenced by this note(including all renewal and extended terms).
This note shall be construed under and governed by the laws of the State of Texas (including
applicable federal law), but in any event Tex. Rev. Civ. Stat. Ann. art. 5069 ch. 15 (which regulates
certain revolving loan accounts and revolving triparty accounts) shall not apply to the loan
evidenced by this note. Unless changed in accordance with law, the applicable rate ceiling under
Texas law shall be the indicated (weekly) rate ceiling in effect as provided in Tex. Rev. Civ. Stat.
Ann. art. 5069-1.04, as amended; except, however, if any other lawful rate exceeds the indicated
(weekly) ceiling rate referenced above, then such higher ceiling rate shall apply.
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.
z.ecosepa.promisnote 3
Texas law shall be the indicated (weekly) rate ceiling in effect as provided in Tex. Rev. Civ. Stat.
Ann. art. 5069-1.04, as amended; except, however, if any other lawful rate exceeds the indicated
(weekly) ceiling rate referenced above, then such higher ceiling rate shall apply.
Maker may prepay all or any pa~t of the principal of this note before maturity without
penalty. No partial prepayment shall reduce, postpone or delay the oblig~a~.on of Maker to ,continue,
paying the installments herein provided on their respective due dates tollowing any sucn partial
prepayment until this note is fully paid.
The Maker and each other liable party are and shall be directly and primarily, jointly, and
severally, liable for the payment of all sums called for hereunder; .and, ex,.cept for .no. tices s~p.e,c, inc~ly
required to be given by the holder hereof to Maker pursuant to the earner provxslons o~ mas note,
Maker and each other liable party hereby expressly waive demand, presentment for payment, notice
of nonpayment, protest, notice of protest, notice of intention to accelerate maturity, notice of
acceleration of maturity, and all other notice, filing of suit and diligence in collecting this note or
enforcing or handling any of the security therefor, and do hereby agree to any substitution, exchange
or release, in whole or in part, of any security herefor 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 pan
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 other liable patty does further agree that it
will not be necessary for the holder hereof, in order to enforce payment of this note by such
other liable party, to first institute suit or exhaust its remedies against Maker or any other liable
party or to enforce its rights against any security therefor.
By:
Name: Michael Laws
Title: President
"Maker"
By:
Name: John Meyers
Title: Chairman
"Maker"
MAKER'S ADDRESS FOR RECEiPT OF NOTICE:
ECOSEPA Environmental Industries, LLC
6200 Procter Street Extension
Port Arthur, Texas 77642
EXHIBIT ~(~-4"
DEED OF TRUST
Date: ,200
Grantor: ECOSEPA Enviroranental Industries, LLC
Grantor' s Mailing Address: 200 Procter Street Extension
(including county) Port Arthur, Texas 77642
Jefferson County
Trustee: MARK T. SOKOLOW
Trustee's Mailing Address: P.O. Box 1089
(including county): Port Arthur, Texas 77641-1089
(Jefferson County)
Beneficiary: PORT ARTHUR 4A ECONOMIC
DEVELOPMENT CORPORATION
Beneficiary's Mailing Address
(including county): 4173 39~ Street,
Port Arthur, Texas 77642
(Jefferson County)
Note
Date: ,200__
Amount: $450,000
Four Hundred Thousand Fifty Dollars and no/00 Dollars
Maker: ECOSEPA Enviroranental Industries, LLC
Payee: Port Arthur 4A Economic Development Corporation
Final Maturity Date: As therein provided.
Conditional Grant
Date: ,2~
Amount: $450,000
Four Hundred Thousand Fifty Dollars and no/00 Dollars
Maker: ECOSEPA Enviroranental Industries, LLC
Payee: Port Arthur 4A Economic Development Corporation
Final Maturity Date: As therein provided.
Property (including any improvements):
Approximately 7 acres on Procter Street Extension with a legal description to be provided by
ECOSEPA
z.ecosepa.deedoftrust
DEED OF TRUST
Prior Lien(s) (including recording information):
Other Exceptions to Conveyance and Warranty:
This conveyance is made expressly SUBJECT TO any and all restrictions, covenants, conditions, easements,
rights-of-way, and mineral and/or royalty reservations of record, if any, affecting this Properly.
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
note according to its 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, furnish 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 imurable value as detemainod when the policy is
issued and renewed, unless Beneficiaxy 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 hazard 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;
6. deliver the insuiance policy to Beneficiary and deliver renewals to Beneficiary at least ten days
before expiration;
7. keep any buildings occupied as required by the insurance policy; and
8. if this is not a first lien, pay all prior lien notes that Grantor is personally liable to pay and abide by
all prior lien instruments.
Beneficiary's Rights
1. Beneficiary may appoint in writing a substitute or successor austec, succeeding to all rights and
responsibilities of Trustee;
2. If the proceeds of the note am used to pay any debt secured by prior liens, Beneficiary is subrogated
to all of the rights and liens of the holders of any debt so paid.
3. Beneficiary may apply any proceeds received under the insurance policy either to reduce the note or
to repair or replace damaged or destroyed improvements covered by the policy.
4. If Grantor fails to perform any of Grantor's obligations, Beneficiary may perform those obligations
and be reimbursed by Grantor on demand at the place where the note is payable for any sums so paid, including
attorney's fees, pins interest on those sums from the dates of payment at the rate stated in the note for matured, unpaid
amounts. The sum to be reimbursed shall be secured by this deed of trust.
z.ecosepa.deedoftrust
DEED OF TRUST
5. If Grantor defaults on the note or fails to perform any of Gramor's obligations or if default occurs
on a prior lien note or other instrument, and the default continues after Beneficiary gives Grantor notice of the default
and the time within which it must be cured, as may be required by law or by written agreement, then Beneficiary
may:
a. declare the unpaid principal balance and earned interest on the note immediately duc;
b. requcst Trustee to foreclose this lien, in which case Beneficiar7 or Beneficiary's agent shall
give notice of the foreclosure sale as provided by the Texas Property Code as then
amended; and
c. purchase the property at any foreclosure sale by offering the highest bid and then have the
bid credited on the note.
Trnstee's Duties
If requcsted by Beneficiary to foreclose this lien, Trustee shall:
1. either personally or by agent give notice of the foreclosure sale as required by the Texas Property
Code as then amended;
2. sell and convey all or pan of the property to the highest bidder for cash with a general warranty
binding Grantor, subject to prior liens and to other exceptions to conveyance and warranty; and
3. from the proceeds of the sale, pay, in this order:
a. expenses of foreclosure, including a commission to Trustee of 5 % of the bid;
b. to Beneficiary, the full amount of principal, interest, attorney's fees, and other charges duc
and unpaid;
c. any amounts 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 sold under this deed of trust, Grantor shall imm~tely surrender
possession to the purchaser. If Grantor fails to do so, Grantor shall become a tenant at sufferance of the purchaser,
subject to an action for forcible detainer.
2. Recitals in any Trustee's deed conveying the property will be presumed to be tree.
3. Proceeding under this deed of trust, filing suit for foreclosure, or pursuing any other remedy will
not constitute an election of remedies.
4. This lien shall remain superior to liens later created even if the time of payment of all or part of the
note is extended or part of the property is released.
5. If any portion of the note cannot be lawfully secured by this deed of trust, payments shall be applied
first to discharge that portion.
6. Grantor assigns to Beneficiary all sums payable to or received by Grantor from condemnation of all
or part of the property, from private sale in lieu of condemnation, and from damages caused by public works or
construction on or near 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 am 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 or 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 the property. Beneficiary
shall apply all rent and other income and receipts collected under this paragraph first to expenses incurred in
exercising Beneficiary's rights and remedies and then to Grantor's obligations under the note and this deed of trust in
the order detemfined by Beneficiary. Beneficiary is not required to act under this paragraph, and acting under this
DEED OF TRUST
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, charged, or received under law; any interest in
excess of that maximum mount 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, singular nouns and pronouns include the plural.
10. ]'he term note includes all sums secured by this deed of trust.
11. llfis deed of trust shall bind, inure to the benefit of, and be exercised by successors in interest of all
parties.
12. If Grantor and Maker are not the same person, the term Grantor shall include Maker.
13. If all or any part of the Property is sold, conveyed, leased for a period longer than three (3) years,
leased with an option to purchase, or otherwise sold (including any contract for deed), without the prior written
consent of the Beneficiary, then the Beneficiary may at his option declare the outstanding principal balance of the
Note, 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 consm~ as a sale or conveyance of the
14. THIS DEED OF TRUST IS GRANTED IN CONJUNCTION WITH THAT CERTAIN
ECONOMIC INCENTIVE CONTRACT AND LOAN AGREEMENT OF EVEN DATE.
ECOSEPA Environmental Industries, LLC
Its:
STATE OF TEXAS fi
COUNTY OF JEFFERSON fi
This instrument was acknowledged before me on this the __ day of ,2~, by
President of ECOSEPA Environmental Industries, LLC
Notary Public, State of Texas
AFTER RECORDING, RETURN TO:
Port Arthur 4A Economic
Development Corporation
4173 39~ Street
Port Arthur, TX 77642
EXHIBIT ~G- 5"
AGREEMENT OF GUARANTY
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
WHEREAS, on this date, ECOSEPA ("Borrower"), a Texas corporation, made, executed
and delivered its Commercial Promissory Note (the "Notes"), together in the aggregate principal
sums of $450,000 and $450,000 respectively, bearing interest at the rate therein specified, and
payable as therein provided to the order of PORT ARTHUR ECONOMIC DEVELOPMENT
CORPORATION ("Lender~'), a 4A development corporation; and
WHEREAS, to secure the payment of said Note, Borrower did execute, acknowledge and
deliver its Deed of Trust of even date therewith, granting Lender a lien on the security interest in a
the following described property located in Jefferson County, Texas, to-wit:
TO BE PROVIDED BY SEPA
WHEREAS, in the commitment agreed to by Borrower for the loan evidenced by the Note,
the Economic Incentive Contract, and various other instruments and documents (the "Other Loan
and Collateral Documents") (the "Loan"), Borrower committed to Lender that ECOWATER will
execute and deliver to Lender a guaranty (the "Guaranty") of the payment of Borrower's Note and
the performance of all of Borrower`s obligations under the Other Loan Documents; and
WHEREAS, Lender has agreed to make said Loan to Borrower conditioned upon the
execution and delivery of said Guaranty; and
WHEREAS, ECOWATER ("Guarantor", whether one or more), has agreed to execute and
deliver to Lender the Guaranty; and
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS:
That Guarantor, in consideration of the premises and of the benefits accruing to Borrower
and Guarantor from the Loan, and as an inducement to Lender to make the Loan, Guarantor does
hereby guarantee, without offset or deduction, (i) the prompt payment when due of all amounts
payable by Borrower to Lender pursuant to the Note (whether of principal, interest or attorney's
fees), and the Other Loan and Collateral Documents, and (ii) to do or cause to be done or perform
or cause to be performed all obligations contained in the Note and Other Loan and Collateral
Documents, this Guaranty constituting a guaranty (a) of payment, and not of collection, and (b) that
Borrower will perform punctually and faithfully under and in accordance with the terms of the Note
and Other Loan and Collateral Documents.
Guarantor hereby agrees that Guarantor, as principal obligor, will pay or otherwise provide
for or bring about promptly when due such payments and the performance of such duties of
Borrower under the Note and Other Loan and Collateral Documents, notwithstanding any fact or
circumstance, including, but not limited to, the liquidation, dissolution, receivership, insolvency,
bankruptcy, the making of an assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of Borrower, or any proceeding affecting the status, existence or
z.agreement of guarantee_ecowater
assets of Borrower. Without limiting the foregoing, each Guarantor specifically agrees that it will
not be necessary or required, and Guarantor shall not be entitled to require, that Lender shall file
suit, proceed to or obtain a claim for personal judgment against Borrower or any other party
(including, without limitation, any other Guarantor), or make any effort of collection from Borrower
or any other pady (including, without limitation, any other Guarantor), or look to its security before
or as a condition to enforcing the liability of Guarantor under this Guaranty; and Guarantor,
knowingly and with the express intention of extinguishing his legal dghts (if any may exist), hereby
expressly waives any and a II dght, whether existing by rule, statute, general law, equity or
otherwise, to assert or require (i) that Lender previously seek or obtain judgment against Borrower
or any other person or entity (including, without limitation, any other Guarantor) prior to Lender's
suing Guarantor for the enforcement of this Guaranty, or for the collection of any sum or sums due
hereunder, or (ii) that Lender join Borrower or any other person or entity ( including, without
limitation, any other Guarantor) in any suit against Guarantor for the enforcement of this Guaranty,
or for the collection of any sum or sums hereunder.
Guarantor hereby waives notice of the acceptance of this Guaranty, or the performance or
nonperformance of any of the agreements between or among Borrower, Lender and/or any third
party or parties. The obligations of Guarantor shall be continuous from the date hereof until the
indebtedness and performance hereby guaranteed have been fully paid or performed, and
Guarantor's obligation hereunder shall continue in full force and effect notwithstanding (i) any
release of any person (including, without limitation, any other Guarantor) obligated for the payment
of the indebtedness or the performance of any obligation, (ii) any adjustments or rearrangements
(including, without limitation, renewals or extensions) in or of the indebtedness evidenced by the
Note or secured by the Other Loan and Collateral Documents, (iii) adjustments or rearrangements
of obligations to be performed by Borrower thereunder, or (iv) the release of any collateral, in whole
or in part.
Guarantor agrees that he shall have no rights of subrogation whatsoever with respect to the
Note or Other Loan and Collateral Documents unless and until Lender shall have received full
payment of the Note and all other sums due Lender under the terms of the Other Loan and
Collateral Documents.
Guarantor hereby waives demand, presentment for payment, protest, notice of protest,
notice of nonpayment, notice of intention to accelerate maturity, notice of acceleration of matudty
and all other notices, including, without limitation, notice of default or nonperformance. Should it be
necessary to institute legal proceedings or employ an attorney to enforce the provisions of this
Guaranty, Guarantor hereby agrees to pay all costs incurred, including, without limitation,
reasonable attomey's fees, which costs shall be in addition to all other sums which Guarantor
might otherwise be obligated to pay hereunder.
This Guaranty (i) constitutes the entire agreement between Guarantor and Lender, and
supersedes all prior agreements and understandings, both wdtten and oral, among the parties with
respect to the subject matter hereof, (ii) shall inure to the benefit of Lender, its successors and
assigns, and shall be binding upon the Guarantor and his respective heirs, executors and
administrators, and (iii) may be modified only by written instrument signed by Guarantor and
Lender, and dated subsequent to the date hereof.
Whenever the context so requires, all singular nouns and pronouns shall include the plural,
and all nouns and pronouns of the masculine gender shall include all other genders.
EXECUTED by Guarantor on this the day of ,2004.
ECOWATER
By:
"Guarantor"
z.agreement of guarantee_SBPA
3
AGREEMENT OF GUARANTY
THE STATE OF TEXAS §
COUNTY OF JEFFERSON §
WHEREAS, on this date, ECOSEPA ("Borrower"), a Texas corporation, made, executed
and delivered its Commercial Promissory Note (the "Notes"), together in the aggregate principal
sums of $450,000 and $450,000 respectively, bearing interest at the rate therein specified, and
payable as therein provided to the order of PORT ARTHUR ECONOMIC DEVELOPMENT
CORPORATION ("Lender"), a 4A development corporation; and
WHEREAS, to secure the payment of said Note, Borrower did execute, acknowledge and
deliver its Deed of Trust of even date therewith, granting Lender a lien on the security interest in a
the following described property located in Jefferson County, Texas, to-wit:
TO BE PROVIDED BY SEPA
WHEREAS, in the commitment agreed to by Borrower for the loan evidenced by the Note,
the Economic Incentive Contract, and various other instruments and documents (the "Other Loan
and Collateral Documents") (the "Loan"), Borrower committed to Lender that SEPA will execute
and deliver to Lender a guaranty (the "Guaranty") of the payment of Borrower's Note and the
performance of all of Borrower's obligations under the Other Loan Documents; and
WHEREAS, Lender has agreed to make said Loan to Borrower conditioned upon the
execution and delivery of said Guaranty; and
WHEREAS, SEPA ("Guarantor", whether one or more), has agreed to execute and deliver
to Lender the Guaranty; and
NOW, THEREFORE, KNOW ALL MEN BY THESE PRESENTS:
That Guarantor, in consideration of the premises and of the benefits accruing to Borrower
and Guarantor from the Loan, and as an inducement to Lender to make the Loan, Guarantor does
hereby guarantee, without offset or deduction, (i) the prompt payment when due of all amounts
payable by Borrower to Lender pursuant to the Note (whether of principal, interest or attomey's
fees), and the Other Loan and Collateral Documents, and (ii) to do or cause to be done or perform
or cause to be performed all obligations contained in the Note and Other Loan and Collateral
Documents, this Guaranty constituting a guaranty (a) of payment, and not of collection, and (b) that
Borrower will perform punctually and faithfully under and in accordance with the terms of the Note
and Other Loan and Collateral Documents,
Guarantor hereby agrees that Guarantor, as principal obligor, will pay or otherwise provide
for or bring about promptly when due such payments and the performance of such duties of
Borrower under the Note and Other Loan and Collateral Documents, notwithstanding any fact or
circumstance, including, but not limited to, the liquidation, dissolution, receivership, insolvency,
bankruptcy, the making of an assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of Borrower, or any proceeding affecting the status, existence or
z.a~reement of 9uarantee_sepa
assets of Borrower. Without limiting the foregoing, each Guarantor specifically agrees that it will
not be necessary or required, and Guarantor shall not be entitled to require, that Lender shall file.
suit, proceed to or obtain a claim for personal judgment against Borrower or any other party
(including, without limitation, any other Guarantor), or make any effort of collection from Borrower
or any other party (including, without limitation, any other Guarantor), or look to its security before
or as a condition to enforcing the liability of Guarantor under this Guaranty; and Guarantor,
knowingly and with the express intention of extinguishing his legal rights (if any may exist), hereby
expressly waives any and all right, whether existing by rule, statute, general law, equity or
otherwise, to assert or require (i) that Lender previously seek or obtain judgment against Borrower
or any other person or entity (including, without limitation, any other Guarantor) prior to Lender's
suing Guarantor for the enforcement of this Guaranty, or for the collection of any sum or sums due
hereunder, or (ii) that Lender join Borrower or any other person or entity (including, without
limitation, any other Guarantor) in any suit against Guarantor for the enforcement of this Guaranty,
or for the collection of any sum or sums hereunder.
Guarantor hereby waives notice of the acceptance of this Guaranty, or the performance or
nonperformance of any of the agreements between or among Borrower, Lender and/or any third
party or parties. The obligations of Guarantor shall be continuous from the date hereof until the
indebtedness and performance hereby guaranteed have been fully paid or performed, and
Guarantofs obligation hereunder shall continue in full force and effect notwithstanding (i) any
release of any person (including, without limitation, any other Guarantor) obligated for the payment
of the indebtedness or the performance of any obligation, (ii) any adjustments or rearrangements
(including, without limitation, renewals or extensions) in or of the indebtedness evidenced by the
Note or secured by the Other Loan and Collateral Documents, (iii) adjustments or rearrangements
of obligations to be performed by Borrower thereunder, or (iv) the release of any collateral, in whole
or in part.
Guarantor agrees that he shall have no rights of subrogation whatsoever with respect to the
Note or Other Loan and Collateral Documents unless and until Lender shall have received full
payment of the Note and all other sums due Lender under the terms of the Other Loan and
Collateral Documents.
Guarantor hereby waives demand, presentment for payment, protest, notice of protest,
notice of nonpayment, notice of intention to accelerate maturity, notice of acceleration of maturity
and all other notices, including, without limitation, notice of default or nonperformance. Should it be
necessary to institute legal proceedings or employ an attorney to enforce the provisions of this
Guaranty, Guarantor hereby agrees to pay all costs incurred, including, without limitation,
reasonable attorney's fees, which costs shall be in addition to all other sums which Guarantor
might otherwise be obligated to pay hereunder.
This Guaranty (i) constitutes the entire agreement between Guarantor and Lender, and
supersedes all prior agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof, (ii) shall inure to the benefit of Lender, its successors and
assigns, and shall be binding upon the Guarantor and his respective heirs, executors and
administrators, and (iii) may be modified only by written instrument signed by Guarantor and
Lender, and dated subsequent to the date hereof.
Whenever the context so requires, all singular nouns and pronouns shall include the plural,
and all nouns and pronouns of the masculine gender shall include all other genders.
EXECUTED by Guarantor on this the day of ,2004.
SEPA
By:
"Guarantor"
3
EXHIBIT H - 4
LIST OF EQUIPMENT RECIPIENT WILL PURCHASE
No Equipment Vendor
1 Biodiesel Pilot Plant SEPA
2 Biodiesel Main Plant - Separators SEPA
3 Biodiesel Main Plant- Control Systems SEPA
4 Biodiesel Main Plant- Instrumentation SEPA
$ Biodiesel Main Plant - Tankage ECO Water
6 Receivals Tanks ECO Water
7 Boiler ECO Water
8 Diesel tank ECO Water
9 Chemical storage tanks Port Arthur CC
10 Bioreactor- concrete tank TBA
11 Bioreactor- mechanical equipment SEPA
12 Centrifuge TBA
13 Belt filter TBA
14 Odour scrubber TBA
15 Miscel storage tanks #1 ECO
16 Miscel storage tanks #2 TBA
17 Control systems TBA
18 Buildings TBA
19 Lighting TA
20 Fencing & gates TBA
21 Security TBA
Port Arthur Economic Development Corporation
Grant Expense Report Work Sheet
Company
Period Ending
Date Check No. Payee Description Amount
Grantee Signature
Title
Date
(Attach copies of cancelled checks and ~nvoices in above order)
Port ~4rthur Economic Development Corporati°n
Grant Expense Report Work Sheet
Company
Period Ending
Date Check No. Payee Description Amount
Grantee Signature
Title
Date
(Attach copies of cancelled checks and invoices in above order)