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Now~,n~b::r 10, 2005
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P,:rr[: Artitl;~r, l'ex;~,.s 7?64
Re;li.;d:fle Poi?'::n,.:' Se:vic*2s ;tn~[ :l:~e C~t.? of Poff ~ur S~fion 4A ~onomic Development
rri~m;]l( ~ii~iLe &~olUt;5,]:~ ::~:ii [I¢2 Cio of ['o~ A~ur Section 4A ~ono~c Developmnt
Col. l:o:rat~a.n; li::rJ J~,]:t. 17~, 1:~',21J6 a'.~prov~!~ ~ economo ~ti~e ag~ment betw~n ~e
P~[t::]sxll'e [sla~r Shrin:t: ~l::.~;t:, lrt4:: ;~(~1 the Ci~ of Po~ ~ S<tion 4A ~ono~c
I:t:,,,,:l~>r,~el~l (brl~Olati:'n 1 i~,i~ t:loa'd of I)kecmrs of ~e Ciw of Po~ ~ ~ction 4A
Ec<*norfi,2 l)cxelopr~]en: (:';:.rr, o~a~io~ approved ~e Plisse Island Shrimp Ho~e, Inc.
S~tncerely,
athleen A. McGI~
tic.)'
F .C.I. JX .1, I . [!E:g'JlqO~-I], IX 77707* ' PHONE: 409.654.6700 ' FAX:
P.R. No. 13266
11/10/2005 km
]l~:F.~,k:~0L~r I ON NO.
~ ~ROVING AN ECONOMIC
:E]~C. ~ T~ CI~ OF FORT
4~, ECONOMIC D~LO~
t, bmCiL. 1 deems it in the public
~'o~t Arthur Section 4A Economic
:8~:',SOL~ BY T~ CI~ CO~CIL OF THE
f~st-s and opinions in the preamble
City of Port Arthur Section 4A
President and Sec~etaay cf the Ci~v
,~,]]llee~/e~t in substantially the same
c,3py oJ' r. his Resol~ution be spread
ECONOMIC INCENTIVE CONTRACT & LOAN AGREEMENT
BETWEEN
THE CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
AND
PLEASURE ISLAND SHRIMP HOUSE, INCORPORATED
Pleasure Island Shrimp House, Inc. ("Shrimp House") processes and freezes shrimp for
wholesale in its four-year-old facility at 3931 South M.L.K. Drive in Port Arthur. In 2004, Shrimp
house entered into a five-year contract with Tampa Bay Fisheries, Inc. ("Tampa Bay"), under
which Tampa Bay promises to purchase all the shrimp that Shrimp House can process.
Currently, Shrimp House can process no more than 18 million pounds per year ("M#/yr"), while
Tampa Bay could use 50 M#-/yr.
Shrimp House has a plan to expand its capacity to 50 M#/yr, by investing $1,175,350 for
a new dock, an automatic bagging system, a large freezer, and upgrades to the existing
processing lines. As an incentive to expand, the City of Port Arthur Section 4A Economic
Development Corporation ("PAEDC") will provide the following:
(1) ~, with a 3-year term and 4% interest rate, exclusively for the
purchase of, and secured by, the automatic bagging system, with the first
payment delayed until the facility expansion is complete, but in no case later than
September 1, 2006; and
(2) A grant for $500,000 kept in a supervised account until Shrimp House fully
performs. Upon execution of this contract, PAEDC will deposit $500,000 in a
Texas State Bank supervised account in the name of Shdmp House. The bank
will not allow Shrimp House to withdraw any amount from the account unless and
until PAEDC Officers sign approval. The PAEDC Board will not give the PAEDC
officers authority to sign until Shrimp House fully performs its obligations under
this contract.
In return for funding, Shrimp House has promised, within one year of completing the
facility expansion, to hire 75 new workers, resulting in at least a $1.5 million per year tota!
payroll, verified with IRS forms 1099, W-2 and W-3.
' ' if Shrimp House breaches this agreement then, Shrimp House will relinquish to PAEDC
the grant monies in the supervised account, minus any credits earned. Additionally, the loan
balance, will automatically convert to a 3-year term loan with 10% interest, thereby, liquidating
damages.
Shrimp House may reduce the duration of this contract or reduce liquidated damages by
earning credits. Starting on day the Shrimp House facility expansion is completed, Shrimp
House will receive a $1.00 credit for each $9.00 of total W-2 payroll, up to $500,000.
Shrimp House agrees to send PAEDC brief reports every three (3) months for the first
year and every six (6) months thereafter, with a close-out report due fourteen (14) days after the
contract is performed fully or breached. Shrimp House will forfeit credits earned during any
reporting period for which it did not issue a timely report.
Shrimp Housc fPAE1)C lnc~ntlv¢ agrccmcnt: 11/10f~O05
ECONOMIC INCENTIVE CONTRACT & LOAN AGREEMENT
BETWEEN
THE CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
AND
PLEASURE ISLAND SHRIMP HOUSE, INC.
CONTRACT DATES ...........................................................................................................................
PARTIES ..............................................................................................................................................
PROMISED PERFORMANCE .......................................................................................................... 2
(A) PERFORMANCE BY PAEDC ......................................................................................................
(B) PERFORMANCE BY SHRIMP HOUSE ...........................................................................................
(C) CREDITS -- SUBSTITUTE PERFORMANCE ...................................................................................
SHRIMP HOUSE'S PERFORMANCE MILESTONE SCHEDULE ............................................. 3
PAEDC'S CONDITIONAL OBLIGATIONS AND LIMITED LIABILITY .....................................
LIQUIDATED DAMAGES FOR CONTRACT BREACH BY SHRIMP HOUSE ........................
RECORDS I INSPECTION I PAEDC AUDIT ................................................................................. ?
HOLD HARMLESS ............................................................................................................................. 8
SUBCONTRACTS .............................................................................................................................. 8
CONFLICT OF INTEREST / DISCLOSURE OBLIGATION ........................................................
NONDISCRIMINATION I EMPLOYMENT I REPORTING ...........................................................
LEGAL AUTHORITY ........................................................................................................................ 10
NOTICE OF LEGAL/REGULATORY CLAIMS AGAINST SHRIMP HOUSE .........................
CHANGES AND AMENDMENTS ..................................................................................................
DEFAULT I TERMINATION ............................................................................................................
SHRIMP HOUSE AUDITS ...............................................................................................................
ENVIRONMENTAL CLEARANCE REQUIREMENTS ............................................................... 13
ORAL AND WRITTEN CONTRACTS I PRIOR AGREEMENTS ..............................................
VENUE ................................................................................................................................................
ADDRESS OF NOTICE AND COMMUNICATIONS ...................................................................
CAPTIONS .........................................................................................................................................
COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS ............................................... 14
CONTRACT EXECUTION ...............................................................................................................
Exhibit "A" ................................. Materials and Equipment in Expansion Plan
Exhibit "B" ..................................................... Commercial Promissory Note
Exhibit "C" ................................................................... Deposit Agreement
Exhibit "D" ................................................ Commercial Security Agreement
Exhibit "E" . .............. UCC-1 Financing Statement
c ~.~,;, ,,~,, ....... Certification Regarding Lobbying
Exhibit "G" ................................................. Release(s) of Mortgagee's Lien
Exhibit "H" ........................................................ Release of Landlord's Lien
ECONOMIC INCENTIVE CONTRACT & LOAN AGREEMENT
BE'FVVEEN
THE CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
AND
PLEASURE ISLAND SHRIMP HOUSE, INC.
CONTRACT DATES
CONTRACT START DATE
1. This Economic incentive Contract and Loan Agreement ("Agreement") is
entered into with an effective date of ,2005, but in no case later than
December 15, 2005, by and between the City of Port Arthur Section 4A Economic
Development Corporation ('PAEDC") and Pleasure Island Shrimp House, Inc. (uShrimp
House").
CONTRACT END DATE
2. This contract expires the earlier of August 1, 2009, or 30 days after Shrimp
House either performs fully or breaches the contract, subject to earlier termination or
extension, voluntary or involuntary, as provided herein. In the event of breach, although
this contract expires, the contracts and agreements contained in the Exhibits to this
contract remain effective.
PARTIES
3. City of Port Arthur Section 4A Economic Development Corporation
("PAEDC"), located at 4173-39TM Street, Port Arthur, Texas, 77642, is a non-profit Texas
corporation. It is duly authorized to do business in the State of Texas under Section 4A,
Article 5190.6 V.T.C.A. and duly authorized by Resolution of the City Council of the City
of Port Arthur to enter into this contract. So authorized and as provided by the PAEDC
bylaws, the President and Secretary of the PAEDC Board have the authority to execute
this contract.
4. Pleasure Island Shrimp House, Inc. ("Shrimp House") is a Nevada
corporation, operating in the City of Port Arthur since 1993. Loc (Victor) Tran, Shrimp
House's Vice President of Marketing and Business Development, is duly authorized by
its Board of Directors to enter into and execute this contract. The registered agent for
Pleasure Island Shrimp House, Inc. in Texas is Tuan Van Tran, President and Chief
Executive Officer, at 3931 South M.L.K. Drive, Port Arthur, Texas, 77642.
PROMISED PERFORMANCE
5. The parties agree to perform as follows.
(a) PERFORMANCE BY PAEDC
(1) PAEDC shall loan the Shrimp House $250,000 toward the automatic
~, subject to both the conditions herein and the terms of thu
promissory note contained in Exhibit "B."
(2) PAEDC shall .qrant the Shrimp House up to $500,000, by depositing the
monies into a Texas State Bank supervised account in the name of Pleasure
Island Shrimp House, Inc., subject to the conditions and limitations detailed
herein.
(3) PAEDC shall execute and comply with the Deposit Aqreement contained
in Exhibit "C" and shall release its lien on the supervised account when th~
EDC Board determines that Shrimp House has earned $500,000 credit, a~
discussed herein.1
These are PAEDC's only obligations.
(b) PERFORMANCE BY SHRIMP HOUSE
(1) At contract execution, Shrimp House shall provide lien releases from the
Mortgagee (Metrobank or assignee) and the owner of the property located at
3931 M.L.K. Drive, Port Arthur, Texas (Irvine Property, Inc.), for all their
interests in the automatic bagging system and the supervised account at
Texas State Bank.
(2) SHRIMP HOUSE shall use the up-front $250,000 loan monies exclusively
toward the purchase of the automatic baa~incl system that is part of Shrimp
House's planned facility expansion, summarized in Exhibit "A."
(3) Within one year after the planned facility expansion is completed, Shrimp
House shall hire at least 75 additional workers and increase annual waqes to
at least $1,500,000 ($125,000 per month), and maintain it until this Incentive
Contract and Loan Agreement is fully performed. Shrimp Employment and
payroll will be monitored with Shrimp House's status reports to PAEDC and
Shrimp Houses filed Internal Revenue Service ("IRS") Forms 1099, W-2 and
W-3.
Shrimp House may use incentive credits to modify this performance
obligation, as discussed in the next section.
I Shrimp House is not required to pay offthe loan before the grant is released.
2
(4) Shrimp House shall .execute and com~lv with the following stand-alone,
collateral agreements:
Exhibit "B" - Commercial Promissory Note for $250,000,
Exhibit "C" - Deposit Agreement
Exhibit"D"-Commercial Security ARreement, using the automatic
bagging system and the Texas State Bank supervised account, perfected
with UCC Financing Statement contained in Exhibit "E."
Exhibit "F"- Certification ReRardin,q Lobbyin.q for contracts, grants, loans,
and cooperative agreements.
(5) On demand by PAEDC and in response to Shrimp House's failure to
achieve a performance milestone, Shrimp House shall provide PAEDC with
.assurances that it has both the intention and the capabilities to perform fully
its contractual obligations.
(6) In the event of breach and default on the loan, Shrimp House promises to
use its industry contacts and its best efforts to sell the automatic bagging
system, used to secure the $250,000 loan, at the highest possible price.
(c) CREDITS -- SUBSTITUTE PERFORMANCE
Shrimp House may earn credits according to the following formulas, giving it the
option to either reduce the duration of this contract or reduce the amount of
liquidated contract damages in the event of breach by Shrimp House.
(1) Starting one year after Shrimp House completes the new dock, Shrimp
House will receive a $1.00 credit for each $9.00 of total payroll reported by
Shrimp House to the IRS using IRS forms 1099 W-2 and W-3, which is $1.00
for each $6.30 of additional payroll.
(2) Total credit cannot exceed $500,000.
(3) Shrimp House will forfeit any credits it earned during a period for which a
report is scheduled but Shrimp House, nonetheless, fails to issue.
SHRIMP HOUSE'S PERFORMANCE MILESTONE SCHEDULE
6. Although failure to achieve a performance milestone is not a breach of
contract, a failure is grounds for PAEDC to withhold further payments to Shrimp House
and/or demand reasonable assurances2 from Shrimp House that it can and will fully
perform its contractual obligations. Failure to provide adequate assurances is a breach
of contract.
2 Examples of reasonable assurances are copies of letters from suppliers or contractors explaining delays
and when the expansion will be back on schedule.
3
7. Shrimp House's performance milestones are contained in the table on the
following page.
4
SHRIMP HOUSE'S PERFORMANANCE MILESTONE SCHEDULE
~ ......... Execute contracts for the automatic bagging system, the
(a)January 15, 2005
new dock and the freezer; and
, Use $250,000 loan monies to purchase the bagging system ,,
L-I~ ~;bruary l, 2006 i Execute contracts for upgrade and tie-In of existing~
()
I processing equipment; and
i Issue a status repor~ to PAEDC's CEO for the period from the
~ effective date of this contract to January 31, 2006.
iai ~i~ ~-/~ f~r the pedod of February 1 to April 30, 2006.
'(~ '-i ~";;i il ~)~ ~;'~';nsion project complete and performance tested;
i Status report for May 1 to July 31, 2006.
(e) September 1, 2006 Fimt monthly loan payment due.
(f) November 1, 2006 Status report for Aug 1 - Oct 31, 2006.
(g) February 14, 2007 Annual report: Jan 1 - Dec 31, 2006
(h) August 1, 2007 Monthly payroll at $126,O001month
(i) ~ July 1,2007 Status report: Jan 1 - June 30, 2007; Maintain payroll
(j) February 1,2008 Annual repor/: Jan 1 - Dec 31, 2007; Maintain payroll
(k) July 1,2008 Status report: Apr 1 - June 30, 2008; Maintain payroll
(I) i December 31, 2008 Annual payroll at $1,500,000 for 2008 calendar year
i""(-ni ! ~i;i~-i"'; 2009 ~'}'~;~e~';~'-'~;:"i-;'~u~; 30, 2009; Maintain payroll
i (O)i August 1, 2009 $280,000 promissory note paid in full
(p):~ August 15, 2009 issue a ~ to the PAEI~-~ ~)~rd'~n~i CEO dot-ailing
i Or actual performanceits verSUSnext promisedscheduledPerformance. Theo.,~ Boardif
14 days after the will take action at regularly meeting o...,
the
contract is performed , Board finds Shdmp House fully performed then the contract ends,
ful y or breached
3 Reports shall include a brief status of expansion project; number of full time, permanent employees on
Shrimp House's payroll; percent of employees that are Port Arthur residents; Performance against
Milestones; and copies of invoices and payments processed for facility expansion during reporting period.
~ February 1 reports shall also include IRS Forms 1099, W-2, W-3, and identity of current Officers,
Directors, Shareholders, Members, and Managers of Shrimp House.
PAEDC'S CONDITIONAL OBLIGATIONS AND LIMITED LIABILITY
8. It is expressly understood and agreed by the parties hereto that the PAEDC
funding obligations herein are contingent upon the actual receipt of adequate sales tax
revenue funds to meet the PAEDC's liabilities under this Agreement. If adequate funds
are not available to make payments under this Agreement, the PAEDC shall notify
Shrimp House in writing within a reasonable time after such fact is reasonably
determined by the PAEDC Board of Directors. The PAEDC, at its sole option, may then
terminate this Agreement without further liability. In the event of such termination by the
PAEDC, the PAEDC may, at its sole option, immediately cease all further funding, if
any, required by this Agreement and the PAEDC shall not be liable to Shrimp House or
to any third parties for failure to make payments to Shrimp House under the terms and
conditions of this Agreement.
9. The PAEDC shall not be liable, in contract or otherwise, to Shrimp House, or
to any person or entity claiming by or through Shrimp House, for any expense,
expenditure or cost incurred by or on behalf of Shrimp House related to the project
made the basis of this Agreement. The PAEDC's sole liability/obligations, if any, shall
be to Shrimp House and shall be limited to the conditional funding obligations detailed in
this Agreement.
10. Shrimp House shall not use the funds herein for any purpose(s) other than
that specifically disclosed herein and as further disclosed within that certain application
made by or on behalf of Shrimp House, which application is incorporated herein for all
purposes.
11. Funds loaned or granted by the PAEDC hereunder shall not be utilized by
Shrimp House for repayment of costs, expenditures or expenses incurred prior to the
date of this Agreement.
LIQUIDATED DAMAGES FOR CONTRACT BREACH BY SHRIMP HOUSE
12. In the event Shrimp House fails to perform its obligations under this contract,
including the corollary agreements, the Shrimp House will immediately, by operation of
law, owe PAEDC the grant funds, minus any credits previously earned by Shrimp
House as recorded in Shrimp House's reurine status reports to PAEDC. This debt is
secured with the Texas State Bank supervised account. Further, the PAEDC shall be
entitled to recover its reasonable and customary attorney's fees, expenses and costs of
Court incurred in collection of said debt and such remedies as are provided at law or in
equity.
13. It is expressly understood and agreed by the parties that any right or remedy
shall not preclude the exercise of any other right or remedy under this 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 right or
remedy hereunder shall not constitute a waiver of the right to exercise that or any other
right or remedy at any time.
RECORDS I INSPECTION I PAEDC AUDIT
14. Shrimp House shall maintain records of the receipt and disposition of the loaned
funds provided hereunder as necessary to allow the PAEDC to audit and verify proper
utilization of said funds in compliance with this Agreement and the representations and
warranties contained herein and in Shrimp House's application.
15. Shrimp House shall give the PAEDC, or any of its duly authorized
representatives, access to and right to examine all books, accounts, records, reports,
files and other papers, things or property belonging to or in use by Shrimp House
pertaining to this Agreement. Such rights to access shall continue as long as the
records are maintained by Shrimp House. Shrimp House agrees to maintain such
records in an accessible location. As to job creation performance, interim status reports
shall include documentation substantiating the accuracy of such reports, including, for
example, 941 payment reports, Texas Workforce Commission reports, or other such
reports confirming total iobs, waqes and other relevant information.
16. All records pertinent to this Agreement shall be retained by Shrimp House at
least three ~ 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 Shrimp House detailing Shrimp House's compliance
with its obligations provided herein. Further, in the event any litigation, claim or audit
arising out of or related to this Agreement is instituted before the expiration of the three
(3) year period and extends beyond the three year period, the records will be
maintained until all litigation, claims or audit findings involving this Agreement and the
records made the basis of same have been resolved. Further, records relating to real
property acquisition, including any long-term lease, shall be retained for a period equal
to the useful life of any machinery or equipment purchased with PAEDC funds.
17. Shrimp House shall provide PAEDC with all reports necessary for PAEDC
compliance with Article 5190.6 V.T.C.A.
18. It is expressly understood and agreed by the parties hereto that if Shrimp
House fails to submit to PAEDC in a timely and satisfactory manner any report required
by this Contract, PAEDC may, at its sole discretion, withhold further payments to
Shrimp House and/or demand assurances that Shrimp House can and will fully
perform its contractual obligations. If Shrimp House fails to provide adequate
assurances then Shrimp House is in breach and the PAEDC will not allow Shrimp
House to withdraw any grant funds or earned interest from the supervised account at
Texas State Bank. If PAEDC withholds such withdrawal approval, it shall notify Shrimp
House in writing of its decision and the reasons therefore.
19. The PAEDC reserves the right, from time to time, to carry out field
inspections/audits to ensure compliance with the requirements of this Agreement. After
completion of any such audit, the PAEDC, at its option, may provide Shrimp House with
a written report of the audit findings. If the audit report details deficiencies in Shrimp
House's performance under the terms and conditions of this Agreement, the PAEDC
may establish requirements for the timely correction of any such deficiencies by Shrimp
House.
HOLD HARMLESS
20. Shrimp House agrees to hold harmless the PAEDC and the City of Port
Arthur from any and all claims, demands, and causes of action of any kind or character
which may be asserted by any third party occurring, arising out of or in any way related
to this Agreement, the project made the basis of this Agreement and the utilization of
grant funds provided by this Agreement.
SUBCONTRACTS
21. Shrimp House may not subcontract to another business or company for
performance credits described in this Contract without obtaining PAEDC's written
approval, which must be approved by the PAEDC Board and which may be withheld for
any reason. Shrimp House shall only subcontract for performance credits described in
this Contract after Shdmp House has submitted Subcontractor Eligibility Request, as
specified by PAEDC, for each proposed subcontract, and Shrimp House has obtained
PAEDC's prior written approval, based on the information submitted, of Shrimp House's
intent to enter into such proposed subcontract. Shrimp House, in subcontracting for any
performances described in this contract, expressly understands that in entering into
such subcontracts, PAEDC is in no way liable to Shrimp House's subcontractor(s).
22. In no event shall PAEDC's prior written approval of a subcontractor's
eligibility, be construed as relieving Shrimp House 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 Shrimp
House. PAEDC's approval does not constitute adoption, ratification, or acceptance of
Shrimp House's or subcontractor's performance hereunder. PAEDC maintains the right
to insist upon Shrimp House's full compliance with the terms of this Contract, and by the
act of subcontractor approval, PAEDC does not waive any right of action which may
exist or which may subsequently accrue to PAEDC under this Contract.
23. Shrimp House, as well as all of its approved subcontractors, shall comply with
all applicable federal, state, and local laws, regulations, and ordinances for making
procurements under this Contract.
CONFLICT OF INTEREST I DISCLOSURE OBLIGATION
24. Conflict of Interest: No employee, agent, officer or elected or appointed
official of the City of Port Arthur or the PAEDC who has participated in a decision
making process related to this contract (without recusing him/herself and executing a
conflict affidavit) may obtain a personal or financial interest or benefit from an PAEDC
assisted activity, or have an interest in any contract, subcontract, or agreement (or
proceeds thereof) with respect to an PAEDC assisted activity, during their tenure or for
one (1) year thereafter. Shrimp House shall ensure compliance with applicable
provisions under Article 5190.6 V.T.C.A. and Chapter 171 Local Government Code
V.T.C.A.
25. Disclosure: In conjunction with execution of this Agreement, Shrimp House
has fully disclosed to PAEDC all known and potential owners of interests in Shrimp
House (whether stockholder, manager, member or otherwise). In the event of any
change in ownership or control of Shrimp House of five percent (5 %) or greater, Shrimp
House shall notify PAEDC in writing. Further, Shrimp House shall be obliqated to notify
in writing the PAEDC in the event any time prior to, durin,q or one (1) year after the term
of this Contract, any City or PAEDC employee or representative or any third party with a
conflict of interest obtains or proposes to obtain a financial benefit, direct or indirect,
from Shrimp House. Failure to provide said notice immediately or no later than five (5)
business days after receipt of information shall constitute a default herein.
NONDISCRIMINATION I EMPLOYMENT I REPORTING
26. Shrimp House shall ensure that no person shall on the grounds of race,
color, religion, sex, handicap, or national origin be excluded from participation in, be
denied the benefits of, or be subjected to discrimination under any program or activity
funded in whole or in part with funds provided under this Contract. Funds shall be used
in accordance with the following requirements:
(a) To the Rreatest extent feasible, opportunities for trainin.q and employment
arising in connection with the planning and carrying out of any project assisted
with PAEDC funds provided under this Contract be given to Port Arthur residents;
and
(b) To the Rreatest 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.
(c) If Shrimp House advertises for employment then it will advertise in the Port
Arthur News, to compliment to other methods or as the sole advertising method.
LEGAL AUTHORITY
27. Shrimp House assures and guarantees that Shrimp House possesses legal
and/or corporate authority to enter into this Contract, receive funds authorized by this
Contract, and to perform the services Shrimp House has obligated to perform hereunder
and has provided, and will in the future provide, as requested by the PAEDC, such
corporate resolutions necessary to evidence this authority.
28. The person or persons signing and executing this Contract on behalf of
Shrimp House, or representing themselves as signing and executing this Contract on
behalf of Shrimp House, do hereby warrant and guarantee that he, she, or they have
been duly authorized by Shrimp House to execute this Contract on behalf of Shrimp
House and to validly and legally bind Shrimp House to all terms, performances, and
provisions herein set forth.
NOTICE OF LEGAL/REGULATORY CLAIMS AGAINST SHRIMP HOUSE
29. Shrimp House shall give PAEDC immediate notice in writing of 1) any legal or
regulatory action, including any proceeding before an administrative agency filed
against Shrimp House, directly or indirectly; and 2) any material claim against Shrimp
House, which may impact continued operations. For purposes herein, "material" claims
shall mean claims in excess of $50,000. Except as otherwise directed by PAEDC,
Shrimp House shall furnish immediately to PAEDC copies of all pertinent documentation
of any kind received by Shrimp House with respect to such action or claim.
CHANGES AND AMENDMENTS
30. Except as specifically provided otherwise in this Contract, any alterations,
additions, or deletions to the terms of this Contract shall be by amendment in writin,q
and executed by both parties to this Contract.
31. 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
Development Corporation ACt of 1979), the regulations promulgated under Article
5190.6 V.T.C.A., the assurances and certifications made to PAEDC by Shrimp House,
and the assurances and certifications made to the City of Port Arthur with regard to the
operation of the PAEDC's Projects. Based on these considerations, and in order to
ensure the legal and effective performance of this Contract by both parties, it is agreed
by the parties hereto that the performances under this Contract are by the provisions of
the PAEDC Program and any amendments thereto and may further be amended in the
following manner: PAEDC may from time to time during the period of performance of
this Contract issue olijp_.olic_~y._directives which serve to establish, interpret, or clarify
performance requirements under this Contract. Such policy directives shall be
promulqated by the PAEDC Board of Directors in the form of P^EDC issuances shall be
approved by the City Council and shall have the effect of qualifying the terms of this
Contract and shall be bindin.q upon Shrimp House, as if written herein.
]0
32. 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.
DEFAULT / TERMINATION
33. In the event of default of any of the obligations of Shrimp House detailed
herein or in the event of breach of any of the representations of or warranties of Shrimp
House either detailed herein or in Shrimp House's application to the PAEDC, the
PAEDC may, at its sole option, terminate this Agreement, in whole or in part. In the
event of such termination, in addition to (i) any other remedies available to the PAEDC
as provided by the laws of the State of Texas or (ii) any other remedies available to the
PAEDC as provided herein, the PAEDC may, at its sole option, utilize one or more of
the following actions to resolve or otherwise remedy said default:
(a) Exercise any remedies provided herein and/or within the Loan/Collateral
Documents;
(b) Withhold, whether temporarily or otherwise, disbursement of grant proceeds
pending correction of the deficiency(s) by Shrimp House;
(c) Disallow all or a part of the incentives which are not in compliance with the
terms and conditions of this Agreement or in compliance with the representations
and warranties contained within this Agreement and Shrimp House's application
to the PAEDC;
(d) Withhold and/or disallow further PAEDC incentives to Shrimp House;
(e) Take any and all other remedies that may be legally available to the PAEDC,
as authorized by the terms and conditions of this Agreement, and as may be
authorized by the laws of the State of Texas;
(f) Declare the Commercial promissory note executed in conjunction with this
Agreement immediately due and payable, in full and exercise its default remedies
provided under collateral documentation executed in conjunction with said Note
and this Agreement.
34. In addition to the foregoing, the parties agree that this Agreement may be
terminated at any time when both parties agree, in writing, to the terms and conditions
of any such voluntary termination.
SHRIMP HOUSE AUDITS
35. If directed by the PAEDC Board, Shrimp House shall arrange for the
performance of a compliance audit by a certified public accountant of funds received
and performances rendered under this Contract, subject to the following conditions and
limitations:
(a) Shrimp House shall have a compliance audit which may be limited to use of
funds received from the P^EDC, made for any of its fiscal years included within
the contract period in which Shrimp House receives more than $100,000 in
PAEDC financial assistance provided by PAEDC in the form of grants, contracts,
loans, loan guarantees, property, cooperative agreements, interest subsidies, or
direct appropriations. Backup documentation regarding actual expenditures shall
be provided by Shrimp House. Said audit must be received and accepted by the
PAEDC CEO and/or the PAEDC Board.
(b) At the option of Shrimp House, each audit required by this section may cover
either Shrimp House's entire operations or each department, agency, or
establishment of Shrimp House which received, expended, or otherwise
administered PAEDC funds;
(c) Unless otherwise specifically authorized by PAEDC in writing, Shrimp House
shall submit the report of such audit to PAEDC within thirty (30) days after
completion of the audit, but no later than one hundred twenty (120) days after the
end of each fiscal period included within the period of this Contract.
(d) As a part of its audit, Shrimp House shall verify that planned expenditures
were made as described herein and in Shrimp House's application to PAEDC. to
purchase machinery and equipment for Shrimp House's business expansion.
Any discrepancies in excess of $1,000 shall be specifically documented in
writing.
36. Shrimp House understands and agrees that it shall be liable to reimburse
immediately PAEDC for any costs disallowed pursuant to financial and compliance
audit(s) of funds received under this Contract and it may be required to submit formal
audits at Shrimp House's costs.
37. Shrimp House shall take all necessary actions to facilitate the performance of
any and all such audits, whether annual, mandatory or othenNise requested under this
Agreement.
38. Subject to financial privacy requirements of Shrimp House and properly
designated requests for non-disclosure due to proprietary reasons, all approved audit
reports may be made available for public inspection.
39. PAEDC shall not release any funds for costs incurred by Shrimp House under
this Contract until PAEDC has received certification from Shrimp House that its fiscal
control and fund accounting procedures are adequate to assure proper disbursal of and
accounting for funds provided under this Contract. PAEDC shall specify the content
and form of such certification.
ENVIRONMENTAL CLEARANCE REQUIREMENTS
40. Shrimp House understands and agrees that by execution of this Contract,
Shrimp House shall be responsible for providing to PAEDC all information, concerning
this PAEDC funded project, required for PAEDC to meet its responsibilities for
environmental review, decision making, and other action which applies to PAEDC in
accordance with and to the extent specified in Federal, State and Local Law. Shrimp
House further understands and agrees that Shrimp House shall make all reasonable
efforts to assist PAEDC in handling inquiries and complaints from persons and agencies
seeking redress in relation to environmental reviews covered by approved certifications.
ORAL AND WRITTEN CONTRACTS I PRIOR AGREEMENTS
41. All oral and written contracts between the parties to this Contract relating to
the subject matter of this Contract that were made prior to the execution of this Contract
have been reduced to writing and are contained in this Contract.
42. The documents listed below are hereby made a part of this Contract, and
constitute promised performances by Shrimp House in accordance with this Contract:
Exhibit "A" - Expansion Plan
Exhibit "B" -- Commercial Promissory Note
Exhibit "C" -- Deposit Agreement
Exhibit "D" -- Commercial Security Agreement
Exhibit "E" -- UCC Financing Statement
Exhibit "F" - Certification Regarding Lobbying
Exhibit "G" - Release(s) of Mortgagee's Lien
Exhibit "H" -- Release of Landlord's Lien
VENUE
43. For purposes of litigation that may accrue under this Contract, venue shall lie
in Jefferson County, Texas.
13
ADDRESS OF NOTICE AND COMMUNICATIONS
City of Port Arthur Section 4A Economic Development Corporation
444 4th Street
Port Arthur, Texas 77640
ATTN: Chief Executive Officer
Pleasure Island Shrimp House, Inc.
3931 South M.L.K. Drive
Port Arthur, Texas 77642
A'I-I'N: Loc (Victor) Tran, VP Marketing & Business Development
CAPTIONS
44. This contract has been supplied with captions to serve only as a guide to the
contents. The caption does not control the meaning of any paragraph or in any way
determine its interpretation or application.
COMPLIANCE WITH FEDERAL~ STATE AND LOCAL LAWS
45. Shrimp House shall comply with all Federal, State and local laws, statutes,
ordinances, resolutions, rules, requlations, orders and decrees of any court or
administrative body or tribunal related to the activities and performances of Shrimp
House under this Contract. Upon request by PAEDC and by the City, Shrimp House
shall furnish satisfactory proof of its compliance herewith.
]4
CONTRACT EXECUTION
APPROVED AS TO FORM:
Guy Goodson, General Counsel for PAEDC
SIGNED AND AGREED TO on the day of ,2005.
CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT
CORPORATION
By:
President
Print Name
Witness
By:.
Secretary
Print Name
Witness
SIGNED AND AGREED TO on the ~ day of ,2005.
PLEASURE ISLAND SHRIMP HOUSE, INC.
By:
Loc (Victor) Tran
Vice President Marketing & Bus. Dev.
Witness
EXHIBIT "A"
Summary of Capacity Expansion Project
Automatic Bagging System $322,946
Large Freezer $144,825
New Dock $489,150
Update Existing Facilities $218~429
Total Investment $1,175,350
EXHIBIT "B"
COMMERCIAL PROMISSORY NOTE
Port Arthur, Texas
This COMMERCIAL PROMISSORY NOTE becomes effective on the date when Pleasure
Island Shrimp House, Inc. (hereinafter called "Maker") breaches that certain Economic
Incentive Contract and Loan Agreement between the City of Port Arthur Section 4A
Economic Development Corporation (hereinafter called "Lender") and Maker, dated
,2005.
Principal Amount: $250,000.00
Term of the Loan: Three years, starting on the date that Maker completes new dock at
3931 South M.L.K., Jefferson County, Port Arthur, Texas, but in no case later than
September 1, 2006.
Payment Schedule: Monthly until principal is paid fully.
FOR VALUE RECEIVED, the undersigned PLEASURE ISLAND SHRIMP HOUSE, INC.
hereinafter called "Maker") prom sas to pay to the order of CITY OF PORT ARTHUR
~ECTION 4A ECONOMIC DEVELOPMENT CORPORATION, (herein called "Lender"), at
ts office at P.O Box 1089 Port Arthur, Texas 77640-1089 or such other place or places
as the holder hereof shall from time to time designate in written notice to Maker, the
rinc le amount, in le al and lawful money of the United States of America, together with
~terC~Pst thereon from ~e date hereof ant maturity at the rate of four percent (4%) per
annum as detailed herein.
All past due principal and nterest shall bear nterest from date of maturity until paid
at the rate of fifteen percent (15%) per ann_urn., or to,t.he ma.ximum .e~entmaall~u~i~_~ by law
(whichever is less) as may hereafter De in eTrect, payaote on oemano aAer ~y.
This note is due and payable as follows: On demand with accrued interest from the
date Maker completes the new dock at 3931 South M.L.K., Jefferson County, Port Arthur,
Texas, but in no case later than September 1, 2006.
Any not cas required or permitted to be g yen by the holder hereof to Maker
pursuant to the provisions of th s note shall be in writing and shall be either personally
de vered or transmitted by first class United States mail, addressed to Maker at the
address designated below for receipt of not ce (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 p. ersonally del vered shall be effective as of the date of
delivery, and any notice transmttted by mail, in accordance with the foregoing provisions,
shal be deemed to have been given to and received by Maker as of the date on which
such notice was deposited with the Un ted States Postal Service, properly addressed and
with postage prepaid.
Th s note is also secured by and entitled to the benefits of all other security
agreements, pledges, collateral assignments, deeds of trust, guaranties, mortgages,
assignments and lien instruments, ~f 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
~nclude those executed simultaneously herewith, those heretofore executed, and those
hereafter executed.
If any installment or payment of principal or interest of this note is not paid when
due or any drawer, acceptor endorser guarantor, surety, accommodation party or other
person now or hereafter primarily or secondarily liable upon or for payment of all or any
part of this note (each hereinafter called an "other liable party") shall die, or become
~nsolvent (however such insolvency may be evidenced); or if any proceeding, procedure or
remedy supplementary to or in enforcement of judgment shall be resorted t? or
commenced against Maker or any other liable party, or w~th respect to any prope~j or any
of them; or if any governmental authority or any court at the ~nstance 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 garmshment 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
payab e upon the lapse of time giving of notice or otherwise; or if Maker or any other liable
party (if other than a natural person) shall be dissolved, wound up, liquidated or otherwise
term nated 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 ts assets without the written consent of Lender or if Maker or any other liable party fails
to furnish financial information req. uested by Lender; or if Maker or any other liable party
furnishes or has furnished any financial or other information or statements which are
mis eadng n any respect or if a default occurs under any instrument now or hereafter
executed ~n connection with or as security for th s note; or any event occurs or condit on
exists which causes Lender to in good faith deem itself insecure or in good faith believe
the prospect of payment or performance by Maker or any other liable party under this note,
under any instrument or agreement executed in connection with or as security for this
note, or under any other indebtedness of Maker or any other liable party to Lender is
impaired thereupon, at the option of Lender the principal balance and accrued interest of
this note and any and al other ndebtedness of Maker to Lender sha 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 wthout 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 legal
proceedings for collection hereof, Maker and each other liable party agree to pay Lender
its collection costs, including court costs and a reasonable amount for attorney's fees.
t s the intention of Maker and Lender to conform strictly to applicable usury laws.
Accordingly, if the transaction contemplated hereby would be usurious under applicable
aw then in that event notwithstanding anything to the contrary herein or in any
agreement entered into in connection with or as security for this note, it is agreed as
follows: (i) the aggregate of all consideration which constitutes interest under applicable
law that is taken, reserved contracted for, charged or received under this note or under
any of the other aforesaid agreements or otherwise ~n connection with this note shall under
no c rcumstances 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 sba have
been paid in full refunded to Maker); (ii) in the event that maturity of this note is
accelerated by reason of an election by the holder hereof resulting from any default
hereunder or otherwise, or in the event of any required or permitted prepayment, then
such consideration that constitutes interest ma)/ never include more than the maximum
amount allowed by applicable law, and excess ~nterest, 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 n connect on w th th s 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 evidencedby this note(including all
renewal and extended terms).
Maker may prepay all or any part of the principal of this note before maturity without
pena ty No partial prepayment shal/reduce, postpone or delay the obligation of Maker to
continue paying the installments herein prowded on their respective due dates following
any such partial prepayment until this note is fully paid.
If Maker defaults on that certain Economic Incentive Contract between Maker and
Lender, to which this Promissory Note is a part then the balance of this loan shall be
comb ned wth the amount of grant monies owning] to create one loan with terms
described in the Promissory Note contained in Exhibit "B2" of that certain Econom c
Incentive Contract.
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
not ces specifically required to be given by the holder hereof to Maker pursuant to the
ear er prov sons of th~s 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,
fi ng of suit and diligence in collecting this note or enforcing or handling any of the security
therefor, and do hereby agree to any substitution, exchange or release, in whole or in part,
of any security here-for or the release of any other liable party, and do hereby consent to
any and all renewals or extensions from time to time, of this note, or any part hereof, either
before or after maturity, all without any notice thereof to any of them and without affecting
or releasing the liability of any of them. Each other liable party does further a~ree 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.
PLEASURE ISLAND SHRIMP HOUSE, INC.,
"Maker"
By:
Loc (Victor) Tran, Vice President of
Marketing and Business Development
ACKNOWLEGEMENT
THE STATE OF TEXAS
COUNTY OF JEFFERSON
BEFORE ME, THE UNDERSIGNED Nota~J Public, on this day personally
appeared Loc (Victor) Tran, a duly authorized representative of Pleasure Island Shrimp
House, Inc., known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged to me that he executed the same as the act and deed of
Pleasure Island Shrimp House, Inc., for the purposes and consideration therein
expressed, and the Capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the __ day of
,2005.
NOTARY PUBLIC, STATE OF TEXAS
MAKER'S ADDRESS FOR RECEIPT OF NOTICE:
PLEASURE ISLAND SHRIMP HOUSE, INC.
3931 South M.L.K. Drive
Port Arthur, Texas 77642
....... ,e:r' C]ei~'t:~'~ J..l/ 1.0/2005 5: 0q PAGE 2/8 RightF&x
..... 2 .. t ...L.R
A'¥ ~ O ~ ~1 ~ ~ ~'.~.,:~A T L A W KA~HLEENA. McGL~N~
ASSOCIATE
D~ecf ~ne: 409.813.8000
~cg~nn~er.com
Now-~mber 10, 2005
Mr. M~rk Solmlow
CSly At~.m:tcy
P (), J].ox ].089
Po~: Artht~:r, Texas 7764 [
De~' 'M~r. BakoLow:
A~;ac:l'~d i$ P. R. lq'c,. ~332'] ,. ~.pmvi~ag ~ ecoaomie ~a6ve a~e~t ~tw~n ~0
Relii~:le Polymer Semices and die C~(F (ff Poa ~ S<fion 4A ~ono~c Developmem
Corl~mtion; F'.]R, No. 1:3:'.121~, ~i;q?~r,a'~ing ~ economo Me.ye a~ ~ecn ~e
qh'ia~gKv Was~ Soh:ttio~'.~; ~tl:<i [['t~ City of Po~ A~ Section 4A ~ono~c Develop~m
Pi~tsum :[sl~Xq S~:, Ha-~se, ~c. :~xd ~e Ci~ of Po~ ~ S~tion 4A ~oao~c
I)ev,~lopment Co~orafion. 'l]'h~ B.o~a~ of D~<~rs of ~o Ci~ of Po~ ~ ~ction 4A
Econorak: ])evelopm, en~ C.c,rp(:mfion approv~ ~e Pleura Island S~imp Ho~e, Inc.
BOX 4911; * I~E!A!3b,V:)N'I,'iX 77'704 * PHONE: 409.654.6700" FAX: 409.835.211.5
EXHIBIT "C"
City of Port Arthur Section 4A
Economic Development Corporation
DEPOSIT AGREEMENT
NAMES OF DEPOSITORS SOCIAL SECURITY OR IRS
TAX NO.
Pleasure Island Shrimp House, Inc.
3931 South M.L.K. Drive
Port Arthur, Texas 77642
GOVERNMENT AGENCY NAME AND ADDRESS NAME AND ADDRESS OF BANK, SAVINGS AND
LOAN OR CREDIT UNION (including ZIP CODE)
City of Port Arthur Section 4A
Economic Development Corporation Texas State Bank
4173 39* Street P.O. Box 26016
Port Arthur, Texas 77642 Beaumont, Texas 77720
COUNTY AND STATE OF RESIDENCE DATE OF DEPOSIT ACCOUNT OR CERTIFICATE
NUMBER (If used)
Jefferson County, Texas
THIS AGREEMENT is made on the date indicated above, between the City of Port Arthur Section 4A
Economic Development Corporation, herein called the "PAEDC," the above-named Depositors, called
the "Depositor," and the above-named Bank, Savings and Loan, or Credit Union, called the "Financial
Institution."
In consideration of loans or other advances of funds made by the PAEDC and the depositing in the
Financial Institution, to the credit of the Depositor in the account established pursuant to this agreement,
of moneys, derived from such loans or other advances of funds, or moneys otherwise obtained by the
Depositor, it is agreed as follows:
1. The Depositor assigns, transfers, and pledges to the PAEDC the above mentioned account and
deposits, made before or after this agreement, and conveys to the PAEDC a security interest in
all money deposited in this account, as security for the repayment of any and all indebtedness
now or later owed by the Depositor to the PAEDC, and for the performances of the obligations
and agreements of the Depositor in connection with such advances or indebtedness, as provided
in that certain Incentive Contract and Loan Agreement between Depositor and PAEDC, dated
2. No part of such deposits, account or money shall be withdrawn by the Depositor and no
withdrawal shall be permitted by the Financial Institution except on the order of the Depositor
and the counter-signatures of duly authorized representatives of the PAEDC.
3. Nothwithstanding any other provision contained herein to the contrary, the Financial Institution
will comply with instructions originated by the PAEDC directing disposition of the funds in this
account without further consent or approval by the Depositor. At any time upon written demand
or order by the PAEDC, the Financial Institution shall pay over to the PAEDC the balance then
on hand, or any part of the balance demanded. The death, disability, or insolvency of the
Depositor shall not impair the power of the PAEDC to demand or order such withdrawal.
4. The Financial Institution agrees that it will not assert any right of setoff or recoupment, except
service charges, with respect to the funds deposited pursuant to this agreement by reason of any
indebtedness or claim now or later owed to or acquired by it. The Financial Institution further
agrees that it will not obtain or claim a security interest in this account or in funds on deposit
therein, that it will not, for the purposes of the Uniform Commercial Code, obtain or assert
"control" of this account or the funds on deposit therein and that it herby subordinates any
security interest it may have or claim in this account or in the funds on deposit therein to the
security interest granted to the PAEDC in the agreement.
5. The Financial Institution shall be under no obligation with respect to the expenditure of funds
after their withdrawal from the Financial Institution in accordance with the provisions of this
agreement. Upon making payment pursuant to an order or check duly executed by the Depositor
and the countersigning PAEDC Officers, or pursuant to the written demand or order of the
PAEDC, the Financial Institution shall be discharged from all obligations with respect to the
funds so released.
6. The Financial Institution further agrees that, at the end of each month it will forward a statement
to the PAEDC at the address shown above.
7. If the checking account statement does not include sufficient information to reconcile the
account, (the name of the payees or the check numbers and the amount of each check), the
original canceled checks or either a microfilm copy or other reasonable facsimile of the canceled
checks must be provided with the statement for reconciling the account. Applicable
X Not Applicable
8. The Financial Institution further agrees that if it did not return the original canceled checks to the
PAEDC with the statements, and the PAEDC has a need for the original checks, the Financial
Institution, upon request by the PAEDC, will furnish to the PAEDC the requested original
canceled checks or a certified microfilmed copy or other reasonable certified facsimile of the
canceled checks in lieu of the original canceled checks. The Financial Institution agrees to
provide this service to the PAEDC with no fees being assessed to the PAEDC or to the
Depositor's account for the service. Applicable X Not Applicable
9. For the purpose of this agreement and the Uniform Commercial Code, the Financial Institution's
jurisdiction is the state shown in the block above of this agreement title, "County and State of
Residence."
410629
IN WITNESS WHEREOF, the parties have entered into this agreement on the day of
,200
FINANCIAL INSTITUTION
TEXAS STATE BANK
BY
Kaprina Frank or Cathy Tran
Department:
Financial Institution: Please return signed Original and copy, along with copy of deposit slip to
the PAEDC office address listed on the front of this form.
CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
Signature - Pres ident or Vice President
Eli Roberts of Kerry Johnson
Print Name
Signature - Secretary
Linda Spears
Print Name
DEPOSITOR
NAME OF DEPOSITOR: PLEASURE ISLAND SHRIMP HOUSE, INC.
BY (PRINT NAME)
POSITION:
SIGNATURE:
Depositor: Please ATFACH COPY OF __ARTICLES OF INCORPORATION, OR
CERTIFICATE OF ASSUMED NAME
410629
EXHIBIT "D"
COMMERCIAL SECURITY AGREEMENT
Dated ., 200_
Debtor(s) Secured Party
Pleasure Island Shrimp House, Inc. POrtcorporationArthur Economic(,,PAEDc~evelopment)
3931 South M.L.K. Drive ~.~.~. 4~ Street
Port Arthur, Texas 77642 Port Arthur, Texas 77640
(hereinafter referred to as "Debtor" whether one or more) (hereinafter referred to as ~Secured Party")
FOR VALUE RECEIVED, the receipt and sufficiency of which is hereby
acknowledged, Debtor grants to Secured Party the security interest (and the pledges and
assignments as applicable) hereinafter set forth and agrees with Secured Party as follows:
A. OBLIGATIONS SECURED. The first priority lien and pledges and
assignments as applicable granted hereby are to secure punctual payment and performance
of the following: (i) certain promissory note(s) of even date herewith in the original
principal sum of $200,000, executed by Debtor and payable to the order of Secured Party,
and any and all extensions, renewals, modifications and rearrangements thereof, (ii) certain
obligations of Debtor to Secured Party under that certain Economic Incentive Contract and
Loan Agreement of even date and all extensions, renewals, modifications and
rearrangements thereof, and (iii) any and all other indebtedness, liabilities and obligations
whatsoever and of whatever nature of Debtor to Secured Party whether direct or indirect,
absolute or contingent, primary or secondary, due or to become due and whether now
existing or hereafter arising and howsoever evidenced or acquired, whether joint or several,
or joint and several (all of which are herein separately and collectively referred to as the
"Obligations"). Debtor acknowledges that the security interest (and pledges and
assignments as applicable) hereby granted shall secure all future advances as well as any and
all other indebtedness, liabilities and obligations of Debtor to Secured Party whether now in
existence or hereafter arising.
B. USE OF COLLATERAL. Debtor represents, warrants and covenants that
Collateral will be used by the Debtor primarily for business use, unless otherwise specified
as follows: Personal, family or household purposes; Farming operations.
C. DESCRIPTION OF COLLATERAL. Debtor hereby grants to Secured Party
a first priority lien in (and hereby pledges and assigns as applicable) and agrees that Secured
Party shall continue to have a security interest in (and a pledge and assignment of as
applicable), the following property, to wit: (DEBTOR TO INITIAL APPROPRIATE
BLANKS)
All Accounts. A security interest in all accounts now owned or existing as well
--as any and all that may hereafter arise or be acquired by Debtor, and all the
proceeds and products thereof, including without limitation, all notes, drafts,
acceptances, instruments and chattel paper arising therefrom, and all returned or
repossessed goods arising from or relating to any such accounts, or other proceeds
of any sale or other disposition of inventory.
X Specific Accounts. A security interest in the supervised account at Texas State
Bank, including earned interest, described by the Deposit Agreement between the
Financial Institution, the Debtor and the Secured Party. Such agreement attached or
which may hereafter be attached hereto.
Texas State Bank Account Number:
All Inventory. A security interest hi all of Debtor's inventory, including all
goods, merchandise, raw materials, goods in process, finished goods and other
tangible personal property, wheresoever located, now owned or hereafter acquired
and held for sale or lease or furnished or to be furnished under contracts for service
or used or consumed in Debtor's business and all additions and accessions thereto
and contracts with respect thereto and all documents of title evidencing or
representing any part thereof, and all products and proceeds thereof, including,
without limitation, all of such which is now or hereafter located at the following
locations: (give locations)
All Fixtures. A security interest in all of Debtor's fixtures and appurtenances
thereto, and such other goods, chattels, fixtures, equipment and personal property
affixed or in any manner attached to the real estate and/or building(s) or structure(s),
including all additions and accessions thereto and replacements thereof and articles
in substitution therefor, howsoever attached or affixed, located at the following
locations: (give legal address)
The record owner of the real estate is:
All Equipment. A security interest in all equipment of every nature and
description whatsoever now owned or hereafter acquired by Debtor including all
appurtenances and additions thereto and substitutions therefor, wheresoever located,
including all tools, parts and accessories used in connection therewith.
General Intangibles. A security interest in all general intangibles and other
personal property now owned or hereafter acquired by Debtor other than goods,
accounts, chattel paper, documents and instruments.
Chattel Paper. A security interest in all of Debtor's interest under chattel
paper, lease agreements and other instruments or documents, whether now existing
or owned by Debtor or hereafter arising or acquired by Debtor, evidencing both a
debt and security interest in or lease of specific goods.
Farm Products. A security interest in alt of Debtor's interest in any and all
crops, livestock and supplies used or produced by Debtor in farming operations
wheresoever located: Debtor's residence is in the county shown at the beginning of
this Agreement and Debtor agrees to notify promptly Secured Party of any change in
the county of Debtor's residence; all of Debtor's crops or livestock are presently
located in the following counties: (give counties)
Securities. A pledge and assignment of and security interest in the securities
described below, together with all instruments and general intangibles related thereto
and all monies, income, proceeds and benefits attributable or accruing to said
property, including, but not limited to, all stock rights, options, rights to subscribe,
dividends, liquidating dividends, stock dividends, dividends paid in stock, new
security or other properties or benefits to which the Debtor is or may hereafter
become entitled to receive on account of said property. (give description)
Certificates of Deposit. A pledge and assignment of and security interest in all
of Debtor's interest in and to the certificates of deposit described below and
instruments related thereto, and all renewals or substitutions therefor, together with
all monies, income, interest, proceeds and benefits attributable or accruing to said
property or to which Debtor is or may hereafter be entitled to receive on account of
said property. (give description)
Instrmnents. A pledge and assignment of and security interest in all of Debtor's
now owned or existing as well as hereafter acquired or arising instruments and
documents.
X Other. A first priority lien on all of Debtor's interest, now owned or hereafter
acquired, in and to the materials, machinery and equipment purchased as part of the
Automatic Ba~,~in~ System, purchased, in part, by Secured Party's Loan monies,
as detailed in that certain Incentive Contract and Loan Agreement between Debtor
and Secured Party. Invoice for system is attached.
Model Number: Serial Number:
The term "Collateral" as used in this Agreement shall mean and include, and the
security interest (and pledge and assignment as applicable) shall cover, all of the foregoing
property, as well as any accessions, additions and attachments thereto and the proceeds and
products thereof, including without limitation, all cash, general intangibles, accounts,
inventory, equipment, fixtures, farm products, notes, drafts, acceptances, securities,
instnunents, chattel paper, insurance proceeds payable because of loss or damage, or other
property, benefits or rights arising therefrom, and in and to all returned or repossessed
goods arising from or relating to any of the property described herein or other proceeds of
any sale or other disposition of such property.
As additional security for the punctual payment and performance of the Obligations,
and as part of the Collateral, Debtor hereby grants to Secured Party a security interest in,
and a pledge and assignment of, any and all money, property, deposit accounts, accounts,
securities, documents, chattel paper, claims, demands, instruments, items or deposits of the
Debtor, and each of them, or to which any of them is a party, now held or hereafter coming
within Secured Party's custody or control, including without limitation, all certificates of
deposit and other depository accounts, whether such have matured or the exercise of
Secured Party's rights results in loss of interest or principal or other penalty on such
deposits, but excluding deposits subject to tax penalties if assigned. Without prior notice to
or demand upon the Debtor, Secured Party may exercise its rights granted above at any time
when a default has occurred or Secured Party deems itself insecure. Secured Party's rights
and remedies under this paragraph shall be in addition to and cumulative of any other rights
or remedies at law and equity, including, without limitation, any rights of set-off to which
Secured Party may be entitled.
D. REPRESENTATIONS, WARRANTIES AND COVENANTS OF DEBTOR.
Debtor represents and warrants as follows:
1. Ownership; No Encumbrances: Except for the security interest (and pledges
and assignments as applicable) granted hereby, the Debtor is, and as to any property
acquired after the date hereof which is included within the Collateral, Debtor will be, the
owner of all such Collateral free and clear from all charges, liens, security interests,
adverse claims and encumbrances of any and every nature whatsoever.
2. No Financing Statements: There is no financing statement or similar filing
now on file in any public office covering any pan of the Collateral, and Debtor will not
execute and there will not be on file in any public office any financing statement or similar
filing except the financing statements fried or to be filed in favor of Secured Party.
3. Accuracy of Information: Alt information furnished to Secured Party
concerning Debtor, the Collateral and the Obligations, or otherwise for the purpose of
obtaining or maintaining credit, is or will be at the time the same is furnished, accurate and
complete in all material respects.
4. Authority: Debtor has full right and authority to execute and perform this
Agreement and to create the security interest (and pledges and assignment as applicable)
created by this Agreement. The making and performance by Debtor of this Agreement will
not violate any articles of incorporation, bylaws or similar document respecting Debtor, any
provision of law, any order of court or governmental agency, or any indenture or other
agreement to which Debtor is a party, or by which Debtor or any of Debtor's property is
bound, or be in conflict with, result in a breach of or constitute (with due notice and/or
lapse of time) a default under any such indenture or other agreement, or result in the
creation or imposition of any charge, lien, security interest, claim or encumbrance of any
and every nature whatsoever upon the Collateral, except as contemplated by this
Agreement.
5. Addresses: The address of Debtor designated at the beginning of this
Agreement is Debtor's place of business if Debtor has only one place of business; Debtor's
chief executive office if Debtor has more than one place of business; or Debtor's residence
if Debtor has no place of business. Debtor agrees not to change such address without
advance written notice to Secured Party.
E. GENERALCOVENANTS. Debtor covenants and agrees as follows:
1. Operation of the Collateral: Debtor agrees to maintain and use the
Collateral solely in the conduct of its own business, in a careful and proper manner, and in
conformity with all applicable permits or licenses. Debtor shall comply in all respects with
all applicable statutes, laws, ordinances and regulations. Debtor shall not use the Collateral
in any unlawful manner or for any unlawful purposes, or in any manner or for any purpose
that would expose the Collateral to unusual risk, or to penalty, forfeiture or capture, or that
would render inoperative any insurance in connection with the Collateral.
2. Condition: Debtor shall maintain, service and repair the Collateral so as to
keep it in good operating condition. Debtor shall replace within a reasonable time all parts
that may be worn out, lost, destroyed or otherwise rendered unfit for use, with appropriate
replacement parts. Debtor shall obtain and maintain in good standing at all times all
applicable permits, licenses, registrations and certificates respecting the Collateral.
3. Assessments: Debtor shall promptly pay when due all taxes, assessments,
license fees, registration fees, and governmental charges levied or assessed against Debtor
or with respect to the Collateral or any part thereof.
4. No Encumbrances: Debtor agrees not to suffer or permit any charge, lien,
security interest, adverse claim or encumbrance of any and every nature whatsoever against
the Collateral or any part thereof.
5. No Removal: Except as otherwise provided in this Agreement, Debtor shall
not remove the Collateral from the county or counties designated at the beginning of this
Agreement without Secured Party's prior written consent.
6. No Transfer: Except as otherwise provided in this Agreement with respect to
inventory, Debtor shall not, without the prior written consent of Secured Party, sell, assign,
transfer, lease, charter, encumber, hypothecate or dispose of the Collateral, or any part
thereof, or interest therein, or offer to do any of the foregoing.
7. Notices and Reports: Debtor shall promptly notify Secured Party in writing
of any change in the name, identity or structure of Debtor, any charge, lien, security
interest, claim or encumbrance asserted against the Collateral, any litigation against Debtor
or the Collateral, any theft, loss, injury or similar incident involving the Collateral, and any
other material matter adversely affecting Debtor or the Collateral. Debtor shall furnish such
other reports, information and data regarding Debtor's financial condition and operations,
the Collateral and such other matters as Secured Party may request from time to time.
8. Landlord's Waivers: Debtor shall furnish to Secured Party, if requested, a
landlord's waiver of all liens with respect to any Collateral covered by this Agreement that
is or may be located upon leased premises, such landlord's waivers to be in such form and
upon such terms as are acceptable to Secured Party.
9. Additional Filings: Debtor agrees to execute and deliver such financing
statement or statements, or amendments thereof or supplements thereto, or other documents
as Secured Party may from time to time require in order to comply with the Texas Uniform
Commercial Code (or other applicable state law of the jurisdiction where any of the
Collateral is located) and to preserve and protect the Secured Party's rights to the
Collateral.
10. Protection of Collateral: Secured Party, at its option, whether before or
after default, but without any obligation whatsoever to do so, may (a) discharge taxes,
claims, charges, liens, security interests, assessments or other encumbrances of any and
every nature whatsoever at any time levied, placed upon or asserted against the Collateral,
(b) place and pay for insurance on the Collateral, including insurance that only protects
Secured Party's interest, (c) pay for the repair, improvement, testing, maintenance and
preservation of the Collateral, (d) pay any filing, recording, registration, licensing or
certification fees or other fees and charges related to the Collateral, or (e) take any other
action to preserve and protect the Collateral and Secured Party's rights and remedies under
this Agreement as Secured Party may deem necessary or appropriate. Debtor agrees that
Secured Party shall have no duty or obligation whatsoever to take any of the foregoing
action. Debtor agrees to promptly reimburse Secured Party upon demand for any payment
made or any expense incurred by the Secured .Party pursuant to this authorization. These.
payments and expenditures, together with interest thereon from date incurred until paid by
Debtor at the maximum contract rate allowed under applicable laws, which Debtor agrees to
pay, shall constitute additional Obligations and shall be secured by and entitled to the
benefits of this Agreement.
11. Inspection: Debtor shall at all reasonable times allow Secured Party by or
through any of its officers, agents, attorneys or accountants, to examine the Collateral,
wherever located, and to examine and make extracts from Debtor's books and records.
12. Further Assurances: Debtor shall do, make, procure, execute and deliver all
such additional and further acts, things, deeds, interests and assurances as Secured Party
may require from time so time to protect, assure and enforce Secured Party's rights and
remedies.
13. Insurance: Debtor shall have and maintain insurance at all times with respect
to all tangible Collateral insuring against risks of fare (including so-called extended
coverage), theft and other risks as Secured Party may require, containing such terms, in
such form and amounts and written by such companies as may be satisfactory to Secured
Party, all of such insurance to contain toss payable clauses in favor of Secured Party as its
interest may appear. All policies of insurance shall provide for ten (10) days written
minimum cancellation notice to Secured Party and at the request of Secured Party shall be
delivered to and held by it. Secured Party is hereby authorized to act as attorney for Debtor
in obtaining, adjusting, settling and canceling such insurance and endorsing any drafts or
instruments. Secured Party shall be authorized to apply the proceeds from any insurance to
the Obligations secured hereby whether or not such Obligations are then due and payable.
Debtor specifically authorizes Secured Party to disclose information from the policies of
insurance to prospective insurers regarding the Collateral.
14. Additional Collateral: If Secured Party should at any time be of the opinion
that the Collateral is impaired, not sufficient or has declined or may decline in value, or
should Secured Party deem payment of the Obligations to be insecure, then Secured Party
may call for additional security satisfactory to Secured Party, and Debtor promises to
furnish such additional security forthwith. The call for additional security may be oral, by
telegram, or United States mail addressed to Debtor, and shall not affect any other
subsequent right of Secured Party to exercise the same.
F. ADDITIONAL PROVISIONS REGARDING ACCOUNTS. The following
provisions shall apply to all accounts included within the Collateral:
1. Definitions: The term "account", as used in this Agreement, shall have the
same meaning as set forth in the Uniform Commercial Code of Texas in effect as of the date
of execution hereof, and as set forth in any amendment to the Uniform Commercial Code of
Texas to become effective after the date of execution hereof, and also shall include all
present and future notes, instruments, documents, general intangibles, drafts, acceptances
and chattel paper of Debtor, and the proceeds thereof.
2. Additional Warranties: As of the time any account becomes subject to the
security interest (or pledge or assignment as applicable) granted hereby, Debtor shall be
deemed further to have warranted as to each and all of such accounts as follows: (a) each
account and all papers and documents relating thereto are genuine and in all respects what
they purport to be; (b) each account is valid and subsisting and arises out of a bona fide sale
of goods sold and delivered to, or out of and for services theretofore actually rendered by
the Debtor to the account debtor named in the account; (c) the amount of the account
represented as owing is the correct amount actually and unconditionally owing except for
normal cash discounts and is not subject to any setoffs, credits, defenses, deductions or
countercharges; and (d) Debtor is the owner thereof free and clear of any charges, liens,
security interests, adverse claims and encumbrances of any and every nature whatsoever.
3. Collection of Accounts: Secured Party shall have the right in its own name
or in the name of the Debtor, whether before or after default, to require Debtor forthwith to
transmit all proceeds of collection of accounts to Secured Party, to notify any and all
account debtors to make payments of the accounts directly to Secured Party, to demand,
collect, receive, receipt for, sue for, compound and give acquittal for, any and all amounts
due or to become due on the accounts and to endorse the name of the Debtor on all
commercial paper given in payment or part payment thereof, and in Secured Party's
discretion to file any claim or take any other action or proceeding that Secured Party may
deem necessary or appropriate to protect and preserve and realize upon the accounts and
related Collateral. Unless and until Secured Party elects to collect accounts, and the
privilege of Debtor to collect accounts is revoked by Secured Party in writing, Debtor shall
continue to collect accounts, account for same to Secured Party, and shall not commingle
the proceeds of collection of accounts with any funds of the Debtor. In order to assure
collection of accounts in which Secured Party has a security interest (or pledge or
assignment of as applicable) hereunder, Secured Party may notify the post office authorities
to change the address for delivery of mail addressed to Debtor to such address as Secured
Party may designate, and to open and dispose of such mail and receive the collections of
accounts included herewith. Secured Party shall have no duty or obligation whatsoever to
collect any account, or to take any other action to preserve or protect the Collateral;
however, should Secured Party elect to collect any account or take possession of any
Collateral, Debtor releases Secured Party from any claim or claims for loss or damage
arising from any act or omission in connection therewith.
4. Identification and Assignment of Accounts: Upon Secured Party's request,
whether before or after default, Debtor shall take such action and execute and deliver such
documents as Secured Party may reasonably request in order to identify, confirm, mark,
segregate and assign accounts and to evidence Secured Party's interest in same. Without
limitation of the foregoing, Debtor, upon request, agrees to assign accounts to Secured
Party, identify and mark accounts as being subject to the security interest (or pledge or
assignment as applicable) granted hereby, mark Debtor's books and records to reflect such
assignments, and forthwith to transmit to Secured Party in the form as received by Debtor
any and all proceeds of collection of such accounts.
5. Account Reports: Debtor will deliver to Secured Party, prior to the tenth
(10) day of each month, or on such other frequency as Secured Party may request, a written
report in form and content satisfactory to Secured Party, showing a listing and aging of
accounts and such other information as Secured Party may request from time to time.
Debtor shall immediately notify Secured Party of the assertion by any account debtor of any
set-off, defense or claim regarding an account or any other matter adversely -affecting an
account.
6. Segregation of Returned Goods: Returned or repossessed goods arising
from or relating to any accounts included within the Collateral shall if requested by Secured
Party be held separate and apart from any other property. Debtor shall as often as requested
by Secured Party, but not less often than weekly even though no special request has been
made, report to Secured Party the appropriate identifying information with respect to any
such returned or repossessed goods relating to accounts included in assignments or
identifications made pursuant hereto.
G. ADDITIONAL PROVISIONS REGARDING INVENTORY. The following
provisions shall apply to all inventory included within the Collateral:
1. Inventory Reports: Debtor will deliver to Secured Party, prior to the tenth
(10th) day of each month, or on such other frequency as Secured Party may request, a
written report in form and content satisfactory to Secured Party, with respect to the
preceding month or other applicable period, showing Debtor's opening inventory, inventory
acquired, inventory sold, inventory returned, inventory used in Debtor's business, closing
inventory, any other inventory not within the preceding categories, and such other
information as Secured Party may request from time to time. Debtor shall immediately
notify Secured Party of any matter adversely affecting the inventory, including, without
limitation, any event causing loss or depreciation in the value of the inventory and the
amount of such possible loss or depreciation.
2. Location of Inventory: Debtor will promptly notify Secured Party in writing
of any addition to, change in or discontinuance of its place(s) of business as shown in this
agreement, the places at which inventory is located as shown herein, the location of its chief
executive office and the location of the office where it keeps its records as set forth herein.
All Collateral will be located at the place(s) of business shown at the beginning of this
agreement as modified by any written notice(s) given pursuant hereto.
3. Use of Inventory: Unless and until the privilege of Debtor to use inventory
in the ordinary course-of Debtor's business is revoked by Secured Party in the event of
default or if Secured Party deems itself insecure, Debtor may use the inventory in any
manner not inconsistent with this Agreement, may sell that part of the Collateral consisting
of inventory provided that all such sales are in the ordinary course of business, and may use
and consume any raw materials or supplies that are necessary in order to carry on Debtor's
business. A sale in the ordinary course of business does not include a transfer in partial or
total satisfaction of a debt.
4. Accounts as Proceeds: All accounts that are proceeds of the inventory
included within the Collateral shall be subject to all of the terms and provisions hereof
pertaining to accounts.
5. Protection of Inventory: Debtor shall take all action necessary to protect and
preserve the inventory.
H. ADDITIONAL PROVISIONS REGARDING SECURITIES AND SIMILAR
COLLATERAL. The following provisions shall apply to all securities and similar property
included within the Collateral:
1. Additional Warranties: As to each and all securities and similar property
included within the Collateral (including securities hereafter acquired that are part of the
Collateral), Debtor further represents and warrants (as of the time of delivery of same to
Secured Party) as follows: (a) such securities are genuine, validly issued and outstanding,
fully paid and non-. assessable, and are not issued in violation of the preemptive rights of
any person or of any agreement by which the issuer or obligor thereof or Debtor is bound;
(b) such securities are not subject to any interest, option or right of any third person; (c)
such securities are in compliance with applicable law concerning form, content and manner
of preparation and execution; and (d) Debtor acquired and holds the securities in compliance
with all applicable laws and regulations.
2. Dividends and Proceeds: Any and all payments, dividends, other
distributions (including stock redemption proceeds), or other securities in respect of or in
exchange for the Collateral, whether by way of dividends, stock dividends,
recapitalizations, mergers, consolidations, stock splits, combinations or exchanges of shares
or otherwise, received by Debtor shall be held by Debtor in trust for Secured Party and
Debtor shall immediately deliver same to Secured Party to be held as part of the Collateral.
Debtor may retain ordinary cash dividends unless and until Secured Party requests that same
be paid and delivered to Secured Party (which Secured Party may request either before or
after defaulO.
3. Collections: Secured Party shall have the right at any time and from time to
time (whether before or after defanl0 to notify and direct the issuer or obligor to make all
payments, dividends and distributions regarding the Collateral directly to Secured Party.
Secured Party shall have the authority to demand of the issuer or obligor, and to receive and
receipt for, any and all payments, dividends and other distributions payable in respect
thereof, regardless Of the medium in which paid and whether they are ordinary or
extraordinary. Each issuer and obligor making payment to Secured Party hereunder shall be
fully protected in relying on the written statement of Secured Party that it then holds a
security interest which entities it to receive such payment, and the receipt by Secured Party
for such payment shall be full acquittance therefor to the one making such payment.
4. Voting Rights: Upon default, or if Secured Party deems itself insecure,
Secured Party shall have the right, at its discretion, to transfer to or register in the name of
Secured Party or any nominee of Secured Party any of the Collateral and/or to exercise any
or all voting rights as to any or all of the Collateral. For such purposes, Debtor hereby
names, constitutes and appoints the President or any Vice President of Secured Party as
Debtor's proxy in the Debtor's name, place and stead to vote any and all of the securities,
as such proxy may elect, for and in the name, place and stead of Debtor, as to all matters
coming before shareholders, such proxy to be irrevocable and deemed coupled with an
interest. The rights, powers and authority of said proxy shall remain in full force and effect,
and shall not be rescinded, revoked, terminated, mended or otherwise modified, until all
Obligations have been fully satisfied.
5. No Duty: Secured Party shall never be liable for its failure to give notice to
Debtor of default in the payment of or. upon the Collateral: Secured Party shall have no
duty to fix or preserve rights against prior parties to the Collateral and shall never be liable
for its failure to use diligence to collect any amount payable in respect to the Collateral, but
shall be liable only to account to Debtor for what it may actually collect or receive thereon.
Without limiting the foregoing, it is specifically understood and agreed that Secured Party
shall have no responsibility for ascertaining any maturities, calls, conversions, exchanges,
offers, tenders, or similar matters relating to any of the Collateral or for informing Debtor
with respect to any of such matters (irrespective of whether Secured Party actually has, or
may be deemed to have, knowledge thereof). The foregoing provisions of this paragraph
shall he fully applicable to all securities or similar property held in pledge hereunder,
irrespective of whether Secured Party may have exercised any right to have such securities
or similar property registered in its name or in the name of a nominee.
6. Further Assurances: Debtor agrees to execute such stock powers, endorse
such instruments, or execute such additional pledge agreements or other documents as may
be required by the Secured Party in order effectively to grant to Secured Party the security
interest in (and pledge and assignment of) the Collateral and to enforce and exercise Secured
Party's rights regarding same.
7. Securities Laws: Debtor hereby agrees to cooperate fully with Secured Party
in order to permit Secured Party to sell, at foreclosure or other private sale, the Collateral
pledged hereunder. Specifically, Debtor agrees to fully comply with the securities laws of
the United States and of the State of Texas and to take such action as may be necessary to
permit Secured Party to sell or otherwise transfer the securities pledged hereunder in
compliance with such laws. Without limiting the foregoing, Debtor, at its own expense,
upon request by Secured Party, agrees to effect and obtain such registrations, filings,
statements, rulings, consents and other matters as Secured Party may request.
8. Power of Attorney: Debtor hereby makes, constitutes, and appoints Secured
Party or its nominee, its true and lawful attorney in fact and in its name, place and stead,
and on its behalf, and for its use and benefit to complete, execute and file 'with the United
States Securities and Exchange Commission one or more notices of proposed sale of
securities pursuant to Rule 144 under the Securities Act of 1933 and/or any similar filings
or notices with any applicable state agencies, and said attorney in fact shall have full power
and authority to do, take and perform all and every act and thing whatsoever requisite,
proper or necessary to be done, in the exercise of the rights and powers herein granted, as
fully to all intents and purposes as Debtor might or could do if personally present. This
power shall be irrevocable and deemed coupled with an interest. The rights, powers and
authority of said attorney in fact herein granted shall commence and be in full force and
effect from the date of this agreement, and such rights, powers and authority shall remain in
ful! force and effect, and ~is power of attorney shall not be rescinded, revoked, terminated,
amended or otherwise modified, until all Obligations have been fully satisfied.
9. Private Sales: Because of the Securities Act of 1933, as amended, or any
other laws or regulations, there may be legal restrictions or limitations affecting Secured
Party in any attempts to dispose of certain portions of the Collateral in the enforcement of
its rights and remedies hereunder. For these reasons Secured Party is hereby authorized by
Debtor, but not obligated, in the event any default hereunder, to sell all or any part of the
Collateral at private sale, subject to investment letter or in any other manner which will not
require the Collateral, or any part thereof, to be registered in accordance with the Securities
Act of 1933, as amended, or the rules and regulations promulgated therennder,-or any other
law or regulation. Secured Party is also hereby authorized by Debtor, but not obligated, to
take such actions, give such notices, obtain such rulings and consents, and do such other
things as Secured Party may deem appropriate in the event of a sale or disposition of any of
the Collateral. Debtor clearly
understands that Secured Party may in its discretion approach a restricted number of
potential purchasers and that a sale under such circumstances may yield a lower price for
the Collateral or any part or parts thereof than would otherwise be obtainable if same were
registered and sold in the open market, and Debtor agrees that such private sales shall
constitute a commercially reasonable method of disposing of the Collateral.
I. ADDITIONAL PROVISIONS REGARDING CERTIFICATES OF
DEPOSIT AND SIMILAR COLLATERAL. The following provisions shall apply to
certificates of deposit and similar property included within the Collateral:
1. Collection of Deposits: Debtor agrees that Secured Party may, at any time
(whether before or after default) and in its sole discretion, surrender for payment and obtain
payment of any portion of the Collateral, whether such have matured or the exercise of
Secured Party's rights results in loss of interest or principal or other penalty on such
deposits, and, in connection therewith, cause payment to be made directly to Secured Party.
2. Notice to Third Party Issuer: With regard to any certificates of deposit or
similar Collateral for which Secured Party is not the issuer, Debtor agrees to notify the
issuer or obligor of the interests hereby granted to Secured Party and to obtain from such
issuer or obligor acknowledgement of the interests in favor of Secured Party and the issuer's
or obligor's agreement to waive in favor of Secured Party any and all rights of set-off or
similar rights or remedies to which such issuer or obligor may be entitled, and, in
connection therewith, to execute and cause the issuer or obligor to execute, any and all
acknowledgments, waivers and other agreements in such form and upon such terms as
Secured Party may request.
3. Proceeds: Any and all replacement or renewal certificates, instruments, or
other benefits or proceeds related to the Collateral that are received by Debtor shall be held
by Debtor in trust for Secured Party and immediately delivered to Secured Party to be held
as part of the Collateral.
4. No Duty: Secured Party shall never be liable for its failure to give notice to
Debtor of default in the payment of or upon the Collateral. Secured Party shall have no duty
to fix or preserve rights against prior parties to the Collateral and shall never be liable for
its failure to use diligence to collect any amount payable in respect to the Collateral, but
shall be liable only to account to Debtor for what it may actually collect or receive thereon.
Without limiting the foregoing, it s specifically understood and agreed that Secured Party
shall have no responsibility for ascertaining any maturities or similar matters relating to any
of the Collateral or for informing Debtor with respect to any of such matters (irrespective of
whether Secured Party actually has, or may be deemed, to have, knowledge thereof).
J. EVENTS OF DEFAULT. Debtor shall be in default hereunder upon the
happening of any of the following events or conditions: (i) non-payment when due (whether
by acceleration of maturity or otherwise) of any payment of principal, interest or other
amount due on any Obligation; (ii) the occurrence of any event which under the terms of
any evidence of indebtedness, indenture, loan agreement, security agreement or, similar
instrument permits the acceleration of maturity of any obligation of Debtor (whether to
Secured Party or to others); (iii) any representation or warranty made by Debtor to Secured
Party in connection with this Agreement, the Collateral or the Obligations, or in any
statements or certificates, proves incorrect in any material respect as of the date of the
making or the issuance thereof; (iv) default occurs in the observance or performance of, or
if Debtor fails to furnish adequate
evidence of performance of, any provision of this Agreement or of any note, assignment,
transfer, other agreement, document or instrument delivered by Debtor to Secured Party in
connection with this Agreement, the Collateral or the Obligations; (v) death, dissolution,
liquidation, termination of existence, insolvency, business failure or winding-up of Debtor
or any maker, endorser, guarantor, surety or other party liable in any capacity for any of
the Obligations; (vi) the commission of an act of bankruptcy by, or the application for
appointment of a receiver or any other legal custodian for any part of the property of,
assignment for the benefit of creditors by, or the commencement of any proceedings under
any bankruptcy, arrangement, reorganization, insolvency or similar laws for the relief of
debtors by or against, the Debtor or any maker, endorser, guarantor, surety or other party
primarily or secondarily liable for any of the Obligations: (vii) the Collateral becomes, in
the judgment of Secured Party, impaired, unsatisfactory or insufficient in character or
value; or (viii) the filing of any levy, attachment, execution, garnishment or other process
against the Debtor or any of the Collateral or any maker, endorser, guarantor, surety or
other party liable in any capacity for any of the Obligations.
K. REMEDIES: Upon the occurrence of an event of default, or if Secured Party
deems payment of the Obligations to be insecure, Secured Party, at its option, shall be
entitled to exercise any one or more of the following remedies (all of which are cumulative):
1. Declare Obligations Due: Secured Party, at its option, may declare the
Obligations or any part thereof immediately due and payable, without demand, notice of
intention to accelerate, notice of acceleration, notice of non-payment, presentment, protest,
notice of dishonor, or any other notice whatsoever, all of which are hereby waived by
Debtor and any maker, endorser, guarantor, surety or other party liable in any capacity for
any of the Obligations.
2. Remedies: Secured Party shall have all of the rights and remedies provided
for in this Agreement and in any other agreements executed by Debtor, the rights and
remedies Of the Uniform Commercial Cede of Texas, and any and all of the rights and
remedies at law and in equity, all of which shall be deemed cumulative. Without limiting
the foregoing, Debtor agrees that Secured Party shall have the right to: (a) require Debtor to
assemble the Collateral and make it available to Secured Party at a place designated by
Secured Party that is reasonably convenient to both parties, which Debtor agrees to do; (b)
peaceably take possession of the Collateral and remove same, with or without judicial
process; (c) without removal, render equipment included within the Collateral unusable, and
dispose of the Collateral on the Debtor's premises; (d) sell, lease or otherwise dispose of the
Collateral, at one or more locations, by public or private proceedings for cash or credit,
without assumption of credit risk; and/or (e) whether before or after default, collect and
receipt for, compound, compromise, and settle, and give releases, discharges and
acquittances with respect to, any and all amounts owed by any person or entity with respect
to the Collateral. Unless the Collateral is perishable or threatens to decline speedily in value
or is of a type customarily sold on a recognized market, Secured Party will send Debtor
reasonable notice of the time and place of any public sale or of the time after which any
private sale or other disposition will be made. Any requirement of reasonable notice to
Debtor shall be met if such notice is mailed, postage prepaid, to Debtor at the address of
Debtor designated at the beginning of this Agreement, at least five (5) days before the day
of any public sale or at least fiye (5) days before the time after which any private sale or
other disposition will be made.
3. Expenses: Debtor shall be liable for and agrees to pay the reasonable
expenses incurred by Secured Party in enforcing its rights and remedies, in retaking,
holding, testing, repairing, improving, selling, leasing or disposing of the Collateral, or like
expenses, including, without limitation, attorneys' fees and legal expenses incurred by
Secured Party. These expenses, together with interest thereon from date incurred until paid
by Debtor at the maximum contract rate allowed under applicable laws, which Debtor
agrees to pay, shall constitute additional Obligations and shall be secured by and entitled to
the benefits of this Agreement.
4. Proceeds, Surplus, Deficiencies: Proceeds received by Secured Party from
disposition of the Collateral shall be applied toward Secured Party's expenses and other
Obligations in such order or manner as Secured Party may elect. Debtor shall be entitled to
any surplus if one results after lawful application of the proceeds. Debtor shall remain liable
for any deficiency.
5. Remedies Cumulative: The rights and remedies of Secured Party are
cumulative and the exercise of any one or more of the rights or remedies shall not be
deemed an election of rights or remedies or a waiver of any other right or remedy. Secured
Party may remedy any default and may waive any default without waiving the default
remedied or without waiving any other prior or subsequent default.
L. OTHER AGREEMENTS.
1. Savings Clause: Notwithstanding any provision to the contrary herein, or in
any of the documents evidencing the Obligations or otherwise relating thereto, no such
provision shall require the payment or permit the collection of interest in excess of the
maximum permitted by applicable usury laws. If any such excessive interest is so provided
for, then in such event (i) the provisions of this paragraph shall govern and control; (ii)
neither the Debtor nor his heirs, legal representatives, successors or assigns or any other
party liable for the payment thereof, shall be obligated to pay the amount of such interest to
the extent that is in excess of the maximum amount permitted by law; (iii) any such excess
interest that may have been collected shall be, at the option of the holder of the instrumem
evidencing the Obligations, either applied as a credit against the then unpaid principal
amount thereof or refunded to the maker thereof; and (iv) the effective rate of interest shall
be automatically reduced to the maximum lawful rate under applicable usury laws as now or
hereafter construed by the courts having jurisdiction.
2. Joint and Several Responsibility: If this Security Agreement is executed by
more than one Debtor, the obligations of all such Debtors shall be joint and several.
3. Waivers: Debtor and any maker, endorser, guarantor, surety or other party
liable in any capacity respecting the Obligations hereby waive demand, notice of intention to
accelerate, notice of acceleration, notice of non-payment, presentment, protest, notice of
dishonor and any other similar notice whatsoever.
4. Severability: Any provision hereof found to be invalid by courts having
jurisdiction shall be invalid only with respect to such provision (and then only to the extent
necessary to avoid such invalidity). The offending provision shall be modified to the
maximum extent possible to confer upon Secured Party the benefits intended thereby. Such
provision as modified and the remaining provisions hereof shall be construed and enforced
to the same effect as if such
offending provision (or portion thereof) had not been contained herein, to the maximum
extent possible.
5. Use of Copies: Any carbon, photographic or other reproduction of any
financing statement signed by Debtor is sufficient as a financing statement for all purposes,
including without limitation, filing in any state as may be permitted by the provisions of the
Uniform Commercial Code of such state.
6. Relationship to Other Agreements: This Security Agreement and the
security interests (and pledges and assignments as applicable) herein granted are in addition
to (and not in substitution, novation or discharge of) any and all prior or contemporaneous
security agreements, security interests, pledges, assignments, liens, rights, titles or other
interests in favor of Secured Party or assigned to Secured Party by others in connection with
the Obligations, All lights and remedies of Secured Party in all such agreements are
cumulative, but in the event of actual conflict in terms and conditions, the terms and
conditions of the latest security agreement shall govern and control.
7. Notices: Any notice or demand given by Secured Party to Debtor in
connection with this Agreement, the Collateral or the Obligations, shall be deemed given
and effective upon deposit in the United States mail, postage prepaid, addressed to Debtor at
the address of Debtor designated at the beginning of this Agreement. Actual notice to
Debtor shall always be effective no matter how given or received.
8. Headings and Gender: Paragraph headings in this Agreement are for
convenience only and shall be given no meaning or significance in interpreting this
Agreement. All words used herein shall be construed to be of such gender or number as the
circumstances require.
9. Amendments: Neither this Agreement nor any of its provisions may be
changed, amended, modified, waived or discharged orally, but only by an instrument in
writing signed by the party against whom enforcement of the change, amendment,
modification, waiver or discharge is sought.
10. Continuing Agreement: The security interest (and pledges and assignments
as applicable) hereby granted and all of the terms and provisions in this Agreement shall be
deemed a continuing agreement and shall continue in full force and effect until terminated in
writing. Any such revocation or termination shall only be effective ff explicitly confh-med in
a signed writing issued by Secured Party to such effect and shall in no way impair or affect
any transactions entered into or rights created or Obligations incurred or arising prior to
such revocation or termination, as to which this Agreement shall be fully operative until
same are repaid and discharged in full. Unless otherwise required by applicable la Secured
Party shall be under no obligation to issue a termination statement or similar documents
unless Debtor requests same in writing and, provided further, that all Obligations have been
repaid and discharged in full and there are no commitments to make advances, incur any
Obligations or otherwise give value.
11. Binding Effect: The provisions of this Security Agreement shall be binding
upon the heirs, personal representatives, successors and assigns of Debtor and the rights,
powers and remedies of Secured Party hereunder shall inure to the benafit of the successors
and assigns of Secured Party.
12. Governing Law: This Security Agreement shall be governed by the law of
the State of Texas and applicable federal law.
EXECUTED this __ day of ,200
PLEASURE ISLAND SHRIMP HOUSE, INC.
By:
Loc (Victor) Tran, Vice President of
Marketing & Business Development
EXHIBIT "E"
UCC FINANCING STATEMENT
~City of Port Arthur Section 4A Economic Development
Corporation
4173 39th Street
Port Arthur~ Texas 77642
L -- 11~E ABOVE SPACE IS FOR FILING OFFICE uae ONLY
OR 1 ,. OECANIZA33QN'S NAME aWrtpo;l~r
-- Pleasure Island Shrimp House~ Inc.
3931 South M.L.K. Drive Arthur TX1 77642
USA
Desto. Corporation I Texas I TX 800099796 []~
CiW. of Port Arthur Section 4A Economic Development Corporation
-- 4173 39th Street I Port Arthur TX 77642
The automatic bagging system described by attached invoice (Exhibit 1).
8. OP31ONAL FILER REFEREHCE DATA
Inte, matlonaI A~,a~;Jatlon of C~i~,,,er..,~t Admi.~,~,aiui~ (lAC-A)
FLUNG OFFICE COPY- UCC FINANCING STATEMENT (FORM UCC1) (REV: 75j22/02)
EXHIBIT "F"
CERTIFICATION REGARDING LOBBYING
For Contracts, Grants, Loans, and Cooperative Agreements
The undersigned certifies, to the best of his knowledge and belief, that:
1. No funds have been paid or will be paid, by or on behalf of the
undersigned, to any person for influencing or attempting to
influence an officer or employee of any agency, a member of
the City or of the PAEDC in connection with the awarding of
any contract, the making of any grant, the making of any loan,
the entering into of any cooperative agreement, or modification
of any contract, grant, loan, or cooperative agreement.
2 The undersigned shall require that the language of this
certification be included in the award documents for all sub-
awards at all tiers (including subcontracts, sub-grants, and
contracts under grants, loans, and cooperative agreements),
and that all shall certify and disclose accordingly.
This certification is material representation of fact which reliance was
placed when this transaction was made or entered into. Submission of this
certification is a prerequisite for making or entering into this transaction.
Signed: Pleasure Island Shrimp House, Inc.
By:
Loc (Victor) Tran, Vice President of
Marketing & Business Development
Date:
EXHIBIT "G"
CITY OF PORT ARTI-IUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
("PAEDC")
MORTGAGEE 'S AGREEMENT
STATE OF TEXAS
COUNTY OF JEFFERSON
WHEREAS, MetroBank National Association., hereinafter referred to as
"Mortgagee," is the mortgagee of certain real property located at 3951 South M.L.K.
Drive, Port Arthur, Texas 77642 and all personal property; and
WHEREAS, Pleasure Island Shrimp House, Inc., hereinafter referred to as
"Debtor," operates a shrimp processing and freezing operation at 3951 South M.L.K.
Drive, Port Arthur, Texas, 77642, and has placed or may place upon 3951 South
M.L.K. Drive, Port Arthur, Texas, certain personal property, (collectively known as
the "Collateral"), pursuant to an incentive contract and loan agreement (the "Contract")
that PAEDC and Debtor are planning to execute; and
WHEREAS, Debtor has borrowed, may borrow or will borrow certain sums of
money from PAEDC ("Liabilities") and has given or may give as security therefore a
security interest or other lien upon all materials and equipment that are part of a
automatic bagging system, located upon at 3951 South M.L.K. Drive, Port Arthur,
Texas; and
WHEREAS, Debtor has entered into a Deposit Agreement with Texas State
Bank and PAEDC, under which PAEDC has a security interest in a supervised Texas
State Bank account in the name of Debtor and PAEDC must approve and sign for all
account withdrawals by Debtor; and
WHEREAS, it is the desire of Mortgagee and Debtor that any such security
interests or liens shall be in all things first and prior to any other lien or liens against
said property, free of any of the liens or claims of Mortgagee.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Mortgagee hereby covenants and agrees as follows:
1. Mortgagee waives all rights which Mortgagee now or hereafter
may have, under the laws of the State of Texas, by virtue of any contract,
agreement or other document or instrmnent to levy upon, or to claim or assert
any llen, right, claim or title to, any of the Collateral in order to enforce any
obligation of Debtor, without limitation.
2. Mortgagee agrees that the Collateral (i) is and shall remain
personal property notwithstanding the manner or mode of the attachment of any
item of Collateral to the Property and (ii) is not and shall not become or be
deemed to be fixtures.
3. Mortgagee recognizes and acknowledges that PAEDC's security
interest in the Collateral pursuant to the Agreement is superior to any lien, right,
claim or title of any nature that Mortgagee now or hereafter may have or assert
in the Collateral by statute, common law, any agreement or otherwise.
4. In the event of default by the Debtor in the payment or
performance of any of the Liabilities, PAEDC may remove the Collateral or any
part thereof in accordance without objection, delay, hindrance or interference by
Mortgagee and in such case Mortgagee will make no claim or demand
whatsoever against the Collateral. Mortgagee agrees that it will (i) cooperate
with PAEDC in its efforts to assemble and/or remove all of the Collateral
located on the Property; (ii) permit PAEDC and its agents to enter upon the
Property and occupy the Property at any or all times to conduct an auction or
sale, and/or to inspect, audit, examine, safeguard, assemble, appraise, display,
remove, maintain, prepare for sale or lease, repair, lease, transfer, auction
and/or sell the Collateral; and (iii) not hinder PAEDC's actions in enforcing its
security interest in the Collateral. PAEDC shall repair any damage to the
Property caused by the removal of any property by PAEDC.
5. PAEDC may, without affecting the validity of this Agreement,
extend, amend or modify in any way the terms of payment or performance of
any of the Liabilities, without the consent of Mortgagee and without giving
notice thereof to Mortgagee.
6. The agreements contained herein shall continue in force until the
date as of which all of the Liabilities are indefeasibly paid and satisfied in full.
The agreements contained herein may not be modified or terminated orally, and
shall be binding upon the successors, assigns, heirs and personal representatives
of Mortgagee upon any successor owner or transferee of the Property, and upon
any purchasers from the Mortgagee and shall inure to the benefit of PAEDC and
its legal representatives, successors and assigns.
7. All communications under this Agreement shall be sent by
registered or certified mail (postage prepaid, return receipt requested), to the
addresses set forth below (or such other address as is furnished in writing by
any party to the other party):
If to PAEDC: City of Port Arthur Section 4A
Economic Development Corporation
P.O. Box 3934
4173 39~h Street
Port Arthur, Texas 77642
Attention: Chief Executive Officer
Telephone: (409) 963-0579
Facsimile: (409) 962 ~.~.~.5
If to Mortgagee: MetroBank National Association
9600 Bellaire
Suite 252
Houston, Texas 77036
Attn:
Telephone: (713)776-3876
Facsimile: (713)414-3790
If to Debtor: Pleasure Island Shrimp House, Inc.
3931 South M.L.K. Drive
Port Arthur, Texas 77642
Attention: Loc (Victor) Tran
Telephone: (409) 9834334
Facsimile: (409) 982-2156
Each party shall have the right to change its address for notices by giving the
other party ten (10) days' prior notice of its chan4~e of address.
IN WITNESS WHEREOF, this agreement has been duly executed and delivered
as of the __ day of ,200__.
"MORTGAGEE"
MetroBank National Association
By:
AGREED TO AND ACCEPTED as of the date and year first written above by:
"DEBTOR"
PLEASURE ISLAND SHRIMP HOUSE, INC.
By:
Loc (Victor) Tran, VP Marketing &
Business Development
EXHIBIT "H"
CITY OF PORT ARTHUR SECTION 4A
ECONOMIC DEVELOPMENT CORPORATION
("PAEDC')
LANDLORD'S AGREEMENT
STATE OF TEXAS
COUNTY OF JEFFERSON
WHEREAS, Irvine Property, Inc., hereinafter referred to as "Landlord," is the
owner of certain real property, hereinafter referred to as the "Premises," located at
3951 South M.L.K. Drive, Port Arthur, Texas 77642; and
WHEREAS, Pleasure Island Shrimp House, Inc., hereinafter referred to as
"Tenant," operates a shrimp processing and freezing operation on the Premises and has
placed or may place upon the premises certain personal property, (collectively known
as the "Collateral"), pursuant to an incentive contract and loan agreement (the
"Contract") that PAEDC and Tenant are planning to execute; and
WHEREAS, Tenant has borrowed, may borrow or will borrow certain sums of
money from PAEDC ("Liabilities") and has given or may give as security therefore a
security interest or other lien upon personal property located upon the Premises; and
WHEREAS, it is the desire of Landlord and Tenant that any such security
interest or lien shall be in all things first and prior to any other lien or liens against said
Property, free of any of the liens or claims of Landlord.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord hereby covenants and agrees as follows:
1. Landlord waives all rights which Landlord now or hereafter may
have, under the laws of the State of Texas or by virtue of Lessee's occupation of
the Premises, or by virtue of any contract, agreement or other document or
instrument pertaining to the Premises, to levy upon, or to claim or assert any
lien, right, claim or title to, any of the Collateral which now or hereafter may be
located on the Premises in order to enforce any obligation of Tenant, including,
without limitation, the obligation to pay rent and any other monetary obligation
arising thereunder.
2. Landlord agrees that the Collateral (i) is and shall remain
personal property notwithstanding the manner or mode of the attachment of any
item of Collateral to the Premises and (ii) is not and shall not become or be
deemed to be fixtures.
3. Landlord recognizes and acknowledges that PAEDC's security
interest in the Collateral pursuant to the Agreement is superior to any lien, right,
claim or title of any nature that Landlord now or hereafter may have or assert in
the Collateral by statute, common law, the Lease, any New Lease, any other
agreement or otherwise.
4. In the event of default by the Tenant in the payment or
performance of any of the Liabilities, PAEDC may remove the Collateral or any
part thereof from the Premises in accordance with statutory law appertaining
thereto without objection, delay, hindrance or interference by Landlord and in
such case Landlord will make no claim or demand whatsoever against the
Collateral. Landlord agrees that, regardless of whether the Lease or a New
Lease has been terminated, it will (i) cooperate with PAEDC in its efforts to
assemble and/or remove all of the Collateral located on the Premises; (ii) permit
PAEDC and its agents to enter upon the Premises and occupy the Premises at
any or all times to conduct an auction or sale, and/or to inspect, audit, examine,
safeguard, assemble, appraise, display, remove, maintain, prepare for sale or
lease, repair, lease, transfer, auction and/or sell the Collateral; and (iii) not
hinder PAEDC's actions in enforcing its security interest in the Collateral.
PAEDC shall repair any damage to the Premises caused by the removal of any
property by PAEDC. The Landlord will permit PAEDC to remain on the
premises for a period of up to ninety (90) days following receipt by the PAEDC
of written notice from the Landlord that the Landlord has terminated the Lease
and directing removal of the Collateral, subject, however, to the payment to the
Landlord by PAEDC of the rent and other monetary amounts due under the
Lease for the period of occupancy by PAEDC, pro-rated on a per diem basis
determined on a 30-day month.
5. PAEDC may, without affecting the validity of this Agreement,
extend, amend or modify in any way the terms of payment or performance of
any of the Liabilities, without the consent of Landlord and without giving notice
thereof to Landlord.
6. To the best of Landlord's knowledge, there are no events or
conditions existing which, with or without notice or the lapse of time or both,
could constitute a default on the part of Landlord or Tenant under the Lease.
7. Landlord will notify PAEDC at the address designated for notices
in Paragraph 9 below if Tenant defaults on its obligations to Landlord under any
Lease and allow PAEDC thirty (30) days from its receipt of notice for
nonmonetary default and ten (10) days for monetary default in which PAEDC
may, but will not be obligated to, cure or cause Tenant to cure any such default.
8. The agreements contained heroin shall continue in force until the
date as of which all of the Liabilities are indefeasibly paid and satisfied in full.
The agreements contained herein may not be modified or terminated orally, and
shall be binding upon the successors, assigns, heirs and personal representatives
of Landlord upon any successor owner or transferee of the Premises, and upon
any purchasers Rom the Landlord and shall inure to the benefit of PAEDC and
its legal representatives, successors and assigns.
9. All notices and other communications under this Agreement must
be in writing and will be deemed given (i) when received, if delivered
personally or by courier (with written confirmation of receipt), (ii) on the date
of transmission, if sent by facsimile (with written confumaation of receip0, or
(iii) five days after being deposited in the mail, if sent by registered or certified
mail (postage prepaid, return receipt requested), to the addresses set forth below
(or such other address as is furnished in writing by any party to the other party):
If to PAEDC: City of Port Arthur Section 4A
Economic Development Corporation
P.O. Box 3934
4173 39~ Street
Port Arthur, Texas 77642
Attention: Chief Executive Officer
Telephone: (409) 963-0579
Facsimile: (409) 962 ~.~.~.5
If to Landlord: Irving Property, Inc.
5850 San Felipe Street
Suite 120
Houston, Texas 77057
Attn:
Telephone:
Facsimile:
If to Tenant: Pleasure Island Shrimp House, Inc.
3931 South M.L.K. Drive
Port Arthur, Texas 77642
Attention: Loc (Victor) Tran
Telephone: (409) 9834334
Facsimile: (409) 982-2156
Each party shall have the right to change its address for notices by giving the
other party ten (10) days' prior notice of its change of address.
10. This Agreement will be governed by and construed and enforced
in accordance with the laws of the State of Texas without giving effect to its
conflicts of law principles.
11. Each of the parties shall promptly do, make, execute, deliver, or
cause to be done, made, executed or delivered, all such further acts, documents
and things as the other party may reasonably require from time to time for the
purpose of giving effect to this Agreement, and each party shall use reasonable
efforts and take all such steps as are reasonably within its power to implement to
the full extent the provisions of this Agreement.
12. This Agreement may be executed in any number of counterparts,
and by the parties hereto on the same or separate counterparts, and each such
counterpart, when executed and delivered, shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
Agreement.
IN WITNESS WHEREOF, this agreement has been duly executed and delivered
as of the day of ,200__.
"LANDLORD"
IRVINE PROPERTY, INC.
By:.
President
AGREED TO AND ACCEPTED as of the date and year first written above by:
"TENANT"
PLEASURE ISLAND SHRIMP HOUSE, INC.
By:
Loc (Victor) Tran, VP Marketing &
Business Development