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HomeMy WebLinkAboutPR 13417: P. I. SHRIMP HOUSEinteroffice MEMORANDUM To: Mayor, City Council, and City Manager F~om: Mark T. Sokolow, City Attorney ~L~ ~/~'" J Date: February 3, 2006 Subject: P. R. No. 13417; joint EDC/Special Council Meeting February 7, 2006 Attached is P. R. No. 13417 authorizing the President and Secretary of the EDC to execute an amendment to the incentive agreement between the EDC and Pleasure Island Shrimp House, Inc. MTS/gt Attachment cc: VIA FACSI~IL~ (409) 962-4445 Floyd Batiste, CEO of EDC VIA FACSIMILE (409) 835-2115 Kate McGlynn, GERMER GERTZ z.pr13417.memo P. R. No. 13417 02/02/06 gt RESOLUTION NO. A RESOLUTION AUTHORIZING THE pRESIDENT AND SECRETARY OF THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION TO EXECUTE AN AMENDMENT TO THE INCENTIVE AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION AND PLEASURE ISLAND SHRIMP HOUSE, INC. WHEREAS, as noted in Exhibit "A", the Board of Directors of the City of Port Arthur Section 4A Economic Development Corporation has approved an amendment to the incentive agreement to be entered into with Pleasure Island Shrimp House, Inc.; and WHEREAS, the original incentive agreement was approved by Resolution No. 05-377. WHEREAS, a letter has been provided by Germer Gertz as noted in Exhibit "A" that they have approved the amendment to the agreement as to legality; and WHEREAS, pursuant to Section 8.19 of the bylaws, the City of Port Arthur Section 4A Economic Development Corporation is submitting this project for approval. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR, TEXAS: Section 1. That the facts and opinions in the preamble are true and correct. z.pr13417 Section 2. That the City of Port Arthur herein approves the amendment to the incentive agreement as noted in Exhibit "B" and herein authorizes the President and Secretary of the City of Port Arthur Section 4A Economic Development Corporation to execute the amendment to the agreement in substantially the same form as attached hereto as Exhibit "B". Section 3. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of , A.D., 2006, at a Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor ' Councilmembers ' NOES: z.pr13417 MAYOR ATTEST: CITY SECRETARY APPROVED AS TO FORM: CITY ATTORNEY APPROVED FOR ADMINISTRATION: CITY MANAGER z .pr13417 EXHIBIT "A" A T 1' O R hi E V ~J'A r L A W KATHLEENA. McGLYNN ASSOCIATE Direct IJne: 409.813.8000 kmcglynn~germef.com February 3, 2006 Via Faesimile No. 1-409-962-4445 Mr. Floyd Batiste Chief Executive Officer City of Port Arthur EDC P.O. Box 3934 Port Arthur, Texas 77642 Re: Pleasure Island Shrimp Hoase, Inc.; GG File//56257 Dear Mr. Batiste: Attached is an amendment to the Economic Incentive Contract and Loan Agreement between the City of Port Arthur Section 4A Economic Development Corporation CPAEDC') and Pleasure Island Shrimp House, Inc. The amendment was approved by the PAEDC Board of Directors on February 1, 2006, by a five to zero vote. The amendment has been approved by Germer Gertz, L.LP. as to its legality. Sincerely, GERMER GERTZ, L.LP. Kathleen A. McGlynr(~'] KAM/lr cc: Jana Barnes Guy N. Goodson (in thefirm) P.O. BOX 4915 · BEAUMONT, TX 77704" PHONE: 409.654.6700 · FAX: 409.835.2115 EXHIBIT "B" D R J~ F T FIRST AMENDMENT TO ECONOMIC INCENTIVE CONTRACT AND LOAN AGREEMENT BETWEEN THE CITY OF PORT ARTHUR ECONOMIC DEVELOPMlgNT CORPORATION PLEASURE ISLA~NrlD SHRIMP HOUSE~ INC. STATE OF TEXAS § COUNTY OF JEFFERSON § WHEREAS, on the 21st day of December 2005, the City of Port Arthur section 4A Economic Development Corporation (PAEDC), a Texas non-profit corporation, and Pleasure Island Shrimp House, Inc. ("Shrimp House") executed an Economic Incentive Contract and Loan Agreement ("Agreement"); WHEREAS, the Agreement provides that PAEDC will hold $500,000 in reserve for Shrimp House until Shrimp House fully performs their obligations pursuant to the Agreement; WHEREAS, in September, 2005, Hurricane Rita damaged Shrimp House's facility to a substantial degree; WHEREAS, Shrimp House's insurance company has lentatively stated that it will pay $1.6 million to Shrimp }louse on it hurricane claim, but which is not expected to be paid in the near future; WHEREAS, Shrimp House used its available assets to repair the Shrimp House facility; WHEREAS, Shrimp House does not have sufficient assets to make all the repairs necessary to bring the facility to the capacity required to meet the demand expected in April, jeopardizing Shrimp House's ability to fully perform its obligations under the Agreement; and WItEREAS, the PAEDC Board, at its Board meeting on January 18, 2005, approved loaning Shrimp House the sum of $500,000. NOW, therefore, the parties hereto agree as follows: Page I of 3 D R A F T 1. PAEDC will provide Shrimp House with a six-month, four-percent interest loan for $500,000.00, as provided in the Commercial Promissory Note contained in Exhibit "A," which is incorporated into the Agreement by reference for all purposes. 2. Based on PAEDC Staff's finding that Tuan Tran's assets are sufficient to pay the $500,000.00 loan in the event that Shrimp House defaults, PAEDC's interest in the loaned monies is secured by the personal guaranty of Tuan Tran, as provided by the Guaranty in Exhibit 3. Conditions Precedent: This contract amendment has no legal consequences, and neither party shall rely on the agreement, unless and until a. The Port Arthur City Council approves the Agreement in its final form, and b. Tuan Tran executes the Personal Guaranty in Exhibit "B'. 4. Breach of this Amendment is a breach of the underlying Agreement. ATTORNEY APPROVALS APPROVED AS TO FORM: Guy Goodson, General Counsel for PAEDC VERIFIED AS CONSISTANT WITH CITY COUNCIL RESOLUTION: Resolution Number: Mark T. Sokolow, City Attorney Pa~e 2 of 3 D R A F T CONTRACT AMENDMENT EXECUTION SIGNED AND AGREED TO on the day of ,2006. CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION By:. Eli Roberts, President Witness By:. Linda Spears, Secretary Witness SIGNED AND AGREED TO on the__dayof ,2006. PLEASURE ISLAND SHRIMP HOUSE, INC. By:. Loc (Victor) Tran Vice President Marketing & Bus. Dev, Witness Pa~e 3 of 3 EXHIBIT "A" DRAFT COMMERCIAL PROMISSORY NOTE Port Arthur, Texas Effective Date: ,2006, Principal Amount: $500,000.00 Term of the Loan: Six months. Payment Schedule: Paid in full, including accrued interest by July 15, 2006. FOR VALUE RECEIVED, the undersigned PLEASURE ISLAND SHRIMP HOUSE, INC. ~reinafter called "Maker") prom sas to pay to the order of CITY OF POR.,T AR, T.H. UR. ETLON 4A ECONOMIC ~)EVELOPMENT CORPORATION, (here n called Lender'), a[ its office at P.O. Box 1089, Port Arthur, Texas 77640-1089, or such other place or places as the holder hereof sha l from time to time designate in written notice to Maker, the rinci le amount, in le al and lawful money of the United States of America, together with ?r~ter~Pst thereon from ge date hereof until maturity at the rate of four percent (4%) per annum as detailed herein. All past due principa and interest sba bear interest from date of maturity until paid ~t thR r2te of fifteen oercent {15%) per annum, or to the maximum extent allowed by law (whichever is greater) as mayhereafler be in effect, payable on demand after matur y. This note is due and payable as follows: Principle and accrued interest no later than July 15, 2006.. Any notices requ red or permitted to be given by the holder hereof to Maker pursuant to the provisions of this note shall be in writing and shall be either personally de vered or transmitted by first class United States mail, addressed to Maker at the address designated below for receipt of notice (or at such other address as Maker may, from t me to time, designate in writing to the holder hereof for receip, t.,of n.o.tices. hereunder) Any such not ce p. ersonally delivered shall be effective as o! me date or delivery, and any not ce transmitted by mail, in accordance with the foregoing provisions, shall be deemed to have been given to and received by Maker as of the date on which such notice was deposited with the United States Postal Service, properly addressed and with postage prepaid. This note is also secured by the personal guaranty of Tuan Tran, executed simultaneously herewith. If any installment or payment of pr ncipal or interest of this note. is not paid w.h, en due or any drawer acceptor, endorser guarantor, surety, accommodation party or omer erson now or hereafter pr mar y or secondar ly liable upon or for payment of all or any Ppart of this note (each hereinafter called an "other liable party") shall die, or become DRAFT insolvent (however such insolven, cy may be evidenced); ,or if an.y p, ro.c,e,eding, pro, ce. du. re or remedy suppementary to or ~n entorcement eT juegmenl snail De resonea to or commenced against Maker or any other liable party, or with respect to any property of any of them; or if any governmental author ty or any coud at the instance thereof shall take possession of any subs. tantial part of the property of or assume control over the affairs or operations of, or a recever shall be appo nted for or take possession of the properly of, or a writ or order of attachment or garnishment shall be issued or made a~ainst any of the property of Maker or any other ab e pady; or if any indebtedness for which Maker or any other abe party s primarily or secondarily liable sba not be paid when due or shall become due and payab e by acceleration of maturity thereof, or if any event or condition shall occur wh ch shall perm t the holder of any such indebtedness to declare it due and payable upon the lapse of time, giv ng of notice or otherwise or if Maker or any other liable party (if other than a natural person) sba be dissolved, wound up, liquidated or otherwise terminated, or a party to any merger or conso darien without the written consent of Lender;, or if Maker or any other liable pady shall se~l substantially all or an integral portion of its assets without the written consent of Lender; or if Maker or any other liable pady fails to furnish financial nformation requested by Lender; or if Maker or any other liable pady furnishes or has furnished any financial or other information or statements which are mis eading in any respect or if a default occurs under any instrument now or hereafter executed ~n connect on with or as security for this note or any event occurs or cond!tion exists which causes Lender to in good faith deem itself insecure or in good faith beI~eve the prospect of payment or performance by Maker or any other liable pady under this note, under any instrument or agreement executed in connection with or as secudty for this note, or under any other ndebtedness of Maker or any other liable party to Lender is impaired; thereupon at the option of Lender, the principal balance and accrued interest of this note and any and all other ndebtedness of Maker to Lender shall become and be due and payable forthwith without demand, notice of default, not ce of acceleration, notice of intent to accelerate the maturity hereof, notice of nonpayment, presentment, protest or notice of dishonor a of whch are hereby expressly waived by Maker and each other liable party. Lender may wave any default without waving any prior or subsequent default. If th s note is not pa d at maturity whether by accelerafion or otherwise, and is p aced in the hands of any attorney for collection, or su t s fi ed hereon, or proceedings are had in probate, bankruptcy, recevership, reorganization, arrangement or other legal d~n, s for collection hereof, Maker and each other liable party agree to pay Lender ~t~°~oel~;ctiogn costs, including coud costs and a reasonable amount for attorney's fees. It 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, notwithstand ng anything to the contrary herein or in any agreement entered into in connecto,n with or as security for this note, it is agreed as follows: (i) the aggregate of all consideration which constitutes interest under applicable law that is taken, reserved, contracted for charged or received under this note or under any of the other aforesaid agreements or otherwise in connection with this note shall under no circumstances exceed the maximum amount of nterest allowed by alpPlicable law, and any excess shall be credited on th s note by the ho der hereof (or, ifth~s note shall have been paid in full, refunded to Maker); (ii) in the event that maturity of this note is accelerated by reason of an electon by the holder hereof resultin~ from any default hereunder or otherwise or n the event of any requ red or permitted prepayment, then such consideration that consttutes nterest ma)/ never inctude more than the maximum amount allowed by applicable law and ,excess nterest, f any, provided for in this note or otherwise shall be canceled automabcally as of the date of such acceleration or prepayment and, if theretofore prepaid, shall be credited on this note (or if this no!e shall have been paid in fu , refunded to Maker); and Oil) all calculations of the rate of ~nterest taken, reserved, contracted for, charged or received under this note or under any of the DRAFT other aforesaid agreements or otherwise in connection with this note, that are made for the purpose of determ n ng whether such rate exceeds the .m, aximum lawful rate .shall be made, to the extent permitted by applicable law, by amodiz~ng,prorating, allocating, and spreading such interest over the entire term of the loan evidenced by this note(including all renewal and extended terms). Maker may prepay all or any part of the principal of this note before matudty without penatty. No padial prepayment shal/reduce, postpone or delay the obligation of Maker to continue pay ng the nstallments herein prowded on their respective due dates following any such padia| prepayment until this note is ful y pa d. The Maker and each other liable pady are and shall be directly and primarily, jointly and severally, liable for the payment of al/sums called for hereunder;, and, except for notices specifica y required to be given by the holder hereof to Maker pursuant to the earlier provisions of th~s note, Maker and each other liable party her.e, by expressly waive demand, presentment for payment, notice of nonpayment, protest, not~ce of protest, notice of intention to accelerate matur ty, notice of acceleration of maturity, and all other notice, fi ng of su t and diligence n co ect ng th s note or enforcing or handling any of the securib/ therefor, and do hereby agree to any substitution, exchange or release, in whole or in par[, of any security here-for or the release of any other liable pady, and do hereby consent to any and a renewals or extensions from time to time, of this note or anypart hereof, either before or after maturity, all without any notice thereof to any of them andwithout affecting. or re eas ng the liability of any of them. Each other liable party does further agree that it will not be necessary for the holder hereof, n order to enforce payment of th~s note by such other I ab e party to first institute suit or exhaust its remedies against Maker or any other liable party or to enforce its r ghts against any secur ty therefor, PLEASURE ISLAND SHRIMP HOUSE, INC., "Maker" By: Loc (Victor) Tran, Vice President of Marketing and Business Development DRAFT ACKNOWLEGEMENT THE STATE OF TEXAS * COUNTY OF JEFFERSON * BEFORE ME, THE UNDERSIGNED Notary 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, STA'fE OF TEXAS MAKER'S ADDRESS FOR RECEIPT OF NOTICE: PLEASURE ISLAND SHRIMP HOUSE, INC. 3931 South M.L.K. Drive Port Arthur, Texas 77642 EXHIBIT "B" DRAFT TUAN TRAN GUARANTY AGREEMENT THIS GUARANTY AGILEEMENT, dated as of , 2006 (the "Guaranty"), is made between The City of Port Arthur Section 4A Economic Development Corporation (the "PAEDC"), a corporation validly existing under its Charier and the constilution and laws of the State of Texas, and Tuan Tran (the "Guarantor"), a natural person residing in California. Capitalized terms used in this Guaranty and not defined otherwise are used herein as defined in the Economic Incentive Contract and Loan Agreement, dated December 5, 2005 (the "Agreement"), and the Amendment to the Agreement, dated , 2006 (the "Amendment") between the PAEDC, as grantor, and Pleasure Island Shrimp House, Inc.., a Texas corporation, as grantee (the "Grantee"). Those definitions are incorporated in this Guaranty by reference. WITNESSETH THAT: WttEREAS, A. Upon the terms and conditions set forth in the Amendment, the PAEDC is willing to loan the Grantee the sum of F1VE HUNDRED THOUSAND AND NO/100 DOLLARS ($500,000.00) to enable the Grantee to repair the damage to its Port Arthur, Texas, facility, said damage from Hurricane R/tn, which hit the area in September 2005. B. In order to enhance the security of the PAEDC that the benefits under the Amendment will inure to the benefit of the residents of Port Arthur, Texas, the Guarantor is willing, in this Guaranty, lo guaranty the obligations of the Grantee under the Amendment. C. The PAEDC and the Guarantor each have full right and lawful authority to enter into this Guaranty and to perform and observe the provisions hereof on their respective parts to be performed and observed. NOW, THEREFORE, in consideration of the premis_es and repres, enta.'don.s .anti agreements hereinafter contained and subject to the terms hereof, and 1hr other goo(l ann vamame consideration, the receipt of which is acknowledged hereby, the Guarantor agrees with the PAEDC as follows: ARTICLE I. REPRESENTATIONS AND WARRANTIES OF THE GUARANTOR Section 1.1. The Guarantor represents and warrants as follows: (a) ttis current asset and liability position is the same or better as the position represented to the PAEDC with the balance sheet for the year ending December 31, 2004, prepared by Hansen & Associates, (b) The sigrfing, delivery, observance and performance by the Guarantor of this Guaranty and the Guarantor's covenants, agreements and obligations hereunder do not, and will not, (i) violate any law now existing, or (ii) contravene or constitute a default under any agreement, indenture, trust agreement or understanding to which the Guarantor is a party or by which it or its property may be bound. I ~420506 ARTICLE II. COVENANTS AND GUARANTEES Section 2.1. The Guaranlor hereby absolutdy and unconditionally guarantees to 'the PAEDC at any time: (a) the full and prompt performance of all covenants, agreements and obligations of the Grantee under the Amendment, and (b) the payment of all principal, interest and other sums due, whether by acceleration or othe~vise, together with all late charges, disbursements, expenses, and deficiencies pursuant to that certain Commercial Promissory Note made by the Grantee to the PAEDC as of even date herewith (collectively the "Guaranteed Debt") together with the performance of Grantee's obligations under any documents or instruments executed in connection with or given to secure the Guaranteed Debt, and (c) the full and prompt payment of all expenses and charges, including without limitation, to the extent permitted by law, reasonable attorneys' fees and expenses, paid or incurred by the PAEDC acting as Grantor under the Amendment and in realizing any of the payments guaranteed hereby or in enforcing this Guaranty. The Guarantor will pay all payments in lawful money of the United States of America. Each default in payment of any amount payable hereunder shall give rise to a separate cause of actlon hereunder, and separate suits may be brought hereunder as each cause of action arises. Section 2.2. The Guarantor's covenants, agreements and obligations under this Guaranty are absolute and unconditional, are a present, and shall be a continuing, guaranty of performance and payment and not collect~ility, and shall r~nain in full force and effect until all covenants, agreements and obligations of the Grantee under the Amendment have been performed or met, and all other amounts payable hereunder shall have been paid or provision shall have been made therefor to the satisfaction of the PAEDC, regardless of the legality, validity, regularity or enforceability of the Amendment or any other document. The obligations of the Guarantor described in the preceding paragraph shall not be amended, modified or impaired upon the happening of any event, including without limitation, any of the following, regardless of whether there ~s notice to or consent of the Guarantor with respect thereto: (a) the compromise, settlement, release or lermination of any or all of the covenants, agreements or obligations of the PAEDC under the Amendment; Co) the failure to give notice to the Guarantor of the occurrence of a default under this Guaranty or an Event of Default under the Amendment, except as provided specifically in this Guaranty; (c) the waiver of the payment, observance or performance by the PAEDC or the Guarantor of any of their covenants, agreements or obligations under this Guaranty or the Amendment; Page 2 of 7 (d) the extension of the time for observance or performance of any covenant, agreement or obligation under this Guaranty or the ,a~nendment, or the extension or the renewal of any extension; (e) the modification or amendment of any covenant, agreement or obligation under the Amendment; (f) the caking or the om/ssion of any action under this Guaranty or the Amendment; (g) any failure, omission or delay on the part of the PAEDC to enforce, assert or exercise any right, power or remedy conferred on the PAEDC under this Guaranty or the Amendment, or any act or omission on the part of the PAEDC at any time; (h) the occurrence of any of the following: (i) the admission by the Guarantor in writing of its inability to pay its debts generally as they become due, (ii) the entering of an order for relief in any case commenced by or against the Guarantor (except cases commenced by the Guarantor against third parties) under federal bankruptcy law, as in effect from time to time, (iii) a general assignment by the Guarantor for the benefit of creditors, or (iv) the appointment of a receiver for the Guarantor or for the whole or any substantial part of its property; (j) to the extent permitted by law, the release or discharge by operation of law of the Guarantor from the observance or performance of any covenant, agreement or obligation under this Guaranty or any other agreement, contract or other instrument or document to which it is a party or by wh/ch it or its property is or may be bound; (k) the default or failure of the Guarantor to observe or perform fully any of its covenants, agreements or obligations under this Guaranty or any other agreement, contract or other instrument or document to which it is a party or by which it or its property is or may be bound; (1) the default of the PAEDC under the Amendment; or (m) to the extent permitted by law, the invalidity of the Amendment, this Guaranty, any agreement, contract or other instrument or document to which the Guarantor is a party or by which it or its property is or may be bound. Section 2.3. No setoff, counterclaim, reduction, or diminution of any covenant, agreement or obligation, or any defense of any kind, which the Guarantor has or may have against the PAEDC or the Grantee, shall be available hereunder to the Guarantor against the PAEDC; provided, however, that the Guarantor shall be entitled to assert in a timely manner in a separate action against the PAEDC or the Grantee, as the case may be, any rights that could not be asserted, by virtue of this Section 2.3, by the Guarantor as a setoff, counterclaim, reduction, diminution or defense in the action on this Guaranty. The Guarantor shall not exercise any right of subrogation under this Guaranty until its obligations hereunder have been discharged in full, and such obligations shall not be discharged by virtue of any impairment of such rights of subrogation. Page 3 of 7 Section 2.4. If there is a default by the Grantee under the Amendment oF the Commercial Promissory Note made by the Grantee thereunder, the PA£DC is not obligated to proceed first a~alnst the Grantee and exhaust its remedies against the Grantee and its security or other rights in the collmeral of the Grantee, prior to resorting to any remedy of the PAEDC as to the Guarantor; If Guarantor finds that further action against Grantee is futile, Guarantor may request in writing that PAEDC halt executing remedies against Grantee, afier which PAEDC may proceed with remedies against Guarantor. Section 2.5. The Guarantor covenants and agrees to pay all reasonable costs, expenses and fees (including without limitation, to the extent permitted by law, all court costs and attomeys' fees) that may be incurred by the PAEDC in enforcing or attempting to enforce this Guaranty, whether by suit or otherwise, following any default on the part of the Guarantor under this Guaranty. Section 2.6. (a) The failure of the Guarantor to abide by or to observe or perform any covenant, agreement or obligation hereunder, or any inaccuracy in any material adverse respect of, or any material adverse omission from, any representation or warranty herein, shall constitute a default hereunder. Co) The occurrence of any of the following shall also constitute a default hereunder:. (i) the admission by the Guarantor in writing of its inability to pay its debts generally as they become due; (ii) the entering of an order for relief in any case commenced by or against the Guarantor (except any case commenced by the Guarantor against a third party) under federal bankruptcy law, as in effect fi.om time to time; (iii) a general assignment by the Guarantor for the benefit of creditors; (iv) the appointment of a receiver for the Guarantor or for the whole or any substantial part of its property; or The declaration of a default hereunder and the exercise of remedies upon the declaration shall be subject to any applicable limitations of federal bankruptcy law affecting or precluding the declaration or exercise during the pendency of or immediately following any bankruptcy, liquidation or reorganization proceedings. (c) If the default hereunder shall consist of the breach of any of the covenants, agreements or obligations of the Guarantor under Section 2.1, or if any default shall occur under Section 2.6(b), upon written demand by the PAEDC, the Guarantor shall (i) cause any such covenant, agreement or obligation to be performed or met and (ii) pay forthwith, or make provision for payment, to the PAEDC without further demand or notice and regardless of whether there has been any other default or event of default under the Amendment, the amount due and payable under the Amendment and the Guaranty. In the event that the Guarantor shall be required to make payment to the PAEDC as described in the preceding paragraph, in addition to that payment, the Guarantor shall (i) cause any such covenant, agreement or obligation to be performed or met and (ii) pay to the PA£DC any further amount that is necessary to cover (i) the reasonable costs Page 4 of 7 and expenses of collection, including reasonable compensation to the PAEDC, its agents and, to the exwnt pennitlert by ]aw, the PAEDC's allorneys and counsel, and (ii) any reasonable expenses or liabilities incurred by the PAEDC hereunder. (d) In the case of a default hereunder, other than under Sections 2.1 and 2.60O), the PAEDC upon obtaining knowledge of such default shall promptly g/ye the Guaranlor wrltlen notice of the default at the Guarantor's Notice Address, by registered or certified mail, postage prepaid, return ~eceipt requested, and if the default continu, e~ unrernedied for 30 days following the gixing of the notice, the PAEDC shall have tiae rights, remedies and powers, and the Guarantor shall make the payments, described in Section 2.6(c); provided, however, that if the default (other than a default under Sections 2.1 or 2.60o)) can be remedied but not within that period, that failure shall not constitute a default, so long as the Guarantor is taking appropriate corrective action as permitted under the Amendment. Section 2.7. Rights, remedies and powers under this Guaranty may be exercised, either separately or cumulatively, in the event of one or more defaults under this Guaranty. ARTICLE III. NOTICE AND SERVICE OF PROCESS, PLEADINGS AND OTHER PAPERS Section 3.1. The Guarantor covenants and agrees that he is purposefully contracting with a corporation in the State of Texas and he is subject to service of process in the State of Texas, and that it will remain so subject to that service of process so long as the Amendment remains in full force and elTect or any obligatlons of the Grantee remain outstanding thereunder. If the Guarantor should not he subject to that service of process for any reason, it designates and appoints as the Guarantor's agent, without power of revocation, (a) Loc (Viclor) Tran, Pleasure Island Shrimp House, Inc., 3931 South M.L.IC Drive, Port Arthur, Texas 77642, or (b) if that agent shall cease to act, Carl Parker, Parker Law Firm, 1 Plaza Square, Port Arthur, Texas, 77640 upon whom shall be served all process, pleadings, notices or other papers that may be served upon the Guarantor as a result of any o fits covenants, agreements and obligations under this Guaranty. Section 3.2. Any process, pleadings, notices or other papers served upon any agent appointed in the preceding Section shall be sent at the same time by registered or certified mail, postage prepaid, to the Guarantor's Notice Address and to any other addresses that may be furnished by the Guarantor to the PAEDC in writing fi.om time to time. ARTICLE IV. MISCELLANEOUS Section 4.1. The covenants, agreements and obligations of the Guarantor hereunder shall arise absolutely and unconditionally when the Amendment becomes effective. Section 4.2. No remedy, right or power conferred herein upon or reserved hereunder to the PAEDC is intended to be exclusive of any other available remedy, right or power, but each remedy, right and power shall be cumulative and shall be in addition to every other remedy, right and power under the Amendment or any other document entered into in connection with the Amendment or existing at law, in equity orby statute or otherwise from time to time. Page 5 of 7 No delay in exercising, or omission to exercise, any remedy, right.or power upon any default, omission or failure of observance or performance hereunder shall impair any remedy, right or power or shall be construed to be a waiver thereof, but any remedy, right and power may be exercise, d whenever and as often as may be deemed expedient. To entitle the PAEDC to exercise any remedy, fight or power reserved to it under this Guaranty, it shall not be necessary for the PAEDC to give any notice, other than any notice that may be expressly required herein. In the event any provision contained in this Guaranty shall be breached by any p.arty and the breach shall be duly waived thereafter by the other party so empowered to act, the wmver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder. No waiver, amendment, modification or release of this Guaranty shall be established by conduct, custom or course of dealing, but any amendment, modification or release shall be made solely by an instrament or document in writing duly s~gned by the parties hereto who have been duly authorized by this Guaranty so to amend this Guaranty. Section 4.3. This Guaranty may be amended and supplemented, to 'the same extent and upon the same conditions that the Agreement may be further amended and supplemented, by a written agreement signed by the parties hereto. The purposes for which an amendment of or supplement to this Guaranty may be made pursuant to this Section include, without limitation, the addition of, or subslitution for the Guarantor as guarantor hereunder of, any Person that succeeds to or assumes, as the case may be, the Guarantor's covenants, agreements and obligations hereunder. Section 4.4. This Guaranty shall inure to the benefit of the PAEDC and its respective successors and assigns and is binding upon the PAEDC and the Guarantor and his heirs and assigns. Section 4.5. This Guaranty constitutes the entire a~eement, and supersedes all prior agreements and understandings, both written and oral, between the Guarantor and the PAEDC with respect to the subject matter hereof. This Guaranty may be signed simultaneously in several counterparts, each of which shall be deemed to constitute an original, but all of which together shall constitute but one and the same instrument. It shall not be necessary in proving this Guaranty to produce or account for more than one of those counterparts. Section4.6. The invalidity or unenforceability of any one or more phrases, sentences, clauses or sections contained in this Guaranty shall not affect the validity or enforceability of the remaining phrases, sentences, clauses and sections hereof. Section 4.7. This Guaranty shall be governed by and construed in accordance with the laws of the State of Texas. Section 4.8. All representations and warranties herein shall survive the signing and delivery hereof. IN WITNESS WI~E.REOF, this Guaranty has been duly signed and delivered for and in the name and on behalf of the Guarantor and the PAEDC by their duly authorized officers or representatives, as of the date first above written. Page 6 of 7 EXECUTED BY Tuan Tran Date: STATE OF TEXAS ) ) SS: COUNTY OF JEFFERSON .) On this day of ,2006, before me, a Notary Public in and for said County and State, personally appeared Tuan Tran, who acknowledged that he did sign the foregoing instrument and that the same is his free act and deed. IN W1TNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day and year aforesaid. (SEAL) Notary Public, State of Texas ACCEPTED BY CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION By: Eli Roberts, President Date: STATE OF TEXAS ) ) SS: COUNTY OF JEFFERSON _) On this day of ,2006, before me, a Notary Public in and for said County and State, personally appeared Eli Roberts, President of the PAEDC, who acknowledged that, with due authorization, he did sign the foregoing instrument on behalf of the PAEDC and that the same is his free act and deed individually as such office~ and the free act and deed of the PAEDC. 1N WITNESS WHEREOF, 1 have hereunto subscribed my name and affixed my official seal on the day and year aforesaid. (SEAL) Notary Public, State of Texas Page 7 of 7