The URL can be used to link to this page

Home My WebLink AboutPR 13489: 3D ARCHITECH. METALS P. R. No. 13489 03/10/O6 gt REgOLUTION NO. A RESOLUTION AUTHORIZIN~ THE PRESIDENT AND SECRETARY OF THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION TO EXEcuwE AN INCENTIVE A~REEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION AND 3D A~CEITECTUP-AL METALS SALES, INC. WHEREAS, as noted in Exhibit 'A", the Board of Directors of the City of Port Arthur Section 4A Economic Development Corporation is reviewing an updated incentive agreement to be entered into with 3 D Architectural Metals Sales, Inc.; and WHEREAS, an executive summary has been provided by Germer Gertz as noted in Exhibit "A", which delineates the changes from the agreement approved by Resolution No. 06-039; 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 RESOL¥~'~ BY TEE CITY COUNCIL OF TEE CITY OF PORT ARTHur, TEXAS= Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That the City of Port Arthur herein approves 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 agreement in substantially the same form as attached hereto as Exhibit "B". Section 3. That Resolution No. 06-039 is herein repealed. Section 4. That a copy of the caption of this Resolution be spread upon the Minutes of the City Council. z. PR13489 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: MAYOR ATTEST: CITY SECRETARY APPROVED AS TO FORM: ~ CONFIDENTIAL MEMO CITY ATTORNEY APPROVED FOR ADMINISTRATION: CITY MANAGER z.pR13489 EXHIBIT "A" ~"~'~ AUSTIN BEAUMONT HOUSTON GERME GERTZ L'L'I- 'A T T O , N Y ',~...:~A TL A W KATHLEEN A. McGLYNN ASSOCIATE Direct Line: 409,813.8000 kmcglynn~germer, com March 10, 2006 Via Facsimile 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: Modifications 3D Architectural Metal Sales, Inc.; GG File #56257 Dear Mr. Batiste: Attached is the modified Executive Summary and Contract for the City of Port Arthur Section 4A Economic Development Corporation's ("PAEDC's") contract with 3D Architectural Metal Sales., Inc. ("3D"). Both the PAEDC Board of Directors and the City Council approved the original contract; however, before executing the contract Mr. Richard Daley of 3D requested a change. Mr. Daley requests more flexibility in the assets he is allowed to purchase with PAEDC funds. The original contract limited the assets that could be purchased with PAEDC funds to equipment and machinery. The modified contract allows 3D to use PAEDC funds for equipment, machinery, real property improvements, and working capital. To protect PAEDC's security interest position, a limitation has been added to the contract; PAEDC will not release grant and loan funds in excess of the value of the property used as collateral. As you know, the Deed of Trust on the property used for collateral is the first priority, senior lien. The contract revisions have been approved by Germer Gertz, L.L.P. as to legality and the project is still an eligible Section 4A project. Sincerely, GERMER GERTZ, L.L.P. Kathleen A. McGlynn Q~J KAM/Ir ce: Jana Barnes Guy N. Goodson (in thefirrn) P.O. BOX 4915 · BEAUMONT, TX 77704 * PHONE: 409.654.6700 · FAX: 409.835.2115 4~4762 ECONOMIC INCENTIVE CONTRACT & LOAN AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION & 3D ARCHITECTURAL METAL SALES, INC. Executive Summary 3D Architectural Metal Sales~ Inc. ("3D") is a Texas corporation, doing business in Port Arthur, Texas. 3D will manufacture small- to medium-sized metal buildings and sell the majority of its product outside the Port Arthur area~ Current market demand for the product is such that 3D plans to initiate and expand operation of its facility in Port Arthur. The City of Port Arthur Section 4A Economic Development Corporation ("PAEDC") will assist 3D in this business endeavor by providing conditional grant and loan funds in exchange for the promise of fulltime permanent jobs. The City of Port Arthur Section 4A Economic Development Corporation ("PAEDC") is conditionally qrantin¢l 3D the sum of ~;112,000. if 3D breaches this Agreement then the PAEDC qrant, minus any credits earned, will automatically convert to a loan (liquidated damages), to be paid back over three years at ten percent interest. Additionally, PAEDC will loan 3D the sum $103,000, to be paid back over seven years at four percenl; interest, with the first of the 84 payments due one year after the Agreement is executed. However, in no case will PAEDC grant and loan 3D funds In excess of the value of the real property used as collateral. In return for the PAEDC incentives, 3D agrees to hire ten (10) emolovees with an annual total payroll of $180,000 within five (5) years, as measured by forms W-2 and W-3. Fifty (50) pement of the employees must be Port Arthur residents. Additionally, Richard and Jeanette Daley, 3D's owners, will execute a superior Deed of Trust (mortgage) for the property located on Highway 365 in Port Arthur, Texas. 3D may eam credits to reduce the duration of this Agreement or to reduce liquidated damages in the event of a breach. Starting on the effective date of the Agreement, 3D will receive a $1.00 credit for each $4.00 of payroll paid to residents of Port Arthur. To avoid surprises, 3D agrees to send PAEDC brief status reports, every three (3) months for the first year and every six months thereafter, until issuance of a close out report. 3D will forfeit its credits for any reporting period for which it did not issue a report in a timely manner. EXHIBIT "B" ECONOMIC INCENTIVE & LOAN AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION AND 3D ARCHITECTURAL METAL SALES, INC. INTRODUCTION ................................................................................................................................. ' ] - AGREEMENT DATES .......................................................................................................................... - ! ' PARTIES ................................................................................................................................................. - ! - PROMISED PERFORMANCE ................................................................................................ - 2 - (AI PERFORMANCE BY PAEDC ....................................................................................................... - ~Z ~ (B) PERFORMANCE BY 3D ............................................................................................................... - 2 - (C) 3D CREDITS -- SUI~STITUTE PERFORMANCE ............................................................................ - 3 - 3D'S PERFORMANCE MILESTONE SCHEDULE ......................................................................... -3 - PAEDC'S CONDITIONAL OBLIGATIONS AND LIMITED LIABILITY ........................................ - 5 - LIQUIDATED DAMAGES FOR BREACH OF AGREEMENT BY 3D ........................................... 5 - RECORDS / INSPECTION I PAEDC AUDIT .................................................................................... - 6 - HOLD HARMLESS ............................................................................................................................... ' ? ' SUBCONTRACTS ................................................................................................................................. ' ? ' CONFLICT OF INTEREST / DISCLOSURE OBLIGATION ........................................................... - 8 - NONDISCRIMINATION I EMPLOYMENT I REPORTING ............................................................. - $ - LEGAL AUTHORITY ........................................................................................................................... - 9 - NOTICE OF LEGAL OR REGULATORY CLAIMS AGAINST 3D ................................................ - 9 - CHANGES AND AMENDMENTS ...................................................................................................... - 9 - DEFAULT I TERMINATION .............................................................................................................. * 10 - 3D AUDITS ........................................................................................................................................... ~ I] - ENVIRONMENTAL CLEARANCE REQUIREMENTS .................................................................. - 12 - ORAL AND WRITTEN AGREEMENTS I PRIOR AGREEMENTS ............................................. - 12 - VENUE .................................................................................................................................................. - I;Z - ADDRESS OF NOTICE AND COMMUNICATIONS ..................................................................... - ]2 - CAPTIONS .......................................................................................................................................... - ]3 - COMPLIANCE WITH FEDERAL, STATE AND LOCAL LAWS ................................................. - 13 - CONDITIONS PRECEDENT ............................................................................................................. 13 - ATTORNEY APPROVALS ................................................................................................................ - ]3 - AGREEMENT EXECUTION .............................................................................................................. - 14- Exhibit "Al" Commemial Promissory Note for Loan Exhibit "A2" Commercial Promissory Note for Conditional Grant Exhibit "B" ~sset List .............. . {_Deleted*. Equipment Exhibit "C" Deed of Trust Exhibit "D" Certification Regarding Lobbying ECONOMIC INCENTIVE CONTRACT & LOAN AGREEMENT BETWEEN THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION AND 3D ARCHITECTURAL METAL SALES, INC. INTRODUCTION 3D Amhitectural Metal Sales, Inc. ("3D") is a Texas corporation, doing business in Port Arthur, Texas. 3D will manufacture small- to medium-sized metal buildings and sells the majority of its product outside the Port Arthur area. Current market demand for the product is such that 3D plans to initiate and expand operation of its facility in Port Arthur. The City of Port Arthur Section 4A Economic Development Corporation ("PAEDC") will assist 3D in this business endeavor by providing conditional grant and loan funds in exchange for the promise of futltime permanent jobs. AGREEMENT DATES AGREEMENT START DATE 1. Th s Economic Incent ve Contract and Loan Agreement ( Agreement ) is entere than a 15, 2006, ~Oelat.d:April into with an effective date of ,2006, but in no case later .M y ...... by and between the PAEDC and 3D, AGREEMENT END DATE 2. This Agreement expires the eadier of April 15, 2011, or 30 days after 3D either performs fully or breaches the Agreement, subject to earlier termination or extension, voluntary or involuntary, as provided herein. The period from the effective date of this Agreement through and including the expiration date of this Agreement as provided in the previous sentence hereof, is sometimes referred to in this Agreement as the "Term" of this Agreement. PARTIES 3. City of Port ,Arthur Section 4A Economic Development Corporation ("PAEDC"), located at 4173-39~n Street, Port Arthur, Texas, 77642, is a corporation. It is duly authorized to do business in the State of Texas under Section 4A, Article 5190.6 V,T.C.A. (the Development Corporation Act of 1979) and duly authorized by Resolution of the City Council of the City of Port Arthur to enter into this Agreement. So authorized and as provided by the PAEDC bylaws, the President and Secretary of the PAEDC Board have the authority to execute this Agreement. 4. 3D Architectural Metal Sales, Inc, (~3D") is a Texas corporation. The registered agent in Texas for 3D is Jeanette Daley at 2322 Knickerbocker Ln., Nederland, Texas 77627, [ Deleted: PROMISED PERFORMANCE 5. The parties agree to perform as follows. (a) PERFORMANCE BY PAEDC (1) PAEDC shall loan 3D the amount of ~;I03,000.00, according to the terms in the Commercial Promissory Note contained in Exhibit "Al', with material terms being four percent (4%) interest for a term of seven (7) years, (2) PAEDC shall conditionally qrant 3D up to ~112,000.00, subject to the conditions and limitations herein, which 3D is not required to pay back unless 3D breaches this Agreement. If 3D breaches this Incentive Agreement then the grant will become a loan as provided in Exhibit (3) PAEDC will use its best efforts to pay invoices, or reimburse 3D for its payments, for the equipment, machinery, real estate improvements and working capital, hereinunder "ssseta", listed in Exhibit "B", within forty-five (45) days of receipt. HOWEVER, PAEDC will only release funds up to the value of the property to which PAEDC holds the superior Deed of Trust~ Initially, PAEDC will only release up to $115,959.00, based on the Jefferson County Appraisal District's public information on assessed value. As 3D makes improvements to the property and can demonetrata increased property value, to the satisfaction of PAEDC Staff, PAEDC will release more funds. These payments are PAEDC's only obligations. (b) PERFORMANCE BY 3D (1) By the end of the Agreement term, 3D promises to employ ten (10~ employees at an annual total payroll of ~;180,000,~ as measured by Internal Revenue Service (IRS) forms W-2 and W-3. (2) 3D promises that at least fifty percent (50%) of its employees will be Port Arthur residents. (3) Contemporaneously with PAEDC's loan to 3D, Richard and Jeanette Daley, owners of 100 percent of 3D's shares, will execute a superior Deed of Trust for Lot 1 and the northeast 80 feet (of 100 feet) of Lot 2, Block 11 of the Montrose No. 2, on HWY 365 in Port A~chur, Texas. The Deed of Trust is contained in Exhibit "C". i Payroll is b~cd on 2000 hou~ pr year and a slatting wag, c of $9.00 per hour, per 3D's application, (4) 3D sha use the Grant monies provided by the PAEDC exclusively for ,the . {'Deiced: machlna'v ~ ~uiomenl assets that ,are not materially different2 from the list,,of.,a, ssets provided I~o' P-'"~"~C by 3~i ~; ~13~' Of Whic~'i~'~,~(~'~ ~]~"~' ' ~N~{h ~ch i~V~iC~ * L~d: or request for reimbumement sent to PAEDC, 3D will include a ~py of the Exhibit"B" st with the s~cific~t h.~gh~ghted. ~iswil!.ePabl~PAEDCto veri~ compliance with the list in Exhibit "B" (5) On demand by PAEDC and in response to 3D's failure to achieve a pe~ormance milestone, 3D shall provide PAEDC with reasonable assuran~s, pro~sed by 3D and reasonably acceptable to PAEDC, that it has ~th the intention and the ~pabilities to pe~orm fully its contractual obligations, (C) 3D CREDITS-- SUBSTITU~ PERFOR~NCE 3D may earn credits according to the following te~s, to either reduce the duration of this Agreement or r~uce the amount of liquidated damages in the event 3D broaches the Agreement. (1) StaKing on the eff~tive date of the Agreement and for as long as 3D pe~o~s as specified in 5(b)(1), 3D will receive a $1.00 cred~ for each $4,00 of payroll paid to res dents of E~ Adhur. Payroll to non-residents ~nnot be credited. (2) Total credit ~nnot exceed $112,000. (3)3D will fo~eit any credits it earned during a period for which a repo~ is scheduled but 3D fails to issue it. (4) Once 3D has earned credits equal to $112,000, this Agreement and the Te~ ther~f shall te~inate pursuant to Section 2 hereinabove; however, the contem~mneous Note (Exhibit "Al") and superior Deed of Trust (ExhibE "C") shall remain in effect until the Note is paid in full. 3D'S PERFORMANCE MILESTONE SCHEDULE 6. Although failure to achieve a pe~ormance milestone is not a breach of contm~, a ~ilure is grounds for PAEDC to withhold fuAher payments to 3D and/or demand reasonable assuran~s3 from 3D that it can and will fully pefiorm ~s contractual obligations, Failure to provide such reasonable assuran~s following demand of PAEDC is a brea~ of contract. 7. 3D's pe~ormance milestones are contained in the table on the following page. "Matarially different" is defined as a change n the type of,asset ~h~. ~ges the overall business pl~B !n . { Deleted; equipment '~dlleJ1 ~) ~)[ace at the time that this contrac~ was executed. Examples cf reasonable assurances are copies of pending contracts and customer commitment letters. 3D'S PERFORMAN, CE MILE~T~}~.SC~I)UL.~ ~ perod from the effe~e date of this Agreement to March 31, 2006. Achieve ~dormance of I full-time, ~rmanent employee; (b) ~. June 30, 2006 Annualized payroll of $18,000. (c)~ Juy3~2006 Status~po~for~rill 20~toJune30 2006 .......... (e)l ~ Feb 28, 2007 ~ ~tatus m~ for Janua~ 1, 2006 to December 31, 20~. (~ Apr 1. 2007 ~ Achieve pedo~ance of 2 full-time, permanent employees; ' Annualized paym of $36,000. (g)~ ~July 3~, 2007 ~ Status mpoR[~{.Jap~E.!, ~O~)~.~g~e.3~,.~7 ....... (h) Feb 2~2008 Status m~o~ for Jan I 2007 to December ~l 2007 (i) Apr. 1, 2008 ~; Achieve pe~orman~ of 4 full-time, ~rmanent employees; ' ~Annuatized payroll of $72,000. atusre o~forJan 1,2008toD~ember31 2008 Dele~:5 : k Feb 2~2009 St R . : ...... ~ (I) Apr. 1, 2009 ~ Achieve pe¢ormance of 6 full-time, permanent employees; ~ ~ Annua zed payroll of $108 000. /~i~].~ug~ 2009 ~atusre~o~forJan 1 2009to June30 2009. (n) Feb. 28,2010 Status repoR for Jan. I 2009 to De~mber 31 200~. .. (o) ~ Apr. ~, 20~ 0 Achieve pe~omance ~f ~ full-time, permanent employees; ~ ~ Annualized payroll of $1~,000. (r) Apr. ~, 2011 Achieve pe~o~ance of ~0 full-time, permanent employees; ~ Annualized payroll of $1 ~0,000. (s) ~ Apr. ~5, 20~ ~6 Close out ~o~ for presentation to the PAEDC Board at its Feb~a~ 201 meeting. ~ Status reno,s shall include ~p~s of invoi~s and che~ payments ~3sse~ pum~as~ ~b ~ . { Del.~d: ~i~ ~ ~ulp~t ~ funds dun~ the reposing ~nod, quavery balance sheets, quaAeriy pm~t and loss s~tements and I , ~r thi~y (30) ~ ~ff~'~ f~iJ~ ~r~s, The EDC ~a~ ~iil de{~ne ~ pe~o~ i~'compi~te. 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 arc not available to make payments under this Agrcement, the PAEDC shall notify 3D 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 fudher 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 3D or to any third parties for failure to make payments to 3D under the terms and conditions of this Agreement. 9. The PAEDC shati not be liable, in Agreement or otherwise, to 3D, or to any person or entity claiming by or through 3D, for any expense, expenditure or cost incurred by or on behalf of 3D related to the project made the basis of this Agreement. The PAEDC's sole liability/obligations, if any, shall be to 3D and shall be limited to the conditional funding obligations detailed in this Agreement. 10. 3D 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 behalf of 3D, which application is incorporated herein for all purposes. 11. Funds granted by the PAEDC hereunder shall not be utilized by 3D for rcpayment of costs, expenditures or expenses incurred prior to the date of this Agreement. LI(~UIDATED DAMAGES FOR BREACH OF AGREEMENT BY 3D 12. in the event 3D fa[is to perform its obligations under this Agreement, following notice thereof from PAEDC and thirty-day (30-day) opportunity to curc the same, the PAEDC ,qrant, minus any credits earned, will automatically convert to a loan (liquidated damages), effective on the day of breach, as agreed by 3D in the executed Commercial Promissory Note contained in Exhibit 'A2.~ Following such conversion to a loan as aforesaid, the PAEDC, at its sole option, may terminate its remaining funding obligations, if any, detailed in Section 5 herein. Further, the PAEDC shall be entitled to rccever its reasonable and customary attorney's fees and court costs incurred in collection of said obligation and such remedies as arc provided at law or in equity. 13. It is expressly understood and agreed by the parties that any right or remedy shall not preclude the exercise of any other right or remedy under this Agreement or under any provision of law, nor shall any action taken in the exercise of any right or rcmedy be deemed a waiver of any other rights or remedies. Failurc 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. 3D must establish and maintain sufficient records, as reasonably determined by the PAEDC, to account for the expenditure and utilization of funds received by 3D from PAEDC under the terms and conditions of this Agreement. 15~ 3D shall mainta~ records of the receipt and disposition of all funds provided hereunder as necessary to allow the PAEDC to audit and verify proper utilization of said funds in compliance with this Agreement and the representations and warranties contained herein and in 3D's application. 30 shaft provide reports of utilization of said funds, as reasonably requested by the PAEDC, and upon final termination of this Agreement. 16. Upon ten-day (10-day) advance notice, 3D shall give the PAEDC, or any of its duly authorized representatives, access to and right to examine afl books, accounts, records, reports, files and other papers, things or property belonging to or in use by 3D. Such rights to access shaft continue as long as the records are maintained by 3D. 3D 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 jobs, payroll and other relevant information. Driver's license information is appropriate for interim reporting of Port Arthur residents hired. Year end reports shall be substantiated with IRS Forms W-2 and W-3. The reportinq obiective is to include documentation necessary for PAEDC to verify said report without further outside inquiry. All such information as aforesaid obtained by the PAEDC, or its duly authorized representatives, shall be regarded as the confidential business information of 3D and the PAEDC shaft take reasonable measures to protect such information from disclosure to third parties; however, PAEDC is subject to the requirements of the Texas Open Meetings Act and Open Records Act (Tex. Gov. Code, 551 & 552). 3D agrees that disclosures to the public required by the Texas Open Meetings Act, Texas Open Records Act, or any other legal requirement will not expose PAEDC (or any party acting by, through or under PAEDC) to any claim, liability or action by 3D (or any party working by, through or under). 17. All records pertinent to this Agreement shaft be retained by 3D at least three years following the date of termination of this Agreement, whether said termination is a result of default or whether said termination is a result of final submission of a close out report by 3D detailing 3D'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 pedod 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 equa to the useful,life of any,asset purchased with PAEDC funds. ...... 18. 3D shall provide PAEDC with all reports necessary for PAEDC compliance with Article 5190.6 V.T.C.A. 19. It is expressly understood and agreed by the parties hereto that if 3D faits to submit to PAEDC in a timely and satisfactorv manner any report required by this Agreement, PAEDC may, at its sole discretion, withhold further payments to 3D and/or demand assurances that 3D can and will fully perform its contractual obligations. If 3D fails to provide adequate assurances then 3D is in breach and any monies advanced by PAEDC automatically become a loan. If PAEDC withholds such payments, it shall notify 3D in writing of its decision and the reasons therefore. Payments withheld pursuant to this paragraph may be held by PAEDC until such time as the delinquent obligations for which funds are withheld are fulfilled by 3D. 20. 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 may provide 3D with a written report of the audit findings. If the audit report details deficiencies in 3D's perfonmance under the terms and conditions of this Agreement, the PAEDC may establish requirements for the timely correction of any such deficiencies by 3D. HOLD HARMLESS 21. 3D agrees to hold harmless the PAEDC and the City of Port Arthur from any and all claims, demands, and causes of action of any kind or character which may be asserted by any third party occurring, arising out of or in any way related to this Agreement, the project made the basis of this Agreement, and the utilization of grant funds provided by this Agreement, provided that such claim, demand or cause of action does not arise from any fraud or misconduct on the part of the PAEDC or the City of Port Arthur, or any agent, employee or representative of either. SUBCONTRACTS 22. 3D may not subcontract for performance credits described in this Agreement without obtaining PAEDC's written approval, which may be withheld for any reason. 3D shall only subcontract for performance credits described in this Agreement after 3D has submitted a Subcontractor Eligibility Request, es specified by PAEDC, for each proposed subcontract, and 3D has obtained PAEDC's prior written approval. 3D, in subcontracting for any performances described in this Agreement, expressly understands that in entering into such subcontracts, PAEDC is in no way liable to 3D's subcontractor(s). 23. In no event shall PAEDC's prior written approval of a subcontractor's eligibility, be construed as relieving 3D of the responsibility for ensuring that the performances rendered under all subcontracts are rendered so as to comply with all terms of this Agreement, as if such performances rendered were rendered by 3D. PAEDC's approval does not constitute adopt[on, ratification, or acceptance of 3D's or subcontractor's performance hereunder. PAEDC maintains the right to insist upon 3D's full compliance with the terms of this Agreement, and by the act of subcontractor approval, PAEDC does not waive any right of action which may exist or which may subsequently accrue to PAEDC under this Agreement. 24. 3D, as well as all of its approved subcontractors, shall comply with all applicable federal, state, and local laws, regulations, and ordinances for making procurement under this Agreement. CONFLICT OF INTEREST I DISCLOSURE OBLIGATION 25. Conflict of Interest: No employee, agent, officer or elected or appointed official of the City of Port Arthur or the PAEDC who has participated in a decision making process related to this Agreement (without recusing himlhersel[ and executing a conflict affidavit) may obtain a personal or financial interest or benefit from an PAEDC assisted activity, or have an interest in any contract, subcontract, or agreement (or proceeds thereof) with respect to an PAEDC assisted activity, during their tenure or for one (1) year thereafter. Insofar as relates to the conduct hereunder of 3D, its agents, employees or representatives, 3D shall ensure compliance with applicable previsions under Article 5190.6 V.T.C.A. and Chapter 171 Local Government Code V.T.C.A. 26, Disclosure: in conjunction with execution of this Agreement, 3D has fully disclosed to PAEDC all known and potential owners of interests in 3D (whether stockholder, manager, member or otherwise). In the event of any change in ownership or control of 3D of five percent (5 %) or greater, 3D shall notify PAEDC in writing. Further, 3D shall be obligated to notify in writing the PAEDC in the event any time prior to, dudng or one (1) year after the term of this Agreement, any City or PAEDC employee or representative or any third party with a conflict of interest obtains or proposes to obtain a financial benefit, direct or indirect, from 3D. 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 27. 3D shall ensure that no person shall on the grounds of race, color, religion, sex, handicap, or national origin be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity funded in whole or in part with funds provided under this Agreement. Additionally, funds shall be used in accordance with the following requirements: la) To the greatest extent feasible, opportunities for training and employment arising in connection with the planning and carrying out of any project assisted with PAEDC funds provided under this Agreement be given to Port Arthur residents; and lb) To the greatest extent feasible, Agreements for work to be performed in connection with any such project be awarded to Port Arlhur 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 3D advertises for employment then it will advertise in the Port Arthur News; however, PAEDC has no intent to restrain advertising in additional publications or media. LEGAL AUTHORITY 28. 3D assures and guarantees that 3D possesses legal and/or corporate authority to enter into this Agreement, receive funds authorized by this Agreement, and to perform the services 3D 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. 29. The person or persons signing and executing this Agreement on behalf of 3D, or reprasenfing themselves as signing and executing this Agreement on behalf of 3D, do hereby warrant and guarantee that he, she, or they have been duly authorized by 3D to execute this Agreement on behalf of 3D and to validly and legally bind 3D to all terms, performances, and provisions heroin set forth. NOTICE OF LEGAL OR REGULATORY CLAIMS AGAINST 3D 30. 3D shall give PAEDC immediate notice in writing of 1) any legal or regulatory action, including any proceeding before an administrative agency filed against 3D, directly or indirectty; and 2) any material claim against 3D, which may impact continued operations. For purposes herein, "material" claims shall mean claims in excess of $5,000. Except as otherwise directed by PAEDC, 3D shall furnish immediately to PAEDC copies of all pertinent documentation of any kind received by 3D with respect to such action or claim. CHANGES AND AMENDMENTS 31. Except as specifically provided otherwise in this Agraement, any alterations, additions, or deletions to the terms of this Agreement shall be by amendment in writinq and executed by all parties to this Agreement. 32. It is understood and agreed by the parties hereto that performances under this Agraement must be renderad 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 3D, and the assurances and certifications made to the City of Port Arthur with rogard to the operation of the PAEDC's Projects. Based on these considerations, and in order to ensura the legal and effective performance of this Agreement by all parties, it is agreed by the pa~ties herato that the performances under this Agreement are by the provisions of the PAEDC Program and any amendments thereto and may further be amended in the following manner: PAEDC may from time to time during the pedod of performance of this Agreement issue policy directives which serve to interpret, or clarify performance raquirements under this Agreement. Such policy directives shall be promulgated by the PAEDC Board of Directors in the form of PAEDC issuances, shall be approved by the City Council and shall have the effect of qualifying the terms of this Agreement and shall be binding upon 3D, as if written herein. 33, Any alterations, additions, or deletions to the terms of this Agreement which are required by changes in Federal, state law or local law are automatically incorporated into this Agreement without written amendment hereto, and shall become effective on the date designated by such law or regulation. DEFAULT / TERMINATION 34. In the event of default of any of the obligations of 3D detailed herein or in the event of breach of any of the representations of or warranties of 3D either detailed herein or in 3D's application to the PAEDC, and following any notice and opportunity to cure provided for in this Agreement, the PAEDC may, at its sole option, terminate this Agreement, in whole or in part. In the event of such termination, the PAEDC may, at its sole option, utilize one or more of the following actions to resolve or otherwise remedy said default; (a) Declare the Commercial Promissory Note executed in conjunction with this Agreement immediately effective~ If 3D defaults on the note, then the PAEDC may exercise its default remedies provided under collateral documentation executed in conjunction with said Note and this Agreement (b) Exercise any remedies provided herein and/or within Ihe Loan/Collateral Documents; (c) Withhold, whether temporarily or otherwise, disbursement of grant proceeds pending correction of the deficiency(s) by 3D; (d) Disallow all or a part of the incentives which are not in compliance with the terms and conditions of this Agreement or in compliance with the representations and warranties contained within this Agreement and 3D's application to the PAEDC; (e) Withhold and/or disallow further PAEDC incentives to 3D; and (f) Exercise any and all other remedies that may be legally available to the PAEDC, under the laws of the State of Texas and as authorized by the terms and conditions of this Agreement. 35. In addition to the foregoing, the parties agree that this Agreement may be terminated at any time when both parties agree, in writing, to the terms and conditions of any such voluntary termination. -10- 3D AUDITS 36. If directed by PAEDC Board, 3D shatl arrange for the performance of a compliance audit, by a certified public accountant, of funds received and performances rendered under this Agreement, subject to the following conditions and limitations: (al 3D shaJl have a compliance audit which may be limited to use of funds received from the PAEDC, made for any of its fiscal years included within the Term of this Agreement in which 3D receives more than $50,000 in PAEDC financial assistance provided by PAEDC in the form of grants, contracts, loans, loan guarantees, property, cooperative agreements, interest subsidies, or direct appropriations. Backup documentation regarding actual expenditures shall be provided by 3D. Said audit must be received and accepted by the Chief Executive Officer of PAEDC and/or the PAEDC Board. (bi At the option of 3D, each audit required by this section may cover either 3D's entire operations or each department, agency, or establishment of 3D which received, expended, or otherwise administered PAEDC funds; lc) Unless otherwise specifically authorized by PAEDC in writing, 3D shall submit the report of such audit to PAEDC within thirty (30) days after completion of the audit, but no later than one hundred twenty (120) days after the end of each fiscal period included within the Term of this Agreement. (d) As a part of its audit, 3D shall verify that the expenditures were exclusively for Ithe ,asse~" S~...r)..Exh bit "Bi'.....~'F)Y disc?~Pancies .!n excess pl. $500. shall..be .. specifically documented in writing. 37. 3D understands and agrees that it shall be liable to reimburse immediately PAEDC for any costs disallowed pursuant to financial and compliance audit(s) of funds received under this Agreement and it may be required to submit formal audits at 3D's expense. 38. 3D shall take all necessary actions to facilitate the performance of any and all such audits, whether annual, mandatory or othe~vise requested under this Agreement. 39. Subject to financial privacy requirements of 3D and properly designated requests for non-disclosure due to proprietary reasons, all approved audit reports may be made available for public inspection, 40. PAEDC shall not release any funds for costs incurred by 3D under this Agreement until PAEDC has received certification from 3D that its fiscal control and fund accounting procedures are adequate to assure proper disbursal of and accounting for · funds provided under this Agreement. PAEDC shall specify the content and form of such certification. -11- ENVIRONMENTAL CLEARANCE REQUIREMENTS 41. 3D understands and agrees that by execution of this Agreement, 3D 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. 3D further understands and agrees that 3D 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 AGREEMENTS / PRIOR AGREEMENTS 42, All oral and written contracts between the parties to this Agreement relating to the subject matter of this Agreement that were made prior to the execution of this Agreement have been reduced to writing and are contained in this Agreement. 43. The documents listed below are hereby made a part of this Agreement, and constitute promised performances by 3D in accordance with this Agreement: Exhibit "Al" Commercial Promissory Note for Loan Exhibit "A2" Commercial Promissory Note for Conditional Grant Exhibit "B" ~'s~t Li~t Exhibit "C" Deed of Trust Exhibit"D" Certification Regarding Lobbying 3D's Application to PAEDC for funding, by reference VENUE 44. For purposes of litigation that may accrue under this Agreement, venue shall lie in Jefferson County, Texas, where substantially all the performance will occur. ADDRESS OF NOTICE AND COMMUNICATIONS City of Port Arthur Section 4A Economic Development Corporation 444 4th Street Port Arthur, Texas 77640 AFl'N: Floyd Batiste, Chief ExecL~tive Officer 3D Architectural Metat Sales, tnc. 205 West Hwy 365 Port Arthur, Texas 77640 ATTN: Richard Daley CAPTIONS 45. This Agreement has been supplied with captions to serve only as a guide to the contents. The caption does not control the meaning of any paragraph or in any way determine its interpretation or application. COMPLIANCE WITH FEDERALI STATE AND LOCAL LAWS 46. 3D shall comply with all Federal, State and local laws, statutes, ordinances, resolutions, rules, regulations, or'rs and decrees of any court or administrative body or tribunal, including those related to the activities and performances of 3D under this Agreement. Upon request by PAEDC and by the City, 3D shall furnish satisfactory proof of its compliance herewith. CONDITIONS PRECEDENT 47. This agreement has no legal consequences, and neither party shall rely on the agreement, unless and until a. Both the PAEDC Board and the Port Arthur City Council approve the, (R)ral~d:BulletsandNt~mbering Agreement in its final executed form /~D~i~e, an equipment list b. Richard and Jeanette Daley deliver a fully executed superior Deed of [ Exhlbit-B"ofthiS~onlract. ¶ Trust,for the real property provided as collateral for this contract. See .. (~e~et~:a.~,ga~ae,~pt~ Exhibit "C". ATTORNEY APPROVALS APPROVED AS TO FORM: Guy Goodson, General Counsel for PAEDC VERIFIED AS CONSlSTANT WITH CITY COUNCIL RESOLUTION: Resolution Number Mark T. Sokolow, City Attorney -13- AGREEMENT EXECUTION CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION SIGNED AND AGREED TO on the __ day of .., 2006 By: By:. President Eli Roberts Secretary Linda Spears Witness Witness 3D ARCHITECTURAL METAL SALES, INC. SIGNED AND AGREED TO on the day of ,200._.. 3D Architectural Metal Sales, Inc., a Texas corporation. By: Position Witness EXHIBIT "Al" COMMERCIAL PROMISSORY NOTE Port Adhur, Texas Effective Date: the. day of ,200 Principal Amount: ONE HUNDRED THREE THOUSAND SIX HUNDRED TEN AND 76/100 DOLLARS ($103,000.00). Term of the Loan: Seven (7) years from effective date. Payment Schedule: Monthly until principal is paid fully, starting on the 15t~ day of ., 2007 [one year after execution]. FOR VALUE RECEIVED, the undersigned "Maker", promises to pay !o Lende.r, at its o~.ce at P.O. Box 1089, Port Arthur, Texas, 77640-1089, or such other place or p~aces as me holder hereof shall from time to time designate in written notice to Maker the principal amount, in legal and lawful money of the United States of America, together with interest thereon from the date hereof until maturity at the rate of four percent (4%) per annum as detailed herein. All past due pr nc pal and interest shall bear nterest from date of maturity until paid at the rate of fifteen percent (15%) per annum or to the ma,ximum.e~ent all.ow.ed by law (whichever is less) as may hereafter be in effect, payab e on eemano a~er maturky. This note is due and payable as follows: Eighty four (84) equal monthly installments of principal and interest paid on the fifteenth of each month. Any notces required or permfled to be given by the holder hereof to Maker pursuant to the prov sons of this note shall be in writing and shall be either personally delivered or transmitted by first class United States mail, addressed to Maker at the address des 9nated below for receipt of notice (or at such Other address as Maker may, from t me to time designate in writing to the I~older hereof for receipt of notices hereunder) Any such notice personally de vered shall be effective as .of the date of delivery, and any notice transmitled 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, propedy addressed and with postage prepaid. This note is also secured by and entitle, d t.o the benefits of a. ll other s. ecudty agreements, pledges collateral assignments, deees of trus[, guaranties, mortgages, assignments and lien instruments, if any, of any kind executed by M,ake,r or by any other party as security for any loans owing by Maker to the Lender. Such I~en instruments shall ~nclude those executed simultaneously herewith, those heretofore executed, and thos~ hereafter executed. If any installment or payment of principal or interest of this note, is not paid w.h, en due or any drawer acceptor, endorser guarantor, surety, accommoeadon party or omer erson now or hereafter primaril or secondarily liable upon or for payment of all or any ~art of this note (each hereina~er calle, d an '?her !iable. party") shal! die, or be, come ~nsolvent (however such nsolvency may De evieence(]) or iT any proceeeing, proceeure or remedy suppementary to or in enforcement of judgment shall be resorted to or commenced against Maker or any other liable party, or w~th respect to any property of any of them; or if any governmental authority or any court at the ~nstance thereof shall take possess on of any substantial part of the property of or assume control over the affairs or operations of, or a rece ver shall be appointed for or take possession of the properly of, or a writ or order of attachment or garnishment shall b.e issued or made against any of the property of Maker or any other able party or if any indebtedness for which Maker or any other ab e party s primarily or secondarily liable shall 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 which shall permit the. holder of any such ind. ebtedness to declare it due and payable upon the lapse of time, g~v ng of notice or otherWise or if Maker or any other liable pady (if other than a natura person) sha be dissolved, wound up, liquidated or otherwise terminated, or a party to any merger or consolidation without the written consent of Lender;, or if Maker or any other liable party shall sell substantially all or an integral podion of its assets without the written consent of Lender, or f Maker or any other liable party fails to furnish financial informat on requested by Lender or if Maker or any other liable party furnishes or has furnished any financial or other information or statements which are mislead n~l n any resPect or if a default occurs under any instrument now or hereafter executed ~n connection with or as security for this note; or any event occurs or condition exists which causes Lender to in good faith deem itself insecure or in good faith believe the prospect of payment or performance by Maker or any other liable party under this note, under any instrument or agreement executed in connection with or as security for this note, or under any other indebtedness of Maker or any other liable party to Lender is mpaired; 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 fodhwith without demand, notice of default, notice of acceleration, notice of intent to accelerate the maturity hereof notice of nonpayment, presentment, protest or not ce of dishonor, a of which are hereby expressly waived by Maker and each other liable party. Lender may waive any default without waiving any pdor or subsequent default. If this note is not paid at maturity whether by acceleration or otherwise, and is p aced in the hands of any attorney for collection, or su t s filed hereon, or proceedings are had in probate bankruptcy, receivership, reorganization, arrangement or other legal proceedings for collect on hereof, Maker and each other liable party agree to pay Lender ~ts collection costs, including court costs and a reasonab e amount for attorney's fees. It s the intention of Maker and Lender to conform strictly to applicable usuw laws. Accordingly, if the transaction contemplated hereby would be usurious under applicable law, then n that event, notwithstand ng anything to the contrary here!n or in any agreement entered into in connection with or as security for this note it ~s agreed as follows: (i) the aggregate of all consideration which constitutes interest under applicable law that is taken, reserved, contracted for, charged or received under this note or under any of the other aforesaid agreements or otherwise in connection with this note shall under no circumstances exceed the maximum amount of interest allowed by applicable law, and any excess shall be credited on th s note by the holder 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 e ection by the holder hereof resulting from any default '" hereunder or otherw se, or in the event of any requ red or permitted prepayment, then such consideration that constitutes nterest ma)/never include more than the maximum amount a owed by applicable law, and excess nterest, if any, provided for in this note or otherwise shall be canceled autom, at cally as of the date. of such acceleration or prepayment and, if theretofore prepaid, shall be credited on th~s 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 char~]ed or received under this note or under any of the other aforesaid agreements or otherwise in connection with this note, that are made for the purpose of determ ning whether such rate exceeds the maximum lawful rate shall be made, to the ex. tent perm tted by applicable law, by amo.rt zing,prorating, allocating, and spreading such interest over the entire lerrn of the loan ewdencedby this note(including all renewal and extended terms). Maker may prepay all or any part of the principal of t,hi,s no.!e be, f,o. re ..matur~.w!tho.ut penalty. No padial prepayment sba/reduce, postpone or ee[ay me oe~igation oTMaKer to continue paying the nsta merits herein provided on their respective due dates following any such partial prepayment until this note is fully paid. The Maker shall be directly and primarily liable, for the payment of all sums called for hereunder; and except for notices specifically required to be g~ven by the holder hereof to Maker pursuant to the earlier prey sions of th~s note Maker and each other liable party hereby express y wa v9 demand, presentment for payment notice of nonpayment, protest, notice ~)f protest, notice of ntention to accelerate maturity, notice,of acceleration of maturity, and all other notice, filing of suit and d igence in collecting th~s note or enforcing or handling any of the security therefor, and do hereby agree to any substitution exch,,ange or release, in whole or in part, of any security here-for or the release of any other hable 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 andwithout affecting or re easing the ability of any of them. Each holder hereof n order to enforce payment of this note by any other liable party, shall be required to first nstitute suit or exhaust its remedies aga nst Maker and to enforce its rights against any security therefor prior to enforc ng payment of this Note by any other liable party. SIGNED AND AGREED TO on the ~- day of ,2006. 3D Architectural Metal Sales, Inc., a Texas corporation By: Signature Its: Position ACKNOWLEGEMENT THE STATE OF TEXAS COUNTY OF JEFFERSON * BEFORE ME, THE UNDERSIGNED Notary Public, on this day personally appeared , known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he/she executed the same as the act and deed of 3D ARCHITECTURAL METAL SALES, INC., a Texas corporation, for the purposes and consideration therein expressed, and the Capacities therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of NOTARY PUBLIC, STATE OF TEXAS MAKERS' ADDRESS FOR RECEIPT OF NOTICE: 3D Architectural Metal Sales, Inc., a Texas corporation cio Richard Daley 205 West Hwy 365 Port Arthur, Texas 77640 EXHIBIT "A2" COMMERCIAL PROMISSORY NOTE Port Adhur, Texas This COMMERCIAL PROMISSORY NOTE becomes effective on the date when 3D Arch tectural Metal Sales, inc., a Texas corporation (hereinafter called "Make¢') breaches that cedain Economic Incent ye Contract and Loan Agreement between the City of Port Adhur Section 4A Economic Development Corporation (hereinafter called "Lender') and Maker, dated ., 2006. Effective Date of Note: the day of ., 200 .("date of breach") Principal Amount: $ , which is $112,000.00 minus the incentive credits earned by Maker according to that certain Economic Incentive Contract and Loan Agreement between the Lender and Maker (described hereinbefore). Term of the Loan: Three years from effective date. Payment Schedule: Monthly until principal is paid fully. ~F~ ~ ~ ~F~\/l=n the undersianed "Maker", promises to pay to Lender, at its o~.ce ~'~','~'~'~'~'-~-.Z~rthur Texa~, 77640-1089, or such other place or places .as .~ne, detailed herein. All past due principal and interest shall bear nterest from date of matudty until paid at the rate of fifteen percent (15%) per annum, or to the maximum extent allowed by law (whichever is greater) as may hereafter be in effect, payable on demand after maturity. This note is due and payable as follows: Thidy-s x (36) equal monthly installments of principal and interest on the fifteenth of each month, starling on the month immed ately following the effective date of the Note. Any notices requ red or permitted to be given by the holder hereof to Maker pursuant to the provis OhS of this note shall be in writing and shall be either personally delivered or transmtted by first c!ass United States mail, addressed to Maker at the address des gnated below for rece pt of notice (or at such other address as Maker may, from time to t me designate in writing to the holder hereof for receipt of notices hereunder). Any such notice persona ly delivered shall be effective as of the d.ate of delivery, and any notice transmitted by mail in accordance with the foregoing provisions, sha be deemed to have been given to and received by Maker as of the date on which such notice was deposited w th the United States Postal Service, propedy addressed and with postage prepaid. Th s note is also secured by and entit ed to the benefits of all other security a reements pledges, collateral assignments, deeds of trust, guaranties, mortgages, ~,g~,,~,~*- ~.,,~ ~;,,,, ~,,-*-,ments if any of any kind executed by Maker or by an.y or. he.r. owing by'Maker to the Lender. Such lien instrumems sna,, ~ncldde those executed simultaneous y herew th, those heretofore executed, and those hereafter executed. If any installment or payment of principal or interest of this note.is not paid w.h, en due or any drawer acceptor, endorser, guarantor, surety, accommodabon par~y or o~ner person now or hereafter pdmar ly or secondari!,y liable upon or for payment of all or any part of this note (each here nailer cai ed an other liable., party") shal! die, or be. come nsolvent (however such insolvency may be evidenced); or ir any proceeding, procedure or remedy supplementary to or in enforcement of judgment shall be resorted to or commenced against Maker or any other liable party or w th respect to any property of any of them; or if any governmental author ty or any court at the instance thereof shall take possession of any substantial part of the property of or assume control over the affairs or operat ons of, or a rece ver shall be appointed for or take possession of the property of, or a wdt or order of attachment or. garnishment shall b.e issued or made against any of the property of Maker or any other I~able party or if any ~ndebtedness for which Maker or any other liab e party is pdmadly 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 sha occur which sba permit the holder of any such ndebtedness 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 natura person) sha be dissolve.d., wound up, liquidated or otherwise term hated, or a pady to any merger or conso dat on without the writt.en consent of Lender; or if Maker or any other liable party sba se substantially all or an integral portion of its assets without, the wr men consent of Lender; or if Maker or any other liable party fails to furn sh financial nformabon requested by Lender;, or if Maker or any other liable party furnishes or has furnished any financial or other information or statements which are m sleadin9 n any respect; or if a default occurs under any instrument now or here`a, fler executed n connect on w th or ,as security for this note or any event occurs or condition exists which causes Lender to ~n 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 connect on with or as security for this note, or under any other indebtedness of Maker or any other liable party to .Lender is repaired; thereupon at the option of Lender, the principal balance and accrued ~nterest 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, notice of acceleration, notice of intent to accelerate the maturity hereof, notice of nonpayment, presentment, protest or notice of dishonor, all of which are hereby expressly waived by Maker and' each other liable party. Lender may waive any default without waiving any pdor or subsequent default. If this note is not paid at maturity whether by acceleration or otherwise., and is nl2~rl in the hands of any'attorney for collection or suit is filed hereon, or proceedings, are, ~avvi~ nrobate bankru[~tcv, receivership, reorganization, arrangement or othe.r le~a~ ~'~ceed~es for'coilectio~ h~reof, Maker and eac~ other liable party agree to, p.ay Leneer ~-c~Ilectk~n costs, including court costs and a reasonable amount for attorney s ~ees. t s the intention of Maker and Lender to conform strictly to applicable usury laws. Accord ngly, if the transaction contempl.ated hereby would be usurious under applicable law, then, in that e. vent, notwithstand ng anything to the contrary he.rein or in any agreement entered ~nto in connection with or as security for this note, ~t is agreed as follows: (i) the aggregate of a I consideraton which constitutes interest under applicable law that is taken, reserved, contracted for, charged or rece veal under this note or under any of the other aforesaid agreements or otherwise n connection with this note shall under no circumstances exceed the maximum amount of nterest allowed by applicable law, and any excess shall be credited on this note by the holder hereof (or, ifth~s note shall hav. e been pad 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 resultin~ from any default hereunder or otherwise, or n the event of any requ red or permitted prepayment, then such consideration that constitutes interest may never inc ude more than the maximum amount a owed by applicable law, and excess interest, if any, provided for in this note or otherwise shall be canceled automatically as of the date of such acc.eleration or prepayment and, if theretofore prepaid, shall be credited on th~s note (or if th~s note shall have been paid in fu, 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 connection w th this note, that are made for the purpose of determ nng whether such rate exceeds the maximum lawful rate shall be made, to the extent perm tted by applicable law, by amod zing,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 pr ncipal of this note before maturity without penalty. No padial prepayment shal/reduce, postpone or delay the obligation of Maker to cont nue payi.ng the nsta merits herein provided on their respective due dates following any such part~al prepayment until th s note is fu ly paid. The Maker shall be directl)/and primarily I able. for the payment of all sums called for hereunder; and except for notices specifically requ red to be given by the hol.der hereof to Maker pursuant to the earlier provisions of th~s note Maker and each other I~able party hereby ~xpressly wa ve demand, presentment for payment, notice of nonpayment, protest, not ce of protest not ce of intention to accelerate maturity, notice of acceleration of maturity, and all other notice, filing of suit and d igence in collecting this note or enforcing or handling any of the security therefor, and do hereby agree to any substitution, exchange or release, n who e or in part of any securty 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 anypart hereof, either before or after maturity, all without any notice thereof to any of them andwithout affect ng or releasing the lability of any of them. Each holder hereof in order to enforce payment of this note by any other liable party, s. hall be required to first nstitute suit or exhaust its remed es against Maker and to enforce ~ts rightS against any security therefor prior to enforcing payment of this Note by any other able party. SIGNED AND AGREED TO on the ~.day of ., 200__. 3D Architectural Metal Sales, Inc., a Texas corporation By:. Signature Its: Position ACKNOWLEGEMENT THE STATE OF TEXAS * COUNTY OF JEFFERSON * BEFORE ME, THE UNDERSIGNED Notary Public, on this day personally appeared ., known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he/she executed the same as the act and deed of 3D ARCHITECTURAL METAL SALES, INC., a Texas corporation, for the purposes and consideration therein expressed, and the Capacities therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the __. day of ,200__. NOTARY PUBLIC, STA'I'I: OF TEXAS MAKERS' ADDRESS FOR RECEIPT OF NOTICE: 3D Architectural Metal Sales, Inc.., a Texas corporation 205 W. Hwy 365 Port Arthur, Texas 77640 ATTN: Richard Daley EXHIBIT "B" ASSET LIST MACHINERY Purchase of Coll Slitter $ 10,000,00 Purchase of Coil Binder $ 20,000.00 Service for 5 Pieces of Equipment $ 4.500.0~_ Sub Total $ 34,500.00 VEHICLES Truck $ 10,000.00 Purchase of 5 used Trailers ~ $1,000 each $ 5 000.00 Sub Total $ 15,000.00 Fencing for Storage yard 270 ft. $ 5,500.00 Fill Dirl and Gravel $ 5,500.00 Office Furniture and Equil:rment, Telephone System, Advertisement $ 10,000.00 Insurance for the first year .... $ 8.500.00 100' of Storage Sheds Sub Total $ 29,500.00 Total $ 79~000.00 STOCK Coils for 36" R-Panel 2 Rolls of 4 Colors = 8 Rolls ~ 8,000 # each x .67 per # $ 42,880.00 4 Rolls of 18" Snap Lock ~ 3,000 # each -- 12,000 # x .67 per # $ 8,040.00 2 Rolls for 8" C ~ 3,000 # each= 6,000 # x .40 per # $ 2,400.00 2 Rolls for 8" Open C ~ 3,000 # each =6,000 # x .40 per # $ 2,400.00 2 Rolls for 3-1/2" C ~ 3,000 # = 6,000 # x .40 per # $ 2,400.00 2 Rolls for 3-1/2" Open C ~ 3,000 # = 6,000 # x .40 per # $ 2,400.00 I Roll for Itat Track ~ 3,000 # = 3,000 # x .40 per # $ 1.200.00 Sub Total $ 61,720.00 Fastener 3 Boxes each of 4 Colors Coils -- 12 Boxes x $240.00 per box $ 720.00 3 Boxes each of 4 Colors Coils ~ 12 Boxes x $240.00 per bgx $ 720.00 3 Boxes of Butyl Tape -~ 3 Boxes x $'/7.00 per box $ 231.00 3 Boxes of Sealant -- 3 Boxes x $40.00 per box $ 120.00 6 Rolls of Insulation ~- 6 Roils x $210.00 per roll $ 1.260.09 Sub Total $ 3,051.00 3 Roll Up Doors - 2 Different Sizes ~ 6 Roll Up Doors x $300.00 each $ 1,800.00 4 Wall Doors = 4 Doors x $150.00 each $ 600.09 Sub Total $ 2,400.00 · Total $ 67~171.00 Stock Total $ 67,171.00 $ 34,500.00 Machinery Truck & Trailers $ 15,000.00 Fencing, Storage, Gravel, Office Set Up $ 29,500.00 26 x 120 Building Slab and Electrlcal $ 70,000.00 TOTAL $ 216~171.00 DIFFERENCE $ 1,171.00 GILMNT $ 215,000.00 EXHIBIT "C" DEED OF TRUST Date: ., 2006 Grantor: Richard Daley, married to Jeanette Daley. Grantors' Mailing Address (including county): 205 West Highway 365 Port Arthur, Texas 77640 (Jefferson County) Trustee: KATHLEEN A. MCGLYNN Tmstee's Mailing Address: Germer Gertz, L.L.P. P.O. Box 4915 ~ Beaumont, Texas 77704 (Jefferson County) Benefic/ary: PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION ("PAEDC") Beneficlary's Mailing Address (including county): 4173 39th Street Port Arthur, Texas 77642 (Jefferson County) Note (No. 1) Date: ,2006 Amount: $103,000.00 Maker: 3D Architectural Metal Sales, Inc. Payee: PAEDC (Beneficiary) Final Maturity Date: ,2014 Note (No. 2) Date: ,2006 Amount: , $112,000.00 minus incentive credits earned by Maker according to that certain Economic Incentive Contract and Loan Agreement between Grantor and Beneficiary. Maker: 3D Architectural Metal Sales, Inc. Payee: PAEDC (Beneficiary) Final Maturity Date: Three years after the date of the Note. Property: See Attachment for legal description. Physical address is 205 Hwy 365, Port Arthur, Texas. The Property covered by this Instrument includes the Land and the following items, whether now owned or hereafter acquired, all of which, including replacements and additions thereto, shall be deemed to be and remain part of the Property covered by this Instrument, and all rights, hereditaments and appurlenances pertaining thereto, all of which are referred to as the "Property": (a) Any and all buildings, improvements, and tenements now or hereafrer attached to or placed, erected, constructed, or developed on the Land; (b) all fixtures, now or hereafter attached to Land or Improvements, that are necessary or useful for the complete and comfortable use and occupancy of the Land and Improvements; (c) all water and water rights, timber, crops, and mineral interest pertaining to the Land; (d) all building materials and fixtures now or hereafter delivered to and intended to be installed in or on the Land or the Improvements; (e) all plans and specifications for the Improvements and for any future development of or construction on the Land; (f) all Grantor's fights (but not Grantor's obligations) under any contracts relating to the Land or the Improvements; (g) all deposits (including tenant security deposits), bank accounts, funds, instruments, notes or chattel paper arising from or by virtue of any transactions related to the Land or the Improvements; (h) all Grantor's rights (but not Granlor's obligations) under any documents, contract rights, accounts, commitment[s, construction contracts (and all payment and performance bonds, statutory or otherwise, issued by any surety in connection with any such construction contracts, and the proceeds of such bonds), architectural contracts and engineering contracts arising from or by virtue of any transactions related to the Land or the Improvements; (i) all permits, licenses, franchises, certificates, and other rights and privileges now owned or held or hereafter obtained in connection with the Land and the Improvements; (j) all development rights, utility commitments, water and wastewater taps, capital improvement project contracts, utility construction agreements with any governmental authority, including municipal utility districts, or with any utility companies (and all refunds and reimbursements thereunder) relating to the Land or the Improvements; (k) all proceeds arising from or by virtue of the sale, lease or other disposition of the Land or the Improvements; (1) all proceeds (including premium refunds) of each policy of insurance relating to the Land and the Improvements; (m) all proceeds from the taking of any of the Land or the Improvements or any rights appurtenant thereto by fight of eminent domain or by private or other purchase in lieu thereof, including change of grade of streets, curb cuts or other fights of access, for any public or quasi-public use under any law; (n) all right, tire, and interest of Grantor in and to all streets, roads, public places, easements, and rights-of-way, 'existing or proposed, public or private, adjacent to or used in connection with, belonging or pertaining to the Land; (o) all of the Leases, rents, royalties, bonuses, issues, profits, revenues, Or other benefits of the Land or the Improvements, including without limitation cash or securities deposited pursuant to leases to secure performance by the tenants of their obligations thereunder (subject to the Assignment of Rants made in Article V below); and (p) other interest of every kind and character that Grantor now has or at any time hereafter acquires in and to the Land and the Improvements, including rights of ingress and egress and all reversionary rights or interests of Grantor with respect to such property and all of Grantor's rights (but not Grantor's obligations) under any covenants, conditions, and restrictions for the Land, as the same may be mended from time to time, including Grantors rights, title, and interests thereunder as declarant or developer, if applicable. Prior Lien(s) (including recording information): None Other Exceptions to Conveyance and Warranty: This conveyance is made expressly SUBJECT TO any and all restrictions, covenants, conditions, easements, right-of-ways, and mineral and/or royalty reservations of record, if any, affecting this Property. For value received and to secure payment of the note, Grantor conveys the property to Trustee in trust. Grantor warrants and agrees to defend the title to the property. If Grantor performs all the covenants and pays the notes according to their terms, this deed of trust shall have no further effect, and Beneficiary shall release it at Grantor's expense. Grantor's Obligations Grantor agrees to: 1. keep the property in good repair and condition; 2. pay all taxes and assessments on the property when due and by January 31 of the year immediately following, furnishing Benefic/ary copies of tax receipts showing that all such taxes and assessments have been paid; 3. preserve the lien's priority as it is established in this deed of trust; 4. maintain, in a form acceptable to Beneficiary, an insurance policy that a. covers all improvements for their full insurable value as determined when the policy is issued and renewed, unless Beneficiary approves a smaller amount in writing; b. contains an 80°,4 coinsurance clause; c. provides fire and extended coverage, including windstorm coverage; d. protects Beneficiary with a standard mortgage clause; e. provides flood insurance al any time the property is in a flood hazard area; and f. contains such other coverage as Beneficiary may reasonably require; 5. comply at all times with the requirements of the 80% coinsurance clause; 6. deliver the insurance policy to Beneficiary and deliver renewals to Beneficiary at least ten days before expiration; 7. keep any buildings occupied as required by the insurance policy; and 8. if this is not a first lien, pay al lien notes that Grantor is personally liable to pay and abide by all prior lien instruments. Beneficiary's Pdghts 1. Beneficiary may appoint in writing a substitute or successor trustee, succeeding to all rights and responsibilities of Trustee; 2. If the proceeds of the note axe used to pay any debt secured by prior liens, Beneficiary is subrogated to all of the rights and liens of the holders of any debt so paid; 3. Beneficiary shall apply any proceeds received under the insurance policy to repair or replace damaged or destroyed improvements covered by the policy, unless Grantor is in default of Notes or Deed of Trust in which case insurance proceeds may be applied to reduce Grantor's obligation under Notes or Deed of Trust; 4. If Grantor fails to perform any of Grantor's obligations, Beneficiary may perform those obligations and be reimbursed by Grantor on demand at the place where the note is payable for any sums so paid, including attorney's fees, plus interest on those sums from the dates of payments at the rate stated in the note for matured, unpaid amounts. The sum to be reimbursed shall be secured by this deed of trust. 5. If Grantor defaults on the note or fails to perform any of Grantor's obligations or if default occurs on a prior lien note or other instrument, and the default continues after Beneficiary gives Grantor notice of the default and the time within which it must be cured, as may be required by law or by written agreement, then Beneficiary may: a. Declare the unpaid principle balance and earned interest on the note immediately due; b. Request Trustee to foreclosure this lien, in which case Beneficiary or Beneficiary's agent shall give notice of the foreclosure sale, as provided by the Texas Property Code as then amended; and c. Purchase the property at any foreclosure sale by offering the highest bid and then have the bid credited on the note(s). Trustee's Duties If requested by Beneficiary to foreclose this Iien, Trustee shall: I. Either personally or by agent give notice of the foreclosure sale as required by the Texas Property Code as then amended; 2. Sell and convey all or part of the property to the highest bidder for cash with a general warranty binding Grantor subject to prior liens and other exceptions to conveyance and warranty; and 3. From the proceeds of the sale, pay in this order a. Expenses offoreelosure; b. To Beneficiary, the full amount of principle, interest, attorney's fees, and other charges due and unpaid; c. Any amount required by law lo be paid before payment to Grantor; and d. To Grantor, any balance. General Provisions 1. If any of the property is reconveyed under this deed of trust, Grantor shall immediately surrender possession to the Beneficiary. If Grantor fails to do so, Grantor shall become a tenant at sufferance of the Beneficiary, subject to an action for forcible detainer. 2. Recitals in any Tmstee's deed conveying the property will be presumed to be true. 3. Proceeding under this deed of trust, filing suit or pursuing any other remedy will not constitute an election of remedies. 4. This lien shall remain superior to liens later created even if the time of payment of all or part of the note is extended or part of the property is released. 5. If any portion of the note cannot be lawfully secured by this deed of trust, payments shall be applied first to discharge that portion. 6. Grantor assigns to Beneficiary all sums payable to or received by Grantor from condemnation of all or part of the property, from private sale in lieu of condemnation, and from damages caused by public works or construction on or near the property. After deducting any expenses incurred, including attorney's fees, Beneficiary may release any remaining sums to Grantor or apply such sums to reduce the note Beneficiary shall not be liable for failure to collect or to exercise diligence in collecting any such sums. 7. Grantor assigns to Beneficiary absolutely, not only as collateral, all present and future rent and other income and receipts from the property. Leases are not assigned. Grantor warrants the validity and enforceability of the assignment. Grantor may as Beneficlary's licensee collect rent and other income and receipts as long as Grantor is not in default under the note or this deed of trust. Grantor will apply all rent and other income and receipts to payment of the note and performance of this deed of trust, but if the rent and other income and receipts exceed the amount due under the note and deed of trust, Grantor may retain the excess. If Grantor defaults in payment of the note of performance of this deed of trust, Beneficiary may terminate Grantor's license to collect and then as Grantor's agent may rent the property if it is vacant and collect all rent and other income and receipts. Beneficiary neither has not assumes any obligations as lessor or landlord with respect to any occupant of the property. Beneficiary may exercise Beneficiary's rights and remedies under this paragraph without taking possession of the property. Beneficiary shall apply all rent and other income and receipts collected under this paragraph first to expenses incurred in exercising Beneficiaxy's rights and remedies and then to Grantor's obligations under the note and this deed of trust in the order determined by Beneficiary. Beneficiary is not required to act under this paragraph, and acting under this paragraph does not waive any of Beneficiary's other rights or remedies. If Grantor becomes a voluntary or involuntary bankrupt, Beneficiary's filing a proof of claim in bankruptcy will be tantamount to the appointment of a receiver under Texas law. 8. Interest on the debt secured by this deed of trust shall not exceed the maximum amount of nonusufious interest that may be contracted for, taken, reserved, charged, or received under law; any interest in excess of that maximum amount shall be credited on the principal of the debt or, if that has been paid, refunded. On any acceleration or required or permitted prepayment, any such excess shall be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded. This provision ovenSdes other provisions in this and all other instruments concerning the debt. .9. When the context requires, singular nouns and pronouns include the plural. 10. The term note includes all sums secured by this deed of trust. 11. This deed of trust shall bind, insure to the benefit of, and be exercised by successors in interest of all parties. 12. If Grantor and Maker are not the same person, the term Grantor shall include Maker. 13. If all or any part of the Property is sold, conveyed, leased for a period longer than three (3) years, leased with the option to purchase, or otherwise sold (including contract for deed), without the prior written consent of Beneficiary, then Beneficiary may at its option declare the outstanding balance of the Note(s), plus accrued interest to be immediately due and payable. The creation ora subordinate lien, any sale thereunder, any deed under threat or order of condemnation, any conveyance solely between Makers, the passage of title by reason of the death of a Maker or by operation of law shall not be construed as a sale or conveyance of the Property. 14. THIS DEED OF TRUST IS GRANTED 1N CONJUNCTION WITH THAT CERTAIN ECONOMIC INCENTIVE CONTRACT AND LOAN AGREEMENT OF EVEN DATE. By: Richard Daley, a married man By: Jeanette Daley, wife of Richard Daley BEFORE ME, THE UNDERSIGNED Notary PuNic, on this day personally appeared Richard Daley, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he/she executed the same as the act and deed of 3D ARCHITECTURAL METAL SALES, INC., a Texas corporation, for the purposes and consideration therein expressed, and the Capacities therein statedl GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the __ day of ,2oo._. NOTARY PUBLIC, STATE OF TEXAS BEFORE ME, THE UNDERSIGNED Notary Public, on this day personally appeared Jeanette Daley, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he/she executed the same as the act and deed of 3D ARCHITECTURAL METAL SALES, INC., a Texas corporation, for the purposes and consideration therein expressed, and the Capacities therein stated. GIVEN UNDER MY HAND AND SEAL OF OFFICE, this the day of ,200__. NOTARY PUBLIC, STATE OF TEXAS AFTER RECORDING RETURN TO: Kalhleen A. McGlynn Germer Gertz, L.LP. P.O. Box 4915 Beaumont, Texas 77704 Attachment to Deed of Trust Legal Property Description Lot 1 and the northwest 80 feet of Lot 2 Block 11 Montrose Addition No. 2 as recorded in Volume 10, Page 20 of the Map Records of Jefferson County, Texas. EXHIBIT "D" 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 Subs shall certify and disclose accordingly. This cedification 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: 3D Architectural Metal Sales, Inc. By: Signature Its: Position