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[COMERICA - BANK LOGO] MASTER REVOLVING NOTE
LIBOR Rate-Maturity Date-Optional Advances (Business and
Commercial Loans Only)
<TABLE>
<CAPTION>
AMOUNT
NOTE DATE
MATURITY DATE TAX
IDENTIFICATION NUMBER
<S>
<C>
<C>
<C>
$5,000,000.00 July 25, 2003
July 30,
2005
75-1549797
</TABLE>
ON THE MATURITY DATE, as stated above, for
value received, the undersigned
promise(s) to pay to the order of Comerica
Bank-Texas ("Bank") at any office of
the Bank in the State of Texas, FIVE
MILLION AND NO/100 DOLLARS (U.S.) (or that
portion of it advanced by the Bank and not
repaid as later provided) with
interest until maturity, whether by
acceleration or otherwise, or until Default,
as later defined, at a per annum rate equal
to the lesser of (a) the Maximum
Rate, as later defined, or (b) the Stated
Rate, as later defined, and after that
at a rate equal to the rate of interest
otherwise prevailing under this Note
plus three percent (3%) per annum (but in
no event in excess of the Maximum
Rate.) If on any day the Stated Rate shall
exceed the Maximum Rate for that day,
the rate of interest applicable to this
Note shall be fixed at the Maximum Rate
on that day and on each day thereafter
until the total amount of interest
accrued on the unpaid principal balance of
this Note equals the total amount of
interest which would have accrued if there
had been no Maximum Rate. Interest
rate changes will be effective for interest
computation purposes as and when the
Maximum Rate or the Stated Rate, as later
defined, as applicable, changes.
Subject to the limitations hereinbelow set
forth, interest shall be calculated
on the basis of a 360-day year for the
actual number of days the principal is
outstanding. Accrued interest on this Note
shall be payable on the first LIBOR
Business Day, as later defined, of each
calendar month, commencing with the
first LIBOR Business Day of the calendar
month following the date of this Note
and with respect to interest accrued on any
LIBOR Balance, as later defined, on
the last day of the applicable LIBOR
Interest Period, as later defined, until
the Maturity Date (set forth above) when
all amounts outstanding under this Note
shall be due and payable in full. If any
payment of principal or interest under
this Note shall be payable on a day other
than a day on which the Bank is open
for business, this payment shall be
extended to the next succeeding business day
and interest shall be payable at the rate
specified in this Note during this
extension. A late payment charge equal to a
reasonable amount not to exceed five
percent (5%) of each late payment may be
charged on any payment not received by
the Bank within ten (10) calendar days
after the payment due date, but
acceptance of payment of this charge shall
not waive any Default under this
Note.
Subject to the provisions hereof, the
undersigned shall have the option (an
"Interest Option") exercisable from time to
time to designate a portion of the
unpaid principal balance of this Note to
bear interest at a rate determined with
respect to the Prime Rate (such portion
being herein referred to as the "Prime
Rate Balance") and to designate one or more
portions of the unpaid principal
balance of this Note to bear interest at a
rate determined with respect to a
LIBOR Based Rate (each such portion being
herein referred to as a "LIBOR
Balance").
The term "Maximum Rate" as used herein,
shall mean at the particular time in
question the maximum nonusurious rate of
interest which, under applicable law,
may then be charged on this Note. If such
maximum rate of interest changes after
the date hereof, the Maximum Rate shall be
automatically increased or decreased,
as the case may be, without notice to the
undersigned from time to time as of
the effective date of each change in such
maximum rate. For purposes of
determining the Maximum Rate under the law
of the State of Texas, the applicable
interest rate ceiling shall be the "weekly
ceiling" from time to time in effect
under Chapter 303 of the Texas Finance
Code, as amended.
The term "Stated Rate," as used in this
Note, shall mean (a) with respect to the
Prime Rate Balance outstanding from time to
time, a fluctuating per annum rate
of interest equal to the Prime Rate plus
the Applicable Margin and (b) with
respect to each LIBOR Balance, a per annum
rate of interest equal to the LIBOR
Based Rate for the LIBOR Interest Period
then in effect with respect to such
LIBOR Balance plus the Applicable
Margin.
The term "Prime Rate," as used herein,
shall mean that annual rate of interest
which is equal to the greater of the annual
rate of interest designated by the
Bank as its Prime Rate which is changed by
the Bank from time to time or a
variable per annum rate of interest
determined from day to day which equals the
sum of 1% plus the average per annum rate
of interest on overnight Federal
funds transactions with members of Federal
Reserve System arranged by Federal
funds brokers ("Overnight Transactions")
transacted on the immediately preceding
Business Day, as published by the Federal
Reserve Bank of New York, or, if such
interest rate is not so published for any
Business Day, the average of the per
annum interest rate quotations for
Overnight Transactions received by the Bank
(or, at its option, the Reference Bank) for
such Business Day from 3 Federal
funds brokers of recognized standing
selected by the Bank (or, at its option,
the Reference Bank). The Bank's Prime Rate
is a reference rate and does not
necessarily represent the lowest or best
rate actually charged by the Bank to
any of its customers. The Bank may make
commercial loans at rates of interest
at, above or below its Prime Rate.
The term "Reference Bank" means Comerica
Bank, a Michigan banking corporation,
its successors and assigns.
The term "LIBOR-Based Rate", as used
herein, shall mean, with respect to the
applicable LIBOR Interest Period and
applicable LIBOR Balance (as defined
above), the quotient of the following
(rounded upwards, if necessary, to the
nearest 1/16 of 1%): (a) the LIBOR Rate (as
defined below); divided by (b) a
percentage (expressed as a decimal) equal
to 1.00 minus the maximum rate during
such interest period at which Bank or the
Reference Bank (or, if applicable, the
Reference Bank's designated eurodollar
lending office) is required to maintain
reserves on "Eurocurrency Liabilities" as
defined in and pursuant to Regulation
D of the Board of Governors of the Federal
Reserve System or, if such regulation
or designation is modified, and as long as
Bank or the Reference Bank (or, if
applicable, the Reference Bank's designated
eurodollar lending office) is
required to maintain reserves against a
category of liabilities which includes
eurodollar deposits or includes a category
of assets which includes eurodollar
loans, the rate at which such reserves are
required to be maintained on such
category.
The term "LIBOR Rate", as used herein,
shall mean the per annum rate of interest
determined on the basis of the rate for
deposits in United States Dollars for a
period equal to the relevant LIBOR Interest
Period for such LIBOR Balance,
commencing on the first day of such LIBOR
Interest Period, appearing on Page
BBAM of the Bloomberg Financial Markets
Information Service as of 10:00 a.m.
(Dallas, Texas time) (or soon thereafter as
practical), two (2) LIBOR Business
Days prior to the first day of such LIBOR
Interest Period. In the event that
such rate does not appear on Page BBAM of
the Bloomberg Financial Markets
Information Service (or otherwise on such
Service), the LIBOR Rate shall be
determined by reference to such other
publicly available service for displaying
eurodollar rates as may be agreed upon by
Bank and the undersigned, or, in the
absence of such agreement, the LIBOR Rate
shall, instead, be the per annum rate
equal to the average (rounded upward, if
necessary, to the nearest one-sixteenth
of one percent (1/16%)) of the rate at
which Bank is offered dollar deposits at
or about 10:00 a.m. (Dallas, Texas time)
(or soon thereafter as practical), two
(2) LIBOR Business Days prior to the first
day of such LIBOR Interest Period in
the interbank eurodollar market in an
amount comparable to the principal amount
of the respective LIBOR Balance which is to
bear interest at such LIBOR Rate and
for a period equal to the relevant LIBOR
Interest Period.
The term "LIBOR Interest Period", as used
herein, shall mean, with respect to
the applicable LIBOR Balance, a period
commencing on the date (which must be a
LIBOR Business Day) upon which, pursuant to
an Interest Notice, as later
defined, the principal amount of such LIBOR
Balance begins to accrue interest at
the applicable LIBOR-based Rate plus, if
applicable, the Applicable Margin (or,
in the case of a rollover to a successive
LIBOR Interest Period, the last day of
the immediately preceding LIBOR Interest
Period) and ending 30, 60, 90,180 or
360 days after the commencement date (as
designated in the Interest Notice);
provided, that: (i) any LIBOR Interest
Period which would otherwise end on a day
which is not a LIBOR Business Day shall be
extended to the next succeeding LIBOR
Business Day (unless such LIBOR Business
Day falls in another calendar month, in
which case, such LIBOR Interest Period
shall end on the next preceding LIBOR
Business Day); and (ii) any LIBOR Interest
Period which begins on a day for
which there is no numerically corresponding
day in the calendar month at the end
of such LIBOR Interest Period shall end on
the last LIBOR Business Day of such
last calendar month; and (iii) no LIBOR
Interest Period shall extend beyond the
Maturity Date.
The term "LIBOR Business Day," as used
herein, shall mean any day other than a
Saturday, Sunday or holiday on which Bank
is open for all or substantially all
of its domestic and international
commercial banking business (including
dealings in foreign exchange) in Dallas,
Texas, and, if the applicable day
relates to the LIBOR-based Rate, any LIBOR
Interest Period, or any notice with
respect to the LIBOR-based Rate
1
<PAGE>
or any LIBOR Interest Period, also a day on
which dealings in dollar deposits
are also carried on in the London interbank
market and on which banks are open
for business in London.
The term "Applicable Margin," as used
herein, shall mean 0% for the Prime Rate
Balance and two percent (2%) for each LIBOR
Balance.
The term "Business Day" as used herein,
shall mean any day other than a
Saturday, Sunday or holiday, on which the
Bank and the Reference Bank (and, if
applicable, the Reference Bank's designated
eurodollar lending office) are open
to carry on all or substantially all of
their normal commercial lending
business.
The Interest Option shall be exercisable by
the undersigned subject to the other
limitations in this Note on the
undersigned's option to designate a portion of
the unpaid principal balance hereof as a
LIBOR Balance and only in the manner
provided below:
(i) Before
12:00 noon at least 3 Business Days prior to the date the
undersigned has requested the Bank to make
an advance upon this Note, the
undersigned shall have given the Bank
written notice (any such notice, an
"Interest Notice") each in form and content
satisfactory to Bank specifying the
initial Interest Option(s) and the
respective initial amounts of the Prime Rate
Balance and LIBOR Balance designated by the
undersigned for such advance. If the
required Interest Notice shall not have
been timely received by the Bank or
fails to designate all or any portion of
the unpaid principal amount of the
advance as either a Prime Rate Balance or a
LIBOR Balance in accordance with the
terms and provisions of this Note, the
undersigned shall be deemed conclusively
to have designated such amounts to be a
Prime Rate Balance and to have given the
Bank notice of such designation.
(ii) At
least three (3) LIBOR Business Days prior to the termination of
any LIBOR Interest Period for a LIBOR
Balance, the undersigned shall give the
Bank an Interest Notice specifying the
Interest Option which is to be applicable
to such LIBOR Balance upon the expiration
of such LIBOR Interest Period. If the
required Interest Notice shall not have
been timely received by the Bank, the
undersigned shall be deemed conclusively to
have designated such amount as a
Prime Rate Balance immediately upon the
expiration of such LIBOR Interest Period
and to have given the Bank notice of such
designation.
(iii) The
undersigned shall have the right, exercisable on any Business
Day subject to the terms of this Note, to
convert an eligible portion of the
Prime Rate Balance to a LIBOR Balance by
giving the Bank an Interest Notice of
such designation at least three (3) LIBOR
Business Days prior to the effective
date of such exercise. Additionally, upon
termination of any LIBOR Interest
Period, the undersigned shall have the
right, on any Business Day, to convert
all or a portion of such principal amount
from the LIBOR Balance to a Prime Rate
Balance by giving Bank an Interest Notice
of such selection at least three (3)
LIBOR Business Days prior to effective date
of such exercise.
(iv) There
may be no more than four (4) LIBOR Balances in effect at any
time.
(v) Each
LIBOR Balance must be, as of the first day of the applicable
LIBOR Interest Period, at least
$100,000.00.
(vi) No
Default, or condition or event which, with the giving of notice
or
the lapse of time, or both, would
constitute a Default, shall have occurred and
be continuing or exist.
(vii) Each
exercise of an Interest Option to designate a LIBOR Balance to
bear interest at a Stated Rate which is
based on the LIBOR Based Rate shall not
be revocable.
Changes in the Stated Rate applicable to a
Prime Rate Balance or a LIBOR Balance
shall become effective without prior notice
to the undersigned automatically as
of the opening of business on the date of
each change in the Prime Rate or the
LIBOR Based Rate, as the case may be.
If the Bank or Reference Bank (or, if
applicable, the Reference Bank's
designated eurodollar lending office)
determines that deposits in U.S. dollars
(in the applicable amounts) are not being
offered to prime banks in the
interbank eurodollar market selected by the
Bank or Reference Bank (or, if
applicable, the Reference Bank's designated
eurodollar lending office) for the
applicable LIBOR Interest Period, or that
the rate at which such dollar deposits
are being offered will not adequately and
fairly reflect the cost to the Bank or
Reference Bank (or, if applicable, the
Reference Bank's designated eurodollar
lending office) of making or maintaining a
LIBOR Balance for the applicable
LIBOR Interest Period, the Bank shall
forthwith give notice thereof to the
undersigned, whereupon, until the Bank
notifies the undersigned that such
circumstances no longer exist, the right of
the undersigned to select an
Interest Option based upon a LIBOR Based
Rate shall be suspended, and the
undersigned may only select Interest
Options based on the Prime Rate.
If the adoption of any applicable law, rule
or regulation, or any change
therein, or any change in the
interpretation or administration thereof by any
governmental authority, central bank or
comparable agency charged with the
interpretation or administration thereof,
or compliance by the Bank or Reference
Bank (or, if applicable, its designated
eurodollar lending office) with any
request or directive (whether or not having
the force of law) of any such
authority, central bank or comparable
agency shall make it unlawful or
impractical for the Bank or Reference Bank
(or, if applicable, its designated
eurodollar lending office) to make or
maintain a LIBOR Balance, the Bank shall
so notify the undersigned and any
then-existing LIBOR Balance shall
automatically convert to a Prime Rate
Balance either (i) on the last day of the
then-current LIBOR Interest Period
applicable to such LIBOR Balance, if the Bank
and Reference Bank (and, if applicable, its
designated eurodollar lending
office) may lawfully continue to maintain
and fund such LIBOR Balance to such
day, or (ii) immediately, if the Bank or
Reference Bank (or, if applicable, its
designated eurodollar lending office) may
not lawfully continue to maintain such
LIBOR Balance to such day. Further, until
the Bank notices the undersigned that
such conditions or circumstances no longer
exist, the right of the undersigned
to select an Interest Option based on a
LIBOR Based Rate shall be suspended, and
the undersigned may only select Interest
Options based on the Prime Rate.
If either (i) the adoption of any
applicable law, rule or regulation, or any
change therein, or any change in the
interpretation or administration thereof by
any governmental authority, central bank or
comparable agency charged with the
interpretation or administration thereof,
or compliance by the Bank or Reference
Bank (or, if applicable, its designated
eurodollar lending office) with any
request or directive (whether or not having
the force of law) of any such
authority, central bank or comparable
agency shall subject the Bank or Reference
Bank (or, if applicable, its designated
eurodollar lending office) to any tax
(including without limitation any United
States interest equalization or similar
tax, however named), duty or other charge
with respect to any LIBOR Balance,
this Note or the Bank's or the Reference
Bank's (or, if applicable, its
designated eurodollar lending office's)
obligation to compute interest on the
principal balance of this Note at a rate
based upon a LIBOR Based Rate, or shall
change the basis of taxation of payments to
the Bank or the Reference Bank (or,
if applicable, its designated eurodollar
lending office) of the principal of or
interest on any LIBOR Balance or any other
amounts due under this Note in
respect of any LIBOR Balance or the Bank's
or Reference Bank's (or, if
applicable, its designated eurodollar
lending office's) obligation to compute
the interest on the balance of this Note at
a rate based upon a LIBOR Based
Rate, or (ii) any governmental authority,
central bank or other comparable
authority shall at any time impose, modify
or deem applicable any reserve
(including, without limitation, any imposed
by the Board of Governors of the
Federal Reserve System), special deposit or
similar requirement against assets
of, deposits with or for the account of, or
credit extended by, the Bank or
Reference Bank (or, if applicable, its
designated eurodollar lending office), or
shall impose on the Bank or Reference Bank
(or, if applicable, its designated
eurodollar lending office) or any relevant
interbank eurodollar market or
exchange any other condition affecting any
LIBOR Balance, this Note or the
Bank's or Reference Bank's (or, if
applicable, its designated eurodollar lending
office's) obligation to compute the
interest on the balance of this Note at a
rate based upon a LIBOR Based Rate; and the
result of any of the foregoing is to
increase the cost to the Bank or Reference
Bank (or, if applicable, the
Reference Bank's designated eurodollar
lending office) of maintaining any LIBOR
Balance, or to reduce the amount of any sum
received or receivable by the Bank
or Reference Bank (or, if applicable, the
Reference Bank's designated eurodollar
lending office) under or with respect to
this Note by an amount deemed by the
Bank to be material, then upon demand by
the Bank, the undersigned shall pay to
the Bank such additional amount or amounts
as will compensate the Bank and the
Reference Bank (and, if applicable, its
designated eurodollar lending office)
for such increased cost or reduction. The
Bank will promptly notify the
undersigned of any event of which it has
knowledge, occurring after the date
hereof, which will entitle the Bank or
Reference Bank (or, if applicable, the
Reference Bank's designated
2
<PAGE>
eurodollar lending office) to compensation
pursuant to this paragraph. A
certificate of the Bank claiming
compensation under this paragraph and setting
forth the additional amount or amounts to
be paid hereunder shall be conclusive
in the absence of manifest error.
If any applicable law, treaty, rule, or
regulation (whether domestic or foreign)
now or hereafter in effect and whether
presently applicable to the Bank or
Reference Bank (or, if applicable, its
designated eurodollar lending office) or
any change therein or any interpretation or
administration thereof by any
governmental authority, central bank or
comparable agency charged with the
interpretation or administration thereof or
compliance by the Bank or Reference
Bank (or, if applicable, its designated
eurodollar lending office) therewith or
with any guidance, request or directive of
any such governmental authority,
central bank or comparable agency (whether
or not having the force of law),
including any risk-based capital
guidelines, affects or would affect the amount
of capital required or expected to be
maintained by the Bank or Reference Bank
(or any corporation controlling the Bank or
Reference Bank), and the Bank
determines that the amount of such capital
is increased by or based upon the
existence of any obligations of Bank
hereunder or the maintaining of any LIBOR
Balance hereunder, and such increase has
the effect of reducing the rate of
return on Bank's or the Reference Bank's
(or its controlling corporation's)
capital as a consequence of such
obligations or the maintaining of LIBOR
Balances hereunder to a level below that
which the Bank or Reference Bank (or
such controlling corporation) could have
achieved but for such circumstances
(taking into consideration its policies
with respect to capital adequacy), then
the undersigned shall pay to Bank, within
fifteen (15) days of receipt by the
undersigned of written notice from the Bank
demanding such compensation, such
additional amounts as are sufficient to
compensate the Bank or Reference Bank
(or its controlling corporation) for any
increase in the amount of capital and
reduced rate of return which the Bank
determines to be allocable to the
existence of any obligations of the Bank
hereunder or maintenance of any LIBOR
Balances hereunder. A certificate of Bank
as to the amount of such compensation,
prepared in good faith and in reasonable
detail by the Bank, which is submitted
by the Bank to the undersigned shall be
conclusive and binding for all purposes
absent manifest error.
The undersigned may not repay any LIBOR
Balance or convert all or any portion of
a LIBOR Balance to a Prime Rate Balance
prior to the expiration of the
applicable LIBOR Interest Period, unless
(i) such repayment or conversion is
specifically required by the terms of this
Note, (ii) the Bank demands that such
repayment or conversion be made, or (iii)
the Bank, in its sole discretion,
consents to such repayment or conversion.
If for any reason, whether or not
consent shall have been given or demand
shall have been made by the Bank, any
LIBOR Balance is repaid or converted prior
to the expiration of the
corresponding LIBOR Interest Period, or any
Interest Option which designates a
LIBOR Balance is revoked for any reason
whatsoever prior to the commencement of
the applicable LIBOR Interest Period or the
undersigned fails for any reason to
borrow the full amount of any LIBOR Balance
for which the undersigned has
exercised an Interest Option, or if for any
other reason whatsoever, the basis
for determining the Stated Rate shall be
changed from a LIBOR Based Rate to the
Prime Rate prior to the expiration of the
applicable LIBOR Interest Period, or
the undersigned shall fail to make any
payment of principal or interest upon
this Note at any time that the Stated Rate
if based on a LIBOR Based Rate, then
the undersigned shall pay to the Bank on
demand any amounts required to
compensate the Bank and Reference Bank
(and, if applicable, its designated
eurodollar lending office) for any losses,
costs or expenses which any of them
may incur as a result thereof, including,
without limitation, any loss, cost or
expense incurred in obtaining, liquidating,
employing or redeploying deposits
from third parties. Amounts payable by the
undersigned to the Bank pursuant to
this paragraph may include, without
limitation, amounts equal to the excess, if
any of (a) the amounts of interest which
would have accrued on any amounts so
prepaid, refunded, converted or not so
borrowed, from the respective dates of
prepayment, refund, conversion or failure
to borrow through the last day of the
relevant LIBOR Interest Periods at the
applicable rates of interest for the
applicable LIBOR Balances, as provided
under this Note, over (b) the amounts of
interest determined by the Bank or
Reference Bank (or, if applicable, its
designated eurodollar lending office) which
would have accrued to the Bank or
Reference Bank (or if applicable, its
designated eurodollar lending office) on
such respective amounts by placing such
amounts on deposit for comparable
periods with leading banks in the interbank
eurodollar market selected by the
Bank or Reference Bank (or, if applicable,
the Reference Bank's designated
eurodollar lending office). The calculation
of any such amounts under this
paragraph shall be made as if the Bank or
Reference Bank (or, if applicable, the
Reference Bank's designated eurodollar
lending office) actually funded or
committed to fund the relevant LIBOR
Balances hereunder through the purchase of
underlying deposits in amounts equal to the
respective amounts of the applicable
LIBOR Balances and having terms comparable
to the applicable LIBOR Interest
Periods; provided, however, that the Bank
may fund LIBOR Balances hereunder in
any manner they may elect in their sole
discretion, and the foregoing
assumptions shall be utilized only for the
purposes of calculating amounts
payable under this paragraph. Upon written
request by the undersigned, the Bank
shall deliver to the undersigned a
certificate setting for the basis for
determining such losses, costs and expenses
which certificate shall be
conclusive in the absence of manifest
error.
For any LIBOR Balance, if the Bank or the
Reference Bank shall designate a
eurodollar lending office which maintains
books separate from those of the Bank
or the Reference Bank, the Bank and the
Reference Bank shall have the option of
maintaining and carrying such LIBOR Balance
on the Books of such eurodollar
lending office.
The principal amount payable under this
Note shall be the sum of all advances
made by the Bank to or at the request of
the undersigned, less principal
payments actually received by the Bank. The
books and records of the Bank shall
be the best evidence of the principal
amount and the unpaid interest amount
owing at any time under this Note and shall
be conclusive absent manifest error.
No interest shall accrue under this Note
until the date of the first advance
made by the Bank; after that interest on
all advances shall accrue and be
computed on the principal balance
outstanding from time to time under this Note
until the same is paid in full. AT NO TIME
SHALL THE BANK BE UNDER ANY
OBLIGATION TO MAKE ANY ADVANCES TO THE
UNDERSIGNED PURSUANT TO THIS NOTE
(NOTWITHSTANDING ANYTHING EXPRESSED OR
IMPLIED IN THIS NOTE OR ELSEWHERE TO THE
CONTRARY, INCLUDING WITHOUT LIMIT IF THE
BANK SUPPLIES THE UNDERSIGNED WITH A
BORROWING FORMULA) AND THE BANK, AT ANY
TIME AND FROM TIME TO TIME, WITHOUT
NOTICE, AND IN ITS SOLE DISCRETION, MAY
REFUSE TO MAKE ADVANCES TO THE
UNDERSIGNED WITHOUT INCURRING ANY LIABILITY
DUE TO THIS REFUSAL AND WITHOUT
AFFECTING THE UNDERSIGNED'S LIABILITY UNDER
THIS NOTE FOR ANY AND ALL AMOUNTS
ADVANCED.
This Note and any other indebtedness and
liabilities of any kind of the
undersigned (or any of them) to the Bank,
and any and all modifications,
renewals or extensions of it, whether joint
or several, contingent or absolute,
now existing or later arising, and however
evidenced and whether incurred
voluntarily or involuntarily, known or
unknown, or originally payable to the
Bank or to a third party and subsequently
acquired by Bank including, without
limitation, any late charges; loan fees or
charges; overdraft indebtedness;
costs incurred by Bank in establishing,
determining, continuing or defending the
validity or priority of any security
interest, pledge or other lien or in
pursuing any of its rights or remedies
under any loan document (or otherwise) or
in connection with any proceeding involving
the Bank as a result of any
financial accommodation to the undersigned
(or any of them); and reasonable
costs and expenses of attorneys and
paralegals, whether inside or outside
counsel is used, and whether any suit or
other action is instituted, and to
court costs if suit or action is
instituted, and whether any such fees, costs or
expenses are incurred at the trial court
level or on appeal, in bankruptcy, in
administrative proceedings, in probate
proceedings or otherwise (collectively
"Indebtedness"), are secured by and the
Bank is granted a security interest in
and lien upon all items deposited in any
account of any of the undersigned with
the Bank and by all proceeds of these items
(cash or otherwise), all account
balances of any of the undersigned from
time to time with the Bank, by all
property of any of the undersigned from
time to time in the possession of the
Bank and by any other collateral, rights
and properties described in each and
every deed of trust, mortgage, security
agreement, pledge, assignment and other
security or collateral agreement which has
been, or will at any time(s) later
be, executed by any (or all) of the
undersigned to or for the benefit of the
Bank (collectively "Collateral").
Notwithstanding the above, (i) to the extent
that any portion of the Indebtedness is a
consumer loan, that portion shall not
be secured by any deed of trust, mortgage
on or other security interest in any
of the undersigned's principal dwelling or
in any of the undersigned's real
property which is not a purchase money
security interest as to that portion,
unless expressly provided to the contrary
in another place, or (ii) if the
undersigned (or any of them) has(have)
given or give(s) Bank a deed of trust or
mortgage covering California real property,
that deed of trust or mortgage shall
not secure this Note or any other
indebtedness of the undersigned (or any of
them), unless expressly provided to the
contrary in another place, or (iii) if
the undersigned (or any of them) has (have)
given or give(s) the Bank a deed of
trust or mortgage covering real property
which, under Texas law, constitutes the
homestead of such person, that deed of
trust or mortgage shall not secure this
Note or any other indebtedness of the
undersigned (or any of them) unless
expressly provided to the contrary in
another place.
If an Event of Default as defined in that
certain Credit Agreement dated as of
evendate herewith between the undersigned
and the Bank occurs or if the
undersigned (or any of them) or any
guarantor under a guaranty of all or part of
the Indebtedness ("guarantor") (a) fail(s)
to pay any of the Indebtedness when
due, by maturity, acceleration or
otherwise, or fail(s) to pay any Indebtedness
owing on a demand basis
3
<PAGE>
upon demand; or (b) fail(s) to comply with
any of the terms or provisions of any
agreement between the undersigned (or any
of them) or any such guarantor and the
Bank; or (c) become(s) insolvent or the
subject of a voluntary or involuntary
proceeding in bankruptcy, or a
reorganization, arrangement or creditor
composition proceeding, (if a business
entity) cease(s) doing business as a
going concern, (if a natural person) die(s)
or become(s) incompetent, (if a
partnership) dissolve(s) or any general
partner of it dies, becomes incompetent
or becomes the subject of a bankruptcy
proceeding or (if a corporation or a
limited liability company) is the subject
of a dissolution, merger or
consolidation; or (d) if any warranty or
representation made by any of the
undersigned or any guarantor in connection
with this Note or any of the
Indebtedness shall be discovered to be
untrue or incomplete; or (e) if there is
any termination, notice of termination, or
breach of any guaranty, pledge,
collateral assignment or subordination
agreement relating to all or any part of
the Indebtedness; or (f) if there is any
failure by any of the undersigned or
any guarantor to pay when due any of its
indebtedness (other than to the Bank)
or in the observance or performance of any
term, covenant or condition in any
document evidencing, securing or relating
to such indebtedness; or (g) if the
Bank deems itself insecure believing that
the prospect of payment of this Note
or any of the Indebtedness is impaired or
shall fear deterioration, removal or
waste of any of the Collateral; or (h) if
there is filed or issued a levy or
writ of attachment or garnishment or other
like judicial process upon the
undersigned (or any of them) or any
guarantor or any of the Collateral,
including without limit, any accounts of
the undersigned (or any of them) or any
guarantor with the Bank, then the Bank,
upon the occurrence of any of these
events (each a "Default"), may at its
option and without prior notice to the
undersigned (or any of them), declare any
or all of the Indebtedness to be
immediately due and payable
(notwithstanding any provisions contained in the
evidence of it to the contrary), cease
advancing money or extending credit to or
for the benefit of the undersigned under
this Note or any other agreement
between the undersigned and the Bank, but
without affecting Bank's rights and
security interests in any Collateral or the
Indebtedness, sell or liquidate all
or any portion of the Collateral, set off
against the Indebtedness any amounts
owing by the Bank to the undersigned (or
any of them), charge interest at the
default rate provided in the document
evidencing the relevant Indebtedness and
exercise any one or more of the rights and
remedies granted to the Bank by any
agreement with the undersigned (or any of
them) or given to it under applicable
law. In addition, if this Note is secured
by a deed of trust or mortgage
covering real property, then the trustor or
mortgagor shall not mortgage or
pledge the mortgaged premises as security
for any other indebtedness or
obligations. This Note, together with all
other indebtedness secured by said
deed of trust or mortgage, shall become due
and payable immediately, without
notice, at the option of the Bank,(i) if
said trustor or mortgagor shall
mortgage or pledge the mortgaged premises
for any other indebtedness or
obligations or shall convey, assign or
transfer the mortgaged premises by deed,
installment sale contract instrument, or
(ii) if the title to the mortgaged
premises shall become vested in any other
person or party in any manner
whatsoever, or (iii) if there is any
disposition (through one or more
transactions) of legal or beneficial title
to a controlling interest of said
trustor or mortgagor. All payments under
this Note shall be in immediately
available United States funds, without
setoff or counterclaim.
If this Note is signed by two or more
parties (whether by all as makers or by
one or more as an accommodation party or
otherwise), the obligations and
undertakings under this Note shall be that
of all and any two or more jointly
and also of each severally. This Note shall
bind the undersigned, and the
undersigned's respective heirs, personal
representatives, successors and
assigns.
The undersigned waive(s) presentment,
demand, protest, notice of dishonor,
notice of demand or intent to demand,
notice of acceleration or intent to
accelerate, and all other notices and
agree(s) that no extension or indulgence
to the undersigned (or any of them) or
release, substitution or nonenforcement
of any security, or release or substitution
of any of the undersigned, any
guarantor or any other party, whether with
or without notice, shall affect the
obligations of any of the undersigned. The
undersigned waive(s) all defenses or
right to discharge available under Section
3.605 of the Texas Uniform Commercial
Code and waive(s) all other suretyship
defenses or right to discharge. The
undersigned agree(s) that the Bank has the
right to sell, assign, or grant
participations or any interest in, any or
all of the Indebtedness, and that, in
connection with this right, but without
limiting its ability to make other
disclosures to the full extent allowable,
the Bank may disclose all documents
and information which the Bank now or later
has relating to the undersigned or
the Indebtedness. The undersigned agree(s)
that the Bank may provide information
relating to this Note or the Indebtedness
or relating to the undersigned to the
Bank's parent, affiliates, subsidiaries and
service providers.
The undersigned agree(s) to reimburse the
holder or owner of this Note upon
demand for any and all costs and expenses
(including without limit, court costs,
legal expenses and reasonable attorneys'
fees, whether inside or outside counsel
is used, and whether or not suit is
instituted and, if suit is instituted,
whether at the trial court level, appellate
level, in a bankruptcy, probate or
administrative proceeding or otherwise)
incurred in collecting or attempting to
collect this Note or incurred in any other
matter or proceeding relating to this
Note.
The undersigned acknowledge(s) and agree(s)
that there are no contrary
agreements, oral or written, establishing a
term of this Note and agree(s) that
the terms and conditions of this Note may
not be amended, waived or modified
except in a writing signed by an officer of
the Bank expressly stating that the
writing constitutes an amendment, waiver or
modification of the terms of this
Note. As used in this Note, the word
"undersigned" means, individually and
collectively, each maker, accommodation
party, indorser and other party signing
this Note in a similar capacity. If any
provision of this Note is unenforceable
in whole or part for any reason, the
remaining provisions shall continue to be
effective. Chapter 346 of the Texas Finance
Code (and as the same may be
incorporated by reference in other Texas
statutes) shall not apply to the
Indebtedness evidenced by this Note. THIS
NOTE IS MADE IN THE STATE OF TEXAS AND
SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF TEXAS, WITHOUT REGARD TO CONFLICT
OF LAWS PRINCIPLE.
This Note and all other documents,
instruments and agreements evidencing,
governing, securing, guaranteeing or
otherwise relating to or executed pursuant
to or in connection with this Note or the
Indebtedness evidenced hereby (whether
executed and delivered prior to,
concurrently with or subsequent to this Note),
as such documents may have been or may
hereafter be amended from time to time
(the "Loan Documents") are intended to be
performed in accordance with, and only
to the extent permitted by, all applicable
usury laws. If any provision hereof
or of any of the other Loan Documents or
the application thereof to any person
or circumstance shall, for any reason and
to any extent, be invalid or
unenforceable, neither the application of
such provision to any other person or
circumstance nor the remainder of the
instrument in which such provision is
contained shall be affected thereby and
shall be enforced to the greatest extent
permitted by law. It is expressly
stipulated and agreed to be the intent of the
holder hereof to at all times comply with
the usury and other applicable laws
now or hereafter governing the interest
payable on the indebtedness evidenced by
this Note. If the applicable law is ever
revised, repealed or judicially
interpreted so as to render usurious any
amount called for under this Note or
under any of the other Loan Documents, or
contracted for, charged, taken,
reserved or received with respect to the
indebtedness evidenced by this Note, or
if Bank's exercise of the option to
accelerate the maturity of this Note, or if
any prepayment by the undersigned or
prepayment agreement results (or would, if
complied with, result) in the undersigned
having paid, contracted for or being
charged for any interest in excess of that
permitted by law, then it is the
express intent of the undersigned and Bank
that this Note and the other Loan
Documents shall be limited to the extent
necessary to prevent such result and
all excess amounts theretofore collected by
Bank shall be credited on the
principal balance of this Note or, if fully
paid, upon such other Indebtedness
as shall then remaining outstanding (or, if
this Note and all other Indebtedness
have been paid in full, refunded to the
undersigned), and the provisions of this
Note and the other Loan Documents shall
immediately be deemed reformed and the
amounts thereafter collectable hereunder
and thereunder reduced, without the
necessity of the execution of any new
document, so as to comply with the then
applicable law, but so as to permit the
recovery of the fullest amount otherwise
called for hereunder or thereunder. All
sums paid, or agreed to be paid, by the
undersigned for the use, forbearance,
detention, taking, charging, receiving or
reserving of the indebtedness of the
undersigned to Bank under this Note or
arising under or pursuant to the other Loan
Documents shall, to the maximum
extent permitted by applicable law, be
amortized, prorated, allocated and spread
throughout the full term of such
indebtedness until payment in full so that the
rate or amount of interest on account of
such indebtedness does not exceed the
usury ceiling from time to time in effect
and applicable to such indebtedness
for so long as such indebtedness is
outstanding. To the extent federal law
permits Bank to contract for, charge or
receive a greater amount of interest,
Bank will rely on federal law instead of
the Texas Finance Code for the purpose
of determining the Maximum Rate.
Additionally, to the maximum extent permitted
by applicable law now or hereafter in
effect, Bank may, at its option and from
time to time, implement any other method of
computing the Maximum Rate under the
Texas Finance Code or under other
applicable law, by giving notice, if required,
to the undersigned as provided by
applicable law now or hereafter in effect.
Notwithstanding anything to the contrary
contained herein or in any of the other
Loan Documents, it is not the intention of
Bank to accelerate the maturity of
any interest that has not accrued at the
time of such acceleration or to collect
unearned interest at the time of such
acceleration.
THE UNDERSIGNED AND THE BANK, BY ACCEPTANCE
OF THIS NOTE, ACKNOWLEDGE THAT THE
RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL
ONE, BUT THAT IT MAY BE WAIVED. EACH
PARTY, AFTER CONSULTING (OR HAVING HAD THE
OPPORTUNITY TO CONSULT) WITH COUNSEL
OF THEIR CHOICE, KNOWINGLY AND VOLUNTARILY,
AND FOR THEIR MUTUAL
4
<PAGE>
BENEFIT, WAIVES ANY RIGHT TO TRIAL BY JURY
IN THE EVENT OF LITIGATION REGARDING
THE PERFORMANCE OR ENFORCEMENT OF, OR IN
ANY WAY RELATED TO, THIS NOTE OR THE
INDEBTEDNESS.
THIS WRITTEN LOAN AGREEMENT (AS DEFINED BY
SECTION 26.02 OF THE TEXAS BUSINESS
AND COMMERCE CODE) REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
BORROWER:
INTERPHASE CORPORATION,
a Texas corporation
By:/s/ Steve Kovac
-----------------------------------------
Steve Kovac, Chief Financial Officer
2901 Dallas Parkway
Plano
Texas
75093
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CITY
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