10000001906

UNITED STATES BANKRUPTCY COURT
WESTERN DISTRICT OF TEXAS

SAN ANTONIO DIVISION
______________________________________
In re: Chapter 11
DELTA PRODUCE, L.P.

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, Case No. 12-50073-LMC
Debtors Jointly Administered

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RESPONSE BY THE INTERNATIONAL BANK OF COMMERCE TO THE
JOINT MOTION OF SOME PACA TRUST BENEFICIARIES AND THE
DEBTORS FOR USE OF THE PACA TRUST FUNDS
TO THE HONORABLE LEIF M. CLARK, UNITED STATES BANKRUPTCY JUDGE:
Now Comes INTERNATIONAL BANK OF COMMERCE (IBC), Respondent, to file
this its Response (the Response) to the Joint Motion of Some PACA Trust Beneficiaries
(Beneficiaries) and Delta Produce, L.P. and Superior Tomato-Avocado, Ltd. (jointly referred
to herein as Debtors) for Use of the PACA Trust Funds (the PACA Trust Fund Motion) and
would show unto the Court as follows.
I. SPECIFIC RESPONSES
1.1 IBC admits the allegations contained within 1 of the PACA Trust Fund Motion.
1.2 IBC admits the allegations contained within 2 of the PACA Trust Fund Motion.
1.3 IBC has no personal knowledge of the nature of the subject funds and are not
aware that the subject funds are trust funds, but assumes that funds referenced within the PACA
Trust Fund Motion references only funds which constitute trust funds under the Agricultural
Perishable Commodities Act, 1930, 7 U.S.C. 499(a)-49(t) as amended, known as PACA
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Debtors are the following entities: Delta Produce, L.P. Case No. 12-50073-LMC-11, Superior
Tomato-Avocado, Ltd. Case No. 12-50074-LMC-11, Atled, Ltd. Case No. 12-50075-LMC-
11 and Staci Properties, Ltd. Case No. 12-50110-LMC
12-50073-lmc Doc#45 Filed 01/23/12 Entered 01/23/12 13:16:08 Main Document Pg 1 of 6
subject thereto IBC has no disagreement with allegations contained within 3 f the PACA Trust
Fund Motion.
1.4 Subject to IBCs response to 3 above, IBC admits the allegations contained
within 4 of the PACA Trust Fund Motion.
1.5 IBC has no personal knowledge of the allegations contained within 5 of the
PACA Trust Fund Motion but does not dispute the truth of the matter set forth therein.
II. ARGUMENTS AND AUTHORITIES
2.1 IBC is a secured creditor of the estate having extended prepetition loans on the
following basis:
i. Delta Note in the amount of $1,500,000.00 dated April 23, 2007;
ii. Delta Note in the amount of $2,000,000.00 dated April 1, 2007;
iii. Delta Note in the amount of $6,000,000.00 dated June 8, 2010;
iv. Staci Produce (Superior) Note in the amount of $2,000,00.00 dated
March 3, 2005;
v. Staci Properties (Superior) Note in the amount of $2,400,000.00 dated
March 3, 2005; and
vi. Alted, Ltd. Note in the amount of $1,300,000.00 dated December 12,
2005.
2.2 As of January 4, 2012, IBC shows that the combined outstanding balance owed to
IBC by the Debtors amounts to $6,455,615.00. True and correct copies of the documents
evidencing the outstanding indebtedness owed to IBC by Debtors is attached hereto and
incorporated herein as Exhibits 1 16, including therein, copies of Deed of Trusts and Security
Agreements confirming collateral rights of IBC within virtually all property owned by Debtors.
In essence, IBC asserts a security interest which globally attaches to practically all of Debtors
property including real property, furniture, fixtures and equipment, inventory, account
receivables, general in tangible and funds on deposit at IBC. IBCs security interest constitutes a
first and prior security interest above all other collateral rights of creditors and parties-in-interest
including collateral rights to Debtors receivables/cash and proceeds derived therefrom.
2.3 IBC understands that PACA Trust Fund claims relates to:
Perishable agricultural commodities received by a commission merchant,
dealer or broker in all transactions, and all inventories of food or other
products derived from perishable agricultural commodities, and any
receivables or proceeds from the sale of such commodities or products. . .
PACA at 7 U.S.C. 499e(c)(2)
2.4 IBC does not deny or dispute the effect of the PACA claims and the PACA Trust
Fund. IBC seeks to establish and maintain its interest in Debtors property to the extent such
property is not subject to PACA Trust Fund claims or in excess of such rights and instruments.
2.5 Prior to filing date, on December 27, 2011, IBC made loan advances to Debtor
and more specifically, to Delta, in the amount of $450,000.00, which advance was deposited
within Delta Operating Account, Account Number 11509601 (the Operating Account). Prior
thereto, the Operating Account had a balance of $80,546.98, which increased to a balance of
$530,546.98 as a result of the IBC advance. Deposits within the Delta Operating Account grew
to $805,223.00 on December 28, 2011 when a withdrawal transferred $62,000.00 to Debtors
Account Number 0011511801, and $730,000.00 was transferred to Delta Account Number
3804027101, leaving a balance within the Delta Operating Account of $13,223.00. Subsequent
thereto, through January 10, 2012, Delta Operating Account balance increased to the sum of
$478,965.34.
2.6 IBC does not object to the utilization of PACA Trust Funds in the amounts as
proposed within the PACA Trust Fund Motion to the extent that monies to be utilized do not
constitute IBC cash collateral. IBC does oppose the use of IBC cash collateral and in
particular any funds contained within Debtors accounts which are not considered to be PACA
Trust Funds. IBC objects to the use of IBC loan proceeds in the amount of $450,000.00, any
funds on deposit in accounts not owned by Delta or Superior Tomato-Avocado, Ltd., or funds
within the Alted, Ltd. and Staci Properties, Ltd. accounts. In addition, IBC objects to use of any
fees within the cashiers check issued by IBC in the approximate amount of $27,000.00 and
requires that all such funds be segregated and insulated from use as PACA Trust Funds.
PRAYER
WHEREFORE, PREMISES CONSIDERED, IBC respectfully requests upon due
consideration, this Court:
(i) authorize the use of PACA Trust Funds, for budgeted expenses;
(ii) segregate IBC collateral and loan proceeds apart from PACA Trust
Funds;
(iii) segregate any non-PACA Trust Fund claims;
(iv) and provide IBC such other relief at law or in equity to which it may be
justly entitled.
Respectfully submitted,
MARTIN &DROUGHT, P.C.
2500 Bank of America Plaza
300 Convent Street
San Antonio, Texas 78205-3789
(210) 227-7591 / (210) 227-7924
By: /s/ Michael G. Colvard
Michael G. Colvard
State Bar No. 04629200
ATTORNEYS FOR INTERNATIONAL
BANK OF COMMERCE
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the above and foregoing instrument was
forwarded via United States Mail, First Class, postage prepaid, to the parties listed on the
attached service list on January 23, 2012.
/s/Michael G. Colvard
Michael G. Colvard
12-50073-lmc Doc#45-1 Filed 01/23/12 Entered 01/23/12 13:16:08 Exhibit 1-Loan
Agreement 7.17.1998 Pg 1 of 37
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LOAN AGREEMENT
This Loan Agreement is made by and mnong INTERNATIONAL BANK OF
COMMERCE (the "Lender"),DELTA PRODUCE MARKETING, INC., A TEXAS.
CORPORATION (''Borrower", whether one or more) and SCOTT JENSEN, AN INDIVIDUAL
("Guarantor", whether one or more), with respect to that certain loan in the original principal
amount of TWO MILLION AND N0/100 DOLLARS ($2,000,000.00), to Borrower from
Lender ..
ARTICLE I
DEFINITIONS .
For purposes of this Loan Agreement; the following terms shall have. the respective meanings
assigned to them.
1.01 Advance. The term "Advance" shall mean a disbursement by Lender 6{ any of the
proceeds of the Loan.
1.02 Affiliate. The term "Affiliate" shall mean any Person that, directly or indirectly,
controls, or is controlled by or under common control with, another Person. For the pi.rrposes of
this defmition, "control" (including the terms "controlled by" and "under common control wjth"),
as used with respect to any Person,. means the power to direct or cause the direction of the
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management and policies of such Person, directly or indirectly, whether through the ownership
of voting securities or by contract or otherwise ..
1.03 Annual Financial Statements. The term "Annual Financial Statement" shall mean the
aruma! Certified financial statements of a Person, as of the end of such Person's fiscal year (being
the Fiscal Year unless otherwise designated by such Person for federal income tax purposes),
including all notes thereto, which statements shall include a balance sheet as of the end of such
fiscal year, and an incorrie statement, all setting forth incomparative form where applicable the
corresponding figures. from the previous. fiscal year, all prepared in conformity with GAAP
consistently applied, except that Annual Financial Statements of individuals do not have to be in
conformity with GAAP so long as they are.in a form otherwise acceptable to Lender.
1. 04 Borrowing Base. The term "Borrowing Base" means the sum of (i) eighty percent (80%) ~
of all Eligible Accounts Receivable and (ii) fiftY percent (50%) of all inventory of BorroweL
1:05 Bnsiness Day. 'Ibe term ;,Bushi.ess Day" shall meana day when the main office of Lender
open for business in San Antonio, Texas.
1.06 Capital Expenditures. The term "Capital Expenditures" shall mean all expenditures deemed
capital expenditures as evidenced by Borrower.' s financial statements for any given period during
the term of the Loan.
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1.07 Cash Flow. The term "Cash Flow". shall mean the sum of (i) all net income of Borrower
as determined in accordance with GAAP, after accrual of applicable taxes to Governmental
Authorities, plus (ii) depreciation, depletion, obsolescence and amortization of property in
accordance with GAAP, less (iii) capital expenditures, less (iv) all djvidends distributions to
the shareholders of Borrower. . . . . . .
1.08 Cash Flow CoyerageRatio. The term "Cash Flow Coverage Ratio" shall mean, with
respect to any period, the ,ratio of: (a) the sum (i) the Net Income of the Borrower for such period,
(ii) interest expense deducted iii determining such Net Income, (iii) depreciation and deferred taxes
', /deducted in determining such Net Income; and (iv) other noncash items deducted from .revenue
V in determining such Net Income, to (b) the sum of (i) Current Maturities of Long Term Debt
during such period, (ii) total interest expense of Borrower (including capitaiized interest) for such
. . period, (iii) dividends paid to Borrower's shareholders during such period, and (iv) advances to
Borrower's shareholders or employees during such period and capital expenditures during such
period.
. ' .
. 1.09 Cash Flow Recapture Amount. The term "Cash Flow Recapture Amount" shall mean
. seventy-five percent (75%) of (a) the sum of (i) all Net Income of Borrower for such period, (ii).
depreciation and deferred taxel deducted in determining such Net Income and (iii) interest expense .
deducted in determining such Net Income less (b) the sum of (i) Current Maturities of Long Term
Debt made during such period .and (ii) total interest expense of Borrower (including capitalized
. interest) for such period.
1.10 Certified. The term "Certified" shall mean cer;tified as true and correct by the Person or
a duly authorized officer or representative of the Person providing the Financial Statements or
. other financial information to Lender.
1.11 Chapter One. The term "Chapter One" shall mean Chapter Orie of the Texas Code,
as in effect on the date document using such term was executed ..
. .
1.12 Collateral. The term "Collateral" shall mean all property of 'tangible or
intangible, real, personal or mixed; whether now owned or hereafter acquired, and nowor.
.hereafter subject to or intended to be subject to the Security Instrumenis.
1.13 Consolidated .. The term "Consolidated" shall, with respect to any period, the
consolidation of financial information of Borrower and Affiliate(s). . .
1. H Corporation. The term "Corporation" shall mean corporations, partnerships, joint
ventures, joint stock associations, business trusts and other business entities.
1.15 Current Maturities of Long Term Debt. The term "Current Maturities of Long Term
Debt" shall mean all principal sums owed during the next twelve {12) month period on Borrower's
long tertn debt (including capital lease obligations) as reflected in Borrower's Certified Annual
Financial Statements or monthly interim Financial Statements, consistently applied, and in every . )
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event in accordance with GAAP.
1.16 Current Assets; The term "Current Assets" shall mean to the extent permitted by. and as
determined. in accordance with GAAP, shall include all (1) cash on hand or in transit or on deposit
in any bank or trust company which has not suspended business; (2) accounts receivable; and (3)
such:other assets as; in accordance with GAAP, would be included in "current assets."; all after
d.eduction of adequate reserves in each where a reserve is proper under GAAP; provided,
however, that, notwithstanding the foregoing, in computing Current Assets there shall be excluded
(a) all Investments; (b) all franchises, licenses, permits, patents, patent applications, copyrights;.
trademarks, trade names, good will, experimental or organizational expense and other like .
intangibles; (c) any assets which are pledged or encumbered aS security for or for the purpose of
paying any obligation (other than the Notes) which is not included in Current Liabilities; and (d) .
all loans, advances and other receivables from offjcers, stockholders; directors or employees.
1.17 Current Liabilities. The term "Current. Liabilities" shall mean all (a) Indebtedness
maturing.on demand or within one year after the date as of which such determination is made; (b)
final maturities and prepayments of Indebtedness and sinking fund paymentS required to be made
in: respect of any Indebtedness within one year after said date; (c) taxes payable or accrued as
estimated and deferred income taxes due for tlie fiscal year in which such determination is made
arising from differences in reporting depreciation and other non-cash charges for tax purposes and
for corporate financial purposes; (d) accrued liabilities; (e) payments required to be made with
respect to capitalized leases within one year of said date, and (f) all other items which in
accordance with GAAP would lie included as Current Liabilities.
.1.18 . Debt. The term ."Debt" shall mean Borrower's total liabilities, determined in accordance
with GAAP.
1.19 Debtor Relief Laws. The tenn "Debtor Relief Laws" shall any
:liquidation, conservatorship, bankruptcy, moratorium, insolvency; reorganization, or similar laws
affecting the rights or remedies of creditors generally, asin effect from time to time.
1.20 Eligible Accmmts Receivable. The term "Eligible Accounts Receivable" shall mean .
accounts receivable owed to Borrower which are no more than sixty (60)days delinquent. ....---
1.21 Event of Default. The term "Event of Default" shall mean:
(a) . A failure by Borrower to make any payment ofprincipal or interest on the Note
when due, whether matured by acceleration or otherwise;.
(b) A failure by Borrower or Guarantor to comply with ariy of the other terms or
. conditions specified herein or in any other Security Instrument;
(c) The incorrectness of any material representation or warranty made by Borrower or
Guarantor to Lender in any of the Security Instruments;
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(d) The appointment of a receiver, trustee, custodian, conservator, or liquidator, or
other similar official forBorrower or Guarantor, any of the Property, or any other property of
Borrower or Guarantor;
.(e) . Borrower or Guarantor shall generally not pay their debts as they become due or
shall 2.dmit in writing their inability to pay their debts, or shall make a general assignment for the
benefit ofcreditors;
(f) Borrower or Guarantor shall commence any case, proceeding or other action
seeking reorganization, arrangement, adjustment, liquidation, dissolution or composition of
Borrower or Guarantor of their debts under any Debtor Relief Laws;
(g) Any case, proceeding or other commenced against Borrower or Guarantor
.. seeking to have an order for relief entered against Borrower or Guarantor, as the case may be, as
debtor, . seeking a . arrangement, adjustment, liquidation, dissolution or '
composition. of Borrower or. Guarantor of their debts under Debtor Relief Laws; or seeking an
appointment of a receiver, trustee, custodian or other similar official for Borrower or Guarantor
for all or any of the.Collateral, or any other property of Borrower or Guarantor, and such case,
proceeding or other action results. in the entry of an order for relief.
(h) Borrower or Gu&antor shall concealed, removed, or permitted to be
orremoved, any part of its property, with intent to hinder, delay or defraud its creditors or any
of them, or made or suffered a transfer of any of its property which inay be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or shaii have made any transfer of its property
to OJ: for the benefit of a creditor at a time when other creditors similarly situated have not been
paid; or shall have suffered or permitted, while insolvent, any creditor to obtain a lien upon any
of its property through legal proceedings which is not vacated within sixty (60) days from the date
thereof;
(i) An occurrence of any event or condition described in the Note, this Loan
Agreement or any other security instrument that would result in an acceleration of the Note or
constitute an event of default thereunder;
. . . . . . . . . . :. . . . . . _. .
(j) . The liquidation, termination, dissolutiod, or death of Borrower or Guarantor;
(k) If or Guarantor is a partnership, a default by any general partner under
the Partnership Agreement; or .
(I) . An occurrence of any event or condition described in the Joan documents
evidencing any other indebtedness of Borrower or Guarantor to Lender that would constitute an
event of default thereunder.
1.22 Financial Statements. The term "Financiat Statements" shall mean such balance sheets
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profit and loss statements, reconciliations of capital and surplus, changes in financial condition,
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schedules of sources and applications of funds, and other financial information.ofBorrower and
of Guarantor, as shall be required by Lender; from time to time, which statements of the Borrower
shall be prepared .in conformity witll GAAP for the stated period.
1.23. Year: term ''Fiscal Year" ofthe Borrower period
October 1 of each calendar year through and including September 30. of the next succeeding
calendar year.
1.24 . Generally Accepted 'Ji .. ccounting Principles .. The term "GAAP" shall mean, as to a
particular Person, such accounting practice as, conforms at the time to geneni.lly accepted
accpunting principles, consistently applied. GAAP means those principles and practices (a) which
are. recognized as such by the Financial Accounting Standards Board, (b) which are applied for
all periods after the date hereof in a manner consistent with the manner in which such principles
and practices were applied to the. most recerit financial statements of the relevant Person furnished .
to Lender, and (c) which are consistently applied for all periods after the date hereof so as to
reflect properly the financial condition, and results of operations and changes in financial position, .
6f.such Person. If a change in any accounting principle or practice is implemented by the
Financial Accounting Standards Board, then all reports and financial statements required hereunder
may be prepared in accordance with such change only after written notice of such change is given
to Lender.
1.25 Governmental Authority. The term "Governmental Authority" shall mean the United
! . States, ...the State,. the County, the City, or any other political subdivision in which the Collateral
is located, and any other political subdivision, agency, or, instrumentality exercising jurisdiction
over Borrower, Affiliate, or the Collateral.
1.26 Governmental ReqJ.Jiremenrs: The term"Goverilmentli.I Requirements" shall niean
ordinances, rules, and regulations of a Governinental Authority applicable to Borrower, Affiliate,
or the Property. . .
1.27 Guarantor:. The term "Guarantor" shall mean all parties named Guarantor in the first
paragraph of the Loan Agreement.
1.28 Guaranty: The term "Guararity" shall mean each Quaranty, in Proper Form, to be
executed by Guarantor in favor of Lender,
1.29 Indebtedness. The term "Indebtedness" shall mean and include (1) all items which in
accordancewith GAAP would be included on tli.e liability side of a balance sheet on the date as
.of which Indebtedness is to be determined (excluding capital stock, surplus, surplus reserves and
deferred. credits), (2) all guaranties, endorsements and other contingent obligations in respect of;
or any obligations to purchase or otherwise. acquire, indebtedness of others,. and (3) all
. indebtedness secured by ariy Lien existing on any interest in Collateral owned subject to such Lien
whether or not the indebtedness secu.red thereby shall have been assumed by Borrower; provided
that such term shall not mean or include any indebtedness in respect of which monies sufficient
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to pay and discharge the same in full (either on the expressed date of maturity thereof or on such
earlier date as such indebtedness may be duly called for redemption and. payment) shall be
deposited with a depository; agency or trustee acceptable to Lender in trust for the payment
thereof and which monies are not reflected as Current Assets of Borrower on its Financial .
. Statements:
1.30 Insurance Policies. The terin "Insurance shail mean:
(a) . All risk in Proper Form, as determined by Lender, in the amount of at .
. least equal to the Loan amount or in such a.dditional amounts as Lender may require, providing
ali risk coverage on the premises in which Borrower. conducts its business, and, if reasonably
requested by Lender, to Include the perils offload, earthquake, business interruption (in the .
amount of $250,000.00 or Jiiore) and other risks; . . . .
(b). Liabilityinsurance in an.amount of not less than $1;000,000.00 and otherwise in
Proper Form andproviding its coverage is related to its operation of the Collateral.
. . . . .
All shall be issued on foruis and by companies satisfactory to Lender
and shall have a provision giving Lender thirty (30) days prior written notice of cancellation or
.. material .change of the coverage and otherwise be. in Proper Forin. . .
L31 Lender. The term "Lender"shairmean the Lender named in the first paragraph of this
Loan Agreement.
1.32 Lien. The term "Lien" shail mean ariy mortgage, pledge, charge, encumbrance,. security
interest; collateral assigillnent oi: other lien or restriction of any kind, whether based on common .
'law, constitutional provision, statute <ir contract; and shalr include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title
exceptions.
. . ..
. 1.33 Lillul. The term "Loan" shall mean the Loan by Lender toBmrower on even date
herewith, in an amount not to exceed the principal sum set forth in the first paragraph of this Loan
Agreement.
1.34 Net Income. The term "Net Income" shall have the meaning determined in accordance
. with GAAP.
1.35 Net Worth. The term "Net Worth" shall mean Borrower's total assets minus total .
liabilities, each to be determined in accordance with GAAP.
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1.36 The term "Note" shali mean the Note from Lender dated of even
which evidences the Loan.
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1.37 Person. The term "Person" shall mean ahy individual, corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity,
1.38 PrQper Form.
.to Lender.
The tern\ "Proper Form" shall meanin aform and substance satisfactory
1.39 Security 1nstruments: The term "Security shall mean this Loan Agreement;.
the Note, the Guaranty, 'the security Agreements, and such other instruments or documents
evidencing, securing, or pertaining to the Loan as. shall, from time to time be executed and
delivered by Borrower, Guarantor, or any other party to Lender pursuant to this Loan Agreement
or otherwise ...
2.0l The Loan.
. ARTICLEIT
.AGREEMENTS OF LENDER
' . . ..
(a) . Loan. Subject the terms and conditions set forth herein prior to closing, Lender .
hereby .agrees to lend TwO MILLION AND NO /100 DOLLARS ($2,000,000.00) (the "Loan").
and Borrower hereby agrees to borrow TWO MILLION AND N0/100 DOLLARS.
($2,000,000.00). .
. . . . . . .
(b) promk;sory note shall bear interest at the rate of the.New York Prime
.. Rate, floating, as defined in the Note, plus one percent and otherwise .
as :set-forth in the Note.
(c). .. Loan Fee, One Half of one percent of the Loan or $10,000.00payable upon
closing 'of the Loan. Legal fees paid by Borrower.
. 2.02 Conditions to the I .oim .. The obligations ofLender to make the Loan are subject . .
satisfaction of the following conditions:
(a) The Borrower and Guarantor shall have delivered to Lender such certificates and
other documents. relating to the transaction. herein contemplated and such other information :
. relating to the.Borrower or Guarantor, as the case may b_e, as the .Lender may' require .
. (b) . Lender shall have received the Security Instrument;; each which. shall be in
Proper Form and duly executed.
(c) . Lende; shali have received the Note; which shall be in Proper Form and been duly
executed by Borrower .
. (d) Borrower shall have P<tid all Lender's including its legal feeS.
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(e) ... Except where expressly authorized to the contrary, Lender shall have received ... ,
. satisfactory evidence to the Lender that the Security Instruments create first, prior and enforceable .
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liens against Collateral described in .the-Security Instruments.
(f) .. Lender shallhavereceivedthe each of which shall be in
Proper Forin and duly executed.
(g) . Lender have received an executed .copy of each if any, of any
Governmental Authority or other person which, irt the opinion of the Lender, is reguired in
connection with the transactions contemplated hereby.
(h) At the time of the Loan, all legal matters incident to the transactions herein
contemplated shall be satisfactory to Lender.
(i) ... other as Lender may require.
REPRESENTATIONS AND BORROWER AND GUARANTOR
Borrower and Guarantor hereby warrant the following to be true, ;:ts the case
. may be as of the date of the execution hereof: .
3.01 Th(( Statements. The Statements ai:-e true, correct, and complete in all .
material respects as of the da:tes specified therein and fully and accurately present the financial
. condition of Borrower and, if required, of Guarantor as of the dates specified. No material-
adverse change has occurred in the financial condition of Borrower or Guarantor since the dates
of the financial Statements. . .
3.02 .Suits Actions Etc .. There are Ji.o material actions, suits, or proceedings pending or; to
the knowledge of Borrower and Guarantor, threatened in any court or before . or by any
Governmental Authority against or affecting Harrower, Guarantor, or the Property, excepi: as
described in writing to Lender, or involving the validity, enforceability, or priority of any of the
Security Instruments, aUa:w or in equity. The consummation of the transactions contemplated
. .hereby, and the performance of any of the terms and conditions .hereof and of the other Security
. : . Instruments, will not result in a breach of, or constitute a default in,. any mortgage, deed of trust,
lease, 'promissory note, loan agreements, credit agreement, partnership agreement; or _other:
agreement to which Borrower or Guarantor is a party or by which Borrower may be bound or
affected.
3;03 . Valid and Binding Obligation. All of the Security Instruments, and all other documents
referred to herein to which Borrower is a party, upon execution and delivery will constitute valid
and binding obligation of Borrower, and 'Guarantor, enforceable in accordance with their terms
except as limited by Debtor Relief Laws..
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3.04 Title to the Property. Borrower holds full legal and equitable title to the Collateral.
3 :05 Loan Purpose. Borrower has requested the extension of credit to be represented by the
Loan for business, commercial, investment or. other similar purpose and not primarily for
personal, family, household or agricultural use.
. 3.06 .. Disclosure. To the knowledge and Guarantor,' there is no fact that Borrower
has not discl<;>sed to Lender in writing that could materially adversely affect the property, business
or financial condition ofBorrower or the Collateral.
3:07 Inducement to Lender. The representations and. warranties. contained in the Security
' Instruments. are made by as an to Lender to make the Loan and Borrower
understands that Lender . is relying , ort such representations and warranties . and that such
representations. and warranties shall survive any bankruptcy proceedings involving Borrower, .
Guarantor, or the CoUateral; .
3.08 Organization and Power (Applicable tq Corporation Borrower).
(a) is a duly organized, validly existing under the laws of the state of its
incorporation and in good standing. under the laws of the state of its incotporation and the laws
of the State of Texas; and . .
. (b) has compiied with all conditions prerequisite to its lawfully doing business in the
state where the Collateral is situated; and
. . . . . .
(c) has all requisite power and all governmental of authority,
licenses, permits, qualifications, and documentation to own, lease, and operate its properties and
to carry on its business a:s now being, and as proposed to be, conducted.
3.09 Organization and Power (Applicable to Padnersliip or Joint Venture Borrower). Borrower
. is duly organized and validly existing under applicable State laws, and all Security Instruments
and other loan documents are within Borrower.'s powers, have been duly authorized by all
requisite action and are not in contravention of law or the power of Borrower's partnership or joint
. venture agreement, as the case may be. . . .
. . .
3.10 of Borrower. Borrower shall preserve and keep in full force effect
.Borrower's existence, rights, franchises, and 'trade names.
3.11. Compliance with Laws. Borrower, the Collateral, and the use thereof by Borrower shall
comply with all laws, rules, ordinances, regulations, covenants, conditions, restrictions, orders
and decrees of any governmental authority or court applicable to Borrower or the Collateral and
its use, and Borrower shall pay all fees or charges of any kind in connection therewith ..

9
3.12 Financial Information.
. . . . . . . . . . . . . . . . .
A. Borrower shall to Lender,. within one hundred twenty (120) days after the..
end of each calendar.year the income.and expensestatements, in Proper Form,.
itemizing the income and expenses of the Borrower. Within one hundred twenty.
{120) days of the filing of Borrower's tax return; Borrower shall deliver to Lender
its annual financial statement, together with a copy of its tax return. Borrower
. agrees that it shali file its tax return in a timely manner provided, however, the
filing of such tax return shall be subject to extensionsthat are filed timely.,
B. Additionally; Borrowe; shall forward to Lender monthly in
Proper Form which may be unaudited, such statements to be delivered to Lender
... within fifteen (15) days after the end of each. month during the term of this Note.
C. shall at annually submit of its financial and tax
. returns to Lender; which ihfonnation shalf also be furnished to Lender within one
hundred (120) days of the filing of Borrower's tax return. Inthe event that
. Borrower is in default, Lender Teserves the right to froni time to time request
additional financial information of.either Borrower or Guarantor. All financial
Statements of the Borrower shail be prepared in accordance with certified
, to be true and correct by the person delivering them and otherwise be in Proper .
Form. '
. 3.13 Hold Harmless. Borrower shall deferid, at Borrower's own.cost and expense; and hold
Lender hitrmless from any proceeding or claim affecting the Collateral or the Security Instruments
imd other loan documents: All costs and expenses incurred by Lender: in protecting its
hereunder, indudingalfcourt costs and reasonable attorneys' fees, shall be borne by Borrower;
3.14 .. Further Assurances. upon the request of Lender, shall execute,
deliver,. and record such . further instruments and do such further. acts as. may be necessary,
desirable or proper to carry out the pillposes of the Security Instruments and other loan documents
. and to subject the liens and security interests thereby and property intended by the terms
thereof to be covered thereby, including specifically; but without limitation, any renewals,
additions, substitutions, replacements, improvements, or appurtenances to the Collateral:
ARTICLE IV
.GUARANTY .
. . The Loan be guaranteed by SCOTT JENSEN and evidenced by a Guaranty in Proper .
Form:
10

. .. 1

. ARTICLEV . .
COVENANTS AND AGREEMENTS OF BORROWER
Borrower- hereby covenantS ahd agrees as follows:
5.0i Compliance with Governmental ReqJJirements. Borrower shall, comply with all.
Governmental Req11irerrients and deliver to Lender evidence thereof. Borrower assumes full
. responsibility for the compliance of the Collateral with all Governmental Requirements, .
. notwithstanding any approvals by Lender.
. . . . . ..
5.02 'Notices byGovermenta] AuthoritY' Fire and Casualty Loss, Etc. Borrower shall timely.
comply with and promptly furnish to Lender true and complete copies of any official notice or .
claim by any Governmental AuthoritY pertaining to the Collateral. Borrower shall promptly notify
Lender of any fire. or other casualty or any notice on:a.king or eminent domain action or
proceeding affectint the_ Collateral. .
5.03. oi:herLiens and IndebtedneSs. Borrowershall not suffer to or permit any
lien upon the Collateral, except those liens securing the Loan; provided, however, that the .
Borrowe( may create or suffer to exist-liens for taxes, but only to the extent that payment thereof :
. shali not at the time be due and .further provided, however, that the Lender consents 'to the lien
on all or a portion of i:he CoJI<i.teral (which may exist as of the date hereof or in the future) granted
. . to Bernard Jensen, said lien to be made expressly subordinate to the liens created by the Security
.. InstrumentS.
5. 04 . Costs and Expenses. Borrower shall pay when .due all costs and expenses. required by this
Loan Agreement, including, without limitation, - .
-. (a) all taxes and assessments applicable to the Collateral;
(b) all fees for filing or recording the Security Instruments;
(c) and commissions lawfully drieto brokers; salesmen, and agents of Borrower.
in conriection with the Loan, or the Collateral; and
(d) all fees. and expenses of counsel of Lender.
. . . . . . . . . . .
'5.05 Additional DocumentS. Borrower ahd shall execute and deliver to Lender, from
time to time as requested by Lender; such other documents as Lender may deem to be necessary
to provide the rights and .remedies to Lender granted or provided for by the Security Instruments;
provided, however; such additional documents shall .not increase or create new rights or remedies
.. or otherwise expand the rights and remedies of Lender under the original documents.
. . .
5.06 Inspection ofikioksand Records; Borrower shall permit Lender, at al!reasonable times,
to examine and copy the books and records of Borrower pertafning to the Loan, in particular
11
related to the inventory, receivabies and payables of
5.07 .. Defen;e of Actions. Lender may(but shall not be obligatedto) commence, appear in, or
defend any action or proceeding purporting to affect the Loan; the Collateral, or the respective . .
. rights and obligations of Lender and Borrower pirrsuant to this LOan Agreement. Lender may (but
shall not be obligated to) pay all necessary expenses, including reasonable attorney's fees and
. e"xpeiJSes incurred in connection with such proceedings or actions, which Borrower agrees to repay
to Lender upon demand: . .. . .
5.08 . Payment of Claims. Borrower shall promptly pay or cause to be paid when due all costs
and. expenses. ilicurred. in connection with the. CollateraL . Notwithstanding anything to the contrary ..
contained in this Loan Agreement, Bcn7ower .
. (a). may contest any tax or speci:l! a<>sessinents levied by. Governmental Authority;
,(b) may contest the. enforcement of or .compliance with any. Governmental
Requirements, and such conteSt on the part of BorroWer shall not be a default hereunder and shall
not release Lender from its obliga,tions to make any Advance hereunder; provided, however, that
. .. during the pendency of any such contest, Borrower shall furnish to Lender an indemnity .bond with
corporate surety satisfactory 'to Lender or other security acceptable to them ih ah amount equal
to the amount being .contested plus a reasonable additional sum to cover possible costs, interest,
and penalties, and provided further that Borrower sh&ll pay any amount adjudged by a court of .
competent jurisdiction to be due, with all costs, interest, and penalties thereon, before such
judgment becomes a lien on the Collateral.
5.09 Liens. Except as . set. forth above, Borrower shall not impose any other. liens or
encumbrances upon the. Collateral, without the prior written consent of Lender.

a ratio of Cash Flow Coverage Ratio for the immediately preceding twelve (12) month period of
.not less than 1. 75 (the "Minimum Cash Flow Coverage Ratio", which ratio shall be calc.ulated on
an.annual basis,. but shall be tested on a rolling quarterly basis as described below.
. (b) The. Cash Flow Coverage .Ratio shall be determined within thirty (30) days. after .. .
.. . /-' the last day of each September, December; March and June during the.term of the Loan with
, respect to the immediately preceding twelve (12) month period (each period referred to as .a "Cash
V .. Flow Coverage Ratio Period"). The Borrower shaH provide a certificate, along with alLnecessary
back-up information supporting such certificate (each such certificate referred toas a "Cash Flow.
Ratio Coverage Certificate") in form and substance satisfactory to Lender which Cash Flow Ratio
Coverage CertifiCate shall certify as to the Cash Flow Coverage Ratio during the Cash Flow.

.12.
Coverage Ratio Period. The Borrower covenants and agrees that the Cash Flow Coverage Ratio
may not be less than the Minimum Cash Flow Coverage Ratio for any Cash Flow Coverage Ratio
Period during the term of the Loan.
. . (c) .Notwithstanding anything set forth above to contrary, the first Cash Flow.
Coverage Ratio shall be determined for the nine (9) month period commencing on April 1, 1998
through and including December 31, 1998 (the "Initial Period"). The Cash .Flow Ratio Coverage.
Certificate for the Initial Period shall be provided to Lender on or before January 30, 1999. The
Borrower covenari.ts and agrees that the Cash Flow Coverage Ratio for the Initial Period may not.
be less thim the Minimum Cash Flow Coverage Ratio ..
(d) Subsequent to the determination made for .the Initial Period, the Cash Flow
.Coverage Ratio shall be calculated on the basis of twelve month periods as set forth i11 Section .
5.10 (b) above.
5.11 Additional Payment Obligations. Borrower agrees that in addition to the regularly
scheduled installments of principal and interest which are due and payable as described In the
. Note, Borrower shall make annualprincipl\1 reductions in an amount equal to the CashFlow
Recapture Amount. Each annual payment of Cash Flow Recapture Amount, if applicable, shall
be paid to Lender on or before, the date which is ninety. (90) days after the end of each Fiscal .Year
during the term of the Note, .c;.Qmillencingwith.fue Fiscal .Year. Each
. payment. of Cash . Flow Recapture Amount shall be accompanied by financial statements
describing, among other things, the Cash Flow Recapture Amount.
5.12 . Borrowing Base. Borrower agrees that the outstanding principal balance of the Loan at
.any time during the term of the Loan may not exceed the Borrowing Base. Borrower shall provide
.to Lender, within fifteen (15) days after each calendar month during the term of the Loan, a /
. Certificate, along with all necessary back-up information supporting such certificate (each such . v
certificate referred to as a "Borrowing Base Certificate") in form and substance satisfactory to the .
Lender whiCh shall indicate that the then outstanding balance ofthe Loan (the "Existing Balance")
is less thari or equal to the Borrowing Base. If, at any time during the term of the Loan, the
Existing Balance exceeds the Borrowing Base, thep. the Borrower agrees.to immediately reduce
the Existing Balance so that the Existing Balance .. is either equal to or less than the Borrowing
Base. . .
5.13 Lockbox. Borrower shall ensure that; during the term of the Loan, aU receivables owed
to Bortowershall be paid by all customers to a lockbox (''Lockbox") established by Borrower and . / .
maintained with the Lender. Prior to an Event of Default (as defined herein), and subject to the v
terms of this Loan Agreement and the other Security Instruments, Borrower shall be entitled to
utilize the funds deposited iri the Lockbox; provided, however, that upon an Event of Default (as.
defined herein), and subject to any notice and opportunity to cure granted to the Borrower; the
Lender shall be entitled to apply funds then maintained iri the Lockbox to reduce the then
outstanding delinquency or otherwise to cure such Event of Default or, irt the event of an
acceleration of the Note, to reduce all or a part of the outstanding principal. balance of the Note.
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5.14 Compensation. During the term of the Loan, Guarantor shall not receive an annual (--:c)
compensation (including salary, bonus and dividends) in excess of $300,000.00 (the "Maximum >
Compensation") without the Lender's prior written consent, which consent shal( not" be
unreasonably withheld to the extent the Borrower's Net Income in any Fiscal Year, in the
Lender's reasonable discretion, justifies. compensation in excess of the Maximum Compensation ..
.. . - . . ARTICLE VI .
RIGHTS ANb REMEDIES OF LENDER .
. . . . I . . . .
6.01 . Rights oflirider. Upon the occurrence o(a monetary Event of Default; Lender shall have.
the right, in addition to any other right or remedy of Lender, but not the obligation, to exercise
any remedy set forth in any of the Secirdty Instruments or any right authorized by the Uniform
Commercial Code of the State ofTexas .. Borrower hereby appoints Lender as the attorney-inc fact
of Borrower, with full power of st)bstitution, and in the name of Borrow'er, if Lender elects to do
so; upon the occurrence of lm Event of Default; to . . . .
(a) .. the name of on any checks or drafts representing of the .
Insurance Policies, or-other checks .or instruments payable to Borrower with respect to the
_ Collateral for the sole purpose ofpaymeht of the Notes; .
(b) . prosecnteor defend action or incident to the Collateral.; . and
(c) terminate the license granted to Borrower to collect the funds from the
give teceipts and releases therefore, and after deducting all expenses of collection, including
reasonable attorneys' fees, apply the net proceeds thereof to any Indebtedness as Lender may
elect; .
.. The power-of-attorney granted hereby is a power coupled with aninterestand irrevocable. .
-.Lender shall have noobligation to undertake any of the foregoing actions, imd i(Lender should .
do so, it shallhave no liability to Borrower for the sufficiency or adequacy of any such .actions
takenby Lender.
. . . . .
6. 02 Acc6!eration. Upon occurrence of im Even; of may, at its option,
declare the Loan immecti<itely due and payable without notice .of any kind.
6.03 . Funds. of Lender. Any funds of Lender used to cure any default hereunder shall be secured
by the Security Instruments and shall bear interest at the rate specified in the. Note or to applicable
after default thereunder.
6.04 No Waiver or Exhaustion .. No waiver by Lender of any of its rights or remedies
hereunder, in the other Security Instruments, or otherwise, shall be considered a waiver of any
other or subsequent right or remedy of Lender, no delay or omission in the exercise _or
enforcement by Lender of any rights or remedy of Lender; and, no exercise or enforcement of any
such rights or remedies shall ever be held to exhaust any rightor remedy of Lender;
'
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6. 05 Rights and of Sureties. Borrower waives any right or remedy which Borrower
may have or be able to assert pursuant to Chapter 34 of the Business and Commerce Code of the
State of Texas pertaining to the rights and remedies of sureties.
ARTICLE Vll
GENERAL TERMS AND CONDITIONS
7.01 Notices. Allriotices, demands, requests, and other coinmunicationnequir.ed or
.. hereunder shall be in writing and shall be deemed to have been given when presented personally
or deposited in a regularly maintained receptacle for the United States Postal Service, postage
. prepaid, registered or certified; return receipt requested addressed to Borrower or Guarantor or
. ):..ender, as the case may be as follows:
(a) . If to Borrower to:
Delta Produce Marketing, Inc ..
Attn: Steven Lefever, CPA
2001 So. Laredo
San Antonio, Texas 78207
(b) If to Lender, to:
International Bank of Commerce
Attn: Mr. Todd Rasco, Assistant Vi<;e President
130 E. Travis
(c) If to GuarantOr to:
Scott Jens<:<n
2001 So. Laredo
San Antonio,' Texas 7820'i
7.02 Entire Agreement and Modifications. The Security Instruments constitute the entire
understanding and agreement between the undersigned with respect to the transaction arising in
connection with the Loan and supersedeS". an prior written or oral understandings and agreem'ents
between the undersigned in connectiOn therewith. No provision cif this Loan Agreement or the
other Security Instrume_nts may be modified, waived, or terminated except by instrument in
:writing executed by the party against whom a modification, waiver, or termination is sought to
be enforced.
7.03 No Waiver. No waiver of ariy default on the part of Borrowt)r or any otherparty.hereto
or breach of any of the provisions of this Loan Agreeinerit or of any other instrument executed
in connection with the Loan shall be considered a waiver of any other or subsequent default or
.. breach, and no delay or omission in exercising subsequent default or breach, and no delay or
omission in exercising or enforcing the rights and powers herein granted shall be construed as a
waiver of such rights and powers,. and likewise no exercise or enforcement of any rights or powers
. 15
hereunder shall be held to exhaust such rights and powers; and every such right and power may
be exercised from time to time. Acceptance by Lender of partial payments shall not constitute a
waiver of the default by failure to make full payments. .
7.04 .. If any provision of this Loan Agreement is heid to be illegal, or
unenforceable under present, or future laws effective while this Loan Agreement is in effect,. the
legality, validity, and enforceability of the remaining provisions of this Loan Agreement shall riot
be affected thereby and in lieu of each such illegal, invalid, or unenforceable provision there shall
: be added automatically as a part. of this Loan Agreement a provision that is legal, valid and'
enforceable and as similar in terms to such illegal, invalid, or unenforceable provisions as inay ..
be possible. . If any of the Indebtedness shall be unsecured, the unsecured portion of the
Indebtedness. shall be completely paid. prior to the payment of the secured portion of such
Indebtedness, and all payments made on account of the Indebtedness shall be considered to have
been paid on and applied first to the complete payment of the unsecured portion of .the
. .Indebtedness.
7.05.. Modificatfmi . The Securityinstruments.ahd loan documents.may
only be modified or terminated by a written instrument or instruments executed by the party
. against . which enforcement of the . modification or termination is asserted.. Any alleged
modification or termination that is not so documented shall not be effective.as to any'party.
7.06 No Parmership,. Nothing contained in the other loan docmnehts
. is intended to create any partnership; joint venture or association between Harrower arid Lender,
.. or ln any way make a COcprincipal with Borrower with reference to the Collateral, and any
inferences to the contrary are hereby expressly negated. .
. . . . . . ..
7.07 Election of Remedies. Lender shall have all of the rights imd remedies granted in the
Security Instruments and available at Jaw or in equity, and these same rights and remedies shall
be cumulative and may be pursued separately; successively', or concurrently against Borrower,
Guarantor, or any property covered under the .Security Instruments at the sole discretion of
Lender. Tiie exercise or failure to exercise any of the same. shali not. constitute a waiver or release
thereof or of any other right or remedy, and the same shall he non-exclusive.
7.Q8 and Substance .. All documents, certificates, insurance policies; and other items
required under this Loan Agreement to be executed and/or delivered to Lender shall be. in form
. and substance satisfactory to Lender.
7.09 Limitation on Interest. All agreements between Borrower and Lender, whether now
existing or arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of demand or acceleration of the maturity of the Note or
otherwise, sh:i.II the interest paid, or agreed to be paid to Lender exceed the maximum permissible
under applicable law. If from any circumstances whatsoever, interest would otherwise be payable
to Lender at a rate in excess of that permitted under applicable law, then, the interest payable to
. the Lender shall be reduced to the maximum amount permitted under applicable law, and if from
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any circumstance Lender shall ever receive anything of value deemed interest by applicable law
which would exceed interest. at the highest lawful rate, an amount equal to any excessive interest
shall be applied to the reduction of the principal amount owing under the Note and not the
payment of interest, or if such excessive interest exceeds the unpaid balance of principal of the
Note, such excess sha!I be refunded to the Borrower. A!Linterest paid or agreed to be paid to
Lender shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and
. spread throughout the full period until payment in full of the principal of the Loan (including the
period of any renewal or extension thereof) so that interest thereon for such. full period shall not :
exceed the. maximum amount permitted by applicable law . This paragraph shall control all
.agreements betweenthe Borrowe' and the Lender.
7.10 No Third Party Beneficiary. Th;s Loan is for the sole benefit of Lender,
Borrower and Guarantor and is not for the benefit of any third party, except for any successor or
assign cif Lender.
7.11 .Number and Gender. herein, iiiclude the piural.
and the singular' and the use of. any gender shall be applicable io all genders. The duties,
covenants, obligations; and warranties. of Borrower in this Loan Agreement shall.be joint and
.several obligations of Borrower, and of each Borrower if more than one.
7.12 Captions. The captipns, and used in this Loan Agreement are for
convenience only and do not in any. way affect, limit; amplify' or modify the terms and provisions.
hereof. .
. 7.13 Applicable Law .. This LoanAgreement and the Instruments shall be governed by
and construed in accordance with the laWs of the State of Texas and the laws of the United States
applicable to transactions within such State.
7.14 Conflicts Between Security Instruments .. In the event of the pwvisions .
of this Loan Agreement and those of any other Security Instrumeqt, the terms and conditions of
this Loan Ag,eement shall control, except that nothing herein shaU be construed. to limit or
preclude any of the Lender's rights. orremedies contained in the Note.
7.15 NOTICE TO LENDER UPON BREACH. BORROWER AND GUARANTOR AGREE .
TO GIVE LENDER WRITTEN NOTICE OF ANY ACTION OR INACTION BY LENDER OR .
ANY AGENT OR ATTORNEY OF LENDER IN CONNECTION WITH THIS AGREEMENT .
OR THE LOAN THAT MAY BE ACTIONABLE AGAINST LENDER OR ANY AGENT OR
ATTORNEY OF LENDER OF A DEFENSE TO PAYMENT OF THE LOAN FOR ANY
REASON, INCLUDING,. BUT NOT LIMITED TO, COMMISSiON . OF A TORT OR
. VIOLATION OF ANY CONTRACTUAL DUTY OR DUTY IMPLIED BY LAW.
BORROWER AND GUf\.RANTOR AGREE THAT UNLESS SUCH NOTICE IS DULY GIVEN
AS PROMPTLY AS P.OSSIBLE (AND IN ANY EVENT WITHIN NINETY (90) CALENDAR
DAYS OR IF A LONGER PERIOD IS REQUIRED BY LAW IN ORDER FOR THIS WAIVER .
TOBE EFFECTIVE SUCH LONGER PERIOD) AFTER BORROWER OR GUARANTOR HAS
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. ..
. KNOWLEDGE OR WITH THE EXERCISE OF REASONABLE DILIGENCE SHOULD HAVE
. HAD KNOWLEDGE OF ANY SUCH ACTION OR INACTION, BORROWER AND
GUARANTOR SHALL NOT ASSERT, AND BORROWER AND GUARANTOR SHALL BE
DEEMED TO HAVE WAIVED, ANY .CLAIM OR DEFENSE ARISING THEREFROM.
7.16 Multiple Counterpart Originals. This Agreement may be executed in a number of identical
counterparts which, taken together, shall constitute collectively one (1) agreement; but in inaking
. proof of this Agreement, it shall not be necessary to produce or account for more than one such
counterpart.
. . . . . . . . .
7.17 No Oral Agreements. if'the amount involved in your loari exceeds $50,000.00
in value, then Texas law requires that you be notified of the following: THE WRITTEN LOAN
AGREEMENT REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
. MAY NOT BE CONTRADICTED' BY EVIDENCE OF PRIOR, CONTEMPORANEOlJS,-GR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. TBEREARE NO UNWRITTEN
. ORAL A,GREEMENTS BETWEEN THE PARTIES.
7.18 Successors and Assigns. This Agreement is. binding on the parties hereto and their
respective .heirs, . successors and assigns; however, neither Borrower nor Guarantor may assign .
theii: rights hereunder without the prior written consent of Lender, which Lender may withhold
in absolute discretion and there are no third party beneficiaries to this agreement.
IN WITNESS WHEREOF, the Borrower or any Guarantor and Lender have .caused this
Agreement to be. duly executed by their respective officers thereunto duly authorized as of the
j7 da:)rof. July. , 1998.
BORROWER:
LENDER:.
. MARKETING, INC.
. .___. '
... .. . .. .
.
Title: Pfui'SIDENT
.. OFCOMMERCE
By: . . (f?<. .
TODD RASCO
. 18
. ...--......,
\
. :1
DELTA PRODUCE MARKETING, LP.
BORROWING BASE CERTIFICATE
. MONTH ENDED - ~ DECEMBER 2001
I. . ACCOUNTS RECEIVABLE $3,729;921
LESS AMOUNT OVER 59 DAYS -$56,824
TOTAL ELIGIBLE ACCOUNTS RECEIVABLE $3,673,097
ADVANCE RATE 80%
AVAILABLE ACCOUNTS RECEIVABLE $2,938,478
II. TOTAL INVENTORY $774,905
ADVANCE RATE 50%.
AVAILABLE INVENTORY . $387,452
. Ill. TOTAL BORROWING BASE $3.325
1
930
IV . PRINCIPAL BALANCE ON TERM NOTE.. $895.168
IN WITNESS THEREOF, the undersigned has executed this document below on behalf.of Delta
Produce Marketing, inc. and certifies that the foregoing is true and correct.
end financial statEiments with this Borrowing Base Certificate.
Please attach month
DATE: 01/22/2001
. ~ \ b -
. . "I
. ,
NAME: Melinda Day-Harper, CFO
!
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'
LOAN AGREEMENT
This Loan Agreement is made by and among INTERNATIONAL BANK OF
COMMERCE (the "Lender"),DELTA PRODUCE MARKETING, INC., A TEXAS
CORPORATION ("Borrower", whether one or more) and SCOTT JENSEN, AN INDIVIDUAL
("Guarantor", whether one or more), with respect to that certain Joan in the original principal
amount of TWO MILLION AND N0/100 DOLLARS ($2,000,000.00), to Borrower from
Lender.
ARTICLE I
DEFINITIONS
For purposes of this Loan Agreement, the following terms shall have the respective meanings
assigned to them.
1.01 Advance. The term "Advance" shall mean a disbursement by Lender of any of the
1.02 Affiliate . The term "Affiliate" shall mean any Person that, directly or indirectly,
controls, or is controlled by or under common control with, another Person. For the purposes of
this definition, "control" (including the terms "controlled by" and "under common control with"),
as used with respect to any Person, means the power to direct or cause the direction of the
management and policies of such Person, directly or indirectly, whether through the ownership
of voting securities or by contract or otherwise.
1.03 Annual Financial Statements. The term "Annual Financial Statement" shall mean the
annual Certified financial statements of a Person, as of the end of such Person's fiscal year (being
the Fiscal Year unless otherwise designated by such Person for federal income tax purposes),
including all notes thereto, which statements shall include a balance sheet as of the end of snch
fiscal year, and an income statement, all setting .forth in comparative form where applicable the
corresponding figures from the previous fiscal year, all prepared in conformity with GAAP
consistently applied, except that Annual Financial Statements of individuals do not have to be in
conformity with GAAP so long as they are in a form otherwise acceptable to Lender.
1.04 Borrowing Base. The term "Borrowing Base" means the sum of (i) eighty percent (80%) v----
of all Eligible Accounts Receivable and (ii) fifty percent (50%) of all inventory of Borrower.
1.05 Business Day. The term "Business Day" shall mean a day when the main office of Lender
open for business in SanAntonio, Texas.
1.06 Capital Expenditures. The term "Capital Expenditures" shall mean all expenditures deemed
capital expenditures as evidenced by Borrower's financial statements for any given period during
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1.07 Cash Flow. The term "Cash Flow" shall mean the sum of (i) all net income of Borrower
. as determined in accordance with GAAP, after accrual of applicable taxes to Governmental
Authorities, plus (ii) depreciation, depletion, obsolescence and amortization of property in
accordance with GAAP, less (iii) capital expenditures, less (iv) all dividends or distributions to
the shareholders of Borrower. . .
1.08 Cash Flow Coverage Ratio. The term "Cash Flow Coverage Ratio" shall mean, with
respect to any period, the ratio of: (a) the sum (i) the Net Income of the Borrower for such period,
(ii) interest expense deducted in determining such Net Income, (iii) depreciation and deferred taxes
, /'deducted in. determining such Net Income, and (iv) other noncash items deducted from revenue
V in determining such Net Income, to (b) the sum of (i) Current Maturities of Long Term Debt
during such period, (ii) total interest expense of Borrower (including capitalized interest) for such
period, (iii) dividends paid to Borrower's shareholders during such period, and (iv) advances to
Borrower's shareholders or employees during such period and capital expenditures during such
period.
1.09 Cash Flow Recapture Amount. The term "Cash Flow Recapture Amount" shall mean
V
seventy-five percent (75%) of (a) the sum of (i) all Net Income of Borrower for such period, (ii)
depreciation and deferred taxed deducted in determining such Net Income and (iii) interest expense
deducted in determining such Net Income less (b) the sum of (i) Current Maturities of Long Term
Debt made during such period and (ii) total interest expense of Borrower (including capitalized
'' 1
interest) for such period.
1.10 Certified. The term "Certified" shall mean certified as true and correct by the Person or
a duly authorized officer or representative of the Person providing the Financial Statements or
other financial information to Lender.
1.11 Chapter One. The. term "Chapter One" shall mean Chapter One of the Texas Credit Code,
as in effect on the date the document using such term was executed.
1.12 Collateral. The term "Collateral" shall mean all property of Borrower, tangible or
intangible, real, personal or mixed, whether now owned or hereafter acquired, and now or
hereafter subject to or intended to be subject to the Security Instruments.
1.13 Consolidated. The term "Consolidated" shall, with respect to any period, mean the
consolidation of financial information of Borrower and Affiliate(s).
1.14 Corporation. The term "Corporation" shall mean corporations, partnerships, joint
ventures, joint stock associations, business trusts and other business entities,
Debt" shall mean all principal sums owed during the next twelve (12) month period on Borrower's
long term debt (including capital lease obligations) as reflected in Borrower's Certified Annual
Financial Statements or monthly interim Financial Statements, consistently applied, and in every
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event in accordance with GAAP.
1.16 Current Assets. The term "Current Assets" shall mean to the extent permitted by and as
determined in accordance with GAAP, shall include all (1) cash on hand or in transit or on deposit
in any bank or trust company which has not suspended business; (2) accounts receivable; and (3)
such other assets as, in accordance with GAAP, would be included in "current assets"; all after
deduction of adequate reserves in each case where a reserve is proper under GAAP; provided,
however, that, notwithstanding the foregoing, in computing Current Assets there shall be excluded
(a) all Investments; (b) all franchises, licenses, permits, patents, patent applications, copyrights,
trademarks, trade names, good will, experimental or organizational expense and other like
intangibles; (c) any assets which are pledged or encumbered as security for or for the purpose of
paying any obligation (other than the Notes) which is not included in Current Liabilities; and (d)
all loans, advances and other receivables from officers, stockholders, directors or employees.
1.17 Current Liabilities. The term "Current Liabilities" shall mean all (a) Indebtedness
maturing on demand or within one year after the date as of which such determination is niade; (b)
final maturities and prepayments of Indebtedness and sinking fund payments required to be made
in respect of any Indebtedness within one year after said date; (c) taxes payable or accrued as
estimated and deferred income taxes due for the fiscal year in which such determination is made
arising from differences in reporting depreciation and other non-cash charges for tax purposes and
for corporate financial purposes; (d) accrued liabilities; (e) payments required to be made with
respect to capitalized leases within one year of said date, and (t) all other items which in
accordance with GAAP would be included as Current Liabilities.
1.18 Debt. The term "Debt" shall mean Borrower's total liabilities, determined in accordance
with GAAP.
1.19 Debtor Relief Laws. The term "Debtor Relief Laws" shall mean any applicable
liquidation, conservatorship, bankruptcy, moratorium, insolvency, reorganization, or similar laws
affecting the rights br remedies of creditors generally, as in effect from time to time.
1.20 Eligible Accounts Receivable. The term "Eligible Accounts Receivable" shall mean
accounts receivable owed to Borrower which are no more than sixty (60) days delinquent. ,__----
(a) A failure by Borrower to make any payment of principal or interest on the Note
when due, whether matured by acceleration or otherwise;
(b) A failure by Borrower or Guarantor to comply with any of the other terms or
conditions specified herein or in any other Security Instrument;
(c) The incorrectness of any material representation or warranty made by Borrower' or
Guarantor to Lender in any of the Security Instruments;
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(d) . The appointment of a receiver, trustee, custodian, conservator, or liquidator, or
other similar official for Borrower or Guarantor, any of the Property, or any other property of
Borrower or Guarantor;
(e) Borrower or Guarantor shall generally not pay their debts as they become due or
shall admit in writing their inability to pay their debts, or shall make a general assignment for the
benefit of creditors;
(t) Borrower or Guarantor shall commence any case, proceeding or other action
(g) Any case, proceeding or. other action commenced against Borrower or Guarantor
seeking to have an order for relief entered against Borrower or Guarantor, as the case may be, as
debtor, or seeking a reorganization, arrangement, adjustment, liquidation, dissolution or
composition of Borrower or Guarantor of their debts under Debtor Relief Laws, or seeking an
appointment of a receiver, trustee, custodian or other similar official for Borrower or Guarantor
for all or any of the Collateral, or any other property of Borrower or Guarantor, and such case,
proceeding or other action results in the entry of an order for relief.
(h) Borrower or Guarantor shall have concealed, removed, or permitted to be concealed
or removed, any part of its property, with intent to hinder, delay or defraud its creditors or any
of them, or made or suffered a transfer of any of its property which may be fraudulent under any
bankruptcy, fraudulent conveyance or similar law; or shall have made any transfer of its property
to or for the benefit of a creditor at a time when other creditors similarly situated have not been
paid; or shall have suffered or permitted, while insolvent, any creditor to obtain a lien upon any
of its property through legal proceedings which is not vacated within sixty ( 60) days from the date
thereof;
(i) An occurrence of any event or condition described in the Note, this Loan
Agreement or any other security instrument that would result in an acceleration of the Note or
constitute an event of default thereunder;
(j) The liquidation, termination, dissolution, or death of Borrower or Guarantor;
(k) If Borrower or Guarantor is a partnership, a default by any general partner under
the Partnership Agreement; or
(!) An occurrence of any event or condition described in the loan documents
evidencing any other indebtedness of Borrower or Guarantor to Lender that would constitute an
event of default thereunder.
1.22 Financial Statements. The term "Financial Statements" shall mean such balance sheets,
profit and loss statements, reconciliations of capital and surplus, changes in financial condition,
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schedules of sources and applications of funds, and other financial information of Borrower and
of Guarantor, as shall be required by Lender, from time to time, which statements of the Borrower
shall be prepared in conformity with GAAP for the stated period.
1.23 Fiscal Year. The term "Fiscal Year" of the Borrower means the period commencing
October 1 of each calendar year through and including September 30 of the next succeeding
calendar year.
1.24 Generally Accepted Accounting Principles. The term "GAAP" shall mean, as to a
particular Person, such accounting practice as, conforms at the time to generally accepted
accounting principles, consistently applied. GAAP means those principles and practices (a) which
are recognized as such by. the Financial Accounting Standards Board, (b) which are applied for
all periods after the date hereof in a manner consistent with the manner in which such principles
and practices were applied to the most recent financial statements of the relevant Person furnished
to Lender, and (c) which are consistently applied for all periods after the date hereof so as to
reflect properly the financial condition, and results of operations and changes in financial position,
of such Person. If a change in any accounting principle or practice is implemented by the
Financial Accounting Standards Board, then all reports and financial statements required hereunder
may be prepared in accordance with such change only after written notice of such change is given
to Lender.
States, the State, the County, the City, or any other political subdivision in which the Collateral
is located, and any other political subdivision, agency, or instrumentality exercising jurisdiction
over Borrower, Affiliate, or the Collateral.
1.26 Governmental Requirements. The term "Govermrtental Requirements" shall mean all laws,
ordinances, rules, and regulations of a Govermrtental Authority applicable to Borrower, Affiliate,
or the Property.
1.27 Guarantor. The term "Guarantor" shall mean all parties named Guarantor in the first
1.28 Guaranty. The term "Guaranty" shall mean each Guaranty, in Proper Form, to be
executed by Guarantor in favor of Lender.
1.29 Indebtedness. The term "Indebtedness" shall mean and include (1) all items which in
accordance with GAAP would be included on the liability side of a balance sheet on the date as
of which Indebtedness is to be determined (excluding capital stock, surplus, surplus reserves and
deferred credits), (2) all guaranties, endorsements and other contingent obligations in respect of,
or any obligations to purchase or otherwise acquire, indebtedness of others, and (3) all
indebtedness secured by any Lien existing on any interest in Collateral owned subject to such Lien
whether or not the secured thereby shall have been assumed by Borrower; provided
that such term shall not mean or include any indebtedness in respect of which monies sufficient
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' - . )
to pay and discharge the same in full (either on the expressed date of maturity thereof or on such
earlier date as such indebtedness may be duly called for redemption and payment) shall be
deposited with a depository, agency or trustee acceptable to Lender in trust for the payment
thereof and which monies are not reflected as Current Assets of Borrower on its Financial
Statements.
1.30 Insurance Policies. The term "Insurance Policies" shall mean:
(a) All risk insurance in Proper Form, as determined by Lender, in the amount of at
.least equal to the Loan amount or in such additional amounts as Lender may require, providing
all risk coverage on the premises in which Borrower conducts its business, and, if reasonably
requested by Lender, to include the perils of flood, earthquake, business interruption (in the
amount of $250,000.00 or more) and other risks;
(b) Liability insurance in an amount of.not less than $1,000,000.00 and otherwise in
Proper Form and providing its coverage is related to its operation of the Collateral.
All Insurance Policies shall be issued on forms and by companies satisfactory to Lender
and shall have a provision giving Lender thirty (30) days prior written notice of cancellation or
material change of the coverage and otherwise be in Proper Form.
1.31 Lender. The term "Lender" shall mean the Lender named in the first paragraph of this
Loan Agreement.
1.32 Lien. The term "Lien" shall mean any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien or restriction of any kind, whether based on common
law, constitutional provision, statute or contract, and shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions, leases and other title
exceptions.
1.33 l&an. The term "Loan" shall mean the Loan by Lender to Borrower on even date
herewith, in an amount not to exceed the principal sum set forth in the first paragraph of this Loan
Agreement.
1.34 Net Income. The term "Net Income" shall have the meaning determined in accordance
with GAAP.
1.35 Net Worth. The term "Net Worth" shall mean Borrower's total assets minus total
1.36 Nme. The term "Note" shall mean the Note from Borrower to Lender dated of even date,
which evidences the Loan.

6
1. 37 Person. The term "Person" shall mean any individual, corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
1.38 Proper Form. The term "Proper Form" shall mean in a form and substance satisfactory
to Lender.
1. 39 Security Instruments. The term "Security Instruments" shall mean this Loan Agreement,
the Note, the Guaranty, the Security Agreements, and such other instruments or documents
evidencing, securing, or pertaining to the Loan as shall, from time to time be executed and
delivered by Borrower, Guarantor, or any other party to Lender pursuant to this Loan Agreement
or otherwise.
2.01 The Loan.
ARTICLE II
AGREEMENTSOFLENDER
(a) Loan. Subject to the terms and conditions set forth herein prior to closing, Lender
hereby agrees to lend TwO MILLION AND NO /100 DOLLARS ($2,000,000.00) (the "Loan")
and Borrower hereby agrees to borrow TWO MILLION AND N0/100 DOLLARS
($2,000,000.00).
(b) Terms. The promissory note shall bear interest at the rate of the New York Prime
Rate, floating, as defined in the Note, plus one percent and otherwise
as set forth in the Note.
(c) Loan Fee. One Half of one percent of the Loan or $10,000.00 payable upon
closing of the Loan. Legal fees paid by Borrower.
2.02 Conditions to the Loan. The obligations of Lender to make the Loan are subject to the
satisfaction of the following conditions:
(a) The Borrower and Guarantor shall have delivered to Lender such certificates and
other documents relating to the transaction herein contemplated and such other information
relating to the Borrower or Guarantor, as the case may be, as the Lender may require.
(b) Lender shall have received the Security Instruments, each of which shall be in
(c) Lender shall have received the Note, which shall be in Proper Form and been duly
executed by Borrower.
(d) Borrower shall have paid all Lender's expenses, including its legal fees.
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(e) Except where expressly authorized to the contrary, Lender shall have received
satisfactory evidence to the Lender that the Security Instruments create first, prior and enforceable
liens against Collateral described in the Security Instruments.
(f) Lender shall have received the Security Instruments, each of which shall be in
(g) . Lender shall have received an executed copy of each consent, if any, of any
Governmental Authority or other person which, in the opinion of the Lender, is required in
(i) Such other items as Lender may require.
ARTICLE ill
REPRESENTATIONS AND WARRANTIES OF BORROWER AND GUARANTOR
Borrower and Guarantor hereby represent and warrant the following to be true, as the case
may be as of the date of the execution hereof:
) 3. 01 The Financial Statements. The Financial Statements are true, correct, and complete in all
material respects as of the dates specified therein and fully and accurately present the financial
condition of Borrower and, if required, of Guarantor as of the dates specified. No material
adverse change has occurred in the financial condition of Borrower or Guarantor since the dates
of the Financial Statements.
3.02 Snits Actions. Etc. There are no material actions, suits, or proceedings pending or, to
the knowledge of Borrower and Guarantor, threatened in any court or before or by any
Governmental Authority against or affecting Borrower, Guarantor, or the Property, except as
described in writing to Lender; or involving the validity, enforceability, or priority of any of the
Security Instruments, at law or in equity. The consummation of the transactions contemplated
hereby, and the performance of any of the terms and conditions hereof and of the other Security
Instruments, will not result in a breach of, or constitute a default in, any mortgage, deed of trust,
lease, promissory note, loan agreements, credit agreement, partnership agreement, or other
agreement to which Borrower or Guarantor is a party or by which Borrower may be bound or
affected.
3.03 Valid and Binding Obligation. All of the Security Instruments, and all other documents
referred to herein to which Borrower is a party, upon execution and delivery will constitute valid
and binding obligation of Borrower, and Guarantor, enforceable in accordance with their terms
except as limited by Debtor Relief Laws.
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3. 05 Loan Purpose. Borrower has requested the extension of credit to be represented by the
Loan for business, commercial, investment or other similar purpose and not primarily for
personal, family, household or agricultural use.
3.06 Disclosure. To the knowledge of Borrower and Guarantor, there is no fact that Borrower
has not disclosed to Lender in writing that could materially adversely affect the property, business
or financial condition of Borrower or the Collateral.
3. 07 Inducement to Lender. The representations and warranties contained in the Security
Instruments are made by Borrower as an inducement to Lender to make the Loan and Borrower
understands that Lender is relying on such representations and warranties and that such
representations and warranties shall survive any bankruptcy proceedings involving Borrower,
Guarantor, or the Collateral.
3.08 Organization and Power (Applicable to Corporation Borrower).
(a) is a corporation duly organized, validly existing under the laws of the state of its
incorporation and in good standing under the laws of the state of its incorporation and the laws
of the State of Texas; and
(b) has complied with all conditions prerequisite to its lawfully doing business in the
state where the Collateral is situated; and
(c) has all requisite corporate power and all governmental certificates of authority,
licenses, permits, qualifications, and documentation to own, lease, and operate its properties and
to carry on its business as now being, and as proposed to be, conducted.
3.09 Organization and Power (Applicable to Partnership or Joint Venture Borrower). Borrower
is duly organized and validly existing under applicable State laws, and all Security Instruments
and other loan documents are within Borrower's powers, have been duly authorized by all
requisite action and are not in contravention of law or the power of Borrower's partnership or joint
venture agreement, as the case may be.
3.10 Existence of Borrower. Borrower shall preserve and keep in full force and effect
Borrower's existence, rights, franchises, and trade names.
3.11 Compliance with Laws. Borrower, the Collateral, and the use thereof by Borrower shall
comply with all laws, rules, ordinances, regulations, covenants, conditions, restrictions, orders
and decrees of any governmental authority or court applicable to Borrower or the Collateral and
its use, and Borrower shall pay a!) fees or charges of any kind in connection therewith.
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A. Borrower shall deliver to Lender, within one hundred twenty (120) days after the
end of each calendar year the income and expense statements, in Proper Form,
itemizing the income and expenses of the .Borrower. Within one hundred twt;nty
(120) days of the filing of Borrower's tax return, Borrower shall deliver to Lender
its annual financial statement, together with a copy of its tax return. Borrower
agrees that it shall file its tax return in a timely manner provided, however, the
filing of such tax return shall be subject to extensions that aie filed timely.
B. Additionally, Borrower shall forward to Lender monthly financial statements in
Proper Form which may be unaudited, such statements to be delivered to Lender
within fifteen (15) days after the end of each month during the term of this Note.
C. Guarantor shall at least annually submit copies of_its financial statement and tax
returns to Lender, which information shall also be furnished to Lender within one
hundred twenty (120) days of the filing of Borrower's tax return. In the event that
Borrower is in default, Lender reserves the right to from time to time request
additional financial information of either Borrower or Guarantor. All financial
statements of the Borrower shall be prepared in accordance with GAAP, certified
to be true and correct by the person delivering them and otherwise be in Proper
Form.
3.13 Hold Harmless. Borrower shall defend, at Borrower's own cost and expense, and hold
Lender harmless from any proceeding or claim affecting the Collateral or the Security Instruments
and other loan documents. All costs and expenses incurred by Lender in protecting its interests
hereunder, including all court costs and reasonable attorneys' fees, shall be borne by Borrower.
3.14 Further Assurances. Borrower, upon the request of Lender, shall execute, acknowledge,
deliver, and record such further instruments and do such further acts as may be necessary,
desirable or proper to carry out the purposes of the Security Instruments and other loan documents
and to subject the liens and security interests created thereby and property intended by the terms
thereof to be covered thereby, including specifically, but without limitation, any renewals,
additions, substitutions, replacements, improvements, or appurtenances to the Collateral.
ARTICLE IV
GUARANTY
The Loan shall be guaranteed by SCOTT JENSEN and evidenced by a Guaranty in Proper
Form.
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ARTICLE V
Borrower hereby covenants and agrees as follows:
5.01 Compliance with Governmental Requirements. Borrower shall, comply with all
Governmental Requirements and deliver to Lender evidence thereof. Borrower assumes full
responsibility for the compliance of the Collateral with all Governmental Requirements,
notwithstanding any approvals by Lender.
5.02 Notices hy Governniental Authority, Fire and Casualty Loss, Etc. Borrower shall timely
comply with and promptly furnish to Lender true and complete copies of any official notice or
claim by any Governmental Authority pertaining to the Collateral. Borrower shall promptly notify
Lender of any fire or other casualty or any notice of taking or eminent doma,in action or
proceeding affecting the Collateral.
5.03 Other Liens and Indebtedness. Borrower shall not suffer or permit to exist, or permit any
lien upon the Collateral, except those liens securing the Loan; provided, however, that the
Borrower may create or suffer to exist liens for taxes, but only to the extent that payment thereof
shall not at the time be due and further provided, however, that the Lender consents to the lien
on all or a portion of the Collateral (which may exist as of the date hereof or in the future) granted
to Bernard Jensen, said lien to be made expressly subordinate to the liens created by the Security
Instruments.
5.04 Costs and Expenses. Borrower shall pay when due all costs and expenses required by this
Loan Agreement, including, without limitation,
(a) all taxes and assessments applicable to the Collateral;
(c) all fees and commissions lawfully due to brokers, salesmen, and agents of Borrower
in connection with the Loan, or the Collateral; and
(d) all reasonable fees and expenses of counsel of Lender.
5.05 Additional Documents. Borrower and Guarantor shall execute and deliver to Lender, from
time to time as requested by Lender, such other documents as Lender may deem to be necessary
to provide the rights and remedies to Lender granted or provided for by the Security Instruments;
provided, however, such additional documents shall not increase or create new rights or remedies
or otherwise expand the rights and remedies of Lender under the original documents.
5.06 Inspection of Books and Records. Borrower shall permit Lender, at all reasonable times,
to examine and copy the books and records of Borrower pertaining to the Loan, in particular
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. :-,.:
...... :_._,
related to the inventory, receivables and payables of Borrower.
5.07 Defense of Actions. Lender may (but shall not be obligated to) commence, appear in, or
defend any action or proceeding purporting to affect the Loan, the Collateral, or the respective
rights and obligations of Lender and Borrower pursuant to this Loan Agreement. Lender may (but
shall not be obligated to) pay all necessary expenses, including reasonable attorney's fees and
expenses incurred in connection with such proceedings or actions, which Borrower agrees to repay
to Lender upon demand.
5.08 Payment of Claims. Borrower shall promptly pay or cause to be paid when due all costs
and expenses incurred in connection with the Collateral. Notwithstanding anything to the contrary
contained in this Loan Agreement, Borrower
(a) may contest any tax or special assessments levied by any Governmental Authority;
and
(b) may contest the enforcement of or compliance with any Governmental
Requirements, and such contest on the part of Borrower shall not be a default hereunder and shall
not release Lender from its obligations to make any Advance hereunder; provided, however, that
during the pendency of any such contest, Borrower shall furnish to Lender an indemnity bond with
corporate surety satisfactory to Lender or other security acceptable to them in an amount equal
to the amount being contested plus a reasonable additional sum tci cover possible costs, interest,
and penalties, and provided further that Borrower shall pay any amount adjudged by a court of
competent jurisdiction to be due, with all costs, interest, and penalties thereon, before such
judgment becomes a lien on the Collateral.
5.09 Liens. Except as set forth above, Borrower shall not impose any other liens or
encumbrances upon the Collateral, without the prior written consent of Lender.
5 .lCi l i ! ~ a s h Flow Coverage. '
/
(a) So long as any part of the principal of or interest on the Loan or any other
indebtedness of Borrower to Lender or any Affiliate shall remain unpaid, Borrower shall maintain
a ratio of Cash Flow Coverage Ratio for the immediately preceding twelve (12) month period of
not less than 1. 75 (the "Minimum Cash Flow Coverage Ratio", which ratio shall be calculated on
an annual basis, but shall be tested on a rolling quarterly basis as described below.
(b) The Cash Flow Coverage Ratio shall be determined within thirty (30) days after
,./the last day of each September, December, March and June during the term of the Loan with
/ respect to the immediately preceding twelve (12) month period (each period referred to as a "Cash
V Flow Coverage Ratio Period"). The Borrower shall provide a certificate, along with all necessary
back-up information supporting such certificate (each such certificate referred to as a "Cash Flow
Ratio Coverage Certificate") in form and substance satisfactory to Lender which Cash Flow Ratio
Coverage Certificate shall certify as to the Cash Flow Coverage Ratio during the Cash Flow
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Coverage Ratio Period. The Borrower covenants and agrees that the Cash Flow Coverage Ratio
may not be less than the Minimum Cash Flow Coverage Ratio for any Cash Flow Coverage Ratio
Period during the term of the Loan.
(c) Notwithstanding anything set forth above to the contrary, the first Cash Flow
Coverage Ratio shall be determined for the nine (9) month period commencing on Apri11, 1998
through and including December 31, 1998 (the "Initial Period"). The Cash Flow Ratio Coverage
Certificate for the Initial Period shall be provided to Lender on or before January 30, 1999. The
Borrower covenants and agrees that the Cash Flow Coverage Ratio for the Initial Period may not
be less than the Minimum Cash Flow Coverage Ratio.
(d) Subsequent to the determination made for the Initial Period, the Cash Flow
Coverage Ratio shall be calculated on the basis of twelve month periods as set forth in Section
5.10 (b) above.
5.11 Additional Payment Obligations. Borrower agrees that in addition to the regularly
scheduled installments of principal and interest which are due and payable as described in the
Note, Borrower shall make annual principal reductions in an amount equal to the Cash Flow
Recapture Amount. Each annual payment of Cash Flow Recapture Amount, if applicable, shall
be paid to Lender on or before the date which is ninety (90) days after the end of each Fiscal Year
during the term of the Note, ,i;gmrne.ncing;with t!ie :Bis;)1.;ear. enditg Each
payment of Cash Flow Recapture Amount shall be accompanied by financial statements
describing, among other things, the Cash Flow Recapture Amount.
5.12 Borrowing Base. Borrower agrees that the outstanding principal balance of the Loan at
any time during the term of the Loan may not exceed the Borrowing Base. Borrower shall provide
to Lender, within fifteen (15) days after each calendar month during the term of the Loan, a
Certificate, along with all necessary back-up information supporting such certificate (each such
certificate referred to as a "Borrowing Base Certificate") in form and substance satisfactory to the
Lender which shall indicate that the then outstanding balance of the Loan (the "Existing Balance")
is less than or equal to the Borrowing Base. If, at any time during the term of the Loan, the
Existing Balance exceeds the Borrowing Base, then the Borrower agrees to immediately reduce
the Existing Balance so that the Existing Balance is either equal to or less than the Borrowing
Base:
5.13 Lockbox Borrower shall ensure that, during the term of the Loan, all receivables owed
.. ;..
to Borrower shall be paid by all customers to a lockbox ("Lockbox") established by Borrower and
maintained with the Lender. Prior to an Event of Default (as defined herein), and subject to the .
terms of this Loan Agreement and the other Security Instruments, Borrower shall be entitled to
utilize the funds deposited in the Lockbox; provided, however, that upon an Event of Default (as
defined herein), and subject to any notice and opportunity to cure granted to the Borrower, the
Lender shall be entitled to apply funds then maintained in the Lockbox to reduce the then
outstanding delinquency or otherwise to cure such Event of Default or, in the event of an
acceleration of the Note, to reduce all or a part of the outstanding principal balance of the Note.
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:,)
5.14 Compensation During the term of the Loan, Guarantor shall not receive an annual
compensation (including salary, bonus and dividends) in excess of $300,000.00 (the "Maximum
Compensation") without the Lender's prior written consent, which consent shall not be
unreasonably withheld to the extent the Borrower's Net Income in any Fiscal Year, in the
Lender's reaSonable discretion, justifies compensation in excess of the Maximum Compensation.
ARTICLE VI
RIGHTS AND REMEDIES OF LENDER
6.01 Rights of Lender. Upon the occurrence of a monetary Event of Default, Lender shall have
the right, in addition to any other right or remedy of Lender, but not the obligation, to exercise.
any remedy set forth in any of the Security Instruments or any tight authorized by the Uniform
Commercial Code of the State of Texas. Borrower hereby appoints Lender as the attorney-in-fact
of Borrower, with full power of substitution, and in the name of Borrower, if Lender elects to do
so, upon the occurrence of an Event of Default, to
(a) endorse the name of Borrower on any checks or drafts representing proceeds of the
Insurance Policies, or other checks or instruments payable to Borrower with reSpect to the
Collateral for the sole purpose of payment of the Notes;
(b) prosecute or defend any action or proceeding incident to the Collateral; and
(c) terminate the license granted to Borrower to collect the funds from the Lockbox,
give receipts and releases therefore, and after deducting all expenses of collection, including
reasonable attorneys' fees, apply the net proceeds thereof to any Indebtedness as Lender may
elect;
The power-of-attorney granted hereby is a power coupled with an interest and irrevocable.
Lender shall have no obligation to undertalce any of the foregoing actions, and if Lender should
do so, it shall have no liability to Borrower for the sufficiency or adequacy of any such actions
. taken by Lender.
6.02 Acceleration, Upon the occurrence of an Event of Default Lender may, at its option,
declare the Loan immediately due and payable without notice of any kind.
6.03 Funds of Lender. Any funds of Lender used to cure any default hereunder shall be secured
by the Security Instruments and shall bear interest at the rate specified in the Note or to applicable
after default thereunder.
6.04 No Waiver or Exhaustion. No waiver by Lender of any of its rights or remedies
hereunder, in the other Security Instruments, or otherwise, shall be considered a waiver of any
other or subsequent right or remedy of Lender, no delay or omission in the exercise or
enforcement by Lender of any rights or remedy of Lender; and, no exercise or enforcement of any
such rights or remedies shall ever be held to exhaust any right or remedy of Lender.
\ \RT ARR\Comn1on\LLL \IBC\Delt.a
14
6.05 Rights and Remedies of Sureties. Borrower waives any right or remedy which Borrower
may have or be able to assert pursuant to Chapter 34 of the Business and Commerce Code of the
State of Texas pertaining to the rights and remedies of sureties.
ARTICLEVll
GENERAL TERMS AND CONDITiONS
7.01 Notices. All notices, demands, requests, and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been given when presented personally
or deposited in a regularly maintained receptacle for the United States Postal Se!Vice, postage
prepaid, registered or certified, return receipt requested addressed to Borrower or Guarantor or
Lender, as the case may be as follows:
(a) If to Borrower to:
Delta Produce Marketing, Inc.
Attn: Steven Lefever, CPA
2001 So. Laredo
(b) If to Lender to:
Attn: Mr. Todd Rasco, Assistant Vice President
130 E. Travis
(c) If to Guarantor, to:
Scott Jensen
2001 So. Laredo
understanding and agreement between the undersigned with respect to the transaction arising in
connection with the Loan and supersedes all prior written or oral understandings and agreements
between the undersigned in connection therewith. No provision of this Loan Agreement or the
other Security Instruments may be modified, waived, or terminated except by instrument in
writing executed by the party against whom a modification, waiver, or termination is sought to
be enforced.
7.03 No Waiver. No waiver of any default on the part of Borrower or any other party hereto
or breach of any of the provisions of this Loan Agreement or of any other instrument executed
in connection with the Loan shall be considered a waiver of any other or subsequent default or
breach, and no delay or omission in exercising subsequent default or breach, and no delay or
omission in exercising or enforcing the rights and powers herein granted shall be construed as a
waiver of such rights and powers, and likewise no exercise or enforcement of any rights or powers
\ \RT ARR\Common\LLL \IBC\Delta \loanagr-blk:
15
)
'
.. i
/
hereunder shall be held to exhaust such rights and powers, and every such tight and power may
be exercised from time to time. Acceptance by Lender of partial payments shall not constitute a
waiver of the default by failure to make full payments.
7.04 Severability. If any provision of this Loan Agreement is held to be illegal, invalid, or
unenforceable under present, or future laws effective while this Loan Agreement is in effect, the
legality, validity, and enforceability of the remaining provisions of this Loan Agreement shall not
be affected thereby and in lieu of each such illegal, invalid, or unenforceable provision there shall
be added automatically as a part of this Loan Agreement a provision that is legal, valid and
enforceable and as similar in terms to such illegal, invalid, or unenforceable provisions as may
be possible. If any of the Indebtedness shall be unsecured, the unsecured portion of the
Indebtedness shall be completely paid prior to the payment of the secured portion of such
Indebtedness, and all payments made on account of the Indebtedness shall be considered to have
been paid on and applied first to the complete payment of the unsecured portion of the
Indebtedness.
7.05 Modification or Termination. The Security Instruments and other loan documents may
only be modified or terminated by a written instrument or instruments executed by the party
against which enforcement of the modification or termination is asserted. Any alleged
modification or termination that is not so documented shall not be effective as to any party.
7.06 No Partnership. Nothing contained in the Security Instruments or other loan documents
is intended. to create any partnership, joint venture or association between Borrower and Lender,
or in any way make Lender a co-principal with Borrower with reference to the Collateral, and any
inferences to the contrary are hereby expressly negated.
7.07 Election of Remedies. Lender shall have all of the rights and remedies granted in the
Security Instruments and available at law or in equity, and these same rights and remedies shall
be cumulative and may be pursued separately, successively, or concurrently against Borrower,
Guarantor, or any property covered under the Security Instruments at the sole discretion of
Lender. The exercise or failure to exercise any of the same shall not constitute a waiver or release
thereof or of any other right or remedy, and the same shall be non-exclusive.
7.08 Form and Substance. All documents, certificates, insurance policies, and other items
required under this Loan Agreement to be executed and/or delivered to Lender shall be in form
and substance satisfactory to Lender.
existing or hereafter arising and whether written or oral, are hereby limited so that in no
otherwise, shall the interest paid, or agreed to be paid to Lender exceed the maximum permissible
under applicable law. If from any circumstances whatsoever, interest would otherwise be payable
to Lender at a rate in excess of that permitted under applicable law, then, the interest payable to
the Lender shall be reduced to the maximum amount permitted under applicable law, and if from
\ \RT ARR\Common\LLL\IBC\Delta \loanilgr-blk
16
any circumstance Lender shall ever receive anything of value deemed interest by applicable law
which would exceed interest at the highest lawful rate, an amount equal to any excessive interest
shall be applied to the reduction of the principal amount owing under the Note and not the
payment of interest, or if such excessive interest exceeds the unpaid balance of principal of the
Note, such excess shall be refunded to the Borrower. All interest paid or agreed to be paid to
Lender shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full period until payment in full of the principal of the Loan (including the
period of any renewal or extension thereof) so that interest thereon for such full period shall not
exceed the maximum amount permitted by applicable law. This paragraph shall control all
agreements between the Borrower and the Lender.
7.10 No Third Party Beneficiary. This Loan Agreement is for the sole benefit of Lender,
Borrower and Guarantor and is not for the benefit of any third party, except for any successor or
assign of Lender.
7.11 Number and Gender. Whenever used herein, the singular number shall include the plural
and the singular, and the use of any gender shall be applicable to all genders. The duties,
covenants, obligations, and warranties of Borrower in this Loan Agreement shall be joint and
several obligations of Borrower, and of each Borrower if more than one.
7.12 Captions. The captions, headings, and arrangements used in this Loan Agreement are for
convenience only and do not in any way affect, limit, amplify, or modify the terms and provisions
hereof.
7.13 Applicable Law. This Loan Agreement and the Security Instruments shall be governed by
and construed in accordance with the laws of the State of Texas and the laws of the United States
applicable to transactions within such State.
7.14 Conflicts Between Security Instmments. In the event of a.conflict between the provisions
of this Loan Agreement and those of any other Security Instrument, the terms and conditions of
this Loan Agreement shall control, except that nothing herein shall be construed to limit or
preclude any of the Lender's rights or remedies contained in the Note.
7.15 NOTICE TO LENDER UPON BREACH. BORROWER AND GUARANTOR AGREE
TO GIVE LENDER WRITTEN NOTICE OF ANY ACTION OR INACTION BY LENDER OR
ANY AGENT OR ATTORNEY OF LENDER IN CONNECTION WITH THIS AGREEMENT
REASON, INCLUDING, BUT NOT LIMITED TO, COMMISSION OF A TORT OR
VIOLATION OF ANY CONTRACTUAL DUTY OR DUTY IMPLIED BY LAW.
BORROWER AND GUARANTOR AGREE THAT UNLESS SUCH NOTICE IS DULY GIVEN
AS PROMPTLY AS POSSIBLE (AND IN ANY EVENT WITHIN NINETY (90) CALENDAR
DAYS OR IF A LONGER PERIOD IS REQUIRED BY LAW IN ORDER FOR THIS WAIVER
TO BE EFFECTIVE SUCH LONGER PERIOD) AFTER BORROWER OR GUARANTOR HAS
\ \RT ARR \Common\LLL\IBC\Delta \loanagr-blk
17
KNOWLEDGE OR WITH THE EXERCISE OF REASONABLE DILIGENCE SHOULD HAVE
HAD KNOWLEDGE OF ANY SU<:;H ACTION OR INACTION, BORROWER AND
GUARANTOR SHALL NOT ASSERT, AND BORROWER AND GUARANTOR SHALL BE
DEEMED TO HAVE WAIVED, ANY CLAIM OR DEFENSE ARISING THEREFROM.
7.16 Multiple Counterpart Originais. This Agreement may be executed in a number of identical
counterparts which, taken together, shall constitute collectively one (1) agreement; but in making
proof of this Agreement, it shall not be necessary to produce or account for more than one such
counterpart.
7.17 No Oral Agreements. If the amount involved in your loan agreements exceeds $50,000.00
in value, then Texas law requires that you be notified of the following: THE WRITTEN LOAN
AGREEMENT REPRESENT 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.
7.18 Successors and Assigns. This Agreement is binding on the parties hereto and their
respective heirs, successors and assigns; however, neither Borrower nor Guarantor may assign
their rights hereunder without the prior written consent of Lender, which Lender may withhold
in its absolute discretion and there are no third party beneficiaries to this agreement.
IN WITNESS WHEREOF, the Borrower or any Guarantor and Lender have caused this
Agreement to be. duly executed by their respective officers thereunto duly authorized as of the
l7 day of July , 1998.
BORROWER: LENDER:
DELTA PRODUCE MARKETING, INC.

TODD RASCO
GU 00R(S)/OBLIGOR:
/"". .
\\RTARR\Common\LLL\ffiC\Delta\loanagr-blk
18
12-50073-lmc Doc#45-2 Filed 01/23/12 Entered 01/23/12 13:16:08 Exhibit 2- $2 000
000.00 Promissory Note with Extensions Pg 1 of 11
.,
. f'JOTE
$ 2. 000 000 00
.'Account NQ

. . FEBRUARY , zoOS.
;or the .which tha and
wh8ther _one pily to order of .. o.nal Bank of. Commerce '.
L at l3Q .E.,..Travis,L .Sap. Anto'n:!.o, Bexar. . County Texas the Slim of
. . TWO MILLION. AND:N0/100. DOLLARS' . . '
)ql!ars (.$2.000fooo .. oo.: . . in'fegaf and mOney" 9f :the Unltea S1ates of. Arner!pa, .with <!S it
on principaf b!:l!an9e tr'onl d8te:of of such prinClpaluntll- paid.
.
. xx :The rate shil:ll itt o iS% . per amium a Dove thO NEW_ YoRK
- PRIME RATE . . ("Prime Rate") below) as it flpctuates flml(l totiine; provided.
howovef, that rate ofl+tteres. 1 (pl\IS said,llmRIJVlln the-r'eof.lfaqy) tQ be. paid on the unpaid .
of !his' Note b_e Ji:SS tli!ln:fi: !: L atWmn. por Jllore the maximili:n legal iate
allowed law,. The !f!!erestl'llt!!' an thls.Note . . . . .6 25 pof't.ent per
ill_ltliJDl The ra!l3 due be as of the date of any m.th Raft;:.
. a Pru1vre'RATE the jeuding !ate. of
from time to time by Lender, as its 'prime rate.
XX YO.iu< shall mean the t'll!e of from tQtim'e by
1P Morgan Chase & Co., New York. New York, as its prime rate. I!th1,1 N!ffl York Prime Rate bas be6u select'(d as
'the frime itaie !llld if, thereafter, prjme is not all!lciun\)6d by :ti! MOti!;aq:e!lase: & Co.,, New YWk, New
then the lntematiQiial Bank ofConu;neicr min'l1; shall be tl\e Frjme Rate.
Uile of either a'r Prime Rates is not to be construed as a warrmty or representation thl!t sucq ao:em.ore.favorab19 than aqotber
rate or ind\)X, that 11tes on iO!IIlS 'or credit facilities may be Qil other fqdJ\)cS or that Op.l!)ans to others may not be
made su!;:b prime pile.,,_, - .... -. . ' . ' '
interest ls calcJ!Iated on 11 360!1ay faqtpiapplied on a 365-day ye!lr. or a lp the event tliv year. is a teap year, on
fh.e urui;Mprfpclpill to the_ of each ima the paYuient Jllade credlfed firsnO'the dis!)harge'ofthe intar-est accru.ed. ;i,ncl.
to the reduction of the Principal. 'P.rovi<;llid, hoWeVer, in the interest raie reilchestbe maximum rate alloWed
by Pe pn or 011 a')li6966 daYs b!sis. in
eveu! that the year IS a fo.r wUj not exceed tJie. Olilxilj!um allpwed by Ia"'!
Matur:'d 'll;lpajd amounts will bear !:!11 a full calendar ye!lf 3651365 days bl!sls.or on a In the \!Vent
the year is l!" leap thd \Ughest legal rate of interest allowe4 by Texas law, unless Federal law. .alloW.'< a'f!jg!ler intereSt' rate, in
V:hich to pay. the rate allowed by Tf ap'pllcable laW d9es not Set a. maximum rate of,ipterest for
ml!tured UI!paid amounts, then BOTI'qwer the maximum rate for amgunts be eighteen percent {18%) per annum. .
.To the by l!lte paYment \lnder Ban:k ruay in its sole n) l;!crse tbeJntprest
on the prmc1paj paJ110n of amount that IS npt by the paymept due date to tbe maximllp:!"ratB.allowed by Jaw,
CDIDJ:!lted on II from payment !fafe .until paid, -!!l' (il), shoqld any payment not be withW (10)
.. Bo'!awer to pay a o;Je time charge,'' per !ate pa}'!Uenl eqiial to flve percent{$%) !>(tho; amoimt ofth!l
past of witb.:a nrlnimlllii of SfQ.OO and a late payment, The "lllte
cbar_se be sba).l be bpmediatel>: due and payable. Tbfsprovisionis itH!pplioable if tb.e tlUtstandfug
J!I!d.er 'fs late chargewm be ou -any payment thl,' onlY delinqqenCy dUe to la!"e
t}je pa)tnlent j& otherwise a full paymen\. . . -.
ro P.avment.Of Note, Snd, t'o the exterit i qther Whiph maY. at any time be
:JwJng by Borrpwer ,or any of hereby grants to Lend!3r a:sacurity'1nterest .and l!en on the following.

sEt.
1
.
1
Ail ATTtffiHED imRETO .AND
Borrowe.r to of the the pori,pt:JnY tq Lenderr:
for in .such amour:'tS aS .Lender dl,re6ts' .. If fails to furnish Lender with pioof of req!,.ilred
lnsl!rE!nce shall h6ye autlwrjtyt9 {lnpludlng $lnfJie.!nterest.lnsUrance, yyhlch
provide protectiOn only for Len<;ier) end add the pr!3fnlum for S4Ph with intarest af. the Joan pramaturity
contract to the of this No'te,
The is a 360day fqotor a,ppl!ed _C!n cie5 .. g_6y Vesr; in th;:t't !he
a leap year, on Prlnplpal to d.ate of eqch p&id. provided, .. thatin the Interest
rate reacheS rate allowed py aj:lpl!cablel;:tW, legal rat13 full ca!enda:r
year dayS bas[<;>r on.'S-366/36Q days baSi!;:;, that t!'le year Ia a leap year. The.intereat charged and
herein f9r WI\\. n9t 6Xceed the m6xJrnum<all<;'\'VBd. by Jay.r. .
To the extent ,. will q.Qmpute.d on a full calendar year 365/365 days
pr. on a i:lays !n the e'vent that the.yea.r [ef!p at the higheat legal r;3.te Qf Interest allowed .bY
Texas Layv, unless Federall:-aw a higher rate, in.wh!ch caser Bprrowar- agreeS to pay thSrcit.E! allowed by
L.aw. If !=IP.Pllcabje law does not a oT for mattJred amounts, then Borrower
that the maxlmL!m rate for such amount$ shall b!3 eighteen (18%) ,par annum.
the a]lo.Wed. the .IE!te payment :this NOte!. Sole {i) .
tho .interost on the prlnclp1!l portion of env p
0
yment amount that ia .not recoiyod by t\1 payinont due: dato to the
m11xlmum raw allowed bY Ia\'!," computed.on a full calendar yoar pasis from the pavfnantduo d'!te until paid,-ot"(li), should
?1!1Y'paymelit not bE! mCJde wlthjn t!!1 (1 OJ d8ys j3prrower pay time "late charge'' per
late to five perCent -(5%). Of amoym_of .t)1e pas.t duE! pr!rclpal and of a
-minimum and a rnaxhnum9f $1,QOO.QO per payment. The be assessed without not1ce,.
P.! and ..
!BCOOOJ 03/23/04
,_ .. ......... "'''"' uuvcnu : t-"dl I,.! I yms l'lOl:e ana au aqcrueo:. and l ..... paid interest" are payable
demahd, or if no deinand is made, 'then sums are payable as follows: . . = . . . . . . .
Number of
Payments
of Wheh .. PaYrii6nts are DU\ii
EE NO.TE AN1l BALLOON RIDER ATTACHED HERETO.l\IID .INCORPOR,ATED HEREIN .
Mat.uriiy Date: _. _ _,Ma""'Y'--"1.._,
. Each be applied as. f Its due ahc! in of as the Lende;IJ') itS sole
wsoretlon may from tlme to t_ltne elect.
All outstandln9. unpaid principaL "ail accrued and.UnpaiO ltJtt?rest, fi:les, lat8 andf.oi' incurred
in thls transaction by, or fot the benetlf of, Borrower Which .i"einaln.d.ue and ow!tig on. the Final 'Mat.ui'itY Date are due and
payable on such da.te. ' .
Lender. may, of perlodi"c abOve tliat the ..
payments Will fully amortize the prlncipal .. ohhis Noieon the stated matlirity withoutany <'Balloon" or unequal. payment.
HAS THE
At any and time tr;l. tirtie, Or .. riot "pribr to .d.ates, lh
its sole "and absolute discretion, reschedule/ rearrange and/or.aCcelerate,. in or lo part, the Oi.ttstandln9 and unpaid
ptincipal balance, and all c;!ccrt.jed ahd unpaid iriterest..aild all accrued ahd unpaid late Charges under. his BorroWer
agree:!r and to pay Lend.er aoc.e!S:ratei:f Prihcipa! .an.O all pn sUch p_rincipa!,. and &ll
accrued Bnd unpaid late .charges.' No notlbe:pf intli!nt .to: shaH be required .()f LenCer and .expressly
.wa:ives ariy riciht tO notibe .. of Lendertintent to ac:'c.el6i'ate'. The foregoing right to make 'for Immediate.
of this Note, _in whole or in part; may be bY.. Ler,der 8ny. .0h"atsoevert whether Or riot- is in
defaUlt hereun,de"r and i_n advance of its SChed.uled maturitY. . . . . : . . . .
Tills HAS A BALLOON PAYMENT PROVISioN;
THIS LOAN 1s PAYABLE IN FULL oN n.Je FINAL MATUBITY DATE sET FORTH HEREIN IF Nb PRioR DEMAND HAs BEEN MADE .. oN
THE FINAL.MATURITY DATE YOU MUST REPAY'THE ENTIRE OUTSTANDING UNPAID PRINCIPAL BfliLANCE, ALL ACCRUEDANO
UNPAID. INTEREST, ANO ALL. FEES, LATE CHARGES; AND/OR OTHER CHARGESINCURRED IN THIS-TRANSACTION BY, .OR ON
.. BEHALF OF, BORROWER,. WHICH REMAIN UNPAID. LENDER IS. UNDER.NO OBLIGATION TO REFINANCE tHE LOAN, OR ANY
. PORTION THEREOF, AT THAT TIME. YOU W!LLTHEREeORE BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS YOU MAY
OWN, OR YOU WILL HAVE TO. FIND A LENDER. WHICH MAY. BE THIS L.ENDER, wHICH AGREES. TO LEND YOU THE MONEY TO
. REFINANCE. IF YOU REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO PAY- SOME OR f.LL OF THE. CLOSING .COST$
NORMALLY ASSOCIATED WITH A'NEW.LOAN, EVEN IF YOU OBTAIN REFINANCING FROM THIS LENDER.
: failure of pay payinent{s} .of o.r anY Interest fees
. the same Is due and, pe"rmlt Lender; option, to 8CC!'J'le'tate the'maturitYt. notice to Borrdwer, _of
all, or Biw pcittiori, of the 'luipai_d principal barande .outstanding; all accrued and unpaid .interest and all accrued
arid uiipaid late charge's o:f this Note; .Whereupon Same shall be dUll! and payable lmrTledlate!y;
.. i'nay are aJi .oWing by imd/or 9uatantors) dUe
and payable .UPon deerhlnQ':itSelf. to be adversely .affected and/or insepure. by reason. of. any materia! chaiige In ahy of
13orrowef;s (!ncfudlnQ any endoi'sers and/of guarB.ntors} worth; or by reiaSoii of any other matericil change of.Cohd!tioh
Wh.eth9ror not herein.
ahd inteMthal the.loaJHivldent:ed by this NOte (!he be irl With
Usury laWs. If any -time an-Y interest OonttttCted fat, ch8rged;. or receiVed uhder . .thts.i;.JOte o"r "Otherwise in t:onne"ctiOn
Loan would be llsuiiou uhdlit applicable l.aw,.then regardless ol the pr
0
1ilsions Of this Note or the documents
and instruments ot_otherWiSe !n conneCtion With the Lciah or any actioh or event lincludir:tgi
without toriipaymant of principal hetei.Jhder oi' acceleration of maturity bY the lend1!ir) WhiCh may occur With
respect to this Note or thn Loan, it iS Sgr&ed th.af iitJ dbtermirled tO sh$.11 be IMmediately credited.by the
.. i.endet as a payment of 'plrlncipal hf< if this Note has already beecn p8id . iitirriedi8tely refunded to the .Borrower.
All cohijJensation ihtelesf applicable law in with L9ah shali be !in'lorti.Zed,
Prorated, ailocated and spreadover fuil period o.f tinio .. any- indfil:itednEts$ is owinfj by SOrrower,.to the greatest extent
pettril!:!sible without exceedi.ng tHe. applicable rate. Bilo'll{ed by applicablE! law ih tltri& to time during
ouch potiod. . ... : _ . . . . . . . . . ' . .
. "In no. event sh8U the .proviskms of Cliapter 346, of Texas Finance code. feQviates revolving. !dah
and revolving triparty aCcounts) apply to tfie lOan.
IN THE EVENT ITEM, OB IN ARE IN coNFLICT WITH THE LAWS
OF THE STATE OF TEXAS, OR FEDERAl LAW, THIS INSTRUMENT SHALL BE AFFECTED. ONLY AS TO ITS TO SUCH
ITEM, ITEMS, TERMS DR. AND SHALLIN ALL OTHER RESPECTS REMAIN IN FULL FORGE. AND IT IS.
lJNDoRSTpOO ANb AGREEC> tHAT IN NO EVENT AND UPON No CONTINGENCY SHALL THE B.ORROWFR 0$ ANY PARTY LIASLE
THEREON, OR THEREFORE, llE REOUJREQ TO PAY INTEREST IN. EXCESS OF THE RATE ALLOWErfBY THE LAWS OF THE STATE OF
TEXAS OR FEDERAL LAW, lf.SIJCH:LAW PERMITS A GREATER. RATE OF INTERESt. THE iNTENTION OF .THE PARTIES BEING TO
CONFi:JRM.STRICTLY TO THJ; UsWiY LAWs AS NOW OR HEREINAFTER CONSTRUED BY THe (:Oi)RTS HAVING JURISDICTION .
THE BORROWEij; GUARiiNTO.RS.AND ALL PERSONS TO BECOMHIABLE ON THIS NOtE (THE.
oBLIGORS") HEREBY, JOINTLY AND SEVERALLY, WAIVE EXPR5SSLY ALL.NOTICES.OF OVERDUE INSTAlLMENT
PAYMENTs; AND .DEMANDS FaR PAYMENT. THEREOF, NOTICE$ OF INtENTION to. ACCE;LERATE MAtURITY;
. NOTICES. OF ACTUAL ACCELI;RATION OF MATURITY, DEI\1AND f;AYMENT, NOTICES OF

'.

:)
..,!
PISHQNO.R, PflOi;;ST,".NOTI\:. .; .OF Pfl_QTEST, A,r-tP D"!LiGEt-icE IN CP. )CTION HI'REoF. EACH OBLIGOR
CONSI:NT.S THAT THE LENDER _OR OTHER HOLD.ER_'OF THis NOTg MAY AT ANY TIME, AND FBOM. TiME TO .TIME,.
UPON RI'QUEST OF 01(8Y AGREEMENT WITH. ANY .OF .i"l-joMi RENEW _THIS NOTE. AN[)/ORE;XTI'ND THE DATo OF ..
tviATURI:rv HEREOF OR.CHAf'lGETHE TIME OR METHOD OF PAYMENTS WITHOUT. NOTICE To ANY OF THE OTHER
OBLIGORS, MAKERS, SI,1RETIES OR .ENDbRSE;RS WHO SHALL REMAIN BoUND FOR THE PAYMENT HEREOF.
OBLIGORS WAIVE EXPRESSLY THE-LATE-FILING Qf ANY SUIT. OR CAUSE OF ACTION HEREON; Of\ ANY DELAY IN.
TH!" HANDJ.ING OF ANY COtLATERAL. OBLIGORS AGREe t!'IAT' HOLDER'!> ACCEPTANCI' OF PARTIAL OR
DELINOUI'NT .PAYMENTS OR. FAILURE OF HOLDER TO EXERCI!?E ANY RlelHT Of! REMEDY CONTAINED HEREIN OR.IN
ANY INSTRUMENT GIVEN AS SECURITY rOR THE PAYMENT bF. THIS NOTI' SHALL NOT BE A WAIVER OF ANY
O.BLiGATION OF THE OBLIGORS -OR CONSTITYT.EW,O.iVER QF.ANY Pll!OR "OR SU?SEOVENT DEi'AlJLT. THE HoLDER
MAY REMEDY ANY DEfAULT WITHOUT WAIVIN_(j THE .. PEFAULT:REMJ;PIEQ AND MAY. W-AIVf!." ANY. DEFAULT
.WITHOUT. .WAIV!NG ANV:otHE.R_PRIOR oR su.ssoaUENT DEFAUL"I::
To .allowep by fp( th.!S Note, Eind which rncw BI)Y be owing bY
J3orrower (and and{or hreOf) to Lender or other holder hereof, ClOY endorsers
!=!nd/or. hereof) .Lender Or. other hol4er hereof, a security a lieri and contractual right of set-off
m and al! of the (f!nc! any guarantors peraqf) money, credits, accounts and/qro_ther
proper_ty- now In, Qr at anv. tune heraC!fter porplng .w1thm, or qontrol of Lender orother holder hereof, or f!OY ..
member Bqnl< or bral)ch. of .CorpC?TE!tion, yvhether h!3IQ 111. or specl;:d aopount or
daposit, or for safekeepmg or otherwise. Every sl!Ch secui"ltv interest and right of off may be without
de!Ti<md or notic!3c. to Borrower (and .any andfor guarantors hert:lof). NP sec4r:ity Interest Or ri9ht of set-:off iP
enforcp such inte;r13St shall ba de13:meP. t.o. have .Py .any ae;t qr conduct on the: part ofLender, or by:
any fa!lure to such ri9ht of set;offor to enforce sych secUritY Interest, Q.r by delay in so doing; Every right of
sE1t:o.ff and security interest continue In. full 'force .and effect .Until such .of cir interest is
-yvaived or reteasecf by an lnstruin,ent in writing executed Py The-foregoing is in to and not In
heu of any nghts of allowed !Jy law,
In conneCtl.on '{'{ith !l!lY Berrow.er aricf any past: pr .future, In the
Borrow.erf mdlyldl;la!Jy or Jdlnt!y WJth _qthers, or grants Lender !1en reat and/or personal property,_
Borrower agrees that the lien on such. real prOperty .shall the !Rd6bte9ness of BorrQwer to
Lender evidenced Qy tl)l;:; Note find ?Ill renewals, eXtensions alief mdQiflcptions hE}n::qf. . . .
If thisNote, ot part hereof,-iS paid tQ it.s is pi13ced ih the hE!i'tds Ot an attOrneY:for 0; is:
cqllected through.ProbEjte,-Bari!<ruptcy:or other judi1al or non-judicial proc'eediri9!ii
1
whether matuted by expiration of'tih1e
by the exer9jse of the given tp the Lender to rf!E!ty:reJt;. J3ohqvver and"a/l PE!rtles now 'or personally
hf!ble hereby now-agree to and shall PiN an additioha! amount eql.lal and necessary fees
and associated cpst==1 for Collection. SaiP attornli'!y's fees and.:costs of collection( ohce: ljquldateP cmd paid by Lender or
by law,. will bear. inter!'lst at the rate .of ihterest applied to. m1=1tured and past-due principaf Palance
of this Note such ratemay chang!'lfrorn time to time doe until repaid.
eva"nl action by CJrbitration ot is commenced-with the of; pr any
deqlaration of rights under .this Note 1=1nd/or anY .instrument pr wrltt!3n agreement required or .delivered uncfer or pursuant
to the tl'!rn'ls of this Nota", aricf/or any pon"trpversy or 'claim, whether .. in contract, tort or legal or
equitabler inVolving in wqy the or the: of Note, or !=lOY proposed or
actual loqn qr of RrevE!illng party Shall be entitled to recover rea.sonab!a
fees, paralegal costs TinCiuding costs, for in-hoUse "legal costs, expert w!tneSs fees CJn.d
cqsts, and necessfiry inade in. co"nneCtion with any actiori or procl;l"edjng: .
Its diScretion and Ori tP. dO s6, sLJn:s and t"Or
benef!t of Borrower for dos.ts fqr the and of secunng th1s Note and other
that may be appropnate, 10. Lender
1
s, sole dJsCr!3tlon, tnclw;hng bl!t not hmJted. to !nSLJrance premiums, ad valorem
ctttor'1ey's fl:le;;t . Any sums whiCh inay be so paid out "by." and all sums tor inf?urance premitf!'nS1 cts
13foresa1d, thQ cosw, and fees.pf!ld !O _any .. l3Uit property shall bear
from-the.dates of S4Ch payment{> at prf).matunty cohtractrate app!!ecf:tP thl'l pnnclpal b'!-lance of th1s NotQ shall be
pj:jld_Qy to upqn dema"nd, at the same plctce at yvhlch thiS.N!;Ite Is payable, anj:J shaJI. be deemed a part of
the d!bt and s_uch In a!I"C!spects. .
rlg_ht to. -Pflor 'to :!3!1" .o.r any part of pfincip?ll this pen!=l!ty,
Interest shall cease. 011 any amount so. P.repa!d . All prepayments .shall be applied to the.last matunng.
jnstallmentS qf principal{ Interruptin-g th6 reg.Uhir .. .
. . ...
Any if perrnltted L,enderr by arv J>r corpOration, organization or qny .
other entJty withol,l.t the express written consent of Lender, not [1ablhty of .Borrower for the payment of
Note.
ln. desqribeP .If "any; i's. sci!d;. cQnV.eV_ed, 9r of without the
written consent of the J.,ender, the of thl==! Note_.may, at the .option Of the Lender, b.e accelerated apd .l-ender mE!y
JmmediatE!IY dt9m-Brid p.aymE!rit,C?f the thE!'l prirtcipal sum toget!"wr !=!!I B9GrUE!d Jntf)rest. dUf:l
thereon. . . . . .
Sorrower agree that. in the of a under Note or under. ;my
document eXet?uted qy ..Borrower '!11 connection with; cir. to the o.f, Note (I} Lender not be
required to cqmply of the ReVIsed _Act shall not PEl to
proceed orexhaust thl=l of aorrow.er pursiJlng <my remedy directly one or of thE!
of Borrow13r or :the property of sUch partners. . . .. . . . .
. . . .
.
THg 1\GREE
ANY 1\NP .. THE PARTIES, S<!CH CL!IIMS i\NP WHICH ARE .
C()i'!SUMER JlELATED. i\ND 1\MOU!'!T lf'l CONTRoVeRSY Of; LESS THAN T-EN THOUSAND
DOLLARS <*10,000.001, Slji\LL BY_MB!Tfii\TION If'! WITH THE COIVIMERFIAL ARBITRATION
RULES OF TliE AMERICAN i\T THE T!_JI1EQF UNLESS JHE
RWLES CONfLICT-WITH "THIS_ PROVISI()N, Ai'jD ll'l sUCJ-1 THE TERMS_ !lf THis SHALL
. CON,TROI. TO THE of THE.CONFLICT. J'lOTWITHSTi\NDII\IG !INYTHING CO['jTI\INED HeREIN TO TliE CONTRARY,
SAVE AND: EXCEp'( SUBPARI\GRAPfiS .. (kl<hn), !9), jp), 1\l'lP <!HEREIN, THOSE CONSUMER REL,L\TED CLI\IIVI.S AND
CONTROVERSIES li'IVPLVING AN .1\GGREGATE AMOUNT. oF. LES.S THAr; TEN THOUsAND QOLLARS. I$10,Q00.00)" SHALL .
BE CONDUPTED li{ i\qCORQANCE WITifTHE AMERICAN ASSOCIATION RWLES FOR TliE RESOLUTION OF
"cbl'lsUMERRElATED DISPUTES OF LESS THAN TEN THOU.SANo.po"'MS; ANY ARBITRATION HEREUNDER SHALL So
."BEFoRE-AT LEAsT THREe NEUTRAL ARBITRATORS ASSOCI!\ TED W)TH THE AMERIQ!IN 1\RBITRI\TION .1\SsOCIATION 1\Nr.
. !BCOOOl 113/23/f
- .
:. (b) ..
lei
d)
'(ej
. (f)
(g)
(h)
(i)
\
,.....,...,....,...,.,.,..,,...,,.,., ... ,..,ll..vnc vr- IV LJI:St.;LU:St ALL,,t-Al;li: .. >IVHICH MIGHT TO OBJEC'f.IVE:OI?.SERVI::R-
CREATE A REASOI'IAilLE OFTHI; ARBITRATOR'S PARTIALITY, AND/OR MATEitiAl ERROR$ OF lAW SHAll
.BE GROUNDS tiN AilDITION TO All OTHERS! FOR V.(\CATlJR OF AN AWARD RENDERED PUiiSU:ANT to tHIS AGi'!EEMENT.
AWARD ARBITRATORS, oil A MAJORITY niEM, sHALl FINAL AND JliPGMENT.UPoN.rllil.AWARD
RENDERED MAY BE ENTERED IN ANY COURT, STATE bii.FEDERAL, HAVING JURISDICTION. THE ARB.ITRATION AWARD
SHALL BE iN WRITING SPECIFY Tl-IE FACTUAL AND lEGAlll'ASES FOR THE AWARD. UPON THE REQUEST OF ANY
PARTY, 'THE AWARil SHAll iNClUDE FINDINGS OF FACT AND CONCLUSIONS OF LAW.
. :AirniTAABLE DISPLiTES INcLUDE ANv AND AlL oR tHE PARTIES OF
OR. MANNER, WITHOUT liMitATION, ANY CLAIM ARISING OUT OF OR .ilei.ATING TO .THIS NOTE; ALL
PAST, PRESENT CREDIT FAc.ILITiEs AND/OR AGftEEMENTS: INVOlVING THE PARTIES, ANY
. TRANSACTIONS 'BIE'tWEEN OR INVOLVING 'THE PAR.TIES,. A.ND/OR ANY ASPECT . OF. 'ANY PAST Oli . PijESENT .
. RELATIONSHIP OF THE PARTIES, WHETHER'EiANkiNG OR OTHERWISE, SPECIFICALLY INCLUDING ANY ALLEGED TORT
COMMITTED BY ANY PARTY. . . . . .. .
. PAnTIES. SHALl ALLOW IN DISCOVERY IN .THE_ FEbERAL OF CIVIl.
PAOCEDUilE FOR A PERiOD OF ONE HliNDJiEO TWENTY (120) DAYS AFfER THE FILING OF THE ORIGiNAL RESPONSIVE
PLEADING; DISCCIVERY MAY CONTINUE AS AGREED IiY THE .PAFITIES OI(As AllbWEo BY THE
ARBITRATORS. lJN'RESOLVED DISCOVERY DISPUTES SHALL. BE BROUGHT TO THEOJ\'ITENTION OF THE ARBITRATORS BY
WRITTEN MOTION ,FOR PROPER DISPOSITION, INCtuOING ilULIIiiG ON.ANY ASSERTED OBJEC.TIONS, PRIVILEGES, ANo
PROTECTIVE ORDEFfREqUESTS AND AWARDINil REASONABlE ATTORNEY'S FEES TO THE PRE\! AILING PARTY;
IN THE EVENT THE AGGREGATE OF ALL -AFFIRMATIVE i!LAIMS. ASSERTED EXCEED.$500,000.00, EXClUSIVE OF
INTEREST AND ATTORNEY's FEEs,. oR U?oN rile WRITTEN REQUEsT oF ANY PARTY. t1J PRIOR to tfiE oissEMINAtloN
oF A usr OF POTENTIA'L ARBitRA.roRs. -THE.AMEAICAN ARBITRArooN AssociATION sliALi. .. coNolJcr AN'IN .PERsoN
:IIDMINiSTRATIVE CONFERENCE WITH THE PARTIES AND THEIR A!roRNEYS FOR i:HE FOLLOWING. PURPOSES AND fQR
SUCH ADDITIONAl. i'URPOSES As THE PARTIES Oil THE AMERICAN AIJiliTRATIPN ASSOCIAtioN MAY DEEM
APPROPRIATE, (A) 1rp OBTAIN ADDIT!ONAliNFdRMATION ABOUT THE NATURE AND MAGNITUDE OF THE DISPUTE Aim
.. THE ANTICIPATED 'i.ENGWH OF HEARINGS AND SCHEDUliNG: (B) TO DISCUSS THE VIEW THE PARTIES ABOUT ANY.
TECHNICAl.' AND/011 OTHER .SPECIAL QUALIFiCATIONS OF THE. ARBITRATO'RS: ANO (C). TO CONSIDER, WHETHER
. MEDIATI9N oil OTHER li!Erfibbs .OF I)ISPUTE RESOLUTION MIGHT BE 'APPROPRIATE, AND 121 AS. PROMPTLY AS
PRACtiCABtE AFTER THE SElECTiON OF THE AlliliTRATO!\S,' A PRELIMiNARY HEARING. SHALL BE HELD AMONG. THE
PARTIES, THEIR AHORNEvS AND tHE ARBITRATORS. WITH THE AGREEMENT OF THE ARBITRATORS AiliD. THE PAimEs, :
tHe PRELlMINARY.fiMRING MAY BE cONOUcTED BY. TELEPHONE CONF.EfiENCE CALL RATHER THAN IN PERSON. ATTHE
- PREUMiNARY THE iVIAi"TERS tHAt MAY BE .coNSIDEti.ED SHALL INCLUDE, WITHOUT: UMITAi"ION, A.
PREHEARING .. SCHEilULING. ORDER ADDRESSIN,G IAi PARi:Y'S DUTY- TO SUiiMrr A DiiTAILED stATEMENT oF
CLAIMS, DAMAGES Afo!ll/OR DEFENSES, 'A STATEMENT OF THE ISSUES BY EACH PARTY AND ANY. LEGAL
. AUTHORITIES THE I'ARTIES Mt,YW!SH TO BRING to .THE ATTENTiON OF >HE !'ilBITRATORS: (B) RESPONSES AND/OR
. REPliES TO 'THE PLEADINGS 'FILED IN. (:OM.P(iANCE WITH SUBPART 2(A): (CI. STIPUlATIONS REGARDING ANY
UNCONTESTED FACTS: (D) EXCHANGE AND PilEMAilKING OF ALL.oocUMENTS WincH Ellcfi PARTY BELIEVES MAY BE
OFFERED AT THE ARBITRATION HEARING: (Ei.THE IDENTIFICATION AND AVAILABiLITY bF WITNESSES, INcLUDiNG
EXPERTS, AND S!JC:H. ADD.ITIONAL MATTERS .REGARDING WITNESSES .INCLUDING THEIR BioGRAPHIES AND A sHORT
.SUMMARY OF THEfiii EXPECTED. TESTIMONY, IF) WHETHER A STENOGRAPHIC OR OTHER OFFICIAL RECORD OF THE.
PROCEEDINGS SHAicl BE MAINTAINED: ANi:> (G) THE POSSIBILITY. OF UTiLIZING MEDIATiON OR OTHER AltERNATIVE
METHODS OF biSPllTE RESOLUTION. . . .
. .FoR bF. 'THE PARTiEs' LENDER ao,;.o;...ER, ANI) EAcH ANb l'eRsoNs
AND ENTITIES SIGNUNG THIS AGREEMENt OR ANY OTHER AGREEMENtS BETWEEN OR AMONG ANY OF THE PARTiEs As
!'ART b.F nils TRANsACTION. ''l'HE tHAi.L ALSo JNcqJoE 'INDIViDUAL AFFILIATES, oFFICEFts.
DIRECTORS, .EMPLO:YEES, 'AGENTS AND/OR REPRESENTATIVES OF AiiiV PARTY 'TO SUCH .DOCUMENtS, AND 'sHALL
INCLUbE ANY otHER i:t;VNER AND HoWER OF nils i\GRE.'1ENT: . .
.'!'HE PARries tHE. 1\iGfit TOINvokS SElF, HELP REMEDIES As NtiTIFICATI!JN OF'
ACCOUNT D.EBTORS; SEIZUR!;:AND/OR FORECLOSURE OF' COLLATERAL, AND .NON-JUDICIAL SALE OF
'PROPERTY AND REAL COLLATERAL) BEFORE, DURING . OR AFTER ANY ARBITRATiON AND/OR REQUEST ..
ANCILLARY oR PROVISIONAL. JUDICIAL REivl.t=:DJES !SUCH AS GARNISHMENT, SPECIFIC
RECEIVER, INjUNCTION OR liesniAINING OROER, .AND SEi:tiJESTRATION) BEFORE OR AFTER ANY ARBITRATION.' THE
PARTIES NEED :N_ot AWAIT .THE OUTCOME OF tHE ARBitfiATioN BEFORE USING SI:U=-HEli:'REMEDU:s. USE Of SELf-.
HELP OR .. AND/OR PROVISioNAl JUDiciAl REMEDIES SHALL NOT OPERATE ASA WAIVER OF EITHER i'ARTY.'S
RIGHT tO COMPEL ;ARBITRATION. ANY ANCILlARY OR. PROVISIONAL REMEDY .WHICH WOULD liE AvAILABLE FROM A
COURt P,TLAW SHI\Ll S.E AVAilABLe .FROM THE ARBITRATORS. . . .
rHE PARTIEs AGREJE riiAr.MY AcrloN REGARDING ANY .rfis I'ARTIEs sHALL e1i'HER ae
BROUGHT BY ARBIT!iATION, AS DESCRIBED-HEREIN, Oii BY JUDICIAL PROCEED!NGS,_BUT sHALL NOT BE I>URSlJED .
SIMUL.TANEbUSLY IN DIFFERENT PR FORMS. A "TIMEI,.Y, NOTICE OF INTENT TO ARBitRATE
PURSUANT TO THIS AGREEMENT STAYS AND/OR ABATES Afjy AND ALLACT!ON IN ATRIAL COURT, sAVE AND EXCEPT
. A HEARING ON A MClTIOI,i TO COMPEL ARBiTRATION AND/OR THE .eNtRY OF. AN dRbER COMrELllNG ARBITRATION ANii
STAYING AND/OR LITIGATION PENDING THE FILING Of THE FINAL AWARD OF.THE ARBITRATORS. ALL ...
REASONABLE AND NECESSARY ATTPRNEY's i=EES AND ALL TRA,VEL COSTS SHALL BE AWARDED TO THE PREVAilJNG
PARtY ON ANY Jlii01riON ITO COMPEL ARBITRATION AND MUST BE PAID TO.S.UCH PARTY WiTHIN.TEN (10} DAYS PF T.!-IE .
SIGNiNG OF THE CRiDER COMPELliNG ARBitRATIONl. . . . .. .
. ANY OF INTENT
PARTIES WITHIN 360 DAYS AFTER DISPUTE HAS ARISEN. A DISPUTE IS .DEFINED to liAVE ARISEN ONLY lJPON RECEiPT
OF SERVICE INCLUDING SERVICE OF A.COU.NTERCLAIM; FAiLURE TO. SERVE A WRITTEN NdTICE
OF INTEf<T TO ARBITRATE THE TiME SPEC(F.ieo f,BI\)VE SHAtl BE DEEMED A WAIVER OF THE AGGRIEVED
PARTY'S RIGHT tp ARBITRATION OF SUCH Cl;l\IM. THE IS.SIJE.OF WAIVER TO THis AGREEMENT IS
AN: ARBITRABLE
ACTIVE IN liTIGATION DURiNG TilE 360 oAy WHETHER PLAINTIFF .oii
DEFENDANT, i$ (IIDT A. WAIVER 9F TO GOMPEl !IRBI'fRAT!!)N. ALL DISCpVERYOBTAINEDINTHE PENDING
liTIGA TJoN ly!AY se USED lN. AI\!Y stJsSEQUENT P,RBIT:RA.TJpN
\'.
'+.\
..
000.00 Promissory Note with Extensions Pg 5 of 11 . JHE PARtu:;s FURTHER THAT> NO iSHAl.L.E CERTifiED AS A
:ACTION PR. PROCEED .p.g. A ACTION, oR ON, A BJ,\SI$ INVOlVING .CtAIMS BROUGHT IN A PUAPOAT!'D
fli'PAESEI'lTATIVE. CAPACITY Ol'fBEHAlF. Of'THI' PUBliCi QTHER CUSTOMERS' PA.POTEI'ITIAl CUSTOMERS OR'
. PER50f"5 $1\IIIW\Rly SITUATED ANP (Iii NO .ARBITRATIOf'! PROCEEDING HEREUNDeR BE cONSOLIDATED WITH, OR.
Jo!OiNED WAY W!TH. ANY Ff\OCEEDINQ;
Ul.
r.n1
In I
(o)
!pl
(q)
J\NY.ARBITRATOR s!'LEGT!'o.sfiALL se THE.suBJEcT IVIATTER of THE.P!SR\ITE. oF THo.
.. PARTIES SHALL PAY AN EQUAL sHARE OF)HE AR81TRP.TION .COSTs,. FEEs, EXPI''!sEs, AND OF THE ARBITRATOR$'
FEES! C?OSTS AND . .
'ill srAi'urEs of o'rH.EAI'ilse BE APPLicABl!l sHALL APP<Y ro All
:IN Aj'jY ARBITRAllON' .. PROCEEDiNG. HEREUNDER AND: THE CQMJI!IENCEIVII'NT Of A.NY ARBITRATION
.. PROC!;ED!Nq TOLLS SUCH ST.AWTE$ OF LIMITATIOI'JS . . .
IN !INY !IRBIWl'ioN TO riiis pfiov;s16N: ARBITRATORs, oR MAJORITY oF rimvi, 1\R< .
SP!'CIFICAL!-Y EI\IIPOWEJiED To DECIDE !BY Docuri!ENTS oNLY,. <mwiT!i A HeARING; AT TH!l AR81TRI\TORs' soi.E
't!ISCROTION) MQTipi\!S WHICif ARE.SUB$TANT1Ally,SIMI.li\R TO MOTIONS TO. Dl$11/11$$ ..
Al'lD FOil i\,DJYDI!'i\TION. . . . . .
SHALl.J>URVIVE AMENDIVIENT, OR EXPII\ATIPf'i Of TH< A.GREEMENT
If'! WHICH Tlfi.S PROVISION 15 cONTAINED, .1\LL.OF lifE PARTIESOTHERWISE EXPRESSLY AGReE IN WRITJt;G,
THE niAT .TH!s evioeNcEs .A .TRANsi\PTIPN. INTI'RSTJITE
COMMERCE: THE F!'DERI\L. ARBITRATioN Al:T SHAll .GOVeRN THE INWRPRETATION, ENFOI!CEMEI\!T, AND
PRQCE!lDIJI!GS. P!JI!SUANT TQ THE ARBITRATION OF THIS AGf!E!lM!li\!T, . . .
THE ARBITRATORS.; A OF SHAiL irrTPRNeY'$ FEE$ Af'!D TO PREVI\ILING
.PARTY PURSUANT .TO.TH!= TERMs Of TJ-us Aofu:EIVIt:NT.
N!'ITHEI! .PI\RTIEs Tlfe MAY oR oF ANY
A!lBITRATION HEf!EUNDEI! . .WITifOUT PRIOR WRITTEN CONSENT OF ALl PARTIES. ANPIOR CoUf!T9RDER,.
ll Of ANY ARBITRATION PROt;EEDJI\!<1 HEReUNDER sHAll BE iN . COUj'ITY;
THE lENDER OTHER OWNER OF THiS NOTE SUCCESSORS ;ND
ASSIGNS. THIS NOTE IS GOV<RNED BY APPLICABLE'TEXAS LAW,. EXCePrTO.THE EXTENT TH.E UsURY LAWS OF .TEXAS ARE
PI!E-EMPTeb BY FEPJ;RAL <AV'J, IN WHICH CASI;, SQCif FEPI;RI\L LAW SHALL APPLY, VEII!U!' OF ALL ACTIONs ON THIS NOTE;
SlfAlL liE IN COUNTY, TOXAS, AI\JD All 08l(GATIONS REOUIREDHEREIN ARE PERFORf11ASle IN
COUNTY,TEXAS. . . . .. .
If th.e loan pr9c8eds are to. be used prim!lri\Y for persC!nal! f8m!ly Orhol!Sf!hold l!Sfl
1
folloWirlg ilotice apply;
NOTICE To coNsUMERs; WNDER 'rEXAS LAW IF vou coNsENT to Tfllo sUBJECT To A RATE
l\8 HIGH As 24% ANNUA" PERCENTAGE JjATE; OR THE STATE USURY.CEilfNG, WHICHEVER Is LESS, . . .
. . . . , . : .. No ofiAL AGREeMENTS : . . .
THIS WRITTEN AGREEMENT.REPRESEN'rS THE FINAl:. AriRE'EiVJENT BETWEEN THE pARTIES AND MA)' NOT BE CONTRADICTED BY
EVIDEMCE ORAL'AGREEME!';TS .
NO THE PAF!I.!ES . .
. . .
City/State<
.IBC0003 03m/O<I
PageSOfS
.Number of'

(14)
(b) One (1)
. Montl)ly
Fiplll 'M1\'YI; ....
Amoimtof

. Interest only on !111
outstanding
principal.
1\11 . outsiaD.ding
principai ,U,d !l11
acCnie4, : unpaid.
"iiitere'st
:;han tie due and
payal>le..
When :PavmentS
are Due
.
Mijrch 1, 2Q07, and
con.tinuipg
'mg11thly .on. the
frrst (! ") day Of.
each
calendar . . month
1,!11til and jnclnding
April! . 2099.
.. 011 Final Maturity
Pate.
This Note is a. revolving note a cif loan ;a E\orrower.
Maker may borrow, tepay and reborrow'herei,ir,der at any tiiiie 11i1c!er this provi<!ed,
that j:he principal balance' O)ltstanding underJhls ai.ai:w thnesha!l.not exceed Two 'Million an<!
. Nohoo Dollirrs ($2,000,000,00). The imphld balance oftliis Note :mail mcrea:se and decrease with
each the may be, a.ncl entire principal
balance of this l',lotemay be paic! iti ftill froin tiine to time, this Note sha)l'not be deemed tennlliateci
or asa result thereOf.
. . rhis 6Viiuateq, anq upon the
anQ Lender. is (i) & pegative in the
c!epos!t.a:nd/qr other banking or.(ii) change in the.

increases the riSk of repayiJlent, t4en in"its sple absolute tnay increase
interest rate ch&rged in cQnnection with this facility f?y upto l,QO%; as it.may flo(l.t frOm ti111e from
time (i.e. increase to,l.25% the New York Rate).
. Executed dfF<;:bnwy, 2008.
BORROWER:
Delta .
J:iy: ))e!ta Produce LLG, . .
a'Texas limited Jiabili . company,:Generlil Pariner
1.8.0.
,':
....
. . ..
. . BALLOONIUDll'it ..
. ; .
. ,:
. YOUMu8TREPAYTHEflmRE.
:PRfNCJrAL BA:LANCE.OFTHE LOAN ANti DNPAID INTEREST THEN rim
sANx. :is UNDER No oi.trGAno:N :ro RWrNANi::E Tim. io:AN. .You wour:n,
mEREFoR, BE REQmRim oF oT;HERAssE.rs yqu MAY
. OWN, oRYCJU wouinm VB TO FIND A rviA.YBE 'mE BANK
. . . ' . .
.. HA,\IE.TFirs LOAN W!TfiA.T MA.'rURiTY. YOU MAY HAVE TO l!AySOJy$ OR ALL
CLOSING cosrs NORiM.LLY ASSOCIATED WITHA NEW LOAN !lVEN lF YOU .
OBTAIN R:EFiNANCrnG FROM THE BA1'11<: ..
. .
EiEcuriiD tliis_ ._. _ 2oos.

pelta Texas limite<! parinership
)ly;
. . . . . . .

SA. L;
A.
B.
c ..
D.
E.
Equipment All of or acqllfred by Debtor, .
iJlciUdiriS" without m8.chin.eiy, vehicles and traP.e .fixtures,
togei:het wii:h.<IDY and all access)o!ls; attachments. and other additions to,
substihites. aml replacements llnc! iPlptC\vements cif !be. eqilipnwnt, whetlier
now oWjied or at !UlY time hert<aftei: acqqi!ed or made, together witb all tools, parts
and appurtenances now w at any .timer hereafter .used in an4 together vyitb all
proceeds. of !be equipment describei:! of referred to .. above;'i!lc!udjpg insurance
. payable by reason of joss or <!aniage thereto,. aj,d all proceeds of any' policy pf
insurancpequiret\ on !be Collateral by Party,.inclqding."1ly refunds or
Ullearned .prercJU1lls b;i corinectio!l Wii:h illy .cancellatio!l, adjustment or
. of any. pf
Ail: of Pebtor, ,V:,henever acquired mid whetlier now or .
li!'reafter eXisting, mchidi!lg but not limite<! to aR goods; W?res and mercharidise
iniende<Hor sale or 'ieas" by Debior tO .be furnished by Pebtor, under contracts
ofserviceand all raw materials, goods in' process, finfshedgoods and of
every natQr6.used of usabl.e."in cc.nwectiOn with t4e process4'l.g,
packing, sliippiilg, ;idyertising, selling, leasfug or .ftirnishjng o( such services,
gooc!s,.wares and'merchandise; '!II certificates of.title, manufacture's statements of
opgin an<l. other doCJiments aiisirig frp;i, pr to. such mveniory; !Uld all
B:cCeSsip.tis; othcir tO,. substitutes for; replacellients for,
. 'improvements to. . aft<i retilrns .of s)lclr ihventory; and all .proceeds of such
invent
0
ry.
Fixtures.
(1)
(2)
All of the per;onal or. ollJei:wise;. whether now existing or
he:reafter arising, exiSting 9r cfeated, .nuw .. or hert;:"a.:fter attache.d . to or
: incorporated 'i)lto or psed.in or about the Debtor's premises, jnc!udi!lg .au
furnifure, ,(ppllances, :funiishings, gdods, equipment, !l)ld .lll>Whinery'
owned by. Debtor and other tangible perso)1al j,ropeity now or hereafter
affl!<ed,'attached or.rela\ed.to s11ch property. or now or here!\fter affixed,
attached or related to sucl! property or .ttsed 'in col1llection and
'!II replacements,. substitntions anil il<!<\itions for or to ;my of jhe foregoing;
.. aild:>per to; ..
.for, and i;i,proyements: of, .!be. propeji:y described in' (a)'
abqve, whe"Qler :Q.OW o.wned _o.( at time acquired or p;if!:de,
. together witb' all tools, parts. and 'appui;enances IJ.OW or at any time tised 'in
.
(3):: All prodtiis ana . procee4s, . u;ciucu.n'g, without . insurance
proceeds of; a.lld:additions; improvements lind accessioqs. to,. all and any of
the property described ahQVO; e)( chiding 'pi:OceedS USec\ tO replace WO;:ri-oqt
orcibsolete.equipgwnt.or other prope!'!Y
. Acciiunts: . Aii. and Of' Debtor, .whenever
acquiie4 ,m.(J wlietbet .now or ,hereafter <>Xi sting, induc\ing, but not to,
. accoU!ltsand chattel paper which out.of:.{i) the s,Ue or oll)er of
(ii) the (iii) !be .furnishing of, the use of, <jr the lease
of>iny of. !be Col\aferal, an<! (iv) agreei)lellt.to provide anY of !be above; "114
all:pfO<;.eeds iri .any Stl9h
. and/or chattelpaper.
. . . . .
. Ali iiltangibles of Debior, anc[
i+ow or and all proceeds thereof.
witlr &Il recorQ,s, flies, docmr{en,ts anc(pther
pertaining. to; and. a!f .coJ\tamers 'and packages for, i:he property described or referre!'\ to. m
silqseclions A !bro. ugh: E above, and !he proceedsof;ill tl\e foregoing. .
. '
,., .. ' " ,\ (\ .
200906-0415:13
p 1/1
EXTENSION AND/OR MODIFICATION AGREElv.I.ENT
COMMERCIAL INDEBTEDNESS
Date: Mu !. 2Q09 The "late charee" mav be accessed without notice, and shall be
immediately due and payable.
Account No : ___________ _
Each oavment shall be applied as of its scheduled due and
in the order of application as the Lender in its sole discretion
mav frorri time to time elect.
Borrower: De)ta Produce J,.P
with nnv and all accrued and unpaid interest and/or
late char2es. ,;; ti
The starting rate of interest will be -j;i(
pcr.annum beEinnina on 5/!a009
v'
New York Prlmt noallng+l%
f'inal MaturitV Date: Mv 1.2010
The failure of Borrower to pay any of the paymenl(s) of principal
or .any intereSt thereon or ao.crued late charges
1
when the same is
due and payable shall permit Lender, at its option, to accelerate the
maturity, without notice 10 of all, or any portion, of the
outstanding unpaid principal balance and all accrued and unpaid
interest, and all accrued and .unpaid late charges under the Note I
this Agreoment, whereupon the same shall be due and payable
immediately.
Any outstanding and unpaid principal, accrued and unpaid interest
all all 'fees, late charges and/or other charges incurred in this
transaction by, or for the benefit of, Borrower, if any, which remain
due and owing on the Final Maturity Date ore due and payable on
such dale
% Borrower renews and extends the Note, and any and all Security
Agreements, security interests, Oeods of and/or other liens
created by Borrower in favor of lntemational Bank of Commerce,
Except as provided herein, all other terms and conditions of the
Note, and all Security Agreements, security interests, Deeds of
Trusts, and/or other liens created by Deeds ofT rusts and/or other
Loan Documents, if any, continue as written, and remain in full
force and effect.
Borrower promises to pay to the order of International Bank of
Commerce the Outlllnding Principal llalancc on the Note
according to the terms hereof together with interest B!l it accrues on
. the outstanding unpaid principal balance tllltil paid, In no event
TO THE EXTENT ALLOWED BY LAW, ALL MATURED
UNPAID AMOUNTS Wll.L BeAR INTEREST AT THE
MAXIMUM LEGAL INTEREST RATE ALLOWED BY
APPLICAB!.E 1-A W. lf applicable law does not set a maximum
rate of interest for matured unpaid then Borrower agrees
that the maximum rate for such amounts shall be eighteen percent
shall the rate of interest to be paid on the unpaid principal
balance be less than
ver annum. nor more than the maximum leal rate allowed bv
applicable law. (18%) per annum.
To the extent allowed by law, as the late payment charge undenhe
Note/this Agreement, Lender may in its sole discretion (i) increase NO ORAL AGREEMENTS
the interest on the principal portion of.anypaymcnt.amount that is
not received by the payment due date until paid to the maximum THIS WRI1TEN LOAN AGREEMENT REPRESENTS TtiE
rate allowed l>y law, computed on a full calendar year basis from FINAL AGREEMENT BETWEEN THE l'Al!.'IU;S AND
the payment due date until paid, or (ii) should any payment be MAY NOT eE CON:I'RADICTED .BY EVIDENCE OF
more than ten (10) days late, Borrower shall pay a one-time "late PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAl,
charge" pcflatc payment equal to five percent (5%) of the amount AGREEMENTS OF THE PAll, TIES. THERE ARE NO
of. the .interest .such paymenl, .:-vith a UNWRITI'EN ORAL AGREEMENTS BETWEEN THE
minimum of $10.00 and a. maximum of $1,500.00 per late .. PARTIES.
payment.
Rorrower Borrower
' Delta Produce L.'P
a Texas limited partnership
B:v:Deltn Produce manaecrnetll. l.l.C.

EXTENt N AND/ORMODIF.ICATION ACR1 .IENT
.. COMMERCIAL INDEBTEDNESS
Dato : March l5. 2019 Tho
11
latc char:Re
1
' may be accessed without noticc, and shall be
immediately due and payable.
Account No: _________ _
. payment shall be am>lied as of its. sCheduled due date and
in the order of application as the Lender in its sole discretion

together with any and all acciued and unpaid interest and/or
Jato charnea. .
may from titno to time elect.
The failure of Borrower to pay any of the paytnent(s) of principal
or any interest thdreO!l or accrued_ late charges, when the same is
due and payable shall perinit Le:nder,-at its optio'n,to ace-Olera:te
the maturity, without notice to Borrower, of all, or any portion, of
the outstanding unpaid principal balance and all accrUed and
unP.aid interest, and all accrued and unpaid lato charges under the
Note I this Agre_ement, whereupon the same shalr be due and
'payable itnmediately.
aU all fees, late charges and/or other. charges in this
transaction. by, or for the benefit of, Borrower, if any, which
lt'lnain. due and owing on the Fmal Maturity Date are duo and
payable on such date
renews and extends the Note, aD:d any and all SecUrity
per annum beginning on ;msnoto Agreements, security interests, Deeds of Trust) and/or other liens
created by Borrower in favor of International Bank of Commerce.
RLOC Note,, and aU secutity security lntetests, Deeds of
New York Prime

Trusts; and/or other liens cre11ted by D'eeds ofTn:ts:ts and/or dthcr
Final.MaturltvDatc: M!yj5.2011 Loan Documents, if any, aontinue as written, and remain in full
:Sol'J'Ower promises to pay to the order of Intomational Bank of
Commerce the Outstanding Principal Balance on the Note
according to the tenns_ hereof together with intereSt as it accrues
on the outstanding unpaid pr.iiicipal balance until paid, II\ no
event shall the rate of :interest to be paid on the unpaid principal
balance b"eless than Four and three' quarters percent (4.75%)
.Per annum, nor more thail the Dlaximum legal rate allowed by
applicable law.
To tho ext.ent allowed by law; -as late pay'mcnt cbargo Under
the Note/thiS Agreeme-nt, Lender may in its solo discrctiop. (i)
increase the interest on 'the principal portion of any paym.Ont.
amount that is not received by the pay,ment due date Ulltil P.aid to
the maximqm rB.t.e allowed by lawl computed on a full calendar
year basis from the payinent due date until paid, or (ii) should any
pO.yinent bo more than ten (1 0) days late, BOrrower shall pay a one--

11
1ate Charge" per late payment equal to five peroertt (5%) of
tho amount of the past duo principal and interest of such payihdnf;
with a minimum df $10,00 and a maximum of $1,500.00 per late
payment. '
Borrower
Delta Prdduce L.P
By:DeltaP.roduco mB:b.agement, LLC,
Address
2001 S. Laredo
San Al)tonio Texas
force and effect,
TO 'l'll'B EX1'BNT AU..Ow'ED BY LAW, AU.. MATURED
UNPAID AMOuNTs WlLL BllAR lNTillillST AT TllE
MAXlMUM LEGAL INTEREST RA'l'E AU..Ow'ED BY
APPLICABLE W. If applicable law does ilot set a maximum
rate of intorest for tnarurcd unpaid amounts, then Borrower agrees
that the maximum rate for such amounts shall be eighteen percent
(18%) JYer annum.
NO ORAL AGREEMEN'i'S
tm:S WR.l'tT.EN LOAN AGREEMENT REPRESENtS THE
FINAL AGREEMEN'r llEtwEEN TB'E PARTIES AND
MAY NOT BE CON'l'RADIC'l'ED BY :EViDENCE OF
PRIOR, OR SUilSEQUllNT ORAL
AGREEMENTS OF 'l'HE PARTiES. TliERE ARE NO
tlNWiU'X'I'EN ORAL AGREEMENTS BE'tWi\:EN Tll:i;:
PARTlES
Adc,irells
i. . of Lerce
By:
Mt?IfaetK. So i.n
title: ExeCutive Vice P!esiderit
::.:.
. ' ..
:_,-.
EXJCE>" -. AGREEMmr.
...:dMMERCIAL !NriEifriiDNESS
M_ar I_?iot_I-
Ac:cdfiilt No_.:_ 241DS61}45:; ..
.DeJtil-Pi-odiiee.t.P
'
ijormwer. pro_mli.eso to. pay. ID-Ihe l">f li!lenl'ational :aimk -of
flie- Note
tl;l'-' tenns
-the nutiitaflo:!lng .wijl:iid'P:i-JD_C)p_al; ii,afl)iice-, UDt!l' pBl!L Jn- no. OWJt
shiill lbe rate ofinte=t to &.1pWil oii pdnel_P.iti -
!<iss _thllii toW: mid:t\ire-(i.quarm8 't1S%
_peio immim, nlll'-"!lll'itliliil. ;illQ-ii;cd:liy
-applicable!. law,
'io :tile.-f::iiilt' 6y.ia.w, as late pay!11-ell.{ chl!tgtl.undcr !he
NoleJthi\i"Agteemcpt, Jllliy. -j;l.its aote,dironili.OI! (i)-ii!creami
wrili.e-prinolpaj portlmj of wiy 'p;l)'lileilf is
-not tecejved by _lhe' pi\)'Jiiel{t diu::dai;C-uutil pald_:ro Uie-
rnte allowed by-law,: 'l;llm)lnte4 on :\i 'fii.\1 fmni
tl)e payment until m:{il)shou\d acy_payrni:ot'b'morlr
: (10J lhi).'lllale,:Bon-owef sliall pay_a
_tlct Jil_t!; tq (5%) a )be _>1,1!l0.\Dll'o_f -t]ie
due pruicrpili'Qd.tp.!Cil;8t Qf!l\l<:h.pa)'.in!illt, wllli U)lin!.m.Um of
SHl.Od wid-il miiXlmum
Borrower
Del!a- Proil.uee, LP;
A 're"i.i!s:u!rlnimpa.rtnershlp . . .
T!le cil!ll'ge'' may bc:act:r:sso:d without noti"t:e; Md shall be
and payabl<\. -
Ea.;h shhll 6e.a[ipljtdils d.ite llild
. .
The. f:iiluro 'ofB'orrowet I<J. pay 8II)'- Of the payment(s). of prindp_a)
ll"'l' ipterest lboreOn or. 1ato the Spnie is
!lull. BJ!d Shall pl:!llllt Optiorr, 115 the
lljilhiiity, WithoUt i161iCt.to B.jm>wer, of' aU, fir any'p_orliO!I, of. the-
. ou!Btallding unpaid ptfucipal: balance and sit aCiiilled iuid unpaid
interest:, ana" and "\IDPaid late under tha Note {.
tltis' Agreement, whereup_!lll tbe-silllle shall be due
lmmedintely.
l!lld'unpald' and unpaid 'ln\=St
all "all fees, late cltat:gf:3 npdlor -Q.t\1\:r xhmge:r incurred in this
irJ.oSaetiOJI by, w for of; BOI'J'Owet, if.BDy..whieh rem;lln
iuia_o_wing ou the Fi!llil are due:. lind eilyabie ij.i
wch4!J:tu.
Ti:) 'THE EXTENT AU.oWED- BY. LAW; .ALL .MA.TUREt>
-UNPAID AMOUNT&. WJU.. BBAit n'ITBRES-T. AT -THE
MAXni-hJM: l.EQAL .INTERES-T RA::rn .AUOWFJ) BY.
i\.PPUCABlli LAw: -If applieubl\t.faw. docs ntii mi!Ximull)
i'ale of'.-imm;<it for mafU!_eilunpald ammmfs, a-lllt'OWI:I'
tl!1ifthc lXiii:>i.lmitmt.ite--for -sncij !imourits 'Shalt' be eigbtCCn. pim:erit'
(l8%)'"Per'lllll\Um.
N6 ORAL AGRii:EMEN"rS-
Tms WRIT.rEN LOAN.AGRil:El)-fENT REPRESEN:TS THE
;'I._GRI.EM_ENT BETWEJ!:N THE P.AR,T:JES Am)
1'!10T BE: CO,NTRAD'ICTED BY. riF
t.;:ONiEMPORANEo.IJs oR SUBSEQUENT ORAL
.AGREEMENTs OF THE PARTIES . THERE ARE NO
UNWR!TIEN ORAL' BET-WEEN TiiE

Nuil\.e: 'Brue1: MeMlDIIll
title:. i'tcsidenr;
12-50073-lmc Doc#45-3 Filed 01/23/12 Entered 01/23/12 13:16:08 Exhibit 3-$600
000.00 Promissory Note with Extension Pg 1 of 14
Account No: /0 31?./ i>Cfi
Officer
PROMISSORY NOTE
Borrower DELTA PRODUCE. L.:P., a Texas limited part_nership
Amount . . . oata: 4 , 2010_
For value receiv'ed, the receipt and of which hereby acknowledged, .the undersigned, Joint!; severally,
{hereinafter, "Borrower", whether one or more} promise to to the 9r'der of Inte'rnat1,onal' of Commerce
"Lender"), at 130 E. Tl;aYis,, S{ln Atitonio, Bexar County, Texas the SUIJ'I of
. Six Hunared Thousand and No/100 .
Dollars ( $ 600 . ooo . no 1, In legal and lawful money of the United States of Amer.loa, with. as It
accrues on the qutstand!ng principal balance from d?te Of adv:anc13 of such principal until paid,
. The interest rafe Shau'be' ' porcent per or.
XX The interest rate be. flof;ltlng at 1 00% per annum above tho NEW YbR.K
PRIME RAT_E (''Prime (deS9fibed beloW) as it fluc'tu.a:tea from time tO time;-provided,
that in no .event shall the rate ofintefeSt (plus said2IDRJWin excess thereof, ifJlllY)Jc,o bepai.don.thC \llJpf!id
principal ofthi,s Note be less than annum, nor niore
'The starting interest rate on this N9te shall b.e 5 00% , . . . 'percent per
atlilum. The of due hereunder shall ail of the date pf any 'cb:ariie in the Prl.ti:l.e R.,atc,
*seventeen BD.d three-111;1-a't'ters .{11./::J"l.J percent. .
The INTIUrnATION:A.L BANK O:F COMMERCE PRIME RATE shall ;nean the rate bf interest ,
annollil.ced from tiple to time by LenQer, as its plime rate,
The NEW YORK PR.ll-d!3 shall me all i:he annuallendw,g rate of interest ann:olUlced from 'time to ilm'e by
JP Morgan Chase &.. Go., New York, as its prime rate., NeW York Prime R:ate has been llelccted as
the :Primo Rate and if, J1 prl;ne.tate is not announced Oy JP orgm Chas;i & Go., Now York, NeW Yorl):,
then the"Jnternational Ba'nk ofCo.mmerco P:dme Rate, minus o:o:e percent (1%) shall lie'_tlic Prime :Rate, .
Use of of-said-Prime Rates ;s not to be as a watt.mty orrepresentation.that rates moro tijan another
i'ato cr indox, that other lo3.Jls Or facilities maY be based on ot]ler indices or that rntcS an loans t'o others may not be
pclo'!Y. such primuate, ' . .. . . , .
The interest is ca,leuiated on a 360-day .factor.applied on !l 36S.day year, or a 369-dayyear;"m. the event that tho yculi' ts a leap year, en
tho unpaid principal to the date o.feaeh insta11D:J.9D-tpaid an4 made crecUteQ first to th,e of the accrued and.
the balance .to tho r.;duction of .the principal. tTovlded, however, that in the event. the interest rate tho maximum allowed
by law, said maximum. legal rate $all be coro.putCd on a full year $65/365 days basiS or on a daYs bas!S,m
the evep.t the year is a leap year, The Chllf&Cd. 'and hcreJ.n Contrl!cted for will not exceed the maxiinm:J;l auowed by law. .
. . . . . . .
Matured unpaid amounts Will bear interest on a full calendar year-365/365 days basis or on 2.366/366 days basis, In the
that the year is a leap year, Q.t legal rnte oflnterest:aUQwed by Texas law, unl'css Fcdetallaw allows ab,igher interest rate, in
w4ieh case, Borrower agrees to pay thO ra,tc allowed Qy Federal law. If applicable law doesnot set a maximUmr.itc o"fint-orest for
unpaid agrees that thO maximum for suoh amounts shan be eig4teen (18%) per annum.
To secure payment of and, to \ha extant bY Jaw, may at ba
ovying by the Borrower, or any of them: Borro..yer herebv.grantsto a security Interest and lien. on the
collateral
SEE EXHIBIT "A" .. ATTACHED HERETo _ANn INCORPORATED HEREIN.
Borrowat agrees to tak!il adequate care' of the collateral to Insure the collateral wlth a company Ler]der,
for such hazards, and In $Uch amounts as Lender directs. If Borrower fails to futnlsh Lender with proof .Qf required
Insurance cove.rage, Lerid,e'r shall haVe the authOrity pvrchese Insurance (including sing)e interest Insurance, which i'pay
provide proteCtion oo!y fcir and adq the p(emium for such' Insurance, with Interest at. loan pre-maturity
contrac.t rate, to the ba!a;nce of this Nota,
The Interest !S on a 3'60-day faci:or applied on a 36Ei-daY year, or a ;366,day year, 10 the event that the year Is
a leaP on. the unpe:!d principal tQ the deit.a of each installmen(pald. however, that In tha.ev6nt the Interest
rate reaches the rate allowed by appll.cable; law,.sald maximum legal rata shall be compvted on a full calendar
year 365/366 days basis or on a 366/366 days In the evant that the year ls.a leap year,. The-Interest charged and
herein contracted for will not the maximum allowed by . .
To the by law, matured unpaid amqunts wil! bear Interest computed on a full days
basis or on a 3"66/366 days basis, in the evant that the year. Is a leap year, at the highest rate of interest allowed by
Tex.as Law, unless Federal law l:!llow.s' a higher Interest rate, In whtch ease, Borrower- agree's to pay the rate allowed by
Federill LaW. It appljoablelaw does not set a maximl,lr'rl rate of interest for matured UMpald amounts, then Borro.wer agrees
that the rriax!mutn rate for such Smounts be eighteen pdrcent'18%) per, annum.
To the extent allowed byJaw, as the late payment charge under tlils may. in Its sofedtsoretlon (I) fncraas.e
the Interest on 'the pr!nc!pa! portion of any payment that Is not reoelveO by the payment due date to the
maximum rilte allowed by law, compUted on a full calendar year Qasls from thepayment dU13 data until paid, or (il), should
anY paymelit nqt b.e made (10) days from the. due requ!r'jl pay ,a o'ne time "l'ate per
let's pa'yment ecjual to five percent (6%} of the of the past due principal and Interest of such payment, with a
minimum of '$10 .. 00 and a maXImum of $.1,600i00 per late pa"yment. The."tate charge" may be assessed
and due-and payable.
IBCOOOl
. '".
The outstanding ana unPaid prim:lpa! of this all . .ac,cr.ue,d; unpaid Interest are. P.avab!a Immediately up.on
demand, If no dainand Js than such sums are 'payab!a as follows: .
Number of Ffequency Amount Payments When Payments are Due
.
. SEE ADDiiNDUM TO NOTE.AN]). BALLOON RIDER ATTACHED HERETO AND iNCORPORATED
HEREIN, .
Fina"! 'Maturity Date: _..:J>eu,.n.,e,_,5.L-2:::0:cl,_,l'- -------'-
Each payment shall be applled.as of its scheduled due date tbe of epplioetlonas the Lender In Its sole
d!scratidh tnay from time elect.
All outstanding unpaid principal, allaCcrued and unpaid Interest, and all fees, late charges, and/!'Jr other
In this transaction by, or for the benefit of
1
Borrower. which remS!ri due anQ owing On the Final MSturtty.Date due "arid
payable on such date.
. Lander may, at Its discretion, adjust the amoui1t'of periodic payments described eboveto assure the rematnlng
payments will fullyamonlze the principal of this Note on tile maturity wlthoutany "Balloon" or unequal payment.
THIS OBLIGA'fiONHAS THE FOlLOWING DEMAND FEATURE:
At anytime, and from time to time, whether or not ptior-to and/or during said' scheduled payment Lender may, In
Its sola a'nd absolute reschedula, rearrange: and/Or acoalerata, lrl whole or In part, the outstanding and unpaid
prlnclpal balance, and aU accrued and unpaid Interest an_d, all. accrued' arid unpaid lata charge& under this Note. Borrower
agreSs and promises to pay Lender-all accelerated pfrnclpal and a!!.aoorued and Unpaid lnterest.on such' prfnclpa!, and all
accr.aed and Uhpald late charges. No not!Ce"of.lntent to shall be of- Lender and 6orrower. -eXpressly
waives any right to nbt!ca Of Lender's Intent .td ThB forego!rfg right make demand for Immediate payment
of this Ngte; lri wholE! or In part, may be exercised -by Lender' for an'y reason whatsoav.er, or not Bortowar Is In
default hereunder and in Its scheduled maturity;
THIS OBLIGATION HAS A BALLOON:PAYMENT PROVISION!
THIS. LOAN IS PAYABLE !N FULL ON :rHE FINAL MATURITY DA'FE SET FRRTH HEREIN IF NO t:R!ORDEMAND HAS BEEN ON
THE FINAL MATURFr,Y DATE YOH'MUST REPAY THE OUTSTANDING UNP.AlD PRINCIPAL 6A!;ANC!:, ALL'ACCAUEO AND
UNPAIDINTEREST, AND ALL FEES, LA-TE QHARGES, ANO/OR OTHER CHARGES INCURRED lN THIS "TRANSACTION BY; OR ON
BEHALF OF, BOF!.ROWEA, WHICH REMAIN UNPAID. LENDER IS UNDER NO o.a"UGATiON T.O REFINANCE THe LOAN, OR ANY
PORTION THEREOF, AT THAT'TifliE, YOU WILL THEREFORE BE REQUIRED to MAKE PAYMENT OUT OF OTHER ASSETS YOU MAY
OWN; OR YOU WILL HAVE TO A lENDER, WHICH MAY BE THIS LoNDER,WHICH AGREES: TO LEND YOU .THE MONEY TO
REFINANCE; IF lfOU REFINANCE THIS.LOAN-"AT MATURITY) .\'aU MAY' HAVETo PAY'SOME OR ALl oF THE CLOSING COSTS
NORMALLY ASSOCIATED. WITH A NEW LOAN, EVEN IF YOV OB"TAIN REFINANCING FROM THIS LENDER.
The failure of Borrower to pay en-r of thapayment(s) of Piinclpal or any Interest ihar13on, faas and/or late aharges when
the.sama Is dlola.and..payeble, shall permit Lender, at op:tlon, to accelerate. the maturitY."Without nqtiOe to Bori'o.Wer
1
Of
all, orany of the remaining unPaid "Outstanding, aU aocrU'E1d and uripaid Interest end all accrued
and late of this whereupon the same s[la,/1 dU<! and payable lmmac;l!ate!y, ,
Lender, ai: lis maY a!l QW!ng by and/or
and payable upon deeming -Itself 'to be adversely affected andlbr lriseoura Qy reason of any material change In any Ot
Bor'rower
1
s (Jnolud!ng any .endorsers and/Or guarantors) net worth, Qr. by teasoli of any other change Of coridltlon
whether or not described herein.
BorrowE!r and Lender Intend that tl:ie loan evldimced b'y this (the in stflc't compliance with Uppllcabl"a
usury tf any tl!Jle for, or tjlls. NOta or otherWise In connGct!On
with .would be t,I{!Ui10US \.!rider Ja:-v. tl:\an Of the provisions of"tlils Nota or thedooumentS
the Leap or any action UncludirlS.
W1tlwu.t of !>r.. of by the which n)ay. with
respect to this, Nota or the Loan, It" Is agre"Gd th8t plf 'sums to be uinjiii;IUs shall b8 lmmedlately cr9dlted
Lander.ase. _illiytnGnt of hliiilund&r,or lf'tllls fia8 "alraa"d{ba8n pii!d,'in1nled,!af:&!y fefu!'ld'e!f tci tllq .80rrowar:
Aij compensation !ri.terest appllqable law connection with the l.oim shall bQ amortized,
pr'orated, fu!l'perlodf"tlme:arytndebfO"diliiss IS owiilg DyB.Orrowar; to the' grealE!st extGnt
pemllsslbl.e withOut exceeding. the ''app\IOii.blS maxlmuhJ rata atfoWed .bY hiw lh 'affect from thl)a to tlme dUi'Jng
: < <
In no ev6nt shall the .provisions qf Chapier 346," of the TSxBs Finance Code (which certain Joan
accOunts and i-evo!Ving.tilparty accounts)apply to "th'eJoan.
< <
IN THe EV!;NT ANY ITEM, 'ITEMs, i"ER!VIS OR" PROVISIONS caf.JTA!NED INTH!S INSTRUMENT ARE tN CO'NFqCT Wl"tli THE r.AWS

UNDERSTOOD THAT IN CONT!NGENC,YHA{..L.T.He BQRROWER_OR ANY PARTY
THEREON, OR THEREFORE, BE REqUIRED TO PAY INTEREST IN OF )'HE.RATE ALLOWED BY TH; LAWS Of THE STAT!:! OF
.TEXAS DR FEDERAL LAW, IF SUCH LAW A RATE.9,P INTEREST, THE OF THe I;!EING TO
CONFORM STRIC,TLYJO THE USURV'LAWS AS NO.W ORHEREINAFrER QONSTRUEtl. BY THE <;OURTS JURISDICTION,
THE BORA ENDORSERS; GUARANTQR$ TO ON. NOTE :(THE
"OB.LIGORS") JOINTLY 1\ND )N/\!VE ALL ND\ICES OF
PAY,MENTS(ANQ FOR. N\l.TICES .or!NTENTION.ro. MA!VRITY;
NOTICES OF ACTUAL ACCELERATION OF MAWRITY, .PRESENTMENT, oEMAND .FOR PAYMENT; OF

;)
. :/
DISHONOR, DISHON,OR, PROTEST, NOT.ICES Of DILIGENCE !N COLLECTION HEREOF, EACH .
CONSENTS THAT THE LENDER oR OTHER HQl.QER OF ;HIS.NOTE MA'I AT ANY TIME,AND F!IOM TiM!l TO-TIME,
UPON REdUEST OI(OR.BY WITH ANY .OF RENEW THIS NOTEANQ/OR extEND THE DATE OF
MATURITY HEREOF OR CHANGE THE TIME OR METHOD OF .PAYMENTS WITHOUT NOTICE TO ANY OF THE.
OBLI"OBS;. SURETIES OR ENDORSERS 11/HO SHA-LL REMAIN BOUND FOR THE PAY.MENT. HEREOF.
OBLIGORS WAIVE-EXPRESSLY THE LATE FlliNGOF ANY.SUIT OR CAUSE OF ACTlON .HEREON, OR ANY bELAY IN
THE HANDLING .OF ANY OBLIGORS A6REE THAT HOLDER'S ACCEPTANCE OF PARTIAL OR
DELINQUENT OR FAILURE OF HOLPER TO EXERCISE ANY RIGHT O.RREMEOY CQNTAINED HEREIN OR.IN
ANY GIYI'N AS S.ECURI.:rY FOR THE PAYMeNT OF THis NOTE SHALL NOT A .WAIVER OF ANY
OBLIGATION OF THE OSUGORS.OR CONSTITUTo.WAIVER OF ANY PRIOR OR SUBSEQUENT.DEFAULT;THE HOLDER
MAY REMEDY ANY DEFAULT WITHOUT. WAIVING .THE DEI"AULT REMEDIED AND MAY WAIVE ANY -DEFAULT
WITHOUT WAIVING ANY OTHER PRIOR OR SuBSEQUENT DEFAUlT..
h the extant allowed by Jaw, as this Note
1
and all other lnd6btedness may at any time be owln.g by
(and and/or guarantors hereof) tO Le!'Jder o: bther hd!.der her13of, the Borrower (and any endorsers
and/or hare.of) g!Ve"S'.to Lender or pt/:ler holder he.raof, a sercurlty Interest, a J!an and oontrqotual right of"setotf.
in and to aU of the Sorrower's (and any endor.sars <ihd/or guarantorS hereof) money, c.re.d!ts, agooonts and/or other
propeJ1y now .In, or at any. time hara&fter w!th!n, custpdy or contrOl .of Lender or other' ho!dM ,hereof, or any
l;lranch Bank,of International Bancshates Corporatlqn, whether Jteldln a aenerel Cilf or
deposit, or fOr safakeaplng or otherwise; Every such" Interest and rlgtit of satoff may be a(ql;clsed Without
dSrnalJd or Borrower (aml anY and/dr guarantors hereOf). No seburlty Interest ot of Set
4
off to
enforce such -security ln.terest shall deemad".to have been walved by any. aot o-r conduct eli the part of tehder, or by
any. fa!!!Jre to exercise such right of setoff. or to enfQroe spch.secur!ty Interest, or by any delayln so doing, Every right of
set-Off and security Interest"" shall continue In "full force and effect until" such right of sat-off or seourlty Interest is
spaclf!ce!ly waived or released by. an inStrument In writing eXe"cl..jteCI by Lender. The foragoing-ls in addition to and not In
l!eu.of any rights of set-off a!IQwed by'law: . . . , . : . . .
In connection with an.y trarisaotloo ba.tW6en Borrower and LendEJt any .time In the past, present or. future, li"l event
a.orrower, lridlv!dua!JY or jojnt!t with others, o
1
r grants lender a.llen on BJ")Y .real parson.al property,
Borrower agrees .that the lien on sycti real :and/or parson'! shall also secure th_e.lndebtedness of. BorroWfi!r to
ev!denc.ed by this Nota" .and-at! extanslons and modlf!cat!Qns hereof. . .
. If th!s Nota, or anypart hereof, !S .paid. accofdln9.to"Jts placed tn the hands of an atto"rn6y for O:olieCtlon, or Is
col!ected thJough Probata, .Bankru.ptcy or .other J4dlc!al Or noryjutjfo!al proq!.'!edlngs, whether matutad by axp!ration of timE!
or bY' exercise o.f the. option giV{;ln to the. It; the sorrpwer and a!l parties now or hereafter personally
I! able hereby now agree to and sha1i'pi3y an additional amount equal to a reaSonable and necessary attorney's"faes
and assc;>cll;lted costs for collection. Sa!C attor-neys: fees and 90sts of collection, once liquidated and paid by Lender or
othSrwlse'al!owed QY law:, wll! bear-Interest "at .the rate of Interest app!Jed to the matured and principal balance
of this Note as such rats may change from tlma to time frql)'l._date.due until repaid.
In event anY !ega( action or b.y arbitration qr lsoommenced .with the enforcement of, or any
dec!aratib.n of 'rlght"s unOer this Note" anCI/6r any instrument or w'ritte.h, agreement reqt,dreCI or delivered under or pursuant
t9 the terms of this , Nota, and/or .any. cpntrovarsY. or claim, wlietf:ler .$o.un"ding lri Qontract; tort or lltatuta, !ega! or
Involving II") Way ,the financing or the -tr.cin$aotloQ(S), the subJect of this or any. either prQp-osad or
actual loan or of cradtt.; the prev.a!Hng party shsU baantlt!ed to recover reesonabJaand naoassar.y attorney's
fees, paraleg13J cQsts .(!nclutlf.ng aUdcilted costs for legal services), costs, eJ;<panses,_ witness teas and.
costs; and other necessary dlsbursement.s. made In _with any such or prodee91ng'.
Lef"!der, In Its s_ole S_nd without obligation on do sO, may advanCe and .. pay on O"ahalf and. for
peneflt of Borrower for costs necessary for the protaotJon and of the collateral securmg this Note and.other
costs that. may be in LaMer's sola discretion, lrw:ludlng but not "limited tp Insurance premiums, Bd valorem
taxes, and attorney
1
S fees, A"ny sums Which may paid out by Lender.and tilf sums pa/d"for Insurance pfemlums, as
aforesaid, Including 1ha expenses arid fees paid in any st,llt said property shall bear !ntEirest
fr?,rn the qates Of su.ch !}t prematurity cORtract(ate applied to the principal of this N.ot(!.and shall be
pa1d b1 Borrower to Lender upon demand, at the aame p!a"ce at which this Note Is payable, and shall be deemed a part of
the de t and as such ln-B!l aspf!cts, , . . .
Borr.oWer reserveSthe right to prepay, prl9r to maturlty,.a!l oq.ny of the prlncfpa! of this Nota.without penalty, and
s!}el! Immediately oeas.e on. any so prepaid. AU prepayments sflall be applied to J.ast maturing
principal, V'!lthoyt fnte,rrup_tlng :regular lntallment payments. : . ' .
Any as.surript!on; If perroiited by "by .any pe;son or persons, Corporation, .Or. ariY.
other entity without the express wrltte'nconseht of t:endet, shall r\ot release tha l!abl!ltY of BorroWer for'thii pfiyfuarlt of
this Note,
In the event that the hereinafter d.Eisc.ribed lf 3ny, is sold, conveyed, oth8rwlse dlsposed of without the prior
cOnsent of the Lender, the maturity of th]s Note may, at the option of the Lende.r, be and Lender may .
lmme.dlate!y demand P.aymant of th_e than outstanding prlnoJpal sum together with a}! accrued. and unpS!q ,Interest due
tQereon. . . . . . . . . .
.an9Lander hereby and agree that lh the event of a default under this N.ote cr 1.mder any
document by I;Jorrower In connection w1th, o.r to aecura the payment of, thls Note. (ll Lender shall not be
r.equ!.red to comply 'with.Su6seotion 3.0.5(d) .of the texas Revised PtirtnerSh!p AQt and".(2) Lander Shalt not be required to
proc,eed against or exhaust the assets of before .pursuing SI)Y. remedy "d\ri:lct!Y .against one or mpre .. Of
partners of .Borrower or of such
ARBITRATION,,
THE PARTIES FURTHER AGRE_E.AS FOLLOWS:
lal ANY AND ALL Bi:r.WEEN .THE PARTIES, EXCEPT SUCH CLAiMS ANEJ CON:rROVERSIES WHICH ARE

RULES. OF THE AMERICAN ARBITRATION ASSOCIATION IN EFFECT AT THE TIME OF FILING, UNLESS THE COMMERCIAL
ARBITRATION RULES CONFLICT WITH.THIS PROVISION, AND IN SUCH !;VENT. THE TERMS OF .THIS pROVISION SHALL
CONTROL TO THE EXtENT OF THE CONFLICT, NOTWitHSTANDING ANYTHING.CONTAINED HEREIN TO THE CONTRARY,
. SAVE AND EXCEPT SUBP)\RAGRAPHS (kl, lm), (o), ANn lsi HER.EIN; THOSE CONSUMER REL!\TEb .CLAIMS AND
CONTROVERSIES AN" AMOONt OF LESS 'rHAN TEN TH,OUSANO {$1"0,000,00) SHALL
CpNDUCTED"IN ACCORDANCE WITH THE AMERICAN ARBITRAT:IdN ASSOCIATION RfJLES FOR THE RESOLUTION OF.

" 1Bctool03/2J/04

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SELECTED IN ACCORDANCE WITH ii'HE COMMERCIAL ARBITRA'I'ION RULES OF. AMi::_Ric4N AR,BITRATION
ASSOCIATION, FA)LURE QF,ANY. ,ARB!TI\AJOR !Q 'ol,s:cLOSE.ALL,FI\C!S T.o AN. pBJEcTIVE,.OBS!;RVE)l
QREATE A REASONABLE IMPRESSION OP THE MBI!I\ATOR'S /IND/Off, MATERIAL OF LAW $HA,LL
aE GRC?!)NDS UN ADDITioN To ALL O!HE"SfFbR \,(AC'ATUR. OF AN' AWARD PU.RSUANT io THIS'AGRi:.EME.NT.
. . . . . .
THE AWARD OF THE ARBITRATORS; OR A' ,OF THEM, SHALL Be-FINAl., AND JUDGMENT UPON THE AWARD
RENDERED MAY BE ENTERED IN ANY COURt, STATE OR FEDERAL:- HAVING JURfSJ::IICTION, THE ARBITRATION AWAR.D
SHAEL BE IN WRITING AND SPECIFY 11'11; FACTUAL.,ANO LEGAL: BASES 'FOR THE AWP..RD, UPON THE REQUEST OF ANY
PARTY, THE AWARD SHALL INCLUDE FINDINGS OF FACT AND CONClUSIONS OFLAW,
ARBITRABLE DISPUTEs INCLUDE ANY.A.ND ALL CONTROVeRSIES OR CLAIMS ile1'\o(EEN THE PARTIES OF WHATEVER
TYPE OR MANNER, INGL.UDit)IG WITHOUT LIMii'ATION, ANY CLAIM ARISING OUT Oj: OR.RELATING T,O THIS NOTE, ALl.
PAST, PRESJ:NT AND/OR FUTURe CRE_DIT FACILITIES ANO'/O'R AGREEMENTS ,INVOLVING THE PARTIES. ANY
IRANSACTIONS Q.R INV0LVING THE PARTIES, AND/OR ANY ASPJ;CT OF ANY PAST OR PRESENT
RELATIONSHIP 0FTHE PARTIES, WHETHER BANKING OR OTHERWISE, SPECJFICA:LLY INCLUDING ANY ALLEGED TORT
COMMITTED BY ANY fiARTY, . .
THE PARTIES SHAi.L ALLOW ANb PARTICIPATE: IN DJSCOVERY IN ACcoRo'A:NCE WiTH THE FEDERAL RULEs dF CIVIL
.PROCEDURE A PERIOD OF ONE HUNDRED TWENtY I1<0I'DAYS AFTER THE FILING OF ORJGINAL RESPONSIVE
PLE,AOJNI$, DISCOVERY MAY AS'AGREEO .BY THE OR' AS ALLOWED BY THE
ARBITRATORS. UNRi:SOLVED.D!SC:OVERv' DiSPUtES SHALL'BE:BROUGHT TO 'tHi: ATIENTIGN.OF THE ARBitRATORS BY

AND
. '
JN THE EVENT' THE, AGGREGATE OF ALL AFFIRMAtiVE C::LAiivls ASSERTED EXCEED $:50();000.00, EXCLUSLVE OF
.INTEReST AND ATTORNEY'S FEEs,: oR UPON THEWRITTEN REQUEST OF ANY PAR)'Y, ill PI!IQR TO THE DISSE"11NATION
OF A LISt OF POTENTIAL ARBITRATORS, AMEI't!CANARBITRATION ASSOCIATION SHALL CONDUCT AN IN. PERSON
AD'MINISTRATIVE 'FHE PARTIES AN!;l THEIR FOR' THE FOLLOWING PURPOSES AND FOR
SUCH ADDITIONAL PURPOSES AS THE PARTIES OR THE AMERICAN' ARITMTION ASSOCIATION MAY DI;EM
APPROPRIA'tE, (t,:) TO. OBTAIN ADDITIONAL INFi:mMATION ASOUiTffE NATUAI:'AND MAG.NitUOE Of.THE biSPUl'E AND
THE ANTib!PATJ;D.LENGTH oF HEARING/? TO Dlsc(Jsstii,E VIS# of .ANY
TECHNICAL AND/OR OTHER SPECIAL QUALIFICATIONS OF THE ARBtrRATORSl ANI;! (C) TO C'PNSIOER, WHETHER

1
:h

PRELIMINARY HEARING THE MATTERS THAT MAY BE CONSIDeRED INCLuDE, WITHOUT LIMITATION, A
PREHEARING SCHED.UUNG ORDER ADDRESSING (Al 'EACH PART'f.'S DUTY TO SUBMIT A DETAILED STATEMENT OF
CLAIMS, DAMAGES ANDIOR QEFENSES, A STATEMENT OF 'tHE ISSUES ASSERT.ED BY EACH PARTY ANb ANY !-EGAL
AUTHORITIES THE PARTIES MAY WISH TO BAING TO THE ATTENTION 'OF THE (B} RESPONs'ES,AND/QR
I'IEPLIES TO PLEADINGS FILED IN WITH .. SUBPART 21Al: CCi. ANY
UNCONTESTED FACTS: (D) EXCHANGE AND PREMAFtKING QF All DOCUMENTS WHICH E'ACH PAI'\TY BEt:IEVES MAY BE
OFFERI:,r:i AT THE FINAL ARBITRATrON HEARiNG: (E) TfiE AND AVAILABILITY OF WITNESSES, INCLUDING
EXPER.TS, AND SUCFI ADDriiONAL MATTER.$. REGA.RUING WITNESS.ES lliiCLUOJNG' THEIR BIOG'RAPHIES AND A SHORT
SUMMAFIY OF THEIR 'EXPE<ireo TESTIMONY, (Fl WHETHER:A QR OTHER OFFICIAL OF. THE
(G) THE P.OS'SIBJt.l'iY OF UTILIZING ,MEDIATI6N' 'OR OTHER ALTERNATIVE
6F THIS PROVISION, "THE. MFANS,LENDER AND BOf!ROWER. J!rND EACH'AND ALL PERSONS
AND ENTIT.IES .SIGNING THIS OR ANY BETWEEN OR' AMONG .ANY OF THE PARTIES AS
PART OF THIS J'RANSACTION, "'f.HE SHALL ALSO .. INCLUDEINDIVIDUAL PARTNERS, AF.FILIATES, OFFICERS,
DIRECTORS,' EMPLOYEES, AGENTS AND!OR REPRESENTATIVES OF ANY PARTY TO SUCH ANDS.HALL
INCLUDE ANY OTHER OWNER AND HOLDi:R oF THIS .
THe: PARTiEs sHALL HAVE THE RIGHT TO INVOKE SELF HELP REMEPIES (SUCH AS .SET-OFF, NO'riRCATION OF
ACCOUNT SEIZURE AND/OR FORECLOSURE OF COLLATERAL, AND NON.JObiCIAL SALE OF PERSONAL
PROPERTY AND .PROPERTY COJ.,LATEF.IALJ BEF(lRE, DURING aR ANY ARBITRATION ANDIOR REQUEST
ANCILLARY OR PROVISIONAL JUDICIAl. REMEDIES (SUCH AS "GARNJSHMi:NT, ATTACHMENT. SPECIFIC PERFORMANCE,
R!;CEIVER, OR RESTRAlN.ING ORDER, AND SEO!,IE5TRAl'ION) BEFORE OR AFTER ANY ARBITRATION. THE
PARTIES NEED NOT AWAIT THE 'OUT9QMEOF THE. ARBITRATION. BEFOR$ USING Sl:LFHEI,.P RJ;MEQIES. USE QF SELF
QR ANCILLARY JUDICIAL REMEDIES SHALl. NOT OPERATE'AS A WAIVER OF EITHER PARTY'$
RIGHT TO COMPEL. ARBITRATION. ANY ANCILLARY OR PRO\(lSIONAL REMEDY WHICH WOULD BE AVAILABLE FROM A
COURT AT LAW SHALL BE AVAILABLE FROM THE ARBITRATORS.
THE PARTI.ES AGREE THAT ANY ACTION REGARDING ANY CONTROVERSY BETWEEN THE PARTIES SHALL EITHER BE
BROUGHT' BY ARBITRATION. AS DESCRIBED HEREIN,OR BY .JUDICIAL PROCEEDINGS, BUT SHALL N'OT BE PURSUED
SIMULTANEOUSLY IN PIFFERENT OR ALTERNATIVE FORMS. A TIMELY WRITIEN NOTICEOFINTENT TO ARBiiAA'iE
'6ci!'Ji
STAYING AND/OR ABATING THE li11GATION PENDiNG T,HE FILING OF TH:S FINAL AWARD THE ARBITRATORS, ALL

SIGNING OF THE ORDER COMPELLING
AdaR!EVED. SHALL SERVE A wRrrreN INTENT r.o ARBITAATE To fl..NY ANP AI.L

OF INTENT TO ARBITRATE THE TIME ;;PEQIF,IED AB(i)VE SHALl. BE DEEMED A WAIYER OF THE AGGRIEVED
PARTY'S RIGHT T.O COMPEl: ARBJ:rRATIONOF SUCH CL.P.lM; THE ISSUE OF WAIVER PURSUANT TO THIS AGREEMENT IS
.AN ARBITRABLE DISPUTE, . . .
ACTIVE' PARTICIPATION IN PENDING UTIGATION' DURING THE; 360 DAY NOTICE PERIOD. WHETHER. AS PLAINTIFF oR
DEFENDANT, IS NOT A' WAIVER OF THE Rl.GHT To C6MPEL ARBfrRATION. ALL: DISCOVERYOBTAINEO IN THE PENCft-.fG
LITIGATION MAY BE USED IN ANY ARBIT:RA.TiON PROCiiEiJJNG. . .
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THE FURrHJ;R AGRE)l THAT .til NO AReiTiiATION PROCEEDING HEJ\JlUNDER SHALL BE CERTIFIEp AS A CLASS
ACTION an PROCEJ!O AS A CLASS ACl]ON, OR ON A BASIS INVOLVING CLAIMS BROUGHT IN A P4RPORTED
REPRESENTATIVE CAPACITY ON BEHALF OF THE GENERAL PUBLIC, OTHER CUSTOMERS OR POTENTIAL CUSTOMERS OR
PERSONS Y SITVATEO ANP (II) NO AR'stiAATION .PROCEE.CINQ HEREUNDim S.HAL.L BE CONSOLI.DATE.C' WITH, OR
.J.dtNE.D'IN ANY WAY WifH, ANY OTHER.ARBITA'ATION PROCEeDING', .
ANY ARBITRATOR SELECTED SHALL BE KNOWLEDGEABLE IN THE SUBJECT MATTER OF THE DISPUTE, EACH OF THE
'sHARE THE -ARBiTRATION COSTS, FEES, EXPENSeS, AND OF THE ARBITRATORs

PROCEEDING TOLLS SiJCH STATUTES OF UMITAT!ON$. . .
IN ANY ARBITRATION PROCEEDING SUBJECT TO THIS PROVISION; THE ARBITRATORS, OR MAJORITY OF THeM, ARE

AND' rJfOT!ONS FOR SUMMARY '

THE PARTIES :rHAT THIS AGREEMENT EVIDENCES A. TRANSACTION INVO.VING INTERSTATE
COMMEf\CI:!, TH!i FEDERAL .ACT SHALL- GOVJ;Rr)l, THE '11\iTERPRJ;TATION, ENFOR9EMENT, AND
PRO'QEEI?INGS PURSUp.NT 'rO CI.AUSE OF THJS'A!JREE-ENT, .
AWARD ATTORNEY'S fEES COSTS TO THE
NEtrHeR .THE PARTIES NoR THE. ARBtTAAToRs MAY -THE Ei!XISTENCE; OR RESlM'S:.OF ANY
HEREUNDER WITHOUT PRIORWRITTEN CONSENT OF Al.L PARTIES Af'i,D/OR COURT ORDER;. .
VENUE OF ANY ARBITRATION.PROCEEQING HEREUNDER SHALL.BE IN ' : TEXAS,
THE TERM LENDER !NCLUOEs ANY OTHER .OWNER AND HOLDER OF THIS NOTE AND THEIR RESPECTIVE.SLiCCESSORS ANO
iHI'S NOTE IS GOVERNED .BY APPUCAal.EiEXAS LAW, EXCEPT TO THE EXTeNT THE USURY L'AWS OF TEXAS ARE
ON THIS NOTE,
If ttJe loan are to be used primarily for personal, family or use, the fo!l?wing nqtlc,e shall apply:
NOTICE TO CONSUMERS: UNDER TEXAS lAW IF YOU CONSENT TO THiS AGREEMENT YOUMAY BE SUBJECT TO A FUTURE HATE
AS HIGH. AS 24% ANNUAL PERCENTA(3E OR THE STATE CEILING, 'HICHEVER IS LESS. . .
. . . NO ORAL AGREEMENTS .
THIS WRITtEN AGREEMENT REPRESENTS THE'E!NAt AGREEMENT eerweeN THE pABI!JiS ANp.MAV NQI o'ONJ:BAQIQifiQ B)'
EVIDENCe DE PRIOR CNJEMfOB_ANEOUS. OR SUBSEOUENtdsAl AGBEf;MgNrs OF TH$ pARpeS .
rHese ARE' NO UNWR!rri:N. ORA! egTwj;eN THE eAro;ms
DELTA L.P.,
a Texas lim'ited pa.rtnership'
By: Delta Pt4uce LLC,
. .. iability company,
By: . ;:;:: --------
:rna s-otJ: ..NSiN, MANAGER
..., ....
Address:
City /State: --------------....,---------

ADDENDT,JM TO $600,000.00 PROMISSORY NOTE
Ntunberof
Payments
(a) Eleven (!1)
(b) One (1)
Frequency
Monthly
Final Maturity Date: JUNE 5, 2011.
Amount of
Payments
Interest only on all
outstanding
ptincipal. ..
All outs!s.ljding
principal and all
accrued, 1,1npaid
interest thereon.
shall be due and
payable.
When Payments
areDue '
Qoininencing July
. 5, 20i0, a)ld
continuing
montlily on the
fifth (s'h) day of
eiach successive
calendar month
nntil and including
May 5, 2011.
On Final Maturity
Date.
This Note is a revolving note evidep.cing a .line of credit loan from Lender to
Borrower may and rebortow at anytime under this Note Provided, however,
that the principal balance outstanding nnder this Note at any time shall not exceed Six Hundred
Thousand andNo/lOODollars ($600,QOO.OO). The uflpaid balance oftlils Note shall increase and
decrease with each new advance or payment hereunder, as the case may.be, and although the entire
principal balance of this Note ltlay be paid in full from time to time, this Note not be dee111ed
terminated or canceled as a result thereof.
This credit facility was evaluated, analyzedand ultimately priced based upon the entire
relationship between Borrower and Lender. 'l:herefore, if there is (i) a material negative change in the
deposit and/or other banking relationships between Borrower and or (ii) a material change in the
firiancial condition, ownership, and/or control of the Borrower, which Lender reasonably
believes increases the risk ofrepayrilent, then' Lender, in its sole and absolute Qiscretion, may ip.crease the
interest rate charged in connection with this credit facility by up tO 1.00%; as it may floatfro:m time
time (i.e. in.terest v,:ill to.l.25% above the New P.;-ime Rate),
. . .. '- ..
Executed tlils_A__ day of June, 2010.
BORROWER:
Delta Ltd.,
a Te::tas limited partners_hip
By: Delta Produce.Management, LLC,
a Texas limited liability company,
Qeneral Partner.
/-'\
1. ;
/
- ~ ~ - - - - - - - - - - - - - - - - -
BALLOON RIDER
TillS LCJAN IS PAYABLE It-IFULL ON JUNE 5, 2011. YOU MIJST REPAY Tiffi ENTIRE
PRINC!PALBALANCEOFTiffiLOANANDUNPAJDINTERESTTHENDUE. TIJEBANKIS
t)NDER NO OBLIGATION TO REFINANCE THE LOAN. YOU WOULD, TI;IEREFORE, BE
REQUJ.Ri:lD TO MAKE PAYMENT OUT OF OTHER ASSETS YOU MAY OWN, OR YOU
WOULl) HAVE TO FrND A LENDER, WIDCHMA YBE Tim BANK YOUHA VB TmsLOAN
WITHATMATURITY. YQUMAYHAVETOPAYSOMEORALLUffiCLOSINGCOSTS
NORMA,LL Y ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN REFiNANCING .
FROM Tiffi SAME BANK.
E X E C U ~ D this _:f_ctay of June, 2010.
BORROWER:
Delta Prodnce,.L.P., a Texas limited partnership
By: Delta Produce Management; LLC,
. a Texas limited liability company, General Partner
A.
EXHlBll'"A"
Equipment. All equipment ofDebtor now or hereafter acquh'ed by Deb!or, including
without limitation,' furniture, machinery, vehicles and trade fiXtures, together with
any and all accessions, attachments and other additions to, substitutes and
replacements for ap.d improvementS of the equiPment, Whether now owne4 or apy
time he,eafter.acquired or made, together with all tools, paris. and appurtenances now
or at any timer hereafter used .. in and together with all proceeds of the eq]Iipment
described or refeired to B.bOve, including insruance payable by reason of lOss or
damage thereto, and all pmceeds of anY policy ofinsurancerequhedon the Collateral
by Secured Party, including any refunds or nnearned premiums in connection with
any cancellatioh, adjustment or termination of any suc4 policy of insurance.
B. Jnventorv. All inventoryofPebtor, whenever acquired and !lOW or hereafter .
existing, including but not limited to all gooas, wares and merchandise intended for
sale or lease by Debtor or to be furnished by Debtor, nnd,r contracts of service !\Ild
all raw materials, goods in process, finished goods iu)d supplies of every nature used
Or usable in copnection With the .manufacturing, :PaCking, shipping,
advertising, s.elling, leasing or furnishing of s,uc;.h services, goods, ware$ and
merchandise; all of title, manufacture's statem:nts of origill and other
docw:il.eD.ts arising from or' related to such inventory; and aCcessions, attaclnnents
an.d other additio,ns tO, Sllbstitutes for, replaveriients for, imProvements to and retwns
of such inventory; and all proceeds of such inventory. . .
C. Fixtures.
(1) All of the property, personal or otherwise, now e;asti;,g:or hereafter
arising
1
existing oi: created, now or he;reafter attached to or incorporated into
ortised in or' about the Debtor's premises, including all appliances,
:fur.t.llshings, gqods, equipri:tent, and m::19hine:zy owned by Debtor and other
tangible persona].prop.arty now or hereafter affixed, attached or related to
s)lch pNperty orrio,V.or hereafter affjxe4, attached orre!ated to suCh property
or used in coill).ectiqn therewith, a,nd all replacements,. substitutions and
add.itioM.for or to any o{the foregoing;
(2) All accessories, attacirments and other additions to, substitutes and
replacements .for, and.improw.tnents of, the:propertj described i.n (a) above,
whether now oWned or at any time hereafteracquired.orinade, together with
all tools; parts and appurtenances now .or at any thne used in connection .
'Ulerewith;
(3) All products and proceeds, including, without limitation, insurance proceeds
of, andaddition.'l, improv,ments and accessions to, all and any of the property
described. above, excluding proceeds used to replace wom-out or obsolete
equipment orother propecy.
D. Accatmts ReCeivab.le. and chattel paper ofDebtQr
1

and whether now or existing, inclu.ding, but not limited to, accounts ad
chattel paper which arise out of: (i). the sale or other disposition of goods; (ii) the
furnishing ofse!Vices;. (iii) the fw;xlishing of, lhe use of, or !he lease of any of the
Collateral, and (iv) the ag!eement to provide any of the above; and all proceeds
relating to, resulting from or iu'ising in connection with any such accoimts and/or
chattel paper.
E. General Intangibles. All Gener'!l Intangibles of Pebtor, .whenever acquhed and
whether now or hereafter e?dsting, and all proceeds thereof.
Together with all books, recoids, files, software, documents and information
pertaining. to, and all contai,ners anclpaclQtgeS for, the prOperty descrlbedo!refe:rred to itl stibsectiOnfi
A through E above, and the proceeds of all of the
'l:B,AC'l: lt
5.779 acres of land situated in the City of San Antonio, Bexar Cou:nty, 'I'e.x;as,
being Lot 4, Lot s, .Lot G,, Lot 7, Bloc:k NCB 3698, EdgewoOd Addition,
unrecorded Plat in Bexar County ABseasors County,
TeXas,'and a portion of Lot.S3, Block 39, NCB 3698
1
Las .Villas De Merida as
recorded in Volume 9555, Page 72
1
and Plat Records of County,
Texas1 said 5.779 acre tract of.land b11=ing ino.re partic1.Ilal:'ly desol:'ibed by
and bounds as followS I
BEGINNING, at a fOund l/2 inch iron rod on the aoutherlyright of way line of
Merida street, for the northeasterly COrner of said S3, Blq9k 39, aaffie'
being the northwesterly corn'ei- of saidLot 4;
THJ;:NCE
1
S 134 22.' 25
11
.E, al:ong t;he right of' way 'line of
Street, a distance of 706.56 feet to a 1/2 inph iron rod. on the
right of way iline of The
THENCE, southwesterly, along the arc of a curve to the left having a radius
of 2865.00 feet, .a central angle of 14 22' 39
11
1 an arc length o'f 718.80 feet
and a chord hearing1 S 43 18' 4111 W, 716.91 feet, to a found 1/'4 inch :!.:ron
rod1
THENCE, S 36 02' s4n w, continuing along the northwesterly.' right of way
of The Pacific Railraod, a 183.64 feet to a set 1/2 inch
iron rOd on the northerly right of way line Of Cera'lvo Street fat" the
aouthea.ste;-ly co:rne:t" Of Lot 53;.
THE.NCE, N 84"

w, the; nortlierly right way line of Ceralyo
Street, a distance of jS.BS feet to .a s$t 1/2 iheh iron xod;
THENCJ:l, crossing said 53, Block :39
1
the follQwing oourses1
N os 34' 47"

a d:j.s'tance of 90.14 feet i:o a. set l/2 inch iron rod;.
s
.,.
"'
OS" E, a distance of 10,75 feet to a set l/2 :i.rleh i:r:on rod;
N' 06" lJ.' 5111 E, a distanCe. of 2l . S9 feet to a set l/2 inch iron rod;
N
.,.
"'
09" w, a distance of 13.64 feet to a set l/2 inoh iron rod1
w
"'
lJ.' 51" E; a distance of 230.44 feet to a set 1/2inch iron rod;
w 830. 48' 09
11
w, a distance of 23.07 feet to a set l/2 :i.nch ,i:t:on rod;
w 06 ll' 51
11
a distance of 1:6.94 feet to a set l/2 inch iron rQd on th.e northerly
line of said ,53, Block 39;
THENCE, N 6!1 '13
11
W, aiong the northerly line of said Lot 53, Block 39, a distance
of 120.01 fe'et to a found 1/2 inch iron rod'for an interior angie corner of said Lot
53, Blocl' 3S, same being the southwesterly ae:rner of aaid t,.ot 4;
THENCJi,l, N 06 u Jon E'
1
along the easterly J..ine of said tot S3, Block 39, a d;i.stance
363,95 feet to the POINT OF BEGINNIN'Q of herein Q.escribed t:t:act, and
So779 acres of land, rno:.:e or less,
TRACT' 2'
2.0.69 acres of land .sipuated in the City of San Antonio, B!!xa.r .County, 'rexas, being
the East '8,31 feet of Lots $7 thl:'o.ugh Block -40, NCB 3699, all of Lot 17, .Block 40,.
NCB 36'99, Edgewood Addition, as reco.;ded in Volume 1625, Page 317, Deed and Plat
Recorda of Bexarcounty, Texas, and of Lot ia, Block 40, NcB 3699, H,A. &
K.G, Deviney SubdiVision as recordet;l in VolUme 397S,:Page 223,, Deed apd Plat Records
of Bexar county, Texas; said 2.069 acre tract of land being more particularly
described as folloWe;
BEGINNING, at a l/2 inch iron rod set the northerly of way l;ne of Merida
St:r:eet, said l/2 inch iron rod be:big N 84" 22' 25
11
W, 8,31 feet from .the southeast
co:rnel:' of eaid. l',>?t 65;
THENCE, N 06 14'. S31
1
E, .crossing said Lots 57 through 65, Block 40, along the westerly
line Qf certain tract of land t? West Coast Company, Ino, as
reoo;rded i.n.Yo:).um(;l 7J.33, 968, .Off.:{.cial Public of f!ex.ar Co\J,llty, a
distance of 364.13 tO a l/2.inch iron :rod set;:
S 84 21' 53
11
E, along the northerly, line of said Lot 57, at a distance of
8.3l .. feet. passing co:rner of Lot 57 1 same being the northWest c;orn'er of
Lot 17, at a qistance of :1.27.92 'feet passing the northeast co=e:r.of Lot i1
1
Same
being the northwest corner of aaid'Lot 18, in all a total distance of 2-47.52 feet to a
l/2 inCh iron rod aet for the northeast corner of aaid Let :La, aame being the
northwest cornel:' of Lot 19;
;
s 05 14' ,53
1
' W, along the common boundaJ:Y li"ne between Lot 18 a_ntj. tot 151, a
of 364.09 feet to a 1/2 inch iron rod Set on the northerly right ofway line
of Merida Street, for the southeast corner of Lot -lS, being the
of Lot 191
. .
THENCE, N 64'
0
25
11
w, along the northerly r;!.ght of way lihe 'of el:-ida .Street, a.t a
distance of 119.60 feet the southWest corner of Lot 18, same being the
soUthe.aat corner of Lot 17 , at a. diStance of 23,, 21 feet. pasaing. the sou_tl).we"St corner
of Lot I7, same beina the southeast cOrner of GS, in all a total diseance of
24.7,52 fe.et to the POIN'l' Oli' BEGINNIN!3 of he):'e:l.n described tract, and co:'-t;ai.n?.ng_ 2,059
acres of land, more or less.
orRA.C'I' 3:
Lot 17," Block 3, New City Block A36
1
Gillis Hood, Unit 2
1
al) addition to the- City of
San Antonio, CountY, .according to thamap or thereof, xecordeU in,
Volume 9512, Page 91, Oeed and of SAVE AND
that poJ:"tion conveyed to the City of san Antonio in Volume 5202, Page 1204
1
Offi_cial
Public Recorda of Real PrOperty of Bexar .
-,
AGREEMENT REGAR11ING LEGAL FEES
RE: S600,000.00.loan from OFC01\1MERCE ("Lender") to .
Delta Produce, L.P., n Texas limited partnership secured by Iien(s) On the
Property.
DATE:
Delta. Produce, L.P . a Tex:as limited partnership
l>ROPERTY: SEE BXHIBIT"An ATTACHED HERETO AND INCORPORA1ED HEREill.
1. STATUS OFFARRIMOND CASTILLO & BRESNAliAN. P.C . Attorneys at Law.
Legal instrun:J.ents involved in the above referenced loan and real property transaction have
been prepared for Lender by Farrlmond Castillo & Bresnahan, P.C. (the "Attorney"). Th!i
Borrower(s) acknowledge(s) that theAttomey has only as counsel to tb.eLenderandhas not,.ln
any undertaken to render legal adv:ice'to Borrower(s) with respect to this transaction or with
respect to any of the documents or instruments being executed in connection with the loan.
Borrower(s) further aclmowledge(s) that Bormwer(s) may retain counsel for advice regarding this
transaction and the documents or iru;trwnents exec\fted.
2. BORROWER'S RESPONSIBILITY FOR PAYMENT OF FEES.
Borrower(s) agree(s) to pay thqlegal fees of the Lender incurred in connection with the
preparationpflegal instruments and loan documentation by making, at the loan closin& a payment in
the amount set forth in paragraph 4.
3. DESCRIPTION OF LEGAL SERVICES PERFORMED.
The nature and extent of fhe legal services performed in connection with this transaction
are as follows:
Confe.rences with Lender regarding loan; review of title commitment, preparatio11 of closing
documents including: rromissory Note by Borrower to Lender; 'IWo (2) LLC Resolutions; Corporate
Resolution; Elrors and Omissions; Agreement Regarding Legal Fee:;; Business Consumer Waiver;
Four (4) Guaranty Agreements; Notice ofNo Oral Agreements and Letter to Closer.
4.
The :fee In intended to Provide fair compensation for the above described services taking into
consideration. the time and labor required, -the complexities of the questionslnvolved,and the skill"
required to pelform such services. Other consider!ltion include the expertise of-the Attorney in the
complexities of the real estate practice, the necessary overhead associated with the rendering of such
services, and the assumption of risk by the Attomey lnrenderfug said services. The fee established
for the above descn"bed legal services is $1,345.00.
Borrower(s) hereby acknowledge(s) receiving and reading a copy of this agreement, Md, by
signature below, affinn(s) the accuracy of the statements contained in paragraphs 1 and 2 hereof.
BORROWER:
Delta Produce;L.P,, a Texas limited
By:
TRACT 1:
5.779 acres of land situated in the City of San Antonio, Bexar County, Texas,
being lot 4, lot 5, lot 6, Lot 7, Block 39, NCB 3698, Edgewood Addition,
unrecorded Plat filed In Bexar County Tax Assessors OF'fice Bexar County,
Texas, anP a portion of lot 53, Block 39, NCB 3698, las Villas De Merida as
rec-orded In Volume 9.555, Page 72, Deed and Plat Records of Bexar County.
Texas; said 5.779 acre tract of' land being more particularly described by
metes and bounds as foJ tows:
BEGINNING, at a.found 112 lnc.h iron rod on the.southerty right of way line o'f
Merida Street, for tha northeasterly corner of sa ld lot 53, Block 39, same
being the northwesterly Or said lot 4;
THENCE, S 94 22' 25" , a/onQ the southerly right of way line of Merida
Street, 'a distance of' 706,56 feet to a found 112 Inch iron rod on the
northWesterly right of way I line of The Union ,Pacific. Railroad;
THENCE, along the arc of a curve to the left having a radius
of 2865,00 feet;, a central angle of' 22' 3Q", an arc length of 718,80 feet
and a chord bearing: S 43Q 18' 41n \'J, 718.91 feet, to a found 1/2 inch Iron
rod;
THENCE, S 36" 02' 54" \IJ, continuing along the northwesterly right of way line
of 'rhe Union Pacific Rai lraOd, a 'distance of 183,64feet tc a s.et 112 Inch
Iron rod on the northerly right of way I ine of Ceralvo Street "for the
southeasterly comer Of said Lot 53;
THENCE, 10' 44" W, along the nort.herly right of Way I ine of Ceralvo
)
Streot, distance of' 35.66 f'eet to a sat 112 Inch lrcn red;
THENCE, crossing sa'ld.lot 53, Block 39, the following courses;
.N 34' 47" E, 11 distance Qf 90.14 feet tq a set 1/2. inch iron red;
S 63" 46' 09" E, a distance of 10.7& feet to a set 1/2 inch irori rod;
N 06" 11' 51" E, a distance of 21.99 feet to a 1/2 Inch Iron rod;
N 63" 46' 09" W, a distance oF 13,64 feet to 11 s11t 112 Inch lron.rod;
N oB 11' 51" E, a dis1:ance oF 2.30.44 'feet to a 1/Z Inch Iron rod;
N 83" 09" W, a of 2.3.07 f"et to a set 1/2 jru:h Iron rod;
N 06" 11' 51" E, a diffi:ance of 16,94 feat to a set 112 Inch Iron rod .an the northerly
line oF said Lot 53, Mock :!9;
THENCE, N 84" 2.5' 13" along tha norther. I:} I Ina oF said lot 53, Block 39, a distance
of 120.01 feet to a found 1/2 Inch Iron fOr nn Interior angle comer oF said lot
53, Bl<Jck 39, sama baing the southwestarly comer of said Lot 4;
THENCE, N 06" 14' :m E, along the easterly line of said Lot 53, Block 39, a dlst!lfloe
of' 363,95 Faet to POINT OF BEGINNING of> herein described tract, and <:cntalnlng
5.779 acres e>f land, II!Orll or less,
TRACT 2:
2.1l59 ae:res of land situated In the City oF San Antonio, BeXar County, Texas:, being
the East 8.31 feet of lots 57 through 65, Block 40, NCB 3699, aiJ.of Lot 11, Blook.40,
NCB 3699, Edgewood Addition', as recorded ,In Volume. "1625, Page 317, Deed and Plat
Records of Bexar County, Texas, and all of lqt '1.8. Block 40, NCB 3699, H. A; Stauffer. &
H. G. Deviney Subdivision liS reeoNied In Volume 3975, Page 223, Deed and Plat Records
of Bexar County, Texas; said 2;059 acre tract of land being rnore partlooilarly
described' as follows:
BEGINNING; at e 1/2 Inch Iron rod s6t on the right oF way J lne of" Merida
Street, said 112 inch Iron rod being N 84" 22' 25" II, 8,31 feet From the southeast
corner of said lot 65;
THENCE, N 06" 14'53" E, crossing said lots 57 th,rough 65, Block 40, along thB
I Ina= of that oertaln tract of land conveJ!tld to )fast Coast: Produce t'ol!lpany, Inc, a;s:
recorded In V<liUma 7133, Pag11 sea, Official Public Records of' Bexar County, a
distance of' 354.13 feet to a 1/2 lnch Iron rc? set;
S 64" .21' E, a long tlla norttmrly lltte of said Lot 57, at a dlstan!le of
8,31 feat passing t;ha nort:hea;;t corner of Let 57, sa111e being ths northwest corn!lr of'
lot 17, at a distance of 127.92 feet passing the northeast corner of lot 17, same
baing the northwest c;of ..aid Lot 18, In all a total dlstanc" of 247,52 feat tc;o a
112 Inch Iron rod sat 'for the northeast corner of' said lot 18, ssme bai11g the
northWest oomer oF Lot 19;
THENCE, S 05" H' 53" w: alo11g the common bol..llldary line between Lot 16 and lot 19, a
distance. of 364.09 feet to e 112. inch iron t'<ld set on the northerly right of way 1
of Merida Street, for the southeast; comer of said Lot 18, same b11Jng the southwest
Cllmer of' lot 19;
THENCE, N S4u 22' 25"111, along the northwly right of way line oflderldi! Street, ilt a
dlst'ance 11f 119.1!0 feet passing tho southwest o:omer of lot 18, ,.,.me being the
southeast comer of lot 11 . 1!t:.a .distance of' 239.2.1 feet passing the southwest comer
of Lot 17, baing the southeast corner of lot 65, In a II a tota I dist;mce cf
247.52 feet to the POINT OF BEGINNING .of herein described tract, and containing 2,069
acreS at' land, 1110re orlass.
TRACT 3: .
Lot 17, Block 3, New City Block AJC, Gillis Hood, Unit 2, an addition to the City of'
San 8exar County, :raxas according to the lllap Of' plat thereof, recorded In,
Volume 9512, Page 91, Deed and Plat Records of Bexar Coum.y, Texas, SAVE AND EXCEPT
that portion to the City oF San Antonio In Volume 5202, 1204,. Official
Publlo Records of' Real Property of Bexar County, Texas;
'
. ;,.,
:_.. : .
.. i"
.
.; ...
. ANDJORMOl;>lFIC"ATION .AGREEMENT
..,OMMml.CIAL
Qate: Junes,:wn
ACCQII_nl No: 12111U1.>3"l,l'2-'1UOC...,_____
Borrower: Dclrn Pr.odue\! LP
{wbetber one Or more):
tOgethei'.withllllyaitd all lind unpaid"intereSt andfor
late cbarges.
The "hite Cl!arF" mav be accessed without nodce:, and be
immediately due Md Payable.
Eath payment be appl!ed-as of. its due dats and
in. fue order. of.spplication as. the In ils solo <!isoretlon
l!Wy fromtim<1 btimo elect.:
The flli!uro of go=wer 10 pay any crf the paJI!lleni{s) of principal
Or nnylnterest th=n cr accrued late when the ill
due nnd payable ShallJ!mnit Umde.t", it its option, to acce!er.ile thl!
mal;lltity, Without nOtice "to Borrower, of all, or aey portion, of. the
?lrt$!1mdillg unpaid ppncip!!l bi!anoo apd all accrued and. unpaid
interest; and nll il}:croed. and unpaid !at;: chaq:es "11ildedho Note f
tills .Agreeinent; whcreupoo lh!i same shall be due and payable .
immediately.
Any outstanding and l!npaid principal, accrued and unpaid !11terest
all all -fe!:s,. late cbarges and/or other chaq:!lS lnCIIITed !n thii.
lrl\USIIitlO!! by, -or. for the bem1fit of, Bo;rower, If any, wb!ch remiiln
IIIJ<I owillg 0!1 the Final Maturity arc due 811d payable On
ilate
Bmmwer reneWs -and axteuds th"' Note, ana IPl-Y and all Security
per annum beginning on Agi"eeniw!S, &et:Urily interests, Dl>&ls of Tnu;t, audlor other lle.u
-creited_ h)' Borro\vt:r hl.favor of Int<:matlonai"Bank of Collllllerce.
llitl:!;lpt as provided rein, all other tmn11 and conditions of the
'Noie; .sad nll aecurlty !nteresbl, Deeds of
NYl'.F+l Trusts. !llldfor other-liens -created by Deeds o(T!IIlits' ilridlor othet
F.irwl Maturity Dllte:. July
1
,
2
n
12
lf any, OO!Itinu11 lis written, and In full
Bom5wer to pay to the otdc:r of Intemat\onal Bllllk" of
Cornmi:l):e the Qui!Jlanilillg- 'Prln!iipnl ilnlilllee on the- Note
aCCQrtfmg: to tho tenns lierenf tqgetber with inleri:st as it =ru1:11 en
thli" oUtstanding D!l]laiir pr!il"Qipa\ balan- untn. paid. In no event"
.mall the roie of Interest to be. Pll,id on the unpaid prlllciPal
ballmcc bc.leslllhan live percent (5%)
per annum, UorlitlJI"e thllll mllxlwUifl legal late allowe<i by
ltppJio;:aij\elp.w.
'fo ihe eXtent !illowOO-by law, i& .the late peyinentcliargc under tho
. Note/thlo.;, Lend<:r mil}' in itJ- aolo: disi:n:dpn,(l} lmm<lse
the l,ituret on the princh_!al poni011 .of any: llll\Orint that.J1
not recelv.cci by. the paYJ.I)ent due <latoi wil:!l paid to the maxiiDul!l
allOwed 'by law, compUt.e<!.an n ful\ cqlendai", basis :from
the payme.nf due datoim;lll paid, at (U) should any pii)'IIIC!lt bo"milw
than ten {10} dliyJ !ate, Boh"ower-sb!lll piiy a. on!i-drnc "laleclllll"ge:
per Jal<lpayment _equat to -five of the bf the
-past due principal" and iatcrcst of stlcb _payn11:nt, with-a minimum af
$1e.im"and a miiXI'lnnm of n.s"oo.oo.Per tate p:a)'lll"ent:
BOrrower
Lf
A To=s Umited Partnemup .
Address
2001 S-Lsredo
ro !"HE EXTENt ALLOWED BY LAW, ALL MATURED

Aii!UCABLE tAW. -lt'appllcable law not iimaxJmwn
rate of lnierest fm' matured llllj)aid lllllounts, agrees
ihat the maiimum- rotc fur amountJNhall be eighteen pwcent

N9 6RAt,
THlS WRITl'EN LOAN AGREEMENT liEPRESENTS THE
FINAL AGREEMENT BETWI'J,;;N THE PARTIES ANP

AGREEMENTS OF TliE PARTIES. THERE ARE NO
l.JNWRIT'rEN ORAL AGREEMENTS B&TWEEN THE
PARTIES

. Name: Broi'I!McMJIIaD
San Anionio. Tml8s 7B201
Tiile: Assltallt Vfco .
.
12-50073-lmc Doc#45-4 Filed 01/23/12 Entered 01/23/12 13:16:08 Index 4-Security
Agreements Pg 1 of 39
..:

'DELTA PRODUCE, L.P.
,..,.._....,.........., ____ ...,.,..._ ____ ,_ .....
.... .,_ .. ., .. ......... ..
2091, I.AllJ!D9
SAN ANTONIO, TEXAS 78207
SECURITY
.AG.R!:_;M.;f'JT
(210) 226-9966
74-2918378
The undersigned Debtor, Owner of Collateral, whether one or more, and INTERNATIONAL BANK OF COMMERCE
E. TRAVIS. SAN ANTONIO. TX 78205
SECTION 1: Creation of Security .
Debtor hereby grants to Secured, Party a first and exclusive !!en and securitY interest in a!! of the personal of Debtor, wherever 10cat6d,
and now owned or hereafter acquired, including the property tfeScribed 'In" Setl1io'il''l! o'f tHIS' seccititY A'greer'nent {the to Secute
payment and performa.nce of the Indebtedness" {desCribed in Section 1!1 below).
SECTION II: Description of Collateral.
1 . The security Interest Is gra(lted In the following collateral:
a. Describe the collateral and, as applicable, check.boxes and provide information indicated beloW.
SEE EXHIBiT "A"
",.. ,,, ..... -. . .,.. .... -.....
b. ., O The abOve goods are to bet:o'mti flxtu!'es (describe -sheet, If
2 D The above tl':'ber is standing on: {describe real estate; attach additional sheet, if needed)
3 r-t The above minerals' or the like (including o!l and gas) or acCounts will be financed at the well head or mirie head Ot the WEiil :
., ...--.. .. 1fddlt!Ohal ...... ' _, ,-r:.;,., .. - .-.....
c. If b.-1, b.2, or b.3 above is checked, this security agreement is to be filed for reco'rd in the real estate records. (The descriptiOn of the
.real estate must.be sufficientl.y specific as t-o give a mortgage .on--tAe:realty), ... ,. ..... , . , ,
D The Debtor does not have an interest of record; the name of a re.Cord owner of 'the real E!stat6 is
D All substitutes and replacements. for, accessions, .attachments, .and other .additions to, and tools, partf[i, and equipment Used in
conne'ction with, the above property; and the increase and the unborn young of animals and poultry.
F AI! proceeds, products, find profits of. the Collateral are 'included. COVerage of Products arid pi-oceeds for 'flnan'cing 'st.atemeilt.
purposes is not to be construed as giving Debtor any additional rights with respect to the Collateml, and Debtor is not authorized to
sell, lease, or otherwise transfer, furnish uhder contracts of service, manufacture, process, or assemble the Collatera), except In
-accordance -with the JilTOViE!ions-of this .security Agreament. Any sheets d8s0rlbiAg tAe .Collateral, the-re;a!. estate.,..or. otber .
matters are incorporated In and made a part of this Instrument.
2. Classify the collateral under one or more of the following Texas Business And Commerce Code classifications:
E) Consumer Goods
. Equipment (business use)
0 Equipment (farm u.se)
D ln't(estment Property
- ......... .
EJ Accounts
D .Dep.oSit Accounts
D Commercial Tort Claims
D Agricultural-Liens
DO Farm Products
Generallnt<!ngibles
!t9 . lnve1;1tory
D Chattel Paper . .
.. , .... ,, . ...... , .. ... ..
0 Support :Obligations.
D Uens OfiGovemment Assets
D Sales Of Payment and Promissory Notes
And to the extent not listed. above as original collateral <ill proceeds and products of the foregoing.
:tBC0004 - 03/04'/05
Page 1 of 9
Any term used in the Texas Business And Code (the "Code") and not defined In this SeCurity Agreement has the meaning given to the
in_ t!'!e . , ..
3; O If this block is checl<ed, this is a purchase money security interest, and. Debtor ':':Ill use fun?s _advan?ed to pUrc_h!'!s.e <;:ollat!Jral, or
- SeCUrea Party maY disOur'SEi'fUndS direct to the seller of the and to purchase Insurance on the Collateral. To the extent
Debton:zses the Loan to purchaSe Collateral, Debtor's repllyment 'of the loan shall a'ppl'{ on a "first-in-firSt-.ou:t" basis so that the
... --portion-of tl'let:earr used to "Pt1fel'lase-a-pertieular+tem-of .. t111-e,...._ -"-
Collateral.
.4, J_f any of the Collateral is accounts, give the location 'of the office where the records concerning them are kept (if other than Debtor's
address.shown.above):
. 5. "Commercial Tort Claims", a subcategory. of General means the Debtor's claim for--------,-----'-
against-------------
SECTION Ill: INDEBTEDNESS . _ . . . .
This assig.nment and grant is made to Secured P.arty to secui"e the prompt and unconditional payment of, B.nd the -and exclusive se.curlty
. , .... ,Jnterest 'to Secured Party performance- ?f, the.fol!owiA'g_ -the
Any and all indebtedness, liabilities and/or obligations of or any of the undersigned if more than one, to Secured Party, jointly and/or
._eve_r,a!!y, a_nd !n,any .capao;ity, whethjilr_ j:lorrowl;l_r, gu!'lrantor, or otl'lerwls_e, now or owing, created.<jnd/or arising< and regardless. of .
....., .... .t.o ... all ........
sumS" owing 'oebtor, or an_y of the undersignf1d If more than one, including but not limited . to
and further lbl'!it<;lt.ion to:
A. anY arid illl'indebtedness of:
DE PRODUCE L .
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(If indebtadness Is not solely of Debtor) or any of therillf more than one, to Assignee, jointly and/or severally, and in any capacity,
whether a_s borrower, guarantor', or otherwise, now or hereafter owing, created af!d/or arising, and of how evidenced or
._........, ........ ... -- _____ ,____ _ ..... ... .. ... ....... . ... , ....... -'- -:-- __ ......
promissory nqte dated March 24 2006 in the amount of;21 500 000.00
B.. any corrimercial indebtedness;
C. arly credlt.card or other cons_umertype of loan;
D. any lndebtedness.relating to checking or savings accounts (overdratts, fees, etc,);
E. a0'y expenses Incurred in the protection or maintenance of the collatEiral seCuring any of such liab!!!ties, Jo8ns, 11-ni:l obligations;
F. .. ?.f. af!9/or. . . . _. _ . .... .. .
G.' 11-ny of credit and/or indebtedness. ari!;ing out of, or advanced to pay, letters of credit transactions;
H. any indebtedness, however, evidenced, whether by promissory note, bookkeeping entry, electronic transfer, drafts or other
Items, or by any other manhar or form; ..
1. any other indebtedness of Debtor and/or of the persons or entitles set forth ln subparagraph A. above to any financial inStitution
.......,._,,_ . ;...tiffllr.lit"e1:fV-.IIt1\' imemmf-onal earrcshali:!S"Ctlfpl)Tatlon: jolm1Y' am:l/dr , gaa1 m 1to1 , 01
otheiwise, nowor hereafter Owing, created and/or and tegardless of how evidenced or arising;
any and all extensions, modifications, s_ubstitutions. and/or Tli!newals of any of the above described indebtedness; J.
K. any and aU incurred by Secured Party to obtain, preserve and enforce this Security Agreement, collect the Indebtedness, and
maintain and preserve the Collateral including without limitation, all taxes, assessments, attorneys' fees and legal expenses, and
expenSes of sale;
the sale by Debtor and the purchase by Secured Party of Accounts;
the sale by Debtor and the purchase by Secured Patty of Chattel Paper;
the sale)zy.Qebtor and.the
the s31e by D.ebtor and the'purchase by Secured Party of Promissory NotSs; and
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M.

0.
P. any of the foregoing'that arises after the filing'of a petition In bankruptcy by or against Debtor under the Bankruptcy Code, even if
. the .obll9atlons do not accrue because of the automatic stay under Bankruptcy Code 362 or otherwise .
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To the extent allowed by law, for purposes hereof it is Intended that the Indebtedness include all classes of Indebtedness, whether evidenced
_by notes, open accounts; overdrafts, or otherwise, and whether direct, Indirect or contingent; regardless of class, form or purpose and
including but not limited to, loans fGr consumer, agricultu(al, bUsiness or persof!al purposes ..
i-he .shall .. under no be limited to the existence or Of collateral for such !ndebtadness, or the type of
.collataral covered thereby. The Indebtedness does not include amounts owed pursuant to a homestead equity loan.
l'i!otloes: Notices and other communlcatkil'ls pertaining to this A9reement shall be in writing and shailbe effective only if de!iveri.d In person
or mailed U.S. certified mail, return rec.eipt requested, poStage' prepaid, to Secured Party if sent to:
. ANTERNATI!Jlm#. ..... P.P fi d' TI*YJ:Sl.i _':!;]<_ , . _ . . .
'Attention: STEVE E ' . , an sent via nlted States Mail to' DebtOr, duly stamped and addressed to Debtor
either at thei.street address, the first shown hereinabove, or at the mailing address, if aiw. given by and/or for Deb_tor at the bef;inning of this
agreement (or at such other address as may have been designated most recently in writing by Debtor to Secured Party); provided, however,
actual notice to Debtor, however given or received, Shall always be effective when given or raceived.. Except as otherwise required by law,
-",.....,..ag,y . .made. pursuant. herata..sl:iall .deemed .e!tectlve!y.. given. on .the. date..oLper.sp.oaJ .. .. __
riotice is deposited in the U.S. Mail, if received by Secured Party.
. . .
sEcTION IV; PERFECTION OIF SECURiTY INTERESTS.
1. Allrig cit Financing Statement.
(i) . DebtoT herEiby authorizes Secured P'arty to file. .a Financing Statement, an Amended Financing Statenient and a Financing
.. Statement (collectively referred to as the "_Finailcing Statement") describing Collateral.
(ii) Debtor hereby authorizes Secured Party to file a FinanCing Statement describing any agricultural liens Or Other statutory liens held by
'' Secun:id Party.
(iii) Secured. Party shall receive= prior to the Closing an official report from the Secretary of State of each Collateral State, the Chief
Executive Office State, and the Debtor State .(each as de'f!ned below) (the indicating that Secured Party's security
Interest Is prior to all other security or other interests reflected in the report. . .
,,. .... at . .0? interest is Qrlo_r to
all other security Interests o_r other interests reflected In the report.
2. Possession.
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fll De_btor shall-have possession of the ex9ept expresslY otherwise provided S.ecurity Agreement or where Secured
., .... lts .. sectuity only ,-or in addition to-the-tiling ;,f-a FlnanclnQ"Statement,.......- ....,,._._.-........ ,_;...,, __ _
(ii) Where Collateral is in the .of a third party, Debtor. w!U join with secured Party In notifying the third party of SScured PartY's
security interest and obtaining a Control Agreement from the third party that it is holding the Collateral for the benefit of SE!cured Party .
.. 3... Qontro! .Dtlbtqr .with S.ec.!.lred,,Pi!r.tY.In.cibta.inJpg .a. .. 1:?, .
Secured Party yvith respect to Coll;:teral consisting of: . . . . .
(i) .Deposit Accounts,
{ii) Investment Property,
(iii) Latter-Of-Credit Rights, and
(iv) Electronic Chattel Paper.
4, Marking of Paper. Debtor will not anY a the to
Party Indicating that Secured Party has a security interest In the Chattel Paper.
. .... , ... , ................ ; .... _, .. .-(. ..... , ... ......
V: Debtoi's Representation Warranties and Agreements.
A. General Representations and Warranties
Debtor representS,. Wa:rTa'nts .a.iid a'grees th8t: . . :' ' . '. ' .
(1) Debtor haS full power and authority to int(dhis AgreE:iment; Security Agreement .has been duly authorized,
executed and by Debtor and constitutes the valid Bnd binding obligation of Debtor enforceable ln accord'ance with Its
terms. No consent of t)lird P.arties, a Jlcense, authoriZatiofl or filing with any govemrTiental authority is required. to be obtained or
performt;d In connection with the e':'t;cution, and performance of th!s security Agreement
(2) All lnform'ation supplied and made by Debtor in any finJ!ncial, credit or acco_unting o; application for credit
prior to, contemporaneously with or subsequent to the execution of this Security are _and shall be true, correCt,
complete, Vafid, 'and
. {3) owns, or will use the proceeds of arw loans by secured'Party to become the owner of the Collateral free from any set-off,
claim, restriction, !len, sec.urity interest or encUmbrance except this security interest and liens for taxes not yet due .
(4)
(51
. No .. . ?i. .. . !!. ... .. not,
Ananclng Statement covering any of Debtor's Coflateral the proceeds thereof to hereafter be on tile in any P!-i'Dl1c ciff1ce eXcept as
may be filed to this Security -
Debtor shall prOvide to Secured Party, Upon Party's request, (I) Including but not .limited to a balance
sheet, income statement, statement of cash fiow, and such other. f!ilalicla! Information as may be re'quested by Secured Party; (ii)
an appralsaf of the Cqllateral; (iii) tax receipts; (iv) evidence of insurance, and (v) any other JntOrmati01l required by Secured Party in
connection with th'e ln?ebtedness or !he Collateral.
(6) Debtor will not use the Collateral or permit Co[later_al. to be used .in violation of. any statute, orQinance or other laW or
...... ......... .aA;t-.po!icy -of ,.,insurance .. . <md .. .petmtt..Secur.ed.. .. E'.artv-aod,;.;,lts._
representatives, and employees to eXamine the at all reasonable times, a1id for. such purpose, Sec;ured Party may enter
upon or hito any premises the Collatel'al'mB.y be located without being guilty of, and/or held liable tor, trespass .. Debtor will
furnish to Secured Party upon-request all pertinent'inforfnation regarding the Collateral.
l1l The COI!ater!il' shall. re:rriBii'l ih 'beb'i:or,.s pOSseiSSioil Or cOntrol a'f'all'iiffieii' B.t t5e6i0b. riSk' Of iosS"'tuilesS 'PartY 'has' 't'<j:keli ....
possession of the Collateral, and be kept at Debtor's address set forth above where Secured Party may inspect It at any time,
except for its temporary removal in connection with its ordinary use or unl,ess Debtor notifies Secured Party In writing arid Secured
Party consents in writing in 'advance of its removal to another location.
161 Debtor shall pay prior to delinquencY all taxes, Uens and against the Collateral, _and upon Debtor's failure to
do so, SeCured Pilrty at its option, may pay any of them ai-ld shan be the sole judge of legality or validity and th'e
amount necessary to discharge the same. Such payr:neni shall become part of the. lndebted.ness secured by'this $ecurity Agreemeilt
and shall be paid to Secured Party-by Debtor immediately and without demand, with interest thereon at the maxiinum rate allowed
,._. . ...,.---:------: : .. : ... , . .' , ......... ,., .. , . -,-,....,!'"' - __;. __ , .. .:. .... ...:, .... : .... ""- .. __
{9) . , Hazard muSt be furnished at all times ior the full amount of the Indebtedness with respect to all Collateral (Including
Coverage for all materials and equipment) against risks of F!ra, Windstorm, Hurricane (_if the Collateral is written .1 00. miles of the
Gulf Coast), Hail and Collapse (Including cost of debris removal) and such other risKs as Secured Party may require, Including
standard cciVerage. -su'ch iliSUraiiCO 'po]iCili'S sh8il CC!!it<ili=tS_UCii ierinS.'; rrl '8 tor 8 period_ .. ahd oe Writter'l"t>y """
companies satisfactory to Secured Party. Federal flood Insurance is also required in those geographic areas that are subject to such
loss. The policy.sha!l also contain a standard mortgagee's endorsement providing. for. payffient of any-loss to Secured Party. All
policies of insurance shall provide for ten days written minimum cancellation notice to Secured Party.
Evidence of coverage must be a copy of the original policy and payable c!a_use. Certificates or' '1e!ters of Coverage will not be
accepted,
. Secured Party .is authorized to act as attorney-In-fact for Debtor in obtaining, adjusting, settllng, and oance!irig suph Insurance artd
. ., ...- ... ..
may be received by it, in payment of i:he Indebtedness secured thereby, 'whether indeb.tedness is currently due or' not.
Party reseryes th!l right to purchqse single interest Insurance lw.hich provides' protection for .Secured. Party) and add the .
premium for such insurance together with interest at the loan pre-maturity contract rate to the balanc)'l Of the loan. This premium Is
due upon demand, or may be paid in fu!l at any agreed time. The single interest premium is written by _a co-mpany .autho(ized
'in ttiei "State Of TEiXas' a't f3WfUI rates hot fixed or approVed DY tfiEi state soard of lnsuranc'e.. .... .. ' "
. . . .. . . . . . . .. . . ..
Secured Party, in its sole discretion and without obligation on Secured Party to do sq, may advance and pay .sums on behalf anq for
the benefit of Debtor for costs necessary for the protection anP preservation of the collateral !'lnd other costs .that T,nay be
appropriate, in Secured Pariy's sole discretion, including but not limited to insurance premiums, ad Valore;m taxes( and .. .attornev:s
fees and leg.31 costs and experis'!s Any Sums which may be so paid by SecUred Party and al!,sums fl?r i_ns'urance
aforesaid, including the costs, expenses, 3nd attorney's fees paid In any suit affeCting said Collateral shall bear Interest from the
datesof such payments at the loan contract lt.te,rest rate applied to the unmatured prinCipal balande and shall be paid by Debtor ."tO'
Secured Party upon demand, and shan be deemed a part of the debt and re.coverable as s_uch In all espect:S. Any sum to Oe
.... .. tb!s.Securitl,!..A9reament.:. .. , .; ............. ,_ . ;._, . ._; ... ............ ..:...;,. :. ... ... . .... . ._...:....
(1 OJ Debtor shall, at its owri do, make, procure, execute and de!lver . .al!.acts, things, writings.and assurances as Secured Per.ty
inay Bt anY time req_uest to protect, assure qr .. enfo(ce. aod re.r,nedies .created by, .provid.ed in ot emanating. from
... . .. . .. .........
{11)
(12)
Debtor shall not. lend, rent, !ease or otherwise dispose of the Collateral or any Interest therein as aUthoriz6d In this SecuriW
Agr'eement or In writing tiy Secured Party, and DebtOr shall keep the Collateral, Including the pro.ceeds free from unpaid
charges, including taxes, and from !lens, encumbrances and security Interests other than that of Secured Party.
Debtof shall sign and execute alone or with. Secured Party any Financing. Statenlent other doCument or. .
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and pay all Connected costs, necessary to protect the security" interest under thisSecuritY Agreement a9ainstthe rights or
.. , orthrra 'PEi'r'SOriS:'Detlt5i' t1f eertiflc-ates !uid'a1nmng fE?es; Contlnltation fees, ahd tees foi'
certificateS of goOd standlngar)d "Otherlnfotmation required'bY SeCured Party. .. .. -- ..... , ...... - " ' .
.......... ;.
. Debtor: shall .at all times keep the Collateral and. its- separate. and distinct from other property of Debtor and shall keep
___ .;.., ........ cmplete: r.ecords.of.J:he.CoJJatw:al.aPd Jts .pr.oceeds,. Debtor .shall .
. do so, Jnc_luding {but not Umlted.to) feed, rent; storage .cQsts, and expenses of Sale.
(15)
sacuiad P8rty at any tinie of ttie oplrilon that the has or may decline in value, or Is otherwise
insuffiCieilt to adequately secure the "in(!(lbte"dtiess, or should Secured Party deem Itself Insecure as to payment of the Indebtedness,
then Secured Party may call for_ additional prOperty to be pledged covered by this Agreement satisfactory to_ Secured Party;
!f. any Co!!ater.al or ob!iga.tfOAs of third parties: to Debtor, the transactions creating those obligations will In
all respects to applicable state and fe?eral credit laWs,
(1 til. ''Jrf thC' event D8btof Or' any othet p"erSO"r!S"ii"elaks tb enjoin "seciJrei:l Part\"' trbm takirig any action in connection with the
lndebtGdness or the enforcement of Secured Party's rights in the Collateral, Debtor herEiby agrees "to give Written notice to the
PreSideFlt of secured Party,- at the address Of SecUred Party Set fot]:h- in the first J?Sragraph of this Security Agreement, or such
other person-or address as Secured Party inay designate In writing to Debtor, prior-to seeking any such Injunctive r"elief .
......,.,..,..,.....,:...- ... , .......... ---..---. .. .. . .... " .... , ........... -: ............ , ' ; .. '. . ... ------------ .. ------- ... ---- _ _.. _ __
(17) Debtor shall indemnify and hold harmless Secured Party from and against any and all claims, losses and !labilities growing oUt "of or
resulting from this Secl;lritY {including, _without !lmi-f:atlon, enforcement o! this SecuTity Agreement), except claims,
lOsses or liabilities resulting from the gross negligence cir willful misconduct of Secured Party. Debtor agrees, upon demanQ, to pay
to Secured Party the amount of any find an expenses, Including, but not limited to, the tea"s and-disbUrsements _of its counsel and of
any ex-perts and agents, Which Secured Party may incur hi connection with (a) the preparatiOn, execution, delivery, filing, recording
or administratiOn of this Security Agreem811t or the obtaining of adviCe from counsel with respect to Its rights and remedies under
this SecuritY Agreement, (b) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon,
any of the Collateral, !cl the exercise or enforcement of any of"the.rights of Secured Party hereunder, {d) the defense by Secured
Party of any-Injunction proceeding related to the Indebtedness or the Collateral, or (e) the failure by Debtoi- to perform or observe
-hereof.-trelftOf-'!lgYeti!ft'O"JlaY lrit81i:1Sn:>h ilily dtl'ler sums due td SecurM Party hereunder (save and
except lns_urance)_ that are not paid when due at a rilte per equal to the rate permitted by applicable law,
(18) As additional- security fl:!r the pebtor. hereby assigns, pledges and graQtS to Secured Party a security a lien
.,.,..,..._. _ _..,_':' ---- . .of .set.o.ff. ....
now In, or at any time hereafter comin9 within, the custoily oi- .control of Secured Party or any member Bank or branch Bank of
International Bancshares Corporation, "whether held in a general-or Special account or" i:leposit, or for safekeeping or otherwise. Every
(19)
Such security interest and right of set(lff niay be exercised without demand or notice_ to Debtor. No security interest or right of set-
off shall 'be deem-ed to have !iean waived by any act or conduct on the part of Secured Party, or any failure to exercise such right of
Set-off or to J:lnforce security interest', cir by any delay _In so doing. Every right of set-Off and security interest continue in
fuil force and effect until such right of set-off or seCurity Interest is specificallY waived or released by an instrument In_ writing
executed by Secured Party. The fo_regolng Is hi addition to in lieu of any rights. of set-off allowed by Jaw.
O:ebtor shall assist Secured Party in: complying with the Federal AsSignment of Clalnis Act (mid anY successor statutes) and simil!!r
raWS' tcf"liii3bf8 'Secilretf 'stitli Act. a!id" comply wltN' s-ritli raws. oebfor shall preSerVe.
the liability ot all aCcOunt _debtors, obligors, and secondary parties whose obligations are part of the Collateral. DEibtor shall notify
the Secured Party' of any change occUrring in oi- to the Collateral, or In any fact or circumstances_ Warranted or represented by
Debtor In 1his agreement or turnishe.d tO Secured-Party, Or if any of Default occurs.
,-"'"'"""' <----"''""' "" .. ,. ,.,
(20) Debtor will not allow "the Collateral to be affixed to goods identified herein as fixtures.
(21) All extended or renewed note(s) will be considered executed on th1 date of the original note{s).
(22) Debtoi- shall comply with all environmental laws and regulations applicable to the Collateral and the premises in which the Collateral
is lOcated and shall notify Secured Party_ upOn receipt of" any notice or other information .as to any environmental hazards or violation
Of such laws. Secured Party may inspect all premises in which the Collateral is lOcated aM the Coitateral as to its and their
"co"mp!iance with environmental law. Debtor indamnifilis and holds harmless SecUred P.arty for any breach of the foregoing and for all
losses, costs, fines, damages, inc(uding court cOsts and attorney's fees, incurred by Secured Party to defend Itself, or to protect or
'i:ii'eSefVe"tfie'"COll<ite"l'alagalhSt ElhVIItiflr'tletttaf rfS!<s; '11azaras,frhes; "'ah'CI titHer t:la1ms to tHe--conaterll!.
(_23} Without providing Secured Party Wi.th at least thirty {30) days prior written i-totice of Debtor's intention to do sO, Debtor, until the
indebtedness is paid in full,_ agrees that it Will not:
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a. in one transaction of. a sarles of related transactionS, merge into or consolidate with any other entity, sell all or substantially all
of its or In any way jeopardize its c:orporateexlstence,
b. change the state of its Incorporation,
c. change its corporate llame,
d. change the address and/or location of its Chief Executive Office;
e; file a UCCH 1 Ainendrilent form, and/or
f. file a UCCH1 Termination form.
(24) Debtor has the risk of loss of the Collateral.
"_< '.- ._., >n """";--" t\
(25) SeCUred Party no duty_ to collect SnY accruingon.ttie Collateral or !O preserve any rightS relating to Collateral.
B. Special Representations and Warranties.
-;;--- --- .. ... - .... ' ...
Debtor represents, warrants and agrees that:
\1) If the Collatei-el includes inventory:
. {a) Debtor will imr'nediately" notify SeCured PartY ot the disposition of any iilventory end at Debtor's expense will either assign to
Secured Party a first-prioritY security lntei"est In any resulting account, chattel p.aper, or lnstniment or tle!iver- to Secured Party
cash the amoUnt of the sale price. Debtor wilt nOt sell, lease; or otherwise 9ispose of any Collateral except inthe ordinary
course of business without the prior written consent of Secured Party.
(b) Until default DebtOr may in the ordinary course of business, sell, lease or furnish under contract of service any of the inventory
normally held by Debtor for such Purpose, provided, however, tha-t such use of the inventory shall r'lot be inconsistent with any
"o"'fh1if'pc'o<ii.!ild!isbf tlilil Se"eurJt'/'jll;"Ql'!'!em-el'lt or'with tlie Temi!;" or- conditlmts of a:ny PCIIIcies "Of lh"suran"ce 'thel'eon. A Sara in the
ordinary course of does not_lnc!ude a transfer in partial or total of a debt.
(2) If the Collater3!1ncludes accounts:
...... __ ,_ ... , .... (a)._ ... Eap.h. ac_count.in. the. C.ollatera!. wiU .repr,esent. enfor.ceable..ab:lig.atj,on ,Q.f. thitc:t.R.BJtieum.d. ....... '" ..
any instrument or chattel paper. .
(b) The office where Debtor keeps its records concerning accounts, If any, Is the address of bebtor set forth at the beginning of
this Security Agreement, -
{3) If the Collateral includes Instruments, chattel paper or documents:
(a) By delivering a copy of this-Security Agreement tO the broker, seller, or other person in possession of Collateral that is chattel
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paper or document, Security Party will that person pf
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81'!Gl,lr8;"d Party'.1nte.rest in .the Collateral. Delivery of the
copy .. of .the Secur.ity Agreement- .will.-als_d colisHtUtS Debtor.\s .. deliver .to Secured !?.arty .. certificates . .or.. other.,
. evidence of the Collateral as soon a.s it Is ,-ilv"ahableo i .Debtor will in\r:J19di.atety";'Oeliver to Secured Party aU chattel paper .and
documents that are Collateral in Debtor".s If that acquired, Debtor will deliver It to Secured .
Party. immediately following acqull!ltion and . either endorse it to Secured. Pa"rty's 9rder or give Secured Party appropriate
If aQY instruments,. chattel paper, money or monies, or documents are, at any time or.tim.es,,lncluded In the
Collateral, whether as proceeds pr otherwise, _Debtor will prom"ptly deliver the same to Secured Pany UPOI") the receipt thereof
by Debtor, and In any event promptly upon demand therefore by Secured Party. If necessary, all Collateral will either be
endorsed to Secui'ed Party's order or accompanied by appropriate executed powers.
(b) By means satisfactory to Secured Party, Debtor has perfected or will _perfect a sacurity Interest in goods cciv.,red by chattel
paper, If .. -- .. .... .... .... ... . .... : . . ..; ._: . ........ _,.-.., . ____ , .... . :,: ... ........ ,""-+"" .. : ... _ .......
(4). If the Co !lateral includes property covered by a Certificate of Tttle: If any certificate of title or similar document is, at any time and
pursuant to the Jaws of any juriS:dlc.tlon, Issued or outstanding with respect to the Collateral or any part thereof, Debtor _w!!! promptly
advise Secured Party thereof, and Debtor will promPtly cause the interest of Secured Party to be properly noted thereon, a11d If a.ny
certificate of title or similar. document is-so issued or. outstanding.at.the. time. .this .Securlt Agreement is .exe.cuted ,by,.o.r. on ,be.balf of ...
Debtor, then Debtor shall trave caused the interest of Secured Party so to have .been noted at or beforE) the time of such
execution; Bf!d Debtor .will further to Parl;v.. any such certificate. of title or -similar document issued or
outstandi_ng at any time with respect to such Collateral.
(5) If the Collateral is or may become fixtures on real proPerty described herein: This Security Agreement, upon being filed for record in
the real property records-of the county wherein such fixtures a.re situated, shall oper.ate also as a statement filed as a fixture
in accordance with Section 9.4021e) of the Texas Business apd Commerca Code upon such of which Is or may
become fixtures.
. . .
. ..tr.!:ifisfe't the- Collate-ral arrd ltS"tith'i to lllif'COllatl:ftal'"IS" frae of"
interests and restrictions on transfer .or pledg_e ext?ept as creat.ed by this Security Agreement ..
(7) All collateral consisting of goods is located solely Jn the states and/or states previously designated and warranted by Debt9r to
Secured Partv. ' ...... ....
(81 Debtor's:
. {I) chief executive office is located In the state previously designated and warranted by Debto.r to Secured Party;
Iii) state of incorporation Is the state previously designated and warranted by Debtor to Secured Party; and
.(iii) exact legal name is as set forth _in the first paragraph of Security Agreement ,
SECTION .VI: EVENTS OF DEFAULT .
Oebtor shall be in default under this Security Agreemeni: upon the happening of any of the following events or conditions (herein called an
. , ... ...,. ........ ,_.... . ...... , . ....... _ .. .. .... .-- . : ....... : - .......... ; ......... .. _,_ __ ... __,_"""'"__.._
(1)
. ..{2)
)3)
)4)
The failure by Debtor or any other liable party to pay when due any of.the Indebtedness efther principal or or any othei- sum due
!_!nder the terms of any instrument evidencing the Indebtedness ..
. Defal.!!t .by" Debtor in .. th!> punctual per:formaoca :any of :the. . .or to.,\11. t;hjp_ ,,
Sectii"lty Agre_ement.
. .
Any warranty, re,presentation, or statement contained Security Agreement or or furnished to Secured Party by or on
of Debtor or any other person or party In connection with this Security Agreement or to induce Secured Party to make the Joirns
{described In Section Ill!" proves to have been faise in any respect when made or furnlshE:d.'
Loss, theft, substantial d.amage, destruction, sale. {except as in this Security Agreement) or encumbrance t;o or of any of the
Collateral, or the niaklng of any levy, seizure or att"achment thereof or thereon,
\51 --151--rDsreo""tol"irttll"lft!'f;' insolvencY or lrosintrss tail ore; 'tt'le appolntmentof __
the property of Debtor; an assignment for the b\>nefit .of creditors by Debtor, the calling of. a-meeting "of-creditors of Debtor, or the ..
commencement of any proceeding t!nder any bankruptcy or insolvency Jaws by or against Debtor or any guarantor, -suretY. or endorser
for Debtor; or the occurrence of aQY. of such events described In this part (5) as to any person or party liable: for. the payment of the
or any por;tion .thereof, .. ..... _ ... _ _ _, .. ... ,. , .. , , . ..... _
(6) Any statement of the financial condition of Debtor Qr Ot any maker, suretY or endorser "of any of thO "tO
. ' .
(7) . The In the judgment of Secured. Party, unsatisfactory or In character or
(8) Any maker, guarantor, surety or endorser under or with respect to the lodebtedness defaults in any Qbligation or llablllt.y to Secured
Party.
ha:z<!rdous split, -dts:charge ... affectirfg-+the'"':oilaterel -or-the-!
premiseS in which. th_e Collateral Is !ocated, whether such event occurs on such premises or .on other premises.
_{10) Debtor, or of them, or tiny fails.to timelY deliver an_y and all financial income:t&x -re.tur.ns, cash flow.
.accQ_unt;; .recejyablf;! r_eports! .or... any. . Pl .. . QY
Party..
SECTION VII: SECURED PARTY'S RIGHTS AND REMEDIES.
A. General.
Secured Party may exercise the following rights and remedies before o.r after an EVent of Default:
11) . Party maY, take: control of any proceeds of the
. 'to- arl'f"Oebtor;-temporerilytw .. --:--:--.. ...
. . . . .
(3) Secured Party may take control of any funds generated by the Coilateral, such. as refunds from and proceeds of Insurance, and reduce
any part of the Indebtedness accordingly or .permit. to use such ftm.ds to repair l?i' replace. damageQ or Collateral
COl(ered by in.swanc.e. , ... :, .... , .. .... , ., .,,
. . . . . .
(4) Secured Party may requeSt Debtor from ti.me to time, ir} Secured Party'S diScretion t9 tcike a"ny aqticin arid to execute any
which Secured Party may deem necessary or advlsab!e"to accomplish the PUrpOseS of "this Security Agi'eer'neni: ii-lC!u.ding, wii:hcltrt"
limita-tion, Ia) t-o

demand, collect, sue for, recover; compound, receive" and_give aCqultt"ance and rece!ptsfor monies't!ue antl'tb
becotne ..dUe. unde.r .or. in .. respect of -any 11;1) to receive, ende.rse and coli act anY drafts Or documents at'ld
chattel paper In connection with the preceding actions; (c) to file any claims or fake any action or Institute any proceedings whicf:i
Secured Party r:nay deem necessary or fl?r collectipn of any of. the Collateral or to entprce its rig_hts with respect to
any of the Collateral, and (d) to complete and sign on behalf of Debtor one or more financing statements Pertaining to th\11 Collateral
and file the same in an appropriate location. The powers conferred on SecUred Party hereunder are solely to protect its interest in the
Party to ... .... ''""""'".;.
. . . .. IBC0004 - 03/(!4/0"5
Page 5 of .9.
Debtor's agent ls. coupled witti an a:nd wm survive any disatiility of Debtor.
. . .
. , -r:l:lts .. .. A,areeme!).t1 . .. .. .. in whole. <!nd iry .
part from time "to time, and In any such Secured Party shall De fully discharg'ed from all responsibllity with respect to the Collateral
so assigned ahd the assignetl shall be entitled to all of tlie rights, privileges and remedies granted in ttiis Security Agreement tO Secured
to the"exte.nt the -sarrie are assigned, and Debtor will assert no claim or defenses he may hiiVe against Secured Party against the
assignee, except those granted in this Security In addition, Debtor waives. arid will not assert against any claims, defenses
.... assert-against' Secured-Party eXcept defenSes'wh!chcannot-twweived:- ...... '
(6)
Secyred Patty may enter upon Debtor's premises at any reasonable time to inspect the Collateral and Debtor's books and records
pertaining to the collateral, and Debtor shall assi5!= the Secured Party in making any such inspection.
. . . .
(7) Secured Party may nOtify the account debtOrs or obligors of any accounts, chattel paper, negotiable inStruments or other evidence of
Indebtedness remlttetl'by Debtor to Secured Party as prOceeds"to pay Secured Party ;directly: Secui'ed.P8rty rriaycontact account
debtors directly to verify information furnishe_d by Debtcir.
' . f!l':IY re.c:pire 9r .a!! .bY. !JS
J
(9) Secured may designate, from time to time, a of the Collateril! the loan ValUe and "Debtor to "maintain
the lndebtedhess at or below such percentage .

shall not have any duty to present"for conversion any instrument of Cciflatefal in its posseSsion unless it "shall have received from Debtor
detailed writterl instructions to that effect at a time reasonably far in advance of the final conversion date to make such 90nversion
possible. .
The foregoing rights and powers Of Secured Party w!U be In addition to, and not a lin'litation Upon; any rights and powers Of Secured
Party _given by taw, in this Security Agreement, or otherwise.
(11) secure.d Party has no obligation to attempt to satisfy the Obligations by collecting thein from any other person liable for them and
. release! m?d.ify _or . .. }? .o.f. the !JII V'{\thqt!l: ...
affeCting Secured Party's ri9hts aga1nst Debtor. Debtor waives any right it may )Jave tO require Secured Party to pursue any third
for ahy of the Obligations.
(12) Secured Party may comply with any applicable state or federal law requirements In connection with a disposition of the Collateral and
_.....,.,_,_-:-'COTTlplianee-will"Tiot be--considerechrclverselyto-affect"thecommercia! reasonablenessofarw-sale o-1\t.f'le- .................... _,...__, .,
{13) If Secured Party sells any of,the Collateral upon credit, Debtor will becredlted only with payments actually made by the purchaser;
received by Secured Party and applied to the indebtedness of the Purchaser. In the event the _purchaser fails to pay for the Collateral,
Secured Party may resell Collatera! and Debtor shall be credited with the proceeds of the sale.
(15) Secured Party have no obligation to marshall any assets In favor of Debtor, or against nr ln payment of:
"("i 6) This" Security Agreement shall bind and shall Inure to the benefit of the heirs., legatees, executors, administrators, successnrs and
assigns of Secured Party and shall bind allpersons who become bound as a debtor-to this Security Agreement .
... - ------.. .............. --- --- .. -' .... ' .. , .. .
(17) Secured Party does not consent to any assignment by Debtor eXcept as expressly provided in this Security Agreement.
B. Remedies In Event of Default
During the existence of any Event of Default, or In the event Secured Party deems Itself insecure In the payment of the Indebtedness, Secured
Party may declare the unj:laid principal 1;1nd unpaid and accrued interest of the Indebtedness imrriedfately due in whole or part,. enforce the
Indebtedness, and/or exercise aiiy rights and remedies grai"]ted by the Texas Business and Commercial Co"de or by this SeCurity Agreement,
including the. following:
.'l1 i. .. tO. seCUreCfParty' S!l'bOb"KS' 80Cfi-"860rdS relating tnecolf8tera1; ..
. (2)... reqUire Debtor to assemble the Collateral and make it available to Secured Party at a place reasonably convenient to both parties;
- . . . . . . . . . . . . . . . .
.... cl-'l"lny""Ofthe Colletert!hnd f-et,1:his opttrpose enter an'f premises where-it-is
.. {4)
16)
of the pe"ace and will not bE! guilty of, and/or held liable for, trespass;
sell, .lease, or otherwise dispose of any of the Co!latt::ral in accofd with the rights., refl')edies, and duties of a Secured Party under
Chapters 2 and 9 of th"e Texas Business And Commerce Code after giving notice as required by those chapters; unless the CoUatera!
threatens to decline rapidly. in value, Is perishable, or would typiccil!y be Sold oh a recognized market; Secured Party will give Debtor
reasonable notice of ahy pUblic sale of the Collateral or of a time after which It may be otherwise disposed of without further notice to
Debtor-; In this event, notiee witt be deemed reasonable If it is mailed, postage prepaid, tci Debtor at. the address specified in this
. agreement 11t laast ten dayS before any p.ubi!C sale or .ten days before the t!ffie When the Collateral may be ot})erwise disposed of
. : fl.!l"!r$lr to ._l?ebt9r,. . f.?r:tY to ::!r modi!)' an.Y an9 ;;.11 .":':_ar_rant.ies for}:h in .
9.01 O(d) and stipulates and agrees that such a disclaimer and)Or modification will not render the sale cornmercia.lly unreasonable.
surrender any hisurance policies covering the Collateral and receive the unearned premium;
.... after def-ault lA. -the mariner s"pec!fied in-f:hapter-
Comfnerce Code, including payment of Secured.Party's reasonable attorney's tees and court expe;nses;
{8).
If dispOsition of the Collateral leaves the lnd!btedness unsatisfied, collect the deficiency from 811" Hable partie"s," Expeiises of retakin"g,
holding, Preparing for sale, se1lln9 or the like sha!l"lnclude Secured Party's reasonable attorneY's fees and legal costs and/or exJ)Einses,
and Debtor agrees to pay such costs, expenses, a"nd fees , plus interest t_hereon at the maximum rate allowed by applicable law;
Party may retain all or part of .. Collate.ral in full satisfact!o.n of the: Indebtedness ptJrsuant to Section of
the Texas BIJsiness And Commerce Code;
. .''SeCUred PartY wii:liOmi"d!tniu1rcir-rrOiYCi{Or apprcip'da"te' BnCf aPP!i' toW.arO the PiiiYnleiit of any' Suriis then. owing to ..
Secured Party and In such order of application as the Secured Party may from time to time elect, any property, balances, credits,"
deposits, accounts or-monies of Debtor WJ:lich for any purpose is in the posseSsion 6r control of the Secured Party or any member Bank,
branch Bank or other depository institution of International Bancshares Corporation; and/or
__,......,_,_ .. _, ______ .,__,,_ ..... ... -.. ---.. - ......
. '' .................. ..:. ........ -.. -.-, .. ------.......,.....__,_.__,_ ...... ...:..,__., .. .
r1 OJ Secured PartY may rerTtedy any de "fault without waiVing the default remedied and may waive any default without waivirlg any other
prior or subsequeint default.
.,.
seCTioN Vm: ADDITIONAL. AGREEMENTS.
IBC0004 - 03/04/05
Paie 6 of .9
i'':
, .. ,
. . ' .
.;
.";_..
_{1)
. -----
--v----- , - -"" . .. M .,. ,,. -' "'-<"-'--..-
AU notices and other communications to PartY hereunder .or in connection hSrewlth shall be deemed to have been given
received by Secured Party in writing at the address first shown hereinabove. Any notice or demand or other communication to Debtor
hereunder or in connection herewith may be given and. shaU conclusively be deemed .and considered to have been given and
upon the deposit thereof _in writing in the duly stal)lped and to Debtor either at the street address, the
first shoWn H8reln806Ve; Or' af therri'ailii19 8.ddr9'ss, if any, givtiii bY 'aii0/ofTiiT'tiS'6i:O( iit tfie"begrrini'rigo'f tfi!S ,:rgreemeht (or- St sLiCI; '
other address as may have been designated most recently in writing by Debtoi- to Secured Party); provided, however, actual notice to
Debtor, however given or received, .always be effective when given-or received.
{2) A copy of this Security Agreement or any financing statement covering the_ Collateral is sufficient and may be filed as a financing
statement .. Information concerning this security interest m_ay be at the of Secured Party shown above.
(3) This Security Agreement. maY only be modified limited by an agreement in writjng.
-.. -,.,..,{,4.).,..,.,.....;r.ms,.sec.urJ.t..inter.est.sbqU affected. bv.any .. securitY-tor .any .of . .Df ..
the Indebtedness nor releases of any of the Collateral shall affect the validity of this s_ecurity interest with reference to any third party. .
Additionally, of this security Interest by lawsuit does not limit Secured Party's remedies, inchJding the right tO; sell the
Co!Jatenil Under the terms_ of this Security Agreement. Secured Party shall haV!! the_ -right to ex:ercise. all at the sarrie o.r
different times and no remedy shall be a defense to .any. other. Secured Party shall have all rights and remi:ldteS granted by law Or
otherwlseinBdd!tiOrito"i:tiOSe-provid6ifii"lthJS'SeCUritY"A9reemerit.' ::" ., ... " . :"': ' ''
(5) Secured Party may any default without waiving lt. .delay by Secured- in Its rights or partially it!l
rights or remedies shall waive further exercise of those remedies or. rights. The of Secured Party to exf?rc!se any remedies or
rights does not waive subsequent exercise of those remedies or rights. Any waiver by P<!rty of any default shall not 1-'(alva any
further default. Secured Party may remedy any default without waiving it. Secured Party's waiver of any right in this Security
Agreerrient or any default is binding only if in writing.
{6) Debtor and Secured Intend that the indebtedne;s shall be strict con1p!iance with applicable. usury iaws: If at any time
.,.._ .. .anylru:le)ltedne_ss .. :>!tlth..ti:Wi.,.......__,._...
transaction wquld be usurious under applicable law, then regardless of the provisions of this Agreement -or any other
do.cu_merits '?f .instruments securing .or otherwise executed in connection with anylndebtedne_ss by -this Security
Agreement or any_action or event _()ncluding, w_ithout JIIT!itation, prepayment of principal under the Note or acceleration of maturity by
Secured Party) which may coeur with respect to the Note, it Is agreed that all s1,1ms determined to be us_uriou's shall be immediately
creOlted bY sec urea P8itY 'tO Debtor as apay-ment '"Of pi-ii1c1Par"uhi:le-r the "l\IOtEI"Oi- u "tlie""fi!OHf'haii atteaay "til:!eh'i
"refunded to All compensation which constitutes interest applicable law in connection with arw lndabtedneiss secured by
this Security Agreement shall be amortized, prorated, allocated, and spread Qver the full period of time any indebtedness is Qwed by
to the gr:eatest extent permissible _without exceeding the applicable.maximum rate allowed by apPlicable law in effect from time
to time during SU!?h period ..
(7) Secured Party may perform any obllgatlon which Debtor fails to perform Debtor agrees on demand to r9tmburse Secured Party
immediately for any sums so paid by Secured Party, Including attorneys' fees and other. legal expenses, plus" interest cry. those -sums
from the dates of payment at the r_a'te stated In the Note for IT!atured, amOunts. Any_sum to be reimbursed shall be secured by
:;. ::..:: .. } }j::: . L ... relmbUJSil_meotsl. . ., .. , ... -.... .. __ .......: ... . __ ..... , .... -,.
(8) This Security Agreement is being executed and.de.llvered <!ndis inten?ed to be performed In the State of and.Shal! be construed
and enforced in accordance with the laws of the State of Texas, except to the extent that the Code provides for the application of the
law of the Debtor States. the context requires, singular ROuns..anQ pronouns Include the plUral . rights of Secure_d Party
.'.
.under this SeCuritY AgfebtnEllit ShalrinUr6 to""ttle "beile'fif Of Its suctiessoi"S "anO SsSiQtiS:':n>ny 8Siil"gfillier'lt""of part bf
delivery by. SeCured P8rty of any part of the Collateral wm fully discharge Secured Party from any and all respons!blllty for that portiOn
of the Collateral. Indebtedness under this Security Agreement shall bind Debtor's personalrepresentatlves, successors aDd
assigns. If Debtor Is more than one, all their representatives, warranties and agreement$ are joint and several. It any part of tlils
Security Agreeme-nt is Unenforceable, the unenforceabillty of such provision will not affect the enforceability of any other proVision
here9t and a!! other provisions will constitute valid provisions,
SECTION IX: ARBITRATION - THE PARTIES FURTHER AGREE AS FOLLOWS:
. . ,..,___ ...... .......,...._,. ... .;.., .. ............. :. ,, ... , ...- .... ...... ...
(a} ANY AND All CONTROVERSIES BETWEEN JHE PARTIES SHALL BE RESOLVED BY ARBITRATION IN ACCORDANCE. WITH-THE
.. COMMERCIAL ARBITRATION RULES OF- THE AMERICAN ARBITRATION ASSOCIATION IN EFFECT AT THE TIME OF _FILING, UNL-ESS ,THE
COMMERCIAL ARBITRATION RULES CONFLICT WITH THIS PROVISION, AND IN SUCH EVENT THE TERMS OF THIS PROVISION SHALL
CONTROL TO 'J:HE EXTENT OF.THE CONFLICT. -ANY.- ARBITRATION HEREUNDER SHALL BE BEFORE AT LEAST THREE_NEUTllAL.
ARBIT-RATORS ASS0CIA'l'ED WITH ARBITRATION .ASSOCIATION "AND $EL;ECTED"IN
RULES OF THE AMERICAN ARBITRATION ASSOCIATION. FAILURE of ANY ARBITRATOR TO DISCLOSE AlL FACTS WHICH
MIGHT TO AN OBSERVER CREATE!'- REASONABLE IMPRESSION OF THE ARBITRATOR:S PARTIJ?..LfTY. AND/O.R MATER_IAL
ERRORS OF LAW SHALL BE GROUNDS [IN TO ALL QTHERSJ FOR VACATUR OF AN RENDEf!ED.PURSUANT TO:IHIS"
AGREEMENT.
(b) THE AWARD OF THE ARBITRATORS, OR A OF THEI"'._'I, SHALL BE FINAL . AND JUDGMENT UPON THE AWARD R.END!;::_f.I.EO
MAY BE ENTERED IN ANY CQURT, STATE OR FEDERAL, HAVING JURISDICTION. THE ARBITRATION /;WARD SHALL BE IN WRIJING AND
SPECIFY THE FACTUAL AND LEGAL BASES FOR THE AWARD. UPON THE REQUEST OF ANY PARTY, THE AWARD SHALL INCLUDE
__ Q.!.-AYf-l---- . - .. .. ............ ____ ,_.: .. .... .......... , _ ___,_......,,
ARBITfiABLE DISPUTES JN_C.L\.!DE BETY'J,EEN WHATE_VER. TYPE OR.

-PARTIES, .AND/OR ANY ASPECT-OF ANY PAST-OR PRESENT RELATIONSiliP" OF :rHEPARTIES, WHETHER
SPECIFICALLY INCLUOING ANY -ALLEGED TORT COMMITTED BY ANy.PARTY.
. !d) THE PARTIES SHALL ALLOW AND ,PAFITICIPATE IN. DISCOVERY IN FEDERAL.RULES.OF.- CIVIL PROCEDUR_E-
FOR A PERIOD OF"ONE HUNDRED TWENTY (120) DAYS AFTER THE FILING OF THE ORJGif)!Al, __RESJ:'ONSIVE . PISCOYEJ;IY.MAY.
CONTINUE AS AGREED .BY THE PARTIES OR AS BY TH!O U_NRESOLYED DISCOVERY DISPUTES
SHALL BE.BROUGHT TO THE ATfENT!ON.OF THE ARBITRATORS BY WRIT'f.EN.MOTIQN .FOR DISPOSITION. RULING-ON
ANY ASSERTED OBJECTIONS, PRIVILEGES, AND PROTECTIVE OF:ID.Efl REQUEST$ AND AWARDING ATTORNEY'S. FEES TO THE
PREVAIL!NG PARTY. .
; :,...... .. THE THE""AGGREGATif"OF"AL.CAFi=1RMATfVit CLAiMS EXCLUSfVEOF"iN'tERESTANb_.._,
ATTORNEY'S FEES, aR UPON THE WRITTEN REQUEST OF ANY PARTY, 111 PRIOR. TO THE DISSEMINATION OF A LIST OF POTENTIAL
ARBITRATORS. !HE AMERICAN ARBITRATION ASSOCIATION SHALL CONDUCT AN IN PERSON ADMINISTRATIVE CONFER_ENC_E WITH THE
PARTIES AND THEIR ATTORNEYS FOR THE FOLLOWING PURPOSES- AND FOR SUCH ADDITIONAL PURPOSES AS :rHE PARTIES OR THE
-AMERICAN ARBITRATION -ASSOCIATION MA-Y DEEM -APPROPRIATE, (A) TOOB'fAIN ADDITIONAL INFORMAT-ION-ABOU:J':f.HE-NA;fURE-AND
MAGNITUDE OF THE DISPUTE AND THE ANTic"iPATED.LENGTH OF.HEARINGS AND-SCHEt;>U,LlNG; {B) TO DISCUSS_THE VIEW OF"THE-
PARTIES ABOUT ANY TECHNICAL AND/OR OTHER SPECIAL QUALIFICATIONS. OF THE ARBITRATORS; AND (GJ.TO GONSiDER-, -WHETHER
MEDIATION QR OTHER METHO.PS OF DISPU"fE RESOLUTION MI!3HT BE_APPROPRIATE.".ANO 121 AS .. PROMP.T.LY As. f'RA.CTICABLE AF.JER,II:lE '"
SELECTION OF. THE ARBITRATOR$, A PRELIMINARY HEAR!Nf3 SHALL HELD AMQNG Jl:ltPARTU;S, THEIJ:I. ATT.ORNEYS A!IID.J;l:-IE.
ARBITRATORs; WITH THE AGREEMENT OF THE ARBITRATORS AND THE PARTIES: THE PRELIMINARY HEARING MAY BE CONDi.JCTED BY
TELEPHONE CONFERENCE CAI:.l." RATHER THAN IN PERSON. AT THE PREi:.IMlt\iA.RY MA.y"BE. cOriiSfDERED,
SHALL INCLUDE, WITHOUT LIMITATION. A PREHEARING SCHEDULING ORDER ADDRESSING {A} EACH PART'('S DUTY TO SUBMIT A
. ? .. c.9,._,
. . . .
. ...... -- ................ ' .. ---" ........ -__ _, __...........
.............. _______ ,, ....
''.'
... D.ETAILED STATEMEN:J'OF CLAIMS, .. DAMAGESANDlOR DEFENSES, A STATEMENT. . .QF THE ISSUES ASSER.TED BY EACHPART-Y -AND ANY
AU,T.HORITIES THE P.AF,tTIES MAY WISI"!.TO BRING TO THE ATTENTION Of THE ARBITRAT-ORS: (Bl RESPONSES AND/-OR-REPLIES TO
-fHE PLEADINGS FILED !N COMPLIANCE WITH SUBPART 2(A); {C) STIPUlATIONS REGARDING ANY UNCONTESTED FACTS; {D}EXCHANGE.
ANo.PREMARKIIIiG OF ALL DOcUMENTS WHICH EACH PARTY BEI.:IEVES MAY BE OFFERED AT THE FINAL ARBITRATION HEARING; (E) THE
. IDENTIFICATION AND' AVAilABILITY .OF WITNESSES, INCLUDING EXPERTS. AND SUCH ADDITIONAL MATTERS REGARDING WITNESSES
BIOGRA'PfiiES AND A' SHOR1 St:JMMARY OF THEIR EXPECTED TESTIMONY, {F) WHETHER A STENOGRAPHIC OR OTHER
.. ., .... OFFIC1AL THE PROCEEDINGS SAAL-1.. BE"MAIN:rAINEDi AND 1Gl THE POSSIBltiTV OF UTILIZING MEDIATION OR OTHER
ALTERNATIVE-METHODS .OF DISPUTERESOLUTION. .
. .. {f) .FOR PURPOSES OF THIS PROVISION, "THE PARTIES" MEANS DEBTOR AND SECURED PARTY, ANDEAGH AND ALL PERSONS AND
-.,w!LUS.S ... . ...QB..,P..NY. . Qft . __ AS
. TRANSACTION. "THE PARTIES" SP.IALL ALSO INCLUDE INDIVIDUAL PARTNERS, AFFILIATES, OFFICERS. DIRECTORS. EMPLOYEES, AGENTS
AND/OR REPRESENTATIVES OF ANY PARTY TO SUCH DOCUMENTS, AND SHALL INCLUDE ANY OTHER OWNER AND HOLDER OF THIS
AGREEM_ENT. .
... ..(gl THE pARTIES SHALl,. HAVE TJ:IJ; RIGHT TO INVOKE SELF HELP REMEDIES {SUCH AS SETOFF, NOTIFICAT.ION OF ACCOUNT DEB:rORS,

ATTACHMENT, SPECIFIC PERFORMANCE, RECEIVER, INJUNCTION. oR RESTRAINING ORDER; AND. SEQUESTRATION}'
BEFORE OR AFTER ANY ARBITRATION. THE PARTIES NEED NOT AWAIT THE OUTCOME OF l:HE ARBITRAtiON BEFORE USING SELF-HELP
...... 0Fi":A:NCili:ARY AI\10/0A-.PROVISIONAL Jt)DIC1Al REMEDIES SHALL NOT OPERATEAS A WAIVER OF fiTHER
PARTY'S RIGHT TO COMPEL ARBITRATION-. ANY ANCILL'ARY OR .PROVISIONAL 'REMEDY WHICH WOULD BE AVAILABLE FROM A COURT AT
LAW SHALL .BE AVAILABLE FROM THE ARBITRATORS. . .
.. . ..!.tr:.!Y .i:JlliER ..
.
ANY AND ALL ACTION IN A TRIAL COURT, SAVE AND EXCEPT A HEARING ON A MOTION TO COMPEL ARBITRATION AND/OR THE ENTRY
OF AN ORDER COMPELLING-ARBITRATION AND STAYING AND/OR ABATING THE LITIGATION PENDING THE FILING OF THE FINAL AWARD

(i) ANY AGGRIEVED PARTY SHALL SERVE A WRITTEN NOTICE OF INTENT TO ARBITRATE TO ANY AND ALL OPPOSING PARTIES WITHIN
-aaa'OAYS,'AFTfR-DlSPI:ITEitA$ ARISEN. AGISPUT.1S DEFINED TO HAVEARISEN ONIN UPON-RECEIPT OF SERVICE OF JUDICIAl
PROCESS, INCLUDING-SERVICE OF A COUNTERCLAIM, FAILURE TO SER-VE A WRITTEN NOTICE OF INTENT TO ARBITRATE WITHIN THE TIME
SPECIFIED ABOVE SHALL BE DEEI\IIED A WAIVER OF THE AGGRIEVED PARTY'S RIGHT TO COMPEL ARBITRATION OF SUCH CLAIM. THE
ISSUE OF WAIVJ;R PURSUAf\IT TO THIS AGREEMENT IS AN ARBITRABLE DISPUTE
. ..,._....., m tN '36o oAY 'NcifiCii PERi'Ofi. \NHEfAER'AS. Js'-""').
NOT A 'WAIVER OF THE RIGHT TO'COMPEL ARBITRATION. ALL DISCOVERY OBTAINED IN THE PENDING LITIGATION MAY BE USEQ IN ANY
SUBSEQUENT ARBITRATION PROCEEDING.
lkl THEPARTIES FURTHER AGREE THAT (i} NO ARBITRATION PROCEEDING HEREUNDER SHALL BE CERTIFIED AS A'CLASS ACTION OR
PROCEED AS A CLASS ACTION, OR ON A BASIS INVOLVING CLAIMS BROUGHT IN A PURPORTED REPRESENTATIVE CAPACITY ON BEHALF
OF THE GENERAL PUBLIC, OTHER CUSTOMERS OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY SITUATED AND llll NO ARBITRATION
PROCEEDING HEREUNDER SHALL BE CONSOLIDATED WITH, OR IN ANY WAY WITH. ANY OTHER ARBITRATION PROCEEDING.
11} .imY.'ARBil'RATOR<SELF.CTED SHAI:.bBEI{NGIWLEDGEABI:EINTHE SUBJECT MATTER OF THE DISP'i.JT.fo EACH OF THE PARTIES SHALt
AN EQUAL SHARE OF THE ARBITRATION COSTS, FEES, EXPENSES, AND OF THE ARBITRATORS' FEES, COSTS AND EXPENSES.
{m} ALL STATUTES OF LIMITATIONS WHICH WOULD OTHERWISE BE APPLICABLE SHALL A:PPL Y TO ANY AND ALL CLAIMS ASSERTED
. .9.F .fir.f( .. STATUTES._ ..... ,
OF LIMITATIONS.
{n) IN ANY ARBITRATION PROCEEDING SUBJECT TO THIS PROVISION, THE ARBITRATORS, OR MAJORITY Of THEM, ARE SPECJf:ICALLY
'EMPOWERED TO DECIDE (BY DOCUMENT.S ONLY, OR WITH A HEARING, AT THE ARBITRATORS' Sot.E DISCRETION) PREHEARING MOTIONS
WHICH ARE SUBSTANTIALLY SIMILAR TO PRE-HEARING. MOTIONS TO AND MoTIONS FOR SUMMARY ADJUDICATION.
: (o) THIS ARBITRATION PFIOVISION SHALL SURVIVE ANY TERMINATION: AMENDMENT, oR EXPIRATION OF THE' AGREEMENT IN WHICH.
THIS PROVISION IS CONTAINED, UNLESS ALL OF THE P_AR'TIES OTHERWISE EXPRESSLY AGREE IN WRITING. .
:. THATTHIS ..-AGREEMENT EVIDENCES A INVOLVING lNTERSTA"FE COMMERCE. THE
FEDERAL AfiBITRATIOl\i ACT SHALL GOVERN THE INTERPRETATION, ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION
CLAUSE OF THIS AGREEMENT. -
.. ... QR .f.L .. J?!:!e.,I.L_ P.:W4!:lR. AILIN_G: PAF!TY .. _.., ...
PURSUANTT.O THE TERMS OF THIS AGREEMENT. .
lrl NEITHER THE PARTIES NOR THE ARBITRATORS MAY DISCLOSE THE EXISTENCE, coNtENT, OR RESULTS OF ANY ARBITRATION
HEREUNDER WITHOUT PRIOfl WRITTEN CONSENT OF ALL PARTIES: AND/OR COURT ORDER.
tsl . VENUE-OF ANY ARBITRATION PROCEEDING HEREUNDER SHALL BE IN BEXAR COUNTY, TEXAS.
SECTION X . Miscellaneous,
(a) security ITiterest Absolute. AU rights of the Secured Party and the security interests hereunder shall be absolute and unconditional irrespect'lve
of: .. ' ......... ., .. .,.. - ' .........
;(i) -any change in the time, manner, or place of .payment of, or in any othei term Ot, all or any the Indebtedness, or other
amendment or waiver of 'Of any consent to .any from the Promissory Note or any other Loan Document; .
(II) . any exchange or release or nonperfi:lct!on of all or any part of the Collate.ra! or any _other collateral, or any release from, amendment to,
.-.....,. .o.r.,cQps,ent..to . .de.partl,!!1l...f;,cm..P..nY...WJM.ni.Y .... or. QOY. .Q{ .."tl"ti?. lndf;b.tednes.!i;.J2r ___ -- .... -- _..............,""-'- ., .
(m) to the fullest extent perm!ttedby law, anY other circumstances which might otherwise constitute a defense available to, or a discharge of
the Debtor or a third party pledgor.
llil Indemnification. The Debtor to Indemnify the Secured PartY and.hold'ttle Secured Party harmiess.from and any and all
liabilities, obligations, losses, damages, penalties, actions,. judgments, suits, costs, expenses or disbursements of any kind of nature whatsoever
which may be 'Imposed on, incurred by, or asserted against the Secured Party In any way relating, In any way arising out of or in connection with
this Security .the Documents or the transactions contemplated hereby or thereby other than those arislrig out of the Secured
Party's .br.eacfi. default. neglig6Jnce or willful misconduct in its obligations under this Security Agreement or the Loan Documents. Without
limitation of tile foregoing, 'Qie Debtof will reirriburoe the Simur6d Party for all expenses (lncludlng expenses for' legal serVices of every kind) of. Or
JnctdentaJ< of, entering ..into any of .. provlsionshereof'-and .. -and any actual ot
attempted sale, l!lase or other disposition.of,_and any. exchange, collection, compromise or settlement of any of the Collateral and
defending or asserting the rights and C:lalms _of the Secured Party in respect thereof, and for the care of the collateral and defending or asserting
the rights and claims of .the: Secured Party In respect by litigation or othfO!rwise, including expense of .insurance, and all such expenses shall
.. ..lndebt.edne.sl! ..... , ....... - ... - .. _ ................. __ . -.. :.,,_, _ .. ---- --- ................ ,__ ,.. . ! :
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Page 8 of 9
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THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES
Dated March 24 2006
L.P. l'ISJ l'RODUCE,LLC DEBTOR:-
I)ll(:$MkRKJl'l'--E!IG; ITS -- ...................... ---- ------- _____,,_- ------...
By:
DEBTOR: DEBTOR:
By: By
., .. -------------.. -------------., ... _ .. DI;.BJQJl; .... _, .................................... , ... ---, . , __ ....... ..,_
By: By:
DEBTOR: DEBTOR:
By: By:
SECURED- PARTY
' ... ......... -- ... ....-..... .......... _
Name:
.M:i:cHAEL K. SOHN
Title:
SENIOR VICE PRESIDENT
- .. ......... ,,,_: .. ------------..................
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Page 9 of 9
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SUPERIOR T.Oif'IAT6,;.dAiVil<Jiucl IrTD. ,
a 1 nu.t:.e partnership
SECURITY
AGREEMENT
The undersigned Debtor, Owner of Collateral, whether one or more, and INTERNATIONAL BANK, OF CQMMBRCE
130 E TEWIS. SAN ANTONIO. "TEXAS 78205
{hereinaffer called "Securad Party") enter Into this Securi_ty Agreement and for good and cOnsideration, the receipt of which is hereby
acknowledged, agre.e as follows:
SECTION I; Creation of Security Interest,
Debtor her.eby grants to Secured Party a first and exclusive !fen and security fn.terest in all of. the personal property of Debtor, wherever loCated,
and now owned or hereafter acquired, Including the property in Section II of this SecuritY Agreement /the "Collateral") to secUre
payment and performance of the Indebtedness (described In Section HI below).
SECTION 11: Description of Collateral,
1, The securitY Interest is granted In the following collateral:
a. Describe the collateral and, as applicable, check boxes and provide Information indicated below.
SEE EXHIBIT "A" ATTACHED HERETO AND INCORPORATED HEREIN
b,
,,
2
3
D
The above-goods are to become fixtures on: (describe real estate; attach additional sheet; If needed)
i
!
O The above timber is standing on: (describe rel!l estate; attach additional If needed)
D
The above minerals or the .like ()ncludlng oil and gas) or accounts will be financed at the we!! head or mine head of the well
or mlnelocated on: {describe real estate; attach additional sheet, if needed)
If b.1, b,2, or b,3 above Is checked, this security agreement Is to be flied for record In the .. real estate records. (The description of the
real elltate must be sufficiently specific as to give notice of a mortgage on the realty),
D The Debtor does not have an Interest of record; the name of record owner of the real estate Is
D All subStitutes and replacements for, accessions, attachme;nts, and other additions to, and tools, parts, and equipment \.!Sed in
connection with, the above property; and the lncrealle and unborn.young of animalll end poultry,
E All property slm!!er to the abo via acquired by Debtor,
F
All proceeds, products, and profits of the Collateral are included, Coverage of products and proceeds for financing statement
purposes is not to be construed as giving Debtor ,any additional rightll with respect to the Collateral, and.Debtor is not authorized to
seU, lease, or otherwise transfer, furnish under contracts of service, manufacture, process, or assemble the Collateral, except in
accordance with the provisions ot this Security Agreement. Any additional sheets describing the the real estatl!, or other
matters are Incorporated In and made a part of this instrument.
2. Classify the collateral under or of the following Business And Commerce Code classifications:
D
Consumer .Goods
D
Farm Products -.
WI
Equipment {businells ute)
m
General Intangibles
D
Equipment (farm usel Inventory
D
Property
D
Chattel Paper

Instruments
D
LetterOf-Credit Rights
Accounts
D
Support Obligations
Deposit AccoUnts
D
Liens on Government Assets
8
Commercia! Tort Claims
D
Sales Of_Payment Intangibles and Notes
Agriculture! Liens
And the extent not listed above as original collateral aU proceeds and of foregoing.
UC0004 - 06/22/0l
Page 1
Any term used in the Texas Business And Co( :rca Code {the "Code") and f!O.t defined lri this
term In the Code.
,ty Agreement has the meaning given) to'th"e
3. o If this block is chec!<ed, this Is a purchase money security Interest, and Debtor will use funds advanced to purchase the Collateral, or
Secured Party may disburse funds direct to the s.e!!er of the Collateral, and to purchase Insurance on the Collateral. To the extent
Debtor uses the Loan to purchase Collateral, Debtor's repayment of the Loon shall apply on a Hflrstlnfirstout" basis so that the
portio"n of the Loan used to purchase a particular item of Collateral shall" be paid in the chronological order Debtor purchased the
Collateral.
4, If any of the Collateral Is accounts, give the location of the office where the records concerning them are kept (If other than Debtor's
address shown above):
5. "Commercial Tort Claims", a subcategory of General Intangibles, means the Debtor's claim for -------------
against-------------
SECTION II!: INdEBTEDNESS
This assignment and grant Is made to Secured Party to secure the prompt and unconditional payment of, and the first and exclusive security
interest hereby to Party the payment and performance_ of, the following blndebtedness"):
Any and a!! liabilities and/or obligations of Debtor, or any of the If more than one, to Secured Party, jointly and/or
severally, and In any capacity, whether as borrower, guarantor, or otherwise, now or hereafter owing, created and/or arising, and regardless of
how evidenced or arising, as to outstanding and unpaid principal, accrued and unpaid Interest, attorneys' feeS, collection costs, and all other
sums owing by Debtor, or any of the undersigned if more than one., lm:!udino but not limitArl tfl
.t.hat. cett:.ai:n .. Real.Estate Lien Notes of even date herewith executed Produce, L.P., a Tex
limited partnership :arid made payable to the order of Secured Party in the original principal
. andfurtherwithoutllmitatlonto: sumsof $1,50.0,000 .. 00 and
A. any and all indebtedness of:
(If Indebtedness Is ndt solely of Debtor) or any of them If more than ene, to Assignee, jointly and/or severally, and In any capacitY,
whether as borrower, guarantor, or otherwise, now or hereafter owing, created and/or arising, and reg11rdlef!s of how evidenced or
arising, Including, without
8, any commercial loan or Indebtedness;
C. any credit catd or other consumer type of loan;
D. any indebtedness relating to checking or savings accounts (overdrafts, fees,
E. any expenses incurred in the protection or malntenanca of the collateral securing any of such liabilities, loans, and obl!gatlons;
F. any expens.es incurred In the of any indebtedness and/or obligation; ij
G. any letters of credit and/or indebtedness arising out of, or advanced to pay, letters of credit transactions;
H. any indebtedness, however, evidenced, whether by promissory note, bookkeeping entry, electronic transfer, checks, drafts or other
itams, or by any othe-r manner or form; I
l. any other indebtedness of Debtor and/or of the persons or entities set forth In subparagraph A. above to any financial institution
affiliated with InternatiOnal Bancshares Corporation, jointly and/or severally, and in any capacity, whether as borrower, guarantor, or
otherwise, now or hereafter owing, created and/or arising, and regardless of how evidenced or arising;
J. any and all extensions, substitutions and/or renewals of any of the above described Indebtedness;
K. any and all costs incurred by Secured Party to obtain, preserve and enforce this Security Agreement, collect the Indebtedness, and
maintain and preserve the Collateral Including without limitation, all taxes, assessments, attorneys' tees and legal expenses, and
expenses of sale;
L the sale by Debtor and the purchase by Secured Party of Accounts;
M. the sale by Debtor and the purchase by Secured Party of Chattel Paper;.
N. tha sale by Debtor and the purchase by Secured Party ot Fayment Intangibles;
0, the sale by Debtor and the purchase by Secured Party of Promissory Notes; and
P, any of the foregoing that arises after the filing of a petition In bankruptcy by or against Debtor under the Bankruptcy Code, even if
tha obligations do not accrue because of the automatic stay under Bankruptcy Code 362 or otherwise,
To the extent allowed by law, for purposes hereof it Is intended that the Indebtedness Include all of whether evidenced
by notes, open accounts, overdrafts, or otherwise, and whether direct, indirect or contingent: regardless of class, form or purpose and
Including but not limited to, loans tor consumer, agricultural, business of personal purposes,
The foregoing shall under no circumstances be limited to the existence or non-existence ot collateral for such Indebtedness, ot the type of
collateral covered thereby, The Indebtedness does not include amounts owed pursuant to a hom.estead equity Joan.
All"''mont shall be In writing and shall be effective only If delivered In person
SecUred if sent to:
R
addressed to
the beglnnihg
provided, however,
actual no.tlce to Debtor, however given or received, shall always be effective when given or received .. Except as otherwise required by Jaw,
any notice given or made pursuant hereto shall be deemed effectively given on the date of personal delivery or, If millled, on the date such
notice !s deposited in the_ u.s. Mail, If received by Secured Party.
SECTION IV: PERFECTION .OF SECURITY INTERESTS.
1, FJI!ng Of Financing Statement.
(I) Debtor hereby authorizes Secured Party to file a Financing Statement, .an Amended Financing Statement and a Continuation Financing
Statement (collectively to. as the ''FinaAclng describing the Collateral,
(ii) Debtor hereby authorizes Secured Party to file a Financing Statement describing any agricultural liens or other statutory liens held by
Secured Party. .
(lil) Secured Party shall receive prior "to the Closing an official report from the Secretary of. State of each Collateral State, the Chief
Executive Office State, and the Debtor State (each"as defined below) (the Reports") indicating that Secured Party's security
interest is prior -r.o all other securitY IntereSts or other Interests reflected lA the report.
(iv) Secured Party shall receive at any time following the Closing an SQS Report indicating that Secured Party's securitY interest Is prior to
all other security interests or other interests reflected In the report.
2. Possession,
(i) Debtor sha.l! have possession of the Collateral, except where- expressly otherWise provided In this Security Agreement or where Secured
Party chooses to perfect its security interest by possession only, or Jn.addltlon to the flUng of a Financing Statement.
IBC0004 - 05/22/0l
Page 2 of 9
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{ill Where CoJ!ate'ral Is In the possession\ /third partY; Debtor w!!! Join with .Secured Party t ,'tifylng the third partY of Secured Party's
securfty Interest and obtaining a Agreement from the third party that It Is holding the Collateral benefit of Secured Party.
3. Agreements;, will cooperat_e with Secured Party in ob"taining a Control Agreement in form and substance satisfaCtory to
Secured Patty respe.CrtO'Collatera! conaistingot: .
{!) Deposit Accounts,
(!U Investment Property,
(iii) LettarOfCredlt and
(lv) Electronic Chattel Paper.
Marking of Chattel Paper, wlll npt create any C.hatte) Pap-er without placing a legend on ihe Chattel Paper acceptable. to Secured
Party Indicating that Party. has a secvrity In the Chanel Paper,
SECTION V;. D&btor's B&prosent!!!lgn Worrontl!ts end .Aqreemonh
A . General Representations and Werrantles
. Debtor represents, warrants and agrees that:
(1) Debtorhas. full power Qnd authority to enter Into this Security Agreement; this Security Agreement has been duly authorized,
executed and delivered by Debtor. and constitutes the vaf(d and binding obligation ot Debtor enforceable In acoordalice With its
terms. No consent .of third parties, a authorization or filing w!th any governmental Bl.lthority Is r6q1.1lred to be obtained or
performed in with the exec1:1tion, dellvery,.and performance of this Security
{2) All inforrnath:ln supplied end statements made by Debtor in any flnancla_!, credit Or accounting statement or application for credit
prior to, contemporaneously with or to the execution of. this Security Agreement. are and shan be true, correct,
Complete, valid, and genuine,
(:l) . Debtor owns,. or will use the proceeds of any loans by Secured to become the ;wner of the Collateral from any. set-Off,
claim, rSs.trictlon, lien, securitY Interest or encumbrance except this securitY interest and liens for taXes not yet due.
(4) No Financing Statement covering the Collateral or its proceeds ls on file in any public office and Debtor will not permit any
Flnenclng Statement covering any of Qebtor'S Collateral or the proceeds thereof to hereafter ba on file in any public of.fice except as
may be flied pursuant to this Security Agreement,
(5) De"btor shall provide to Secured Party, .upon Secured Perty's request, {I) financial information, Including but not limited to a balance
income statement, statement of cash flow, and such other financial Information as may be requested by Secured Party: Oil
an appraisal of the.Collateral; (Ill) tax receipts; (lv) evidence of insurance, and (v) any other information required by Secured Party in
connection with the Indebtedness or the Collateral,
{6) Debtor will not Use the Collateral or permit the Collateral to be used in violation of statute, ordinance or other law or
Inconsistently wlth the terms of any policy of insurance thereon;. and Debtqr will permit Secured Party and Its agents,
representatives, and employees to examine the Collateral at all reasonable times, and for such purpose, Secured Party may enter
upon. or into any premises the COllateral may be located without being guilty of. and/or held liable for, trespass, Debtor will
to Secured Party upon request aU pertinent Information regarding the Collateral,
{7) The Collateral shall rerrialn In or Control a! all times at Debtor's risk of loss un!ass Secured Party has taken
possession of the Collateral, and be kept at Debtor's address set forth above where Secured Party may Inspect it at any time,
except for Its temporary removal In connection with Its ordinary use or unless Debtor notifies Secured Party in wrltlr'!g an.d Secured
Party C'?nsents"ln writing In advance of Ita removal to another location.
{8)" shall pay prior to delinquency aJI taxes, charges, liens and assessments against the and upon Debtor's failure to
do so, Secured Party Its option, may pay any .of them and shall be the sole judge of the legality or validity thereof and the
amount necessary to discharge the same, Such payment shall become part of the Indebtedness secured by this SecuritY Agreement
and shall be paid to Secured Party by Oi:lbtor Immediately and without demand, with Interest thereon at the maximum rate allowed
by appllce.ble law. ['
(9) Hazard Insurance must be f!Jmished at all.tlmes for the full amount of the Indebtedness with respect to all Collateral.fincluding
coverage for an materials and equipment) against risks of Fire, Windstorm, Hurricane (If the Collateral is w.rlttf;ln 1 00 miles of the
Gulf Coast), Hall and Collapse {Including cost of debris remova!l and such other risks as Secured Party may require, Including
standard extended coverage. Such Insurance policies shall -contain such terms, be In a form, for a period and be written by
companies satisfactory to Secured Party. Federal flood insurance Is also required in those geographic areas that are subject to such
loss, The policy shell also contain a standard mortga.gee's endorsement providing for payment of any loss to Secured Party, AU
110)
(11)
112)
policies of insurafloe shall provide for ten days written minimum cancellation notice to Secured Party,
Evidence of coverage must be a copy of the original policy and loss payable cla1Jse. Certificates or letters of coverage wll! not be
accepted,
Secured Party Is authorized to act as attorney-In-fact for Debtor in obtaining, adjusting, settling, and canceling such ln$Urance and
endorsing any drafts drawn by Insurers of the Collateral, Secured Party may apply any and/or all proceed$ of such insurance, which
may be received by It in payment of the Indebtedness secured thereby, whether such Indebtedness Is currently due or not, Secur"ad
Party reserves the right to purchase single Interest Insurance (which provides only protection for Secured Party) and add the
premium tor such Insurance together with Interest at the loan prematvritv contract rate to the balance of the loan. This premium Is
due upon demand, or may be paid in full at ariy agreed time, The single Interest premium Is .written by a company authorized to
transact business In the State of Texas at lawful rates no.t fixed or approved by the State Board.of Insurance,
Secured Party, in \ts sole discretion an"d without obligation on Secured Party to do so, may advance and. pay sums on behalf and for
the benefit of Debtor f.or costa necessary fqr the protection and preservation of the collateral and other costs that may ba
appropriate, In Secured Party's sole discretion, Including but not limited to Insurance premiums, ad valorem taxes, and attorney's
tees and legal costs and expenses. Any sums which may be so pa!d by Secured Party and all sums paid 1or Insurance premiums, as
aforesaid, including the costs, expenses, and attorn.!ly's fees paid In any suit affecting said Collateral shall bear Interest from the
dates of ,such payments at the to an ccmtract interest rate applied to the unmatured principal balance and shall be palcfCby Debtor to
Secured Party upon demand, and shall be deemed a part of the debt and recovereble as such In al! aspects. A'l'f sum to be
reimbursed shall be secured by this Security Agreement. . r
- - -
Debtor shall, at its own expanse, do, make, procure, execute and deliver all acts, things, writings and assurances as Secured Party
may at any -time request- to protect, assure or enforce Its interests, rights and remedies created by, provided io or from
this Security Agreement.
Debtor shall not lend, rent, lease or otherwise dispose of the Collateral or any interest therein except as aut.horized in this SecuritY
Agreement or In writing by Secure.d Party, and Debtor shall keep the Collateral, including the proceeds thereof, free from unpaid
charges, Including taxes, 11nd frpm liens, encumbrances and security Interests other than that:of Secureq Party,
Oe!;ltor shall sigh and execute alone or with Secured ?arty any Finar9lryg statement or other document or procure any document,
and pay aU connected costs, necessary to protect the security lnterssrunder this Security Agreement against the rights or Interests
of third persons, Debtor shall pay the coats of lien searches and and all fillng fees,. continuation fees, and fees tor
certificates of good standing and other lnformatio.n required by SecUred ,?arty.
IBC0004 06/22/0l
Page 3 of 9
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(14)
(15)
{16)"
117)
(18)
(19)
(20)
(21)
Debtor shall at all times keep tht>:;. C:ollateral and Its proceeds separate and distinct f.:, other property of Debtor and shall ,'keeP
accurate and complete records c.. ") Collateral and its proceeds. Debtor shall prase!'\ ;e Collateral and pay all necessary 'to
do so, including [but not limited ioi feed, rent, storage costs, and expenses of sale.
If Secured Party should 'at any time be of the opinion that the Collateral has or may In or Is otherwise
insufficient to adequately secure the indebtedness, or should Secured Pany deem Itself Insecure as to payment of the Indebtedness,
then Secured Parw may call for additional property tC? be pledged andfor covered by this Agreement satisfactory to Secured Party_.
If any Collateral or proceeds Include obligations of third parties to Debtor, the transactions creating those obligations wlll conform in
all respects to applicable state and federal consumer credit laws,
ln the event Debtor or any other person or persons seeks to enjoin Secured Party from taking any action in connection with the
Indebtedness or the entorcement of Secured Party.' a rights )n the" Collateral, Debtor hereby agrees to glva written notice to the
President of Secured Party, at the address of Secured Party set forth In the first paragraph of this Security Agreement, or such
ottl\lr person or address as Secured Party may designate In writing to Debtor, prior to seeking any such Injunctive relief.
Dejtor shall indemnify and hold harmless Secured Party from and against any and all claims, !osses and liabilities growinQ out of or
respiting from this Security AgrMment (including, without limitation, enforcement of this Sacurity Agreement), except claims,
los!)es or liabilities resulting from the gross negligence or Willful misconduct of Secured Party, Debtor agrees, upon demand, to pay
to Secured Party the amqunt of any and all expenses, Including, but not limited to, the fees and disbursement:J of Its counsel and of
any experts and agents, Which Secured Party may Incur In connection with (a) the preparation, execution, delivery, filing, recording
or administration of.thls Security Agreement or the obtaining of advice from counsel with respect to Its rights and remedies under
this Security Agreement, (b) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon,
any of the Collateral, (c) the exercise ot.enforoement of anY of the rights of Secured Party hereunder,{d) the defense by Secured
Party of any injunction proceeding related to the Indebtedness or the Collateral, or (e) the failure by Debtor to perform or observe
any of the Debtor agreesto pay Interest on any expense or other sums due to Secured Party hereunder (save and
except insurance) that ere not paid when due at a rate per annum eq_ua! to the highest r-ate permitted by law,
As additional security for the Indebtedness, Debtor hereby ass}gns, pledges and grants to Secured Party a security Interest, a lien
and contractual right ot:setoff ln and to all of the money, credits, accounts, securities, certificates and/or other property
now In, or at any time hereafter coming within, the custody or control of Secured Party or any member Bank or branch Bank of
International Bancshares Corporation, whether held In a general or special ilccount or deposit, or for safekeeping or otherwisE!. Every
such security interest and right. of set-off may be exerclsed without deinend or notice to [Yebtor, No security interest or right of set
off shall be deemed to have been waived. by any act or conduct on the part of Secured Party, or any failure tQ exercise such right of
sat"off or to enforce such security interest, or by anydelay In so doing, Every right of set"off end se9urity interest shall coritinue in
full force and effect until suoh rjght of set"off or security Interest is waived or releesed by an instrument In writing
executed by Secured Party. The foregoing Is In addition to and not In lieu of any rights of set-off al!oweq law,
Debtor shall assist Secured Party In complying with the Federal Assigninent of Claims "Act (and any successor statutes) and similar
laws to enable Secured Party to beconie an assignee under such Act and otherwise comPly with such laws, Debtor shell preserve
the liability of a!! account debtors, obligors, and secondary parties whose obllgetlons ere Part of the Collate.ral. Debtor shall notify
th6 Secured Party of -any change occurring in or to the Collateral, or in eiiy fact or circumstances warranted or representad by
Debtor in this .agreement or furnished to Secured Party, or if any Evant of Default occurs,
Debtor will not allow the Collateral to be affixed to real est.ate, except goods Identified herein as 1fxtures.
A!! extended or renewed note(s) will be considered executed on the date of the Original note{s),
{22)" Debtor shall comply with all environmental laws and appliCable to the Collateral end the premises In which the Collateral
Is located and shall notify Secured Party upon receipt of any notice or other information as to any environmental hazards or violation
cf such laws. Secured Party may inspect all premises In which the Collateral Is located and the Collateral as to Its and their.
comp!!ance with environmental law, Debtor Indemnifies and holds harmless Secured Party for any breach of the foregoing and tor all
losses, costs, fines, damages, Including court costs end attorney's fees, Incurred by Secured Party to d.efend itself, or. to protect or
preserve the Collateral against environmental risks, hazards, fl,nes, and other claims relating to the Collateral,
(23) Without providing Secured Party with at least thirty (30} days prior written notice of Debtor's intention to do so, Oebtor, until the
indebtedness IS paid in full, agrees that it will not:
a. in one transaction or a series of related transactions, merge Into or consolidate with any other entity, sell all or substantiaUy all
of its assets, or in any way jeopardize its corporate existeflee,
b. change the state of incorporation,
c. change its corporate name,
d, cHange the address and/or location of Its Chief Executive Office;
e, file a UCC-1 Amendment form, and/or
t, file a UCC-1 Termination form.
(241 Debtor has the risk of loss of the Collateral.
(26) Secured Party has no dutv to collect any income. accruing on the Collateral o_r to preserve any rights relating to the Collateral.
B. Special Representations Warranties."
Debtor represents, werre_nts and agrees that:
(1) It the Collateral includes Inventory: . .
(a) Debtor will immediately notify Secured Party of the disposition of any inventory and at Debtor's expense wUI either assign to
Secured Party a first-priority security Interest. In any resulting account, chattel paper, or Instrument or deliver to Secured Party
, cas!i In the amouAt of the sale pi-Ice, Debtor wl!l not sal!, lease, or otherwise .dispose of any Collateral except in the ordinary
cowse at without the prior written consent of secured Party,
(b) Until de"fault Debtcilr may in the ordinary course of business, sell, lease or furnish under contract ot"ser.vice any of the Inventory
normally held by Debtor for such purpose, however; tl"\at such use of :the lnv.entory shall not be Inconsistent with any
other provisions of "this Security" Agreement or with the terms or conditions of any policies of insurance thereon, A sale In the
ordinary course of' business does not Include a transfer In partial or"tota! satisfaGtlon of a tl.ebt.
{2) If the Collateral includes accounts:
131
{a) Each account In the Collateral will represent the legally enforceable obligation of third parties end will not be evidenced by
any instrument -or chatter paper,
(b) The officawhere Debtor keeps its records" concerning accOunts, If any, is the address of Debtor set forth at the beginning of
this Security Agreement:
If the Cot!ateral includes instruments, chattel paper or documents:
Ia) By delivering a co"py" ot this security Agreement to the broker, seller, or other person in possession of Collateral that Is chattel
paper of document, Security Party wt!l effectively notify that perSon of-Secured PartY's Interest In the Collateral. Delivery of the
copy of the Agreement will also ;;:onstltUte Debtor's Instruction to de!lver to Secured Party certificates or other
evidence of the Collateral as soon as it Is available, Debtor wi!!lmniedlately d!!llv-er to Secura.d Party all chattel paper and
documents that are Co!lateraf In Debtor's possession, lf that Collateral Is hereafter acquired, Debtor will deliver It to Secured
Party Immediately following acquisition end e!t.har erndorse It to Sectited Pa"rty's order or give PartY. appropriate
executed. powers. If any Instruments, chattel paper, _.money or monies, or. documents ere,.at any time or .times, included In the
IBC0004 * 06/22/01
Page 4 of 9
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collateral, whether as pro(.. or otherwise, Debtor wil! promptly deliver d to Secured.Party upon the receipt thereof
by Debtor, and in 11ny evefit promptly upon demand therefore by Secured Par'ty. If necessary, all Collateralwm either be
endorsed to Secured Party'S order or accompanied by appropriate executed powers.
!b) By means satisfactory to Secured Party, Debtor has perfected or w!U perfect a security interest in goods covered by chattel
paper, If anY, In
.. .
{4) !I the Collateral includes property covered by a Certificate of Title; If any certificate of title or similar document Is, at any time and
pursuant to the laws of any juriSdiCtion, issued or outsta.nding with respect to the qollatere! or any part thereof, Debtor will promptly
advise Secured .Party thereof, and Debtor w!IJ promptly cause the Interest of Secured Party to be properly noted thereon, and If any
certificate of title or similar document-is so issueo;i o.r at the time this Security Agreement Is executed by or on behalf of
Debtor; then Debtor shall have caused the Interest of Secured Party so to have been properly noted at or before the time of such
execution; and Debtor will further promptly deliver to Secured Party ;my such certificate of titl!i: or slmller document issued or .
outstanding at any tlm6 wh:h resp8ct to Su.ch Collateral,
(5) If the Collateral is or may become fixtures on real property described herein: This Security Agreement, upon being flied for record in
the real property records of the county wherein such fixtures are situated, shall operate also as statement filed as a fixture
;filing in accordance with Section S.402(e) of the Texas Business end Commerce Code upon such of the Collateral which Is or may
become fixtures.
{6) Debtor has rights in or the power to transfer the Collateral and Its title to the Collateral Is free of all adverse claims, liens, security
interests and restrictions on transfer or pledge except as created by this Security Agreement.
(7) All collateral consisting of goods Is located solely In the states and/or states previously designated and warranted by Debtor to
Secured Party,
(8) Debtor's:
II) chief executive office is located In the state previously designated and warranted by Debtor to Secured Party;
(li) state of IncOrporation is the state previously designated and warranted by Debtor to Secured Party; and
(ill) exact legal name Is as set fOrth In the first paragraph "Of this Security Agreement ,
SECTION VI: EVENTS OF-DEFAULT,
Debtor shall be in default under this Security Agreement upon the happening of any of the following events or conditions {herein called an
"Event of Default");
{1)
12)
{3)
14)
15)
16)
17)
ISl
19)
{\0)
The fal!ure by Debtor or any ether liable partY to pay when due any of the Indebtedness either principal or interest, or any other sum due
under the terms of any Instrument evidencing the lndeb;adness.
Default by Debtor In the punctual performance of any of the obl!gations, covenants, terms or provisions contained or referred to In this
Sscurl.ty Agreement. . , . . ' .
Any warranty, representa'tion, or statement contained In this Security Agreement or made or furnished to Secured Party by or on behalf
of Debtor or any other person or party In connection with this SecuritY Agreement or to Induce Secured Party to.make the loans
(described in Section llll"proves to have been false In any respect when made or furnished.
Loss,theft, substantial damage, destruction, sale /except as authorized In this Security Agreement) or encumbrance to or of any of the
Collateral, or the making of any levy, seizure or attachment thereof or thereon ..
Debtor's death; dissolution, termination of existence, Insolvency or business failure; the appointment of a receiver of all or any part of
the propertY of Debtor: an assignment for the benefit of creditors by Debtor, the calling of a meeting of creditors of Debtor, or the
commencement of any 'proceeding under any bankruptcy ot Insolvency laws by or against Debtor or any guarantor. surety or endorser
for Debtor; or the occurrence of any of such events described In this part (5) as. to any person or party liable for the payment of the
obligations, or any portion thereof,
Any sta.tement of the f!nan6ial condition of Debtor or of any maker, guarantor, surety or endorser of any of the Indebtedness proves to
be false.
!
The Collateral becomes, In the judgment of Secured Party, unsatisfactory or insufficient In character or value.
Any maker, guarantor, surety or endorser under or with respect to the indebtedness defaults In any ob!lgatlon or liabill_ty to Secured
Party,
Ttie occurrence 9f any environmentally h.azardouS .spill, orother similar event adversely the Collateral cr the
premises in which the Collateral Is locatad,.whether such ev:ent occurs on such premises or on other premises .
. Debtor, or any of tliem, ;r any .guara.ntor, fails to timely deliver. a.ny .and all financial st8ternents, Income tax cash flow
Information, balance sheets, accounts receivable reports, or any other business, tax or financial information requested by Secured
Party,
SECTION VII: PARTY'S RIGHTS AND. REMEDIES.
A. General.
Secured Party may exercise the following rights and rern.edles e.lther before or after an Even( of Default;
{1) . Secured Partv may take of any prOceeds. of. the Ccllateral,
.12)
13)
Secured Party may release any Collateral In Sacu.red Party's possession to any Debtor, temp_orerlly or oth!!rwise,
Secured Party may take control of any funds generated by the Collateral, such as refunds from -end proceeds of insUrance, and reduce
any part of the IndebtednesS accordingly or permit Debtor to use such funds to repair or replace damaged or destroyed Collateral
covered by Insurance, '
(4) Secured Party may request Debtor from time to time, In Securei.Parly's discretion to take any actlon .and "to. execute lnstrumerit
which Secured PartY may deem necessary or advisable to accomp!lsh the purposes of this SecuritY Agreement without
limitation, {a) to' ask, demand, qollect, sue for, recover, compound, receive end give acquittance and receipts for mon;rss due and to
become due under or in respect of any Collateral; {b) to receive, endorse and collect any drafts or other Instruments, documents and
chattel paper In connection with the preceding actions; (c) to file any or take any action or Institute any procf:!edings which
Secured Party may deem necessary or desirable for collection of any of the Collateral or otherwise to enforce Its W!th respect to
any of the Collateral, and {Cil to. complete and sign on behalf of Debtor one or more financing statements pertaining to the Collateral.
and file the same In an appropriate locatlQn. The powers con'ferred on Secured Party hereunder are solelY to protect its Interest In the
Couateral and shall not impose any duty upon Secured Party to exercise any such powers. Debtor's appoir.Jtment .of Secured Party as
15)
Debtor's agent is CO\Jpled with an Interest and will survive any disability of Debtor,
This Security Agreement; Secured Party's rights hereunder the Indebtedness secured may be assigned In whole and in
part from time to time; and In any such case Secured Party shan be fully discharged from all responsl.blnty with respect to the Collateral
so assigned and the assignee shall be entitled to all of the riglits, privileges and remediea granted in this Security Agreement to Secured
Party to the extent the same are assigned, and Debtor will assert no claim or defenses he mey. have against Secured Party against the
assignee, except those In this Security Agreement. ln addition, Debtor waives and wtu not assert against any claims, defenses
or set-offs which Debtor could assert against Secured Party except defenses which cannot be waived.
IBC0004 - 06/22/0l
Page S of '9
(6)
(8)
(9)
(10)
(11)
(12)
(13)
(15)
Secured Partymay enter upon Deb, ::'D premis.es at any reasonable time to inspect U .. >Ollatera! and
to the coHateraf, a.nd Debtof shall assist the Secured Party In making any such ins"pection.
'.
' '
Debtor's books and recordS '
Secured Party may notify the account debtors or obligors of any accounts, chattel paper, negotiable Instruments or other evidence of
Indebtedness remitted by Debtor to Secured. Party as proceeds to pay Secured Party directly. Secured Party may contact account
debtors dlrBctly to verify information furnished by Debtor.
Secure!=! Party may require additional Collateral or reject as unsatisfactory any property hereafter offered by Debtor as Collateral.
Secured Party may designate, from time to time, a certain percentage of the Collateral as the loan value and require Debtor to maintain
the Indebtedness at or below such percentage.
Secured Party niay present tor conversion to cash any Instrument or investment security or a combination thereof. But Secured Party
shall n&\ have any dutV to presanttor conversion.any Instrument of Collateral In Its possession unless It shall have received trom Debtor
detailed written instructions to that effect at a time reasonably far In advance ot the final conversion date to make such conversion
.possll:il,.
The rights and powers- of Secured Party will be In addition to, and not a limitation upon, any rights and powers of Secured
Party giYen by Jaw, elsewhere In this Security Agreement, or otherwise.
Secured Party has no obllgation to attempt to satisfy the Obligations by collecting them from any other person Uable for them and
Secured Party may release, inodlfy or waive any collateral provided by any other person to secure any of the Obligations, all without
affecting Secured Party's rights against Debtor. Debtor waives. any right it may have to require Secured Party to pursue any third
person tor any of the Obligations.
Secured Party-rriay comply with any applicable state or federal law. requirements in connection with a 'disposition of the Collateral and
compl!anoe will not be considered !idverse!y to affect the commercial reasonableness of any.sa!e of th.e Collateral.
If Secured Party 'sells any of the Collateral upon credit, Debtorwl!l be credited only with payments actually made by the purchaser,
received by Secured Party and applied to the indebtedoess of the Purchaser. In the event the purchaser fall-s to pay tor the Colletera!,
Secured Party may resell the Collateral Debtor shall be credited with the proceeds of the sale.
Secured Party have no obligation to marshall any assets In favor of Debtor, or against or In payment of:
(i) the Note,
lill any of the other Obl!gations, or
(Iii) i:my other obllgation owed to Secured Party by Debtor or any other person.
(16) This Security Agreement shall bind and shall inure to the benefit of the heirs, legatees, executors, administrators, successors and
assigns of Secured Party and shall bind all persons who become bound as a debtor to this Security Agreement.
(17) Secured Party does Mt consent to any aSsignment by Debtor ex_oept as expressly provided In this Security Agreement.
B. Remedies In Event o1 Default
During the existence of any Event of Default, or In the event Secured Party diems Itself Insecure In the payment of the Indebtedness, secured
Party may declare the unpaid principal and unpaid and accrued Interest of the Indebtedness Immediately l:lue In whole- or part, enforce the
Indebtedness, and/Or exercise any rights and remedies granted by the Texas Business end CommerCial Code or by this Se-curity Agreement,
Including the following:
( 1) require Debtor to deliver to Secured Party all books and records relating to the COllateral;
(2] require Debtor to assemble the Collateral and make It available to Secured Party at a place reasonably convenient to both
(3) take possession of any of the Collateral and tor this purpose enter any premises where it Is located If this can be done without breach
ot the peace and will npt be guilty of, and/or held liable for, trespass;
!4) sell, lease, or otherwise dispose of any of the Collateral in accord with the rights, remedies, and duties of a Saoured Party under
Chapters 2 and 9 of the Texas Business And Commerce Code after giving notice as required by those chapters; unless the Collateral
threatens to decline rapidly In value, Is perishable, or would typically be sold on a recognized market, Secured Petty will give Debtor
reasonable notice of any public sale of the Collateral or of a time after which It may be otherwise disposed of without further notice to
Debtor; in this event, notiCe will- be deemed reasohable If it is melled, postage prepaid, to Debtor at tha address specified In this
agreement at least ten days before any public sale or ten days before the time wherhhe Collateral may be otherwise disposed of
without further notice to Debtor. Debtor authorizes Secured Party to disclaim or modlf't any and all warranties set forth In Section
9.010(d) and stipulates that S!Jch a disclaimer and/or modification. will not render the sale commercially unreasonB.ble,
(5) surrender any Insurance policies covering the Collateral and receive the unearned premium;
(6) apply any proceeds from disposition of the Collateral after default in the manner specified In Chapter 9 of the Texas Business And
Commerce Code, including payment of Secured Party's reasonable attorney's fees and court expensea:
{7) if disposition of the Collateral !eaves the Indebtedness unsatisfied, collect the deficienCy from all liable parties, Expenses of retaking,
holding, preparing for sale, selling or the !Ike shell include Secured Party's reasonable attorney's fees and legal costs and/Or expenses,
and Debtor agrees to pay such costs, expenses, and fees , plus interest thereon at the maXimum rate allowed by applicable law;
(8J Secured PartY may retain aU or part of the Collateral In full and/orpartlal satisfaction of the Indebtedness pursuant to Section g,620 of
the Business And Commerce Code;
(9) Secured PartY may, without demand or notJce of any kind, appropriate and apply toward the payment of sny sums then owing to
Secured Party and In such order of application as the Secured Party may from time to time elect, any property, balances, credits,
dSposits, accounts or monit;!S of Debtor which tor any purpose is In tbe possession or control of the Secured Party or any member Bank,
branch Bank or other depository Institution of International Corporation; and/or
{10) Secured Party may remedy any .default without waiving the default remedied and may waive any default without waiving any other
prior or subsequent default.
SECTION Vlll: ADDITIONAL AGREEMENT.$.
\1 J All nOtices and other communiCations to Secured Party hereunder or !ri connection- herewith shall be deemed to have been given when
received by Secured Party In writing at the address first shown heralnabove.Any notice or demand or other communication to Debtor
hereunder or in connection herewith may be given and shell conclusive!y'be deemed end considered to have been given end received
upon the deposit thel'eof in writing In the United States Mail, duly stamped and addreesed to Debtor either at the street address, the
first shown hereinabove, or at the mailing address, If any, given by and/or tor Debtor at the beginning of this agreement (or at such
other address as may nave been designated most recently ln writit'lg by Debtor to Secured Party!; Provided, howeYer, actual notice to
Debtpr, however given shaH always be- effective when given or received.
(2) A copy ot this SecuritY Agreement or any financing statement covering the Collateral is sufficient !J.r:ld may be flied as a financing
statement. Information concerning this security interest may be obtained at the offlce.ot Secured Party shown above.
. . J:BC0004 ; 05/22/0l
Page6 of 9
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(3) . Th;s only be_. or limited by an agre.ement In
{4) This security interest shall neither affe0t nor be any other-security ;or. any of the Indebtedness. Neither extensions of any.of
the lnde!-tedness nor;_releeses of any of the Collateral shell affect the validity of this security interest wltb reference to any third party,
AdditiOnally, foreclosure of this secUrity interest bY lawSuit does not limit Secured Party's remedies, Including the rraht to sell 'the
Collateral undSr the tafms of thie, Security Agreement. Secured Party shall have the right to exercise -all remedies at the same or
different tlme:i and no remedy aha!!- be a to any other. Secured Party "Shall have all rightS end remedi'Ss granted by lilw or
otherwise fn addition to those provided .In this Security Agreement.
{5) Secured Party may remedy any default without waiving it. No delay by Secured Party In exercising Its rights or partially exercising Its
rights or remedies shall waive further. exercise of those remedies or rights. The failUre of Secured Party to exercise any remedies or
rights does not waive .aubsequent ex6rcise of those remedies or rlghts. Any waiver by Secured Party 9f any default Shall not walVe any
further default. Secured Party may remedy any default without waiving it. Secured Party's waiver of any. right In this Security
Agre-ement or any default Is binding only If In writing,
(6) Debtor and Secured P-arty Intend that the '\ndebte.dness shall be In compliance with applicable usury laws. If at any time lr:lterest
contracted for, charged or received under any lndebtadneS!! secured by this Security Agreement or otherwise. In connection With this
transaction would be usurious under applicable lew,' then regardless of the provisions of this Security Agreement or any other
documents or Instruments evidencing, secu(tng or otherwise executed In connection with any Indebtedness secured by this SecuritY
. Agreement or any action or event {including, without limitation, prepayment of principal under the Note or acceleration of maturity by
Secured Party) which may occur with' respect to the Note, It Is agreed that all sums determined to be usurious shell be Immediately
credited by Secur.ed Party to Debtor as B payment of principal under the Note or It the Note has already been .paid, Immediately
refunded to Debtor. All compenSation which constitutes Interest under applicable law In connection with any Indebtedness secured by
this Security Agreement shall be amortized, prorated, allocated, and spread over the full pario.d of time any Indebtedness is owed by
Debtor, to the greatest.extent permissible without exceeding the applicable maximum rate allowed by applicable law In effect from time
to time during such period
(7) Secured Party may perform any obligation which Debtor fails to perform and Debtor _agrees on demand to reimburse Secured Party
immediately for any sums so paid by Secured Party, including attorneys' fees and other legal expenses, plus interest on those sums
from the date&-of payment at the rate stated in the Note for matured, unpaid amounts, Any sum to be reimbursed shall be secured by
this SecurityAgreer.nent. !See Section IV, (9) for-Insurance reimbursements).
lSI This Security Agreement Is being executed and delivered and .is lntended:tc be-performed in the State of' Texas and shall be construed"
and enforced ln accordance with the laws of the State of Texas, except to the extent that the Code provides for the appliCation cf the
law of the Debtor States, When the context requires, singular nouns and pronouns Include the plural, The rights of Secured Party
under this Security Agreement shell lriure -to the benefit of Its successors and assigns. Any assignmerit of part of the Indebtedness and
delivery by Secured Party of any part Ot the Collateral will fully discharge Secured Party from any and a!! respcnsib!!lty for that portion
of the Collateral. Debtor's Indebtedness under this Security Agreement -shell bind Debtor's personal representatives; successors and
assighs. If Debtor Is more than one, all their representatives, warranties and agreements are joint and several. If any part o.f this
Security Agreement is unenforceable, the unenforceabi!ity of such provision will not affect the enforceability of any other provision
hereof and all other provisions wl!! constitute valid provisions.
SECTION IX: ARBITRATION THE,P.ARTIES FURTHER AGREE AS FOI.LOWS:
(e) ANY AND ALL CONTROVERSIES BETWEEN :THE PARTIES SHALL. BE RESOLVED BY ARBITRATION IN ACCORDANCE WITH THE
COMMERCIAl. ARBITRATION RUt.ES OF T-HE AMERICAN ARBITRATION ASSOCI_ATION IN EFFECT AT THE TIME OF FILING; UNI.ESS THE
COMMERCIAL ARBITRAT)ON RUl-ES CONFUCT Wll'H Tt-IIS PROVISION, AND IN SUCH EVENT THE TERMS OF THIS PROVISION SHAt.t.
CONTROl; TO THE EXTENT' OF THE CONFI.l.CT, ANY ARBITRATION HEREUNDER SHAI.I. BE BEFORE AT LEAST THREE NEUTRAL
ARBITRATORS ASSOCIAT-ED WITH .TiiE AMERICAN ARBITRATION ASSOCIATION ANI;l SEl,:ECTED IN ACCORDANCE WITH THE COMMERCIAl.
ARBITRATION RULES OF Tl-lEAMERICANARBITRATION ASSO.CIAT!ON, FAILURE OF ANY ARBITRATOR TO DISCI.OSE ALL FP,CTS. WHICH
MIGHT TO AN OBJECTIVE OBSEfiVER CREATE A REASONABLE IMPRESSION OF THE ARBITRATOR'S PARTIALITY, AND!OR MATERIAl.
ERRORS OF LAW SHAI.L BE GROUNDS [IN ADDITION 'fO At.L. OTHE.RSJ FOR VACATUR OF AN AWARD RENDERED PURSUANT TO THIS
AGREEMENT.

SPECIFY THE FACTUAl. AND LEGAL BASES FOR THE AWARD, UPON THE REQUEST OF ANY PARTY, THE AWARD SHALL INCI.UDE
OF FACT AND CONCLUSIONS OF 'LAW,
(cl ARBITRABLE DISPUTES INCLUDE Ar-N AND ALL CONTROVERSIES OR CLAIMS BETWEEN THE PARTIES OF WHATEVER TYPE OR
MANNER, INCLUDING WITHOUT !.IMITATION, ANY C.LAIM ARISING OUT OF OR RELATING TO THIS .AGREEMENT, ALL PAST, PRESENT
AND!OR FUTURE CRED.IT FAC/1./TIES AND/OR A'GAEEf'IIENTS INVOLVINC? THE PARTIES, ANY TRANSACTIONS BETwEEN OR INVOLVING THE
PART!E.S, AND/OR ANY ASPECT OF ANY PAST OR PRESENT RELATIONSHIP OF THE PART-IES, WHETHER BANKING OR OTHERWISE,
SPECIFICALLY INCLUDING ANY ALLEGED TORT COMMITTED' BY ANY PARTY, .
(d) THE PARTIES SHALl. ALLOW AND PARTICIPATE IN DISCOVERY IN ACCORDANCE WITH THE FEDERAL RULES OF CIVIL PROCEDURE
FOR A PERIOD OF ONE HUNDRED TWENTY {120) DAYs AF.TER THE FILING OF THE ORIGINAL RESPONSIVE PLEADING. DISCOVERY MAY
CONTINUE THEREAFTER AS AGREED BY TH!: PARTIES OR AS ALI.OWED BY THE ARBITRATORS. UNRESOLVED DISCOVERY DISPUTES
SHALL BE BROUGHT TO THE ATTENTION OF THE ARBITRATORS BY WRITTEN MOTION FOR PROPER DISPOSITION, INCLUDING RULING ON
ANY ASSERTED OBJECTIONS, PRIVILEGES, AND PROTECTIVE ORDER REQUESTS AND AWARDING REASONABLE ATTORNEY'S FEES TO THE
PREVAIL.ING PARTY.
A
ARBITF\I;TOAS, THE AMERICAN ARBITRATION ASSOCIATION SHALL CONDUCT AN IN PERSON ADMINISTRATIVE CONF!;:RENCE WITH THE
PARTIES AND THEIR FOR THE f9LLOWING FOR SUCH ADI?l-r:IONAI. PURPOSES AS T,HE PARTIES _OR THE
AMERICAN.AABITRATION ASSOCIATION MAY DEEM APPROPRIATE, (A) TO OBTAIN ADDITIONAI.INFORMATJON-ABOUT THE NATURE AND
MAGNITUDE OF THE DISPUTE AND THE ANTICIPATED LENGTH OF HEARINGS AND SCHEDULING; (8) TO DISCUSS THE VIEW OF THE
PARTIES ABOUT ANY TECHNIC.AL AND/OR OTHER SPECIAl. QUAUFICATJQNS OF THE AR6!TRATO.RS; AND (C) TO coNSIDER, WHETHER
MEDIATION OR OTHER METHbDS OF DISPUTE RESOLUTION MIGHT BE APPROPRIATE. AND (2) AS PROMPT!. Y AS PFiACT!CASt.E AFTER THE
SEI.ECTION OF.THE ARBITRATORS, A PRELIMINARY HEARING SHALL BE HELD AMONG THE PARTIES, THEIR AND THE
ARBITRATORS. WITH THE AGREEMENT OF THE ARBITRATORS AND THE PARTIES, THE PRELIMINARY HEARING MAY BE <foNDUCTED BY
TELEPHONE CONFERENCE CAL.L RATHER THAN IN PERSON. AT THE PRELIMINARY HEARING THE MATTERS THAT MAY BE CONSIDERED
SHALL INCI.UDE, WITHOUT !.IMITATION, A PREHEARING SCHEDULING ORDER ADDRESSING (A) EACH PARTY'S DUTY
11
TO SUBMIT A
DETAILED STATEMENT OF CLAIM.S,'DAMAGES AND/OR DEFENSES, A STATEMENT OF THE ISSUES ASSERTED BY EACH PARTY AND ANY
LEGAl. AUTHORITIES THE PARTI(S MA WISH TO BRING TO THE ATTENTION OF THE ARBITRATORS: (Bl RESPONSES AND/OR REPI.IES TO
THE PLEADINGS FILED IN COMPLIANCE WITH SUBPART 2(A); {C) STIPULATIONS REGARDING ANY UNCONTESTED FACTS; (D) EXCHANGE
AND PREMARKING OF AI.L DOCUMENTS WHICH EACH PARTY BELIEVES MAY BE OFFERED AT THE FINAL ARBITRATION HEARING; IE) THE
IDENTIFICATION AND AVAII.ABII.ITY OF WITNESSES, INCLUDING EXPERTS, AND SUCH ADDITIONAL MATTERS REGARDING WITNESSES
INCI.UDING THEIR BIOGRAPHIES AND A SHORT SUMMARY OF THEIR EXPECTED TESTIMONY, (F) WHETHER A STENOGRAPHIC OR OTHER
OFFICIAl. RECORD OF THE PROCEEDINGS SHALl. BE MAINTAINED: AND !Gl THE POSSIBILITY OF UTILIZING MEDIATION OR OTHER
ALTERNATIVE METHODS OF DISPUTE RESOt.UTION.
(f) F.OR PURPO.SES OF THIS PROVISION, .. THE MEANS DEBTOR AND SECURED PARTY, AND EACH AND ALL PERSONS AND
ENTITIES SIGNING THIS AGREEMENT O.R ANY OTHER AGREEMENTS BETWEEN OR AMONG ANY OF THE PARTIES AS PART OF THIS
TRANSACTION, "THE PARTIES" SHAI.L ALSO INCI.UDE INDIVIDUAL PARTNERS, AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
IBC0004 - 06/22/0l
Page 7 of9
,
ANDfOR REPRESENTATIVES OF ANY PAP":'' TO SUCH DOCUMENTS, AND SHALL INCLUor 'lY OTHER OWNER AND HOLDER OF ;rHlS.
AGREEMENT.
(g) THE PARTIES SHALL HAVE THE RIGHT TO INVOKE sELF_. HELP REMEDIES (SUCH AS SETOFF, NOTIFICATION OF ACCOUNT DEBTORS,
SEIZURE Af\ID/OR FORECLOSURE OF COLLATERAL, AND NONJUDICIAL SALE OF PROPERTY AND REAL PROPERTY COLlATERAL)
BEFORE. -DURING OR AFTER ANY .ARBITRATION AND/OR REQUEST ANCILLARY OR PROVISIONAL JUDICIAL REMEDIES (SUCH AS
GARNISHMENT, ATTACHMENT, SPECIFIC PERFORMANCE, RECEIVER, INJUNCTION. OR' RESTRAINING ORDER, AND SEQUESTRATION)
BEFORE OR AFTER ANY THE PARTIES NEED NOT AWAIT THE OUTCOME OF THE ARBITRATION BEFORE USING SELFHELP
REMEDIES. USE. OF SELFHELP OR ANCILLARY AND/OR PROVISIONAL JUDICIAL REMEDIES SHALL NOT OPERATE AS A WAIVER OF EITHER
PARTY'S RIGHT TO COMPEL ARBITRATION. ANY ANCILLARY OR PROVISIONAL REMEDY WHICH WOULD BE AVAILABLE FROM A COURT AT
LAW SHALL BE AVAILABLE FROM THE ARBITR.ATORS, .
.lhl THE PARTIES AGREE THAT ANY ACTION REGARDING ANY CONTROVERSY BETWEEN THE PARTIFS. SHALL EITHER BE BROUGHT BY
ARBITRATION, AS DESCRIBED HEREIN, OR BY JUDICIAL PROCEEDINGS. BUT SHALL NOT BE PURSUED SIMULTANEOUSLY IN DIFFERENT OR
ALTERNATIV!I FORMS. A TIMELY, WRITTEN NOTICE OF INTENT TO ARBITRATE PURSUANT TO THIS AGREEMENT STAYS AND/OR ABATES
ANY AND ALL ACTION IN A TRIAL COURT, SAVE AND EXCEPT A HEARING ON A MOTiON TO COMPEl ARBITRATION AND/OR TliE ENTRY
OF AN COMPELLING ARBITRATION AND STAYING AND/OR ABATING THE LITIGATION PENDING T.HE FILING OF THE FINAL AWARD
OF THE ARBtrRATORS. ALL REASONABLE AND NECESSARY ATTORNEY'S FEES AND ALL !RAVEL COSTS SHALL BE AWARDED TO THE
PREVAILING ;PARTY ON ANY MOTION TO COMPEL ARBITRATION AND MUST BE PAID TO SUCH PARTY WITHIN TEN (101 DAYS OF THE
SIGNING OF THE ORDER COMPELLING ARBITRATION. . .
(iJ ANY AGGRIEVED PARTY SHALL SERVE A WRITTEN NOTICE OF INTENT :1'0 ARBITRATE TO ANY AND ALL OPPOSING PARTIES WITHIN
360 DAYS AFTER DISPUT-E HAS ARISEN. A DISPUTE IS" DEFINED TO.HAVE ARISEN ONLY UPON RECEIPT OF SERVICE OF.JUDICIAL
PROCESS, INCLUDING SERVICE OF A COUNTERCLAIM, FAILURE TO SERVE A WRITTEN NOTICE OF INTENT 1"0 ARBITRATE WITHIN THE TIME
SPECIF!Eb ABOVE SHALL BE DEEMED A WAIVER .OF THE AGGRIEVED PARTY'S RIGHT TO COMPEL ARBITRATION OF SUCH CLAIM. THE
ISSUE OF WAIVER PURSUANT T01THISAGREE"MENT IS AN ARBITRABLE DISPUTE.
(Jl ACTIVE PARTICIPATION IN PENDING LITIGATION DURING THE 360 DAY NOTICE PERIOD, WHETHER AS PLAINTIFFOR DEFENDANT, IS
NOT A WAIVER OF THE RIGHT TO COMPEL ARBITRATION, ALL DISCOVERY OBTAINED IN THE PENDING LITIGATION MAY BE IN ANY
SUBSEQUENT ARBITRATION PROCEEDING, . .
(k) THE PARTIES FURTHER AGREE THAT (!) NO ARBITRATION PROCEEDING SHALL .BE CERTIFIED AS A CLASS ACTION. OR
PROCEED AS A CLASS ACTION, OR ON A BASIS INVOLVING CLAIMS BROUGHT IN A PURPORTED REPRESENTATIVE CAPACITY ON BEHALF
OF THE GENERAL PUBLIC, OTHER CUSTOMERS OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY SITUATED AND {II) NO ARBITRATION
PROCEEDING HEREUNDER SI:IALL BE CONSOLIDATED WITH, OR JOINED IN .A:NY WAY WITH, ANY OTHER ARBITRATION PROCEEDING, .
II) ANY SELECTED S.HALL KNOWLEDGEABLE IN THE SUBJECT MATTEA OF THE DISPUTE. EACH OF THE PARTIES SHALL
PAY AN EQUAL SHARE OF THE ARBITRATION COSTS, FEES, EXPENSES; AND OF THJ; ARBITRATORS' FEES, COSTS AND EXPENSES,
lml ALL STATUTES OF LIMITATIONS WHICH WOULD OTHERWISE BE APPLICABLE SHALL APPLY TO ANY AND ALL CLAIMS ASSERTED
IN ANY ARBITRATION PROCEEDING HEREUNDER AND THE COMMENCEMENT 6F ARBITRATION PJ:!OCEEDING TOLLS SUCH STATUTES
OFLIM!TATJONS.
(nl IN ANY ARBITRATION PROCEEDING SUBJECT TO THIS PROVISION, THE ARBITRATORS, OR MAJORITY OF THEM, ARE SPECIFICALLY
EMPOWERED TO DECIDE \BY DOCUMENTS ONLY, OR WITH A HEARING, AT THE ARBITRATORS' SOLE PRE-HEARING MOTIONS
WHICH ARE SUBSTANTIALLY SIMILAR TO PRE-HEARING MOTIONS TO DISMISS AND MOTIONS FOR SUMMARY ADJUDICATION.
(ol THIS ARBITRATION PROV.l$10N SHALL SURVIVE ANY TERMINATION, AMENDMENT, OR EXPIRATION OF THE AGREEMENT IN WHICH
THIS PROVISION IS CONTAINED, UNLESS ALL OF THE PARTIES OTHERWISE EXPRESSLY AGREE IN WRITING,
(p) THE "PARTIES ACKNOWLEDGE THAT THIS AGREEMENT EVIDENCES A TRANSACTION INVOLVING INTERSTATE COMMERCE. THE
FEDERAl; ARBITRATIOt>j ACT SHALL GOVERN THE INTERPRETATION, ENFORCEMENT, AND PROCEEDINGlS PURSUANT TO THE ARBITRATION
CLAUSE OF THIS AGREEMEN-T. . . .
\q) THE ARBITRATORS, OR A MAJORITY OF THEM, SHALt AWARD ATTORNEY'S FEES AND COSTS iO THE PREVAILING PARTY
PURSUANT TO THE TERMS OF THIS AGREEMENT. .
(r) NEITHER THE PARTIES NdR THE ARBITRATORS MAY DISCLOSE THE EXISTENCE, CONTENT, OR RESULTS OF ANY ARBITRATION
HEREUNDER WITHOUT PRIOR WRITTEN CONSENT OF ALL PARTIES AND/OR COURT ORDER.
{s) VENUE OF ANY ARBITRATION PROCEEDING HEREUNDER SHALL BE IN !ll!:XAl!. COUNTY, TEXAS.
SECTION X. Miscellaneous, . .
\a) Set:urirv Interest Absq!tJte,AJI rights of the secured Party and the securitY interests hereunder shall be absolute and unconditional Irrespective
. .
(i) any change in the tlme; manner, amount or place of payment of,- or in any oth.er term of. an or any of the Indebtedness, or any other
amendment or waiver of or any consent to any departure from the Promissory Note or any otherLoan Document;
!iil any exchange or release or nonperfection of all or any part of the Collateral or any other .collaterJi!l, or any release from, amendment to,
waiverof or consent to departure from any guaranty, for all or any, of the IndebtednesS; oi"
(ill) to th.E! fullest exta"nt permitted by law, any other circumstances which might oth"arWJse constitute a defense aVailable to, or a diScharge of
the _Debtor or a third party pledgor. .
(b) "lndemn!f!c.etion, The Debtor agrees to Indemnify the Secured Party end hold the Secured Party hermless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, Judgments, suits, costs, expenses or disbursements of any kind of nature whatsoever
which may b(! Imposed on, incurred by, or against the Secured Pilrtyin any way_ relath1g, In any way arising out of or In connection with
this SeCurity Agre.emant, the Documents or the transactions corit!irriplated h'erebY or thereby other than thoSe arising out of "the Secured
Party's breach, default, negligence or willful misconduct in Its obligations under this SeoLiriW Agreement. or the' Loan Documents. Without
!lmltr.tion of the foregoing, the Debtor will r81mburse the Secured Pi:lrty for all expenses {lncluding expenseS for legal "services of every kind) of, or
Incidental to, "the negotiation of, entering lnio and &nforcement of any of the pro'>(lslons "hereof and of the lndebtedriess, and any actual or
attempted sakl, leaSe or other disposition of, and r.ny exchange, enforcem"ent, collection, borhpromlse or setf:ll!ment of any of the Collateral and
or the rights and claims of the" Secured Party in res.pect. thereof, and for the care of the Collai6tftJ aL1d 'defending or asserting
the rights and claims of the Party In rBspect thereof, by litigation or otherwise;. including expanse "of irisurilnce,-"and all such ei<Piinses shill!
be the D.ebtor's lhdebtedness, .
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IBC:000,4 - 06/22/0l
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THERE ABE NO I INWR!TTEN ORAL AGRJ;EMOO$ BEJWfiEN THE pART!J;S .
DEBTOR:
By:
DEBTOR:
By:
DEBTOR:
By:
SECURED PARTY
Slgnature
Name: \
?u)q!;d?I,C? J< M>tirl
'
DEBTOR:
company, General
By:
DEBIOR:
By
DEBTOR:
By:
DEBTOR:
By:
Page 9 of 9
Partner

IBC0004 ~ 06/22/0l
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L.P ... -
a .Texas limit.e4 partnership
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SECURITY
AGREEMENT
The vndersi_gned Debtof, Owner one or more, and INTEFNATIONAI, Bill. OF COMMEECE
130 E TRAVIS. s;N ANTQNIO. 7B205
!heielnafter c'a!led ''Secur.ed Party"} enter Into this seciJrlty Agreement a lid tor ,good and valuable corisideretion, the receipt of which Is hereby
acknowledged, and agre:;
1: Creation. of Security Interest.
Debtor hereby grants: to Secured Party a flt,st and a>;clusive.llen and sa;ur!ty Interest In aU of the personal property of Debtor, wherever located,
and now oWned or hereafter acquired, lnch.iding- the Properly described In Section !I of this SecuritY Agreement !the to secure
payment end performance of the Indebtedness (desCribed In Section 111 beJoWJ,
SECTION !1: 0e3cr!ptlon of Collateral,
1. The securitY Interest Is granted In the .following
a. Describe the collateral an"d, as applicable, check boxes end provide information Indicated .below.
b.
SEE. EXHIBIT "A" ATTACHED HERETO AND INCORPORATED. HEREIN,
D
2
D
The above goods are to become fixtures on: (describe rli!al estate; attach additional sheet, If tJBeded)
I
h
above timber Is standing on: (describe real estate; attach additional sheet, If needed)
3
D
The above minerals or the !Ike (including oil gas) 9r aco;unts will be financed at the well head or mine he.ad of the well
or mine located om (desCribe reel estate; attach additional sheet, If needed)
c. If b.1, b.2, or b.3 above is checked, this security agree(Tient Is to be fl\ed for record In the real estate records, (The description of the
real must be auff!clently spec;lf!c as to give const-ructive no.tlce of a mortgage on the realty),
D The Debtor does. not have an of record; the name record owner of the real estate Is
D All. substitutes and for, attachments, a!'ld other additions to, and tools, parts, and equlpmeAt used in
connection with, the above property; and t.he Increase and unborn.young of animals and poultry,
E A!! property similar to the a.bove hereafter a.cqulred by Debtor,
F All proceeds, products, and profits of the Co!lateral are Included. Coverage of products and proceeds for financing statement
purposes Is not to be construed as giving Debtor any additional rlghts with respect to the Collateral, end Debtor Is net authorized to
sell, Ieese, or otherwise trensf6r, furnish under contrects of service, manufacture, process, or eS"semble tke Co!lateral, except In
aCcordance with the provisions of this Security Agreement. Any additional sheets describing the Collateral, the real estate-, or other
matters are Incorporated In and made a part of this Instrument, !
2. Classify the collateral under one or more of the following Texas Business And Commerce classifications:
ConSumer Ooods
EQuipment (business usel
. -Equipment !farm use}
Investment Property
Instruments
Accounts
Farm Products
General Intangibles
Inventory
Chattel Paper
LetterOfCredit
Support Ob!lgations

Deposit AccoUnts
Commercial Tort Claims
Agri!)Uitura.! l.iens
Sales Of Puyment Intangibles and Promissory Notes
And to the extent not listed above original collateral all proceeds and products of the foregoing,
IBC0004 - 06/22/01
Page 1 of .,
Any term used in the Texas Business A , 'ommerce Code (the "Code") ar11;1 not .defined in Security Agreement has the meaning 9fv;n to
term in the Code.
3. D If this" block is chec.ked, this Is a purchase money security lntlireS't; Debtor wlil"us.e funds advanced to purchase the Collateral, or
Secured Party may disburse funds direct to the seller of the Collateral, and to purchase insurance on the Co11S.teral. To. the extent
Debtor uses the Loan to purchase C'ollateral, Debtor's repayment of the Loan shall ap.ply on a
8
flrst-ln-flrstout" basis so that the
portion of the Loan used to purchese a particular item of Collateral Shall be paid In the chronological order the Debtor purchased the
4.
,5.
Collateral,
If an.y of the Co!latetalls accounts, give the location of the office where the records concerning them ere kept (If other than Debtor's
"Commercial Tort Claims", a subcategory of General Intangibles, the Debtor's claim for

SECTION HI: INeEBT!:DNESS
This assignment and grant is rnade to Secured Party to secure the prompt and unconditlonel payment at, and the first and exclusive security
Interest grentf to Secured Party payment and _of, the
Arw and all Indebtedness, liabilities and/or of Debtor, or any of the undersigned ff more than erie, to Secured Party, jointly and/or
severally, and In any whether as borrower, guarantor, or otherwise, now or hereatt"er owing, created and/or arising, end regardless of
how evidenced or arising, as to oUtstanding and unpaid principal, accrued and unpaid Interest, teea, collection costs, Snd all other
sums owing by Debtor, or any of the undersigned If more than One, lhclur.llnc hut Mt HmltBrl tn
that Real Estate Lien e\ren date: herewith .executed by Delta: L.:P., a
limited .partnership and made payable to the order of Secure d .Party in the orfginal principal
and further without limitation to: sum .of uo_o,,o.Op .
A.
any and all Indebte-dness of;
(if indebtedness Is nat solely of Oebtor) or any of If more than one, jointly end/or severally, and In any
whether as borrower, guarantor, or otherwise, now or hereafter owing, created and/or arising, and regardless of how evidenced or
arising, Including, without
a, any commercial lonn or indebtedness;
C. any credit card or othat consumer type of loan;
D.
E.
F.
G.
H.
I.
J,
K.
any indebtedness relating to checking or savings accounts (overdrafts, fees, etc.);
any expanses Incurred in the protection or maintenance of the collateral securing any of such Uabllltles, loans, and obligations;
any expenses incurred in the collection of any indebtedness and/or obligation; i(
any letters of credit end/at indebtedness arising O\Jt of, or advanced to pay, letters of credit. transactions;
any indebtedness, however, evidenced, whether by promissory nate, bookkeeping emry,
transfer,_ch.ecks, drafts or other

Items, or by any other manner or form;
any other indebtedness ol Oebtor and/or of the persons or entitles set forth In subparagraph A. above to any financial Institution
affiliated with International Bancshares Corporation, jointly and/or severally, and in any capacity, whether as borrower, guarantor, or
otherwise, now or hereafter owing, created and/or srlsing, and regnrdless of how evidenced or srislng;
any and aU extensions, modifications, substitutions nnd/or renewals of any of the above described Indebtedness;
any and all costs Incurred by Secured Party to obtain, preserve end enforce this Secur!w Agreement, .collect the Indebtedness, and
maintain and preserve the Collateral Including without limitation, all taxes, assessments, attorneys' fees and legal expenses, and
expenses of sale;
L. the sale by Debtor and the purchasl! by Secured Party of Acco.unts;
M. the sale by Debtor and the purchase by Secured PartyofOhattel Paper:
N. the sale bY Debtor end the purchase by Secured Party of Payment Intangibles;
0. the sale by Debtor and the purchase by Secured Party of Promissory Notes; and
P. any of the foregoing that tJ:rlses after the flllng.of a peHtion In bankruptcy by or agalr,st Debtor under the Bankruptcy Code, even if
the obligations do not accrue because of the autom.etlc stay under Bei'lkruptoy Code 362 or otherwise,:
To the extent snowed by law, for purposes hereof It is Intended that the Indebtedness Include all classes of Indebtedness, whether evidenced
by notes, open accounts, overdrafts, or otiJetwlse, and whether direct, indirect or c.ontlngent, regardless of class, form or purpose and
Including but nat limited to, loans tor consumer, agricultural, business or personal purposes,
The foregoing shall under no circumstances be limited to the existence or-MnaxJstance of collateral for such Indebtedness, or the type of
c-sUeteral covered thereby. 1"he Indebtedness does. not inctude amounts o.wed pyrsuant to a homestead equltv loan.
Notl9es a"nd other communications to this Agreement shall be In writing end she!! be effective only if delivered In person
or mailed U.S. certified man, return receipt requested, postage prepaid, to Secured Party If sent to:
INTEEN;t<TIQNp.I. BANK OF COMMERCE 13 0 E. TRAVIS. SJW ANTONIO TEXAS 7B2Q5
Attention: THOM;s L TRAVIS , and sent via United States Mail to Debtor, duly stamp.ed and addressed to Debtor
either at the streiu address, the first shown hereinabove, or at the mailing e"ddress, 1t any, given by and/or f6r"D'abtor at the beginning of this
agreement (or at such other eddress as may have been designated most reCently in writing by Debtor to"Secured Party); provided, however,
actual notice to Debtor, however given or recelv&d, shall always be effective when given or received .. !:xcept as otherwise required by law,
any notice given or made pursuant hereto shall be deemed effectively given on the date of personal delivery or, If mailed, on the date such
notice is deposited In the U.S. Mall, Jf"recelved by Secured Party,
S!:CT!ON IV: PERF!:CTION ClF SECURITY INTERESTS,
1, Filing Of Fihanclng Statement.
!iJ Oebtor hereby authorizes Secured Party t6 file a Financing Statement, an Amended Financing Statement and a Continuation FinanCing
Statement \collectively referred to as the "Financing Statement") describing the Collateral,
(li) Oebtor hereby authorizes Secured Party to lila a Financing Statement describing any agricultural liens or other statutory liens held by
Secured Party.,
\ii!) Secured Party shall receive prior to the Closing an official report from the Secretary of State of each Co!laterel State, the Chief
Executive Office State, end the Oebtor State \each as defined below) (the "SOS Reports") indicating that Secured Party's security
interest is prior to all other security Interests or other interests reflected In the report.
(ivl Secured Party shall receive at any time following the Closing en SOS Report lndictlting that Secured Party's security Interest Is prior to
all other security interests or ether interests reflected In the report.
2. Possession,
\il Debtor shall have possession cf the Collateral, except where expressly otherwise provided -in this Security Agreement or where Secured
Party chooses to perfect its security Interest by possession only, or in addition to the filing of a Financing Statement,
IBC0004 Ob/22/0l
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(ill Wher.e Collateral Is In the possession of a: ... ....._ j party, Debtor wlf! JOin with Secured Party. in no; the thiid party of Secured Party's
s;tcuritv Interest and obtaining a AgraBment from the third party that lt.is holding the Coh .. ,era! lor the benefit of Secured Party,
3. Control De:btor will cooper-ate .with secuied PartY In obJainihg a Control Agre8ment In form end substance satisfactory to
Secunid Party with respect t? cq!leteref consiS.tlng .
(I) Deposit Accounts,
!J!l Investment Property,
{lill LetterOfCredlt Rights, and
(iV) electronic Chattel PPP,er.
4. Marking of Chattel Paper. Debtor will no.t create any Chettel Paper without placing a legend on the Chattel Paper acceptable to Secured
Pany Indicating sepured Party a seclirlty Interest In the Chattel Paper,
SECTION V; pebtgr's Bopr!!aoetat!on Waqpntlu nod -Agmemeota
A. General Representations ond Warranties
. Debtor repi-esentS, warrants and 8greils that: .
(1) D-ebtor ha&. full power and au.thorltv to e"nter Into thiS Security Agrilement; this .Security Agreement has been duly authorized,
executed and delivered by Debtor. anQ constituta&.th8 valid ami binding obligation 'Of Debtor enf9rceable in accordalice wltR Ita
terms, No consent of parties, 11 llcensa, authorization or f!!!ng with any authoritY ls reql:llred'to be obtained or
.performed In connection with the execlitlon; de!lver.v, end performance of this SeCurity Agreeinent
(2) All Information supplied and statements made by Debt?r In any financial, credit or accounting or application for credit
prior to, contemporaneously with' or subsequent to the eXecution of this Security Agreement are and shall be true, correct,
complete, val!d, and genuine.
!3l Debtor owns, or- w!U use the J:)roceeds of any loans by secured Party to become the bwher of the Collateral free from any setoff,
claim, r.estr!otion, l!en, Interest. or encumbrance except this secUritY Interest and !lens- for taxes not yet due,
(4) No Financing covering the Collateral or Its proceeds 1-a on file in any publlc office and Debtor will not permit any
Financing Statement covering any of Deb-tor's Collateral or the pioceeds thereof to hereafter be on file hi any public-office except as
"may be filed pursuant to this SecUrity Agreemem.
(5) Deb1or shall provld6 to Secured Party, \lpon Secured Party's request, m financial information, Including but not limited to a balance
sheet, incOme statement, statement of cash flow, and such other financial information as may be requested by Secured Parw; UIJ
an appraisal of the Collateral: fill) tax receipts; (i\t) evidence of Insurance, and {v) any other informetlon reQuired by Secured Party In
connection with the Indebtedness or the Collateral.
(6) Debtor will not use the Collateral or permit the Collater.al to be us-ed. In violation of any siatute, ordlnanca or other law or
Inconsistently with the terms of any policy of Insurance thereon; and Debtor will permit Secured Party and Its agents,
representatives, and employees to examine the Collaterel at "all reasonable times, and for such purpose, Secured Party may enter
upon or into any prer11lses where the Colleteral rriay be located without being guilty of, and/or held liable for, trespass, Debtor wll!
furnish to Secured Party upon request all pertinent Information regarding the Collateral.
171 The Collateral sha!l remain In Debtor's possession or controi at all times at Debtor's risk of loss unless Secured Party has taken
possession of the Collateral, and be kept at Debtor's ilddr.ess set forth above where Secured Party may Inspect it at any time,
except for Its t-emporary removal In connection with Its ordinary use or unless Debtor notifies Secured PartY In writing and Secured
Party consents In writ\ng In advance of Its removal to anOther location,
(8) Debtor shell pay.pr!or to delinQuency all texas; charges, liens end assessments against the Collateral, and.upon Debtor's failure to
do so, Secured Party at Its option, may pay any -of them and shall ba the sole judge of. the -le_gallty or valldltv thereof and the
. amount necessary to dlabharge the same, Such payment shall become part of the Indebtedness secured by this Security Agreement
and shall be paid to Party by Debtor Immediately and without Pemand, with Interest thereon at the maximum rate allowed
"by applicable law, 1 .
(9) HI!Z&rd Insurance must be furnished a't all times for the full amount of the Indebtedness with respect to all Collateral (Including
coverage for all materials and equipment) against risks of Fire, Windstorm, Hurricane {!f the Collateral Is written 100 miles of the
Gulf Coast\, Hall and Collapse {lncludlng cost of debris removal) such other risks as Secured Party may require, Including
standard extended coverage, Such Insurance policies shall contain such terms, be In a form, for a period and be wrltien by
satisfactory to Secured Party. Federal flood Insurance Is also required In those geographic areas that are subject to such
loss. The policy shall also contain a standard mortgagee's endorsement providing for payment of any loss io Secured Party, A!!
policies of Insurance shall provide for ten days written minimum cancellation notlcti to Secured Pertv .
(10)
(11)
112)
Evidence of coverage must be a copy of the original policy and loSS" payable clause. Certificates or letters of coverage will not be

Secured Party Is authorized to act as for Debtor In obtaining, adjusting, settling, and canceling such insurance and
endorsing any drafts drawn by Insurers of the Collaterel, Secured Party may apply any andfor all proceeds of such Insurance, which
may be received by It In payment of the Indebtedness secured thereby, whether such Indebtedness l.s currently due or nOt. Secured
Party reserves the right to purchase single Interest Insurance (which provides only protection for Secured Party\ and add the
premium for such insunmce together with Interest at the loan prematurity contract rate to the balance of the loan. This premium is
due upon demand, or may be paid In full at any agreed time. The single Interest premium is written by a company authorized to
transact business In the State of at lawful ratas not fixed or approved by_ the State. Board of Insurance.
Secured Party; In Its sole discretion BT]d without obligation on Secured Party to do so, may advance and pay sums on behalf and for
the benefit of Debtor for costs neces-sary for the protection and preservation of the collateral and other costs that may be
apptopriate, In Secured Party's sole d(soretlon, including but not !!mlted to insurance premiums, ad valorem taxes, and attorney's
fees and leoaal costs and expenses. Any sums whlcli may be so paid by SecUred Party and all sum; paid for Insurance premiums, as.
aforesaid, Including the costs, expenses, and attorney's fees paid In any suit affecting seld Collateral shall bear Interest from the
dates of such payments at the loan contract Interest rate applied to the unmatured pfinclpal balance and shall be paidcby Debtor to
Secured Party upon demand, pnd shell be deemed a part of the debt and recovel'able as such in all aspects, sum to be
reimbursed she!! be secured by this SecuritY Agreement,
1
. .
Debtor sha!l, at Its own expense, do, make, procure, axecute and deliver all acts, things, writings and assurshees as Secured Party
may at any time request to protect, assure or enforce Its Interests, rights and remedies created by, provided in or er\anat!ng from
this Security Agre'llment,
Debtor shall not lend, rent, !ease or otherwls"s dispose of thE! Collateral or any interest therein except as authorized !r. this SecuritY
AgrBemant or In writing by Secured PartY, and Dabtor shall keep the Collateral, including the proceeds thereof, free from unpaid
charges, Including taxes, and from !lens, encumbrances arid security Interests other than that of Secured Party.
Debtor shall sign and execute alone or with Secured Party any Financing or other dooument or procure .any document,
and pay ell connected costs, necessary to protect the sei::urlty Interest under this SecuritY Agreement against the rights or Interests
of third peraons, Debtor Shall pay the c.osts of lleri searches and certificates and all filing fees, continuation fees, and fees for
. certificates of good standing and other lnf!Jrmatlon required by Secured Party,
- OG/42/0l
Fags l of '.l
1131
(141
(15)
{16)
lf7J
11 SJ
(19)
\20)
(.21)
\2.2)'
i23)
Debtor shall at all times keen the Collateral and its pr.oeeeds separate and dlstir"i' hom other property of Debtor and sha\1 keeP.
accurate and complete of the Collateral and !ts_proceeqs. OePtor she!! pr. v'B the Co.llatera! and pay all co.s.ts to-
do so, including !but net ioi feed, rent, storage costs, arid experises
If .Secured Party should at any time be of the opinion that the Collateral has declined or may decline In value, or Ia otherwise
Insufficient to adnquately secure tlie lndebtednees, or should Sil:cUred Party deem 'Itself tr\secure as to payment of the Indebtedness,
then Secured Pany may can tor additional property to be pledged and/or covered by this Agreement sat!stactory to Secured Party.
If any Collateral or proceeds include obligations of third parties to Debtor, the transactions creating those obligations will conform in
all tespects to applicable state and federal consumer credit laws.
In the event Debtor or any other person or persons seeks to enjoin Secured Party from taking any action in connection with the
Indebtedness or the enforcement of Secured Party's rights In the Collateral, Debtor her.eby asrees to give written not_lce to? the
. President of Secured Party, at the addr6ss of Secured Party set forth In the first paregraph" of this Security Agreement, or such
person or address as Secured Party may designate In wrltlflg to Debtor, to seeking any such Injunctive relief,
shall indemnify and hold harmless Secured Party from and against any end ell claims, lossa-s and !leb1!1tles growing out of or
res ltlng from this Security Agreent'ent !Including, wltliout !lmitetion, enforcement of this Security A-greement), except claims,
los}iiS or lieblllt!M resulting from thej gross negligence or willful misconduct of Secured Party. Oe_btor upon demand, to pay
to Party the amount of any Bnd aU expenses, Including, but not limited to., the fees and dlsbuisam&nts of Its counsel end of
any experts and which SeCured Party may Incur In connection with (a) the preparation, execution, delivery, filing, recording
or edm!niStretlon of this SecuritY Agreement or the obtalnlhg of advlce from counset respect to its rights and !eniedies under
tiils Security Agraement, {b) the custody, preservation, use or operation of, or.the_ sale of, collection from, or other realization upon,
any of the ColiatiJral, {c) the exercise or enforcement. of anY of the rights o{ Secured Perty hereunder, (d) the defense by Secured
Party of any lnjuflctlon pro_ceedlng related to the Indebtedness or tlie Collateral, or (e) "the failure Debtor to perform or observe
any of the provisions hereof. Debtor agrees to pay interest on any expense or other sums due to Secured Party hereunder (save and
except Insurance! that are not paid when due at a rate per annum equal to the hJ9hest rate permitted by applicable law.
As additional security for the Indebtedness, Debtor hereby ass_lgns, pledges end gr.!lnts to Secured Party a security Interest, 11 !len
and contractual right of set-off In and to all of the Debtor's money, credits, accounts, securities, certificates and/Or other property
now in, or at any time hereafter com!ng within, the cuStody or control of Secur"ed Party or any member Bank or branch Bank of
International Bam:shares Corporation, whether held in a general or special account or deposit, or tor safekeeping or otherwise, Eve.ry
such securitY Interest end right of. set-off may be exercised without detnend or notice to D"ebtor. No Security interest or right of set
off shall be deem.ad to have been waived by anyact or conduct on the of Secured Party, or any fallure to exercise such right of
setoff or to enforce such security Interest, or by anydelay in so doing, Every right of set-off and security Interest shall continue !n
full force and effect until such right ot setoff or security Interest Ia specifically waived or released by an Instrument In writing
executed by Secured Party. The foregoing is in addition to and not tn lieu of any rights of sStoff allowed by lew.
Debtor sha!l.esslst Secured Party in complying with the Federal Assignment of .CialmsAct (and arw successor statutes) 11nd similar
laws to enable Sncured Party to become an assignee under such Act and otherwise comply with such laws. Debtor shall preserve
'the liebllitY of all account debtors, obligors, and secondary parties whose obligations are part of the Collateral. Debtor shall notify
the Secured Party of any change occurring In or to the Collateral, or in any fact or clrcumsrences warranted or represented by
"pebtor In this agf\9ement or furnished to Parw, or If any Event of Default occurs.
Debtor will not allow the Collateu.J to be affixed to real estate; except goods Identified herein
All extended or note\s) will be considered executed on the date of the original note\sl..
Debtor shell comply with all environmental laws and regulations applicable to the" Collateral and the premls-es_in which- the Collateral
ls located and shill! notify Secured Parw upon receipt of any notlce-or other Information es to any environmental hazards or violation
of such Jaws. Sacured Party may inspect aU prerrilses ln which the .Collateraf Is located end the Collateral as to Its and their
compliance wlth onv!ronmentellaw. Debtor Indemnifies and holds harmless Secured Party for any breach of the foregoing and for ell
losses, costs, flnas, damages, includlnQ court costs-and attorney's fees, InCurred by Secured Party to defend Itself, or to protect or
preserve the Collateral against environmental risks, hazards, fines, B.nd other claims relating :o the Colleterill.
W.Jthout .. ptovldlngsecured P:uty with at leest thirty !30) days notiCe of Oebtor't Intention to do ao, Debtor, until the
1ndebtedness is pold In full, egrees that It will not:
f In one transaction or a sarles OJ reJSted transactions, merge lnt; or consolidate with any other entity, sell &11 or substantially ell
of its essets, or In o:ny way jeopardize Its corporate sx!stence,
b. change tha state of hs lncorporet!on,
c. change Its corporate name,
CJ. Change the address ilndfor looetlon of Its Chief Exec\Jtlve" Office:
e. file a UCC1 Amend.ment form, and/or
f. file a UCC1 Termination form.
(24) Debtor has the rl&k of loss of the Col!atersl,
,-, (26) Se-cured Party has no _duty to collect any Income accruing on the Col.lateral or to preserve any rights relating to the Co!latersl.
a.
tind Warranties:
Debtof represents, warrants end agfees that:
(1) If the Collateral Includes Inventory: . .
121
13/
{e) Debtor will Immediately notify Secured Party of the disposition of any lnve"ntory end at Debtor's expanse will either assign to
Secured Party a firstpriorlty security Interest In any resulting account, chattel paper, or Instrument or deliver to Secured Party
cash in the amou.nt of the sale pr!ee, Debtor wl!l not sell,. lease, or otherwise dispose o.f any Collatersl except In the ordinary
course of business without the prior written c;msent of Se.cured P-etty, . .
(b) UQtll default Oeb(or may In the ordinar.y course of bu11iness, abll, Ieese or furnish under potwact of service any.of the inventory
normally held by Debtor for such.P(:lrpose, .howeVer, that such use. of the Inventory shall not be Inconsistent with any
other provisions this Security Agreement or with the terms. or conditions of any policies of insur11noe thereon. A sale in the
or?inary course ot business does not include ih partial o.r total of a debt,
!f the Collateral includes accounts:
!a) Each acco\.mt in the Collateral wUI represent the valid, legally enforceable obligation of third parties and will not be evidenced by
any instrument or chattel paper,
{b) The office where Debtor keeps its records concerning accounts, If any, is the address of Debt.or set forth at the beginning of
If the Collateral Includes Instruments, chattel paper or documents:
1a1 By delivering a CI?PY of this Security Agreement to the broker; seller, or other person In possession of Collateral that Is chattel
paper or document, Security Party will effectively notify that person of Secured Party's Interest in the Collateral. Delivery of the
copy of the Security Agreement w!!l also constitute Debtor's Instruction to deliver to Secured Party certifiCates or other
evidence of. the Collateral sS. soon as It Is -available. Debtor wll! Immediately deliver to Securad Party alt chattel paper end
documents that ere Collateral in Debtor's possession. It that Collateral Is hereafter scq"ulred, DebtOl' will deliver It to Secured
Party imme-diately following acquisition end either endorse Jt to Secured Party's order ot give Secured Pll;rtY. appropriate
executed powers. If any instruments, chattel paper, money ormonies, docu_ments ere, at any time or times, InCluded in the
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Collateral. whether as proceed{ Debtor wm promPtly deliver the same, lecured Party upon the receipt thereof
by Debtor, end In any event upon demand theret'oie by Secured Party, .... 1ecessary, all Collateral will either be
endorsed to Secured Party.'s-order Or accompanied by appropriate executed powers.
By means satisfactory to Secured Perty,.Debtor has perfected or will. perfect a securitY Interest In goods coVBred by chattel
paper, It any, In Coliater8!, .
(4) If the Collateral Includes property covered by a Certificate of Title: If any certificate of title or similar documem is; at env time and
pursuant to the laws of any Jurisdiction, Issued or outstanding with respeCt to the Collateral or any part Deblpr will promptly
ad11ise Secured Party thereof, end Debtor wl!l promptly cause the Interest of Secured Party to be properly noted thereon, and If any
certificate of title .or slrr'lller do.oumerit Is so Issued or .outstendln9 at the time this Security Agieement Is executed by or on behalf of
Debtor, then Debtor shell have caused the interest of Secured P.arty so to have properlY noted at or before the time of such
execution; ond Debtor will further promptly deliver to Secured Party any such certificate of title or similar document Issued or
outstanding at any with respi;.cfto such Collateral,
(Q) If the Coll-ateral is or may become fixtures on reel proPerty desCribed herein: This securitY Agreement, filed for record in
the real property records of the county wherein such fixtures are situated, shall operate also as a financing statement filed es a fixture
filing in accordance with Section S.402(el ot the Texas Business and Commerce Code upon such of the Collateral which Is or may
fixtures,
(6) Debtor has dghts In or the power to transfer the Collateral and Its t!tle to the Collateral Is free of all adverse claims, liens, security
l_ntereats and restrictions on trsm1ter or ple9ge except as created by this SecuritY Agreement,
f7l All collateral consisting of goods Is located solely In the states and/or states previously deslgnatet! end warrai"lt_ed by pabtor to
Secured Psrty,
!81 Debtor's:
{i) chief executive office Is located In state previously designated and by Debtor to Secured.Partv;
{lll state of Incorporation Ia the state previously del!llgnated and warranted by Debtor to Setured Party; end
(Ill) exact legal name Is as set forth In the first" paragraph of this SecuritY" Agreement ,
SECTION VI: EVENTS OFDEFAULT,
Debtor shall be in default under this Security Agreement upon the happening of any of the following events or conditions (herein called ari
"Event of Default;,}:
111
)2)
131
141
151
161
{71
lSI
The failure by Debtor or any other liable "partv to pay when due any of the Indebtedness either principal or lr,terest, or _any other sum due
under the terms of any Instrument evidencing the Indebtedness,
Default by Oebto( In the punctual performance of any of the Obligations, covenants, terms or provisions contained or referred to In this
. Security Agreement, '
Any warranty, representation, or statement contained In this Security Agreement or made cr furnished to Secured Party by or on behalf
of Debtor or anY ether pan1011 or party ln connection with this Security Ag_reement or to Induce Secured Party make the loans
(described In Section !Ill proves to have been false In any respect when made or furniShed.
Loss, theft, substsnt!al damage, destruction, sale {except as authorized in this Security Agreement) or encumbrance to or of any of the
Collateral, or the making of any levy, seizure or attachment thereof or thereon.
Debtor's tleeth, dissolution, termination of existence, lnsciVenc.y or business tanura; the appointment of a rac.elver of all or sny part of
the property of Debtor; en assignment for the beneflt"of creditors by Debtor, the calling of a meeting of of Debtor, or the
commencement of any proceeding under any bankruptcy or Insolvency laws by or against Debtor or any guarantor, surety or endorser
fer Debtor; or the occurrence Of any of such events described In this part 151 as to any parson or party liable for the payment of the
obligations, or any P.Onion thereof.
Any statement of the flnanblal Debtor of any maker, guarantor, surety or endorser of any of the Indebtedness proves to
be hlse. .
,,
The Collateral becomes, In the judgment of Secured Parw, unsatisfactory or Insufficient In character or value.
Any maker, guarantor, surety or endorser under or with respect to the Indebtedness defaults in any obligation or llabilitv Secured
Party,
ISl The occurrence of any environmentally -hazardous splll, Qischarge or ether slniilar event adversely affecting the Collateral or the
premises In which the Collateral Is located, whether such ev_ent Occurs o"n such premises or on other premises.
{10) Debtor, or any of them, or any guarantor, fails to timely deliver any and all financial .statements, Income tax returns, cash flow
Information, balance sheets, accounts receivable reports, or any other business, tax or financial Information requested by Secured
Parw.
SECTION VII: SECURED PARTY'S RIGHTS AND FIEMEOIES
A, Ganerel,
Secured PartY may exercise the following rights and remedies either before or after Event of Default:
{1) Secured Party may. taka control of any proceeds" of the
121 Secured Party may release any Collateral In Secured Party's possession to any Debtor, temporarily or otherwise.
(3] Secured PartY mey take control of any funds generated by the Collateral, such as refunds from and proceeds "of Insurance, end reduce
any pert of the 1ndebtednes.s accordingly or-permit Debtor to use such funds to or replace damaged or destroyed Collateral
coVered by Insurance.
' . .
{4) .Party may request Debtor from time to time, in Secured Pil.rty's. discretion to tke aiw action end to execu"te ittiy Instrument
which Secured Party may deem necessary or advisable to sCcompl!sh the purposes af this Security Agreement lnct'\jJng, without
limitation, (a) to ask, demand, collect, au, for, recover, compound, receive and give abqulttanoe end receipts for men ; due end to
.become due under or In respect of any Collateral; (b) to receive, endorse and collect any drafts or qther Instruments, ocuments and
chattel paper In connection with the preceding actions; (c) to file any claims or take any action or Institute any pro,caedlngs which
Secured P.8rtY may deem ne_cessary or desirable fo_r collection of any ot the Collateral or otherWise to !lnforce Its rights respect to
any of the Collateral, and (i:Jl.to complete and sign on behalf of De.btor one or mere financing statements pertaining to the Collateral
end file the same Jnan appropriate location. The powers conferred on Secured Party hereUnder are solely to protect Its interest in the
Collateral and shall not Impose any duty :upon Secured Party to ex_erclse any such powers. Debtor's sppclntment of Secured PartY as
Debtor's agent is c.oupled with an _Interest and will survive any dlslib!llty of Debtor,
{!5) This SecuritY Agreetne[lt. Secured Party's rights hereunder the Indebtedness hereby niay be assigned whole and In
part from time to time, and In any such case Secured Party shall be fully discharged from all responsibility With respecl to the Collateral
so assigned and the assignee shall be entitled to a!! of the rights, privileges and remedles,gnmted In this Securltv Agreement tc Secured
.Party to the extent the aam.e ere asslgne9, and Pebtor will. assert np clajm or defenses he may agalns,t Secured Party against the
assignee, except. those. granted ln this Se"curlty Ag"feement. In addition, Debtor Waives end will not assert against any claims. defenses
or setotfs which Debtor could essen 'against Secured Party except defe"nses which cannot be waived.
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(6)
17)
. IS)
(9)
{10)
(11J
\12)
113)
(15)
(16)
117)
Secured Party may enter upG. . ebtor's preml!laS at $ny reasonable time to Ins(. :">the Collateral en.d Debtor's books an'd
pertaining to the collateral, and. .;,.,abtor ShaU assist the Party In any 'eaiih
Secured Party may notify the account debtors or obllgo.ra of iiny accoL!nta,-chaT:tel P,aper: negotiable InstrumentS Or other evidence of
lnc;!e.btedness remlttred by Debtor to Secured Party as proceeds to -pay Secured P11rty dlrlicw. Secured Party may contact account
debtors directly to verity Information lu'rnlshed by Debtor, . . .
Se-cured Party may additional COflate.ral or reject as any property hereafter oftertld by Debtor as C,ol!aterel .
Secured Party may desiQnate, from time to tlme, a certain pareeritage of the Collnternl as the loan require. Debtor to maintain
the Indebtedness at or below such percimtage.
Secured Party may present for conversion to cash any Instrument or Investment security ore combination But Secured Party
shall nDt ,have any dutv to present for conversion .any Instrument of Colletera"l In Its possusion unless It shell have received from Debtor
detailed written Instructions to that effect at a time reasonably tar In advance of the flnel conversion date to make such conversion
posstbtS . .
' .
The tolf.egolng r!ghts and powers ol sePur.ed f>arty w!!! be In addition to, and not a limitation upon, any rights and powers of Secured
f>etty given by law, alsewhere In this S!l,curlty Agreement, or otherwise.
Secured f>arty has no obligation to attempt to satisfy the Obligations by collecting them. a"ny other person liable for them and
Secured !>arty may release, modify or Waive any collaieral provided by any other person to secure any of the Obl!getlons, all without
affecting Secured Party's rights against Debtor. Debtor waives any right It may have to require Secured Party to pursue any third
person tor any of the Obligations,
Secured Party may eomply with any applicable state or federal law requirements In connection with a disposition of the Collateral and
compliance will nat be considered to affect the cornmercle! of.any sale of th.e Collateral,
If Secured Party sells any of the Collateral upon. credit, Debtor will be cr9dlted only with payments actually made by the purchaser,
received by Secured Party and applled to the Indebtedness ot the In the event the purchaser fai!a to pay for the Collateral,
Secured Party may resell the Collateral and Debtor shall be credited with the proceeds .of the sale,
Secured Party have no obligation to marshall any assets In tavot of Debtor, or against or In payment of:
(IJ ' the Note,
Iii) any of the other Obligations, or
(iiiJ any other obligation owed to Secured Party by Debtor or any other person.
This Security Agreement shall bind and shall Inure to the benefit of the heirs, legatees, executors, admlnlatrators,, successors and
assigns of Secured Party and shali bind all per.sons become bound as a debtor to Security Agreement.
secured f>arty does not consent tO ehy assignment by Deqtor except as exPressly provided In this Security Agreemerit.
B. Remedlu In Event of De111ult
During the existence of any Event of Default, or in the e"vent Secured f>arty deems Itself Insecure in the payment of the Indebtedness, Secured
f>arw may declare the unpnld principal and unpaid and accrued Interest ol the Indebtedness lmmedlatery Clue in whole.or part, enforce the
Indebtedness, end/or exercise any rights and remedies granted by the Texas Business and Commercial Code or by this Secl.!rity A9reement,
Including the followlngl
( 1) requ!r& Debtor to de!!ver to Secured Party. all boQks and rec9rds relating to the Collateral;
!2J require Debtor to asaamble "the Collateral and make it available to Secured Party at a place reasonably convenient to both parties;
(3) take possession of any of the Collateral and for this purpose enter any premises where It is located If this can be done without breach
of the peace and will not be guilty of, and/or held liable tor, uespass;
(4) sen, lease, or otherwise dispose of any of the Collateral In accord with the rights, remedies, and duties of a Securecj Party under
Chapters 2 and 9 or the Texas Business And Commerce Code afte.r giving notice as required by those. chapters; unless the Collateral
threatens to decllne rapidly in value, is perishable, or would typically be sold on a recognized market, Secured Party will give Debtor
reasonable notice at any public sale of the Collateral or of a time after which It may be otherwise disposed of without further notice to
Debtor; In this event, noti.oe wll! be deemed reasonable If It Is mailed, posta9e prepaid, to Debtor at the address specified In this
agreement at least ten days before any public sale or ten days before the time when the Collateral may be otherwise disposed of
without further notice to Debtor. Debtor authorizes Secured !>arty to disclaim or modify aAy and a!! warranties set forth In Section
9.010ldl and stipulates and agrees that such a c!lsclaimer and/or modificatlon:wm not render the sale commercially unreasonable.
(51 surrender any insurance policies covering the Collateral and receive the unearned premium;
(til apply any proceeds from disposition of the Collateral after default in the manner specified In Chapter 9 of the Texas Business And
Commerce Code, Including payment of Secured Party's reasonable attorney's fees and court expenses;
{71 it disposition of the Collateral leaves the Indebtedness unSatisfied, collect the defiolenoy from all liable parties. Expenses "of retaking,
holding, preparing for sale, selling or the like shall include Secured Party's reasonable attorney's fees and legal costs and/or expenses,
and Debtor agrees to pay such costs, expenses, and fees , plus Interest thereon at the "maximum rete bY applicable law.;
[8) Secured Party may retain all or part of the C()l!ateralln full and/or. partial satisfaction of the Indebtedness pursuant to Section 9,620 of
the Texas Business And Commerce
[9) Secured Pariy may, without demand or nt>t!ce of any kind, approprl.ate and apply tOwarQ the payment ot any sums then to
Secured Parw and In such order of application as the Securad Party may from time to time elect, any property, balances, credits,
deposits, accounts or monies of Debtor which for any purpose is In t-he possession or control of the Secured Party or any tnember Bank,.
branch Bank or other depository lnstltut.Jon of lnternatlonal Bancshares Corporation; and/or
(10) Secured Party may remedy any default without waiving the default remedied and .. may waive any default without waiving any other
prior or subsequent default,
,.
SECTION VIU: ADDITIONAl. AGREEMENT$.
( 1) All notices and other communications to Secured Party hereunder or !n connection herewith shall be deemed to have been given when
by Secured Party in Wtltiog at the address first si:IOwn hereinabove, Any notice or demand or other communication to Debtor '
hereunder or in conhectlon herewith may be given and shall conclusively Qe deemed and conslderei:l -to have bee-n given and received
upon the deposit thereof In writing In the Unite'd Sta"te-s Mall, duly stamped addressed to Debtor :at the street address, the
first shown hereinabove, or at the mailing address, if any, given by and/or for Debtor at the -beginning of this agreement (or at such
other address as may have been designated most recently In writing b.y De"btor to Secured f>an:yJ; "provided, however, aCtual notice to
Debtor, however given or received, shall alwayS be effective given or received.
(2) A copy of this SecuritY- Agreement or any financing statement cove;if.lg the Collateral ia sufficient and may be filed. as a financing
statement. Information concerning this security interest may be obtained at the office of-Secured Party shown above.
IBC0004 -
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(3) This Agreement only be mo ..._ ... or limited by agreement In writing.
{4) Thls_tlecurlty hterest n.or be affe.ctecf.b'i' any fonmy of tlie Indebtedness. N!31ther extensions of eny.of
the nOr ,r.e;leasas of any df tlie Colhjleral shall affi3ct the Valldlty of-this security Interest. reference tqJnV -th'lrd party,
foJeclosor,j of this securitY- Interest by lawsuit does not limit. SeCured Party's re.r:riedles, ,lnclodlng the right to self the
Colh1terel under the t'erms of 'this. seCurity SeQured Pa_ny shell h8ve the rlglit to exercise all remedies at the same or
dtffererlt times and no- shalt be a defense: to any other, Secu'red Party shall heve aU rights and. remedies granted by law or
151
.otherwis-e fn addition -to thOse prO:vldect.ln Security Agre_ement:
Secured Party may remedy any default withoUt waiving It, No delay by Secured Pany In exercising Jts rights or pert'-ielly exercising Its
rights or remedies sh.a!! waive further. exercise of those remedies or rights. The fllllure of Secured Party to exercise any _remedies or
rig!Jts: does not waive sub:seq'-!fiint exEirclse. of those r-emedies or rights; Any Wal)/er by Secured Party of any default shall not we.lve any
further default, Se.cured Party may remedy -ahy default without waiv.!ng ft. Secured Party's waiver of sny.right in this Security
or any default Is blndlng only If l_ri writing_.
(6) Del;ltor end Secured Party Intend thilt the :JndabtednSss shali be In strict cotnpllahce with applicable _Usury laws, If at any time interest
. contracted for, chsrgad or received undef.liny Indebtedness secUred-by this Security Agreement or otherwise In connection with this
transaction would be usurious under app!lcable lew, then regardless of the provisions of this Security Agreement or any other
documents or Instruments evidencing, securing or otherwise executed In connection with any Indebtedness secured by this Security
Agreement or any action or event !Including, without limitatiOn, prepayment of principal under the Note or acceleration of maturity by
Secured P.arty) whlcl'rmay oocJJr with respect to the Note, lt'ls'agreed that all sums determined to be usurious sh'all be Immediately
credited by Secured Party. to Debtor. a a e paymerlt Of prlnclpat t.mdilr the Note or ft the Note has already been paid, Immediately
refUnded tq Debtor. 'All compensation Whlcl'l constitutes Interest applicable law In connection with any Indebtedness secured by
this Seourltv Agreement shall be an'lortlzlid, 'prorsted, allocated, and spread over the full period of tlma_any lndEibtednass ls owed by
Debtor, to the greatest extent permissible without exceeding the applicable maximum rate allowed by applicable law in effect from tlme
to time during such period,
/7) Secured Party may perform any obligation which Debtor falls to perform and Debtor agrees on dema,nd to reimburse Secured Party
Immediately for any sums so paid by Secured Party, Including attorneyS' fees and other legal expenses, plus Interest on those sums
from the dates of paymel'lt at the rate 11tated In the Note for matured; unpaid amounts. Any sum to be reimbursed shall be secured by
. Security Agreement. !See IV, /9) for Insurance reimbursements).
IBl This Agreememls being execUted de;ivered and is ;o be.performed the State of Te.xas and shall be construed
and enforced In acosrdance with the laws of the State of Texas, except to the extent that the Code provides for the application of the
law of the Debtor States, When the cOntext requires, singular nouns and pronouns lnolude theplt:Jrat. The rights of Secured Party
under this SecUrity Agreement shall Inure to lhe benefit of its succeSsors and 'assigns; 'Any assignment of part of the Indebtedness and
delivery by Secured Party of eny part of the Collateral wUl fully discharge Secured Party from any and all responslbilitv for that.portlon
of the Collateral. Debtor's Indebtedness under this SecuritY Agreement shall bind Debtor's personal representatives, successors and
assigns, If Debtor IS more than one, all .tbeir representatives; wsrrantie.s and agreements are !oint and several. If any part of this
Security Agreement is unenforceable, the unenforceabillty of such provision will not affect the e'nforceablllty of any other provision
hereof end all other provisions will constitute valid provisions
SECTION !X: . ARBITRATION T:HE PARTIES FURTHER AGREE AS FOLLOWS:
(a) ANY AN_D .ALL C.ONTROVERSIES BETWEEN THE PARTIES. SHALL e:E RESOLVE.D SY ARBITRATION IN ACCORDANCE WITH THE

CONTROL T!J:. THE EX.T:ENT OF .. THE CONFLICT, A-NY ARB!TAA't'ION !iEREUNDER .SHALL BE BEFORE AT LEAS'I' THREE NEUTRAL
ARBITRATORS ASSOCIATED WITH THE AMERICAN-. ARBITRATION ASSOCIATION AND SEI.ECTeO IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION, FAILURE OF ANY ARBITRATOR TO DISCLOSE ALL FACTS WHICH
MIGHT TO AN OBJECTIVE OBSEB:VER CREATE A REASONABLE IMPRESSION OF THE ARBITRATOR'S PARTIALITY, AND/OR MATERIAL
ERAO,RS OP LAW SHALL BE GRO'uND,S [IN ADDITION TO ALL O:f<HERSI FOR VACATUR OF AN AWARD RENDERED PURSUANT "TO THIS
AGREEMENT,
,,
(b) THE AWARD OF THE AR_BI'fRATORS, OR A MAJORITY-OF SHALL BE FINAL, AND JUDGMENT UPON TH-E AWARD RENDERED

FINDINGS OF FACT AN'? CONCLUSIONS OF LAW,.
(cl ARBITRABLE DISPUTES JNCLiJDE ANY AND ALL CONTROVERSIES OR CLAIMS BETWEEN THE PARTIES OF WHATEVER TYPE OR
MANNER, INCLUDING WITHOlJT LIMITATION, ANY CLAIM A_RISING OUT OF O.R RELAT!NG TO THIS AGREEMENT, ALL PAST, PRESENT'
AND/bR FUTURE CREDIT.FACILITIES AND/OR AGREEMENTS INVOLVING THE PARTIES, ANY TRANSACTIONS BETWEEN OR INVOLVIN.G THE
PARTIES, ANC/dR ANY ASPECT OF ANY PAST OR PRESENT RELATiONSHIP OF THE- PART.IE.S, WHETHER BANKING OR OTHERWLSE,
SPECIFICALLY INCLUDING ANY ALLEGED TORT 'COMMITTED BX ANY PARTY, .
FO(;lA

CONTINUE THEREAFTER AS AGREED BY THE PARTIES OR AS ALLOWED' BY THE ARB!TRAT'QRS. DISCOVERY DISPUTES
SHALL BE BROUGHT TO THE ATTENTION OFTHE ARBITRATORS BY WRITTEN MOTION FOR PROPER DISPOSITION, INCLUDING RULING ON
ANY ASSERTED OBJECTIONS, PRIVILEGES, AND PROTECTIVE ORDER REQUESTS AND AWARDING REASONABLE ATTORNEY'S FEES TO THE
PREVAILING PARTY. . . . . .

ARBITRATORS, THE AMERICAN ARBITRATION P,SSOCIATION- SHA!--L AN IN PERSON ADMINISJ'RATIV.E CONFERENCE WITH THE
PARTIES ANO THEIR ATTORNEYS FOR-THE FOLLOWING PURPOSE.S ANO.FOR SUCH ADOlT!ONAL PVRPOSES As THE PARTIES OR
AMERICAN ARBITRATION ASSOCIATION MAY DEEM APPROPRIATE; IAJ TO OBTAIN ADOITfONAI. INFORMATION ABOUT THE NATURE AND

MEDIATION OR-OTHER METHODS OF DISPUTE RESOLUtiON M-IGHT BE APPROPRIATE, AND (2ll AS PROMPTLY AS AFTER THE
SELECTION OF THE ARBITRATORS, A PRELIMINARY HEARING SHALL BE HELD AMONG !rHE PARTIES, THEIR AND THE
ARBITRATORS. WITH THE AGREEMENT OF THE ARBITRATORS AND THE PARTIES, THE PREliMINARY HEARING MAY BE NDUCTED BY
TELEPHONE CONFERENCE CALL RATHER THAN IN PERSON.-AT THE PRELIMINARY HEARING THE MATTERS THAT MAY E CONSIDERED
SHALL INCLU.DE, WITHOUT LIMITATION, A PREHEAR!NG SCHEDULING ORDER ADDRESSING (AJ EACH PARTY'S DUTY TO SUBMIT A
DETAILED STATEMENT OF CLAIMS, DAMAGES AND!OR DEFENSES, A STATEMENT OF THE ISSUES ASSERTED BY EACH P)!/RTY AND ANY
LEGAL AUTHORITIES. THE PARTIES MAY. WISH TO BRING TO THE ATTENTION OF THE ARBITRATORS: \B) RESPONSES AND/OR REPLJES TO
. THE PLEADINGS FILED IN COMPLIANCE WITH SUBPART 2{A); \C) STIPULATIONS REGARDING ANY UNCONTESTED \D) EXCHANGE
AND PREMARKING OF All DOCUMENTS WHICH EACH PARTY BELIEVES MAY BE OFFERED AT THE FINAL ARBITRATION HEARING; (EJ THE
!OENTIFICATION AND AVAILABILITY OF WITNESSES. INCLUDING EXPERTS, AND SUCH ADDITIONAL MATTERS REGARDING WITNESSES
INCLUDING THEIR BIOGRAPHIES AND A Sf:iORT SUMMARY OF THEIR EXPECTED TESTIMONY, (F) WHETHER A STENOGRAPHIC OR OTHER
OFFICIAL RECORD OF .THE PROCEEDINGS SHALL BE MAINTAINED; AND (Gl THE POSSIBILITY OF UTILIZING MEDIATION OR OTHER
ALTERNATIVE METHODS OF DISPUTE RESOLUTION.
If! F6R PURPOSES OP THIS PROVISION, "THE MEANS DEBTOR AND SECURED' PARTY, AND EACH AND AL-L PERSONS ANO
ENTITIES SIGNING THIS AGREEMENT OR ANY OTHER AGREEMENTS. BETWEEN OR AMONG .ANY OF THE PARTIES AS PART OF THIS
TRANSACTION, "THE PARTIES"' SHALL ALSO INCLUDE INDIVIDUAL PAFITNERS. AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AG.ENTS
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AND/OR REPRESENTATIVES OF ANY
0
.AATY TO SUCH DOCUMENTS, AND SHALL INC:' ANY OTHER OWNER AND HOLDE.9 OF, rHJs
AGREEMENT: .
{g) THE PARTIES SHALL. HAVE THE !\IGHT TO INVOKE SELF HELP REMEDIES {SUCH AS SETOFF, NOTIFICATION OF ACCOUNT DeBTORS, . ."_;
SEIZURE ANCHOR OF COL.LATERAL., AND OF-PERSONAL. PROP.EATY-AND REAL: PROPERTY COLLATERAL!
BEFORE, !DURING OR AFTER "ANY_' AND/OR .RE\lUE$T ANCILLARY OR PROVI$10NA:L .JUDICIAL tSUCH AS
GARNISHMENJ, ATTACHMENT; SPECIFIC PERFORMANCE, RECEIVER, INJUNCTION OR RESTRAINING ORDER, AND SEQUESTRATION!
BEFORE OR AFTEI:I ANY ARBITRATION. THE PARTIES NEED NOTAWArr THE OUTCOME .OF THEARBITAATION"BEFORE USING SELF-HELP

LAW BE AVAILABLE THE ARBITRATORS,
(h) THE PARTIES AGREii THA:T ANY ACTION REGARDING ANY CONTROVERSY BETWEEN THE- PARTI.ES SHALL- EITHER BE BROUGHT BY
ARBITRA ON, AS OESCRtnEO HEREIN, OR BY JUDICIAL PROCEEDINGS, BU1' SHALL NOT BE .pURSUED SIMULTANEOUSLY IN DIFFERENT. OR.
A TIMELY WRITTEN NOTICE OF INTENT TO ARBitRATE PURSUANT TO THIS AGREEMENT STAYS AND/OR ABATES
ANY ANDiALL ACTION IN A TRIAL COURT, SAVE AND EXCEPT A HEARING .ON A MOTION TO COMPEL ARBITRATION AND/OR THE ENTRY
OF AN ORDEJil COMPELLING ARBITRATION AND STAYING AND/OR ABATING THE L.!TIGATION.PEND!NG THE FILING OF THE FINAL AWARD
OF THE ARBI[RATORS, ALL. REASONABLE A!NO NECESSARY ATTORNEY'S FEES AND ALL. TRAVEL COSTS SHALL. BE AWAR.DED TO 'rHE
;'PARTY ON ANY MOTION TO CiOMPEL ARBITRA'T'ION AND MUST BE 'PA;IDTO SUCH PARTY WITHIN TEN (10) DAYS OF THE
SIGNING OF THE ORDER COMPEtLING ARBITRATION, . . :
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ttl ANV AGGRIEVEO PAI\TV s:HALI,. SERVE A WRITTEN .NOTICE OF.INTENT T.O ARBITRATE TO ANY AND ALL OPPOSING PARTIES WITHIN
360 DAYS AFTER DISPUTE HAS ARISEN. A DISPUTE IS DEF.INED TO HAVE ARISEN ONLY UPON RECEIPT OF SERVIC.E OF JUDICIAL
PROCESS, INCLUDING SERVICE OF A COUNTERCLAIM, FAILURE TO A WRITTEN NPTICE OFINTENT fO ARBITRATE WITHIN THE TIME
SPECI"FIED ABOVE SHALL I!E DEEMED 'A WAIVER OF THE. AGG;ftiEVEO f!ARTY'S RIGHT TO COMPEL ARBITRA.TION OF SUCH CLAIM. THE
ISSUE OF WAIVER PURSUANT TO THIS AGREEMENT IS AN ARBITF.IABL.E DISPUTE.
\j) ACTIVE PARTiCIPATION IN PENDING LITIGATION. DURING THE 31$0 DAY NOTICE P.ERiqD, As PL.A1NTIF.F OR D.EFENDANT, IS
NOT A WAIVER OF THE RIGHT TO COMPEL ARBITRATION. ALL DISCOVERY OBTAINED IN THE PENDING LITIGATION MAY BE USED IN ANY
SUBSEOU!=.NT" ARBITRATION PROCEEDING, .
I
(k) THE PARTIES FURTHER AGREE THAT !I) NO ARBITRATION P-ROCEEDING HEREUNDER SHALl BE CERTIFIED AS A CLASS ACTION OR
PROCEED [AS A CLASS ACTION, OR ON A BASIS INVOLVING CLAIMS BROUGHT IN A PURPORTED REPRESENTATIVE CAPACITY ON BEHALF
OF THE GFNERAL PUBLIC, OTHER CUSTOMERS OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY SITUATED AND (II) NO ARBITRATION
HEREUNDER SHALL BE'CONS.OL.IDATED WITH, OR_JOINED IN ANY WAY WITH, ANY OTHER ARBITRATION PROCEEDING.
U1 ANY: AR.BITRATOR SHALL .se KNoWLEDGEABLE IN THE SUB-JECT MATTER OF THE DisPuTE. EACH OF THE PARTIES SHALL
PAY AN EQUAl. SHARE OF THE ARBITRATION COSTS, FEES, EXPENSES1 ANC THE ARBITRATORS' FEES,COSiS AND EXPaNSES.
tml STATUTES OF LIMITATIONS WHICH WciUI.O OTHERWISE BE APPLICABLE SHALL APPLY Tb ANY .AND ALL CLAIMS ASSERTED
IN ANY ARBITRATION PROCEEDING HEREUNDER AND THE COMMENCEMENT OF ANY ARBITRATION PROCEEDING TOLLS SUCH STATUTES
OF LIMITATIONS, .
I
(nJ IN ANY ARBITRATION PROCEEDING SUBJECT TO THIS PROVISION, THE ARBITRATORS, OR MAJORITY OF THEM, ARE SPECIFICALLY
EMPOWERED TO" DECIDE !BY DOCUMENTS ONLY, OR WITH A HEARING, AT THE ARBITRAT-ORS' SOLE PREHEARING MOTIONS
WHICH AfiE SUBSTANTIALLY SIMILAR TO PRE-HEARING MOTJONSTOOISMISS ANO MOTIONS FOR SUMMARY ADJUDICATION,
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(o) THIS ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION, AMENDMENT,.OR EXPIRA'tlbNoF THE AGREEMENT IN WHICH
THIS PROVISION IS CONTAINED,.UNLESS ALL OF THE PARTIES: OTHERWISE EXPFiESSL Y AGREE IN \-VRITING,
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(p) THE PARTIES. ACKNQWLEOGE THAT THIS-AGREEMENT""EVfDE.NCES .A 'INTERSTATE COMMERCE. THE
FEDERAL ACT SHALL GOVERN THE ENFORCEME.NT, AND PROCEEDINGS PURSUANT i'O THE
CLAUSE "Cf:F THIS AGREEMENT.
tq! TH,E OR A MAJORITY OF THEM, ATTORNEY'S FEES ANO TO THE PARTY
PURSUANT TO THE TERMS OF THIS AGREEMENT.
(r) NEITHER THE PARTIES NOR THE ARBITRA-TORS MAY DISCLGSE THi: EXISTENCE, C0NTI:NT; OR. "RESULTS OF ANY ARBITRATION
HEREUNDER WITHOUT PRIOR Wffl,ITTEN CONSENT OF ALL PARTIES AND/OR COURT ORDER.
(s) VErJUE OF ANY ARBITRATION PROCEEDING HEREUNDER SHALL. BE IN BHAP. COUNTY, TEXAS.
SECTION X. .
(a) SAtmr!ty Interest Abso!pte,AU rights 0f"the Secured Party and the .!ecurltY Interests hereundenha!! b.e absolute and uncondltloria!lrrespectlve
of: . . . . , .
(I! any change In the time, manner, amount or place of payment Of/ .. Or In any other term of, all or any of the Indebtedness, or any other
amendment or waiver of or any consent to any departure from the Prl:imisSory Note or any. Loan Document:
{i{) any. exchange or release or nonperfectlon of all .or any part ot the or any Other collateral, or any release from, amendment to,
Waiver ot or consent to departurd from any. guaranty, for all or 'ny'ot the lnd!!lltedness; or. .
(Ill) to me fullest extent permlt:ted by law, anY Other"clrcumstances which might otherwls"Ei cOnstitute a defense ilvaHiible tO, .or a discharge of
the
1
Debtor or a "third fllirty Pledgor,
\b! !ndAmntibetiM, The Debtor agreos to indomnlfy the Secured Party and hold the PartY harmlest from and agtJinst t!nY and all
liabllltles, obligations. losses. ponaJt!es, actions, Judgments, su!ta, coau, expenaes or dls.bursementa of any kind of nature whatsoever
''
which may lmpos&d on,)ncurred by, or against the Secured Pariy In any.wrw _In any arising out of or connection with .;;
this Sec!JrlwiAgr&ement, ths DoCuments or the transactionS or "there"by otl'!er than thDoe arising Ol.!t of the :: ... :::
P11rty's default, neglluerica or willful ri"llsQond4CJ In Its obllgiltlona under.tliJs security or. the Loan Without
limitation of ihe fOr!)Qolng, the DebtOr Will relmburse th& seCured Partv for- all eXPei"ISes .. {Including for J&"gal aerv!Ce's of .every kind) of, or
Incidental to,
1
the neg_otietion of, !ttarlng Into and of of Pr.o'(lslons and .of lndebtedness, and or
attempted sa.\e, lease or othlr dlsposltlon of, and any collection, aettlemant of any of th"G Collater.tll and
or auertlng the rights and claims the Secured Perty fn t.hereof, erid for th8. care of tlie Collateral and de.tendlng or asa&rting
th& rights ct"almaof the Secured: Patty ln.res"pect thereof, by Htlgiltiooor:othilrwlae, Including expense of fill such e"xp_ens.es shall
be D.!lbtor' s . . .
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THEBE. ABE Nb UNWR!iTEN ORAl AGBEEMENTS.BgTWEEN THE pA.RT!ES.
Dated. FEBRUARY 2008
DEBTOR: DEBTOR:
. SEE SlGNAW PAGg ATTACHED-HERETO ANiFfNCDRPORATI!D l!ERlliN.
By: . . . ~ B ~ y ~ ' - - - - - - - - - - - - - - - - - - ~ - - - - - - - - - - -
DEBTOR: . DEBTOR:
By: By
DEBTOR: DEBTOR:
By: By:
D.EBTOR: DEBTOR:
By: By:
Title:

lBCOOOt 06/22/0l
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SIGNATURE PAGE TO SECURITY AGREEMENT
DEBTOR:
Delta Produce, L.P.,
By: Delta Produce Management, LLC,
General Partner
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A.
B.
c.
EXHIBIT "A"
Equipment. All equipment ofDebtor now or hereafter acquired by Debtor, including
without limitation, furniture, machinery, vehicles and trade fixtures, together with
replacements for and improvements equipment, whether now owned or at any
time hereafter acquired or made, together with all tools, parts and appurtenances now
or at any timer hereafter used in and together with all proceeds of the equipment
described br referred to above, including insurance payable by reason of loss or
damage thereto, and all proceeds of any policy of insurance required on the Collateral
by Secured Party, including any reftmds or unearned premiums in connection with
any cancellation, adjustment or termination of any such policy of insurance.
Inventory. All inventory ofDebtor, wheneveracquired and whether now or hereafter
existing, including but not limited to all goods, wares and merchandise intended for
sale or lease by Debtor or to be furnished by Debtor, under contracts of service and
all raw materials, goods in process, finished goods and supplies of every nature used
or usable in connection with the manufacturing, processing, packing, shipping,
advertising, selling, leasing or furnishing of such services, goods, wares and
merchandise; all certificates of title, manufacture's .statements of origin and other
documents arising from or related to such inventory; and all accessions, attachments
and other additions to, substitutes for, replacements for, improvements to and returns
of such inventory; and all proceeds of such inventory.
Fixtures.
(l)
(2)
(3)
All of the property, personal or otherwise, whether now existing or hereafter
arising, existing or created, now or hereafter attaChed to or incorporated into
or used in or about the Debtor's premises, including all furniture, appliances,
furnishings, goods, equipment, and machinery owned by Debtor and other
tangible personal property now or hereafter affixed, attached or related to
such property ornow or hereafter affixed, attached or related to such property
1
or used in connection therewith, and all replacements, substftutions and
additions for or to any of the foregoing;
All accessories, attaclunents and other to, substitutes and
replacements for, and improvements of, the property de$cribed in (a) above,
whether now owned or at any time hereafter acquired or made, together with
all tools, parts and 'appurtenances now or at any time used in connection
therewith;
All products and proceeds, including,without limitation, insurance proceeds
of, and additions, improvements and accessions to, all and any of the property
described above, excluding proceeds used to replace wornout or obsolete
equipmeni or other property.
D. Accounts Receivable. All accounts and chattel paper of Debtor, whenever acquired
and whether now or existing, including, but not limited to, accounts and
chattel paper which arise out of: (i) the sale or other disposition of goods; (ii) the
furnishing of services; (iii) the furnishing of, the use of, or the lease of any of the
Collateral, and (iv) the agreement to provide any of the above; and all proceeds
relating to, resulting from or arising in connection with any such accounts and/or
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chattel paper. . ( .
E. General Intangibles. All General Intangibles of Debtor, whenever acquired and
whether now or hereafter existing, and all proceeds thereof.
Together with all books, records, files, computer. software, documents and other information
pertaining to, and all containers and for, the property described or referred to in subsections
A through E above, and the proceeds of all of the foregoing.
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a TexaS partne;rship
SECURITY
AGREEMENT
The undersigned Debtor, Owner of Collateral, whether one or inore, and INJ'ERNATIOOJ, l!,NK OF COMMERCE
130 E. TRAVIS .. SP.N ANTQNIO. TEXAS 782Q5
thereinafter called enter Into this Security Agreament and for good and valuable conslderatlon,,the rac'eipt of which Js hereby
acknowledged, and agree as follOws:
SECTION 1: Creation of Security_ Interest. .
Debtor hereby grants to Secured Party a first and exclusive lien and security Interest In all of the personal property ot Debtor, wherever located,
and noW owned or heroatter acquired, Including the property described In Section !I of this Security Agreement !the "Co'!lateral"l to secure
payment and parformance Of the )ndabtadness In Section Ill below).
SECTION II: oe:scriptlon of Coll11teral,
1. The security Interest Ia granted In the following collateral:
a. Describe the collateral and, applicable, check boxes and provide Information Indicated below.
SEE EXHIBIT '
11
A
11
.. ATTACHED 'HERETO AND INCORPORATED HEREIN
b. D The above goods are to fixtures on: !describe real estate: atte.ch additional sheet. !f.needed)
2 D The above tlniber Is standing on: idescrlbe real estate; attach additional sheet, If needed)
3 D The above minerals oi- thO like (Including oil end gas) or accounta will be financed 11t the weU hlied or mine head.of the well
or mine located on: (describe real estate; attach additional sheer, If neadecij
c. If b. 1, b.2, or b,3 above Is checked, this seCurity agreement Ia to be f!(ed for record In the reel estate records. !The description of the
real estate must be sufficiently specific as to give constructive notice of a mortgage on the realty}.
O The De'btor not have an lnterast of the name of a record of the real is
D All substitutes and replacements for, accessions, attat:hments, end other additions to, 11nd tools, peru, and equiprrient used In
connaotlon whh, the above property; 8nd tha Increase and the unborn. young of animals and poultry,
E All Pltlpurty similar to the above hereafter acquired by Debtor,
F All proceeds, products, and pro !ita of the Collateral are Included . Coverilge Ot products and proceeds .for financing statema"nt
purposes Is not to be as giving Debtor eny rights with respect to the Collateral, and Debtor Is not authorized to
sell, lease, otherwise transfer, fumlsh under contracts of service, manufacture, process, or assemble the Colletere!, except In
accordance with the provlslans af this Sacurlty Agreamant. Any additional sheets describing .the Collateral, the real estate, or other
matters are Incorporated In and mo.de a part of this Jnstrument.
2, Classify the collateral under one or rnori! of the following Business And Commerce Code classiticatloi'IB:
D
Consumer Goods
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Farm Produt:t's
[lQg
Equipment (business usa) General
D
Equipmam [farm use) Inventory
8
Investment Property
D
Chattel Peper
Instruments

l..atterOf-Credlt Rights

Accounts Support Obligations
Deposit AccoUnts !..lens on Government Assets
8
D
Sales Of Payment Intangibles and Promissory Notes
Agricultural Uans
And to th\1 extef\t not listed aboVe as cc!lateral all and products of the "foregoing..
l'age't of 9
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Any used In the TeXu Business. Arid Commerce Coda {tha "Code"r end not defined In this Security "Agreement has tha meaning given to tho
term In the Code,
3 .. CI
If thl.s block Is checked, this Is a purchase nioney ucvrlty Interest, end Debtor wlll un funds to purchase the Collateral, or
Spcured Party may d!bure Iundt to tho seller of the Cot1eter11.!, and to purchue Insurance on the Cortatora\, To the eJCtent
Oelitor usfl"S tho Loan to purchase Collateral, Debtor's rapBymerit Of the Loan shall apply on a f!rstlnflrstout" basis ao that tha
,portion :Of the Loan used to purchaae a particular Item of Collateral shall be paid In th11 chronological ordar the Debtor purchasad tha
Co!lalaral. . .

If any of theCo!letsraJ Is accountS, "give the location of the olllce where records ccncernlng them ara kept Uf other than Oabtor'
5.
address shown above)J -;::;;;;;;;;;,;;;;,-;;;,;;;;"";;;;g;;;;;;-;;;;;;;;;-;;;;J;;;;;:;;;;;;;;-.;;-:==========-
commerclal Tort Cleims, a subcategorv of General Intangibles, means the Debtor' a cl11!m for
against _________ _
SECTION'III: INDEBTEDNESS
This assignment and grsnt Is mad a to Secured Party to ueura the prompt and unconditional of, and the 11nd exclusive aecurJiy
!nterest hereby to Sacured Pany secures the payment and performance of, the following \oollectlvefy, t!'le 'lndebtudnns"l:
. .
Any and alllndebtednns, liabilities and/or obligations o1 Debtor, or any of the undarslgf\ed If more than olie, to. Secured Party, jointly and/or
severally, and In llnyt:tpaclty, whether 111 borrower, or now or hereafter owing, created and/or arising, and regardlen of
how evidenced or arl$lng, u to outstanding and unpaid principal, 11ccruad arid unpa)d Interest, attomaya' fees,. collection costs, and all other
syms owing. bh, or any of t/111 Jf more than one, . lncludl.ng but not llmlted to
that certain ory Note 6f even date herewJ.th executed by Delta Produce. a Texas l:imi1;ed
part:ru!rshin and IOOde rn:wJhle tn the qrdgr of Secured J?m-t:y in the nrjgjnal princtpal snn of $600 cm.oo.
and lunher without limitation to:
A, eny and alllndabtednes& of:
Uf Indebtedness b not aolely of Oetitcrl or any of them If mprO than one, to Aasignee, Jolnt!y tnd/or uvarally, and ln any capacity,
whothar u borrower, guarantot, or otharwlae, now or hereafter owing, creetadand/or arla!ng, and regarclleu of how evidenced oi"
arising, Including, without J!m!tat!oil:
B, any commercial loan or Jndebtednass;
C. any credit cerd or other con5umer type of loan;
0, any lndebtednass to checking or savings accounts (overdrafts, fees, etc,J: . . .
E. any eJCpenses Incurred In tha proteCtl9n or maintenance of the collateral securing any of such llabmtles, loans, and obligations:
F. any aJ<penseslncurred In tha Colleet!on of any Indebtedness and!Or obligation:
G. any letters ol CN!dlt and/or Indebtedness atl1ing out at, or advanced to pay, !ettera of credllti"anaactlonsl
H. any lndebtednau, however, evidenced, whether by promlnorv nota, bookkeeping ontrv, eroctronlc ttansfor, checks, draft or other
Items, or by any other manner or form:
any oth&t Indebtedness of Debtor of tho parsons or errtltln set forth In subparagraph A. to any flnanclal !nstltudon
afllllated with International Bancshare5 Corporation, Jointly saverally, and in any :oapeclty, Whether as borrower, guarantor, or
otherwlae, now or hiirealter owing, created and/or arising, a.nd regardless of how evidenced or arising;
J, any and an eJCtans!ons, modll!cstlcnS, substitutions and/or renewals of anY of the above described Indebtedness;
K. ony end all costs lhcurrod by Secured Party to obtalri, preserve end enforce this Security Agreement, collect the Indebtedness, snd
maintain and proaeive the Collatarel including without Umlutlon. ell taxes, assessmonts, attorneY' fees "and legid expenns, end
eJCpanses of aals:
l. the sale by Debtor and f1!a purchase by Secured Pany-;af Accounts:
M. the aala by Debtor end the purcllcn by SocursdPeny of Chattel Paper;
N. the salt by Debtor and tho purchcaa by Party of Peyment Intangibles;
D. tha aale by Debtor and tlla purthue by Secured Party of Promlasory Notes: and
P,. any of the foregoing that Arises altai" ffio flUng of a petition In liy or against Debtor under the Bankruptcy Code, If
tha obligations do not eccnw bacause of the automatic stey\Jnder SankruptcyCcde 362 or otherwise,
To the extent by law, lor purposu hereof It b th1t tha lndebtednus Include all clanes ol whathar evldencad
by notes, open accounts, overdrafu, or and .whether direct, Indirect or contingent, regardless ol clasa, form or purpose 11nd
Including but not limited to.._ loans for consumer, agricultural, business or personal pu_rposus. . . .
The foregoing shall under: no clrcuiTijl.tances be limited to the axlstenca or nonaxlstence ol collateral for such Indebtedness, o; the type of
col\a,ere! covered thereby, The lndeb"tedness doas not "Include amouill owed to a homeataad eqlllty loan,
Notices and other communications pertaining to tills Agreement shall be In writing and shun be only If dallverad In pet$on
or mailed U.S, cert!l!ed mall, return receipt requested, postage prepaid, to Secured Party If sent to:
'" ' . al)d sent Mail to Dabtor,.duly stamped end addrossed to Debtor
either at the street address, the first shown or at the maiHng addfesi, If ahy, given by amf/o"r fer Dabtor at the beginning_ of this
agreement lor at such other addrus n may have be.en designated inolt In writing by Debtor to Seourad Party/; provldad, however,
.ectuel notice to Debtor, however given or racelvad, shall always be elfectlve wharf glvon or received,. l:JCcept es otherWise" required by taw,
any notice given ormeda pursuant shall deumad given on the date of personal de!lve,rv or, It melled, on the date such
notice Ia daposltad In .tht U.S. Mall, lt. received by Sa cured
SECTION lVI PERFECTIO!;I OF"SECURITY INTERESTS.
1, Filing Of Financing Stlz.man1.
m Debtor hereby authoriZes Secured Party to file a Statemeilt. an A:mimded Financing- and a Contlnuatlcn Financing
Stetement lccllectlvely raforred to as the "Financln11 Statement") dascllblng the Colletaret.
t!!l Debtor hereby author"lus Secured tc me a Financing Statement describing any agricultural !!ens or other statutory !lens held by
Secured Party, .
JlH) Secured Party sllalj reoelve prior to the Closing dn .ofllclal report from the Secretary of State. of Co!latera! State, tho Ch!af
.. Executive Dlllca State, end the Oabtor State 1eaafl at defined below) [the Reporta') Indicating that Secured Party's aecurlty
lnter'estl& prior to all other seeutltv Interests or othar Interest$ reflected In the report. .
!lvl secured hall receive at anY tlmg folloWing tho Closing an SOS Report Indicating that Securad Party's seaurlty lntereotle prior to
e!l other security lnteram or other Interests rd!lectad !I) the repcrt.
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2. Possen!on.
I!) 01tbtor shell have possession of the Co!leterlil, except whetlt e){pressly otherwise In Jhls Securl!Y Ag;eemant or
Party to perfect Its security Interest by possesslgn only, or In addltlori to ftta flUng of a financing Stetemant1
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U!l Where Collater_el Is In the posses;slon of a third pa!"tv, Debtor w.ill Join with Secured Party In notifying the third party of Secured
secUrity Interest and obtaining a Control Agrsement from the third party that It Is holding the Collateral for the benefit of Secured Party.
3. Control Agr .. ment. Dqbtor will coopereta with Sacurecl Party in obtalnlng'a Control Agreement In form end substance satisfactory to
Securecl Pliny with respect io Collateral consisting of:
Ul Deposit Accounts,
Ul) Investment Property,
(iii! LetterOf-Credlt Rights, end
(iv) Electronic Paper.
4, Marking of Chattal Paper. Debtor wlll not create any Chattel Paper V{lthout placing a lagend on the Chattel Paper acceptable to Secured
Party lndloat!ng that Sec4re,d Pony has a security interest In, th_e Chattel Peper. .
SECTION V: Debtnr
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!J ReprUMlt!!!lon Wnrrent!es nnd .AgrMmants
A. General f\epreuntatioru. and
Debtor warrants and agrees that:
111 Oebtor has full pfmer to enter Into thitl Secur)ty Agreement; this Security Agreement has been duly authorized,
executed and deUvered by Debtor and constitutes the velld a"nd binding Obligatio{\ of Debtor enforceable In eccotdlllicit with Its
t11tms, No consent of third "parties, a licanse, Bllthorizetioli or flUng with any" goVemmentaf authority Is required to be obtained or
121
131
141
!51 .
161
171
181
191
performed In connection with the execution, delivery, perfoi"mance of this Security Agreement
All Information supplied and st"atements made by Debtor In any financial, credit or accounting statement or application for credit
prior to, or subsequent to the execi.!tlon ol this Security Agreement are and shall be true, correct,
complete, valid, end genuine.
Debtor owns, or will" use the proceeds of any loans by Secured Party to become the owner of the Collilteral free from any set-off,
claim, restriction, lien, securltllnterest or encumbrance except this security interest end liens lor taxes not yet due.
No Financing Statement covering the Collateral or Its proceeds Is on file In 11ny publl.c' office and Debtor will not permit any
Financing St11tement covering .any of Debtor's Collateral or the proceeds thereof to haresftet be on file In any public office excePt as
may Qe flledpurauant to this Security Agreement.

an appraisal of the Collateral; IIIII tax receipts; IM evidence of Insurance, and (v) Df" other Information required by Secured Pany In
connection with the or the Collaterll1,
Debtor wm net use the Collateral pr. permit Collateral to be used In violat16n of any statute, ordinance or other law or
incons;i&tent!y wl;!l thE! terms of l!nY. P.C!Icy. of. insU({Ince and Y(l!l Pa_rty and Ita agents,
representatives, and employees to examine the Collateral at all reasonable tlmea, and for auch purpose, SeoUrOd Party rilay enter
upon or into any where iha Collateral may bli toc.aied without being guilty of, and/or held liable fo.i-, trespass. Debtor wll!
furnish to Secured Party upon request aU pertinent infotmatlon regartling the Collateral .
The Collateral shall remain In possession or control at ell times at Debtor's risk of lou Uflless Secured Party has taken
possession of the Collateral, and be kept at Debtor's address set forth above where Secured Party may Inspect It at any time,
except for Its temporary removal In connection with Its ordinary usa or unless Debtor ilotifies Secured Party In writing end Secured
Party consents in writing In advance ollts removal to another location.
Debtor shell pay pri(!r to delinquency e1! taxes, !!ens and aga1ru:;t the CoUatera1, and upon Debtor's fe1!ure to
do so, Secured Party at ItS option. may pay any of them and shall be the sole of the leg11!1ty or thereof ancl the
amount necessary to discharge the same, Such pat{ment shs!l become part of the Indebtedness secured by this Security Agraement
and shall be paid to Secured Pany by Debtor lmmecllately and without demand, with Interest thereon at the maximum rate allowed
by app!!oab!e law.
Hazard k"!surance must be fLEn!shed at all times for the fu!l amount of the Indebtedness With respect to s!l Ccllatera! Unc!uding
coverage for a!! materiels and again at risks of Fire, Windstorm, Hurricane !if the Co11etera11s written 100 miles cf the
Gulf Coast}, Hall and Collapse !including cost of debris removal) end st.JCh .other risks liS Secured Party may require, including
standard extended coverage, Such Insurance policies shall contain. such terms, be in a form, tor a P,etlod and be written by
companies satisfactory to Secured Party, Federal flood insurance Is also required In those geographic areils that are subJect to such
loss. The policy shell also contain a standard mortgagee's endorsement providing for payment oleny Joss to Secured Party. All
policies of ins"uranca shall provide for tar days v.:rhten minimum cancef!lltlon notice to Secured Party.
of c;verage must be a copy of the original policy and loss paYab'e clause, Certificates. or letters of coverage will not be
accepted.
Secured Party Is authorized to act aa attorney-in-fact for Debtor in obtaining, adjusting, settling, end canceling such Insurance and
endorsing any drafts drawn by Insurers of the Collateral. s"ecured Party inay apply any and/or ell proceeds of such .Insurance, which
may be received by It In peyment of the Indebtedness secured theraby, whether such Indebtedness 1:; currently due or net: Secured
Party reserves the right tO purchase single interest Insurance (which provides only protection for Secured Party) ll(ld add
premium for such Insurance together with interest at the loan pre-maturity contract rate to the balance of the losn. This premium is
due upon .demend,.or;mliiY be.pald.Jn tuU.at an\! time. The single Interest premium Is written by a company authorized to
transect bus1nllSS in the State of Texas at lawful rates not fixed or apprqved by the State Ejoard of Insurance.
Secured Party, In Its sc!a and without obligation on Secured Party to do may advance and pe"y sums on behalf end for
the benefit of Oebtcr for costs necessary fer the protection and preservation .of the collateral and other cOSt$ that mey be
appropriate, In Secured Party's sola discretion, Including but not limited to InsUrance pram")ums, ad valorem taxn, and attorney's
tees and legal costa and expenses, Any sums. which may be so paid by Secured Party and all sumS paid for Insurance premiums, as
aforesaid, including the costs, expenses, end attorney's fee!! paid in-any suit affeCting said CO!laterar shell bear Interest from the
dates ol such payments at the loan contra.ct lnte_rest rete applied. to the unmatured pr1nc1pe! balance and a hall bepald by Debtor to
SecUred PartY up"o"n Oemand, and Sh!lll b.e deemed a part of the Clabt end recoverable lis such in a!J" liS_PeCt$. Any sum to be
reimbUrsed ba secured by this Security Agreement.
1101 Debtor shall, at Its own expense, do, make, procure, execute and deliver ell acts, things, writings and assurances as Secured Party
may at any time request to protect, assure ot anforce Its Interests, rights and remedies creatad"by, provided in or eme_natlng from
thi.s Security Agreement.
(11) Debtor shall not lend, rent, laesa or otherwise dlapose of the Collateral or any Interest therein except as authorized In this Security
Agreement cr in writing by Secured Party, and Debtor sha11 keep the Collateral, Including the"procaods thereof, free from unpaid
_charges, Including taxes, and from !lens, end securily lnterast9 other than thlit Of Secured Pany,
(1;2) Debtor sign and alone Or with Party any Financing Statamant or" other document or Procure eny document
and pay all connected costs, necessary to protect the security Interest-under this Security Agreement against the rights or Interests
of third perSona. Deb1or eh.tlll pay the costs :of ilen searches and certificate; and ell f!Un9 fees, continuation fees, and fees fer
certificates of good stanPing and ether information required by Sepured Party, :
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11.31' :. Oe&tor shall at' aU times kep the Collateral 'afld Its proceeds separate end distinct from other property of Debtor end shell keep
aqcureta and complete records of the Collateral and Its proceeds. Debtor shell presarve the Collateral end pay ell costs necessary to
do so, !nc!udlns {but not limited to) feed, rent, storage cpsts, .and expenses of sale.
{1-4) If Secured Pany. should at any time be of the opinion that- the Collateral has declined or may decline In value, or Is otherwise
insufficient to adequately B'llcure the or should Secured Party deem ltsslt Insecure as to payment of the lndsbtedness,
then Secured Party may call tor propertY to be pledged and/or covered by this Slltlsfactory to Securad Party.
{151 If any Collateral or proceeds include obligations of third parties to Oebtor,tha transactions creating those obligations will conform In
ell respect:J to appllcable state end federal consumer credit laws,
(16) In the averlt or any other person or persons .. seeks to enjoin Secured Party from taking any action in connection with the
IndebtedneSs oi the t!nforcament of Securei:J Party's rights In the Collateral, Debtor hereby agrees to give written notice to the
President of Secured Party, at the address of Secured Party set forth in the first psragrapli of this Security Agreement, or such
other person or aQdress as Secured Party may designata In wrltlng to Debtor, prior to seeking any such Injunctive rel!ef.
(171 Debtor shall indemnify and hold harmless Secured Party from and against any and all claims, Jossas and l!ablllties growing out of or
resulting- from this Security Agreement flncluding, without limitation, enforcement of this Security Agreement), except c!alma,
, or lieblfitles resulting from the gross negligence or willful of Secured Party, agrees, upon demand, to pey
to Secured Party amount of any Qnd al!.expensas, Including, but not llrllited to; the tees and disbursements o.llt:J counsel and of
any experts and agents, which Secured 'Part'( may Incur in connection with !el the preparation, execution, delivery, :flUng, recording
or administration of this Security Agreement or the oOtaining of edvlce from counsel with respect to Its rlght3 and remedies under
this Security Agreement, {b) the custody, preservation, use or operetlon of, or the seta of, collection from, or ot!ier realization upon,
any of the Collateral, !c)the exercise or enforcement of any of the rights of Secured Party hereunder, !dl the defense by Secured
Party of any Injunction procl!ed!ng related to the lhdebtednsss or the Collateral, or !el the fe!lure by Debtor to perform or observe
any of the provisions hereof. Debttir agrees to pay Interest on any expense or other sums due to Secured Party hereunder (save and
e.xcept Insurance) that ere not paid when due at a rate per annum equal tc tha highest rste permitted by applicable taw,
{1 Bl As eddltlo.nal security for the Debtor hereby asslgoo, pledges and Q-rants to Secured Party 11 security .a !len
and contractual right of set-off In and to aU of the Debtor's money, credits. accounts, sacurlt!ea, certltlcetel.l ami/or other property
now In, or at any time hereafter coming within, the custody or control of Secured Party or any member Bank or branch Bank of
International Bancsheres Corporation, whether held In a general or specie! account OJ deposit, or for safekeeping or othsl'wlse, Every
such security lntlirest and right of set-off may be exercised without demand or notice to O"ebtor. No security lntarest-'Of right of set
off shall be deemed to have been waived by any act or conduct on the pert 'ot Secured Party, or any failure to exercise such right of
set-oft or to enforce such security interest, or by any delay In so doing. Every right of aet-otf and security Interest shall continue in
full Ioree and effect untll such right of setoff or security Interest Is specifically weivad or released by sn instn.ni'lent in writing
executed by Secured Party, foregoing Is In addition to and not In lieu of any rights of set-off allowed by laW,
cnn Debtor shall asSist Secured Party In complying with the federal Assignment of Claims Act !end any successor statutes) and similar
Jaws to enable Secured Party to become en eulgnee under such Act and otherwiae comply with such Jaws, Debtor shell preserve
the liability of all account 'deQtors, obligors, end siu::ondarv parties whose obligations are peri of the Collateral. DeDtor shell notify
thil Secured Party of any change occurring in or to the Cqtlateral, or In any tact.or circumstances wurranted or represented by
Oebtor in this agreement or furnished to Party, or If any ?f Default occurs .
(20) Pebtor will not allow the Colletara_l to to real estate, Eixcept goods Identified herein as fixtures,
{21) All extended or note!sl wlll Qe considered executed on the date of the original note(s).
{22)' Oebtor shell comply with all envlronr:nental laWs and regulations applicable to the Cbllatare! end tl'le premises In which the Co!lateral
is located and shall nOtify Secured Party upon receipt of anY notice or other lnformetlo,n as to any environmental hazards or violation
ot such lows. Secured Party may Inspect all promises In which the Collatera_! Is located and the Collateral as to Its end their
compllance with Indemnifies and holds harmles$. Secured Party ,for any breach of t.J:le foregoing end .for aU
losses, costs, fines, damages, Including court costs and attorney's fees, Incurred by Secured Party to defend Itself, or to protect or
. preserve the Collateral against environmental risks, hazards, fines, and other c!alnis relating to the Collateral,
1231 Without providing Sucured Party with at thirty 130} days prie:r written notice of Debtor's Intention to do so, Debtor, untn the
!ndobt&dness ls-pa.ld In full, agrees th11t it will not:
a, In one transection qr 11 series of related transactions, merge into or consolidate with any other entity, sell !ill Or substantially all
of Its assets, or in any way Jeopardize Its-corporate exlstenue,
b. change the state of Its incorporation,
c. change Its oorporete nama,
d. change the address and/or location of Its Chief Exeuutlve Office:
e. file a UCC-1 Amendment form, end/or
f. tl!e e UCC:l Termination form.
124) Debtor has the risk of loss of the Collateral,
(25) Secured Party has no duty t.o collect any Income on the Collateral or to preserve sny rights relating to the Collateral.
B. Special znd Wa.rrantles.'
watra[lt3 end agrees that:
{1) If the" !:clleteral includes lnveritoryl
Ia) Debtor will Immediately notify Secured Party of the-disposition of any Inventory and at Debtor's expense will either assign to
Secured Party a first-priOrity security interest In any resulting account, chattel paper, or Instrument or deliver to Secured Party
cash. In tha amount of the sale price. Debtor will not sell, lease, or otherwise dispose of any Collateral except In the ordinary
coursli of business without the prior w'rltten consent of SecUred Party,
(b) Untll default Debtor may In the ordinary course of busineas, sail, lease or furnish under contract of Service any of the Inventory
normally held by Debtor for suqh purpose, provided, however, that such use of the inventory shall not be triconslstent with any
other provisions of this Security Agreement or witffthe terms or conditions of any policias of Insurance thereon, A sale In the
ordlnory course of buslnen does not Include a transfer In partlill or total satisfaction of a debt,
.{2} If the Collateral Includes accounts: . .
{e) Each account in the wlll represent the valid, legally enforceable obligation of third parties end w!ll notbe by
any instrument or chana! paper;
lb) The offlca where Debtor keeps Its records concerning accounts, If any, Is the address of Debtor sat forth at the b!lglnnlng of
_this Security Agraement.
(3) It the Includes chattel paper or dcicuinentsl .
(e) By delivering a copy of this Security Agreement to the broker, seller, or other person In possaaslon ol Collateral that Is chana!
paper or document, Security Party wlll effectively notify that person of Sec1,1red Party's Interest In the Collatara!. DB!ivery Of the
. copy of the:Sacurity Agreement will also Debtor's to deliver to Secured Party cenlflcetea or other
tvldence of the Collatttl! 11 aoon u Jt I 1veltabl1. Otbtor will lmmadltIY deliver to Saourtd Party .111 chattll end
document that are Collateral In D"ebtor.'t If that Collateral 11 hOreafter acquired, Debtor wmdellver It ty
Party Immediately following acquisition and either endorse It to Secured order or give Secured Petty 11pproprleta
executed poWers. If any instruments, chattel psper, money or monies, or documenu ere, at any time or tlmea, lnoluded In the
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Col!stera!, whether as proceeds or otherwise, Debtor will promptly deliver the same to Secured Party upon the receipt thereof
by Debtor, and In any event promptly upon demand therefore by. Secured Party. If necessary, all Collateral wll! either be
endorsed to Secu111d Party's order or accompanied Qy eppmpriste executed powera.
By mesne Secured Party, Debtor has'perfected or will perfect e,securlty Interest in goods covered by chattel
paper, It any, In Collateral.
141 If the Collateral Includes property covered by a Certificate of Title: If any certificate of title or slrnller.document Is, at any time and
pursuant to the laws of 11ny jUTisdlctlon, issued or outstanding with mspect to the Collateral or any part thereof, Debtor wll! promptly
advise Secured Perty thareof, and Debtor wll!. promptly cause the Interest of Secured Perty to be Rroperly noted thei"Elon, endlf any
certlllcete of title or similar documant Ia so Issued or outstanding at ths .tlma this Security Agroement ls"executad by or on behalf of
Cabtor, than Debtor shell. have caused the Interest of Secured .Party so to have been properly noted at or before the time of sUch
execution: end Debt?r wilt further. ptpmptly deliver to Secured Party any such cerUflc.!ltB of title or similar document Issued or
outstanding at any t!ma with respect to such Collateral, ,
(5) If the is or may become fixtures on real property described Security Agreement, being flied for record In
the reel property records of the oounty.whereln such fixtures are situated, shall oPerate also as a financing statement fllad.as a fixture
IJllng In accordance with Se"ctlon 9.402(e). of the Texas Business and Commt!rce Coda upon such of the Collateral which Is or may
become fixtures.
l6J Debtor has rights in or the power to transfer the Collateral and Its tl.t!e" to the Collateral Is free of all adverse claims, !lens, seourlty
Interests and restrictions on transfer or pledge except l!S created by this Sacur!ty Agreement.
l7l AU collateral consisting of goods Js located solely in the states and/or states previously designated and warranted by Debtor to
Secured Party.
(SJ Debtor's:
{!) chief executive ofllce Is located ln the state previously designated and warranted by Debtor to Secured Party:
Jill state of Incorporation Is the state previously des!gnaad end warranted by Debtor to Secured PerM ahd
U!il legal name Is as sat forth In the l!rst paragraph of this Sacurlty Agreement
SECTION VI: EVENTS OF DEFAULt. . .
Debtor ahall be In default under !his SecuritY Agreemer:;t t.!PDr'l the happening of any of the folloWing events or conditions !herein Called an .
"Event of Default"):
(1)
12)
)3)
14)
15)
16)
17)
IBJ
19)
110)
The failure by DebtOr or any other liable party to pay when due of the Indebtedness either principal Interest, or any other sum due
under the terms of any !nstnJmant evidencing the Indebtedness.
Default by Debtor in the purictuat performance of.any of the obligations, covenant!!, terms or provisions tonta!ned Or referred to In this
Security Agree!l'ent.
Any warranty, representation, or statement contained In this Security Agreement or made or furnished to Secured Party by .or on behalf
of Debtpr or any other person or party In connection with this Security Agreement or to Induce Party to make the loans
(describ.ed In Section Ull to have been !else In any respect when made or furnished.
Loss, theft, substantial damage, destruction, sale (except as authorized In this Security Agreement! or encumbrance to or ofany of the
Collateral, or tha making "ot anv Javy, seizure or attachment thereof or thereon, .
Debtor's death, dissolution, termlmltion of existence, insolvency or business failure; the appointment of a receiver of \Ill or any part of
the property of Debtor; an assignment for the benefit of creditors by Debtor, the ca!Ong of a meeting of creditors o.f Debtor, or the
oommnncement of any procaadlng under any bankruptcy or inSolvency laws by or against Debtor or any guarantor, surety or endorser
for Debtor; or the 'cu;:oUrrance of any of sUch events described In this part {5/ as to any person or party liable tor the payment of thil
obligations, or any portion thareof.
Any statement of the financial condition e:f Debtor or of any maker, guarantor, surety or endorser of any of the Indebtedness proves to
be false.
The Collateral becomes, .In the judgment Of Secured Party, unsatisfactory Or lnsuffh:lent In character or value,
Any maker, gUarantor, suretY or endorsflr under or with respect to the Indebtedness defaults In any obligation or l!ab!l!ty to Secured
Party.
The occurrence ol any environmentally hazardous spill, discharge or other similar event adversely affecting the Co_llateral or the
premises in which the Collateral Is located, whether such event occurs on such premises or on other premises,
Debtor, o(any of them, or any guarantor, falls to timely deliver any and all financial statementS, Income tax returns, cash flow
Information, balance sheets, acoounts receivable reports, or any other business, tax or financial information requested by Sacui"Eld
Party.
. SECTION VII: SECURED PARTY'S RIGHTS AND REMEDIES.
A, General.
l1l
"'
13)
14)
15)
!3ecured Party may axerc:hre the following_ rights end remedies either before or after an Evant of Default:
Secured P.any may take control of any proceeds of the Collateral.
Secured Party may release any Collateral in Secured Party's to any Debtor, temporarily or otherwise.
f;!ecured Party mey Jake control of any funds generated by the Collateral, as refunds from and proceeds of Insurance, and red.uce
any part of the Indebtedness accordingly or permit Debtor to use such funds to repair or replace. damaged or destroyed Collateral
covered by Insurance.
Secured Party may request Debtor from tlmo to In Party's discretion to take. any action and to execute any Instrument
which Secured Pertv may deem necessary or adylsabla to accomplish t.he purposes of this SecuritY Agreament including, without
limitation, {a) to ask, demorid, collect, sue for, recover, compound, receive and give acquittance and receipts fer montes due and to
become due under or In respoct of any Collateral; lbl to receive, endorse and collect any drafts or othar documents
chattel paper in connection With the pnceding actions: {c) to tile .any claims or take any action or Institute any proceedings which
Secured Party may deem necessary or desirable for collection of any of the Collateral or otherwise to Its rights with respect to
any of the Collateral, and [d) to complete and sign en behalf of Debtor one or more financing statements pertaining, to the Co11atera!
and tlteJhe same In an appropriate looatlon. The pc:wers conferred on Secured Patty hereunder are solely to protect its Interest In the
Collateral and shell r.ot Impose duty upon Secured Party to exercise anv such powers. Debt!Jt's appointment of Secured Party as
agent 111 coupled _with on Interest and will survive any d!sebJIIty of Debtor.
This. Security Agi"eament, Party's rights hereunder end/or :the Indebtedness hereby may bo assigned In wtJole end in
part from time to time, end In any such case _Secured Petty "she!! be fully -discharged all with respect to _the Collateral
so "assigned and the assignee shall be entitled to all of the rights, privileges and remedies granted In this Security Agreement to
Party to the extent tha same are assigned, end Debtor will assart no claim or defenses he. may have against Secured PartY agamst the
assignee; except those granted In this Security Agreement. In addition, Debtor waives end will not assert against a_ny claims, defenses
or set-offs which Debtor could assert against Secured Party except detenses which cannot be .
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{6) Secured Part'{ may enter upon Dabtor'r p(amlsas at any reasonable tlrTie to Inspect the Collateral and Debtor's books and 'records
pertfllnlng to the collateral, and Debtor shall assist' the -SaourEid Part'( In making any such Inspection.
(71 Secured Party may hotlfy the account debtors or obligors of any accounts, chattel paper, negotiable Instruments or other evidence of
Indebtedness remitted by Debtor to Secured Party as proceeds to pay Secured Party directly, SeC\Jrad Party may contat:t a'ccount
debtors directly to verify information by Debtor.
lSI Secured Party may additional Collateral or reject as 'unsatisfactory any property hereafter offered by Debtor as Collateral .
{91 Secured Party may deslg!)ate, from time to time, a certain percentage of the Collateral as the loan value and require Debtor to maintain
(10) Secured may 'present for convilrslon to cash any instrument or investmEint security or a thereof, But Secured Party
shell not have any duty to present for conversion.any of Collateral In Its possesslpn unless It shall have received from Debtor
detailed written instructions to that affect at a time reasonably tar In advance of the final conversion date to make such conversion
polislli!e.
The foregoing rightS a'nd Powers of SecureCJ Party wm be In tidd!t!on to, and net a limitation upon, any rights end powers of Secured
Party given by lew, elsewhere In this Security Agreement, or otherwise,
111) Ssoured Party has no obllgetlon to anempt to satisfy the Obligations by oo!lect!ng them from any other parson Hable for thain and
Secured Party may release, .modify or wolve any provided by any other person to secure any of the Obligations, ill! without
affecting Secured Party'li rights against Debtor. Debtor waives any right lt may have to require Secured Party to pursue any third
perSon for any of tha Obligations.
!12) Secured Party may comply with anv app!h::able state or federal law requirements In connection with a disposition of the Collateral and
compliance w!!! not be considered adversely to affet:t the oommarclal reasonsblenass of anv sale of the Collateral,
'{13} If G:eourad Party sells any of the Collateral upon credit, Debtor will bs credited only with payments actually made by the
received by Secured PartY and applied to the Indebtedness of the Purchaser, In the event the purchaser falls to pay for the Collataral,
Secured Party may resell the Collateral and Debtor shall \)e credited with the proceeds of the .sale_,
(151 Secured PartY _have no obligation to marshall assets-In favor of Debtor, or against or in payment of:
lll the-Note,
llll 11ny of the other Obligations, or
!lill anv other obligation owed to Secured Party by Debtor or any other person,
{161 This Agreement :ohe!l bind and aha!! Inure to the benefit of the heirs, legatees, executors, administrators, successors and
assigns of secured Party and shall bind all persons who become bound as !I debtOr to this SecuritY Agreement.
(171 Secured Party does Oct consent to any assignment by Debtor except as expressly provided In thls Security Agreement.
B. Remedies In Event of Dafault
. .
During the existence of anv Event of Default, or In the evant Secured Part'( deems Itself Insecure In the payment of the lndebtsdness, Secured
Party may declare the unpaid principal and unpaid and acarued Interest of the Indebtedness Immediately due In whole or part, enforce the
Indebtedness, and/or exercise any rights and remedlas granted by tha Texas Buslnasa and Commarola! Code or by this Security Agreement,
lnoludlng the following:
[1) require Debtor to deliver to Secured Party all books end records relating to the Collateral:
12l
13l
141
151
16)
17)
18)
19)
110)
require Debtor to assemble the Collateral and make It available to Secured Party at a place reasonably convenient to both parties:
take posseSsion of anv of thll Collateral end for this purpose enW any premises where ll Is located if this can be done without breach
of the peace end wm not be guilty o,f, and/or held liable for, trespass:
Sell, lease, Or otherwise dispose of any of the Co!!atarsl In accotd with ths rights, remedies, end duties of a Secured Party under
Chapters 2 and 9 Of the Texas Suslnesa -And Commerce Coda after giving notice as required by those chaptern; unles& the Collateral
threatens to decline rapidly In value, Is perishable, or would tYpically be sold on a recognized market, Secured Party Wln give Debtor
relisonaiile notice of any public sale of the Col!atarel or ot a time after which It may be otherwise disposed of without further notice to
Debtor; In this event, noJ!ce w!ll be deemed rea.soliable if It is mailed, postage to Debtor at the address speclf!!ld In this
agreement at least ten days before any public cale or ten days before the time. when tho Collatefal may be otherwise disposed of
notice to Debtor, Debtor authorizeS Secured Party to disclaim or modify any and all wsrrantlaS sst forth In Sectloit
9.01 O(dl and stipulates and agrees that such a disclaimer and/or modification. will not render the sOle commercially unreasonable,
surrender any Insurance policies covering the Collateral and receive the uneamed premium;
apply any proceeds from disposition of theCo!latar.d after default In the manner specified ln Chapter 9 of the Texas And
Commerce Code, Including payment of Secured Party's reasonable attorney's fees and court expenses;
If disposition of the Collateral leaves the !ridebtedness unsatisfied, collect the deficiency from all liable parties, Expenses of retaking,
holding, preparing for sals; sell!ng or the !Ike shall Include Secured Party's reasonable attorney's fees and legal cos.ts and/or expenses,
and Debtor agrees to pay such costs, expenses, and fees , plus Interest thereon at the maximum rate allowed by applicable law;
. n .
. Secured Party may retain all or psrt of the Collateral in full and/or partial satlafact!on of the Indebtedness pursuam to S8otlon 9.620 of
the Texas Business And Cominerce Code;
Secured Party may, without demand or notice of any kind, appropriate and apply toward the payment of any sums then owing to
Secured Party and ln such order of application as the Secured Party may. from time to time elect, any property, balance:, credits,
deposits, accounts or monies of Debtor which for any purpose Is In the possession or control of the Secured Party or eny member Bank,
branch Blink or other depository Institution of lnterne_ticna! Corporation; and/or
Secured Panv may r.ema.dy any without waiving the .default famedlad and may waive any default w.lthout waiving any other
prior or subsequent default
SECTION Vm: AOCITIONAL AGREEMENTS,
111 AU notices and other communlcetlons to Secured Petty hereunder or In connection herewith shall be deemed to have baen given when
received by Secured Party In writing et the address first Shown here!nabova. Any notice or demand or other communication to Debtor
hereunder or In connection herewith may ba given and shill conclusively be deemed and considered to have bean given and received
upon ths deposit thereof In writing In the United States Mail, duly stamped and addressad to Dabto( either at the street address, the
first ahown hereinabove, or at the mailing eddress, If any, given by andfor for-Debtor at the beginning of this agreement (or at auch
other address liS may have designated most racent!V in writing by Debtor to Secured Party); provided, however, actual notice to
Debtpr,'.howevar or urcalved, aheiJ always be effective when given or received.
(2) A copy of thla SecuritY Agrasmant or any financing statement covering the Collateral Is &ufflclent and may be fDed ea a financing
. statement. !nfcrmetlon concerning this seourlty_lnteres_t may be obtained at the office cf Secured Party shown ebova.
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!31 This Security Agreement may only be modified or limited by an agreement In writing.
141
151
Thla.sacurltv lntares.t shall neither 11tfe"Ct nor be affected by 11ny other IB:Curity for of the Indebtedness, Neither extel1llions of any of
the lndebtedriass nor releases of any of the Collateral shall. affect the validitY of this security Interest with reference to any third party.
Addlt!Dnally, foreclOsure of this lhterelit by laWIIUit doSs not J!mlt Secured Party'a remadlas, Including the fight to sell the
Collateral. under the terma of "thla Security Agreempnt, Secured Party shall have tha right to Elxercise !II rempdJea at the same or
different times and no remedy shall be a defense to any other. Secured P!!rtY shall have all rights and remedies granted by law or
otherwise- in addition to those provided inthis Security Agreement,
Secured Party may remedy any default without wa1vir1g lt. No delay by Secured Party In exercising Its rights or partially exercising its
or remedies shall waive further exercise of those remedies or rights,! The failure of Party to eXercise any remedies or
rights doe& not waive subsequent exercise Of those remedies or rights, Any waiver by Secured Party of any default shs!! not wnlve any
further default. Secured P.11rty may ramedy any default without waiving Jt, Secured Party's wlllver of any right in this SecuritY
Agreement or any default Is binding only If In writing,
161 Debtor and Secured Party Intend that tho Indebtedness shall be in $trlct compl!anca with applh::ab!e usury laWs. Jf at any tlma interest
contracted for, charged or received .under any Indebtedness securad by this Security Agreement or otherwise In connection with this
would be usurious under applicable Jaw, then regardless of the provisions of. this Security Agreement "or any other
documents or securing or otherwise executed in connection with any Indebtedness securad by this Security
Agreement or eny ect!on or event !Including, without limitation, prepayment of principal under the Nota or llcceleratlon of m11turltv by
Secured .Pertv) wh!oh may occur w!th respect to the Note, It Is agreed that ell sums detarm!ned to be usurious shill!be tmmed!etely
credited by Secured Party_-to Debtor as a payment"of prlnotpal under the Note or If the Note has already been paid, !mmad!ate!y
refunded to Debtor. All compensation which constitutes Interest under applicable lew In connection with any lndebtednau secured by
this Security "Agreement shall be amortized, Prorated, allocated, end spreed over ttre full period of time any Indebtedness Is owed by
Debtor, to the greatest extent permissible Without exceeding the applicable mexlmum rete allowed by applicable lew In effect from time
to time such period",
. !71 Secured Party may obligation which Oabtor falls to perform end Debtor agreeson demand to reimburse Secur.ed Party
lmmedllltely for any sums eo paid by Secured Party, Including attomey11' fees and other legal expenses, plus interest on those sums
from the dates of payment at the rete stated In the Nota for matured, unpeld amounts. Any sum to be reimbursed sl)all be secure:tf by
this Security Agreement, [See Section. IV, 19) tor lnsurancu re!mbun:amentsJ,
!BJ This .Security Agreement Is being executed and delivered end Is Intended to be performed in the Stete of Texas and shall be construed
end enforced In accordance with the Jaws ot the State of Texas, except to tha extent that the Coda provldGs tor the application of the
law of tha DebtOr States . When the context raqulres, singular nouna and pronouns Include the p_!ural, The rights of Secured Perty
under this Ssourltv Agreement shall Inure to the benefit of Its suceeS!Iors and assigns. Any esslgnmant of pert of the Indebtedness end
delivery by Secured Party of any pert of the Collatefel wlll fully-discharge Secured Party fronr any and "ell reaponslblllty for that ponion
of the Collaterst. Debtor's lndabtedness under this Security Agreement shall bind Debtor's personal reipresentatlves, successors and
esslgns. If Debtor Ia more then one, ell their representatives, warranties sgreemams l(ll joint and several, If any part of this
Security Agreement Is unenforceable, the unenforcaabll!ty of such provision will not affect the enforceab!Utv ot any other provision
hereof end all other provisions w111 constitute velld prcvi_slons,
SECTIOf\IIX: . ARBITRATION THE P.ARTIES FURTHER AGREE AS FOLL9WS:
Ia) ANY AND ALL CONTROVERSIES BETWEEN THE PARTIES SHALL BE BY ARBITRATION IN ACC_ORDANCE WiTH. THE
COMMERGIAL ARBITRATION RULES OF "THE AMERICAN ARBJ1RA110N A.SSOCIAT!ON IN EFFECT AT THE TIME OF FILING, .UNLESS .THE
COMMERCIAL ARBITRATION RULES CONFUCT WITH THIS PROVISiON; Afi!D IN SUCH EVENT THE TERMS OF THIS PROVISION SHALL
CONTROL TO THE EXTENT OF THE CONFUCT, ANY ARBITRATION HEREUNDER SHALL BE BEFORE AT LEAST THREE NEUTRAL
ARBIT8ATORS ASSOCIATED WITH THE AMERICAN ARBITRATION ASSOCIATION AND SEL.ECTED IN ACCo"ROP,NCE.WITH 1HE COMMERCIAL
ARBITRATION RULES OF THE AMER!CANARBITRATION AS.SOCIAT-!ON. FAILURE OfANY AR21TRATOR TO WHICH
MIGHT TO AN OBJECTIVE OBSERVER CREATE. A REASONABLE. IMPRESSION OF THE ARBiTRATOR'S PARTIAufY, AND!OR MATERIAl.
ERRORS OF LAW SHALL BE GROUNDS UN ADDITION TO All OTHERS} FOR VACATUR OF AN AWAHD RENDERED PURSUANT TO THIS
AGREEMENT.
!bl THE AWARD OF THE. ARBITRATORS, OR A MAJORITY OF THEM, SHALL BE FINAL, ANO JUDGMENT UPON Ti-le AWARD RENDERED
MAY BE ENTERED IN ANY COURT, STATE OR FEDERAL, HAVING JURISDICTION. THE ARBITRATION AWARD SHALL BE IN WRITINGAND
SPECIFY _THE FACTUAL AND "LEGAL BASES FOR THE AWARD, UPON THE RE.OUEST OF ANY PARTY. THE AWARD SHALL INQLUOE
FINDINGS OF FACT ANJ? . .
lcl ARBITRABLE DISPUTES ANY AND All CONTROVERSIES OR. CLAIMS BETWEEN THE PARTIES OF WHATEVER TYPE OR
MANNER, INCLUD!fi!G WITHOUT LIMITATION, ANY CLAIM ARISING OUT OF OR RELATING TO THIS ALL PAST, PRESENT,
ANO/OR FUTURE .CREDIT FACILITIES AND/OR AGREEMENTS.J!:IVOLVING THE PARTIES, ANY TRANSACTIONS BETWE!m OR INVOLVING THE
PARTIES, -AND/OR ANY ASPECT OF ANY PAST OR PRESENT RElATiONSHIP OF THE PARTIES. WHETHER BANKING OR OTHERWISE.
SPECIFICALLY INCLUDING ANY ALLEGED TORT COMMITTED BY ANY P.ARTY, .
A
"CONTINUE THEREAFTER AS AGREED. BY THE" PARTIES OR AS .THE ARBITRATORS, PISCOVERY DISPUTES
SHALL BE BROUGHT TO THE ATTENTION OF. l"H.E..ARBITRATOR$ B'( WRITTEN FQR PROPER DJSPOSITION._INCI.U_D!NG RULJNG ON
ANY ASSERTED OBJECTIONS, PRIVILEGES, AND PROTECTIVE ORDER REQUESTS AND AWARDING REASONABLE. ATTORNEY'S FEES TO THE
PREVAIL.ING PARTY.
lei .IN THE EVENT THE AGGREGATE OF ALL AFFIRMATIVE CLAIMS ASSERTED EXCEED $5.00,o0o.oo, EXCLUSIVE OF INTEREST AND
ATTORNEY'S FEES, OR UPON THE WRITTEN REQUEST OF ANY PARTY, 111 Pf.IIOR TO THE DISSEMINATION OF A LIST OF"POTENTIAL
ARBIT-RATORS, THE AMERICAN ARBITRATION ASSOCIATION SHALL CONDUCT AN IN PERSON ADMINISTRATIVE CONFERENCE WITH THE
PARTIES AND THEIR ATTORNEYS. FOR, THE FOLLOWING PURPOSES AND FOR SUCH ADDITIONAl. PURPOSES AS THE PARTIES OR THE
AMERICAN ARBITRATION ASSOCIATION MAY DEEM APPaOPRIATE, !AI TO OBTAIN ADDITIONAL INFORMATIO.N ABOUT THE NATURE AND
MAGNITUDE OF THE DISPUTE AND THE ANTICIPATED LENGTH OF HEARINGS AND SCHEDULING; IBJ TO. DISCUSS THE VIEW OF THE
PARTIES ABOUT ANY TECHNICAL ANDiOR OTHER SPECIAL QUALIFICATIONS OF THE ARBITRATORS: AND ICI TO CONSIDER, WHETHER
MEDIATION OR OTHER_METHODS OF DISP.UTE RESOLUTION MIGHT BE APP!10PRIATE, AND (21 AS PROMPTLY AS PRACTICABLE AFTER THE
SELECTION OF THE ARBITRATORS, A PRELIMINARY HEARING SHALL BE HELD AMONG THE PARTIES, THEIR ATTORNEYS AND THE
ARBITRATORS. WITH THE AGREEMENT OF THE ARBITRATORS AND THE PARTIES, THE PRELIMINARY HEARING MAY BE CONDUCTED BY
TELEPHONE CONFERENCE CALL RATHER THAN IN PERSON, AT THE PREliMINARY HEARING THE MATTERS THAT MAY BE CONSIDERED
SHALi. INCLUDE, WITHOUT LIMITATION< A PREHEARING SCHEDULING ADDRESSING (AI EACH PARTY'S DUTY TO SUBMIT A
DETAILED-STATEMENT OF CLAIMS, DAMAGES AND!OR DEFENSES, A STATEMENT OF THE ISSUES ASSERTED BY EACH PARTY AND ANY
LEGAL AUTHORITIES THE PAR'TU:S MAY WISH TO BRING TO THE ATTENTION OF THE ARBITRATORS: !B) RESPONSES AND!DR REPLIES TO
THE PLEADINGS FILED IN COMPLIANCE WITH SUBPART 2[AJ: (Cl STIPULATIONS REGARDING ANY UNCONTESTED FACTS; IDI
AND PREMARKING OF ALL DOCUMENTS WHICH EACH PARTY BELIEVES MAY BE AT THE FINAL ARBITRATION HEARING; (El THE
IDENTIFICATION AND AVAILABILITY OF WITNESSES, INCLUDING EXPERTS, AND SUCH ADDITIONAL MATTERS REGARDING WITNESSES
.INCi.LiDING. THEIR BIOGRAPHiES AND A SHORT SUMMARY oF THEIR EXPECTED TESTIMONY; IF) WHETHER A STENOGRAPHIC OR OTHER
OFFICIAL RECORD OF THE PROCEEDINGS SHALL BE MAINTAINED:" AND IGl THE POSSIBILITY OF UTILIZING OR OTHER
ALTERNATIVE METHODS oFQJSPUTE RESOLUTION. .
[f) FOR PURPOSES OF THIS PRoVISION. THE PARTIES" MEANS DEBTOR AND SECURED PARTY, AND EACH AND All. PERSONS AND
ENTITIES SIGNING THIS AGREEMENT OR ANY OTHER AGREEMENTS BETWEEN OR AMONG ANY OF :rHE PARTIES AS PART OF THIS
iRANSACTION. SHALL ALSO INCLUDE INDIVIDUAL PARTNERS, AFFIUATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
06/22/01
Page 7 of 9
AND/O"h REPRESENTATIVES OF ANY PARTY TO SUCH DOCUMENTS, AND SHALL INCLUDE ANY OTHER .OWNER AND HOLDER OF THIS
AGREEMENT, .
(g) THE PARTIES SHALL HAVE THE RIGHT TO INVOKE SELF HELP REMEDIES (SUCH AS SET .OFF, NOTIFICATION OF ACCOUNT DEBTORS,
SEIZURE AND/OR FORECLOSURE OF COLLATERAL. AND NONJUOictAL SALE OF PERSONAL PROPERTY AND REAL PROPERTY COLLATERAL)
BEFORE, DURING OR AFTER ANY ARBITRATION AND/OR REQUEST ANCILLARY OR PROVISIONAL JUDICIAL REMEDIES fSUCH AS
GARNISHMENT. ATTACHMENT, SPECIFIC PERFORMANCE, RECEIVER, INJUNCTION OR RESTRAINING ORDER, AND SEG.UES1RATIONI
BEFORE OR. AFTER ANY ARBITRATION, THE. PARTIES NEED NOT AWAIT THE OUTCOME OF.Tf:IE ARBITRATION BEFORE USING SELF-HELP
REMEDIE$. USE OF SELF-HELP OR ANCILLARY AND/OR PROVISIONAL REMEDIES SHALl NOT OPERATE AS A WAIVER OF. EITHER
lAW SHALL BE AVAILABLE FROM THE .
lhl THE PARTIES AGREE THAT ANV. ACTION AEGARCING ANY CONTROVERSY BETWEEN THE PARTIES SHALL EITHER BE BROUGHT BY
ARBITRATION, AS DESCRIBED HEREIN, OR BY JUDICIAL. PROCEEDINGS, BUT SHALL NOT BE PURSUED SIMULTANEOUSLY IN DIFFERENT OR
ALTERNATIVE FORMS. A TIMELY WRITTEN NOTICE OF INTENT TO ARBITRATE PURSUANT TO THIS AGREEMENT STAYS AND/OR ABATES
ANY AND ALL ACTION IN A TRIAL COURT, SAVE AND EXCEPT A HEARING ON A MOTION TO COMPEL" ARBITRATION AND/OR THE ENTRY
OF AN ORDER COMPELLING ARBITRATION AND STAYING AND/OR ABATING THE UTIGATJON PENDING THE FlUNG OF THE FINAL AWARD
OF THE ARBITRATORS, ALL "REASONABLE AND NECESSARY ATTORNEY'S FEES AND ALL TRAVEl COSTS SHALL BE AWARDED TO THE
PREVAILING PARTY ON ANY MOTIOI)I TO COMPEL ARBITRATION -AND MUST BE PAID TO SUCH PARTY WITHIN TEN {10) DAYS .OF THE
SIGNING OF THE ORDER COMPELLING ARBITRATION,
{!} ANY AGGRIEVED PARTY SHALL SERVE A WRmEN NOTICE OF INTENT TO ARBITRATE TO ANY AND ALL OPPOSING PARTIES WITHIN
350 DAYS AFTER DISPUTE HAS ARISEN, A DISPUTE IS DEFINED TO HAVE ARISEN ONLY .UPON RECEIPT OF SERVICE OF JUDICIAL

ISSUE OF WAIVER PURSUANT TO THIS AGREEMENT IS AN ARBITRABLE DISPUTE. .
IJ) ACTIVE. PARTICIPATION IN PENDING LmGATION DURING THE ?60 DAY NOTICE PERIOD, WHETHER AS PLAINTIFF OR DEFENDANT, IS
NOT A WAIVER OF THE RIGHT TO COMPEL ARBITRATION. ALL DISCOVERY OBTAINED IN THE .PENDING LITJGAl'tON MAY BE USED IN ANY
SUBSEQUENT ARBITRATION PROCEEDING.
(kl THE PARTIES F!,IRTHER AGREE THAT Ill NO ARBITRATIONPROCEEDING HEREUNDER SHALL BE CERTIFIED AS A CLASS ACTION OR
PROCEED AS A CI.ASS ACTION, OR ON A BASIS INVOLVING CLAIMS BROUGHT IN A PURPORTED REPRESENTATIVE CAPACITY ON BEHALF
.OF THE GENERAL PUBLIC, OTHER CUSTOMERS OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY SITUATED AND !iil NO ARBITRATION
HEREUNDER SHALL BE CONSOLIDATED WITH, OR Jr;liNEO IN ANY WAY WITH, ANY OTHER ARB)TRATION PROCEEDING,
!II ANY ARBITRATOR SELECTED SHALL BE"KNOWLEDGEABLE IN THE SUBJECT MATTER OF THE DISPUTE, EACH OF THE PARTIES SHALL
PAY AN EQUAL SHARE OF THE ARBITRATION COSTS, FEES, EXPENSES, AND OF THE ARBITRATORS' FEES, COSTS AND EXPENSES.
lml ALL STATUTES OF LIMITATIONS WHICH WOULD OTHERWISE BE APPLICABLE SHALL APPLY TO ANY AND ALL CLAIMS ASSERTED
IN ANY ARBITRATION PROCEEDING HEREUNDER AND THE COMMENCEMENT OF ANY ARBITRATION PROCEEDING TOLLS SUCH STATUTES
OF LIMITATIONS.
In! IN ANY ARBITRATION PRciCEEDJNG SUBJECT TO THIS PROVISION, THE ARBITRATORS, OR MAJORITY OF THEM, ARE SPECIFJCALL V
EMPOWERED TO OECIOE IBY DOCUMENTS ONLY, OR WITH A HEARING, AT THE ARBITRAT-ORS' SOLE DISCRETION! PREHEAAING MOTIONS
WHICH ARE SUBSTANTIALLY SiMILAR TO PREHEARING MOTIONS TO DISMISS AND MS?TIONS FOR SUMMARY ADJUDICATION.
lo) THIS ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION, AMENDMENT, OR EXPIRATION OF THE AGREEMENT IN WHICH
THIS PROVISION IS CONTAINED, UNLESS AU. OF THE PARTIES OTHERWISE ,EXPRESSLY AGREE IN WRITING.
!pl THE PARTIES THAT THIS AGREEMENT EVIDENCES A TRANsACTION. INVOLVING INTERSTATE COMMERCE, THE
FEDERAL ARBITRATION ACT SHALL GOVERN""THE INTERPRETATION, ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION
CLAU:;E OF THIS AGREEMENT,
lql THE ARBITRATORS, OR A MAJORITY OF THEM, SHALL AWARD ATTORNEY'S FEES AND COSTS TO THE PREVAILING PARTY
PURSUANT TO THE TERMS 01: THIS AGREEMENT.
lrl NEITHER THE NOR THE ARBITRATORS "MAY DISCLOSE THE EXISTENc"a CONTENT, OR RESULTS OF ANY
HEREUNDER"WITHOUT PRIOR WRITTEN CONSENT OF ALL PARTIES AND/OR COURT ORDER, .
(s) VENUE OF ANY ARBITRATION PROCEEDING HEREUNDER SHALL BE COUNTY, TEXAS.
SECTION X.
hi) Security Interest AbJlg!utB,Ait rights of the Secured Party and the security Interests hereunder shalt be absolute and unconditional Irrespective
of:
UJ any change Jn the time, manner, amount or place of payment of, or In anY other term of, all or UnY of the Indebtedness, or any other
amendment or waiver of or any consent to any depaltl.lre from the Promissory Nqte or any other Loan Document;
111) any exchange or refesse or nimperfeQt1on of all or any part of the Collateral or any" other ool!ateral; or any release from, limendment to,
waiver of or consent to trorh any guaranty, for all or any of the Indebtedness; or
Ulil to fullest extent permitted by Jaw, any.other circumstances which might otherwise constitute a iwal!eblo to, or a discharge of
. the Debtor or a thlrd party pledgor,
(bl .!od!lrnn!f!qnflnn, The Oe.btor. agrees to Indemnify tho Soeurod Party and hold ti)O Secured .Party harmless .from and &galnst any and: all
llabH!tlet, obligations, lonel, damaget, penalties, actions, judgmBf!t$, a:ult1, GOIU, expanse or disburumanta: of any kind of natura whataosver
which may be !mpo10d on, Incurred bV. or euo[ted against the Secured in any way relating, In any way arilllng out of I?' In with
thb Security Agreement, the Loan or the transactloris contemp atod heroby or the other than thosli arising out of \he Secured
Party's b"roach, default, or willful mlseondl!et In Its under this Security AgrUomont or the loan Documents, Wlttlout
!Imitation of the foregoing, the Debtor will ralmbur$ll thO Secured Party for all expenuS !Including expanses for legal serv/eea of every kind] of, or
to, tho negotliltlon of, entering Into and entorcomont of any of the proviaio11$ "hereof and of tho lndebtednau, lind zmy 11ctulll or
attempted a11le, loan or other disposition of, ahd any nchanga, anfol"cement, collection, or aottiBment of any of the end
defending oi- auit;:tlng the rights anti cleims of tha "Secured P11rty In respect tharaof, and for the care of the Colflrteral and defending or asaartlng
the rights and clli!ms of the Secured Party In respect thereOf, t:Jy litigation or otherwise, Including expense of insur11nce, "11nd e!t such exp11nses sh11ll
be the Debto(a lndabtedneas.
Pa9e ll of :9
IBC0004 - 00/22/0l.
X;.
SECTION XI: NO ORAL AG,BEEMENTS
'rHts WRITTEN "AGBEM);Nt REpagsews THE EiNAt AGREEMENT BfiWEEN THE PABT!e'!f AND MAY Nor liE 'coNIRtj'OJciFp sy gvrpeNce
Q_F PRIOR CONT!ii)1PORANEQIJS pa SUBSEQUENT ORAl AGREEMENT OF THE pARTIES
!HEag ARE NO IJNWR!UEN QBAt AGREEMENTS BEIWfiEN THE PARTIES.
Dated June A 2010
DEBTOR:
Delta Produce, L.P.,
a'_Texas limited partnership
By:' Delta Produce LLC,
a Texas. limited. ability company,
G Pa ne
DEBTOR:
By:
DEBTOR:
By:
SECUR7: . .

7
Signature "'
Name: "ji /U'ittr
Title:
Ass-!. v-;?
DEBTOR:
By:
DEBTOR:
By
DEBTOR:
By:
DEBTOR:
By:
Page 9 of 9
IBC0004 -
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EXHIBIT'A"
A. Equipment. All equipment ofDebtor now or hereafter acquired by Debtor, inciuding
any and all 'accessions, attachments and other additions to, substitutes and
replacements for and improvements of the equipment, whether now owned or at any
tbne hereafter acquired or made, together with all tools, parts and appurtenances now
or at any tbner hereafter used in and together with all proceeds of the equipment
described or referred to above, including insurance payable by reason of loss or
by Secured Party, including any refunds or unearned premiums in connection with
any cancellation, adjustment or termination of any such policy of insurance.
B. Inventorv. All inventory ofDebtor, whenever acquired and whether now or hereafter
existing, including bUt not limited to all goods, wares and merchandise intended for
sale or lease by Debtor or to be furnished by Debtor; under contracts of service and
or usable in connection with the manufacturing, processing, packing, shippirig.,
merchandise; all certificates of title, manufacture's statements of origin and other
documents arising from or related to such inventory; and all accessions, attachments
afidother additions to, substitutes for, replacements for;improvements to and returns
c.
D.
Fixtures.
(l) All oftbe properly, personal or otherwise, whether now existing or hereafter
arising, existing created, now or hereafter attached to or incorporated into
or used in or about the Debtors premises, including all furniture, appliru;tces,
furniabings, goods, equipment, and machinerY owned by Debtor and other
such properly or now or hereafter affixed, attached or related to such property
or used in connection therewith, and all replacements, substitutions and
(2) All accessories, attaclnnents and other additions to, substitutes and
replacements for, and of, the property described in (a) above,
whether now owned or at anytime acquired or made, together with
all tools, parts and appurtenances now or at any time used in connection
therewith;
of, ml:d additions, "improvements and accessions to, all.and any of the property
described above, excluding prQceeds used to replace worn-out or obsolete
equipment or other property.
Accounts Receivable. All accounts and chattel paper of Debtor, whenever acquired
and Whether now or hereafter existing, including, but not limited to, accolUlts arid .
chettel paper which arise out' of: (i) the sale or other disposition of goods; (ii) the
furnishing of services; (ill) the furnishing of; the use of, or the lease of any of the
relating to, resulting from or arising in connection with any such accounts and/or
chattel paper.
E. General Intangibles. All General Intangibles of Debtor, whenever acquired and
whether now or hereafter existing, and all proCeeds thereof.
Together with all books, records, files, computer software, documents and other info'rmation
pertaining to, and all containers and packages for, the properly described or referred to in subsections
12-50073-lmc Doc#45-5 Filed 01/23/12 Entered 01/23/12 13:16:08 Exhibit 5-$1 500
000.00 Note with Extensions Pg 1 of 12
.,.
REAL ESTATE Lj:ENNOTE .
. Amount: $'1_,50Q,OM.oo
Dato: __ ____
Foi value received, 'the receipt of whiyb is hereby 'acknowledged, undersigned, jointly' and seVerally, (hereinafter
"Bortower
1
', whether one or more}promise tO::pay to the order BANK OF COMMERCE (hereinafter
at 130-E.- Travis, San Antonio, B:exar County, Texas

. ONE MILLION 11.I1lJL- HUNDRED. THOUSAND '/.'Nb. N0/100 DOLLARS . .
Dollars($ : 1 500 000. oQ . )_,_ m:Ieg;;i! and lawfqlllloney._of the United St_ates.of Amirica, With as it
accrues on the outstanding bal!:jDCe_frop date of ad\'ilnce Of such p.rine:ipal until paid .
. The interest .shall be per aD.llum: or
XX The interest rate shall be .floafug at.. o. 25% percent per annum i!bove the NEW YORK
XX
'PRIME RATE. (
1
'Prime below) as it fluctuates from time to time: provided,
bo_we;er,.that nq event shall the of!fl:erest (plus exce.ss thereof, if any) to be paid '?U the unpaid
pnnctpal ofth1s Note be less than annum. nor more than the maximum legal rate
allowed by applicable law. 'I)le starting interest rate on this Note shall be 8 .50% percent per
annum. The rate of interest due hereunder shall be recomputed as of the date of any change iri the Prime Rate.
The ?ruJYffiRATE shal;
announced from to time by Lendef, as its prUne
The NEW YORK PR.ll\:1E 1\.A.TE.sq.aU the annualleriding rate of frolo time to time by
JP Morgan Chase & Cei:, York, New York, as its ptimerate. New Yprk Prime Rate lias been selected as
the P..rlme Rate and if1 a. prime rate not anuounce4 by !f. Morgan Chase & Co., New York, New York,
then the ;rnternational Bljllk of Commerce Prb:ne Rate, minus on.e per'cent ( 1 shJiU bethd7jme Rate,
Use of either .-of said.Prime Ratesis nqt tp bl$ as a .or that are favorable an either
rate or in4e;<, 1hat rates on o't4er lqans or creqit facilities net be baseQ on. indices o;r that rafes On loans to may not be
made below such prime p1,te.
. . . ..
1be is on a factor applied_ on a 36s-cby year, 'm the that the year leap year,
the unpaid principal to the date of each installinent paid. and the payment. made first to the discharge of the interest accrued and
the balance to the reduction of the principal, Provided; ho:wever, that in th:e interest rate reaches the rate allowed
by applicable law, said maximum legal r.a'te be 9emputed on a full Calendar year 3651365 days b_asis or on a 366/366 days-basis, in
the even,t that the year is a year; The int!}rest charged and hereln contracted for will not exceed maximum allowed by law. :
Matured will computed <1 c!liendar year days .basis Or on a 366/366 in the eveni
that the year is a leap year, at the higqest legal rate of interest allowed by law, unless F ederallaw allows a higher interest in
which.Case, Borrower agrees to pay the. rate alloWed Qy .. If applicable law does Dot- set a maxhr!um of for
matured unpaid theD. agrees that the.ma"X:imum ril.t!( for such amom;tts be eighteen percent (18%) p.er
To extent 01lldwed by as fue-late pa)'tl:!:ent charge may in its ti) the interest
on ftle p-rincipal portion of any payment that is not by the payment due date to the maximum rate allowed bylaw,
computed on a full calendar yeaf b<1s.is from tlie payment due date until paid, or (ii), slwuiq any not be (10)
days of the due date, requiTe Borrower to pay a one time

charge'' per late pa)llnent.equat to. five percent (S%) of the amount of the
past dUe principal and inter.est Of Suchp.ayment, with of.$1Q.OO and a_maxirpunl. of per Jatepayment. The "late
ch!lrge:' may be assesseP..without and shall be immediately due and.p.ayabJe. TWs iS'inapplicable the outstaudPlg
indebtedness under the Note is N'o late charge will be assessed on any paYinep.t when the only delinqueQ.cy is due. to late
charges ewlier the paynJ.eot
The_outstanding-a'nd pri;lcipal ofthls Note and aU accrued and. unpaid as
SEE ADDENDUM TO. REAL ESTATE LIEN NOTE AND. BALLOON RIDER. HERETO AND INCORPOM'!ED
RE!\EIN.

.,
APRIL 12.. _;
teD.der J:!lay, at its diScretion, 11djust the .of periodic.payments described above assure that' the will fully
amortize the principal- note on the s.tated maim?-o/ without any HBaUopn': or ullequal payment.
Tlj!S OBLIGATION HAS THii DEMAND FEATURE:
. - ..
SI+d time to not to said may,, in.it.s sole
'absolute discretion, rescl;tedule, rearrange and/or. in whole or in part, and and aU
accn!-ed unpaid interest UDder thls N ot.e. :!30ITower agrees and promises to pay Lender all prin.c.ip'!l accrl,led and
unpaid interest on such principal. No notice of iritent to:a9celerate .shall be required of Lender and Borrower eXpressly waives right
to notice intent to accelerate. ThefOregOing.right to make dec;tand for payment oft]$ Not-e, .. il,J. whole or in' part,
may be exercised by Lender for any reiison whatsoever, Whether or not is in hereunder and in advance of its scheduled
.. maturity. . .
The failure of Borrower to pay any of the abOvf!..stated Payment(s) of principal or any interest tl;lereon; when th.e same is due and
payable, -shall permit Lender at ii:s option, fo accelerate the maturity, without notice to of all, or _any of the remaining
unpaid principai balance outstanding and all accrued and unp3id b;lterest this Note, whereuPon the sru:ne shall be due and pa:table
immediately.
at may dei!_lare. aJJsuttlS owing b.y endorsers lmmediatCly. due anci payable
upon its.elfto be .adverSely affected and/or i.Usecure by reitsotl. of any material change W. any ofBor:roWer's (including any
endorsers and/pr guarantorS) J:l.et wonh, or by reason .of any material chail.ge of cqriilition whether or not described
and intend t4at the loan eV:ideJ?.ced b;, this (the be in With applicable usury ..
If at ail:/ time any i.D.terest contracted fOr, charged or under this Note or connection with the Loan would be
usurious ,under applicable law, then tegardless of the" provisions. of this Note or the documents and inStruments evidencing, securing or
otherwise executed in connection With the Loan orany action or event (in-clUdh:i.g, without limitatiop., prepayment of principal hereunder
or accele"ratioh of matUrity by th"e Lendef) Which may occur with i-espect to this Note Or .the Loan., it is agreed that .aU sums determined
to be ustlrious shall be im.t;nediately -credited Oy the Lender as a payD:lent of.:Prlncipal hereunder, or if this Note has already been paid,
im.mediai:ely refunded to the B-orrower." All compe.ilsation which interest undet applica"ble law in connection with the Loan
. shall be amortized, proi"!rte4, allocated and spreadover the full period al;lY .in.debtedn.ess is. oWing by Bortower; to the greatest
extent w.ithout--eXcet;ding tlie "i:naximum tate by applicable law in .. effect.from time to time during such
period. ; ..
In no evnt fue provisions of Chaptef Texas regulateS te;ol;ing loan accounts .and.
,r.evolvin& trlparty acco:unis) apply to the"toab..
IN THE ANY ITEM, ITEMS, TERMS OR PROViSIONS CO\ITAINED IN TillS JNSTRU!v.!ENT ARE iN CONFLICT
WlTII THE LAWS OF THE STATE OF TEXAS, OR FEDERAL LAW, TillS INSTRUMENT SHALLBEAFFECTEb ONLY AS TO
rrs APPLICATION TO SUCH I'IEM, J:TJiMS, PROVISIONS, AND SHALL IN ALL OTHER RESPECTS REMAIN lN
FULL FORCE AND. EFFECT. IT IS UNDERSTOOD AND AGREED THAT ill NO EVENT AND UPON NO CONTINGENCY
SHALL THE BORROWER ORANYPARTY.LiABLE HEREON; OR HEREFORE, BE REQUIRED TO PAY INTEREST IN
EXCESSOFTilil'RATEALLOwED BY THE LAWS OF. THE STAIB OF TEXAS OR FEDERAL lAW, IF SUCHLAWPEllMJi:S
A GREATER.RATE OF INTEREST. THE INTENTION OF THE PARTIES BEIN.G TO CONFORM ST)UCTLY TO THE USURY
LAWS As NOW OR HERED!AFTER CONSJ:RUED BY THE COURTS HAVING JUI.USDICTION.
THE )30RROWER, ENDORSERS,' SURETIES, GUARANTORS ANb ALL PERSONS TO BECOME LiABLE ON. TillS NOTE
(THE "0BLIGORS") HEREBY, JOINTLY AND SEVERALLY, WAI'IE EXI>RESSLY 'ALL NOTICES OF OVERDUE
rnsTALLME\IT PAYMENTS, AND DEMANDS FOR PAYMENT THEREOF, NOTICES OF rnTENTION TO ACCELERATE
MATURITY, NOTICES OF ACTUAL ACCELERATION OF MATURITY, DEMAND.FOR PAYMENt, NOT! CBS
OF. DISHONOR, PROTEST;. NOTICES oF' PROTEST, AND Dll.IGENCE ill COLLECTION HEREOF. EACH OBLIGOR . .'
THAT THE 'LENDER OR OTHER HOiJ;JER OF TillS NOTE MAY AT>\NY TIME; AND FROM TI)YIE TO T!Ml'!,
UPON )UlQUEST OF OR BY AGREEMENT WTTHANY OF THEM, RENEW THis NOTE AND/OR EXTEND THE DATE OF
MATURITY HEREOF OR C.HANGE THE T!Ml'! OR METHOt:> OFPAYMENTS WITHOUT NOTICE TO ANY QF THE OTHER
OBLIGORS, MAKERS, SURETIES OR ENDORSERS, WHO SHALL REMAiN BOUND .FORTHE PAYMENT HEREOF.'
OBL!Go!RS WAIVE EXPRESSLY THE LATE Fll.ING OR ANY sun: OJ( CAUSE OF ACTION HEREoN, OR ANY DELAY IN .
.. THE HANDLING OF ANY COLLATERAL. OBLIGORS AGREE THAT HOLDER'S. ACCEPTANCE OF PARTIAL OF .
DELINQUENT PAYMENTS OR FAll.URE OF. HOLDER TO EXERCISE ANY RlOHT OR REMEDY CONTAINED HEREIN OR
IN ANYiNSTRlJMENT GivEN AS SECURITY FOR THE PAYME\IT OF TillS NOTE. SHALL NOT BE A WAIVER OF ANY
OBLIGATION OF THE OBL!OORS OR CONSTITUTE WAIVER OF ANY PRlORDR SUESEQUENTDE!'AtiLT. 'r!lJj HOLDllR
MAY REMEDY ANY DEFAULT WITHOUT WAIVING THE DEFAULT REMEDIED ANJYMAY WAIVE ANY DEFAULT
WITHOtrr WAIVING Al1?DTi!ER PRlOR OR SUBSEQUENT DEFAULT. . .
As. fot tl:i:is and othet indebtedness Which tp.ay at any time be owing by BQrrOwer (imd any ehdorsers and/or
hereof) Lender.'or other Lender hereof, Borrower. (arid any endorsers _andloi' gW!IantOrs hereof), "gives to Lender or Other .
Holder hereof, a. security a lien and contr3.ctual right of setAoffin "and.to all oftheBori'oWer's.(and anY endOrsers and/or
of) money, credits, accounts, accounts and/or Other property n9w in, or at any tini.e coming within, the
custOdy or control Of Lendet. or other Holder hereof, or any member b1;1nk Ol' branch bank of international Bancshares COrporation,
Whether :in general or Special acco)l.nt.or depoSit, or for Safekeeping or otherwise. Ever)' Such security interest and right of set-off
J+lay be eiercised Without demati.d or notic"e to Borrowe! (and any eildorsers and! or guarautors.hert;o.f). No security futerest or right of
set-off to :enoJ;"ce such security interest shall be deemed to have been waived by anY act or conduCt on the.Part of the Lender, or by any
failure to;eXercise such right of or to enforce such ,security intei:'est
1
or by any delay in so doing. Every setoff and
security iiaterest sQall continue in full force and: effect i.mtil Su.ch right of set-off or interest is specifically _or released by
an i?Strunlent in "Writing executed by Lender. The is in addltion to and ncit- in lieu of an:r. rights of Setoff by .law.
In connec\tion with any transac.tioD. between Bor:taWer Lender at any _tke in tli.e past; or future, iri the event Borrower,
indiviquaily or jointly witb. others, has granted or grants Lender a lien o,n mly real personal property, Borrower agrees that the
lien on sti.ch real and/or person!J.l property to the extent. ofB.otTower's intefest shall also secure the i.ridebtedn.ess of Borrower to Lender
evidenced by thls and all r.enewals, and modifications hereof.
Ai lende.i''s. .D.ebtor promptl; si,in iu other docun:ien;s, statements and
certifiCates of title; to perfect, protect
1
Lender's security interest in the Collateral at tb.e.scile cost of BorrOwer. Debtor
hereby atitho"rizes Lender to ftle a Firiancing.Statement, an.Amende.d Financing Statement an4 a financing State:inent
(collectiVely referred tO its the "Financing Statement") describing the Collateral. \Vhere Collateral is in the possession of a third party,
Debtor" w$ join with Lendei in 1lotifying.the tlrltd party ofterider'ssecm'ity interest a,nd obtaining a ContrplAgreement froni the third
Pa.rtr that;it is _i::Ollil.iefal for the
If t,b.is. Note, o; a11-Y part is not paid .!recording to its termsr is placed in the hands of an att.omey for .collection, or is collected
. through P:robate, or other-judicial or nrin-judieiai proceedings, wh.eth"ei matured by expiration Of or py the exercise ef
f,
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. the option given Lender to it, ani now liable noW to and shall
pay an additional amount equal to and necessary fees and aSsociated osts fOr atto):Oey's fees and
Costs of colleCtion, puce liquidated ;md paid by Lender or otherwise allowed by law, will bear interest atthe Tate of interest f!pplied to
the matured imd past-due principal bal;mce of this N:"ote as sucl;l. rate may change p.-om to time from -due witil repaid.
In any.legal_a9tion ..orprpceectfug, by. or otherwise, is of, or
deplaration of rights this Note<!Ddlpr any.instrpment prwritten ajp'ee:p:ient required or delivered tUlder or pursuant to the terms of
this .Note, a?-cVot any contrOversy or claim, whether ffi tort or legal or equitable, mvolying in any way the
fmancing or the transactiop:(s), the subject ofthls Note,or ai:Iy other pr-oposeQ :or or extension of credit, $e prevailing party
shall be entitled to recoyer reasonable and :t;tecessary attorney's paralegal Costs allocated-costs for legal
services), costs, expenses, expert witness fees il,nd cost<;, fl.D.d other ner:,:ess.ary mfide in _connee:tiou with any such pctioq. or
proceeding, in theamount determined by the fact-finder. -
Lender, in and on dO pay sums OQ beha'!-f: for:the qf .
Borrower for costs necessary for the _!qld presenration of collateral securing this N.ote and other costs that may be
appropriate, in Lender's sole no.t lin;rited t.a premiUnis, _ad valo'rem taxes, an"d attorney's fees.
sm:ns which may be so paid out by Len-der and paid for premiums, .as aforesaid, inCluding the expenses and
attorney's fees paid in any suit: affecting sai4 propeFt)' .protect lien-hereof shall be<ir int-erest fropJ the dateS of such
paytpents at the rate applied to the matured and past-dUe principal balauc!) ofthis'l\Jote and Shall be Paid by Boriower to Lender
upon deinand, at" the same w4fch this is-paYable, and shall be a part of the debt aOd recoverable as sucb in all
aspects. ,. -
reserVeS right to prepay, priOr f!li oi any part of p$9fpa\ penalty, and ititerest &ball
immediately cease on any amount soprepaid. AU prepayments shan be applied to the last of prinCipal. withOut
interrupting the installment paymeDt.s. !
Any if by by an; other persop., or any other tb.e
. expresS vvritten consent ofLeuder, sbal1 n9t relea:j:e the liability of Borrower f?r.the Oftl:Ps
In the event that the hereinafter discribed re.al prOpero" is sold. con:veyed, or otherwise disposed of without the prior. written consent of
the Lender, the maturity. of this 1:-fote mf!y, atthe; option-ofthe Leqder, be may immediately demand payment of
the then outstanding principal sum together With accrued and due thereon."
BorrOwer and Lender hereby expressly acknoWledge and agree that it+. the eVent of a under this Note or under ?P.Y. docunlent
exeCllted by Borrower in conneption with, or to secure the of, this-Note (1).Lender shan not -l:!e required tO compty with
Subsection 3.05( d)" the Texa:S R.evised Act. a;ld (2) Lende:r. shall pe require:d to proceed a or exhaust the assets
of Borrower before purs'uiD.g any one Gf the partlle;rs ofl3orrower or the of.S]lchpartners,

BORROWER AND :LENDER FUR'l'HERAGREE AS FOLLOWS;
(b)
(c)
ANY AND ALL comRovE:RsiEs BETWEEN TilE. PARTIES, EXcEn suca: CLA!MS .AND

ARBITRATIQij RULES CONFLlCT WJ:TH TillS ANii IN SU<;:Il EVEr!T TilE TERMS OF TillS
PROVIS!OlfBHALL CONTROL TO TilE EXTENT OF TilE CONF):,ICT,. NOTWITI{Sl'AiffilNGANYTHING
CONTAINED IlEREIN TO THE CONTRARY, SAVE AND EXCEPT SUBPARAG1\APRS (k), (in); (o), (p), AND (s).
IlEREIN, TllOSE CONSUER RELATED CLAIMS.AN.D CQNTROVEJ;tSIES'lNVOLVING AN AGGREGATE
AMOUNT Of LEss: TliAN TEN .TllOUSAND DOLLARS ($10,000.00) SI!ALL BE CONDUCTED IN.
ACCORDANCE WIT!l TilE AMERICAN ARBITRATION ASSOCIATION RULES FOR THE RESOLUTION OF
CONSUMER-RELATED DISPUTES QF LESS THAN TEN. THOll SAND DOLLARS. ANY ARBITRATION .
IlEREOOER SIIALL BE BEFORE ATLEAST TID\EE NEUTRAL ARBITRATORS ASSOCIATED WIT!l TilE
Al\fi:RICAN ARBITRATION ASSOCIATION AND SELECTED IN ACCORDANCE WJ:Tll THE COMMERCIAL
OF'l'HEAMl:l\iCANARB!TRATION ASSOCIATION. FAILURE OF ANY ARBITRATOR
. TO DISCLOSE. ALL fACTS WHIC!l MIGHT TO AN OBJECTIVE OBSERVER CREATE A REASONABLE
IMPRESSION OF TilE ARBITRATOR'S PARTI,l:LITY, AND/OR MATERIA.LERRORS OF LAW SHA,LL BE
GROUNDS [IN ADDITION TO AL):, OT!lERS] FOR VACATUR OF AN RENDERED PURSUANT TO .
TillS. AGREEMENT.
. . . . . . - .
Tiffi AWARD OF THE OR A MAJORITY OF TllEM, S)lALLBi!, AND JUDGMENT
UPON .TilE AWARD RENDERED MAY BE ENTERED !N ANY COURT, STArE OR FEDERAJ,-, HAVING
JURISDICTION, TilE ARBITRATION AWARD S!IALL BE IN WRITING.AND SPECIFYTHE FACTUAL AND
. LEGAL BASES FOR .TilE ,lWARD. UPON THE REQUEST OF ANYPART)\.T!ffi AWARD SHALL INCLUD]':
FINDINGS OF FACT AND CONCLUSIONS OF LAW,
ARBITRABLE DISPUTEs ro AND ALLCONrnoVERS)Es OR <';LAIMs BETWEEN T:l1i
OF WHATEVER TYPE OR INcLUDING WJ:TllOUT LIMITATION; ANY CLAIM AR!SING OUT OF
OR RELA't!NG TO TillS NOTE, ALL PAST,.)'EESENT AND/OR F\)TURE CREDIT FACILITIES AND/OR
AGREEMENTS INVOLVING .TilE PARTIES, ANY TRANSACTIONS BETWEEN OR INVOLVING TilE
AND/OR ANY ASPECT. OF ANY PAST OR PRESENT RELA1'!0NSillP OF THE PARTIES, WHETHER.
BANKING OR OTilERWISE; SPECIFICALLY .INcLUDING ANY ALLEGEDTORT COMMITTED BY ANY
.
.(d)
-
THE PARTIES.SHALLALLOW AND PARTICIPATE IN DISCOVERY IN ACCORDANCE wiTH THE FEDERAL
RULES OF CIVIL PROCEDURE FOR A 'PERIOD OF ONE HUNoRED TWENTY (1.0) DAYS .AFTER Tli:E
. FILING OFTJi:EORIG!NAr;RESPONSIVE PLEADING, DISCOVERY MAY COlfrlNUE THEREAFTER AS
AGREED BY THE PARTIEs OR AS ALLOWED BY _THE .ARBITRATORS. UNRESOLVED DISCOVERY
'DISPUTES.Sli.Al.LilE BROUGHT TO.THE ATTENTION OF THE ARBITRATORS BY WiUTTEN MOTION FOR
. PROPER DISPOSITION, 'INCLUDING RULING ON ANY AS.SERTED OliJiCTIONS, PRIVILEGES, AND
PROTECTiVE O.IiDER REQUESTS AND AWARDING REASONABLE ATTORNEY'S FEES TO THE
.. P.REVAILING PARTY. . . .
(e) . IN EVENT THE ALLAI<'Fffi.MATIVE EXCEED $500,000.00,
. :EXCLUSIVE OF INTEREST AND ATTORNEY'SFE!ES,-OR DPONTHEWRITTENREQUEST OF ANY PARTY,
.. (1) PRIOR to THE DISSEMINATION OF A LIST OF POTEN'l'IAL ARBITRATORS, THE AMERICAN
.(Q
(g)
(h)
(i)
. ARBITRATWN AS.SOClATION SHALL CONDliCT AN IN PERSON-ADMINISTRATIVE CONFERENCE WITH
. THE PARTIES AND THElli ATTORNEYS FOR THE FOLLOWING PuRPOSES AND FOR SUCH ADDITIONAL
. 'PURPOSES',-AS THE PARTIES OR THE AMERICAN ARBITRATION ASSOCIATION- MAY. DEEM
. APPR0PR!A1rE, (A) TO :oBTAIN-ADDITIONAL INFORMATION ABOUT Tli:ENATURE AND. MAGNITUDE OF.
THE DISPuTE AND Tll:E ANTICIPATED LENGTH OFHEARINGS.AND SCHEDULING;-(B) TO DISCUSS'Tii:E.
VIEWOFTHE PARTIES ABOUT AN'i: TECHNICAL AND/OR OTHER SPECIAL QUALIFICATIONS OF THE
:ARBITRATORS; AND.(C) TO CONSIDER, WHETHER MEDIATION oR OTHER METHODS OF DISPUTE
RESOLUTION MIGHT BE APPROPRIATE, AND (2) AS PROMPTLY AS-PRACTICABLE AFTER THE
SELECTION OF THE ARBITRATORS, A PRELIMINARY :fi:EARING SHALL BE HEL):l.AMONG THE PARTi;ES,
THEIR ATTORNEYS AND THE ARBITRATORS. WITH THE AGREEMENT OF THE ARBITRATORS AND THE .
PARTIE.S, THE PRELIMINARY HEARING MAY BE CONDUCTED BY TELEPHONE CONFERENCE CALL
RATHER TEIAN IN PERSON. AT THE PRELiMINARY HEARiNG THE MATTERS THAT MAY BE
CONSIDERE!D . SHALL .-INCLUDE, WITHOUT LIMITATION, A PREHEARING SCHEDuLING ORDER
ADDRESSING (A) EACH pARTy'S. DUTY TO SUBMIT A DETAILED STATEMENT OF CLAIMS, DAMAGES
. AND/OR DEFENSES,- A STATEMENT OF THE ISSUES ASSERTED BY EACH PARTY AND ANY LEGAL
AUTHORITUlS THE PARTIES MAY WISH TO BRIN.G TO THE ATTENTION oFTHE ARBITRATORS; (B)
. RESPONSES AND/OR REPLIES TO THE PLEADINGS FILED IN COMPLIANCE wiTH SUBPART 2(A); (C)
. STIPULATIONS REGARDING ANY UNCONTESTED FACl'S; (D) EXCHANGE AND PREMARKING OF ALL
DOCUMENTS WHICH EACH PARTY BELi;EVES MAY BE OFFERED AT.Tii:E FINAL ARBITRATION
HEARING;.(E) THE. IDENTIFJCAl'lON AND AVAILABILITY OF WITNESSES, INCLUDING EXPERTS;AND
'SUCH ADDITIONAL MATl'ERS REGARDING Wil'NESSES INCLUDING THEIR BIOGRAPHIES AND A
SHORT SUMJI1ARY. OF THEIR EXPECTED TESTIMONY; (F) Wli:ETHER A STENOGRAPHIC OR OTHER
-OFFICIAL RE_Cb.IiD OF THE PROCEEDINGS SHALL BE MAINTAINED; AND (G) THE POSSIBILITY. OF
UTILIZING ME!ll!ATION OR OTHER ALTERNATIVE MEl'HODS OF ;DISPUTE RESOLUTION .
. FOR PURPOStS OF THIS ";HE PARTIES" ;;,mANS BORROWERANDLENDER,AND EACH
AND ALL PERSONS AND ENTITIES SIGNING THIS AGREEMENT OR ANY OTHER AGREEMENTS
BETWEEN OR AMONG ANY OF THE PARTIES AS PART OF.THIS TllANSACl'ION. "THE PARTIES" SHALL
ALSO INCLUJ!>E INDIVID.UAL PARTNERS; AFFU.IATESj OFF)[CERS, DIRECTORS, EM:PLOYEES, AGENTS
A.NJitORREPRESENTATlVES oF A.NY PARTY TO SUCH DOCUMENTS, AND SHALL INCLUDE ANY OTHER
OWNER AND HOLPER.OFTHIS AGREEMENT . .
THE HAVE l'HE RIGHT TO INVOKE SELF- REMEDIES (SUCH AS SET-OFF,
NPTIFICATION OF.ACCOUNTPEBTORS, SE:iZiJRE AND/OR FORECLOSIIRE OF COLLATERAL, AND NON-
.JtiDIC!AL SALE OF PERSONAL PROPERTY AND REAL PROPERTY COLLATERAL) BEFORE, DURING OR
;AFTER ANY ARilll'RATION AND/OR REQUEST ANCILLARY OR PROVISIONAL JUDICIAL REMEDIES
{SUCH AS GARNISHMENT, ATTACHMENT, SPECIFIC PERFORMANCE, RECEIVER, rN.riJNCTION OR
ORDER, AND SEQUESTRAl'lON) .BEFORE OR A).'TER ANY ARBITRATION. THE PARTIES
NE!ED NOT AWA!l' THE OUl'COME OF THE ARBITRA1,'ION BEFORE USING sELF-HELP REMEDIES. USE
OF SELFHELP OR, ANCILLARY AND/OR, PROVISIONAL JUDICIAL REMEDIES SHALL.NOT OPERAl'E AS A
WAIVER OF EITHER PARTY'S RiGHT TO COMPEL ARBITRATION . ANY ANCILLARY OR PROVISIONAL
RllMEPY. WHICH WOi,JL!l BE AVA!tAIJLE FROM A COURT AT LAW SHALL BE AVAILABLE FROMTHE
ARBITRATOR.S . . ..
. THE PARTIES AGREE ANY REGARDIN(iANY CONTROVERSY BETWEEN THE PARl'IES
SHALL EITHER BE BROUGHT .BY.. ARBITlU,TION, .All DESCRIBED';HEREIN;. OR BY JUDICIAL
PROCEEDINGS, BUT SHALt. NOT BE PuRSUED SIMuLTANEOUSLY. IN DIFFERENl' OR ALTERNATIVE
FORMS . A T)lliE'LY- WRI'(TEN NOTICE OF INTENT TO ARBITRATE PURSUANT TO THIS AGREEMENT
STAYS AND/OR ABATES ANY AND ALLACTIONIN A TRiAL COURT, SAVE AND EXCEPTAHEARING ON A
MOTiON TO COMPEL ARBITRATION AND/OR THE ENTRY. OF AN ORDERCOMPELLING-AREITRATION
AND Sl'AY.ING AND/OR ABATING Tli:E LITIGATIO-N PENDING THE FiLING OF THE FINALAWARP OF THE
ARBITRATORS, ALL REASONABLE.ANDNi;:CESSARY AttORNEY'S Fii:ES AND ALL TRAVEL COSTS
. SHALt .BE AWARDED TO Tl!E Pil.EVAII;ING PARl'Y. ON ANY MOTION TO COMPEL ARBITRATION AND
MUSl'BE PAID TO SUCH PARl'Y WITHIN TEN (iOj DAYS oF TilE. SIGNING OF THE ORDER COMPELLING
ARBITRATION. . " ' . ..
ANY PARTY. SHALLSERVEAW!UTTEN NOTICE OF INTENT TO ARBITRATE TO ANY AND ALL OPPOSING
PARTIES WITHIN 36Q DAYS AFTER DISPUTE HAs ARISEN. A DISPUTE IS DEFINED TO HAVE ARISEN.
ONLY."UPON RECEIPT OF SERVICE OF JUDICIAL PROCESS, INCLUDING SERVICE OF A COUNTERCLAIM,
FAILiJRE TO SERVI(A wRiTTEN NOTICE OF INTENT TO ARBITRAl'E WITHIN THE TIME Sl'ECIFIE:O
ABOVE SHALL BE DEElYi:E:O AWAIVER OF THE AGGRIEVED PARTY'S RIGHT TO COMPEL ARBITRATION
OF SUCH.CLAIM. THE ISSUE' OF WAIVER .PURSUANT TO THIS AGREEMENl' IS '><N ARBITRABLE
DISPUTE ..
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(k)
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(m)
(n)
(o)
(p)
(q)
.(r)
(s)
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PA:imci:PATION IN PENi)!NG LITIGATION DuRING THE 360 PAY NOTicE PERIOD, WHETHER
AS PLAINTIFF OR DEFENDANT, IS NOT A WAIVER OF THE RIGHT TO COMPEL ARBITRATION, ALL
DISCOVERY OBTAINJiD IN THE 'rENDING. LITIGATION MAY BE USED IN ANY SUBSEQUENT.
ARBITRATIONPROCEEDING. .
THE FURTHER AGREE THAT (i) NO AID!ITRATION PROCEEDING SH:..LL BE
CERTIFIED ASA CL;I.SS.ACTION OR PROCEED CLASS ACTION, OR ON ;\.BASts INVOLVING CLAIMS
BROUGHT IN A PURPQRTED REPRESENTATIVE CAP ... CITY ON BEHALF OF THE GENERAL PUBLIC;
OTIIER CUSTOMERS C>:R POTENTIAL CUSTOMERS OR PERSqNS SIMILARLy S1T1JATED AND (ii) NO
ARBITRATION PROCEEPING HEREUNDER SHALLBECONSOLIDATED WITH; ,OR JOINED IN ANY WAY
WITH,ANYOTHERARBITRATIONPROCEEDING, . ' . .
ANY ARBITRATOR SELECTED .SHALLB.KNOWLEDGEA!lLE IN THE sUBJECT MATTER OF THE
. DISPUTE .. EACH OF THE P,I,RTIES SHALI,PAYAN );;QUAL SHARE OF THE ARBITRATION COSTS, FEES,
EXPENSES, AND OF THJ;: ARBJ;TRATORS' FEES, COSTS AND EXPENSES.

COMMENCEMENT OF ANY ARBITRATION PROCEE:DING TOLLS SUCH STATUTES OF LIMITATiONS.
IN ANY ARBITRATION PROCEEDING SUJJJECT TO TfllS PROVlSION; THE ARBITRATORS, OR MAJORITY
OFTHEM,.ARESPECIFICALLYEMPOWERED TO DECIDE (BY DOCUMENTS ONLY, OR WITH ... HEARING;
AT THE ARBITRATORS' SOLE DISCREtiON) .PRE,HEA.j'\ING MOTIONS WHICH ARE SUBSTANTIALLY
SIMILAR TO PRE-HEARING,llf0TIONS TO DISMISS AND MOTIONS FOR SUMMARY ADJUDICAl'ION .
nus ARBITRATioN sirALLsURVlVE Al'iY TERMINAnoN, oR EXPiRATION
OF THE ;I.GREEMENT !N WHICH TillS PROVlSroN IS CONTAINED, UNLESS AI;L OF THE PARTIES
OTHERWISE EXPRESSLY AGREE IN WRITING,
TJ>F, ACKNOWLEDGE TH;\.1' TillS AGriEMJINT EVlD'ENCES A TRANSAcTION INVOLVING
INTERSTATE COMMERCE, THE FEDERALARBITR;I.TION AcT SliALL GOVERN TilE INTERPRETATION,
ENFORCEMENTrAND.PROcEEDINGS PURSUANT TO THE ARBITRATION CLAUSE OF'fillS AGREEMJINT .
. THE ARBITRATORS .. OR A MAJORITY OF THEM. SHALL.AWARD ATTORNEY'S FEES AND COSTS TO THE
PREY;I.ILING PARTY PURSUANT TO THE TERMS OFTillS AGREEMENT:. .
NEITHER THE PARTIES NOE'THEAR!l!TRATORS MAY THE EXI;TENCE:coNTENT, OR
RESULTS OF ANY AR)liTRATION HEREUNDER WITHOUT PRIOR WRITTEN CONSENT Of ALL PARTIES
AND/OR COURT ORDER. .
VENUE OF ANY AEBITRATIONPROCEEDING SHALL BE iN BEXAR COUNTY, TEXAS.
THE TERM LENDER INCLDPES ANY OTHER OWNER AND HOLDER Of THIS NOTE AND THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS; THIS NOTE IS GOVERNED BY APPLICABLE TEXAS LAW, EXCEPT TO THE EXTENT THE
USURY LAWS OF TEXAS ARB PRE-EMPTED BY FEDERAL LAW: IN WHICH CASE, SUCH FEDERAL LAW SHALL APPLY.
VENUE OF ALL ACTIONS ON THIS NOTE, SHALL LIE IN BEXAR COUNTY, TEXAS, AND ALL OBLIGATIONS REQUIRED
HEREIN ARE PJ\RPORMAELE IN BEXAR COUNTY, TEXAS.. . .
lfloan procee4s to be used prilD.arily for personal
1
"family or hoW?ehold use,the following notice shall apply:
NoTICE To TEUs LAW IF YOU AGREEMENT vou MA;BE SUBJECT To A
FUTURE RATE AS HIGH AS 24% ANNUAL PERCENTAGE RATE, OR THE STATE USURY CEILING, WHICHEVER IS LESS .
If thi$ NGfe is to be by a on a dv.teum"g op.. the described property, then the followfu.g- notice shall apply:
THE MAXIMUM INTEREST RATE SHALI;NOT EXCEED TWENTYJ;OUR PERCENT (24%) PER ANNUM, OR THE USURY
CEILING, WHICHEVER IS.LESS.. .
PaYment is secured by. a lien qf eveD: l:ier6with, to the BorroWex:, a!\-d is additionally bY: .a.
Deed of Trust, S.curity Agreemenf and Financing of even date herewith, executed by the Borrower and/or thereof
. STEVE. E. EDLUND . , upon the following descril?ed real prOperty:
THAT CERTAIN REAL PROPERTY LOCATED' IN EEXAR COUNTY, TEXAS BEING MORE PARTICULARLY
DESCRIBED. EXHIBit
11
A
11
ATTACHED HER;ETO AND INCORPORATED Hl!:REIN,
No 01J_AI. AGREEMENTS

THE PARTIES,
THEREARE.NOWRITTli!NORALAGREEMENTSBE'i'Wii:ENTHEPARTIES;
,DELTA l'.RODUCE, LiP., . .
a ted
Bi; Managemei?-t_, Lf..C,
"B w n -- a Te-xas limted .liability com.panyB "'
er . ., / . --.,------------
Typed Name: SCOTT .:rENSEN . TypedName:
Title:
Address:
''Borrower'.'
By;
Typed Name: ..
Title:
Address:. _ .
Title:
Address
"Borrower'! .
By:.

Title:
.Address.
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. ADDENDuM TO $t,soo;ooo,oo REAL ESTATE LIEN NOTE
Number of
Payment"s
(a) Thirty-five (35)
(b) One(!)
Frequency
Monthly
Final Date: APRJL l:Z,2010.
Amount" Of
Payrrients
Pi:lncipaJ including
interest iJ;l. the
amoll!lt ofTwenty-
foirr Thousand and
00/100 Dollars
($24,000,00) each.
All outstanding
principal and all
accrued, "Q.Ilpaid
interest thereon
shall be due and
payable .
When Pavments
are Due .
. Commencing May
12,: 2007 ,. and
continuin_g
monthly 011 the.
twelfth (12ili) day
of each successive
calendar "month
untll and including .
March 12,2010.
On Final Maturity
Date,
. This credit evalUated, base"d upon the
relationship betWeen BorroWer 8nd Lender. if there is (i) "-material negative c4ange fu
the deposit andfor.pther bimking relationships between Borrower and Lender, or (ii) a material
chatlge in the financial" ownership, management and/or <;:ontrol Of the BorroWer, which
Lender reaspnably riSk of repayment, theQ. Len4er, in its sole 8.nd ab&olute.
di.scretion; may increase the interest rate: in with this credit facility by up to
1,00%; as it may.floatftpm tin:ie froin thrie. interest Will increase to L25%. abOve the New
York Prhne Rate). .
Executed this-. -. day of April, 2007,
BORROWER:
. . . . . .
nelta
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.. BALLOON RIDER
. . . . . : . . . . . . . . -. .- . . . . . . . . .
TillS LOAN IS PAYABLE ON APRIL'12, 2010. YOU MUST REPAY THE ENTIRE
PRINCIPAL BALANCE OF THE LOAN AND UNPAID lNTEREST Tfl.ENDUE. nffi:eANK
IS UNDER NO OBLIGATION TO REFJNANCETHELOAN. YOU WOULD, THEREFORE, BE .
REQUIRED TOMAJ93PA'Y'NT quT oFoirffi. RASSETs You MAY oWN, o. R you

WITHATMATURITY, YOUM!WHAVETOPAYSOMEORALLTHECLOSINGCOSTS
NoRMAiv! AssociA:rnn wrm A NEw wAN EVEN iF You oBTAIN REFiNANciNG
FROM THE SAME BANK.
. .
EXECUTEJ:i ibis _ _ day of April, 2007. .
BORROWER:
Delta fr0du_ce, Ltd., a Ijn:lite(J
By:
EXIITBir
TRACT .1:
5.779 o'f'land. situated in the-City of County, Texas,
Lot 4, Lot 5, Lot 6, Lot 7, Block 39, NCB 3698, EdgewoQd Addition,
1-Jnrecofded PI at filed j n Be"?Ca"r Co!..!nty T Office CountY,
Texas, and a. portion of Lot 53, Block 39; NCB 3698, Las Vi lias De Merida as
i I! Vo I ume 9555_, PC!ge 72,. Deed .cind PI at Records of Bexa.r CountY,
Texas; said 5. 779. tra.ct .of land being more particularly described by
metes and bounds as To 1 1 ows ;
BEG lNG, . at 112 .j on right way 1 ine
Merida Street, for t!le nort.tieaster"ly of Lot 53, 39, same
. being the:north_westerly corner of. said _Lot 4(
S 84" 22' 25." E, a I ong the ;out:-her I Y right of" way I i ne of Mer"i 9a
Street, a dista.nce of 706".56 feet to a found 1/2 inch iron rod on the
ri"ght o-r way II ine of" The Uni.on Pacif"ic _Rai !road;
of
THENCL along the arc curve tO the left haVing a radius
of 286?:00"fe6t, ang!e o"f 14". 2t 30", an arc length of 718 .. 80 feet
and a c.h9rd bearing: S-43" 18' 41" W, 716:91 feet, to a "found 1/2 inch-iron
;36 02' 54".Wo ofway line
of The Union Pacific Rai lraod, a distance o"f 183."64 feet to a set 1/2 inch
iron on the northerly right of war., i"ne o"f Ceratvo Stre"et for th6
southeasterly. of said Lot !:?3;
THENCE, 84 :10' 44." W, northerty_rig.ht O{way tine. of Cera!vo
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Street, a distancEi of feet to ;;; 1/2 irich. iron rod;
THENCE, . crossii-lg. sBid L_ot 53, Block 39; the followin9 courses;.
N 05" 34' .47'' :E, djst;ance of" 90.14 feet"to a set 112 inch rod;
S 83" 48' 09'' E, a of 10.75 feet toa set 112.inch Iron rod;
N 06" 11' 51" E, a distance: of 21.99 feet to a set 1/Z jnch irof1 rod;
N 83'
1
48' 09
11
W, a o"f 13.64 "feet to a set 1/;?: inc!"!
N -06" 1"1' 51'' E, a of ?30: 4i to a 112 i nc;h j ron rod;
N 83" 48' 09
11
W, a diStancecif 23.07 feet_to a set 1/2 inCh i"ron rod;
-N OP"11' 51" E, a of-1B.Q4 "feet taa set 1/2 .inch !roti rod on the nort:her]y
tine of. said"Lot !_53, Block 39;
'THENCE, N 84" 25'" i3" W, along the.northerly I ine o"f sale! Lot 53, Block 39, a distance
of 120.01 fee;t to :a found inph jrori rod for Cjn iilterior ang"le cqrner of said Lot
_53, Block 39, _same bein9 southwesterly cor_rw.r or said Lot 4;
THENCE, N .DB" .14' 30" E, q!onQ the I in_e of said Lot 53, Bloclc 39, a distance
of 363 .. 95 feet to the POINT OF o"f herein describecl tract, and containing.
5. 779 acreS of land; more qr .. less .
. TRACT 2: .
2.069 ai::.i--es situated it'! the c"ity ofSi'l!l Bexar County,
the Ea:;ri 8. 3.1 feet of Lots ."57 through 65, B I ock 40, N_CB 3699,. a! I o"f Lot 17, B I ock 40,
NCB 3699, -Edg.ewood.Addition, as recorded. in Vqlume Page Deed and Plat
Records of Bexpr County, Texas, and all of Lot 1a; 40, NCB 3699, H.A. Stauf"fer &
M.G. DevineY as recorded in 223, Deed and Plat Records
of aexar County, Texas;.sa"id 2.069 acre tract Of land beiRg more partjcularly
descrjbecl a$ fol.lows:.
BEGINNING,. at. a .1./2 iflch "iron rod set. on.the ri9ht cif Vi(ay I ine of Merida
Street, Said 1/2 inch iron rod being N .84" 22.' 25" W, feet "from the southeast
corner .. of sq i d Lot 65;
THENCE, N 06" 14' 53" E, crossing Saiq Lots 57 throu9h 65, Block 40, along the westerly
I i ne "of that certain of I and conveyed -to W!'lst Qoast . Prod4ce Compqny, 1 nc, as
recorded ln 968, Publ i_C Records of BexarCounty, Texas, a
of 364 .. 13 feet tQ a 1/2 inch iron rod set;
THENCE, S 84b .21'53" t;,_"aiOng the northef'!y line of saicl Lot 57, a"t a distance of
8.31 feet the nort!least of_ Lot 57, same.being thenort.hwest corner.of
Lot 17, at a distance of 127.92 feet the northel!st corner ofLot 17, same
being i;he nor:-thweSt cQrner of said J_ot 18, in all_a distance "feet to a,.
112 inch iron rod set. northeast cQrner of S<!ld.Lot 18! same betng the
northwest carper o.f Lot 19;
THENCE, S Q6 14' 53!' W, .C!loilg the CommOn boundciry I jne Lot 18 and Lot 19, a
distance of feet to a 1(2 inch iron :rod on the northerly right of .way I ine
of Merida for Corner of.saiq Lqt 18, same being the southwest
of" Lot 19;
THENCE! N 84.22' 25'' W
1
northerly .r.igf'!t.Of' way I ine of Merida Street, at a
. of' 119.60 'feet passing th.e southwest corner of Lot 18, same being tf'le
corner Qf Lot 17, at a distapce of 239.?1 'feet passing the southwest corner
of Lot 17, same. being the southeasl;: corner of' Lot 65, in a I I a tpta ! 0 i stance of
24f.52 to the POINT OF BEGINNING of l"}erein tr.a,ct, andcont,aining 2.069
acres of land! more or less.
TRACT 3: . . . . . .
17, Block 3, New City Bloc!< A36, is Hood, Unit 2, to the City of.
San Antonio, Bexar CQunt)r, Texas according t.o the map or pll'!t recorded ir1,
Volume Page 91, Deed and Plat Records of County, Texas, SAVE AND EXCEPT
that portloO. conveyed to the City of San A!1tonio in VolUme 5202, 1204, OffiCial
Pub! ic Records or Real .Propen:.y of Bexar .Texas ..
TRACT 4:
Condorninium Ul'lit 10:4, I ding A, New Ci.ty B'lock 16957, PO!'>t Da"k Condomin.iums, .in the
City .of San Antonfo, Bexar. County, Texa.s, according Condominium Decl<'!ration
in .Voru.me 8, Page 159., anQ Vol.ume 8/ Pagl=l 1B!?Ii Colldominium Records Bexar
County; .TexaS, together with undivided 4.52.904519 percent interest in the common
elements..
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EXTENSioN AND/OR MODiFICATION AGREEMENT
RESIDENTIAL REAL ESTATE LIEN NOTE INDEBTEDNESS
Date : Marcl1 15 20l0
Account No: -'2"4"'10u;4"4"'3-"78!><. 8'-------------
Bortower : Deltft Produr;e ud.
together with any and all accrued and unpaid interest
and I or late charges ..
Each peym.ent shall be applied as of its scheduled due date alld in
the order of application as the Lender in its sole discretion may
from time to time elect.
Any outstanding and unpaid principal, accrued and unpaid
and all fees, late charges afl.d/or other charges incurred itt this
transaction by, or for the benefit of. Borrtlwer, if any, Which retnaib.
due and owing on the Final Maturity Date are due and payable on
such date.
the failure to pay SI!Y Qfthe pa.y.tnent(s) ofppn_cipal
or any intere11t thereon or accrued fate charges, when the same is
due and payable shall permit Lender, at its option, to-accelerate the
maturity, without notice to Borrower, of all, or ai:Jy portion. of the
outstanding_unpaid principal and all accrued and unpaid
interest, and all !iCctued and unpaid late chargeS under the Note I
this. Agreement, whereUpon the same Shall be due "and payilble
immediately.
The starting rate of interest will be 4.75
per annum beginning on 15--MarMlO
NYPF+l/4%
Final Maturity Date: AprillS, 2011
o/o Borrower renews and extends the Note, and any and all Security
Agreements, security interests, Deeds of Trust, and/or other liens
crf:lated by Borrower in favor of hiterb.ationai Bank 6f Commerce
Note, and all Security Agreements. interests, Deeds of
'trUsis, and/or other liens Created by Deeds of TrUsts and/or other
Loan Documents, if any, continue as wH.ften, tu'l.d remai:tl ift full
force (lhd effect
Borrower promises . to pay to the order of International Bank of
Commerce the Outstanding Principal Balance on the Note
according to the terms hereof with interest as it accrUes. on
the outstanding unpaid principal balance until paid. In .nO. event
. shall the rate of interest to be paid on the unpaid principal
balance be less than four and. three quarters ( 4. 7 5%)
per annum. nor more than the maximum legal rate allowed by
apppcable law.
To the extent" allowed by law, if any payment due under the
Note/this agreement is more than ten (tO) days late, Borrower will.
be charged a late charge of .five percent (5%) of the late payment
. ainount. b61;h prib.cipal and interest The "late charge" may be
accessed without notice, and shall be immediately due and payable.
Bo.ttowet
Delta Produce Ltd., a texas limited partnership
Address
2001 S. Laredo
BY:
NAME:
TITLE:
RW Esta\1: Lien Nole Jndebtdneu (05/i 71.2006)
TO tllil I':XTENT ALLOWED BY LAW, ALL MA 1'UREJ)
UNPAID .AMOUNTS WILL BEAR iNTilREST AT TilE
MAXlMtJM LEGAL INTEREST RA Til ALLOWED BY
APPUCABLE LAW. If applicable law does not set a maximum
rate of interest for matured unpaid amounts, then Bort'o\'ver agl"ees
that tlie maximum rate-for such amounts shall be eighteen percent.
(18%) per annum.
NO ORAL AGREEMENTS
THIS WRITI'EN LOAN AGREEMENT REPRESENTS THE
FlNAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICfED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTs OF .1'III!: P ARTlES. 1'III!:RE ARE NO
UNWlUTrEN ORAL AGREEMENTS BETwEEN 1'III!:
PARTrllS
Addiess
mmetce
Dale: Aprii1S.2011
No:
Borrower: DeliA 'f>i.oduee LP ..
(whethei' one or more).
b).ferest )laid $'
Outstap.iling'Principal 9f$ .1.374201.49
-pay'iilile on i( no theh
15 months: I.:JmonJhly paymeutJ":pf nMOlt beginnln;g April 15
lOl111nd m"Onth"theR!llfter,. with :
payment ofthe:Unpaid plindpal bahntce plils the WJpaid_:te_cn'ted
lQflturity date of July 42012 . . . .. . :
together with any and all accrued and unpaid
IO:te
The "late cQartre"_maybe accessed withoUt notice, and sbaJI be
immiiliately due-and payable.
. Each payment shill be as "of its date and
!lie oriler o.fapplication its the Lender itlitll sQle discretiOn
-may .from time to time elect.
The (a'ilur Of Bo.rrowei .to-pay imy of_" the. payuient( s) of pr.in.cipill
-intere,<Jf Ot: -late chargeS, wh.eri the same is
due and payab_te sbal!_perm!tl..l;nder, at itS option. tO _aceelerate. the
mhlurity, WitDOiil: notice tO B_qtrower., of all,. or anypoition, of the
unpaid prindp!!l baiance and all accrued and unpaid
inten;:st, and all and unpaid late charges under the I
this Agreemerit. the same shall be due and p.aY,llble
im"{IIediately.
Any unpai_d"prindpal, -accrued and unpaid ibteresl
ail all "1ate and! of charges inCurred iit this
or for the Of. !k>rrower, if any, wliiCh remaiti.
iiu!l and" oWing on the Fi"nal Maturity Dafe are due apd payable on
suchdat6
Borrower rene.ws and .extends the Note, and. any .and ali Security
per.annum begiiin:ip.g Qn security intereSts, Deeds -ofTrust, and/or "Other liens
. created by BOO"Ow.er in favor Of I"nternatio"nitl aank of Commerce.
as provided her.ein, au other terms .an4 Con4itions .of the:
N!ltc, and all Securjty Agreenients, security inlerests, Deeds of
NYPF+l Trusts, andfor"-other liens created by Deeds- of Trusts andfor othe:r
i.e$ Documents,. if My, ebntinue as written, and. remain in full
F.inal MaturitY Date: ;July 1 . 2:011
- fon::e !lntl"effect.
Borrower prOmiS;eS to .pay.to -the order of Bank of
Commerce the. -qutstanding Principal on Note.
according to. the .terms hereof together with lriierest as it aecnies oo
the. outstanding llnpirld. Prlilcipal balance untx1 paid. In no event
shalJthe rite of inferes:ito paid on the princiP.al
batam;e:be less than four andihree qn.arterx pen:eD.t -(75%
per-.annum, nor more than the maximum legal rate allowed"by

'ro l:b.e menr al_lowi;<i"by law.;- M the
NOte/this Le'ndermay ln Its Sole discretion {i} iu9i:cise
-"the interest on the prin:clpai. portion Of liny pa_ym.ent is
not received by- ftte p(l.ymerit_ due date until paid. to the: maximum
allowed by. Jaw-,. on: a full calen:9a:r year b"asis from
tbe-paym.ep_t d)le da;te until or (ii} !ihoutd.any paymQ:It be more
th!m ten (lO).days late,l}orrower shall pay a.one-time "late charge"
P!=l" IiitC. pit}imeilt: equal to fiVe percent (5%) ofthe sml)Unt of the
J'ast due principal <in4 hiterest.Of sucli With a "minjmnnl of
$1-0.00 lind a inaximw:D Of$1-,560,00-p.;r-Iate payinent .
Bcir:rower
Defta Produce;. LP.
A.Texal'l Ilmited Partnetsbip
BY: .D.elta Produce .LLC.
Add,ress
2001 S Laredo
TO' 'THE EXTENT ALLOWED B:Y" tAW., ALL MATURED
UNPA.ID. AMOUNTS WILL BEAR lNl'SREST AT 1HE
!li>lxiM.l:!M. LEGAL INTE!UiST RATE ALLOWED
APP.LiCABW If does not set a. maximum
of ip.teresf fur matured unpliid- .BOrr\>wer agrees
that the maximum rate for Sucii amounts.sb"all be eitlJteen:Pefcent
(18%)peranliuai.

Tins. Wl.U'l"I'N AGI.tEl!fMEl'IT RE;PRJ):SENTS THE
F.iNAL AGREEMENt BJi;T\'v.EEN Tim PARtiES Am>
MAY NOT "BE CONTRADICTED. BY EVIDENCE OF
PRIOR, coNTEMP9JiAN.Eous OR SUBSEQUENT
AGREEMENTS OF THE- PARTIES. THERE. AJm NO
UNWRlTI'E.N 6ItAL AGREEMENTS BETWEEN THE
PARTIEs . .
Address

San- Antonio rexas 78207
Name: McMillan
'ritle: Assistant VicC
I
12-50073-lmc Doc#45-6 Filed 01/23/12 Entered 01/23/12 13:16:08 Exhibit 6-Deed of
Trust-Staci Properties Ltd. Pg 1 of 16
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of:
NOTICE OF CONFIDENTIALITIRIGHTS: IF YC)U ARE A NATURAL PERSON, YOU MAY
REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT
BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY
NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
. DEED OF TRUST, ASSIGNMENT. OF RENTS, .
imcUWTY AGREEMENT AND FINANCING STATEMENT
THE STATE OF TEXAS

KNOW ALL MEN BY THESE PRESENTS: llllllllllllllllllllllllllllllllllllllllllllllll!lllllllllm
LT1-77-20070108604-1
COUNTY OF BEXAR
THAT I, WE, or EITHER OF
STACI PROPERTIES. LTD a Texas limited partnership of tile
Cmmty of BEXAR , State of TEXAS , sometimes hereinafter Grantors
(whether one or more-) for the purpOses of securing the indebtedness hereinafter described, lind in Consideration of the sum ofTEN
DOLLARS ($1 0,00) to us in hand paid by the.Trustee hereinafter named, the receipt and sufficiency of which is hereby acknowledg.ed,
and forth.e further consideration of the uses, pu_rposes and the trusts hereinafter forth, have GRANTED, SOLD, AND CONVEYED,
and by these presents do GRANT, SELL and CONVEY. unto STEVE E. EDLUND Trustee, of
International Bank of Commerce, 130 E. Travis, San Antonio, Bexar County, Texas 78205 and his substitutes or successors, all of the
following described property situated in BEXAR County, Texas (hereinafter the "Property"), to.wit:
THAT CERTAIN REAL PROPERTY LOCATED IN BEXAR COUNTY, TEXAS BEING MORE PARTICULARLY
DESCRIBED ON EXHIBIT "A" -ATTACHED HERETO. AND INCORPORATED. HEREIN.
llllllll/11/llllllllllllllllllllllllllllllllllllllm IIIII
,LT2-12862-148-1G
. . ' .
TO HAVE AND. TO liOLD the .above. describe'd Property, together with the rights, privileges and appurtenances thereto belonging
unto the said Trustee, and to his substitutes or successors forever and Grantors do hereby bind themselves, their heirs, executors, admln
isf.rators and assigns to warrant and forever defend the said premises unto the said Tn1stee, his substitutes or successors and assigns for
ever, against the claim o'r claims, of all persons Claiming or to claim the same any part thereof.
*This convey.arice, howe:ver, is ffiade' in TRUST secure payment of.one Real Estate Lien.Note/Promiss.orv Note. d?ted
e , in the principal of ,_; -,.-,--,--:-.,.,-:-:-------
. ) (the executed by the makers of said Note, ____ _
-=-------who together with the above named Grantors, shall hereinafter collectively and interchangeably be referred to as
Grantors, payable to the order of
INTERNATIONAL BANK OF COMMERCE
=----:- hereinaftt.ir referred to as Beneficiary, in the City of SAN ANTONIO BEXAR County,
Texas and pa)rable as-therein provided, including late bearing intereSt as therei!l stipulated, providing for acceleration ofmatu
rity fof reasonable and necessary attorney's fees; .
* SEE ADDENDUM TO DEED OF TRUST OF RENTS, SECURITY AGREEMENT .AND FINANCINGSTATEME'
herei.n contained, and make payment of said indebtedness as the
same shall become due and payable, then this shall become null and void and of no further force and effect, and shall be
released at the expense of Grantors, by the holder thereof, hereinafter called Beneficiary (whether one or more),
Grantors COVENANT and AGREE as follows:
That they are lawfully seized of said Property, in fee simple absolute, and have the right to convey the same; that said Property is free
from and except as provided,.
Page I ofJJ DOT-12/03 IBC9004
To protect the title and possessior . -said Property and to pay when due all taxes ! ... 1ssessm.ents now existing or hereaff;r levied oi:.
assessed upon said Property, or therein by this D_eed Of Trust, anO to and maintain the lien P.ereby creat-
ed as a first and prior lien on said including any improvemellts hereafter made a part of the realty.
To keep the improvements on said Property in good repair and and. not to permit or cornrnitanywaste thereofj to keep said
buildings occupied so as not to the i.Dsurance carried thereon.
To insure and keep insured all improvements now or hereafter created upon said Property against loss qr damage by fire and wind-
storm. and any other haZard or hazards as m:ay be reasonably from time io time by B'eneficiary 4uring the term of the indebt
edness hereby secured, to the extent of the total amount of the indebtedness hereby secured,or to the extent of the full insurable value
of said improvements, whichever is the lesser, in such fonn and with such insurip.ce company or companies "as may be approved by
Beneficiary, nnd to deliver to Beneficiary the policies of such insurance having attached to said policies such indemnity
clause as Beneficiary shall direct; to deliver renewals of any such policies to Beneficiary at least ten (10) days before any such insur-
ance policies shall expire; any proceeds which Beneficiary may .receive under sucp. policy or policies, may pe applied by Beneficiary,
at its option, to reduce the indebtedness hereby secured, whether then matured or to mature in the future, imd in such- manner as
Beneficiary may elect, or Beneficiary may pennit Grantors to use said proceeds to repair or replace all improvements damaged or
destroyed and covered by said policy.
That Beneficiary may employ counsel for advice or other legal service at Beneficialy's discretion in connection with any dispute as to
the debt hereby secured or lien securing same or this instrument, or any litigation or arbitration proceeding to. which the Beneficiary
may be made a party on account of this lien or which may affect title to the Property on I:!Ccount of this lien or wmch may affe.ct
the title to the Propeny securing -the indebtedness hereby secured or which may affect said debt oi: lien. Any reasonable and necessary
attomey"s fees so incurred shap be added and part of the debt hereby secured.
In addition to the land and improvements above described, the lien of this Deeq Of Trust covers and includes all abstraCts and "title
'papers furnished or to be in connection with the making of the loan evidenced by said Note, the.payment of which is secured
hereby.
Grantors agree to pay on demand for all abstracts, title policies, appraisals,_recorPing fees and attorney's fees incurred in connection
with either the closing of the loan secured hereby or "the renewal, extension, mOdification and/or rearrangement of any part of the
indebtedness secured hereby, or, in the alternative, such amounts expended by Beneficiary be added to and be a part of the debt
hereby secured.
That in the event Grantors shall fail to keep the improvements on the Property conveyed in good repair and condition, or to pay
promptly when due all taxes and assessments, as aforesaid, or to preserve the prior lien of this Deed Of Trust on said Property or to
keep the buildings at}d improvements insured, as aforesaid, or to deliver the policy, or policie"s, of insurance or the renewal thereof to
Beneficiary, as aforesaid, then Beneficiary may, at his option, but without being required .to do so, make such repairs, pay such taxes
and assessments, purchase any tax title thereon, remove any prior }.iens, and prosecute or defend any suits in relation to the preservaw
tion of the prior Hen of this Deed Of Trust on said Property, or insure and keep insured the improvements thereon in any amount not
to exceed that above stipulated; that any sums which may be so pa.jd out by including the costs, expenses attorney's
fees paid in any suit affecting said Property when necessary to protect the lien and all other expenses and costs agi'eed to be paid
by Grantors under the Deed Of Trust which are not paid when due shall bear interest from the dates of such payments at the prematu-
rity interest rate stated in the Note hereby secured, and shall be deemed a pan of the debt hereby secured and recoverable as such in
all respects. ln addition, in the event shall fail to keep the buildings and improvements insured, as aforesaid, or to deliver the
policy or policies; of insurance or the renewal thereof to the Beneficiary, as aid, the Beneficiary may, at his optio11, but without
being required to do so, insure and keep insured the improvements thereon in any. amount not to exceed that above stipulated (includw
ing without limitation, to the extent allowed by law, the purcliase of Single lnterest Insurance which may provide coverage only for
Beneficiary); that all sums paid for insurance premiums by Beneficiary, as afore&aid, shall bear interest from the dates of such pay-
ments at the prematurity interest rate contracted for in the Note secured, and shall be paid by Grantors to Beneficiary upon
demand, at the same place at which the above-described Note is payable, and sh!l,li be deemed a part of the debt hereby secured and
recoverable as such in all respects.
c'
Grantors expressly agree annually to furnish Beneficiary validated receipts paymenl of all t?xes assessed against, and insur-
.ance coveririg, the said Property, Such tax receipts shall be furnishefl. on or before.fifteen (lS)"days the date_suqh taxes become
i:ldinquent. The insurance receipt shall be furnished on or before tefi (1 0) days pripf to the date the current coverage expires.
If Graritors should fail to furnish such receipts, Beneficiary may require Grantors deposit monthly with BeneficiarY on the payment
dates specified in the Note hereby secured in addition tO the morithly payment of principal and interest provided in the Note hereby
secured a sum equal to 1/12 of the estimated annual taxes and insurance prerniumi: covering such Property, such estimates to be made
by Be"neficiary. BeneficiarySHathhpld such deposits, without bond and without aCcrual of interest thereon.," "to pa)r taxes and insurance
premiums as they become dll:e, hereby is fi!.l.lypaid a?-d.the balance delivered to Grantors.
. . '
Subject to applicable Jaw and notwithstanding the preceding paragraph, at Beneficiary's option, and in its sole discretion, Beneficiary
may require Grantors to pay Beneficiary on th"e day .rtl.OnthlY payments are due under the Note, until the Note is paid in full, a sum
("Funds'') for (a) yearly taxes and ass.essments which may attain priority over the lien of this Deed OfTrust as a lien on the Property;
(b) yearly leasehold payments or ground rents on the Property, if any; (c). yearly hazard or propeny insurance premiums; (d) yearly
flood insurance premiums, if any; (e) yeatly nlongage insurance premiUms, if any; and (f) any Sums payable by Grantors to
Beneficiazy, in accordance with the preceding paragraph, in lieu of the payment of mortgage insurance prem,iums. These items are
called "Escrow Items", Beneficiary may, at any time, hold Funds in an amoUnt not to exceed the maximum amount a lender
for a federally relat"ed I,nortgag.e loan ffia"y require fo:rGrantor's esci'ow account under the Federal Real Procedures
Act of 1974 as amended from time tb time, 12 U.S.C. Section 260"1, et seq. ("RESPA"), unless another law that applies to .the Funds
sets a lesser amount. If so, Beneficiary may, "at any time, collecf and hold Funds in any amount not tp exCeed the lesser amount.
Beneficiary may estimate the amOunt of Funds due on the Oasis Of current data and reasonable estimates of expenditures of future
Escrow Items or othetwise in accordance with applicable law.
The FunQs shall be held in an institution whose deposits are insured by a agency, inst:ru.nl.entality, or entity (in.cluding
Beneficiiry, if Beneficiary is such an institution) or in anY Federal Home Loan Bank. Ben.eficiary shall apply the Funds to pay the
Escrow Items. Beneficiary may not charge Grantors for holding $d applying FuD.ds; annj.lally analyzing the es-;row aCcount, or
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verifying the Escrow unless Pays Borrower interest .on the FundS and law permits B-eneficiary to
such a charge, However, Beneficiary may require Grantors to pay a one-time charie for an independent real estate tax reporting serv-
ice used bY Beneficiary with this loan, unless applicable Jaw provides otherwise, :Unless agreement _is made or applica-
ble Jaw requires interest iO be paid, Beneficiary shall not be required to pay Grantors any interest or earnings on the Funds. Gi-antors
and Beneficiary may agree in writing, however, that interest shall be paid on the Funds. If recjuired JaW, Beneficiary shall give to
Grantors, without charge, an amiual accounting of the Funds, showing credits and debits to the Funds and the purpose for which eacQ
debit"to the Funds was made. Funds pledged as secUrity for all svms secured by this Deed Of Trust.
If the Funds held by Beneficiary exceed the amoUnts permitted to be held by applicable law, BeneficiarY shall account to Grantors for
the excess Funds in accordance with the requirements of applicable Jaw. If the amount of the Funds held by Beneficiary at any time
is not sufficient to pay the Escrow ItemS when due, Beneficiary may so notify Grant?rS in writing, in such case Grantors shall pay
to Beneficiary the amount necessary to make up the.deficiency. Grantors shall make up the deficiency in no more than twelve (12)
monthlypayments, at Beneficiary'ssole discretion.
Upon payment in full of ali suins secured by this DeedOf Trust, Beneficiary shall promptly refund to Grantors any Funds held by
.Beneficiary. If, under foreclOsure proceedings, Beneficiary shal-l acq.uire Ol' sell the Property, Beneficiary upon the. acquisition or sale
of the Property, shall apply any FundS held by Beneficiary at the time of the acquisition or sale as a credit against the sums secured by
this Deed Of Trust,
Grantors shall not impose, or P.ennino be impos.ed, anY restrictive covenants upon the Property herein described or execute or file, or
pemlit to be filed, any -subdivision plat or concl.GJminium declaration or other instrument affecting said Property without the prior writ-
te.n consent of Beneficiary.
All agreements between any of the parties he_reto are hereby limited by these provisions which shall override all such agree-
ments, whether now existing or tberea.fter ariSing, .If from a construction-of any document related to any transaction between
Bank, Gran"tors and/or any Other_person or erititY exec.uting this Deed Of Trust, any tenn(s) or provision(s) of any document is
in conflict with applicable laW, such sb;aU be automatically reformed and modified as to comply with applicable law,
without the necessity of execution o_f an"y amendmen,t or new document.
That in the event of default in the payment of anY installment. principal or interest, or of a late charge, of the Note hereby secured, or
in the payment, when due, of any other .indebtedness secured hereby, in accordance with the tenus thereof, or of a breach of any of the
covenants heiein contained to be performed by Grantors then and in any of such events Beneficiary shall, at Beneficiary's option,
GRANTORS HEREBY EXPRESSLY WAJVE NOTICES OF NON.PAYMENT, PRESENTMENT FOR PAYMENT, PRESENT A
TIONSIDEMANDS FOR PAYMENT, NOTICES OF INTENTION TO ACCELERATE MATURITY, NOTICES OF ACTUAL
ACCELERATION OF l\.1ATURITY, PROTESTS, AND NOTICES OF PROTEST, accelerate the maturity of the Note(s) hereby
secured and the entire o.utstanding and unpaid principal indebtedness hereby secured with all accrued and unpaid interest
thereon, all accrued and unpaid late !?barges, fees and other sums shall. thereby immediately due and payable, aTid iu the event
of defaultin.the payment of said indebtedness when due or .decl-ared due, -it shall thereupon, or at any time thereaf1er, be the duty of
the Trustee, or his successor or substitute as hereinafter provided, at the request of Beneficiary (which request is hereby conclusively
presumed), to enforce this trust; and after aQvertising the time, place and terms of the sale of the .above described and conveyed
Property, then subject to the lien hereof, for at lefist twenty-one (21) days preceding the date of sale by posting written or printed notice
thereof at the County Courthouse and by filing, a copy of such notice in the office.ofthe County Clerk of the county where said Property
is situated, which notice may be posted by the Trustee acting, or by any person acting for him, and the Beneficiary (the holder of the
indebtedness secured herej>y) has, at least twenty-one (21) days preceding the date of sale, served written or printed notice of the pro-
poSed sale certified mail on each perSon and/Or entity(s) obligated to pay the indebtedness secured by this Deed OfT rust according
to the records of Beneficiary by deposit of.su.Ch notice, enclosed in a postpaid wrapper, properly addressed to such person(s) and/or
entity(s) at such person's and! or entity(s) most recent address as shown by the records of Beneficiary, in a post office or official9epos-
itory .under the care and custody of the United States Postal Service, the shall sell the above described property, then subject to
the lien hereof, public auction in accordance with such notice at the Co1:1rthouse of said county where such Property is situated (pro-
vided where said Property is situated in more than one county, the notice to be posted as herein provided shall be posted at .the
Courthouse of each of such counties, and filed with the County Clerk of each of such counties where said Property-is situated, and said
above described and conveyed Property may be sold at the Courthouse of any one of such counties, and the notices so posted and filed
shall designilte the county where the Property will be sold), on the first Tuesday in any month between the hours often o'clock A.M.
and four o'clock P.M., to the pighest bidder cash, selling all of the Property as an entirety or in such parcels as-the Trustee acting
may elect and make due. conveyance to the Purehaser or Purchasers, with general warranty binding Grantors, their heirs and assigns:
and of the money arising from such sale, the TruStee acting shall pay first, all the expenses of advertising the sale and making the con-
veyance, including a reasonil.ble commission to himself,. which commission shall be due and owing in addition to the attorney's fees
provided for in said Note, and then to Beneficiary the full amount of principal, interest, attorney's fees and late charges due and unpaid
on said Note and all other indebtedness secured hereby, rendering the balance of the sales price, if any, to Grantors, their heirs or
assigns; and the recit.als in the conveyance to the Purchaser or Purchasers shall-be full and conclusive evidence of the truth of the
ters ther.ein stated, and all prerequisites to said sale shall be presumed to have been performed, and such sale and conveyance shall be
conclusive against their heirs and
Beneficiary may remedy any default; without waiving same, or may waive any default without waiving any pri-or or subsequent default.
It is agreedj that in the event a foreclosure hereunder should be commenced by the Trustee, or his substitute or successor, Beneficiary
may at any time before the sale ofsaid Property direct the said Trustee to abandon the "sale, and may then institute suit for the collec
tion of said Note, and .for the foreclosure of this beed OfTnl;Stlien; it is further agreed that if the .Beneficiary should institute a suit fer
the collection thereof, and for a foreclosure 0fthis Deed Of Trust lien, that he may at any time before the entry of a final in
said suit dismiss same and require the Trustee., his substitute or successor, to sell the Property in accordance with the provisions of this
Deed Of Trust. r
Beneficiary shall have the right to purchase at any sale of the Property, being the highest bidder, and to have the amount for Which such
Property is .sold credited on the debt-secured hereby.
Beneficiary, -in any event, is hereby authorized tO appeint a substitute trustee, or a successor trustee, to act instead of the Trustee named
herein without other formality than the designation in writing of a substitute or successor trustee; and the authority hereby conferred
Pagelofl-3 DOT-!2/03 IBC9004
shall extend to the r.. her successor and substitute trustees successi-. until the indebtedness hereby secu.i-ed has beeri.
paid in fullj or until said Property 1S sold hereunder, and substitute and Successor tnlstee shall succeed to all_the rigl).ts and pow-
ers of the trustee nam,ed herein.
In the event any sale is made of the above described or any portion thereof, Under t11e of ibis Deed Grantors,
their heirs and assigns, shall forthwith upon making of such sale .surrender and deliver possession of the Property s9 sold to the
Purchaser at such sale, and in the event of.their failure to do so they shall from and after the malQng of sale be and con-
tinue as tenants at will of such Purchaser, and in the event of failure to sun:nder pOsseSsion of saiQ Property upon. demand, the
Purchaser, his heirs or assigns, shall be entitled to institute and maintain an actioD. for forcible detainer of said Property in the Justice
of the Peace Court in the Justice Precinct in which such Property, or any"pait thereof, is situated.
Grantors agree that any resale by Beneficiary of the Property described in this Deed Of Trust <ifter f!).ay be made for !' price
below the fair market value (i.e. at and that Beneficiary is not required to re-sell the Property for a price to or above
f:i.ir m8.rket value (i.e, retail). Grantors agree that the sales price obtained by Ben"efidiuy at any such reSate not be used in deter-
mining the fair ma.rket value of the Property for the purposes of detennining under Section 51.003.' of the Texas Property Code,
To the greatest extent pe_rroitted by law, Grantors hereby_ waive a:ll rights and remedies created under Section 51.003 of the Texas
Property Code includingj without l.imitationj the right introduce evidence of the amount of the sales price of the Property sold by
Beneficiary following any foreclosure of the liens pursuant to the tei:ms of this Of Trust.
It is agreed that the lien hereby created shall take precedence over and be a prior.lien to any other lien of any character whether ven-
dor's, _materialmeri's, lien hereafter created on above=describ"ed Pr6perty, and in the event the proceeds 0fthe:indebt-
edness secured hereby as set forth hei'ein are used to pay off and satisfY any liens heretofore existing on said Property, then Beneficiary
is, and shall be, subrogated to all of the rights, liens and remedies of the holders indebtedness so paid.
It is funher agreed that if Grat\tors, their heirs or a.ssigns, while the owner of the hereinabove described propertY, should commit an act
of bankruptcy, or authorize the filing of a voluntary petition in bankruptcy, or should an act of bankruptcy be committed and involun-
tary proceedings instituted or threatene<;l,. or should the Property hereinabove described be taken over by a Receiver for Grantors, their
heirs or assigns, the Note hereinabove described may, at the option of Beneficiary; immediately become.due and payable, and the act-
ing Trustee may then proceed to sell same under the provisions of this Deed Of Trust,
Grantors hereby transfer and assign unto Beneficiary,. to be applied ori. the debt secured hereby: (a) all eminent domain or condemna-
tion award mopeys which may hereafter be awarded or paid for the condemnation of the hereinabove described or any part
thereof or for any portion of the premises which may be appropriate for any public or quasi-public use, or by virtue of private sale in
lieu thereof and any sums which may be awarded or become payable to Grantors for damages caused by public works or construction
on or near the Property; (b) all the bonuses, rents, royalties, damages and delay moneys that may be due or that may hereafter become
due and payable to the Grantors or their assigns under any oil, gas, mining or mineral lease or leases of any kind now existing, or which
may hereafter come. into existence (including agriculn.tral and/or htmting contracts of every kind) covering the above-described
Property or any part thereof; (c) all proceeds from the sale of crops grown on the Property, as well as all pasturage and/or grazing or
hunting fees, Grantors authorize nnd direct payment of such money to said Beneficiary until the debt secured hereby is paid. Such
money may, at the option of the Beneficiary, be applied on the debt whether or not. The Beneficiary shall not .be obligated, in any
manner to collect said moneys or any pan thereof, and shail be responsible only for amounts received by the Beneficinry. Nothing
herein contained shall be construed as a waiver or prejudice to the priority of this lien or the options hereunder in favor of said
Benefidary.
It is agreed tha,t an extension, -or extensions, may be made to the time of payment of all, orpart, ofthe indebtedness secured here-
by, and that anY p.art of the above described Property may be released from this lieJ;l. without altering or _affecting the priority of the lien
created by this Deed Of Trust in favor of any junior encumbrance, morfgage.e or Purchaser, or any" person acquiring an intetest in the
Property hereby conveyed, or any part therebf; it being the intention of-the hereto to preserve this lien on the Property. herein
described and all improvements thereon, and that may be hereafter cons.tructed thereon, first and superlor to any liens that may be
placed thereon, or that may be fixed, given or imposed by law thereon after the eXecution of this instrument t).otwithstand.ing any such
extension of the time of or the release of a portion of said Property fran; this lien.
Jn the eventany portion of the indebtedness hereinabove described cannot be lawfully secured by this Deed Of Trust lien- on said
Property, it isagreed that the first payments made on-said indebtedness shall be applied to the discharge Of that portion bf said indebt-
edness. .
Nothing contained herein or in the Note shall ever entitle Bimeficiary
1
ti-pon the al'ising of any contingency whatsoever, to receive
or interest in excess of the highest r"ate allowed by the_.laWs of the of Texas or .to the extent Federal Law permits a
gre.ater rate, thep such greater ratet on the principal indebtednesshereby or on any money obligation hereunder and
in no event shall Grantors be Obligated to pay interest thereon in excess of rate.
If this Deed Of Trust is executed by only one person or by a corporation, the pluial reference to Grart:tors-shall be"held to include the
singular and all of the covenants and agreements herein. undertaken to be performed by and the rights conferred upon the respective
Grantors name herein, shall be binding upon and inure to the benefit of not only said parties respectively but also their respective heirs,
executors, administrators, grantees, successors a11d assigns,
. . .
ln the event the hereinabove described Property is sold, conveyed, or otherwise disposed of without the priOr written consent of
the the maturity of the outstanding and unpaid principal, -all accrued and unpaid interest, all accrued and unpaid
charges, and other fees and/or charges afi.sing out of said Note or hel'eunder may, at the option. of the be accelerated and
the Beneficiary may immediately demand payment of the then outstanding and unpaid principal sum, together with all accrued and
unpaid interest due thereon, and all accrued and unpaid late charges, and other fees and/or charges then due and owing.
ln.the event Grantors should seek a temporary restra,ining order or an injunction or other legal actiOn. be it temporary or permanent, to
prevent, hinder or delay the exercise by Beneficiary of its rights and remedies under this Deed OfTrust, including, withou.t limitation,
its foreclosure rights, upon the occunence of as default, as he!ein provided, then Grantors agree to pay -and/or reimburse Beneficiary
for all costs and expenses, including its reasonable and necessary attorney's fees, incurred by BenefiCiary in connection with its
Page4ofl3 DOTl2103 IBC9004
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defense, appearance and/or other act,iontaken by BimeficiaryWith thereto, such payment and/or reimbu'rsemerit to be made
whether or not Beneficiary is the prevailing pai:ty in any suqh injunction or temporary restraining Order or 16gal or arbitration Prov
ceeding. Gra.ntor.s agree .to contact, iq writing, Dennis E. Nixon, prior tO the institution of any such legal or arbitratiqn proceedings so
as to permit Beneficiary the appear and defend itself .
. It shall be an event of defLlllt under this Deed Of Trust shOuld Gr3.ntors, Or any of them or any guarantor, fail to timely deliver any and
all financial statements, income tax returns, inventory reports, cash flow information. acCounts receivable reports, or any other
ness, tax or finan.cial infonnation requested by Beneficiary.
Grantors hereby grant Beneficiary the right to protest any and all ad valorem taxes and special assessments made against the Prop'erty
covered by thls Deed Of Trust. In that regard, Grantors sha!J deliver to Beneficiary a tme and correct copy, when received. of all tax
assessments, valuations, reilppraisals and notices received by Grantors from all tax authorities. Beneficiary shal-l have the" right
to appear in all ta}< proceedings and file appeals concerning taxeS affecting the Property or any portion thereof.
Grantors expressly represent that this Deed Of Trust and the N9te hereby secured are given for the following purpos'e, to-wit:
TO REFINANCE CERTAIN INDEBTEDNESS OF GRANTORS.
To the extent allowed by law, this conveyance is also made in trust to secure and enforce the payment of any and all other indebted-
ness of Grantors to Beneficiary presently existing or whlch-may in anymanner or means hereafter be incurred or created by Grantors,
whlcb other or future indebtedness Grantors acknOwledge to be Currently contemplated by Grantors and evidenced in any manner what-
soever, withOut limitation;
A. anY commercial loan or indehtedness;
B. any credit card or other consumer type ofloan;
C. any indebtedness relating to che.cking or savings accounts (overdrafts, fees, etc.);
D. any expenSes incurred in the protection or maintenance of the collateral securing any of such liabilities, loans, and
obligations; . .
E. any expenses. incurred in the collection of any indebtedneSs and/or obligation of the Grantors to Lendef whether aris-
ing out of this agreement or otherwise;
. F, any letters of credit and/or indebtedness arising out of, or advanced to pay, letters of credit transactions:
G. any indebtedness, however evidenced, whether by promissory note, bookkeeping entry, electronic transfer or by any
other manner or form;
H, any other indebtedness of Grantors to any financial institution affiliated with International Bancshares Corporation,
jointly and/or severally, and.iti any capacity, whether as maker, guarantor, or otherwise, now or hereafter owing and
regardless of how evidenced or arising; and
I: any and all extensions, modifications, substitutions and/or renewals of any of such indebtedness.
To the extent allowed by law, for purposes hereof it is intended that the indebtedness include all classes of indebtedness, whether evi-
denced by notes, ppen accounts, overdraft. or otherwise, and whether direct, indirect or contingerit, r'egardless of class, form or pur-
pose and including but not limited to, loam; for con.sumer, agricultura.J, business or personal purposes. The indebtedness does not
include amounts owing. pursuantto a homeste.ad.loan, homestead equity loan and/or home equity line of credit.
It being' expressly agreed and understood that.any and all sums now owed to or hereafter. advanced by Beneficiary to Grantors shall be
payable at the majn e,t 130 E. Travis, San Antonio, Bexar County, Texas 78205, and shall bear interest as may
be provided ill such notes or other evidences ofilldebtedness given by Grantors to Beneficiary; and this instrumerlt is also executed for
the purpose. of securing and nforcing the of any extension and/or modification of any note or of any part of the said
indebtedneasof Grantors and including any fuith(:r lmms and advancements made by Beneficiary. to Grantors. Repayment of all indebtv
edness of Grantors. to Beneficiary sh!ill not this Dee.d Of Trust unless the same be so released by Beneficiary at the request
of Grantors; but othe.r:wise it shall remain in full force and effect to secure all future advances and indebtedness, regardless of. any addi.
tiona! security that may be taken as .to .any past or future indebtedness, and shall be unaffected by any renewals, exten.sions or partial
teleases hereunder,
GRANTORS WILL NEITHER CREATE NOR PERMIT ANY JUNIOR OR SUBSEQUENT LIEN OR ENCUMBRANCE AGAINST
THE PROPERTY WITHOUT PRlOR WRITIEN CONSENT BENEFICIARY
Anplicable to Prior I iens If this Deed is or becomes subordinate to any other liens, security interests, assignments of leases
or rents or any othei- encumbranCes (collectively, the 'Prior: Liens'') affecting any'ofthe Property. all documents creating the Prior Liens
and evidencing and governing the indebtedness Secured shall be collectively called the 'Prior Lien Documents" and this section shall
Page 5 of 13
apply. Grantors shall not enter in' .: .. l'f modification. increase; .. :efmancing of any of the Prior Lien Documents
or the indebtedness secured thereby 'without prior written consent of Beneficiary. Grantors shall pay when due .all indebtedness evi-
denced and secured by the Prior Lien.Documents and shall timely perfonn all other obligations of the under thf: Prior Lien
Documents. Beneficiary may, !;lut shall no_t be to, pay .any such indebtedness or perform any such obligations for the account
of 'Grantors and any sum so expended shall be secured hereby. Grantors pay to Beneficiary all amounts so expended by
Beneficiary interest on such amounts from the date and at the rate set forth in" the Note,lfut not in excess of the highest rate per-
mitted by applicable law. Beneficiary's cure of any default under any of the Pricir.Lien Documents shall not constitute a cure of the
default under this Deed OfTl}l.st. Grantors shall send to Beneficiary a. copy of notice of default orn.otice of acceleration or other
notice received by Grantors from the holder of any of the Prior Lien Documentswithin one (1) busineSs day after receipt thereof by
Grantors. Notwithstanding the foregoing, Beneficiary does not consent to any PriPr Lien unless otbenVise expressly pen;nitted in this
Deed Of Trust.
Secnritv Agreement/Financing Statement This Deed OfTrust lien shall cover all p'roperty now or hereafte;affixed or or incor-
porated into the Property, described herein and now or hereafter owned by Giantors in which Grantors nOw or hereafter hive .an
est which, to the fullest extent pemUtted. by law, shall be deemed fixtures and parr .of the Property. In add!.tion, this Deed Of Trust lien
shall cover, and Grantors to the extent of any present or hereafter created riihts Of Grantors in such Property hereby grant to
Beneficiary, a security interest in (i) all building materials, fixtures, equipment and other personal property, to be incorporated into any
improvements constructed on the premises; (ii) all goods, materials, supplies, fixtures, equipment, machinery, furniture and furnishings
and other personal property which ate now or may hereafte1 be appropriated for use on (whether such items are stored on the premis-
es or elsewhere), located on or used in connection with the premises; (Hi) all rents, issues and profits, proceeds, profits, renewals,
income or other benefit derived froql. the payments received for lodging from interests and/or materials, and all inventory, accounts,
accounts receivable, contract rights, general intangibles, intellectual prOperty, chattel paper, instruments, docwnents, pennits, plans,
specifications, drawings, governmental approvals, notes, drafts, letters of credit, indebtedness arising from and/or to pay an advance
on letters of credit, accounts due from credit, debit and/or charge card companies, insurance policies, insurance condemnation awards
.and proceeds, trade trademarkS and service marks arising from or related to the premises and any business conducted ori the
premises by Grantors; and (iv) all replacements and substitutions for or additions to, all products and proceeds of, and all books, records
and files relating to any of the foregoing. To the extent any property covered by this Deed Of Trust lien consists of rights in action or
personal property covered by the Texas Business And Commerce Code, this Deed Of Trust lien constitutes a security agreement and is
intended to create a security interest in such property in favor of Beneficiary. ThiS Deed Of Trust shall be self-operative with respect
to such property, and in the event of default and! or acceleration of. the indebtePness hereby secured, Grantors expressly grant to
Beneficiary the right to enter upon the Property where the collateral is located for the purpose of enforcing its right to such collateral,
and Grantors agree to execute and deliver, on demand, such security agreements, financing statements and other instruments as
Beneficiary may request in order to impose the lien hereof made more specifically. upon any of such property. If the lien of this Deed
OfTntst on any property shall be subject to prior security agreement c.overing such property, then in the event of any de'fault hereun-
der, all the rights, title and interest of Grantors in and to any and all deposits made in connection with the transaction whereby such
prior security agreement was made are hereby presently assigned to Beneficiary, together with the benefit of any payments now or here-
after made in connection with such transaction.
Financing Stateinents. In addition to Beneficiary's other rights set forth in this Deed Of Trust, Beneficiary shall have all rights of a
secured party under the T.'Xas Business And .Commerce Code (the "Code"). At Beneficiary's request, Grantors shall execute alld deliv-
er to Beneficiary all financing statements that may be required by Beneficiary to establish and maintain the validity and priority of
Beneficiary's security interest, and Grantors shall bear all costs thereof, including all searches reasonably requ.ired by Beneficiary. If
Beneficiary should dispose of any of the property covered by the security interest created under this Deed Of Trust pursuant to the
Code, ten (1 0) days written by Beneficiary to Grantors shall be deeined to reasonable notice; provided however, Beneficiary
rpay dispose of such property in accordance with the foreclosure pmcedures of this peed Of TrUst in lieu of proceeding undex: the Code.
(i)
(ii)
(lii)
(iv)
Grantors hereby authorize Beneficiary to flle a Financing Statement, an Amended Financing Statement and a Continuation
Financing Statement (collectively referred to as the "Financing Statement!') desc_ribing the Collateral.
Grantors hereby authorize Beneficiary to file a Financing Statement deseri.bing any agricultural liens or other stanttory liens
held by Beneficiary,
Grantors shall receive prior to the Closing an. official report from the Secretary of State of each Collateral State, the Chief
Executive Office State, and the Debtor State (each as defined below) (the "SOS Reports") indicating that Beneficiary's secu-
rity interest is prior to all other security interests or other interests reflected in the report.
Beneficiary shall receive at any time following the Closing an SOS Report indicating that Beneficiary's security interest is
prior to all other security interests or other interests reflected in the report.
Beneficiary may lease, or otherwise dispose of any of the personal property in accord with the rights, remedies, and duties of a
Beneficiary under Chapters 2 and 9 of the Texas.BusinessAnd Conunerce Code after giving notice as required by those chapters; unless
the Collateral thrt:atens to dedine rapidly in value, is perishable, or would typically be sold on a recognized market, Beneficiary will
give Grantors reasonable notice of any public sale of the Collateral or of a time after which it may be otherwise disposed of without
further notice to Grantors; in this event, notice will be deemed reasonable if it is mailed, postage prepaid, to Grantors at the address
specified.in this agreement at least ten days befbre any public sale or ten days before the time when the Collateial may be otherwise
disposed of without further notice to Grantors, Grantors authorize Beneficiary to disclaimor modifY any and all warranties set fonh
in Section 9.61 0( d) of the Texas BusinessAnd Commerce Code and stipulate and agree that such a disclaimer and/or modification will
not rendel' the sale conunerdally unreasonable, Beneficiatymay retain all or part Of the Collateral in full and/or partial satisfaction of
'the Indebtedness pUrsuant to section 9.620 of Texas Business And Commerce Code.
Without providing Beneficiary with at least thirty (30) days prior written notice of Grantors' intention to do so, Grantors, until the
indebtedness j.s paid in full, agree that they will not:
a. in one transaction or a series of related transactions, merge hito or consolidate with any other entity, sell all or sub-
stantially all of its assets, or in any way jeopardize its corporate existence,
b. change the state of its incorporation,
c, change its corporate name,
Page 6 of13 DOT-12103 -IBC9004 ,
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d.. change the addressandlor locatiqrl of"its ChlefExbcuth:e Office.
e. file a: ucc.J Amendment fomr, and/or
f.. file a Termination f01-rif,
Grantors shall give advance notice in writing to Beneficiary of any pioposed change in Grantors' name, identity, or structure aDd sh<i.IJ
execute and.deliver to Beneficiary, prior to or concurrently with the occurrence of any such change, all additional financing statements
that Beneficiary may require to establish and maintain the validity and priority of Beneficiary's security interest with respect to axiy of
the property described or referred to here.in.
Grantors expressly that the Property hereinabove mentioned and conveyed to the Trustee. fonns no-part of any property
owned, used or claimed by Grantors as exempted from forced sale under the Jaw .of the State of Texas as either persona! or business
homestead, and Grantors alf and every claim thereto under any such law or laws and hereby express_ly designate as their
homestead, personal and business, and i:is constituting all the property owned, or claimed by them as exempt either as personal
and/or business under such la..ys the following described property:
----'----------------- __________________ County, Texas.
(Personal And Business Homestead)
Assignments of Rents Profits etc. All of the rehts, royalties, bonuses, issUes, contracts for deed, proceeds, profits, revenue, income
and any other benefit derived from the Prope.r:tY and improvements thereto, or arising from the use or erijoyment of any portion there-
of or from any lease or agreeni.ent pertaining thereto and liquidated damages fol1owing default under such leases, and all proceeds
payable under any policy of insurance covering Joss of rents or caused by damage to any part of the Property, together with any and
all rights that Grantors may have against any with any and all rights that Grantors may have against any tenant under such ieas-
es or any subtenants or occupants of any part of the Property (hereinafter called the "Rents''), are hereby absolutely and uncondition-
ally assigned to. Beneficiary. Prior to a default in payment by Grantors of !lOY portioh of the indebtedness secured by this Deed Qf
Trust (the "Indebtedness") or breach of any covenant, repres.entation or warranty made herein by Grantors (colleCtively, an "Event of
Default"}, Grantors shall have a license to collebt and receive all as Trustee for the benefit of Beneficiary and Grantors; and
Grantors shall apply the funds so colleCted first to the payment of the Indebtedness in such manner as Beneficiary elects and thereafter
to the accouni of Grantors. The foregoing assigrunent is intended to be absolute, unconditional and presently effective. It shall never
be necessary for Beneficiary to institute. legal proceediugs any kind to enforce the tenns of this asslgrunent.
Assignment of Leases -hereby assign to Beneficiary. all existing and future teases,' including subleases thereof, and any and
all extensions, renewals, modifications, and replaCements thereof, upon any part of the Property (the "Lease$"}. Grantors hereby fur-
ther assign to Beneficiary ail guaranties of tenants' perfonnanpe under the Leases. Prior to an Event of Default, Grantors shall have
. the right, without joinder ofB_enefi.ciary, to enforce the Leases, Unless Beneficiary directs otherwise,
Warranties Concerning Leases and Rents. Grantors .represent and w<J.Irant that: (a) Grantors have good title to the Leases and Rents
hereby assigned and .authority to assign them, and no other person or entity has any right, title. or interest thereiri; (b) all existing Leases
arevaHd, unmodified and in full force and except as indicated h_ere.in, and no default exists thereunder; (c) unless otherwise pro-
vided herein, no Rents have been or will be assigned, JllOrlgaged or pledged; (d) no Rents have been or will be anticipated, waived,
released, discounted, setoff or compromised; and (e) Grantors have not received any funds or-deposits from any tenant for which cred
. it has not already been on of ac;crued Rents.
Grantor'S Covenants of Performance as to Leases. Grantors covenant to: (a) perform all of their obligations under the Le'ases and
give prompt notice to Beneficiary of any failure to do so; (b) give immediate notice to Beneficiary of any notlce Grantors received from
any tenant or subtenant 1,md"er any leases, specifying any claimed default by any party under such Leases, excluding, however, notice
of defaults under residential leases; (c) enforce .the urider the (d) defend; at Grantor's expense, any pro-
ceeding pertaining to the Leases, including, if Beneficiary so requests, any such proceeding to which Beneficiary iS a party; and (e)
neither create nor permit any encumbrance upon its interest as lessor of the Leases, except this Deed Of Trust and any other encum-
brances. permitted-by this Deed Of Trust.
Prior Approval for Action Affecting Leases GrantorsshaJI.not, without the prior written consent of Beneficiary; receive or collect
Rents more than one month in advance, encumber or assign future Rents, waive or release any -obligations of any uilder the-
Leases, cancel, tenninate or modify any of Leases, cause or permit any cancellation, tennination or surrender of any of the Leases,
or commence any proceedings for dispossession of any tenant under any of.the Leases, except upon default by the tenant. thereunder,
or permit any assigrunent of the Leases whereby a tenant is released from its obligation,
Rejection of Leases in Bankruptcv Grantors agree that no settlement for damages for tennination of any of the Leases under the
Federal Bankruptcy Code, or under any other federal, state, or local statute, shall be made without the prior written C?nsent of
'Beneficiary, and any check in payment of such damages shall be made payable to both Grantors and Beneficiary. Grantors hereby
assign any such payment to Beneficiary, to be applied to the Indebtedness as Beneficiary may elect, and agree to endorse any check
for such payment to the order of Beneficiary.
Beneficiary's Rights acceptance of this assignment shall not, prior to, upon, or after entry upon and talcing possession
of the Property by Beneficiary or any foreclosure of the lien hereuilder or conveyance of the Property herein described in lieu thereof,
be deemed to Gonstitute Beneficiary as a "mortgagee in possession", nor Beneficiary to appear in or defend any proceeding
re.lating to of the Leases or to the Propefo/, take any action hereunder, expen9 any. money, incur any expenses or perfonn any obli-
gation oi liability the Leases, or assume any obligation or liability under the Leases, or assume any obligation includil].g securi-
ty deposits. Beneficiary shall not be liable for any injury or damage to any person .or property in or about the Proper!J. Beneficiary
shall not be. obligated to satisfy, or otherwise adhere to any tenns o.f any of the Leases. or.any covenant of Gr;mtors to any
ant unless Beneficiary agrees to do so, in Writing, executed by Beneficiary, which may elect not to do so, in its sole and
absolute discretion.
Annoinhnent of Attorney-In-Fact Grantors hereby appoint Beneficiary its attorney-in-fact, coupled with an interest, empowering
Beneficiary to subordinate any Leases to thiS Deed .OfT rust.
Indemnification. Grantors hereby indemnity ilnd hold Benetlciary harmless from all liability, damage, or expense incurred by
Page 7 of 1-3 DOT-12103 -IBC9004
Beneficiary from any claims un1 .the Leases, including, without limitation, cf J by tenants for security deposits or for rerital
payments more than one (1) mOD.rh in advance and not delive.red .to All amounts hereupder,
lng reasonable attorney's fees, if paid by Beneficiary shall bear interest at maximum lawful rate and shall be payable by
Grantors immediately without demand and shall be secured hereby.
Records. Etc, Upon request by Beneficiary, Grantors shall deliver to Beneficiary executed originals of all Leases and copies of all
records relating thereto, There. shaJ-l be no merger of the leasehold estateS, created bY the Leases, with the fee estate of the Mortgaged
Property without the prior writlen consent of Beneficiary. Upon default, Grantors hereby authorize aid direct the tenants under the
Leases to pay Rents to Beneficiary upon written demand by Beneficiary, without further consep.t of Grantors, and the tenants may rely
upon any written statement delivered by Beneficiary to the tenants. Any such payment to shall constitute payment to
Grantors under the Leases.
Some of the items on the Property are. goods that are or to become fixtures related to said Property, and it is intended
that, as to those goods, this De"ed Of Trust shall be effective aS a financingstatemerit filed as a fixture filing from the date of its filing
of record in the real estate recOrds of the county in which the Property is situated .. Infonnation concerning the security interest
ed by this instrument may be obtained from Beneficiary,as secured party, at the address of Beneficiary set forth elsewhere in this Deed
Of Trust. The mailing address of the Grantors, as Debtor, is as stated herein.
Environmental Complian.ce. Grantors' use of the Property will at all times comply with all laws, statutes, ordinances, rules and
Jation$ ("Laws") of any governmental, quasigovenune.D.tal or regulatory authority wh.\ch relate to the transportation, stonige, placeR
ment, handling, treatment, discharge, generation, production, remOval or disposal (col!ecdvely, ''Treatment'') of any waste, petroleum
product (including, without limitation, gasoline and d1esel fuel), waste poly-chlorinated biphenYl, .asbestos haz!).l'dous mate-
rials, and/or any other substance, the Treatment of which is regul.ated by any laws (collectively, "Waste"), Grantors will .comply with
all Laws regarding; underground storage tanks used to hold gasoline; diesel fuel, or any other petroleum products on the Property.
To the best of Grantors' knowledge, no Waste is not located on the Property, arid neither Grantors nor, tO the best of Grantors' knowl-
edge, any other person has evef caused or permitted any Treatment of any Waste on, under or at the Property or any part thereof, and
to the best of Grantors' knowledge, no property adjoining the Property is being used, or has ever been used at anyprevious time for
the Treatment of Waste.
To the best of Grantors' knowledge, no investigation, administrative order, consent order and 3:greement, litigation or settlement, with
respect to Waste or the Treatment of Waste is proposed, threatened, anticipated or in existence with respect to the Property. The
Pr.operty is not currently on, and to Grantors' lmowledge, after diligent investiiation and inquiry, has never been on, a:D.y fed.eml or state
"Superfulld" or list.
Grantors agree to (a) give notice to Beneficiary immediately upon acquiring knowledge of any Waste on the Property with a
full description thereof; (b) promptly comply with any laws applicable to Grantors or the Propeny requiring the removal, treatment or
disposal of Such Waste and provide Beneficiary with satisfactory evidence with such compliance; and (c) provide Benefieiary within
thirty days after demand by Beneficiary with a bond, letter of credit or similar financial assurance evidencing to Beneficiary's sat
isfaction that the necessqry funds are available to pay the cost of removing, treating and disposing of such Waste and:discharging of
any assessments that may be established on the Property as a result thereof.
Any envirmllnental spill, discharge or event upon or adjacent to the Property which Beneficiary determines materially and
adversely affects the value and/or use of the Property, shall be an Event of Default under this Deed Of Trust and the Note and all other
indebtedness secured hereby.
Grantors agree to perf9rm an asbestos survey and obtain a and to a copy of said survey. Beneficiary, prior to
mencing any renovation and/or demolition of a public or commercial building; Grantors further agree tO comply with all.other state
and federal statutes and/or regUlationsregarding asbestos and asbestos removal. .
.".:_;_ ..
Site Assessments, Beneficiary (by its officers, employees and agents) at any time and from time to time, either prior to or after the : l :::
occurrence of any default, may contract for the services of any person or finn ("Site R,eviewers") to perform environmental site .assess ._.,
ments ("Site Assessments") on the Property for the purposes of detennining whether there exists on the Property any envirorunental
pondition which could reasonably be expected to result in any liability, cost or expense to the owner, occupier or operator of such
Property arising under any Laws relating to Waste Or the.Treatment of Waste. The Site Assessments may be performed at any time or
times, upon reasonable" notice, and under reasonable conditions established by Grantors which do not impede the performance of the
Site Assessments. Grantors that any Site Assessment shall be for the sole and exclusive use, benefit and reliance of Beneficiary
in assessing the value of its security interest in the Property and will not be relied on by Grantors for any purpose. The Site Reviewers
are hereby authorized to enter upon the Property for such purposes. The Site Reviewers are further authorized to perform above and
below ground testing for environmental damage or the presence of waste on the Property and such other tests on the Property as may
.be necessary to conduct the Site Assessments in the reasonable opinion of the Site Reviewers. Grantors will supply to the Site
Reviewers such historical and .operational information regarding the Property as may be reasonably requested by the Site Reviewers to
facilitate the Site "Assessments and will be available for meetings with Site Reviewers if requested. The cost ofperfonning such Site
Assessments shall be paid by Grantors upon dem.and of Beneficiary and such borne by Beneficiary not immediately
bursed by GrantorS shall be secured by this Deed ?Trust.
Indemnification. Whether or not any Site Assessments are conducted, and regardless ofw.hetber or not a default-occurs under
this Deed Of Trust or un.der the Note or under any othef indebtedness secured hereby and regardless of whether any remedies
in resp.ect of the Property ar.e exercised by Beneficiary, Grantors willdefen4,:indemnify and hold-banriless Beneficia"ry and
Trustee from any and .all liabilities (including strict liability), losses, costs or (i-ncluding,
without limitation, attorneys fees and expenses, and remedial costs); .suit cosQ of any settlemenforjudgment and claims of any
and every kind whatsoever which maynow or in the future l?efore or aftet the releas_e or foreclosure .of this Deed- Of
Trust) be paid, incurred or suffered by or asserted against Beneflci!lry or by any person or entity or gOvernmental
-ageticy for, with respect to, or as a direct or indirect result of, the-presen.ce on Qr under, or the escap,e, seepage, leakage, spillage,
discharge, emission or release from, on or affecting the Property of any any spill, or which a-rise out of ot r.esqlt from
the environmental condition of the Property or the applicability of ahy l_aws relating tQ the waste (including, wlthou:t limitation,
the Comprehensive Environmental Response, COmpensation, and Liability 1-ct, 42 U.S.C. 9601 et Jeq.,_as from time to
Page8of13 1BC9004
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ti'rile, or any federal, state or local SOCalled
Or "Superlien"-law, laW; 'ordin'ance, coue, rul,e, reiu.Iatlon,

order or decree), regardless of whether or J.lOt caused by or wi_thirt the control of Grantors, Ben_eficiary or Tiustee_. The repre:
sentations,.covenants, Warranties an inden;inificatio-n herein: contained. shall survive the release and/or judicfUily or nenjudl-..
cial forecl_osilre (or transfer i-n lieu thereof) orthe lien of this Deed Of Trust. For the pui-pose oft'Qis pa-ragr.aph and nOtwith-
standing any other proviSion contained herein to the contrary, the term <lGrantors" i-efe.r not only to the Grantors not only
to the-Grantors named herein, but also to alr'pth"er who may hereifter assume to the Note and the of this
Deed Of Trust. .
ABBITRATION.
r.
GRANTORS, BENEFICIARY AND TRUSTE:E FURTHER AGREE AS FOLLOWS:
I . CONSUMER-RELATED CLAIMS OF $75,000,00 OR LESS IN AC.TUAL DAMAGES:
(a) WITH REGARD TO ALL CONSUMER-RELATED CLAIMS OF $75,000,00 OR LESS IN ACTUAL DAMAGES,
ANY AND ALL CONTROVER.SIES OR CLAIMS ARISING OUT OF THIS CONTRACT, ITS NEGOTIATION AND/OR
THE BREACH THEREOF, SHALL BE SETTLED BY ARBITRATION ADMINISTERED BY THE AMERICAN ARBITRA-
TION ASSOCIATION UNDER ITS SUPPLEMENTAL PROCEDURES FOR RESOLUTION OF CONSUMER-RELATED
DISPUTES AND CONSUMER DUE PROCESS PROTOCOL (WHIC!l: ARE 'INCORPORATED HEREIN FOR ALL PUR-
POSES), AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY
COURT HAVING JURISDICTION THEREOF. IT IS INTENDED BY ALL PARTIES THAT THIS ARBITRATION CLAUSE
MEET AND INcLUDE ALL FAIRNESS STANDARDS AND PRINCIPLES OF THE AMERICAN ARBITRATION ASSOCI-
ATION'S CONSUMER DUE PROCESS PROTOCOL AND DUE PROCESS IN PREDISPUTE ARBITRATION,
(b) INSTEAD OF PROCEEDING IN IDITRATION, ANY PARTY HERETO MAY PURSUE ITS CLAIM IN THE
CONSUMER'S LOCAL SMALL CLAIMS COURT, IF THE CONSUMER-RELATE]} CLAIM MEETS THE SMALL
CLAIMS COURT JURISDICTIONAL LIMITS. IF THE SMALL CLAIMS COURT OPTION IS CHOSEN, THE PARTY
MUST CONTACT THE SMALL CLAIMs COURT DIRECTLY.
(c) . Tli:E PARTIES FURTHER AGREE THAT (i) NO,ARBITRATION PROCEEDING HEREUNDER SHALL BE CER-
TIFIED AS A CLASS ACTION OR PROCEED ASA CLASS ACTION, OR ON A BASIS INVOLVING CLAIMS BROUGHT
IN A PURPORTED REpRESENTATIVE CAPACITY ON BEHALF OF THE GENERAL PUBLIC, OTHER CUSTOMERS
OR POTENTIAL CUSTOMERS OR PERSi;>NS SIMILARLY SITUATED AND (ii) NO ARBITRATION PROCEEDING
HEREUNDER SHALL BE CONSOLIDATED WITH, OR JOINED IN ANY WAY WITH, ANY OTHER ARBITRATION
PROCEEDING
(d) THIS ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION, AMENDMENT, OR EXPIRATION
OF THE AGREEMENT IN WHICH THIS PROVISION IS CONTAINED, UNLESS ALL OF THE P ART!ES OTHERWISE
EXPRESSLY AGREE IN WRITING
(e) THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT EVIDENCES A TRANSACTION INVOLVING
INTERSTATE C0)11MERCE .. THE FJ>Dil:RAL ARBITRATION ACT SHALL GOVERN THE INTERPRETATION,
ENFORCEMENT, AND PROCEEDINGS.PURSUANT TO THE ARBITRATION CLAUSE OF THIS AGREEMENT.
II. CONSUMER-RELATED CLAIMS ABOVE $75,000,00 IN ACTUAL DAMAGES AND/OR COMMERCIAL
CLAIMS:
(a) ANY ARBITRATION INVOLVING CONSUMER-RELATED CLAIMS ABOVE $75,000.00 IN ACTUAL DAMAGES
AND/OR COMMERCIAL CLAIMS HEREUNDER SHALL BE BEFORE AT LEAST THREE NEUTRAL ARBITRATORS
ASSOCIATED WITH.THEAMERICAN ARBITRATION ASSOCIATION AND SELECTED IN ACCORDANCE WITH THE
COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. FAILURE OF ARBI-
TRATOR TO DISCLOSE ALL FACTS WHJCH MIGHT TO AN OBJECTIVE OBSERVER CREATE A REASONABLE
IMPRESSION OF THE ARBITRATOR'S PARTIALITY, AND/OR MATERIAL ERRORS OF LAW SHALL BE GROUNDS
[IN ADDITION TO ALL. OTHERS) FOR VACATUR OF AN AWARD RENDERED PURSUANT TO THIS AGREEMENT.
(b) THE PARTIES FURTHER AGREE THAT(!) NO ARBITRATION PROCEEDING HEREUNDER SHALL BE CER-
TIFIED AS A CLASS ACTION OR PROCEED AS A CLASS ACTION, OR ON A BASIS INVOLVING CLAIMS BROUGHT
IN A PURPORTED REPRESENTATIVE CAPACITY ON BEHALF OF THE GENERAL PUBLIC, OTHER CUSTOMERS
OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY SITUATED AND (ii) NO ARBITRATION PROCEEDING
HEREUNDER Sl!ALL BE CONSOLIDATED WITH; OR JOINED IN ANY WAY WITH, ANY OTHER ARBITRATION
PROCEEDING
(c) Tins ARBITRATION PROVISION SHALL SURVIVE AN'f'TERJYiiNATION, AMENDMENT . OR EXPIRATIPN
OF THE AGREEMENT IN WHICH THIS PROVISION IS CONTAINED, UNLESS ALL OF THE PARTIES OTHERWISE.
r
(d) THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT EVIDENCES A TRANSACTION INVOLVING
INTERSTATE coJi1MERCE. THE FEDERAL ARBITRATION ACT SHALL GOVERN THE INTERPRETATION,
ENFORCEMENT, AND PROCEEDINGS PURSUANT TO TliE ARBITRATION CLAUSE OF THIS AGREEMENT.
III. ADDITIONAL COMMERCIAL CLAIMS PROVISIONS:
(a) ANY AND ALL COMMERCIAL CONTROVERSIES BETWEEN THE PARTIES, .SHALL BE RESOLVED BY
ARBITRATION. IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULS OF THE AMERICAN ARBI-
TRATION ASSOCIATION IN EFFECT AT THE TIME OF FILING, UNLESS THE COMMERCIAL ARBITRATION
RULES CONFLICT WITH TIDS PROVISION, AND IN SUCH EVENT THE TERMS OFTIDS PROVISION SHALL CON-
TROL TO THE EXTENT OF THE CONFUCT.
Page 9 of 13 DOT-12/0J -1BC9004
(b) THE AWARD OF THJ RBITRATORS, OR A MAJORITY OFT. :.. 11, SHALL BE FINAL, AND JlinGMENT.
UPONTHEAWARDRENDERE.lfMAYBEENTEREDL"lANYCOURT;STATEORFEDERAL,HAVINGJURISDICTION.
THE ARBITRATION AWARD SHALL BE IN WRITING AND SPECIFY THE FACTUAL AND LEGAL BASIS FOR THE
AWARD. UPON THE REQUEST OF ANY PARTY, THE AWARD SHALL INCLUDE FINDINGS OF FACT AND CON-
CLUSIONS OF LAW.
(c) ARBITRABLE DISPUTES INCLUDE ANY AND ALL CONTROVERSIES OR CLAIMS BETWEEN THE PARTIES
OF WHATEVER TYPE OR MANNER, INCLUDING WITHOUT LIMITATION, ANY CLAIM ARISING OUT OF OR
RELATING TO THlS DEED OF TRUST, ALL PAST, PRESENT AND/OR FUTURE CREDIT FACILITIES AND/OR
AGREEMENTS INVOLVING THE PARTIES, ANY TRi\NSACTIONS BETWEEN OR INVOLVING THE PARTIES,
AND/OR ANY ASPECT OF ANY PAST OR PRESENT RELATIONSHIP OF THE PARTIES, WHETHER BANKING OR
OTHERWISE, SPECIFICALLY INCLUI)ING ANY ALLEGED TORT COMMITTED BY ANY PAl\TY.
. I
(d) THE PARTIES SHALL ALLOW AND PARTICIPATE IN DISCOVERY IN ACCORDANCE WITH THE FEDERAL
RULES OF CML PROCEDURE FOR A PERIOD OF ONE HUNDRED TWENTY (120) DAYSAFTER THE FILING OF
THE ORIG!NAL'RESPONSIVE PLEADING. DISCOVERY MAY CONTINiJE THEREAFTER J\'s AGREED BY THE PAR-
TIES OR AS ALLOWED BY THE ARBITRATORS. UNRESOLVED DtSCOVERY DISPUTES SHALL BE BROUGHT TO
THE ATTENTION .oF THE ARBITRATORS BY WRITTEN MOTION FOR PROPERDISPOsilni>N, INCLUDING RUL-
ING ON ANY ASSERTE,D OBJECTIONS, PRIVILEGES, AND.PROTECTIVE ORDER REQpESTS AND AWARDING
REASONABLE. ATTORNEY'S FEES TO THE PREVAILING PARTY.
(e) IN Tl!E EVEN; THE AGGREGATE QF AFFIRMATIVE CLAIMS EXCEED
EXCLUSIVE OF INTEREST AND ATTORNEY'S FEES, OR.UPON THE WRITTEN REQUEST OF ANY PARTY, (1)
P.RJOR TO THE DISSEMINATION OF A 'LIST OF POTENTIAL ARBITRATORS, THE AMERICAN ARBITRATION
ASSOCIATION SHALL CONDUCT AN IN PERSON ADMINISTRATIVE CONFERENCE wiTH THE PARTIES AND
THEIR ATTORNEYS FOR .THE FOLLOWING PURPOSES AND FOR SUCH ADDITIONAL PURPOSES AS THE PAR
TIES OR THE AMERICAN ARBITRATION ASSOCIATION MAY DEEM APPROPRiATE, (A)'T.O OBTAIN ADDITION-
AL INFORMATION ABOUT THE NATURE AND MAGNITUDE. OF THE DISPUTE AND THE ANTICIPATED LENGTH
OF HEA.RJNGS AND SCHEDULING; (B) TO DISCUSS THE VIEW OF THE PARTIES ABOUT ANY TECHNICAL
AND/OR OTHER SPECIAL QUALIFICATIONS OF THE ARBITRATORS; AND (C) TO CONSIDER, WHETHER MEDI
ATION 9R OTHER METHODS OF DISPUTE RESOLUTION MIGHT BE APPROPRIATE, AND (2) AS PROMPTLY AS
PRACTICABLE AFTER THE SELECTION OF THE ARBITRATORS, A PRELIMINARY HEA.RJNG SHALL BE HELD
A,MONG THE PARTIES, THEIR ATTORNEYS AND THE ARBITRATORs. WITH THE AGREEMENT OF THE ARBI-
TRATORS AND THE PARTIES, THE PRELIMINARY HEARING MAY BE CONDUCTED BY TELEPHONE CONFER
ENCE CALL RATHER THAN IN PERSON. AT THE PRELIMINARY HEARING THE MATTERS THAT MAY BE CON-
SIDERED SHALL INCLUDE, WITHOUT LIMITATION, A PREHEARJNG SCHEDULING ORDER ADDRESSING (A)
EACH PARTY'S DUTY TO SUBMIT A DETAILED STATEMENT OF CLAIMS, DAMAGES AND/OR DEFENSES, A
STATEMENT OF THE ISSUES ASSERTED BY EACH PARTY AND ANY LEGAL AUTHORITIES THE PARTIES' MAY
WISH TO B.RJNG TO THE ATTENTION OF THE ARBITRATORS; (B) REsPONSES AND/OR REPLIES TO THE PLEAD
INGS FILED IN COMPLIANCE WITH SUBPART l(A); (C) STIPULATIONS REGARDING ANY UNCONTESTED
FACTS; (D) EXCHANGE AND PREMARKING OF ALL DOCUMENTS. WHICH EACH PARTY BELIEVES MAY BE
OFFERED AT THE FINAL ARBITRATION HEARING; (E) THE IDENTIFICATION AND AVAILABILITY OF wiTNESS-
ES, INCLUDING EXPERTS, AND SUCH ADDITIONAL MATTERS REGA:RDING WITNESSEs INCLUDING THEffi
BIOGRAPHIES AND A SHORT SUMMARY OF THEIR EXPECTED TESTIMONY, (F) WHETHER A STENOGRAPHlC
OR OTHER OFFICIAL RECORD OF THE PROCEEDINGS SIIALL BE MAINTAINED; AND (G) THE POSSIBILITY OF
UTILIZING MEDIATION OR OTHER ALTERNATIVE METHODS OF DISPUTE RESOLUTION.
(f) FOR PURPOSES OF THIS PROVISION, "THE PARTIES" MEANS GRANTORS, BENEFICIARY AND
TRUSTEE, AND EACH AND ALL PERSONS AND ENTITIES SIGNING THIS AGREEMENT OR ANY OTHER AGREE-
MENTS BETWEEN OR AMONG ANY OF THE PARTIES AS PART OF THIS TRANSACTION. "THE PARTIES" SHALL
ALSO INCLUDE INDIVID'QAL PARTNERS, AFFILIATES, OFFICERS; DIRECTORS, EMPLOYEES, AGENTS AND/OR
REPRESENTATIVES OF ANY PARTY TO SUCH DOCUMENTS, AND SHALL INCLUDE ANY OTHER OWNER AND
HOLDER OF THIS AGREEMENT. . . .
(g) THE PARTIES SHALL HAVE THE RIGHT TO INVOKE SELF HELP REMEDiES (SUCH AS SET-OFF, NOTIFI
CATION OF ACCOUNT DEBTORS, SEIZURE AND/OR FORECLOSURE OF COLLATERAL, AND NON-JUDICIAL
SALE OF PERSONAL PROPERTY AND REAL PROPERTY COLLATERAl) BEFORE, DURING OR AFTER ANY ARB!
TRATION AND/OR REQUEST ANCILLARY OR PROVISIONAL JUDIClAL REMEDIES (SUCH AS GARNISHMENT,
. ATTACHMENT, SPECIFIC PERFORMANC)i:, RECEIVER, !NJUNCTION OR RESTRAINING ORDER, AND SEQUES-
. TRATION) BEFORE OR AFTER ANY ARBITRATION. THE PARTIES NEED NOT AWAIT THE OUTCOME OF THE
ARBITRATION BEFORE USING SELF-HELP REMEDIES. USE OF SELF-HELP OR ANCILLARY AND,/OR PROVI-
SIONAL JUDICIAL REMEDIES SHALL NOT oPERATE AS A WAIVER OF EI'i'HER PARTY'S RIGHT TO COMPEL
ARBITRATION: ANY ANCILLARY OR PROVISIONAL REMEDY WHICH WOULD BE AVAILABLE FROM A COURT
AT LAW SHALL BE AVAILABLE FROM THE ARBlTRATOiJ.s. .
(h) . THE PARTIES AGREE THAT ANY ACTION REGARDING ANY CONTROVERSY BETWEEN THE PARTIES
SHALL EITHER BE BROUGHT BY ARBITRATION, AS DESCRIBED HEREIN, OR BY JUDICIAL PROCEEDINGS, BUT
SHALL NOT BE PURSUEDSIMULTANEOUSLY IN DIFFERENT OR ALTERNATIVE FORMS. A TIMELY WRITTEN
NOTICE OF INTENT TO ARBITRATE PURSUANT TO THIS AGREEMENT STAYS AND/OR ABATES ANY AND ALL
ACTION IN A TRIAL COURT, SAVE'AND EXCEPT A HEARING ON AMOTION TO COMPEL ARBITRATION AND/OR
THE ENTRY OF AN ORDER COMPELLING ARBITRATION AND STAYING AND/OR ABATING THE LITIGATION
PENDING THE FILING OF THE FINAL AWARD OF THE ARBITRATORS. ALL REASONABLE AND NECESSARY
ATTORNEY'S FEES AND ALL TRAVEL COSTS SHALL BE. AWARDD TO THE PREVAILING PARTY' ON ANY
MOTION TO COMPEL ARBITRATION AND MUST BE PAID TO SUCH PARTY WITHIN TEN (10) DAYS OF THE SIGN-
ING OF THE ORDER COMPELLING ARBITRATION. ..
(i) ANY PARTY SEEKING TO ARBITRATE SHALL SERVE A WRITTEN NOTICE OF INTENT TO ARiiiTRATE TO
Page 10 of 13 DOT-12/03 -lBC9004
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ANY AND ALL OPPOSING PARTIES WITHIN 360 DAYS AFTER DISPUTE HAS ARISEN. A DISPUTE IS DEFINED TO
HAVE ARISEN ONLY UPON RECEIPT OF' SERVICE OF Ji:miCIAL PROCESS, INCLUDING-SERVICE OF A COUN-
TERCLAIM, FAILURE TO SERVE A WRI1!TEN NOTICE OF INTENT TO ARBITRATE WJTHIN THE TiME SPECIFIED
AJ>OVE SHALL BE DEEMED A WAIVER OF THE AGGRIEVED PARTY'S RIGHT TO COMPEL ARBITRATION OF
SUCH CLAIM. THE ISSuE OF WAIVER PURSUANT TO THIS AGREEMENT IS AN ARBITRABLE DISPUTE.
GJ ACTIVE PARTICIPATION IN PENDING LffiGATION DURING THE 360 DAY NOTICE PERIOD, WHETHER
AS PLAINTIFF OR DEFENDANT, IS NOT A WAIVER OF THE RIGHT TO COMPEL ARBITRATION. ALL DISCOVERY
OBTAINED IN THE PENDING LITIGATION MAY BE USED iN ANY SUBSEQUENT ARBITRATION PROCEEDING
(k) THE PARTIES FURTHER AGREE THAT (I) NO ARBITRATION PROCEEDING HEREUNDER SHALL BE CER-
TIFIED AS A CLASS ACTiON OR PROCEED AS A CLASS ACTION, OR ON A BASIS INVOi.NING CLAIMS BROUGHT
IN A PURPORTED REPRESENTATIVE .CAPACITY ON BEHALF OF THE GENERAL PUBLIC, OTHER CUSTOMERS
OR POTENTIAL CUSTOMERS OR PERSONS SiMILARLY SITUATED AND (II) NO ARBITRATION PROCEEDING
PROCEEDING
(I) ANY ARBITRATOR SELECTED SHALL BE KNOWLEDGEABLE IN THE SUBJECT MATTER OF THE DIS-
PUTE, EACH OF THE PARTIES SHALL PAY AN EQUAL SHARE OF THE ARBITRATION COSTS, FEES; EXPENSES;
AND.OF THE ARBITRATORS' FEES, COSTS AND EXPENSES.
(m) ALL STATUTES OF LIMITATIONS WHICH WOULD OTHERWISE BE APPLICABLE SHALL APPLi TO ANY
AND ALL CLAIMS ASSERTED iN ANY.ABBITRATION PROCEEDING HEREUNDER AND THE COMMENCEMENT
OF ANY ARBITRATION PROCEEDING TOLLS SUCH STATUTES OF LIMITATIONS.
(n) IN ANY ARBITRATION PROCEEDiNG StrnJECTTO THIS PROVISION, THE ARBITRATORS, OR MAJORITY
OF THEM, ARE SPECIFICALLy' EMPOWERED TO l)ECIDE (BY DOCUMENTS ONLY, OR WITH A HEARING, AT THE
ARBITRATORS' SOLE-DISCRETION) PRE-HEARING MOTIONS WHICH ARB SUBSTANTIALLY SIMILAR TO PRE-
HEARING MOTIONS TO DISMISS AND MOTIONS FOR SUMMARY ADJUDICATION.
(o) . THIS ARBITRATION PROVISION .SHALL SURVIVE ANY TERMINATION, AMENDMENT, OR EXPIRATION
OF THE AGREEMENT IN WHICH THIS PROVISION IS CONTAINED, UNLESSALL OF THE PARTIES OTHERWISE
(p) THE PARTIES ACKNOWLEI)GE THAT THIS AGREEMENT EVIDENCES A TRANSACTION INVOLVING
INTERSTATE COMMERCE. THE FEDERAL ARBITRATION ACT SHALL GOVERN THE INTERPRETATION,
ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION CLAUSE OF THIS AGREEMENT,
(q) .THE ARBITRATORS, OR A MAJORITY OF THEM, SHALLA WARD ATTORNEY'S FEES AND COSTS TO THE
PREVAILING PARTY PURSUANT TO THE TERMS OF THIS AGREEMENT.
(r) NEITHER THE PARTIES NOR THE ARBITRATORS MAY DISCLOSE THE EXISTENCE, CONTENT, OR
. RESULTS OF ANY ARBITRATION HEREUNDER WITHOUT PRIOR WRITTEN CONSENT OF ALL PARTIES AND/OR
COURT ORDER,
() VENUE OF ANY ARBITRATION PROCEEDING HEREUNDER SHALL BE IN THE COUNTY WHERE BENEFI-
CIARY IS LOCATED,
Notwithstanding the provision above relating to conducting a foreclosure sale(s) pursuant to the provisions of this Deed Of Trust, the
Trustee shall, and is hereby directed to, comply with the provisions of Chapter 51 of the Texas Property Code (the "Property Code")
as it may be amended and in effect as of the date or dates of any foreclosure procet?dings conducted pursuant to this Deed Of Trust. In
particular, the !ocatiori and time of sale shall be held in accordance with Section 51.002 of the Property C.oUe or any amendments there-
to or re-enactment or revisions to such law .
Grantors stipulate and agree that for purposes of determining the fair market value of the. any"Portiulj\nereof}, as such
term is used in Section 51,003 of the Texas Property Code, which is sold at a non-judicii! foreclosure sale pursilant to the terms of this
Deed Of Trust (and in accordance with Section 51.002 of the Property Code), the following factors shall be used to detennine such
Property's fair market value, for such purposes: (a) the Property shall be valued "AS IS .. without any value being anticipated for any
improvements or refurbishing to be condUcted, Qr conducted, after the date of the foreclosure sale, (b) the intention of the purchaser
to the Property promptly, without any extensive holding period, (c) any re-sale shall be for cash only, without financing by the
seller, (d) all reasonable costs of closing a resale shall be deducted from the reasonable costs of closing a re-sale shall be deducted
from the estimate of fair market value, such as attorneys' fees, title policy premiums-, surveyor fees and expenses, the then prevailing
broker's or salesman co:rnmission, iinpaid ad valorem tax amounts, and (e) the application of a discoWlt to the value to be applied to
any future sales Price to arrive at its then current fair market value. Grantors further stipulate that any value given to such Property in
connection with Grantors' obtaining of the loan from Beneficiary to which this Deed Of Trust relates; or not any other time or- times,
shall not be. used and shall not be considered for guidance in dete!mining the fair market value of such Property on the date of any such
foreclosure sale.
'Leasehold Covenants If the interest of Grantors in the"Property is a leasehold interest and not a fee ownership, then the lien of this
Deed Of Trust shall be upon tl).e leasehold rights !Uld benefits of Grantors, but, in no"ev.ent shall any of the burdens ot obligations under
said leasehold be assumed by," or be of, Beneficiary <l:bsent an express writteD. instrument, executed. by Beneficiary
assuming such Obligations, whlcii ,.,Yi-q:rln the sole discretion of Beneficiary. . . . . " . .
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To the extent all or any portion of the Property, M follows:
(a) Grantors will at all times fully perfonn and comply with "all agreements, covenants, termS aDd impose4 upon or
assumed by it, as tenant Qr lessee, under a:ily and all leases affecting_ the Property (collectively, the ''J:.:ease"), of
Page ll oflJ DO'J:,t.U03. IBC9004
which GrantOrs shall deliver to BO ..iciary, and that if Grantors .shall fail to do so, :eficiary may (but shall not be '
anY action Beneficiary deems necessary or desirable !O prevent or to cure ruiy Qefault by Grantors in the performance of or compliance
with any_ of Grantor's or obligations under the' Lelise, UpQil receipt by Beneficiary frbm the landlord under tease of any
written notice of default by thereUnder, default o! any written J1otice of default. or the-nature thereof be questiohed or denied
by Grantors or by any party on on behalf of Grantors, Grantors herebY expressly grant to Benei;,ciary and agree that B_eneficjary
shall have the abso!ut-e and immediate right to enter in and upon the leased premises or any part the:reqf that Beneficiary dee_ms nec-
essary or desirable in order to or to cure any default by Grantors under the .Lease. may pay and expend such sums
of money as Beneficiary in its sole discretion deems necessary for any such purpose, and Grantors herebyagree to pay to Beneficiary,
inunediately upon demand, all. such sums so paid and expended by Beneficiary . .Nt sums .so paid and expended by Beneficiary shall
accrue interest at the rates set forth in the NOte and be added to and be secured by the lien of this Deed OfTf'!-St.
(b} Grantors will not the leasehold estate and interest hefeinabpve described, nor terminate or cancel the Lease; and it
will not; without the express written consent of Beneficiary, modify, change, supplement, alter or amend the Lease eit1\..er orally or in
Any such tenninatiotlj. cancellation, modification, change, supplement, alt.eration or amendment of the Lease without the prior
written consent the_reto by Beneficiary shall be void and of no force and effect, As further security to Benefi-Ciary, Grantors shall deposit
with Beneficiary an original of the Lease and all amendments thereto or a certified copY thereof, to be retained by Beneficiary until the
indebtedness .secured hereby is fully paid.
(c) No release or forbearance of any of Grap.tor.s' obligations-under the Lease, pursuant to the Lease or otherwise, shall release
Grantors from any of its obligations under this Dee-d Of Trust, including obligations with respect to the payment of rent as provided
for in the and the performance of all of the tenns, provisions, covenants, conditions and agreements contained in the Lease, to
be kept, perfonned and complied with by Grant?rs therein.
(d) Unless Beneficiary shal-l otherwise expressly consent.in writing, the fee title" to the property demised by the Lease and the
leasehold estate shall not merge but shall always remain seP.arate and distinct, notwithstanding the unlon of said estates either iri the
landlord or in the tenant, or in a third party by purchase or otherwise,
(e) U there shall be filed by or against Grantors a petition under the Bankruptcy Code, 11 U.S.C. 101 et seq. (the "Ban,ktuptcy
Code"), and Gl'antors, as under the Lease, determine to reject the Lease pursuant to Section 365(a) of the Bankruptcy Code,
.Grantors shall give Beneficiary not less than thirty (30) days prior notice of the date on .which Grantors .shall apply to the Bankruptcy
Court for authority to reject the Lease. Beneficiary shall have the right, but not the obligation,. to serve upon Grantors within such ten
da)' period a notice stating_that (i) Beneficiary demands that Grantors assume and.3.ssign the Lease to Section
365 of the Bankruptcy Code and (ii) covenants to cure or provide adequate assurance of all deJ'av.lts and
provide a4e'quate assurance qf.futur performance under the Lease. serves upon the
preceding sentenc;e,. GraQtprs s,h!!Jl not- seek .to reject the Lease and shall con).ply with the deman.d (i) of the
preceding sentep.ce, withiil30 days after the notice shall have been giVen subject to the
provided for in -clause (ii) of the preceding sentence. Further
1
effective Upon the entry of an order for
Chapter 7 of the Bankruptcy Code, Grantors hereby assign and transfer to Beneficiarya non-exdu.sive tJ:?,J.'ffe
Court under Subsection 3-65(d)(1) of the Bankruptcy Code for an or.der extending the period during
or assumed. ..
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NO ORAf,
THIS WRITTEN AGREEMENT REPRESENTS TirE FJNAL AGREEMENT BETWEEN TliE PARTIES Al$0 MAY Nt;)T
BE COt\'lRADTCTED BY EVIDENCE OF PRIOR. CONTEMPORANEOUS. OR SUBSEOUENT ORAL AGREEMENT OF
THE PARTIES. .
THERE ARE NO UNWRJTTEN ORAL AGREEMENTS BETWEEN THE P'}'R'I'IES.
Dated_ this -=c-:::::-':====::--:-:::::-------- day of :: . .AERIL ..
STACI PROPERTIES, LTD.,
GRANTOR a Texas limited partnership GRANTOR:
By: STA Management, LLC,
Texas limitea liaoility company,
e e 1 Partner
zooi_.
Address Address
STATE OF TEXAS
COUNTY OF ;;j(_ft S

(Acknowledgment) .
Notary Public,
My Commission e;<.pires::_
Page 12 of13 DOT;l2/03 lBC9004 ,
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STATE OF T);XAS
COUNTY OF ___ _

(AcknOwledgment)
This instrument was acknowl'edged before me on ---------------------------
by __________________
STATE OF TEXAS
COUNTY OF TiiRJS

Notary Public, of Texas
My commission expires: ________________ _
(Partnership Acknowledgment)
This instrument was acknowledged before me on April. 2007 ; by Walter Scott Jensen. Member of
STA Management. LLC, a Texas limited liability company. General partner(s) on behalf of
Stati Properties. Ltd.,' a Texas limited partnershin. on behalf qf said, partnership.
STATE OF TEXAS
COUNTY OF------

'

(Corporation'Acknowledgment)
This was acknowledged before me
by

corporation, on behalf of said corporation,
Notary Public, State of Texas
My commission _expires:: ________________ _
After recording, return to Beneficiary, at its mailing address, as follow:
AFTER RECORDING, PLEASE RETURN TO:
Credit Department
130 E. Travis
Page 13 ofl"J
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ADDENDUM TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FINANCING STATEMENT
(STACI PROPERTIES, LTD.)
This conveyance, however, is made in TRUST to secure payment of: (i) that certain Real Estate Lien
Note of even date herewith, in the principal sum of One Million Five Hundred Thousand and 001100
Dollars ($1 ,500,000.00); (ii) that certain Real Estate Lien Note of even date herewith, in the principal
sum of One Million and 00/100 Dollars ($1,000,000.00) (collectively, the "Note"), executed by the
makers of said Note, Delta Produce, L.P ., a Texas limited partnership who together with the above
named Grantors, shall hereinafter collectively and interchangeably be referred to as Grantors and
payable to the order of International Bank of Commerce, hereinafter referred to Beneficiary, in the
City of San Antonio, Bexar County, Texas and payable as therein provided, including late charges;
bearing interest as therein stipulated, providing for acceleration of maturity and for-reasonable and
necessary attorney's fees .
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EXHIBIT "A"
TRACT 1:
5 . .779 acres of land s.i"tuatedi.n the City of San AntOnio, Bexar County, Texas,
being Lot 4, LOt 5, Lot 6, Lot 7, Block 39, NCB 3698, Edgewood Addition,
unrecorded Plat filed in Bexar County Tax Office Bexar County,
Texas, and a portion of Lot 53, Block 39, NCB 3698, Las Vii !as De Merida as
recorded in Vo I ume 9555, Page 72, Deed and P! at Records of Bexar County,
Texas; said 5.779 acre tract of !and being more particularly described by
metes and bounds as follows:
BEGINNING, at a found 1/2 inch iron rod on the southerly right of way 1 ine of
Merida Street, for the corner of said Lot 53, Block 39, same
being the northwesterly corner of said Lot 4;
THENCE, S 84" 22' 25" E, along the southerly right of way I ine of Merida
Stree.t, a distance of 706,56 feet to a found 1/2 inch iron rod on the
northwesterly right of way II ine of The Union Pac.ific Rai I road;
THENCE, Southwesterly, along the arc of a curve to the left having a radius
of 2865.00 feet, a central angle of 14 22' 30", an arc length of 718.80 feet
and a chord bearing: S 43" 18' 41" W . 716.91 feet, to a found 1/2 inch iron
rod;
THENCE, S 36 02' 54" W, continuing along tHe northwesterly right of way 1 ine
of The Union Pacific Railraod, a distance of 183.64 feet to a set 1/2 inch
iron rod on the northerly "right of way I ine of Ceralvo Street for the
southeasterly corner of said Lot 53;
THENCE, N 84" 10' 44" W, along the northerly right of way I ine of Ceralvo
Street, a distance of 35.88 feet to a set 1/2 inch iron rod;
THENCE, crossing said Lot 53, Block

the following courses;
N 05 34' 47" E, a distance of 90.14 feet to a set 112 inch iron rod;
s 83 46' 09" E, a distance of 10.75 feet to a set 1/2 inch iron rod;
N os 11' 51" E, a distance of 21.99 feet to a set 1/2 Inch iron rod;
N 83 48' 09" w, a distance of 13.64 feet to a set 112 inch iron rod;
N 06
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51" E, a distance of 230,44 feet to a set 1/2 inch irori rod;
N 83 48' 09" w, a distance of 23,07 feet t:o a set 112 inch Iron rod;
N 06
,.
51" E, a distance of 18.94 feet to a set 112 inch iron rod on the northerly
I ina of said Lot 53, Block 39;
THENCE, N 84" 25' 13" W, along the northerly I ine of said Lot 53, Block 39, a distance
of 120.01 feet to a found 1/2 inch Iron rod for an interior angle corner of said Lot
53, Block 39, same being the southwesterly corner of Said Lot 4.;
THENCE, N 06 14' 30" E, along the easterly line of said Lot 53, Block 39, a distance
of 36j,95 feet to the POINT OF BEGINNING of herein described tract, and
5,779 acres of land, more or less,
TRACT 2:
2.069 acres of land situated in the City of San Antonio, Bexar County, Texas, being
the East 8.31 feet of Lots 57 through 65, Block 40, NCB 3699, all of Lot 17, Block 40,
NCB 3699, Edgewood Addition, as recorded in Volume 1625, Page 317, Deed and Plat
Records of Bexnr County, Texas, all of Lot 18, Block 40, NCB 3699, H.A. Stauffer &
H. G. Deviney Subdivision as recorded in Volume 3975, Page 223, Deed and Plat Records
of Bexar County, Texas; said 2.069 acre tract of land being more particularly
described as fa I I ows:
BEGINNING, at a 1/2 inch iron rod set on the northerly right of way line of Merida
Street, said 1/2 inch iron rod being N 84" 22' 25" W, 8.31 feet from the southeast
corner of said Lot 65;
THENCE, N 06" 14' 53" E, crossing said Lots 57 through 65, Block 40, along the westerly
line of that certain tract of land conveyed to West Coast Produce Company, lnc. as
recorded in Volume 7133, Page 968, Official Public Records of Bexar County, Texas, a
distance of 364.13 feet to a 1/2 inch Iron rod set;
THENCE, S 84" 21' 53" E," along the northerly line of said Lot 57, at a distance of
feet passing the northeast corner of Lot 57, same being the northwest corner of
lot 17, at a distance of 127,92 feet passing the northeast corner of lot 17, same
being the northwest corner of said Lot 18, in alI a total distance of 247.52 feet to a
1/2 inch iron rod set for the northeast corner of said Lot 18, same being the
northwest corner of Lot 19;
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THENCE, S 06" 14' 53" W, along the common boundary 1 ine between Lot 16 and Lot 19, a
distance of 364, 09 feet ~ o a 1/2 inch iron rod set on the norther I y right of way 1 i ne
of Merida Street, for the southeast corner of said Lot 18, same being the southwest
corner of Lot 19;
THENCE, N 84" 22' 25".W, along the northerly right of way I ine of Merida Street, at a
distance of 119.60 feet passing the southwest corner of Lot 18, same being the
southeast corner of Lot 17, at a distance of 239.21 feet passing the southwest corner
of Lot 17, same being the southeast corner of Lot 65, in a I 1 a tota l distance of
247,52 feet to the POINT OF BEGINNING of herein described tract, and containing 2.069
MAY I 0 2007
12-50073-lmc Doc#45-7 Filed 01/23/12 Entered 01/23/12 13:16:08 Exhibit 7-Assignment
of Leases and Rents-Staci Properties Ltd. Pg 1 of 5
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LT1-77-20070108605-1
THE STATE OF TEXAS

COUNTY OF BEXAR
TillS ASSIGNMENT OF LEASES AND RENTS ("Assignment") dated this __ . day of
April, 2007, is executed and delivered by Staci Properties, Ltd., a Texas limited partnership,
whose address is 2001 S. Laredo Street, San Antonio, Texas 78207 (Assignor"), in favor of
International Bank of Commerce, a Texas banking association C'Lendern), whose address is 130
E. Travis, San Antonio, Texas 78205,
RECITALS:
1. Assignor is the owner of the real property described in Exhibit "A" attached hereto
and hereby made a part hereof (the
11
Land
11
) and, together with all improvements now or hereafter
constructed thereon or relating thereto (berein collectively called the "Mortgaged Premises").
2. Lender has required Assignor, and Assignor has agreed, to assign to Lender to provide
a source of future payment of the Indebtedness (as defined herein) certain rights in respect of all
present and future leases (hereinafter referred to individually as
11
Lease
11
and collectively as
11
Leases
11
)
of the Mortgaged Premises .
3. The term
11
Indebtednessn as used in this Assignment shall mean and include the
indebtedness, present and future, owing and to become owing to Lender, as follows:
a. All indebtedness now and hereafter. evidenced and to be evidenced by: (i) that
certain Real Estate Lien Note dated of even date herewith, in the original principal sum of
One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00), executed by
Delta Produce, L.P., a Texas limited partnership; and (ii) that certain Real Estate Lien
Note dated of even date herewith, in the original principal sum of One Million and No/100
Dollars ($1,000,000.00), executed by Delta Produce, L.P., a Texas limited partnership
(collectively, the "Note") and payable to the order of Lender, and bearing interest at the rate
or rates therein stated, principal and interest payable to the order of Lender on the dates
therein stated;
b. extensions, increases, modifications and reami.ngements of and
substitutions for the Note;
c. Any and all sums, together with interest accruing thereon as herein provided,
which may hereafter be advanced by Lender and/or owed to Lender under and pursuant to
the terms of this Assignment; and
d. All obligations and indebtedness of Assignor (the Note and. all such other
documents or instruments now or hereafter evidencing or securing payment or performance
of all or any part of the Note being herein collectively called the "Security Instruments") and
all modifications and amendments thereof; subject, however, to the terms, provisions and
conditions herein set forth.
AGREEMENTS AND COVENANTS:
For and in consideration of the foregoing and the snm ofTen Dollars ($1 0.00) and other good
and valuable consideration, the receipt and sufficiency of which are hereby aclmowledged, the
Assignor does hereby assign and covenant as follo:ws:
1. Assignor does hereby TRANSFER, ASSIGN and CONVEY unto Lender all of
Assignor's right, title and interest in and to all Leases, in connection with the Mortgaged Premises.
Each time Assignor enters into a Lease cov.ering any of the Mortgaged Premises, said Lease shall
automatically become subject to this Assignment without further action of either of the parties
thereto. Without limiting the effect of the prior sentence, Assignor agrees to deliver copies of all
Leases presently in force in connection with the Mortgaged Premises to Lender contemporaneously
with the execution of this Assignment and when future Leases are executed, copies thereof shall be
delivered to Lender forthwith. Each such copy shall contain a statement signed by Assignor that
such Lease is subject to this ASsignment. The assignment cOntained in this Assignment of Leases
and Rents is absolute, unconditional and presently effective.
2. Assignor will not, without the prior written consent of Lender, such consent not to
be unreasonably withheld, (i) substantially modify the terms thereof in any way, either orally or in
writing, (ii) grant any substantial concession in connection with any such Lease, either orally or in
writing, (iii) consent to the assignment of the lessee
1
s interest in any such Lease to any entity or
individual not affiliated with, or controlled by, Assignor, or (iv) reduce the term of any Lease and
any of such acts, if done without the written consent of Lender, shall be null and void.
3. In no event shall this Assignment operate to-impose any duty or obligation upon
Lender to demand, sue for or otherwise make collection of rents or other sums from time to time due
and owing by a lessee under any of the Leases.
4. This Assignment, prior to entry upon the Mortgaged Premises by Lender, shall not
operate to make Lender a mortgagee in possession nor to place responsibility for the control, care,
management or repair of the Mortgaged Premises upon Lender, nor to place responsibility on Lender
for carrying out any of the terms and conditions of the Leases, nor shall it operate to make Lender
responsible or liable for any waste committed on the property. by any lessee or other party, or for any
negligence in the management, upkeep, repair or control of the Mortgaged Premises resulting in loss
or injury or death to any lessee, licensee, employee or stranger. No liability shall be asserted or
enforced against Lender, all such liabiliiy being hereby expressly waived and released by Assignor,
and should any such action be brought against Lender by reason of this Assignment, then Assignor
agrees to reimburse Lender, immediately upon demand, for all costs, expenses and reasonable
attomeys
1
fees incurred.
5. Until receipt from Lender of notice of the occurrence of a default specified in the Security
Instruments (hereinafter called a uNotice ofDefault
11
), each lessee 1mder the Leases may pay rents
under the Leases directly to Assignor and Assignor shall have the right to receive such rents provided
that Assignor shall hold such rents as a trust fund to be applied as required by Lender and Assignor
hereby covenants so to apply such rents, before using any part of the same for any other purposes,
first, to the payment of taxes and assessments upon the Mortgaged Premises before penalty or
interest is due thereon; second, to the cost of insurance, maintenance and repairs required by the
terms of the Loan Documents; thhd; to the satisfaction of all obligations specifically set forth in the
Leases; and, fourth, to the payment of interest and principal becoming due on the Note. Upon receipt
from Lender of a Notice of Default, each lessee under the Leases is hereby authorized and directed
to pay directly to Lender all rents thereafter accruing and the receipt of rents by Lender shall be a
release of such lessee to the extent of all amo1.mts so p a i d ~ The receipt by a lessee under the Leases
of a Notice of Default shall he sufficient authorization for such lessee to malce all thture payments
of rents directly to Lender and each such lessee shall be entitled to rely on such Notice of Default
and shall have no liabiliiy to Assignor for any rents paid to Lender after receipt of such Notice of
Default. Rents so received by Lender for any period prior to foreclosure under the Security
Instruments or acceptance of a deed in lieu of such foreclosure shall be applied by Lender to the
payment (in such order as Lender shall determine) of: (a) all expenses of managing the Mortgaged
Premises, including but not limited to the salaries, fees and wages of a managing agent and such
other employees as Lender may deem necessary or desirable; all expenses of operating and
maintaining the Mortgaged Premises, including but not limited to all taxes, assessments, charges,
claims, utility costs and premiums for insurance, and the cost of all alterations, renovations, repairs
2
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or replacements; and all expenses incident to taking and retaining possession of the Mortgaged
Premises and/or collecting the rents due and payable under the Leases; and (b) the Note and other
indebtedness secured by the Security Instruments, principal, interest, attorneys' and collection fees
and other amounts, in such or4er as Lender in its sole discretiop. may determine. In no event will this
Assigrunent of Leases and Rents reduce the Indebtedness, except to the extent, if arty, that rents are
actually received by Lender and applied upon or after said receipt to the indebtedness in accordance
with the preceding sentence. Without impairing its rights hereunder, Lender may, at its option, at
any time and from time to time, release to Assignor rents so received by Lender or any part thereof.
As between Assignor and Lender, and any person claiming through or under Assignor, other than
any lessee under the Leases who has not received a Notice of Default pursuant to this Paragraph 5,
this Assigrunent ofLeases and Rents is intended to be absolute, unconditional and presently effective
and the provisions of this Paragraph 5 for notification of lessees under the "Leases upon the
occurrence of a default specified in the Security instruments are intended solely for the benefit of
each such lessee and shall never inure to the benefit of Assignor or any person claiming through or
under Assignor, other than a lessee who has not received such notice. It shall never be necessary for
Assignee to institute legal proceedings of any kind whatsoever to enforce the provisions of tbis
Paragraph 5 .
. At any time during which Assignor is receiving rents directly from lessees under the Leases
and during any time which rents are past due, Assignor shall, upon receipt of written direction from
Lender, make demand and/or sue for all rents due and payable under one or more Leases, as directed
by Lender, as it becomes due and payable. In the event Assignor fails to take such action, or at any
time during which Assignor is not receiving rents directly from lessees under the Leases, Lender
shall have the right (but shall be under no duty) to demand, collect and sue for, in its own name or
in the name of Assignor, all rents due and payable under the Leases, as it becomes due and payable,
including rents which are past due and unpaid.
6, Assignor hereby covenants and warrants to Lender that Assignor has not executed any
prior assigrunent of the Leases or rentals therefrom nor has Assignor performed any act, or executed
any other instruments which might prevent Lender from operating under any of the terms and
conditions of this Assignment, or which limit Lender in such operation.
7. None of the rights or remedies of Lender under the Note or any of the Security
Instruments or under any other instrument now or hereafter evidencing or securing payment of all
or any part of the Indebtedness shall he delayed or in anY way prejudiced by virtue of tbis
Assignment, and this Assigrunent is intended to be cumulative of and in addition to all such rights
and remedies.
8. Upon satisfaction of the Indebtedness described herein and termination of the
obligation, if any, of the Lender to make any further advances under the Note, this Assignment shall
be deemed null and void and of no further force and effect.
9. All covenants and agreements hereinabove contained on the part of either party shall
apply to and bind their, legal representatives, successors and assigns.
The absolute assignment of the rents under the Leases contained in this Assignment is in
addition to and not in lieu of, the collateral o.onveyance contained in the Security Instruments. It is
the intent of Assignor and Lender that no conflict exist between the absolute assignment contailled
in this Assignment and the collateral conveyance contained in the Security Instruments.
if and to the extent a conflict is perceived to exist as to the rents under the Leases, such conflict shall
be resolved in favor of the absolute assigrunent contained in this Assigrunent.
EXECUTED effective as of the date first above written .
3
"ASSIGNOR"
Staci Properties, Ltd.,
a Texas lhnited partnership
a Texas li ed liabil" ompany, General Partner
THE STATE OF TEXAS
COUNTY OF 'iBcf!S

Before me, the undersigned authority, on this day personally appeared Walter Scott Jensen,
Member of STA Management, LLC, a Texas limited liability company, General Partner of
Staci Properties, Ltd., a Texas limited partnership, known to me to be the person whose name
is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the
purposes and consideration therein expressed, in the capacity therein stated and as the act and deed
of said partnership.
Given under my hand and seal of office on this /1./lf.,.day of April, 2007.
"''"'"'".,
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After recording, return to Beneficiary,
at its mailing address, as follows:
Mr. Michael K Sohn
130 E. Travis
San Antonio, Texas '78205
4
Christine M Lopez
My Commission Expires
November 10, 2007
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EXIllBIT "A;'
TRACT 1:
5.779 acres land situated in the City or San Antonio, Bexar County, Texas,
being Lot 4, Lot 5, Lot 6, Lot 7; Block 39, NCB 3698, Edgewood Addition,
unrecorded Plat filed in Bexar County Tax Assessors Bexar County,
Texas, and a portion Lot 53, Block 39, NCB 3698, Las Vi I las De Merida as
recorded In Volume 9555, Page 72, Deed and Plat Records Bexar County,
Texas; said 5.779 acre tract of land being more particularly described by
metes and bounds as fo I I ows:
BEGINNING, at a found 1/2 inch Iron rod on the southerly right or line or
Merida Street, for the northeasterly corner of said Lot 53, Block 39, same
THENCE, S 84., 22' 25" E, along the southerly right of way I ine of" Merida
Street, a distance of 706,56 feet to a found 1/2 inch iron rod on the
northwesterly of" way II ine of The Union Pacific Rai I road;
of 2865.00 "Feet, a central angle of 14" 22' 30", an arc length of 718,80 f"eet
and a chord bearing: S 43" 18' 41" W, 716,91 f"eet, to a found 1/2 inch iron
rod;
THENCE, S 36" 02' 54" W, continuing along the northwf'lsterly right of" way 1 ine
of T-he Union Pacific Railraod, a distance of" 183.64 faet to a set 1/2 inch
iron rod on the northerly right of Way I ine of Ceralvo Street for the
THENCE, N 84" 10' 44" w. along northerlY right or way I ine of Cei-alvo
Street, a distance of" 35.88 "Feet to a set 1/2 inch iron rod;
THENCE, crossing said Lot 53, Block 39, the f'oliowinQ courses;
N os 34' 47" E, a distance or 90.14 f'eet to a set 1/2 inch iron rod;
s 83" 48' 09" E, a distance oF 10.75 "Feet to a set 1/2 inch iron rod;
N os
,.
51" E. a distance oF 21.99 f'eet to a set 1/2 inch iron rod;
N 83" 48' 09" w. a distance oF 13.64 f'eet to a set 1/2 inch iron rod;
N 06"
,.
51" E, a distance oF 230.44 "Feet to

set 1/2 inch iron rod;
N 83" 48' 09" w. a distance oF 23.07 "feet to a set 1/2 inch iron rod;
N os
,.
51" E. a distance of" 18.94 f'eet to a set 1/2 inch iron rod on the norther 1 y
I ine of" said Lot 53, Block 39;
THENCE, N 84" 25' 13" W, along the northerly I ine of" said Lot 53, Block 39, a distance
of' 120,01 f"eet to a found 1/2 inch Iron rod for an interior angle corner of" said lot
53, Block 39, same being the southwesterly corner of said lot 4;
THENCE. N 14' 30" E, along the easterly I lne o"F said lot 53, Block 39, a distance
oF 353,95 feet to the POINT OF BEGINNING of" herein described tract, and containing
5.779 acres of land, more or less.
TRACT 2:
2.069 acres of" land situated in the City or San Antonio, Bexar County, Texas, being
the East 8,31 feet of lots 57 through 65, Block 40, NCB 3699, alI of lot 17, Block 40,
NCB 3699, Edgewood Addition, as recorded in Volume 1625, Page 317, Deed and Plat
Records of Bexar County, Texas, and afl of lot 18, Block 40, NCB 3699, H.A. Stauffer &
H,G, Deviney Subdivision as recorded in Volume 3975, Page 223, Deed and Plat Records
Bexar County, Texas; said 2.069 acre tract land being more particularly
described as Follows:
BEGINNING, at a 1/2 inch iron rod set on the northerly right of way I ine of Merida
Street, said 1/2 inch Iron rod being N 84B 22' 25" W, 8.31 f"eet From the southeast
THENCE, N 06 14' 53" E, crossing said Lots 57 through 65, Block 40, along the westerly
line of" that certain tract land conveyed to West Coast Produce Company, inc. as
recorded In Volume 7133, Page 968, Of"f'iciaJ Pub/ lc Records Bexar County, Texas, a
distance of 364.13 Feet to a 1/2 inch Iron rod set;
THENCE, S 21' 53" E, along the northerly I ine said Lot 57, at a distance of'
8.31 passing the northeast corner lot 57, same being the northwest corner of"
lot 17, at a distance of 127.92 "Feet passing the northeast corner of' lot 17, same
being the northwest corner of" said lot 18, in alI a total distance of 247,52 feet to a
1/2 inch iron rod set for the northeast corner of" said lot 18, same being the
THENCE, S 06" 14' 53" W, along the common boundary I ine between lot 18 and lot 19, a
distance 364.09 Feet to a 1/2 inch iron rod set on the northerly right of way line
oF Merida Street, for the southeast corner of said Lot 18, same being the southwest
corner of Lot 19;
THENCE, N 84" 22' 25" W, along the northerly right of way I ine of Merida Street, at.a
distance of" 119.60 passing the southwest corner of Lot 18, same being the
southeast corner of lot 17, at a distance of" 239,21 feet passing the southwest corner
lot 17, same being the southeast corner of Lot 65, in all a total distance
247.52 feet to the POINT OF BEGINNING of" herein desCribed tract, and containing 2.069
acres oF !and, more or less.
20070106605 Fees: $32.00
06/10/2007 Pages 5
Filed & Recorded ln the Official Public
Records of BEXAR COUNTY
GERRY RICKHOFF COUNTY CLERK
MAY 1 0 ZOO?

QOUNlYCLINI DliXAR COUNTY, TEXAS
12-50073-lmc Doc#45-8 Filed 01/23/12 Entered 01/23/12 13:16:08 Exhibit 8-2 000
000.00 Promissory Note-Staci Produce Ltd. Pg 1 of 7
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".
. PROMISSORY NOTE
. Borrower . STACI .PRO.D0CE, .LTD .
.
. '
Amount $ 2 000 000.00
2. ' 2005
v.alue the". receipt. of which :is t)erBby th6. severally,
{hereinafter, Borrower''-, whether one or more) promise to pay to the order of . .
{hereinafter, "Lender"}, at 130 TiaVis, San Antonio, Bexar County Texas the sum of
Two Million and No/100 . . . . . . '
on t/le outstam;hng pnnc1pal balancefrom da of s.uch.prlrw!pal until paid.
($ '_. ooo .opg . . )," .an?i liwf I the of with interest a$ it
. The. interest "shall be. floating at ?s . ove York ( "Priine Rate;, j
(CJescribeCl.below) aS it f.lud:uateS from time._to provided, however, that in no evE!nt
shall the rate of interest {plus s"aid amount in excess th!3reof, if anv} to be paid on
the unpaid principal of this Note. be less than XXXXXXXXXXXXXXXXXXXXXXXX .4. 75% per
nor more than the rnaxinlUm le"gal rate. allowed. by applicable. .The interest
rcite on thls Note sh.3.11 be 5. 75% .pet annum. rate of interest due hereunder sj1all b6
recomputed as .. of the date. of any chapge" J..n the P:drne Rate.
New Yoi:"k Pr-ime Rate shall rnecin "th..e annual .lending rate of iriterest announced from
time to time by JP Morgan Chase & Co., New York, Ne:w York, .as. its prime rate. ;rf the
New York Pr"irne Rate has been se-lected as .the Prime Rate and. . thereafter
1
prime rate
is nbt announced by JP Mcrgan Chase & Co., NEiw .York, New York, then the Interriational Bank
Of Commerce Prime Rate, minus .one percent (1%) shall. the.Prirne _Rate.
EXHIBIT
18
. . . .
t To secure payment .bf this Note, and,io allowed by iaw, all other Indebtedness which may at any time be
! _ _-:;.-:;:owing by the or any of them, Borrower hereby gr8nts to Lender a security interest and lien on the following
.. : co.llateral
.. All assets of Borrowei:-.as described On the Security Agreement executed in connection with
. j.' -: ; . this Note.
. . .
agrees take of the and to. .the. with a company. io .
for such /laz6rds, .and in such amounts as directs.. If Borrower fails to furnlsh Lender with proof of required
cove Lender shall have the authority to purchase insurance (10cluding single interest tnsura.nce, which maY
:'proVide protection only for Lender) .and add the premium for such insurance; with at the
contract rate, to th.e balance of this Note .
. The interest is calCulated on a 360-day factor apP!ied.on a 365.:day year, or a 366-day year,_ in the event tryat the year Is
a lea_p year, on prlncip81 to the date Of each installment paid. Provided, .however; that:in the event the
;rate reaches the rnaximum rate allowed by appllcable law, said-maximum 18ga! rate shall be cOrriputedon a full calendar
year 366/365 days basis or on a 366/::;166 days basis, in the event .th"at the year Is a leap -year. The interest charged and
herein contracted for will nq.i exceed the alloweid,by lavy.
TO the extent all mS.tured will bear interest. compUted a full calendar year 3"65/366 days
bas!s or on a 366/366 days basis, in the event year is a leap year, at the highe;st legal of allowed by
.. Texas Law, unless Federal LaW allows a. higher interest" rate, in which"case, Bqrrower agrees to pay the rate allowed by
':::.Federal Law.lf appliCci.ble !aw does not seta maximurii rate for matured.unpaid amounts, then Borrower agrees
. the maximum rate for sUch amol,.lnts.shall be. eighteen percent (1 6%) .per anriUm..
o.,.-',,_- the alloWed by Under 1:his Not_e, may ;nIts (i)
:-:_::the interest on the principal -portion .of any payme11t .amount that Js not received by the payment due date to the
:. .. maximum rate allowed by law, computed on a full calendar year basis from the paym_ent due date unt.il paid, or {ii), sho.uld
.. :.,: :. any payment not Qe made within te11 (1 OJ days from the" due da-i:e, require_ Borrovxer "to pay_ a one time "late charge" par
.\. .. Ieite payment aqua! to five percent (5%) of the amount of the past due princiPal and 'Interest of such payment, with a
.. .. :.::minimum of $1 Q.OO and a maximum of $1,500.00 per" late payment .. The "late chargerr may be assessed without notice,
..... ::.\;,.and shall be Immediately dl,le and payable. . . . . .
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lSC0003-
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c.
The oLitstimding and unPaid Principa ...... this Note' and all- accri.Jec;i and unpa1.., interest are payable Immediately upon
demand, or if no demand is made,.then such sums are paYable as follows:
. . ,_.;:;. . ' . . : . .
Frequen_cy Amount of Payments . Payments are! Due Number of
Payments
See Allob.g<i attadwd'hereto and mci.de a .part hereof for all. pu_rposes.
MatUrity Date: _ __,_,-----
Each Pavrilent shall be apj,lied as of its scheduled d1,1e date .and in. orde.r of .aP,plication as the its sole
discretion iilay fr_om time to time elect.
All outstanding unpaid principal. ali accrued and unpaid .Interest, and an fees, !ate c.harges, and/or other charges incurred
in this trans6ction by, or for thS benefit of, Bprrower which remain due_and 9wln_g on the Final Maturitv. are due and
payable_ on date.
Leodes ll!dj, a( its dii>c.etion, adjast_t{ie" d!lsount of pcs[oelk payll!Ciilj ess"ttre that t!=te f6flt8iRIAg
. pay11161ils vi_ll: fully asiJostize _the pdtiCipa_l of tl.lis tJcM the St:ateel ntettlritr nit!ootlt B.Ri f3UpR;eFJt.
THIS OBLI\3kflO!o:lllAS 'fF
At any time, and from time to time, ot priOr to and/or during said sl?he"du!ed dates, Lender r:nay, in
its sole and absolute discratioil, resche , and/or accelerate, in vyhoie t;>r in part, the_ Outstanding and unpaid
prinCipal_bal8nce, and all accrue a unPaid interest all accrued _and unpaid rate. char9es under this Note. .Borrower
agrees and promises to ehder all .Principal arid all accrUed and unpaid interest 011 and ali
accrued and unpai e charges. No notice of intent to acCelerate shall be required of Lender and Borrower expressly
waives an t to notice of Lender's intetnt to accelerate. The foregoing right to makEi demand for lmm8diate payment
ate, in whole or in part, may be exercised by Lender for any reason whatsoever, .whether -or not Borrower is in
THIS OBLIGATION HAS A BALLOON PAYMENT PROVISION:
THIS LOAN IS PAYABLE IN FULL ON THE FINAL MATURITY DATE SET FORTH HEREIN IF NO PRIOR DEMAND HA.S BEEN MADE. ON
Tfi!E FINAL MATURITY DATE YOiJ MUST REPAY THE ENTIRE OUTSTANDING UNPAID PRINCIPAL BALANCE, ALL ACCRUED AND
UNPAID INTEREST, AND ALL FEES, LATE CHARGES, AND/OR OTHER CHARGES INCURRED IN THIS TRANSACTION BY, OR ON
BEHALF OF, BORROWER, WHICH REMAIN UNPAID. LENDER IS UNDER NO OBLIGATION TQ REFINANCE .THE LOAN, OR ANY
P6RTION THEREOF, AT THAT TIME. YOU WILL THEREFORE BE REQUIRE:D TO MAKE PAYMENT OUT OF OT.HER ASSETS YOU MAY
OWN, OR YOU WILL HAVE TO FlND A LENDER, WHICH MAY BE THIS LENDER, WHICH AGREES TO LEND YOU THE MONEY TO
REFINANCE. IF YOU "REFINANCE THIS LOAN AT MATURITY, YOU MAY HAVE TO PAY SOME" OR ALL OF THE CLOSING COSTS
NORMALLY ASSOCIATED WITH A NEW LOAN, EVEN IF YOU OBTAIN REFINANCING FROM THIS LENDER.
The faiiu;e of to pay any of payment{s) of any interest late charges when
the same iS due and payable, aha!! permit Lender, at its option, to accelerate the maturity, without notice to Borrower, of
all, or any portion, of the rerryBining unpaid principal bal8nce outstal)ding, ali accruad and unpai9 interest and ail accrued
and unpaid late charges of this; Note, whereupon. the same, shall be_ due and payable irTimediately.
. . ' . . . . . . . . . .
at itS flisetetiO!i,"!tiep eli stJffis ei;;iflS e,.Berreier (inelt!Eiifl ettelasSe.rs BREI!er ti81611Mi5) illlAJe6iate!y Btle
aRB !!JOy able: ti):IOA fieeFI;it;g itsalf te. ea Bei.elselj affe.eteEI BAEI/ar by season of ar!r matylia! eliis;;sefn at-ty af
8811 e "et 's {inelticiii>S BRJ eflde.rset s BIIEI/er {ll:lai=afltars) Ret .:eFtR, er f:l1 reese A af BAJ etAs( ffiaterial eAaR:e ef ee.Aelltien
wAetAer er.Ast eJessriBeei
. Borrower and the loan by Note be in. strict. comp.liance with
usury Jaws. lf at any time" any interest contracted for, chai-ged, or- received under this Note Or otherwiSe 1n connectioh
with the Loan_Would be UsurioUs under applicable Jaw, then re9ardless of the pi'ovlsl9ns of this Note or the documents
instrumerits_ or executed h1 with the Loa_n or any 8ctlon or event .(Including,
W:ittiout limitation; of principal hereunder or acceleration of.maturity by Lender) Which may occur with
respect "to this NOte or the it is .agreed _that all-sums determined to be usurious shall be lmm"ediately credited by the
Lender as a payment of princlp,al hereunder, or if this Note haS already been paid, immediatelY refunded to the Borrower.
All I_Nhich _pons;titutes interest i.Jnd.er applicable law in connectioti with. the "loan shall be amortized,
ptorated, .. .spre8d pVE=r the full per_iod of time .any indebtedriess Is owing by Bouower, to the greatest extent
rate allowed by applicable law in from tifne to time during
such period. , . : . . . .
In no 6Vent shall the provsssons of Chapter 346, o(the Texas Code .{whiCh reg_ulate"s certain revolving loan
accounts and revolving triparty accounts) apply the loan, .
IN n-iE. ANY JTEM, TERMS oR c_oNTAINEO IN THIS INSTRuMENT ARE 1N THE .LAWS
OF THE OF OR. FED,ERAL LAW, THIS INSTRUMENT SHfi,LI.:_ BE AFFECTED ONLY AS TG lTS APPliCATION TO SUCH
l"fiEM, !TEMS,'-r:ERMS" OR PROV!StqNS, AND" SHA!-L "IN ALL RESP.ECT$ REMAIN fN ,FULl-FORCE AND EFFECT. IT IS
UNDERSTOOD AND AGREED THAT IN NO EVENT AND UPON NO CONTINGENCY SHALL THE BORROWER OR ANY PARTY LIABLE
THEREON, OR THEREFORE, BE TO PAY INTEREST IN EXCESS OF THE RATE ALLOWED BY THE LAWS OF THE STATE OF
TEXAS OR LAW, IF_SUCH LAW PERMITS A GREATER RATE m: INTEREST. THE i"NTENTION OF THE PARTIES BEING To"
CONFORM STRICTLY TO !HE USURY _LAWS-A;> NOW OR HEREINAFTER CONSTRUED BY THE COURTS HAVING JURISDICTION;
..--.
THE BORRO\NER,ENDORSERS, SURETIES; -G.UARANTORS AND ALl PERSONSTO BECOME LIABLE ON THIS NOTE (THE
"OBLIGORS:) HEREBY, JOINR Y AND SEVERALLY; WAIVE .EXPR-ESSLY ALL NOTICES OF OVERDUE INSTALLMENT
PAYMENTS, .AND DEMANDS FOR PAYMENT THEREOF, NOTICES OF INTENTION TO ACCELERATE MATURITY .. -
NOTICES OF ACTUAL ACCELERATION OF MATURITY, PRESENTMENT; DEMAND EOR PAYMENT, NOTICES OF
lBC0003 OB/OS/02
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DISHONOR; PROT!;ST, OF.PROTEST, AND DIUGENCEIN HEREOF.' EACH OSLIGOR
. :CONSENTS THAT THE LENDER OR a, HOLDER OF THIS NOTI(MAY AT i...-f TIME, AND FROM TIME TO TIME
...... UPON REQUEST OF OR BY AGREEMENT WITH ANY OF THEM., RENEW THIS NOTE AND/OR.EXTEND THE DATE OF'
: :. MATURITY HEREOF OR CHANGE THE TIME OR METHOD OF PAYMENTS WITHOUT NOTICE TO ANY o'F THE OTHER
.. , .... OBLIGORS, MAKERS,. SURETIES OR. ENDORSERS WHO SHALL. REMAIN. BOUND FOR THE. PAYMENT HEREOF.
OBLIGORS WAIV!; EXPRESSLY THE LATEFILING OF ANY SUIT OR CAUSE OF ACTION HEREON, OR ANY DELAY.IN
THE HANDLING OF ANY COLLATERAL .. OBLIGORS AGREE THAT HOLDER'S ACCEPTANCE OF PARTIAl. OR
DELINQUENT PAYMENTS OR FAILURE OF HOl.DER TO EXERCISE ANY RIGHT OR REMEDY CONTAINED HEREIN OR IN
ANY .INSTRUMENT GIVEN AS SECURITY FOR THE. PAYMENI OF THIS NOTE SHALL NOT BE A WAIVER OF ANY
. OBLIGATION OF THE OBLIGORS OR.CONSTITUTE WAIVER OF ANY PRIOR OR SUBSEQUENT DEFAULT. THE HOLDER
'MAY REMEDY ANY DEFAULT WITHOUT WAIVING THE DEFAULT REMEDIED AND MAY WAIVE ANY DEFAULT
;c.: WITHOUT WAIVING ANY OTHER PRIOR OR SUBSEQUENT DEFAUl.T. . .
-. . :."To the exterlt allowed by-law, as seCurity for Note, all indebtednBss may-at anY time be owfng by.
Borrower (ahd any endorsers and/or guarantors hereOf) io Lender or other holder hereof, the Borrower {and any endorsers
gu.arantors gives to Lender or other holder hereof, a security interest, .a lien and contractual right of set-off
1n and to all of the Borrower's (and any endorsers f!.nd/or guarantQrs hereof) money, credits, accounts and/Qr other
. property now in, or at anytime hereafter coming within, the custody or control of Lenc;ier or other holder. hereof, br any
_._, .. member Bank or }:lranch Bank of International Bancshares Corporation,-whether held in a general or speci.al accownt or
. or for safekeeping or otherwise. Every suc!'l .security Interest and right of set-off may be without
;:_:]<=demand or notice to Borrow!;lr (am;! any endorsers anc,i/or hereof). No security i.nterest or .right of set-off tq
'-::>:;enforce De-deemed to havt3: by any act or conduct on. the pa"rt of Lender, or by
f!ny failure exercise su.ch right of or toenforce such s_ecurity interest, or by any delay in so Ooing. Every right of
set-off and security. interest- shall Gontinu'e in full forCe and effect Until such right of s.et-off or interest is
yvaived or by an Instrument in writing ex_ecuted by Lender. Tt}e foregoing. is in tQ and not in
l1eu of-any nghts of set-off allowe_d by law. ...- ..
In connectio.rt.with ar.Jy transaction between BotrOWer and Lender at. any time in the past, preseni or' future, tha' event
. Borrower,"individua!ly or jointly with otheis, has _granted or grants Lehdet a lien on <my real and/or personal
Borrower agrees that the lien OR s'uch rea! and/or personal property shall" also secure the of Borrower to
Lender evidenced by this Note an_d afl ext.ensions and here"of ..
. If this Note, or any part hereOf, is not paid according to Its terms, Is pl_aried in the hands of an attorney for collection, or is
::collected throl!gh Probate, Bankruptcy or other judicial or non-judicial pro_ceedings, whether matured by expiration of time
. : :or by the of the option given to the Lender to mature It, the Borrower and alf parties now or hereafter personally
.. :. .... liable hereon hereby now agree to and shall pay an additional amount equal to a reasonable and necessary attorney's fees
.: .and associated-costs for collection. Said attorney's fees and costs of collection, c;mce liquidated and paid by Lende!r or
.: oth(;}ryvise allowed by law, will bear interest at the r8te of _interest applied to. the matured and past-due principal'balance
: of this N?te as such rate may change time to .time due until repaid..
-.,, ... ,.
_:.. : . In .the event any legal action or proceeding, by arbitration or otherwise, is commenced with the enforcement of, or any
jeclaration of rights under this Note and/or any instrUment or written agreement required or delivered under or purswant
<to the terms of this. Note, and/or any controversy or claim, whether sounding in contract, tort or statute, legal or
squitable, involving in any way the financing or the transaction(s), the subject.of this or any other proposed or
3Ctual loan or extension of cr-edit, ttie prevailing party shall be entitled to recover reasonable and necessary _attorney's
fees, paralegal costs (including Bllocated costs for in-house 18gal services-), costS, expenses, expert witness fees and
::osts; other necessary disbUrsements made in" connection with any sucfr- action or proceeding.
. in Its sole discretion and without obligation on Len.Qer to do so, and pay sums on behalf and for the
Jenefit of Borrower for costs necessary for the protection and preservation of the co !lateral securing this .Note and other
::osts that may be appropriate, in Lerider's .sole .discretion, inc!uding.but not limited to insurance premiums, ad valorem
:::( :.; .:: .. :axes, and attorney's fees. Any sums which may be so paid out by Lender and all sums pajd for Insurance premiums, as
...... .:. ... . ' 3foresaid, including .the costs, expenSes and att1:i"rney'.s fees paiQ in any suit. affectlng .said property sha!l bear interest
::: ..:.-. .. , : :. 'rom the dates of such payments at the prematurity contract.rate _applied to the principal balance cif this Note and shall be
:.:-.; .Jaid by Borrower to Lender upori demand, at the same place at which this Noteis payable, and shall be deemed a part of
'" >:::::.: .... ... " !,: debt and recoverable as S!JCh in all aspects.. . . . . .
}. .:>;;.:;:.: tQ prepay;priorto all: or-anypart:of th.e -principal ofthis Nete without .. J!l.enalty ,and
:::, ::::;:;(;'<> , ,.,}(}; , nterest shall immediately cease on any amount so prepaid. All prepayments shall be applied to the last maturing
::.::;; < nstallments of principal, without InterrUpting the regular installment payments.
' . :_ :::;. . . .:{: tl.ny assumption, if permitted by Lender, by ariy- other person or pers.ons; partnership, corporation, organization or any
.;:.\';.;::;::::::- .Jther entity without"the express Written consent of Lende(, shall not release the liability of Borrower for the payment.of
... Not_e. . :: . . . . ,
... ;.: .. ::: .
. . .:.: .. .:: n event that t
1
hehheLreindafterhdescribe_d co
1
Uathf:lraNI, if any, is soldh, conyeyed
1
, ohr oLthedrwlsbe dispos
1
ed ofdWithdoLut tdhe prior
, Nntten consent a t e en er, t e matMntv o t IS ate may, at t e option o t e en er, .e acce erate an en er may
, .. : ." ..;: ::L:: ::::: demand payment of the then outstaridlng principal sum together .with all ac.crued and unpaid interest due
:' ' .r: :hereon.
: .:: {_,' !' - . . ' . . . .
: ,-'..' ...;.);; .;:: 3orrowet and Lender hereby expressly aCknowl_e_dge 'and agree that in the event of a under this Note or any
t :l.ocument executed by Borrower ln. connection with, or to secure the payment of; th1s Note (I) Lender shall not be
:( > equired to comply with SUbsection 3.05(dl of the Texas Revised Act and (2) !-ender shall not be required to
:'}Jroceed against or" exhaust the assets of Bortowr;lr .before pursuing any remedy directly against one or more of the
of Bo.rrower or .o.f such partners:.
.. _. : :, .. _ . ...;
. .. .... T .. fHE PARTIES FURTHER AGREE AS FQ.LLOWS: . . . .
.. ::-;-:a)". ANY .. ALL THE. PART;ES, EXCEPT SUCH. t;;LAIMS CONTRPVERSIES WHICH ARE
... '., ... -.. CONSUMER RELATED AND INVOLVE AN AGGRI;GATE. AMOYNT IN CONTROVERSY OF LESS THAN TEN THOUSANQ
DOLLARS {$10,000.00), SHALL BE RESOLVED BY ARBITRATION IN J:.'./?CORD!\NCE yvJTH THE COIV!MERCIAL ARBITRATION
RULES OF THE AMERICAN ARBITRATION ASSOCIATION IN EFFECT AT THE JIME OF FlUNG, UNLESS THE COMMERCIAL
ARBITRATION RULEs CONFLICT WITH THIS PROVISION, AND IN SUCH EVENT THE TERMS OF THIS PR6V!SION SHALL
'". :
.. :f: .
,.
CoNTROL TO THE exTENT OF THE CONFLIQT. NOTWIT.HSTANDING ANYTHING CONTAINED HEREIN TO THE C.ONTRARY,
SAVE AND EXCEPT SUBPARAGRAPHS (k), (m), (o), (p), AND .(s) HEREIN, Tl:IO$E CONSUMER RELATED CLAI,M$ AND
CONTROVERSIES INVOLVING AN AGGREGATE AMOUNT OF LESS THAN TEN THOUSAND DOLLARS ($10,000.00) SHALL
BE CONDt)CTED IN .ACCORDANCi:. WITH THE AMERICAN ARBITRATION ASSOCIATION RULES FOR THE RESOLUTIOf\! OF
DISPUTES OF LESS THAN TEN THOUSAND OCILLARS. ANY ARBITRATION HEREUNDER SHALL BE
BEFDFiE-AT LEAST THREE NEUTRAl ARBITRATORS ASSOCIATED WITi-1 THE AMERICAN ARBITRATION ASSOGIATION AND
" . . " IBCOOOO - !lliJIIS/{12
Page 3 cts
{c)
d)
(e)
(f)
(g)
(h)
(!)
(j)
. IN AcCoRcANCE. r_:H .THE coMMERCIAL r : es OF- THE
ASSOCIATION. f?F TO DISCLOSE ALL -.iH TO AN OBJ_ECTIVE OBSERVER
CREATE A _I_MPRESSIC?N OF THE ARBITRATOR'S. AND/OR ERROR$ OF_ lAW SHALt :: ..... . ...
BE GROUNDS [IN AODIT!Ol'J TQ ALL OTHERS} OF AN AWARD THIS .
oR A m= n1eM, SHALL AND
RENDERED MAYsE eNreREo 1_N ANv:couRT. srAre OR FEDERAL,- HAVING JURISDICTioN. tHE ARBITRATION AWARD
SHALL BE IN WRITING Af\JD. SPECIFY THE' FAcru'At .. AND lEGAL' BASES. FOR -TI:'IE A WARD. UPON THE REQUEST oF. ANY
. THE .;WA)=m sHALL ANbiNGS OF FACT AND C'ONCLUSIONs: i:>F LAW.
ARBITRABLE [)ISPUTES iNCLUog 'ANY AND ALL CONTR6vERSIES OR CLAIMS BETW.Ei:N WHATEVER
-TYPE-OR MANNER.JNClOOING WJTJ-iOU.T.LIMITATION, ANY CLAIM. ARISING OUT 01: OR'ftELATING TO THIS !"OTE, ALL
P.AST, PRESENT. ANDib.R _FUTt..iRE cR_EDIT AND/OR' AGREEMENTS .INVOLVING THE. PARTIES, ANY
TRANSACtiONS BETWEEN OR INVOLVING .THE AND/OR ANY ASPECT Of' ANY PAST OR .PRESENT
. REtATIONSHlP OF THE PARTIES, WHETHER BANKING OR OTHERWISE. SPECIFiCALLY INCLUDING ANY ALLEGI;D TORT
coMMITTED BY ANY PAR'rv .: . . . .. . . . . . . . .. . .
. , . . . ... .. . ' .
THE .PARTies. ALLOw ANo DiscoveRY IN AccoRDANCE WITH RULES oF CIVIL
PR6dEDtiRE 17QR A. PERIOD OF ONE. HUNDRED TWEf'!TY (120) PAYS AFTER THE FiliNG OF THE ORIGINAL RESPbf'liSIVE-
PLEAbiNG, DISCOVERY..MAv' CONTINUE i:Hi::Ri:AfTER AS AGREED BY' THE PARTIES OR AS ALLOWED BY-THE
ARBITRAi-ORS. uNfJESOLVED SHALL BE TO oF THE ARBITRATORS BY
wArr.TEN MOTION -FOR F!ROPER DfSPOSITION, .INCLUDING RULING ON ANY ASSERTED OBJECTIONS. PRIVILEGES, AND
PRO'f.ECi-lVE bRDER REQUESTS .A"f"ARDING ATTORNEY'S FEES THE
IN. THe eveNT THE A<iGREGATE of ALl AFFmMATIVE CL.:AIMS AssERTED' EXCE.ED $soo.Oo.o.oo. EXCLUSIVE OF
INTEREST AND ATTORNeY'S FEES, OFi.'UPON THE:vJRITIEN REQUl=ST OF ANY PARTY. (1) PRIORTQ THE
OF A UST OF POTENTiAL ARBITR,I\TORS, THE AMERICAN ARBITRATION ASSOCIATION SAALL CONDUCT AN iN PERSON

THE ANTICIP,AtED 'iENGTH OF HEARiN'Gs:ANQ. scH:EoUUNG; '(Bl TO DISCuss THE VIEW oF THI? PARTIES ABOUT ANY
TECHNICAL AND/OR oiHER SPECIAL tit.iALIFICATIONS QF THE ARBITRATORS; AND {C) -TO CO.NSIDER, WHETHER
MEDIATION OR 'OTHER METH.ODS OF DISPUTE RESOLUTION .Mij3J:IT BE APPRPPRiA"J:E.- AND-: (2) AS PROMPTLY AS
PRACTICABLE. AFTER :T.i-\(SEi...ECT!O.N AJ:IBI'fRATORS; A. PRELIMINARY SHALL HELD AI\!IONG .THE

PREUMINARY -HEARING :-THE MATTERS: THAT MAY.. BE CONSIDERED SHALL JNClUDE. WITHOUT-" LIMITATION, A
PRI;HEARIN'G" S_Cl:IEDULif\IG ;ORDER (A1 .EACH PARTY'S DUTY TO A STATEMENT 'OF
CLAIMS, DAMAGES ANO/QR DEFENSES.; A STATEMENT. OF THE- ISSUES ASSERTED BY EACH PARTY AND ANY LEGAL
AUTHORITIES THE PARTIES. MAY WrSH TO-BRING TO THE ATTENTION OF THE ARBITRATORS; (B) RESPONSES AND/OR
REP!JES TO ..THE FilED. IN COMPLIANCE' WITH . SUBPART 2!Al; (C) . STIPULAtiONS. REGARDING ANY
fACTs; OF EACH PARTY BELIEVES .MA'( BE
OFFERED AT THE '(El THE IDENTIFICATION AND AVAI!-ABILITV OF INCLUDING
EXPERTS, AND SUCH ADDITIONAL MATTERs REGARDING. WITNESSES INCLUDING THEIR BIOGRAPHiES AND A SHORT
SUMMARY. OF THEm TESTIMOI'\IY. (F) WHETI;JER A .OTHtR OFFICiAL. RECORD. OF THE
PROCEEDINGS SHALL BE MAINTAINED; AND (G) THE POSSIBIUTY OF UTILIZING MEDIATION OR OTHER ALTERNATIVE
MeTHoDs OF DtsPuTE ReSoLUTION.
oF THIS -...THE'.PAFriiES'; MEANS LENDER AND BDRftOWER. AND EAcH ALL PERSONS
AND ENTITIES SIGNING THIS. AGREEMENT OR ANY OTHER AGREEMENTS BETWEEN OR Al\ll(ir\l:G ANY. OF THE PARTIES AS
PART OF THIS TRANSACTION. "TH.E PARTIES"' SHALt AlSO INCLI.iDE INDIVIDUAL PARTNERS; .AFFILIATES, .OFFICERS,.
J:MPLOYEES. 4Np10R OF, ANY PARTY TO SUCH SHALL
. INCLUDE ANY OTHI::'R .OWNER AND HbtDER OF AGREEMENT. .
. THE PARTIES. 'H.AV.e THE .. RIGHT H'e:LP. {S.uc:H -AS .. SET-QFF, . NOTIFICATION O'F
ACCOUNT DEBTORS, SEIZURE ANO'/OR FORECLOSURE OF COLLATERAL: AND NON..JUDICIAL SALE OF PERSONAL
PRO'fJERTY AND REAL PROPERTY COi..LA.TERALf BEFORE. DURING OR AFTER ANY ARBITRATION AND/OR REQUEST
ANC1LLARY.OR PROVISIONAL JI.,IDICIAL n;E.Metm;s (SUGH ,AS ATI'ACHM.I:NT, SPECIFIC PERFORMANCE,
RECEI_VER. INJUNCTION'OR -RESTRAIN_JNG.ORPER; AND OR AffER ANY ARBI!RATION, THE
PARTIES NEED NOT AWAIT THE OUTCOME Of THE AREUTRATION BEFORE.USING SELF-HELP .REMEDIES. USE OF SELF
HELP .ofi ANCILLARY AN,D/OA. PROVISIONAL: JLiD:ICIAL REMEDIES SHALL NOT OP:ERATE .i;S.A WAIVER OF EITHER PARTY'S , ...
RIGHT TO COMPEL ARBITRATIQN. ANY ANCILLARY OR PROVISIONAL REMFDY WHICH .WOULD BE AVAILABLE FROM A
COt..iRT AT LAW SHALL BE AVAILABLE FROM THE ARBITRATORS.
THE. ANY. ANY THe SHALL EITHeR BE
: B_RdUGHT BY AHBI1RAtJbN, .AS DESCRIBED HEREIN; OR. BY Jt..iQIC;IAL PRoCEEDINGS, BUT SHALL. NOT BE PURSUED
SIMlllTANEOUSLY IN DIFFERENT OR ALTERNATIVE FORMS. A TIMELY .WRiriEN NQTJCE OF INTENT TO ARBITRATE
PURSUANT TO THIS STAYS AND/O.R ABATES ANY AND. ALL AcTION 1!\1 A iRIAL COURT. SAVE AND EXCEPT
A HEARING ON A AftBITRATION.AND/OR THE 8\ITR'( OF. AN ORDER COMPELLiNG ARBITRATION AND
STAYING .ANDfOR ABA :riNG THE LITIGATION PENDING .THE. fiLING oF THE ANAL AWARD' OF THE ARBITRATORS. ALL
REASONABLE NECESSARY AJTO.RNEY':;! FEES AND Ai.L TRAYEL COSTS. SHAlL BE AWARDED, T6 THE PREVAJUNG
PARTY ON ANY MOTIOf .TO GOMPJ:L ARBITRATION-AND MUSJ BE PAiD TO SUCH PARTY WITHIN Tl:N (10} DAYS OF THE
SIGNING OF THE ORDER COMPELLING ARBiTRATION. . .
. . . : . . . . . .
ANY A .NOTicE To ARBITRATe, .p,ND
PARTIES WITHIN 360 PAYS AFTER'DISPUTE f-!AS ARISEN. A DISPUTE-IS DEFINED TO HAVE ARISEN ONLY UPON RECEIPT
OF OF JUD:ICIAI:. SERVJc;::E OF .. .CQ.UNTERCLAIM, FAILI:-fRI TO SERVE A WRITTEN NOTICE
OF INTENT TO \.f\'ITHI!:-1. TtiE. TIME .. ABOVE BE QEEMED .A .WAIVER OF THE AGGRIEVED
PAR-TY'S RIGHT TO COIVIPEL OF CLA,M. T.iiE ISSUE OF TO THiS AGREEMENT IS
AN ARBITRABLE DISPUTE. .. ,
f\!OTICE. PLAINTIFF oR
IS NO!_A WAIV_ER OF RIG.HT G9MPEL ;ARBITRATION . ALL DISCOVERY-OBTAINED IN THE PENDING
UTJ_GATION MAY .BE ANY' _PROCEEDING. . . . . . . . .
Page 4 cfS
IBC0003 1!8105102
... ------------
.
: ... ,
.; ; J
.! ...
,.

.. AS A
. ACTION OR PROCEED _AS A Ct.. ACTION, OR ON A BASIS INVQLVU-. ...:._1 CLAIMS BROUGHT IN A pURPORTED
CAPACITY ON BEHALF GENERAL PUBLIC, OTHER .CUSTOMERS OR PQTENTIAL CUSTOMERS OR
PERSONS SIMILARLY SITUATED AND (ii) NO ARBITRATIO_N PROCEEDING HEfl:EUNDER SHALL BE CONSOLIDATED WITH, .OR
JQINED IN ANY WAY WITH, ANY OTHER ARBITRATION PFIOC,EE_DING. - .. . . .
ANY ARBITRATOR SHALL BE KNoWteoG_EABLE IN THE "SuaJec:f MATTER OF eAcH oF THE
PARTIES SHALL PAY AN EQUAL. SHARE OF THE ARBITRATJON COSTS," FEES, EXPENSES,. AND OF THE ARBITRATORS'
FEES, COSTS AND . .
ALL STATUTES OF LIMITATIONS WHICH WOULD OTHERWISE SHALLAPPLY TO ANY AND ALL CLAIMS
ASSERTED IN ANY ARBITRATION PROCEEDING. HEREUNDER. AND THE COMMENCEMENT OF ANY ARBITRATION
PROCEEDING TOLLS SUCH STATUTES OF LIMITATIONS.
. . . .
IN ANY ARBITRATION pfloceeoiNG sus.Jecr To THIS PROVISION. THE.ARBITRATORs. oR MAJORITY oF tHeM, ARE
SPECIFICALLY EMPOWERED TO DECIDE (BY DOCUMENTS ONLY, OR WITH A HEARING, AT THE ARBITRATORS' sOLE
DISCRETION) PRE-HEARING MOTIONS WHICH ARE. 'v SIMILAR TO PRE-HEARING. MOTION$ TO DISMISS
AND FOR SUMMARY .
. THIS ARBITRATION PROVISION SHALL TERMINATION . OR EXPIRATION OF THE AGREEMENT
IN WHICH THIS PROVISION IS CONTAINED, UNLESS. ALL OF THE PARTIES OTHERWISE AGREE IN WRITING.
HiE THAT A INVOLVING INTERSTAT.E
COMMERCE. THE FEDERAL ACT SHALL GOVERN THE ENFORCEMENT, AND
. r"ROCEEDING.S PUFISUANT TO THE CLAUSE OF THIS AGREEMENT .
THE oR A THeM. sHALL AWARe FEES cosTs THE PREVAILING
PARTY PURSUANT TO THE TERMS OF THIS AGREEMENT .
. NEITHER THE PARTIES NOR THE ARBITRATORS IViAY DISCLOSE THE EXISTENCE, CONTENT, DR RESULTS OF ANY
ARBITRATION HEREUNDER 'wiTHOUJ P(3.10R WRiiTEN CONSENT OF All PARTIES AND/OR COURT ORDER.
VENUE OF. .BE IN Bexar TEXAS:
Y'r,, c{,j; ; TERM LENDER IN.CLUDES ANY OTHER OWNtR AND HOLDER. OF :THIS NOT; TH.EIR RESPECTIVE SUCCESSORS AND 0
'SiSIGNS, THIS NOTE IS GOVERNED BY APPLICABLE TEXAS EXCEPTIO THE EXTENT THE USURY l,.AWS OF TEXAS ARE
::;;.::;::.:i;:.::; .,;:>I,E-IEMPTioD BY FEDERAL LAW, IN WHICH CASE, SUCH FEDERA.L LAW SHALL APPLY. VENUE OF ALL ACTIONS ON THIS NOTE,
LIE IN COUNTY, TEXAS, AND ALL OBLIGATIONS REQUIRED HEREIN ARE PERFORMABLE
TEXAS. . . . .
'(' ',;:;: .;; .' :,.,;\:'\'::,. :::.\:)( :>} f the loan proceeds to fo.r personal, fa or househ;ld the follOwing shall apply:
: :..,:.
'JOTICE TO CONSUMEris: UNDER TEXAs LAW JF.YDU TO i-HIS AGREEMENT YOU BE SUBJECT TO A FUTURE RATE
HIGH A? 24% ANNUAL,PERCENl:AGE OR THI; STATE WHICHEVER IS LESS.
. . . . . . NO bRAL AGREEMENTs . : :
DeliS WRITTEN AGREEMENT REPRESENTS THE FJNAL.AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
:y!DENCE OF PRIOR CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES
. . . . .
. fHERE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
STACI PRODUCE,
A TEXAS LIMITED PARTNERSHIP
BY: 'STA MANAGEMENT, LLC,
Sole Member
Address: 2001 South Laredo Street.
city/State: ?an Antonio, Texas 78207
P,ge.So(S
II!C0003 08/05102
ALLONGE TO PROMISSORY NOTE
This Allonge is made a part of that certain promissory note in the original principal of
TWO MILLION AND N0/1 00 DOLLARS ($2,000,000.00) ("Note") dated on even date
herewith executed by STACI PRODUCE, LTD., A TEXAS LIMITED PARTNERSHIP
. ("Borrower", whether one or more) and being due and payable to International Bank of
Commerce ("Lender").
The Note is payable as follows:
(a) The principal of the Note, together with accrued and unpaid interest on the
unpaid principal balance of the Note, shall be due and payable (i) in monthly
installments, initially in an amount equal to Twenty-Nine Thousand Two Hundred
and No/100 Dollars ($29,200.00) each, the first such installment to be due and
payable on April -..1:__, 2005, and the remaining such installments to be due and
payable on the (.1,J day of each succeeding calendar month thereafter prior to
March _L, 2010 (the "Maturity Date"). Payments shall be based on a seven
(7) year amortization schedule and shall be subject to change to reflect changes
in the interest rate as set forth in the Note.
(b) On the Maturity Date the entire unpaid principal balance of this Note and all
accrued and unpaid interest on the unpaid principal balance of this Note shall be
finally due and payable.
THIS LOAN IS PAYABLE IN FULL ON MARCH 1.- , 2010. YOU MUST REPAY
THE ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST THEN
DUE. THE BANK IS UNDER NO OBLIGATION TO REFINANCE THE LOAN. YOU
WOULD, THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER
ASSETS YOU MAY OWN, OR YOU WOULD HAVE TO FIND A LENDER, WHICH
MAY BE THE BANK YOU HAVE THIS LOAN WITH AT MATURITY. YOU MAY HAVE
TO PAY SOME OR ALL THE CLOSING COSTS NORMALLY ASSOCIATED WITH A
NEW LOAN EVEN IF YOU OBTAIN REFINANCING FROM THE SAME BANK.
Notwithstanding anything contained herein to the contrary or in any other loan
document evidencing or securing the Loan, in the event of any nonmonetary default,
Lender shall deliver to Borrower written notice of such default and Borrower shall have
thirty (30) days after receipt of said notice to cure such default before Lender may
proceed with acceleration and/or foreclosure or pursue any other remedies. If Borrower
timely cures such default, then no event of default shall be deemed to have occurred.
All notices required hereunder shall be delivered to Borrower by Certified Mail, Return
Receipt Requested, and shall be deemed delivered three (3) days after deposit with the
United States Mail by Lender, with proper postage affixed.
EXECUTED this _1::_ day of March, 2005.
BORROWER:
STACI PRODUCE, LTD.,
BY:
OMPANY
102326_l.DOC
.;(
Ji;XTEt ... -evN ANDtORMoniFicATION AGREEMENT
COMMERCIAL INDEBTEDNEsS
Date : Aprl11S,1011
Account No:
Borrower: Stacl Prod Dee. LTD.
{whe_thet one-Or mP.re),
In'terest PaiG $
Borrower-. prmnises to pily to the Ofdet of lntel'nationill Bank of
Commerce the Outstanding Principal. Balance On the . Note
accOrding"tO the terins herebr.togetherwith. iriterest as it accrueS on
the outstanding unpaid batance until" paid. In no. event
shall the rate ofiO:U:rest to be pBi:d on. the Uhphld
bahioce.be less tlian .four and three qU"arteriY,.ercent (4.75%)
per dnmim, normbre than lhema-ximum. legalrnte a1loWOO by."
appliC!lhle law.
to.tll.e-eXtent la.w. as tJ?:clate.paymeni-cba:rgeunder ihe
Agreement,_Leoaer may in SOle discretion {i} Increase
the interest. on the po:rti:o.n ofimy payment amount-that is
not received by._th"e payment rle Ui:J.til paf"to. the
rate-allowed by law, computed QIJ cai(!Ddar);ear basis. from
thepaym.eqt"duedate uptii pitid, or (iQ shou14 be:more
ten (.l O) l11te; "BOrrow.er Sbl,lll pay a one.:time "iate charge"
per iate-pa:fmeilt tJ) five perceilt-.{5%) .Qf iunountof.the
paSt-due principal and interest wifu:aminiinUm: of
$10.00 anti a maximum Q( $1,!i"OO.Ci0 per late
B"Prmwer
S.iacl Produce, LTD. ATexas
Addt.e$s
'75.0.Metida
The. "late cliargen may be_.acceSsed without notice. and shall be
immediately due and payable. .
Eaeb payment sllall applied_m;"of .its scheduled due date and
in the. order Of application as the Lender in its sote discretion
.
The= failure orBerrower.tupay any of the payment(s) of principal
or"ahy thereon or at:C<flled late ChargeS, w.hen the sanie is
and pay$le U:1;1der, -3tits option; to accelerate: the
maturliy, notice t6Borrower: of aft. or anY. portiOn, Of the
Outstal.lding unpa14 principal balance and all accrued and unpaid
and all and: unPaid late chargeli the Note I
this Agreement, whereupon the same. shall 'be payable
immediately.
,Any outstamfmg and unpilid" principal, aj:crued- arid uitpaid- interest
all a1l fees. :late chru;ies( aodfor other c:liai'ges incwTed in this.
liansacii.on by, oi fOr f}le benefit of;; B.orrower.-if any, W"bjCh remajn
. .itue and owing on the Final Maturity are. due and" payable on

TO THE. EX.f.mf ALLOWED BY LAW,: ALL" MATUR.Eb.
@p"AII). AMOUNTS WILL BEAR INTEREsT AT TH.E
MAxiMUM LEGAL INTEREst RATE ALWWED BY
.APPUCABLll "LAW, If applicable laW;
-rate of for matun:a .un}laid a"mo}l!lts, Borrower agrees
i:he mB?tim!JIII rate for such amc;>unts sbalJ Pe e.igbteen perCent
pel" annJWL
NooRAr. AGREEMENTs
tmS WRrtJjN. LOAN AGREEMENT aE:P"RESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND
NoT BE coNTRADICTED BY EVIriE.NCE oF
PRJOR. CONTEMPORANEOUS OR oRAL
AGREEMENTS QF Tii"E PARTitS. Tru;R ARE NO
UNwRt:i'TEN OliAt AGREEMENTS: nET'WEEl'f THE
PAll TIES
Bonower
Address-

Namo:: Bm' McMillan . . . . . .
San Ant{)nio,-Texas 78207
Tifil<- .Assistant VIOO P.r:eSident

/
12-50073-lmc Doc#45-9 Filed 01/23/12 Entered 01/23/12 13:16:08 Exhibit 9-Security
Agreement-Staci Produce 3.2.2005 Pg 1 of 10
'''.'
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_I .
2001 South Laredo Street 78207
SECURITY
AGREEMENT
The undersigned Debtor, Owner of Collateral. whether one or more, and Internat i gnaJ Bank _of CommerCe
130 E 'Travis san Antonio Texas 79205
{hereinaft_er called "Secured Party") enter into this SecUrity, Agreement and f6r good and valuable consideration, the receipt of which is hereby
acknowledged, and agree as follows:
SECTION !: CrOatian of Security Interest. . . . . . .
Debtor hereby grants to Slicured Party a first and eXclusive lien and sec!Jrltv Interest in ell of the petsonal property_ of Debtor, wherever located,
and now owned or hereafter acquired, including. the propeity described In Section II 'of this Securjty Agreement (the "Co!lateral"l to secure
payment and performance of the-Indebtedness (described in Sect!o!'l 1!1 beh?W), .
SECTION 11: Description of
1. The security inti:lrest is gritnted In the following Collateral: . .
a. Describe the collateral and, as applicable, check boxes and provide lnformat'1on lndlcitted below,
That describeQ on I at:tached hereto. and inade a_ .. part
hereof fC?r all
. . .
b. D The above goods are to bei:ome flxtur.eS _on:' (describe reel estate; additiOnal sheet, If
2 D The above timb'flr Is standing on: {describe real estate; attach_ additional sheet, if needed)
.3
D
The above minerals tJr the !ike (Including all and or accounts will be financed at the head or mine head of the well
or mine located on: {describe real estate; attach additional sheet, if needed)
. ., . . . . . . . . .
c. If b.1, b.2, or b-.3 above is checked,' this security Is to be f!!ed for 'record in the real estate records. (The description of the
estate must' be sufficiently specific as to give notice of a mOrtgage on the, realty),
D
E
F
D The Debtor does ndt haye an Interest of record; the name of a record owner of the real estate is
All substitutes and replacements for, 'llccessions, ati:achments; and other add!tioris to, and too.ls, pa.rts, and equipment used In
connection with, the above property; and the and the unborn yoUng Of animals end poultry,
All prOperty sirnilar to the above hereafter acquired by DebtOr.
. . .
All proceeds, products, and profits of the- Collateral are lr'lcluded. Coverage of products and proceeds for f1hancing statement
purposes !s not tO be construed as giving Oebtor.any addition'al rights with respect tO: the Collateral, and Debtor is riot to
sal!, lease, or otherwise transfer, furnish under contracts of service, manufacture, process,_ or assemble the Collateral, except in
accordiroce with the provisions of this Security Agreement. Any additional sheets descrlbhlg the Collateral, the rilal estate, or other
matters are Incorporated In and made a part of thisinstrument.
2. Classify the collateral under one Or more the foUowing T.exas BUsiness And Commerce. Code Glassifications:
D
Consumer Goods

Farm Products
llD
Equlpr:nent {business use) General intangibles
8
Equipment {farm usei
llD
lm1entory
lnvestmel'lt Property.
D
.Chattel Paper
D
Instruments
D
Rtghts
8
AcCounts
D
,Support
Deposit Accounts
D
Liens on
D
Commercial Tori Claims
D
S!Jies Of Payment lntangil;lles alid Promissory Notes
D
AQricultural Liens
Page I of 5I
Itld0004 - 06/2.2/01
4.
5.
1.
2.
A.
B.
c.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
0.
P.
lit
. . . . . :
Code lthe and not in this has the giver\ to the
this is a moriey .security interest, and Debtqr wilt use ful)ds advanced to the Collateral, or
I funds d1rect to seller of the Col!ateral, 1;1nd to purchase insura"nce on the Collateral. To the extent
to Collateral, Debtor's repaymen:t of the Loan shall apply on a "first-in-first-out"' basis so that the
used. to purchase a particular item of shall be paid in _the chronological order the Debtor the
1/s accounts, location of the .office where the records .concerning them .are kept (if other than Debtor's
Claims", a subcategory of General 'Intangibles, means the Debtor's claim for.
made to Secured PartY to secure the prompt and uriconditiona! payment of, and the first and exclusive security
secu_res the payment. and perf_ormance of, the following the
not solely of Debtorl or any of them If more than one., to Assignee, jointly and/or severally, and in any capacity;
guarantor, or otherwise, now or hereafter owing, created and/or arising, and regardless of evidenced or
or indebtedness;
other consumer type of loan;
+''"'jm.,jrelatlng to checking or savings accounts \overdrafts,.fees, etc.);
In the protection or maintenance of the collateral securing any of such loans, end obligations;
in t_he collection of any indebtedness and/or
and/or indebtedness arising out of, or advanced to pay,letters of credit transactions;
eyidenc"ed,-whether by promissory note, bookk.eeping entry. electronic transfer, che"cks, drafts or other
mannef or form;

Debtor and/or of the persons or entities set forth in subparagraph A .above to any tiriancial Institution
1i I Bancshares Corporation, jointly and/or" severally, and In any capacity, whethe"r as borrower, guarantor, or
"'"'"'''" owing, cr.eated arid/or .arising, and regardless of how evidenced or arising;
i i substitutions and/or renewals of any of the above indebtedness;
by Secured Party to obtain, preserve and enforce this SeCurity Agreemento co11ect the Indebtedness, and
the Collateral Including without limitation, all assesSments, attorneys' fees and .legal expenses, and
f:!nd the purchase by Secured Party of Accounts;
and the purchase by Secured Party of Chilttel Paper;
and by Secured Party of Payment Intangibles;
and the purchase by Secured Party of Promissory I:'Jotes; and
i that arises after the filing of a petition In bankruptcy by or against.Debtor under t.he Bankruptcy Code, even if
not because of the automatic stay under Bankruptcy Code 352 or otherwise.
hereof it is intended that the Indebtedness include all classes of whether evidenced
or otherwise, and whether Pirect, indirect or contingent, regardles.s of class, fOrm or purpose and
, loans for consumer, agricultural. business or personal purposes.
duly stamped and
or at the m.aillng address, !I any, given by and/or for Debtor at the beginning of this
as may have designated most recently In writing by Debtor to Secured Party); provfded, however,
or received, shall alwayS be effective when given or received . Except" as otherwise required by law,
shall be deemedeff-ectively.givenon the date of delivery or, if mailed, on the date such
Mail, If received b.Y Secured Party.
. . . . . '
receive to the Closing an official report from the Secretary of State of each Coii;Hera! State, the
and the Debtor State leach as defined below) (the "SOS indicat!n"g that Secured Party's.security
"''""''"''" interests or other interests refleCted in the. report. . . .
at .any time following the Closing an SOS Report !ndi.ceting that Secured Party's security interest is. prior to
or ottier"inteiests reflected in the report.
oq'"'"''" of the Collateral, except where eXpressly otherwise provided In this Security i:\greement or where Secured
security interest by. possession only, or in addition to th: filing ot a Financing Stiltement:
.IBC0004 -
Page 2 of 9
----- ------. -------
.<
.
.: . .'
.. .: .
. :,
,;: . .
.. .::-F:
.. ::.':: ...;_;.,_
.',
... Iii)' Wh'i'-'? c.ol!ateral is In the_ J third .partY, ,Debtor w!!l join_Witn Party:i .. 1otifylng the third' party of. Secured
secur1ty and obtamlng a Agreement. from the third party that it is holding the for the benefit of.Secured Party .
3, Control Debtor will cooperate wfth Party .. in obtaining a Control rn .form and

Secured Party Wltfl respect to Collateral consisting of:
. (il Deposit 'Accounts,
(ii) Investment Property;
(Ill) Letier-Of-tredlt Riglits, and
!iv) Electronic Chattel P.aper.
4, of Debtor wil_l not create Chat;el Paper Placing a legend on the Chattel Paper acceptable to Secured
Party md1catlng that Secured Party has a security Interest lh .the Chattel Paper.
SECTION Vi Oebior:i Remgseptation Warranties and Agresments
A. Gen_erid Reprellentations and Warranties
Debtor represents, warrants and agrees that: .
(1) has full power and authority to enter Into this Security Agreeme.nt; this Security Agreement has been duly authorized,
executed _and delivered by Debtor and constitutes the valid and binding obligation of Debtor enforceable in accordance with its
terms. No consent of third parties, a license, authorization or filing with governmental authority ts reqUired to be obtained or
performed .in connEic_t!on with the execution, del!very, and performance of this Security A:greement .
(2) All Information and mad? byDebtor in anyfinancial, o,' aCC!Junting statement or appllca.tion for credit
prior to, with or subsequent to the execution of this Security Agreement are and shall be true, correct,
complete, va11d, .and genvine. .
(3) Debtor owns, or will use thi:l proCeeds of any loans by Secured Party to becoine the of the Collateral free from any set-off,
clalm,,restrfctioh, lien, security interest or except this. seCurity Interest arid lletls for taxes not yet due .
. (4) No FinanCing Statement the or Its proceeds. is file: in. public 'office and :Deblor not any
Financing Statement any of Debtor's or the proceeds thereof'to hereafter be on file h'l any public office except as
may be fi!e.d pursuant to this security Agreement. .
. . - . . .
(5) DebtO{ provide to Party; upon Sf!cUred Party's request, .(1) flnanclallnformatlon, Including no.t limited to a balance
sheet; lncorr\e statement, statement of cash flow, and such other financial information aS. may be requested by Secured Party; (ill
en appraisal of the CoU.ateral; {iii} tax (lv) evidence of Insurance, and (v} any other information requii-ed by Secured Party in
com1ection with the Indebtedness or' the C011ateral.
. . .. . . .
-/6) Debtor will not use t!ie Collateral or permit the Collateral to be. usEid In violiitlon of any. statute, ordln<)nce br other law or
lncor'!siste('ltly with th6 terms of any P?!lcy of' Insurance thereon; and Debtor will. permit secured PartY and it; agents,
representatives, arid.emptoVeas to e'xainlne the Co118tel'al at. all rea.somible times, and for such purpose,. Secured Party may enter
upon or Into any pre'rnises where the collateral rriay be located without. being guiltY' of, and/or held llab!tl for, trespass. Debtor _will
furnish to Party upon reques: all pertinent regardlnQ the Collateral.
17) Th11- Collateral remain In Debtor's possession or control' at all times at Debtor's rlsk of loss unless Secured Party has takori
possession of .the CCillateral, and be kept at Debtor's address set forth above where Secured Party may Inspect it at any time,
except for Its temporary rerT}oVal in connection with its ordinary' use or unless Debtor not!fles Secured Party h1 writing and Secl}red
Party consents In writing in advance of Its removal to another loc.ation;
181 Debtor shall pay prior to delinquency aU taxes, charges, !lens and asse.ssments' against the Collateral, and upon Debtor's failure to
do so, Secured Party at its option, may pay any of them. and shall be the sole juqge of the legalitY or validity thereof and the
ai:nount neCessary to discharge the same. Such payment shall becoJTle part Of the lndebtildness secured by this Security Agreement
and sha11 be paid to Securild Party by Debtor Immediately and without deniand, with .interest thereon at the maximum rate allowed
by applicable law.
/9) Hazard insurance must be furnished at an times for the full amount 'at the Indebtedness with respect to all Collateral {including
coverage for all and equipment) against risks of Fire, Windstorm, Hurricane (If the Collateral Is written 100 tni!es of the
Gulf Coast), Hall and Collapse {including cost of debris-removal) and such other riskS as Secured Party may recjulre, Including
standard extended coverage. Such Insurance Policies Shall contalri such termS, be In a form, for a period and be written by
companies satisfactory to Secured Party. insurance is also required In those geogra.phic areas that ar'e subject to such
loss. The policy sha!r also contain a standard moitgagee's endorsement providing for payment of any loss to Secured Party. All
pol!c!es Ot insurance shall provide fcit tim days written minimum cancellation nOtice to Secured Party.
. . . . . . .
Evidence of coverage must be a copy of the original and loss payab1Ei clause. Certificates or !litters of coverage will not be
accepted.
Secured Party Is authorized to act as attorf'leyln-fact for Debtor In obta1nlilg, adjusting, settling, and canceling such Insurance and
endorsing any drafts drawn by insurers of the Collateral. Secured Party may apply any ai'ld/or all proceeds of Such insurance, which
may be received by it In paymeht of the indebtedneSs secured thereby, whether such Indebtedness Is currently due or not. Secured
Party reserves the right to purcha.se single interest Insurance' {whiCh provides only protection for Secured Party) and add the
premium for such insurance together with Interest at the loan pre-maturity contract rate to the balance of the loan. This premium Is
due Upon demand, or may be paid In full at anY agreed time. The single Interest premium is written by a company authorized to
tiansact business In the Sta!e of Texas at lawful rates not fixed or approved by the Board of Insurance.
Secured P.arty, In Its sole discretion and without obligation en Secured Party to. do so, may advance and. pay sums on behalf and for
the benefit of Debtor for costs necessary for the protectloli and preservation of the collateral and other costs that may qe
appropriate, In SecUred Part-y's sole d!Scretiori, "Including but not limited to InsuranCe premiums, ad valorem taxes, and attorney's
fees and legal costs and expenses. Any surrls which inay be so paid by Secured Party and all sums paid for Insurance p,remlums, as
aforesaid, including the costs,.expenses, ami attorney's fees paid In .any suit af.fecting said Collateral shall.bear Interest from the
dates elf such payments at the loan contract Interest rate applied to the unmatured principal balance and shall be paid by Debtor to
SectJred Party upon detnand, and 'sha)l be deemed a part of tl:m debt. and recoverable as such In all aspects, Any sum to be
reimbursed shall be secured by this Security Agrel!-f!lent.
(10} Debtor shall, at its own expense, do, make, proCure, and de!lver all aCts, things, writings. and tis Secured Party
i-nay at any tli'ne request to protect, assure or Its interests, rlghis and remed'1es created by, provi9ed In or emanating from
this Security Agr.eement.
(11 1 Debtor shall lend, rent, lease or otherwise dispose of the Collateral or any interest th.erein except as authorized in this Security
Agreement or In writing by Secured-Party, and Debtor shall kl}ep tlie C611ateral, in.cluding the proceeds thereof, free from unpaid
charges, including taxes, and from !ien.s, and secuiity interestS Other than that of Secured f'arty.
Debt?r shall slgn.and execute atone o; with Secured Party any Financlrig Stateinent or o1:her or procure any.docuruent,
and pay a11 costs! necessary to prOtect the security Security Agreement' againSt the rights or interests
of third persons. Debtor shall pay the costs of lien searches and certificates and all filirig. fees, continuation .fees, and fees fol'
certificates of good_ standing and other information required bY Secur6dParty.
IBC0004 - 06/22/0l
Page J. of 9
(131
{14)
(15)
(16)
{17)
. . . . I '
Debtor sh_alf al; all tlm':'s. keep "4..o !.:oJJateral and its proceeds separate and distincf ; ..;m Ot Debtor. shall
a
1
odd' complete of th7 Collateral and its proceeds. Debtor shall preserve the Collateral and pay all costs
o _so, u mg [but not hm1ted to) feed,. rent, storage and expense.s of sale.
. . . . .
II 3eCIOued Fmq _slwald ar D!li d111e be j[ tLe opi;ioi1 that tl;e 6ollatc10l L s elccl" eel
1
eh:eli e 1
6
8
etloe tse
il;sufliciellt to adcquateh secu e tl e 'f18elstcelt esiJ, at sliaulel Seebld Palt
1
1 self see It stop
1
_a tot debte(
9
s,
t::lre. See1:1reEI Pert,. FAa, ea_H ts aEIEI'fsno:l

ts pleJgeEI El/ c eS 13
1
tl's " ec; e t a dsfactot
1
to. Sacutpd p
0
L,.
. .
If any Collateral or .proce"eds include obligations of third to the transactions creating. those obligations will conform in
all respects to applicable state and federal consumer credit laws.
In the event Debtor O{ any. "person or persons seeks to enjoin Secured Party from taking any action in. connection witlil the
Indebtedness or the enforcement of Secured Party's rights in the Collateral, Debtor hereby agrees to give written notice to the
President of. Secured Party, at the address of Secl!red Party set fofth in the first paragraph of this Secufity Agreement, of such
or address as Secured Party may Qeslgnate in writing to Debtor, prior to Sfleking any such Injunctive relief.
Debtor shall indem_nlfy and hold harmless Secured rarty from and against any and aU claims, losses and liabilities growing out !of or
resulting from this Security Agreement Hncluditlg, without limitation, enforcement of this Security Agri:lenient), except claims,
tosses or liab!lities from the gross.ni:lgllgerice or misconduct of Secured PartY . Debtor agrees, upon demand, tO pay
to Secured Pilrty th.e amount of any and a!l expenses, including, but not !lmlted to, the fees and disbursements of its couhsel and of
anyexperts agents, which Secured Party may incur In with (a) the preparation; execution, deliverY. tiling, recording
or administration of this Agreement or the obtaining oFadvice from counsel with respect to its rights and remedies
this Security Agreement, lbl thecustndy, preservation, Use Of operation of, or the Sate of, co!le"ction fro"m, or other realization upon,
<,my of the CoUateral, (c) the exercise or enfoi-cement of any of rights of Secured Party hereunder, (d) the defense by Sebured
Party of any Injunction proceeding related to the lndebte"dness or the Col!atl;lral, or Ia) the failure by Debtor to perform oi" observe
ciny of the _provisiOns hereof. Debtor ag.re.es to pay interest on ariy or ottier sums dUe to Secured Party hereunder (save and
except lnsuran_ce) that are not paid wh_en due at a rate Per annum equal to the highest rate permitted l{y applicable law.
. . . . .
( 18) As additio_hril "for the r:iebtor assigns, pledges and grants to. Secured. Party a siwurit.Y Interest, !I Hen
and contractuar right of setoff in and to all of the Debtor's money, credits, accounts, securities, certlflcatE!S and/or other property
nowin, or at any time-her?after comJ.ng within, the custody or control of Secured Party or any member Bank or branch.Bank of
lnternath;ma! Bancsh_ares Corporation, whElther held-iry a general or special accountor deposit, or for safekeeping or otherwise. Every
such s"ecurity interest and right of set-oft may be exercised without demand.o.r notice to Debtor .. No security interest or right of set
off shall be deemed to have been waived by any act or conduct on the part of Secured Party, or any failure to exercise such right of
setotf or to enforce Such sec.urify interest, or. by ar1y so 9oing. Every right of set-off and security shall contir\ue in
full force and effect until such right of set-ott or security interest is. specifically waived or released by an instrument in writing
by:sectlred Party. The foregoing Is In addition to and npt in" lieu of any rights of setoff allowed by law.
{19) Debtor shall assist Secured Party in Complying with the Federal 'Assignment .of Claims Act.land.any successor statutes) and slmilar
laws to enabieSecured Party to become an assignee under suqh Act and otherwise comply with such law.s, Debtor Shall preserve
the lia!Jillty of all aCco!Jnt debtors, obligors, and se.condary parties whose obligations are part of the Collateral. Debtor. shall notify
ihe Secured Party of any change occuiring in or to the Collateral, or in any "fact or circumstances warranted or represented by
Debtor In th"ts agreement or furnished to Secured Party, or if any Event of Default occurs.
(20) Debtor will not allow the CoUatElrai to be to real estate, except goods identified herein as fixtures.
.!21)
. 122)
!23)
1241"
125)
All ex!ended.or renewed note lsi w!li be executed on lhe date of the original notels).
. . . .
Debtor Shall.compl-f all environmental laws and regulations to the Coilateral and th_e premises in which the Collateral
is located and shall notify Secured Party upon receipt of any notice or other Information as to any environmental haza!ds or violation
of such laws. SeCured. Pat:ty m2y. .inspect aU premises in which the Is located and the Collateral as to Its and their
co!"Tlpllance with envirpnmentallaw. Debtor indel}lflifles and hoiQs harmless Secured Party tor any breach of foregoing and for all
losses, fines, damages, including court costs and tees, Incurred by Secured.Party to c;lefend Itself, or t.o protect or
preserve the. Collatei-ar" against environmental risks, fine;:;, and other claims "relating to the Collateral..
Without providing Secured Party with at" least thirty' {30) days priQr written notice .of Debtor's intention to dO so, Debtor, un.til the
indebtedness is in full, agrees that It will noti
a. in a series at" merge Into or .conso;;dS:te with any entity, sell.all or substanti;;llly all
of its assets, or In anY way jeopardize its corp"orate existence,
b. chan9e the St?Jt6 of its !ncorporation,
c. d;u gc its co p te -
d. addreSs and/or location of its.Chief Executive Qffice;
a. file a UCC1 Amendment form, and/or
t. file a UCCl Termination form.
Debtor has the risk of Joss of the Collateral.
;arty no .duty collect. any income accruing on the. or any relating to the
B. Special Re:presentations and Warranties.
rePresents, warrants and that:.
{1)
12)
13/
If the Collateral includes inventory:
(a) Debtor will Immediately notify SeCured Party of the disposition of any inventory and at Debtor's -expense will either. a_ssign to
Secured Party a first-priority security. interest In any resu!ting account, chattel paper, or instrument or delivet: to Secured Party
cash in the amount of the sale price. Debtor will not sell, lease, or Otherwise dispose of any Collateral except in the ordinary
course of bu.Siness without the prior written consent of Secured Party. . . . . .
. {b) I,Jnti! default Debtor may in the ordinary coUrse of business, Sf!!l!, laase or furnish under contract of s_ervtce any the inventory
normally held by Debtor tor such purpose, provided, how6ver,.that such use of the inventory shall not be inconsistent any
other _provisions of this Security Agreement or with the or conditions of any policies" of insurance. thereon. A sale in the
ordinary course of business does not lnclud.e a .transfer In partial or total satisfactio_n of a debt.
tt the Collateral Includes accounts:
(a) Each account in the"Collateral will represent the valid, legally enfOrceable obligation of third parties and will not be evidenced by
anY irlsuument o"r cha.ttel paper.
{b) The office where Debtor keeps its records concerning accounts, tt'any, Is the of Debtor set forth at the beginning of
this Security _Agreement.
If the Collateral includes iilstruments, chattel paper or documents:
{al By delivering' a copy of this Sec.urity Agreement to the broker, se!!er, or other person in of Collateral that iS chattel
paper or document, Security Party wlll effectively notify that person of Secured Party's interest in the Collateral. IJelivery of the
copy of the Security Agreement will also constitute Debtor's instruction i:o deliver to. Secured Party certificates .or other
evidSnce of the C:ollateralas.soon as it is;available. Qebtt?r wm:tmmediately deliver to Sec1,1reQ P.arty all chattel paper and
documents that are Collateral. in DE!bt9r's possession. If that Collateral is hereafter acquired, "Debtor will deliver it t.o Secured
Party immediately following acquisition and either endorse it to Secured Party's order or. give SecurEld Party appropriate
.executed powers. If Instruments, chattel paper, or monie!;, qr documents are, at any time or times, ihcluded In the
_IBC0004 -
Page 4 of 9
.. ' .
.(
. ::
__;

.. :;
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.";:..
{b).
Collateral, "':'hether as pro1 s or Debtor will prOmptly deliver the , . .e to Secured Party upon the receipt thereof
by f?ebtor, and In any_ pr?mptly. upon demand there:ore by Secured Party, If n_ecessary, all Collateral wm either be
endorsed to Secured Party s order or !!Ccompanled by appropnate executed powers,
By satisfactory to Secured Party, Debtor has perfected or will perfect a security interest In goods covered by chattel
paper, 1f any, ln Collateral.
(41.
;f the Collateral bV a .of Title: If .anycertlfi.cate of title .orslmi!ar docu;,ent Is at any and
to the laws of any jurisdiction, or oUtstanding with respeCt to the Co_llateral or Bt")Y part thereof, Debtor wl!l prornptly
Party and Deb;tor w.1!! -promptly cause .the Interest of Secured _Party"to be properly noted thereon, and if any
certificate of title. or s1m1lar document 1s so 1ssued. or outstandmg -at the time this Security Agreement is executed by or on behalf .of
then Debtor- sha_ll have caused the Interest of Secured f'arty so to have been properly noted at or before the time of such
and Del::itor wi_ll further promptly deliver to Secured Pilr:ty any such Certificate of title or simllar document issued or
outstanding at any time With respect to such Collateral.
16}
171
181
. : . . .
If the Collateral is or may become fixtures on real described herein: This 'security Agreement, upon filed for record in
re.al property recor?s of county wherein such fixtures are situated, shall operate a!so as a financing statement"filed as e fillture
f1hng 1n accordan9e With Section 9,402(e) of the Texas Business Commerce Code upon such of the Collateral which is or may
become fixtures. .
_Debtor has rights in or the power to transfer the Collater<il and .its title to the Collater-al iS' of all claims, liens, security.
mterests and restrictions on transfer or pled.ge except as created by this Se.curlty Agree_ment.
All collat_era! consistitlg of goods Is located so)Biy In the states and/or states previoUsly desi!:jnsteq. and warranted by Debtor to
Party.
Debtor's:
_(i) chief executi_ve office Is located in the state previously designated and warranted by Debtor to Secured Party;
{I!} _state of incorporation is the state previOusly designated and warranted by Debtor to Secufed Party; and
Uii) exact legal name is a.s 11et fortli ii-1 the first paragraph of this Security Agreement
SECTION VI: EVENTS OF DEFAULT."
Debtor shall be -In d!'lfauJt under this s'acurity Agreement upofl the happening of any of the following events or jhereln caned an
"Event of . . .
1\l
121
(3)
141
15}
16}
17}
181
The failure by Dt;btor or any other 11able party when due any of-tlie either principal or Interest, or any other sum due
under th_e _terms of any evidenCing the Indebtedness,
Default by Debtor in the punctual of any of the ob!lgatiohs, covenants, terms o; provisions." contained or. referred to in this
Security Agreement. .
Any or statSfT!ent contained in this security _Agreerrient or made or fumlsh89 to Secured Party bY or. on behalf
of Debtor or other person "or partY in connection with this Security Agreement or to Induce Secui-ed Party to make the loans
. (described hi Section 111) prOves to have been false i.n anY respect when .made or furnishe;P.
Loss, theft, substantial daJTla9e, destructiOn, sale (exceP.t as authorized in this Security. Agreement) to or of any of
COllateral, or the. making of any levy, seizure or attachment thereof or thereon.
D'ebtdr's death, dlssolution, termination of existence, Insolvency or buslhess failure;' the appointment of a receiver of all or a'ny part of
the property of Debtor; an assignment for the benefit of creditors l?Y Debtor, the calling of a meeting_ at creditors of Debtor, or .the
commencement of any proceeding under any bankruptcy .or Insolvency laws by or against Debtor Or any guarantor," surety or endorser
for Debtor; or the occurrenc-e- of any of such.avents described in this part (51 as to any person or party liable for the paYment of the
obllgations, or any portion thereof.
Any Statement Of the financial condition of Debtor or of anY maker, guarantor, surety or endorser of any of the Indebtedness proves to
be false. .
The Collaterai becomes, In the ju.dgment of Secured Party, unsatlsfac_tory qr.lnsufflclent In or yalue.
Any maker, guarantor,. surety or endorse( under or with respect to the Indebtedness defaults in any. obligation or liability to Secured
Party.
(9) The occurrence of any envlroi1r1lenta!!y .hazardous spill, discharge or other slffiilar event adversely affecting or the
pr9mlses In )Nhich the Collateral is whether suCh occurs on such premises or 0':1 other premises.
(10) Debtor, or any them: or any guarantor; falls to timely deliver any and all f!nancia! statementS, Income tax r6turns, cash flow
information, balance sheets, accounts receivable reports, or any other business, tax Or 'financial Information requested by Secured
.Party.
SECTION Vll: 'sECURED PARTY'S RIGHTS AND REMEDIES.
A.
111
121
13}
14}
Se.cured Party may exerc!SS the following rights and remedies either before or aftEir an Event of Default:
Secured Party may take ContrOl of any proceeds of the Col!atera!.
Secured Party may release any Collateral in Secured Party's possession to any teffiporarlly or otherwise.
Secured Party may lake coi-ltfol of any funPs generated by-the Collateral, sUch as refunds fi-om and of insurance, and reduce
any part Of the-Indebtedness accordingly or perrTiit Debtor ttl use such funds to repair or replace damaged or destroyed Collateral
covered by insurance.
Secured Party maY request Debtor frorp time to tinie: in Secured Party's discretion to take any actio.n and to execute any instrument
which -Secured !;'arty may deem necessary or advisable to accomplish the. purposes of this Security lncfudlng, without
lltnitation. (a) to ask, demand, collect, sue for, rficover, compound, receive and give acquittance and racelpts for monies due and to
become due unC!er or in respect of any Collateral; (b) to feceive, endorse and collect any drafts or other InstrUments, .documents and
chattel paper In connection with the preceding actiOns: (c) to file any claims or take any action or institute any proceedings which
Secured may deem necessary or desirable for collection of any of the Coltateral or otherwise to -enforce .Its rights with respect to
any of the Collateral,- and (dl to complete and sign on be!lalf of Debtor one or more financirig statements pertaining to the Collateral
and file the same in an appropriate location. The powers conferred on Secured Party hereun.der are solely to protect Its interest in the
Collateral and shall not impose any duty upoil Secured Pa-rty to exerclse any. such powers. Debtor's appointment of Secured Party as
Debtor's agent is coupled with an interest and will sun:-ive any disaQil.ity o! Debtor.
This SecuritY Agreement, Secured Party's. rights hereunder and/o"r the hereby secured be assigned in wt10le and In
part fr6ff! tline to time, and !n anY such case Secured Party shall be fully discharged from qll re.sponsibility with respect to the Collateral
so and the assiqriee sl-]all be entitled to all_ of the rights, privileges and remedies grante.d $ecur!ty Agreement to Secured
Party to the _the same are assigned, and Debtor will assert no Claim or defenses he f!!aY have .against Secured Party against the
assignee, except those granted in this Security" Agreement. In addition, and will not assert against any claims, defenses
or whiCh Debtor assert against Secured Party except defenses which be waived.
I'age 5 of. '
Agreement-Staci Produce 3.2.2005 Pg 6 of 10 )6)
Party may enter "upon. r _q,J;fr's premises .at .any reasonable time to inspect the Collateral and Debtor's books
perta1mng to the co!!ateral, and o, .. .,.Jr shall assist the Secured Party in makil}g any suCh inspectio!',
and records
(7) Party may noti.iy theaccou"nt or any accounts: lnst_ruments or of
Indebtedness rem1ttcd by Debtor to Secured Party as proceeds to pay Secured Party directly. Secured Party may contact acCount
directly to verify information. furnished by Debtor. . . -
(8) Secured Party may re9ulre _additional Col!aterl!l or reject unsatisfactorY any prOperty hereafter offered by-Debtor as Collateral.
. . . . .
(9) Secured P.arty may designate, from time to time, a certain"peicentaQe of the col!ater<;J.I as the loan value arid require to maintain
(10) Secured Party may present lor coiwersion to cash any Instrument or investrTient security or a combination thereof. But Secured Party
shalt not have any duty to present for conversion any instrument of Collateral In Its possesSion unless It shall have received from Debtor
detailed written instructiohs to that' effect at. a tif!1e reasonably in advance of the final date to. make such convJrsion
{111.
(12)
(131
\15)
(16)
117)
possible.
The foregoing rights and powers of Secured Party will be in additio'n to, and not a limitatiOn upon, any rights and powers of. Sebured
Party givef1 by law, elsewhere-J.n this Security Agreeme;nt, or otherwise.
Secured Party has no obligation.to attempt to satisfy the Obligations by .collecting them from any other person' liable tor them and
Secured Party may 'modify or waive any collateral provided, by any other person t'o secure any .ot" the Obligations, aU without
affecting Secured Party's rights against Debtor . Debtor waives right It may have to require Secured Party to pursue any third
person for any of the Obligations.
. . . . . . :
Secured Party may comply with an'y applicable state. or in connection with a disposition of the Collateral fmd
compliance will not be considered to. affect the commerci<!l reaSonableness of any.sa!e of tbe Collateral.
If .Secured Pilrty .sf?!ls any of the Collateral upon.credit, Debtor wi11 be credited only with made by the purcba.ser,
received by Secured Party and applied to the indebtedness of the PLrchaser. In the event the purchaser falls to pay for the Colhiteral,
SecurtJod Party may resell the Collateral and Debtcir shall be credited kith the proceeds of the sale.
'secured Party have no to marshall any assets In favor of 6ebtof, or or in payment of:
(I) the Note,
{iii . any of the other Obligations, or
{iii) any other obligation owed to Secur!Jd Party bY Debtor or any oiher person ..
This Security Agreement shall bind and shall Inure to the benefit of the heirs, legatees, executors, admin,lstrators, successors and
assigns of Secured P11ity and shall bind ilfl persons who become b_ou:nd as a debior to this. Sec.I,Jrity Agreement;
. . . . . .
Secured not consent to any assignment by Debtor as exprassly provided In this Security Agreement .
B. Remedies in Event of Dufault
During the existence of, arw of Default, o i. 1 tt:;: CCCIII Secdled Pe;L dee::;s 'tself i :seedre i; tl e pa11 _;e: t of .de litdebtedoieos,
Paity may dec]are the unPaid principal and unp.aid and accrUed interest of the Indebtedness lmmed[atelY due in whole or enforoe the
Indebtedness, and/or exercise any rights and remediEis granted by the _Business Commercial or by this Security Agreement,
inCluding the following: . . . .
. . . .
11) Debtor to deliver to SeCured Party all relating _to the Collateral;
121 require Debtor to ;issemb!e the Collateral and make it available to secured Party at a reasonably convenient to both pa'rties;
)3)
14)
take possession of any qf the 'tor purpose enter where It Is locate_d if this canbe done breach
ot the peace and will_not be guilty of, held liable for,.'trespas::
sell, lease', or othery.tise diSpOse of any of the Collateral in accofd the rights, remedies, and duties of Secured Party. under
Chapters 2 end 9 of the Texas Business And Commerce Code aft!!f givilig notice aS required by those chapters; unless the Col.laterel
threatens to deCline rapio;:lly in value, is perishable, or would be sold on a recognized market, Secured- Party will giye !Debtor
reasonable notice of any public sale. of the C!JIIatera! or of a time after which It may be otherWise disposed of without further notice to
Debtor; In this eVe.nt, notice will be deemed reasOnable If It Is n1ailed, postage prepaid, to pebtor at address ;Jpecifled jn this
agreement at least ten days before .any public sale or ten days before time When the Co!lateral may be otherwise disposed of
without further riotlce to Debtor, Deb'tor authOrizes S'ecured Party to disclaim or modify any and all warranties set forth in Section
9.01 O(d)' and'stipulates and agfeeS that such a and/or ;.,Qdification will not render the sale corrimerclally unreasonable.'
' '
{5) surrender any Insurance policies coveri.ng the Collateral and receivethe unearned
(7)
apply any proceeds fromdispositlon of the Collateral after defaul.t in the manner specified in Chapter 9 of the Texas Business And
Comll!erce Code, Including payment of ?ecured Party's reasonable f!Uorney's fees and court expenses;
it disposition of the Collateral leaves the Indebtedness Unsatisfied; collect the deficiency fro'm all liable partit;!s. Expenses of retaking,
holding, preparing tor sale, se!ling or the like shall include Secured:Party's reasonable attorney's fees and legal costs an'd/or expenses,
and Debtor agrees to pay such costs, expe11ses, and..fees , plus at the maximum rate allowed by applicable law;
(8) Secured Party may retain all qr part ot the collateralln full and/or partial satisfaction of the Indebtedness pursuant to Section 9.620 of
{9)
the Texas Business And Commerce Code;
Secured Party may, without demand or notice ot .any kind, appropriate and apply toward the payment of any sums then owing to
Secured Party and In such order of application as the Secu(ed Party maY from time to time elect, any property, balances, Credits,
deposits, accounts or monies of Debtor which for any purpose Is In' the possession or c;ontrql of the Party or any member E}ank,
branch Bank or other de.pository of International Bancshqres Corporation; and/or
\1.0) Secured Party may remedy any default without waiving the defao,:lt remedied and may waive any default without waiving any other
priOr or default.
SECTION VHJ: ADDJTIONAL AGREEMENTS.
( 1) All notices and other communications to Secured Party hereunder 'or In connection herewith shall be deemed to have been given when
received by Secured Party in writing at the address first shOwn Any notice oi- demand or other communication to Debtor
hereunder or in connection herewith may be' given and shall conclusively-be deemed and considere;d to have been_ given and received
upon the deposit thereof In writing in tj1e United States Mail, duly stamped and addressed to Debtor either at the street address, the
first shown hereinabove, or at the mailing addresii, If any, given by and/or for Debtor .at the beginoiinQ of this agreement (or at such
other address as may have been designated mOst recently in wr:ltlng by Debtor to .secured Party!; provided, however, actual notice to
Debtor, however 9ivenor received, always be eHE!ctive when: given or .received..
(2) A copv of this security Agreement or any flriencing statement Covering the Collateral is arid may be filed as a financln'g
statement. Information concilrpifig this security Interest may be obtained at the o_tflce of Secured Party shown above.
Page 6 of 9
_IBC0004 - 06/22/0i
..
...
__________________ !'.
>.'

. .
', ,:
-. '.' ..
(3) This Agreement may o':'IY or by .an agreement in writing,
!4) This security interest shall neither affect nor be aff_ected by any other security for of the Indebtedness. Nelthe.r extensions of any of
the nor ?f any :o.f th.e Collateral.shall the val.lditY. of this !lei:urltV interest with reference to any third party,
Additionally, foreclosure of th1s secunty 1nter"lst py lawsuit does not 'hmlt Secured Party's remedies, including the rightto sell the
Collateral :under the .terms of this. Security. Agreen:'ent. have the right to exercise all remedies at the same or
!1mes no rerpedy be a d.efense !a any ot!let. Setuted _Party shall have all rights and rem.edies granted by Jaw or
otherw1se In to those provided In .th1s Secur1ty Agree.ment.
(5) Party any default Without waiving lt. No .delay. by Party in exercisin'g its rights or partially exercising Its
n.ghts pr remedies shall waive further eXercise of those remedies or rights. The failure of Secwred Party to exercise. any remedies or
rights does not waive subsequent exercise of those remedies or rights. AnV.waiver bySecured Party cit any default shall not waive an
further Secured Party may remedy any default without waiving it. Secured Party's waiVer of miy right in this
Agreemeilt.or any default Is binding only If In writing..
(6) qebtor and Party the Indebtedness shill be in strict comp!ia.nce with applicable usury laws. If at time
c6ntract.ed for, charged or received under any. sacured by this Security Agreement or otherwise In connection with this
traAsactlon would be under appllc;abte law, then regardless. of the pro_vlsions this Agreement or any other
documents or se:unng.or oth?rwlse axecuted.tn connection with BnY Indebtedness secured by this Security
or any or event h.ncludmg, Without hmltatl?': prepayment of principal under the. Note or acceleration of maturity by
Secured Party) wh1ch may occur With respect to tl"!e Note, 1t IS agreed that. all sums to be usurious shall be Immediately
credited by Secureq Party to Debtor as a payme':lt of principal under the Note or if the Note has already been paid, 'immediately
t? Debtor. A_!! compensa.tion which con.s;tltutes interest under. applicab.le law _In connection with any Indebtedness secured by
th1s Secunty Agreement shall b!'l amortized, pro!"ted, allocated, and spread over the fl.lll period of ti!T}e any indebtedness IS owed by
Debtor, to the greatest extent permissible without exceeding the applica:ble maximum rate allowed by llPPiicBble law tn effect from time
to time during such _period. . : .
17). Secured PartY may perform any obli9ati0n which Debtor falls to perform Debtor.agree.s on demand to reimburse S9cu;ed Party
Immediately for any sur:ns so paid Secured Party, Including attorneys' and other legal expenses, plus Interest on those sums
trom the dates of payment at the rate stated In the Note for matured, unpaid amounts. Any sum to be reimbursed Shaff Oil secured by
this Security Agreement. {See Section IV, 19) for insurance reimbursements), . . .
18) This Security Agreement is.being eXecuted and delivered arid is to .be performed !n the Stateof and Shall be construed
and enforced in accordance with the laws of the State of TexaS, except tO.the extent that the Code provides for the aPplication of the
iaw of States.. When the context re,qulres, singular nou.ns and prOnouns include the plural. The rights of Secured Party
under this Security Agreement shall Inure the benefit of Its successors and assigns. Any assignment of part of the Indebtedness and
de!1very by Secured Party of any part of the Collateral wf!! fully discharge Secured Party frOm any and all responsibility for that portion
of the Collateral. Debtor's IndebtednesS under this Security Agreement shall bind Debtor's personal repiesentatlves, successors and
assigns. l_f Debtor Is more -than one, aU their representatives, warranties and agreements are joint and several. If aoy part of this
Security Agreement is unenforceable,. the unenforceablllty of such prov!siori w!l1 not affect the e.nforceabll!ty of any other pr6vlsion
hereof and all ,other provlsloiis wtu constitute valid provis.ions.
SECTION IX: THE PARTIES FURTHER AGREE AS FO(LOW.S-i
Ia) ANY .AND ALL CONTROVERSIES BETwEEN THE PARTIES SHAll BE RESOLVED BY ARBITRATION IN ACCORDANCE WITH THE
COMMERCIAL .ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIAl'ION IN EFFECT AT THE TIME OF FlUNG, UNLESS THE
COMMERCIAL ARBITRATION RULES CONfliCT Wli'H THIS PROVISION, AND IN SUCH EVENT THE '!ERMS OF THIS PROVISION SHALL
CONTROL TO THE EXTENT 'OF THE CONFLICT . ANY ARBITRATION HEREUNDER SHALL BE BEFORE AT LEAST THREE NEUTRAL
ARBITRATORS ASSOCIATED WITH :rHE AMERICAN ARBITRATION ASSOCIATION AND SELECTED IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES 'oF THE AMERICAN ARBITRATION ASSOCIATION. FAILURE OF ANY ARBITRATOR TO DISCLOSE All FACTS WHICH
MIGHT TO AN OBJECTIVE OBSERVER CREATE A REASONABLE IMPRESSION.OF 'THE ARBITRATOR'S PARTIALITY. AND/OR MATERIAL
ERRORS OF.lAW SHALL BE GROUNDS {lN ADDITION TO ALL OTHERS] FOR VACATUR OF AN AWARD RENDERED PURSUANT TO THIS
AGREEMENT, .
{b} THE AWARD'OF THE ARBITRATORS, OR A MAJORITY OF THEM, SHALL BE FINAL. AND JUDGMENT UPON THE AWARD RENDERED
MAY BE ENTERED IN ANY COURT. STATE OR HAVING THE ARBITRATION AWARD SHALL. BE IN WRITING AND
SPEC;lFY THE FACTUAL ANt;) LEGAL BASES FOR THE AWARD. THE REQUEST OF ANY PARTV:, THE SHALL INCLUDE
FINDINGS OF FACT AND CONCLUSIONS OF LAW.
(c) ARBITRABLE DISPUTES INCLUDE ANY AND All CONTROVERSIES OR CLAIMS BETWEEN THE PARTIES OF WHATEVER TYPE OR
MANNER, INCI,.UDING WITHOUT LIMITATION, ANY CLAIM 'ARISING OUT OF OR RELATING TO THIS AGREEMENT, ALL PAST, PRESENT
AND/OR FUTURE CREDIT FACILITIES ANDIOR''AGREEMENTS INVOLVING THE PARTIES, ANY TRANSACTIONS BETWEEN OR INVOLVING THE
PARTIES,_AND/OR ANY ASPECT OF ANY PAST OR PRESENT.RELATIONSHIP OF THE PARTIES, WHETHER BANKING OR OTHERWISE,
SPECJFICALL Y INCLUDING ANY ALLEGED TORT COMMITTED BY ANY PARTY.
ld\ 'THE PARTIES SHAll P,LLOW AND PARTICIPATE IN DISCOVERY IN ACCORpANCE WITH. THE FEDERAL RULES OF t:;;IVIL .PROCEDURE
FO_R A PERIOD OF ONE HUNDRED TWENTY {120} DAYS AFT.ER THE FlUNG OF THE ORIGINAL RESPONSIVE PLEADING. DISCOVERY MAY
CONTINUE THEREAFTER AS AGREED BY THE PARTIES OR AS ALLOWED BY THE ARBITRATORS. UNRESOLVED DISCOVERY DISPUTES
SHALl BE BROUGHT TO THE ATTENTION OF THE ARBITRATORS BY WRITTEN MOTION FOR PROPER DISPOS!T!ON,INCLUDING RUUNG ON
ANY ASSERTED OBJECTIONS, PfiiVJlEGES. AND PROTECTIVE ORDER REQUESTS ANO.AWARDING REASONABLE ATTORNEY'S FEES TO THE
PREVAiliNG PARTY.
{e) IN THE EVENT THE ALL AFFIRM.ATiVE CLAIMS OF INTEREST AND
ATTORNEY'S FEES, OR UPON THE WRITTEN REQUEST OF ANY PARTY, {11 PRIOR TO THE DISSEMINATION OF.A UST OF POTENTIAL
ARBITRATORS, THE AMERICAN ARBITRATION ASSOCIATION SHAll CONDUCT AN IN PERSON ADMINISTRATIVE CONFERENCE WITH THE
PARTIES AND THEIR ATTORNEYS FOR THE FOLLOWING PURPOSES AND FOR SUCH ADDITIONAL PURPOSES AS THE PARTIES OR THE
AMERICAN ARBITRATION ASSOCIATION MAY DEEM APPROPRIATE, (A} TO OBTAIN ADDITIONAL INFORMATION ABOUT THE NATURE AND
MAGNITUDE OF THE DiSPUTE AND THE ANTICIPA:fED LENGTH OF HEARINGS AND SCHEDULING: (B) TO DISCUSS THE VIEW OF THE .
PARTIES ABOUT ANY TECHNICAL AND/OR iJTHER SPECIAL QUALIFICATIONS OF THE ARBITRATORS: AND {C) TO CONSIDER, WHETHER
MEDIATION OR OTHER METHODS bF DISPUTE RESOLUTION MIGHT BE APPROPRIATE, AND (2} AS PROMPTLY AS PRACTICABLE AFTER THE
SELECTION OF THE ARBiTRATORS. A PRELIMINARY HEARING SHALL BE HELD AMONG THE PARTIES, THEIR ATTORNEYS ANO THE
ARBITRATORS. WITH 'rHE AGREEMENT OF THE ARBITRATORS AND THE PARTIES, THE PRELIMINARY HEARING MAY BE CONDLfCTED BY
TELEPHONE CONFE.RENCE CALL RATHEF.I THAN IN PERSON'. AT :rHE PREL!MINAAY HEARING THE MATTERS THAT MAY. BE CONSIDERED
SHALL INCLUDE. WITHOUT LIMITATION, A ?REHEARING SCHEDULING ORDER ADDRESSING (A) EACH PARTY'S DUTY TO SUBMIT A
DETAILED STATEMENT OF CLAIMS, DAMAGES AND/OR DEFENSES, A STATEMENT OF THE ISSUES ASSERTED BY EACH PARTY AND ANY
lEGAl AUTH6RJtiES THE PARTIES MAY WISH TO BRING TO T!'!E ATTENTION bF THE ARBITRATORS: (B) RESPONSES AND/OR REPLIES TO
THE PLEADINGS FILED IN COMPLIANCE WITH SUBPART 2(AJ: !Cl STIPULATIONS REGARDING ANY UNCONTESTED FACTS: {D\ EXCHANGE
AND ?REMARKING OF All DOCUMENTS WHICH EACH .PARTY BELIEVES MAY BE OFFERED AT THE FINAL ARBITRATION HEARING; (E) THE
IDENTIFICATION AND AVAILABILITY OF WITNESSES, INCLUDING EXPERTS, ANci SUCH ADDITIONAL MATTERS REGARDING WITNESSES
INCLUDINGTHEIR BIOGRAPHIES AND ASHORT. SUMMARY OF THEIR EXPECTED TESTIMONY, (f) WHETHER A STENOGRAPHIC OR OTHER
9FFIGIAL RECORD' OF THE PROCEEDINGS SHAt:l BE.MAINTAINED; AND (GJ THE POSSIBiliT.Y OF UTILIZING MEDIATION. OR OTHER
ALTERNATIVE METHODS OF DISPUTE RESOLUTION. .
{f) FOR .PURPOSES OF THIS. PROViSION, "THE PARTIES" MEANS DEBTO.R AND SECURED PARTY, AND EACI'I AND ALL PERSONS AND
ENTITIES SIGNING THIS AGREEMENT OR ANY OTHER AGREEMENTS BETWEEN OR AMONG ANY OF THE' PARTIES AS PART OF THIS
TRANSACTION, "THE PARTIES" SHALl ALSO INCLUDE INDIVIDUAL PARTNERS, AFFILIATES. OFFICERS. DIRECTORS, EMPLOYEES, AGENTS
IB00004 - 06/22/01
Page 7 of 9
AND/OR REPRESENTATIVES
AGREEMENT. /
(g) THE PARTIES SHALL HAYP THE RIGHT TO INVOKE SELF HELP REMEDIES (SUCH AS SET-OFF, NOTIFICATION OF DEIHORS
SEIZURE .AND/OR OFCOLLATERAL, AND NON-JUDICIAl SALE OF PERSONAL PROPERTY AND REAl.:. PROPERTY COLLATERALj
BEFO.RE, OR ,AfTER ANY ARBITRATION AND/OR REQUEST ANCIU.,ARY OR 'PROVISIONAL JUDICIAL REMEDIES !SUCH AS
GARNISHMENt, SPECIFIC PERFORMANCE, .RECEIVER, INJUNCTION OR RESTRAINING ORDER, AND SEQUESTRATION)
. BEFORE OR AfTER ANY ARBITRATION. THE PARTIES NEED NOT AWAIT THE OUTCOME OF THE ARBITRATION BEFORE USING SElfHELP
REMEDIES, USE OF SELF-HELP OR ANCILLARY AND/OR PROVISIONAL JUDICIAL REMEDIES SHALL NOT OPERATE AS A WAIVER OF EITHER
PARTY'S RIGHT TO COMPEL ARBITRATION. ANY ANCILLARY OR PROVISiONAL REMEDY WHICH WOULD BE AVAILABLE FROM A COURT AT
LAW SHALL BE AVAILABLE FftOM THE ARBITRATORS. . .
. . . . ..
THE PARTIES AGR;E THAT ANY ACTION REGARDING ANY CONTROVERSY THE PARTIES SHALl EITHER Be BROUdHT BY
ARBITRATION, AS DESCRIBED OR BY JUDICIAL PROCEEDINGS, E!U'r SHALL NOT BE PURSUED SIMULTANEOUSLY IN DIFFERENT OR
ALTEANATJVE'FORMS. A TIMELY WRITTEN NOTICE OF INTENT TO ARBITRATE PURSUANT TO THIS. AGREEMENT STAYS AND/OR ABATES
ANY AND All ACTION IN A TRIAL COURT, SAVE AND EXCEPT A HEARIJ:IIG ON A MOTION T6 COMPEL AfiBITRATIQN:AND/OR THE ENTRY
OF AN ORDER COMPELliNG. ARBITRATION AND STAYING AND/OR ABA'!'ING THE LITIGATION PENDING THE FILING OF THE FINAL AWARD
OF THE ARBITRATORS; ALL REASONABLE-AND NECESsARY ATTORNEY'S FEES AND ALL TRAVEL COSTS SHALL BE AWARDfD To THE
PREVAILING PARTY ON ANY MOTION TO COMPEl, ARBITRATION AND 'MUST BE PAID TO SUCH. PARTY WITH!N.TEN (10) DAYS OF THE
SIGNING OF THE ORDEfl" C:OMPELLlNG ARBITRATION. .
!il. ANY AGGRIEVED PARTY. SHAlL SERVE A Wi=lltTEN NOTICE. OF INTENT TO ARBITRATE TO ANY AND. All OPP0$1NG PARTIES WITHIN
. 360 DAYS AFTER DISPUTE .HAS ARISEN. A DISPUTE IS DEFif':.IED TQ HAVE ARISEN ONLY UPON RECEIPT OF SERVICE OF JUbiCIAL
PROCESS, INClUDING SERVICE OF A COl:fNTERCLAIM, FAILURE TO A WRITTEN NO.TICE OF INTENT TO ARBITRATE.WITHIN THE TIME
SPECIFIED ABOVE SHALL BE DEEMED A "WAIVER OF THE A.GGRIEVED f':ARTY'S RIGHT TO C'OMPEL ARBITRATION OF SUCH CLAIM. THE
ISSUE OF WAIVER PURSUANT TO THIS AGREEMENT IS AN ARBITRABLE r:iiSPUTE. .
\11 ACTIVE PARTICIPATION IN PEND!NG LI'!IGA!ION DURiNG THE 360 DAY NOTICE PERIOD, WHETHER AS PLAINTIFF OR DEFENDANT, IS
NOT A WAIVER OF THE RIGHT TO COMPEL ARBITRATION. ALL DISCOVERY OBTAINED IN THE PENDING LITIGATION MA'f BE USED IN ANY
SUBS"EQUENT ARBITRATION PROCEEDING. . .
{kl THE PARTIES FURTHER AGREE THAT Iii NO ARBITRATION PROCEEDING HEREUNDER SHALL BE CERTIFIED AS A CLASS ACTION OR
PROCEED AS A CLASS ACTION, OR ON A BASIS INVOLVI['IG CLAIMS BROUGHT IN A PURPORTED REPRESENTAtiVE CAPACITY ON BEHALF
OF" THE GENERAL PUBIZIC, OTHER CUSTOMERS .OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY SITUATED AND [U) NO ARBITRATION
PfiOCEED!NG HEREUNDER SHALL BE CON's.OUDATED WITH. OR JOINED IN AN.Y WAY WITH, ANY OTHER ARBITRATION PROCEEDING. .
. . . .
[I) ANY toR SELECTED BE IN TH,E SUBJECT MATTER of THE DISPUTE. EACH OF PARTIES, SHALL
PAY AN EQUAL SHARE OF THE ARBITRATION COSTS, FEES, O.f THE FEES. COSTS. AND EXPENSES.
(m) .Ali. STATUTES. OF LIMITATIONS WHICH WOULD BE,APPLICABi.E SHALL APPLY ANY AND ALL CLAIMS ASSERTED
IN ANY ARBITRATION. PROCEEDING HEREUNDER-AND THE COMMENCEMENT OF ANY ARBITRATION.PAOCEEDING TOLLS SUCH STATUTES
OF LIMITATIONS. '
(n) IN ANY ARBITRATION PROCEEDING SUBJECT TO THIS PROVISION. THE ARBiTRATORS, OR MAJORITY OF THEM, ARE SPECIFICALLY
EMPOWERED TO DECIDE (BY DOCUMENTS ONL)', OR WITH A HEARING, AT THE ARBITRATORs SOLE. DISCRETION) PRE-HEARING MOTIONS
WHICH ARE SUBSTANTIALLY SIMILAR TO PRE-HEARING MOTIONS TO .AND MOTIONS FOR SUMMARY ADJUDICATION.
[ol. THIS ARBITRATION.PROVISION SHALL SURVIVE ANY TERMIN.ATION: AMENDMENT, OR E;Xf>IRATJON OF THE AGREEMENT IN WHICH
THIS PROVISION IS CONTAINEQ, UNLESS All OF THE PART.IES OTHERW(SE AGREE IN WRITING.
{p) THE PA.RTIES ACKNOW.i.ED.GE THAT THIS AGREEMENT. EVIo"ENCes A TRANSACTION INVOLVING INTERSTATE COMMERCE. THE
. FEDERAL ARBITRATION ACT SHALL GOVERN THE INTERPRETATION, ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE
CLAUSE OF THIS AGREEMENT.. .
[q} THE ARBITRATORS, OR A MAJORITY OF THEM. AWARD ATTORNEY'S FEES AND COSTS TO "THE PREVAILING
f:>URSu"ANT TO THE TERMS OF THIS AGREEMENT;
(r) NEITHER THE PARTIES NOR THE ARBITRATORS MAY DISCLOSE l'HE EXISTENCE, C9NTENT. OF\ AESUI,.TSQF "Af..JY ARBITRATION
HEREUNDER WITHOUT PRIOR WRITTEN. CONSENT OF ALL PARTIES AND/OR .COURT ORDER.
isl VENUE OF ANY ARBITfiATION PROCEEDING HEREUNDER SHALL BE IN Bexar COUNTY. TEXAS.
SECTION X. . . . .. . : . :
(al SBcurit.j Interest AbSolute,AII rights of ttie Pariy and the security interests hereunder shall be absolute and uncondlt!oAal li'retlpective
d . . . i
any cflanga" In the tiffie, manner. "amount or place of of, or in othef tarm of, all or any of the Indebtedness, or any other
(ii)
.{IIi)
amendment or waiver of or Consent to any departure from the Promissor.y Nor-e or any other Loan Dqcument; . 1
ariy oi- release or nonperfectlon of all or any part Of the Collateral or any other or any release f(om, amendment to,
waiver departure from any guaranty, for a!l' or any of the Indebtedness; or .
tci the fullest -extent permitted by law, any other circumstances which might otherwise Constitute a defense available to, or a discharge of
the Debtor or a third party pledgor.
!bl Indemnification. The Debtor to indeinnlfy ihe Secured Party and hold "the SeCured. Party harmless from and any and all .
. liabilities, obligations, losses, damages, penalties; actions, JUdgments, suits. costs, expenses or disbursements of any kind of nature whatsoever
which may be imposed on, incuried by, or assertad against the secured Party in any way relating. in any way Rrisihg out of or In connection with
this Security Agreement, tha Loan. Documents or the traflsaCtions contemplated hereby- or thereby other than those out Of the Secured
Party's breach, defa.u!t, negligence. or .Willful misconduct in its obligations under this. Security A9ntement or 'the Loan Documents. Without
limitation of the foregoing, the Debtor will reimburse the Secured Party for all expenses (including expenses for !ega[ services of every kind} of, or
inci(:iental to, the negotiation of, entering into and anforcement of any of the provisions hereof and Of the IndebtedneSs, and any aCtual or
attemPted sal!l, lease or other disposlth;m of, and any excha!lge,enforcement, collection, compromise or :Settlement of any of the Collatbrel and
defending or a_sserting the tights and claims of the Secured Party in respect thereof, aild for the care of the and defending or asserting
the rights and claims of the. Party in respect thereof, by litigation or otherwise, including expense of insuraf'lce. and all such expanses shall
be the Debtor's l':ldebtednass.
.J:BC0004
Page of 9
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THERE ARE NO UNWFitTTEN ORAL AGREEMENTS Bf!WEJ;N"THE PARTrgs.
Dated ,. March
2- ' zoos
DEBTOR: STACI PRODUc;E, LTD., DEBTOR:
DEBTOR:
By
DEBTOR: DEBTOR:
By: By:
DEBTOR: DEBTOR:
By: By:
SECURED PARTY INTERNATIONAL BANK OF COMMERCB
By:
N.ame:
Signature.
Mike Sohn
,.
Title:
9 of 9
IBC0004 -
SCHEDULE!
All of the right, title and interest of Debtor in and to the following types or items of property
now or hereafter acquired by Debtor and all accessions or substitutions therefor and all
products or proceeds thereof utilized by Debtor in connection with its business conducted
at the property descril:ied in Exhibit "A" attached hereto and made a part hereof (the
"Property");
1. All equipment, fixtures, furnishings, inventory, and articles of personal property
leased or owned by Debtor (the "Personal Property") now or hereafter attachad to or used
in or about the Property or that are necessary or useful for the complete and comfortable
use and occupancy of the Property lor the purposes for which they were or are to be
attached, placed, erected, constructed or developed, or which personal property is or may
be used in or related to the planning, development, financing or operation the Property,
and all renewals of or replacements or substitutions for any of the foregoing, whether or not
the same are or shall be attached to the Property;
2. All accounts, accounts receivable, general intangibles (including, without limitation,
trademarks, trade names and symbols) and instruments, notes or chattel paper arising
from or by virtue of any transaction related to the Property or the Personal Property;
3. All proceeds (including premium refunds) of each policy of insurance relating to the
Personal Property;
4. All rights, interests, and appurtenances pertaining to the foregoing; and
5. All other interests of every kind and character that Debtor now has or at any time
hereafter acquires in and to the Personal Property described herein.
102328 .1'
Agreement-Staci Produce Ltd. 12.9.2005 Pg 1 of 10
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EXHIBIT
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-TE!.E!!-H6NE'
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DEBl;'QR
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a Texas limit,ed partnership
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SECURITY
AGREEMENT
The undersigned Debtor, Owner of Collateral, whether one 'or more, and INTERNATIONAL BANK OF COMMERCE
130 E TRAVIS. SAN ANTONIO. TEXAS 78205
(hereinafter called enter Into this Security Agreement and for good and consideration, the receipt of which Is hereby
and agree asfollows:
SECTION 1: Creation of Security Interest,
Debtor hereby grants to Secure.d Party a first and exclusive lien and !>8Curlty Interest in all of the personal property of Debtor, wherever located,
and now Owned or hereafter acquired, including the property described in Section !I of this Security Agreement (the to secure
payment and performance of the Indebtedness (described In Section 111 below).
SECTION II: Description of Collateral.
1. The security interest is granted In the following collateral:
a. Describe the collateral and, as applicable, check boxes and provide information Indicated below,
SEE EXHIBIT
11
A
11
HERETO AND INCORPORATED HEREIN.
b. D The above. goods are to become fixtures on: {describe real estate; attach additional sheet, If needed)
2
3
O The above timber Is standing on: (describe reJ!I estate; attach additional sheet, if needed)
D
The above minerals or the like (including oil and gas) or accounts will be financed at the well head or mine head of the well
or minelocated.On: {describe real estate; attach additional sheet, if needed)
c. If b.1, b.2, or b.3 above is checked, this securitY agreement Is to be filed for recordJn the real estate records. {l'he description of the
real estate must be sufficiently specific as to give constructive notice of a mortgage on the realty).
O The Debtor does not have an interest of record; name of record owner of the real estate Is
D All subStitutes and replacements for, accessions, attachments, and other additions to,. and tools, parts, and equipment used in
connection with, the above property; and the Increase and unborn young of animals and poultry.
E All property similar to the above acquired by Debtor,
F All proceeds, products, and profits of the Col!atera! are included. Coverage of products and proceeds for financing statement
purposes Is not to be construed as giving Debtor any additional rights with respect to the Collateral, and Debtor ls not.authorized to
sell, lease, or otherwise transfer, furnish under Contracts of service, manufacture, process. or assemble the Col!ateral, except in
accordance wlth the provisions of this Security Agreement. Any additional sheets describing the Collateral, the real estate, or other
matters are Incorporated in and made a part of this Instrument.
2. Classify the collateral under one or of the fo!lo.wing Tex_as Business And Code classifications:
D
Consumer Goods
D
Farm Products
CiQil
Equipment {business use}
w
General Intangibles
D
Equipment (farm use}
w
Inventory
D
Investment Property
D
Chattel Paper

Instruments
D
Letter-Of-Credit Rights
Accounts
D
support Obligations
Deposit
D
D
D
Sales Of Payment Intangibles and Notes
D
Agricultural Liens
And to the extent not listed above as original collateral all proceeds and products of foregoing.
Page"l of 9
IBC0004 - 06/22/01
Any term used In the Texas Business And Cc ; . .1rce Code (the and not defined iri this s, .lty Agreement has,the meaning given tb the
term in the Code. ..:. .. :,,
3. D
if this block Is checked, this Is a purchase money security Interest, and Debtor wll! use funds advanced to purchase the Collateral, or
Secured Party may disburse funds direct the seller of the Collateral. and to purchase Insurance on the Collateral, To the extent
Debtor uses the Loan to purchase Col!ater.al, Debtor's repayment of the Loan shall apply on a "first-in-first-out" basis so that the
portio"n of the Loan used to purchase a particular Item of Coll.ateral shall be paid In the chronolOgical order the Debtor purChased the
Collateral.

5.
If any of the Collateral is accounts, give the location of the office where the records concerning them are kept (if other than Debtor's
"Commercial Tort Claimsu, a subcategory of General Intangibles, the Debtor's claim for --'------------
against-------------
SECTION llf: INDEBTEDNESS
This assignment and grant is m.ade. to Secured. Party tQ sec.ure the prompt and unconditional paymentof, and the. first and exclusive security
lnter.est granteO herebY- to Secured Party secures the payment and perlormaQce. of, the following (collectively, the
. Any and all indebtedness, liabi!lties and/or obligations of Debtor, or any of undersigned if more than one, Secured jointly and/or
severally, and in any capacity, whether as borrower, guarantor, or otherwise, now or hereafter owing, createdand/or arising, and regardless of
how evidenced or arising, as to outstanding and unpaid. principal, accrued and unpaid interest, attorneys'. fees, collection c_osts, and all other
sums owing by Debtor, or any of the undersigned if more than one, including but not limited to
that certain Real Estate. Lien Note of even date herewith executed by.Atled, Ltd., a Texas
limited" partnership and made payable to the order of Secured Party in the original principal
and further without limitation to: sum of $1,300,000.00
A. any and all indebtedness of:
(lf indebtedness Is not solely of Debtor) or any of them if more than one, to Assignee, jointly and/or severally, and in any capacity,
V.:hether as borrower, guarantor, or otherwise, now or hereafter owing, created andJor arising, and regail:lless of how evidenced or
arising, including, without limitation:
B. any commercial loan or Indebtedness;
C. <iny credit card or other consumer type of loan;
D, any indebtedness relating to checking or savings accounts (overdrafts, fees, etc.);
E. any expenses incurred in the P,rotection or maintenance of the collateral securing any of such liabilities, loans, and obl[gations;
F. any expenses incurred in the collection of any indebtedness and/or obligation;
G. a['ly letters of credit and/or indebtedness arising out of, or advanced to pay, letters of credit transacth;ms;
H. any Indebtedness, however, evidenced, whether by promissory note, bookkeeping entry, electronic transfer, checks, drafts or other
Items, or by any other manner or form;
l. any other Indebtedness of Debtor and/or of the persons or entities set forth in subparagraph A. above to any financial Institution
affiliated with International Bancshares Corporation, jointly and/or severally, and in any capacity, whether as borrower, guarantor, or
otherwise, now or hereafter owing, created and/or and r.egardless of how evidenced or arising;
J. any and all extensions, modifications, substitutions and/or renewals of any of the above described Indebtedness;
K. a['ly and all costs incurred by Secured.Patty to obtain, preserve and enforce this Security Agreement, collect the Indebtedness, and
maintain and preserve the Collateral including without all taxes, assessments, attorneys' fees and legal expenses, and
expenses of sale;
L. ttie sale by Debtor and the purchase by Secured Party of Accounts;
M. the sale by Debtor and the purchase by Secured Party of Chattel Paper;
N. tlie sale by Debtor and the purchase by Secured Party of P8yment Intangibles;
0. the sale by Debtor and the purchase by Secured Party of Promissory Notes; and
P. alilY of the foregoing that arises after the filing of a petition in bankruptcy by or against Debtor under the Bankruptcy Code, even if
the obligations do not accrue because of the automatic stay under Bankruptcy Code 362 or otherwise.
To the extent allowed by law, for purposes hereof it Is intended that the Indebtedness include all classes of Indebtedness, whether evidenced
by notes, open accounts, overdrafts, or otherwise, and whether direct, indirect or contingent, regardless of class, form or purpose and
Including but not limited to; loans for cOnsumer, agricultural; business or personal
The foregoing shall under no circumstances be limited to the existence or non-existence of collateral for such Indebtedness, or the type of
collateral c0vered thereby. The Indebtedness does not include amounts owed pursuant to a homestead equity loa'n.
to Debtor
at the beginning of this
agreement at such other address as may have designated most recently i writing to Secur!;!d Party); provided, however,
actual no.tice to Debtor, however given or received, shall always be effective when given or received .. Except as otherwise required by law,
any notice given or made pursuant hereto shall be deemed given on the date of personal delivery or, if mailed, on the date such
notice )s deposited in the U.S. fl.:"laU, It received by Secured Party,
SECTION "IV: PERFECTION OF SECURITY INTERESTS.
1. Filing Of Financing
(!) Debtor hereby authorizes Secured Party to tile- a Financing Statement, an Amended Financing Statement and a ContinUation Financing
Statement (collectively referred to as the Statement") describing the Collateral.
(ii) Debtor hereby Secured Party to file a Financing Statement describing any agricultural lle!ls 9r other statutory liens held by
Secured Patty,
(iii) Secured .Patty shall receive prior to the Clos!hg an official report from the Secretary of State of each Collateral State, the Chief
Office State, and the Debtor (each as defined below) (the "SOS Reports") Indicating that Secured Party's security
interest is prior to all other security Interests or other _Interests reflected in the report. . .
{!v) Secl.lted Party shall receive at "any time following the Closing an SOS Report indicating that Secured Party's security interest is prior to
all other security interests or other intere_sts reflected. In the report.
2. Possession.
!il Debto;r shall have possession of the Collateral, except where expressly otherwise provided In this Security Agreement or where Secured
Party chooses to perfect its security interest by possession only, or in addition to the filing of a Financing Statement.
IBC0004 - 06/22/01
Page 2 of 9
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/ill Collateral is in the possession!_ . third party; Debtor will join with Secured PartY - ?tlfying the third party of Secured Party's
security interest and obtaining a Con_tro1 Agreement fTom the third party that It is holding tli .. for the benefit of Secured Party.
3. C_ontrol Agr-eements .. will cooperate with Secured Party in obtaining a Control In form and substance satisfactory to
Secured Party With respe.crtocollateral consisting of:
(i) Deposit Accounts,
(if) Investment Property,
(iii) Letter-Of-Credit Rights, end
(iv) Electronic Chattel Paper.
_4. Marking of Chattel Paper. _Debt_or will n_ot create any Chattel Paper without placing a legend on the Chattel Paper acceptable to Secured
Party indicating that Party has a interest In the Chattel Paper ..
SECTION V;. Debtor's Renresentation Warranties and -Agreements.
A. General Representations and Warranties
. Debtor represents, warrants and agrees that:
(1) Debtor has full power and authority to BAter Into this Agreement; itJls Security Agreement has been duly. authorized,
executed and delivered by Debtor-and constitutes the valid and binding obligation of Debtor enforceable in accordahca with its
terms. No consent of third parties, a l!cense, authorization or flUng with'any governmental autho(ity is required to be obtained or
performed in connection with the execution, delivery, and performance of this Security Agreement
.. . . .
(2) All information: Supplied and statements made by Debtor in any financial, credit or accounting statement or application for credit
prior to, contemporane_ously with or subsequent to the execution ofthis Security Agreement are and shall be true, correct,
complete, va!ld, and genuine.
131
14)
15)
161
17)
19)
Debtor owns, or will use the. proceeds of any loans by Secured Pany to become the owner of the free from any set-off,
claim, nis.triction, lien, secufltv Interest or encumbrance except this security interest and liens for taxes not yet due.
No Financing Statement covering the Collateral or its proceeds Is Qn fila In any public office and Debtor will not permit any
Financing Statement covering any of Debtor'S Collateral or the proceeds thereof to h(lreafter be on file in any public office except as
may be -filed pursuant tQ this Security Agreement.
Debtor shan provide to Secured Pany, upon Secured Party's request, Ill financial Information, Including but not limited to a balance
sheet, Income statement, statement of cash flow, and such other financial Information as may be requested by Secured Pany; (ii)
an appraisal of the Collateral; {Iii} tax receipts; (iv) evidence of Insurance, and (v) any other information required by Secured Party In
connectlcm with the Indebtedness or the Collateral.
Debtor will Q0t use the Collateral or permit the Collateral to be used In violation of any statute; ordinance or other law or
inconsistently with the terms of any policy of insurance thereon;. and Debtor will permit Secured Party and its agents,
representatives, and employees to examine the Co!!ateral at all reasonable times, and for such purpose, Secured Party may enter
upon or into any premises where the Collateral may be located without being guilty of, and/or held liable for, trespass. Debtor will
furnish to Secured Party upon request all pertinent information regarding the COllateral,.
The Collateral shall remain In Debtor's possession or control at an times at Debtor's risk of loss unless Secured Party has taken
possession of the Collateral, and be kept at Debtor's address set forth above where Secured Party may inspect It at any time,
except for its temporary removal iA connection with Its ordinary use or unless Debtor notifies Secured Party In writing and Secured
Palty consents in writing In advance of Its removal to another location.
Debtor shall pay prior to delinquency all taxes-, charges, llans and assesSments against the Collateral, and upon Debtor's failure to
do so, Secured Party at Its option, may pay any of them and shall "be the sole judge of the legality or validity thereof and the
amount necessary to discharge the same. Such payment shall become part of the Indebtedness secured by this Security Agreement
and shall be paid to Secured Party by Debtor immediately and without_ demand, with Interest thereon at the maximum rate allowed
by applicable law,
Hazard Insurance must be furnished at all times for the full amount of the Indebtedness with respect to all Collateral (including
coverage for all materials and equipment) against risks of Fire, Windstorm, Hurricane (if the Collateral Is written 100 miles of the
Gulf Coast), Hall and Collapse {including cost of debris removal) and such other risks as Secured Party may require, Including
standard extended coverage. Such insurance policies shall contain such terms, be In a form, for a period and be written by
companies satisfactory to Secured Pany. Federal flood insurance is also required In those geographic areas that are subject to such
loss. The policy shall also contain a standard mortgagee's endorsement providing for payment of any loss to Secured Pany, All
policies of insurance shall provide for ten days written minimum cancellation notice to Secured Party.
Evidence of coverage must be a copy of the original policy and loss payable cla!JSB, Certificates or letters of coverage wlll not be
accepted,
Secured Party is authorized to act as attorney-in-fact for Debtor in obtaining, adjusting, settling, and canceling such Insurance and
endorsing any drafts drawn by Insurers of the Collateral. Secured Party may apply any and/or all j:!roceeds of such Insurance, which
may be received by It In payment of the Indebtedness secured thereby, whether such indebtedness l.s currently due or not. Secured
Party reserves the right to purchase single interest insurance {which provides only protection for Secured Party) and add the
premium for such insurance together with interest at the loan pre-maturity contract rata to the balance of the loan. This premium is
due upon demand, or may be paid in full at any agreed time. The slng!a Interest premium is written by a company authorized to
transact business In the State of Texas at lawful .rates not fixed or approved by the Board of Insurance.
Se9ured Party:, in its sOle discretiOn and without obligation on Se.G.ured Plirty to do so, may adva'nca and pay sums on behalf and for
the benefit of Debtor for costs necessary fqr the -protection and preservation of the collateral and other costs that may be
appropriate, In Secured Party's sole discretion, including Put not limited to insurance premiums, ad valorem taxes, and attorney's
fees and legal costs and eXP.anses. Any sums whlciJ may be so paid by Secured P-any and all sums paid for Insurance premiums, as
atorjlsaid, including the costs; expanses, and attorney's fees paid In-any suit affecting said Collateral shall bear Interest from the
dates of such payments at the loan interjlst rata applied to the unmatured principal balance and shall be paid by Debtor to
Secured Party upon demand, and shall be deemed a part of the debt and recoverable as such in all aspects. Any sum to be
reimbursed shall be secured by this Security Agreement.
(10) Debtor shall, at its own expense, do, make, procure, execute and deliver all acts, things, writings and assurances as Secured Party
may at any time request to protect, assure or enforce Its Interests, rights and remedies created by, provided in or emanating from
111) Debtor shall not lend, rent, lease or otherwise dispose of the Collateral or any interest therein except as authorized in this Security
Agreement or In writing by Secured Party, and Debtor shaU keep the Collateral, Including the proceeds thereof, free from unpaid
charges; including taxes, and from liens, encumbrancasand security othEir than that of Secured Party,
11 2) Debtor shall sigil and execute alone or wfth Secured Party any Financing Statement or other document or procure any document,
and pay all connected costs, necessary to protect the security Interest this Security Agreement agairist the rights or Interests
of third persons. Debtor shall pay the costs of lien searches and certificates and all filing fees,. continuation fees, and fees for
certificates of good standing and other information required by Secured Party.
IBC0004 - 06/22/0l
Page 3 of 9
.113}
Debtor shall at all times keep th Collatetal and its proceeds separate and distinct. -. 11 other property of Debtor and shall ke'ep
accurate and complete records' : : .e Collateral and its proceeds. Debtor shall preser. .ie Collateral and p"ay a!! costs necessary to
do so, Including (but not limited feed, rent, storage costs, and expenses of sale. ..,..
{14) If Secured Party should at any' time be of the opinion that the CollaterBI has declined or may decline in value, or is otherwise
insufficient to adequately secure the indebtedness, or should Secured Party deem Itself Insecure as to payment of the Indebtedness,
then Secured Party may call for additional property to be pledged and/or coveted by this Agreement satisfactory to Secured Party,
(1 5) If any Collateral or proceeds Include obligations of third parties to Debtor, the transactions creating those obligations will conform in
all respects to applicable state and federal consumer credit laws,
(16) In the event Debtor or any other person or persons seeks to enjoin Secured Party from taking any action in connection with the
Indebtedness or the enforcement of Secured Party's rights in the Collateral, Debtor hereby agrees to give written notice to the
President of Secured Party, at the address of Secured Party set forth in the "first paragraph of this Security Agreement, or such
other person or address as Secured Party may designate In writing to Debtor, prior to seeking any such injunctive relief,
( 17) Debtor shall indemnify and hold harmless Secured Party from and against any and all claims, losses and liabilities growing out of or
resulting from this Security Agreement (including, without limitation, enforcement of this Security Agreement), except claims,
losses or liabilities resulting from the gross negligence or willful misconduct of Secured Party. Debtor" agrees, upon demand, to pay
to Secured Party the .amount of any and all expenses, including, but not limited to, the fees anQ_,_flisbursements of its counsel and of
8ny e"xperts and which Secured Party may Incur In connection with (a) the preparation; execution, filing, recording
or administratiOn of tt\is Security Agreement or the obtaining of advice from counsel with respect to Its rights and remedies under
this Security A9reement, (b) the custody, preservat;iOn, use or operation of, or the sale of, collection from, or other realization upon,
any Ot the Collateral, {c) the exercise or enforcement of anY of the rights of Secured Party hereunder, {d) the dufense by Secured
Party of any Injunction Proceeding related to the Indebtedness or the Collateral, or (e) the failure by Debtor to perform or observe
any of the provisions hereof. Debtor agrees to pay interest on any expense or other sums due to Secured Party hereunder {save and
except insurance) that are not paid when due at a rate Per annum equal to the highest rate permitted by app!lcable law,
(18) As acjditional security for the lndebtednE!SS, Debtor hereby asf'!lgns, pledges and grants to Secured Party a security interest, a lien
and contractual right of set-off in and to all of the Debtor's money, credits, accounts, securities, certificates and/or other property
now in, or at any time hereafter coming within, the custody or control of Secured Party or any niember Bank or branch Bank of
'International Bancshares Corporation, whe.ther held in a general or special account or deposit, or for safekeepll:'lg or Every
such security Interest lind right of set-off may be exercised without tleinand or notice to D"ebtor. No security interest or right of set-
off shall be deemed to have been waived by any act or conduot on the part Of Secured Party, or any failure to exercise such right of
set-off or to enforce such security interest, or by any delay in so doing. Every right of set-off and se9urity interest shall continue In
full force and effect until such rigbt of set-off or security Interest Is specifically waived or released by an Instrument In writing.
executed by Secured Party. The foregoing is In addition to and not In lieu of any rights of set-off allowed law.
{19) Debtor shall assist Secured Party In complying with the Federal Assignment of Claims Act (and arw successor statutes) and similar
laws to enable Secured Party to becottie an assignee under such Act and otherwise comply with such laws. Debtor shall preserve
the !lability of all account debtors, obligors, and secondary parties Whose obligations ere part of the Collateral. Debtor shall notify
the Secured Party of any change occurring In or to the Collateral, or in any tact,or circumstances warranted or represented by
Debtor in this agreement or furnished to Secured Party, or If any Event of Default occurs.
(20) DEibtor will not allow the Collateral to be affixed to real estate, except goods identified herein as fiXtures,
121) All extended or renewed note(s) w!J! be considered executed on the date of the original note(s).
"(22)' Debtor shall comply with all environmental laws and regulations applicable to the Collateral and the premises in which the Collateral
is located and shall notify Secured Party upon receipt of any notice or other information as to any environmental hazards or violation
of such laws. Secured Party may Inspect all premises in which the Collateral is located and the Collateral as to its and their
compliance with environmental law, Debtor indemnifies and holds harmless Secured Party tor any breach of the. foregoing and for aU
losses, costs, fines, damages, including court costs and attorney's fees, incurr'ed by Secured Party to O.efend Itself, or to protect or
. preserve the Collateral against environmental risks, hazards, tines, and other claims relating to the Collateral.
(23) Without prOviding Secured Party with at least thirty {30) days prior written notice of Debtor's intention to do so, Debtor, untl! the
indebtedness Is paid ih full, agrees that it will not:
a. in one transaction or a sarles of related transactions, merge Into or consolidate with any other entity, sell all or substantially all
of its assets, or in any way jeopardize Its corporate existence,
b, change the state of its incorporation,
c. change its corporate name,
d. change the address and/or location of its Chief ExecutiVe Office;
e. tile a UCC-1 Amendment form, and/or
f. file a UCC-1 Termination form,
(24) Debtor has risk of loss of the Collateral.
125) secured Party has no duty to collect any income accruing on the Collateral or to preserve any rights relating to the Collateral.
B. Special Representations and Warranties."
Debtor warrants and agrees that:
111
12)
13)
If the Collateral Includes inventory:
(a) Debtor will Immediately notify Secured Party of the disposition of any inventory and at Debtor's expense wl!l either assign to
Secured Party a first-priority security interest in any resulting account, chattel paper, or Instrument or deliver to Secured Party
. cash in the amount. of the sale price; Debtor wUI not sell, lease, or otherwise .dispose. of any Collateral exCeJ'lt In the ordinary
course of business without the prier written consent of Secured Party.
(b) Untll default DebtOr may in the ordinary course of busineSs, sell, lease or furnish under contract ofsewiceany of the inventory
normally held by for such purpose, however, that such use of -the lnv.entory shall not be inconsistent with any
other provisions of this Secul'lty Agreement or With the terms or conditions of any policies of insuran_ce thereon. A sale In the
ordinary course of business does not include a tranl!fer.in partial or total satisfaction of a aabt.
!f the Collateral Includes accounts:
Ia) Each account in the Coll-ateral will represent the legally enforceable obligation of third parties and will not be evidenced by
any in"strument ot chattel paper.
(b) The office where keeps its records concerning accounts, if any, is the address of Debtor set forth at the beginning of
If the Co!\aterallnc!udes instruments, chattel paper or documents:
Ia) By d"ellverlng 8. ccpy"ot this Security Agreement to the broker, seller, or Other person In possession of Collateral that Is chattel
paper or document, Security Party will effectively notify that person of -Secured Party's interest in the Collateral. Delivery of the
copy of the Agreement will also r::onstitute Debtor'S instruction to. deliver to secured Party certificates or other
ev!dence of the Collateral as soon as It is available, Debtor w!!l Jmniediately deliver to Secured Party all chattel paper. and
documents that are Collateraf in Debtor's possess !on. If that Collateral is hereafter acquired, Debtor will deliver it to Secured
Party Immediately following acquisition and either en'iorse it to Secui"ed Party's order or give Secur.ed Party appropriate
executed powers. If any instruments, chattel paper, .money or monies, or. documents are, at any time or times, included in the
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{5)
{6)
{7)
(8)
C9!1atera!, whether as prO: . ,s or otherwise, Debtor will promptly deliver the. e to Secured Party upon the receipt thereof
by Debtor; and in flnY event promptly upon demand therefore by Secured L .. y. If necessary, all Collateral will either be
endorsed to secured PartY's order or accompanied by appropriate executed powers.
(b) By means satisfactory to Secured Party, Debtor has perfected or will perfect a security Interest in goods covered by chattel
paper, If an'(, in Collateral.
If the Collateral. propilrty covered by a Certificate of Title: If any certificate title or similar document is, at any time and
pursuant to the laws of any jurisdiction, Issued or outstanding with respect to the Collateral or any part thereof, Debtor will promptly
advise Secured Party thereOf, and Debtor will promptly cause the Interest of Secured Party to be properly noted thereon, and if any
certificate of title or sim.llar document is so or outstanding at the time this Security Agreement is executed by or on behalf of
Debtor, then Debtor shan have caused the interest of Secured Party so to have been properly noted at or before the time of such
execution; and Debtor will further promptly deliver to Secured Party any such .certificate of or similar doc.ument issued or
outstanding at any time with respect to such Collateral.
If the" is or fixtures on real property describ.ed herein: This Security Agreement, upon. flied for in
the real property records of the county wherein such fixtures are situated, shall Qperate also as a financing statement filed as a fixture
filing in accordance with Section 9.402(e) of the Texas Business and Commerce Code upon such Of the Collateral which Is or may
become fixtures.
Debtor has rights or the power to transfer the Collateral and. its title to the Collateral is free of all adverse claims, liens, security
interests and restrictions on transfer or pledge except as created by this Security Agreement.
AU collateral consisting of goods is located solely !n the states and/or states previously deslgnBted and warranted by Debtor to
Secured Party,
Debtor's:
(I) chief executive offiCe is located in the previously designated and warranted by Debtor to Secured Party;
(ii) state of incorporation is the state previously designated and Warranted by oebtor to Secured Party; and
(iii) exact legal name Is as set forth in the first paragraph of this .Security Agreement .
Si:CT!ON VI: EVENTS OFDi:FAlJLT, . .
Debtor shall be In default under this Security Agreement upon the happening of any of the following events or conditions (t'lerein called an
"Event of Default"):
{1)
{2)
{3)
{4)
15)
{6)
{7)
{8)
The failure by Debtor or any other liable party to pay when due any of the Indebtedness either principal or interest, or any "other sum due
under the terms of any Instrument evidencing the Indebtedness.
Default by Debtor In the punctual of any of the obligations, covenants, terrris or provlslohs contained or referred in this
Agreement. '
Any warranty, representatio.n, or statement contained In this SecuritY Agreement or made or furnished to Secured Party by or on behalf
of Debtor or any other person or party In connection with this Security Agreement or to induce Secured Party to make the loans
(described ln Section !!!)proves to have been false in any respect when made or furnished. '
Loss, theft, substantial damage, destruction, sale (except as authorized in this Security Agreement) or encumbrance to or of any'of the
Collateral, or the making of any levy, seizure or attachment thereof or thereon,
Debtor's death, dissolution, termination of existence, insolvency or business failure; the appointment of a receiver of all or anY part of
the prOperty of Debtor; an assignment tor the benefit of.credlt6rs Qy Debtor, the calling of a meeting of creditors of Debtor, or the
commencement of any "proceeding under any bankruptcy or insolvency Jaws by or against Debtor or any guarantor, surety .or endorser
for Debtor; or the occurrence of any of such events described in this part {5) as to any person or party liable for the payment of the
obligations, or any portion thereof.
Any statement of the financial condition of Debtor or of any maker, guarantor, Surety or endorser-of any of the Indebtedness proves to
be false.
The Collateral becomes, In the judgment of Secured Party, unsatisfactory or insufficient In character or value.
Any maker, guarantor, surety or endorser under or with respect to the Indebtedness defaults In any obligation or liability to Secured
Party.
(9) Tlie occurrence of any environmentally hazardous _spill, discharge or,other similar event adversely affecting the Collateral or the
premises In which the Collateral is located, .whether such ev.ent occurs on such premises or on other premises.
(10) .Debtor, or any of them, or any guarantor, falls to timely deliver apy and all financial 'statements, Income tax returns, cash flow
hiformatlon, balance sheets, accounts re"celvable reports, or any other business, tax or financial information requested by Secured
Party.
SECTION VII: SECURED PARTY'S RIGHTS AND REMEDIES,
A. General.
{1)
{2)
/3)
{4)
{5)
Secured Party may exercise the following rights and remedies either before or after an Event of Default:
Secured Party may take contiol of any proceeds of the Collateral.
Secured Party may release any Collateral In Secured Party's possession to any Debtor, temporarily or otherwise.
Secured Party may take control of any funds generated by the Collateral, such as refunds from and proceeds of insurance, and reduce
any part of the Indebtedness accordingly or permit Debtor to use such funds to repair or replace damaged or destroyed Collateral
covered bY Insurance.
s9cured Party mayrequest Debtor from time to time, In Secured Party's discretion to take any action and to execute any instrument
which Secured Party may deem necessary or advisable to accomplish the purposes of this Security Agreement incfudihg, without
limitation, (a) to' ask, demand, collect, sue for, recover, compound, receive and give acquittance and receipts for monies due and to
.. become due under or in respect of any Collateral; (b) to receive, endorse and collect any drafts or other Instruments, documents and
chattel paper In connection with the preceding actions; {c) to file any claims or take any action or institute any proceedings which
Secured Party may deem necessary or desirable for collection of any of the Collateral or otherwise to enforce its rights with respect to
any of the Collateral, and (d) to complete and sign on behalf of Debtor one or more financing statements pertaining to the Collateral
and tile the same in an appropriate location. The powers conferred on Secured Party hereunder are solely to protect its Interest in the
Collateral and shall not impose any duty upon Secured Party to exercise any suc!"J powers. Debtor's appointment of Secured Party as
Debtor's agent is with an Interest and will survive any dlscibil!J:Y of Debtor.
This Security Agreement, Secured Party's rights hereunder and/or the Indebtedness hereby secured may be assigned in whole and in
part from time to time, and In any such case Secured.Party shall be tully discharged from all responsibility with respect to the Collateral
so assigned and the assignee shalt be entitled to all of the rights, privileges and remedies granted in this Security Agreement to Secured
Party to the extent the same are assigned, and Debtor will assert no claim or defenses he may have against Secured Party against the
assignee, except those granted In this Security Agreement. In addition, Debtor waives and will not assert against any claims, defenses
or set-offs which Debtor could assert against Secured Party except defenses which cannot be waived .
IBC0004
Page 5 of 9
(6) Secured Party may enter upon De:,:: ;",.s premises at any reasonable time to inspect t!: and Debtor's books and records
pertaining to the collateral, and Debt<?Yshall assist the Secured Party in making any such inspection.
{7) Secured Party may notify the account debtors or obligors of any accounts, cfiattel paper, negotiable Instruments or other evidence of
indebtedness remitted by Debtor to Secured. Party as proceeds to pay Secured Party directly. Secured Party may contact account
debtors directly to verify Information furnished by Debtor.
(8) Secured .Party may require addition!ll Collateral or reject as unsatisfactory any property hereafter offered by Debtor as Collateral.
(9) Secured Party may designate, ftom time to time, a certain percentage of the Col!ateral as the loan value and require Debtor to maintafn
(10) Secured Party may present for conversion to cash any instrument or Investment security or a combination thereof. But SeCured Party
shall not have any duty to presentfor converslon.any instrument of Collateral in Its possession unless it shall have received from Debtor
detailed written Instructions to that effect at a tlme reasonably far 1n advance of the final conversion date to make such conversion
possioJe. ..
The foregoing rights and powers of Secured Party will be in addition to, and not a limitation upon, any rights and powers of Secured
Party by. law, elsewhere in this Security Agreement, or otherwise.
(11) Secured. Party has _no obligation to. attempt to satisfy the Obligations by collecting them from other person liable for them and
Secured Party m-ay release, modify or waive any collateral provided by any other person to secure any of the Obligations, all without
affecting Secured Party's rights against Debtor waives any right h may have to require Secured Party to pursue any third
person for any of the Obligations.
(12) Secured Party may comply with any applicable state or federal law-requirements in connection with a 'disposition of the Collateral and
compliance will not be considered adversely to affect the com.merclal reasonableness of any sale of Collateral.
(13) If Secured Party 'sells any of the Collateral upon credit, Debtor Will be credited only with payments actually made by the purchaser,
received by Secured Party and applied to the Jndebtedoess of the Purchaser. In the event the purchaser. fails to pay for the Collateral,
Secured Party may resell the Collateral and Debtor shall be credited with proceeds of the sa_le.
(15) Secured Party have no obligation to marshall any assets in favor of Debtor, or against or in payment of:
(16)
{17)
Ur the.Note,
(Ji) aiw of the other Obligations, or
(iii} any other owed to Secured Party' bY. _Debtor or any other person.
This Security Agreement shall bind and shall Inure to the benefit of the heirs, legatees, executors, administrators, successors and
assigns of Secured and shall bind all persons who become bound as a debtor to this Security Agreement.
Secured Party does not to any ass.ignment by Debtor except as expressly In this
B. Remedies in Event of Default
During the existence of any Event of Default, or In the event Secured Party deems Itself insecure In the payment of the Indebtedness, Secured
Party may declare the unpaid principal and unpaid and accrued interest of the Indebtedness immediately due in whole or part, enforce the
Indebtedness, and/or exercise any rights and rer:nedies granted by the Texas Business and Commercial Code or by.'this Security Agreement,
including the following:
111
121
131
141
151
16)
171
{81
191
(10)
require Debtor to deliver to Secured Party all books and records relating tO the Collateral;
require Debtor to assemble the Collateral and make it available to Secured Party at a place reasonably convenient to both parties;
take possession of any of the Collateral and tor this purpose enter any premises where it Is located If this can be done without breach
of the peace and will.npt be gUilty of, and/or held liable for, trespass;
lease, or otherwise dispose of any of the Collateral in accord with the rights, remedies, and duties of a Secured Party under
Chapters 2 and 9 of the Texas Business And Commerce Code after giving notice as required by those chapters; unless the Collateral
threatens to decline rapidly In value, Is perishable, or would typically be sold on a recognized market, Secured Party will give Debtor
reasonable notice .of any public sale of the CoUateral or of a time after which it may be otherwise elsposed of without further notice to
Debtor; in this notice will be deemed reasonable if it Is mailed, postage prepaid, to Debtor at the address specified In this
agreement at least ten days before any pubi1C sale or ten days before the time when the Collateral may be otherwis'a disposed of
without further notice to Debtor. Debtor authorizes Secured Party to disclaim or modify any and all warranties set forth In Section
9.010(d) and stipulates and agrees fhat.such a disclaimer and/or mOdification. will not render the sale commercially unreasonable.
surrender any insurance policies covering the Collateral and recelve the premium:
apply any proceeds from disposition of the Collateral after default in the manner specified In Chapter 9 of the T exes Business And
Commerce Code, including payment of Secured Party's reasonable attorriey's fees and court expenses;
If disposition of the Collateral leaves the Indebtedness unsatisfied, collect the deficiency from all liable parties. Expenses of retaking,
holding, preparing tor sale, selling or the like shall Include Secured Party's reasonable attorney's fees and 'le9a,! costa and/or expenses,
and Debtor to pay such costs, expenses, and fees , plus interest thereon at the maximum rate allowed by applicable law;
Secured Party may retain al! o; part of .the 'Collateral in full lndebtednes.s Section 9.620 of
the Texa,s Business And Commerce Code;
Secured Party may; without demand or notice of any kind, approptlate and apply toward the payment of any sums then owing to
Secured Party and in such order of application as the Secured Party may from time to time elect, any prOperty, balances, credits,
deposits, accounts or of Debtor which for any purpose is In tbe possession or control of the St!CUred Party or any member Bank,
branch Bank or depository institution of International Bancs.hares Corporation; and/or
Secured Party may.remedy any.default without waiving the default remedied and may Waive any default .without waiving any other
priOr or subsequent default.
SECTION VIII: ADDITIONAL AGREEMENT$. .
(1) All notices and other communications to Secured Party hereunder or in connection herewith shall be deemed to have been given when
received by Secured Party in writing at the address first shown hereinabove. Any notice or demand or other communication to Debtor
hereunder or in connection herewith may be given and shall conclusively be deemed and considered to have been given and received
upon the deposit thereof in writing in the United States Mail, duly stamped and addressed to Debtor either at the street address, the
first shown hereinabove, or at the mailing address, It any, given by and/or f-or Debtor at the beginning of this agreement (or at such
other addi-ess as may have been designated most recently in writing by Debtor to Secured Party); provided, however; actual notice to
Debtpr,'however given or received, shall always be effective. when given or received.
(2) A copy of this Security Agreement or any financing statement covering the Collateral Is sufficient and may be filed as a f!nanclng
statement. Information concerning this security Interest may be obtained at the office of Secured Party shown above.
IBC0004
Pag-e 6 of 9
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, .. .
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{3)
{4)
{5)
{6)
{7)
This Security Agreement only _be fnodified or limited by an agreement In writing.
This security interest shall neither affect nor be affected by any other security for. any of the Indebtedness. Neither elrtenslons of any.of
the nor.releases of any of the Collateral sha)l the va!ldl_ty of. thi.!! security interest with reference to any third party,
Additionally, foreclosure of this secUrity Interest by lawsuit does not limit Secured Party's remedies, including the right to sell the
Collateral under the terms of this Secl..!rltv Secured Party shall have the right 'to exercise -all reli1edles at the same or
-times and no remedy be a defense to any other. Secured Party shall have all rights and remedies granted by law or
otherwise fn to thOse provided .in this Security Agreement:
Secured Party may remedy any default without waiving It, No delay by Secured Party in exercising its rights or partially exercising Its.
rights or remedies shall waive furthe! exercise of those remedies or rights. The failure of Secured Party to exercise any remedies or
rights does not waive subsequent exercise of those remedies or rights. Any waiver by Secured- Party of any default shall not waive any
further default. Secured Party may remedy any default without waiving it, Secured Party's waiver of any.rlfi'ht In this SecuritY.
Agre-ement or any default Is binding only If In writing,
Debtor and Secured P-arty Intend that the Indebtedness shall be in :;;trict compliance with appllc"'ble usury laws. If at any tlm.a. Interest
contracted for, charged or received under any lndebtedf!eSll secured by this Security Agreement or otherwise in connection with this
transaction would be usuriouS under applicable law; then regardless of the provisions of thi:;; Security Agreement or any either
documents or instruments evidencing, securing or otherwise executed in connection with any Indebtedness secured by this Security
Agreement or any action or event (including, without limitation, prepayment of principal under the Note or acceleration of matUrity by
Secured Party). which may occur with respect to the Note, It Is agreed that all sums determined to be usurious shall be immediately
credlte'd by Secur.ed Party. to Debtor as. a payment of principal under the Note or if the Note has already been. p1Jid, immSdiately
reh,mdeQ to Debtor. AI! which constitutes Interest under applicable law In connectlon with any Indebtedness secured by
this Security Agreement shalt be amortized, prorated, .allocated, and spread over the full period of time any Indebtedness Is owed by
Debtor, to the greatest extent permissible without exceeding the applicable maximum rate allowed by applicable law In effect from time
to time during such period.
Secured Party may perform any obligatiOn which Debtor falls to perform and Debtor agrees on demand to reimburse Secured Party
Immediately for any sums so paid by Secured Party, Including attorneys' fees and other legal expenses, plus Interest on those sums
from the dates of payment at the rate stated in the Note for matured, unpaid amourits. Any svm to be reimbursed shall be secured by
this Security Agreement. [See Section. IV, (9) for Insurance reimbursements],
(8) This .Security Agreement is being executed and de!ivere_d and is intended to be performed In the State of Texas and shall be construed
and enforced in accordance with the laws of the State of Texas, except to the extent that the Code provides for the, application of the
Jaw of the Debtor States. When the context requires, l,lingula_r nouns and. pronouns Include the plural. The rights of Secured Party
under this Security Agreement shall Inure to the benefit of its successors and assigns. Any assignment of part of the. Jndebtedn6ss and
delivery by' Secured Party of any part of the Collateral wlll fully discharge Secured Party from any and all responsib!Uty for that portion
of the Collateral. Debtor's Indebtedness under this Security Agreement shall bind Debtor's personal representatives, successors and
If Debtor Is more than one, all their representatives, warranties and agreements are joint and several. If any part of this
Security Agreement Is unenforceable, the unentorceablllty of such provision will not affect the enforceability of any other provision
hereof and all other provisions wiU constitute valid provlslor'ls.
SECTION IX: ARBITRATION- THE P-ARTIES FURTHER AGREE As FQLLOWS:
(a) ANY AND ALL-. CONTROVERSIES BETWEEN THE PARTIES SHALL BE RESOLVED BY ARBITRATION IN ACCORDANCE Wm1 THE
COMMERCIAL ARBITRATION RULES OF THE ARBITRATI<;JN A.SSOC\ATION,.IN EFF,GCT AT THE TIME OF flllf\IG; UNq:.ss THE.
COMMERCIAL ARBITRATION RULES CONFLICT WITH THIS PROVISION, AND IN. SUCH EVENT THE TERMS OF THIS PROVISION SHALL
CONTROL TO THE EXTENT' OF THE CONFLICT. ANY ARBITRATION HEREUNDER SHALL BE BEFORE. AT LEAST THREE NEUTRAL
ARBITRATORS ASSOC!ArED WITH_.THE AMERICAN ARBITRATION ASSOCIATION AND SELECTED IN" ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES .OF THEAMERICANARBITRATION ASSOCIATION. FAILURE OF ANY ARBITRATOR TO DISCLOSE All FACTS WHICH
MIGHT TO AN OBJECTIVE OBSERVER CREATE A REASONABLE IMPRESSION OF THE ARBITRATOR'S PARTIALITY, AND/Oi:t MATERIAL
ERRORS OF LAW SHALL BE GROUNDS (IN ADDITION TO ALL_ OTHERS] FOR VACATUR OF AN AWARD RENDERED PURSUANT TO THIS
AGREEMENT.
!bl THE AWARD OF THE ARBITRATORS, oR A MAJORITY oF THEM, SHALL BE FINAL, AND JUDGMENT UPoN THE AwARe RENDERED
MAY BE ENTERED IN ANY COURT, STATE OR FEDERAL, HAVING JURISDICTION. THE ARBITRATION AWARD SHALL BE IN WRITING AND
SPECIFY THE FACTUAL AND LEGAL BASES FOR THE AWARD. UPON THE REQUEST OF ANY PARTY, THE AWARD SHALL INCLUDE
!cl ARBITRABLE DISPUTES INCLUDE ANY AND ALL CONTROVERSIES OR CLAIMS BETWEEN THE PARTIES OF WHATEVER TYPE OR
MANNER, INCLUDING WITHOUT LIMITATION, ANY CLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, ALL PAST, 'PRESENT

SPECIFICALLY INCUJOING ANY ALLEGED TORT COMMITTED BY ANY PARTY.
ldi THE PARTIES SHALL ALLOW AND PARTICIPATE IN DISCOVERY IN ACCORDANCE WITH THE FEDERAL RULES OF CIVIL PROCEDURE
FOR A PERIOD OF ONE HUNDRED TWENTY (120) DAYS AFTER THE FILING OF THE ORIGINAL RESPONSIVE PLEADING. DISCOVERY MAY
CONTINUE THEREAFTER AS AGREED BY THE PARTIES OR AS ALLOWED BY THE ARBITRATORS, UNRESOLVED .DISCC'NERY DISPUTES
SHALL BE BROUGHT TO THE ATTENTION OFTHE ARBITRATORS BY WRITTEN MOTION FOR PROPER DISPOSITION, INCLUDING RULING ON
ANY ASSERTED OBJECTIONS, PRIVILEGES,.AND PROTECTIVE ORDER REQUESTS AND AWARDING REASONABLE ATTORNEY'S FEES TO THE
PREVAIL.JNG PARTY.
(e) IN THE EVENT THE AGGREGATE OF AlL AFFIRMATIVE CLAIMS ASSERTED EXCEED $500,000.00, EXCLUSIVE OF INTEREST AND
ATTORNEY'S FEES, OR UPON THE WRITTEN REQUEST OF ANY PARTY, {1) PRIOR TO THE DISSEMINATION OF A LisT OF POTENTIAL
ARBITRATORS, THE AMERICAN ARBITRATION ASSOCIATION SHALL CONDUCT AN lfli PERSON ADMINISTRATIVE CONFERENCE WITH THE
PARTIES AND THEIR ATTORNEYS FOR THE FOLLOWING PURPOSES AND FOR SUCH ADDITIONAL PURPOSES. AS THE PARTIES OR THE
AMERICAN ARBIT.Rfl.TIPN ASSOCIATION MAY DEEM APPROPRIATE, (AI TQ OBT_AJN ADDITIONAL. INFORMATION THE NATURE AND
MAGNITUDE O_F THE DISPUTE AND THE ANTICIPATED LENGTH OF HEARINGS AND SCHEDULING; (B) TO DISCUSS THE VIEW OF THE
PARTIES ABOUT ANY TECI-\NICAL ANDJOR OTHER SPECIAL QUALIFICATIONS OF THE ARBITRATORS; AND ICJ TO CONSIDER, WHETHER
MEDIATION OR OTHER METHODS OF DISPUTE RESOLUTION MIGHT BE APPROPRIATE. AND {2) AS PROMPTLY AS PRACTICABLE AFTER THE
SELECTION OF THE ARBITRATORS, A PRELIMINARY HEARING SHALL BE HELD AMONG THE PARTIES. THEIR ATTORNEYS AND THE
ARBITRATORS. WITH THE AGREEMENT OF THE ARBITRATORS AND THE PARTIES, THE PRELIMINARY HEARING MAY BE CONDUCTED BY
TELEPHONE CONFERENCE CALL RATHER THAN IN PERSON. AT THE PRELIMINARY HEARING THE MATTERS THAT MAY BE CONSIDERED
SHALL INCLUDE, WITHOUT LiMITATION, A PREHEARING SCHEDULING ORDER ADDRESSING !A) EACH PARTY'S DUTY TO SUBMIT A
DETAILED STATEMENT OF CLAIMS. DAMAGES AND!OR DEFENSES, A STATEMENT OF THE ISSUES ASSERTED BY EACH PARTY AND ANY
LEGAL AUTHORITIES THE PARTIES MAY WISH TO BRING TO THE ATTENTION OF THE ARBITRATORS: {B) RESPONSES AND!OR REPLIES TO
THE PLEADINGS FILED IN COMPLIANCE WITH SUBPART 2{A); {Cl STIPULATIONS REGARDING ANY UNCONTESTED FACTS: (0) EXCHANGE
AND PREMARKJNG OF ALL DOCUMENTS WHICH EACH PARTY BELIEVES MAY BE OFFERED AT THE FINAL ARBITRATION HEARING: IE) THE
IDENTIFICATION AND AVAILABILITY OF WITNESSES, INCLUDING EXPERTS, AND SUCH ADDITIONAL MATTERS REGARDING WITNESSES
INCLUDING THEIR BIOGRAPHIES AND A SHORT SUMMARY OF THEIR EXPECTED TESTIMONY, !F) WHETHER A STENOGRAPHIC OR OTHER
OFFICIAL.RECORD OF THE PROCEEDINGS SHALL BE MAINTAINED; AND (G) THE POSSIBILITY OF UTILIZING MEDIATiciN OR OTHER
ALTERNATIVE METHODS OF DISPUTE RESOLUTION.
{f) FOR PURPOSES OF THIS PROVISION, "THE PARTIES" MEANS DEBTOR AND SECURED PARTY, AND EACH AND ALL PERSONS AND
ENTITIES SIGNING THIS AGREEMENT OR ANY OTHER AGREEMENTS BETWEEN OR AMONG ANY OF THE PARTIES AS PART OF THIS
TRANSACTION. "THE PARTIES" SHALL ALSO INCLUDE INDIVIDUAL PARTNERS, AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
- 06/22/0l
Page 7 of 9
AND!OR REPRESENTATIVES OF ANY PAPry TO SUCH DOCUMENTS, AND SHALL INCLUD..- W OTHER OWNER AND HOLDER OF tHIS
AGREEMENT. ' .
(g) THE PARTIES SHALL HAVE THE RIGHT TO INVOKE SELF HELP REMEDIES (SUCH AS SET-OFF, NOTIFICATION OF ACCOUNT DEBTORS,
SEIZURE AND/OR FORECLOSURE OF COLLATERAL, AND NON..JUDICIAL SALE OF PERSONAL PROPERTY AND REAL PROPERTY COLLATERAL)
BEFORE, DURING OR AFTER ANY ARBITRATION AND/OR REQUEST ANCILLARY OR PROVISIONAL JUDICIAL REMEDIES (SUCH AS
GARNISHMENT, ATTACHMENT, SPECIFIC PERFORMANCE, RECEIVER, INJUNCTION OR RESTRAINING ORDER, AND SEQUESTRATION!
BEFORE OR AFTER ANY ARBITRATION. THE PARTIES NEED NOT AWAIT THE OUTCOME OF THE ARBITRATION BEFORE USING SELF-HELP
REMEDIES. USE OF SELFHELP OR ANCILLARY AND/OR PROVISIONAL JUD.ICIAL REMEDIES SHALL NOT OPERATE AS A WAIVER OF EITHER
LAW St'IALL BE AVAILAJ3LE FROM THE ARBITR.ATORS.
{h) THE PAR-TIES AGREE THAT ANY ACTION REGARDING ANY CONTROVERSY BETWEEN THE PARTIJES SHALL EITHER BE BROUGHT BY
ARBITRATION, AS DESCRIBED HEREIN, OR BY JUDICIAL PROCEEDINGS, BUT SHALL NOT BE PURSUED SIMULTANEOUSLY IN DIFfERENT OR
ALTERNATIVE FORMS. A TIMELY WRITTEN NOTICE OF INTENT TO ARBITRATE PURSUANT TO THIS AGREEMENT STAYS AND/OR ABATES
ANY AND ALL ACTION IN A TRIAL COURT, SAVE AND EXCEPT A HEARING ON A MOTION TO COMPEL ARBITRATION AND/OR THE ENTRY
OF AN ORDER COMPELLING ARBITRATION AND STAYING AND/OR ABATING THE LITIGATION PENDING THE FILING OF THE FINAL AWARD
OF THE ARBITRATORS. ALL REASONABLE AND. NECESSARY ATTORNEY'S FEES AND ALL TRAVEL COSTS SHALL BE AWARDED TO THE
PREVAILING PARTY ON ANY MOTION TO COMPEL ARBITRATION AND MUST BE PAID TO SUCH PARTY WITHIN TEN {10) DAYS OF THE
SIGNING OF THE ORDER COMPELLING ARBITRATION. .
{II ANY PARTY SHALL SERVE A WRITTEN NOTICE OF .INTENT TO ARBITRATE TO ANY AND ALL OPPOSING PA:RTIES WITHIN
360 DAYS AFTER DISPUTE HAS ARISEN. A DISPUTE IS DEFINED TO -HAVE ARISEN ONLY UPON RECEIPT OF SERVICE OF-JUDICIAL
PROCESS, INCLUDING SERVICE OF A COUNTERCLAIM, FAILURE To SERVE A WRITTEN NOTICE OF INTENT To ARBITRATE WITHIN THE TIME
SPECIFIED ABOVE SHALL BE DEEMED A WAIVER Of THE AGGRIEVED PARTY'S RIGHT TO COMPEL ARBITRATION OF SUCH CLAIM. THE
ISSUE OF WAIVER PURSUANT TO THIS AGREEMENT IS AN ARBITRABLE DISPUTE.
{j) ACTIVE PARTICIPATION IN PENDING LITIGATION DURING THE 360 DAY NOTICE PERIOD, WHETHER AS PLAINTIFF OR DEFENDANT, IS
NO:r A WAJVER OF THE RIGHT TO COMPEL ARBITRATION. ALL DISCOVERY OBTAINED IN THE PENDING LITIGATION MAY BE USED IN ANY
SUBSEQUENT ARBITRATION PROCEEDING. . .
{kl THE PARTIES FURTHER AGREE THAT {1) NO ARBITRATION PROCEEDING HEREUNDER SHALL.BE CERTIFIED AS A CLASS ACTION OR
PROCEED AS A.CLASS ACTION, OR ON A BASIS INVOLVING CLAIMS BROUGHT IN A PURPORTED REPRESENTATIVE CAPACITY ON BEHALF
OF THE GENERAL PUBLIC. OTHER CUSTOMERS OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY SITUATED AND {ii) NO ARBITRATION
PROCEEDING HEREUNDER SHALL BE CONSOLIDATED WITH, OR JOINED IN ANY WAY WITH, OTHER ARBITRATION PROCEEDING.
til ANY ARBITRATOR SELECTED SHALL BE KNOWLEDGEABLE IN THE SUBJECT MATTER OF THE DISPUTE. EACH OF THE PARTIES SHALL
PAY AN EQUAL SHARE OF THE ARBITRATION COSTS, FEES, EXPENSES; AND OF ARBITRATORS' FEES, COSTS AND EXPENSES.
(m) ALL STATUTES OF LIMITATIONS WHICH WbULD OTHERWISE BE APPLICABLE SHALL APPLY TO ANY AND ALL CLAIMS ASSERTED
IN ANY ARBITRATION PAOGEEDING HEREUNDER AND THE COMMENCEMENT bF ANY ARBITRATION PROCEEDING TOLLS SUCH STATUtES
OF LIMITATIONS.
{nl IN ANY ARBITRATION PROCEEDING SUBJECT TO THIS PROVISION, THE ARBITRATORS, OR MAJORITY OF THEM, ARE SPECIFICALLY
EMPOWERED TO DECIDE tBY DOCUMEf\ITS ONLY, OR WITH A HEARING, AT THE ARBITRATORS' SOLE DISCRETION) PRE-HEARING MOTIONS
WHICH ARE SUBSTANTIALLY SIMILAR TO PRE-HEARING MOTIONS TO DISMISS AND MOTIONS FOR SUMMARY ADJUDICATION,
{ol THIS ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION, AMENDMENT, OR EXPIRATION OF THE AGREEMENTIN WHICH
THIS PROVISION IS CONTAINED, UNLESS ALL OF THE PARTIES EXPRESSLY AGREE IN WRITING.
(p) THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT EVIDENCES A TRANSACTION INVOLVING INTERSTATE COMMER"cE. THE
FEDERAL ARBITRATION ACT SHALL GOVERN THE JNTEAPRETATION, ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION
CLAUSE OF THIS AGREEMENT. .
{ql THE ARBITRATORS, OR A MAJORITY OF THEM, SHALL: AWARD ATTORNEY"S FEES AND COSTS TO THE PREVAILING PARTY
PURSUANT TO THE TEAMS OF THIS AGREEMENT.
(r) NEITHER THE PARTIES NOR THE ARBITRATORS MAY DISCLOSE THE EXISTENCE, CONTENT, OR RESULTS OF ANY ARBITRATION
HEREUNDER WITHOUT PRIOR WRITTEN CONSENT OF ALL PARtiES AND/o"R COURT ORDER.-
{s) VENUE OF ANY ARBITRATION PROCEEDING HEREUNDER SHALL BE IN BEXAR COUNTY, TEXAS.
SECTION X. Miscellaneous,
(a) Securjtv Interest AbSolute.AI! rights of Secured P;uty and "the security Interests be absolute and unconditional Jrrespe"ctive
of:
(l) any change In the time, manner, amount or place of payment of,' or in"any oiher term of, all or any of the Indebtedness, or any other
amendment or waiver of or any consent to any departure from the Promissory Note or any other loan Document;
{li) any exchange or release or nbnperfectlon of all or any part of the Collateral or any other collateral, or any release from, amendment to,
waiver Of or consent to departure froni any guaranty, for all or any of ttlB IndebtednesS; oi"
(iii) to th.a fullest extant permitted by law, any other circumstanCes which might otharWise constitute a defense available to, of a discharge of
the DebtOr or a thlrd.party pledgo(.
{b) !ndemnifjcatlon. The Debtor to indemnify the Secure"d Party and hold the Secured Party harmless fiom and against any and all
liabilities, obligations. losses, damages, pan&lties, actions, judgments. suits, costs, expenses or disbursements of any kind of nature whatsoever
which may be ito posed on, incUrred by, or asserted against the Secured Party "in any way relating, In any way arising out of or In connection with
this. Sei:urlty Agreement, the l.,oan Documents .or the transaCtions cont"emplated hereby" or thereby than thoSe arlslrig out of 'the Secured
P.arty'S breach, .default, negligence or willful mlscondl!ct in its. obligations under this Security Agreement or the' Loan Witt\out
limftation of .t.h"e foregoing, the Debtor will reimburse thB Secured Party for all expenses {including BJ!penses" for legal Services of every kind} Of, or
Incidental to, "the neg'otiation of, entering irito and enfOrcement of any of the provlslonsnereof and Of the Indebtedness, and any actual or
attempted sale, lease other disposition of, and any exchange, enforcem"ent, collection, cotl1proffiise or settlement Ot any Of the Collateral and
or ass6r't:ing the rights and claims of the" Secured Party In i-espec't. thereof, and for the car6 of the Collaierill and "defending or asserting
the rlglit!! and claims of the e(fured Party In respect thera"Of, b"y litigation or otherwh!le; including expense "of irisurii"ncO;"and all Such eXPenses shall
be the qebtor's h1debtednesS,
IBC0004 - 06/22(02
Page 8 of 9
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SECTION X!; NO ORAl AGREEMENTS
THIS WRITTEN AGREEMENT REPRESENTS THE FINAL MREEMENT BEJWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR CONTEMPORANEOUS OR SUBSEOUFNT ORAL AGREEMENT OF T-Hf PARTIES
THERE ARE NO UNWRITTEN ORAl AGREEMENTS BETWEEN THE PARTIES.
Dated DECEMBER Cj 2005
DEBTOR a Texas 1 ited partnership
By TA nt LLC, ,
ited
DEBTOR:
By:
DEBTOR:
By:
DEBTOR:
. By:
SECURED PARTY
Name:
Signature
?!!ft< <-/C. sot?J
Title:
DEBTOR:
company, General Partner
By:
DEBTOR:
By
DEBTOR:
By:
DEBTOR:
By:
Page 9 of 9
IBC0004 -
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A.
B.
EXHIBIT "A"
Equipment. All equipment ofDebtor now or hereafter acquired by Debtor, including
replacements for and improvements of the equipment, whether now owned or at any
time hereafter acquired or made, together with all tools, parts and appurtenances now
or at any thner hereafter used in and together with all proceeds of the equipment
described or referred to above, including insurance payable by reason of loss or
by Secured Party, including any refunds or unearned premiums in connection with
any cancellation, adjustment or tennination of any such policy of insurance.
Inventonr. All inventory ofDebtor, whenever acquired and whether now or hereafter
existing, including but not limited to all goods, wares and merchandise intended for
sale or lease by Debtor or to be furnished by Debtor, under contracts of service and
or usable in cmmection with 'the manufacturing, processing, packing, shipping,
merchandise; all certificates of title, manufacture's statements of origin and other
documents arising from or related to such inventory; and all accessions, attachinents
and other additions to, substitutes for, replacements for, improvements to and returnS
C. Fixtures.
(1) All of the property, personal or otherwise, whether now existing or hereafter
arising, existing or created, now or hereafter attached to or incorporated into
or used in or about the Debtor's premises, including all furniture, appliances,
furnishings, goods, equipment, and macmnery owned by Debtor and other
such property or now or hereafter affixed, attached or related to such property
or used in connection therewith, and all replacements, substitutions and
(2) All accessories, attachments and other additions to, substitutes and
replacements for, and improvements of, the property described in (a) above,
whether now ovmed or at any time hereafter aCquired or made, together with
all tools, parts and appurtenances now or at any time used in connection
therewith;
of, and additions, improvements and accessions to, all and any of the property
described above, excluding proceeds used to replace worn-out or obsolete
equipment or other property.
D. Accounts Receivable. All accounts and chattel paper of Debtor, whenever acquired
and whether now or hereafter existing, including, but not limited to, accounts and
chattel paper which arise out of: (i) the sale or other disposition of goods; (ii) the
furnishing of services; (iii) the furnishing of, the use of, or the lease of any of the
relating_to, resulting from or arising in connection with any such accounts and/or
chattel paper.
E. General Jntancibles. All General Jntangibles of Debtor, whenever acquired and
whether now or hereafter existing, and all proceeds thereof.
Together with all books, records, files, computer software, documents and other information
pertaining to, and all containers and packages for, the property described or referred to in subsections
000.00 Note-Staci Properties Ltd. 3/2/2005 Pg 1 of 13
REAL LIEN NOTE
Amount: $ 2 ,400, 000.00 Date: March
z. ' 2005
For value received, the receipt of whic:h is hereby acknowledged., the undersigned., jointly and severally, (hereinafter
"Borrower", whether one or more) promise to pay to .the order Of INTERNATIONAL BANK OF COM:MERCE (hereinafter
"Lender"), at 130 E. Travis, San Antonio, Bexar County', Texas 7"8205, thtiswn of Two Million Four Hundrea
Thousand and No/100
Dollars ($ 2 400,000. 00 ), in legal and lawful money of the United States of America, with interest as it
accrues on the ding principal balance from date of advance of principal until paid.
X
4. 75% __f
X
The interest rate shall be . wnt per annum; or
The interest rate shall be floating at : 25% 1(3 . percent per annum above the New York
Prime Rate ("Prime Rate") (described"below) as it fluctuates from tinie to time; provided.,
however, that fu no event shall the rate of interest (plus said amount in excess thereof, .if ally) to be paid oll the uti.paid
pnnctpal of tillS NOte be tess Ulan1-pet" annum, nor mol'e than the/maximUm legal r.ate
allowed by applicable laW. The starting interest rate on this Note shall be 5 75% ' percent Per
annum. The rate of interest due hereunder shall be recomputed as of the date of any change in the Prime Rate.
' The INTERNATIONAL BANK OF COI\1MERCE PRIME RATE shall mean the arinuallending rate of interest
from time to time by Lender, as its prime rate.
The NEW YORK PR.Th1E RATE shall mean .the aJ?lluallending rate of interest annOunced from time to time by
JPMorgan Chase & Co., Ne.wYork, New York, as its prime rate. If the New York Prime Rate bas been selected as
the Prime Rate "and if, thereafter, a prime rate is_ not announced bY JP Morgan Chase & Co., New York, York,
then the International Bank of Commerce Prm:te.Rate, minus one percent (1%) shall be the Prime Rate.
Use of either of said Prime Rates is not to be constrUed as a waiTanty or representation that sUch rates are more favorable than another
:rate or index, that rates on other loans or credit facilities may not be.bas.ed on other indices or that rates on loans to others may not be
made below such prime rate.
The interest is calculated on a 360Mday factor applied on a 365-d.ay year, ru: a 366Mday year, in the event that the year is a leap year, on
the unpai4 principal.to the date of each illstalhnent paid arid the pa'yillent made credited first to the discharge of the intere_st aCcrued and
balance to the reduction of the principal. Provided., however, that in the event the interest rate reaches the maximum rate allowed
. by applicable law, said maximUm legal rate shall he computed on a full calendar year 365/365 days basis or on a 366/366 days basis, in
the event tb.at year iS a year. Thiiutefest charged and herein not allowe4 by law.
. . I . . .
Maturea lWpaid amounts will bear interest computed on a full calendar year 365/36fi days-basis or on a 366/366 da)rs basis, in the even.t
that the year is a leap year, at the highest legal rate of interest allowed by Texas law, unless Federal law allows a hlf9ier interest rate; in
which case, Borrower agrees to pay the rate allowed by Federal law. If "applicable laW does not set a maxin'n.im rate of interest for
matured unpaid amounts, then BoiTower agrees that the maximum rate for such amounts shall be eighteen percent (18%) per annum.
. . . ' .
To the extent allowed by law, as tlie late payment charge under this Bank may hi its Sole (i) lm.crease the mierest
on the principal portion of an)' payment amount that-is not received by the payment due date tO the maximum: ;rate allowed by law.
computed on a full calendar year basis from the payment due paid, or (ii), shotild anypayment not be made withill: ten (10)
::. days of the due date, requi:i'e BorroWer to pay a one time "late charge" per late payment equal to five percent (5%) of the amount of the
past due principal. and interest of such payment, with a m..ini.Q:tum of $10.00 "and a maximum of$1,500.00 per tate payment. The "late .
charge" may be assessed without notice, and shall be immediately due and payable. This provision is inapplicable if the outstanding
indebtedness under the Note is accelerated. No late charge will be assessed on any paYment when the only is due to late
charges assessed on earlier payment and the payment iS otherwise a full payment
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The outstanding and unpaid principal of this Note and all accrued and unpai-d interest are payable as follows:
Number of Payments Frequency Amount ofPaynients When Paymeuts are Due
See Allongeattached hereto-and made a part hereof tor all __
Final Maturity Date:

amortize tb.; principal of this note on the stated maturity Without any' "Balloon'' or 1.mec[ual payment.
THIS OBLIGATION HAS THE FOLLOWING DEMAND FEATURE:
At any time, and froril time to time, Whether or not prior to and/or . said schedule payment Lender may, in its sole and
absolute discretion, reschedule rearrange and/or accel , whole or ill part, the oi1tstauding and unpaid principal balance, and all
accrued and Unpaid inte!est under this Note ower agrees and promises to all accelerated priuyipal and all ac_crued imd
unpaid interest on such princ' notice of intent to accelerate shall be r.equired and BOrrower expressly waives any right
to notice ofLende ' to accelerate. The foregoing right to make demand for im..rl,lediate payment of this Note, in whole or in part,
b 1sed by Lender for any reason whatsOever, or not Borrower is in in adv
1
;mce of its Scheduled
T11e failurr of Borrower to pay any of the payment(s) of principal or any interest thereon, when the same is due and
payable, sli::ill permlt
1
Lender at its option, to acce!erate the maturity, without notice to Borrower, of all, or any portion, of the remaining
unpaid prip.cipal outstancling. and all accrued and unpaid interest of this Note, whereupon the same shall be due and payable
immediately. \
Leneler, et its dii!ere!':i6fl:; flcelme ttB: sms e ,,m:g h) Bone ,;et (hie:ltt&:::g etleleisers ftft61et gMzantargJ :imtttetliateey ffi:te thtdptl)al:Jle
upOn be adoetsei,. afceted zclhx i:asectlle 1ry tpasan of fltt)' J::"Ofl:tedal ehMgie i:a.lhij efl?011oww 's (ioele:ehng. 1l11Y
endarser:!> :imfb'ct gtta4Btltettl1 ftCt ;; e1f:h, 01 by xeasen efilii) ot:hw material chqe of condition whetbez 01 not des wilted herein.
Borrower intend that the loan evidenced by this Note (the "Loan") shall be in. strict with usury laws.
If at any time any interest contracted for, charged or received under this Note or otherwise m. connection with the Loan would be
usurious under appliCable law, then regardless of the provisions of this Note or the documents and instruments evidencing, securing or
otherwise in connection with the Loan or any or event (including, without limitation, prepayment of princiPal hereunder
or acceler<ition of maturity by the Lender) w.Iiic4 may occur with respect to this Note or the Loan, it is.agreed that all sums determined
to be usurious shall immediately credited by the Lender."as a payment of principal heretmder, or if this Note has already been paid,
immediately. refunded to the All compensation which constitutes interest un9.er applicable law in connection with tbe Loan
shall be ru::i10rtized, pforated, allocated and spread over the full p_eriod. oftime any indebtedness is owing by Borrower, to the greatest
extent penpissible without expeeding the appl_icable maximum rate allowed by applicable law in effect from time to time during such
period. J
In no event,shall the provisions of of. the Texas Finance Code, (which regulates certain revolving loan accounts and
revolVing tri-party adcounts) apply to the Loan. . .
. lN THE AJ, JT!lM, ITEMS, TERMS OR PROVISIONS CONTAINED lN THIS INSTRUMENT ARE lN CONFLICT
WITH1:1l:pLAWS OF TilE STATE OF TEXAS, OR FEDERAL LAW, TillS JNSTRUMENT SHALLBEA,FFECTED ONLY AS TO
ITS APPLICATION TO SUCH ITEM, ITEMS, TERMS OR PROVISIONS, AND SHALL IN ALL OTHER RESPECTS REMAIN lN

EXCESS OFTIIERlrrEALLOWEDBYTHELAWS OF THE STAlE OF TEXAS OR FEDERAL LAW, IF SUCHLAWPERMITS
A GREATER RAIE(OF INTEREST. TilE lNTENTION OF TilE PARTIES BEING TO CONFORM STRIC1LY TO TilE USURY
LAWS AS NOW OR HEREINAFTER CONSTRUED BY THE COURTS HAVING JURISDICTION.
THE BOl\ROWER, ENDORSERS, SURETIES, GUARANTORS AND ALL PERSONS TO BECOME LIABLE ON TIIIS NOTE
(TilE "OBLIGORS"). HEREBY, JOINTLY AND SEVERALLY, WAJVE. EXPRESSLY ALL NOTICES OF OvERDUE
INSTALLMENT PAYMENTS, AND DEMANDS FOR PAYMENT TiiEREOF, NOTICES OF INTENTION TO ACCELERATE
MATIJRITY,NOTICES OF.ACTUALACCELERATION OF MATIJRITY, PRESENTMENT, DEMAND FOR PAYMENT, NOTICES
OF DISHONOR, PROTEST, NOTICES OF. PROTEST, AND DILIGENCE lN COLLECTION HEREOF. EACH OBLIGOR
CONSENTS. THAI THE LENDER OR OTIJER HOLDER OF THIS NOTE MAY AT ANY TIME, AND FROM TIME TO TIME.
UPON REQUEST OF OR BY AGREEMENT WITH ANY OF THEM, RENEW THIS NOTE AND/OR EXTEND TilE DATE OF
MAT1JRI1Y HERE<:)F OR CHANGE THE TIME OR MEmOD OF PAYMENTS WITHOUT NOTICE TO ANY OF TilE OTIJER
OBLIGOJ,tS, MNqlRS, SURETIES OR ENDORSERS, WHO SHALL REMAJN BOUND FOR THE PAYMENT HEREOF.
OBLIGORS WANE EXPRESSLY TilE LATE F!LlNG OR ANY SUIT OR CAUSE OF ACTION HEREON, OR ANY DELAYJN
THE HANDLJNG OF ANY COLLAlERAL. OBLIGORS AGREE THAT HOLDER'S ACCEPTANCE OF PARTIAL OF
DELJNQUENT PAYMENTS. OR FAILPRE OF HOWER TO EXERCISE ANY RIGHT OR REMEDY CONTAINED HEREIN OR
IN ANY J\;rSTRUMENT GIVEN AS SECURITY FOR TilE PAYMENT OF THIS NOTE SHALL NOT BE A WAIVER OF ANY
OBLIGATION OF THE OBLIGORS OR CONSTITUTE WANER OF ANY PRIOR OR SUBSEQUENT DEFAULT. TilE HOLDER
MAY REMEDY AJ!N DEFAULT WTTIIOUT WAIVJNG THE DEFAULT REMEDIED AND MAY WAIVE ANY DEFAULT
WITHOWWAIVING ANY OTHER:PRIOR OR SUBSEQUENT. DEFAULT .
. As thisiNote, and all oth.er which ma;y .at any time be by Borrower (and any endorsers
guarantorS hereof) to Lender or other Lender hereof, Borrower (and any endorsers and/or guarantors hereot), gives. to Lender or other
Holder heteof, a security interest, a lien and contractual right of set-offin and to all of the Borrower's (and any endorsers and/or
guarantors: nioney, credits, deposit accounts, accounts and/orotherproperty pow in, or at any time hereafter coming within, the
qtstody or Control of Lender Or other Holder hereof, or any member bank Or branch bank o{Intemadonal Bancshares Corporation.,
in genefal or special account or deposit, or for safekeeping or otherwise. Every such security inter_est and tight of set-off
may be exrrcised wi{hout demand or n9tice to Borrower (and miy endOrsers and/or guarantors hereof). No security interest or right <?f
set-offto security interest shall be.deemed to have. been waived by any act Ol' conduct on the part of the Lender, or by any
failure to s*ch right of seto:-off or to enforce S"!lch security interest, or by any delay .in so doing .. Every right of set-off and
Security interest shari continue in full force and effect tmtil right -of set-off .ot sec1ltity interest is specifically waived Or released by
,ffi.l in writing executed by i.end.er .. The .is in addition to and not in lieu of any rights of set-off allowed by law.
ln. With transaction between and at any time in the past, present or future. in event
individually or jointly with others, has granted or grants Lender a lien on any real and/or personal property, Borrower agrees that the
lien on such real and/or personal property to the extent of Borrower's interest shall also secure the indebtedness 9fBorrower to.Lender
evidenced .by this Ni>te and all :renewals, and "modifications hereof.
Financing At Lender's request Debtor will promptly sign aU otller documents, including statements alld.
certificates of title, to perfect, protect, and cohtinue Lender's security interest in the Collateral at tbe sole cost of Borrower. Debtor
hereby authorizes Lbnder to file a Financing Statement, an Amended Financing Statement and a Continuation financing Statement
(collectivelY referre4 to as the "Fina.ncing Statement") describing the "Where .Collateral is in Q1e possession of a third party.
Debtor Will join notifymg the third party ofLen.der's s.ecurity interest and a Control Agreement from the third
P.arty that it is holding the collateral f01; fue benefit of Lender.
. I . . . . . . . .
If this Note; or any part hereof, js not paid according to its terms, is placed in the. hands of an attorney for collection, or is collected
Probate. BaTikruptcy or other judicial or non-judicial proceeillngs, whether matured by expiration of time or by the exercise of
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the option given to the Lender to mature it, the Borrower all now or hereafter personally liable hereonllow agree to and shall
pay an equal to Rnd attorney's fees and associated cos.ts for collection. Said attorney's fees and
of J?Ollection, once liquidated an!f Raj d. by' Lender or otherwise allowed by la""! will intere.st at the rate of interest applied to
matured and pas_t.:-due of this Note ,as s11ch rate may change fr_om time to tffi;te from the date until repaid. .
In the event any legal action or proceeding, by arbitration or othe.rwi.se, is commenced .in connection with the of, or
declaration of rights under this Note and/or any instrument or written agreement required or delivered under or pursuant to the terms of
this Note, and/or any controversy or claim, whether sounding in contract, tort or statute, legal or equitable, involving in any way the
financing or the the: subject of this Note, or any other proposed or or exteus;on of the prevailing party
shall be entitled to recoyer: reasonable and necessazy attorney's costs (includ}ng costs for-in-house legal
services). costs, expenses, expert witness fees and c.osts, and other necessary disb\lfsements made in connection with any such action or
proceeding, in the ammmt determined b)r the \
Lender, in its sole discretio.n and wifuout obligatiOn cinLender to do so, may SUI,D.S on behalf for the benefit of
Borrower for costs necessary for the and preseryation O_f the Collateral :;ecu0ng t.llis Noje arid .costs .that may be
appropriate, in Lender's sole but not limited to insurance premiums;ad Valorem taxes, and 'ttomey's fees. Arly
sums whiCh may be paid out by Lender and all Sums paid for"insurance premiums, as i.nPiudiug costs, expenses and
attorney's fees paid in any sUit affecting said property_ When necessary to protect the lien hereOf" shan bear intereSt from the dates of such
payments at the "interest rate applied to. the matirred.and past-due principal b.alance of this .Note and shall be p8id bY, Borrower to Lender
upon the same place at which Note is payable, aD.d shall Pe .a P.arJ: of and recotera_ble as such in all
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Borrower reserves the right to prepay, prior to maturity, all or any part ?.f the _principal of_ this Note without I'enalty, and interest shall
immediately cease on any amount so prepaid. All prepayments shall be applied to the h!st maturing instaliments without
interrupting the regular .. '
. -Any if permitted by Lender, by any Other person, 'or any. entity without the
express consent of Lender, shall not.release.the liability ofBn:rrower fQr the of this Note.
Ill the. event that the hereinafter. described real property is sold, or otherwise of without the pri9r consent of
the Lender, the maturity of this Note may, at "!4e option ofthC Lender, be accelerated and Lender maY immediately. deman9- payment of
the then outstand.!ng sum together with. all and unpaid _due thereon. . . .
Borrower and Lender hereby and agree that in. the event of llil:der this Note or tmder any document
executed by Borrower in conneciion with,. 9r to seCure: the. payjnent Qf, this Note (.1) .shall not be required to comply with
Subsection 3.05( d) of the TeXas Revised Partnership Act and. (2) Lender shall not be required to proceed against of exhaust the assets
of Borrower before pursuill.g any remedy directly ?gainst one or of.the or the property 9f such partners.
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BORROWER AND LENDER FURTHER AGREE AS FOLLOWS: .
(a)
(b)
(c)
ANY AND ALL CONTROVERSIES BETWEEN T,!IE . PARTIES, EXCEPT SUCH CLAIMS AND
CONTROVERSIES WHICH ARE CONSUMER RELATED AND INVOLVE AN AGGREGATE AMOUNT IN
CONTROVERSY OF LESS THAN. TEN THOUSAND DOLLARS ($10,000.00), SHALL BE RESOLVED. BY
ARBITRATION IN ACCORDANCE WITH THE COMMER(;IALARBITRATION RULES OF:THE AIYIERICAN
ARBITRATION ASSOCIATION IN.EFFECT AT THE TIME OF FILING, UNLESS THE COMMERCIAL
ARBITRATIOJ:< RULES WITH. THIS PROVIS!qN, AND IN SUCH EVENT THE;, TERMS OF THIS .
PROVISION SHALL CONTROL TO '!;HE EXTENT OF THE CON)JLICT. ANYTHING
CONTAINED HEREIN TO THE CONTRARY, SAVE AND .EXCEPT (k), (m), (o), (p), AND (')
HEREIN, THOSE CO,NSUMER RELATED <:LAJMS ANJ) CONTROVERSIE;S Im'OLVlNGiAN AGGREGATE
AMOUNT OF LESS THAN TEN THOUSAND .DoLLARS. ($10,000.00) SHALL BE CONDUCTED IN
ACCORDANCE WITH THE AMERICAN ARBITRAT!ON ASSOCIA'):JON RULES FOR THE RESOLUTION OF
CONSUMER-RELATED DISPUTES OF LESS THAN TEN THOUSAND DOLLARS. ANY ARBITRATION
HEREUNDER SHALL BE BEFORE AT LEAST THREE NEUTRAL ARBITRATORS ASSOCIATED WITH THE
A!YIERICAN ARBITRATION ASSOCIATION AND SELECTED IN ACCQRDANC)i: ;wiTH THE COMMERCIAL
ARBITRATION RULES'OFTHE A!YIERICAN ARBITRAT.iON ASSOCIATION. FAiLURE OF ANY ARBITRATOR
To DiscLosE ALL FACTs wnrcH MIGHT.T<i AN tm.iEcTIVE oBsERYER .cREATE/A REAsoNABLE
IMPRESSION <iF THE ARBITRATOR'S PARTIALITY, AND/OR 1)1ATERIALERRORS OF LAW SHALL BE
GROU,NDS [IN ADDITION TO ALL OT!!ERS] FOR VACA:\"UR OF AN AWARD RENDERED PuRSUANT TO
. . .. . I
TIDSAGREEMENT. , . . . . . . . \
THE AWARD OF THE ARBITRATORS, OR A MAJORITY OF THEM, SHALL BE FINAL, AND. JUDGMENT
UPON THE AWARD RENDERED MAY BE ENTERED J:N;.ANY COURT, S:\"ATE OR FEilERAL, HAVING
JURISDICTION. THE AIDHTR,ATION AWARD SHALL BE !N WRITING AND SPECIFY THE FACTUAL AND
LEGAL BASES FOR THE AWARD. UPON THE REQUEST OF ANY PARTY, THE AWARD SHALL INCLUDE
FINDINGS OF FACT AND CONCLUSIONS OF LAW .
ARBITRABLEDISPUTESINCLUDEANYANDALLCONTROVERSIESORCLAIM.SBETWEENTHEPARTIES
OF WHATEVER TYPE OR MANNER, INCLUDING WITHOUT LIMITATION, ANY CLAIM l)RISING OUT OF
OR RELATING TO TIDS NOTE, ALL PAST, PRESENT .AND/OR FUT.URE CREDIT FACILITIES AND/OR
AGREEMENTS INVOLVING THE ;pARTIES, ANY TRANSACTHiNS BETWEEN OR INVOLVING THE
PARTIES, AND/ORAl'jY ASPECT OF ANY PAST OR PRESENT R)i:LATIONSHIPOFTHE PARTIES, WHETHER
BANKING OR OTHERWISE, SPECIFICALLY INCLUDING ANY ALLEGED TORT COMMITTED BY ANY
PARTY.
(d)
(e)
(Q
(g)
(h)
. '
(i)
THE PARTIES SHALL ALLOW AND PARTICIPATE IN DISCOVERY IN ACCORDANCE WITH THE FEDERAL
RULES OF CIVIL PROCEDURE FOR A PERIOD OF ONE HUNDRED TWENTY (120) DAYS AFTER THE
FILING OF THE ORIGINAL RESPONSIVE PLEADING. DISCOVERY MAY CONTINUE THEREAFTER AS
AGREED
1
BY THE PARTiES OR AS ALLOWED BY THE ARBITRATORS . UNRESOLVED DISCOVERY
DISPUTES SHALL BE BROUGHT TO THE ATTENTION OF THE ARBITRATORS BY WRITTEN MOTION FOR
INCLUDING RULING ON ANY ASSERTED OBJECTIONS, PRIVILEGES, AND
PROTECTIVE ORDER REQUESTS AND AWARDING REASONABLE ATTORNEY'S I?EES TO THE
PREVAILING PARTY. . . . .
IN THE EVENT THE AGGREGATE OF A:LL.AFFIRMATIVE CLAIMS ASSERTED EXCEED $500,000:oo,
EXCLUSIVE OF INTEREST AND ATTORNEY'S FEES, OR UPON THE WRITTEN REQUEST OF ANY PARTY,
(!) PRIO)t TO THE DISSEMINATION OF A LIST OF POTENTIAL ARBITRATORS, THE AMERICAN
ARBITRA\TION.ASSOCIATION SHALL. CONDUCT AN IN PERSON ADMINISTRATIVE CONFERENCE WITH
THE PARTIES AND THEm ATTORNEYS I?OR THE FOLLOWING PURPOSES AND FOR SUCH ADDITIONAL
J!URPOSES AS THE PARTIES OR THE AMERICAN ARBITRATION ASSOCIATION MAY DEEM
4f'PROPRIATE, (A) TO OBTAIN ADDmONAL INFORMATION ABOUT THE NATURE AND MAGNITUDE OF
THE DISPUTE AND .THE ANTICIPATED LENGTH OF HEARINGS AND SCHEDULING; (B) TO DISCUSS TilE
VIEW OF. TliE PARnES ABOUT ANY TECHNICAL AND/OR OTHER SPECIAL QUALIFICATIONS OF THE
. . . I , .
ARBITRATORS; AND (C) TO CONSIDER, WHETHER.MEDIATION OR OTHER METHODS OF DISPUTE
RESOLuTION MiGHT BE APPROPRIATE; AND (2) AS PROMPTLY AS PRACTICABLE AFTER THE
SELECTIONOFTiiEARBITRATORS;APRELIM!NARYHEARINGSHALLBEHELDAMONGTHEPARnES,
THEmATTORNEYSANDTHEARBITRATORS. WITHTHEAGREEMENTOFTHEARBITRATORSANDTHE
PARTIES, THE PR:E;LIMINARY HEARING MAY BE CONDUCTED BY TELEPHONE CONFERENCE CALL
!1'ATHER, THAN IN PERSON. AT THE PRELIMINARY HEARING THE .MATTERS THAT MAY BE
CONSIDERED SHALL INCLUDE, WITHOUT LIMITATION, A PREHEARING SCHEDULING ORDER
ADDRESSING (A) EACH PARTY'S DUTY TO SUBMIT A DETAILED STATEMENT OF CLAIMS, DAMAGES
AND/OR DEFENSES, A STATEMENT OF THE ISSUES ASSERTED BY EACH PARTY AND ANY LEGAL
AliTHORITIES TJI:li: PARTIES MAY WISH TO BRING TO TJIE ATTENTION OF THE ARBITRATORS; (B)
.RESPONSESAND/ORREPLIES TO THE PLEADINGS FiLED IN' COMPLIANCE WITH SUBPART 2(A); (C)
STIPULATIONS REGARDING ANY UNCONTESTED FACTS; (D) EXCHANGE AND PREMARKING OF ALL
DOCUMJi;NTS WHICH EACH PARTY 'BELIEVES MAY BE OFFERED AT THE FINAL ARBITRATION
HEARING; (E) TliE IDENTIFICATION AND AVAILABILITY OF WITNESSES, INCLUDING EXPERTS, AND
SUCH ADDITIONAL MATTERS REGARDING WITNESSES INCLUDING THEm BIOGRAPHIES AND A
SHORT SUMMARY OF THEIR EXPECTED TESTIMONY, (F) WHETHER A STEN!)GRAPIDC OR OTHER
OFFICIAL RECOR\) OF THE PROCEEDINGS SHALL BE MAINTAINED; AND (G) THE POSSIBILITY OF
'UTILIZING Mli;DIATION OR OTHERAi:rERNATIVE METHODS OFDISPUTERESOLllTION.
F,OR PIJR:POSES oF THlS PROVISION, "THE PARTIES" MiA.Ns BORROWER AND LENDER, AND 'EACH
AND ALL PERSONS AND ENTITIES SIGNING TillS AGREEMENT OR ANY OTHER AGREEMENTS
BETWEEN OR AMONG ANY OF THE PARnES AS PART OF TillS TIIANSACTION. "THE PARnES" SHALL
ALSO INCLUDE INDIVIDUAL PARTNERS, AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
AND/OR REPRESENTATIVES OF ANY PARTY TO SUCH DOCUMENTS, AND SHALL INCLUDE ANY OTHER
OWNER AND HOLDER OFTffiS AGREEMENT.
'rHE PARTIES SHALL RAVE .THE RIGHT TO INVOKE SELF- HELP REMEDIES (SUCH AS SET-OFF,
NOTIFICATION OF ACCOUNT DEBTORS, SEIZUREAND/ORI?ORECLOSURE OF COLLATERAL, AND NON-
Ji:IDIClAL SALE OF PERSONAL PROPERTY AND REAL PROPERTY COLLATERAL) BEFORE, DURING OR
AFTER A\'!Y ARBITRATION AND/OR REQUEST ANCILLARY OR PROVISIONAL JUDICIAL REMEDIES
(SUCH AS GARNISHMENT, ATTACHMENT, SPECIFICPERFORMANCE, RECENER, INJUNCTION OR
RESTRAINiNG ORDER, AND SEQUESTRATION) BEFORE OR AFTER ANY ARBITRATION. THE PARTIES
NOT AWAIT THE OUTCOME OF THE ARBITRATION BEFORE USING SELF-HELP REMEDIES. USE
OF SELF-HELP OR ANCILLARY AND/OR PROVISIONALJUDIClALREMEDIES SHALL NOT OPERATE ASA
WAIVER OF EITHER PARTY'S RIGHT TO COMPEL ARBITRATION. ANY ANCILLARY OR pROVISIONAL
REMEDYWillCH WOULD BE AVAILABLE FROM A COURT AT LAW SHALL BE AVAILABLE FROM THE
ARBITRATORS. . .
i
THE PARTIES AGREE THAT ANY ACTION REGARDING ANY CONTROVERSY BETWEEN THE PARTIES
SHALL EITHER BE BROUGHT BY ARBITRATION, AS DESCRIBED HEREIN, OR BY JUDICIAL

STAYS AND/OR ABATES ANY AND ALL ACTION IN A TRIAL COURT, SAVE AND EXCEPT A HEARING ON A
TO COMPEL ARBITRATION AND/OR THE ENTRY OF AN ORDER COMPELLING ARBITRATION
AND STAYING AND/OR ABATING THE LITIGATION PENDING THE FILING OF THE FINAL AWARD OF THE
..4RBITRATORS. ilL REASONABLE AND NECESSARY ATTORNEY'S FEES AND ALL TRAVEL COSTS
SHALL BE AWARDED TO THE PREVAILING PARTY ON ANY MOTION TO COMPEL ARBITRATION AND
MuSTBEiPAID TO SUCHPARTYWITHINTEN (10) DAYS OF TilE SIGNING OF THE ORDER COMPELLING
ARBITRATION.
ANY PARTY SHALL SERVE A WRITTEN NOTICE OFINTENTTOARBriRATE TO ANY AND ALL OPPOSING
JlARTIES. WITillN 360 DAYS AFTER DISPUTE HAS ARISEN. A DISPUTE IS DEFINED TO HAVE ARISEN
. ONLY UPt>N RECICIPT OF SERVICE OF .mDIClALPROcESS, INCLUDING SERVICE OF A COUNTERCLAIM,
Ii'AILURID TO sERVE A WRITTEN NOTICE OF INTENT TO ARBITRATE WITHIN THE TIME SPECIFIED
. - . I , - , -
ABOVE SHALL BE JIJEEMED A WAIVER OF THE AGGRIEVED PARTY'S RIGHT TO COMPEL ARBITRATION
OF SUcH CLAIM. .THE ISSUE OF WAIVER PURSUANT TO TillS AGREEMENT IS AN ARBITRABLE
DISPUTE\ .
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ACTIVE PARTICIPATION IN PENDING LITIGATION DURING THE 360 DAY NOTICE PERIOD, WHETHER
AS PLAINTIFF OR DEFENDANT, IS NOT A:WAIVER OF THE RIGHT TO COMPEL ARBITRATION. ALL
DISCOVERY OBTAINED IN THE PENDJ)'IG LITIGATION MAY BE USED IN .ANY SUBSEQUENT
ARBITRATION PROCEEDING.
THE PARTIES FURTHER AGREE THAT (i):No ARBITRATION PROCEEDING HEREuNDER SHALL BE
CERTIFrEnAS A CLASS ACTION OR PROCEED AS A CLASS ACTION, OR ON A BASIS JNV'OLVING CLAIMS
BROUGHT IN A PURPORTED REPRESENJ:'ATIVE CAPACITY ON BEHALF OF THE GENERAL PUBLIC,
OTHE)l CUSTOMERS OR POTENTIAL OR PERSONS SI!'flLARLY SITUATED AND (ii) NO
ARBITRATION PROCEEDING HEREUNDER SHALL BE CONSOLID,UED WITH, OR JOINED IN ANY WAY
WITH, ANY OTHER ARBITRATION PROCEEDING.
ANY ARBITRATOR SELECTED SHALL BE KNOWLEDGEABLE IN THE SUBJECT MATTER. OF THE
DISPUTE. EACH OF THE PARTIES .SHALL PAY AN EQUAL SHARE OF THE ARBITRATION COSTS, FEES,
EXPENSES, AND OF THE ARBITRATORS' FE.ES, cos:rs AND EXPENSES.
ALL STATUTES OF LIMITATIONS WHICH WOULD OTHERWISE BE APPLICABLE SHALL APPLY TO ANY
AND ALL CLAIMS ASSERTED IN. ANY ARBITRATION PROCEEDING HEREUNDER AND THE
. COMMENCEMENT OF ANY ARBITRATION:i'ROCEEDING TOLLS SUCH STATUTES OF LIMITATIONS.
IN ANY ARBITRATION PROCEEDING SUB;n;;cr TO THIS PROVISION, THEAiiBITRATORS, OR MAJORITY
OF THEM, ARE SPECIFICALLY EMPOWERED TO DECIDE (BY DOCUMENTS ONLY, OR WITH A HEARING,
AT THE ARBITRATORS' SOLE DISCRETIO,NJ PRE-HEARING MOTIONS WHICH ARE SUBSTANTIALLY
SIMILAR TO PRE-HEARING MOTIONS TO DISMISS AND MOTIONS FOR SUMMARY ADJUDICATION.
THIS ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION, AMENDMENT, OR EXPIRATION
OF THE AGREEMENT IN WHICH TIDS PROVISION IS CONTAINED, UNLESS ALL OF THE PARTIES
OTHERWISE EXPRESSLY AGREE IN WRITING.
THE PARTIES ACKNOWLEDGE THAT TIJ:iS AGREEMENT EVIDENCES A TRANSACTION INVOLVING
INTERSTATE COMMERCE. TilE FEDERAL ARBITRATION ACT SHALL GOVERN THE ll'jTERPRETATION,
ENFoRCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION CLAUSE OFTHrs AGREEMENT.
THE ARBITRATORS, OR A MAJORITY OFTkM, SHALLA WARD ATTORNEY'S FEES AND COSTS TO THE
PREVAILING PARTY PURSUANT TO THE TERMS OFTIDS AGREEMENT. .
' I .
NEITHER THE PARTIES NOR THE ARBIT)lATORS MAY DISCLOSE THE EXISTENCE, CONTENT, OR
RESULTS OF ANY ARBITRATION HEREUNDER WITHOUT PRIOR WRITTEN CONSENT\ OF ALL PARTIES
AND/OR COURT ORDER. f
VENUE OF ANY ARBITRATION PROCEEDING HEREUNDER SHALL BE IN BEXAR COUNTY, TEXAS.
. THE TERM LENDER INCLUDES ANY OTHER OwNER AND HOLDER OF THIS NOTE AND THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS. THIS NOTE IS GOVERNED BY APPLICABLE TEXAS LAW. EXCEPT TO(THE EXTENT THE
USURY LAWS OF TEXAS ARE PRE-EMPTED BY FEDERAL LAW, IN WHICH CASE, SUCH FEDERAL LAW SHALL APPLY.
VENUE OF ALL ACTIONS ON THIS NOTE, SHALL LIE IN BEXAR COUNTY. TEXAS, AND ALL OBllGATIONS REQUIRED
HEREIN ARE PERFORMABLE IN BEXAR COUNTY, TEXAS.
If loan proceeds are to be used primarily for personal, family!ot household use, the following notice shall apply:
NOTICE TO CONSUMERS: UNDER TEXAS LAW IF YOU CONSENT TO THIS AGREEMENT YOU MAYBE SUBJECT TO A
FUTURE RATE AS IDGHAS 24% ANNUAL PERCENTAGE RATE. OR THE STATE USURY CEJLING, WHICHEVER IS LESS.
. '
If this Note is to be secured by a lien- on a dwelling located oJ the hereinafter described property, then the following notice shall apply:
. . : . i
THE MAXIMUM INTEREST RATE SHALL NOT EXCEED TWENTY-FOUR PERCENT (24%) PER ANNUM. OR THE USURY
CEJLING. WHICHEVER IS LESS. . l .
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Payment hereof is secl_.lTed by_a vendor's lieri retained in of even date _herewith, to tp_e anQ is additionally secured by a
Deed of Trust, Secudty Agreeq1ent and Financing Statement c:{f even date herewith, executed by the Borrower and/or Grantors thereof to
Steve Edl una , Trustee, the following described real property:
See Exhibit "A" attached hereto and mad a oart hereof for all purooses.
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NO ORAL AGREEMENTS
TillS wRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT B.ETwEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT OF
THE PARTIES. . .
THERE ARE NO WRITTEN 'ORAL AGREEMENTS BETWEEN THE PARTIES
. . I . .
"Borrower"
By:
Typed Naiue:
Title:
Address:
"Borrower"
By:
JYpedNa:i:Ile:
, .
. Title:
Address:
'
STACI PROPERTIES, LTD., "Borrower"
A TEXAS LIM!TED PARTNERSHIP
:BY: S'f'A f;ILC,
By:
i A TExAS Name:
_;
WALTER s JENSEN I
SOLE MEMBER
2001 Soutti Laredo Street
.A-ddress
'
san Antonio, Texas 78207
''Borrower"
By:
Typed Name:
Title:
Address
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ALLONGE TO REAL ESTATE LIEN NOTE
This Allonge is made a part' of that certain real estate lien note in the original principal amount
of TWO MILLION FOUR HUNDRED THOUSAND AND N0/100 DOLLARS ($2,400,000.00)
("Note") dated of even date herewith and executed by STACI PROPERTIES, LTD.
("Borrower") and being due and payable to International Bank of Commerce ("Lender") .
!
The Note is payable as follows: .
(a) The principal of the Note, together with accrued and unpaid interest the
unpaid principal balance of the Note, shall be due and payable (i) in mdnthly
. installments, in an amount equal to Twenty Thousand Three Hundredi and
No/1 00 ($20,300.00) each, the first such installment to be due and payable on
. April 2005, and the remaining such installments to be due and payable on
the :::;.""," (2el>) day of each succeeding calendar month thereafter pri;or to .
March _2:_, 2010 (the "Maturity Date"). Payments are based on a fifteen (15)
year amortization schedule and shall be subject to change to reflect changes in
the interest rate as set forth in the Note.
accrued and unpaid interest on the unpaid principal balance of this Note shall be finally
due and payable. . \
Notwithstanding anything contained herein to the contrary or .in any other loari document
evidencing or securing the Loan, in the event of any nonmonetary default, Lender shall deliver
to Borrower written notice of such default and Borrower shall have thirty (qO) days after
receipt of said notice to cure such default before Lender may proceed with acceleration
and/or foreclosure or pursue any other remedies. If Borrower timely cures such then
no event of default shall be deemed to have occurred.
. I
All notices required hereunder shall be delivered to Borrower by Certified Mail, Return Receipt
requested, and shall be deemed delivered three (3) days after deposit with the United States
Mail by Lender, with proper postage affixed.
. . I
THIS LOAN IS PAYABLE IN FULL ON MARCH __ ._, 2010. YOU MUST REPAY THE
ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST THEN
1
DUE. THE
BANK IS UNDER NO OBLIGATION TO REFINANCE THE LOAN. YOU WOULD,
THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS; YOU MAY
OWN, OR YOU WOULD HAVE TO FIND A LENDER, WHICH MAY BE THE BANK YOU
HAVE THIS LOAN WITH AT MATURITY. YOU MAY HAVE TO PAY SOME OR ALL THE
CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN
REFINANCING FROM THE.SAME BANK.
EXECUTED this Z. day of March, 2005.
LENDER:
COMMERCE
BORROWER:
BY:
OMPANY
102362.1
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EXHIBIT "A"
LEGAL DESCRIPTION
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Tract 1:
5. 779 acres of land situated in the Ci-ty of San Antonio, Bexar County,l Texas,
being Lot 4, Lot 5, Lot 6, Lot 7, Block 39, NCB 3698, Edgewood Addition,
unrecorded Plat flied in Bexar County Tax Assessors Of"fice Bexar County,
Texas, and a portion of Lot 53, Block 39, NCB 3698, Las Villas De as
recorded in Volume 9555, Page 72, Deed and Plat Records of Bexar County,
BEGINNING, at a found 1/2 inch Iron rod on the southerly right of" way. I ine of
Merida Street, for the northeasterly of said Lot 53, Block 39,
being the-northwesterly corner of" said LOt 4;
THENCE, S 84 " 22' 25" E, a I ong the souther I y rIght of way I I ne of Mer\i da
Street, a d 1 stance of 706. 56 feet to a "found 1/2 Inch i ron rod on the i
northwesterly right of way I line of The Union Pacific Railroad;
THENCE, along the arc of a. curve to the left having a radius
of 2865,00 feet, a central angle of 14 22' 30", an arc length of 718.80 feet
and a chord bearing: s 43 18' 41" W, 716.91 feet, to a found 1/2 inch\ iron
rod;
THENCE, S 36" 02' 54" W, continuing along the northwesterly right of way I ine
of The Union Pacific Rallraod, a distance of 183.64 "Feet to a set 1/2 lnch
I ron rod on -the I y r 1 ght of" way I I ne of Cera I vo Street f"or the (
southeaster I y corner of said lot 53; I
THENCE, N 84" 10' 44" W, along the northerly right of way I i_ne of
Street, a distance of 35. 88 feet to a set 1/2
Inch iron rod;
THENCE, crossing said lot 53, Block 39, the "Following
courses;
N os .34'
"47" E, a distance of 90.14 feet to a set 1/2 Inch iron rod;
s 83" 48' 09" E, a distance of 10.75 feet to a set 112 Inch Iron rod;
N 06" 11' 51" .E, a distance of 21.99 feet to a set 112 Inch Iron rod;
N l;i30
48' 09" w, a distance of 13.64 feet to a set 1/2 inch Iron rod;
N os 1.1' 51". E,
a distance of 230.44 feet to-a set 1(2 inch
iron rod;
N

48' 09" w,.
a distance of 23.07 feet to a set 1/2 Inch Iron rod;
N 06 11' 51" E, a distance of 18.94 feet to set 1/2 inch Iron
I
a rod on'
1
the
line of" said 53, Block 39;
northerly
THENCE, N 94o 25' 13" W, along the northerly line of said Lot 53, Block 39, a distance
of 12o;o1 Teet to a found 1/2 inch Iron rod.f"or an InteriOr angle corner of" said Lot
53, Block 39, same being the southwesterly corner of said Lot 4;
THENCE, N oso 14' 30" E, along the easterly line of said Lot 53, Block 139, a distance
of 363.95 feet to the POINT OF BEGINNING of" described tract, and containing
5.779 acres of land, more or Jess .
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EXHIBIT "A"
(continued)
Tract 2:
2.069 acres oT land situated In the City oT San Antonio, Bexar County, Texas, being
NCB 3699; Edgewood Addition, as recorded In Volume 1625, Page 317, Deed\and Plat
Records oT Bexar County, Texas, and alloT Lot. 18, Block 40, NCB 3699, Stauffer &
H.G. Deviney Subdivision as recorded In Volume 3975, Page 223, Deed and(Piat Records.
oT Bexar County, Texas: said 2.069 acre tract of land being more particularly
described as follows: \
BEG 1 NN 1 NG, at a 1/2 inch i ron rod set on. the norther I y r 1 ght of way .1 i of' Merida
Street, said 1/2. inch iron rod being N 54 22' 25" W, 8.31 'feet 'from the southeast
THENCE, N 05 14' 53" E, 'crossing said LOts 57.through 65, Block 40, the westerly
line of that certain tract of land conveyed to West Coast ProdUce Company, Inc. as
recorded in VolUme 7133, Page 968, Off'icial Public Records of Bexar Coun:ty, Texas, a
distance of 364 .13 feet to .a 1/2 Inch iron rod set;
THENCE, S 84 21' 53" E, along the northerly line of said Lot 57, at a ,distance of
8.31 feet passing the northeast corner of Lot 57, same being the northwest corner of'
Lot 17, at a distance of 127.92 feet passing the northeast corner of lot 17, same
being the northwest corner of said Lot 18, in all a total distance of 247.52 feet to a
1/2 inch Iron rod set for the northeast corner of said lot 18, same being the
. I
THENCE, S 06" 14' 53" W, along the common boundary line between Lot 18 and lot 19, a
distanCe of 364. 09 Teet to a 1/2 Inch i ron rod set on the norther I y r i of way 1 i ne
of Merida Street, Tor the southeast corner of said Lot 18, same being the southwest
corner oF Lot 19: (
THENCE, N 54 22' 25" W, along the northerly right of way I ine of Merida Street, at a
distance of.119.60 feet passing the southwest Corner of lot 18, same being the
southeast corner of lot 17, at a distance of 239.21 feet passing the southwest corner
of Lot. 17, same being the southeast corner of Lot 65, in all a total distance of
247.52 Feet to the POINT OF BEGINNING of herein described tract, and containing 2.069
acres of I and, more or I ess. \
Tract 3:
Lot 17, Block 3, New City Block A36, Gillis Hood, Unit 2, an addition to City of
San Antonio, Bexar C.ount.Y, Texas accord l ng to the map or pI at thereof, re'corded in,
Volume 9512, Page 91, Deed and Plat Records of County, Texas, SAVE EXCEPT
that portion conveyed to the City of San Antonio in 5202, Page
OFficial
Pub II c Records of Real Property of Bexar County, Texas,
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ALLONGE TO REAL ESTATE LIEN NOTE
This Allonge is made a part of that certain real estate lien note in the original priJipipal amount
of TWO MILLION FOUR HUNDRED THOUSAND AND N0/100 DOLLARS ($2',400,000.00)
("Note") dated of even date herewith and executed by STACI PROPERTIES, LTD.
("Borrower") and being due and payable to International Bank of Commerce ("Lender").
The Note is payable as follows:
(a) The principal of the Note, together with accrued and unpaid interest on the
unpaid principal balance of the Note, shall be due and payable (i) in monthly
installments, in an amount equal lei Twenty Thousand Three Hundred and
No/1 00 ($20,300.00) each, the first such installment to be due and payaple on
April ~ . 2005, and the remaining such installments to be due and payable on
the $c""'" <> (2&) day of each succeeding calendar month thereafter prior to
March _2:_, 2010 (the "Maturity Date"). Payments are based on a fifteen (15)
year amortization schedule and shall be subject to change to reflect changes in
the interest rate as set forth in the Note.
i
accrued and unpaid interest on the unpaid principal balance of this Note shall be finally
due and payable. I
. I
Notwithstanding anything contained herein to the contrary or in any other loan document
evidencing or securing the Loan, in the event of any nonmonetary default, Lender shall deliver
to Borrower written notice of such default and Borrower shall have thirty (30) days after
receipt of said notice to cure such default before Lender may proceed with 'acceleration
and/or foreclosure or pursue any other remedies. If Borrower timely cures such default, then . ,
no event of default shall be deemed to have occurred.
All notices required hereunder shall be delivered to Borrower by Certified Mail, Return Receipt
requested, and shall be deemed delivered three (3) days after deposit with the United States
Mail by Lender, with proper postage affixed.
i
THIS LOAN IS PAYABLE IN FULL ON MARCH __ , 2010. YOU MUST ('\EPAY THE
ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST THEN DUE. THE
BANK IS UNDER NO OBLIGATION TO REFINANCE THE LOAN. YOU WOULD,
THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS YOU MAY
OWN, OR YOU WOULD HAVE TO FIND A LENDER, WHICH MAY BE THE BANK YOU
HAVE THIS LOAN WITH AT MATURITY. YOU MAY HAVE TO PAY SOME OR ALL THE
CLOSING COSTS NORMALLY ASSOCIATED WITH A NEW LOAN EVEN IF YOU OBTAIN
REFINANCING FROM THE SAME BANK.
EXECUTED this Z day of March, 2005 .
LENDER:
BORROWER:
BY:
OMPANY
102362.1
Tract 1;
EXHIBIT "A"
LEGAL DESCRIPTION
being Lot 4, lot 5, Lot 6, Lot 7, Block 39, NCB 3698, Edgewood Addition,
unrecorded Plat filed in Bexar County Tax Assessors Office Bexar County,
Texas, and a portion Of Lot 53, Block 39, NCB 3698, Las Vi lias De Medda as
BEGINNING, at a found 1/2 Inch iron rod on the southerly right of way line of
Merida Street, for the northeasterly corner of said Lot 53, Block 39,, same
being the.northwesterly corner of said lot 4;
THENCE, S 84 22' 25" E, along the southerly right of waY line of Merida
Street, a distance of 706.56 feet to a found 1/2- Inch iron rod on the
northwesterly right of way II ine of The Union Pacific Railroad;
THENCE, Southwesterly, along the arc of a curve to the left having a. radius
of 2865.00 feet, a central angle of 14" 22' 30", an arc length of 718'.80 feet
and a chord bearing: s 43" 18' 41" W, 716.91 feet, to a found 1/2 inch iron
rod;
THENCE, S 36' 02' 54" W, continuIng a I ong the northwester I y right of way I I ne
of The Union Pacific Rai lraod, a distance of" 183.64 feet to a set 1/2: Inch
iron rod On the northerly right of way line of Ceralvo Street for the
THENCE, N 84' 10' 44" W, along the northerly right of way line of Ceralvo
Street, a distance
of 35.88 feet to a set 1/2
Inch iron rod;
THENCE, crossing said Lot 53,
Block 39, the following courses;
N 05' 34' "47" E, a distance of 90.14 feet to a set 1/2 inch Iron rod;
s 83' 48' 09" E, a distance of" 10.75 feet to a set 1/2 inch iron rod;
N 06'
11
51" E. a distance of 21.99 feet to a set 112 inch Iron rod;
N 83' 48,' 09" w. a distance of 13.64 feet toa set 1/2 inch iron rod;
N 06' 11' 51" E. a distance
of 230.44 feet to a set 1(2 Inch Iron rod;
N 83' 48' 09" Ill, a distance of 23.07 "feet to a set 1/2 Inch .iron rod;
N 06" 11' 51" E, a distance of' 18.94 feet to a set 1/2 Inch iron rod on the northerly
line of said lot 53, Block 39;
THENCE,. N 94 25' 13" W, along t!le northerly I Jne of said Lot 53, Block 39, a distance
of 120.-01 f ~ e t to a found 1/2 Inch Iron rod for an interiOr angle corner of said Lot
. 53, Block 39, same being the southwesterly corner of said Lot 4;
THENCE, N 05" 14' 30" E, along the easterly I ine of said Lot 53, Block 39, a distance
of 363 . 95 feet to the POl NT OF BEGINNING of hereIn described tract, and conta in i ng
5.779 acres of land, more or Jess.
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Tract 2:

EXHIBIT "A"
(continued)
2.069 acres of land situated in the City of San Antonio, Bexar County,.Texas, being
the East 8.31 feet of Lots 57 65, Block 40, NCB 3699, all of lot 17, Block 40,
NCB 3699, Edgewood Addition, as recorded In Volume 1625, page 317, Deed and Plat
Records of Bexar County, Texas, and all of lot 18, Block.40, NCB 3699, H.A. Stauf"fer &
H.G. Deviney Subdivision as recorded in Volume 3975, Page 223, Deed and Plat Records
described as follows:
BEGINNING, at a 1/2 inch iron rod set on-the northerly right Of way line of Merida
Street, said 1/2 inch iron rod being N 84 22' 25" W, 8.31 feet "from the southeast
THENCE, N oso 14' 53" E, crossing said LOts 57.through 65, Block 40, along the westerly
line of that certain tract of land conveyed to West Coast Produce Company, Inc. as
recorded in Volume 7133, Page 968, Official Pub I ic Records of Bexar Cou_nty, Texas, a
distance of 364.13 feet to.a 1/2 Inch iron rod set;
THENCE, S 84 21' 53" E, a long the northerly I ine of said Lot 57, at a distance of
8.31 feet passing the northeast corner of Lot 57, same being the northwest corner of
Lot 17, at a distance or 127.92 reet passing the northeast corner or lot 17, same
being the riorthwest corner or said Lot 18, in all a total distance of 247.52 feet to a
1/2 inch iron rod set for the northeast corner or said Lot 18, same being the
northwest corner of Lot 19:
THENCE, S 06 14' 53" W, along the convnon boundary I ine between Lot 18 and Lot 19, a
distanCe of 364.09 reet to a 1/2 Inch iron rod set on the northerly right or way line
or Merida Street, for southeast corner of said Lot 18, same being the southwest
corner of Lot 19;
THENCE, N 84' 22' 25" W, along the northerly right of way line of Merida Street, at a
distance of".119.60 "feet passing the southwest corner of Lot 18, same being th6
southeast corner of Lot 17, at a distance of 239.21 feet passing the southwest corner
of Lot 17, same being the southeast corner of Lot 65, in all a total distance of
247.52 feet to the POINT OF BEGINNING of herein d8scribed tract, and containing 2.069
acres of I and, more or less.
Tract 3:
lot 17, Block 3, New City Block A36, Gillis Hood, Unit 2, an addition to the City of
San Antonio, Bexar County, Texas according to. the map or plat thereof, recorded in,
Volume 9512, Page 91, Deed and Plat Records or County, Texas, SAVE AND EXCEPT
that portion conveyed to the City of San Ant.onio in Vol1,.une 5202, Page 1204, O"fficial
Pub I i c Records of' Rea I Property of Bexar County, Texas.
--... _,
: . .
. .
:: __,_.

.. . _, ...
EXTENSI1..,, AND/OR MODIFICATION AGREJ!,. -NT
RESIDENTIAL REAL ESTATE LIEN NOTE IN'PEBTEDNESS
Date : March 2, 2010
Account No: _.s,qoo..,6,.o1"3"'9.Lz ___________ _
Borrower : Stacl Prppertfes Lfil .
together with any and all accrued and unpaid interest
and I or late charges .
Each payment shall be applied as of its scheduled due date and in
the order of application as the Lender in its sole discretion may
from time to tUne elect.
Any outstanding unpaid principal, accrued and unpaid interest
and an fees, late charges and/or other charges incurted in this
ttansaction by, or for the. benefit of;' Borrower, if any, which
remain due and owing QD. tho Final Maturl.ty Date are due and
payable on such date.
The failure of Borrower to pay any of the paymcnt(s) ofprlncipal
or any interest thereon or accrued late: charges, when the: same is
due and payable shall permit Lender, at its option, to accelerate
the maturity, without notice to Borrower, of all, or any portion, of
the outstanding unpaid principal balance and all accrUed and
unpaid interest, and all accrued and unpaid late charges under the
Note I this Agreement, whereupon the same shall be and
payable immediately.
The starting rate of interest will be 4. 75
per amium beginning on
NYPF+ll4%
Fmal Maturity Date: AprlllS, ZOll
% Borrower renews arid extends the Note, and any apd all'Security
Agreements, security interests, Deeds of Tl:ust, lin& or other liens
created by Borrower in favor of International Bank of Commerce,
Ex:ccpt as provided borein, all other terms and co)lditions of the
Note, and all Security Agreements, security .interests, Deeds of
Trusts, and/or other liens cre,ated by Deeds of Trusts and/or-other
Loan Documents, if any; continue as and remain in full
force and effect.
Borr-Ower promises to pay to the order of International Bank of
Commerce the Outstanding Principal Balance. on _the NCite
according to the tenns hCreof together with. interest as it accrues
on tho C!Utstanding unpaid principal balance until paid. In no
event shall the rate of to be paid on the unpaid prlneipal
balance be thtin Four and three quarter percent (4.75%)
pdl' annum, nor more than the maximum legal rate allowed by
applicable law.
To the extent allowed -by law, if any. payment due under the
Note/this agreement is more than ten (10) days late, BotTOWet
will be charged a late charge of five percent (5%) of the late
payment amount, both principal and inte!est. The "late charge"
may be accessed without and sball be immediately dUe and
payable.
BOrrower
Siaci Produce, Ltd., a Texas Limited Partnership
Address
750Merida
San .Antonio, Texas 78207
BY:
NAME:
TO '!'liE EXrENT ALLOWED BY LAW, ALL MATIJRl3D
UNPMD AM01.JNTS 'WilL JlBAR INTEREST AT TEE
MAXIMUM LEGAL INTI!REST RATE ALLOWED BY
APPriCABLE LAW. If applicable law does not set a maximum
rate of interest for matured unpaid amounts, then Borrower agrees
-that tho maximw:n rato for such amounts shall bo eighteen percent
. (18%) per annum.
NO ORALAGREEMJ!NTS
'l1IISWlUttEN LOAN AGREEMll!IT REPRESENTS 'tHE
l'INAL AGREEMENT BEtWEEN THE PARTIES AND
MAY NOT BE CON'i'RADICTED BY Ev'roENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENtS OF 'tHE PARTIEs. TI!EiUi: ARE NO
.uNwitrrrEN ORAL AGREEMENTS l!ETW!iEN '!liE
PARTIES .
AddreSs
Agreement -Staci Properties 3.2.2005 Pg 1 of 28
i
. .
LOAN AGREEMENT .
. This Loan Agreement(the "Loan Agreement") is dated as of the . 2. day of March,
2005 (the "Effective Date'') made by and among INTERNATIONAL BANK OF COMMERCE
(the "Lender"), STACI PRODUCE, LTD., A TEXAS LIMITED PARTNERSHIP ("Staci
. Produce''), STACI PROPERITES, LTD., A TEXAS LIMITED PARTNERSHip ("Staci
Properties"), ATLED; L TO., A TEXAS LIMITED PARTNERSHIP ("Atled"), DELTA
. PRODUCE, L.P., A TEXAS LIMITED PARTNERSHIP ("Delta Pro<:luce''), and WALTER.
SCOTT JENSEN, AN INDIVIDUAL arid JAMIE JENSEN; AN INDIVIDUAL ("Guarantor",
whether one or more), with respect to:.
. .
. . . . . . . . . (i)
. S ooO bO 11-\0Cl . .
. (ii)
. B 000
(iii)
.
. (iv)
( TO
that certain loan of even date herewith in theoriginaJ principal amount of .
Q) TWO MILLION AND N0/1 00 DOLLARS {$2,000,000.00) to Staci Produce
from Lender (the"Staci Produce Loan"); . . ' . .
. that certain loan of even daie herewith in the original principal amount of .
TWO Ml.LLION FOUR HUNDRED THOUSAND AND N0/1 00 DOLLARS .
@ {$2,400,000.00) to Staci Properties from Lender (the "Staci Properties .
L
")' . . . . ... . . . . . . .
oan . . . . . . . . . .. : . . : . .
that certain loan dated March 23, 2001 in the original principal amount of
TWO.MILLION EIGHT HUNDRED EIGHTY THOUSAND AND N0/100
@DOLLARS {$2,880,000;00) to Atled from Lender {the "A tied Loan"); and
that certain line of credit established May 1, 2003 in the original principal
amount of SEVEN HUNDRED FIFTY THOUSAND AND N0/100
DOLLARS {$750,000.00) to Delta Produce from Lender {the ."Delta
Produce Loan"). R l o c.
ARTICLE I
DEFINITIONS
For purposes of this Loan Agreement, the following terms shall have the respective .
meanings assigned to them.
1.01 . Advance. The term "Advance" shall mean adisbursement by of the ...
. proceeds of the Loan ..
1,02 Affiliate. The term "Affiliate;, shalf mean any Person that, directly or indirectly,
controls, or is controlled by or under common control with,. another Person. For the
. purposes of this definition; "control" (including the terms "controlled by" and. "under
common control with"); as used with respect to any Person, means the power to direct or
cause the direction of the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities or by contract or otherwise .
. 1.03 Annual Financial Statements. The term "Annual Financial shall mean
the annual Certified financial statements of a Person, as of the end of such Person's fiscal
year (being the Fiscal Year unless otherwise designatedby such Person for federal income
tax purposes), including all notes thereto, which statements shall include a balance sheet.
102322.5 1 EXHIBIT
I /2...
LOAN AGREEMENT
'
'
This Loan Agreement (the "Loan Agreement") is dated as of the _Z:_ day of March,
2005 (the "Effective Date") made by and among INTERNATIONAL BANK OF COMMERCE
(the "Lender"), STACI PRODUCE, LTD., A TEXAS LIMITED PARTNERSHIP ("Staci
Produce"), STACI PROPERITES, LTD., A TEXAS LIMITED PARTNERSHIP ("Staci
Properties"), ATLED, LTD., A TEXAS LIMITED PARTNERSHIP ("Atled"), DELTA
PRODUCE, L.P., A TEXAS LIMITED PARTNERSHIP ("Delta Produce''), and WALTER
SCOTT JENSEN, AN INDIVIDUAL and JAMIE JENSEN, AN INDIVIDUAL ("Guarantor",
whether one or more), with respect to:
(i)
(ii)
(iii)
(iv)
that certain loan of even date herewith in the original principal amount of
TWO MILLION AND N0/1 00 DOLLARS ($2,000,000.00) to Staci Produce
from Lender (the "Staci Produce Loan");
that certain loan of even date herewith in the original principal amount of
TWO MILLION FOUR HUNDRED THOUSAND AND N0/100 DOLLARS.
($2,400,000.00) to Staci Properties from Lender.(the "Staci Properties
Loan");
that certain loan dated March 23, 2001 in the original principal amount of
TWO MILLION EIGHT HUNDRED EIGHTY THOUSAND AND N0/100
DOLLARS ($2,880,000.00) to Atled from Lender (the "Atled Loan"); and
that certain line of credit established May 1, 2003 in the original principal
amount of SEVEN HUNDRED FIFTY THOUSAND AND N0/100
DOLLARS ($750,000.00) to Delta Produce from Lender (the "Delta
Produce Loan").
ARTICLE I
DEFINITIONS
For purposes of this Loan Agreement, the following terms shall have the respective
meanings assigned to them.
1 .01 Advance. The term "Advance" shall mean a disbursement by Lender of any of the
1.02 Affiliate. The term "Affiliate" shall mean any Person that, directly or indirectly,
controls, or is controlled by or under common control with, another Person. For the
purposes of this definition, "control" (including the terms "controlled by'' and "under
common control with"), as used with respect to any Person, rrieans the power to direct or
cause the direction of the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities or by contract or otherwise.
1 .03 Annual Financial Statements. The term "Annual Financial Statement" shall mean
the annual Certified financial statements of a Person, as of the end of such Person's fiscal
year (being the Fiscal Year unless otherwise designated by such Person for federal income
tax purposes), including all notes thereto, which statements shall include a balance sheet . 1
102322.5 1
as of the end of such fiscal year, and an income statement, all setting forth in comparative
form where applicable the corresponding figures from the previous fiscal year, all prepared
in conformity with GAAP consistently applied, except that Annual Financial Statements of
individuals do not have to be in conformity with GAAP so long as they are in a form
otherwise acceptable to Lender.
1.04 Borrower. The term "Borrower shall mean (i) Staci Produce, (ii) Staci Properties,
(iii) Atled, and (iv) Delta Produce, collectively.
1.05 Borrowing Base. The term "Borrowing Base" means the sum of (i) eighty percent
{80%) of all Eligible Accounts Receivable and (ii) fifty percent (50%) of all inventory of
Borrower.
1.06 Business Day. The term "Business Day" shall mean a day when the main office of
Lender open for business in San Antonio, Texas.
1.07 Capital Expenditures. The term "Capital Expenditures" shall mean all expenditures
deemed capital expenditures as evidenced by Borrower's financial statements for any
given period during the term of the Loan.
1.08 Cash Flow Coverage Ratio. The term "Cash Flow Coverage Ratio" shall mean, with
respect to any period, the ratio of: {a) the sum (i) the Net Income of Borrower for such
period, (ii) interest expense deducted in determining such Net Income, (iii) depreciation and
deferred taxes deducted in determining such Net Income, and (iv) other noncash items
deducted from revenue in determining such Net Income, to {b) the sum of (i) Current
Maturities of Long Term Debt during such period, (ii) total interest expense of Borrower
(including capitalized interest) for such period, (iii) dividends paid to Borrower's partners
during such period, and (iv) advances to Borrower's, partners or employees during such
period and capital expenditures during such period.
1.09 Cash Flow Recapture Amount. The term "Cash Flow Recapture Amount" shall
mean fifty percent {50%) for the first three Loan Years and seventy-five percent {75%) for
the last two Loan Years of {a) the sum of (i) all Net Income of Borrower for such period, (ii)
depreciation and deferred taxed deducted in determining such Net Income and (iii) interest
expense deducted in determining such Net Income less {b) the sum of (i) Current
Maturities of Long Term Debt made during such period and (ii) total interest expense of
Borrower (including capitalized interest) for such period.
1.10 Certified. The term "Certified" shall mean certified as true and correct by the Person
or a duly authorized officer or representative of the Person providing the Financial
Statements or other financial information to Lender.
1.11 Chapter One. The term "Chapter One" shall mean Chapter One of the Texas Credit
Code, as in effect on the date the document using such term was executed.
102322.5 2
1.12 Collateral. The term "Collateral" shall mean all property of Borrower, tangible or
intangible, real, personal or mixed, whether now owned or hereafter acquired, and now or J
hereafter subject to or intended to be subject to the Security Instruments.
1.13 Consolidated. The term "Consolidated" shall, with respect to any period, mean the
consolidation of financial information of Borrower and Affiliate(s).
1.14 Corporation. The term "Corporation" shall mean corporations, partnerships, joint
ventures, joint stock associations, business trusts and other business entities.
Debt" shall mean all principal sums owed during the next twelve (12) month period on
Borrower's long term debt (including capital lease obligations) as reflected in Borrower's
Certified Annual Financial Statements or monthly interim Financial Statements, consistently
applied, and in every event in accordance with GAAP.
1.16 Current Assets. The term "Current Assets" shall mean to the extent permitted by
and as determined in accordance with GAAP, shall include all (1) cash on hand orin transit
or on deposit in any bank or trust company which has not suspended business; (2)
accounts receivable; and (3) such other assets as, in accordance with GAAP, would be
included in "current assets"; all after deduction of adequate reserves in each case where a
reserve is proper under GAAP; provided, however, that, notwithstanding the foregoing, in
computing Current Assets there shall be excluded (a) all Investments; (b) all franchises,
licenses, permits, patents, patent applications, copyrights, trademarks, trade names, good
will, experimental or organizational expense and other like intangibles; (c) any assets which
are pledged or encumbered as security for or for the purpose of paying any obligation
(other than the Notes) which is not included in Current Liabilities; and (d) all loans,
advances and other receivables from officers, stockholders, directors or employees.
1.17 Current Liabilities. The term "Current Liabilities" shall mean all (a) Indebtedness
maturing on demand or within one year after the date as of which such determination is
made; (b) final maturities and prepayments of Indebtedness and sinking fund payments
required to be made in respect of any Indebtedness within one year after said date; (c)
taxes payable or accrued as estimated and deferred income taxes due for the fiscal year in
which such determination is made arising from differences in reporting depreciation and
other non-cash charges for tax purposes and for corporate financial purposes; (d) accrued
liabilities; (e) payments required to be made with respect to capitalized leases within one
year of said date, and (f) all other items which in accordance with GAAP would be included
as Current Liabilities.
1.18 Debt. The term "Debt" shall mean Borrower's total liabilities, determined in
accordance with GAAP.
1 . 19 Debtor Relief Laws. The term "Debtor Relief Laws" shall mean any applicable
liquidation, conservatorship, bankruptcy, moratorium, insolvency, reorganization, or similar
laws affecting the rights or remedies of creditors generally, as in effect from time to time. ,
102322.5 3
1.20 Eligible Accounts Receivable. The term "Eligible Accounts Receivable" shall mean
accounts receivable owed to Borrower, which are no more than sixty (60) days delinquent.
(a) A failure by Borrower to make any payment of principal or interest on the
Note when due, whether matured by acceleration or otherwise;
(b) A failure by Borrower or Guarantor to comply with any of the other terms or
conditions specified herein or in any other Security Instrument;
(c) The incorrectness of any material representation or warranty made by
Borrower or Guarantor to Lender in any of the Security Instruments;
(d) The appointment of a receiver, trustee, custodian, conservator, or liquidator,
or other similar official for Borrower or Guarantor, any of the Property, or any other property
of Borrower or Guarantor;
(e) Borrower or Guarantor shall generally not pay their debts as they become
due or shall admit in writing their inability to pay their debts, or shall make a general
assignment for the benefit of creditors;
(f) Borrower or Guarantor shall commence any case, proceeding or other action
(g) Any case, proceeding or other action commenced against Borrower or
Guarantor seeking to have an order for relief entered against Borrower or Guarantor, as
the case may be, as debtor, or seeking a reorganization, arrangement, adjustment,
liquidation, dissolution or composition of Borrower or Guarantor of their debts under Debtor
Relief Laws, or seeking an appointment of a receiver, trustee, custodian or other similar
official for Borrower or Guarantor for all or any of the Collateral, or any other property of
Borrower or Guarantor, and such case, proceeding or other action results in the entry of an
order for relief.
(h) Borrower or Guarantor shall have concealed, removed, or permitted to be
concealed or removed, any part of its property, with intent to hinder, delay or defraud its
creditors or any of them, or made or suffered a transfer of any of its property which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar law; or shall have made
any transfer of its property to or for the benefit of a creditor at a time when other creditors
similarly situated have not been paid; or shall have suffered or permitted, while insolvent,
any creditor to obtain a lien upon any of its property through legal proceedings which is not
vacated within sixty (60) days from the date thereof;
102322.5 4
(i) An occurrence of any other event or condition described in the Note, this ,
Loan Agreement or any other security instrument that would result in an acceleration of the . )
Note or constitute an event of default thereunder;
0) The liquidation, termination, dissolution, or death of Borrower or Guarantor;
(k) If Borrower or Guarantor is a partnership, a default by any general partner
under its partnership agreement; or
(I) An occurrence of any event or condition described in the loan documents
evidencing any other indebtedness of Borrower or Guarantor to Lender that would
constitute an event of default thereunder.
Notwithstanding anything set forth herein to the contrary, the occurrence of any
event set forth in items (b), (c), (i) or (I) above shall not constitute an event of default unless
Borrower fails to remedy such matter within thirty (30) days after Borrower's receipt of
written notice from Lender advising Borrower of its failure to comply with such provision or
the occurrence of any event described in such subparagraph.
1.22 Financial Statements. The term "Financial Statements" shall mean such balance
sheets, profit and loss statements, reconciliations of capital and surplus, changes in
financial condition, schedules of sources and applications of funds, and other financial
information of Borrower and of Guarantor, as shall be required by Lender, from time to
time, which statements of the Borrower shall be prepared in conformity with GAAP for the
stated period.
1.23 Fiscal Year. The term "Fiscal Year'' of the Borrower means the period commencing
January 1 of each calendar year through and including December 31 of such calendar
year.
1.24 Generally Accepted Accounting Principles. The term "GAAP" shall mean, as to a
particular Person, such accounting practice as, conforms at the time to generally accepted
accounting principles, consistently applied. GAAP means those principles and practices
(a) which are recognized as such by the Financial Accounting Standards Board, (b) which
are applied for all periods after the date hereof in a manner consistent with the manner in
which such principles and practices were applied to the most recent financial statements of
the relevant Person furnished to Lender, and (c) which are consistently applied for all
periods after the date hereof so as to reflect properly the financial condition; and results of
operations and changes in financial position, of such Person. If a change in any
accounting principle or practice is implemented by the Financial Accounting Standards
Board, then all reports and financial statements required hereunder may be prepared in
accordance with such change only after written notice of such change is given to Lender.
States, the State, the County, the City, or any other political subdivision in which the
Collateral is located, and any other political subdivision, agency, or instrumentality
102322.5 5
.- _,
... I
exercising jurisdiction over Borrower, Affiliate, or the Collateral.
1.26 Governmental Requirements. The term "Governmental Requirements" shall mean
all laws, ordinances, rules, and regulations of a Governmental Authority applicable to
Borrower, Affiliate, or the Property.
1.27 Guarantor. The term "Guarantor" shall mean all parties named Guarantor in the first
1.28 Guaranty. The term "Guaranty" shall mean each Guaranty, in Proper Form, to be
executed by Guarantor in favor of Lender.
1.29 Indebtedness. The term" Indebtedness" shall mean and include (1) all items which
in accordance with GAAP would be included on the liability side of a balance sheet on the
date as of which Indebtedness is to be determined (excluding capital stock, surplus,
surplus reserves and deferred credits), (2) all guaranties, endorsements and other
contingent obligations in respect of, or any obligations to purchase or otherwise acquire,
indebtedness of others, and (3) all indebtedness secured by any Lien existing on any
interest in Collateral owned subject to such Lien whether or not the indebtedness secured
thereby shall have been assumed by Borrower; provided that such term shall not mean or
include any indebtedness in respect of which monies sufficient to pay and discharge the
same in full (either on the expressed date of maturity thereof or on such earlier date as
such indebtedness may be duly called for redemption and payment) shall be deposited
with a depository, agency or trustee acceptable to Lender in trust for the payment thereof
and which monies are not reflected as Current Assets of Borrower on its Financial
Statements.
1.30 Insurance Policies. The term "Insurance Policies" shall mean:
(a) All risk insurance in Proper Form, as determined by Lender, in the amount of
at least equal to the Loan amount or in such additional amounts as Lender may require,
providing all risk coverage on the premises in which Borrower conducts its business, and, if
reasonably requested by Lender, to include the perils of flood, earthquake, business
interruption (in the amount of $250,000.00 or more) and other risks;
(b) Liability insurance in an amount of not less than $1,000,000.00 and otherwise
in Proper Form and providing its coverage is related to its operation of the Collateral.
(c) That certain life insurance policy issued by Jackson National Life Insurance
Company with a fact value of $2,000,000.00 issued upon the life of WalterS. Jensen.
All Insurance Policies shall be issued on forms and by companies satisfactory to
Lender and shall have a provision giving Lender thirty (30) days prior written notice of
cancellation or material change of the coverage and otherwise be in Proper Form.
102322.5 6
1.31 Lender. The term "Lender" shall mean the Lender named in the first paragraph of
this Loan Agreement.
1.32 Lien. The term "Lien" shall mean any mortgage, pledge, charge, encumbrance,
security interest, collateral assignment or other lien or restriction of any kind, whether
based on common law, constitutional provision, statute or contract, and shall include
reservations, exceptions, encroachments, easements, rights of way, covenants, conditions,
restrictions, leases and other title exceptions.
1.33 Loan. The term "Loan" shall mean the Staci Produce Loan, the Staci Properties
Loan, the A tied Loan and the Delta Produce Loan, collectively, in an amount not to exceed
the principal sum set forth in the first paragraph of this Loan Agreement
1.34 Loan Year: The term "Loan Year'' shall mean each of the successive twelve (12)
month periods commencing as of the date of this Loan Agreement.
1.35 Net Income. The term "Net Income" shall have the meaning determined in
accordance with GAAP.
1.36 Net Worth. The term "Net Worth" shall mean Borrower's total assets minus total
1.37 Note. The term "Note" shall mean , (i) that certain promissory note dated of even
date herewith in the original principal amount of $2,000,000.00 from Lender to Staci
Produce (the "Staci Produce Note"), (ii) that certain promissory note dated of even date
herewith in the original principal amount of $2,400,000.00 from Lender to Staci Properties
(the "Staci Properties Note"), (iii) that certain promissory note dated March 23, 2001 in the
original principal amount of $2,880,000.00 from Lender to A tied (the "A tied Note"), and {iv)
that certain line of credit dated May 1, 2003 in an amount up to $750,000.00 from Lender
to Delta Produce (the "Delta Produce Note"), collectively, which evidences the Loan.
1.38 Person. The term "Person" shall mean any individual, corporation, trust,
unincorporated organization, Governmental Authority or any other form of entity.
1.39 Proper Form. The term "Proper Form" shall mean in a form and substance
satisfactory to Lender.
1.40 Security Instruments. The term "Security Instruments" shall mean this Loan
Agreement, the Note, each Guaranty executed in connection with the Note, and such other
instruments or documents evidencing, securing, or pertaining to the Loan as shall, from
time to time be executed and delivered by Borrower, Guarantor, or any other party to
Lender pursuant to this Loan Agreement or otherwise.
102322.5 7
)
( ..
2.01 The Loan.
ARTICLE II
AGREEMENTS OF LENDER
(a) Loan. Subject to the terms and conditions set forth herein prior to closing,
Lender hereby agrees to lend (i) TWO MJLLION AND NO /100 DOLLARS ($2,000,000.00)
and Staci Produce hereby agrees to borrow TWO MILLION AND N0/100 DOLLARS
($2,000,000.00) in connection with the Staci Produce Loan; and (ii) TWO MILLION FOUR .
HUNDRED THOUSAND AND N0/1 00 DOLLARS ($2,400,000.00) and Staci Properties
hereby agrees to borrower TWO MILLION FOUR HUNDRED THOUSAND AND N0/1 00
DOLLARS in connection with the Staci Properties Loan: Prior to the date hereof, Lender
has agreed to lend (i) TWO MILLION EIGHT HUNDRED EIGHTY THOUSAND AND
N0/100 DOLLARS ($2,880,000.00) and Atled agreed to borrow TWO MILLION EIGHT
HUNDRED EIGHTY THOUSAND AND N0/100 DOLLARS ($2,880,000.00), and (ii)
SEVEN HUNDRED FIFTY THOUSAND AND N0/1 00 DOLLARS ($750,000.00) and Delta
Produce agreed to borrow up to SEVEN HUNDRED FIFTY THOUSAND AND N0/100
DOLLARS ($750,000.00).
(b) Terms. The Staci Produce Note and the Staci Properties Note shall bear
interest at the rate of the New York Prime Rate, floating, as defined in such Notes, plus
one-quarter of one percent and otherwise as set forth in such Notes.
(c) Loan Fees.
(i) One Half of one percent of the Staci Produce Loan or $10,000.00
payable upon closing of the Loan. Legal fees paid by Borrower.
(ii) One Half of one percent of the Staci Properties Loan or $12,000.00
payable upon closing of the Loan. Legal fees paid by Borrower.
2.02 Conditions to the Loan. The obligations of Lender to make the Loan are subject to
the satisfaction of the following conditions:
(a) The Borrower and Guarantor shall have delivered to Lender such certificates
and other documents relating to the transaction herein contemplated and such other
information relating to the Borrower or Guarantor, as the case may be, as the Lender may
require.
(b) Lender shall have received the Security Instruments, each of which shall be
in Proper Form and duly executed.
(c) Lender shall have received the Staci Produce Note and the Staci Properties
Note, which shall be in Proper Form and been duly executed by Borrower.
(d) Borrower shall have paid all Lender's expenses, including its legal fees.
102322.5 8
(e) Except where expressly authorized to the contrary and except as set forth on ,
the Schedule attached hereto as Exhibit "A", Lender shall have received satisfactory . )
evidence to the Lender that the Security Instruments create first, prior and enforceable
liens against the Collateral owned by Staci Produce, Ltd.; provided, however, that the real
property owned by Staci Properties, Ltd. shall be pledged, subject to the permitted
encumbrances described on Exhibit "B".
(f) Lender shall have received the Security Instruments, each of which shall be
in Proper Form and duly executed.
(g) Lender shall have received an executed copy of each consent, if any, of any
Governmental Authority or other person which, in the opinion of the Lender, is required in
(i) Such other items as Lender may require.
ARTICLE Ill
REPRESENTATIONS AND WARRANTIES OF BORROWER AND GUARANTOR
Borrower and Guarantor hereby represent and warrant the following to be true, as
the case may be as of the date of the execution hereof:
3.01 The Financial Statements. The Financial Statements are true, correct, and
complete in all material respects as of the dates specified therein and fully and accurately
present the financial condition of Borrower and, if required, of Guarantor as of the dates
specified. No material adverse change has occurred in the financial condition of Borrower
or Guarantor since the dates of the Financial Statements.
3.02 Suits, Actions, Etc. There are no material actions, suits, or proceedings pending or,
to the knowledge of Borrower and Guarantor, threatened in any court or before or by any
Governmental Authority against or affecting Borrower, Guarantor, or the Property, except
as described in writing to Lender, or involving the validity, enforceability, or priority of any of
the Security Instruments, at law or in equity. The consummation of the transactions
contemplated hereby, and the performance of any of the terms and conditions hereof and
of the other Security Instruments, will not result in a breach of, or constitute a default in,
any mortgage, deed of trust, lease, promissory note, loan agreements, credit agreement,
partnership agreement, or other agreement to which Borrower or Guarantor is a party or by
which Borrower may be bound or affected.
3.03 Valid and Binding Obligation. All of the Security Instruments, and all other
documents referred to herein to which Borrower is a party, upon execution and delivery will
constitute valid and binding obligation of Borrower, and Guarantor, enforceable in
accordance with their terms except as limited by Debtor Relief Laws.
102322.5 9
3.05 Loan Purpose. Borrower has requested the extension of credit to be represented by
the Loan for business, commercial, investment or other similar purpose and not primarily
for personal, family, household or agricultural use.
3.06 Disclosure. To the knowledge of Borrower and Guarantor, there is no fact that
Borrower has not disclosed to Lender in writing that could materially adversely affect the
property, business or financial condition of Borrower or the Collateral.
3.07 Inducement to Lender. The representations and warranties contained in the
Security Instruments are made by Borrower as an inducementto Lender to make the Loan
and Borrower understands that Lender is relying on such representations and warranties
and that such representations and warranties shall survive any bankruptcy proceedings
involving Borro"":'er, Guarantor, or the Collateral.
3.08 Organization and Power (Applicable to Corporation Borrower).
(a) is a corporation duly organized, validly existing under the laws of the state of
its incorporation and in good standing under the laws of the state of its incorporation and
the laws of the State of Texas; and
(b) has complied with all conditions prerequisite to its lawfully doing business in
the state where the Collateral is situated; and
(c) has all requisite corporate power and all governmental certificates of
authority, licenses, permits, qualifications, and documentation to own, lease, and operate
its properties and to carry on its business as now being, and as proposed to be, conducted.
3.09 Organization and Power (Applicable to Partnership or Joint Venture Borrower).
Borrower is duly organized and validly existing under applicable State laws, and all Security
Instruments and other loan documents are within Borrower's powers, have been duly
authorized by all requisite action and are not in contravention of law or the power of
Borrower's partnership or joint venture agreement, as the case may be.
3.10 Existence of Borrower. Borrower shall preserve and keep in full force and effect
Borrower's existence, rights, franchises, and trade names.
3.11 Compliance with Laws. Borrower, the Collateral, and the use thereof by Borrower
shall comply with all laws, rules, ordinances, regulations, covenants, conditions,
restrictions, orders and decrees of any governmental authority or court applicable to
Borrower or the Collateral and its use, and Borrower shall pay all fees or charges of any
kind in connection therewith.
102322.5 10
1. Borrower shall deliver to Lender, within one hundred twenty (120) days after
the end of each calendar year the income and expense statements, in
Proper Form, itemizing the income and expenses of the Borrower. Within
one hundred twenty (120) days of the filing of Borrower's tax return, Borrower
shall deliver to Lender its annual financial statement, together with a copy of
its tax return. Borrower agrees that it shall file its tax return in a timely
manner provided, however, the filing of such tax return shall be subject to
extensions that are filed timely.
2. Additionally, Borrower shall forward to Lender monthly financial statements in
Proper Form which may be unaudited, such statements to be delivered to
Lender within fifteen (15) days after the end of each month during the term of
this Note.
3. Guarantor shall at least annually submit copies of its financial statement and
tax returns to Lender, which information shall also be furnished to Lender
within one hundred twenty (120} days of the filing ofBorrower's tax return. In
the event that Borrower is in default, Lender reserves the right to from time to
time request additional financial information of either Borrower or Guarantor .
. All financial statements of the Borrower shall be prepared in accordance
with GAAP, certified to be true and correct by the person delivering them and
otherwise be in Proper Form.
3.13 Hold Harmless. Borrower shall defend, at Borrower's own cost and expense, and
hold Lender harmless from any proceeding or claim affecting the Collateral or the Security
Instruments and other loan documents. All costs and expenses incurred by Lender in
protecting its interests hereunder, including all court costs and reasonable attorneys' fees,
shall be borne by Borrower.
3.14 Further Assurances. Borrower, upon the request of Lender, shall execute,
acknowledge, deliver, and record such further instruments and do such further acts as may
be necessary, desirable or proper to carry out the purposes of the Security Instruments and
other loan documents and to subject the liens and security interests created thereby and
property intended by the terms thereof to be covered thereby, including specifically, but
without limitation, any renewals, additions, substitutions, replacements, improvements, or
appurtenances to the Collateral.
ARTICLE IV
GUARANTY
The A tied Loan and the Delta Produce Loan have been guaranteed by Walter Scott
Jensen, and evidenced by a Guaranty in Proper Form. The Staci Produce Loan and the
Staci Properties Loan shall be guaranteed by WALTER SCOTT JENSEN AND JAMIE
JENSEN and evidenced by a Guaranty in Proper Form.
102322.5 11
ARTICLEV
Borrower hereby covenants and agrees as follows:
5.01 Compliance with Governmental Requirements. Borrower shall, comply with all
Governmental Requirements and deliver to Lender evidence thereof. Borrower assumes
full responsibility for the compliance of the Collateral with all Governmental Requirements,
notwithstanding any approvals by Lender.
5.02 Notices by Governmental Authority, Fire and Casualty Loss. Etc. Borrower shall
timely comply with and promptly furnish to Lender true and complete copies of any official
notice or claim by any Governmental Authority pertaining to the Collateral. Borrower shall
promptly notify Lender of any fire or other casualty or any notice of taking or eminent
domain action or proceeding affecting the Collateral.
5.03 Other Liens and Indebtedness. Except as otherwise provided for in this Loan
Agreement or in any of the other Security Documents, Borrower shall not suffer or permit to
exist, or permit any lien upon the Collateral, except those liens securing the Loan;
provided, however, that the Borrower may create or suffer to exist liens for taxes, but only
to the extent that payment thereof shall not at the time be due.
5.04 Costs and Expenses. Borrower shall pay when due all costs and expenses required
by this Loan Agreement, including, without limitation,
(a) all taxes and assessments applicable to the Collateral;
(c) all fees and commissions lawfully due to brokers, salesmen, and agents of
Borrower in connection with the Loan, or the Collateral; and
(d) all reasonable fees and expenses of counsel of Lender.
5.05 Additional Documents. Borrower and Guarantor shall execute and deliver to
Lender, from time to time as requested by Lender, such other documents as Lender may
deem to be necessary to provide the rights and remedies to Lender granted or provided for
by the Security Instruments; provided, however, such additional documents shall not
increase or create new rights or remedies or otherwise expand the rights and remedies of
Lender under the original documents.
5.06 Inspection of Books and Records. Borrower shall permit Lender, at all reasonable
times, to examine and copy the books and records of Borrower pertaining to the Loan, in
particular related to the inventory, receivables and payables of Borrower.
102322.5 12
5.07 Defense of Actions. Lender may (but shall not be obligated to) commence, appear
in, or defend any action or proceeding purporting to affect the Loan, the Collateral, or the
respective rights and obligations of Lender and Borrower pursuant to this Loan Agreement.
Lender may (but shall not be obligated to) pay all necessary expenses, including
reasonable attorney's fees and expenses incurred in connection with such proceedings or
actions, which Borrower agrees to repay to Lender upon demand.
5.08 Payment of Claims. Borrower shall promptly pay or cause to be paid when due all
costs and expenses incurred in connection with the Collateral. Notwithstanding anything to
the contrary contained in this Loan Agreement, Borrower
(a) may contest any tax or special assessments levied by any Governmental
Authority; and
(b) may contest the enforcement of or compliance with any Governmental
Requirements, and such contest on the part of Borrower shall not be a default hereunder
and shall not release Lender from its obligations to make any Advance hereunder;
provided, however, that during the pendency of any such contest, Borrower shall furnish to
Lender an indemnity bond with corporate surety satisfactory to Lender or other security
acceptable to them in an amount equal to the amount being contested plus a reasonable
additional sum to cover possible costs, interest, and penalties, and provided further that
Borrower shall pay any amount adjudged by a court of competent jurisdiction to be due,
with all costs, interest, and penalties thereon, before such judgment becomes a lien on the
Collateral. J
5.09 Liens. Except as permitted herein, Borrower shall not impose any other liens or
encumbrances upon the Collateral, without the prior written consent of Lender.
5.10 Cash Flow Coverage.
(a) So long as any part of the principal of or interest on the Loan or any other
indebtedness of Borrower to Lender or any Affiliate shall remain unpaid, the Borrower shall
maintain a ratio of Cash Flow Coverage Ratio for the immediately preceding twelve (12)
month period of not less than 1.75 (the "Minimum Cash Flow Coverage Ratio"), which ratio
shall be calculated on an annual basis, but shall be tested on a rolling quarterly basis as
described below.
(b) The Cash Flow Coverage Ratio shall be determined within thirty (30) days
after the last day of each September, December, March and June during the term of the
Loan with respect to the immediately preceding twelve (12) month period (each period
referred to as a "Cash Flow Coverage Ratio Period"). T h ~ Borrower shall provide a -
certificate, along with all necessary back-up information supporting such certificate (each
such certificate referred to as a "Cash Flow Ratio Coverage Certificate") in form and
substance satisfactory to Lender which Cash Flow Ratio Coverage Certificate shall certify
as to the Cash Flow Coverage Ratio during the Cash Flow Coverage Ratio Period. The
Borrower covenants and agrees that the Cash Flow Coverage Rati9 may not be less than
102322.5 13
(.
the Minimum Cash Flow Coverage Ratio for any Cash Flow Coverage Ratio Period during
(c) Notwithstanding anything set forth above to the contrary, the first Cash Flow
Coverage Ratio shEtll be determined for the nine (9) month period commencing on April1,
2005 through and including December 31, 2005 (the "Initial Period"). The Cash Flow Ratio
Coverage Certificate for the Initial Period shall be provided to Lender on or before January
30, 2006. The Borrower covenants and agrees that the Cash Flow Coverage Ratio for the
Initial Period may not be less than the Minimum Cash Flow Coverage Ratio.
(d) Subsequent to the determination made for the Initial Period, the Cash Flow
Coverage Ratio shall be calculated on the basis of twelve month periods as set forth in
Section 5.10 (b) above.
5.11 Additional Payment Obligations.
(a) Borrower agrees that in addition to the regularly scheduled installments of
principal and interest which are due and payable as described in the Note, Borrower shall
make annual principal reductions in an amount equal to the Cash Flow Recapture Amount.
Each annual payment of Cash Flow Recapture Amount, if applicable, shall be paid to
Lender on or before the date which is ninety (90) days after the end of each Fiscal Year
during the term of the Note, commencing with the Fiscal Year ending December 31, 2005.
Each payment of Cash Flow Recapture Amount shall be accompanied by financial
statements describing, among other things, the Cash Flow Recapture Amount.
(b) Any payment of Cash Flow Recapture Amount shall be utilized first to release
the outstanding balance under the Staci Produce Loan. At such time as the Staci Produce
Loan has been repaid in its entirety, any payment of Cash Flow Recapture Amount shall be
utilized to reduce the outstanding balance owed in the following order: Staci Properties
Loan, Atled Loan, Delta Produce Loan.
5.12 Borrowing Base. Borrower agrees that the outstanding principal balance of the
Loan at any time during the term of the Loan may not exceed the Borrowing Base.
Borrower shall provide to Lender, within fifteen (15) days after each calendar month during
the term of the Loan, a Certificate, along with all necessary back-up information supporting
such certificate (each such certificate referred to as a "Borrowing Base Certificate") in form
and substance satisfactory to the Lender which shall indicate that the then outstanding
balance of the Loan (the "Existing Balance") is less than or equal to the Borrowing Base.
If, at any time during the term of the Loan, the Existing Balance exceeds the Borrowing
Base, then the Borrower agrees to immediately reduce the Existing Balance so that the
Existing Balance is either equal to or less than the Borrowing Base.
5.13 Lockbox. Borrower shall ensure that, during the term of the Loan, all receivables
owed to Borrower shall be paid by all customers to a lockbox ("Lockbox'') established by
Borrower and maintained with the Lender. Prior to an Event of Default (as defined herein),
and subject to the terms of this Loan Agreement and the other Security Instruments,
102322.5 14
Borrower shall be entitled to utilize the funds deposited in the Lockbox; provided, however, ~ . '\
that upon an Event of Default (as defined herein), and subject to any notice and J
opportunity to cure granted to the Borrower, the Lender shall be entitled to apply funds
then maintained in the Lockbox to reduce the then outstanding delinquency or otherwise to
cure such Event of Default or, in the event of an acceleration of the Note, to reduce all or a
part of the outstanding principal balance of the Note.
ARTICLE VI
6.01 Rights of Lender. Upon the occurrence of a monetary Event of Defautt, Lender shall
have the right, in addition to any other right or remedy of Lender, but not the obligation, to
exercise any remedy set forth in any of the Security Instruments or any right authorized by
the Uniform Commercial Code of the State of Texas. Borrower hereby appoints Lender as
the attorney-in-fact of Borrower, with full power of substitution, and in the name of
Borrower, if Lender elects to do so, upon the occurrence of an Event of Default, to
(a) endorse the name of Borrower on any checks or drafts representing proceeds
of the Insurance Policies, or other checks or instruments payable to Borrower with respect
to the Collateral for the sole purpose of payment of the Notes;
(b) prosecute or defend any action or proceeding incident to the Collateral; and
(c) terminate the license granted to Borrower to collect the funds from the
Lockbox, give receipts and releases therefore, and after deducting all expenses of
collection, including reasonable attorneys' fees, apply the net proceeds thereof to any
Indebtedness as Lender may elect;
The power-of-attorney granted hereby is a power coupled with an interest and
irrevocable. Lender shall have no obligation to undertake any of the foregoing actions, and
if Lender should do so, it shall have no liability to Borrower for the sufficiency or adequacy
of any such actions taken by Lender.
6. 02 Acceleration. Upon the occurrence of an Event of Default Lender may, at its option,
declare the Loan immediately due and payable without notice of any kind.
6.03 Funds of Lender. Any funds of Lender used to cure any default hereunder shall be
secured by the Security Instruments and shall bear interest at the rate specified in the Note
or to applicable after default thereunder.
hereunder, in the other Security Instruments, or otherwise, shall be considered a waiver of
any other or subsequent right or remedy of Lender, no delay or omission in the exercise or
enforcement by Lender of any rights or remedy of Lender; and, no exercise or enforcement
of any such rights or remedies shall ever be held to exhaust any right or remedy of Lender.
102322.5 15
6.05 Rights and Remedies of Sureties. Borrower waives any right or remedy which
Borrower may have or be able to assert pursuant to Chapter 34 of the Business and
Commerce Code of the State of Texas pertaining to the rights and remedies of sureties.
ARTICLE VII
GENERAL TERMS AND CONDITIONS
7.01 Notices. All notices, demands, requests, and other communications required or
permitted hereunder shall be in writing and shall be deemed to have been given when
presented personally or deposited in a regularly maintained receptacle for the United
States Postal Service, postage prepaid, registered or certified, return receipt requested
addressed to Borrower or Guarantor or Lender, as the case may be as follows:
(a) If to Borrower to:
STACI PRODUCE, LTD.
STACI PROPERTIES, LTD.
ATLED, LTD. and
DELTA PRODUCE, L.P.
2001 South Laredo Street
(b) If to. Lender. to:
Attn: Mike Sohn
130 E. Travis
(c) If to Guarantor, to:
Walter Scott Jensen and
Jamie Jensen
understanding and agreement between the undersigned with respect to the transaction
arising in connection with the Loan and supersedes all prior written or oral understandings
and agreements between the undersigned in connection therewith. No provision of this
Loan Agreement or the other Security Instruments may be modified, waived, or terminated
except by instrument in writing executed by the party against whom a modification, waiver,
or termination is sought to be enforced.
7.03 No Waiver. No waiver of any default on the part of Borrower or any other party
hereto or breach of any of the provisions of this Loan Agreement or of any other instrument
executed in connection with the Loan shall be considered a waiver of any other or
subsequent default or breach, and no delay or omission in exercising subsequent default or
breach, and no delay or omission in exercising or enforcing the rights and powers herein
102322.5 16
granted shall be construed as a waiver of such rights and powers, and likewise no exercise . . \
or enforcement of any rights or powers hereunder shall be held to exhaust such rights and I
powers, and every such right and power may be exercised from time to time. Acceptance
by Lender of partial payments shall not constitute a waiver of the default by failure to make
full payments.
7.04 Severability. If any provision of this Loan Agreement is held to be illegal, invalid, or
unenforceable under present, or future laws effective while this Loan Agreement is in
effect, the legality, validity, and enforceability of the remaining provisions of this Loan
Agreement shall not be affected thereby and in lieu of each such illegal, invalid, or
unenforceable provision there shall be added automatically as a part of this Loan
Agreement a provision that is legal, valid and enforceable and as similar in terms to such
illegal, invalid, or unenforceable provisions as may be possible. If any of the Indebtedness
shall be unsecured, the unsecured portion of the Indebtedness shall be completely paid
prior to the payment of the secured portion of such Indebtedness, and all payments made
on account of the Indebtedness shall be considered to have been paid on and applied first
to the complete payment of the unsecured portion of the Indebtedness.
7.05 Modification or Termination. The Security Instruments and other loan documents
may only be modified or terminated by a written instrument or instruments executed by the
party against which enforcement of the modification or termination is asserted. Any alleged
modification or termination that is not so documented shall not be effective as to any party.
7.06 No Partnership. Nothing contained in the Security Instruments or other loan
documents is intended to create any partnership, joint venture or association between
Borrower and Lender, or in any way make Lender a co-principal with Borrower with
reference to the Collateral, and any inferences to the contrary are hereby expressly
negated.
7.07 Election of Remedies. Lender shall have all of the rights and remedies granted in
the Security Instruments and available at law or in equity, and these same rights and
remedies shall be cumulative and may be pursued separately, successively, or
concurrently against Borrower, Guarantor, or any property covered under the Security
Instruments at the sole discretion of Lender. The exercise or failure to exercise any of the
same shall not constitute a waiver or release thereof or of any other right or remedy, and
the same shall be non-exclusive.
7.08 Form and Substance. All documents, certificates, insurance policies, and other
items required under this Loan Agreement to be executed and/or delivered to Lender shall
be in form and substance satisfactory to Lender.
existing or hereafter arising and whether written or oral, are hereby limited so that in no
otherwise, shall the interest paid, or agreed to be paid to Lender exceed the maximum
permissible under applicable law. If from any circumstances whatsoever, interest would
102322.5 17
-.-\
otherwise be payable to Lender at a rate in excess of that permitted under applicable law,
then, the interest payable to the Lender shall be reduced to the maximum amount
permitted under applicable law, and if from any circumstance Lender shall ever receive
anything of value deemed interest by applicable law which would exceed interest at the
highest lawful rate, an amount equal to any excessive interest shall be applied to the
reduction of the principal amount owing under the Note and not the payment of interest, or
if such excessive interest exceeds the unpaid balance of principal of the Note, such excess
shall be refunded to the Borrower. All interest paid or agreed to be paid to Lender shall, to
the extent permitted by applicable law, be amortized, prorated, allocated, an'd spread
throughout the full period until payment in full of the principal of the Loan (including the
period of any renewal or extension thereof) so that interest thereon for such full period shall
not exceed the maximum amount permitted by applicable law. This paragraph shall control
all agreements between the Borrower and the Lender.
7.10 No Third Party Beneficiarv. This Loan Agreement is for the sole benefit of Lender,
Borrower and Guarantor and is not for the benefit of any third party, except for any
successor or assign of Lender.
7.11 Number and Gender. Whenever used herein, the singular number shall include the
plural and the singular, and the use of any gender shall be applicable to all genders. The
duties, covenants, obligations, and warranties of Borrower in this Loan Agreement shall be
joint and several obligations of Borrower, and of each Borrower if more than one.
7.12 Captions. The captions, headings, and arrangements used in this Loan Agreement
are for convenience only and do not in any way affect, limit, amplify, or modify the terms
and provisions hereof.
7.13 Applicable Law. This Loan Agreement and the Security Instruments shall be
governed by and construed in accordance with the laws of the State of Texas and the laws
of the United States applicable to transactions within such State.
7.14 Conflicts Between Security Instruments. In the event of a conflict between the
provisions of this Loan Agreement and those of any other Security Instrument, the terms
and conditions of this Loan Agreement shall control, except that nothing herein shall be
construed to limit or preclude any of the Lender's rights or remedies contained in the Note.
7.15 NOTICE TO LENDER UPON BREACH. BORROWER AND GUARANTOR AGREE
TO GIVE LENDER WRITTEN NOTICE OF ANY ACTION OR INACTION BY LENDER OR
ANY AGENT OR ATTORNEY OF LENDER IN CONNECTION WITH THIS AGREEMENT
REASON, INCLUDING, BUT NOT LIMITED TO, COMMISSION OF A TORT OR
VIOLATION OF ANY CONTRACTUAL DUTY OR DUTY IMPLIED BY LAW. BORROWER
AND GUARANTOR AGREE THAT UNLESS SUCH NOTICE IS DULY GIVEN AS
PROMPTLY AS POSSIBLE (AND IN ANY EVENT WITHIN NINETY (90) CALENDAR
DAYS OR IF A LONGER PERIOD IS REQUIRED BY LAW IN ORDER FOR THIS
102322.5 18
WAIVER TO BE EFFECTIVE SUCH LONGER PERIOD) AFTER BORROWER OR
GUARANTOR HAS KNOWLEDGE OR WITH THE EXERCISE OF REASONABLE '1
DILIGENCE SHOULD HAVE HAD KNOWLEDGE OF ANY SUCH ACTION OR INACTION,
BORROWER AND GUARANTOR SHALL NOT ASSERT, AND BORROWER AND
. GUARANTOR SHALL BE DEEMED TO HAVE WAIVED, ANY CLAIM OR DEFENSE
ARISING THEREFROM.
7.16 Multiple Counterpart Originals. This Agreement may be executed in a number of
identical counterparts which, taken together, shall constitute collectively one (1) agreement;
but in making proof of this Agreement, it shall not be necessary to produce or account for
more than one such counterpart.
7.17 No Oral Agreements. If the amount involved in your loan agreements exceeds
$50,000.00 in value, then Texas law requires that you be notified of the following: THE
WRITTEN LOAN AGREEMENT REPRESENT 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.
7.18 Successors and Assigns. This Agreement is binding on the parties hereto and their
respective heirs, successors and assigns; however, neither Borrower nor Guarantor may
assign their rights hereunder without the prior written consent of Lender, which Lender may
withhold in its absolute discretion and there are no third party beneficiaries to this
agreement.
7.19 Loan Agreement Superceded. This Loan Agreement supercedes any loan
agreement(s) previously executed by any of the entities comprising the Borrower, in favor
of Lender in connection with any Loan, which prior loan agreement(s) is/are no longer in
force or effect.
IN WITNESS WHEREOF, the Borrower or any Guarantor and Lender have caused
this Agreement to be duly executed by their respective officers thereunto duly authorized
as of the '2- day of March, 2005.
102322.5 19
. .
BORROWER:
BY:
BY:
DELTA PRODUCE, L.P.,
BY: WSJ PRODUCE, L.L.C.,
A NEVADA LIMITED LIABILITY
COMPANY
BY:
ATLED, LTD.,
BY:
102322.5
20
LENDER:
BY:

TITLE: __________________ _
.:.)
102322.5 21
EXHIBIT "A"
"Staci Produce Debt"
102322.5
22
EXHIBIT "8"
Staci Properties Permitted Exceptions
102322.5
23
(- - .- .
Exhibit "A"
' Permitted.Ericumbrances to STACI Produce, Ltd.
UCC1 Liens:
1. UCC1 File No: 00-632841 filed by NMHG Financial Services, Inc. (as Secured
Party) with the Texas Secretary of State
2. UCCl File No. 02-0025297421 filed by DeLage Landen Financial Services, Inc.
(as Secured Party) with the Texas Secretary of State
3: UCC1 File No. Ol-0036333323 filed by US Bancorp (as Secured Party) with the
Texas Secretary of State
Page 1 of 1
Exhibit "B" . .
Permitted Encumbrances to Real Property
A.. Reserirations from and Exceptions to Conveyance and Warranty of Real Property as set
forth in that certain Special Warranty Deed With Vendor's Lien dated March 2, 2005 conveying
title to STACI Properties, Ltd.: .
I.
2.
3.
4.
5.
6.
7.
8.
. .
. Restrictive covenants recorded in Volume 340, Page 195, Volume 340, .
.. Page 76, Volume 356, Page 67, Volume 362, Page 274, Volume 340, Page .
197, Voliune 353, Page 362, Volume 353, Page 375, Volume 390, Page
52, Volume 332, Page 508, and Volume 11112, Page 333, Official Public
. Records ofRea1 Property ofBexarCounty, Texas.
. Taxes for 2005, which . Grantee assumes and agrees to pay; but not
subsequent assessments for that and prior years due to change in land
usage, ownership, or both, the payment of which Grantor assumes.
30 foot building setback line along the front of subject property, as shown
on the plat recorded in Volume 3975, Page 223, Deed and Plat Records of
Bexar County, Texas. And as shown on Survey dated 2/24/05, by Bury & .
Partners, Job # 50501-01.92. (Tract 2)
.10 foot building setback line as shown on plat in Vo1ume9555,
Page 72, Deed and Plat Records of Bexar County, Texas. And as shoWn
on Survey dated 2/24/05, by Bury & Partners, Job# 50501-01.92. (Tract
1). . . .
. 28 foot gas; electric, telephone and cable T.V. as shown on piat
recorded in Volume 9555, Page 72, Deed and Plat Records of Bexar
. County, Texas. And as shown on Survey. dated 2/24/05, by Bury &
Partners, Job# 50501-01.92. (Tract 1)
Waterline recorded in 4719, Page 74, Deed Records,
Bexar County, Texas. And as shown on Survey dated 2/24/05, by Bury &
Partners, Job # 50501-01.92. (Tract 1)
Memorandum of lease recorded in Volume 9254, Page 1575, Volume
. 10242, Page 1571, Volume 9184, Page 556 and Volume 10234, Page
1297, Official Public Records of Real Property of Bexar County, Texas.
And as shown on Survey dated 2/24/05, by Bury & Partners, Job# 50501- .
0 1.92. (Tract 1) .
20 foot building setback line as shown on plat recorded in Volume 9555,
. Page 72, Deed and Plat Records ofBexar County, Texas. And as shown
Page 1 of2
.
'- .. ./
on Sur-Vey dated 2/24/05, by Bury & Partners, Job# 50501-01.92. (Tract
1) . . .
. 9. 14 foot electric, gas, telephone and .Cable T.V. easement along Ceralvo
Street recorded in Volume 9555, Page 72, Deed and Plat Records of Bexar
County, Texas. And as shown on Survey dated 2/24/05, by Bury &
. Partners, Job# 50501-01.92. (Tract 1)
. 'B. . Items set forth in those. certain Estoppel and Agreements dated March 2,
2005 and executed by Frank T. Sepulveda and Superior Tomato-Avocado Co., Inc., a Texas
corporation.
. Page 2 of2
\
Trust - Staci Properties Ltd. 3.3.2005 Pg 1 of 15
;CANNEl) CHICAGO TITLE 2/ T\2---"
' ... :. : NOTICE OF CONFIDENTIA-,TY RIGHTS: IF YOU ARE A i .. ruRAL PERSON, fou MAY
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REMOVE OR ANY'OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT
BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY
NUMBER OR YOUR DRIVER'S LICENSE NUMBER. . . :If t..}Z. P
THE STATE OF TEXAS
COUNTY OF BEXAR
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FINANCING STATEMENT

. KNOW ALL MEN BY THESE PRESENTS:
THAT I, WE, or EITHER

County of 'Bexar State of Texas , someti:rries hereinafter called Grantors
(whether one or more) for the purposes of securing the .indebtedness hereinafter described, and in consideration of the sum of TEN
($10.00) hand paid by the Trustee named, the receipt and sufficiency of which is hereby acknowledged,
fm: the further consideration ofthri uses, purJ:loses and the trusts hereinafter set forth, haVe GRANTED; SOLD, AND CONVEYED,
and by these presents do GRANT, SELL arid CONVEY Steve Edlund Trustee, of
International Bank of "Commerce, 130 E. TraVis, Sari Antonio, Bexar County, Texas 78205 and his substitutes or successors, a\1 of the
described property_ situated .in . Bexar County, Texas (hereinafter the "Property"), to-wit:"
See Exhibit
11
A
11
attached hereto and made a part hereof _for all purp0ees.
r
. LTi-77-20050045398-1
lllllllllllllllll\\lllllll\lllllllll II \llllll\llllllllll\1
LTZ-11257-319-15 .
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(i) one PrOmissory Note dated of even date herewith in the principal sum of trwo Million and
No/100 Dollars ($2,0bO",OOO.OO) (the..
11
Staci PrOduce Not;.e"), executed by St.aci Producei Ltd.,
and (ii) one Real EState Lien Note aated of eVen date herewith in the pripcipal sum of TWo
Million Hundred Thousand and No/100 Dollars {$2,400,000.00) (the ."Staci Properties, Ltd.

exesuted by Staci Properties, Ltd. (thestac"i Produce Note and the.".Staci Properties
Note. co.llectively :t;eferred "to as. the

TO HAVE AND TO HOLD the above described ProPerty, together with the rights, privileges and appurtenances thereto belonging
unto the sUid Trustee, and to his substitUtes or successors forever and Grantors do hereby bind themselves, their heirs, executors, admin-
and assigri.S to warrant and fOrever defend the said Premises unto the "said Trustee, hi.ssubstitutes or successors and assigns for-
against the clf4n or claims, of all personS claiming or tO" claim the same "any part thereof.
Tills hoWever, is made in TRUST to secure payment of

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xxxxxxxxxx:k:xx who together wi"th the above named GrantOrs, shall hereinafter collectively imd interchangeably be referred to as
Grantors, payable to the order of International Bank of Commerce
. . , hereinafter referred to as Beneficiary, in the City of San Antonio , Bexar County,
Texas and payable as therein including late charges; bearing interest as thf:rein stipulated, providing for acceleration of matu-
rity for reasonable and pecess<{ry attorney's feeS;
. should Grantors do and perfonn all of the cOvenants and.agreements .herein and payment of said indebtedness as the
same shall become due and th.en this conveyance shall bec01i"te null void and of no furthe[ force and effect, and shall be
released at the .expense of Grantors, by the h9Ider thereof, hereinafter called Beneficiary one or more). .
That they are lawfully seized of said PrOperty, in' fee simple and have the right to convey the same; that said Property is fr::1e
from all lien;:; and encumbrances, except as herein provided.
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To pmtect the title and possession of saidProperty l!lnd to pay when due all taxes and now existing or hereafter levied or
assessed upon said Property, or the intere5! created by this Deed 9fTrust, and to preserve and maintain the lien hereby creat-
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. ed as a 'first .and prior lien on said Property including any improvements hereafter made a part of the realty.
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To improvements on said Property in good repair and condition, and not to permit or commit any waste thereof; to ke.ep said
buildings occupied so as nOt to impair barrieP thereon.
To insure and keep insured all improvements now or hereafter created upon said Pfop.erty against loss or damage by fke and wind-
stoml, and any other hazard or llazards as may be re.asonaJ:!ly required from time to time by Beneficiary during the terin of the indebt-
edness hereby secured, to the extent of the total amount of the in!ebtedness heteby secured, or fo" tbe extent of the full insurabl.e value
of said improvements, whichever is the Jesser, in such form with such insurance company or companies as 111ay beapproved by
Beneficiary, and to deliver to Beneficiary the of insurance. having attached to said policies nortgage iD:demnity
clause as Berieficiary shall direct; to deliver renewa!s .of any such policies to Beneficiary at least ten (I 0) days befOre any such insur-
ance policies shall expire; any proceeds which Benefici?ry may receive such policy or policies, may be applied by Beneficiary,
at its option, to reduce the indebtedness hereby Whetller then matured or to mature in the future, and in such manner as
Beneficiaty may elect, or Beneficiary may.perniit Grantors to use sald repair- or replace all improvements damaged or
destroyed and covered by said policy.
That Beneficiary ffiay employ co.unsel for Udvice or other legal at Beneficiary's discretion in connection any dispute as to
the debt hereby secured or lien securing sllme of this instrUment; or anY or arbitration proceeding to which the Beneficiary
.may be made a partY on ac.count of this Hen or which affCct the title to. the Property on account of this lien or which may affect
the title to the Property securing the indebtedness hereby secured "oi whlclimay affect said debt or lien. Any reasonable arnd necessary
attorney's fees so incurred shall be added and be Part ofthf: debt hereby secured.
In addition to theJand and improvements Deed. covers and .all abstracts and. tide
furnished or to be furnished in connection With the making of the loan evidenced by said Note, the payrilent of which is secured
hereby.
Grantors a.!,>ree to pay on demand for all abstracts, title policies, recording fees and attoruey's fees incurred in connection
with either the closing of'the lonn secured herebY. or $e extension, modification and/or rearrangei:nent of any part of the
indebtedness secured hereby, or, in the alternative, suCh amounts expend!!d by Beneficiary shall be added to and be a part of the debt
hereby secured.
That in the everit Gt::tntors shall fail to keep the on the Property hereby in good repair and cotldition, or to pay
promptly when due all taxes and asses&ments, as atbresaiQ, or to preserve the prior lien of this Deed Of Trust on Said Property or to
keep the, buildings and improvements insured, ns aforesaid, or to deliver the policy, or of insurance or the renewal thereof to
Beneficiary, as aforesaid, then Beneficimy may, at hiS OP,tion, but 'l!fithout beiog required to do so, make such repairs, pay such taxes
and assessments, purchase any tax title thereon, remove !in)' prioi- liens, aild prosecute or defend any suits in relatiOn to the preserva-
tion of the prior lien of this Deed OfTruston said Property, or insure and keep insured the improvements thereon in any amount not
to exceCd that above stipulated; that any sums which may paid ou! bY. Beneficiary, including the costs, expenses and attorney's
fees paid in any suit affecting said Property when nec;::essary to the lie!l hereof and all other expenses and agreed to be paid
by Grantors under the Deed Of Trust whh::h not paid when.d!le shall beitdnterest from the dates of such at the prematu-
rity interest rate stilted in the Note hereby secured, a"nd -shall be deemed a Part of the debt hereby secufed and recovefable as such in
all In in the event GrantOrs shall fail to insui"ed, as aforesaid, or to deliver the
. policy or policies; of lnsunince or the renewal thereof to the .Benefici:iry, as aforesaid, the Beneficiaiy may, at his. option, but without
being required to do so, insure and keep the inip.rpvf,!'ments thereon ifl any anlount not to exceedthat above stipulated (includ-
ing without limitation, to the extent allowed by Jaw, the Insurance which tnay provide.coverage only foi
Beneficiary); that" aU sums paid for insurance premiums by as shall bear interest from the dates of such pay-
.ments at the prematurity interest rate contracted for in the Note hereby secured, and shall be paid by Grantors to Beneficiary upon
demimd, at" the Same. place at which the above-described Note is payable, ahd shall be deemed a part of the "debt hereby secured and
recoverable as.such iri all respects.
expressly agree annually to furnish Benefic;:iary. evi4endng payment of all taxes assessed against, and insur-
mice covering, the said Property. Such tax receiptS shal! be fiJmisl;ted on or befOre fifteen (15) days prior to the date such ta?Ces becOme
delinquent. The insurance receipt slmll be furnished 'ori or before ten (1 0) days prior to the date the cuirent iOsurance -covernge expires.
ff Grantors should fail to furnish such receipts, Beneficiary may require Grantors to deposit monthly with Benefi.ciary on the payment
dates specified in the Note hereby secured i-n i:o the monthly payment of principal and intere:st provided hl' the Note hereby
seClJI"Cd a sumegual to 1/12 of the estimated ani-mai"taX:eS hnd insUrance preriliurt1s covering.such Property, 'such estimatCs to be made
by Beneficiary: Beneficiary shall hold such dePOsits," without bond an'9- without uccrual of..illterest thereon, to fixes and insurance
premiums as they become" due, Ut_ltil the indebteQness secU:re"d hereby \sfully and the balanCe delivered to.Grantors.
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Subject to applicable: law and notwithstanding the option, and in its sole discretion, Beneficiary
may require Grantors to pay Beneficiary on the day mo"nthly payments are due under the Note, until the Note is paid in full, a sum
("Funds") for .(a) yearly taxes. and assessments whiclt may "attain priority over the lien of this Of Trust .as a lien on the Property;
(b) yearly leasehold payments ot "ground rents op. the_ Property, "if (c) yearly hazard or property insurance premiums; (d) yearly
flood insurance premiums, if any; (e) yearly insUrance premiUms; "if any; and (f) any sums payable by Grantors to
Beneficiary
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in accordance with the preceding paragraph, in lieu'ofthe pn:Yment of mortgage insurance premiums. These items are
"Escrow Hems". Beneficiary may, at any time, and h6id Funds in an amount not to exceed the maximum amount a lender
for a feder;u_ly related rriortgage loan maY require.for Gi.antor's e"scroW account under the Federal Real Estate Settlement" Procedures
Act of 1974 as amended from time to time, 12 U.S.C. Section 2601,: et seq. ("RESPA''), unless another law that applies to the Funds
sets a amount. If so, Beneficiary may, at any time; c6Ile.ct and hold Funds in any amo:unt not to exceed the lesser amount
Beneficiary may estimate the amount of Funds due on !he basiS of. current data and reasonable of expenditures of future
Escrow Items or .otherwise in accordance Jaw.
The FundS shall be held in an institution whose deposits are insured by a federnl agency; instiumentality, or e.n"tity (including
if Beneficiary is such an institution) or in any Federal. Home Loan Bank. Beneficiary shall apply to pay the
Escrow Items. Beneficiary may not charge Grantors for holding and applying the Funds, annually analyzing the escrow account, or
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veri.fYjng the Items, unless Bemificiary pays Borrower :iD.terest on the Funds and 3pplicable law permits Beneficiary to
such a charge, H9.wevm-, may re_qu_ire Grantors t-o payaone-:.tin;le ebaFge for an independent real estate: tax :reporting serv-
ice used by Beneficiary in connection with this loan, applicable law provides Unless agreement is m.ade or applica-
ble law requires interest to be paid, Beneficiary shall not be required to pay Grantors any interest or earnings on the Funds. Grantors
and Beneficiary may agref: in writing, however, that inie!est be paid on the Funds. If required by law, Beneficiary shall give to
Grantors, without charge, an annual accounting of the Funds, showing credits and debits to the Funds and the purpose for which each
debit to the Funds was made. The Funds are pledged as additional security for all sums secured by this Deed Of Trust.
If the Funds held b}r Beneficiary exceed the amoUnts permitted to be held by applicable law, Beneficiary shall account to Grantors for
the excess Funds in accordance with the requirements of applicable law. If the amount pf the Funds held by Beneficiary at any time
not sufficient to pay the Escrow Items when due, Beneficiary may so notify Grantors in wiiting, and, in such case Grantors shall pay
to Beneficiary the amount necessary to make up the deficiency. Grantors shall make up the deficiency in no more than twelve (12)
monthly at sole discretion.
payment in full of all secured by Deed Of Trust, shan promptly refund to Grantors any Funds held by
Beneficiary. If, under foreclosure proceedings, Beneficiary shall acquire or sell the Property, Beneficiary upon the acquisition or sale
. of the" Property, shall apply any Funds held by Beneficiary at the time of the acquisitiOn or sale as a credit against the sums secured by
this Deed OfTrust.
Grantors shall not impose, or permit to be imposed, any restrictive covenants upon the Property herein described or execUte or file, or
pemrit to be flled, any subdivision plat or condominium declaration or other instrument affecting said Property Without the prior writ-
"ten consent
All agreements between any of the parties hereto are hereby limited by these provisions which shall override all such agree-
ments, whether now existing or thereafter arising. If from a constructiOn of any document related to any transaction between
Bank, Grantors and/or any other person or entity executing this Deed Of Trust, any term(s) or provision(s) of any document is
in conflict with applicable law, such document shall be automatically reformed and modified as to comply with applicable law,
without the necessity of execution of any amendment- or new document.
That in the event of default in the payment of any installment, princjpal or interest, or of a late charge, of the Note hereby secured, or
in the payment, when dUe, of any other indebtedness secured hereby, in accordance with the tenns thereof, or of a breach of aity of the
covenants herein contained to be performed by Grantors then and in any of such events Beneficiary shall, at Beneficiary's option,
GRANTORS HEREBY EXPRESSLY WANE NOTICES OF NON-PAYMENT, PRESEN1MENT FOR PAYMENT, PRESENTA-
TIONS/DEMANDS FOR PAYMENT, NOTICES OF INTENTION TO ACCELERAIE MATURITY, NOTICES OF ACTUAL
ACCELERATION OF MATURITY, PROTESTS, AND NOTICES OF PROTEST, accelerate the maturity of the Note(s) hereby
secured and the entire outstanding and unpaid principal indebtedness hereby secured together with all accrued andunpaid IDterest
thereon, all accrued and unpaid late charges, fees and othe_r sums shall thereby become immedjately due and payable, and in the event
of default in the payment of said inde.btedness when due or declared due, it shall thereupon, or at any time thereafter, be the duty of
the Trustee, or his successor or substitute as hereinafter provided, at the request of Beneficiary (which request is hereb'"y conclusively
presumed), to enforce this trust; and after advertising the .time, place and terms of the sale of the above described and conveyed
Property, then &ubject to the lien hereof, for at least twenty-one (21) days preceding the date .of sale by posting written or printed notice
thereof at the County Courthouse and by filing a copy of such notice in the office of the County Clerk of the county where said Property
is situated, which notice may be posted by the Trustee acting, or by any person a<;ting for him, and the Beneficiary (the holder.of the
indebtedness secured hereby) has, at least twenty-one (21) days preceding the date of sale, served written or printed notice of the pro-
posed sale by cei:tified mail on each person and/or entity(s) obligated to pay the indebtednesS secured by this Deed Of Trust according
to the records of Beneficiary by the deposit of such notice, enclosed in a postpaid wrapper, properly addressed to such person(s) and/or
entity(s) at such person's and/or.entity(s) most recent address as shown by the records of Beneficiary; in a post office or official depos-
itory under the care and custody of the United States Postal Se_rvice, the Trustee shall sell the above described property, then subject to
the lien hereof, at public auction in accordance with such notice at the Courthouse of said county where sUch Property is situated (pro-
vided where said Property is situated in more than one county, the-notice to be posted as here:in provided shall be posted at the
Courthouse of each of such counties, and filed with the County Clerk .of each of such counties where said Property is situated, and said
above described and conveyed Property. may be sold at the Courthouse of any one of such counties, and the notices so posted and filed
shall designate the county where the Property will be sold), on the first Tuesday in any month between the hours of ten o'clock A.M.
and four o'clock P.M., to the highest biddet for cash, selling all of the Property as an entirety or in such parcels as the Trustee acting
may elect and make due conveyance to the Purchaser or Purchasers, with general warranty binding Grantors, their heirs and assigns;
and of the money arising from such sale, the Trustee acting shall pay first, all the expenses of advertising the sale and making the con-
veyance, including a reasonable commissiOn to himself, which commission shall be due and owing in addition to the attorney's fees
provided for in said Note, and then to Beneficiary the full amount of principal, interest, attorney's fees and late charges due-and unpaid
on said Note and all other indebtedness secured hereby, rendering the balance of the sales price, if any, to Grantors, their heirs or
. assigns; and the recitals in the conveyance to the Purchaser or Purchasers shall be full and conclusive evidence of the truth of the. mat-
ters there:in stated, and all prerequisites to said sale shall be presumed to have been performed, and such sale and conveyance shall be
conclusive against Grantors, their heirs and assigns.
Beneficiary may remedy any default, without waiving same, or may waive any default without waiving any prior or subsequent default.
It is agreed that in the event a foreclosure hereunder should be commenced by the or his substitute or successor, Beneficiary
may at any time before the sale of said Property direct the said Trustee to abandon the sale, and may then institute suit for the ,
tion of said Note, and for the foreclosure of this Deed Of Trust lien; it is further agreed that if the Beneficiary should institute a suit for
the collection thereof, and -for a foreclosure of this Deed Of Trust lien, that he may at any. time before the entry of a final judgment in
said suit dismiss same and require the Trustee, his substitute or successor, to sell the Property in accordance with the provisions of this
Deed OfTrust.
Beuefi.ciary shall have the right to purchase at any sale of the Property; being the highest bidder, and to have the amount for which such
Property is sold credited on the debt secured hereby.
in any event, is hereby authorized to appoint a substitute trustee, or a successor trustee, to act instead of the Trustee named
. herein other formality than the designation in writing of a substitute or successor trUstee; and the authority hereby conferred
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shall extend to the appointment of other Successor and substitute trustees successively witil' the indebtedness hereby secured has been
paid in full, or until said Property is sold hereunder, and each substitute and successor trustee shall succeed toall the rights and pow-
ers of the original named herein. . I . . . . . .
In the event any sale is made of the above described.Prope1', or any portion thereof, under the terms of this Deed Of Trust, Grantors,
their heirs and assigns, shall forthwith upon tnaking of such sale surrender and deliver possession of the. Property so sold to the
Purchaser at such sale, and in the event of their failure to do1
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o they shall thereupon from and after the making of such s\}Je be and con-
tinue as tenants at will of such Purchaser, and in the event o their failure to surrender possession of said Property upon demand, the
Purchaser, his heirs or assigns, shall be entitled to U;tstitute d maintain an action for forcible detainer of said Property in the Justice
of the Peace Court in the Justice Precinct in which such Prc,J.erty, or any part is situated .
Grantors agree any resale by Beneficiiuy of the after foreclosure may be made for a price
below the fair market value (i.e. at wholesale) and that Benepciary is not required to re-sell the Property for a price e"qual to or above
fair market value (i.e. retail). Grantors agree that the sales price obtained by Beneficiary at any such resale will not be used in deter-
mining the fair market value of the Property for the purposeJ of determining value under Section 51.003 of the Texas Property Code.
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To the extent pennitted by law, Grantors hereby- Jaive all rights and remedies created under Section 51.003 of the Texas
Property Code including, without limitation. the right evidence of the amount of the sales price of the Property sold by
Beneficiary following any foreclosure of the liens pursuant tp the terms of this Deed Of Trust.
It agreed that the lien hereby created-shall take over and be. a prior Hen to any. other lien of any character whether ven-
dor's, materialmen's, or mechanic's lien hereafter created on \he above describe"d Property, and in the event the proceeds of the indebt-
edness secured hereby as set forth herein are used to p"ay off satisfy any liens heretofore existing on said Property, then Beneficiary
is, "and shall be, subrogated to all Of the rights, liens and remedies of the holders of the indebtedness so paid.
It is further agreed that if Grantors, their heirs o.r assigns, while the owner of the hereinabove described property, should commit an act
.ofbanlauptcy, or authorize the filing of a voluntary petition ln banla:uptcy, or should an act ofbanlauptcy be conunitted and involun-
tary proceedings instituted or threatened, or should the ProPerty hereinabove described be taken over bya Receiver for Grantors, their
heirs or assig:fis, the Note hereinabove described may, at the Option of Beneficiary, immediately become due and payable, and the act-
ing Trustee may then proceed to sell .same under the provisidns of this Deed Of Trust. .
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Grantors hereby transfer and assign unto Beneficiary, to be applied on the debt secured hereby: (a) all eininent domain or condemna-
tion award moneys which may hereafter be awarded or pai.d!for the condemnation of the hereinabove described Property, or any part
thereof or for any portion of the premises rilay be for any public or quasi-public use, or by virtue of private sale in
lieu thereof and any sums which may be awarded or becomeipayable to Grantors for dainages caused by public works or construction
on or near the Property; (b) all the bonuses. rents, royalties, damages and delay moneys that may be due or that may hereafter become
due and payable to l:he Grantors or their under any oil: gas, mining or mineraJ lease or leases of any kind now existing, oi" which
may hereafter come into existence (including agricultural _and/or hunting contracts of every kind) covering the above-described
Property or any part thereof;( c) all proceeds from the sale of crops grown on the Property, as well as all pasturage and/or grazing or
hunting fees. Grantors authorize and direct payment of such money to said Beneficiary. until the debt secured hereby is paid. Such
money may, at the option of the Beneficiary, be applitfd on tlie debt whether due or not. The Beneficiary shall .D.ot be obligated, in any
manner to collect said moneys or any part thereof, am;l. shallbe responsible .only for amounts received by the Beneficiary .. Nothing
herein contained shall be construed as a waiver or prejudiCe to the. priority of this lien or the options hereunder. in favor of said
Beneficiary.
It is agreed that an extension, or extensions, may be made as to the time of payment of all, or part, of the indebtedness secured here-
. by, and that any part of the above describe"d Property may be l:eleased from this lien without altering or affecting the priority of the lien
created by this Deed Of Trust in favor of any junior encuinbrance, mortga"gee or purchaser, or any person acquiring an interest in the
Property hereby conveyed,.or anY part thereof; it being intention of the parties hereto to preserve this lien on Property herein
described. and all improvements thereon, and that may be hereafter constructed thereon. first and superior to any "liens that may be
placed thereon. or that may be fixed, given or imposed by laW thereon after the executiOn of this instrument notwithstanding any such
extension of the time of payment, or the release of a portion of said Property from this lien.
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In the event any portion of the indebtedness described cannot be lawfully secured by this Deed Of Trust lien" on said
ProP.erty, it_is agreed that the first payments made on said indebtedness shall be applied to the discharge of that portion of said indebt-
edness .
. Nothing contained herein or in the Note shall ever entitle upon the arising of any cOntingency whatsoever, to receiVe
or Collect interest in excess of the highest rate allow"ed by "the laws of the State of Texas or to the extent Federal Law permits a
greater rate, then such greater rate, on the principal indebtedness hereby secured or on any money obligation hereunder and
in no event shall Grantors be obligated to pay interest tllereon in exCess of such rate.
If this Deed Of Trust is executed by only one person or by a corporation, the plural reference to Grantors shall be held to include the
singular and all of the covenants and agreements undertaken. to be by and the rights upon the respective
Grantors name herein, shall be binding upon and inure to the benefit of riot only said parties respectively but also their respective heirs,
executors, administrators, grantees, successors and
In the event that the hereinabove described Property sold, or otherwise disposed of without the prior written consent of
the Beneficiary, the mattirity of the oUtstanding and unpaid principal, all accrued and unpaid interest, all and unpaid late
charges, and other fees and/or charges arising out" of said Note or hereunder may, at the option of the Beneficiary, be accelerated and
the Beneficiary m_ay inunediately demand payment of the outstanding _and unpaid principal s1,1m, together with all accrued and
unpaid interest due thereon, and all accrued and uD.paid late ?harges, and other fees and/or charges then due and owing.
In the event Grantors should seek a temporary restraining order or aD. injunCtion or other legal action, be it temporary or permanent, to
prevent, binder or delay the exercise by Beneficiary of its rights and remedies under this Deed Of Trust, including. without limitation,
its foreclosure rights, upon the occutrence of as default, as herein provided, then Grantors agree to pay and/or reimburse Beneficiary
for all costs expenses, including its :easonable and necessary attorney's fees, incurred by Beneficiary in cOnnection with _its
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. defense, appearallce and/or other action tik.en by .B'ellefiCib)/vJith "reSp-eCt" thereto, such Payment and/or reimbursement to be made
whether or not Beneficiary is the prevailing party in any such injunction or. tempOrary restraining order or legal or arbitration Pro-
ceeding. Gp.ntors agree to contact, in writing, Dennis E. Nixon. prior t6 the institution of any such legal or arbitration proceedings so
as to permitBeneficiaiy the oppOrtunity to appear and defend itself.
It shall be an event of default under this Deed OfTrust<SliOuld qf them or any guarantor, fail to timely deliver any and
all :finai:!.cial statements, income tax returns, inventory reports, cash flow infori:D.ation. accounts receivable reports, or any other busi-
ness, tax or financial information requested by Beneficiary.
Grant?rs hereby grant BeneficiarY the right to protest any and all ad valorem taxes and special assessments made against the Property
covered by this Deed OfTrusl In that regard, Grantors shall deliver to Beneficiary a true and correct copy, when received, of all tax
assessnients, valuations, re-appraisals and other notices received by Grantors from all tax authorities. Beneficiary shall have the right
to appear in all tax proceedings and file appealS concerning taxes affecting the Property or any portion thereof.
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Grantors e?-pressly that this Deed and the Note secured are following
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" :, ;.c:'' ,., Grimtor.expresslyrepresentslhat this Deed of Trust and the Note secured
are given for and represent the sum of $2,400,000.00 advanced and paid in c.Sh
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extf!nt allOwed: h)r :law; tliis c0Dveyauce. is aiO in ttti.St of
ness: OfGi:ali.tori to presentlj exist1n:gotw1:iich may in. any l:riani:iei--or mt.Wnis heteaftet.be fuCl:irred or: <ireated by: GtahfOis,
WbiC"h'Othef or future indebtedhes:s.GrantO:i:s''ackru:lWledit: to be curten'tl'y aontemp.lated by GrantOrs ahd. 'evidenced ii1 anY .manner whaf.:.
soever, iliC1u!:iing Without"l:infitatioM. :'.' ':. = ,:
'' ,.,,. !A; "ariy' tonun:ercial:loiifi Oi-iri.iiCbtedness;'"" : l::J::(,., ,, ,. .. o( . ,,_. .,,_.. :.!' ., .!:1'...-. : : , ::.
.,, B: ,. :<any Credit 'Card Or :;.. :::<,.-.;.. : !:: . ,-, ..
'
' C. ;'"any"hidebl'e'dlless;relafing to cheCitii:ig or savings accounts (overdrafts, .fees, etc,);
D. any expenses incurred in the protection or ffiaintenance of the collateral securing any of such liabilities, loans, and
" ':ot: .. ,.,," oougatians"'l.""' ',j 1 .. '.' . ''; :;. ', ;,;;! }\'"' "'" '! :li." ' '\\ .' ' . ;':Pi':"",\
.:,-. ' ... .: E. . any incu.f.red in-ilie cdneisti:On'of an;.. i:ndeOtechieSS aD:d!or Obltgatiorl ofthe:Grnrttors"to
.! :iiig;Ouf otherwise; : .,:.L ;: .;; ;Y t:.- . .. , <:-1 . .. ., .... :. ,. .,,: ,., ..
. :any-1ettei'S' of eted.J.'f:andfor;illdtibtedne'sS"'llr:ising alit. Of,:or-adYab.tie:tno 'Pay; lettefS' Of CFe'dit transactions;
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G. any indebtedness, however evidenced, whether by promissory note, bookkeeping entry, electronic transfer or by any
::. ioth:er:t:l'latll:l'etor:forni:;,;<!;, :.,;, .... > .:.:' .\:::'.:;.,.,!;, . ;>1,; ;,:,.,; ,.
H. any other indebtedness of Grantors to any financial institution affiliated with International Bancshares Corporation,
joiptly and/or severally, and in any capacity, whether as maker, guarantor, or otherwise, now or hereafter owing and
regardless of how evidenced or arising; and
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'fo>thi%xteht 'a1ltny:ed: :by ls :jntendeq,thattl:ri:} iiidebtei;iD:e"ssih11llte :a:JJoiclasS:s""of.fudeOt&drie:$;'whethet- "evi.:.
nencoo bY n:oie's; b:Pen:.adCOun-rs,:.:Overiiraft, "Or otherwise, and Whether direct; indirect or contingent, regardless of class, form or pur-
pOse and including but not limited to, loans for consumer, agricultural, business or personal pw:poses. .The indebtedness does not
illCiude atriOullts dWiii.g homestead eqUJ.'ty lban'aru'i!Or honie:eqruty line Of credit. '
' . . ,,. .. ! . i/.'l':':.t:";/("t;',!' ,.., ,: . :,,.,_,,.! ::, ,. .... , .. .: .. ; .: .. , ., 1 '' '
It beirig expressly ii.d:v'aneed:by Beneficiary .to shall be
payable at the maint.offi=cesof.Beneficiary at..J.:?il'E.Tiavis, San' Antonio; Be:M.at .etihil.ty/[e:ta:s:18205i; an'd:sbalfbiar futerest.-as maY
provided n;_ suclh'iotes Or'othti.: giveh by Gfuritors tO BenefiC:taty; llnd thiS inStiunient iS'alsO dxecUted for
fue.pufPOse Cnfoicfug tlie pay.mehb 'of."aey renewaJ.; eXfensiOii itiid!Ot :rrioCii.Heatlori Of:ari.yrnote -oJ:: Of
indebtedness Of:Gri::i.ntOrs and W.cl'utllng;roiy:furthdr.ioon:i:and advru:ice!ne:D.tS bY Beri-efibHir)i ioGrailt6ts". Repayffit:nfofallindebt..:
'ediless of Griintor!d:o Beiiefi.Ci:aijr: notiJterm.matd::fuis'Deed' Of4'nist -dnlesS:the:s'iime:a-e' i!o!teliias'edn;y . Beneficiaty.m the request
of Grantors, but it shallre:tnai:n.in fu1Hotce and effeCt td':Se.ru:reall .. fu.Me ip.di.'Sbtedness)Tllfgatdless of -.an)> _addi.:
tioiia1 securitYiliat may be' Pas(Ot!futore indebtedness; anif shall;be uniffeciea by ari)rrenewars;.extenSio:D.S' or partial
releases hereunder,..- ' _ ,. ;:.:,! .:t\ ,,.. ". ,,; ' ,:.;,s,,b .:.' :;r;; 1;::i :1' __ ! \' in::no.il."l. ' c
:" .:: ,: 1l.:.r:y ,,.-, .. :.\: ,: .. : .-.;. :., 1'!" ,_., .. '\ . : ,,\i11. ,:ld
GRANTORS WlliL NEITHER'CRJlA'I'ilNORPERMI:f ANY JUNIOR OR SUBSEQUENT LIEN OR ENCUMBRANCE AGAINST
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Ab\1JtCabie .tci: Prl@Li&ns; .;If this- mie'resis;-ll's&gnmentsdf
:a:r''anY!othei-Oe:nt:uli:ibi'ahCeS {t:Oil:fictivelY/'llii:: ."Prior aff-ecting rarijtiOftlre Propetiy,,;llhiocum"eiits cie'il.tihgthe Prior
and shallJ:>.ri :co1lecti:vely the anthhisosect.i:on shall
": .:1: ..:. . ::. \.,, ... .- .. : ,.. .: .... ,,::lt::..:t.n,., ;: ., __,.:\l.'(:\1' = 1 ... , \:l'.:> ,-,,.;; .. ,.;,' ::.. .. '' ,_,: .... .... , .. . .
' : ! ' , :"<' ;.;. Plii';e5 of13'; .l.. DOTfi12/03
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Trust - Staci Properties Ltd. 3.3.2005 Pg 6 of 15 apply. Grantors shall not enter into any extension, modification, increase or refiliancing of any of the Prior Lien
or the indebtedness secured thereby without prior written consent of Beneficiary. Grantors .shall pay. when due all indebtedness evi-
denced and secured by the Prior Lien Documents and shall timely perform all other obligations of the Grantors under the Prior Lien
Documents. Beneficiary may, b:ut shall not be obligated to, pay any such indebtedness or perform any such obligations for the account
of Grantors and any sum so expended shall be secured hereby. Grantors shall pay to Beneficiary all amounts so expended by
Beneficiary with interest on such amountS"fi-om the and at the rate set forth in Note, but not in excess of the highest rate per-
mitted by applicable law. Beneficiary's cure of any default under any of the Prior Lien Documents shall not constitute a cure of the
default under this Deed Of Trost. Grantors shall send to Beneficiary a copy of each notice of default or notice of acceleration or other
notice received by Grantors from the holder o.f any of the Prior Lien Documents within one (1) business day after receipt thereof by
Grantors: Notwithstanding the foregoing, Beneficiary does not consent to any Prior-Lien unless otherwise expressly permitted in this
Deed OfTrost.
Security Agreement/f-inancing Statement. This Deed OfT!ust lien shall '?Over all property now or hereafter affixed or attached or incor-
porated into the Property, descn'bed herein and now or owned by Grantors in which Grantors now or hereafter have an inter-
est which, to the fullest extent permitted by law, shall be fixtures and part of the Property. In addition, this Deed Of Trust lien
shall and Grantors to the extent of any present or hereafter created rights of Grantors in such Property hereby grant to
Beneficiary, a security interest in (i) all building materials, fixtures, equipment and other personal property, to be incorporated into any
improvements constructed on the premises; (ii) all goods, supplies, fixtures, equipment, machinery, furniture and furnishings
and other pe:J;Sonal property which are now or may hereafter be appropriated for use on (whether such items are stored on the premis-
es or elsewhere), located on or used in connection with the premises; (iii) all rents, issues and profits, proceeds, profits, renewals,
income Qr other benefit derived from the payments received for lodging from interests and/or materials, and all inventory, accounts,
accounts receivable, contract rights, general .intangibles, intellectual property, chattel paper, instruments, documents, permits, plans,
specifications, drawjngs, governmental approvals, notes, drafts, letters of credit, indebtedness arising from and/or to pay an advance
on letters of credit, accounts due from credit, debi-t and/o! charge card. companies, insurance policies, insurance .condemnation awards
and proceeds, trade names, trademarks and service marks arising from or related to the pr-emises and any business conducted on the
premises by Grantors; and (iv) all replacementS and sul:istitutions for or additions to, all products and proceeds of, and all books, records
and files rrilating to any of the foregoing. To the extent any property covered by this Deed Of Trust lien consists of rights in action or
personal property covered by the Texas Business And Commerce Code, this Of Trust lien constitutes a security agreement and is
intended to create. a security interest in such property in favor of Beneficiary. This Deed Of Trust shall be self-operative with respect
to such property, and in the event of default and/or acceleration of the indebtedness hereby secured, Grantors expressly grant to
Beneficiary the right to enter upon the Property where the collateral is located for the purpose of enforcing its right to such collateral,
and Grantors agree to eXecute and deliver, on demand, such security agreements, financing statements and other instruments as
Beneficiary may request in order to impose the lien hereof made more specifically upon any such property. H the lien of this Deed
Of Trust on any property shall be subject to prior security agreement covering such Property, then in the event of any default hereun-
der, all the rights, title and interest of Grantors in and to any and all deposits made-in connection with the transaction whereby such
prior security agreement was made are hereby presently assigned to Beneficiary, together with the benefit of any payments now or here-
after made in connection with such transaction.
Financing Statements. In addition to Beneficiary-'s other rights set forth in this Deed Of Trust, Beneficiary shall have all rights of a
secured party under the Texas Business And Commerce Code (the "Code"). At Beneficiary's request, Grantors shall execute and deliv-
er to Beneficiary all financing statements that may be required by. Beneficiary to establish and maintain the validity and priority of
Beneficiary's security interest, and Grantors shall bear all costs thereof, all searches reasonably required by Beneficiary. If
Beneficiary should dispose of any of the property covered by the security interest created under this Deed Of Trust pursuant to the
Code, ten (10) days written notice by Beneficiary to GrantorS shall be deemed to be reasonable notice; provided however,- Beneficiary
may dispose of such proPerty in accordance with the foreclosure procedures of this Deed Of Trust in lieu of proceeding under the Code.
(i) Grantors hereby authorize Beneficiary to file a Financing Statement, an Amended Financing Statement and a Continuation
Financing Statement (collectively referred to as the ''Financing Statemenf') describing the Collateral.
(ii) Grantors hereby authorize Beneficiary to file a Financing Statement any agriculturalliens.or other statutory liens
held by Beneficiary.
(iii) Grantors shall receive prior to the Closing an official report from the Secretary of State of each Collateral State, the Chief
Executive Office State, and the Debtor State (each as defined below) (the "SOS Reports") indicating that Beneficiary's secu-
(iv) Beneficiary shall receive at any time following the Closing an SOS Report indicating that Beneficiary's secUrity interest is
. prior to all other se"CUrity interests or other interests reflected in the report.
Beneficiary may sell, lease, or otherwise dispOse of any of the personal.property in accord with the rights, remedies, and duties of a
Beneficiary under Chapters 2 and 9 of the Texas Business And Commerce Code after giving notice as required by those chapters; unless
the Collateral threatens to _decline rapidly in value, is perishable, or would typically be sold on a recognized market, Beneficiary will
give Grantors reasonable notice of any public sale of the Collateral or of a time after which it may be otherwise disposed of without
further notice to Grantors; in this event, notice will be deemed if .it is mailed, postage prepaid, to _Grantors.at the address
specj.fii:d in this agieement at least ten days before. aD.y public sale or ten days btifore the time when the Collateral may be othenvise
disposed of without further notice to Grantors. Grantors authorize Beneficiary to disclaim or modify any and all warr:anties set forth
in 9.610(d) of the Texas Business And Commerce Code and stipulate and agree that suCh a disclaimer and/or modification will
not the sale commercially un,reasonable. Beneficiary niay retain all or part of the Collateral in full and/or partial satisfaction of
the Indebtedness pursuant to Section 9.620 of Texas Business And Conunerce Code.
Without providing Beneficiary with at least thirty (30) days prior written notice of Grantox:s' intentiori to do so, Grantors, until the
indebtedness is paid in full, agree that they will not:
a.
b.
c.
in one transaction or a series of related transactions, merge into or consolidate with any other entity, sell all or sub-
stantially all of its assets, or in any way jeopa;rdize its corporate existence,
change the state of its incorporation,
change its corporate name,
Page 6 ofl3 DOT-12103- IBC9004
,.:
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,,
.....
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.... :

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d.
e.
.f.
change f!:te address and/or location of its Chief Executive Office
file. a UCC-1 Amendment form, and/or
file a UCC-1 Termination form.
' .. _, .. :, \
Grantors shall-give advance notice in writing to Beneficiary of any proposed change in Grantors' name, identity, or structure and shall
execute and deliver to Beneficiary, prior to or concurrently with the occuirence of any such change, all additional fmancing statem;ents
that Beneficiary may require to establish and maintain the validity and priority of Beneficiary's security interest with respect to arly of
the property described or referred to herein.
Grantors expressly represent that the Property hereinabove mentioned and conveyed to the Trustee forms no part of any property
owned, used or claimed by Grantors as exempted from forced sale under the law of the State of Texas as either personal or buSiness
homestead, and Grantors renounce all and every claim thereto under any such law or laws and hereby expressly designate .as their
homestead, pers6nal_and business, and as constituting all the property owned, used or claimed by them as exempt either as personal
and/or business under such laws the following described property:
Texas.
(Personal And Business Homestead)
Assignments of Rents. Profits etc. All of the rents, royalties, bonuses, issues, contracts for deed, proceeds, profits,-revenUe, income
<ind any other benefit derived from the Property and improvements thereto, or arising from the use or enjoyment of any pol-tion there-
of or from any lease or agreement pertaining thereto and liquidated damages following default under such leases, and proceeds
payable under any policy of insurance covering loss ofrents or caused by" damage to any part of tl;le Property, together Vrith any and
all rights that Grantors may have against any tenant with any and all rights that Grantors may have against any tenant under such leas-
es or any subtenants or occupants of any part of the Property (hereinafter called the "Rents"), are hereby abs0lutely andiuncondition-
ally assigned to Beneficiary. Prior to a default in payment by Grantors of any portion of the indebtedness secured by 'this Deed Of
Trost (the "Indebtedness'') or breach of any covenant, representation or'warranty- made herein by Grantors (collectively; an "Event of
Default"), Grantors shall have a license to collect and receive all Rents as Trustee for the benefit of-Beneficiary and Grantors, and
Grantors shall apply-the funds so collected first to the payment of the Indebtedness in such m'anner as Beneficiary elects and thereafter
to the account of Grantors. The foregoing assignment is intended to be absolute, unconditional and presently effectiv. It shall never
be necess-ary fot Beneficiary to institute legal proceedings of any kind to enforce the terms of this assignment.
As-signment of Leases hereby assign to Beneficiary all existing and future leases, including subleases and any and
all extensions, renewals; modificatioris, and replacements thereof, upon any part of the Property (the ''Leases''). Grantors hereby fur-
ther assign tO Beneficiary all guarailties of tenants' performance under the Leases, Prior to an Event 6f Default, Gr'antors shall have
the right, without joinder of Beneficiary, to enforce the Leases, unless Beneficiary directs otherwise.
Warranties Concernin:g Leases and Rents. Grantors represent and warrant that: (a) Grantors have good title to the,Leases and Rents
hereby assigned and authority to assign them, and no other person or entity has any right, title or interest therein; (b) all existing Leases
are valid, unmodified and in full force and effect, except as indicated herein, and no default exists thereunder; (c) 0J.ess otherwise pro-
vided herein, no Rents have been or will be assigned, mortgaged or pledged; (d) no Rents have been or will be anticipated, waived,
released, discounted, set-off or compromised; and (e) Grantors have not received any funds or deposits from any tenant for which cred-
it has not already been made on account of accr:ued Rents.
Grantor's Covenants of Performance as to I eases. Grantors covenant to: (a) perform all of their obligationS under the Leases and
give prompt notice to Beneficiary of any failure to do so; (b) give immediate notice to Beneficiary of any notice Grantors received from
any tenant or subtenant _under any leases, specifying any claimed default by any party under such Leases, excluding, however, notice
of defaults under residentia11eases; (c) enforce the tenant's obligations under the Leases; (d) defend, at Grantor's expense, any pro-
ceeding pertaining to the Leases, including, if Beneficiary so requests, any such prOceeding to which'Beneficiary is a party; and (e)
neither create nor permit any encumbrance upon its interest as lessor of the Leases, except this Deed Of TruSt and any other encum-
brances permitted by this Deed OfTrust.
Prior Approval for Affecting Lease::; Grantors shall not, without the prior written consent of-Bene'ficiary, receive or collect
Rents more than one month in advance, encumber or assign future Rents, waive or release any obligations of any tenant under the
Leases, cancel, terminate or modify any of the Leases, cause or permit any cancellation, termination or surreo.der of any-ofthe Leases,
or commence any proceedings for dispossession of any tenant under any of the Leases, except upon default by the tenant thereunder,
or permit any assignment of the Leases whereby a tenant is released from its obligation.
Rejection of Leases in Banlauptcy. Grantors agree that no settlement for damages for termination of any of the Leases under the
Federal Bankruptcy Code, or under any other federal, state, or local statute, shall be made without the prior written consent of
Beneficiary, and any check in payment of such damages shall be made payable to both Grantors and Beneficiary. Grantors hereby
assign any .such paynient to Beneficiary, t-o be applied to the Indebtedness as Beneficiary may elect, and agree to endorse any check
for such payment to the order ofBeneficiary.
Beneficiarv's Rights. Beneficiary's acceptance -of this assignment shall not, prior to, upon, or afterenby upon and taking possession
of the Property by Beneficiary or any foreclosure of the lien hereunder or conveyance of the Property herein described in lieu thereof,
be deemed to coustitute Beneficiary as a ""mortgagee in possession", nor obligate Beneficiary to appear in or defend any proceeding
relating to any of the Leases or to the Property, take any action hereunder, expend any money, incur any expenses or perform any obli-
gation or liability under the Leases, or assume any obligation or Jiability under the Leases, or assume any obligation including securi-
ty deposits. Beneficiary shall not be liable for any injury or damage to any person or property in or about the Property. Beneficiary
shall D.ot be obligated to perfonn, satisfy, or otherwise adhere to any terms-of any of the Leases or any covenant of Grantors to any ten-
ant u,nless Beneficiary agrees to do so, in writing, executed by Beneficiary, which Beneficiary may elect not to do so, in its sole and
absolute discretion .
Annointment of Attorney-In-Fact. Grantors hereby appoint its attorney-in-fact, coupled with an interest, empoWering
Beneficiary to subordinate any Leases to this Deed Of Trust
Indeninification. c_:;rantors hereby indemnify and hold Beneficiary harmless from all liability, damage, or expense incurred by
Page7ofl3 DOT-12/03 - IBC9004
Trust - Staci Properties Ltd. 3.3.2005 Pg 8 of 15 Beneficiary any claims under including, claim-s b)-i!enants for security or for renial
payments more than one (1) month in advanCe and not to AD amounts indemnified. hereunder, includ-
ing reasonable attorney's fees, if paid by Beneficiary shall interest at the maximum lawful 'rate and shall be payable by
Grantors immediately without demand and shall be
Records Etc. Upon request by Beneficiary, Grantors shall deliver to Beneficiary executed originals of all Leases and copies of all
records relating thereto. There shall be no merger of the leasehold e;rtates, _created.by the Leases, with the fee estate of the Mortgaged
Property without the prior written consent of p-pon default, hereby authorize and direct the tenants under the
Leases to pay Rents to Beneficiary upon written ..Py further .consent of Grantors, and the tenants may rely
upon any written statement delivered by Beneficiary to the tenants. Ally. such payment to Beneficiary shall constitute payment to
Grantors under the Leases.
Fixtures Some of the items on the Property are goods that are or lire to become fixtures related to said Property, and it is intended
that, as to those goods, this Deed Of Trust shall be efferifiv:e as a siatement filed- as a fixture .filing from the date of itsfiling
of record in th& real estate records of the county in which the Pfoperty is situated. Information concerning the security interest creat-
ed by this-instrument may be obtained from Beneficiary, as Secured party, at the address ofB.eneficiary set forth elsewhere in this peed
Of Trust. The mru1ing address of the Grantors, as Debtor,
Environmental Grantors' use of the Properjy Will at 'all times cOmply with all laws, statutes, ordinances, rules and reguR
latio.ns ("Laws'') of any governmental, or regulatory authority which relate to the transportation, storage, placeR
ment, handling, treatment, discharge, ieneration, rerp.oval.or diSPosal (collectively, "Treatment'') of any waste, petroleum
product (including, without limitation, gasoline and die:3el flltil), waste products, poly-chlorinated biphenyl, asbestos. hazardous mateR
rials, and/or any other substance, the Treatment of which is regulated by .any laws (collectively, 'Waste"). Grantors will comply with
all Laws regarding underground storage tanks used to glisc:'IinC, or any other petroleum products on the
To the best of Grantors' !mow ledge, no Waste_ is not located on the Property, and neither Grantors nor, to the best of Grantors' lmowl-
. edge, any other person has ever caused or permitted any Treatment of anY Waste on, under or at the Property or any part thereof, and
to the best of Grantors' knowledge, no property adjoining the Property is used, or has ever been used at any previous time for
the Treatment ofWaste.
To the best of Grantors' lmowledge, no investigation, order, consent order and agreement, litigation or settlement, with
respect to Waste or the Treatment of Waste is proposed, threatened, antiCipated or in existence with to the Property. The
Property is not currently on, 'and to Grantors' knowledge, after diligent investigation and inquiry, has never been on, any federal or state
"Superfund" or "Supetlien" list.
Grantors agree to (a) give notice to Beneficiary immed.iately upon acquiring knowledge of any Waste ori the Property with a
full description thereof; (b}promptly comply with any laws applicable to Grantors or the Property requiring-the removal, treatment or
disposal of such Waste and provide Beneficiary with satisfactory evidence: with 'such compliance; and (c) provide Beneficiary within
thirty (30) days after demand by Beneficiary with a bond, letter of credit or :sirpilar financial assurane;e evidencing to Beneficiary's satR
isfaction that the necessary funds are available to pay the <;:ost of remoying, treating and disposing of such Waste and discharging of
any assessments that may be established on the as a result
Any environmental spill, discharge or other event upon or adjacent to "ijle Property which Beneficiary determines and
adversely affects the value and/or use of the PrOperty; be an Event of Default under this Deed OfTrust and theNpte and all other
. indebtedness secured hereby.
Grantors agree to perform an asbestos survey and obtain a permit, tO provide a copy of said survey to Beneficiary, prior to com-
mencing any renovation and! or demolition of a 'or building. Grantors .further agree_.to comply with all other state
and federal statutes and/or regulations regarding asbestOs rem_ci'vEil.
Site Assessments Beneficiary (by its officers, employees and agents) at _any time and from time to time, either prior to or after the
occurrence of any default, may contract for the serv.ices of any person or firfri ("Site Reviewers") to perform environmental site assess-
ments ("Site Assessments") on the Property for the purposes Of there exists on the Property any _environmental
condition which could reasonably be expected to result in any lia"9ilitj, cOst or expense to the owner, occupier or operator of such
Property arising under any Laws relating to or the Treatment of Waste., The Site Assessments may be performed at any time or
times, upon reasonable notice, and under reasonable e;:Stablished by Grantors which do not impede the performance of the
Site Assessments. Grantors agree that any Site Assessment fp:i"'the' s'9le and exclusive use, benefit and reliance of Beneficiary
in assessing the value of.its security interest in the Property an4 wi11 D.qt be relied on by Grantors for any purpose. The Site Reviewers
are hereby authbrized to enter upon the Property f-or sUCh purposes. The Site Reviewers are further authorized to perform above and
below ground testing for environmental damage or p_rei:ienct; Of wastt;: on the Property and such other tests on the Property .as may
be-necessary to conduct the Site Assessments in the opinlon of the Site Reviewers. Grantors will supply to the Site
Reviewers such historical and operational information regru;ding PrOpertY as may be reasonably requested by the Site Reviewers tO
facilitate the Site Assessments and will be available fot :ineeti.ngs with Site Reviewers if requested The cost of perfor:roillg such Site
Assessments shall be paid by Grantors upon demand ofBeneiiciary .and suCh expenses borne by Beneficiary _not immediately reim-
bursed by Grantors shall be secured by tfris Deed OfTrtist.
Indemnification. Whether or not any Site Assessments are conducted, and regardless of whether or not a default occurs under
this Deed. Of Trust or under the Note or under any other iitdebtedness secured hereby and regardless of any remedies
in respect of the Property are exercised by Benefiary, will defend, indemnify and hold harmless Beneficiary and
from any and all liabilities (incltldlng strict actions, penalties, losses, costs or expenses (including,
without limitation, attorneys fees and expenses, reme:dialcosis), suit costs of any settlement or judgment and claims of any
and every kind whatsoever which may now or in the' future (wheth'er. before or after the release or foreclosure of this Deed Of
Trust) be paid, incurred or suffered by or asserted ag_ainst qr Trustee by any person or entity qr governmental
agency for, with respect to, or as a direct or indirect result of,' the presence on or under, or the escape, seepage, lelikage, spillage,
discharge, emission or release from, on or affecting the Property of any waste or any spill, or whlch.arise out of or result from
the envirollmei:ttal condition of the Property or the 3.pplicability of any Jaws relating to the waste (including, without limitation,
tbe Comprehensive Environmental Response, Conipensatio'n,-and Liability Act, 42 U.S.C. 9601 et seq., as arises from time to
Page8ofl3 DOT-12103. IBC?004
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'time, any federal, state or local statute, law, ordinance, code, rule, regulation,
order or decree), regardless of whether or not caused by or withhi .'tlre:eontrol of Grantors, Beneficiary or Trustee. The repre--
sentations, covenants, warranties an indemnification herein contained shall surVive the release and/or judicially or non-judi-
cial foreclosure (or transfer in lieu thereof) of the lien of this Deed Of Trust. For the purpose of this paragraph and notwith-
standing any other provision contained herein to the contrary, the term "Grantors" shall refer not only to the Gritntors not only
.to the Grantors named herein, but also to all assume to the Note and the obligations of this
Deed Of Trust.
ARBITRATION.
GRANTORS, BENEFICIARY AND TRUSTEE FURTHER AGREE AS FOLLOWS:
I. CONSUMER-RELATED CLAIMS OF $75,000.00 OR LESS IN ACTUAL DAMAGES:
(a) WITH REGARD TO ALL CONSUMER-RELATED CLAIMS OF $75,000.00 OR LESS IN ACTUAL DAMAGES,
ANY AND ALL CONTROVERSIES OR CLAIMS ARISING UUT OF TIDS CONTRACT, ITS NEGOTIATION AND/OR
THE BREACH THEREOF, SHALL BE SETTLED BY ARBITRATION ADMINISTERED BY THE AMERICAN ARBITRA-
TION ASSOCIATION UNDER ITS SUPPLEMENTAL PROCEDURES FOR RESOLUTION OF CONSUMER-RELATED
DISPUTES AND CONSUMER DUE PROCESS PROTOCOL (WHICH ARE INCORPORATED HEREIN FOR ALL PUR-
POSES), AND JUDGMENT ON THE AWARD RENDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY
COURT HAVING JURISDICTION THEREOF. IT IS INTENDED BY ALL PARTIES THAT THIS ARBITRATION CLAUSE
MEET AND INCLUDE ALL FAIRNESS STANDARDS AND PRINCIPLES OF THE AMERICAN ARBITRATION ASSOCI-
ATION'S CONSUMER DUE PROCESS PROTOCOL AND DUE PROCESS IN PREDISPUTEARBITRATION.
(b) INSTEAD OF PROCEEDING IN ARBITRATION, ANY PARTY HERETO MAY PURSUE ITS CLAIM IN THE
CONSUMER'S LOCAL SMALL CLAIMS COURT, IF THE CONSUMER-RELATED CLAIM MEETS THE SMALL
CLAIMS COURT JURISDICTIONAL LIMITS. IF THE SMALL CLAIMS COURT .OPTION IS CHOSEN, THE PARTY
MUST CONTACT THE SMALL CLAIMS COURT DIRECTLY.
(c) THE PARTIES FURTHER AGREE THAT(ij NO ARBITRATIONPROCEEDINGHEREUNDERSHALLBE CER-
OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY SITUATED AND (il) NO ARBITRATION PROCEEDING
PROCEEDING.
(d) THIS ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION, AMENDMENT, OR EXPIRATION
OF THE AGREEMENT IN WIDCH THIS PROVISION IS CONTAINED, UNLESS ALL OF TilE PARTIES OTHERWISE
EXPRESSLY AGREE IN WRITING.
(o) THE PARTIES ACKNOWLEDGE THAT TIDS AGREEMENT EVIDENCES A TRANSACTION INVOLVING
ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION CLAUSE OF THIS AGREEMENT.
II. CONSUMER-RELATED CLAIMS ABOVE. $75,000.00 IN ACTUAL DAMAGES. AND/OR COMMERCIAL
CLAIMS:
. (a) ANY ARBITRATION INVOLVING CONSUMER-RELATED CLAIMS ABOVE $75,000.00 IN ACTUAL DAMAGES
AND/OR COMMERCIAL CLAIMS HEREUNDER SHALL BE BEFORE AT LEAST THREE NEUTRAL ARBITRATORS
.ASSOCIATED WITH THE AMERICAN ARBITRATION SELECTED IN ACCORDANCE WITH THE
COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION. FAILURE OF ANY ARBI-
TRATOR TO DISCLOSE ALL FACTS WIDCH MIGHT TO AN OBJECTIVE OBSERVER CREATE A REASONABLE
IMPRESSION OF THE ARBITRATOR'S PARTIALITY, AND/OR MATERIAL ERRORS OF LAW SHALL BE GROUNDS
[IN ADDITION TO ALL OTHERS] FOR VACATUR OF AN AWARD RENDERED PURSUANT TO THIS AGREEMENT.
(b) THE PARTIES FURTHER AGREE THAT (i) NO ARBITRATION PROCEEDING HEREUNDER SHALL BE CER-
OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY SITUATED AND (il) NO ARBITRATION PROCEEDING
PROCEEDING.
(c) TIDS ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION, AMENDMENT, OR EXPIRATION
OF THE AGREEMENT IN WIDCH TillS l'ROVISION IS CONTAINED, UNLESS ALL OF THE PARTIES OTHERWISE
EXPRESSLY AGREE IN WRITING. . .
(d) THE PARTIES ACKNOWLEDGE THAT TIDS AGREEMENT EVIDENCES A TRANSACTION INVOLVING
INTERSTATE COMMERCE. THE. FEDERAL ARBITRATION ACT SHALL GOVERN THE INTERPRE.TATION,
ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION CLAUSE OFTIDS AGREEMENT.
III. ADDITIONAL COMMERCIAL CLAIMS PROVISIONS:
(a) ANY AND ALL COMMERCIAL CONTROVERSIES BETWEEN THE PARTIES, SHALL BE RESOLVED BY
ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES. OF THE AMERICAN ARBI-
TRATION ASSOCIATION IN EFFECT AT THE TIME OF FILING, UNLESS THE COMMERCIAL ARBITRATION
RULES CONFLICT WITH THIS PROVISION, AND IN SUCH EVENT THE TERMS OF THIS PROVISION SHALL CON-
TROL TO THE EXTENT OF THE CONFLICT.
Page9ofl3
(b) THE AWARD OF THE ARB'frnAToRS, OR A MAJORITY OF THEM, SHALL BE FINAL, AND JUDGMENT
UPONTHEAWARDRENDEREDMAYBEENTEREDINANYCOURT,_STATEORFEDERAL,HAVINGJURISDICTION.
THE ARBITRATION AWARD SHALL BE IN WRITING AND SPECIFY THE FACTUAL AND LEGAL BASIS FOR THE
AWARD. UPON THE REQUEST OF ANY PARTY, THE AWARD SHALL INCLUDE FINDINGS OF FACT AND CON
. CLUSIONS OF LAW.
(c) ARBITRABLEDISP_UTESINCLUDEANYANDALLCONTROVERSIESORCLAIMSBETWEENTHEPARTIES
OF WHATEVER TYPE OR MANNER, INCLUDING WIT!JOUT LIMTIATION, ANY CLAIM ARISING OUT OF OR
RELATING TO THIS DEED OF TRUST, ALL PAST, PRESENT AND/OR FUTURE CREDIT FACILITIES AND/OR
AGREEMENTS INVOLVING THE PARTIES, ANY TRANsACTIONS BETWEEN OR INVOLVING. TilE PARTIES,
AND/OR ANY ASPECT OF ANY PAST OR PRESENT RELATIONSirrP OF THE PARTIES, WHETHER BANKING OR
OTHERWISE, SPECIFICALLY INCLUDING ANY ALLEGED TORT COMMTITED BY ANY PARTY.
(d) TiiEPARTIES SHALL ALLOW AND PARTICIPATE-IN DISCOVERY IN ACCORDANCE WITIJ Tim FEDERAL
RULES OF CIVIL PROCEDURE FOR A PERIOD OF ONE HUNDRED TWENTY (120) DAYS AFTER THE FILING OF
THE ORIGINAL RESPONSIVE PLEADING. .DISCOVERY MAY CONTINUE THEREAFTER AS AGREED BY THE PAR-
TIES ORAS ALLOWED BY TilE ARBITRATORS. UNRESOLVED DISCOVERY DISPUTES SHALL BE BROUGIJT TO
THE ATTENTION OF TilE ARBITRATORS BY WRI'fTEN MOTION.FOR PROPER DISPOSITION, INCLUDING RUL-
ING ON ANY ASSERTED OBJECTIONS, PRIVILEGES, AND PROTECTIVE ORDER REQUESTS AND AWARDING
REASONABLE ATTORNEY'S FEES TO THE PREVAILING PARTY,
(e) IN THE EVENT TilE AGGREGATE OF ALL AFFIRMATIVE CLAIMS ASSERTED EXCEED $500,000.00,
EXCLUSIVE OF INTEREST AND ATTORNEY'S FEES, OR UPON THE WRITTEN REQUEST OF ANY PARTY, (1)
PRIOR TO THE DISSEMINATION OF A LIST OF POTENTIAL ARBITRATORS, TilE AMERICAN ARBITRATION
ASSOCIATION SHALL CONDUCT AN IN PERS.ON ADMINISTRATIVE CONFERENCE wiTH THE PARTIES AND
THEm ATTORNEYS FOR THE FOLLOWING PURPOSES AND FOR SUCH ADDITIONAL PURPOSES AS THE PAR-
TIES OR THE AMERICAN ARBITRATION ASSOCIATION MAYDEEM APPROPRIATE, (A) TO OBTAIN ADDITION-
AL INFORMATION ABOUT THE NATURE ANDMA.GNITUDE OF THE DISPUTE AND THE ANTICIPATED LENGTH
OF HEARINGS AND SCHEDULING; _(B) TO DISCUSS THE VIEW OF THE PARTIES ABOUT ANY TECHNICAL
AND/OR OTHER SPECIAL QUALIFICATIONS OF THE ARBITRATORS; AND (C) TO CONSIDER, WHETHER MEDI-
ATION OR OTHER METHODS OF DISPUTE RESOLUTION MIGHT BE APPROPRIATE, AND_ (2) AS PROMPTLY AS
i PRACTICABLE AFTER THE SELECTION OF THE ARBITRATORS, A PRELIMINARY HEARING SHALL .BE HELD
AMONG TilE PARTIES, TIIEm ATTORNEYS AND TilE ARBITRATORS. WITH THE AGREEMENT OF TilE ARBI-
TRATORS AND THE PARTIES, THE PRELIMINARY HEARING MAY BE CONDUCTED BY TELEPHONE CONFER-
ENCE CALL RATHER THAN IN PERSON. AT THE PRELIMINARY HEARING THE MATTERS THAT MAY BE CON-
SIDERED SHALL INCLUDE, wiTHOUT LIMITATION, A PREHEARING SCHEDULING ORDER ADDRESSING (A)
EACH PARTY'S DUTY TO SUBMIT A DETAILED STATEMENT OF CLAIMS, DAMAGES AND/OR DEFENSES, A
STATEMENT OJ! THE ISSUES ASSERTED BY EACH PARTY AND ANY LEGAL AUTHORITIES THE PARTIES MAY
WISH TO BRING TO THE ATTENTION OF THE ARBITRATORS; (B) RESPONSES Al'ID/OR REPLIES TO THE PLEAD
INGS FILED IN COMPLIANCE WITH SUBPART 2(A); (C) STIPULATIONS REGARDING ANY UNCONTESTED
FACTSi (D) EXCHANGE AND _PREMARKING OF ALL DOCUME."'TS WHICH' EACH PARTY BELIEVES MAY BE
OFFERED AT THE FINAL ARBITRATION HEAIUNG; (E) T_HE IDENTIFICATION AND AVAILABILITY OF WITNESS-
ES, INCLUDING EXPERTS, AND SUCH ADDITIONAL MATTERS REGARDING WITNESSES- INCLUDING THEm
BIOGRAPHIES AND A SHORT SUMMARY OF THEm EXPECTED TESTIMONY, (F) WHETHER A STENOGRAPHIC
OR OTHER OFFICIAL RECORD OF TilE PROCEEDINGS SHALL BE MAINTAINED; AND (G) THE POSSIBILITY OF
UTILIZING MEDIATION OR OTHERALTERNAT!V);: METHODS OF DISPUTE RESOLUTION.
(f) FOR PURPOSES OF THIS PROVISION, "THE PARTIES" MEANS GRANTORS, BENEFICIARY AND
TRUSTEE, AND EACH AND ALL PERSONS AND ENTITIES SIGNING THIS AGREEMENT OR ANY. OTHER AGREE-
. MENTS BETWEEN OR AMONG ANY OF THE PARTIES AS PART OF THIS TRANSACTION. "THE PARTIES" SHALL
INCLUDE lNDIVIDUAL PARTNERS, AFFILIATES, Drn.ECTORS, EMPLOYEES, AGENTS AND/OR
REPRESENTATIVES OF ANY-PARTY TO SUCH DOCUMENTS, AND SHALL INCLUDE ANY OTHER OWNER AND
HOLDER OF THIS AGREEMENT. .
(g) THE PARTIES SHALL HAVE TilE RIGHT TO INVOKE SELF HELP REMEDIES (SUCH AS SET-OFF, NOTIFI-
CATION OF ACCOUNT DEBTORS, SEIZURE-AND/OR FORECLOSURE OF COLLATERAL, AND NON..JUDICIAL
SALE OF PERSONAL PROPERTY AND REAL PROPERTY COLLATERAL) BEFORE, DURING OR AFTER ANY ARBI-
TRATION AND/OR REQUEST ANCILLARY OR PROVISIONAL JUDICIAL REMEDIES (SUCH AS GARNISHMENT,
ATTACHMENT, SPECIFIC PERFORMANCE, REC];:IVER, INJUNCTION OR RESTRAINING ORDER, AND SEQUES-
TRATION) BEFORE OR AFTER ANY ARBITRATION. THE-PARTIES NEED NOT AWAIT THE OUTCOME OF THE
ARBITRATION BEFORE USING SELF-HELP REMEDIES. usE OF SELF-HELP OR ANCILLARY AND/OR PROVI-
SIONAL JUDICIAL REMEDIES SHALL NOT O]'ERATE AS .A WAIVER OF EITIIER PARTY'S RIGHT TO COMPEL
ARBITRATION. ANY ANCILLARY ORPROVISIONAL REM;EDY WHICH WOULD BE AVAILABLE FROM A COURT
AT LAW SIIALLBEAVAILABLE FROM THE ARBITRATORS.
(b) THE PARTIES AGREE THAT ANY ACTION REGARDING ANY CONTROVERSY BETWEEN T]!E PARTIES
SHALL EITHER BE BROUGHT BY ARBITRATION, AS DESCRIBED HEREIN, ORBY JUDICIAL PROCEEDINGS, BUT
SHALL NOT BE PURSUED SIMULTANEOUSLY IN DIFFERENT OR ALTERNATIVE FORMS. A TIMELY WRITTEN
NOTICE OF INTENT TO ARBITRATE PURSUANT TO THIS AGREEM:ENT STAYS -AND/OR ABATES ANY AND ALL
ACTION IN A TRIAL COURT, SAVE AND EXCEPT A HEARING ON AMOTION TO COMPELARBITRAUON AND/OR
THE ENTRY OF AN ORDER COMPELLING ARBITRATION .AND sTAYING AND/OR ABATING THE LITIGATION
PENDING THE FILING OF TilE FINAL AWARD 'OF THE ARBITRATORS. ALL REASONABLE AND NECESSARY
ATTORNEY'S FEES AND ALL TRAVEL COSTS SHALL BE AWARDED TO THE PREVAILING PARTY ON ANY
MOTION TO COMPEL ARBITRATION AND MUST BE PAID TO SUCH PARTY WITHIN TEN (10) DAYS OF THE SIGN-
ING OF TilE ORDER COMPELLING .
(i) ANY PARTY SEEKING TO ARBITRATE SHALL SERVE A WRITTEN NOTICE OF INTENT TO ARBITRATE TO
Page 10 ofl3 DOT-12/03 -IBC9004
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ANY AND ALL OPPOSING PARTIES Wl'I'1IIN :iii&D'A'YifATIER DISPUTE HAS ARISEN. A DISPUTE IS DEFINED TO
HAVE ARISEN ONLY UPON RECEIPT OF SERVICE OF JUDI!l!AL PROCESS, INCLuDING SERVICE OF A COUN-
TERCLAIM, FAILURE TO SERVE A WRITTEN NOTICE OF INTENT TO ARBITRATE WITHIN THE TIME SPECIFIED
ABOVE SHALL BE DEEMED A WAIVER OF THE AGGRIEVED PARTY'S RIGHT TO COMPEL ARBITRATION OF
SUCH CLAIM. THE ISSUE OF WAIVER IS AN ARBITRABLE DISPUTE.
G) ACTIVE PARTICIPATION IN PENDING LITIGATION DURING THE 360 DAY NOTICE PERIOD, WHETHER
AS PLAINTIFF OR DEFENDANT, IS NOT A WAIVER OF THE RIGHT TO COMPEL ARBITRATION. ALL DISCOVERY
OBTAINED IN THE PENDING LITIGATION MAYBE USED IN ANY SUBSEQUENT ARBITRATION PROCEEDING
(k) THE PARTIES FURTHER AGREE THAT (i) NO ARBITRATION PROCEEDING HEREUNDER SHALL BE CER-
OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY SITUATED AND (ii) NO ARBITRATION PROCEEDING
HEREUNDER SHALL BE CONSOLIDATED WITH; OR JOINED IN ANY WAY WITH, ANY OTHER ARBITRATION
PROCEEDING
(I) ANY ARBITRATOR SELECTED. SHALL BE KNOWLEDGEABLE IN THE SUBJECT MATTER OF THE DIS-
PUTE. EACH OF THE PARTIES SHALL PAY AN EQUAL SHARE OF THE ARBITRATION COSTS, FEES, EXPENSES,
AND OF THE ARBITRATORS' FEES, COSTS AND EXPENSES.
(m) ALL STATUTES OF LIMITATIONS WHICH WOULD OTHERWISE BE APPLICABLE SHALL APPLY TO ANY
AND ALL CLAIMS ASSERTED IN ANY ARBITRATION PROCEEDING HEREUNDER AND THE COMMENCEMENT
OF ANY ARBITRATION PROCEEDING TOLLS SUCH STATUTES OF LIMITATIONS.
(n) IN ANY ARBITRATION PROCEEDING SUBJECT TO TillS PROVISION, THE ARBITRATORS, OR MAJORITY
OFTHEM,ARESPECIFICALLYEMPOWEREDTODECIDE(BYDOCUMENTSONLY,ORWITHAHEARING,ATTHE
ARBITRATORS' SOLE DISCRETION) PRE-HEARING MOTIONS WHICH ARE SUBSTANTIALLY SIMILAR TO PRE-
HEARING MOTIONS TO DISMISS AND MOTIONS FOR SuMMARY ADJUDICATION.
( o) . THIS ARBITRATION PROVISION. SHALL SURVIVE ANY TERMINATION,- AMENDMENT, OR EXPIRATION
OF THE AGREEMENT IN WHICH THIS PROVISION IS CONTAINED, UNLESS ALL OF THE PARTIES OTHERWISE
(p) THE PARTIES ACKNOWLEDGE THAT THIS AGREEMENT EVIDENCES A TRANSACTION INVOLVING
ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION CL;).USE OF THIS AGREEMENT.
(q) THE ARBITRATORS, ORA MAJORITY OF THEM, SHALLA WARD ATTORNEY'S FEES AND COSTS TO THE
PREVAILING PARTY PURSUANT TO THE TERMS OF TillS AGREEMENT.
(r) NEITHER THE PARTIES NOR THE ARBITRATORS MAY DISCLOSE THE EXISTENCE, CONTENT, OR
RESULTS OF ANY ARBITRATION HEREUNDER WITHOUT PRIOR WRITTEN CONSENT OF ALL PARTIES AND/OR
COURT ORDER.
(') VENUE OF ANY ARBITRATION PROCEEDING HEREUNDER SHALL BE IN THE COUNTY WHERE BENEFI-
CIARY IS LOCATED.
Notwithstanding the provision above relating to conducting a foreclosure sale(s) pursuant to the provisions of this Deed OfTmst, the
Trustee shall, and is hereby directed to, comply with the provisions of Chapter 51 of the Texas Property Code (the "Property Code'')
as it may be amended and in effect as of the date or dates of any foreclosure proceedings conducted pursuimt to this Deed Of Trust. In
particular, the location and time of sale shall be held in accordance with. Section 51.002 of the Property Code' or any amendments there-
to or re-enactment or revisions to such law,
Grantors stipulate and .agree that for purposes of determining the fair market value of the Property (or any .portion thereof), as such
term is used in Section 51.0_03 of the Texas Property Code, is- sold. at a judicial foreclpsure sale pursuant to the tenns of this
Deed Of Trust (and in accordance with Section 51.002 of the Property Code), following factors shall be used to determine such
Property's fair market value, for such purpOses: (a) the Property shall be va1ued "AS IS" without any value being anticipated for any
improvements or refurbishing to be conducted, or conducted, after the date of the foreclosure sale, (b) the intention of the purchaser
to rewsell the Property Promptly, without any extensive holding (c) any re-sale shall be for cash 9nly, without fmancing by the
seller, (d) all reasonable costs Of closing a re-sale shall be deducted from the reasonable costs of closing a re-sale shall be deducted
from the estimate of fall market value, such as attorneys' fees, title policy premiums, surve)ror fees and expenses, the then prevailing
broker's or salesman commission, uD.paid ad valorem tax amoUnts, and (e) the application of a the value to be applied to
any future sales price to arrive at its then current fair market value, Grantors further stipulate that any value given to such Property in
connection with Grantors-' obtaining of the loan from Beneficiary to which this Deed OfTmst relates, or not any other time or times,
shall not be used and shall not be considered for guidance in determining the fair market value of such Property on the date of any such
foreclosure sale.
Leasehold Covenants. If the interest of Grantors in the Property is a leasehold interest and not a fee ownership, then the lien of this
Deed Of Trust shall be upon the leasehold rights and benefits of Grantors, but, in no ev-ent shall any of the burdens or obligations under
said leasehold be assumed by, or be the Beneficiary absent an expre_ss written instrument, executed by B_eneficiary
assuming such obligations, which shall be within the sole discrl'ltion of Beneficiary .
To the extent Grantors-own a leasehold interest in all or any portiqn of the Property, Grantors hereby covenant and agree as follows:
(a) Grantors will at all times fully perform and comply with all agreements, covenantS, terms and conditions imposed upon or
by iF- as tenant or under any and all leases B:ffecting the Property (collectively, the ''Lease'j, true and correct cOpies of
Page 11 of13 D0Tw12/03 w IBC9004
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which Grantors shaH deliver to Beneficiary, and that if Grantors shall fail to do so, BenefiCiary may (but shall not be obligated to). take
any action Beneficiazy deems necessary or desirable to prevent or to cure any default by Grantors in the perforinance Of or compliance
with any of Grantor's covenants or obligations under the. Lease. Upon reeeipt by Beneficiary from the landlord under the Lease of any
written notice of default by Grantors thereunder, default pr any written nOtice of default, or the nature thereof be questioned or denied
by Grantors or by any party on and. on behalf of Grantors,. Grantors hereby expressly grant to Beneficiary aD.d agree that Beneficiary
shall have the and immediate right to enter in and upon the leased.premises or any part thereof that Beneficiary deems nec-
essary or desirable in order to prevent or to cure any default by Grantors under the Lease. Beneficiary may pay and expend such sums
of money as in its sole discretion deems necessary for any such pwpose, and Grantors hereby to pay to Beneficiary,
immediately upon demand, all such sums so paid and expended by Beneficiary. All sums so paid and expended by Beneficiary shall
accrue at the rates set forth in the Note and be added to and be secured by the lien of this Deed Of Trust.
(b) Grantors will not surrender the leasehold estate and :interest hereinabove desCribed, nor terminate or canCel the Lease; and it
will not; without the express written cOnsent of Beneficiary, modify, change, supplement, alter or amend the Lease eithet orally or in
Writing. Any such termination, cancellation. modification. change, supplement, alteration or amendrQ:ent of the Lease without the prior
written consent thereto by Beneficiary shall be void and of no force and effect. As further security to Beneficiary, Grantors shall deposit
with Beneficiary an original of the Lease and all amendments thefeto or a certified copy thereof, to be retained by Beneficiary until the
indebtedness secured hereby is fully paid.
(c) No release or- forbearance of ilny Of Grantors' obligations under the Lease, pursuant to the Lease or otherwise, shall release
Grantors from any of its obligations under this Deed Of Trust, including obligations with 'respect to the payment of rent as provided
for in the Lease and the performance of all of the terms, provisions, covenants, conditions and contained in !he Lease, to
be kept, performed and complied with by Grantors therein. .
(d) Unless Beneficiary shall .otherwise expressly consent in writing,- the fee title to the property demised by the Lease and the
'leasehold. estate shall not merge but shall always remain separate and distinct, notwithstanding the union of said estates either in the
landlord or in the te.nant, or in a third party by or otherwise;
(e) If. there shall be filed by or against Grantors a petition under the Bankruptcy Code, 11 U;S.C. 101 et seq. (the "Bankruptcy
Code"), and Grantors, as lessee under the Lease; shall determine to reject the Lease pursuant to Section 365(a) of the Bankruptcy Code,
Grantors shall give Beneficiary not less than thirty (30) days prior notice of the date on which Grantors apply to the Banlauptcy.
Court for authority to reject the Lease. Beneficiary shall have the right, but not the obligafiori, to Grantors within such ten
day period a notice stating that (i) Beneficiary demands Grimtors assume and assiin the Lease to Beneficiary purs.Uant tO Section
365 of the BankruPtcy Code and (ii) Beneficiary covenants to cure or provide adequate assuranCe ofpr6mpt cure:of 'an defat.ilts ani!
provide adequate assll!ance of future performanCe under the Lease. If Beneficiary selves upon Grantors the in the
preceding sentence,. Gili.ntors shall not seek to reject the Lease and shall-comply with -i:l:ie demand p!Ovided theC'tii.lse (i) of the
preceding sentence, within 30 days after the notice shall have been given subject to the perfonnance by'Benefici<if:Y 'Of the coVenant
provided for in clause (ii) of the preceding sentence. Further, effective u.pon-the entry of an order for re1ief in respect of Grantors under
Chapter 7 of the Banlauptcy Code, Grantors hereby assign and transfer to Beneficiary a non-exclusive right to apply to the Barikiuptc'y
Court under Subsection 365( d)(l) of the Bankruptcy Code for an order' extending the period during which the Lease may be rejected
or assumed.
NO ORAL AGREEMENtS
THIS WRITTEN AGREEMENT REPRESENTS THE FJNAL AGREEMENT BETWEEN THE PARTIES ANP MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR. CONTEMPORANEOUS. OR SUBSEQUENT ORAL AGREEMENT OF
THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES ..
-J 'March
Dated this------'"'--'=--------:._:_- day
GRANTOR: STACI PROPERTIES, .LTD.'
BY:
By:
BY:
STATE OF TEXAS
COUNTY OF. __ _

GRANTOR:
Address
San 'Antonio, Texas
(Acknowledgment)
This instrument was acknowledged before me on---------'-----------------

My commission expires:: _______________ _
Page 12 of 13 DOT-12/03 -IBC9004
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='
STATE OF TEXAS
COUNTY OF ___ _

. This instniment was aclmowiedged before me on-----------"---------------
ey _____________________________ _
STATE OF TExAs
COUNTY OF BEXAR

Notary Public, State
My commission expires:-'..----------------
This inst'mment was acknowledged before me on 2., 200.5 by Walter Scott Jensen1 Sole
Member of Sta Management, LLC, a Texas limited liability ccmpany, ge-neral, partner(s) on behalf of
Staci Properties, rtd a Texas Hmited partnership on behalf of said partnership.
STATE OF TEXAS
COUNTY OF----

(Corporation Acknowledgment)
This instrument Was acknowledged before me
as
a _____________________________ corporation, on behalf of said corporation,
Notary PV.blic, State of Texas
My commission expires:--------------,----
After recording, return to Beneficiary, at mailing address, as follow:
Credit Department
130 E. Travis
Page 13 ofl3 DOT-12/"03 - IDC9004
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Tract 1:
EXHIBIT "A"
LEGAL DESCRIPTION
unrecorded Plat filed. in Bexar County Tax Assessors Office Bexar County,
Texas, and a portion of lot 53, Block 39, NCB 3698, Las Villas De Merida as
recorded In Volume 9555, Page 72, Deed and Plat Records of Bexar County,
Texas: said 5.779 acre tract of land being more particularly described by
BEG 1 NN 1 NG, at a found 1/2 l nch 1 ron rod on the souther I y r 1 ght of" way I i ne or
Merida Street, for the northeasterly corner of said lot 53, Block 39, same
THENCE, S 84' 22' 25" E, along the southerly right of way line of Merida
Street, a distance of 706.56 feet to a found 1/2 Inch Iron rod on the
northwesterly right of way I line of The Union Pacific Railroad;
THENCE, Southwesterly, along the arc of a curve to t h ~ left having a radius
of 2865.00 feet, a central angle of 14" 22' 30", .an arc l.ength of 718.80 feet
and a chord bearing: s 43a 18' 41" W, 716.91 feet, to a found 1/2 inch iron
rod;
THENCE, S 36' 02' 54" W, continuing along the northwesterly right of way I ine
of The Union Pacific Rallraod, a distance of" 183.64 feet to a set 1/2 Inch
Iron-rod on the northerly right of way line of Ceralvo Street for the
southeasterly corner of satd Lot 53;
THENCE, N 84," 10' 44" W, along the northef-ly right o"f way line of Ceralvo
Street, a distanee of 35.88 feet to a set 1/2
Inch iron rod;
THENCE, crossing said LotS3, Block 39, the following courses;
N 05' 34' 47" E, a distanCe of 90.14 "Feet to a set 1/2 inch iron rod;
s
ega
48' 09" E, a distance of 10.75 "Feet to a set 112 Inch iron rod;
N 06'
,,.
51" E, a rlistance of 21.99 feet to a set 1/2 Inch Iron rod;
N 83" 48' 09" w. a distance of 13;64 feet to a set 112 inch iron rod;
N 06'
11
51"
~ . a distance of 230.44 feet to a set 1(2 inch
Iron rod;
N 83' 48' 09"
w. a distance or 23.07 "Feet to a set 1/2 inch iron rod;
N 06" 11' 51" E, a distance of 18.94 Teet to a set 112 inch iron rod on the northerly
line of said Lot 53, Block 39;
THENCE, N 94 25' 13" W, along the northerly line of said Lot 53, Block 39, a distance
of 120 ;01 "feet to a found 1/2 Inch I ron rod fbr an interiOr ang I e corner of sa I d lot
THENCE, N 06g 14' 30" E, along the easterly I ine of said lot 53, Block 39, a distance
of 363.95 feet to the POINT OF BEGINNlNG of' herein described tract, and containing
5. 779 acres of land, more or less.
Tract 2:
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EXHIBIT "A"
(continued)
2.0S9 acres of land situated In the City of San Antonio, Bexar County, Texas, being
the East 8.31 feet of lots 57 through 65, Block 40, NCB 3699, a.ll of lot 17, Block 40,
NCB 3699, Edgewood Addition, as recorded In Volume 1625, Page 317, Deed and Plat
Records of Bexar County, Texas, and all of Lot 18, Block 40, NCB 3699, H.A. Stauffer &
H.G. Deviney Subdivision as recorded In Volume 3975, Page 223, Deed and Plat Records
BEGINNING, at a 1/2 Inch iron rod set on the northerly right of way line of Merida
Street, said 1/2 Inch iron rod being N 54 22' 25" W, _8.31 feet from the southeast
-corner of said Lot 65;
THENCE, N os 14' 53" E, crossing said Lots 57 through 65, Block 40, along the westerly
line of that certain tr.act of land conveyed to West Coast Produce Company, Inc: as
"recorded In Volume 7133, Page 968, Official Public Records of Bexar Cqunty, Texas, a
distance of 364.13 feet to .a 1/2 inch iron rod set;
THENCE, S 54 21' 53" E, along the northerly line of" said Lot 57, at a distance of
8.31 feet passing the northeast corner of Lot 57, same being the northwest corner of
Lot 17, at a distance of 127.92 feet passing the nOrtheast corner of Lot 17. same
being the northwest corner of said lot 18, in all a total distance of 247.52 reet to a
1/2 Inch iron nod set for the northeast corner of said Lot 18, same being the
THENCE, S 06 14' 53" W, along the common bOundary. line between Lot 18 and Lot 1.9, a
distanCe of 364.09 feet to a 1/2 inch iron rod set on the northerly right of.way line
. corner of Lot 19;
THENCE, N 84' 22' 25" W, along the northerly right of way I ine of Merida Street, at a
distance of 119.60 feet passing the southwest corner of Lot 18. same being the
southeast corner of Lot 17, at a distance of 239.21 feet passing the southwest Corner
247.52 feet to the POINT OF BEGINNING of herein described tract, and containing 2.069
acres .of land. more or less.
Tract 3:
Lot 17, Block 3, New City Block A36; Gillis Hood, Unit 2, anaddltion to the City of
San Antonio, Bexar County, Texas according to the map or plat thereof", recorded in,
Volume.9512, Page 91, Deed and Plat Records of Bexar County, Texas, SAVE AND EXCEPT
that portion conveyed to the City of San Antonio In Volume 5202, Page 1204, Official
Public Records of Real Property of Bexar Texas.
DoCl:t 20050045398 Fees: $42.-00
03/03/2005 . 2:38PM # 15
F.iled & Recorded in the Official
Records of BEXAR COUNTY
Public
1
000.00 Note with Extension Pg 1 of 11
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REAL ESTATE LIEN NOTE
Amount: $1,300,000.00
Date: _ R:__;Cf__:_,___, ___ __:_ __ _
For value received, the receipt of which is hereby acknowledged, the undersigned, jointly and severally, (hereinafter
"Borrower", whether one or more) promise to pay to the order of IN'T?RNATIONAL BANK OF (hereinafter
"Lender"), at 130 E. Travis, San Antonio, Bexar County, Texas 78205, the sum of ________ _:__: ______ _
ONE MILLION THREE HUNDRED THOUSAND AND N0/100 DOLLARS
Dollars ($ 1 , 3 00 , 000. 00 ), in legal and lawful money of the United States of America, with interest as it
accrues on the outstanding principal balance from. date of advance of such principal until
XX
The interest rate shall be"' ___________ percent per annum; or
The interest rate shall be floating at 0. 25% percent per annum above the NEW YORK
PRIME "RATE ("Prime Rate") (described below) as it fluctuates from time to t4ne; provided.
n6 event shall the rate of (plus in excess thereof, if any) to be paid on the unpaid
pnnc1pal of this be less perc.ent am_mm, nor more than the maximUlll legal rate
by applicable iaw. The starting interest rate on this Note shall be 7. 25% percent per
annum. The rate of interest due hereunder shall be recomputed as of the date of any change in the Prime
The niTERNATIONAL BANK. OF COJ\.1l'.4ERCE PRlME RATE shall mean the annual lending rate of interest
announced from time to time by Lender, as its prime rate.
XX The NEW YORK PRIME RATE shall mean theannuallending rate of interest announced from time time by
JP Morgan Chase & Co., "New York, New York, as i,ts prime rate, If the New York Prim.e.Rate has been selected as
the Prime Rate and if; thereafter, a prime rate is not announced by JP Morgan Chase & Co., New York, New York,
then the International Bank Prime minus one percent (1%) shall be the Prlw.e R,.ate,
of either of said Prinui Rates is not to be construed as a >yarranty or representation that rates are favorable than .another
iate or :index, that rates on other loans or credit facilities may not be based on other indices or. that rates on loans to others may not be
.....
The interest is calculated on a 360-day factor applied on a 365-day year, or a 366-dayyear, in the event that the year is a leap year, on
the unpaid principal to the date of each installment paid and the payment made credited first to the discharge of the interest acciued and .
the to the reduction of the principal. however, that in the event the interest rate reaches the maximum rate allowed
by applicable law, said maximum legal rate shall be computed on a full calendat year 365/365 days basis or on a 366/366 days basis, in
the event that the year is a leap year. The interest char:ged and herein.contracted fOr.will not exceed the mroP.mum all9wed by law.
Matured unpaid amounts will be"ar interest compui:ed on a full calendar 365/365 .days a 366/366 days basiS, in the event
that the year is a leap year, at the highest legal rate ofiD:terest allowed by Texas law, Federal laW allows a higher interest rate, in
which case, Borrower agrees to pay the rate allowed Qy Federaliaw. If applicable law does not set a maxhn:Urn rate of interest for
matured unpaid then B?JTower agrees that the maximum rate fQr shall Pe (18%) annum.
To the extent allowed by law, as the late payment charge "l!Jlder fuisA.greement, Bank may in its sole discrej::ion {i)-increase the interest
on the principal pOrtion of any payment amount that is not receiv"ed by the payment due date to the maximum rate allowe"d b)r law,
computed on a full calendar year basis from tQ.e payment due date Until paid, or (li), shoUld anY not be made within teri (10)
days of the due date, require Borrower to pay a one time "late charge" per late pa"yment equal to five percent (5%) ofth"e ampunt of the
past due principal and interest of such payment, with a minimum df$10.00 and a ma?dmuni of $1,500.00 per late payment. The "late
charge" may be assessed without notice, and shall be immediately due and payable. This provision is inapplicable if the" outstanding
indebtedness under the Note is accelerated. No late charge will be assesse9. on any payment when the only delinquency is due to late
charges assessed on earlier payment and the payment is a payillent.
The outstanding and unpaid principal of this Note arid all accrUed and.unpaid interest aie payable as follows:
Number of Payments Frequency Amount ofPaymeDis When Payments are Due
SEE ADDENOUM TO REAL ESTATE LIEN NOTE-AND BALLOON RIDER ATTACHED HERETO AND INCORPORATED
HEREIN .
FinalMaturityDate: 5, 2010
Lender may, at its discretion, adjust the amount of periodic payments described above to assure that the remaining payments will fully
amortize the principal oftbis note on tlie stated maturity any "Balloon" or unequal payment.
TI!IS OBLIGATION HAS THE FOLLOWING DEMAND FEATURE:
At any time, and from to time, whether not prior to and/or during said payment dates, Lender may, in its sole and
absolute discr"etion, reschedule, rearrange and/or accelerate, in whole or in part, the outstanding and unpaid principal balaD.ce, and all
and interest under this Note. agrees and promises to pay Lender all_ accelerated principal and all accrued and
unp8id interest on such principal. No nqtice of intent to accelerate shaD, be required of Lender and Borrov.:er expressly waives any right
to notice of Lender's intent to accelerate. The foregoing right to malce demand for immediate payment of this Note, in whole .or in part,
may be exercised bX Lender f91' any :reasonwhatsoever, whether or not Borrower js in default hereunder and in advance ofits.schecfuled
maturity.
PAGEl OF6
The failure Borrower to paY any of the above-sta!ed payment(s) of principal or any interest thereon, when.the same is due and
payable, shall Lender at its option, to accelerate the maturity, without notice to Borrower, of all, or any portion, of the remaining
Unpaid principal balance outstanding and all accrued and unpaid interest of this Note, whereupon the same shall be due and payable
immediately.
. .
at its discredon, ma):' declare all owing by Borrower (inclucfing endors.ers and/or guarantors) immediately due and payable
upon deeming itself to be adversely affected and/or insecure by reason of any material change in any of Borrower's (including any
endorsers and/or worth. or by reason of any materlal change of condition whether or not descn'bed
Borrower and Lender intend that the loan f:videnced by this Note (the "ioan") shall be in strict compliance with applicable usury laws.
If at any time any interest contracted for, charged or received under this Note or otherwise in connection v.rith the Loan would be
usurious under applicable law, then regardless of the provisions of this Note or the docunients and instruments evidencing, securing or
othen.vise executed in connection with the Loan or any action or event (including, without prepayment ofprincipalhereunder
or acceleration of maturity by the Lender) which may occur with re"spect to this Note or the Loan, it is agreed that all swns determined
to be usurious shall be iri:nnediateJyCreditedby the -Lender as a payment of principal heieunder, or if this Note has already been
imniediately refunded to the'Borrower. All compensation Which constitutes interest lDl.der applicable law in connection with the Loan
shall be amortized, allocated and spread over the full period of time any indebtedness is owing by Borrower, to the greatest
extent permissible without exceeding the applicable maximum rate allowed by applicable law effect from time to time during such
_.:,. :.:
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period: .
In no event shall the of Chaptef 346 of the Texas Finance COde, (which regulates certain revolving loan accounts 3nd
revolving tri-party ?Ccounts)' apply to the Loan.
IN THE EVENT ANY ITEM, ITEMS, TERMS OR PROVIsiONS CONTAINED IN THlS INSTRUMENT ARE IN CONFLICT
WITH THE LAWS OF TilE STATE OFTEJC,\.S;ORFEDERALLAW, THIS INSTRUMENT SHALLBEAFFEC1ED ONLY AS TO
ITS APPLICATION TO SUCH ITEM, ITEMS, TERMS ORPROVISIONS,AND SHALL IN ALL OTHER RESPECTS REMAIN IN
FULL FORCE AND EFFECT. IT IS UNDERSTOOD AND AGREED THAT IN NO EVENT AND uPON NO CONTINGENCY
SHALL THE BORROWER OR ANY PARTY LIABLEHEREON, OR HEREFORE, BE REQUIRED TO PAY INTEREST IN
EXCESS OFTimRATEALLOWEDBYTilELAWS OF TilE STATE OF TEXAS OR FEDERAL LAW, IF SUCHLAWPERMITS
A GREATERRATE.OF INi:ERllST. THE INtENTION OF TilE PAKrffiS BEING TO CONFORM STRICILYTO TilE USURY
LAWS AS NOW OR HEREiNAFTER CONSTRUED BY TilE COURTS HAVING JURISDICTION.
TilE BORROWER, SURETIES, GUARANTORS AND AIL PERSONS TO BECOME LiABLE ON THIS NOTE
(TilE "OBLIGORS") HEREBY, JOINTIY AND SEVERALLY, WAIVE EXPRESSLY ALL NOTICES OF OVERDUE
INSTALLMENT PAYMENjrS, AND DEMANDS FOR PAYMENT THEREOF, NOTICES OF INTENTION TO ACCELERATE
MATURITY, NOTICES OF ACTUAL ACCELERATION OF MATURITY, PRESENTMENT, DEMAND FOR PAYMENT, NOTICES
.OF DISHONOR, PROTES:r, NOTICES OF PROTEST, AND DILIGENCE IN COlLECTION HEREOF. EACH OBLIGOR
CONSENTS THAT THE LENDER OR OTHER HOLDER OF THIS NOTE MAY AT ANY TIME, AND FROM TIME TO TIME,
uPON REQUEST OF OR BY AGREEMENT WITH ANY OF THEM, RENEW THIS NOTE AND/OR EXTEND TilE DATE OF
MATL'RITYHEREOF OR CHANGE THE TIME OR METHOD OF PAYMENTS WITHOUT:t,!OTICE TO ANY OF TilE OTHER
OBLIGORS, MAKERS, SURETffiS OR ENDORSERS, WHO SHALL REMAIN BOUND FOR THE PAYMENT HEREOF.
OBLIGORS WANE EXPRESSLY THE LATE FILING OR ANY SUIT OR CAUSE OF ACTION HEREON, OR ANY DELAY IN
THE HANDLING OF ANY COLLATERAL. OBLIGORS AGREE THAT HOLDER?S ACCEPTANCE OF PARTIAL OF
DELll<QUENT PAYMENTS OR FAILURE OF HOLDER TO EXERCISE ANY RIGill OR REMEDY CONTAINED HEREIN OR
IN ANY INSTRUMENT GIVEN AS SECURITY FOR TilE PAYMENT OF THIS NOTE SHALL NOT BE A WANER OF ANY
OBLIGATION OF TilE OBLIGORS OR CONSTITUTE WAIVER OF ANY PRJ OR OR SUBSEQUENT DEFAULT. TilE HOLDER
REMEDffiD ANP MAY WAIVE ANY DEFAULT
. . . . . .
As for. this Note, and.all.othet indebtedness which may at ail.y time be owing by (and any endorsers and/or
guarimtors hereof) to Lender or other Lender hereof, Borrower (and any endorsers and/or guarantors hereof), gives to Lender or other
Holder hereof, a security interest, a lien and contractual right of set-off in and to all of the Borrower's (and any endorsers and/or
guaranta:rs hereof) money, deposit accounts, accouDts and/or other property now m, or at any time hereafter coming within, the
custody or control ofLendeJ; or other Holder hereof, or ruiy member bank or branch b8nk. of International Bancshares Corporation,
whether held in general or special accmmt or deposit, .or.for -safekeeping or otherwise. Every, such security interest and right of set-off
may be exercised without demand or nOtice to Borrower (and any endorsers and/or guarantors hereof). No security interest or right of
set-:oflto such security interest shall be_ to p.ave been waived by any act or conduct on t4e part of the Lender, or by any
fail1..1re .to exercise such right of set-off or to enforce such Security interest, or by any delay in so doing. Every right of set-off and
secUrity interest shall continue force and effect until such right of set-off or security ID.tere_st is specitically waived or released by
an instrument in writing by Leilder. The foregoing is in additiOD. to imd not in lieu of any rights of set-off allowed by law.
In connection with any transaction Lender at any time in the present or future, in Borrower,
individually or jointly with others, has granted or grants Lender a lien On anY real and/or personal prOpertY, Bonower.agrees that the
on such real and/or personal prOperty to the extent ofBorrower's interest shall also secure the. :indebtedness of BorroWer to Lender
evidenced by this Note and all renewals, extensionS ahd modifications '
_Financing Statements: At Lender's request DebtOr will sign all Other doc.unients, including :fmancing and
certificates of title, to protect, and continue Lender's security interest in the Collateral at the sole cost of Borrower. Debtor
hereby authorizes Lender to 'file a Financing Statement, an Amended Financing Statement an4 a Continuation financing Statement
(collectively referred to as the "Financing Statement'') describing the Collaterhl. Where Collateral is in the posseSsion of a third party,
Debtor \villjoin with Lender in llotifying the third party ofLender's security interesrand obtaining a Control Agreenient from the third
party that "it is holding the coliateral for the benefit of Lender. -
If this Note, or any part hereof, is not paid according to its terms,. is placed in the hands of an attoiney or is collected
through Probate, Bankruptcy or other judicial or non-judicial proceed.ings, whethei- matured by expiration of time or by the exercise of
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the option given to the Lender to inature it, the Borrower and all parties now or hereafter personally liable hereon agree to and shall
pay an additionai _amount equal to reasonable and necessary attorlley's fees and associated costs for collection. Said attorney's fees and
costs of collection, once liquidated.and paid by Lender or otherwise allowed by law, will bear interest at the rate of interest applied tO
the matured and past-d-qe balance of this-Note as such rate may Change from to time the date due until repaid.
In the event any.legal action "or proceeding, by arbitratif:!li or otherwise, is Comme;tced with.the enforCeD,lent of, or
declaration ofr:].ghts under this Note and/or any instnunent or written agreement reqW!ed or delivered under .or pursuant to the terms of
this Note, and/or any controversy or claim, sounding in contract, tort or statute, legal or equitable: involving in any way the
financing or the transaction(s), the subject of this Note, or any other proposed or actual loan or extension of credit, the prevailing party
shall be entitled to recover reasonable and necessary attorney's fees, costs (including all.ocated costs for in-house legal
sen?ces), costs, expenses, expert witness fees and_ and other necessary disbursements. made in Connee:tion with any_ such action or
proceeding, in the amount the fact-finder,
Lender, :in its sole discretion and obligation on Lender to do so, may advance pay .on behalf and for the of
Borrower costs protection and preservation of the collateial s"ecuring this Note and other- costs that may be
appropriate, in sole discretion,_:incliiding but not limited to insurai:tce premiunist ad Valorem taxes,_ and attorney's fees. .AJJ.y
which may be so paid out by Lender and all sums paid fqr :insur;mce premiums, as aforesaid, including the costs, expenses and
attoniey's fees J?aid :in:. any suit affecting said property when necessary to the lieD. hereof shall bear interest from the dates of such
payments at -the :interest rate applied to the and prip.cipal balaD.ce of this Note and shall be paid by Borrower to Lender
upon demand, at the same place at which this Note is payable, and Shall be deemed a part of the debt and recoverable as such in all
aspects.
BorrOwer reserves the right to prepay, prior to i:naturity, all pr any part of the principa"l or"-this Note without penalty, and interest shall
immediately ceaSe on any amount so prepaid All prepaYments shall Pe applied to, I.2st matuiing installinents of principal, without
interrupting the re.gular installment payments. . . .
Any assumption, if permitted by Lender, by any other person, partnership, corporatfon, organization or any other entity without the
express written consent of Lender, shall not release the liability ofBonJlWer fo! the payment of. this Note ..
. In the event that the hereinafter described real Propert)r is sold, conveyed, or disposed of without the prior written of
the Lender, the mahlrit)r of this Notemay, at the option of the Lender, be accelerated tiDd may immediately demand payment of
the then outstanding together with all accrUed an!f unpaid
. . . . .
Borrower and Lender and agree-that in,the evmt .a 4efault this Note or under any document
executed.by Borrower in connection with, or to secure the payment of, this Note (!}Lender shall nqt required to comply with
Subsection 3;05(d) oftht: Texas Revised Partnership Act and (2) Lender shall not be required to proceed_ as;ainst or exhaust the assets
of Borrower before pursuing any against one or more of the partners of Borrower or the projlerty of such partners,
ARBJTRATION.
BORROWER AND LENDER FURTHER AGREE AS FOLLOWS:
(a) ANY AND ALL CONTROVERSIES BETWEEN THE PARTIES; EXCEPT SUCH CLAlMS AND
CPNTROVERSIES WHICH ARE CONSUMER RELATED AND INvOLVE AN AGGREGATE AMOUNT IN
CONTROVERSY OF LESS THAN TEN THOUSAND :POLLARS SHALL BE 'RESOLVED BY
ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION IN EFFECT AT THE TIME OF FILING, UNLESS THE COMMERCIAL
ARBITRATION RULES CONFLICT WITH THIS PROVISION, AND IN SUCH EVENT THE TERMS OF TillS
PROVISION SHALL CONTROL TO THE EXTENT OF THE CONFLICT. NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, SAVE AND EXq:PT SUBPARAGRAPHS (k}, (m), (o), (p), AND(')
HEREIN, THOSE CONSllMER RELA,TED CLAIMS AND CONTROVERSIES INVOLVING AN AGGREGATE
AMOUNT OF LESS THAN TEN THOUSAND. DOLLARS ($lO,OOO:oO) SHALL BE CONDUCTED IN
ACCORDANCE WITH THE AMERICAN ARBITRATION ASSOCIATION RULES FOR THE RESOLUTION OF
CONSUMER-RELATED DiSPUTES OF LESS THAN TEN THOUSANJJ DOLLARS. ANY ARBITRATION
AMERICAN ARBITRATION ASSOCIATION AND SELECTED IN ACCORDANCE WITH THE COMMERCIAL
ARBITRATION RULES OFTH;E AMERICAN ARBITRATl<)N FAILUBE (lF ANY ARBITRATOR
TO DISCLOSE ALL FACTS WHICH MIGHT, TO AN OBJECTIVE OBSERVER CREATE A REASONABLE
. IMPRESSION OFTHEARBITRATOR'SPARTIALITY,AND/OR MATERIAL ERRORS OF LAW SHALL BE
GROUNDS [IN ADDITION TO ALL OTHERS] FOR VACATUR OF AN AWARD RENDERED PuRSUANT TO
THIS AGREEMENT. , . ,
(b) THE AWARD OF THE ARBITRATORS, ORA MAJORITY OF THEM, SHALL BE FINAL, AND JUDGMENT
lll'ON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT, STATE OR FED.ERAL, HAVING
JURISDICTION. THE ARBITRATION AWARD SHALL BE IN WRITING AND'SPECIFY THE FACTUAL AND
LEGAL BASES FOR THE AWARD; UPON THE REQUEST OF ANY PARTY, THE AWARD SHALL INCLUDE
FINDINGS OF FACT AND CONCLUSIONS OF LAW,
(c) ARBITRABLE DISPUTES JNCLUDEANY AND ALL CONTROVERSIES OR CLAlMS BETWEEN THE PARTIES
OF WHATEVER TYPE OR MANNER,JNCLUDJNG WITHOUT LIMITATION, ANY CLAlM ARISING OUT OF
OR RELATING TO TillS NOTE, ALL PAST, PRESENT AND/OR iroTURl!: CREDIT FACILITIES AND/OR
AGREEMENTS INVOLVING THE PARTIES, ANY TRANSACTIONS BETWEEN OR JNVOLVING THE
. PARTIES, AND/OR ANY ASPECT OF ANY PAST OR PRESENT RELATIONSHIP OF.THE PARTIES, WHETHER
PARTY. ,
Page 3 of6
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(d)
(o}
(f)
TIIEPARTIESSHALLALLOWANDPARTICIPATEINDISCOVERYINACCORDANtEWtrHTHEFEDERAL
RULES OF CIViL 'PROCEDURE FOR A PERIOD OF ONE HUNDRED TWENTY (120)'DAYS AFTER THE
FILING OF THE
1
ORIGINAL RESPONSIVE PLEADING. DISCOVERY MAY CONTINUE THEREAFTER AS
AGREED BY THE PARTIES OR AS ALLOWED BY THE ARBITRATORS. UNRESOLVED DISCOVERY
DISPUTES SHALL BE BROUGHT TO TilE ATTENTION OF THE ARBITRATORS BY WRITTEN MOTION FOR
PROPER DISPOSITION, INCLUDING RULiNG ON ANY ASSERTED OBJECTIONS, PRIVILEGES, AND
PROTECTIVE t>RDER REQUESTS AND' AWARDING iiEASONABLE ATTORNEY'S FEES TO THE
PREVAILING PA:RTY. .
IN THE EVENT TilE' AGGREGATE OF ALL AFFfRMATIVE CLAIMS ASSERTED EXCEED $500,000.00,
EXCLUSfVE OF iNTEREST AND ATTORNEY'S FEES, OR UrON TilE WRITTERiiEQUEST OF ANY PARTY,
(1) PRIOR TO :f'HE DISSEMINATION OF A LIST OF l'OTENTIAL ARBITRATORS, THE AMERICAN

TilE DISPUTE ANDTliE ANTICIPATED LENGTH OF HEARINGS AND SCHEDULING; (ll)TO DISCUSS THE
VIEW OF THE l';ffiTIES ABoUT ANY TECHNICAL AND/OR OTIIER.SPECIAL QUALIFitATIONS OF THE
ARBITRATORS;< AND (C) TO CONSIDER; WHETHER MEDIATION OR OTHER METHODS OF DISPUTE
RESOLUTION MIGHT BE APPROPRIATE, AND (2). AS PROMPTLY AS PRACTitABLE AFTER THE
SELECTION OF TilE ARBITRATORS, A PRELIMINARY HEARING SHALL BE HELD.AMONG THE PARTIES,

RATHER THAN IN AT THE PRELIMINARY HEARING THE MATTERs THAT MAY B.E
CONSIDERED SHALL INCLUDE, WITHOUT LIMITATION, A PREHEARING SCHEDULING .ORDER
ADDRESSING (A) EACH PARTY'S DUTY TO SUBMIT A DETAILED STATEMENT OF CLAIMS, DAMAGES
AND/OR DEFE/{SES;A STATEMENT OF THE ISSUES ASSERTED BYEACHPA.jl.TY AND ANY LEGAL
AUTHORITIES TilE PARTIES MAY wiSH TO BRiNG TO THE ATTENTION OF THE ARBITRATORS; (B)
RESPONSES AND/OR REPLIES TO THE PLEADINGS FILED IN COMPLIANCE WITH SUBPART 2(A); (C)
STIPULATIONS REGARDING ANY UNCONTESTED FACTS; (D) EXCHANGE AND PREMARKIN<:; OF ALL
DOCUMENTS :WHICH EACH PARTY BELIEVES MAY BE OFFERED AT THE FINAL ARBITRATION
HEARING; (E) THE IDENTIFICATION AND AVAILABILITY OF WITNESSES, INCLUDING EXPERTS, AND
SUCH ADDITIONAL MATTERS REGARD,ING WITNESSES INCLUDING TIIEfR BIOGRAPHIES AND A
SHORT SUMMARY OF THEIR EXPEC.TED TESTIMONY, (F) WHETIIERA STENOGRAPHIC OR OTHER
OFFICIAL REC@RD OF TilE PROCEEDiNGS SHALL BE MAINTAINED; AND (G) THE POSSIBILITY OF
UTILIZING M;EiJIATiON.OR OTHE:RALTERNATIVE METIIODS OF DISPUTE RESOLimON.
FOR PURPOSESOF TillS PROVISION, "THE PARTIES" MEANS BORROWER AND LENDER, AND EACH
AND ALL PERSONS AND ENTITIES SIGNING THIS AGREEMENT OR ANY OTHER AGREEMENTS
BETWEEN OR AMONG ANY OF THE PARTIES AS PART OF TillS TRANSACTJON. "TilE PARTIES" SHALL
ALSO INCLUDE rnniVIDUALPARTNERS, AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS
AND/OR REPRESENTATIVES OF ANY PARTY TO SUcH DOCUMENTS, AND SHALL iNCLUDE ANY OTHER
OWNERANDHOLJ>EROFTHISAGREEJY,I]:NT. . .
;: ...
(g) . THE PARTlES SHALL HAVE THE RIGIIT TO. INVOKE SELF- HELP REMEDIES (SUCH. AS SET-OFF,
NPTI;liTCA:i:IO!'l OF ACCOU!'lT DEBtORS, SErZuRE AND/OR FORECLOSURE OF COLLATERAL, AND NON-
(h)
JUDiCIAL SALE,OF PERSONAL PROP:ERT).' ANI) REAL PI;OPERTY COLLA?CERAL) BEFORE, DURING OR : ; \ . .
AFTER AliY_ARBITRATION AND/ORREQUEST ANCILLARY (JR PROVISIONAL JUDICIAL REMEDIES ... . ..
(SUCH AS GARmSHMENT, AtTACHMENT, SPECIFIC PERFORMANCE,_RECE).VER, INJUNCTION OR ... .
' RESTRAINll-f ORDER, AND SEQUESTRATION) BEFORE OR AFTER ANY ARBITRATION. TilE PARTIES
''NEED NOT AWAIT TIIlf o{rrcolY,I]: OF THE ARBITRATION BEFOREUSINGBELF-HELPREMEDmS. USE
':OF SELF-HELP $ANCILLARY A,ND/OR PROVISiONALJUDICIA,LREMEDIESSHALLNOT OPERATE AS A
WAIVER OF EITIIEi\.PARTY'S RIGHT TO COMPEL ARBITRATION. ANY ANCILLARY OR PROViSIONAL
''REMEDYwiDCH WOULD BE AVAILABLE FROM A COURT AT LAW SHALL BE AVAILABLE FROM THE
ARBITRATo:RS. .
THE PARTIES AGREE THAT ANY ACTION REGARDING ANY CONTROVERSY BETWEEN THE PARTIES
.SHALL EITHER BE BROUGHT BY ARBITRATION, AS HEREIN, OR BY JUDICIAL
PROCEEDINGS, BUT SHALL NOT BE PURSUED SIMULTANEOUSLY IN DIFFERENT OR ALTERNATIVE
FOR!Yis. A TIMELY WRITTEN NOTICE OF INTENT TO ARBITRATE PURSUANT TO THIS AGREEMENT
STAYS AND/OR ABATES ANY AND ALL ACTION IN A TRIAL COURT, SAVE AND EXCEPT A HEARING ON A
MOTION TO COMPEL ARBITRATION AND/OR THE ENTRY OF AN ORDER COMPELLING ARBITRATION
AND STAYING ANDiORA)iATING 'tHE LITIGATION PENDiNG THE FILING OF-TilE FINAL AWARD OF TilE
ARBITRATORS. ALL RliMiONABLE AND .. llECESSARY ATTORNEY'S FEES AND ALL TRAVEL COSTS
SHALLB)i:AWARDli'D TO THE.PREVAILING. PARTY ON ANY MOTION TO COMPEL ARBITRATION AND
MUST BE PAID TO SUtHPARTYWITIIINTEN (10) DAYS OF TilE SIGNING OF TilE ORDER COMPELLING
ARBITRATION.
. .
(i) : ANY PARTY sHALLSERVEAWRITTENNj)TICE OF INTENT TO ARBITRATE T0cANY AND ALL OPPOSING
' PARTIES WITHIN 360 DAYS.AFTER DISPUTE HAS ARISEN. A DISPUTE IS DEFINED TO HAVE ARISEN
ONLY UPON'iiEcEJ;PT OFSERYJCE.OF ,rriDrqALPROCESS, INCLUDING SERVICE OF A COU!'lTERCLAIM,
' FAILlJ,RE TO A WRITTEN NOTIC;EOF INTENT TO ARBITRATE WITHIN THE TIME SPECIFIED
A;li.OVE SHALLBJ< DEEMED A WAIVER,.OFTIIEAGGRIEVED PARTY'S RIGHT TO COMPEL ARBITRATION
OF SUCH CLAIM. TilE ISSUE OF WATVER PURSUANT TO THIS AGREEMENT IS AN ARBITRABLE
DISPUTE. .
Page 4 Of6
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(q)
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ACTIVE l'ARTICIPATION IN PENDING LmGATION DURING THE 360 DAY NOTICE PERIOD, WHETHER
AS PLAINTIFF OR DEFENDANT, IS NOT A WAIVER OF THE RIGHT TO COMPEL ARBITRATION. ALL
DISCOVERY. OBTAINED IN THE PENDING LITIGATION. MAY BE USED IN ANY SUBSEQUENT
ARBITRATION PROCEEDING. .
THE PARTIES FURTHER AGREE THAT (i) NO ARBITRATION PROCEEDING HEREUNDER SHALL BE
CERTIFIED AS A CLASS ACTION OR PROCEED ASA CLASS ACTION, OR ON A BASIS INVOLVING cLAIMS
BROUGHT IN A PURPORTED REPRESENTATIVE CAPACITY ON BEHALF OF THE GENERAL PUBLIC,
OTHER CUSTOMERS OR POTENTIAL CUSTOMERS OR PERSONS SIMILARLY SITUATED AND (ii) NO
ARBITRATION PROCEEDING HEREUNDER Sl!ALLBE CONSOLIDATED WITH, OR JOINED IN ANY WAY
WITH,ANYOTBERARBITRATIONPROCEEDING.
ANY ARBITRATOR SELECTED SHALL BE KNOWLEDGEABLE IN THE SUBJECT MATTER OF THE
DISPUTE. EACH OF THE PARTIES SHALL PAY AN EQUAL S!IARE OF THE .ARBITRATION COS.TS, FEES,
EXPENSES, AND OF THE ARBITRATORS' FEES, COSTS AND EXPENSES.
ALL STATUTES OF LIMITATIONS WHICH WOULD OTHERWISE BE APPLICABLE SHALL APPLY TO ANY
AND ALL CLAIMS ASSERTED IN ANY ARBITRATION PROCEEDING HEREUNDER AND THE
COMMENCEMENT OF ANY ARBITRATION PROCEEDING TOLLs SUCH STATUTES OF LIMITATIONS,
IN ANY ARBITRATION PROCEEDING SUBJECT TO TIDS PROVISION, THE ARBITRATORS, OR MAJORITY
OF THEM, .ARE SPECIFICALLY EMPOWERED TO DECIDE (BY DOCUMENTS ONLY, OR WITH A HEARING,
AT THE ARBITRATORS' SOLE DISCRETION) PRE-HEARIIiG MOTIONS WHICH ARE SUBSTANTIALLY.
SIMILAR TO PRE-HEARING MOTIONS TO DISMISS AND MOTIONS FOR SUMMARY ADJUDICATION.
TillS ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION; AMENDMENT, OR EXPIRATION
OF THE AGREEMENT IN WHICH TillS PROVISION IS CONTAINED, UNLESS ALL OF THE PARTIES
OTHERWISE EXPRESSLY AGREE IN WRITING, . .
THE PARTIES ACKNOWLEDGE THAT TillS AGREEMENT EVIDENCES A TRANSACTION INVOLVING
INTERSTATE COMMERCE. TIIE FEDERAL ARBITRATION ACT SHALL. GOVERN THE INTERPRETATION,
THE ARBITRATORS, ORA MAJORITY OF THEM, Sii:ALLAWARD ATTORNEY'S FEES AND COSTS TO TIIE
PREVAILJNGPARTYPURSUANTTOTHETERMSOFTHISAGREEMENT. '
NEITHER THE PARTIES NOR 'THE ARBITRATORS MAY DISCLOSE THE EXISTENCE, cONTENT,. OR
RESULTS OF ANY ARBITRATION HEREUNDER WITHOUT-PRIOR WRITTEN CONSENT OF ALL PARTIES
AND/OR COURT ORDER.
(s) VENUE OF ANY ARBITRATION PROCEEDING HEREUNDER SHALL BE IN BEXAR COUNTY, TE}(AS,
THE TERM LENDER INCLUDES ANY OTHER OWNER AND HOLDER OF THIS NOTE AND THEIR RESPECTIVE
SUCCESSORS AND ASSIGNS. THIS NOTE !S GOVERNED BY APPUCABLE TEXAS LAW, EXCEPT TO THE EXTENT THE
USURYLAWSOFTEXASAREPRE-EMFTEDBYFEDERALLAW,INWIDCHCASE,SUCHFEDERALLAWSHALLAPPLY.
VENUE OF ALLACTIONS ON THIS NOTE, SHALL LIE IN BEXAR COUNTY, TEXAS, AND ALL OBLIGATIONS REQUIRED
HEREIN ARE PERFoRMABLE IN BEXAR COUNTY. TEXAS .
If loan proceeds are to be used primarily for personal, or household use, the follqwing notice shall apply:
NOTICE TO CONSUMERS: UNDER TEXAS LAW IF YOU CONSENT TO THIS AGREEMENT YOU MAYBE SUBJECT TO A
FUTURE RATE AS IDGHAS 24% ANNUAL PERCENTAGE RATE, OR THE STATE USURY CEILING, WIDCHEVER IS LESS.
If this Note is to be secured by a lien on a dwelling located on the hereinafter described property, then th; following notice shall apply:
THE MAXIMUM INTEREST RATE SHALL NOT EXCEED TWENTY-FOUR PERCENT (24%) PER ANNUM, OR THE USURY
t:El!.ING, WIDCHEVER IS LESS.
Payment bereofis secured by a vendor's lien retained in Deed of even date herewith. to the Borrower, and is additionally secured by .a
. Deed of Trust, Security Agreement and Statement of even date herewith., executed by the Borrower and/or Grantors thereof to
STEVE E. EDLUND , Trustee, upo:p. the following described real property:
THAT CERTAIN REAL PROPERTY LOCATED IN BEXAR COUNTY, TEXAS BEING MORE PARTICULARLY
DESCRIBED ON EXHIBIT
11
A
11
ATTACHED HERETO AND INCORPORATED HEREIN.
Page 5 of6
NO.ORALAGRQMENTS
TillS WRITTEN AGREEMENT REPRESENTS THE FJNALAGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT OF
THE PARTIES.
THERE ARE NO WRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
ATLED, LTD.,.
a Texas partnership
By:'Delta produce Marketing, Inc.,
. "Borrower" ' a. Texas corroration, ''Bcilrower"
General Pat net
By: By:
Typed Name:. WALTER .SCOTT JENSEN Typ.edN.ame:
Title:
Address:
"Bo:qc:twer''
By:
'!Yped Name:
Title:
Address:
PRESIDENT
\
\
\
Title:
Address
. "Borrower"
By:
Typed Name:
Title:
Address
Page 6 of6
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Number of
Payments
(a) Fifty-nine (59)
(b) One (1)
. ---
ADDENDUM TO REAL ESTATE LIEN NOTE
Frequency
Monthly
Amount of
Payments
Principal including
interest in the
amount of Eleven
Thousand Eight
Hundred Sixty-
seven and 22/100
Dollars
($11,867.22) each.
All outstanding
principal and all
accrued, unpaid
interest thereon
shall be due and
payable.
Final Maturity Date: DECEMBER 5,2010
When Payments
are Due
Commencing
January 5, 2006,
and continuin,g
monthly on the
fifth (5") day of
each successive
calendar month
until and including
November 5, 2010.
6n Final Maturity
Date.
This credit facility was evaluated, analyzed and ultimately priced based upon the entire
relationship between Borrower and Lender. Therefore, if there is (i) a negative change in the
deppsit and/or other banking relationships between Borrower and Lender, or (ii) a material change in the
fmancial condition, ownership, management and/or control of the Borrower, which Lender reasonably
believes increases the risk of repayment, then Lender, in its sole and absolute discretion, may increase the
interest rate charged in connection with this credit facility by up to 1.00 %; as it may.-noat from time from
time (i.e. interest rate will increase to 1.25% above the NeW York Prime Rate). .
Executed this __1_ day of December, 2005.
BORROWER:
Atled, Ltd., a Texas limited partnership
BALLOON RIDER
THIS LOAN IS PAY ABLE IN FULL ON DECEMBER 5, 2010. YOU MUST REPAY THE
ENTIRE PRINCIPAL BALANCE OF THE LOAN AND UNPAID INTEREST THEN DUE.
THE BANK IS UNDER NO OBLIGATION TO REFINANCE THE LOAN. YOU WOULD,
THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS YOU
MAY OWN, OR YOU WOULD HAVE TO FIND A LENDER; WHICH MAY BE THE
BANK YOU HAVE THIS LOAN WITH AT MATURITY. YOU MAY HAVE TO PAY
SOMEORALL THECLOSINGCOSTSNORMALLY ASSOCIATEDWITHANEWLOAN
EVEN IF YOU OBTAIN REFINANCING FROM THE SAME BANK.
EXECUTED this!}_ day ofDecember,
BORROWER:
By: Delta Produce Marketin 7nc.,
a Texas..coYp ration G Ut!ral Partner
/ . '/
By
J:\I\rBC SA- r.td. - 651\balloon rider.wpd
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EXHIBIT "A"
TRACT 1:
being Lot 4, Lot 5, Lot 6, Lot 7, Block 39, NCB3698, Edgewood Addition,
Texas, and a portion o'f Lot 53, Block 39, NCB. 3698, Las Vi lias De Merida as
'BEGlNNJ'NG, at a found 1/2 inCh iron rod on the southerlY i-ight of way 1 ine of
.Merida:.Street, for the northeasterly corner of sa-id Lot 53, Block 39
1
same
the .northwesterly corner of said Lot 4;
THENCE; S 84" 25" L along the southerly right of way line of Merida
Street, .a distance of 706.56 feet to a found 1/2 inch iron rod on the
northwesterly right of way II ine of The Union Pacific Rai I road;
THENCE, Southwesterly, along the arc of a curve to the.left having a radius
of 2865.00 feet, a central angle of 14" 22' 30", an arc length of 718.80 feet
and a chord bearing: S 43 18' 41" W, 716.91 feet, to a found 1/2 inch iron
rod;
THENCE, S 36" 02' 54" lJII, continuing along the northwesterly right of way I ine
of The Union Pacific Railraod, a distance of 183.64. feet to a set 1/2 inch
iron rod on the northerly right of way line of Ceralvo Street for the
THENCE
1
. N 84 .10' 44" W, along the northerly right of way line of.Ceralvo
a distance of 35.88 feet to a set 1/2 inch iron rod;
THENCE, crossing said Lot 53, Block 39, the following courses;
N 05" 34' 47" E, a distance of90.14 feet to a set 1/2 inch iron rod;
s 83" 48' 09" E, a distance of10.75 feet. to a se-t 112 inch iron rod;
N 06" 11' 51 II E, a distance or 21.99 'feet to a set 1/2 inch iron rod;
N 83" 48' 09" w. a distance of 13.64 feet to a set 1/2 inch iron rod;
N 06" 11 ' 51" E, a distance of 230.44 feet to a set 1/2 inch iron rod;
N 83" 48' 09" w, a distance of 23.07 'feet. to a se't 112 inch iron rod;
N 06" 11' 51" E, a distance of' 18.94 "feet to a set 1/2 inch iron rod on the northerly
line' of said Lot 53, Block 39;
THENCE, N 84" 25' 13" W, along the northerly I ine of said Lot 53, Block 39, a distance
of 120.01 feet L.o a found 112 inch iron rod for an interior angle comer of said Lot
THENCE, N 06" 14' 30" E, along the easterly.[ ine of said Lot 53, Block 39, a distance
of 363.95 'feet to the POINT OF BEGINNING of herein described tract, and containing
5.779 acres of land, more or less,
TRACT 2: .
2.069 acr.es of land situated in the City of San Antonio, Bexar County, Texas, being
NCB 3699, Edgewood Addition, as recorded in Volume 1625, Page 317, Deed and
Records of Bexar County, Texas, and all of Lot 18, Block 40, NCB 3699, H.A. Stauffer &
H. G. Deviney Subdivision as recorded in Volume 3975, Page 223, Deed and Plat Records
BEGINNING, at a 1/2 inch iron rod set on the northerly right of way l lne of Merida
Street, said 1/2 inch iron rod being N 84 22' 25" W, 8.31 feet from the southeast
THENCE, N 06 14' 53" E, crossing said Lots 57 through 65, Block 40, along the westerly
I ine of that certain tract of land conveyed to West Coast Produce Company, Inc, as
recordeO in 7133, Page 968, Official Public Records o'f Bexar County, Texas, a.
distance of 364.13 feet to a 1/2 inch iron rod set;
THENCE, S 84" 21' 53" E, along the northerly line of said Lot 57, at a distance of
8.31 feet passing the northeast corner of lot 57, same the northwest corner of
Lot 17, at a distance of 127.92 feet passing the northeast corner of Lot 17, same
being the northwest corner of said Lot 18, in alI a total distance of 247.52 feet to a
1/2 inch iron rod set for the northeast corner of said Lot 18, same being the
northwest .corner of Lot 19;
THENCE, S 06 14' 53" W, .along the common boundary line between Lot 18 and Lot 19, a
distance of 364.09 fee-r. "to a 1/2 inch iron rod set on the northerly right of way l.ine
corner of Lot 19;
THENCE, N 84 22' 25" W, along the northerly right of way I ine of Merida Street, at a
of 119.60 feet passing the southwest corner of Lot 18, same being the
southeast corner of Lot 17, at a distance of 239.21 feet passing the soUthwest corner
247.52 feet to the POINT OF BEGINNING of described tract, and containing 2.069
acres of [and, more or less.
TRACT 3:
Lot 17, Block 3, New City Block A36, Gillis Hood, Unit 2, an addition to the City of
San Antonio, Bexar County, Texas according to the map or plat thereof, recorded in,
Volume 9512, Page 91, Deed and Plat Records of Bexar County, Texas, SAVE AND EXCEPT
that portion conveyed to the City of San Antonio in Volume 5202, Page 1204, Official
Public Records of Real of Bexar County, Texas.
TRACT 4:
Condominium Unit 104, Building A, New City Block 16957, Post Oak Condominiums, in the
Cjty of San Antonio, Bexar County, Texas, according to Condominium Declaration
iecorded in Volume 8, Page 159, and Volume 8, Page 189, Condominium Records Bexar
County, Texas, together with an undivided 4.52904519 percent interest in the common
elements.
E:lta ,ON AND/OR-MODtF:!CArtONAGRtEMENT
COMMERCI:A'L INDEBWNESS
Date: A ril f5,20tl
Account No:
Borrower : Atled LTD
the 'J.ate cham( rna y be accessed without notice, and shall be
immediately an(t
.EaCh piyment shall be applied aJ:: of its scheduled due date and
tn the Grdec of application as. the Lender in .its sole discretion
maY from time to time. elect
Th"e fi!il.Pre of'Bori'ower to pay any. of the payment{ s) of prln"cipa:l
or any. futetesl Or accrUed lilte charges, when the_ :wne is
due Shall petniit at its option; to accelm-rtte the
maturity, witliout notice t6 B()ITO'Y{et';of all, or any: portiOn, of the
outStanding unpaid principal balal).ce and all Mcrued ai}d unpaid
interest,., and all accmeif and :unpaid late charges under the Note 1
tliis: Agreement; wfiereupon the same shall be due and payable
"inlmediately.
A?Y Oiitstaildin_g and I?ifuclpa.!,.i'r.cerued aitduttpaid interest
all 311. fees,- late .charges: !illdfOr other chai-ws inciJ:n.'ed. iii" this
transactiOn by, orfor tfie benefit of, Borrower; If aliy, whicb remain
dlle.lui.d owing on the Final Maturity Date are due ana _payable on
such.datC
lligeffier with anY and all .unpaiC and/or.
tate chargeS.
The starting tate ofiilterest Will be _4-.75.
b"e:innin$"on
.. %- Bon:ower tt<news 1!lld. extends the- an!i and all Se4ur;ity.
-A'greemts, secu.rity lliterests, Deeds or 'ritist.. and/or ot:lii:r-liens
NYPFH
Final Maturity Date; . Julyl,ZOU
Borrower promises to pay to the order of tntemationil Bimk of
the Outstan<ling .Principal .. Balance. on the. Note
according to the terms herepf togetb.erwith "interest" as it on
the outstanp:ing Unpai? prinPpal ba1.ance Untii paid. In -nq event
$halt the tate of interest tO 00 paid on th"e lll;lpRid principal
bal(l._nce ?eIess than four and three quarters l'ercet!t (4.7$"/o)
per annum, nor more than the maxllnqrn legal nuo. 811\nved by
law..
To the extent.aliewed by Iaw;-as payment char,ge uni;leitlie
Note/this Agn;eril.ent, in its" sole discfuliOn (il ili.ci"eiise
t1ie furerest on the pri:ndpal portfou o'f any pilymeb.t anioutit that 1s
-not receied by." the piiytnep.t dli"e date onti1.pa1d to tlie m:W:mum
rate allqwed by law, CplilpUted i>n a full calendar" year basis from
the payment duedate until paid,. (ii}shollld payment.tre more
tlum _ten late, Borro.wenhaR:pay. a one;...thne "late'cltarge"
per late payment equal fu five percent (5%) of the amount of-the
past due "interest of such payment,_ with. a minimunl of
$10.00 .ari.&a lnaximum pet: late-payment.
:SoHOWet
Atl<d,Lto,
Address

-create4 by- Borrower m favOr o{iptem"atiotial $imk of COmmerce.
EXcePt .as provided-he:reill,. hn Other tCmls and of -the
.NOte. and. ali Security Agreements, security interests,. Deeds of
Ttmrts, and/or other liens created:by Deeds -of. Trusts and/Or other
LOan Doeuments, if any, C(fntinue as written, and reil13in in full
force' ltlld effect.
TO 'l'HE EXTENT ALLOWED BY LAW; ALL MATURED
ONPAiri AMOUNTS WILL BEAR INTEREST AT THE
MM;:Th.WM LE-CML INTE&ES1' RA'FE ALLQWED BY
APPLlCABLE LAW. If applicable law does not ma:rimrun
rate of interes:t for matu.red unpajd amountS,
. tliat the such amOUnts llhldL be eighteen peycent
(l8<y..J.per
N"O bRAL
riiis WRtrtEN wAN AGR,E.EMENT"JlE.PREStNTs THE
.FINAL AG_J,mEMENT THE PARTIES AND
l'M-y NO'f" BE CONTRADictED BY" EVIDENCE OF.
PRIOR:, CdNTEMPOiiANEOUS. OR SUBSEQ{;lENT oRAL
OF THE .P.ARTJES. 'l!H:ER,E ARE NO
UNWRITTEN OJ.tAL AGI.tEEMENTS BETWEEN :x"IIE.

BorrOWer
Address
San" Antonio, Texas 78207

Naine:. BruOO . .M<:Miltari .
Title> Vice PreSident
Trust - Alted Ltd. 12.09.2005 Pg 1 of 16
'---- _._._. __
. 11s2s Page 302 15pgs b 20050290682
NOTICJ!; OF CONFIDENTIAL1TY Rlc'HTS: JF YOU ARE A NATURAL Pb(SON, YOU MAY
Rli:MOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT
BEFORE. IT IS FILED FOR RECORD IN THE PUBUC RECORDS: YOUR SOCIAL SECURITY
NUMBER OR YOUR DRIVER'S -LICENSE NUMBER.
THE STATE OF TEXAS
COUNTY OF BEAU
DEED OF TRUST, ASSIGNMENT OF RENTS,
AGREEMENT AND FINANCiNG STATEMENT
KN_OW All MEN BY THESE PRESENTS:
TIIAT L WE, or EITHER OF US
ATI ED 1 TD a texas J jm1 red partnership of the
CoUnty of BEXAR Slate of mAS , SDII)etimes hereinafter called Gmntors
(whether on"e or mono) for the purposes. of w;uriog the indebtedness hereinafter described, and in consideration of the sum ofTEN
DOLLARS (S I 0.00) to u.s in hand paid by the TnlS!ee hereinafter named, the receipt and sufficiency of which .is hereby acknowledged,
and for the further consideration oftbc uses, purposes and the trusts hereinafter set forth, have GRANTED, SOLD,AND CONVEYED,
and by tllese presents do GRANT, SELL and CONVEY unto STEVE E. EDUJND Trustee, of
International Bank of Commerce, 130 E. T.tavis, San Antonio, County, Texas 78205 lllld his substitutes or succcssoxs, all of tile
following descn'bed property situated in BEXAR County, Texas (hereinafter the "Property"). to-wil:
THAT, CERTAIN REAL PROPERTY LOCATED IN llEXAR COUN'f.Y, TEXAS BEtNG MORE PARTICULARLY
DESCRIBED ON EXHIBIT "A" ATTACHED HERETO AND INCORPORATED REREIN.
TO HAVE AND TO HOLD the above descnOed Property, together with the rigllts. privileges and appurtcnnnces thereto
unto the said Trustee, und to his substitutes or succcs3ors forever and Grantors_do.liercby bind tllemse\ves, their heirs,
lstrators' and assigns to warrant and forever defend the said pre.mises unto the s;Ud Trustee, his substitutes or su_cceggors and assigns for
ever, ugaiust the claim or claims, of all persons claiming or to claim the same any pan thereof.
This conveyance, however, is made in TRlJST to secure o(one Real Estate Lie1.1 Note/Promissory Note dated __ . __
f eve a - in the principal sum of One Mi11ion Three Blmdred Thmsand
and No/100 DOLLARS{$ l 100.000 OQ ) (the "Note"), executed by the makern of said Note
ATIED LTD . a Texas limited partnerahin
who with the above WII!lcd GrnniOr.;, shall hcreillaftcr collec:tivcly WlCI!nterchangcably be referred tO a:s
GraniOrs, payable to the order of
nri:ERNA.TIONAI "BANK OF CQMMERCE
SAN ANTmuo J!EAAR County.
Texas and payable as therein providro, including late clwges; bearing interest therein stipulated, providing for ofmatU
rjty nnd reasonable and necessary fees; .
ShouidGrantors do and all of the covenants lllld agreeme:pts hl:rein contained, lllld Ifltllai payment of said indebtedness as the
same shall becnmc due and payable, then this conveyance llhall become null illld void and of no further fon:4 and effect, and sbaU be
released at the u:pense of Granton;, by the holder thereof, hereinafter Beneficiary {Whether one or more}.
Gran tom covENANT and AGREE as follows:-
Thiit they are \awfully &eized of said fee simplc.abso!ute, and have the right. to convey same; !hat said:Propmy is
from all liens and encumbrances, except as her<=in provided.
Pasc I of\3 DOT-lllll)- !BC9004
ts-
: . .
Doc#-20050290682
# Pages 15
12/13/2005 14:43:11 PM
e-Filed & e-Recorded in the
Cff_icial Pul:::IJ.ic Records of
BEXAI\ COUNTY .
Fees 68.00
STA'I'E OF 'I'ElCAS
COUll'I'l OF BEXAR
'I'his is to Certify that thia document
was e-FILED and e-RECORDED in the
Public Records of B=ar County,
on this !iate and time stamped thereon.
12/13/2005 1414:3111 PM
COUE'I'Y CLERK, BEXAR COU!I'I''r 'l'EXAS
: . .
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.CHICA$0 TITLE GF#cXW51/29ojTf2-
NOTIGE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU. MAY
REMOVE .OR STRJ:KE ANY OF THE FOLLOWING INFORMATION FROM TillS INSTRUMENT
BEFORE IT JS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURiTY
NUMBER OR YOUR DRIVER'S LICENSE NUMBER.
THE STATE OF TEXAS .
COUNTY OF BEXAR
DEED OF ASSIGNMENT OF
SECURITY AND FINANCING STATEMENT

KNOW ALL MEN BY THESE PRESENTS:
BCANNeo
DI1! I U105
THAT I, WE, or
ATLED T.TD a Texas Jjmited partnership of the
County of BEXAR , . State of TEXAS , sometimes hereinafter called Grantors
or Inore) for the purpOses of securing the indebtedness hereinafter described, and in conSideration surp. ofTEN
DOLLARS ($1 o.bO) to us in halld paid by the Trustee hereinafter named, the receipt and sufficiency of.which is hereby acknowledged,
artd for the .further consideration ofti).e uses, puq:iOses and the trusts hereinafter set forth,.have GRANTED, SOLD, ANP CONVEYED,
and by these presents. do GRANT, SELL and CONVEY unto STEVE E EDLUND . Trustee, of
Inteffiational Bank of CommerCe, 130 E. Travis, San Anto:itio, :Bexar Coi.mty, Texas 78205 and his substitutes or successors, ali of the
following described property situated in BEXAR County, Texas (hereinafter the ''Property"), to-wit:
THAT CERTAIN REAL PROPERTY LOCATED IN BEXAR COUNTY, TEXAS BEING MORE PARTICuLARLY
DESCRIBED ON EXHIBIT "A" ATTACHED HERETO AND INCORPORATED HEREIN.
TO HAVE AND TO HOLD the above described Property, together with the rights, privileges and appurtenances thereto belonging
unto the said Trustee, and to his substitutes or successors forever and Grantors do hereby bind themselves, their heirs, executors, admfn-
istrators and assigns to warrant and forever defend the said premises unto the said Trustee, his substitutes or and assigns for-
ever, against the claim or elaims, of all persons Claiming or to claim the same any part thereof.
This conveyance, however, is made in TRUST to secure payment of one Real Estate Lieu Note/Promissory Note dated
of even date , in the principal sum of Qne Mi11jan Three HJmdred Tbousan
and No/1 00 D_QLLARS ($ 1. 300.000.06 ) ''Note"), executed by the makers of said
ATLED. LTD . a Texas limjted partnership
.,-------who together with the above named Grantors, shall hereinafter collectively and interchangeably be referred to as
Grantors, payable to the order of====-----------------------------
=---.,-, hereinafter referred to Beneficiary, in the City of SAN ANTONIO BEXAR County,
Texas and 11ayable as therein piovided, including late charges; bearing interest as therein stipulated, providing for acceleration of matu-
rity and foi reasonable and necessary attorney's fees;
ShOuld do and perfoni). all of the covenants and a,weem(!nts herein contained, and make payment of said indebtedness as the
same shall become due and payable, then this conveyance shall become null and vo!d and of no further force and effect, and shall be
released at the expense of Grantors, by the holder thereof, called Beneficiary (whether one more).
That they. are lawfully seized of said Property, in fee simple. absolute, and have right to convey the same; that said Property is free '
from allliC:ns and except as herefu
Page I o13 .DOT-12/03 -1BC9004
. To protect the title and possession of 'roperty and to pay when due all taxes and as ments now existing or hereafte.r levied or
. assessed ppoD said Property, or the interCst therein creat.ed by this Deed Of Trust, and and the liyn hereby creat-
ed as a fi,rst and p'rior l.ien on said Property. including any hereafter made a part of the realty.
To keep the improvements on said Property in good repair and cOI).dition, and not to permit or commit any -n:aste thereof; to keep said
buildings occupied so as not to impair the insurance carried thereon.
To insure and keep all improvements .P.OW or created upon saiq Property against damage by ftte and wind-
storm, alld any other hazard or hazards. as may be reas.onably required from time to time by Beneficiary guring the term of indebt-
edness hereby secured, to the extent of the total amount' of the indebtedness hereby secured, OJ;' to the extent of the full in&urable value
of said improvements, whichever is the'lesser, in sUch form and with' such company or companies as may be .approved by
Beneficiary, and to deliver to Beneficiary tlf.e policies of such insurance ha'!ing attached to said policies such mort9age indemnity
'clause as Beneficiary shall direct; to deliver renewnfs of any such policies to Beq_eficiary at least ten (1'0) days before any such insur-
ance policies shall expire; any wblch Beneficiary may under policy or Policies, may be applied b:Y Beneficiary,
at itS option, to n;duce the indebtedness hereby secured, whether. then matured pr lo mature hi the future, and in such manner as
Beneficiary ma:y elect,. or Beneficiary may pennit Gnmtors t9 use said to repair or repla9e all improvements damaged or
destroyed fmd covered by said policy.
Beneficiary may employ c?unsel for advice or other legal service at Beneficiliry's discretion in connectiop. with any .dispute as to
the debt hereby. secuied or lien securing same or this .instrument, or any litigatio:q or arbitration proceeding to which .the Beneficiary
may be made a party on account of this.lien or which may affect the title to the on of this lien or which may affect
the title to the Property securing the indebtedness hereby secured or whit:h may affect said debt or lien. Any reasonable and necessary
fees so incurred shall be added and be part of the debt hereby secUred .
. In addition to the land and improvements above described, the lien of this Deed. Of Trust covers.and all abstracts and title
' papers furnished or to be furnished in connection with th6 making of the loan by said Note, the payment of which is secured
hereby.'
Grantors agree to pay on demand for all ?-bstracts, title. policies, appraisals, recording and fees in connection
with either the clQsing of the loan secured hei'eby or the renewal, extensit?n. modification and/or rearrangement of any part of the
indebtedness secured hereby, or, in th.e such amounts expended by Beneficiary shall be added to and be a part of the debt
hereby secured ..
That in the event Grantors shall fail to keep the improvements on the Property conveyed in good repair and condition, or to pil.y
. promptly when due all taxell and assessments, as afOresaid, or to the prior lien of this Deed Of Trust on said or to
keep the and improvements insured, as aforesaid, or to deliver the policy; or pqlicie's, of or the renewal
Beneficiary, as aforesaid, then Beneficiary niay, at his option, but without being required to i!o so, make such repairs, pay such taxes
and assesSments, any tax title thereOn, remove any prior liens, and prosecute or defend any suits in relation to the preserva-
tion of the prior liet;i of this Deed Of Trust on said Property, or insure and keep insured the improvements thereon in any. amount not
to exceed that above stipulated; that any sums which' may be so paid out by including the costs, ejl(penses and attorney's
fees paid in any suit affecting said Property when necessary to protept the lien of and all other expenses and 9.osts to paid
by Grantors' under the Deed Of Trust which are not paid when due shall biar interest from the dates of such payments at the prematu-
rity intere&t rate stated in tl,le Note .hereby seCured, ?Jld shall be deemed a part of the debt hereby secured recoverab1e as such in
all respects. In addition, in the event Grap.tors Shall fail to keep the buildings and insured, as aforesaid, or to d.eliver the
poiicy or policies, of insurance or the theryof to the Beneficiary, as the Beneciary may, at his option, but without
being required to do so, insure and keep insured the improvements .thereon in any amount not to exceed that above stipulated (includ-
. ing Without linritation, to the extent allowed by law, the purchase of Single Interest Insurance which may provide coverage only for
Beneficiary); that all swns paid for insurance premiums by Beneficiary, as aforesaid, shall bear interest frotn the dates of such pay-
ments at the prematurity interest rate contracted for in the Note hereby secured, ;md shall be p;Ud by Grantors to Benefici;uy upon
demand, at the Same place at wblch the above-descrlbed Note is payable, and be deemed a part of the debt hereby securQd and
as such in all respects.
Granton; agree annually to f\lrnish Beneficiary Validated repeip'ts payment of all assessed against, and :ins\Jr..
.ance coveri:D.g, the said Property. Such tax receipts shall.be fumisheP, on or beforf1'fifteen (15) 'days prior to the date .suqh taxes become
delinquent insurance receipt shall be furnished on or before tell (1 0) to the date the Current coverage expires.
If Grantors should fail to furnish such receipts, Benefic;ruy may require Grantors.fo .deposit n;ionthly with Beneficiary op. the payxp.ent
d:ites in i;he Not.e hereby secured 'in to the monthly payment of principal apd intet;est provided in the. Note hereby
secured a sum equal to 1/12 of the estimated annual taxes and insurance premiumS covering such Prope.rty, estimates to be made
by Beneficiati shall hold such deposits, without bond and without of interest to pay taxes and insurance
prQiniums as they become due, until the secured hereby is fully pai4 and the to Grantors.
Subject law and nofl.0-thstanding the paragraph, at and in its sole Beneficiazy
. may require Grantors to pay _Betiefielary on the day monthly payments are due under the Note, until the Note is paid in full, a sum
("Funds") for (a) yearly taxes and assessments wblch rimy attain priority Over of this Deed Of Trust as a lien on the Property;
. (b) yearly leasehold payments or ground rents on fue Property, if any; (c) yearly hazard or property insurance premiu.ms; (d) yearly
flood insurance premiums, if any; (e) yearly mortgage insurance premiums,. if ?D)!; and' (f) R!lY payable by Grantors to
in accordance with the preceding paragraph, iD_ lieu of the payment of mortgage insurance premiums. These items are
called "EScrow Items". Beneficiary may; at any. time, collect and bold Funds in an amount not to exceed the maximum amount a lender
for a federally related mOrtgage loan may require for Grantor's escrow ac,count under the Federal Real Estate Procedures
Act of 1974 as amended from to.tinie, 12 U.S.C .. Section 2601, et seq. unless another lavy that applies to t}le Funds
sets a lesser amount. If so, Beneficiary may, at any time, collecf and hold Funds in any amount not to exceed lesser
Beneficiary may estimate the amount of Funds due on the basis of current data and reasonable of expenditures of future
.Escrow Items or othernrise in accOrdance With law .
. . The Fuil.ds shall be held in an :institution. whose deposits are by a agency,. instrumentality, or entity (in.cluding
Beneficiary, if Beneficiary is such an institution) or in any Federal Home Loan B8.;nk. Ben.eficiazy shall !J.pply #le Funds to pay the
E.sproW Items. Beneficiary may not' charge Grimto:rs for holding Funds, ann].lally the escrow account, or
Paged ofl3
IBC9004
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vetifying the Escrow Item;, unless :Beneficiary pays Borrower interest on the Funds and apph ... dble law permits Beneficiary to make
a charge. However, Beneficia[y may require Qrantors !O pay a one-time charge for an independent real estate tax reporting serv-
ICe used by Beneficiary ip. with this loan, unless applicable law provides otherwise. Unless agreement is made or applica-
ble law requifes interest iO he paid, Beneficiary shall not be required to pay Grantors any interest or earnings on the Funds, Grantors
and Beneficiary may agree in writing, however, that interest shall be paid on the Funds. If required by law, Beneficiary shall give to
Grantoq;, without charge, an annual accounting of the Funds, showing credits ana debits to the Funds and the purpose for which each
debit to _the Funds was mf!de. The Funds are pledged as additional security for all sums secured by this Deed Of Trqst.
If the Funds held by Beneficiary the amoUnts permitted to be held by applicable law, Benefi.ciary shall account to Gffintors for
the excess Funds in accordance with the requil:ements of applicable law. If the amount of thci- Funds held by Beneficiary at anY time
not sufficient to _pay the Escrow Items when drie, Beneficiary may so notify Grantors in writing, and, in sucP. case Grantors shall pay
to Berieficiary the amount necessarY to".make up the deficiency. Grantors shall make up the deficiency in no more than twelve (12)
monthly payments, at Beneficiary's sole discretion.
Upon payment in full of sulns by Of Trust, shall promPtly refund .to Grantors held
Be"neficiary, If, Under foreclO&Ure proceedings, shall acquire or the Property, Beneficiary upon the acquisition or sale
the Property, shall apply any Funds held by Beneficiary at the _time of the acquisition or sale as a credit against the sums secured by
"this DeeQ Of Trust.
GraD.tors shall_ nOt impose, orpennit to be imposed, any restrictive covenants upOn the Property herein described or execute or file, or
pennit to be fifed, any subdivisipn plat or condomin.1um or other instrument affecting said.Property without the prior
ten consent of Beneficiary,
All agreements between any the parties hereto beTeby limited by these which sha1I override all such
ments, whether now existing or thereafter ariSing. If froqt a construc"!:iQn of aQy document related to 3ny transaction between
Bank, Graritors and/or anY other person Or eritity executing this. Deed Of Trust, any term(s) or provision(s) of anydCicument is
in conflict with applicable laW, such document be automatically"reforin.ed and modified as to comply witli applicable law,
without the p.ecessity of exeCutlo1;1 of any amendment or new
That in the event of default in the payment of anY or interest, or Of a late charge, of the Note hereby secured, or
in the Payment, when due, of any other indebtedness secured hereby, in accordance .with the ternls thereof, or of a breach of any of the
covenants herein contained be performed by Grantors then and in any of such events Beneficiary shall, at Bep.eficiary's "option,
GRANTORS HEREBY EXPRESSLY WANE NOTICES OF NON-PAYMENT, PRESENTMENT FOR PAYMENT, PRESENTA-
TIONS/DEMANDS FOR PAYMENT, NOTICES OF INTENTION TO ACCELERATE MATURJTY, NOTICES OF ACTUAL
ACCELERATION OF MATURITY, PROTESTS, AND NOTICES OF PROTEST, accelerate the maturity of the Note(s) hereby
secured and the entire outstanding and unpaid principal indebtedne;ss hereby Secured together with all accrued and unpaid interest
thereon, all aCcrued and unpaid late charges, fees Other StunS -shall thereby immed_iateJy due and paya;ble, and in the event
of default in the payment of S:@.id indebtedness when due. or declared due, it shall thereupon, or at any time thereafter, be the duty of
the Trustee, or or substitute as hereinaftei provided, at the iequest of Beneficiary (which request is heteby conclusively
presumed), to enforce $is trust; after advertising the time, place and terms of the sale of the above deScribed and conyeyed
Property, then subject to the Hen hereof, for at least tw"enty-one {21) days preceding the date of sale by posting written or printed
thereof at the County and by filing a copy of such q.otice in the office of the CoUnty Clerk of the county where said Property
is situated, which notice may be posted by the .Trustee acting, or by any person acting for him, and the Benefi9iary (the holder of the
secured herepy) has, at least (21) days preceding the date of sale, served written or printed notice of the pro-
posed sale by certified mail on each P,erson ami/Or entity(s) obligated to pay indebtedness sycured by this "need Of Trust according
to the records of Beneficiary by the depoSit of such notice, enclosed in a postpaid wrapper, properly addressed to such pef!!on(s) and! or
entity(s) at such and/or entity(s) most re.ce.nt address as shown by the records ofBeneficiary, in a post office or official
itory. under the care and custody of the Unlted States Postal Se;rvice, the Trustee shall sell the abovedescribed property, then subject to
the lien hereof, at public auction in aCcordance with such notice at t:Qe of said county Where sUch Property is situated (pro-
vided where said Property is situated in more ihan one county, the notice to be posted as ht?rein provided shall be posted at the.
Courthouse of each of such counties, and-filed with the County Clerk of each of such counties where said Property is situated, and said
above descnbed and conveyed Property may be sold at the Courthouse of any one of such counties, "and the notic.es So posted and filed
shall designate the county where the Property will be sold), on the frrst Tuesday in any month between the hours often o'clock A.M.
and four o'clock P.M., to the highest bidder forcash, selling of the Property as-an entirety or in such parcels as the Trustee acting
may elect and make due conveyance to the Purejlaser or Purchasers, with general warranty binding Grantors, ilieir heirs and assigns;
and of the money arising from such the acting :?hall pay first, all the expenses of advertising the sale and making the con-
veyance, reasonable commission. to hill).self; which commission shall be due and owing in addition to the attorney's fees
provided for in said Note, and then to Beneficiary the full amount of principal, interest, attorney's fees and late charges due and unpaid
on said Noj:e and all other indebtedness secured hereby, rendering the balance of the sales price, .jf any, to Grantors, their heirs or .
assigns; and the recit.als in the conveyance to the Purchaser or Purchasers shall be full and evidence of the truth of the
ters therein stated, and all to sa"id Sale shall be presumed to have been peifonned, and such sale l;lD.d Conveyance shall be
conchl!!ive against GTilD.tors, thel:r helrs and assiins.
. . .
Beneficiary may remedy any defauif,witho?t waiving same, or may any default without waiving any o-! default.
It is agreedj that in the event a foreclosure hereuilder should be commenced Oy the Trustee, or his substitute" or successor, Beneficiary
may at any time b:efore the sale of said Property direct the said to aban4on the sale, and may then institute sUit for the collec
tion of said and for tJ?.e Deed Of Trust lien; it "is fiuther agreed that if the )3eneficiary Should institute a suit for
the collection thereat: and for a foreclosure of this Deed Of Trust lien, that he may at any time before the entry of a final judgment iii.
said suit dismiss same and require the Trustee, his sub!!titute or Successor, to 'sell the Property in accordance with the provisions of this
Deed QfTrust:
Benefiqiary shall have the right to purchase at any s.ale o.fthe Property, being the highest bidder, and to have the amount for which such
Praperty is sold on the debt secured hereby. ..
. Benefici.ary, in any event, is hereby-authorized appoint a substitute trustee, or a :?UccessOr to act instead of the Trustee D.ru;ned
herein wij:hout other formality than the de"signation in writing of a sp.bstitu_te or successor trustee; and the authority hereby conferred
Page 3 ofl3 DOTl2103- IBC9004
sP,all extend to the appointment of other and until.:. " indebtedness hereby secured has been
paid in full, or until said Property is sold hereUnder, and each substitute and succesSor trustee shall Succeed to all the rights and pow-
ers of the origiD.a1 trustee named herein.
In the event any sale is made of the above des-cribed Property, or any .portion thereof, under the tenns of this Deed Of TruSt, Grantors,
their heirs a_nd assigns, shall forthwith upon making of such sale and deliver poSsession of" Property so sold to the
Purchaser at such sale, and in the event of their failure td do so they shall thereupon frOm and after the maJ9ng Of such sale be and con-
tinue as tenants at will of. such Purchaser, and in t!J,e event Of their .:allure to sUrrender posseSsion of said Property upon demand, the
Purchaser, his heirs or assjgns, shall be entitled to institute and maintain an actioll fot forcible detallier of said Property in the Justice
of the Peace Court in the Justit:e Precinct in which such Property, Or any p"art thereof, is situated.
Grantors agree that any resale by Beneficiary of the Property described in this Deed Of Trost after may be made for a Price
below the fair. market value (i.e. at wholesale) and that Beneficiary is not required to re-sell the PropertY for a price. eq.fial to or above
fair market value (i.e. retail). Grantors agree that the sales price obtained-by-Beneficiary at any such reSale will not be used in deter-
the fair market value of the Property for the purpoSes of determining under Section 51.003 Of the Texrul Property Code,
To the greatest extent permitted by law, Grantors hereby waive all rights and remedies under Section 51.003 of the Texas
Property Code including, without limitation, the right introduce; evidence of the amount of the sales price 6f the Property sold by
Beneficiary following any foreclosure Of the liens pui-suant to the terms of tlris Of Trust.
It is agreed that the lien hereby created shall t!lke precedence over -and be a pri'or.lien to anY either lien Of any character whether
dO!;s, or mechani(>'s lien hereafter created on the above desCribed Property; and in the event the proceeds of the indebt-
edness secured as set forth herein are used to pay off and satisfy any Hens heretofore existing .on said Property, then Beneficiary
is, and shall subrogated to all of the iights, liens and remedies of the holders of the in?-e:btedness so paid.
is further agreed that if Grantors, fueir heirs or assignS, While the owner of the described property, should. cOmmit an act
of bankruptcy, or aUthorize the filing of a voluntary petition in bankrup.tcy, or should all act of bankruptcy be committed and involun-
taiy proceedings instituted or threatened, or should the Property hereinabove described be takell over by 11 Receiver for Grantors, their
heirs of assigns, the Note hereinabove described may, at the option of Beneficiary, immediately become due a.D.d pa)rable, and the
ing Trustee may then proceed to sell same under the provisions of this Deed Of Trust.
Grantors hereby transfer and assign unto Beneficiary, to be applied on the debt secured hereby: (a) all eminent domain or condemna-
tion award moneys which may hereafter be awarded or paid for the condemnation of the hereinabove described Property, or any part
thereof or for any portion of the premises wliich may be appropriate for any public or quasi-public. use, ot by virtue o.f private sale in
lieu thereof and any sums which may be awarded or become payable to Grantors for damages caused by public Wprks or construction
on oi near the Propertyj (b) all the bonuses, rents, royalties, damages and delay moneys that may be due .or that may hereafter
due and payabte to the Grantors or their assigns under Bny oil, gas; mining or mineral lease Or leases of any kind now existing, or which
may hereafter come into existence (including and/or hunting of every kind) covering the. ab.ove-described
Property or any part thereof;, (c) proceeds from the sale of crops grown on the Property, as well as all pasturage and/Or grazing or
hunting fees. Grantors authorize and direct payment of such nioney to said Beneficiary until the secured hereby is paid. sUch
money may, at the option of the Beneficiary, be appFed ori the debt whetlier due or not. The Beneficiary Shall not be obligated, in any
manner to collect said moneys or any part thereof, shall be responsible only for amourits received b)r the Beneficiary .. Nothing
herein contained shall be construed as a waiver or 'prejudice to the priority .of this lien or the options hereunder in favor of said
Beneficiary.
It is agreed that an extension, or extensions, may be made as to the time of payment of all, or part. of the indebtedness secured here-
by, anO that any part of the above described Property may be ieleased frOm this lieu without altering or .affecting the priority of the lien
created by this Deed Of Trust in favor of any junior encumbrance, mortgagee Or purchaser, or any person acqUiring an interest in the
Property hereby conveyed, or any part thei-eof; it being the iD.tention of partieey hereto to preserve t-his lien On the P-roperty
described and all thereon, and that may be hereafter cons,tructed thereon, -first and or to any that lt!ay be
placed thereon, or that may be fixed, given or imposed by law thereon after the eXecution of this instrument notwithstanding aD.y such
extension of the time payment, or the release of a portion .of said Property this lien.
Jn the event any portion of the indebtedness hereinabove described Cannot be lawfully sepured by this Deed Of Trust lien on Said
Property, it is agreed that the first payments made on said iildebtedness shall be applied to discharge of that portion of said
edness.
Nothing contained herein or in the Note eVer entitle Beneficiary; UpOn the arising of any contingency to receive
or collect interest i_n exces.s of the highest rate allowed by the la'ws o.f the of Texas or to the extentFederal Law permits a
greater rate, then such greater rate, on the principal indebtedness"heteby or oD. any money obligation hereunder and
in no event shall Grantors be obligated to interest in excesS of rate.
If this Deed Of Trost is executed hy o:ply oneperson or by a corporation, the plural reference to Grantors shall be-held to :include the
singular ft!ld au of the covenants and agreements herein undertaken to be peifonp.ed by and the rights confei:red upon the respective
Grantors herein, shall be binding upon and inure to the benefit.of not Only said parties respectively but also tbeir reSpective heirs,
administrators, grantees, successors and assigns.
In the event that the hereinabove described Property is sold, conveyed, oi- ofuerwlse of without the prior written consent of
the Beneficiary, the maturity of the outstanding arid unpaid principal, all accrueO. and unpaid interest, all acciued and unpaid late
charges, and other fees and/or charges arising out of said Note or hereunder nlay, at the option of the ::S:eneficf:p:y, be accelerated and
the Beneficiary may immediately demand payment of the then outstanding 31\d unpaid prillcipal sum, t9gether with all accrued and
unpaid intereSt due thereon, and au accrued and unpaid late charges, .and _other fees and( or charges t!Ien due and owing.
In the event Grantors should seek a restraining order or an injunction or other" legal action, be it or to
prevent, hinder or delay the exercise by Beneficiary of its rights and remedies under this Deed Of Trust, including, without liin.itation,
its foreclosure rights, upon the occun'ence of as .default, as herein provided, then Grantors agree to pay and/or reimburse Beneficiary
for all costs and expenses, including its reasonable and necessary attorney's incurred by Beneficiiai"y in connection its
DOT-12/03- IBC9004
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de:fense, appearance and/or other action by respect thereto, such payh.vnt and/or reimbursement to be made
whether or. not Beneficiary is the party in any such injunction or temporary restraining order or legal or arbitration pro-
.. agree .tQ contact, iD: writing, Dennis E. Nixon, prior to the institution of any such legal or arbitratiqn proceedifigs so
a: to permit Bell:eficiary the opp"ortunit)r to appear and defend itSelf.
1t shall be an event of default under th.is Deed Of Trust should Grantors, or any of them or any guarantor, fail to timely deliver any and
all financial statements, income tax returns; inventory reports, cash flow information, accounts receivable reports, or any other busi-
ness, t_;ix or financial infonnatit?n reque1;ted by Beneficiary .
. Grantors hereby grant Beneficiary tM right to protest any and all ad valorem and special assessments made against the Property
covered by this Deed Of Trust: In that regard, Grantors shall deliver to Beneficiary a true and copy, when received, of all tax.
assessments, villuations, re-appraisals and other received. by Grantors from all tax authorities. Beneficiary shall have the right
to appear in all tax proceedings and file appeals concerning taxes affe_cting the PrQperty or any portion thereof.
GrantorS expressly represent that this Deed Of Trust and the N9te hereby secured are given for the following pu:rposf1, to-wit:
To REF.NANCE CERTAIN INDEBTEDNESS OF GRANTORS AND TO PROVIDE NEW FUND FOR FINISH OUT
EXPENSES.
To the extent allowed by law, this conveyance is also made in :trust to secure and enforce the payment of any and all other indebted-
ness. of Grantors to Bene:fil,":imy presently exi.sting or which.may in any manner or meanS hereafter bt: incurred or created by Grnntors,
which other or future indebtedness Grantors acknOWledge to be currently contemplated by Grantors and evidenced in any manner what- .
soever, includin_g withOut limitation:
A.
B.
c.
]).
.E.
F.
G.
H.
I.
any commercial loan or indebtedness;
any credit card or other consumer type of loan;
any indebtedness "(elating to checking or saVings accounts (overdrafts, fees, etc.);
any. expenses incurred in the p:rotection or of the collateral securing any of such liabilities, loans, and
obligation-s; .
any expenses incurred in the collection of any indebtedness (!.nd/or obligation of the Grantors to Lender whether aris-
ing qut of this agreement or otherwise; .. .
anY letters "of cre;dit and/or indebtedness arising out of, or advancecj. to pay, letters of credit transactions;
any indebtedness, boweVer.evidenCed, whether by promissory note, bookkeeping electronic transfer or by any
ofu.er manner or form;
any other indebtedness of Grantors to 8.!1Y financial.institution affiliated with International 'Bancshares Corporation,
jointly and/or severally, and iU any capacity;whether as maker, guarantor, or otherwise, now or.hereafterowing and
reia.Fdless of how evidenctid or ari_Sing; and .
f:lnY and a.ll e?ctensioris, modi_fications_, substitutionS and! or renewals of any indebtedness.
To the ex.teq.t allowed by law, for purposes hereot it is intended that the include all of indebtedness, whether evi-
denced by notes, opet;t."llccounts, overdraft, or 3.nd whether direct, indirect O):' contingent, regru.:dless of cla,t;s, fonn or pur-
pose and including but not limited to, lo!W5 for consumer, agricultural, business or personal purposes. The indebtedness does not
include amounts owing_ pursuantto a homestead equity loan and/or horne. equity iine of credit.
Ii being eipressly agreed and understood any and all now owed to of hereafter advanced by to Grantors shall be
payable at the main offiCes of Beneficiary at 13"0 E. Travis, San Antonio, Bexar County, Texas 78205; and shall bear interest as may
be provided in such rlotes or other evidences given Py GrantOrs to Benefic;iary; and this. instrument is also executed for
the purpoSe of securing and the of ap.y extension and/or modification of any n.ote or of any part of the said
inQebtedne&s of Grantors and including any further loans and a'!vancements made by Beneficiary to Grantors. of all indebt-
of Grantors to Beneficiary shall not ternrl,nate this Dee_d Of Trust unless the same be so released by Beneficiary at the request
of Grantors, but otherwjse it shall remain in full force and effect tO secure all future advances and indebtedness, regardless of any
tional securitY thai be taken .as to past or [ij.ture indebtedness, and shall be unaffected by any renewals, extensions or partial
releases hereunder.
GRANTORS WIT.L NEITHER CREATE NOR PERMIT ANY JUNIOR OR SUBSEQUENT LIENoR ENCDMBMNCE AGAINST
TilE PROPERTY WITHOUT PRIOR WRITIEN CONSENT OF.BENEFICIARY.
Annlicable to Prior Liens If this Deed Of Trust is or becomes subordinate to any other liens, security interests, assignments of leases
or rerits or any other encumbrances (collectiyely, the "Prior. Liens") affecting any of the Property, all documents creating the Prior Liens
8?-d eVidencing and governing the Secured shall be collectively called the "PriOr Lien and this section shall
Page5ofJJ oot.t2IOJ IBC9004
apply. Grantors shall not enter irito any extension, modificatiori. illcrease or refin&......-..ng of auy.of the Prior Lif:n Documents
or the indebtednesey Secured thereby without prior Written consent of Beneficiary .. Grantors shall pay due all indebtedness e\ri-
denced and secured by the Prior Lien Documents and shall timely perforn1 all other obligations of. the Grantors under the Prior Lien
Documents. Beneficiary tmiy, but shall not be obligated to, pay any such :indebtedness or peifonn any such obligations for the account
of Grantors and any surp so expended shall be hereQy. Grantors Shali pay to an amounts so expended by
Berieficiary with interest on such amounts from the date and at the m.te set forth in the Note, but not in excess of the highest rote per-
mitted- by applicable law. Beneficiary's cure of any default under any of the Pricii Lien Documents shall not cons#tute a cure of the
default under thls Deed OfT rust. Grantors shall send to Beneficiary a copy of each notice of default or notice of acceleration or other
received by Grantors from the holder Of any of the Prior Lien Documents within one (1) busineSs day after "receipt thereof by.
Gnintors. Notwithstanding the foregoing, Beneficiary does not conSent t9 any Prior Lien unless othetwlse ex;pressly in this
Deed Of Trust.
Securitv Agreement/Financing Statement This Deed OfT rust lien shall cover a11 property now or hereafter affixed 9r atdtched orincor-
porated i;J.tO the Property, described herein and now or hereafter owned by Grantors in which Grantors noVi or hereafter have an .inter-
est which, to the fullest extent permitted by law,. shall be deemed fixtuies and part ..of the Property .. In addition, this Deed Of Trust lien
shall cover,. and Grantors to the extent of any present o_r hereafte! created riihts. Of -Grantors in such PrOperty hereby grant to
Berieficiary, a security interest in (i) all building m8.terials, equipment and other Personal property, to be incorporated into. any
improVements constructed On the premiSes; (ii) all goods; materials, supplies,.fixtutes, equipment; machinery, furniture and fi.Iniishings
and other personal property which are now or may hereafter be approptiatedfor use on (whether such items are" stored on the Premis-
es or. elsewhere), ,located on or used in c_onnection with the premises; (ili) all rellts, isSues and profits, profits: renewals,
income or oilier benefit derived from the payments received for lodging from interests and/or materialS, and all inv'e.ntory, accounts,
accounts receivable, contract rights, general intangib1es, intellectual Ptoperty, chattel paper, insi:rutnents, documents, peni:rits, plans,
specifications, drawings, governmental approvals, notes, drafts, letters of credit, indebtedness arising from arid/or to P.ay.an advance
on letters of credit, accounts due from credit, debit and/or charge c:ird companies, insurance policies, insurance condemnation awards
and proceeds, trade names, trademari,ts and service marks arising fl'om or related tO the premises atid any business conducted on the
premises by Grantors; and (iv) all replacements and substitutions for or additioDs to, all products and prOCeeds of, and all books, records
and files relating to any of the foregoing. To the extent any property coyeted by this Deed Of Trust lien cciQsists Of rfghtS in action or
personal property covered by the Texas Business And Commerce Code, thi$ Deed Of Trust lien conStitutes a Security agreement and is
intended to create a security interest in such property in favor of Beneficiary. This Deid Of Trust shall be self-operative with respect
to such property, and in the of andlot acceleration of the iridebte"dness hereby secui-ed, Grantors expressly grant to
Beneficiary the right.to enter upon the Property .:Vhere the collateral is located for the Purpose of enforcing its right to such collateral,
and Grantors agree to and deliver, on demarid, such security agreements, fmancing Rnd other instrUments as
Beneficiary may request in order to impose the lien hereof made more specifically upon any of such pFoperty. If the lien of this Deed
OfTmst on any property shall be subject to prior security agree<ment C.overing such property, then in the event of im.y hereun-
der, all the rights, title and interest of Grantors in and to any and .all deposits made in conneCtion with the transactibn whereby s:n-ch
prior security agreement was made are hereby presently assigned to Beneficiary, together with the benefit of any paynients n:ow or here-
after made in connection with such
Financing Sta'temepts In addition to .Beneficiaxy's other rights. se"t forth in this Deed Of Trust, B(mefici!lry shall have all rights of a
secured party under the Texas Business And Commerce Code (the "Code"). At Beneficiary's request, Grantors shal.l execute and deliv-
er to Beneficiary all fmanciilg statements that may be required by Beneficiary to establish and maintain the validity and priority of
Beneficiary;s secu:Oty interest, and Grantors shall bear all costs thereof, including all searches reasonably required _by BeJ;Ldiciary. If
Beneficial)' should dispose of arty of the property covered Dy the secuqty interest created.under thls Deed Of Trust pursuant to the
Code, ten (10) days written nOtice by BeneficiarY io Grantors shall deemed to be nOtice; proVided howeVer;: Beneficiary
may dispose of such property in accordance with the foreclosure Of this Peed Of Trust in lieu of proceeding the. Code,
(i)
. (ii)
(lli)
Gi-antors heieby authorize to file a Financing an Amended Financing and a Continuation
Financing Statement (colleCtively referred to as the "Financing Statement'') describing Collateral.
Grantors hereby authOrize Beneficiary to file a Financing Statement deseribing any agricultural liens or other statutory liens
held by Beneficiary.
Grantors shall receive prior to the Closing an official report from the of State of Collateral State; Ule Chief
ExecUtive Office State, and the Debtor State (each as defined below) (the "SOS Reports'') indicating that Beneficiary's Secu-
Beneficiary shall receive at any time following the Closing an SOS Report indicating that Beneficiary's security interest is
prior to allother security "inteiests or interests refleCted in report.
BenefiCiary may sell, lease, or dispose of any of the personal proPerty in accotd with the alld duties
Beneficiary under Chapters 2 and 9 of the Texas Business And Commerce Code after giving notice as required by those chapters; unless
the Collateral threatens to decline rapidly in value, is perishable, or would typically be sold. on a recognized market, Bci:neficiary will
give Grantors reasonable notice of any public sale .of the or of a time after which it may be otherWise dispO:?ed of without
fujther notice to Grintors; in this event, notice will be deemed if it is mailed, postage prepaid, to at the addiess
specified in this agre_ement least ten days before.any public sale or teh days before time the may be otherwise
disposed pf without further notice to Grantors. Grantors authorize Beneficiary to or modify any and all set forth
in SectiOn 9.61 0( d) of the Texas Business And Commerce Code.and stipulate and agree that such a.disclaimer and/or modification will
not re,nder the sale commercially unreason3.ble, Beneficiary may retain all or part Of the in fuil"and/or partial satisfactiqn of
the indebtednesS pUrsuant to Section 9.620 ofTexap Business And Commerce Code.
Without providing Beneficiary with at least thirty (30) days prior written notice of Grantors' intention to do so, Grantois, until the
indebtedtiess is paid in full, agree that.they will not:.
a,
b.
c.
in one transaction or a series of related transactions, merge into or consolidate with <iny other entity, sell all or sub-
stantially all of its assets, or in any way jeopardize its corporate
change the state of its incorporation,
change its corporate name,
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d. change the wcation of its Chief Office
e. file a tJCCw 1 Amendment fonn, and/or
f. file a Tennillation f0nn.
Grantors shall give advance notice in writing to Beneficiary of any proposed change in Grantors' pame, identity, or structure and shall
arid. deliver to Beneficiary, prior to or concurrently with the occurrence any such change, all additional financing statements
that may require to establish .and m<i.intain the validity and of Beneficiary's security interest with respect to any of
the property described referred to herein.
Grantors express!)' represent that Property hereinabove mentioned and conveyed to the forms no part of any property
owned, used or claimed by Qrantqrs as exempted from forced sale \Ulder the law of the State of Texas as either personal or business
homestead, and Grantors renounce all and every claim thireto under any such law or laws and hereby ex:pre!!sly designate as their
hbrhestead, and business, lind as constituting f!ll.the property owned, .used or claimed by them as exempt either as
and/or business wder such laws the follqwing described proper_ty:

(Personal And Business _Homestead)
Assignments of Rents Profits. etc. All of the rents, royalties, bonuses, issues, contracts fOr deed, proceeds, profits, revenue, income
"and anY other benefit derived from the Property and improvements or arising from the or enjoyment of any portion therew
of or from any lease or pertaining "tqereto and liquidated damages following default under such leases, and all proceeds
payable under any policy of insurance cOvering. -loss of rents or caused by damage to any part of the Property, together with any and
all rights that Grantors ma"y have again&t any tenant with any ap.d all rights thit Grantors may have against any tenant under such leasw
e"s or any subtenants or occupants of any part of the Property (hereinafter. called tp.e "Rents"), are hereby absolutely and unconditionw
ally assigned to Ber;teficiary .. hior: to a hi paymeUt by Grantol<! of any portion of the i..D.debteffi?.ess by this Deed Or
Tiust (the or breach of .coven;mt, representation or warranty made herein by Grantors (colleCtively, an "Event of
Grantm;s shall haye a license to collett and receive all Rents as Trustee for the benefit of Beneficiary and Grantors, and
Gf?Ptors shall apply the funds sO collected first td paymeilt of the Indebtedness i:J?. such manner as Beneficiary elects and thereafter
to the acaount of Grantors." The foregoing issignment is iD;tended to Qe absolute, unconditional and presently effective. It shall never
be necessa[y for to institute legal proceedings e:f any kind to enforce the terms of this assignment.
Assigrunent of Leases. Grantors a.ssign to Beneficiary all existing ap.d future. leases, including thereOf, and any and
all extensions, renewals, modificatiobs, and-replacements upon any part of the Property (the "LeaseS"). Gf?ntors hereby fur-
ther assign _to Beneficiary all guaranties of ten.ants' .perfonnance under the Leases .. Prior to an Event of Default, Grm)tors shall have
the right, without joinder of Beneficiary, to enforce the Leases, unless Beneficiary directs otherwise.
Warranties Concerning Leases and Rents Grantors represent and warrant that:-( a) Grantors have good title to the Leases and Rents
hereby assigned and authority to assign them, and no other person or entity "has any right, title or interest therein; (b) all existing Leases
are valid, urunoctified and in full force and effect, eXcept as indicated herein, and no default exists thereunOer; (c) unless otherwise prow
vii:led herein, no Rents have been or Will be l!lortgagect" or pledged; (d) Rents have been or will be antiyipated, waived,
released, disCounted, setwoff or compromised; alld (e) Grfmtors have not received any funds or deposits from any tf;nant" for wliich cred
it has not already bien made "On of accrued Rents.
Grantor's Covenants of Performance as to Leases Grantors covenant to: (a) perform all of their obligations under the Leases and
give prompt notice to Beneficiary of anY fai;lure to do so; (b) give immediate notice tp Beneficiary of any notice GrantorS received from
any tenant or subtenant -qnder any leases, specifying any ch-1:imed default by any party under such Leases, excluding, hoWever,.notice
of defaults under residential leases; (c) enforce the tenant's obligations under the Leases; (d) defend, at Grantor's expense, any pro-
ceeding to the Leases, including, if Beneficiary' S?. requests, any" such proceeding to which Beneficiary is a party; and (e)
neither create nor permit any encumbrance upon its interest as lessor of the Leases, except tl)ls Deed .Of Trust and any other encum-
bra_riges permitted by this Deed Oftrust,
Priof Approval for Action Affectinv I eases Grantors shall not, Without the prior written consent of Beneficiary, receive or collect
mor-e than One mOnth in advance, encumber or assign future Rents, waive or release any -obligations of any under the
Leases, cancel, terminate or modify any of the Leases, cause or permit any cancellation, termination or surrender of any of the LeaSes,
or commence any prOceedings for of an tenant under any Of th-e Leases, except upon defuult by the tenant thereunder;
or any assigDill;ent of the Leases whereby a is released from its obligation.
Rejection ofl,eases in Bankruotcy. Grantors agree that no-settlement for damages for termination of any of the Leases under the
Eederal Banlauptcy Code, of" onder .any other federal, state, of local statute, shall be made without the prior written consent of
Beneficiary, and any .check jn payment of such damages shall be made payable to both Grantors and Beneficiary. Grantors hereby
a"ssign any such payment to Beneficiary, to be applied to the as Beneficiary may ele9!, and agree to endorse any check
for suCh. payment to th_e order of Beneficiary. . .
Beneficianr's Rjghts. Beneficiary's acceptance of this not, prior to, upon, or after entry upon and taking possession
of the Prop"erty by Beneficiary or any foreclpsure of the lien hereunder or conveyance of the Property h"erein 9escnbed in lieu thereof,
be deemed tq constitqte Beneficiary as a "ll}ortgagee in nor oBligate Beneficiary to appefl.l" in or defend any proceeding
relating to any .of the or to the take any action hereunder, any m:oney, incur any expenses or perform.any obliw
gation qr"liability the Leases, or assume any obligation liability the Leases, or assume any securi-
ty deppsits .. Benefici?IY .sl}all not be liable for a.tl.y injury Or damage to !lDY person or prope1ty in or about the Property. Beneficiary_
shall not be obligated to perform, or otherwise adhere to any tenns of any_ of J.,eases or any covenant of Grantors to any tenw
ant unless Beneficiary agrees to do so, in writing, by Beneficiary, which Beneficiary rbay elect not to do so, in its sole and
absolute discretion.
Appointment of AttomeywinwFact. Grantors' hereby appoint Beneficiary its attorileywinwfact, coupled with an interest, empowering
Beneficiary to subofdinate any this Deed Of Trust.
Indemnificatio.,.;,. Grantors hereby indemnify and hold Beneficiary harmless from all liability, damage, or expense incurred by
Page 7 oflJ DOT-12103 -IBC9004
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:SeDeficiary from any clainis under the i. ..... including, by h .... ants for security deposi.; or for rental
payments more than one <n month in advance and not delivered to Beneficiary. All amounts ind.erimified hereunder, includ-
ing reasonable attorney's fees,. if paid Beneficiary shall beai interest maximum lawful rate and shall be'payable by
Grantors imm_ediately without demand and shall be secured hereby.
Records Etc Upon by Beneficiary, Grin tors shall i:leliver to. executed of Leases. and 9opies of all :
records relating thereto. There shall be no merger of the leasehold created by the With the estate of Mortgaged
Property without the prior written consent of Beneficiary. Upon default, Grantcirs hereby authorize and the tenants under the
Leases to pay Rents to Beneficiary upon written demand bY Beneficiary, without further consent of Grantors, and the tenanU! niay rely
upon any written statement delivered by Beneficiary to the tenants. Ally 'such payment to shiill constitute payment to
Grantors under the-Leases. '
Fixtures Some of the items on the Ptopertf are goods that are or aie to becorile fixtures related tO said an4 it is i.l;l.tended
that, as tothose goods, this Deed Of Trust shall be effective as a fmancing statement filed as a the of its fi.ling
of record in the real estate records of the county in Which the PrQperty is. situated .. conceming the secUrity 4J_terest
ed by this ills.trument proy be obtained from Beneficiary, as secured party, att)J.e a.ddress of Beneficiary set elsewh!;:re in this Deed
Of Trust. The mailing address of the Grantors, as Debtor, is aS stated herein.
- Environmental Compliance. use of the Property will at all times Comply with all.laws, st8.;tutes, ordinances, rules and regu-
lations ("Laws") of any goVernmental, quasi-Eovemmentai or regulatory' authoritY. which' relate to the ti'ansportation. storage, place-
ment, handling; treatment, discharge, generation, production, removal.or ( c6lh;ctively, of any waste, petroleum
product (including, without limitatiOn, gasoline alld diesel fuel), waste products, poly-cblorhiated biphenyl, asbestos hazardous mate-
and/or any other substanCe, the Treabnent of which is regulated by any laws (collectively, ''Waste"). Grantors will comply with
all LaWs regarding lll_lderground storage tanks used to hold gasoline, diesel or imy other petrplet_UU products on the Pr'!perty.
To the best of Grantors' knowledge, no Waste is not located on the Property, aO.d neither Grantors nor; to the best Of Grantors' knowl-
edge, any other person has ever caused or pennitted.any Treatment of any WaSte on, under or at the Property .or any part thereof, and
to the best of Grantors' knowledge, no property a9joining the Prope,rty is being used, or has 'ever been used any prf:viOris time for
the Treatment of Waste.
To the b;st of Grantors'lmowledge, no investigation, administrative Order, cons.ent order and agreemellt, litigation or settlement, with
res_i,eet to Waste or the Treatment of is proposed, threatened, anticipated or in existence with respect to the Property. The
Property is not currently on, and to Grantors' knoWledge, after diligent investigation and inquiry, has never been on, any federal or state
"Superfund" or "Superlien" list.
agree to (a) give notice to upon Grantors of any WaSte on with a
full description thereof; (b) promptly corhply with any Jaws applicable to Grantors or the Property requiring the ren:i,oval, treatment or
disposal of such Waste and pi:ovide Beneficiary satisfactory evidence such compliance; and (c) _provide Beneficiary within
thirty. (30) days after demand by Beneficiary with a bond, letter of credit or similn;- asSurance evidencing to sat-
isfaction that the necessary funds are available to pay the cost of removing, treating and disposing' of such Waste and discharging of
any assessments.that may be established on the Property as a result thereof. .
Any spill, discharge or other event upon Or to the Property which Beneficiary detennines materially arid .
adversely affects the value and/or use of the Property, shall an Event of Default under this Deed Of Trust and the Note and all other
. indebtedness secured hereby.
Grantors agree to petfonn an asbestos sutvey and obtain a pennit, and to provide a coj,y of Said. survey Beneficiary, prior to cotp-
'mencing any renovation and/or of a public or commercial. building. Q-rantors further to coply with all other state
and federal statutes and/or regulations regarding asbestos and asbestos removal.
Site Assessments (b'y its officeis, employees and agents) at any tllpe and from timi to time, prior or after the
occurrence of any default, may contract foi the services qf any person or fmn ewers'.') to perform environmental site .assess-
ments ("Site Assessments") on the Properly for the purposes pf detennining Whether there exists on thePro,Perty any environmental
which couid r1;:lisonably be .expected to result iii. any liability; cOst or expense to the occupier or operatOr of. such
PrOperty arising any Laws relating to Waste or the ofvlaste. Site Assessments tpay at any time or
times, upo.O: reasonable notice; and under reasonable conditions established by Grantors whic4 .do nOt impede the performance of the
Site Assessments. Grantors agree that any Site Assessment shall be for the sole and excluSive use, benefit and'reliance ofBeneficiary
in asseSsing the yalue of its security interest in the Property and wiU .Q.Ot be relied on by Grantors for any pm:pose. The Site Reviewers
are hereby authorized to enter upOn the Property for s:uch purposes. The Site ReViewers. are furlher authorizl?d to perform abqve and.
below ground for enVironmeD.tal dain.age or the presence of waste on the PropertY such other tests on the Property asmay
be necessary to conauct the Site As.sessments in the. reasonable opinion of the Site Reviewers. Grantors will supply to the Site
Reviewers such historical and opeiational infonnatiOn regarding tbe''Property may be teasrinably requested by the Site Reviewers to
facilitate the Site AssessmentS ahd will be available for meetings with Site Reviewers if requested. The cost of perfonning such Site
Assessmentll be paid by Grantors upon demand ofBeneficiruyand any such expenses.bome by Beneficiary nOt reim-
bursed by Grantors shall be secured. by this Deed OJ Trust.
indemnification. Wh!;:ther or not any Site Assessmerits are conducted, and regardless ofw.hethet or not a default occurs under
this Deed Of Trust or undet: the Noie or under any other indebtedness secured hereby and regardless :of whether anY remedies
in respect of the Property are exercised by Beneficiary, Grantl_lrs win defend, indemnify and ho,ld hilrmless Benefi!!farjo and
Trustee froffi any and all liabilities (including strict liability), demands, penalties, losses, co:Sts Or expenses (including,
without limitation, attorn.eys fees and expenses, and remedial costs), suit cOsts of any settlement or judg!llent and claims of any
and every kind whatsoever which may now or in the future (whether before or after the release or foreclosure of this Deed Of
Trust) be paid, incurred or suffered by or asserted against Benefici;ll"Y or Trustee by any person or cir governmental
agency for, with respect to, or as a direc.t or itidirect result of, the presence on or under, or the escape, seepage, leakage, spillage,
qisCharge, emission or release from, on or affecting the Property of any waste or.any spill, C!r which arlse out of or from
the environmental condition of th:e Property or the applicability of any lawS relating tQ the waste (including, without limitation,
the Comprehensive Environmental Response, CompensatiOn, and Liability 42 U.s ..c. seq.,. as ariSes fro.m. time to
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time, or any federal, siate or local or "Superlien" law, statute, ordinance, code, rule, regulation,
order or Qecree), regar.dless of wheth-er or not caused by or Within the control of Grantors, Beneficiary or Trustee. The repre-
. sentations,. covenants, warranties an indemnific"ation contained shall survive the release and/ot judic"lally or non-judi-
(or tra"nsfer i"P iieu thereof) of the lien of this Deed Of Tru-st. For the purpose of this paragraph and Uotwith-
sHtUding any other provision contained herein to the contrary, the term ''Grantors" shall refer only to the Grantors not only
! . to the c;;rantors named but also to all pthet person who may hereafter assu!Ue to the Note and tQe obligations of this
Deed Of Trust.
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ARBITRATION.
I
GRANTORS, BENEFICIARY ANI> TRUSTEE FURTHER AGREE AS FOLLOWS:
.i. CONSUMER-RELATED CLA\MS OF $75,000.00 OR LESS IN ACTUAL DAMAGES:
(a) WTIH REGARD TO ALL CONsmlllm,RELAT)':D CLAIMS OF OR LESS IN ACTUAL DAMAGES,
ANY AND ALL CoNTROVERs!llS OR CLAII\'IS ;\RISING OUT OF TillS CONTRACT, ITS NEGOTIATION AND/OR
. THE BruiACH THEREOF, SHALL BE SETTLED By ARBITRATION ADMINISTERED BY THE AMERICAN ARinTRA-
T!()N ASSOCIATION UNDER ITS SUPPLE!\IENTAL PROCEDVREs FOR RESOLUTION OF CONSUMER-RELATED
DISPUTES AND. CONSUMER DUE PROCESS PROTOcOL (WHICH ARE INCORPORATED HEREIN FOR ALL PUR-
POSES); AND JUDGMENT ON TID> AWARD R)':NDERED BY THE ARBITRATOR(S) MAY BE ENTERED IN ANY
. COURT HAVING JURISDICTION THEREOF. IT IS INTENDED BY ALL PARTIES THAT THIS ARBITRATION CLAUSE
MEET AND INCLUDE ALL STANDARDS AND PRINCIPLES OF THE AMERICAN ARBITRATION ASSOCI-
ATION'S CONSUMER DUE PROCESS PROTOCOL AND DliE PROCESS IN PRED!SPUTE ARBITRATION.
{b) INSTEAD OF PROCEEDING IN ,ill:BITRATII)N; ANY PARTY mmETO MAY PURSUE ITS CLAIM IN Tim
CONSUMER'S LOCAL SMALL CLAIMs COuRT, IF THE :CONSUMER-RELATED CLAIM MEETS THE SMALL
CLAIMS COURT JURisDICTIONAL LIMITS, IF THE SMALL CLAIMS CoURT OPTION IS CHOSEN, THE PARTY
MUST CONTAcT THE sMALL CLAIMS COURT DIRECTLY. .
(c) THE PARTIES FURTHER,\GR)':E THAT (i) NO ARBITRATION. PROCEEDING HEREUNDER SHALL BE CER-
TIFIED As A CLASS ACTION OR PROCEED AS A CLASS ,\CTION, OR ON A BASiS INVOLVING CLAIMS BROUGHT
. IN A PURPORTED REPRESENTATIVE CAPACITY oN BEHALF OF THE GENERAL PUBLIC, OTHER CUSTOMERS
OR POTENTIAL. CUSTOMERS OR PERSONS SIMILARLY SITUATED AND. (ii) NO ARBITRATION pROCEEDING
HEREuNDER SHALL BE CONSOLIDATED wiTH, OR JOINED IN ANY WAY WITH, ANY OTHER ARBITRATION
PROCEEDING
(d). THIS ARJiiTRATION PROVISION SHALL SURVIVE Al'!Y TERMINATION, AMENDMENT, OR EXPIRATION
OF THE AGREEMENT IN WmCH TillS PROVISION IS CONTAINED, UNLESS ALL Of THE PARTIES OTHERWISE
EXPRESSLY AGREE IN WRITING . .
. .
(e) THE.PARTIES ACKNOWLEDGE THAT .THIS AGR)':EMENT EVIDENCES A TRANSACTION INVOLVING
II. CONSUMER-RELATED CLAIMS ,\BOVE $75,000.00 IN ACTUAL DAMAGES A]'fDIOR COMMERCIAL
CLAIMS: . .
(a) ANY ARBITRATION INVOLVING CONSUMER-RELATED CLAIMS ABOVE $75,000,QO IN ACTUAL DAMAGES
: AND/OR COMMERCIAL CLAIMS HEREUNDER SHALL BE BEFORE AT LEAST THREE.NEUTRAL ARBITRATORS
ASSOCIATED WITH THE AMERICAN ARBITRATION Asso.CIATION AND SELECTED IN ACCORDANCE WITH THE
COMMERCIALARBITRATIONRULES.OFTHE AMERICAN ARBITRATiON ASSOCIATION. FAILURE OF ANY ARBI-
TRATOR. TO DISCLOSE ALL FACTS WHICH MIGHT TO AN OBJECTIVE OBSERVER CREATE.A REASONABLE
IMPRESSION OF THE ARBITRATOR'S PARTIALITY, AND/OR MATERIAL ERRORS OF LAW SHALL. BE GROUNDS
[IN. ADDITION TO ALL OTHERS] FOR VACATUR OF AN AWARD R)':NDERED PURSUA,NT TO THIS AGREEMENT.
(b)
TIFIED AS.A CLASS ACTION OR PROCEED AS A CLASS ACTION, A BASIS INVOLVING CLAIMS BROUGHT
IN A PURPORTED REPRESENTATIVE CAPACITY ON BEHALF OF THE GENERAL Pi:JBLIC, OTHER CUSTOMERS
OR. POTENTIAL CUSTOMERS OR PERSONS .SIMILARLY SITUATED ANn (ii) NO ARBITRATION PROCEEDING
.HEREUNDER SIIA.LL BE CONSOLiDATED WTIH, OR JOINED IN ANY WAY WITH, ANY OTHER ARBITRATION
. . . .
(c) TIDS ARBITRATION PROVIS.ION SHALL.sURVIVE ANY TERMINATION, AMENDMENT, OR EXPiRATION
OF THE AGREEMENT IN WHICH TillS PROVISION IS CONTAINED, UNLESS ALL OF THE PARTIES OTHERWISE
EXPRESSLY AGREE IN WRITING .
I
(d) THE PARTIES ACKNOWLEDGE THAT THIS AGREE!\IENT.EVJDENCES A TRANSACTION.INVOLVING
INTERSTATE GOMMERCE. THE FEDERAL ARBITRATION ACT sHALL GOVERN THE INTERPRETATION,
ENFORCEMENT, AND PROCEEI!INGS PURSUANT TO THE ARBITRATION CLAUSE OF THIS AGREEMENT.
III. ADDiTIONAL COMMERCIAL CLAIMS PROVISIONS:
(a) ANY AND ALL COMMERCIAL CONTROVERSIES BETWEEN THE PARTIES, SHALL BE RESOLVED BY
ARBITRATioN IN ACCORDANCE WrTII THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARB!-
. TRATION ASSOCIATION IN EFFECT AT THE TIME OF FILING, UNLESS THE COMMERCIAL ARBITRATION
IN SUCH EVENT THE TERMS OF THIS PROVISION SHALL CON-
Page 9 of13 DOT-12/03 -IBC9004
THE AWARD OF THE ARBi,.<ATORS, A MAJORITY OF THEM, BE t\.ND JUDGMENT
UPONTHEAWARDRENDEREDMAYBEENTEREDJNANYCOURT,STATEORFEDERAL,HAVINGJURISDICTION.
THE ARBITRATION AWARD SHALL BE.JN WRITING AND SPECIFY THE FACTUAL AND LEGAL BASis FOR THE
AWARD. UPON THE REQUEST OF ANY PARTY, THE AWARD SHALL INCLUDE FINDINGS OF FACT .AND CON-
CLUSIONS OF LAW.
{<) ARBITRABLE DISPUTES INCLUDE ANY AND ALL CONTROVERSIES OR CLAIMS BETWEEN THE PARTIES
OF WHATEVER TYPE OR MANNER, INCLUDING WITHOUT LIJinTATION, ANY CLAIM. ARISING OUT Oil OR
RELATING TO THIS DEED OF TRUST, ALL PAST, PRESENT AND/OR FUTURE CREDIT FACILITIES AND/OR
AGREEMENTS INVOLviNG THE PARTIES,.ANY TRANSACTIONS BETWEEN OR INVOLVING .THE PARTIES,.
AND/OR ANY ASPECT OF. ANY PAsT OR PRESENT RELATIONSHIP OF THE PARTIES, WHETHER BANKING OR
OTHERWISE, SPECIFICALLY INCLUDING ANY ALLEGED TORT COMMITTED BY ANY
I
(d) THE PARTIES SHALL.ALLOW AND PARTICIPATE IN i:nSCOvERYIN ACCORDANCE Wi'I'H THE FEDERAL
RULES OF CIVIL PROCEDURE FOR A PERIOD OF ONE HUNDRED TWENTY (120) DAYSjAFTER THE :fiLING OF
THE ORIGll'jALRESPONSIVE PLEADING DISCOVEIJ.YMAYCONTIN!JE THEREAFTER AS AGRE.ED BY THE PAR-
TIES OR AS ALLOWED BY TilE ARBITRATORS. UNJP>SOLVED DISCOVERY DISrUTES SJIALL BE BROUGHT TO
TBE ATTENTION OF TliE ARBITRATORS BY WRITTEN MOTION FOR PROPERDISPOSiifiON;IN.CLUDING RUL- .
ING ON ANY ASSERTED OBJECTIONS, 'PRIVILEGES, AND PROTECTIVE ORDER REQ)iESTS AND 'AWARDING
REASONABLE ATTORNEY'S FEES TO THE PREVAILING PARTY. . . ' . . .
(e) IN TilE. EVENT .THE AGGREGATE OF ALL CLAIMS ASSERTED .EXCEED $500,000.00,
EXCLUSIVE OF INTEREST AND ATTORNEY'S FEES, OR UPON TliE WRITTEN REQuEST OF ANY pARTY, '(!)
PRIOR TO THE DISSEMINATION OF A LIST OF POTENTIAL ARBITRATORS, TilE AMERICAN ARBiTRATION
ASSOCIATiON SHALL CONDUCT AN INPERSON ADMINISTRATIVJi CONFERENCE wiriJ: THE PARTIES AND
THEIR ATTORNEYS FOR THE FOLLOWING PURPOSES AND FOR SUCH ADDITIONAL ilJ,RI'OSES )I.S THE PAR-
TIESOR THE AMERICAN ARBITRATION ASSOCIATION 'MAY DEEM APPROPR(ATE, (A)'TO OBTAIN ADDITION-
AL INFORMATION ABOUT THE NATilRE AND MAGNITUDE OF THE DISPUTE AND TIIE:ANTICIPATED LENGTH
OF HEARINGS AND SCHEDULING; (B) TO DISCUSS THE VIEW OF THE PARTIES ABOUT ANY .TECHNICAL .
AND/OR OTHER SPECIAL QUALIFICATIONS OF THEAIDUTRATORS;AljD (C) TO CONSIDER, WHETHER MEDI-
ATION OR OTIIER METHODS OF DiSPUTE RESOLUTION MJ;GHT BE APPROPRIATE, AND (2) AS PROMPTLY AS
PRACTICABLE AFTER THE SELECTION OF THE ARBitRATORS; A PRELIMINARY HEARING SHALL BE HELD
AMONG THE PARTIES, THEm ATTORNEYS AND THE ARBITRATOru). WITH THE AGREEMENT OF THE ARBI-
TRATORS AND THE PARTIEs; TIIE PRELIMINARY i.mA.JUNG MAY BE CONDUCTED BY TELEPHONE CONFER-
ENCE CALL RATHER THAN IN PERSON. AT THE PRELrMINARY HEARING THE MATTERS THAT MAY BE CON
SIDERED SHALL INCLUDE, WITHOUT LIMJ;TATION, .A PREHEARING SCHEDuLING ORDER ADDRESSING (A)
EACH PARTY'S DUTY TO SUBMIT A DETAILED. STATEMENT OF CLAIMS, DAMAGES AND/OR DEFENSES, A
STATEMENT OF THE ISSUES ASSERTED BY EACH PARTY AND ANY LEGAL AUTHORITIES THE PARTIES MAY
WISH To BRING To TIIE ATTENTION oF THE ARBITRATORs; (B) RESPONSEs ANDiiJR REPLIES to THE PLEAD-
INGS FILED IN COMPLIANCE WITH .SUBPART 2(A);. (C) STIPULATIONS REGARDINGANY UNCONTESTED
FACTS; (D) EXCHANGE. AND PREMAR;(ING OF ALL DOCUMENTS. WinCH EACH PARTY BELIEVES MAY BE
OFFERED AT THE FINAL ARBITRATION HEARING; (E) TilE IDENTIFICATION AND AVAILABILITY OF WITNESS-
ES, INCLUDING EXPERTS, AND SUCH ADDffiONAL. MATIERS REGARDING WITNESSES INCLuDiNG THEm
BioGRAPHIES AND A SHORT SuMMARY OF THEm EXPECTED TESTIMONY, (F) WHETHER A STENOGRAPRIC
OR OTHER OFFICIAL RECORD OF THE PROCEEDINGS SHALL BE MAINTAINED; AND (G) TliE POSSIBILITY OF
UTILIZING MEDIATION OR OTHER ALTERNATIVE METHODS OF DISPUTE RESOLUTION.
(l) FOR PURPOSES OF 'THIS PROVISION, "THE .PARTiES" MEANS GJ.i.ANTORS, .BENEFICIARY AND
TRUSTEE, AND EACH AND ALL PERSONS AND ENTITiES SIGNING TRIS AGREEMENT OR ANi( OTHER AGREE-
MENTS BETWEEN ORAMONGANY OF THE PARTIES As PARTOFTRIS TRANSACTION. ;,THE PARTIES'' SHALL
ALSO INCLUDE INDIY.IJ)UAL PARTNERS, AFFILIATES, OFFICERS, DiRECTORS, EM;PLOYEES, AGENTS AND/OR.
REPRESJCNTATIVES OF ANY PARTY TO SUCH DOCUMENTS, AND SHALL INCJ,UDE ANY OTiJ.ER OWNER AND .
HOLDER OF TRIS A.GREEMENT.. .
(g) THE PARTIES SHALL HAVE TilE RIGHT TO INVOKE SELF; HELP REMEDIES (SUCH AS SET-OFF; NOTIFI-
CATION OF ACCOUNT DEBTORS, SEIZURE AND/OR FORECLOSURE OF COLJ;.ATEiiAL, AND NON"o!UDICIAL
. SALE .OF PERSONAL PROPERTY AND REAL PROPERTY COLLATERAL) BEFOHE, DURING OR AFTER ANY ARBi-
TRATION AND/OR REQUEST ANCILLARY OR PROVISIONAL JUDICIAL REMEDIES (SUCH AS G)\.RNISHMENT,
ATTACHMENT, SPECIFIC PERFORMANCE, RECEIVER, i!NmNCTION OR RESTRA!ffiNG ORDER, AND SEQUES-
. TRATION) BEFORE OR AFTER ANY ARBITRATION. THEPARTIES NEED NOT AWAIT THE OUTCOME OF THE
ARBITRATION BEFORE USING SELF-HELP REMEDiES.' USE OF SELF-HELP OR ANCILLARY AND/OR PROVI-
.
AT LAW SHALL BE AVAILABLE FROM THE'ARBITIIATORs.
. . . .
(h) THE PARTIES AGREE TIIAT ANY REGARDING ANY CONTROVERSY BETWEE)'f THE PAnTIES .
. SHALL EITHER BE BROUGHT BY ARBITRATION, AS DESCRiilED HEREIN, ORBY .iuDICIALPROCEEDINGS, BUT
SHALL NOT BE PURSUED SIMULTANEOUSLY IN DIFFERENT OR AJ;.'TERNATIVE FORMS. A TIMELY WRITTEN .
NOTICE OF INTENT TO ARBITRATE PURSUANT TO TRIS AGREEMENT STAYS.AND/OR ABATES ANY AND ALL
ACTION IN ATRIAL COURT, SAVE AND EXCEPT A HEARING ON AMOTIONTO COMPEL ARBITRATION AND/OR
THE ENTRY OF AN ORDER COMPELLING ARBITRATION AND STAYING AND/OR ABATING THE LITIGATION
PENDING THE FILING OF THE FINAL AWARD OF THE ARBITRATORS. ALL REASONABLE AND NECESSARY
ATTORNEY'S FEES AND ALL TRAVEL COSTS SHALL BE AWARDED TO THE PREVAILING PARTY ON ANY
MOTION TO COMPEL ARBITRATION AND MUST BE PAID TO SUCI.iPARTYWITHIN TEN (10) DAYSOFTHE SIGN-
ING OF THE ORDER COMPELLING ARBITRATION. .
(i) ANY PARTY SEEKING TO ARBITRATE SHALL SERVE A WRITTEN NOTICE OF iNTENT TO ARBITRATE TO .
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. ANY AND ALL OPPOSING P ART)S W dB'IN 360 DAYS AFTER DISPurE HAS Ak<o"EN. A DISPui'E IS DEFINED TO
HAVE ARISEN ONLY UPON RECEIPT 0]? SERVICE OF JUDICIAL PROCESS, INCLUDING. SERVIcE OF A -COUN-
TERCLAIM, FAILURE TO SERVE f!,. WRI'I:TEN NOTICE OF INTENT TO-ARBITRATE WITHIN THE TIME SPECIFIED
ABOVE SHALL BE DEEMED A WAIVER OF THE AGGRIEVED PARTY'S RIGHT TO COMPEL ARBITRATION OF
SUCH CLAIM. THE ISSUE OF WAIVER PURSUANT TO TillS AGREEMENT IS AN ARBITRABLE DISpUTE.
. '
G) ACTIVE PARTICIPATION !N PENDING LITIGATION .DURING THE 360 DAY NOTICE WHETHER
AS PLAINTIFF OR DEFENDANT, IS.NOT A WAIVER OF THE RIGHT TO coli1PELARBITRATION. ALL DISCOVERY
OBTAINED IN THE PENDING LITIGATION MAY BE. USED lN MIX SUBSEQUENT ARBITRATION PROCEEDING
(k) THE PARTIES FURTHER AGREE (i) NO ARBITRATION PROCEEDING. HEREUNDER SHALL BE CER-
TIF1ED AS A CUSS ACTiON OR-PROCEED AS A CLASS ACTION, OR ON A BASIS INVOiNING CLAIMS BROUGHT
iN A PURPORTED REPRESENTATIVE CAPACITY ON BEHALF OF TilE GENERAL PUBLIC, OTHER CUSTOMERS
OR POTENTIAL Cl)STO!i1ERS OR PERSONS SW!LARLY SITUATED AND (ii) NO .ARBITRATION pROCEEDING
HEREUNDER. SHALL BE CONSOLIDATED WITH; OR JOINED IN ANY WAY WITH, ANY OTHER ARBITRATION
PROCEEDING . . . . . .
(I) ANY ARBITRATOR SELECTED SHALL B);: KNOWLEDGEABLE IN THE SUBJECT MATTER OF THE DIS-
PUTE. EACH OF THE PARTIES sJi:ALLPAY AN EQUAL SHARE OF THE ARBITRATION COSTS, FEES, EXPENSES,
AND OF THE ARBITRATORS' FEES, COSTS AND EXPENSES.
(m) ALL STATiJ'1'ES OF LIMrrATIONS WHICH WOULD OTHERWISE BE APPLICABLE SHALLAPPLY TO ANY
AND ALL CLAIMS ASSERTED IN MIX ARBITRATION PROCEEDING HEREUNDER AND THE COMMENCEMENT
OF ANY ARBITRATiON PROCEEDING TOLLS SUCH STATUTES OF LIMITATIONS.
(n) IN ANY ARBrfRATION PROCEEDING s'uBJECT TO TillS PROVISION, THE ARBITRATORS; OR MAJORITY
OFTI!EM,ARE SPECiFICALLY);:MPOWERED TO DECIDE (BY DOCUMENTS ONLY, OR WITH A HEARING, AT THE
ARBITRATORS' 'SOLE1JISCRETION) PRE-Hl!:ARING MOTIONS WH1CH ARE SUBSTANTIALLY SIMILAR TO PRE-
HEARING MOTIONS TO DISMISS AND MOTIONS FOR SlllllMARY ADJUDICATION.. .
(o) TB;IS IDITRATHlN PROVISION SHALL SURVIVE ANY TERMINATION, AMENDMENT, OR EXPIRATION
OF Tim AGREEMENTIN WH1CH THIS PROVISIO!'{ IS CONTAINED, UNLESS ALL OF THE PARTIES OTHERWISE
EXPRESSLY AGREE lN .WRITING . .
(p) 'THE PARTIES ACKNOWLEDGE THAT TillS AGREEMENT EVIDENCES A. TRANSACTION INVOLVING
INTERSTATE COMMERCE, THE FEDERAL ARBITRATION ACT SHALL GOVERN THE INTERPRETATION,
ENFOI\CEMENT, AND PROCEEDINGS. PURSUANT TO THE ARBITRATION CLAUSE OF THIS AGREEMENT.
(q) THE ARBITRATORS, ORAMAJOIDrv OF THEM, SHALL AWARD FEES AND COSTS TO TilE
PREVAILING PARTY PURSUANT TO THE TERMS OF THIS AGREEMENT.
(r) NEITIIER TilE PARTIES NOR nffi ARBITRATClRS MAY DISCLOSE THE EXISTENCE, CONTENT, OR
RESULTS OF ANY ARBITRATION HEREUNDER WITHOUT PRIOR WRITTEN CONSENT OF ALL PARTIES AND/OR
COURT Q.RDE;R.
() VEN!JE OF ANY ARBITRATION PROCEEDING HEREUNDER SHALL BE IN THE COUNTY WHERE BENEFI-
CIARY IS LOCATED.
NOtwithStanding the above to conducting a foreclosure pursuaD:t to the provisions of this Deed Of Trust, the
shall, and is hereby djrected to, comply with the provisions of ChaPter 51 of the Texas Property Code (the. "Property Code")
as it may be amended and -in effect as 0fthe dil.te. or of any foreclosure proceedings conducted pursuant to this Deed Of Trust. In
the loca-on and time of shall be held in with Section 51 :002 of the Property Code amendments there-
to or re:..enactmen.t or revisions to sUch' law.
Grantors. and agree that for of de_term.ining the fair market of the: (or any porti;n thereof), as sUch
teiTn is used in Section Sl.OOj of the Texas Property Code, which is sold at a non-jud;icial foreclosure sale .pursuant to the terms of this
Deed (,)fTrust (and in accordance with Section 51.002 of the Property the following faCtors shalLbe used to deterqline such
Property's. fair urrket Vaiue, for such p"!)rpoSes: (a) the shall be valued "AS IS" without any value being 'anticipated for any
. improv!tments or refurbishing to be Conducted, pr after the date .of the foreclosure sale, (b) the intention of the purchaser
to re-sell thePropeey promptly, withqut"an:Y (c) anY re-sale shall be for cash only," with.oudinancing by the
seller, (d). all reasonable costs of closing a re-sale sh!J.ll be deducted from _the reasonable coSts of closing a re-sale shall be dedUcted
from the eStimate of fait: market such as attorneys' fees, title policy pi'emhims, surveyor fees and expenses, the then prevailing
broker's or sale:s:n.J,rui commission, Unpaid. ad valor'em tax iu'nounts, and (e) the application of a dis.count to the to be applied to
apy future sales price to arrive at its th!'n current fair market yalue. Grantors further stipulat that any value given to such Property in
connectiqn with obtaining of loan from Bene:ficiary to which this Deed Of Trost relates, or not any other time or times,
:. shall not btl used a.p.d shall not be considered for guidallce in dete:rmil:Png the f8.-ir market value of .s1,1ch Property on the date of any such
foreclosure. sale. .
Leasellold Covenants . If the interest of Graritoi:s in the Property is a kasehold interest and not a.fee .ownership, then the lien of this
Deed OfT rust shall be 'upon the leasehold rights :illd benefits of Grantors, in D9 event shall any of thy burdens or obligations Ul;lder
said. leasehqld be assumed by, or Qe the obligations of, Belle!iciary abserit an express written instrument, exeCJJted by Beneficiary
such obliga'Qbns, which.sba11 be within the sole discretion of Beneficiary.
To the extint Grantors a in all or any portion of the Property, Grantors hereby covenant and agree as
. .
(a) Grantors wni at all times full)' perform and comply with 'all agreements, covenants, tenns and conditions in1posed upon or
assunied. by"it, as te_nant or le{>see, a.ily. and all leases affecting the Property (collectively, the ''Lease"), true and correct copies of
Page 11 ofl3 DOT-12103.- IBC9004
'.yhich Grantors shall deliver to Beneficiar:t, . .1d that if Grantors shall fail to do so, Beneficia._, ..nay (but shall not be ob1ig!lted to) take
any action Beneficiary deems necessary or desirable to prevent' or to cure any default by Grantors in. the performance of or cOmpliance
with any of Grantor's covenants or obligations under the Lease. Upoil receipt by'Beneficiary frt>m.the landlord of any
written notice of default by Grantors thereUnder; default or any written notice of default, Clrthe nature thereof be questioi:Led or denied
by Graritors or by any party ORand on behalf Of Grantors, Grantors bY exPressly grant to Heneficiazy and agree that Beneficiary
shall have the absolute and immediate right to enter in and upon the leased premises or apy part thereQfthat Bene:fici.Rry deems nee-
. essary or des:iffible in order to prevent or to cure any defatilt by Grantors under the. Lease. Beneficiary maY pay and expend such sums
of money as Beneficiary in its sole discretion deems necessary' for any such purpose, and Grantors hereby agree .to pay to .Beneficiary,
immediately upon demand, all such sums so paid !J.D-d expended by Beneficiary. fill sums so paid and expended by Beneficiary shall
accrue interest at the rates set forth in and be added to and be secured by the lien of this Deed OfTrust.
(b) GrantOrs will not surrender the leasehold estate and teiUrinate of cancel the Lease; and it
will not; without the express.written conSent ofBeneficiary, modify, change, supplement, alter or the Lease eiilier Orally or in
writing. Any such termination, cancellatiori, m0dification, change, supplement, alteration or ame_ndme.nt of the Lease without the prior
written conSent thereto by Beneficiary shall be v.oid and of rlo force and ill further security to B-enefi-ciary, Gralltors shall deposit
with Beneficiary an original of the Lease and all amendments thereto or a thereof, to be retained bj Beneficiary until the
indebtedness secured hereby is fully paid .
. (c) No release or forbearance of any of Grantors-oblig'ations uncle; the Lease, pursuant to the Lease .or otherwise, shall release
Grantors from any of its obligations under this Deed Of Trust, inclUding obligatiOns with' respect to the payment rent as provided
for in the Lease and the performance of all of the tenns, provisions, covenants, conditions a'nd agreements contained in the Lease, to
be kept, performed and complied with by Grantors therein.
(d) Unless Beneficiary shall otherwise expressly consent in writing, the fee title to the propert)r demised by .the Lease and the
leasehold estate shall not merge but shall always remain separate and distinct, notwithstanding the union of said estates either in the
landlord or in the tenant, or in a third party by purchase or otherwise.
(e) If there shall be flied by or against Grantors a petition under the Banlcruptcy 'code, 11 U.S.C. 101 et seq. (the ''Bankruptcy
Code"), and Grantors, as lessee undenhe Lease, shall detennine to reject the L.ease pursuant to Section 365(a) of the Bankruptcy Code,
Grantors shall give Beneficiary not less than thirty (30) days prior notice .of the date on which Grantors shall apply to the Baniauptcy
for authority to reject the Lease. Beneficiary shall have the right, but not the obligation, to serve upon Grantors ;within such ten
day period a notice stating that (i) demands that Grantors assume and. assign the Lease to Beneficiary pursuant to Section
365 of the :Banlauptcy Code and (ii) Beneficiary covenants to cure or provide adequate assurance of prompt cure of all defaults and
provide adequate assurance of future performance under the Lease. If Beneficiary serves upon Grantors the notice described in the
preceding 'sentence, Grantors shall not seek.to reject the Lease and shall comply .,jrith the demanQ.. provided for in the ..clause (i) of the
preceding sentence, within 30 days after the notice shall have been given subjecfto the performance by Beneficiary of the covenant
provided _(or in dause (ii) of the preceding sentence. Further, effective upon the entry of an order for relief in respect of Grantors under
Chapter 7 of the Bankruptcy Code, Grantors hereby assign and transfer to Beneficiary'a non-eXclusive right to apply to the Bankruptcy
Court under Subsection 365(d)(l) of tbe Bankruptcy Code for an order extending the period during which the Lease may be rejected
or assumed, ' .
NO OMLAGREEMENTS
TIDS WRITTEN AGREEMENT REPRESENTS TffE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR CONTEMPORANEOUS. pR SUBSEQUENT ORAL AGREEMENT OF
THE PA:I_tTIES. . .
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
STATE OF TEXAS
COUNTY

(Acknowledgment)
Address
'
This instrument was acknowledged before me on--------'---------,---'-------
by ________________________________
Notary Public, State ofT.exas
My Conubission expires: _______________ _
P11-ge 12 ofl3 DOT-12/03 - IBC9004
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Trust - Alted Ltd. 12.09.2005 Pg 15 of 16 ,';
STATE OF TEXAS
COUNTY OF ___ _

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(AcknOwledgment)
This instrument was aCknowledged before me on---------------------------

STATE OF TEXAS
COUNTY OF

My commission expires:: ________________ _
T.liis instrument was acknowledged before me on December Waitei- Scott Jensen Preident
of Delta Produce Marketing, Inc., a Texas corporation, General partnei(s) on .behalf of
Atled, Ltd., a Texas limited par:tnerShip, on behalf of said , partnership.
STATE OF TEXAS
COUNTY OF ___ _

Notary Publi2t.::f.xas ;!._._,
My conunission expires: __________ _;. _____ _
(Corporation Acknowledgment)
This instrument was acknowledged me on'---------------------------
by ______________________
a ----------------------,-------corporation, on behalf of said corporation,
After return t? at its mailing address, as follow:
Credit Department
130 E. Travis
SanAntoni"o, Texas 78205
Page 13 ofl3 DOT-12/03- IBC9004
EXHIBIT "A"
TRACT 3:
lot 17, Block 3, New City Block A36, Gillis Hood, Unit 2, an addition to the City of
Volume 95.12, Page 91, Deed and Plat Records of Bexar County, Texas, SAVE AND EXCEPT
that portion conveyed to the City of San Antonio in Volume 5202, Page 1204, Official
Public Records of Real Property of Bexar County, Texas.
TRACT 4:
Condominium Unit 104, Bui I ding A, New City Block 16957, Post Oak Condominiums, in the
City of San Antonio, Bexar County, Texas, according to Condominium Declaration
recor9ed in Volume 8, Page 159, and Volume 8, Page 189, Condominium Records Bexar
.County, Texas, together with an undivided 4.52904519 percent interest in the common
elements.
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Agreement - Alted Ltd. - 12.9.2005 Pg 1 of 22
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LOAN AGREEMENT
This Loan Agreement ("Agreement") is entered into to be effective the ..5__day of December,
2005 by and between International Bank of Commerce, a Texas banking association ("Lender"),
whose address is 130 E. Travis, San Antonio, Texas 78205, and Atled, Ltd., a Texas limited
partnership ("Borrower"), whose address is 2001 S. Laredo Street .. San Antonio, Texas 78207.
I.
WITNESSETH:
Lender has agreed to make a loan (the "Loan") to Borrower pursuant to the following Real
Estate Lien Notes dated of even date herewith executed by Borrower and payable to the ordei
ofLender in the original principal suru of One Million Three Hundred Thousand and 00/100
Dollars ($1,300,000.00) (the ''Note"). Such Loan shall be used by Borrower to refinance
various indebtedness of Borrower.
2. The Loan shall be evidenced by that certain Real Estate Lien Note of even date herewith
("Note") in the amount of the Loan executed by Borrower and payable to the orderofLender.
Repayment of the Loan and performance of all other obligations of Borrower to Lender in
connection with the Loan shall be governed by the Note and this Agreement, and shall be
in part by: (i) the Deed ofTrust (as defmed herein) covering the Property (as defined
herein) and (ii) the Assigrnnent of Leases and Rents (as defined herein).
Therefore, in consideration of the mutual covenants, agreements and undertakings herein
Lender and Borrower hereby agree as follows:
ARTICLE!
DEFINITIONS
For purposes ofthls Loan Agreement, the following terms shall have the respective meanings
assigned to them.
1.1 Caslt Flow. The term "Cash Flow" shall mean Borrower's net income, as detennined
in accordance with GAAP (as defined herein), after payment of: (i) applicable taxes to Governmental
Authorities (as defined herein) and (ii) all debt service payments of Borrower.
1.2 Closing Date. The term "Closing Date" shall mean the date upon which the initial
Loan proceeds are advanced to Borrower.
1.3 Code. The term "Code" shall mean the Texas Business and Commerce Code.
1.4 Commitment. The term "Commitment
11
shall mean the Commitment Letter, if any,
from Lender to Borrower, such Commitment being incorporated herein by this reference for all
putposes.
1.5 Debtor Relief Laws. The term "Debtor Relief Laws" shall mean any applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement, insolvency, reorganization,
or laws affecting the rights or remedies of creditors generally, as in effect from time to time.
1.6 Deed of Trust. The term "Deed of Trust" shall collectively mean the following: (i)
those (2) certain Deeds of Trust, Assigrnnent of Rents, Security Agreement and Financing
Statements of even date herewith executed by Borrower and Staci Properties, Ltd., a Texas limited
partnership covering certain real property described on Exhibit "A" attached hereto.
1.7 Event of Default. The term
11
Event of Default'.
1
shall mean the occurrence or
happening, at any time and from time to time, of any one or more of the following:
I. 7 .I Pavment of Indebtedness. If any ofthe Indebtedness is not paid when due,
whether by acceleration or othenvise .
1.8.2 Performance of Obligations. If any of the Obligations (as defined herein) are
not fully and timely performed and discharged as .and when required .
1.7.3 False Representation. If any representation or warranty made by Borrower
under or purSU\ffit to the Loan Docuruents or any other docuruents delivered to Lender in connection
therewith shall be false, erroneous or misleading in any material respect when made.
1.7.4 Judgment. If any fmal money judgment shall be rendered against Borrower
or any party liable to pay any part of the Indebtedness and the same shall not be paid or execution
on the same shall not be stayed by perfection of an appeal or other appropriate action within sixty
(60) days of the rendering of any such final money judgment.
1.7.5 Voluntary Bankruptcy. If Borrower or any party liable to pay any part of the .
Indebtedness shall (i) seek entry of an <>rder for relief as a debtor and a proceeding under the
Bankruptcy Code, (ii) seek, consent to or not contest the appointment of a receiver or trustee for
itself or himself or for all or any part of its or his property, (iii) file a petition seeking relief under the
bankruptcy, arrangement, reorganization or other debtorrelieflaws of the United States or any state
or any other competent jurisdiction, (iv) make a general assigmnent for the benefit of its or his
creditors, or (v) admit in writing its or his inability to pay its or his debts as they mature.
I. 7.6 InvoluntarvBankruptcy. If(i) a petition is filed against Borrower or any party
liable to pay any part of the Indebtedness seeking relief under the bankruptcy, arrangement,
reorganization or other debtor relief laws of the United Siates or any state or other competent
jurisdiction, or (ii) a court of competent jurisdiction enters an order,judgment or decree appointment,
without the consent of Borrower or any party liable to pay Indebtedness, a receiver or trustee for it
or him, or for all or any part ofits or his property, and (iii) such petition, order, judgment or decree
shall not be and remain discharged or stayed within a period of sixty (60) days after its entry.
1.7.7 Existence of Other Liens. If, at any time during the term of the Loan, there
is placed upon the Property, or the Property is made subject to, any lien or security interest other than
the liens and security interests securing the Loan, except for liens which Borrower is contesting in
good faith and which have been bonded or otherwise secured to the reasonable satisfaction of
Lender.
1.7.8 Sale. Lease or Other Transfer. Any sale, exchange, assigmnent, conveyance,
transfer of possession or other disposition of the Property or the Project or any interest therein or any
part thereof by Borrower to any party whatsoever.
1.7.9 Change of Ownership. Any involuntary change in controlling OWJ)ership of
the Property, in whole or in part, excluding minor condemnation, or any change in the owne.rsbip of
Borrower, other than is provided in Section 1.7.11 herein.
1. 7 .I 0 Title and Lien Prioritv. If title ofBorrower (as applicable) to any or all of the
Property shalliJe challenged or endangered by any party whatsoever, and Borrower shall fail to cure
the same in accordance with Section 1.7.2 hereof.
1.7.11 Transfer of Interest. The transfer, sale or assigmnent of any interest in
Borrower.
1.7.12 Other Defaults. The occirrrence of any Event of Default, as defined or
described in (a) any of the other Loan Documents, or (b) any instrument evidencing, securing or
pertaining to any indebtedness which is also secured by any part of the Property.
1.7.13 Levv on Assets. A levy on any of the assets of Borrower or any surety,
endorser of the Indebtedness.
1.8 Financial Statements. The term
11
Financial Statements
11
shall mean balance sheets,
profit and loss statements, reconciliations of capital and surplus, statement of cash flow, operating
statements with respect to the Property, a schedule of contingent liabilities, and other fmancial
information ,of Borrower, Guarantor (as defined herein) or the Project requested by Lender.
1.9 FLxtures. The term
11
Fixtures
11
shall mean all of Borrower's materials, supplies,
equipment, apparatus and other items now or hereafter attached to, installed on or in the Land or the
improvements, or which in some fashion are deemed to be fixtures to the Land or Improvements
2
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under the laws of the State of Texas, including the Texas Business and Commerce Code. The term
"Fixtures" shall include, without limitation, all items of personalty to the extent that the same may
be deemed Fixtures under applicable law.
1.10 Generally Accepted Accounting Principles Cor ''GAAP''), The term
11
GAAP
11
shall
mean those principles and practices (a) which are recognized as such by the Financial Accounting
Standards Board, (b) which are applied for all periods after the date of this Agreement in a manner
consistent with the manner in which such principles and practices were applied to the most recent
fmancial statements of the relevant entity or individual furnished to Lender, and (c) which are
consistently applied for all periods after the date hereof so as to reflect properly the financial
condition, and results of operations and changes in financial positions, of suCh entity or individual.
If a change in any accounting principle or practice is implemented by the Financial Accounting
Standards Board, then all reports and financial statements required hereunder may be prepared in
accordance with such change only after written notice of such change ~ s given to Lender.
1.11 Governmental Authority. The term "Governmental Authority" shall mean the
United States, the state, the county, the city, or any other political subdivision in which the Property
is located, and any other political subdivision, agency, or instnunentality exercisingjurisdiction over
Borrower or the Property.
1.12 Governmental Requirements. The term
11
Govenunental Requirements
11
shall mean
all laws, ordinances, rules and regulations of any Goverrunental Authority applicable to Borrower
or the Property.
1.13 Guarantor. The term "Guarantor" shall mean Walter Scott Jensen, Delta Produce,
L.P., a Texas limited partnership, and Staci Pi-educe, Ltd., a Texas limited partnership.
1.14 Highest Lawful Rate. The term "Highest Lawful Rate" shall mean the maximum
nonusurious rate of interest permitted to be charged by applicable federal or Texas law (whichever
shall permit the higher lawful rate) from time to time in effect. At all times, if any, as Chapter One
of the Texas Credit Code as in effect as of the date of this Agreement ("Chapter One") shall establish
the Highest Lawful Rate, the Highest Lawful.Rate shall be the "indicated rate ceiling" (as defined
in Chapter One) from time to time in effect. If the obligation is an open-end account, Lender may
from time to time, as to then"current and future balances, implement any other ceiling under Chapter
One and/or revise the index, forinula or provision a flaw used to compute the rate on such obligation,
if and to the extent permitted by, and in the manner provided in, Chapter One.
1.15 Improvements. The term "Improvements" shall mean any and all buildings,
structures, and other improvements, and any and all accessions, additions, replacements, .
substitutions or alterations thereof or appurtenances thereto, now or at any time hereafter situated,
placed or constructed upon the Land or any part thereof.
1.16 Indebtedness. The term
11
lndebtedness
11
shall mean the principal of, interest on and
all other amounts and payments due under the Note or secured by the other Loan Documents,
together with all funds hereafter advanced by Lender to or for the benefit of Borrower as
contemplated by any covenant or provision herein contained.
1.17 Insurance Policies. Insurance policies for (i) worker's compensation insurance for
statutory limits; (ii) comprehensive general liability insurance for owners and contractors; (iii) hazard
insurance against all risk of loss, including collapse, in an amount equal to no less than the full
replacement cost of all Improvements, including the cost of debris removal, with annual agreed
amount endorsement and sufficient at all times to prevent Borrower from becoming a cow insurer,
such insurance prior to completion of the Project to be in Builder's Risk form on a non-reporting
basis and iflcluding coverage for all materials and equipment, wherever located, installed in or
utilized in the construction of the Project; (iv) if the Property is in a "flood hazard area", a flood
insurance policy, or binder therefore, in an amount equal to the maximum Loan Amount, or the
maximum available under the Flood Disaster Protection Act of 1973; and (v) such other insurance,
if ahy, as Lender may reasonably require from time to time, including but not limited to rent and
rental value insurance .for a period of six (6) months. All insurance policies shall (i) be issued by
companies, in amounts and on forms reasonably satisfactory to Lender, (ii) have Borrower as the
insured, and (iii) have a provision giving Lender at least thirty (30) days prior notice of, and as a
3
condition to, cancellation or material change of the coverage. All hazard Insurance policies shall
contain a standard mortgagee's endorsement in favor ofLender and shall name Lender as Joss payee.
1.18 Land. The term "Land" shall mean the real property described on Exhibit "A"
attached hereto and incorporated herein by reference.
1.19 Legal Requirements. The term "Legal Requirements" shall mean (a) any and all
present and future judicial decisions, statutes, rulings, rules, regulations, pennits, certificates or
ordinances of any Governmental Authority in any way applicable to Borrower or the Property,
including, but not limited to those respecting the ovmership, use, occupancy, possession, operation,
maintenance, alteration, repair or reconstruction of the Property,(b) any and all Leases and other
contracts (written or oral) of any nature to which Borrower may be bound, and (c) any and all
restrictions, reservations, conditions, easements or other covenants or agreements of record affecting
the Property.
1.20 Lender. The term "Lender" shall mean Jntemati
0
na! Bank of Commerce.
1.21 Liabilities. The term "Liabilities" shall mean (a) all items which in accordance with.
GAAP would be included on the liability side of a balance sheet on the date as of which Liabilities
is to be determined (excluding capital stock, surplus, suiplus reserves and deferred credits), (b) all
guaranties, endorsements and other contingent obligations in respect of, or any obligations to
purchase or otherwise acquire, indebteduess of others, and (c) all indebteduess secured by any lien
existing on the Property whether or not the indebteduess secured thereby shall have been assumed
by Borrower; provided, that such term shall not mean or include any indebteduess in respect of
which monies sufficient to pay and discharge the same in full (either on the expressed date of
maturity thereof or on such earlier date as such indebteduess may be duly called forredemption and
payment) shall be deposited with a depository, agency or trustee acceptable to Lender in trust for the
payment thereof and which mqnies are not reflected as current assets of Borrower on its Financial
Statements.
1.22 Loan. The term
11
Loan
11
shall mean the Loan by Lender to Borrower, in an amount
not to exceed the principal sum set forth in the first paragraph of this Loan Agreement.
J.23 Loan Documents. The term
11
LoanDocuments
11
shall mean this Agreement; the Deed
of Trust, the Note, that certain Assignment of Leases and Rents of even date herewith C'Assignment
of Rents") executed by Borrower in favor of Lender covering the Property and such oiher
inshuments evidencing, securing, or pertaining to the Loan as shall, from tllpe to time, be executed
and delivered by Borrower or any other party to Lender pursuant to this Agreement.
1.24 Note. The term "Note" shall mean the $1,300,000.00 Note.
1.25 Obligations. The term "Obligations" shall mean any and all of the covenants,
warranties, representations and other obligations (other than to repay the Jndebteduess) made or
undertaken by Borrower or others to Lender or others as set forth in the. Loan Documents.
1.26 Personalty. The term "Personalty" shall mean all ofthe right, title and interest of
Borrower in and to all tangible and intangible personal property, including all equipment, inventory,
goods, consumer goods, accounts, chattel paper, instruments, money, general intangibles, documents,
minerals, crops and timber (as those terms are deflned in the Texas Business ap.d Commerce Code)
which is attached to, installed on or placed or used on, in connection with or is acquired for such
attachment, installations, placement or use, or which arises out of the development, improvement,
fmancing, leasing, operation or use of the L3nd, the Improvements, Fixtures or other goods located
on the Land or Improvements, together with all additions, accessions, accessories, amendments and
modifications thereto, extensions, renewals, enlargements ind proceeds thereof, substitutions
therefor, and income and profits therefrom. The following are included, without limitation, in the
definition of Personalty: furnishings, building materials, supplies, machines, engines, boilers,
stokers, pumps, fansl vents, blowers, dynamos, furnaces, elevators, ducts, shafts, pipes, furniture
cabinets, shades, blinds, screens, plumbing, heating, air conditioning, lighting, lifting, ventilating,
refrigerating, cooking, medical, laundry and incinerating equipment; partitions, drapes, carpets, rugs
and other floor coverings, awnings, call and sprinkler systems, fire prevention and extinguishing
apparatus and equipment, water tanks, swimming pools, compressors, vacuum cleaning systems,
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disposals, .dishwashers, ranges, ovens, kitchen equipment, cafeteria equipment, recreational
equipment, loan commitments, financing arrangements, bonds, construction contracts, leases,.
licenses, pennits, sales contracts, insurance policies and the proceeds therefrom, plans and
specifications, surveys, rent rolls, books and records, funds, bank deposits and all other intangible
personal property.
1.27 Propertv. The term
11
Propertyu shall mean the Land, Improvements, Fixtures,
Personalty and all other property constituting the "Property", as described in the Deed of Trust and
the collateral described in the Loan Documents, including:
1.27 .1 all rights, privileges, tenements, hereditaments, rights-of-way, easements,
appendages and appurtenances in anywise appertaining thereto, and all right, title and interest of
Borrower in and to any street, ways, alleys, strips or gores of land adjoining the Land or any part
thereof;
1.27 .2 all betterments, accessions, additions, appurtenances, substitutions,
replacements and revisions thereof and thereto and all reversions and remainders therein;
1.27.3 all of Borrower's title and interest in and to any award, remuneration,
settlement or compensation heretofo.re made or hereafter to be made by any Goverrunental Authority
to Borrower, including those for any vacation of, or change of grade in, any streets affecting the Land
or the Improvements;
1.27.4 all of Borrower's rights to all plans and specifications for the Improvements;
all contracts and subcontracts relating to the Improvements, all deposits (including tenant security
deposits) funds, accounts, contract rights, instruments, documents, general intangibles (including
trademarks, service marks, trade names and symbols to the extent used in connection with the
Improvements but specifically excluding any other use of trademarks, service marks, trade names
or symbols of Borrower), and notes or chattel paper arising from or by virtue of any transactions
related to the property described herein; all permits, licenses, franchises, certificates, and other rights
and privileges obtained in connection with the property described herein; all proceeds arising from
or by virtue ofthe sale, lease or other disposition of all or any part of the Property (consent to same
not granted or to be Implied hereby); all proceeds (including premium refunds) payable to or to be
payable under each policy of insurance relating to the Property;
!.27.5 all other interest of every kind and character which Borrower now has or at
any time hereafter acquires in and to the above described real and personal property and all property
which is used or useful in connection therewith, including rights of ingress and egress, easements,
licenses, and all reversionary rights or interests of Borrower with respect to such property. To the
extent permitted by law, all of the foregoing Personal Property and Fixtures are to be deemed and
held to be a part of and affixed to the real property;
!.27.6 any and all other security and collateral of any nature whatsoever, now or
hereafter given for the repayment of the Indebtedness or the performance and discharge of the
Obligations.
As used in this Loan Agreement, the term
11
Property
11
is expressly defined as meaning
ail or, where the context pennits or requires, any portion of the above and all or, where the context
pennits or requires, any interest therein.
1.28 Title Company. The term
1
Title Company
11
shall mean Chicago Title Insurance
Company.
1.29 Title Insurance. The term "Title Insurance" shall mean a TLTA Mortgagee's Policy
Binder on Interim Construction Loan or, if requested by Lender, TLTA mortgagee policy of title
insurance effective as of the Closing Date in the amount of the Loan insuring that the Deed of Trust
constitutes a valid first lien covering the Property, subject only to those exceptions and
encumbrances which Lender may approve, with such endorsements as Lender may request, issued
by the Title Company.
1.30 Additional Rules of Construction. Unless the context otherwise requires:
5
-- -
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1.30.1 a term has the meaning assigned to it;
1.30.2 an accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
1.30.3
11
0r
11
is not exclusive;
I .30.4 words in the singular include the plural, and in the plural include the singular;
and
1.30.5 provisions apply to successive events and transactions.
ARTICLE2
AGREEMENT OF LENDER
2.1 Commitment ofLender. Subject to the terms and conditions hereof, Lender hereby
agrees to make the Loan to Borrower provided that: (a) Borrower has satisfied all of the covenants
and conditions of this Loan Agreement; (b) no Event of Default exists; and (c) Borrower pays to
Lender as of the Closing Date a corrunitruent fee equal to Two Thousand and 00/100 Dollars
($2,000.00). Borrower's obligation to repay the Loan shall be evidenced by that certain Real Estate
Lien Note substantially in the form of Exhibit "B" attached hereto. The Loan shall be payable as
provided in the Real Estate Lien/Promissory Notes attached as Exhibit "B" hereto.
2.2 Initial Advance ofLoan. Lender shall not be obligated to make (he initial advance
of the $1,300,000.00 Note to Borrower until Lender is in receipt of the following, all in form and
substance satisfactory to Lender:
2.2.1 this Agreement duly executed by Borrower and Lender;
2.2.2 the $1,300,000.00 Note executed by Borrower;
2.2.3 a copy of the Deed of Trust executed by Borrower and certified by the Title
Company as having been recorded covering the Property and all improvements thereon whethernow
existing or hereafter constructed, and securing the obligations ofBorrower hereunder and under all
documents executed in connection with the Loan;
2.2.4 all of the other Loan Documents duly executed by the appropriate parties;
2.2.5 the Insurance Policies;
2.2.6 the Title Insurance;
2.2.7 evidence satisfactory to Lender that Borrower is duly qualified, in existence
and in good standing under the laws of the jurisdiction of its formation;
2.2.8 evidence satisfactory to Lender that Borrower is fully authorized and
permitted to enter into this Agreement, the Note, the Deed of Trust and the other Loan Documents,
that this Agreement, the Note, the Deed ofTrust and the Loan Documents are valid and binding legal
obligations ofBorrower, enforceable in accordance with their tenns, and that the persons executing
such documents on behalf ofBorrower have the authority to execute all of the same for and on behalf
of the Borrower;
2.2.9 Lender's approval of a phase I environmental site assessment on the Property
to be obtained at the sole cost and expense of Borrower;
2.2.1 0 Such other documents and Information as may be required by Lender which
are reasonable by prudent lending standards; and
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2.2.11 The further condition that, at the Closing Date, all legal matters and Loan
Documents incident to the transactions herein contemplated shall be reasonably acceptable to Lender
and Stumpf Craddock Massey & Farrimonil, P.C., legal COW1Sel to Lender.
2.3 Lender's Obligations. Lender has no liability, obligation or responsibility
with respect to the conditiOn of the Improvements except to advance the proceeds of the
Loan as herein agreed. Lender or other agent has the right but is not obligated to inspect the Project.
Nothing, including without limitation any disbursement made hereunder or the depo:sit or acceptance
of any document or instrument, shall be construed as a representation or warranty, expressed or
implied, on the part of Lender .
2.4 Interest on the Loan. Interest provided in the Note shali be calculated on sums
actually advanced to Borrower pursuant to the terms of this Agreement. Borrower's liability for
payment of principal and interest provided in the Note shall be limited to principal amounts actually
advanced to or for the benefit ofBorrower pursuant to tllis Agreement and interest on such amounts
calculated as aforesaid. Interest on the Note shall be calculated on a 360-day factor applied on a 365-
day year, or a-366-day year, in the event that the year is a leap year.
2.5 Security for the Loan. The Note and Loan will be secured by (i) a frrst and prior lien
on the Property, (ii) a frrst and prior lien and security interest on Borrower's interest in all equipment,
furnishings, inventory and articles of personal property now or hereafter used in, on, under or about
the Property, instruments, documents and general intangibles, and notes or chattel paper arising from
or by virtue of any transaction related to the Property or the hnprovements, (iii) all proceeds from
the collateral described above, (iv) all insurance policies relating in whole or in part to any of the
foregoing, (v) all substitutions for and replacements of and all additions and accessions to any of the
foregoing, (vi) all guaranties and security for any of the foregoing, (vii) all the rights, title and
interest of Borrower in and to all books and records relating in whole or in part to any of the
foregoing, and (viii) the assigument of all rents and leases pertaining to the Property pursuant to the
terms of the Assigument of Leases and Rents of even date herewith executed by Borrower in favor
of Lender ("Assigument of Leases and Rents").
ARTICLE3
REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower hereby unconditionally represents and warrants to Lender as
3.1 Organization and Authority of Borrower. Borrower are duly organized, validly
existing and in good standing under the applicable laws of the State of Texas and is qualified to do
business in the State of Texas, with full power and authority to enter into this Agreement.
3.2 Execution and Deliverv of Loan Documents, The execution and delivery of the
Loan Documents executed or delivered or to be executed or delivered by Borrower and the
consummation of the transactions contemplated thereby: (a) are within Borrower's powers and have
been and will be duly authorized and all other requisite action has been taken, and (b) to the best of
Borrower's knowledge, without duty of independent investigation, will not violate, be in conflict
with, result in a breach of or constitute (with due notice or lapse of time, or both) a default under any
Legal Requirement or result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever .upon any of Borrower's property or assets, except as contemplated by the
provisions of the Loan Documents. The Loan Documents constitute the legal, valid and binding
obligations of Borrower and others obligated under the terms of the Loan Documents, in accordance
with their respective terms, and Borrower has full and lawful authority to bargain, grant, sell,
mortgage, assign, transfer and convey all of the Property as set forth in the Deed of Trust.
3.3 information Supplied by Borrower. All information, reports, papers and data given
to Lender by Borrower or its authorized agents with respect to Borrower or others obligated under
the terms of the Loan Documents or the Property are accurate, complete and correct in all material
respects and do not omit any fact the inclusion of which is necessary to prevent the facts contained
therein from being materially misleading. In addition, Borrower's Financial Statements heretofore
7
delivered to Lender, taken as a whole, are true, complete and correct in all material respects, have
been prepared in accordance with generally accepted accounting principles consistently applied, and
fairly present the respective financial conditions and results of operation of the subjects thereof as
of the respective dates thereof, taken as a whole. No material adverse change has occurred since the
respective dates thereof and no material borrowings have been made by Borrower since the date
thereof other than the borrowings contemplated hereby or approved in writing by Lender.
3.4 Conmliance with Laws. The use of the Property and Improvements comply with
all applicable zoning ordinances and restrictive covenants affecting the Property and Improvements
and all other Legal Requirements.
3,5 Licenses and Pennits. Borrower has obtained from each Governmental Authority
all licenses, :pennits, authorizations, consents and approvals necessary for the use of the Property.
3.6 No Defaults. Borroweris not in default under any of the Loan Docwnents, and no
event has occurred which by notice, the passage oftime or othenvise would constitute an Event of
Default under any of the Loan Documents. Borrower is not in default in the payment of any
indebtedness for borrowed money or under the terms and provisions of any agreement or instrument
evidencing any such indebtedoess. To the best ofBorrower's knowledge, Borrower is not in default
with respect to any order, writ, injunction, decree or demand of any court or of any otherrequirement
of a Goverrunental Authority.
3.7 Liens on the Property. Borrower has not made any contract or arrangement of any
kind, which has given rise to (or the performance of which by the other party thereto would give rise
to) a lien or claim oflien on the Property or other collateral covered by the Loan Documents.
3.8 Complete Information. To the best of Borrower's knowledge, no representation or
warranty QfBorrower contained in any of the Loan Documents, and no statement contained in ?flY
certificate, schedule, list, fmancial statement or other instrwnent furnished to Lender by or on behalf
of Borrower contains, or will contain, any untrue statement of a nlaterial fact, or omits, or will omit,
to state a material fact necessary to make the statements contained herein or therein not misleading.
3.9 Payment of Taxes. Borrower has filed all federal, state, county, municipal and city
income and other tax returns and reports required to have been filed by Borrower, and has paid all
taxes w ~ c h have become due pursuant to such returns or pursuant to any assessments received by
them, and Borrower does not know of any basis for any additional assessment in respect of any such
taxes. Borrower has paid or will pay in full all sums lawfully owing or claimed for labor, material,
supplies, personal property (whether or not constituting a Fixture hereunder) and services of every
kind and character used, furnished or installed in the Property and no claim for same currently exists
o.r will be permitted to become past due.
3.10 Legal Proceedings. There are no material actions, suits, or proceedings pending or,
to Borrower's kno\vledge, without any duty of independent investigation, threatened in any court or
before or by any Goverrunental Authority against or affecting Borrower, or the Property, or involving
the validity, enforceability, or priority of any of the Loan Documents, atlaw or in equity.
3.11 Title to the Property. Borrower lave good and indefeasible titieto the Land and the
Property, free and clear of any liens, charges
1
encumbrances, security interests and adverse claims
whatsoever, subject only to the exceptions and encumbrances set forth in the Title Insurance.
The representations alld warranties contained in this Article ill shall survive until such time
as Bo11ower has repaid the Loan in full.
ARTICLE4
Borrower hereby covenants and agrees with Lender that it will do, and if necessary will cause
to be done, or arrange to be done, each and all ofthe following:
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4.1 Compliance with Governmental Requirements. Borrower shall timely comply
with all Goverrnnental Requirements and deliver to Lender evidence thereof. Borrower assumes full
responsibility for the compliance of the Property with all Goverrnnental Requirements and with
sound building and engineering practices and, notwithstanding any approvals by Lender, Lender shall
have no obligations or responsibility whatsoever for any matter incident to the Property.
4.2 Taxes, Existence. Regulations and Property. Borrower shall at all times (i) pay
when due all taxes and goverrnnental charges of every kind upon it or against its income, profits, the
Property or the Project; (ii) do all things necessary to preserve its qualifications, rights and franchises
in all jurisdictions where such qualification is necessary and/or desirable; (iii) comply with all
applicable Legal Requirements with respect to the conduct of its business and the ownership of the
Property and the Project; (iv) cause the Property to be protected, maintained and kept in good repair
and make all replacements and additions to its property as may be reasonably necessary to conduct
its business properly and efficiently; and (v) provide Lender within thirty (30) days following the due
date thereof with tax certificates or other evidence satisfactory to Lender demonstrating that all taxes
attributable to the Property and Project have been paid when due .
4.3 Correction of Defects and Encroachments. Borrower shall correct or cause to be
corrected (a) any material defect inthe Improvements, and (b) any encroachment by any part ofthe
materiallmprovements or any other structure located on the Property on any building set-backline .
4.4 Inspection of the Property. Borrower shall permit Lender, any Goverrnnental
Authority, and their agents and representatives, to enter upon the Property for the purpose of
inspection of the Property at all reasonable tiroes.
4.5 Notices by Governmental Authorities: Notice of Fire and Casualty Losses .
Borrower shall tiroely comply with and promptly furnish to Lender true and complete copies of any
official notice or claim by any Goverrnnental Authority pertaining to the Property. Borrower shall
promptly notify Lender of any fire or other casualty or any notice of taking or eminent domain action
. or proceeding affecting the Property.
4.6 Costs and Expenses. Borrower shall pay when due all reasonable costs and expenses
required by this Loan Agreement, including, without limitation, (a) all taxes and assessments
applicable to the Property, (b) all fees for filing or recording the Loan Documents, (c) all fees and
commissions lawfully due to brokers, salesmen, and agents in c01mection with the LOan or the
Property pursuant to agreements by or on behalf of Borrower, (d) all reasonable fees and expenses
of counsel to Lender, (e) all title insurance and title examination charges, including premiums for
the Title Insurance, (f) all survey costs and expenses, including the cost of the Survey, (g) all
premiums for the Insurance incurred by Lender in connection with the consummation of the
transactions contemplated by this Loan Agreement, and (h) all appraisal fees for appraisal of all or
any portion of the Property.
4.7 Additional Acts. In addition to the acts required herein and contemplated to be
performed, executed and/or delivered by Borrower, Borrower hereby agrees, at any time, and from
time to tlme, to perform, execute and/or deliver to Lender, any and all such further acts, additional
instrwnents, or further assurances otherwise consistent with the Loan Documents as Lender may
determine to be, in its reasonable discretion, necessary or proper.
4.8 Inspection of Books. Records and Assets. Borrower shall at all tiroes keep proper
books and records in a manner reasonably satisfactory to Lender and in accordance viith GAAP, and
shall permit Lender, at all reasonable tiroes, to examine and copy such books and records .
4.9 No Liability ofLender. Lender shall have no liability, obligation, or responsibility
whatsoever with respect to the operation of the 4Jtprovements except to advance the Loan as stated
herein.
4.10 Defense of Actions. After providing Borrower notice thereof, Lender may (but shall
not be obligated to) commence, appear in, or defend any action or proceeding purporting to affect
the Loan, the Property, or the respective rights and obligations of Lender and Borrower pursuant to
this Loan Agreement. Lender may (but shall not be obligated to) pay all necessary expenses,
9
including reasonable attorneys' fees and expenses incurred in connection with such proceedings or
actions, which Borrower agrees to repay to Lender upon demand.
4.11 Prohibition on Assignment. Borrower shall not assign or encumber any interest of
Borrower herennder nor sell, transfer or convey the Property or any part thereof without the prior
written consent ofLender, which consent shall be given or withheld in the sole discretion ofLender.
4.12 Payment of Claims. Borrower shall promptly pay or cause to be paid when due all
costs and expenses incurred in connection with the Property and the operation of the Improvements,
and Borrower shall keep the Property free and clear of any liens, charges, or claims other than the
lien of the Deed of Trust and other liens approved in writing by Lender and liens then being
contested by Borrower as herein permitted.
4.13 Restrictions and Encumbrances, Borrower shall not impose any restrictive
covenants or encumbrances upon the Property without Lender's prior written consent, which consent
shall be given or withheld in the sole discretion of Lender.
4.14 Insurance. Borrower shall obtain and maintain insurance upon and relating to the
Property in accordance with the provisions of Section 1.18 of this Loan Agreement. In case ofloss,
Lender, at its option, shall be entitled to receive and retain the proceeds of the Insurance Policies,
applying the same upon the Indebtedness secured hereby; provided, however, that Lender will, if
requested to do so by Borrower, make the proceeds of such insurance available, in accordance with
the provisions of the Deed of Trust, to Borrower to repair or reconstruct the Project if the Loan is
not then in default. Lender shall have the right, but not the obligation, to make. premium payments,
at Borrower's expense, to prevent any cancellation, endorsement, alteration or reissuance, and such
payments shall be accepted by the insurer to prevent same.
4.15 Securitv. Borrower acknowledges and agrees that the Note and the Loan shall be
secirred by a first and prior security interest in the items of security as describd in the Loan
Documents including, without limitation, the Assignment of Leases and Rents and the Deed ofT rust.
4.16 Mergers. Consolidation and Dispositions and Acquisitions of Assets. Borrower
shall not, in any single transaction or series of transactions, directly or indirectly: (a) liquidate or
dissolve; (b) be a party to any merger or consolidation; (c) sell, convey or lease all or any substantial
part of its assets; or (d) acquire all or substantially all of the assets of any individual or entity, or any
shares of stock or similar interest in any other entity.
4.17 Cash Flow Recapture. At all times during the term oftlle Note, Borrower shall, on
a monthly basis, apply seventy-live percent (75.0%) of all Cash Flow toward the payment obligations
of Borrower under the Note.
4.18 Financial Statements. Borrower shall provide to Lender: (i) copies of Borrower's
annual Financial Statements on or before ninety (90) calendar days following the end of each fiscal
year during the term of the Note; (ii) cause Guarantor to provide copies Of its Financial Statements
on or before ninety (90) calendar days following the end of each calendar year; (iii) copies of
Borrower's and Guarantor's federal income tax returns on or before thirty (30) calendar days
following the Iiling of such returns; and (iv) such other financial information and data ofBorrower,
and/or Guarantor as Lender may request.
ARTICLES
5.1. Rights of Lender.
5.1.1 Upon the occurrence of an Event of Default and during the continuation
thereof, Lender shall have the right, but not the obligation, in addition to any other right or remedy
of Lender, in its own name or in the name of Borrower, to enter into possession of the Property, and
to employ wa(chmen and other safegurnds to protect the Property.
10
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5.1.2 Moreover, upon the occurrence of an Event of Default and during the
continuation there_of, Lender may exercise its right of offset against each account and all other
Property and/or Collateral of Borrower in the possession of Lender, which right is hereby granted
by Borrower to Lender.
5.1.3 Borrower hereby irrevocably appoints Lender as Borrower's attomey-in-fac4
with full power of substitution, and in the name of Borrower, if Lender elects to do so, upon the
occurrence of an Event of Default and during the continuation thereof, to (i) endorse the name of
Borrower on any checks or drafts representing proceeds of the Insurance policies or instnnnents
payable to Borrower with respect to the Property, (ii) prosecute or defend any action or proceeding
incident to the Property, and (iii) perform or cause to be performed any and all work and labor
necessary to complete the Improvements in accordance with the Plans and Specifications. Lender
shall have no obligation to undertake any of the foregoing actions, and if Lender should do so, it
shall have no liability to Borrower for the sufficiency or adequacy of any such actions taken by
Lender.
5.2 Acceleration. Upon the occurrence of an Event of Default and during the
continuation thereof, Lender may, at its option, declare the Loan immediately due and payable
without notice of any kind.
5.3 Cessation of Lender's Obligations. Upon the occurrence of an Event of Default
and during the continuation thereof, all obligations ofLender hereunder shall, at Lender's option, be
inunediately suspended.
5.4 Funds of Lender. Any funds of Lender used for any purpose referred to in this
Article 5 shall constitute advances secured by the Loan Documents and shall bear interest at the rate
specified in the Note to be applicable after default thereunder.
hereunder, in the Loan Documents, or otherwise, shall be considered a waiver of any other or
subsequent right or remedy ofLender; no delay or omission in the exercise or enforcement by Lender
of any or remedies shall ever be construed as a waiver of any right or remedy of Lender; and
no exercise or enforcement of any such rights or remedies shall ever be held to exhaust any right or
remedy of Lender.
ARTICLE6
MISCELLANEOUS
6.1 Notices, All notices, demands, requests, 8nd other communications required or
permitted hereunder shall be in writing and shall be deemed to have been given when presented by
hand delivery, facsimile, overnight delivery or deposited in a regularly maintained receptacle for the
United States P.ostal Service, postage prepaid, registered or certified, return receipt requested,
addressed to Borrower or Lender, as the case may be, at the respective addresses set forth on the fust
page of this Loan Agreement, or such other address as Borrower or Lender may from time to time
designate by written notice to the other as herein required. Notice deposited in the mail in the
manner herein above described shall be effective, wliess otherwise stated in this Agreement, on the
date on which it is received or attempted to be delivered. Notice given in any other manner shall be
effective only if and when received by the party to be notified.
6.2 Modifications. No provision of this Loan Agreement or the other Loan Documents
may be modified, waived, or terminated except by instnnnent in writing executed by the party
against whom a modification, waiver, or termination is sought to be enforced.
6.3 Severability. In case any of the provisions of the Loan Agreement shall for any
reason be held to be invalid, illegal, or unenforceable, such invalidity, illegality, orunenforceability
shall not affect any other provision hereof, and this Loan Agreement shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained herein .
6.4 Election of Remedies. Lender shall have all of the rights and remedies granted in
the Loan Documents and available at law or in equity, and these same rights and remedies shall be
11
cumulative and may be pursued separately, successively, or concurrently against Borrower, or any
property governed under the Loan Documents at the sole discretion of Lender. The exercise of, or
failure to exercise, any of the same shall not constitute a waiver or release thereof or of any other
right or remedy, and the same shall be
6.5 Controlling Agreement. All agreements between Borrower and Lender, whether
now existing or hereafter arising and whether written or oral, are hereby limited so that in no event
shall the interest paid, or agreed to be paid, to Lender for the use, forbearance, or detention of the
money to be loaned pursuant to this Loan Agreement, or for the performance or payment of any
covenant or obligation contained herein, exceed the maximum amount permissible under applicable
law. In the event the maturity of the Note is accelerated by the holder thereof for any reason, or in
the event of voluntary prepayment by Borrower, then earned interest may never include more than
the maximum amount permissible under applicable law, computed from the date of eacli advance
of Loan proceeds until maturity or prepayment, and any unearned interest in excess of the maximum
amount permissible under applicable law shall be canceled automatically and, if theretofore paid,
shall be refunded to Borrower or credited on the principal amount owing on the Note. If from any
circumstances whatsoever fulfilirnent of any provision hereof or of any other document evidencing,
securing, or pertaining to t.q.e Loan, at the time perfonnance of such provision shall be ctue, shall
involve transcending the limit of validity prescribed by law, then the obligation to be fulfilled shall
be reduced to the limit of such validity; and if from any such circumstances Lender shall everreceive
anything of value deemed interest under applicable la\v which would exceed interest at the highest
lawful rate, the excessive interest shall be applied to the reduction of the principal amount owing.
6.6 Applicable Law. This Loan Agreement and the Loan Documents are being executed
and delivered in the State of Texas and shall be governed by and constrned in accordance with the
laws of the State of Texas and the laws of the United States applicable to transactions within such
state.unless the laws of another state require the application of the laws of such state. Borrower
hereby irrevocably agrees that any legal proceeding against Lender arising out of or in connection
with this Agreemen4 or the other Loan Documents, shall be brought in the District Courts of Bexar
County, Texas, orin the United States District Court for the Western District of Texas, San Antonio
Division.
6.7 Usurv Not Intended: Refund of Any Excess Payments. It is the intent of the
parties in the execution and performance ofthis Agreement to contract in strict compliance with the
usury laws of the State of Texas and the United States of America from time to time in effect. In
furtherance thereof, Lender and Borrower stipulate and agree that nolle of the tenns and provisions
contained in this Agreement or the other Loan Documents shall ever be constrnea to create a contract
to pay for the use, forbearance or detention of money with interest at a rate in excess of the Highest
Lawful Rate and that for purposes hereof"interest" shall include the aggregate of all charges which
constitute interest under such laws that are contracted for, reserved, taken, charged or received under
this Agreement. In determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Highest Lawful Rate, Borrower andLender shall, to the maximum extent
permitted under applicable law (a) treat all Loans as but a single extension of credit (and Borrower
and Lender agree that such is the case and that provision herein for multiple Loans and Notes is for
convenience only), (b) characterize any non-principal payment as an expense, fee or premium rather
than as interest, (c) exclude voluntary prepayments and the effects thereof, and (d) "spread" the total
amount of interest throughout the entire contemplated term of the Loans. The provisions of this
paragraph shall control over all other provisions of the Loan Documents which may be in apparent
conflict herewith. Lender and Borrower agree that Chapter 15 of the Texas Credit Code shall not
apply to this Agreement or the Note.
6.8 Indemnification.
HARMLESS FROM AND AGAINST ANY AND ALL LOSS, LIAlliLITY, OBLIGATION, DAMAGE, PENALTY,
JUDGMENT, CLAIM, DEFICIENCY AND EXPENSE (INCLUDING, WITHOUT Lll\11TATION, INTEREST,
PENALTIES, ATTORNEYS' FEES AND AMOUNTS PAID IN SETTLEMENT) TO WHICH LENDER MAY
BECOME SUBJECT ARISING OUT OF OR BASED UPON THE LOAN DOCUMENrs OR ANY LOAN,
EXCEPT TO THE EXTENT CAUSED BY ANY FAULT OR NEGLIGENCE OF LENDER.
6.9 No Waiver. No waiver of any Event of Default shall be deemed to be a waiver of
any other Event of Default. No failure to exercise or delay in exercising any right or power under
any Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any
12
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such right or power preclude any further or other exercise thereof or the exercise of any other right
or power. No amendment, modification or waiver of any Loan Document shall be effective unless
the same is in writing and signed by the person or entity against whom such amendment is sought
to be enforced. No notice to or demand on Borrower or any other person shall entitled Borrower or
any other person or entity to any other or further notice or demand in similar or other circumstances.
6.10 Survival; Parties Bound. All representations, warranties, covenants and agreementS
made by or on behalf of Borrower in connection herewith shall survive the execution and delivery
of the Loan Documents, and shall bind Borrower and its successors, trustees, receivers and assigns
and inure to the benefit of the successors and assigns of Lender, provided that the undertaking of
Lender hereunder to make Loans to Borrower shallnotinure to the benefit of any successor or assign
of Borrower. The term of this Agreement shall be until the final maturity of the Note and the
payment of all amounts due under the Loan Documents.
6.11 Expenses. Any provision to the contrary notwithstanding, and whether or not the
transactions contemplated by this Agreement shall be consummated, Borrower shall pay on demand
all reasonable out-of-pocket expenses (including, without limitation, the reasonable fees and
expenses of counsel for Lender) in connection with the negotiation, preparation, execution, filing,
recording, refiling, modification, supplementing and waiver of the Loan Documents
and the making, servicing and collection of the Loan. Without limitation of the foregoing, Borrower
shall pay all costs and expenses and reimburse Lender for any and all reasonable expenditures of
every character reasonably incurred or expended from time to time, regardless of whether or not a
default shall have occurred, in-connection with Lender's evaluating, monitoring, administrating and
protecting the Property, and all reasonable costs and expenses relating to Lenders exercising any of
its rights and remedies hereunder or at law, including, without limitation, all appraisal (initial or
reappraisal) fees, consulting fees and commissions, fees incident to security interest, lien and other
title searches, and reports, escrow fees, attorneys' fees, legal expenses,.court costs, auctioneer fees
and expenses, other fees and expenses incurred in connection with liquidation or sale of the Property
and all other professional fees. Any amount to be paid hereunder by Borrower to Lender shall be
a demand obligation owing by Borrower to Lender and, to the extent not prohibited by applicable
law, shall bear interest from the date of notice by Lender to Borrower of such expenditure until paid
at the Highest Lawful Rate of interest. The obligations of Borrower under this and the following
section shall survive the termination of this Agreement and/or the payment of the Note.
6.12 Arbitration, Borrower and Lender further agree as follows:
6.12.1 Any arbitrable dispute (as defined in Section 6.12.2 below) shall be settled
by arbitration, in accordance with the Commercial Arbitration Rules, then obtaining, of the American
Arbitration Association. Any arbitration hereunder shall be before at least three arbitrators
associated with the American Arbitration Association and selected in accordance with the
Commerciai Arbitration rules of the American Arbitration Association. The award of the arbitrators,
or of a majority ofthem, shall be final, and judgment upon the award rendered may be entered into
in any court, state or federal, having jurisdiction,
6.12.2 "Arbitrable disputes" include any controversy or claim between: the parties
iilcluding ;my claim based on contract, tort, or statute, arising out of or relating to the transaction
evidenced by the Notes or any other proposed or actual loan or extension of credit, all past, present
and future agreements involving the parties, any transactions contemplated hereby, and any aspect
of the past, present or future relationship of the parties.
6.12.3 Depositions may be taken and other discovery obtained in any arbitration under
this Agreement.
6.12.4 For purposes of this provision,
11
the parties
11
means Borrower and Lender, and
each of them, and all persons and entities signing this Agreement or any of the other agreements,
security instruments and/or guarantees executed heretofore or contemporaneously with and as part
of the same transaction with the Notes.
11
The parties
11
shall also include individual officers and
employees of the signators of those documents.
6.12.5 The parties shall have the right to invoke self-help remedies (such as set-off,
notification of account debtors, seizure and/or foreclosure of collateral, and non-judicial sale of
personal property and real property collateral) and/or ancillary or provisional judicial remedies (such
as garnishment, attachment, Specific performance, receiver, injunction, or restraining order, and
13
-,
sequestration) before, during; 'or after any arbitration. The parties neea not await the outcome of the
arbitration before using self-help or provisional remedies. Use of self-help or ancillary and/or
provisional remedies shall not operate as a of either pa_rtys right or compel arbitration.
6.12.6 Any aggrieved party shall serve a writtennoticeofintention to arbitrate to any
and all opposing parties and to an American Arbitration Association office within the State ofTexas
within one hundred eighty (180) days after dispute has arisen. A dispute is deemed to have arisen
upon receipt of a written demand or service ofjudicial process. Failure to serve a notice ofintention
to arbitrate within the time specified above shall be deemed a waiver of the aggrieved party's right
'to compel arbitration of such claim. Such notice ofintention to arbitrate may be informai and need
not comply with Rule 6 of the American Arbitration Association. The parties agree that legal action
regarding this Agreement and any liabilities hereunder shall either be brought by arbitration, as
described herein, or by judicial proceedings, but shall not be pursued in different or alternative
forums. The issue of waiver pursuant to this paragraph is an arbitrable issue.
6.12.7 Any arbitrator selected shall be knowledgeable in the subject matter of the
dispute, Qualified retired judges shall be selected whenever possible through panels maintained by
the American Arbitration Association. Each ofBorrower(s) (whether one or more) and Lender shall
pay an equal share of the arbitrators' fees.
6.!2.8 All statutes oflimitations which would otherwise be applicable shall apply
to any arbitration proceeding hereunder.
6.12.9 In any arbitration proceeding subject to these provisions, the arbitrators, or
a majority of them, are specifically empowered to decide (by documents only, or with a hearing at
the arbitrators' sole discretion) pre-hearing motions which are substantially similar to pre-hearing
motions to dismiss and motions for sununary adjudication.
6.12.1 0 The provisions of this section shall survive any termination, amendment, or
expiration of the Agreement in which this section is contained, unless all the parties otherwise
expressly agree in writing.
6.12.1! The parties acknowledge that the Notes evidence a transaction involving
'interstate commerce in that loan funds provided under the Notes are derived from interstate financial
markets. TheFederal Arbitration Act shall govern the interpretation, enforcement and proceedings
pursuant to the arbitration clause in the Notes.
6.12.12 The arbitrators, or a majority of them, shall award attorney's fees and costs
to the prevailing party pursuant to the terms of this Agreement.
6.12.13 Venue of any arbitration proceeding hereunder will be in Bexar County,
Texas.
6.13 Entire Agreement. This Agreement embodies the entire agreement between
Borrower and Lender and supersedes all prior proposals, agreements and understandings relating to
the subject matter hereof.
6.14 Severabilitv. If any provision of any Loan Documents shall be invalid, illegal or
unenforceable in any respect under any applicable Jaw, the validity, legality and enforceabi_lity ofthe
remaining provisions shall be affected or impaired thereby.
TillS AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,

ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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EXECUTED as of the stated above.
LENDER:
International Bank of Commerce,
a Texas bauldng association

Trtle: :,.,
BORROWER:
By: Delta Produce Marketing, Inc.,
a Texas co!'Poration
this ___3__ day of
Agreed and Accepted this _3_ day of
December, 2005.
Delta Produce, Ltd.,
By: WSJ Produce, LLC,
Genera
Agreed and Accepted this q day of
December, 2005.
Staci Produce, Ltd.,
a Texas limited liability compa.ny,
General
IS
EXHIBIT "A"
TRACT 1:
Texas, and a portion of Lot 53, Block 39, NCB 3698, Las Vi lias De Merida as
recorded in Volume 9555, Page 72, Deed and Plat Records qf Bexar County,
BEGINNING, at a found 1/2 inch iron rod on the southerly right of way line of
Merida Street, for the northeasterly corner of said Lot 53
1
Block 39, same
THENCE, S 84 22' 25" E, along the southerly right of way I ine of Merida
Street, a distance of 706.56 feet to a found 1/2 inch iron rod on the
northwesterly right of way II ine of The Union Pacific Rai !road;
of 2865,00 feet, a central angle of 14 22' 30", an arc length of 718.80 feet
and a bearing: S 43 18' 41" W, 716.91 feet, to a found 1/2 inch iron
rod;
THENCE, S 36 02' 54" W, continuing along the northwesterly right of. way line
of The Union Pacific Railraod, a distance of 183.64 feet to a set 1/2 inch
iron rod on the northerly right of way line of Ceralvo Street for the
THENCE, N a4o 10' 44" along the northerly right of way I ine of Ceralvo
Street, a distance of 35.88 feet to a set 1/2 inch iron rod;
THENCE, crossing said Lot 53, Block 39, the following courses;
N 05 34' 47Q E, a distance of 90.14 feet to a set 1/2 Inch iron rod;
s 83 48' 09" E, a distance of 10.75 feet to a set 112 Inch iron rod;
N 06"
11.
E, a distance of 21.99 feet to a set 1/2 inch lrqn rod;
N 83 48' 09" w. a distance of 13,64 feet to a set 1/2 inch Iron rod;
N 06 11' 51" E, a distance of 230.44 feet to a set 1/2 Inch iron rod;
N 83" 48' 09" w, a distance of 23.07 feet to a set 1/2 inch iron rod;
N 06 11' 51" E, a distance of 18.94 feet to a set 1/2 inch iron rod on the
I ina of said Lot 53, Block 39;
THENCE, N 84 25' 13" W, along the northerly I ina of said Lot 53, Block 39, a distance
of 120.01 feet to a found 1/2 inch iron rod for an interior angle corner of said lot
53, Block 39, same being the southwesterly corner of said lot 4;
THENCE, N 06 14' 30u E, along the easterly line of said Lot 53, Block 39, a distance
of 363.95 feet to the POINT OF BEGINNING of herein described tract, and containing
5.779 acres of land, more or less.
TRACT 2:
2.069 acres of land situated in the City of San Antonio, Bexar County, Texas, being
the East 8.31 feet of lots 57 through 65, Block 40, NCB 3699, all of lot 17, Block 40,
NCB 3699, Edgewood Addition, as r_ecorded in Volume 1625, Page 317, Deed and Plat
Records of Bexar County, Texas, and all of lot 18, Block 40, NCB 3699, H.A. Stauffer &
,H. G. Deviney Subdivision as recorded In Volume 3975, Page 223, Deed and Plat Records
BEGINNING, at a 1/2 inch iron rod set on the northerly right of way line of Merida
Street, said 112 Inch iron rod being N 84 22' 25" W, 8.31 feet from the southeast
tHENCE, N 06 14' 53" E, crossing said lots 57 through 65, Block 40, along the westerly
I ine of' that certain tract of land conveyed to West Coast Produce Company, Inc. as
in 7133, Page g6e, Official Public Records of Bexar County, Texas, a
distance of 364.13 feet to a 1/2 Inch iron rod set;
THENCE, S 84 21' 53" E, along the northerly line of said Lot 57, at a distance of
8.31 feet passing the northeast corner of lot 57, same being the northwest corner of
Lot 17, at a distance of 127.92 feet passing the northeast corner of Lot 17, same
being the northwest corner of said lot 18, in a II a tota I distance or 247.52 feet to a
1/2 inch Iron rod set for the northeast corner of said Lot 18, same being the
northwest corner o-r Lot 19;
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THENCE, S 06" 14' 53 W, along the common boundary line between lot 18 and lot 19, a
distance of 364.09 feet to a 1/2 inch iron rod set on the northerly right of way I ina
of Merida Street, for the southeast corner of said Lot 18, same being the soubhwest
corner of Lot 19;
THENCE, N 84" 22' 25" W, along the northerly right of way line of Merida Street, at a
distance of 119.60 feet passing the southwest corner of lot 18, same being the
southeast corner of lot 17, at a distance of 239,21 feet passing the southwest corner
of Lot 17, same being the southeast corner of Lot 65, in a I I a tota 1 d 1 stance of
247,52 feet to the POINT OF BEGINNING of herein described tract, and containing 2.089
TRACT 3:
Lot 17, Block 3, New City Block A36, Gillis Hood, Unit 2, an addition to the City of
Volume 9512, Page 91, Deed and Plat Records of Bexar County, Texas, SAVE AND EXCEPT
that portion conveyed to the City of Sa.n Antonio in VoiU!ile 5202, Page 1204, Official
Pub! lc Records of Real Property of Bexar County, Texas .
TRACT 4:
Condominium Unit 104, Building A, New City Block 16957, Post Oak Condominiums, in the
City of San Antonio, Bexar County, Texas, .according to Condominium Declaration
recorded in Volume 8, Page 159, and Volume 8, Page 189, Condominium Records Bexar
County, Texas, together with an undivided 4.52904519 percent interest in the common
.
.;.
EXHIBIT "B"
\
REAL ESTATE LffiN NOTE
Aniount: S 1 , 300,000. 00 Date: DECEMBER ' 2005
For value received. the receipt of whic}l is hereby acknowledged, the undersi&ned. jointly and Severally, (hereinaftyr
"Borrower'\ whether one or more) proinise to pay to the oider of INTERNATIONAL BANK OF CO:MMERCE (hereinafter
"Lender"), at 130 E. Travis, Antonio, Bexar County, Texas 78205, the sum of
ONE MILLION THREE HUNDRED THOUSAND AND N0/100 DOLLARS
Dollars (S 1, 300,000.00 ), in legal lawful money of the United States of An:ierica, with interest as it
accrues on the outstanding principal balance from date of adVance Of sUch principal :until paid.
XX
XX
The interest rate shall be __________ percent per annum; or
The Interest rate shall be floating at 0. 25% percent per annwn above the NEW yORK '
PRIME RATE (uPrime Rate") (described below) as it fluctuates from time to time; provided,
however, that in no event shall tl).e rate of interest (plus excess thereof, if any) to be paid on the unpaid
principal of this Note be less than annum. nor more than the maximum legal rate
allowed by applicable law, The starting interest rate on thls Note shall be 7. 257. percent per
annum. The rate of intere.st due hereunder shall be as of the date of any change in _the Prime Rate,
The INTERNATIONAL BANK OF COMlv1ERCE PRIIvffi RATE shall mean the annual lending rate o( interest
announced from time to time by Lender, as its prime rate,
The NEW YORK PRIME RATE shall mean theannual lending rate of interest announced from time to time by
JP Morga"n Chase & Co., New York, New York, as its prime rate. If the New Y.ork Prime Rate bas been selected as
the" Prime Rate and if, a prime rate is not announced by JP Morgan Chase & Co., New York, New York,
then the International Bank Prl.n!e. minus percent (1%) shall be the Prime Rate,
Use of either of said Prime Rates is not io be construed as a warrruity or that are more th!Ul another
rate or index, that rates on other loans or credit facilities may not be based on other indices or that rates on loans to others may not be
made below such prime rate.
The i.titere.st is calculated on a 360day factor applied on a 365day year, or a 366day year, in the event that the year is a leap year, on
the unpaid pri.nci"pal to the of each installment paid and the payment made credited ftfsl to the discharge of the interest accrued and
the balance to the reduction of the principal. Provided, however, that in the event the interest rate reach"es the maximum rate allowed
by applicable. law, said maximUm legal rate shall be computed on a full calendaryeai- 365/365 days basis or on a 366/366 days basis, in
the event that the year is a leap yeai. The interest charged and herein contracted for will not exceed the D?-aximwn allowed by law,
Matured unpaid: amounts will bear interest computed on a full calendar year 3651365 days basis cir on a 366/366 days basis, in the event
that the year is a leap year, at the higb_est legal late of interest by Texas law, unless Federal law allows a higher interest rate, in
which case, Borrower agrees to pay the rate allowed Qy Federal law. If applicable law does not set a maximum rate of interest for
matured unpaid fueD. Borrower agreoo that the maxltnum rate for shall be eighteen percent (18%) annum.
To theextent allowed by law, as the late payment charge under this Agreement, Bank may in its sole discretion{!) increase the interest
on the principal portion of any payment amo\Ult that is not 'I'eceivCd by the piyment due date to the maximw:n rate allowed by Jaw,
computed on a full calendar year basis from tlj.e payment due date uritil paid, Or (ii), should any paynient not be riuide withln ten (10)
days Of the due date, require Borrower to pay a one time ''late charge" per late payment e<jua( to five percent (5%) ofthe.amount of the
past due principal and interest of such payment, with a"minimwn of $10.00 and a max.imUIIl of$1,500.00 per late payment. The "late
charge" may be assessed without notice,. and shall be immediately due and payable. This proviSion is inapplicable if the oUtstanding
indebtedness under the Note is accelerated No late charge will be assessed on any payment when the only delinquency is due to late
charges ass"essed on earlier payment and payment is othenvise a full payment.
The outstanding and unpaid principal of this Note and all and unpaid interest are payable as
Number of Payments Frequency Amount of Payments '\Vhen Payments are Due
SEE "ADDENOUH TO REAL ESTATE .LIEN NOTE AND BALLQON RIDER ATTACHED HERETO AND INCORPORATED
HEREIN.
FinalMaturityDate: DECEHBER 5, 2010
Lender may, at its discretion, adjust the amount of periodic payments described above to assure that the remaining payments will fully
amortize the principal ofthls note on the stated maturity without any''Balloori" or Wlequal payment.
THIS OBLIGATION HAS THE FOLLOWING DEMAND FEATURE:
At any time, arid fr:0m time to time, whether or not prior to and/or during said schedule payment dates, Lender may, in its sole and
absolute discretion, re-schedule, rearrange and/or accelerate,ln whole or in part, the-outstanding and Wlpaid prinoipal balance, and all
accrued: and tmpaid interest under this Note, BorTower agrees and promises to pay Lender all accelerated principal and all accrued and
unpaid ip.terest on such principal. No notice of intent io shall be require".cl and Bon.ower expressly waives any right
to notice of Lender's intent to accelerate. The foregoing right to demand for immediate payment of this Note, in or in part,
may be "exercised by for ally reason whatsoever, whether or not Borrower is in default hereWlder and in advance of its scheduled
maturity.
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. the option given to the Lender io mature it, the BOrrower lind all parties or hereaftei- personally liable hereon now agree to and shall
pay an additional amount equal to reasonable and necessary attor:D.ey's fees and associated costS forconection. Said attorney's fees and
costs of collection, once"-Iiquidated and paid by Lender or otherWise allowed by law, will bear interest at the rate of interest applied to
the matured and past-dui principal balance of this Note as s"uch rate may cp.ange from time to time from _the date due until repaid.
In the any legal action "or proceediD..g, by arbitrati(!n o; otherwise, is commenced in connectiop. with _the enforcement of, or
declaration of rights under thls Note and/or any instrument or written agreement required or delivered under or pui-suant to the tenns of
this Note, and/or any controversy or claim, whether sounding in contract, tort or legal or equitable, involving in any way the
fmancing or the transaction(s), the ofth.ls Note, or any other proposed or actu31Ioan or extension of credit, the prevailing party
shall be entitled to recover reasonable and necessary attorney's fees, paralegal co"sts (including allocated costs for in-house legal
services), costs, expenses, expert witness fees and costs, and other necessary disbursements mil de in connection with any such or
proceeding, in the-amount determ.fued by the fact-finder ..
Lender, in its sole discretion and without obligation on Lender to do so, may advance and pay sums on behalf and for the benefit of
Borrower f9r costs necessary for the protection and preservation of the collateral securing this Note and othei- costs that may be
appropriate, in Lender's sole discretion, including but not J.irQ.ited to insurance premiums, ad valorem taxes, and attorney's fees, Any
sums which may be so paid out by Lender and all Sums paid for insurance premiums, as aforesaid, including tQe costs, expenses and
. attorney's fees paid in any suit affecting said property when necessary to protect the lien hereof shall bear interest from the dates of such
payments at the interest rate applied to the matured and past-due principal balrince Note and shall be paid by Borrower to Lender
upon demand, at the same place which this Note is payable, and shall be deemed a part debt and recoverable as such in all
aspect_s. . .
Borrower reserves the right to prepay, prior to-maturity, all or any part of the principal of this Note without penalty, and interest shall
immediately cease on any amount so prepaid. _All prepayments shall be applied to the last maturing instal!ments of principal, without
interrUpting the-regular installment payments,
Any assumption, ifpennitted by Lender, by any other person, partnership," organization or any other entity without the
express written consent of Lender, shall not the liability for the payment of this Note.
In the event that the hereinafter described real Property is sol( conveyed, or otherwise-disposed of without the prior written consent of
the Lender, the maturity ofthls Note may, at tlie option of the Lender, be accelerated !lfid Lender may immediate_ly demand payment of
the then outstanding sum together with all accrued_and unpaid interest due thereon.
Borrower and Lender hereby expressly. aCknowledge and agree that in the event of a 4efault under this Note or under any document
executed by Borrower in connection with, or to secure the payment of, this Note-(1) Lender shall not be required to comply with
Subsection 3.05(d) of the Texas Revised Partnership Act and (2) Lender shall not be required to proceed a"gainst or exhaust the assets
of Borrower before pursuing any directly against one or more of the partners of Borrower or the pr9perty of sue-h partners .
ARBITRATiON,
BORROWER AND LENDER ll'URTHERAGREE AS FOLLOWS:
(a)
(b)
ANY AND ALL CONTROVERSIES BETWEEN TaR PARTIES, EXCEPT SUCH CLAIMS AND
C,ONTROVERSIES WHICH ARE CONSUMER RELATED AND INVOLVE AN AGGREGATE AMOUNT IN
CONTROVERSY OF LESS THAN TEN THOUSAND DOLLARS (S!O,OOO.OO), SHALL BE RESOLVED BY
ARBITRATION IN ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN
ARBITRATION ASSOCIATION IN EFFECT AT THE TIME OF FILING; UNLESS THE COMMERCIAL
ARBITRATION RULES CONFLICT WITH THIS PROVISION, AND IN SUCH EVENT THE TERMS OF THIS
PROVISION SHALL CONTROL TO TEE EXTENT OF TEE CONFLICT. NOTWITHSTANDING ANYTHING
CONTAINED HEREIN TO THE CONTRARY, SAVE AND EXCEPT SUBPARAGRAPHS (k), (m), (o), (p), AND (s)
HEREIN, THO.SE CONSUMER RELATED CLAIJI:IS AND CONTROVERSIES INVOLVING AN AGGREGATE
AMOUNT OF LESS THAN TEN THOUSAND DOLLARS (SIO,OOO.OO) SHALL BE CONDUCTED IN
ACCORDANCE WITH TEE AMERICAN ARBITRATION ASSOCIATION RULES FOR TEE RESOLUTION OF
CONSUMER-RELATED DISPUTES OF LESS THAN TEN THO-USAND DOLLARS. ANY ARBITRATION
AMERICAN ARBITRATION ASSOCIATION AND SELECTED IN ACCORDANCE WITH TEE COMMERCIAL
ARBITRATION RULES OF TEE AMERICAN A:iu!ITRATION ASSOCIATION. FAILURE OF ANY ARBITRATOR
TO DISCLOSE ALL FACTS WHICH MIGHT TO AN OBJECTIVE OBSERVER CREATE A REASONABLE
IMPRESSION OF TEE ARBITRATOR'S PARTIALITY, AND/OR MATERIAL ERRORS OF LAW SHALLB.E
GROUNDS [IN ADDITION TO ALL OTEERSJ FOR VACATUR OF.AN AWARD RENDERED PURSUANT TO
THIS AGREEMENT.
TEE AWARD OF THE ARBITRATORS, OR A MAJORITY OF THEM, SHALL BE FINAL, AND JUDGMENT
UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT, STATE OR FEDERAL; HAYING
JURISDICTION. TEE ARBITRATION AWARD SHALL BE IN WRITING AND SPECiFY THE FACTUAL AND
. LEGAL BASES FOR THE AWARD. UPON THE REQUEST OF ANY PARTY, THE AWARD SHALL INCLUDE
(o) ARBITRABLE DISPUTES INCLUDE ANY AND ALL CONTROVERSIES OR cLAllvrS BETWEEN THE PARTIES
OF WHATEVER TYPE OR MANNER, INCLU))ING WITHOUT LIMITATION, ANY CLAIM AI\ISING OUT OF
OR RELATING TO .THIS NOTE, ALL PAST, PRESENT AND/OR FUTURE CREDIT FACILITIES AND/OR
AGREEMEN1,'S INVOLVING THE PARTIEs, ANY TRANSACTIONs BETWEEN OR INVOLVING THE
PARTIES, AND/OR ANY ASPECT OF ANY PAsTOR PRESENT RELATIONslill' OF THE PARTIES, WHETHER
PARTY.
.ACTIVE PARTICIPATION IN PENDING LITIGATION DURING THE 360 DAY NOTICE PERIOD, WHETHER
. AS PLAINTIFF OR DE.FENDANT, IS NOT A WAIVER OF THE RIGH'j'.TO COMPEL ARBITRATION. ALL
. DISCOVERY OBTAINED IN Tii:E PENDING LITIGATION MAY BE USED IN ANY SUBSEQUENT
ARBITRA'I'ION PROCEEDING.
(k) . THE PARTIES FURTHER AGREE THAT (I) NO ARBITRATION PROCEEDING HEREU)IDER SHALL BE
CERTIFIED ASA CLASS ACTION OR PROCEED ASA CLASS ACTION, OR ON A BASIS INVOLVING CLAIMS

ARBITRATION PROCEEDING HEREUNDER SHALL BE CONSOLIDATED WITH, OR JOINED IN ANY WAY
\VITH, ANY OTHER ARBITRATION PROCEEDING.
Q) ANY ARBITJ;ATOR SELECTED .SHALL BE KNOWLEDGEABLE IN THE SUBJECT MATTER OF THE
DISPUTE. EACH OF THE PARTIES SHALL PAY AN EQUAL SHARE OF THE ARBITRATION COSTS, FEES,
EXPENSES, AND OF THE ARBITRATOIW FEEs, COSTS AND EXPENSES,
(m)
(o)
(p)
(q)
(r)
(s)
ALL STATUTES OF LIMITATIONS \VillCH WOULD OTHERWISE BE APPLICABLE SHALL APPLY TO ANY
AJ'm ALL CLAIMS ASSERTED IN ANY ARBITRATION PROCEEDING HEREUNDER AND THE
COMMENCEMENT OF ANY ARBITRATION PROCEEDING TOLLS SUCH STATUTES OF LIMITATIONS.
IN ANY ARBITRATION PROCEEDING SUBJECT TO THIS PROVISION, THE ARBITRATORS, OR MAJORITY
OF THEM; .ARE SPECIPICALLYEMPOwERED TO DECIDE (BY DOCUMENTS ONLY, OR WITH A HEARING,
AT THE ARBITRATORS' SOLE DISCRETION) PRE-HEARING MOTIONS WHICH ARE SUBSTANTIALLY
SIMILAR TO PRJl..HEARING MOTIONS TO DISMISS AND MOTIONS FOR SUMMARY ADJUDICATION,
TillS ARBITRATION PROVISION SHALL SURVIVE ANY TERMINATION; AMENDMENT, OR EXPIRATION
OF THE AGREEMENT IN \VillCH THIS PROVISION IS CONTAINED, UNLESS ALL OF THE PARTIES
OTHERWISE EXPRESSLY AGREE IN WRITING.
THE PARTIES ACKNOWLEDGE THAt TillS AGREEMENT EVIDENCES A TRANSACTION INVOLVING
ENFORCEMENT, AND PROCEEDINGS PURSUANT TO THE ARBITRATION CLAUSE OFTIDS AGREEMENT
. 'J;HEARBITRATORS, ORA MAJORITY OF THEM, SHALLA WARD ATTORNEY'S FEES AND COSTS TO THE
PR,EVAILING PARTY PURSUANT TO THE TERMS OF THIS AGREEMENT.
NEITHER THE PARTI;ES NOR THE ARBITRATORS MAY DISCLOSE TilE EXISTENCE, CONTENT, OR
RESULTS OF ANY ARBITRATIONIIEREUNDER WITHOUT PRIOR WRITTEN CONSENT OF ALL PARTIES
AND/OR COURT ORDER. . .
VENUE OF ANY ARBITRATION PROCEEDING HEREimDER SHALL BE IN BEXAR COUNTY, TEXAS.
THE TERM LENDER INCLUDES ANY OTHER OWNER AND HOLDER OF TillS NOTE AND THE!R RESPECTIVE
SUCCESSORS AND ASSIGNS. TillS NOTE IS GOVERNED BY APPLICABLE TEXAS LAW, EXCEPT TO THE EXTENT THE
USURY LAWS OF TEXAS ARE PREEMPTED BY FEDERAl. LAW, IN WlllCH CASE, SUCH FEDERAL LAW SHALL APPLY.
VENUE OF ALL ACTIONS ON TillS NOTE, SHALLLffi IN BEXAR COUNTY, TEXAS,AND ALL OBLIGATIONS REQUIRED
HERBIN ARE PERFORMABLE IN BEXAR COUNTY, TEXAS.
If Joan proceeds are to be used primarily for personal, family or household use, the following apply:
NOTICE TO CONSUMERS: UNDER TEXAS LAW IF YOU CONSENT TO TillS AGREEMENT YOU MAY BE SUBffiCT TO A
FUTURE RATE AS IDGHAS 24% ANNUAL PERCENTAGE RATE, OR THE STATE USURY CEILING, WIDCHEVER IS LESS.
If this Note is to be secured by a lien on a located on the hereinafter described property, the following notlce shall apply:
THE MAXIMUM INTEREST RATE SHALL NOT EXCEED TWENTYFOUR PERCENT (24%) PER ANNUM, OR THE USURY
CEILING, WIDCHEVER IS LESS.
Payment hereof is secured by a vendor's lien retained in Deed Of even 4ate herewith, to the Borrower, and is additionally seCured by .a
Deed of Trust, Security Agreement and Financing Statement of even date herewith, executed by the Borrower andlot Grantors thereof to
STEVE E. EDLUND , Trustee, upon the following described real property:
THAT CERTAIN REAL PROPERTY LOCATED IN BEXAR COUNTY, TEXAS BEING !fORE PARTICULARLY
DESCRIBED ON EXHIBIT "A" ATTACHED HERETO AND INCORPORATED HEREIN.
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ADDENDUM TO REAL ESTATE LIEN NOTE
Number of
Payments
f
(a) Fifty-nine (59)
(b) One(!)
Frequency
Monthly
Final Maturity Date: DECEMBER 5,2010 .
Amount of
Payments
Principal including
interest in the
amount of Eleven
Thousand Eight
Hundred Sixty-
seven and 22/100
Dollars
($11,867.22) each.
All outstanding
principal and all
accrued, unpaid
interest thereon
shall be due and
payable .
When Payments
are Due.
Commencing
January 5, 2006,
and continuing
monthly on the
fifth day of
each successive
calendar month
until and including
November 5, 2010.
On Final Maturity
Date.
This credit facility was evaluated, analyzed and ultimately priced based upon the entire
relationship between Borrower and Lender. Therefore, if there is (i) a material negative change in the
depo&it and/or other banking relationships between Borrower and Lender, or (ii) a material change in the
financial condition, ownership, management and/or control of the Borrower, which Lender reasonably
believes increases the riskofrepayment, then Lender, in its sole and absolute discretion, may increase the
interest rate charged in connection with this credit facility by up to 1.00%; as it may float from time from
time (i.e. interest rate will increase to 1.25% above the New York Prime Rate) .
Executed this __ day of December, 2005.
BORROWER:
By: Delta Produce Marketing, Inc.,
a Texas corporation, General Partner

WaltCr Scott Jensen, President
BALLOON RIDER
TillS LOAN IS PAYABLEINFULL ON DECEMBERS, 2010. YOUMUSTREPAYTHE
ENTIRE PRINClP AL BALANCE OF THE LOAN AND UNPAID INTEREST THEN DUE.
THE BANK IS UNDER NO OBLIGATION TO REFINANCE THE LOAN. YOU WOULD,
THEREFORE, BE REQUIRED TO MAKE PAYMENT OUT OF OTHER ASSETS YOU
MAY OWN, OR YOU WOULD HAVE.TO FlND A LENDER, WHICH MAY BE THE
BANK YOU HAVE THIS LOAN WITII AT MATURITY. YOU MAY HAVE TO PAY
SOME OR ALL THE CLOSING COSTS NORMALLY ASSOCIATED WITIIA NEW LOAN
EVEN IF YOU OBTAIN REFINANCING FROM THE SAME BANK.
EXECUTED this __ day of December, 2005.
BORROWER:
Jly: Delta Produce Marketing, Inc.,
a Texas corporation, General Partner
By:
~ ~ ~ ~ ~ - - ~ ~ ~ ~
Walter S c ~ t t Jensen, President
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Delta Produce, LP
2001 S Laredo St
San Antonio, TX 78207-7023
Superior Tomato-Avocado, Ltd.
2001 S Laredo St
Alted, Ltd.
2001 S Laredo St
Staci Properties, Ltd.
2001 S Laredo St
Craig A. Stokes
Stokes Law Offices, LLP
3330 Oakwell Court, Suite 225
San Antonio, TX 78218
William R. Davis Jr
Allen M. DeBard
Langley & Banack, Inc
745 E Mulberry, Suite 900
United States Trustee - SA12
US Trustee's Office
615 E Houston, Suite 533
PO Box 1539
A&A Transportation, Inc.
4741 College Park
ADT Security Services, Inc.
P.O. Box 371956
Pittsburgh, PA 15250-7956
AFLAC Insurance Company
1932 Wynnton Rd.
Columbus, GA 31999-0797
AT&T
P.O. Box 105414
Atlanta, GA 30348-5414
AT&T Mobility
P.O. Box 6463
Carol Stream, IL 60197-6463
Ace Bolt & Screw Co.
200 Brooklyn Ave.
Acme Soap Co., Inc.
1206 Fulton Ave.
Alamo Assessments
1103 Fredericksburg Rd.
Alamo Leasing
2010 NW Military Hwy.
Alfonso Maldonado
1350 Ceralvo
Amazon Produce Network
546 Franklinville Rd.
Mullica Hlll, NJ 08062
Anchor Claims Management
P.O. Box 819045
Dallas, TX 75381-9045
Andrew & Williamson
9940 Marconi Drive
San Diego, CA 92154
Avery Dennison
219 Duval Street
B. Catalani, Inc.
1500 S. Zarzamora, #326
Banana Distributing Company
1500 S. Zarzamora
Bee Trucking, LLC
9540 Ball St.
Bentley Sheet Metal & Roofing
P.O. Box 27336
Bernardi & Associates
557 E. Frontage Rd.
Nogales, AZ 85621
Better Produce
301 W. Church St.
Santa Maria, CA 93458
Bexar County
c/o David G. Aelvoet
Linebarger, Goggan Blair Sampson
711 Navarro Suite 300
Bexar County Tax Assessor
P.O. Box 839950
Blue Book Services
845 E. Geneva Rd.
12-50073-lmc Doc#45-17 Filed 01/23/12 Entered 01/23/12 13:16:08 Service List Pg 1 of
11
Bohls Bearing & Power Co.
211 Probandt St.
Boice Produce Sales, Inc.
1368 NW 100th Dr.
Coral Springs, FL 33071
Briggs Equipment Trust
10540 N. Stemmons Frwy.
Dallas, TX 75220
Bronco Packaging Corporation
1100 Chase Rd., Suite 200
Mesquite, TX 75149
Bucks Fresh Produce
P.O. Box 207
Hidalgo, TX 78557
Cardona & Sons Welding
1823 S. Brazos
Central American Produce
2200 Park Central Blvd., #600
Pompano Beach, FL 33064-2220
Charles Seiler
3121 Mt. Olive Rd.
Adkins, TX 78101
City Public Service
PO Box 2678
Colonial Supplemental Insurance
P.O. Box 903
Columbia, SC 29202-0903
Compton Brokerage, Ltd.
P.O. Box 1696
Pharr, TX 78577-1696
Costa Solutions, LLC
P.O. Box 18716
Danfoss, Inc.
11655 Crossroads Circle
Baltimore, MD 21220-2863
Dayka & Hackett, LLC
42874 Rd. 64
Reedley, CA 93654
Del Campo Supreme, Inc.
672 W. Frontage Rd.
Noales, AZ 85621
Delina Fresh
1068 Pine Branch Rd.
Weston, FL 33326
Delta Produce Marketing
2001 S. Laredo St.
Divine Ripe, LLC
700 S. Bridge St., Suite C
Hidalgo, TX 78557
Dimare Newman, Inc.
P.O. Box 517
Newman, CA 95360-0517
Diversified Produce
P.O. Box 911523
Dallas, TX 75391-1523
Eagle Eye Produce
P.O. Box 460
Iona, ID 83427
Duckwall Fruit Co.
Divine Ripe, LLC/C&R Fresh
c/o Michael J. Black
Burns & Black, PLLC
750 Rittiman Road
Dynasty Farms
P.O. Box 3737
Salinas, CA 93912
Empacadora G.A.B. Inc.
1001 S. 10th, Suite G
McAllen, TX 78505
Eco-Farms Sales, Inc.
28790 Las Haciendas
Temecula, CA 92590
Eco-Farms Sales, Inc.
Burns & Black, PLLC
750 Rittiman Road
Federal Express
P.O. Box 660481
Dallas, TX 75266-0481
Evercold of Texas, LLC
6424 Melissa Ann
Expo Fresh, LLC
8775 Airway Rd.
San Diego, CA 92154-6207
Freightliner of San Antonio
8700 IH 10 E Bldg., #1
11
Fisher, Herbst & Kemble, P.C.
9501 Console Dr., Suite 200
Frank's Distributing of Produce
P.O. Box 2020
Nogales, AZ 85628-2020
G. R. Produce, Inc.
P.O. Box 2434
McAllen, TX 78502
French-Ellison Truck Center
P.O. Box 200187
Fresh Pac International
P.O. Box 4601
Oceanside, CA 92052
Gargiulo, Inc.
Burns & Black, PLLC
750 Rittiman Road
GB-SYS, Inc.
6338 N. New Braunfels, #181
Gargiulo, Inc.
P.O. Box 1166
Bonita Springs, FL 34133
Guadalupe Lumber & Supply
1547 S. Zarzamora
Grainger
4924 NW Loop 410
Greenpoint Distributors
P.O. Box 7270
Nogales, AZ 85628
Henry Cole Enterprises, Inc.
P.O. Box 901408
Homestead, FL 33090-1408
Harllee Packing, Inc.
P.O. Box 8
Palmetto, FL 34220
Harvest Crown Co., Inc.
P.O. Box 13578
Bakersfield, CA 93389
Home Team Pest Defense
11900 Crownpoint Bldg., #A
Hill Country Electric Supply
818 Chestnut
Home Depot
P.O. Box 105991
Ice-O-Therm Refrigeration
7450 Saddle Bend Drive
I. Kunik Company
2000 Industrial Drive
McAllen, TX 78504-4099
IFCO Systems NA
5250 Tacco Drive
130 E. Travis
Inter Tel Leasing, Inc.
1140 West Loop North
Houston, TX 77055
Internal Revenue Service
P.O. Box 7346
Philadelphia, PA 19101-7346
J.F.J.
127 N. San Gabriel
Irigoyen Farms, Inc.
14801 S. Clovis Ave.
Selma, CA 93662
J-C Distributing, Inc.
2731 N. Donna Avenue
Nogales, AZ 85621
Key Equipment Finance
600 Travis St., 14th Floor
Houston, TX 77002
J.J. Keller & Associates, Inc.
P.O. Box 548
Neenah, WI 54957-0548
Juniper Tomato Grower, Inc.
P.O. Box 38
Greensboro, FL 32330
Lighting, Inc.
7243 Blanco Rd.
11
Kingdom Fresh Produce, Inc.
2243 North Goolie Rd., #A
Donna, TX 78537
LexisNexis Screening Solutions
1000 Alderman Dr.
Alpharetta, GA 30005
M&P Logistics
London Fruit, Inc.
9010 S. Cage Blvd.
Pharr, TX 78577-9769
Lone Star Fire & First Aide
449 Culebra
Malena Produce, Inc.
947 E. Frontage Rd.
Rio Rico, AZ 85648
M&P Produce Co., Inc.
Main Street Bank
23970 U.S. 59 North
Kingwood, TX 77339
Market Dispatch Services
Managed Prescription Program
10860 Mavinee Drifve
Oro Valley, AZ 85737
Mario A. Bustamante, M.D.
343 W. Houston, Suite 406
Mission Produce, Inc.
2500 Vineyad Ave., Suite 300
Oxnard, CA 93036
Maurilio's Trucking
2501 W. Military Hwy., #C26
McAllen, TX 78503
Mecca Family Farms, Ltd.
P.O. Box 541779
Lake Worth, FL 33454-1779
Muller Trading Company Inc
Jason R Klinowski
Freeborn & Peters LLP
311 S Wacker Dr, Suite 3000
Chicago, IL 60606
Mr. W. Scott Jensen
c/o Mr. Elliott S. Cappuccio
Leslie Sara Hyman/Randall A. Pulman
Pulman, Cappuccio, Pullen & Benson,
2161 NW Military Higwy., Ste 400
Muller Trading Company
545 N. Milwaukee Ave., #201
Libertyville, IL 60048
NC Child Support
5800 Executive Center Dr., #200
Charlotte, NC 28212
Muller Trading Company, Inc.
Bruce W. Akerly
Cantey Hanger LLP
1999 Bryan Street, Suite 3300
Dallas, Tx 75201
NACCO, Inc.
11765 West Avenue, #218
Oakleaf Florist
4185 Naco-Perrin
NMHG Financial Services, Inc.
10 Riverview Dr.
Danbury, CT 06810
Nino's Truck Repair
602 Hazel St.
Office Depot
P.O. Box 9726
Macon, GA 31297-9726
Occupational Health Center
2990 Richmond Ave., #500
Houston, TX 77098
Ocean Mist Farms
Dept. LA 23299
Pasadena, CA 91185-3299
Penske Truck Leasing
P.O. Box 827380
Philadelphia, PA 19182-7380
Paccar Financial Corp.
PO Box 676014
Dallas, TX 75267-6014
P.O. BOx 7429
Pasadena, CA 91110-7429
Prepass
101 N. 1st AVe., Suite 2200
Phoenix, AZ 85003-1908
11
Paccar Financial Corp.
c/o Robert Reagan/William McLain
Reagan McLain Lee & Hatch
6060 North Central Expressway
Suite 690
Dallas, TX 75206
Pollock Paper Distributor
3802 Binz-Engleman, #143
Pro Act
22 Lower Ragsdale Dr,. Suite A
Monterrey, CA 93940
Pitney Bowes, Inc.
P.O. Box 371887
Printing Communications, Inc.
5601 Central Crest
Houston, TX 77092
Rio Queen Citrus
4012 E. Goodwin Rd.
Mission, TX 78574
Prime Time Sales
P.O. BOx 4135
Rio Rico, AZ 85648
R.M. Compton Transport, Inc.
P.O. Box 1696
Pharr, TX 78577-1696
Royal Flavor, LLC
2655 Melksee St.
San Diego, CA 92154
Produce Express
1603 S. Zarzamora
River City Produce
1616 So. Laredo St.
Rush Truck Center of Texas
P.O. BOx 200105
Rio Queen Citrus, Inc.
Burns & Black, PLLC
750 Rittiman Road
Rush Truck Center
755 E. 44th St.
Tucson, AZ 85713
SBS Administrative Services
433 Kitty Hawk, #217
Universal City, TX 78148
Ruben's Truck Brokerage
P.O. Box 4106
McAllen, TX 78502
SABCO
San Antonio Merchant Shipping
9540 Ball st.
Ryder Transportation Services
P.O. Box 96723
Chicago, IL 60693-6723
San Antonio Express-News
P.O. Box 2171
Slankard Produce Co., Inc.
1500 S. Zarzamora
San Antonio Diagnostic
P.O. Box 20366
Houston, TX 77225
San Antonio Water System
P.O. Box 2449
Staples Business Advantage
P.O. Box 83689
San Antonio Produce Termi
1500 S. Zarzamora
Spartan Staffing, LLC
P.O. Box 740435
Superior Tomato-Avocado
750 Merida
Southern Tire Mart, LLC
6081 I 10 East
Stokes Law Office, LLP
9155 S. Dadeland Blvd.
Dadeland Centre, #1208
Miami, FL 33156
Texas Access Controls
10203 Kotzebue, #230
11
Steinbeck Country Produce
P.O. Box 7417
Spreckels, CA 93962
Tennant Sales and Service
P.O. BOx 71414
Thompson Print Solutions
5818 Rocky Point Dr.
Tenn Tex Sales & Service
9304 Converse Business Lane
Converse, TX 78109
The Dominion Country Club
One Dominion Drive
Total Quality Logistics, Inc.
1701 Edison Drive
Milford, OH 45150
Texas CSDU
P.O. BOx 659791
Tomatoes of Ruskin, Inc.
P.O. Box 306
Ruskin, FL 33575
Triple H Produce, LLC
1000 E. Vermont Ave.
McAllen, TX 78503
Tijerina & Sons, LLC
808 S. Shary Rd., Suite 5
Mission, TX 78572
Triple Crown Label Group
421 E. Kingsbury St.
Seguin, TX 78155
Unifirst Corporation
3047 E. Commerce St.
Tri-Pak Machinery, Inc.
P.O. Box 1228
Harlingen, TX 78550
U.S. Attorney General of
Main Justice Bldg., #5111
10th & Constitutional Ave., NW
Washington, DC 20530
Vance Publishing Corp. a/k/a The
Packer
10901 W 84th Terrace
Suite 300
Lenexa, KS 66214
U.S. Attorney
601 NW Loop 410, Suite 600
Valero Marketing & Supply
P.O. Box 300
Amarillo, TX 79105-0300
W&B Service Company
8803 IH 10 East
Converse, TX 78109
Utility Trailer Sales
34241 LBJ Frwy.
Dallas, TX 75241
Victory Packaging
P.O. Box 840727
Dallas, TX 75284-0727
Wells Fargo Bank
P.O. Box 4044
Concord, CA 94524-4044
Verizon Wireless
P.O. Box 630062
Dallas, TX 75263-0062
Waste Management
4730 SE Loop 410
Whisenant Farms, Inc.
19755 State Rd. 62
Parrish, FL 34219-9235
Walsma & Lyons
534 Gordon Industrial Ct.
Byron Center, MI 49315-1002
West Coast Tomato, Inc.
530 5th Ave. Dr. W
Palemetto, FL 34220
Wilson Produce, LLC
555 W. Goldhill, Unit A26
Nogales, AZ 85621
Wells Fargo Equipment Finance
733 Marquette Ave. S, #700
Minneapolis, MN 55402
Willson Davis Company
1500 S. Zarzamora
Wortham Insurance & Risk
131 Interpark Blvd.
11
Willson Davis Co.
c/o Joe R. Hinojosa
Barkhurst & Hinojosa, P.C.
110 Broadway, Suite 350
A & D Carriers
4126 Luckenbach Rd.
A&A Concepts, LLC
1219 S. Zarzamora St.
Yotta Mark
1400 Bridge Parkway, #101
Redwood City, CA 94065
A.P.G Quality
34 Priarie Oak Drive
Conroe, TX 77385-3753
AT&T
P.O. Box 660921
Dallas, TX 75266-0921
AT&T Advertising Solutions
P.O. Box 5010
Anchor Claims Management
14785 Preston Rd., Suite 350
Dallas, TX 75254
Arrow-Magnolia International
P.O. Box 59089
Dallas, TX 75229
Aspen Produce
P.O. Box 1179
Center, CO 81125
Averitt Brokerage Co., Inc.
9999 Perrin Beitel, Suite B
Avila Produce
1803 S. Zarzamora
Bear Wheel Alignment & Garage
514 Merida St., Suite 101
Beruba Investments, Inc.
12983 Wetmore Rd.
Best Buy Produce
2929 E. 44th St.
Vernon, CA 90058
Blue Creek Produce, LLC
303 West Main St.
St. Charles, IL 60174
Big Chuy Distributors & Sons
P.O. Box 1441
Nogales, AZ 85628
Big State Produce Company
1500 So. Zarzamora, #418
California Fruit Produce
Buster Lind Produce
502 W. Schunior St.
Edinburg, TX 78539
C & R Fresh, LLC
30 Old Tucson Rd., #3
Nogales, AZ 85621
Camila Fresh
2501 W. Military Hwy., Suite C-34
McAllen, TX 78503
Canon Potato Co.
P.O. Box 880
Center, CO 81125-0880
Chuy's Produce
1500 S. Zarzamora St., Unit 434
Circle L Trucking
927 South Bluebird Lane
Homestad, FL 33035
Cline Enterprises
5112 Service Center
Comdata Transportation
P.O. Box 845738
Dallas, TX 75284-5738
Compton Brokerage, Ltd.
5530 IH-10 East., Bldg. F
Coosemans Houston, Inc.
3124 Produce Row
Houston, TX 77023
Cline Enterprises
5112 Service Center
11
Costa Oro, LLC
P.O. Box 2424
McAllen, TX 78502
Cummer Graham Company
Dajlala Produce Co.
2501 Military Hwy., #A-30
McAllen, TX 78503
Delightful Quality Produce
2201 S. Laredo
Direct Source Produce
1500 S. Zarzamora, Unit 707
Duckwall Fruit Co.
P.O. Box 150
Odell, OR 97044
Ernest O. Montoya
7179 Timber Ridge
Farmer Brothers Co.
P.O. Box 79705
City of Industry, CA 91716-9705
Fernandez Produce Express
1603 S. Zarzamora St.
Fikes Family Farms
3760 North Grape Creek
Fredericksburg, TX 78624-5740
Flake Brokerage Co./Ed
Flatiron Capital Corp.
950 17th St., Suite 1300
Denver, CO 80202
French-Ellison Truck Center
9010 IH 10 East
Converse, TX 78109
Fresh Farm Direct, LLC
106 Adams St., Suite 2A
Monte Vista, CLO 81144
Fresh Imports International
824 E. Hackberry Ave., #100
McAllen, TX 78501
Fresh Start Produce
5353 W. Atlantic Ave.
Suite 403-404
DelRay Beach, FL 33484-8166
Fresh Start Produce Sales
750 Rittiman Road
Full Service Commodities
1500 S. Zarzamora
G & G Produce, LLC
Av Los Angeles #1000 Bodaga 306
San Nicolas De Los G N.L.
Mexico
GE Capital
P.O. Box 740423
Gargiulo, Inc.
750 Rittiman Road
Gonzalez Mexican Produce
2501 W. Military Hwy., A-23
McAllen, TX 78503
Great Southern Life Insurance
P.O. Box 807004
Kansas City, MO 64180-7004
Greenhouse Produce Co., Inc.
4001 W. Ursula Ave.
McAllen, TX 78503
Guerra Produce
Henry Avocado Corp.
P.O. Box 300867
Escondidio, CA 92030-0867
Henry Avocado Corp.
750 Rittiman Road
Hermez Produce, Inc.
4704 Ramseyer Rd.
Edinburg, TX 78542
J. Gonzalez Trucking, Inc.
3415 Fontenay Park
Jack's Produce
P.O. Box 561
Pearsall, TX 78061
11
Johnny Rizo
432 CR 6610
Devine, TX 78016
Kitchen Pride
P.O. Box 585
Gonzales, TX 78629
L. Munoz
1625 S. Zarzamora
Le Best Banana Supply Co.
P.O. Box 295
Hidalgo, TX 78557
Liberty Office Products
P.O. Box 630729
Houston, TX 77263-0729
Liquid Capital Exchange, Inc.
5525 N. Macarthur Blvd.
Irving, TX 75038
London Fruit, Inc.
P.O. Box 2999
Lone Star Citrus Growers
9625 N. Moorefield Rd.
Mission, TX 78574-4598
M & P Logistic LP
M & P Produce
1500 Zarzamora
Marengo Foods Company
P.O. Box 190649
Dallas, TX 75219-0649
Maurilio's Trucking
900 Nogalitos
Maxim Egg Farms
P.O. BOx 200805
Dallas, TX 75320-0805
Meyer, LLC
P.O. Box 4325
Salinas, CA 93912
Miedema Produce
5005 40th Avenue
Hudsonville, MI 49426
Mitel Leasing
P.O. Box 972629
Dallas, TX 75397
Mitel Netsolutions
P.O. Box 53230
Mott's Wrecker Service
P.O. Box 719
Marion, TX 78124
NMHG Financial Services
P.O. Box 643749
Nino's Fresh Cut Fruits & Veggies
Occupational Health Center
P.O. Box 9005
Addison, TX 75001
Office Depot
P.O. Box 689020
Dept. 56-4101705159
Des Moines, IA 50368-9020
Ozarka Spring Water
P.O. Box 856680
Louisville, KY 40285-6680
PFG-Victoria
204 N. Brownson
Victoria, TX 77902
Pacific Sales Company
P.O. Box 9869
Fresno, CA 93794-0869
Paul Obst Farms
1520 N. Alamo Rd.
Alamo, TX 78516-6817
P.O. Box 802577
Pollock Paper Distributors
P.O. Box 671527
Dallas, TX 75267-1527
Providencia Fresh, LLC
P.O. Box 381
Hidalgo, TX 78557
Purchase Power
P.O. Box 856042
Louisville, KY 40285-6042
11
R.C. Food Service & Produce
305 Market St.
Laredo, TX 78040
R.V. Perez Trucking
P.O. Box 760233
Richie Boice Tomato Sales
1368 NW 100th Dr.
Coral Springs, FL 33071
Rio Bravo Produce
1006 S. Cesar Chavez
Edinburg, TX 78542
River City Produce
1738 Aspen Ridge
Ruiz Sales, Inc.
P.O. Box 3421
Edinburg, TX 78540
Ryder Transportation Services
P.O. Box 96723
Chicago, IL 60693
San Antonio Brokerage or Freight
Santex International Trucks
P.O. Box 20007
Six L's Packing Co., Inc.
P.O. Box 3088
Immokalee, FL 34143
Skyline Potato Company
P.O. Box 416
Center, CO 81125
So. Central Brokerage
11550 IH 10 West, Suite 232
Solano Produce
1500 S. Zarzamora St,. #301B
South Shore Carriers, Inc.
12080 SW 127 Ave., #127
Miami, FL 33186
Southern Tire Mart, LLC
P.O. Box 1000, Dept. 143
Memphis, TN 38148-0143
Sun Sweet Fresh
P.O. Box 250
Kingsburg, CA 93631
Sunriver Sales
P.O. Box 2738
Visalia, CA 93279
Sunriver Sales
750 Rittiman Road
Suntreat Packing & Shipping
P.O. Box 850
Lindsay, CA 93247
Texas Sweet Potato Dist.
11281 State Highway 19
Edgewood, TX 75117
The Packer
4309 Payshpere Circle
Chicago, IL 60674
Tiger Sanitation
P.O. Box 200143
Time Warner Cable
P.O. Box 660815
Dallas, TX 75266-0815
Touchstone & Associates
1500 S. Zarzamora St., #205
Tricar Sales, Inc.
P.O. Box 607
Nogales, AZ 85628
U.S. Bancorp Equipment
P.O. Box 790448
St. Louis, MO 63179-0448
Uesugi Farms
1020 State Hwy. 25
Gilroy, CA 95020-8074
Unifresh, Inc.
1500 So. Zarzamora St., #348
Vance Publishing Corporation a/k/a The
Packer
10901 W 84th Terrace
Suite 300
Lenexa, KS 66214
Vaughan Foods, Inc.
216 NE 12th St.
Moore, OK 73160
12-50073-lmc Doc#45-17 Filed 01/23/12 Entered 01/23/12 13:16:08 Service List Pg 10
of 11
Versacor
2825 Exchange Blvd., Suite 104
Southlake, TX 76092
Verstuyft Farms
14819 IH 35 South
Von Ormy, TX 78073
West Coast Tomato, Inc.
502 6th Avenue West
Palmetto, FL 34221
Wilson Produce, LLC
P.O. Box 1418
Uvalde, TX 78802
12-50073-lmc Doc#45-17 Filed 01/23/12 Entered 01/23/12 13:16:08 Service List Pg 11
of 11

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UNITED STATES BANKRUPTCY COURT

WESTERN DISTRICT OF TEXAS

DELTA PRODUCE, L.P.

Debtors Jointly Administered

in the order of application as the Lender in its sole discretion

transfer,_ch.ecks, drafts or other

Or "Superlien"-law, laW; 'ordin'ance, coue, rul,e, reiu.Iatlon,

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