LOAN AND PLEDGE AGREEMENT
THIS LOAN AND PLEDGE AGREEMENT (hereinafter referred to as this
"Agreement"), executed on the 18th day of August, 1986, by and between ▇▇▇▇▇
▇▇▇▇ AGRICULTURAL CORPORATION, INC., a Louisiana corporation (hereinafter
referred to as the "Borrower"), and SOUTHERN METHODIST UNIVERSITY, a Texas non-
profit corporation (hereinafter referred to as "SMU").
W I T N E S S E T H:
WHEREAS, Borrower has requested that SMU extend a revolving line of credit
in the amount of S1,500,000.00 to be secured by certain of Borrower's marketable
securities and SMU is willing to extend such line of credit on the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
1. COMMITMENT OF SMU. Subject to the terms and conditions hereinafter
set forth, SMU agrees, at any time and from time to time during the period
beginning on the date of this Agreement and continuing through and including
June 30, 1996, to make one or more advances (hereinafter collectively referred
to as the "Advances") to Borrower under a revolving line of credit (the
"Commitment"). The aggregate amount of the Advances outstanding at any one time
shall not exceed the sum of $1,500,000.00. Each Advance under the Commitment
shall be subject to satisfactory compliance by Borrower with all provisions of
this Agreement including the procedure for requesting Advances set forth in
Section 7 hereof. Within the limits of the Commitment, Borrower may borrow,
repay and reborrow without penalty or premium. Notwithstanding any other
provision of this Agreement, no Advance shall be required to be made hereunder
if any Event of Default (as hereinafter defined) has occurred and is continuing,
or if any event or condition has occurred that may, with notice or the passage
of time, be an Event of Default.
2. NOTE EVIDENCING BORROWINGS. The Commitment shall be evidenced by a
promissory note of Borrower, in form and substance satisfactory to SMU, such
note bearing interest and being payable as set forth in Exhibit "A" attached
hereto and made a part hereof by reference for all purposes, with appropriate
insertions (hereinafter referred to as the "Note").
3. PLEDGE OF COLLATERAL. In consideration of the Commitment and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and confessed, Borrower hereby grants, assigns, transfers and sets
over to SMU a continuing security interest in and to the collateral described in
this Agreement (hereinafter referred to as the "Collateral"), and the
certificates representing the Collateral. Collateral includes, without
limitation, (a) all money, instruments and property of Borrower this day
delivered to and deposited with SMU, and all money, instruments and property of
Borrower heretofore delivered or which shall hereafter be delivered to or come
into the possession, custody or control of SMU in any manner or for any purpose
whatever during the existence of this Agreement, (b) any additional Shares
(defined herein) which may be delivered to SMU after the date hereof pursuant to
the agreement contained herein, and (c) the proceeds of any and all such
property.
4. SECURED INDEBTEDNESS. The security interest granted herein is given
to ratably secure the performance and payment of Borrower's obligations,
liabilities and indebtedness arising under or in connection with the Note and
this Agreement (hereinafter referred to as the "Secured Indebtedness").
5. COLLATERAL. The, word "Shares," as used herein, shall mean collectively
any and all shares of stock listed for trading and actively traded on the New
York Stock Exchange or American Stock Exchange or real-time reported NASDAQ
securities or such other securities as may be acceptable to SMU, which Borrower
has deposited with SMU contemporaneously with, or prior to, the execution of
this Agreement, and such additional shares of stock that Borrower may from time
to time in the future deposit with SMU pursuant to the terms of this Agreement.
SMU may, at its option, give written or telegraphic notice to any and all
parties issuing the Shares or having in their possession any Collateral for
which they or others are accountable to Borrower, to hold and dispose of such
Collateral for the account of SMU and to send such Collateral directly to SMU at
its address shown herein, and to thereafter treat and regard SMU as the assignee
and transferee of Borrower and entitled in its place and stead to receive any
and all Collateral. Without in any way limiting the effectiveness of the
authorization and direction in the next preceding sentence, if Borrower shall
receive any such Collateral which is hereby receivable by SMU, Borrower shall
hold the same in trust and shall remit and deliver, or cause to be remitted and
delivered, such Collateral immediately and forthwith, to SMU. SMU shall have no
responsibility whatsoever to obtain the deposit of such Collateral. The
inclusion of proceeds in this Agreement does not authorize Borrower to sell,
transfer, dispose of or otherwise use the Collateral in any manner not
specifically authorized herein.
Borrower covenants and agrees with SMU that so long as any Secured
Indebtedness is outstanding, it will deposit and maintain on deposit with SMU
Shares which at all times are valued at not less than two hundred percent (200%)
of the outstanding principal balance of the Note (the "Minimum Value"), as
determined by daily closing market price quotations (either last trade or
average of last bid and asked prices) from the New York Stock Exchange, American
Stock Exchange, NASDAQ or other regularly published source. Any Shares not
traded on a particular day shall be valued as of such day at the average
(weighted by days elapsed) of the values of such Shares on the next preceding
and next following days on which such Shares are traded. In the event on the
last day of any March, June, September or December (hereinafter referred to as a
"Determination Date"), commencing September 30, 1986, the value of the Shares
deposited with SMU as so determined falls below the Minimum Value, Borrower
covenants and agrees to deposit with SMU within ten (10) days following such
Determination Date additional Shares sufficient to increase the value of the
Shares to at least the Minimum Value. In the event, on any Determination Date,
the value of the Shares deposited with SMU exceeds two hundred ten percent
(210%) of the outstanding principal balance of the Note (the "Maximum Value"),
SMU agrees to promptly deliver to Borrower sufficient Shares selected by SMU in
its sole discretion to reduce the value of the Shares to below the Maximum
Value.
6. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to
SMU that:
(a) Corporate Existence. Borrower is a corporation duly organized,
validly existing, and in good standing under the laws of the jurisdiction
in which it is incorporated and is duly qualified as a foreign corporation
in all jurisdictions wherein the property owned or to the best of its
knowledge the business transacted by it makes such qualification necessary;
(b) Corporate Power and Authorization. Borrower is duly authorized
and empowered to execute and deliver this Agreement, and to create and
issue the Note, and all corporate and other action on the part of Borrower
for the due creation and issuance of the Note and for the due execution,
delivery and performance of this Agreement has been duly and effectively
taken;
(c) Binding Obligations. This Agreement does, and the Note upon its
creation, issuance, execution and delivery will, constitute valid and
binding obligations of Borrower, enforceable in accordance with their terms
(except that enforcement may be subject to any applicable bankruptcy,
insolvency or similar laws generally affecting the enforcement of
creditors' rights and subject to availability of equitable remedies);
(d) No Legal Bar or Resultant Lien. This Agreement and the Note do
not and will not violate any provisions of any contract, agreement, law,
regulation, order, injunction, judgment, decree or writ to which Borrower
is subject, or result in the creation or imposition of any lien or other
encumbrance upon any assets or properties of Borrower, other than those
contemplated by this Agreement;
(e) No Consent. Borrower's delivery and performance of this
Agreement and the Note do not require the consent or approval of any other
person or entity, including without limitation any regulatory authority or
governmental body of the United States or any state thereof or any
political subdivision of the United States or any state thereof;
(f) Investments and Guaranties. Borrower has made no investments in,
advances to or guaranties of the obligations of any person or entity,
except as reflected in its most recent Financial Statements (defined
herein) delivered to SMU. As used herein, the term "Financial Statements"
shall mean balance sheets, income statements and appropriate footnotes and
schedules, prepared in accordance with generally accepted accounting
principles and consistent with prior periods.
(g) Liabilities. Except for liabilities incurred in the normal
course of business, Borrower has no material (individually or in the
aggregate) liabilities, direct or contingent, except as disclosed or
referred to in the Financial Statements. Except as described in the
Financial Statements, there is no litigation, legal or administrative
proceeding, investigation or other action of any nature pending or, to the
knowledge of Borrower, threatened against or affecting Borrower which
involves the possibility of any judgment or liability not fully covered by
insurance, and which might be reasonably expected to have a Material
Adverse Effect (defined herein). As used herein, the term "Material
Adverse Effect" shall mean any material and adverse effect on (i) the
assets or properties, liabilities, financial condition, business,
operations, affairs or circumstances of Borrower from those reflected in
the Financial Statements or from the facts represented or warranted in this
Agreement, or (ii) the ability of Borrower to carry out its business as at
the date of this Agreement or as proposed at the date of this Agreement to
be conducted or to meet its obligations under the Note or this Agreement on
a timely basis. No unusual or unduly burdensome restrictions, restraint,
or hazard exists by contract, law or governmental regulation or otherwise
relative to the business, assets or properties of Borrower, except as known
to affect its industry generally, which might reasonably be expected to
have a Material Adverse Effect;
(h) Taxes: Governmental Charges. Borrower has filed all tax returns
and reports required to be filed and has paid taxes, assessments, fees and
other governmental charges levied upon it or upon any of its assets,
properties or income which are due and payable, including interest and
penalties, or has provided adequate reserves, if required, in accordance
with generally accepted accounting principles for the payment thereof,
except such as are being contested in good faith by appropriate proceedings
and for which adequate reserves for the payment thereof as required by
generally accepted accounting principles have been provided;
(i) Titles, etc. Borrower has good and marketable legal and
beneficial title to the Collateral and to its assets and properties, free
and clear of all liens or other encumbrances except those referred to in
the Financial Statements, and those heretofore disclosed to SMU in writing,
and has the right to transfer any and all interests therein;
(j) Defaults. Borrower is not in default and no event or
circumstance has occurred which, but for the passage of time or the giving
of notice, or both, would constitute a default under any loan or credit
agreement, indenture, mortgage, deed of trust, security agreement or other
agreement or instrument in any respect that might be reasonably expected to
have a Material Adverse Effect. No Event of Default hereunder has occurred
and is continuing;
(k) Casualties; Taking of Properties. Since the dates of the
Financial Statements neither the business nor the assets or properties of
Borrower has been materially and adversely affected as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of property or
cancellation of contracts, permits or concessions by any domestic or
foreign government or any agency thereof, riot, activities of armed forces
or acts of God or of any public enemy;
(1) Use of Proceeds; Margin Stock. The proceeds of the Note will be
used by Borrower solely (i) to provide funds for working capital, (ii) to
provide funds for repayment of existing loans, or (iii) other general
corporate purposes. Borrower will not use any part of the proceeds of the
Note for the purpose of "purchasing" or "carrying" any "margin stock" as
such terms are defined in Regulations U, G, T or X of the Board of
Governors of the Federal Reserve System, or for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or
carry a margin stock or for any other purpose which might constitute this
transaction a "purpose credit" within the, meaning of said Regulation U.
Borrower is not engaged in the business of extending credit for the purpose
of purchasing or carrying margin stock. Neither Borrower nor any person or
entity acting on behalf of Borrower has taken or will take any action which
might cause the loans hereunder to violate Regulation U or any other
regulation of the Board of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934 or any rule or regulation
thereunder, in each case as now in effect or as the same may hereafter be
in effect;
(m) Compliance with the Law. Borrower:
(i) is not in violation of any law, judgment, decree, order,
ordinance, or governmental rule or regulation to which Borrower or any
of its assets or properties is subject; or
(ii) has not failed to obtain any license, permit, franchise or
ether governmental authorization necessary to the ownership of any of
its assets or properties or the conduct of its business;
which violation or failure might reasonably be expected to have a Material
Adverse Effect;
(n) No Material Misstatements. No information, exhibit or report
furnished by Borrower to SMU in connection with the negotiation of this
Agreement contains any material misstatement of fact or omits to state a
material fact or any fact necessary to make the statement contained therein
not misleading;
(o) Subsidiaries. Borrower has no subsidiaries other than ▇▇▇▇▇
Equipment Leasing, Inc.;
(p) Investment Company Act. Borrower is not an "investment company"
or a company "controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended;
(q) Public Utility Holding Company Act. Borrower is not a "holding
company", or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a
"holding company," or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended;
(r) Shares Freely Transferable. The Shares described herein and
delivered to SMU as Collateral (i) are genuine, free from adverse liens,
claims, mortgages, pledges, encumbrances, or restrictions on transfer
whatsoever (including restrictions imposed under federal and state
securities laws), other security interests, default, prepayment or any
legal or equitable defenses, and (ii) comply with applicable laws
concerning form, content and manner of preparation and execution; and
(s) Warranty. The Collateral is not subject to the interests of any
third person, and Borrower will defend the Collateral and its proceeds
against the claims and demands of all third persons.
7. CONDITIONS OF LENDING. The obligation of SMU to make Advances
hereunder shall be subject to the conditions precedent that:
(a) Requests for Advances. At the time of requesting any Advance
hereunder, Borrower shall comply with the following procedure:
(i) Borrower shall deliver to SMU a certificate in form and
substance satisfactory to SMU, and substantially in the form of
Exhibit "B" attached hereto, stating the amount of the requested
Advance, the date of the requested Advance, and describing the
Collateral in sufficient detail to permit SMU to determine the market
value of such Collateral at such date;
(ii) SMU shall, as promptly as practicable, evaluate the proposed
Collateral to determine if, in its sole discretion, it is willing to
accept such Collateral as security for the Commitment;
(iii) In the event SMU determines that the proposed
Collateral has a market value at such date of at least two hundred
percent (200%) of the amount of the requested Advance and if SMU is
otherwise willing to accept such Collateral, SMU shall advise Borrower
of its decision, and shall make the Advance no later than thirty
(30)days thereafter, and
(iv) Borrower shall deposit with SMU the original certificates
evidencing its ownership of the Collateral together with stock powers
properly executed in favor of SMU.
(b) Representations and Warranties. The representations and
warranties of Borrower under this Agreement Shall be true and correct in
all material respects as of each such date, as if then made (except to the
extent that such representations and warranties relate solely to an earlier
date);
(c) No Event of Default. No Event of Default shall have occurred and
be continuing nor shall any event have occurred or fail to occur which,
with the passage of time or service of notice, or both, would constitute an
Event of Default;
(d) Other Documents. SMU shall have received such other instruments
and documents incidental and appropriate to the transaction provided for
herein as SMU or its counsel may reasonably request, and all such documents
shall be in form and substance satisfactory to SMU;
(e) Corporate Resolutions. On or before the closing of the
transaction contemplated by this Agreement, SMU shall have received
appropriate corporate authorizations and evidence of existence and good
standing for Borrower to enter into this Agreement and the Note and to
perform its obligations hereunder; and
(f) Legal matters satisfactory. On or before the closing of the
transaction contemplated by this Agreement, Borrower shall have delivered
to SMU an opinion of counsel from Borrower's counsel in form and substance
satisfactory to SMU (i) as to the matters (as of the date of such opinion)
set forth in Subsections 6(a), (b), (c), (d), (e), (g) and (m) hereof, and
(ii) as to such other matters as SMU or its counsel may reasonably request.
All legal matters incident to the consummation of the transactions
contemplated hereby shall be satisfactory to counsel for SMU.
8. AFFIRMATIVE COVENANTS. Without the prior written consent of SMU,
Borrower will at all times comply with the following affirmative covenants from
the date hereof and for 30 long as any part of the Note is outstanding.
(a) Annual Financial Statements and Certificates of
Compliance. Within 120 days after the end of each fiscal year of Borrower,
Borrower will furnish or cause to be furnished to SMU (1) annual unaudited
Financial Statements of Borrower, prepared in accordance with generally
accepted accounting principles, consistent with prior periods, and (2) a
certificate signed by Borrower (i) stating that Borrower has fulfilled in
all material respects its obligations under this Agreement and the Note and
that all representations and warranties made herein continue to be true and
correct in all material respects (or specifying the nature of any change)
or if an Event of Default has occurred, specifying the Event of Default and
the nature and status thereof; (ii) to the extent requested from time to
time by SMU, specifically affirming compliance of Borrower in all material
respects with any of the representations or obligations under said
instruments; and (iii) containing or accompanied by such financial or other
details, information and material as SMU may reasonably request to evidence
such compliance;
(b) Taxes and Other Liens. Borrower will pay and discharge promptly
all taxes, assessments and governmental charges or levies imposed upon
Borrower or upon the income or any assets or property of Borrower as well
as all claims of any kind (including claims for labor, materials, supplies
and rent) which, if unpaid, might become a lien or other encumbrance upon
any or all of the assets or property of Borrower, provided, however, that
Borrower shall not be required to pay any such tax, assessment, charge,
levy or claim if the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate proceedings diligently
conducted and if Borrower shall have set up reserves therefor adequate, if
required, under generally accepted accounting principles;
(c) Further Assurances. Borrower will cure promptly any defects in
the creation and issuance of the Note and the execution and delivery of
this Agreement. Borrower, at its expense will promptly execute and deliver
to SMU upon request all such other and further documents, agreements and
instruments in compliance with or accomplishment of the covenants and
agreements in this Agreement, or to correct any omissions in the Note or
more fully to state the obligations set out herein;
(d) Performance of Obligations. Borrower will pay the Note and other
obligations incurred by it hereunder according to the reading, tenor and
effect thereof and hereof; and Borrower will do and perform every act and
discharge all of the obligations provided to be performed and discharged by
Borrower hereunder, at the time or times and in the manner specified;
(e) Reimbursement of Expenses. Borrower will, upon request, promptly
reimburse SMU for all amounts expended, advanced or incurred by SMU to
satisfy any obligation of Borrower under this Agreement, or to protect the
assets or business of Borrower or to collect the loans made hereunder, or
to enforce the rights of SMU under this Agreement, which amounts will
include all court costs, attorneys' fees, fees of auditors and accountants,
and investigation expenses reasonably incurred by SMU in connection with
any such matters, together with interest at either (i) the highest lawful
rate permitted by law an each such amount from the date that the same is
expended, advanced or Incurred by SMU until the date of reimbursement to
SMU, or (ii) if no Event of Default shall have occurred and be continuing,
the pre-maturity rate specified in the Note on each such amount from the
date that the same is expended, advanced or incurred by SMU until ten (10)
days following the earlier of the date of mailing or delivery of written
demand or request by SMU for the reimbursement of same, and thereafter at
the rate specified in clause (i) above until the date of reimbursement to
SMU. In the event SMU elects to pay such amounts and Borrower falls to
reimburse SMU therefor as provided in this Subsection, SMU may make
advances at its own initiation for the account of Borrower on the Note to
provide for such reimbursement, without the necessity of a request for
advance from Borrower, and such advances shall be a part of the
indebtedness of Borrower under this Agreement;
(f) Accounts and Records. Borrower will keep books of record and
account in which full, true and correct entries will be made of all
dealings or transactions in relation to its business and activities,
prepared in a manner consistent with prior years;
(g) Right of Inspection. Borrower will permit any officer, employee
or agent of SMU to examine Borrower's books of record and accounts, and
take copies and extracts therefrom, all at such reasonable times and as
often as SMU may request; and
(h) Notice of Certain Events. Borrower shall promptly notify SMU if
Borrower learns of the occurrence of (i) any event which constitutes an
Event of Default, together with a detailed statement by Borrower of the
steps being taken to cure the Event of Default; or (ii) the receipt of any
notice from, or the taking of any other action by the holder of any
promissory note, or other evidence of indebtedness of Borrower with respect
to a claimed default, together with a detailed statement by Borrower
specifying the notice given or other action taken by such holder and the
nature of the claimed default and what action Borrower is taking or
proposes to take with respect thereto; or (iii) any legal, judicial or
regulatory proceedings affecting Borrower or any of the assets or
properties of Borrower in which the amount involved is material and is not
covered by insurance or which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect; or (iv) any dispute between
Borrower and any governmental or regulatory body or any other person or
entity which, if adversely determined, might reasonably be expected to
cause a Material Adverse Effect, except as known to affect the oil and gas
industry generally.
9. NEGATIVE COVENANTS. Without the prior written consent of SMU,
Borrower will at all times comply with the following negative covenants from the
date hereof and for so long as any part of the Note is outstanding;
(a) Proceeds of Note. Borrower will not permit the proceeds of the
Note to be used for any purpose other than as provided in subsection 6(l)
above;
(b) Nature of Business. Borrower will not permit any material change
to be made in the character of its business as carried on at the date
hereof; and
(c) Mergers, Etc. Borrower will not merge or consolidate with or
sell, assign, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets or properties (whether now owned or hereafter acquired) to, any
person or entity (i) unless the stockholders' equity of the successor
entity (whether or not Borrower) is equal to or greater than the
stockholders' equity of Borrower immediately before such transaction and
the successor entity becomes or remains liable for all of Borrower's
obligations hereunder, and (ii) except that Borrower may sell its output in
the ordinary course of business.
10. EVENTS OF DEFAULT.
(a) Any one or more of the following events shall be considered an
"Event of Default" as that term is used herein:
(i) Borrower shall fail to pay when due the principal of or
interest on the Note or any other indebtedness of Borrower incurred
pursuant to this Agreement;
(ii) Any representation or warranty made herein or in any
certificate or statement furnished or made to SMU pursuant hereto, or
in connection herewith, or in connection with any document furnished
hereunder, shall prove to be untrue in any material respect as of the
date on which such representation or warranty is made, or any
representation, statement (including financial statements),
certificate, report or other data furnished or made by Borrower
hereunder proves to have been untrue in any material respect, as of
the date of which the facts therein set forth were stated or
certified;
(iii) Default shall be made in the due observance or
performance of any of the covenants or agreements of Borrower
contained herein and such default shall continue for more than thirty
(30) days;
(iv) Default shall be made in respect of any obligation for
borrowed money, other than the Note, for which Borrower is liable
(directly, by assumption, as guarantor or otherwise), or any
obligations secured by any mortgage, pledge or other security
interest, lien, charge or encumbrance with respect thereto, on any
asset or property of Borrower or in respect of any agreement relating
to any such obligation, and such default shall continue for more than
thirty (30) days;
(v) Borrower shall (a) apply for or consent to the appointment
of a receiver, trustee, intervenor or liquidator of itself, or of an
or a substantial part of its assets or (b) be adjudicated a bankrupt
or insolvent or file a voluntary petition in bankruptcy, or admit in
writing that it is unable to pay its debts as they become due, or (c)
make a general assignment for the benefit of creditors, or (d) file
petition or answer seeking reorganization or an arrangement with
creditors, or to take advantage of any bankruptcy, reorganization or
insolvency proceedings;
(vi) An order, judgment or decree shall be entered by any court
of competent jurisdiction or other competent authority appointing a
receiver, trustee, intervenor or liquidator of Borrower or of all or
substantially all of Borrower's assets, and such order shall not be
discharged within a sixty (60) day period;
(vii) Borrower discontinues its usual business;
(viii) A judgment for the payment of money in excess of
$25,000 is rendered by any court or other governmental body against
Borrower and Borrower does not discharge the judgment or provide for
its discharge in accordance with its terms, or procure a stay of
execution thereof within thirty (30) days from the date of entry
thereof, and within said period of thirty (30) days from the date of
entry thereof or such longer period during which execution of such
judgment shall have been stayed, appeal therefrom and cause the
execution thereof to be stayed during such appeal while providing such
reserves therefor as may be required under generally accepted
accounting principles;
(ix) Any event shall occur which could, with the passage of
thirty (30) days, mature into an Event of Default hereunder (upon the
occurrence of which, Borrower shall give SMU written notice thereof);
(x) The value of the Shares described herein, on any
Determination Date, as determined pursuant to Section 5 hereof, shall
be less than the Minimum Value, and Borrower shall fail to provide
additional Shares pursuant to its agreement herein within ten (10)
days thereafter sufficient to increase the value of the Shares to at
least the Minimum Value; or
(xi) Legal or beneficial ownership of more than fifty percent
(50%) of the outstanding voting shares of capital stock of Borrower or
any successor entity permitted under Subsection 9(c) is transferred to
or otherwise acquired by persons or entities other than the persons or
entities now legally and beneficially owning such shares.
(b) Upon the occurrence of any Event of Default specified in
subparagraphs(a)(v) or (a)(vi) the entire principal amount due under the
Note and all interest then accrued thereon, and any other liabilities of
Borrower hereunder, shall become immediately due and payable all without
notice and without presentment, demand, protest, notice of protest or
dishonor or any other notice of default of any kind, all of which are
hereby expressly waived by Borrower. In any other Event of Default, SMU
may declare the principal of, and all interest then accrued on, the Note
and any other liabilities hereunder to be forthwith due and payable,
whereupon the same shall forthwith become due and payable without
presentment, demand, protest or other notice of any kind, all of which
Borrower hereby expressly waives, anything contained herein or in the Note
to the contrary notwithstanding. Nothing contained herein shall be
construed to limit or amend in any way the Events of Default enumerated in
the Note, or any other documents executed in connection with the
transaction contemplated herein.
(c) Upon the occurrence of an Event of Default, and at anytime
thereafter SMU shall have, then or at any time thereafter, all of the
rights and remedies of a secured party under the Texas Uniform Commercial
Code in force on the date of execution of this Agreement; and SMU may, in
its sole discretion, sell, transfer, assign and deliver all or any part of
the Collateral at public or private sale, and thereafter, SMU may bring
suit for any deficiency remaining after any public or private sale of the
Collateral.
(d) This Agreement, SMU's rights hereunder and/or the Secured
Indebtedness, or any part thereof, may be assigned from time to time by
SMU. SMU may at any time following the occurrence of an Event of Default
hereunder (i) transfer the Collateral to SMU or its nominee, pursuant to
the applicable provisions of the Texas Uniform Commercial Code, and/or (ii)
receive income, including money, thereon and hold the income as Collateral
or apply the income to the payment of the Secured Indebtedness, or any part
thereof; the manner and distribution of the application to be in the sole
and absolute discretion of SMU. SMU may delay or refrain from exercising
any right or remedy under this Agreement without waiving that or any other
right or remedy of hereunder.
11. EXERCISE OF RIGHTS. No failure to exercise, and no delay in
exercising, on the part of SMU, any right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right. The rights of SMU
hereunder shall be in addition to all other rights provided by law. No
modification or waiver hereof or of any provision of the Note, nor consent to
departure therefrom, shall be effective unless in writing, and no such consent
or waiver shall extend beyond the particular case and purpose involved. No
notice or demand given in any case shall constitute a waiver of the right to
take other action in the same, similar or other instances without such notice or
demand.
12. NOTICES. If notice to Borrower of the public sale or private sale or
other disposition of the Collateral is required by the Texas Uniform Commercial
Code, such notice shall be sufficient If SMU gives written notice to Borrower
five (5) days prior to the date of any public sale of the Collateral or five
(5). days prior to the date after which any private sale or other disposition of
the Collateral win be made. Any notices or other communications required or
permitted to be given by this Agreement or any other documents and instruments
referred to herein must be given in writing and must be personally delivered or
mailed by prepaid certified or registered mail to the party to whom such notice
or communication is directed at the address of such party as follows: (a)
BORROWER: ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Chief
Executive Officer; or (b) SMU: ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
University, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President for Finance and
Administration. Any such notice or other communication shall be deemed to have
been given (whether actually received or not) on the day it is personally
delivered as aforesaid or, if mailed, on the day after it is mailed as
aforesaid. Any party may change its address for purposes of this Agreement by
giving notice of such change to all other parties pursuant to this Section.
13. GOVERNING LAW. This Agreement is being executed and delivered, and is
intended to be performed, in Dallas, Texas, and the substantive laws of such
state shall govern the validity, construction, enforcement and interpretation of
this Agreement and all other documents and instruments referred to herein,
unless otherwise specified therein or unless the laws of another state require
the application of the laws of such state.
14. INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, such provisions shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement.
15. MAXIMUM INTEREST RATE.
(a) Regardless of any provisions contained in this Agreement or in
any other documents and instruments referred to herein or any other
instrument or agreement entered into in connection with or as security for
the Note, SMU shall never be deemed to have contracted for or be entitled
to receive, collect or apply as interest on the principal amount evidenced
by the Note, any amount in excess of an amount which would result in
exceeding the maximum rate of interest permitted to be charged by
applicable law. In the event the maturity of the Note is accelerated by
reason of an election of the holders thereof resulting from any Event of
Default under this Agreement, or otherwise, or in the event of any required
or permitted prepayment, then such consideration that constitutes interest
under applicable law may never include more than the maximum amount allowed
by such applicable law, and excess interest, if any, provided for in this
Agreement, the Note or otherwise shall be cancelled automatically as of the
date of such acceleration and if theretofore paid shall be applied to the
reduction of the unpaid principal balance of the Note and if the principal
balance of the Note is paid in full, any remaining excess shall forthwith
be paid to Borrower. In determining whether or not the amount of interest
paid or payable under any specific contingency exceeds an amount which
would result in exceeding the maximum rate of interest permitted under
applicable law, SMU and Borrower shall, to the extent permitted under
applicable law (i) characterize any non-principal payment as an expense,
fee or premium rather thin as interest; and (ii) exclude voluntary
prepayments and the effect thereof; and (iii) compare the total amount of
interest contracted for, charged or received throughout the entire
contemplated term of the Note at the maximum lawful rate under applicable
law.
(b) If at any time and from time to time SMU is prevented from
collecting the rate of interest and the fees specified in the Note, by
applicable law or governmental regulation, it shall be entitled to recoup
the amount it would have otherwise been able to collect when such
recoupment will not violate such applicable law or governmental regulation.
Such recoupment shall be accomplished by Borrower paying interest at the
highest lawful rate until such time as SMU shall have fully recouped the
interest it would have otherwise been able to collect from Borrower in the
absence of such applicable law or governmental regulation. During any such
period of recoupment, interest collected by SMU shall first be credited to
payment of current interest due at the rate specified in the Note, then any
remaining interest collected shall. be applied to recoupment. When SMU
shall have recouped all such interest, the interest rate payable by
Borrower shall revert to the rate specified in the Note. In no event,
however, shall the interest rate charged hereunder ever exceed the maximum
rate of interest permitted by law.
16. ENTIRETY AND AMENDMENTS. This Agreement, the Note, and/or any other
documents and instruments referred to herein, embody the entire agreement
between the parties and supersede all prior agreements and understandings, if
any, relating to the subject matter hereof and thereof, and any provision hereof
or of the Note, may be amended or waived only by an instrument in writing
executed by Borrower and SMU.
17. MULTIPLE COUNTERPARTS: APPROVAL. This Agreement may be executed in a
number of identical separate counterparts, each of which for all purposes is to
be deemed an original, but. all of which shall constitute, collectively, one
agreement. No party to this Agreement shall be bound hereby until (a) a
counterpart of this Agreement has been executed and delivered by all parties
hereto, and (b) the terms and provisions of this Agreement, and the execution
and delivery thereof by SMU, shall have been duly approved by the Investment
Committee of the Board of Governors of SMU.
18. SURVIVAL. All covenants, agreements, undertakings, representations
and warranties made herein, in the Notes or other documents and instruments
referred to herein, shall survive all closings hereunder and shall not be
affected by any investigation made by any party.
19. PARTIES BOUND. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns, heirs,
legal representatives and estates; provided, however, that Borrower may not,
without the prior written consent of SMU, assign any rights, powers, duties or
obligations hereunder.
EXECUTED on the 18th day of August, 1986.
DEBTOR: ▇▇▇▇▇ ▇▇▇▇ AGRICULTURAL
CORPORATION, INC.
a Louisiana corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Its: Vice President
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SECURED PARTY: SOUTHERN METHODIST UNIVERSITY,
a Texas non-profit corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Laundry
----------------------------------
Its: Vice President
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EXHIBIT "A"
PROMISSORY NOTE
$1,500,000.00 Dallas, Texas August 18, 1986
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇ ▇▇▇▇ AGRICULTURAL CORPORATION,
INC., a Louisiana corporation (the "Maker"), hereby unconditionally promises to
pay to the order of SOUTHERN METHODIST UNIVERSITY, a Texas nonprofit corporation
("SMU"), at its offices in University Park, Dallas County, Texas, the principal
sum of ONE MILLION FIVE HUNDRED THOUSAND and NO/100 DOLLARS ($1,500,000.00) or,
if less, the aggregate unpaid balance of all amounts advanced to Borrower
pursuant to that certain Loan and Pledge Agreement of even date herewith by and
between Maker and SMU (the "Loan Agreement"), in lawful money of the United
States of America, together with interest at the lesser of (a) the Maximum Rate
(defined herein) or (b) as follows (the "Contract Rate"):
(i) from the date of this Note and continuing until June 30, 1988,
this Note shall bear interest at the rate of seven and one-half percent (7-
1/2%) per annum;
(ii) From and after June 30, 1988 and continuing until maturity, this
Note shall bear interest at a rate to be determined annually on each June
30 (the "Interest Determination Date"), beginning June 30, 1988. The rate
of interest for the twelve (12) month period immediately following each
Interest Determination Date shall be equal to the greater of (a) seven and
one-half percent (7-1/2%) per annum, or (b) seventy-six percent (.76)
multiplied times the Index (defined herein) for the month including such
Interest Determination Date. As used herein, the term "Index" shall mean
the Shearson ▇▇▇▇▇▇ Brothers Inc. Bond Market Report - Corporate Bond Index
- Long Term (Average) Yield (which Index for June 1986 was 9.90 %) or if
same is no longer published, the successor index, if any, or if none is
available, a substantially equivalent index for obligations of the same
maturity and quality as designated by SMU with the consent of Maker, which
consent shall not be unreasonably withheld.
The term "Maximum Rate" as used herein includes, as to Article 5069-1.04,
Vernon's Texas Civil Statutes (and as the same may be incorporated by reference
in other Texas statutes), but otherwise without limitation, the rate based upon
the "indicated rate ceiling." All past due principal and interest of this Note
shall bear interest at the highest lawful rate until paid.
Interest on this Note is due and payable quarterly as it accrues, on the
last day of each September, December, March and June, commencing September 30,
1986. The principal balance of this Note outstanding on June 30, 1996 (the
"Conversion Date"), together with all accrued but unpaid interest, is due and
payable in thirty-nine (39) consecutive quarterly installments, each in the
amount of 1/40th of the principal balance of this Note outstanding on the
Conversion Date, commencing September 30, 1996 and continuing on the last day of
each December, March, June and September thereafter, with one (1) final
installment being due and payable. on June 30, 2006 in an amount equal to the
outstanding principal balance of this Note, plus all accrued but unpaid
interest. All installments of principal and interest are payable at SMU's
office in University Park, Dallas County, Texas.
This Note is executed and delivered pursuant to the Loan Agreement and is
the Note referred to therein, and is secured by capital stock in certain
publicly traded corporations. Reference is made to the Loan Agreement for a
description of the properties pledged and assigned, the nature and extent of the
security and the rights of the parties under the Loan Agreement in respect of
such security. Upon the occurrence of any Event of Default (as such term is
defined in the Loan Agreement), the principal balance hereof and the interest
accrued hereon may be declared to be forthwith due and payable, whereupon the
holder will have the remedies provided in the Loan Agreement.
Regardless of any provision contained in this Note, no holder of this Note
shall ever be entitled to receive, collect or apply, as interest on any amount
owing, hereunder, any amount in excess of the highest lawful rate of interest
permitted to be charged by applicable law, and in the event any holder of this
Note ever receives, collects or applies, as interest, any such excess, such
amount which would be excessive interest shall be deemed a partial prepayment of
principal and treated hereunder as such; and if the principal amount of this
Note is paid in full, any remaining excess shall forthwith be paid to the Maker.
In determining whether or not the interest paid or payable, under any specific
contingency, exceeds the highest lawful rate permitted by law, the undersigned
and any holder of this Note shall, to the maximum extent permitted under
applicable law, (i) characterize any non-principal payment as an expense, fee or
premium rather than as interest, (ii) exclude voluntary prepayments and the
effect thereof, and (iii) compare the total amount of interest contracted for,
charged or received with the total amount of interest which could be contracted
for, charged or received throughout the entire contemplated term of this Note at
the maximum lawful rate under applicable law; provided that if this Note is paid
and performed in full prior to the end of the full contemplated term thereof,
and if the interest received for the actual period of existence hereof exceeds
the highest lawful rate permitted by law, the holder of this Note shall refund
to the undersigned the amount of such excess or credit the amount of such excess
against the principal amount of this Note, and in such event, no holder of this
Note shall be subject to any penalties provided by any laws for contracting for,
charging or receiving interest in excess of the highest lawful rate permitted by
law.
If at any time and from time to time SMU is prevented from collecting the
Contract Rate and the fees specified in this Note, by applicable law or
governmental regulation, it shall be entitled to recoup the amount it would have
otherwise been able to collect when such recoupment will not violate such
applicable law or governmental regulation. Such recoupment shall be
accomplished by the Maker paying interest at the highest lawful rate until such
time as SMU shall have fully recouped the interest it would have otherwise been
able to collect from Maker in the absence of such applicable law or governmental
regulation. During any such period of recoupment, interest collected by SMU
shall first be credited to payment of current interest due at the Contract Rate,
then any remaining interest collected shall be applied to recoupment. When SMU
shall have recouped all such interest, the interest rate payable by Maker shall
revert to the Contract Rate. In no event, however, shall the interest rate
charged hereunder ever exceed the maximum rate of interest permitted by law.
If this Note is placed in the hands of an attorney for collection, or if it
is collected through any legal proceeding at law or in equity or in bankruptcy,
receivership or other court proceedings, Maker agrees to pay all costs of
collection, including but not limited to court costs and reasonable attorneys'
fees.
Maker and each surety, endorser, guarantor and other party ever liable for
payment of any sums of money payable on this Note, jointly and severally waive
presentment and demand for payment, notice of intention to accelerate the
maturity, acceleration, protest, notice of protest and nonpayment, as to this
Note and as to each and all installments hereof, and agree that their liability
under this Note shall not be affected by any renewal or extension in the time of
payment hereof, or in any indulgences, or by any release or change in any
security for the payment of this Note.
MAKER:
▇▇▇▇▇ ▇▇▇▇ AGRICULTURAL
CORPORATION, INC.,
a Louisiana corporation
By:
----------------------------------
----------------------------------
Its:
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EXHIBIT "B"
BORROWING CERTIFICATE
This Borrowing Certificate is executed by the undersigned pursuant to that
certain Loan and Pledge Agreement dated August , 1986 (the "Loan Agreement")
---
between ▇▇▇▇▇ ▇▇▇▇ Agricultural Corporation, Inc. (the "Borrower") and Southern
Methodist University (the "Agreement"); and the undersigned hereby certifies and
affirms the accuracy of the following information:
1. Amount of requested Advance: ;
-------------------------
2. Proposed Collateral:
Capital stock of the following corporations, represented by certificates
for the number of shares set forth opposite the name of the respective
corporations, and being listed and actively traded on the exchange or
market set forth opposite the name of the respective corporations:
Corporation Certificate No. No. of Shares Exchange/Market
--------------- --------------- --------------- ---------------
3. Price per share at date of execution of Certificate and total market value
of such shares based on such price:
Corporation Price per Share Total Market Value
------------------ ------------------ ------------------
The undersigned, the duly elected and acting -------------------of the Borrower,
hereby certifies that the conditions set forth in Subsections 7(b) and 7(c) of
the Loan Agreement are met as of the date hereof and has this ------- day of ---
---, 19--, executed this Borrowing Certificate for the purpose of obtaining an
Advance under the Agreement.