Exhibit 2
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NationsBank Form of Loan Agreement
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Date November 22, 1994
Between
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Borrowers: Bank:
NationsBank of Texas, N.A.
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This Loan Agreement ("Agreement") is made on the above date by and between
Borrowers and Bank.
1. THE LOAN.
A. Bank agrees to lend and each Borrower severally agrees to borrow an
amount not to exceed the amount set forth next to each such Borrower's
name on Schedule I attached hereto (individually, a "Loan" and
collectively, the "Loans") on the terms and conditions set forth herein
and subject to the other limitations set forth herein and in the other
Loan Documents (as defined herein). Each Loan will be evidenced by a
Promissory Note in the form of Exhibit A attached hereto executed by
the applicable Borrower, or any renewal thereof, with interest and
principal payable as stated therein (the "Notes").
B. Each Loan provides for a revolving line of credit under which a
Borrower may from time to time borrow, repay and reborrow funds;
provided, however, the aggregate amount of funds under any particular
Loan that may be outstanding at any time shall in all events be subject
to the limitations set forth on Schedule I and in the applicable Note
and Collateral Maintenance Agreement (as defined herein). The Loans
shall mature on November 22, 1996, unless sooner accelerated in
accordance with the terms hereof.
C. Bank and Borrowers acknowledge and agree that each Borrower's
individual liability hereunder shall be limited to the amount set forth
on Schedule I hereto, plus interest accrued thereon, plus any fees and
expenses owing hereunder.
2. SECURITY. Each Loan is to be secured by a pledge of certain securities
pursuant to a Pledge Agreement (the "Pledge Agreement") and a Collateral
Maintenance Agreement (the "Collateral Maintenance Agreement"), each
Agreement of even date herewith between a Borrower and Bank.
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3. REPRESENTATIONS AND WARRANTIES.
Each Borrower represents and warrants as to itself to Bank as follows:
A. Good Standing. Such Borrower (other than ____________________________)
is a trust duly established and validly existing under the laws of the
State of Texas and has all powers and permits, consents and
authorizations necessary to own and operate its properties and to carry
on its business as presently conducted. ______________ ("________") is
a limited partnership duly organized and validly existing under the
laws of the State of Texas and has all powers and permits, consents and
authorizations necessary to own and operate its properties and to carry
on its business as presently conducted.
B. Trustee/General Partner. ________ is (i) the sole trustee ("Trustee")
of such Borrower other than ________ and _________ and (ii) the sole
generalpartner ("General Partner") of ________.
C. Authority and Compliance. The Trustee, on behalf of such Borrower
other than ________ and _________ have full power and authority to
enter into this Agreement, to make the borrowings hereunder, to
execute and deliver the Notes and the other Loan Documents (as defined
herein) to which such Borrower is or may be a party and to incur the
obligations provided for herein, all of which have been duly
authorized by all proper and necessary action on the part of such
Borrower. No consent or approval of any public authority or person is
required as a condition to the validity of this Agreement or the Notes
or the performance hereunder, and Borrower is in compliance with all
laws and regulatory requirements to which it is subject.
D. Binding Agreement. This Agreement and the Notes constitute valid and
legally binding obligations of Borrower, enforceable in accordance
with their terms.
E. Financial Statements. The books and records of Borrower properly
reflect such Borrower's financial condition, and there has been no
material change in such Borrower's financial condition as represented
in the financial statements dated June 30, 1994 delivered to Bank.
F. Litigation. There are no proceedings pending or, to the best knowledge
of the Trustee, ________ or _________, threatened before any court or
administrative agency which will or may have a material adverse effect
on the financial condition or operations of any such Borrower.
G. No Conflicting Agreements. There are no provisions of Borrower's (other
than _____________________) trust agreement or ________'s agreement of
limited partnership and no provisions of any existing agreement,
mortgage, indenture or contract binding on Borrower or affecting its
respective property or business, which would conflict with or in any
way prevent the execution, delivery or carrying out of the terms of
this Agreement and the Notes.
H. Taxes. All income taxes and other taxes due and payable by Borrower
through the date of this Agreement have been paid prior to becoming
delinquent.
I. Use of Proceeds. The proceeds of the Loans will be used by Borrower to
(i) refinance in part the indebtedness of Borrowers currently owing to
The First Boston Corporation and (ii) invest in such securities as
such Borrower deems reasonably prudent. Such Borrower is not engaged
in the business of extending credit for the purpose of purchasing or
carrying "margin stock" as that term is defined in Regulation U of the
Board of Governors of the Federal Reserve System; provided, however
that proceeds of the Loans may also be used for the purpose of
investing in other parties for the purpose of purchasing or carrying
any such "margin stock," or for the purpose of reducing or retiring
any indebtedness incurred for such purpose. Neither such Borrower, nor
any person acting on behalf of Borrower, has taken or will take any
action which might cause the Notes or this Agreement to violate
Regulations G, T or U or any other regulation of the Board of
Governors of
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the Federal Reserve System or 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.
J. Continuation of Representations and Warranties. All representations
and warranties made under this Agreement shall be deemed made at and
as of the date hereof, and at and as of the date of any future advance
under any Note.
4. CLOSING CONDITIONS
A. Conditions to Initial Advance. The obligation of Bank to execute this
Agreement and to make the initial advances hereunder shall be subject
to the satisfaction of the following conditions precedent:
1) Loan Documents. Each of this Agreement, the Notes, the Pledge
Agreements, the Collateral Maintenance Agreements and such other
ancillary documents and instruments in furtherance of the
transaction contemplated herein as requested by Bank in
connection with the Loans (the "Loan Documents") shall have been
duly executed and delivered by the respective parties thereto,
shall be in full force and effect and shall be in form and
substance satisfactory to Bank.
2) Necessary Action. All action (whether trust, partnership or
otherwise) necessary for the valid execution, delivery and
performance by each Borrower of this Agreement and the other Loan
Documents to which it is a party shall have been duly and
effectively taken, and evidence thereof satisfactory to Bank
shall have been provided to Bank.
3) Validity of Liens. The Pledge Agreements shall be effective to
create in favor of Bank a legal, valid and enforceable first
priority security interest in and lien upon the collateral
described therein. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the
opinion of Bank to protect and preserve such security interests
shall have been duly effected.
4) Opinion of Counsel. Bank shall have received a favorable
opinion from Borrowers' legal counsel in form and substance
satisfactory to Bank and its counsel regarding such matters
as Bank may request.
B. Conditions to All Borrowings. The obligation of Bank to make any
future advance under any Note shall be subject to the satisfaction of
the following conditions precedent:
1) Representations and Warranties. The representations and
warranties of Borrowers contained herein and in any other Loan
Documents shall be true and correct as of the date of which they
were made and shall also be true and correct at and as of the
time of the advance with the same effect as if made at and as of
that time (except to the extent such representations and
warranties expressly relate to an earlier date) and Bank shall
have received a certificate of a Subagent (as defined herein), to
such effect.
2) No Event of Default. No event of default hereunder or under any
of the other Loan Documents shall have occurred and be continuing
and Bank shall have received a certificate of a Subagent, to such
effect. 3) No Legal Impediment. No change shall have occurred in
any law or regulations thereunder or interpretations thereof that
in the reasonable opinion of Bank would make it illegal for Bank
to make such advance.
4) Proceedings and Documents. All proceedings in connection with the
transactions contemplated hereby and the other Loan Documents
shall be satisfactory in form and substance to Bank and Bank
shall have received all information and documents as Bank may
reasonably request.
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5. FEES. Each Borrower shall pay to Bank an annual commitment fee in the
amount of 1/10 of one percent (0.10%) of the commitment amount set forth
next to such Borrower's name on Schedule I, such fee to be due and payable
on the date hereof and on each annual anniversary thereafter so long as the
Loans are outstanding. Bank acknowledges prior receipt of an aggregate
amount of $30,000, which sum reflects the aggregate commitment fees of the
Borrowers due on the date hereof.
6. AFFIRMATIVE COVENANTS. So long as any Borrower may borrow hereunder and
until payment in full of the Notes and performance of all other obligations
of Borrowers hereunder, each Borrower will:
A. Financial Statements. Maintain a system of accounting satisfactory to
Bank and permit Bank's officers or authorized representatives to visit
such Borrower's offices and inspect such Borrower's books of account
and other records and make photocopies thereof at such reasonable times
and as often as Bank may desire, and pay the reasonable fees and
disbursements of any accountants or other agents of Bank selected by
Bank for the foregoing purposes. Each Borrower agrees to provide Bank
with the following statements and reports:
1) Within one hundred twenty (120) days after the end of each fiscal
year, a balance sheet of such Borrower as of the end of such
fiscal year, which shall be in reasonable detail, complete and
correct in all material respects.
2) Within thirty (30) days after the end of each fiscal quarter and
such other times as Bank may reasonably request, information or
statements respecting each Borrower's trading activity in the
collateral securing the Loans.
B. Existence and Compliance. Maintain its existence and comply with all
laws, regulations and governmental requirements applicable to it or to
any of its property, business and transactions.
C. Adverse Conditions or Events. Promptly advise Bank in writing of any
condition, event or act which comes to its attention that would or
might materially affect such Borrower's financial condition, Bank's
rights in or to any collateral under this Agreement or the other Loan
Documents, and of any litigation filed against such Borrower in which
the potential loss reasonably could be anticipated to exceed $50,000.
D. Taxes. Pay all taxes as the same become due and payable unless timely
extensions have been filed or the same are being contested in good
faith by appropriate proceedings and adequate reserves are maintained.
E. Form U-1. If required by Bank, promptly furnish to Bank a statement
that conforms with the requirements of Federal Reserve Form U-1 as
referred to in Regulation U or in any other relevant Federal Reserve
Form or Regulation provided for from time to time by the Board of
Governors of the Federal Reserve System.
7. NEGATIVE COVENANTS. So long as any Borrower may borrow hereunder and until
payment in full of the Notes and performance of all other obligations of
Borrowers hereunder, no Borrower will, without the prior written consent of
Bank:
A. Transfer of Assets or Control. Permit any transfer of control or
ownership of such Borrower.
B. Amendment of Trust Agreement/Partnership Agreement. No Borrower that is
a trust shall permit any amendment or modification of its trust
agreement or a change of the trustee thereof and ________ shall not
permit any amendment or modification of its agreement of limited
partnership or a change of the general partner.
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8. EVENTS OF DEFAULT. With respect to any particular Borrower, any one or more
of the following events shall be deemed an event of default hereunder as to
such Borrower:
A. Default shall be made in the payment of any installment of principal or
interest upon any Note or any other obligation of a Borrower to Bank
when due and payable, whether at maturity or otherwise and such default
shall continue for three (3) business days thereafter; or
B. Default shall be made by a Borrower in the performance of any term,
covenant or agreement contained herein, any of the other Loan
Documents, or in any other security agreement, deed of trust, mortgage,
assignment or other contract securing payment of any indebtedness of
such Borrower to Bank and such default shall continue for thirty (30)
calendar days following notice thereof being given by Bank to such
Borrower or Agent; or
C. Any representation or warranty herein contained or in any financial
statement, certificate, report or opinion or other agreement submitted
to Bank in connection with the Loans or pursuant to the requirements of
this Agreement shall prove to have been incorrect or misleading in any
material respect when made; or
D. Default shall be made by a Borrower in the performance of any term or
covenant in any agreement or instrument with any other party which
would have a material adverse effect on such Borrower or Bank's rights
hereunder or under the other Loan Documents, and such default is not
remedied within the applicable cure period; or
E. A Borrower makes an assignment for the benefit of creditors, admits in
writing its inability to pay its debts generally as they become due,
files a petition in bankruptcy, is adjudicated insolvent or bankrupt,
petitions or applies to any tribunal for the appointment of any
receiver or any trustee for it or any substantial part of its
property, commences any action relating to a Borrower or any
reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or
hereafter in effect, or if there is commenced against a Borrower any
such action, or a Borrower by any act indicates its consent to or
approval of any trustee for such Borrower or any substantial part of
its property, or suffers any such receivership or trustee to continue
undischarged; or
F. Without the prior written consent of Bank, a Borrower that is a trust
is at any time revoked, terminated or liquidated or ________ is
dissolved or liquidated or _________ dies.
Upon the happening of any of the foregoing events of default which shall be
continuing, Bank may at its option declare all outstanding principal and
unpaid interest on the applicable Loan and any other indebtedness of the
particular defaulting Borrower to Bank to be immediately due and payable,
and Bank shall have no further obligation to fund advances hereunder to
such Borrower. Upon such declaration by Bank, Bank shall have all rights
and remedies available under the Loan Documents as well as those available
at law or in equity. Notwithstanding the foregoing, upon the occurrence of
an event of default described in Section 8.E. to any particular Borrower,
the entire outstanding principal and unpaid interest on the Loan and all
other indebtedness of such Borrower to Bank shall be immediately and
automatically due and payable, without notice to such Borrower of any kind
and Bank's obligation to make advances to such Borrower shall immediately
terminate.
9. APPOINTMENT OF AGENT. Each Borrower hereby appoints and designates
_____________ as agent ("Agent") for and on behalf of such Borrower with
respect to all matters arising under or in connection with this Agreement,
the other Loan Documents and the applicable Loan hereunder including,
without limitation, requesting and receiving advances, making payments on
the applicable Loan, negotiating, executing and delivering modifications or
renewals of the Loan Documents, receiving notices from Bank, delivering
such other documents or instruments as the Bank may request in connection
with the Loans, and generally communicating with Bank regarding such
Borrower's obligations hereunder. Any funds
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advanced hereunder may be distributed to Agent who shall have
responsibility to distribute such funds to the applicable Borrower. Agent
is hereby granted full power and authority to bind each Borrower in respect
of any term, condition, covenant or undertaking hereunder. Bank shall be
entitled to rely on the appointment without any independent verification.
Each Borrower hereby further appoints and designates each and any of ▇▇▇▇▇▇
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and on behalf of such Borrower to perform all administrative functions
under the Loan Documents, including submitting advance requests, receiving
and sending notices and delivering certificates on behalf of such Borrower.
Borrowers shall not remove or otherwise change the Agent without the prior
written consent of Bank. The appointment hereunder is coupled with an
interest and irrevocable.
10. MISCELLANEOUS.
A. Expenses. Each Borrower severally agrees to pay all out-of-pocket
expenses of Bank in connection with this Agreement and the other Loan
Documents and the collection of its applicable Note including, without
limitation, the administration, enforcement and realization upon any
collateral or guaranty. Each Borrower severally also agrees to pay all
reasonable attorneys' fees and all expenses incurred in recording the
documents securing its applicable Loan.
B. Cumulative Rights and No Waiver. Each and every right granted to Bank
hereunder or under any other document delivered hereunder or in
connection herewith, or allowed it by law or equity shall be cumulative
of and may be exercised in addition to any and all other rights of
Bank, and no delay in exercising any right shall operate as a waiver
thereof, nor shall any single or partial exercise by Bank of any right
preclude any other or future exercise thereof or the exercise of any
other right. Any of the foregoing covenants and agreements may be
waived by Bank but only in writing signed by a Vice President or higher
level officer of Bank. Borrower expressly waives any presentment,
demand, protest or other notice of any kind.
No notice to or demand on a Borrower in any case shall, of itself,
entitle such or any other Borrower to any other or further notice or
demand in similar or other circumstances. No delay or omission by Bank
in exercising any power or right hereunder shall impair any such right
or power or be construed as a waiver thereof or any acquiescence
therein, nor shall any single or partial exercise of any such power
preclude other or further exercise thereof, or the exercise of any
other right or power hereunder.
C. Maximum Interest. Notwithstanding any other provision contained in this
Agreement, Bank does not intend to charge and no Borrower shall be
required to pay any amount of interest or other fees or charges that is
in excess of the maximum permitted by applicable law. Each Borrower
agrees that during the full term hereof, the maximum lawful interest
rate for the obligations hereunder as determined under Texas law shall
be the indicated rate ceiling as specified in Article 5069-1.04 of the
V.A.T.S. Further, to the extent that any other lawful rate ceiling
exceeds the rate ceiling so determined, then the higher rate ceiling
shall apply. Any payment in excess of such maximum shall be refunded to
the applicable Borrower or credited against principal, at the option of
Bank.
D. Applicable Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and interpreted in accordance
with the laws of the State of Texas (without regard to its conflicts of
law provisions).
E. Notice. Except as otherwise provided in this Agreement, any notices or
communications required or permitted hereunder shall be in writing and
shall be deemed to have been given (i) the day it is personally
delivered, if sent by hand or expedited delivery service, or (ii) five
days after it is mailed, if sent by certified or registered mail.
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F. Amendment. No modification, consent, amendment or waiver of any
provision of this Agreement, nor consent to any departure by a Borrower
therefrom, shall be effective unless the same shall be in writing and
signed by a Vice President or higher level officer of Bank, and then
shall be effective only in the specific instance and for the purpose
for which given. This Agreement is binding upon each Borrower, its
successors and assigns, and inures to be benefit of Bank, its
successors and assigns.
G. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY
CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY
BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR
IF NOT APPLICABLE, THE APPLICABLE STATE LAW). THE RULES OF PRACTICE AND
PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF JUDICIAL
ARBITRATION AND MEDIATION SERVICES, INC. (J.A.M.S.), AND THE "SPECIAL
RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL
RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED
IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS AGREEMENT MAY BRING
AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL
ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES
IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN DALLAS,
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TEXAS AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR;
IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE
ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE.
ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE
DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A
SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH
HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
B. RESERVATION OF RIGHTS. NOTHING IN THIS AGREEMENT SHALL BE DEEMED
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TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE
STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
AGREEMENT; OR (II) BE A WAIVER BY THE BANK OF THE PROTECTION
AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY
EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE BANK (A) TO
EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF,
OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY
COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY
REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF
POSSESSION OR THE APPOINTMENT OF A RECEIVER. THE BANK MAY EXERCISE
SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN
SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE
PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS
AGREEMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE
INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR
PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE
RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES.
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H. NOTICE OF FINAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
TRUST
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NATIONSBANK OF TEXAS, N.A.
By: By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇ , Trustee
Vice President, -------------------------
Private Banking
TRUST
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By:
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, Trustee
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TRUST
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By:
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, Trustee
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TRUST
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By:
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, Trustee
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TRUST
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By:
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, Trustee
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-------------------------------------, LTD.
By:
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------------------,
General Partner
The undersigned hereby acknowledges appointment as Agent for the Borrowers
hereunder.
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SCHEDULE I
Borrower Maximum Loan Amount
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---------------------------- $
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$
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