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SECURITIES AND EXCHANGE COMMISSIONS
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
LIBERTE INVESTORS INC.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
530154-10-3
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(CUSIP Number)
with a copy to:
Gerald J. Ford Michael D. Wortley
200 Crescent Court Vinson & Elkins, L.L.P.
Suite 1350 3700 Trammell Crow Center
Dallas, Texas 75201 2001 Ross Avenue
(214) 871-5131 Dallas, Texas 75201-2975
(214) 220-7732
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 16, 1996
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
Check the following box if a fee is being paid with this statement. [X] (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such class.
See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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1) Names of Reporting Persons (S.S. or I.R.S. Identification Nos. of above
Persons):
Gerald J. Ford ###-##-####
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a) Not Applicable
(b) Not Applicable
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3) SEC Use Only
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4) Source of Funds (See Instructions): BK, OO
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d)
or 2(e): Not Applicable
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6) Citizenship or Place of Organization:
United States
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Number of 7) Sole Voting Power: 8,102,439*
Shares Beneficially 8) Shared Voting Power: 0
Owned by
Each Reporting 9) Sole Dispositive Power: 8,102,439*
Person With: 10) Shared Dispositive Power: 0
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11) Aggregate Amount Beneficially Owned by Each Reporting Person:
8,102,439*
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions):
Not Applicable
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13) Percent of Class Represented by Amount in Row (11):
40%*
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14) Type of Reporting Person (See
Instructions): IN
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*8,102,439 shares (40.0%) of Liberte Investors Inc. common stock are owned by
Hunter's Glen/Ford, Ltd., a Texas limited partnership. The general partners of
Hunter's Glen/Ford, Ltd. are Gerald J. Ford and Ford Diamond Corporation, a
Texas corporation wholly-owned by Gerald J. Ford. As general partner
individually and as sole shareholder and director of Ford Diamond Corporation,
Gerald J. Ford possesses sole voting and investment control over all shares of
Liberte Investors Inc. currently owned by Hunter's Glen/Ford, Ltd.
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Item 1. Security and Issuer
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This statement relates to the common stock, $.01 par value per share, of Liberte
Investors Inc., whose principle executive offices are located at 600 N. Pearl
Street, Suite 420, Dallas, Texas 75201.
Item 2. Identity and Background
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The person filing this statement is Gerald J. Ford, whose business address is
200 Crescent Court, Suite 1350, Dallas, Texas, 75201. Mr. Ford's principal
occupation is Chairman and Chief Executive Officer of First Nationwide Bank, a
Federal Savings Bank. The executive offices of First Nationwide Bank are at 200
Crescent Court, Suite 1350, Dallas, Texas, 75201.
Mr. Ford also serves as general partner of Hunter's Glen/Ford, Ltd., a Texas
limited partnership, having its principal executive office at 200 Crescent
Court, Suite 1350, Dallas, Texas, 75201. Hunter's Glen/Ford, Ltd. was organized
for estate planning purposes and currently owns a) 20% of the common stock of
First Nationwide Holdings Inc., a holding company whose significant asset is all
of the outstanding shares of common stock of First Nationwide Bank, a Federal
Savings Bank, and b) 40% of the common stock of Liberte Investors Inc. The
other general partner of Hunter's Glen/Ford, Ltd. is Ford Diamond Corporation.
The sole limited partner of Hunters Glen/Ford, Ltd. is a trust established for
the benefit of Mr. Ford's children.
Ford Diamond Corporation is a Texas corporation having its principal executive
office at 200 Crescent Court, Suite 1350, Dallas, Texas, 75201. Ford Diamond
Corporation is wholly-owned by Mr. Ford and serves as general partner of Ford
family partnerships.
Mr. Ford has never been convicted in any criminal proceeding, nor has he been a
party to any civil proceeding commenced before a judicial or administrative body
of competent jurisdiction as a result of which he was or is now subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws. Mr. Ford is a citizen of the United
States.
Item 3. Source and Amount of Funds or Other Consideration
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Of the approximately $23.1 million aggregate purchase price for the shares
purchased, Hunter's Glen/Ford, Ltd. borrowed $6 million under a $10 million
revolving credit facility with NationsBank of Texas, N.A. Amounts loaned under
such credit facility bear interest, at the option of Hunter's Glen/Ford, Ltd.,
either at (i) the Prime Rate announced by NationsBank of Texas, N.A. from time
to time or (ii) a LIBOR rate, as determined by NationsBank of Texas, N.A., for
the relevant interest period plus 2% per annum. Amounts bearing interest at the
LIBOR-based rate must be repaid at the end of the relevant interest period.
Amounts bearing interest at the Prime Rate must be repaid on August 14, 1997.
The repayment of amounts loaned under this credit facility is secured by a
pledge of all 8,102,439 shares of Common Stock owned by Hunter's Glen/Ford, Ltd.
Hunter's Glen/Ford, Ltd. borrowed the remaining $17.1 million of the purchase
price from Mr. Ford under an unsecured promissory note. The note bears interest
at the 90-day Eurodollar rate as announced by NationsBank of Texas, N.A. plus
one percent (1%) per annum, adjusted quarterly on September 30, December 31,
March 31, and June 30. The note requires accrued interest to be paid semi-
annually on April 15 and October 15. The unpaid principal balance is due
October 15, 1997.
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Item 4. Purpose of Transaction
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The acquisition of the shares of common stock of Liberte Investors Inc. is
solely for investment purposes. Plans are in process to elect additional
officers of Liberte Investors Inc., including a new principal accounting officer
and secretary to the board, and to elect two additional directors at the next
annual meeting. Further, Liberte Investors Inc. plans to pursue an acquisition
of an operating company, which will be financed with cash and/or borrowings.
Mr. Ford has no other present plans required to be described in Item 4.
Item 5. Interest in Securities of the Issuer
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On August 16, 1996, Hunter's Glen/Ford, Ltd. acquired 8,102,439 shares of common
stock of Liberte Investors Inc. representing 40.0% of the 20,256,097 shares of
common stock outstanding. Gerald J. Ford possesses sole power to vote and
direct the disposition of all shares of common stock of Liberte Investors Inc.
owned by Hunter's Glen/Ford, Ltd. in his capacity as general partner and sole
shareholder and director of the corporate general partner, Ford Diamond
Corporation.
The following table details the transactions in shares of common stock of
Liberte Investors Inc. during the past sixty days:
<TABLE>
<CAPTION>
Date Transaction Quantity Price
-------------- ------------------------------------ ------------------------- -----------
<S> <C> <C> <C>
August 16, 1996 Purchase by Hunter's Glen/Ford, Ltd. 8,102,439 $2.85/Share
in Dallas, Texas (Mr. Ford has beneficial
ownership of all such
shares.)
</TABLE>
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
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to Securities of the Issuer
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As described in Item 3, the 8,102,439 shares owned by Hunter's Glen/Ford, Ltd.
have been pledged to NationsBank of Texas, N.A. to secure the repayment by
Hunter's Glen/Ford, Ltd. of amounts borrowed from NationsBank of Texas, N.A. If
Hunter's Glen/Ford, Ltd. were to default on its obligations under the documents
relating to such loan, NationsBank of Texas, N.A. could foreclose upon its
security interest in such shares and cause a transfer of such shares to it in
foreclosure, or to another party in a foreclosure sale.
Hunter's Glen/Ford, Ltd. and the issuer entered into a Registration Rights
Agreement on August 16, 1996. Under this agreement, Hunter's Glen/Ford, Ltd.
has the right to require the issuer to file a shelf registration statement
registering the sale of its shares, and to require the issuer to use its
commercially reasonable efforts to maintain the effectiveness of the
registration statement for two years. In addition, Hunter's Glen/Ford, Ltd. has
the right to make two demands upon the Company to register its sale of shares in
underwritten offerings, provided that the shares to be sold have a fair market
value in excess of $5.0 million. Finally, Hunter's Glen/Ford, Ltd. may require
the Company to register the sale of its shares if the issuer proposes to file a
registration statement for its account or the account of its security owners,
subject to certain exceptions.
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In addition, Hunter's Glen/Ford, Ltd. the issuer, R. Ted Enloe III and the Enloe
Descendants' Trust entered into the Agreement Clarifying Registration Rights on
August 16, 1996. This agreement generally permitted Hunter's Glen/Ford, Ltd. to
exercise "piggy-back" registration rights in connection with any exercise of
demand registration rights by the Enloe Descendants' Trust and permitted the
Enloe Descendants' Trust, Mr. Enloe and his wife to exercise "piggy-back"
registration rights in connection with any exercise of demand registration
rights by Hunter's Glen/Ford, Ltd..
In addition, the issuer's Certificate of Incorporation contains restrictions on
certain transfers of shares, including the shares beneficially owned by Mr.
Ford.
No other contracts, arrangements, understandings or similar relationships exist
with respect to the shares of common stock of Liberte Investors Inc. between
Gerald J. Ford and any person or entity.
Item 7. Material to be Filed as Exhibits
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Exhibit A: Loan agreement dated August 15, 1996 between Hunter's Glen/Ford,
Ltd. and NationsBank of Texas, N.A.
Exhibit B: Promissory note dated August 15, 1996 between Hunter's Glen/Ford,
Ltd. and NationsBank of Texas, N.A.
Exhibit C: Pledge Agreement dated August 15, 1996 between Hunter's Glen/Ford,
Ltd. and NationsBank of Texas, N.A.
Exhibit D: Promissory Note dated August 16, 1996 between Hunter's Glen/Ford,
Ltd. and Gerald J. Ford.
Signature
---------
After reasonable inquiry and to the best of the undersigned's knowledge and
belief, the undersigned hereby certifies that the information set forth in this
statement is true, complete and correct.
August 26, 1996
/s/ Gerald J. Ford
---------------------------
Gerald J. Ford
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EXHIBIT A
LOAN AGREEMENT DATED AUGUST 15, 1996
BETWEEN
HUNTER'S GLEN/FORD, LTD. AND
NATIONSBANK OF TEXAS, N.A.
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NATIONSBANK LOAN AGREEMENT
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DATE: AUGUST 15, 1996
Between
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Borrower: Bank:
Hunter's Glen/Ford, Ltd. and NationsBank of Texas, N.A.
200 Crescent Court 901 Main Street
Suite 1350 19th Floor
Dallas, Texas 75201 Dallas, Texas 75202
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This Loan Agreement ("Agreement") is made on the above date between Borrower and
Bank.
1. THE LOAN.
A. Bank agrees to lend and Borrower agrees to borrow an amount not to exceed
the sum of Ten Million and No/100 Dollars ($10,000,000.00) (the "Loan") on
the terms and conditions set forth herein. The Loan will be evidenced by a
Promissory Note in the form attached hereto as Exhibit A, or any renewal
thereof, with interest and principal payable as stated therein (the
"Note").
B. The Loan provides for a revolving line of credit under which Borrower may
from time to time borrow, repay and reborrow funds. The Loan shall mature
on August 14, 1997 unless sooner accelerated in accordance with the terms
hereof.
2. COLLATERAL. The Loan is to be secured by a pledge of certain securities
pursuant to a Pledge Agreement (the "Pledge Agreement") of even date herewith
between Borrower and Bank, and by an Assignment of Rights also of even date
herewith between Borrower and Bank (the "Assignment of Rights").
3. REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Bank as follows:
A. GOOD STANDING. Borrower is a limited partnership duly organized and
validly existing under the laws of the State of Texas and has the power to
own its property and to carry on its business in each jurisdiction in
which it owns properties or conducts business.
B. AUTHORITY AND COMPLIANCE. Borrower has full power and authority to enter
into this Agreement, to make the borrowings hereunder, to execute and
deliver the Note and the other Loan Documents (as defined herein) to which
it 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
partnership action. No unobtained consent or approval of partners or any
public authority is required as a condition to the validity of this
Agreement, the Note or the other Loan Documents or the performance
hereunder, and Borrower is in compliance with all laws and regulatory
requirements to which it is subject.
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C. BINDING AGREEMENT. This Agreement, the Note and the other Loan Documents
to which Borrower is a party constitute valid and legally binding
obligations of Borrower, enforceable in accordance with their terms.
D. FINANCIAL STATEMENTS. The books and records of Borrower properly reflect
Borrower's financial condition, and there has been no material change in
Borrower's financial condition as represented in its financial statements
dated March 31, 1996 delivered to Bank.
E. LITIGATION. There are no proceedings pending or, to the best knowledge of
Borrower, threatened before any court or administrative agency that will or
may have a material adverse effect on the financial condition or operations
of Borrower or that seek to enjoin or delay the purchase described in
Section 3.H below.
F. NO CONFLICTING AGREEMENTS. There are no provisions of Borrower's agreement
of limited partnership and no provisions of any existing agreement,
mortgage, indenture or contract binding on Borrower or affecting its
property or business, that would conflict with or in any way prevent the
execution, delivery or carrying out of the terms of this Agreement, the
Note and the other Loan Documents.
G. 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.
H. USE OF PROCEEDS. The proceeds of the Loan will be used by Borrower to (i)
partially finance its purchase of 8,102,439 shares of common stock of
Liberte Investors Inc., a Delaware corporation, pursuant to that certain
Stock Purchase Agreement dated January 16, 1996 between Borrower and
Liberte Investors Inc. (as amended most recently by that certain Second
Amendment to the Stock Purchase Agreement dated as of March 28, 1996, the
"Stock Purchase Agreement") and (ii) invest in such other securities, and
make such other investments, as Borrower deems reasonable and prudent.
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 Loan 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 Borrower, nor
any person acting on behalf of Borrower, has taken or will take any action
that might cause the Note or this Agreement to violate Regulations G, T or
U or any other regulation of the Board of Governors of the Federal Reserve
System or violate the Securities Exchange Act of 1934, as amended, or any
rule or regulation thereunder, in each case as now in effect or as the same
may hereafter be in effect.
I. 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 the
Note.
4. CLOSING CONDITIONS
A. CONDITIONS TO INITIAL ADVANCE. The obligation of Bank to execute this
Agreement and to make the initial advance hereunder shall be subject to the
satisfaction of the following conditions precedent:
1) LOAN DOCUMENTS. Each of this Agreement, the Note, the Pledge
Agreement, and such other ancillary documents and instruments in
furtherance of the transactions contemplated herein as requested by Bank
in connection with the Loan (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.
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2) PARTNERSHIP ACTION. All partnership action necessary for the valid
execution, delivery and performance by 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. Each of the Pledge Agreement and the Assignment of
Rights 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
Borrower's legal counsel in form and substance satisfactory to Bank and
its counsel regarding such matters as Bank may request.
5) STOCK PURCHASE AGREEMENT. The closing contemplated by the Stock
Purchase Agreement shall have been consummated in accordance with the
terms thereof (and without the waiver of any such terms, except such
waivers as would not materially adversely affect Borrower's or Bank's
rights thereunder).
6) CORPORATE GENERAL PARTNER. Bank shall have received recent financial
statements of Ford Diamond Corporation (including a balance sheet,
income statement and disclosure of contingent liabilities) and the
information and other matters disclosed thereon shall be in form and
substance satisfactory to Bank and its counsel.
B. CONDITIONS TO ALL BORROWINGS. The obligation of Bank to make any future
advance under the Note shall be subject to the satisfaction of the
following conditions precedent:
1) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Borrower 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 Borrower signed by a general
partner to such effect.
2) NO EVENT OF DEFAULT. No Event of Default (as defined in the Note) shall
have occurred and be continuing and Bank shall have received a
certificate of Borrower signed by a general partner 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.
5. AFFIRMATIVE COVENANTS. So long as Borrower may borrow hereunder and until
payment in full of the Note and performance of all other obligations of
Borrower hereunder, Borrower will:
A. FINANCIAL STATEMENTS. Maintain a system of accounting satisfactory to Bank
and in accordance with generally accepted accounting principles
consistently applied ("GAAP"), and, with reasonable prior notice, permit
Bank's officers or authorized representatives to visit Borrower's offices
and inspect
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Borrower's books of account and other records and make photocopies thereof
at such reasonable times and as often as Bank may desire, and will pay the
reasonable fees and disbursements of any accountants or other agents of
Bank selected by Bank for the foregoing purposes. Borrower agrees to
provide Bank with the following statements and reports:
1) Within ninety (90) days after the end of each June 30 and December 31,
a balance sheet of Borrower as of such June 30 or December 31, as
applicable, and an income statement and a statement of cash flows of
Borrower, each for the six months ended such June 30 or December 31, as
applicable, all of which shall be in reasonable detail, complete and
correct in all material respects, and prepared in accordance with GAAP.
2) Within ninety (90) days after the end of each fiscal year, audited
financial statements of Borrower and Ford Diamond Corporation, each as
of the end of such fiscal year and for the fiscal year then ended, all
of which shall be in reasonable detail, complete and correct in all
material respects, and prepared in accordance with GAAP (provided, that
if despite Borrower's reasonable diligence in preparing such financial
statements it is impractical for Borrower to provide Bank with the same
within such ninety (90) day period, then no Event of Default shall
result if Borrower instead provides Bank with such statements as soon as
practical and in any event within one hundred twenty (120) days after
the end of such fiscal year).
3) Within thirty (30) days after each June 30 and December 31, and such
other times as Bank may reasonably request, executed certificates in
form and substance satisfactory to Bank (a) evidencing Borrower's
compliance with Sections 6.C and 6.D of this Agreement and (b) regarding
Borrower's receipt of cash dividends from First Nationwide Holdings,
Inc., in each case as of such date and for applicable periods then
ended.
B. EXISTENCE AND COMPLIANCE. Maintain its partnership 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 that comes to its attention which would or might
materially affect 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 Borrower in which the potential loss reasonably
could be anticipated to exceed $250,000.
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 therefor.
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.
6. NEGATIVE COVENANTS. So long as Borrower may borrow hereunder and until
payment in full of the Note and performance of all other obligations of
Borrower hereunder, Borrower will not, without the prior written consent of
Bank:
A. TRANSFER OF ASSETS OR CONTROL. Permit any transfer of control or ownership
of Borrower or of Borrower's general partners.
B. CHANGE IN GENERAL PARTNER. Permit a change of any general partner of
Borrower.
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C. DEBT. Permit Borrower's Debt to ever exceed $2,500,000.00, exclusive of
(i) amounts due under the Note and (ii) amounts due by Borrower to Gerald
J. Ford, or entities directly or indirectly controlled by him, in respect
of advances or loans to Borrower. For purposes of the foregoing sentence,
Debt means, whether or not contingent, (a) debt for borrowed money or for
the deferred purchase price of property or services (other than current
trade liabilities) or that is evidenced by a note, bond, debenture or
similar instrument, (b) capitalized lease obligations, (c) obligations in
respect of letters of credit or bankers' acceptances, (d) liabilities
secured by any lien on any property owned by the debtor even if the debtor
has not assumed or otherwise become liable for the payment thereof, to the
extent of the value of the property subject to such lien, (e) any guaranty
of any lease obligation, and (f) to the extent not otherwise included, any
guaranty of any debt, obligation or liability described in clauses (a)
through (e) above.
D. MINIMUM BOOK VALUE. Permit the net worth of Borrower, as determined in
accordance with GAAP, to ever be less than $100,000,000.00.
E. NEGATIVE PLEDGE, ETC. Directly or indirectly transfer or otherwise dispose
of any shares of First Nationwide Holdings, Inc. presently owned by
Borrower, or create, or permit or suffer to exist any lien, encumbrance,
charge or security interest of any kind on such shares (other than as
created by this Section 6.E). For purposes of the foregoing sentence,
"presently owned" includes any additional shares received in connection
with a stock split, stock dividend, recapitalization or reclassification of
capital stock, in each case in which shares owned as of the date hereof are
the basis or consideration for such additional shares.
F. SUBORDINATION. During the occurrence and continuance of an Event of
Default (as defined in the Note), make any payments, of principal, interest
or otherwise, in respect of obligations to Gerald J. Ford or entities
affiliated with him, all of which obligations shall then be subordinate in
right of payment as provided in that certain Subordination Agreement
(Effective During Default) dated of even date herewith between Bank and
Gerald J. Ford.
7. ACCOUNTS OR DEPOSITS OF GERALD J. FORD. Notwithstanding any provision herein
or in any of the other Loan Documents to the contrary, Bank shall not attempt
to set off, capture, or restrict the use of any of the accounts or deposits
of Gerald J. Ford with Bank to discharge any of the obligations arising under
the Loan Documents unless Bank has first received a judgment against Mr. Ford
evidencing his obligation to pay such obligations, and then only as permitted
by applicable law.
8. MISCELLANEOUS.
A. EXPENSES. Borrower agrees to pay all reasonable out-of-pocket expenses of
Bank in connection with this Agreement, the Note and the other Loan
Documents and the collection of the Note including, without limitation,
reasonable attorneys' fees, and expenses relating to the administration,
enforcement and realization upon any collateral or guaranty.
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.
No notice to or demand on Borrower in any case shall, of itself, entitle
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
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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 Borrower shall not be
required to pay any amount of interest or other fees or charges that is in
excess of the maximum permitted by applicable law. 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 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 Borrower or credited against
principal, at the option of Bank.
D. 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.
E. 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).
F. AMENDMENT. No modification, consent, amendment or waiver of any provision
of this Agreement, nor consent to any departure by 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 Borrower, its successors and assigns, and inures
to the 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
INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, 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
J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF ("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 INSTRUMENT, AGREEMENT OR
DOCUMENT 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.
1) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE COUNTY OF ANY
BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS INSTRUMENT,
AGREEMENT OR DOCUMENT 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.
6
<PAGE>
2) RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL BE
DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE
STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS
INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY 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 BANK HERETO (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. 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 INSTRUMENT, AGREEMENT OR DOCUMENT. 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.
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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
HUNTER'S GLEN/FORD, LTD. NATIONSBANK OF TEXAS, N.A.
By: /s/ Gerald J. Ford By: /s/ Michele Huff
------------------------- ---------------------------
GERALD J. FORD Michele Huff
General Partner Vice President, Private Client Group
By: FORD DIAMOND CORPORATION
General Partner
By: /s/ Gerald J. Ford
------------------------
Gerald J. Ford
President
---------
7
<PAGE>
EXHIBIT B
PROMISSORY NOTE DATED AUGUST 15, 1996
BETWEEN
HUNTER'S GLEN/FORD, LTD. AND
NATIONSBANK OF TEXAS, N.A.
<PAGE>
NATIONSBANK
PROMISSORY NOTE
Date: August 15, 1996 [X] New [ ] Renewal Amount: $10,000,000.00
Maturity Date: August 14, 1997
- --------------------------------------------------------------------------------
Bank: Borrower:
NationsBank of Texas, N.A. Hunter's Glen/Ford, Ltd.
901 Main Street, 19th Floor 200 Crescent Court, Suite 1350
Dallas, Texas 75202 Dallas, Texas 75201
Dallas County Dallas County
(Street address including county) (Name and street address, including county)
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned Borrower unconditionally (and jointly and
severally, if more than one) promises to pay to the order of Bank, its
successors and assigns, without setoff, at its offices indicated at the
beginning of this Note, or at such other place as may be designated by Bank, the
principal amount of TEN MILLION and No/100 Dollars ($10,000,000.00), or so much
thereof as may be advanced from time to time in immediately available funds,
together with interest computed daily on the outstanding principal balance
hereunder, at an annual interest rate, and in accordance with the payment
schedule, indicated below.
1. ADVANCE REQUEST. Each advance (sometimes herein also referred to as a
"loan") shall be made by written request therefor to Bank (stating whether the
advance is to bear interest at the Prime Rate or a Libor Rate, the amount of the
advance, the date of the advance and in the case of each Libor Rate advance, the
Libor Interest Period for such advance) not later than 11:00 a.m., Dallas,
Texas, time, given by Borrower to Bank (i) as to any Libor Rate advance, at
least two (2) Business Days prior to the date of such advance and (ii) as to any
Prime Rate advance, on the day of such advance (with all defined terms not
previously defined being defined as provided in Exhibit A attached hereto).
Bank shall on the date of the advance, not later than 1:00 p.m., Dallas, Texas,
time, in immediately available funds, deposit the proceeds of such advance in
the general deposit account of Borrower with Bank.
2. RATE. SEE EXHIBIT A (INTEREST OPTION PROVISIONS) ATTACHED HERETO AND
INCORPORATED HEREIN BY REFERENCE. Notwithstanding any provision of this Note,
Bank does not intend to charge and Borrower shall not be required to pay any
amount of interest or other charges in excess of the maximum permitted by
applicable law. Borrower agrees that during the full term hereof, the maximum
lawful interest rate for this Note as determined under Texas law shall be the
indicated rate ceiling as specified in Article 5069-1.04 of 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 Borrower or credited against principal, at the
option of Bank.
3. ACCRUAL METHOD. Interest at the Rate set forth above will be calculated
based on the number of actual days elapsed, and computed as if each year
considered of 365 or 366 days, as the case may be.
4. RATE CHANGE DATE. Any interest rate based on a fluctuating index or base
rate will change, unless otherwise provided, each time and as of the date that
the index or base rate changes.
5. PAYMENT SCHEDULE. All payments received hereunder shall be applied first to
the payment of any expense or charges payable hereunder or under any other loan
documents executed in connection with this Note, then to interest due and
payable, with the balance applied to principal, or in such other order as Bank
shall determine at its option.
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<PAGE>
Borrower shall repay the principal amount of each advance under this Note
on the earliest of (i) acceleration by Bank pursuant to Section 11, (ii) with
respect to each advance under this Note bearing interest based on a Libor Rate
Option, the last day of Libor Interest Period for such advance, and (iii) with
respect to advances under this Note bearing interest based on a Prime Rate
Option, on August 14, 1997.
6. REVOLVING FEATURE. Borrower may borrow, repay and reborrow hereunder at any
time, up to a maximum aggregate amount outstanding at any one time equal to the
principal amount of this Note, provided that Borrower is not in default under
any provision of this Note, any other documents executed in connection with this
Note, or any other note or other loan documents now or hereafter executed in
connection with any other obligation of Borrower to Bank, and provided that the
borrowings hereunder do not exceed any borrowing base or other limitation on
borrowings by Borrower. Bank shall incur no liability for its refusal to
advance funds based upon its determination that any conditions of such further
advances have not been met. Bank records of the amounts borrowed from time to
time shall be conclusive proof thereof.
7. WAIVERS, CONSENTS AND COVENANTS. Borrower or any indorser or guarantor
hereof (individually an "Obligor" and collectively "Obligors") and each of them
jointly and severally: (a) waive presentment, demand, protest, notice of demand,
notice of intent to accelerate, notice of acceleration of maturity, notice of
protest, notice of nonpayment, notice of dishonor, and any other notice required
to be given under the law to any Obligor in connection with the delivery,
acceptance, performance, default or enforcement of this Note, any indorsement or
guaranty of this Note, or any other documents executed in connection with this
Note (the "Loan Documents") or any other note or other loan documents now or
hereafter executed in connection with any obligation of Borrower to Bank; (b)
consent to all delays, extensions, renewals or other modifications of this Note
or the Loan Documents, or waivers of any term hereof or of the Loan Documents,
or release or discharge by Bank of any of Obligors, or release, substitution or
exchange of any security for the payment hereof, or the failure to act on the
part of Bank, or any indulgence shown by Bank (without notice to or further
assent from any of Obligors), and agree that no such action, failure to act or
failure to exercise any right or remedy by Bank shall in any way affect or
impair the obligations of any Obligors or be construed as a waiver by Bank of,
or otherwise affect, any of Bank's rights under this Note, under any indorsement
or guaranty of this Note or under any of the Loan Documents; and (c) agree to
pay, on demand, all reasonable costs and expenses of collection or defense of
this Note or of any indorsement or guaranty hereof and/or the enforcement or
defense of Bank's rights with respect to, or the administration, supervision,
preservation, or protection of, or realization upon, any property securing
payment hereof, including, without limitation, reasonable attorney's fees,
including fees related to any suit, mediation or arbitration proceeding, out of
court payment agreement, trial, appeal, bankruptcy proceedings or other
proceeding, in such amount as may be determined reasonable by any arbitrator or
court, whichever is applicable.
8. PREPAYMENTS. All prepayments of principal shall be applied consistent with
Borrower's instructions, or in the absence of such instructions in such order as
Bank shall determine in its sole discretion. Prepayments may be made in whole
or in part at any time, without premium or penalty, on any loan for which the
Rate is based on the Prime Rate. No prepayment of any loan based on a Libor
Rate shall be permitted without the prior written consent of Bank.
Notwithstanding such prohibition, if there is a prepayment of any such loan
based on a Libor Rate, whether by consent of Bank, or because of acceleration or
otherwise, Borrower shall, within 15 days of any request by Bank, pay to Bank
any loss or expense which Bank may incur or sustain as a result of such
prepayment. For the purposes of calculating the amounts owed only, it shall be
assumed that Bank actually funded or committed to fund the loan evidenced hereby
based on a Libor Rate through the purchase of an underlying deposit in an amount
and for a term comparable to such loan, and such determination by Bank shall be
conclusive, absent a manifest error in computation.
9. EVENTS OF DEFAULT. It shall be an event of default ("Event of Default")
under this Note and each of any other documents executed in connection herewith
if any of the following shall occur: (i) Borrower shall fail to make any
payment of principal, interest or other amounts under this Note when due and
such default shall continue for a period of five (5) Business Days; (ii)
Borrower shall not have received cash dividend income from First Nationwide
Holdings, Inc. of $7,000,000.00 or more during each six months ending June
2
<PAGE>
30 and December 31; (iii) a default, breach or failure to timely and properly
pay, observe or perform, shall occur under any other Loan Document and such
default, breach, or other failure, if the same can be cured, shall continue for
a period of fifteen (15) Business Days after notice by Bank to Borrower thereof;
(iv) any voluntary bankruptcy proceeding or any similar action is commenced with
respect to Borrower or any of its assets; (v) any involuntary bankruptcy
proceeding or similar action is commenced with respect to Borrower or any of its
assets and such proceeding is not dismissed within 60 days after commencement;
(vi) Bank shall in good faith believe that the prospect of payment of amounts
due with respect to this Note has been impaired; (vii) any representation or
warranty made by Borrower in connection with this Note shall be false or
incorrect in any material respect when made or deemed made and, if the same can
be made true or corrected, such falsity or incorrectness shall continue for a
period of fifteen (15) Business Days after notice by Bank to Borrower thereof;
or (viii) the resignation or withdrawal of any general partner of Borrower (but
not any deemed resignation or withdrawal resulting from the death of an
individual general partner).
10. REMEDIES UPON DEFAULT. Whenever an Event of Default has occurred and is
continuing (a) the entire balance outstanding hereunder and all other
obligations of any Obligor to Bank (however acquired or evidenced) arising under
or in connection with the Loan Documents shall, at the option of Bank, become
immediately due and payable and any obligation of Bank to permit further
borrowing under this Note shall immediately cease and terminate, and/or (b) to
the extent permitted by law, the rate of interest on the unpaid principal shall
be increased at Bank's discretion up to the lesser of (i) the maximum rate
allowed by law or (ii) the Prime Rate plus 4% per annum (the "Default Rate").
The provisions herein for a Default Rate shall not be deemed to extend the time
for any payment hereunder or to constitute a "grace period" giving Obligors a
right to cure any default. At Bank's option, any accrued and unpaid interest,
fees or charges may, for purposes of computing and accruing interest on a daily
basis after the due date of this Note or any installment thereof, be deemed to
be a part of the principal balance, and interest shall accrue on a daily
compounded basis after such date at the Default Rate provided in this Note until
the entire outstanding balance of principal and interest is paid in full. Upon
an Event of Default under this Note, Bank is hereby authorized at any time, at
its option and without notice or demand, to set off and charge against any
deposit accounts of any Obligor (as well as any money, instruments, securities,
documents, chattel paper, credits, claims, demands, income and any other
property, rights and interests of any Obligor), that at any time shall come into
the possession or custody or under the control of Bank or any of its agents,
affiliates or correspondents, any and all obligations due hereunder.
Additionally, Bank shall have all rights and remedies available under each of
the Loan Documents, as well as all rights and remedies available at law or in
equity.
11. NON-WAIVER. The failure at any time of Bank to exercise any of its options
or any other rights hereunder shall not constitute a waiver thereof, nor shall
it be a bar to the exercise of any of its options or rights at a later date.
All rights and remedies of Bank shall be cumulative and may be pursued singly,
successively or together, at the option of Bank. The acceptance by Bank of any
partial payment shall not constitute a waiver of any default or Event of Default
or of any of Bank's rights under this Note. No waiver of any of its rights
hereunder, and no modification or amendment of this Note, shall be deemed to be
made by Bank unless the same shall be in writing, duly signed on behalf of Bank;
each such waiver shall apply only with respect to the specific instance
involved, and shall in no way impair the rights of Bank or the obligations of
Obligors to Bank in any other respect at any other time.
12. APPLICABLE LAW, VENUE AND JURISDICTION. Borrower agrees that this Note
shall be deemed to have been made in the State of Texas at Bank's address
indicated at the beginning of this Note and shall be governed by, and construed
in accordance with, the laws of the State of Texas and is performable in the
City and County of Texas indicated at the beginning of this Note. In any
litigation in connection with or to enforce this Note or any indorsement or
guaranty of this Note or any Loan Documents, Obligors, and each of them,
irrevocably consent to and confer personal jurisdiction on the courts of the
State of Texas or the United States courts located within the State of Texas.
Nothing contained herein shall, however, prevent Bank from bringing any action
or exercising any rights within any other state or jurisdiction or from
obtaining personal jurisdiction by any other means available under applicable
law.
3
<PAGE>
13. PARTIAL INVALIDITY. The unenforceability or invalidity of any provision of
this Note shall not affect the enforceability or validity of any other provision
herein and the invalidity or unenforceability of any provision of this Note or
of the Loan Documents to any person or circumstance shall not affect the
enforceability or validity of such provision as it may apply to other persons or
circumstances.
14. BINDING EFFECT. This Note shall be binding upon and inure to the benefit
of Borrower, Obligors and Bank and their respective successors, assigns, heirs
and personal representatives, provided, however, that no obligations of Borrower
-------- -------
or Obligors hereunder can be assigned without prior written consent of Bank.
15. CONTROLLING DOCUMENT. To the extent that this Note conflicts with or is in
any way incompatible with any other document related specifically to the loan
evidenced by this Note, this Note shall control over any other such document,
and if this Note does not address an issue, then each other such document shall
control to the extent that it deals most specifically with an issue.
16. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, 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 J.A.M.S./ENDISPUTE OR
ANY SUCCESSOR THEREOF ("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 INSTRUMENT, AGREEMENT OR DOCUMENT 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 THE COUNTY OF ANY
BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS INSTRUMENT, AGREEMENT
OR DOCUMENT 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 ARBITRATION PROVISION SHALL BE
DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR
DOCUMENT; OR (II) BE A WAIVER BY 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 BANK HERETO (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. 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
INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES
NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL
OR ANCILLARY REMEDIES
4
<PAGE>
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.
BORROWER REPRESENTS TO BANK THAT THE PROCEEDS OF THIS LOAN ARE TO BE USED
PRIMARILY FOR BUSINESS, COMMERCIAL OR AGRICULTURAL PURPOSES. BORROWER
ACKNOWLEDGES HAVING READ AND UNDERSTOOD, AND AGREES TO BE BOUND BY, ALL TERMS
AND CONDITIONS OF THIS NOTE.
NOTICE OF FINAL AGREEMENT:
THIS WRITTEN PROMISSORY NOTE 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.
BANK: NATIONSBANK OF TEXAS, N.A. BORROWER:
HUNTER'S GLEN/FORD, LTD.
By: /s/ Michele Huff
----------------------
Michele Huff
Vice President, Private Client By: FORD DIAMOND CORPORATION,
Group General Partner
By: /s/ Gerald J. Ford
------------------------------
Gerald J. Ford, President
By: /s/ Gerald J. Ford
-------------------------------
GERALD J. FORD, General Partner
5
<PAGE>
EXHIBIT A
INTEREST OPTION PROVISIONS
THIS EXHIBIT A is attached to and forms a part of that certain
PROMISSORY NOTE (the "Note"), dated August 15, 1996, between Hunter's Glen/Ford,
Ltd., a Texas limited partnership ("Borrower), and NationsBank of Texas, N.A.
("Bank").
1. Borrower's Rates. On the terms and subject to the conditions set
forth below, Borrower will be able to select, from one of the following Rate
Options, an interest rate (a "Rate") that will be applicable to a particular
dollar increment of amounts outstanding, or to be disbursed, under the Note:
(a) The Prime Rate (the "Prime Rate Option"); and
(b) The Libor Rate, plus 2.00% per annum (the "Libor Rate
Option").
Interest based on the Prime Rate Option is a floating rate and will change on
and as of the date of a change in the Prime Rate. Interest based on the Libor
Rate Option will be fixed for periods of 30, 60, 90, 120 and 180 days (each a
"Libor Interest Period").
2. Selection of Applicable Interest Rate.
-------------------------------------
(a) Request. Borrower may request (a "Rate Request") that a $100,000
increment or any amount in excess thereof (an "Increment") of the outstanding
principal of, or amounts to be disbursed under, the Note bear interest at the
Libor Rate Option or the Prime Rate Option by telephonic notice no later than
11:00 a.m. (Dallas, Texas time) (i) at least two (2) Business Days prior to the
effective date of the Rate Request, in the case of the Libor Rate Options, or
(ii) the same date, in the case of the Prime Rate Option. Each Rate request
shall specify: (i) whether the applicable interest rate shall be Prime Rate
Option or the Libor Rate Option; (ii) the Interest Period. All such requests
shall be recorded by Bank on a schedule attached hereto or otherwise maintained
by Bank which schedule shall be conclusive evidence of the Interest Periods and
applicable Rate Options and shall be binding on Borrower.
(b) Applicable Interest Rates. Borrower's Rate Request will become
effective, and interest on the Increment designated will be calculated at the
rate requested by Borrower for the applicable Interest Period, subject to the
following:
(i) Notwithstanding any Rate Request, interest shall be calculated
on the basis of the Prime Pate Option if (a) Bank, in good faith, is unable to
ascertain the Libor Rate by reason of circumstances then affecting the
applicable money market or otherwise, (b) it becomes unlawful or impracticable
for the Bank to maintain loans based upon Libor Rate, or (c) Bank, in good
faith, determines that it is impracticable to maintain loans based on the Libor
Rate because of increased taxes, regulatory costs, reserve requirements,
expenses or any other costs or charges that affect such Rate Options. Upon the
occurrence of any of the above events, any increment to which a Libor Rate
Option applies, shall be immediately (or at the option of Bank, at the end of
the current Libor Interest Period), without further action of Borrower or Bank,
converted to an Increment to which the Prime Rate Option applies.
(ii) A Rate Request shall be effective as to amounts to be
disbursed under the Note only if, on the effective date of the Rate Requests,
such amounts are in fact disbursed to or for the account of the Borrower in
accordance with the provisions of the Note and any related loan documents.
(iii) Any amount of outstanding principal for which a Rate Request
has not been made, or which is otherwise not effective, shall bear interest
until paid in full at the Prime Rate Option.
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(iv) Any amounts of outstanding principal bearing interest based upon
the Libor Rate Option shall bear interest at such rate until the end of the
Interest Period therefor, and thereafter shall bear interest based upon the
Prime Rate Option unless a new Rate Request for a Libor Rate Option complying
with the terms hereof has been made and has become effective.
(v) If an Event of Default has occurred and is continuing, then Bank
shall no longer be obligated to honor any Rate Requests.
(vi) No Libor Interest Period shall extend beyond the maturity date of
the Note.
(c) Repayment. Principal and interest shall be payable as detailed in the
Promissory Note.
3. Defined Terms. The following terms as used in this Exhibit A shall have the
following meanings:
"Business Day" shall mean a day on which Bank is open for business and dealing
in deposits in Dallas, Texas.
"Libor Rate" shall mean with respect to any Libor Interest Period, the rate of
interest per annum (rounded upward, if necessary, to the next higher 1/16 of 1%)
determined by Bank, in accordance with its customary general practice from time
to time, to be the ratio at which deposits in immediately available funds in
Dollars are or would be offered or quoted by Bank to major banks in the London
Interbank market, as of approximately 11:00 a.m. London time, or as soon
thereafter as practicable, on the second Business Day immediately preceding the
first day of such Interest Period, for a term comparable to such Interest
Period, as adjusted from time to time in Bank's sole discretion for then
applicable reserve requirements, deposit insurance assessment rates and other
regulatory costs.
"Prime Rate" shall mean the rate of interest publicly announced from time to
time by Bank at its office in Dallas, Texas as its "Prime Rate."
4. Notices; Authority to Act. Borrower acknowledges and agrees that the
agreement of Bank herein to receive certain notices by telephone is solely for
the convenience of Borrower. Bank shall be entitled to rely on the authority of
the person purporting to be a person authorized by Borrower to give such notice,
and Bank shall have no liability to Borrower on account of any action taken by
Bank in reliance upon such telephonic notice. The obligation of Borrower to
repay all sums owing under the Note shall not be affected in any way or to any
extent by any failure by Bank to receive written confirmation of any telephonic
notice or the receipt by Bank of a confirmation which is at variance with the
terms understood by Bank to be contained in the telephonic notice.
2
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Exhibit A to be
duly executed August 15, 1996.
BANK: NATIONSBANK OF TEXAS, N.A. BORROWER:
HUNTER'S GLEN/FORD, LTD.
By: /s/ Michele Huff
---------------------------
Michele Huff
Vice President, Private Client By: FORD DIAMOND CORPORATION,
Group General Partner
By: /s/ Gerald J. Ford
---------------------------
Gerald J. Ford, President
-----------
By: /s/ Gerald J. Ford
---------------------------
GERALD J. FORD, General Partner
3
<PAGE>
EXHIBIT C
PLEDGE AGREEMENT DATED AUGUST 15, 1996
BETWEEN
HUNTER'S GLEN/FORD, LTD. AND
NATIONSBANK OF TEXAS, N.A.
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NATIONSBANK
Date: August 15, 1996
PLEDGE AGREEMENT
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BANK/SECURED PARTY: PLEDGOR/DEBTOR:
NationsBank of Texas, N.A. Hunter's Glen/Ford, Ltd.
Banking Center: 200 Crescent Court, Suite 1350
Dallas, Texas 75201
901 Main Street
19th Floor Dallas County
Dallas, Texas 75202
Dallas County
(Street address including county) (Name and street address including county)
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Pledgor/Debtor is: [ ] Individual [ ] Corporation [ X ] Partnership [ ] Other
Address is Pledgor's/Debtor's: [ ] Residence [ X ] Place of Business [ ] Chief Executive Office if more than one place of
business
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This Pledge Agreement ("Agreement") contains some provisions preceded by boxes.
If a box is marked, the provision applies to this transaction; if it is not
marked, the provision does not apply to this transaction.
1. SECURITY INTEREST. For good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Pledgor/Debtor (hereinafter referred
to as "Pledgor") pledges, assigns and grants to Bank a security interest and
lien in the Collateral (hereinafter defined) to secure the payment and the
performance of the Obligation (hereinafter defined).
2. COLLATERAL. The security interest is granted in the following collateral
(the "Collateral"):
A. DESCRIPTION OF COLLATERAL. The following investment property and/or
securities, together with all investment property and/ or securities hereafter
delivered to Bank in substitution therefor or in addition thereto: see Exhibit A
attached hereto and incorporated herein by reference.
B. PROCEEDS. All additions, substitutes and replacements for and proceeds
of the above Collateral (including all income and benefits resulting from any of
the above, such as dividends payable or distributable in cash, property or
stock; interest, premium and principal payments; redemption proceeds and
subscription rights; and shares or other proceeds of conversions or splits of
any securities in the Collateral). Any investment property and/or securities
received by Pledgor, which shall comprise such additions, substitutes and
replacements for, or proceeds of, the Collateral, shall be held in trust for
Bank and shall be delivered immediately to Bank. If no Event of Default has
occurred and is continuing, Borrower may use any cash proceeds in its
discretion; if an Event of Default has occurred and is continuing, then any cash
proceeds shall be held in trust for Bank and shall be delivered immediately to
Bank.
C. DEPOSIT ACCOUNTS. The balance of every deposit account of Pledgor
maintained with Bank and any other claim of Pledgor against Bank, now or
hereafter existing, liquidated or unliquidated, and all money, instruments,
investment property, securities, documents, chattel paper, credits, claims,
demands, income, and
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any other property, rights and interests of Pledgor which at any time shall come
into the possession or custody or under the control of Bank or any of its agents
or affiliates, for any purpose, and the proceeds of any thereof. Bank shall be
deemed to have possession of any of the Collateral in transit to or set apart
for it or any of its agents or affiliates.
3. OBLIGATION.
A. DESCRIPTION OF OBLIGATION. The following obligations ("Obligations") are
secured by this Agreement:
i. All debt arising under that certain Promissory Note (the "Promissory
Note") in the principal face amount of $10,000,000.00 dated August 15, 1996
between Pledgor and Bank, and all renewals, extensions and rearrangements of the
above;
ii. All reasonable costs and expenses incurred by Bank, including
attorney's fees, to obtain, preserve, perfect, enforce and defend this Agreement
and maintain, preserve, collect and realize upon the Collateral, together with
interest thereon at the lesser of (a) the highest rate allowed by law or (b) the
Prime Rate (as defined in the Promissory Note) plus 4% per annum; and
iii. All amounts which may be owed to Bank pursuant to all other loan
documents executed in connection with the indebtedness described in subpart i.
above.
In the event any amount paid to Bank on any Obligation is subsequently recovered
from Bank in or as a result of any bankruptcy, insolvency or fraudulent
conveyance proceeding involving an obligor of the Obligation other than Pledgor,
Pledgor shall be liable to Bank for the amounts so recovered up to the fair
market value of the Collateral whether or not the Collateral has been released
or the security interest terminated. In the event the Collateral has been
released or the security interest terminated, the fair market value of the
Collateral shall be determined, at Bank's option, as of the date the Collateral
was released, the security interest terminated, or said amounts were recovered.
B. USE OF PROCEEDS. The proceeds of any indebtedness or obligation secured
by the Collateral may be used directly or indirectly to purchase or carry any
"margin stock" as that term is defined in Regulation U of the Board of Governors
of the Federal Reserve System, or extend credit to or invest in other parties
for the purpose of purchasing or carrying any such "margin stock," or to reduce
or retire any indebtedness incurred for such purpose or otherwise in a manner
which would not violate Regulations G, T or U.
4. PLEDGOR'S WARRANTIES. Pledgor hereby represents and warrants to Bank as
follows:
A. FINANCING STATEMENTS. No financing statement covering the Collateral is
or will be on file in any public office, except any financing statements
relating to this security interest, and no security interest, other than the one
herein created, has attached or been perfected in the Collateral or any part
thereof.
B. OWNERSHIP. Upon the delivery to Bank of the stock certificate referenced
on Exhibit A, Pledgor will own the Collateral free from any setoff, claim,
restriction, lien, security interest or encumbrance except liens for taxes not
yet due and payable and the security interest hereunder.
C. POWER AND AUTHORITY. Pledgor has full power and authority to make this
Agreement, and all necessary consents and approvals of any persons, entities,
governmental or regulatory authorities and securities exchanges have been
obtained to effectuate the validity of this Agreement.
5. PLEDGOR'S COVENANTS. Until full payment and performance of all of the
Obligation and termination or expiration of any obligation or commitment of Bank
to make advances or loans to Pledgor, unless Bank otherwise consents in writing:
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A. OBLIGATION AND THIS AGREEMENT. Pledgor shall perform all of its
agreements herein and in any other agreements between it and Bank.
B. OWNERSHIP OF COLLATERAL. Pledgor shall defend the Collateral against all
claims and demands of all persons at any time claiming any interest therein
adverse to Bank. Pledgor shall keep the Collateral free from all liens and
security interests except those for taxes not yet due and payable and the
security interest hereby created. Pledgor shall furnish to Bank on or before
February 15th of each year proof of payment of any ad valorem taxes payable on
the Collateral.
C. BANK'S COSTS. Pledgor shall pay all costs necessary to obtain, preserve,
perfect, defend and enforce the security interest created by this Agreement,
collect the Obligation, and preserve, defend, enforce and collect the
Collateral, including but not limited to taxes, assessments, reasonable
attorney's fees, legal expenses and expenses of sales. Whether the Collateral is
or is not in Bank's possession, and without any obligation to do so and without
waiving Pledgor's default for failure to make any such payment, Bank at its
option may pay any such costs and expenses and discharge encumbrances on the
Collateral, and such payments shall be a part of the Obligation and bear
interest at the rate set out in the Obligation. Pledgor agrees to reimburse Bank
on demand for any costs so incurred.
D. INFORMATION AND INSPECTION. Pledgor shall (i) promptly furnish Bank any
information with respect to the Collateral requested by Bank; (ii) allow Bank or
its representatives to inspect and copy, or furnish Bank or its representatives
with copies of, all records relating to the Collateral and the Obligation; and
(iii) promptly furnish Bank or its representatives with any other information
Bank may reasonably request.
E. ADDITIONAL DOCUMENTS. Pledgor shall sign and deliver any papers
furnished by Bank which are necessary or desirable in the judgment of Bank to
obtain, maintain and perfect the security interest hereunder and to enable Bank
to comply with any federal or state law in order to obtain or perfect Bank's
interest in the Collateral or to obtain proceeds of the Collateral.
F. NOTICE OF CHANGES. Pledgor shall notify Bank immediately of (i) any
material adverse change in the Collateral, (ii) a change in Pledgor's residence
or location, (iii) a material adverse change in any matter warranted or
represented by Pledgor in this Agreement, or in any of the loan documents
relating to the Obligation or furnished to Bank pursuant to this Agreement, and
(iv) the occurrence of an Event of Default (as defined herein) relating hereto.
G. POSSESSION OF COLLATERAL. Pledgor shall deliver a copy of this Agreement
(or other notice acceptable to Bank) to any broker, financial intermediary, or
any other person in possession of any of the Collateral or on whose books the
interest of Pledgor in the Collateral appears, and such delivery shall
constitute notice to such person of Bank's security interest in the Collateral
and shall constitute Pledgor's instruction to such person to note Bank's
security interest on their books and records, or deliver to Bank certificates or
other evidence of the Collateral promptly upon Bank's request. Pledgor shall
deliver all investment securities and other instruments and documents which are
a part of the Collateral and in Pledgor's possession to Bank immediately, or if
hereafter acquired, immediately following acquisition, in a form suitable for
transfer by delivery or accompanied by duly executed instruments of transfer or
assignment in blank with signatures appropriately guaranteed in form and
substance suitable to Bank.
H. CHANGE OF NAME. Pledgor shall not change its name or change its
partnership status.
I. POWER OF ATTORNEY. Pledgor appoints Bank and any officer thereof as
Pledgor's attorney-in-fact with full power in Pledgor's name and on Pledgor's
behalf to do every act which Pledgor is obligated to do or may be required to do
hereunder; however, nothing in this paragraph shall be construed to obligate
Bank to take any action hereunder nor shall Bank be liable to Pledgor for
failure to take any action hereunder. This appointment shall be deemed a power
coupled with an interest and shall not be terminable as long as the Obligation
is outstanding and shall not terminate on the disability or incompetence of
Pledgor. Without
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limiting the generality of the foregoing, Bank shall have the right and power to
receive, indorse and collect all checks and other orders for the payment of
money made payable to Pledgor representing any dividend, interest payment or
other distribution payable in respect of the Collateral or any part thereof.
The foregoing power of attorney may be exercised only after an Event of
Default. Any person to whom the foregoing power of attorney is presented may
rely conclusively as to the occurrence of an Event of Default upon Bank's
written statement to such person that an Event of Default has occurred, and
Pledgor agrees to fully and completely indemnify and hold harmless any such
person so relying.
J. OTHER PARTIES AND OTHER COLLATERAL. No renewal or extensions of or any
other indulgence with respect to the Obligation or any part thereof, no
modification of the document(s) evidencing the Obligation, no release of any
security, no release of any person (including any maker, indorser, guarantor or
surety) liable on the Obligation, no delay in enforcement of payment, and no
delay or omission or lack of diligence or care in exercising any right or power
with respect to the Obligation or any security therefor or guaranty thereof or
under this Agreement shall in any manner impair or affect the rights of Bank
under any law, hereunder, or under any other agreement pertaining to the
Collateral. Bank need not file suit or assert a claim for personal judgment
against any person for any part of the Obligation or seek to realize upon any
other security for the Obligation, before foreclosing or otherwise realizing
upon the Collateral. Pledgor waives any right that can be waived to the benefit
of or to require or control application of any other security or proceeds
thereof, and agrees that Bank shall have no duty or obligation to Pledgor to
apply to the Obligation any such other security or proceeds thereof.
K. WAIVERS BY PLEDGOR. Pledgor waives notice of the creation, advance,
increase, existence, extension or renewal of, and of any indulgence with respect
to, the Obligation; waives presentment, demand, notice of dishonor, and protest;
waives notice of the amount of the Obligation outstanding at any time, notice of
any change in financial condition of any person liable for the Obligation or any
part thereof, notice of any Event of Default, and all other notices respecting
the Obligation; and agrees that maturity of the Obligation and any part thereof
may be accelerated, extended or renewed one or more times by Bank in its
discretion, without notice to Pledgor. Pledgor waives any right to require that
any action be brought against any other person or to require that resort be had
to any other security or to any balance of any deposit account. Pledgor further
waives any right of subrogation or to enforce any right of action against any
other pledgor until the Obligation is paid in full.
L. ADDITIONAL PROVISIONS. If one or more Riders to this Agreement are
executed by Pledgor, the covenants and provisions of each such Rider shall be
incorporated by reference into this Agreement (check applicable boxes).
[ ] COLLATERAL MAINTENANCE RIDER: Pledgor agrees to maintain the Collateral
in accordance with the terms of the Collateral Maintenance Rider attached hereto
and made a part hereof for all purposes.
[x] RULE 144 RIDER: The Collateral is comprised in whole or in part of
control and/or restricted securities, which shall be subject to the additional
terms and provisions described on the Rule 144 Rider attached hereto and made a
part hereof for all purposes.
6. RIGHTS AND POWERS OF BANK.
A. GENERAL.
1. Bank, before or after an Event of Default, without liability to
Pledgor, may release Collateral in its possession to Pledgor,
temporarily or otherwise.
2. Bank, during the continuance of an Event of Default, without
liability to Pledgor, may: take control of proceeds, including stock
received as dividends or by reason of stock splits; take
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control of funds generated by the Collateral, such as cash dividends,
interest and proceeds, and use the same to reduce any part of the
Obligation; exercise all other rights that an owner of the Collateral
may exercise; and at any time transfer any of the Collateral or
evidence thereof into its own name or that of its nominee. Bank shall
not be liable for failure to collect any account or instruments, or
for any other act or omission on the part of Bank, its officers,
agents or employees, except for its or their own willful misconduct
or gross negligence. The foregoing rights and powers of Bank will be
in addition to, and not a limitation upon, any rights and powers of
Bank given by law, elsewhere in this Agreement, or otherwise.
B. CONVERTIBLE COLLATERAL. During the continuance of an Event of Default,
Bank may present for conversion any Collateral which is convertible into any
other instrument or investment security or a combination thereof with cash, but
Bank shall not have any duty to present for conversion any Collateral unless it
shall have received from Pledgor detailed written instructions to that effect at
a time reasonably far in advance of the final conversion date to make such
conversion possible.
7. DEFAULT.
A. EVENT OF DEFAULT. The term Event of Default is defined herein as defined
in the Promissory Note.
B. RIGHTS AND REMEDIES. If any Event of Default shall occur, then, in each
and every such case, Bank may, without (a) presentment, demand, or protest, (b)
notice of default, dishonor, demand, non-payment, or protest, (c) notice of
intent to accelerate all or any part of the Obligation, (d) notice of
acceleration of all or any part of the Obligation, or (e) notice of any other
kind, all of which Pledgor hereby expressly waives (except for any notice
required under this Agreement, any other loan document or which may not be
waived under applicable law), at any time thereafter exercise and/or enforce any
of the following rights and remedies, at Bank's option:
i. ACCELERATION. The Obligation shall, at Bank's option, become
immediately due and payable, and the obligation, if any, of Bank to permit
further borrowings under the Obligation shall at Bank's option immediately cease
and terminate.
ii. LIQUIDATION OF COLLATERAL. Sell, or instruct any agent or broker to
sell, all or any part of the Collateral in a public or private sale, direct any
agent or broker to liquidate all or any part of any account and deliver all
proceeds thereof to Bank, and apply all proceeds to the payment of any or all of
the Obligation in such order and manner as Bank shall, in its discretion,
choose.
iii. UNIFORM COMMERCIAL CODE. All of the rights, powers and remedies of
a secured creditor under the Uniform Commercial Code ("UCC") as adopted in the
jurisdiction to which Bank is subject under this Agreement.
iv. RIGHT OF SET OFF. Without notice or demand to Pledgor, set off and
apply against any and all of the Obligation any and all deposits (general or
special, time or demand, provisional or final) and any other indebtedness, at
any time held or owing by Bank or by any of Bank's affiliates or correspondents
to or for the credit of the account of Pledgor or any guarantor or indorser of
Pledgor's Obligation.
Pledgor specifically understands and agrees that any sale by Bank of all or part
of the Collateral pursuant to the terms of this Agreement may be effected by
Bank at times and in manners which could result in the proceeds of such sale as
being significantly and materially less than might have been received if such
sale had occurred at different times or in different manners, and Pledgor
hereby releases Bank and its officers and representatives from and against any
and all obligations and liabilities arising out of or related to the timing or
manner of any such sale.
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If, in the opinion of Bank, there is any question that a public sale or
distribution of any Collateral will violate any state or federal securities law,
Bank may offer and sell such Collateral in a transaction exempt from
registration under federal securities law, and any such sale made in good faith
by Bank shall be deemed "commercially reasonable."
8. GENERAL.
A. PARTIES BOUND. Bank's rights hereunder shall inure to the benefit of its
successors and assigns, and in the event of any assignment or transfer of any of
the Obligation or the Collateral, Bank thereafter shall be fully discharged from
any responsibility with respect to the Collateral so assigned or transferred,
but Bank shall retain all rights and powers hereby given with respect to any of
the Obligation or the Collateral not so assigned or transferred. All
representations, warranties and agreements of Pledgor shall be binding upon the
successors and assigns of Pledgor.
B. WAIVER. No delay of Bank in exercising any power or right shall operate
as a waiver thereof; nor shall any single or partial exercise of any power or
right preclude other or further exercise thereof or the exercise of any other
power or right. No waiver by Bank of any right hereunder or of any default or
Event of Default by Pledgor shall be binding upon Bank unless in writing, and no
failure by Bank to exercise any power or right hereunder or waiver of any
default or Event of Default by Pledgor shall operate as a waiver of any other or
further exercise of such right or power or of any further default. Each right,
power and remedy of Bank as provided for herein or in any of the loan documents
related to the Obligation, or which shall now or hereafter exist at law or in
equity or by statute or otherwise, shall be cumulative and concurrent and shall
be in addition to every other such right, power or remedy. The exercise or
beginning of the exercise by Bank of any one or more of such rights, powers or
remedies shall not preclude the simultaneous or later exercise by Bank of any or
all other such rights, powers or remedies.
C. TIME OF THE ESSENCE. Time is of the essence of this Agreement.
D. DEFINITIONS. Unless the context indicates otherwise, definitions in the
UCC apply to words and phrases in this Agreement; if UCC definitions conflict,
Article 8 and/or 9 definitions apply.
E. NOTICE. Notice shall be deemed reasonable if mailed postage prepaid at
least 5 days before the related action (or if the UCC elsewhere specifies a
longer period, such longer period) to the address of Pledgor given above. Each
notice, request and demand shall be deemed given or made, if sent by mail, upon
the earlier of the date of receipt or five (5) days after deposit in the U.S.
Mail, first class postage prepaid, or if sent by any other means, upon delivery.
F. MODIFICATIONS. No provision hereof shall be modified or limited except
by a written agreement expressly referring hereto and to the provisions so
modified or limited and signed by Pledgor and Bank. The provisions of this
Agreement shall not be modified or limited by course of conduct or usage of
trade.
G. PARTIAL INVALIDITY. The unenforceability or invalidity of any provision
of this Agreement shall not affect the enforceability or validity of any other
provision herein, and the invalidity or unenforceability of any provision of any
loan document related to the Obligation to any person or circumstance shall not
affect the enforceability or validity of such provision as it may apply to other
persons or circumstances.
H. APPLICABLE LAW AND VENUE. This Agreement has been delivered in the State
of Texas and shall be construed in accordance with the laws of that State. It is
performable by Pledgor in the county or city of Bank's address set out above and
Pledgor expressly waives any objection as to venue in any such location.
Wherever possible each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Agreement.
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I. FINANCING STATEMENT. To the extent permitted by applicable law, a
carbon, photographic or other reproduction of this Agreement or any financing
statement covering the Collateral shall be sufficient as a financing statement.
J. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR
DOCUMENTS, 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 J.A.M.S./ENDISPUTE OR
ANY SUCCESSOR THEREOF ("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 INSTRUMENT, AGREEMENT OR DOCUMENT 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.
i. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE COUNTY OF
ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS INSTRUMENT,
AGREEMENT OR DOCUMENT 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.
ii. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL
BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR
DOCUMENT; OR (II) BE A WAIVER BY 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 BANK HERETO (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. 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
INSTRUMENT, AGREEMENT OR DOCUMENT. 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.
K. CONTROLLING DOCUMENT. To the extent that this Agreement conflicts with
or is in any way incompatible with any other loan document concerning the
Obligation, any promissory note shall control over any other document, and if
such promissory note does not address an issue, then each other loan document
shall control to the extent that it deals most specifically with an issue.
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NOTICE OF FINAL AGREEMENT. THIS WRITTEN AGREEMENT AND ANY OTHER DOCUMENTS
EXECUTED IN CONNECTION HEREWITH 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.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their duly authorized representatives as of the date first above
written.
BANK: NATIONSBANK OF TEXAS, N.A. PLEDGOR:
HUNTER'S GLEN/FORD, LTD.
By: /s/ Michele Huff
-----------------------------
Michele Huff
Vice President, Private Client By: FORD DIAMOND CORPORATION,
Group General Partner
By: /s/ Gerald J. Ford
--------------------------
Gerald J. Ford, President
---------
By: /s/ Gerald J. Ford,
--------------------------
GERALD J. FORD, General Partner
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EXHIBIT A
Liberte Investors Inc. common stock as follows:
_________ shares (Certificate No. ___________________)
CUSIP No. ____________________
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Rule 144 Rider
This Rule 144 Rider is made this 15th day of August, 1996 and is incorporated
into and shall be deemed to supplement the Pledge Agreement ("Agreement") of the
same date given by Pledgor to secure the Obligation to Bank. Terms used and not
otherwise defined in this Rider which are defined in the Agreement have the
meanings given them in the Agreement.
1. The securities listed on Exhibit A hereto, which Exhibit is made a part of
this Rider and the Agreement for all purposes, are or may be deemed (check one
or more boxes):
[X] Restricted securities
[X] Control securities
for purposes of Rule 144 of the General Regulations under the Securities Act of
1933 ("Rule 144") promulgated by the Securities and Exchange Commission. These
securities ("Rule 144 Securities") comprise all or part of the Collateral held
by Bank subject to the terms and conditions of the Agreement and this Rider.
2. Pledgor covenants and agrees that:
A. If Pledgor sells any securities of the same class or convertible into the
same class of securities as the Rule 144 Securities, whether or not such
securities are pledged hereunder, from the date hereof until the Obligation has
been paid in full, then Pledgor will furnish the Bank with a copy of any Form
144 filed in respect of such sale. If any person, party or entity with whom it
shall be deemed one "person" for purposes of Rule 144(a)(2), or any affiliate of
Pledgor or any such person, party or entity (as the term "affiliate" is defined
in Rule 144(a)(1)) sells any securities of the same class or convertible into
the same class of securities as the Rule 144 Securities, whether or not such
securities are pledged hereunder, from the date hereof until the Obligation has
been paid in full, then Pledgor will use its best efforts to furnish the Bank
with a copy of any Form 144 filed in respect of such sale.
B. Pledgor will cooperate fully with Bank with respect to any sale by Bank
of any of the Rule 144 Securities, including full and complete compliance with
all requirements of Rule 144, and will give to Bank all information and will do
all things necessary, including the execution of all documents, forms,
instruments and other items, to comply with Rule 144 for the complete and
unrestricted sale and/or transfer of the Rule 144 Securities and will exercise
its best efforts to have the issuer of such securities, upon the request of
Bank, take all such action as may be required to satisfy the public information
requirements of Rule 144(c).
C. Pledgor will use its best efforts, upon Bank's written request, to
obtain and publish all information necessary to satisfy Rule 144 in the event
any issuer of the Rule 144 Securities is not current in its filings under the
Securities Exchange Act of 1934, as amended, at the time of a foreclosure sale
by Bank.
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IN WITNESS WHEREOF, Pledgor has caused this Rider to be duly executed by its
duly authorized representatives as of the date first above written.
BANK: NATIONSBANK OF TEXAS, N.A. PLEDGOR:
HUNTER'S GLEN/FORD, LTD.
By: /s/ Michele Huff
--------------------------
Michele Huff
Vice President, Private Client By: FORD DIAMOND CORPORATION,
Group General Partner
By: /s/Gerald J. Ford
------------------------
Gerald J. Ford, President
---------
By: /s/ Gerald J. Ford
-------------------------
GERALD J. FORD, General Partner
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EXHIBIT D
PROMISSORY NOTE DATED AUGUST 16, 1996
BETWEEN
HUNTER'S GLEN/FORD, LTD. AND
GERALD J. FORD
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PROMISSORY NOTE
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$17,091,951 Dallas, Texas August 16, 1996
FOR VALUE RECEIVED, HUNTER'S GLEN/FORD, LTD. ("MAKER") promises to pay to
the order of GERALD J. FORD ("PAYEE") at such address in Dallas, Texas, as the
holder of this Note may designate from time to time in writing to Maker, the
principal sum of SEVENTEEN MILLION NINETY-ONE THOUSAND NINE HUNDRED FIFTY-ONE
AND NO/100 DOLLARS ($17,091,951) together with interest thereon, payable as
hereinafter provided.
The unpaid principal balance shall bear interest at the 90-day Eurodollar
rate, as determined by NationsBank of Texas, N.A. on the relevant determination
date, plus one percent (1%); provided, however, that if on any determination
date the Federal Reserve has announced a Eurodollar reserve requirement, the
unpaid principal shall bear interest at an interest rate equal to 1% plus a rate
determined pursuant to the following formula: the 90-day London Interbank Rate
divided by (100% - Eurodollar Reserve Percentage). The 90-day Eurodollar rate
shall be determined on August 16, 1996 (inception of the loan) and thereafter
adjusted quarterly on September 30, December 31, March 31, and June 30. Accrued
and unpaid interest shall be payable semi-annually on April 15 and October 15.
The unpaid principal balance, and all accrued, unpaid interest shall be due
October 15, 1997.
Maker shall have the right to prepay this Note in whole or in part at any
time without penalty or premium.
All amounts paid hereunder shall be applied first to all interest then
accrued and unpaid hereunder, and the balance, if any, to principal. All past
due principal and interest on this Note shall bear interest at the maximum rate
permitted by law from maturity until paid. All sums called for, payable or to
be paid hereunder shall be paid in lawful money of the United States of America
which at the time of payment is legal tender for the payment of public and
private debts therein.
If default is made in the payment of this Note at maturity (regardless of
how its maturity may be brought about) or the same is placed in the hands of an
attorney for collection, or if suit is filed hereon, or proceedings are had in
bankruptcy, probate, receivership, reorganization, or other judicial proceedings
for the establishment or collection of any amount called for hereunder, or any
amount payable or to be payable hereunder is collected through any such
proceedings, Maker agrees to pay the holder of this Note all costs of
collection, including a reasonable amount as attorney's fees.
Maker hereby waives presentment and demand for payment, notice of intent to
accelerate maturity, notice of acceleration of maturity, protest or notice of
protest and non-payment, bringing of suit and diligence in taking any action to
collect any sums owing hereunder and in proceeding against any of the rights and
properties securing payment hereof, and agrees that its liability on this Note
shall not be affected by any release of or change in any security for the
payment of this Note.
In the event of a default in the payment of any installment of either
principal or interest as provided for herein, or in the performance of any
agreement or covenant contained in any instrument securing payment hereof,
without the giving of any notice of any kind, the holder of this Note shall have
the right and
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option, to declare the unpaid balance of principal and accrued interest on this
Note at once due and payable and to foreclose or require foreclosure of any and
all liens securing payment hereof, and to exercise any and all other rights and
remedies it may have. Failure to exercise this option upon any default shall
not constitute a waiver of the right to exercise it in the event of any
subsequent default.
All notices permitted hereunder shall be given to the addressee at the
following address: if to Payee, 200 Crescent Court, Suite 1350, Dallas, Texas
75201; if to Maker, 200 Crescent Court, Suite 1350, Dallas,Texas 75201. All
notices given hereunder shall be in writing and shall be considered properly
given if mailed by first-class United States mail, postage prepaid, registered
or certified with return receipt requested, or by delivering same in person to
the addressee, or by prepaid telegram. Any notice given in accordance herewith
shall be effective upon receipt at the address of the addressee.
It is expressly stipulated and agreed to be the intent of Maker and Payee
to at all times comply with the usury and other laws applicable to this Note and
the instruments securing the payment hereof (the "SECURITY INSTRUMENTS") and any
subsequent revisions, repeals, or judicial interpretations thereof, to the
extent any of the same are applicable hereto. If such laws athat all excess
amounts theretofore collected by Payee be credited on the principal balance of
this Note (or, if the Note has been paid in full, refunded to Maker), and the
provisions of this Note and the Security Instruments immediately be deemed
reformed and the amounts thereafter collectable hereunder and thereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder and thereunder.
EXECUTED as of the date first written above.
HUNTER'S GLEN/FORD, LTD.
By: /s/ Gerald J. Ford
----------------------------
Name: Gerald J. Ford
Title: General Partner
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