UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. _______)*
THE TURNER CORPORATION
(Name of Issuer)
COMMON STOCK
(Title of Class of Securities)
900273103
(CUSIP Number)
G.J. Records, Jr., Midland Financial Co., 501 West I-44 Road,
Oklahoma City, OK 73118 (405) 840-7640
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
March 29, 1995
(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 the 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 five percent or less 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).
1. Name of Reporting Person:
S.S. or I.R.S. Identification No. of Above Person:
The Nancy Johnston Trust
IRS #73-6093879
2. Check the Appropriate Box if a Member of a Group: (a) [ ]
(b) [ ]
3. SEC Use Only:
4. Source of Funds:
AF WC
5. Check Box if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(d) or 2(e): [ ]
6. Citizenship or Place of Organization:
Oklahoma
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH:
7. Sole Voting Power:
267,500
8. Shared Voting Power:
9. Sole Dispositive Power:
267,500
10. Shared Dispositive Power:
11. Aggregate Amount Beneficially owned by Each Reporting
Person:
267,500
12. Check Box if the Aggregate Amount in Row (11) Excludes
Certain
Shares: [ ]
13. Percent of Class Represented by Amount in Row (11):
5.18%
14. Type of Reporting Person:
00
- --------------------------------------
Item 1. Security and Issuer.
This statement relates to the common stock of The Turner
Corporation, whose principal executive offices are at 375 Hudson
Street, New York, New York 10014.
Item 2. Identity and Background.
This statement is being filed by The Nancy Johnston Trust
(the "Trust"), a trust formed under the laws of the State of
Oklahoma under Trust Agreement dated May 1, 1945 as amended.
George J. Records is the sole trustee of the Trust (the
"Trustee"). The business address of the Trust and the Trustee is
c/o Midland Financial Co., 501 West I-44 Road, Oklahoma City,
Oklahoma 73118. The principal occupation of the Trustee is
Chairman of the Board of Midland Financial Co.
Neither the Trust nor the Trustee has, during the last five
years, been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors). Neither the Trust nor the
Trustee has, during the last five years, been a party to a civil
proceeding of a judicial or administrative body of competent
jurisdiction which resulted in either of them being 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. The Trustee is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration.
The 267,500 shares reported herein (the "Shares") were
purchased in open market transactions at an aggregate cost of
$2,112,914. Of such amount, $1,533,000 was borrowed from Midland
Financial Co. and $309,000 was borrowed from Firstinsure, Inc.
The Trust used its own cash for the balance of the purchase
costs, $270,914.
Item 4.
The acquisition of the Shares was made for investment
purposes. The Trust has no plans or proposals which relate to or
would result in any of the actions enumerated in clauses (a)
through (j) of this item.
Item 5. Interest in Securities of the Issuer.
(a)(b) As of the date hereof, the Trust owns 267,500
Shares. The Shares represent approximately 5.18% of the
5,167,219 shares believed to be outstanding. The Trustee has the
sole power to vote or direct the vote and the sole power to
dispose or to direct the disposition of all the Shares.
(c) A description of the transactions of the Trust in
the Shares that were effected in the past 60 days is set forth
below:
Trade Date No. of Shares Price per Share
- ----------- ------------- ---------------
March 27, 1995 500 7-7/8
March 29, 1995 22,000 7-7/8
March 30, 1995 400 7-7/8
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships With Respect to Securities of the Issuer.
The Shares have been pledged to secure the Trust's obligations
under the Revolving Credit Agreements with Midland Financial Co.
and Firstinsure, Inc. filed herewith as Exhibits 1 and 3. The
terms of such pledges are set forth in the Pledge Agreements
filed herewith as Exhibits 2 and 4.
Item 7. Material to be Filed as Exhibits.
The following are filed as exhibits:
Ex. No.
1 Revolving Credit Agreement dated November 21, 1994
between the Trust and Midland Financial Co.
2 Pledge Agreement dated November 21, 1994 between the
Trust and Midland Financial Co.
3 Revolving Credit Agreement dated November 21, 1994
between the Trust and Firstinsure, Inc.
4 Pledge Agreement dated November 21, 1994 between the
Trust and Firstinsure, Inc.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this statement is true, complete and correct.
April 7, 1995 THE NANCY JOHNSTON TRUST
By /s/ George J. Records
-------------------------------
George J. Records, Trustee
Exhibit 1
MIDLAND FINANCIAL CO.
AND
GEORGE J. RECORDS, AS TRUSTEE OF
THE NANCY JOHNSTON TRUST
REVOLVING CREDIT AGREEMENT
November 21, 1994
<PAGE>
TABLE OF CONTENTS
Page No.
ARTICLE I. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . .1
1. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . .1
"Advance" . . . . . . . . . . . . . . . . . . . . . . . . . . .1
"Advance Date". . . . . . . . . . . . . . . . . . . . . . . . .1
"Advance Limit" . . . . . . . . . . . . . . . . . . . . . . . .1
"Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . .1
"AFR" or "Applicable Federal Rate". . . . . . . . . . . . . . .1
"Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . .2
"Aggregate Commitment". . . . . . . . . . . . . . . . . . . . .2
"Amount Outstanding". . . . . . . . . . . . . . . . . . . . . .2
"Business Day". . . . . . . . . . . . . . . . . . . . . . . . .2
"Collateral". . . . . . . . . . . . . . . . . . . . . . . . . .2
"Effective Date". . . . . . . . . . . . . . . . . . . . . . . .2
"Event of Default". . . . . . . . . . . . . . . . . . . . . . .2
"Financial Statement" . . . . . . . . . . . . . . . . . . . . .2
"Indebtedness". . . . . . . . . . . . . . . . . . . . . . . . .2
"Loan". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Loan Documents". . . . . . . . . . . . . . . . . . . . . . . .3
"Material Adverse Effect" . . . . . . . . . . . . . . . . . . .3
"Note". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Notice of Termination" . . . . . . . . . . . . . . . . . . . .3
"Person". . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Request for Advance" . . . . . . . . . . . . . . . . . . . . .3
"Shares". . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Security Documents". . . . . . . . . . . . . . . . . . . . . .4
"Termination Date". . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE II. Amounts and Terms of the Loan . . . . . . . . . . . . . . . .4
2.1. Loan. . . . . . . . . . . . . . . . . . . . . . . . . .4
2.2. Advances. . . . . . . . . . . . . . . . . . . . . . . .4
2.3. Note. . . . . . . . . . . . . . . . . . . . . . . . . .5
2.4. Interest. . . . . . . . . . . . . . . . . . . . . . . .5
2.5. Determination of Interest Rate. . . . . . . . . . . . .5
2.6. Maximum Interest Rate . . . . . . . . . . . . . . . . .5
ARTICLE III. Collateral, Security Agreement and Security
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
3.1. Collateral; Delivery. . . . . . . . . . . . . . . . . .6
3.2. Security Agreement; Security Interest . . . . . . . . .6
ARTICLE IV. Conditions of Lending . . . . . . . . . . . . . . . . . . . .7
4.1. Representations and Warranties. . . . . . . . . . . . .7
4.2. Delivery of Note. . . . . . . . . . . . . . . . . . . .8
4.3. No Default. . . . . . . . . . . . . . . . . . . . . . .8
4.4. Supporting Documents. . . . . . . . . . . . . . . . . .8
4.5. Financial Information . . . . . . . . . . . . . . . . .8
4.6. Litigation. . . . . . . . . . . . . . . . . . . . . . .8
ARTICLE V. Representations and Warranties . . . . . . . . . . . . . . . .8
5.1. Organization, Powers, etc . . . . . . . . . . . . . . .8
5.2. Authorization of Loans, etc.. . . . . . . . . . . . . .9
5.3. Financial Statements. . . . . . . . . . . . . . . . . .9
5.4. Title to Properties . . . . . . . . . . . . . . . . . .9
5.5. Litigation. . . . . . . . . . . . . . . . . . . . . . .9
5.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 10
5.7. Agreements. . . . . . . . . . . . . . . . . . . . . . 10
5.8. Investment Company Act. . . . . . . . . . . . . . . . 10
5.9. Federal Reserve Regulations . . . . . . . . . . . . . 10
5.10. Securities Activities . . . . . . . . . . . . . . . . 11
5.11. Compliance with Applicable Laws . . . . . . . . . . . 11
5.12. Consents, etc.. . . . . . . . . . . . . . . . . . . . 11
5.13. No Misrepresentation. . . . . . . . . . . . . . . . . 11
ARTICLE VI. Affirmative Covenants . . . . . . . . . . . . . . . . . . . 11
6.1. Existence, Properties, etc. . . . . . . . . . . . . . 12
6.2. Notice. . . . . . . . . . . . . . . . . . . . . . . . 12
6.3. Payment of Debts, Taxes, etc. . . . . . . . . . . . . 12
6.4. Financial Information . . . . . . . . . . . . . . . . 12
6.5. Access to Premises and Records. . . . . . . . . . . . 13
6.6. Properties and Insurance. . . . . . . . . . . . . . . 13
6.7. Compliance with Applicable Laws . . . . . . . . . . . 13
6.8. Additional Documents. . . . . . . . . . . . . . . . . 13
ARTICLE VII. Negative Covenants . . . . . . . . . . . . . . . . . . . . 14
7.1. Limitation on Indebtedness. . . . . . . . . . . . . . 14
7.2. Modification of Debt Instruments. . . . . . . . . . . 14
7.3. Guarantees. . . . . . . . . . . . . . . . . . . . . . 14
7.4. Sale of Assets, Merger. . . . . . . . . . . . . . . . 14
7.5. Dividends, Purchases and Redemptions. . . . . . . . . 14
7.6. Liens . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII. Events of Default . . . . . . . . . . . . . . . . . . . . 16
8.1. Representations and Warranties. . . . . . . . . . . . 16
8.2. Misleading Documents. . . . . . . . . . . . . . . . . 16
8.3. Default . . . . . . . . . . . . . . . . . . . . . . . 16
8.4. Other Defaults. . . . . . . . . . . . . . . . . . . . 16
8.5. Failure to Comply with Certain Covenants. . . . . . . 16
8.6. Failure to Comply with Other Covenants. . . . . . . . 17
8.7. Receiver, Bankruptcy, Etc.. . . . . . . . . . . . . . 17
8.8. Appointment of Receiver, Reorganization . . . . . . . 17
8.9. Final Judgment. . . . . . . . . . . . . . . . . . . . 17
8.10. Representations and Warranties. . . . . . . . . . . . 17
8.11. Insecurity. . . . . . . . . . . . . . . . . . . . . . 17
8.12. Material Adverse Effect . . . . . . . . . . . . . . . 17
8.13. Interest Rate . . . . . . . . . . . . . . . . . . . . 18
8.14. Application of Funds. . . . . . . . . . . . . . . . . 18
ARTICLE IX. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . 19
9. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.1. Acceleration of Note; Demand For Payment. . . . . . . 19
9.2. Rights Under Code . . . . . . . . . . . . . . . . . . 19
9.3. Effect of Selective Enforcement . . . . . . . . . . . 20
9.4. Waiver of Event of Default. . . . . . . . . . . . . . 20
9.5. Deposits; Setoff. . . . . . . . . . . . . . . . . . . 20
ARTICLE X. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 20
10.1. Conduct of Business . . . . . . . . . . . . . . . . . 20
10.2. Survival of Representations . . . . . . . . . . . . . 21
10.3. Cumulative Remedies . . . . . . . . . . . . . . . . . 21
10.4. Expenses. . . . . . . . . . . . . . . . . . . . . . . 21
10.5. Indemnification . . . . . . . . . . . . . . . . . . . 21
10.6. Limitation of Liability . . . . . . . . . . . . . . . 22
10.7. Notices . . . . . . . . . . . . . . . . . . . . . . . 22
10.8. Usury . . . . . . . . . . . . . . . . . . . . . . . . 22
10.9. Construction. . . . . . . . . . . . . . . . . . . . . 23
10.10. Submission to Jurisdiction; Venue . . . . . . . . . . 23
10.11. Binding Effect. . . . . . . . . . . . . . . . . . . . 24
10.12. Entire Agreement. . . . . . . . . . . . . . . . . . . 24
10.13. Counterparts. . . . . . . . . . . . . . . . . . . . . 24
10.14. Waiver of Jury Trial. . . . . . . . . . . . . . . . . 24
10.15. Termination . . . . . . . . . . . . . . . . . . . . . 24
10.16. Effect of Trust . . . . . . . . . . . . . . . . . . . 24
Schedules
1 Pledge Agreement
2 Financing Statement
3 Promissory Note
4 Request for Advance
<PAGE>
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT is entered into as of
November 21, 1994, between GEORGE J. RECORDS, AS TRUSTEE OF THE
NANCY JOHNSTON TRUST (the "Borrower"), having a notice address at
501 West Interstate 44 Road, Oklahoma City, Oklahoma 73118-6054 and
MIDLAND FINANCIAL CO., an Oklahoma corporation (the "Lender"),
having a notice address at 501 West Interstate 44 Road, Oklahoma
City, Oklahoma 73118-6054.
The Borrower has applied to the Lender for a revolving
credit loan and the Lender is willing to make such loan to the
Borrower upon the terms and subject to the conditions hereinafter
set forth;
Accordingly, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
1. Certain Defined Terms. As used in this Agreement,
including the Schedules hereto, the following terms shall have the
meanings set forth below (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Advance". Proceeds to be advanced and readvanced by the
Lender to the Borrower hereunder.
"Advance Date". The date of an Advance as provided in
Section 2.2.1 hereof.
"Advance Limit". The amount which the Lender may advance
as provided in Section 2.2.3.
"Affiliate". With respect to any Person, any other
Person which, directly or indirectly, controls, is controlled by or
is under common control with, such Person. The term "control"
(including, with correlative meanings, the terms "controlled by"
and "under common control with") as used with respect to any
Person, shall mean, the possession, directly or indirectly, of the
power to direct or cause the direction of the Management and
policies of such Person. "Affiliate" shall include each director,
officer and shareholder of a Person that is a corporation, and each
general partner of a general or limited partnership.
"AFR" or "Applicable Federal Rate". The short-term
applicable federal rate of interest compounded annually as
published from time to time in the Internal Revenue Bulletin as a
Revenue Ruling pursuant to Section 1274(d) of the Internal Revenue
Code of 1986.
"Agreement". This Revolving Credit Agreement as
originally executed and, if amended, supplemented or restated, as
so amended, supplemented or restated.
"Aggregate Commitment". The aggregate amount which the
Lender agrees to loan to the Borrower under the terms of this
Agreement, which amount shall be $10,000,000 on the Effective Date
and is subject to termination pursuant to the terms hereof.
"Amount Outstanding". At any time, the aggregate amount
of principal and accrued interest owing under the Note.
"Business Day". A day which is a business day in
Oklahoma City, Oklahoma and which is not a Saturday, Sunday or
national holiday.
"Collateral". Shares of the issued and outstanding
common stock, par value $1.00 per share ("Common Stock") of Turner
Corp., a Delaware corporation ("Turner") and all accounts, general
intangibles, instruments and proceeds arising from or by virtue of,
or collections with respect to, or comprising part of, any of the
Turner Common Stock and other property pledged to or held by or for
the Bank pursuant to this Agreement.
"Effective Date". Effective Date shall mean November 21,
1994.
"Event of Default". The occurrence of any one or more of
the events stated in Article VIII of this Agreement.
"Financial Statement". A balance sheet and statements of
income for a specified period ended on such date.
"Indebtedness". All items categorized as liabilities on
a balance sheet included in Financial Statements of a Person and
further including, without limitation, (a) all indebtedness
guaranteed by such Person, directly or indirectly, in any manner,
or endorsed (otherwise than for collection or deposit in the
ordinary course of business) or discounted by such Person with
recourse, including all indebtedness in effect guaranteed by such
Person through agreements, contingent or otherwise, to purchase
such indebtedness, or to purchase, sell or lease property primarily
for the purpose of enabling another Person to make payment of such
indebtedness or to assure the owner of such indebtedness against
loss, or to supply funds or to in any other manner invest in
another Person; (b) all indebtedness secured by a mortgage, lien,
deed of trust, pledge, security interest, charge or encumbrance
upon or in property owned by such Person, if that Person has made
or is required to make payments in respect of such indebtedness;
and (c) capitalized rental obligations of such Person.
"Loan". The Advances to be made by the Lender to the
Borrower as provided in Section 2.1 hereof.
"Loan Documents". This Agreement including all Schedules
hereto, the Note in the form of Schedule "3" hereto, the Pledge
Agreement in the form of Schedule "1" attached, the Financing
Statement in the form of Schedule "2" attached as a part hereof,
the Request for Advance, the instruments issued pursuant thereto
and all extensions, renewals, modifications and amendments thereof.
"Material Adverse Effect". Any circumstance or event
shall have occurred and be continuing which could reasonably be
expected by the Lender to (a) have an adverse effect upon the
validity, performance or enforceability of any Loan Documents, (b)
be material and adverse to the financial condition or business
operations of the Borrower, (c) impair the ability of the Borrower
to fulfill its obligations under this Agreement and under the Loan
Documents, (d) impair the ability of the Lender to enforce its
rights or avail itself of the remedies provided for in the Loan
Documents, or (e) cause an Event of Default under this Agreement to
occur.
"Note". The Borrower's promissory note in the face
amount of or, if more than one promissory note, in the aggregate
face amount of the Aggregate Commitment and in the form of Schedule
"3" annexed hereto, bearing the date of this Agreement and all
extensions, renewals, modifications and increases thereof executed
by Borrower and delivered to the Lender to evidence the loan and
advances thereunder contemplated by this Agreement. The Note will
be payable on the terms stated in Article II of this Agreement.
"Notice of Termination". A notice given by the Lender
that its willingness to lend under this Agreement has terminated.
A Notice of Termination shall be deemed the Lender's demand for
payment of all sums due and owing to the Lender by the Borrower
under the terms of this Agreement.
"Person". An individual, corporation, partnership,
association, joint stock company, trust or trustee thereof, estate
or executor thereof, unincorporated organization or joint venture,
court or governmental unit or any agency or subdivision thereof, or
any other legally recognizable entity.
"Request for Advance". The document in the form of
Schedule "4" attached hereto, to be submitted to Lender upon and
evidencing the request of the Borrower for a principal Advance
under this Agreement.
"Shares". Shares shall include any shares of capital
stock of a Person or any class which have no preference except
among each other in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution
or winding-up of such Person and which are not subject to mandatory
redemption or sinking fund payments by such Person.
"Security Documents". The term "Security Documents"
shall collectively mean that certain Pledge Agreement in the form
annexed hereto as Schedule "1", all financing statements and all
other writings granting the Lender a Lien upon the Collateral, any
supplements thereto, and any other agreements, authorizations,
consents or writings contemplated therein.
"Termination Date". Termination Date shall mean the date
on which the Lender's commitment to make the Loan under this
Agreement shall have been terminated pursuant to a Notice of
Termination or such later date as may be agreed upon by the parties
in accordance with the terms of this Agreement.
ARTICLE II
Amounts and Terms of the Loan
2.1. Loan. The Lender agrees upon the terms and subject
to the conditions hereof, to make loans (each such loan being an
"Advance" and collectively the "Loan") to the Borrower in an
aggregate principal Amount Outstanding at any one time not to
exceed the Aggregate Commitment.
2.2. Advances. All Advances hereunder shall be made by
the Lender as follows:
2.2.1. Request for Advance. The Borrower may
request that Advances be made by providing the Lender with a duly
executed and completed Request for Advance with respect to each
requested Advance, which Request for Advance shall specify the
principal amount of the proposed Advance and the proposed date for
such Advance (the "Advance Date"), which shall be not earlier than
one (1) Business Day following the Lender's receipt of such Request
for Advance.
2.2.2. Incremental Advances. Each request for an
Advance shall be made to the Lender at its office at 501 West
Interstate - 44 Road, Oklahoma City, Oklahoma 73118-6054, by
crediting the Borrower's general deposit account at the Borrower's
requested financial institution.
2.2.3. Advance Limit. Subject to the other
provisions of this Agreement, the amount of each Advance shall be
limited (the "Advance Limit") to the amount specified in the
Request for Advance; provided that the Lender shall have no
obligation to make a requested Advance to the extent that such
Advance, if made, would cause the Amount Outstanding, plus the
aggregate amount of all other Indebtedness of the Borrower to the
Lender to exceed the Aggregate Commitment.
2.2.4. Payments. The Borrower may borrow, re-
borrow, pay and prepay hereunder in accordance with and subject to
the provisions of this Agreement. Any such payment or prepayment
of the Loan by the Borrower shall be made to Lender at its office
at 501 West Interstate-44 Road, Oklahoma City, Oklahoma, 73118-
6054. Lender shall promptly apply the proceeds of any such payment
or prepayment in the manner set forth in Section 8.16 hereof.
2.2.5. Disbursements. The Lender will disburse as
an Advance the Advance Amount included in such Request for Advance
(in the form of Schedule 4 to this Agreement) but the amount of
such Advance will not exceed the aggregate amount of the Advance
Limits in connection with the current Request for Advance.
2.3. Note. The obligations of the Borrower to repay the
Advances made by Lender hereunder shall be evidenced by the Note
payable to the Lender in the amount of the Aggregate Commitment.
The Note shall be duly executed on behalf of the Borrower and dated
and delivered to Lender on the Effective Date. The date and amount
of each Advance and of each payment of principal hereunder shall be
endorsed by Lender at the time of such Advance or payment on the
schedule annexed to the Note issued to Lender. The aggregate un-
paid principal amount of all Advances set forth on such schedule
shall be the principal amount owing and unpaid on such Note;
provided, however, that any such notation or the failure to make
any such notation on the schedule attached to the Note shall not
limit or otherwise affect the obligation of the Borrower with
respect to the repayment of all Advances actually made hereunder.
The unpaid principal amount of the Note, together with all unpaid
interest accrued and accruing thereon shall be payable in full on
the Termination Date.
2.4. Interest. The Note shall bear interest (computed
on the basis of the actual number of days elapsed in a year of 365
days) from the date of its delivery until payment in full of all
amounts due thereunder on the unpaid principal amount thereof
outstanding from time to time, at a rate per annum equal to the
Applicable Federal Rate. Interest on the Note shall be payable to
Lender, in arrears, on the last day of each fiscal year of the
Lender, commencing July 31, 1995, and at the Termination Date
(whether by Notice of Termination or otherwise), and, after the
Termination Date, on demand.
2.5. Determination of Interest Rate. A determination of
the interest rate hereunder shall be made by Lender on the
Effective Date and thereafter, so long as any amount under the Note
remains unpaid, and Lender shall notify the Borrower in writing of
any change in the interest rate.
2.6. Maximum Interest Rate. It is not the intention of
the Lender to charge interest at a rate in excess of the maximum
legal rate of interest permitted to be charged to the Borrower
under applicable law, but if, notwithstanding, interest in excess
of said maximum legal rate shall be paid by the Borrower in
accordance with the terms hereof, the excess shall be retained by
Lender as additional cash collateral for the payment of the Loan.
ARTICLE III
Collateral, Security Agreement and Security Interest
3.1. Collateral; Delivery. Payment of the Indebtedness,
and the performance by the Borrower under this Agreement, shall be
secured by one or more Security Documents, all in form and
substance acceptable to the Lender, by which the Borrower conveys,
mortgages and grants a Lien upon the Collateral now owned or here-
after acquired by the Lender. From time to time, during the term
of this Agreement, the Lender, may require the Borrower to execute
other and further Security Documents to confirm and further secure
the interest of the Lender in the Collateral. At the time of
execution hereof, the Borrower agrees to execute and deliver to the
Lender, or redeliver as the case may be, all of the Collateral
together with a Pledge Agreement in the form of Schedule "1" an-
nexed hereto, and stock powers sufficient to transfer the Col-
lateral into the Lender's name, upon Lender's election.
During the term of this Agreement, all stock dividends or
stock resulting from stock splits relating to the Collateral shall
be delivered to the Lender as additional collateral security for
the repayment of the Indebtedness. So long as no Event of Default
has occurred or is continuing and, in the absence of an Unmatured
Event of Default, the Borrower may receive all cash dividends in
respect of the Collateral and may distribute such dividends to its
shareholders.
3.2. Security Agreement; Security Interest. In order to
secure the payment of the Note and performance of the covenants
contained therein and in this Agreement, and in consideration of
this Agreement and of the covenants and warranties contained herein
and in the Agreement Documents, the Borrower hereby grants,
bargains, sells, releases, conveys, assigns, pledges, mortgages,
hypothecates, sets over and confirms unto the Lender and grants to
the Lender a first and prior security interest in and to all of the
Collateral, whether now owned or hereafter acquired, together with
all proceeds representing collections of principal and interest,
and proceeds attributable to the sale thereof. The Collateral,
when delivered to and while held by the Lender, shall be free and
clear of all liens, encumbrances, and restrictions created by the
Borrower or the Originator in favor of any Person other than the
Lender. This Agreement is intended for security only and is to
secure the obligations of the Borrower owing to the Lender as
described in this Agreement, and it is understood that the Lender
does not hereby assume any of the obligations of the Borrower in
connection with the Collateral. The security interest granted
hereby includes, without limitation, a pledge and assignment by the
Borrower of Mortgage Loans and such security interest constitutes
the first and only encumbrance on the Collateral in which such
security interest is granted. The Borrower shall, from time to
time, as requested by the Lender, execute, acknowledge and deliver
such documents and instruments and take such other action as the
Lender or the Designee, execute, acknowledge and deliver such
documents and instruments and take such other action as the Lender
shall deem necessary and desirable to establish, protect and
preserve the Lender's security interest in the Collateral.
So long as no Event of Default has occurred and is con-
tinuing, the Borrower shall have the right to manage and administer
any Collateral pledged and assigned to the Lender. The Lender, its
officers, directors, agents and employees, shall be indemnified and
held harmless by the Borrower from and against any and all liabili-
ties, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature what-
soever which may be imposed upon, incurred by or asserted against
the Lender or any of their officers, directors, agents or employees
growing out of or related to the holding of the Collateral, except
any such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, directly attributable to the
gross negligence or willful misconduct of the Lender, its
directors, officers, employees and agents. The Borrower shall
promptly reimburse the Lender for all costs, including the
reasonable fees and disbursements of counsel, incurred by it in (a)
preparing, filing and recording all instruments deemed necessary by
the Lender to create and perfect the Lender's security interests in
the Collateral; (b) taking custody on behalf of the Lender of any
Shares or other instruments relating to the Collateral; and (c)
obtaining such searches and legal opinions as the Lender shall deem
necessary to satisfy itself as to the due perfection and priority
of the Lender's security interest in the Collateral.
ARTICLE IV
Conditions of Lending
The obligation of the Lender to make the Loan hereunder
is subject to the following conditions precedent:
4.1. Representations and Warranties. On the Effective
Date and at the time of each Advance hereunder, the representations
and warranties of the Borrower contained herein or in any other
Loan Document delivered to the Lender hereunder by or on behalf of
the Borrower shall be true and correct in all material respects on
and as of such time with the same effect as though such representa-
tions and warranties had been made on and as of such time, except
to the extent that such representations and warranties expressly
relate to an earlier date.
4.2. Delivery of Note. On the Effective Date, Lender
shall have received the Note, evidencing the Advances to be made
hereunder, duly executed by the Borrower, and all other Loan
Documents shall have been duly executed, acknowledged, and
delivered to the Lender.
4.3. No Default. On the Effective Date and at the time
of each Advance hereunder, and after giving effect thereto, the
Borrower shall be in compliance with all the terms and provisions
set forth herein on its part to be observed or performed, and no
Event of Default shall have occurred and be continuing.
4.4. Supporting Documents. On or prior to the Effective
Date, Lender shall have received such supporting documents or other
information with respect to the operations and affairs of the
Borrower as the Lender or counsel to Lender may reasonably request.
All such documents and proceedings provided for in this
Article IV shall be satisfactory in form, scope and substance to
the Lender.
4.5. Financial Information. The Lender shall have
received current Financial Statements of the Borrower in form, and
reflecting a financial condition, of the Borrower satisfactory to
the Lender. Such Financial Statements shall include (a) unaudited
Financial Statements of the Borrower as of the end of the most
recently ended fiscal year, and (b) the Borrower's most recent
federal income tax return.
4.6. Litigation. The Borrower shall have provided to
the Lender a schedule of all litigation to which Borrower is a
party and the Lender shall be satisfied that such litigation will
not have a Material Adverse Effect upon the financial and business
conditions of Borrower in the event of an unfavorable outcome.
ARTICLE V
Representations and Warranties
The Borrower represents and warrants to Lender that:
5.1. Organization, Powers, etc. The Borrower is a Trust
created and exiting under the laws of the State of Oklahoma. The
Borrower has the power and authority to own the properties which it
purports to own and to carry on its business as now conducted, and
has complied with all filing and other requirements of state and
local laws, insofar as such laws relate to doing business by the
Borrower, necessary to prevent the Borrower from thereafter being
precluded, by reason of its failure so to file or comply with such
requirements, from enforcing its rights with respect to its loans
and investments. The Borrower has the power to execute, deliver
and perform this Agreement, the Note and the other Loan Documents,
and to borrow hereunder.
5.2. Authorization of Loans, etc. The execution,
delivery and performance of this Agreement, the Note and the other
Loan Documents will not violate or contravene (a) any applicable
provision of law (including, without limitation, any applicable
usury or similar law), (b) any order, rule or regulation of any
court or other agency of government, (c) any provision of the
Declaration of Trust of the Borrower, as amended, or (d) any
indenture, agreement, or other instrument to which the Borrower is
a party or by which the Borrower or any of its property is or may
be bound, or be in conflict with, result in a breach of or
constitute, with or without notice or passage of time, a default
under any such indenture, agreement or other instrument, and except
as otherwise contemplated by this Agreement, will not result in the
creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon or any security interest in any property or
assets of the Borrower. This Agreement is, and the Note, and the
other Loan Documents will be, when executed and delivered here-
under, legal, valid and binding obligations of the Borrower, en-
forceable in accordance with their respective terms.
5.3. Financial Statements. The Borrower has heretofore
furnished to the Lender the following Financial Statements: (i)
unaudited Financial Statements of the Borrower at December 31,
1993; and (ii) unaudited Financial Statements of the Borrower for
the nine-month period ended September 30, 1994. Such Financial
Statements present fairly the financial condition of the Borrower
as of their respective dates, and show all material liabilities,
direct or contingent, of the Borrower as of such dates (including,
without limitation, liabilities for taxes and material commit-
ments), and such Financial Statements present fairly the results of
operations of the Borrower for the periods covered thereby.
5.4. Title to Properties. The Borrower has title to all
the properties and assets reflected on the Financial Statements
referred to in Section 5.3 hereof, and all properties and assets
acquired by the Borrower thereafter and prior to the date hereof,
except for (i) such assets as have been disposed of since the date
thereof in the ordinary course of business or as are no longer used
or useful in the conduct of its business and (ii) properties
acquired by foreclosure or by deed in lieu thereof and held for a
period not in excess of six months; and all such properties and
assets are free and clear of mortgages, pledges, filed liens,
charges and other encumbrances, except as reflected on such
Financial Statements.
5.5. Litigation. There are no actions, suits or
proceedings (whether or not purportedly on behalf of the Borrower)
pending or, to the knowledge of the Borrower, threatened against
the Borrower at law or in equity or before or by any federal, state
municipal, or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which
involve the Advances or the transactions herein contemplated or the
possibility of any judgment or liability which, if determined
adversely to the Borrower, individually or in the aggregate, would
or could result in a Material Adverse Effect on the business,
operations, properties or assets or in the condition (financial or
other) of the Borrower nor is there any set of circumstances or
state of facts currently or heretofore in existence and known to
the Borrower which would serve as a basis for any such action, suit
or proceeding. The Borrower is not in default with respect to any
final judgment, writ, injunction, decree, rule or regulation or any
court or federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, any of which defaults, individually or in the
aggregate, would have a Material Adverse Effect on the business,
operations, properties or assets or in the condition (financial or
other) of the Borrower.
5.6. Taxes. There have been filed all federal, state
and local tax returns with respect to the operations of the Bor-
rower which are required to be filed, including federal tax returns
for the fiscal year ended December 31, 1993, and all prior fiscal
years of the Borrower, and the Borrower has paid or caused to be
paid to the respective taxing authorities all taxes as shown on
said returns or on any assessment received by it to the extent that
such taxes have become due, except for taxes of the type not
required to be paid by Section 6.3 hereof. The Borrower knows of
no proposed material tax assessment against it. Except as may be
disclosed by letter addressed to the Lender delivered to the Lender
prior to the Effective Date, no extension of time for the
assessment of federal, state or local income taxes of the Borrower
is in effect or has been requested.
5.7. Agreements. The Borrower is not a party to any
agreement or instrument or subject to any restriction materially
and adversely affecting its business, operations, properties,
assets or condition (financial or other) nor is it in default with
respect to any agreement with any Person relating to Indebtedness
for Money Borrowed, except as disclosed in the Financial Statements
referred to in Section 5.3 hereof. The Borrower is not in default
in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any material
agreement or instrument to which it is a party.
5.8. Investment Company Act. The Borrower is not an
"Investment Company" within the meaning of the United States
Investment Company Act of 1940.
5.9. Federal Reserve Regulations. The Borrower is not
engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying any margin stock (within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System of the United
States).
5.10. Securities Activities. The Borrower has not
issued, and will not issue, any Securities except such issuances as
are (a) registered under the Securities Act of 1933, as amended, or
(b) exempt from such registration.
5.11. Compliance with Applicable Laws. The Borrower is
in compliance and conformity with all laws, ordinances, rules,
regulations, and all other legal requirements, the violation of
which would have a Material Adverse Effect on the business, opera-
tions, properties, assets or condition (financial or other) of the
Borrower. The Borrower has not received and has no basis to expect
to receive any order or notice of any violation or claim of
violation of any such law, ordinance, rule or regulation.
5.12. Consents, etc. No consent, approval, authorization
of, or registration, declaration, or filing with any governmental
authority (federal, state or local, domestic or foreign) is
required in connection with the execution and delivery of this
Agreement, the Note or other Loan Documents or the performance of
or compliance with the terms, provisions and conditions thereof.
To the extent that any franchises, licenses, certificates,
authorizations, approvals or consents from any Federal, state or
local (domestic or foreign) government, commission, bureau or
agency are required for the acquisition, ownership, operation or
maintenance by the Borrower of properties now owned, operated or
maintained by it, such franchises, licenses, certificates,
authorizations, approvals and consents have been validly granted,
are in full force and effect and constitute valid and sufficient
authorization therefor.
5.13. No Misrepresentation. No representation or
warranty contained herein or made hereunder and no certificate,
schedule or other document furnished or to be furnished in
connection with the transactions contemplated hereby contains or
will contain a misstatement of a material fact or omits or will
omit to state a material fact required to be stated therein in
order to make the statements contained therein, in the light of the
circumstances under which made, not misleading.
ARTICLE VI
Affirmative Covenants
The Borrower covenants and agrees that from the Effective
Date and until payment in full of the principal of and interest on
the Note and all other payments due hereunder unless the Lender
shall otherwise consent in writing, the Borrower will:
6.1. Existence, Properties, etc. Do or cause to be done
all things necessary to preserve and maintain in full force and
effect all qualifications or licenses required for the conduct of
its business or reasonably required by the Lender to be maintained,
and to comply with its Declaration of Trust, as amended, and with
all applicable laws and all material contracts, instruments and
agreements to which the Borrower is a party or by which the
Borrower or any of its properties or assets may be bound or to
which any of them is subject.
6.2. Notice. Give prompt written notice to the Lender
of any action or proceeding instituted by or against the Borrower
in any Federal or state court or before any commission or other
regulatory body, federal, state or local, or any such proceedings
threatened against it in writing, which, if adversely determined,
would have a Material Adverse Effect on the business, operations,
properties, assets, or condition (financial or other) of the
Borrower, and any other action, event or condition of any nature
known to the Borrower which could reasonably be expected to lead to
or result in a Material Adverse Effect upon the business,
operations, properties, assets or condition (financial or other) of
the Borrower, or which would constitute an Event of Default under
this Agreement or a default under any other material contract,
instrument or agreement to which the Borrower is a party or by
which the Borrower or any of its properties or assets may be bound
or to which any of them is subject.
6.3. Payment of Debts, Taxes, etc. Pay all debts and
perform all obligations promptly and in accordance with the terms
thereof and pay and discharge or cause to be paid and discharged
promptly all taxes, assessments and governmental charges or levies
imposed upon the Borrower or upon its income, receipts or any of
its properties before the same shall become in default, as well as
all lawful claims for labor, materials and supplies or otherwise
which, if unpaid, might become a lien or charge upon such prop-
erties or any part thereof; provided, however, that the Borrower
shall not be required to pay and perform any such debt or obliga-
tion if the effect of such failure to pay and perform will not
accelerate the maturity thereof or of any other debt or obligation
of the Borrower or permit the holder of any such debt or obligation
to cause any such debt or obligation to become due prior to the
stated maturity thereof; and provided, further, that the Borrower
shall not be required to pay taxes, assessments or governmental
charges or levies or claims for labor, materials and supplies for
which the Borrower has obtained an adequate bond or adequate in-
surance or which are being contested in good faith and by proper
proceedings which are being reasonably and diligently pursued.
6.4. Financial Information. Maintain a standard cash
basis system of accounting, and furnish to the Lender copies of
each of the following:
6.4.1. Unaudited Financial Statements. As soon as
available and in any event within 90 days after the end of each
fiscal year (commencing with the fiscal year ended December 31,
1994), Financial Statements of the Borrower as at the end of and
for such fiscal year, in reasonable detail and stating in
comparative form the figures as of the end of and for the previous
fiscal year.
6.4.2. Other Information. Such supplements to the
aforementioned documents and additional information and reports as
the Lender may reasonably request, all in detail reasonably satis-
factory to the Lender.
6.5. Access to Premises and Records. At all reasonable
times and as often as the Lender may reasonably request, permit
authorized representatives designated by Lender to have access to
the premises and properties of the Borrower and to the financial
records of the Borrower and other records relating to the opera-
tions and procedures of the Borrower, to make copies of or excerpts
from such records, and to discuss the affairs, finances and
accounts of the Borrower with, and be advised as to the same by,
the Borrower, all as shall be relevant to the performance or
observance of the terms, covenants or conditions of this Agreement
or the financial condition of the Borrower.
6.6. Properties and Insurance. Maintain and keep all
its properties and assets in good working order and condition and
make all needful and proper repairs, renewals and replacements;
maintain or require to be maintained adequate insurance, by
financially sound and reputable insurers, on all properties of the
Borrower which are of a character usually insured by Persons
engaged in the same or a similar business (to the extent deemed
necessary by the Borrower or as required by law), defects in title
or other risks which are of a character normally insured against by
such Persons; adequate public liability insurance against tort
claims which may be incurred by the Borrower, and such other
insurance as may be required by law.
6.7. Compliance with Applicable Laws. Promptly comply
with, conform to and obey all present and future laws, ordinances,
rules, regulations and all other legal requirements applicable to
the Borrower.
6.8. Additional Documents. Promptly on demand by the
Lender, the Borrower will perform or cause to be performed such
actions and execute or cause to be executed all such additional
agreements, contracts, indentures, documents and instruments as may
be required to perfect and maintain the security interests and
liens provided for in this Agreement and to fully preserve and
protect the rights of the Lender hereunder.
ARTICLE VII
Negative Covenants
The Borrower covenants and agrees that from the Effective
Date and until payment in full of all principal and interest on the
Note and all other payments due hereunder, unless the Lender shall
otherwise consent in writing, the Borrower will not, either
directly or indirectly:
7.1. Limitation on Indebtedness. Incur, create or
suffer to exist any Indebtedness except Indebtedness to Affiliates
of the Borrower and trade accounts payable to Persons who are not
Affiliates of the Borrower and which are incurred in the ordinary
course of business.
7.2. Modification of Debt Instruments. Amend or modify
the terms of any agreement or other instrument in respect of
Indebtedness of the Borrower to terms which are, in the opinion of
the Lender, less favorable to the Borrower.
7.3. Guarantees. Assume, guarantee or otherwise in any
way become liable or responsible for obligations of any other
Person, whether by agreement to purchase such obligations of any
other Person, or agreement for the furnishing of funds through the
purchase of goods, supplies or services (whether by way of stock
purchase, capital contribution, advance or loan) for the purpose of
paying or discharging the obligations of any other Person, or
otherwise, except for the endorsement of negotiable instrument in
the ordinary course of business.
7.4. Sale of Assets, Merger. Sell, lease or otherwise
dispose of all or a substantial part of its properties and assets
to any Person or Persons in any single transaction or series of
related transactions, consolidate with or merge into any other
Person, or acquire substantially all the properties or assets of
any other Person unless immediately after such acquisition the
Borrower is in compliance with the terms of this Agreement except
the contemplated sale or securitization of the Mortgage Loans.
7.5. Dividends, Purchases and Redemptions. Declare or
pay any dividends, or make any distribution of cash or property, to
beneficiaries of the Borrower if, immediately after giving effect
to any such payment, the Borrower would not be in compliance with
the terms, covenants and conditions of this Agreement.
7.6. Liens. Create, incur, assume or suffer to be
created, incurred or assumed, or permit to exist any pledge of, or
any mortgage, lien, charge or encumbrance of any nature with
respect to, any of its property or assets, or own or acquire or
agree to acquire any property of any character subject to any
security agreement, mortgage, conditional sale agreement or other
title retention agreement, or assign, pledge, or in any way
transfer or encumber its rights to receive income from any of its
properties or assets unless such liens shall be subordinated, in
form and substance and in a manner satisfactory to the Lender, to
the prior repayment of the Note, provided, however, that the
foregoing restrictions shall not prohibit:
7.6.1. Taxes, Etc. Liens for taxes, assessments,
governmental charges, levies or claims described in Section 6.3, if
payment thereof shall not at the time be required to be made by
such Section;
7.6.2. Mechanics and Materialmen. Liens of
carriers, warehousemen, mechanics, laborers and materialmen
incurred in the ordinary course of business for sums not yet due or
being contested in good faith; provided, however, that there shall
have been set aside on the books of the Borrower such reserve, if
any, as shall be required by generally accepted accounting
principles;
7.6.3. Ordinary Course. Liens incurred in the
ordinary course of business in connection with workmen's
compensation, unemployment insurance, statutory obligations or
social security legislation, or for any other purpose at the time
required by law as a condition precedent to the transaction of
business or the exercise of any of the privileges or licenses of
the Borrower;
7.6.4. Appeals. Liens incurred in respect of
attachments discharged within 60 days from the making thereof or
judgments or awards in force for less than 20 days or with respect
to which the Borrower shall, in good faith, be prosecuting an
appeal or proceeding for review and with respect to which a stay of
execution upon appeal or proceeding for review shall have been
secured if required;
7.6.5. Title Matters. Title defects, or liens or
encumbrances which do not secure Indebtedness, including survey
exceptions or encumbrances, easements, or rights of way for sewers,
electric lines, telegraph and telephone lines and other similar
purposes, zoning or other restrictions as to the use of real
estate, which title defects, liens and encumbrances do not, indi-
vidually or in the aggregate, impair the use of such property in
the operation of the Borrower's business or detract from the value
of such property;
7.6.6. Disclosed Liens. Presently existing liens
and pledges disclosed in the Financial Statements referred to in
Section 5.3 hereof or which in the aggregate are not substantial in
amount and do not materially affect the operation of the Borrower;
provided, however, that such liens or pledges shall not be renewed
or extended unless otherwise permitted by the provisions of this
Agreement; and
7.6.7. Other Liens. Such other liens, charges or
encumbrances incidental to the conduct of its business or the
ownership of the properties and assets of the Borrower which are
not incurred in connection with the borrowing of money or the
obtaining of advances or credit and which do not, in the aggregate,
materially detract from the value of any properties or assets of
the Borrower or materially impair the use thereof in the operation
of its business.
ARTICLE VIII
Events of Default
In the case of the happening of any of the following
events (hereinafter called "Events of Default"):
8.1. Representations and Warranties. Any representation
or warranty made herein shall prove to have been false and
misleading, when made, in any material respect;
8.2. Misleading Documents. Any report, financial
statement or other Loan Document furnished in connection with this
Agreement or the Loan hereunder shall prove to have been false and
misleading, when furnished, in any material respect;
8.3. Default. Default shall be made in the payment when
and as due and payable of (a) the principal of the Note, (b)
interest on the Note, (c) any of the expenses of the Lender
required to be paid by the Borrower hereunder, or (d) any other
amount payable to the Lender under the terms of this Agreement;
8.4. Other Defaults. Default shall be made with respect
to any Indebtedness of the Borrower (other than the Note) beyond
any applicable period of grace, or default shall be made with
respect to the performance of any other obligation incurred in
connection with any such Indebtedness, if the effect of any such
default is to accelerate the maturity of such or any other
Indebtedness or any such Indebtedness shall not be paid when due,
until and unless such default shall have been remedied or cured by
the Borrower or shall have been waived by the holder or holders of
such Indebtedness in accordance with the terms thereof;
8.5. Failure to Comply with Certain Covenants. Default
shall be made in the due observance or performance of the
covenants, conditions and agreements on the part of Borrower to be
observed or performed pursuant to Sections 6.4, 6.5, and 6.6 and
Article VII hereof;
8.6. Failure to Comply with Other Covenants. Default
shall be made in the due observance or performance of any other
covenant, condition or agreement on the part of the Borrower to be
observed or performed pursuant to the terms of this Agreement and
shall not have been remedied within 30 days after the occurrence of
any such default;
8.7. Receiver, Bankruptcy, Etc. The Borrower shall (a)
apply for or consent to the appointment of a receiver, trustee or
liquidator of the Borrower or any of their respective properties or
assets, (b) admit in writing its inability to pay its debts as they
mature, (c) make a general assignment for the benefit of creditors,
(d) be adjudicated a bankrupt or insolvent or (e) file a voluntary
petition in bankruptcy, or a petition or an answer seeking re-
organization, insolvency, readjustment of debts, dissolution or
liquidation or a similar proceeding under any law or statute, or
any answer admitting the material allegations of a petition filed
against it in any proceeding under any such law or if action shall
be taken by it for the purpose of effecting any of the foregoing;
8.8. Appointment of Receiver, Reorganization. An order,
judgment or decree shall be entered without the application,
approval, or consent of the Borrower by any court of competent
jurisdiction, approving a petition seeking reorganization of the
Borrower or of all or a substantial part of its properties or
assets, or appointing a receiver, trustee or liquidator of the
Borrower and such order, judgment or decree shall continue unstayed
and in effect for any period of 60 days;
8.9. Final Judgment. Final judgments for the payment of
money in excess of an aggregate of $25,000.00 shall be rendered
against the Borrower, and the same shall remain undischarged for a
period of 30 days during which execution shall not be effectively
stayed or contested in good faith;
8.10. Representations and Warranties. Any repre-
sentation, statement, certificate, schedule or report made or
furnished to the Lender on behalf of the Borrower is false or
erroneous in any material respect at the time of the making thereof
or any representation, warranty or covenant ceases to be complied
with in any material respect;
8.11. Insecurity. At any time the Lender in good faith
deems itself insecure or believes the payment of the Notes or the
performance of the Loan Documents is or has been impaired;
8.12. Material Adverse Effect. Any circumstance or event
shall have occurred and be continuing which (a) could reasonably be
expected to have any adverse effect whatsoever upon the validity,
performance or enforceability of any Loan Documents, (b) is or
might be material and adverse to the financial condition or
business operations of the Borrower, (c) could impair the ability
of the Borrower to fulfill its obligations under this Agreement and
under the Loan Documents, (d) could impair the ability of the
Lender to enforce its rights or avail itself of the remedies
provided for in the Loan Documents, or (e) cause an Event of
Default to occur; or
8.13. Interest Rate. At any time the Lender in good
faith believes that the rate of interest payable under the Loan
Documents exceeds the then legal rate of interest under applicable
law,
then, or at any time thereafter during the continuance of any such
event, Lender, by written or telegraphic notice to the Borrower,
may declare the Note and all other payments required to be made
hereunder to be forthwith due and payable, both as to principal and
interest, without presentment, demand, protest or other notice of
any kind, all of which are hereby expressly waived, anything
contained herein or in the Note to the contrary notwithstanding;
provided, however, that the happening of any event set forth in
subsections 8.4, 8.5, 8.7 and 8.8 of this Section shall cause
immediate acceleration of all payments due hereunder as aforesaid
unless such acceleration is waived by written or telegraphic notice
to the Borrower by Lender. In the event of any such acceleration
of all payments due hereunder, Lender's Aggregate Commitment
hereunder shall automatically be terminated and the Lender shall
cease making new commitments or increasing or extending existing
commitments and proceed to liquidate its Portfolio in the ordinary
course of business.
8.14. Application of Funds. In the event that the Note
shall have been declared due and payable pursuant to the terms of
Sections 8.1 through 8.13 hereof, the Lender agrees that any funds
received from or on behalf of the Borrower (including funds
realized by foreclosure of the Lender's security interest, if any,
in the Collateral) by the Lender shall be applied by Lender in
liquidation of all amounts due Lender hereunder in the following
manner and order:
8.14.1. Expenses. First, to reimburse the Lender
for any expenses incurred in accordance with Section 10.6 hereof;
8.14.2. Interest. Second, to payment of interest
due on the Note;
8.14.3. Principal. Third, to payment of principal
in respect of the Note.
ARTICLE IX
Remedies
9. Remedies. ON DEMAND, or on the occurrence of an Event of
Default, whichever shall first occur, in addition to the Lender's
rights and remedies under the Loan Documents, the Lender shall have
the following additional remedies:
9.1. Acceleration of Note; Demand For Payment. The Note
and all other obligations of the Borrower to the Lender shall
thereupon become immediately due and payable, without presentment,
demand, protest, notice of protest, declaration or notice of
acceleration or intention to accelerate, or other notice or
declaration of any kind, all of which are hereby expressly waived
by the Borrower. ON DEMAND, or during the continuance of any other
Event of Default, the Lender may, at its option, declare the Note
to be immediately due and payable, and the Lender will be entitled
to proceed to selectively and successively enforce its rights under
the Loan Documents, or any one or more of them.
9.2. Rights Under Code. This Agreement shall constitute
a security agreement under the Uniform Commercial Code of the State
of Oklahoma (the "UCC"). The Lender shall have with respect to all
Collateral all of the rights of a secured party under Article 9 of
the UCC, together with, and not by way of limitation, all of the
rights set forth herein. Upon an Event of Default, the Lender may
require the Borrower to assemble any of the Collateral not in
possession of the Lender and make it available at a place
reasonably convenient to both parties to be designated by the
Lender. Should any Event of Default occur, the Lender shall have
the right to sell the Collateral in one or more lots, at one or
more times, at public or private sales and with or without notice
of any kind that the Lender may elect, but in a commercially
reasonable manner; and at such prices and on such terms, as to cash
or credit, as the Lender may deem proper. Any sale may be made at
any place designated by the Lender and the Lender shall have the
right to become the purchaser at any such sale which is open to the
public, free and clear of any claim, right or equity of redemption,
all of which are expressly waived and released by the Borrower. If
notice is given of the public sale of any of the Collateral, it is
agreed that notice shall be satisfactorily given for all purposes
if such notice is given to the Borrower at least ten (10) days
prior to such sale. The foregoing notice provisions shall not
preclude the Lender's rights to foreclose upon the Collateral in
any other manner permitted under the UCC; however, a sale of the
Collateral in accordance with such notice requirements shall be
deemed a disposal of the Collateral in a commercially reasonable
manner. The Lender shall have the right in connection with the
Collateral either to sell the same as above provided, or to
foreclose, sue upon, or otherwise seek to enforce the same in its
own name or in the name of the Borrower as provided herein. After
an Event of Default shall occur, the Lender shall have the right to
renew, extend the time of payment of, or otherwise modify, amend,
supplement, settle or compromise, in any manner, any obligations
for the payment of money included in the Collateral, any security
therefor and any other agreements, instruments, claims or choses in
action of any kind, which may be included in the Collateral.
9.3. Effect of Selective Enforcement. In the event the
Lender shall elect to selectively and successively enforce its
rights under any one or more of the instruments securing payment of
the Note, such action shall not be deemed a waiver or discharge of
any other lien or encumbrance securing payment of the Note until
such time as the Lender shall have been paid in full all sums owing
to the Lender.
9.4. Waiver of Event of Default. The Lender may, by an
instrument in writing signed by the Lender, waive any Event of
Default which shall have occurred and any of the consequences of
such Event of Default, and, in such event, the Lender and the
Borrower will be restored to its former positions, rights and
obligations hereunder. Any Event of Default so waived shall, for
the purposes of this Agreement, be deemed to have been cured and
not to be continuing; but no such waiver shall extend to any
subsequent or other Event of Default or impair any consequences of
such subsequent or other Event of Default.
9.5. Deposits; Setoff. Regardless of the adequacy of
any other collateral security held by the Lender, any deposits or
other sums credited by or due from the Lender to Borrower will at
all times constitute collateral security for all indebtedness and
obligations of the Borrower owing to the Lender hereunder and may
be set off against any and all liabilities, direct or indirect,
absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to the Lender hereunder. The
rights granted by this paragraph shall be in addition to the rights
of the Lender under any statutory banker's lien.
ARTICLE X
Miscellaneous
10.1. Conduct of Business. Nothing contained in this
Agreement hereof shall be construed to prevent the Borrower from
foreclosing on Mortgage Loans or otherwise acquiring the ownership
of properties financed by the Borrower, disposing of properties,
taking actions necessary for completing, marketing, carrying or
operating properties financed or owned by the Borrower; provided,
however, that any such actions are necessary for the proper conduct
of the Borrower's business and are in the best interests of the
Borrower.
10.2. Survival of Representations. All covenants,
agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the making by
the Lender of the Loan herein contemplated and the execution and
delivery to the Lender of the Note evidencing such Loan and shall
continue in full force and effect so long as any portion of the
Note is outstanding and unpaid and the Aggregate Commitment has not
been terminated. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants,
promises and agreements by and on behalf of the Borrower which are
contained in this Agreement shall inure to the benefit of the
successors and assigns of the Lender.
10.3. Cumulative Remedies. No failure on the part of the
Lender to exercise and no delay in exercising any right hereunder
will operate as a waiver thereof, nor shall any single or partial
exercise by the Lender of any right hereunder preclude any other or
further right of exercise thereof or the exercise of any other
right.
10.4. Expenses. Whether or not the Loan hereby con-
templated is consummated, the Borrower agrees to pay all out-of-
pocket expenses incurred by the Lender in connection with the
transaction herein contemplated, including, without limitation, all
filing fees, recording costs, safekeeping fees, charges and
disbursements of the Lender and of legal counsel for the Lender,
and to pay all expenses (including legal expenses and attorney's
fees) of every kind resulting from or incidental to the preparation
or enforcement of the Loan Documents.
10.5. Indemnification. The Borrower shall indemnify the
Lender and each Affiliate thereof and their respective officers,
directors, employees, attorneys, and agents from, and hold each of
them harmless against, any and all losses, liabilities, claims,
damages, penalties, judgments, disbursements, costs, and expenses
(including attorneys' fees) to which any of them may become subject
which directly or indirectly arise from or relate to (a) the
negotiation, execution, delivery, performance, administration, or
enforcement of any of the Loan Documents, (b) any of the transac-
tions contemplated by the Loan Documents, (c) any breach by the
Borrower of any representation, warranty, covenant, or other agree-
ment contained in any of the Loan Documents, or (d) any in-
vestigation, litigation, or other proceeding, including, without
limitation, any threatened investigation, litigation, or other
proceeding relating to any of the foregoing. Without limiting any
provision of this Agreement or of any other Loan Document, it is
the express intention of the parties hereto that each Person to be
indemnified under this section shall be indemnified from and held
harmless against any and all losses, liabilities, claims, damages,
penalties, judgments, disbursements, costs, and expenses (including
attorneys' fees) arising out of or resulting from the sole or
contributory negligence of such Person.
10.6. Limitation of Liability. None of the Lender, or
any Affiliate, officer, director, employee, attorney, or agent
thereof shall have any liability with respect to, and the Borrower
hereby waives, releases, and agrees not to sue any of them upon,
any claim for any special, indirect, incidental, or consequential
damages suffered or incurred by the Borrower in connection with,
arising out of, or in any way related to, this Agreement or any of
the other Loan Documents, or any of the transactions contemplated
by this Agreement or any of the other Loan Documents. The Borrower
hereby waives, releases, and agrees not to sue the Lender or any of
its Affiliates, officers, directors, employees, attorneys, or
agents for punitive damages in respect of any claim in connection
with, arising out of, or in any way related to, this Agreement or
any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents.
10.7. Notices. All notices, requests and demands will be
served by registered or certified mail, postage prepaid, as fol-
lows:
The Borrower: George J. Records, as Trustee of the
Nancy Johnston Trust
MidFirst Plaza
501 West Interstate 44 Road, Suite 380
Oklahoma City, Oklahoma 73118-6054
Attn: George J. Records
The Lender: Midland Financial Co.
MidFirst Plaza
501 West Interstate 44 Road
Oklahoma City, Oklahoma 73118-6054
Attn: Rollin E. Drew, Esq.
General Counsel
or at such other address as any party hereto shall designate for
such purpose in a written notice to the other party hereto.
10.8. Usury. It is the intention of the parties hereto
to conform strictly to applicable usury laws now in force.
Accordingly, if the transactions contemplated hereby would be
usurious under applicable law, then, in that event, notwithstanding
anything to the contrary in any of the Loan Documents or in any
other instrument or agreement entered into in connection with or as
security for the Note, it is agreed as follows: (a) the aggregate
of all consideration that constitutes interest under applicable law
and that is contracted for, charged or received under this
Agreement or under any of the Loan Documents (whether designated as
interest, fees, indemnities, payments or otherwise) shall under no
circumstances exceed the maximum amount of interest permitted by
applicable law calculated on the basis of the actual number of days
elapsed over a year of three hundred sixty-five (365) days or three
hundred sixty-six (366) days, as the case may be, and any excess
shall be cancelled automatically and, if theretofore paid, shall be
credited on the applicable Note by the holder thereof (or, if such
Note has been paid in full, refunded to the Borrower); and (b) in
the event that the maturity of the Note is accelerated by reason of
an election of the Lender resulting from an event of Default under
this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes
interest may never include more than the maximum amount permitted
by applicable law, and excess interest, if any, provided for in
this Agreement or otherwise, shall be cancelled automatically as of
the date of such acceleration or prepayment and, if theretofore
paid, shall be credited on the applicable Note (or, if such Note
has been paid in full, refunded to the Borrower). All sections and
provisions of this Agreement, the Note, the Loan Documents and the
other instruments now or hereafter executed in connection with or
as security for any of such agreements or instruments, including
without limitation those sections and provisions calling for the
calculation of interest on the basis of the actual number of days
elapsed over a year of three hundred sixty five (365) days, are
subject to this paragraph 10.8, which limits the maximum amount of
interest.
10.9. Construction. This Agreement and the documents
issued hereunder are executed and delivered as an incident to a
lending transaction negotiated and to be performed in Oklahoma
City, Oklahoma County, Oklahoma. The Loan Documents are intended
to constitute a contract made under the laws of the State of
Oklahoma and to be construed in accordance with the laws of said
state. Nothing in this Agreement will be construed to constitute
the Lender as a joint venturer with the Borrower or to constitute
a partnership. Except for the terms defined in paragraph 1, the
descriptive headings of the paragraphs of this Agreement are for
convenience only and are not to be used in the construction of the
content of this Agreement. This Agreement may be executed in
multiple counterparts, each of which will be an original
instrument, but all of which will constitute one agreement.
10.10. Submission to Jurisdiction; Venue. The Borrower
and Lender hereby irrevocably: (a) submits and consents, and
waives any objection to personal jurisdiction in the State of
Oklahoma for the enforcement of the Loan Documents, and (b) waives
any and all personal rights under the law of any state to object to
jurisdiction in the State of Oklahoma for the purposes of litiga-
tion to enforce the Loan Documents. The Borrower further consents
to the venue of any state or federal court sitting in Oklahoma
County, Oklahoma, in any action arising under any of the Loan
Documents. Initiating such proceeding or taking such action in any
other state shall in no event constitute a waiver of the agreement
contained herein that the law of the State of Oklahoma shall govern
the rights and obligations of the Borrower and the Lender under the
Loan Documents, or of the submission herein made by the Borrower to
personal jurisdiction within the State of Oklahoma.
10.11. Binding Effect. This Agreement will be binding
on the Borrower and its successors and assigns, and will inure to
the benefit of the Lender and its successors and assigns.
10.12. Entire Agreement. This Agreement constitutes the
entire agreement between the Lender and the Borrower and may be
amended only by written instrument executed by the Lender and the
Borrower.
10.13. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute but
one agreement.
10.14. Waiver of Jury Trial. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN
ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF
THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE LENDER IN THE NEGOTIATION, ADMINISTRATION, OR
ENFORCEMENT THEREOF.
10.15. Termination. This Agreement may be terminated by
the Lender at any time by giving a Notice of Termination to the
Borrower. The effective date of such termination shall be the date
of such Notice of Termination, provided, that if No Event of De-
fault exists on the date of such Notice of Termination, the effec-
tive date of such termination shall be the sixtieth day next fol-
lowing such Notice of Termination unless the parties otherwise
agree.
10.16. Effect of Trust. This Agreement has been
executed on behalf of the Nancy Johnston Trust by George J.
Records, Trustee of the Nancy Johnston Trust, in his representative
capacity under the Declaration of Trust dated May 1, 1945, as
amended, and not individually, and shall bind only the trust estate
of the Nancy Johnston Trust, and as trustee, George J. Records
shall not be bound or held to any personal liability in connection
with the obligations of The Nancy Johnston Trust hereunder.
IN WITNESS WHEREOF, this instrument is executed as of the
date first above written.
BORROWER:
_______________________________
George J. Records, As Trustee
of the Nancy Johnston Trust
LENDER: MIDLAND FINANCIAL CO., an Oklahoma
corporation
By_____________________________
President
Exhibit 2
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is made effective the 21st day of
November, 1994 by GEORGE J. RECORDS, AS TRUSTEE OF THE NANCY
JOHNSON TRUST (hereinafter referred to as the "Debtor"), and
MIDLAND FINANCIAL CO., an Oklahoma corporation (hereinafter
referred to as the "Secured Party"), with its business address at
501 West Interstate 44 Road, Oklahoma City, Oklahoma 73118-6054.
W I T N E S S E T H:
1. Recitations. Of even date herewith, the Debtor has entered
into a certain revolving credit agreement with the Secured
Party (the "Credit Agreement"), and has made, executed and
delivered to the Secured Party its written promissory note
(the "Note") in the stated principal amount of Ten Million
and No/100's Dollars ($10,000,000.00). This Agreement is
intended to provide collateral security for the repayment of
all of the Borrower's obligations, now or hereafter owing to
the Secured Party, including the indebtedness represented by
the Note.
2. Pledge and Security Agreement. For good and valuable con-
sideration, the receipt and sufficiency of which are hereby
expressly acknowledged, the Debtor hereby grants Secured
Party a security interest in all of the following
(hereinafter collectively called the "Collateral"):
2.1. Outstanding shares of common stock, par value $1.00
("Common Stock"), of The Turner Corporation, a Delaware
corporation ("Turner"), now owned or hereafter acquired
by the Debtor;
2.2. All stock rights, rights to subscribe to additional
stock, stock dividends and dividends of every kind and
character, new securities, and all other property which
the Debtor now or may hereafter become entitled to re-
ceive and attributable to shares of Turner Common
Stock. In the event that any options, warrants or
other rights are issued in connection with the
Certificates during the term of this Agreement, such
options, warrants or rights may be exercised by Debtor
and if so exercised, all new shares or other securities
so acquired shall be assigned to Secured Party to be
held in the same manner as the shares of Turner Common
Stock originally pledged under this Agreement. In the
event that a share reclassification, readjustment or
other change is made in the capital structure of the
issuer of the shares of Turner Common Stock, any
additional or substituted shares shall be assigned to
the Secured Party to be held in the same manner as the
shares of Turner Common Stock originally pledged under
this Agreement. Secured Party shall also have a
security interest in all securities and other property,
rights or interests of any description at any time
issued or issuable as an addition to, in substitution
of or exchange for or with respect to the Collateral,
including, without limitation, shares issued as
dividends or as the result of any reclassification,
split-up or other corporate reorganization. Debtor
shall hold in trust for Secured Party and deliver
promptly to Bank, in the exact form received, all such
securities or other property which comes into the
possession, custody or control of Debtor; and
2.3. All cash and noncash proceeds of the above specified
property, regardless of kind, character or form.
This security interest is given to secure the payment and
performance of the Note and all security documents executed,
or to be executed, in connection therewith; all future
advances made by Secured Party to the Debtor; all
liabilities of Debtor to Secured Party of every kind and
description including both direct and indirect liabilities,
liabilities due or to become due and whether absolute or
contingent, and liabilities now existing or incurred in the
collection thereof, including reasonable attorney's fees in
enforcing the Secured Party's rights hereunder; all
extensions, renewals, substitutions and changes in the Note;
all advances made by the Secured Party to protect the
security hereof, including advances made for or on account
of levies, taxes and for maintenance or recovery of the
Collateral; interest on any and all monies expended or
advanced by the Secured Party hereunder or pursuant hereto;
and for performance of the covenants and agreements set
forth herein.
3. General Representations and Warranties. Debtor represents
and warrants that:
3.1. Except for the security interest granted to the Secured
Party herein, the Debtor is and shall remain the owner
of all Collateral free from any liens, security
interests, encumbrances, or other right, title or
interest of any other person, firm or corporation, and
the Debtor shall defend the Collateral against all
claims and demands of all persons at any time claiming
the same or any interest therein adverse to the Bank.
3.2. The Collateral is fully paid, validly issued, genuine
and is beneficially owned by Debtor free and clear of
all liens, claims and encumbrances or rights or
interest of any other person. There are no restric-
tions upon transfer of any of the Certificates other
than may appear on the face of the Certificates, and
Debtor may transfer such Certificates without the
consent of any other shareholders or the issuer of the
certificate.
3.3. Secured Party shall not be required to take any steps
necessary to preserve any rights in the Collateral
against prior parties or to protect, perfect, preserve
or maintain any security interest given to secure the
Collateral.
4. General Covenants.
4.1. The Debtor agrees to properly pay when due any and all
federal, state and local taxes, assessments and charges
upon or against the Collateral before the same become
delinquent and before penalties accrue thereon, unless
and to the extent that the same are being contested in
good faith by appropriate proceedings.
4.2. Upon request by Lender Bank, Debtor agrees to execute
and deliver such financing statement or statements, or
amendments thereof or supplements thereto, or other
instruments covering the Collateral as Secured Party
may from time to time require in order to preserve and
protect the security interest hereby granted.
4.3. In the event Debtor shall fail to pay taxes,
assessments, costs and expenses which Debtor is under
any of the terms hereof required to pay, or fails to
keep the Collateral free from other security interests,
liens or encumbrances, the Secured Party may (but is
not obligated to) make expenditures for any or all such
purposes and the amount so expended, together with
interest thereon at a rate per annum equal to the rate
of interest provided in the Note, shall become
immediately due and payable by Debtor to Secured Party
and shall have the benefit of and be secured by the
security interest herein granted and agreed to. All
costs and expenses of Secured Party in retaking,
holding, preparing for sale and selling or otherwise
realizing upon any Collateral in the event of default
by the Debtor, including court costs and reasonable
attorney's fees and other legal expense, shall likewise
constitute additional indebtedness of Debtor which
Debtor promises to pay on demand and which shall be en-
titled to the benefit of and be secured by said
security interest.
4.4. Upon receipt thereof, the Debtor shall immediately
deliver to Secured Party the Collateral described
herein to be held by Secured Party in the same manner
as the property originally deposited as Collateral, but
the Secured Party, at its option, may permit proceeds
in the form of cash dividends, but not stock dividends,
to be received and retained by Debtor as contemplated
in the Credit Agreement; provided, however, that
Secured Party may terminate such provision at any time
after a default occurs hereunder.
4.5. Provided that Debtor is not in default in the
performance of this Agreement, Debtor shall retain all
voting rights of the Certificates.
4.6. For all purposes herein, Secured Party shall be deemed
to have exercised reasonable care in the custody and
preservation of the Collateral if it takes such action
for that purpose as Debtor shall request, but failure
to honor any such request shall not,of itself, be
deemed failure to exercise reasonable care.
4.7. In its discretion and without notice to the Debtor, the
Secured Party may take any one or more of the following
actions, without liability, except to account for prop-
erty actually received by it:
(i) Insure any of the Collateral;
(ii) Exchange any of the Collateral for other property
upon a reorganization, recapitalization or other
readjustment and, in connection therewith, deposit
any of the Collateral with any committee or
depositary upon such terms as the Secured Party
may determine;
(iii) In its name, or in the name of Debtor, demand, sue
for, collect or receive any money or property at
any time payable or receivable on account of or in
exchange for any of the Collateral and, in
connection therewith, endorse notes, checks,
drafts, money orders, documents of title or other
evidences of payment, shipment or storage in the
name of the Debtor; and
(iv) Take or release any other collateral security for
any of the Collateral.
4.8. The Secured Party shall be under no duty to exercise or
to withhold the exercise of any rights, powers,
privileges and options expressly or implicitly granted
to the Secured Party in this Agreement and shall not be
responsible for any failure to do so or delay in so
doing.
5. Events of Default. As used herein, an "Event of Default"
shall have occurred under this Agreement upon the occurrence
or existence of any event or condition which would permit
the Secured Party to accelerate the Maturity Date of the
Note, or otherwise constitute an Event of Default (as
defined in the Credit Agreement).
6. Remedies.
6.1. Upon the occurrence of an Event of Default and at any
time thereafter, Secured Party may without notice to
Debtor declare all liabilities secured hereby
immediately due and payable, and may proceed to enforce
payment and performance of same and exercise any and
all rights and remedies provided by the Uniform
Commercial Code, as well as all other rights and
remedies possessed by Bank. Unless the Collateral in
whole or in part threatens to decline speedily in value
or is of a type customarily sold on a recognized
market, Secured Party will give the Debtor reasonable
notice of the time and place of any public sale, or of
the time after which any private sale or other
disposition is to be made. The Secured Party may be a
purchaser at any public sale. The requirement of
reasonable notice shall be met if notice is mailed,
postage prepaid, to the address of the Debtor provided
for herein at least ten (10) days before sale or other
disposition. The Secured Party is authorized at any
such sale,if it deems it advisable to do so, to
restrict prospective bidders or purchasers to persons
who will represent and agree that they are purchasing
for their own account, for investment, and not with a
view to the distribution or sale of the Collateral.
Because of the Securities Act of 1933, as amended, or
any other laws or regulations, there may be legal
restrictions or limitations affecting Secured Party in
any attempts to dispose of certain portions of the
Collateral in the enforcement of its rights and
remedies hereunder. For these reasons, Secured Party
is hereby authorized by Debtor, but not obligated, upon
the occurrence or existence of an Event of Default
hereunder, to sell all or any part of the Collateral at
private sale, subject to investment letter or in any
other manner which will not require the Collateral, or
any part thereof, to be registered in accordance with
the Securities Act of 1933, as amended, or the rules
and regulations promulgated thereunder, or any other
law or regulation. Secured Party is also hereby
authorized by Debtor, but not obligated, to take such
actions, give such notices, obtain such rulings and
consents, and do such other things as Secured Party may
deem appropriate in the event of a sale or disposition
of any of the Collateral. Debtor clearly understands
that Secured Party may in its discretion approach a
restricted number of potential purchasers and that a
sale under such circumstances may yield a lower price
for the Collateral or any part or parts thereof than
would otherwise be obtainable if sale were registered
and sold in the open market, and Debtor agrees that
such private sales shall constitute a commercially
reasonable method of disposing of the Collateral.
6.2. As regards that portion of the Collateral consisting of
cash or cash equivalent items such as checks, drafts or
deposited funds, Secured Party may upon the occurrence
of an Event of Default specified in Section 5 hereof,
immediately apply them against any liabilities of the
Debtor, selected by Bank, and for this purpose it is
agreed that cash or equivalents will be considered
identical to cash proceeds. Secured Party shall have
the right immediately and without further actin by it
to st off against the liabilities secured hereby all
money owed by Secured Party to the undersigned whether
due or not, and Secured Party will be deemed to have
exercised such right of set off and to have made a
charge against such money at the time of any
acceleration upon default even though some charges made
are entered on the Secured Party's books subsequent
thereto. Upon the occurrence of an Event of Default as
specified in Section 5 hereof, Secured Party shall have
a right to dispose of the Collateral in a transaction
which is exempt from the registration provisions of the
Securities Act of 1934, as amended, and the Debtor
hereby agrees that a disposition in that manner, after
ten (10) days' notice to the Debtor of the Secured
Party's intention, shall be commercially reasonable.
Secured Party may demand, collect, receipt for,
settle,compromise, adjust, sue for, foreclose, release
or realize upon the Collateral, in its own name or in
the name of Debtor as Secured Party may determine.
Secured Party shall not be liable for any act or
omission on the part of Bank, its officers, agents, or
employees, except willful misconduct.
6.3. As regards that portion of the Collateral consisting of
stock or other voting securities, the Secured Party may
upon the occurrence of a default hereunder:
(i) Transfer to or register in its name or in the name
of its nominee any of the Collateral, with or
without indication of the security interest herein
created, and whether or not so transferred or
registered, receive the income, dividends and
other distributions thereon and hold them or apply
them to the liabilities of the Debtor, in any
order of priority.
(ii) Exercise or cause to be exercised all voting and
corporate powers with respect to any of the Col-
lateral so registered or transferred, including
all rights of conversion, exchange, subscription
or any other rights, privilege or options per-
taining to such collateral, as if the absolute
owner thereof;
(iii) Make any compromise or settlement deemed advisable
with respect to any of the Collateral;
(iv) Renew, extend or otherwise change the terms and
conditions of any of the Collateral.
7. General.
7.1. Further Assurances. Debtor agrees to execute such
stock powers, endorse such instruments, or execute such
additional pledge agreements or other documents as may
be required by the Secured Party in order effectively
to grant to Secured Party the security interest in (and
pledge and assignment of) the Collateral and to enforce
and exercise Secured Party's rights regarding same.
7.2. Securities Laws. Upon the occurrence or existence of
an Event of Default, Debtor hereby agrees to cooperate
fully with Secured Party to sell, at foreclosure or
other private sale, the Collateral pledged hereunder.
Specifically, Debtor agrees to fully comply with the
securities laws of the United States and the State of
Oklahoma, and with any other applicable laws, rules or
regulations, and to take such action as may be
necessary to permit Secured Party to sell or otherwise
transfer the securities pledged hereunder in compliance
with such laws. Without limiting the foregoing,
Debtor, at its own expense, upon request by Secured
Party, agrees to effect and obtain such registrations,
filings, statements, rulings, consents and other
matters as Secured Party may reasonably request.
7.3. Power of Authority. Debtor hereby makes, constitutes,
and appoints Secured Party or its nominee, its true and
lawful attorney in fact and in its name, place, and
stead, and on its behalf, and for its use and benefit
to complete, execute and file with the United States
Securities and Exchange Commission one or more notices
of proposed sale of securities pursuant to Rule 144
under the Securities Act of 1933 and/or any similar
filings or notices with any applicable state agencies,
and said attorney in fact shall have full power and
authority to do, take and perform all and every act and
thing whatsoever requisite, proper or necessary to be
done, in the exercise of the rights and powers herein
granted, as fully to all intents and purposes as Debtor
might or could do if personally present. This power
shall be irrevocable and deemed coupled with an
interest. The rights, powers and authority of said
attorney in fact herein granted shall commence and be
in full force and effect from the date of this
agreement, and such rights, powers and authority shall
remain in full force and effect, and this power of
attorney shall not be rescinded, revoked, terminated,
amended or otherwise modified, until the Indebtedness
has been fully satisfied.
7.4. Expenditures of Secured Party. The Debtor shall be
liable for and agrees to pay Secured Party for all ex-
penditures of Secured Party in maintaining the Col-
lateral, and all costs, attorney's fees and other ex-
penditures of Secured Party in the enforcement or col-
lection of any note, warranty, agreement, liability or
obligation of the Debtor, to Secured Party or in the
enforcement or collection of or realization upon the
Collateral or in the holding, preparing for sale or
sale of any Collateral.
7.5. Waivers. No act, delay, omission, or course of dealing
between the Debtor and Bank, including Secured Party's
waiver of remedy because of any default hereunder,
shall constitute a waiver of any of Secured Party's
rights and remedies under this Agreement or any other
agreement between the parties, or under the documents
evidencing the liabilities secured hereby. Waiver by
Secured Party of any rights or remedies under the terms
of this Agreement or with respect to any of Debtor's
liabilities to Secured Party will not be a bar to the
exercise of any right or remedy on any subsequent
occasion. All rights and remedies of Secured Party are
cumulative and may be exercised singularly or
concurrently, and the exercise of any one or more of
them will not be a waiver of any other. No waiver,
change, modification, or discharge of any of Secured
Party's rights or of the Debtor's duties as so
specified or allowed will be effective unless in
writing and signed by Bank.
7.6. Secured Party's Right to Transfer. Debtor grants to
Secured Party the right to transfer any and all of the
Collateral to its own name or that of its nominee after
default, and Secured Party may exercise all rights and
privileges to which it will thereupon become entitled,
but it will be under no duty to exercise such rights
and privileges.
7.7. Rights of Secured Party Assignable. Secured Party at
any time and at its option may pledge, transfer or
assign its rights under this Agreement or any part of
said rights, and any pledgee, transferee or assignee
shall have the rights of Secured Party as to the rights
or parts thereof so pledged, transferred or assigned.
7.8. Partial Invalidity. If any provision of this Agreement
shall for any reason be held to be invalid or
unenforceable, such invalidity or unenforceability
shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid or
unenforceable provisions had never been contained
herein.
7.9. Binding Effect. This Agreement shall be binding on the
Debtor's respective heirs, executors, administrators,
representatives, successors and assigns, and shall
inure to the benefit of the Secured Party's successors
and assigns.
7.10. Construction. This Agreement shall be deemed a
contract made under the laws of the State of Oklahoma
and shall be construed in accordance with the laws of
said state.
7.11. Effect on Trust. This Agreement has been executed on
behalf of the Nancy Johnston Trust by George J.
Records, Trustee of the Nancy Johnston Trust, in his
representative capacity under the Declaration of Trust
dated May 1, 1945, as amended, and not individually,
and shall bind only the trust estate of the Nancy
Johnston Trust, and as trustee, George J. Records shall
not be bound or held to any personal liability in
connection with the obligations of the Nancy Johnston
Trust hereunder.
IN WITNESS WHEREOF, Secured Party and Debtor have
caused this Agreement to be duly executed and delivered as of the
date and year first above written.
SECURED PARTY: MIDLAND FINANCIAL CO., an
Oklahoma corporation
By__________________________
Name: _________________
Title: ________________
DEBTOR:
____________________________
George J. Records, as
Trustee of The Nancy
Johnston Trust
<PAGE>
IRREVOCABLE PROXY
I, the undersigned, being the joint record owner of
_______________________________________________ (___________)
shares of common stock, do hereby appoint ____________________ as
my proxy to attend all meetings of the stockholders of The Turner
Corporation, a Delaware corporation, ("the Corporation") with
full power to vote and act for me in the same manner and extent
that I might were I personally present at said meetings.
This proxy shall be irrevocable.
Dated ________________, 199__.
____________________________
_______________________(Name)
Address:
_____________________________
_____________________________
<PAGE>
STOCK POWER
FOR VALUE RECEIVED GEORGE J. RECORDS, AS TRUSTEE OF THE
NANCY JOHNSTON TRUST ("Seller") does hereby sell, assign and
transfer unto ______________________________________________,
_____________________________________________(_________) shares
of the common capital stock of The Turner Corporation, a Delaware
corporation (the "Company"), standing in _________________ name
on the books of the Company, represented by Certificate No.
___________ and does hereby irrevocably constitute and appoint
MIDLAND FINANCIAL CO., its attorney-in-fact to transfer or
authorize the transfer of said stock on the books of the Company,
with full power of substitution in the premises.
Dated this ______ day of _____________, 199__.
SELLER:
___________________________
George J. Records, as
Trustee of The Nancy
Johnston Trust
Exhibit 3
FIRSTINSURE, INC.
AND
GEORGE J. RECORDS, AS TRUSTEE OF
THE NANCY JOHNSTON TRUST
REVOLVING CREDIT AGREEMENT
November 21, 1994
<PAGE>
TABLE OF CONTENTS
Page No.
ARTICLE I. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . .1
1. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . .1
"Advance" . . . . . . . . . . . . . . . . . . . . . . . . . . .1
"Advance Date". . . . . . . . . . . . . . . . . . . . . . . . .1
"Advance Limit" . . . . . . . . . . . . . . . . . . . . . . . .1
"Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . .1
"AFR" or "Applicable Federal Rate". . . . . . . . . . . . . . .1
"Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . .2
"Aggregate Commitment". . . . . . . . . . . . . . . . . . . . .2
"Amount Outstanding". . . . . . . . . . . . . . . . . . . . . .2
"Business Day". . . . . . . . . . . . . . . . . . . . . . . . .2
"Collateral". . . . . . . . . . . . . . . . . . . . . . . . . .2
"Effective Date". . . . . . . . . . . . . . . . . . . . . . . .2
"Event of Default". . . . . . . . . . . . . . . . . . . . . . .2
"Financial Statement" . . . . . . . . . . . . . . . . . . . . .2
"Indebtedness". . . . . . . . . . . . . . . . . . . . . . . . .2
"Loan". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Loan Documents". . . . . . . . . . . . . . . . . . . . . . . .3
"Material Adverse Effect" . . . . . . . . . . . . . . . . . . .3
"Note". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Notice of Termination" . . . . . . . . . . . . . . . . . . . .3
"Person". . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Request for Advance" . . . . . . . . . . . . . . . . . . . . .3
"Shares". . . . . . . . . . . . . . . . . . . . . . . . . . . .3
"Security Documents". . . . . . . . . . . . . . . . . . . . . .4
"Termination Date". . . . . . . . . . . . . . . . . . . . . . .4
ARTICLE II. Amounts and Terms of the Loan . . . . . . . . . . . . . . . .4
2.1. Loan. . . . . . . . . . . . . . . . . . . . . . . . . .4
2.2. Advances. . . . . . . . . . . . . . . . . . . . . . . .4
2.3. Note. . . . . . . . . . . . . . . . . . . . . . . . . .5
2.4. Interest. . . . . . . . . . . . . . . . . . . . . . . .5
2.5. Determination of Interest Rate. . . . . . . . . . . . .5
2.6. Maximum Interest Rate . . . . . . . . . . . . . . . . .5
ARTICLE III. Collateral, Security Agreement and Security
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
3.1. Collateral; Delivery. . . . . . . . . . . . . . . . . .6
3.2. Security Agreement; Security Interest . . . . . . . . .6
ARTICLE IV. Conditions of Lending . . . . . . . . . . . . . . . . . . . .7
4.1. Representations and Warranties. . . . . . . . . . . . .7
4.2. Delivery of Note. . . . . . . . . . . . . . . . . . . .8
4.3. No Default. . . . . . . . . . . . . . . . . . . . . . .8
4.4. Supporting Documents. . . . . . . . . . . . . . . . . .8
4.5. Financial Information . . . . . . . . . . . . . . . . .8
4.6. Litigation. . . . . . . . . . . . . . . . . . . . . . .8
<PAGE>
ARTICLE V. Representations and Warranties . . . . . . . . . . . . . . . .8
5.1. Organization, Powers, etc . . . . . . . . . . . . . . .8
5.2. Authorization of Loans, etc.. . . . . . . . . . . . . .9
5.3. Financial Statements. . . . . . . . . . . . . . . . . .9
5.4. Title to Properties . . . . . . . . . . . . . . . . . .9
5.5. Litigation. . . . . . . . . . . . . . . . . . . . . . .9
5.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . 10
5.7. Agreements. . . . . . . . . . . . . . . . . . . . . . 10
5.8. Investment Company Act. . . . . . . . . . . . . . . . 10
5.9. Federal Reserve Regulations . . . . . . . . . . . . . 10
5.10. Securities Activities . . . . . . . . . . . . . . . . 11
5.11. Compliance with Applicable Laws . . . . . . . . . . . 11
5.12. Consents, etc.. . . . . . . . . . . . . . . . . . . . 11
5.13. No Misrepresentation. . . . . . . . . . . . . . . . . 11
ARTICLE VI. Affirmative Covenants . . . . . . . . . . . . . . . . . . . 11
6.1. Existence, Properties, etc. . . . . . . . . . . . . . 12
6.2. Notice. . . . . . . . . . . . . . . . . . . . . . . . 12
6.3. Payment of Debts, Taxes, etc. . . . . . . . . . . . . 12
6.4. Financial Information . . . . . . . . . . . . . . . . 12
6.5. Access to Premises and Records. . . . . . . . . . . . 13
6.6. Properties and Insurance. . . . . . . . . . . . . . . 13
6.7. Compliance with Applicable Laws . . . . . . . . . . . 13
6.8. Additional Documents. . . . . . . . . . . . . . . . . 13
ARTICLE VII. Negative Covenants . . . . . . . . . . . . . . . . . . . . 14
7.1. Limitation on Indebtedness. . . . . . . . . . . . . . 14
7.2. Modification of Debt Instruments. . . . . . . . . . . 14
7.3. Guarantees. . . . . . . . . . . . . . . . . . . . . . 14
7.4. Sale of Assets, Merger. . . . . . . . . . . . . . . . 14
7.5. Dividends, Purchases and Redemptions. . . . . . . . . 14
7.6. Liens . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE VIII. Events of Default . . . . . . . . . . . . . . . . . . . . 16
8.1. Representations and Warranties. . . . . . . . . . . . 16
8.2. Misleading Documents. . . . . . . . . . . . . . . . . 16
8.3. Default . . . . . . . . . . . . . . . . . . . . . . . 16
8.4. Other Defaults. . . . . . . . . . . . . . . . . . . . 16
8.5. Failure to Comply with Certain Covenants. . . . . . . 16
8.6. Failure to Comply with Other Covenants. . . . . . . . 17
8.7. Receiver, Bankruptcy, Etc.. . . . . . . . . . . . . . 17
8.8. Appointment of Receiver, Reorganization . . . . . . . 17
8.9. Final Judgment. . . . . . . . . . . . . . . . . . . . 17
8.10. Representations and Warranties. . . . . . . . . . . . 17
8.11. Maturity of Other Debt. . . . . . . . . . . . . . . . 17
8.12. Insecurity. . . . . . . . . . . . . . . . . . . . . . 17
8.13. Material Adverse Effect . . . . . . . . . . . . . . . 17
8.14. Interest Rate . . . . . . . . . . . . . . . . . . . . 18
8.15. Application of Funds. . . . . . . . . . . . . . . . . 18
<PAGE>
ARTICLE IX. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . 19
9. Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.1. Acceleration of Note; Demand For Payment. . . . . . . 19
9.2. Rights Under Code . . . . . . . . . . . . . . . . . . 19
9.3. Effect of Selective Enforcement . . . . . . . . . . . 20
9.4. Waiver of Event of Default. . . . . . . . . . . . . . 20
9.5. Deposits; Setoff. . . . . . . . . . . . . . . . . . . 20
ARTICLE X. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . 20
10.1. Conduct of Business . . . . . . . . . . . . . . . . . 20
10.2. Survival of Representations . . . . . . . . . . . . . 21
10.3. Cumulative Remedies . . . . . . . . . . . . . . . . . 21
10.4. Expenses. . . . . . . . . . . . . . . . . . . . . . . 21
10.5. Indemnification . . . . . . . . . . . . . . . . . . . 21
10.6. Limitation of Liability . . . . . . . . . . . . . . . 22
10.7. Notices . . . . . . . . . . . . . . . . . . . . . . . 22
10.8. Usury . . . . . . . . . . . . . . . . . . . . . . . . 22
10.9. Construction. . . . . . . . . . . . . . . . . . . . . 23
10.10. Submission to Jurisdiction; Venue . . . . . . . . . . 23
10.11. Binding Effect. . . . . . . . . . . . . . . . . . . . 24
10.12. Entire Agreement. . . . . . . . . . . . . . . . . . . 24
10.13. Counterparts. . . . . . . . . . . . . . . . . . . . . 24
10.14. Waiver of Jury Trial. . . . . . . . . . . . . . . . . 24
10.15. Termination . . . . . . . . . . . . . . . . . . . . . 24
10.16. Effect of Trust . . . . . . . . . . . . . . . . . . . 24
Schedules
1 Pledge Agreement
2 Financing Statement
3 Promissory Note
4 Request for Advance
<PAGE>
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT is entered into as of
November 21, 1994, between GEORGE J. RECORDS, AS TRUSTEE OF THE
NANCY JOHNSTON TRUST (the "Borrower"), having a notice address at
501 West Interstate 44 Road, Oklahoma City, Oklahoma 73118-6054 and
FIRSTINSURE, INC., an Oklahoma corporation (the "Lender"), having
a notice address at 501 West Interstate 44 Road, Oklahoma City,
Oklahoma 73118-6054.
The Borrower has applied to the Lender for a revolving
credit loan and the Lender is willing to make such loan to the
Borrower upon the terms and subject to the conditions hereinafter
set forth;
Accordingly, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
1. Certain Defined Terms. As used in this Agreement,
including the Schedules hereto, the following terms shall have the
meanings set forth below (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Advance". Proceeds to be advanced and readvanced by the
Lender to the Borrower hereunder.
"Advance Date". The date of an Advance as provided in
Section 2.2.1 hereof.
"Advance Limit". The amount which the Lender may advance
as provided in Section 2.2.3.
"Affiliate". With respect to any Person, any other
Person which, directly or indirectly, controls, is controlled by or
is under common control with, such Person. The term "control"
(including, with correlative meanings, the terms "controlled by"
and "under common control with") as used with respect to any
Person, shall mean, the possession, directly or indirectly, of the
power to direct or cause the direction of the Management and
policies of such Person. "Affiliate" shall include each director,
officer and shareholder of a Person that is a corporation, and each
general partner of a general or limited partnership.
"AFR" or "Applicable Federal Rate". The short-term
applicable federal rate of interest compounded annually as
published from time to time in the Internal Revenue Bulletin as a
Revenue Ruling pursuant to Section 1274(d) of the Internal Revenue
Code of 1986.
"Agreement". This Revolving Credit Agreement as
originally executed and, if amended, supplemented or restated, as
so amended, supplemented or restated.
"Aggregate Commitment". The aggregate amount which the
Lender agrees to loan to the Borrower under the terms of this
Agreement, which amount shall be $500,000 on the Effective Date and
is subject to termination pursuant to the terms hereof.
"Amount Outstanding". At any time, the aggregate amount
of principal and accrued interest owing under the Note.
"Business Day". A day which is a business day in
Oklahoma City, Oklahoma and which is not a Saturday, Sunday or
national holiday.
"Collateral". Shares of the issued and outstanding
common stock, par value $1.00 per share ("Common Stock") of Turner
Corp., a Delaware corporation ("Turner") and all accounts, general
intangibles, instruments and proceeds arising from or by virtue of,
or collections with respect to, or comprising part of, any of the
Turner Common Stock and other property pledged to or held by or for
the Bank pursuant to this Agreement.
"Effective Date". Effective Date shall mean November 21,
1994.
"Event of Default". The occurrence of any one or more of
the events stated in Article VIII of this Agreement.
"Financial Statement". A balance sheet and statements of
income for a specified period ended on such date.
"Indebtedness". All items categorized as liabilities on
a balance sheet included in Financial Statements of a Person and
further including, without limitation, (a) all indebtedness
guaranteed by such Person, directly or indirectly, in any manner,
or endorsed (otherwise than for collection or deposit in the
ordinary course of business) or discounted by such Person with
recourse, including all indebtedness in effect guaranteed by such
Person through agreements, contingent or otherwise, to purchase
such indebtedness, or to purchase, sell or lease property primarily
for the purpose of enabling another Person to make payment of such
indebtedness or to assure the owner of such indebtedness against
loss, or to supply funds or to in any other manner invest in
another Person; (b) all indebtedness secured by a mortgage, lien,
deed of trust, pledge, security interest, charge or encumbrance
upon or in property owned by such Person, if that Person has made
or is required to make payments in respect of such indebtedness;
and (c) capitalized rental obligations of such Person.
"Loan". The Advances to be made by the Lender to the
Borrower as provided in Section 2.1 hereof.
"Loan Documents". This Agreement including all Schedules
hereto, the Note in the form of Schedule "3" hereto, the Pledge
Agreement in the form of Schedule "1" attached, the Financing
Statement in the form of Schedule "2" attached as a part hereof,
the Request for Advance, the instruments issued pursuant thereto
and all extensions, renewals, modifications and amendments thereof.
"Material Adverse Effect". Any circumstance or event
shall have occurred and be continuing which could reasonably be
expected by the Lender to (a) have an adverse effect upon the
validity, performance or enforceability of any Loan Documents, (b)
be material and adverse to the financial condition or business
operations of the Borrower, (c) impair the ability of the Borrower
to fulfill its obligations under this Agreement and under the Loan
Documents, (d) impair the ability of the Lender to enforce its
rights or avail itself of the remedies provided for in the Loan
Documents, or (e) cause an Event of Default under this Agreement to
occur.
"Note". The Borrower's promissory note in the face
amount of or, if more than one promissory note, in the aggregate
face amount of the Aggregate Commitment and in the form of Schedule
"3" annexed hereto, bearing the date of this Agreement and all
extensions, renewals, modifications and increases thereof executed
by Borrower and delivered to the Lender to evidence the loan and
advances thereunder contemplated by this Agreement. The Note will
be payable on the terms stated in Article II of this Agreement.
"Notice of Termination". A notice given by the Lender
that its willingness to lend under this Agreement has terminated.
A Notice of Termination shall be deemed the Lender's demand for
payment of all sums due and owing to the Lender by the Borrower
under the terms of this Agreement.
"Person". An individual, corporation, partnership,
association, joint stock company, trust or trustee thereof, estate
or executor thereof, unincorporated organization or joint venture,
court or governmental unit or any agency or subdivision thereof, or
any other legally recognizable entity.
"Request for Advance". The document in the form of
Schedule "4" attached hereto, to be submitted to Lender upon and
evidencing the request of the Borrower for a principal Advance
under this Agreement.
"Shares". Shares shall include any shares of capital
stock of a Person or any class which have no preference except
among each other in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution
or winding-up of such Person and which are not subject to mandatory
redemption or sinking fund payments by such Person.
"Security Documents". The term "Security Documents"
shall collectively mean that certain Pledge Agreement in the form
annexed hereto as Schedule "1", all financing statements and all
other writings granting the Lender a Lien upon the Collateral, any
supplements thereto, and any other agreements, authorizations,
consents or writings contemplated therein.
"Termination Date". Termination Date shall mean the date
on which the Lender's commitment to make the Loan under this
Agreement shall have been terminated pursuant to a Notice of
Termination or such later date as may be agreed upon by the parties
in accordance with the terms of this Agreement.
ARTICLE II
Amounts and Terms of the Loan
2.1. Loan. The Lender agrees upon the terms and subject
to the conditions hereof, to make loans (each such loan being an
"Advance" and collectively the "Loan") to the Borrower in an
aggregate principal Amount Outstanding at any one time not to
exceed the Aggregate Commitment.
2.2. Advances. All Advances hereunder shall be made by
the Lender as follows:
2.2.1. Request for Advance. The Borrower may
request that Advances be made by providing the Lender with a duly
executed and completed Request for Advance with respect to each
requested Advance, which Request for Advance shall specify the
principal amount of the proposed Advance and the proposed date for
such Advance (the "Advance Date"), which shall be not earlier than
one (1) Business Day following the Lender's receipt of such Request
for Advance.
2.2.2. Incremental Advances. Each request for an
Advance shall be made to the Lender at its office at 501 West
Interstate - 44 Road, Oklahoma City, Oklahoma 73118-6054, by
crediting the Borrower's general deposit account at the Borrower's
requested financial institution.
2.2.3. Advance Limit. Subject to the other
provisions of this Agreement, the amount of each Advance shall be
limited (the "Advance Limit") to the amount specified in the
Request for Advance; provided that the Lender shall have no
obligation to make a requested Advance to the extent that such
Advance, if made, would cause the Amount Outstanding, plus the
aggregate amount of all other Indebtedness of the Borrower to the
Lender to exceed the Aggregate Commitment.
2.2.4. Payments. The Borrower may borrow, re-
borrow, pay and prepay hereunder in accordance with and subject to
the provisions of this Agreement. Any such payment or prepayment
of the Loan by the Borrower shall be made to Lender at its office
at 501 West Interstate-44 Road, Oklahoma City, Oklahoma, 73118-
6054. Lender shall promptly apply the proceeds of any such payment
or prepayment in the manner set forth in Section 8.16 hereof.
2.2.5. Disbursements. The Lender will disburse as
an Advance the Advance Amount included in such Request for Advance
(in the form of Schedule 4 to this Agreement) but the amount of
such Advance will not exceed the aggregate amount of the Advance
Limits in connection with the current Request for Advance.
2.3. Note. The obligations of the Borrower to repay the
Advances made by Lender hereunder shall be evidenced by the Note
payable to the Lender in the amount of the Aggregate Commitment.
The Note shall be duly executed on behalf of the Borrower and dated
and delivered to Lender on the Effective Date. The date and amount
of each Advance and of each payment of principal hereunder shall be
endorsed by Lender at the time of such Advance or payment on the
schedule annexed to the Note issued to Lender. The aggregate un-
paid principal amount of all Advances set forth on such schedule
shall be the principal amount owing and unpaid on such Note;
provided, however, that any such notation or the failure to make
any such notation on the schedule attached to the Note shall not
limit or otherwise affect the obligation of the Borrower with
respect to the repayment of all Advances actually made hereunder.
The unpaid principal amount of the Note, together with all unpaid
interest accrued and accruing thereon shall be payable in full on
the Termination Date.
2.4. Interest. The Note shall bear interest (computed
on the basis of the actual number of days elapsed in a year of 365
days) from the date of its delivery until payment in full of all
amounts due thereunder on the unpaid principal amount thereof
outstanding from time to time, at a rate per annum equal to the
Applicable Federal Rate. Interest on the Note shall be payable to
Lender, in arrears, on the last day of each fiscal year of the
Lender, commencing December 31, 1995, and at the Termination Date
(whether by Notice of Termination or otherwise), and, after the
Termination Date, on demand.
2.5. Determination of Interest Rate. A determination of
the interest rate hereunder shall be made by Lender on the
Effective Date and thereafter, so long as any amount under the Note
remains unpaid, and Lender shall notify the Borrower in writing of
any change in the interest rate.
2.6. Maximum Interest Rate. It is not the intention of
the Lender to charge interest at a rate in excess of the maximum
legal rate of interest permitted to be charged to the Borrower
under applicable law, but if, notwithstanding, interest in excess
of said maximum legal rate shall be paid by the Borrower in
accordance with the terms hereof, the excess shall be retained by
Lender as additional cash collateral for the payment of the Loan.
ARTICLE III
Collateral, Security Agreement and Security Interest
3.1. Collateral; Delivery. Payment of the Indebtedness,
and the performance by the Borrower under this Agreement, shall be
secured by one or more Security Documents, all in form and
substance acceptable to the Lender, by which the Borrower conveys,
mortgages and grants a Lien upon the Collateral now owned or here-
after acquired by the Lender. From time to time, during the term
of this Agreement, the Lender, may require the Borrower to execute
other and further Security Documents to confirm and further secure
the interest of the Lender in the Collateral. At the time of
execution hereof, the Borrower agrees to execute and deliver to the
Lender, or redeliver as the case may be, all of the Collateral
together with a Pledge Agreement in the form of Schedule "1" an-
nexed hereto, and stock powers sufficient to transfer the Col-
lateral into the Lender's name, upon Lender's election.
During the term of this Agreement, all stock dividends or
stock resulting from stock splits relating to the Collateral shall
be delivered to the Lender as additional collateral security for
the repayment of the Indebtedness. So long as no Event of Default
has occurred or is continuing and, in the absence of an Unmatured
Event of Default, the Borrower may receive all cash dividends in
respect of the Collateral and may distribute such dividends to its
shareholders.
3.2. Security Agreement; Security Interest. In order to
secure the payment of the Note and performance of the covenants
contained therein and in this Agreement, and in consideration of
this Agreement and of the covenants and warranties contained herein
and in the Agreement Documents, the Borrower hereby grants,
bargains, sells, releases, conveys, assigns, pledges, mortgages,
hypothecates, sets over and confirms unto the Lender and grants to
the Lender a first and prior security interest in and to all of the
Collateral, whether now owned or hereafter acquired, together with
all proceeds representing collections of principal and interest,
and proceeds attributable to the sale thereof. The Collateral,
when delivered to and while held by the Lender, shall be free and
clear of all liens, encumbrances, and restrictions created by the
Borrower or the Originator in favor of any Person other than the
Lender. This Agreement is intended for security only and is to
secure the obligations of the Borrower owing to the Lender as
described in this Agreement, and it is understood that the Lender
does not hereby assume any of the obligations of the Borrower in
connection with the Collateral. The security interest granted
hereby includes, without limitation, a pledge and assignment by the
Borrower of Mortgage Loans and such security interest constitutes
the first and only encumbrance on the Collateral in which such
security interest is granted. The Borrower shall, from time to
time, as requested by the Lender, execute, acknowledge and deliver
such documents and instruments and take such other action as the
Lender or the Designee, execute, acknowledge and deliver such
documents and instruments and take such other action as the Lender
shall deem necessary and desirable to establish, protect and
preserve the Lender's security interest in the Collateral.
So long as no Event of Default has occurred and is con-
tinuing, the Borrower shall have the right to manage and administer
any Collateral pledged and assigned to the Lender. The Lender, its
officers, directors, agents and employees, shall be indemnified and
held harmless by the Borrower from and against any and all liabili-
ties, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature what-
soever which may be imposed upon, incurred by or asserted against
the Lender or any of their officers, directors, agents or employees
growing out of or related to the holding of the Collateral, except
any such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, directly attributable to the
gross negligence or willful misconduct of the Lender, its
directors, officers, employees and agents. The Borrower shall
promptly reimburse the Lender for all costs, including the
reasonable fees and disbursements of counsel, incurred by it in (a)
preparing, filing and recording all instruments deemed necessary by
the Lender to create and perfect the Lender's security interests in
the Collateral; (b) taking custody on behalf of the Lender of any
Shares or other instruments relating to the Collateral; and (c)
obtaining such searches and legal opinions as the Lender shall deem
necessary to satisfy itself as to the due perfection and priority
of the Lender's security interest in the Collateral.
ARTICLE IV
Conditions of Lending
The obligation of the Lender to make the Loan hereunder
is subject to the following conditions precedent:
4.1. Representations and Warranties. On the Effective
Date and at the time of each Advance hereunder, the representations
and warranties of the Borrower contained herein or in any other
Loan Document delivered to the Lender hereunder by or on behalf of
the Borrower shall be true and correct in all material respects on
and as of such time with the same effect as though such representa-
tions and warranties had been made on and as of such time, except
to the extent that such representations and warranties expressly
relate to an earlier date.
4.2. Delivery of Note. On the Effective Date, Lender
shall have received the Note, evidencing the Advances to be made
hereunder, duly executed by the Borrower, and all other Loan
Documents shall have been duly executed, acknowledged, and
delivered to the Lender.
4.3. No Default. On the Effective Date and at the time
of each Advance hereunder, and after giving effect thereto, the
Borrower shall be in compliance with all the terms and provisions
set forth herein on its part to be observed or performed, and no
Event of Default shall have occurred and be continuing.
4.4. Supporting Documents. On or prior to the Effective
Date, Lender shall have received such supporting documents or other
information with respect to the operations and affairs of the
Borrower as the Lender or counsel to Lender may reasonably request.
All such documents and proceedings provided for in this
Article IV shall be satisfactory in form, scope and substance to
the Lender.
4.5. Financial Information. The Lender shall have
received current Financial Statements of the Borrower in form, and
reflecting a financial condition, of the Borrower satisfactory to
the Lender. Such Financial Statements shall include (a) unaudited
Financial Statements of the Borrower as of the end of the most
recently ended fiscal year, and (b) the Borrower's most recent
federal income tax return.
4.6. Litigation. The Borrower shall have provided to
the Lender a schedule of all litigation to which Borrower is a
party and the Lender shall be satisfied that such litigation will
not have a Material Adverse Effect upon the financial and business
conditions of Borrower in the event of an unfavorable outcome.
ARTICLE V
Representations and Warranties
The Borrower represents and warrants to Lender that:
5.1. Organization, Powers, etc. The Borrower is a Trust
created and exiting under the laws of the State of Oklahoma. The
Borrower has the power and authority to own the properties which it
purports to own and to carry on its business as now conducted, and
has complied with all filing and other requirements of state and
local laws, insofar as such laws relate to doing business by the
Borrower, necessary to prevent the Borrower from thereafter being
precluded, by reason of its failure so to file or comply with such
requirements, from enforcing its rights with respect to its loans
and investments. The Borrower has the power to execute, deliver
and perform this Agreement, the Note and the other Loan Documents,
and to borrow hereunder.
5.2. Authorization of Loans, etc. The execution,
delivery and performance of this Agreement, the Note and the other
Loan Documents will not violate or contravene (a) any applicable
provision of law (including, without limitation, any applicable
usury or similar law), (b) any order, rule or regulation of any
court or other agency of government, (c) any provision of the
Declaration of Trust of the Borrower, as amended, or (d) any
indenture, agreement, or other instrument to which the Borrower is
a party or by which the Borrower or any of its property is or may
be bound, or be in conflict with, result in a breach of or
constitute, with or without notice or passage of time, a default
under any such indenture, agreement or other instrument, and except
as otherwise contemplated by this Agreement, will not result in the
creation or imposition of any lien, charge or encumbrance of any
nature whatsoever upon or any security interest in any property or
assets of the Borrower. This Agreement is, and the Note, and the
other Loan Documents will be, when executed and delivered here-
under, legal, valid and binding obligations of the Borrower, en-
forceable in accordance with their respective terms.
5.3. Financial Statements. The Borrower has heretofore
furnished to the Lender the following Financial Statements: (i)
unaudited Financial Statements of the Borrower at December 31,
1993; and (ii) unaudited Financial Statements of the Borrower for
the nine-month period ended September 30, 1994. Such Financial
Statements present fairly the financial condition of the Borrower
as of their respective dates, and show all material liabilities,
direct or contingent, of the Borrower as of such dates (including,
without limitation, liabilities for taxes and material commit-
ments), and such Financial Statements present fairly the results of
operations of the Borrower for the periods covered thereby.
5.4. Title to Properties. The Borrower has title to all
the properties and assets reflected on the Financial Statements
referred to in Section 5.3 hereof, and all properties and assets
acquired by the Borrower thereafter and prior to the date hereof,
except for (i) such assets as have been disposed of since the date
thereof in the ordinary course of business or as are no longer used
or useful in the conduct of its business and (ii) properties
acquired by foreclosure or by deed in lieu thereof and held for a
period not in excess of six months; and all such properties and
assets are free and clear of mortgages, pledges, filed liens,
charges and other encumbrances, except as reflected on such
Financial Statements.
5.5. Litigation. There are no actions, suits or
proceedings (whether or not purportedly on behalf of the Borrower)
pending or, to the knowledge of the Borrower, threatened against
the Borrower at law or in equity or before or by any federal, state
municipal, or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, which
involve the Advances or the transactions herein contemplated or the
possibility of any judgment or liability which, if determined
adversely to the Borrower, individually or in the aggregate, would
or could result in a Material Adverse Effect on the business,
operations, properties or assets or in the condition (financial or
other) of the Borrower nor is there any set of circumstances or
state of facts currently or heretofore in existence and known to
the Borrower which would serve as a basis for any such action, suit
or proceeding. The Borrower is not in default with respect to any
final judgment, writ, injunction, decree, rule or regulation or any
court or federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, any of which defaults, individually or in the
aggregate, would have a Material Adverse Effect on the business,
operations, properties or assets or in the condition (financial or
other) of the Borrower.
5.6. Taxes. There have been filed all federal, state
and local tax returns with respect to the operations of the Bor-
rower which are required to be filed, including federal tax returns
for the fiscal year ended December 31, 1993, and all prior fiscal
years of the Borrower, and the Borrower has paid or caused to be
paid to the respective taxing authorities all taxes as shown on
said returns or on any assessment received by it to the extent that
such taxes have become due, except for taxes of the type not
required to be paid by Section 6.3 hereof. The Borrower knows of
no proposed material tax assessment against it. Except as may be
disclosed by letter addressed to the Lender delivered to the Lender
prior to the Effective Date, no extension of time for the
assessment of federal, state or local income taxes of the Borrower
is in effect or has been requested.
5.7. Agreements. The Borrower is not a party to any
agreement or instrument or subject to any restriction materially
and adversely affecting its business, operations, properties,
assets or condition (financial or other) nor is it in default with
respect to any agreement with any Person relating to Indebtedness
for Money Borrowed, except as disclosed in the Financial Statements
referred to in Section 5.3 hereof. The Borrower is not in default
in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any material
agreement or instrument to which it is a party.
5.8. Investment Company Act. The Borrower is not an
"Investment Company" within the meaning of the United States
Investment Company Act of 1940.
5.9. Federal Reserve Regulations. The Borrower is not
engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying any margin stock (within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System of the United
States).
5.10. Securities Activities. The Borrower has not
issued, and will not issue, any Securities except such issuances as
are (a) registered under the Securities Act of 1933, as amended, or
(b) exempt from such registration.
5.11. Compliance with Applicable Laws. The Borrower is
in compliance and conformity with all laws, ordinances, rules,
regulations, and all other legal requirements, the violation of
which would have a Material Adverse Effect on the business, opera-
tions, properties, assets or condition (financial or other) of the
Borrower. The Borrower has not received and has no basis to expect
to receive any order or notice of any violation or claim of
violation of any such law, ordinance, rule or regulation.
5.12. Consents, etc. No consent, approval, authorization
of, or registration, declaration, or filing with any governmental
authority (federal, state or local, domestic or foreign) is
required in connection with the execution and delivery of this
Agreement, the Note or other Loan Documents or the performance of
or compliance with the terms, provisions and conditions thereof.
To the extent that any franchises, licenses, certificates,
authorizations, approvals or consents from any Federal, state or
local (domestic or foreign) government, commission, bureau or
agency are required for the acquisition, ownership, operation or
maintenance by the Borrower of properties now owned, operated or
maintained by it, such franchises, licenses, certificates,
authorizations, approvals and consents have been validly granted,
are in full force and effect and constitute valid and sufficient
authorization therefor.
5.13. No Misrepresentation. No representation or
warranty contained herein or made hereunder and no certificate,
schedule or other document furnished or to be furnished in
connection with the transactions contemplated hereby contains or
will contain a misstatement of a material fact or omits or will
omit to state a material fact required to be stated therein in
order to make the statements contained therein, in the light of the
circumstances under which made, not misleading.
ARTICLE VI
Affirmative Covenants
The Borrower covenants and agrees that from the Effective
Date and until payment in full of the principal of and interest on
the Note and all other payments due hereunder unless the Lender
shall otherwise consent in writing, the Borrower will:
6.1. Existence, Properties, etc. Do or cause to be done
all things necessary to preserve and maintain in full force and
effect all qualifications or licenses required for the conduct of
its business or reasonably required by the Lender to be maintained,
and to comply with its Declaration of Trust, as amended, and with
all applicable laws and all material contracts, instruments and
agreements to which the Borrower is a party or by which the
Borrower or any of its properties or assets may be bound or to
which any of them is subject.
6.2. Notice. Give prompt written notice to the Lender
of any action or proceeding instituted by or against the Borrower
in any Federal or state court or before any commission or other
regulatory body, federal, state or local, or any such proceedings
threatened against it in writing, which, if adversely determined,
would have a Material Adverse Effect on the business, operations,
properties, assets, or condition (financial or other) of the
Borrower, and any other action, event or condition of any nature
known to the Borrower which could reasonably be expected to lead to
or result in a Material Adverse Effect upon the business,
operations, properties, assets or condition (financial or other) of
the Borrower, or which would constitute an Event of Default under
this Agreement or a default under any other material contract,
instrument or agreement to which the Borrower is a party or by
which the Borrower or any of its properties or assets may be bound
or to which any of them is subject.
6.3. Payment of Debts, Taxes, etc. Pay all debts and
perform all obligations promptly and in accordance with the terms
thereof and pay and discharge or cause to be paid and discharged
promptly all taxes, assessments and governmental charges or levies
imposed upon the Borrower or upon its income, receipts or any of
its properties before the same shall become in default, as well as
all lawful claims for labor, materials and supplies or otherwise
which, if unpaid, might become a lien or charge upon such prop-
erties or any part thereof; provided, however, that the Borrower
shall not be required to pay and perform any such debt or obliga-
tion if the effect of such failure to pay and perform will not
accelerate the maturity thereof or of any other debt or obligation
of the Borrower or permit the holder of any such debt or obligation
to cause any such debt or obligation to become due prior to the
stated maturity thereof; and provided, further, that the Borrower
shall not be required to pay taxes, assessments or governmental
charges or levies or claims for labor, materials and supplies for
which the Borrower has obtained an adequate bond or adequate in-
surance or which are being contested in good faith and by proper
proceedings which are being reasonably and diligently pursued.
6.4. Financial Information. Maintain a standard cash
basis system of accounting, and furnish to the Lender copies of
each of the following:
6.4.1. Unaudited Financial Statements. As soon as
available and in any event within 90 days after the end of each
fiscal year (commencing with the fiscal year ended December 31,
1994), Financial Statements of the Borrower as at the end of and
for such fiscal year, in reasonable detail and stating in
comparative form the figures as of the end of and for the previous
fiscal year.
6.4.2. Other Information. Such supplements to the
aforementioned documents and additional information and reports as
the Lender may reasonably request, all in detail reasonably satis-
factory to the Lender.
6.5. Access to Premises and Records. At all reasonable
times and as often as the Lender may reasonably request, permit
authorized representatives designated by Lender to have access to
the premises and properties of the Borrower and to the financial
records of the Borrower and other records relating to the opera-
tions and procedures of the Borrower, to make copies of or excerpts
from such records, and to discuss the affairs, finances and
accounts of the Borrower with, and be advised as to the same by,
the Borrower, all as shall be relevant to the performance or
observance of the terms, covenants or conditions of this Agreement
or the financial condition of the Borrower.
6.6. Properties and Insurance. Maintain and keep all
its properties and assets in good working order and condition and
make all needful and proper repairs, renewals and replacements;
maintain or require to be maintained adequate insurance, by
financially sound and reputable insurers, on all properties of the
Borrower which are of a character usually insured by Persons
engaged in the same or a similar business (to the extent deemed
necessary by the Borrower or as required by law), defects in title
or other risks which are of a character normally insured against by
such Persons; adequate public liability insurance against tort
claims which may be incurred by the Borrower, and such other
insurance as may be required by law.
6.7. Compliance with Applicable Laws. Promptly comply
with, conform to and obey all present and future laws, ordinances,
rules, regulations and all other legal requirements applicable to
the Borrower.
6.8. Additional Documents. Promptly on demand by the
Lender, the Borrower will perform or cause to be performed such
actions and execute or cause to be executed all such additional
agreements, contracts, indentures, documents and instruments as may
be required to perfect and maintain the security interests and
liens provided for in this Agreement and to fully preserve and
protect the rights of the Lender hereunder.
ARTICLE VII
Negative Covenants
The Borrower covenants and agrees that from the Effective
Date and until payment in full of all principal and interest on the
Note and all other payments due hereunder, unless the Lender shall
otherwise consent in writing, the Borrower will not, either
directly or indirectly:
7.1. Limitation on Indebtedness. Incur, create or
suffer to exist any Indebtedness except Indebtedness to Affiliates
of the Borrower and trade accounts payable to Persons who are not
Affiliates of the Borrower and which are incurred in the ordinary
course of business.
7.2. Modification of Debt Instruments. Amend or modify
the terms of any agreement or other instrument in respect of
Indebtedness of the Borrower to terms which are, in the opinion of
the Lender, less favorable to the Borrower.
7.3. Guarantees. Assume, guarantee or otherwise in any
way become liable or responsible for obligations of any other
Person, whether by agreement to purchase such obligations of any
other Person, or agreement for the furnishing of funds through the
purchase of goods, supplies or services (whether by way of stock
purchase, capital contribution, advance or loan) for the purpose of
paying or discharging the obligations of any other Person, or
otherwise, except for the endorsement of negotiable instrument in
the ordinary course of business.
7.4. Sale of Assets, Merger. Sell, lease or otherwise
dispose of all or a substantial part of its properties and assets
to any Person or Persons in any single transaction or series of
related transactions, consolidate with or merge into any other
Person, or acquire substantially all the properties or assets of
any other Person unless immediately after such acquisition the
Borrower is in compliance with the terms of this Agreement except
the contemplated sale or securitization of the Mortgage Loans.
7.5. Dividends, Purchases and Redemptions. Declare or
pay any dividends, or make any distribution of cash or property, to
beneficiaries of the Borrower if, immediately after giving effect
to any such payment, the Borrower would not be in compliance with
the terms, covenants and conditions of this Agreement.
7.6. Liens. Create, incur, assume or suffer to be
created, incurred or assumed, or permit to exist any pledge of, or
any mortgage, lien, charge or encumbrance of any nature with
respect to, any of its property or assets, or own or acquire or
agree to acquire any property of any character subject to any
security agreement, mortgage, conditional sale agreement or other
title retention agreement, or assign, pledge, or in any way
transfer or encumber its rights to receive income from any of its
properties or assets unless such liens shall be subordinated, in
form and substance and in a manner satisfactory to the Lender, to
the prior repayment of the Note, provided, however, that the
foregoing restrictions shall not prohibit:
7.6.1. Taxes, Etc. Liens for taxes, assessments,
governmental charges, levies or claims described in Section 6.3, if
payment thereof shall not at the time be required to be made by
such Section;
7.6.2. Mechanics and Materialmen. Liens of
carriers, warehousemen, mechanics, laborers and materialmen
incurred in the ordinary course of business for sums not yet due or
being contested in good faith; provided, however, that there shall
have been set aside on the books of the Borrower such reserve, if
any, as shall be required by generally accepted accounting
principles;
7.6.3. Ordinary Course. Liens incurred in the
ordinary course of business in connection with workmen's
compensation, unemployment insurance, statutory obligations or
social security legislation, or for any other purpose at the time
required by law as a condition precedent to the transaction of
business or the exercise of any of the privileges or licenses of
the Borrower;
7.6.4. Appeals. Liens incurred in respect of
attachments discharged within 60 days from the making thereof or
judgments or awards in force for less than 20 days or with respect
to which the Borrower shall, in good faith, be prosecuting an
appeal or proceeding for review and with respect to which a stay of
execution upon appeal or proceeding for review shall have been
secured if required;
7.6.5. Title Matters. Title defects, or liens or
encumbrances which do not secure Indebtedness, including survey
exceptions or encumbrances, easements, or rights of way for sewers,
electric lines, telegraph and telephone lines and other similar
purposes, zoning or other restrictions as to the use of real
estate, which title defects, liens and encumbrances do not, indi-
vidually or in the aggregate, impair the use of such property in
the operation of the Borrower's business or detract from the value
of such property;
7.6.6. Disclosed Liens. Presently existing liens
and pledges disclosed in the Financial Statements referred to in
Section 5.3 hereof or which in the aggregate are not substantial in
amount and do not materially affect the operation of the Borrower;
provided, however, that such liens or pledges shall not be renewed
or extended unless otherwise permitted by the provisions of this
Agreement; and
7.6.7. Other Liens. Such other liens, charges or
encumbrances incidental to the conduct of its business or the
ownership of the properties and assets of the Borrower which are
not incurred in connection with the borrowing of money or the
obtaining of advances or credit and which do not, in the aggregate,
materially detract from the value of any properties or assets of
the Borrower or materially impair the use thereof in the operation
of its business.
ARTICLE VIII
Events of Default
In the case of the happening of any of the following
events (hereinafter called "Events of Default"):
8.1. Representations and Warranties. Any representation
or warranty made herein shall prove to have been false and
misleading, when made, in any material respect;
8.2. Misleading Documents. Any report, financial
statement or other Loan Document furnished in connection with this
Agreement or the Loan hereunder shall prove to have been false and
misleading, when furnished, in any material respect;
8.3. Default. Default shall be made in the payment when
and as due and payable of (a) the principal of the Note, (b)
interest on the Note, (c) any of the expenses of the Lender
required to be paid by the Borrower hereunder, or (d) any other
amount payable to the Lender under the terms of this Agreement;
8.4. Other Defaults. Default shall be made with respect
to any Indebtedness of the Borrower (other than the Note) beyond
any applicable period of grace, or default shall be made with
respect to the performance of any other obligation incurred in
connection with any such Indebtedness, if the effect of any such
default is to accelerate the maturity of such or any other
Indebtedness or any such Indebtedness shall not be paid when due,
until and unless such default shall have been remedied or cured by
the Borrower or shall have been waived by the holder or holders of
such Indebtedness in accordance with the terms thereof;
8.5. Failure to Comply with Certain Covenants. Default
shall be made in the due observance or performance of the
covenants, conditions and agreements on the part of Borrower to be
observed or performed pursuant to Sections 6.4, 6.5, and 6.6 and
Article VII hereof;
8.6. Failure to Comply with Other Covenants. Default
shall be made in the due observance or performance of any other
covenant, condition or agreement on the part of the Borrower to be
observed or performed pursuant to the terms of this Agreement and
shall not have been remedied within 30 days after the occurrence of
any such default;
8.7. Receiver, Bankruptcy, Etc. The Borrower shall (a)
apply for or consent to the appointment of a receiver, trustee or
liquidator of the Borrower or any of their respective properties or
assets, (b) admit in writing its inability to pay its debts as they
mature, (c) make a general assignment for the benefit of creditors,
(d) be adjudicated a bankrupt or insolvent or (e) file a voluntary
petition in bankruptcy, or a petition or an answer seeking re-
organization, insolvency, readjustment of debts, dissolution or
liquidation or a similar proceeding under any law or statute, or
any answer admitting the material allegations of a petition filed
against it in any proceeding under any such law or if action shall
be taken by it for the purpose of effecting any of the foregoing;
8.8. Appointment of Receiver, Reorganization. An order,
judgment or decree shall be entered without the application,
approval, or consent of the Borrower by any court of competent
jurisdiction, approving a petition seeking reorganization of the
Borrower or of all or a substantial part of its properties or
assets, or appointing a receiver, trustee or liquidator of the
Borrower and such order, judgment or decree shall continue unstayed
and in effect for any period of 60 days;
8.9. Final Judgment. Final judgments for the payment of
money in excess of an aggregate of $25,000.00 shall be rendered
against the Borrower, and the same shall remain undischarged for a
period of 30 days during which execution shall not be effectively
stayed or contested in good faith;
8.10. Representations and Warranties. Any repre-
sentation, statement, certificate, schedule or report made or
furnished to the Lender on behalf of the Borrower is false or
erroneous in any material respect at the time of the making thereof
or any representation, warranty or covenant ceases to be complied
with in any material respect;
8.11. Maturity of Other Debt. The acceleration of the
maturity of any material amount of Indebtedness of the Borrower to
any Person other than the Lender;
8.12. Insecurity. At any time the Lender in good faith
deems itself insecure or believes the payment of the Notes or the
performance of the Loan Documents is or has been impaired;
8.13. Material Adverse Effect. Any circumstance or event
shall have occurred and be continuing which (a) could reasonably be
expected to have any adverse effect whatsoever upon the validity,
performance or enforceability of any Loan Documents, (b) is or
might be material and adverse to the financial condition or
business operations of the Borrower, (c) could impair the ability
of the Borrower to fulfill its obligations under this Agreement and
under the Loan Documents, (d) could impair the ability of the
Lender to enforce its rights or avail itself of the remedies
provided for in the Loan Documents, or (e) cause an Event of
Default to occur; or
8.14. Interest Rate. At any time the Lender in good
faith believes that the rate of interest payable under the Loan
Documents exceeds the then legal rate of interest under applicable
law,
then, or at any time thereafter during the continuance of any such
event, Lender, by written or telegraphic notice to the Borrower,
may declare the Note and all other payments required to be made
hereunder to be forthwith due and payable, both as to principal and
interest, without presentment, demand, protest or other notice of
any kind, all of which are hereby expressly waived, anything
contained herein or in the Note to the contrary notwithstanding;
provided, however, that the happening of any event set forth in
subsections 8.4, 8.5, 8.7 and 8.8 of this Section shall cause
immediate acceleration of all payments due hereunder as aforesaid
unless such acceleration is waived by written or telegraphic notice
to the Borrower by Lender. In the event of any such acceleration
of all payments due hereunder, Lender's Aggregate Commitment
hereunder shall automatically be terminated and the Lender shall
cease making new commitments or increasing or extending existing
commitments and proceed to liquidate its Portfolio in the ordinary
course of business.
8.15. Application of Funds. In the event that the Note
shall have been declared due and payable pursuant to the terms of
Sections 8.1 through 8.14 hereof, the Lender agrees that any funds
received from or on behalf of the Borrower (including funds
realized by foreclosure of the Lender's security interest, if any,
in the Collateral) by the Lender shall be applied by Lender in
liquidation of all amounts due Lender hereunder in the following
manner and order:
8.15.1. Expenses. First, to reimburse the Lender
for any expenses incurred in accordance with Section 10.6 hereof;
8.15.2. Interest. Second, to payment of interest
due on the Note;
8.15.3. Principal. Third, to payment of principal
in respect of the Note.
ARTICLE IX
Remedies
9. Remedies. ON DEMAND, or on the occurrence of an Event of
Default, whichever shall first occur, in addition to the Lender's
rights and remedies under the Loan Documents, the Lender shall have
the following additional remedies:
9.1. Acceleration of Note; Demand For Payment. The Note
and all other obligations of the Borrower to the Lender shall
thereupon become immediately due and payable, without presentment,
demand, protest, notice of protest, declaration or notice of
acceleration or intention to accelerate, or other notice or
declaration of any kind, all of which are hereby expressly waived
by the Borrower. ON DEMAND, or during the continuance of any other
Event of Default, the Lender may, at its option, declare the Note
to be immediately due and payable, and the Lender will be entitled
to proceed to selectively and successively enforce its rights under
the Loan Documents, or any one or more of them.
9.2. Rights Under Code. This Agreement shall constitute
a security agreement under the Uniform Commercial Code of the State
of Oklahoma (the "UCC"). The Lender shall have with respect to all
Collateral all of the rights of a secured party under Article 9 of
the UCC, together with, and not by way of limitation, all of the
rights set forth herein. Upon an Event of Default, the Lender may
require the Borrower to assemble any of the Collateral not in
possession of the Lender and make it available at a place
reasonably convenient to both parties to be designated by the
Lender. Should any Event of Default occur, the Lender shall have
the right to sell the Collateral in one or more lots, at one or
more times, at public or private sales and with or without notice
of any kind that the Lender may elect, but in a commercially
reasonable manner; and at such prices and on such terms, as to cash
or credit, as the Lender may deem proper. Any sale may be made at
any place designated by the Lender and the Lender shall have the
right to become the purchaser at any such sale which is open to the
public, free and clear of any claim, right or equity of redemption,
all of which are expressly waived and released by the Borrower. If
notice is given of the public sale of any of the Collateral, it is
agreed that notice shall be satisfactorily given for all purposes
if such notice is given to the Borrower at least ten (10) days
prior to such sale. The foregoing notice provisions shall not
preclude the Lender's rights to foreclose upon the Collateral in
any other manner permitted under the UCC; however, a sale of the
Collateral in accordance with such notice requirements shall be
deemed a disposal of the Collateral in a commercially reasonable
manner. The Lender shall have the right in connection with the
Collateral either to sell the same as above provided, or to
foreclose, sue upon, or otherwise seek to enforce the same in its
own name or in the name of the Borrower as provided herein. After
an Event of Default shall occur, the Lender shall have the right to
renew, extend the time of payment of, or otherwise modify, amend,
supplement, settle or compromise, in any manner, any obligations
for the payment of money included in the Collateral, any security
therefor and any other agreements, instruments, claims or choses in
action of any kind, which may be included in the Collateral.
9.3. Effect of Selective Enforcement. In the event the
Lender shall elect to selectively and successively enforce its
rights under any one or more of the instruments securing payment of
the Note, such action shall not be deemed a waiver or discharge of
any other lien or encumbrance securing payment of the Note until
such time as the Lender shall have been paid in full all sums owing
to the Lender.
9.4. Waiver of Event of Default. The Lender may, by an
instrument in writing signed by the Lender, waive any Event of
Default which shall have occurred and any of the consequences of
such Event of Default, and, in such event, the Lender and the
Borrower will be restored to its former positions, rights and
obligations hereunder. Any Event of Default so waived shall, for
the purposes of this Agreement, be deemed to have been cured and
not to be continuing; but no such waiver shall extend to any
subsequent or other Event of Default or impair any consequences of
such subsequent or other Event of Default.
9.5. Deposits; Setoff. Regardless of the adequacy of
any other collateral security held by the Lender, any deposits or
other sums credited by or due from the Lender to Borrower will at
all times constitute collateral security for all indebtedness and
obligations of the Borrower owing to the Lender hereunder and may
be set off against any and all liabilities, direct or indirect,
absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to the Lender hereunder. The
rights granted by this paragraph shall be in addition to the rights
of the Lender under any statutory banker's lien.
ARTICLE X
Miscellaneous
10.1. Conduct of Business. Nothing contained in this
Agreement hereof shall be construed to prevent the Borrower from
foreclosing on Mortgage Loans or otherwise acquiring the ownership
of properties financed by the Borrower, disposing of properties,
taking actions necessary for completing, marketing, carrying or
operating properties financed or owned by the Borrower; provided,
however, that any such actions are necessary for the proper conduct
of the Borrower's business and are in the best interests of the
Borrower.
10.2. Survival of Representations. All covenants,
agreements, representations and warranties made herein and in the
certificates delivered pursuant hereto shall survive the making by
the Lender of the Loan herein contemplated and the execution and
delivery to the Lender of the Note evidencing such Loan and shall
continue in full force and effect so long as any portion of the
Note is outstanding and unpaid and the Aggregate Commitment has not
been terminated. Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants,
promises and agreements by and on behalf of the Borrower which are
contained in this Agreement shall inure to the benefit of the
successors and assigns of the Lender.
10.3. Cumulative Remedies. No failure on the part of the
Lender to exercise and no delay in exercising any right hereunder
will operate as a waiver thereof, nor shall any single or partial
exercise by the Lender of any right hereunder preclude any other or
further right of exercise thereof or the exercise of any other
right.
10.4. Expenses. Whether or not the Loan hereby con-
templated is consummated, the Borrower agrees to pay all out-of-
pocket expenses incurred by the Lender in connection with the
transaction herein contemplated, including, without limitation, all
filing fees, recording costs, safekeeping fees, charges and
disbursements of the Lender and of legal counsel for the Lender,
and to pay all expenses (including legal expenses and attorney's
fees) of every kind resulting from or incidental to the preparation
or enforcement of the Loan Documents.
10.5. Indemnification. The Borrower shall indemnify the
Lender and each Affiliate thereof and their respective officers,
directors, employees, attorneys, and agents from, and hold each of
them harmless against, any and all losses, liabilities, claims,
damages, penalties, judgments, disbursements, costs, and expenses
(including attorneys' fees) to which any of them may become subject
which directly or indirectly arise from or relate to (a) the
negotiation, execution, delivery, performance, administration, or
enforcement of any of the Loan Documents, (b) any of the transac-
tions contemplated by the Loan Documents, (c) any breach by the
Borrower of any representation, warranty, covenant, or other agree-
ment contained in any of the Loan Documents, or (d) any in-
vestigation, litigation, or other proceeding, including, without
limitation, any threatened investigation, litigation, or other
proceeding relating to any of the foregoing. Without limiting any
provision of this Agreement or of any other Loan Document, it is
the express intention of the parties hereto that each Person to be
indemnified under this section shall be indemnified from and held
harmless against any and all losses, liabilities, claims, damages,
penalties, judgments, disbursements, costs, and expenses (including
attorneys' fees) arising out of or resulting from the sole or
contributory negligence of such Person.
10.6. Limitation of Liability. None of the Lender, or
any Affiliate, officer, director, employee, attorney, or agent
thereof shall have any liability with respect to, and the Borrower
hereby waives, releases, and agrees not to sue any of them upon,
any claim for any special, indirect, incidental, or consequential
damages suffered or incurred by the Borrower in connection with,
arising out of, or in any way related to, this Agreement or any of
the other Loan Documents, or any of the transactions contemplated
by this Agreement or any of the other Loan Documents. The Borrower
hereby waives, releases, and agrees not to sue the Lender or any of
its Affiliates, officers, directors, employees, attorneys, or
agents for punitive damages in respect of any claim in connection
with, arising out of, or in any way related to, this Agreement or
any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents.
10.7. Notices. All notices, requests and demands will be
served by registered or certified mail, postage prepaid, as fol-
lows:
The Borrower: George J. Records, as Trustee of the
Nancy Johnston Trust
MidFirst Plaza
501 West Interstate 44 Road, Suite 380
Oklahoma City, Oklahoma 73118-6054
Attn: George J. Records
The Lender: Firstinsure, Inc.
MidFirst Plaza
501 West Interstate 44 Road
Oklahoma City, Oklahoma 73118-6054
Attn: Rollin E. Drew, Esq.
General Counsel
or at such other address as any party hereto shall designate for
such purpose in a written notice to the other party hereto.
10.8. Usury. It is the intention of the parties hereto
to conform strictly to applicable usury laws now in force.
Accordingly, if the transactions contemplated hereby would be
usurious under applicable law, then, in that event, notwithstanding
anything to the contrary in any of the Loan Documents or in any
other instrument or agreement entered into in connection with or as
security for the Note, it is agreed as follows: (a) the aggregate
of all consideration that constitutes interest under applicable law
and that is contracted for, charged or received under this
Agreement or under any of the Loan Documents (whether designated as
interest, fees, indemnities, payments or otherwise) shall under no
circumstances exceed the maximum amount of interest permitted by
applicable law calculated on the basis of the actual number of days
elapsed over a year of three hundred sixty-five (365) days or three
hundred sixty-six (366) days, as the case may be, and any excess
shall be cancelled automatically and, if theretofore paid, shall be
credited on the applicable Note by the holder thereof (or, if such
Note has been paid in full, refunded to the Borrower); and (b) in
the event that the maturity of the Note is accelerated by reason of
an election of the Lender resulting from an event of Default under
this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes
interest may never include more than the maximum amount permitted
by applicable law, and excess interest, if any, provided for in
this Agreement or otherwise, shall be cancelled automatically as of
the date of such acceleration or prepayment and, if theretofore
paid, shall be credited on the applicable Note (or, if such Note
has been paid in full, refunded to the Borrower). All sections and
provisions of this Agreement, the Note, the Loan Documents and the
other instruments now or hereafter executed in connection with or
as security for any of such agreements or instruments, including
without limitation those sections and provisions calling for the
calculation of interest on the basis of the actual number of days
elapsed over a year of three hundred sixty five (365) days, are
subject to this paragraph 10.8, which limits the maximum amount of
interest.
10.9. Construction. This Agreement and the documents
issued hereunder are executed and delivered as an incident to a
lending transaction negotiated and to be performed in Oklahoma
City, Oklahoma County, Oklahoma. The Loan Documents are intended
to constitute a contract made under the laws of the State of
Oklahoma and to be construed in accordance with the laws of said
state. Nothing in this Agreement will be construed to constitute
the Lender as a joint venturer with the Borrower or to constitute
a partnership. Except for the terms defined in paragraph 1, the
descriptive headings of the paragraphs of this Agreement are for
convenience only and are not to be used in the construction of the
content of this Agreement. This Agreement may be executed in
multiple counterparts, each of which will be an original
instrument, but all of which will constitute one agreement.
10.10. Submission to Jurisdiction; Venue. The Borrower
and Lender hereby irrevocably: (a) submits and consents, and
waives any objection to personal jurisdiction in the State of
Oklahoma for the enforcement of the Loan Documents, and (b) waives
any and all personal rights under the law of any state to object to
jurisdiction in the State of Oklahoma for the purposes of litiga-
tion to enforce the Loan Documents. The Borrower further consents
to the venue of any state or federal court sitting in Oklahoma
County, Oklahoma, in any action arising under any of the Loan
Documents. Initiating such proceeding or taking such action in any
other state shall in no event constitute a waiver of the agreement
contained herein that the law of the State of Oklahoma shall govern
the rights and obligations of the Borrower and the Lender under the
Loan Documents, or of the submission herein made by the Borrower to
personal jurisdiction within the State of Oklahoma.
10.11. Binding Effect. This Agreement will be binding
on the Borrower and its successors and assigns, and will inure to
the benefit of the Lender and its successors and assigns.
10.12. Entire Agreement. This Agreement constitutes the
entire agreement between the Lender and the Borrower and may be
amended only by written instrument executed by the Lender and the
Borrower.
10.13. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an
original, but all of which when taken together shall constitute but
one agreement.
10.14. Waiver of Jury Trial. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN
ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF
THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE LENDER IN THE NEGOTIATION, ADMINISTRATION, OR
ENFORCEMENT THEREOF.
10.15. Termination. This Agreement may be terminated by
the Lender at any time by giving a Notice of Termination to the
Borrower. The effective date of such termination shall be the date
of such Notice of Termination, provided, that if No Event of De-
fault exists on the date of such Notice of Termination, the effec-
tive date of such termination shall be the sixtieth day next fol-
lowing such Notice of Termination unless the parties otherwise
agree.
10.16. Effect of Trust. This Agreement has been
executed on behalf of the Nancy Johnston Trust by George J.
Records, Trustee of the Nancy Johnston Trust, in his representative
capacity under the Declaration of Trust dated May 1, 1945, as
amended, and not individually, and shall bind only the trust estate
of the Nancy Johnston Trust, and as trustee, George J. Records
shall not be bound or held to any personal liability in connection
with the obligations of The Nancy Johnston Trust hereunder.
IN WITNESS WHEREOF, this instrument is executed as of the
date first above written.
BORROWER:
_______________________________
George J. Records, As Trustee
of the Nancy Johnston Trust
LENDER: FIRSTINSURE, INC., an Oklahoma
corporation
By_____________________________
President
<PAGE>
Exhibit 4
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT is made effective the 21st day of
November, 1994 by GEORGE J. RECORDS, AS TRUSTEE OF THE NANCY
JOHNSON TRUST (hereinafter referred to as the "Debtor"), and
FIRSTINSURE, INC., an Oklahoma corporation (hereinafter referred
to as the "Secured Party"), with its business address at 501 West
Interstate 44 Road, Oklahoma City, Oklahoma 73118-6054.
W I T N E S S E T H:
1. Recitations. Of even date herewith, the Debtor has entered
into a certain revolving credit agreement with the Secured
Party (the "Credit Agreement"), and has made, executed and
delivered to the Secured Party its written promissory note
(the "Note") in the stated principal amount of Five Hundred
Thousand and No/100's Dollars ($500,000.00). This Agreement
is intended to provide collateral security for the repayment
of all of the Borrower's obligations, now or hereafter owing
to the Secured Party, including the indebtedness represented
by the Note.
2. Pledge and Security Agreement. For good and valuable con-
sideration, the receipt and sufficiency of which are hereby
expressly acknowledged, the Debtor hereby grants Secured
Party a security interest in all of the following
(hereinafter collectively called the "Collateral"):
2.1. Outstanding shares of common stock, par value $1.00
("Common Stock"), of The Turner Corporation, a Delaware
corporation ("Turner"), now owned or hereafter acquired
by the Debtor;
2.2. All stock rights, rights to subscribe to additional
stock, stock dividends and dividends of every kind and
character, new securities, and all other property which
the Debtor now or may hereafter become entitled to re-
ceive and attributable to shares of Turner Common
Stock. In the event that any options, warrants or
other rights are issued in connection with the
Certificates during the term of this Agreement, such
options, warrants or rights may be exercised by Debtor
and if so exercised, all new shares or other securities
so acquired shall be assigned to Secured Party to be
held in the same manner as the shares of Turner Common
Stock originally pledged under this Agreement. In the
event that a share reclassification, readjustment or
other change is made in the capital structure of the
issuer of the shares of Turner Common Stock, any
additional or substituted shares shall be assigned to
the Secured Party to be held in the same manner as the
shares of Turner Common Stock originally pledged under
this Agreement. Secured Party shall also have a
security interest in all securities and other property,
rights or interests of any description at any time
issued or issuable as an addition to, in substitution
of or exchange for or with respect to the Collateral,
including, without limitation, shares issued as
dividends or as the result of any reclassification,
split-up or other corporate reorganization. Debtor
shall hold in trust for Secured Party and deliver
promptly to Bank, in the exact form received, all such
securities or other property which comes into the
possession, custody or control of Debtor; and
2.3. All cash and noncash proceeds of the above specified
property, regardless of kind, character or form.
This security interest is given to secure the payment and
performance of the Note and all security documents executed,
or to be executed, in connection therewith; all future
advances made by Secured Party to the Debtor; all
liabilities of Debtor to Secured Party of every kind and
description including both direct and indirect liabilities,
liabilities due or to become due and whether absolute or
contingent, and liabilities now existing or incurred in the
collection thereof, including reasonable attorney's fees in
enforcing the Secured Party's rights hereunder; all
extensions, renewals, substitutions and changes in the Note;
all advances made by the Secured Party to protect the
security hereof, including advances made for or on account
of levies, taxes and for maintenance or recovery of the
Collateral; interest on any and all monies expended or
advanced by the Secured Party hereunder or pursuant hereto;
and for performance of the covenants and agreements set
forth herein.
3. General Representations and Warranties. Debtor represents
and warrants that:
3.1. Except for the security interest granted to the Secured
Party herein, the Debtor is and shall remain the owner
of all Collateral free from any liens, security
interests, encumbrances, or other right, title or
interest of any other person, firm or corporation, and
the Debtor shall defend the Collateral against all
claims and demands of all persons at any time claiming
the same or any interest therein adverse to the Bank.
3.2. The Collateral is fully paid, validly issued, genuine
and is beneficially owned by Debtor free and clear of
all liens, claims and encumbrances or rights or
interest of any other person. There are no restric-
tions upon transfer of any of the Certificates other
than may appear on the face of the Certificates, and
Debtor may transfer such Certificates without the
consent of any other shareholders or the issuer of the
certificate.
3.3. Secured Party shall not be required to take any steps
necessary to preserve any rights in the Collateral
against prior parties or to protect, perfect, preserve
or maintain any security interest given to secure the
Collateral.
4. General Covenants.
4.1. The Debtor agrees to properly pay when due any and all
federal, state and local taxes, assessments and charges
upon or against the Collateral before the same become
delinquent and before penalties accrue thereon, unless
and to the extent that the same are being contested in
good faith by appropriate proceedings.
4.2. Upon request by Lender, Debtor agrees to execute and
deliver such financing statement or statements, or
amendments thereof or supplements thereto, or other
instruments covering the Collateral as Secured Party
may from time to time require in order to preserve and
protect the security interest hereby granted.
4.3. In the event Debtor shall fail to pay taxes,
assessments, costs and expenses which Debtor is under
any of the terms hereof required to pay, or fails to
keep the Collateral free from other security interests,
liens or encumbrances, the Secured Party may (but is
not obligated to) make expenditures for any or all such
purposes and the amount so expended, together with
interest thereon at a rate per annum equal to the rate
of interest provided in the Note, shall become
immediately due and payable by Debtor to Secured Party
and shall have the benefit of and be secured by the
security interest herein granted and agreed to. All
costs and expenses of Secured Party in retaking,
holding, preparing for sale and selling or otherwise
realizing upon any Collateral in the event of default
by the Debtor, including court costs and reasonable
attorney's fees and other legal expense, shall likewise
constitute additional indebtedness of Debtor which
Debtor promises to pay on demand and which shall be en-
titled to the benefit of and be secured by said
security interest.
4.4. Upon receipt thereof, the Debtor shall immediately
deliver to Secured Party the Collateral described
herein to be held by Secured Party in the same manner
as the property originally deposited as Collateral, but
the Secured Party, at its option, may permit proceeds
in the form of cash dividends, but not stock dividends,
to be received and retained by Debtor as contemplated
in the Credit Agreement; provided, however, that
Secured Party may terminate such provision at any time
after a default occurs hereunder.
4.5. Provided that Debtor is not in default in the
performance of this Agreement, Debtor shall retain all
voting rights of the Certificates.
4.6. For all purposes herein, Secured Party shall be deemed
to have exercised reasonable care in the custody and
preservation of the Collateral if it takes such action
for that purpose as Debtor shall request, but failure
to honor any such request shall not,of itself, be
deemed failure to exercise reasonable care.
4.7. In its discretion and without notice to the Debtor, the
Secured Party may take any one or more of the following
actions, without liability, except to account for prop-
erty actually received by it:
(i) Insure any of the Collateral;
(ii) Exchange any of the Collateral for other property
upon a reorganization, recapitalization or other
readjustment and, in connection therewith, deposit
any of the Collateral with any committee or
depositary upon such terms as the Secured Party
may determine;
(iii) In its name, or in the name of Debtor, demand, sue
for, collect or receive any money or property at
any time payable or receivable on account of or in
exchange for any of the Collateral and, in
connection therewith, endorse notes, checks,
drafts, money orders, documents of title or other
evidences of payment, shipment or storage in the
name of the Debtor; and
(iv) Take or release any other collateral security for
any of the Collateral.
4.8. The Secured Party shall be under no duty to exercise or
to withhold the exercise of any rights, powers,
privileges and options expressly or implicitly granted
to the Secured Party in this Agreement and shall not be
responsible for any failure to do so or delay in so
doing.
5. Events of Default. As used herein, an "Event of Default"
shall have occurred under this Agreement upon the occurrence
or existence of any event or condition which would permit
the Secured Party to accelerate the Maturity Date of the
Note, or otherwise constitute an Event of Default (as
defined in the Credit Agreement).
6. Remedies.
6.1. Upon the occurrence of an Event of Default and at any
time thereafter, Secured Party may without notice to
Debtor declare all liabilities secured hereby
immediately due and payable, and may proceed to enforce
payment and performance of same and exercise any and
all rights and remedies provided by the Uniform
Commercial Code, as well as all other rights and
remedies possessed by Bank. Unless the Collateral in
whole or in part threatens to decline speedily in value
or is of a type customarily sold on a recognized
market, Secured Party will give the Debtor reasonable
notice of the time and place of any public sale, or of
the time after which any private sale or other
disposition is to be made. The Secured Party may be a
purchaser at any public sale. The requirement of
reasonable notice shall be met if notice is mailed,
postage prepaid, to the address of the Debtor provided
for herein at least ten (10) days before sale or other
disposition. The Secured Party is authorized at any
such sale,if it deems it advisable to do so, to
restrict prospective bidders or purchasers to persons
who will represent and agree that they are purchasing
for their own account, for investment, and not with a
view to the distribution or sale of the Collateral.
Because of the Securities Act of 1933, as amended, or
any other laws or regulations, there may be legal
restrictions or limitations affecting Secured Party in
any attempts to dispose of certain portions of the
Collateral in the enforcement of its rights and
remedies hereunder. For these reasons, Secured Party
is hereby authorized by Debtor, but not obligated, upon
the occurrence or existence of an Event of Default
hereunder, to sell all or any part of the Collateral at
private sale, subject to investment letter or in any
other manner which will not require the Collateral, or
any part thereof, to be registered in accordance with
the Securities Act of 1933, as amended, or the rules
and regulations promulgated thereunder, or any other
law or regulation. Secured Party is also hereby
authorized by Debtor, but not obligated, to take such
actions, give such notices, obtain such rulings and
consents, and do such other things as Secured Party may
deem appropriate in the event of a sale or disposition
of any of the Collateral. Debtor clearly understands
that Secured Party may in its discretion approach a
restricted number of potential purchasers and that a
sale under such circumstances may yield a lower price
for the Collateral or any part or parts thereof than
would otherwise be obtainable if sale were registered
and sold in the open market, and Debtor agrees that
such private sales shall constitute a commercially
reasonable method of disposing of the Collateral.
6.2. As regards that portion of the Collateral consisting of
cash or cash equivalent items such as checks, drafts or
deposited funds, Secured Party may upon the occurrence
of an Event of Default specified in Section 5 hereof,
immediately apply them against any liabilities of the
Debtor, selected by Bank, and for this purpose it is
agreed that cash or equivalents will be considered
identical to cash proceeds. Secured Party shall have
the right immediately and without further actin by it
to st off against the liabilities secured hereby all
money owed by Secured Party to the undersigned whether
due or not, and Secured Party will be deemed to have
exercised such right of set off and to have made a
charge against such money at the time of any
acceleration upon default even though some charges made
are entered on the Secured Party's books subsequent
thereto. Upon the occurrence of an Event of Default as
specified in Section 5 hereof, Secured Party shall have
a right to dispose of the Collateral in a transaction
which is exempt from the registration provisions of the
Securities Act of 1934, as amended, and the Debtor
hereby agrees that a disposition in that manner, after
ten (10) days' notice to the Debtor of the Secured
Party's intention, shall be commercially reasonable.
Secured Party may demand, collect, receipt for,
settle,compromise, adjust, sue for, foreclose, release
or realize upon the Collateral, in its own name or in
the name of Debtor as Secured Party may determine.
Secured Party shall not be liable for any act or
omission on the part of Bank, its officers, agents, or
employees, except willful misconduct.
6.3. As regards that portion of the Collateral consisting of
stock or other voting securities, the Secured Party may
upon the occurrence of a default hereunder:
(i) Transfer to or register in its name or in the name
of its nominee any of the Collateral, with or
without indication of the security interest herein
created, and whether or not so transferred or
registered, receive the income, dividends and
other distributions thereon and hold them or apply
them to the liabilities of the Debtor, in any
order of priority.
(ii) Exercise or cause to be exercised all voting and
corporate powers with respect to any of the Col-
lateral so registered or transferred, including
all rights of conversion, exchange, subscription
or any other rights, privilege or options per-
taining to such collateral, as if the absolute
owner thereof;
(iii) Make any compromise or settlement deemed advisable
with respect to any of the Collateral;
(iv) Renew, extend or otherwise change the terms and
conditions of any of the Collateral.
7. General.
7.1. Further Assurances. Debtor agrees to execute such
stock powers, endorse such instruments, or execute such
additional pledge agreements or other documents as may
be required by the Secured Party in order effectively
to grant to Secured Party the security interest in (and
pledge and assignment of) the Collateral and to enforce
and exercise Secured Party's rights regarding same.
7.2. Securities Laws. Upon the occurrence or existence of
an Event of Default, Debtor hereby agrees to cooperate
fully with Secured Party to sell, at foreclosure or
other private sale, the Collateral pledged hereunder.
Specifically, Debtor agrees to fully comply with the
securities laws of the United States and the State of
Oklahoma, and with any other applicable laws, rules or
regulations, and to take such action as may be
necessary to permit Secured Party to sell or otherwise
transfer the securities pledged hereunder in compliance
with such laws. Without limiting the foregoing,
Debtor, at its own expense, upon request by Secured
Party, agrees to effect and obtain such registrations,
filings, statements, rulings, consents and other
matters as Secured Party may reasonably request.
7.3. Power of Authority. Debtor hereby makes, constitutes,
and appoints Secured Party or its nominee, its true and
lawful attorney in fact and in its name, place, and
stead, and on its behalf, and for its use and benefit
to complete, execute and file with the United States
Securities and Exchange Commission one or more notices
of proposed sale of securities pursuant to Rule 144
under the Securities Act of 1933 and/or any similar
filings or notices with any applicable state agencies,
and said attorney in fact shall have full power and
authority to do, take and perform all and every act and
thing whatsoever requisite, proper or necessary to be
done, in the exercise of the rights and powers herein
granted, as fully to all intents and purposes as Debtor
might or could do if personally present. This power
shall be irrevocable and deemed coupled with an
interest. The rights, powers and authority of said
attorney in fact herein granted shall commence and be
in full force and effect from the date of this
agreement, and such rights, powers and authority shall
remain in full force and effect, and this power of
attorney shall not be rescinded, revoked, terminated,
amended or otherwise modified, until the Indebtedness
has been fully satisfied.
7.4. Expenditures of Secured Party. The Debtor shall be
liable for and agrees to pay Secured Party for all ex-
penditures of Secured Party in maintaining the Col-
lateral, and all costs, attorney's fees and other ex-
penditures of Secured Party in the enforcement or col-
lection of any note, warranty, agreement, liability or
obligation of the Debtor, to Secured Party or in the
enforcement or collection of or realization upon the
Collateral or in the holding, preparing for sale or
sale of any Collateral.
7.5. Waivers. No act, delay, omission, or course of dealing
between the Debtor and Bank, including Secured Party's
waiver of remedy because of any default hereunder,
shall constitute a waiver of any of Secured Party's
rights and remedies under this Agreement or any other
agreement between the parties, or under the documents
evidencing the liabilities secured hereby. Waiver by
Secured Party of any rights or remedies under the terms
of this Agreement or with respect to any of Debtor's
liabilities to Secured Party will not be a bar to the
exercise of any right or remedy on any subsequent
occasion. All rights and remedies of Secured Party are
cumulative and may be exercised singularly or
concurrently, and the exercise of any one or more of
them will not be a waiver of any other. No waiver,
change, modification, or discharge of any of Secured
Party's rights or of the Debtor's duties as so
specified or allowed will be effective unless in
writing and signed by Bank.
7.6. Secured Party's Right to Transfer. Debtor grants to
Secured Party the right to transfer any and all of the
Collateral to its own name or that of its nominee after
default, and Secured Party may exercise all rights and
privileges to which it will thereupon become entitled,
but it will be under no duty to exercise such rights
and privileges.
7.7. Rights of Secured Party Assignable. Secured Party at
any time and at its option may pledge, transfer or
assign its rights under this Agreement or any part of
said rights, and any pledgee, transferee or assignee
shall have the rights of Secured Party as to the rights
or parts thereof so pledged, transferred or assigned.
7.8. Partial Invalidity. If any provision of this Agreement
shall for any reason be held to be invalid or
unenforceable, such invalidity or unenforceability
shall not affect any other provision hereof, and this
Agreement shall be construed as if such invalid or
unenforceable provisions had never been contained
herein.
7.9. Binding Effect. This Agreement shall be binding on the
Debtor's respective heirs, executors, administrators,
representatives, successors and assigns, and shall
inure to the benefit of the Secured Party's successors
and assigns.
7.10. Construction. This Agreement shall be deemed a
contract made under the laws of the State of Oklahoma
and shall be construed in accordance with the laws of
said state.
7.11. Effect on Trust. This Agreement has been executed on
behalf of the Nancy Johnston Trust by George J.
Records, Trustee of the Nancy Johnston Trust, in his
representative capacity under the Declaration of Trust
dated May 1, 1945, as amended, and not individually,
and shall bind only the trust estate of the Nancy
Johnston Trust, and as trustee, George J. Records shall
not be bound or held to any personal liability in
connection with the obligations of the Nancy Johnston
Trust hereunder.
IN WITNESS WHEREOF, Secured Party and Debtor have
caused this Agreement to be duly executed and delivered as of the
date and year first above written.
SECURED PARTY: FIRSTINSURE, INC., an
Oklahoma corporation
By__________________________
Name: _________________
Title: ________________
DEBTOR:
____________________________
George J. Records, as
Trustee of The Nancy
Johnston Trust
<PAGE>
IRREVOCABLE PROXY
I, the undersigned, being the joint record owner of
_______________________________________________ (___________)
shares of common stock, do hereby appoint ____________________ as
my proxy to attend all meetings of the stockholders of The Turner
Corporation, a Delaware corporation, ("the Corporation") with
full power to vote and act for me in the same manner and extent
that I might were I personally present at said meetings.
This proxy shall be irrevocable.
Dated ________________, 199__.
____________________________
_______________________(Name)
Address:
_____________________________
_____________________________
<PAGE>
STOCK POWER
FOR VALUE RECEIVED GEORGE J. RECORDS, AS TRUSTEE OF THE
NANCY JOHNSTON TRUST ("Seller") does hereby sell, assign and
transfer unto ______________________________________________,
_____________________________________________(_________) shares
of the common capital stock of The Turner Corporation, a Delaware
corporation (the "Company"), standing in ________________________
name on the books of the Company, represented by Certificate No.
___________ and does hereby irrevocably constitute and appoint
FIRSTINSURE, INC., its attorney-in-fact to transfer or authorize
the transfer of said stock on the books of the Company, with full
power of substitution in the premises.
Dated this ______ day of _____________, 199__.
SELLER:
_____________________________
George J. Records, as
Trustee of The Nancy Johnston Trust
