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E DRAFT
<br />LOAN AGREEMENT
<br />OF EVEN DATE HEREWITH PARIS ECONOMIC DEVELOPMENT CORPORATION, A Texas Non-
<br />Stock, Non-ProTit Industrial Development Corporation ("Bonower") is executing in favor ofCAPITAL ONE, N.A.
<br />("Lender") a Note in the original principal sum of Two million and no/100 ($2,000,000.00) Dollars (herein called "the
<br />Loan"), payable under the terms and provisions set out therein, and secured by Security Agreement, Financing
<br />Statements, and Collateral Pledge covering certain collateral hereinafter referred to; and in order to establish the full
<br />terms and conditions of the agreements between the parties, this Loan Agreement is entered into by and between
<br />Borrower and Lender and incorporates therein the following terms and conditions:
<br />Borrower represents that it is a non-profit corporation organized and duly existing under and by virtue of the
<br />laws of the State of Texas, and was certified as a valid corporation on July 19, 1993. It is governed by the
<br />applicable statutes and provisions set out in its Articles of Incorporation. Its By-Laws were created on the
<br />day of , 19 , and the applicable statutes, By-Laws and Articles of Incorporation are
<br />incorporated herein by reference and made a part hereof for all necessary purposes.
<br />2. Borrower receives its income from a portion of the State sales tax revenues, same being a one-quarter of One
<br />percent (1.00%) sales and use tax collected by the City of Paris, Texas, a Home-Rule City. The Comptroller
<br />of Public Accounts far the State of Texas makes payment of these funds to the City of Paris, who thereafter
<br />deposits into the Borrower's account the funds due to Borrower.
<br />In 2010 Bonower sold $4,200,000.00 oftaxable sales tax revenue bonds, Series 2010; which bond obligations
<br />are due and payable from the tax funds received by Borrower. This encumbrance constitutes a valid, binding
<br />first lien on Borrower's income, and Lender aclrnowledges that it is making this Loan SUBJECT TO the
<br />outstanding bond issue; which terms and conditions are incorporated herein by reference and made a part hereof
<br />for all necessary purposes. Further, it is contemplated in the existing bond issue that Borrower may issue
<br />additional bonds of parity with the Series 2010 bonds, and Lender agrees that same may be issued, as weli as
<br />other obligations which are a part of the contemplated purposes of Borrower so long as Bonower is not in
<br />violation of Paragraph 8 of this Loan Agreement.
<br />4. The City Council of the City of Paris, by Resolution No. 2011- , has approved the financing from Lender
<br />to Borrower, and Borrower, by Resolution No. 2011- , has authorized its President, M. PIKE
<br />BURKHART, SR., to execute any and all documents necessary to consummate the Loan being made by
<br />Borrower for its benefit. Both the Resolution of the City of Paris and Borrower's Resolution are incorporated
<br />herein by reference and made a part hereof for all necessary purposes, as well as Borrower's financial statement
<br />dated , 2011; Borrower hereby verifying to Lender that same is true and correct, and
<br />aclrnowledging that Lender is relying upon the representations made in such financial statement as an
<br />inducement for the making of the Loan by Lender.
<br />Borrower ab ees that, during the term of the Loan, (i) its annual audited fmancial statements will be delivered
<br />to Lender within 180 days after its fiscal year end; (ii) its quarterly financial statements will be delivered to
<br />Lender within 45 days of the end of each fiscal quarter; and (iii) its annual budget will be delivered to Lender
<br />within 60 days after its date of adoption.
<br />6. Borrower has verified through its bonding attorneys, McCall, Parkhurst & Horton, L.L.P., Dallas, Texas, that
<br />the sales tax revenues of Borrower cannot be pledged to Lender on a"pari passu" basis with the existing bond
<br />issue.
<br />Borrower shall not, without prior written consent from Capital One, issue any debt instrument or incur any
<br />obligation on a parity basis with the Series 2010 Bonds with respect to the pledge and lien on the receipts of
<br />the Sales Tax. Further, Borrower agrees that it will maintain minimum liquidity of $400,000.00 at all times
<br />during the term of this Loan, of which $97,000.00 will be maintained at Capital One, N.A.; and that if Borrower
<br />is in default on its Series 2010 bonds, then Borrower shall also be deemed to be in default under the terms of
<br />this Loan.
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