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El DRAFT
<br />LOAN AGREEMENT
<br />OF EVEN DATE HEREWITH PARIS ECONOMIC DEVELOPMENT CORPORATION, A Texas Non-
<br />Stock, Non-Profit Industrial Development Corporation ("Borrower") is executing in favor of CAPITAL ONE
<br />BANK, N.A. ("Lender") a Note in the original principal sum of Two million and no/100 ($2,000,000.00) Dollars (herein
<br />called "the 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 corparation 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 Incorparation are
<br />incorparated herein by reference and made a part hereof for all necessary purposes.
<br />Borrower receives its income from a portion of the State sales taac revenues, same being a one-quarter of One
<br />percent (1.00°/o) sales and use tax collected by the City of Paris, Texas, a Home-Rule City. The Comptroller
<br />of Public Accounts for 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 1998 Borrower sold $4,200,000.00 oftaxable sales tax revenue bonds, Series 1998; 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 acknowledges that it is making this Loan SUBJECT TO the
<br />outstanding bond issue; which terms and conditions are incorporate 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 1998 bonds, and Lender agrees that same may be issued, as well as
<br />other obligations which are a part of the contemplated purposes of Borrower so long as Borrower 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 fmancing 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 fmancial statement
<br />dated , 2011; Borrower hereby verifying to Lender that same is true and correct, and
<br />acknowledging that Lender is relying upon the representations made in such fmancial statement as an
<br />inducement for the making of the Loan by Lender.
<br />Bonower agrees 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 attorney, Peter Tart, with McCall, Parkhurst & Horton, L.L.P.,
<br />Dallas, Texas, that the sales tax revenues of Borrower cannot be pledged to Lender on a"pari passu" basis with
<br />the existing bond issue.
<br />Borrower and Lender agree that there shall be a Minimum Fixed Charge Ratio of the Loan of 1 Ax for the
<br />Borrower, defined as the total income and revenue divided by all principal and interest debt service. This ratio
<br />shall be measured annually from the audited financial statements of Borrower, and provided to Lender; and
<br />failure to maintain such ratio shall constitute default under the terms of the Loan and security instruments.
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