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El DRAFT
<br />THE STATE OF TEXAS
<br />COUNTY OF LAMAR
<br />COLLATERAL PLEDGE
<br />(Security Agreement)
<br />KNOW ALL MEN BY THESE PRESENTS:
<br />THAT PARIS ECONOMIC DEVELOPMENT CORPORATION, A Texas Non-Stock, Non-Profit
<br />Industrial Development Corporation, whose mailing address is 1125 Bonham Street, Paris, Texas 75460 (herein
<br />called "Debtor", whether one or more), for a valuable and sufficient consideration paid, the receipt of which is hereby
<br />acknowledged, hereby TRANSFER, ASSIGN AND CONVEY unto CAPITAL ONE BANK, N.A., Attn:
<br />(herein called "Secured Party", whether one or more), the following described property (herein called "Collateral" and
<br />in which Debtor grants to Secured Party a security interest) and all liens, rights, titles, equities and interests securing the
<br />same, described as follows, to-wit:
<br />All of Debtor's interest in income received by it from sales tax revenues, and other income received
<br />by Debtor EXCEPT that portion of same currently obligated or subsequent bonds issued as contemplated by
<br />the Series 1998 bonds; "income received" being defined as a one-quarter of One percent (1.00%) sales and use
<br />tax collected by the City of Paris payable to Debtor upon receipt of same from the Comptroller of Public
<br />Accounts of the State of Texas, and deposited in Debtor's sales taac receipts account in its official depository
<br />bank.
<br />THIS PLEDGE is made to secure the payment of one (1) certain promissory note in the original principal sum
<br />of Two million and no/100 ($2,000,000.00) Dollars, dated September 1, 2011, executed by Debtor, payable to Secured
<br />Party as therein provided (herein called "the Notes"), and all renewals and extensions of same, partial or otherwise; and
<br />upon full payment of which this transfer shall be null and void and the Collateral, together with the liens securing same,
<br />shall - at the expense of Debtor - be retransferred without warranty or recourse to Debtor by Secured Party.
<br />IN THE EVENT of default in the payment of any installment, principal or interest, ofthe Notes hereby secured
<br />in accordance with the terms thereof, Secured Party may elect - Debtor hereby expressly waiving notice, demand and
<br />presentment - to declare the entire indebtedness hereby immediately due and payable.
<br />IN THE EVENT of default in the payment of such indebtedness when due or declared due, Secured Party shall
<br />have the right, upon written notice to Debtor, to take such legal action as necessary for the collection of funds hereby
<br />secured except for the proceeds paid to the sales tax fund for the collection of funds for payment of the revenue bonds
<br />established in the "Taxable Sales Tax Revenue Bonds - Series 1998"; and as more particularly set out in the "Official
<br />Notice of Sale, Bid Forms, and Preliminary Official Statement". The notice herein given shall be by Certified Mail,
<br />Return Receipt Requested, to Debtor. Such notice shall constitute prima facie evidence of the matters stated therein,
<br />and all such prerequisites of action to be taken by Secured Party.
<br />SECURED PARTY, in addition to the rights and remedies provided for in the preceding paragraph, shall have
<br />all the rights and remedies of a Secured Party under the Uniform Commercial Code of Texas, and Secured Party shall
<br />be entitled to avail itself of all such other rights and remedies as may now or hereafter exist at law or in equity for the
<br />collection of said indebtedness and the foreclosure of the Security Interest created hereby and the resort to any remedy
<br />provided hereunder or provided by the Uniform Commercial Code of Texas, or by any other law of Texas, shall not
<br />prevent the concurrent employment of any other appropriate remedy or remedies.
<br />SECURED PARTY may remedy any default, without waiving same, or may waive any default without waiving
<br />any prior or subsequent default.
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