2011-078 RES ACKNOWLEDGEMENT & APPROVAL LOAN AGREEMENT & PROMISSORY NOTE BETWEEN PEDC & CAPITAL ONE

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1] DRAFT PROMISSORY NOTE Borrower: PARIS ECONOMIC DEVELOPMENT CORPORATION A Texas Non-Stock, Non-Profit Industrial Development Corporation 1125 Bonham Street, Paris, Texas 75460 Lender: CAPITAL ONE BANK, N.A. Principal Amount: $2,000 000.00 Initial Rate: 1.960% Date of Note: September 1, 2011 PROMISE TO PAY. PARIS ECONOMIC DEVELOPMENT CORPORATION, A Texas Non-Stock, Non-Profit Industrial Development Corporation ("Borrower"), by and through its duly authorized President, M. PIKE BURKHART, SR., promises to pay to the order of CAPITAL ONE BANK, N.A. ("Lender"), in lawful money of the United States of America, the principal amount of Two million and no/100 ($2,000,000.00) Dollars, or so much as may be outstanding, together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance or maturity, whichever first occurs. CHOICE OF USURY CEILING AND INTEREST RATE. The interest rate on this Note has been implemented under the "Weekly Ceiling" as referred to in Sections 303.002 and 303.003 of the Texas Finance Code. The terms, including the rate, or index, formula, or provision of law used to compute the rate on the Note, will be subject to revision a of the Texas F nance1Code , from time to time by notice from Lender in compliance wrth Section 303.103 pAyMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on September 1, 2012. In addition, Borrower will pay regular monthly payments of all accrued unpaid interest due as of each payment date, beginning October 1, 2011, with all subsequent interest payments to be made on the same day of each month thereafter. Borrower's first payment is due October 1, 2011, and all subsequent payments are due on the same day of each month thereafter. Unless otherwise agreed or required by applicable law, payments will be applied first to accrued unpaid interest, then to principal, and any remaining amount to any unpaid collection costs and late charges. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding, unless such calculation would result in a usurious rate, in which case interest shall be calculated on a per diem basis of a year of 365 or 366 days, as the case may be. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. Notwithstanding any other provision of this Note, Lender will not charge interest on any undisbursed loan interest proceeds. No scheduled payment, whether Of pri~ep~ date to just fythe p ymlentdue unless sufficient loan fun ds hav e b e e n d i s b u r s e d b y t h e s c h e d u l ed p y VARIABLE INTERE5T RATE. The interest rate on this Loan is subject to change from time to time based on changes in an independent index which is the Prime Interest Rate quoted by the Wall Street Journal for interest periods of one month effective on the first business day of the month (the "Index"). The Index is not necessarily the lowest rate charged by Lender on its loans. If the Index becomes unavailable during the term of this loan, Lender may designate a substitute index after notice to Borrower. Lender will tell Borrower the current index upon Borrower's request. The interest rate change will not occur more often