PROMISSORY NOTE $247,000.00 June 7, 2006
FOR VALUE RECEIVED, the undersigned, __________________., a Texas limited liability corporation (“Borrower”), agrees and promises to pay to the order of _____________________, a Texas family limited partnership (“Lender”), the principal sum of approximately TWO HUNDRED AND FORTY SEVEN THOUSAND DOLLARS ($247,000.00), in lawful money of the United States of America, or so much thereof as may be advanced and outstanding from time to time, together with interest on the unpaid principal balance outstanding from time to time from the date hereof until maturity at the rate of five percent (5%) per annum. No interest shall accrue on the principal for the first 90 days. Borrower shall pay interest due on the principal amount outstanding, beginning on the ninetieth day from the date Borrower receives the final principal sum from Lender, on the first of each month for six (6) months. Thereafter, Borrower will pay principal, plus any accrued, and unpaid, interest due and payable, in 111 equal monthly installments payable on the first of each month beginning the seventh (7) month. Any past due principal shall bear interest from maturity until paid at ten percent (10 %) interest. All or any portion of this Note may be prepaid without penalty at any time or times. Acceptance of partial or delinquent payment from the Borrower, or the failure or partial failure or delay of Lender to exercise any right hereunder shall not constitute a waiver or partial waiver of any obligation of the undersigned or any right of the Lender under this Note and shall not affect in any way the right to require full performance at any time thereafter. If default is made in any payment of principal upon this Note when due, then upon fifteen (15) days written notice to the Borrower, the Lender may declare all outstanding principal and accrued, but unpaid interest, if any, immediately due and payable. The obligation to pay principal and interest on this Note is without recourse to Borrower. This Note is not transferable. The Borrower grants and pledges to the Lender a continuing security interest in all of the assets owned by Borrower, including any accounts receivable, equipment, furniture, fixtures, supplies and inventory. The Borrower agrees to pay all costs of the Lender in collecting any sums payable hereunder when such costs are incurred, including reasonable attorneys’ fees, whether or not this Note has been accelerated or any other action has been instituted to enforce this Note. The Borrower shall require fifteen (15) days written notice of any demands, presentments for payment, notices of non-payment, intention to accelerate maturity, acceleration of maturity, and protest and dishonor. The Borrower and the Lender intend that the loan evidenced by this Note (the “Loan”) shall be in strict compliance with applicable usury laws. If at any time, any interest contracted for, charged or received under this Note or otherwise in connection with the Loan would be
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usurious under applicable law, then regardless of the provisions of this Note or any action or event (including, without limitation, prepayment of principal hereunder or acceleration of maturity by the Lender) which may occur with respect to this Note or the Loan, it is agreed that all sums that otherwise would be usurious shall be immediately credited by the Lender as a payment of principal hereunder, or if this Note has already been paid, immediately refunded to the Borrower. All compensation which constitutes interest under applicable law in connection with the Loan shall be amortized, prorated, allocated and spread over the full period of time any indebtedness is owing by the Borrower under the Loan, to the greatest extent permissible without exceeding the Maximum Rate in effect from time to time during such period. No single or partial exercise of, or forbearance from exercising, any power hereunder or under any guaranty pertaining to this Note shall preclude other or further exercises thereof or the exercise of any other power. This Note is binding upon Borrower’s successors and assigns. This Note has been executed and delivered by Borrower in the State of Texas effective as of the date first set forth above and shall be governed by and construed in accordance with the laws of the State of Texas, without regard for such state’s choice of law provisions. In no event shall the provisions of Chapter 346 of the Texas Finance Code (which regulates certain revolving loan accounts and revolving tri-party accounts) apply to the Loan. This Note represents the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties. There are no oral agreements between the parties.
_________________, a Texas limited liability Corporation BY: _______________________________ Name: _____________________________ Title:______________________________
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