SECURITY AGREEMENT
THIS SECURITY AGREEMENT dated effective as of March 28, 2002, is by and
between CONTINENTAL RESOURCES, INC., an Oklahoma corporation (the "Debtor")
whose address is 302 N. Independence, Suite 300, Enid, Oklahoma 73701 and
GUARANTY BANK, FSB, a federal savings bank, as Bank and as Collateral Agent as
defined under the Credit Agreement hereinafter defined (the "Secured Party"),
whose address is 333 Clay Street, Suite 4430, Houston, Texas 77002, 730 N. Post
Oak Road, 4th Floor, Houston, Texas 77024.
R E C I T A L S:
A. Reference is made to that certain Fourth Amended and Restated Credit
Agreement dated of even date herewith by and among Debtor, Secured Party as
Collateral/Documentation Agent, Co-Arranger and a Bank, Union Bank of
California, N.A., as Administrative Agent, LC Issuer, Lead Arranger, Fronting
Bank and a Bank, Fortis Capital Corp., as Syndication Agent, Co- Arranger and a
Bank and the other financial institutions and banks from time to time parties to
the Credit Agreement (the "Banks")(as the same may be amended, supplemented or
modified from time to time, the "Credit Agreement");
B. The loans to be made pursuant to the Credit Agreement are evidenced by
certain Amended and Restated Replacement Notes in the aggregate principal amount
of $175,000,000.00, such notes dated as of even date herewith and executed by
Debtor and payable to Secured Party, as the same may be amended, extended,
renewed or restated (the "Notes").
C. Secured Party has conditioned its obligations under the Credit Agreement
upon, among other things, the execution and delivery of this Security Agreement
by Debtor (hereinafter, the "Agreement").
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I
SECURITY INTEREST
Section 1.01. Security Interest. Debtor hereby grants to Secured Party a
security interest in the following property, whether now owned or existing or
hereafter arising or acquired and wherever arising or located (such property
being hereinafter sometimes called the "Collateral"):
(a) All right, title and interest of Debtor in and to all goods,
inventory, equipment, fixtures, machinery, furnishings, furniture,
appliances, accessories, leasehold improvements, hattels, and other items
of personal property owned by the Debtor, including, but not limited to all
of the foregoing that are located on the property described on Exhibit "A"
("Property") which is attached hereto and incorporated herein, or used or
held for use by Debtor in connection with any such Property;
(b) All accounts, contract rights (including, without limitation, any
Hedge Agreement, as defined in the Credit Agreement), instruments,
documents, chattel paper, and general intangibles owned by the Debtor
relating to or arising out of the Property;
(c) All right, title and interest of Debtor in and to all accessions
or appurtenances to any of the foregoing;
(d) All right, title and interest of Debtor in and to all
improvements, extensions, alterations, substitutions, replacements,
renewals, and rights belonging or in any way appertaining to all or any
part of the foregoing or acquired for use in connection therewith;
(e) All right, title and interest of Debtor in and to all proceeds
payable or to be payable under each policy of insurance relating to the
whole or any part of the foregoing; and
(f) Without limiting any description of the foregoing, all right,
title and interest of Debtor in and to all rights, rents, revenues, income,
issues, benefits, leases, contract rights, general intangibles, chattel
paper, money, instruments, documents, files, computerized or other records,
books, ledger sheets, executory contract rights, rights as an unpaid vendor
(including the right to stop goods in transit, to replevy, and to reclaim),
tenements, hereditaments, and appurtenances now or hereafter owned by the
Debtor and appertaining to, generated from, arising out of, or belonging to
any of the foregoing, and all products and proceeds thereof.
Section 1.02. After-Acquired Collateral. All property acquired by the
Debtor after the date of this Agreement that by the terms hereof is required or
intended to be subject to the security interest granted or renewed by this
Agreement will, immediately upon the acquisition thereof and without further
mortgage, conveyance, or assignment, become subject to the security interest
created by this Agreement as fully as though now owned by the Debtor and
specifically described herein. Nevertheless, the Debtor will do all such further
acts and will execute, acknowledge, and deliver all such further conveyances,
mortgages, financing statements, and assurances as the Secured Party reasonably
requires for accomplishing the purposes of this Agreement.
Section 1.03. Sale of Collateral. The inclusion of proceeds as part of the
Collateral does not authorize the Debtor to sell any of the Collateral except to
the extent permitted by the Credit Agreement without the Secured Party's prior
written consent, except as provided in Section 3.04 of this Security Agreement.
Section 1.04. Obligations. The Collateral shall secure the following
("Obligations"):
(a) the obligations and indebtedness of Debtor to Secured Party
evidenced by the Notes;
(b) the obligations and indebtedness of Debtor to Secured Party under
the Credit Agreement and the Loan Documents, as such term is defined in the
Credit Agreement;
(c) any and all indebtedness and liabilities whatsoever of Debtor to
Secured Party whether direct or indirect, absolute or contingent, due or to
become due, and whether now existing or hereafter arising and however
evidenced or acquired, and whether joint or several;
(d) all costs and expenses, including, without limitation, all
attorneys' fees and legal expenses, incurred by Secured Party to preserve
and maintain the Collateral, collect the obligations herein described, and
enforce this Agreement; and
(e) all extensions, renewals, and modifications of any of the
foregoing.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
To induce Secured Party to enter into this Agreement and the Credit
Agreement, Debtor represents and warrants to Secured Party that:
Section 2.01. Title. Except for the security interest granted herein and
Permitted Encumbrances, as defined in the Credit Agreement, Debtor owns, and
with respect to Collateral acquired after the date hereof, Debtor will own, the
Collateral free and clear of any lien, security interest, or other encumbrance.
Section 2.02. Financing Statements. No financing statement, security
agreement, or other lien instrument covering all or any part of the Collateral
is on file in any public office, except as may have been filed in favor of
Secured Party.
Section 2.03. Organization and Authority. Debtor is a corporation duly
formed and validly existing under the laws of the state of Oklahoma. Debtor has
the power and authority to execute, deliver, and perform this Agreement, and the
execution, delivery, and performance of this Agreement by Debtor have been
authorized by all necessary action on the part of Debtor and do not and will not
violate any law, rule or regulation or the charter documents of Debtor and do
not and will not conflict with, result in a breach of, or constitute a default
under the provisions of any indenture, mortgage, deed of trust, security
agreement, or other instrument or agreement pursuant to which Debtor or any of
its property is bound.
Section 2.04. Principal Place of Business. The principal place of business
of Debtor, and the office where Debtor keeps its books and records, is located
at the address of Debtor shown at the beginning of this Agreement.
Section 2.05. Location of Collateral. The Collateral of Debtor is located
either at the address of Debtor shown at the beginning of this Agreement or on
the Property described on Exhibit "A" attached hereto.
ARTICLE III
COVENANTS
Debtor covenants and agrees with Secured Party that until the Obligations
are paid and performed in full:
Section 3.01. Maintenance. Debtor shall maintain the Collateral in good
operating condition and repair and shall not permit any waste or destruction of
the Collateral or any part thereof, unless the failure to do so, in any one
instance or in the aggregate, would not have a Material Adverse Effect (as
defined in the Credit Agreement). Debtor shall not use or permit the Collateral
to be used in violation of any law or inconsistently with the terms of any
policy of insurance. Debtor shall not use or permit the Collateral to be used in
any manner or for any purpose that would materially impair the value of the
Collateral or expose the Collateral to unusual risk.
Section 3.02. Encumbrances. Debtor shall not create, permit, or suffer to
exist, and shall defend the Collateral against, any lien, security interest, or
other encumbrance on the Collateral except the security interest of Secured
Party hereunder and Permitted Encumbrances, as defined in the Credit Agreement,
and shall defend Debtor's rights in the Collateral and Secured Party's security
interest in the Collateral against the claims of all persons and entities.
Section 3.03. Rights to Collateral. Debtor shall do nothing to impair the
rights of Secured Party in the Collateral.
Section 3.04. Disposition of Collateral. Except as may be expressly
provided for in the Credit Agreement, Debtor shall not sell, lease, or otherwise
dispose of the Collateral or any part thereof without the prior written consent
of Secured Party.
Section 3.05. Further Assurances. At any time and from time to time, upon
the request of Secured Party, and at the sole expense of Debtor, Debtor shall
promptly execute and deliver all such further instruments and documents and take
such further action as Secured Party may deem necessary or desirable to preserve
and perfect its security interest in the Collateral and carry out the provisions
and purposes of this Agreement, including, without limitation, the execution and
filing of such financing statements as Secured Party may require. A carbon,
photographic, or other reproduction of this Agreement or of any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement and may be filed as a financing statement.
Section 3.06. Risk of Loss; Insurance. Debtor shall be responsible for any
loss of or damage to the Collateral. Debtor shall maintain, with financially
sound and reputable companies, insurance policies (i) insuring the Collateral
against loss by fire, explosion, theft, and such other risks and casualties as
are customarily insured against by companies engaged in the same or a similar
business, and (ii) insuring Debtor and Secured Party against liability for
personal injury and property damage relating to the Collateral, such policies to
be in such amounts and covering such risks as are customarily insured against by
companies engaged in the same or a similar business, with losses payable to
Debtor and Secured Party as their respective interests may appear. All insurance
with respect to the Collateral shall provide that no cancellation, reduction in
amount, or change in coverage thereof shall be effective unless Secured Party
has received thirty (30) days prior written notice thereof. Debtor shall deliver
to Secured Party copies of all insurance policies covering the Collateral or any
part thereof.
Section 3.07. Inspection Rights. Debtor shall permit Secured Party and its
representatives to examine or inspect the Collateral wherever located and to
examine, inspect, and copy Debtor's books and records at any reasonable time and
as often as Secured Party may desire during normal business hours.
Section 3.08. Notification. Debtor shall promptly notify Secured Party of
(i) any lien, security interest, encumbrance, or claim made or threatened
against the Collateral, other than Permitted Encumbrances as defined in the
Credit Agreement, and (ii) any material change in the Collateral, including,
without limitation, any material damage to or loss of the Collateral.
Section 3.09. Taxes. Debtor agrees to pay or discharge prior to delinquency
all taxes, assessments, levies, and other governmental charges imposed on it or
its property, except Debtor shall not be required to pay or discharge any tax,
assessment, levy, or other governmental charge if (i) the amount or validity
thereof is being contested by Debtor in good faith by appropriate proceedings
diligently pursued, (ii) such proceedings do not involve any risk of sale,
forfeiture, or loss of the Collateral or any interest therein, and (iii)
adequate reserves therefor have been established in conformity with generally
accepted accounting principles.
Section 3.10. Books and Records; Information. Debtor shall keep accurate
and complete books and records of the Collateral. Debtor shall from time to time
at the request of Secured Party deliver to Secured Party such information
regarding the Collateral and Debtor as Secured Party may request, including,
without limitation, lists and descriptions of the Collateral and evidence of the
identity and existence of the Collateral. Debtor shall mark its books and
records to reflect the security interest of Secured Party under this Agreement.
Section 3.11. Location of Collateral. Debtor shall not move any of the
Collateral from the location specified herein without the prior written consent
of Secured Party except as may be necessary in the normal course of operations
of the Property and with proper documentation of disposition of Collateral.
Section 3.12. Obligations. Debtor shall duly and punctually pay and perform
the Obligations.
Section 3.13. Organization Changes. Debtor shall not change its name,
identity, or corporate structure or management in any manner that might make any
financing statement filed in connection with this Agreement seriously misleading
unless Debtor shall have given Secured Party thirty (30) days prior written
notice thereof and shall have taken all action deemed necessary or desirable by
Secured Party to make each financing statement not seriously misleading. Debtor
shall not change its principal place of business or the place where it keeps its
books and records unless it shall have given Secured Party thirty (30) days
prior written notice thereof and shall have taken all action deemed necessary or
desirable by Secured Party to cause its security interest in the Collateral to
be perfected with the priority required by this Agreement.
ARTICLE IV
RIGHTS OF SECURED PARTY
Section 4.01. Power of Attorney. Debtor hereby irrevocably constitutes and
appoints Secured Party and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the name of Debtor or in its own name, to take, any and
all action and to execute any and all documents and instruments which Secured
Party at any time and from time to time deems necessary or desirable to
accomplish the purposes of this Agreement. All third parties may conclusively
rely on any action taken by Secured Party purporting to act in its capacity as
attorney-in-fact for Debtor.
This power of attorney is a power coupled with an interest and shall be
irrevocable. Secured Party shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges, and options expressly or
implicitly granted to Secured Party in this Agreement, and shall not be liable
for any failure to do so or any delay in doing so. Secured Party shall not be
liable for any act or omission or for any error of judgment or any mistake of
fact or law in its individual capacity or in its capacity as attorney-in-fact
except acts or omissions resulting from its gross negligence and willful
misconduct. This power of attorney is conferred on Secured Party solely for the
purposes of enabling Secured Party to act on behalf of Debtor in order to
perform any act that Debtor is obligated to perform hereunder that Debtor has
failed or refused to perform, or for any other purpose which Secured Party deems
necessary to act promptly to protect or preserve its security interest in the
Collateral. Secured Party shall not be responsible for any decline in the value
of the Collateral and shall not be required to take any steps to preserve rights
against prior parties or to protect, preserve, or maintain any security interest
or lien given to secure the Collateral.
Section 4.02. Performance by Secured Party of Debtor's Obligations. If
Debtor fails to perform or comply with any of its agreements contained herein,
Secured Party itself may, at its sole discretion, cause or attempt to cause
performance or compliance with such agreement and the expenses of Secured Party,
together with interest thereon at the maximum nonusurious per annum rate
permitted by applicable law, shall be payable by Debtor to Secured Party on
demand and shall constitute Obligations secured by this Agreement.
Notwithstanding the foregoing, it is expressly agreed that Secured Party shall
not have any liability or responsibility for the performance of any obligation
of Debtor under this Agreement.
Section 4.03. Setoff; Property Held by Secured Party. Subject to the
provisions of the Credit Agreement, which shall control over any contrary
provisions in this Section, Secured Party shall have the right to set off and
apply against the Obligations, at any time and without notice to Debtor, any and
all deposits (general or special, time or demand, provisional or final) or other
sums at any time credited by or owing from Secured Party to Debtor. As
additional security for the Obligations, Debtor hereby grants Secured Party a
security interest in all money, instruments, and other property of Debtor now or
hereafter held by Secured Party, including without limitation, property held in
safekeeping. In addition to Secured Party's right of setoff and as further
security for the Obligations, Debtor hereby grants Secured Party a security
interest in all deposits (general or special, time or demand, provisional or
final) of Debtor now or hereafter on deposit with or held by Secured Party and
all other sums at any time credited by or owing from Secured Party to Debtor.
The rights and remedies of Secured Party hereunder are in addition to other
rights and remedies (including, without limitation, other rights of setoff)
which Secured Party may have.
Section 4.04. Assignment by Secured Party. Secured Party may from time to
time assign the Obligations and any portion thereof and the Collateral and any
portion thereof, and the assignee shall be entitled to all of the rights and
remedies of Secured Party under this Agreement in relation thereto.
Section 4.05 Financing Statement. Secured Party shall be entitled at any
time to file, and Debtor hereby authorizes Secured Party to file, a Uniform
Commercial Code Financing Statement or this Security Agreement (or any amendment
to either such instrument) or a carbon, photographic, or other reproduction of
this Security Agreement (or amendment thereto), as a financing statement (or
amendment thereto), in any form or medium provided by the UCC, with or without
Debtor's signature, but the failure of Secured Party to do so shall not impair
the validity or enforceability of this Security Agreement.
ARTICLE V
DEFAULT
Section 5.01. Default and Remedies. Upon the occurrence of an Event of
Default (as such term is defined in the Credit Agreement), Secured Party shall
have the following rights and remedies:
(a) Secured Party may declare the Obligations or any part thereof
immediately due and payable, without notice, demand, presentment, notice of
dishonor, notice of acceleration, notice of intent to accelerate, notice of
intent to demand, protest, or other formalities of any kind, all of which
are hereby expressly waived by Debtor; provided, however, that upon the
occurrence of an Event of Default under Section 7.01 of the Credit
Agreement, the Obligations shall become immediately due and payable without
notice, demand, presentment, notice of dishonor, notice of acceleration,
notice of intent to accelerate, notice of intent to demand, protest, or
other formalities of any kind, all of which are hereby expressly waived by
Debtor.
(b) In addition to all other rights and remedies granted to Secured
Party in this Agreement and in any other instrument or agreement securing,
evidencing, or relating to the Obligations or any part thereof, Secured
Party shall have all of the rights and remedies of a secured party under
the Uniform Commercial Code as adopted by the State of Texas. Without
limiting the generality of the foregoing, Secured Party may (i) without
demand or notice to Debtor, collect, receive, or take possession of the
Collateral or any part thereof and for that purpose Secured Party may enter
upon any premises on which the Collateral is located and remove the
Collateral therefrom or render it inoperable, and/or (ii) sell, lease, or
otherwise dispose of the Collateral, or any part thereof, in one or more
parcels at public or private sale or sales, at Secured Party's offices or
elsewhere, for cash, on credit, or for future delivery. Upon the request of
Secured Party, Debtor shall assemble the Collateral and make it available
to Secured Party at any place designated by Secured Party that is
reasonably convenient to Debtor and Secured Party. Debtor agrees that
Secured Party shall not be obligated to give more than ten (10) days
written notice of the time and place of any public sale or of the time
after which any private sale may take place and that such notice shall
constitute reasonable notice of such matters. Debtor shall be liable for
all expenses of retaking, holding, preparing for sale, or the like, and all
attorneys' fees, legal expenses, and all other costs and expenses incurred
by Secured Party in connection with the collection of the Obligations and
the enforcement of Secured Party's rights under this Agreement. Secured
Party may apply the Collateral against the Obligations in such order and
manner as Secured Party may elect in its sole discretion. Debtor waives all
rights of marshalling in respect of the Collateral.
(c) Secured Party may cause any or all of the Collateral held by it to
be transferred into the name of Secured Party or the name or names of
Secured Party's nominee or nominees.
ARTICLE VI
MISCELLANEOUS
Section 6.01. Expenses; Indemnification. Debtor agrees to pay on demand all
costs and expenses incurred by Secured Party in connection with the preparation,
negotiation, and execution of this Agreement subject to any limitations in the
Credit Agreement and any and all amendments, modifications, and supplements
hereto. Debtor agrees to pay and to hold Secured Party harmless from and against
all fees and all excise, sales, stamp, and other taxes payable in connection
with this Agreement or the transactions contemplated hereby. Debtor hereby
indemnifies and holds Secured Party harmless from and against any and all
present and future claims, actions, liabilities, and damages arising from or
relating to this Agreement, the Obligations, or the Collateral, and all costs
and expenses (including attorneys' fees) incurred by Secured Party in respect
thereof.
Section 6.02. No Waiver; Cumulative Remedies. No failure on the part of
Secured Party to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
Section 6.03. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of Debtor and Secured Party and their respective
successors, and assigns, except that Debtor may not assign any of its rights or
obligations under this Agreement without the prior written consent of Secured
Party.
Section 6.04. Notices. All notices and other communications provided for in
this Agreement shall be given as provided for in the Credit Agreement.
Section 6.05. APPLICABLE LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. ANY ACTION OR
PROCEEDING AGAINST DEBTOR UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER INSTRUMENT OR AGREEMENT SECURING, EVIDENCING, OR RELATING TO THE
OBLIGATIONS OR ANY PART THEREOF MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN
HARRIS COUNTY, TEXAS. DEBTOR HEREBY IRREVOCABLY (I) SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURTS, AND (II) WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN SUCH
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. DEBTOR AGREES THAT SERVICE OF
PROCESS UPON IT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, AT ITS ADDRESS SPECIFIED HEREIN. NOTHING IN THIS AGREEMENT OR ANY
OTHER INSTRUMENT OR AGREEMENT SECURING, EVIDENCING, OR RELATING TO THE
OBLIGATIONS OR ANY PART THEREOF SHALL AFFECT THE RIGHT OF SECURED PARTY TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF SECURED
PARTY TO BRING ANY ACTION OR PROCEEDING AGAINST DEBTOR OR WITH RESPECT TO ANY OF
THE COLLATERAL IN ANY STATE OR FEDERAL COURT IN ANY OTHER JURISDICTION.
Section 6.06. Headings. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 6.07. Survival of Representations and Warranties. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by Secured Party shall affect the
representations and warranties or the right of Secured Party to rely upon them.
Section 6.08. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 6.09. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 6.10. Construction. Debtor and Secured Party acknowledge that each
of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this Agreement shall be construed as if jointly drafted by Debtor and Secured
Party.
Section 6.11. Obligations Absolute. The obligations of Debtor under this
Agreement shall be absolute and unconditional and shall not be released,
discharged, reduced, or in any way impaired by any circumstance whatsoever,
including, without limitation, any amendment, modification, extension, or
renewal of this Agreement, the Obligations, the Credit Agreement, or any
document or instrument evidencing, securing, or otherwise relating to the
Obligations, this Agreement, the Credit Agreement, or any release or
subordination of collateral, or any waiver, consent, extension, indulgence,
compromise, settlement, or other action or inaction in respect of this
Agreement, the Obligations, the Credit Agreement, or any document or instrument
evidencing, securing, or otherwise relating to the Obligations, or any exercise
or failure to exercise any right, remedy, power, or privilege in respect of this
Agreement, the Credit Agreement, or the Obligations.
Section 6.12. Definitions. Capitalized terms used and not defined in this
Security Agreement have the meanings specified in the Credit Agreement.
Section 6.13. Benefit of Banks. Debtor agrees and acknowledges that Secured
Party executes this document as a Bank and as the Collateral Agent for the other
Banks under that Credit Agreement and any and all rights, benefits and
entitlements under this Agreement in favor of Secured Party are for the benefit
of all Banks under the Credit Agreement.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first written above.
DEBTOR:
CONTINENTAL RESOURCES, INC.
By: ROGER CLEMENT
Roger Clement, Sr. Vice President
and Chief Financial Officer
SECURED PARTY:
GUARANTY BANK, FSB,
as Collateral Agent
By: RICHARD MENCHACA
Richard Menchaca
Vice President
EXHIBIT "A"
PROPERTY DESCRIPTION