PROMISSORY NOTE
Principal - $750,000
Loan Date - 04-30-1996
Maturity - 10-31-1997
Borrower: CARBONIC RESERVES Lender: Liberty Bank and
10110 Huebner Road Trust Company of
San Antonio, TX 78240 Oklahoma City, N.A.
Metropolitan Lending
Department/Commercial
Loans
P.O. Box 25848
Oklahoma City, OK
73125
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Principal Amount: $750,000.00
Initial Rate: 9.750%
Date of Note: April 30, 1996
PROMISE TO PAY. CARBONIC RESERVES ("Borrower") promises to pay
to Liberty Bank and Trust Company of Oklahoma City, N.A.
("Lender"), or order, in lawful money of the United States of
America, the principal amount of Seven Hundred Fifty Thousand &
00/100 Dollars ($750,000.00) 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.
PAYMENT. Borrower will pay this loan in one payment of all
outstanding principal plus all accrued unpaid interest on October
31, 1997. In addition, Borrower will pay regular monthly
payments of accrued unpaid interest beginning May 30, 1996, and
all subsequent interest payments are due on the same day of each
month after that. Interest on this Note is computed on a 365/360
simple interest 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. Borrower will pay
Lender at Lender's address shown above or at such other place as
Lender may designate in writing. 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.
VARIABLE INTEREST RATE. The interest rate on this Note is
subject to change from time to time based on changes in an index
which is the Lender's National Prime Rate (the "Index").
Lender's National Prime Rate is the reference rate of interest
designated by Lender from time to time as the "National Prime
Rate" for the guidance of loan officers. The Index is set from
time to time by Lender in its sole discretion. The Index is not
necessarily the lowest reference rate used by Lender in
calculating interest due on its loans. Lender will tell Borrower
the current index rate upon Borrower's request. Borrower
understands that Lender may make loans based on other rates as
well. The interest rate change will not occur more often than
each day. The Index currently is 8.250% per annum. The interest
rate to be applied to the unpaid principal balance of this Note
will be at a rate of 1,500 percentage points over the Index,
resulting in an initial rate of 9.750% per annum. NOTICE: Under
no circumstances will the interest rate on this Note be more than
the maximum rate allowed by applicable law.
PREPAYMENT. Borrower may pay without penalty all or a portion of
the amount owed earlier than it is due. Early payments will not,
unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments of accrued
unpaid interest. Rather, they will reduce the principal balance
due.
DEFAULT. Borrower will be in default if any of the following
happens: (a) Borrower fails to make any payment when due. (b)
Borrower breaks any promise Borrower has made to Lender, or
Borrower fails to comply with or to perform when due any other
term, obligation, covenant, or condition contained in this Note
or any agreement related to this Note, or in any other agreement
or loan Borrower has with Lender. (c) Any representation or
statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect
either now or at the time made or furnished. (d) Borrower
becomes insolvent, a receiver is appointed for any part of
Borrower's property, Borrower makes an assignment for the benefit
of creditors, or any proceeding is commenced either by Borrower
or against Borrower under any bankruptcy or insolvency laws. (e)
Any creditor tries to take any of Borrower's property on or in
which Lender has a lien or security interest. This includes a
garnishment of any of Borrower's accounts with Lender. (f) Any
of the events described in this default section occurs with
respect to any guarantor of this Note or any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such
guarantor's guarantee of this Note. (g) A material adverse
change occurs in Borrower's financial condition, or Lender
believes the prospect of payment or performance of the
indebtedness is impaired. (h) Lender in good faith deems itself
insecure.
If any default, other than a default in payment, is curable and
if Borrower has not been given a notice of a breach of the same
provision of this Note within the preceding twelve (12) months,
it may be cured (and no event of default will have occurred) if
Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within fifteen (15)
days; or (b) if the cure requires more than fifteen (15) days,
immediately initiates steps which Lender deems in Lender's sole
discretion to be sufficient to cure the default and thereafter
continues and contemplates all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire
unpaid principal balance on this Note and all accrued unpaid
interest immediately due, without notice, and then Borrower will
pay that amount. Upon default, including failure to pay upon
final maturity, Lender, at its option, may also, if permitted
under applicable law, increase the variable interest rate on this
Note to 6.500 percentage points over the Index. The interest
rate will not exceed the maximum rate permitted by applicable
law. Lender may hire or pay someone else to help collect this
Note if Borrower does not pay. Borrower also will pay Lender
that amount. This includes, subject to any limits under
applicable law, Lender's attorneys' fees and Lender's legal
expenses whether or not there is a lawsuit, including attorneys'
fees and legal expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction),
appeals, and any anticipated post-judgment collection services.
If not prohibited by applicable law, Borrower also will pay any
court costs, in addition to all other sums provided by law. This
Note has been delivered to Lender and accepted by Lender in the
State of Oklahoma. If there is a lawsuit, Borrower agrees upon
Lender's request to submit to the jurisdiction of the courts of
Oklahoma County, the State of Oklahoma. Lender and Borrower
hereby waive the right to any jury trial in any action,
proceeding, or counterclaim brought by either Lender or Borrower
against the other. This Note shall be governed by and construed
in accordance with the laws of the State of Oklahoma.
DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00
if Borrower makes a payment on Borrower's loan and the check or
other payment order including any preauthorized charge with which
Borrower pays is later dishonored.
RIGHT OF SETOFF. Borrower grants to Lender a contractual
possessory security interest in, and hereby assigns, conveys,
delivers, pledges, and transfers to Lender all Borrower's right,
title and interest in and to, Borrower's accounts with Lender
(whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else
and all accounts Borrower may open in the future, excluding
however all IRA, Keogh, and trust accounts. Borrower authorizes
Lender, to the extent permitted by applicable law, to charge or
setoff all sums owing on this Note against any and all such
accounts.
LINE OF CREDIT. This Note evidences a revolving line of credit.
Advances under this Note, as well as directions for payment from
Borrower's accounts, may be requested orally or in writing by
Borrower or by an authorized person. Lender may, but need not,
require that all oral requests be confirmed in writing. The
following party or parties are authorized to request advances
under the line of credit until Lender receives from Borrower at
Lender's address shown above written notice of revocation of
their authority: Clifford H. Collen, Jr., President; Herb Mee,
Jr., Vice President; and Randy Thacker, Chief Financial Officer.
Borrower agrees to be liable for all sums either: (a) advanced in
accordance with the instructions of an authorized person or (b)
credited to any of Borrower's accounts with Lender. The unpaid
principal balance owing on this Note at any time may be evidenced
by endorsements on this Note or by Lender's internal records,
including daily computer print-outs. Lender will have no
obligation to advance funds under this Note if: (a) Borrower or
any guarantor is in default under the terms of this Note or any
agreement that Borrower or any guarantor has with Lender,
including any agreement made in connection with the signing of
this Note; (b) Borrower or any guarantor cease doing business or
is insolvent; (c) any guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such guarantor's guarantee of
this Note or any other loan with Lender; (d) Borrower has applied
funds provided pursuant to this Note for purposes other than
those authorized by Lender; or (e) Lender in good faith deems
itself insecure under this Note or any other agreement between
Lender and Borrower.
SPECIAL PROVISIONS/REVOLVING LINE OF CREDIT. The total of all
the advances made to Borrower during the term of this Note may
exceed the principal amount of this Note. Further, there may be
times when no amounts are outstanding under this Note, but this
shall not impair or in any way affect either the validity or
enforceability of this Note or any lien or security interest
securing payment of this Note.
PAYMENTS. If any stated principal or interest payment date,
including the stated maturity date is a Saturday, Sunday or other
legal holiday for national banks, the payment due date shall be
extended to the next following business day and interest shall
continue to accrue during such extension.
NON-USE FEE. A non-use fee of .50% will be payable quarterly in
arrears as described in the Loan Agreement dated May 19, 1995.
LOAN AGREEMENT. This Promissory Note is referred to in that
certain Loan Agreement dated May 19, 1995 and the amendment dated
April 30, 1996, to which reference is hereby made for additional
terms described therein.
PRIOR NOTE. The Promissory Note from Carbonic Reserves to Lender
dated November 13, 1995 in the amount of $750,000.00.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of
its rights or remedies under this Note without losing them.
Borrower and any other person who signs, guarantees or endorses
this Note, to the extent allowed by law, waive presentment,
demand for payment, protest and notice of dishonor. Upon any
change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as
maker, guarantor, accommodation maker or endorser, shall be
released from liability. All such parties agree that Lender may
renew or extend (repeatedly and for any length of time) this
loan, or release any party or guarantor or collateral; or impair,
fail to realize upon or perfect Lender's security interest in the
collateral; and take any other action deemed necessary by Lender
without the consent of or notice to anyone. All such parties
also agree that Lender may modify this loan without the consent
of or notice to anyone other than the party with whom the
modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE
PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE
PROVISIONS. BORROWER AGREES TO THE TERMS OF THE NOTE AND
ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.
BORROWER:
CARBONIC RESERVES
By: HERB MEE, JR.
Herb Mee, Jr., Vice-President