Exhibit
10.3


 


CONSTRUCTION LOAN AGREEMENT


 


 


By and
Between


 


 


GLOBAL
GEOPHYSICAL SERVICES, INC., a Delaware corporation,

GGS INTERNATIONAL HOLDINGS, INC., a Texas corporation,

and

AUTOSEIS, INC., a Texas corporation


 


and


 


 


CITIBANK,
N.A.,


a
national banking association


 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
  ARTICLE I

  	
  DEFINITION
  OF TERMS

  	
  1

  
	
  1.1

  	
  Definitions

  	
  1

  
	
  1.2

  	
  Additional Definitions

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  THE
  LOAN

  	
  6

  
	
  2.1

  	
  Agreement to Lend

  	
  6

  
	
  2.2

  	
  Advances

  	
  7

  
	
  2.3

  	
  Allocations

  	
  7

  
	
  2.4

  	
  Limitation on Advances

  	
  7

  
	
  2.5

  	
  Reallocations

  	
  7

  
	
  2.6

  	
  Contingency Allocations

  	
  7

  
	
  2.7

  	
  Regulatory Restrictions

  	
  7

  
	
  2.8

  	
  Withholding on Advances

  	
  8

  
	
  2.9

  	
  Loan Limitation

  	
  8

  
	
  2.10

  	
  Appraisal Right

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  ADVANCES

  	
  8

  
	
  3.1

  	
  Conditions to Initial Advance

  	
  8

  
	
  3.2

  	
  Conditions to Advances

  	
  11

  
	
  3.3

  	
  Conditions Precedent to Advances

  	
  12

  
	
  3.4

  	
  Advance Not A Waiver

  	
  13

  
	
  3.5

  	
  Borrower’s Deposit

  	
  13

  
	
  3.6

  	
  Advance Not An Approval

  	
  14

  
	
  3.7

  	
  Time and Place of Advances

  	
  14

  
	
  3.8

  	
  Retainage

  	
  14

  
	
  3.9

  	
  No Third Party Beneficiaries

  	
  15

  
	
  3.10

  	
  Extended Maturity Date Options

  	
  15

  
	
  3.11

  	
  Note Repayment

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  WARRANTIES
  AND REPRESENTATIONS

  	
  16

  
	
  4.1

  	
  Plans and Specifications

  	
  16

  
	
  4.2

  	
  Governmental Requirements

  	
  16

  
	
  4.3

  	
  Municipal Services

  	
  16

  
	
  4.4

  	
  Access

  	
  17

  
	
  4.5

  	
  Intentionally Blank

  	
  17

  
	
  4.6

  	
  Financial Statements

  	
  17

  
	
  4.7

  	
  Statements

  	
  17

  
	
  4.8

  	
  No Proceedings

  	
  17

  
	
  4.9

  	
  Disclaimer of Permanent Financing

  	
  17

  
	
  4.10

  	
  Solvency

  	
  17

  
	
  4.11

  	
  Business Loan

  	
  18

  
	
  4.12

  	
  Relationship

  	
  18

  
	
  4.13

  	
  Intentionally Blank

  	
  18

  
	
  4.14

  	
  Licenses; Permits

  	
  18

  
	
  4.15

  	
  No Assignment

  	
  18

  



 


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  Page

  
	
  4.16

  	
  Compliance with Laws

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  COVENANTS
  OF BORROWER

  	
  18

  
	
  5.1

  	
  Completion

  	
  18

  
	
  5.2

  	
  No Changes

  	
  19

  
	
  5.3

  	
  Advances

  	
  19

  
	
  5.4

  	
  Lender’s Expenses

  	
  19

  
	
  5.5

  	
  Surveys

  	
  19

  
	
  5.6

  	
  Defects and Variances

  	
  20

  
	
  5.7

  	
  Estoppel Certificates

  	
  20

  
	
  5.8

  	
  Inspecting Person

  	
  20

  
	
  5.9

  	
  Brokers

  	
  20

  
	
  5.10

  	
  Personalty and Fixtures

  	
  20

  
	
  5.11

  	
  Compliance with Governmental Requirements

  	
  20

  
	
  5.12

  	
  Compliance with Restrictive Covenants

  	
  20

  
	
  5.13

  	
  Intentionally Omitted

  	
  21

  
	
  5.14

  	
  Affidavit of Completion

  	
  21

  
	
  5.15

  	
  Payment of Expenses

  	
  21

  
	
  5.16

  	
  Notices Received

  	
  21

  
	
  5.17

  	
  Advertising by Lender

  	
  21

  
	
  5.18

  	
  Leases

  	
  21

  
	
  5.19

  	
  Intentionally Blank

  	
  21

  
	
  5.20

  	
  Delivery of Contracts

  	
  21

  
	
  5.21

  	
  Financial Statements

  	
  22

  
	
  5.22

  	
  Reserve for Taxes and Insurance Premiums

  	
  22

  
	
  5.23

  	
  Equity Contribution

  	
  24

  
	
  5.24

  	
  Other Activities

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
  ASSIGNMENTS

  	
  24

  
	
  6.1

  	
  Assignment of Construction Contract

  	
  24

  
	
  6.2

  	
  Assignment of Plans and Specifications

  	
  25

  
	
  6.3

  	
  Assignment of Design Services Contract

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  EVENTS
  OF DEFAULT

  	
  27

  
	
  7.1

  	
  Events of Default

  	
  27

  
	
  7.2

  	
  Remedies

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  LENDER’S
  DISCLAIMERS - BORROWER’S INDEMNITIES

  	
  30

  
	
  8.1

  	
  No Obligation by Lender to Construct

  	
  30

  
	
  8.2

  	
  No Obligation by Lender to Operate

  	
  30

  
	
  8.3

  	
  INDEMNITY BY BORROWER

  	
  30

  
	
  8.4

  	
  No Agency

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  MISCELLANEOUS

  	
  32

  
	
  9.1

  	
  Successors and Assigns

  	
  32

  
	
  9.2

  	
  Headings

  	
  32

  



 


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  Page

  
	
  9.3

  	
  Survival

  	
  32

  
	
  9.4

  	
  APPLICABLE LAW

  	
  32

  
	
  9.5

  	
  Notices

  	
  32

  
	
  9.6

  	
  Reliance by Lender

  	
  33

  
	
  9.7

  	
  Participations

  	
  33

  
	
  9.8

  	
  Interest Provisions

  	
  33

  
	
  9.9

  	
  Controlling Document

  	
  35

  
	
  9.10

  	
  Counterparts

  	
  35

  
	
  9.11

  	
  Waiver of Right to Trial by Jury

  	
  35

  
	
  9.12

  	
  WAIVER OF CONSUMER RIGHTS

  	
  35

  
	
  9.13

  	
  ENTIRE AGREEMENT

  	
  36

  



 


iii

















 


CONSTRUCTION LOAN AGREEMENT


 


This CONSTRUCTION LOAN
AGREEMENT (“Agreement”) is executed effective as of the         
day of February, 2008, by and between GLOBAL GEOPHYSICAL SERVICES, INC., a
Texas corporation, d/b/a GGS Seismic, Inc. (“Global”), GGS
INTERNATIONAL HOLDINGS, INC., a Texas corporation and AUTOSEIS, INC., a Texas
corporation whose address is 3535 Briarpark Drive, Suite 200, Houston,
Texas, 77042, and CITIBANK, N.A., a national banking association (“Lender”),
whose address is 2000 West Sam Houston Parkway South, Suite 600,
Houston, Texas 77042.


 


ARTICLE I


 


DEFINITION OF TERMS


 


1.1                                 Definitions. 
As used in this Agreement, the following terms shall have the respective
meanings indicated below:


 


Advance:  A disbursement by Lender, whether by journal
entry or deposit to Borrower’s account, of any of the proceeds of the Loan, any
insurance proceeds or Borrower’s Deposit.


 


Affidavit of Commencement:  As defined in Section 5.13
hereof.


 


Affidavit of Completion:  As defined in Section 5.14
hereof.


 


Agreement:  This Construction Loan Agreement, as the same
may from time to time be amended or supplemented.


 


Allocations:  The line items set forth in the Budget for
which Advances of Loan proceeds will be made.


 


Borrower:  Shall mean, jointly and severally, Global,
GGS International Holdings, Inc., a Texas corporation and Autoseis, Inc.,
a Texas corporation and Borrower shall also mean any one of them.


 


Borrower’s Deposit:  Such cash amounts as Lender may deem
necessary for Borrower to deposit with it in accordance with the provisions of Section 3.5
of this Agreement.


 


Budget:  The initial budget which is set forth on Exhibit “B”
attached hereto and incorporated herein by reference, as the same may be
amended from time to time and approved by Lender.


 


Commencement Date:  The date set forth in the Schedule of
Definitions.


 


Completion:  When all of the following have been delivered
to the Lender:  (i) Certificate of
Occupancy (or its equivalent) from the appropriate Governmental Authority
having jurisdiction over the Mortgaged Property; (ii) Certificate of
Substantial Completion from the 


 


1

















 


Design Professional
(verified by the Inspecting Person); and (iii) an Affidavit and Release of
Liens, in form and substance acceptable to Lender, from the Contractor and,
upon request of Lender, any other contractor or subcontractor who performed
Work.


 


Completion Date:  The date set forth in the Schedule of
Definitions.


 


Constituent Party:  Any signatory to this Agreement that signs on
Borrower’s behalf that is a corporation, general partnership, limited
partnership, joint venture, trust, or other type of business organization.


 


Construction Contract:  Collectively, all contracts and agreements
entered into between Global and Contractor pertaining to the development,
construction and completion of the Improvements.


 


Contractor:  The person or entity who is acceptable to
Lender and set forth in the Schedule of Definitions (if other than
Global), together with any other person or entity acceptable to Lender with
whom Global contracts for the development, construction and completion of the
Improvements or any portion thereof.


 


Debtor Relief Laws:  Title 11 of the United States Code, as
now or hereafter in effect, or any other applicable law, domestic or foreign,
as now or hereafter in effect, relating to bankruptcy, insolvency, liquidation,
receivership, reorganization, arrangement or composition, extension or
adjustment of debts, or similar laws affecting the rights of creditors.


 


Deed of Trust:  The Deed of Trust of even date herewith
pursuant to which Global mortgages the Mortgaged Property to secure the Loan,
as the same may be modified and amended from time to time as provided therein.


 


Design Professional:  Collectively, the architects, engineers,
other design professional consultants and planners, and firms set forth in the
Schedule of Definitions, with whom Global contracts for the providing of
planning, design, architectural, engineering or other similar design services
relating to the Improvements, if any.


 


Design Services Contract:  Collectively, all contracts and agreements
entered into between Global and each Design Professional pertaining to the
design, development and construction of the Improvements, if any.


 


Draw Request Form:  The form for submission by Borrower to Lender
as a condition precedent for an Advance, in the form of the Draw Request
attached to the Budget or such other form as may be approved by Lender.


 


Environmental Law:  Any federal, state, or local law, statute,
ordinance, or regulation pertaining to health, industrial hygiene, or the
environmental conditions on, under, or about the Mortgaged Property, including
without limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980 (as now or hereafter amended, “CERCLA”), 42 U.S.C.
§ 9601 et  seq., the Resource, Conservation and Recovery Act
(as now or hereafter amended, “RCRA”), 42 U.S.C. § 6901 et  seq.,
as amended by the Superfund Amendments and Reauthorization Act of 1986 (as now
or hereafter amended, “SARA”), Pub. L. 99-499 100 Stat. 


 


2

















 


1613, the Toxic
Substances Control Act, 15 U.S.C. § 2601 et  seq., the
Emergency Planning and Community Right to Know Act of 1986, 42 U.S.C.
§ 1101 et  seq.; Clean Water Act (“CWA”), 33 U.S.C.
§ 1251 et  seq.; Clean Air Act (“CAA”), 42 U.S.C.
§ 7401 et  seq.; Federal Water Pollution Control Act (“FWPCA”),
33 U.S.C. § 1251 et  seq.; and any corresponding state laws
or ordinances including, but not limited to, the Texas Water Code (“TWC”)
§ 26.001 et  seq.; Texas Health & Safety Code (“THSC”)
§ 361.001 et  seq.; the Texas Solid Waste Disposal Act (“TSWDA”),
Tex. Rev. Civ. Stat. Ann. art. 4477-7; and
regulations, rules, guidelines, or standards promulgated pursuant to such laws,
as such statutes, regulations, rules, guidelines, and standards are amended
from time to time.


 


Equity:  Shall mean the “Borrower’s Cash Portion” as
described on the Budget.


 


Event of Default:  Any happening or occurrence described in Section 7.1
of this Agreement.


 


Extended Maturity Date:  The date in January, 2019 corresponding to
the date hereof.


 


Extended Maturity Date
Option:  The option to
extend the Maturity Date to the Extended Maturity Date as described in Section 3.10
hereof.


 


Financing Statement:  The financing statement or financing
statements (on Standard Form UCC-1 or otherwise) authorized to be
delivered by Global in connection with the Loan Documents.


 


Governmental Authority:  Any and all courts, boards, agencies,
commissions, offices, or authorities of any nature whatsoever for any
governmental unit (federal, state, county, district, municipal, city or
otherwise), whether now or hereafter in existence.


 


Governmental Requirements:  All statutes, laws, ordinances, rules,
regulations, orders, writs, injunctions or decrees of any Governmental
Authority applicable to Borrower or the Mortgaged Property.


 


Hazardous Substance:  Hazardous Substance is any substance,
product, waste, or other material which is or becomes listed, regulated, or
addressed as being a toxic, hazardous, polluting, or similarly harmful substance
under any Environmental Law, including without limitation:  (i) any substance included within the
definition of “hazardous waste” pursuant to Section 1004 of RCRA; (ii) any
substance included within the definition of “hazardous substance” pursuant to Section 101
of CERCLA; (iii) any substance included within (a) the definition of “regulated
substance” pursuant to Section 26.342(9) of TWC; or (b) the
definition of “hazardous substance” pursuant to Section 361.003(13) of
THSC; (iv) asbestos; (v) polychlorinated biphenyls; (vi) petroleum
products; (vii) underground storage tanks, whether empty, filled or
partially filled with any substance; (viii) any radioactive materials,
urea formaldehyde foam insulation or radon; (ix) any substance included
within the definition of “waste” pursuant to Section 30.003(b) of TWC
or “pollutant” pursuant to Section 26.001(13) of TWC; and (x) any
other chemical, material or substance, the exposure to which is prohibited,
limited or regulated by any Governmental Authority on the basis that such
chemical, material or substance is toxic, hazardous or harmful to human health
or the environment.  For the purposes of
this definition, Hazardous Substance(s) shall not include any substance of
a nature, quantity or 


 


3

















 


concentration that does
not violate Environmental Laws and is customarily used, stored or disposed as
part of or incidental to the operation and maintenance of the applicable
portion of the Mortgaged Property and the construction of Improvements thereon
in the ordinary course of Borrower’s business currently conducted (or currently
contemplated to be conducted following completion of construction of
Improvements, if applicable) as to such portion of the Mortgaged Property
so long as (x) such use, storage or disposal complies fully with
applicable Environmental Laws and good and safe business practice, (y) any
disposal takes place in accordance with applicable Environmental Laws and, if
applicable, at disposal facilities and locations other than the Mortgaged
Property and which are fully permitted in accordance with Environmental Laws
and (z) such use, storage or disposal does not require Borrower, any agent
or employee of Borrower or any operator of the Mortgaged Property to have a
hazardous waste generator identification number or any other permit based
primarily on or related primarily to Hazardous Substance activity.


 


Improvements:  The improvements generally described in the
Schedule of Definitions to be constructed by Borrower upon the Land, all
as more particularly described in the Plans and Specifications.


 


Indebtedness:  As defined in the Deed of Trust.


 


Initial Advance:  The Advance to be made at the time Borrower
satisfies the conditions set forth in Sections 3.1 of this Agreement,
except as otherwise provided herein.


 


Inspecting Person:  A person designated by Lender from time to
time who may inspect the Improvements from time to time for the benefit of
Lender.


 


Land:  The real property or interest therein
described in Exhibit “A” attached hereto and incorporated herein by
this reference.


 


Leases:  Any and all leases, master leases, subleases,
licenses, concessions, or other agreements (written or oral, now or hereafter
in effect) which grant to third parties a possessory interest in and to, or the
right to use, all or any part of the Mortgaged Property, together with all
security and other deposits or payments made in connection therewith.


 


Loan:  The loan evidenced by the Note and governed
by this Agreement.


 


Loan Amount:  The amount set forth in the Schedule of
Definitions.


 


Loan Documents:  The Note, the Deed of Trust, this Agreement,
the Security Agreement, the Financing Statement, the Assignment of Leases and
Rents, the Guaranty, if any, and any and all other documents now or hereafter
executed by Global, Borrower, or any other person or party in connection with
the Loan, the indebtedness evidenced by the Note, or the covenants contained in
this Agreement.


 


Material Adverse Effect:  Any material and adverse effect on (i) the
business condition (financial or otherwise), operations, prospects, results of
operations, capitalization, liquidity or any properties of Borrower or Global,
taken as a whole, (ii) the value of the Mortgaged Property, (iii) the
ability of Borrower (or if Borrower is a partnership, joint venture, trust or
other type of 


 


4

















 


business association, of
any of the parties comprising Borrower or of the ground lessor if the estate
held by Borrower in the Land is a leasehold estate) to pay and perform the
Indebtedness and the Obligations, respectively, or (iv) the validity,
enforceability or binding effect of any of the Loan Documents.


 


Maturity Date:  The date in January, 2009 corresponding to
the date hereof.


 


Maximum Lawful Rate:  As defined in Section 9.8 hereof.


 


Mortgaged Property:  Collectively, the Land, Improvements and all
other collateral covered by the Loan Documents.


 


Note:  The promissory note dated as of even date
herewith in the principal sum of the Loan Amount (together with all renewals
and extensions thereof) executed and delivered by Borrower payable to the
order of Lender, evidencing the Loan.


 


Obligations:  Any and all of the covenants, conditions,
warranties, representations, and other obligations (other than to repay the
Indebtedness) made or undertaken by Borrower, or any other person or party to
the Loan Documents to Lender, the trustee of the Deed of Trust, or others as
set forth in the Loan Documents, and in any deed, lease, sublease, or other
form of conveyance, or any other agreement pursuant to which Borrower is
granted a possessory interest in the Land.


 


Origination Fee:  The sum set forth in the Schedule of
Definitions to be paid by Borrower to Lender pursuant to the terms of this Agreement.


 


Plans and Specifications:  The plans and specifications for the
development and construction of the Mortgaged Property, prepared by Borrower or
the Design Professional and approved by Lender as required herein, by all
applicable Governmental Authorities, by any party to a purchase or construction
contract with a right of approval, all amendments and modifications thereof
approved in writing by the same, and all other design, engineering or
architectural work, test reports, surveys, shop drawings, and related items.


 


Regulatory Authority:  As defined in Section 2.10
hereof.


 


Schedule of
Definitions:  The
Schedule of Definitions attached hereto and incorporated herein by
reference for all purposes, containing the specific information or identity of
certain terms and definitions used herein.


 


Security Agreement:  The Security Agreement shall mean all
security agreements, whether contained in the Deed of Trust, a separate
security agreement or otherwise creating a security interest in all personal
property and fixtures of Global (including replacements, substitutions and
after-acquired property) now or hereafter located in or upon the Land or
Improvements, or used or intended to be used in the operation thereof, to
secure the Loan.


 


Soft Costs:
The costs incurred by Borrower for environmental reviews, appraisals, soil
analysis, architectural and engineering plans and drawings, legal and
professional services, testing services, financing costs, inspection fees,
plotting fees, printing fees, permit expenses, 


 


5

















 


and other out-of-pocket
expenses incurred as a prerequisite to the commencement of construction on the
Mortgaged Property, together with an interest reserve to cover interest to
accrue on the Note.


 


Special Account:  An account established by Borrower with
Lender (in which Borrower shall at all times maintain a minimum balance of
$1,000.00) into which all Advances made directly to Borrower will be deposited.


 


Title Company:  The Title Company (and its issuing
agent, if applicable) issuing the Title Insurance, which shall be
acceptable to Lender in its sole and absolute discretion.


 


Title Insurance:  One or more title insurance commitments,
binders or policies, as Lender may require, issued by the Title Company, in the
maximum amount of the Loan insuring or committing to insure that the Deed of
Trust constitutes a valid lien covering the Land and Improvements subject only
to those exceptions which Lender may approve.


 


1.2                                 Additional Definitions. 
As used herein, the following terms shall have the following meanings:


 


(a)                                  “Hereof,” “hereby,” “hereto,” “hereunder,”
“herewith,” and similar terms mean of, by, to, under and with respect to, this
Agreement or to the other documents or matters being referenced.


 


(b)                                 “Heretofore” means before, “hereafter”
means after, and “herewith” means concurrently with, the date of this
Agreement.


 


(c)                                  All pronouns, whether in masculine,
feminine or neuter form, shall be deemed to refer to the object of such pronoun
whether same is masculine, feminine or neuter in gender, as the context may
suggest or require.


 


(d)                                 All terms used herein, whether or not
defined in Section 1.1 hereof, and whether used in singular or
plural form, shall be deemed to refer to the object of such term whether such
is singular or plural in nature, as the context may suggest or require.


 


ARTICLE II


 


THE LOAN


 


2.1                                 Agreement to Lend. 
Lender hereby agrees to lend up to but not in excess of the Loan Amount
to Borrower , and Borrower hereby agrees to borrow up to but not in excess of
such sum from Lender, all upon and subject to the terms and provisions of this
Agreement, such sum to be evidenced by the Note.  No principal amount repaid by Borrower may be
reborrowed by Borrower.  Borrower’s
liability for repayment of the interest on account of the Loan shall be limited
to and calculated with respect to Loan proceeds actually disbursed to Borrower
pursuant to the terms of this Agreement and the Note and only from the date or
dates of such disbursements.  After an Event
of Default, Lender may, in Lender’s discretion, disburse Loan proceeds by
journal entry to pay interest and financing costs and disburse Loan proceeds
directly 


 


6

















 


to third parties to pay costs or expenses required to be paid by
Borrower pursuant to this Agreement. 
Loan proceeds disbursed by Lender by journal entry to pay interest or
financing costs, and Loan proceeds disbursed directly by Lender to pay costs or
expenses required to be paid by Borrower pursuant to this Agreement, shall
constitute Advances to Borrower.


 


2.2                                 Advances.  The purposes
for which Loan proceeds are allocated and the respective amounts of such
Allocations are set forth in the Budget. 
Notwithstanding anything herein to the contrary, Advances shall be made
on a monthly basis during the term of the Loan.


 


2.3                                 Allocations. 
The Advances shall be disbursed only for the purposes and in respect of
the Allocations set forth in the Budget. 
Lender shall not be obligated to make an Advance for an Allocation set
forth in the Budget to the extent that the amount of the Advance for such
Allocation would, when added to all prior Advances for such Allocation, exceed
the total of such Allocation as set forth in the Budget.


 


2.4                                 Limitation on Advances. 
To the extent that Loan proceeds disbursed by Lender pursuant to the
Allocations are insufficient to pay all costs required for the acquisition,
development, construction and completion of the Mortgaged Property after
contribution of the Borrower’s Equity as required pursuant to Section 5.26
hereof, Borrower shall pay such excess costs with funds derived from sources
other than the Loan.  Under no
circumstances shall Lender be required to disburse any proceeds of the Loan in
excess of the Loan Amount.


 


2.5                                 Reallocations. 
If expenses incurred to complete, or that will be incurred to complete,
a particular line item in the Budget are less than the amount allocated to such
item in the Budget (the “Savings”) and Borrower provides Lender with evidence
reasonably satisfactory to Lender of such Savings, Borrower may use any Savings
to cover any contingencies or cost overruns in any other particular line item
in the Budget without consent of Lender; provided, however, that no Savings
shall be reallocated from the interest reserve line item on the Budget or to
the developer’s fee or contractor’s fee line items in the Budget.


 


2.6                                 Contingency Allocations. 
Any amount allocated in the Budget for “contingencies” may be disbursed
upon the request of the Borrower on a percentage of completion basis without
the Lender’s consent.  Borrower has the
right to request the Lender to disburse amounts on an accelerated basis and the
Lender shall not unreasonably withhold its consent to such a request.


 


2.7                                 Regulatory Restrictions. 
Notwithstanding anything in this Agreement or the other Loan Documents
to the contrary, in no event shall Lender be required to disburse, nor shall
Borrower be entitled to demand that Lender disburse, all or any portion of the
Loan if the amount of the Loan would, in Lender’s reasonable discretion, cause
Lender to exceed the lending limit to a single borrower under any applicable
state or federal law, regulation or ruling. 
If Lender determines, in its reasonable discretion, at any time
(including after any portion or all of the Loan has been disbursed) that
the transaction evidenced by this Agreement and the other Loan Documents
violates such lending limit restriction, then Lender shall have the right to
immediately reduce the amount of credit available under the Note to an amount
that complies with the Lender’s understanding of what its loan limit is.


 


7
















 


2.8           Withholding
on Advances.  Lender may withhold
from an Advance or, on account of subsequently discovered evidence, withhold
from a later Advance under this Agreement, or require Borrower to repay to
Lender the whole or any part of any earlier Advance, to such extent as may be
necessary to protect the Lender from loss on account of (i) defective work
as determined by the Inspecting Person not remedied or requirements of this
Agreement not performed after notice and opportunity to cure in the manner
specified in Section 7.1, (ii) liens filed or reasonable
evidence indicating probable filing of liens against the Mortgaged Property,
unless the same are bonded around in a manner satisfactory to the Lender, (iii) failure
of Borrower to make payments to subcontractors for material or labor, subject
to Borrower’s rights to contest the same in good faith, and, where Lender
requires, the establishment of cash reserves for such contested claim, or (iv) a
reasonable doubt that the construction can be completed for the balance of the
Loan Amount then undisbursed unless Borrower has satisfied the requirements of Section 2.4
herein.  When all such grounds are
removed, payment shall be made of any amount so withheld because of them.


 


2.9           Loan
Limitation.  Notwithstanding anything
in this Agreement to the contrary, the amount of the Loan with respect to the
Mortgaged Property shall not exceed the lesser of (i) $7,500,000.00, (ii) seventy-five
percent (75%) of the cost of the Improvements or (iii) seventy-five
percent (75%) of the fair market value thereof, as reflected in a MAI appraisal
acceptable to Lender.


 


2.10         Appraisal
Right.  In the event that any
appraisal is required or desired by Lender (no more than annually unless an
Event of Default exists), the Federal Deposit Insurance Corporation, the Office
of Comptroller of Currency or other governmental entity or quasi-governmental
entity which has the authority and power to regulate the business and other
activities of Lender (“Regulatory Authority”), Lender may (at Borrower’s
sole cost and expense) obtain an appraisal of the Mortgaged Property in
form, substance and by an appraising firm acceptable to Lender and, if
applicable, the Regulatory Authority requiring such appraisal.  All appraisals will be performed by state certified
appraisers estimating the market value as defined in the Uniform Standards of
Professional Appraisal Practice and will need all the requirements and
instructions found in the regulations at 12 C.F.R. Part 34.44.


 


ARTICLE III


 


ADVANCES


 


3.1           Conditions
to Initial Advance.  The obligation
of Lender to make the Initial Advance hereunder is subject to the prior or
simultaneous occurrence of each of the following conditions:


 


(a)           Lender
shall have received from Borrower all of the Loan Documents duly executed by
the appropriate party.


 


(b)           Lender
shall have received certified copies of resolutions of Borrower, if Borrower is
a corporation, or a certified copy of a consent of partners, if Borrower is a
partnership, authorizing execution, delivery and performance of all of the Loan



 


8

















 


Documents and
authorizing the borrowing hereunder, along with such certificates of existence,
certificates of good standing and other certificates or documents as Lender may
reasonably require to evidence Borrower’s authority.


 


(c)           Lender
shall have received true copies of all organization documents of Borrower,
including all amendments or supplements thereto, if Borrower is a legal entity
other than a corporation, along with such certificates or other documents as
Lender may reasonably require to evidence Borrower’s authority.


 


(d)           Lender
shall have received evidence that the Mortgaged Property is not located within
any designated flood plain or special flood hazard area; or evidence that
Global has applied for and received flood insurance covering the Mortgaged
Property in the amount of the Loan or the maximum coverage available to Lender.


 


(e)           Lender
shall have received evidence that all permits required for the phase of construction
commenced or to be immediately commenced have been received.


 


(f)            Lender
shall have received a full-size, single sheet copy of all recorded subdivision
or plat maps of the Land approved (to the extent required by Governmental
Requirements) by all Governmental Authorities, if applicable, and legible
copies of all instruments representing exceptions to the state of title to the
Mortgaged Property.


 


(g)           Lender
shall have received proof of insurance upon and relating to the Mortgaged
Property with such insurers, in such amounts and covering such risks as shall
be satisfactory to Lender, from time to time, including but not limited
to:  (i) owner’s and contractors’
(if applicable) policies of commercial general public liability insurance
(including automobile coverage) with a minimum coverage of $2,000,000 per
occurrence and $5,000,000 in the aggregate for bodily injury or property damage
liability per occurrence; (ii) property insurance against all risks of
loss, including collapse, in an amount not less than the full replacement cost
of all Improvements, including the cost of debris removal, with annual agreed
amount endorsement and sufficient at all times to prevent Borrower from
becoming a coinsurer and prior to commencement of pouring a foundation for the
Improvements, a builder’s all-risk insurance policy form on a non-reporting
basis and including coverage for all materials and equipment, wherever located,
intended to be installed in or utilized in the construction of the
Improvements; (iii) if the Mortgaged Property is in a “Flood Hazard Area,”
a flood insurance policy, or binder therefor, in an amount equal to the
principal amount of the note or the maximum amount available under the Flood
Disaster Protection Act of 1973, and regulations issued pursuant thereto, as
amended from time to time, whichever is less, in form complying with the “insurance
purchase requirement” of that act; (iv) workmen’s compensation insurance
for Borrower and the Contractor performing any work on or with respect to the
Mortgaged Property; and (v) such other insurance, if any, as Lender may
reasonably require from time to time. 
Each insurance policy issued in connection herewith shall provide by way
of endorsements, riders or otherwise that (a) with respect to liability
insurance, it shall name Lender as an additional insured, with respect to the
other insurance, it shall be payable to Lender as the primary mortgagee or loss
payee and not as a coinsured, and with respect to all policies of insurance
carried by any lessee for the 


 


9

















 


benefit of
Borrower, it shall be payable to Lender as Lender’s interest may appear; (b) the
coverage of Lender shall not be terminated, reduced, or affected in any manner
regardless of any breach or violation by Borrower of any warranties,
declarations, or conditions in such policy; (c) no such insurance policy
shall be canceled, not renewed, endorsed, altered, or reissued to effect a
change in coverage for any reason and to any extent whatsoever unless such
insurer shall have first given Lender thirty (30) days’ prior written notice
thereof; and (d) Lender may, but shall not be obligated to, make premium
payments to prevent any cancellation, endorsement, alteration, or reissuance,
and such payments shall be accepted by the insurer to prevent same.  Lender shall be furnished with a certificate
evidencing such insurance coincident with the execution of this Agreement and
certificate(s) evidencing each renewal policy not less than ten (10) days’
prior to the expiration of the initial, or each immediately preceding renewal
policy.  Upon request of Lender, Borrower
shall furnish to Lender a statement certified by Borrower or a duly authorized
officer of Borrower of the amounts of insurance maintained in compliance
herewith, of the risks covered by such insurance and of the insurance company
or companies which carry such insurance. 
Notwithstanding the foregoing coverage, builder’s all risk must be in
place no later than the date of the first foundation pour and must remain in
effect through the completion of all Improvements.


 


(h)           Lender
shall have received the Title Insurance, at the sole expense of Borrower.


 


(i)            Lender
shall have received from Borrower such other instruments, evidence and
certificates as Lender may reasonably require, including the items indicated
below:


 


(1)           Evidence
that all the streets furnishing access to the Mortgaged Property have been
dedicated to public use and installed and accepted by applicable Governmental
Authorities.


 


(2)           The Budget,
as may be amended as provided herein, from time to time.


 


(3)           Evidence
satisfactory to Lender showing the availability of all necessary utilities on
the Land or at the boundary lines of the Land, including sanitary and storm
sewer facilities, potable water, telephone, electricity, gas, and municipal
services.


 


(4)           Evidence
that the current and proposed use of the Land and Mortgaged Property and the
construction of the Improvements complies with all Governmental Requirements.


 


(5)           A cost
breakdown satisfactory to Lender showing the total costs, including, but not
limited to, such related nonconstruction items as interest during construction,
commitment, legal, design professional and real estate agents’ fees, plus the
amount of the Land cost and direct construction costs required to be paid 


 


10

















 


to satisfactorily
complete the Mortgaged Property, free and clear of liens or claims for liens
for material supplied and for labor services performed.


 


(6)           A schedule
of construction progress with the anticipated commencement and completion dates
of each phase of construction and the anticipated date and amounts of each
Advance for the same.


 


(7)           Copies of
all subcontracts where the amount payable to the subcontractor is $100,000.00
or more and agreements pertaining to the development, construction and
completion of the Improvements or pertaining to materials to be used in
connection therewith, together with a schedule of anticipated dates and amounts
of each Advance for the same.


 


(8)           Evidence
that the construction of the Improvements comply or will comply, with all
applicable architectural barriers laws [including, without limitation, the
Americans with Disabilities Act of 1990, P.L. 101-336, and 23 Tex. Rev. Civ.
Stat. Ann., art. 9102, as amended], ordinances, rules and regulations,
or a plan of Borrower to achieve compliance therewith within the time
contemplated by said laws, ordinances, rules and regulations, or evidence
that such improvements are exempted from compliance with said laws, ordinances,
rules and regulations.


 


(9)           Such
other instruments, evidence or certificates as Lender may reasonably request,
including (without limitation) the additional items listed, if any, under “Additional
Items Required” in the Schedule of Definitions.


 


(j)            Lender
shall have received payment of the Origination Fee.


 


(k)           Lender is
satisfied that the lien in favor of Lender created pursuant to the Deed of
Trust and covering the Mortgaged Property and Improvements thereon constitutes
a first and sole lien in favor of Lender.


 


3.2           Conditions to
Advances.  The obligation of Lender
to make each Advance hereunder, shall be subject to the prior or simultaneous
occurrence or satisfaction of each of the following conditions:


 


(a)           The Loan
Documents shall be and remain outstanding and enforceable in accordance with
their terms, all as required hereunder.


 


(b)           Lender
shall have received a title report dated within two (2) days of the
requested Advance from the Title Company showing no state of facts (other
than the Permitted Exceptions) objectionable to Lender, including, but not
limited to, a showing that title to the Land is vested in Global and that no
claim for mechanics’ or materialmen’s liens has been filed against the
Mortgaged Property.


 


(c)           The
representations and warranties made by Borrower, as contained in this Agreement
and in all other Loan Documents shall be true and correct as of the date of 


 


11

















 


each Advance; and
if requested by Lender, Borrower shall give to Lender a certificate to that
effect.


 


(d)           The
covenants made by Borrower to Lender, as contained in this Agreement and in all
other Loan Documents shall have been fully complied with, except to the extent
such compliance may be limited by the passage of time or the completion of
construction of the Improvements.


 


(e)           The
Improvements shall not have been materially injured, damaged or destroyed by
fire or other uninsured casualty, nor shall any part of the Mortgaged Property
be subject to condemnation proceedings or negotiations for sale in lieu
thereof.


 


(f)            Borrower
shall have complied with all requirements of the Inspecting Person and all
Governmental Authorities.


 


(g)           There
shall exist no formal claim or dispute between Contractor and any contractor,
subcontractor or materialmen as to monies owed in connection with any labor or
materials furnished in connection with the construction of the Improvements.


 


(h)           There
shall exist no default or breach by any obligated party (other than the Lender)
under the Loan Documents, provided however, to the extent that any grace or
cure period is applicable to such a default or breach, the Lender shall be
under no obligation to make an Advance unless and until said default or breach
is cured to the reasonable satisfaction of the Lender.


 


3.3           Conditions Precedent
to Advances.  After the Initial
Advance, no Advance of the proceeds of the Loan for any purpose shall occur
until Borrower has provided the Lender with the following:


 


(a)           Lender
shall have received (i) a fully executed counterpart of each Construction
Contract or copy thereof; and (ii) a report of any changes, replacements,
substitutions, additions or other modification in the list of contractors,
subcontractors and materialmen involved or expected to be involved in the
construction of the Improvements.


 


(b)           Lender
shall have received from Borrower a Draw Request for such Advance: (i) completed,
executed and certified to by Borrower, with the Inspecting Person’s approval
noted thereon, stating that said construction was performed in accordance with
the Plans and Specifications; (ii) with the statement from Borrower that,
in the opinion of Borrower, construction of the Improvements can be completed
on or before the Completion Date for an additional cost not in excess of the
amount then available under the Loan; (iii) setting forth the amount of
retainage as required by Section 3.8) for each category for which
retainage applies; and (iv) approved by the Inspecting Person.  To the extent approved by Lender, and
included in the Budget, such expenses may be paid from the proceeds of the
Loan.


 


(c)           Borrower
shall have furnished to Lender, from each contractor, subcontractor and
materialman, including Contractor, an invoice, lien waiver and such 


 


12

















 


other instruments
and documents as Lender may from time to time specify, in form and content, and
containing such certifications, approvals and other data and information, as
Lender may require.  The invoice, lien
waiver and other documents shall cover and be based upon work actually
completed or materials actually furnished. 
The lien waiver of each contractor, subcontractor and materialman shall
be received by Lender not later than one month after the making of any Advance
for the benefit of such contractor, subcontractor or materialman which pays the
amount described in such lien waiver.


 


(d)           Borrower
shall have furnished to Lender such city inspection reports, if any, budget
variance reports for the operating budget and other matters, all in form and
substance acceptable to Lender, with respect to the construction of the
Improvements.


 


(e)           If
requested the opinion of the Inspection Person that all work typically done at
the stage of construction when the Advance is requested shall have been done,
and all materials, supplies, chattels and fixtures typically furnished or
installed at such stage of construction shall have been furnished or installed.


 


(f)            All
personal property not yet incorporated into the Improvements but which is to be
paid for out of such Advance, must then be located upon the Land, secured in a
method acceptable to Lender, and Lender shall have received evidence thereof.


 


(g)           Borrower
shall have recorded the executed Affidavit of Commencement as required under Section 5.13
of this Agreement.


 


(h)           Original
or a copy of each fully executed Design Services Contract.


 


(i)            A copy
of the Plans and Specifications.


 


(j)            Building
permit(s), grading permit(s) and all other permits required with respect
to the construction of the Improvements.


 


(k)           Lender
shall have received a completed Budget from Borrower in form and substance
acceptable to Lender, if different from the budget attached hereto as Exhibit “B”.


 


3.4           Advance
Not A Waiver.  No Advance of the
proceeds of the Loan shall constitute a waiver of any of the conditions of
Lender’s obligation to make further Advances, nor, in the event Borrower is
unable to satisfy any such condition, shall any such Advance have the effect of
precluding Lender from thereafter declaring such inability to be an Event of
Default.


 


3.5           Borrower’s
Deposit.  If at any time Lender shall
in its reasonable discretion deem that the undisbursed proceeds of the Loan
together with Borrower’s Equity contributions as required pursuant to Section 5.26
are insufficient to meet the costs of completing construction of the
Improvements, plus the costs of insurance, ad valorem taxes and other normal
costs of the Improvements, Lender may refuse to make any additional Advances to
Borrower hereunder until Borrower shall have deposited with Lender sufficient
additional funds (“Borrower’s Deposit”) or Borrower shall have received
additional equity to cover the deficiency which Lender reasonably deems to
exist.  Such Borrower’s Deposit will be
disbursed by Lender to Borrower pursuant to 


 


13

















 


the terms and conditions hereof as if they constituted a portion of the
Loan being made hereunder.  Pursuant to
the provisions of this paragraph, Borrower agrees upon fifteen (15) days’
written demand by Lender to deposit with Lender such Borrower’s Deposit.  Lender shall pay interest on Borrower’s
Deposit.


 


3.6           Advance
Not An Approval.  The making of any
Advance or part thereof shall not be deemed an approval or acceptance by Lender
of the work theretofore done.  Lender
shall have no obligation to make any Advance or part thereof after the
happening of any Event of Default, but shall have the right and option so to do;
provided that if Lender elects to make any such Advance, no such Advance shall
be deemed to be either a waiver of the right to demand payment of the Loan, or
any part thereof, or an obligation to make any other Advance.


 


3.7           Time
and Place of Advances.  All Advances
are to be made at the office of Lender, or at such other place as Lender may
designate; and Lender shall require at least five (5) days’ prior notice
in writing before the making of any such Advance.  Except as set forth in this Agreement, all
Advances are to be made by direct deposit into the Special Account.  In the event Borrower shall part with or be
in any manner whatever deprived of Borrower’s interests in and to the Land,
Lender may, at Lender’s option but without any obligation to do so, continue to
make Advances under this Agreement, and subject to all its terms and
conditions, to such person or persons as may succeed to Borrower’s title and
interest and all sums so disbursed shall be deemed Advances under this
Agreement and secured by the Deed of Trust and all other liens or security
interests securing the Loan.


 


3.8           Retainage.  An amount equal to ten percent (10%) of the
cost of construction of the Improvements to be constructed by any Contractor
providing services having a contract price of $100,000.00 or more shall be retained
by Lender (except no holdback shall be required for those items specified in Schedule 3.8)
and shall be paid over by Lender to Borrower, provided that no lien claims are
then filed against the Mortgaged Property (unless bonded around in a manner
satisfactory to Lender), when all of the following have occurred to the
satisfaction of Lender:


 


(a)            Lender
has received a completion certificate prepared by the Inspecting Person and
executed by Borrower and the Design Professional stating that the Improvements
have been completed in accordance with the Plans and Specifications, together
with such other evidence that no mechanics or materialmen’s liens or other
encumbrances have been filed (unless bonded around in a manner satisfactory to
Lender) and remain in effect against the Mortgaged Property and that all
offsite utilities and streets serving the Improvements have been completed to
the satisfaction of Lender and any applicable Governmental Authority;


 


(b)           each
applicable Governmental Authority shall have duly inspected and approved the
Improvements and issued the appropriate permit, license or certificate to
evidence such approval;


 


(c)           thirty
(30) days shall have elapsed from the date of completion of the improvements
which are the subject of the contract for which the retainage is being
withheld, as specified in Texas Property Code §53.106;


 


14

















 


(d)           receipt
by Lender of evidence satisfactory to Lender that payment in full has been made
for all obligations incurred in connection with the construction and completion
of all off-site utilities and improvements (if any) serving the
Improvements, if any, as required by Lender or any Governmental Authority; and


 


(e)           a final
lien waiver in a form acceptable to the Lender is exchanged for final payment.


 


3.9           No
Third Party Beneficiaries.  The
benefits of this Agreement shall not inure to any third party, nor shall this
Agreement be construed to make or render Lender liable to any materialmen,
subcontractors, contractors, laborers or others for goods and materials
supplied or work and labor furnished in connection with the construction of the
Improvements or for debts or claims accruing to any such persons or entities
against Borrower.  Lender shall not be
liable for the manner in which any Advances under this Agreement may be applied
by Borrower, Contractor and any of Borrower’s other contractors or
subcontractors.  Notwithstanding anything
contained in the Loan Documents, or any conduct or course of conduct by the
parties hereto, before or after signing the Loan Documents, this Agreement
shall not be construed as creating any rights, claims or causes of action
against Lender, or any of its officers, directors, agents or employees, in
favor of any contractor, subcontractor, supplier of labor or materials, or any
of their respective creditors, or any other person or entity other than
Borrower.  Without limiting the
generality of the foregoing, Advances made to any contractor, subcontractor or
supplier of labor or materials, pursuant to any requests for Advances, whether
or not such request is required to be approved by Borrower, shall not be deemed
a recognition by Lender of a third-party beneficiary status of any such person
or entity.


 


3.10         Extended
Maturity Date Options.  Notwithstanding anything to the contrary
contained herein or inferable from any provision of this Agreement, the Note
shall mature, and shall be immediately due and payable in full without the
necessity of any further action on the part of the Lender, on the Maturity
Date.  However, Borrower shall be
entitled to exercise the Extended Maturity Date Option, in which event the Note
shall mature on the Extended Maturity Date, and shall be immediately due and
payable in full without the necessity of any further action on the part of the
Lender, if, respectively, the following conditions are met:


 


(a)           The Loan
Documents shall be and remain outstanding and enforceable in accordance with
their terms, all as required hereunder, and no Event of Default has occurred or
is continuing (beyond any applicable grace or cure period) under this
Agreement, the Note, the Deed of Trust, or any other Loan Documents.


 


(b)           Lender
shall have received a title endorsement dated within thirty (30) days of
the Maturity Date from the Title Company showing no defects (other than
the Permitted Exceptions) and no claim for mechanics’ or materialmen’s liens
has been filed against the Mortgaged Property unless bonded around in a manner
satisfactory to Lender.


 


(c)           The
representations and warranties made by Borrower, as contained in this Agreement
and in all other Loan Documents shall be true and correct in all material 


 


15

















 


respects as of the
date of the Extended Maturity Date; and if requested by Lender, Borrower shall
give to Lender a certificate to that effect.


 


(d)           The
covenants made by Borrower to Lender, as contained in this Agreement and in all
other Loan Documents shall have been fully complied with in all material
respects.


 


(e)           The Improvements
shall not have been materially injured, damaged or destroyed by fire or other
uninsured casualty, nor shall any part of the Mortgaged Property be subject to
condemnation proceedings or negotiations for sale in lieu thereof.


 


(f)            Borrower
provides the Lender with final certificates of occupancy by the appropriate
Governmental Authority for the applicable portions of the Improvements and an
as-built survey of the Mortgaged Property reflecting that no portions of the
Improvements encroach upon any easement, setback or building line or
restrictions or overlap the property lines of the Land.


 


(g)           Thirty
(30) days prior to the Maturity Date, Borrower shall have delivered to the
Lender a written request establishing its entitlement to exercise the Extended Maturity
Date Option.


 


3.11         Note
Repayment.  In the event that the
Extended Maturity Date Option is exercised, the principal and interest accruing
on the Note shall be repayable in the manner provided therein.


 


ARTICLE IV


 


WARRANTIES AND
REPRESENTATIONS


 


Borrower hereby unconditionally warrants and
represents to Lender, as of the date hereof and at all times during the term of
this Agreement, as follows:


 


4.1           Plans
and Specifications.  To best of
Borrower’s knowledge, the Plans and Specifications are satisfactory to
Borrower, are in compliance with all Governmental Requirements and, to the
extent required by Governmental Requirements or any effective restrictive
covenant, have been approved by each Governmental Authority and/or by the
beneficiaries of any such restrictive covenant affecting the Mortgaged
Property.


 


4.2           Governmental
Requirements.  To best of Borrower’s
knowledge, no material violation of any Governmental Requirements exists or
will exist with respect to the Mortgaged Property and Borrower is not, and will
not be, in default with respect to any Governmental Requirements.


 


4.3           Municipal
Services.  All utilities, services
and facilities necessary for the construction of the Improvements and the use
thereof for their intended purposes are or will be timely available, as to
utilities (including, without limitation, potable water, storm and sanitary
sewer, gas, electric and telephone utilities), in sufficient size and capacity
either within or at the 


 


16

















 


boundaries of the Land for connection to the Improvements, and as to
other municipal services (including, without limitation, police and fire
protection, ambulance service, trash collection and cable television service),
same are or will be timely available for or at the Mortgaged Property.


 


4.4           Access.  All roads necessary for the full utilization
of the Improvements for their intended purposes have been completed and (i) have
been dedicated to the public use and accepted by the appropriate Governmental
Authority or (ii) are subject to private easements that are sufficient to
provide uninterrupted access.


 


4.5           Intentionally
Blank.


 


4.6           Financial
Statements.  Each financial statement
of Borrower delivered heretofore, concurrently herewith or hereafter to Lender
was and will be prepared in conformity with generally accepted accounting
principles, or other good accounting principles approved by Lender in writing,
applied on a basis consistent with that of previous statements and completely
and accurately disclose the financial condition of Borrower (including all
contingent liabilities) as of the date thereof and for the period covered
thereby, and there has been no material adverse change in Borrower’s financial
condition subsequent to the date of the most recent financial statement of
Borrower delivered to Lender.


 


4.7           Statements.  No certificate, statement, report or other
information delivered heretofore, concurrently herewith or hereafter by
Borrower to Lender in connection herewith, or in connection with any
transaction contemplated hereby, contains or will contain any untrue statement
of a material fact or fails to state any material fact necessary to keep the
statements contained therein from being misleading, and same were true,
complete and accurate as of the date hereof.


 


4.8           No
Proceedings.  There is no pending or
threatened litigation or proceeding affecting the Mortgaged Property or
Borrower not fully covered by insurance where the total potential liability may
exceed $250,000.00 in the aggregate.


 


4.9           Disclaimer
of Permanent Financing.  Borrower
acknowledges and agrees that Lender has not made any commitments, either
express or implied, to extend the term of the Loan (unless otherwise expressly
set forth herein) past its stated maturity date or to provide Borrower with any
permanent financing.


 


4.10         Solvency.  Borrower (i) is not insolvent, has not
been adjudicated insolvent or applied for the appointment of a trustee or
receiver of its business, estate or assets or any substantial part thereof, or any
of the Mortgaged Property, and (ii) has not commenced any liquidation,
reorganization, debt adjustment or other proceedings under any bankruptcy law
or other similar law for the relief of debtors. 
No such proceeding has been commenced against Borrower.  No receiver or similar officer has been
appointed for any of the Mortgaged Property or the estate of Borrower, and
Borrower has not made an assignment, statutory or otherwise, for the benefit of
creditors.  There has been no levy or
execution or any attachment or similar process against the interest of Borrower
in the Mortgaged Property.  Borrower has
not admitted in writing its inability to pay its debts as such debts
mature.  There are no outstanding liens,
suits, 


 


17

















 


garnishments or court actions pending against Borrower which would
result in the liquidation, termination or dissolution of Borrower or would
render Borrower bankrupt.


 


4.11         Business
Loan.  The Loan is a business loan
transaction in the stated amount solely for the purpose of carrying on the
business of Borrower and none of the proceeds of the Loan will be used for the
personal, family or agricultural purposes of Borrower.


 


4.12         Relationship.  The relationship between Borrower and Lender
is solely that of borrower and lender, and Lender has no fiduciary or other
special relationship with Borrower, and no term or condition of any of the Loan
Documents shall be construed so as to deem the relationship between Borrower
and Lender to be other than that of borrower and lender.


 


4.13         Intentionally
Blank.


 


4.14         Licenses;
Permits.  All licenses, permits,
easements and rights-of-way required by all Governmental Authorities and from
private parties, if any, having jurisdiction over the Mortgaged Property for
the construction of the Improvements as contemplated by the Loan Documents have
been or will be timely obtained.


 


4.15         No
Assignment.  Borrower has made no
previous assignment of its interest in the Plans and Specifications, the Design
Services Contract and the Construction Contract.


 


4.16         Compliance
with Laws.  Upon completion of
construction of the Improvements in accordance with the Plans and
Specifications, the Improvements will substantially comply with all applicable
laws, rules, governmental regulations and restrictive covenants, including,
without limitation, zoning laws, building codes, handicap or disability
legislation, and all rules, regulations and orders relating thereto, and
environmental matters, and the use to which Borrower is using and intends to
use the Mortgaged Property complies with or will comply with such laws, rules and
governmental regulations.  Borrower has
obtained or applied for and received or will receive timely all approvals for
the construction of the Improvements and use of the Mortgaged Property
necessary to comply with such laws, rules and governmental requirements.


 


ARTICLE V


 


COVENANTS OF BORROWER


 


Borrower hereby
unconditionally covenants and agrees with Lender, until the Loan shall have
been paid in full, as follows:


 


5.1           Completion.  Borrower will cause the construction of the
Improvements to be prosecuted with diligence and continuity and will complete
the same in accordance with the Plans and Specifications on or before the
Completion Date, free and clear of liens or claims for liens for material
supplied and for labor services performed in connection with the construction
of the Improvements unless bonded around in a manner satisfactory to Lender.


 


18
















 


5.2           No Changes.  Borrower will
not materially amend, alter or change (pursuant to change order, amendment or
otherwise) the Plans and Specifications unless the same shall have been
approved in advance in writing by Lender, by all applicable Governmental Authorities,
and by each surety under payment or performance bonds covering the Construction
Contract or any other contract for construction of all or a portion of the
Improvements.  Notwithstanding the
foregoing, Borrower shall be allowed to make changes in the Plans and
Specifications without obtaining Lender’s approval upon and subject to the
following conditions and requirements:


 


(i)            Any single change shall not increase the
cost of construction of the Improvements by more than $100,000.00.


 


(ii)           All changes, including the currently
requested change and all prior changes, shall not increase the cost of
construction of the Improvements, in the aggregate, by more than $250,000.00, unless a greater amount
is available as a result of savings under Section 2.5.


 


(iii)          Such change, by itself and when
considered with all prior changes, shall not, in Lender’s reasonable
discretion, cause or be likely to cause the Completion to occur after the
Completion Date.


 


(iv)          Any such change, or all changes in the
aggregate, shall not relate to any structural components of the Improvements
and shall not adversely affect, in Lender’s reasonable discretion, the
structural integrity, utility or appearance of the Improvements.


 


(v)           Borrower shall have deposited into
Borrower’s Deposit, sufficient funds to cover all costs associated with the
requested change and all increases in the cost of construction of the
Improvements anticipated by such changes, as determined by Lender in its
reasonable discretion, unless funds are available as a result of savings under Section 2.5.


 


5.3           Advances.  Borrower will
receive the Advances and will hold same as a trust fund for the purpose of
paying the cost of construction of the Improvements and related nonconstruction
costs related to the Mortgaged Property as provided for herein.  Borrower will apply the same promptly to the
payment of the costs and expenses for which each Advance is made and will not
use any part thereof for any other purpose.


 


5.4           Lender’s Expenses. 
Borrower will reimburse Lender for all reasonable out of pocket expenses
of Lender, including reasonable attorneys’ fees, reasonably and necessarily
incurred in connection with the preparation, execution, delivery,
administration and performance of the Loan Documents.


 


5.5           Surveys.  Borrower will
furnish Lender an as-built survey and, after any foundation has been poured of
the following buildings:  the office
building, the staff housing building and the repair shop, a foundation survey
of the foundation of such building, all at Borrower’s expense, and a survey
prepared by a registered engineer or surveyor acceptable to Lender, showing
that the locations of the Improvements, and certifying that same are entirely
within the property lines of the Land, do not encroach upon any easement, setback
or building line or restrictions, are placed in accordance with the Plans and
Specifications, all Governmental 


 


19

















 


Requirements and all restrictive covenants affecting the Land and/or
Improvements, and showing no state of facts (other than the Permitted
Exceptions) objectionable to Lender. All surveys shall be in form and substance
and from a registered public surveyor acceptable to Lender.


 


5.6           Defects and Variances. 
Borrower will, upon demand of Lender and at Borrower’s sole expense,
correct any structural defect in the Improvements or any variance from the
Plans and Specifications not approved in writing by Lender, except as otherwise
provided in Section 5.2, other than minor variations that do not
adversely affect the structural integrity or appearance of the Improvements.


 


5.7           Estoppel Certificates. 
Borrower will deliver to Lender, promptly after request therefor,
estoppel certificates or written statements, duly acknowledged, stating the amount
that has then been advanced to Borrower under this Agreement, the amount due on
the Note, and whether any offsets or defenses exist against the Note or any of
the other Loan Documents.


 


5.8           Inspecting Person. 
Borrower will pay the reasonable fees and expenses of, and cooperate
with, the Inspecting Person and will cause the Design Professional, the
Contractor, each contractor and subcontractor and the employees of each of them
to cooperate with the Inspecting Person and, upon request, will furnish the Inspecting
Person whatever the Inspecting Person may reasonably consider necessary or
useful in connection with the performance of the Inspecting Person’s
duties.  Without limiting the generality
of the foregoing, Borrower shall furnish or cause to be furnished such items as
working details, Plans and Specifications and details thereof, samples of
materials, licenses, permits, certificates of public authorities, zoning
ordinances, building codes and copies of the contracts between such person and
Borrower (if applicable).  Borrower will
permit Lender, the Inspecting Person and their representative to enter the
Mortgaged Property for the purposes of inspecting same.  Borrower acknowledges that the duties of the
Inspecting Person run solely to Lender and that the Inspecting Person shall
have no obligations or responsibilities whatsoever to Borrower, Contractor, the
Design Professional, or to any of Borrower’s or Contractor’s agents, employees,
contractors or subcontractors.


 


5.9           Brokers.  The fees,
commissions and other compensation payable to all brokers, if any, involved in
this transaction shall be paid by Borrower at or prior to the disbursement of
the Initial Advance.  Borrower hereby
agrees to indemnify and hold harmless Lender from and against any loss, damage,
expense or claims of brokers arising by reason of the execution hereof or the
consummation of the transactions contemplated hereby, including but not limited
to, any transactions involving or relating to any leases with respect to the
Mortgaged Property.


 


5.10         Personalty and Fixtures. 
Borrower will deliver to Lender, on demand, any contracts, bills of
sale, statements, receipted vouchers or agreements under which Borrower claims
title to any materials, fixtures or articles incorporated in the Improvements
or subject to the lien of the Deed of Trust or to the security interest of the
Security Agreement.


 


5.11         Compliance with Governmental Requirements. 
Borrower will comply promptly with all Governmental Requirements.


 


5.12         Compliance with Restrictive Covenants. 
Borrower will comply with all restrictive covenants, if any, affecting
the Mortgaged Property.  Construction of
the 


 


20

















 


Improvements will be performed in a good and workmanlike manner, within
the perimeter boundaries of the Land and within all applicable building and
setback lines in accordance with all Governmental Requirements and the Plans
and Specifications.  There are, and will
be, no structural defects in the Improvements.


 


5.13         Intentionally Omitted.


 


5.14         Affidavit of Completion. 
Borrower, within ten (10) days after construction of the
Improvements has been completed, shall file in the appropriate records in the
county in which the Land is situated an Affidavit of Completion (“Affidavit
of Completion”) in the form of Exhibit “C” attached hereto and
incorporated herein by this reference.


 


5.15         Payment of Expenses. 
Borrower shall pay or reimburse to Lender all costs and expenses
relating to the Mortgaged Property and for which an Advance is made, including
(without limitation), title insurance and examination charges, survey costs,
insurance premiums, filing and recording fees, and other expenses payable to
third parties incurred by Lender in connection with the consummation of the
transactions contemplated by this Agreement.


 


5.16         Notices Received. 
Borrower will promptly deliver to Lender a true and correct copy of all
notices received by Borrower from any person or entity with respect to
Borrower, the Mortgaged Property, or any or all of them, which would have a
Material Adverse Effect upon the Mortgaged Property.


 


5.17         Advertising by Lender. 
Subject to approval of applicable Governmental Authorities, Borrower
agrees that Lender may, at its sole cost, during the term of the Loan, erect
and thereafter maintain on the Mortgaged Property one or more advertising signs
furnished by Lender indicating that the financing for the Mortgaged Property
has been furnished by Lender.


 


5.18         Leases.  Borrower has
indicated it does not intend to lease any portion of the Mortgaged
Property.  Should Borrower elect to lease
any portion of the Mortgaged Property, Borrower will obtain the Lender’s prior
written approval of the terms and conditions of any lease or ground lease,
including the proposed tenant.  Borrower
will deliver to Lender executed counterparts of all leases and rental
agreements affecting the Mortgaged Property; and all said leases will contain a
written provision acceptable to Lender whereby all rights of the tenant in the
lease and the Mortgaged Property are subordinated to the liens and security
interests granted in the Loan Documents. 
Furthermore, if requested by Lender, Borrower shall cause to be executed
and delivered to Lender a Non-Disturbance, Attornment and Subordination
Agreement, in form and substance acceptable to Lender, relating to each such
lease and fully executed by Lender, Borrower and such lessee.


 


5.19         Intentionally Blank.


 


5.20         Delivery of Contracts. 
Borrower will deliver to Lender a copy of each Contract (as defined in
the Deed of Trust) promptly after the execution of same by all parties thereto.


 


21

















 


5.21         Financial Statements.


 


(a)           Borrower shall maintain full
and accurate books of accounts and other records reflecting Borrower’s
financial conditions and transactions, and shall furnish, or cause to be
furnished, to Lender:  (i) beginning
December 31, 2007 within one hundred twenty (120) days after the end of
each fiscal year of Borrower, and beginning with the calendar quarter ending December 31,
2007, within forty five (45) days of the end of each calendar quarter,
financial statements (which shall mean and include a balance sheet, statement
of cash flow and income statement for Borrower\, such reports to be in such
form and in reasonable detail as Lender may request, setting forth the
financial condition (including all contingent liabilities), cash flow and the
income and expenses for Borrower for the immediately preceding fiscal year) of
Borrower, prepared in accordance with generally accepted accounting principles
consistently applied, and which fairly present the financial condition and
transactions of Borrower as of the date thereof or for the period covered
thereby and in the case of the annual financial statements audited by a
certified public accountant acceptable to the Lender and containing no
qualifications and accompanied by a compliance certificate prepared by the
chief financial officer of Borrower certifying that, as of the date thereof,
there does or does not (as the case may be) exist an event which constitutes,
or which upon due notice or lapse of time or both would constitute an Event of
Default or, if an Event of Default exists specifying the nature thereof, and in
the case of the quarterly financial statements also accompanied by a
certificate of the chief financial officer of Borrower certifying that, as of
the date thereof, there does or does not (as the case may be) exist an event
which constitutes, or which upon due notice or lapse of time or both would constitute
an Event of Default or, if an Event of Default exists specifying the nature
thereof; (ii) a tax return for each fiscal year of Borrower from and after
the date hereof, as soon as available, but in any event no later than
forty-five (45) days after same has been filed with the Internal Revenue
Service, but in no event later than ninety (90) days after the end of each
fiscal year (provided, however, if Borrower shall have duly filed for an
extension of the filing deadline for such tax return, and promptly furnished
evidence thereof to Lender, then such tax return shall be delivered to Lender
on or before two hundred fifty-five (255) days after the end of such
fiscal year); and (iii) immediate notice of any material adverse changes
in the financial condition or business prospects of Borrower.  The fiscal year of Borrower ends on December 31.


 


5.22         Reserve for Taxes and Insurance Premiums. 
Upon the occurrence of, and during the continuation of an Event of
Default, Borrower shall pay to Lender on the first day of each month a monthly
escrow for taxes and insurance in an amount determined by Lender, in its
reasonable discretion, as being necessary to pay taxes and insurance premiums
with respect to the Mortgaged Property which next become due.  Such annual amounts of taxes or insurance
premiums shall be fully escrowed at least one (1) month prior to the due
date thereof in an interest bearing and segregated account.  Any excess reserve shall, at the discretion
of Lender, be credited by Lender on subsequent reserve payments or subsequent
payments to be made on the Note by the maker thereof.  In the event there exists a deficiency in
such fund or reserve at any time when ad valorem taxes or insurance premiums
are due and payable, Lender may, but shall not be obligated to, advance the
amount of such deficiency on behalf of Borrower and such amounts so advanced
shall become a part of the Indebtedness, shall be immediately due and 


 


22

















 


payable, and shall bear interest at the Default Rate (as defined in the
Note) from the date of such advance through and including the date of
repayment.  Transfer of legal title to
the Mortgaged Property pursuant to the Deed of Trust shall automatically
transfer to the holder of legal title to the Mortgaged Property the interest of
Borrower in all sums deposited with Lender under the provisions hereof or
otherwise.


 


(a)           During the continuation of an Event of
Default, the amount of the monthly tax escrow account payment shall be in the
amount as Lender shall from time to time reasonably determine based upon the
prior or current year’s ad valorem taxes for the Mortgaged Property.  The initial tax escrow payment shall be due
on the first day of the first calendar month after the date hereof, in the
amount of one-twelfth (1/12) of the ad valorem taxes assessed against the
Mortgaged Property for the current taxable year, if such taxes have been then
established, or otherwise based on the prior year’s taxes (with any adjustment
thereto as Lender may determine to be to appropriate), multiplied by a number
equal to twelve (12) less the number of whole months remaining until the
next calendar September 1st. 
Thereafter, the amount of the monthly ad valorem tax escrow payment
shall be one-twelfth (1/12th) of the ad valorem taxes estimated by Lender as
applicable for the then current tax year, as same may be adjusted by Lender
from time to time.  On or after October 1st
and on or before December 31st of each year, Borrower will deliver to
Lender a statement or statements showing the amount of such ad valorem taxes
required to be paid and the taxing authority to which same is payable.  Borrower will, at the same time, deposit with
Lender such additional amounts as will, when added to the amount of ad valorem
tax escrows previously deposited with Lender and then remaining available for
that purpose, be sufficient to pay such ad valorem tax obligations with respect
to the Mortgaged Property.  Upon delivery
by Borrower to Lender of such statements and such additional funds, if the same
is necessary, Lender shall apply such deposits in payment of such ad valorem
tax obligations.  Neither Lender nor
Borrower shall be required to pay or cause to be paid such ad valorem taxes
affecting the Mortgaged Property if the payment thereof is being contested by
Borrower in accordance with the applicable provisions of the Deed of Trust.


 


(b)           Upon the occurrence of an Event of
Default, on the first day of the first calendar month after the date thereof,
Borrower shall escrow with Lender an amount for insurance premiums equal to
one-twelfth (1/12) of the current annual cost of insurance premiums for
the insurance policies required pursuant to the Loan Documents, multiplied by a
number equal to twelve (12) less the number of whole months remaining
until thirty (30) days prior to the next annual payment date for such insurance
premiums.  Thereafter, the amount of the
monthly insurance premium escrow payment shall be one-twelfth (1/12) of
the current annual cost for insurance premiums on all insurance policies
required by the Loan Documents, as adjusted by Lender from time to time.  On or before one (1) month prior to the
due date for the next annual insurance premiums, Borrower shall deliver to
Lender the statement or invoice therefor, together with such additional funds
as will, when added to the amount of insurance premium previously escrowed with
Lender and then remaining available for such purpose, be sufficient to pay such
insurance premiums.  Upon delivery of
such statements and such additional funds, if the same is necessary, Lender
shall apply such deposits in payment of such insurance premiums.


 


23

















 


5.23         Equity Contribution. 
As a condition precedent to Lender’s obligation to disburse each Advance
of proceeds of the Loan, Borrower shall at the same time advance from the
Equity its proportionate share of the draw request.


 


5.24         Other Activities. 
Borrower shall not now or at any time until the Indebtedness has been
fully repaid and the Obligations have been fully satisfied or discharged own,
acquire, construct or operate or contract to own, acquire, construct or operate
any other commercial real estate properties, without Lender’s prior written
approval, which such approval shall be in Lender’s sole and absolute
discretion.


 


ARTICLE VI


 


ASSIGNMENTS


 


6.1           Assignment of Construction Contract. 
As additional security for the payment of the Loan, Borrower hereby
collaterally transfers and collaterally assigns to Lender all of Borrower’s
rights and interest, but not its obligations, in, under and to each
Construction Contract upon the following terms and conditions:


 


(a)           Borrower represents and warrants that the
copy of each Construction Contract Borrower has furnished or will furnish to Lender
is or will be (as applicable) a true and complete copy thereof, including
all amendments thereto, if any, and that Borrower’s interest therein is not
subject to any claim, setoff or encumbrance.


 


(b)           Neither this collateral assignment nor
any action by Lender shall constitute an assumption by Lender of any
obligations under any Construction Contract, and Borrower shall continue to be
liable for all obligations of Borrower thereunder, Borrower hereby agreeing to
perform all of its obligations under each Construction Contract.  Borrower agrees to indemnify and hold Lender
harmless against and from any loss, cost, liability or expense (including but
not limited to attorneys’ fees) resulting from any failure of Borrower to so
perform.


 


(c)           Upon the occurrence of an Event of
Default, Lender shall have the right at any time (but shall have no obligation)
to take in its name or in the name of Borrower such action as Lender may at any
time determine to be necessary or advisable to cure any default under any Construction
Contract or to protect the rights of Borrower or Lender thereunder.  Lender shall incur no liability if any action
so taken by it or in its behalf shall prove to be inadequate or invalid, and
Borrower agrees to indemnify and hold Lender harmless against and from any
loss, cost, liability or expense (including but not limited to reasonable
attorneys’ fees) incurred in connection with any such action, except for the
willful misconduct of Lender or Lender’s agents or employees.


 


(d)           Upon Event of Default, Borrower hereby
irrevocably constitutes and appoints Lender as Borrower’s attorney-in-fact, in
Borrower’s or Lender’s name, to enforce all rights of Borrower under each
Construction Contract.  Such appointment
is coupled with an interest and is therefore irrevocable.


 


24

















 


(e)           Prior to the occurrence of an Event of
Default, Borrower shall have the right to exercise its rights as owner under
each Construction Contract, provided that Borrower shall not cancel or amend
any Construction Contract or do or suffer to be done any act which would impair
the security constituted by this assignment without the prior written consent
of Lender, which consent shall not be unreasonably withheld, delayed or
conditioned.


 


(f)            This assignment shall inure to the
benefit of Lender and its successors and assigns, any purchaser upon
foreclosure of the Deed of Trust, any receiver in possession of the Mortgaged
Property and any corporation affiliated with Lender which assumes Lender’s
rights and obligations under this Agreement.


 


6.2           Assignment of Plans and Specifications. 
As additional security for the Loan, Borrower hereby collaterally
transfers and collaterally assigns to Lender all of Borrower’s right, title and
interest in and to the Plans and Specifications and hereby represents and
warrants to and agrees with Lender as follows:


 


(a)           Each schedule of the Plans and
Specifications delivered or to be delivered by Borrower to Lender is and shall
be a complete and accurate description of the Plans and Specifications.


 


(b)           The Plans and Specifications are and
shall be complete and adequate for the construction of the Improvements and
there have been no modifications thereof except as described in such
schedule.  Except as otherwise provided
in this Agreement, the Plans and Specifications shall not be modified without
the prior written consent of Lender, which consent shall not be unreasonably
withheld, delayed or conditioned.


 


(c)           Lender may use the Plans and
Specifications for any purpose relating to the Improvements, including but not
limited to inspections of construction and the completion of the Improvements.


 


(d)           Lender’s acceptance of this assignment
shall not constitute approval of the Plans and Specifications by Lender.  Lender has no liability or obligation in
connection with the Plans and Specifications and no responsibility for the
adequacy thereof or for the construction of the Improvements contemplated by
the Plans and Specifications.  Lender has
no duty to inspect the Improvements, and if Lender should inspect the
Improvements, Lender shall have no liability or obligation to Borrower or any
other party arising out of such inspection. 
No such inspection nor any failure by Lender to make objections after
any such inspection shall constitute a representation by Lender that the
Improvements are in accordance with the Plans and Specifications or any other
requirement or constitute a waiver of Lender’s right thereafter to insist that
the Improvements be constructed in accordance with the Plans and Specifications
or any other requirement.


 


(e)           This collateral assignment shall inure to
the benefit of Lender and its successors and assigns, any purchaser upon
foreclosure of the Deed of Trust, any receiver in possession of the Mortgaged
Property and any corporation affiliated with Lender which assumes Lender’s
rights and obligations under this Agreement.


 


25

















 


6.3           Assignment of Design Services Contract. 
As additional security for the payment of the Loan, Borrower hereby
collaterally transfers and collaterally assigns to Lender as security in the
Indebtedness all of Borrower’s rights and interest, but not its obligations,
in, under and to each Design Services Contract upon the following terms and
conditions:


 


(a)           Borrower represents and warrants that the
copy of each Design Services Contract Borrower has furnished or will furnish to
Lender is or will be (as applicable) a true and complete copy thereof,
including all amendments thereto, if any, and that Borrower’s interest therein
is not subject to any claim, setoff or encumbrance.


 


(b)           Neither this assignment nor any action by
Lender shall constitute an assumption by Lender of any obligations under any
Design Services Contract, and Borrower shall continue to be liable for all
obligations of Borrower thereunder, Borrower hereby agreeing to perform all of
its obligations under each Design Services Contract.  Borrower agrees to indemnify and hold Lender
harmless against and from any loss, cost, liability or expense (including but
not limited to attorneys’ fees) resulting from any failure of Borrower to so
perform.


 


(c)           Upon the occurrence of an Event of
Default, Lender shall have the right at any time (but shall have no obligation)
to take in its name or in the name of Borrower such action as Lender may at any
time determine to be necessary or advisable to cure any default under any
Design Services Contract or to protect the rights of Borrower or Lender
thereunder.  Lender shall incur no
liability if any action so taken by it or in its behalf shall prove to be
inadequate or invalid, and Borrower agrees to indemnify and hold Lender
harmless against and from any loss, cost, liability or expense (including but
not limited to reasonable attorneys’ fees) incurred in connection with any such
action, except the willful misconduct of Lender or Lender’s agents or
employees.


 


(d)           Borrower hereby irrevocably constitutes
and appoints Lender as Borrower’s attorney-in-fact, in Borrower’s or Lender’s
name, to enforce all rights of Borrower under each Design Services
Contract.  Such appointment is coupled
with an interest and is therefore irrevocable.


 


(e)           Prior to the occurrence of an Event of
Default, Borrower shall have the right to exercise its rights as owner under
each Design Services Contract, provided that Borrower shall not cancel or amend
any Design Services Contract or do or suffer to be done any act which would
impair the security constituted by this assignment without the prior written
consent of Lender, which consent shall not be unreasonably withheld, delayed or
conditioned.


 


(f)            This collateral assignment shall inure to
the benefit of Lender and its successors and assigns, any purchaser upon
foreclosure of the Deed of Trust, any receiver in possession of the Mortgaged
Property and any corporation affiliated with Lender which assumes Lender’s
rights and obligations under this Agreement.


 


26

















 


ARTICLE VII


 


EVENTS OF DEFAULT


 


7.1           Events of Default.  Each of the
following shall constitute an “Event of Default” hereunder:


 


(a)           Borrower shall fail, refuse, or neglect
to pay, in full, (i) any installment or portion of the Indebtedness within
two (2) days from the date the Lender gives Borrower notice of such non-payment,
or (ii) the Indebtedness at maturity, whether at the due date thereof
stipulated in the Loan Documents, upon acceleration or otherwise;


 


(b)           Borrower shall fail, refuse or neglect,
or cause others to fail, refuse, or neglect to comply with, perform and
discharge fully and timely any of the Obligations as and when called for, and
such failure, refusal, or neglect shall continue for thirty (30) days after
notice thereof is provided to Borrower;


 


(c)           Any representation, warranty, or
statement made by Borrower, or others in, under, or pursuant to the Loan
Documents or any affidavit or other instrument executed or delivered with
respect to the Loan Documents or the Indebtedness is determined by Lender to be
false or misleading in any material respect as of the date hereof or thereof or
shall become so at any time prior to the repayment in full of the Indebtedness
and Borrower or others fail and refuse to cause such representation, warranty
or statement to be made true within thirty (30) days of the date of notice
of such failure is provided to Borrower or other party, but if such
representation, warranty or statement cannot with reasonable diligence be made
true within such thirty (30) days, and Borrower or other party is
diligently attempting to cause such representation, warranty or other statement
to be made true, then within such additional time as may be necessary to cause
such statement to be made true, so long as diligence in pursuing such remedy is
followed but in no event beyond sixty (60) days of notice;


 


(d)           Borrower shall commit an event of
default, as defined therein, after notice and opportunity to cure under and
pursuant to any other mortgage or security agreement which covers or affects
any part of the Mortgaged Property;


 


(e)           Borrower (i) shall execute an
assignment for the benefit of creditors or an admission in writing by Borrower
of Borrower’s inability to pay, or Borrower’s failure to pay, debts generally
as the debts become due; or (ii) shall allow the levy against the
Mortgaged Property or any part thereof, of any execution, attachment,
sequestration or other writ which is not vacated within sixty days after the
levy; or (iii) shall allow the appointment of a receiver, trustee or
custodian of Borrower or of the Mortgaged Property or any part thereof, which
receiver, trustee or custodian is not discharged within sixty (60) days after
the appointment; or (iv) files as a debtor a petition, case, proceeding or
other action pursuant to, or voluntarily seeks the benefit or benefits of any
Debtor Relief Law (as defined in the Deed of Trust), or takes any action in
furtherance thereof; or (v) files either a petition, complaint, answer or
other instrument which seeks to effect a suspension of, or which has the effect
of suspending any of the rights or powers of 


 


27

















 


Lender or the
trustee under the Deed of Trust granted in the Note, herein or in any Loan
Document; or (vi) allows the filing of a petition, case, proceeding or
other action against Borrower as a debtor under any Debtor Relief Law or seeks
appointment of a receiver, trustee, custodian or liquidator of Borrower or of
the Mortgaged Property, or any part thereof, or of any significant portion of
Borrower’s other property; and (a) Borrower admits, acquiesces in or fails
to contest diligently the material allegations thereof, or (b) the
petition, case, proceeding or other action results in the entry of an order for
relief or order granting the relief sought against Borrower, or (c) the
petition, case, proceeding or other action is not permanently dismissed or
discharged on or before the earlier of trial thereon or sixty (60) days next
following the date of filing;


 


(f)            Global or any Constituent Party (as
defined in the Deed of Trust) shall die, dissolve, terminate or liquidate, or
merge with or be consolidated into any other entity;


 


(g)           Global creates, places, or permits to be
created or placed, or through any act or failure to act, acquiesces in the
placing of, or allows to remain, any Subordinate Mortgage (as defined in the
Deed of Trust), regardless of whether such Subordinate Mortgage is expressly
subordinate to the liens or security interests of the Loan Documents, with
respect to the Mortgaged Property, other than the Permitted Exceptions (as defined
in the Deed of Trust);


 


(h)           Borrower makes a Disposition (as defined
in the Deed of Trust), without the prior written consent of Lender;


 


(i)            Any condemnation proceeding is instituted
or threatened which would, in Lender’s reasonable judgment, materially impair
the use and enjoyment of the Mortgaged Property for its intended purposes;


 


(j)            The Mortgaged Property is demolished,
destroyed, or substantially damaged so that, in Lender’s reasonable judgment,
it cannot be restored or rebuilt with available funds to the condition existing
immediately prior to such demolition, destruction, or damage within a
reasonable period of time;


 


(k)           Global abandons all or any portion of the
Mortgaged Property;


 


(l)            The occurrence of any event referred to
in Sections 7.1(e) and (f) hereof with respect to any
Constituent Party or other person or entity obligated in any manner to pay or
perform the Indebtedness or Obligations, respectively, or any part thereof (as
if such Constituent Party or other person or entity were “Borrower” in such
Sections);


 


(m)          An Event of Default as defined in any of
the Loan Documents occurs and continues beyond any applicable cure or grace
period;


 


(n)           The construction of the Improvements are,
at any time, (i) discontinued due to acts or matters within Borrower’s
control for a period of thirty (30) or more consecutive days, (ii) not
carried on with reasonable dispatch, or (iii) not completed by the
Completion Date;


 


28
















 


(o)           Borrower
is unable to satisfy any condition of Borrower’s right to receive Advances
hereunder for a period in excess of thirty (30) days after Lender’s reasonable
refusal to make any further Advances, but if such obligation cannot with
reasonable diligence be cured within such thirty (30) days, and Borrower is
diligently attempting such cure, then within such additional time as may be
necessary to effect such cure so long as diligence in pursuing such cure is
followed;


 


(p)           Borrower
executes any conditional bill of sale, chattel mortgage or other security
instrument covering any materials, fixtures or articles intended to be
incorporated in the Improvements or the appurtenances thereto, or covering
articles of personal property placed in the Improvements, or files a financing
statement publishing notice of such security instrument, or if any of such
materials, fixtures or articles are not purchased in such a manner that the
ownership thereof vests unconditionally in Borrower, free from encumbrances, on
delivery at the Land, or if Borrower does not produce to Lender upon reasonable
demand the contracts, bills of sale, statements, receipted vouchers or
agreements, or any of them, under which Borrower claims title to such
materials, fixtures and articles; or


 


(q)           Any levy,
attachment or garnishment is issued, or if any lien for the performance of work
or the supply of materials is filed, against any part of the Mortgaged Property
and remains unsatisfied or unbonded following thirty (30) days after the date
Borrower is notified of filing thereof.


 


7.2           Remedies.  Lender shall have the right, upon the
happening and continuance of an Event of Default beyond any applicable notice
and cure period, in addition to any rights or remedies available to it under
all other Loan Documents, to enter into possession of the Mortgaged Property
and perform any and all work and labor necessary to complete the Improvements
in accordance with the Plans and Specifications.  All amounts so expended by Lender shall be
deemed to have been disbursed to Borrower as Loan proceeds and secured by the
Deed of Trust.  For this purpose,
Borrower hereby constitutes and appoints (which appointment is coupled with an
interest and is therefore irrevocable) Lender as Borrower’s true and
lawful attorney-in-fact, with full power of substitution to complete the
Improvements in the name of Borrower, and hereby empowers Lender, acting as
Borrower’s attorney-in-fact, as follows: 
to use any funds of Borrower, including any balance which may be held in
escrow, any Borrower’s Deposit and any funds which may remain unadvanced
hereunder, for the purpose of completing the Improvements in the manner called
for by the Plans and Specifications; to make such additions and changes and
corrections in the Plans and Specifications which shall be necessary to
complete the Improvements in the manner contemplated by the Plans and
Specifications; to continue all or any existing construction contracts or
subcontracts; to employ such contractors, subcontractors, agents, design professionals
and inspectors as shall be required for said purposes; to pay, settle or
compromise all existing bills and claims which are or may be liens against the
Mortgaged Property, or may be necessary for the completion of the work or the
clearing of title; to execute all the applications and certificates in the name
of Borrower which may be required by any construction contract; and to do any
and every act with respect to the construction of the Improvements which
Borrower could do in Borrower’s own behalf. 
Lender, acting as Borrower’s attorney-in-fact, shall also have power to
prosecute and defend all actions or proceedings in 


 


29

















 


connection with the Mortgaged Property and to take such action and require
such performance as is deemed necessary.


 


ARTICLE VIII


 


LENDER’S DISCLAIMERS - BORROWER’S INDEMNITIES


 


8.1           No
Obligation by Lender to Construct. 
Lender has no liability or obligation whatsoever or howsoever in
connection with the Mortgaged Property or the development, construction or
completion thereof or work performed thereon, and has no obligation except to
disburse the Loan proceeds as herein agreed. 
Lender is not obligated to inspect the Improvements nor is Lender
liable, and under no circumstances whatsoever shall Lender be or become liable,
for the performance or default of any contractor or subcontractor, or for any
failure to construct, complete, protect or insure the Mortgaged Property, or
any part thereof, or for the payment of any cost or expense incurred in
connection therewith, or for the performance or nonperformance of any
obligation of Borrower to Lender nor to any other person, firm or entity
without limitation.  Nothing, including
without limitation any disbursement of Loan proceeds or Borrower’s Deposit nor
acceptance of any document or instrument, shall be construed as such a
representation or warranty, express or implied, on Lender’s part.


 


8.2           No
Obligation by Lender to Operate.  Any
term or condition of any of the Loan Documents to the contrary notwithstanding,
Lender shall not have, and by its execution and acceptance of this Agreement
hereby expressly disclaims, any obligation or responsibility for the
management, conduct or operation of the business and affairs of Borrower.  Any term or condition of the Loan Documents
which permits Lender to disburse funds, whether from the proceeds of the Loan,
Borrower’s Deposit or otherwise, or to take or refrain from taking any action
with respect to Borrower, the Mortgaged Property or any other collateral for
repayment of the Loan, shall be deemed to be solely to permit Lender to audit
and review the management, operation and conduct of the business and affairs of
Borrower and to maintain and preserve the security given by Borrower to Lender
for the Loan, and may not be relied upon by any other person.  Further, Lender shall not have, has not
assumed and by its execution and acceptance of this Agreement hereby expressly
disclaims any liability or responsibility for the payment or performance of any
indebtedness or obligation of Borrower and no term or condition of the Loan
Documents, shall be construed otherwise. 
Borrower hereby expressly acknowledges that no term or condition of the
Loan Documents shall be construed so as to deem the relationship between
Borrower and Lender to be other than that of borrower and lender, and Borrower
shall at all times represent that the relationship between Borrower and Lender
is solely that of borrower and lender.  Borrower
hereby indemnifies and agrees to hold Lender harmless from and against any
cost, expense or liability incurred or suffered by Lender as a result of any
assertion or claim of any obligation or responsibility of Lender for the
management, operation and conduct of the business and affairs of Borrower or as
a result of any assertion or claim of any liability or responsibility of Lender
for the payment or performance of any indebtedness or obligation of Borrower.


 


8.3           INDEMNITY BY BORROWER.  BORROWER HEREBY INDEMNIFIES
LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS, 


 


30

















 


DIRECTORS, EMPLOYEES, AND AGENTS (THE “INDEMNIFIED
PARTIES”) FROM, AND HOLDS EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES,
LIABILITIES, CLAIMS, DAMAGES, COSTS, AND EXPENSES TO WHICH ANY OF THEM MAY BECOME
SUBJECT, INSOFAR AS SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES, COSTS, AND
EXPENSES ARISE FROM OR RELATE TO ANY OF THE LOAN DOCUMENTS OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREBY OR FROM ANY INVESTIGATION, LITIGATION, OR
OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING.  WITHOUT INTENDING TO LIMIT THE REMEDIES
AVAILABLE TO LENDER WITH RESPECT TO THE ENFORCEMENT OF ITS INDEMNIFICATION
RIGHTS AS STATED HEREIN OR AS STATED IN ANY LOAN DOCUMENT, IN THE EVENT ANY
CLAIM OR DEMAND IS MADE OR ANY OTHER FACT COMES TO THE ATTENTION OF LENDER IN
CONNECTION WITH, RELATING OR PERTAINING TO, OR ARISING OUT OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT, WHICH LENDER REASONABLY BELIEVES MIGHT INVOLVE OR LEAD TO
SOME LIABILITY OF LENDER, BORROWER SHALL, IMMEDIATELY UPON RECEIPT OF WRITTEN
NOTIFICATION OF ANY SUCH CLAIM OR DEMAND, ASSUME IN FULL THE PERSONAL
RESPONSIBILITY FOR AND THE DEFENSE OF ANY SUCH CLAIM OR DEMAND AND PAY IN
CONNECTION THEREWITH ANY LOSS, DAMAGE, DEFICIENCY, LIABILITY OR OBLIGATION,
INCLUDING, WITHOUT LIMITATION, LEGAL FEES AND COURT COSTS INCURRED IN
CONNECTION THEREWITH.  IN THE EVENT OF
COURT ACTION IN CONNECTION WITH ANY SUCH CLAIM OR DEMAND, BORROWER SHALL ASSUME
IN FULL THE RESPONSIBILITY FOR THE DEFENSE OF ANY SUCH ACTION AND SHALL
IMMEDIATELY SATISFY AND DISCHARGE ANY FINAL DECREE OR JUDGMENT RENDERED
THEREIN.  LENDER MAY, IN ITS REASONABLE
DISCRETION, MAKE ANY PAYMENTS SUSTAINED OR INCURRED BY REASON OF ANY OF THE
FOREGOING; AND BORROWER SHALL IMMEDIATELY REPAY TO LENDER, IN CASH AND NOT WITH
PROCEEDS OF THE LOAN, THE AMOUNT OF SUCH PAYMENT, WITH INTEREST THEREON AT THE
MAXIMUM RATE OF INTEREST PERMITTED BY APPLICABLE LAW FROM THE DATE OF SUCH
PAYMENT.  LENDER SHALL HAVE THE RIGHT TO
JOIN BORROWER AS A PARTY DEFENDANT IN ANY LEGAL ACTION BROUGHT AGAINST LENDER,
AND BORROWER HEREBY CONSENTS TO THE ENTRY OF AN ORDER MAKING BORROWER A PARTY
DEFENDANT TO ANY SUCH ACTION.


 


NOTWITHSTANDING THE FOREGOING, BORROWER SHALL HAVE
NO OBLIGATION TO REIMBURSE ANY MEMBER OF THE INDEMNIFIED PARTIES FOR DAMAGES,
INCLUDING ATTORNEYS’ FEES AND EXPENSES, IN ANY ACTION WHERE THERE IS A FINAL,
NON-APPEALABLE JUDGMENT IMPOSING UPON THE INDEMNIFIED PARTY LIABILITY FOR ACTS
OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.


 


8.4           No
Agency.  Nothing herein shall be
construed as making or constituting Lender as the agent of Borrower in making
payments pursuant to any construction contracts or 


 


31

















 


subcontracts entered into by Borrower for construction of the
Improvements or otherwise.  The purpose
of all requirements of Lender hereunder is solely to allow Lender to check and
require documentation (including, but not limited to, lien waivers) sufficient
to protect Lender and the Loan contemplated hereby.  Borrower shall have no right to rely on any
procedures required by Lender, Borrower whereby acknowledging that Borrower has
sole responsibility for constructing the Improvements and paying for work done
in accordance therewith and that Borrower has solely, on Borrower’s own behalf,
selected or approved each contractor, each subcontractor and each materialman,
Lender having no responsibility for any such persons or entities or for the
quality of their materials or workmanship.


 


ARTICLE IX


 


MISCELLANEOUS


 


9.1           Successors
and Assigns.  This Agreement shall be
binding upon, and shall inure to the benefit of, Borrower and Lender, and their
respective heirs, legal representatives, successors and assigns; provided,
however, that Borrower may not assign any rights or obligations under this
Agreement without the prior written consent of Lender.


 


9.2           Headings.  The Article, Section, and
Subsection entitlements hereof are inserted for convenience of reference
only and shall in no way alter, modify, define or be used in construing the
text of such Articles, Sections or Subsections.


 


9.3           Survival.  The provisions hereof shall survive the
execution of all instruments herein mentioned, shall continue in full force and
effect until the Loan has been paid in full and shall not be affected by any
investigation made by any party.


 


9.4           APPLICABLE
LAW.  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.  COURTS WITHIN THE STATE OF TEXAS SHALL HAVE
JURISDICTION OVER ANY AND ALL DISPUTES BETWEEN BORROWER AND LENDER, WHETHER IN
LAW OR EQUITY, INCLUDING, BUT NOT LIMITED TO, ANY AND ALL DISPUTES ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT; AND VENUE IN ANY
SUCH DISPUTE WHETHER IN FEDERAL OR STATE COURT SHALL BE LAID IN HARRIS COUNTY,
TEXAS.


 


9.5           Notices.  All notices or other communications required
or permitted to be given pursuant to this Agreement shall be in writing and
shall be considered as properly given if (i) mailed by first class United
States mail, postage prepaid, registered or certified with return receipt
requested, (ii) by delivering same in person to the intended addressee, or
(iii) by delivery to an independent third party commercial delivery
service for same day or next day delivery and providing for evidence of receipt
at the office of the intended addressee. 
Notice so mailed shall be effective upon its deposit with the United
States Postal Service or any successor thereto; notice sent by such a
commercial delivery service shall be effective upon delivery to such commercial
delivery service; notice given by personal delivery shall be effective only if
and 


 


32

















 


when received by the addressee; and notice given by other means shall
be effective only if and when received at the designated address of the
intended addressee.  For purposes of
notice, the addresses of the parties shall be as set forth on page 1 of
this Agreement; provided, however, that either party shall have the right to
change its address for notice hereunder to any other location within the
continental United States by the giving of thirty (30) days’ notice to the
other party in the manner set forth herein.


 


9.6           Reliance
by Lender.  Lender is relying and is
entitled to rely upon each and all of the provisions of this Agreement; and
accordingly, if any provision or provisions of this Agreement should be held to
be invalid or ineffective, then all other provisions hereof shall continue in
full force and effect notwithstanding.


 


9.7           Participations.  Lender shall have the right at any time and
from time to time to grant participations in the Loan and Loan Documents.  Each participant shall be entitled to receive
all information received by Lender regarding the creditworthiness of Borrower,
any of its principals and any guarantor (if any), including (without
limitation) information required to be disclosed to a participant pursuant to
Banking Circular 181 (Rev., August 2, 1984), issued by the Comptroller of
the Currency (whether the participant is subject to the circular or not).  Notwithstanding the above, Lender expressly
agrees not to grant participations to Southern National Bank in the Loan and
Loan Documents.


 


9.8           Interest
Provisions.


 


(a)           Savings
Clause.  It is expressly stipulated
and agreed to be the intent of Borrower and Lender at all times to comply
strictly with the applicable Texas law governing the maximum rate or amount of
interest payable on the Note or the Related Indebtedness (or applicable United
States federal law to the extent that it permits Lender to contract for,
charge, take, reserve or receive a greater amount of interest than under Texas
law).  If the applicable law is ever
judicially interpreted so as to render usurious any amount (i) contracted
for, charged, taken, reserved or received pursuant to the Note, any of the
other Loan Documents or any other communication or writing by or between
Borrower and Lender related to the transaction or transactions that are the
subject matter of the Loan Documents, (ii) contracted for, charged or
received by reason of Lender’s exercise of the option to accelerate the
maturity of the Note and/or the Related Indebtedness, or (iii) Borrower
will have paid or Lender will have received by reason of any voluntary
prepayment by Borrower of the Note and/or the Related Indebtedness, then it is
Borrower’s and Lender’s express intent that all amounts charged in excess of
the Maximum Lawful Rate shall be automatically cancelled, ab initio, and
all amounts in excess of the Maximum Lawful Rate theretofore collected by
Lender shall be credited on the principal balance of the Note and/or the
Related Indebtedness (or, if the Note and all Related Indebtedness have been or
would thereby be paid in full, refunded to Borrower), and the provisions of the
Note and the other Loan Documents immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder and thereunder; provided, however, if the Note
has been paid in full before the end of the stated term of the Note, then
Borrower and Lender agree that Lender shall, 


 


33

















 


with reasonable
promptness after Lender discovers or is advised by Borrower that interest was
received in an amount in excess of the Maximum Lawful Rate, either refund such
excess interest to Borrower and/or credit such excess interest against the Note
and/or any Related Indebtedness then owing by Borrower to Lender.  Borrower hereby agrees that as a condition
precedent to any claim seeking usury penalties against Lender, Borrower will
provide written notice to Lender, advising Lender in reasonable detail of the
nature and amount of the violation, and Lender shall have sixty (60) days after
receipt of such notice in which to correct such usury violation, if any, by
either refunding such excess interest to Borrower or crediting such excess
interest against the Note and/or the Related Indebtedness then owing by Borrower
to Lender.  All sums contracted for,
charged or received by Lender for the use, forbearance or detention of any debt
evidenced by the Note and/or the Related Indebtedness shall, to the extent
permitted by applicable law, be amortized or spread, using the actuarial
method, throughout the stated term of the Note and/or the Related Indebtedness
(including any and all renewal and extension periods) until payment in full so
that the rate or amount of interest on account of the Note and/or the Related Indebtedness
does not exceed the Maximum Lawful Rate from time to time in effect and
applicable to the Note and/or the Related Indebtedness for so long as debt is
outstanding.  In no event shall the
provisions of Chapter 346 of the Texas Finance Code (which regulates
certain revolving credit loan accounts and revolving triparty accounts) apply
to the Note and/or the Related Indebtedness. 
Notwithstanding anything to the contrary contained herein or in any of
the other Loan Documents, it is not the intention of Lender to accelerate the
maturity of any interest that has not accrued at the time of such acceleration
or to collect unearned interest at the time of such acceleration.


 


(b)           Definitions.  As used herein, the term “Maximum Lawful
Rate” shall mean the maximum lawful rate of interest which may be
contracted for, charged, taken, received or reserved by Lender in accordance
with the applicable laws of the State of Texas (or applicable United States
federal law to the extent that it permits Lender to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law), taking
into account all Charges (as herein defined) made in connection with the
transaction evidenced by the Note and the other Loan Documents.  As used herein, the term “Charges”
shall mean all fees, charges and/or any other things of value, if any,
contracted for, charged, received, taken or reserved by Lender in connection
with the transactions relating to the Note and the other Loan Documents, which
are treated as interest under applicable law. 
As used herein, the term “Related Indebtedness” shall mean any
and all debt paid or payable by Borrower to Lender pursuant to the Loan
Documents or any other communication or writing by or between Borrower and
Lender related to the transaction or transactions that are the subject matter
of the Loan Documents, except such debt which has been paid or is payable by
Borrower to Lender under the Note.


 


(c)           Ceiling
Election.  To the extent that Lender
is relying on Chapter 303 of the Texas Finance Code to determine the
Maximum Lawful Rate payable on the Note and/or the Related Indebtedness, Lender
will utilize the weekly ceiling from time to time in effect as provided in such
Chapter 303, as amended.  To the
extent United States federal law permits Lender to contract for, charge, take,
receive or reserve a greater amount of interest than under Texas law, Lender
will rely on United States federal law 


 


34

















 


instead of such
Chapter 303 for the purpose of determining the Maximum Lawful Rate.  Additionally, to the extent permitted by
applicable law now or hereafter in effect, Lender may, at its option and from
time to time, utilize any other method of establishing the Maximum Lawful Rate
under such Chapter 303 or under other applicable law by giving notice, if
required, to Borrower as provided by applicable law now or hereafter in effect.


 


9.9           Controlling
Document.  In the event of a conflict
between the terms and conditions of this Agreement and the terms and conditions
of any other Loan Document, the terms and conditions of this Agreement shall
control.


 


9.10         Counterparts.  To facilitate execution, this instrument may
be executed in as many counterparts as may be convenient or required.  It shall not be necessary that the signature
of, or on behalf of, each party, or that the signature of all persons required
to bind any party, appear on each counterpart. 
All counterparts shall collectively constitute a single instrument.  It shall not be necessary in making proof of
this instrument to produce or account for more than a single counterpart
containing the respective signatures of, or on behalf of, each of the parties
hereto.  Any signature page to any
counterpart may be detached from such counterpart without impairing the legal
effect of the signatures thereon and thereafter attached to another counterpart
identical thereto except having attached to it additional signature pages.


 


9.11         Waiver
of Right to Trial by Jury.  BORROWER
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM THAT RELATES TO OR ARISES OUT OF ANY
OF THE LOAN DOCUMENTS OR THE ACTS OR FAILURE TO ACT OF OR BY LENDER IN THE
ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS AGREEMENT OR THE OTHER
LOAN DOCUMENTS.


 


9.12         WAIVER OF CONSUMER RIGHTS.  BORROWER HEREBY WAIVES BORROWER’S
RIGHTS UNDER THE PROVISIONS OF CHAPTER 17, SUBCHAPTER E, SECTION 17.41
THROUGH 17.63 INCLUSIVE OF THE TEXAS BUSINESS AND COMMERCE CODE, GENERALLY
KNOWN AS THE “DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT,” A LAW THAT
GIVES CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. 
AFTER CONSULTATION WITH AN ATTORNEY OF BORROWER’S OWN SELECTION,
BORROWER VOLUNTARILY CONSENTS TO THIS WAIVER. 
IT IS THE INTENT OF LENDER AND BORROWER THAT THE RIGHTS AND REMEDIES
WITH RESPECT TO THIS TRANSACTION SHALL BE GOVERNED BY LEGAL PRINCIPLES OTHER
THAN THE TEXAS DECEPTIVE TRADE PRACTICES-CONSUMER PROTECTION ACT.  THE WAIVER SET FORTH HEREIN SHALL EXPRESSLY
SURVIVE THE TERMINATION OF THE REFERENCED TRANSACTION.  BORROWER REPRESENTS AND WARRANTS TO LENDER
THAT BORROWER (I) IS A BUSINESS CONSUMER, (II) HAS KNOWLEDGE AND
EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS THAT ENABLE BORROWER TO EVALUATE
THE MERITS AND RISKS OF THE SUBJECT TRANSACTION, (III) IS NOT IN A
SIGNIFICANTLY DISPARATE BARGAINING POSITION WITH RESPECT TO THE SUBJECT
TRANSACTION, AND (IV) HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL
(WHO WAS NOT, DIRECTLY OR INDIRECTLY, IDENTIFIED, 


 


35

















 


SUGGESTED OR SELECTED BY LENDER OR LENDER’S
AGENTS) IN CONNECTION WITH THE REFERENCED TRANSACTION.


 


9.13         ENTIRE
AGREEMENT.  THIS LOAN AGREEMENT
AND THE OTHER LOAN DOCUMENTS REPRESENT 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 UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.  THIS INSTRUMENT MAY BE AMENDED ONLY BY
AN INSTRUMENT IN WRITING EXECUTED BY THE PARTIES HERETO.


 


[Signature Page Follows]


 


36

















 


IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.


 


	
   

  	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CITIBANK, N.A.,

  	
   

  
	
   

  	
   

  	
  a national banking association

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Joey Powell

  	
   

  
	
   

  	
   

  	
  Relationship Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NOTICE OF INDEMNIFICATION: 

  	
   

  	
  GLOBAL: 

  	
    

  
	
   

  	
   

  	
   

  	
   

  
	
  GLOBAL HEREBY ACKNOWLEDGES AND AGREES THAT THIS
  AGREEMENT CONTAINS CERTAIN INDEMNIFICATION PROVISIONS PURSUANT TO SECTION 8.3
  HEREOF.

  	
   

  	
   

  GLOBAL GEOPHYSICAL SERVICES, INC.,
  a 

  Delaware corporation, d/b/a GGS Seismic, Inc.

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Craig Lindberg

  
	
   

  	
   

  	
  Senior Vice President, CFO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BORROWER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GLOBAL GEOPHYSICAL SERVICES, INC.,
  a 

  Delaware corporation, d/b/a GGS Seismic, Inc.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Craig Lindberg

  	
   

  
	
   

  	
   

  	
  Senior Vice President, CFO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GGS INTERNATIONAL HOLDINGS,
  INC., a 

  Texas corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Craig Lindberg 

  	
   

  
	
   

  	
   

  	
  Senior Vice President, CFO

  
					



 

















 


	
   

  	
   

  	
  AUTOSEIS, INC., 

  a Texas corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Craig Lindberg

  	
   

  
	
   

  	
   

  	
  Senior Vice President, CFO

  	
   

  
					



 


List of
Attachments:


 


Schedule of
Definitions

Exhibit “A” - Land Description

Exhibit “B” - Budget

Exhibit “C” - Affidavit of Completion


Schedule 3.8
– Exception from retainage


Annex I – Interest
Rate Options


 

















 


SCHEDULE OF DEFINITIONS


 


	
  I.

  	
   

  	
  Definitions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Commencement Date:

  	
   

  	
  Work commenced prior to the date hereof.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Origination Fee:

  	
   

  	
  $18,750.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Completion Date:

  	
   

  	
  The date which is twelve (12) months after the effective
  date of this Agreement. Subject to strikes, lockouts, labor troubles, failure
  of power, riots, insurrection, war, shortages of labor, materials or
  equipment, inclement weather, delays in obtaining insurance or condemnation
  proceeds, acts of God or other reasons of like nature beyond Borrower’s
  control.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Improvements:

  	
   

  	
  Construction of a
  Global’s company headquarters in Fort Bend County, Texas.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Loan Amount:

  	
   

  	
  $7,500,000.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Contractor:

  	
   

  	
  The Borrower has provided the Lender the names of
  each of the contractors who are providing the services on the attached list
  where services provided are for $100,000.00 or more.

  



 

















 


	
  Slabs & Panels &
  Paving

  	
  $1.529 million

  	
   

  
	
  Stabilized, Site Work, &
  Yard

  	
  $275k

  	
   

  
	
  Structural Steel Fab

  	
  $700k

  	
  a material vendor –not
  going to do any 10% retainage-30 to 40 days terms

  
	
  LBM Steel Fab &
  Roof B & C

  	
  $298k

  	
  “same”

  
	
  New Concept
  Construction

  	
  $75k

  	
   

  
	
  Spiral Stairs

  	
  $100k+

  	
   

  
	
  Erector

  	
  $232k

  	
   

  
	
  Roofing

  	
  $210k

  	
   

  
	
  Other Roofing

  	
  $70k

  	
   

  
	
  Electrical

  	
  $1.150 million

  	
   

  
	
  Plumb

  	
  $225k

  	
   

  
	
  HVAC

  	
  $500k

  	
   

  
	
  Libert HVAC in Computer
  room

  	
  $200k

  	
   

  
	
  Generator

  	
  $225k

  	
   

  
	
  Interior Build out
  (studs, SR, etc.)

  	
  1.200 million

  	
   

  
	
  Brick Work

  	
  $90k

  	
   

  
	
  Glass and doors

  	
  $245k

  	
   

  
	
  Elevators

  	
  $80k

  	
   

  
	
  Sprinklers

  	
  $150k

  	
   

  
	
  Cabling

  	
  $85k

  	
   

  
	
  Carport

  	
  $100k +

  	
   

  



 
















 


EXHIBIT “A”


 


Land Description


 


All of
GLOBAL GEOPHYSICAL INDUSTRIAL PARK, a subdivision of 17.5284 acre, as set forth
on map or plat thereof recorded under Slide No. 20060274 of the Plat
Records of Fort Bend County, Texas.


 


1

















 


EXHIBIT “B”


 


Budget


 


GGS
BUILDING COSTS



BUDGET


 


	
  LEFT HAND TURN
  LANE

  	
  300 LF

  	
  Infrastructure

  	
   

  	
   

  	
  45,000

  	
   

  
	
  GENERAL EXPENSES NOT
  UNDER SUBCONTRACTORS

  	
  see below

  	
   

  	
  275,034

  	
   

  
	
  Infrastructure-WCID
  Tap costs to bore under Gessner Meters

  	
   

  	
   

  	
  100,000

  	
   

  
	
  GENERAL CONDITIONS-SEE
  BREAKDOWN

  	
  see below

  	
   

  	
  514,845

  	
   

  
	
  Geo Grid for
  Yard

  	
  LABOR

  	
  in Site bid

  	
   

  	
   

  	
  0

  	
   

  
	
  Geo Grid for
  Yard

  	
  24 rolls @ 756
  roll

  	
  M&f&T

  	
   

  	
   

  	
  19,500

  	
   

  
	
  SITE         11
  ACRES R & F GRADING, C & F, CRUSHED ROCK

  	
   

  	
   

  	
   

  	
   

  
	
  UTILITIES       STORM,
  WATER, FIRE, SANITARY, OUTFALL

  	
   

  	
   

  	
  681,022

  	
   

  
	
  UTILITIES-CEMENT/DIRT
  FILL COMPACTION FOR ELECTRICAL

  	
   

  	
   

  	
   

  	
   

  
	
  INSTALL ALL CONDUIT
  SITE LIGHTING, DATA, FEEDS

  	
  est

  	
   

  	
   

  	
  140,000

  	
   

  
	
  SITE-REMOVAL OF
  ELECTRICAL SPOILS

  	
  est

  	
   

  	
   

  	
  11,000

  	
   

  
	
  SITE-REMOVAL OF UTILITY
  SPOILS

  	
   

  	
  sub-bid

  	
   

  	
   

  	
  0

  	
   

  
	
  SITE-REMOVAL OF
  CONCRETE SPOILS

  	
  est

  	
  1323 CY

  	
   

  	
   

  	
  9,000

  	
   

  
	
  CONCRETE AND TILT WALLS

  	
  W/2ND FLOOR

  	
   

  	
   

  	
   

  	
   

  
	
  CONCRETE MEZZANINE OVER
  OFFICES

  	
   

  	
   

  	
   

  	
   

  
	
  CONCRETE ROADS,
  PARKING, PADS

  	
   LS

  	
   

  	
  1,330,000

  	
   

  
	
  STEEL  FABRICATION

  	
  M,T,F

  	
   D

  	
   

  	
  35,000

  	
   

  
	
  STEEL  FABRICATION

  	
  M,T,F

  	
   A & E

  	
   

  	
  564,000

  	
   

  
	
  METAL BUILDING
  FABRICATION

  	
  M,T,F

  	
   B & C

  	
   

  	
  220,000

  	
   

  
	
  STEEL METAL BUILDING
  ERECTION AROUND TILT WALLS

  	
   B & C

  	
   

  	
  55,000

  	
   

  
	
  STEEL SPIRAL
  STAIRCASE

  	
  W/PLEXIGLASS

  	
  M &
  F& T

  	
   

  	
   

  	
  62,000

  	
   

  
	
  STEEL SPIRAL STAIRCASE

  	
  est. erection

  	
   

  	
   

  	
  4,000

  	
   

  
	
  STEEL & PANEL
  ERECTION

  	
  STEEL FOR
  A,E,D-PANEL-ALL

  	
   

  	
   

  	
  220,000

  	
   

  
	
  MASONRY STUCCO AT A,
  SIGN, TRIM CAPS

  	
  M&L

  	
   A

  	
   

  	
  18,000

  	
   

  
	
  MASONRY

  	
  CMU

  	
  M&L&T

  	
   A

  	
   

  	
  17,000

  	
   

  
	
  MASONRY

  	
  DUMPSTERS, WALLS, SIGN,
  ALL CMU

  	
   all

  	
   

  	
  60,000

  	
   

  
	
  WATERPROOFING PANELS,
  PARKING LOT, DAMP PROOFING

  	
   

  	
   

  	
  27,000

  	
   

  
	
  BUILT-UP ROOF &
  GUTTERS, FLASHING

  	
  M,L,T

  	
   A

  	
   

  	
  185,000

  	
   

  
	
  BUILT-UP ROOF &
  GUTTERS, FLASHING

  	
  M,L,T

  	
   E

  	
   

  	
  35,000

  	
   

  
	
  BUILT-UP ROOF &
  GUTTERS, FLASHING

  	
  M,L,T

  	
   D

  	
   

  	
  20,250

  	
   

  
	
  METAL ROOF

  	
  STANDING SEAM

  	
  M,L,T

  	
   B,C

  	
   

  	
  153,000

  	
   

  
	
  METAL ROOF

  	
  AWNINGS

  	
  26 units

  	
  M,L,T

  	
   A,B,E

  	
   

  	
  82,000

  	
   

  
	
  METAL ROOF

  	
  CANOPY ENTRY

  	
  w/framing

  	
   A 

  	
   

  	
  7,900

  	
   

  
	
  METAL ROOF

  	
  ROOF OVER HVAC/AIR
  COMPRESSOR

  	
   B 

  	
   

  	
  8,000

  	
   

  
	
  CARPORT FOOTINGS

  	
  16

  	
  CANOPY FOOTINGS

  	
  6

  	
   A 

  	
   

  	
  3,500

  	
   

  
	
  CARPORT
  ROOFING/STANDING SEAM

  	
  M&T&L

  	
   

  	
   

  	
  46,000

  	
   

  
	
  CARPORT

  	
  FRAMING

  	
  M&T&L

  	
   

  	
   

  	
  28,000

  	
   

  
	
  CARPORT STEEL COLUMNS &
  TUBING & FRAMING

  	
  ONLY 2

  	
   

  	
   

  	
  16,000

  	
   

  
	
  CARPORT W/ CMU AND
  LIMESTONE

  	
  ROUNDED SCREEN

  	
   

  	
   

  	
  2,000

  	
   

  
	
  CARPORT FOOTINGS

  	
  16

  	
  CANOPY FOOTINGS

  	
  6

  	
   A 

  	
   

  	
  3,500

  	
   

  
	
  CARPORT
  ROOFING/STANDING SEAM

  	
  M&T&L

  	
   

  	
   

  	
  46,000

  	
   

  
	
  CARPORT

  	
  FRAMING

  	
  M&T&L

  	
   

  	
   

  	
  28,000

  	
   

  
															



 


1

















 


	
  CARPORT STEEL COLUMNS &
  TUBING & FRAMING 

  	
  ONLY 2

  	
   

  	
   

  	
  16,000

  	
   

  
	
  CARPORT W/ CMU AND
  LIMESTONE

  	
  ROUNDED SCREEN

  	
   

  	
   

  	
  2,000

  	
   

  
	
  EXTERIOR WALL FRAMING
  FOR CANOPY COLUMNS

  	
   A

  	
   

  	
  1,000

  	
   

  
	
  EXTERIOR WALL FRAMING &
  DENS GLASS

  	
   A

  	
   

  	
  8,300

  	
   

  
	
  LINER PANEL SHOP WALLS

  	
  200 LF

  	
  10’ HIGH

  	
  M&L&T

  	
   B

  	
   

  	
  7,400

  	
   

  
	
  INTERIOR-STUDS, SR, TF,
  PAINT, INSUL, CAB, CEILING, DOORS

  	
   

  	
   

  	
   

  	
   

  
	
  INCLUDES GRAN/SSC TOPS,
  PLAM IN WORK AREAS

  	
   A

  	
   

  	
  597,000

  	
   

  
	
  INTERIOR-STUDS, SR, TF,
  PAINT, INSUL, CAB, CEILING, DOORS

  	
   

  	
   

  	
   

  	
   

  
	
  INCLUDE  LAMINATES CAB SURFACES AND TOPS

  	
   E

  	
   

  	
  175,000

  	
   

  
	
  UPGRADE TO SOLID
  SURFACE TOPS

  	
  355 SF

  	
   E

  	
   

  	
  19,000

  	
   

  
	
  INTERIOR-STUDS, SR, TF,
  PAINT, INSUL, CAB, CEILING, DOORS

  	
   B

  	
   

  	
  16,000

  	
   

  
	
  ADD FOR ACCENT COLORS
  IN EXEC. OFFICES

  	
   

  	
   

  	
  4,000

  	
   

  
	
  PLUMBING

  	
  AND FIXTURES

  	
  M&L&T

  	
   

  	
   

  	
  210,000

  	
   

  
	
  ELECTRICAL

  	
  M&T&L

  	
   

  	
   

  	
  500,000

  	
   

  
	
  ELECTRICAL FIXTURE
  ALLOWANCE

  	
  incls. Site poles, etc.

  	
   

  	
   

  	
  150,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HVAC

  	
   

  	
   

  	
  455,000

  	
   

  
	
  AER0-K FIRE
  SUPPRESSION-SERVER ROOM

  	
   

  	
   

  	
  15,000

  	
   

  
	
  SPRINKLER SYSTEMS

  	
  1.75 SF +

  	
   A & E

  	
   

  	
  125,000

  	
   

  
	
  FIRE STOPPING 

  	
  AND CAULK ALL STUD BASE
  PLATES

  	
   A,B,E,C,D

  	
   

  	
  10,000

  	
   

  
	
  FIRE PROOFING

  	
  STEEL WITH MONOKOTE

  	
   

  	
   

  	
  0

  	
   

  
	
  FIRE LINE LOOPING

  	
   

  	
   

  	
  0

  	
   

  
	
  DOCK BAY DOORS

  	
  10-16X16,3-14X14,1-10X10

  	
  M,L,T

  	
   A & 
  B

  	
   

  	
  72,000

  	
   

  
	
  DOCK LEVELER-RITE HITE

  	
  M,L,T

  	
   A

  	
   

  	
  5,800

  	
   

  
	
  WHS GUARD RAILING
  SYS  117 LF

  	
  M,L,T

  	
   A

  	
   

  	
  8,500

  	
   

  
	
  COLUMN GUARDS, 

  	
  7

  	
  295 EA

  	
  M,L,T

  	
   A

  	
   

  	
  2,065

  	
   

  
	
  BIG  FAN INSTALLED

  	
  M,L,T

  	
   A

  	
   

  	
  7,300

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CABLING  IT INFRASTRUCTURE   fiber optic connect

  	
  M & T& L

  	
   

  	
   

  	
  90,000

  	
   

  
	
  WASH BAY

  	
  Equip.

  	
   

  	
   

  	
  33,000

  	
   

  
	
  ACCENT WALL VERTICAL
  TILE

  	
  LABOR

  	
  25 LF

  	
   

  	
   

  	
  850

  	
   

  
	
  ACCENT WALL VERTICAL
  TILE

  	
  M&T

  	
  5.99 SF

  	
   

  	
   

  	
  1,600

  	
   

  
	
  CARPET  45,000SF 
  add 20% extra future  1.07 SF + M&F&T

  	
   

  	
   

  	
  53,500

  	
   

  
	
  CARPET LABOR

  	
  38,000 SF

  	
  .55 SF

  	
   

  	
   

  	
  20,900

  	
   

  
	
  VINYL

  	
  .63 SF +

  	
  M&F&T

  	
   10,000 SF

  	
   

  	
  6,900

  	
   

  
	
  VINYL

  	
  LABOR  1.00 SF est

  	
  M&T&L

  	
   

  	
   

  	
  10,000

  	
   

  
	
  LOBBY FLOOR TILE

  	
  11.88 SF +

  	
  M&F&T

  	
   2440 
  SF

  	
   

  	
  32,000

  	
   

  
	
  BATH/LOCKERS/HOTEL TILE
  FLOOR

  	
  1.43 SF

  	
  M,T,F,T

  	
   3000 SF

  	
   

  	
  4,660

  	
   

  
	
  SHOWER TILE &
  WALL TILE    2.00 SF +  

  	
  M&F&T

  	
  3,900

  	
   

  	
  8,600

  	
   

  
	
  MISCEL. TILE
  MATERIALS        TRIM, BASE, MORTAR,
  SAND

  	
   

  	
   

  	
  2,500

  	
   

  
	
  TILE LABOR

  	
   ALL

  	
   

  	
  30,000

  	
   

  
	
  TILE AT VESTIBULE

  	
  M&T

  	
   

  	
   

  	
  1,400

  	
   

  
	
  SECURITY &
  FIRE ALARMS       CCTV

  	
  CARD READERS

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ALLOWANCE

  	
   

  	
   

  	
  75,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CONVAULT TANK
  INSTALLATION

  	
   

  	
   

  	
  20,000

  	
   

  
	
  CRANE

  	
  10 TON

  	
  40 ft span  x  100  M&L&T

  	
   

  	
   

  	
  58,000

  	
   

  
	
  ELEVATOR

  	
  2

  	
  M&L&T

  	
   A & E

  	
   

  	
  80,000

  	
   

  
	
  EXTERIOR KITCHEN
  CAB & COUNTERTOPS

  	
  ALLOW

  	
   

  	
   

  	
  20,000

  	
   

  
	
  EXT. COV. ARBOR
  W/METAL ROOF

  	
  ALLOW

  	
  M&T&L

  	
   

  	
   

  	
  60,000

  	
   

  
	
  WROUGHT IRON
  FENCE TO LOT LINE

  	
  AT PATIO

  	
   

  	
   

  	
  7,000

  	
   

  
																			



 


2

















 


	
  LAB, ENGINE
  REPAIR RM SHELVES & CAB

  	
   

  	
   

  	
  2000

  	
   

  
	
  LOBBY GLASS
  ENTRY          DOORS, WINDOWS

  	
  M&L&T

  	
   

  	
   

  	
  215,000

  	
   

  
	
  ADA DRINKING
  FOUNTAINS

  	
  2

  	
  M&L&T

  	
   

  	
   

  	
  750

  	
   

  
	
  WROUGHT IRON
  FENCING

  	
  AT HOTEL

  	
  M&L&T

  	
   

  	
   

  	
  35,000

  	
   

  
	
  PERIMETER
  FENCING

  	
  plus 3 auto car &
  man gates

  	
   

  	
   

  	
   

  	
  85,000

  	
   

  
	
  HANDICAP
  PAINTING & SIGNS    8 EA    210 EA       M&L&T

  	
   

  	
   

  	
  1,900

  	
   

  
	
  STAIN &
  SEAL CONCRETE    23,600 SF    .50 SF          M&L&T

  	
   A&B&D

  	
   

  	
  11,750

  	
   

  
	
  EXTERIOR
  PAINT-TILT, STEEL, STUCCO, DOORS

  	
  M&L&T

  	
   ALL

  	
   

  	
  60,000

  	
   

  
	
  PARKING LANE
  PAINTING

  	
  6500     .18
  LF

  	
  M&L&T

  	
   

  	
   

  	
  1,300

  	
   

  
	
  FIRE LANE
  PAINTING & STENCILING    125 @
  8.ea

  	
  M&L&T

  	
   

  	
   

  	
  1,200

  	
   

  
	
  WASH BAY
  PLUMBING   

  	
  DRAINS-PATIO

  	
  NIB

  	
   

  	
   

  	
  2,000

  	
   

  
	
  MONUMENT SIGN

  	
  ALLOWANCE

  	
   

  	
   

  	
  15,000

  	
   

  
	
  LANDSCAPING

  	
  ALLOWANCE

  	
   

  	
   

  	
  80,000

  	
   

  
	
  IRRIGATION

  	
  ALLOWANCE

  	
   

  	
   

  	
  25,000

  	
   

  
	
  WALLPAPER

  	
  ALLOWANCE

  	
   

  	
   

  	
  3,500

  	
   

  
	
  SHOWER DOORS

  	
  ALLOWANCE

  	
   

  	
   

  	
  1,300

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BUILDERS
  RISK 

  	
   

  	
   

  	
  32000

  	
   

  
	
  WORKERS COMP-INS

  	
   

  	
   

  	
   

  	
   

  
	
  GENERAL
  LIABILITY INS

  	
   

  	
   

  	
  60,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Sub Total

  	
   

  	
   

  	
  8,631,026

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Add .05%  FOR 
  INFLATION, CHANGES, UNKNOWNS

  	
   

  	
   

  	
   

  	
   

  
	
  MISSING ITEMS,
  PROBLEMS ENCOUNTERED - CONTINGENCIES

  	
  0.05

  	
   

  	
  431,551

  	
   

  
	
   

  	
  TOTAL

  	
   

  	
   

  	
  $

  	
  9,062,577

  	
   

  
	
   

  	
  Loan Amount

  	
   

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
   

  	
  Borrower’s Cash
  Portion

  	
   

  	
  $

  	
  1,562,577

  	
   

  
										



 


Lender may withhold from an Advance or, on account of
subsequently discovered evidence, withhold from a later Advance under this
Agreement or require Borrower to repay to Lender the whole or any part of any
earlier Advance to such extent as may be necessary to protect Lender from loss
on account of (a) defective work not remedied or requirements of this
Agreement not performed, (b) liens filed or reasonable evidence indicating
probable filing of liens, (c) failure of Borrower to make payments to
subcontractors for material or labor, or (d) a reasonable doubt that the
construction can be completed for the balance of the Loan Amount then
undisbursed.  When all such grounds are
removed, payment shall be made of any amount so withheld because of them.


 


3

















 


EXHIBIT “C”


 


Affidavit of Completion


 


BEFORE ME, the undersigned authority, on this day
personally appeared                              
(“Affiant”), as                          
of GLOBAL GEOPHYSICAL SERVICES, INC., a Texas corporation (“Owner”), known to
me to be the person whose name is subscribed below, and who, being by me first
duly sworn, did his oath state as follows:


 


1.             Owner.  The name and
address of Owner are:


 


GLOBAL GEOPHYSICAL SERVICES, INC.

3535 Briarpark Drive, Suite 200

Houston, Texas 77042


 


2.             Contractor.  The name and
address of the original contractor (“Contractor”) are:


 


 


 


 


 


3.             Improvements.  The
improvements (“Improvements”), which are being, or will be, constructed
on the Land are generally described as follows: 
consisting of an office building of approximately                         
sq. ft. to be located on the property (“Land”) described in Schedule “A”
attached hereto.


 


4.             Real Property.  Owner is the
owner of the real property (“Real Property”) situated in Harris County,
Texas, on which the Improvements were constructed and are located, which Real
Property is more particularly described as follows:


 


See Schedule “A”
attached hereto and incorporated herein by reference for all purposes.


 


5.             Completion.  The
Improvements under the Contract between Owner and Contractor have been completed
within the meaning of Texas  Property  Code §53.106(e), and
the date of such completion was                              ,
200     (“Date of Completion”).


 


6.             Affiant.  The Affiant
is an authorized representative of Owner and has been duly authorized to execute
this Affidavit of Completion and cause it to be recorded with the County Clerk
of the county in which the Real Property is situated.


 


NOTICE:  A CLAIMANT MAY NOT
HAVE A LIEN ON RETAINED FUNDS UNLESS THE CLAIMANT FILES THE AFFIDAVIT CLAIMING
A LIEN NOT LATER THAN THE 30TH DAY AFTER THE DATE OF COMPLETION.


 


1

















 


DATED as of the           
day of                            ,
20      .


 


	
   

  	
   

  	
  AFFIANT:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  	
  ,

  
	
   

  	
   

  	
  who is an authorized representative of Owner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  



SUBSCRIBED
AND SWORN BEFORE ME, on this the           
day of                    ,
20     .


 


 


	
  [SEAL]

  	
   

  	
   

  
	
   

  	
   

  	
  Notary Public, State of Texas

  
	
  My Commission Expires:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed or Typed Name of Notary

  



 


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SCHEDULE 3.8


 


Exceptions to
Retainage


 


Structural Steel
Fabricator


 


Approximate amount
of contract $700,000.00


 


LBM Steel
Fabrication and Roof


 


Approximate amount
of contract $298,000.00


 

















 


ANNEX I


 


Interest Rate Provisions


 


1.             Definitions.


 


(a)           Unless
otherwise defined in this Agreement, all capitalized terms used herein shall
have the meanings given such terms in this Agreement.


 


(b)           The
following terms are additionally defined for purposes of this Agreement and, as
with all other provisions herein, shall be deemed to be incorporated into the
Rate Option Note (as that term is defined herein) for all purposes.  This Annex I shall control in the event
any of the following terms are otherwise defined in the Agreement.


 


“Applicable CMT (Treasury)
Rate” shall mean the 10-year U.S. Treasury Note held to a constant
maturity date as quoted in the Money Rate Section of The Wall
Street Journal thirty (30) days prior to the Maturity Date plus TWO
PERCENT (2%).


 


“Applicable Prime Rate”
shall mean the Prime Rate minus FIFTY HUNDREDTHS PERCENT (0.5%).


 


“Prime Rate”
shall mean the prime rate from time to time announced by the Lender, as it
changes from time to time.  The prime
rate of the Lender is an index only and is not necessarily the lowest rate
charged by the Lender to its customers.


 


“Rate Option Note”
shall mean the $7,500,000.00 Note described in the Agreement.


 


2.             Interest
Rate Prior to Event of Default. 
Notwithstanding anything in the Loan Agreement or the Rate Option Note
to the contrary, prior to the occurrence of an Event of Default, the
outstanding principal balance of the Rate Option Note shall bear interest at
the Applicable Prime Rate prior to the Maturity Date and, so long as the
Extended Rate Option is available and exercised, after the Maturity Date at the
Applicable CMT (Treasury) Rate.


 


3.             Regulatory
Changes.  Borrower agrees to
reimburse the Lender upon demand for any costs, taxes or other charges
applicable to the Lender by reason of any regulatory change occurring after the
date of this Agreement with respect to loans bearing interest at a LIBOR
Rate.  This reimbursement obligation is
in addition to any other reimbursement obligations of Borrower under this
Agreement or the Rate Option Note.


 


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