Document:

Deed of Trust Note

 Exhibit 10.3 
  

					
	 	 	DEED OF TRUST NOTE	 	 
	$1,500,000.00	 	Dallas County, Texas	 	July 16, 2004

  
 FOR VALUE
RECEIVED, NUMO MANUFACTURING, INC., A TEXAS CORPORATION (herein referred to as “Maker”), promises to pay to the order of GRAHAM MORTGAGE CORPORATION, A TEXAS CORPORATION (herein sometimes referred to as
“Payee”), at 3838 Oak Lawn, Suite 1500, Dallas, Texas 75219, or at such other place as the holder hereof may from time to time designate in writing, the principal sum of One Million Five Hundred Thousand and No/100 Dollars ($1,500,000.00),
with interest from the date hereof on the unpaid principal at the rate of fifteen percent (15%) per annum. Installments of principal and interest in the amount of $24,200.24 each shall be due and payable monthly commencing on September 1, 2004, and
continuing on the first day of each month thereafter through and including July 1, 2005 (the “Maturity Date”). All principal and accrued but unpaid interest, together with a deferred loan fee in the amount of two percent (2%) of the
outstanding principal balance, shall become due and payable on August 1, 2005, provided however, that, by notice to Payee given on or before July 1, 2005, Maker may extend the Maturity Date to August 1, 2006, and Maker may, in like manner, by
notices given to Payee on or before July 1 of each year through and including 2010, extend the Maturity Date year by year, with the outside Maturity Date being August 1, 2011. In the event of such extensions, the deferred loan fee payable on the
Maturity Date (as so extended) shall be two percent (2%) if the last extension is for a Maturity Date of August 1, 2006, and one percent (1%) if the last extension is for a Maturity Date of August 1, 2007. In the event of a permitted extension of
the Maturity Date beyond August 1, 2007, there shall be no deferred loan fee payable. In all events, deferred loan fees shall be applicable only to payments made on or after the Maturity Date, as extended from time to time, and in no event shall
deferred loan fees be applicable to prepayments upon which prepayment fees are due hereunder. 
  
 The payment of this Note is secured by a Deed of Trust (With Security Agreement and Assignment of Rents) of even date herewith from Maker, as Grantor, to David G. Drumm, Trustee, for the use and benefit of the holder
hereof (herein the “Deed of Trust”) covering certain real and personal property situated in Kaufman County, Texas, as more fully described in the Deed of Trust (herein the “Mortgaged Premises”). 
  
 Notwithstanding anything to the contrary contained elsewhere herein or in any
other document evidencing or securing the indebtedness evidenced by this Note (the “Loan Instruments”), if default shall be made in the payment of any installment of this Note, whether principal or interest, or in the performance of any of
the covenants to pay or to reimburse money contained in this Note or in any of the Loan Instruments and either (i) such default remains uncured for five (5) days following written notice thereof to Maker or (ii) Maker has theretofore received two
(2) or more notices of default hereunder within the preceding twelve (12) months, or if default shall be made in the performance of any of the covenants other than for the payment or reimbursement of money contained in this Note or in any of the
Loan Instruments and such default remains uncured for thirty (30) days following written notice thereof to Maker, then the whole unpaid principal sum herein agreed to be paid with interest accrued thereon but unpaid shall at once or at any time
thereafter prior to cure of such default, at the option of the holder hereof, become due and payable. 

 If requested by the holder hereof, and to the extent the collection thereof would not result in the
holder hereof receiving interest hereunder to a greater extent than authorized by law, Maker shall pay a late charge not exceeding five percent (5%) of any installment of this Note paid more than ten (10) days after the due date thereof to
compensate the holder for its administrative overhead costs incurred in connection with such late payment. 
  
 Any sums which shall not be paid when due, whether maturing by lapse of time or by reason of acceleration under the provisions herein stated and whether
principal, interest, money owing for advancements by the holder pursuant to the terms of said Deed of Trust or for reasonable attorneys’ fees, shall bear interest at the highest lawful rate, or if no highest lawful rate is established, at the
rate of eighteen percent (18%) per annum. 
  
 In the event this
Note is placed in the hands of an attorney for collection, or for the recovery of the indebtedness secured by the Deed of Trust, the Maker hereof, and its successors and assigns will pay on demand all costs and expenses, including a reasonable
attorneys’ fee thereby incurred. 
  
 Maker shall be permitted
to prepay the indebtedness evidenced hereby, in whole or in part, prior to August 1, 2005, upon payment of a prepayment fee equal to four percent (4%) of the principal balance prepaid. In the event of extension of the Maturity Date as permitted
herein, this Note may be prepaid upon payment of prepayment fees equal to three percent (3%) of the principal balance prepaid for prepayments made on or after August 1, 2005, but prior to August 1, 2006, two percent (2%) of the principal amount
prepaid for prepayments made on or after August 1, 2006, but prior to August 1, 2007, and one percent (1%) of the principal balance prepaid for prepayments made on or after August 1, 2007, but prior to August 1, 2008. In the event of an extension of
the maturity as permitted herein beyond August 1, 2008, Maker shall be permitted to prepay the indebtedness evidenced hereby in whole or in part without premium or penalty. 
  
 It being the intention of the parties hereto to strictly conform to the usury laws of the State of Texas, subject to
preemption by federal law, no provision of this Note, the Deed of Trust or other security instruments securing same, whether considered separately or collectively, shall require the payment or permit the collection of interest in excess of the
maximum rate now or hereafter permitted by applicable law. If any possible construction of any or all of the aforesaid instruments or any other documents relating to the loan evidenced hereby may in any way or in the event of any contingency,
including but not limited to default or prepayment hereunder by Maker, result in authorizing or requiring the payment of any interest in excess of that which lawfully may be charged to Maker or received by the lender or holder of this Note, then all
parties hereto covenant and agree that said construction is subject to the provisions of this paragraph which are intended to override and control, and said instruments or document shall be automatically reformed and the amount of interest due
hereunder shall be automatically reduced to the amount allowed under applicable usury laws of the State of Texas or of the United States without the necessity of amending or modifying same, and neither Maker, any guarantor, nor any other party
liable with respect to this Note or the loan agreed to pursuant to said instruments, nor their heirs, devisees, personal representatives, successors or assigns, shall be obligated to pay the amount of such interest to the extent that it is in excess
of the amount permitted by applicable laws. In the event interest payments (including payments which are not identified as interest payments in this Note or other documents but which are considered interest payments as a matter of Texas or federal
law) in excess of said lawful rate shall ever have been paid or received, the recipient thereof shall refund such excess to Maker or other payor, and Maker and each other obligor under this Note hereby waives any further rights or remedies with
respect to such payment and receipt of such excess interest. 
  

 2 

 Except as expressly provided herein, Maker, the endorsers and guarantors of this Note and all others who
may become liable for all or any part hereof severally waive presentment for payment, protest, and notice of intent to accelerate, acceleration and notice of protest and of nonpayment and expressly consent to any number of renewals or extensions
without affecting their liability. 
  
 The term “holder”
as used herein includes Payee. 
  
 This Note is to be construed
in accordance with the laws of the State of Texas and of the United States, to the extent the laws of the United States permit a greater rate of interest to be charged. 
  

			
	 NUMO MANUFACTURING, INC.
 a Texas
corporation

		
	By:	 	 /s/ Michael Hicks

	Name:	 	Michael Hicks
	Title:	 	President

  

 3Real Estate Lien Note

 Exhibit 10.4 
  
 REAL ESTATE LIEN NOTE 
  

	Date:	    July 16, 2004 

  

	Maker:    	NUMO MANUFACTURING, INC., a Texas corporation 

  
 Maker’s Mailing Address:     1072 E. Highway 175 

	Kaufman,	Texas 75142 

  

	Payee:	    CHF INDUSTRIES, INC., a Delaware corporation 

  
 Payee’s Mailing Address:     One Park Avenue, New York, New York 10016 
  

	Principal	Amount:     Five Hundred Twenty One Thousand and 00/100 Dollars ($521,000.00) 

  
 Annual Interest Rate on Unpaid Principal from Date (“Applicable Rate”): 
  
 At the fixed rate of seven percent (7%) per annum. Interest shall be
calculated at a daily rate equal to 1/360 of the annual interest rate which this Note bears. 
  
 Annual Interest Rate on Matured, Unpaid Amounts: 
  
 Eighteen percent (18%) or highest legal rate, whichever is less. 
  
 Terms of Payment (principal and interest): 
  
 Principal and interest are payable in equal monthly installments of Twenty Thousand Dollars ($20,000) each (with each payment allocated as follows: $17,523 to principal and $2,477 to interest), on the 16th day of every month, beginning August 16, 2004, and continuing regularly until July 16, 2005, when the entire amount of
principal and interest remaining unpaid will be due and payable in full. See Exhibit “A” attached hereto and incorporated herein for payment schedule. 
  

Balloon Note Disclosure: If payments on this Note are not sufficient to pay this Note in full on or before the maturity of this Note, then the balance of
principal and unpaid interest which the Maker must pay on the maturity of this Note may be a large payment. The Payee is under no obligation to refinance this Note. Maker will, therefore, be required to make payment out of other assets that Maker
may own, or Maker will have to find a lender, which may be the Payee, willing to lend Maker the money. If Maker refinances this Note at maturity, Maker may have to pay some or all of the closing costs normally associated with a new note even if
Maker obtains refinancing from the Payee. 
  
 Security: This Note is
secured by, among other things, a Vendor’s Lien retained in a deed of even date from Payee to Maker, and by a Second Lien Deed of Trust, Security Agreement and Assignment of Rents of even date herewith to a Trustee, for the benefit of Payee,
covering certain real estate situated in the County and State set out therein. Reference is made to the Second Lien Deed of Trust, Security Agreement and Assignment of Rents for a description of the collateral for this Note and the rights of the
Grantors named therein and the Payee with respect to the contents of said document. 

 For Value received, the Maker promises to pay as scheduled herein, to the order of the Payee, at the
address set forth above, the Principal Amount, together with interest on the principal balance from time to time remaining unpaid prior to maturity or default at the rate determined as hereinafter indicated. If Maker be more than one person or
entity the obligation of each party executing this Note shall be joint and several. 
  
 If the Applicable Rate ever exceeds the Maximum Rate so that the Payee is prevented from charging interest at the Applicable Rate, then, notwithstanding that the Applicable Rate may thereafter fall below the Maximum
Rate, this Note shall continue to bear interest at the Maximum Rate until an amount of interest has accrued which is equal to the amount which would have accrued if the Applicable Rate had always been charged. 
  
 The Indicated Rate (“Maximum Rate”) ceiling specified in Tex. Rev.
Civ. Stat. article 5069-1.04 applies to this Note; however, if permitted by law, the Payee may implement any ceiling under that Article and revise the index, formula or provisions of law used to compute the Maximum Rate by notice to the Maker as
provided by that Article. Furthermore, if any applicable law permits a higher rate than that Article, the higher rate shall apply. 
  
 Maker may prepay this Note in whole or in part at any time without penalty. Prepayments shall be applied to installments of principal in the inverse order
of maturity so that they will pay the last maturing principal installments first, and these prepayments will not reduce the amount or time of payment of the remaining installments. 
  
 If any payment of principal and/or interest on this Note shall become due on a Saturday, Sunday or holiday, such payment
shall be paid on the next succeeding business day, and such extension of time shall in such event be included in computing the amount of interest payable in connection with such payment. 
  
 All payments made under this Note shall be applied to interest due and reduction of principal as set forth in the attached
Exhibit “A”; provided, however, that in the event the Payee shall have made any advance in addition to the principal of this Note under the terms of any instrument securing the payment of this Note, any payment received, at the option of
the Payee, may first be applied to repay such advances plus interest thereon. 
  
 If default be made (i) in the payment of any installment of principal and/or interest under this Note, or (ii) in the performance of any covenant in any instrument securing or relating to this Note, if any, and either
(i) such default remains uncured for five (5) days following written notice thereof from Payee to Maker or (ii) Maker has theretofore received two (2) or more notices of default hereunder within the preceding twelve (12) months, or if default shall
be made in the performance of any of the covenants other than for the payment of money contained in this Note and such default remains uncured for thirty (30) days following written notice thereof to Maker, then the entire principal balance and
accrued interest owing thereon shall at once become due and payable without notice at the option of the Payee. Failure to exercise this option shall not constitute a waiver of the right to exercise the same in the event of any subsequent default.

  
 Except as otherwise provided, and subject to any applicable
limitations imposed by the laws of the State of Texas, and United States of America, the makers, signers, sureties, guarantors and endorsers of this Note waive demand, all demands for payment, presentment, presentations for payment, notice of
dishonor, notice of intent to accelerate payment hereof, notice of acceleration, diligence in collecting, grace, notice, notice of protest, and protest, and agree to one or more extensions for any period or periods of time and partial payments
before or after maturity, without prejudice to the Payee; and if collection procedures are ever commenced, by any means, including legal proceedings or through a probate or bankruptcy court, or if this Note is placed in the hands of an attorney for
collection after default or maturity, the Maker agrees to pay all costs of collection or attempted collection, including reasonable attorney’s fees. 
  

 2 

 All agreements between the Maker and the Payee, whether now existing or hereafter arising and whether
written or oral, are hereby limited so that in no contingency, whether by reason of demand or acceleration of the maturity hereof or otherwise, shall the interest contracted for, charged, received, paid or agreed to be paid to the exceed the maximum
amount permissible under applicable law. If, from any circumstance whatsoever, interest would otherwise be payable to the Payee in excess of the maximum lawful amount, the interest payable to the Payee shall be reduced to the maximum amount
permitted under applicable law; and if from any circumstance the Payee shall ever receive anything of value deemed interest by applicable law in excess of the maximum lawful amount, an amount equal to any excessive interest shall be applied to the
reduction of the principal hereof and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal hereof, such excess shall be refunded to the Maker. All interest paid or agreed to be paid to the Payee
shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread through the full period of this Note until payment in full of the principal (including the period of any renewal or extension hereof) so that the
interest hereof for such full period shall not exceed the maximum amount permitted by applicable law. This paragraph shall control all agreements between the Maker and the Payee. 
  
 The Payee’s rights and remedies hereunder are cumulative. This Note shall be governed by and construed in accordance
with the applicable laws of the United States of America and the laws of the State of Texas, except that Tex. Rev. Civ. Stat. Ann. Articles 5069, Chapter 15 (which regulates certain revolving credit loan accounts and revolving tri-party accounts),
shall not apply to this Note. 
  
 No delay on the part of the
Payee in the exercise of any power or right under this Note, or under the Deed of Trust or any other instrument executed in connection herewith, shall operate as a waiver thereof, nor shall a single or partial exercise of any power or right preclude
other or further exercise thereof or exercise of any other power or right. Enforcement by the Payee of any security for the payment hereof shall not constitute any election by it of remedies so as to preclude the exercise of any other remedy
available to it. 
  
 All notices or demands required or permitted
hereunder shall be in writing and shall be deemed to be delivered, upon receipt, if hand delivered, or, whether actually received or not, upon deposit in a regularly maintained receptacle for the mail, registered or certified mail, return receipt
requested, postage prepaid, at the addresses set out herein. 
  
 When the context requires, singular nouns and pronouns include the plural. 
  
 The lien securing this Note shall remain subordinate to the liens, as renewed, extended, reamortized, or otherwise adjusted from time to time, securing another note in the original principal amount of $1,500,000 dated
of even date herewith, and executed by Numo Manufacturing, Inc. payable to the order of Graham Mortgage Corporation. If default occurs in payment of any part of principal or interest of said prior note or in observance of any covenants of any
instruments securing it, the indebtedness evidenced by this Note shall immediately become payable at the option of Payee. 
  

 3 

			
	MAKER:
	
	NUMO MANUFACTURING, INC., a Texas corporation
		
	By:	 	 /s/ Michael Hicks

	 	 	Michael Hicks, President

  

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