-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RytursXLyFA3j37YOZZd8LH+6eRQbGv7sOmffLYZF5UdmM7IzSKj7aTI6PwyYL55 qRb+dtuJHzVzLE+fZna+gg== 0000930661-96-001136.txt : 19960828 0000930661-96-001136.hdr.sgml : 19960828 ACCESSION NUMBER: 0000930661-96-001136 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960827 SROS: NYSE GROUP MEMBERS: FORD GERALD J GROUP MEMBERS: GERALD J. FORD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: LIBERTE INVESTORS INC CENTRAL INDEX KEY: 0001017907 STANDARD INDUSTRIAL CLASSIFICATION: INVESTORS, NEC [6799] IRS NUMBER: 751328153 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-46759 FILM NUMBER: 96621271 BUSINESS ADDRESS: STREET 1: 600 N PEARL STREET 2: SUITE 420 CITY: DALLAS STATE: TX ZIP: 75201 BUSINESS PHONE: 2147208950 MAIL ADDRESS: STREET 1: 600 N PEARL SUITE 420 CITY: DALLAS STATE: TX ZIP: 75201 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FORD GERALD J CENTRAL INDEX KEY: 0001021572 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 200 CRESCENT COURT STREET 2: SUITE 1350 CITY: DALLAS STATE: TX ZIP: 75201 MAIL ADDRESS: STREET 1: 200 CRESCENT COURT STREET 2: SUITE 1350 CITY: DALLAS STATE: TX ZIP: 75201 SC 13D 1 SC 13D SECURITIES AND EXCHANGE COMMISSIONS WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 LIBERTE INVESTORS INC. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 530154-10-3 - -------------------------------------------------------------------------------- (CUSIP Number) with a copy to: Gerald J. Ford Michael D. Wortley 200 Crescent Court Vinson & Elkins, L.L.P. Suite 1350 3700 Trammell Crow Center Dallas, Texas 75201 2001 Ross Avenue (214) 871-5131 Dallas, Texas 75201-2975 (214) 220-7732 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 16, 1996 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ] Check the following box if a fee is being paid with this statement. [X] (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of less than five percent of such class. See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). 1) Names of Reporting Persons (S.S. or I.R.S. Identification Nos. of above Persons): Gerald J. Ford ###-##-#### - -------------------------------------------------------------------------------- 2) Check the Appropriate Box if a Member of a Group (See Instructions): (a) Not Applicable (b) Not Applicable - -------------------------------------------------------------------------------- 3) SEC Use Only - -------------------------------------------------------------------------------- 4) Source of Funds (See Instructions): BK, OO - -------------------------------------------------------------------------------- 5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e): Not Applicable - -------------------------------------------------------------------------------- 6) Citizenship or Place of Organization: United States - -------------------------------------------------------------------------------- Number of 7) Sole Voting Power: 8,102,439* Shares Beneficially 8) Shared Voting Power: 0 Owned by Each Reporting 9) Sole Dispositive Power: 8,102,439* Person With: 10) Shared Dispositive Power: 0 - -------------------------------------------------------------------------------- 11) Aggregate Amount Beneficially Owned by Each Reporting Person: 8,102,439* - -------------------------------------------------------------------------------- 12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions): Not Applicable - -------------------------------------------------------------------------------- 13) Percent of Class Represented by Amount in Row (11): 40%* - -------------------------------------------------------------------------------- 14) Type of Reporting Person (See Instructions): IN - -------------------------------------------------------------------------------- *8,102,439 shares (40.0%) of Liberte Investors Inc. common stock are owned by Hunter's Glen/Ford, Ltd., a Texas limited partnership. The general partners of Hunter's Glen/Ford, Ltd. are Gerald J. Ford and Ford Diamond Corporation, a Texas corporation wholly-owned by Gerald J. Ford. As general partner individually and as sole shareholder and director of Ford Diamond Corporation, Gerald J. Ford possesses sole voting and investment control over all shares of Liberte Investors Inc. currently owned by Hunter's Glen/Ford, Ltd. 2 Item 1. Security and Issuer - ---------------------------- This statement relates to the common stock, $.01 par value per share, of Liberte Investors Inc., whose principle executive offices are located at 600 N. Pearl Street, Suite 420, Dallas, Texas 75201. Item 2. Identity and Background - -------------------------------- The person filing this statement is Gerald J. Ford, whose business address is 200 Crescent Court, Suite 1350, Dallas, Texas, 75201. Mr. Ford's principal occupation is Chairman and Chief Executive Officer of First Nationwide Bank, a Federal Savings Bank. The executive offices of First Nationwide Bank are at 200 Crescent Court, Suite 1350, Dallas, Texas, 75201. Mr. Ford also serves as general partner of Hunter's Glen/Ford, Ltd., a Texas limited partnership, having its principal executive office at 200 Crescent Court, Suite 1350, Dallas, Texas, 75201. Hunter's Glen/Ford, Ltd. was organized for estate planning purposes and currently owns a) 20% of the common stock of First Nationwide Holdings Inc., a holding company whose significant asset is all of the outstanding shares of common stock of First Nationwide Bank, a Federal Savings Bank, and b) 40% of the common stock of Liberte Investors Inc. The other general partner of Hunter's Glen/Ford, Ltd. is Ford Diamond Corporation. The sole limited partner of Hunters Glen/Ford, Ltd. is a trust established for the benefit of Mr. Ford's children. Ford Diamond Corporation is a Texas corporation having its principal executive office at 200 Crescent Court, Suite 1350, Dallas, Texas, 75201. Ford Diamond Corporation is wholly-owned by Mr. Ford and serves as general partner of Ford family partnerships. Mr. Ford has never been convicted in any criminal proceeding, nor has he been a party to any civil proceeding commenced before a judicial or administrative body of competent jurisdiction as a result of which he was or is now subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Mr. Ford is a citizen of the United States. Item 3. Source and Amount of Funds or Other Consideration - ---------------------------------------------------------- Of the approximately $23.1 million aggregate purchase price for the shares purchased, Hunter's Glen/Ford, Ltd. borrowed $6 million under a $10 million revolving credit facility with NationsBank of Texas, N.A. Amounts loaned under such credit facility bear interest, at the option of Hunter's Glen/Ford, Ltd., either at (i) the Prime Rate announced by NationsBank of Texas, N.A. from time to time or (ii) a LIBOR rate, as determined by NationsBank of Texas, N.A., for the relevant interest period plus 2% per annum. Amounts bearing interest at the LIBOR-based rate must be repaid at the end of the relevant interest period. Amounts bearing interest at the Prime Rate must be repaid on August 14, 1997. The repayment of amounts loaned under this credit facility is secured by a pledge of all 8,102,439 shares of Common Stock owned by Hunter's Glen/Ford, Ltd. Hunter's Glen/Ford, Ltd. borrowed the remaining $17.1 million of the purchase price from Mr. Ford under an unsecured promissory note. The note bears interest at the 90-day Eurodollar rate as announced by NationsBank of Texas, N.A. plus one percent (1%) per annum, adjusted quarterly on September 30, December 31, March 31, and June 30. The note requires accrued interest to be paid semi- annually on April 15 and October 15. The unpaid principal balance is due October 15, 1997. 3 Item 4. Purpose of Transaction - ------------------------------- The acquisition of the shares of common stock of Liberte Investors Inc. is solely for investment purposes. Plans are in process to elect additional officers of Liberte Investors Inc., including a new principal accounting officer and secretary to the board, and to elect two additional directors at the next annual meeting. Further, Liberte Investors Inc. plans to pursue an acquisition of an operating company, which will be financed with cash and/or borrowings. Mr. Ford has no other present plans required to be described in Item 4. Item 5. Interest in Securities of the Issuer - --------------------------------------------- On August 16, 1996, Hunter's Glen/Ford, Ltd. acquired 8,102,439 shares of common stock of Liberte Investors Inc. representing 40.0% of the 20,256,097 shares of common stock outstanding. Gerald J. Ford possesses sole power to vote and direct the disposition of all shares of common stock of Liberte Investors Inc. owned by Hunter's Glen/Ford, Ltd. in his capacity as general partner and sole shareholder and director of the corporate general partner, Ford Diamond Corporation. The following table details the transactions in shares of common stock of Liberte Investors Inc. during the past sixty days:
Date Transaction Quantity Price -------------- ------------------------------------ ------------------------- ----------- August 16, 1996 Purchase by Hunter's Glen/Ford, Ltd. 8,102,439 $2.85/Share in Dallas, Texas (Mr. Ford has beneficial ownership of all such shares.)
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect - ------------------------------------------------------------------------------ to Securities of the Issuer - --------------------------- As described in Item 3, the 8,102,439 shares owned by Hunter's Glen/Ford, Ltd. have been pledged to NationsBank of Texas, N.A. to secure the repayment by Hunter's Glen/Ford, Ltd. of amounts borrowed from NationsBank of Texas, N.A. If Hunter's Glen/Ford, Ltd. were to default on its obligations under the documents relating to such loan, NationsBank of Texas, N.A. could foreclose upon its security interest in such shares and cause a transfer of such shares to it in foreclosure, or to another party in a foreclosure sale. Hunter's Glen/Ford, Ltd. and the issuer entered into a Registration Rights Agreement on August 16, 1996. Under this agreement, Hunter's Glen/Ford, Ltd. has the right to require the issuer to file a shelf registration statement registering the sale of its shares, and to require the issuer to use its commercially reasonable efforts to maintain the effectiveness of the registration statement for two years. In addition, Hunter's Glen/Ford, Ltd. has the right to make two demands upon the Company to register its sale of shares in underwritten offerings, provided that the shares to be sold have a fair market value in excess of $5.0 million. Finally, Hunter's Glen/Ford, Ltd. may require the Company to register the sale of its shares if the issuer proposes to file a registration statement for its account or the account of its security owners, subject to certain exceptions. 4 In addition, Hunter's Glen/Ford, Ltd. the issuer, R. Ted Enloe III and the Enloe Descendants' Trust entered into the Agreement Clarifying Registration Rights on August 16, 1996. This agreement generally permitted Hunter's Glen/Ford, Ltd. to exercise "piggy-back" registration rights in connection with any exercise of demand registration rights by the Enloe Descendants' Trust and permitted the Enloe Descendants' Trust, Mr. Enloe and his wife to exercise "piggy-back" registration rights in connection with any exercise of demand registration rights by Hunter's Glen/Ford, Ltd.. In addition, the issuer's Certificate of Incorporation contains restrictions on certain transfers of shares, including the shares beneficially owned by Mr. Ford. No other contracts, arrangements, understandings or similar relationships exist with respect to the shares of common stock of Liberte Investors Inc. between Gerald J. Ford and any person or entity. Item 7. Material to be Filed as Exhibits - ----------------------------------------- Exhibit A: Loan agreement dated August 15, 1996 between Hunter's Glen/Ford, Ltd. and NationsBank of Texas, N.A. Exhibit B: Promissory note dated August 15, 1996 between Hunter's Glen/Ford, Ltd. and NationsBank of Texas, N.A. Exhibit C: Pledge Agreement dated August 15, 1996 between Hunter's Glen/Ford, Ltd. and NationsBank of Texas, N.A. Exhibit D: Promissory Note dated August 16, 1996 between Hunter's Glen/Ford, Ltd. and Gerald J. Ford. Signature --------- After reasonable inquiry and to the best of the undersigned's knowledge and belief, the undersigned hereby certifies that the information set forth in this statement is true, complete and correct. August 26, 1996 /s/ Gerald J. Ford --------------------------- Gerald J. Ford 5 EX-99.A 2 LOAN AGMT. DATED AUG. 15, 1996 EXHIBIT A LOAN AGREEMENT DATED AUGUST 15, 1996 BETWEEN HUNTER'S GLEN/FORD, LTD. AND NATIONSBANK OF TEXAS, N.A. NATIONSBANK LOAN AGREEMENT - -------------------------------------------------------------------------------- DATE: AUGUST 15, 1996 Between - -------------------------------------------------------------------------------- Borrower: Bank: Hunter's Glen/Ford, Ltd. and NationsBank of Texas, N.A. 200 Crescent Court 901 Main Street Suite 1350 19th Floor Dallas, Texas 75201 Dallas, Texas 75202 - -------------------------------------------------------------------------------- This Loan Agreement ("Agreement") is made on the above date between Borrower and Bank. 1. THE LOAN. A. Bank agrees to lend and Borrower agrees to borrow an amount not to exceed the sum of Ten Million and No/100 Dollars ($10,000,000.00) (the "Loan") on the terms and conditions set forth herein. The Loan will be evidenced by a Promissory Note in the form attached hereto as Exhibit A, or any renewal thereof, with interest and principal payable as stated therein (the "Note"). B. The Loan provides for a revolving line of credit under which Borrower may from time to time borrow, repay and reborrow funds. The Loan shall mature on August 14, 1997 unless sooner accelerated in accordance with the terms hereof. 2. COLLATERAL. The Loan is to be secured by a pledge of certain securities pursuant to a Pledge Agreement (the "Pledge Agreement") of even date herewith between Borrower and Bank, and by an Assignment of Rights also of even date herewith between Borrower and Bank (the "Assignment of Rights"). 3. REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Bank as follows: A. GOOD STANDING. Borrower is a limited partnership duly organized and validly existing under the laws of the State of Texas and has the power to own its property and to carry on its business in each jurisdiction in which it owns properties or conducts business. B. AUTHORITY AND COMPLIANCE. Borrower has full power and authority to enter into this Agreement, to make the borrowings hereunder, to execute and deliver the Note and the other Loan Documents (as defined herein) to which it is or may be a party and to incur the obligations provided for herein, all of which have been duly authorized by all proper and necessary partnership action. No unobtained consent or approval of partners or any public authority is required as a condition to the validity of this Agreement, the Note or the other Loan Documents or the performance hereunder, and Borrower is in compliance with all laws and regulatory requirements to which it is subject. 1 C. BINDING AGREEMENT. This Agreement, the Note and the other Loan Documents to which Borrower is a party constitute valid and legally binding obligations of Borrower, enforceable in accordance with their terms. D. FINANCIAL STATEMENTS. The books and records of Borrower properly reflect Borrower's financial condition, and there has been no material change in Borrower's financial condition as represented in its financial statements dated March 31, 1996 delivered to Bank. E. LITIGATION. There are no proceedings pending or, to the best knowledge of Borrower, threatened before any court or administrative agency that will or may have a material adverse effect on the financial condition or operations of Borrower or that seek to enjoin or delay the purchase described in Section 3.H below. F. NO CONFLICTING AGREEMENTS. There are no provisions of Borrower's agreement of limited partnership and no provisions of any existing agreement, mortgage, indenture or contract binding on Borrower or affecting its property or business, that would conflict with or in any way prevent the execution, delivery or carrying out of the terms of this Agreement, the Note and the other Loan Documents. G. TAXES. All income taxes and other taxes due and payable by Borrower through the date of this Agreement have been paid prior to becoming delinquent. H. USE OF PROCEEDS. The proceeds of the Loan will be used by Borrower to (i) partially finance its purchase of 8,102,439 shares of common stock of Liberte Investors Inc., a Delaware corporation, pursuant to that certain Stock Purchase Agreement dated January 16, 1996 between Borrower and Liberte Investors Inc. (as amended most recently by that certain Second Amendment to the Stock Purchase Agreement dated as of March 28, 1996, the "Stock Purchase Agreement") and (ii) invest in such other securities, and make such other investments, as Borrower deems reasonable and prudent. Borrower is not engaged in the business of extending credit for the purpose of purchasing or carrying "margin stock" as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System; provided, however, that proceeds of the Loan may also be used for the purpose of investing in other parties for the purpose of purchasing or carrying any such "margin stock," or for the purpose of reducing or retiring any indebtedness incurred for such purpose. Neither Borrower, nor any person acting on behalf of Borrower, has taken or will take any action that might cause the Note or this Agreement to violate Regulations G, T or U or any other regulation of the Board of Governors of the Federal Reserve System or violate the Securities Exchange Act of 1934, as amended, or any rule or regulation thereunder, in each case as now in effect or as the same may hereafter be in effect. I. CONTINUATION OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made under this Agreement shall be deemed made at and as of the date hereof, and at and as of the date of any future advance under the Note. 4. CLOSING CONDITIONS A. CONDITIONS TO INITIAL ADVANCE. The obligation of Bank to execute this Agreement and to make the initial advance hereunder shall be subject to the satisfaction of the following conditions precedent: 1) LOAN DOCUMENTS. Each of this Agreement, the Note, the Pledge Agreement, and such other ancillary documents and instruments in furtherance of the transactions contemplated herein as requested by Bank in connection with the Loan (the "Loan Documents") shall have been duly executed and delivered by the respective parties thereto, shall be in full force and effect and shall be in form and substance satisfactory to Bank. 2 2) PARTNERSHIP ACTION. All partnership action necessary for the valid execution, delivery and performance by Borrower of this Agreement and the other Loan Documents to which it is a party shall have been duly and effectively taken, and evidence thereof satisfactory to Bank shall have been provided to Bank. 3) VALIDITY OF LIENS. Each of the Pledge Agreement and the Assignment of Rights shall be effective to create in favor of Bank a legal, valid and enforceable first priority security interest in and lien upon the collateral described therein. All filings, recordings, deliveries of instruments and other actions necessary or desirable in the opinion of Bank to protect and preserve such security interests shall have been duly effected. 4) OPINION OF COUNSEL. Bank shall have received a favorable opinion from Borrower's legal counsel in form and substance satisfactory to Bank and its counsel regarding such matters as Bank may request. 5) STOCK PURCHASE AGREEMENT. The closing contemplated by the Stock Purchase Agreement shall have been consummated in accordance with the terms thereof (and without the waiver of any such terms, except such waivers as would not materially adversely affect Borrower's or Bank's rights thereunder). 6) CORPORATE GENERAL PARTNER. Bank shall have received recent financial statements of Ford Diamond Corporation (including a balance sheet, income statement and disclosure of contingent liabilities) and the information and other matters disclosed thereon shall be in form and substance satisfactory to Bank and its counsel. B. CONDITIONS TO ALL BORROWINGS. The obligation of Bank to make any future advance under the Note shall be subject to the satisfaction of the following conditions precedent: 1) REPRESENTATIONS AND WARRANTIES. The representations and warranties of Borrower contained herein and in any other Loan Documents shall be true and correct as of the date of which they were made and shall also be true and correct at and as of the time of the advance with the same effect as if made at and as of that time (except to the extent such representations and warranties expressly relate to an earlier date) and Bank shall have received a certificate of Borrower signed by a general partner to such effect. 2) NO EVENT OF DEFAULT. No Event of Default (as defined in the Note) shall have occurred and be continuing and Bank shall have received a certificate of Borrower signed by a general partner to such effect. 3) NO LEGAL IMPEDIMENT. No change shall have occurred in any law or regulations thereunder or interpretations thereof that in the reasonable opinion of Bank would make it illegal for Bank to make such advance. 4) PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the transactions contemplated hereby and the other Loan Documents shall be satisfactory in form and substance to Bank and Bank shall have received all information and documents as Bank may reasonably request. 5. AFFIRMATIVE COVENANTS. So long as Borrower may borrow hereunder and until payment in full of the Note and performance of all other obligations of Borrower hereunder, Borrower will: A. FINANCIAL STATEMENTS. Maintain a system of accounting satisfactory to Bank and in accordance with generally accepted accounting principles consistently applied ("GAAP"), and, with reasonable prior notice, permit Bank's officers or authorized representatives to visit Borrower's offices and inspect 3 Borrower's books of account and other records and make photocopies thereof at such reasonable times and as often as Bank may desire, and will pay the reasonable fees and disbursements of any accountants or other agents of Bank selected by Bank for the foregoing purposes. Borrower agrees to provide Bank with the following statements and reports: 1) Within ninety (90) days after the end of each June 30 and December 31, a balance sheet of Borrower as of such June 30 or December 31, as applicable, and an income statement and a statement of cash flows of Borrower, each for the six months ended such June 30 or December 31, as applicable, all of which shall be in reasonable detail, complete and correct in all material respects, and prepared in accordance with GAAP. 2) Within ninety (90) days after the end of each fiscal year, audited financial statements of Borrower and Ford Diamond Corporation, each as of the end of such fiscal year and for the fiscal year then ended, all of which shall be in reasonable detail, complete and correct in all material respects, and prepared in accordance with GAAP (provided, that if despite Borrower's reasonable diligence in preparing such financial statements it is impractical for Borrower to provide Bank with the same within such ninety (90) day period, then no Event of Default shall result if Borrower instead provides Bank with such statements as soon as practical and in any event within one hundred twenty (120) days after the end of such fiscal year). 3) Within thirty (30) days after each June 30 and December 31, and such other times as Bank may reasonably request, executed certificates in form and substance satisfactory to Bank (a) evidencing Borrower's compliance with Sections 6.C and 6.D of this Agreement and (b) regarding Borrower's receipt of cash dividends from First Nationwide Holdings, Inc., in each case as of such date and for applicable periods then ended. B. EXISTENCE AND COMPLIANCE. Maintain its partnership existence and comply with all laws, regulations and governmental requirements applicable to it or to any of its property, business and transactions. C. ADVERSE CONDITIONS OR EVENTS. Promptly advise Bank in writing of any condition, event or act that comes to its attention which would or might materially affect Borrower's financial condition, Bank's rights in or to any collateral under this Agreement or the other Loan Documents, and of any litigation filed against Borrower in which the potential loss reasonably could be anticipated to exceed $250,000. D. TAXES. Pay all taxes as the same become due and payable unless timely extensions have been filed or the same are being contested in good faith by appropriate proceedings and adequate reserves are maintained therefor. E. FORM U-1. If required by Bank, promptly furnish to Bank a statement that conforms with the requirements of Federal Reserve Form U-1 as referred to in Regulation U or in any other relevant Federal Reserve Form or Regulation provided for from time to time by the Board of Governors of the Federal Reserve System. 6. NEGATIVE COVENANTS. So long as Borrower may borrow hereunder and until payment in full of the Note and performance of all other obligations of Borrower hereunder, Borrower will not, without the prior written consent of Bank: A. TRANSFER OF ASSETS OR CONTROL. Permit any transfer of control or ownership of Borrower or of Borrower's general partners. B. CHANGE IN GENERAL PARTNER. Permit a change of any general partner of Borrower. 4 C. DEBT. Permit Borrower's Debt to ever exceed $2,500,000.00, exclusive of (i) amounts due under the Note and (ii) amounts due by Borrower to Gerald J. Ford, or entities directly or indirectly controlled by him, in respect of advances or loans to Borrower. For purposes of the foregoing sentence, Debt means, whether or not contingent, (a) debt for borrowed money or for the deferred purchase price of property or services (other than current trade liabilities) or that is evidenced by a note, bond, debenture or similar instrument, (b) capitalized lease obligations, (c) obligations in respect of letters of credit or bankers' acceptances, (d) liabilities secured by any lien on any property owned by the debtor even if the debtor has not assumed or otherwise become liable for the payment thereof, to the extent of the value of the property subject to such lien, (e) any guaranty of any lease obligation, and (f) to the extent not otherwise included, any guaranty of any debt, obligation or liability described in clauses (a) through (e) above. D. MINIMUM BOOK VALUE. Permit the net worth of Borrower, as determined in accordance with GAAP, to ever be less than $100,000,000.00. E. NEGATIVE PLEDGE, ETC. Directly or indirectly transfer or otherwise dispose of any shares of First Nationwide Holdings, Inc. presently owned by Borrower, or create, or permit or suffer to exist any lien, encumbrance, charge or security interest of any kind on such shares (other than as created by this Section 6.E). For purposes of the foregoing sentence, "presently owned" includes any additional shares received in connection with a stock split, stock dividend, recapitalization or reclassification of capital stock, in each case in which shares owned as of the date hereof are the basis or consideration for such additional shares. F. SUBORDINATION. During the occurrence and continuance of an Event of Default (as defined in the Note), make any payments, of principal, interest or otherwise, in respect of obligations to Gerald J. Ford or entities affiliated with him, all of which obligations shall then be subordinate in right of payment as provided in that certain Subordination Agreement (Effective During Default) dated of even date herewith between Bank and Gerald J. Ford. 7. ACCOUNTS OR DEPOSITS OF GERALD J. FORD. Notwithstanding any provision herein or in any of the other Loan Documents to the contrary, Bank shall not attempt to set off, capture, or restrict the use of any of the accounts or deposits of Gerald J. Ford with Bank to discharge any of the obligations arising under the Loan Documents unless Bank has first received a judgment against Mr. Ford evidencing his obligation to pay such obligations, and then only as permitted by applicable law. 8. MISCELLANEOUS. A. EXPENSES. Borrower agrees to pay all reasonable out-of-pocket expenses of Bank in connection with this Agreement, the Note and the other Loan Documents and the collection of the Note including, without limitation, reasonable attorneys' fees, and expenses relating to the administration, enforcement and realization upon any collateral or guaranty. B. CUMULATIVE RIGHTS AND NO WAIVER. Each and every right granted to Bank hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative of and may be exercised in addition to any and all other rights of Bank, and no delay in exercising any right shall operate as a waiver thereof, nor shall any single or partial exercise by Bank of any right preclude any other or future exercise thereof or the exercise of any other right. Any of the foregoing covenants and agreements may be waived by Bank but only in writing signed by a Vice President or higher level officer of Bank. No notice to or demand on Borrower in any case shall, of itself, entitle Borrower to any other or further notice or demand in similar or other circumstances. No delay or omission by Bank in exercising any power or right hereunder shall impair any such right or power or be construed as a 5 waiver thereof or any acquiescence therein, nor shall any single or partial exercise of any such power preclude other or further exercise thereof, or the exercise of any other right or power hereunder. C. MAXIMUM INTEREST. Notwithstanding any other provision contained in this Agreement, Bank does not intend to charge and Borrower shall not be required to pay any amount of interest or other fees or charges that is in excess of the maximum permitted by applicable law. Borrower agrees that during the full term hereof, the maximum lawful interest rate for the obligations hereunder as determined under Texas law shall be the indicated rate ceiling as specified in Article 5069-1.04 of V.A.T.S. Further, to the extent that any other lawful rate ceiling exceeds the rate ceiling so determined, then the higher rate ceiling shall apply. Any payment in excess of such maximum shall be refunded to Borrower or credited against principal, at the option of Bank. D. NOTICE. Except as otherwise provided in this Agreement, any notices or communications required or permitted hereunder shall be in writing and shall be deemed to have been given (i) the day it is personally delivered, if sent by hand or expedited delivery service, or (ii) five days after it is mailed, if sent by certified or registered mail. E. APPLICABLE LAW. This Agreement and the rights and obligations of the parties hereunder shall be governed by and interpreted in accordance with the laws of the State of Texas (without regard to its conflicts of law provisions). F. AMENDMENT. No modification, consent, amendment or waiver of any provision of this Agreement, nor consent to any departure by Borrower therefrom, shall be effective unless the same shall be in writing and signed by a Vice President or higher level officer of Bank, and then shall be effective only in the specific instance and for the purpose for which given. This Agreement is binding upon Borrower, its successors and assigns, and inures to the benefit of Bank, its successors and assigns. G. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION. 1) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE COUNTY OF ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS INSTRUMENT, AGREEMENT OR DOCUMENT AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS. 6 2) RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. BANK MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES. H. NOTICE OF FINAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written. HUNTER'S GLEN/FORD, LTD. NATIONSBANK OF TEXAS, N.A. By: /s/ Gerald J. Ford By: /s/ Michele Huff ------------------------- --------------------------- GERALD J. FORD Michele Huff General Partner Vice President, Private Client Group By: FORD DIAMOND CORPORATION General Partner By: /s/ Gerald J. Ford ------------------------ Gerald J. Ford President --------- 7 EX-99.B 3 PROMISSORY NOTE DATED AUG. 15, 1996 EXHIBIT B PROMISSORY NOTE DATED AUGUST 15, 1996 BETWEEN HUNTER'S GLEN/FORD, LTD. AND NATIONSBANK OF TEXAS, N.A. NATIONSBANK PROMISSORY NOTE Date: August 15, 1996 [X] New [ ] Renewal Amount: $10,000,000.00 Maturity Date: August 14, 1997 - -------------------------------------------------------------------------------- Bank: Borrower: NationsBank of Texas, N.A. Hunter's Glen/Ford, Ltd. 901 Main Street, 19th Floor 200 Crescent Court, Suite 1350 Dallas, Texas 75202 Dallas, Texas 75201 Dallas County Dallas County (Street address including county) (Name and street address, including county) - -------------------------------------------------------------------------------- FOR VALUE RECEIVED, the undersigned Borrower unconditionally (and jointly and severally, if more than one) promises to pay to the order of Bank, its successors and assigns, without setoff, at its offices indicated at the beginning of this Note, or at such other place as may be designated by Bank, the principal amount of TEN MILLION and No/100 Dollars ($10,000,000.00), or so much thereof as may be advanced from time to time in immediately available funds, together with interest computed daily on the outstanding principal balance hereunder, at an annual interest rate, and in accordance with the payment schedule, indicated below. 1. ADVANCE REQUEST. Each advance (sometimes herein also referred to as a "loan") shall be made by written request therefor to Bank (stating whether the advance is to bear interest at the Prime Rate or a Libor Rate, the amount of the advance, the date of the advance and in the case of each Libor Rate advance, the Libor Interest Period for such advance) not later than 11:00 a.m., Dallas, Texas, time, given by Borrower to Bank (i) as to any Libor Rate advance, at least two (2) Business Days prior to the date of such advance and (ii) as to any Prime Rate advance, on the day of such advance (with all defined terms not previously defined being defined as provided in Exhibit A attached hereto). Bank shall on the date of the advance, not later than 1:00 p.m., Dallas, Texas, time, in immediately available funds, deposit the proceeds of such advance in the general deposit account of Borrower with Bank. 2. RATE. SEE EXHIBIT A (INTEREST OPTION PROVISIONS) ATTACHED HERETO AND INCORPORATED HEREIN BY REFERENCE. Notwithstanding any provision of this Note, Bank does not intend to charge and Borrower shall not be required to pay any amount of interest or other charges in excess of the maximum permitted by applicable law. Borrower agrees that during the full term hereof, the maximum lawful interest rate for this Note as determined under Texas law shall be the indicated rate ceiling as specified in Article 5069-1.04 of V.A.T.S. Further, to the extent that any other lawful rate ceiling exceeds the rate ceiling so determined then the higher rate ceiling shall apply. Any payment in excess of such maximum shall be refunded to Borrower or credited against principal, at the option of Bank. 3. ACCRUAL METHOD. Interest at the Rate set forth above will be calculated based on the number of actual days elapsed, and computed as if each year considered of 365 or 366 days, as the case may be. 4. RATE CHANGE DATE. Any interest rate based on a fluctuating index or base rate will change, unless otherwise provided, each time and as of the date that the index or base rate changes. 5. PAYMENT SCHEDULE. All payments received hereunder shall be applied first to the payment of any expense or charges payable hereunder or under any other loan documents executed in connection with this Note, then to interest due and payable, with the balance applied to principal, or in such other order as Bank shall determine at its option. 1 Borrower shall repay the principal amount of each advance under this Note on the earliest of (i) acceleration by Bank pursuant to Section 11, (ii) with respect to each advance under this Note bearing interest based on a Libor Rate Option, the last day of Libor Interest Period for such advance, and (iii) with respect to advances under this Note bearing interest based on a Prime Rate Option, on August 14, 1997. 6. REVOLVING FEATURE. Borrower may borrow, repay and reborrow hereunder at any time, up to a maximum aggregate amount outstanding at any one time equal to the principal amount of this Note, provided that Borrower is not in default under any provision of this Note, any other documents executed in connection with this Note, or any other note or other loan documents now or hereafter executed in connection with any other obligation of Borrower to Bank, and provided that the borrowings hereunder do not exceed any borrowing base or other limitation on borrowings by Borrower. Bank shall incur no liability for its refusal to advance funds based upon its determination that any conditions of such further advances have not been met. Bank records of the amounts borrowed from time to time shall be conclusive proof thereof. 7. WAIVERS, CONSENTS AND COVENANTS. Borrower or any indorser or guarantor hereof (individually an "Obligor" and collectively "Obligors") and each of them jointly and severally: (a) waive presentment, demand, protest, notice of demand, notice of intent to accelerate, notice of acceleration of maturity, notice of protest, notice of nonpayment, notice of dishonor, and any other notice required to be given under the law to any Obligor in connection with the delivery, acceptance, performance, default or enforcement of this Note, any indorsement or guaranty of this Note, or any other documents executed in connection with this Note (the "Loan Documents") or any other note or other loan documents now or hereafter executed in connection with any obligation of Borrower to Bank; (b) consent to all delays, extensions, renewals or other modifications of this Note or the Loan Documents, or waivers of any term hereof or of the Loan Documents, or release or discharge by Bank of any of Obligors, or release, substitution or exchange of any security for the payment hereof, or the failure to act on the part of Bank, or any indulgence shown by Bank (without notice to or further assent from any of Obligors), and agree that no such action, failure to act or failure to exercise any right or remedy by Bank shall in any way affect or impair the obligations of any Obligors or be construed as a waiver by Bank of, or otherwise affect, any of Bank's rights under this Note, under any indorsement or guaranty of this Note or under any of the Loan Documents; and (c) agree to pay, on demand, all reasonable costs and expenses of collection or defense of this Note or of any indorsement or guaranty hereof and/or the enforcement or defense of Bank's rights with respect to, or the administration, supervision, preservation, or protection of, or realization upon, any property securing payment hereof, including, without limitation, reasonable attorney's fees, including fees related to any suit, mediation or arbitration proceeding, out of court payment agreement, trial, appeal, bankruptcy proceedings or other proceeding, in such amount as may be determined reasonable by any arbitrator or court, whichever is applicable. 8. PREPAYMENTS. All prepayments of principal shall be applied consistent with Borrower's instructions, or in the absence of such instructions in such order as Bank shall determine in its sole discretion. Prepayments may be made in whole or in part at any time, without premium or penalty, on any loan for which the Rate is based on the Prime Rate. No prepayment of any loan based on a Libor Rate shall be permitted without the prior written consent of Bank. Notwithstanding such prohibition, if there is a prepayment of any such loan based on a Libor Rate, whether by consent of Bank, or because of acceleration or otherwise, Borrower shall, within 15 days of any request by Bank, pay to Bank any loss or expense which Bank may incur or sustain as a result of such prepayment. For the purposes of calculating the amounts owed only, it shall be assumed that Bank actually funded or committed to fund the loan evidenced hereby based on a Libor Rate through the purchase of an underlying deposit in an amount and for a term comparable to such loan, and such determination by Bank shall be conclusive, absent a manifest error in computation. 9. EVENTS OF DEFAULT. It shall be an event of default ("Event of Default") under this Note and each of any other documents executed in connection herewith if any of the following shall occur: (i) Borrower shall fail to make any payment of principal, interest or other amounts under this Note when due and such default shall continue for a period of five (5) Business Days; (ii) Borrower shall not have received cash dividend income from First Nationwide Holdings, Inc. of $7,000,000.00 or more during each six months ending June 2 30 and December 31; (iii) a default, breach or failure to timely and properly pay, observe or perform, shall occur under any other Loan Document and such default, breach, or other failure, if the same can be cured, shall continue for a period of fifteen (15) Business Days after notice by Bank to Borrower thereof; (iv) any voluntary bankruptcy proceeding or any similar action is commenced with respect to Borrower or any of its assets; (v) any involuntary bankruptcy proceeding or similar action is commenced with respect to Borrower or any of its assets and such proceeding is not dismissed within 60 days after commencement; (vi) Bank shall in good faith believe that the prospect of payment of amounts due with respect to this Note has been impaired; (vii) any representation or warranty made by Borrower in connection with this Note shall be false or incorrect in any material respect when made or deemed made and, if the same can be made true or corrected, such falsity or incorrectness shall continue for a period of fifteen (15) Business Days after notice by Bank to Borrower thereof; or (viii) the resignation or withdrawal of any general partner of Borrower (but not any deemed resignation or withdrawal resulting from the death of an individual general partner). 10. REMEDIES UPON DEFAULT. Whenever an Event of Default has occurred and is continuing (a) the entire balance outstanding hereunder and all other obligations of any Obligor to Bank (however acquired or evidenced) arising under or in connection with the Loan Documents shall, at the option of Bank, become immediately due and payable and any obligation of Bank to permit further borrowing under this Note shall immediately cease and terminate, and/or (b) to the extent permitted by law, the rate of interest on the unpaid principal shall be increased at Bank's discretion up to the lesser of (i) the maximum rate allowed by law or (ii) the Prime Rate plus 4% per annum (the "Default Rate"). The provisions herein for a Default Rate shall not be deemed to extend the time for any payment hereunder or to constitute a "grace period" giving Obligors a right to cure any default. At Bank's option, any accrued and unpaid interest, fees or charges may, for purposes of computing and accruing interest on a daily basis after the due date of this Note or any installment thereof, be deemed to be a part of the principal balance, and interest shall accrue on a daily compounded basis after such date at the Default Rate provided in this Note until the entire outstanding balance of principal and interest is paid in full. Upon an Event of Default under this Note, Bank is hereby authorized at any time, at its option and without notice or demand, to set off and charge against any deposit accounts of any Obligor (as well as any money, instruments, securities, documents, chattel paper, credits, claims, demands, income and any other property, rights and interests of any Obligor), that at any time shall come into the possession or custody or under the control of Bank or any of its agents, affiliates or correspondents, any and all obligations due hereunder. Additionally, Bank shall have all rights and remedies available under each of the Loan Documents, as well as all rights and remedies available at law or in equity. 11. NON-WAIVER. The failure at any time of Bank to exercise any of its options or any other rights hereunder shall not constitute a waiver thereof, nor shall it be a bar to the exercise of any of its options or rights at a later date. All rights and remedies of Bank shall be cumulative and may be pursued singly, successively or together, at the option of Bank. The acceptance by Bank of any partial payment shall not constitute a waiver of any default or Event of Default or of any of Bank's rights under this Note. No waiver of any of its rights hereunder, and no modification or amendment of this Note, shall be deemed to be made by Bank unless the same shall be in writing, duly signed on behalf of Bank; each such waiver shall apply only with respect to the specific instance involved, and shall in no way impair the rights of Bank or the obligations of Obligors to Bank in any other respect at any other time. 12. APPLICABLE LAW, VENUE AND JURISDICTION. Borrower agrees that this Note shall be deemed to have been made in the State of Texas at Bank's address indicated at the beginning of this Note and shall be governed by, and construed in accordance with, the laws of the State of Texas and is performable in the City and County of Texas indicated at the beginning of this Note. In any litigation in connection with or to enforce this Note or any indorsement or guaranty of this Note or any Loan Documents, Obligors, and each of them, irrevocably consent to and confer personal jurisdiction on the courts of the State of Texas or the United States courts located within the State of Texas. Nothing contained herein shall, however, prevent Bank from bringing any action or exercising any rights within any other state or jurisdiction or from obtaining personal jurisdiction by any other means available under applicable law. 3 13. PARTIAL INVALIDITY. The unenforceability or invalidity of any provision of this Note shall not affect the enforceability or validity of any other provision herein and the invalidity or unenforceability of any provision of this Note or of the Loan Documents to any person or circumstance shall not affect the enforceability or validity of such provision as it may apply to other persons or circumstances. 14. BINDING EFFECT. This Note shall be binding upon and inure to the benefit of Borrower, Obligors and Bank and their respective successors, assigns, heirs and personal representatives, provided, however, that no obligations of Borrower -------- ------- or Obligors hereunder can be assigned without prior written consent of Bank. 15. CONTROLLING DOCUMENT. To the extent that this Note conflicts with or is in any way incompatible with any other document related specifically to the loan evidenced by this Note, this Note shall control over any other such document, and if this Note does not address an issue, then each other such document shall control to the extent that it deals most specifically with an issue. 16. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION. A. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE COUNTY OF ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS INSTRUMENT, AGREEMENT OR DOCUMENT AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS. B. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. BANK MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES 4 SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES. BORROWER REPRESENTS TO BANK THAT THE PROCEEDS OF THIS LOAN ARE TO BE USED PRIMARILY FOR BUSINESS, COMMERCIAL OR AGRICULTURAL PURPOSES. BORROWER ACKNOWLEDGES HAVING READ AND UNDERSTOOD, AND AGREES TO BE BOUND BY, ALL TERMS AND CONDITIONS OF THIS NOTE. NOTICE OF FINAL AGREEMENT: THIS WRITTEN PROMISSORY NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. BANK: NATIONSBANK OF TEXAS, N.A. BORROWER: HUNTER'S GLEN/FORD, LTD. By: /s/ Michele Huff ---------------------- Michele Huff Vice President, Private Client By: FORD DIAMOND CORPORATION, Group General Partner By: /s/ Gerald J. Ford ------------------------------ Gerald J. Ford, President By: /s/ Gerald J. Ford ------------------------------- GERALD J. FORD, General Partner 5 EXHIBIT A INTEREST OPTION PROVISIONS THIS EXHIBIT A is attached to and forms a part of that certain PROMISSORY NOTE (the "Note"), dated August 15, 1996, between Hunter's Glen/Ford, Ltd., a Texas limited partnership ("Borrower), and NationsBank of Texas, N.A. ("Bank"). 1. Borrower's Rates. On the terms and subject to the conditions set forth below, Borrower will be able to select, from one of the following Rate Options, an interest rate (a "Rate") that will be applicable to a particular dollar increment of amounts outstanding, or to be disbursed, under the Note: (a) The Prime Rate (the "Prime Rate Option"); and (b) The Libor Rate, plus 2.00% per annum (the "Libor Rate Option"). Interest based on the Prime Rate Option is a floating rate and will change on and as of the date of a change in the Prime Rate. Interest based on the Libor Rate Option will be fixed for periods of 30, 60, 90, 120 and 180 days (each a "Libor Interest Period"). 2. Selection of Applicable Interest Rate. ------------------------------------- (a) Request. Borrower may request (a "Rate Request") that a $100,000 increment or any amount in excess thereof (an "Increment") of the outstanding principal of, or amounts to be disbursed under, the Note bear interest at the Libor Rate Option or the Prime Rate Option by telephonic notice no later than 11:00 a.m. (Dallas, Texas time) (i) at least two (2) Business Days prior to the effective date of the Rate Request, in the case of the Libor Rate Options, or (ii) the same date, in the case of the Prime Rate Option. Each Rate request shall specify: (i) whether the applicable interest rate shall be Prime Rate Option or the Libor Rate Option; (ii) the Interest Period. All such requests shall be recorded by Bank on a schedule attached hereto or otherwise maintained by Bank which schedule shall be conclusive evidence of the Interest Periods and applicable Rate Options and shall be binding on Borrower. (b) Applicable Interest Rates. Borrower's Rate Request will become effective, and interest on the Increment designated will be calculated at the rate requested by Borrower for the applicable Interest Period, subject to the following: (i) Notwithstanding any Rate Request, interest shall be calculated on the basis of the Prime Pate Option if (a) Bank, in good faith, is unable to ascertain the Libor Rate by reason of circumstances then affecting the applicable money market or otherwise, (b) it becomes unlawful or impracticable for the Bank to maintain loans based upon Libor Rate, or (c) Bank, in good faith, determines that it is impracticable to maintain loans based on the Libor Rate because of increased taxes, regulatory costs, reserve requirements, expenses or any other costs or charges that affect such Rate Options. Upon the occurrence of any of the above events, any increment to which a Libor Rate Option applies, shall be immediately (or at the option of Bank, at the end of the current Libor Interest Period), without further action of Borrower or Bank, converted to an Increment to which the Prime Rate Option applies. (ii) A Rate Request shall be effective as to amounts to be disbursed under the Note only if, on the effective date of the Rate Requests, such amounts are in fact disbursed to or for the account of the Borrower in accordance with the provisions of the Note and any related loan documents. (iii) Any amount of outstanding principal for which a Rate Request has not been made, or which is otherwise not effective, shall bear interest until paid in full at the Prime Rate Option. 1 (iv) Any amounts of outstanding principal bearing interest based upon the Libor Rate Option shall bear interest at such rate until the end of the Interest Period therefor, and thereafter shall bear interest based upon the Prime Rate Option unless a new Rate Request for a Libor Rate Option complying with the terms hereof has been made and has become effective. (v) If an Event of Default has occurred and is continuing, then Bank shall no longer be obligated to honor any Rate Requests. (vi) No Libor Interest Period shall extend beyond the maturity date of the Note. (c) Repayment. Principal and interest shall be payable as detailed in the Promissory Note. 3. Defined Terms. The following terms as used in this Exhibit A shall have the following meanings: "Business Day" shall mean a day on which Bank is open for business and dealing in deposits in Dallas, Texas. "Libor Rate" shall mean with respect to any Libor Interest Period, the rate of interest per annum (rounded upward, if necessary, to the next higher 1/16 of 1%) determined by Bank, in accordance with its customary general practice from time to time, to be the ratio at which deposits in immediately available funds in Dollars are or would be offered or quoted by Bank to major banks in the London Interbank market, as of approximately 11:00 a.m. London time, or as soon thereafter as practicable, on the second Business Day immediately preceding the first day of such Interest Period, for a term comparable to such Interest Period, as adjusted from time to time in Bank's sole discretion for then applicable reserve requirements, deposit insurance assessment rates and other regulatory costs. "Prime Rate" shall mean the rate of interest publicly announced from time to time by Bank at its office in Dallas, Texas as its "Prime Rate." 4. Notices; Authority to Act. Borrower acknowledges and agrees that the agreement of Bank herein to receive certain notices by telephone is solely for the convenience of Borrower. Bank shall be entitled to rely on the authority of the person purporting to be a person authorized by Borrower to give such notice, and Bank shall have no liability to Borrower on account of any action taken by Bank in reliance upon such telephonic notice. The obligation of Borrower to repay all sums owing under the Note shall not be affected in any way or to any extent by any failure by Bank to receive written confirmation of any telephonic notice or the receipt by Bank of a confirmation which is at variance with the terms understood by Bank to be contained in the telephonic notice. 2 IN WITNESS WHEREOF, the parties hereto have caused this Exhibit A to be duly executed August 15, 1996. BANK: NATIONSBANK OF TEXAS, N.A. BORROWER: HUNTER'S GLEN/FORD, LTD. By: /s/ Michele Huff --------------------------- Michele Huff Vice President, Private Client By: FORD DIAMOND CORPORATION, Group General Partner By: /s/ Gerald J. Ford --------------------------- Gerald J. Ford, President ----------- By: /s/ Gerald J. Ford --------------------------- GERALD J. FORD, General Partner 3 EX-99.C 4 PLEDGE AGMT. DATED AUG. 15, 1996 EXHIBIT C PLEDGE AGREEMENT DATED AUGUST 15, 1996 BETWEEN HUNTER'S GLEN/FORD, LTD. AND NATIONSBANK OF TEXAS, N.A. NATIONSBANK Date: August 15, 1996 PLEDGE AGREEMENT
==================================================================================================================================== BANK/SECURED PARTY: PLEDGOR/DEBTOR: NationsBank of Texas, N.A. Hunter's Glen/Ford, Ltd. Banking Center: 200 Crescent Court, Suite 1350 Dallas, Texas 75201 901 Main Street 19th Floor Dallas County Dallas, Texas 75202 Dallas County (Street address including county) (Name and street address including county) ==================================================================================================================================== Pledgor/Debtor is: [ ] Individual [ ] Corporation [ X ] Partnership [ ] Other Address is Pledgor's/Debtor's: [ ] Residence [ X ] Place of Business [ ] Chief Executive Office if more than one place of business ====================================================================================================================================
This Pledge Agreement ("Agreement") contains some provisions preceded by boxes. If a box is marked, the provision applies to this transaction; if it is not marked, the provision does not apply to this transaction. 1. SECURITY INTEREST. For good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Pledgor/Debtor (hereinafter referred to as "Pledgor") pledges, assigns and grants to Bank a security interest and lien in the Collateral (hereinafter defined) to secure the payment and the performance of the Obligation (hereinafter defined). 2. COLLATERAL. The security interest is granted in the following collateral (the "Collateral"): A. DESCRIPTION OF COLLATERAL. The following investment property and/or securities, together with all investment property and/ or securities hereafter delivered to Bank in substitution therefor or in addition thereto: see Exhibit A attached hereto and incorporated herein by reference. B. PROCEEDS. All additions, substitutes and replacements for and proceeds of the above Collateral (including all income and benefits resulting from any of the above, such as dividends payable or distributable in cash, property or stock; interest, premium and principal payments; redemption proceeds and subscription rights; and shares or other proceeds of conversions or splits of any securities in the Collateral). Any investment property and/or securities received by Pledgor, which shall comprise such additions, substitutes and replacements for, or proceeds of, the Collateral, shall be held in trust for Bank and shall be delivered immediately to Bank. If no Event of Default has occurred and is continuing, Borrower may use any cash proceeds in its discretion; if an Event of Default has occurred and is continuing, then any cash proceeds shall be held in trust for Bank and shall be delivered immediately to Bank. C. DEPOSIT ACCOUNTS. The balance of every deposit account of Pledgor maintained with Bank and any other claim of Pledgor against Bank, now or hereafter existing, liquidated or unliquidated, and all money, instruments, investment property, securities, documents, chattel paper, credits, claims, demands, income, and 1 any other property, rights and interests of Pledgor which at any time shall come into the possession or custody or under the control of Bank or any of its agents or affiliates, for any purpose, and the proceeds of any thereof. Bank shall be deemed to have possession of any of the Collateral in transit to or set apart for it or any of its agents or affiliates. 3. OBLIGATION. A. DESCRIPTION OF OBLIGATION. The following obligations ("Obligations") are secured by this Agreement: i. All debt arising under that certain Promissory Note (the "Promissory Note") in the principal face amount of $10,000,000.00 dated August 15, 1996 between Pledgor and Bank, and all renewals, extensions and rearrangements of the above; ii. All reasonable costs and expenses incurred by Bank, including attorney's fees, to obtain, preserve, perfect, enforce and defend this Agreement and maintain, preserve, collect and realize upon the Collateral, together with interest thereon at the lesser of (a) the highest rate allowed by law or (b) the Prime Rate (as defined in the Promissory Note) plus 4% per annum; and iii. All amounts which may be owed to Bank pursuant to all other loan documents executed in connection with the indebtedness described in subpart i. above. In the event any amount paid to Bank on any Obligation is subsequently recovered from Bank in or as a result of any bankruptcy, insolvency or fraudulent conveyance proceeding involving an obligor of the Obligation other than Pledgor, Pledgor shall be liable to Bank for the amounts so recovered up to the fair market value of the Collateral whether or not the Collateral has been released or the security interest terminated. In the event the Collateral has been released or the security interest terminated, the fair market value of the Collateral shall be determined, at Bank's option, as of the date the Collateral was released, the security interest terminated, or said amounts were recovered. B. USE OF PROCEEDS. The proceeds of any indebtedness or obligation secured by the Collateral may be used directly or indirectly to purchase or carry any "margin stock" as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System, or extend credit to or invest in other parties for the purpose of purchasing or carrying any such "margin stock," or to reduce or retire any indebtedness incurred for such purpose or otherwise in a manner which would not violate Regulations G, T or U. 4. PLEDGOR'S WARRANTIES. Pledgor hereby represents and warrants to Bank as follows: A. FINANCING STATEMENTS. No financing statement covering the Collateral is or will be on file in any public office, except any financing statements relating to this security interest, and no security interest, other than the one herein created, has attached or been perfected in the Collateral or any part thereof. B. OWNERSHIP. Upon the delivery to Bank of the stock certificate referenced on Exhibit A, Pledgor will own the Collateral free from any setoff, claim, restriction, lien, security interest or encumbrance except liens for taxes not yet due and payable and the security interest hereunder. C. POWER AND AUTHORITY. Pledgor has full power and authority to make this Agreement, and all necessary consents and approvals of any persons, entities, governmental or regulatory authorities and securities exchanges have been obtained to effectuate the validity of this Agreement. 5. PLEDGOR'S COVENANTS. Until full payment and performance of all of the Obligation and termination or expiration of any obligation or commitment of Bank to make advances or loans to Pledgor, unless Bank otherwise consents in writing: 2 A. OBLIGATION AND THIS AGREEMENT. Pledgor shall perform all of its agreements herein and in any other agreements between it and Bank. B. OWNERSHIP OF COLLATERAL. Pledgor shall defend the Collateral against all claims and demands of all persons at any time claiming any interest therein adverse to Bank. Pledgor shall keep the Collateral free from all liens and security interests except those for taxes not yet due and payable and the security interest hereby created. Pledgor shall furnish to Bank on or before February 15th of each year proof of payment of any ad valorem taxes payable on the Collateral. C. BANK'S COSTS. Pledgor shall pay all costs necessary to obtain, preserve, perfect, defend and enforce the security interest created by this Agreement, collect the Obligation, and preserve, defend, enforce and collect the Collateral, including but not limited to taxes, assessments, reasonable attorney's fees, legal expenses and expenses of sales. Whether the Collateral is or is not in Bank's possession, and without any obligation to do so and without waiving Pledgor's default for failure to make any such payment, Bank at its option may pay any such costs and expenses and discharge encumbrances on the Collateral, and such payments shall be a part of the Obligation and bear interest at the rate set out in the Obligation. Pledgor agrees to reimburse Bank on demand for any costs so incurred. D. INFORMATION AND INSPECTION. Pledgor shall (i) promptly furnish Bank any information with respect to the Collateral requested by Bank; (ii) allow Bank or its representatives to inspect and copy, or furnish Bank or its representatives with copies of, all records relating to the Collateral and the Obligation; and (iii) promptly furnish Bank or its representatives with any other information Bank may reasonably request. E. ADDITIONAL DOCUMENTS. Pledgor shall sign and deliver any papers furnished by Bank which are necessary or desirable in the judgment of Bank to obtain, maintain and perfect the security interest hereunder and to enable Bank to comply with any federal or state law in order to obtain or perfect Bank's interest in the Collateral or to obtain proceeds of the Collateral. F. NOTICE OF CHANGES. Pledgor shall notify Bank immediately of (i) any material adverse change in the Collateral, (ii) a change in Pledgor's residence or location, (iii) a material adverse change in any matter warranted or represented by Pledgor in this Agreement, or in any of the loan documents relating to the Obligation or furnished to Bank pursuant to this Agreement, and (iv) the occurrence of an Event of Default (as defined herein) relating hereto. G. POSSESSION OF COLLATERAL. Pledgor shall deliver a copy of this Agreement (or other notice acceptable to Bank) to any broker, financial intermediary, or any other person in possession of any of the Collateral or on whose books the interest of Pledgor in the Collateral appears, and such delivery shall constitute notice to such person of Bank's security interest in the Collateral and shall constitute Pledgor's instruction to such person to note Bank's security interest on their books and records, or deliver to Bank certificates or other evidence of the Collateral promptly upon Bank's request. Pledgor shall deliver all investment securities and other instruments and documents which are a part of the Collateral and in Pledgor's possession to Bank immediately, or if hereafter acquired, immediately following acquisition, in a form suitable for transfer by delivery or accompanied by duly executed instruments of transfer or assignment in blank with signatures appropriately guaranteed in form and substance suitable to Bank. H. CHANGE OF NAME. Pledgor shall not change its name or change its partnership status. I. POWER OF ATTORNEY. Pledgor appoints Bank and any officer thereof as Pledgor's attorney-in-fact with full power in Pledgor's name and on Pledgor's behalf to do every act which Pledgor is obligated to do or may be required to do hereunder; however, nothing in this paragraph shall be construed to obligate Bank to take any action hereunder nor shall Bank be liable to Pledgor for failure to take any action hereunder. This appointment shall be deemed a power coupled with an interest and shall not be terminable as long as the Obligation is outstanding and shall not terminate on the disability or incompetence of Pledgor. Without 3 limiting the generality of the foregoing, Bank shall have the right and power to receive, indorse and collect all checks and other orders for the payment of money made payable to Pledgor representing any dividend, interest payment or other distribution payable in respect of the Collateral or any part thereof. The foregoing power of attorney may be exercised only after an Event of Default. Any person to whom the foregoing power of attorney is presented may rely conclusively as to the occurrence of an Event of Default upon Bank's written statement to such person that an Event of Default has occurred, and Pledgor agrees to fully and completely indemnify and hold harmless any such person so relying. J. OTHER PARTIES AND OTHER COLLATERAL. No renewal or extensions of or any other indulgence with respect to the Obligation or any part thereof, no modification of the document(s) evidencing the Obligation, no release of any security, no release of any person (including any maker, indorser, guarantor or surety) liable on the Obligation, no delay in enforcement of payment, and no delay or omission or lack of diligence or care in exercising any right or power with respect to the Obligation or any security therefor or guaranty thereof or under this Agreement shall in any manner impair or affect the rights of Bank under any law, hereunder, or under any other agreement pertaining to the Collateral. Bank need not file suit or assert a claim for personal judgment against any person for any part of the Obligation or seek to realize upon any other security for the Obligation, before foreclosing or otherwise realizing upon the Collateral. Pledgor waives any right that can be waived to the benefit of or to require or control application of any other security or proceeds thereof, and agrees that Bank shall have no duty or obligation to Pledgor to apply to the Obligation any such other security or proceeds thereof. K. WAIVERS BY PLEDGOR. Pledgor waives notice of the creation, advance, increase, existence, extension or renewal of, and of any indulgence with respect to, the Obligation; waives presentment, demand, notice of dishonor, and protest; waives notice of the amount of the Obligation outstanding at any time, notice of any change in financial condition of any person liable for the Obligation or any part thereof, notice of any Event of Default, and all other notices respecting the Obligation; and agrees that maturity of the Obligation and any part thereof may be accelerated, extended or renewed one or more times by Bank in its discretion, without notice to Pledgor. Pledgor waives any right to require that any action be brought against any other person or to require that resort be had to any other security or to any balance of any deposit account. Pledgor further waives any right of subrogation or to enforce any right of action against any other pledgor until the Obligation is paid in full. L. ADDITIONAL PROVISIONS. If one or more Riders to this Agreement are executed by Pledgor, the covenants and provisions of each such Rider shall be incorporated by reference into this Agreement (check applicable boxes). [ ] COLLATERAL MAINTENANCE RIDER: Pledgor agrees to maintain the Collateral in accordance with the terms of the Collateral Maintenance Rider attached hereto and made a part hereof for all purposes. [x] RULE 144 RIDER: The Collateral is comprised in whole or in part of control and/or restricted securities, which shall be subject to the additional terms and provisions described on the Rule 144 Rider attached hereto and made a part hereof for all purposes. 6. RIGHTS AND POWERS OF BANK. A. GENERAL. 1. Bank, before or after an Event of Default, without liability to Pledgor, may release Collateral in its possession to Pledgor, temporarily or otherwise. 2. Bank, during the continuance of an Event of Default, without liability to Pledgor, may: take control of proceeds, including stock received as dividends or by reason of stock splits; take 4 control of funds generated by the Collateral, such as cash dividends, interest and proceeds, and use the same to reduce any part of the Obligation; exercise all other rights that an owner of the Collateral may exercise; and at any time transfer any of the Collateral or evidence thereof into its own name or that of its nominee. Bank shall not be liable for failure to collect any account or instruments, or for any other act or omission on the part of Bank, its officers, agents or employees, except for its or their own willful misconduct or gross negligence. The foregoing rights and powers of Bank will be in addition to, and not a limitation upon, any rights and powers of Bank given by law, elsewhere in this Agreement, or otherwise. B. CONVERTIBLE COLLATERAL. During the continuance of an Event of Default, Bank may present for conversion any Collateral which is convertible into any other instrument or investment security or a combination thereof with cash, but Bank shall not have any duty to present for conversion any Collateral unless it shall have received from Pledgor detailed written instructions to that effect at a time reasonably far in advance of the final conversion date to make such conversion possible. 7. DEFAULT. A. EVENT OF DEFAULT. The term Event of Default is defined herein as defined in the Promissory Note. B. RIGHTS AND REMEDIES. If any Event of Default shall occur, then, in each and every such case, Bank may, without (a) presentment, demand, or protest, (b) notice of default, dishonor, demand, non-payment, or protest, (c) notice of intent to accelerate all or any part of the Obligation, (d) notice of acceleration of all or any part of the Obligation, or (e) notice of any other kind, all of which Pledgor hereby expressly waives (except for any notice required under this Agreement, any other loan document or which may not be waived under applicable law), at any time thereafter exercise and/or enforce any of the following rights and remedies, at Bank's option: i. ACCELERATION. The Obligation shall, at Bank's option, become immediately due and payable, and the obligation, if any, of Bank to permit further borrowings under the Obligation shall at Bank's option immediately cease and terminate. ii. LIQUIDATION OF COLLATERAL. Sell, or instruct any agent or broker to sell, all or any part of the Collateral in a public or private sale, direct any agent or broker to liquidate all or any part of any account and deliver all proceeds thereof to Bank, and apply all proceeds to the payment of any or all of the Obligation in such order and manner as Bank shall, in its discretion, choose. iii. UNIFORM COMMERCIAL CODE. All of the rights, powers and remedies of a secured creditor under the Uniform Commercial Code ("UCC") as adopted in the jurisdiction to which Bank is subject under this Agreement. iv. RIGHT OF SET OFF. Without notice or demand to Pledgor, set off and apply against any and all of the Obligation any and all deposits (general or special, time or demand, provisional or final) and any other indebtedness, at any time held or owing by Bank or by any of Bank's affiliates or correspondents to or for the credit of the account of Pledgor or any guarantor or indorser of Pledgor's Obligation. Pledgor specifically understands and agrees that any sale by Bank of all or part of the Collateral pursuant to the terms of this Agreement may be effected by Bank at times and in manners which could result in the proceeds of such sale as being significantly and materially less than might have been received if such sale had occurred at different times or in different manners, and Pledgor hereby releases Bank and its officers and representatives from and against any and all obligations and liabilities arising out of or related to the timing or manner of any such sale. 5 If, in the opinion of Bank, there is any question that a public sale or distribution of any Collateral will violate any state or federal securities law, Bank may offer and sell such Collateral in a transaction exempt from registration under federal securities law, and any such sale made in good faith by Bank shall be deemed "commercially reasonable." 8. GENERAL. A. PARTIES BOUND. Bank's rights hereunder shall inure to the benefit of its successors and assigns, and in the event of any assignment or transfer of any of the Obligation or the Collateral, Bank thereafter shall be fully discharged from any responsibility with respect to the Collateral so assigned or transferred, but Bank shall retain all rights and powers hereby given with respect to any of the Obligation or the Collateral not so assigned or transferred. All representations, warranties and agreements of Pledgor shall be binding upon the successors and assigns of Pledgor. B. WAIVER. No delay of Bank in exercising any power or right shall operate as a waiver thereof; nor shall any single or partial exercise of any power or right preclude other or further exercise thereof or the exercise of any other power or right. No waiver by Bank of any right hereunder or of any default or Event of Default by Pledgor shall be binding upon Bank unless in writing, and no failure by Bank to exercise any power or right hereunder or waiver of any default or Event of Default by Pledgor shall operate as a waiver of any other or further exercise of such right or power or of any further default. Each right, power and remedy of Bank as provided for herein or in any of the loan documents related to the Obligation, or which shall now or hereafter exist at law or in equity or by statute or otherwise, shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by Bank of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by Bank of any or all other such rights, powers or remedies. C. TIME OF THE ESSENCE. Time is of the essence of this Agreement. D. DEFINITIONS. Unless the context indicates otherwise, definitions in the UCC apply to words and phrases in this Agreement; if UCC definitions conflict, Article 8 and/or 9 definitions apply. E. NOTICE. Notice shall be deemed reasonable if mailed postage prepaid at least 5 days before the related action (or if the UCC elsewhere specifies a longer period, such longer period) to the address of Pledgor given above. Each notice, request and demand shall be deemed given or made, if sent by mail, upon the earlier of the date of receipt or five (5) days after deposit in the U.S. Mail, first class postage prepaid, or if sent by any other means, upon delivery. F. MODIFICATIONS. No provision hereof shall be modified or limited except by a written agreement expressly referring hereto and to the provisions so modified or limited and signed by Pledgor and Bank. The provisions of this Agreement shall not be modified or limited by course of conduct or usage of trade. G. PARTIAL INVALIDITY. The unenforceability or invalidity of any provision of this Agreement shall not affect the enforceability or validity of any other provision herein, and the invalidity or unenforceability of any provision of any loan document related to the Obligation to any person or circumstance shall not affect the enforceability or validity of such provision as it may apply to other persons or circumstances. H. APPLICABLE LAW AND VENUE. This Agreement has been delivered in the State of Texas and shall be construed in accordance with the laws of that State. It is performable by Pledgor in the county or city of Bank's address set out above and Pledgor expressly waives any objection as to venue in any such location. Wherever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Agreement. 6 I. FINANCING STATEMENT. To the extent permitted by applicable law, a carbon, photographic or other reproduction of this Agreement or any financing statement covering the Collateral shall be sufficient as a financing statement. J. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT OR ANY RELATED INSTRUMENTS, AGREEMENTS OR DOCUMENTS, INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL DISPUTES OF J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF ("J.A.M.S."), AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION. i. SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE COUNTY OF ANY BORROWER'S DOMICILE AT THE TIME OF THE EXECUTION OF THIS INSTRUMENT, AGREEMENT OR DOCUMENT AND ADMINISTERED BY J.A.M.S. WHO WILL APPOINT AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS. ii. RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF BANK HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. BANK MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES. K. CONTROLLING DOCUMENT. To the extent that this Agreement conflicts with or is in any way incompatible with any other loan document concerning the Obligation, any promissory note shall control over any other document, and if such promissory note does not address an issue, then each other loan document shall control to the extent that it deals most specifically with an issue. 7 NOTICE OF FINAL AGREEMENT. THIS WRITTEN AGREEMENT AND ANY OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH 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. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives as of the date first above written. BANK: NATIONSBANK OF TEXAS, N.A. PLEDGOR: HUNTER'S GLEN/FORD, LTD. By: /s/ Michele Huff ----------------------------- Michele Huff Vice President, Private Client By: FORD DIAMOND CORPORATION, Group General Partner By: /s/ Gerald J. Ford -------------------------- Gerald J. Ford, President --------- By: /s/ Gerald J. Ford, -------------------------- GERALD J. FORD, General Partner 8 EXHIBIT A Liberte Investors Inc. common stock as follows: _________ shares (Certificate No. ___________________) CUSIP No. ____________________ 1 Rule 144 Rider This Rule 144 Rider is made this 15th day of August, 1996 and is incorporated into and shall be deemed to supplement the Pledge Agreement ("Agreement") of the same date given by Pledgor to secure the Obligation to Bank. Terms used and not otherwise defined in this Rider which are defined in the Agreement have the meanings given them in the Agreement. 1. The securities listed on Exhibit A hereto, which Exhibit is made a part of this Rider and the Agreement for all purposes, are or may be deemed (check one or more boxes): [X] Restricted securities [X] Control securities for purposes of Rule 144 of the General Regulations under the Securities Act of 1933 ("Rule 144") promulgated by the Securities and Exchange Commission. These securities ("Rule 144 Securities") comprise all or part of the Collateral held by Bank subject to the terms and conditions of the Agreement and this Rider. 2. Pledgor covenants and agrees that: A. If Pledgor sells any securities of the same class or convertible into the same class of securities as the Rule 144 Securities, whether or not such securities are pledged hereunder, from the date hereof until the Obligation has been paid in full, then Pledgor will furnish the Bank with a copy of any Form 144 filed in respect of such sale. If any person, party or entity with whom it shall be deemed one "person" for purposes of Rule 144(a)(2), or any affiliate of Pledgor or any such person, party or entity (as the term "affiliate" is defined in Rule 144(a)(1)) sells any securities of the same class or convertible into the same class of securities as the Rule 144 Securities, whether or not such securities are pledged hereunder, from the date hereof until the Obligation has been paid in full, then Pledgor will use its best efforts to furnish the Bank with a copy of any Form 144 filed in respect of such sale. B. Pledgor will cooperate fully with Bank with respect to any sale by Bank of any of the Rule 144 Securities, including full and complete compliance with all requirements of Rule 144, and will give to Bank all information and will do all things necessary, including the execution of all documents, forms, instruments and other items, to comply with Rule 144 for the complete and unrestricted sale and/or transfer of the Rule 144 Securities and will exercise its best efforts to have the issuer of such securities, upon the request of Bank, take all such action as may be required to satisfy the public information requirements of Rule 144(c). C. Pledgor will use its best efforts, upon Bank's written request, to obtain and publish all information necessary to satisfy Rule 144 in the event any issuer of the Rule 144 Securities is not current in its filings under the Securities Exchange Act of 1934, as amended, at the time of a foreclosure sale by Bank. 1 IN WITNESS WHEREOF, Pledgor has caused this Rider to be duly executed by its duly authorized representatives as of the date first above written. BANK: NATIONSBANK OF TEXAS, N.A. PLEDGOR: HUNTER'S GLEN/FORD, LTD. By: /s/ Michele Huff -------------------------- Michele Huff Vice President, Private Client By: FORD DIAMOND CORPORATION, Group General Partner By: /s/Gerald J. Ford ------------------------ Gerald J. Ford, President --------- By: /s/ Gerald J. Ford ------------------------- GERALD J. FORD, General Partner 2 EX-99.D 5 PROMISSORY NOTE DATED AUG. 16, 1996 EXHIBIT D PROMISSORY NOTE DATED AUGUST 16, 1996 BETWEEN HUNTER'S GLEN/FORD, LTD. AND GERALD J. FORD PROMISSORY NOTE --------------- $17,091,951 Dallas, Texas August 16, 1996 FOR VALUE RECEIVED, HUNTER'S GLEN/FORD, LTD. ("MAKER") promises to pay to the order of GERALD J. FORD ("PAYEE") at such address in Dallas, Texas, as the holder of this Note may designate from time to time in writing to Maker, the principal sum of SEVENTEEN MILLION NINETY-ONE THOUSAND NINE HUNDRED FIFTY-ONE AND NO/100 DOLLARS ($17,091,951) together with interest thereon, payable as hereinafter provided. The unpaid principal balance shall bear interest at the 90-day Eurodollar rate, as determined by NationsBank of Texas, N.A. on the relevant determination date, plus one percent (1%); provided, however, that if on any determination date the Federal Reserve has announced a Eurodollar reserve requirement, the unpaid principal shall bear interest at an interest rate equal to 1% plus a rate determined pursuant to the following formula: the 90-day London Interbank Rate divided by (100% - Eurodollar Reserve Percentage). The 90-day Eurodollar rate shall be determined on August 16, 1996 (inception of the loan) and thereafter adjusted quarterly on September 30, December 31, March 31, and June 30. Accrued and unpaid interest shall be payable semi-annually on April 15 and October 15. The unpaid principal balance, and all accrued, unpaid interest shall be due October 15, 1997. Maker shall have the right to prepay this Note in whole or in part at any time without penalty or premium. All amounts paid hereunder shall be applied first to all interest then accrued and unpaid hereunder, and the balance, if any, to principal. All past due principal and interest on this Note shall bear interest at the maximum rate permitted by law from maturity until paid. All sums called for, payable or to be paid hereunder shall be paid in lawful money of the United States of America which at the time of payment is legal tender for the payment of public and private debts therein. If default is made in the payment of this Note at maturity (regardless of how its maturity may be brought about) or the same is placed in the hands of an attorney for collection, or if suit is filed hereon, or proceedings are had in bankruptcy, probate, receivership, reorganization, or other judicial proceedings for the establishment or collection of any amount called for hereunder, or any amount payable or to be payable hereunder is collected through any such proceedings, Maker agrees to pay the holder of this Note all costs of collection, including a reasonable amount as attorney's fees. Maker hereby waives presentment and demand for payment, notice of intent to accelerate maturity, notice of acceleration of maturity, protest or notice of protest and non-payment, bringing of suit and diligence in taking any action to collect any sums owing hereunder and in proceeding against any of the rights and properties securing payment hereof, and agrees that its liability on this Note shall not be affected by any release of or change in any security for the payment of this Note. In the event of a default in the payment of any installment of either principal or interest as provided for herein, or in the performance of any agreement or covenant contained in any instrument securing payment hereof, without the giving of any notice of any kind, the holder of this Note shall have the right and option, to declare the unpaid balance of principal and accrued interest on this Note at once due and payable and to foreclose or require foreclosure of any and all liens securing payment hereof, and to exercise any and all other rights and remedies it may have. Failure to exercise this option upon any default shall not constitute a waiver of the right to exercise it in the event of any subsequent default. All notices permitted hereunder shall be given to the addressee at the following address: if to Payee, 200 Crescent Court, Suite 1350, Dallas, Texas 75201; if to Maker, 200 Crescent Court, Suite 1350, Dallas,Texas 75201. All notices given hereunder shall be in writing and shall be considered properly given if mailed by first-class United States mail, postage prepaid, registered or certified with return receipt requested, or by delivering same in person to the addressee, or by prepaid telegram. Any notice given in accordance herewith shall be effective upon receipt at the address of the addressee. It is expressly stipulated and agreed to be the intent of Maker and Payee to at all times comply with the usury and other laws applicable to this Note and the instruments securing the payment hereof (the "SECURITY INSTRUMENTS") and any subsequent revisions, repeals, or judicial interpretations thereof, to the extent any of the same are applicable hereto. If such laws athat all excess amounts theretofore collected by Payee be credited on the principal balance of this Note (or, if the Note has been paid in full, refunded to Maker), and the provisions of this Note and the Security Instruments immediately be deemed reformed and the amounts thereafter collectable hereunder and thereunder reduced, without the necessity of the execution of any new document, so as to comply with the then applicable law, but so as to permit the recovery of the fullest amount otherwise called for hereunder and thereunder. EXECUTED as of the date first written above. HUNTER'S GLEN/FORD, LTD. By: /s/ Gerald J. Ford ---------------------------- Name: Gerald J. Ford Title: General Partner Page 2 -----END PRIVACY-ENHANCED MESSAGE-----