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CAUSE NO. 10-16835 . F iL E D
in-tHe pistRic Hebe eO PH 3:23
Gary FUTZSIMMCH
Bonny, eA ELERK
COAL REI TEXAS
DEPUTY
DALLAS COUNTY, TEXAS
COMPASS BANK,
Plaintiff.
ve
. U.S.A. ENVIRONMENTAL GROUP, INC.,
BAM CONTRACTORS, INC., and
HASAN M. RABAH.
Defendants. 160"-H JUDICIAL DISTRICT
YR UR SPER OP LL IP IL LE LP TL
PLAINTIFE’S FIRST AMENDED ORIGINAL PETITION
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW Compass Bank (‘Plaintiff’), and files this its First Amended Original
Petition, complaining of U.S.A. Environmental Group, Inc., BAM Contractors, Inc. and Hasan
M. Rabah, Defendants, and for cause of action respectfully shows the Court as follows:
Discovery Control Plan
1.01 Plaintiff requests that this suit proceed under Discovery Level 2. as prescribed by
Rule 190.3 of the Texas Rules of Civil Procedure.
Parties and Service of Process
2.01 Plaintiff is an Alabama state banking corporation registered and authorized to do
business in the State of Texas.
2.02
U.S.A. Environmental “Group, Inc? (US.A.”) is a New Jerscy
corporation authorized to conduct business in the state of Texas and may be served with process
PLAIN “Ss FIRST AMENDED ORIGINAL PE: iN AGE
LAINTIFE'S FIRST AMENDED ORIGINAL PETITION ORIGINAL PAGE tHeath, Texas?
in this action by serving itsfegistered agent; Hasan M. Rabah, at 9 Terrabella |
a
75032, Or at such other place as he may be found.
2.03 Defendant BAM Contractors, Inc. is a Texas corporation that may be served with
process in this action by serving its registered agent, Jose Mier, at 2214 Sulphur Street, Dallas,
Texas 75208, or at such other place as he may be found.
2.04 Defendant(Hasan M_Rabalvis an individual resident of Rockwall County, Texas.
Defendant Hasan M. Rabah may be served with process in this action at(9_Terrabéella Laney
(Heath; Texas"75032: or at such other place as he may be found.
Yenue
3.01 Venue of this action is proper in Dallas County, Texas because Dallas County is
the county in which all or a substantial part of the events or omissions giving rise to Plainuff's
claims occurred.
Iv.
Causes of Action
A.
Breach of Promissory Note dated July 17, 2006
4.01 On or about July 17, 2006, Defendant U.S.A. Environmental Group, Inc. (“USA”)
executed a Revolving Line of Credit Note in the original, available principal amount of Three
Hundred Thousand and No/Dollars ($300,000.00), bearing interest as provided therein, payable
to Plaintiff (the “First Note”). A truce and correct copy of the First Note is attached hereto as
Exhibit “A” and is incorporated herein by reference as if fully set forth at length. The terms and
conditions of the First Note were subsequently modified and extended on several occasions,
F°S FIRST AMENDED ORIGINAL PETITION PAGE?culminating with that one certain Change In Terms Agreement dated January 31, 2010, executed
by U.S.A. in favor of Plaintiff. A true and correct copy of the Change in Terms Agrcement is
attached hereto as, Exhibit “B" and is incorporated herein by reference as if fully set forth at
_ length (the First Note and the Change in Terms Agreement are hereinafter collectively referred to
as the “First Note”).
4.02 Under the terms of the First Note, USA agreed to pay to Plaintiff the full principal
amount of the debt evidenced by the First Note, plus all interest accrued thereon, no later than
the date of maturity, June 30, 2010.
4.03 Plaintiff is the legal owner and holder of the First Note.
4.04 USA has defaulted on its obligations under the terms of the First Note by failing
to, among other things, make the payments required thereunder despite Plaintiff's demand that
said Defendant repay the obligation represented by the First Note.
4.05 Upon USA’s continued failure to make payment under the terms of the First Note,
and prior to the commencement of this suit, all sums due and owing on the First Note matured
and became due and owing. As of the date of filing this First Amended Original Petition, a
principal balance of $70,431.73 was unpaid and was due and owing, together with interest and
other fees as provided by the First Note.
4.06 By this action, Plaintiff seeks to recover from U.S.A. the unpaid principal balance
owed by it pursuant to the terms of the First Note, plus interest and all other fees and costs
thereon as provided by the First Note.
4.07 Atloffsets and credits have been given and all conditions precedent have occurred
or have been performed.
PLAINTIFE’S FIRST AMENDED ORIGINAL PETITION PaGe 3aa
4.08 Plaintiff would show that the First Note and Chapter 38 of the Texas Civil
Practice and Remedies Code provide that Plaintiff is entitled to recover the reasonable attomeys”
fees and court costs incurred in enforcing the obligations reflected by the First Note. In
connection therewith, Plaintiff has retained the undersigned attomeys to collect this indebtedness
and has ayreed to pay said attorneys a reasonable fee, and Plaintiff requests that it be awarded
such fces and costs from U.S.A. as part of any judgment rendered herein.
B.
Breach of Promissory Note dated February 22, 2007 (For Informational Purposes Only)
4.09 On or about February 22, 2007, Western States Realty, L.L.C. (“Western States”)
executed a Promissory Note in the original principal amount of One Million Two Hundred
Thousand and No/Dollars ($1,200,000.00), bearing interest as provided therein, payable to
Plaintiff (the “Second Note"). A true and correct copy of the Second Note is attached hereto as
Exhibit “C" and is incorporated herein by reference as if fully set forth at length.
4.10 Under the terms of the Sccond Note, Western States agreed to pay to Plaintiff the
full principal amount of the debt evidenced by the Second Note, plus all interest accrued thereon,
no later than the date of maturity, February 22, 2010.
4.11 — Plaintiff is the legal owner and holder of the Second Note.
4.12 Western States has defaulted on its obligations under the terms of the Second
Note by failing to, among other things, make the payments required thereunder.
4.13 Upon Western States’s continued failure to make payment under the terms of the
Third Note, and prior to the commencement of this suit, all sums due and owing on the Third
Note matured. As of the date of filing this First Amended Original Petition, a principal balance
PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION PAGESof $649,309.84 was unpaid and was duc and owing, together with interest and other fees as
provided by the Second Note.
4.14. Western States filed for bankruptcy retief on December 6, 2010 in a case styled da
re Western States Realty, L.L.C., Case No. 10-38578-HDH-11, in the United States Bankruptcy
Court for the Northem District of Texas, Dallas Division (the “Bankruptcy Case”). As a result of
the filing of the Bankruptcy Case, Plaintiff docs not by this lawsuit seck to recover any sums due |
and owing by Wester States to Plaintiff.
C.
Breach of Promissory Note dated August 29, 2007
4.15 On or about August 29, 2007, Defendant USA executed a Revolving Line of
Credit Note in the original, available principal amount of Two Hundred Seventy Thousand and
No/Dollars ($270,000.00), bearing interest as provided therein, payable to Plaintiff (the “Third
- Note”). A true and correct copy of the Third Note is attached hereto as Exhibit “D” and is
incorporated herein by reference as if fully set forth at length. The terms and conditions of the
Third Note were subsequently modified and extended on several occasions, culminating with
that one certain Change In Terms Agreement dated January 31, 2010, executed by USA in favor
of Plaintiff. A true and correct copy of the Change in Terms Agreement is attached hereto as
Exhibit “E and is incorporated herein by reference as if fully set forth at length (the Third Note
and the Change in Terms Agreement are hereinafter collectively referred to as the ‘Third Note”).
4.16 Under the terms of the Third Note, U.S.A. agreed to pay to Plaintiff the full
principal amount of the debt evidenced by the Third Note, plus all interest accrued thereon, no
later than the date of maturity, June 30, 2010.
4.17 Plaintiffis the legal owner and holder of the Third Note.
PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION PAGES.4.18 U.S.A. has defaulted on its obligations under the terms of the Third Note by
failing to, among other things, make the payments required thereunder despite Plaintiffs demand
that said Defendant repay the obligation represented by the Third Note.
4.19 Upon U.S.A.’s continued faiiure to make payment under the terms of the Third
Note, and prior to the commencement of this suit, all sums due and owing on the Third Note
matured and became due and owing. As of the date of filing this First Amended Original
Petition, a principal balance of $49,249.37 was unpaid and was due and owing, together with
" interest and other fees as provided by the Third Note.
4.20 By this action, Plaintiff seeks to recover from U.S.A. the unpaid principal balance
owed by it pursuant to the terms of the Third Note, pius interest and all other fees and costs
thereon as provided by the Third Note.
4.21 All offsets and credits have been yiven and all conditions precedent have occurred
or have been performed.
4.22 Plaintiff would show that the Third Note and Chapter 38 of the Texas Civil
Practice and Remedics Code provide that Plaintiff is entitled to recover the reasonable attomeys’
fees and court costs incurred in enforcing the obligations reflected by the Third Note. In
connection therewith, Plaintiff has retained the undersigned attomeys to collect this indebtedness
and has agreed to pay said attomeys a reasonable fee, and Plaintiff requests that it be awarded
such fees and costs from U.S.A. as part of any judgment rendered herein. ©
dD.
Breach of Guaranty Agreements
4.23 The allegations of the preceding paragraphs are incorporated herein by reference
(the First Note, Second Note and Third Note are hereinafter collectively referred to as the “Notes”).
PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION PAGES4.24 To induce Plaintiff to make the extensions of credit evidenced by the Notes,
Defendants BAM Contractors, Inc., Hasan M. Rabah and U.S.A. Environmental Group, Inc.
(with respect to the Second Note) each executed and delivered separate Guaranty agreements,
true and correct copies of which are attached hereto collectively as Exhibit"F" and are
incorporated herein by reference as if fully set forth at length (collectively, the “Guaranties”)
4.25 Under the terms of the Guarantics, Defendants BAM Contractors and Hasan M.
Rabah agreed to pay and perform the obligations owed by USA and Western States to Plainuff in
their respective Notes, and Defendant U.S.A. agreed to pay and perform the obligations owed by
Westem States to Plaintiff in the Second Note. Said Defendants further agreed to reimburse
Plaintiff for all of its costs and expenses, including reasonable attorneys’ fees, incurred in
connection with the protection, defense or enforcement of the Guaranties.
4.26 As of the date of filing this First Amended Original Petition, an aggregate
principal balance of $768,990.94 was unpaid and was duc and owing on the Guaranties executed
by Defendants BAM Contractors, inc. and Hasan M. Rabah as set forth above, and the principal
balance of $649,309.84 was unpaid and was duc and owing on the Guaranty signed by
Defendant U.S.A. as set forth above.
4.27 By this action, Plaintiff secks to recover from Defendants BAM Contractors and
Hasan M. Rabah, jointly and severally, the unpaid principal amount of $768,990.94 pursuant to
the terms of the Guaranties, together with interest and all other fees and costs thereon as
provided by the Guaranties, and Defendant U.S.A., jointly and severally, along with Defendants
BAM Contractors and Hasan M. Rabah, the unpaid principal! amount of $649,309.84 pursuant to
~ the terms of the Guaranty signed by Defendant U.S.A., together with interest and all other fees
and costs thereon as provided by said Guaranty.
PLAINT
FS FIRST AMENDED ORIGINAL PETITION PAGE?4.28 . All offsets and credits have been given and al conditions precedent have occurred
or have been performed.
4.29 As shown above, the Guaranties provide that Plaintiff is entitled to recover its
reasonable attorneys’ fees and expenses incurred in enforcing the obligations reflected thereby
and Plaintiff requests it be awarded such fees and costs from Defendants BAM Contractors,
Hasan M. Rabah and U.S.A., jointly and severally, as part of any judgment rendered herein.
Vv.
Prayer
WHEREFORE, PREMISES CONSIDERED. Plaintiff Compass Bank respectfully prays
that Plainuff have judgment against Defendants U.S.A. Environmental Group, Inc.. BAM
Contractors, Inc. and Hasan M. Rabah, jointly and severatly, for all damages pled above, plus
prejudgment and post-judgment interest, reasonable and necessary attorneys’ fees, all costs of
court, and for such other and further retief, at law or in equity, to which it may be justly entitled.
Respectfully submitted,
POPE, HARDWICKE, CHRISTIE, SCHELL,
KELLY & RAY, L.L.P.
re
Matthew T. Taplett
State Bar No. 24028026
306 W. 7" Street, Suite 901
Fort Worth, TX 76102-4995
Telephone: (817) 332-3245
Facsimile * (817) 877-4781
ATTORNEYS FOR PLAINTIFF
COMPASS BANK
P\Cumpans BankSUSA Ensuonimental Group\Pleadings\ It Amended Qniginal Pevann doc
PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION PAGESREVOLVING LINE OF CREDIT NOTE
Definitions:
Date: July 17, 2006
Maker: U.S.A. Environmental Group, Inc.
Maker’s Mailing Address:
315 Yorktown
Dallas, Dallas County, Texas 75208
Payee: Compass Bank
Place for Payment:
9090 Skillman Street, Suite 100
Dallas, Dallas County, Texas 75243
Principal! Amount:
‘Three hundred thousand dollars and zero cents ($300,000.00) or so much
of this amount as may be advanced from time to tume by Payee to Maker
under the terms and conditions of this promissory note and the Loan
Agreement between Maker and Payee
Index Rate: The rate, adjusted daily without notice, shown as the Compass Bank Prime
Rate, described as the rate of interest set by Compass Bank, in its sole discretion, on a daily basis
as published by Compass Bank from time to time. The Index Rate is not necessarily the lowest
rate charged by Payee on its loans and is set by Payee in its sole discretion. If the Index Rate
becomes unavailable during the term of this loan, Payee may designate a substitute index after
notifying Maker. The Index Rate shail be calculated based on months of thirty (30) days and
years of three hundred sixty (360) days, unless this results in a usurious interest rate, in which
event the Index Rate shall be calculated based on the actual number of days elapsed using
months of 28, 29, 30, or 31 days, as applicable, and years of 365 or 366 days, as applicable.
Specific Index Rate: The Index Rate plus one percent (1%).
Annual Interest Rate on the unpaid Principal Amount: The lesser of (a) the Specific
Index Rate or (b) the highest non-usurious interest rate.
Annual Interest Rate on Matured, Unpaid Amounts: The highest non-usurious interest
tate.
Terms of Payment (principal and interest): (a) eleven (11) monthly installments of the
accrued but unpaid interest on the 17 day of each calendar month, beginning on August 17,
2006, and (b) one (1) final installment of all unpaid principal and all accrued but unpaid interest
on July 17, 2007.
EXHIBIT A
REVOLVING LINE OF CREDIT NOTE - Page |Security for Payment: First lien provided by the Deed of Trust of even date by Westem
States Realty LLC in favor of Compass Bank on the real property in Dallas County, Texas,
described on the attached Exhibit A.
Final Scheduled Payment Date: July 17, 2007.
Related Documents: Ail promissory notes, credit agreements, loan agreements,
guaranties, security agreements, deeds of trust, and all other instruments, agreements and
documents, whether now or hereafter existing, executed in connection with this promissory note.
“Related Documents” specifically includes the Real Estate Lien Note (executed by Westem
States Realty LLC), the Deed of Trust (executed by Western States Realty LLC), the
Commercial Security Agreement, and the Loan Agreement.
Curable Default: A default by Maker on this promissory note or the failure of Maker to
perform any of the obligations under any of the Related Documents which are deseribed as a
Curable Default.
Non-Curable Default: The failure of Maker to perform any of the obligations under any
of the Related Documents which are described as a Non-Curable Default.
Event of Default: The occurrence of a Curable Default and the expiration of the Cure
Period without curing the Curable Default or the occurrence of a Non-Curable Default.
Cure Period: Unless a greater period of time is required by Jaw, ten (10) days after the
occurrence of a Curable Default which is a monetary default; twenty (20) days after receipt of
wnitten notice of default for a Curable Default which is a non-monetary default that can be cured
within twenty (20) days; or, for a Curable Default which is a non-monetary default that can not
be cured within twenty (20) days, a period of time which is reasonable to cure the non-monetary
default, if steps sufficient to cure the non-monetary default are initiated immediately after receipt
of written notice of default and these steps are continued and completed with reasonable
diligence. The burden of pleading and proving the reasonableness of any period of time to cure a
Curable Default which is a non-monetary default of more than twenty (20) days is imposed on
Maker. Receipt of written notice of default is deemed to occur if written notice is sent to Maker
by certified mail, return receipt requested, or by a courier service and receipt of the written notice
is refused by Maker.
Obligation:
Maker promises to pay to the order of Payce at the Place for Payment and according to
the Terms of Payment the principal amount plus interest at the rates stated above. All unpaid
amounts shall be due by the Final Scheduled Payment Date.
Subject to the terms and conditions of the Loan Agreement between Maker and Payee,
Maker may borrow, repay, and re-borrow under this promissory note.
REVOLVING LINE OF CREDIT NOTE - Page 2Maker may prepay this promissory note in whole or in part without premium or penalty.
Unless Maker and Payce agree in writing to a different application of any partial prepayment,
any partial prepayment shall first be applied to accrued but unpaid interest and then to the
reduction of the outstanding principal! balance.
On the occurrence of an Event of Default, Payee may declare the unpaid principal
balance and earned interest on this promissory note immediately due. Maker and each surety,
endorser, and guarantor waive all demands for payment, presentations for payment, notices of
intention to accelerate maturity, notices of acceleration of matunity, protests, and notices of
protest, to the extent permitted by law, except as provided in this promissory note.
If this promissory note or any instrument securing or collateral to it is given to an
attorney for collection or enforcement, or if suit is brought for collection or enforcement, or if it
is collected or enforced through probate, bankruptcy, or other judicial proceeding, then Maker
shall pay Payee all reasonable costs of collection and enforcement, including reasonable
attorey’s fees and court costs, in addition to other amounts due.
Interest on the debt evidenced by this promissory note shall not exceed the maximum
amount of non-usurious interest that may be contracted for, taken, reserved, charged, or received
under law; any interest in excess of that maximum amount shall be credited on the principal of
the debt or, if that has been paid, refunded. On any acceleration or required or permitted
prepayment, any such excess shall be canceled automatically as of the acceleration or
prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt
has been paid, refunded. All interest paid or agreed to be paid to Payee shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full
period until payment in full of the principal of this promissory note, so that interest on this
promissory note for this full period shal} not exceed the maximum amount permitted by
applicable law. This provision overrides other provisions in this and all other instruments
concerning the debt.
Date: July 17, 2006.
Maker:
U.S.A. Environmental Graup, Inc.,
a New Jersey corpora
Hasan M. Rabah
President
293904_! DOC
REVOLVING LINE OF CREDIT NOTE - Page 3. e Exhibit A
Tract:
BEING a tract of land situaled in the W. P. OVERTON SURVEY, ABSTRACT NO. 1106, DALLAS County, and
being all of Lots 2 and 3, Block 8/6813 of the HARDING & HARRISON'S WEST DALLAS ADDITION, an addition
to the City of DALLAS according to the Plat thereof recorded in Volume 106, Page 159, Deed Records, DALLAS
County, Texas, and being more particularly described as follows:
BEGINNING at an "X" cut set for comer at the intersection of the East line of Sulphur Street (40 foot right-of-way)
with the North line of Yorktown Street (variable width right-of-way), said "x" cut also being the Southwest corner of
said Lot 2;
THENCE North departing the said Noth line of Yorktown Street and along the said East line of Sulphur Street, a
distance of 100.00 feet to a capped 5/8 inch iron rod stamped "RPLS 3689” set for corner at ihe Southwest corner
of Lot 4; .
THENCE East departing the said East fine of Sulphur Street and along the South line of said Lot 4, a distance of
103.00 feet to a 5/8 inch rod found for corner al the Southeast corer of said Lot 4, in the West line of a 14 foot
Alley;
THENCE South along the West line of said 14 foot Alley a distance of 100.00 feet to an "x" cut set for comer in
the aforementioned North fine of Yorktown Street;
THENCE West along the said North jine of Yorktown Street, 2 distance of 403.00 feet to the POINT OF
BEGINNING and CONTAINING 10,300 square feet or 0.2365 acres of land, more or less.
Tract tl:
BEING a tract of land situated in the W. P. OVERTON SURVEY, ABSTRACT NO. 1106, DALLAS County, and
being all of Lot 11, Block 8/6813, part of Lot 12, Block 8/6813, of the HARDING & HARRISON'S WEST DALLAS
ADDITION, an Addition to the City of DALLAS according to the Plat thereof recorded in Volume 106, Page 159,
Deed Records, DALLAS County, Texas, and all of that certain tract of land conveyed from County of Dallas in
Volume 4860, Page 558, Deed Records, DALLAS County, Texas, and being more particulary described as
follows:
BEGINNING at a 5/8 inch iron rod set for comer in the West line of May Street (40 foot right-of-way), said iron rod
being in Southeast corner of said Block 8/6813, and being the beginning of a curve to the right which has a central
angle of 117 degrees 58 minutes 53 seconds, a radius of 16.90 feet, a tangent of 28.12 feet, and a chord which
bears South 58 degrees 59 minutes 27 seconds West - 28.97 feet;
THENCE departing the said West line of May Street with said curve to the right, an arc distance of 34.80 feet to a
5/8 inch iron rod set for corner at the end of said curve and being situated in the Northerly line of Yorktown Street;
THENCE North 62 degrees 01 minutes 05 seconds West along the said Northerly line of Yorktown Street, a
distance of 88.52 feet fo an "x" cut set for corner in the East line of a 14 foot Alley;
THENCE North departing the said Northerly line of Yorktown Street and along the East line of said 14 foot Alley,
a distance of 73.39 feet to a 5/8 inch iron rod set for corner at the Southwest corner of Lot 10, Block 8/6813;
THENCE East departing the East line of said 14 foot Alley and along the South line of said Lot 10, a distance
of 103.00 feet to a 5/8 inch iron rod found for corner in the aforementioned West line of May Street;
Exhibit A — Page 1THENCE South along the said West line of May Street, a distance of 100.00 feet to the POINT OF
BEGINNING and CONTAINING 10,197 square feet or 0.2341 acres of land, more or less.
Tract Itt:
PRIVATE LICENSE AGREEMENT as created in City of Dallas Ordinance No. 16432, filed June 23, 1999,
recorded in Volume 99122, Page 903, Deed Records, DALLAS County, Texas.
BEING: all that certain lot, tract or parcel of land lying and being situated in the City and County of Dallas, -
Texas, more particularly described as follows:
BEING a part of an alley in Block 8 of HARDING AND HARRISON WEST DALLAS ADDITION, an addition
to the City of Dallas according to the map or plat thereof recorded in Volume 106, Page 159 of the Deed
Records of DALLAS County, Texas and being in Block 8/6813, Official City Numbers and being more
particularly described as follows: .
BEGINNING at the intersection of the East line of a 14 foot wide alley with the common line between Lots
10 and 11 in Block 8/6813;
THENCE Southward along said East line a distance of 50.0 feet to its intersection with the common line
between Lots 11 and 12 in said Block,
THENCE Westward along the Westward prolongation of said common line a distance of 14.0 feet to its
intersection with the West line of said alley, also being the common corner between Lots 1 and 2;
THENCE Northward along said Wes! line, a distance of 50.0 feet to its intersection with the common line
between Lots 2 and 3;
THENCE Eastward along the Eastward prolongation of said common line between Lots 2 and 3 a distance of
44.0 feet to the PLACE OF BEGINNING and CONTAINING approximately 700 square feet of land, more or
less.
Tract iV:
‘BEING part of Lots 2 and 3, Block 9, City Block 6813, of HARDING & HARRISON'S ADDITION to the City
of Dallas, Texas, according to the Plat thereof recorded in Volume 106, Page 158, Map Records,
DALLAS County, Texas, more particularly described as follows:
BEGINNING at an iron pipe found for a corner on the East line of Haslett Street at the Northwest corner
of Lot 3 and the Southwest corner of Lot 4;
THENCE angle left 90 degrees 00 minutes 00 seconds from the East line of Haslett Street and with the
South line of Lot 4 and the North line of Lot 3, a distance of 53.20 feet to an iron rod set for a corner al the
Northwest corner of a tract conveyed to Preston Hale by Deed recorded in Volume 655, Page 179, Deed
Records of DALLAS County, Texas;
THENCE angle left 90 degrees 00 minutes 00 seconds and with the West line of said Hale tract, 79.79 feet
to an iron rod for a corner on the North line of Yorktown Street said comer being on a curve to the left
having a central angle of 10 degrees 49 minutes 53 seconds and a radius of 1360.0 feet;
THENCE angle left 84 degrees 02 minutes 49 seconds and with the Nosth line of Yorktown Street and with
said curve 43.47 feet to an iron rod set for a cotner,
THENCE angle left 138 degrees 39 minutes 32 seconds and with a cul back line for Yorktown Street
14.70 feet to an iron rod set for a corner on the East line of Haslett Street,
Exhibit A - Page 2THENCE angle left 137 degrees 17 minutes 39 seconds and with the East line of Haslett Street 64.48 feet
to the POINT OF BEGINNING and CONTAINING 4,044 square feet of land, more or ‘ess.
Tract V:
BEING a tract of land situated in the W.P. Overton Survey, Abstract No. 1106, DALLAS County, and also
being all of Lots 4, 5 and 6, Block 8/6813 of the HARDING & HARRISON ADDITION, an addition to the City
of Dallas according to the plat thereof recorded in Volume 106, Page 159, Map Records, DALLAS County,
Texas, and being more particulary described as follows:
BEGINNING at an "x" cut found for corner at the intersection of the East line of Sulphur Street (40 foot right-
of-way) with the South line of Powell Street (30 foot right-of-way), said "x" cut also being the Northwest
corner of said Lot 6;
THENCE East along the said South line of Powell Street, a distance of 103.00 feet to an “x” cut found for
corner at the Northeast corner of said Lot 6, in the West line of a 14 foot alley, .
THENCE South along the West line of a 14 foot alley, a distance of 150.00 feet to a 5/8 inch iron rod found
for comer at the Southeast corner of said Lot 4;
THENCE West along the North line of Lot 3, a distance of 103.00 feet to a capped iron rod found for comer
in the aforementioned East line of Sulphur Street;
THENCE North along the said East line of Sulphur Street, a distance of 150.00 feet io the POINT OF
BEGINNING and CONTAINING 15,450 square feet or 0.3547 acres of land, more or less.
Tract VI;
BEING a 5,150 square foot tract of land situaled in the WP. Overton Survey, Abstract No 1106, and being
all of Lot 1, Block 5/6813 of the Harding & Harrison Addition, an Addition to the City of Dallas, Texas, as
recorded by plat in Volume 108, Page 159, Map Records, DALLAS County, Texas, and being all that land
conveyed to Richard E. Hazlett, Jr. by deed recorded in Volume 95070, Page 261, Deed Records, DALLAS
County, Texas, and being more particularly described as follows:
BEGINNING at a 5/8 inch iron rod set for corner at the intersection of the East line of Sulphur Street (40 foot
right-of-way) with the North line of Powell Street (30 foot nght-of-way), said corner also being the Southwest
corner of said Lot 1;
THENCE North, along said East line, a distance of 50.00 feet to a 5/8 inch found iron rod set for comer at
the Northwest corner of said Lot 1 and the Southwest comer of Lot 2, of said Block 58/6813;
THENCE East, departing said East liné and along the common line between said Lot 7 and said Lol 2, a
distance of 103.00 feet to an "x" cut set for corner al the Northeast corner of said Lot 1 and the Southeast
corner of said Lot 2, and in the West line of a 14 foot wide public alley,
THENCE South along said West line, a distance of 50.00 feet to a 60-d nail set for comer in the
abovementioned North line of Powell Street,
THENCE West, along said North line, a distance of 103.00 feet to the POINT OF BEGINNING and
CONTAINING 5,150 square feet or 0.1182 acres of land, more or less.
293961_1.D0C
Exhibit A — Page 3AEE EELS LT ARAW EA
021003 9200000000260AFS0955"
. . CHANGE IN TERMS AGREEMENT
Loan Date
078317201
F initials
ea
‘above are for Lender's use only and do not limit the epphcabiity of this document to any pelticuler loan oF item.
‘Any itatn above containing “*'"* has been omitted dua to text length lenitations
Borrower: U.S.A, Enviconmental Group. Inc. Lender;
315 Yorktown 51.
Delias, TX 75208
2201 Denely Drive, Suite 350
Auetle, TX 78758
(800) 239-1996
Principal Amount: $300,000.00 Date of Agreement: January 31, 2010
DESCRIPTION OF EXISTING INDEBTEDNESS. The indebtedness evidenced by the note, credit sgisement or other instrument from Borrower
faver of Lender dated July 17. 2006 in the origins! princips: smount af $300,000.00 [the "Note"?
DESCRIPTION OF COLLATERAL, The collateral desctibed wm each security agieement. mortgage, deed of uust, pledge agreement or oine!
Gocwmant trot currenty secures the Note shall contnus to secure the Note ws modded by th Change in Terme Agreament and eny end all
previous and future renewels of, extentions of, modifications of, retmencings of, consotidetions of, and subsinurions fer the Note.
DESCRIPTION OF CHANGE IN TERMS, The Note is modified ax provided in this Change in Terms Agreement: The payments requerd wader the
Nots thull be those shown in the PAYMENT suction below. The minunum interest rate on the Note {sometimes referied to vs the “floor”? is
ti to the rate provided wn the VARIABLE INTEREST RATE section below. Following eny advances requitad by thw Change in Terme
Rpreement and notwahatendng wny provision of the Note to the contrary, Landa na longer shell have any obigation te mebe any eddulionel
aanances of oinerwise extend any additional eredh under the Note, The maturity date of the Note is extended es provided in the PAYMENT
ction below.
PAYMENT. Borrower will pey thls loen In one principal paymant of $300,000.00 plus intereat on June 30, 2010, This payment dus on June
30, 2010, wil be for af principal and all accrued Intersat not yet peid. In ‘addition, Borrower will pay raguler monthly payments ef corued
reeset aay each buyment date, beginning Februsry 17, 2010, with aif subsequent intaraet payments to ba dus on the same day of
VARIABLE INTEREST RATE, Ths interost sate on this loan is subject 0 change from ums to time based on chenges i9 on dex which is the
Compass Bank Prime Rat Lender's discretion {the “Inde:
Index in not necosseriy the lowest in ite sole dieetotion. It the Index become:
fable uring ihe term of thie loan, Lander may deetgnate « substitute index after notitying Borrower Landar will well Borrewer the cu
Inder rete unen Borrower's request, The interest rete change will not occur more often shen each day. Borrower underatends thet Lender
mate leone based on othe! false as well. The Index currently ix 3.250% par snoum. Interest prior to manusity on the unpaid principal bal
Sr ents Inen oe be calculated as described in the “INTEREST CALCULATION METHOD” paragraph using arate of 1.000 percemiage pow over
the Indes, Bdyxted f necessary fol Bay mnenum and maximum sete Imitetions described below, resuiing nm an mutiel cate of S.000% per
annum baved on 6 yee of 360 days, NOTICE: Under no cixcumstances will the inter
fo ot Post Matuinty Rete shown below) :ho I
alowed by app! ; of tha Ageament, the “maximum tate allowed by appliceble law" means the geste! of (A) the
mnanimum rete of terest pelmated under federal or other law applicable to the ndabiednese evidenced by thit Agreament. or (B) the “Weekly
Ceiling’ read to m Sections 303.002 and 303.003 of the Tex
INTEREST CALCULATION METHOD. Interest on thie loan it computed on a 365/360 basi
‘s year of 360 days, multiplied by the outstanding principal balance, muttiphed by the actual number of devs the principal b
such ealouistion would result In » usurious rate, interest ehall be caleulated on 2 per diem basa of
awye, a may be, All interest payable under this oan it computed using this method, This celeulation math
attective i fe than the numeric interest rate eteted in the loan documents
CONTINUING VALIDITY, Except os expressly changed by thie Agreement, the terms of the original obiigetion of obligations. including all
apracmente evidenced or securng the obligatian|s}, remain unchanged and w full force and stfect. Consent by Lander to thw Agreement dove
sai twaive Lender'e right to eUiet performance of the ebiigetion(s} af changed, not odiigare Lender to make ény future change wn terms. Nottng
ent wal consinute # seustaction of the obligatienls!. 1 is the intention of Lender 10 rete au linble pertms ail makers and
Endorvere of the orginal obiigationla), including accommodation parties, unless # party ia exprartly roleased by Lender in writs. Any matot oF
endorast, inchudang accommodation mekets, wil not be 1 je of this Agieemant. If any person who signed the original obligation
Goer not aign tha Agreement below, then al persons signing below acknowledge that this Agiaement is given conduionaly, based on the
intation to Lender that the non-slgning party consenta to the chenges end provisions of tha Agreement of otherwise wril not be released
fet applies not only to any hnifial extension. modification of release, but alsa to all such subsequent action:
JURISDICTION. Any legal action 01 procveding brought by Lend! 01 Borrower sgsinat the other ariting out of or relating to the loan evidenced
by tals in wy ghell be mstituted wn tha fode-al court {or of the £1Rt® court sifting m the county where Lender'e office that
Ot be inia lean i located. Wah respect 10 eny Proceeding. 4ach Borrower, to tne fulleat extent permitted by Jew’ {i) waives nny objactwone thet
Borrower may now ot hereafter heve based on venue andlor forum non conveniens of any Proceading in such court: end Li) erevocably subin
to the jurisdiction at any puch court i any Proceadng. Notwithstanding anything te the contrary hetsin, La gal
proceedings ‘proceed againni Borrowar in any other ulizdiction if determined by Lends! to be necessary in ordar to fully enforce of
ceoreise wny right of remedy of Lender teleting to this loan, inclvdeng wohout Imnation, reahzaton upon collareral that secures thes loan.
ERRORS AND OMISSIONS. | apres that if deemed necessary by Lende: of any agent closing the loan evidenced by this Note ("the L¢
Lender or the agent may cor fat thit Note and any other documents executed in connection with the Loan {"Rolaied Documents} on
my Dehail, ne if] were making the correction of adjvatment, in order to correct ‘A cletical ecror is information mi document thet
te mienang of thet does not reflect eccurately my agreement with Lender at tha time the document was executed. If any such clevea! ror a
inateral changes, | egies to fully cooperate m correcting such exfors within 30 days of the date of maimg by Lender of g vequect to do tat.
Any change in the document ‘ct @ change in tho agreement of the pwties is an “alteration” or “amendment,” which
must be io wnitmg end signed by the party who wih be Dound by the change.
CHANGE IN INITIAL INTEREST RATE. If this Note, evidences an extension of creda with « variable rete and a0 invtat incerost 201
‘tate stated on the Note when it i signed may differ from the actual rate dus to changes m tha index before closing,
that is, by applying the tatio of the inte
nce is outstanding,
BF
INTEREST RATE PROTECTION. 11 Borrower ente agieemont with Lender for an interest rate seep product designed to ollow
Borrower effectively 10 pay a fixed rate on all of any portion of thin variable + ta “Swap Agreement"), then, for any payment period
ae sce this Mote. Lander wil waive any minimum interest cate provided in the Nete, but only: (1) for #s long a6 the Swap Agreement temains
tects and {2) wath respect %0 thet portion of the outstanding pineal batence of thir Note thol is equal to the amount uted to calculate the
DEFINED TERMS. Unless ctherwi
the Note of related losn document
defined in this Change in Terma Agreement, all undetined terms thal have the mesnings given to them wy
fe tate tied to an index plus @ margin. that cate may. at tm
jet Rete, In the event thet the sum of the Index plus 1
EXHIBIT BLoen No. 00102675940000000026 - (Continued) Page 2
PRIDR TO SIGNING THIS AGREEMENT. BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT, INCLUDING THE
VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE AGREEMENT.
BORROWER:
U.S.A. ENVIRON!PROMISSORY NOTE
$1,200,000.00 February 22, 2007
FOR VALUE RECEIVED, WESTERN STATES REALTY LLC, a Nevada limited
liability company ("Maker", whether one or more), hereby unconditionally promises to pay to
the order of COMPASS BANK ("Payee") at 9090 Skillman, Suite 100, Dallas, Texas 75243, or at
such other address given to Maker by Payee, the principal sum of ONE MILLION TWO
HUNDRED THOUSAND AND NO/100 DOLLARS ($1,200,000.00), in lawful money of the
United States of America, together with interest per annum (calculated on the basis of a 360-
day year) on the unpaid principal balance from day-to-day remaining, computed from the date
of advance until maturity at the rate equal to the lesser of (a) the Maximum Rate (as
hereinafter defined) or (b) SEVEN AND SIXTY-THREE ONE HUNDREDTHS OF ONE
PERCENT (7.63%). Principal and interest under this note (the "Note") are due and payable
as follows:
Principal and interest hereon shall be due and payable monthly in installments
of NINETHOUSAND SEVEN HUNDRED SIXTY-TWO AND 73/100 DOLLARS
($9,762.73),including interest, with the first such installment being due and
payable on March 22, 2007, and with a like installment being due and payable
on the 16% day of each succeeding month thereafter until February 22, 2010
("Maturity Date"), when all outstanding principal hereon plus all accrued but
unpaid interest thereon shall be finally due and payable. All payments received
hereon shall be applied first to the payment of accrued interest on the unpaid
principal, with the remainder, if any, applied to reduction of principal.
The term "Maximum Rate," as used herein, shall mean, with respect to each holder
hereof, the maximum nonusurious interest rate, if any, that at any time, or from time to time,
may under applicable law be contracted for, taken, reserved, charged or received on the
indebtedness evidenced by this Note under the laws which are presently in effect of the United
States and the State of Texas applicable to such holder and such indebtedness or, to the extent
allowed by law under such applicable laws of the United States of America and the State of
Texas which may hereafter be in effect, which allow a higher maximum non-usurious interest
rate than applicable laws now allow; provided, that in determining the Maximum Rate, due
regard shall be given, to the extent required by applicable law, to any and all relevant
payments, fees, charges, deposits, balances, agreements and calculations which may constitute
or be deemed to constitute interest, or be deducted from principal to calculate the interest rate
or otherwise affect interest rate determinations, so that in no event shall the Payee contract
for, charge, receive, take, collect, reserve or apply, on the Note, any amount in excess of the
maximum non-usurious rate of interest permitted by applicable law. To the extent that Texas
law determines the Maximum Rate, the Maximum Rate shall be determined by utilizing the
“indicated rate ceiling” from time to time in effect pursuant to the Texas Finance Code
(V.T.C.A. Finance Code Section 303.001 et seq ) (the "Texas Finance Code") or such successor
Promissory NOTE PAGE 10F 5
EXHIBIT Cstatute, as then in effect, governing usury. The Maximum Rate shall not be limited to the
applicable rate ceiling in the Texas Finance Code or such successor statute if Federal laws or
other state laws now or hereafter in effect and applicable to this Note (and the interest
contracted for, charged and collected hereunder) shall permit a higher rate of interest.
Maker and Payee intend to comply with the applicable law governing the Maximum
Rate. Interest contracted for, charged, or received shall not exceed the Maximum Rate, and,
ifin any contingency whatsoever, Payee shall receive anything of value deemed interest under
applicable law which would cause the interest contracted for, charged, or received by the
holder thereof to exceed the maximum amount of interest permissible under applicable law,
the excessive interest shall be applied to the reduction of the unpaid principal balance hereof
and not to the payment of interest, or if such excessive interest exceeds the unpaid principal
balance hereof such excess shall be refunded to Maker, and the provisions of this Note and any
demand on Maker shall immediately be deemed reformed and the amounts thereafter
collectible hereunder shall be reduced, without the necessity of the execution of any new
documents, so as to comply with the applicable Jaw, but so as to permit the recovery of the
- fullest amount otherwise called for hereunder. AlJ interest paid or agreed to be paid to the
holder hereof shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full term of such indebtedness until payment in full
(including the period of any renewal or extension hereof) so that the rate or amount of interest.
on account of such indebtedness does not exceed the Maximum Rate.
Maker agrees that all loan fees and other prepaid charges are earned fully as of the
date of the loan and will not be subject to refund, except as required by law. Subject to the
prepayment fee and other conditions provided herein, Maker may pay all or a portion of the
amount owed before it is due. Prepayment in full shall consist of payment of the remaining
unpaid principal balance together with all accrued and unpaid interest and all other amounts,
costs and expenses for which Maker is responsible under this Note or any other agreement
with Payee pertaining to this loan before such amounts are due, whether such prepayment
arises from a voluntary or involuntary prepayment, acceleration of maturity, or any other
cause or reason. Prepayment in part shall consist of payment of any portion of the unpaid
principal balance before it is due, whether such prepayment arises from a voluntary or
involuntary prepayment, acceleration of maturity, or any other cause or reason. Unless
otherwise agreed by Payee in writing and provided that Maker is current on all amounts due,
payments applied to the loan before Payee's creation of a billing statement for the next
payment due will be applied entirely to principal, and payments applied to the Joan after the
creation of such billing statement wil! be applied according to that billing statement. Unless
otherwise agreed by Payee in writing and provided that Maker is current on all amounts due,
payments applied to the loan before Payee's creation of a billing statement for the next
payment due shall not relieve Maker of Maker's obligation to continue making, uninterrupted,
payments under this Note.
Maker's liability under this Note includes all obligations incurred by Maker under any
agreement between Maker and Payee or any affiliate of Payee, such as an ISDA Master
Agreement and one or more confirmations issued in connection therewith whether now
Promissory NOTE PAGE 2OF5
07-0528 - promissory note 03 wpdexisting or hereafter entered into, which provides for an interest rate, currency, equity, credit
or commodity swap, cap, floor or colar, spot or foreign currency exchange transaction, cross
currency rate swap, currency option, any combination or, or option with respect to, any of the
foregoing or similar transactions, for the purpose of hedging the Maker's exposure to
fluctuations in interest rates, exchange rates, currency, stock, portfolio or loan valuations or
commodity prices (each a “Hedge Agreement")
Maker agrees to pay a late charge of five percent (5%) of the payment amount if such
payment is not received within ten (10) days of the due date. Payments, when made, shall be
applied in a manner and order according to the sole discretion of the holder of this Note.
All past-due principal and, to the extent permitted by applicable law, past-due interest
upon this Note shall bear interest at the Maximum Rate.
This Note is secured in part by a Deed of Trust (with Security Agreement and
Assignment of Rents), which together with all other documents evidencing, securing or
pertaining to the transaction in which the indebtedness evidenced hereby is incurred are
collectively referred to as the "Loan Documents".
Maker and each surety, endorser, guarantor and other party ever liable for payment
of any sums of money payable on this Note, jointly and severally waive presentment, protest,
notice of protest and nonpayment, notice of default and notice of acceleration and intention to
accelerate, and agree that their liability under this Note shall not be affected by any renewal
or extension in the time of payment hereof, or in any indulgences, or by any release or change
in any security for the payment of this Note, and hereby consent to any and all renewals,
extensions, indulgences, releases or changes, regardless of the number of such renewals,
extensions, indulgences, releases or changes.
If this Note or any Loan Documents are given by Payee to an attorney for collection or
enforcement, or if suit is brought for collection or enforcement, or if it is collected or enforced
through probate, bankruptcy, or other judicial proceeding, then Maker shall pay Payee all
costs of collection and enfércement, including reasonable attorney's fees, expenses and court
costs, in addition to other amounts due.
No waiver by Payee of any of its rights or remedies under this Note or any Loan
Documents, shall be considered a waiver of any other right or remedy of Payee; no delay or
omission in the exercise or enforcement by Payee of any rights or remedies shall ever be
construed as a waiver of any right or remedy of Payee; and no exercise or enforcement of any
such rights or remedies shall ever be held to exhaust any right or remedy of Payee.
Prepayment in full of the Loan is permitted at any time on or after the first day of the
first month; provided, however, that upon any such prepayment in full which is made on or
before the last day of the thirty-sixth (36) month, Maker shall also pay Payee the Prepayment
Fee (as hereinafter defined). The Prepayment Fee is consideration for the privilege of making
such prepayment, and shall be paid to Payee simultaneously with the making of the
Promissory NOTE PAGE 3 OFS
07.0528 - promistory note 005 pdprepayment. The Prepayment Fee shall be equal to the product of (i) the outstanding principal
balance of this Note at the time of a prepayment, and (ii) the Prepayment Factor (as
hereinafter defined) then in effect.
The Prepayment Factor shall mean (;) three percent (3%) coramencing on the first day
of the first (ist) month through and including the last day of twelfth (12th) month; (i) two
percent (2%) commencing on the first day of the thirteenth (13th) month through and
including the last day of the twenty-fourth (24th) month; and (iii) one percent (1%)
commencing on the first day of the twenty-fifth (25th) month through and including the last
day of the thirty-sixth (36th) month.
Notwithstanding the foregoing, Maker may prepay t
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© \, sp ae @ @ CAUSE NO. 10-16835 . F iL E D in-tHe pistRic Hebe eO PH 3:23 Gary FUTZSIMMCH Bonny, eA ELERK COAL REI TEXAS DEPUTY DALLAS COUNTY, TEXAS COMPASS BANK, Plaintiff. ve . U.S.A. ENVIRONMENTAL GROUP, INC., BAM CONTRACTORS, INC., and HASAN M. RABAH. Defendants. 160"-H JUDICIAL DISTRICT YR UR SPER OP LL IP IL LE LP TL PLAINTIFE’S FIRST AMENDED ORIGINAL PETITION TO THE HONORABLE JUDGE OF SAID COURT: COMES NOW Compass Bank (‘Plaintiff’), and files this its First Amended Original Petition, complaining of U.S.A. Environmental Group, Inc., BAM Contractors, Inc. and Hasan M. Rabah, Defendants, and for cause of action respectfully shows the Court as follows: Discovery Control Plan 1.01 Plaintiff requests that this suit proceed under Discovery Level 2. as prescribed by Rule 190.3 of the Texas Rules of Civil Procedure. Parties and Service of Process 2.01 Plaintiff is an Alabama state banking corporation registered and authorized to do business in the State of Texas. 2.02 U.S.A. Environmental “Group, Inc? (US.A.”) is a New Jerscy corporation authorized to conduct business in the state of Texas and may be served with process PLAIN “Ss FIRST AMENDED ORIGINAL PE: iN AGE LAINTIFE'S FIRST AMENDED ORIGINAL PETITION ORIGINAL PAGE tHeath, Texas? in this action by serving itsfegistered agent; Hasan M. Rabah, at 9 Terrabella | a 75032, Or at such other place as he may be found. 2.03 Defendant BAM Contractors, Inc. is a Texas corporation that may be served with process in this action by serving its registered agent, Jose Mier, at 2214 Sulphur Street, Dallas, Texas 75208, or at such other place as he may be found. 2.04 Defendant(Hasan M_Rabalvis an individual resident of Rockwall County, Texas. Defendant Hasan M. Rabah may be served with process in this action at(9_Terrabéella Laney (Heath; Texas"75032: or at such other place as he may be found. Yenue 3.01 Venue of this action is proper in Dallas County, Texas because Dallas County is the county in which all or a substantial part of the events or omissions giving rise to Plainuff's claims occurred. Iv. Causes of Action A. Breach of Promissory Note dated July 17, 2006 4.01 On or about July 17, 2006, Defendant U.S.A. Environmental Group, Inc. (“USA”) executed a Revolving Line of Credit Note in the original, available principal amount of Three Hundred Thousand and No/Dollars ($300,000.00), bearing interest as provided therein, payable to Plaintiff (the “First Note”). A truce and correct copy of the First Note is attached hereto as Exhibit “A” and is incorporated herein by reference as if fully set forth at length. The terms and conditions of the First Note were subsequently modified and extended on several occasions, F°S FIRST AMENDED ORIGINAL PETITION PAGE?culminating with that one certain Change In Terms Agreement dated January 31, 2010, executed by U.S.A. in favor of Plaintiff. A true and correct copy of the Change in Terms Agrcement is attached hereto as, Exhibit “B" and is incorporated herein by reference as if fully set forth at _ length (the First Note and the Change in Terms Agreement are hereinafter collectively referred to as the “First Note”). 4.02 Under the terms of the First Note, USA agreed to pay to Plaintiff the full principal amount of the debt evidenced by the First Note, plus all interest accrued thereon, no later than the date of maturity, June 30, 2010. 4.03 Plaintiff is the legal owner and holder of the First Note. 4.04 USA has defaulted on its obligations under the terms of the First Note by failing to, among other things, make the payments required thereunder despite Plaintiff's demand that said Defendant repay the obligation represented by the First Note. 4.05 Upon USA’s continued failure to make payment under the terms of the First Note, and prior to the commencement of this suit, all sums due and owing on the First Note matured and became due and owing. As of the date of filing this First Amended Original Petition, a principal balance of $70,431.73 was unpaid and was due and owing, together with interest and other fees as provided by the First Note. 4.06 By this action, Plaintiff seeks to recover from U.S.A. the unpaid principal balance owed by it pursuant to the terms of the First Note, plus interest and all other fees and costs thereon as provided by the First Note. 4.07 Atloffsets and credits have been given and all conditions precedent have occurred or have been performed. PLAINTIFE’S FIRST AMENDED ORIGINAL PETITION PaGe 3aa 4.08 Plaintiff would show that the First Note and Chapter 38 of the Texas Civil Practice and Remedies Code provide that Plaintiff is entitled to recover the reasonable attomeys” fees and court costs incurred in enforcing the obligations reflected by the First Note. In connection therewith, Plaintiff has retained the undersigned attomeys to collect this indebtedness and has ayreed to pay said attorneys a reasonable fee, and Plaintiff requests that it be awarded such fces and costs from U.S.A. as part of any judgment rendered herein. B. Breach of Promissory Note dated February 22, 2007 (For Informational Purposes Only) 4.09 On or about February 22, 2007, Western States Realty, L.L.C. (“Western States”) executed a Promissory Note in the original principal amount of One Million Two Hundred Thousand and No/Dollars ($1,200,000.00), bearing interest as provided therein, payable to Plaintiff (the “Second Note"). A true and correct copy of the Second Note is attached hereto as Exhibit “C" and is incorporated herein by reference as if fully set forth at length. 4.10 Under the terms of the Sccond Note, Western States agreed to pay to Plaintiff the full principal amount of the debt evidenced by the Second Note, plus all interest accrued thereon, no later than the date of maturity, February 22, 2010. 4.11 — Plaintiff is the legal owner and holder of the Second Note. 4.12 Western States has defaulted on its obligations under the terms of the Second Note by failing to, among other things, make the payments required thereunder. 4.13 Upon Western States’s continued failure to make payment under the terms of the Third Note, and prior to the commencement of this suit, all sums due and owing on the Third Note matured. As of the date of filing this First Amended Original Petition, a principal balance PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION PAGESof $649,309.84 was unpaid and was duc and owing, together with interest and other fees as provided by the Second Note. 4.14. Western States filed for bankruptcy retief on December 6, 2010 in a case styled da re Western States Realty, L.L.C., Case No. 10-38578-HDH-11, in the United States Bankruptcy Court for the Northem District of Texas, Dallas Division (the “Bankruptcy Case”). As a result of the filing of the Bankruptcy Case, Plaintiff docs not by this lawsuit seck to recover any sums due | and owing by Wester States to Plaintiff. C. Breach of Promissory Note dated August 29, 2007 4.15 On or about August 29, 2007, Defendant USA executed a Revolving Line of Credit Note in the original, available principal amount of Two Hundred Seventy Thousand and No/Dollars ($270,000.00), bearing interest as provided therein, payable to Plaintiff (the “Third - Note”). A true and correct copy of the Third Note is attached hereto as Exhibit “D” and is incorporated herein by reference as if fully set forth at length. The terms and conditions of the Third Note were subsequently modified and extended on several occasions, culminating with that one certain Change In Terms Agreement dated January 31, 2010, executed by USA in favor of Plaintiff. A true and correct copy of the Change in Terms Agreement is attached hereto as Exhibit “E and is incorporated herein by reference as if fully set forth at length (the Third Note and the Change in Terms Agreement are hereinafter collectively referred to as the ‘Third Note”). 4.16 Under the terms of the Third Note, U.S.A. agreed to pay to Plaintiff the full principal amount of the debt evidenced by the Third Note, plus all interest accrued thereon, no later than the date of maturity, June 30, 2010. 4.17 Plaintiffis the legal owner and holder of the Third Note. PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION PAGES.4.18 U.S.A. has defaulted on its obligations under the terms of the Third Note by failing to, among other things, make the payments required thereunder despite Plaintiffs demand that said Defendant repay the obligation represented by the Third Note. 4.19 Upon U.S.A.’s continued faiiure to make payment under the terms of the Third Note, and prior to the commencement of this suit, all sums due and owing on the Third Note matured and became due and owing. As of the date of filing this First Amended Original Petition, a principal balance of $49,249.37 was unpaid and was due and owing, together with " interest and other fees as provided by the Third Note. 4.20 By this action, Plaintiff seeks to recover from U.S.A. the unpaid principal balance owed by it pursuant to the terms of the Third Note, pius interest and all other fees and costs thereon as provided by the Third Note. 4.21 All offsets and credits have been yiven and all conditions precedent have occurred or have been performed. 4.22 Plaintiff would show that the Third Note and Chapter 38 of the Texas Civil Practice and Remedics Code provide that Plaintiff is entitled to recover the reasonable attomeys’ fees and court costs incurred in enforcing the obligations reflected by the Third Note. In connection therewith, Plaintiff has retained the undersigned attomeys to collect this indebtedness and has agreed to pay said attomeys a reasonable fee, and Plaintiff requests that it be awarded such fees and costs from U.S.A. as part of any judgment rendered herein. © dD. Breach of Guaranty Agreements 4.23 The allegations of the preceding paragraphs are incorporated herein by reference (the First Note, Second Note and Third Note are hereinafter collectively referred to as the “Notes”). PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION PAGES4.24 To induce Plaintiff to make the extensions of credit evidenced by the Notes, Defendants BAM Contractors, Inc., Hasan M. Rabah and U.S.A. Environmental Group, Inc. (with respect to the Second Note) each executed and delivered separate Guaranty agreements, true and correct copies of which are attached hereto collectively as Exhibit"F" and are incorporated herein by reference as if fully set forth at length (collectively, the “Guaranties”) 4.25 Under the terms of the Guarantics, Defendants BAM Contractors and Hasan M. Rabah agreed to pay and perform the obligations owed by USA and Western States to Plainuff in their respective Notes, and Defendant U.S.A. agreed to pay and perform the obligations owed by Westem States to Plaintiff in the Second Note. Said Defendants further agreed to reimburse Plaintiff for all of its costs and expenses, including reasonable attorneys’ fees, incurred in connection with the protection, defense or enforcement of the Guaranties. 4.26 As of the date of filing this First Amended Original Petition, an aggregate principal balance of $768,990.94 was unpaid and was duc and owing on the Guaranties executed by Defendants BAM Contractors, inc. and Hasan M. Rabah as set forth above, and the principal balance of $649,309.84 was unpaid and was duc and owing on the Guaranty signed by Defendant U.S.A. as set forth above. 4.27 By this action, Plaintiff secks to recover from Defendants BAM Contractors and Hasan M. Rabah, jointly and severally, the unpaid principal amount of $768,990.94 pursuant to the terms of the Guaranties, together with interest and all other fees and costs thereon as provided by the Guaranties, and Defendant U.S.A., jointly and severally, along with Defendants BAM Contractors and Hasan M. Rabah, the unpaid principal! amount of $649,309.84 pursuant to ~ the terms of the Guaranty signed by Defendant U.S.A., together with interest and all other fees and costs thereon as provided by said Guaranty. PLAINT FS FIRST AMENDED ORIGINAL PETITION PAGE?4.28 . All offsets and credits have been given and al conditions precedent have occurred or have been performed. 4.29 As shown above, the Guaranties provide that Plaintiff is entitled to recover its reasonable attorneys’ fees and expenses incurred in enforcing the obligations reflected thereby and Plaintiff requests it be awarded such fees and costs from Defendants BAM Contractors, Hasan M. Rabah and U.S.A., jointly and severally, as part of any judgment rendered herein. Vv. Prayer WHEREFORE, PREMISES CONSIDERED. Plaintiff Compass Bank respectfully prays that Plainuff have judgment against Defendants U.S.A. Environmental Group, Inc.. BAM Contractors, Inc. and Hasan M. Rabah, jointly and severatly, for all damages pled above, plus prejudgment and post-judgment interest, reasonable and necessary attorneys’ fees, all costs of court, and for such other and further retief, at law or in equity, to which it may be justly entitled. Respectfully submitted, POPE, HARDWICKE, CHRISTIE, SCHELL, KELLY & RAY, L.L.P. re Matthew T. Taplett State Bar No. 24028026 306 W. 7" Street, Suite 901 Fort Worth, TX 76102-4995 Telephone: (817) 332-3245 Facsimile * (817) 877-4781 ATTORNEYS FOR PLAINTIFF COMPASS BANK P\Cumpans BankSUSA Ensuonimental Group\Pleadings\ It Amended Qniginal Pevann doc PLAINTIFF'S FIRST AMENDED ORIGINAL PETITION PAGESREVOLVING LINE OF CREDIT NOTE Definitions: Date: July 17, 2006 Maker: U.S.A. Environmental Group, Inc. Maker’s Mailing Address: 315 Yorktown Dallas, Dallas County, Texas 75208 Payee: Compass Bank Place for Payment: 9090 Skillman Street, Suite 100 Dallas, Dallas County, Texas 75243 Principal! Amount: ‘Three hundred thousand dollars and zero cents ($300,000.00) or so much of this amount as may be advanced from time to tume by Payee to Maker under the terms and conditions of this promissory note and the Loan Agreement between Maker and Payee Index Rate: The rate, adjusted daily without notice, shown as the Compass Bank Prime Rate, described as the rate of interest set by Compass Bank, in its sole discretion, on a daily basis as published by Compass Bank from time to time. The Index Rate is not necessarily the lowest rate charged by Payee on its loans and is set by Payee in its sole discretion. If the Index Rate becomes unavailable during the term of this loan, Payee may designate a substitute index after notifying Maker. The Index Rate shail be calculated based on months of thirty (30) days and years of three hundred sixty (360) days, unless this results in a usurious interest rate, in which event the Index Rate shall be calculated based on the actual number of days elapsed using months of 28, 29, 30, or 31 days, as applicable, and years of 365 or 366 days, as applicable. Specific Index Rate: The Index Rate plus one percent (1%). Annual Interest Rate on the unpaid Principal Amount: The lesser of (a) the Specific Index Rate or (b) the highest non-usurious interest rate. Annual Interest Rate on Matured, Unpaid Amounts: The highest non-usurious interest tate. Terms of Payment (principal and interest): (a) eleven (11) monthly installments of the accrued but unpaid interest on the 17 day of each calendar month, beginning on August 17, 2006, and (b) one (1) final installment of all unpaid principal and all accrued but unpaid interest on July 17, 2007. EXHIBIT A REVOLVING LINE OF CREDIT NOTE - Page |Security for Payment: First lien provided by the Deed of Trust of even date by Westem States Realty LLC in favor of Compass Bank on the real property in Dallas County, Texas, described on the attached Exhibit A. Final Scheduled Payment Date: July 17, 2007. Related Documents: Ail promissory notes, credit agreements, loan agreements, guaranties, security agreements, deeds of trust, and all other instruments, agreements and documents, whether now or hereafter existing, executed in connection with this promissory note. “Related Documents” specifically includes the Real Estate Lien Note (executed by Westem States Realty LLC), the Deed of Trust (executed by Western States Realty LLC), the Commercial Security Agreement, and the Loan Agreement. Curable Default: A default by Maker on this promissory note or the failure of Maker to perform any of the obligations under any of the Related Documents which are deseribed as a Curable Default. Non-Curable Default: The failure of Maker to perform any of the obligations under any of the Related Documents which are described as a Non-Curable Default. Event of Default: The occurrence of a Curable Default and the expiration of the Cure Period without curing the Curable Default or the occurrence of a Non-Curable Default. Cure Period: Unless a greater period of time is required by Jaw, ten (10) days after the occurrence of a Curable Default which is a monetary default; twenty (20) days after receipt of wnitten notice of default for a Curable Default which is a non-monetary default that can be cured within twenty (20) days; or, for a Curable Default which is a non-monetary default that can not be cured within twenty (20) days, a period of time which is reasonable to cure the non-monetary default, if steps sufficient to cure the non-monetary default are initiated immediately after receipt of written notice of default and these steps are continued and completed with reasonable diligence. The burden of pleading and proving the reasonableness of any period of time to cure a Curable Default which is a non-monetary default of more than twenty (20) days is imposed on Maker. Receipt of written notice of default is deemed to occur if written notice is sent to Maker by certified mail, return receipt requested, or by a courier service and receipt of the written notice is refused by Maker. Obligation: Maker promises to pay to the order of Payce at the Place for Payment and according to the Terms of Payment the principal amount plus interest at the rates stated above. All unpaid amounts shall be due by the Final Scheduled Payment Date. Subject to the terms and conditions of the Loan Agreement between Maker and Payee, Maker may borrow, repay, and re-borrow under this promissory note. REVOLVING LINE OF CREDIT NOTE - Page 2Maker may prepay this promissory note in whole or in part without premium or penalty. Unless Maker and Payce agree in writing to a different application of any partial prepayment, any partial prepayment shall first be applied to accrued but unpaid interest and then to the reduction of the outstanding principal! balance. On the occurrence of an Event of Default, Payee may declare the unpaid principal balance and earned interest on this promissory note immediately due. Maker and each surety, endorser, and guarantor waive all demands for payment, presentations for payment, notices of intention to accelerate maturity, notices of acceleration of matunity, protests, and notices of protest, to the extent permitted by law, except as provided in this promissory note. If this promissory note or any instrument securing or collateral to it is given to an attorney for collection or enforcement, or if suit is brought for collection or enforcement, or if it is collected or enforced through probate, bankruptcy, or other judicial proceeding, then Maker shall pay Payee all reasonable costs of collection and enforcement, including reasonable attorey’s fees and court costs, in addition to other amounts due. Interest on the debt evidenced by this promissory note shall not exceed the maximum amount of non-usurious interest that may be contracted for, taken, reserved, charged, or received under law; any interest in excess of that maximum amount shall be credited on the principal of the debt or, if that has been paid, refunded. On any acceleration or required or permitted prepayment, any such excess shall be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded. All interest paid or agreed to be paid to Payee shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full period until payment in full of the principal of this promissory note, so that interest on this promissory note for this full period shal} not exceed the maximum amount permitted by applicable law. This provision overrides other provisions in this and all other instruments concerning the debt. Date: July 17, 2006. Maker: U.S.A. Environmental Graup, Inc., a New Jersey corpora Hasan M. Rabah President 293904_! DOC REVOLVING LINE OF CREDIT NOTE - Page 3. e Exhibit A Tract: BEING a tract of land situaled in the W. P. OVERTON SURVEY, ABSTRACT NO. 1106, DALLAS County, and being all of Lots 2 and 3, Block 8/6813 of the HARDING & HARRISON'S WEST DALLAS ADDITION, an addition to the City of DALLAS according to the Plat thereof recorded in Volume 106, Page 159, Deed Records, DALLAS County, Texas, and being more particularly described as follows: BEGINNING at an "X" cut set for comer at the intersection of the East line of Sulphur Street (40 foot right-of-way) with the North line of Yorktown Street (variable width right-of-way), said "x" cut also being the Southwest corner of said Lot 2; THENCE North departing the said Noth line of Yorktown Street and along the said East line of Sulphur Street, a distance of 100.00 feet to a capped 5/8 inch iron rod stamped "RPLS 3689” set for corner at ihe Southwest corner of Lot 4; . THENCE East departing the said East fine of Sulphur Street and along the South line of said Lot 4, a distance of 103.00 feet to a 5/8 inch rod found for corner al the Southeast corer of said Lot 4, in the West line of a 14 foot Alley; THENCE South along the West line of said 14 foot Alley a distance of 100.00 feet to an "x" cut set for comer in the aforementioned North fine of Yorktown Street; THENCE West along the said North jine of Yorktown Street, 2 distance of 403.00 feet to the POINT OF BEGINNING and CONTAINING 10,300 square feet or 0.2365 acres of land, more or less. Tract tl: BEING a tract of land situated in the W. P. OVERTON SURVEY, ABSTRACT NO. 1106, DALLAS County, and being all of Lot 11, Block 8/6813, part of Lot 12, Block 8/6813, of the HARDING & HARRISON'S WEST DALLAS ADDITION, an Addition to the City of DALLAS according to the Plat thereof recorded in Volume 106, Page 159, Deed Records, DALLAS County, Texas, and all of that certain tract of land conveyed from County of Dallas in Volume 4860, Page 558, Deed Records, DALLAS County, Texas, and being more particulary described as follows: BEGINNING at a 5/8 inch iron rod set for comer in the West line of May Street (40 foot right-of-way), said iron rod being in Southeast corner of said Block 8/6813, and being the beginning of a curve to the right which has a central angle of 117 degrees 58 minutes 53 seconds, a radius of 16.90 feet, a tangent of 28.12 feet, and a chord which bears South 58 degrees 59 minutes 27 seconds West - 28.97 feet; THENCE departing the said West line of May Street with said curve to the right, an arc distance of 34.80 feet to a 5/8 inch iron rod set for corner at the end of said curve and being situated in the Northerly line of Yorktown Street; THENCE North 62 degrees 01 minutes 05 seconds West along the said Northerly line of Yorktown Street, a distance of 88.52 feet fo an "x" cut set for corner in the East line of a 14 foot Alley; THENCE North departing the said Northerly line of Yorktown Street and along the East line of said 14 foot Alley, a distance of 73.39 feet to a 5/8 inch iron rod set for corner at the Southwest corner of Lot 10, Block 8/6813; THENCE East departing the East line of said 14 foot Alley and along the South line of said Lot 10, a distance of 103.00 feet to a 5/8 inch iron rod found for corner in the aforementioned West line of May Street; Exhibit A — Page 1THENCE South along the said West line of May Street, a distance of 100.00 feet to the POINT OF BEGINNING and CONTAINING 10,197 square feet or 0.2341 acres of land, more or less. Tract Itt: PRIVATE LICENSE AGREEMENT as created in City of Dallas Ordinance No. 16432, filed June 23, 1999, recorded in Volume 99122, Page 903, Deed Records, DALLAS County, Texas. BEING: all that certain lot, tract or parcel of land lying and being situated in the City and County of Dallas, - Texas, more particularly described as follows: BEING a part of an alley in Block 8 of HARDING AND HARRISON WEST DALLAS ADDITION, an addition to the City of Dallas according to the map or plat thereof recorded in Volume 106, Page 159 of the Deed Records of DALLAS County, Texas and being in Block 8/6813, Official City Numbers and being more particularly described as follows: . BEGINNING at the intersection of the East line of a 14 foot wide alley with the common line between Lots 10 and 11 in Block 8/6813; THENCE Southward along said East line a distance of 50.0 feet to its intersection with the common line between Lots 11 and 12 in said Block, THENCE Westward along the Westward prolongation of said common line a distance of 14.0 feet to its intersection with the West line of said alley, also being the common corner between Lots 1 and 2; THENCE Northward along said Wes! line, a distance of 50.0 feet to its intersection with the common line between Lots 2 and 3; THENCE Eastward along the Eastward prolongation of said common line between Lots 2 and 3 a distance of 44.0 feet to the PLACE OF BEGINNING and CONTAINING approximately 700 square feet of land, more or less. Tract iV: ‘BEING part of Lots 2 and 3, Block 9, City Block 6813, of HARDING & HARRISON'S ADDITION to the City of Dallas, Texas, according to the Plat thereof recorded in Volume 106, Page 158, Map Records, DALLAS County, Texas, more particularly described as follows: BEGINNING at an iron pipe found for a corner on the East line of Haslett Street at the Northwest corner of Lot 3 and the Southwest corner of Lot 4; THENCE angle left 90 degrees 00 minutes 00 seconds from the East line of Haslett Street and with the South line of Lot 4 and the North line of Lot 3, a distance of 53.20 feet to an iron rod set for a corner al the Northwest corner of a tract conveyed to Preston Hale by Deed recorded in Volume 655, Page 179, Deed Records of DALLAS County, Texas; THENCE angle left 90 degrees 00 minutes 00 seconds and with the West line of said Hale tract, 79.79 feet to an iron rod for a corner on the North line of Yorktown Street said comer being on a curve to the left having a central angle of 10 degrees 49 minutes 53 seconds and a radius of 1360.0 feet; THENCE angle left 84 degrees 02 minutes 49 seconds and with the Nosth line of Yorktown Street and with said curve 43.47 feet to an iron rod set for a cotner, THENCE angle left 138 degrees 39 minutes 32 seconds and with a cul back line for Yorktown Street 14.70 feet to an iron rod set for a corner on the East line of Haslett Street, Exhibit A - Page 2THENCE angle left 137 degrees 17 minutes 39 seconds and with the East line of Haslett Street 64.48 feet to the POINT OF BEGINNING and CONTAINING 4,044 square feet of land, more or ‘ess. Tract V: BEING a tract of land situated in the W.P. Overton Survey, Abstract No. 1106, DALLAS County, and also being all of Lots 4, 5 and 6, Block 8/6813 of the HARDING & HARRISON ADDITION, an addition to the City of Dallas according to the plat thereof recorded in Volume 106, Page 159, Map Records, DALLAS County, Texas, and being more particulary described as follows: BEGINNING at an "x" cut found for corner at the intersection of the East line of Sulphur Street (40 foot right- of-way) with the South line of Powell Street (30 foot right-of-way), said "x" cut also being the Northwest corner of said Lot 6; THENCE East along the said South line of Powell Street, a distance of 103.00 feet to an “x” cut found for corner at the Northeast corner of said Lot 6, in the West line of a 14 foot alley, . THENCE South along the West line of a 14 foot alley, a distance of 150.00 feet to a 5/8 inch iron rod found for comer at the Southeast corner of said Lot 4; THENCE West along the North line of Lot 3, a distance of 103.00 feet to a capped iron rod found for comer in the aforementioned East line of Sulphur Street; THENCE North along the said East line of Sulphur Street, a distance of 150.00 feet io the POINT OF BEGINNING and CONTAINING 15,450 square feet or 0.3547 acres of land, more or less. Tract VI; BEING a 5,150 square foot tract of land situaled in the WP. Overton Survey, Abstract No 1106, and being all of Lot 1, Block 5/6813 of the Harding & Harrison Addition, an Addition to the City of Dallas, Texas, as recorded by plat in Volume 108, Page 159, Map Records, DALLAS County, Texas, and being all that land conveyed to Richard E. Hazlett, Jr. by deed recorded in Volume 95070, Page 261, Deed Records, DALLAS County, Texas, and being more particularly described as follows: BEGINNING at a 5/8 inch iron rod set for corner at the intersection of the East line of Sulphur Street (40 foot right-of-way) with the North line of Powell Street (30 foot nght-of-way), said corner also being the Southwest corner of said Lot 1; THENCE North, along said East line, a distance of 50.00 feet to a 5/8 inch found iron rod set for comer at the Northwest corner of said Lot 1 and the Southwest comer of Lot 2, of said Block 58/6813; THENCE East, departing said East liné and along the common line between said Lot 7 and said Lol 2, a distance of 103.00 feet to an "x" cut set for corner al the Northeast corner of said Lot 1 and the Southeast corner of said Lot 2, and in the West line of a 14 foot wide public alley, THENCE South along said West line, a distance of 50.00 feet to a 60-d nail set for comer in the abovementioned North line of Powell Street, THENCE West, along said North line, a distance of 103.00 feet to the POINT OF BEGINNING and CONTAINING 5,150 square feet or 0.1182 acres of land, more or less. 293961_1.D0C Exhibit A — Page 3AEE EELS LT ARAW EA 021003 9200000000260AFS0955" . . CHANGE IN TERMS AGREEMENT Loan Date 078317201 F initials ea ‘above are for Lender's use only and do not limit the epphcabiity of this document to any pelticuler loan oF item. ‘Any itatn above containing “*'"* has been omitted dua to text length lenitations Borrower: U.S.A, Enviconmental Group. Inc. Lender; 315 Yorktown 51. Delias, TX 75208 2201 Denely Drive, Suite 350 Auetle, TX 78758 (800) 239-1996 Principal Amount: $300,000.00 Date of Agreement: January 31, 2010 DESCRIPTION OF EXISTING INDEBTEDNESS. The indebtedness evidenced by the note, credit sgisement or other instrument from Borrower faver of Lender dated July 17. 2006 in the origins! princips: smount af $300,000.00 [the "Note"? DESCRIPTION OF COLLATERAL, The collateral desctibed wm each security agieement. mortgage, deed of uust, pledge agreement or oine! Gocwmant trot currenty secures the Note shall contnus to secure the Note ws modded by th Change in Terme Agreament and eny end all previous and future renewels of, extentions of, modifications of, retmencings of, consotidetions of, and subsinurions fer the Note. DESCRIPTION OF CHANGE IN TERMS, The Note is modified ax provided in this Change in Terms Agreement: The payments requerd wader the Nots thull be those shown in the PAYMENT suction below. The minunum interest rate on the Note {sometimes referied to vs the “floor”? is ti to the rate provided wn the VARIABLE INTEREST RATE section below. Following eny advances requitad by thw Change in Terme Rpreement and notwahatendng wny provision of the Note to the contrary, Landa na longer shell have any obigation te mebe any eddulionel aanances of oinerwise extend any additional eredh under the Note, The maturity date of the Note is extended es provided in the PAYMENT ction below. PAYMENT. Borrower will pey thls loen In one principal paymant of $300,000.00 plus intereat on June 30, 2010, This payment dus on June 30, 2010, wil be for af principal and all accrued Intersat not yet peid. In ‘addition, Borrower will pay raguler monthly payments ef corued reeset aay each buyment date, beginning Februsry 17, 2010, with aif subsequent intaraet payments to ba dus on the same day of VARIABLE INTEREST RATE, Ths interost sate on this loan is subject 0 change from ums to time based on chenges i9 on dex which is the Compass Bank Prime Rat Lender's discretion {the “Inde: Index in not necosseriy the lowest in ite sole dieetotion. It the Index become: fable uring ihe term of thie loan, Lander may deetgnate « substitute index after notitying Borrower Landar will well Borrewer the cu Inder rete unen Borrower's request, The interest rete change will not occur more often shen each day. Borrower underatends thet Lender mate leone based on othe! false as well. The Index currently ix 3.250% par snoum. Interest prior to manusity on the unpaid principal bal Sr ents Inen oe be calculated as described in the “INTEREST CALCULATION METHOD” paragraph using arate of 1.000 percemiage pow over the Indes, Bdyxted f necessary fol Bay mnenum and maximum sete Imitetions described below, resuiing nm an mutiel cate of S.000% per annum baved on 6 yee of 360 days, NOTICE: Under no cixcumstances will the inter fo ot Post Matuinty Rete shown below) :ho I alowed by app! ; of tha Ageament, the “maximum tate allowed by appliceble law" means the geste! of (A) the mnanimum rete of terest pelmated under federal or other law applicable to the ndabiednese evidenced by thit Agreament. or (B) the “Weekly Ceiling’ read to m Sections 303.002 and 303.003 of the Tex INTEREST CALCULATION METHOD. Interest on thie loan it computed on a 365/360 basi ‘s year of 360 days, multiplied by the outstanding principal balance, muttiphed by the actual number of devs the principal b such ealouistion would result In » usurious rate, interest ehall be caleulated on 2 per diem basa of awye, a may be, All interest payable under this oan it computed using this method, This celeulation math attective i fe than the numeric interest rate eteted in the loan documents CONTINUING VALIDITY, Except os expressly changed by thie Agreement, the terms of the original obiigetion of obligations. including all apracmente evidenced or securng the obligatian|s}, remain unchanged and w full force and stfect. Consent by Lander to thw Agreement dove sai twaive Lender'e right to eUiet performance of the ebiigetion(s} af changed, not odiigare Lender to make ény future change wn terms. Nottng ent wal consinute # seustaction of the obligatienls!. 1 is the intention of Lender 10 rete au linble pertms ail makers and Endorvere of the orginal obiigationla), including accommodation parties, unless # party ia exprartly roleased by Lender in writs. Any matot oF endorast, inchudang accommodation mekets, wil not be 1 je of this Agieemant. If any person who signed the original obligation Goer not aign tha Agreement below, then al persons signing below acknowledge that this Agiaement is given conduionaly, based on the intation to Lender that the non-slgning party consenta to the chenges end provisions of tha Agreement of otherwise wril not be released fet applies not only to any hnifial extension. modification of release, but alsa to all such subsequent action: JURISDICTION. Any legal action 01 procveding brought by Lend! 01 Borrower sgsinat the other ariting out of or relating to the loan evidenced by tals in wy ghell be mstituted wn tha fode-al court {or of the £1Rt® court sifting m the county where Lender'e office that Ot be inia lean i located. Wah respect 10 eny Proceeding. 4ach Borrower, to tne fulleat extent permitted by Jew’ {i) waives nny objactwone thet Borrower may now ot hereafter heve based on venue andlor forum non conveniens of any Proceading in such court: end Li) erevocably subin to the jurisdiction at any puch court i any Proceadng. Notwithstanding anything te the contrary hetsin, La gal proceedings ‘proceed againni Borrowar in any other ulizdiction if determined by Lends! to be necessary in ordar to fully enforce of ceoreise wny right of remedy of Lender teleting to this loan, inclvdeng wohout Imnation, reahzaton upon collareral that secures thes loan. ERRORS AND OMISSIONS. | apres that if deemed necessary by Lende: of any agent closing the loan evidenced by this Note ("the L¢ Lender or the agent may cor fat thit Note and any other documents executed in connection with the Loan {"Rolaied Documents} on my Dehail, ne if] were making the correction of adjvatment, in order to correct ‘A cletical ecror is information mi document thet te mienang of thet does not reflect eccurately my agreement with Lender at tha time the document was executed. If any such clevea! ror a inateral changes, | egies to fully cooperate m correcting such exfors within 30 days of the date of maimg by Lender of g vequect to do tat. Any change in the document ‘ct @ change in tho agreement of the pwties is an “alteration” or “amendment,” which must be io wnitmg end signed by the party who wih be Dound by the change. CHANGE IN INITIAL INTEREST RATE. If this Note, evidences an extension of creda with « variable rete and a0 invtat incerost 201 ‘tate stated on the Note when it i signed may differ from the actual rate dus to changes m tha index before closing, that is, by applying the tatio of the inte nce is outstanding, BF INTEREST RATE PROTECTION. 11 Borrower ente agieemont with Lender for an interest rate seep product designed to ollow Borrower effectively 10 pay a fixed rate on all of any portion of thin variable + ta “Swap Agreement"), then, for any payment period ae sce this Mote. Lander wil waive any minimum interest cate provided in the Nete, but only: (1) for #s long a6 the Swap Agreement temains tects and {2) wath respect %0 thet portion of the outstanding pineal batence of thir Note thol is equal to the amount uted to calculate the DEFINED TERMS. Unless ctherwi the Note of related losn document defined in this Change in Terma Agreement, all undetined terms thal have the mesnings given to them wy fe tate tied to an index plus @ margin. that cate may. at tm jet Rete, In the event thet the sum of the Index plus 1 EXHIBIT BLoen No. 00102675940000000026 - (Continued) Page 2 PRIDR TO SIGNING THIS AGREEMENT. BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS AGREEMENT, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS OF THE AGREEMENT. BORROWER: U.S.A. ENVIRON!PROMISSORY NOTE $1,200,000.00 February 22, 2007 FOR VALUE RECEIVED, WESTERN STATES REALTY LLC, a Nevada limited liability company ("Maker", whether one or more), hereby unconditionally promises to pay to the order of COMPASS BANK ("Payee") at 9090 Skillman, Suite 100, Dallas, Texas 75243, or at such other address given to Maker by Payee, the principal sum of ONE MILLION TWO HUNDRED THOUSAND AND NO/100 DOLLARS ($1,200,000.00), in lawful money of the United States of America, together with interest per annum (calculated on the basis of a 360- day year) on the unpaid principal balance from day-to-day remaining, computed from the date of advance until maturity at the rate equal to the lesser of (a) the Maximum Rate (as hereinafter defined) or (b) SEVEN AND SIXTY-THREE ONE HUNDREDTHS OF ONE PERCENT (7.63%). Principal and interest under this note (the "Note") are due and payable as follows: Principal and interest hereon shall be due and payable monthly in installments of NINETHOUSAND SEVEN HUNDRED SIXTY-TWO AND 73/100 DOLLARS ($9,762.73),including interest, with the first such installment being due and payable on March 22, 2007, and with a like installment being due and payable on the 16% day of each succeeding month thereafter until February 22, 2010 ("Maturity Date"), when all outstanding principal hereon plus all accrued but unpaid interest thereon shall be finally due and payable. All payments received hereon shall be applied first to the payment of accrued interest on the unpaid principal, with the remainder, if any, applied to reduction of principal. The term "Maximum Rate," as used herein, shall mean, with respect to each holder hereof, the maximum nonusurious interest rate, if any, that at any time, or from time to time, may under applicable law be contracted for, taken, reserved, charged or received on the indebtedness evidenced by this Note under the laws which are presently in effect of the United States and the State of Texas applicable to such holder and such indebtedness or, to the extent allowed by law under such applicable laws of the United States of America and the State of Texas which may hereafter be in effect, which allow a higher maximum non-usurious interest rate than applicable laws now allow; provided, that in determining the Maximum Rate, due regard shall be given, to the extent required by applicable law, to any and all relevant payments, fees, charges, deposits, balances, agreements and calculations which may constitute or be deemed to constitute interest, or be deducted from principal to calculate the interest rate or otherwise affect interest rate determinations, so that in no event shall the Payee contract for, charge, receive, take, collect, reserve or apply, on the Note, any amount in excess of the maximum non-usurious rate of interest permitted by applicable law. To the extent that Texas law determines the Maximum Rate, the Maximum Rate shall be determined by utilizing the “indicated rate ceiling” from time to time in effect pursuant to the Texas Finance Code (V.T.C.A. Finance Code Section 303.001 et seq ) (the "Texas Finance Code") or such successor Promissory NOTE PAGE 10F 5 EXHIBIT Cstatute, as then in effect, governing usury. The Maximum Rate shall not be limited to the applicable rate ceiling in the Texas Finance Code or such successor statute if Federal laws or other state laws now or hereafter in effect and applicable to this Note (and the interest contracted for, charged and collected hereunder) shall permit a higher rate of interest. Maker and Payee intend to comply with the applicable law governing the Maximum Rate. Interest contracted for, charged, or received shall not exceed the Maximum Rate, and, ifin any contingency whatsoever, Payee shall receive anything of value deemed interest under applicable law which would cause the interest contracted for, charged, or received by the holder thereof to exceed the maximum amount of interest permissible under applicable law, the excessive interest shall be applied to the reduction of the unpaid principal balance hereof and not to the payment of interest, or if such excessive interest exceeds the unpaid principal balance hereof such excess shall be refunded to Maker, and the provisions of this Note and any demand on Maker shall immediately be deemed reformed and the amounts thereafter collectible hereunder shall be reduced, without the necessity of the execution of any new documents, so as to comply with the applicable Jaw, but so as to permit the recovery of the - fullest amount otherwise called for hereunder. AlJ interest paid or agreed to be paid to the holder hereof shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full term of such indebtedness until payment in full (including the period of any renewal or extension hereof) so that the rate or amount of interest. on account of such indebtedness does not exceed the Maximum Rate. Maker agrees that all loan fees and other prepaid charges are earned fully as of the date of the loan and will not be subject to refund, except as required by law. Subject to the prepayment fee and other conditions provided herein, Maker may pay all or a portion of the amount owed before it is due. Prepayment in full shall consist of payment of the remaining unpaid principal balance together with all accrued and unpaid interest and all other amounts, costs and expenses for which Maker is responsible under this Note or any other agreement with Payee pertaining to this loan before such amounts are due, whether such prepayment arises from a voluntary or involuntary prepayment, acceleration of maturity, or any other cause or reason. Prepayment in part shall consist of payment of any portion of the unpaid principal balance before it is due, whether such prepayment arises from a voluntary or involuntary prepayment, acceleration of maturity, or any other cause or reason. Unless otherwise agreed by Payee in writing and provided that Maker is current on all amounts due, payments applied to the loan before Payee's creation of a billing statement for the next payment due will be applied entirely to principal, and payments applied to the Joan after the creation of such billing statement wil! be applied according to that billing statement. Unless otherwise agreed by Payee in writing and provided that Maker is current on all amounts due, payments applied to the loan before Payee's creation of a billing statement for the next payment due shall not relieve Maker of Maker's obligation to continue making, uninterrupted, payments under this Note. Maker's liability under this Note includes all obligations incurred by Maker under any agreement between Maker and Payee or any affiliate of Payee, such as an ISDA Master Agreement and one or more confirmations issued in connection therewith whether now Promissory NOTE PAGE 2OF5 07-0528 - promissory note 03 wpdexisting or hereafter entered into, which provides for an interest rate, currency, equity, credit or commodity swap, cap, floor or colar, spot or foreign currency exchange transaction, cross currency rate swap, currency option, any combination or, or option with respect to, any of the foregoing or similar transactions, for the purpose of hedging the Maker's exposure to fluctuations in interest rates, exchange rates, currency, stock, portfolio or loan valuations or commodity prices (each a “Hedge Agreement") Maker agrees to pay a late charge of five percent (5%) of the payment amount if such payment is not received within ten (10) days of the due date. Payments, when made, shall be applied in a manner and order according to the sole discretion of the holder of this Note. All past-due principal and, to the extent permitted by applicable law, past-due interest upon this Note shall bear interest at the Maximum Rate. This Note is secured in part by a Deed of Trust (with Security Agreement and Assignment of Rents), which together with all other documents evidencing, securing or pertaining to the transaction in which the indebtedness evidenced hereby is incurred are collectively referred to as the "Loan Documents". Maker and each surety, endorser, guarantor and other party ever liable for payment of any sums of money payable on this Note, jointly and severally waive presentment, protest, notice of protest and nonpayment, notice of default and notice of acceleration and intention to accelerate, and agree that their liability under this Note shall not be affected by any renewal or extension in the time of payment hereof, or in any indulgences, or by any release or change in any security for the payment of this Note, and hereby consent to any and all renewals, extensions, indulgences, releases or changes, regardless of the number of such renewals, extensions, indulgences, releases or changes. If this Note or any Loan Documents are given by Payee to an attorney for collection or enforcement, or if suit is brought for collection or enforcement, or if it is collected or enforced through probate, bankruptcy, or other judicial proceeding, then Maker shall pay Payee all costs of collection and enfércement, including reasonable attorney's fees, expenses and court costs, in addition to other amounts due. No waiver by Payee of any of its rights or remedies under this Note or any Loan Documents, shall be considered a waiver of any other right or remedy of Payee; no delay or omission in the exercise or enforcement by Payee of any rights or remedies shall ever be construed as a waiver of any right or remedy of Payee; and no exercise or enforcement of any such rights or remedies shall ever be held to exhaust any right or remedy of Payee. Prepayment in full of the Loan is permitted at any time on or after the first day of the first month; provided, however, that upon any such prepayment in full which is made on or before the last day of the thirty-sixth (36) month, Maker shall also pay Payee the Prepayment Fee (as hereinafter defined). The Prepayment Fee is consideration for the privilege of making such prepayment, and shall be paid to Payee simultaneously with the making of the Promissory NOTE PAGE 3 OFS 07.0528 - promistory note 005 pdprepayment. The Prepayment Fee shall be equal to the product of (i) the outstanding principal balance of this Note at the time of a prepayment, and (ii) the Prepayment Factor (as hereinafter defined) then in effect. The Prepayment Factor shall mean (;) three percent (3%) coramencing on the first day of the first (ist) month through and including the last day of twelfth (12th) month; (i) two percent (2%) commencing on the first day of the thirteenth (13th) month through and including the last day of the twenty-fourth (24th) month; and (iii) one percent (1%) commencing on the first day of the twenty-fifth (25th) month through and including the last day of the thirty-sixth (36th) month. Notwithstanding the foregoing, Maker may prepay t