EXHIBIT (b)(2)
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into by and between Arvest Bank,
Fayetteville, an Arkansas State Bank ("Bank"); The ▇▇▇▇▇▇ Family, LLC, an
Arkansas limited liability company ("Borrower"); and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an
Arkansas resident, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an Arkansas resident (collectively
"Guarantors").
W-I-T-N-E-S-S-E-T-H
For valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Bank, Borrower and Guarantors agree as follows:
1. Definitions. The following terms will have the following meanings for
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purposes of this Loan Agreement and the Loan Documents:
1.1. Accrued Interest. "Accrued Interest" will mean the interest at
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the Interest Rate that will have accrued on the Principal.
1.2. Advance. "Advance" will mean disbursements of the Principal or
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payment of Fees and Expenses by Bank to, or on behalf of, Borrower.
1.3. Applicable Law. "Applicable Law" will mean the constitutions,
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statutes, rules, regulations, orders, decisions, judgments, and decrees of
Governmental Authorities of the State of Arkansas and other Governmental
Authorities having jurisdiction over the Parties and the Collateral.
1.4. Assignment of Life Insurance. "Assignment of Life Insurance"
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will mean the assignment of life insurance agreement executed and delivered
by Guarantors to Bank.
1.5. Assignments of Rents and Leases. "Assignments of Rents and
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Leases" will mean the assignments of rents and leases of the Real Property
executed and delivered by Borrower to Bank pursuant to this Loan Agreement.
1.6. Bank. "Bank" will mean Arvest Bank, Fayetteville, an Arkansas
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State Bank.
1.7. Borrower. "Borrower" will mean and refer to The ▇▇▇▇▇▇ Family,
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LLC, an Arkansas limited liability company.
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1.8. Collateral. "Collateral" will mean the Mortgages of the Real
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Property, Assignments of Rents and Leases, Fixtures, Assignment of Life
Insurance, and all other security for the Loan as well as all additions,
accessions, substitutions, and replacements thereto or therefor, whether
now owned or hereafter acquired, and all proceeds thereof.
1.9. Commitment. "Commitment" will mean the commitment of a
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reputable title insurance company to issue the Loan Policy.
1.10. Environmental Law. "Environmental Law" will mean Applicable Laws
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relating to Hazardous Substances and the protection of human health and the
environment.
1.11. Event of Default. "Event of Default" will mean any one or more
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of those acts, omissions, conditions, occurrences, happenings and events
referred to in Section 6.1 of this Loan Agreement.
1.12. Fees and Expenses. "Fees and Expenses" will mean: (a) all
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those fees and expenses identified in this Loan Agreement; (b) all late
fees; (c) closing fees and expenses; (d) expenses relating to the issuance
of the Commitment and Loan Policy, including any expense associated with
curing the title of Bank or Borrower to the Real Property; (e) all expenses
relating to the perfection of the Liens of Bank in and to the Collateral;
(f) all expenses relating to the preservation and protection of the Liens
of Bank in and to the Collateral; (g) all expenses relating to maintaining
the first priority of the Liens of Bank; (h) all attorneys' fees incurred
by Bank during the negotiation, execution, preparation, and closing of this
Loan Agreement and the Loan Documents; (i) all attorneys' fees incurred by
Bank to enforce or interpret any provision of this Loan Agreement or the
Loan Documents; (j) all attorneys' fees incurred by Bank if Bank will file
or commence any Litigation to protect its rights or to enforce any
provision of this Loan Agreement or the Loan Documents; (k) all expenses
incurred by Bank while the Collateral is in the possession of Bank; (l)
recording fees; (m) recording taxes; (n) appraisal fees; (o) title and Lien
searches; (p) travel expenses; (q) origination fees; and (r) all expenses
incurred by Bank on behalf of Borrower or Guarantors.
1.13. Financial Reports. "Financial Reports" will mean all financial
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statements, balance sheets, income statements, statements of owners'
equity, and statements of cash flow and all other similar documents
delivered by or on behalf of any Person pursuant to this Loan Agreement.
1.14. First Payment Date. "First Payment Date" will mean April 1,
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2002.
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1.15. Fixtures. "Fixtures" will mean all fixtures, buildings,
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streets, roads, driveways, parking areas, fences, retaining walls, other
types of walls, hedges, landscaping, utility poles, light fixtures, and any
other improvement attached to or forming a part of the Real Property and
all additions, accessions, substitutions, and replacements thereto,
wherever located, whether now owned or hereafter acquired and all proceeds
thereof.
1.16. Fixture Statement. "Fixture Statement" will mean the Uniform
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Commercial Code Financing Statement to be recorded pursuant to this Loan
Agreement to perfect the Liens of Bank in the Fixtures.
1.17. Governmental Authority. "Governmental Authority" will mean the
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executive, legislative, and judicial bodies of the State of Arkansas, and
any agency or department thereof and will also include the executive,
legislative, and judicial bodies of the United States of America and any
other state having jurisdiction over the Parties or the Collateral.
1.18. Guarantors. "Guarantors" will mean any and all of ▇▇▇▇▇ ▇.
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▇▇▇▇▇▇, an Arkansas resident, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an Arkansas resident.
1.19. Guaranty. "Guaranty" will mean and refer to the guaranty
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executed and delivered by each of Guarantors to Bank.
1.20. Hazardous Substances. "Hazardous Substances" will mean any
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toxic or hazardous substance, material, waste, contaminant or pollutant,
including: (a)petroleum and petroleum products including gasoline, diesel
fuel and oil; (b) explosives and flammable materials; (c) radioactive
materials; (d) polychlorinated biphenyls ("PCB"); (e) lead and lead-based
paint; (f) asbestos or asbestos-containing materials in any form; (g)
underground or above-ground storage tanks, whether empty or containing any
substance; (h) any substance the presence of which on the Real Property is
prohibited by any Governmental Authority; (i) any substance that requires
special permits, franchises, certificates, or licenses; and (j) any other
material or substance now or in the future defined as a "hazardous
substance", "hazardous material", hazardous waste", toxic substance",
"toxic pollutant", "contaminant", or "pollutant" within the meaning of any
Environmental Law.
1.21. Interest Rate. "Interest Rate" will mean and refer to a
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floating rate of interest equal to the lesser of: (i) the base rate on
corporate loans at large U.S. money center commercial banks as published by
the Wall Street Journal; or (ii) the highest lawful rate permitted under
the laws of the State of Alabama, whichever will be less.
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1.22. Lien. "Lien" will mean any mortgage, deed of trust, pledge,
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security interest, encumbrance, charge, lease, any conditional sale or
title retention agreement, hypothecation, and any other lien of any nature
or character whatsoever.
1.23. Litigation. "Litigation" will mean any pending or threatened
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lawsuit, action, cause of action, claim for relief, mediation, arbitration,
governmental investigation, audit, contest or other proceeding of any
nature or character whatsoever.
1.24. Loan. "Loan" will mean the loan of money described in this
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Loan Agreement and will include the Principal, Accrued Interest, and Fees
and Expenses.
1.25. Loan Agreement. "Loan Agreement" will mean this document.
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1.26. Loan Documents. "Loan Documents" will mean the Schedules
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identified in this Loan Agreement, Promissory Note, Mortgages, Assignments
of Rents and Leases, Tenant Agreement, Fixture Statements, Assignment of
Life Insurance, and all other documents which may be made, executed,
delivered, or recorded in connection with this Loan Agreement and the Loan
Documents.
1.27. Loan Policy. "Loan Policy" will mean the title insurance
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policy issued by a reputable title insurance company pursuant to the
Commitment.
1.28. Material Adverse Change. "Material Adverse Change" will mean:
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(a) a material adverse change in the operation of the business, properties,
assets, revenues, expenses, or financial condition of Borrower; or (b) an
impairment of the ability of Borrower to perform the obligations of
Borrower under this Loan Agreement or the Loan Documents.
1.29. Maturity Date. "Maturity Date" will mean December 31, 2006.
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1.30. Mortgages. "Mortgages" will mean the mortgages of the Real
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Property executed and delivered pursuant to this Loan Agreement.
1.31. Obligations. "Obligations" will mean collectively: (a) the
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prompt and complete payment of the Principal, Accrued Interest, and Fees
and Expenses as and when required under this Loan Agreement and the Loan
Documents and any and all extensions, modifications, amendments,
substitutions, replacements, and renewals thereof; (b) the prompt and
complete performance of each and every obligation of Borrower and
Guarantors set forth in the Loan Agreement and the Loan Documents; (c) the
payment of each indebtedness and the performance
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of each obligation to Bank whether now existing or hereafter arising,
voluntarily or involuntarily, by operation of law or otherwise, joint or
several, primary or subordinate, absolute or contingent, or liquidated or
unliquidated.
1.32. Party. "Party" will mean any or all of Bank, Borrower or
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Guarantors.
1.33. Per Annum. "Per Annum" with respect to the Interest Rate will
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mean a calendar year consisting of three hundred sixty-five (365) days.
1.34. Person. "Person" will mean any entity, corporation, company,
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association, limited liability company, joint venture, joint stock company,
partnership, trust, organization, individual (including personal
representatives, executors, and heirs of a deceased individual),
Governmental Authority, trustee, receiver, or liquidator.
1.35. Principal. "Principal" will mean the principal balance of the
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Loan which may be an amount not in excess of Eight Million One Hundred
Thousand Dollars ($8,100,000).
1.36. Promissory Note. "Promissory Note" will mean the promissory
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note made by Borrower pursuant to this Loan Agreement.
1.37. Real Property. "Real Property" will mean the real property and
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appurtenant easements and rights of way, and the buildings, fixtures, and
other improvements thereon, now or hereafter owned by Borrower described in
Schedule 1.37.
1.38. Request for Advance. "Request for Advance" will mean any
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document submitted by the Bank seeking an Advance.
1.39. Tenant. "Tenant" will mean National Home Centers, Inc., an
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Arkansas corporation.
1.40. Tenant Agreement. "Tenant Agreement" will mean the Tenant
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Agreement entered into by and among Bank, Borrower, and Tenant as of the
date of this Loan Agreement.
The above definitions will apply to all uses of the above terms including the
singular, plural, and possessive, and the past, present, and future tense.
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2. Loan. In substantial and justified reliance on the representations,
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warranties, and covenants of Borrower and Guarantors and subject to the
provisions of this Loan Agreement and the Loan Documents, Bank will make a loan
of money to Borrower described as follows (the "Loan"):
2.1. Principal. Subject to the provisions of this Loan Agreement and
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the Loan Documents, until the Maturity Date or an Event of Default, the
Principal may be disbursed to, or on behalf of, Borrower in the form of a
closed end, non-revolving line of credit through a series of one or more
Advances; provided however, the total amount of all Advances shall at no
time exceed the Principal reduced by unpaid Fees and Expenses.
2.2. Interest. The outstanding and unpaid Principal will bear simple
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interest Per Annum at the Interest Rate beginning on the date that the
first Advance will be made by Bank to, or on behalf of, Borrower and
continuing until the Principal and Fees and Expenses will be paid in full.
2.3. Payment. On the First Payment Date, Borrower shall make a
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payment to Bank in the amount of the Accrued Interest. Beginning on the
first day of the month following the First Payment Date and continuing on
the same day of each month thereafter until the Maturity Date, Borrower
will make payments to Bank based on an amortization of the maximum
permitted Principal over a period of fifteen (15) years. On or prior to
the Maturity Date, Borrower will pay to Bank the sum of the outstanding
Principal, Accrued Interest, and unpaid Fees and Expenses. All payments
will be applied in the following priority unless otherwise determined by
Bank: Fees and Expenses, Accrued Interest, and Principal. Borrower may
prepay the Loan, in whole or in part, without penalty at anytime before the
Maturity Date. Bank and Borrower may enter into a sweep agreement
permitting frequent or scheduled payments to Bank of Principal, Accrued
Interest and Fees and Expenses; provided however, the breach by Bank of any
provision of such sweep agreement will not excuse or waive compliance of
Borrower with the provisions of this Loan Agreement or the Loan Documents.
2.4. Origination Fee. On the date of this Loan Agreement, Borrower
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shall pay an origination fee to Bank in an amount equal to one-quarter of
one percent (0.0025) of the maximum permitted Principal or Twenty-one
Thousand Two Hundred Fifty Dollars ($21,250) in consideration of the
underwriting, review, origination, and making of the Loan by Bank to
Borrower. Such origination fee will be deemed to be fully earned when paid
and will not be refunded to Borrower for any reason.
2.5. Fees and Expenses. In addition to the Principal and Accrued
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Interest, the Loan will include, and Borrower will pay, all Fees and
Expenses. If any Fees and Expenses will not have been paid by or on
behalf of Borrower within five (5) days after notice, Bank may, in addition
to
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any other rights or remedies, either: (i) pay the Fees and Expenses and
charge Borrower interest at the Interest Rate on the amount thereof until
paid in full; or (ii) without further notice to or consent from Borrower,
Bank may cause an Advance to be made in such amount necessary to pay the
Fees and Expenses. If any payment will be received by Bank more than ten
(10) days after it will be due, Borrower will pay a late charge for each
such late payment of five percent (5%) of the late payment up to a maximum
for each late payment equal to Fifty Dollars ($50) and a minimum of Five
Dollars ($5) for each late payment.
2.6. Promissory Note. The Loan will be further evidenced by the
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Promissory Note made by Borrower and payable to Bank.
3. Collateral. As security for and to guarantee the prompt and complete
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payment and performance of the Obligations as well as any future advances,
Borrower will provide, or cause to be provided, to Bank the Collateral and
Guaranties as follows:
3.1. Mortgages. Borrower will execute and deliver the Mortgages
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granting to Bank a continuing first priority, perfected Lien on the Real
Property.
3.2. Assignments of Rents and Leases. Borrower will execute and
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deliver the Assignments of Rents and Leases assigning to and granting a
continuing first priority, perfected Lien in all rents and leases
attributable to the Real Property.
3.3. Fixture Statements. Borrower will execute and deliver to Bank
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the Fixture Statements granting a continuing first priority, perfected Lien
on all Fixtures and all additions, accessions, substitutions, and
replacements thereto or therefor and whether now owned or hereafter
acquired.
3.4. Assignment of Life Insurance. Borrower and Guarantors will
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cause to be assigned for the benefit of Bank a life insurance policy
insuring the life of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in the amount of One Million Dollars
($1,000,000).
3.5. Guaranty. Guarantors will each execute and deliver a Guaranty
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and will unconditionally and absolutely guarantee the prompt and complete
payment and performance of the Obligations.
3.6. Proceeds. Borrower hereby pledges all proceeds from the sale,
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assignment, rental, lease, exchange, transfer, or other disposition of any
of the Collateral.
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4. Representations and Warranties. In order to induce Bank to make the
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Loan, Borrower hereby represents and warrants as of the date of this Loan
Agreement and the date of each Advance and Allocation, as follows:
4.1. Name. The legal name of Borrower is "The ▇▇▇▇▇▇ Family, LLC".
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Borrower does not have any assumed names and do conduct its business under
any trade-names or fictitious names.
4.2. Location of Business. The principal office and principal place
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of business of Borrower is located at Highway 265 North, 1106 ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
4.3. Purpose. The Loan will be used by Borrower solely for purposes
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approved by Bank.
4.4. Binding Obligation. The execution, delivery, and performance of
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this Loan Agreement and the Loan Documents have been authorized by Borrower
and Guarantor. All required action has been taken by Borrower or Guarantor
to authorize the execution and delivery of this Loan Agreement and the Loan
Documents and to authorize the performance of the representations,
warranties, and covenants of Borrower and Guarantor under this Loan
Agreement and Loan Documents. This Loan Agreement and the Loan Documents
constitute the legal, valid, and binding representations, warranties, and
covenants of Borrower and Guarantors and are enforceable in accordance with
their respective provisions, except to the extent enforcement may be
limited by bankruptcy, insolvency, moratorium, or other similar laws
generally affecting the rights of creditors, by general principles of
equity, and by the exercise of judicial discretion.
4.5. No Conflict. The execution, delivery, and performance of this
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Loan Agreement and the Loan Documents do not, and will not violate: (a) any
Applicable Law; (b) any order, writ, judgment, injunction, decree,
determination, or award of any Governmental Authority; or (c) any agreement
of Borrower or Guarantors with any Person.
4.6. Consent; Licenses. The execution, delivery, and performance of
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this Loan Agreement and the Loan Documents do not require the prior or
subsequent consent of any Governmental Authority or other Person. All
permits, franchises, certificates, and licenses have been issued that may
be necessary for the operation of the business of Borrower, and all such
permits, franchises, certificates, and licenses are in good standing and
have never been suspended, revoked, or terminated for any reason, except
where the failure to obtain or maintain such permits, franchises,
certificates, and licenses does not result in a Material Adverse Change.
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4.7. Material Agreements. Each contract or agreement material to
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conducting the business of Borrower is in writing and is in full force and
effect and enforceable in accordance with its provisions, except to the
extent enforcement may be limited by bankruptcy, insolvency, moratorium,
or other similar laws affecting the rights of creditors generally, by
general principles of equity, and by the exercise of judicial discretion.
Borrower is not in breach or default of any such contract or agreement, and
no event has occurred or is continuing which, with the lapse of time or the
giving of notice, or both, would constitute a breach or default the result
of which would cause a Material Adverse Change.
4.8. Title to Collateral. Except for Liens granted to Bank,
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Borrower has good and marketable title to the Collateral free and clear of
any Lien. Borrower is the sole owner of the Collateral, and there are no
outstanding options or other rights to purchase all or any part of the
Collateral in favor of any Person.
4.9. Priority. Upon the execution and delivery of this Loan
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Agreement and the Loan Documents by Borrower and the Guaranties by
Guarantors and the filing of the Mortgages, Fixture Statements, and the
Assignments of Rents and Leases with the required Governmental Authorities,
Bank will have a continuing, first priority, perfected Lien in and to the
Collateral.
4.10. Financial Reports. The Financial Reports delivered to Bank
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prior to the date of this Loan Agreement fairly and accurately present in
all material respects the financial condition of Borrower and Guarantors in
accordance with generally accepted accounting principles.
4.11. Liabilities. Borrower has no fixed or contingent liabilities,
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except for liabilities shown on the Financial Reports, liabilities arising
in the ordinary course of business, and liabilities to Bank.
4.12. Solvency. Borrower and Guarantors are now solvent and has
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never in the past been the subject of any bankruptcy, insolvency,
reorganization, liquidation proceeding or any other similar proceeding.
4.13. Tax Returns and Reports. All federal, state, and local tax
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returns and reports required to be filed by Borrower and Guarantors have
been filed or will be filed when due with the appropriate Governmental
Authorities. All such returns and reports are accurate and complete. All
federal, state, and local income, franchise, sales, use, occupation,
property, excise, payroll, employment, and other taxes and assessments
payable by Borrower and Guarantors have been paid when due. No issues are
pending with any Governmental Authority in connection with any of the
returns and reports which might cause a Material Adverse Change to
Borrower. To the
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extent required by Applicable Law, all taxes and assessments have been
withheld or collected by Borrower. To the knowledge of Borrower and
Guarantors, there is no deficiency claimed or proposed to be claimed
against Borrower or the Collateral by any Governmental Authority which has
not been paid, settled, or adequately reserved for by Borrower.
4.14. Credit Information. Any and all credit or other information
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provided, or to be provided, to Bank by, or on behalf of, Borrower or
Guarantors in connection with this Loan Agreement or the Loan Documents is
accurate and complete.
4.15. Real Property. As to the Real Property, Borrower and
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Guarantors represent and warrant that: (a) the Real Property has lawful
access to an adjoining road, highway, or street, either across the Real
Property or by public or private easement; (b) there are no encroachments
on the boundaries of the Real Property; (c) there are no easements or
rights of way encumbering the Real Property except for those shown by the
records of the Recorder of the County in which the Real Property is located
and disclosed on the Commitment; (d) there are no unrecorded Liens granted
by Borrower affecting the Real Property; (e) all Liens affecting the Real
Property, if any, (other than Liens of Bank) will be satisfied in full and
releases thereof will have been delivered on or prior to the date of this
Loan Agreement; (f) the Real Property is currently zoned by all applicable
Governmental Authorities to permit the uses intended by Borrower, and the
intended use of the Real Property does not violate any zoning or building
code or any other Applicable Law; (g) no Person has acquired any rights to
the Real Property by adverse possession or prescription; (h) the
improvements on the Real Property do not lie within any set-back area
required by Applicable Law; (i) the improvements on the Real Property do
not lie within any one hundred (100) year flood zone as determined by the
Federal Emergency Management Agency except a portion of the Real Property
located in Pulaski County, Arkansas as shown on a survey obtained by
Borrower and Bank; and (j) except as reflected on the Commitment there are
no public or private restrictions by which the Real Property or Borrower is
bound that prohibit, limit, or impair any intended use of the Real
Property.
4.16. Environmental Condition. Borrower and the Collateral are in
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compliance with all Environmental Laws in all material respects. The
storage and use of Hazardous Substances by Borrower is in compliance with
Environmental Laws in all material respects.
4.17. Compliance with Laws. Borrower is in compliance with
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Applicable Law in all material respects.
4.18. Litigation. Except as disclosed in Schedule 4.18, there is no
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pending, or to the knowledge of Borrower and Guarantor, threatened
Litigation involving Borrower, Guarantors, or
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the Collateral and such litigation involving Tenant in which damages are
claimed to be in excess of Seventy-five Thousand Dollars ($75,000). Neither
Borrower, Guarantors, nor the Collateral is subject to any order, judgment,
or decree, or any other legal restriction, which might cause a Material
Adverse Change.
4.19. Material Adverse Changes. Borrower has not suffered any one or
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more changes which, alone or in the aggregate, has had or is reasonably
likely to result in a Material Adverse Change.
4.20. Disclosure. To the knowledge of Borrower and Guarantors, no
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statement made or document delivered by Borrower or Guarantors in
connection with this Loan Agreement and the Loan Documents contains any
inaccurate or incomplete statement of a material fact or omits a material
fact necessary to make the statements in this Loan Agreement, and the Loan
Documents, not misleading in light of the circumstances in which the
statement was made or the document delivered. There is no fact known to
Borrower or Guarantors which has not been disclosed to Bank in writing and
which, so far as Borrower can now foresee, is reasonably likely to cause a
Material Adverse Change.
5. Covenants. In addition to the representations, warranties, and
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covenants of Borrower and Guarantors stated elsewhere in this Loan Agreement and
the Loan Documents, until the Loan is paid in full, Borrower promises,
covenants, and agrees as follows:
5.1. Change of Name. Borrower will send written notice to Bank at
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least thirty (30) days prior to the effective date of any change in the
name of Borrower or the adoption of any trade-name, fictitious name, or
assumed name. Borrower will pay all Fees and Expenses incurred or paid by
Bank in connection with the continued perfection and priority of the Liens
of Bank in the Collateral as a result of any change in the name of Borrower
or the adoption of any trade-names, fictitious name, or assumed name.
5.2. Location of Business. Borrower will notify Bank at least thirty
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(30) days prior to any change of its principal place of business. Borrower
will pay all Fees and Expenses incurred or paid by Bank in connection with
the continued perfection and priority of the Liens of Bank in the
Collateral as a result of any change in any principal place of business.
5.3. Existence. Borrower will take all actions necessary or
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desirable to preserve, renew, and maintain in full force and effect the
existence, rights, contracts, permits, franchises, and licenses of
Borrower, to the extent necessary for the lawful proper operation of the
business of Borrower.
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5.4. Financial Reports. As soon as available and in any event within
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thirty (30) days after the end of each fiscal quarter until the Loan will
be paid in full, Borrower will deliver to Bank an accurate and complete
copy, in all material respects, of the unaudited Financial Reports of
Tenant prepared in accordance with generally accepted accounting principles
for the period ending as of the prior fiscal quarter or fiscal year as
appropriate. Upon completion, Borrower will deliver to Bank a copy of the
audited annual Financial Reports of Tenant. As soon as available and in
any event within one hundred twenty (120) days after the end of each
calendar year until the Loan will be paid in full. Borrower will deliver
or cause to be delivered to Bank an accurate and complete copy, in all
material respects, of the Financial Reports of Borrower prepared in
accordance with generally accepted accounting principles and the statements
of net worth of Guarantors as of the end of the prior fiscal year. Bank
may retain an independent certified public accountant to review the
Financial Reports of Borrower, and Borrower will pay all Fees and Expenses
incurred by Bank in connection with such review.
5.5. Payment of Taxes. Borrower will file all federal, state, and
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local tax returns and reports when and as required by Applicable Law. Upon
filing, Borrower will deliver to Bank an accurate and complete copy of each
federal and state income tax return. All federal, state, and local income,
franchise, sales, use, occupation, property, excise, payroll, and
employment taxes and assessments will be paid when and as required by
Applicable Law. As long as no Lien will be imposed on the Collateral,
Borrower may contest, in good faith, the validity or amount of any taxes or
assessments.
5.6. Payment of Liabilities. Without the prior written consent of
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Bank, in its sole and absolute discretion, Borrower will not incur or
assume any liabilities other than: (a) liabilities relating to this Loan
Agreement and the Loan Documents; (b) liabilities for taxes; (c)
liabilities incurred or assumed in the ordinary course of business; and (d)
other liabilities, alone or in the aggregate, which do not exceed Fifty
Thousand Dollars ($50,000) during any fiscal quarter or Two Hundred
Thousand Dollars ($200,000) during any fiscal year as long as such
liabilities, alone or in the aggregate, will not cause a Material Adverse
Change. Borrower and Guarantors will promptly pay when due, in accordance
with customary trade terms or otherwise, all of their respective
liabilities.
5.7. Leased Properties. Borrower will promptly and completely
-----------------
perform all of the material provisions of any leases of the Real Property.
Upon receipt of any notice or upon obtaining any knowledge of any default
or breach of any of the leases of the Real Property, Borrower will give
prompt written notice to Bank and Borrower will continue to timely and
fully advise Bank of the status of the default or breach and of all actions
taken by Borrower and any other Person to cure the default or breach.
Without the prior written consent of Bank in its sole
Loan Agreement Initials of Borrower
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--------------------
and absolute discretion, Borrower will not materially modify, supplement,
or amend any of the leases of the Real Property or consent to any
assignment or sublease of all or any part of any of the leases. All leases
of the Real Property will be subordinate to the Mortgages.
5.8. Observance of Agreements. Borrower will observe and perform all
------------------------
of the material terms and conditions of all contracts or agreements
material to conducting the business of Borrower, and Borrower will
diligently protect and enforce their rights under all such agreements in a
manner consistent with prudent business judgment.
5.9. Fundamental Changes. Without the prior written consent of Bank,
-------------------
in its sole and absolute discretion, Borrower will not: (a) become a party
to any merger, amalgamation, consolidation, dissolution, or liquidation;
(b) sell, lease, or otherwise dispose of all or substantially all of the
assets of Borrower; (c) sell, lease, or otherwise dispose of any material
asset; (d) cause, suffer, or permit more than ten percent (10%) of its
outstanding securities to be sold or transferred prior to the Maturity
Date; (e) acquire all or substantially all of the assets of any other
Person; (f) acquire all or substantially all of the securities of any other
Person; or (g) establish a subsidiary.
5.10. Dividends; Distributions. Without the prior written consent
------------------------
of Bank, in its sole and absolute discretion, Borrower will neither
directly nor indirectly: (a) declare any dividend or make any distributions
of consideration, of any nature or character whatsoever, to the members or
managers of Borrower other than (i) distributions to members for payment of
federal and state income taxes associated with the income of Borrower and
(ii) such additional distributions to all Members not exceeding Two Hundred
Thousand Dollars ($200,000) during any fiscal year; (b) make any payment on
debts of Borrower to the members and managers of Borrower; or (c) make any
loans to the members or managers of Borrower, except as permitted by
Section 5.6(d).
5.11. Licenses. Borrower will take all necessary or desirable
--------
actions to maintain in good standing all permits, franchises, certificates,
and licenses that may be necessary or desirable for the proper operation of
the business of Borrower.
5.12. Collateral. Upon request by Bank, Borrower will deliver to
----------
Bank any and all evidence of ownership to and grant access to any of the
Collateral. Borrower will take any and all actions necessary or desirable
to preserve, protect, and enforce the Liens of Bank in the Collateral and
the perfection and priority thereof against any and all adverse claims.
5.13. Deposits. Borrower will maintain a depository account with
--------
Bank.
Loan Agreement Initials of Borrower
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--------------------
5.14. Liens. Without the prior written consent of Bank, in its sole
-----
and absolute discretion, Borrower will not grant, suffer, or permit any
Lien on any of the Collateral, whether voluntarily or involuntarily, by
operation of law or otherwise.
5.15. Disposition of Collateral. Without the prior written consent
-------------------------
of Bank, in its sole and absolute discretion, Borrower will not sell,
assign, lease, exchange, or transfer of any of the rights or interests of
Borrower in the Collateral, whether voluntarily or involuntarily, by
operation of law or otherwise.
5.16. Insurance. Borrower will procure and maintain insurance
---------
policies as follows:
(a) Hazard. Borrower will insure the Collateral against loss
------
by fire, theft, and other customary extended coverage hazards in the
amount of the full replacement value of the improvements located on
the Real Property;
(b) Liability. Borrower will maintain insurance against
---------
liability for injuries to Persons and property in the minimum amount
of Two Million Dollars ($2,000,000) for each injury to Person and the
amount of One Million Dollars ($1,000,000) for each injury to
property; and
(c) Workers' Compensation. Borrower will maintain workers'
---------------------
compensation insurance as required by Applicable Law.
(e) Flood Zone. Borrower will assist Bank in obtaining a
----------
Standard Flood Hazard Determination required by the Flood Disaster
Protection Act of 1973, 42 U.S.C. (S)4001 et seq. If all or any part
of the Real Property lies within any flood hazard area, Borrower will
maintain flood insurance in an amount required by Bank, in its sole
and absolute discretion.
All insurance policies will be issued by financially sound and reputable
insurers authorized to conduct business in Arkansas and approved by Bank in
its sole and absolute discretion. All insurance policies will have such
deductibles and cover such risks of loss as customarily maintained by
Persons engaged in similar businesses. All insurance policies will provide
that coverage will not lapse for any reason whatsoever without the insurer
providing prior written notice of not less than fifteen (15) days to Bank.
All insurance policies will name Borrower as named insured and Bank as an
additional insured. Upon request by Bank, Borrower will deliver to Bank a
copy of each insurance policy and each renewal thereof. Borrower will
deliver to Bank such certificates of insurance as may be necessary to show
the compliance of Borrower with the
Loan Agreement Initials of Borrower
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--------------------
insurance requirements of this Loan Agreement and the Loan Documents.
Promptly after receipt of any payment of proceeds of any insurance required
to be maintained pursuant to this Loan Agreement or the Loan Documents,
Borrower will either: (a) apply an amount equal to such proceeds to the
prepayment of the Loan; or (b) if approved by Bank, apply such amount of
the proceeds as necessary to cause the Collateral to be repaired and
restored to its condition prior to the loss, damage, or injury and apply
any remaining amount of the proceeds to the prepayment of the Loan. If
Borrower will fail to maintain the insurance required by this Loan
Agreement or the Loan Documents, Bank may, but will not be obligated to,
procure such insurance, and Borrower will pay all Fees and Expenses
incurred by Bank in connection with maintaining any such insurance.
5.17. Title Requirements. Borrower will deliver the Commitment to
------------------
Bank issued by a reputable title insurance company authorized to conduct
business in Arkansas and approved by Bank in its sole and absolute
discretion. Borrower will also deliver copies of all documents and
instruments, if any, which represent the non-standard exceptions from
coverage in schedule B of the Commitment. The Commitment will obligate the
title insurance company to issue the Loan Policy insuring the title of the
Real Property to Bank in the amount of the Principal subject to only such
requirements and exceptions approved by Bank in its sole and absolute
discretion. The Commitment and the Loan Policy will be on the 1992 version
of the forms recommended by the American Land Title Association unless
otherwise determined by Bank in its sole and absolute discretion. The
Commitment will also reflect that as of the date of the first Advance
Borrower will have a merchantable, fee simple absolute interest in the Real
Property subject only to the Liens granted to Bank, and subject only to the
exceptions from coverage identified in schedule B to the Commitment and
approved by Bank in its sole and absolute discretion. Borrower will take
all actions requested by Bank to cure or remove any exception from coverage
which will not have been approved by Bank, in its sole and absolute
discretion, and to cause the Loan Policy to be issued pursuant to the
Commitment.
5.18. Appraisal. Borrower will deliver an appraisal of the Real
---------
Property performed by a licensed appraiser approved by Bank in its sole and
absolute discretion.
5.19. Opinion Letter. On the date of this Loan Agreement, Borrower
--------------
will deliver to Bank an opinion letter from an attorney in good standing,
licensed to practice in Arkansas, and approved by Bank in its sole and
absolute discretion, certifying, among other things: (a) this Loan
Agreement and Loan Documents are binding contracts on Borrower except to
the extent enforcement may be limited by bankruptcy, insolvency,
moratorium, or other similar laws generally affecting the rights of
creditors, by general principles of equity, and by the exercise of judicial
discretion; and (b) Bank will have taken all necessary actions to perfect
its Liens in the
Loan Agreement Initials of Borrower
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--------------------
Collateral upon recording the Mortgages, Assignments of Rents and Leases,
and Fixture Statements.
5.20. Flood Certification. Borrower will obtain a certification that
-------------------
the improvements on the Real Property do not lie within any zone determined
by the Federal Emergency Administration which may be likely of flooding
more frequently than every one hundred (100) years, except for that part of
the Real Property in Pulaski County, Arkansas as shown on the survey
delivered by Borrower to Bank.
5.21. Compliance With Laws. Borrower and Guarantors will comply in
--------------------
all material respects with the requirements of all Applicable Laws.
Borrower and Guarantors may contest any such Applicable Law in good faith
and by appropriate Litigation as long as Borrower or Guarantors will have
set aside adequate reserves sufficient to pay any liability arising from
the failure to comply with such Applicable Law.
5.22. Litigation. Borrower and Guarantors will promptly notify Bank
----------
in writing of any Litigation in which Borrower or Guarantors are named as a
party or in which the Collateral may be involved. Borrower and Guarantors
will promptly notify Bank in writing of any Litigation involving Tenant in
which the liability of Tenant is claimed to be in excess of One Hundred
Fifty Thousand Dollars ($150,000).
5.23. Visits and Inspections. Borrower will permit representatives
----------------------
of Bank, from time to time, as often as may be reasonably requested, but
only during normal business hours, to visit and inspect the Real Property,
and to inspect, audit and make extracts from the books and records of
Borrower, and discuss with its employees and independent accountants of
Borrower, the business, assets, liabilities, financial condition, business
prospects and results of operations of Borrower.
5.24. Offset. If Borrower or Guarantors have any claim whatsoever
------
against Bank, Borrower will not offset the claim against any payment on the
Loan or any other amount owed to Bank by Borrower.
5.25. Bank Liability. The provisions of this Loan Agreement and the
--------------
Loan Documents will not be deemed to indicate that Bank is in control of
Borrower or Guarantors or that Bank is otherwise closely-connected to
Borrower or Guarantors. If Borrower develops any perception that Bank will
have taken any action or will have engaged in any conduct in a wrongful or
unlawful manner, Borrower and Guarantors will notify Bank in writing no
later than three (3) days of developing the perception.
Loan Agreement Initials of Borrower
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--------------------
5.26. No Covenant to Renew. Borrower and Guarantors acknowledge that
--------------------
Bank has made no representation, warranty, or covenant whatsoever to renew,
rework, refinance, extend, waive, release, or otherwise permit Borrower or
Guarantors to pay the Loan past the Maturity Date.
5.27. Performance by Bank. If Borrower fails to comply with any of
-------------------
the provisions of this Loan Agreement or the Loan Documents, Bank may, but
will not be obligated to, perform or cause the performance of any
obligation, and the Fees and Expenses incurred by Bank in connection
therewith, will be paid by Borrower.
5.28. Indemnification. Borrower and Guarantors will indemnify Bank
---------------
from and against any and all claims, losses, and liabilities, including but
not limited to, reasonable attorneys' fees, arising from any Event of
Default, breach by Borrower and Guarantors, or failure by Borrower and
Guarantors to comply with any provision of this Loan Agreement or the Loan
Documents (without regard to fault or intent of Borrower or Guarantor) or
otherwise arising from this Loan Agreement and the Loan Documents, except
claims, losses, or liabilities resulting solely and directly from the gross
negligence or willful misconduct of Bank. The indemnification provided for
in this Section will survive the payment in full of the Loan for the
maximum period allowed by Applicable Law.
5.29. Protection of Collateral. Borrower and Guarantors shall take
------------------------
any and all actions reasonably requested by Bank to preserve, protect and
defend the Liens of Bank in the Collateral and the perfection and priority
thereof against any and all adverse claims, including appearing in and
defending all Litigation which purport to affect any of the foregoing.
Borrower shall promptly reimburse Bank for any Fees and Expenses, which
Bank may pay or incur in defending, protecting, or enforcing its Liens in
the Collateral or the perfection or priority thereof, or in discharging any
prior or subsequent lien or adverse claim against the Collateral or any
part thereof, or by reason of becoming or being made a party to or
intervening in any action or proceeding affecting the Collateral or the
rights of Bank therein, all of which actions Borrower hereby agrees that
Bank shall have the right to take in its sole and absolute discretion.
5.30. Use and Maintenance of Collateral. Borrower shall maintain the
---------------------------------
Collateral in good condition, free of misuse, abuse, waste, and
deterioration, reasonable wear and tear of intended use excepted.
6. Default.
-------
Loan Agreement Initials of Borrower
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--------------------
6.1. Events. The occurrence of any of the following acts, omissions,
------
conditions, occurrences, happenings, and events will constitute an "Event
of Default" by Borrower under this Loan Agreement and the Loan Documents:
6.1.1 Non-Payment. Borrower will fail to make any payment of
-----------
the Principal, Accrued Interest, or Fees and Expenses when due and
payable.
6.1.2 Breach. Borrower will fail to comply with any provision
------ ---
of this Loan Agreement or the Loan Documents.
6.1.3 Leases. Borrower will fail to comply with any of the
------
material provisions of any lease of the Real Property.
6.1.4 License. Any permit, franchise, certificate, or license
-------
required by this Loan Agreement will be suspended, revoked, or
terminated for any reason.
6.1.5 Judgments and Attachments. Any judgment or attachment
-------------------------
will be rendered against the Collateral or Borrower in excess of One
Hundred Fifty Thousand Dollars ($150,000), and will not be stayed,
appealed, or satisfied within thirty (30) days after being rendered.
6.1.6 Non-Payment of Tax or Liability. Borrower will fail to
-------------------------------
pay any tax, assessment, or other liability in excess of One Hundred
Fifty Thousand Dollars ($150,000) when due, except when such tax,
assessment, or other liability is contested in good faith as set forth
in this Loan Agreement.
6.1.7 Transfer. Borrower will assign or transfer directly or
--------
indirectly, voluntarily or involuntarily, all or any part of the
Collateral, except in the ordinary course of business.
6.1.8 Material Agreement. Borrower will be in breach, default,
------------------
or violation of any contract or agreement material to the business of
Borrower which might reasonably cause a Material Adverse Change.
6.1.9 Appointment of Receiver. A receiver will be appointed for
-----------------------
the Collateral, Borrower, or Guarantors.
Loan Agreement Initials of Borrower
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--------------------
6.1.10 Assignment for Benefit. Borrower will make any
----------------------
assignment for the benefit of creditors.
6.1.11 Dissolution; Merger. Dissolution, termination of
-------------------
existence, merger, or consolidation of Borrower.
6.1.12 Death. Death of any of Guarantors.
-----
6.1.13 Bankruptcy. Borrower will file a voluntary petition of
----------
bankruptcy or an involuntary petition will be filed against Borrower,
and any such petition will not have been dismissed within thirty (30)
days after the filing thereof.
6.1.14 Insolvency. Borrower or Guarantors will be insolvent.
----------
6.1.15 Failure of Security. Bank will fail or cease to have a
-------------------
continuing, first priority, perfected Lien in the Collateral
6.1.16 Failure of Guaranty. Either of Guarantors will fail to
-------------------
perform under the provisions of the Guaranties.
6.1.17 Condemnation. Any Governmental Authority will commence
------------
any Litigation to condemn all or any material part of the Real
Property.
6.1.18 Default under other Agreements. Any event which results
------------------------------
in the acceleration of the maturity of any present or future
indebtedness of Borrower to Bank under any contract, promissory note,
mortgage, deed of trust, indenture, or other agreement.
6.1.19 Other Circumstances. Any other circumstances shall have
-------------------
occurred, which in the reasonable discretion of Bank, substantially
impairs the likelihood of Bank receiving payment in full of the Loan.
6.2. Cure. Borrower will have ten (10) days after the occurrence of
----
an Event of Default under Section 6.1.1 to cure such Event of Default and
will have thirty (30) days to cure any other Event of Default.
Loan Agreement Initials of Borrower
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--------------------
7. Remedies. Upon an Event of Default and the expiration of any time
--------
afforded to cure the Event of Default, Bank may, in its sole and absolute
discretion, exercise any one or more of the following remedies:
7.1. Termination; Acceleration. Bank may immediately terminate this
-------------------------
Loan Agreement and the Loan Documents by notice to Borrower and declare the
unpaid balance of the Loan to be immediately due and payable.
7.2. Possession Control. Bank may take immediate possession or
------------------
control of any or all of the Collateral wherever the Collateral may be
found, and in that regard, Bank may enter upon the Real Property without
process of law and search and remove all or any part of the Collateral.
7.3. Sale. Bank may sell all or any of the Collateral at private or
----
public sale in such manner and under such circumstances as Bank may
determine in its sole and absolute discretion. All demands of performance,
advertisements, notices of sale or retention, manner of sale, as well as
the presence of the Collateral at any sale, and the constructive possession
of the Collateral by the Person conducting any sale are hereby waived by
Borrower and Guarantors to the extent permitted by Applicable Law.
7.4. Foreclosure. Bank may foreclose the Mortgages in the manner
-----------
permitted by Applicable Law.
7.5. Loan Documents. Bank may exercise any one or more remedies
--------------
permitted under the Loan Documents
7.6. Termination of Agreements. Bank may terminate any agreement or
-------------------------
commitment for the granting of further credit to Borrower.
7.7. Right of Offset. Bank may, without notice to Borrower or
---------------
Guarantors, offset and apply any and all of the deposits of Borrower or
Guarantors with Bank to the payment of the Loan.
7.8. Legal Action. Bank may commence Litigation against Borrower,
------------
Guarantors, or the Collateral to recover the unpaid balance of the Loan.
7.9. Other Remedies. Bank may exercise any one or more remedies
--------------
available under the Uniform Commercial Code or Applicable Law.
Loan Agreement Initials of Borrower
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--------------------
8. Conditions to Loan. The obligations of Bank under this Loan Agreement
------------------
and the Loan Documents including any obligation to make any Advance to, or on
behalf of, Borrower will be subject to the satisfaction of each of the following
conditions as of the date of this Loan Agreement and each Advance, in addition
to any conditions precedent set forth elsewhere in this Loan Agreement or the
Loan Documents:
8.1. Compliance. All of the representations and warranties of
----------
Borrower and Guarantors will be accurate and complete, Borrower and
Guarantors will be in compliance with all provisions of this Loan Agreement
and the Loan Documents, and no Event of Default will have occurred and be
continuing prior to the date of this Loan Agreement. Bank may require
Borrower to deliver a certificate of compliance prior to making any
Advance.
8.2. Loan Documents. Borrower will have executed and delivered the
--------------
Promissory Note, Mortgages, Assignments of Rents and Leases, Tenant
Agreement, Fixture Statement, Assignment of Life Insurance, and all other
Loan Documents.
8.3. Perfection. The Mortgages, Assignments of Rents and Leases,
----------
Financing Statements, and Fixture Statement, will have been executed,
delivered and recorded with the appropriate Governmental Authorities, and
any other actions necessary or desirable to perfect the Liens of Bank in
the Collateral will have been taken.
8.4. Fees and Expenses. Bank will have received an amount equal to
-----------------
all unpaid Fees and Expenses.
8.5. Title Work. Bank will have received the Commitment which will
----------
be in a form satisfactory to Bank, and there will be no unsatisfied
requirements or conditions for the issuance of the Loan Policy.
8.6. Opinion Letter. Bank will have received the opinion letter in a
--------------
form satisfactory to Bank.
8.7. Appraisal. Bank will have received an appraisal of the Real
---------
Property meeting the requirements of the Loan Agreement.
8.8. Environmental Assessment. Bank will have received a Phase I
------------------------
environmental assessment of the Real Property. The assessment will: (i) be
addressed to Bank; (ii) state that Bank may rely thereon; and (iii) be
acceptable to Bank in its sole and absolute discretion.
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--------------------
8.9. Other Actions and Documents. Borrower and Guarantors will have
---------------------------
fully performed all of their obligations under this Loan Agreement and Bank
will have received all of the other documents and items referred to in this
Loan Agreement and the Loan Documents.
9. General Provisions.
------------------
9.1. Security Agreement. For purposes of the Arkansas Uniform
------------------
Commercial Code, Ark. Code ▇▇▇. (S)4-9-101 et seq., this Loan Agreement
will be a security agreement between Bank and Borrower.
9.2. Currency. The Loan and any payments toward the repayment of the
--------
Loan will be paid in the form of currency of the United States of America.
9.3. Arithmetical Errors. Bank will incur no liability for any
-------------------
arithmetical error in computing any amount due to or from Borrower
including any payment of Principal, Accrued Interest, and Fees and Expenses
provided that promptly upon discovery of such error, Bank will make such
adjustments as are necessary to correct the error and to restore Bank,
Borrower, and Guarantors to the position that they would have occupied had
the error not occurred.
9.4. Schedules and Exhibits. All Schedules to this Loan Agreement
----------------------
and all Exhibits to the Loan Documents as supplemented, modified, or
amended from time to time, are hereby incorporated into this Loan Agreement
as though they were fully set forth in this Loan Agreement.
9.5. Governing Law. As a specific inducement to Bank, this Loan
-------------
Agreement and the Loan Documents will be subject to and governed by the
laws of the State of Arkansas; provided however, if any part of the
Collateral will be located in any state other than Arkansas, the law of the
state where the Collateral is located will govern the perfection of Liens
of Bank in such Collateral and the law of the State of Arkansas will govern
all other aspects of the relationship among Bank, Borrower, and Guarantors.
9.6. Litigation Forum. As a specific inducement to Bank, the forum
----------------
for any Litigation will be in the courts of ▇▇▇▇▇▇ County, Arkansas, except
the forum for any Litigation subject to federal jurisdiction will be the
United States District Court for the Western District of Arkansas,
Fayetteville Division.
Loan Agreement Initials of Borrower
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--------------------
9.7. Rights and Remedies Cumulative. The rights and remedies
------------------------------
expressed in this Loan Agreement and the Loan Documents are cumulative and
not exclusive of any rights and remedies otherwise available to Bank.
9.8. Assignment; Assumption. This Loan Agreement and the Loan
----------------------
Documents will not be assigned or otherwise transferred by Borrower or
Guarantors or assumed by any other Person. Any purported assignment,
transfer, or assumption of this Loan Agreement or the Loan Documents will
not release Borrower or Guarantors of any of the obligations of Borrower or
Guarantors under this Loan Agreement or the Loan Documents. Bank may
assign, participate, or transfer all or any part of the Loan, this Loan
Agreement and the Loan Documents without notice to or the consent from
Borrower or Guarantors. In connection with any assignment, participation
and transfer by Bank, Borrower and Guarantors hereby consent to the
disclosure of information pertaining to the Loan to prospective assignees,
participants, and transferees.
9.9. Further Assurances. Upon request by Bank, Borrower and
------------------
Guarantors will execute and deliver such other documents and take such
further actions as may be reasonably requested to carry out the provisions
of this Loan Agreement and the Loan Documents.
9.10. Modification; Waiver. This Loan Agreement and the Loan
--------------------
Documents may be modified, amended, or waived only by a written agreement
signed by the party to be bound by the modification, amendment, or waiver.
The course of dealing between Bank and Borrower and Guarantors will not
modify or amend this Loan Agreement or the Loan Documents in any respect.
Any delay by Bank in the exercise of any of its rights under this Loan
Agreement or the Loan Documents will not be construed as a waiver or
release of any of the provisions of this Loan Agreement or the Loan
Documents. A waiver by Bank of a breach of any provision of this Loan
Agreement or the Loan Documents or any waiver by Bank of an Event of
Default will not: (a) operate or be construed as a waiver of any
subsequent breach or Event of Default; (b) limit or restrict any right or
remedy otherwise available to Bank; or (c) operate or be construed as a
waiver of compliance by Bank as to any other provision of this Loan
Agreement or the Loan Documents.
9.11. Binding Effect and Benefit. This Loan Agreement and the Loan
--------------------------
Documents will inure to the benefit of and will be binding upon and
enforceable by the heirs, successors, and assigns of the Parties.
9.12. Notice. All notices, requests, demands, and other
------
communications permitted or required by this Loan Agreement or the Loan
Documents will be in writing, and (a) delivered in person; (b) sent by
express mail or other overnight delivery service providing receipt of
delivery;
Loan Agreement Initials of Borrower
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--------------------
or (c) mailed by certified or registered mail, postage prepaid, return
receipt requested, restricted delivery to the relevant party. All such
notices and other communications will be sent to the following addresses,
unless changed by the receiving Party or otherwise known to the sending
Party:
If to Bank:
Arvest Bank, Fayetteville
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With a required copy to:
Ball & ▇▇▇▇▇▇▇ Ltd., PLLC
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
P.O. Box 1948
▇.▇. ▇▇▇▇ Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Borrower:
The ▇▇▇▇▇▇ Family, LLC
Highway 265 North
1106 ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
With a required copy to:
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, LLC
Attn: ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
If to Guarantors:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Loan Agreement Initials of Borrower
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--------------------
Highway 265 North
1106 ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Highway 265 North
1106 ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
9.13. Business Day. If any provision of this Loan Agreement or the
------------
Loan Documents requires the performance of an obligation on a date that is
not a business day of the Bank, Bank may postpone the performance by a
Party until the next business day.
9.14. Time for Performance. Time is of the essence.
--------------------
9.15. Third Party Beneficiaries. Except as provided in this Loan
-------------------------
Agreement or the Loan Documents, the Parties do not intend to create any
rights for the benefit of any third party.
9.16. Commissions. The transaction contemplated by this Loan
-----------
Agreement was completed by the Parties acting as principals and without the
assistance of any brokers, agents, or finders. Borrower and Guarantors
represent and warrant that Borrower and Guarantors have not committed Bank
to the payment of any brokerage fee, commission, or charge in connection
with this transaction. If any such claim is made on Bank by any broker,
finder, or agent or other person, Borrower and Guarantors will indemnify,
defend, and hold Bank harmless from and against the claim and will defend
any action to recover on that claim and Borrower and Guarantors will pay
all Fees and Expenses.
9.17. Counterparts. This Loan Agreement and the Loan Documents may
------------
be executed in two (2) or more counterparts. Each counterpart of this Loan
Agreement will be deemed a duplicate original of this Loan Agreement, and
all counterparts, when collected together, will constitute the original of
this Loan Agreement. A counterpart may be a full copy of this Loan
Agreement or a signature page from a full copy of this Loan Agreement.
9.18. Conflict in Instruments. To the extent there may be a conflict
-----------------------
between the provisions of this Loan Agreement and any of the Loan
Documents, the provisions of this Loan Agreement will prevail.
Loan Agreement Initials of Borrower
Page 25 of 28
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9.19. Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made by Borrower and Guarantors in this Loan
Agreement and the Loan Documents will survive the making of the Loan, and
will continue in full force and effect until the Maturity Date or until the
Loan will be paid in full.
9.20. Severability. Each provision of this Loan Agreement is
------------
severable from all other provisions of this Loan Agreement and the Loan
Documents. Each provision of the Loan Documents is severable from all
other provisions of this Loan Agreement and the other Loan Documents. If
any Governmental Authority will determine, during or at the conclusion of
any Litigation, that any provision of this Loan Agreement or the Loan
Documents will be invalid or unenforceable, the provision will be deemed
modified only to the extent necessary to render it valid and enforceable,
and all remaining provisions of this Loan Agreement and the Loan Documents
will remain in full force and effect.
9.21. Expiration. This Loan Agreement and the Loan Documents
----------
constitute a mere offer to loan money until this Loan Agreement and the
Loan Documents will have been executed and delivered by the Parties.
9.22. Interpretation. This Loan Agreement and the Loan Documents
--------------
will be interpreted as though the Parties participated equally in their
preparation and negotiation. The Parties assume joint responsibility for
the form and composition of each provision of this Loan Agreement and the
Loan Documents. Unless the context would result in a conflict in the
provisions of this Loan Agreement: (1) the gender or lack of gender of all
words used in this Loan Agreement and the Loan Documents will include the
masculine, feminine, and neuter; (2) the singular will include the plural;
(3) the words "include" or "including" mean, in addition to any regularly
accepted meaning, "without limitation" and "including but not limited to";
(4) references to Sections refer to Sections of this Loan Agreement; (5)
references to Schedules are to the Schedules attached to or delivered with
this Loan Agreement; (6) subject headings and captions are included for
convenience only and will not affect the interpretation of this Loan
Agreement; and (7) the definitions used herein apply to all capitalized
terms.
9.23. Waiver of Jury Trial. BANK, BORROWER, AND GUARANTORS HEREBY
--------------------
UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY
LITIGATION AMONG BANK, BORROWER AND GUARANTORS ARISING IN CONNECTION WITH,
OUT OF, OR OTHERWISE RELATING TO THIS LOAN AGREEMENT OR THE LOAN DOCUMENTS.
Loan Agreement Initials of Borrower
Page 26 of 28
--------------------
9.24. Entire Agreement. This Loan Agreement and the Loan Documents
----------------
contain the entire agreement of the Parties regarding the Loan, and no
other oral or written agreements will be binding on Bank. Borrower and
Guarantors represent and warrant that Borrower and Guarantors have not
been influenced by any Person to enter into this Loan Agreement or any of
the Loan Documents, nor relied on any representation, warranty, or covenant
of any Person except for those representations, warranties, and covenants
set forth in this Loan Agreement. Borrower agrees that: (a) it will be
unreasonable for Borrower and Guarantors to have or rely on any expectation
not reflected in the provisions of this Loan Agreement or the Loan
Documents; (b) if Borrower or Guarantors have or will develop an
expectation contrary to or in addition to the provisions of this Loan
Agreement or the Loan Documents, Borrower and Guarantors will have a duty
to immediately give notice to Bank; and (c) if Borrower and Guarantors will
fail to obtain an amendment to this Loan Agreement or the Loan Documents
after having developed an expectation contrary to or in addition to the
provisions of this Loan Agreement or the Loan Documents, such failure will
be an admission for evidentiary purposes in any Litigation that the
expectation was not reasonable and was not part of the final binding
agreement or Parties.
EXECUTED and DELIVERED on December 12, 2001.
BANK
ARVEST BANK, FAYETTEVILLE
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, Commercial Loan Officer
BORROWER
THE ▇▇▇▇▇▇ FAMILY, LLC
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Managing Member
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Member
Loan Agreement
Page 27 of 28
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee
------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee of The ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Trust, Member
GUARANTORS
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an Arkansas Resident
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an Arkansas Resident
Loan Agreement
Page 28 of 28