15)BUSINESS LOAN AGREEMENT

Ex 10.262

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References in the boxes above are for ▇▇▇▇▇▇'s use only and do not limit the applicability of this document to any particular loan or item.

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THIS BUSINESS LOAN AGREEMENT dated December 21, 2022, is made and executed between LF3 Wichita Airport, LLC; and LF3 Wichita Airport TRS, LLC ("Borrower") and Choice Financial Group ("Lender") on the following terms and conditions. Borrower has received prior commercial loans from Lender or has applied to Lender for a commercial loan or loans or other financial accommodations, including those which may be described on any exhibit or schedule attached to this Agreement. ▇▇▇▇▇▇▇▇ understands and agrees that: (A) in granting, renewing, or extending any Loan, Lender is relying upon Borrower's representations, warranties, and agreements as set forth in this Agreement; (B) the granting, renewing, or extending of any Loan by ▇▇▇▇▇▇ at all times shall be subject to ▇▇▇▇▇▇'s sole judgment and discretion; and (C) all such Loans shall be and remain subject to the terms and conditions of this Agreement.

TERM. This Agreement shall be effective as of December 21, 2022, and shall continue in full force and effect until such time as all of Borrower's Loans in favor of Lender have been paid in full, including principal, interest, costs, expenses, attorneys' fees, and other fees and charges, or until such time as the parties may agree in writing to terminate this Agreement.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial Advance and each subsequent Advance under this Agreement shall be subject to the fulfillment to ▇▇▇▇▇▇'s satisfaction of all of the conditions set forth in this Agreement and in the Related Documents.

Loan Documents. Borrower shall provide to Lender the following documents for the Loan: (1) the Note; (2) Security Agreements granting to Lender security interests in the Collateral; (3) financing statements and all other documents perfecting Lender's Security Interests; (4) evidence of insurance as required below; (5) guaranties; (6) together with all such Related Documents as Lender may require for the Loan; all in form and substance satisfactory to Lender and ▇▇▇▇▇▇'s counsel.

Borrower's Authorization. Borrower shall have provided in form and substance satisfactory to Lender properly certified resolutions, duly authorizing the execution and delivery of this Agreement, the Note and the Related Documents. In addition, Borrower shall have provided such other resolutions, authorizations, documents and instruments as Lender or its counsel, may require.

Payment of Fees and Expenses. Borrower shall have paid to Lender all fees, charges, and other expenses which are then due and payable as specified in this Agreement or any Related Document.

Representations and Warranties. The representations and warranties set forth in this Agreement, in the Related Documents, and in any document or certificate delivered to Lender under this Agreement are true and correct.

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No Event of Default. There shall not exist at the time of any Advance a condition which would constitute an Event of Default under this Agreement or under any Related Document.

MULTIPLE BORROWERS. This Agreement has been executed by multiple obligors who are referred to in this Agreement individually, collectively and interchangeably as "Borrower." Unless specifically stated to the contrary, the word "Borrower" as used in this Agreement, including without limitation all representations, warranties and covenants, shall include all Borrowers. Borrower understands and agrees that, with or without notice to any one Borrower, Lender may (A) make one or more additional secured or unsecured loans or otherwise extend additional credit with respect to any other Borrower; (B) with respect to any other Borrower alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms of any indebtedness, including increases and decreases of the rate of interest on the indebtedness; (C) exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any security, with or without the substitution of new collateral; (0) release, substitute, agree not to sue, or deal with any one or more of Borrower's or any other Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; (E) determine how, when and what application of payments and credits shall be made on any indebtedness; (F) apply such security and direct the order or manner of sale of any Collateral, including without limitation, any non-judicial sale permitted by the terms of the controlling security agreement or deed of trust, as Lender in its discretion may determine; (G) sell, transfer, assign or grant participations in all or any part of the Loan; (H) exercise or refrain from exercising any rights against Borrower or others, or otherwise act or refrain from acting; (I) settle or compromise any indebtedness; and (J) subordinate the payment of all or any part of any of Borrower's indebtedness to Lender to the payment of any liabilities which may be due Lender or others.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as of the date of this Agreement, as of the date of each disbursement of loan proceeds, as of the date of any renewal, extension or modification of any Loan, and at all times any Indebtedness exists:

Organization. LF3 Wichita Airport, LLC is a limited liability company which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Delaware. LF3 Wichita Airport, LLC is duly authorized to transact business in all other states in which LF3 Wichita Airport, LLC is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which LF3 Wichita Airport, LLC is doing business. Specifically, LF3 Wichita Airport, LLC is, and at all times shall be, duly qualified as a foreign limited liability company in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. LF3 Wichita Airport, LLC has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. LF3 Wichita Airport, LLC maintains an office at ▇▇▇▇ ▇▇▇▇ ▇▇ ▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇. Unless LF3 Wichita Airport, LLC has designated otherwise in writing, the principal office is the office at which LF3 Wichita Airport, LLC keeps its books and records including its records concerning the Collateral. LF3 Wichita Airport, LLC will notify Lender prior to any change in the location of LF3 Wichita Airport, LLC's state of organization or any change in LF3 Wichita Airport, LLC's name. LF3 Wichita Airport, LLC shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to LF3 Wichita Airport, LLC and LF3 Wichita Airport, LLC's business activities.

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LF3 Wichita Airport TRS, LLC is a limited liability company which is, and at all times shall be, duly organized, validly existing, and in good standing under and by virtue of the laws of the State of Delaware. LF3 Wichita Airport TRS, LLC is duly authorized to transact business in all other states in which LF3 Wichita Airport TRS, LLC is doing business, having obtained all necessary filings, governmental licenses and approvals for each state in which LF3 Wichita Airport TRS, LLC is doing business. Specifically, LF3 Wichita Airport TRS, LLC is, and at all times shall be, duly qualified as a foreign limited liability company in all states in which the failure to so qualify would have a material adverse effect on its business or financial condition. LF3 Wichita Airport TRS, LLC has the full power and authority to own its properties and to transact the business in which it is presently engaged or presently proposes to engage. LF3 Wichita Airport TRS, LLC maintains an office at ▇▇▇▇ ▇▇▇▇ ▇▇ ▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇. Unless LF3 Wichita Airport TRS, LLC has designated otherwise in writing, the principal office is the office at which LF3 Wichita Airport TRS, LLC keeps its books and records including its records concerning the Collateral. LF3 Wichita Airport TRS, LLC will notify Lender prior to any change in the location of LF3 Wichita Airport TRS, LLC's state of organization or any change in LF3 Wichita Airport TRS, LLC's name. LF3 Wichita Airport TRS, LLC shall do all things necessary to preserve and to keep in full force and effect its existence, rights and privileges, and shall comply with all regulations, rules, ordinances, statutes, orders and decrees of any governmental or quasi-governmental authority or court applicable to LF3 Wichita Airport TRS, LLC and LF3 Wichita Airport TRS, LLC's business activities.

Assumed Business Names. ▇▇▇▇▇▇▇▇ has filed or recorded all documents or filings required by law relating to all assumed business names used by ▇▇▇▇▇▇▇▇. Excluding the name of ▇▇▇▇▇▇▇▇, the following is a complete list of all assumed business names under which Borrower does business: None.

Authorization. ▇▇▇▇▇▇▇▇'s execution, delivery, and performance of this Agreement and all the Related Documents have been duly authorized by all necessary action by Borrower and do not conflict with, result in a violation of, or constitute a default under (1) any provision of (a) Borrower's articles of organization or membership agreements, or (b) any agreement or other instrument binding upon Borrower or (2) any law, governmental regulation, court decree, or order applicable to Borrower or to Borrower's properties.

Financial Information. Each of ▇▇▇▇▇▇▇▇'s financial statements supplied to ▇▇▇▇▇▇ truly and completely disclosed ▇▇▇▇▇▇▇▇'s financial condition as of the date of the statement, and there has been no material adverse change in ▇▇▇▇▇▇▇▇'s financial condition subsequent to the date of the most recent financial statement supplied to Lender. Borrower has no material contingent obligations except as disclosed in such financial statements.

Legal Effect. This Agreement constitutes, and any instrument or agreement Borrower is required to give under this Agreement when delivered will constitute legal, valid, and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms.

Properties. Except as contemplated by this Agreement or as previously disclosed in ▇▇▇▇▇▇▇▇'s financial statements or in writing to Lender and as accepted by ▇▇▇▇▇▇, and except for property tax liens for taxes not presently due and payable, Borrower owns and has good title to all of Borrower's properties free and clear of all Security Interests, and has not executed any security documents or financing

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Ex 10.262

statements relating to such properties. All of ▇▇▇▇▇▇▇▇'s properties are titled in Borrower's legal name, and ▇▇▇▇▇▇▇▇ has not used or filed a financing statement under any other name for at least the last five (5) years.

Hazardous Substances. Except as disclosed to and acknowledged by ▇▇▇▇▇▇ in writing, ▇▇▇▇▇▇▇▇ represents and warrants that: (1) During the period of Borrower's ownership of the Collateral, there has been no use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance by any person on, under, about or from any of the Collateral. (2) Borrower has no knowledge of, or reason to believe that there has been (a) any breach or violation of any Environmental Laws; (b) any use, generation, manufacture, storage, treatment, disposal, release or threatened release of any Hazardous Substance on, under, about or from the Collateral by any prior owners or occupants of any of the Collateral; or (c) any actual or threatened litigation or claims of any kind by any person relating to such matters. (3) Neither Borrower nor any tenant, contractor, agent or other authorized user of any of the Collateral shall use, generate, manufacture, store, treat, dispose of or release any Hazardous Substance on, under, about or from any of the Collateral; and any such activity shall be conducted in compliance with all applicable federal, state, and local laws, regulations, and ordinances, including without limitation all Environmental Laws. Borrower authorizes Lender and its agents to enter upon the Collateral to make such inspections and tests as Lender may deem appropriate to determine compliance of the Collateral with this section of the Agreement. Any inspections or tests made by Lender shall be at Borrower's expense and for Lender's purposes only and shall not be construed to create any responsibility or liability on the part of Lender to Borrower or to any other person. The representations and warranties contained herein are based on Borrower's due diligence in investigating the Collateral for hazardous waste and Hazardous Substances. Borrower hereby (1) releases and waives any future claims against Lender for indemnity or contribution in the event Borrower becomes liable for cleanup or other costs under any such laws, and (2) agrees to indemnify, defend, and hold harmless Lender against any and all claims, losses, liabilities, damages, penalties, and expenses which Lender may directly or indirectly sustain or suffer resulting from a breach of this section of the Agreement or as a consequence of any use, generation, manufacture, storage, disposal, release or threatened release of a hazardous waste or substance on the Collateral. The provisions of this section of the Agreement, including the obligation to indemnify and defend, shall survive the payment of the Indebtedness and the termination, expiration or satisfaction of this Agreement and shall not be affected by Lender's acquisition of any interest in any of the Collateral, whether by foreclosure or otherwise.

Litigation and Claims. No litigation, claim, investigation, administrative proceeding or similar action (including those for unpaid taxes) against Borrower is pending or threatened, and no other event has occurred which may materially adversely affect Borrower's financial condition or properties, other than litigation, claims, or other events, if any, that have been disclosed to and acknowledged by ▇▇▇▇▇▇ in writing.

Taxes. To the best of ▇▇▇▇▇▇▇▇'s knowledge, all of ▇▇▇▇▇▇▇▇'s tax returns and reports that are or were required to be filed, have been filed, and all taxes, assessments and other governmental charges have been paid in full, except those presently being or to be contested by Borrower in good faith in the ordinary course of business and for which adequate reserves have been provided.

Lien Priority. Unless otherwise previously disclosed to Lender in writing, ▇▇▇▇▇▇▇▇ has not entered into or granted any Security Agreements, or permitted the filing or attachment of any Security Interests on or affecting any of the Collateral directly or indirectly securing repayment of Borrower's Loan and Note, that would be prior or that may in any way be superior to ▇▇▇▇▇▇'s Security Interests and rights in and to such Collateral.

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Binding Effect. This Agreement, the Note, all Security Agreements (if any), and all Related Documents are binding upon the signers thereof, as well as upon their successors, representatives and assigns, and are legally enforceable in accordance with their respective terms.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with ▇▇▇▇▇▇ that, so long as this Agreement remains in effect, Borrower will:

Notices of Claims and Litigation. Promptly inform ▇▇▇▇▇▇ in writing of (1) all material adverse changes in Borrower's financial condition, and (2) all existing and all threatened litigation, claims, investigations, administrative proceedings or similar actions affecting Borrower or any Guarantor which could materially affect the financial condition of Borrower or the financial condition of any Guarantor.

Financial Records. Maintain its books and records in accordance with GAAP, or an OCBOA acceptable to Lender, applied on a consistent basis, and permit Lender to examine and audit ▇▇▇▇▇▇▇▇'s books and records at all reasonable times.

Financial Statements.  Furnish Lender with the following:

Annual Statements. As soon as available, but in no event later than thirty (30) days after the end of each fiscal year, ▇▇▇▇▇▇▇▇'s balance sheet and income statement for the year ended, prepared by ▇▇▇▇▇▇▇▇.

Interim Statements. As soon as available, but in no event later than thirty (30) days after the end of each fiscal quarter, ▇▇▇▇▇▇▇▇'s balance sheet and profit and loss statement for the period ended, prepared by ▇▇▇▇▇▇▇▇.

Additional Requirements.

Interim Statements. From time to time ▇▇▇▇▇▇ will request Borrower's balance sheet and profit and loss statement, prepared by Borrower in form satisfactory to Lender.

▇▇▇▇▇ ▇▇▇▇▇ will provide Annual Personal Financial Statements once every twelve (12) months and Personal Tax Returns to include an attached K-1 Schedule as soon as available, but in no event later than thirty (30) days after the applicable filing date for the tax reporting period ended.

Lodging Fund REIT 111, Inc. will provide as soon as available, but in no event later than one-hundred twenty (120) days after the end of each fiscal year, a balance sheet and income statement for the year ended, audited by a certified public accountant satisfactory to the Lender.

Lodging Fund REIT 111 OP, LP, Lodging Fund REIT Ill, Inc. and Lodging Fund REIT Ill TRS, Inc. will provide Tax Returns as soon as available, but in no event later than thirty (30) days after the applicable filing date for the tax reporting period ended., Borrowers Federal and other governmental tax returns prepared by a tax professional satisfactory to Lender.

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All financial reports required to be provided under this Agreement shall be prepared in accordance with GAAP, or an OCBOA acceptable to Lender, applied on a consistent basis, and certified by Borrower as being true and correct.

Additional Information. Furnish such additional information and statements, as ▇▇▇▇▇▇ may request from time to time.

Additional Requirements.

Quarterly STR Reports for Wichita Holiday Inn Express

Minimum Debt Service Coverage Ratio before distribution of 1.25x on the subject property will be calculated annually based on year-end company prepared statements. "Debt Service Coverage Ratio" means with respect to the 12-month period ending on the measurement date, the ratio, calculated Borrower for such time period, each as determined in accordance with GAAP and calculated according to the Uniform System of Accounts for Hotels, of (a) Net Operating Income; to (b) the Debt Service Amount. "Net Operating Income" means, as determined in accordance with GAAP and calculated according to the Uniform System of Accounts for Hotels, the following: (a) the sum of net income (or loss), interest expense, income taxes, depreciation, amortization, management fees, replacement reserves, and officers' salaries expensed on the income statement, minus (3b) the greater of (i) 4% of total revenues as an assumed reserve for replacement and

(ii) actual replacement reserve, minus (c) the greater of (i) 3% of total revenues as an assumed management fee and (ii) actual management fees (including both base and incentive management fees, if any), minus (d) non-recurring miscellaneous income (as determined by ▇▇▇▇▇▇), plus (e) non-recurring miscellaneous expense (as allowed by ▇▇▇▇▇▇), and {f) plus or minus any adjustments made by Lender in its sole discretion to calculations for acquisitions or other similar circumstances where operating performance history is limited.

Prefund $850,000 at closing into a reserve account at Choice Bank for PIP costs.

Monthly deposits into reserve account held at Choice Bank, in the amount of $15,000/month for the first 18 months - Require 3rd party disbursement & lien waiver monitoring for PIP.

▇▇▇▇▇▇▇▇ agrees to maintain depository accounts at Choice Bank during the loan term.

Insurance. Maintain fire and other risk insurance, public liability insurance, and such' other insurance as Lender may require with respect to Borrower's properties and operations, in form, amounts, coverages and with insurance companies acceptable to Lender. Borrower, upon request of ▇▇▇▇▇▇, will deliver to Lender from time to time the policies or certificates of insurance in form satisfactory to Lender, including stipulations that coverages will not be cancelled or diminished without at least ten (10) days prior written notice to Lender. Each insurance policy also shall include an endorsement providing that coverage in favor of Lender will not be impaired in any way by any act, omission or default of Borrower or any other person. In connection with all policies covering assets in which Lender holds or is offered a security interest for the Loans, Borrower will provide Lender with such lender's loss payable or other endorsements as Lender may require.

Insurance Reports. Furnish to Lender, upon request of Lender, reports on each existing insurance policy showing such information as Lender may reasonably request, including without limitation the following: (1) the name of the insurer; (2) the risks insured; (3) the amount of the policy; (4) the properties insured; (5) the then current property values on the basis of which insurance has been obtained, and the manner of determining those values; and (6) the expiration date of the policy. In addition, upon request of Lender (however not more often than annually), Borrower will have an independent appraiser satisfactory to Lender determine, as applicable, the actual cash value or replacement cost of any Collateral. The cost of such appraisal shall be paid by Borrower.

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Guaranties. Prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of ▇▇▇▇▇▇, executed by the

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guarantors named below, on ▇▇▇▇▇▇'s forms, and in the amounts and under the conditions set forth in those guaranties.

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Other Agreements. Comply with all terms and conditions of all other agreements, whether now or hereafter existing, between Borrower and any other party and notify Lender immediately in writing of any default in connection with any other such agreements.

Loan Proceeds. Use all Loan proceeds solely for ▇▇▇▇▇▇▇▇'s business operations, unless specifically consented to the contrary by ▇▇▇▇▇▇ in writing.

Taxes, Charges and Liens. Pay and discharge when due all of its indebtedness and obligations, including without limitation all assessments, taxes, governmental charges, levies and liens, of every kind and nature, imposed upon Borrower or its properties, income, or profits, prior to the date on which penalties would attach, and all lawful claims that, if unpaid, might become a lien or charge upon any of Borrower's properties, income, or profits. Provided however, ▇▇▇▇▇▇▇▇ will not be required to pay and discharge any such assessment, tax, charge, ▇▇▇▇, ▇▇▇▇ or claim so long as (1) the legality of the same shall be contested in good faith by appropriate proceedings, and (2) Borrower shall have established on Borrower's books adequate reserves with respect to such contested assessment, tax, charge, levy, lien, or claim in accordance with GAAP or an OCBOA acceptable to Lender.

Performance. Perform and comply, in a timely manner, with all terms, conditions, and provisions set forth in this Agreement, in the Related Documents, and in all other instruments and agreements between Borrower and Lender. Borrower shall notify ▇▇▇▇▇▇ immediately in writing of any default in connection with any agreement.

Operations. Maintain executive and management personnel with substantially the same qualifications and experience as the present executive and management personnel; provide written notice to Lender of any change in executive and management personnel; conduct its business affairs in a reasonable and prudent manner.

Environmental Studies. Promptly conduct and complete, at Borrower's expense, all such investigations, studies, samplings and testings as may be requested by Lender or any governmental authority relative to any substance, or any waste or by-product of any substance defined as toxic or a hazardous substance under applicable federal, state, or local law, rule, regulation, order or directive, at or affecting any property or any facility owned, leased or used by Borrower.

Compliance with Governmental Requirements. Comply with all laws, ordinances, and regulations, now or hereafter in effect, of all governmental authorities applicable to the conduct of Borrower's properties, businesses and operations, and to the use or occupancy of the Collateral, including without limitation, the Americans With Disabilities Act. Borrower may contest in good faith any such law, ordinance,

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or regulation and withhold compliance during any proceeding, including appropriate appeals, so long as Borrower has notified Lender in writing prior to doing so and so long as, in ▇▇▇▇▇▇'s sole opinion, ▇▇▇▇▇▇'s interests in the Collateral are not jeopardized. Lender may require Borrower to post adequate security or a surety bond, reasonably satisfactory to Lender, to protect ▇▇▇▇▇▇'s interest.

Inspection. Permit employees or agents of Lender at any reasonable time to inspect any and all Collateral for the Loan or Loans and ▇▇▇▇▇▇▇▇'s other properties and to examine or audit ▇▇▇▇▇▇▇▇'s books, accounts, and records and to make copies and memoranda of ▇▇▇▇▇▇▇▇'s books, accounts, and records. If Borrower now or at any time hereafter maintains any records (including without limitation computer generated records and computer software programs for the generation of such records) in the possession of a third party, Borrower, upon request of ▇▇▇▇▇▇, shall notify such party to permit Lender free access to such records at all reasonable times and to provide Lender with copies of any records it may request, all at Borrower's expense.

Compliance Certificates. Unless waived in writing by ▇▇▇▇▇▇, provide Lender at least annually, with a certificate executed by ▇▇▇▇▇▇▇▇'s chief financial officer, or other officer or person acceptable to Lender, certifying that the representations and warranties set forth in this Agreement are true and correct as of the date of the certificate and further certifying that, as of the date of the certificate, no Event of Default exists under this Agreement.

Environmental Compliance and Reports. Borrower shall comply in all respects with any and all Environmental Laws; not cause or permit to exist, as a result of an intentional or unintentional action or omission on Borrower's part or on the part of any third party, on property owned and/or occupied by Borrower, any environmental activity where damage may result to the environment, unless such environmental activity is pursuant to and in compliance with the conditions of a permit issued by the appropriate federal, state or local governmental authorities; shall furnish to Lender promptly and in any event within thirty (30) days after receipt thereof a copy of any notice, summons, lien, citation, directive, letter or other communication from any governmental agency or instrumentality concerning any intentional or unintentional action or omission on Borrower's part in connection with any environmental activity whether or not there is damage to the environment and/or other natural resources.

Additional Assurances. Make, execute and deliver to Lender such promissory notes, mortgages, deeds of trust, security agreements, assignments, financing statements, instruments, documents and other agreements as Lender or its attorneys may reasonably request to evidence and secure the Loans and to perfect all Security Interests.

▇▇▇▇▇▇'S EXPENDITURES. If any action or proceeding is commenced that would materially affect ▇▇▇▇▇▇'s interest in the Collateral or if Borrower fails to comply with any provision of this Agreement or any Related Documents, including but not limited to Borrower's failure to discharge or pay when due any amounts Borrower is required to discharge or pay under this Agreement or any Related Documents, Lender on Borrower's behalf may (but shall not be obligated to) take any action that Lender deems appropriate, including but not limited to discharging or paying all taxes, liens, security interests, encumbrances and other claims, at any time levied or placed on any Collateral and paying all costs for insuring, maintaining and preserving any Collateral. All such expenditures incurred or paid by Lender for such purposes will then bear interest at the rate charged under the Note from the date incurred or paid by Lender to the date of repayment by ▇▇▇▇▇▇▇▇. All such expenses will become a part of the Indebtedness and, at Lender's option, will (A) be payable on demand; (B) be added to the balance of the Note and be apportioned among and be payable with any installment payments to become due during either (1) the term of any applicable insurance policy; or (2) the remaining term of the Note; or (C) be treated as a balloon payment which will be due and payable at the Note's maturity.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this Agreement is in effect, Borrower shall not, without the prior written consent of Lender:

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Indebtedness and Liens. (1) Except for trade debt incurred in the normal course of business and indebtedness to Lender contemplated by this Agreement, create, incur or assume indebtedness for borrowed money, including capital leases, (2) sell, transfer, mortgage, assign, pledge, lease, grant a security interest in, or encumber any of Borrower's assets (except as allowed as Permitted Liens), or (3) sell with recourse any of Borrower's accounts receivable, except to Lender.

Continuity of Operations. (1) Engage in any business activities substantially different than those in which Borrower is presently engaged,

(2) cease operations, liquidate, merge or restructure as a legal entity {whether by division or otherwise), consolidate with or acquire any other entity, change its name, convert to another type of entity or redomesticate, dissolve or transfer or sell Collateral out of the ordinary course of business, or (3) make any distribution with respect to any capital account, whether by reduction of capital or otherwise.

Loans, Acquisitions and Guaranties. (1) Loan, invest in or advance money or assets to any other person, enterprise or entity, (2) purchase, create or acquire any interest in any other enterprise or entity, or (3) incur any obligation as surety or guarantor other than in the ordinary course of business.

Agreements. Enter into any agreement containing any provisions which would be violated or breached by the performance of ▇▇▇▇▇▇▇▇'s obligations under this Agreement or in connection herewith.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to Borrower, whether under this Agreement or under any other agreement, Lender shall have no obligation to make Loan Advances or to disburse Loan proceeds if: (A) Borrower or any Guarantor is in default under the terms of this Agreement or any of the Related Documents or any other agreement that Borrower or any Guarantor has with Lender; (B) Borrower or any Guarantor dies, becomes incompetent or becomes insolvent, files a petition in bankruptcy or similar proceedings, or is adjudged a bankrupt; (C) there occurs a material adverse change in Borrower's financial condition, in the financial condition of any Guarantor, or in the value of any Collateral securing any Loan; or (D) any Guarantor seeks, claims or otherwise attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any other loan with Lender; or (E) Lender in good ▇▇▇▇▇ ▇▇▇▇▇ itself insecure, even though no Event of Default shall have occurred.

RIGHT OF SETOFF. To the extent permitted by applicable law, Lender reserves a right of setoff in all Borrower's accounts with Lender {whether checking, savings, or some other account). This includes all accounts Borrower holds jointly with someone else and all accounts Borrower may open in the future. However, this does not include any IRA or ▇▇▇▇▇ accounts, or any trust accounts for which setoff would be prohibited by law. ▇▇▇▇▇▇▇▇ authorizes ▇▇▇▇▇▇, to the extent permitted by applicable law, to charge or setoff all sums owing on the Indebtedness against any and all such accounts, and, at ▇▇▇▇▇▇'s option, to administratively freeze all such accounts to allow Lender to protect ▇▇▇▇▇▇'s charge and setoff rights provided in this paragraph.

DEFAULT. Each of the following shall constitute an Event of Default under this Agreement:

Payment Default. ▇▇▇▇▇▇▇▇ fails to make any payment when due under the Loan.

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Ex 10.262

Other Defaults. Borrower fails to comply with or to perform any other term, obligation, covenant or condition contained in this Agreement or in any of the Related Documents or to comply with or to perform any term, obligation, covenant or condition contained in any other agreement between Lender and Borrower.

Default in Favor of Third Parties. Borrower or any Grantor defaults under any loan, extension of credit, security agreement, purchase or sales agreement, or any other agreement, in favor of any other creditor or person that may materially affect any of Borrower's or any Grantor's property or Borrower's or any Grantor's ability to repay the Loans or perform their respective obligations under this Agreement or any of the Related Documents.

False Statements. Any warranty, representation or statement made or furnished to Lender by Borrower or on Borrower's behalf under this Agreement or the Related Documents is false or misleading in any material respect, either now or at the time made or furnished or becomes false or misleading at any time thereafter.

Death or Insolvency. The dissolution of Borrower (regardless of whether election to continue is made), any member withdraws from Borrower, or any other termination of Borrower's existence as a going business or the death of any member, the insolvency of Borrower, the appointment of a receiver for any part of ▇▇▇▇▇▇▇▇'s property, any assignment for the benefit of creditors, any type of creditor workout, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against Borrower.

Defective Collateralization. This Agreement or any of the Related Documents ceases to be in full force and effect (including failure of any collateral document to create a valid and perfected security interest or lien) at any time and for any reason.

Creditor or Forfeiture Proceedings. Commencement of foreclosure or forfeiture proceedings, whether by judicial proceeding, self-help, repossession or any other method, by any creditor of Borrower or by any governmental agency against any collateral securing the Loan. This includes a garnishment of any of ▇▇▇▇▇▇▇▇'s accounts, including deposit accounts, with Lender. However, this Event of Default shall not apply if there is a good faith dispute by ▇▇▇▇▇▇▇▇ as to the validity or reasonableness of the claim which is the basis of the creditor or forfeiture proceeding and if Borrower gives ▇▇▇▇▇▇ written notice of the creditor or forfeiture proceeding and deposits with Lender monies or a surety bond for the creditor or forfeiture proceeding, in an amount determined by Lender, in its sole discretion, as being an adequate reserve or bond for the dispute.

Events Affecting Guarantor. Any of the preceding events occurs with respect to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes incompetent, or revokes or disputes the validity of, or liability under, any Guaranty of the Indebtedness.

Adverse Change. A material adverse change occurs in Borrower's financial condition, or ▇▇▇▇▇▇ believes the prospect of payment or performance of the Loan is impaired..

Insecurity. Lender in good faith believes itself insecure.

Right to Cure. If any default, other than a default on Indebtedness, is curable and if Borrower or Grantor, as the case may be, has not been given a notice of a similar default within the preceding twelve (12) months, it may be cured if Borrower or Grantor, as the case may be, after ▇▇▇▇▇▇ sends written notice to Borrower or Grantor, as the case may be, demanding cure of such default: (1) cure the default within fifteen (15) days; or (2) if the cure requires more than fifteen (15) days, immediately initiate steps which ▇▇▇▇▇▇ deems in ▇▇▇▇▇▇'s sole discretion to be sufficient to cure the default and thereafter continue and complete all reasonable and necessary steps sufficient to produce compliance as soon as reasonably practical.

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Ex 10.262

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