|
Exhibit 10.1
First Interstate Bank (logo omitted)
BUSINESS LOAN
AGREEMENT
Principal
$ 8,500,000.00 |
Loan Date
10-29-2007 |
Maturity
09-29-2011 |
Loan No
1100236330 |
Call/Cell
0019 |
Account
100248 |
Officer
107 |
Initials |
| References in the boxes
above are for Lender’s use only and do not limit the
applicability of this document to any particular loan or Item. Any
Item above containing “***” has been omitted due to
text length limitations. |
| Borrower: |
|
WESTMORELAND RESOURCES, INC.
PO BOX 449
HARDIN, MT 59034 |
Lender: |
|
First Interstate Bank
Billings Downtown Branch
401 North 31st Street
P.O. Box 30918
Billings, MT 59116-0918 |
THIS BUSINESS
LOAN AGREEMENT dated October 29, 2007, is made and executed between
WESTMORELAND RESOURCES, INC, (“Borrower”) and First
interstate Bank (“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
(“Loan”). Borrower 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 Lender at all times shall be subject to
Lender’s sole judgment and discretions 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 October 29, 2007, 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 September 29, 2011.
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 Lender’s satisfaction of all of the conditions
set forth in this Agreement and in the Related
Documents.
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Loan
Documents. Borrower shall provide to Lender
the following documents for the Loans (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
regulated 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 Lender’s
counsel. |
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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. |
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Payment of
Fees and Expenses. Borrower shall have paid
to Lender all fees, charges, and other expenses which are than due
and payable as specified in this Agreement or any Related
Document. |
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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. |
1
BUSINESS LOAN AGREEMENT
(Continued)
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:
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Organization. Borrower is a
corporation for profit 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, Borrower is duly
authorized to transact business in all other states in which
Borrower is doing business, having obtained all necessary filings,
governmental licenses and approvals for each state in which
Borrower is doing business. Specifically, Borrower is, and at all
times shall be, duly qualified as a foreign corporation in all
states in which the failure to so qualify would have a material
adverse effect on its business or financial condition. Borrower 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. Borrower maintains an office at 25 MILES EAST OF HARDIN,
MT, HARDIN, MT 59034. Unless Borrower has designated otherwise in
writing, the principal office is the office at which Borrower keeps
its books and records including its records concerning the
Collateral. Borrower will notify Lender prior to any change in the
location of Borrower’s state of organization of any change in
Borrower’s name. Borrower 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 Borrower and
Borrower’s business activities. |
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Assumed
Business Names. Borrower has filed or
recorded all documents or filings required by law relating to all
assumed business names used by Borrower. Excluding the name of
Borrower, the following is a complete list of all assumed business
names under which Borrower does business: None. |
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Authorization. Borrower’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 incorporation or organization, or
bylaws, 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. |
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Financial
Information. Each of Borrower’s
financial statements supplied to Lander truly and completely
disclosed Borrower’s financial condition as of the date of
the statement, and there has been no material adverse change in
Borrower’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. |
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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. |
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Properties. Except as contemplated
by this Agreement or as previously disclosed in Borrower’s
financial statements or in writing to Lender and as accepted by
Lender, 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
statements relating to such properties. All of Borrower’s
properties are titled in Borrower’s legal name, and Borrower
has not used or filed a financing statement under any other name
for at least the last five (5) years. |
2
BUSINESS LOAN AGREEMENT
(Continued)
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Hazardous
Substances. Except as disclosed to and
acknowledged by Lender in writing, Borrower 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. |
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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 Lender in
writing. |
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Taxes. To the best of
Borrower’s knowledge, all of Borrower’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. |
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Lien
Priority. Unless otherwise previously
disclosed to Lender in writing, Borrower 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 Lender’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 Lender that, so long as this Agreement remains in effect.
Borrower will;
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Notices of
Claims and Litigation. Promptly inform Lender
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. |
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Financial
Records. Maintain its books and records in
accordance with GAAP, applied on a consistent basis, and permit
Lender to examine and audit Borrower’s books and records at
all reasonable times. |
3
BUSINESS LOAN AGREEMENT
(Continued)
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Financial
Statement . Furnish Lender with the
following: |
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Annual
Statements. As soon as available, but in no
event later than one-hundred-twenty (120) days after the end of
each fiscal year. Borrower’s balance sheet and income
statement for the year ended, audited by a certified public
accountant satisfactory to Lender. |
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Interim
Statements. As soon as available, but in no
event later than sixty (60) days after the end of each fiscal
quarter. Borrower’s balance sheet and profit and loss
statement for the period ended, prepared by Borrower. |
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All financial
reports required to be provided under this Agreement shall be
prepared in accordance with GAAP, applied on a consistent basis,
and certified by Borrower as being true and correct. |
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Additional
information. Furnish such additional
information and statements, as Lender may request from time to
time. |
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Financial
Covenants and Ratios . Comply with the
following covenants and ratios: |
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Tangible
Net Worth. Commencing no later than September
30, 2009, Borrower will maintain at all times thereafter a Tangible
Net Worth of not less then $30,000,000.00. |
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Capital
Expenditures. Borrower will not make or
contract to make any single capital expenditure, including
leasehold improvements, or incur liability for rental or lease of
property if after giving effect thereto, the total of such
expenditure would exceed $500,000.00 during any fiscal year of
Borrower, without the prior written consent of Lender. |
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Negative
Pledge. Borrower will not create, incur,
assume, or suffer to exist any liens or encumbrances upon or with
respect to any of its assets or properties, now owned or hereafter
acquired, except liens in favor of Lender, without the prior
written consent of Lender. |
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Debt
Coverage Ratio. Borrower shall have, and
continuously maintain as of each quarter and year end, a ratio of
operating income to debt service of not less than 1.5 to 1. For
debt coverage ratio determination, operating income will be defined
as Borrower’s operating income for the immediately preceding
twelve months, plus depreciation, amortization, accretion and other
non-cash expenses. Debt service will be defined as the current
portion of long-term debt, excluding any outstanding debt drawn on
the $20,000,000.00 Line of Credit. |
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Except as
provided above, all computations made to determine compliance with
the requirement contained in this paragraph shall be made in
accordance with generally accepted accounting principles, applied
on a consistent basis, and certified by Borrower as being true and
correct, calculated and verified quarterly. |
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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
Lender, 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. |
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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. |
4
BUSINESS LOAN AGREEMENT
(Continued)
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Guaranties. Prior to disbursement of
any Loan proceeds, furnish executed guaranties of the Loans in
favor of Lender, executed by the guarantor named below, on
Lender’s forms, and in the amount and under the conditions
set forth in those guaranties. |
| Name of
Guarantor |
Amount |
| WESTMORELAND COAL
COMPANY |
Unlimited, secured by
Westmoreland Resources, Inc. stock |
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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. |
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Loan
Proceeds. Use all Loan proceeds solely for
Borrower’s business operations, unless specifically consented
to the contrary by Lender in writing. |
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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. |
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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 Lender immediately in writing of any default in
connection with any agreement. |
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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. |
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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, |
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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, 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 Lender’s sole opinion, Lender’s
interests in the Collateral are not jeopardized. Lender may require
Borrower to post adequate security or a bond, reasonably
satisfactory to surety Lender, to protect Lender’s
interest. |
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Inspection. Permit employees or
agents of Lender at any reasonable time to inspect any and all
Collateral for the Loan or Loans and Borrower’s other
properties and to examine or audit Borrower’s books,
accounts, and records and to make copies and memoranda of
Borrower’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 Lender, 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. |
5
BUSINESS LOAN AGREEMENT
(Continued)
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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. |
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Additional
Assurances. Make, execute and deliver to
Lender such promissory notes, mortgages, deeds of trust, security
agreements, assignments, financing statements, instruments,
documents and other agreement as Lender or its attorneys may
reasonably request to evidence and secure the Loans and to perfect
all Security Interests. |
LENDER’S EXPENDITURES. If any action
or proceeding is commenced that would materially affect
Lender’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 Borrower. 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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Continuity
of Operations. (1) Engage in any business
activities substantially different than those in which Borrower is
presently engaged, (2) cases operations, liquidate, merge,
transfer, acquire or consolidate with any other entity, change its
name, dissolve or transfer or sell Collateral out of the ordinary
course of business, or (3) pay any dividends on Borrower’s
stock (other than dividends payable in its stock), provided,
however that notwithstanding the foregoing, but only so long as no
Event of Default has occurred and is continuing or would result
from the payment of dividends, if Borrower is a “Subchapter S
Corporation” (as defined in the Internal Revenue Code of
1986, as amended), Borrower may pay cash dividends on its stock to
its shareholders from time to time in amounts necessary to enable
the shareholders to pay income taxes and make estimated income tax
payments to satisfy their liabilities under federal and state law
which arise solely from their status as Shareholders of a
Subchapter S Corporation because of their ownership of shares of
Borrower’s stock, or purchase or retire any of
Borrower’s outstanding shares or alter or amend
Borrower’s capital structure. |
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Loans,
Acquisitions and Guarantees. (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 courage of business., except
to guarantor and/or parent company. |
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Agreements. Borrower will not enter
into any agreement containing any provisions which would be
violated or breached by the performance of Borrower’s
obligations under this Agreement or in connection
herewith. |
6
BUSINESS LOAN AGREEMENT
(Continued)
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 faith deems itself
insecure, even though no Event of Default shall have
occurred.
RIGHT OF
SETOFF. To the extent permitted by applicable
laws, 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 Keogh accounts, or any
trust accounts for which setoff would be prohibited by law,
Borrower authorizes Lender, 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 Lender’s option, to
administratively freeze all such accounts to allow Lender to
protect Lender’s charge and setoff rights provided in this
paragraph.
DEFAULT. Each of the following shall
constitute an Event of Default under this Agreement:
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Payment
Default . Borrower fails to make any payment
when due under the Loan. |
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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. |
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Insolvency. The dissolution or
termination of Borrower’s existence as a going business, the
Insolvency of Borrower, the appointment of a receiver for any part
of Borrower’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. |
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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. |
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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
Borrower’s accounts, including deposit accounts, with Lender.
However, this Event of Default shall not apply if there is a good
faith dispute by Borrower as to the validity or reasonableness of
the claim which is the basis of the creditor or forfeiture
proceeding and if Borrower gives Lender 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. |
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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. |
7
BUSINESS LOAN AGREEMENT
(Continued)
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Change in
Ownership . Any change in ownership of
twenty-five percent (25%) or more of the common stock of
Borrower. |
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Adverse
Change . A material adverse change occurs in
Borrower's financial condition, or Lender believes the prospect of
payment or performance of the Loan is impaired. |
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Insecurity. Lender in good faith
believes itself insecure. |
EFFECT OF
AN EVENT OF DEFAULT. If any Event of Default
shall occur, except where otherwise provided in this Agreement or
the Related Documents, all commitments and obligations of Lender
under this Agreement or the Related Documents or any other
agreement immediately will terminate (including any obligation to
make further Loan Advances or disbursements), and, at
Lender’s option, all Indebtedness immediately will become due
and payable, all without notice of any kind to Borrower, except
that in the case of an Event of Default of the type described in
the “Insolvency” subsection above, such acceleration
shall be automatic and not optional. In addition, Lender shall have
all the rights and remedies provided in the Related Documents or
available at law, in equity, or otherwise. Except as may be
prohibited by applicable law, all of Lender’s rights and
remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make
expenditures or t
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