EXHIBIT 10.22
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 1,
1995, between SOLOCO, INC., a Louisiana corporation (the
"Borrower"), and HIBERNIA NATIONAL BANK, a national banking
association (the "Bank").
W I T N E S S E T H:
WHEREAS, the Borrower has applied to the Bank for
a multiple advance loan in an aggregate amount not to exceed
One Million Eight Hundred Forty Thousand and No/100 Dollars
($1,840,000.00), convertible to a term loan not to exceed a
term of ten years; and
WHEREAS, the Bank agrees to provide such credit
facilities to Borrower subject to the terms and conditions
set forth hereinbelow.
NOW, THEREFORE, in consideration of the premises,
and the mutual agreements contained herein, the Borrower and
the Bank do hereby agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
following terms have the following meanings:
1.1.1 "Affiliate" shall mean any Person which, directly
or indirectly, is in control of, is controlled by, or is under
common control with, another Person. For purposes of this
definition, a Person shall be deemed to be "controlled by"
another Person if the other Person possesses, directly or
indirectly, power either to (i) vote 10% or more of the
securities having ordinary voting power for the election of
directors of such Person or (ii) vote or hold 10% or more of
the partnership interest of such Person or (iii) direct or
cause the direction of the management and policies of such
Person whether by contract or otherwise.
1.1.2 "Agreement" shall mean this Credit Agreement,
as amended, supplemented, or modified from time to time.
1.1.3 "Building" shall have the meaning ascribed to
that term in the Purchase Agreement.
1.1.4 "Business Day" shall mean a day other than a
Saturday, Sunday or other day on which commercial banks in
New Orleans, Louisiana are authorized or required by law to
close.
1.1.5 "Charges" shall mean all Federal, state,
county, city, municipal, local, foreign or other
governmental taxes at the time due and payable, levies,
assessments, charges, liens, claims or encumbrances upon or
relating to (i) the Mortgaged Property, (ii) the
Obligations, (iii)Ethe Borrower's employees, payroll, income
or gross receipts, (iv)Ethe Borrower's ownership or use of
any of its assets, or (v)Eany other aspect of Borrower's
business.
1.1.6 "Closing Date" shall mean the date of the
Borrower's execution and delivery of the Note to the Bank.
1.1.7 "Code" shall mean the Louisiana Commercial
Laws, La. R.S. 10:9-101 et seq., as in effect from time to
time.
1.1.8 "Collateral" shall mean that portion of the
Mortgaged Property which consists of personal property.
1.1.9 "Construction Documents" shall mean,
collectively, (i) that certain Standard Form of Agreement
between Owner and Contractor dated as of August 21, 1995, by
and between Developer and J. B. Mouton and Sons, Inc., (ii)
that certain Standard Form of Agreement between Owner and
Architect dated as of June 30, 1995, by and between
Developer and Guidry Beazley Ostteen, a Professional
Corporation, (iii) that certain Contract for Professional
Engineering Services dated as of July 26, 1995, by and
between Developer and Randall J. Hebert & Associates, Inc.,
Consulting Engineers, and (iv) that certain Contract dated
as of August 21, 1995, by and between Developer and Archie
Thibodeaux Construction Co., Inc., as each of the foregoing
agreements may from time to time be amended and in effect,
together with any and all payment and performance bonds
securing the obligations of the parties with whom Developer
has contracted under the foregoing agreements.
1.1.10 "Contractual Obligation" shall mean as to any
Person, any provision of any security issued by such Person
or of any agreement, instrument or undertaking to which such
Person is a party or by which it or any of its property is
bound.
1.1.11 "Current Assets" shall mean, at any date, the
aggregate amount of all assets of Guarantor that would be
classified as current assets at such date in accordance with
GAAP consistent with those applied in the preparation of the
financial statements referred to in Section 5.1 hereof.
1.1.12 "Current Liabilities" shall mean, at any date,
the liabilities (including proper accruals) of Guarantor
that would be classified as current liabilities in
accordance with GAAP consistent with those applied in the
preparation of the financial statements referred to in
Section 5.1 hereof.
1.1.13 "Debt" shall mean at any date, Indebtedness of
a Person as at such date.
1.1.14 "Debt Service Coverage Ratio" shall mean, with
respect to Guarantor for any period, the sum of (a) Net
Income for such period, (b) depreciation and other non-cash
charges to the extent charged against Net Income, (c)
interest expense and (d) estimated taxes, divided by the sum
of interest expense of Guarantor on all of its Indebtedness
for such period plus the amount of current maturities of
long term indebtedness of Guarantor (determined in
accordance with GAAP) for such period.
1.1.15 "Default" shall mean the occurrence of any
event which but for the passage of time or giving of notice,
or both, would constitute an Event of Default hereunder.
1.1.16 "Developer" shall mean Town Center
Development, L.L.C., a Louisiana limited liability company.
1.1.17 "Environmental Complaint" shall mean any
written complaint, order, citation, letter, notice or other
communication, from any Person affecting or relating to:
(a) the Borrower; or
(b) the Mortgaged Property or any part thereof
or any interest therein; or
(c) any activity or operation at any time
conducted by the Borrower or any other
Person on or in connection with the
Mortgaged Property or any part thereof or
any interest therein,
with regard to the occurrence or presence of or exposure to
or possible or threatened or alleged occurrence or presence
of or exposure to Environmental Discharges, Hazardous
Materials or any other environmental, health or safety
matter which is the subject of any Relevant Environmental
Law, including, without limitation,
(1) existence of any contamination or possible
or threatened contamination;
(2) remediation of any Hazardous Materials or
Environmental Discharge in connection with
the the Mortgaged Property or any part
thereof; and
(3) any violation or alleged violation of any
Relevant Environmental Law.
1.1.18 "Environmental Discharge" shall mean any
discharge or release of pollutants or effluents or emissions
of any kind in violation of any Relevant Environmental Law.
1.1.19 "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as amended from time to time.
1.1.20 "Event of Default" shall mean any of the
events specified in Article VII.
1.1.21 "GAAP" shall mean generally accepted
accounting principles in the United States of America in
effect from time to time.
1.1.22 "Governmental Authority" shall mean any nation
or government, any state or other political subdivision
thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or
pertaining to government.
1.1.23 "Guarantee Obligation" shall mean as to any
Person, any obligation of such Person guaranteeing or in
effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "primary obligations") of any other
Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent (a) to
purchase any such primary obligation or any property
constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of
any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of
any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (d)
otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall
not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount
of any Guarantee Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary
obligation in respect of which the guarantor may be liable
pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the
maximum amount for which such Person may be liable are not
stated or determinable, in which case the amount of such
Guarantee Obligation shall be such Person's maximum
reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.
1.1.24 "Guaranty" shall mean that certain in solido
Commercial Guaranty dated December 1, 1995, executed by the
Guarantor in favor of the Bank, guaranteeing payment in full
of the Obligations.
1.1.25 "Guarantor" shall mean Newpark Resources,
Inc., a Delaware corporation, together with its successors
and assigns.
1.1.26 "Hazardous Materials" shall mean asbestos and
any toxic or hazardous substances, wastes or contaminants,
medical wastes, infectious wastes, polychlorinated
biphenyls, paint containing lead and urea formaldehyde foam
insulation, as any of those terms is defined from time to
time in or for the purposes of any Relevant Environmental
Laws.
1.1.27 "Improvements" shall have the meaning ascribed
to that term in the Purchase Agreement.
1.1.28 "Indebtedness" shall mean for a Person at a
particular date, the sum (without duplication) at such date
of (a) all indebtedness of such Person for borrowed money or
for the deferred purchase price of property or services or
which is evidenced by a note, bond, debenture or similar
instrument, (b) all obligations of such Person under
financing leases, (c) all obligations of such Person in
respect of letters of credit, acceptances, or similar
obligations issued or created for the account of such
Person, and (d) all liabilities secured by a Lien on any
property owned by such Person even though such Person has
not assumed or otherwise become liable for the payment
thereof (provided, in the event such liability secured by
such a Lien is non-recourse to such Person, the amount of
Indebtedness determined hereunder attributed to such
liability shall be limited to the value of such property).
1.1.29 "Land" shall have the meaning ascribed to that
term in the Purchase Agreement.
1.1.30 "Lien" shall mean any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance,
lien (statutory or other), or preference, priority or other
security agreement or preferential arrangement of any kind
or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any
financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any
financing statement under the Code or comparable law of any
jurisdiction in respect of any of the foregoing).
1.1.31 "Loan Documents" shall mean collectively this
Agreement, the Note and the Security Documents.
1.1.32 "Loan" or "Loans" shall refer to the advance
or advances made by the Bank to the Borrower pursuant to the
terms of this Agreement.
1.1.33 "Material Adverse Effect" shall mean a
material adverse effect on (i) the business, assets,
operations, prospects or financial or other condition of the
Borrower or of Guarantor, (ii) the Borrower's ability to pay
the Loan and all of its other Debt in accordance with the
terms thereof, (iii) the Mortgaged Property, or (iv) the
Bank's Liens on the Mortgaged Property or the priority of
any such Liens. In the determination of whether a Material
Adverse Effect exists, all factors will be considered, such
as insurance coverage.
1.1.34 "Mortgage" shall mean that certain Multiple
Indebtedness Mortgage by Borrower in favor of Bank dated
December 1, 1995, affecting that property acquired by
Borrower pursuant to that certain Act of Credit Sale and
Vendor's Lien by Developer to and in favor of Borrower dated
August 21, 1995, recorded under entry no. 95-27651 of the
records of Lafayette Parish, Louisiana more fully described
therein, securing payment of the Note and all other
obligations of the Borrower to the Bank, as the same may be
amended, supplemented or modified from time to time,
together with related financing statements executed by
Borrower as debtor in favor of Bank as secured party
executed in connection therewith.
1.1.35 "Mortgaged Property" shall mean, collectively,
all land and improvements situated upon the real estate
affected by the Mortgage, and all related interests of the
Borrower in and to such property which are affected by the
Mortgage.
1.1.36 "Net Income" shall mean, for any period, the
aggregate net income (or net loss) of Guarantor for such
period calculated in accordance with GAAP.
1.1.37 "Note" shall mean the master promissory note
of the Borrower dated of even date herewith, payable to the
order of the Bank in the principal sum of $1,840,000.00,
which note shall evidence the Loans, as said promissory note
may be amended, renewed or extended from time to time,
including, without limitation, any promissory note issued by
the Borrower to Bank upon the conversion of the Loans to a
term loan in accordance with Section 2.12 hereof.
1.1.38 "Obligations" shall mean the unpaid principal
of and interest on (including interest accruing on or after
the filing of any petition in bankruptcy or the commencement
of any insolvency, reorganization or like proceeding,
related to the Borrower, whether or not a claim for post
filing or post petition interest is allowed in such
proceeding) the Note and all other obligations and
liabilities of the Borrower to the Bank, whether direct or
indirect, absolute or contingent, due or to become due, now
existing or hereafter incurred, which may arise under, out
of, or in connection with this agreement, the Note, the
other Loan Documents, or any other document made, delivered
or given in connection therewith, whether on account of
principal, interest, fees, indemnities, costs, expenses
(including, without limitation, all reasonable fees and
disbursements of counsel to the Bank) or otherwise.
1.1.39 "Permitted Liens" shall mean:
(a) Liens for current taxes, assessments or
other governmental charges which are not delinquent or
remain payable without penalty, or the validity or amount of
which is being contested in good faith by appropriate
proceedings and for which adequate reserves or other
appropriate provisions are maintained on the books of
Borrower in accordance with GAAP, provided, that no
Mortgaged Property of Borrower has been seized, levied,
attached, sequestered, foreclosed upon or garnished by
reason of such Lien;
(b) non-consensual Liens imposed by
operation of law such as landlord liens for rent not yet due
and payable and those for vendors, materialmen, mechanics,
warehousemen, carriers, employees, workmen and repairmen,
for current wages or accounts payable not yet delinquent and
arising in the ordinary course of business which are being
contested in good faith by appropriate proceedings and for
which adequate reserves or other appropriate provisions are
maintained on the books of Borrower in accordance with GAAP,
provided, that no Mortgaged Property of Borrower has been
seized, levied, attached, sequestered, foreclosed upon or
garnished by reason of such Lien.
(c) deposits for workers' compensation and
unemployment insurance;
(d) deposits to secure the performance of
bids, trade contracts, leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of
like nature incurred in the ordinary course of business;
(e) Liens granted pursuant to the terms of
the Security Documents;
(f) Purchase money security interests for
equipment acquired by Borrower in the ordinary course of
business; and
(g) the Lien evidenced that certain Act of
Credit Sale and Vendor's Lien by Developer in favor of
Borrower dated August 21, 1995, recorded under entry
no.E95-27651 of the records of Lafayette Parish, Louisiana,
but only to the extent that such Lien has been subordinated
to the Mortgage upon terms and conditions satisfactory to
Bank.
1.1.40 "Person" shall mean an individual,
partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other
entity of whatever nature.
1.1.41 "Plan" shall mean at a particular time, any
employee benefit plan which is covered by ERISA.
1.1.42 "Plans" shall mean the final architectural and
engineering drawings and specifications, including any
revisions, amendments and addenda required to complete the
construction of the Building and Improvements, including
off-site and on-site work.
1.1.43 "Presence" shall mean when used in connection
with any Environmental Discharge or Hazardous Materials, the
presence, generation, manufacture, installation, treatment,
use, storage, handling, repair, encapsulation, disposal,
transportation, spill, discharge and release.
1.1.44 "Prime Rate" shall mean, as of a particular
date, the prime rate most recently officially announced by
Citibank, N.A. Without notice to Borrower or any other
Person, the Prime Rate shall change automatically from time
to time as and in the amount by which said prime rate shall
fluctuate, with each such change to be effective as of the
date of each change in such prime rate. The Prime Rate is a
reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer.
1.1.45 "Purchase Agreement" shall mean that certain
Purchase Agreement by and between Borrower and Developer
dated as of July 20, 1995, as the same may be amended or
modified from time to time.
1.1.46 "Relevant Environmental Laws" shall mean all
Requirements of Law from time to time applicable to the
Borrower's interest in the Mortgaged Property or any part
thereof or any interest therein imposing liability or
standards of conduct concerning, or otherwise relating to:
(a) the presence of or exposure to or
remediation of Hazardous Materials;
(b) the occurrence or remediation of any
Environmental Discharge or any other
environmental, health or safety matter;
(c) any requirement or the determination of any
requirement for remediation of the presence
or occurrence of any Hazardous Materials or
Environmental Discharge in connection with
any transfer of the Mortgaged Property or
any part thereof or any interest therein;
and
(d) effects on the environment of the Mortgaged
Property or any part thereof or of any
activity heretofore, now or hereafter
conducted on the Mortgaged Property or any
part thereof.
1.1.47 "Request for Advance" shall mean the
Borrower's written request for a Loan issued to Bank in
accordance with Sections 2.10 and 2.11 hereof.
1.1.48 "Requirement of Law" shall mean as to any
Person, the certificate of Incorporation and By-Laws or
other organizational or governing documents of such Person,
and any law, treaty, rule or regulation or determination of
an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any
of its property or to which such Person or any of its
property is subject including, without limitation, any
Relevant Environmental Laws.
1.1.49 "Security Agreements" shall mean,
collectively, (ii) that certain Commercial Security
Agreement by Borrower in favor of Bank dated December 1,
1995, affecting all of Borrower's rights in and to the
Purchase Agreement, together with an appropriate financing
statement evidencing the security interest granted to Bank
thereunder, and (ii) that certain security agreement and/or
collateral assignment of the Construction Documents to be
executed by Developer in favor of Bank, together with any
and all financing statements by Developer which Bank may
require to evidence such security interest and/or collateral
assignment of the Construction Documents.
1.1.50 "Security Documents" shall mean the Guaranty,
the Security Agreements and the Mortgage, each as amended,
supplemented, or modified from time to time.
1.1.51 "Solvent" shall mean, when used with respect
to any Person on a particular day, that on such date (i) the
fair value of the property of such Person is greater than
the total amount of liabilities, including without
limitation, contingent liabilities, of such Person, (ii) the
present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the
probable liability of such Person on its debts as they
become absolute and matured, (iii) such Person is able to
realize upon its assets and pay its debts and other
liabilities, contingent obligations and other commitments as
they mature in the ordinary course of business, (iv) such
Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (v)
such Person is not engaged in business or a transaction, and
is not a about to engage in business or a transaction, for
which such Person's property would constitute unreasonably
small capital after giving due consideration to the
prevailing practice in the industry in which such Person is
engaged. In computing the amount of contingent liabilities
at any time, it is intended that such liabilities will be
computed at the amount which, in light of all of the facts
and circumstances existing at such time, represents the
amount that can be reasonably expected to become an actual
or matured liability.
1.1.52 "Subsidiary" shall mean as to any Person, a
corporation of which shares of stock having ordinary voting
power (other than stock having such power only by reason of
the happening of a contingency) to elect a majority of the
board of directors or other managers of such corporation are
at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more
intermediaries, or both, by such Person.
1.1.53 "Tangible Net Worth" shall mean, with respect
to Guarantor as of the date of determination thereof, all
amounts which would, in conformity with generally accepted
accounting principles, be included under shareholders'
equity on a balance sheet of Guarantor at such date;
provided, however, such amounts are to be net of amounts
carried on the books of Guarantor for (i) treasury stock,
(ii) any cost of investments in excess of net assets
acquired at any time of acquisition by such person or entity
and (iii) patent applications, copyrights, trademarks, trade
names, experimental or organizational expenses and other
like intangibles.
1.1.54 "Termination Date" shall mean the earlier to
occur of (i)EJune 1, 1996, or (ii)Ethe earlier date of
termination of the Bank's obligation to make Loans
hereunder.
1.1.55 "Treasury Rate" shall mean the effective yield
on United States Treasury Notes maturing ten (10) years
after the date of the term note described in Section 2.12
hereof, as reflected in the Wall Street Journal published on
the date of such term note.
1.1.56 "Working Capital" shall mean, with respect to
Guarantor as of the date of determination of same, an amount
equal to Current Assets minus Current Liabilities, all
determined in accordance with GAAP.
1.2 Other Definitional Provisions. (a) Unless
otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the
Note or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in the Note, in any
certificate or other document made or delivered pursuant
hereto, accounting terms related to the Borrower and not
defined in Section 1.1 and accounting terms properly defined
in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and
"hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not
to any particular provision of this Agreement, and section,
subsection, schedule and exhibit references are to this
Agreement unless otherwise specified.
(d) The meanings given to terms defined
herein shall be equally applicable to both the singular and
plural forms of such terms.
ARTICLE II
LOANS
2.1 The Loans. Subject to the terms and conditions
of this Agreement, the Bank agrees, from the date hereof
through and including the Termination Date, to make Loans
from time to time to Borrower in an aggregate amount not to
exceed the principal sum of $1,840,000.00.
2.2 Use of the Loans. The proceeds of the Loan
shall be used solely to fund the obligations of the Borrower
under the Purchase Agreement, pursuant to which the Borrower
has acquired the Land and non-exclusive right-of-way
described therein, and pursuant to which it will acquire the
Building and Improvements described in said Purchase
Agreement.
2.3 The Note. The Borrower's obligation to repay
the Loans made by the Bank shall be evidenced by the Note.
2.4 Interest. The Note shall bear interest at the
Prime Rate from time to time in effect, adjusted daily;
provided, however, that upon the occurrence of an Event of
Default hereunder, Bank shall have the right to
prospectively increase the rate of interest to the default
rate specified in the Note (the "Default Rate").
2.5 Prepayments. At any time prior to the
Termination Date, the Borrower may, at its option at any
time, prepay all or part of the Loans, provided any
prepayment shall be applied to accrued interest first, then
principal in the reverse order of maturity. In the event
that Borrower fails to convert the Loans to a term loan in
accordance with the requirements of Section 2.12 hereof on
the Termination Date, or is unable to meet the requirements
for the conversion of the Loans to a term loan in accordance
with the requirements of Section 4.3 hereof on the
Termination Date, then in addition to the payment of all
outstanding principal and accrued interest on the
Termination Date, Borrower shall pay to Bank a prepayment
fee in the amount of $36,800.00 on the Termination Date.
2.6 Commitment Fee. The Borrower shall pay to the
Bank a Commitment Fee for the Loans (and for Bank's
commitment to convert the Loans to a term loan in accordance
with Section 2.12 hereof) in the amount of $5,000.00, which
Commitment Fee shall be due and payable upon the Termination
Date. The Commitment Fee shall be due and payable upon the
Termination regardless of whether the Loans are converted to
a term loan, and shall be payable in addition to the
prepayment fee described in Section 2.5 hereof in the event
the Loans are not converted to a Term Loan.
2.7 Computation of Interest. Interest in respect of
the Loan shall be calculated on the actual days elapsed on
the basis of a year of 360 days.
2.8 Payments; Late Charge. The Note shall be
payable in five (5) installments of accrued and unpaid
interest due and outstanding on the Note commencing on
January 1, 1996, and continuing on the first day of each
month thereafter until the Termination Date, at which time
all accrued and unpaid interest and all outstanding
principal shall be due and payable in full. All payments
(including prepayments) to be made by the Borrower on
account of principal, interest and fees shall be made to the
Bank, at the Bank's main office set forth in Section 8.2, in
lawful money of the United States of America and in
immediately available funds. If any payment hereunder
becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal and
interest thereon shall be payable at the then applicable
rate during such extension. A five percent (5%) late charge
shall be assessed (against the amount of any late payment)
if a monthly payment under the Note is not received by the
Bank within ten (10) calendar days of the payment due date.
A late payment fee shall not be charged if a payment is late
due to the fault of the Bank (it being understood and
agreed, however, that Borrower shall have the burden of
proof in establishing that it made any such payment on
time).
2.9 Loan Advances. The Bank agrees to make Loans to
the Borrower from time to time on any Business Day from the
date hereof through the Termination Date in accordance with
the provisions of this ArticleEII up to an aggregate amount
of $1,840,000.00. This is not a revolving credit facility,
and no further Loans shall be made after the total amount of
the Loans equals $1,840,000.00. The Bank or the Bank's copy
of any cashier's check representing all or any part of the
proceeds or a disbursement shall be deemed prima facie
evidence of the Indebtedness of the Borrower to the Bank on
such Loan.
2.10 Borrowing Procedure. (a) The proceeds of the
Loans shall be advanced by the Bank as construction of the
Building and Improvements progresses and as payments become
due to Developer under the Purchase Agreement, provided,
however, that (i) the Borrower shall submit a Request for
Advance to the Bank at least 5 Business Days prior to the
proposed funding date specifying the total amount of the
proposed Loan and the proposed date on which said Advance is
to be made; (ii) each Request for Advance shall be in
substantially the form prescribed by the Bank and shall
identify the intended use of such proceeds thereof;
(iii) each advance shall be funded in an amount equal to
the amounts then due by Borrower to Developer under the
Purchase Agreement, all to the extent that Borrower's
written Request for Advance is accompanied by an architect's
inspection report (on AIA form G702) delivered to and
addressed to Bank which evidences the percentage
completion of the Building and Improvements required for
such payment obligation of Borrower under the Purchase
Agreement. All advances shall be made by cashier's checks
payable to the order of Borrower and sent by Bank via
overnight express courier to Borrower in the care of Town
Center Development, L.L.C., 1001 Pinhook Road, Petroleum
Center, Building 3, Suite 103, Attention: Mr. Cecil D.
Trahan. The parties hereto agree that this advance
procedure shall not be amended without the prior written
consent of Developer.
2.11 Requests for Advances. (a) Each Request for
Advance shall be submitted to the Bank in duplicate and
shall be accompanied by, in addition to the items listed
above in Section 2.10 hereof, the following:
(i) Lien Waivers. Waivers of liens and
receipts for payment by Developer
from L. B Mouton and sons and
Archie Thibodeaux Construction Co.
2.12 Commitment to Convert Loans to a Term Loan.
Subject to the terms and conditions of this Agreement
(including specifically the prior satisfaction of all
conditions precedent set forth in Section 4.3 hereof), Bank
agrees, at any time on or prior to the Termination Date, to
convert that portion of the outstanding Loans up to an
amount equal to the lesser of (i) $1,840,000.00, or (ii) 80%
of the appraised value of the Land, Building and
Improvements as shown by an MAI appraisal of the Land,
Building and Improvements provided to Bank in connection
with its initial Loan advance, as the same may be revised by
such appraiser upon the completion of the Building and
Improvements, to a term loan which shall be payable over a
term of up to ten (10) years from the date of such term
loan, and which shall be payable in monthly installments of
interest in the amount of all accrued and unpaid interest
plus additional monthly installments of principal in an
amount necessary to fully amortize the amount of such term
loan over the term of such term loan on a straight-line
amortization basis. Upon the conversion of the Loans to a
term loan, Bank shall have no further commitment to lend
hereunder. The term loan shall be evidenced by a promissory
note made by Borrower payable to the order of Bank in the
amount of such term loan in form and substance which is
satisfactory to Bank, shall be secured by the Security
Documents, and shall be governed by the terms and conditions
of this Agreement. Such term note shall bear interest at a
fixed rate equal to 2.25% per annum in excess of the
Treasury Rate in effect on the date of such term loan is
made and the term note is signed. Any determination of the
Treasury Rate by Bank, in the absence of manifest error,
shall be binding and conclusive. If, with respect to the
Treasury Rate, Bank shall determine that the sale of
Treasury Securities by the United States Government has been
suspended, or if Treasury Securities are no longer being
offered for sale, or if the yield for such Treasury
Securities are no longer printed in the Wall Street Journal,
or for any other reason Bank is not able to obtain a
quotation from the Federal Reserve for the sale of such
Treasury Securities, then Bank shall forthwith give notice
thereof to Borrower and advise Bank of a new index for
determining the interest rate to be charged on such term
note which, in the good faith judgment of Bank, shall be
substantially equivalent to the Treasury Rate. No
prepayments of the term note shall be allowed during the
first three years of the term of the term note; thereafter,
a prepayment penalty equal to the following percentages of
the principal balance of the term note from time to time
prepaid by Borrower shall be assessed by Bank:
Year Prepayment Penalty
4 4%
5 3%
6 2%
7 1%
Years 8, 9 and 10 0%
Notwithstanding the foregoing, in no event shall the
prepayment penalty exceed 1% at the time of any prepayment
if upon the date of any such prepayment the effective yield
on United States Treasury Notes maturing ten (10) years
after the date of such prepayment, as reflected in the Wall
Street Journal published on the date of such prepayment,
exceeds the Treasury Rate in effect under the term note.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to Bank as
follows:
Financial Condition.
3.1
(a) All balance sheets and other financial statements
of the Borrower and the Guarantor furnished to the Bank
prior to the date of this Agreement present fairly the
financial positions of the Borrower and the Guarantor as at
the dates thereof, and present fairly the results of
operations and changes in financial position of the Borrower
and of the Guarantor for the periods then ended.
(b) There has been no material adverse change in the
business, assets, operations, prospects or financial or
other condition of the Borrower or of the Guarantor since
the date of the financial statements referred to in Section
3.1(a) above.
3.2 Existence; Compliance with Law. The Borrower (a)
has the power and authority, and the legal right, to own and
operate its property (including the Mortgaged Property) and
to conduct the business in which it is currently engaged,
(b) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith would not,
in the aggregate, have a Material Adverse Effect, and (c)
has all licenses and permits, and is in compliance with all
Requirements of Law, required to own and operate the
Mortgaged Property and to otherwise operate its business as
presently conducted.
3.3 Power; Authorization; Enforceable Obligations.
The Borrower and the Guarantor each has the power and
authority, and the legal right, to make, deliver and perform
the Loan Documents to which it is a party. The Borrower has
the power and authority and the legal right to borrow
hereunder, and has taken all necessary action to authorize
the borrowings on the terms and conditions of this Agreement
and the Note and to authorize the execution, delivery and
performance of the Loan Documents to which it is a party.
No consent or authorization of, filing with or other act by
or in respect of any Governmental Authority is required in
connection with the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability
of the Loan Documents. This Agreement has been, and each
other Loan Document to which he is a party will be, duly
executed and delivered on behalf of the Borrower. This
Agreement constitutes, and each other Loan Document to which
it is a party when executed and delivered will constitute, a
legal, valid and binding obligation of each of the Borrower
and the Guarantor enforceable against each of them in
accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general
equitable principles.
3.4 Corporate Status. The Borrower is a corporation
duly organized, legally existing, and in good standing under
the law of the State of Louisiana, and is duly qualified to
do business in all other jurisdictions where the property it
owns or the business it conducts makes such qualification
necessary.
3.5 No Legal Bar. The execution, delivery and
performance of the Loan Documents by the Borrower, the
borrowings hereunder and the use of the proceeds thereof,
will not violate any Requirement of Law or any Contractual
Obligation of the Borrower, and, except as contemplated in
the Loan Documents, will not result in, or require, the
creation or imposition of any Lien on any of the Borrower's
respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation, in each case
that would have a Material Adverse Effect.
3.6 No Material Litigation. No litigation,
investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or threatened by or
against the Borrower or the Guarantor or against any of
their respective properties or revenues (a) with respect to
any of the Loan Documents or any of the transactions
contemplated hereby or thereby, or (b) which would have a
Material Adverse Effect.
3.7 No Default. Neither the Borrower nor the
Guarantor is in default under or with respect to any
Contractual Obligation in any respect which would have a
Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
3.8 Ownership of Property; Liens. The Borrower has
good record and marketable title in full ownership to the
Mortgaged Property, and good title to all its other
property, and none of such Mortgaged Property is subject to
any Lien except for Permitted Liens.
3.9 Security Documents. The provisions of the
Security Documents are effective to create in favor of the
Bank a legal, valid and enforceable Lien in all right, title
and interest of the Borrower in the Mortgaged Property and
all other property affected thereby. Each Security Document
constitutes (upon proper filing, if applicable) a perfected
first Lien on all right, title and interest of the Borrower
(or other grantor thereof) in the collateral described
therein, subject only to Permitted Liens.
3.10 Taxes. The Borrower has filed or caused to be
filed all tax returns which to the knowledge of the Borrower
are required to be filed and has paid all taxes shown to be
due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees
or other charges imposed on it or any of its property by any
Governmental Authority other than those that are not
material, that are not yet delinquent, or that are being
contested in good faith by appropriate proceedings and for
which adequate reserves or security have been provided; and
no tax lien has been filed and, no claim is being asserted
with respect to any such tax, fee or other charge, other
than those claims that are being contested in good faith by
appropriate proceedings and for which adequate reserves or
security have been provided.
3.11 ERISA. The Borrower is in compliance in all
material respects with the applicable provisions of ERISA,
and no "reportable event," as such term is defined in
Section 4043 of ERISA, has occurred with respect to any Plan
of the Borrower.
3.12 Construction. The Borrower hereby represents
and warrants to the Bank (i)Ethat the Plans are in final
form and are satisfactory to the Borrower and its contractor
(if applicable), and to the extent required by applicable
law, to all applicable governmental authorities; (ii)Ethe
Plans, together with the anticipated use of the Mortgaged
Property, do not violate any zoning ordinance or restrictive
covenant applicable to the Mortgaged Property; (iii)Ethe
Borrower has obtained (or has caused others to obtain) all
permits and approvals necessary to construct the
Improvements from all applicable governmental authorities;
(iv)Ethe Developer has not begun any work on the
Improvements, delivered any materials to the Mortgaged
Property or in any way commenced the construction of the
Improvements unless the Bank has received title insurance
insuring the Mortgage over any construction liens or other
liens arising under the Louisiana Private Works Act, La.
R.S. 9:4801, et seq., and (v)Ethe Purchase Agreement and the
Construction Documents remain in full force and effect, with
no amendments thereto which have not been provided to Bank,
and no default exists under the Purchase Agreement and the
Construction Documents.
3.13 No Burdensome Restrictions. No Requirement of
Law or Contractual Obligation of the Borrower has a Material
Adverse Effect.
3.14 Accuracy and Completeness of Information. All
information, reports and other papers and data with respect
to the Borrower or the Guarantor furnished to the Bank by
the Borrower or the Guarantor, or on behalf of any of them,
were, at the time the same were so furnished, complete and
correct in all material respects, or have been subsequently
supplemented by other information, reports or other papers
or data, to the extent necessary to give the Bank a true and
accurate knowledge of the subject matter in all material
respects. No fact is known to the Borrower which materially
and adversely affects or in the future may (so far as the
Borrower can reasonably foresee) materially and adversely
affect the business, assets or liabilities, financial
condition, results of operations or business prospects of
the Borrower or of the Guarantor, which has not been set
forth in the financial statements referred to in Section
3.1(a). No document furnished or statement made in writing
to the Bank by the Borrower or any of the Guarantor in
connection with the negotiation, preparation or execution of
this Agreement contains any untrue statement of a material
fact, or omits to state any such material fact necessary in
order to make the statements contained therein not
misleading.
3.15 Use of Proceeds; Margin Stock. The proceeds of
the Loan will be used by the Borrower solely for the
purposes specified in Section 2.2. None of such proceeds
will be used for the purpose of purchasing or carrying any
"margin stock" as defined in Regulation U, Regulation X or
Regulation G of the Board of Governors of the Federal
Reserve System.
3.16 Principal Office, Etc. The principal office,
chief executive office and principal place of business of
the Borrower is set forth in Section 8.2 hereof. The
Borrower maintains his principal records and books at such
address. The tax identification number of the Borrower is
72-0536201.
3.17 Hazardous Materials. (a)ETo the Borrower's
knowledge and belief:
(1) There are and have been no Hazardous
Materials at, upon, under or within or
discharged or emitted from the Mortgaged
Property or any part thereof, including,
where applicable and without limitation, the
air, soil, surface and ground water and
aquifers of the Mortgaged Property or any
part thereof;
(2) No Hazardous Materials have flowed, blown or
otherwise become present at the Mortgaged
Property from other premises;
(3) No Environmental Discharges have occurred
at, upon, under, within or from the
Mortgaged Property or any part thereof; and
(4) No Hazardous Materials have been removed
from the Mortgaged Property or any part
thereof.
(b) No Environmental Complaint has been given or made
or filed with respect to the Borrower or the Mortgaged
Property or any part thereof or any interest therein.
(c) There are and have been no violations of any
Relevant Environmental Laws at the Mortgaged Property or any
part thereof or any interest therein.
(d) All transfers of the Mortgaged Property or any
part thereof or any interest therein have been made in
compliance with all Relevant Environmental Laws.
(e) No consent orders or decrees under Relevant
Environmental Laws have been entered with respect to the
Mortgaged Property or any activities heretofore or now
conducted at the Mortgaged Property or any part thereof or
any interest therein.
3.18 Additional Representations. Neither the
Borrower nor the Guarantor is (i) a defendant in any suit or
legal action, (ii) has any judgments, garnishments or
attachments pending against any of them, or (iii) has ever
been adjudicated a bankrupt. Each of the Borrower and the
Guarantor is, and after consummation of this Agreement, and
after giving effect to all Obligations incurred and Liens
created by the Borrower in connection herewith will be,
Solvent.
ARTICLE IV.
CONDITIONS PRECEDENT
4.1 Conditions of Initial Loan. The agreement of the
Bank to make the initial Loan advance hereunder is subject to
the satisfaction, immediately prior to or concurrently with the
making of such Loan advance, the following conditions
precedent:
(a) Agreement; Note. The Bank shall have
received (i) this Agreement, executed and
delivered by the Borrower or the duly
authorized agent of the Borrower, and (ii)
the Note of the Borrower conforming to the
requirements hereof and executed by the
Borrower or the duly authorized agent of
the Borrower.
(b) Certain Other Loan Documents. The Bank
shall have received the Mortgage, the
Guaranty and the Security Agreements duly
executed and delivered by the Borrower,
the Guarantor and the Developer or the
duly authorized agents of the Borrower,
the Guarantor and the Developer, together
with resolutions or unanimous consents of
the boards of directors of the Borrower
and of the Guarantor and of the members of
Developer which authorize the Borrower and
the Developer to enter into the
transactions contemplated by this
Agreement with the Bank, and to execute
and deliver to the Bank all documents
reasonably required by the Bank in
connection herewith, and the Bank shall
have received the Guaranty, duly executed
by the Guarantor.
(c) Representations and Warranties. The
representations and warranties contained
in Article III hereof and in each of the
Loan Documents shall be true and correct
in all respects on the date of making of
such Loan, with the same force and effect
as though made on and as of that date.
(d) No Defaults. As of the date of making
such Loan, there shall exist no Event of
Default, or default which but for the
passage of time or giving of notice, would
constitute an Event of Default.
(e) Environmental Matters. The Bank shall
have received a PhaseEI Environmental
Inspection satisfactory to the Bank, all
of which shall be reasonably satisfactory
in form, substance and scope to the Bank,
and the cost of the Phase I Environmental
Inspection shall have been paid by the
Borrower to the Bank.
(f) Title Insurance Policy. The Bank shall
have received a Mortgagee's Title Policy
in the amount of $1,840,000.00, insuring
that the Mortgage creates a valid first
Lien on the Mortgaged Property free and
clear of all defects, encumbrances and
Liens (except for Permitted Liens), naming
the Bank as the insured thereunder, in the
form of ALTA Loan Policy-1970 or such
other similar form acceptable to the Bank,
containing endorsements for lien
protection, hazardous waste liens, REM,
future advance, survey, zoning and such
other endorsements as the Bank may
request, and the Bank shall have also
received evidence that all premiums with
respect to such policy has been paid.
(g) Survey. The Bank and the title insurance
company issuing the title policy (the
"Title Insurance Company") shall have
received a survey satisfactory to them of
the Mortgaged Property certified to the
Bank and the Title Insurance Company in a
manner satisfactory to them, by an
independent professional licensed land
surveyor satisfactory to the Bank and the
Title Insurance Company, which shall be
made in accordance with the minimum
standards established by the State of
Louisiana for the preparation of land
surveys and for land surveyors, and shall
include a survey certificate executed by
the surveyor.
(h) Fees. The Bank shall have received the
all fees owed to Bank hereunder at such
time.
(i) Insurances. The Bank shall have received
original or certified true copies of paid
insurance policies in compliance with
Section 5.5 hereof.
(j) Release of and/or Subordination of Liens.
The Bank shall have received evidence
satisfactory to it that any and all Liens
affecting the Mortgaged Property or the
Collateral (if applicable) other than
Permitted Liens shall have been released
or subordinated to Bank's Liens.
(k) Filings and Recordings. All filings,
registrations and recordings shall have
been properly filed, registered or
recorded in each recording jurisdiction in
order to create and perfect the Lien in
favor of the Bank with respect to the
Mortgage and the Security Agreement.
(l) Appraisal. The Bank shall have received,
at the Borrower's expense, an appraisal of
the Land, Building and Improvements based
upon the Plans, prepared by an MAI
appraiser approved by Bank, which
evidences a market value of not less than
$2,300,000.00.
(p) Site Inspection Affidavit. The Bank shall
have received an affidavit from a licensed
architect, surveyor or civil engineer that
no work has begun and no materials have
been delivered to the Mortgaged Property
as of the Closing Date (unless Bank has
received a mortgagee's policy of title
insurance insuring the Mortgaged Property
over construction liens).
(q) Building Permit. Appropriate building
permits and such other licenses and
permits prerequisite to authorize
construction of the Improvements in
accordance with the Plans.
(r) Plans. Final architectural and
engineering drawings and specifications,
including any revisions, amendments and
addenda, required to complete the
construction of the Building and the
Improvements.
(s) Contracts. If required by Bank, copies of
all contracts, subcontracts and material
supply agreements which relate to the
construction of the Building and the
Improvements, in form and substance
satisfactory to the Bank.
(t) Zoning Certificate. Proof satisfactory to
Bank that the Land is zoned to permit
construction of the Building and
Improvements in accordance with the plans
and use of the Building and Improvements
for their intended purpose.
(u) Execution of Co-Obligee Riders to Bonds.
Evidence that Bank has been made a co-
obligee with the Developer under the
payment and performance bonds provided by
the parties with whom Developer has
contracted under the Construction
Documents.
(v) Consents to Assignments of Construction
Documents. The Bank shall have received
consents to the assignment of the
Construction Documents under the Security
Agreement to be executed by Developer, in
form and substance satisfactory to the
Bank.
(w) Good Standing Certificates. The Bank
shall have received Certificates of Good
Standing of the Borrower and of Guarantor
issued by the Louisiana Secretary of State
(and from the Secretary of State of
Delaware, with respect to Guarantor).
(x) Corporate Certificates. The Bank shall
have received a certificate of the
secretaries of each of the Borrower and
the Guarantor (i) setting forth the
resolutions of their respective Boards of
Directors in form and substance
satisfactory to the Bank with respect to
the authorization of all Loan Documents to
which each of them is a party, and all
agreements and instruments contemplated to
be executed in connection herewith; (ii)
attaching copies of the Articles of
Incorporation and By-laws of each of them;
(iii) stating the federal tax
identification number of each of them; and
(iv) setting forth the officers authorized
to sign such instruments on behalf of each
of them.
(y) Opinions. The Bank shall have received
favorable opinions of counsel for the
Borrower and the Guarantor in form and
substance satisfactory to the Bank and the
Bank's counsel, which opinion will
address, without limitation, the perfected
status of Bank's Liens on the Mortgaged
Property and the collateral affected by
the Security Agreements, the binding
nature and enforceable nature Loan
Documents to which each of them is a
party, and the due authorization and
corporate power of each of them and their
representatives to execute and deliver the
Loan Documents to which each of them is a
party.
4.2 Each Additional Advance. The obligation of
the Bank to make additional Loan is subject to the
satisfaction of each of the following conditions:
(a) Each of the representations and warranties
of the Borrower contained in this
Agreement and of the Guarantor in the
Guaranty shall be true and correct on and
as of the date of such subsequent advance.
(b) At the time of each subsequent advance, no
Default or Event of Default shall have
occurred and be continuing.
(c) There shall have occurred no material
adverse changes, either individually or in
the aggregate, in the assets, liabilities,
financial conditions, business operations,
affairs or circumstances of the Borrower
or of the Guarantor from those reflected
in the most recent financial statements
furnished to the Bank prior to the date of
such Loan, except to the extent that such
changes are permitted by this Agreement.
(d) Bank shall have received a Request for
Advance from the Borrower, together with
all documents to be submitted therewith
under the provisions of SectionE2.10
and/or Section 2.11 hereof.
4.3 Conditions Precedent to Conversion of the Loans
to a Term Loan. The obligation of the Bank to convert the
Loans to a term loan in accordance with the provisions of
Section 2.12 hereof is subject to the satisfaction of each
of the following conditions:
(a) Bank shall have received the executed term
note of the Borrower required by Section
2.12 hereof, resolutions of the Board of
Directors of Borrower authorizing the
execution and delivery of such term note,
and opinions of counsel to Borrower
regarding the due authorization of the
officer of Borrower executing such note and
the binding nature and enforceability of
such promissory note as to Borrower.
(b) Each of the representations and warranties
of the Borrower contained in this Agreement
and of the Guarantor in the Guaranty shall
be true and correct on and as of the date of
such term loan.
(c) At the date of such term loan, no Default or
Event of Default shall have occurred and be
continuing.
(d) There shall have occurred no material
adverse changes, either individually or in
the aggregate, in the assets, liabilities,
financial conditions, business operations,
affairs or circumstances of the Borrower or
of the Guarantor from those reflected in the
most recent financial statements furnished
to the Bank prior to the date of such Loan,
except to the extent that such changes are
permitted by this Agreement.
(e) Bank shall have received a certificate of
occupancy issued by the appropriate
governmental authority consenting to the use
and occupancy of the Building and
Improvements.
(f) Bank shall have received a clear lien and
privilege certificate issued by the Clerk of
Court of Lafayette Parish, Louisiana.
(g) Bank shall have received evidence that
Borrower has obtained a multi-peril hazard
insurance policy for the Building and the
Improvements as required by this Agreement
or as otherwise required by the Bank.
(h) Bank shall have received a final report of
the architect in form and substance
satisfactory to the Bank stating that the
Building and Improvements have been
completed under the Construction Documents
in accordance with the plans and
specifications for the project.
(i) Bank shall have received an update of the
MAI appraisal provided to it prior to the
initial Loan hereunder, based upon the
Building and Improvements as completed, and
the market value of the Land, at such time.
ARTICLE V.
AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any
Loan remains outstanding and unpaid or any other amount is
owing to the Bank hereunder, the Borrower (or Guarantor,
with respect to the financial ratios described in Sections
5.10 through 5.14 hereof) shall:
5.1 Financial Statements. Furnish, or cause to be
furnished, to the Bank:
(a) as soon as available, and in any event
within 90 days after the end of each
fiscal year of the Guarantor, a copy
of the audited financial statements
(consisting of at least a balance sheet
and related statements of income,
retained earnings and changes in
financial condition) of the Guarantor
prepared by a certified public
accountant acceptable to Bank in
conformity with generally accepted
accounting principles applied on a
basis consistent with that of the
preceding fiscal year, and certified
by a proper financial officer of the
Guarantor; and
(b) as soon as available, and in any event
within forty-five (45) days of the end of
each fiscal quarter of each fiscal year of
the Guarantor during the term hereof,
interim financial statements of the
Guarantor prepared and certified by a
proper financial officer of the Guarantor
prepared similarly to the annual
statements referred to in clause (a) above
(subject to normal year-end adjustments)
and consisting of at least a balance sheet
as at the close of such period and profit
and loss statement for the quarter then
ended and for the period from the
beginning of such fiscal year to the close
of such period.
The Borrower covenants and agrees that all financial
statements described above shall be complete and correct in
all material respects and shall be prepared in reasonable
detail and in accordance with procedures applied
consistently throughout the periods reflected therein.
5.2 Certificates; Other Information. Furnish to
Bank:
(a) concurrently with the delivery of the
financial statements referred to in
subsection 5.1(a), a certificate of
the Borrower stating that in making the
examination necessary to certify the
correctness thereof no knowledge was
obtained of any Default or Event of Default
except as specified in such certificate;
(b) promptly, such additional financial and
other information as the Bank may from
time to time reasonably request.
5.3 Performance of Contractual Obligations.
Perform in all material respects all of its Contractual
Obligations under the terms of any agreement to which it is
bound or to which it is a party, and pay, discharge or
otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, all its obligations
of whatever nature, except when the amount or validity
thereof is currently being contested in good faith by
appropriate proceedings and reserves with respect thereto
have been provided on the books of the Borrower in amounts
satisfactory to Bank.
5.4 Conduct of Business and Maintenance of
Existence. Continue its existence and good standing in each
jurisdiction in which it is required to be qualified,
continue to engage in business of the same general type as
now conducted by it and take all reasonable action to
maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of his business; comply with
all Contractual Obligations and Requirements of Law except
to the extent that failure to comply therewith would not, in
the aggregate, have a Material Adverse Effect.
5.5 Insurance. Maintain, or cause to be
maintained, with financially sound and reputable insurance
companies licensed to do business in the State of Louisiana,
the following insurances:
(a) Builder's risk and/or multi-peril hazard
insurance, covering against loss by fire,
theft, vandalism, malicious mischief,
explosion, windstorm, collapse and
extended coverage, for 100% replacement
cost, with an endorsement naming the Bank
as mortgage loss payee;
(b) If the Mortgaged Property is located
within either flood zone "A" or "B," flood
insurance in the amount equal to the
replacement costs of the improvements or
the maximum amount of flood insurance
available, whichever is lesser, with an
endorsement naming the Bank as mortgage
loss payee;
(c) comprehensive general liability naming the
Bank as additional insured, with a minimum
$5,000,000.00 combined single limit bodily
injury/property damage liability; and
(d) worker's compensation and general
liability insurance for all contractors.
Each policy shall contain a 30-day written notice to the
Bank in the event of cancellation, non-renewal or material
change.
5.6 Inspection of Property; Books and Records;
Discussions. Keep proper books of records and account in
which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and
activities; and permit representatives of the Bank to visit
and inspect any of its properties and examine and make
abstracts from any of its books and records at any
reasonable time during normal business hours, and as often
as may reasonably be desired, and to discuss the business,
operations, properties and financial and other condition of
the Borrower with officers and employees of the Borrower and
with the Persons conducting the annual review thereof.
5.7 Maintenance of Liens of the Security
Documents. Promptly, upon the reasonable request of the
Bank, at the Borrower's expense, execute, acknowledge and
deliver, or cause the execution, acknowledgement and
delivery of, and thereafter register, file or record, or
cause to be registered, filed or recorded, in an appropriate
governmental office, any document or instrument supplemental
to or confirmatory of the Security Documents or otherwise
deemed by the Bank necessary or desirable for the continued
validity, perfection and priority of the Liens on the
collateral covered thereby.
5.8 Notices. Promptly give notice to the Bank:
(a) of the occurrence of any Default or Event
of Default;
(b) of any (i) default or event of default
under any Contractual Obligation of the
Borrower, or (ii) litigation,
investigation or proceeding which may
exist at any time between the Borrower and
any Governmental Authority, which in the
case of either clause (i) or (ii) above,
if not cured or if adversely determined,
as the case may be, would have a Material
Adverse Effect;
(c) of any litigation or proceeding affecting
the Borrower in which the amount involved
is $100,000.00 or more and not covered by
insurance or in which injunctive or
similar relief is sought;
(d) of any Environmental Complaint affecting
the Borrower, any Mortgaged Property or
any part thereof or the operations of the
Borrower or any other Person on or in
connection with any Mortgaged Property or
any part thereof and any notice from any
Person of (i)Eany violation or alleged
violation of any Relevant Environmental
Law relating to any Mortgaged Property or
any part thereof or any activity at any
time conducted on the Mortgaged Property
or (ii) the occurrence of any release,
spill or discharge in a quantity that is
reportable under any Relevant
Environmental Law or (iii) the
commencement of any clean-up pursuant to
or in accordance with any Relevant
Environmental Law of any Hazardous Waste
on or about the Mortgaged Property or any
part thereof;
(e) of (i) the incurrence of any Lien on, or
claim asserted against any of the
collateral security in the Security
Documents or (ii) the occurrence of any
other event which could reasonably be
expected to have a Material Adverse
Effect;
(f) of any default by any party under the
terms of the Purchase Agreement or the
Construction Documents; and
(g) of a material adverse change in the
business, operations, property or
financial or other condition of the
Borrower or of the Guarantor.
Each notice pursuant to this Section 5.8 shall be
accompanied by a statement of the Borrower setting forth
details of the occurrence referred to therein and stating
what action the Borrower proposes to take with respect
thereto.
5.9 Hazardous Materials.
(a) Do the following:
(1) comply and cause the Mortgaged
Property and every part thereof
and every interest therein and
all operations and activities
conducted thereon to comply with
any and all Relevant Environmental
Laws, the noncompliance with which
could give rise to any remedial
obligation with any Relevant
Environmental Laws or could have
a Material Adverse Effect;
(2) take prompt action to remedy or
remediation, whether or not under
order or agreement to do so, the
occurrence or presence or alleged or
possible or threatened occurrence or
presence of any Environmental
Discharges and Hazardous Materials
to the extent such action is
required under any Relevant
Environmental Laws; and
(3) pay immediately when due the costs
of any such compliance and
remediation; and
(4) keep the Mortgaged Property free of
any Lien imposed as a result of any
Environmental Complaint or pursuant
to any Relevant Environmental Laws.
(b) Handle and dispose of all Hazardous
Materials as may, from time to time, be located on the
Mortgaged Property, in compliance with all Relevant
Environmental Laws and in a commercially reasonable manner.
(c) Defend, indemnify and hold the Bank
harmless from and against all liability, penalties, loss,
costs, damage, claims, causes of action and expense,
including, without limitation,
(1) consequential, punitive and exemplary
damages and injunctive or similar
relief;
(2) reasonable attorneys' fees and
disbursements and costs;
(3) reasonable fees, expenses and
disbursements of expert witnesses,
consultants, advisers and other
Persons employed or engaged by or on
behalf of the Bank in connection with
any claim or response or other matter
which is the subject of this
indemnity; and
(4) costs and expenses incurred in
connection with any remediation,
whether or not under order or
agreement, of any Hazardous Materials
or Environmental Discharges on or
about the Mortgaged Property or any
part thereof;
which the Bank may suffer or sustain by reason of or arising
from or in connection with:
(1) the imposition or recording of a Lien
relating to Relevant Environmental
Laws against the Mortgaged Property or
any part thereof or any interest
therein by any Governmental Authority;
(2) any representation or warranty
contained herein relating to Relevant
Environmental Laws being incomplete
or untrue or incorrect or misleading
in any respect on or as of the date
the same is made or deemed made;
(3) any breach or failure of performance
by the Borrower of any covenant
contained in this Section;
(4) claims, including, without limitation,
any claim for consequential, punitive
or exemplary damages or injunctive or
similar relief, of any Person with
respect to violation or alleged
violations of Relevant Environmental
Laws relating to the Mortgaged
Property or any part thereof or any
interest therein or any operation or
activity conducted thereon;
(5) any Environmental Complaint and any
claims alleged or asserted therein;
and
(6) costs and expenses incurred by the
Bank in connection with:
i) removal of any Lien of the kind
described in clause (1) of this
Section;
ii) any remedy or remediation,
whether or not under order or
agreement, of the occurrence or
presence of or exposure to or
alleged or possible or threatened
occurrence or presence of or
exposure to Environmental
Discharges or Hazardous
Materials;
iii) compliance, whether or not under
order or agreement, with any
Relevant Environmental Laws; and
iv) satisfaction or settlement of any
claims alleged or asserted in any
Environmental Complaint.
The obligations and indemnification in this paragraph shall
survive payment and performance of the obligations secured
by the Security Documents and release of the Liens of the
Security Documents, shall be without limitation of time and
shall be binding upon the Borrower's successors and assigns;
provided, however, the indemnity contained herein shall not
be applicable to any contamination or Environmental
Discharge that originates (or which results from releases or
discharges of Hazardous Materials) prior to the Borrower's
acquisition or occupancy of the Mortgaged Property or that
originates (or which results from releases or discharges of
Hazardous Materials) after the Bank has foreclosed upon the
Mortgaged Property.
5.10 Taxes. Promptly pay all taxes, assessments
and other charges payable by the Borrower when due, the
failure to pay which would have a Material Adverse Effect,
other than those not yet delinquent or that are being
contested in good faith by appropriate proceedings and for
which adequate reserves or security have been provided.
5.11 Debt Service Coverage Ratio. Guarantor shall
maintain a Debt Service Coverage Ratio of not less than 1.25
to 1.00 for each twelve-month period ending as of the close
of each fiscal quarter of Guarantor during the term of this
Agreement.
5.12 Tangible Net Worth. Guarantor shall maintain
a Tangible Net Worth of not less than $58,000,000.00 as of
the close of each fiscal quarter of Guarantor during the
term of this Agreement.
5.13 Ratio of Liabilities to Tangible Net Worth.
Guarantor shall maintain a ratio of total Liabilities to
Tangible Net Worth of less than 1.25 to 1.00 as of the close
of each fiscal quarter of Guarantor during the term of this
Agreement.
5.14 Working Capital. Guarantor shall at all times
during the term of this Agreement maintain Working Capital
of not less than $5,000,000.00.
5.15 Updated Appraisals. The Borrower shall
provide Bank with updated appraisals of the Mortgaged
Property upon the demand of Bank, which Bank reserves the
right to require not more than once every three (3) years.
ARTICLE VI.
NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the
the Notes remain outstanding and unpaid or any other amount
is owing to the Bank hereunder, the Borrower shall not,
directly or indirectly:
6.1 Limitation on Liens. Create, incur, assume or
suffer to exist any Lien upon the Mortgaged Property, except
for Permitted Liens.
6.2 Limitations of Fundamental Changes. Convey,
sell, lease, assign, transfer or otherwise dispose of, all
or substantially all of its property, business or assets, or
make any material change in the present method of conducting
business.
6.3 Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase,
sale, lease or exchange of property or the rendering of any
service, with any Affiliate unless such transactions are
otherwise permitted under this Agreement, are in the
ordinary course of the Borrower's business and are upon fair
and reasonable terms no less favorable to the Borrower than
it would obtain in a comparable arm's length transaction
with a Person not an Affiliate. For purposes hereof,
consolidated wholly-owned subsidiaries of Guarantor shall
not be considered Affiliates of Borrower.
6.4 Hazardous Materials.
(a) Use or permit or suffer use of the
Mortgaged Property, or any part thereof or any interest
therein or conduct any activity or operations thereon in any
manner which:
(1) would involve or result in occurrence
or presence of or exposure to
Hazardous Materials or toxic
substances at, upon, under, across or
within the Facilities or the Mortgaged
Property or any part thereof, unless
strictly in compliance with Relevant
Environmental Laws, the noncompliance
with which could give rise to any
remedial obligation under any
Relevant Environmental Laws or could
have a Material Adverse Effect;
(2) would violate, or support a cause of
action or claim for injunctive relief
under, any Relevant Environmental
Laws; or
(3) would or might result in the
occurrence of any Environmental
Discharge or other emission in such an
amount that a permit would be required
under any Requirement of Law, unless
such permit has been obtained and is
in full force and effect and such
Environmental Discharge or emission is
in accordance with such permit.
(b) Transfer or permit or suffer any
transfer of the Mortgaged Property or any part thereof or
any interest therein or of the interest of any tenant or
lessee under any lease or of any Person entitled to operate
or manage such property, unless such transfer is made in
strict compliance with all Relevant Environmental Laws.
6.5 Ownership. Transfer any interest in the
Mortgaged Property.
6.6 Principal Office, Etc. Change its name,
principal office, chief executive office or principal place
of business, or his taxpayer identification number, without
giving the Bank at least sixty (60) days prior written
notice of such change, and shall have taken such action as
the Bank deems necessary to continue the perfection of the
Liens securing payment of the Obligations.
6.7 Amendments to Purchase Agreement. Enter into
or agree to enter into any material modification of the
Purchase Agreement without the prior written consent of the
Bank.
ARTICLE VII.
EVENTS OF DEFAULT
Upon the occurrence of any of the following
events:
(a) The Borrower shall fail to pay any
principal or interest on the Note
when due in accordance with the terms
thereof, or any other Obligations when
due, and such failure shall continue
unremedied for ten (10) consecutive
days after such due date;
(b) Any representation or warranty contained
herein or any representation or warranty
made or deemed made by the Borrower
hereunder or by the Borrower or either of
the Developer or the Guarantor in the
other Loan Documents to which they are a
party or which is contained in any
certificate, document or financial or
other statement furnished at any time
under or in connection with this Agreement
or any such other Loan Document shall
prove to have been incorrect in any
material respect on or as of the date made
or deemed made; or
(c) The Borrower shall default in the
observance or performance of any covenant,
or agreement contained herein and such
default shall continue unremedied for
thirty (30) consecutive days after receipt
by the Borrower via certified mail of a
notice to cure said default; or
(d) The Borrower shall default in the
observance or performance of any covenant
or agreement contained in any Loan
Document to which it is a party, and such
default shall continue unremedied for
thirty (30) consecutive days after receipt
by the Borrower via certified mail of a
notice to cure said default; or
(e) (i) Any of the Security Documents shall
cease, for any reason, to be in full force
and effect, or the Borrower shall so
assert or (ii) the security interests
created by the Security Documents shall
cease to be enforceable and of the same
effect and priority purported to be
created thereby; or
(f) The occurrence of an Event of Default
under any of the Loan Documents; or
(g) The Borrower or the Guarantor shall (i)
default in any payment of principal of or
interest of any Indebtedness or in the
payment of any Guarantee Obligation, in
either case where the principal amount
thereof exceeds $100,000.00, beyond the
period of grace, if any, provided in the
instrument or agreement under which such
Indebtedness or Guarantee Obligation was
created; or (ii) default in the observance
or performance of any other agreement or
condition relating to any such
Indebtedness or Guarantee Obligation or
contained in any instrument or agreement
evidencing, securing or relating thereto,
or any other event shall occur or
condition exist, the effect of which
default or other event or condition is to
cause, or to permit the holder or holders
of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation
(or a trustee or agent on behalf of such
holder or holders or beneficiary or
beneficiaries) (in either case where the
principal amount thereof exceeds
$100,000.00) to cause, with the giving of
notice if required, such Indebtedness to
become due prior to its stated maturity or
such Guarantee Obligation to become
payable; or
(h) The Borrower or the Guarantor shall
commence any case, proceeding or other
action (A)Eunder any existing or future
law of any jurisdiction, domestic or
foreign, relating to bankruptcy,
insolvency, reorganization or relief of
debtors, seeking to have an order for
relief entered with respect to it, or
seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization,
arrangement, adjustment, winding-up,
liquidation, dissolution, composition or
other relief with respect to it or its
debts, or (B) seeking appointment of a
receiver, trustee, custodian or other
similar official for it or for all or any
substantial part of its assets, or the
Borrower or the Guarantor shall make a
general assignment for the benefit of its
creditors; or (ii) there shall be
commenced against the Borrower or the
Guarantor, in any case, proceeding or
other action of a nature referred to in
clause (i) above which (A) results in the
entry of an order for relief or any such
adjudication or appointment or (B)Eremains
undismissed, undischarged or unbonded for
a period of 60 days; or (iii) there shall
be commenced against the Borrower or the
Guarantor, any case, proceeding or other
action seeking issuance of a warrant of
attachment, execution, distraint or
similar process against all or any
substantial part of its assets which
results in the entry of an order for any
such relief which shall not have been
vacated, discharged, or stayed or bonded
pending appeal within 60 days from the
entry thereof; or (iv) the Borrower or the
Guarantor shall take any action in
furtherance of, or indicating its consent
to, approval of, or acquiescence in, any
of the acts set forth in clause (i), (ii),
or (iii) above; or (v) the Borrower or the
Guarantor shall generally not, or shall be
unable to, or shall admit in writing its
inability to, pay its debts as they become
due; or
(i) One or more judgments or decrees shall be
entered against the Borrower or the
Guarantor involving in the aggregate a
liability (not paid or fully covered by
insurance) of $100,000.00 or more, and all
such judgments or decrees shall not have
been vacated, discharged, stayed or bonded
pending appeal within 30 days from the
entry thereof; or
(j) The occurrence of any of the following
with respect to the Borrower or the
Guarantor: death (if an individual), or
dissolution or cessation of business (if a
partnership, limited liability company,
corporation or other organization); or
(k) The occurrence of any event which results
in a Material Adverse Change; or
(l) The occurrence of any material default
under the Purchase Agreement or the
Construction Documents;
then, and in any such event, (A) if such event is an Event
of Default specified in Section (h) above, automatically the
Bank shall have no further obligation to make Loans to the
Borrower hereunder or to convert such Loans to a term loan,
and all amounts owing under this Agreement and the Note
shall immediately become due and payable, and (B) if such
event is any other Event of Default, any or all of the
following actions may be taken: (i) the Bank may, by notice
of default to the Borrower, immediately cease making any
Loans to the Borrower, and declare the Loans hereunder (with
accrued interest thereon) and all other amounts owing under
this Agreement and the Note to be due and payable forthwith,
whereupon the same shall immediately become due and payable;
(ii) the Bank may, but shall have no obligation to, perform
any covenant or agreement of Borrower hereunder or under any
of the Security Documents and any amounts expended by Bank
shall constitute additional amounts secured by the Security
Documents; and (iii) the Bank may exercise all rights and
remedies granted it under the Loan Documents. Presentment,
demand, and protest are hereby expressly waived by the
Borrower. Notwithstanding anything contained herein to the
contrary, in the event the Borrower shall have received a
notice of default under subsections (c) and/or (d) three (3)
times in any calendar year, an Event of Default hereunder
may thereafter occur in such calendar year under any of
subsections (c) or (d) without the requirement of any
passage of time or giving of notice.
ARTICLE VIII.
MISCELLANEOUS
8.1 Amendments and Waivers. Neither this
Agreement, the Note or any other Loan Document, nor any
terms hereof of thereof may be changed, waived, discharged
or terminated unless such change, waiver, discharge or
termination is in writing signed by the Borrower and the
Bank.
8.2 Notices. All notices, requests and demands to
or upon the respective parties hereto to be effective shall
be in writing (including by telegraph or telefax), and,
unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when delivered by hand, or
five days after being deposited in the mail, postage
prepaid, or, in the case of telegraphic notice, when
delivered to the telegraph company, or, in the case of
telefax notice, when sent, addressed as follows in the case
of the Borrower and the Bank or to such other address as may
be hereafter notified by the respective parties hereto:
The Borrower:
SOLOCO, Inc.
3850 N. Causeway Blvd.
Suite 1770
Metairie, LA 70002
Fax: (504) 838-9506
with a copy to:
Newpark Resources, Inc.
3850 N. Causeway Blvd., Suite 1770
Metairie, LA 70002
Attn: Mr. Matthew W. Hardey
Fax: (504) 838-9506
The Bank:
Hibernia National Bank
313 Carondelet Street
P.O. Box 61540
New Orleans, LA 70161
Attn: Mr. S. John Castellano
Fax: (504) 533-2060
8.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the
Bank, any right, remedy, power or privilege hereunder or
under the Loan Documents, shall operate as a waiver thereof;
nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude
any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided or provided
in the Loan Documents are cumulative and not exclusive of
any rights, remedies, powers and privileges provided by law.
8.4 Survival of Representations and Warranties.
All representations and warranties made hereunder, in the
other Loan Documents and in any document, certificate or
statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this
Agreement and the Notes.
8.5 Payment of Expenses and Taxes. The Borrower
agrees (a) to pay or reimburse the Bank for all its out-of-
pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any
amendment, supplement or modification to, this Agreement,
the Note and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and
the consummation of the transactions contemplated hereby and
thereby, including, without limitation, inspection fees,
title insurance premiums, legal fees, brokerage fees,
appraisal fees and travel expenses, (b) to pay or reimburse
the Bank for all its costs and expenses incurred in
connection with the enforcement or preservation of any
rights under this Agreement, the Note and the other Loan
Documents, including, without limitation, reasonable fees
and disbursements of counsel to the Bank and (c) to pay,
indemnify, and hold the Bank harmless from, any and all
recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, which may be payable or
determined to be payable in connection with the execution
and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in
respect of, this Agreement, the Note and any such other
documents, and (d) to pay, indemnify, and hold the Bank
harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this
Agreement, the Note and any other Loan Documents (all the
foregoing, collectively, the "indemnified liabilities").
The agreements in this subsection shall survive repayment of
the Notes and all other amounts payable hereunder.
8.6 Security Interest and Right of Set-Off.
Borrower hereby grants Bank a continuing security interest
in, as well as the right to set-off the Obligations of
Borrower against, all funds which Borrower may maintain on
deposit with Bank (with the exception of funds deposited in
Borrower's accounts in trust for third parties of funds
deposited in pension accounts, IRA's, Keogh accounts an All
Saver Certificates), and Bank shall have a Lien upon and a
security interest in all property of Borrower in Bank's
possession or control which shall secure all such
Obligations.
8.7 Invalid Provisions. If any provision of the
Loan Document is held to be invalid, illegal or
unenforceable under present or future laws during the terms
of this Agreement, such provision shall be fully severable;
such Loan Document shall be construed and enforced as if
such invalid, illegal or unenforceable provision had never
comprised a part of such Loan Document; and the remaining
provisions of such Loan Document shall remain in full force
and effect and shall not be affected by the invalid, illegal
or unenforceable provision or by its severance from such
Loan Document.
8.8 Further Assurances. At any time and from time
to time upon the written request of the Bank, and at the
sole expense of the Borrower, the Borrower shall promptly
and duly execute and deliver such further instruments and
documents and take such further action as the Bank may
reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and the Loan
Documents and of the rights and powers herein and therein
granted.
8.9 Inspections. Borrower hereby authorizes the
Bank, or any agent, officer, employee or representative of
the Bank to enter upon the Mortgaged Property to make
inspections of the Building, Improvements, materials, plans
and specifications, shop drawings, workmanship and
construction of the Building and Improvements Improvements
or to enter into possession of the Mortgaged Property upon
any Default or Event of Default and perform any work
necessary or desirable to complete the Improvements and to
take all other action in connection therewith. The sole
purpose of such inspections is to obtain information and to
afford the Bank the opportunity to:
(a) verify whether any Loans the Bank is
obligated to make under this Agreement are
due, and the correct amount of such
advances;
(b) determine whether there has been or may be
any Default or Event of Default of the
Obligations of Borrower under this
Agreement; and
(c) take any necessary or appropriate action
to protect and preserve the Bank's
security for the Loans.
None of the aforesaid actions by the Bank, or any agent,
officer, employee or representative of the Bank, shall be or
may be construed in such a manner as to impose any duty or
obligation whatsoever on the Bank, or any agent, officer,
employee or representative of the Bank, to protect or
represent any owner, borrower, contractor, surety, or any
other person whatsoever and shall not be considered or
construed as having made any warranty whatsoever, whether
express or implied, as to the adequacy, quality of fitness
or purpose of any physical conditions, materials,
workmanship, plans, specifications, drawings or other
requirements pertaining to the construction of the Building
and Improvements, or whether any such physical conditions,
materials or workmanship comply with any plans,
specifications, drawings, ordinances, statutes, or other
governmental requirements pertaining to the property. Bank
shall have no liability, obligation or responsibility
whatsoever with respect to the construction of the Building
and Improvements except to advance the Loans pursuant to
this Agreement. Bank shall not be obligated to inspect the
Mortgaged Property or the construction of the Mortgaged
Property, nor be liable for the performance or Default of
Event of Default of Borrower, any architect, contractor,
subcontractor or materialmen, or any other party, or for any
failure to construct, complete, protect, or insure the
Building and Improvements, or for the payment of costs of
labor, materials, or services supplied for the Improvements,
or for the performance of any obligation of Borrower
whatsoever. Nothing, including without limitation, any
advance or acceptance of any document or instrument, shall
be construed as a representation or warranty, express or
implied, to any party by Bank.
8.10 Final Agreement. This Agreement, the Note and
the other Loan Documents embody the entire and final
agreement between the parties with respect to the
transactions contemplated hereby, and may not be
contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties and supersedes all
prior agreements and understandings, if any, related to the
subject matter hereof and thereof. There are no oral
agreements between the parties.
8.11 Successors and Assigns. This Agreement shall
be binding upon and inure to the benefit of the Borrower,
the Bank, all future holders of the Notes and their
respective successors and assigns.
8.12 GOVERNING LAW. THIS AGREEMENT AND THE NOTE
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT AND THE NOTE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
LOUISIANA. BORROWER AND BANK HEREBY WAIVE THE RIGHT TO ANY
JURY TRIAL IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY EITHER OF THEM AGAINST THE OTHER.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered in
New Orleans, Louisiana by their proper and duly authorized
officers as of the day and year first above written.
SOLOCO, INC.
By:_________________________
Title:______________________
HIBERNIA NATIONAL BANK
By:_________________________
Title:______________________