LOAN AGREEMENT
THIS AGREEMENT, made and entered into this day of ,
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1996, by and between UNITED RESOURCES, INC., an Oregon corporation, hereinafter
called "Lender"; and , doing business as Thriftway
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Division, jointly and severally, hereinafter called "Borrower."
W I T N E S S E T H :
WHEREAS, the Borrower has made application to the Lender for a loan in the
sum of for the purpose of financing the purchase
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of merchandise inventory, fixtures, trade fixtures, and equipment located at
, Portland, Multnomah County, Oregon.
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NOW, THEREFORE, it is mutually agreed as follows:
1. Loan. Subject to the terms and conditions stated, the Lender shall loan
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to the Borrower the total sum of as evidenced by
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Promissory Notes in the form of Exhibits A and B attached hereto.
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Further, Borrower shall execute a furniture, fixture, and equipment lease
in the amount of , with Lender, simultaneously with these
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documents.
2. Repayment. Said loans are repayable in accordance with the terms and
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conditions of the Notes as the same may be revised or modified from time to time
by Lender in its sole discretion.
The Lender is expressly granted the right to call said Note, in whole or in
part, upon 180 days' written notice to the Borrower.
The monthly installment payments shall first be applied to the interest
accrued on the full amount of the indebtedness and secondly upon the principal
balance owing.
3. Security. Payment of the Note shall be secured as follows:
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(a) A Security Agreement in substantially the form of Exhibit C
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attached hereto, from the Borrower to the Lender, covering all of the present
and hereafter acquired merchandise inventory, fixtures, trade fixtures,
equipment, and proceeds therefrom of Borrower, located without limitation at
, Portland, Multnomah County, Oregon, or used in
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connection with the business there located.
(b) The Borrower shall obtain and maintain in full force and effect
for the length of the loan an irrevocable collateral assignment to United
Grocers, Inc. and/or its subsidiaries and/or its assignees on life policy(s) on
the lives of for the total amount of the
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loan and equipment lease, .
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(c) Inventory at , Portland, Multnomah
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County, Oregon, shall be maintained at all times at a level of not less than
$625,000.00 cost to Borrower.
(d) Guaranty, guaranteed by
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and , which is attached hereto, marked as Exhibit E, and by this
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reference incorporated herein.
4. Use of Proceeds. The net proceeds of all sums loaned hereunder shall be
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used by the Borrower to finance the purchase of merchandise inventory, trade
fixtures, fixtures and equipment for that certain supermarket business operated
by the Borrower located at , Portland, Multnomah County,
Oregon. --------------------
5. Conditions Precedent. The Lender shall not be obligated to lend any
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monies hereunder until it shall have received the following:
(a) The Borrower shall have tendered delivery to Lender of the Notes
and equipment lease described in Paragraph 1, duly executed by
.
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(b) The Borrower shall have given to the Lender a Security Agreement,
as described in Paragraph 3(a), covering all present and hereafter acquired
merchandise inventory, trade fixtures, fixtures, equipment, and proceeds
therefrom, located without limitation at , Portland, Multnomah
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County, Oregon, or used in connection with the business there located.
(c) The Borrower shall have tendered delivery to the Lender within 30
days of the date of this Agreement a certificate(s) of life insurance to equal
the amount of the loan, as described in Paragraph 3(b).
(d) The Borrower shall have duly executed and given to the Lender an
Oregon Uniform Commercial Code standard form Financing Statement (UCC 1) in the
form of Exhibit D attached hereto.
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(e) Guaranty in the form of Exhibit E, which is attached hereto and by
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this reference incorporated herein.
6. Warranties. The Borrower represents and warrants as follows:
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(a) All statements contained in the loan application and exhibits
attached thereto heretofore submitted to the Lender are true, fairly and
accurately represent the financial condition of the Borrower.
(b) There are no actions, suits, or proceedings pending or, as far as
the Borrower is advised, threatened against or affecting the Borrower, or either
of them, before any court or administrative officer or agency which might result
in any material adverse change in the business or property of Borrower or in the
properties herein described as being owned by the Borrower.
LOAN AGREEMENT - 2
7. Covenants. So long as any part of the Note remains unpaid, the Borrower
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covenants as follows:
(a) The Borrower will not assign, mortgage, or pledge any part of the
assets of Borrower or incur any further indebtedness except for short-term
credit for the purchase of goods and services on open account.
(b) The Borrower shall furnish to Lender quarterly financial
statements consisting of a balance sheet and an operating statement in a form
and by an accountant satisfactory to the Lender on . See
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default provision in paragraph 10(g).
(c) The Lender, acting through its officers, agents, attorneys, and
accountants, including an independent certified public accountant hired by it,
shall have the right to examine the books of the Borrower at all reasonable
times.
8. Insurance. The Borrower shall maintain standard form fire, extended
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coverage, vandalism and malicious mischief insurance, insuring the merchandise
inventory, fixtures, trade fixtures and equipment at
, Portland, Multnomah County, Oregon, to at
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least the actual cash value, with loss payable clauses in favor of the Lender
and its assignees.
9. Loan Costs. The Borrower agrees to pay a loan application fee of
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$11,200.00, together with any and all costs incident to filing Uniform
Commercial Code Financing Statements.
10. Events of Default. Upon occurrence of any of the following specified
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events of default:
(a) Any material representation or warranty made by the Borrower
herein, or pursuant to, or in writing in connection with the making of this
Agreement, or the loan hereunder, shall prove to have been untrue in any
material respect when made; or
(b) The Borrower shall default in the due and punctual payment of
either principal or interest on the Note; or
(c) The Borrower shall default in due performance or observance of any
term, covenant, or agreement contained in Paragraphs 7, 8, and 9 of this
Agreement; or
(d) The Borrower shall default in due performance or observance of any
other agreement contained herein, and such default shall continue uncured for a
period of ten (10) days after written notice to the Borrower from the holder of
the Note; or
(e) Any obligation of the Borrower for the payment of borrowed money
is not paid when due, whether at any expressed due date or at any accelerated
maturity; or
LOAN AGREEMENT - 3
(f) The Borrower shall make any assignment for the benefit of
creditors, or shall be adjudged bankrupt, or any proceedings shall be commenced
by the Borrower under any bankruptcy reorganization, arrangement, insolvency,
readjustment of debt or liquidation law or statute of the federal or any state
government, whether now or hereafter in effect, or any such proceeding shall be
instituted against the Borrower and an order approving the petition is entered,
or such proceedings shall remain undismissed for a period of ten (10) days, or
the Borrower by any action shall indicate its approval or consent to or
acquiescence in any such proceedings or in the appointment of a trustee or
receiver of the Borrower, or of all or substantially all of the assets of the
Borrower, or any such trustee or receiver shall not be discharged within the
period of ninety (90) days after the appointment thereof;
(g) In the event the financial statement as hereinafter defined is not
received, a penalty will be assessed by increasing the interest rate being
charged under this note by an additional 4.0 percent APR. Such penalty will
continue to be assessed until the financial statements are received as required.
THEN, and in any such event, if any such default shall then continue, the
Lender may by written notice to the Borrower, addressed to it at its principal
place of business or at such other address as the Borrower may hereafter
designate to the Lender in writing, declare the principal and interest accrued
on the Note to be due and payable, which principal and interest shall thereupon
forthwith be due and payable, without presentment, demand, protest, or other
notice of any kind, all of which are hereby expressly waived. The Borrower
agrees to pay reasonable attorneys' fees incurred in enforcing the Lender's
rights and remedies after default under this Agreement, including any fees
incurred on appeal.
11. Waiver. Neither the failure nor any delay on the part of the Lender to
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exercise any right, power, or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power, or
privilege preclude any other or further exercise thereof, or the exercise of any
right, power or privilege.
12. Benefit. This Agreement shall be binding upon and inure to the benefit
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of the Lender and its successors and assigns.
13. Construction. This agreement shall be governed by and construed in
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accordance with the laws of the State of Oregon.
LOAN AGREEMENT - 4
IN WITNESS WHEREOF the parties have executed this Agreement the day and
year first above written.
BORROWERS:
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By
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By
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LENDER: UNITED RESOURCES, INC.
By
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LOAN AGREEMENT - 5
EXHIBITS TO THE LOAN AGREEMENT
Exhibit A: Promissory Note - $250,000.00
Exhibit B: Promissory Note - $400,000.00
Exhibit C: Security Agreement
Exhibit D: UCC Financing Statement
Exhibit E: Guaranty
LOAN AGREEMENT - 6
