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EXHIBIT 10.49
CONSTRUCTION LOAN AGREEMENT
(St. Xxxxxxx Apartments, Orlando, Florida)
THIS CONSTRUCTION LOAN AGREEMENT ("this Agreement") is made
as of the 23rd day of August, 1995 by and between USF&G/XXXX XXXXX
REALTY PARTNERS LIMITED PARTNERSHIP, a Maryland limited
partnership, having its principal place of business at
000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Borrower"),
as borrower, and USF&G Realty Partners, Inc., a Maryland corporation
(the "Lender"), as lender.
Introduction
Borrower owns the improved real property located in Orange
County, Florida, commonly known as St. Xxxxxxx Apartments at
Westwood, consisting of approximately 14.5519 acres of land, more
particularly described in Exhibit A to this Agreement, located on
Westwood Boulevard in the City of Orlando, Orange County,
Florida, with the 16 two- and three-story buildings located
thereon containing 259 apartment units with not less than 216,560
aggregate net rentable square feet, and with 449 outside parking
spaces (the "Real Property").
Lender has made a loan to Borrower (the "St. Xxxxxxx Repair
Loan") for certain repairs to be made to the buildings located on
the Real Property, as more particularly described in Exhibit B to
this Agreement (the "Repairs"). To evidence the terms of
repayment of the St. Xxxxxxx Repair Loan, Borrower has executed
and delivered to Lender Borrower's $3,500,000 Promissory Note
dated this date (the "Note"). This Agreement and the Note are
together called the "Loan Documents."
As provided by this Agreement, Lender will disburse the
proceeds of the Note to Borrower, and Borrower will use such
proceeds to perform the Repairs.
Agreement
THEREFORE, in consideration of the foregoing and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
Repairs to the Real Property.
(a) Borrower shall perform the Repairs on the Real
Property as provided by the AIA A111 Standard Form of Agreement
Between Owner and Contractor dated this date by and between
Borrower, as owner, and Xxxxxxx Enterprises, Inc., as contractor,
a copy of which is attached to this Agreement as Exhibit B.
(b) Neither the acceptance nor approval by Lender of
any construction plans for the Repairs, nor any subsequent
inspections or approvals of the Real Property during construction
shall constitute a warranty or representation by Lender as to the
technical sufficiency, or adequacy or safety of the improvements
or any component parts thereof, nor shall such approvals or
inspections constitute such a warranty or representation as to
the subsoil conditions involved in the Real Property or any other
physical condition or feature pertaining to the Real Property.
Payments of Costs and Expenses.
Borrower shall pay all costs of performing the Repairs,
including, but not limited to, the fees and expenses of the
Consulting Engineer (defined in Section 4).
Contractors.
If any contractor or supplier of materials contracting
directly with Borrower for the Repairs (a "General Contractor"),
does not proceed diligently with the completion of or fails to
complete such work due to causes within the control of such
General Contractor, after the giving of notice and opportunity to
cure as provided by such General Contractor's contract, Borrower,
upon request by Lender, shall cause another General Contractor
satisfactory to Lender to complete the work. Borrower and such
new General Contractor shall execute a contract reasonably
satisfactory to Lender for the construction of the work.
Borrower shall make no changes in any contract directly between
Borrower and a contractor or supplier of materials (a "General
Contract") or in any major subcontract thereof, other than minor
changes in the field necessary to meet the practicalities of the
circumstances and of which Borrower notifies Lender promptly,
without the prior written consent of Lender.
Consulting Engineer.
Lender has approved Xxxxxxx Gumpertz & Xxxxx, Inc. (the
"Consulting Engineer") to review any construction plans for the
Repairs and to inspect the performance of the Repairs from time
to time, at Borrower's sole cost.
Non-assignability.
Borrower shall not assign this Agreement, or assign,
encumber or hypothecate Borrower's rights to any advances of
proceeds of the St. Xxxxxxx Repair Loan under this Agreement
without the prior written consent of Lender. No right to an
advance hereunder shall be subject to the process of any court
upon legal action by or against Borrower or by or against anyone
claiming through or under Borrower.
Advances.
(a) Lender has retained the proceeds of the Note (the
"Note Funding"), to advance to Borrower on a monthly basis in
connection with the Repairs as provided by Section 1(a). Lender
shall advance the Note Funding for the Repairs in amounts equal
to the lesser of (i) the amounts set forth in the draw schedule
attached as part of Exhibit B to this Agreement (the "Draw
Schedule") for such uses, or (ii) the actual costs incurred by
Borrower for such uses and not paid out of the Recovered Funds
(as defined in the Note), and as further provided by this
Agreement.
(b) Lender shall only make advances of the Note
Funding upon satisfaction of the following conditions precedent:
(i) No Event of Default shall have occurred and be
continuing;
(ii) Receipt by Lender of a request for such
advance in writing and in such detail as Lender shall reasonably
require (a "Draw Request");
(iii) Receipt by Lender of evidence satisfactory
to Lender of the approval, if so required, by all governmental
authorities having jurisdiction over the Real Property and of any
construction plans, as applicable, with respect to the work for
which the advance is requested;
(iv) Receipt by Lender of the Consulting
Engineer's certificate stating that, with respect to the work for
which the advance is requested, such work has been substantially
completed in accordance with any construction plans, this
Agreement and the Draw Schedule, as applicable, all applicable
building codes, laws, statutes and regulations;
(v) Determination by Lender that the amounts
requested to be advanced are not in excess of those provided by
Section 6(a) or Section 7, as applicable, and that the uses of
such funds are as provided thereby; and
(vi) Satisfaction of all conditions precedent to
the commencement of the Repairs, as provided by Section 8.
Draw Procedures.
Subject to compliance by Borrower with all of the terms,
provisions and conditions of this Agreement, all advances of the
Note Funding shall be made as provided by the following
procedures:
(a) Lender may make any or all advances to Borrower
or, at Lender's sole option, jointly to Borrower and any one or
more of the General Contractors or subcontractors thereof. By
making one or more advances directly to Borrower, Lender does not
waive the right at any time or from time to time to make future
advances jointly to Borrower and any one or more of the General
Contractors or subcontractors thereof. Notwithstanding the other
provisions of this Agreement, upon the occurrence of an Event of
Default, Lender may, at its sole option and without liability to
Borrower, make all advances or any advance directly to any
General Contractor or subcontractor thereof or to any combination
of them, and shall pay all loan fees, taxes, appraisals,
inspection fees, recording charges, legal fees and any other
outstanding amounts due, relating to the St. Xxxxxxx Repair Loan
and to the Repairs. Any such advance or payment shall be deemed
to have been made to Borrower or for its account;
(b) Borrower shall submit each Draw Request to Lender
not less than three (3) days before the date on which Borrower
desires such advance, and Lender shall have three (3) days within
which to fund each such Draw Request. Lender shall not make
advances more than once each calendar month;
(c) Lender shall make no advances for (i) materials
which are not physically incorporated into the Real Property,
unless suitably stored on-site as approved by Lender; or (ii)
improvements to the Real Property other than as provided by
Section 1(a);
(e) Lender shall limit the total amount of the Note
Funding advanced at any time to an amount which, when deducted
from $3,500,000.00, leaves a balance to be advanced which is
equal to the cost of completion of the work described in Section
1(a) and shown on any construction plans for the Repairs, all as
determined by Lender and the Consulting Engineer from time to
time; and
(f) Lender shall make no advances of the Note Funding
after September 1, 1997. Lender shall not be obligated to
readvance any portion of the Note Funding after the Borrower has
repaid such portion to Lender, or to advance any portion of the
Note Funding for which all conditions to disbursement, as set
forth in this Agreement, have not been satisfied on or before
September 1, 1997.
Commencement of Work.
The following are conditions precedent to the commencement
of the Repairs:
(a) No Event of Default shall have occurred and be
continuing;
(b) Receipt by Lender of evidence satisfactory to
Lender of the approval, if so required, by all governmental
authorities having jurisdiction over the Real Property, of any
construction plans, as applicable, with respect to such Repairs;
(c) Receipt by Lender of copies of all required
permits by all governmental authorities having jurisdiction over
the Real Property, for the work shown on any construction plans,
as applicable, with respect to such Repairs;
(d) The Consulting Engineer shall have in its
possession a set of any Construction Plans for the Repairs, as
applicable, satisfactory to the Consulting Engineer, the sheets
of which are initialed or signed on behalf of all applicable
General Contractors, Borrower and Lender, or otherwise approved
in writing by such parties; and
(e) Receipt by Lender of all of such items with
respect to all of the Repairs previously commenced on the Real
Property.
Liability of Lender.
(a) Lender shall in no event be responsible or liable
to any person other than Borrower for any advance of or failure
to advance the proceeds of the Note Funding or the Note B Funding
or any part thereof. No General Contractor, subcontractor,
supplier or other person shall have any right or claim against
Lender under this Agreement or the administration thereof.
(b) Lender shall not be liable hereunder for any act
or omission by it, in the absence of gross negligence or fraud.
Lender shall incur no liability to Borrower by acting upon any
certificate or other paper believed by Lender to be genuine and
purporting to be signed by the proper party or with respect to
anything which Lender may do or refrain from doing unless it
amounts to gross negligence or fraud. Lender may consult with
counsel selected by Lender, and any action taken or suffered in
good faith by Lender in accordance with the opinion of such
counsel shall be full justification and protection to Lender.
Costs of Closing and Administration.
Borrower shall pay all actual costs incurred by Lender in
connection with the closing of the St. Xxxxxxx Repair Loan,
including, but not limited to, all of Lender's actual attorneys'
fees. Borrower shall also pay, promptly upon request by Lender,
all actual costs of Lender in administering future advances under
this Agreement or otherwise in connection with the administration
and management of the St. Xxxxxxx Repair Loan, including but not
limited to all actual costs in connection with advances, releases
of the Real Property, bonds, title matters and title insurance,
attorneys fees or any other matter relating to this Agreement or
otherwise relating to the continuing aspect of the St. Xxxxxxx
Repair Loan. No such costs shall be funded out of the Note
Funding.
Representations, Covenants and Warranties.
Each executed Draw Request, and the receipt of the funds
requested thereby, shall constitute an affirmation that the
representations, covenants and warranties of Borrower set forth
herein are true and correct as of the date thereof. Borrower
makes the following representations, covenants and warranties to
and with Lender:
(a) Borrower shall use all advances of the Note
Funding to pay the costs of the Repairs as provided by Section
1(a) and the Draw Schedule, as applicable, including payments of
costs due and payable to all General Contractors and
subcontractors and materials suppliers thereof; and
(b) The Construction Plans have been or will be
approved by all governmental authorities having jurisdiction over
the work shown on such plans, and all necessary building permits
and all other governmental and private authorizations and
approvals have been or will be obtained, as provided by this
Agreement.
Events of Default and Remedies.
The occurrence of one or more of the following events (an
"Event of Default") shall constitute a default under this
Agreement:
(a) If a default has occurred under any term,
condition, covenant, representation or warranty of the Note and
any applicable cure period or grace period thereunder has
expired;
(b) If a default has occurred under any term,
condition, covenant, representation or warranty of this
Agreement, except as otherwise expressly provided in this Section
12, and any applicable cure period or grace period hereunder has
expired;
(c) If Borrower does not perform the Repairs in
substantial compliance with any construction plans therefor
approved by Lender, as applicable (as amended from time to time
with the approval of Lender), and in accordance with all
applicable governmental requirements, or fails promptly to submit
to Lender and to the Consulting Engineer all amendments and
supplements to such construction plans, or in any event fails to
so submit them on or before the next succeeding requisition;
(d) If any court of competent jurisdiction shall sign
an order (i) adjudicating Borrower bankrupt, (ii) appointing a
trustee or receiver of the Real Property or of a substantial part
of the property of Borrower, or (iii) approving a petition for,
or effecting, an arrangement or reorganization in bankruptcy, or
any other judicial modification or alteration of the rights of
Lender or of other creditors of Borrower; or if Borrower shall
(iv) file any petition, (v) consent to any action, or (vi) seek
relief under any laws affecting creditor's rights; or if Borrower
shall make an assignment for the benefit of creditors or shall
admit in writing inability to pay debts generally as they become
due; or
(e) If Borrower fails to pay any sums due and owing
(except sums involved in good faith disputes, for which Borrower
has furnished security satisfactory to Lender) to a General
Contractor, subcontractor thereof or materials supplier, upon his
demand or upon the demand of Lender, for work done on or in
connection with the Real Property.
(f) Lender shall give Borrower thirty (30) days notice
thereof, and Borrower shall have the right to cure within such
period, for any default under Sections 12(a) through 12(e).
Lender's Rights to Complete.
(a) Lender may, after an Event of Default has occurred
and is continuing, but shall not be obligated to, apply any
unadvanced part of the Note Funding to the payment of all costs
and expenses that may be incurred by Lender to complete the
Repairs as provided by this Agreement and to the payment of
interest on or principal of the Note, in any order acceptable to
Lender.
(b) If an Event of Default occurs and is continuing,
Lender may, at its election, proceed to complete the Repairs.
For that purpose, Lender may employ such contractors, agents and
employees as it deems appropriate and may advance any proceeds of
the Note Funding remaining unadvanced. Lender may, but shall not
be obligated to, (i) perform all the obligations of Borrower
under the terms of this Agreement, with such amendments as Lender
shall deem appropriate; and (ii) exercise all the rights and
powers of Borrower under Borrower's contracts with General
Contractors, the contracts with Borrower's architects and
engineers and such other contracts and agreements as Borrower has
executed or should have executed or intends to execute in
connection with completion of the Repairs, and payment of all
costs relating thereto. Borrower hereby grants to Lender full
power and authority to do whatever is necessary or appropriate to
complete the Repairs and pay all costs in connection therewith,
exercisable only after the occurrence of an Event of Default.
(c) Upon the occurrence of an Event of Default,
Lender, at its sole discretion, may continue to make advances of
the Note Funding. All sums so advanced shall be deemed advances
under this Agreement and not modifications thereof.
Miscellaneous.
(a) Notices. All notices, demands and other
communications between Borrower and Lender required or desired to
be given in connection with this Agreement, to be effective
hereunder, shall be given as provided by the Note.
(b) No Waiver; Cumulative Remedies. No failure by
Lender to exercise, and no delay in exercising, any right, power
or privilege under this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder preclude any other further exercise
thereof or the exercise of any other right, power or privilege.
Each waiver shall be strictly construed and shall apply only to
the next succeeding advance.
(c) Survival of Agreements. All agreements,
representations, covenants and warranties of Borrower made in
this Agreement shall survive the making of the advances
hereunder.
(d) Successors. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective
successors and permitted assigns. Borrower may not assign this
Agreement without the prior written consent of Lender, and any
assignment attempted by Borrower without such consent shall be
void. Wherever the word "Lender" is used herein it shall be
deemed to include also the successors and assigns of Lender. The
word "Borrower" shall include the successors of Borrower and
shall include those assignees of Borrower consented to in writing
by Lender. No consent by Lender to an assignment shall be deemed
to be a waiver of the requirement of consent by Lender of each
and every further assignment, as a condition precedent to the
effectiveness of such assignment.
(e) Time. Time is of the essence of this Agreement.
(f) Changes. The terms, conditions and provisions of
this Agreement may only be modified, waived or terminated in
writing, signed by the parties.
(g) Applicable Law. The performance, construction and
enforcement of this Agreement shall be governed by the laws of
the State of Maryland.
IN WITNESS WHEREOF, the parties have caused this
Construction Loan Agreement to be executed and delivered under
seal as of the date first written above.
WITNESS: USF&G Realty Partners, Inc., a
Maryland corporation, Lender
XXXXXXXX X. XXXXX By: XXXXXXX X. XXXXXXX
Its: Vice President
WITNESS: USF&G/XXXX XXXXX REALTY PARTNERS
LIMITED PARTNERSHIP, a Maryland
limited partnership, Borrower
By: USF&G Realty Partners, Inc., a
Maryland corporation, general
partner
XXXXXXXX X. XXXXX By: XXXXXXX. R XXXXXXX
Its: Vice President
By: Xxxx Xxxxx Realty Partners,
Inc., a Maryland corporation,
general partner
By: XXXXXXX X. XXXXXXXXX
Its: President
EXHIBIT A
Description of Real Property
EXHIBIT B
Contract For Repairs
