Exhibit 10.20.3
CONSTRUCTION LOAN AGREEMENT
This Agreement is dated as of June 28, 2001 by and between XXXXXXX
PROPERTIES RESIDENTIAL, L.P., a Georgia limited partnership ("Borrower"), having
its address at 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000, Attention:
Chief Financial Officer, and BANK OF NORTH GEORGIA, ("Bank") having an address
at 0000 Xxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxx 00000;
In consideration of the Loan described below and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, Bank
and Borrower agree as follows:
1. Definitions and Reference Terms. In addition to any other terms
defined herein, the following terms shall have the meanings set forth with
respect thereto:
(a) Agent to Request Disbursements: Xxxxxxx X. Xxxxxxx or
Xxxxxxx X. Xxxxxxx
(b) Architect: Xxxxx Xxxxxxxx Xxxxxx, Inc.
(c) Budget: The budget attached hereto as Exhibit A setting
forth in detail all direct and indirect costs for the construction of the
Improvements.
(d) Completion Date: February 28, 2002.
(e) Construction Commitment: The agreement between Borrower
and Bank dated June 21, 2001, and attached hereto as Exhibit B, the terms of
which are incorporated herein.
(f) Contractor: Xxxxxxx Properties Construction, Inc.
(g) Guarantor: Not applicable.
(h) Guaranty: Not applicable.
(i) Hazardous Materials: All materials defined as hazardous
wastes or substances under any local, state or federal environmental laws, rules
or regulations, and petroleum, petroleum products, oil and asbestos.
(j) Improvements: The buildings and other improvements
constructed or to be constructed on the Land, generally including the following:
37,864 square foot office building fronting on Northridge Parkway, Atlanta,
Xxxxxx County, Georgia, with associated site work.
(k) Inspecting Agent: USA Inspection Services, LLC
(l) Land: The land located at Land Lots 25 and 26 in the 17th
District, Xxxxxx County, Georgia as more particularly described in the Mortgage
and any additional property which may become subject to the Mortgage.
(m) Loan: The loan in the principal amount of up to
$5,280,000.00 for the financing and construction of the Premises in accordance
with this Agreement.
(n) Loan Documents: This Agreement and the Construction
Commitment (and all items and documents required therein), the Note, the
Mortgage, and all other instruments, documents and agreements required by Bank
which evidence, secure or otherwise relate to the Loan including, without
limitation, any guaranties, financing statements, assignments of lessor's
interest in leases, rents and profits, and assignments of construction
documents, together with any amendments, renewals, and extensions thereof, all
of which are incorporated herein by reference and made a part hereof. References
herein to the Loan Documents shall include all such documents, instruments and
other agreements collectively, except that any such reference shall mean the
appropriate individual document, instrument or agreement if the context shall so
require.
(o) Mortgage: The first lien mortgage, deed of trust, or deed
to secure debt and security agreement securing the Note and the performance of
Borrower's obligations with respect to the Loan, and all amendments, renewals
and extensions thereof.
(p) Note: The promissory note or notes and other instruments,
documents or agreements evidencing Borrower's indebtedness for the Loan, and all
amendments, renewals and extensions thereof.
(q) Obligors: The Borrower and all other makers, co-makers,
endorsers, guarantors and others obligated, primarily or secondarily, for the
payment of the indebtedness evidenced by the Note or performance of Borrower's
obligations under the Loan Documents (including, without limitation, all general
partners of Borrower if Borrower, is a partnership), collectively.
(r) Plans: The plans and specifications entitled "Xxxxxxx
Properties, Inc. Corporate Headquarters, Xxxxxx County" prepared by Xxxxx
Xxxxxxxx Xxxxxx, Inc. last revised January 31, 2001 and all amendments thereto
approved by Bank.
(s) Premises. The Land and the Improvements,
2. Loan. Subject to the terms and conditions of this Agreement and the
Loan Documents, Bank agrees to lend to Borrower (in periodic disbursements) up
to the principal sum set forth in Section 1 (m) hereof. The Loan shall bear
interest at the rate or rates set forth in the Note and shall be evidenced
thereby and secured by the Mortgage and other Loan Documents.
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3. Representations and Warranties of Borrower. As an inducement to Bank
to enter into this Agreement and to make the Loan, Borrower represents and
warrants to Bank as follows:
(a) Borrower Organization. Borrower is duly organized and
existing in good standing under the laws of the state of its organization and is
duly qualified in the state where the Land is located to own, construct and
operate the Improvements. Borrower has the authority and the legal right to
carry on the business now being conducted by it and to engage in the
transactions contemplated by the Loan Documents.
(b) Binding Documents. The Loan Documents are legal, valid and
binding in accordance with their terms and have been duly authorized, executed
and delivered.
(c) Legal and Environmental Compliance. The Plans for the
Improvements and the anticipated use of the Premises and all easements and
rights appurtenant thereto comply with all applicable restrictive covenants,
zoning ordinances, building laws and codes, and other laws, regulations and
governmental requirements, including but not limited to those regarding
environmental matters and access and facilities for persons with disabilities.
All permits and approvals necessary to continue work on the Premises, including-
without limitation all building and site work permits, have been obtained by
Borrower.
During Borrower's ownership of the Premises and to the best of
Borrower's knowledge prior thereto, the Premises have not been used in violation
of any federal laws, rules or ordinances for environmental protection,
regulations of the Environmental Protection Agency and any applicable local or
state law, rule, regulation or rule of common law and any judicial
interpretation thereof relating primarily to the environment or Hazardous
Materials. Borrower will not use or permit any other party to use any Hazardous
Materials on the Premises except such materials as are incidental to Borrower's
normal course of business, maintenance and repairs and which are handled in
compliance with all applicable environmental laws.
(d) Utilities Availability. All utility services necessary for
the construction and full utilization of the Premises for their intended
purposes are presently available at the boundaries of the Land through public or
unencumbered private easements or rights of way and are available for connection
to the Improvements at ordinary costs.
(e) Access to the Premises. Access necessary for the
construction and full utilization of the Premises for their intended purposes is
presently available to the Premises over private easement areas and/or streets
or roads which have been dedicated to public use and accepted therefor by
appropriate governmental authorities and any permits necessary for connecting
the driveways on the Premises to such streets or roads will be obtained if
necessary.
(f) Financial Statements. Each financial statement delivered
to Bank in connection with the Loan is true and correct in all material
respects, has been prepared in accordance with generally accepted accounting
principles consistently applied, and fairly
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represents the financial condition of its subject, and no material, adverse
change has occurred in the financial condition of its subject since the date
thereof.
(g) Litigation. There is no litigation against Borrower
wherein the claim against Borrower exceeds the sum of $50,000.00 pending or, to
the knowledge of Borrower, threatened before any court or governmental
authority, agency or arbitration authority, except as set forth in Exhibit C
attached hereto.
(h) Leases. All leases delivered to Bank purporting to cover
any of the Premises are in full force and effect and have not been modified or
terminated.
(i) Reaffirmations. Each request for a Loan disbursement under
this Agreement shall constitute an affirmation that the representations and
warranties of this Section 3 are true and correct on the date of each request
and on the date of its disbursement.
4. Covenants of Borrower. Borrower covenants and agrees with Bank as
follows:
(a) Progress of Work; Lien Free Completion. Borrower has
commenced construction and will continually prosecute the work and substantially
complete the building shell of the Premises on or before the Completion Date,
all in substantial conformity with the approved Plans and the Budget and in
compliance with all legal requirements and restrictions. Borrower will not
permit cessation of work on the Premises for a period in excess of fifteen (15)
business days (whether or not consecutive, but excluding federal holidays and
days on which work cannot be performed because of inclement weather) without
Bank's prior written consent. Borrower will, within fifteen (15) days after
Borrower obtains knowledge thereof, correct any material defect in the
Improvements, any material departure from Plans, legal requirements or good
construction practices, and any encroachment by the Improvements on any property
line, set-back line, easement or other restricted area. Borrower will keep the
Premises free at all times from all liens for services, labor, materials or
indebtedness (other than the Loan and the liens securing the Loan).
(b) Plans, Contracts and Budget Approval; Assignment of
Contracts. Borrower will submit Borrower's contract with Contractor for
construction and other services to the Premises, the Plans, the Budget, surveys
of the Land, and all other items required by the Loan Documents to Bank for its
approval, and Bank shall have no obligation to make any disbursement hereunder
until it has approved those items, which consent shall not be unreasonably
withheld. Borrower agrees that the approved construction contract will not be
terminated and that it and the Plans and Budget will not be modified or
otherwise changed, in whole or in part, without the prior written consent of
Bank, which approval shall not be unreasonably withheld. (Provided, however,
Borrower may make changes to the Plans without Bank's consent as long as the
aggregate amount of such changes constitutes an increase in the cost of the
improvements and does not exceed 4% of the principal amount of the Loan).
Borrower further agrees to perform all of its obligations under the approved
construction contracts in a timely manner, Borrower hereby assigns to Bank
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and grants Bank a security interest in all Borrower's rights and interests, but
not the obligations, in and to the Plans and all construction and architectural
contracts related to the Premises.
(c) Insurance. Borrower will obtain and maintain (or will
cause to be obtained and maintained) such insurance as Bank may reasonably
require, including, but not limited to, lender's title insurance, builder's risk
insurance, permanent hazard insurance, public liability insurance, worker's
compensation insurance and business interruption or rent loss insurance
(consequential loss insurance). Insurance coverages shall be in such amounts and
on such terms as may be reasonably required by Bank, shall name Bank as an
insured or a mortgagee as required by Bank, shall be issued by companies
acceptable to Bank, and shall be kept in full force and effect. Borrower will
promptly deliver satisfactory evidence of such insurance and renewals thereof to
Bank prior to the first disbursement hereunder, together with evidence of
premium payments.
(d) Foundation Survey. Upon the completion of the construction
of each foundation of the Improvements, Borrower will promptly provide to Bank a
foundation survey showing the location of the foundation relative to the
boundaries of the land, any set-back lines, easements and other restricted
areas.
(e) Title Instruments. Borrower will submit all Proposed
easements, permits, licenses and other instruments, which would or may
materially affect title to the Premises to Bank for approval prior to the
execution thereof by Borrower.
(f) Consent to Leases. [Intentionally deleted.]
(g) Use of Proceeds. Borrower will hold in trust and use the
proceeds of the Loan solely for the purpose of paying for the costs of
construction of the Improvements in accordance with the Plans and the Budget and
as set forth in the requests for disbursements required by Term 5 hereof and for
such other purposes associated therewith as Bank shall have specifically
approved in writing.
(h) Sufficient Funding; Borrower's Equity Investment
Obligation. If the undisbursed portion of the Loan and sums deposited by
Borrower with Bank hereunder are at any time insufficient, in Bank's
commercially reasonable judgment, to fully complete the Improvements in
accordance with the Plans and to pay all other sums under the Loan Documents
when due, Borrower will within seven (7) days after written notice thereof from
Bank, deposit with Bank such sums of money in cash as Bank may require to remedy
such condition and to pay any liens for services and materials alleged to be due
and payable at that time. At Bank's option, no further disbursements of Loan
proceeds shall be made until Borrower has fully complied with this requirement.
All deposited sums shall stand as additional security for Borrower's obligations
under this Agreement and may be disbursed, at Bank's option, before any further
Loan disbursements.
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(i) Environmental Inspections, Inspection of Improvements.
Borrower agrees to permit Bank, its agents, contractors and employees to enter
and inspect the Premises at any reasonable time upon three (3) days prior notice
for the purposes of conducting an environmental investigation and audit
(including taking physical samples) to insure that Borrower is complying with
the provisions of Term 3 (c) hereof. Any such environmental investigation and
audit shall be at Bank's cost unless just cause exists for Bank to believe such
an investigation and audit is necessary. Borrower shall provide Bank, its
agents, contractors, employees and representatives with access to and copies of
any and all data and documents relating to or dealing with any Hazardous
Materials used, generated, manufactured, stored or disposed on the Premises
within five (5) days of the request therefore.
Borrower will permit Bank and its representatives to enter upon the
Premises at any reasonable time upon three (3) days prior notice and to inspect
the Improvements and all materials used in the construction thereof. Bank shall
have the right, in its reasonable judgment, to reject and require Borrower to
replace any material or work which does not comply with the Plans or good
construction practices. It is understood and agreed that Bank's rights under
this Section 4 (i) are solely for Bank's loan administration purposes and do not
impose any duty of care of Bank to Borrower or to any other person or entity.
Bank shall have no liability, obligation or responsibility whatsoever with
respect to the construction of the Improvements except to disburse the Loan
proceeds pursuant to this Agreement. Bank shall not be obligated to cause to be
performed any environmental audit or investigation or inspect the Premises or
the construction of the Improvements. Bank shall not be liable for any defect in
the Premises by reason of inspecting or not inspecting the same. Bank shall not
be liable for the performance or default of Borrower, any architect, engineer,
contractor, construction consultant or any other party, nor for any failure to
construct, complete, protect or insure the Improvements, nor for the payment of
any costs of labor, materials or services supplied for the construction of the
Improvements, nor for the performance of any obligation of Borrower.
(j) Notice of Claims and Actions. Borrower shall immediately
advise Bank in writing of any and all enforcement, cleanup, remedial, removal or
other governmental or regulatory actions instituted, completed or threatened
pursuant to any applicable federal, state, or local laws, ordinances or
regulations relating to any Hazardous Materials affecting the Premises or the
use of the Premises; and (ii) all claims made or threatened by any third party
against Borrower relating to damages, contribution, cost recovery compensation,
loss or injury resulting from any Hazardous Materials. Borrower shall
immediately notify Bank of any remedial action taken by Borrower with respect to
the Premises or the use of the Premises.
Borrower will promptly notify Bank in writing of any litigation or
other proceedings before any court or governmental or administrative authority
which affects the Premises and of any litigation or proceedings against the
Borrower or affecting Borrower's other assets which would, if successful,
materially affect Borrower or such other assets or where the amount exceeds
$50,000.
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(k) Books and Records. Borrower will keep and maintain, in
accordance with generally accepted accounting principles consistently applied,
proper and accurate books, records and accounts reflecting all items of income
and expense in connection with the construction, equipping and operation of the
Premises.
Borrower will make all of the books, records and accounts available to
Bank and its representatives at the corporate offices of Borrower upon request
and will permit them, at any reasonable time upon three (3) days prior notice,
to examine and copy the same. Borrower shall also furnish to Bank such operating
statements for the Premises and financial statements (including, without
limitation, income statements, balance sheets and internal financial reports) of
Borrower and any of the other Obligors as Bank may require from time to time.
(l) Management of Borrower. Borrower will promptly notify Bank
in writing of any change in the roster of the executive officers of Borrower as
constituted on the date of this Agreement, and Bank shall be fully authorized to
deal with any present manager, member, officer, partner or director in his or
her present capacity until written notice to the contrary is received by Bank.
(m) Notice of Default. Borrower will promptly notify Bank in
writing of any event constituting a default hereunder, and any event which, with
the giving of notice or lapse of time or both, would constitute a default
hereunder, and shall specify the nature of the default or event.
(n) Rent Rolls. At Bank's request and if applicable, Borrower
shall deliver to Bank a monthly certified rent roll list with respect to the
Premises within fifteen (15) days of Bank's request.
(o) Additional Acts and Agreements. On demand of Bank,
Borrower will do any acts or execute any additional documents required by Bank
to secure the Loan, confirm the lien of the Mortgage or any other lien created
by the Loan Documents, or further carry out the intent and purposes of this
Agreement.
(p) Restriction on Secondary Financing and Sale of Premises.
During the term of the Note, the Premises shall remain free and clear of all
encumbrances, liens, mortgages, security interests and secondary financing,
except those approved in writing by Bank. Borrower shall not, without the prior
written consent of Bank, sell, transfer, or convey all or any part of its
interest in the Premises or any portion thereof, except to Xxxxxxx Realty
Investors, Inc. or a Permitted Transferee (as hereinafter defined). Any sale,
transfer or conveyance to any person or entity, other than Xxxxxxx Realty
Investors, Inc. or an entity whose shares of stock or limited partnership units
are publicly traded, shall be conditioned upon Bank's receipt of an unlimited
personal guaranty of Xxxxxxx X. Xxxxxxx of such transferee's obligations to Bank
pursuant to this Agreement and the Loan Documents. Borrower, or any successor or
assignee of Borrower, shall not, without the prior written consent of Bank,
sell, transfer or convey all or any ownership interest in Borrower, or any
successor or assignee of Borrower. Such restriction shall not apply
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to the sale or transfer of any publicly traded shares of stock or limited
partnership units of Borrower, or any successors or assignee of Borrower. Such
restriction shall further not apply to any sale, transfer or conveyance of any
ownership interest in a Permitted Transferee, provided such sale, transfer or
conveyance does not result in Xxxxxxx X. Xxxxxxx owning less than a fifty-one
(51%) percent controlling interest in such entity. For purposes of this
Agreement, a Permitted Transferee shall be defined as any entity of which
Xxxxxxx X. Xxxxxxx owns at least fifty-one (51%) percent of the ownership
interests.
(q) Structural Report. [Intentionally deleted.]
5. Disbursements.
(a) Disbursement Conditions. Bank shall not be obligated at
any time to disburse any proceeds of the Loan unless the following conditions
have been satisfied:
(i) All Loan Documents required by Bank shall have
been delivered to the proper parties and all conditions and requirements set
forth therein shall have been and shall continue to be satisfied, including,
without limitation, all requirements contained in the Construction Commitment.
(ii) Borrower has delivered to Bank a final AIA
contract with Contractor for the construction of the Improvements including,
without limitation, all site work.
(iii) No default or event which, with the giving of
notice or lapse of time or both, would constitute a default under this Agreement
or any other Loan Document shall have occurred and be continuing.
(iv) The Premises shall not have been damaged unless,
in the judgment and opinion of Bank, sufficient insurance proceeds shall have
been received and satisfactory arrangements shall have been made for the repair
of the same.
(v) If required in Bank's title insurance policy or
if otherwise required by Bank, Bank shall have received an endorsement to such
policy advancing the effective date of its coverage to the date of the
disbursement, increasing the amount of coverage to include such disbursement,
and indicating no liens, encumbrances, and other matters not previously approved
by Bank. Bank shall have the option of requiring lien releases and/or waivers
from persons furnishing labor, materials and services to the Premises in order
to provide Bank with further assurance that no mechanic's or materialman's liens
or other encumbrances (other than the lien of the Mortgage) affect the Premises.
(vi) Borrower shall have paid or invested in the
Premises all amounts required to meet Borrower's equity investment obligation
which is set forth in Section 4 (h) hereof.
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(vii) Prior to the final Loan disbursement, with
respect to construction work on the Premises, Borrower shall have satisfied all
requirements of this Agreement and shall have delivered to Bank such
certificates, documents and other evidence of substantial completion of the
Improvements required by the Construction Commitment or as Bank may reasonably
require, including, but not limited to, certificates of occupancy for the
building shell of the Premises, three (3) copies of an as-built final survey,
tenant estoppel letters, subordination and attornment agreements, permanent
hazard insurance and evidence that all sums due for construction costs have been
paid or will be paid out of the final disbursement including, but not limited
to, receipt by Bank of a final Contractor's affidavit and such other information
as is sufficient in the reasonable opinion of Bank's counsel to void any
materialman's or mechanic's liens (inchoate or otherwise) which would affect
title to the Premises.
(viii) Disbursements (prior to final disbursement)
allocable to a payment on account of construction work and materials shall not
exceed an amount equal to 95% of the total value of work and materials in place
and completed, less the sum of all payments previously made against construction
work and materials. The total value of work and materials in place and completed
shall be reasonably determined by Bank and shall be binding on Borrower. In no
event shall disbursements for individual items exceed the amounts specified
therefor in the approved Budget, except that any savings with respect to
individual items may be used to offset overages with respect to other individual
items in the approved Budget, provided such transfers or offsets are documented
and disclosed to Bank prior to disbursement. Unless otherwise agreed by Bank,
disbursements shall not be made for materials stored on site or off site.
(b) Disbursement Procedures and Requirements. Bank agrees to
make periodic Loan disbursements up to the face amount of the Note pursuant to
the following procedures and requirements:
(i) Borrower or Borrower's Agent to Request
Disbursements shall complete, sign and deliver to Bank a written request for
disbursement in a form satisfactory to Bank. Bank may require that such requests
be signed by the Contractor.
(ii) Each request for disbursement shall be supported
by such receipts, invoices and supporting documents as may be reasonably
required by Bank.
(iii) Each request for disbursement shall be
submitted to Bank at least five (5) business days prior to the date of the
requested disbursement. Unless Bank shall otherwise agree, disbursements shall
not be made more frequently than monthly.
(iv) Each request for disbursement shall be inspected
and reported upon to the Bank by the Inspecting Agent prior to funding the draw
request. Borrower will permit the Bank, Inspecting Agent and its representatives
to enter upon the Premises and to inspect all materials used in the construction
thereof. Bank shall have the reasonable right to reject or require
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Borrower to replace any material or work which does not substantially comply
with the Plans or good construction practices. Borrower shall reimburse the Bank
on demand for the costs of any such inspection.
(v) If Bank shall so request, Borrower will
immediately deposit all proceeds of the Loan disbursed by Bank into a separate
and exclusive account at Bank's office located at the address set forth above.
(vi) Loan disbursements may be made, at the option of
Bank, to one or more of the following: Borrower; Borrower's Agent to Request
Disbursements; or, after an Event of Default, at the Bank's option, to the
Contractor, or to any subcontractor, materialman, or other supplier providing
labor, services or materials in connection with the Improvements. The execution
of this Agreement by Borrower constitutes an irrevocable direction and
authorization for Bank to so disburse the Loan proceeds. Bank may rely on
requests for disbursements made by the Agent to Request Disbursements.
(c) Obligation for Further Disbursements. No disbursement made
hereunder shall constitute a waiver of any condition precedent to the obligation
of Bank to make any further disbursement or preclude Bank from thereafter
declaring the failure of Borrower to satisfy such condition precedent to be a
default. At Bank's sole option, any such condition precedent may be waived by
Bank, in whole or in part, at any time. All conditions precedent to Bank's
obligations to make disbursements are imposed solely for the benefit of Bank,
and no other party may require any such condition precedent or be entitled to
assume that Bank will refuse to make any disbursement in the absence of strict
compliance with such condition precedent.
6. Defaults and Remedies.
(a) Defaults. Borrower shall be in default under this
Agreement and under each of the other Loan Documents if, after notice and the
failure of Borrower to cure within ten (10) days of such notice, Borrower shall
fail to pay any amounts due and owing under the Note, as and when due, or should
Borrower fail to timely and properly observe, keep or perform any term,
covenant, agreement or condition in any of the Loan Documents or in any other
loan agreement, promissory note, security agreement, deed of trust, mortgage,
assignment or other contract securing or evidencing payment of any indebtedness
of Borrower to Bank or any affiliate or subsidiary of Bank of North Georgia and
such failure is not cured within any applicable cure period therefor. For
non-payment matters hereunder, Borrower shall have thirty (30) days following
receipt of notice thereof from Bank before same shall be deemed defaults
hereunder. In the event Borrower's cure of any non-payment matter cannot be
completed or achieved within thirty (30) days of receipt of Bank's notice
thereof, Borrower shall have an additional sixty (60) days to cure same,
provided Borrower, in Bank's reasonable opinion, is diligently pursuing said
cure. Any default under the other Loan Documents which is not cured within any
applicable cure period therefor shall constitute a default hereunder.
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(b) Remedies. In the event of any default hereunder,
Bank may, at its option, exercise any or all of the rights, options, privileges,
and remedies provided by this Agreement or by the other Loan Documents
(including, without limitation, the right to accelerate the indebtedness
evidenced by the Note and to commence foreclosure proceedings or a sale under
power of sale) or otherwise available to Bank at law, in equity or under any
other contract. In addition, Bank may, at its option and at the risk, cost and
expense of Borrower: (i) enter upon and take possession of the Premises and the
materials and equipment being used in the construction of the Improvements; (ii)
take such action as Bank shall deem appropriate to protect the Premises; and
(iii) take such action as Bank shall deem appropriate to continue construction
of the Improvements with such changes therein as Bank may elect to make.
If Bank shall elect to continue construction, Bank may: (i)
assume or reject any construction or other contracts made by Borrower in
connection with the construction or operation of the Improvements; (ii) engage
or employ contractors, subcontractors, architects, engineers and others for the
construction of the Improvements; (iii) pay, settle or compromise existing or
future bills or claims relating to the construction of the Improvements or the
Premises or affecting title thereto; (iv) and take or refrain from taking such
other action (including, without limitation, discontinuing construction), in its
name or in the name of Borrower, as Bank may determine.
All reasonable costs and expenses incurred by Bank in taking
and protecting the Premises and in constructing the Improvements shall be paid
by Borrower to Bank upon demand, with interest at the rate provided in the Note
from the date of disbursement to the date of payment to Bank, and the payment of
such sums shall be secured by the Mortgage and the other Loan Documents, Bank
shall have no obligation to take any of the foregoing actions, and if Bank
should do so, it shall have no liability to Borrower or any other Obligor for
the sufficiency of any such actions or otherwise, except with respect to Bank's
gross negligence or intentional misconduct.
(c) Set Off. Bank shall also have a continuing security
interest in, lien on and right of set-off against all property and deposit
accounts belonging to Borrower or any other Obligor which are at or under the
control of Bank.
(d) Cumulative Rights and Remedies. All rights, options,
privileges and remedies provided by this Agreement and the other Loan Documents
and otherwise available to Bank at law, in equity or under any other contract
shall be cumulative, and no such right, option, privilege or remedy shall be
deemed to be exclusive or alternative.
7. General Conditions.
(a) Bank Approvals. All surveys, appraisals, insurance
policies, construction contracts and subcontracts, leases, plans and
specifications, legal opinions, requests for disbursement, and other Loan
Documents and items required for the Loan shall be reasonably satisfactory to
Bank in all material respects.
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(b) Costs and Expenses. Borrower will pay when due, and if
paid by Bank reimburse Bank on demand for, all reasonable, out-of-pocket costs
and expenses (including, without limitation, the cost and expense for insurance
premiums, appraisals, surveys, recording documents, environmental assessments,
Bank's construction consultant (if any), title insurance, taxes due on Loan
Documents, and legal counsel for Bank) in connection with the preparation,
administration, modification or enforcement of this Agreement and the other Loan
Documents.
(c) No Third Party Beneficiaries. This Agreement is for the
sole protection and benefit of Bank and Borrower, and no other person or entity
shall have any right as a third party beneficiary hereunder or any right to
bring an action hereon or claim the proceeds of the Loan hereunder.
(d) No Waiver. No failure on the part of Bank to exercise any
right, option, privilege, or remedy available to Bank shall operate as a waiver
thereof, nor shall any single or partial exercise or waiver of any such right,
option, privilege, or remedy preclude any other or further exercise thereof to
its fullest extent or the exercise of any other right, option, privilege, or
remedy.
(e) Notices. Notices, requests, demands and other
communications which any party is required or may desire to give to any other
party under any provision of this Agreement must be in writing and delivered to
the other party (and, in the case of Borrower, to Xxxxxxx X. Xxxxxxx, Esq., 000
Xxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000-0000) at the address set
forth in the first paragraph of this Agreement (or to such other address as any
party may designate by written notice to the other party). Each such notice,
request, demand or other communication shall be deemed given or made as follows:
if sent by mail, upon the earlier of the date of receipt or five (5) days after
deposit in the U.S. Mail, first class postage prepaid; if sent by any other
means, upon delivery.
(f) Transfer of Rights. Except as set forth in and allowed
under Section 4(p) with respect to the sale of the Premises, Borrower shall not
assign or otherwise transfer this Agreement or the Loan Documents, in whole or
in part, without the prior written consent of Bank. Bank may create and sell
participation interests in the Loan or otherwise assign or transfer this
Agreement and the Loan Documents, in whole or in part, at any time and in the
event of an assignment or transfer by Bank, the term "Bank" shall include any
such assignee or transferee to the extent of the interest assigned or
transferred. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective heirs, successors, personal
representatives, and assigns.
(g) Indemnification. Borrower shall indemnify, defend and hold
Bank and its successors and assigns harmless from and against any and all
claims, demands, suits, losses, damages, assessments, fines, penalties, costs or
other expenses (including reasonable attorneys' fees and court costs) arising
from or in any way related to actual or threatened damage to the environment,
agency costs of investigation, personal injury or death, or property damage, due
to
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a release or alleged release of Hazardous Materials on or under the Premises,
or arising from any other condition existing on or under the Premises or from
any business operations conducted thereon resulting from the use or existence of
Hazardous Materials, whether such claim proves to be true or false. Borrower
further agrees that its indemnity obligations shall include, but are not limited
to, liability for damages resulting from the personal injury or death of an
employee of the Borrower, regardless of whether the Borrower has paid the
employee under the worker's compensation laws of any state or other similar
federal or state legislation for the protection of employees. The term "property
damage" as used in this paragraph includes, but is not limited to, damage to any
real or personal property of Borrower, Bank, and of any third parties.
Borrower's obligations under this paragraph shall survive the repayment of the
Loan and any deed in lieu of foreclosure or foreclosure of the Mortgage and/or
any security agreement securing the Loan; provided, however, Borrower shall have
no liability hereunder with respect to Hazardous Materials placed on or under
the Premises following transfer of the Premises by Borrower or any deed in lieu
of foreclosure or foreclosure of the Mortgage.
(h) Joint and Several Obligations. If more than one person or
entity is named as Borrower herein, this Agreement shall be binding upon all
such persons and entities, jointly and severally.
(i) Severability. The unenforceability or invalidity of any
provision of this Agreement shall not affect the enforceability or validity of
any other provision herein, and the invalidity or unenforceability of any
provision of any Loan Document to any person or circumstance shall not affect
the enforceability or validity of such provision as it may apply to other
persons or circumstances.
(j) Advertising. Bank shall have the right to erect no more
than two (2) signs on the Premises advertising its financing of the
Improvements.
(k) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia and applicable
United States federal law.
(l) Attorneys Fees. In the event it is necessary for Bank to
enforce this Agreement, or any part thereof, by or through an attorney at law,
Borrower agrees to pay all costs of collection including, but not limited to,
attorneys fees incurred by Bank. Notwithstanding anything contained herein or in
the Note to the contrary, if under any circumstances Borrower is required
hereunder to pay any or all of Bank's attorney's fees and expenses, Borrower
shall be responsible for actual legal fees and out of pocket expenses incurred
by Bank at normal hourly rates for the work done. Borrower shall not be liable
under any circumstances for any additional attorney's fees or expenses under
O.C.G.A. ss. 13-1-11 or otherwise, and, to the extent Bank may be permitted to
charge or receive additional attorney's fees or expenses under O.C.G.A. ss.
13-1-11, Bank hereby waives such right.
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8. Exhibits/Additional Provisions. This Agreement includes any
exhibits and attachments referred to herein. The terms of such exhibits and
attachments are made a part hereof, whether actually attached hereto or not. If
any additional provision contained in any such exhibit or attachment is in
conflict with another term or condition of this Agreement, the additional
provision shall control.
9. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY RELATED AGREEMENTS OR INSTRUMENTS, INCLUDING ANY CLAIM BASED ON
OR ARISING FROM AN ALLEGED TORT, SHALL BE DETERMINED BY BINDING ARBITRATION IN
ACCORDANCE WITH THE FEDERAL ARBITRATION ACT (OR IF NOT APPLICABLE, THE
APPLICABLE STATE LAW), AND THE RULES OF PRACTICE AND PROCEDURE FOR THE
ARBITRATION OF COMMERCIAL DISPUTES OF JUDICIAL ARBITRATION AND MEDIATION
SERVICES, INC. (J.A.M.S.), AND THE `SPECIAL RULES' SET FORTH BELOW. IN THE EVENT
OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY
ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO
THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING,
TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS AGREEMENT
APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE
CONDUCTED IN THE CITY OF THE BORROWER'S DOMICILE AT
THE TIME OF THIS AGREEMENT'S EXECUTION AND
ADMINISTERED BY J.A.M.S. WHICH WILL APPOINT AN
ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY
PRECLUDED FROM ADMINISTERING THE ARBITRATION, THEN
THE AMERICAN ARBITRATION ASSOCIATION WILL SERVE. ALL
ARBITRATION HEARINGS WILL BE COMMENCED WITHIN 90
DAYS OF THE DEMAND FOR ARBITRATION; FURTHER, THE
ARBITRATOR SHALL ONLY, UPON A SHOWING OF CAUSE, BE
PERMITTED TO EXTEND THE COMMENCEMENT OF SUCH HEARING
FOR UP TO AN ADDITIONAL 60 DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS AGREEMENT
SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY
OTHERWISE APPLICABLE STATUTES OF LIMITATION OR REPOSE
AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (II)
BE A WAIVER BY BANK OF THE PROTECTION AFFORDED TO IT
BY 12 U.S.C. SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT
STATE LAW; OR (III) LIMIT THE RIGHT OF THE BANK OR
BORROWER HERETO (A) TO EXERCISE SELF HELP REMEDIES
SUCH AS (BUT
14
NOT LIMITED TO) SET OFF, OR (B) TO FORECLOSE AGAINST
ANY REAL OR PERSONAL PROPERTY COLLATERAL, OR (C) TO
OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES
SUCH AS (BUT NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT
OF POSSESSION OR THE APPOINTMENT OF A RECEIVER. BANK
OR BORROWER MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE UPON SUCH PROPERTY, OR OBTAIN SUCH
PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR
AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING
BROUGHT PURSUANT TO THIS AGREEMENT. NEITHER THIS
EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR
MAINTENANCE OF AN ACTION FOR FORECLOSURE OR
PROVISIONAL OR ANCILLARY REMEDIES SHALL CONSTITUTE A
WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE
CLAIMANT IN ANY SUCH ACTION, TO ARBITRATE THE MERITS
OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO
SUCH REMEDIES.
10. NO ORAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
In Witness Whereof, the parties have duly executed this Agreement under
seal as of the day and year first above written.
"Borrower"
XXXXXXX PROPERTIES RESIDENTIAL, L.P.,
a Georgia limited partnership
By: Xxxxxxx Realty Investors, Inc.
a Georgia corporation, as General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx,
Chief Financial Officer and
Secretary/Treasurer
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[CORPORATE SEAL]
"Bank"
BANK OF NORTH GEORGIA
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Xxxxx Xxxxxx, Senior Vice President
[BANK SEAL]
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