Exhibit 10.108
Construction Loan Agreement ME, NH, MA, XX, XX, XX
00000 1/92
CONSTRUCTION LOAN AGREEMENT
THIS AGREEMENT, made is on March 10, 1997, by and between Pocono Village Farms,
L.P., a Delaware Limited Partnership at 00 Xxxxx Xxxxx, Xxxx Xxxxxxxxx, XX 00000
(called collectively "Borrower,") and First Pioneer Farm Credit, ACA, a
corporation organized under and pursuant to the laws of the United States of
America with its office at 0 Xxxxxx Xxxx 000, Xxxxxxx, XX 00000 (called
"Lender.")
1. CONSTRUCTION LOAN. Lender has agreed to lend, and Borrower has agreed to
borrow, the sum of $297,500.00 (called the "construction loan") to be used in
the erection, construction and completion of the improvements, described below,
on a certain parcel of land in the Township of Mount Carmel, County of
Northumberland, State of Pennsylvania, described in a deed from
________________________ to ________________________ dated _____, and recorded
in the ________________________ Registry of Deeds at _______________________ ,
in Book at Page ___________ [Attachment "A"] (called the "Premises.") This loan
is subject to the terms of this Construction Loan Agreement as well as a
promissory note (the "Note") and secured by a mortgage on the Premises (the
"Mortgage") in the amount of $2,200,000.00, both bearing even date herewith, and
any other legal Loan Documents governing the consruction loan.
2. DISBURSEMENTS SCHEDULE. The construction loan purpose is to pay the
construction costs in connection with erecting and completing on the Premises
the following (called the "improvements"):
The amount of the construction loan may be advanced in installments, made at
Lender's sole discretion, according to the satisfactory completion of work as
follows:
o Purchase and install boilers and CO2 systems ........... $
o Upon arrival of materials .............................. $ 210,000.00
o Upon completion of boiler room #1 ...................... $ 50,000.00
o ......................................................... $ 37,500.00
o ......................................................... $
o ......................................................... $
=============
TOTAL ..................................................... $ 297,500.00
3. COMPLETION DATE. Construction work shall begin [immediately] [by
______________]. The improvements must be fully completed by 12/1/97. At its
sole option, Lender may extend the time for completing construction work, but
Lender shall have no obligation to do so.
4. QUALITY. All construction work shall be done according to the building plans
and specifications submitted to Lender. All work shall be performed in a good,
first-class, xxxxxxx-like manner to the satisfaction of Lender, and in
compliance with all applicable building codes, zoning and other legal and trade
standards and requirements. Materials and fixtures shall be of a quality
satisfactory to Lender, or as specified in building plans or specifications.
5. ADVANCES. All advances are at Lender's sole discretion and may be made only
upon the certified completion of work required for each particular installment
or the favorable report of Lender's representative.
Lender's sole discretion shall determine whether the quality and progress of
construction work is sufficient to entitle Borrower to request the next advance.
Lender shall have the right to require, at Borrower's expense, the approval of
any or all phases of the construction work by an engineer, architect or other
qualified professional acceptable to Lender. Lender's advance of funds does not
constitute acceptance or approval of any work performed or materials used, and
advances in the future may be denied for unsatisfactory work existing when a
previous advance was made.
Borrower shall request advances hereunder using such forms, procedures and
certifications, and taking such other action as Lender shall require in its sole
discretion from time to time. Lender is entitled to at least three days prior
notice of any request for an
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advance. In its sole discretion, Lender may advance the whole or any part of any
advance before it becomes due. Lender may advance the whole or any part of any
advance before it becomes due. Lender may advance to Borrower or directly to the
contractor, with notice to Borrower, at Lender's discretion. Lender shall have
no liability for any delay in advancing funds or determining the acceptability
of work performed.
6. ADVANCE MAY BE WITHHELD. Lender, in its discretion, may refuse to make an
advance if:
A. All work done at the construction site when the advance is requested
is not satisfactory to Lender; or if all materials and fixtures
usually finished and installed by that time are not actually finished
and installed; or if Lender has not had reasonable opportunity to
inspect the work completed or obtain other evidence required to
determine satisfactory completion.
B. There is any lien or encumbrance upon the Premises, other than the
Mortgage, or Lender has received notice of any other mortgage, lien or
encumbrance, unless such lien is authorized herein.
Before any advance is made, Lender may conduct a title rundown, at
Borrower's expense, to confirm that there are no changes from the date
the Mortgage was recorded; and/or require Borrower to procure and
deliver to Lender lien waivers from any or all contractors,
subcontractors, suppliers or others; or require such other proof that
the Premises have not become encumbered by any lien, judgment, notice
of contract or assignment of contract subsequent to the recording of
Lender's mortgage. The following liens on the Premises are authorized
by Lender: None.
C. Borrower is in default under the Note or Mortgage; or demand under the
Note has been made (if applicable); or Borrower is in violation of or
in default under any provision of this Agreement, the Note, Mortgage,
or any other legal Loan Document governing the construction loan,
unless such violation has been specifically waived in writing by
Lender.
7. LENDER'S REMEDIES. If construction of the improvements is discontinued at any
time, or if the work does not proceed according to schedule, or if none, at
reasonable speed, Lender (or its successors or assigns) may purchase materials
and employ workmen to complete and protect the work. If any mechanic's lien or
liens, judgement or assignment of contract is filed against the Premises or any
part thereof, Lender may pay and satisfy them. If any taxes, assessments, sewer
rents or water rates assessed against the Premises are unpaid when due, Lender
(or its successors or assigns) may pay the same. Payments made by Lender under
this paragraph shall be in Lender's sole discretion; and all such payments shall
be deemed to be evidenced by the Note and secured by the Mortgage as if they
were advances made to the Borrower.
8. BORROWER'S COVENANTS AND WARRANTIES. Borrower accepts the construction loan
upon the terms and conditions herein specified, and covenants to erect and
finish the improvements according to the plans and specifications previously
submitted to and approved by Lender, and in accord with all applicable local,
state and federal laws. Borrower covenants to prosecute the work with all
reasonable speed and diligence. Borrower further covenants and warrants to
Lender as follows: (A.) Borrower shall promptly begin construction, and shall
complete construction using due diligence and in full compliance with all
applicable specifications and requirements by the date specified herein. (B.)
All amounts advanced hereunder will be used for the purposes, as specified
herein. (C.) All improvements shall be constructed within the boundaries of the
Premises and shall meet all zoning and setback requirements. (D.) Borrower shall
maintain such insurance as may be required by Lender, including "All
Risk/Builder's Risk" insurance. All policies shall name Lender as mortgagee and
shall provide for at least 30 days prior written notice to Lender of any change
in coverage or of cancellation. (E.) Lender, its agents representatives,
successors and assigns, shall have free access to the Premises at all times and
the right to inspect the improvements and all of Borrower's records relating to
the improvements. (F.) Borrower shall immediately notify Lender in writing if
any: litigation; liens; citations for violations, complaints or orders by
governmental authorities are commenced or filed against the Premises or the
improvements; or if the improvements are damaged or destroyed by fire or any
other cause. (G.) Borrower shall not create or allow to exist any lien on the
Premises or the materials used in the improvements, whether superior or
subordinate to Lender's interest, without Lender's prior written approval. (H.)
Upon Lender's demand, Borrower shall promptly take such action or execute such
documents as may be required by Lender. (I.) Borrower will timely and completely
comply with and fulfill all of the terms and provisions to be complied with or
fulfilled by the borrower under this Agreement, the Note, Mortgage and all other
legal Loan Documents. (J.) Borrower further acknowledges and agrees that Lender
does not warrant, guaranty, certify or make any representations as to the
quality of the improvements, the workmanship, or the improvements conforming to
any design, specification(s), building code(s) or use(s). (K.) Each request by
Borrower for an advance hereunder shall constitute an affirmation that the
representations and warranties made in this Agreement and in the Note, Mortgage
and other legal Loan Documents remain true and correct as of the date of such
request and, unless Lender is notified to the contrary prior to disbursement of
the requested advance, will continue to be so on the date of such advance.
9. DEFAULT. The following shall be defaults under this Agreement: (A.) Sale,
assignment, mortgage or any other transfer of Borrower's interest in the
Premises, or in this Agreement, without the prior written consent of Lender,
including a contract of sale in which title does not pass; (B.) A petition is
filed by or against Borrower under any Chapter of the U.S. Bankruptcy Code or
any state insolvency or reorganization law; (C.) Default on any other mortgage
or lien upon the Premises; (D.) Material injury or destruction of the
improvements by fire or other casualty; (E.) The death, dissolution, merger,
insolvency or change in control of
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Borrower before receipt of the last advance; (F.) Failure to timely obtain any
permits or governmental approval necessary to the construction of the
improvements; (G.) Borrower's failure to keep any covenant, warranty or other
obligation of this Agreement, or in the Note, Mortgage or any other legal Loan
Document connected with the construction loan. (H.) The occurrence of any event
of default under the Note, Mortgage or any other legal Loan Document, or in any
obligation of Borrower to Lender. (I.) If in the opinion of the Lender, the
estimated cost of completing the improvements is in excess of the amount of
funds available to Borrower hereunder to complete such improvements.
10. LENDER'S RIGHTS UPON DEFAULT. In the event of any default: (A.) Lender may
refuse to make any further advances; (B.) At Lender's option, Lender may declare
the construction loan, as evidenced by the Note and Mortgage, immediately due
and payable and exercise all rights and remedies under the Note, Mortgage or
other legal Loan Documents or as otherwise available to Lender at law or in
equity; (C.) Lender, at its option, may continue to make advances without
becoming liable to make any other advances and without waiving any of the
Lender's right to demand payment of the indebtedness and without giving up any
of Lender's other rights or waiving them.
11. FINAL ADVANCE. Lender shall not be obligated to make a final advance
hereunder until it has received from the Borrower the following: (A.) If
requested, lien waivers in form and substance satisfactory to Lender; (B.)
Evidence that the improvements have been completed and are ready for use,
including a copy of the Certificate of Occupancy issued by the municipality
where the Premises is located; (C.) If requested, a survey of the Premises
showing that the improvements are within the boundary lines of the Premises and
that no encroachments exist.
12. LENDER HELD HARMLESS. Borrower hereby agrees to save, hold harmless and
indemnify Lender from and against any and all claims or liens for the price and
value of work, labor, service and materials now or hereafter done or furnished,
in and about the erection and completion of the improvements, or any cost or
expense growing out of the same. Borrower shall defend any action or proceeding
brought against Lender arising out of such liens or claims with an attorney of
Lender's choice.
IN WITNESS WHEREOF, the parties hereto have executed this Construction Loan
Agreement the day and year first above written.
Pocono Village Farms, L.P. Pocono Village Farms, L.P.
----------------------- ----------------------
Borrower by: J. Xxxxx Xxxx, Borrower by: Xxxxxx X. Xxxxxxxx,
Vice President Vice President
First Pioneer Farm Credit, ACA
---------------------------------
Title and Name: Xxxxx X. Xxxxx,
Vice President
STATE OF New Jersey )
) SS:
COUNTY OF Monmouth )
On this 10th day of March, 1997, before me the subscriber, personally
appeared J. Xxxxx Xxxx and Xxxxxx X. Xxxxxxxx*, to me personally known and known
to me to be the same person(s) described in and who executed the within
Instrument and they severally acknowledged to me that they executed the same.
*Vice Presidents of Pocono Village Farms, L.P.
_________________________________
Notary Public Xxxx X. Xxxxxx
My Commission Expires: July 6, 2000
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STATE OF New Jersey )
) SS:
COUNTY OF Monmouth )
On this 10th day of March, 1997, before me the subscriber, personally
appeared Xxxxx X. Xxxxx, to me personally known who, being by me duly sworn, did
depose and say that s/he resides at Phillipsburg, NJ, and that s/he is an
officer of First Pioneer Farm Credit, ACA, the corporation described in and
which executed the within instrument, that s/he knows the seal of said
corporation, that the seal affixed to said Instrument is such corporate seal;
that it was so affixed by order of the Board of Directors of said corporation,
and that s/he signed his name thereto by like order.
____________________________________________
Notary Public: Xxxx X. Xxxxxx
My Commission Expires: July 6, 2000
COGENTREX OF POCONO, INC.,
General Partner
By:_________________________________________
Xxxxxx X. Xxxxxxxx, Vice President-
Finance of Cogentrix of Pocono, Inc.
VILLAGE FARMS OF DELAWARE, L.L.C.,
General Partner, by Agro Power Development, Inc.,
Managing Member of Village Farms of
Delaware, L.L.C.
By:_________________________________________
J. Xxxxx Xxxx, Senior Vice President of
Agro Power Development, Inc.
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