CONSTRUCTION AND TERM LOAN AGREEMENT
This Loan Agreement is made on May 21, 1998, by BANK OF PENSACOLA, a
banking corporation, and its successors and assigns ("Lender"); HOME STAY LODGE
1, LTD., a Florida Limited Partnership, ("Borrower"); and XXXXXX X. XXXX, whose
address is 0000 Xxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 and CROWN GROUP, INC.,
0000 Xxxxx XxXxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 ("Guarantor").
RECITALS:
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WHEREAS, Borrower represents and warrants that Borrower is the owner of
a fee simple estate (such fee simple estate being hereinafter referred to as the
"Land") in the real properties situated in Escambia County, Florida, more
particularly described in Exhibit "A" (the "Realty"); and
WHEREAS, Borrower is or shall be in the process of constructing the
Improvements (as hereafter defined) on the Realty; and
WHEREAS, Borrower has requested Lender to lend certain money to
Borrower for the purpose of financing the construction of the Improvements on
the Realty, Various Engineering and other professional fees in connection with
the Project (as hereinafter defined), certain closing costs, and other expenses;
and
WHEREAS, Borrower and Guarantor have agreed to provide Lender with
certain collateral to secure the repayment of the Loan (as hereinafter defined);
and
WHEREAS, Lender has agreed to make and Borrower has agreed to accept
the Loan, subject to terms, provisions, and conditions hereinafter set forth;
NOW, THEREFORE, it is agreed by the parties as follows:
ARTICLE I.
DEFINITIONS
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As used in this Agreement and in the Exhibits hereto, the following
terms shall have the following meanings, unless the context otherwise requires:
1.1 Additional Future Advances: The meaning assigned in 7.3.
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1.2 Advance: The meaning assigned in Article IV.
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1.3 Agreement: This Construction and Term Loan Agreement and any
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written amendments or modifications thereto duly executed by all of the parties
hereto.
1.4 Architect's Certificate: The certificate of the Inspecting
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Architect required pursuant to the terms of this Agreement, as a prerequisite to
each Advance.
1.5 Budget: The total of the Construction Costs and Non-Construction
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Costs as estimated by Lender and Borrower to be necessary to enable Borrower to
complete the Project in accordance with the Plans.
1.6 Business Day: Any day on which banking institutions are open for
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business in Escambia County, Florida.
1.7 (Omitted).
1.8 Completion and Occupancy Advances: The meaning assigned in 4.7.
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1.9 Completion Date: Within two hundred seventy (270) days from May
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21, 1998.
1.10 Completion Contract: The two Agreements between Borrower and
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Contractor dated as of May 18, 1998.
1.11 Construction Costs: All costs for labor, materials, fixtures,
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other than Nonconstruction Costs, incurred and to be incurred in the development
of the Project, and as more particularly described in Exhibit "B" hereto.
1.12 Construction Loan Fund: The meaning assigned in 4.1.
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1.13 Contractor: Xxxxxx Construction Company.
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1.14 (Omitted).
1.15 Escrow Agreement: The escrow agreement, if any, between Borrower,
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Lender, and Title Company (or its duly authorized agent), relating to the
disbursement of the Advances.
1.16 Events of Default: As stated in Article VII hereof.
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1.17 Fee: The meaning assigned in 2.3.
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1.18 General Partner: The person or entity described in 3.1.
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1.19 Governmental Authority: Any municipal, county, state, or federal
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governmental authority or other governmental authority (domestic or foreign)
having or claiming jurisdiction over the Land, the Realty, the Improvements,
Lender, or Borrower.
1.20 (Omitted).
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1.21 (Omitted).
1.22 Guaranty: The guaranty agreements executed and delivered by
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Guarantor to Lender.
1.23 (Omitted).
1.24 Impositions: All (a) real estate and personal property taxes and
other taxes and assessments, water and sewer rates and charges, and all other
governmental charges and any interest or costs or penalties with respect
thereto, and charges for any easement or agreement for the benefit of the
Project, which at any time before or after the execution of the Security
Documents may be assessed, levied, or imposed on the Project or the rent or
income received therefrom, or any use or occupancy thereof, and (b) other taxes,
assessments, fees, and governmental charges levied, imposed, or assessed on or
against Borrower or any of its properties.
1.25 Improvements: The improvements to be made to the Realty,
consisting of any improvements now existing or hereafter erected on the Realty,
all of which are more particularly described in the Plans.
1.26 Inspecting Architect: W. Xxxxx Xxxxxx, or an Architect designated
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by Lender from time to time to perform the duties of Inspecting Architect as
provided herein.
1.27 Interest Reserve: The meaning assigned in 2.5.
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1.28 (Omitted).
1.29 (Omitted)
1.30 Loan: The $5,420,000.00 construction and permanent loan to be
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made by Lender to Borrower, pursuant to this Agreement.
1.31 Mortgage: The first mortgage and security agreement securing in
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part the Loan, dated of even date herewith, and all other documents and
instruments executed in connection with the Mortgage and this Agreement.
1.32 Non-Construction Costs: All costs, other than Construction Costs,
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incurred and to be incurred in development of the Project, and as more
particularly described in Exhibit "C".
1.33 Note: A certain promissory note, dated of even date herewith, made
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by Borrower to the order of Lender, in the principal amount of $5,420,000.00.
1.34 (Omitted).
1.35 (Omitted).
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1.36 (Omitted).
1.37 (Omitted).
1.38 (Omitted).
1.39 Organizational Agreements: The meaning assigned in 3.2.
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1.40 Permitted Encumbrances: The encumbrances stated in Exhibit "D".
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1.41 Plans: The architectural, structural, and mechanical engineering
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plans, drawings, and specifications for the completion of the Improvements
prepared by Borrower's Architect, and all supplements, amendments, and
modifications thereto and as more particularly described in Exhibit "E".
1.42 Premises or Project: An extended stay lodge facilities consisting
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of the Improvements to be constructed with the proceeds of the Loan, all located
on the Realty.
1.43 (Omitted).
1.44 Request for Advance. The Request for Advance on an AIA form, as
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may be amended from time to time, or such other form as Lender may require.
1.45 Security Documents: All other documents now or hereafter securing
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the repayment of the Loan, including, without limitation, those instruments
described in 2.2 hereof.
1.46 (Omitted).
1.47 Survey: The surveys prepared by Xxxxxxx Land Surveying, Inc., Job
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No's: 9801069 and 9801070, and all updated versions, supplements, and changes
thereto.
1.48 (Omitted).
1.49 (Omitted).
1.50 (Omitted).
1.51 (Omitted).
1.52 Title Company: Attorney's Title Insurance Fund, Inc., or its duly
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authorized agent.
1.53 Title Insurance Policy: The policy or policies of title insurance,
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issued by Title Company in favor of Lender, insuring the lien of the Mortgage.
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1.54 (Omitted).
1.55 (Omitted).
ARTICLE II.
LOAN, COLLATERAL, AND LOAN ORIGINATION FEE
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2.1 Loan. Borrower may borrow a principal amount not to exceed
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$5,420,000.00, for the purpose of providing a source of funds to enable Borrower
to construct and complete the Project and to pay certain closing costs and
development expenses. Borrower agrees to accept the Loan and to use the proceeds
thereof only as provided herein. The Loan shall be evidenced by the Note, with
principal and interest being payable as provided in the Note and the Mortgage.
2.2 Security for the Loan. The obligations of Borrower to repay the
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principal and interest on the Loan shall be secured by:
2.2.1 The Mortgage;
2.2.2 the Assignment of Rents, Leases, and Profits relating to
the Project dated as of even date herewith;
2.2.3 the Assignment of Construction Documents, Contracts, Rights
and Intangibles, dated as of even date herewith;
2.2.4 the UCC Financing Statements filed with the Clerk of
Escambia County and the Secretary of State of the State of Florida;
2.2.5 the Guaranty of each Guarantor;
2.2.6 any other documents providing collateral and security
that Lender and Borrower may agree on.
2.3 Loan Origination Fee. In consideration of Lender making the Loan,
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in addition to interest and any and all other payments due Lender under the Note
and this Agreement, Borrower has paid to Lender a nonrefundable loan origination
fee (the "Fee") in an amount equal to .5% of the principal amount of the Loan;
i.e., $27,100.00. The parties agree that the Fee is not a charge for the use of
money but is a charge for the purchase of the right to secure a loan of money.
It is agreed that the Fee was a material inducement for Lender to continue to
make the Loan and to be ready, willing, and able to fund the Loan in accordance
with the terms hereof. The Fee shall be in addition to all other payments
(including, without limitation, principal and interest), due and payable
pursuant to the terms, provisions, and conditions of the Note and this
Agreement.
2.4 Voluntary Prepayments. Borrower may, without penalty, prepay the
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indebtedness evidenced by the Note in whole or in part.
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2.5 Interest Reserve. Lender shall allocate the sum of $0.00 of the
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Loan to an interest reserve (the "Interest Reserve") to ensure payment by
Borrower of the interest due to Lender under the Loan. Lender shall disburse
from the Interest Reserve such amounts as may be necessary to pay interest on
the Loan on the first banking Business Day of each respective month that the
same becomes due under the terms of the Note, unless Borrower elects to pay such
interest in cash when due. It is understood that as long as there are sufficient
funds in the Interest Reserve, Borrower has the option of not paying such
interest in cash, but rather of having such interest paid from the Interest
Reserve and the amounts thus disbursed added to the outstanding amount of the
principal of the Loan. This option is given at Borrower's request and for the
benefit of Borrower and shall be deemed to have been exercised by Borrower
without the necessity of further documentation on each interest payment date
during the period that the Interest Reserve has sufficient funds. At any time
that interest payments on the Loan shall be due, Lender shall xxxx Borrower for
that interest and Borrower may either (a) pay the interest and request Lender to
reimburse Borrower for any such Interest so paid from, the Interest Reserve and
charge Borrower's account therefor, or (b) request Lender to advance any such
amount of interest due to itself from the Interest Reserve and simultaneously
charge Borrower's account therefor. Before any default in any of the terms,
covenants, and provisions of any of the documents evidencing and securing the
Loan, Lender shall, to the extent the Interest Reserve is sufficient, either (a)
advance any such amount of interest due to itself from the Interest Reserve and
simultaneously charge Borrower's account therefor, or (b) reimburse Borrower
from the Interest Reserve for any interest paid by Borrower, as may be requested
by Borrower under the terms hereof. The amount of the each payment out of the
Interest Reserve shall increase in respective amounts the then-outstanding
principal balance due on the Loan. When and if such Interest Reserve is
depleted, all monthly interest payments shall be paid by Borrower in cash. If at
the time the Final Advance under Paragraph 4.4 hereof is made there remain
undisbursed amounts in the Interest Reserve, such amounts shall be disbursed to
Borrower as part of the Final Advance.
2.6 (Omitted).
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
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Borrower represents and warrants to Lender as follows:
3.1 Organization, Formation, Power, Etc. (a) Borrower is a Florida
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limited partnership duly organized, validly existing, and in good standing under
the laws of Florida; (b) Borrower's sole general partner is HOME STAY LODGE,
INC., ("Corporate General Partner"), a corporation duly organized, validly
existing, and in good standing under the laws of Florida (sometimes referred to
as "General Partner"); (c) Borrower has the power and authority to own property
and to carry on its business in every jurisdiction in which the nature of its
business or its properties make such qualification necessary, and General
Partner has the power and authority to own property and carry on its business in
every jurisdiction in which the nature of its business or its properties make
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such qualification necessary; and (d) Borrower and General Partner are in
compliance with all laws, regulations, ordinances, and public authorities
applicable to them and have the full power and authority to consummate the
transactions contemplated herein.
3.2 Organizational Agreements. The partnership agreement and
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certificate of limited partnership of Borrower and the corporate charter and
bylaws of Corporate General Partner (collectively the "Organizational
Agreements") that have been given to Under have not been modified or amended
except by amendments of which Lender has been advised and furnished copies; and
the Organizational Agreements will not be, in any manner, materially changed,
modified, or altered without the prior written consent of Lender.
3.3 Corporate General Partner. All of the stock of Corporate General
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Partner is fully paid and non-assessable; there are no outstanding rights or
options to acquire any additional shares of Corporate General Partner's stock;
and the stock of Corporate General Partner is not subject to any commitments,
liens, or encumbrances.
3.4 Validity of Loan Instruments. The execution, delivery, and
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performance by Borrower of this Agreement, and the borrowing evidenced by the
Note, and the execution and delivery of the Mortgage and Security Documents (a)
have been duly authorized by all requisite corporate/ partnership action on the
part of General Partner and Borrower respectively; (b) do not require the
approval of any governmental authority; and (c) to Borrower'9 knowledge and
belief, will not violate any provision of law (including, without limitation,
any applicable usury law or similar law), any order or regulation of any court
or other Governmental Authority, or any indenture, agreement, or other
instrument to which Borrower is a party or by which it or any of its property is
bound, or be in conflict with, result in a breach of, or constitute (with due
notice and/or lapse of time) a default under any indenture, agreement, or other
instrument, or result in the creation or imposition of any lien, charge, or
encumbrance of any nature whatsoever on any of its property or assets, except as
contemplated by the provisions of this Agreement. The Security Documents
constitute the legal, valid, and binding obligations of Borrower and, to the
best of Borrower's knowledge and belief, are enforceable against Borrower in
accordance with their respective terms.
3.5 Financial Statements. All balance sheets, statements of profit and
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loss, and other financial data that have been given to Lender by Borrower or
Guarantor with respect to Borrower and Guarantor (a) are complete and correct in
all material respects; (b) accurately present the financial condition of said
entity and person as of the dates, and the results of its operations for the
periods, for which the same have been furnished; and (c) have been prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods covered thereby. All balance sheets disclose all known
liabilities, direct and contingent, as of their respective dates and there has
been no change in the condition of Borrower or such Guarantor, financial or
otherwise, since the date of the most recent financial statements given to
Lender with respect to Borrower and Guarantor, other than changes in the
ordinary course of business, none of which changes has been materially adverse.
3.6 Other Information. All other information, reports, papers, and data
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given to Lender by Borrower or Guarantor with respect to Borrower and Guarantor
are accurate and correct in all material respects and complete insofar as
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completeness may be necessary to give Lender a true and accurate knowledge of
the subject matter.
3.7 Other Agreements. To the best of their knowledge and belief,
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neither Borrower nor Guarantor is a party to any agreement or instrument
adversely affecting its present or proposed business, properties or assets,
operation, or condition, financial or otherwise, and Borrower is not in default
in the performance, observance, or fulfillment of any of the material
obligations, covenants, or conditions set forth in any agreement or instrument
to which it is a party.
3.8 Taxes: Borrower has filed all income tax returns required to have
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been filed by it and has paid all taxes that have become due pursuant to such
returns or pursuant to any assessment received by it, and Borrower does not know
of any basis for additional assessment in respect to such taxes.
3.9 Litigation. To the best of Borrower's knowledge, there is not now
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pending against or affecting Borrower or Guarantor, nor to the knowledge of
Borrower is there threatened, any action, lawsuit, or proceeding at law or in
equity by or before any Governmental Authority that, if adversely determined,
would impair or affect Borrower's financial condition or operations.
3.10 Title. Borrower has good and marketable title to a fee simple
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"state in the Realty, and is indefeasibly seized of the Improvements and such
tangible property as constitutes, or is or may be determined to be, fixtures or
equipment, in fee simple, in each case free and clear of any liens, charges,
encumbrances, security interests, and adverse claims whatsoever, except for the
Permitted Encumbrances.
3.11 Plans, Building Permit. The Plans have been or will be approved by
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each Governmental Authority having or claiming jurisdiction over the Land,
Realty, and Project and any other person whose approval of the Plans, in whole
or in part, may be called for by applicable undertakings of Borrower, and all
building permits and other required permits and approvals required before the
commencement of construction have been or will be obtained before the
commencement of construction, and all other permits and approvals required
subsequent to the commencement of construction will be obtained before
commencing the stage of construction for which any such permit or approval is
required. The Plans have been reviewed and approved by Borrower.
3.12 Zoning and Other Requirements. The constructing of the
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Improvements, in accordance with the Plans, conforms and will conform to all
zoning and other governmental regulations and to any covenants, conditions, and
restrictions contained in any deed or deeds covering or affecting all or any
portion of the Realty.
3.13 Utilities and Roads. All utility services necessary for the
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construction of the Improvements and the operation thereof for its intended
purpose are available to the Realty, including water supply, storm and sanitary
sewer facilities, electricity, and telephone facilities. All roads necessary for
the full utilization of the Improvements for their intended purposes have been
completed or all necessary steps have been taken by Borrower to ensure their
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completion or to ensure the complete construction thereof by the Completion
Date, and such roads will be available to Under and to tenants of the Project
for use by their vehicles without interruption (except interruptions caused by
construction in accordance with the Plans).
3.14 Other Financing. Borrower has not received any other financing
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for the acquisition of the Land or the construction of the Improvements.
3.15 Water and Sewer. There is, or will be, available before the
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Completion Date water and sewer lines to the boundaries of the Land so that the
Improvements may be connected to the water and sewer plants providing water and
sewerage services to the area in which the Land is located, and on the date
hereof, to the best knowledge of Borrower, such water and sewer plants have
adequate capacity to provide both adequate water and sewerage distribution,
collection, and treatment services for the Project. Such water and sewer lines
are adequate in size to service the Project and have been or will be installed
before the Completion Date in the rights of way abutting and adjoining the Land.
No private easements are required or necessary for the furnishing of water and
sewerage services to the Improvements, or if any private easements have been
obtained by recorded easement agreements, the agreements shall be approved by
the appropriate utility companies and Governmental Authorities having
jurisdiction over them.
3.16 Moratorium. To the best of Borrower's belief and based on due
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inquiry and the advice of engineers and architects, there is no moratorium or
like governmental order or restriction now in effect or contemplated with
respect to the Premises.
3.17 Environmental Laws. To the best of Borrower's belief and based on
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due inquiry and the advice of engineers and architects, the requirements of all
pollution and environmental control laws and regulations applicable to the
Premises and the use thereof have been and will be satisfied.
3.18 No Event of Default. No Event of Default exists under this
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Agreement or the Note, the Security Documents, or the Permitted Encumbrances,
and no event has occurred and is continuing that, with notice or the passage of
time or either, would constitute a default under any provision thereof. The
consummation of the transactions hereby contemplated and performance of this
Agreement and the Mortgage will not result in any breach of, or constitute a
default under, the Permitted Exceptions, or any mortgage, deed of trust, lease,
bank loan or credit agreement, corporate charter, partnership agreement, bylaw,
or other instrument to which Borrower or Guarantor is a party or by which either
of them may be bound or affected.
3.19 Sale of Securities and Land Sales. Borrower has not instituted,
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caused to be instituted, or been a party to, and, to the best of Borrower's
knowledge, there has not been, any public offering with respect to the Land
and/or the Improvements within the meaning of the Securities Act of 1933 and the
Securities Exchange Act of 1934. Borrower has complied with and will comply with
all laws and regulations of Florida applicable to the Project. Borrower has not
received any notice of commencement of any proceeding or investigation by any
Governmental Authority with respect to any offering of the Project. Borrower
will not institute, cause to be instituted, be an issuer or underwriter of, or
be a party to, an offering with respect to the Land, the Improvements, or
interests therein or in Borrower that is not exempt from the "public offering"
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requirements of the aforesaid acts and applicable Florida laws and regulations
without the prior written consent of Lender.
3.20 Priority of Lien on Personalty. No chattel mortgage, security
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agreement, financing statement, or title retention agreement (except those
executed in favor of Lender) has been or will be executed with respect to any
personal property, chattel, or fixture used in connection with the construction,
operation, or maintenance of the Premises.
3.21 Condition of the Project. The Premises are not now damaged or
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injured as a result of any fire, explosion, accident, flood, or other casualty.
3.22 Labor and Materials. All labor and materials contracted for in
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connection with the construction of the Improvements shall be used solely for
the construction of the Improvements.
3.23 Zoning. The Realty is zoned in accordance with all applicable
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governmental rules, ordinances, regulations, and laws so as to permit the
proposed Improvements and related amenities to be constructed thereon, and such
zoning and all other applicable laws and ordinances do not impose any setbacks
or other requirements that would make the construction infeasible; and Borrower
is not aware of any problem or requirement that would jeopardize the building
permits for the Improvements.
3.24 Improvements. The Improvements as of the date of this Agreement
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(if there be any) are free of any material defects in construction and are in
compliance with all applicable construction codes and other governmental
requirements. To the best of Borrower's knowledge and belief, all surveys, plot
plans, and other documents heretofore furnished by Borrower to Lender with
respect to the Realty and Improvements are accurate and complete as of the
respective dates thereof.
3.25 Construction Costs. To the best of Borrower's knowledge, the
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amounts of the Construction Costs and Non-Construction Costs are accurate, true,
and correct and are satisfactory to Borrower.
3.26 Construction Liens. As of the date hereof, no notice of
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commencement has been filed of record with respect to the Land, the Realty, or
the Improvements, and no claims of lien have been filed with respect to the
Land, the Realty, or the Improvements, and no other act or thing has been or
will be done with respect to the Land, the Realty, or the Improvements that
could, under any circumstances, give rise to any lien of a mechanic, material
supplier, contractor, subcontractor, or laborer, before the recording of the
Mortgage.
3.27 (Omitted).
3.28 Reaffirmation of Representations and Warranties. Each request by
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Borrower for an, Advance hereunder (a) shall constitute a reaffirmation that the
foregoing representations and warranties (except with respect to the warranties
contained in Paragraph 3.26) remain true and correct in all material respects as
of the date of such request and, unless Lender is notified to the contrary
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before disbursement of the requested Advance, will be so on the date of such
Advance, and (b) shall constitute Borrower's representation and warranty that
the information set forth in each such request and any certification by
Borrower's Architect supplied in connection therewith is true and correct and
omits no material fact necessary to make the same not misleading.
ARTICLE IV.
ADVANCES AND COMPUTATION AND PAYMENT OF INTEREST
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4.1 Purpose, Time, Place. Subject to the provisions of this Agreement,
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from time to time as work on the Project progresses, Lender shall make advances
on the Loan to Borrower, in aggregate principal amount not to exceed the Budget,
in the amounts specified in Paragraph 4.3 hereof for the purpose of paying
Construction Costs (the "Construction Loan Fund") and Non-construction Costs
incurred in connection with the Project (hereinafter an "Advance"); provided,
however, no more than the total certified Construction Costs approved by Lender
shall be disbursed at any time under the Loan, and Lender shall not be obligated
to make any Advance for work not completed before the Completion Date. Borrower
agrees that all Advances will be made by such means as Lender may from time to
time designate; however, Lender shall not be required to see to the proper
application of any such Advance and shall not incur any liability for any
failure of such proper application. Furthermore, following an Event of Default
and for as- long as such Event Of Default remains uncured (if cure thereof is
accepted by Lender), Lender reserves the right to disburse Advances directly to
contractors and subcontractors, and no further direction or authorization from
Borrower shall be necessary following an Event of Default to permit disbursement
directly to the contractors, subcontractors, and material suppliers, and all
disbursements so made shall satisfy pro tanto the obligations of Lender
hereunder. As a condition precedent to the initial Advance, Borrower shall
furnish to Lender a complete construction schedule and a current trade cost
breakdown of the entire Project, itemized as to trade items, trade descriptions,
and correct lists of all subcontractors and suppliers employed or to be employed
in connection with the construction of the Improvements.
Lender shall make Advances for materials that are stored on the
Premises but not affixed to or incorporated in the Improvements, if the
materials are securely stored and protected from and insured against theft,
vandalism, and the elements to Lender's reasonable satisfaction.
The Budget (also referred to as Schedule of Values) for the
Construction Costs is attached hereto as Exhibit B. The Non-Construction Costs
are described in Exhibit C. Notwithstanding anything else in this Loan Agreement
to the contrary, no disbursements will be made for Construction Costs or
Non-Construction Costs until Borrower has paid out of pocket (and provided
satisfactory receipts of payment to Lender) Three Hundred Twenty One Thousand
and No/100 Dollars ($321,000.00) in costs. The $321,000.00 shall not include any
payments for the appraisal, survey update, feasibility study, origination fee
and loan closing costs, all of which will be paid out of pocket by Borrower in
addition to the $321,000.00.
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4.2 Amount. Each Advance shall be based on a percentage of completion
of work in place and be in an amount equal to the lesser of (a) the amount of
the Non-Construction Costs and Construction Costs incurred since the date of the
then immediately preceding Advance (or since the date of commencement of the
Project in case of the initial Advance) that is then due and payable; or (b) an
amount that does not exceed the budgeted amount for such work in accordance with
the Budget. Lender may (but shall not be obligated to) make an on-site
inspection and review of construction to verify the percentage of completion and
certify any Request for Advance. The initial Advance may defray certain of
Borrower's costs incurred in improving and developing the Premises and marketing
the Project before the date of this Agreement; however, none of the foregoing
costs and expenditures shall have the effect of diluting Borrower's equity in
the Project and none shall exceed the budgeted amount for such items in
accordance with the Budget. Lender may deduct from any Advance the amount of any
retainages, initial fees, expenses, and deposits in accordance with the terms of
this Agreement.
4.3 Advances - Procedure. Lender will make advances hereunder no more
--------------------
frequently than once a month. On or before the 5th day of each month, unless
otherwise specified herein, Borrower shall deliver to Lender all of the
following:
4.3.1. A fully completed Request for Advance signed by
Borrower and Inspecting Architect (and such persons and entities indicated
therein), which shall constitute a representation and warranty that the work
stated therein has been performed in accordance with the provisions of this
Agreement, the Plans, and all contractual obligations of the parties therein
named as well as a representation and warranty that all conditions precedent to
the Requested Advance have been satisfied and that there is no Event of Default
hereunder.
4.3.2 Certificate from Inspecting Architect recommending the
amount to be disbursed, stating that the amount requested for Construction Costs
is correct for that stage of construction, and setting forth such details
concerning the construction of the Improvements, including but not limited to
(a) a statement that the portion of the Improvements then completed has been
constructed in a good and workmanlike manner and in compliance with the Plans
and all applicable laws, ordinances, and building codes; (b) a schedule of work
in place; (c) the extent of completion of the Improvements and the value
thereof; (d) the estimated costs of completing the Improvements in accordance
with the Plans; (e) a statement that sufficient work has been completed to
warrant the draw being requested; (f) a statement that the amounts indicated to
complete are accurate; (g) a statement that the remaining undisbursed funds in
the Construction Loan Fund are adequate to complete the Improvements; and (h) a
statement that there have been no material deviations from the Plans except as
approved in writing by Lender.
4.3.3 A sworn statement from Borrower setting forth the nature of
all Construction Costs and Non-Construction Costs for which the Advance is
requested and the names of the obligees in respect of such costs and the
respective amounts owing to each; and such evidence (including receipted
invoices, xxxxxxxx, and affidavits) that such costs have been incurred as Lender
may reasonably request.
12
4.3.4 Waivers, releases, or satisfactions of liens in form and
substance reasonably satisfactory to Lender, and such other evidence as Lender
may reasonably request showing that all outstanding claims for Construction
Costs, including claims of contractors, subcontractors, laborers, and material
suppliers, have been paid through the date of the preceding Advance, and will be
paid to date with the funds being currently advanced and that there are no liens
outstanding.
4.3.5 A current dated copy of the Survey, showing the proposed
location of all the Improvements on the Land and showing the location of the
completed Improvements and the certificate of the surveyor stating that they are
within the building lines and in compliance with any restrictions of record or
ordinances relating to the location thereof; however, Borrower shall be required
to provide only an initial boundary survey, a foundation survey as hereinafter
described, and an "as-built survey" as described in Paragraph 4.4.3 hereof,
unless the Title Company requires additional surveys. Within 10 days after
laying the foundation, Borrower shall provide Lender with a foundation survey,
certified to Borrower, Lender, and the Title Company, showing the location of
the foundation within the Realty and showing compliance with all governmental
and privately imposed setback or other restrictive construction requirements.
4.3.6 A current endorsement to the Title Insurance Policy (a)
increasing the aggregate amount of the policy by an amount equal to the Advance
then being requested; (b) confirming that the lien of the Mortgage remains a
valid first lien on the Premises; and (c) reflecting that no matters adversely
affecting title to the Land or Realty have been filed of record.
4.3.7 (Omitted).
4.3.8 Borrower will have submitted, and Lender and the
Inspector will have approved, detailed plans and specifications for the project
including without limitation, the site plan and the interior layout
(collectively, the "Plans and Specifications"), stamped and certified as true
and correct by the architect, engineer, designer or planner who has prepared the
same, and approved by all necessary government and private authorities and
agencies. All plans and specifications must comply with all applicable building
codes and the Americans with Disabilities Act of 1990, Public Law 101-336,42
U.S.C. 12101.
4.3.9 Upon Lender's request, Borrower will have submitted and
Lender and the Inspector will have approved a schedule of equipment necessary
and sufficient to fully equip and operate the project for its intended use.
4.3.10 Upon Lender's Request, a bar graph or critical path
construction schedule setting forth the anticipated starting dates and
completion dates of the various elements and categories of the work in
constructing, equipping and completing the project.
4.3.11 (Omitted).
4.3.12 An agreement is to be executed by both Borrower and
General Contractor providing for the assignment of Borrower's rights and
interests under the Construction Contract in the event of default by the
Borrower.
13
4.3.13 Borrower will have entered into and Lender will have
approved contracts or agreements with architects, engineers, designers and
planners to provide the architectural, engineering and design services required
for completion of the project, with such architects, .engineers, designers and
planners as are approved by Lender.
4.3.14 Lender will have received Certificates of Borrower's
Architects and engineers containing a detailed listing and description of the
Plans and Specifications and certifying to the effect that: (i) when completed,
the project will comply with all currently applicable building codes and laws
(including, without limitation, the Americans and Disabilities Act of 1990,
Public Law 101-336, 42 U.S.C. 12101), ordinances, rules and regulations, and
with all covenants, conditions, easements and restrictions to which the project
is subject, (ii) that any and all required licenses, certificates, consents and
permits for, and approvals of, the project and the Plans and Specifications have
been issued by all governmental and private authorities and agencies having
jurisdiction thereof, (iii) that there is adequate and sufficient water, storm
sewer, sanitary sewer, gas, electrical and telephone service available to the
project without the necessity of any off-site improvements, and without the
necessity of any on-site improvements other than those provided for in the
approved Plans and Specifications and the Project Cost Budget, and (iv) that the
amounts set forth in the Project Cost Budget are adequate and sufficient for the
final completion and equipping of the project.
4.3.15 The Borrower will have obtained and delivered to Lender
consent agreements, in form and substance satisfactory to Lender and Lender's
counsel, of all contractors, architects and engineers engaged by the Borrower in
connection with the Improvements. Such consent agreements will provide that the
rights and liens of such persons are subordinate to Lender's rights and mortgage
lien, that Lender will be entitled to use all plans and specifications,
drawings, and other documents prepared by such parties to complete the
Improvements in the event of a default under the loan by the Borrower, and that
each such party will perform for Lender its obligations with respect to the
project under the same terms contained in its agreement with the Borrower if the
Borrower defaults under the loan and Lender elects to complete the Improvements.
4.3.16 (Omitted).
4.3.17 (Omitted).
4.3.18 (Omitted).
4.3.19 Upon Lender's request, Borrower or Borrower's project
General Contractor will furnish to Lender performance and payment bonds in form
and content satisfactory to Lender in an amount equal to one hundred percent
(100%) of the stipulated sum or guaranteed maximum contract price of the
Improvements under the General Contract, issued by a bonding company
satisfactory to Lender with a dual-obligee rider naming Lender as co-oblige. Any
and all conditions in the payment and performance bond(s) must be approved by
the Lender, and must comply with the following terms:
14
4.3.19.1 The construction contractor must given written notice
to the Lender of any alleged default by the Borrower/Owner under Title Contract
or any other contract documents relating to the Contract.
4.3.19.2 The Lender will have not less than sixty (60) days after
receipt of such notice or such time as is reasonably necessary to cure such
default, whichever is greater. Failure to give such notice will constitute a
waiver of such default and the bond will remain in full force and effect
notwithstanding the Owner's alleged default.
4.3.19.3 (Omitted).
4.3.19.4 Claims submitted to arbitration will not constitute
defaults.
4.3.19.5 Any changes or modifications in or under the Contract or
the other contract documents will not release the surety.
4.3.19.6 The surety will waive any defense of timeliness of
completion of time extensions are granted by the Borrower/Owner to the
contraction contractor.
4.3.20 Borrower will provide satisfactory evidence td" Lender that
(i) the architect/engineer maintains professional liability (errors and
omissions) insurance in an amount satisfactory to Lender, (ii) the General
Contractor maintains xxxxxxx'x compensation insurance and public liability
insurance (if applicable), and (iii) such other insurance as may be required by
Lender in connection with the Mortgaged Premises.
4.3.21 Lender will have been furnished with copies of all
construction and/or building permits or written evidence satisfactory to Lender
and all applicable governmental and regulatory authorities that all necessary
licenses, permits and approvals have been issued by all governmental and
regulatory authorities to permit construction of the Improvements and use of the
project for the intended purposes. (Except for any amounts to be disbursed by
Lender at closing, no further amounts will be disbursed by Lender until Borrower
has obtained the building permit and all other permits necessary to construct
the Improvements).
4.3.22 A satisfactory current appraisal of the Realty and
Improvements by an appraiser acceptable to Lender in an amount not less than
Seven Million Four Hundred Thousand Dollars ($7,400,000.00). Lender, on behalf
of itself and its appraisers, reserves the right to enter onto the Mortgaged
Premises at reasonable times during the term of the Loan for the purposes of
inspecting and appraising the Mortgaged Premises. All such appraisal costs and
fees will be paid by Borrower, provided, however, Borrower will have no duty or
obligation to pay for an appraisal during the sixteen (16)-month period
following closing, or for more than one (1) such appraisal in any sixteen
(16)-month period thereafter. If Lender is required by any federal or state
authority or by Lender's auditors, or if the Loan is in default, additional
appraisals at Borrower's expense may be required.
15
4.3.23 Such other instruments, documents, and certificates as
Lender may reasonably request.
4.4 Final Advance. At least 10 days before the date of the Final
--------------
Advance with respect to the Improvements described in the Construction Contract,
and following the substantial completion of the Improvements, unless otherwise
specified herein, Borrower shall deliver to Lender all of the following:
4.4.1. The documents, instruments, and certificates required by
subparagraphs 4.3.1-4.3.7.
4.4.2. A final Certificate of Inspecting Architect stating (a)
that the construction of the Improvements has been completed in a good and
workmanlike manner and in compliance with the Plans (including, but not limited
to, the equipping, furnishing, and fixturing of the Improvements, all clearing,
landscaping, lighting, and paving of the Premises) and all applicable laws,
ordinances, and building codes; and (b) such other details concerning the
construction of the Improvements as Lender shall request.
4.4.3. A final currently dated copy of the Survey, showing the
location of all the Improvements evidencing that the same are in compliance with
any restrictions of record or ordinances relating to the locations thereof; and
final "as-built" Plans of the-Improvements.
4.4.4. The final and unconditional acceptances of the
Improvements, or appropriate portions thereof, by the appropriate Governmental
Authority to the extent that any such approval is a condition to the lawful use
of the Improvements and the sale or leasing of the same to the public; or a
letter from the appropriate Governmental Authority to the effect that no such
certificate or other approval is issued by it, accompanied by Borrower's
certificate that no notices of any claimed violations of ordinances have been
served on Borrower.
4.4.5. Certified copies of all maintenance/warranty bonds, if any,
with respect to the Improvements as may be required by applicable Governmental
Authority.
4.4.6. Final construction lien affidavits from Borrower and
Borrower's general contractor disclosing that all persons, firms, and
corporations who have supplied labor and materials with respect to the Project
have been paid in full, which affidavits shall have attached to them recordable
final releases of lien from all such persons, firms, and corporations.
4.4.7. A letter from Borrower stating that Borrower (a) has
inspected the Improvements and is satisfied that they have been completed in
accordance with the Plans; (b) accepts the work as completed, or if there is a
dispute between Borrower and any contractors, setting forth the nature of such
dispute and the amount disputed, which amount shall be withheld by Lender
pending resolution of such dispute; and (c) waives any action against Lender for
payment of Construction Costs on work that Borrower may later consider to be
substandard or unsatisfactory.
16
4.4.8. A current endorsement to the Title Insurance Policy (a)
increasing the aggregate amount of the policy by an amount equal to the Advance
then being requested; (b) confirming that the lien of the Mortgage remains a
valid first lien on the Premises; and (c) reflecting that no matters adversely
affecting title to the Land or Realty have been filed of record.
4.5 (Omitted).
4.6 (Omitted).
4.7 (Omitted).
4.8 Conditions of Advances. Anything contained herein or in any other
----------------------
agreement between Borrower and Lender to the contrary notwithstanding, Lender
shall not be obligated to make an Advance hereunder if, on the date such Advance
is to be made, any of the following conditions exist:
4.8.1. Borrower shall be unwilling or unable to pay for that
portion of Construction Costs and Non-Construction Costs then due and payable
that will not be covered by the Advance.
4.8.2. There is of record any mortgage, lien, charge, or other
encumbrance on the Premises other than the lien of the Mortgage and the
Permitted Encumbrances, or there is any mortgage, lien, charge, or other
encumbrance not of record that, in the reasonable opinion of Lender, may
constitute a cloud on the title to the Premises, render such title unmarketable,
or otherwise invalidate or adversely affect the lien of the Mortgage.
4.8.3. There is any litigation or proceedings pending or
threatened that may affect the validity or priority of the lien of the Mortgage
or that may materially affect Borrower's ability to perform its obligations
under this Agreement or any other agreement relating to the Premises.
4.8.4. Any of the representations and warranties set forth in
Article III hereof shall prove to have been false or misleading in any material
respect as of the date on which such representation or warranty was made.
4.8.5. The portion of the Improvements theretofore constructed
shall have been destroyed or materially damaged by fire or other casualty and
either (a) Lender shall not have received insurance proceeds `sufficient in the
judgment of Lender to effect the satisfactory restoration of the Improvements
and to permit the completion thereof before the Completion Date; or (b) Borrower
shall not have agreed to fund any deficit as estimated by Lender and in a manner
satisfactory to Lender to effect the satisfactory restoration to the
Improvements and to permit the completion thereof before the Completion Date.
4.8.6. (Omitted).
4.8.7. Borrower shall fail to deliver any of the instruments,
documents, certificates, and opinions required pursuant to the provisions of
Paragraph 4.3 hereof.
17
4.8.8. Lender shall determine that there will not be available by
the Completion Date (a) adequate road access to the improvements; (b) adequate
potable water supply meeting all governmental and fire underwriter requirements;
(c) adequate sanitary sewer collection and disposal services meeting all
governmental requirements; and (d) all other public utility services
contemplated to be necessary or desirable for the improvements.
4.8.9. Lender shall determine that the undisbursed portion of the
Loan is insufficient to fully complete the Improvements (including the Tenant
Improvements) in a lien-free condition before the Completion Date and to pay or
provide for all reasonably anticipated NonConstruction Costs through the
maturity of the Loan, and Borrower is unwilling or unable to fund such deficit
on Lender's request therefor.
4.9 (Omitted)
4.10 Initial Advance. Without limiting any of the other terms,
provisions, and conditions hereof, the initial Advance hereunder shall not be
made until Borrower has delivered to Lender the following (each of which shall
be in form and substance acceptable to Lender): (a) such surveys, plats, plans,
and reports with respect to the Premises as Lender may reasonably require; (b)
such permits, certificates, instruments, additional or supporting documents,
and-other information with respect to the operations and affairs of Borrower and
the Premises as set forth in the Commitment and as Lender shall reasonably
require; and (c) opinions of counsel for Borrower in form, scope, and substance
satisfactory to Lender.
ARTICLE V.
AFFIRMATIVE COVENANTS
Borrower hereby covenants and agrees that, from the date hereof and
until Lender shall have no further obligation to make Advances and until all
Construction Costs, Non-Construction Costs, and other indebtedness and
obligations incurred in connection therewith shall have been paid, performed,
and discharged in full:
5.1 Payment of Construction Costs and Non-Construction Costs. Borrower
--------------------------------------------------------
shall promptly pay all Construction Costs and Non-Construction Costs incurred in
connection with the Premises as and when the same become due and payable, paying
for the same with the proceeds of the Loan advanced from time to time and with
its own funds to the extent the same are not covered by the proceeds of the
Loan.
5.2 Additional Investment: Payment. Before any disbursement of the Loan
------------------------------
proceeds is made, Borrower shall, if required by Lender, pay an amount to the
Construction Loan Fund equal to the difference between the amount of the Loan
and the estimated cost of construction and completion of the Project as
determined by Lender. If the estimated cost of completing the Project, as
determined by Lender, shall at any time exceed the undisbursed portion of the
Loan, Borrower shall pay an amount equal to such excess. Any amounts determined
18
in accordance with the foregoing shall be paid to contractors, suppliers,
material suppliers, and laborers before any additional Loan proceeds are paid
out or disbursed. Notwithstanding anything to the contrary contained in this
Agreement, the Note, or the Security Documents, if Lender shall, at any time,
determine and notify Borrower that the amount of money remaining undisbursed
under the Loan is less than the amount required to fully complete and pay for
the Project, including the payment of all Construction Costs (including Tenant
Improvements), Non-Construction Costs, and Loan interest, and Lender demands
that Borrower pay an amount equal to such deficiency, as determined by Lender,
Borrower shall comply with such demand and pay such deficiency to the
Construction Loan Fund before any additional Advances are made under the Loan.
Lender and Borrower agree periodically to reevaluate the Budget, and any savings
or deficiencies determined as a result of any such reevaluation will be taken
into account in determining the amount of any additional investments required by
Borrower pursuant to the provisions of this paragraph.
5.3 Contracts, Subcontracts, Etc. Borrower shall deliver to Lender for
-----------------------------
its approval upon request by Lender (a) copies of all construction contracts and
subcontracts relating to the Project, and any change orders thereto, and if in
the reasonable judgment of Lender such contracts do not cover all of the work
necessary to substantially complete the Project, Borrower shall obtain firm bids
from responsible parties, or estimates and other information reasonably
satisfactory to Lender, for the work not so covered, to enable Lender to
ascertain the total estimated cost of all work done and to be done; (b)
invoices, bills of sale, statements, receipted vouchers, or agreements under
which Borrower claims title to any materials, fixtures, or articles used in the
construction of the Improvements; (c) a list of all unpaid bills for labor and
materials with respect to construction of the Improvements; and (d) budgets of
Borrower and revisions thereof showing estimated costs of construction of the
Improvements and funds required at any given time to complete and pay for such
construction.
5.4 Construction. Borrower shall commence construction of the
------------
Improvements within 30 days after the date of this Agreement (and in any event
within 30 days after the issuance of a building permit with respect thereto),
and thereafter shall diligently and continuously proceed toward the completion
of the Project in a sound and workmanlike manner so that it will be completed on
or before the Completion Date (a) strictly in accordance with the Plans (with
only such changes therein as are approved in writing by Lender, except that
until the aggregate value of all change orders equals or exceeds $50,000,
individual change orders in an amount not exceeding $10,000 shall not require
Lender's prior written approval, but copies thereof shall be promptly provided
to Lender and Inspecting Architect); (b) in accordance with existing zoning
ordinances or existing variances thereof and in compliance with all building and
use restrictions applicable to the Premises and all other applicable laws,
rules, permits, ordinances, regulations, or restrictive covenants or
requirements of Governmental Authorities; and (c) free and clear of all adverse
claims and liens, encumbrances, and security interests other than the liens of
the Mortgage and the Permitted Encumbrances.
5.5 Performance of Obligations. Borrower shall duly pay, perform, and
--------------------------
discharge all of its other obligations hereunder, under the Note, and any other
agreement between Borrower and Lender.
19
5.6 Inspections. Lender may enter on the Realty at any reasonable
-----------
time and from time to time, to do the following:
5.6.1. Inspect the same and all materials used in construction of
the Improvements or stored on the Premises.
5.6.2. Examine or copy (a) all plans, specifications, shop
drawings, and work details that are or may be kept on the Realty; (b) all of
Borrower's books, records, and accounts relating to work contracted for and
materials ordered and received, and all disbursements and accounts payable in
connection with the Improvements; (c) certificates and reports of inspecting
architects, Architects, and public officials; and (d) all subcontracts, bills,
bank accounts, and records pertaining to same, and papers pertaining to the
Improvements. To the extent to which they lawfully may do so, all interested
Governmental Authorities shall be permitted access to enter on the Realty at any
reasonable time to inspect the Improvements and all materials used in
construction of the Improvements or stored on the Premises.
5.7. Fire and Extended Coverage Insurance. Borrower shall keep the
--------------------------------------
Improvements and all material (installed and uninstalled), supplies, and other
personal property on the Realty insured against loss or damage by fire,
vandalism, burglary, theft, mysterious disappearance, malicious mischief, riot,
earthquake, and other hazards insured against by a standard form of extended
coverage insurance and such other insurance (including, but not limited. to,
flood) as may be specified by Lender from time to time, in amounts, and with
insurance companies authorized to do business in Florida, that are approved by
Lender. Each insurance policy shall be in the so-called "Builder's Risk 100%
Completed Value Non-Reporting" form and shall provide that (subject to the
rights of the landlord under the Ground Lease) (a) losses will be adjusted as
provided in the Mortgage; (b) loss payments will be payable to Lender alone and
applied as provided in the Mortgage; (c) the interest of Lender shall be insured
regardless of any breach or violation by Borrower of any warranties,
declarations, or conditions contained in such policy; and (d) if such insurance
is canceled or materially changed for any reason, the insurer shall promptly
notify Lender and such cancellation or change shall not be effective as to
Lender for 30 days after receipt by Lender of such notice. Borrower shall
deliver to Lender copies of each policy upon the execution hereof, and copies of
each renewal policy not less than 30 days before the expiration of the original
policy or preceding renewal policy (as the case may be), and deliver to Lender
receipts or other evidence that the premiums have been paid. The form and
content of all insurance policies required under this Agreement shall be
satisfactory to Lender as to form and content.
5.8. Public Liability Insurance. Borrower shall carry and cause all
----------------------------
contractors to carry comprehensive public liability and property damage
insurance in connection with the Project, and during construction, contractor's
protective liability insurance (including explosion and collapse coverage) and
comprehensive automobile liability insurance covering all motor vehicles, owned
and non-owned, used in connection with the Project. Each insurance policy issued
in connection with the Project shall name Lender as an "Additional Insured" and
"Mortgagee/Loss Payee" and provide that if such insurance be canceled or
materially changed for any reason, the insurer shall promptly notify Lender, and
such cancellation or change shall not be effective as to Lender for 30 days
after receipt by Lender of such notice. Borrower shall deliver to Lender copies
of each policy upon the execution thereof, and copies of each renewal policy not
20
less than 30 days before the expiration of the original policy or preceding
renewal policy (as the case may be), and deliver to Lender receipts or other
evidence that the premiums have been paid. All policies shall be in amounts and
with insurers and in a form acceptable to Lender.
5.9. Workers' Compensation Insurance. Borrower shall carry or cause all
-------------------------------
contractors to carry workers' compensation and employer's liability insurance
covering all liability in connection with the Project under applicable workers'
compensation laws, and deliver to Lender a certificate indicating that the
policy or policies evidencing such insurance have been issued.
5.10. Flood Insurance. Borrower shall comply with the requirements of
---------------
the Flood Disaster Protection Act as and when required.
5.11. Proceedings. Borrower shall notify Lender of the institution of
-----------
any proceedings at law or in equity against Borrower or Guarantor, including,
but not limited to, any proceedings to assert or to enforce mechanics', material
suppliers', or other involuntary liens.
5.12. Compliance with Laws. Borrower shall promptly and faithfully
--------------------
comply with, conform to, and obey all present and future laws, ordinances,
rules, regulations, and requirements of every Governmental Authority.
5.13. Payment of Impositions. Except with respect to contests permitted
----------------------
in accordance with the terms of the Mortgage, Borrower shall pay the Impositions
not later than the due date thereof, or on the day any fine, penalty, interest,
or cost may be added thereto or imposed by law for the nonpayment thereof (if
such day is used to determine the due date of the respective item); however, if
by law any Imposition may be paid in installments (whether or not interest shall
accrue on the unpaid balance of such Imposition), Borrower may pay the same in
installments. Borrower also shall pay and discharge promptly all taxes,
assessments, and governmental charges or levies imposed on Borrower or on its
income, receipts, or any of its properties before the same shall become in
default.
5.14. Existence, Properties, Etc. Borrower shall do all things
------------------------------
necessary to maintain (a) its existence as a limited partnership under the laws
of Florida; (b) all qualifications or licenses, if any, required for the conduct
of its business; and (c) the existence of the Corporate General Partner as a
corporation under the laws of Florida.
5.15. Notice. Borrower shall give prompt written notice to Lender (a)
------
of any action or proceedings instituted against Borrower or Guarantor in any
court or by any commission or other regulatory body, or of any such proceedings
threatened against Borrower or Guarantor in writing that might result in a
judgment or judgments in excess of $10,000; (b) of any other action, event, or
condition known to Borrower or of which it should have knowledge that
constitutes an Event of Default under this Agreement or that, with notice or
lapse of time or both, would constitute such an Event of Default, or a default
of Borrower under any other contract, instrument, or agreement to which it is a
party or by which it or any of its properties or assets may be bound or to which
any may be subject, which default might have an adverse effect on the business,
21
operations, properties assets, or conditions (financial or other) of Borrower or
Guarantor; and (c) any change in the condition of Borrower or Guarantor that
materially and adversely affects the ability of Borrower or Guarantor to perform
under this Agreement, the Note, or any of the Security Documents.
5.16. Hold Harmless. Borrower shall defend, at its own cost, and hold
-------------
Lender harmless from, any action, proceeding, or claim affecting the value of
the Note.
5.17. Books and Records. Borrower shall maintain complete books of
-----------------
account and other records reflecting the results of its operations (in
conjunction with its other operations as well as its operation of the Project),
in accordance with generally accepted accounting principles. At any time and
from time to time, Borrower shall deliver to Lender such other financial data as
Lender shall reasonably request with respect to the ownership and operation of
the Project, and Lender shall have the right, at reasonable times and on
reasonable notice, to audit (at Lender's expense) Borrower's books of account
and records relating to the Project, all of which shall be made available to
Lender and Lender's representatives for such purpose, from time to time, at the
Project. If such statements or balance sheets are not received within the time
provided, Lender shall have the right to employ independent auditors of its
choice to inspect the books and other records of Borrower to obtain or verify
the necessary information, for which audit Borrower shall pay.
5.18. Personal Property. Borrower shall furnish to Lender from time
-----------------
to time as required by Lender evidence that all fixtures and equipment necessary
for the operation of the Premises have been or will be obtained and in place
at the time of completion of the Improvements.
5.19. Verification of Assets. Guarantor shall provide annual updates to
----------------------
their financial statements certified by the Guarantor, disclosing that, except
with respect to third-party arm's-length transactions for market value or gifts,
in either case having no material negative impact on Guarantor's net worth,
Guarantor has transferred no assets subsequent to the date of this Agreement.
ARTICLE VI.
NEGATIVE COVENANTS
Borrower covenants and agrees that, from the date hereof and as long as
any of the Advances shall not have been paid in full, as to both principal and
interest, it will not do or allow any of the following:
6.1. Materials, Fixtures, Etc. Borrower will not use or permit the
--------------------------
use of any proceeds of the Loan for the acquisition of materials, fixtures, or
equipment that are under lease or have been purchased on a conditional xxxx of
sale or to which Borrower does not have absolute and unencumbered title.
6.2. Plans. The Plans shall not be modified, without the prior
-----
consent of Lender, except as permitted in Paragraph 5.4 of this Agreement.
22
6.3. Other Financing. Borrower will not obtain other financing
---------------
(secured and unsecured) in connection with the Project without the prior consent
of Lender.
6.4. Limitation on Transfer of Assets by Guarantor. Except in
---------------------------------------------------
connection with third-party arm's length transactions for market value or gifts,
in either case having no material negative impact on Guarantor's net worth,
Guarantor will not transfer any of its assets during the term of the Loan
without Lender's prior written consent.
6.5. Transfer or Conveyance. Borrower will not sell, convey, transfer,
----------------------
or permit to be sold, conveyed, or transferred, any interest in or any part of
the Premises, and except as permitted in the Mortgage, no voluntary sale,
pledge, or other transfer of any interest in Borrower shall be effected, without
the prior written consent of Lender.
6.6. Change in Ownership of Borrower. There shall be no transfer of any
-------------------------------
interest of any general partner of Borrower, directly or indirectly (except as
permitted in the Mortgage and other than a transfer due to death or disability),
nor shall any new general partner be admitted to Borrower, without the prior
written consent of Lender.
6.7. Security Documents. Borrower will not create, incur, assume, or
------------------
permit any assignment, lien, pledge, or other encumbrance on any of the
collateral described in any of the Security Documents, or grant any interest or
equity therein other than to Lender.
6.8. Disposition of Rents. Borrower will not consent to or permit any
--------------------
sale, conveyance, or other disposition of any rents or other funds arising from
the Realty.
6.9. Maintenance of Improvements. Borrower will not fail to keep and
---------------------------
maintain or fail to cause to be kept and maintained in good order and repair any
portion of the Improvements.
6.10. Impairment of Premises. Borrower will not permit any action to
----------------------
be taken that would result in any material impairment of the value of the
Project.
6.11. Breach of Any Contract. Borrower will not commit any act, or
suffer or permit any act to occur, that would in any manner give rise to the
material breach of any term, covenant, or condition on Borrower's part to be
performed under any contract to which Borrower is a party or by which it is
bound, or that would have a materially adverse effect on the Premises or the
ability of Borrower or Guarantor to perform their obligations under the Security
Documents or Guaranties.
6.12. Judgments. Borrower will not permit any final judgment obtained
---------
against Borrower to remain unpaid for more than 30 days unless Borrower
transfers such judgment to substitute security in the manner provided by
Florida law.
6.13. Permitted Encumbrances and Prior Liens. Borrower will not amend,
--------------------------------------
modify, or permit to be modified or amended any provision of any document
evidencing, creating, or affecting the Realty, or any of the Permitted
Encumbrances.
23
ARTICLE VII
DEFAULT
-------
7.1. Events of Default. The following (continuing beyond any applicable
-----------------
specified curative period) shall constitute an "Event of Default" hereunder:
7.1.1. Default in Payment. Borrower's failure to pay any
--------------------
installment of interest on the Note or any other amounts required pursuant to
the terms of the Note when due and payable, or within any applicable grace
period, without notice or demand.
7.1.2. Performance of Covenants. Default in the due observance
------------------------
or performance of any covenant or agreement made by Borrower or Guarantor
hereunder or under any other agreement between Borrower and Lender, including
the Security Documents (other than payment of money), and such default shall
continue for a period of 15 days after written notice thereof from Lender to
Borrower (unless such default, if curable, requires work to be performed, acts
to be done, or conditions to be remedied that by their nature cannot be
performed, done, or remedied, as the case may be, within such 15-day period and
Borrower shall diligently and continuously process the same to completion, or
unless Lender's security reasonably will be materially impaired if Borrower does
not perform in less than 15 days, in which event Borrower shall have only such
period following demand in which to perform as Lender may specify).
7.1.3. Breach of Warranty. Any representation or warranty made
------------------
by Borrower under any statement, instrument, or certificate delivered by
Borrower or Guarantor to Lender pursuant to the provisions hereof, under any
other agreement among Borrower, Guarantor, and Lender, or between Borrower and
Lender, including the Security Documents, or otherwise, that shall be determined
by Lender to have been false or misleading in any material respect as of the
date on which the same was made.
7.1.4. Default under Mortgage. An Event of Default under the
------------------------
Mortgage that shall occur and be continuing.
7.1.5. (Omitted).
7.1.6. Delay in Construction. Borrower does not, in the
-----------------------
opinion of Lender, proceed continuously and diligently toward completion of the
Project; or the Project is discontinued or abandoned for a period of 15 days.
7.1.7. Cancellation of Building Permit. Borrower neglects, fails,
-------------------------------
or refuses to keep in full force and effect any building permit required in
connection with the Premises or notice is given that any such permit has been
canceled.
7.1.8. Destruction of Improvements. The Improvements are damaged
---------------------------
or destroyed by fire or other casualty and Lender determines that there is
reasonable doubt, by reason of such loss or damage or of delays in making
24
settlements with insurers, as to Borrower's ability to complete the Premises on
or before the Completion Date.
7.1.9. Injunction. The entry of an order or decree in any court
----------
of competent jurisdiction enjoining or delaying the construction of the
Improvements or completion of the Improvements or enjoining or prohibiting
Borrower or Lender from carrying out the provisions of this Agreement and such
order or decree is not vacated within 30 days.
7.1.10. Attachment. Except as expressly provided otherwise
----------
hereunder, an attachment or any other lien (construction or otherwise) against
the Land that is issued or entered and that remains undischarged or unbonded for
30 days after the filing thereof.
7.1.11. Levy On the Land or Realty. Levy is made under any
----------------------------
process on, or a receiver is appointed for, the Land or Realty or any other
property of Borrower.
7.1.12. Bankruptcy, Receivership, Insolvency, Etc. Borrower or
------------------------------------------
Guarantor commits an act of bankruptcy within the meaning of the Federal
Bankruptcy Code; or bankruptcy, receivership, insolvency, reorganization,
dissolution, liquidation, or other similar proceedings are instituted by or
against Borrower or Guarantor for all or any part of its property under the
Federal Bankruptcy Code or other law of the United States or of any state or
other competent jurisdiction (domestic or foreign) and, if against Borrower or
Guarantor, it shall consent thereto or shall fail to cause the same to be
discharged within 60 days.
7.1.13. Failure to Complete Project. Borrower fails to complete
---------------------------
the Project in accordance with the Plans on or before the Completion Date.
7.1.14. Improper Materials. If any of the materials, fixtures,
-------------------
or articles used in the construction of the Improvements or the appurtenances
thereto, or to be used in the operation thereof, are not substantially in
accordance with the Plans as approved by Lender.
7.1.15. Failure to Pay Other Debts. Borrower fails to pay any
-----------------------------
other debt related to the Project in a timely manner.
7.1.16. Notice by Borrower Pursuant to F.S. 622.04(1)b). Borrower
-----------------------------------------------
files for record a notice limiting the maximum principal amount secured by the
Mortgage to an amount less than the amount specified in Paragraph 1.01(d) of the
Mortgage.
7.2. Remedies. If an Event of Default shall occur and be continuing,
--------
Lender may, at its option, do any of the following:
7.2.1. Termination of Advances. Terminate any obligation of
-------------------------
Lender to make any further Advances.
7.2.2. (Omitted).
25
7.2.3. Acceleration. Declare all amounts previously advanced to
------------
Borrower hereunder and under the Note, and all interest accrued and unpaid
thereon, and all other amounts due under the Note and this Agreement, to be
immediately due and payable without presentment, demand, protest, or further
notice of any kind (all of which hereby are expressly waived), and Lender may
thereupon institute proceedings to collect the same and/or foreclose the
Mortgage.
7.2.4. Completion of Construction.
--------------------------
7.2.4.1 To the maximum extent permitted under the laws of
Florida, Lender shall have the right, but not the duty, in addition to the
rights or remedies afforded to Lender under the Mortgage (a) to enter on the
Premises and take possession thereof, complete the Improvements in accordance
with the Plans (with such changes therein as Lender may deem appropriate), and
take all action it deems necessary to protect the Premises, all at the risk,
cost, and expense of Borrower; (b) at any time discontinue any work commenced
with regard to the Project or abandon the project or change any course of action
undertaken by it; or (c) assume (but not be obligated to assume) any
construction contract made by Borrower in any way relating to the Project and
take over and use all or any part of the labor, material, supplies, and
equipment contracted for by Borrower, whether or not previously incorporated
into the Improvements.
7.2.4.2. In connection with any construction undertaken by
Lender pursuant to the provisions of this subparagraph 7.2.4, Lender may do any
of the following:
7.2.4.2.1. Employ builders, contractors, subcontractors,
architects, Architects, inspectors, and others for the purpose of furnishing
labor, materials, and equipment in connection with the Project.
7.2.4.2.2. Purchase all materials necessary or proper or
convenient for completing the Improvements.
7.2.4.2.3. Pay, settle, or compromise all bills or claims
that are or may become liens against the Premises, or any portion thereof, or
that have been or may be incurred in any manner in connection with the
completion of the Improvements or for the discharge of liens or encumbrances
on, or defects in, the title of the Premises or any portion thereof.
7.2.4.2.4. Execute all applications and certificates in the
name of Borrower that may be required by any construction contract.
7.2.4.2.5. Institute legal or other proceedings, and defend
actions or proceedings, as Lender shall deem appropriate in connection with the
Premises.
7.2.4.2.6. Take, delay in taking, or refrain from taking such
action hereunder as Lender may from time to time determine.
26
7.2.5. Enforcement of Security. Exercise its rights and
-------------------------
remedies under the Note, and any other agreement between Borrower and Lender,
including the Security Documents, in accordance with the respective terms
thereof.
7.2.6. Receiver. Appoint a receiver as a matter of strict
--------
right, for the purpose of preserving the Land and Realty and Project, preventing
waste, and protecting all rights accruing to Lender by virtue of this Agreement.
All expenses incurred in connection with the appointment of a receiver, or in
protecting, preserving, or improving the Land and Realty and Project, shall be
chargeable against Borrower and shall be enforced as a lien against the Land.
7.2.7. Guards. Employ security guards to protect and preserve
------
the premises and the materials located thereon.
7.2.8. Other. Cumulatively exercise any other remedy
-----
specifically granted hereunder or now or hereafter existing in equity, at law,
by virtue of statute, or otherwise.
7.3. Borrower's Liability for Expenditures and Advances. If Lender
-----------------------------------------------------
undertakes any of its rights in subparagraph 7.2.4, Borrower agrees that (a)
Lender may continue to make advances of the Loan that need not be in accordance
with this Agreement in such manner and for such purposes as Lender deems
advisable; and (b) Lender may make additional future advances (the "Additional
Future Advances") in such manner and for such purposes as Lender'-deems
advisable. The Additional Future Advances shall bear interest at the rate
specified in the Note from the date of disbursement, and the Additional Future
Advances and interest thereon shall be payable in accordance with the terms of
the Note. Borrower agrees that all of the advances made under the provisions of
this paragraph shall be deemed to have been advanced by Lender to Borrower and
all such advances shall be a portion of the Loan. For the purpose of Lender
exercising its rights under subparagraph 7.2.4, Borrower hereby constitutes and
appoints Lender its true and lawful attorney-in-fact with full power of
substitution and empowers said attorney or attorneys to execute, acknowledge,
and deliver any instruments and do and perform any acts such as referred to in
subparagraph 7.2.4 in the name and on behalf of Borrower. The powers vested in
said attorney-in-fact are coupled with an interest and cannot be revoked. Lender
shall indemnify Borrower for damages sustained by Borrower as a result of
Lender's gross negligence or willful and wanton misconduct in the conduct of its
powers pursuant to this subparagraph.
ARTICLE VIII
MISCELLANEOUS
-------------
8.1. Additional Rights of Lender.
---------------------------
8.1.1. Lender shall have the right to commence, appear in, or
defend any action or proceedings purporting to affect the Premises or its
furnishings or equipment or the rights or duties of the parties hereunder or the
payment of any of the Loan proceeds and, in connection therewith, to pay all
necessary expenses, including reasonable attorneys' and legal assistants' fees,
and any such sums paid or expended by Lender, plus interest thereon at the rate
27
applicable to Advances hereunder (as specified in the Note), shall be repaid by
Borrower to Lender on demand and shall be secured by the Security Documents.
8.1.2. If Lender determines that any work or materials are not in
material conformity with the Plans or ordinances, statutes, permits, and
regulations, and Lender's security is placed in jeopardy thereby, Lender may
stop the work and other replacement or correction regardless of whether such
work or materials have theretofore been incorporated into the Improvements.
8.1.3. For the purpose of exercising the rights granted by this
Paragraph 8.1, Borrower irrevocably constitutes and appoints Lender its true and
lawful attorney-in-fact, with full power of substitution, to execute,
acknowledge, and deliver any instruments and to do and perform any acts in the
name and on behalf of Borrower.
8.1.4. Any notices under this paragraph shall specify the
reason Lender is taking any of the acts and actions authorized under this
paragraph.
8.2. Lender's Rights Optional. Whenever in this Agreement Lender is
--------------------------
given the right to take any action or execute any instrument, Lender shall not
incur any liability for failure to exercise such right or for any delay in so
exercising such right.
8.3. No Representations by Lender. Lender has no obligation in
-------------------------------
connection with the Premises, except to advance the proceeds of the Loan. Lender
shall not be responsible for the performance, nonperformance, or delay in
performance of any contractor, subcontractor, or supplier of materials, or for
the quality of workmanship or materials, or for the failure to construct,
complete, protect, or insure the Improvements, or for the payment of any cost or
expense incurred in connection therewith, or for the performance or
nonperformance or delay in performance of any obligation of Borrower. Any
inspection by Lender, or the approval of any plans, contracts, or other
activities in the nature thereof, shall be only for the sole and separate
benefit of Lender and for the purpose of protecting the security of Lender, and
the same shall in no way be construed as a representation that there is
compliance on the part of Borrower or that the construction of the Improvements
is free from faulty material or workmanship. The fact that Lender makes
inspections shall not relieve Borrower from its duties to independently
ascertain that the Improvements are being completed in accordance with the
Plans, and Borrower has no right to rely on any procedures taken by Lender.
8.4. Loan Expenses. Borrower shall pay all costs and expenses in
--------------
connection with the Loan, including but not limited to brokers' fees and
commissions; lender's attorneys' and legal assistants' fees; documentary,
intangible, and other taxes; recording costs and expenses; cost of surveys,
appraisals, abstracting, policies of title insurance and any endorsements
thereto, and license and permit fees. Borrower shall indemnify and hold Lender
harmless from and against any and all costs, losses, liability, and expense
arising in connection with any of the foregoing. Borrower authorizes Lender to
use proceeds of the Loan to satisfy any of the costs and expenses referred to
herein, and no further direction or authorization from Borrower shall be
necessary to warrant disbursements in payment of the foregoing.
28
8.5. Further Assurances. Borrower agrees that after the execution and
------------------
delivery of this Agreement, it shall execute and deliver such further documents
and do such further acts and things as Lender may reasonably request in order to
fully effectuate the purposes of this Agreement.
8.6. Assignment. Lender may assign this Agreement and the other
----------
agreements contemplated hereby and all of its rights hereunder and thereunder,
and cause the assignee or any subsequent assignee to make any Advances not made
at the time of the assignment, and all the provisions of this Agreement shall
continue to apply to the Loan. Lender shall have the right to participate the
Loan with other lending institutions. Borrower shall not assign this Agreement
or the proceeds to be advanced hereunder. The rights of Borrower under this
Agreement are not assignable. Notwithstanding the foregoing, if Borrower does
make an assignment of this Agreement or of its rights hereunder, Lender may, at
Lender's option, continue to make Advances hereunder to Borrower or Borrower's
successors in interest in the Premises, and all sums so advanced shall be deemed
Advances made in pursuance and not in modification hereof and shall be evidenced
and secured by the Note and the Mortgage.
8.7. Rights, Remedies, Powers. Each and every right, remedy, and power
-------------------------
granted to Lender hereunder shall be cumulative and in addition to any other
right, remedy, or power herein specifically granted, now or hereafter existing
in equity, at law, by virtue of statute, or otherwise, and may be exercised by
Lender from time to time concurrently or independently and as often and in such
order as Lender may deem expedient. Any failure or delay on the part of Lender
in exercising any such right, remedy, or power, or abandonment or discontinuance
of steps to enforce the same, shall not operate as a waiver thereof or affect
Lender's right thereafter to exercise the same, and any single or partial
exercise of any such right, remedy, or power shall not preclude any other or
future exercise thereof or the exercise of any other right, remedy, or power. If
Lender shall have proceeded to enforce any such right, remedy, or power and such
proceedings shall have been determined adversely to Lender, in each such event
Borrower and Lender shall be restored to their former positions and the rights,
remedies, and powers of Lender shall continue as if no such proceedings had been
taken.
8.8. Modification, Waiver, Consent. Any modification or waiver of any
-----------------------------
provision of this Agreement or any consent to any departure by Borrower
therefrom shall not be effective in any event unless the same is in writing and
signed by Lender, and then such modification, waiver, or consent shall be
effective only in the specific instance and for the specific purpose given. Any
notice to or demand on Borrower in any event not specifically required of Lender
hereunder shall not entitle Borrower to any other or further notice or demand in
the same, similar, or other circumstances unless specifically required
hereunder. Any advance of Loan proceeds hereunder shall not constitute a waiver
of any of the conditions of Lender's obligations to make further advances nor,
in the event Borrower is unable to satisfy any such condition, shall any such
waiver have the effect of precluding Lender from thereafter declaring such
inability to be an Event of Default as provided in Paragraph 7.1.
8.9. (Omitted).
29
8.10. Further Assurances. Borrower agrees that after the execution and
------------------
delivery of this Agreement, it shall execute and deliver such further documents
and do such further acts and things as Lender may reasonably request in order to
fully effectuate the purposes of this Agreement.
8.11. Severability. If any provision of this Agreement shall be
------------
declared in contravention of law or void as against public policy, such
provisions shall be considered severable and the remaining provisions of this
Agreement shall continue in full force and effect.
8.12. [Omitted].
8.13. Entire Agreement. [Omitted].
----------------
8.14. Binding Effect. This Agreement, subject to the provisions of
--------------
Paragraph 8.6 hereof, shall be binding on and shall inure to the benefit of the
respective permitted successors and assigns of Borrower and Lender.
8.15. No Agency. Lender is not the agent or representative of Borrower,
---------
and Borrower is not the agent or representative of Lender, and nothing in this
Agreement shall be construed to make Lender liable to anyone for goods delivered
or services performed by them on the Realty or for debts or claims accruing to
them against Borrower. Nothing herein shall be construed to create a contractual
relationship between Lender and anyone supplying labor or materials to the
Realty; Lender's obligations are not for the benefit of or enforceable by any
successor to or assignee of Borrower except as specifically provided herein.
8.16. Agreement Solely For Benefit of Lender. Etc. All conditions
----------------------------------------------
precedent to the obligation of Lender to make Advances are imposed solely and
exclusively for the benefit of Lender and its assigns, and no other person shall
have standing to require satisfaction of such conditions in accordance with
their terms or be entitled to assume that Lender will refuse to make Advances in
the absence of strict compliance with any or all provisions thereof, and no
other person shall, under any circumstances, be deemed to be a beneficiary of
such conditions, any or all of which may be freely waived in whole or in part by
Lender at any time if in its sole discretion it deems it advisable to do so.
8.17. No Partnership or Joint Venture. Nothing contained herein nor
-------------------------------
the acts of the parties shall be construed to create a partnership or joint
venture between Borrower and Lender.
8.18. Public Announcement. A public relations announcement may be made
-------------------
by Lender regarding the making of this Loan to Borrower. In addition, during the
term of the Loan, Lender shall be entitled to place on the Premises a sign
notifying the public that Lender is providing the financing for construction of
the Improvements.
8.19. Receipt of Money. The receipt by Lender of any sum of money
------------------
pursuant to this Agreement with knowledge of the breach of any term, covenant,
or provision of this Agreement shall not be deemed a waiver of the breach.
Payment by Borrower or receipt by Lender of a lesser amount of any sum of money
herein stipulated shall be deemed to be on account of the next due payment under
30
the Loan or this Agreement. No endorsement or statement on any check, or any
letter accompanying any check, shall be deemed an accord and satisfaction, and
Lender may accept any payment or check without prejudice to Lender's right to
recover the balance of any payment or other money due under this Agreement or
pursue any of the remedies in this Agreement or the Security Documents provided.
8.20. Accrual of Interest Under the Note. Interest under the Note shall
----------------------------------
begin to accrue as of the date of disbursal or wire transfer by Lender,
notwithstanding whether Borrower shall receive the benefit of such money as of
that date and even if the money is held in escrow pursuant to the terms of any
escrow arrangement or agreement. When money is disbursed by wire transfer, the
money shall be considered advanced at the time of the transmission of the wire
rather than the time of receipt by the receiving bank.
8.21. Survival of Provisions. All covenants, agreements,
--------------------------
representations, and warranties made in this Agreement and the documents
delivered in support of the Loan shall be deemed to be material and to have been
relied on by Lender. They shall survive the execution and delivery to Lender of
the Note, the Security Documents, and the disbursement and advance of funds
pursuant to this Agreement.
8.22. Indemnification. Without limiting any of the other provisions
---------------
contained in the Agreement, the Note, or the Security Documents, Borrower agrees
to indemnify and hold Lender harmless against and with respect to any and all
liability, deficiency, damage, cost, or expense resulting from any
misrepresentation, material omission, breach of warranty or representation, or
the nonfulfillment of any covenant or agreement on the part of Borrower under or
relating to this Agreement, the Note, or the Security Documents, except damage,
cost, or expenses arising from Lender's gross negligence or willful and wanton
misconduct and any and all actions, lawsuits, proceedings, demands, assessments,
judgments, costs, legal and accounting fees, or other expenses incident of the
foregoing indemnification of Borrower pursuant to this paragraph.
8.23. Loan Proceeds Limitations. All Loan proceeds are to be used
--------------------------
solely in connection with the Project and for no other purpose.
8.24. Loan Funds. Lender shall not be required to segregate the Loan
----------
funds or to earmark such funds in any manner. The sole obligation of Lender
shall be to disburse the funds in accordance with this Agreement.
8.25. Materials for Construction. All materials delivered to the
--------------------------
Realty for use in the construction of the Improvements shall be considered
annexed to the Realty and shall become a part of the Realty as if actually
incorporated in the Improvements and shall be subject, as against Borrower and
all parties acting or claiming under them, to the rights, conditions, and
covenants to which the Realty and Improvements are subject under this Agreement
and the Mortgage. Nothing herein contained shall be construed to make Lender
responsible for any loss, damage, or injury to such materials nor for the
payment of the same.
31
8.26. Conflict With Note and Security Documents. In the event of any
------------------------------------------
conflict between the terms of the Note and Mortgage, and this Agreement, the
terms of the Note and Mortgage shall control and govern in all respects.
Whenever possible, the provisions of this Agreement shall be deemed supplemental
to and not in derogation of the Note or the Mortgage.
8.27. Rights of Third Parties. Lender makes no representations and
------------------------
assumes no obligations as to third parties concerning the quality of the
construction of the Improvements. In this regard, Borrower shall indemnify
Lender from any liability, claim, or losses resulting from the disbursement of
the Loan funds or from the condition of the Premises whether related to the
quality of construction or otherwise, and whether arising during or after the
term of the Loan. This paragraph shall survive the repayment of the Loan and
shall continue in full force and effect as long as the possibility of any
liability, claim, or loss exists.
8.28. Headings. The paragraph headings in this Agreement are intended
--------
for convenience only and shall not be taken into consideration in any
construction or interpretation of this Agreement or any of its provisions.
8.29. Assignment and/or Participation by Lender. Lender reserves the
------------------------------------------
right to assign, transfer, participate, pledge, hypothecate, or encumber, or any
combination thereof, all or any part of Lender's interest in this commitment or
any of the collateral and security instruments and documents mentioned herein
without Borrower's consent. Borrower agrees to assist Lender in completing any
documents necessary to accomplish any such transfer.
8.30. Consents. Whenever any provision of this Agreement or any of the
--------
Security Documents require Lender to approve, determine, opine, consent, or be
satisfied, such consent, determination, opinion, approval, or satisfaction shall
not be unreasonably withheld.
8.31. Brokerage Commissions. Any brokerage commissions or finder's fees
---------------------
in connection with the Loan and this Agreement and all of the transactions
contemplated hereby shall be payable by Borrower and not by Lender, and Borrower
agrees to forever indemnify, exonerate, and hold Lender harmless against any and
all claims of any broker or finder arising out of the transactions contemplated
hereby. Lender represents to Borrower that it has not dealt with any broker with
respect to the Loan and the transactions contemplated under this Agreement.
8.32. WAIVER OF JURY TRIAL. BORROWER, BORROWER'S GENERAL PARTNERS, AND
--------------------
ANY AND ALL GUARANTORS, SURETIES, ENDORSERS AND OTHER OBLIGORS UNDER THE NOTE
REFERRED TO IN THIS LOAN AGREEMENT (COLLECTIVELY REFERRED TO AS THE "OBLIGORS")
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY AGREE THAT:
(1) NEITHER THE BORROWER, NOR ANY OF THE OBLIGORS, NOR THEIR RESPECTIVE
HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS OR ASSIGNS, SHALL SEEK A JURY TRIAL IN
ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, CROSS-CLAIM OR OTHER ACTION OR PROCEEDING
ARISING FROM OR BASED UPON THIS LOAN AGREEMENT OR ANY OF THE LOAN DOCUMENTS.
32
(2) NEITHER THE BORROWER, NOR ANY OF THE OBLIGORS, NOR THEIR RESPECTIVE
HEIRS, LEGAL REPRESENTATIVES, SUCCESSORS OR ASSIGNS, SHALL SEEK TO CONSOLIDATE
ANY CLAIM AS TO WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY CLAIM IN WHICH A
JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED.
(3) THE PROVISIONS OF THIS SECTION 8.32 HAVE BEEN FULLY NEGOTIATED BY
THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS.
(4) NEITHER LENDER NOR ANY OFFICER, EMPLOYEE, ATTORNEY, AGENT OR OTHER
REPRESENTATIVE OF LENDER HAS IN ANY WAY AGREED WITH OR REPRESENTED TO BORROWER
OR ANY OF THE OTHER OBLIGORS THAT THE PROVISIONS OF THIS SECTION 8.32 WILL NOT
BE FULLY ENFORCED IN ALL INSTANCES.
(5) THIS SECTION 8.32 IS A MATERIAL INDUCEMENT FOR LENDER TO ENTER INTO
THE LOAN AND OTHER TRANSACTIONS EVIDENCED OR SECURED BY THIS MORTGAGE AND THE
LOAN DOCUMENTS.
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement
under seal on the date first above written.
BORROWER:
/s/ Xxxxxxx X. Xxxxxxx, Xx. HOMESTAY LODGE, LTD., a Florida
------------------------------ - limited partnership
Xxxxxxx X. Xxxxxxx, Xx
By: Home Stay Lodge, Inc.
/s/ Xxxx X. Xxxxxx
-------------------------------
Xxxx X. Xxxxxx By: /s/ Xxxxxx X. XxXxxxxx
-------------------------------
Its:
------------------------
Its Sole General Partner
LENDER:
/s/ Xxxx x. Xxxxxxxx BANK OF PENSACOLA
-------------------------------
Typed Name: XXXX X. XXXXXXXX
--------------------
/s/ Xxxx X. Xxxxxx By: [NAME UNREADABLE]
------------------------------- -------------------------------
Typed Name: XXXX X. XXXXXX Its: VICE PRESIDENT
-------------------- ------------------------
33
GUARANTORS:
/s/ Xxxxxxx X. Xxxxxxx, Xx. CROWN GROUP, INC.
------------------------------
Xxxxxxx X. Xxxxxxx, Xx.
By: /s/ Xxxxxx X. XxXxxxxx
/s/ Xxxx X. Xxxxxx -------------------------------
------------------------------ Its:
Xxxx X. Xxxxxx ------------------------
/s/ Xxxxxxx X. Xxxxxxx, Xx. /s/ Xxxxxx X. Xxxx
------------------------------ ----------------------------------
Xxxxxxx X. Xxxxxxx, Xx. XXXXXX X. XXXX
/s/ Xxxx X. Xxxxxx
------------------------------
Xxxx X. Xxxxxx
STATE OF FLORIDA
COUNTY OF ESCAMBIA
The foregoing instrument was acknowledged before me this 21st day of
May 1998, by Xxxxxx X. XxXxxxxx, the President of Home Stay Lodge, Inc., a
Florida corporation, the sole general partner of HOME STAY LODGE I, LTD., a
Florida limited partnership, on behalf of said partnership (____) who is
personally known to me or (X) who produced Texas drivers license as
identification.
/s/ Xxxxxxx X. Xxxxxxx, Xx.
------------------------------------
NOTARY PUBLIC - STATE OF FLORIDA
Typed Name: Xxxxxxx X. Xxxxxxx, Xx.
My Commission Expires: 00-00-00
XXXXX XX XXXXXXX
XXXXXX XX XXXXXXXX
The foregoing instrument was acknowledged before me this 21st day of
May 1998, by Xxxxxx X. Xxxxxxxx, Xx. the Vice President of BANK OF PENSECOLA, on
behalf of the Bank, (X) who is personally know to me or (____) who produced
_________________________________ as identification.
/s/ Xxxx X. Xxxxxx
------------------------------------
[NOTARIAL SEAL] NOTARY PUBLIC - STATE OF FLORIDA
Typed Name: XXXX X. XXXXXX
-------------------------
My Commission Expires: 02-23-00
--------------
00
XXXXX XX XXXXXXX
XXXXXX XX XXXXXXXX
The foregoing instrument was acknowledged before me this 21st day of
May 1998, by Xxxxxx X. XxXxxxxx the President of CROWN GROUP, INC., on behalf of
the said company, ( ) who is personally know to me or (X) who produced Texas
drivers license as identification.
/s/ Xxxxxxx X. Xxxxxxx, Xx.
[NOTARIAL SEAL] ------------------------------------
NOTARY PUBLIC - STATE OF FLORIDA
Typed Name: Xxxxxxx X. Xxxxxxx, Xx.
My Commission Expires: 00-00-00
XXXXX XX XXXXXXX
XXXXXX XX XXXXXXXX
The foregoing instrument was acknowledged before me this 21st day of
May 1998, by XXXXXX X. XXXX, ( ) who is personally know to me or (X) who
produced Texas drivers license as identification.
/s/ Xxxxxxx X. Xxxxxxx, Xx.
------------------------------------
[NOTARIAL SEAL] NOTARY PUBLIC - STATE OF FLORIDA
Typed Name: Xxxxxxx X. Xxxxxxx, Xx.
My Commission Expires: 02-28-01
35
EXHIBIT "A"
Xxxx 00, 00, 00 xxx 00, Xxxxx 0, Xxxxxxxx Heights, according to Plat recorded in
Plat Book 1, at Page 27, of the Public Records of Escambia County, Florida.
AND
From a concrete monument located at the intersection of the Westerly
right-of-way line of the new Pensacola-Ferry Pass Road (SR I-A) and the
centerline of public road known as the 9 Mile Rd., said center line being an
extension of the line between Sec. 4 and 16, T1S, R30W, Escambia County, Florida
(the said monument being 606.16 ft, more or less, from the West line of the said
Xxxxxx Xxxxxxx Xxxxx) run Westerly along the center line of said 0 Xxxx Xxxx 8.6
feet to a point; thence Southerly at an angle 90 degrees from said centerline go
15 feet to a stake located at the intersection of the right-of-way of the said
two roads for Point of Beginning; thence run Westerly parallel to the above
mentioned 0 Xxxx Xxxx a distance of 495 feet to a stake; thence Southerly at an
angle of 90 degrees `09.5 minutes with the Westerly course just run go 260.9
feet to a stake; thence Easterly at an angle of 89 degrees 20.5 minutes with the
Southerly course just run go 343.4 feet to a stake on the West line of the
right-of-way of the above mentioned SR 1-A; thence along the said right-of-way
line of SR 1-A around a I degree circular curve to the right in a Northeasterly
direction 300.8 feet, more or less, to the Point of Beginning, all lying and
being in the Xxxxxx Xxxxxxx Xxxxx, Xxxxxxx 00, X0X, X00X. Also, Xxxx 0, 0 xxx 0,
Xxxxx 00, Xxxxx Xxxx Heights, a S/D of Fractional Section 4 and portions of
Section 15 and 16, TIS, R30W, Plat of said S/D being recorded in Plat Book 1, at
Page 64, Records of Escambia County, Florida.
4