SECURED PROMISSORY NOTE
|
U.S. $4,484,077.00
|
Dallas,
Texas
|
December
19, 2006
|
FOR
VALUE RECEIVED,
XXXXXXXXXX
HIDDEN LAKES, LTD.,
a Texas
limited partnership (“Borrower”)
hereby
makes and issues this Secured Promissory Note (this “Note”),
and
promises to pay to the order of UNITED
DEVELOPMENT FUNDING III, L.P.,
a
Delaware limited partnership (together with its successors and assigns,
“Lender”)
the
principal sum of U.S. Four Million Four Hundred Eighty-Four Thousand
Seventy-Seven and NO/100 ($4,484,077.00) or, if greater or less, the aggregate
amount of all funds advanced to Borrower under this Note, together with accrued,
unpaid interest thereon, and all other amounts due to Lender hereunder. The
parties hereto hereby agree to the terms and conditions of this Note, as further
set forth below. The General Partner is executing this Note on its own behalf
for certain limited purposes described on the signature page to this
Note.
1. Certain
Definitions.
Certain
capitalized terms which are defined in the text of this Note shall have the
respective meanings given to such terms herein. In addition, the following
capitalized terms shall have the following meanings:
(a) “Accrued
Interest Payments”
shall
mean payments equal to the amount of accrued interest on the outstanding
principal balance of this Note, calculated at the applicable rate of interest
provided herein.
(b) “Base
Rate”
shall
mean the lesser of (i) fifteen percent (15%) per annum, or (ii) the Highest
Lawful Rate.
(c) “Commitment”
shall
mean an aggregate amount of U.S. Four Million Four Hundred Eighty-Four Thousand
Seventy-Seven and NO/100 ($4,484,077.00).
(d) “Commitment
Advance”
shall
mean the advance of the Commitment made to Borrower at the closing of this
Note
in accordance with the provisions hereof.
(e) “Default
Rate”
shall
mean the lesser of (i) eighteen percent (18%) per annum, or (ii) the Highest
Lawful Rate.
(f) “Effective
Date”
shall
mean December 19, 2006.
(g) “Event
of Default”
shall
have the meaning given to such term in Section 9
of this
Note.
(h) “General
Partner”
shall
mean Xxxxxxxxxx Hidden Lakes GP, Inc., a Texas corporation and the general
partner of Borrower.
(i) “Guaranty”
shall
mean that certain Continuing Unconditional Guaranty to be executed by the
General Partner in favor of Xxxxxx dated as of the Effective
Date,
guaranteeing
the prompt payment and performance of Xxxxxxxx’s obligations under this
Note.
(j) “Highest
Lawful Rate”
shall
mean the maximum lawful rate of interest which may be contracted for, charged,
taken, received or reserved by Lender in accordance with the applicable laws
of
the State of Texas (or applicable United States federal law, to the extent
that
it permits Lender to contract or charge, take, receive or reserve a greater
amount of interest than under Texas law), taking into account all fees and
expenses contracted for, charged, received, taken or reserved by Lender in
connection with the transaction relating to this Note and the indebtedness
evidenced hereby or by the other Loan Documents which are treated as interest
under applicable law.
(k) “Interest
Reserve”
shall
mean an aggregate of up to $400,000.00 to be advanced by Lender hereunder and
to
be applied against Accrued Interest Payments, subject to the provisions of
Section
4(c)
of this
Note.
(l) “Interest
Reserve Advance”
means
an advance under this Note in the amount of an Accrued Interest Payment pursuant
to Section
4(c)
of this
Note.
(m) “LEN-BUF
LP”
shall
mean LEN-BUF / HiddenLake 2 - JV, Ltd., a Texas limited partnership, in which
Borrower owns a 49.50% limited partnership interest and in which the General
Partner owns a 0.50% general partnership interest.
(n) “Loan
Documents”
shall
mean this Note, the Pledge Agreement, the Guaranty and all other documents,
certificates, instruments, and agreements executed, entered into or delivered
by
Borrower, the General Partner or any of their respective affiliates in
connection with this Note, as each such document may be amended from time to
time.
(o) “Maturity
Date”
means
June 30, 2010.
(p) “Partnership
Agreement”
means
the Agreement of Limited Partnership for LEN-BUF / HiddenLake 2 - JV, Ltd.,
as
it may be amended from time to time.
(q) “Pledge
Agreement”
shall
mean that certain Pledge Agreement executed by Borrower in favor of Xxxxxx
dated
as of the Effective Date, pursuant to which Borrower pledges its limited
partnership interest in LEN-BUF LP to Lender as security for the prompt payment
and performance of Borrower’s obligations to Lender under this Note, as such
agreement may be amended from time to time.
(r) “Property”
shall
mean each real property now owned or hereinafter acquired by LEN-BUF LP, and
“Properties”
shall
mean, collectively, all real properties now owned or hereinafter acquired by
LEN-BUF LP.
2. Loan
Expenses; Fees.
(a) Loan
Expenses.
No fees
shall be due by Borrower in connection with the origination and closing of
the
Loan. Lender shall bear the costs incurred in connection with the drafting,
negotiation and closing of this Note and the other Loan Documents. Thereafter,
Borrower shall pay Lender, the full amount of all fees and expenses incurred
by
Lender (collectively, the “Loan
Expenses”)
in
connection with the loan made pursuant to this Note and the preparation of
the
Note and the other Loan Documents, including, without limitation, attorneys
fees, accountants fees, closing costs, due diligence costs and expenses,
recording fees, courier and delivery fees, document preparation fees, wire
transfer and bank fees, title company fees, and all other fees and costs
incurred by Lender up to but not exceeding the aggregate sum of $5,000.00
annually (the “Annual
Cap”);
provided, however, that the Annual Cap on Loan Expenses shall not apply (i)
upon
the occurrence and during the continuance of any Event of Default, including,
without limitation, to costs and expenses incurred in connection with collection
efforts or any workout or restructure of this Note and the transactions
contemplated hereby, and (ii) to costs incurred in connection with any audit
permitted by Section
9(l)
of this
Note.
(b) Usury
Savings Clause Applies.
Borrower and Lender agree that Lender has provided, and shall provide, separate
and distinct consideration for the fees described in Section
2(a)
above or
that such expenses represent bona fide expenses incurred by Lender, and that
such fees are not intended to be characterized as interest or as compensation
for the use, forbearance or detention of money. Despite the foregoing and
notwithstanding anything else in the Loan Documents to the contrary, if any
fees
charged hereunder are determined to constitutes interest and such fees, when
added to the interest charged hereunder, would cause the aggregate interest
charged hereunder to exceed the Highest Lawful Rate, then Sections
4(b)
and
11
of this
Note shall automatically apply to reduce the interest charged hereunder so
as
not to exceed the Highest Lawful Rate.
(c) Assignment.
All
Loan Expenses are assignable by the payee to any affiliate or third
party.
3. Face
Amount of Note; Commitment Advance; Borrowing Procedures; etc.
(a) Funding.
At the
closing, it is anticipated that Lender will fund $950,000.00 of the Commitment.
Accordingly, after the closing, (i) 3,534,077.00 of the Commitment will remain
available for future Commitment Advances, and (ii) the Interest Reserve
($400,000.00) will be available to fund Accrued Interest Payments pursuant
to
Section
4(c)
of this
Note.
(b) Commitment
Advance.
Subject
to the terms and conditions of this Note, Xxxxxx agrees to make Commitment
Advances to Borrower from time to time during the eight month period following
the Closing until the entire Commitment is funded during such eight month
period; provided, that the aggregate amount of Commitment Advances made
hereunder shall not exceed the Commitment. This Note is not a revolver and
thus,
the portion of the Commitment borrowed may not be repaid to Lender and
subsequently reborrowed under this Note.
(c) Procedure
for Borrowing.
Each
Commitment Advance shall be made pursuant to a notice of Commitment Advance
stating the amount of Commitment being advanced and the use of proceeds for
the
Commitment Advance which is executed by both Xxxxxx and Borrower.
(d) Making
of Commitment Advance.
Subject
to the terms and conditions of this Note, provided that the notice of Commitment
Advance is executed by Xxxxxx and Borrower, Lender shall make the amount of
the
requested Commitment Advance available to Borrower on the applicable funding
date; provided,
however,
that
Lender shall have no obligation to make the Commitment Advance unless each
of
the conditions precedent in Section
7
have
been satisfied.
(e) Discretionary
Advances.
Lender
hereby is authorized by Borrower to make advances hereunder that Xxxxxx, in
its
sole discretion, deems necessary or desirable to pay any Loan Expense or other
amount chargeable to Borrower or the General Partner pursuant to the terms
of
this Note or any other Loan Document (such advances made for the foregoing
purposes are referred to herein as the “Discretionary
Advances”),
provided Xxxxxx has notified Borrower in writing of such Loan Expense and
provided Borrower with invoices and other supporting documents and Xxxxxxxx
has
failed to timely pay such Loan Expense or provide Lender with written objections
thereto. Each Discretionary Advance shall, upon disbursement, automatically
constitute principal outstanding hereunder and cause a corresponding increase
in
the aggregate amount of Borrower’s obligations hereunder (even if such
Discretionary Advance causes the aggregate amount outstanding hereunder to
exceed the face amount of this Note). The making by Lender of any Discretionary
Advance shall not cure any Event of Default hereunder, unless Xxxxxx provides
Borrower with a written waiver of such Event of Default.
4. Interest;
Payments.
(a) Interest
Rate.
The
outstanding principal amount of this Note shall bear interest on each day
outstanding at the Base Rate in effect on such day, accrued and compounded
monthly, unless the Default Rate shall apply. Upon the occurrence and during
the
continuation of an Event of Default, the outstanding principal amount of this
Note shall, automatically and without the necessity of notice, bear interest
from the date of such Event of Default at the Default Rate, accrued and
compounded monthly, until all such delinquent amounts are paid or such breach
or
Event of Default is otherwise cured to the satisfaction of Lender or waived
by
Lender in writing.
(b) Highest
Lawful Rate.
Notwithstanding anything to the contrary contained in this Note or any other
Loan Document, (i) this Note shall never bear interest in excess of the Highest
Lawful Rate, and (ii) if at any time the rate at which interest is payable
on
this Note is limited by the Highest Lawful Rate by the foregoing clause (i)
or
by reference to the Highest Lawful Rate in the definitions of Base Rate and
Default Rate, then this Note shall bear interest at the Highest Lawful Rate
and
shall continue to bear interest at the Highest Lawful Rate until such time
as
the total amount of interest accrued on this Note equals (but does not exceed)
the total amount of interest which would have accrued on this Note, had there
been no Highest Lawful Rate applicable to this Note.
(c) Interest
Payments; Interest Reserve Advances.
Accrued
Interest Payments shall be due and payable on the last day of each month (for
interest accrued during that month) while this Note is outstanding.
Notwithstanding the foregoing sentence and subject to the other provisions
hereof, on each date that an Accrued Interest Payment becomes due and payable
hereunder, Lender shall make an Interest Reserve Advance hereunder in the amount
of such Accrued Interest Payment, which shall be applied to the Accrued Interest
Payment then due and payable, until the Interest Reserve has been fully
exhausted. Subject to the other provisions of this Note, each time Lender funds
an Interest Reserve Advance hereunder, (i) Borrower’s requirement to make the
Accrued Interest Payment for such month shall be satisfied, (ii) the amount
of
remaining Interest Reserve shall be reduced by the amount of such Interest
Reserve Advance, and (ii) such Interest Reserve Advance funded by Lender
hereunder shall automatically become principal outstanding under this Note
upon
such funding. The Interest Reserve Advances may be funded by Lender even if
such
funding causes the outstanding principal balance of this Note to exceed its
face
amount. Notwithstanding anything else to the contrary contained herein, (i)
if
at any time an Event of Default has occurred and is continuing under this Note,
Lender shall not be obligated to make any further Interest Reserve Advances,
and
thereafter, shall do so only in its sole discretion, unless and until the Event
of Default is cured to Lender’s satisfaction as evidenced in writing, and (ii)
in no event shall Lender be obligated to make any Interest Reserve Advance
that
would cause the aggregate amount of Interest Reserve Advances made hereunder
to
exceed the remaining Interest Reserve.
(d) Payments.
Subject
to the other provisions of this Note:
(i) Accrued
Interest Payments shall be due and payable as provided in Section
4(c)
of this
Note;
(ii) within
five (5) business days following Borrower’s and/or the General Partner’s receipt
of any distribution(s) from LEN-BUF LP, Borrower shall make a payment hereunder
equal to the amount of such distribution(s), which payments shall be applied
as
provided in Section
5(a)
hereof;
and
(iii) except
as
set forth in clauses (i) and (ii) above and except upon any acceleration of
this
Note pursuant to its terms, the outstanding principal balance
of
this
Note, together with all accrued, unpaid interest thereon, unpaid Loan Expenses
and other unpaid amounts due hereunder, shall be due and payable on the Maturity
Date.
5. Terms
and Conditions of Payment.
(a) Application
of Payments.
Subject
to the application of Interest Reserve Advances to Accrued Interest Payments
as
provided in Section
4(c)
of the
Note, all payments on this Note shall be applied first, to unpaid Loan Expenses
due hereunder, next, to unpaid accrued interest, and last, to principal
outstanding under this Note. Notwithstanding the foregoing sentence, if any
Event of Default occurs and is existing under this Note or any other Loan
Document, Lender shall have the right to apply payments toward amounts due
under
this Note as Lender determines in its sole discretion.
(b) General.
All
amounts are payable to Lender in lawful money of the United States of America
at
the address for Lender provided in this Note, or at such other address as from
time to time may be designated by Lender. Borrower will make each payment which
it owes under this Note and the other Loan Documents to Lender in full and
in
lawful money of the United States, without set-off, deduction or counterclaim.
Under no circumstance may Borrower offset any amount owed by Borrower to Lender
under this Note with an amount owed by Lender to Borrower under any other
arrangement. All payments shall be made by cashier's check or wire transfer
of
immediately available funds. Should any such payment become due and payable
on a
day other than a business day, the date for such payment shall be extended
to
the next succeeding business day, and, in the case of a required payment of
principal, interest or Loan Expenses or other amounts then due, interest shall
accrue and be payable on such amount for the period of such extension. Each
such
payment must be received by Lender not later than 3:00 p.m., Dallas, Texas
time
on the date such payment becomes due and payable. Any payment received by Xxxxxx
after such time will be deemed to have been made on the next succeeding business
day.
(c) Prepayment.
Borrower may prepay this Note in whole or in part at any time and from time
to
time without incurring any prepayment fee or penalty; provided, that interest
shall accrue on the portion of this Note so prepaid through the date of such
prepayment.
6. Loan
Deliveries.
At or
prior to the closing of the loan made pursuant to this Note, Borrower shall
deliver or cause to be delivered to Lender, the following items, each of which
shall be satisfactory in form and substance to Lender:
(a) this
Note
and each other Loan Document, duly executed by Xxxxxxxx and the General Partner,
as applicable;
(b) The
most
recent consolidated financial statements of Xxxxxxxx and the General Partner,
in
the form specified in Section
9(f)
of this
Note, and accompanied by the certification required by Section
9(f)
of this
Note;
(c) a
certified copy of the formation documents and all amendments thereto, of
Xxxxxxxx and the General Partner and all other documents filed with the
secretary of state of the state of organization of Borrower and the General
Partner;
(d) a
certificate of existence and good standing (as applicable) for Borrower and
the
General Partner, issued by the appropriate governmental authority;
(e) resolutions
of Xxxxxxxx and the General Partner authorizing Xxxxxxxx’s and the General
Partner’s execution, delivery, and performance of this Note and the other Loan
Documents, and the transactions contemplated hereby and thereby;
(f) a
copy of
all partnership agreements, shareholders’ agreements, voting agreements, and
voting trusts among the shareholders, partners, or owners of each partnership,
limited liability company, or other entity, the equity interests of which are
pledged to Lender under the Pledge Agreement;
(g) a
certificate of Xxxxxxxx’s and the General Partner’s general liability policies,
and evidence of payment of the premium through at least one year;
(h) a
certificate (the “Officer’s
Certificate”)
executed by an appropriate officer on behalf of Xxxxxxxx and the General Partner
certifying that (i) no Event of Default has occurred and is continuing under
the
Note, (ii) all representations and warranties made in this Note and the other
Loan Documents are true and correct in all respects, and (iii) Borrower and
the
General Partner have complied with and performed, in all respects, all
covenants, conditions and agreements which are then required by this Note and
the other Loan Documents to have been complied with or performed;
(i) the
Partnership Agreement and all amendments thereto as of the Effective Date,
and
written consents of the partners thereto, authorizing the transactions
contemplated hereby and by the other Loan Documents including, without
limitation, the Pledge Agreement;
(j) endorsements
of the insurance policies covering the Properties naming Lender as an additional
insured; and
(k) such
other and further documents, agreements and certificates as are reasonably
required by Xxxxxx.
7. Conditions
Precedent to Commitment Advance.
Notwithstanding anything to the contrary contained herein or in the other Loan
Documents, Xxxxxx’s obligation to fund the Commitment Advance shall be
conditioned upon the satisfaction of each of the following conditions, on and
as
of the funding date for the Commitment Advance:
(a) Xxxxxxxx
and the General Partner shall have executed and delivered to Lender, an
Officer’s Certificate dated as of the funding date, and all matters certified in
the Officer’s Certificate shall be true and correct in all
respects;
(b) the
requested Commitment Advance, if made, would not cause the aggregate amount
of
all outstanding Commitment Advances to exceed the Commitment; and
(c) there
shall be no default by any partner under the Partnership Agreement, nor shall
there be any claim, cause of action, demand or similar dispute among the
partners to the Partnership Agreement.
8. Representations
and Warranties.
Each of
Borrower and the General Partner jointly and severally represents and warrants
to Lender that:
(a) Organization
and Good Standing; Authorization.
Each of
Borrower and the General Partner (i) is duly organized, validly existing and
in
good standing under the laws of its jurisdiction of organization, and (ii)
has
full power and authority to own its properties, carry on its business and to
perform the transactions contemplated by this Note and the other Loan Documents.
All necessary partnership, limited liability company, partnership, member,
partner and other actions required to be taken on behalf of Xxxxxxxx and the
General Partner to approve this Note and the other Loan Documents and the
transactions contemplated hereby and thereby, have been duly taken. Each of
Borrower and the General Partner is in compliance in all material respects
with
all laws applicable to it in each jurisdiction within and without outside the
United States where it owns or leases any properties or conducts any business,
except for any such non-compliance that would not have a material adverse
effect, individually or in the aggregate, on Borrower’s or the General partner’s
financial condition or operations.
(b) Authority;
Validity.
Each of
Borrower and the General Partner has the power, authority and legal right to
execute, deliver and perform its obligations under this Note and the other
Loan
Documents. The execution and delivery by Xxxxxxxx and the General Partner of
the
Note and the other Loan Documents, and the performance of their respective
obligations thereunder, will not (i) violate the certificate of formation or
partnership agreement or bylaws of Borrower and the General Partner,
(ii)
violate any law or result in a default under any contract, agreement, or
instrument to which Borrower and the General Partner is a party or by which
Borrower and the General Partner or any of their respective assets and
properties are bound, or (iii) result in the creation or imposition of any
security interest in, or lien or encumbrance upon any of their respective
assets. The Loan Documents constitute the legal, valid and binding obligations
of Borrower and the General Partner and are enforceable against them in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally.
(c) Litigation.
There
is no pending order, notice, claim, litigation, proceeding or investigation
against or affecting Borrower and the General Partner or any of
their
respective
assets or properties, whether or not covered by insurance, that could materially
and adversely affect either the financial condition or business prospects or
Borrower and the General Partner, if adversely determined.
(d) Indebtedness.
Neither
Borrower nor the General Partner has any material indebtedness of any nature,
to
the extent disclosed in the latest financial statements delivered to Lender
or
otherwise disclosed in writing to Lender and approved by Xxxxxx.
(e) Environmental
Liability.
To the
best of Xxxxxxxx’s and the General Partner’s knowledge, no hazardous substances
or solid wastes have been disposed of or otherwise released on or to any
Properties, except as may have been otherwise disclosed to Lender in a Phase
I
environmental report delivered to Lender. The terms “hazardous substance” and
release” shall have the meanings specified in the Comprehensive Environmental
Response Compensation and Liability Act of 1980, as amended, (“CERCLA”),
and
the terms “solid waste” and “disposal” (or “disposed”) shall have the meanings
specified in the Resource Conservation and Recovery Act of 1976, as amended,
(“RCRA”);
provided, to the extent that the laws of the State of Texas establish a meaning
for “hazardous substance”, “release”, “solid waste”, or “disposal” or
“disposed”) that is broader than that specified in either CERCLA or RCRA, such
broader meaning shall apply.
(f) Tax
Liabilities.
Each of
Borrower and the General Partner has filed all federal, state, county, local,
and foreign tax returns and reports required to have been filed by them (or
has
obtained valid extensions with respect to such returns and reports), including
but not limited to such returns and reports with respect to income, payroll,
property, employee withholding, social security, unemployment, franchise,
excise, use and sales taxes. Each of Borrower and the General Partner has paid
in full all taxes that have become due as reflected on all such returns and
reports (including any interest and penalties) and has established adequate
reserves for all taxes payable but not yet due. No governmental claim for
additional taxes, interest, or penalties is pending or, to Xxxxxxxx’s and the
General Partner’s knowledge, threatened against Borrower or the General Partner
or any of their respective properties or assets.
9. Covenants.
Each of
Borrower and the General Partner jointly and severally covenants and agrees
with
Xxxxxx that they will comply with each of the following covenants
below:
(a) Payment;
Performance.
Borrower shall promptly pay all amounts due and owing to Lender under this
Note.
Borrower and the General Partner shall timely perform and comply with each
agreement and covenant made under this Note and the other Loan
Documents.
(b) Use
of
Proceeds.
The
proceeds of this Note shall be used solely for Borrower’s business purposes and
in accordance with the applicable provisions of the Partnership Agreement.
In no
event shall the proceeds of this Note be used, directly or indirectly, by any
person for personal, family, household or agricultural purposes or
for
the
purpose, whether immediate, incidental or ultimate, of purchasing, acquiring
or
carrying any “margin stock” (as such term is defined in Regulation U promulgated
by the Board of Governors of the Federal Reserve System).
(c) Other
Loans.
Borrower and the General Partner shall not enter into any promissory note,
loan
documents, or other agreement for borrowed money without the prior written
consent of Xxxxxx. Unless otherwise agreed by Xxxxxx in writing, any loan
permitted by Xxxxxx shall contemplate that (i) the proceeds (or a portion
thereof, in an amount agreed by Lender) from such loan shall be used to pay
off
the loan made pursuant to this Note, and (ii) if this Note will remain
outstanding, the bank financial institution or other lender providing the
financing (the “New
Lender”)
shall
agree to provide Lender with written notice of any default or event of default
occurring under the loan documents evidencing its loan, and the New Lender
shall
agree that upon any default by Xxxxxxxx, Lender shall have the right, but not
the obligation, to cure Borrower’s default thereunder and to purchase the loan
and the loan documents from the New Lender.
(d) Termination
of Existence.
Nether
Borrower nor the General Partner shall cause, or enter into any agreement to
cause, the dissolution or termination of the existence of Borrower or the
General Partner or the merger, consolidation, or reorganization of Borrower
or
the General Partner with or into any other entity, whether or not such person
would be the surviving entity.
(e) Notice
of Certain Events.
Borrower and the General Partner shall promptly notify Lender in writing of
the
occurrence of any event or series of events of which any of them has actual
knowledge causing, or that could be expected to cause or has caused (i) a
material adverse effect on the operations or financial condition of Borrower
or
the General Partner, (ii) the occurrence of any Event of Default (without giving
effect to any cure period applicable thereto), or (iii) any default by Borrower
or the General Partner the acceleration of the maturity of any indebtedness
owed
by Xxxxxxxx or the General Partner under any indenture, mortgage, agreement,
promissory note, contract or other instrument to which Borrower or the General
Partner is a party or by which any material asset or property of Borrower or
the
General Partner is bound. In addition, each of Borrower and the General Partner
agrees to notify Xxxxxx in writing at least twenty (20) business days prior
to
the date that it changes its name, address, the location of its chief executive
office or principal place of business, and the place where it keeps its books
and records.
(f) Financial
Statements.
Borrower and the General Partner shall deliver to Lender, the following
financial statements: (i) within sixty (60) days after the end of each
fiscal quarter, the unaudited financial statements of Xxxxxxxx and the General
Partner, prepared in accordance with GAAP and combined or consolidated as
appropriate, including all notes related thereto; and (ii) within one
hundred twenty (120) days after the end of each fiscal year, the unaudited
financial statements of Xxxxxxxx and the General Partner, prepared in accordance
with GAAP and combined or consolidated as appropriate, including all notes
related thereto. All financial statements provided to Lender shall be certified
as to accuracy and completeness by appropriate officers.
(g) Taxes.
Borrower and the General Partner shall pay all federal, state and local taxes
levied against them and their respective properties and assets as they become
due and payable and before the same become delinquent. Borrower and the General
Partner shall have the right to pay such tax under protest or to otherwise
contest any such tax or assessment, but only if (i) such contest has the effect
of preventing the collection of such taxes so contested and also of preventing
the sale or forfeiture of any property subject thereto, (ii) Borrower and
the General Partner have notified Lender of their intent to contest such taxes,
and (iii) adequate reserves for the liability associated with such tax have
been
established in accordance with GAAP. Borrower and the General Partner shall
furnish to Lender evidence that all such taxes are paid at least five (5) days
prior to the last date for payment of such taxes.
(h) Assets.
Neither
Borrower nor the General Partner shall pledge, encumber, sell, assign, transfer,
convey, or grant a security interest against any of their respective properties
or assets, except as set forth in the Partnership Agreement or as otherwise
approved by Xxxxxx’s prior written consent.
(i) Indebtedness.
Neither
Borrower nor the General Partner shall incur any indebtedness for borrowed
money, other than as otherwise approved by Xxxxxx’s prior written consent.
(j) Distributions;
Dividends.
At any
time when any amounts are due to Lender hereunder, Xxxxxxxx shall not declare,
pay, make, or authorize any distributions, whether in cash or in property,
to
its partners, and the General Partner shall not declare or pay any dividends
to
its shareholders, without Xxxxxx’s prior written consent.
(k) LEN-BUF
LP Documents.
Borrower and the General Partner shall furnish to Lender promptly upon receipt,
all documents that they receive in their capacity as partners of LEN-BUF LP,
including without limitation, all of the following:
(i) all
financial statements, pro formas, projections, budgets, capital expenditure
and
expense reports, and other financial information, and all information related
to
the operations of LEN-BUF LP;
(ii) minutes
of the meetings of the general partners of XXX-XXX LP, and all written consents
of the general partners of LEN-BUF LP;
(iii) all
loan
documents evidencing indebtedness for borrowed money of LEN-BUF LP, and all
amendments thereto;
(iv) the
title
commitment for each Property, the title exception documents and, upon issuance,
the title policy for each Property;
(v) for
each
Property, all due diligence documents related to such Property, including,
without limitation, a Phase I Environmental Report, survey,
plat,
appraisal, and engineering due diligence report, land use, zoning, subdivision,
grading, municipal district, environmental, and other governmental permits,
approvals, authorizations and maps necessary to develop such Property in
compliance with applicable Governmental Regulations;
(vi) certificates
of general liability and hazard insurance for LEN-BUF LP and builder’s liability
insurance covering each Property;
(vii) for
each
Property, all project updates, development reports, sales reports, budgets,
pro
formas, and similar information; and
(viii) copies
of
all records of disbursements made from LEN-BUF LP to Borrower and/or the General
Partner including, without limitation, copies of checks or wire transfer
confirmations.
(l) Audit.
Borrower and the General Partner shall permit Lender and its employees,
representatives, auditors, collateral verification agents, attorneys and
accountants (collectively, the “Lender
Representatives”),
at
any time and from time to time, at Borrower’s and the General Partner’s expense,
to (i) audit all books and records related to Borrower and the General Partner
and their respective properties and assets, and (ii) visit and inspect any
of
their respective offices and assets and properties and to inspect and make
copies of all books and records, and to write down and record any information
the Lender Representatives obtain. Each of Xxxxxxxx and the General Partner
agrees to cooperate fully in connection with such audits and
inspections.
(m) Assignments.
Borrower shall not assign, transfer or convey, any partnership interest, capital
stock, or other equity interest in any partnership, corporation, limited
liability company, or other entity, the equity interests of which are pledged
under the Pledge Agreement.
(n) Insurance.
Borrower and the General Partner shall, at all times, maintain or cause to
be
maintained, hazard insurance on the Properties with coverage amounts that are
normal and customary for similarly-situated entities engaged in similar
businesses. Each such hazard insurance policy shall provide that Lender be
given
at least thirty (30) days written notice as a condition precedent to any
cancellation thereof or material change therein. Borrower shall obtain or cause
to be obtained, an endorsement to each such policy naming Lender as an
additional insured to each such policy, and provide Lender annually with the
insurance certificate, evidencing such coverage, the endorsement of each such
policy to lender, and evidence of payment of the premium for each such policy.
(o) Operation
of Business.
Borrower and the General Partner shall operate their businesses in compliance
with all applicable federal, state and local laws, rules, regulations, and
ordinances. Each of Borrower and the General Partner shall maintain their
existence and good standing in each state where they operate or do any business.
Each of Borrower and the General Partner shall obtain all consents, licenses,
permits,
authorizations,
permissions and certificates which may be required or imposed by any
governmental or quasi-governmental agency, authority or body which are required
by applicable federal, state or local laws, regulations and
ordinances.
(p) Additional
Pledge.
Xxxxxxxx and the General Partner agree that they shall use their best efforts
to
obtain, no
later
than thirty (30) days after the Effective Date, all
third
party consents required for the General Partner to pledge its general
partnership interest in LEN-BUF LP to Lender as security for the prompt payment
and performance of Borrower’s obligations under this Note. Upon obtaining such
third party consents, the General Partner shall enter into, execute and deliver
to Lender, a pledge agreement in the same form as the Pledge Agreement, pursuant
to which the General Partner shall pledge its general partnership interest
in
LEN-BUF LP to Lender, accompanied by resolutions of the General Partner
authorizing the pledge agreement and the transactions contemplated thereby,
an
assignment of the partnership interest executed in blank, and such other
certificates, documents and agreements as may be reasonably requested by Xxxxxx
in connection therewith. If Xxxxxxxx and the General Partner are unable to
obtain the required third party consents for any reason, then the General
Partner agrees that it shall (i) shall consult with Lender prior to taking
or
consenting to any material action, or making any material decision in its
capacity as a general partner of LEN-BUF LP with respect to LEN-BUF LP, and
(ii)
agree to permit a representative of Lender to attend, as an observer, all
meetings of the general partners of LEN-BUF LP and use its best efforts to
obtain the consent of Lennar Texas Holding Company, a Texas corporation (or
any
substitute general partner) to such attendance.
10. Default.
(a) For
purposes of this Note, the following events shall constitute an “Event
of Default”:
(i) except
for Accrued Interest Payments due during any period when Accrued Interest
Payments are required to be made by Lender pursuant to Section
4(c),
the
failure of Borrower to make any payment required by this Note in full on or
before the date such payment is due (or declared due pursuant to the terms
of
this Note), whether on or prior to the Maturity Date and such failure continues
for a period of ten (10) days thereafter; or
(ii) any
financial statement, representation, warranty, or certificate made or furnished
by or with respect to Borrower and the General Partner contained in this Note
or
any other Loan Document or made in connection herewith or therewith, shall
be
materially false, incorrect, or incomplete when made; or
(iii) Borrower
and the General Partner shall fail to perform or observe any covenant or
agreement contained in this Note or any other Loan Document that is not
separately listed in this Section
10(a)
as an
Event of Default, and the
same
remains unremedied for thirty (30) days after written notice of such failure
is
given by Xxxxxx to Borrower; or
(iv) any
“event of default” or “default” occurs under any Loan Document other than this
Note and the same remains unremedied for thirty (30) days after written notice
is given by Xxxxxx to Borrower and the General Partner, as applicable; or
(v) the
entry
of a decree or order for relief by a court having jurisdiction in respect of
Xxxxxxxx and the General Partner in an involuntary case under the federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law, which is not
vacated or dismissed within thirty (30) days, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of Borrower and the General Partner for any substantial part of their
property, or ordering the winding up or liquidation of such person’s affairs;
or
(vi) the
commencement by Xxxxxxxx and the General Partner of a voluntary case under
the
federal bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or
the
consent by it to the appointment to or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of Borrower and the General Partner for any substantial part of its
property, or the making by Borrower or the General Partner of any assignment
for
the benefit of creditors, or the admission by Xxxxxxxx and the General Partner
in writing of such entity’s inability to pay its debts generally as they become
due; or
(vii) the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of all or a substantial
part of Borrower’s, the General Partner’s assets or of any part of any property
in a proceeding brought against or initiated by Xxxxxxxx, the General Partner;
or
(viii) if
Borrower and the General Partner is liquidated or dissolved or winds up their
affairs, or the sale or liquidation of all or substantially all of the assets
of
Borrower and the General Partner; or
(ix) except
as
otherwise permitted herein, Borrower assigns, transfers, or conveys any
partnership interest, capital stock, or other equity interest in any
partnership, corporation, limited liability company, or other entity, the equity
interests of which are pledged under the Pledge Agreement without the prior
written consent of Lender; or
(x) any
“default” or “event of default” not cured within the grace period, if any, for
such default or event of default, shall occur under (A) any credit agreement,
loan agreement, promissory note, or other document evidencing indebtedness
for
borrowed money incurred by Xxxxxxxx and the General Partner,
or
(B)
any subordination agreement, security agreement, pledge agreement, guaranty,
deed of trust, or other agreement providing security or collateral for
indebtedness, executed by Borrower and the General Partner, or (C) any joint
venture agreement, revenue or profits sharing or participation agreement,
partnership agreement, shareholders agreement, securities purchase agreement
or
any other agreement governing to which Borrower and the General Partner is
a
party, if Lender or any of its affiliates is also a party to such agreement
(the
terms “default” and “event of default” having the meaning given to such terms in
any of the agreements described above).
(b) Upon
the
occurrence of an Event of Default described in subsection
(a)(v), (vi)
or
(vii)
above,
all obligations under this Note and the other Loan Documents shall thereupon
be
immediately due and payable, without demand, presentment, notice of demand
or of
dishonor and nonpayment, protest, notice of protest, notice of intention to
accelerate, declaration or notice of acceleration, or any other notice or
declaration of any kind, all of which are hereby expressly waived by Borrower
and the General Partner. During the continuance of any other Event of Default,
then and in every such case Lender may do any or all of the following: (i)
declare the principal of this Note together with all accrued and unpaid interest
on the unpaid principal balance, and Loan Expenses and other amounts due to
Lender under this Note or the other Loan Documents, to be due and payable
immediately, and the same shall become and be due and payable, without notices,
demands for payment, presentations for payment, notices of payment default,
notices of intention to accelerate maturity, protest and notice of protest,
and
any other notices of any kind, all of which are expressly waived by Borrower
and
the General Partner and any and all sureties, guarantors and endorsers of this
Note, (ii) exercise its rights under any of the Loan Documents, and (iii)
exercise all other rights and remedies available to Lender under this Note
and
the other Loan Documents and at law and at equity, including, without
limitation, such rights existing under the Uniform Commercial Code. No delay
on
the part of Lender in exercising any power under this Note shall operate as
a
waiver of such power or right nor shall any single or partial exercise of any
power or right preclude further exercise of that power or right.
(c) If
this
Note is placed in the hands of an attorney for collection after an Event of
Default or failure to pay under this Note, or if all or any part of the
indebtedness represented hereby is proved, established or collected in any
court
or in any bankruptcy, receivership, debtor relief, probate or other court
proceedings, Xxxxxxxx and the General Partner and all endorsers, sureties and
guarantors of this Note, jointly and severally, agree to pay reasonable
attorneys' fees and collection costs to Lender in addition to the principal
and
interest payable under this Note.
11. Usury
Laws.
It
is the
intention of the parties to this Note to comply with all applicable laws,
including, without limitation, usury laws. In furtherance thereof, Xxxxxxxx
and
the General Partner and Xxxxxx stipulate and agree that none of the terms and
provisions contained in this Note or the other Loan Documents shall ever be
construed to create a contract to pay for the use, forbearance, or detention
of
money, or interest, in excess of the maximum amount of interest permitted to
be
charged by applicable law in effect from time to time. Neither
Borrower
nor any present or future guarantors, endorsers, or other persons or entities
hereafter becoming liable for payment of Borrower’s obligations hereunder and
under the other Loan Documents shall ever be liable for unearned interest
thereon or shall ever be required to pay interest thereon in excess of the
maximum amount that may be lawfully charged under applicable law from time
to
time in effect, and the provisions of this Section
11
shall
control over all other provisions of the Loan Documents that may be in conflict
or apparent conflict herewith. Lender expressly disavows any intention to charge
or collect excessive unearned interest or finance charges in the event the
maturity of this Note is accelerated. If (a) the maturity of this Note is
accelerated for any reason, (b) this Note is prepaid and as a result any amounts
held to constitute interest are determined to be in excess of the legal maximum,
or (c) Lender or any other holder of the Note shall otherwise collect moneys
which are determined to constitute interest which would otherwise increase
the
interest hereon to an amount in excess of that permitted to be charged by
applicable law, then all sums determined to constitute interest in excess of
such legal limit shall, without penalty, be promptly applied to reduce the
then
outstanding principal of this Note or, at Lender's or such holder's option,
promptly returned to Borrower or the other payor thereof upon such
determination. In determining whether or not the interest paid or payable,
under
any specific circumstance, exceeds the maximum amount permitted under applicable
law, Lender and Borrower (and any other payors of this Note) shall to the
greatest extent permitted under applicable law, (a) characterize any
non-principal payment as an expense, fee or premium rather than as interest,
(b)
exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread the total amount of interest throughout the entire
contemplated term of this Note in accordance with the amounts outstanding from
time to time hereunder and the maximum legal rate of interest from time to
time
in effect under applicable law in order to lawfully charge the maximum amount
of
interest permitted under applicable law. In the event applicable law provides
for an interest ceiling under Chapter 303 of the Texas Finance Code (the
“Texas
Finance Code”)
as
amended, for that day, the ceiling shall be the “weekly ceiling” as defined in
the Texas Finance Code. As used in this section the term “applicable law” means
the laws of the State of Texas or the laws of the United States of America,
whichever laws allow the greater interest, as such laws now exist or may be
changed or amended or come into effect in the future.
12. Indemnity;
Release.
Each of
Borrower and the General Partner, jointly and severally, agrees to indemnify
Lender, upon demand, from and against any and all liabilities, obligations,
claims, losses, damages, penalties, fines, actions, judgments, suits,
settlements, costs, expenses or disbursements (including reasonable, documented
fees of attorneys, accountants, experts and advisors) of any kind or nature
whatsoever, now existing (in this section, collectively called “Liabilities
and Costs”)
to the
extent actually imposed on, incurred by, or asserted against Lender in its
capacity as lender hereunder growing out of, resulting from or in any other
way
associated with (a) this Note and the other Loan Documents or any of the
transactions and events (including the enforcement or defense thereof) at any
time associated therewith or contemplated therein, (b) any claim that the loan
evidenced hereby is contractually usurious, and (c) any use, handling, storage,
transportation, or disposal of hazardous or toxic materials on or about any
Property or any part thereof or any real properties owned, managed or operated
by Borrower and the General Partner.
THE
FOREGOING INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH LIABILITIES AND COSTS
ARE IN ANY WAY OR TO ANY EXTENT OWED IN WHOLE OR IN PART UNDER ANY CLAIM OR
THEORY OF STRICT LIABILITY, OR ARE CAUSED IN WHOLE OR IN PART, BY ANY NEGLIGENT
ACT OR OMISSION OF ANY KIND BY XXXXXX;
provided
only that Lender shall not be entitled under this section to receive
indemnification for that portion, if any, of any Liabilities and Costs which
is
proximately caused by its own individual gross negligence or willful misconduct,
as determined in a final judgment. If any person (including Borrower and the
General Partner) ever alleges such gross negligence or willful misconduct by
Xxxxxx, the indemnification provided for in this section shall nonetheless
be
paid upon demand, subject to later adjustment or reimbursement, until such
time
as a court of competent jurisdiction enters a final judgment as to the extent
and effect of the alleged gross negligence or willful misconduct. As used in
this section, the term “Lender” shall refer not only to the person designated as
such in this Note but also to each partner, director, officer, attorney,
employee, representative and affiliate of such person.
13. Mutual
Understanding.
Each of
Borrower and the General Partner represents and warrants to Lender that it
and
its principals have read and fully understands the terms and provisions hereof,
has had an opportunity to review this Note with legal counsel and has executed
this Note based on its own judgment and advice of counsel. If an ambiguity
or
question of intent or interpretation arises, this Note will be construed as
if
drafted jointly by Xxxxxxxx, the General Partner and Xxxxxx and no presumption
or burden of proof will arise favoring or disfavoring any party because of
authorship of any provision of this Note.
14. Further
Assurances.
Each of
Borrower and the General Partner, at their own expense, will promptly execute
and deliver to Lender on Xxxxxx’s request, all such other and further documents,
agreements and instruments, and shall deliver all such supplementary
information, in compliance with or accomplishment of their agreements and
covenants under this Note and the other Loan Documents.
15. Cumulative
Remedies.
Xxxxxxxx and the General Partner xxxxxx agrees that all rights and remedies
that
Xxxxxx is afforded by reason of this Note are separate and cumulative with
respect to Borrower and the General Partner and otherwise and may be pursued
separately, successively, or concurrently, as Lender deems advisable. In
addition, all such rights and remedies are non-exclusive and shall in no way
limit or prejudice Lender’s ability to pursue any other legal or equitable
rights or remedies that may be available to Lender.
16. Notice.
All
notices and other communications under this Note will be in writing and will
be
mailed by registered or certified mail, postage prepaid, sent by facsimile,
delivered personally by hand, or delivered by nationally recognized overnight
delivery service addressed to Borrower or the General Partner, at 0000 Xxxx
0xx
Xxxxxx,
Xxxxxx, Xxxxx 00000, Facsimile No. (000) 000-0000 or, with respect to Lender,
to
Lender at 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000, Facsimile No. (000)
000-0000 or with respect to any party, to such other address as a party may
have
delivered to the other parties for purposes of notice. Each notice or other
communication will be treated as effective and as having been given and received
(a) if sent by
mail,
at
the earlier of its receipt or three (3) business days after such notice or
other
communication has been deposited in a regularly maintained receptacle for
deposit of United States mail, (b) if sent by facsimile, upon confirmation
of
facsimile transfer, (c) if delivered personally by hand, upon written
confirmation of delivery from the person delivering such notice or other
communication, or (d) if sent by nationally recognized overnight delivery
service, upon written confirmation of delivery from such service.
17. Enforcement
and Waiver by Xxxxxx.
Lender
shall have the right at all times to enforce the provisions of this Note and
the
other Loan Documents in strict accordance with their respective terms,
notwithstanding any conduct or custom on the part of Lender in refraining from
so doing at any time or times. The failure of Lender at any time or times to
enforce its rights under such provisions, strictly in accordance with the same,
shall not be construed as having created a custom or in any way or manner
modified or waived the same. All rights and remedies of Lender are cumulative
and concurrent and the exercise of one right or remedy shall not be deemed
a
waiver or release of any other right or remedy.
18. CHOICE
OF LAW; JURISDICTION;
VENUE.
EXCEPT
TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF SECURITY INTERESTS OR REMEDIES
IN RESPECT OF ANY PARTICULAR COLLATERAL IS GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF TEXAS, THIS NOTE AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE
LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO ITS CONFLICTS OF LAWS PROVISIONS.
JURISDICTION FOR ALL MATTERS ARISING OUT OF THIS NOTE AND THE OTHER LOAN
DOCUMENTS SHALL BE EXCLUSIVELY IN THE STATE AND FEDERAL COURTS SITTING IN DALLAS
COUNTY, TEXAS, AND EACH OF BORROWER AND THE GENERAL PARTNER HEREBY IRREVOCABLY
SUBMITS ITSELF TO THE JURISDICTION OF SUCH STATE AND FEDERAL COURTS AND AGREES
AND CONSENTS NOT TO ASSERT IN ANY PROCEEDING, THAT ANY SUCH PROCESS IS BROUGHT
IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS IMPROPER, AND FURTHER
AGREES TO A TRANSFER OF SUCH PROCEEDING TO THE COURTS SITTING IN DALLAS COUNTY,
TEXAS.
19. Counterparts.
This
Note and each other Loan Document may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which together
shall
constitute but one and the same instrument.
20. Severability.
If any
provision of this Note or any other Loan Document shall be held invalid under
any applicable laws, then all other terms and provisions of this Note and the
Loan Documents shall nevertheless remain effective and shall be enforced to
the
fullest extent permitted by applicable law.
21. Amendments;
Waivers.
No
amendment or waiver of any provision of this Note nor consent to any departure
herefrom, shall in any event be effective unless the same shall be in writing
and signed by Lender and the affected person, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
22. Binding
Effect; Assignment.
This
Note and the other Loan Documents shall be binding on Borrower and the General
Partner and their respective administrators, other legal representatives,
successors, heirs and assigns, including, without limitation, any receiver,
trustee or debtor in possession of or for Borrower and the General Partner,
and
shall inure to the benefit of Lender and its successors and assigns. Neither
Borrower nor the General Partner shall be entitled to transfer or assign this
Note and the other Loan Documents in whole or in part without the prior written
consent of Lender. This Note and the other Loan Documents are freely assignable
and transferable by Lender to an affiliate of Lender without the consent of
Borrower or the General Partner. Assignments or transfers by Lender to parties
other than affiliates of Lender shall require the prior written consent of
Borrower. Should the status, composition, structure or name of Xxxxxxxx and
the
General Partner change, this Note and the other Loan Documents shall continue
and also cover such entity under the new status composition, structure or name
according to the terms of this Note and the other Loan Documents.
23. Captions.
The
captions in this Note are for the convenience of reference only and shall not
limit or otherwise affect any of the terms or provisions hereof.
24. Number
of Gender of Words.
Except
where the context indicates otherwise, words in the singular number will include
the plural and words in the masculine gender will include the feminine and
neutral, and vice versa, when they should so apply.
25. WAIVER
OF JURY TRIAL, PUNITIVE DAMAGES, ETC.
EACH OF BORROWER AND THE GENERAL PARTNER XXXXXX KNOWINGLY, VOLUNTARILY,
INTENTIONALLY, AND IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED
BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR
IN
CONNECTION WITH THIS NOTE OR THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED
HEREBY OR THEREBY OR ASSOCIATED HEREWITH OR THEREWITH, BEFORE OR AFTER MATURITY
OF THIS NOTE; (B) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY “SPECIAL DAMAGES”, AS
DEFINED BELOW, (C) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OF
LENDER OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVERS, AND (D) ACKNOWLEDGES THAT XXXXXX HAS BEEN INDUCED
TO ENTER INTO THIS NOTE AND THE OTHER LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BY AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION. AS USED IN THIS SECTION, “SPECIAL
DAMAGES” INCLUDES ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES
(REGARDLESS OF HOW NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH
ANY
PARTY HERETO
HAS
EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY
HERETO.
26. ENTIRE
AGREEMENT.
THIS NOTE AND THE OTHER LOAN DOCUMENTS TOGETHER CONSTITUTE THE ENTIRE AGREEMENT
AMONG THE PARTIES CONCERNING THE SUBJECT MATTER HEREOF, AND ALL PRIOR
DISCUSSIONS, AGREEMENTS AND STATEMENTS, WHETHER ORAL OR WRITTEN, ARE MERGED
INTO
THIS NOTE AND THE OTHER LOAN DOCUMENTS. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
AMONG THE PARTIES AND THIS NOTE AND THE OTHER LOAN DOCUMENTS MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES.
[The
remainder of this page is intentionally left blank.]
This
Note
has been executed on the ___ day of ________________, 2006, effective for all
purposes as of the Effective Date.
BORROWER:
|
XXXXXXXXXX
HIDDEN LAKES, LTD.,
a Texas limited partnership
By: Xxxxxxxxxx Hidden Lakes GP, Inc.,
Its: General Partner
|
||
| |
|
|
| By: | /s/ Xxxxxxx Xxxxxxx | |
|
Xxxxxxx Xxxxxxx |
||
| Vice President | ||
LENDER:
|
UNITED
DEVELOPMENT FUNDING III, L.P.,
a Delaware limited partnership
By: UMTH Land Development, L.P.
Its: General Partner
By: UMT Services, Inc.
|
||
| |
|
|
| By: | /s/ Xxxx Xxxxxxx | |
|
Xxxx Xxxxxxx |
||
| Executive Vice President | ||
AGREED
AND ACKNOWLEDGED BY:
THE
GENERAL PARTNER
Xxxxxxxxxx
Hidden Lakes GP, Inc., acting in its own capacity, hereby (i) agrees with and
accepts all of the terms and conditions of this Note which are applicable to
the
General Partner (as such term is defined in the Note), and (ii) makes the
representations, warranties, covenants and agreements in the Note which are,
by
their terms, applicable to General Partner.
|
XXXXXXXXXX
HIDDEN LAKES GP, INC.,
a Texas corporation
|
||
| |
|
|
| Date: | By: | /s/ Xxxxxxx Xxxxxxx |
|
Xxxxxxx Xxxxxxx |
||
| Vice President | ||
