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EXHIBIT 10.7
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LOT ACQUISITION LOAN AGREEMENT
BY AND BETWEEN
THE XXXXX COMPANIES, INC., a Florida corporation
AND
BANK UNITED OF TEXAS FSB,
a federal savings bank
Dated
March 13, 1996
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TABLE OF CONTENTS
Page
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1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Customary Complying Substance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Developed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.5 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.6 Financed Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Financing Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Hazardous Substance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 Lot(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.12 Maturity Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.13 Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.14 Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.15 Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.16 Subdivision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.17 Title Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. THE LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Disbursement of Loan Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 The Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 Payment of the Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.5 Loan Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3. CONDITIONS TO LENDER'S OBLIGATION TO FUND THE LOAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.1 Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Title Company's Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.4 Note and Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.5 Mortgage Security Agreement and other
Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.6 Affidavits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.7 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.7.1 Public Liability and Worker's
Compensation Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.7.2 Other Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.8 Soil Test and Hazardous Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.9 Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.10 Public Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.11 Corporate Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.12 Opinion of Borrower's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.13 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.14 Soil Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.15 Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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3.16 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.17 No Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5. WARRANTIES AND REPRESENTATIONS OF BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.1 Organization Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.2 Construction and Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.3 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.4 Authority to Enter into Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.5 Validity of Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.6 Priority of Lien on Personalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.7 Conflicting Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.8 Pending Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.9 Availability of Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.10 Condition of Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.11 Availability of Roads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.12 Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.13 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6. ADDITIONAL COVENANTS OF BORROWER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1 No Transfer, Subordinate Mortgage Financing or other Encumbrance of Financed Property . . . . . . . 11
6.2 Compliance with Restrictions and Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.3 Brokerage Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.4 Financial Statements and Reporting Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.5 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.7 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.8 Further Assurances and Preservation of Security . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.9 Utilization of Loan Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.10 No Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.11 Environmental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.12 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.13 Survival of Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.14 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.15 Advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.16 Third-Party Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.17 Change of Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.1 Failure to Satisfy Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.2 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.3 Breach of Covenants, Warranties and Representations . . . . . . . . . . . . . . . . . . . . . . . . 15
7.4 Material Adverse Change of Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8. REMEDIES OF LENDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
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9. RELEASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10. GENERAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.1 Rights of Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.2 Borrower is not Lender's Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.3 Lender Not Liable for Damage or Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.4 Lender Not Obligated to Insure Proper Disbursement of
Funds to Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.5 Indemnification from Third Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.6 Evidence of Satisfaction of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.8 Invalid Provisions to Affect No Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.9 Application of Interest to Reduce Principal Sums . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.11 Number and Gender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.12 Extraneous Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.13 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.14 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.15 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.16 Time is of the Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10.17 Attorney's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
11. ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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LOT ACQUISITION LOAN AGREEMENT
THIS LOT ACQUISITION LOAN AGREEMENT (the "Agreement") is made and
entered into as of the 13th day of March, 1996, by and between THE XXXXX
COMPANIES, INC., a Florida corporation with an address at 0000 Xxxxx Xxxxxxxx
Xxxxx, Xxxxxxx Xxxxxx, Xxxxxxx 00000 ("Borrower"); and BANK UNITED OF TEXAS
FSB, a federal savings bank, with an address at 0000 Xxxxxxxxx Xxxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000 ("Lender").
RECITALS
WHEREAS, Borrower has applied to Lender for a lot acquisition loan (the
"Loan") in the principal sum of Three Million Seven Hundred Twelve Thousand Five
Hundred Dollars ($3,712,500.00), the proceeds of which shall be used to acquire
certain Lots in Parcel "B" of the Windsor Palms Subdivision, as more
particularly described on Exhibit "A" attached hereto and made a part hereof.
WHEREAS, Borrower and Lender have negotiated, and desire to enter
into, this Agreement to set forth the terms and conditions of the Loan;
NOW, THEREFORE, in consideration of the premises, and of the mutual
covenants and agreements set forth below, Borrower and Lender agree as follows:
1. DEFINITIONS. As used in this Agreement the terms listed below
shall have the following meanings unless otherwise required by the context:
1.1 Business Day. Each day, other than a Saturday,
Sunday, national holiday or other day when Lender's offices or branch banking
facilities are not open for business to the general public.
1.2 Customary Complying Substance. Any customary
Hazardous Substance which is necessary to the business operations of Borrower
at the Financed Property and which is manufactured, produced, distributed,
used, treated, transported, stored, released, disposed of or otherwise handled
in compliance with all applicable Environmental Laws.
1.3 Developed. Improved with all necessary roadway,
drainage, utility and other infrastructure, and ready to be improved with a
residential dwelling unit.
1.4 Escrow Agreement. An escrow agreement in form and
substance acceptable to the Lender regarding certain development work to be
completed with respect to the Subdivision among the Borrower, the Lender,
Windsor Palms Corporation and an escrow agent acceptable to the Lender.
1.5 Environmental Laws. All existing and future federal,
state and local laws, statutes, ordinances, rules, and regulations pertaining
to health, industrial hygiene, pollution or the environment, including, without
limitation: (i) the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, 42 U.S.C. Section 9601 et seq.; (ii) the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 et seq.; (iii) the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et seq.; (iv)
the Pollution Spill Prevention and Control Act (Chapter 376 of the Florida
Statutes), (v) the Florida Air and Water Pollution Control Act, the Florida
Resource Recovery and Management Act and other Acts included within Chapter 403
of the Florida Statutes, and (vi) all other
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laws relating to Pollution or the protection of the environment, including laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment (including, without limitation,
ambient air, surface water, groundwater, or land), or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
1.6 Financed Property. The land and all of the
Improvements thereon which are to any extent and at any time financed under
this Agreement.
1.7 Financing Statements. One or more financing
statements from the Borrower to Lender to perfect Lender's security interest in
the personal property described in the Mortgage and Security Agreement.
1.8 Guarantor. NHC Holdings Corp., a Nevada corporation.
1.9 Hazardous Substance. Asbestos, polychlorinated
biphenyls, and petroleum products, and any other substance(s), material(s) and
waste(s) now or hereafter regulated under any Environmental Laws, including,
without limitation, any "hazardous substance(s)", "hazardous material(s)",
"toxic substance(s), "solid waste(s)", "waste(s)", "hazardous waste(s)",
"pollutant(s)", or "pollution", as defined in any Environmental Laws; and those
substances listed in the United States Department of Transportation Table (49
CFR 172. 101 and amendments thereto) or by the Environmental Protection Agency
(40 CFR Part 302 and amendments thereto) as hazardous substances.
1.10 Loan Documents. This Agreement, the Note, the
Guaranty, the Mortgage, the Security Agreement, the Financing Statements, and
each of the other documents or instruments now or hereafter evidencing or
securing the payment or performance of any of the Loan obligations of Borrower.
All Loan Documents shall be satisfactory to Lender in form and in substance.
1.11 Lot(s). A residential building lot as shown on the
plat of the Subdivision.
1.12 Maturity Date. April 1, 1998.
1.13 Mortgage. One or more Mortgage and Security
Agreements from Borrower to Lender, securing the Loan and granting to Lender a
valid first mortgage lien on, inter alia, the Financed Property.
1.14 Note. That certain promissory note of even date
herewith made by the Borrower payable to the order of the Lender in the
principal amount of Three Million Seven Hundred Twelve Thousand Five Hundred
Dollars ($3,712,500.00), evidencing the Loan.
1.15 Security Agreement. One or more Security Agreements
from the Borrower to Lender securing the Loan and granting to Lender a valid
and perfected first priority security interest in all fixtures and personal
property now or hereafter located on, arising out of, or used in connection
with the Financed Property.
1.16 Subdivision. That certain residential subdivision
known as Parcel "B" in the Windsor Palms Subdivision being developed on that
certain Parcel of land located in Broward County,
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Florida, as more particularly described on Exhibit "A", attached hereto and
made a part hereof, to include one hundred one (101) Developed Lots.
1.17 Title Company. Xxxxxxx, Xxxxxxxx & Xxxxx, as agent
for Ticor Title Insurance Company or a title insurance company accepted by
Lender in writing. The Lender reserves the right to require Borrower to change
the Title Company at any time.
2. THE LOAN.
2.1 Loan. Subject to the terms and conditions contained
in this Agreement, the Lender agrees to fund and Borrower may borrow, the
principal sum of Three Million Seven Hundred Twelve Thousand Five Hundred
Dollars ($3,712,500.00) to acquire one hundred one (101) Developed Lots within
the Subdivision.
2.2 Disbursement of Loan Proceeds. At closing, subject
to the terms and conditions contained in this Agreement, the Lender shall
disburse the full principal amount of the Loan to or for the account of the
Borrower to finance the acquisition of the Lots; provided, however, a portion
of the Loan proceeds, in an amount to be approved by the Lender, shall be
disbursed at closing directly to an escrow agent, acceptable to the Lender, to
be held, administered and disbursed in accordance with terms and conditions
contained in the Escrow Agreement for completion of the development work with
respect to the Subdivision. The Borrower acknowledges and agrees that the
Lender shall have no obligation to disburse any portion of the proceeds of the
Loan until such time as the Lender has approved and entered into an acceptable
Escrow Agreement among the parties thereto.
2.3 The Loan Documents. The Loan shall be evidenced by
the Note, and shall be secured by the Mortgage and other Loan Documents. The
Borrower shall take the Loan and comply with and perform all of the terms and
conditions of this Agreement and other Loan Documents.
2.4 Payment of the Note.
2.4.1 Payments of accrued interest only as provided
in the Note on the unpaid principal amount outstanding under the Note from time
to time shall be due and payable to Lender on the first (1st) day of each
month, commencing on the first (1st) day of the first (1st) month following the
date of this Agreement and continuing until the first (1st) day of the month
immediately preceding the Maturity Date.
2.4.2 In the event the Lender shall reasonably
determine that the outstanding principal balance of the Loan at any time
exceeds the value of the Financed Property (discounted on a bulk value basis)
securing the Loan, the Lender shall have the right to require a mandatory
principal reduction payment under the Loan in such amount as will reduce the
outstanding principal balance of the Loan to an amount which does not exceed
the value of the Financed Property (discounted on a bulk value basis).
2.4.3 Upon the sale of any Lot by the Borrower, a
release price shall be due and payable hereunder in an amount equal to the
release price set forth in Section 14 hereof.
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2.4.4 Unless sooner paid, the entire unpaid
principal balance of the Loan together with all accrued but unpaid interest and
any other sum due under any of the other Loan Documents, shall be due and
payable in full on or before the Maturity Date.
2.4.5 Borrower may at any time prepay the Loan in
whole or in party without penalty or premium.
2.5 Loan Fee. As consideration for committing to make the
Loan in accordance with this Agreement, Borrower shall pay Lender a fee equal
to $37,125.00 upon the execution of this Agreement, which fee shall be deemed
fully earned and nonrefundable.
3. CONDITIONS TO LENDER'S OBLIGATION TO FUND THE LOAN. In
addition to applicable conditions set forth elsewhere in this Agreement, each
of the conditions listed below shall be complied with in form and substance
satisfactory to Lender at least four (4) Business Days prior to the funding of
the Loan:
3.1 Title Insurance. Borrower shall have delivered to
Lender an original policy or policies of title insurance or (or commitment for
such title insurance marked to delete all requirements and "standard"
exceptions) issued by the Title Company, in an amount equal to the face
principal amount of the Note plus the principal amount of all other promissory
notes from time to time evidencing the Loan, which title insurance policy or
policies (i) shall insure Lender against loss or damage on account of
construction liens upon the Financed Property, (ii) shall insure that the
Mortgage is a valid first lien on the Financed Property, (iii) shall insure
that title to the Financed Property is good and marketable and free and clear
of all liens, encumbrances, easements, exceptions, reservations and
restrictions except for those approved by Lender, in its sole and absolute
discretion, without exception for ingress and egress, and (iv) shall provide
such other coverages and include such endorsements as Lender may reasonably
request, including, without limitation, Florida Form 9 coverage.
3.2 Survey. Borrower shall have delivered to Lender a
current survey of the Financed Property certified as true and correct to the
Lender, Title Company and Lender's counsel to their satisfaction and which has
been prepared by a surveyor acceptable to Lender showing the following:
A. the location of the perimeter of such
property;
B. the location of and the identification by
reference to recording data of all easements, rights of way,
conditions and restrictions on or appurtenant to the Lots;
C. the lines of the streets abutting the
property and the width thereof;
D. all encroachments upon the property and the
extent thereof in feet and inches;
E. the location of any improvements, to the
extent constructed, and the relation of the improvements by
distances to the perimeter of the property, the building
setback lines and the streetlines;
F. if any portion of the property is described
as being on a filed map, a legend relating the plat of survey
to such map;
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G. a certificate reflecting whether or not all,
or any portion, of the property lies within the boundary of
any applicable flood zone; and
H. any other requirements reasonably requested
by Lender.
3.3 Title Company's Agreement. A standard form
indemnification agreement (closing protection letter) by the Title Company
shall have been executed and delivered to Lender.
3.4 Note and Guaranty. The Note shall have been duly
authorized, executed and delivered to Lender by Borrower, and a Guaranty of the
Note, in form and substance acceptable to the Lender shall have been duly
executed and delivered to the Lender by the Guarantor.
3.5 Mortgage Security Agreement and other Loan Documents.
The Mortgage shall have been duly authorized, executed, acknowledged, delivered
to Lender, and recorded. The Security Agreement, Financing Statements, and
other Loan Documents shall have been duly authorized, executed, and
acknowledged by Borrower, and delivered to Lender. All Financed Property shall
be encumbered by a valid first priority lien under the Mortgage, and all
fixtures and personal property now or hereafter located on, arising out of, or
used in connection with the Financed Property shall be encumbered by a valid
and perfected first priority security interest under the Security Agreement.
3.6 Affidavits. Title and loan to one borrower
affidavits of the Borrower shall have been executed and delivered to Lender in
substantially the forms attached hereto as Exhibit "B" and Exhibit "C",
respectively (collectively, "Affidavits").
3.7 Insurance.
3.7.1 Public Liability and Worker's Compensation
Insurance. Borrower at its expense shall have delivered evidence satisfactory
to Lender of the existence of public liability and worker's compensation
insurance in amounts and issued by companies approved by Lender. All liability
policies shall name Lender as an additional insured as its interest may appear.
3.7.2 Other Insurance. Borrower at its expense
shall also have furnished to Lender from time to time such other insurances as
may be required by the Loan Documents or as Lender may from time to time
reasonably request. Borrower shall furnish Lender with original certificates of
insurance and, if requested, copies of all policies for all insurance required
under this Agreement and each such policy shall be written by an insurer
satisfactory to Lender that is licensed to issue insurance in Florida and that
possesses a general policy holder's rating of "A" or better and financial
rating of Class VII or better according to Best's Key Rating Guide as the same
may change from time to time. Each such policy must be furnished to Lender
with proof of payment of the full premium due therefor (subject to the right of
the Borrower to make premium payments in monthly installment, if applicable)
and shall provide that it shall not be cancelled or materially modified without
thirty (30) days prior written notice to Lender. Borrower agrees that Lender
shall have the right to take any action necessary to continue any such
insurance in full force and effect including, but not limited to, paying
premiums. Any funds advanced to continue any of said policies in full force
and effect shall be considered as Advances hereunder and shall bear interest
from the date of disbursement at the same rate as other Advances and payment of
said funds and interest shall be secured by the Mortgage and other Loan
Documents.
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3.8 Soil Test and Hazardous Waste. Satisfactory
environmental audits and soil test reports shall have been submitted to Lender
for its review from an environmental engineer satisfactory to Lender certifying
that, except for Customary Complying Substances, no Hazardous Substances exists
on or about the Financed Property (including in any surface or ground water),
that the Financed Property is in compliance with all Environmental Laws, and
that there are no actual or potential environmental concerns in respect of the
Financed Property, the costs of which shall have been paid by Borrower.
3.9 Appraisal. A current appraisal of the Financed
Property complying with all applicable regulatory requirements shall have been
delivered to and approved by Lender, the costs of which shall have been paid by
Borrower. In addition, Lender reserves the right to require updated appraisal
reports with respect to the Financed Property if and when requested by the
Lender in its complete discretion, to be provided at Borrower's expense.
3.10 Public Requirements. Borrower shall have delivered
to Lender the following with respect to the Subdivision:
A. letters from local utility companies stating
that electricity, telephone, sewer and water will be available to each Lot on a
permanent and adequate basis upon the completion of the Improvements;
B. a certified copy of the zoning map and
ordinance (including all conditions to any specially approved use, such as a
special exception or conditional use) applicable to the Subdivision and a
current letter from the appropriate zoning official confirming the zoning
classification for the Subdivision;
C. evidence satisfactory to the Lender that all
roads, drainage and other infrastructure necessary for the development of the
Subdivision have been completed to the boundary of the Subdivision and that the
necessary easements and rights of way therefor have been acquired or dedicated
to public use and duly accepted;
D. copies of subdivision plats, restrictive
covenants, plans of developments, and all other documents required by the local
zoning and subdivision ordinances together with evidence satisfactory to Lender
that the Final Plans conform to all federal, state, and local laws, ordinances,
rules and regulations, including, but not limited to, all Environmental Laws
and all laws of the State of Florida regulating building and land use; and
E. copies of permits from the water management
district for the construction and generation of facilities for the collection
and discharge of storm and surface water, certificates of concurrency
determination, reservation, or exemption, and all other licenses,
authorizations, permits and approvals, if any, required as a prerequisite to
the lawful development of the Subdivision.
3.11 Corporate Documents. Borrower shall have delivered
to Lender the following documents:
A. a certificate by the appropriate official of
the state of the Borrower's and Guarantor's incorporation to the effect that
the Borrower and the Guarantor are both corporations whose status is active
and, if other than Florida, accompanied by a certificate of the Florida
Department of State showing that the Borrower is authorized to transact
business in the State of Florida;
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B. articles of incorporation of the Borrower and
the Guarantor, with all amendments thereto, certified by the appropriate
official of their respective states of incorporation, and bylaws of the
Borrower and Guarantor certified by the Secretary of the Borrower and the
Guarantor respectively;
C. an incumbency certificate specifying by name
and title the officers and directors of the Borrower and the Guarantor,
certified by the secretary of the Borrower and the Guarantor respectively; and
D. certified resolutions of the Board of
Directors of the Borrower authorizing the execution and delivery of this
Agreement, the Mortgage, Note and all other documents necessary or desirable
for the consummation of the transactions contemplated by this Agreement and
certified resolutions of the Board of Directors of the Guarantor authorizing
the execution and delivery of the Guaranty to and in favor of the Lender
3.12 Opinion of Borrower's Counsel. Borrower shall have
delivered to Lender an opinion or opinions of counsel to Borrower and the
Guarantor addressed to Lender, such counsel to be reasonably satisfactory to
Lender, to the effect that:
A. this Agreement and all other Loan Documents,
including, without limitation, the Guaranty, have been duly authorized,
executed and delivered and are valid, binding and enforceable in accordance
with their terms, subject to any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the right of creditors
generally;
B. that Borrower is duly incorporated and
organized, with an active status under the laws of the state of its
incorporation, is authorized to transact business in Florida, and has all the
necessary power and authority to undertake its obligations under the Loan
Documents;
C. that Guarantor is duly incorporated and
organized, with an active status under the laws of the state of its
incorporation and has all the necessary power and authority to undertake its
obligations under the Loan Documents;
D. that, to its knowledge after inquiry of
appropriate officers of the Borrower, Borrower and its properties are in
compliance with all laws, regulations, ordinances and orders of all
governmental authorities;
E. that there is no charter or by-law of
Borrower and no provision of any existing mortgage, indenture, contract or
agreement known to such counsel binding on Borrower or affecting its property
which would conflict with or in any way prevent the execution, delivery and
carrying out of the terms of this Agreement;
F. that, to its knowledge after inquiry of the
executive officers of the Borrower and the Guarantor, there are no proceedings
pending or threatened before any court or administrative agency which will
materially and adversely affect the Borrower or the Guarantor;
G. that the Note and the interest provided for
therein do not violate any usury or other laws of the State of Florida;
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H. such other matters as Lender may reasonably
require.
3.13 Expenses. Borrower shall have paid all those fees
and charges due and payable or ordered paid by Lender as provided herein under
Paragraph 9 of this Agreement entitled Expenses.
3.14 Soil Reports. The Lender shall have received and
approved a written report from an engineer acceptable to the Lender which
set(s) forth the results of subsurface soil tests (including, but not limited
to, composition and compaction results), and recommendations, if any, and a
density/compaction certification acceptable to Lender. The Lender shall also
have received and approved such additional report(s) as shall be appropriate,
including additional reports made after implementation of the recommendations,
to show that the recommendations have been satisfied.
3.15 Other Documents. Borrower shall deliver to Lender
such other documents and information as Lender may reasonably require.
3.16 Representations and Warranties. The representations
and warranties of Borrower as set forth in this Agreement and other Loan
Documents shall be true and correct.
3.17 No Event of Default. No Event of Default
(hereafter defined), or circumstance or event which upon the lapse of time, the
giving of notice, or both, could become an Event of Default, shall have
occurred.
4. EXPENSES. Borrower shall pay all reasonable fees, charges,
expenses, and costs incurred in the procuring and making of the Loan, and all
other reasonable expenses incurred by Lender during the term of the Loan,
including, without limitation, Title Company's fees and premiums, charges for
examination of title to the Financed Property and any endorsements, expenses of
surveys, Florida documentary stamp taxes and intangible personal property
taxes, recording expenses, fees of the Inspector, and the fees of the attorneys
for Lender. The Borrower shall also pay any and all other charges, liens and
encumbrances upon the Financed Property, any other expenses necessary to
complete the construction of the Improvements in accordance with the terms and
conditions of this Agreement, and the costs of such inspections, evaluations
and tests of the Financed Property as Lender may require from time to time,
including, but not limited to, appraisals, structural and environmental
engineering audits and other professional, engineering and architectural
reports, as provided elsewhere in the Loan Documents. Such amounts, unless
sooner paid, shall be paid from time to time as and when Lender shall request
either to the person to whom such payments are due or to Lender if Lender has
paid the same, or Lender may, at its option, deduct from any Advance any
amounts necessary for the payment of these items, and apply such amounts in
making such payments, and all sums so applied shall be deemed Advances under
this Agreement. Further, Borrower agrees to pay all such fees, charges,
expenses and costs incurred in connection with any modification or assumption
of the Loan.
5. WARRANTIES AND REPRESENTATIONS OF BORROWER. Borrower
represents and warrants (which representations and warranties shall be deemed
continuing) as follows:
5.1 Organization Status. Borrower and the Guarantor (i)
are each duly incorporated, organized and active corporations under the laws of
their respective states of incorporation and (ii) the Borrower is authorized to
transact business in Florida.
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5.2 Construction and Compliance with Laws. With respect
to the Financed Property, no violation of any applicable zoning, building or
any other local, state or federal laws, ordinances and regulations exists with
respect to the anticipated use and construction of improvements thereon. The
Borrower (i) has obtained or is entitled to receive all licenses, permits and
approvals required by all local, state and federal agencies regulating such
construction and use and (ii) is in compliance with all laws, regulations,
ordinances and orders of all governmental authorities.
5.3 Financial Statements. The financial statements of
Borrower heretofore delivered to Lender are true and correct in all respects,
have been prepared in accordance with consistently applied generally accepted
accounting principles, and fairly present the respective financial conditions
of the Borrower as of the respective dates thereof, and no material adverse
change has occurred in the financial conditions reflected therein since the
respective dates thereof.
5.4 Authority to Enter into Loan Documents. Borrower has
full power and authority to enter into this Agreement and the other Loan
Documents and consummate the transactions contemplated thereby, and the facts
and matters expressed or implied in the opinions of its legal counsel are true
and correct.
5.5 Validity of Loan Documents. The Loan Documents have
been approved by those persons having proper authority, and are in all respects
legal, valid and binding according to their terms.
5.6 Priority of Lien on Personalty. No chattel mortgage,
xxxx of sale, security agreement, financing statement or other 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 granted to
Lender under the Loan Documents as security for the payment and performance of
the Loan obligations.
5.7 Conflicting Transactions. The consummation of the
transaction hereby contemplated and the performance of the obligations of
Borrower and the Guarantor under and by virtue of the other Loan Documents will
not result in any breach of, or constitute a default under, any lease, bank
loan or credit agreement, or other agreement or instrument to which either the
Borrower or the Guarantor is a party, bound or affected.
5.8 Pending Litigation. There are no actions, suits or
proceedings pending against the Borrower, the Guarantor or against the Financed
Property, and, to the knowledge of Borrower, there are no circumstances which
could lead to any action, suits or proceedings against or affecting Borrower or
the Financed Property, or involving the validity or enforceability of any of
the Loan Documents, before or by any government authority; and to Borrower's
knowledge, it is not in default with respect to any order, writ, injunction,
decree or demand of any court or any governmental authority. The aforesaid
does not pertain to pending or threatened actions, suits or proceedings which
are in the ordinary course of business, the outcome of which will not
materially and adversely affect the financial condition of the Borrower or
impair its operations.
5.9 Availability of Utilities. All utility services
necessary for the construction of the Improvements and the operation thereof
for their intended purpose will be available upon completion of the development
of the Subdivision, including water supply, storm and sanitary sewer
facilities, and electric and telephone facilities. All necessary permits and
permissions required from governmental authorities have been obtained for
unrestricted access to and use of such services in connection with the
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construction and use of the Improvements and adequate capacities exist to fully
service the Financed Property.
5.10 Condition of Premises. No proceeding to condemn any
part of the Financed Property has been threatened or commenced by any authority
having the power of eminent domain, the Financed Property is not now damaged or
injured as a result of any fire, explosion, accident, flood or other casualty,
and there are no soil conditions which would interfere with the construction of
the Improvements.
5.11 Availability of Roads. All roads necessary to
provide adequate access to the Subdivision have either been completed or the
necessary rights of way therefor have either been acquired by the appropriate
local authorities or have been dedicated to public use and accepted by such
local authorities and all necessary steps have been taken by Borrower and such
local authorities to assure the complete construction and installation thereof.
5.12 Environmental. The Borrower warrants as follows with
respect to the Financed Property:
5.12.1 To the best knowledge of Borrower, neither
the Financed Property nor the Borrower is in violation of any Environmental
Laws.
5.12.2 Neither the Borrower nor the Financed
Property is the subject of any existing, pending, or to the best of Borrower's
knowledge, threatened investigation, proceeding, claim or lawsuit with respect
to any Environmental Laws or any Hazardous Substance.
5.12.3 Neither the Borrower nor, to the best
knowledge of Borrower, any predecessor in title to the Financed Property have
received any notice of any violation or alleged violation of any Environmental
Laws or of any investigation, proceeding, claim or lawsuit, the basis of which
is a violation or alleged violation of any Environmental Laws or which involves
the existence or alleged existence of any Hazardous Substance at or on the
Financed Property.
5.12.4 Borrower has inspected or has caused the
Financed Property to be inspected and found it, to the best of its knowledge,
to be free from every Hazardous Substance.
5.12.5 Borrower has made inquiry into the previous
uses and ownership of the Financed Property and has determined that, to the
best knowledge of Borrower, except as referenced in the environmental report
submitted to the Lender, no Hazardous Substance has been manufactured,
produced, distributed, used, treated, transported, stored, released, disposed
of or otherwise handled at, on or near the Financed Property. To the best
knowledge of the Borrower, all of the recommendations and remedial action
called for by the referenced environmental report have been completed and
complied with.
5.12.6 Borrower has not caused nor allowed the
manufacture, processing, distribution, use, treatment, transport, storage,
release, disposal or other handling of any Hazardous Substance at or on the
Financed Property.
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5.12.7 If required, Borrower has secured, or prior
to conducting any operations at the Financed Property shall secure, all
permits, licenses and approvals necessary to conduct its operations at the
Financed Property in compliance with all Environmental Laws. No such permit,
license, or approval has lapsed or been terminated and the Borrower is in
compliance with the terms and conditions of each such permit, license and
approval which has been heretofore issued.
5.12.8 Borrower's intended use of the Financed
Property will not violate any Environmental Laws, or result in the manufacture,
processing, distribution, use, treatment, transport, release, disposal or other
handling of any Hazardous Substance at, on or near the Property (except for
Customary Complying Substances).
5.12.9 The Borrower has no knowledge of any material
undisclosed liability of the Borrower with respect to any Environmental Laws or
Hazardous Materials, whether pertaining to the Financed Property or otherwise.
5.13 No Default. There is no monetary or material
non-monetary default on the part of Borrower under this Agreement, or any of
the other Loan Documents and no event has occurred and is continuing which with
notice, or the passage of time, or either, would constitute a default under any
provision thereof.
6. ADDITIONAL COVENANTS OF BORROWER. Borrower covenants and
agrees with Lender as follows:
6.1 No Transfer, Subordinate Mortgage Financing or other
Encumbrance of Financed Property. No portion of the Financed Property shall be
sold, leased, conveyed, mortgaged or encumbered in any way without the prior
written consent of Lender provided, however, prior to the occurrence of an
Event of Default, Borrower may enter into contracts for the sale of Lots in the
ordinary course of Borrower's business. All easements, covenants and
restrictions or other agreements affecting the Financed Property shall be
submitted to Lender for its written approval prior to the execution thereof by
Borrower, accompanied by an appropriate survey showing the portion of the
Financed Property affected, and any other information requested.
6.2 Compliance with Restrictions and Laws. Borrower will
comply promptly with all restrictions of record, all federal, state and local
laws, ordinances and regulations, and all requirements of governmental
authority pertaining to the Financed Property, including, but not limited to
(i) the Interstate Land Sales Full Disclosure Act, if applicable, (ii) all
applicable federal and state securities laws, and (iii) all laws of the State
of Florida and all zoning, building and other local codes applicable to
developments of the type to be constructed. Borrower will also obtain and keep
in good standing all licenses, Permits and approvals required for construction
and use of the Improvements.
6.3 Brokerage Commissions. Borrower will not knowingly
engage in any activity or enter into any relationship which will give rise to
any loan or brokerage commission with regard to the Loan, and Borrower will
indemnify Lender from the claims of brokers arising by reason of the execution
hereof or the consummation of the transactions contemplated hereby.
6.4 Financial Statements and Reporting Obligations. The
Borrower shall furnish to Lender:
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6.4.1 Within one hundred twenty (120) days after
the end of each fiscal year, consolidated and consolidating financial
statements for the Borrower, the Guarantor and their respective subsidiaries,
all audited and presented with an unqualified opinion by a nationally
recognized accounting firm showing that the various statements fairly present
the financial condition of the Borrower, the Guarantor and their respective
subsidiaries as of the close of such year, prepared in accordance with
generally accepted accounting principles.
6.4.2 Within forty five (45) days following the end
of each fiscal quarter, the Borrower shall provide management prepared
financial statements for the Borrower, the Guarantor and their respective
subsidiaries, on a consolidated and consolidating basis, prepared as of the end
of that fiscal quarter. All such financial statements shall be prepared in
accordance with consistently applied generally accepted accounting principles,
and certified by the Borrower's chief financial officer of the Borrower and the
Guarantor as true and correct.
6.4.3 If requested by Lender, copies of the
Borrower's and the Guarantor's federal income tax returns.
6.4.4 Within forty five (45) days following the end
of each fiscal quarter, Borrower shall deliver a quarterly inventory report,
prepared as of the end of that quarter, reflecting all of the Borrower's then
existing construction and development projects, in form and substance, and
containing such additional information as may be required by the Lender from
time to time.
6.4.5 Promptly, from time to time, such other
information regarding the Financed Property or the operations, business,
affairs and financial condition of Borrower, its subsidiaries or affiliates as
Lender may reasonably request.
6.5 Insurance. Borrower will maintain in effect, for the
benefit of the Lender as its interest may appear, such insurance coverages as
may be required under the Loan Documents or by Lender, shall pay all premiums
therefor when due, and shall not permit any termination or material change to
any such coverage without Lender's prior written consent. Borrower shall also
cooperate with Lender in obtaining for Lender the benefits of any insurance or
other proceeds lawfully or equitably payable to it in connection with the
transaction contemplated hereby and in the collection of any indebtedness or
obligation of Borrower to Lender incurred hereunder (including the payment by
Borrower of the expense of an independent appraisal on behalf of Lender in case
of a fire or other casualty affecting the Premises).
6.6 Taxes. Borrower shall pay all personal property and
other taxes and assessments of whatever nature now or hereafter levied against
or which could result in a lien on all or any part of the Financed Property
prior to delinquency.
6.7 Indebtedness. Borrower will not incur, create,
assume or permit to exist with respect to the Financed Property any
indebtedness or liability for borrowed money, any indebtedness constituting the
deferred purchase price of any property or assets, of any indebtedness owed
under any conditional sale or title retention agreement, or any other
indebtedness or liability evidenced by notes, bonds, debentures or similar
obligations without the written approval of Lender, except:
6.7.1 indebtedness owed Lender;
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6.7.2 indebtedness incurred on open accounts for
materials, equipment and supplies purchased in the or course of business,
payment for which shall be made promptly when due;
6.7.3 indebtedness to Pacific United Development
Corp., a Nevada corporation pursuant to that certain unsecured promissory note
of even date herewith made by the Borrower payable to the order of Pacific
United Development Corp. in the principal amount of _______________________
Dollars ($_______________), subject to that certain Subordination Agreement of
even date herewith among the Lender, the Borrower and Pacific United
Development Corp.
6.8 Further Assurances and Preservation of Security.
Borrower will do all acts and execute all documents for the better and more
effective carrying out of the intent and purposes of this Agreement, as Lender
shall reasonably require from time to time, and will do such other acts
necessary or desirable to preserve and protect the collateral at any time
securing or intended to secure the Loan, as Lender may require.
6.9 Utilization of Loan Proceeds. Borrower will utilize
the proceeds of the Loan solely to finance the acquisition of the Lots.
6.10 No Assignment. Borrower shall not assign this
Agreement or any interest herein or right hereunder or allow any party other
than Borrower to act as general contractor for the Improvements, without
Lender's prior written consent.
6.11 Environmental.
6.11.1 Neither Borrower, or any party acting by,
through or under Borrower, nor any other party will manufacture, produce,
distribute, use, treat, transport, release, discharge, dispose of or otherwise
handle any Hazardous Substance on, at or about the Financed Property, except
for Customary Complying Substances.
6.11.2 Borrower shall regularly monitor the Financed
Property and all parties acting by, through or under Borrower to assure that
the representations and covenants contained in this Agreement remain true and
correct at all times.
6.11.3 Borrower shall give prompt written notice to
Lender of:
6.11.3.1 the violation or alleged
violation of any Environmental Laws at the Financed Property;
or
6.11.3.2 the presence or alleged
presence of any Hazardous Substance at, on or near the
Financed Property, other than Customary Complying Substances;
or
6.11.3.3 any and all notices issued,
or investigations, proceedings, claims or lawsuits threatened
or instituted, with respect to any Environmental Laws or the
alleged presence of any Hazardous Substance at, on or near the
Financed Property; or
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6.11.3.4 any discovery by Borrower of
any occurrence or condition that could cause the Financed
Property or any part thereof to violate any Environmental Laws
or become subject to any Hazardous Substance.
6.11.4 Lender, and its agents and representatives,
shall have the right from time to time, during normal business hours, and in a
manner so as not to unreasonably interfere with Borrowers' business, to enter
upon and inspect the Financed Property, collect earth and water samples
therefrom, and perform such other audits, evaluations and tests thereof as
Lender may reasonably deem advisable to ensure that the Financed Property
complies with all Environmental Laws, all at the cost and expense of the
Borrower; provided, however, Lender shall not require any such testing or
evaluations unless Lender has reasonable grounds to suspect that the Financed
Property may be subject to contamination. Lender shall also have the right to
join and participate in, as a party if it so elects, any legal proceedings or
actions affecting the Financed Property or the Borrower which involve any
Hazardous Substance or Environmental Laws.
6.11.5 In the event that any Hazardous Substance,
other than Customary Complying Substances, are found at or on the Financed
Property, Borrower shall take all necessary actions and shall spend all
necessary sums to cause the same to be timely eliminated, cleaned up and
removed from the Financed Property in accordance with all applicable
Environmental Laws, and Lender shall in no event be liable or responsible for
any costs or expenses incurred in connection therewith.
6.11.6 Borrower shall at all times observe and
satisfy the requirements of, and maintain the Financed Property in compliance
with, all Environmental Laws.
6.12 Indemnification. Without limiting any rights or
remedies available to Lender under this Agreement, the Mortgage or other Loan
Documents, or otherwise at law or in equity, if Borrower at any time shall
default in or fail to perform or observe any of its obligations under this
Agreement, Lender shall have the right, but not the duty, to perform such
obligations, and Borrower agrees to pay to Lender, on demand, all costs and
expenses incurred by Lender in connection therewith, and all costs and expenses
which Lender may incur in exercising any of its rights under or enforcing this
Agreement, including, without limitation, reasonable attorneys fees, together
with interest thereon from the date of expenditure at the highest rate of
interest allowed by law. Borrower also agrees to indemnify Lender and hold
Lender harmless from any and all liability, which may be imposed upon Lender
and any and all loss which Lender may incur (including, but not limited to,
attorneys' fees), by reason of:
6.12.1 the existence of any Hazardous Substance now
or hereafter on, in, under, at, or around the Financed Property;
6.12.2 the operation, effect or violation of any
Environmental Laws; and/or
6.12.3 the breach by Borrower of any warranty,
representation or covenant contained on this Agreement.
6.13 Survival of Indemnity. Notwithstanding anything
contained in this Agreement or in any of the Loan Documents or otherwise to the
contrary, the obligations of Borrower under this Agreement shall be secured by
the Mortgage and other Loan Documents and the indemnity obligations of Borrower
under this Agreement concerning Hazardous Substances and Environmental Laws
shall survive the foreclosure of the Mortgage or other Loan Documents, the
taking by Lender of any deed or
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deeds in lieu of foreclosure, the repayment of the indebtedness secured by the
Mortgage, and the satisfaction or other termination of the Mortgage and other
Loan Documents.
6.14 Financial Covenants. So long as any Loan indebtedness
remains outstanding, Guarantor shall at all times:
6.14.1 maintain a minimum tangible net worth of not
less than Ten Million Five Hundred Thousand Dollars ($10,500,000.00); and
6.14.2 maintain a maximum debt to tangible net worth
ratio of no more than 5:1,
all as determined in accordance with generally accepted accounting principles.
6.15 Advertising. Lender shall have the right to install
and maintain at the Subdivision one sign identifying Lender as the institution
financing the Financed Property.
6.16 Third-Party Defaults. Borrower shall immediately
give Lender written notice of any default by Borrower under any obligation to
any person other than Lender, if such default involves nonpayment or liability
of $100,000.00 or more.
6.17 Change of Ownership. So long as any portion of the
Loan remains outstanding or this Loan Agreement remains in effect, there shall
be no change in the ownership of any capital stock of the Borrower and Borrower
shall remain a solely owned subsidiary of the Guarantor.
7. DEFAULT. Upon the occurrence of any one or more of the
following events (individually, an "Event of Default"), all obligations on the
part of Lender to make any further Advance hereunder shall, if Lender elects,
terminate, and Lender may at its option then or thereafter exercise any of its
remedies set forth herein, but Lender may make any Advances or parts of
Advances after the happening of any Event of Default without thereby waiving
the right to then or thereafter exercise such remedies and without becoming
liable to make any further Advance:
7.1 Failure to Satisfy Conditions. If Borrower fails to
satisfy any condition under this Agreement; or
7.2 Bankruptcy. If there is filed by or against Borrower
a Petition in bankruptcy or a petition for the appointment of a receiver or
trustee of the property of Borrower, and any such petition not filed by
Borrower is not dismissed within sixty (60) days of the date of filing
(provided Lender shall not be obligated to fund any additional Advances pending
such dismissal), or if Borrower files a petition for reorganization under any
of the provisions of the Bankruptcy Code or of any similar law, state, federal,
or foreign, or if Borrower makes a general assignment for the benefit of
creditors or makes any insolvency assignment or is adjudicated insolvent by any
court of competent jurisdiction; or
7.3 Breach of Covenants, Warranties and Representations.
If (i) any warranty or representation made by Borrower in this Agreement or in
connection with the Loan shall at any time be false or misleading in any
material respect, or (ii) if Borrower shall fail to keep, observe or perform
any of the terms, covenants, representations or warranties contained in the
Agreement, or (iii) any default shall occur under the Note, the Mortgage, or
any of the other Loan Documents, or (iv) Borrower shall
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default in any of its other obligations to Lender, including, but not limited
to, that certain Construction Line of Credit Loan Agreement of even date
herewith between the Borrower and the Lender or under any other promissory
note, loan agreement, mortgage or other evidence of indebtedness existing
between the Borrower and the Lender, or (v) if Borrower shall default in any
obligation to any person other than Lender, if such default involves non
payment or liability of $100,000.00 or more; or
7.4 Material Adverse Change of Borrower. If any material
adverse change shall occur in the financial condition of Borrower at any time
during the term of the Loan from the financial condition revealed in statements
already presented to and accepted by Lender.
8. REMEDIES OF LENDER. Upon the happening of any Event of
Default, after written notice and ten (10) days opportunity to cure in the
event of a monetary default or thirty (30) days opportunity to cure in the
event of a non-monetary default (unless either a longer or shorter cure period
is specifically provided the Note, Mortgage or other Loan Document for a
particular default or breach thereof, in which event such longer or shorter
cure period shall govern), then Lender may, at its option, exercise any one or
more of the following remedies (provided Lender shall not be required to give
written notice of any default of the same type or nature more than twice in any
twelve (12) month period prior to exercising such remedies):
8. 1 terminate this Agreement;
8.2 commence an appropriate legal or equitable action to
enforce performance of this Agreement;
8.3 require that the Loan, including all amounts due
under the Note and all amounts due under this Agreement or any of the other
Loan Documents, be paid immediately in full, apply all or any portion of the
equity funds toward payment of the Loan, and commence appropriate legal and
equitable action to foreclose the Mortgage and collect and otherwise all such
amounts due Lender;
8.4 take such action as may be reasonable to preserve and
protect the Financed Property and any construction materials stored thereon;
and
8.5 exercise any other rights or remedies Lender may have
under the Mortgage or other Loan Documents or which may be available in equity
or under applicable law.
9. RELEASES. Lender agrees to release any Lot from the
lien of the Mortgage and other Loan Documents by appropriate instrument of
partial release at Borrower's sole cost and expense in substantially the form
attached hereto as Exhibit "D", provided that prior to and as a condition to
each such release:
9.1 Borrower pays to Lender in immediately available
funds, a release payment equal to one hundred ten percent (110%) of the average
aggregate amount of all sums advanced hereunder (determined on per Lot basis),
as determined by the Lender; and
9.2 there shall not have occurred any Event of Default
hereunder or under any of the other Loan Documents nor any event of omission or
commission which with the passage of time or notice or both would constitute an
Event of Default hereunder or under any of the other Loan Documents.
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9.3 In addition, Lender agrees to release from the lien
of the Mortgage and other Loan Documents, without payment of a release price,
those portions of the Financed Property, not encompassing any part of the Lots,
which constitute common areas within the Subdivision upon recordation of a plat
of the Subdivision or a conveyance of such common areas to a homeowner's
association or dedication to a public authority.
10. GENERAL TERMS. The following shall be applicable throughout
the period of this Agreement or thereafter as provided herein:
10.1 Rights of Third Parties. All conditions of the
Lender hereunder are imposed solely and exclusively for the benefit of Lender
and its successors and assigns, and no other person shall have standing to
require satisfaction of such conditions or be entitled to assume that Lender
will make advances in the absence of strict compliance with any or all thereof,
and no other person shall, under any circumstances, be deemed to be a
beneficiary of this Agreement or the Loan Documents, any provisions of which
may be freely waived in whole or in part by the Lender at any time if, in its
sole discretion, it deems it desirable to do so. In particular, Lender makes no
representations and assumes no duties or obligations as to Borrower or any
third parties concerning the quality of the construction by Borrower of the
Improvements or the absence therefrom of defects.
10.2 Borrower is not Lender's Agent. Nothing in this
Agreement, the Note, the Mortgage or any other Loan Documents shall be
construed to make Borrower the Lender's agent for any purpose whatsoever, or
Borrower and Lender partners, or joint or co-venturers. The relationship of the
Borrower and Lender shall, at all times, be that of debtor and creditor.
10.3 Lender Not Liable for Damage or Loss. All
inspections and other services rendered by or on behalf of Lender shall be
rendered solely for the protection and benefit of the Lender. Neither Borrower
nor any third Persons shall be entitled to claim any loss or damage against the
Lender or against its agents or employees for failure to properly discharge
their duties.
10.4 Lender Not Obligated to Insure Proper Disbursement of
Funds to Third Parties. Nothing contained in this Agreement, or any of the
other Loan Documents, shall impose upon Lender any obligation to oversee the
proper use or application of any disbursements of funds made in connection with
the Loan.
10.5 Indemnification from Third Party Claims. Borrower
shall indemnify Lender from any liability, claims or losses resulting from the
disbursement of any Loan proceeds the construction of the Improvements, or the
condition of the Financed Property, whether related to the quality of
construction or otherwise, and whether arising during or after the term of the
Loan. This provision shall survive the repayment of the Loan and shall continue
in full force and effect so long as the possibility of such liability, claims,
or losses exists.
10.6 Evidence of Satisfaction of Conditions. Lender
shall, at all times, be free independently to establish to its good faith and
satisfaction, and in its reasonable discretion, the existence or nonexistence
of a fact or facts which are disclosed in documents or other evidence required
by the terms of this Agreement.
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10.7 Headings. The headings of the sections, paragraphs
and subdivisions of this Agreement are for the convenience of reference only,
and shall not limit or otherwise affect any of the terms hereof.
10.8 Invalid Provisions to Affect No Others. If
performance of any provision hereof or any transaction related hereto is
limited by law, then the obligation to be performed shall be reduced
accordingly to its maximum lawful scope; and if any clause or provision herein
contained operates or would prospectively operate to invalidate this Agreement
in part, then the invalid part of said clause or provision only shall be held
for naught, as though not contained herein, and the remainder of this Agreement
shall remain operative and in full force and effect.
10.9 Application of Interest to Reduce Principal Sums.
Nothing herein contained, nor any transaction related hereto, shall be
construed or so operate to require Borrower, or any other person liable for
repayment of the Note or any other amount pursuant to the Loan Documents, to
pay interest at a greater rate than is now lawful in such case to contract for,
or to make any payment, or to do any act contrary to law. Should any interest
or other charges in connection with the Loan payable or paid by Borrower, or
any other person, whether under the Note or any of the other Loan Documents,
result in the computation or earning of interest in excess of the maximum rate
of interest which is legally permitted under applicable laws, then any and all
of such excess shall be and the same is hereby waived by Lender hereof, and any
and all such excess paid shall be automatically credited against and in
reduction of the principal balance due under the Note or, at the option of
Lender, paid directly by Lender to the Borrower or any other person liable for
the payment of the Note.
10.10 Governing Law. The laws of the State of Florida
shall govern the interpretation and enforcement of this Agreement.
10.11 Number and Gender. Whenever the singular or plural
number, masculine or feminine or neuter gender is used herein, it shall equally
include the others and shall apply jointly and severally.
10.12 Extraneous Agreements. No prior or present
agreements or representations, whether written or oral, shall be binding upon
Lender unless expressed in this Agreement, it being intended that each and
every such agreement and representation shall be either merged herein or
extinguished.
10.13 Waiver. If Lender shall waive any provisions of any
of the Loan Documents, or shall fail to enforce any of the conditions or
provisions of this Agreement, such waiver shall not be deemed to be a
continuing waiver and shall never be construed as such; and Lender shall
thereafter have the right to insist upon the enforcement of such conditions or
provisions. Furthermore, no provision of this Agreement shall be amended,
waived, modified, discharged or terminated, except by instrument in writing
signed by the parties hereto.
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10.14 Notices. All notices, to be effective, must be in
writing and sent by certified U.S. mail, federal express or other reputable
courier, addressed (as applicable), in the case of Borrower, to Borrower at its
address first set forth above, Attn: Xxxx X. Xxxxxx, Vice-President, with copy
to NHC Holdings, Corp., a Nevada corporation, 0000 Xxxxxxxxx Xxxxxxx, Xxxxx
0000, Xxxxxxx, Xxxxx 00000, Attn: Xxxxxxx X. Xxxxxx and Xxxxxxxxx & Xxxxxx,
P.A., One Southeast Third Avenue, 0000 Xxx Xxxx Xxxxxxxxxxxxx Xxxxxx, Xxxxx,
Xxxxxxx 00000-0000, Attn: Xxxxx Xxxxxx and, in the case of Lender, to Lender
at its address first set forth above, Attn: Loan Administration and to Xxxx
Xxxxxxx, Vice President, Commonwealth United Mortgage, 000 Xxxxx Xxxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxx Xxxxxxx, Xxxxxxx 00000, with postage and courier
charges prepaid. Any notice may also be delivered by facsimile transmission,
if to Borrower, then to 305/854-4507 (Attn: Xxxx X. Xxxxxx) and 305/372-1468
(Attn: Xxxxx Xxxxxx) and if to Lender, then to (000) 000-0000 (Attn: Loan
Administration) and (000) 000-0000 (Attn: Xxxx Xxxxxxx). Lender or Borrower may
change their respective addresses or facsimile numbers, for notice purposes,
or their designated recipients of notices, by delivering notice of the change
to the other in accordance with this paragraph. Any notice shall be deemed
"delivered" when sent as aforesaid and received, unless receipt is refused, in
which case the notice shall be deemed "delivered" when refused.
10.15 Successors and Assigns. This Agreement shall inure
to the benefit of and be binding on the parties hereto and their heirs, legal
representatives, successors and assigns; but nothing herein shall authorize the
assignment hereof or any rights or interest hereunder by Borrower.
10. 16 Time is of the Essence. Time is of the essence of
this Agreement, including the performance of each of the terms, conditions and
provisions hereof.
10.17 Attorney's Fees. If either party hereto shall ever
seek to enforce its rights or engage an attorney to defend it or to assist it
in enforcing any of the terms, conditions or provisions under this Agreement or
any of the other Loan Documents, the prevailing party to such action shall be
entitled to collect all reasonable sums incurred in connection therewith,
whether or not suit shall be brought, and, if so, then at all pre-trial,
appellate, post-judgment, bankruptcy and other proceedings.
11. ARBITRATION.
11.1 To the maximum extent not prohibited by law, any controversy,
dispute or claim arising out of, in connection with, or relating to this
Agreement or the Loan Documents or any transaction provided for therein,
including, but not limited to, any claim based on or arising from an alleged
tort or an alleged breach of any agreement contained in any of the Loan
Documents, shall, at the request of any party to this Agreement or the Loan
Documents (either before or after the commencement of judicial proceedings), be
settled by arbitration pursuant to Title 9 of the United States Code, which the
parties hereto acknowledge and agree applies to the transaction involved
herein, and in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"). In any such arbitration proceedings: (i)
all statutes of limitations which would otherwise be applicable shall apply;
and (ii) the proceeding shall be conducted in Orlando, Florida, by a single
arbitrator, if the amount in controversy is $1,000,000.00 or less, or by a
panel of three (3) arbitrators if the amount in controversy is over
$1,000,000.00. All arbitrators shall be selected by the process of appointment
from a panel pursuant to Section 13 of the AAA Commercial Arbitration Rules and
each arbitrator will have AAA acknowledged expertise in the appropriate subject
matter. Any award rendered in any such arbitration proceeding shall be final
and binding, and judgment upon any such award may be entered in any court
having jurisdiction. Notwithstanding the foregoing, to the extent the matter
in controversy is covered by insurance, no award shall be binding unless
binding arbitration is consented to by all applicable insurers. Borrower will
exercise its best efforts to obtain such consents.
11.2 If any party to this Agreement or the Loan Documents
files a proceeding in any court to resolve any such controversy, dispute or
claim, such action shall not constitute a waiver of the right of such party or
a bar to the right of any other party to seek arbitration under the provisions
of this
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Section of that or any other claim, dispute or controversy, and the court
shall, upon motion of any party to the proceeding, direct that such
controversy, dispute or claim be arbitrated in accordance with this Section.
11.3 Notwithstanding any of the foregoing, the parties
hereto agree that no arbitrator or panel of arbitrators shall possess or have
the power to (i) assess punitive damages, (ii) dissolve, rescind or reform
(except that the arbitrator may construe ambiguous terms) of this Agreement or
the Loan Documents, (iii) enter judgment on the debt, (iv) exercise equitable
powers or issue or enter any equitable remedies, or (v) allow discovery of
attorney/client privileged information, and the parties hereby waive the
aforementioned remedies. The Commercial Arbitration Rules of the AAA are hereby
modified to this extent for the purpose of arbitration of any dispute,
controversy or claim arising out of, in connection with, or relating to this
Agreement or the Loan Documents.
11.4 No provision of, or the exercise of any rights under,
this Section shall limit or impair the right of any party to the Loan Documents
before, during or after any arbitration proceeding to: (i) exercise self-help
remedies such as setoff for repossession: (ii) foreclose (judicially or
otherwise) any lien on or security interest in any real or personal property
collateral; or (iii) obtain emergency relief hypothecation, pledging or
concealment of assets or of collateral securing any indebtedness, obligation or
guaranty referenced in the Loan Documents. Such emergency relief may be in the
nature of, but is not limited to: pre-judgment attachments, garnishments,
sequestrations, appointments of receivers, or other emergency injunctive relief
to preserve the status quo.
11.5 In the event arbitration is prohibited by law with
respect hereto, any actions or proceedings with respect to the Note, this
Agreement or the other Loan Documents may be instituted in the courts of the
State of Florida, or elsewhere to the extent that jurisdiction shall exist
apart from the provisions of this Section, as the Lender may elect, and by
execution and delivery of this Agreement, the Borrower irrevocably and
unconditionally submits to the jurisdiction (both subject matter and personal)
of each such court, and irrevocably and unconditionally waives (i) any
objection the Borrower may now or hereafter have to the laying of venue in any
of such courts, and (ii) any claim that any action or proceeding brought in any
of such courts has been brought in an inconvenient forum.
12. WAIVER OF JURY TRIAL. EACH OF THE UNDERSIGNED HEREBY
KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY
WITH RESPECT TO ANY LITIGATION BETWEEN THEM, INCLUDING, BUT NOT LIMITED TO,
WITH RESPECT TO ANY AND ALL CAUSE OR CAUSES OF ACTION, DEFENSES, COUNTERCLAIMS,
CROSS CLAIMS, THIRD PARTY CLAIMS, AND INTERVENOR'S CLAIMS, REGARDLESS OF THE
CAUSE OR CAUSES OF ACTION, DEFENSES OR COUNTERCLAIMS ALLEGED OR THE RELIEF
SOUGHT BY ANY PARTY, AND REGARDLESS OF WHETHER SUCH CAUSES OF ACTION, DEFENSES
OR COUNTERCLAIMS ARE BASED ON, OR ARISE OUT OF, UNDER OR IN CONNECTION WITH
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY OF THE OBLIGATIONS
COVERED THEREBY.
THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT BETWEEN THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SHALL SUPERSEDE AND
REPLACE ALL PRIOR AGREEMENTS OR UNDERSTANDINGS, WRITTEN OR ORAL, RELATING TO
THE MATTERS SET FORTH HEREIN. THIS AGREEMENT MAY ONLY BE
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EXHIBIT 10.7
AMENDED IN WRITING AND NO ORAL REPRESENTATIONS OR AGREEMENTS SHALL BE BINDING
UPON THE LENDER UNLESS REDUCED TO A WRITING SIGNED BY THE LENDER.
IN WITNESS WHEREOF, Borrower and Lender have caused this Agreement to
be executed on the date first above written.
Signed, sealed and delivered
in the presence of: LENDER:
BANK UNITED OF TEXAS FSB
/s/ XXXXX X. XXXXXX By: /s/ XXXX XXXXXXX
---------------------------------- --------------------------------------
Witness Xxxxx X. Xxxxxx XXXX XXXXXXX, Vice-President
----------------------------------
/s/ XXXXXXX XXXXX (Print Name)
----------------------------------
Witness Xxxxxxx Xxxxx
----------------------------------
(Print Name)
BORROWER:
THE XXXXX COMPANIES, INC., A FLORIDA
CORPORATION
/s/ XXXXXXX X. XXXXXXX By: /s/ X. XXXXXX
---------------------------------- --------------------------------------
Witness Name: XXXX XXXXXX
XXXXXXX X. XXXXXXX ------------------------------------
---------------------------------- Title: Vice President
(Print Name) -----------------------------------
/s/ XXXXXX X XXX-XXXXX
----------------------------------
Witness
XXXXXX X XXX-XXXXX
----------------------------------
(Print Name)
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EXHIBIT 10.7
STATE OF FLORIDA )
)
COUNTY OF _________ )
The foregoing instrument was acknowledged before me this _____ day of
March, 1996, by XXXX XXXXXXX as Vice-President of BANK UNITED OF TEXAS FSB, a
federal savings bank, on behalf of the Bank, who is personally known to me.
/s/ XXXXX X. XXXXXX
-------------------------------------
NOTARY PUBLIC
Xxxxx X. Xxxxxx
-------------------------------------
(Print Name)
My Commission Expires:
(Seal)
STATE OF FLORIDA )
)
COUNTY OF DADE )
The foregoing instrument was acknowledged before me this 9th day of
March, 1996, by Xxxx Xxxxxx as Vice-President of THE XXXXX COMPANIES, INC., on
behalf of the corporation, who is personally known to me or who has produced
________________________ as identification.
/s/ XXXXXX X. XXX-XXXXX
-------------------------------------
NOTARY PUBLIC
XXXXXX X. XXX-XXXXX
-------------------------------------
(Print Name)
My Commission Expires: Mar. 28, 1998
(Seal)
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