XXXXXXX 00.000
XXXX Xxxx XXX Xx. 000
(02/25/97)
Loan No. 00-0000000
BUILDING LOAN AGREEMENT
(Land Development)
Dated as of July 31, 2001
JORDAN LAKE PRESERVE CORPORATION, a North Carolina corporation (the
"Borrower"), and INDYMAC BANK, F.S.B. dba CONSTRUCTION LENDING CORPORATION OF
AMERICA (the "Lender"), agree as follows:
1.00 Preliminary Statement. The Borrower owns the Land described in Exhibit
"A", which consists of approximately 597 acres, and intends to develop and
improve the Land in accordance with the Improvement Plans submitted by the
Borrower to the Lender. In conjunction with the completion of such Improvements,
the Borrower intends that the Land will be developed as 515 Lots in two (2)
phases, with at least 355 Lots in Phase I and at least 160 Lots in Phase II. The
development of the Land and the Project commenced prior to the closing of the
Loan, with certain of the Lots within Phase I having been previously conveyed to
third party purchasers. Therefore, due to such prior conveyances, the Land shall
initially include (i) the 170 Lots in Phase I of the Project which continue to
be owned by Borrower; and, (ii) all of the Land which shall constitute Phase II
of the Project and the golf course and related amenities being developed by
Borrower as a part of the Project. In order to finance the Land and the
construction of the Improvements and the payment of various costs and expenses
relating to the Project, the Borrower has applied to the Lender for a revolving
line of credit Loan in the amount of up to $6,700,000.00, the repayment of which
will be secured by the Borrower's interest in the Land and the Improvements and
the other Collateral covered by the Deed of Trust to be executed by the Borrower
in favor of the Lender. The Lender is willing to make the Loan to the Borrower
on the terms and conditions set forth in this Agreement.
1.01 Type of Loan. The Loan is structured as a revolving line of credit of
up to $6,700,000.00. Subject to compliance by Borrower with the funding
requirements expressly set forth in this Agreement, Borrower may repay the Loan
or portions thereof and then reborrow from time to time under such line of
credit hereby
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established up to the maximum amount of $6,700,000.00 which may be outstanding
at any one time; provided, however, notwithstanding anything in the foregoing to
the contrary, the maximum amount which may be outstanding under the Loan at any
one time shall not exceed the lesser of (i) fifty percent (50%) of the retail
value of Lots owned by Borrower under development or completed at any one time
as determined by an appraiser acceptable to Lender, (ii) seventy five percent
(75%) of the "Discounted Appraised Value" of such Lots owned by Borrower under
development or completed at any one time as determined by an appraiser
acceptable to Lender or, (iii) seventy five percent (75%) of the total costs
incurred by Borrower pursuant to the Project Budget. As used herein "Discounted
Appraised Value" means the estimated amount a single investor would be willing
to pay for all of such Lots owned by Borrower under development or completed at
any one time upon the full development of such Lots when purchasing such Lots in
bulk; that is, all at one time. Subject to the foregoing maximum amount which
may be outstanding under the Loan at any one time and compliance with all of the
other terms and provisions of this Agreement and the other Loan Documents,
Lender has committed the sum under the Loan as shown in the Project Budget, as
the same may be modified from time to time, over the two (2) year term of the
Loan, provided the second installment of the Loan Fee is timely received by
Lender as necessary to extend the initial one (1) year term of the Loan.
Capitalized terms used in this Agreement and not otherwise defined are used
with the meanings set forth in Exhibit "F".
2.00 Documentation. Prior to the first Disbursement of the proceeds of the
Loan requested by the Borrower, the Borrower shall deliver or cause to be
delivered to the Lender, in form and substance satisfactory to the Lender, the
Loan Documents and other "Required Items" specified in Exhibit "C", together
with such other Documents and information relating to any Loan Party, the
Collateral, the Project or the transactions contemplated by the Loan Documents
as the Lender may reasonably request.
3.00 Disbursements. Subject to the terms, conditions and procedures set
forth in this Agreement and in the "Disbursement Schedule" attached as Exhibit
"B", the Lender shall make Disbursements to or for the account of the Borrower
from time to time from the date of this Agreement to the Banking Day immediately
preceding the Maturity Date. The aggregate amount of all Disbursements made by
the Lender shall not exceed the amount committed by Lender under the Loan as
shown in the Project Budget, as the same may be modified from time to time, plus
the amount of any "Borrower's Funds" deposited with the Lender pursuant to the
Disbursement Schedule. All Disbursements of the proceeds of the Loan shall be
evidenced by and repayable in accordance with the terms of the Note.
4.00 Covenants of the Borrower. Unless the Lender otherwise consents in
writing:
4.01 Construction of Improvements. The construction of the Improvements has
commenced and
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Borrower shall cause the construction thereof to be diligently and continuously
prosecuted to completion, subject in each case to the following requirements:
(a) the Improvements shall be constructed in substantial conformity with the
Improvement Plans and in compliance in all material respects with all applicable
Laws and Other Requirements, and in a good and workmanlike manner with new
materials of good quality; (b) except as otherwise contemplated by the
Improvement Plans with respect to any "Site Development" referred to in the
Project Budget, the Improvements shall be constructed entirely on the Land and
shall not encroach upon or overhang any lot line, boundary, set-back, easement,
right-of-way or other land; (c) construction of the Improvements shall in any
event be completed on or before the Maturity Date; and (d) the Borrower hereby
covenants and agrees, on behalf of itself and any of its affiliates, that no
such Person shall construct, create, arrange, develop, purchase or sell any
residential building lots which constitute a Competing Project.
If at any time the Lender notifies the Borrower that construction of the
Improvements does not conform to the requirements of this Section 4.01 or any
such nonconformity is otherwise discovered by the Borrower, the Borrower shall
immediately cause such nonconforming construction to be stopped and all
necessary corrective work to be commenced and diligently and continuously
prosecuted to completion.
4.02 Change Orders. The Borrower shall not permit any Change Order to the
Improvement Plans to be implemented without the prior approval of the Lender,
provided that this Section 4.02 shall not prevent routine changes in
construction which would not cause the Improvements to fail to be in substantial
conformity with the approved Improvement Plans and which are not otherwise
material in the aggregate.
4.03 Compliance with Laws and Other Requirements. The Borrower shall (a)
comply in all material respects with all applicable Laws and Other Requirements
relating to the Collateral or the Project, and (b) obtain and maintain all
Authorizations required in connection with the Collateral or the Project.
4.04 Project Agreements. The Borrower shall (a) take all action reasonably
necessary or appropriate to maintain and enforce its rights and interests under
each of the Project Agreements (including the Engineer Agreement, the
Construction Contract, if any, and any other contract entered intoby Borrower
relative to the development of the Project), (b) comply in all material respects
with its obligations under each of the Project Agreements, (c) not permit or
agree to any supplement, modification, amendment or termination of, or consent
or agree to any waiver of or departure from the terms of, any of the Project
Agreements, and (d) not transfer, encumber or release any interest in, or commit
or permit any material breach or default on the part of the Borrower under, any
of the Project Agreements, except that so long as no Event of Default has
occurred and is continuing, this Section 4.04 shall not apply to (i) any failure
of the Borrower to comply with such requirements which in the aggregate does
not, and in the reasonable judgment of the Borrower and the Lender will not,
materially impair the Borrower's ability to perform its Obligations under the
Loan Documents, (ii) any amendment of the Engineer Agreement, the Construction
Contract, if any, and any other contract entered into
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by Borrower relative to the development of the Project to incorporate any Change
Orders which are permitted to be implemented by Section 4.02, or (iii) the
termination of any Project Agreement as a result of a material breach or default
by the other party.
4.05 Collateral. The Borrower shall take all action necessary or
appropriate from time to time to maintain the Deed of Trust as an indefeasible
first priority perfected Lien in the Collateral, and shall not at any time part
with possession of or abandon any of the Collateral or cause or permit any
interest in any of the Collateral to be sold, transferred, leased, encumbered,
released, relinquished or otherwise disposed of (whether voluntarily, by
operation of law or otherwise), provided that: (a) so long as no Event of
Default has occurred and is continuing and receipt by the Lender of the
applicable "Release Price" set forth in Exhibit "E" and payment of all
applicable costs, fees and expenses, (i) the Borrower may sell Lots in the
ordinary course of business and transfer common areas to a homeowners
association if and when required by applicable Laws or Other Requirements, (ii)
the Lender shall release Lots and common areas or interests in common areas so
sold or transferred from the Lien of the Deed of Trust and (iii) the Borrower
may, in the ordinary course of business, receive, hold and dispose of any excess
proceeds resulting from the sale of any Lot after payment of the applicable
"Release Price"; and (b) the requirements of this sentence shall not prohibit
(1) the creation or existence of any Permitted Exceptions or Permitted
Transfers, or (2) any action with respect to any Project Agreements to the
extent permitted by Section 4.04. Releases hereunder by Lender shall be
accomplished by utilization of release deeds in the form attached hereto as
Exhibit "H" and incorporated herein by this reference. Lender commits to execute
and return release deeds to Borrower's counsel releasing Lots from the Lien of
the Deed of Trust within four (4) weeks after receipt of the applicable "Release
Price" and the completed release deed from Borrower's counsel.
The amount of any "Release Price" received by the Lender shall be applied
to the principal of the Note, provided that if such amount exceeds the principal
of the Note then outstanding, the excess shall be held by the Lender in a Cash
Collateral Account and thereafter applied by the Lender (A) so long as no Event
of Default has occurred and is continuing, to future advances of principal under
the Note as and when made, or (B) if an Event of Default has occurred and is
continuing, to any Obligations of the Borrower under the Loan Documents at such
time or times and in such manner as the Lender deems appropriate. Upon payment
in full of all Obligations of the Borrower and termination of all obligations of
the Lender under the Loan Documents, the Lender shall release its interest in
any amounts then held in any such Cash Collateral Account.
The Borrower shall at all times use its best efforts to market and sell
Lots in compliance with the terms of this Agreement.
4.06 Personal Property. The Borrower shall not (a) install or otherwise use
or acquire for use in connection with the Collateral or the Project any Personal
Property (including replacement Personal Property
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pursuant to clause (iii) below) which is not owned by the Borrower free and
clear of all Liens (including conditional sale contracts) and Rights of Others
(other than Permitted Exceptions) or which is not a part of the Collateral, or
(b) cause or permit the removal from the Land (or, in the case of offsite
improvements, from the location of installation) of any Personal Property which
is installed or otherwise used or acquired for use in connection with the
Collateral or the Project, except that so long as no Event of Default has
occurred and is continuing, this clause (b) shall not prohibit (i) the temporary
removal of Personal Property for repairs in the ordinary course of business,
(ii) the removal of Personal Property of insignificant value which is not
reasonably necessary or appropriate to the completion of the Project, or (iii)
the removal of defective Personal Property which has been replaced by other
Personal Property of equal or greater suitability and value which is intended
for the same purpose. Upon removal of any Personal Property in compliance with
clauses (ii) and (iii) above, the Borrower shall be permitted to transfer or
otherwise dispose of such Personal Property as the Borrower may determine.
4.07 Liens and Taxes. The Borrower shall (a) pay, prior to delinquency, all
Taxes which are or may become a Lien affecting any of the Collateral, and not
consent to any Special Taxes which affect or may affect any of the Collateral,
(b) keep the Collateral free and clear of all Liens and Rights of Others,
subject only to Permitted Exceptions and Permitted Transfers of Personal
Property, (c) promptly pay or cause to be paid, and obtain valid and enforceable
lien releases or waivers (together with invoices or receipts identifying the
nature of each payment) from, all Lien Claimants, (d) take all other necessary
steps to forestall the assertion of Lien Claims, and (e) pay and perform when
due all other obligations secured by or constituting a Lien affecting any of the
Collateral, except that the Borrower shall not be required to pay or perform any
such Taxes, Lien Claims or other obligations which are being actively contested
in good faith by appropriate proceedings, provided that the Borrower has posted
such security for the payment or performance of such Taxes, Lien Claims or other
obligations as the Lender may reasonably require and, by reason of nonpayment,
none of the Collateral or any Lien or other interest of the Lender under the
Loan Documents is prejudiced or in danger of being sold, foreclosed or otherwise
lost or forfeited.
In the event that any action or other proceeding is instituted to enforce
any Lien (including any mechanics lien, and whether or not such Lien constitutes
a Permitted Exception) against any of the Collateral, the Borrower shall
immediately make such payments, obtain such surety bonds and/or take such other
action as the Lender may reasonably require in order to release the stop notice
or Lien. Upon failure of the Borrower to take any of the foregoing actions in a
timely manner, the Lender may, at its option, file an interpleader action to
resolve any pending claims.
The Borrower irrevocably appoints the Lender as its agent (such agency
being coupled with an interest) to file any notices that the Lender deems
appropriate in order to protect its interests under the Loan Documents.
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4.08 Property and Liability Insurance. The Borrower shall at all times
maintain the following policies of insurance:
(a) commercial general liability insurance in favor of the Borrower
(and naming the Lender and its subsidiaries and affiliates as additional
insureds) in an aggregate amount not less than $3,000,000 (or such greater
amount as may be specified by the Lender from time to time) combined single
limit;
(b) with respect to any Collateral consisting of building materials
and supplies and other Personal Property and any improvements now or in the
future located on the Land, such insurance against loss or damage as the
Lender may reasonably require from time to time; and
(c) such other insurance as may be required by applicable Laws
(including worker's compensation and employer's liability insurance) or as
the Lender may reasonably require from time to time.
The Borrower shall also cause the Contractor, if any, and each
subcontractor to maintain a policy of commercial general liability insurance
and, upon request by the Lender, shall cause the Architect and any engineer
engaged in connection with the Project to maintain a policy of professional
liability insurance, in each case for such periods and in such amounts as the
Lender may reasonably require from time to time.
Any policy of property insurance required by clause (b) above shall be in
an amount not less than the full replacement cost of the property covered by
such policy, shall contain a "full replacement cost" endorsement, shall insure
against flood loss risk if the Land is located in a Flood Hazard Area, and shall
name the Lender and its subsidiaries and affiliates as "loss payee" pursuant to
form BFU 438 or other form approved by the Lender. Each policy of commercial
general liability insurance required by this Section 4.08 shall cover personal
injury, property damage, owner/contractor protective, blanket contractual
liability and (where applicable) completed operations, with x, c and u
exclusions deleted, and such insurance shall be primary and non-contributing
with any other insurance available to the Lender. All insurance policies shall
be in form and substance and issued by insurers reasonably satisfactory to the
Lender, and shall contain such deductibles and such endorsements as the Lender
may reasonably require. Upon request by the Lender from time to time, the
Borrower shall deliver to the Lender copies of all such insurance policies and
originals of certificates evidencing such policies.
4.09 Title Insurance and Searches. The Borrower shall deliver to the
Lender, in form and substance satisfactory to the Lender, such endorsements to
the Title Policy and such preliminary title reports and other title or lien
searches (including UCC searches) and tax service contracts as the Lender may
reasonably require from time to time; provided, however, the Title Policy shall
be issued to cover all future advances under the Loan and shall include a
revolving credit endorsement and such other endorsements as Lender and its
counsel may require.
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4.10 Books, Records and Inspections. The Borrower shall at all times
maintain (a) full and complete books of account and other records with respect
to the Collateral and the Project and its business and operations, (b) complete
copies of the Improvement Plans, all Project Agreements and all Authorizations
issued in connection with the Collateral or the Project, and (c) a complete file
of all invoices, receipts and lien releases and waivers obtained by the Borrower
with respect to amounts paid for Project Costs, and shall permit the Lender and
its agents, upon request from time to time, to inspect and copy any of such
books, records and other Documents and to enter and inspect the Real Property
and any other Collateral and all work and materials furnished in connection with
the Project.
4.11 Construction Information and Reporting Requirements. The Borrower
shall cause to be delivered to the Lender, in form and detail satisfactory to
the Lender:
(a) promptly after discovery by the Borrower, notice of (i) any fact
or circumstance that may or will cause the Project Costs associated with
any Line Item in the Project Budget to exceed or be less than the
corresponding amount set forth in the Project Budget attached as Exhibit D
(excluding for this purpose any reference to Line Item Budget) by more than
five percent (5%), or that may or will cause any Project Costs for any
matters not covered by specific Line Items to exceed in the aggregate
$50,000.00, (ii) any failure of the Project or the Improvements to be in
substantial conformity with the Improvement Plans and in compliance in all
material respects with all applicable Laws and Other Requirements, (iii)
any actual or anticipated material delays in construction, (iv) any serious
threat or the commencement of any action or other proceeding (including any
action to foreclose or otherwise enforce any Lien Claim or other Lien and
any proceedings in condemnation or eminent domain) affecting or relating to
any of the Collateral or the Project, (v) the occurrence or allegation of
any termination, material breach or default, or failure of any material
condition or other requirement under the Engineer Agreement, if any, the
Construction Contract, if any, or any other contract entered into by
Borrower relative to the development of the Project, (vi) any dispute
between the Borrower and any Governmental Agency relating to any of the
Collateral or the Project, the adverse determination of which could
adversely affect the Collateral or the Project in any material respect,
(vii) any injury or damage to or loss or destruction of any of the
Collateral if the cost of repair, restoration or replacement exceeds
$25,000, (viii) any imposition of or proposal for any Special Taxes which
affect or may affect any of the Collateral, (ix) any material adverse
change in the financial condition, operations, properties or prospects of
any Loan Party, (x) any event which has or may have a material adverse
impact on the Collateral or the Project or the ultimate development and use
of the Real Property for its intended purpose, and (xi) the occurrence of
any Event of Default or event which, with the giving of notice and/or the
passage of time, could become an Event of Default;
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(b) promptly after receipt or preparation by the Borrower, copies of
(i) all notices or other communications delivered to the Borrower or the
Real Property which are addressed to the Lender or to "construction
lender", and (ii) on or before the 1st day of each calendar month, a
monthly Lot sales report setting forth Lot sales for the prior calendar
month, accompanied by copies of all Lot sales contracts disclosed by such
monthly Lot sales report and executed subsequent to the prior monthly Lot
sales report and, if requested by Lender, all written commitments,
contracts and formal proposals made by or to the Borrower to purchase,
sell, refinance or further develop any Collateral;
(c) as to Borrower, quarterly Financial Statements certified in a
manner acceptable to the Lender within fifty five (55) days after each
fiscal quarter of Borrower and tax returns within thirty (30) days after
their filing; provided, however, the delivery of such tax returns shall not
be required so long as the Guarantor's current accounting firm, Ernst &
Young, continues its unqualified opinion of Guarantor's audited annual
Financial Statements;
(d) as to Guarantor, copies of all 10 - Q and 10 - K filings made by
Guarantor in accordance with the requirements of the applicable securities
laws relative thereto within ten (10) days after such filings and tax
returns within thirty (30) days after their filing; provided, however, the
delivery of such tax returns shall not be required so long as the
Guarantor's current accounting firm, Ernst & Young, continues its
unqualified opinion of Guarantor's audited annual Financial Statements ;
(e) a monthly summary report of Project Lot sales and closings in form
and content acceptable to Lender; and
(f) such other Documents or information relating to any Loan Party,
the Collateral, the Project or the transactions contemplated by the Loan
Documents as the Lender may reasonably request from time to time.
The Lender is authorized at any time and from time to time to directly
contact the Contractor, if any, or any subcontractor or other Lien Claimant or
potential Lien Claimant or other Person to verify any information provided by
the Borrower or for any other purpose.
4.12 Costs, Fees and Expenses. The Borrower shall bear sole responsibility
for and promptly pay or cause to be paid all costs and expenses relating to the
performance by the Borrower of its Obligations or the delivery to the Lender of
any Documents or other items or information under or in connection with any of
the Loan Documents, and any Taxes (other than income taxes of the Lender),
costs, expenses, fees or charges payable or determined to be
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payable in connection with the execution, delivery, filing or recording of, or
otherwise with respect to, any Loan Document or any other Document delivered
under or in connection with any Loan Document.
The Borrower shall pay the initial $74,391.50 installment of the Loan Fee
to the Lender at or prior to the time of recordation of the Deed of Trust and
shall pay the second installment of the Loan Fee in the amount of $74,391.50 to
the Lender on the first anniversary date of the closing of the Loan. Such
initial installment of the Loan Fee shall be disbursed by Lender to itself as a
part of the initial Disbursement. The full amount of the Loan Fee is and shall
be deemed fully earned as of the date hereof. Provided funds are available under
the Loan within the maximum amount which may be outstanding thereunder at any
one time as set forth in Section 1.01, Lender is hereby irrevocably authorized
and directed to disburse such second installment of the Loan Fee to itself on
the anniversary date of the closing of the Loan. In the event there are not
funds available under the Loan within the maximum amount which may be
outstanding thereunder at any one time sufficient to satisfy the obligation of
Borrower relative to the payment of the second installment of the Loan Fee as
aforesaid, Borrower shall pay such second installment of the Loan Fee from its
funds other than the Loan. Borrower shall pay to the Lender on demand all costs,
expenses and charges of the Lender in connection with the approval of the Loan
by the Lender and the negotiation, preparation, execution, delivery,
administration, supplement, modification, amendment, waiver and enforcement of,
and any other action taken by the Lender under or otherwise to protect its
rights and interests in respect of, any Loan Document, and any litigation,
dispute, action or other proceeding (including bankruptcy proceedings) relating
thereto, including recording fees, filing fees, search fees, reconveyance fees,
title insurance premiums, appraisal, engineering, inspection and consulting
fees, the reasonable fees and disbursements of the Lender's legal counsel and
other out-of-pocket expenses, and any fees or other charges of the Lender for
appraisals or inspections or for review of appraisals, budgets, plans and
specifications or other matters relating to the Project or the Collateral.
Any amount payable to the Lender under any of the Loan Documents (including
any amount payable under this Section 4.12) which is not paid on the date when
due shall, from and after such date, bear interest at the Alternate Rate until
paid. Such interest shall be payable by the Borrower to the Lender immediately
and without demand.
4.13 Indemnification by the Borrower. The Borrower shall indemnify, defend
and save and hold harmless the Lender and its subsidiaries and affiliates, and
the respective directors, officers, agents, attorneys and employees of each
(collectively the "Indemnitees") from and against, and shall pay on demand, any
and all losses, liabilities, damages, costs, expenses and charges (including the
reasonable fees, charges and disbursements of external legal counsel) suffered
or incurred by any Indemnitee as a result of (a) any failure of the Borrower to
perform any of its Obligations under any Loan Document, (b) any failure of any
Representation by the Borrower to be correct in all respects when made, (c)
injury or death to persons or
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damage to property or other loss occurring on or in connection with the
Collateral or the Project, whether caused by the negligence or any other act or
omission of the Borrower or any Lien Claimant or any other Person or by
negligent, faulty, inadequate or defective design, building, construction or
maintenance or any other condition or otherwise, (d) any claim of any surety in
connection with any bond relating to construction of any Improvements or offsite
improvements, and (e) any claim, demand or cause of action, or any action or
other proceeding, whether meritorious or not, brought or asserted against any
Indemnitee which relates to or arises out of the Loan Documents, the Loan, the
Collateral, the Project or any transaction contemplated by, or the relationship
between the Borrower and the Lender or any action or inaction by the Lender
under, the Loan Documents, provided that no Indemnitee shall be entitled to
indemnification under this Section 4.13 for matters caused solely by such
Indemnitee's gross negligence or willful misconduct. Any obligation of the
Borrower under this Section 4.13 shall survive the making and repayment of the
Loan and the expiration or termination of this Agreement and shall be secured by
the Deed of Trust.
4.14 Actions and Further Assurances. The Borrower shall appear in and
defend all actions and other proceedings purporting to affect any of the
Collateral or the Project or the rights or interests of the Lender under the
Loan Documents (and the Lender may, at the Borrower's expense, appear in and
defend any such action or other proceeding as the Lender may determine), and the
Borrower shall take or cause to be taken such further action and execute and
deliver or cause to be executed and delivered such further Documents as the
Lender from time to time may reasonably require to maintain, perfect, protect,
assure and confirm the Lender's rights and interests (including rights and
interests in the Collateral), the Borrower's Obligations and the intention of
the parties under the Loan Documents.
4.15 Performance by the Lender. If the Borrower fails to perform any of its
Obligations under any Loan Document and the Lender reasonably determines that
remedial action is necessary to protect the rights or interests of the Lender,
the Lender may, without notice to or demand on the Borrower, perform any such
Obligations in such manner and to such extent and take such other action as the
Lender may deem appropriate, and all costs, expenses and charges of the Lender
relating to any such action shall be payable by the Borrower to the Lender in
accordance with Section 4.12.
5.00 Representations of the Borrower. The Borrower represents and warrants
to the Lender that:
5.01 Formation and Qualification. Each Loan Party which is a corporation is
duly incorporated, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation and is duly qualified in North Carolina; each
Loan Party which is a partnership, trust or other entity is duly formed and
validly existing under the Laws of the jurisdiction of its formation and, in the
case of a limited partnership formed under the Laws of a jurisdiction other than
California, is duly registered in North Carolina; each Loan Party which is a
corporation or limited partnership is in good standing in North Carolina; each
Loan Party which is a limited
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liability company is in good standing in North Carolina; and each Loan Party has
all requisite power and authority to conduct its business and to own, sell and
lease its properties.
5.02 Loan Documents. The execution, delivery and performance of the Loan
Documents by each Loan Party are within such Loan Party's power and authority,
have been duly authorized by all necessary action and do not and will not (a)
require any Authorization which has not been obtained (except to the extent
indicated in Section 5.05(b) with respect to Authorizations required in
connection with the Collateral or the Project), (b) contravene the Charter
Documents of any Loan Party, any applicable Laws or Other Requirements or any
agreement or restriction binding on or affecting any Loan Party or its property,
or (c) result in or require the creation or imposition of any Lien or Right of
Others upon or with respect to any property now or in the future owned by any
Loan Party (other than Liens in favor of the Lender). No Authorization which has
not been obtained is required for the creation of the Liens or the enforcement
by the Lender of its Remedies under the Loan Documents. Each Loan Document, when
executed and delivered, will constitute the legal, valid and binding obligation
of each Loan Party which is a party to or bound by such Loan Document,
enforceable against such Loan Party in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency or other similar Laws
affecting the rights of creditors generally.
5.03 Finder's or Broker's Fees. Except as otherwise disclosed in Part B of
Exhibit "C": (a) no finder's or broker's fee is payable to any Person in
connection with the Loan, and (b) the payment of any such fee disclosed in Part
B of Exhibit "C" is the sole responsibility of the Borrower and such fee has
been (or upon recordation of the Deed of Trust will be) paid in full by the
Borrower. The Borrower hereby indemnifies and holds harmless the Lender from any
claims, liability, damages, costs or expenses (including without limitation the
fees and expenses of legal counsel) resulting from or arising out of any claims
or assertions by any Person (including without limitation any broker, agent,
financial advisor or other intermediary) for any finder's broker's or other fee
or compensation of any kind in connection with the Loan. Such indemnification
obligation of the part of the Borrower shall survive termination of the Loan
Documents.
5.04 Collateral. The Borrower has and will continue to have (or upon
recordation of the Deed of Trust will have and from and after such recordation
will continue to have) good and marketable title to the Collateral, free and
clear of all Liens and Rights of Others, subject only to Permitted Exceptions
and Permitted Transfers of Personal Property. Upon recordation of the Deed of
Trust and filing of the financing statement executed by the Borrower, the Deed
of Trust will create a valid and indefeasible first priority perfected Lien in
the Collateral securing the payment and performance of all Obligations, subject
only to Permitted Prior Exceptions and Permitted Transfers of Personal Property.
No financing statements covering any of the Collateral are on file in any public
office, except financing statements in favor of the Lender and any other
financing statements approved by the Lender in writing.
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5.05 Project Information. (a) The Borrower and, to the best knowledge of
the Borrower, any Governmental Agency having jurisdiction over the Land have
complied in all material respects with all applicable Laws and Other
Requirements relating to the division and development of the Real Property, and
the Borrower is, and the construction of the Improvements in accordance with the
terms of this Agreement will be, in compliance in all material respects with all
applicable Laws and Other Requirements relating to the Collateral or the
Project. (b) Except as otherwise disclosed in Part B of Exhibit "C", (i) all
Authorizations required in connection with the Collateral or the Project or the
ultimate development and use of the Real Property for its intended purpose (as
indicated in Section 1.00) have been regularly and finally received (other than
routine permits for work which has not yet commenced and any required approvals
of construction by any Governmental Agency which (in each case) are to be issued
on a ministerial basis as required from time to time during the course of
construction and after completion), and (ii) the development and use of the Real
Property for its intended purpose do not require the payment of extraordinary
fees or assessments or the construction of other improvements, will not
contravene any applicable Laws or Other Requirements, and are not subject to any
other legal, contractual or practicle impediments which are material in the
aggregate. (c) The Project Budget and any Line Item Budget delivered to the
Lender are based on information deemed reliable by the Borrower and represent
the Borrower's best estimate of all Project Costs that will be required in
connection with the Project, and all Project Costs shown in the Project Budget
or any such Line Item Budget as "Previously Paid By Borrower" have been paid in
full. (d) All Utility Services, streets and other offsite improvements relating
to or adjoining the Land or necessary for the ultimate development and use of
the Real Property for its intended purpose have been or will be promptly
completed and/or otherwise made available at no further expense to the Borrower
(except for costs relating to such work reflected in the Project Budget for
"Site Development") and are not and will not be subject to any conditions or
restrictions which may adversely affect the Collateral or the Project in any
material respect. (e) The approximate acreage of the Land is correctly set forth
in Section 1.00 and, except as otherwise disclosed in Part B of Exhibit "C", (i)
the Land is not located in a Flood Hazard Area, nor is the Land subject to or
affected by any existing or proposed Special Taxes (other than Special Taxes
approved in writing by the Lender after the date of this Agreement), and (ii)
the Land and each Lot or parcel described in Exhibit "A" are separately
transferable in compliance with all applicable subdivision Laws and Other
Requirements. (f) Except as otherwise disclosed in writing to the Lender, the
Engineer Agreement, the Construction Contract, if any, and any other contract
entered into by Borrower relative to the development of the Project are in full
force and effect and free from any material breach or default by any party.
5.06 Financial Information. (a) The Financial Statements of each Loan Party
which have been furnished to the Lender fairly present such Loan Party's
financial condition as at the dates of such Financial Statements and the results
of operations for the periods covered by such Financial Statements in accordance
with generally accepted accounting principles consistently applied (or such
other method of preparation approved by the Lender in writing), and since the
respective dates of such Financial Statements, there has been no material
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adverse change in the financial condition, operations, properties or prospects
of such Loan Parties. (b) Each Loan Party has filed all tax returns required to
be filed by it, and has paid all Taxes due pursuant to such returns or in
respect of any of its properties (except for any such Taxes which are being
actively contested in good faith by appropriate proceedings), and to the best
knowledge of each Loan Party, no basis exists for additional assessments which
have not been adequately reserved against in the Financial Statements referred
to above or otherwise disclosed in writing to the Lender. For so long as the
Loan or any part thereof shall remain outstanding, Borrower and all Loan Parties
shall submit such financial information to Lender as Lender may request,
including, but not limited to, the financial information required by Section
4.11.
5.07 Litigation and Other Matters. Except as otherwise disclosed in writing
to the Lender: (a) no actions or other proceedings affecting or relating to the
Collateral or the Project are pending or, to the best knowledge of each Loan
Party, threatened, (b) no actions or other proceedings are pending or, to the
best knowledge of each Loan Party, threatened against or affecting any Loan
Party or any property of any Loan Party which, if determined adversely to such
Loan Party, could materially impair the financial condition, operations,
properties or prospects of such Loan Party or the ability of such Loan Party to
perform its obligations under the Loan Documents, and (c) the Borrower has given
notice to the Lender of any other matters which the Borrower is required to
disclose to the Lender under Section 4.11(a).
5.08 Documents and Other Information. All Documents and other information
delivered to the Lender pursuant to any of the Loan Documents are and will be
complete and correct in all material respects at the time of delivery to the
Lender.
5.09 Competing Projects. The Borrower hereby represents and warrants that
neither the Borrower nor any of its affiliates has or intends to construct,
create, arrange, develop, purchase or sell any single family residential
building lots which constitute a Competing Project.
5.10 Compliance with Laws. Without in any way limiting any of Borrower's
other representations, warranties or covenants contained in this Agreement,
Borrower hereby represents, warrants and covenants that the Improvement Plans
are, and the construction of the Improvements according thereto will be, in
compliance with all applicable federal, state and local laws, rules,
regulations, ordinances and codes, including without limitation the Americans
with Disabilities Act of 1990, 42 U.S.C. 12101, et. seq., as amended, and the
Fair Housing Act, 42 U.S.C. 3601, et. seq., as amended.
6.00 Events of Default and Remedies of the Lender.
6.01 Events of Default. The occurrence of any one or more of the following
events shall constitute an Event of Default:
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(a) the Borrower shall fail to pay all or any portion of the principal
of the Note when due; or
(b) the Borrower shall fail to pay any installment of interest on the
Note or any other amount payable by the Borrower to the Lender under the
Loan Documents (including any deposit of Borrower's Funds required by the
Disbursement Schedule) within 10 days after the date when due, or the
Borrower shall fail to pay all accrued interest and all other amounts then
payable by the Borrower to the Lender under the Loan Documents on the
Maturity Date or the date of final payment of the principal of the Note in
full; or
(c) any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed and either (i) such failure shall continue for more
than 30 days after notice of such failure is given by the Lender to such
Loan Party, unless such failure is not reasonably capable of being cured
within such 30-day period (but is reasonably capable of being cured within
60 days after such notice) and such Loan Party commences action to cure
such failure within such 30-day period and diligently and continuously
prosecutes such action to completion and causes such failure to be cured
within 60 days after such notice; or (ii) such failure is not reasonably
capable of being cured within 60 days after notice of such failure is given
by the Lender to such Loan Party; or
(d) any Representation proves to have been incorrect in any material
respect when made; or
(e) work relating to construction of the Improvements ceases for 15
consecutive days for any reason other than acts of God or other causes
beyond the reasonable control of the Borrower, or such work ceases for 45
consecutive days for any reason; or
(f) the Borrower is enjoined by any court or other Governmental Agency
from constructing the Improvements or performing any Obligations and such
injunction continues unreleased and unstayed for 45 days; or
(g) all or a substantial or material portion of the Collateral is
damaged or destroyed and the Lender has reasonably determined that the
security of the Deed of Trust has been impaired or that the repair,
restoration or replacement of the Collateral in accordance with the
requirements of the Deed of Trust is not economically practicable or is not
likely to be completed prior to the Maturity Date; or all or a substantial
or material portion of the Collateral is condemned, seized or appropriated
by any Governmental Agency or subject to any action or other proceeding
instituted by any Governmental Agency for any such purpose; or
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(h) any Loan Party is dissolved or liquidated or merged with or into
any other Person; or for any period of more than 10 days any Loan Party
which is a limited liability company, corporation, partnership, trust or
other entity ceases to exist in its present form and (where applicable) in
good standing and duly qualified under the Laws of the jurisdiction of its
incorporation or formation and California; or any Loan Party who is an
individual dies or becomes incapacitated; or all or substantially all of
the assets of any Loan Party are sold or otherwise transferred; or
(i) any Loan Party ceases to be managed and controlled by the Person
or Persons who manage and control such Loan Party as of the date of this
Agreement; or the Land is sold in violation of the terms of this Agreement;
or any Loan Party assigns or attempts to assign any rights or interests
under any Loan Document without the prior written consent of the Lender; or
any Loan Document becomes or is claimed by any Loan Party to be
unenforceable against any Loan Party; or the Deed of Trust shall cease to
constitute a valid and indefeasible first priority perfected Lien in the
Collateral, subject only to Permitted Prior Exceptions and Permitted
Transfers of Personal Property; or
(j) any Loan Party is subject to an order for relief by the bankruptcy
court, or is unable or admits in writing its inability to pay its debts as
they mature or makes an assignment for the benefit of creditors; or any
Loan Party applies for or consents to the appointment of any receiver,
trustee or similar official for it or for all or any part of its property
(or any such appointment is made without its consent and the appointment
continues undischarged and unstayed for 60 days); or any Loan Party
institutes or consents to any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, dissolution, custodianship,
conservatorship, liquidation, rehabilitation or similar proceeding relating
to it or to all or any part of its property under the Laws of any
jurisdiction (or any such proceeding is instituted without its consent and
continues undismissed and unstayed for 60 days); or any judgment, writ,
warrant of attachment or execution or similar process is issued or levied
against any of the Collateral or any other property of any Loan Party and
is not released, vacated or fully bonded within 60 days after its issue or
levy; or
(k) the Borrower shall fail to close the sale of an average of five
(5) Lots per calendar month to bona fide third party purchasers at sales
prices not less than the "Minimum Sales Price" set forth in Exhibit E
computed on a trailing rolling four (4) month basis; or
(l) the occurrence of a default under any indebtedness of Borrower
with any lender other than Lender or a default under any other indebtedness
of Borrower with Lender; or
(m) any material adverse change shall occur in the financial
condition, operations, properties or
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prospects of any Loan Party, or any event shall occur which has a material
adverse impact on the Collateral or the Project.
6.02 Remedies of the Lender. Upon the occurrence of any Event of Default,
the Lender may, without notice to or demand upon the Borrower, which are
expressly waived by the Borrower (except for notices or demands otherwise
required by applicable Laws to the extent not effectively waived by the Borrower
and any notices or demands specified in the Loan Documents), exercise any one or
more of the following Remedies as the Lender may determine:
(a) the Lender may, at its option, terminate all commitments to make
Disbursements, or the Lender may waive the Event of Default or, without
waiving, determine, upon terms and conditions satisfactory to the Lender,
to make further Disbursements;
(b) the Lender may declare the unpaid principal of the Note and all
accrued interest and other amounts payable under the Loan Documents to be
immediately due and payable, in which event all such amounts shall
immediately be due and payable without protest, presentment, notice of
dishonor, demand or further notice of any kind, all of which are expressly
waived by the Borrower;
(c) the Lender may perform any of the Borrower's Obligations in such
manner as the Lender may determine;
(d) the Lender may, either directly or through an agent or
court-appointed receiver, take possession of the Collateral and enter into
such contracts and take such other action as the Lender deems appropriate
to complete or partially construct all or any part of the Improvements,
subject to such modifications and changes in the Project or the plan of
development as the Lender may deem appropriate; and
(e) the Lender may proceed to protect, exercise and enforce any and
all other Remedies provided under the Loan Documents or by applicable Laws.
All costs, expenses, charges and advances of the Lender in exercising any
such Remedies (including any such amounts which cause the obligations of the
Borrower to exceed the face amount of the Note) shall be payable by the Borrower
to the Lender in accordance with Section 4.12.
Each of the Remedies of the Lender provided in the Loan Documents is
cumulative and not exclusive of, and shall not prejudice, any other Remedy
provided in the Loan Documents or by applicable Laws. Each
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Remedy may be exercised from time to time as often as deemed necessary by the
Lender, and in such order and manner as the Lender may determine. No failure or
delay on the part of the Lender in exercising any Remedy shall operate as a
waiver of such Remedy; nor shall any single or partial exercise of any Remedy
preclude any other or further exercise of such Remedy or of any other Remedy. No
application of payments, or any advances or other action by the Lender, will
cure or waive any Event of Default or prevent acceleration, or continued
acceleration, of amounts payable under the Loan Documents or prevent the
exercise, or continued exercise, of any Remedies of the Lender.
7.00 Miscellaneous.
7.01 Waivers and Amendments. No supplement to, modification or amendment
of, or waiver, consent or approval under, any of the Loan Documents shall be
effective unless in writing and signed by the Lender, and any waiver, consent or
approval shall be effective only in the specific instance and for the specific
purpose for which given.
7.02 Survival of Representations. All Representations shall survive the
making and repayment of the Loan and the expiration or termination of this
Agreement and have been or will be relied upon by the Lender, notwithstanding
any investigation made by the Lender or on its behalf.
7.03 Notices. All notices and other communications provided under any Loan
Document shall be in writing and mailed or personally delivered to the
appropriate party at the address set forth on the signature page of this
Agreement or any other Loan Document or, as to any party, at any other address
in the State of California as shall be designated by it in a written notice sent
to the other party. All notices and other communications by the Borrower which
are expressly subject to receipt by the Lender under the terms of the Loan
Documents will be effective when received by an officer or other representative
of the Lender having direct responsibility for administration of the Loan. In
all other cases, any notice or other communication will be effective (a) if
given by mail, on the earlier of receipt or the third day after deposit in the
United States mails with first-class postage prepaid, or (b) if given by
personal delivery, when delivered, provided that the requirements of this
sentence shall not impair or delay the effectiveness of any notice or other
communication given by the Lender under the Deed of Trust or any Additional
Collateral Agreements when such notice or other communication is given in
compliance with and would otherwise be effective under applicable Laws.
7.04 Relationship of Parties. The relationship between the Borrower and the
Lender is, and at all times shall remain, solely that of debtor and creditor,
and shall not be, or be construed to be, a joint venture, equity venture,
partnership or other relationship of any nature.
7.05 Nonliability of the Lender. The Borrower acknowledges and agrees that:
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(a) The Borrower shall be solely responsible for and shall rely solely
on its own judgment with respect to all matters relating to the Collateral
or the Project, including the conduct of the Borrower and its agents and
employees, the quality, adequacy and suitability of the Improvement Plans
and any Change Orders and any work or materials furnished or to be
furnished in connection with the Project, the skill, qualifications and
performance of architects, contractors, subcontractors and suppliers, the
feasibility of the Project and the sufficiency of budgets, cost projections
and insurance, the supervision, status and progress of construction and
compliance by the Borrower with the requirements of this Agreement with
respect to such construction and the accuracy and completeness of all
Disbursement Requests, and the Lender does not assume any responsibility to
the Borrower or any other Person to review, inspect, supervise or approve,
or to provide any advice or information with respect to, any such matters;
(b) inspections of construction made by or on behalf of the Lender,
and acceptance, approval or review by the Lender of any Documents,
information, conditions or performance or any other action by the Lender
under any of the Loan Documents, are for purposes of administration of the
Loan only and for the sole protection of the Lender, and shall not
constitute a representation or warranty by the Lender to the Borrower or
any other Person or be relied upon by the Borrower or any other Person for
any other purpose;
(c) subject to Lender acting in a commercially reasonable manner , the
Lender shall have no responsibility or liability for any delays in funding
or construction caused by any inspection of construction or review of
Documents, information, conditions or performance or any other action by
the Lender in connection with any Disbursement or Change Order or the
administration of the Loan; and
(d) the Lender does not owe any duty of care to protect the Borrower
or any other Person against or to inform the Borrower or any other Person
of, and the Lender shall not be responsible or liable to the Borrower or
any other Person for any loss, damage, liability or claim of any kind
relating to injury or death to persons or damage to property or other loss
resulting from, the negligence or any other act or omission of the Borrower
or any Lien Claimant or any other Person or any negligent, faulty,
inadequate or defective design, building, construction or maintenance or
any other condition or the improper application of any Disbursements.
7.06 Benefits and Assignment. The Loan Documents are made for the purpose
of defining the rights and obligations of the Loan Parties and the Lender in
connection with the Loan and are intended for the sole protection of the Loan
Parties and the Lender and the Lender's successors and assigns, and no other
Person shall have any rights of any nature under or by reason of the Loan
Documents. The Loan Documents shall be binding on and inure to the benefit of
each of the Loan Parties and the Lender and their respective successors
E-18
and assigns, except that no Loan Party shall have the right to assign any rights
or interests under any Loan Document without the prior written consent of the
Lender. The Lender may from time to time sell participations in the Loan to any
Person (including affiliates of the Lender) without notice to or the consent of
any Loan Party; provided, however, in the event of the sale by Lender of
participations in the Loan, Borrower shall only be required to deal with Lender
relative to the Loan.
7.07 Payments and Computations. All payments by any Loan Party under the
Loan Documents shall be made in lawful money of the United States free and clear
of, and without reduction by reason of, any Taxes. Any payment which is stated
to be due on a day which is not a Banking Day shall be made on the next
succeeding Banking Day, and any such extension shall be included in the
computation of the payment of interest. Whenever any interest or other amount
payable under the Loan Documents is to be computed on the basis of a year of a
specified number of days, the amount shall be calculated on the basis of a year
of such specified number of days for the actual number of days (including the
first, but excluding the last) occurring in the period for which such
calculation is made. For purposes of calculating amounts paid or payable under
the Loan Documents, credit for payments shall be given upon receipt of same day
funds by the Lender at its office located at 000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx 00000, Attention: Construction Lending Division (or such
other location specified by the Lender from time to time in writing) at or
before the close of business, Los Angeles time, on any Banking Day. Except as
otherwise expressly provided in the Loan Documents, all payments on the
Obligations received by the Lender shall be applied to the Obligations in such
order and manner as the Lender may determine.
7.08 Publicity. During the course of construction of the Improvements and
until the Loan is repaid in full, the Lender may, subject to Borrower's approval
which shall not be unreasonably withheld or delayed, place signs on the Land and
issue or publish releases or announcements stating that construction financing
is being provided by the Lender to the Borrower.
7.09 Unsecured Environmental Obligations. Anything contained in this
Agreement or the Deed of Trust to the contrary notwithstanding, (a) the Borrower
shall have no obligation or liability under this Agreement or the Deed of Trust
for any obligation or liability of the Borrower under any Environmental
Indemnity executed by the Borrower which does not state it is secured by the
Deed of Trust (any such obligation or liability being deemed to arise and exist
solely under such Environmental Indemnity), and (b) any obligation or liability
of the Borrower under such Environmental Indemnity shall not be secured by the
Deed of Trust.
7.10 Rules of Construction. (a) For purposes of this Agreement and the
other Loan Documents: (i) any reference to "days" or "months" shall mean
calendar days or months, (ii) the word "including" shall mean "including without
limitation", (iii) any reference in any of the Loan Documents to any Loan
Document or other Document or exhibit shall mean such Loan Document or other
Document or exhibit as it may
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from time to time be supplemented, modified, amended and extended in accordance
with the terms of this Agreement, (iv) defined terms shall be equally applicable
to the singular and plural forms, and (v) all existing and future exhibits to
this Agreement are incorporated in this Agreement by this reference. (b) Time is
of the essence of the Loan Documents, and the provisions of the Loan Documents
are declared to be severable. (c) All accounting terms used and not otherwise
defined in any Loan Document shall be construed in conformity with, and all
financial information maintained or submitted by any Loan Party or other Person
under any Loan Document shall be prepared in accordance with, generally accepted
accounting principles consistently applied (or such other principles approved by
the Lender in writing). (d) If more than one Loan Party signs or is otherwise
bound by any Loan Document, the liability of each shall be joint and several.
(e) The Loan Documents shall be governed by, and construed and enforced in
accordance with, the Laws of North Carolina.
7.11 Waiver of Jury Trial. Each of the Lender and the Borrower waive trial
by jury in any action or other proceeding (including counterclaims), whether at
law or equity, brought by the Lender or the Borrower against the other on
matters arising out of or in any way related to or connected with this
Agreement, the other Loan Documents, the Loan or any transaction contemplated
by, or the relationship between the Lender and the Borrower or any action or
inaction by either party under, any of the Loan Documents.
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IN WITNESS WHEREOF, the Borrower, the Guarantor and the Lender have caused
this Agreement to be duly executed under seal as of the date first written
above.
"LENDER": "BORROWER":
INDYMAC BANK, F.S.B. JORDAN LAKE PRESERVE CORPORATION,
d/b/a CONSTRUCTION a North Carolina corporation
LENDING CORPORATION OF AMERICA
By: /S/ XXXXXX XXXXXXXX (SEAL) By:/S/ XXXXXXX X. XXXXXXX (SEAL)
------------------------- ------------------------------
Name: Xxxxxx Xxxxxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Vice President Title:President
(Corporate Seal)
Lender's Address: Borrower's Address:
Construction Lending Corporation Jordan Lake Preserve Corporation
of America c/o Xxxxx Xxxxxxx
000 Xxxxx Xxxx Xxxxxx 128 The Preserve Trail
00xx Xxxxx Xxxxxx Xxxx, Xxxxx Xxxxxxxx 00000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Construction Lending Division With a copy to:
With copies to: Bluegreen Corporation
Attention: Legal Department
0000 Xxxxx Xxxxxx Xxxxxx, Xxx 000 0000 Xxxxxxxxxx Xxx Xxxxx
Xxxxxx Xxxx, Xxxxxxx 00000 Xxxx Xxxxx, Xxxxxxx 00000
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"GUARANTOR":
BLUEGREEN CORPORATION,
a Massachusetts corporation
By:/S/ XXXXXXX X. XXXXXXX (SEAL)
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior VP and Clerk
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Loan No. 00-0000000
EXHIBIT "F"
DEFINITIONS
(Land Development)
As used in this Agreement, the following terms shall have the
following meanings:
"Additional Collateral Agreements" means the "Additional Collateral
Agreements" (if any) specified in Exhibit "C" and any other mortgages,
assignments or other agreements (other than the Deed of Trust) now or in
the future securing the Loan or any Guaranty.
"Agreement" means this Building Loan Agreement, including all
exhibits.
"Alternate Rate" means the "Alternate Rate" set forth in the Note.
"Authorization" means any authorization, consent, approval, order,
license, permit, exemption or other action by or from, or any filing,
registration or qualification with, any Governmental Agency or other
Person.
"Authorizing Resolutions" means (a) in the case of a corporation, a
certified copy of resolutions adopted by its board of directors, (b) in the
case of a partnership (whether general or limited), a certificate signed by
all of its general partners, and (c) in the case of a trust or any other
entity, evidence of such other action as the Lender may require, in each
case authorizing the execution, delivery and performance of all Loan
Documents to which it is a party or by which it is bound.
"Banking Day" means any day (excluding Saturdays and Sundays) on which
banks located in North Carolina are not authorized or required by law to
close.
"Borrower's Funds" means funds of the Borrower invested or to be
invested in the Project or deposited with the Lender pursuant to Paragraph
(e) of Exhibit B.
"Cash Collateral Account" means an interest earning cash collateral
account maintained by the Lender for the account of the Borrower for
purposes of this Agreement or any of the other Loan Documents which shall
be subject to a security interest in favor of the Lender for the purpose of
securing the Borrower's Obligations and over which the Lender shall have
sole and exclusive control and right of withdrawal.
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"Change Order" means a change in, or supplement to, the Improvement
Plans.
"Charter Documents" means (a) in the case of a corporation, its
articles of incorporation and bylaws, (b) in the case of a partnership, its
partnership agreement and any certificate or statement of partnership, and
(c) in the case of a trust or any other entity, its formation documents, in
each case as amended from time to time.
"Collateral" means all property in which the Lender is granted or
purportedly granted a Lien pursuant to the Deed of Trust.
"Competing Project" means, unless otherwise approved by Lender in
writing to the contrary, any single family residential lots actively
offered for sale which are located within a radius of five (5) miles of the
Project and the minimum sales price for which lots on an individual basis
are within $10,000.00 of any Lot in the Project.
"Construction Contract" means, as to any Contractor, the agreement
between the Borrower and the Contractor relating to services to be provided
by the Contractor in connection with the Project.
"Contractor" means any Person engaged by the Borrower from time to
time as a general contractor in connection with the Project.
"Cost Savings" means the excess, if any, of any Line Item over the
actual Project Costs incurred in connection with the work associated with
such Line Item, as determined by the Lender after such work has been
completed and all such Project Costs have been paid in full and all Lien
Claims and potential Lien Claims relating to such work have been released
or otherwise discharged to the satisfaction of the Lender.
"Deed of Trust" means the Construction Deed of Trust with Assignment
of Rents, Security Agreement and Fixture Filing executed by the Borrower to
secure the Loan.
"Disbursement" means each disbursement of the proceeds of the Loan and
each disbursement of any Borrower's Funds in accordance with the
Disbursement Schedule.
"Disbursement Account" has the meaning set forth in paragraph (a) of
the Disbursement Schedule.
"Disbursement Request" means a written request for a Disbursement in a
form approved by the Lender.
E-2
"Disbursement Schedule" means the "Disbursement Schedule" attached as
Exhibit "B".
"Documents" means written documents and materials, including
agreements, approvals, certificates, consents, instruments, financing
statements, reports, budgets, forecasts and opinions.
"Engineer" means any Person engaged by Borrower from time to time as
an engineer or to perform similar functions in connection with the Project.
"Engineer Agreement" means as to any Engineer, the agreement between
the Borrower and the Engineer relating to services to be provided by the
Engineer in connection with the Project.
"Environmental Indemnity" means the Environmental Indemnity executed
by the Borrower in favor of the Lender and described in Exhibit "C".
"Events of Default" means the events set forth in Section 6.01.
"Excusable Delay" means a delay, not to exceed a total of ninety (90)
days, caused by unusually adverse weather conditions which have not been
taken into account in the construction schedule, fire, earthquake or other
acts of God, strikes, lock outs, acts of public enemy, riots or
insurrections or any other unforeseen circumstances or events beyond the
control of Borrower (except financial circumstances or events or matters
which may be resolved by the payment of money), and as to which Borrower
notifies Lender in writing within five (5) days after each such occurrence.
"Financial Statements" means balance sheets and income statements.
"Flood Hazard Area" means an area which has been designated as a
special flood hazard area or subject to comparable risks by the Federal
Emergency Management Agency or any successor to such Agency.
"Governmental Agency" means (a) any government or municipality or
political subdivision of any government or municipality, (b) any
assessment, improvement, community facilities or other special taxing
district, (c) any governmental or quasi-governmental agency, authority,
board, bureau, commission, corporation, department, instrumentality or
public body, (d) any court, administrative tribunal, arbitrator, public
utility or regulatory body, or (e) any central bank or comparable
authority.
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"Guarantor" means Bluegreen Corporation, a Massachusetts corporation.
"Guaranty" means any Guaranty executed in favor of the Lender and
described in Exhibit "C".
"Improvement Plans" means the improvement plans and specifications
described in Exhibit "C", as modified by any Change Orders approved by the
Lender.
"Improvements" means the improvements, including site development
work, constructed or to be constructed pursuant to the Improvement Plans.
"Land" means the land described in Exhibit "A".
"Laws" means all federal, state and local laws, rules, regulations,
ordinances and codes.
"Lien" means any lien, mortgage, deed of trust, pledge, security
interest or other charge or encumbrance.
"Lien Claim" means (a) any mechanics lien affecting any of the
Collateral, (b) any right of any Person to assert or maintain any such
mechanics lien, and (c) any other claim to payment by any Lien Claimant.
"Lien Claimant" means the Contractor, if any, and any other Person who
has furnished labor, service, equipment or material in connection with the
Project or who is otherwise entitled to payment for any Project Costs.
"Line Item" means each of the separate items set forth in the Project
Budget and in any Line Item Budget.
"Line Item Budget" means a budget for the Project in form and
substance satisfactory to the Lender and setting forth in such detail as
the Lender may require the nature and amount of all Project Costs
anticipated in connection with the Project as such budget may be modified
from time to time in accordance with the Disbursement Schedule.
"Loan" means the loan to be made by the Lender to the Borrower
pursuant to this Agreement in an amount not to exceed the Loan Amount.
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"Loan Amount" means the amount of the Loan set forth in Section 1.00.
"Loan Documents" means this Agreement, the Note, the Deed of Trust,
the Environmental Indemnity, the Guaranties, if any, and any Additional
Collateral Agreements.
"Loan Fee" means a nonrefundable loan fee to be paid by the Borrower
to the Lender in installments and in the amount set forth in Exhibit "C".
"Loan Party" means (a) the Borrower, (b) any Guarantor which at the
time has or may have any obligation or liability (whether fixed, contingent
or otherwise) under any Guaranty executed or to be executed by it, (c) any
Person executing any Additional Collateral Agreements, and (d) in the case
of any Loan Party which is a partnership, any general partner of such Loan
Party.
"Lot" means any portion of the Land which has been approved pursuant
to all applicable Laws and legally subdivided and platted of record as a
single family residential building lot.
"Maturity Date" means the maturity date of the Note, as such maturity
date may be extended from time to time.
"Note" means the Promissory Note executed by the Borrower in favor of
the Lender to evidence the Loan.
"Obligations" means all obligations of the Borrower of every nature
under the Loan Documents.
"Other Requirements" means (a) the terms, conditions and requirements
of all Project Agreements, Authorizations and Rights of Others relating to
the Collateral or the Project and all other Documents, agreements and
restrictions relating to, binding on or affecting the Collateral or the
Project, including covenants, conditions and restrictions, leases,
easements, reservations, rights and rights-of-way, (b) requirements
relating to the supply of Utility Services to the Real Property, (c)
requirements and recommendations of the soils report and any environmental
impact report or negative declaration, (d) all building, zoning, land use,
planning and subdivision requirements, and (e) requirements relating to
construction of offsite improvements.
"Permitted Exceptions" means (a) Liens in favor of the Lender, (b)
Permitted Prior Exceptions, and (c) other matters expressly approved by the
Lender in writing which are subject and subordinate to the Lien of the
Trust Deed.
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"Permitted Prior Exceptions" means (a) general ad valorem real
property taxes which are not delinquent, (b) Special Taxes described in
Part B of Exhibit "C" or otherwise approved in writing by the Lender which
in each case are not delinquent, (c) mechanics liens affecting the Real
Property and arising from the construction of the Improvements, over which
the Title Policy has insured the priority of the Lien of the Deed of Trust,
and (d) such other matters as the Lender shall expressly approve in writing
as "Permitted Prior Exceptions" for purposes of this Agreement.
"Permitted Transfer" means (a) any sale or other transfer of Lots and
common areas (or undivided interests in common areas) and the disposition
of any excess proceeds of sale, in each case to the extent permitted by
Section 4.05, (b) subject to compliance with paragraph (g) of Exhibit "B",
the release of the golf course and the related amenities, including the
club house, and (c) any transfer or other disposition of Personal Property
permitted by Section 4.06.
"Person" means any person or entity, whether an individual, trustee,
corporation, partnership, joint stock company, trust, unincorporated
organization, bank, business association or firm, joint venture,
Governmental Agency or otherwise.
"Personal Property" means tangible personal property and fixtures,
including building materials and supplies, equipment and other "Goods" (as
defined in the Deed of Trust), but excluding construction equipment of a
type intended for use in connection with other projects, the leased modular
sales office utilized by Borrower, leased golf carts used in conjunction
with the sale of Lots, leased golf course and golf course maintenance
equipment and leased construction trailers.
"Project" means the project for the acquisition and/or refinancing of
the Land, the construction of the Improvements and the development of the
Land in accordance with the Improvement Plans.
"Project Agreements" means (a) the Engineer Agreement, the
Construction Contract, if any, and any takeout, refinancing or permanent
loan commitment issued or assigned to the Borrower with respect to the Real
Property, and (b) all leases, rental agreements, service and maintenance
agreements, purchase and sale agreements, purchase options and other
agreements of any nature relating to the Collateral or the Project,
including agreements with contractors, subcontractors, suppliers, project
managers and supervisors, designers, architects, engineers, sales agents
and consultants.
"Project Budget" means the budget for the Project attached as Exhibit
"D", as supplemented by each Line Item Budget approved by the Lender from
time to time, in each case as modified from time to time in accordance with
the Disbursement Schedule.
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"Project Costs" means all costs and expenses of any nature relating to
the Project or the financing of the Project.
"Real Property" means the Land and the Improvements and all other
buildings, structures and improvements now or in the future located on the
Land.
"Remedy" means any right, power or remedy.
"Representations" means the representations and warranties of the
Borrower set forth in Section 5.00 and all other representations,
warranties and certifications to the Lender in the Loan Documents or in any
other Document delivered under or in connection with the Loan Documents.
"Right of Others" means, as to any property in which a Person has an
interest, any legal or equitable claim or other interest (other than a Lien
but including a leasehold interest, a right of first refusal or a right of
repossession or removal) in or with respect to such property held by any
other Person, and any option or right held by any other Person to acquire
any such claim or other interest or any Lien in or with respect to such
property.
"Special Tax" means, as to any property, (a) any special assessment or
other Tax which is or may become a Lien affecting such property, other than
general ad valorem real property taxes, and (b) any assessment,
improvement, community facilities or other special taxing district in or
into which such property is or may be located or incorporated or under
which any special assessment or other Tax which is or may become a Lien
affecting such property is or may be imposed.
"Taxes" means all taxes, assessments, charges, fees and levies
(including interest and penalties) imposed, assessed or collected by any
Governmental Agency.
"Title Policy" means an ALTA extended coverage lender's policy of
title insurance in form and substance satisfactory to the Lender, issued by
an insurer selected by the Borrower and satisfactory to the Lender,
together with such endorsements and policies of coinsurance and/or
reinsurance as may be required by the Lender, in a policy amount equal to
the Loan Amount, insuring the Deed of Trust to be a valid first priority
Lien on the Land and showing the Land to be subject only to Permitted Prior
Exceptions.
"Utility Services" means all utility services, including water, gas,
electricity, telephone, garbage removal and sewer services.
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