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EXHIBIT 10.16(b)
PROMISSORY NOTE
$30,000,000.00 Houston, Texas July 1, 0000
XXXXXXX HOMES, L.P. (hereinafter called the "Borrower"), a Texas
limited partnership with offices at 00000 Xxxxxxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxx 00000, for value received, promises and agrees to pay on or before the
earlier of (i) July 1, 1999, or (ii) the Completion Date of the last Interim
Construction Loan originated prior to the Drawdown Termination Date, to the
order of BANK UNITED (hereinafter called the "Lender") at its offices at 0000
Xxxxxxxxx Xxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000, in coin or currency of the
United States of America which at the time of payment is legal tender for the
payment of public and private debts, the principal sum of THIRTY MILLION AND
NO/100 DOLLARS ($30,000,000.00), or so much thereof as may be advanced pursuant
to the Loan Agreement hereinafter mentioned.
All capitalized terms which are used but not defined in this Note
shall have the same meanings as in the Loan Agreement dated June 28, 1990
between Newmark Home Corporation, a Texas corporation, (hereinafter called "Old
Newmark") and the Lender as amended by that certain First Amendment to Loan
Agreement dated as of May 14, 1991, by and between Old Newmark and Lender (the
"First Amendment"), as further amended by that certain Second Amendment to Loan
Agreement dated as of June 28, 1991, by and between Old Newmark and Lender (the
"Second Amendment"), as further amended by that certain Third Amendment to Loan
Agreement dated as of March 17, 1992, by and between Old Newmark and Lender
(the "Third Amendment"), as further amended by that certain Fourth Amendment to
Loan Agreement dated as of June 18, 1992, by and between Old Newmark and Lender
(the "Fourth Amendment"), as further amended by that certain Fifth Amendment to
Loan Agreement dated as of June 28, 1993, by and between Old Newmark and Lender
(the "Fifth Amendment"); as further amended by that certain Sixth Amendment to
Loan Agreement dated as of June 28, 1994 by and between Old Newmark and Lender
(the "Sixth Amendment"); as further amended by that certain Seventh Amendment
to Loan Agreement dated as of May 28, 1995 by and between Newmark Home
Corporation, a Nevada corporation, ("General Partner") and Lender (the "Seventh
Amendment"); as further amended by that certain Eighth Amendment to Loan
Agreement dated as of February 28, 1996 (the "Eighth Amendment") by and between
General Partner and Lender; as further amended by that certain Ninth Amendment
to Loan Agreement dated as of May 28, 1996 (the "Ninth Amendment") by and
between General Partner and Lender; as further amended by
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that certain Tenth Amendment to Loan Agreement dated as of October 1, 1996 (the
"Tenth Amendment") by and between Borrower and Lender; as further amended by
that certain Eleventh Amendment to Loan Agreement dated as of November 15,
1996, (the "Eleventh Amendment") by and between Borrower and Lender; and as
further amended by that certain Twelfth Amendment to Loan Agreement dated as of
July 1, 1997 (the "Twelfth Amendment") by and between Borrower and Lender (such
Loan Agreement, the First Amendment, the Second Amendment, the Third Amendment,
the Fourth Amendment, the Fifth Amendment, the Sixth Amendment, the Seventh
Amendment, the Eighth Amendment, the Ninth Amendment, the Tenth Amendment, the
Eleventh Amendment and the Twelfth Amendment together with all amendments or
supplements thereto, being the "Loan Agreement").
In addition to the principal sum referred to in the first paragraph of
this Note, the Borrower also agrees to pay interest on all amounts hereof so
advanced and remaining from time to time unpaid hereon from the date hereof
until maturity. The Advances made under each Interim Construction Loan
approved by Lender under the Loan Agreement shall bear interest as provided in
the Loan Agreement. Past due principal and interest shall bear interest at a
varying rate per annum which is five percent (5%) above the Prime Rate, (but in
no event to exceed the Highest Lawful Rate).
Accrued interest is due and payable monthly, the first such payment
being due and payable on August 1, 1997 and the remaining payments being due
and payable on the first (1st) day of each and every succeeding calendar month
thereafter and at the maturity of this Note.
The Borrower and any and each co-maker, guarantor, accommodation
party, endorser or other Person liable for the payment or collection of this
Note expressly waive notice, presentment, demand or payment, protest, notice of
protest, and non-payment or dishonor, notice of intent to demand, bringing of
suit, and diligence in taking any action to collect amounts called for
hereunder and in the handling of Property at any time existing as security in
connection herewith, and shall be directly and primarily liable for the payment
of all sums owing and to be owing hereon, regardless of and without any notice,
diligence, act or omission as or with respect to the collection of any amount
called for hereunder or in connection with any Lien at any time had or existing
as security for any amount called for hereunder. Provided however, that upon
any Event of Default defined by the Loan Agreement, Borrower shall be entitled
to written notice of Lender' intent to accelerate five (5) days prior to
acceleration. Upon the occurrence and at any time during the
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continuance of any Event of Default the Lender may, if the Event of Default is
not cured within five (5) days after notice of intent to accelerate is given by
Lender to Borrower, by written notice of acceleration to the Borrower declare
the entire principal amount of all Indebtedness then outstanding together with
interest then accrued thereon to be immediately due and payable without
notices, presentment, demand, etc. expressly waived above.
It is the intention of the parties hereto to conform strictly to usury
laws applicable to the Lender. Accordingly, if the transactions contemplated
hereby would be usurious under applicable law (including the laws of the United
States of America and the State of Texas), then, in that event, notwithstanding
anything to the contrary herein or in the Loan Agreement or in any other
Security Instrument or agreement entered into in connection with or as security
for this Note, it is agreed as follows: (i) the aggregate of all consideration
which constitutes interest under law applicable to the Lender that is
contracted for, taken, reserved, charged or received herein or under the Loan
Agreement or under any of the other aforesaid Security Instruments or
agreements or otherwise in connection herewith shall under no circumstances
exceed the maximum amount allowed by such applicable law, and any excess shall
be credited by the Lender on the principal amount of the Indebtedness (or, if
the principal amount of the Indebtedness shall have been paid in full, refunded
by the Lender to the Borrower, as required); and (ii) in the event that the
maturity of this Note is accelerated by reason of an election of the Lender
resulting from any Event of Default under the Loan Agreement or otherwise, or
in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to the Lender may never include
more than the maximum amount allowed by such applicable law, and excess
interest, if any, provided for in the Loan Agreement or otherwise shall be
canceled automatically as of the date of such acceleration or prepayment and,
if theretofore paid, shall be credited by the Lender on the principal amount of
the Indebtedness (or, if the principal amount of the Indebtedness shall have
been paid in full, refunded by the Lender to the Borrower, as required).
Without limiting the foregoing, all calculations of the rate of interest taken,
reserved, contracted for, charged, received or provided for under this Note or
any of the Security Instruments which are made for the purpose of determining
whether the interest rate exceeds the Highest Lawful Rate shall be made, to the
extent allowed by law, by amortizing, prorating, allocating and spreading in
equal parts during the period of the full stated term of the loan evidenced
hereby, all interest at any time taken, reserved, contracted for, charged,
received or provided for under this Note or any of
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the Security Instruments. To the extent that Article 5069-1.04 of the Texas
Revised Civil Statutes is relevant to the Lender for the purpose of determining
the Highest Lawful Rate, the Lender hereby elects to determine the applicable
rate ceiling under such Article by the indicated (weekly) rate ceiling from
time to time in effect, subject to the Lender's right subsequently to change
such method in accordance with applicable law.
The following shall be the basis for the finder of fact's
determination of the fair market value of a particular Unit foreclosed upon as
of the date of the foreclosure sale in proceedings governed by Sections 51.003,
51.004, and 51.005 of the Texas Property Code (as amended from time to time):
a. The Unit shall be valued in an "as is" condition as of the
date of the foreclosure sale, without any assumption or
expectation either that a Residence will be constructed on the
Lot or any Residence previously constructed or started thereon
will be repaired in any manner or completed as applicable
before a resale of the Unit after foreclosure;
b. The valuation shall be based upon an assumption that the
foreclosure purchaser desires a prompt resale of the Unit for
cash promptly (but no later than twelve months) following the
foreclosure sale;
c. All reasonable closing costs customarily borne by the seller
in a commercial real estate transaction shall be deducted from
the gross fair market value of the Unit, including, without
limitation, brokerage commissions, title insurance, a survey
of the Unit, tax prorations, attorney's fees, and marketing
costs;
d. The gross fair market value of the Unit shall be further
discounted to account for any estimated holding costs
associated with maintaining the Unit pending sale, including,
without limitation, utilities expenses, property management
fees, taxes and assessments (to the extent not accounted for
in c. above), and other maintenance expenses.
e. Any expert opinion testimony given or considered in connection
with a determination of the fair market value of the Unit must
be given by persons having at least five years experience in
appraising property similar to the Unit and who have conducted
and prepared a complete written appraisal of the Unit taking
into consideration the factors set forth above.
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This Note is issued pursuant to and is entitled to the benefits of the
Loan Agreement. Reference is made to the Loan Agreement for provisions for the
acceleration of the maturity hereof on the occurrence of certain events
specified therein, for interest rate computations in the event that the
otherwise agreed rate is at any time limited by the Highest Lawful Rate, for
the reimbursement of attorneys' fees or other costs of collection or
enforcement, and for all other pertinent purposes. It is contemplated that by
reason of prepayment hereon there may be times when no Indebtedness is owing
hereunder; but notwithstanding such occurrences, this Note shall remain valid
and shall be in full force and effect as to loans made pursuant to the Loan
Agreement subsequent to each occurrence.
This Note represents an amendment and restatement of that certain
$30,000,000.00 Note dated November 15, 1996, ("Previous Note") executed by
General Partner and payable to the order of Lender. The Indebtedness evidenced
by the Previous Note is not extinguished hereby. This Note is secured as
provided in the Loan Agreement.
NEWMARK HOMES, L.P.
By: Newmark Home Corporation,
General Partner
By: /s/ XXXXX XXXXX
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Name: Xxxxx Xxxxx
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Title: Senior Vice President
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