EX-10.2 3 d447417dex102.htm DEVELOPMENT AGREEMENT DEVELOPMENT AGREEMENT Between CRESCENT DEVELOPMENT, LLC, a Delaware limited liability company, as Developer And GGT CRESCENT ALEXANDER NC VENTURE, LLC, a Delaware limited liability company, as Owner...
Exhibit 10.2
Between
CRESCENT DEVELOPMENT, LLC,
a Delaware limited liability company, as Developer
And
GGT CRESCENT ALEXANDER NC VENTURE, LLC,
a Delaware limited liability company, as Owner
Dated: November 27, 2012
THIS DEVELOPMENT AGREEMENT (this “Agreement”), is entered into as of the 27th day of November, 2012 by and between GGT Crescent Alexander NC Venture, LLC, a Delaware limited liability company (together with its successors and assigns, “Owner”) and Crescent Development, LLC, a Delaware limited liability company (“Developer”).
Article 1. Recitals and Definitions
“Affiliate” shall mean, for any party, (i) any entity directly or indirectly controlled by, controlling or under common control with such party, or (ii) any entity owning or controlling 10% or more of the outstanding voting interests of such party, or (iii) any officer, director, general partner or managing member of such party, or (iv) any entity or person who is an officer, director, general partner, managing member or holder of 10% or more of the voting interests of any entity or person described in clauses (i) through (iii) of this definition.
“Allowable Development Costs” shall have the meaning provided in Section 2.5.
“Architect” means The Preston Partnership, PLLC, a Georgia limited liability company.
“Code Compliance Changes” shall have the meaning provided in Section 2.15.
“Completion” or “Completed” means the full and final completion of the Improvements and the balance of the Project, in a good and workmanlike manner, lien free on or before the Completion Date in compliance with all Requirements, including, without limitation, the 1988 Fair Housing Act Amendments and all guidelines, rules and regulations promulgated and adopted in connection therewith to the extent they relate to construction, substantially in accordance with the Plans and Specifications, and in accordance with the terms of this Agreement and to a qualitative standard (including, without limitation, as to construction standards and materials) at least equivalent to the standard achieved at the property known as Circle at Concord Xxxxx Apartments located in Cabarrus County, North Carolina and previously developed by an Affiliate of Crescent Member, as evidenced by issuance of a final certificate of occupancy for all applicable components of the Project (including, without limitation, the clubhouse, each apartment unit (or each building containing the apartment units if separate
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certificates of occupancy are not issued for each apartment unit) and any of the structures and material amenities to be constructed on the Property) and as established by certification thereof by Developer, the Architect and the General Contractor, and as established to the reasonable satisfaction of the Construction Consultant for the Project, subject to completion of the Punchlist Items and subject to the installation of landscaping, which in accordance with good horticultural practices should be installed at a different time of year and for which adequate provisions have been made for installation at a seasonally appropriate time. When used with reference to any individual building that is part of the Improvements, “Completion” or “Completed” shall mean such individual building has been completed in accordance with the terms of the Construction Contract, in a good and workmanlike manner, lien free in compliance with all Requirements, including, without limitation, the 1988 Fair Housing Act Amendments and all guidelines, rules and regulations promulgated and adopted in connection therewith to the extent they relate to construction, substantially in accordance with the Plans and Specifications, and in accordance with the terms of this Agreement and to a qualitative standard (including, without limitation, as to construction standards and materials) at least equivalent to the standard achieved for individual buildings at the property known as Circle at Concord Xxxxx Apartments and located in Cabarrus County, North Carolina, as evidenced by issuance of a final certificate of occupancy for such building and as established by certification thereof by Developer, the Architect and the General Contractor, and as established to the reasonable satisfaction of the Construction Consultant for the Project, subject to completion of the Punchlist Items related to such building.
“Completion Date” means the earlier of: (i) twenty-four (24) months following the date on which all building permits and other government approvals required for the General Contractor to begin construction of the buildings pursuant to the Construction Contract have been issued, with such date extended one day for each day of delays caused by any Event of Force Majeure, or (ii) the date Completion of the Improvements and the balance of the Project actually occurs.
“Construction Consultant” means that certain construction consultant to be selected by Owner in its sole and absolute discretion.
“Construction Contract” has the meaning set forth in Section 2.1.
“Construction Cost Overruns” has the meaning set forth in Section 2.6.
“Construction Lender” means Regions Bank, an Alabama banking corporation.
“Construction Loan” means that certain loan in the original principal amount of no more than $25,000,000.00 provided by Construction Lender to finance the costs of acquisition of the Property and construction of the Improvements.
“Construction Loan Documents” means those certain documents memorializing and securing the Construction Loan including, but not limited to a construction loan agreement, promissory note, mortgage and any other agreements, documents, or instruments evidencing, guarantying, securing or otherwise relating to the promissory note, or executed or delivered in connection with the Construction Loan, as such agreements, documents, and instruments may be amended, modified, extended, renewed or supplemented from time to time.
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“Crescent Member” means Crescent Alexander Village I, LLC, a Delaware limited liability company, which is an Affiliate of Developer and a Member of Owner.
“Development Fee” has the meaning set forth in Section 4.1.
“Engineer” means Land Design, Inc. a North Carolina corporation.
“Event of Force Majeure” means any of the following: strike, lockout, fire or other casualty, material or labor shortage, governmental regulation or control not in effect on the date of this Agreement, inclement weather, or acts of God; provided that Developer shall deliver to Owner written notice of the occurrence of each such event within thirty (30) days after the date that Developer or any of its Affiliates first becomes aware of the occurrence thereof. For the avoidance of doubt, “Event of Force Majeure” shall not include (a) inability to obtain financing or other lack of funds, (b) delays in obtaining any governmental approval unless such delay is the result of a general moratorium on issuing government approvals, or (c) delays due to adverse soil conditions, if such delays due to adverse soil conditions continue for longer than thirty (30) days in aggregate.
“Plans and Specifications” has the meaning set forth in Section 2.1.
“General Contractor” means Crescent Multifamily Construction, LLC, a Delaware limited liability company.
“Guaranteed Price” has the meaning set forth in Section 2.4.
“Guarantor” shall mean, Crescent Resources, LLC, a Georgia limited liability company.
“Guaranty” shall mean any guaranty delivered by Guarantor in connection with this Agreement or the Construction Loan.
“Improvements” means, collectively, the improvements to be constructed on the Property as shown in the Plans and Specifications.
“Joint Venture Agreement” shall mean the Limited Liability Company Agreement of Owner of even date herewith, as the same may be amended or supplemented from time to time.
“Member” or “Members” shall mean the Members (as defined in the Joint Venture Agreement) of Owner.
“Minor Field Changes” shall have the meaning set forth in Section 2.15.
“Plans and Specifications” has the meaning set forth in Section 2.1.
“Project” has the meaning set forth in Section 1.1.
“Project Budget” shall mean the Project Budget (as defined in the Joint Venture Agreement), a copy of which is attached hereto as Exhibit C and incorporated herein by this reference.
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“Project Contracts” has the meaning set forth in Section 2.7.
“Property” has the meaning set forth in Section 1.1.
“Punchlist Items” means, collectively, unfinished items of on-site construction and correction of any such work that are not necessary for the issuance of any temporary or final certificate of occupancy or for completion of the Project in accordance with the terms of this Agreement, that will be completed by General Contractor within 60 days following Completion, all as reasonably determined by Construction Consultant; provided that such 60-day period shall be extended for a reasonable period of time which shall not exceed, in any event, 120 days in the aggregate, to enable completion of Punchlist Items, so long as Developer is in good faith diligently overseeing General Contractor, and General Contractor is in good faith pursuing a resolution to any outstanding Punchlist Item as of the end of such 60-day period.
“Requirements” means, collectively, all laws, ordinances, rules, regulations, codes, requirements of governmental authorities, permits, licenses, approvals, the terms of all restrictions, easements and other arrangements of record affecting all or any portion of the Property, and all contractual obligations of Developer and Owner (including obligations related to the Construction Loan and any other third-party financing).
Article 2. Developer’s Obligations
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third parties and will serve the best interests of Owner in dealing with all third parties in connection with the Project.
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accordance with the terms of this Agreement and the Joint Venture Agreement (collectively such excess being “Construction Cost Overruns”) must be paid, Developer agrees to pay or cause Guarantor to pay one hundred percent (100%) of such Construction Cost Overruns on or before the date they are due and in any event no later than ten (10) days following receipt of notice from Owner. Each Guarantor’s obligation to pay for any such Construction Cost Overruns shall be memorialized in a Guaranty in the form attached hereto as Exhibit H and incorporated herein by this reference. Any Construction Cost Overruns funded by Developer shall not be treated as a contribution by Developer or Crescent Member to Owner or in any manner construed so as to increase the Capital Account or Initial Capital Contributions (as such terms are defined in the Joint Venture Agreement) of Crescent Member under the Joint Venture Agreement, shall not be treated as Additional Capital (as such term is defined in the Joint Venture Agreement) of Crescent Member under the Joint Venture Agreement, shall not be treated as a loan to Owner, and shall not entitle Developer or Crescent Member to any interest on or refund of any amounts so advanced or to any other rights or remedies against Owner or any Member.
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Architect to be out of compliance with the Plans and Specifications) or the Requirements or not to be free from material defects in workmanship and/or materials; provided, however, that any such claim of defective or non-conforming work shall be made with respect to any building or related Improvements constructed pursuant to the Construction Contract, if at all, on or prior to the date which is one (1) year following Completion with respect to building or related Improvements and Developer’s obligation to repair, correct or replace such work shall, with respect to each building or related Improvements, expire one (1) year following Completion of such building or related Improvements (the “Correction Period”). Developer further agrees to pay the cost of repairing all damage to other property resulting from material defects in the work to be performed or materials to be furnished or installed in connection with construction of the Improvements and to pay the cost and expenses of replacing other property which may be damaged or disturbed in repairing, correcting or replacing any material defects in work or materials as provided herein.
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to indemnify, defend, and hold Owner harmless from and against any and all costs, expenses, liabilities, claims and obligations incurred in connection with any such lien for which Developer is responsible hereunder and to have such lien discharged of record. Developer’s obligations under this Section 2.11, including the obligation to indemnify, defend and hold Owner harmless, shall survive the expiration or termination of this Agreement.
(a) Keep Owner and Construction Consultant advised generally as to developments affecting the Property and the Project and respond, coordinate and cooperate with all reasonable requests by Owner or Construction Consultant inquiring as to the status of the progress of the Project for the purpose of enabling Owner or Construction Consultant to monitor Developer’s progress;
(b) Allow Construction Consultant to attend monthly Project meetings, provide Construction Consultant reasonable advance notice of each such meeting, and furnish Construction Consultant with minutes, notes and reports reasonably requested by Construction Consultant to document administration of the Project;
(c) Obtain and maintain (or cause to be obtained and maintained) in full force and effect all necessary authorizations, agreements, permits, licenses (including, without limitation, surety bonds) and similar documents with the appropriate governmental authorities and utility companies pertaining to the Project and necessary for Completion of the Project by the Completion Date and full use and occupancy of the Project;
(d) Supervise the performance of all contracts with and coordinate the activities of all designated Project consultants;
(e) Organize and administer Owner’s insurance program during development and construction of the Project;
(f) Perform such other related business and development functions pertaining to the development of the Project as agreed between Owner and the Developer;
(g) Supervise the design and construction of the Project, including all buildings constructed as a part of the Project and all off-site improvements and on-site common area improvements, such as site preparation and grading, above-ground and underground utility systems, parking lots, surface improvements, lighting, roads, and landscaping, in each case strictly in accordance with the Plans and Specifications;
(h) Maintain a review function over the Architect and General Contractor with respect to:
(i) | Approval of shop drawings and equipment manuals; |
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(ii) | Revisions to working drawings and specifications required by reason of: (1) design omission or error; (2) field conditions; (3) governmental review; or (4) changes requested by Owner; |
(iii) | Periodic technical inspections; and |
(iv) | Construction inspection; |
(i) Make final inspections of the Project with the Architect and General Contractor and prepare or cause to be prepared and issue an exception report and process all exception report items, warranties, guarantees, bonds and other matters required with respect thereto and procure all necessary operating and occupancy certificates and permits for the use of the Project;
(j) Within thirty (30) days following Completion, Developer shall deliver to Owner and Construction Consultant a complete set of as-built drawings or a complete set of annotated Plans and Specifications prepared by the Architect, General Contractor or any subcontractor, as applicable, and showing all of the Improvements as actually constructed by General Contractor. Such as-built drawings shall be in form reasonably satisfactory to Owner, and Developer shall cause any corrections requested by Owner or Construction Consultant to be made in such as-built drawings;
(k) Perform the following services:
Distribute (or cause to be distributed) weekly to Owner, minutes of weekly project meetings, if any and monthly to Owner, as such documents are available:
(i) | copies of all current construction schedules, |
(ii) | a variance report, |
(iii) | construction status reports, |
(iv) | current Project Budget with pending change orders and notations for any cost savings, |
(v) | all field reports of the Architect and Engineer, |
(vi) | all summaries of material test reports, |
(vii) | all other threshold inspection reports and an open items report, |
(viii) | a narrative description of leasing status, development and construction issues and a variance explanation, |
(ix) | following Completion, a balance sheet, operating statement and cash flow statement, each certified by the Developer as true and correct in all material respects, |
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(x) | all Construction Loan disbursement requests and related certificates, releases and lien waivers from the previous Construction Loan application and approvals of payment by Construction Lender, and |
(xi) | copies of all other documents and written communications between Developer and Construction Lender; |
(l) Deliver or cause to be delivered to Owner a copy of each interim progress report, each in substantially the form as is attached hereto as Exhibit D, not less frequently than monthly prior to Completion and otherwise make available to Owner and its representatives, employees, officers and agents the books and records of Owner possessed by Developer or within Developer’s control. Owner shall have the right to audit, examine and make copies of or extracts from the books of account and records of Developer and Owner (but nothing herein shall require a Member to pay for the preparation of audited financial statements required by Section 7.1 of the Joint Venture Agreement). The costs of any such audit included within the Project Budget shall be an Allowable Development Cost. The costs of any such audit in excess of the expenses included in the Project Budget shall be paid by Owner. Such books of account and all records of Owner possessed by Developer or within Developer’s control shall remain the property of Owner;
(m) Complete all Punchlist Items within the time period provided in the definition of “Punchlist Items” to the reasonable satisfaction of Owner and otherwise in accordance with the terms of this Agreement;
(n) Deliver to Owner upon Completion an as-built survey of the Project prepared by a registered land surveyor in the state where the Property is located and in form and substance reasonably satisfactory to Owner;
(o) Perform such other services as are usual and customary to assist Owner in the development, construction and operation of the Project; and
(p) At all times during construction of the Project, Developer shall procure or cause to be procured for the benefit of Owner in accordance with the Project Budget:
(i) | “special perils” or equivalent policy form of builder’s risk insurance in the amount of one hundred percent (100%) of the completed value of the Improvements, plus the value of subsequent Construction Contract modifications, if any, and cost of materials supplied or installed by others, comprising the total value of the Improvements, which shall be converted to permanent property hazard insurance for all Improvements included within the Project upon issuance of a certificate of occupancy for each such building, and, for both forms of coverage, Developer’s and Owner’s lenders’ interests shall be protected under a loss payable clause. The builder’s risk insurance policy must provide (A) a permission |
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to occupy endorsement (B) include coverage for the perils of fire, lightning, wind, collapse, flood and/or surface water, earthquake/volcanic action, theft, vandalism, malicious mischief, and terrorism, (C) include coverage for soft costs and (D) include coverage for materials temporarily stored off site and/or in transit (unless such risk of loss is transferred to others by written contract). Owner and Developer shall be included as a named insured; |
(ii) | standard business income/loss of rents insurance against loss of income/rents from the Project as a result of covered damage to the Project on a “special perils” or equivalent policy form and including the perils of terrorism, flood and earthquake. Such insurance shall cover one hundred percent (100%) of the actual loss sustained for at least twelve (12) months with coinsurance waived by an agreed value clause (to the extent such a provision is commercially available); |
(iii) | a policy of commercial general liability insurance (occurrence form) having a limit of not less than $1,000,000 per single occurrence, $2,000,000 aggregate. Owner and its designees shall be named as additional insured on Developer’s, General Contractor’s and all subcontractor’s policies. The additional insured coverage shall be provided on either (A) CG2010 covering ongoing operations and CG2037 covering additional insured completed operations; or (B) an equivalent form which includes both Ongoing and Completed Operations, if acceptable to Owner; |
(iv) | commercial automobile liability including coverage for owned, hired and non-owned vehicles with a limit not less than $1,000,000 combined single limit; |
(v) | worker’s compensation insurance having limits not less than those required by state statute and federal statute, if applicable, and employers liability insurance in an amount not less than $500,000, each accident; $500,000 disease policy limit; $500,000 each employee, covering all persons employed by Owner, Developer and the General Contractor in the conduct of its operations at the Project (including the all states endorsement and, if applicable, the volunteers endorsement); and |
(vi) | an umbrella policy of commercial general liability insurance having a limit of not less than $10,000,000.00 per occurrence and $10,000,000 general aggregate. |
Such insurance policies shall be issued by insurance companies with a rating of not less than A- Class VIII in the latest edition of Best’s Insurance Guide. Owner’s lenders shall
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be listed as Mortgagee on all property insurance policies and additional insured parties on all liability insurance policies, and Developer shall deliver to Owner certified copies of such insurance policies, together with certificates evidencing the coverage of Owner and its lenders under the liability policy, promptly upon issuance or renewal thereof. Developer shall not take or fail to take any action that would cause the cancellation of, diminish coverage under or result in an increased premium for any of the insurance described in this Section.
2.14 [Intentionally Deleted].
As used herein, the term “Minor Field Changes” means any changes to the Plans and Specifications which satisfy all of the following conditions and requirements:
(a) the change shall not involve any substitution or elimination of materials; or if it does involve material substitution, the substituted materials are of equal or superior quality, durability and appearance to the materials which are being replaced, and the substitution shall not materially change the appearance or use of the Improvements;
(b) the change shall not diminish the value or utility of the Project or the mechanical, structural or architectural integrity thereof;
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(c) the value of the work represented by such proposed change shall not exceed $50,000 and, when combined with all previous Minor Field Changes, shall not have a cumulative value in excess of $400,000; and
(d) the change shall not require any change or modification to or amendment of the building permits issued by Mecklenburg County, North Carolina for construction of the Improvements.
“Code Compliance Changes” means any changes in the Plans and Specifications which are required by any governmental agency in connection with its review and inspection process and which also comply with the requirements set forth in subparagraphs (a), (b) and (c) above with respect to Minor Field Changes.
Developer shall give notice to Owner of the change within five (5) business days after the change is effected. Nothing in this subsection shall be deemed in any way to excuse, delay or otherwise affect Developer’s obligations to deliver to Owner as-built drawings as described in Section 2.12.
Notwithstanding anything to the contrary contained in this Section 2.15, in no event may Developer amend the Plans and Specifications or utilize change orders in any manner which would modify, change or otherwise alter the foundations of the Improvements. Developer shall enter into any change order which Owner may request in writing so long as such change order is reasonably acceptable to Developer and acceptable to Construction Lender. Any increased costs attributable to such an Owner requested change order shall increase Allowable Development Costs and the Project Budget on a dollar-for-dollar basis. Notwithstanding anything herein to the contrary, in no event shall Allowable Development Costs or the Project Budget be deemed increased by any Minor Field Change, Code Compliance Change or change order approved in an Approval Notice.
(a) Enter into the Construction Contract, any architectural contract, or any other contract relating to the construction of the Project;
(b) Amend or modify the Construction Contract;
(c) Enter into any additional contracts, agreements or obligations with any of its Affiliates in connection with the Project; or
(d) Subject to the terms of this item (d), amend or modify the Project Budget, other than to reallocate demonstrated line item savings and amounts set forth in the contingency line item to demonstrated line item overruns. In no event shall Developer have the right to reallocate amounts in the contingency line item in excess of $100,000 for each individual reallocation and $600,000 for all such reallocations except (i) as necessary to cause the applicable line items in the Project Budget to match the guaranteed
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maximum price under the Construction Contract or (ii) with the prior written consent of Owner, which shall not be unreasonably withheld.
Developer acknowledges that in order to perform the services required of it hereunder, it will be necessary for Developer to have in its employ certain key staff personnel. Accordingly, Developer agrees that the staff available to it in connection with its performance of this Agreement shall at all times consist of sufficient qualified personnel who shall use at least such of their time and effort as is necessary to assure the full performance of this Agreement by Developer.
Article 4. Developer Compensation
Article 5. Covenants, Representations and Warranties of Developer.
Developer hereby covenants, represents and warrants to Owner as follows:
(a) Developer is a limited liability company duly formed and in good standing under the laws of the State of Delaware and duly qualified to do business within the State of North Carolina. Developer has full power and authority to enter into and perform this Agreement and all documents, instruments and agreements entered into by Developer
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pursuant to this Agreement and to carry out the transactions contemplated hereby. This Agreement and all documents, instruments and agreements entered into by Developer pursuant to this Agreement constitute the valid, legal and binding obligations of Developer enforceable in accordance with their respective terms upon proper execution and delivery thereof by Developer, subject as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles. This Agreement has been executed and such other documents, instruments and agreements have been or will be executed by duly authorized representatives of Developer.
(b) As of the date hereof, there is no petition in bankruptcy or any petition or answer seeking an assignment for the benefit of creditors, the appointment of a receiver, trustee, liquidation or dissolution or similar relief under the U.S. Bankruptcy Code or any state law filed by or against or, to the best of Developer’s knowledge, threatened to be filed by or against Developer, its managing member, or any Guarantor under any Guaranty. Developer does disclose the existence of the confirmed plan of reorganization of Guarantor and its Affiliates effective June 9, 2010 in Case No. 09-11507 (CAG) in the United States Bankruptcy Court for the Western District of Texas, Austin Division.
(c) Developer has no actual knowledge of the existence of a criminal investigation concerning Developer, its members, or any Guarantor.
(d) Neither the execution and the delivery of this Agreement nor the consummation of the transactions contemplated by this Agreement is subject to any requirement that Developer or, to Developer’s knowledge, General Contractor obtain any consent, approval or authorization of, or make any declaration or filing with, any governmental authority or third party which has not been obtained (other than building permits, certificates of occupancy and operating permits which Developer or General Contractor will obtain on behalf of Owner) or which, in any case or in the aggregate, if not obtained or made would have an adverse effect, financial or otherwise, on the Project or render such execution, delivery or consummation illegal or invalid.
(e) The holders of direct and indirect interests in Developer as of the date hereof are set forth on Exhibit I attached hereto and incorporated herein by reference. Developer’s sole member holds such interest for its own account and not for the account of others, free and clear of all liens and encumbrances.
(f) To Developer’s knowledge, the factual matters set forth in the Recitals are true, complete and accurate in all respects.
(g) As of the date hereof, there are no actions, suits, proceedings or investigations, at law or in equity, or before any governmental agency or other person, (i) pending against Developer, its members or any Guarantor or (ii) to Developer’s knowledge, threatened against Developer, its members or any Guarantor, which, in any case or in the aggregate, will have a materially adverse effect on their respective abilities to meet their obligations in connection with this transaction or have a material adverse effect on the value, use, operation or occupancy of the Project. Developer shall deliver or
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shall cause to be delivered to Owner promptly following receipt thereof any notice of any action, suit, proceeding or investigation, at law or in equity, against Developer, its members or any Guarantor which reasonably could have a material adverse effect on their respective abilities to meet their obligations in connection with this transaction or have a material adverse effect on the value, use, operation or occupancy of the Project.
(h) The Property is zoned for the purpose contemplated by this Agreement and such purpose is consistent with the development of the Property for a garden apartment community (collectively, the “Land Use Approval”). The Plans and Specifications for the Project comply with the Land Use Approval. The Land Use Approval is currently in effect and has not been amended in any respect to materially affect the use of the Property as a rental apartment complex. The Property is a stand-alone parcel with respect to the requirements of the Land Use Approval.
(i) The Property is not dependent upon any other parcel of real estate (other than public drainage facilities or drainage facilities provided by private easement) to satisfy drainage, parking, open space or other legal requirements under any Requirements.
(j) The Property is a legal parcel which does not include any real estate other than the Property.
(k) If constructed in accordance with the Plans and Specifications, the Project will comply in all respects with all applicable Requirements (including but not limited to, the Fair Housing Act to the extent relating to construction and all covenants, conditions and restrictions, including, without limitation, design guidelines, applicable to the Project).
(l) Developer believes that Mecklenburg County, North Carolina and all other applicable governmental authorities shall have approved the Plans and Specifications for issuance of a land disturbance permit and building permits for construction of the Improvements (the “Building Permits”) and shall issue all of the Building Permits in accordance with the schedule described in Exhibit F attached hereto. Developer has paid, or will pay on behalf of Owner to the extent provided in the Project Budget, as and when due, all building permit fees, applicable to the Building Permits. The Building Permits constitute all of the permits and licenses necessary to authorize construction of the Improvements substantially in accordance with the Plans and Specifications. The architectural plans and specifications submitted for approval by Mecklenburg County, North Carolina for purposes of obtaining issuance of the Building Permits are the Plans and Specifications. Developer has delivered to Owner true, correct and complete copies of the Plans and Specifications and shall deliver to Owner the Building Permits in accordance with the schedule described in Exhibit F attached hereto.
(m) The Property is taxed as one or more separate parcel(s) (i.e., not as part of a larger tax parcel that includes the Property) for real estate tax purposes.
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(n) To Developer’s knowledge, the Property is not in violation of any law applicable to the Property. Developer has neither received nor been threatened with a notice of violation of any law applicable to the Property.
(o) Pedestrian and vehicular access to the Property is provided by streets which are contiguous with the Property. There are no special assessments pending or, to Developer’s knowledge, threatened against or with respect to the Property on account of or in connection with such public streets, roads or any other public improvements including, but not limited to, storm and sanitary sewer, water or other utility lines, curbs, gutters, drainage facilities, sidewalks, lighting and the like.
(p) To Developer’s knowledge, and except as may have been previously disclosed in writing to Owner pursuant to the Environmental Report (hereinafter defined), there are no Hazardous Materials (as defined below) or petroleum underground storage tanks on or near (except as disclosed in the Environmental Report or any other environmental report ordered by and provided to Owner prior to the date hereof) the Property, and Developer has no reason to believe that any such Hazardous Materials or petroleum underground storage tanks are on or near (except as disclosed in the Environmental Report or any other environmental report ordered by and provided to Owner prior to the date hereof) the Property in either case, which would require, necessitate or require remediation, cleanup, non-disturbance or any other action pursuant to any Environmental Laws. Developer has delivered to Owner the following environmental report: “Phase I Environmental Site Assessment dated December 12, 2011” prepared by Summit Engineering and Construction Services, Inc. (the “Environmental Report”), which has been or shall be certified to and in favor of Owner on or before the effective date of this Agreement. Developer has no reason to believe that the Environmental Report is not true and correct in all respects. As used in this Agreement, the term “Hazardous Materials” shall be defined to include, without limitation, (i) asbestos or any material composed of or containing asbestos or urea formaldehyde in any form and in any type; (ii) polychlorinated biphenyl compounds; (iii) oil hydrocarbons, petroleum, petroleum products or products containing or derived from petroleum; (iv) any hazardous or toxic waste, substance, material, smoke, gas or particulate matter, as presently defined by or for purposes of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.A. Section 9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.A. Section 1801, et seq.; the Resource Conversation and Recovery Act, 42 U.S.C.A. Section 6901, et seq.; the Toxic Substances Control Act, 15 U.S.C.A. Section 2601, et seq.; the Federal Water Pollution Control Act, 33 U.S.C.A. Section 1251, et seq.; and any State of North Carolina environmental laws; or any successor to such laws (in existence on the date this representation is made or updated), or any other federal, state or local environmental, health or safety statute, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards concerning or in connection with hazardous or toxic wastes, substances, material, smoke, gas or particulate matters as now or at any time hereinafter in effect, or any common law theory based on nuisance or strict liability (collectively, “Environmental Laws”).
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(q) Other than as previously disclosed to Owner by Developer, any previous owner of the Property, or any other third party, the Property is not (i) designated by the Secretary of Housing and Urban Development, the Army Corps of Engineers, the State of North Carolina or any other governmental or quasi-governmental authority as a flood plain or wetlands area, or (ii) designated by any other governmental or quasi-governmental authority as an area subject to environmental or other regulation that would materially affect the use of the Project as the apartment complex contemplated by the Plans and Specifications or otherwise for multifamily residential rental housing.
(r) The Property is benefited by (or will be benefited by prior to Completion) easements of unlimited duration as are necessary for the Project. No additional easements are required for the provision of utilities, access, egress and drainage to or for the benefit of the Property or the Project in connection with the use and operation of the Project as a multi-family housing development and related facilities as depicted on the Plans and Specifications.
(s) Developer or General Contractor has obtained, or will obtain on behalf of Owner prior to starting construction of each component of the Project, the Building Permits (which shall be obtained by the date provided in the schedule described in item (l) of this Section) and all other permits, licenses, waivers, consents, approvals and authorizations, and Developer or General Contractor has made, or will make in a timely fashion, all material registrations, qualifications, designations, declarations and filings required (collectively, the “Approvals”) for each component of the Project, so that General Contractor may construct the Improvements and, subject only to the issuance of customary temporary or permanent certificates of occupancy by Mecklenburg County, North Carolina and any other necessary operating permits, the Project can be operated as an apartment complex and related facilities as depicted on the Plans and Specifications. As of the date hereof, Developer has no reason to believe that such certificates of occupancy will not be issued in the ordinary course of business following completion of construction of the Improvements. All of the Approvals for each component of the Project are, or prior to the commencement of construction of each component of the Project will be, in full force and effect and no cancellation or suspension of any of them is or will be threatened. Developer has delivered (or has caused to be delivered) to Owner true, correct and complete copies of the Approvals received by Developer or the General Contractor on or before the date hereof. Developer shall promptly deliver (or cause to be delivered) to Owner true, correct and complete copies of all Approvals thereafter received by Developer or General Contractor promptly upon receipt thereof by Developer or General Contractor. Without limiting the foregoing, Developer has delivered to Owner a true, complete and correct copy of the final site plan for the Project as approved by all applicable authorities and attached hereto as Exhibit G.
(t) The Construction Contract provides for the General Contractor to perform all construction work for the Project for a guaranteed maximum price. Owner has delivered or shall deliver to Developer a true, correct and complete copy of the executed Construction Contract. Developer shall deliver to Owner, on request, a true, correct and complete list and copy of each subcontract and material supply contract to which Developer is a party or has been provided a copy, as required by Owner.
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(u) Upon their issuance, the liability insurance policies required under this Agreement shall name Owner and Construction Lender as additional insured parties. Promptly following issuance thereof, Developer shall deliver to Owner true, correct and complete copies of all of such insurance policies.
(v) No broker, finder, agent or other intermediary has been employed by or on behalf of Developer or any of its Affiliates in connection with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby, and no such party has any right or claim to any commission, finder’s fee or similar amount payable as a result of any act of, or engagement of, such party by Developer or any of its Affiliates. Developer hereby indemnifies Owner against all liabilities and expenses (including, without limitation, attorneys’ fees and costs), in connection with any claims for commission, fee, compensation, or otherwise, for the bringing about of this transaction, or the consummation hereof, which may be made against Owner, as a result of any acts of Developer or any Developer Affiliate. Developer’s obligation to indemnify Owner in this Section 5(v) shall survive the expiration or termination of this Agreement.
(w) Neither Developer nor any of its Affiliates has received any notice of condemnation or of eminent domain proceedings or negotiations for the purchase of any of the Land or the Project in lieu of condemnation, and no condemnation or eminent domain proceedings or negotiations have been commenced or, to the best of their knowledge, threatened in connection with the Property or the Improvements which would have a material and adverse effect on the value of the Project or on the continued utilization of the Project as an apartment complex or in accordance with the Plans and Specifications.
(x) All utility services, including, but not limited to, storm and sanitary sewer, water, electric power, gas, cable television and telephone service are, or will be prior to Completion, available to the Property in form and with capacity sufficient for the useful enjoyment and operation of the Project and no unpaid assessments, impact fees, development fees, tap-on fees or recapture costs are payable in connection therewith except charges for which provision has been made in the Project Budget.
(y) Promptly upon its receipt, but in no event later than five (5) days after receipt, Developer shall provide Owner with true, accurate and complete copies of any notice of any material default or of any matter or event which will, with the lapse of time or the giving of notice or both, become a material default under any service or other contract to which Developer or Owner is a party or by which any of their assets are bound; neither Developer nor any Affiliate of Developer has received any notice of any violation of any building, health and safety code or other governmental regulation which has not been fully corrected.
(z) Upon Completion, all temporary or permanent certificates of occupancy and other consents and approvals required from Mecklenburg County, North Carolina, and other governmental authorities and associations and boards with jurisdiction over the Project shall have been issued and be in full force and effect without the presence or existence of any unsatisfied conditions or requirements with respect thereto, and true,
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correct and complete copies of such consents, approvals and certificates of occupancy shall have been delivered to Owner.
(aa) Developer shall not at any time use, store or keep at the Project any Hazardous Materials, except those customarily and prudently used in construction or operation of projects similar to the Project and in compliance with all Environmental Laws.
(bb) Developer represents and warrants that (i) all of the ownership interests of Developer are owned as set forth in Article 5(e), (ii) Developer is classified as a limited liability company for Federal income tax purposes and (iii) Developer’s U.S. employer identification number is 00-0000000. Developer covenants that it will not take any action (or fail to take any action, as the case may be) that would cause the representation in this clause (bb) to fail to be true throughout the term of this Agreement.
(a) The removal of Crescent Member as a Member of Owner or as the “Operating Member” with “Cause” (as such term is defined in the Joint Venture Agreement) pursuant to the Joint Venture Agreement. Without limiting the foregoing, the removal of Crescent Member as the “Operating Member” (as such term is defined in the Joint Venture Agreement) without “Cause” in accordance with Section 6.7 of the Joint Venture Agreement, shall not constitute an Event of Default under this Agreement.
(c) The failure of Developer to cause Completion (with the exception of completion of Punchlist Items and out-of-season landscaping) to occur by the Completion Date.
(d) A breach by the Developer of any of the obligations described in this Agreement, which breach continues for twenty (20) days after notice by Owner to the Developer of such breach; provided that, if such breach cannot practically be cured within twenty (20) days, such breach has no material adverse impact on the Owner or the Project, and Developer is in good faith actively prosecuting with diligence and continuity a cure, then such breach shall not constitute an Event of Default.
(e) In the event that (i) the Developer shall make an assignment for the benefit of creditors, or apply for the appointment of a trustee, liquidator or a receiver of any substantial part of its assets, or shall commence any proceeding relating to itself under any bankruptcy, reorganization, arrangement or similar law; or (ii) if any such application is filed or proceeding is commenced against the Developer and the Developer indicates its consent thereto, or an order is entered appointing any such trustee, liquidator or
20
receiver or approving a petition in any such proceedings and such order remains in effect for more than 60 days; or (iii) if the Developer shall admit, in writing, its inability to pay its debts as they become due.
(f) If the Developer shall be dissolved.
Any and all notices and other communications required or permitted under this Agreement shall be deemed adequately given only if in writing delivered either in hand, or by expedited commercial carrier which provides evidence of delivery or refusal, addressed to the recipient, or with all freight charges prepaid, if by commercial carrier. All notices and other communications shall be deemed to have been given for all purposes of this Agreement upon the date of receipt or refusal. All such notices and other communications shall be addressed to the parties at their respective addresses set forth below or at such other addresses as any of them may designate by notice to the other parties.
Notices to the Developer shall be addressed to:
Crescent Development, LLC
c/o Crescent Resources
000 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxx, President - Multifamily Division
with a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxx Xxx Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
21
Notices to Owner shall be addressed to:
GGT Crescent Alexander NC Venture, LLC
c/o Crescent Resources
000 X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxx X. Xxxxxxx, President - Multifamily Division
with a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxx Xxx Xxxxxxx & Xxxxxxxxx, LLP
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
with a copy to:
GGT Crescent Alexander Holdings, LLC
CNL Center at City Commons
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxx, Chief Financial Officer
with a copy to:
GGT Crescent Alexander Holdings, LLC
CNL Center at City Commons
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq., General Counsel
and a copy to:
Lowndes, Drosdick, Doster, Xxxxxx & Xxxx, P.A.
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
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transfer or permit to be transferred in any manner or by any means whatsoever whether voluntarily or by operation of law, all or any part of its interest in this Agreement.
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OWNER | ||||||
GGT CRESCENT ALEXANDER NC VENTURE, LLC, a Delaware limited liability company | ||||||
By: | Crescent Alexander Village I, LLC, a Delaware limited liability company, its Operating Member | |||||
By: | Crescent Resources, LLC, a Georgia limited liability company, its manager | |||||
By: | /S/ Xxxxx X. Xxxxxxx | |||||
Xxxxx X. Xxxxxxx | ||||||
President - Multifamily Division |
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DEVELOPER | ||||||
CRESCENT DEVELOPMENT, LLC, a Delaware limited liability company | ||||||
By: | Crescent Resources, LLC, a Georgia limited liability company, its sole member and manager | |||||
By: | /S/ Xxxxx X. Xxxxxxx | |||||
Name: Xxxxx X. Xxxxxxx | ||||||
Title: President – Multifamily |
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EXHIBIT A
LEGAL DESCRIPTION
[Omitted as not necessary to an understanding of the Agreement]
EXHIBIT B
PLANS AND SPECIFICATIONS
[Omitted as not necessary to an understanding of the Agreement]
EXHIBIT C
PROJECT BUDGET
[Omitted as not necessary to an understanding of the Agreement]
EXHIBIT D
INTERIM PROGRESS REPORT
[Omitted as not necessary to an understanding of the Agreement]
EXHIBIT E
INTENTIONALLY OMITTED
EXHIBIT F
PERMITS SCHEDULE
[Omitted as not necessary to an understanding of the Agreement]
EXHIBIT G
FINAL SITE PLAN
[Omitted as not necessary to an understanding of the Agreement]
EXHIBIT H
FORM OF CONSTRUCTION COST OVERRUN GUARANTY
[Omitted as not necessary to an understanding of the Agreement]
EXHIBIT I
OWNERSHIP OF DEVELOPER
[Omitted as not necessary to an understanding of the Agreement]