Exhibit 10.2(c)
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of January 29, 1997, by and between
LEISURE CENTERS LLC-1, a Texas limited liability company ("Borrower"), and
BANK UNITED, a federal savings bank ("Lender").
Borrower has requested Lender to make a certain loan to Borrower in an
aggregate principal amount of SEVEN MILLION THREE HUNDRED THOUSAND DOLLARS
AND NO/100 ($7,300,000.00). Lender is willing to make such loan to
Borrower upon the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
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Section 1.01. Definitions. As used in this Agreement, the following
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terms have the following meanings:
"Absolute Assignment" means the Absolute Assignment of Rents and
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Income (With License Back) by Borrower in favor of Lender of even date
herewith, as the same may be amended, supplemented or modified from
time to time.
"Advance" means the advance of funds by Lender to Borrower
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pursuant to Article II.
"Affiliate" means any Person directly or indirectly controlling,
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controlled by, or under common control with Borrower. For purposes of
this definition, "control" (including "controlled by" and "under
common control with") means (i) ownership of twenty-five percent (25%)
or more of the voting rights of any class of shares of an entity or
(ii) the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person,
whether through the ownership or voting securities or otherwise.
Without limiting the generality of the foregoing, for purposes of this
Agreement, Borrower, Guarantor, and each of their respective
subsidiaries shall be deemed an Affiliate of one another.
"Affiliate Acknowledgement" means the Acknowledgement of
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Assignment of Agreement and Subordination Agreement executed by any
affiliates of Borrower that will provide services to the Project in
favor of the Lender;
"Assumed Monthly Payment" means an assumed monthly payment of
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principal and interest resulting from a 25-year amortization of the
principal balance of the Loan at a fixed rate of interest equal to 225
basis points over the 5-year Treasury Yield, selected by Lender at the
time of calculation.
"Budget" means the Construction Budget set forth in Exhibit C of
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the Loan Commitment.
"Business Day" means any day other than a Saturday, Sunday or
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legal holiday for commercial banks in Houston, Texas.
"Closing Date" means the date upon which Borrower and Lender
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execute the Loan Documents.
"Collateral" has the meaning specified in Section 4.01.
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"Collateral Assignment" means the Collateral Assignment of
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Leases, Deposits and Agreements of even date herewith by Borrower in
favor of Lender.
"Construction Inspector" means AECC, Inc.
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"Contract Rate" means a variable rate of interest, adjusted
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monthly equal to the LIBOR Rate plus 2.75% per annum. The Contract
Rate shall be set each month based on the LIBOR Rate quoted two (2)
business days prior to the first day of each calendar month during the
term of the Note.
"Contracts" means the leases, management agreements and all
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contracts with the Project Architect and the General Contractor of the
Project.
"Debt" means for any Person: (i) all indebtedness, whether or not
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represented by bonds, debentures, notes, securities, or other
evidences of indebtedness, for the repayment of money borrowed, (ii)
all indebtedness representing deferred payment of the purchase price
of property or assets, (iii) all indebtedness under any lease which,
in conformity with GAAP, is required to be capitalized for balance
sheet purposes, (iv) all indebtedness under guaranties, endorsements,
assumptions, or other contingent obligations, in respect of, or to
purchase or otherwise acquire, indebtedness of others, and (v) all
indebtedness secured by a Lien existing on property owned, subject to
such Lien, whether or not the indebtedness secured thereby shall have
been assumed by the owner thereof.
"Debt Service Coverage Ratio" for any calendar quarter means the
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ratio of Net Income for such calendar quarter to the Assumed Monthly
Payment on the Loan, as hereinafter defined for the same calendar
quarter.
"Deed of Trust" means the first lien Deed of Trust, Mortgage,
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Security Agreement and Financing Statement on the Project from
Borrower in favor of Lender of even date herewith, as the same may be
amended, supplemented, or modified from time to time.
"Default Rate" means a floating rate of interest equal to the
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lesser of (i) the Contract Rate, from time to time in effect, plus
five percent (5.0%) per annum or (ii) the Maximum Rate.
"DHS" means the Texas Department of Human Services.
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"DHS Licenses" means all now or hereafter issued licenses from
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the Texas Department of Human Services or other governmental entities
for the operation of a Personal Care Facility and any food services
licenses related thereto.
"Disbursement Account" has the meaning specified in Section
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2.01(b).
"Environmental Indemnity" means the Certificate and
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Indemnification Regarding Hazardous Substances executed by Borrower in
favor of Lender of even date herewith, as the same may be amended,
supplemented or modified from time to time.
"Event of Default" has the meaning specified in Section 9.01.
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"First Extended Maturity Date" means forty-two months from the
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date hereof.
"First Extended Period" means the six month period commencing on
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the Maturity Date and ending on the First Extended Maturity Date.
"GAAP" means generally accepted accounting principles, applied on
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a consistent basis, as set forth in Opinions of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and/or in statements of the Financial Accounting Standards
Board and/or their respective successors and which are applicable in
the circumstances as of the date in question. Accounting principles
are applied on a "consistent basis" when the accounting principles
observed in a current period are comparable in all material respects
to those accounting principles applied in a preceding period.
"General Contractor" means Xxxxxxxx Construction Company.
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"General Contractor's Acknowledgement" means the Acknowledgement
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of Assignment and Agreement executed by the General Contractor in
favor of Lender.
"Guaranty" means the Guaranty Agreement of even date herewith
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executed by Guarantor for the benefit of Lender.
"Guarantor" means Grand Court Lifestyles, Inc.
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"Improvements" shall mean a certain 126 unit congregate,
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independent living and personal care facility to be located on the
Real Property.
"LIBOR Rate" means the one month London Interbank Offered Rate,
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reflected as the one-month LIBOR Rate on page 5 of the Telerate screen
or as published or quoted by such other reputable and nationally-
recognized rate quoting service or publication selected by Lender.
"Lien" means any lien, mortgage, security interest, tax lien,
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pledge, encumbrance, financing statement, or conditional sale or title
retention agreement, or any other interest in property designed to
secure the repayment of Debt or any other obligation, whether arising
by agreement, operation of law, or otherwise.
"Loan" means the loan in the original principal amount of Seven
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Million Three Hundred Thousand and No/100 Dollars ($7,300,000.00) made
or to be made by Lender pursuant to Section 2.01.
"Loan Commitment" means the Construction Loan Commitment relating
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to the Loan dated November 25, 1996, accepted by Borrower on December
13, 1996.
"Loan Documents" means, without limitation, this Agreement, the
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Loan Commitment, the Note, the Deed of Trust, the Absolute Assignment,
the Collateral Assignment, the Guaranty, the Environmental Indemnity,
and all other promissory notes, deeds of trust, assignments, financing
statements, easements, security agreements and other instruments,
documents, and agreements executed either by Borrower or by Guarantor,
or both, as the case may be, and delivered pursuant to or in
connection with this Agreement, as such instruments, documents, and
agreements may be amended, modified, renewed, extended, or
supplemented from time to time and in accordance with their respective
terms.
"Maturity Date" means thirty-six months from the date hereof
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subject to the two (2) Extension Options provided for in the Loan
Commitment.
"Maximum Rate" means the maximum rate of nonusurious interest
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permitted from day to day by applicable law, including Article 5069-
1.04, Vernon's Texas Civil Statutes (and as the same may be
incorporated by reference in other Texas statutes), but otherwise
without limitation, that rate based upon the "indicated rate ceiling"
and calculated after taking into account any and all relevant fees,
payments and other charges in respect to the Loan Documents which are
deemed to be interest under applicable law.
"Net Income" means the net income from normal operations of the
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Project (excluding extraordinary income and expense and before income
taxes applicable to such Project, but after all property taxes and
other taxes applicable to the Project without deduction for actual
management fees paid) and based upon average revenue per unit and an
occupancy rate of not more than ninety-five percent (95%), as set
forth in the quarterly financial information provided to Lender under
the Loan Documents, calculated based upon the preceding calendar
quarter, plus interest expense paid or incurred with respect to the
Loan for such period and non-cash expenses or allowances for
depreciation or amortization of the Project for such period, less the
greater of actual management fees or assumed management fees of four
percent (4%) of total resident revenues for such preceding calendar
quarter.
"Note" means the recourse Promissory Note executed by Borrower of
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even date herewith in the amount of the Loan payable to the order of
Lender, and all extensions, renewals, and modifications thereof.
"Notice" means the Notice Pursuant to Section 26.02, Texas
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Business and Commerce Code by Borrower and Guarantor in favor of
Lender of even date herewith.
"Obligations" means (i) all amounts, including, without
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limitation, principal and interest, due or becoming due under the
Note; (ii) any and all costs or sums due and owing or to become due
and owing under any of the Loan Documents; (iii) any renewal or
extension of the indebtedness or costs described in (i) through (ii)
preceding or any part thereof; and (iv) all covenants, agreements and
undertakings of the Borrower to the Lender hereunder or under any of
the Loan Documents.
"Person" means any individual, corporation, business trust,
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association, company, partnership, joint venture, or other entity.
"Personality" means all equipment, furnishings, furniture and all
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tangible and intangible personal property of whatever character now
owned or hereafter acquired by Borrower for use in, on or about the
Project, including replacements, substitutions and after acquired
property.
"Plans and Specifications" means the final plans and
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specifications for the Improvements signed and dated by Borrower and
certified by the Project Architect (with the seal of such Project
Architect affixed).
"Pledge of Deposit Account" means the Pledge of Deposit Account
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by Borrower in favor of Lender of even date herewith, as same may be
amended, supplemented or modified from time to time.
"Project" means the Improvements, the Real Property, and the
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Personalty.
"Project Architect" means Xxxxxx Xxxxxx Associates, Inc.
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"Project Architect's Acknowledgement" means the Acknowledgement
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of Assignment of Agreement and Subordination Agreement executed by the
Project Architect in favor of Lender.
"Property Manager" means Grand Court Lifestyles, Inc., a Delaware
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corporation, 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx
00000.
"Property Manager's Acknowledgement" means the Acknowledgement of
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Assignment of Management Agreement and Subordination Agreement
executed by the Property Manager in favor of the Lender.
"Property Revenues" means all income, revenues, profits,
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distributions and funds from any source whatsoever which derive
directly or indirectly from the Project.
"Real Property" means the real property located in Temple, Xxxx
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County, Texas, as more fully described on Exhibit A, attached hereto
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and incorporated herein by reference for all purposes.
"Second Extended Maturity Date" means forty-eight (48) months
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from the date hereof.
"Second Extended Period" means the six month period commencing on
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the First Extended Maturity Date and ending on the Second Extended
Maturity Date.
"Title Agent" means Xxxxxxx Title Guaranty Company.
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"Title Company" means Xxxxxxx Title Guaranty Company.
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"Title Policy" means the Mortgagee Policy of Title Insurance
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described in Section 5.01(o) hereof.
Section 1.02. Other Definitional Provisions. All definitions
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contained in this Agreement are equally applicable to the singular and
plural forms of the terms defined. The words "hereof", "herein", and
"hereunder" and words of similar import referring to this Agreement refer
to this Agreement as a whole and not to any particular provision of this
Agreement. Unless otherwise specified, all Article and Section references
pertain to this Agreement. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP.
ARTICLE II
Loan
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Section 2.01. Loan: Advances. Subject to the terms and conditions of
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this Agreement, Lender agrees to make the Loan to Borrower in Advances
strictly in accordance with this Agreement as follows:
(a) The Loan proceeds shall be disbursed by Lender no more
frequently than once monthly during the course of the construction of
the Improvements in accordance with the terms herein and the other
Loan Documents.
(b) Lender shall be furnished with a detailed construction
disbursement schedule in a form satisfactory to Lender, and
disbursements shall be made under the procedures and title safeguards
reasonably acceptable to Lender. Borrower shall open a special bank
account, of a type acceptable to Lender, with Lender into which all
Loan proceeds shall be disbursed ("Disbursement Account") which shall
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be pledged to Lender pursuant to the Pledge of Deposit Agreement;
provided, however, if funding the Loan proceeds into such Disbursement
Account, in Lender's sole judgment, puts the Title Policy coverage at
risk, the disbursements of the proceeds of the Loan shall be made by
and through the Title Company.
(c) Disbursements shall be made only after notice is given to
Lender five (5) Business Days prior to the requested date for each
such disbursement and in the draw request form attached hereto and
incorporated herein by reference for all purposes as Schedule 1. Such
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form shall be accompanied by an Affidavit of Bills Paid in the form
attached hereto and incorporated herein by reference for all purposes
as Schedule 2, and, if required by Lender, a Partial Release of Lien
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in the form attached hereto and incorporated herein by reference for
all purposes as Schedule 3, executed by the General Contractor and
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each subcontractor who has received payments in excess $10,000.00.
Disbursement requests shall be submitted by Borrower on AIA forms for
review and approval of the Construction Inspector. All disbursements
must conform to the Budget for the materials and/or services covered
by such disbursement request; no variances will be permitted without
Lender's prior written approval.
(d) Bills or statements for all expenses for which a
disbursement is requested shall, at Lender's option, be presented to
Lender along with the request for disbursement. All requests for
disbursement shall include certification by Borrower, the General
Contractor, the Project Architect and the Construction Inspector that
all labor and material for which disbursement is requested have gone
into the construction of the Improvements according to the approved
Plans and Specifications and that the remaining undisbursed portion of
the Loan and the funds on deposit are adequate to complete the
construction of the Improvements on the Real Property.
(e) Unless otherwise approved by Lender, no disbursements of the
proceeds shall be made if the Loan is not current or an Event of
Default exists, or an event exists which with the passage of time or
notice or both would constitute an Event of Default. Lender shall not
be obligated at any time to disburse proceeds of the Loan in excess of
the Budget or that recommended by the Construction Inspector nor shall
the Lender be obligated to disburse proceeds of the Loan for materials
stored off of the Project. As a condition of each draw, Lender must
be satisfied that sufficient funds are available to complete the
Improvements.
(f) All interim disbursements of Loan proceeds for construction
work shall be subject to a ten percent (10%) retainage requirement;
provided there shall be no retainage for direct materials purchases.
(g) Each disbursement must be accompanied by an endorsement to
the Title Policy, obtained by Borrower at Borrower's sole expense, so
that the coverage reflects the amounts that have been advanced.
(h) Final disbursement, to the General Contractor, including
retainage, shall be subject to and conditioned upon Lender having
secured the following (i) a certificate of occupancy for the
Improvements from the appropriate governmental agency if such
certificate is deemed necessary by Lender, in its sole discretion;
(ii) a certificate of completion prepared and submitted by the
Borrower and the Project Architect, and approved by the Construction
Inspector, which certificate shall contain only such qualifications as
are acceptable to Lender, in Lender's sole discretion, and indicating
that the construction of the Improvements has been completed
substantially in accordance with the approved Plans and
Specifications, all construction has been completed in a good and
workmanlike manner, all applicable zoning, building, or other
governmental codes or regulations have been complied with, there are
no known structural deficiencies, and all mechanical equipment,
including, without limitation, plumbing, air conditioning and heating,
electrical, and kitchen equipment, if any, is in good working order;
(iii) a certificate of completion executed by the General Contractor
and filed in the Real Property Records of Xxxx County, Texas; (iv) an
affidavit executed by the General Contractor satisfactory to Lender,
Lender's counsel and the Title Company in their sole discretion,
stating, among other things, that all work has been completed in
accordance with the Plans and Specifications approved by Lender; (v)
if required by Lender, lien waivers from any and all subcontractors,
in form and substance satisfactory to Lender, Lender's counsel and the
Title Company in their sole discretion; (vi) an "AS BUILT" survey of
the Project and (vii) such other additional documents as Lender may
reasonably request.
Section 2.02. The Note. The obligation of Borrower to repay the Loan
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shall be evidenced by the Note executed by Borrower, payable to the order
of Lender, in the principal amount of the Loan and dated of even date
herewith, and shall be full recourse to Borrower and Guarantor.
Section 2.03. Repayment of Loan. Interest shall be due and payable
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monthly, the first payment of which shall be due and payable on the first
(1st) day of the calendar month next following one (1) month from the date
hereof, and subsequent payments of interest shall be due and payable on the
same day of each month thereafter until the Maturity Date, as hereinafter
defined. All outstanding principal, plus accrued and unpaid interest at
the Contract Rate, shall be due and payable in one final balloon payment on
the Maturity Date.
Section 2.04. Interest. The unpaid principal amount of Advances on
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the Loan shall bear interest prior to maturity at a per annum rate equal to
the lesser of (i) the Maximum Rate or (ii) the Contract Rate.
Notwithstanding the foregoing, in the event that any payment on the Note is
more than thirty (30) days past due, all past due principal and interest
shall bear interest from the maturity date thereof until the date of
payment at the Default Rate.
Section 2.05. Use of Proceeds. The proceeds of the Loan shall be
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used for the sole purpose of financing the construction of the Improvements
on the Real Property and shall cover the items shown on the Budget annexed
as Exhibit C to the Loan Commitment.
Section 2.06. Late Payment Fee. A late payment equal to five percent
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(5.0% )of any past due payment will be payable by Borrower if any payment
on the Note is not received by the Lender within fifteen (15) days of its
due date.
Section 2.07. Extension.
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(a) Borrower shall have the right to extend the maturity of the
Loan for two consecutive six (6) month terms provided that at the time
of each extension request:
(i) the construction of Project has been completed, lien
free, in a manner satisfactory to and in accordance with the
Plans and Specifications approved by Lender;
(ii) No Event of Default then exists under any of the Loan
Documents;
(iii) An appraisal of the Project acceptable to Lender
shows that the outstanding principal balance of the Loan does not
exceed seventy-five percent (75%) of the appraised value of the
Project as completed.
(iv) Immediately prior to the First Extension Period, the
Project has achieved a minimum Debt Service Coverage Ratio of at
least 1.25 to 1.00, and immediately prior to the Second Extension
Period, the Project has achieved a minimum Debt Service Coverage
Ratio of at least 1.25 to 1.00; and
(v) Borrower shall have paid Lender an extension fee for
each extension in the amount of one half of one percent (0.5%) of
the outstanding principal balance of the Loan.
(b) In the event that Borrower qualifies for the First Extension
Period and elects to extend the Maturity Date as herein provided,
monthly payments of accrued, but unpaid interest, at the Contract Rate
shall continue to be due and payable on the first day of each month
commencing with the month next following the last scheduled monthly
payment during the original term of the Loan and successive payments
shall be due on the first day of each month thereafter until the First
Extended Maturity Date, when the unpaid principal balance of the Loan
and accrued, but unpaid interest, thereon shall be paid in full in one
final balloon payment unless Borrower qualifies for the Second
Extension Period and elects to extend the First Extended Maturity
Date.
(c) If Borrower qualifies for the Second Extension Period and
elects to extend the First Extended Maturity Date, monthly payments of
accrued, but unpaid interest at the Contract Rate shall continue to be
due and payable on the first day of each month commencing with the
month next following the last scheduled monthly payment of the First
Extended Loan Period and successive payments being due on the first
day of the month thereafter until the Second Extended Maturity Date,
when the unpaid principal balance of the Loan, an accrued but unpaid
interest thereon shall be paid in one final balloon payment.
(d) As a condition to such extensions, Borrower and Guarantor
shall execute such amendments, notes, documents, agreements and
instruments as Lender reasonably deems necessary to extend the
maturity of the Loan, and Borrower shall cause the Title Company to
endorse the Title Policy to reflect the extended maturity of the Loan,
such endorsement to be in form reasonably satisfactory to Lender. If
an endorsement is not available, Borrower shall obtain a new Title
Policy for Lender, in form satisfactory to Lender. Borrower shall pay
all reasonable costs incurred by Lender in connection with such
extension, including reasonable attorney's fees, and shall pay all
Title Company charges and premiums.
ARTICLE III
Payments
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Section 3.01. Method of Payment. All payments of principal,
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interest, and other amounts to be made by Borrower hereunder and under the
Note shall be made to Lender at its office at 0000 Xxxxxxxxx Xxxxxxx, Xxxxx
0000, X.X. Xxx 0000, Xxxxxxx, Xxxxx 00000-0000, Attention: Commercial Loan
Servicing, in lawful money of the United States of America and in
immediately available funds. Whenever any payment hereunder or under the
Note shall be stated to be due on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and interest shall
continue to accrue during such extension.
Section 3.02. Prepayment. Borrower shall have the right to prepay,
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at any time and from time to time without premium or penalty, the entire
unpaid principal balance of the Note or any portion thereof, with accrued
interest to the date of prepayment on the amounts prepaid.
Section 3.03. Insurance and Tax Escrow. So long as Borrower is
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maintaining insurance in types and amounts required hereunder and paying
the ad valorem taxes as such taxes come due and providing Lender with
evidence of such insurance and the payment of such taxes, no insurance and
tax escrow shall be required.
ARTICLE IV
Collateral
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Section 4.01. Collateral. To secure full and complete payment and
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performance of the Obligations, Borrower shall execute and deliver or cause
to be executed and delivered the documents described below covering the
property and collateral described in this Section (which, together with any
other property and collateral which may now or hereafter secure the
Obligations or any part thereof, is sometimes herein called the
"Collateral"):
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(a) Borrower shall grant to Lender a first priority lien and/or
security interest on the Real Property, Improvements and Personalty
pursuant to the Deed of Trust and shall assign to Lender all rents,
income, and profits relating to the Project pursuant to the Absolute
Assignment;
(b) Borrower shall collaterally assign and grant a first lien
security interest in, without limitation, all utility deposits,
security deposits (to the extent assignable and subject to the
tenants' rights to reimbursement under the tenant leases), tenant
leases, management agreements, construction contracts, architect
contracts and agreements, waste water capacity reservation agreements,
and any other contracts, licenses (including the DHS Licenses, to the
extent assignable), permits, architects and engineering contracts, and
agreements pertaining to the Project pursuant to the Collateral
Assignment or such other instruments as Lender may require;
(c) Guarantor will guarantee severally the repayment of the
entire indebtedness of Borrower to Lender, and the performance by
Borrower of all of Borrower's obligations to Lender under the Loan
Documents evidencing or securing the Loan pursuant to the Guaranty;
(d) Borrower shall pledge to Lender the funds advanced to the
Disbursement Account pursuant to the Pledge of Deposit Account; and
(e) Borrower shall execute and cause to be executed such further
documents and instruments, including without limitation, Uniform
Commercial Code financing statements, necessary to evidence and
perfect Lender's liens and security interests as herein described, in
the Collateral.
Section 4.02. Setoff. Upon the occurrence of an Event of Default,
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Lender shall have the right to set off and apply against the Obligations in
such manner as Lender may determine, at any time and without notice to
Borrower, any and all deposits (general or special, time or demand,
provisional or final) or other sums at any time credited by or owing from
Lender to Borrower whether or not the Obligations are then due. As further
security for the Obligations, Borrower hereby grants to Lender a security
interest in all money, instruments, and other property of Borrower now or
hereafter held by Lender, including, without limitation, property held in
safekeeping. In addition to Lender's right of setoff and as further
security for the Obligations, Borrower hereby grants to Lender a security
interest in all deposits (general or special, time or demand, provisional
or final) and other accounts of Borrower now or hereafter on deposit with
or held by Lender and all other sums at any time credited by or owing from
Lender to Borrower. The rights and remedies of Lender hereunder are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which Lender may have; provided, however that with
respect to security deposits by tenants or residents, the foregoing is
subject to the residents' or tenants' rights to reimbursement under the
tenants' or residents' leases.
ARTICLE V
Conditions Precedent
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Section 5.01. Loan. In addition to the conditions of Lender's
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obligation to make the Loan set forth in the Loan Commitment, the
obligation of Lender to make advances under the Loan is subject to the
condition precedent that Lender shall have received all of the following,
each dated as of the Closing Date (unless otherwise indicated) and in form
and substance satisfactory to Lender:
(a) Resolutions. Borrower shall have delivered to Lender a
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resolution of Borrower certified by its secretary or assistant
secretary which authorizes the execution, delivery, and performance by
Borrower of this Agreement and the other Loan Documents to which
Borrower is or is to be a party and a resolution of the Guarantor
authorizing the execution, delivery and performance by the Guarantor
of the Guaranty and the other Loan Documents to which Guarantor is a
party. The Resolutions shall designate (i) the officers of the
Borrower and Guarantor which are authorized to sign the Loan Documents
and (ii) the officers of Borrower which are authorized to request and
receive advances under the Loan, together with specimen signatures of
such officers,
(b) Incumbency Certificates. Borrower shall have delivered to
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Lender certificates of incumbency certified by the respective
secretary or assistant secretary of Borrower and Guarantor certifying
the names of the officers of Borrower and Guarantor authorized to sign
this Agreement and each of the other Loan Documents to which Borrower
and/or Guarantor is to be a party (including the certificates
contemplated herein) together with specimen signatures of such
officers.
(c) Regulations; Articles of Organization and Bylaws. Borrower
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shall have delivered to Lender: (i) Borrower's Articles of
Organization and Regulations, and all amendments thereto, (ii)
certified copies of the Articles of Incorporation of Guarantor,
together with all amendments thereto and (iii) the bylaws of
Guarantor, together with all amendments thereto, all of the foregoing
certified by the Secretary or Assistant Secretary of Borrower or
Guarantor, as applicable, and (iv) certified copies of existence for
Borrower and Guarantor, certified copies of good standing for Borrower
and Guarantor and a certified copy of Guarantor's qualification to do
business in Texas (all of the above dated within ten (10) days prior
to the Closing Date).
(d) Loan Agreement. The Borrower shall have executed and
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delivered this Agreement to the Lender.
(e) Note. Borrower shall have executed and delivered the Note
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to Lender.
(f) Absolute Assignment. Borrower shall have executed and
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delivered the Absolute Assignment to Lender.
(g) Collateral Assignment. Borrower shall have executed and
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delivered the Collateral Assignment to Lender.
(h) Environmental Indemnity. Borrower and Guarantor shall have
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executed and delivered the Environmental Indemnity to Lender.
(i) Deed of Trust. Borrower shall have executed and delivered
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the Deed of Trust to Lender which shall grant a first lien on the
Project and a first and prior security interest in the Personalty.
(j) Financing Statements. Borrower shall have executed and
--------------------
delivered to Lender the Uniform Commercial Code financing statements
covering such Collateral as Lender may request.
(k) Notice. Borrower and Guarantor shall have executed and
------
delivered to Lender the Notice.
(l) Affidavits. Borrower shall have executed and delivered the
----------
Affidavit of Borrower, and Guarantor shall have executed and delivered
an Affidavit of Guarantor in form and substance satisfactory to
Lender.
(m) Guaranty. The Guarantor shall have executed and delivered
--------
the Guaranty to Lender.
(n) Pledge of Deposit Account. Borrower shall have executed and
-------------------------
delivered the Pledge of Deposit Account.
(o) Mortgagee Title Insurance Policy;. Simultaneously with the
---------------------------------
execution of this Loan Agreement, but before funding of the Loan,
Borrower, at Borrower's sole cost and expense, shall have caused to be
furnished to Lender, a Texas Mortgagee Policy of Title Insurance
issued by the Title Agent, as agent for the Title Company, in favor of
Lender pursuant to an insured closing protection letter satisfactory
to Lender showing a policy amount equal to the aggregate amount of the
Loan, insuring that the Lender has a valid first and prior lien
against the Real Property, and containing only such exceptions as
shall be approved by Lender and its legal counsel, provided that the
premium can be paid in installments as provided in Rule R-2(a) of the
Rules for Title Insurance promulgated by the Texas Board of Insurance.
Any exception in the Title Policy regarding restrictive covenants
shall be deleted or shall list such restrictive covenants and insure
that they will not affect the validity or priority of Lender's lien.
The standard pre-printed exception in the Title Policy regarding any
discrepancies, conflicts or shortages in area or boundary lines shall
be modified to read only "shortages in area." The standard pre-printed
exception regarding taxes shall be modified to read "Standby fees and
taxes for the year 1997 and subsequent years not yet due and payable."
The Title Policy may contain the standard pre-printed "pending
completion" and "pending disbursements" exceptions, and Borrower
shall, at Borrower's cost and expense, obtain endorsements to the
Title Policy as Advances are made so that the coverage reflects the
amounts that have been advanced under the terms of the Loan Documents.
The Title Policy shall also insure access to the Project from a
publicly dedicated street.
(p) Appraisal. Lender shall have received an MAI appraisal of
---------
the Project in form and substance satisfactory to Lender and conducted
by an appraiser selected by Lender. The appraisal shall show that the
Real Property and Improvements shall have a fair market value of at
least $9,730,000.00 as built in accordance with the approved Plans and
Specifications. The appraisal shall be commissioned by Lender, but
paid for by Borrower.
(q) Environmental Report. Borrower, at Borrower's sole cost and
--------------------
expense, shall have delivered to Lender an unqualified Phase I
environmental site assessment covering the Project which shall be in
form and substance satisfactory to Lender and which shall be conducted
by an environmental service firm selected by Lender or selected from
Lender's approved list of environmental service firms. Such
environmental assessment shall verify that the Project is free from
any Hazardous Materials and Hazardous Waste, as those terms are
defined by federal and state statutes, laws and regulations,
including, without limitation, asbestos and diesel fuel (as reflected
on the Phase I environmental assessment). Such environmental
assessment shall include a determination of "wetlands" status and
condition. Borrower shall provide Lender with evidence in form and
substance acceptable to Lender, in Lender's sole discretion,
indicating that any Hazardous Materials or Hazardous Waste previously
located on the Project have been properly disposed of in accordance
with all applicable laws and which satisfies the requirements of
Thrift Bulletin 16.
(r) Survey. Borrower, at Borrower's sole cost and expenses,
------
shall have provided Lender and Lender's counsel with originals of a
current staked survey ("Survey") of the Real Property and all
Improvements thereon, prepared by a professional engineer or
registered surveyor, acceptable to Lender and Title Company, in form
and substance satisfactory to Lender, dated within ninety (90) days of
the Closing Date, which survey shall satisfy the requirements of a
Category 1A land survey pursuant to the Texas Surveyor's Association
Standards for land surveys. The survey shall contain a certificate
which shall among other things contain the following information: (i)
metes and bounds description of the Real Property showing all corners
and points of course changes and/or marked with iron pins or rods; and
(ii) the location of all existing and proposed roads, highways and
streets adjoining the Real Property and access thereto and all
Improvements, encroachments, easements, drainage districts, utilities,
parking areas, rights of way, set-back lines, and other matters
located upon or affecting the Real Property. The Survey shall contain
a certification that the Real Property is not located in any flood
hazard area. The certificate shall be in form and substance acceptable
to Lender and Lender's counsel and shall be in favor of both the
Lender and the Title Company. The certificate must be acceptable to
the Title Company to delete the survey exception regarding shortages
in area from the Title Policy.
(s) UCC Search. Lender shall have received Uniform Commercial
----------
Code searches (which searches shall be ordered by Lender's counsel but
paid for by Borrower) showing no financing statements or other
documents or instruments on file against Borrower or any Guarantor in
the office of the Secretary of State of Texas and the UCC Records of
Xxxx County, Texas, or the counties where the Borrower or any
----
Guarantor reside, such search to be as of a date no more than ten (10)
days prior to the Closing Date.
(t) Opinion of Counsel. Borrower and Guarantor shall have
------------------
delivered to Lender favorable opinions of legal counsels to Borrower
and Guarantor in form, scope and substance satisfactory to Lender
acceptable to Lender, concerning all aspects of the Loan including,
without limitation, usury, doing business, due authorization,
legality, validity, enforceability, and binding effect of all required
Loan Documents.
(u) Financial Statements. Lender shall be provided with
--------------------
certified financial statements from Borrower, Guarantor (or J & B
Management Company) and the General Contractor in a form and only with
qualifications acceptable to Lender in Lender's sole discretion for
the years ending January 1, 1995 and January 31, 1996. Borrower and
Guarantor shall also provide Lender with their 1995 and 1996 income
tax returns, as filed with the Internal Revenue Services.
(v) Origination Fee. Borrower shall have paid to Lender an
---------------
origination fee in the amount of Seventy Three Thousand and No/100
Dollars ($73,000.00), which shall be fully earned, non-refundable, and
due and payable on the Closing Date.
(w) Project Architect Certificate. Lender shall have received
-----------------------------
letters from the Project Architect certifying that utilities are
available to the boundaries of the Real Property in amounts adequate
to serve the contemplated Improvements. In addition, the Project
Architect will certify that the Project complies with, or when built,
will comply with applicable zoning ordinances and other applicable
laws, and can be operated for the purposes for which the Project was
constructed, that all permits, licenses (to the extent obtainable
prior to the commencement of construction), and approvals have been
issued by the appropriate authorities, that all Improvements will be
constructed above the 100 year flood plain for the Real Property, and
that the budget submitted to and approved by Lender provides for all
sums necessary to complete the work called for in the Project
Architect's contracts with Borrower.
(x) Project Architect's Acknowledgement. Lender shall have
-----------------------------------
received the Project Architect's Acknowledgement executed by the
Project Architect.
(y) Property Manager's Acknowledgement. Lender shall have
----------------------------------
received the Property Manager's Acknowledgement executed by the
Property Manager.
(z) Affiliate Acknowledgement. Lender shall have received the
-------------------------
Affiliate's Acknowledgement executed by any affiliates of Borrower
that will provide services to the Project.
(aa) General Contractor's Acknowledgement. Lender shall have
------------------------------------
received the General Contractor's Acknowledgment executed by the
General Contractor.
(bb) Taxes, Assessments and Insurance. Lender shall have
--------------------------------
received evidence that all ad valorem taxes for 1996 and prior years
against the Project and all required insurance premiums for the first
year of the Loan shall have been paid in full.
(cc) Evidence of Available Capital. Lender shall have received
-----------------------------
evidence satisfactory to it that the Borrower has available a minimum
of $1,825,000.00 in capital in good funds, including equity in the
Real Property, which may immediately be expended for the development
and construction of the Project or the purchase of the Real Property
prior to the first advance of the Loan proceeds; provided, however,
that funds expended for the purchase of the Real Property may be
credited to the required equity contribution only to the extent of the
"AS IS" appraised value of the Real Property.
(dd) Soil Tests and Other Reports. Lender shall have been
----------------------------
furnished with a copy of the soil test reports, and all concrete and
steel stress reports and a letter of certification from the
Construction Inspector indicating that the soil conditions are
satisfactory for the construction of the Improvements in accordance
with the approved Plans and Specifications.
(ee) Availability of Utilities. Borrower shall have provided
-------------------------
Lender with letters from authorized officials of each governmental
entity or public utility providing any utility services to the
Project, including water, sewer, telephone, gas and electricity,
stating that such services will be made available to the Project
within the time required by the construction schedule in amounts
adequate to serve the Project after its completion in accordance with
the Plans and Specifications.
(ff) Plans and Specifications. Borrower, at Borrower's sole cost
------------------------
and expense, shall have provided Lender with two (2) complete sets of
final Plans and Specifications signed and dated by the Borrower and
certified by the Project Architect (and with his seals affixed).
The Plans and Specifications shall contain all certificates and
approvals required by all governmental authorities (including the DHS)
having jurisdiction over the Real Property and the construction of the
Improvements thereon, which Plans and Specifications shall have been
submitted to and approved by Lender prior to closing. Any material
deviation from the approved plans or specifications must be approved
by Lender in writing in advance of the issuance of any change orders.
(gg) Budget. Lender has been furnished with the Budget for the
------
construction of the Improvements approved by the Construction
Inspector and Lender. The Budget shall reflect all direct
construction costs and indirect and overhead items and shall include a
draw schedule in such detail as Lender may require and a schedule of
completion will be provided to Lender. The Budget shall be
substantially the same as the preliminary construction cost estimate
submitted in connection with the Loan Commitment. Cost savings in any
line item shall be transferred to the contingency reserve line item;
provided, however, that any savings in the interest line item shall be
credited to the "lease-up reserve." Following construction and
provided that Borrower is not in default under the Loan Documents, all
amounts in the contingency reserve shall be funded to Borrower.
(hh) Required Additional Funds. Borrower and Guarantor have
-------------------------
deposited in the Disbursement Account additional funds over and above
the Loan proceeds in an amount equal to any difference between (i) the
Loan amount plus the total of the paid receipts for permissible
development and construction costs of the Project approved by Lender
and paid by Borrower from Borrower's own funds and (ii) the final
approved cost (including, without limitation, a sufficient reserve for
the funding of interest) to be incurred in connection with the
acquisition and construction of the Project.
(ii) Construction Schedule. Lender shall have received and
---------------------
approved a detailed construction schedule showing a trade by trade
breakdown of the estimated periods of commencement and completion of
construction of the Improvements on the Real Property, which schedule
shall be confirmed in writing by the Project Architect and the General
Contractor, and approved by the Construction Inspector and Lender.
(jj) Construction Inspection. A statement has been provided by
-----------------------
the Construction Inspector to Lender stating that the Construction
Inspector has reviewed the Plans and Specifications and the cost
breakdown and that the proceeds of the Loan and the funds supplied
pursuant to Section 5.01(hh) above are adequate to complete the
construction of the Improvements on the Project. The appointment of a
Construction Inspector shall not place any duty or responsibility upon
Lender to inspect the Improvements or any obligation or liability upon
Lender regarding the quality of construction or the absence therefrom
of defects.
(kk) Lien Waivers. Borrower shall have delivered to Lender lien
------------
waivers and subordination of lien rights from the Project Architect,
the General Contractor and all subcontractors providing materials or
services to the Project prior to Closing.
(ll) Insurance Policies. Borrower shall have provided Lender
------------------
with certified copies of all insurance policies required by the Loan
Commitment and this Agreement, from companies satisfactory to Lender
showing Lender as loss payee and in amounts and with deductibles
acceptable to Lender, including, without limitation, policies of flood
insurance if the Project is situated in a "Flood Hazard Area".
(mm) Insurance Certificate. Lender shall have received a
---------------------
certificate from Borrower's or the General Contractor's insurance
carrier approved by Lender that indicates that the General Contractor
is covered by public liability and xxxxxxx'x compensation insurance,
in amounts acceptable to Lender in Lender's sole discretion.
(nn) Itemized Statement. Borrower shall have provided Lender
------------------
with (i) an itemized statement certified by Borrower of all costs and
expenses incurred by Borrower in connection with the acquisition of
the Real Property through the Closing Date and (ii) and a copy of
Borrower's fully executed contract for the purchase of the Real
Property.
(oo) Closing Statement. Borrower shall have delivered to Lender
-----------------
a closing statement executed by Borrower and Seller, if the Real
Property is acquired at closing and a non-foreign person certificate
from Seller.
(pp) Estoppel Certificate. Borrower shall have delivered to
--------------------
Lender an estoppel certificate and/or pay off letter from every
individual and entity holding a lien on the Real Property and/or
Improvements thereon. The certificate shall be signed by the
lienholder and shall indicate the present unpaid balance of the lien
including accrual interest to the proposed Closing Date, the daily
rate of accrual after such date, and the amount required to satisfy
and release the lien as of the proposed Closing Date. In the
alternative, Borrower shall certify to Lender that there are no liens
against the Property and/or Improvements as of the Closing Date.
(qq) Zoning Compliance. Borrower shall provide Lender with a copy
-----------------
of the applicable zoning ordinances, certified by an appropriate
municipal or county official to be a complete and accurate statement
therefore and written certification by said municipal or county
official setting forth the zoning classification of the Real Property
and stating that the contemplated Improvements and use thereof comply
with all applicable zoning ordinances. If such certification is not
available, Borrower shall provide such evidence of zoning as may be
acceptable to Lender.
(rr) Construction Contracts. Lender shall have received and
----------------------
approved a fixed cost contract with the General Contractor for the
construction of the Improvements on the Real Property covering the
items shown on the Budget, showing all direct construction costs and
indirect and overhead items. The General Contractor must be
acceptable to Lender. The General Contractor's contract shall be
subordinated to Lender and its liens. Borrower will not agree or
consent to any material amendment thereto without Lender's prior
written consent. Borrower shall also furnish to Lender, for Lender's
approval, financial statements of the General Contractor.
(ss) Payment and Performance Bond. Borrower shall provide Lender
----------------------------
with a performance and payment bond by a surety company acceptable to
Lender covering the General Contractor on the Project (and any
subcontractor for major structural components of the Project) for not
less than the cost of the construction contract and naming Lender as a
dual obligee. The dual obligee rider shall provide: "The Contractor
and Surety shall not be liable under this bond to the Owner or Lender
unless the said obligee, or either of them, shall make payments to the
Contractor in accordance with the terms of said Contract as to
payment, and shall perform all of the other obligations to be
performed under said Contract at the time and in the manner therein
set forth, provided that the obligations of Contractor and Surety
under said bond shall not be impaired unless Lender fails to cure any
default by Owner under the said Contract within a reasonable time
after Lender's receipt of written notice of said default." The bond
shall also provide that the surety waives notice of, and consents to,
changes in the construction contract, including changes in the plans
and specifications, to the extent any such changes do not increase the
contract price more than ten percent (10%).
(tt) Construction Permits. Borrower shall have provided Lender
--------------------
with certified copies of all necessary building and construction
permits, curb cut, sewer and water tap and other permits, licenses,
franchises and other agreements required for the development of the
Project, issued in the name of the Borrower.
(uu) Letter of Credit. Borrower shall deliver to Lender an
----------------
irrevocable letter of credit ("Letter of Credit") issued by Sterling
National Bank and Trust Company of New York in favor of Lender in the
amount of $730,000.00 which letter of credit shall be in form and
substance acceptable to Lender;
(vv) Additional Information. Borrower shall have delivered such
----------------------
additional documents, instruments, and information as Lender or
Lender's legal counsel may reasonably request.
Section 5.02. Interim Advances:Continuing Conditions to the Lender's
------------------------------------------------------
Obligations to Make Loan Advances. Lender shall not be obligated to make
---------------------------------
any Advances hereunder unless and until each and every one of the
conditions set forth in Sections 2.01 and 5.01 hereof (which shall
---- ----
constitute continuing conditions for all Advances hereunder) and the
following further conditions shall have been satisfied (with proof thereof
in form and sufficiency as may be requested by Lender):
(a) No Event of Default. No Event of Default or any condition
-------------------
which with the passage of time or notice or both would constitute an
Event of Default shall exist hereunder or under any other Loan
Document.
(b) Compliance with Covenants. Borrower shall be in substantial
-------------------------
compliance with all covenants hereunder and under the other Loan
Documents.
(c) No Breach of Representations and Warranties. No breach of
-------------------------------------------
any representation or warranty of the Borrower or Guarantor hereunder
or under any of the Loan Documents shall have occurred.
(d) Adequate Funds. Borrower and Guarantor shall have proved
--------------
to Lender's satisfaction that sufficient funds are available to
complete the Improvements according to the plans and specifications.
(e) Inspection Reports. The Borrower, at the Borrower's sole
------------------
cost and expense, shall provide to the Lender an inspection report
from the Construction Inspector covering the stage of construction and
the condition of the Project, including the structure, roofing,
mechanical systems and electrical systems, the results of which report
shall be acceptable to Lender.
(f) Mortgagee Policy. The Borrower, at Borrower's sole cost and
-----------------
expense, will obtain endorsements to the original Title Policy so that
the coverage reflects the amount of the Advances made under the Loan
Documents.
(g) Notice of Commencement. Prior to commencement of
-----------------------
construction of the Project, Borrower shall deliver a Notice of
Commencement of Construction to Lender.
(h) Lien Waivers. If required by Lender, Borrower shall have
------------
delivered to Lender lien waivers and subordination of lien rights from
the General Contractor, Project Architect, and all subcontractors (who
have received or are owed payments in excess of $10,000.00) providing
materials or services to the Project.
(i) Inventory. Upon completion of the Improvements, Borrower
---------
shall have provided Lender with an inventory of the fixtures and
personal property owned by Borrower and purchased with any Loan
proceeds used in the maintenance, management and operation of the
Project, accompanied by a certification from Borrower that said
listing is a true and correct schedule of all fixtures and personal
property used in the maintenance, management and operation of the
Project, that such items constitute all of the fixtures and Personal
Property required in the maintenance, management and operation of the
Project, and that all such items are owned by Borrower free and clear
of any lien or security interest except that created by the Loan
Documents.
(j) Contracts. Within ten (10) days from the date of closing or
----------
in any case prior to the commencement of construction, Borrower shall
have provided Lender with fully executed counterparts of all
construction and design related contracts (together with all
amendments and modifications thereto) with the Project Architect and
any other person or entity relating to the construction of the
Improvements, which contracts shall be subordinated to Lender and its
liens. Borrower will not agree or consent to any material amendment
thereto without Lender's prior written consent. The contracts,
together with the identity of the Project Architect, Construction
Inspector and any other person or entity relating to the construction
of the Improvements shall have been previously approved by Lender in
writing.
(k) Certified Rent Roll. Following completion of the
-------------------
Improvements, Borrower shall have provided a certified rent roll to
the Lender covering the Project.
(l) Management and Lease Agreements. On or prior to the
-------------------------------
completion of the Improvements, Borrower shall have provided Lender
with a copy of the proposed Management Agreement, with any and all
amendments thereto, for the Project and form lease agreement covering
units in the Project, which agreements shall be in form and substance
satisfactory to Lender. The Management Agreement shall provide for a
fee not to exceed five percent (5%) of monthly collections and shall
provide for termination for cause on thirty (30) days notice and
shall further provide that in the event of foreclosure of the Project
by Lender or its assignee, Lender or its assignee shall have the right
to immediately terminate the Management Agreement without penalty.
(m) DHS Licenses. As soon as reasonably possible after the date
------------
that the Improvements are completed, Borrower shall provide Lender
will copies of all applicable DHS Licenses and other licenses
necessary for the operation of the Project.
(n) Other Documentation. If requested by the Lender, the
-------------------
Borrower shall have furnished to the Lender any other additional
documents as Lender may reasonably request.
Section 5.03. Final Disbursement. The final disbursement of the
------------------
Loan, including retainage, shall be subject and conditioned upon all
conditions for Advances set forth in Sections 2.01, 5.01 and 5.02 being
satisfied.
Section 5.04. Waiver of Conditions. Lender may defer any of the
--------------------
foregoing conditions to the Loan and Term Loan, and the fact that all of
the conditions may not have been satisfied at the time Lender executes this
Loan Agreement or advances any funds pursuant to the Loan or Term Loan
shall in no circumstances be considered evidence that Lender has waived any
of such conditions. Any waiver of such conditions must be in writing.
ARTICLE VI
Representations and Warranties
------------------------------
To induce Lender to enter into this Agreement, Borrower represents and
warrants to Lender that:
Section 6.01. Existence and Authority. Borrower is a Texas limited
-----------------------
liability company duly organized and validly existing under the laws of the
State of Texas; Borrower (a) has all requisite power to own assets and
carry on its business as now being or as proposed to be conducted; and (b)
is qualified to do business in all jurisdictions in which the nature of its
business makes such qualification necessary and where failure to so qualify
would have a material adverse effect on its business, financial condition,
or operations. Borrower has the power and authority to execute, deliver,
and perform its obligations under this Agreement and the other Loan
Documents to which it is or may become a party.
Section 6.02. Financial Statements. Borrower has delivered to Lender
--------------------
certain financial statements of Borrower and the Guarantor. The financial
statements are true and correct, have been prepared in accordance with
GAAP, and fairly and accurately present the financial condition of Borrower
and, to the best of Borrower's knowledge, the Guarantor as of the date
indicated therein and the results of operations for the period indicated
therein. Borrower does not have any material contingent liabilities,
liabilities for taxes, material forward or long-term commitments, or
unrealized or anticipated losses from any unfavorable commitments not
reflected in such financial statements. No material adverse change in the
condition, financial or otherwise, or operations of Borrower has occurred
since the effective date of the most recent financial statement referred to
in this Section.
Section 6.03. Default. Borrower is not in default in any respect
-------
under any loan agreement, indenture, mortgage, security agreement, or other
agreement or obligation to which it is a party or by which any of its
properties may be bound.
Section 6.04. Authorization and Compliance with Laws and Material
---------------------------------------------------
Agreements. The execution, delivery, and performance by Borrower of this
----------
Agreement and the other Loan Documents to which Borrower is or may become a
party have been duly authorized by all requisite action on the part of
Borrower and do not and will not violate the organizational agreements of
Borrower or any law or any order of any court, governmental authority, or
arbitrator, and do not and will not conflict with, result in a breach of,
or constitute a default under, or result in the imposition of any Lien upon
any assets of Borrower pursuant to the provisions of any indenture,
mortgage, deed of trust, security agreement, franchise, permit, license, or
other instrument or agreement by which Borrower is bound.
Section 6.05. Litigation and Judgments. There is no action, suit,
------------------------
or proceeding before any court, governmental authority, or arbitrator
pending, or to the knowledge of Borrower, threatened against or affecting
Borrower or the Guarantor that would, if adversely determined, have a
material adverse effect on the financial condition or operations of
Borrower or the Guarantor or the ability of Borrower or the Guarantor to
pay and perform the Obligations. There are no outstanding judgments against
Borrower or the Guarantor.
Section 6.06. Rights in Properties; Liens. Borrower has good and
---------------------------
indefeasible title to or valid leasehold interests in its properties and
assets, real and personal reflected in the financial statements described
in Section 6.02, and none of the properties, assets, or leasehold interests
of Borrower is subject to any Lien, except as shown thereon.
Section 6.07. Enforceability. This Agreement constitutes, and the
--------------
other Loan Documents to which Borrower is party, when delivered, shall
constitute the legal, valid, and binding obligations of Borrower,
enforceable against Borrower in accordance with their respective terms,
except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditor's rights.
Section 6.08. Approvals. No authorization, approval, or consent of,
---------
and no filing or registration with, any court, governmental authority, or
third party is or will be necessary for the execution, delivery, or
performance by Borrower of this Agreement and the other Loan Documents to
which Borrower is or may become a party or the validity or enforceability
thereof.
Section 6.09. Taxes. Borrower has filed all tax returns (federal,
-----
state, and local) required to be filed, including all income, franchise,
employment, property, and sales taxes, and has paid all of its tax
liabilities, and Borrower has no knowledge of any pending but unassessed
tax liability of Borrower.
Section 6.10. Disclosure. No representation or warranty made by
----------
Borrower in this Agreement or in any other Loan Document contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements herein or therein not misleading. There is
no fact known to Borrower which has a material adverse effect or which can
have a material adverse effect on the business, assets, financial
condition, or operations of Borrower that has not been disclosed in writing
to Lender.
Section 6.11. Principal Place of Business. The principal place of
---------------------------
business and chief executive office of Borrower and the place where
Borrower keeps its books and records is located at the address set forth in
Section 10.09.
Section 6.12. Other Agreements. Borrower is not a party to, or bound
----------------
by any agreement, condition, contract, or arrangement which might in the
future have a material adverse effect on the business, operations, or
financial condition of Borrower.
Section 6.13. Compliance with Law. Borrower is in compliance with
-------------------
all laws, rules, regulations, orders, and decrees which are applicable to
Borrower or any of its properties.
Section 6.14. No Work. Prior to the recording of the Deed of Trust,
-------
no work on the Project shall be commenced, and no materials or equipment
shall be delivered to or upon the Project.
Section 6.15. Forfeiture. Neither Borrower nor any Guarantor is or
----------
has been charged with or, to their knowledge, are under investigation for,
possible violations of the Racketeering, Influenced and Corrupt
Organizations Act ("RICO"), the Continuing Criminal Enterprises Act
("CCE"), the Controlled Substance Act of 1978, the Money Laundering Act of
1986, the AntiDrug Abuse Act of 1986, or similar law providing for the
possible forfeiture of any of their respective assets or properties.
Section 6.16. Contracts. The Contracts as presented to Lender,
---------
include all amendments and modifications to the Contracts.
Section 6.17. DHS Requirements. The Improvements will be
----------------
constructed in accordance with all applicable DHS requirements. Upon
completion of the Improvements, the Borrower will operate the Project in
accordance with all applicable DHS rules and regulations. Borrower shall
promptly notify Lender of any notices or other correspondence received from
the DHS or any other governmental entity indicating that the Project is not
in compliance with DHS rules and regulations. Borrower shall take all
action necessary to maintain its DHS Licenses and shall take prompt action
to renew its DHS Licenses each year. Borrower shall provide Lender with
copies of all renewal DHS Licenses upon receipt.
ARTICLE VII
Positive Covenants and Agreements
---------------------------------
Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or Lender has any commitment hereunder,
Borrower will perform and observe the following positive covenants and
agreements, unless Lender shall otherwise consent in writing (which consent
may be conditioned upon the payment of a consent fee or an increase in the
interest rate on the Note).
Section 7.01. Financial Statements.
--------------------
(a) Guarantor shall furnish management prepared financial
statements to Lender for each fiscal quarter which statements shall be
due thirty (30) days after the end of each fiscal quarter.
Following completion of the Project, monthly operating statements
shall be due from Borrower within thirty (30) days of the end of each
month. Guarantor shall also furnish to Lender audited annual
financial statements beginning with the fiscal year ending January 31,
1997, containing balance sheets (reflecting, without limitation, all
contingent liabilities), income statements and statements of changes
in financial position (reflecting, without limitation, cash flow
changes) as at the end of such fiscal year and for the 12-month period
then ended, in each case setting forth in comparative form the figures
for the preceding fiscal year. All financial statements will be
prepared in reasonable detail, and all of the above prepared in
accordance with GAAP, consistently followed and applied and containing
only qualifications acceptable to Lender, in Lender's sole discretion.
Guarantor's and Borrower's financial statements shall be prepared by
the authorized officers of each familiar with and knowledgeable of the
information therein presented and responsible for the supervision of
the preparation of said financial statements for Borrower and
Guarantor. Borrower's financial statements shall be accompanied with
compiled accounts payable information and such other financial
information as Lender shall request.
(b) Within sixty days after the filing of Borrower's tax return,
Borrower shall furnish Lender with a copy of Borrower's United States
income tax return as filed with the Internal Revenue Service, together
with any and all exhibits and schedules filed in connection therewith,
beginning with the tax year ending January 31, 1997, and continuing
annually thereafter.
(c) Within sixty days after the filing of Guarantor's tax
return, Borrower shall cause Guarantor to furnish Lender with a copy
of Guarantor's United States income tax return as filed with the
Internal Revenue Service, together with any and all exhibits and
schedules filed in connection therewith, beginning with the tax year
ending January 31, 1997, and continuing annually thereafter.
Section 7.02. Certificates; Rent Roll; Other Information. Borrower
------------------------------------------
shall furnish to Lender all of the following:
(a) Within thirty (30) days from the end of each month beginning
with the first month after the completion of construction, (i) a copy
of the rent roll of the Project reflecting, at a minimum, the names of
all tenants, terms of leases, base rents, security deposits and
renewal options, and (ii) operating statements for the Project, which
rent roll and operating statement shall be certified by an authorized
officer of Borrower as to their accuracy, completeness and
truthfulness; and
(b) Promptly, upon request by Lender, any additional information
concerning Borrower which Lender may reasonably request.
Section 7.03. Performance of Obligations. Borrower will duly and
--------------------------
punctually pay and perform the Obligations in accordance with their
respective terms.
Section 7.04. Preservation of Existence and Conduct of Business.
-------------------------------------------------
Borrower will preserve and maintain its limited liability company status
and all of its leases, privileges, franchises, qualifications, and rights
that are necessary or desirable in the ordinary conduct of its business,
and conduct its business as presently conducted in an orderly and efficient
manner in accordance with good business practices.
Section 7.05. Maintenance of Project. Borrower will maintain the
----------------------
Project in good condition and repair (ordinary wear and tear excepted).
Section 7.06. Payment of Taxes and Claims. Borrower will pay or
---------------------------
discharge at or before maturity or before becoming delinquent (i) all
taxes, levies, assessments, and governmental charges imposed on it or any
of its property, and (ii) all lawful claims for labor, material, and
supplies, which, if unpaid, might become a Lien upon any of its property;
provided, however, that Borrower shall not be required to pay or discharge
any tax, levy, assessment, or governmental charge which is being contested
in good faith by appropriate proceedings diligently pursued, and for which
adequate reserves have been established.
Section 7.07. Insurance. Before commencement of the construction of
---------
the Improvements, and at all times thereafter, Borrower will maintain (or
with respect to the all-builder's risk coverage cause General Contractor to
maintain) with financially sound and reputable insurance companies
reasonably acceptable to Lender, workmen's compensation insurance and
insurance on Borrower's property, assets, and business in such amounts, and
with deductibles, acceptable to Lender, and against such risks as required
by Lender, and as set forth in the Loan Commitment (including, without
limitation, all builder's risk coverage for the Improvements, hazard,
comprehensive general liability insurance and extended coverage), and
Borrower shall provide Lender with evidence satisfactory to Lender in
Lender's reasonable discretion of such insurance coverage. Hazards
covered, the amounts of such coverage and the carrier providing such
coverage must be approved by Lender in writing. Lender shall provide
Borrower with a list of the hazards to be covered and the amounts of such
coverage prior to closing. In the case of hazard insurance and all
builder's risk, such insurance shall at least be in an amount equal to the
lesser of hundred percent (100%) of the full insurable value of the
insurable portion of the Improvements or an amount equal to the Loan
amount. All insurance policies shall be issued by insurers with a Best's
rating of not less than A+ and a financial size category of at least VII,
unless otherwise agreed by Lender. Each insurance policy covering
Collateral shall name Lender (or the holder of the Note) as a loss payee
subject to a mortgagee clause (without contribution) of the standard form
attached to or otherwise made a part of the applicable policy, and shall
provide that the same shall not be canceled or modified without at least
thirty (30) days prior written notice to Lender. All insurance policies
and renewals thereof shall be in a form reasonably acceptable to Lender.
Lender shall have the right to hold the policies and Borrower shall
promptly furnish or cause to be furnished to Lender all renewal notices and
all receipts of paid premiums. At least fifteen (15) days prior to the
expiration date of a policy, Borrower shall deliver to Lender a renewal
policy in form reasonably satisfactory to Lender.
If any of the Improvements on the Project is in a "Flood Hazard Area",
Borrower shall provide Lender with a flood insurance policy in an amount
equal to the Loan amount or the maximum amount available under the Flood
Disaster Protection Act of 1973 and regulations issued pursuant thereto, as
may be amended from time to time, whichever is less, in form complying with
the "insurance purchase requirement" of the Act which shall contain a
mortgagee clause in favor of Lender.
Section 7.08. Inspection Rights. At any reasonable time and from
-----------------
time to time, Borrower will permit representatives of Lender to examine the
books and records of, and visit and inspect the properties of Borrower and
to discuss the business, operations, and financial condition of Borrower
with Borrower's officers and employees and with their independent certified
public accountants.
Section 7.09. Keeping Books and Records. Borrower will maintain
-------------------------
proper books of record and account in which full, true, and correct entries
in conformity with GAAP shall be made of all dealings and transactions in
relation to its business and activities.
Section 7.10. Compliance with Laws. Borrower will comply with all
--------------------
material applicable laws, rules, regulations, and orders of any court,
governmental authority or arbitrator.
Section 7.11. Compliance with Agreements. Borrower will comply in
--------------------------
all material respects with all material agreements, indentures, mortgages,
deeds of trust, and other documents binding on it or affecting its
properties or business.
Section 7.12. Notices. Borrower will promptly notify Lender of (i)
-------
the occurrence of an Event of Default, (ii) the commencement of any action,
suit, or proceeding against Borrower that might have a material adverse
effect on the business, financial condition, or operations of Borrower, and
(iii) any other matter that might have a material adverse effect on the
business, financial condition, or operations of Borrower.
Section 7.13. Further Assurances. Borrower will execute and deliver
------------------
such further instruments as may be deemed reasonably necessary or desirable
by Lender to carry out the provisions and purposes of this Agreement and
the other Loan Documents and to preserve and perfect the Liens of Lender in
the Collateral.
Section 7.14. Required Additional Funds. In order to assure Lender
-------------------------
that sufficient funds are available to pay all of the costs to be incurred
in the construction of the Improvements on the Real Property, Borrower will
if required by Lender deposit in the Disbursement Account with Lender
additional funds over and above the amount of the Loan in an amount equal
to the difference between (i) the amount of the Loan plus paid receipts
for permissible development and construction costs approved by Lender and
paid by Borrower from Borrower's own funds and (ii) the finally approved
total cost to be incurred in connection with the construction of the
Improvements on the Project (including, without limitation, a sufficient
reserve for funding of interest). Prior to the disbursement of any Loan
proceeds pursuant to a request for disbursement, Borrower and the Guarantor
shall provide Lender with evidence satisfactory to Lender, in Lender's sole
discretion, that sufficient funds are available to complete the
construction of the Improvements on the Real Property according to the
approved Plans and Specifications.
Section 7.15. Commencement of Construction; Completion Deadline.
-------------------------------------------------
Borrower will commence construction of the Improvements on the Project
within sixty (60) days from the Closing Date (but not prior to the Closing
Date). Borrower shall cause the construction to be pursued with reasonable
diligence. Borrower shall cause the Improvements to be completed in
accordance with the Plans and Specifications approved by Lender no later
than thirty-six (36) months from the Closing Date, regardless of whether
the proceeds of the Loan are sufficient for that purpose. Borrower shall
notify Lender by written notice of the date upon which construction has
commenced.
Section 7.16. Security Deposits. If, at any time during the term of
-----------------
the Loan, Lender deems itself insecure, Borrower will upon Lender's written
request, establish an escrow account with Lender into which all security
deposits received by Borrower in connection with leasing units in the
Project shall be deposited, subject to the rights of tenants to
reimbursement under the leases.
Section 7.17. Contracts. Borrower shall maintain all Contracts in
---------
full force and effect during the term thereof.
Section 7.18. Net Worth and Liquidity. At all times during the loan,
-----------------------
Guarantor shall maintain a net worth of $30,000,000.00 and liquidity of
$6,000,000.00.
Section 7.19. Ownership of Guarantor. Xxxx Xxxxxxx (50.0% owner) and
----------------------
Xxxxxxx Xxxxx (50.0% owner) shall maintain their current ownership
interests in Guarantor for the term of the Loan and all extensions thereof.
Notwithstanding the foregoing, the Guarantor may be taken public by the
issuance of stock and up to 49% of the ownership interests in the Guarantor
may be sold to the general public in such offering, but Xx. Xxxxxxx and Xx.
Xxxxx shall maintain no less than a 51% ownership interest in Guarantor.
Xx. Xxxxxxx and Xx. Xxxxx have joined in this Agreement individually for
the sole purpose of evidencing their consent to and agreement to be bound
by the requirements of this Section 7.19.
ARTICLE VIII
Negative Covenants
------------------
Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or Lender has any commitment hereunder,
Borrower will perform and observe the following negative covenants, unless
Lender shall otherwise consent in writing, which consent may be conditioned
upon the payment of a consent fee or an increase in the interest rate on
the Note):
Section 8.01. Debt. Except as otherwise herein provided under
----
Section 10.20, Borrower will not incur, create, assume or permit to exist
any Debt, except (i) Debt to Lender, and (ii) Debt that is not secured by
liens on the Project.
Section 8.02. Limitation on Liens. Except as otherwise herein
-------------------
provided, Borrower will not incur, create, assume, or permit to exist any
Lien (other than as contemplated by the Loan Documents) against the Project
without the Lender's prior written consent.
Section 8.03. Transactions With Affiliates. Except for the
----------------------------
Management Agreement, Borrower shall not enter into any transaction with
any director, officer, employee, or any Affiliate of Borrower, without the
express written approval of Lender, other than in the ordinary course of
its business and upon substantially the same or better terms as it could
obtain in an arm's length transaction with an entity or person who is not
an Affiliate of Borrower.
Section 8.04. Disposition of Project. Borrower will not sell, lease
----------------------
(other than to tenants in the ordinary course of business), assign,
transfer, or otherwise dispose of any of the Project, without the Lender's
prior written approval.
Section 8.05. Structure of Borrower. No change in the structure of
---------------------
Borrower or the Guarantor shall occur except as contemplated by Section
7.19 hereof without Lender's written approval.
Section 8.06. Distributions/Fees. Borrower shall not make any
------------------
distribution of Project revenues to any of its members until the
Improvements are completed (such completion to be evidenced by a
Certificate of Substantial Completion of the Project Architect and
confirmed by the Construction Inspector). Distributions are permitted
thereafter, so long as (i) no Event of Default exists at such time, or
would exist immediately thereafter, and (ii) the Borrower has complied with
Section 7.05 hereof.
Section 8.07. Management of the Project. The management agreement
-------------------------
approved by Lender can not be amended without Lender's approval.
Section 8.08. Lease Agreements. Borrower shall not enter into any
----------------
leases providing for the occupancy of any unit in the Project except for
tenant leases in substantially the form approved by Lender in writing.
Borrower shall not permit any amendment of the Leases except in the
ordinary course of business.
Section 8.09. Asbestos Containing Materials. Borrower will not
-----------------------------
permit the use of any product, floor covering, insulation, or paint that
contains asbestos in connection with the construction of the Improvements.
Section 8.10. Amendments to Contracts and Plans and Specifications.
----------------------------------------------------
Borrower will neither seek nor permit any further amendment to the
Contracts, or any of them, as approved by Lender, without prior written
consent of Lender. No material amendment or deviation shall be made to the
Plans and Specifications, and no change order shall be issued without the
prior written consent of Lender.
ARTICLE IX
Default
-------
Section 9.01. Events of Default. Each of the following shall be
-----------------
deemed an "Event of Default":
(a) Borrower shall fail to pay or perform when due the
Obligations or any part thereof, and such failure, shall continue for
ten (10) days following notice thereof from Lender.
(b) Any representation or warranty made by Borrower or Guarantor
in any Loan Document or in any certificate, report, notice, or
financial statement furnished at any time in connection with this
Agreement shall be false, incomplete or erroneous in any material
adverse respect when made.
(c) Unless otherwise specified herein, Borrower shall fail to
perform, observe, or comply in any material respect with any covenant,
agreement, or term contained in this Agreement or any other Loan
Document (other than the failure to make payment when due on the
Obligations or the failure to deliver any required renewal Letter of
Credit within the required time frames), and such failure shall
continue for thirty (30) days following notice thereof from Lender.
(d) Borrower shall commence a voluntary proceeding seeking
liquidation, reorganization, or other relief with respect to itself or
its debts under any bankruptcy, insolvency, or other similar law now
or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian, or other similar official of it or a
substantial part of its property or shall consent to any such relief
or to the appointment of or taking possession by any such official in
an involuntary case or other proceeding commenced against it or shall
make a general assignment for the benefit of creditors or shall
generally fail to pay its debts as they become due or shall take any
corporate action to authorize any of the foregoing.
(e) Borrower shall fail to contest and dismiss within a period
of ninety (90) days after the commencement thereof any involuntary
proceeding commenced against Borrower seeking liquidation,
reorganization, or other relief with respect to it or its debts under
any bankruptcy, insolvency, or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian, or other similar official for it or a substantial part of
its property.
(f) Borrower shall fail to discharge within a period of sixty
(60) days after the commencement thereof any attachment,
sequestration, or similar proceeding against the Project or Personalty
that will in Lender's sole discretion have a materially adverse impact
on the financial and business affairs of Borrower.
(g) Borrower shall fail to satisfy and discharge within ninety
(90) days after entry (but in any event prior to the commencement of
proceedings to enforce collection) of any final judgment or judgments
against it for the payment of money in an amount that will in Lender's
sole discretion have a materially adverse impact on the financial and
business affairs of Borrower.
(h) This Agreement or any other Loan Document shall cease to be
in full force and effect in a material respect or shall be declared
null and void or the validity or enforceability thereof shall be
contested or challenged by Borrower or Borrower shall deny that it has
any further liability or obligation under any of the Loan Documents.
(i) A material deterioration in the financial condition of
Borrower shall have occurred.
(j) Borrower shall default in any payment of principal or
interest due on any other recourse Debt beyond any grace period or
Borrower is made a party defendant to a law suit in which damages are
alleged equal to or in excess of $1,000,000 and such damages are not
covered by Borrower's liability insurance, or if dollar amounts are
not specifically pled in one or more of the claims for relief in any
such lawsuit, where Lender concludes that the exposure thereunder, if
the claims asserted were true, would equal or exceed $1,000,000, where
Lender determines that these damages will not be covered by Borrower's
liability insurance (provided that Lender's conclusion is not
arbitrary or capricious), or where the insurance deductible is greater
than $100,000.00 per casualty.
(k) Borrower shall admit in writing its inability to pay its
Debts as they become due.
(l) Borrower shall fail to discharge within a period of ninety
(90) days of the filing of any formal charges under federal or state
law for which forfeiture of Borrower's interest in the Project or the
granting of a lien against the Project, which lien is or could be
superior to any of Lender's liens against the Project, is a potential
penalty or remedy.
(m) Borrower fails to deliver a replacement Letter of Credit to
Lender in the amount of $730,000.00 (or such other amount as may be
approved by Lender) issued by a bank acceptable to Lender and in form
and substance acceptable to Lender at least thirty (30) days prior to
the expiration date of the original Letter of Credit or any
replacement Letter of Credit. (In the case of an Event of Default
under this Section 9.01(m), Lender shall not be required to give
Borrower any notice of an Event of Default prior to making a draw
under the Letter of Credit. In the case of an Event of Default under
this Section, Lender may draw on the Letter of Credit and provided
that no other Event of Default exists hereunder or under any other
Loan Document, Lender shall apply all proceeds thereof in payment of
the principal balance of the Note. Upon receipt of the proceeds of the
Letter of Credit, the default under this Section 9.01(m) shall be
deemed cured. If any other Event of Default then exists hereunder or
under any other Loan Document, Lender may draw on the Letter of Credit
and apply it to the payment of interest, principal and reasonable
expenses in such order as Lender may choose.)
Section 9.02. Remedies Upon Default. Upon the occurrence of an Event
---------------------
of Default, Lender may without notice terminate its obligation to lend
hereunder and declare the Obligations or any part thereof to be immediately
due and payable, and the same shall thereupon become immediately due and
payable, without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand,
protest, or other formalities of any kind, all of which are hereby
expressly waived by Borrower; provided, however, that upon the occurrence
of an Event of Default under Section 9.01(d) or Section 9.01(e), the
obligation of Lender to lend hereunder shall automatically terminate, and
the Obligations shall become immediately due and payable without notice,
demand, presentment, notice of dishonor, notice of acceleration, notice of
intent to accelerate, nor other formalities of any kind, all of which are
hereby expressly waived. Upon the occurrence of any Event of Default,
Lender may exercise all rights and remedies available to it in law or in
equity, under the Loan Documents, or otherwise. Upon the occurrence of any
Event of Default, Lender shall have the right to require Borrower to
replace the Property Manager, and to immediately deposit all security
deposits in an escrow account maintained with Lender subject to the rights
of tenants under tenant leases.
ARTICLE X
Miscellaneous
-------------
Section 10.01. Reimbursement of Expenses of Lender. Borrower and
-----------------------------------
Guarantor shall be severally liable for and hereby agree to pay Lender on
demand or if no demand is made within twenty (20) days following receipt of
an invoice therefor: (i) all reasonable costs and expenses incurred by
Lender in connection with the preparation, negotiation, and execution of
this Agreement and the other Loan Documents and any and all amendments,
modifications, renewals, extensions, and supplements thereof and thereto,
including, without limitation, the reasonable fees and expenses of Lender's
legal counsel, (ii) all reasonable costs and expenses incurred by Lender in
connection with the enforcement of this Agreement or any other Loan
Document, including, without limitation, the reasonable fees and expenses
of Lender's legal counsel, (iii) all other reasonable costs and expenses
incurred by Lender in connection with this Agreement or any other Loan
Document, including, without limitation, all costs, expenses, taxes
(excluding income taxes), assessments, filing fees, credit investigations,
and other charges levied by a governmental authority or otherwise payable
in respect of this Agreement or any other Loan Document or in obtaining any
mortgagee title insurance policy, endorsement, survey, environmental
report, or appraisal in respect of the Collateral, and (iv) all reasonable
costs and expenses incurred by Lender or Lender's agents relating to any
inspections of the Project and any audit of the books, records and
operations of Borrower and the Project, including independent analysts,
consultants, engineers, inspectors, auditors, and appraisers. The amounts
described herein shall be paid even if Borrower fails to satisfy the
conditions of Article V hereof and this Loan fails to fund as a result.
Lender shall not be required to pay any premium or other charge or any
brokerage fee or commission or similar compensation in connection with the
Loan unless the foregoing is asserted by, through or under Lender.
Section 10.02. Indemnification. Borrower hereby indemnifies Lender
---------------
and each affiliate thereof and their respective officers, directors,
employees, and agents from, and holds each of them harmless against, any
and all losses, liabilities, claims, damages, costs, and expenses to which
any of them may become subject, insofar as such losses, liabilities,
claims, damages, costs, and expenses arise from or relate to (i) any of the
Loan Documents or any of the transactions contemplated thereby, (ii) from
any investigation, litigation, or other proceeding, including, without
limitation, any threatened investigation, litigation, or other proceeding
relating to any of the foregoing, including the violation of any applicable
environmental law, rule or regulation, now or hereafter existing, that
affects the Project, but excluding any of the foregoing attributable to
Lender's gross negligence or willful misconduct, and (iii) the claims of
any and all brokers or anyone else claiming a fee by, through or under
Borrower in connection with arranging the financing herein described.
Section 10.03. Restatement. The delivery of each statement, report,
-----------
and certificate to Lender pursuant to this Agreement shall by virtue of
such delivery alone constitute a restatement of the representations and
warranties contained in Article VI hereof on and as of the date of
delivery. Each such delivery shall also constitute a representation and
warranty at the time of said delivery that no Event of Default has occurred
and is continuing.
Section 10.04. No Waiver; Cumulative Remedies. No failure on the
------------------------------
part of Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power, or privilege under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right, power, or privilege. The rights and remedies provided for in this
Agreement and the other Loan Documents are cumulative and not exclusive of
any rights and remedies provided by law.
Section 10.05. Successors and Assigns. This Agreement is binding
----------------------
upon and shall inure to the benefit of Lender and Borrower and their
respective successors and assigns, except that Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of Lender.
Section 10.06. Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made in this Agreement or any other Loan
Document or in any document, statement, or certificate furnished in
connection with this Agreement shall survive the execution and delivery of
this Agreement and the other Loan Documents, and no investigation by Lender
or any closing shall affect the representations and warranties or the right
of Lender to rely upon them.
Section 10.07. Entire Agreement; Amendment. THE PARTIES HERETO
---------------------------
EXPRESSLY ACKNOWLEDGE AND AGREE, THAT WITH REGARD TO THE SUBJECT MATTER OF
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREIN: (1) THERE ARE NO
ORAL AGREEMENTS BETWEEN THE PARTIES HERETO AND (2) THIS AGREEMENT,
INCLUDING THE DEFINED TERMS AND ALL EXHIBITS AND ADDENDA, IF ANY, ATTACHED
HERETO: (a) EMBODIES THE FINAL AND COMPLETE AGREEMENT BETWEEN THE PARTIES;
(b) SUPERSEDES ALL PRIOR AND CONTEMPORANEOUS NEGOTIATIONS, OFFERS,
PROPOSALS, AGREEMENTS, COMMITMENTS, PROMISES, ACTS, CONDUCT, COURSE OF
DEALING, REPRESENTATIONS, STATEMENTS, ASSURANCES AND UNDERSTANDINGS,
WHETHER ORAL OR WRITTEN; AND (c) MAY NOT BE VARIED OR CONTRADICTED BY
EVIDENCE OF ANY SUCH PRIOR OR CONTEMPORANEOUS MATTER OR BY EVIDENCE OF ANY
SUBSEQUENT ORAL AGREEMENT OF THE PARTIES HERETO. The provisions of this
Agreement and the other Loan Documents to which Borrower is a party may be
amended or waived only by an instrument in writing signed by the parties
hereto.
Section 10.08. Maximum Interest Rate. It is the intention of Lender,
---------------------
Borrower, the Guarantor, and all other parties to the Loan to conform to
and contract in strict compliance with applicable usury laws from
time-to-time in effect. All agreements between Lender or any other holder
of the Note and Borrower (or any other party liable with respect to
indebtedness under the Loan Documents) are hereby limited by this
provision, which shall control and override all such agreements. In no
way, nor in any event or contingency (including, but not limited to,
prepayment, default, demand for payment, or the acceleration of maturity of
any Obligations, or the recharacterization of any application fee, loan
commitment fees, or origination fees as interest), shall the interest
taken, reserved, contracted for, charged or received under the Note, or
otherwise, exceed the Maximum Rate. If, from any possible construction of
any document, interest would otherwise be payable in excess of the Maximum
Rate, any such construction shall be subject to this provision, and such
document shall be automatically reformed, and the interest payable shall be
automatically reduced to the Maximum Rate permitted under applicable law,
without the necessity of the execution of any amendment or new document.
If Lender or the holder of the Note shall ever receive any thing of value
that is characterized as interest under applicable law and that would apart
from this provision, be in excess of the Maximum Rate, an amount equal to
the amount that would have been excessive interest shall, without penalty,
be applied to the reduction of the principal amount owing on the Note in
the inverse order of its maturity and not to the payment of interest, or
refunded to Borrower or the other payor thereof if and to the extent such
amount, which would have been excessive, exceeds such unpaid principal. The
right to accelerate the maturity of the Note, or any other indebtedness,
does not include the right to accelerate any interest that has not
otherwise accrued on the date of such acceleration, and the Lender or the
holder thereof does not intend to charge or receive any unearned interest
in the event of acceleration. All interest paid or agreed to be paid to
the Lender or the holder of the Note shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the
full stated term (including any renewal or extension) of the Note so that
the amount of interest on account of such indebtedness does not exceed the
Maximum Rate. As used in this paragraph, the term "applicable law" shall
mean the laws of the State of Texas or the federal laws of the United
States of America, which ever laws allow the greater h laws now exist may
be changed or amended or come in effect in the future.
Section 10.09. Notices. Any notice, consent, request, demand or
-------
other communication required or permitted to be given under any of the Loan
Documents to Lender or Borrower must be in writing and shall be deemed
sufficiently given or made when (i) delivered in person, (ii) sent by
private courier or national overnight delivery service with proof of
delivery and courier fees paid by sender, (iii) sent by telecopy with
either telephonic confirmation of receipt or with a hard copy sent that day
by national overnight delivery service, or (iv) three (3) days after
depositing in the United States mail by first class mail, registered or
certified, return receipt requested, postage prepaid, as follows:
To Lender: Bank United
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 0000
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With copy to: Xxxxx X. Xxxxxx
Shannon, Martin, Xxxxxxxxxxx & Xxxxx
1300 Two Xxxxx Center
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
To Borrower: Leisure Centers LLC-1
c/o Grand Court Lifestyles, Inc.
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xx. Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With copy to: Xxxxxx Xxxxxxx, Esq.
0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000-0000
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
or such other address as shall be set forth in a notice from the
appropriate party given in compliance with this Section. Notwithstanding
anything to the contrary herein, any notice delivered pursuant to Section
51.002 of the Texas Property Code shall be deemed sufficiently given when
deposited in the United States mail by first class mail, registered or
certified, return receipt requested, postage prepaid to the address of
Borrower as set forth above.
Section 10.10. Applicable Law and Venue. This Agreement shall be
------------------------
governed by and construed in accordance with the laws of the State of Texas
and the applicable laws of the United States of America. This Agreement has
been entered into in Xxxxxx County, Texas, and it shall be performable for
all purposes in Xxxxxx County, Texas. Courts within the State of Texas
shall have jurisdiction over any and all disputes between Borrower and
Lender, whether in law or equity, including, but not limited to, any and
all disputes arising out of or relating to this Agreement or any other Loan
Document; and venue in any such dispute whether in federal or state court
shall be laid in Xxxxxx County, Texas.
Section 10.11. Counterparts. This Agreement may be executed in one
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or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 10.12. Severability. Any provision of this Agreement held by
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a court of competent jurisdiction to be invalid or unenforceable shall not
impair or invalidate the remainder of this Agreement and the effect thereof
shall be confined to the provision held to be invalid or illegal.
Section 10.13. Headings. The headings, captions, and arrangements
--------
used in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 10.14. Participation. Borrower acknowledges and agrees that
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Lender may assign all or a part of its interests under the Loan Documents
to one or more third parties. Borrower acknowledges that all information
relating to the Loan Documents, the Projects, Borrower, any Guarantor, or
holders of equity interests in Borrower, within the possession of or later
acquired by Lender or its agents may be disclosed to prospective or actual
purchasers, participants, and their respective agents, and further, in
connection with a potential or actual securitization of the Note, to
underwriters, rating agencies, other loan servicers, and persons or
entities acting as trustee of any trusts, investment conduits, or other
entities to which the Note may be assigned. Borrower hereby consents to
such disclosures, as needed by Lender in connection with such assignments
aforesaid.
Section 10.15. Construction. Borrower and Lender acknowledge that
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each of them has had the benefit of legal counsel of its own choice and has
been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel.
Section 10.16. Waiver of Jury Trial. Borrower and Guarantor hereby
--------------------
expressly waive any right to a trial by jury in any action or legal
proceeding arising out of or relating to this Agreement or any other Loan
Document or the transactions contemplated hereby or thereby.
Section 10.17. Calculation of Deficiency. If all or any portion of
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the Project is foreclosed upon pursuant to a judicial or nonjudicial
foreclosure sale, then notwithstanding the provisions of Sections 51.003,
51.004, and 51.005 of the Texas Property Code (as the same may be amended
from time to time), and to the extent permitted by law, Borrower agrees
that Lender shall be entitled to seek a deficiency judgment from Borrower
and any other party obligated on the Note or a Guaranty of such Note equal
to the difference between the amount owing on the Note and the total amount
for which the Project was sold pursuant to a judicial or nonjudicial
foreclosure sale. Borrower expressly recognizes that this Section
constitutes a waiver of the above-cited provisions of the Texas Property
Code which would otherwise permit Borrower, Guarantor and other persons
against whom recovery of deficiencies is sought or Guarantor independently
(even absent the initiation of deficiency proceedings against them) to
present competent evidence of the fair market value of the Project as of
the date of the applicable foreclosure sale and offset against any
deficiency the amount by which the foreclosure sale price is determined to
be less than such fair market value. Borrower further recognizes and
agrees that this waiver creates an irrebuttable presumption that the
foreclosure sale price is equal to the fair market value of the Project for
purposes of calculating deficiencies owed by Borrower, any Guarantor, and
others against whom recovery of a deficiency is sought.
Alternatively, in the event the waiver provided above is determined by
a court of competent jurisdiction to be unenforceable, the following shall
be the basis for the finder of fact's determination of the fair market
value of the Project 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);
(1) The Project shall be valued in an "as is" condition as of the
date of the foreclosure sale, without any assumption or expectation
that the Project will be repaired or improved in any manner before a
resale of the Project after foreclosure;
(2) The valuation shall be based upon an assumption that the
foreclosure purchaser desires a prompt resale of the Project for cash
promptly (but no later than twelve months) following the foreclosure
sale;
(3) 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 Project, including, without limitation,
reasonable brokerage commissions, title insurance, a survey of the
Project, tax prorations, reasonable attorney's fees, and marketing
costs;
(4) The gross fair market value of the Project shall be further
discounted to account for any estimated holding costs associated with
maintaining the Project pending sale, including, without limitation,
utilities expenses, property management fees, taxes and assessments
(to the extent not accounted for in paragraph 3 above), and other
maintenance expenses; and
(5) Any expert opinion testimony given or considered in connection
with a determination of the fair market value of the Project must be
given by persons having at least five years experience in appraising
property similar to the Project and who have conducted and prepared a
complete written appraisal of the Project taking into consideration
the factors set forth above.
Section 10.18. Arbitration. To the maximum extent not prohibited by
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law, any controversy, dispute or claim arising out of, in connection with,
or relating to the Loan or the Loan Documents or any transaction provided
for therein, including, but not limited to, any claim based on or arising
from an alleged tort or an alleged breach of any agreement contained in any
of the Loan Documents, shall, at the request of any party to the Loan or
Loan Documents (either before or after the commencement of judicial
proceedings) be settled by arbitration pursuant to Title 9 of the United
States Code, which the parties hereto acknowledge and agree applies to the
transaction involved herein, and in accordance with the Commercial
Arbitration Rules of the American Arbitration Association (the "AAA"). In
any such arbitration proceeding: (i) all statutes of limitations which
would otherwise be applicable shall apply; and (ii) the proceeding shall be
conducted in Houston, Texas, by a single arbitrator, if the amount in
controversy is one million dollars ($1,000,000.00) or less, or by a panel
of three arbitrators if the amount in controversy is over one million
dollars ($1,000,000.00). All arbitrators shall be selected by the process
of appointment from a panel pursuant to Section 13 of the AAA Commercial
Arbitration Rules, and each arbitrator shall have AAA acknowledged
expertise in the subject matter of the controversy, dispute or claim. Any
award rendered in any such arbitration proceeding shall be final and
binding, and judgment upon any such award may be entered in any court
having jurisdiction.
If any party to the Loan or Loan Documents files a proceeding in any
court to resolve any such controversy, dispute or claim, such action shall
not constitute a waiver of the right of such party or a bar to the right of
any other party to seek arbitration under the provisions of this Section of
that or any other claim, dispute or controversy, and the court shall, upon
motion of any party to the proceeding, direct that such controversy,
dispute or claim be arbitrated in accordance with this Section.
Notwithstanding any of the foregoing, the parties hereto agree that no
arbitrator or panel of arbitrators shall possess or have the power to (i)
assess punitive damages, (ii) dissolve, rescind or reform (except that the
arbitrator may construe ambiguous terms) the Loan or any Loan Documents,
(iii) enter judgment on the debt, (iv) exercise equitable powers or issue
or enter any equitable remedies or (v) allow discovery of attorney/client
privileged information. The Commercial Arbitration Rules of the AAA are
hereby modified to this extent for the purpose of arbitration of any
dispute, controversy or claim arising out of, in connection with, or
relating to the Loan or any Loan Document. The parties hereto further agree
to waive, each to each other, any claims for punitive damages, and agree
that neither an arbitrator nor any court shall have the power to assess
punitive damages.
No provision of, or the exercise of any rights under, this Section
shall limit or impair the right of any party to the Loan Documents before,
during or after any arbitration proceeding to: (i) exercise self-help
remedies such as setoff or repossession; (ii) foreclose (judicially or
otherwise) any lien on or security interest in any real or personal
property Collateral; or (iii) obtain emergency relief from a court of
competent jurisdiction to prevent the dissipation, damage, destruction,
transfer, hypothecation, pledging or concealment of assets or of Collateral
securing any indebtedness, obligation or guaranty referenced in the Loan
Documents. Such emergency relief may be in the nature of, but is not
limited to: pre-judgment attachments, garnishments, sequestrations,
appointments of receivers, or other emergency injunctive relief to preserve
the status quo.
In the event applicable law prohibits the submission of a particular
controversy, dispute, or claim arising out of or in connection with any of
the Loan Documents or transactions contemplated therein to arbitration,
Borrower and Lender agree that any actions or proceedings in connection
therewith shall be tried and litigated only in the state and federal courts
located in the jurisdiction in which the Property is located or any other
court in which Lender shall initiate legal or equitable proceedings that
has subject matter jurisdiction over the matter in controversy. Borrower
and Lender, to the extent permitted by applicable law, waive any right to
assert the doctrine of forum non-conveniens or to object to the venue to
the extent any proceeding is brought in accordance with this paragraph.
Section 10.19. Additional Obligations. In addition to all
----------------------
Obligations hereunder, under the Note and under the other Loan Documents,
Borrower shall be personally liable on a joint and several basis with the
Guarantor, in the amount of any loss, damage or cost resulting from (i)
fraud or intentional misrepresentation by Borrower or any Guarantor in
connection with obtaining the loan evidenced by the Note or in complying
with Borrower's obligations under the Note, the Deed of Trust, or any other
Loan Documents ( In such event, the "loss" shall be deemed to include but
not be limited to, any loss of sums owing from Borrower under the Note, the
Deed of Trust and any other Loan Documents), (ii) failure to remit to
Lender insurance proceeds, condemnation awards, or other sums or payments
attributable to the Project in accordance with the provisions of the Deed
of Trust, except to the extent that Borrower did not have the legal right,
because of a bankruptcy, receivership, or similar judicial proceeding, to
direct disbursement of such sums or payments, (iii) following and during
the continuance of any Event of Default, failure to remit to Lender or
otherwise apply all Income from the Property (as hereinafter defined) to
(a) principal and interest under the Note, (b) payment of utilities, taxes
and assessments, and (c) ground rents, if any, on the Property as they
become due and payable, (for purposes of this Section 10.19, the term
"Income from the Property" shall mean all rents, profits, issues, products
and income of the Property (including any received or collected by or on
behalf of Borrower after an Event of Default, except to the extent that
Borrower did not have the legal right, because of a bankruptcy,
receivership or similar judicial proceeding, to direct the disbursement of
such sums) (iv) removal of any personalty or fixtures constituting a portio
herein or under the terms of the Deed of Trust, (v) failure to pay any
valid mechanics', materialman's or similar lien claimants' liens arising
from work performed or materials furnished in connection with the Project
prior to any sale or foreclosure thereof, (vi) Borrower's failure to
deliver to Lender following default under the Loan Documents and upon
demand by Lender, all security deposits received in connection with the
Project, subject to the rights of tenants under tenant leases, (vii) any
waste of or damage to the Project caused by the willful or wanton acts or
omissions of Borrower or its agents, or any deferred maintenance of the
Project caused by the inaction of Borrower in which case the loss shall be
deemed to include all costs of repair, replacement or rehabilitation of the
Project (for purposes of this Section 10.19, "deferred maintenance" shall
mean a failure to maintain the Project in good repair (reasonable wear and
tear excepted) by failing to replace and/or repair improvements, fixtures,
and appliances as needed to maintain the Project in good repair (reasonable
wear and tear excepted) and the equivalent of its original condition
reasonable wear and tear excepted) and (viii) any obligation of Borrower
arising under Paragraph 2.4 of the Deed of Trust, and/or the Environmental
Indemnity which event, the "loss" shall include all obligations of Borrower
under the Environmental Indemnity.
Section 10.20. Subordinate Debt. Notwithstanding anything contained
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herein to the contrary, Borrower shall have the right to obtain a
subordinated second lien deed of trust on the Project from an affiliated
entity, provided (i) that the lien of such second lien deed of trust is
subordinate and inferior to the Deed of Trust in favor of Lender to secure
the Loan and (ii) under the terms of the second lien deed of trust the
Trustee is not allowed to foreclose at any time while the Loan is
outstanding.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER:
--------
LEISURE CENTERS LLC-1,
a Texas limited liability company
By: Grand Court Lifestyles, Inc.,
Its Manager
By: /s/ Xxxxxx Xxxxxxx
----------------------------------------
Xxxxxx Xxxxxxx, Senior Vice President
LENDER:
------
BANK UNITED
By: /s/ Xxxxx Xxxxx
---------------------------------------------
Xxxxx Xxxxx, Vice President
FOR THE LIMITED PURPOSES OF EVIDENCING
THEIR AGREEMENT TO BE BOUND BY SECTION 7.19 HEREOF
/s/ Xxxxxxx Xxxxx
-----------------------------------------
XXXXXXX XXXXX
/s/ Xxxx Xxxxxxx
-----------------------------------------
XXXX XXXXXXX
SCHEDULE 1
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Date
Mr. Xxxxx Xxxxx
Bank United
0000 Xxxxxxxxx Xxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Re: Loan Number______________, Loan Amount: $7,300,000 ("Loan")
Borrower Name: Leisure Centers LLC-1 ("Borrower")
Dear Xx. Xxxxx:
Borrower hereby requests funding of $______________ from the above
referenced Loan for the work in place documented in the attached AIA draw
schedule. Borrower represents that all of the materials submitted in
support of this draw have been reviewed by Borrower and are true and
correct to the best of Borrower's knowledge.
Borrower understands that the final draw funding is subject to change, due
to third party inspections and lender's approval. Borrower authorizes that
the draw be funded by:
1) Wire to: _____________________________________________________________
______________________________________________________________________
______________________________________________________________________
2) Check to: ____________________________________________________________
______________________________________________________________________
______________________________________________________________________
Signed:
LEISURE CENTERS LLC-1,
a Texas limited liability company
By: Grand Court Lifestyles, Inc., Its Manager
By: ____________________________________
Xxxxxx Xxxxxxx, Senior Vice President
SCHEDULE 2
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AFFIDAVIT OF BILLS PAID
STATE OF TEXAS
KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF _________
BEFORE ME, the undersigned authority, a Notary Public in and for the
State of Texas, on this day personally appeared:
_______________________________, as vice president of Grand Court
Lifestyles, Inc., the ________________ of Leisure Centers LLC-1
("Borrower") who being duly sworn by me, upon oath says:
On behalf of the Borrower, the owner of the land for improvements
being erected on the following described property, I certify that all bills
for labor and materials have been paid or will be paid with the proceeds of
this draw; that the Borrower has no notice of any liens other than that of
Bank United, Houston, Texas, being in existence in the following described
property, to wit:
SEE EXHIBIT A
That the facts herein stated are within my knowledge as such officer.
I further acknowledge the receipt of _______________ from Bank United,
Houston, Texas, on ______ ___________________, for improvements on and for
which the above described property is security.
LEISURE CENTERS LLC-1,
a Texas limited liability company
By: Grand Court Lifestyles, Inc.,
Its Manager
By: ______________________________
Xxxxxx Xxxxxxx,
Senior Vice President
SUBSCRIBED AND SWORN TO BEFORE ME, this ____ day of ______, 199__.
_____________________________________________
Notary Public in and for the
State of Florida
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SCHEDULE 3
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PARTIAL RELEASE OF LIEN
-----------------------
STATE OF TEXAS
KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF ___________
The undersigned, (the "Subcontractor"), has performed the labor or
furnished materials or done both, pursuant to either a Purchase Order or a
Subcontract with Leisure Centers LLC-1, a Texas limited liability company
(the "Owner"), in connection with the construction of the improvements
located at _________________________________________ (the "Subject
Property").
As a result of the foregoing, $_____________ is due and payable to the
Subcontractor, for the period ending, ____________, 19____, (the "Payment
Date"). This amount represents all sums due Subcontractor, except as
hereinafter noted, for materials supplied, and/or labor performed to the
Payment Date in connection with the construction of improvements on the
Subject Property.
In consideration of the payment of the above stated sum, the receipt of
which is hereby acknowledged, Subcontractor hereby waives, relinquishes,
and releases any and all liens, rights, and interests (including, without
limitation, all interest in and to mechanic's and materialmen's liens),
owned, claimed or held, to be owned, claimed or held by Subcontractor in
and to the Subject Property and to the improvements now or hereafter
constructed thereon, and does hereby release, discharge and acquit the
Owner, its successors and assigns, from all claims, debts, and demand by
reason of the labor performed and/or materials furnished by Subcontractor
prior to and including the Payment Date, except as herein provided.
The undersigned has actual knowledge that all bills owed by Subcontractor
as of the Payment Date for materials furnished and labor performed in
connection with the construction have been fully paid and satisfied or will
be fully paid and satisfied out of the sum stated above. Subcontractor does
further guaranteed that if for any reason a lien or liens are filed for
materials or labor against the Subject Property by virtue of
Subcontractor's participation in the construction of said improvements, or
that of any individual or entity Subcontractor has subcontracted with or
procured materials from, Subcontractor will immediately obtain a settlement
of such lien or liens and obtain and furnish Owner, its successors and
assigns, a release thereof or a bond for release thereof, and if
Subcontractor cannot obtain such a release, indemnify the Owner, its
successors and assigns, for any and all costs the Owner, its successor and
assigns, may incur in removing said lien or liens.
Subcontractor does hereby acknowledge and agree that but for the
representations and agreements contained herein concerning the total
amounts due and owing, the Owner would not make the payment receipted
herein above, and Owner is relying upon such representations and
agreements. The only amounts not included within the waiver and release
contained herein as of the Payment Date are: $___________, (retainage),
and $_______________, (disputed charges).
Executed this ________________ day of ______________, 19__.
"Subcontractor"
_________________________
(Company Name)
By: _____________________
Title: __________________
THE STATE OF TEXAS
COUNTY OF ______________
This instrument was acknowledged before me on this ___________________
_______________ of __________________________, 19___ by ___________________
______________________________, ____________________________ of
_________________________, on behalf of said _______________.
_________________________________________________
Notary Public in and for the State of
Texas
My commission Expires: _______, 19__
__________________________________________________
Printed Name of Notary
EXHIBIT A
Lot One (1), in Block One (1), of the final plat of Grand Courts
Subdivision, in the City of Temple, Xxxx County, Texas, according
to the plat of record in Cabinet C, Slide 65-A, Plat Records of
Xxxx County, Texas.
Also Known As:
BEING a 6.800 acre tract of land situated in the XXXXXX XXXXXX
SURVEY XXXXXXXX Xx. 000, Xxxx Xxxxxx, Xxxxx and being a part or
portion of that certain 87.45 acre tract of land described in a
Deed from U.S. Trust Company of New York to Xxxxxx Xxxxxxx,
Trustee being of record in Volume 1462, Page 335, Deed Records of
Xxxx County, Texas and being more particularly described by metes
and bounds as follows:
Commencing at a 1" iron pipe in concrete found at the southeast
corner of the Amending Plat of West Ridge Subdivision, Phase III,
an addition to the City of Temple, Xxxx County, Texas, according
to the map or plat of record in Cabinet B, Slide 000-X, Xxxx
Xxxxxxx xx Xxxx Xxxxxx, Xxxxx; said 1" iron pipe in concrete
found being in the west right-of-way line of 205 Loop; THENCE S.
18 degrees 02'04" W., 184.00 feet with the said west right-of-way
line to a 1/2" iron rod set at the beginning of a curve to the
right;
THENCE with the said curve to the right, radius equals 1965.60
feet, are length equals 86.02 feet and the long chord bearing
equals S. 19 degrees 17'17" W., 86.01 feet to a 1/2" iron rod
set for the Point of BEGINNING:
THENCE continuing with said curve to the right and said west
right-of-way line, radius equals 1965.60 feet, arc length equals
431.01 feet and the long chord bearing equals S. 26 degrees 49'25"
W., 430.15 feet to a 1/2" iron rod set for corner;
THENCE N. 73 degrees 20'51" W., 714.59 feet departing from said
west right-of-way line to a 1/2" iron rod set in the east right-
of-way line of Xxxxxx Road for corner;
THENCE N. 37 degrees 34'22" E., 10.88 feet continuing with said
east right-of-way line to a 1/2" iron rod set at the beginning of
a curve to the left for corner;
THENCE with the said curve to the left and said east right-of-way
line, radius equals 1555.21 feet, arc length equals 425.58 feet,
long chord bearing equals N. 29 degrees 44'01" E., 424.25 feet to
a 1/2" iron rod set for corner;
THENCE S. 73 degrees 20'51" E., 690.65 feet departing from said
east right-of-way line to the Point of BEGINNING and containing
296,208 square feet or 6.800 acres of land.
