CONSTRUCTION LOAN AGREEMENT
Exhibit 10.24
THIS CONSTRUCTION LOAN AGREEMENT (this
"Agreement") is
made as of the 23rd day of November, 2015, by and between
SeD MARYLAND DEVELOPMENT,
LLC, a Delaware limited liability company (the "Borrower"), and THE BANK OF HAMPTON ROADS, a Virginia
banking corporation, its successors and assigns, (the "Lender").
The
Borrower has applied to the Lender for a land development loan in
an original principal amount not to exceed at any one time
outstanding the sum of US$8,000,000 (as the same may be modified,
amended, extended or renewed from time to time, the "Land Development Loan") and a
letter of credit facility in the aggregate stated amount of
US$800,000 (as the same may be modified, amended, extended or
renewed from time to time, the "Letter of Credit Facility";
such Land Development Loan and Letter of Credit Facility, as the
same may be modified, amended, extended or renewed from time to
time, being hereinafter sometimes referred to collectively as the
"Loan") to finance
the first stage of the development by the Borrower of certain
property located in Xxxxxxxxx County, Maryland that will serve as
security for the Loan into a residential subdivision to be known as
"Xxxxxxxxx Run" containing two hundred seventy-six (276)
single-family building lots (individually, a "Lot" and collectively, the
"Lots") and other
building parcels (individually, a "Parcel" and collectively, the
"Parcels") by
clearing and grading and the installation of, among other things,
sediment control, electric lines, communication lines, water and
sewer lines, sidewalks, curbs and paved roads. The Lender has
agreed to make the Loan to the Borrower on the terms and conditions
set forth in this Agreement and in the other documents evidencing
and securing the Loan.
Article
I
Section
1.1
Conditions to Closing. The
conditions precedent to closing the Loan and the making by the
Lender of the initial advance thereunder are set forth in the
Closing Checklist.
Section
1.2
Schedules. The Schedules
attached to this Agreement are incorporated herein and made a part
hereof.
Article
II
Section
2.1
The Loan. The Borrower agrees
to borrow the Loan from the Lender, and the Lender agrees to lend
the Loan to the Borrower, subject to the terms and conditions
herein set forth, in incremental advances. Interest shall accrue
and be payable in arrears only on sums advanced hereunder for the
period of time outstanding. The Land Development Loan shall be a
revolving line of credit. Accordingly, as more particularly set
forth herein, the Borrower shall have the right to borrow, repay
and reborrow, from time to time, the principal amount of the Land
Development Loan, on the condition that (a) no Event of Default
shall then exist, (b) the unpaid principal balance outstanding
under the Land Development Loan at any one time does not exceed the
original principal amount of the Revolving Note, and (c) all
additional conditions as set forth in this Agreement and each of
the other Loan Documents have been satisfied and/or waived.
Notwithstanding anything contained herein to the contrary, however,
in no event shall the aggregate amount advanced under the Land
Development Loan exceed the Cumulative Loan Advance Limit. The
Letter of Credit Facility is not a revolving loan; amounts advanced
and repaid may not be re-borrowed.
Section
2.2
Purpose; Reallocation; Revenues from
Property. The Loan shall be advanced by the Lender in
accordance with the terms of this Agreement to pay those expenses
related to the Loan and the Property that are described in the
Budget, but not, in the aggregate with respect to any line item set
forth in the Budget, in excess of the amount of the Loan to be
disbursed for such line item, as set forth in the Budget. The
Borrower will receive each advance in trust for the purpose of
paying only those costs for which the advance is made and will
utilize the funds advanced for no other purpose. With the prior
approval of the Lender, any cost savings, actual or estimated,
affecting any approved line item within the Budget, other than the
interest reserve, may be reallocated by the Borrower to the
contingency reserve or to such other line item within the Budget as
may be reasonably approved by the Lender. Upon completion of the
Improvements and the payment of all costs in connection therewith,
any undisbursed proceeds of the Loan shall be allocated to such
other line item as the Lender shall approve. Each request to
reallocate funds from the contingency reserve shall be subject to
approval by the Lender as to the amount and purpose for which such
reallocation of funds will be used; provided, however, that the
Borrower shall have the right, in its discretion, to reallocate up
to $500,000 of the contingency reserve, plus the amount of any
confirmed cost savings in other line items in the Budget, to pay
demonstrated cost overruns in other approved line items within the
Budget without the prior written consent of the Lender. If and when
revenues are derived from the Property in amounts sufficient to pay
all or any portion of the operating expenses of the Property or all
or any portion of the interest on the Loan, such revenues will be
used to pay such expenses and/or interest, and the Lender, at its
sole option, may restrict or prohibit future disbursements of the
Loan for the payment of interest and/or such operating expenses to
the extent that revenues are sufficient to pay such
amounts.
Section
2.3
Draw Requests. Advances shall
be made not more frequently than monthly based on draw requests
signed by an Authorized Signer in the form attached hereto as
Schedule 2 or in another form reasonably approved by the Lender
(including any form on an electronic platform or electronic
transmission system). Each draw request for hard costs shall be set
forth on AIA Forms G702 and G703 or another form reasonably
approved by the Lender, and shall be reviewed by the Construction
Inspector, signed by the applicable Contractor or Contractors and,
if requested by the Lender, approved by the Engineer. Draw requests
for hard costs shall show the percentage of Completion of
Construction and shall set forth in trade breakdown form and in
such detail as may be reasonably required by the Lender the amounts
expended and/or costs incurred for work done and materials
incorporated in the Improvements. Retainage will be withheld and
released in accordance with the terms of Schedule 5. Each draw
request shall be supported by such information and documentation
(such as paid receipts, invoices, statements of accounts, lien
releases, etc.) as the Lender may reasonably require to assure that
amounts requested are to be used to reimburse the Borrower for
costs previously paid by the Borrower or to pay costs incurred by
the Borrower that are to be paid from proceeds of the Loan, as set
forth in the Budget. The Lender shall have a period of ten (10)
Banking Days within which to fund each approved
requisition.
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Section
2.4
Additional Terms Regarding Advances;
Required Equity. Advances of the Loan shall also be subject
to the terms and conditions set forth in Schedule 5. The Borrower
shall be responsible for the payment of all costs and expenses not
otherwise payable with the proceeds of the Loan. During the term of
the Loan, the Borrower shall provide to the Lender satisfactory
evidence of the payment of all required equity, as and when the
same shall be due in accordance with the terms of this
Agreement.
Section
2.5
Liability of Lender. The Lender
shall in no event be responsible or liable to any Person other than
the Borrower for the disbursement of or failure to disburse the
Loan proceeds or any part thereof and neither the Construction
Inspector nor any Contractor, subcontractor, laborer or material
supplier shall have any right or claim against the Lender under
this Agreement or the other Loan Documents.
Section
2.6
Letters of Credit. All Letters
of Credit, if any, issued under the Loan, and drawings thereunder,
shall be subject to the terms and conditions of Schedule
6.
Article
III
The
Borrower makes the following representations and warranties to the
Lender as of the date hereof and as of the date of each advance
hereunder:
Section
3.1
Organization, Power and Authority of
the Borrower; Loan Documents. The Borrower (a) is a limited
liability company duly organized, existing and in good standing
under the Laws of the State of Delaware and is duly qualified to do
business and in good standing in the State of Maryland and in any
other state where the nature of the Borrower's business or property
requires it to be qualified to do business, and (b) has the power,
authority and legal right to own its property and carry on the
business now being conducted by it and to engage in the
transactions contemplated by the Loan Documents. The Loan Documents
to which the Borrower is a party have been duly executed and
delivered by the Borrower, and the execution and delivery of, and
the carrying out of the transactions contemplated by, such Loan
Documents, and the performance and observance of the terms and
conditions thereof, have been duly authorized by all necessary
organizational action by and on behalf of the Borrower. The Loan
Documents to which the Borrower is a party constitute the valid and
legally binding obligations of the Borrower and are fully
enforceable against the Borrower in accordance with their
respective terms, except to the extent that such enforceability may
be limited by Laws generally affecting the enforcement of
creditors' rights and the application of equitable
principles.
Section
3.2
Other Documents; Laws. The
execution and performance of the Loan Documents to which the
Borrower is a party and the consummation of the transactions
contemplated thereby will not conflict with, result in any breach
of, or constitute a default under, the organizational documents of
the Borrower, or any contract, agreement, document or other
instrument to which the Borrower is a party or by which the
Borrower or any of its properties may be bound or affected, and
such actions do not and will not violate or contravene any Law to
which the Borrower is subject. Such actions do not and will not
violate or contravene any Law to which the Borrower, the Property,
or any tenant under any Lease is subject, including the Controlled
Substances Act.
Section
3.3
Taxes. The Borrower has filed
all federal, state, county and municipal tax returns required to
have been filed by the Borrower and has paid all Taxes which have
become due pursuant to such returns or pursuant to any tax
assessments received by the Borrower.
Section
3.4
Legal Actions. There are no
Claims or investigations by or before any court or Governmental
Authority, pending, or to the best of the Borrower's knowledge and
belief, threatened against or affecting the Borrower, the
Borrower's business or the Property. The Borrower is not in default
with respect to any order, writ, injunction, decree or demand of
any court or any Governmental Authority affecting the Borrower or
the Property.
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Section
3.5
Nature of Loan. The Borrower is
a business or commercial organization. The Loan is being obtained
solely for business or investment purposes, and will not be used
for personal, family, household or agricultural
purposes.
Section
3.6
Trade Names. The Borrower
conducts its business solely under the name set forth in the
Preamble to this Agreement and makes use of no trade names in
connection therewith, unless such trade names have been previously
disclosed to the Lender in writing.
Section
3.7
Financial Statements. The
financial statements heretofore delivered by the Borrower and the
Guarantor to the Lender are true and correct in all respects, have
been prepared in accordance with generally accepted accounting
principles consistently applied, and fairly present the respective
financial conditions of the subjects thereof as of the respective
dates thereof.
Section
3.8
No Material Adverse Change. No
material adverse change has occurred in the financial conditions
reflected in the financial statements of the Borrower and the
Guarantor since the respective dates of such statements, and no
material additional liabilities have been incurred by the Borrower
or the Guarantor since the dates of such statements other than the
borrowings contemplated herein or as approved in writing by the
Lender.
Section
3.9
ERISA and Prohibited
Transactions. As of the date hereof and throughout the term
of the Loan: (a) the Borrower is not and will not be (i) an
"employee benefit plan," as defined in Section 3(3) of ERISA, (ii)
a "governmental plan" within the meaning of Section 3(32) of ERISA,
or (iii) a "plan" within the meaning of Section 4975(e) of the
Code; (b) the assets of the Borrower do not and will not constitute
"plan assets" within the meaning of the United States Department of
Labor Regulations set forth in Section 2510.3-101 of Title 29 of
the Code of Federal Regulations; (c) transactions by or with the
Borrower are not and will not be subject to state statutes
applicable to the Borrower regulating investments of fiduciaries
with respect to governmental plans; and (d) the Borrower will not
engage in any transaction that would cause any Obligation or any
action taken or to be taken hereunder (or the exercise by Lender of
any of its rights under the Deed of Trust or any of the other Loan
Documents) to be a non-exempt (under a statutory or administrative
class exemption) prohibited transaction under ERISA or Section 4975
of the Code. The Borrower agrees to deliver to the Lender such
certifications or other evidence of compliance with the provisions
of this Section as the Lender may from time to time reasonably
request.
Section
3.10
Compliance with Zoning and Other
Requirements. To the best of its knowledge, (a) the Borrower
is in compliance with the requirements of all applicable Laws; (b)
the use of the Property complies with applicable zoning ordinances,
regulations and restrictive covenants affecting the Land; (c) all
use and other requirements of any Governmental Authority having
jurisdiction over the Property have been satisfied; and (d) no
violation of any Law exists with respect to the
Property.
Section
3.11
Plans and Specifications. The
Plans and Specifications are complete and adequate for the
Construction of the Improvements. The Plans and Specifications have
been approved by all Governmental Authorities having or claiming
jurisdiction over the Property and by the beneficiary of each
restrictive covenant affecting the Property whose approval is
required. The Plans and Specifications have also been approved by
NVR under the terms of the NVR Contracts, to the extent such
approval is required. To the best of the Borrower's knowledge, the
Improvements, if constructed substantially in accordance with the
Plans and Specifications, will fully comply with all applicable
Laws, including those Laws relating to access and facilities for
disabled persons.
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Section
3.12
Building Permits; Other
Permits. All building, construction and other permits
necessary or required in connection with the Construction of the
Improvements have been validly issued or will be issued in a timely
manner by a date sufficient to ensure the commencement of
construction and the Completion of Construction in accordance with
the Project Schedule. All required fees have been or will be paid
and bonds and/or other security have been or will be posted in
connection with all permits as and when the same are required. To
the knowledge of the Borrower, adequate amounts are included in the
Budget to pay all fees and the cost of all bonds and other security
required in connection with permits to be issued in the future.
Following the issuance thereof, all permits will remain in full
force and effect.
Section
3.13
Utilities. All utility services
necessary for the Construction of the Improvements and the
operation thereof for their intended purposes are available at the
boundaries of the Land (or will be available upon the completion of
work shown in the Plans and Specifications), including telephone
service, cable television, water supply, storm and sanitary sewer
facilities, natural gas and electric facilities, including cabling
for telephonic and data communication, and the capacity to send and
receive wireless communication.
Section
3.14
Access; Roads. All roads and
other accesses necessary for the Construction of the Improvements
and full utilization thereof for their intended purposes have
either been completed or the necessary rights of way therefor have
either been acquired by the appropriate Governmental Authority, or
have been or will be, as and when required for the completion and
use of the Improvements, dedicated to public use and accepted by
such Governmental Authority and all necessary steps have been taken
by the Borrower or such Governmental Authority to assure the
complete construction and installation thereof by a date sufficient
to ensure the Completion of Construction of the Improvements in
accordance with the Project Schedule.
Section
3.15
Other Liens. Except for
contracts for labor, materials and services furnished or to be
furnished in connection with the Construction of the Improvements,
the Borrower has made no contract or arrangement of any kind the
performance of which by the other party thereto would give rise to
a lien on the Property.
Section
3.16
Defaults. There is no Default
or Event of Default under any of the Loan Documents, and there is
no default or event of default under any material contract,
agreement or other document related to the Construction of the
Improvements or the operation thereof.
Section
3.17
Affirmation of Representations and
Warranties. Each draw request and each receipt of the funds
requested thereby shall constitute an affirmation that: (a) no
uncured Default or Event of Default has occurred hereunder; (b) the
foregoing representations and warranties of the Borrower are true
and correct in all material respects as of the date of the draw
request and, unless Lender is notified to the contrary prior to the
disbursement of the advance requested, will be so on the date of
the disbursement; (c) any unadvanced portion of the Loan to which
the Borrower is entitled, together with additional funds that, to
the Lender's satisfaction, are available, set aside and committed,
is or will be sufficient to pay the expenses related to the Loan
and the Property that are described in the Budget; (d) all
disbursements were and will be used in compliance with the Budget;
(e) the work completed to the date of the draw request is of
quality and in all other respects consistent with the Plans and
Specifications; and (f) if applicable, Construction of the
Improvements is proceeding in accordance with the Project
Schedule.
Section
3.18
OFAC and Other Sanctions.
Neither the Borrower nor any of its subsidiaries (collectively, the
"Company") or, to the knowledge of the Company, any director,
officer, employee, agent, Affiliate or representative of the
Company is a Person currently the subject of any Sanctions, nor is
the Company located, organized or resident in a country or
territory that is the subject of Sanctions.
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Article
IV
The
Borrower covenants as of the date hereof and until such time as all
Obligations shall be indefeasibly paid and performed in full,
that:
Section
4.1
Commencement and Completion of
Construction; Compliance with Laws; Use of Proceeds. The
Borrower shall cause the Construction of the Improvements to be
commenced on or before the Construction Commencement Date and
prosecuted in a good and workmanlike manner and shall cause the
same to be completed on or before the required Completion Date in
accordance with the Project Schedule and substantially in
accordance with the Plans and Specifications. The Borrower shall
comply with all Laws and all orders, writs, injunctions, decrees
and demands of any court or any Governmental Authority affecting
the Borrower or the Property. The Borrower shall use all proceeds
of the Loan for the purposes contemplated herein and which are not
in contravention of any Law or any Loan Document.
Section
4.2
Approval of Construction. No
work associated with any aspect or phase of the Construction of the
Improvements shall be commenced by the Borrower unless and until
the Plans and Specifications covering such aspect or phase of such
work have been approved by the Lender, by all Governmental
Authorities having or claiming jurisdiction over the Land and
Improvements, by NVR under the terms of the NVR Contracts (to the
extent required), by the beneficiary of any applicable restrictive
covenant whose approval is required, and by any other party whose
approval is required under applicable agreements, and unless and
until all building, construction and other permits necessary or
required in connection with such aspect or phase of the
Construction of the Improvements have been validly issued and all
fees, bonds and any other security required in connection therewith
have been paid or posted.
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Section
4.3
Deposits to Balance Loan. If at
any time the Lender shall reasonably determine that (a) the
proceeds of the Loan remaining to be advanced for any line item
within the Budget, together with any anticipated Deferred Equity
that the Lender determines to its reasonable satisfaction is or
will be available for such item, are not or will not be sufficient
to pay, in a timely manner, the amount of such line item remaining
to be paid, and (b) the deficiency cannot be remedied by a
reallocation of budgeted amounts pursuant to Section 2.2, then the
Borrower shall deposit with the Lender, within ten (10) days from
the effective date of a Notice from the Lender requesting such
deposit, funds in an amount equal to the deficiency. Such funds
shall be held by the Lender in a Borrower's Deposit Account, which
shall be an interest-bearing account, with all accrued interest to
become part of the Borrower's deposit. The Borrower agrees that it
shall include all interest and earnings on any such deposit as its
income (and, if the Borrower is a partnership or other pass-through
entity, the income of its partners, members or beneficiaries, as
the case may be), and shall be the owner of all funds on deposit in
the Borrower's Deposit Account for federal and applicable state and
local tax purposes. The Lender shall have the exclusive right to
manage and control all funds in the Borrower's Deposit Account, but
the Lender shall have no fiduciary duty with respect to such funds.
Advances of the deposited funds will be made from time to time for
the payment of deficient line item amounts, prior to the advance of
proceeds of the Loan for such amounts. Advances of the deposited
funds will be subject to the terms of this Agreement regarding
advances of the Loan. Any account fees and charges may be deducted
from the balance, if any, in the Borrower's Deposit Account. The
Borrower grants to the Lender a security interest in the Borrower's
Deposit Account and all such deposited funds hereafter deposited to
such deposit account, and any proceeds thereof, as security for the
Obligations. Such security interest shall be governed by the
Uniform Commercial Code of the State, and the Lender shall have
available to it all of the rights and remedies available to a
secured party thereunder. The Borrower's Deposit Account may be
established and held in such name or names as the Lender shall deem
appropriate, including in the name of the Lender. The Borrower
hereby constitutes and appoints the Lender and any officer or agent
of the Lender its true and lawful attorneys-in-fact with full power
of substitution to open the Borrower's Deposit Account and to do
any and every act that the Borrower might do on its own behalf to
fulfill the terms of this Section. To the extent permitted by Law,
the Borrower hereby ratifies all that said attorneys shall lawfully
do or cause to be done by virtue hereof. It is understood and
agreed that this power of attorney, which shall be deemed to be a
power coupled with an interest, cannot be revoked.
Section
4.4
Compliance with Laws;
Encroachments. The Improvements shall be constructed and
operated in accordance with all applicable (whether present or
future) Laws. The Improvements shall be constructed entirely on the
Land and shall not encroach upon any easement or right-of-way, or
upon the land of others. Construction of the Improvements shall
occur wholly within all applicable building restriction lines and
set-backs, however established, and the Construction of the
Improvements and their operations shall be, in all material
respects, in compliance with all applicable use or other
restrictions and the provisions of any prior agreements,
declarations, covenants and all applicable zoning and subdivision
ordinances and regulations. The Borrower shall obtain, preserve and
maintain in good standing, as applicable, all rights, privileges
and franchises necessary or desirable for the operation of the
Property and the conduct of the Borrower's business thereon or
therefrom.
Section
4.5
Inspections; Cooperation. The
Borrower shall permit representatives of the Lender and the
Construction Inspector to enter upon the Land, to inspect the
Improvements and any and all materials to be used in connection
with the Construction of the Improvements, to inspect and examine
all detailed plans and shop drawings and similar materials in the
Borrower's possession, as well as all books and records of the
Borrower (regardless of where maintained) and all supporting
vouchers and data and to make copies and extracts therefrom and to
discuss the affairs, finances and accounts pertaining to the Loan
and the Improvements with representatives of the Borrower. The
Borrower shall at all times reasonably cooperate and cause each and
every one of its Contractors, subcontractors and material suppliers
to reasonably cooperate with the representatives of the Lender and
the Construction Inspector in connection with or in aid of the
performance of the Lender's functions under this Agreement. Except
in the event of an emergency, the Lender shall give the Borrower at
least twenty-four (24) hours' notice by telephone in each instance
before entering upon the Land and/or exercising any other rights
granted in this Section.
Section
4.6
Contracts, Vouchers and
Receipts. The Borrower shall furnish to the Lender, promptly
on demand, any contracts, subcontracts, bills of sale, statements,
receipted vouchers or other agreements relating to the Construction
of the Improvements, including any such items pursuant to which the
Borrower has any claim of title to any materials, fixtures or other
articles delivered or to be delivered to the Land or incorporated
or to be incorporated into the Improvements. The Borrower shall
furnish to the Lender, promptly on demand, a verified written
statement, in such form and detail as the Lender may reasonably
require, setting forth the names and addresses of all contractors,
subcontractors and suppliers furnishing labor or materials in the
Construction of the Improvements and showing all amounts paid for
labor and materials and all items of labor and materials furnished
or to be furnished for which payment has not been made and the
amounts to be paid therefor.
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Section
4.7
Payment and Performance of Contractual
Obligations. The Borrower shall perform in a timely manner
all of its obligations under the Engineer's Contract, each and
every Construction Contract and any and all other contracts and
agreements related to the Construction of the Improvements or the
operation thereof, and the Borrower will pay when due all bills for
services or labor performed and materials supplied in connection
with the Construction of the Improvements. Within sixty (60) days
after the filing of any mechanic's lien or other lien or
encumbrance against the Property, the Borrower will promptly
discharge the same by payment or filing a bond or otherwise as
permitted by Law. So long as the Lender's security has been
protected by the filing of a bond or otherwise in a manner
satisfactory to Lender in its sole and absolute discretion, the
Borrower shall have the right to contest in good faith any claim,
lien or encumbrance, provided that the Borrower does so diligently
and without prejudice to the Lender or delay in completing
Construction of the Improvements. The Lender shall have no
obligation to make advances under the Loan during any period in
which there shall exist a filed mechanic's lien or other lien or
encumbrance against the Property which has not been discharged or
bonded off to the complete satisfaction of the Lender.
Section
4.8
Correction of Construction
Defects. Promptly following any demand by the Lender, the
Borrower shall correct or cause the correction of any structural
defects in the Improvements, any work that fails to comply with the
requirements of Section 4.4 and any material departures or
deviations from the Plans and Specifications not approved in
writing by the Lender.
Section
4.9
Insurance. The Borrower shall
maintain, at its sole cost and expense, each and every one of the
insurance coverages required pursuant to the terms of the Deed of
Trust. In addition to the foregoing, the Borrower shall cause each
and every Contractor to provide and maintain comprehensive
(commercial) general liability insurance and workers' compensation
insurance for all of its employees in amounts reasonably acceptable
to the Lender. The Borrower will immediately give Notice to the
Lender of any cancellation of, or material change in, any insurance
policy required pursuant to the terms hereof. The Lender shall not,
because of accepting, rejecting, approving or obtaining insurance,
incur any liability for (a) the existence, nonexistence, form or
legal sufficiency thereof, (b) the solvency of any insurer, or (c)
the payment of losses.
Section
4.10
Adjustment of Condemnation and
Insurance Claims. The Borrower shall give prompt Notice to
the Lender of any Casualty or any Condemnation or threatened
Condemnation. The Lender is authorized, at its sole and absolute
option, to commence, appear in and prosecute, in its own or the
Borrower's name, any action or proceeding relating to any
Condemnation or Casualty, and to make proof of loss for and to
settle or compromise any Claim in connection therewith. Any Net
Proceeds obtained in connection with any Condemnation or Casualty
involving the Property shall be utilized strictly in accordance
with the terms and conditions outlined in the Deed of
Trust.
Section
4.11
Management. The Borrower at all
times shall provide for the competent and responsible management
and operation of the Property. At all times, the Borrower shall
cause the Property to be managed by an Approved Manager. All
management contracts affecting the Property shall be terminable
upon not more than sixty (60) days' written notice without penalty
or charge (except for unpaid accrued management fees). Any
management contract affecting the Property must be approved in
writing by the Lender prior to the execution of the
same.
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Section
4.12
Books and Records; Financial
Statements; Tax Returns. The Borrower shall provide or cause
to be provided to the Lender all of the Financial Statements and
other information required to be delivered with respect to the
Borrower and the Guarantor at the times and in the manner set forth
in the Deed of Trust and the other Loan Documents. The Borrower
will keep and maintain full and accurate books and records
administered in accordance with generally accepted accounting
principles, consistently applied, showing in detail the earnings
and expenses of the Property and the operation thereof. All
Financial Statements shall be in form and detail reasonably
satisfactory to the Lender and shall contain or be attached to the
signed and dated written certification of the reporting party in
form specified by the Lender to certify that the Financial
Statements are furnished to the Lender in connection with the
extension of credit by the Lender and constitute a true and correct
statement of the reporting party's financial position. All
certifications and signatures on behalf of corporations,
partnerships, limited liability companies or other entities shall
be by a representative of the reporting party satisfactory to the
Lender. All Financial Statements for a reporting party who is an
individual shall be on the Lender's then-current personal financial
statement form or in another form satisfactory to the Lender.
Following the date of this Agreement, all fiscal year-end Financial
Statements of the Borrower and the Guarantor shall be prepared by
independent certified public accountants acceptable to the Lender,
and shall contain all reports and disclosures required by generally
accepted accounting principles for a fair presentation. All
quarterly Financial Statements of the Borrower and/or the Guarantor
may be prepared by the applicable reporting party and shall include
a minimum of a balance sheet and income statement. The Borrower
shall provide, upon the Lender's request, convenient facilities for
the audit and verification of any such statement. Additionally, the
Borrower will provide the Lender at the Borrower's expense with all
evidence that the Lender may from time to time reasonably request
as to compliance with all provisions of the Loan Documents. The
Borrower shall promptly notify the Lender of any event or condition
that could reasonably be expected to have a material adverse change
in the financial condition of the Borrower, of the Guarantor (if
known by the Borrower), or in the construction progress of the
Improvements.
Section
4.13
Estoppel Certificates. Within
twenty (20) days after any request by the Lender or a proposed
assignee or purchaser of the Loan or any interest therein, the
Borrower shall certify in writing to the Lender, or to such
proposed assignee or purchaser, the then unpaid balance of the Loan
and whether the Borrower claims any right of defense or setoff to
the payment or performance of any of the Obligations, and if the
Borrower claims any such right of defense or setoff, the Borrower
shall give a detailed written description of such claimed
right.
Section
4.14
Taxes; Tax Receipts. The
Borrower shall pay and discharge all Taxes prior to the date on
which penalties are attached thereto unless and to the extent only
that such Taxes are contested in accordance with the terms of the
Deed of Trust. The Lender may, at its option and at the Borrower's
sole expense, obtain and enter into a tax services contract with
respect to the Property with a tax reporting agency satisfactory to
the Lender.
Section
4.15
Lender's Rights to Pay and
Perform. If, after any required notice, the Borrower fails
to promptly pay or perform any of the Obligations within any
applicable grace or cure periods, the Lender, without Notice to or
demand upon the Borrower, and without waiving or releasing any
Obligation or Default, may (but shall be under no obligation to) at
any time thereafter make such payment or perform such act for the
account and at the expense of the Borrower. The Lender may enter
upon the Property for that purpose and take all action thereon as
the Lender considers necessary or appropriate. At the option of the
Lender, following the occurrence of an Event of Default, the Lender
may apply any undisbursed Loan proceeds to the satisfaction of the
conditions of the Loan Documents, irrespective of the allocation of
such Loan proceeds in the Budget. Without limiting the generality
of the foregoing, the Lender may pay directly from the proceeds of
the Loan all interest bills rendered by the Lender in connection
with the Loan, and following the occurrence of an Event of Default
may make advances directly to the title insurance company, any
Contractor, subcontractor or material supplier, or to any of them
jointly. The execution hereof by the Borrower shall, and hereby
does, constitute an irrevocable authorization so to advance the
proceeds of the Loan. No further direction or authorization from
the Borrower shall be necessary to warrant such direct advances.
Each advance shall be secured by the Deed of Trust and shall
satisfy the obligations of the Lender hereunder to the extent of
the amount of the advance.
Section
4.16
Reimbursement; Interest. If the
Lender shall incur any Expenses or pay any Claims by reason of the
Loan or the rights and remedies provided under the Loan Documents
(regardless of whether or not any of the Loan Documents expressly
provide for an indemnification by the Borrower against such
Claims), the Lender's payment of such Expenses and Claims shall
constitute advances to the Borrower which shall be paid by the
Borrower to the Lender on demand, together with interest thereon
from the date incurred until paid in full at the highest rate of
interest then applicable to the Loan under the terms of the Notes.
Each advance shall be secured by the Deed of Trust and the other
Loan Documents as fully as if made to the Borrower, regardless of
the disposition thereof by the party or parties to whom such
advance is made. Notwithstanding the foregoing, however, in any
action or proceeding to foreclose the Deed of Trust or to recover
or collect the Obligations, the provisions of Law governing the
recovery of costs, disbursements and allowances shall prevail
unaffected by this Section.
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Section
4.17
Notification by the Borrower.
The Borrower will promptly give Notice to the Lender of any claim
of a default by the Borrower, or any claim by the Borrower of a
default by any other party, under the Engineer's Contract or any
Construction Contract.
Section
4.18
Indemnification by the
Borrower. The Borrower agrees to indemnify the Lender and to
hold the Lender harmless from and against, and to defend the Lender
by counsel approved by the Lender against, any and all Claims
directly or indirectly arising out of or resulting from any
transaction, act, omission, event or circumstance in any way
connected with the Property or the Loan, including any Claim
arising out of or resulting from (a) Construction of the
Improvements, including any defective workmanship or materials; (b)
any failure by the Borrower to comply with the requirements of any
Laws or to comply with any agreement that applies or pertains to
the Property, including any agreement with a broker or "finder" in
connection with the Loan or other financing of the Property; (c)
any failure by the Borrower to observe and perform any of the
obligations imposed upon the landlord under the Leases; or (d) any
assertion or allegation that the Lender is liable for any act or
omission of the Borrower or any other Person in connection with the
ownership, development, financing, leasing, operation or sale of
the Property; provided, however, that the Borrower shall not be
obligated to indemnify the Lender with respect to any Claim arising
solely from the gross negligence or willful misconduct of the
Lender. The agreements and indemnifications contained in this
Section shall apply to Claims arising both before and after the
repayment of the Loan and shall survive the repayment of the Loan,
any foreclosure or deed, assignment or conveyance in lieu thereof
and any other action by the Lender to enforce the rights and
remedies of the Lender hereunder or under the other Loan
Documents.
Section
4.19
Fees and Expenses. The Borrower
shall pay all reasonable fees, charges, costs and expenses required
to satisfy the conditions of the Loan Documents. Without limitation
of the foregoing, the Borrower will pay, when due, and if paid by
the Lender will reimburse the Lender on demand for, all reasonable
fees and expenses of the Construction Inspector, the title
insurance company, environmental engineers, appraisers, surveyors
and the Lender's counsel in connection with the closing,
administration, modification or any "workout" of the Loan, or the
enforcement of the Lender's rights and remedies under any of the
Loan Documents.
Section
4.20
Appraisals. The Lender may
obtain from time to time an appraisal of all or any part of the
Property, prepared in accordance with written instructions from the
Lender, from a third-party appraiser satisfactory to, and engaged
directly by, the Lender. The cost of one such appraisal, including
any costs for internal review thereof, obtained by the Lender in
each calendar year and the cost of each such appraisal obtained by
the Lender following the occurrence of an Event of Default shall be
borne by the Borrower and shall be paid by the Borrower on
demand.
Section
4.21
Deposit Accounts. The Borrower
shall maintain with the Lender all deposit accounts related to the
Property, including (a) all operating accounts, (b) any reserve or
escrow accounts, (c) during any period in which any Hedging
Agreement shall be in effect, any accounts from which the Borrower
may from time to time authorize the Lender or any Hedging
Counterparty to debit payments due on the Loan and any Hedging
Agreements, and (d) any lockbox, cash management or other account
into which tenants are required from time to time to pay rent. The
Borrower hereby grants to the Lender a security interest in each of
the foregoing accounts.
Section
4.22
Income from Property. The
Borrower shall first apply all income derived from the Property,
including all amounts deposited by NVR with the Borrower, to pay
costs and expenses associated with the development, ownership,
maintenance, operation and sale of the Property, including all
amounts then required to be paid under the Loan Documents, before
using or applying such income for any other purpose. No such income
shall be distributed or paid to any member, partner, shareholder
or, if the Borrower is a trust, to any beneficiary or trustee,
unless and until the Obligations shall have been paid in
full.
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Section
4.23
Representations and Warranties.
The Borrower shall take all actions and shall do all things
reasonably necessary or desirable to cause all of the Borrower's
representations and warranties in this Agreement to be true and
correct, in all material respects, at all times.
Section
4.24
Cash Collateral Account.
Contemporaneously with the execution and delivery of this
Agreement, the Borrower and/or the Guarantor shall deposit the sum
of US$2,600,000 in an account maintained at the Lender designated
as Account No. 1010803641, and styled "Xxxxxxxxx Run Collateral
Account" (hereinafter referred to as the "Cash Collateral Account") and
shall execute and deliver, in favor of the Lender, the Assignment
and Pledge Agreement pursuant to which the Borrower and the
Guarantor shall assign, pledge and grant a security interest to the
Lender in all of their respective right, title and interest,
whether held jointly or severally, together or with others, in and
to the Cash Collateral Account, together with all funds now or at
any time hereafter on deposit therein and all interest earned
thereon, as security and collateral for the due and punctual
payment and performance of the Obligations. The parties hereto
hereby covenant and agree that Lender shall have all of the rights
of a secured party under the Uniform Commercial Code, as adopted in
the State of Maryland, with respect to the Cash Collateral Account
and the funds now or hereafter on deposit therein, as well as all
other rights and remedies at law and in equity. The Borrower hereby
covenants and agrees that, until the Obligations shall be repaid in
full, and the Lender shall have no further obligations to make any
advances under the Loan, neither the Borrower nor the Guarantor or
any party claiming against, under or through the Borrower or the
Guarantor, shall have any right to withdraw sums from the Cash
Collateral Account without the prior written consent of the Lender.
Upon the occurrence of an Event of Default hereunder or under any
of the other Loan Documents (beyond any applicable period to cure),
the Lender is hereby authorized to exercise at any time and from
time to time on behalf of the Borrower and the Guarantor all of the
powers, privileges and rights incident to or granted in connection
with the ownership of the Cash Collateral Account, including,
without limitation, the right to withdraw. If the Lender withdraws
any funds from the Cash Collateral Account pursuant to the terms
hereof, the Lender shall have the right to apply such funds to the
Obligations in such order and manner as the Lender may elect, and
the Borrower shall be liable for all Obligations thereafter
remaining outstanding. The Lender may at any time or from time to
time take any and all further actions with respect to the Cash
Collateral Account (and the funds deposited thereto) as are
authorized herein, by law and by the terms of any of the other Loan
Documents.
Section
4.25
Mandatory Project Absorption.
The Borrower further covenants and agrees to consummate the sale
and settlement of sufficient Lots within the Property in order to
cause the outstanding principal balance of the Land Development
Loan to be reduced from the application of the Release Fees
resulting from such sales (a) by an aggregate amount of
US$4,080,067, on or before December 31, 2016, (b) by an aggregate
amount of US$13,839,267, on or before December 31, 2017, and (c) by
an aggregate amount of US$22,981,130, on or before November 15,
2018 (each of the specified annual amounts of minimum required
cumulative Release Fees being hereinafter referred to as a
"Minimum Cumulative
Curtail Amount"). The failure of the Borrower to achieve any
one or more of the foregoing Minimum Cumulative Curtail Amounts on
or before the applicable date specified above is hereinafter
referred to as a "Sales
Shortfall"). Upon the occurrence of any such Sales
Shortfall, the Borrower shall be required to pay to the Lender a
mandatory principal curtailment on the Loan, within ten (10) days
after written notice from the Lender to the Borrower of the
occurrence of such event, in an amount equal to the difference
between (a) the Minimum Cumulative Curtail Amount for the date in
question, and (b) the sum of (i) the aggregate amount of Release
Fees actually received by the Lender prior to the date upon which
such Sales Shortfall shall be deemed to have occurred from the
sales of Lots within the Property, plus (ii) the full amount of any
mandatory principal curtailment previously paid by the Borrower to
the Lender pursuant to the terms of this Section 4.25 as a result
of the occurrence of any prior Sales Shortfall. In no event shall
the Borrower be entitled to the release of any portion of the
Property as a result of the payment by the Borrower of any such
mandatory principal curtailment unless otherwise agreed to by the
Lender in its sole and absolute discretion.
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Section
4.26
Additional Financing. The
Borrower covenants and agrees that the Lender shall be afforded an
exclusive right and privilege, but without any obligation, to
finance the development of future stages or phases of the Property
as proposed by the Borrower or any Affiliate of the Borrower. The
Lender shall have forty-five (45) days within which to provide a
commitment for such financing after notification by the Borrower
and receipt of all necessary data reasonably required by the Lender
in connection therewith. The Borrower shall have no obligation to
accept any such financing proposal offered by the
Lender.
Article
V
The
Borrower covenants as of the date hereof and until such time as all
Obligations shall be indefeasibly paid and performed in full,
that:
Section
5.1
Conditional Sales. The Borrower
shall not incorporate into the Improvements any property acquired
under a conditional sales contract or lease or as to which the
vendor retains title or a security interest, without the prior
written consent of the Lender.
Section
5.2
Changes to Plans and
Specifications. Except as otherwise expressly provided
below, the Borrower shall not make or permit any changes in the
Plans and Specifications, including any such changes that alter,
diminish or add to the work to be performed or change the design of
the Improvements, without the prior written consent of the Lender
and under such reasonable conditions as the Lender may establish.
The Lender's prior written consent shall not be required, however,
as to any changes in the Plans and Specifications which (a)
individually does not cause the total cost of the Improvements to
be increased or decreased by more than Twenty-Five Thousand Dollars
(US$25,000) or, when added to all previous change orders, does not
cause such total cost to be increased or decreased by more than One
Hundred Thousand Dollars (US$100,000) in the aggregate, (b) does
not result in a material change to the design of the Improvements,
and (c) has been approved in writing by the Engineer, NVR (to the
extent such approval is required by the terms of the NVR
Contracts), and any Governmental Authority or other party whose
approval is required.
Section
5.3
Insurance Policies and Bonds.
The Borrower shall not do or permit to be done anything that would
affect the coverage or indemnities provided for pursuant to the
provisions of any insurance policy, performance bond, labor and
material payment bond or any other bond given in connection with
the Construction of the Improvements.
Section
5.4
Commingling. The Borrower shall
not commingle the funds and other assets of the Borrower relating
to the Property with those of any Affiliate or any other Person,
including those funds and assets of the Borrower that are unrelated
to the Property.
Section
5.5
Additional Debt. The Borrower
shall not incur any debt, secured or unsecured, direct or
contingent (including guaranteeing any obligation), other than (a)
the Loan, (b) deposits under the NVR Contracts or under other
contracts of sale approved by the Lender in accordance with the
terms of the Deed of Trust, (c) advances or trade debt or accrued
expenses incurred in the ordinary course of business of operating
the Property, and (d) unsecured, intercompany indebtedness with
affiliates of the Borrower, the payment of which is expressly
subordinate to the payment of the obligations owing to the Lender
under the Loan. Except as otherwise expressly approved by the
Lender with regard to the NVR Contracts, no other debt may be
secured by the Property, whether senior, subordinate or pari
passu.
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Section
5.6
Controlled Substances. Without
limiting the provisions of Section 4.1, the Borrower shall not, and
shall not suffer or permit any other Person to violate any Laws
affecting the Property, including the Controlled Substances Act, or
which could otherwise result in the occurrence of an Event of
Default under Section 6.19, including the commencement of any
proceedings under the Civil Asset Forfeiture Reform Act. Upon
learning of any conduct contrary to this Section, the Borrower
shall immediately take all actions reasonably expected under the
circumstances to terminate any such use of the Property, including:
(a) to give timely notice to an appropriate law enforcement agency
of information that led the Borrower to know such conduct had
occurred, and (b) in a timely fashion to revoke or make a good
faith attempt to revoke permission for those engaging in such
conduct to use the Property or to take reasonable actions in
consultation with a law enforcement agency to discourage or prevent
the illegal use of the Property.
Section
5.7
Sanctions. The Borrower shall
not, directly or indirectly, use the proceeds of the Loan, or lend,
contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other Person, to fund the
activities of or business with any Person, or in any country or
territory, that, at the time of such funding, is the subject of
Sanctions, or in any other manner that will result in a violation
by any Person (including any Person participating in the
transaction being financed by the Loan, whether as underwriter,
advisor, investor or otherwise) of Sanctions.
Article
VI
The
occurrence or happening, from time to time, of any one or more of
the following shall constitute an Event of Default under this
Agreement:
Section
6.1
Payment Default. The Borrower
fails to pay any Obligation under this Agreement as and when due,
whether on the scheduled due date or upon acceleration, maturity or
otherwise, which failure shall continue for more than ten (10 days
after written notice thereof shall have been sent by the Lender to
the Borrower; excluding, however, from such ten (10) day cure
period, the failure of the Borrower to pay all amounts due under
the Notes on the maturity date thereof (or any extension of such
maturity date); and provided further, however, that the Lender
shall have no obligation to provide written notice to the Borrower
of any monetary default under this Agreement more than twice in any
six (6) month period.
Section
6.2
Default Under Other Loan
Documents. An Event of Default (as defined therein) occurs
under either of the Notes or the Deed of Trust or any other Loan
Document, or the Borrower or the Guarantor fails to promptly pay,
perform, observe or comply with any term, obligation or agreement
contained in any of the Loan Documents (within any applicable grace
or cure period).
Section
6.3
Accuracy of Information;
Representations and Warranties. Any information contained in
any financial statement, schedule, report or any other document
delivered by the Borrower, the Guarantor or any other Person to the
Lender in connection with the Loan proves at any time not to be in
all material respects true and accurate, or the Borrower, the
Guarantor or any other Person shall have failed to state any
material fact or any fact necessary to make such information not
misleading, or any representation or warranty contained in this
Agreement or in any other Loan Document or other document,
certificate or opinion delivered to the Lender in connection with
the Loan, proves at any time to be incorrect or misleading in any
material respect either on the date when made or on the date when
reaffirmed pursuant to the terms of this Agreement.
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Section
6.4
Deposits. The Borrower fails to
deposit funds with the Lender, in the amount requested by Lender,
pursuant to the provisions of Section 4.3, within ten (10) days
from the effective date of a Notice from the Lender requesting such
deposit, or the Borrower fails to deliver to the Lender any
Condemnation Awards or Insurance Proceeds within ten (10) days
after the Borrower's receipt thereof.
Section
6.5
Insurance Obligations. The
Borrower fails to promptly perform or comply with any of the
covenants contained in the Loan Documents with respect to
maintaining insurance, including the covenants contained in Section
4.9, which failure shall continue for more than ten (10) days after
written Notice thereof shall have been sent by the Lender to the
Borrower.
Section
6.6
Other Obligations. The Borrower
fails to promptly perform or comply with any of the Obligations set
forth in this Agreement (other than those expressly described in
other Sections of this Article), and such failure continues uncured
for a period of thirty (30) days after Notice from the Lender to
the Borrower, unless (a) such failure, by its nature, is not
capable of being cured within such period, and (b) within such
period, the Borrower commences to cure such failure and thereafter
diligently prosecutes the cure thereof, and (c) the Borrower causes
such failure to be cured no later than sixty (60) days after the
date of such Notice from the Lender.
Section
6.7
Progress of Construction. The
Borrower fails to commence the Construction of the Improvements on
or before the Construction Commencement Date, or at any time
thereafter, subject to delays occasioned by conditions of Force
Majeure, Construction of the Improvements is abandoned or is
discontinued for a period of more than thirty (30) consecutive
days.
Section
6.8
Damage to Improvements. The
Improvements are substantially damaged or destroyed by fire or
other casualty and the Lender determines, in its reasonable
discretion, that the Improvements cannot be restored and completed
in accordance with the terms and provisions of this Agreement and
the Deed of Trust.
Section
6.9
Lapse of Permits or Approvals.
At any time during the term of the Loan, any permit, license,
certificate or approval that the Borrower is required to obtain
with respect to the construction, operation, development, leasing
or maintenance of the Improvements or the Property lapses or ceases
to be in full force and effect, and the Borrower fails to cause
such permit, license, certificate or approval to be reinstated or
reissued within forty-five (45) after the same shall have lapsed or
ceased to be in effect.
Section
6.10
Completion of Construction.
Unless otherwise agreed to by the Lender, any phase of the
Improvements shall not be completed within ninety (90) days after
the date specified for the completion of such phase in the Project
Schedule, or Completion of Construction does not occur on or before
the required Completion Date in accordance with the Project
Schedule, or the Lender reasonably determines that Completion of
Construction will not occur by the Completion Date in accordance
with the Project Schedule.
Section
6.11
Mechanic's Lien. A lien for the
performance of work or the supply of materials filed against the
Property, or any stop notice served on the Borrower, any Contractor
or the Lender, remains unsatisfied or unbonded for a period of
sixty (60) days after the date of filing or service.
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Section
6.12
Survey Matters. Any Survey
required by the Lender during the period of construction shows any
matter which in the Lender's reasonable judgment would interfere
with, in any material manner, the Construction of the Improvements
or the operation or use of the Property, and such matter is not
removed within a period of thirty (30) days after Notice thereof by
the Lender to the Borrower.
Section
6.13
Contractor Default. Any
Contractor defaults under its Construction Contract in a manner
which the Lender deems to be material, and, unless otherwise agreed
in writing by the Lender, the Borrower fails, within thirty (30)
days thereafter, to exercise its rights and remedies under the
Construction Contract with respect to such default.
Section
6.14
Performance Enjoined or
Prohibited. The Borrower is enjoined or prohibited from
performing any of its obligations under any of the Loan Documents
for a period of more than thirty (30) consecutive days, exclusive
of delays occurring as a result of conditions of Force
Majeure.
Section
6.15
Bankruptcy. The Borrower or the
Guarantor files a bankruptcy petition or makes a general assignment
for the benefit of creditors, or a bankruptcy petition is filed
against the Borrower or the Guarantor and such involuntary
bankruptcy petition continues undismissed for a period of sixty
(60) days after the filing thereof.
Section
6.16
Appointment of Receiver, Trustee,
Liquidator. The Borrower or the Guarantor applies for or
consents in writing to the appointment of a receiver, trustee or
liquidator of the Borrower, the Guarantor, the Property, or all or
substantially all of the other assets of the Borrower or of the
Guarantor, or an order, judgment or decree is entered by any court
of competent jurisdiction on the application of a creditor
appointing a receiver, trustee or liquidator of the Borrower, the
Guarantor, the Property, or all or substantially all of the other
assets of the Borrower or of the Guarantor.
Section
6.17
Judgment. A final nonappealable
judgment for the payment of money is entered against the Borrower
in any amount or against the Guarantor in an amount in excess of
US$100,000, and the
Borrower or the Guarantor fails to discharge the
same, or fails to cause it to be discharged or bonded off to the
Lender's satisfaction, within thirty (30) days from the date of the
entry of such judgment.
Section
6.18
Dissolution; Change in Business
Status. Unless the written consent of the Lender is
previously obtained, all or substantially all of the business
assets of the Borrower are sold, the Borrower is dissolved, or there occurs any
change in the form of business entity through which the
Borrower presently
conducts its business or any merger or consolidation involving the
Borrower; provided, however, that the Lender agrees to not
unreasonably withhold its consent to any change in the form of
business entity through which the Borrower presently conducts its
business or any merger or consolidation involving the Borrower so
long as such change will not have a material adverse effect on the
Borrower, the Loan or the Lender's security therefor.
Section
6.19
Forfeiture. A judicial or
nonjudicial forfeiture or seizure proceeding is commenced by a
Governmental Authority and remains pending with respect to the
Property or any part thereof, on the grounds that the Property or
any part thereof had been used to commit or facilitate the
commission of a criminal offense by any Person pursuant to any Law,
including under the Controlled Substances Act or the Civil Asset
Forfeiture Reform Act.
Section
6.20
Sales Shortfall. The Borrower
fails to comply with the terms of Section 4.25 hereof.
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Section
6.21
Termination of NVR Contracts,
Etc. At any time during the term of the Loan, without the
prior, express written consent of the Lender, (a) any one or more
of the NVR Contracts is terminated or becomes of no further force
or effect for any reason whatsoever, (b) a default or event of
default shall occur under any of the NVR Contracts, which default
or event of default shall continue beyond any applicable grace
and/or cure period provided therefor, or (c) any of the NVR
Contracts is modified or amended in any material manner; provided,
however, that a voluntary termination of any one or more of the NVR
Contracts by NVR in accordance with the express terms thereof shall
not constitute an Event of Default hereunder so long as (i) such
termination was not the result of the exercise by NVR of a
termination right under any one or more of the NVR Contracts
arising from a breach by the Borrower of any of its obligations
under any one or more of the NVR Contracts, (ii) the Borrower shall
pay all interest thereafter becoming due under the Loan from
sources other than the proceeds of the Loan and/or any other sums
then held by the Lender pursuant to the terms of the Loan
Documents, and (iii) within ninety (90) days after the termination
of such NVR Contract or NVR Contracts, the Borrower shall furnish
to the Lender one or more replacement contracts of sale covering
all of the Lots theretofore covered by such terminated NVR
Contract(s) and then remaining subject to the lien of the Deed of
Trust from a purchaser approved by the Lender and in form and
substance, including purchase price thereunder, acceptable to the
Lender in all respects.
Section
6.22
Letters of Credit. Any draft
and/or demand for payment shall be presented to or made upon the
Lender under any Letter of Credit, and the Borrower fails to pay to
the Lender all sums owing to the Lender on account thereof,
including all accrued and unpaid interest thereon, within ten (10)
days after written notice thereof shall have been sent by the
Lender to the Borrower.
Article
VII
Section
7.1
Remedies on Default. Upon the
happening of any Event of Default (including the expiration of any
applicable notice, grace and /or cure period), the Lender shall
have the right, in addition to any other rights or remedies
available to the Lender under the Deed of Trust or any of the other
Loan Documents or under applicable Law, to exercise any one or more
of the following rights and remedies:
(a) The
Lender may terminate its obligation to advance any further
principal of the Loan pursuant to this Agreement by Notice to the
Borrower.
(b) The
Lender may accelerate all of the Borrower's Obligations under the
Loan Documents, whether or not matured and regardless of the
adequacy of any other collateral securing the Loan, whereupon such
Obligations shall become immediately due and payable, without
notice of default, acceleration or intention to accelerate,
presentment or demand for payment, protest or notice of nonpayment
or dishonor, or notices or demands of any kind or character (all of
which are hereby waived by the Borrower).
(c) The
Lender may apply to any court of competent jurisdiction for, and
obtain appointment without bond of, a receiver for the
Property.
(d) The
Lender may set off the amounts due to the Lender under the Loan
Documents, whether or not matured and regardless of the adequacy of
any other collateral securing the Loan, against any and all
accounts, credits, money, securities or other property of the
Borrower now or hereafter on deposit with, held by or in the
possession of the Lender to the credit or for the account of the
Borrower, without notice to or the consent of the
Borrower.
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(e) The
Lender may enter into possession of the Property and perform any
and all work and labor necessary to complete the Construction of
the Improvements (whether or not in accordance with the Plans and
Specifications) and to employ watchmen to protect the Property and
the Improvements. All sums reasonably expended by the Lender for
such purposes shall be deemed to have been advanced to the Borrower
under the Notes and shall be secured by the Deed of Trust. For this
purpose, the Borrower hereby constitutes and appoints the Lender
its true and lawful attorney-in-fact with full power of
substitution, which power is coupled with an interest and cannot be revoked, to complete the work
in the name of the Borrower, and hereby empowers said attorney or
attorneys, in the name of the Borrower or the Lender:
(i) To
use any funds of the Borrower including any balance which may be
held by the Lender and any funds which may remain unadvanced
hereunder for the purpose of completing the Construction of the
Improvements;
(ii) To
make such additions and changes and corrections to the Plans and
Specifications as shall be necessary or desirable in the judgment
of the Lender to complete the Construction of the
Improvements;
(iii) To
employ such contractors, subcontractors, agents, architects and
inspectors as shall be necessary or desirable for said
purpose;
(iv) To
pay, settle or compromise all existing bills and claims which are
or may be liens against the Property, or may be necessary or
desirable for the completion of the work or the clearance of title
to the Property;
(v) To
execute all applications and certificates which may be required in
the name of the Borrower;
(vi) To
enter into, enforce, modify or cancel Leases and to fix or modify
Rents on such terms as the Lender may consider proper;
(vii) To
file for record, at the Borrower's cost and expense and in the
Borrower's name, any notices of completion, notices of cessation of
labor, or any other notices that the Lender in its sole and
absolute discretion may consider necessary or desirable to protect
its security;
(viii) To
prosecute and defend all actions or proceedings in connection with
the Construction of the Improvements and to take such actions and
to require such performance as the Lender may deem necessary;
and
(ix) To
do any and every act with respect to the Construction of the
Improvements which the Borrower may do in its own
behalf.
(f) The
Lender may exercise any and all other rights and remedies under
this Agreement, the Loan Documents or at Law, equity or
otherwise.
Without
limitation of the foregoing, upon the occurrence of an actual or
deemed entry of an order for relief with respect to the Borrower
under the Bankruptcy Code (Title 11 of the United States Code, as
in effect from time to time), any obligation of the Lender to make
advances shall automatically terminate, and the unpaid principal
amount of the Loan outstanding and all interest and other amounts
payable hereunder and under the Notes and other Loan Documents
shall automatically become due and payable, in each case without
further act of the Lender.
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Section
7.2
No Release or Waiver; Remedies
Cumulative and Concurrent. The Borrower shall not be
relieved of any Obligation by reason of the failure of the Lender
to comply with any request of the Borrower or of any other Person
to take action to foreclose on the Property under the Deed of Trust
or otherwise to enforce any provision of the Loan Documents, or by
reason of the release, regardless of consideration, of all or any
part of the Property. No delay or omission of the Lender to
exercise any right, power or remedy accruing upon the happening of
an Event of Default shall impair any such right, power or remedy or
shall be construed to be a waiver of any such Event of Default or
any acquiescence therein. No delay or omission on the part of the
Lender to exercise any option for acceleration of the maturity of
the Obligations, or for foreclosure of the Deed of Trust following
any Event of Default as aforesaid, or any other option granted to
the Lender hereunder in any one or more instances, or the
acceptance by the Lender of any partial payment on account of the
Obligations shall constitute a waiver of any such Event of Default
and each such option shall remain continuously in full force and
effect. No remedy herein conferred upon or reserved to the Lender
is intended to be exclusive of any other remedies provided for in
the Loan Documents, and each and every such remedy shall be
cumulative, and shall be in addition to every other remedy given
hereunder, or under the Loan Documents, or now or hereafter
existing at Law or in equity or by statute. Every right, power and
remedy given by the Loan Documents to Lender shall be concurrent
and may be pursued separately, successively or together against the
Borrower or the Property or any part thereof, and every right,
power and remedy given by the Loan Documents may be exercised from
time to time as often as may be deemed expedient by the Lender. All
notice and cure periods provided in this Agreement or in any Loan
Document shall run concurrently with any notice or cure periods
provided by Law.
Article
VIII
Section
8.1
Further Assurances; Authorization to
File Documents; No Merger. At any time, and from time to
time, upon request by the Lender, the Borrower will, at the
Borrower's expense, (a) correct any defect, error or omission which
may be discovered in the form or content of any of the Loan
Documents, and (b) make, execute, deliver and record, or cause to
be made, executed, delivered and recorded, any and all further
instruments, certificates and other documents as may, in the
opinion of the Lender, be necessary or desirable in order to
complete, perfect or continue and preserve the lien of the Deed of
Trust. Upon any failure by the Borrower to do so, the Lender may
make, execute and record any and all such instruments, certificates
and other documents for and in the name of the Borrower, all at the
sole expense of the Borrower, and the Borrower hereby appoints the
Lender the agent and attorney-in-fact of the Borrower to do so,
this appointment being coupled with an interest and being
irrevocable. Without limitation of the foregoing, the Borrower
irrevocably authorizes the Lender at any time and from time to time
to file any initial financing statements, amendments thereto and
continuation statements deemed necessary or desirable by the Lender
to establish or maintain the validity, perfection and priority of
the security interests granted in the Deed of Trust or hereunder, and the Borrower ratifies any
such filings made by the Lender prior to the date hereof. In
addition, at any time, and from time to time, upon request by the
Lender, the Borrower will, at the Borrower's expense, provide any
and all further instruments, certificates and other documents as
may, in the opinion of the Lender, be necessary or desirable in
order to verify the Borrower's identity and background in a manner
satisfactory to the Lender. As a material inducement to the Lender
to enter into this Agreement, the Borrower acknowledges and agrees
that each of its Indemnification Agreements (as that term is
defined below) (a) is a continuing, separate agreement that shall
survive the termination of this Agreement, the other Loan Documents
and the payment and performance of all of the other Obligations and
(b) shall not be merged with any judgment or judgments with respect
to the Obligations. The term "Indemnification Agreements"
means the collective reference to each provision of this Agreement
or any of the Loan Documents for indemnification of the Lender, its
parent, Affiliates and/or their respective officers, directors,
shareholders, employees, attorneys, other professionals, and agents
and to each of the agreements of the Borrower to pay or reimburse
the Lender for costs and expenses (including attorneys' fees) of
collection or otherwise.
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Section
8.2
No Warranty by the Lender. By
accepting or approving anything required to be observed, performed
or fulfilled by the Borrower or to be given to the Lender pursuant
to this Agreement, including any certificate, Survey, receipt,
appraisal or insurance policy, the Lender shall not be deemed to
have warranted or represented the sufficiency, legality,
effectiveness or legal effect of the same, or of any term,
provision or condition thereof and any such acceptance or approval
thereof shall not be or constitute any warranty or representation
with respect thereto by the Lender.
Section
8.3
Standard of Conduct of Lender.
Except as otherwise expressly provided in this Agreement, Nothing
contained herein or in any other Loan Document shall limit the
right of the Lender to exercise its business judgment or to act, in
the context of the granting or withholding of any advance or
consent under this Agreement or any other Loan Document, in a
subjective manner, whether or not objectively reasonable under the
circumstances, so long as the Lender's exercise of its business
judgment or action is made or undertaken in good faith. Except
under those provisions where the Lender is required to act
reasonably, the Borrower and the Lender intend by the foregoing to
set forth and affirm their entire understanding with respect to the
standard pursuant to which the Lender's duties and obligations are
to be judged and the parameters within which the Lender's
discretion may be exercised hereunder and under the other Loan
Documents. As used herein, "good faith" means honesty in fact in
the conduct and transaction concerned.
Section
8.4
No Partnership. Nothing
contained in this Agreement shall be construed in a manner to
create any relationship between the Borrower and the Lender other
than the relationship of borrower and lender and the Borrower and
the Lender shall not be considered partners or co-venturers for any
purpose on account of this Agreement.
Section
8.5
Severability. In the event any
one or more of the provisions of this Agreement or any of the other
Loan Documents shall for any reason be held to be invalid, illegal
or unenforceable, in whole or in part or in any other respect, or
in the event any one or more of the provisions of any of the Loan
Documents operates or would prospectively operate to invalidate
this Agreement or any of the other Loan Documents, then and in
either of those events, at the option of the Lender, such provision
or provisions only shall be deemed null and void and shall not
affect the validity of the remaining Obligations, and the remaining
provisions of the Loan Documents shall remain operative and in full
force and effect and shall in no way be affected, prejudiced or
disturbed thereby.
Section
8.6
Authorized Signers. The Lender
is authorized to rely upon the continuing authority of the
Authorized Signers to bind the Borrower with respect to all matters
pertaining to the Loan and the Loan Documents, including the
submission of draw requests and the selection of interest rates.
Such authorization may be changed only upon written notice
addressed to the Lender accompanied by evidence, reasonably
satisfactory to the Lender, of the authority of the Person giving
such notice. Such notice shall be effective not sooner than five
(5) Banking Days following receipt thereof by the
Lender.
Section
8.7
Notices. All Notices required
or which any party desires to give hereunder or under any other
Loan Document shall be in writing and, unless otherwise
specifically provided in such other Loan Document, shall be deemed
sufficiently given or furnished if delivered by personal delivery,
by nationally recognized overnight courier service or by certified
United States mail, postage prepaid, addressed to the party to whom
directed at the applicable address set forth below (unless changed
by similar notice in writing given by the particular party whose
address is to be changed). In addition, Notices may be sent by
electronic mail to the following addresses (xxxx@xxx.xxx.xx;
xxxxxxx@xxx.xxx.xx; xxx@xxx.xxx.xx and xxxxxxx@xxx.xxx.xx) provided
that a duplicate copy of such Notice is sent by personal delivery,
mail or overnight courier service in the manner hereinabove
provided. Any Notice shall be deemed to have been given (a) at the
time of personal delivery or delivery by electronic mail, or (b) in
the case of courier, one Banking Day after the delivery of such
Notice to the courier service, or (c) in the case of mail, three
(3) Banking Days after the date when deposited in the mail in the
manner prescribed above; provided that service of a Notice required
by any applicable statute shall be considered complete when the
requirements of that statute are met. Notwithstanding the
foregoing, no notice of change of address shall be effective except
upon actual receipt. This Section shall not be construed in any way
to affect or impair any waiver of notice or demand provided in this
Agreement or in any other Loan Document or to require giving of
notice or demand to or upon any Person in any situation or for any
reason.
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The
address of the Borrower is:
SeD
MARYLAND DEVELOPMENT, LLC
c/o SeD
Development Management, LLC
Hampden
Square
0000
Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx
00000
Attn:
Conn
Xxxxxxxx
Xxxxxxx
XxxXxxxxx
With a
copy to:
SeD
Xxxxxxxxx, LLC
c/o
Singapore eDevelopment Limited
0
Xxxxxxx Xxxxxxxxx #00-00X
Xxxxxx
Xxxxx 0
Xxxxxxxxx
000000
Attn:
Xxx Xxxx
Xxxx Xxxx
Lup
The
address of the Lender is:
THE
BANK OF HAMPTON ROADS
Commercial Real
Estate Banking
00000
Xxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx
00000
(a) Each
and every one of the covenants, terms, provisions and conditions of
this Agreement and the Loan Documents shall apply to, bind and
inure to the benefit of the Borrower, its successors and those
assigns of the Borrower consented to in writing by the Lender, and
shall apply to, bind and inure to the benefit of the Lender and the
endorsees, transferees, successors and assigns of the Lender, and
all Persons claiming under or through any of them.
(b) The
Borrower agrees not to transfer, assign, pledge or hypothecate any
right or interest in any payment or advance due pursuant to this
Agreement, or any of the other benefits of this Agreement, without
the prior written consent of the Lender, which consent may be
withheld by the Lender in its sole and absolute discretion. Any
such transfer, assignment, pledge or hypothecation made or
attempted by the Borrower without the prior written consent of the
Lender shall be void and of no effect. No consent by the Lender to
an assignment shall be deemed to be a waiver of the requirement of
prior written consent by the Lender with respect to each and every
further assignment and as a condition precedent to the
effectiveness of such assignment.
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(c) The
Lender may sell or offer to sell the Loan or interests therein to
one or more assignees or participants. The Borrower shall execute,
acknowledge and deliver any and all instruments reasonably
requested by the Lender in connection therewith, and to the extent,
if any, specified in any such assignment or participation, such
assignee(s) or participant(s) shall have the same rights and
benefits with respect to the Loan Documents as such Person(s) would
have if such Person(s) were the Lender hereunder. The Borrower, on
its own behalf and on behalf of the other Borrower Parties (as
hereinafter defined), hereby (i) acknowledges and agrees that the
Lender is entitled, at any time and from time to time, without
notice to or further consent by the Borrower or any other Borrower
Party, to sell, transfer, assign or otherwise convey, and to
attempt to sell, transfer, assign or otherwise convey, the Loan and
the Loan Documents, or any interest herein or therein or rights
with respect hereto or thereto (including, but not limited to,
participation interests, syndication interests, servicing rights
and beneficial interests issued in connection with mortgage-backed
or similar certificates or securities) to any person or entity, and
(ii) irrevocably authorizes the Lender, and any person or entity
acting on behalf of the Lender, to deliver and disclose to any
Person any and all information and materials related to the Loan,
the Loan Documents, the Property and/or the Borrower Parties now or
hereafter in the Lender's possession (collectively, the
"Information"). The
Information may include, but shall not be limited to, original
and/or copies of financial statements, financial projections,
appraisals, studies, reports, business plans, permits, licenses,
approvals, organizational documents, resolutions, consents,
documents (including, but not limited to, the Loan Documents),
plans, drawings, specifications, contracts, bonds, credit reports,
payment histories, account statements and applications (including,
but not limited to, the application for the Loan). As used herein,
the term "Borrower
Parties" means, collectively, the Borrower, the Guarantor
and all other obligors of all or any obligations of the Borrower
and/or any other person or entity to the Lender in connection with
the Loan; all subsidiaries and affiliates of the Borrower, the
Guarantor and/or any such other obligor; the members, partners,
managers, stockholders, officers, directors, employees, agents,
contractors and representatives of the Borrower, the Guarantor or
any such other obligor and/or any such subsidiary or affiliate; and
any other person or entity now or hereafter owning a direct or
indirect interest in the Borrower, the Guarantor, any such obligor
and/or any such subsidiary or affiliate.
Section
8.9
Modification; Waiver. None of
the terms or provisions of this Agreement may be changed, waived,
modified, discharged or terminated except by instrument in writing
executed by the party or parties against whom enforcement of the
change, waiver, modification, discharge or termination is asserted.
None of the terms or provisions of this Agreement shall be deemed
to have been abrogated or waived by reason of any failure or
failures to enforce the same.
Section
8.10
Third Parties; Benefit. All
conditions to the obligation of the Lender to make advances
hereunder are imposed solely and exclusively for the benefit of the
Lender and its assigns and no other Persons shall have standing to
require satisfaction of such conditions in accordance with their
terms or be entitled to assume that the Lender will refuse to make
advances in the absence of strict compliance with any or all
thereof and no other Person shall, under any circumstances, be
deemed to be the beneficiary of such conditions, any or all of
which may be freely waived in whole or in part by the Lender at any
time in the sole and absolute exercise of its discretion. The terms
and provisions of this Agreement are for the benefit of the parties
hereto and, except as herein specifically provided, no other Person
shall have any right or cause of action on account
thereof.
Section
8.11
Rules of Construction. The
words "hereof," "herein," "hereunder," "hereto," and other words of
similar import refer to this Agreement in its entirety. The terms
"agree" and "agreements" mean and include "covenant" and
"covenants." The words "include" and "including" shall be
interpreted as if followed by the words "without limitation." The
captions and headings contained in this Agreement are included
herein for convenience of reference only and shall not be
considered a part hereof and are not in any way intended to define,
limit or enlarge the terms hereof. All references (a) made in the
neuter, masculine or feminine gender shall be deemed to have been
made in all such genders, (b) made in the singular or plural number
shall be deemed to have been made, respectively, in the plural or
singular number as well, (c) to the Loan Documents are to the same
as extended, amended, restated, supplemented or otherwise modified
from time to time unless expressly indicated otherwise, (d) to the
Land, the Improvements or the Property shall mean all or any
portion of each of the foregoing, respectively, and (e) to
Articles, Sections and Schedules are to the respective Articles,
Sections and Schedules contained in this Agreement unless expressly
indicated otherwise.
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Section
8.12
Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall
be considered an original for all purposes; provided, however, that
all such counterparts shall together constitute one and the same
instrument.
Section
8.13
Signs; Publicity. At the
Lender's request, but at the expense of the Borrower, the Borrower
shall place a sign at a location on the Property reasonably
satisfactory to the Lender, which sign shall recite, among other
things, that the Lender is financing the Construction of the
Improvements. The Borrower expressly authorizes the Lender to
prepare and to furnish to the news media for publication from time
to time news releases with respect to the Property, specifically to
include releases detailing the Lender's involvement with the
financing of the Property.
Section
8.14
Governing Law. This Agreement
shall be governed by and construed, interpreted and enforced in
accordance with the Laws of the State.
Section
8.15
Time of Essence. Time shall be
of the essence for each and every provision of this Agreement of
which time is an element.
Section
8.16
(a) The
Lender and the Borrower agree that certain data related to the Loan
(including confidential information, documents, applications and
reports) may be transmitted electronically, including transmission
over the Internet. This data may be transmitted to, received from
or circulated among agents and representatives of the Borrower
and/or the Lender and their Affiliates and other Persons involved
with the subject matter of this Agreement.
(b) The
Borrower may elect to deliver documentation required pursuant to
the Closing Checklist or Schedule 5 hereof electronically, and if
so delivered, such documentation shall be deemed to have been
delivered on the date (i) on which the Borrower posts such
documents, or provides a link thereto on the Borrower's website on
the Internet at the website address listed on the Borrower's
signature page to this Agreement; or (ii) on which such documents
are posted on the Borrower's behalf on an Internet or intranet
website, if any, to which the Lender has access (whether a
commercial, third-party website or whether sponsored by the Lender;
provided that: (i) the Borrower shall deliver paper copies of such
documents to the Lender upon its request to the Borrower to deliver
such paper copies until a written request to cease delivering paper
copies is given by the Lender, and (ii) the Borrower shall notify
the Lender (by facsimile or electronic mail) of the posting of any
such documents and provide to the Lender by electronic mail
electronic versions (i.e., soft copies) of such documents. The
Borrower agrees that in the event that the Borrower would like to
update or revise a document previously posted to the Borrower
controlled website, the Borrower shall notify the Lender (by
facsimile or electronic mail) that such document has been revised
and an updated version has been posted.
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(c) The
Borrower acknowledges and agrees that (i) there are risks
associated with the use of electronic transmission and Borrower
controlled websites and that the Lender does not control the method
of transmittal, the service providers or the operational or
technical issues that could occur; (ii) the Lender has no
obligation or responsibility whatsoever and assumes no duty or
obligation for the security, receipt or third party interception of
any such electronic transmission of data or the Borrower controlled
website, or any operational or technical issues that may occur with
the electronic transmission of data or the Borrower controlled
website; and (iii) the Borrower will release, hold harmless and
indemnify the Lender from any claim, damage or loss, including that
arising in whole or part from the Lender's strict liability or
sole, comparative or contributory negligence, which is related to
the electronic transmission of data or the Borrower controlled
website.
Section
8.17
Forum. Each Party hereby
irrevocably submits generally and unconditionally for itself and in
respect of its property to the non-exclusive jurisdiction of any
state court or any United States federal court sitting in the State
specified in the governing law section of this Agreement and to the
non-exclusive jurisdiction of any state court or any United States
federal court sitting in the state in which any of the Property is
located, over any Dispute. Each Party hereby irrevocably waives, to
the fullest extent permitted by Law, any objection that such Party
may now or hereafter have to the laying of venue in any such court
and any claim that any such court is an inconvenient forum. The
Borrower hereby agrees and consents that, in addition to any
methods of service of process provided for under applicable Law,
all service of process in any such suit, action or proceeding in
any state court or any United States federal court sitting in the
State specified in the governing law section of this Agreement or
in which any of the Property is located may be made by certified or
registered mail, return receipt requested, directed to the Borrower
at its address for notice set forth in this Agreement, or at a
subsequent address of which the Lender received actual notice from
the Borrower in accordance with the notice section of this
Agreement, and service so made shall be complete five (5) days
after the same shall have been so mailed. Nothing herein shall
affect the right of the Lender to serve process in any manner
permitted by Law or limit the right of the Lender to bring
proceedings against the Borrower in any other court or
jurisdiction.
Section
8.18
WAIVER OF JURY
TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING OR ACTION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
NOTES, THE DEED OF TRUST, OR ANY OTHER DOCUMENT EXECUTED IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).
EACH
PARTY HERETO HEREBY:
(a) CERTIFIES
THAT NO REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PERSON HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER;
(b) ACKNOWLEDGES
THAT THIS WAIVER AND THE PROVISIONS OF THIS SECTION WERE A MATERIAL
INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN
DOCUMENTS;
(c) CERTIFIES
THAT THIS WAIVER IS KNOWINGLY, WILLINGLY, AND VOLUNTARILY
MADE;
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(d) AGREES
AND UNDERSTANDS THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY
JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH PROCEEDING OR
ACTION, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO
THIS OR ANY OTHER AGREEMENT, AND FURTHER AGREES THAT SUCH PARTY
SHALL NOT SEEK TO CONSOLIDATE ANY SUCH PROCEEDING OR ACTION WITH
ANY OTHER PROCEEDING OR ACTION IN WHICH A JURY TRIAL CANNOT BE OR
HAS NOT BEEN WAIVED;
(e) AGREES
THAT THE BORROWER AND THE LENDER ARE EACH HEREBY AUTHORIZED TO FILE
A COPY OF THIS SECTION IN ANY PROCEEDING OR ACTION AS CONCLUSIVE
EVIDENCE OF THIS WAIVER OF JURY TRIAL; AND
(f) REPRESENTS
AND WARRANTS THAT SUCH PARTY HAS BEEN REPRESENTED IN THE SIGNING OF
THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY
INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT
IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH
COUNSEL.
Section
8.19
USA Patriot Act Notice. The
Lender hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "Act"), the Lender is required
to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the
Borrower and other information that will allow the Lender to
identify the Borrower in accordance with the Act. The Borrower
shall, promptly following a request by the Lender, provide all
documentation and other information that the Lender requests in
order to comply with its ongoing obligation under "know your customer" and
anti-money laundering rules and regulations, including the
Act.
Section
8.20
Entire Agreement. The Loan
Documents constitute the entire understanding and agreement between
the Borrower and the Lender with respect to the transactions
arising in connection with the Loan, and supersede all prior
written or oral understandings and agreements between the Borrower
and the Lender with respect to the matters addressed in the Loan
Documents. In particular, and without limitation, the terms of any
commitment by the Lender to make the Loan are merged into the Loan
Documents. Except as incorporated in writing into the Loan
Documents, there are no representations, understandings,
stipulations, agreements or promises, oral or written, with respect
to the matters addressed in the Loan Documents. If there is any
conflict between the terms, conditions and provisions of this
Agreement and those of any other instrument or agreement, including
any other Loan Document, the terms, conditions and provisions of
this Agreement shall prevail.
[Signatures
contained on following pages]
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|
WITNESS OR
ATTEST:
/s/
|
BORROWER:
SeD MARYLAND
DEVELOPMENT, LLC
By /s/ Xxxxxxx X.
Xxxxx
(SEAL)
Xxxxxxx X. Xxxxx
Manager
|
STATE
OF MARYLAND, COUNTY OF XXXXXXXXXX, TO WIT:
I
HEREBY CERTIFY, that on this 20th day of November, 2015, before me,
the undersigned Notary Public of said State, personally appeared
Xxxxxxx X. Xxxxx, who acknowledged himself to be the Manager of SeD
Development Management, LLC, a Delaware limited liability company
and the Manager of SeD Maryland Development, LLC, a Delaware
limited liability company, known to me (or satisfactorily proven)
to be the person whose name is subscribed to the within instrument,
and acknowledged that he executed the same for the purposes therein
contained as the duly authorized Manager of said limited liability
company by signing the name of the limited liability company by
himself as Manager.
WITNESS
my hand and Notarial Seal.
/s/ Xxxxx Xxx
Notary
Public
My
Commission Expires: 5/18/16
[Signatures
continued on following page]
-
25
-
|
WITNESS OR
ATTEST:
/s/
|
LENDER:
THE BANK OF HAMPTON
ROADS
By /s/ Xxxx X. Xxxxxxxx,
Xx.
(SEAL)
Xxxx X. Xxxxxxxx, Xx.
Senior
Vice President
|
COMMONWEALTH
OF VIRGINIA, COUNTY OF HENRICO, TO WIT:
I
HEREBY CERTIFY, that on this 20 day of November, 2015, before me,
the undersigned Notary Public of said State, personally appeared
Xxxx X. Xxxxxxxx, Xx., who acknowledged himself to be a Senior Vice
President of The Bank of Hampton Roads, a Virginia banking
corporation, personally well known to me (or satisfactorily proven)
to be the person whose name is subscribed to the within instrument,
and acknowledged that he executed the same for the purposes therein
contained as the duly authorized Senior Vice President of said
banking corporation by signing the name of the banking corporation
by himself as Senior Vice President.
WITNESS
my hand and Notarial Seal.
/s/ Xxxxx Xxxxx
Xxxxxxxx
Notary
Public
My
Commission Expires: 11-30-18
-
26
-
Schedule 1
Unless
the context otherwise specifies or requires, the following terms
shall have the meanings herein specified, such definitions to be
applicable equally to the singular and the plural forms of such
terms and to all genders:
"Accounts Payable List" means
(a) a written summary from the Borrower of all accounts paid or
payable for soft costs associated with the applicable draw request
identifying each such account and the invoice amount due, and shall
be in form and substance acceptable to the Lender, together with
(b) a copy of all invoices, paid receipts, statements of accounts
and other documentation relating to the matters described in such
summary. For purposes of this definition, "soft costs" includes
costs and expenses of development other than those attributable to
the construction of the physical Improvements, including but not
limited to architect's fees, consulting fees, management fees,
abatement expenses, legal fees, testing and inspection fees,
connection charges, and other similar fees and
expenses.
"Affiliate" means, with respect
to any Person, another Person that directly, or indirectly through
one or more intermediaries, Controls or is Controlled by or is
under common Control with the Person specified.
"Approved Manager" means the
Borrower, an Affiliate of the Borrower or any other reputable and
creditworthy property manager, subject to the prior written
approval of the Lender, which written approval may be evidenced by
e-mail confirmation, not to be unreasonably withheld, with a
portfolio of properties comparable to the Property under active
management.
"Assignment and Pledge
Agreement" means the Assignment and Pledge of Collateral
Account of even date herewith executed by the Borrower and the
Guarantor for the benefit of the Lender, as the same may from time
to time be extended, amended, restated, supplemented or otherwise
modified.
"Authorized Signer" means each
of Xxxx Xxxx Lup, Xxxx Xxx Xxxxxxx Xxxxx and Xxx Xxxx, acting
alone, or any other representative of the Borrower duly designated
and authorized by the Borrower to bind the Borrower with respect to
all matters pertaining to the Loan and the Loan Documents,
including the submission of draw requests and the selection of
interest rates.
"Banking Day" means any day that
is not a Saturday, Sunday or banking holiday in the
State.
"Borrower" has the meaning set
forth in the introductory paragraph of this Agreement.
"Borrower's Deposit Account"
means an account established with the Lender pursuant to the terms
of Section 4.3.
"Borrower Parties" shall have
the meaning ascribed to such term in Section 8.8.
"Budget" means the breakdown of
hard costs and soft costs attached hereto as Schedule 3, as the
same may be revised from time to time with the written approval of
Lender.
"Cash Collateral Account" has
the meaning ascribed to such term in Section 4.24
hereof.
"Casualty" means any act or
occurrence of any kind or nature that results in damage, loss or
destruction to the Property.
SCHEDULE 1-PAGE
1
"CCRC Multifamily Parcel" shall
have the meaning ascribed to such term in Schedule 7
hereof.
"Civil Asset Forfeiture Reform
Act" means the Civil Asset Forfeiture Reform Act of 2000 (18
U.S.C. Sections 983 et seq.), as amended from time to time, and any
successor statute.
"Claim" means any liability,
suit, action, claim, demand, loss, expense, penalty, fine, judgment
or other cost of any kind or nature whatsoever, including fees,
costs and expenses of attorneys, consultants, contractors and
experts.
"Closing Checklist" means that
certain Closing Requirements and Checklist setting forth the
conditions for closing the Loan.
"Code" means the Internal
Revenue Code of 1986, as amended.
"Company" shall have the meaning
set forth in Section 3.18.
"Completion Date" shall mean the
earlier to occur of (a) the date required for the completion of the
Improvements pursuant to the terms of the NVR Contracts, or (b)
August 15, 2018. Time shall be of the essence for all purposes
hereof.
"Completion of Construction"
means, with respect to the Construction of the Improvements or any
component thereof, the satisfaction of all of the conditions of
Section 4 of Schedule 5.
"Condemnation" means any taking
of title to, use of, or any other interest in the Property under
the exercise of the power of condemnation or eminent domain,
whether temporarily or permanently, by any Governmental Authority
or by any other Person acting under or for the benefit of a
Governmental Authority.
"Condemnation Awards" means any
and all judgments, awards of damages (including severance and
consequential damages), payments, proceeds, settlements, amounts
paid for a taking in lieu of Condemnation, or other compensation
heretofore or hereafter made, including interest thereon, and the
right to receive the same, as a result of, or in connection with,
any Condemnation or threatened Condemnation.
"Construction Commencement Date"
shall mean June 1, 2016. Time shall be of the essence for all
purposes hereof.
"Construction Contract" means
any contract for the Construction of the Improvements between the
Borrower and a Contractor, and approved in writing by the Lender,
as the same may be amended from time to time with the prior written
approval of the Lender.
"Construction Inspector" means a
Person appointed or designated by the Lender from time to time to
inspect the progress of the Construction of the Improvements and
the conformity of construction with the Plans and Specifications,
the Budget and the Project Schedule, and to perform such other acts
and duties for such other purposes as the Lender may from time to
time deem appropriate or as may be required by the terms of this
Agreement.
"Construction Inspector Report"
means a written report from the Construction Inspector due to the
Lender on a specified predetermined day of each month, and/or on a
day prior to the disbursement of funds, acceptable to the
Lender.
SCHEDULE 1-PAGE
2
"Construction of the
Improvements" means the development of the Land and the
construction of the Improvements as contemplated by the Plans and
Specifications.
"Contractor" means any
contractor, laborer or material supplier engaged by the Borrower in
connection with the Construction of the Improvements, and its or
their successors and permitted assigns.
"Control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or
otherwise. "Controlling" or "Controlled" have meanings
correlative thereto.
"Controlled Substances Act"
means the Controlled Substances Act (21 U.S.C. Sections 801 et
seq.), as amended from time to time, and any successor
statute.
"Cumulative Loan Advance Limit"
means US$26,000,000, exclusive of any advance made by the Lender on
or about the date of this Agreement to pay a portion of the
acquisition cost of the Land, so long as such advance is fully
repaid to the Lender within fifteen (15) days after the date of
such advance.
"Deed of Trust" means the Deed
of Trust, Assignment and Security Agreement of even date herewith
given by the Borrower in favor of the Lender to secure the
Obligations, as the same may from time to time be extended,
amended, restated, supplemented or otherwise modified.
"Default" means an event or
circumstance that, with the giving of Notice or lapse of time, or
both, would constitute an Event of Default under the provisions of
this Agreement.
"Deferred Equity" has the
meaning ascribed to such term in Schedule 5.
"Dispute" means any controversy,
claim or dispute between or among the parties to this Agreement,
including any such controversy, claim or dispute arising out of or
relating to (a) this Agreement, (b) any other Loan Document, (c)
any related agreements or instruments, or (d) the transaction
contemplated herein or therein (including any claim based on or
arising from an alleged personal injury or business
tort).
"Engineer" means any engineer
engaged by the Borrower in connection with the Construction of the
Improvements, and its successors and permitted
assigns.
"Engineer's Contract" means any
contract for engineering services relating to the Construction of
the Improvements between the Borrower and an engineer, and
reasonably approved in writing by the Lender, as the same may be
amended from time to time with the prior written approval of the
Lender, which approval shall not be unreasonably
withheld.
"Environmental Agreement" means
the Environmental Indemnification Agreement of even date herewith
executed by the Borrower and the Guarantor in favor of the Lender
pertaining to the Property, as the same may from time to time be
extended, amended, restated or otherwise modified.
"ERISA" means the Employee
Retirement Income Security Act of 1974, as amended.
"Event of Default" means any
event or circumstance specified in Article VI and the continuance
of such event or circumstance beyond the applicable grace and/or
cure periods therefor, if any, set forth in Article VI.
SCHEDULE 1-PAGE
3
"Expenses" means all reasonable
fees, charges, costs and expenses of any nature whatsoever incurred
at any time and from time to time (whether before or after an Event
of Default) by the Lender in making, funding, administering or
modifying the Loan, in negotiating or entering into any "workout"
of the Loan, or in exercising or enforcing any rights, powers and
remedies provided in the Deed of Trust or any of the other Loan
Documents, including reasonable attorneys' fees, court costs,
receiver's fees, management fees and costs incurred in the repair,
maintenance and operation of, or taking possession of, or selling,
the Property.
"Financial Statements" means (i)
for each reporting party other than an individual, a balance sheet,
income statement, statements of cash flow and amounts and sources
of contingent liabilities, a reconciliation of changes in equity
and liquidity verification, cash flow projections, real estate
schedules providing details on each individual real property in the
reporting party's portfolio, including, but not limited to raw
land, land under development, construction in process and
stabilized properties and unless Lender otherwise consents,
consolidated and consolidating statements if the reporting party is
a holding company or a parent of a subsidiary entity; and (ii) for
each reporting party who is an individual, a balance sheet,
statements of cash flow and amounts and sources of contingent
liabilities, sources and uses of cash and liquidity verification,
cash flow projections, real estate schedules providing details on
each individual real property in the reporting party's portfolio,
including, but not limited to raw land, land under development, and
unless Lender otherwise consents, Financial Statements for each
entity owned or jointly owned by the reporting party. For purposes
of this definition and any covenant requiring the delivery of
Financial Statements, each party for whom Financial Statements are
required is a "reporting
party" and a specified period to which the required
Financial Statements relate is a "reporting period."
"Force Majeure" means strikes,
lock-outs, war, civil disturbance, natural disaster, acts of
terrorism or acts of God, unusually severe weather or similar
occurrences which cause a delay in the Borrower's performance of an
Obligation related to the work of construction; provided, however,
that (a) the Borrower must give Notice to the Lender within ten
(10) days after the occurrence of an event which it believes to
constitute Force Majeure, (b) in no event shall Force Majeure
extend the time for the performance of an Obligation by more than
thirty (30) days, and (c) circumstances that can be remedied or
mitigated through the payment of money shall not constitute Force
Majeure hereunder to the extent such remedy or mitigation is deemed
reasonable by the Lender in its sole discretion.
"Governmental Authority" or
"Governmental
Authorities" means the government of the United States or
any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government
(including any supra-national bodies such as the European Union or
the European Central Bank).
"Guarantor" means SeD Xxxxxxxxx, LLC, a
Delaware limited liability company, and its successors and
permitted assigns.
"Guaranty" means the Limited
Guaranty Agreement of even date herewith executed by the Guarantor
for the benefit of the Lender, as the same may from time to time be
extended, amended, restated, supplemented or otherwise
modified.
"Hedging Agreement" means any
agreement, whether or not in writing, relating to any Hedging
Transaction, including, unless the context otherwise clearly
requires, any agreement or contract that constitutes a
"swap" within the
meaning of Section 1a(47) of the Commodity Exchange Act (7 U.S.C.
§ 1 et seq.), as amended from time to time, and any successor
statute, and CFTC Regulation 1.3(xxx), any form of master agreement
(the "Master
Agreement") published by the International Swaps and
Derivatives Association, Inc., and any other master agreement,
entered into prior to the date hereof or any time after the date
hereof, between Hedging Counterparty and the Borrower (or its
Affiliate), together with any related schedules and confirmations,
as the same may be amended, restated, replaced, supplemented,
superseded or otherwise modified from time to time in accordance
with its terms, relating to or governing any or all of the
foregoing.
SCHEDULE 1-PAGE
4
"Hedging Counterparty" means the
Lender or an Affiliate of the Lender, in its capacity as
counterparty under any Hedging Agreement.
"Hedging Transaction" means any
transaction that is a rate swap, basis swap transaction, forward
rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond option, note or xxxx option,
interest rate option, forward foreign exchange transaction, cap
transaction, spot or floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction,
swap option, currency option, credit swap or default transaction,
T-lock, or any other similar transaction (including any option to
enter into any of the foregoing) or any combination of the
foregoing, entered into prior to the date hereof or any time after
the date hereof between a Hedging Counterparty and the Borrower (or
its Affiliate) so long as a writing, such as a Hedging Agreement,
evidences the parties' intent that such obligations shall be
secured by the Deed of Trust in connection with the
Loan.
"Improvements" means all on-site
and off-site improvements now or hereafter shown on, or
contemplated by, the Plans and Specifications for the development
of the Land into the first stage of a residential subdivision to be
known as "Xxxxxxxxx Run" containing two hundred seventy-six (276)
single-family building Lots and additional building Parcels,
including without limitation, clearing and grading and the
installation of, among other things, sediment control, electric
lines, communication lines, water and sewer lines, sidewalks, curbs
and paved roads.
"Information" shall have the
meaning ascribed to such term in Section 8.8.
"Insurance Proceeds" means the
insurance claims under and the proceeds of any and all policies of
insurance covering the Property or any part thereof, including all
returned and unearned premiums with respect to any insurance
relating to the Property, in each case whether now or hereafter
existing or arising.
"Land" means the land described
in, and encumbered by, the Deed of Trust.
"Land Development Loan" shall
have the meaning ascribed to such term in the Recitals to this
Agreement.
"Law(s)" means all federal,
state and local laws, statutes, rules, ordinances, regulations,
codes, licenses, authorizations, decisions, injunctions,
interpretations, orders or decrees of any court or other
Governmental Authority having jurisdiction as may be in effect from
time to time.
"Lease(s)" means all leases,
license agreements and other occupancy or use agreements (whether
oral or written), now or hereafter existing, which cover or relate
to the Property or any part thereof, together with all options
therefor, amendments thereto and renewals, modifications and
guaranties thereof, including any cash or security deposited under
the Leases to secure performance by the tenants of their
obligations under the Leases, whether such cash or security is to
be held until the expiration of the terms of the Leases or applied
to one or more of the installments of rent coming due
thereunder.
"Letter(s) of Credit" means any
letter of credit issued by the Lender for the account of the
Borrower or its nominee in connection with the Construction of the
Improvements, together with any and all extensions, renewals or
modifications thereof, substitutions therefor or replacements
thereof.
SCHEDULE 1-PAGE
5
"Letter of Credit Agreement(s)"
shall have the meaning ascribed to such term in Schedule 6
hereof.
"Letter of Credit Facility"
shall have the meaning ascribed to such term in the Recitals to
this Agreement.
"Loan" has the meaning ascribed
to such term in the Recitals to this Agreement.
"Loan Amount" means,
individually and collectively, the amount of the Land Development
Loan in the original principal amount not to exceed at any one time
outstanding the sum of US$8,000,000 and the amount of the Letter of
Credit Facility in the aggregate stated amount of
US$800,000.
"Loan Documents" means this
Agreement, the Notes, the Deed of Trust, the Environmental
Agreement, the Guaranty, the Assignment and Pledge Agreement, any
Hedging Agreement, any Letter of Credit Agreement executed in
connection with any Letter of Credit issued by Lender in connection
with the Loan, and any and
all other documents which the Borrower, the Guarantor or any other
party or parties have executed and delivered, or may hereafter
execute and deliver, to evidence, secure or guarantee the
Obligations, or any part thereof, as the same may from time to time
be extended, amended, restated, supplemented or otherwise
modified.
"LOC Note" means the Promissory
Note of even date herewith in the principal amount of US$800,000
made by the Borrower to the order of the Lender evidencing the
Letter of Credit Facility, as the same may from time to time be
extended, amended, restated, supplemented or otherwise
modified.
"Lot" and "Lots" have the meanings
ascribed to such terms in the Recitals to this
Agreement.
"MF Multifamily Parcel" shall
have the meaning ascribed to such term in Schedule 7
hereof.
"Minimum Cumulative Curtail
Amount" has the meaning ascribed to such term in Section
4.25 hereof.
"Net Proceeds" when used with
respect to any Condemnation Awards or Insurance Proceeds, means the
gross proceeds from any Condemnation or Casualty remaining after
payment of all expenses, including attorneys' fees, incurred in the
collection of such gross proceeds.
"Notes" means the Revolving Note
and the LOC Note, as the same may from time to time be extended,
amended, restated, supplemented or otherwise modified.
"Notice" means a notice,
request, consent, demand or other communication given in accordance
with the provisions of Section 8.7 of this Agreement.
"NVR" means NVR, Inc., as the
contract purchaser under the NVR Contract, and its successors and
permitted assigns.
SCHEDULE 1-PAGE
6
"NVR Contracts" means each and
every one of the following: (a) the Lot Purchase Agreement –
Xxxxxxxxx Run – Single Family Attached Villa dated December
10, 2014 executed by and between the Borrower and NVR, as amended
by a Restatement and Reinstatement of and First Amendment to Lot
Purchase Agreement – Xxxxxxxxx Run – Single Family
Attached Villa dated January 9, 2015, (b) the Lot Purchase
Agreement – Xxxxxxxxx Run – Townhouse dated December
10, 2014 executed by and between the Borrower and NVR, as amended
by a Restatement and Reinstatement of and First Amendment to Lot
Purchase Agreement – Xxxxxxxxx Run – Townhouse dated
January 9, 2015, (c) the Lot Purchase Agreement – Xxxxxxxxx
Run – Large Single Family Dwelling dated December 10, 2014
executed by and between the Borrower and NVR, as amended by a
Restatement and Reinstatement of and First Amendment to Lot
Purchase Agreement – Xxxxxxxxx Run – Large Single
Family Dwelling dated January 9, 2015, (d) the Lot Purchase
Agreement – Xxxxxxxxx Run – Neo-Traditional Single
Family Dwelling dated December 10, 2014 executed by and between the
Borrower and NVR, as amended by a Restatement and Reinstatement of
and First Amendment to Lot Purchase Agreement – Xxxxxxxxx Run
– Neo-Traditional Single Family Dwelling dated January 9,
2015, and (e) the Lot Purchase Agreement – Xxxxxxxxx Run
– Small Single Family Dwelling dated December 10, 2014
executed by and between the Borrower and NVR, as amended by a
Restatement and Reinstatement of and First Amendment to Lot
Purchase Agreement – Xxxxxxxxx Run – Small Single
Family Dwelling dated January 9, 2015, together with all
modifications thereof, amendments thereto and substitutions
therefor hereafter made with the consent of the
Lender.
"Obligations" means all present
and future debts, obligations and liabilities of the Borrower to
the Lender arising pursuant to, or on account of, the provisions of
this Agreement, the Notes or any of the other Loan Documents,
including the obligations: (a) to pay all principal, interest, late
charges, prepayment premiums (if any) and other amounts due at any
time under the Notes and/or any one or more of the Letter of Credit
Agreements; (b) to pay all interest, fees, costs, charges,
expenses, indemnification obligations and all other sums now or
hereafter due and payable under or with respect to any and all
Hedging Agreements; (c) to pay all Expenses, indemnification
payments, fees and other amounts due at any time under the Deed of
Trust or any of the other Loan Documents, together with interest
thereon as provided in the Deed of Trust or such Loan Document; and
(d) to perform, observe and comply with all of the terms, covenants
and conditions, expressed or implied, which the Borrower is
required to perform, observe or comply with pursuant to the terms
of this Agreement, the Deed of Trust or any of the other Loan
Documents.
"OFAC" means the U.S. Department
of Treasury's Office of Foreign Assets Control.
"Parcel" and "Parcels" have the meanings
ascribed to such terms in the Recitals to this
Agreement.
"Person" means an individual, a
corporation, a partnership, a joint venture, a limited liability
company, a trust, an unincorporated association, any Governmental
Authority or any other entity.
"Plans and Specifications" means
any and all plans and specifications prepared in connection with
the Construction of the Improvements and reasonably approved in
writing by Lender, as the same may from time to time be amended
with the prior written approval of the Lender, which approval shall
not be unreasonably withheld. A list of the Plans and
Specifications in existence as of the date hereof is attached
hereto as Schedule 8
"Project Schedule" means the
schedule for commencement and completion of the Construction of the
Improvements attached hereto as Schedule 4-1, as the same may
be revised from time to time with the written approval of the
Lender, which approval shall not be unreasonably
withheld.
"Property" means the real and
personal property conveyed and encumbered by the Deed of
Trust.
"Release Conditions" shall have
the meaning ascribed to such term in Schedule 7
hereof.
"Release Fee" shall have the
meaning ascribed to such term in Schedule 7 hereof.
SCHEDULE 1-PAGE
7
"Rents" means all of the rents,
royalties, issues, profits, revenues, earnings, income and other
benefits of the Property or any part thereof, or arising from the
use or enjoyment of the Property or any part thereof, including all
such amounts paid under or arising from any of the Leases and all
fees, charges, accounts or other payments for the use or occupancy
of rooms or other public facilities within the Property or any part
thereof.
"Revolving Note" means the
Revolving Credit Note of even date herewith in the principal amount
of US$8,000,000 made by the Borrower to the order of the Lender
evidencing the Land Development Loan, as the same may from time to
time be extended, amended, restated, supplemented or otherwise
modified.
"Sales Shortfall" has the
meaning ascribed to such term in Section 4.25 hereof.
"Sanctions" means, collectively,
any sanctions administered or enforced by the United States
Government, including OFAC, the United Nations Security Council,
the European Union, Her Majesty's Treasury, or other relevant
sanctions authority.
"State" means the State of
Maryland.
"Stored Materials" means
building materials or furnishings that have not yet been
incorporated into the Improvements.
"Survey" means a map or plat of
survey of the Land which conforms with Lender's survey requirements
set forth in the Closing Checklist.
"Taxes" means all taxes and
assessments whether general or special, ordinary or extraordinary,
or foreseen or unforeseen, which at any time may be assessed,
levied, confirmed or imposed by any Governmental Authority or any
communities facilities or other private district on Borrower or on
any of its properties or assets or any part thereof or in respect
of any of its franchises, businesses, income or
profits.
"Total Costs" has the meaning
ascribed to such term in Schedule 5 hereof.
"UCC" means the Uniform
Commercial Code in effect in the State, as from time to time
amended or restated.
SCHEDULE 1-PAGE
8
Schedule 2
Form of Draw Request
[BORROWER'S
LETTERHEAD]
DRAW
REQUEST NO. _________
TO: THE
BANK OF HAMPTON ROADS (the "Lender")
|
LOAN
NO.
|
|
|
|
PROJECT
|
|
|
|
LOCATION
|
|
|
|
|
|
|
|
BORROWER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR PERIOD
ENDING
|
|
|
In
accordance with the Construction Loan Agreement in the amount of
US$_____________ dated ______________, between the Borrower and the
Lender, the Borrower requests that US$_______________ be advanced
from Loan proceeds [,
$_________________ be advanced from the Borrower's deposit,
US$_______________ be advanced from the Borrower's Upfront Equity,
and US$_____________ be advanced from the Borrower's Deferred
Equity]. The proceeds should be credited to the account of
_______________________________________ Account No.
___________________, at
_________________________________________.
1.
CURRENT DRAW
REQUEST FOR HARD COSTS
US$_______________
2.
CURRENT DRAW
REQUEST FOR SOFT
COSTS
US$_______________
3.
TOTAL DRAW
REQUEST
US$_______________
AUTHORIZED
SIGNER:
____________________________________
Dated:
__________________
SCHEDULE 2-PAGE
1
Schedule 3
Budget
SEE
ATTACHED
SCHEDULE 3-PAGE
1
Schedule 4
1. Project
Schedule. The Borrower has delivered to the Lender a Project
Schedule which sets forth the anticipated schedule for each phase
of the Construction of the Improvements, a copy of which is
attached hereto as Schedule 4-1 and made a part hereof. In the
opinion of the Borrower, the Project Schedule sets forth, in all
material respects, the schedule for each phase of construction
required for Completion of Construction.
2. Commencement.
Subject to Force Majeure, the Borrower shall cause Construction of
the Improvements to commence no later than the Construction
Commencement Date. For the purposes hereof, commencement of
Construction of the Improvements shall mean the mobilization by the
applicable Contractors of the necessary equipment on the Property
to commence grading, and the actual commencement of the grading of
the Land.
3. Completion
of Construction of All Improvements. Regardless of the
existence or non-existence or occurrence or non-occurrence of any
condition of Force Majeure, (a) in no event shall any phase of the
Improvements be completed more than ninety (90) days after the date
specified for the completion of such phase in the Project Schedule,
and (b) in no event shall Completion of Construction of the
Improvements occur later than the Completion Date.
SCHEDULE 4-PAGE
1
Schedule 4-1
Project Schedule
Xxxxxxxxx Run Construction
|
Project
|
Number of Lots in Project
|
Aggregate Number of Lots
|
Construction
Start Date
|
Substantial Completion Date
|
|
1st Group of
Lots
|
112
|
112
|
6/1/16
(Construction
Commencement
Date)
|
12/31/16
|
|
2nd Group of
Lots
|
55
|
167
|
3/1/17
|
12/31/17
|
|
3rd Group of
Lots
|
55
|
222
|
9/30/17
|
6/30/18
|
|
4th Group of
Lots
|
54
|
276
|
3/31/18
|
90 days
before initial loan
maturity
|
|
Xxxxxxxxx
Creek Pike Offsite Road Improvements
|
n/a
|
n/a
|
6/1/16
|
90 days
before initial loan
maturity
|
|
Clubhouse
Amenity
|
n/a
|
n/a
|
9/30/17
|
90 days
before initial loan
maturity
|
Notes:
●
Lots from any phase
can be counted toward to any Lot Group and Aggregate Number of
Lots
●
Lots in Group does
not refer to specific Lots in the Project but to a combination of
Lots within the Project.
Substantial
Completions means (a) with respect to any Group of Lots, the
completion of all work required by the terms of the NVR Contracts
for such Lots and base asphalt paving for all roads serving such
Lots is complete; and (b) with respect to the Xxxxxxxxx Creek
Offsite Improvements and the Clubhouse Amenity, 100% completion of
such work, except for reasonable punch-list items.
SCHEDULE 4-PAGE
2
Schedule 5
Additional Terms Regarding Advances
The
conditions precedent to closing the Loan, recording the Deed of
Trust and making the first advance are set forth in the Closing
Checklist. Subsequent advances of the Loan shall be subject to the
following additional terms and conditions:
1. Advances
Under the Budget. As listed in the Budget: (a) the
"Total Costs" are
the maximum costs anticipated by the Borrower for each item
specified; (b) the "Loan
Proceeds" are the maximum amount to be advanced under the
Loan; (c) "Upfront
Equity" is the amount that the Borrower is required to pay
toward the Total Costs prior to the first advance of the
Loan; and (d) "Deferred
Equity" is an additional amount that the Borrower is
required to pay toward the Total Costs as of the date indicated, if
any, or prior to the initial advance of any Loan Proceeds in the
specified line item in the Budget. Whenever the Borrower is
required to pay any items from Upfront Equity or Deferred Equity,
the Lender, at its option, may restrict or prohibit advances of the
Loan for such items to the extent that Upfront Equity or Deferred
Equity is sufficient to pay such amounts. Whenever the Borrower's
Upfront Equity or Deferred Equity is on deposit with the Lender,
the Lender shall make all advances first from such equity based on
the allocations thereof set forth in the Budget. After the
exhaustion of Upfront Equity or Deferred Equity allocated to a
given line item, the Lender will advance Loan proceeds for that
line item pursuant to the Budget.
2. Additional
Items Required for Each Advance. The Lender shall not be
obligated to make an advance of Loan proceeds until and unless the
following additional items shall have been received and approved by
the Lender, as and to the extent required by the Lender, prior to
the date of the advance:
(a) If
required by the Lender, a notice of title continuation or an
endorsement to the title insurance policy with respect to the Land
theretofore delivered to the Lender, showing that since the last
preceding advance, there has been no change in the status of title
and no other exception not theretofore approved by the Lender,
which endorsement shall have the effect of advancing the effective
date of the policy to the date of the advance then being made and
increasing the coverage of the policy by an amount equal to the
advance then being made, if the policy does not by its terms
provide automatically for such an increase.
(b) If
required by the Lender, interim acknowledgments of payment and
waivers and releases of liens from all Persons who have furnished
labor, materials and/or services in the Construction of the
Improvements, covering work performed, materials supplied and
services rendered through the date of the last preceding advance as
required by the Lender.
(c) If
required, soil compaction test reports, bearing capacity test
reports and concrete test reports.
(d) Evidence
that the Improvements have not been materially damaged by fire or
other Casualty unless the Lender shall have received Insurance
Proceeds, or satisfactory assurance that it will receive such
proceeds in a timely manner pursuant to the terms of the Deed of
Trust, sufficient in the judgment of the Lender to effect a
satisfactory restoration and completion of the Improvements in
accordance with the terms of the Deed of Trust and this
Agreement.
(e) Evidence
that all work requiring inspection by any Governmental Authority
having or claiming jurisdiction has been duly inspected and
approved by such authority and by any rating or inspection
organization, bureau, association or office having or claiming
jurisdiction.
SCHEDULE 5-PAGE
1
(f) Evidence,
including the Construction Inspector Report, that all work
completed at the time of the application for an advance has been
performed in a good and workmanlike manner, that all materials and
fixtures usually furnished and installed at that stage of
construction have been so furnished and installed, that the
Improvements can be completed in accordance with the Project
Schedule, and that the balance of the Loan proceeds then held by
Lender and available for advance pursuant to the terms of this
Agreement, together with other funds which the Lender determines to
be available to the Borrower for such purpose, are and will be
sufficient to pay the cost of such completion.
(g) If
required by the Lender, payment and performance bonds covering
those Contractors or subcontractors designated by the Lender, with
companies and in amounts and form satisfactory to the Lender, which
bonds shall contain a dual obligee rider indicating the Lender's
interest as mortgagee.
3. Conditions
Precedent to All Advances. The Lender shall not be obligated
to make an advance of Loan proceeds unless the following additional
conditions shall have been satisfied or waived in writing by the
Lender as of the date of each advance:
(a) No
lien for the performance of work or supplying of labor, materials
or services shall have been filed against the Property and remain
unsatisfied or unbonded.
(b) No
condition or situation shall exist at the Property which, in the
reasonable determination of the Lender, constitutes a danger to or
impairment of the Property or presents a danger or hazard to the
public.
(c) The
representations and warranties made in Article III shall be true and
correct on and as of the date of the advance with the same effect
as if made on such date.
(d) All
terms and conditions of the Loan Documents required to be met as of
the date of the applicable advance shall have been met to the
reasonable satisfaction of the Lender.
(e) All
terms and conditions of the NVR Contracts (and any contracts of
sale executed in replacement thereof) required to be met as of the
date of the applicable advance shall have been met to the
reasonable satisfaction of the Lender.
(f) No
Default or Event of Default shall have occurred and be
continuing.
(g) The
Lender shall have received satisfactory evidence that the Borrower
shall have satisfied any equity investment in the Property required
to be made by the Borrower prior to the date of such
advance.
(h) The
Lender shall have received all due diligence materials it deems
necessary with respect to verifying the Borrower's identity and
background information in a manner satisfactory to the
Lender.
(b) The
Lender shall not be obligated to make the initial advance of the
proceeds of the Loan for the payment of any hard costs with respect
to any aspect or phase of the Construction of the Improvements
unless the following additional conditions shall have been
satisfied with respect to such aspect or phase of the Construction
of the Improvements, to the extent required by Lender:
SCHEDULE 5-PAGE
2
(i)
The Lender shall have received from the Borrower a complete set of
the Plans and Specifications with respect to such aspect or phase
of the Construction of the Improvements signed and sealed by the
Engineer, together with written evidence, in form and substance
reasonably satisfactory to the Lender, to the effect that the Plans
and Specifications with respect to such work are satisfactory to
the Borrower, each Contractor, NVR (to the extent required by the
terms of the NVR Contracts), the Construction Inspector and, to the
extent required by applicable law or any effective restrictive
covenant, have been approved by all Governmental Authorities having
or claiming jurisdiction and by the beneficiary of any such
restrictive covenant, respectively;
(ii)
The Lender shall have received and approved a fully executed copy
of each and every Construction Contract for such aspect or phase of
the Construction of the Improvements, which shall be for a fixed
price, the Engineer's Contract, as well as any information
regarding each Contractor and the Engineer which the Lender has
requested;
(iii) The
Lender shall have received and approved the written undertaking of
those Contractors and/or subcontractors designated by the Lender,
and of the Borrower's Engineer to continue performance on the
Lender's behalf without additional costs over the required contract
amounts in the event of default by the Borrower under any of the
Loan Documents and not to permit nor execute any change order
increasing the price of the Improvements or materially altering the
scope of the Improvements;
(iv)
The Lender shall have received from the Borrower written evidence,
in form and substance reasonably satisfactory to the Lender, from
all Governmental Authorities having or claiming jurisdiction to the
effect that all building, construction and other permits required
in connection with such aspect or phase of the Construction of the
Improvements have been validly issued, that all fees and bonds
required in connection therewith have been paid in full or posted,
as the circumstances may require, and that the project meets
subdivision requirements, zoning requirements and all sewer and
storm drain requirements;
(v)
The Lender shall have received from the Borrower written evidence,
in form and substance reasonably satisfactory to the Lender, from
all municipalities and utility companies having or claiming
jurisdiction to the effect that all utility services required by
the Plans and Specifications or otherwise necessary for such aspect
or phase of the Construction of the Improvements and the operation
thereof for their intended purpose after completion are available
for connection and use at the boundaries of the Land, including,
without limitation, telephone service, water supply, storm and
sanitary sewer facilities, natural gas and electric
facilities;
(vi)
The Lender shall have received and approved a cost breakdown in
trade form for the Improvements, and showing, if available,
subcontractors and material suppliers;
(vii)
The Lender shall have received and approved a report setting forth
the monthly projected advances of the Loan throughout the
construction period and a construction progress schedule in form
and substance reasonably satisfactory to the Lender, calling for
the completion of the Construction of the Improvements by a date no
later than the Completion Date;
(viii)
The Lender shall have received and reasonably approved evidence
that all Contractors and all major subcontractors carry public
liability and property damage insurance and workers' compensation
insurance in form, amounts and issued by companies reasonably
acceptable to the Lender;
SCHEDULE 5-PAGE
3
(ix)
The Lender shall have received an engineer's certificate or other
evidence acceptable in all respects that the Improvements, when
constructed, will comply with all legal requirements regarding
access and facilities for handicapped or disabled persons,
including, without limitation and to the extent applicable, The
Federal Architectural Barriers Act (42 U.S.C. § 4151 et seq.),
The Fair Housing Amendments Act of 1988 (42 U.S.C. § 3601 et
seq.), The Americans With Disabilities Act of 1990 (42 X.X.X.
§00000 et seq.), The Rehabilitation Act of 1973 (29 U.S.C.
§794) and any applicable state statutes relating to access and
facilities for handicapped or disabled persons;
(x)
The Lender shall have received and approved satisfactory evidence
that the Borrower shall have satisfied any required equity
investment related to the Loan and/or the Property;
and
(xi) The
Lender shall have received and approved a pre-construction review
report issued by the Construction Inspector with respect to such
aspect or phase of the Construction of the Improvements, in form
and substance satisfactory to the Lender in all respects, covering
the Plans and Specifications, the Budget and all other construction
matters.
(xii)
The Lender shall have received and approved such other documents,
instruments and materials relating to such aspect or phase of the
Construction of the Improvements as the Lender may reasonably
require.
(c) The
Lender shall not be obligated to make the final advance of the Loan
for hard costs (including the retainage) unless the following
additional conditions shall have been satisfied, to the extent
required by Lender:
(i)
The Construction Inspector and the Engineer
shall have certified to the Lender that construction has been
completed in a good and workmanlike manner, in accordance with
applicable requirements of all Governmental Authorities and
substantially in accordance with the Plans and
Specifications;
(ii)
To the extent required by applicable Governmental Authorities for
the use of the Improvements, certificates of occupancy or
completion and other applicable permits and releases shall have
been issued with respect to the Improvements and copies thereof
have been furnished to the Lender;
(iii)
The Lender shall have received a satisfactory as-built Survey
showing the location of all Improvements;
(iv)
The Lender shall have received a satisfactory final affidavit and
full and complete releases of lien from each Contractor and each
major subcontractor designated by the Lender with respect to work
performed and/or materials supplied in the Construction of the
Improvements;
(v)
If requested by the Lender, the Lender shall have received a
satisfactory set of as-built plans and specifications for any
vertical Improvements;
(vi)
If required by the Lender, the Lender shall have received a
satisfactory endorsement to its title insurance policy;
and
SCHEDULE 5-PAGE
4
(vii)
All other terms and conditions of this Agreement and the other Loan
Documents required to be met as of the date of the final advance of
the Loan for hard costs shall have been met to the satisfaction of
the Lender.
SCHEDULE 5-PAGE
5
Schedule 6
Letters of Credit
1.
Letter of Credit
Availability. The proceeds of the Letter of Credit Facility
shall be allocated by the Lender exclusively for the issuance of
one or more Letters of Credit as collateral security for the
performance of certain obligations of the Borrower in connection
with the Construction of the Improvements. With respect to such
Letters of Credit and the Letter of Credit Facility, the following
additional terms and conditions shall apply. Each Letter of Credit
shall be in form and substance satisfactory to the Lender in all
respects, including without limitation, the amount and expiration
date thereof. In no event shall the term of any Letter of Credit
issued hereunder exceed two (2) years from the date of issuance;
provided, however, that to the extent required by the beneficiary
thereof, and as agreed to by the Lender, the term of the Letters of
Credit may be renewable for successive periods of one (1) year on
the condition that the Lender shall have the right to terminate the
same on not more than sixty (60) days written notice prior to any
anniversary. At the time of the issuance of each Letter of Credit,
the Borrower and, to the extent deemed necessary by the Lender, the
Guarantor shall execute in favor of the Lender an Application and
Agreement for Standby Letter of Credit on the Lender's then
standard form (collectively, the "Letter of Credit Agreements")
and deliver to the Lender for its review and approval such other
information and material in connection therewith as may be
reasonably requested by the Lender. The Borrower shall pay to the
Lender (a) upon the issuance of each Letter of Credit and
thereafter annually while such Letter of Credit remains
outstanding, a per annum letter of credit fee for each Letter of
Credit in an amount equal to one and one-half percent (1-1/2%) of
the stated amount of each such Letter of Credit, but in no event
less than US$300.00, (b) upon the issuance of each such Letter of
Credit, an upfront letter of credit documentation fee in the amount
of US$250.00, (c) in the event of any amendment of a Letter of
Credit, an amendment fee in the amount of US$250.00, and (d) in the
event of a draw under any such Letter of Credit, the customary fee
of the Lender charged at such time as a result of the occurrence of
the same. At the time of the maturity of the Loan (whether by
acceleration or otherwise), the Borrower shall be obligated to
fully collateralize any Letters of Credit then outstanding by
pledging to the Lender unencumbered liquid assets approved by the
Lender or by providing such other collateral as may be reasonably
acceptable to the Lender.
2.
Right to Advance;
Security. With respect to the Letters of Credit, the Lender,
in the exercise of its sole and absolute discretion from time to
time, shall be entitled to, without notice to or demand of the
Borrower, at any time and without the need for further approval of
the Borrower, make advances under the Letter of Credit Facility to
the Borrower or directly to beneficiaries or other persons making
claims with respect to the Letters of Credit to cover or to secure
all or any part of the liabilities under such Letters of Credit.
Without in any way limiting the force and effect of any provision
hereof or of any of the Loan Documents, the Borrower acknowledges
and agrees that the obligations under the Letter of Credit
Agreements shall be advanced under the terms of the LOC Note and
shall be secured by the Deed of Trust.
3.
Funding Upon
Default. So long as there shall exist an uncured Default or
Event of Default hereunder or under any of the other Loan Documents
or upon the payment or prepayment of the Loan in full, the Lender
may, at its option, advance from the Letter of Credit Facility an
amount equal to the then potential unfunded obligations of the
Lender under the Letters of Credit, so that such sums shall be
available for the payment of any subsequent drafts made under such
Letters of Credit by the beneficiaries thereof. The proceeds of any
advance made pursuant hereto shall be advanced under the terms of
the LOC Note and shall be deposited by the Lender in a deposit
account maintained at the Lender which shall be pledged to the
Lender as collateral for the Loan in accordance with the terms of
an assignment and pledge of deposit account in form and substance
satisfactory to the Lender in all respects.
4.
Return of Letters of
Credit. Immediately upon the expiration of any Letter of
Credit pursuant to its terms or the satisfaction of all conditions
precedent to the right of the Borrower to obtain the return of any
Letter of Credit from the beneficiary thereof, the Borrower shall
retrieve such original Letter of Credit and return the same or
cause it to be returned to the Lender.
5.
Action by Lender.
The Borrower hereby irrevocably constitutes and appoints the Lender
its true and lawful attorney-in-fact, during the continuance of any
Event of Default, to execute, acknowledge and deliver such
documents, instruments and certificates, and to take such other
actions, in the name and on behalf of the Borrower and at the sole
cost and expense of the Borrower, as the Lender, in its sole
discretion, deems necessary, desirable or appropriate to effectuate
the provisions of this Schedule 6.
SCHEDULE 6-PAGE
1
Schedule 7
(a)
The Lender shall have previously received and approved, which
approval shall not be unreasonably withheld or delayed, a legal and
valid subdivision plat covering that portion of the Property in
which the Lot or Parcel proposed to be released shall be located,
approved (to the extent necessary) by all required Governmental
Authorities, which shall confirm (i) that the Lot or Parcel which
is proposed to be released is a separate and distinct lot or parcel
of property, and (ii) that the balance of the Property remaining
subject to the lien of the Deed of Trust conforms in all respects
with all required zoning and building codes, rules and regulations,
with adequate means of ingress and egress from a public roadway,
together with such cross easement agreements as may be deemed
reasonably necessary by the Lender;
(b)
Unless such Lot or Parcel is being conveyed pursuant to the terms
of the NVR Contracts, the Lender shall have previously received and
approved, which approval shall not be unreasonably withheld or
delayed, a fully executed contract of sale covering the Lot or
Parcel proposed to be released, which shall provide for a purchase
price acceptable to the Lender in all respects and which shall
provide sufficient sums for the payment of the Release Fee required
pursuant to the terms hereof;
(c)
At the time of the request by the Borrower for a release of such
Lot or Parcel from the lien of the Deed of Trust, there shall not
exist any Event of Default hereunder or under any of the other Loan
Documents, nor any condition or state of facts which after notice
and/or lapse of time would constitute an Event of Default hereunder
or under any of the other Loan Documents;
(d)
At the time of the release of such Lot or Parcel from the lien of
the Deed of Trust, the Borrower shall have paid to Lender a release
fee (a "Release
Fee") in an amount equal to the greater of (i) 95% of the
net proceeds received by the Borrower from the sale of such Lot or
Parcel pursuant to the terms of the NVR Contracts or other
applicable contract of sale approved by the Lender after the
payment of all reasonable and necessary third-party closing costs
and expenses approved by the Lender, and (ii) 100% of the minimum
amount required for the release of such Lot or Parcel pursuant to
the schedule attached hereto as Schedule 7-1 and made a part
hereof, which Release Fee shall be applied by the Lender to the
payment of the Obligations in such order or manner as the Lender
may require; provided, however, that in the event that there shall
remain outstanding any Letters of Credit issued by the Lender under
the Loan at the time that the Obligations shall be repaid in full,
or in the event that at the time of such release the Construction
of the Improvements shall not have been completed or there shall
remain any costs related thereto which have not yet been paid, such
Release Fee may then be deposited by the Lender into a deposit
account maintained by the Lender and pledged to the Lender as
additional collateral for the Loan pursuant to the terms of an
assignment and pledge of deposit account in form and substance
satisfactory to the Lender in all respects; and
SCHEDULE 7-PAGE
1
(e)
The Borrower shall have paid all reasonable out-of-pocket costs and
expenses incurred by the Lender in connection with such release,
including, without limitation, legal fees and all recording
costs.
(a)
The Lender shall have previously received and approved, which
approval shall not be unreasonably withheld or delayed, a legal and
valid subdivision plat covering that portion of the Property in
which the CCRC Multifamily Parcel and/or the MF Multifamily Parcel,
as the case may be, shall be located, approved (to the extent
necessary) by all required Governmental Authorities, which shall
confirm (i) that the Parcel which is proposed to be released is a
separate and distinct lot or parcel of property, and (ii) that the
balance of the Property remaining subject to the lien of the Deed
of Trust conforms in all respects with all required zoning and
building codes, rules and regulations, with adequate means of
ingress and egress from a public roadway, together with such cross
easement agreements as may be deemed reasonably necessary by the
Lender;
(b)
The Lender shall have previously received and approved, which
approval shall not be unreasonably withheld or delayed, a fully
executed contract of sale or other conveyance agreement covering
the Parcel proposed to be released, which shall provide for a
purchase price acceptable to the Lender in all respects and which
shall provide sufficient sums for the payment of the Release Fee
required pursuant to the terms hereof;
(c)
At the time of the request by the Borrower for a release of such
Parcel from the lien of the Deed of Trust, there shall not exist
any Event of Default hereunder or under any of the other Loan
Documents, nor any condition or state of facts which after notice
and/or lapse of time would constitute an Event of Default hereunder
or under any of the other Loan Documents;
SCHEDULE 7-PAGE
2
(d)
At the time of the release of such Parcel from the lien of the Deed
of Trust, the Borrower shall have paid to Lender a release fee (a
"Release Fee") in
an amount equal to the greater of (i) 95% of the net proceeds
received by the Borrower from the sale of such Parcel pursuant to
the terms of the applicable contract of sale or other conveyance
agreement approved by the Lender after the payment of all
reasonable and necessary third-party closing costs and expenses
approved by the Lender, and (ii) $4,738,125, if the Parcel to be
released is the MF Multifamily Parcel, or $1,214,330 if the Parcel
to be released is the CCRC Multifamily Parcel, which Release Fee
shall be applied by the Lender to the payment of the Obligations in
such order or manner as the Lender may require; provided, however,
that in the event that there shall remain outstanding any Letters
of Credit issued by the Lender under the Loan at the time that the
Obligations shall be repaid in full, or in the event that at the
time of such release the Construction of the Improvements shall not
have been completed or there shall remain any costs related thereto
which have not yet been paid, such Release Fee may then be
deposited by the Lender into a deposit account maintained by the
Lender and pledged to the Lender as additional collateral for the
Loan pursuant to the terms of an assignment and pledge of deposit
account in form and substance satisfactory to the Lender in all
respects; and
(e)
The Borrower shall have paid all reasonable out-of-pocket costs and
expenses incurred by the Lender in connection with such release,
including, without limitation, legal fees and all recording
costs.
3.
Release of Roadways,
Public Parks, School Site and Other Common Areas. In
addition, provided that no Event of Default shall then exist
hereunder or under any of the other Loan Documents, the Lender
agrees to release from the lien of the Deed of Trust any areas
within the Property designated for use as public roadways, public
parks, a school or as "common areas" for no additional
consideration at the time that such areas are properly conveyed to
the appropriate Governmental Authority or to the appropriate owners
association established for such purpose, so long as the Lender
shall have theretofore reviewed and approved (which approval shall
not be unreasonably withheld or delayed) (a) the final recorded
subdivision plat or plats approved by all appropriate Governmental
Authorities pursuant to which such public roadways or other areas
shall have been formally established, as may be required, (b) if
applicable, all documents and agreements establishing the owners'
association to which such areas shall be conveyed, and (c) the deed
and all other documents pursuant to which such areas shall be
conveyed; all of which must be reasonably acceptable in all
respects to the Lender.
4.
Effect of Partial
Releases. Any release by the Lender of any part of the
Property from the lien of the Deed of Trust shall not, in any
manner, affect or impair the lien or priority of the Deed of Trust
as to the remainder of the Property.
5.
Payment of Additional
Charges. In addition to any other charges payable by the
Borrower pursuant to the terms hereof, of the Deed of Trust or of
any of the other Loan Documents, the Borrower agrees, to the extent
not prohibited by Law, to pay all governmental charges, and all of
the Lender's fees and expenses, for any full or partial release of
the Deed of Trust and any other security interests and liens
securing the Loan, which charges, fees and expenses shall be
payable at the time of such release.
SCHEDULE 7-PAGE
3
Schedule 7-1
Minimum Release Fee Schedule
|
Developed
Lots
|
Per
Lot
|
#
Lots
|
|
SFD
Large
|
$146,875
|
38
|
|
SFD
Small
|
$135,024
|
41
|
|
SFD
NEO
|
$96,082
|
33
|
|
SFA 28'
Villa
|
$99,045
|
56
|
|
SFA 20' TH (End
Units)
|
$88,464
|
34
|
|
SFA 16' TH
(Interior Units)
|
$74,017
|
74
|
|
Undeveloped
Land Parcels
|
Per
Parcel
|
#
Acres
|
|
MF
Land
|
$4,688,250
|
11+
|
|
CCRC
Land
|
$2,500,400
|
6+
|
|
Future Phase Land
(2D & 3)
|
$2,050,686
|
TBD
|
SCHEDULE 7-PAGE
4
Schedule 8
List of Plans and Specifications
Xxxxxxxxx Run
As of November 19, 2015
1.
Xxxxxxxxx Run Phase
II Execution Plan, Combined Preliminary/Site Plan by Xxxxxx,
Xxxxxxx & Associates, Inc. dated July 2014, sheets 1 through
25. This plan includes all phases of Xxxxxxxxx Run.
2.
Xxxxxxxxx Run
Sediment Controls and Stormwater Management Plans by PHR&A
dated 11/1/12, sheets 1 - 18. Plans will be reapproved as is in
November 2015. This covers all stormwater management for Phases 1,
2A, 2B, 2C and 2D.
3.
Improvement Plan
for Xxxxxxxxx Run Phase I by Xxxxxx, Xxxxxxx Associates, Inc. dated
May 2015, sheets 1 – 61. Currently in review by County.
Improvement plans for Phases 2A, 2B and 2C will be drafted and
approved in the future.
4.
Hold down grading
plan by Xxxxxx, Smariga & Associates, Inc. undated, 1 sheet.
This plan has been approved by Borrower and NVR and doesn’t
require any governmental approvals. It covers only Phase I. Hold
down plans for future phases will be completed with Improvement
Plans for future phases.
5.
SWM Concept, SWM
Development, Improvement Plan for Xxxxxxxxx Creek Xxxx Phases 1 and
2 prepared by Xxxxxx, Smariga & Associates, Inc. and dated
August 2015, sheets 1 through 17. Plans for Xxxxxxxxx Creek Xxxx
Phases 3 and 4 will be drafted and submitted for approval after
Phases 1 and 2 are approved.
6.
Illustrative Aerial
Plan for Xxxxxxxxx Run prepared by Xxxxxx, Xxxxxxx &
Associates, Inc., dated July 13, 2015.
SCHEDULE 8-PAGE
1