CONSTRUCTION LOAN AGREEMENT
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THIS AGREEMENT (the "Loan Agreement") is made and executed by and
between SEA GARDENS BEACH AND TENNIS RESORT, INC., A FLORIDA CORPORATION, of
0000 Xxxxx Xxxxxxx Xxxxxx, Xxxx Xxxxxxxxxx, Xxxxxxx 00000 (hereinafter referred
to as "Borrower"), and SUNTRUST BANK, SOUTH FLORIDA, N.A., A NATIONAL BANKING
ASSOCIATION, OF 000 XXXX XXX XXXX XXXXXXXXX, XXXX XXXXXXXXXX, XXXXXXX 00000
(hereinafter referred to as "Lender").
W I T N E S S E T H:
WHEREAS, Borrower is the Developer of the Sea Garden Beach & Tennis
Resort located in Pompano Beach, Florida (hereinafter referred to as "the
Resort"); and
WHEREAS, there is an existing loan from Lender to Borrower ("the Loan")
which is secured by a mortgage ("the Mortgage") encumbering portions of the
Resort; and
WHEREAS, the parties have agreed that the Loan will be modified so that
the indebtedness will be increased by THIRTEEN MILLION AND NO/100 Dollars
($13,000,000.00) pursuant to a certain Future Advance Promissory Note, the
proceeds of which will be used to construct certain improvements on the "Ocean
Palms" Parcel ("the Improvements"), which Improvements are more specifically
defined in that certain loan commitment letter to Borrower dated September 11,
1996, (hereinafter referred to as "the Commitment"); and
WHEREAS, the Improvements will be located upon a portion of the
property encumbered by the Mortgage, which portion is sometimes described as the
"Ocean Palms Parcel" and which is described in EXHIBIT "A" (the "Land") located
in Pompano Beach, Broward County, Florida (the Improvements and the Land
hereinafter being referred to collectively as the "Property");
WHEREAS, Borrower and Lender wish to enter into this Agreement in order
to set forth the terms and conditions of the disbursement of the Loan;
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants, representations, warranties and agreements contained herein, the sum
of Ten and 10/100 Dollars ($10.00) and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Borrower and
Lender agree as follows:
ARTICLE I
LOAN DOCUMENTS
Subject to the conditions contained in the Commitment and prior to any
disbursement, Borrower shall execute and deliver, or cause to be executed and
delivered to Lender the following documents (hereinafter collectively and
together with this Loan Agreement referred to as the "Loan Documents"), all in a
form satisfactory to Lender:
1. NOTE. A Future Advance Promissory Note of even date
herewith payable to the order of Lender in the principal amount of THIRTEEN
MILLION AND NO/100 Dollars ($13,000,000.00) (hereinafter referred to as the
"Note") which shall include such terms and conditions as have heretofore been
mutually agreed upon between Borrower and Lender. Interest reserves in the
initial amount of $500,000.00 shall be established from a portion of the Loan
proceeds. Borrower hereby authorizes Lender to deduct from the interest reserve
the accrued interest on the outstanding balance of the Loan on the first day of
each month of the term of the Loan in accordance with the provisions of the
Note. Lender agrees that the accrued interest shall be disbursed from the
interest reserve so long as no Event of Default has occurred and sufficient
amounts remain in the interest reserve; provided, however, that Lender shall at
all times be authorized, even if not otherwise obligated, to disburse accrued
interest from the interest reserve. Interest shall be payable in local funds to
the extent that same is not disbursed from the interest reserve.
2. MORTGAGE AND SECURITY AGREEMENT. A Mortgage Modification
Agreement modifying the Mortgage which, upon recordation, shall constitute a
first lien on the Property and which shall be in a form satisfactory to Lender
and shall be subject only to those exceptions and matters satisfactory to
Lender.
3. ASSIGNMENT OF RENTS AND LEASES. An assignment of rents
and leases from Borrower to Lender assigning any and all leases and rents now in
existence or which may come into existence in connection with the Property
during the life of this Loan from Borrower to Lender.
4. UCC-1 FINANCING STATEMENTS (LOCAL AND STATE). UCC-1
Financing Statements (local and state) covering all personal property, fixtures
and equipment placed or to be placed on or under the Property, and such other
documents as will insure Lender a first perfected security interest in and to
said personal property, fixtures and equipment.
5. MORTGAGEE TITLE INSURANCE POLICY. A mortgagee title
insurance policy providing title insurance coverage in the amount of THIRTEEN
MILLION AND NO/100 Dollars $13,000,000.00), insuring the Mortgage as a valid
first lien on the Property encumbered by the Mortgage subject only to exceptions
as shall be approved in writing by Lender, issued by a title company
satisfactory to Lender ("Title Insurer"), and in a form satisfactory to and
approved by Lender and satisfying the requirements set forth in the title
insurance commitment, including such reinsurance and/or coinsurance agreements,
if any, and any affirmative coverage required by Lender. Borrower shall deliver
to Lender copies of any documents which may affect the Property in any manner
(as determined by Lender's counsel) at any time prior to or during the term of
the Loan at Borrower's expense, including all existing or proposed restrictive
covenants, or other documents or restrictions affecting the Ocean Palms Parcel.
6. OPINION OF COUNSEL. An opinion of counsel licensed in the
State of Florida and satisfactory to Lender which covers such matters as may be
required by Lender.
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7. MORTGAGOR'S AFFIDAVIT. Mortgagor's Affidavit, in form and
content sufficient to permit the Title Insurer to delete any exception for
parties in possession, matters of survey, mechanic's or materialmen's liens,
gap, and taxes and assessments which are due and payable.
8. BORROWING AUTHORITY INSTRUMENTS. Documents evidencing the
necessary authorization for all actions taken by Borrower in connection with
this Loan as may be required by Lender. Appropriate documents may include
corporate resolutions, certificates of active status, and certified copies of
articles of incorporation and by-laws and all amendments thereto.
9. GENERAL CONSTRUCTION CONTRACT. A General Construction
Contract as amended (the "Construction Contract") in form and content acceptable
to Lender, executed by and between Borrower and HDL Construction, Inc., a
Florida corporation, which is a licensed Florida contractor (the "Contractor")
to construct the Improvements in accordance with the plans and specifications
entitled: "Mediterranean Palms" (now known as "Ocean Palms") originally dated
February 23, 1996 and revised and modified including those revisions described
on the attached Exhibit "C" (the "Plans and Specifications") prepared by Berrie
Architecture & Design, Inc. (the "Architect"), together with financial
statements and resume of the Contractor. The Contractor shall agree in writing,
upon the happening of an Event of Default, as defined in the Mortgage or this
Agreement, Contractor will, at the request of Lender, continue performance
pursuant to its agreement with Borrower until completion of construction of the
Improvements.
Exhibit "B" provides for the Contractor's overhead, but not
the Contractor's fee. The entire Contractor's fee shall be paid by Borrower out
of its own funds.
10. MAJOR SUBCONTRACTS. Contracts in form and content
acceptable to Lender, which have been executed by and between Contractor and all
major subcontractors, materialmen and suppliers ("Subcontractors") to construct
the Improvements in accordance with the Plans and Specifications. For the
purposes hereof, a major subcontract shall be any contract which is a contract
for Twenty-Five Thousand and 00/100 Dollars ($25,000.00) or more and which is
designated by Lender to be a Major Subcontract. All Major Subcontracts shall
contain the agreement of Subcontractors to perform the contract with Lender if
an "Event of Default" as defined below, occurs. Borrower shall provide Lender
with agreements, acceptable to Lender, that, upon the happening of an Event of
Default, Subcontractors will, at Lender's request, continue performance pursuant
to their agreements with Contractor, until completion of construction of the
Improvements, provided that Subcontractors shall be compensated by Lender, from
the date on which Lender assumes any such Major Subcontracts, in accordance with
their agreements with Contractor. If Major Subcontracts have not been executed,
Borrower shall furnish to Lender firm bids or internal estimates of the work to
be covered by the Major Subcontract, and such supporting documentation therefor
as Lender may require. Borrower shall submit to Lender a list of all other
Subcontractors working on the Improvements and shall keep the list current until
the Improvements are completed. All subcontracts for work, labor and materials
entered into by Contractor or directly by Borrower, either with Major
Subcontractors, other subcontractors or with Borrower's own employees or agents,
shall cover completion of the Improvements shown on the Plans and
Specifications. The aggregate contract price for constructing and equipping the
Improvements in accordance with the Plans and Specifications and
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representations made to Lender and all other costs of the project being financed
with the Loan proceeds and pursuant to the terms and conditions hereof (the
"Project") shall not exceed the amount allocated and described in the budget for
the Loan (the "Loan Budget") approved in writing by Lender and attached hereto
and made part hereof as Exhibit "B". Borrower shall furnish such additional
supporting documentation for the cost of the items described in the Loan Budget
as may be required by Lender.
11. SURVEY. Three (3) original copies of a current (not more
than three (3) months old) survey, satisfactory to Lender and prepared by a
registered land surveyor in accordance with Lender's requirements, of all
property covered by the Mortgage, showing the location and dimensions of all
proposed Improvements thereon and indicating the routes of ingress and egress
for public access to the Property, all utility lines, walks, drives, recorded or
visible easements and rights-of-way on the Property, and showing that there are
no encroachments, improvements, projections or easements (recorded or
unrecorded) on the property lines. Foundation perimeters are to be added to the
survey by the surveyor as soon as they are in place for the building. The survey
shall certify the acreage of the Land and shall indicate whether the Land is
located within any flood hazard area. The survey must be prepared in accordance
with the Minimum Technical Standards set forth by the Florida Board of Land
Surveyors pursuant to the provisions of Section 472.127 of the Florida Statutes
and must be certified in favor of Lender and Title Insurer. The surveyor's
certificate placed on the survey shall include a statement that said survey
locates any and all items set forth as exceptions in the mortgagee title
insurance policy (the "Title Policy") as Lender may require, shall satisfy all
of the survey requirements in the Commitment, and shall include any other
requirements of Lender. A final survey shall be furnished after all Improvements
are completed on the Property.
12. NOTICE OF COMMENCEMENT. A Notice of Commencement signed
by Borrower at closing or prior to the commencement of construction of the
Improvements by not more than thirty (31) days prior to such commencement, shall
be placed of record, with a certified copy thereof being posted at the job site
in accordance with the Florida Construction Lien Law, Chapter 713, Florida
Statutes (the "Florida Construction Lien Law") and a copy thereof furnished to
Lender. The legal description in the Notice of Commencement shall apply only to
the "Ocean Palms Parcel." Proof acceptable to Lender, in its sole discretion,
that the Notice of Commencement has been properly posted at the job site in
accordance with the requirements of the Florida Construction Lien Law, shall be
delivered to Lender and to the Title Insurer. The Notice of Commencement shall
name the Lender and Title Insurer as additional parties to whom all notices
shall be given.
13. BORROWER'S ARCHITECT'S AND ENGINEER'S OPINIONS AND
AGREEMENTS. Written opinions from Borrower's Architect and Engineer ("Engineer"
or "Architect") covering such matters as may be required by Lender and stating
that the proposed Improvements, when completed in accordance with the Plans and
Specifications, will comply with all governmental restrictions, ordinances and
regulations. Further, Borrower will provide Lender with an agreement by the
Architect and Engineer in form and content acceptable to Lender, that, in the
event of default under the terms of any of the Loan Documents, the Architect and
the Engineer will, at Lender's request: (a) continue performance pursuant to its
agreement with Borrower until completion of construction of the Improvements,
provided that Lender shall compensate the
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Architect and the Engineer from the date of Lender's assuming such agreement in
accordance with said agreement for all such services rendered, and (b) permit
Lender to use the Plans and Specifications at no cost to Lender.
14. LENDER'S INSPECTOR'S PROJECT EVALUATION REPORT. A
Project Evaluation Report, including a Plan and Cost Review, acceptable to
Lender, completed by Xxxxxx Construction Consultants ("Lender's Inspector" or
"the Inspector") substantiating that the Plans and Specifications are adequate
and that the costs of constructing the Improvements in accordance with the Plans
and Specifications are fairly represented by the Borrower's Cost Breakdown and
do not exceed the amounts set forth in the attached Exhibit "B" and that the
proposed Improvements when completed in accordance with the Plans and
Specifications, will comply with all governmental restrictions, ordinances and
regulations. The cost of the Evaluation Report shall be borne by Borrower.
15. ASSIGNMENT OF CONTRACT RIGHTS. An assignment to Lender
of all Borrower's contract rights under the Major Subcontracts, the Architect's
Contract and all other contracts.
16. COMMITMENT FEE. The commitment fee is in the amount of
$130,000.00. The amount of $65,000.00 (including $26,000.00 paid to Lender's
Participant, FINOVA Capital Corporation ("Participant") was paid at the time of
the execution of the Commitment, and the balance of $65,000.00, including
$26,000.00 payable to Participant shall be due at closing.
17. GUARANTIES. The unqualified and unconditional guaranties
of the Guarantors named in the Commitment ("the Guarantors").
18. TAXES. Proof of payment of real property and personal
property taxes for 1995 and all prior years, and information as to tax
identification numbers, tax rates, estimated tax values and the identities of
the taxing authorities and evidence of payment of any outstanding liens or other
outstanding obligations or encumbrances against the Property or Improvements.
Proof of payment of 1996 real and personal property taxes shall be provided by
Borrower to Lender no later than February 1, 1997.
19. UTILITIES. Letters (or other evidence satisfactory to
Lender) evidencing the availability and sufficiency of water, sewer, electric,
telephone and natural gas utility services to satisfactorily service the
proposed Improvements and that such facilities are available and will be
furnished.
20. PERMITS. Building permit(s) and satisfactory evidence
that the Land and the Improvements and the intended uses of the Property are in
compliance with all applicable laws, regulations and ordinances. Such evidence
may include letters, licenses, permits, certificates and other correspondence
from the appropriate governmental authorities, opinions of Borrower's attorney
or other attorneys and opinions or certifications from Borrower's Architect, as
Lender may determine. Those laws, regulations and ordinances with which
compliance should be evidenced include, by way of illustration but not
limitation, the following: (a) environmental protection laws; (b) erosion
control ordinances; (c) doing-business and/or licensing laws; and (d)
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zoning laws (in this regard, the evidence submitted should include (i) the
zoning designation made for the Land; (ii) the permitted uses of the Land under
such zoning designation, (iii) zoning requirements as to parking, lot size,
ingress and egress and building setbacks, (iv) the absence of moratoriums that
would prohibit construction of the Improvements, (v) site plan approval, and
(vii) the length of time of the validity of all such approvals, variances and
permits).
21. COST BREAKDOWN. A detailed construction and
non-construction cost breakdown and loan budget on Lender approved forms of all
construction and non-construction costs including specification of which items
are to be funded from sources other than the Loan. If the Project Evaluation
Report prepared by Lender's Inspector indicates the total estimated costs of the
Improvements to the Property to the Borrower exceed the principal amount of the
Loan, Lender may require Borrower to invest immediately the amount of the
difference in accordance with the equity requirements of this Loan Agreement and
the Commitment.
22. SOIL TESTS. A report as to soil borings and compaction
reports and analysis made at the Land by a soil testing firm satisfactory to
Lender and Lender's Supervising Inspector. The number and location of such
borings shall be in accordance with the recommendations of the soil testing firm
and must also be satisfactory to Lender. The report shall include the
recommendations of the soil testing firm as to the preparation of the soil
needed in order to adequately support the Improvements. (During the course of
construction, Borrower shall also provide such reports as to concrete tests and
additional soil tests as are requested or required by Lender).
23. FINANCIAL STATEMENTS. Current financial statements, tax
returns, and such other credit information as Lender may require for Borrower
and Guarantors in form and content satisfactory to Lender, and including
evidence of the availability of Borrower's funds necessary, in Lender's sole
opinion, to pay the total costs (hard construction and indirect costs) of the
project in excess of the amount of the Loan. The Commitment contains further
requirements with respect to the foregoing financial statements and credit
information.
24. PLANS AND SPECIFICATIONS. Two (2) sets of the approved
site plan and the complete and detailed Plans and Specifications for the
development of the Improvements which Borrower shall have approved in writing
and which shall be satisfactory to Lender, including any changes or
modifications thereto to the date of receipt by Lender, and any and all
construction contracts or other documents in the possession or control of
Borrower relating to the construction of the Improvements. The two (2) sets must
include plans and specifications for architectural, structural, mechanical,
plumbing, electrical and site development (including storm drainage, utility
lines, erosion control and landscaping) work, and must be stamped with all
required approvals from all applicable governmental authorities; certified under
seal by Architect and signed by Borrower to be true copies of the Plans and
Specifications architecturally and structurally approved by all authorities and
agencies having jurisdiction thereon and for which a building permit has been
issued. They must also incorporate the recommendations made in the soil testing
report. No changes shall be made thereafter in the Plans and Specifications
without the prior written consent of the Lender, except as set forth herein.
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25. CERTIFICATE OF ARCHITECT. Certificate of the Architect
who prepared the Plans and Specifications addressed to Lender and stating that
any necessary soil testing has been performed and soil conditions are
satisfactory for the structural support of the Improvements; that there is
adequate ingress and egress; that the Plans and Specifications have been
approved by all governmental authority and meet all State construction, energy
conservation, and environmental codes; that provisions have been made for the
handicapped; that the zoning is proper; that the permit has been properly
issued; that all utilities necessary to service the Improvements on the Property
are available with adequate capacity; that all required governmental permits and
approvals have been obtained; and such additional items as may be required by
Lender. The Certificate of Architect shall include submission of reports and
certifications regarding fill, foundation, design, settlement, H.V.A.C. and such
other reports and certifications as required by Lender.
26. CERTIFICATE OF ENGINEER. Certificate of the Engineer who
prepared the Plans and Specifications addressed to Lender and stating that any
necessary soil testing has been performed and soil conditions are satisfactory
for the structural support of the Improvements; that there is adequate ingress
and egress; that the Plans and Specifications have been approved by all
governmental authority and meet all State construction, energy conservation, and
environmental codes; that the zoning is proper; that the permit has been
properly issued; that all utilities necessary to service the Improvements on the
Property are available with adequate capacity; that all required governmental
permits and approvals have been obtained; and such additional items as may be
required by Lender. The Certificate of Engineer shall include submission of
reports and certifications regarding fill, foundation, design, settlement, and
such other reports and certifications as reasonably required by Lender.
27. LIEN WAIVERS. Waivers of lien from each and every
contractor, subcontractor, laborer or material supplier performing services or
supplying material to the Property within the past ninety (91) days, and an
affidavit listing all of said entities and certifying that no work has been
performed and no materials have been supplied for which the costs remain unpaid
prior to closing.
28. FORM OF CONTRACT. Copy of form of contract for the sale
of the timeshare units.
29. INSURANCE. Evidence of insurance in form and content
satisfactory to Lender, as set forth herein.
30. TIMESHARE DOCUMENTS. Copies of all timeshare documents
pertaining to the "Ocean Palms" Parcel in form and content acceptable to Lender
and in compliance with Florida law.
31. COLLATERAL ASSIGNMENT OF LICENSES AND PERMITS. A
Collateral Assignment of all licenses, permits, approvals and certifications
relating to the use and construction of the Improvements on the Property,
including but not limited to trade and fictitious names, all of which must be
transferable during the entire term of the Loan, in form and content acceptable
to Lender.
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32. APPRAISAL. M.A.I. appraisal in accordance with the
requirements of the Commitment.
33. BORROWER'S AUTHORIZED SIGNERS AND DISBURSEMENT
INSTRUCTIONS AGREEMENT. A Borrower's Authorized Signers and Disbursement
Instructions Agreement shall be executed by Borrower.
34. CERTIFICATE OF HAZARDOUS WASTE. If required by Lender,
an environmental audit prepared by an independent engineer or other qualified
consultant or expert which contains conclusions reasonably satisfactory to
Lender and which evaluates (i) whether any hazardous materials or other toxic
substances are present in the soil or surface or groundwater at the Property or
the soil or surface or groundwater adjacent to the Property in quantities that
would violate applicable federal, state or local laws or requirements, (ii)
whether any hazardous materials or other toxic substances have previously been
released, intentionally or unintentionally, to the soil or surface or
groundwater at the Property, (iii) whether hazardous materials or other toxic
substances are now or have previously been used, stored or disposed of at the
Property, and (iv) whether activities presently being conducted at the Property
are in compliance with all applicable federal, state or local environmental
regulations. The environmental audits shall be based upon such sampling of the
soil, air, and waters; visual inspections; and such other methods as shall be
appropriate. All sampling shall be conducted using accepted and scientifically
valid technology and methodologies. The consultant shall prepare a written
report detailing its findings and conclusions. Should this audit indicate the
presence of hazardous materials on the Property, the Borrower shall take all
steps necessary to further define the nature of the materials, any risks
resulting therefrom, and possible remedial measures. For this purpose the Lender
reserves the right upon reasonable notice to enter and investigate the Property
and to take such samples as may be necessary to perform soil, water or other
analyses.
35. PAYMENT AND PERFORMANCE BONDS. Unconditional Statutory
Payment and Performance Bonds, including dual obligee riders, for all Major
Subcontractors (and for such other Subcontractors as Lender may require) which
will guarantee the completion of all Improvements in accordance with the
approved Plans and Specifications and payment of all costs incurred.
36. RECEIVABLE LENDERS COMMITMENTS. Commitments for
receivable financing acceptable to Lender together with such agreements,
consents and/or subordinations from receivable lenders as may be required by
Lender.
37. MISCELLANEOUS.
a. Copies of any and all existing or
proposed restrictive covenants or agreements
affecting the Property.
b. Such other matters or documents as Lender
shall require.
All of the Loan Documents shall be in form and content satisfactory to
the Lender, and shall comply with all of the requirements set forth in the Loan
Agreement and the Commitment.
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ARTICLE II
INITIAL DISBURSEMENT
The proceeds of this Loan which are approved by the Lender for any
initial funding shall be funded subsequent to the following:
1. Execution of all such documents as Lender and
Lender's counsel may require to insure that the Lender has a valid first lien in
the amount of the Loan.
2. Recording of all documents as required by Lender's
counsel.
3. Receipt by Lender of the marked-up Title Insurance
Commitment, insuring Lender's Mortgage, which marked-up commitment must be
approved by Lender's counsel.
4. Evidence reasonably satisfactory to Lender and
Lender's counsel of the fulfillment of any other condition to funding.
5. Delivery to Lender of the documents required above
as a condition to funding.
ARTICLE III
WARRANTIES OF BORROWER
As material inducements to Lender to enter into this Loan Agreement and
to make the Loan, Borrower hereby warrants to Lender as follows:
1. VALIDITY OF LOAN DOCUMENTS. That the Loan Documents are
in all respects legal, valid and binding according to their terms and grant to
Lender a direct, valid and enforceable first lien security interest in the
Property and the personally located thereon subject only to bankruptcy,
insolvency and other similar laws affecting the rights of creditors.
2. PRIORITY OF LIEN ON PERSONALTY. That no xxxx of sale,
security agreement, financing statement or other title retention agreement
(except those executed in favor of Lender or executed in connection with
receivable financing) has or will be executed with respect to any personal
property, equipment or fixtures used in conjunction with the construction,
operation or maintenance of the Improvements.
3. CONFLICTING TRANSACTIONS OF BORROWER. That the
consummation of the transactions hereby contemplated and the performance of
Borrower's obligations under and by virtue of the Loan Documents will not result
in any breach of, or constitute a default under any mortgage, security deed,
deed of trust, lease, bank loan or credit agreement, corporate charter or bylaws
or other instrument to which Borrower is a party or by which it may be bound or
affected.
4. PENDING LITIGATION. That there are no actions, suits
or proceedings pending or, to the knowledge of Borrower, threatened against or
affecting Borrower or any
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Guarantor which affect any of the Property securing the Loan, or involving the
validity or enforceability of any of the Loan Documents or the priority of the
lien thereof, at law or in equity, or before or by any governmental authority,
except actions, suits and proceedings which are fully covered by insurance and
which, if adversely determined, would not substantially impair Borrower's
ability to perform each and every one of its obligations under and by virtue of
the Loan Documents; and that to Borrower's knowledge, it is not in default with
respect to any order, writ, injunction, decree or demand of any court or any
governmental authority.
5. VIOLATIONS OF GOVERNMENTAL LAW, ORDINANCES OR
REGULATIONS. That Borrower has no knowledge of any violation or notice of
violations of any federal or state law or municipal ordinance or order or
requirement of the county or city in which the Property are located or any
municipal department or other governmental authority having jurisdiction
affecting the Property, which violations in any way relate to or affect the
Property.
6. COMPLIANCE WITH ZONING ORDINANCES AND SIMILAR LAWS. That
the Plans and Specifications and construction pursuant thereto and the use of
the Property contemplated thereby have been approved by all appropriate
governmental and quasi-governmental authorities and accordingly comply and will
continue to comply with all applicable governmental and quasi-governmental laws,
regulations, and standard requirements.
7. AVAILABILITY OF UTILITIES. That all utility services
necessary for the construction of the Improvements and the operation thereof for
their intended purpose are available at the boundaries of the Land, including
water supply, storm and sanitary sewer facilities, electric and telephone
facilities.
8. BUILDING PERMITS. That all building permits required
for the construction of the Improvements have been obtained or may be obtained
without undue delay, unusual expense or material alteration of the Plans and
Specifications. Borrower shall deliver copies of all permits to Lender as they
are obtained and before construction commences.
9. CERTIFICATE OF OCCUPANCY. That upon completion of
the Improvements all certificates of occupancy required for the occupancy of the
Improvements may be obtained without undue delay or unusual expense. Borrower
shall deliver copies of all certificates of occupancy to Lender as they are
obtained.
10. CONDITION OF PROPERTY. That the Property is not
now damaged or injured as a result of any fire, explosion, accident, flood or
other casualty.
11. BROKERAGE COMMISSIONS. That any brokerage commission
due in connection with the transaction contemplated hereby has been paid in full
and that any such commission coming due in the future will be paid promptly by
Borrower. Borrower agrees to and shall indemnify Lender from any liability,
claim or loss arising by reason of any such brokerage commission. This provision
shall survive the repayment of the Loan and shall continue in full force and
effect so long as the possibility of such liability, claim or loss exists.
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12. USURY. The amounts to be received by Lender which are
or which may be deemed to be interest hereunder or under any of the Loan
Documents or otherwise in connection with the transactions herein contemplated
constitute lawful interest and are not usurious or illegal under the laws of the
State of Florida, and no aspect of the transactions contemplated by this Loan
Agreement is or will be usurious under current Florida law.
13. ACCURACY OF INFORMATION. Lender's commitment to make
the Loan, as expressed in the Commitment and accepted by Borrower is based on
the accuracy of Borrower's and each Guarantor's representations and statements.
Neither this Loan Agreement nor any document, financial statement, credit
information, certificate or statement required herein to be furnished or
furnished to Lender contains any untrue statement of a fact or omits to state a
fact material to this Loan Agreement or to Lender's decision to enter into this
Loan Agreement or the transaction contemplated hereunder. Lender shall have the
option to declare the Commitment to be breached if there shall have been any
material misrepresentation or misstatement or any material error in any
statement, document or other submission delivered to Lender, or if prior to the
initial Loan disbursement, there shall have been a material adverse change in
the state of facts submitted to Lender, or Borrower or any Guarantor has become
insolvent, bankrupt or incapacitated, or has otherwise been subject to any
material adverse change in financial condition. The Commitment is hereby
incorporated herein by reference, but to the extent it conflicts with the Loan
Documents, the Loan Documents shall govern.
14. SET-OFFS. Borrower does not have any defense or
set-off with respect to any money disbursed or otherwise advanced or to be
advanced hereunder.
15. CONTINUATION AND INVESTIGATION. The warranties and
representations contained herein shall be and remain true and correct so long as
any of Borrower's obligations hereunder have not been satisfied, or so long as
part of the Loan shall remain outstanding, and each request by Borrower for a
disbursement or extension of the Loan shall constitute an affirmation that the
foregoing representations and warranties remain true and correct as of the date
thereof. All representations, warranties, covenants and agreements made herein
or in any certificate or other document delivered to Lender by or on behalf of
Borrower pursuant to or in connection with this Loan Agreement shall be deemed
to have been relied upon by Lender notwithstanding any investigation heretofore
or hereafter made by Lender or on its behalf, and shall survive the making of
any or all of the disbursements contemplated hereby.
ARTICLE IV
COVENANTS OF BORROWER
Borrower hereby covenants and agrees with Lender as follows:
1. LOAN AGREEMENT. To duly and punctually perform, observe
and comply with all of the terms, provisions, conditions, covenants and
agreements on its part to be performed, observed and complied with hereunder and
under the Loan Documents and any other documents and instruments delivered to
Lender in connection herewith. Borrower will not suffer or permit any default or
Event of Default to exist hereunder or thereunder. Borrower will
11
promptly give notice in writing to Lender (a) of the occurrence of any material
litigation or proceeding affecting Borrower and whether or not Borrower's
liability, if any, is covered by insurance, and (b) of any dispute between
Borrower and any governmental or regulatory body or any other party, which
dispute may materially interfere with Borrower's normal operations or with
construction of the Improvements.
2. CONSTRUCTION CONTRACT. (a) To permit no default
under the terms of the Construction Contract; (b) to waive none of Contractor's
obligations thereunder; (c) to do no act which would relieve Contractor from its
obligations to construct the Improvements according to the Plans and
Specifications; and (d) to make no amendments, other than change orders as may
be permitted hereunder and under the Mortgage, to the Construction Contract
without Lender's prior written consent.
3. [DELETED]
4. [DELETED]
5. CONSTRUCTION SUBCONTRACTS.
a. To permit no default under the terms of the
Major Subcontracts;
b. To waive none of Subcontractors'
obligations thereunder;
c. To do no act which would relieve
Subcontractors of their respective obligations to construct the Improvements
according to the Plans and Specifications; and
d. To make no amendments, other than change
orders as Lender may approve in writing to any of the Major Subcontracts or
other subcontracts, without Lender's prior written consent.
6. INSURANCE. Borrower will procure for, deliver
copies of and original certificates of and maintain for the benefit of Lender
during the life of the Mortgage, insurance policies in such amounts as Lender
shall require, including a minimum of $2,000,000.00 of liability insurance, and
insurance insuring the Property against fire, builder's risk, hazard, extended
coverage, contents insurance and such other insurable hazards, casualties and
contingencies as Lender may require. The form of such policies and the companies
issuing them shall be acceptable to Lender. All policies, including builders
risk, hazard and liability policies, shall contain a standard, non-contributory
mortgagee clause making losses payable to Lender, its successors or assigns, as
mortgagee and loss payee. All policies shall include a provision for a minimum
thirty (31) day advance notice to Lender of any intended policy cancellation or
modification. Borrower shall not take out separate insurance concurrent in form
or contributing in the event of loss with that required to be maintained
hereunder, unless Lender is included thereon under a standard, non-contributory
mortgagee endorsement making losses payable to Lender. Borrower shall
immediately notify Lender whenever any such separate insurance is taken out and
shall promptly deliver to Lender the policy or policies of such insurance. The
said property insurance so obtained shall include "all risks", builder's risk,
on a reporting completed
12
value form, on the Improvements, buildings, machinery, equipment, materials,
supplies and temporary structures and all other property of any nature used for
the construction of the buildings, with an endorsement which includes as a loss
payable any additional interest expense caused by a peril insured against under
the policy. This coverage for interest expense is limited to the period of time
from the date of physical damage until such time as will reasonably elapse, in
the exercise of due diligence, to the repair of the damage to its prior state.
The amount of coverage of the policy of insurance shall be the full replacement
cost, including underground work, but not less than $11,000,000.00. Insurance
certificates (and evidence of the payment of premiums for increases)
representing increased property insurance coverage shall be provided on a
monthly basis to cover the work in place. Applicable notice to be given to
Lender at the following address: 000 Xxxx Xxx Xxxx Xxxxxxxxx, Xxxx Xxxxxxxxxx,
Xxxxxxx 00000, attention: Commercial Real Estate Lending Department.
The Borrower shall submit to Lender evidence satisfactory to
Lender as to whether or not the Property or any part thereof is located within
an area identified pursuant to the Flood Disaster Protection Act of 1973 as
being in a flood hazard area. If the Property is located in a flood hazard area,
flood insurance shall be obtained for the maximum amount of coverage available
through the federal flood insurance program for the improvements located on the
Property from time to time or 100% of the highest insurance value of the
improvements on a replacement cost basis, whichever is less. The National Flood
Insurance Program flood policy shall cover the same parties covered under the
builder's risk policy other insurance policies with coverage for flood,
collapse, rain damage and such other usual coverage as may be obtained
thereunder, and such policy will be written with an insurance company and with
cancellation provisions as hereinabove provided. The insurance coverage, without
limiting the same by this description, shall extend to any loss occasioned by
fire, windstorm, other perils of extended coverage, vandalism, malicious
mischief, theft, mysterious disappearance and such other coverage as is a normal
incidence of builder's risk. The foregoing insurance shall specifically cover
necessary architect and engineering fees necessary to repair or replace any
insured property and shall also cover debris removal. Further, the insurance
shall at least permit waiver of subrogation so any release of liability entered
into prior to any loss will not affect the validity of the coverage otherwise
provided.
At least thirty (31) days prior to the expiration date of all
such policies, Borrower shall deliver to Lender proof of renewals of all
required policies in a form satisfactory to Lender. As further security for the
indebtedness secured hereby, the delivery of the insurance policies to Lender
shall constitute an assignment of all unearned premiums. In the event of the
foreclosure of this Mortgage or any other transfer of title to the Property in
extinguishment of the indebtedness secured hereby, all right, title and interest
of Borrower in and to all insurance policies then in force shall pass to the
purchaser or grantee.
Lender is hereby authorized and empowered, at its option, to
adjust or compromise any loss under any insurance policy. Each insurance company
is hereby authorized and directed to make payment for all such losses directly
to Lender instead of to Borrower and Lender jointly. After deducting from the
insurance proceeds any expense incurred by it in the collection or handling of
said funds, Lender shall apply the net proceeds, at its sole option, to the
reduction of the sums secured hereby or toward the repair and restoration of the
Improvements,
13
or for any other purpose or object satisfactory to Lender without affecting the
lien of the Mortgage for the full amount secured hereby before such payment took
place. Lender shall not be held responsible for any failure to collect any
insurance proceeds due under the terms of any policy, regardless of the cause of
such failure.
If required by Lender, Borrower will pay to Lender on the
first (1st) day of each month, together with and in addition to the regular
installment of interest and principal and until the Note is fully paid, an
amount equal to one-twelfth (1/12) of the yearly premiums for insurance, to
enable Lender to pay such insurance premiums when due. The Borrower shall
promptly furnish Lender with the insurance premium statements. Such added
payments shall not be nor be deemed to be trust funds, but may be commingled
with the general funds of Lender and Lender shall not pay interest on them. At
the option of Lender, such added payments may be carried as a debit item on
Lender's books and accounts. Upon demand of Lender, Borrower agrees to deliver
to Lender such additional sums as are necessary to make up any deficiencies in
the amounts necessary to enable Lender to pay such insurance premiums. Lender
shall have no responsibility for payment of any premium for insurance hereunder,
except to the extent that funds are deposited by Borrower with Lender hereunder.
In the event of a default by Borrower in the performance of any of the terms,
covenants and conditions in the Mortgage, this Loan Agreement or the Note,
Lender may, at Lender's option, apply any amount then held by Lender under this
paragraph to the reduction of the indebtedness secured in the Mortgage.
7. COLLECTION OF INSURANCE PROCEEDS. To cooperate with
Lender in obtaining for Lender the benefits of any insurance or other proceeds
lawfully or equitably payable to Borrower or Lender in connection with the
transactions contemplated hereby and in paying any indebtedness or obligation of
Borrower to Lender incurred hereunder (including the payment by Borrower of the
expense of an independent appraisal on behalf of Lender in case of a fire or
other casualty affecting the Property).
8. AD VALOREM TAX. Subject to the provisions in the
Mortgage, Borrower shall submit proof, on an annual basis, that all real
property taxes have been timely paid.
9. APPLICATION OF LOAN PROCEEDS. To use the proceeds of the
Loan solely for the purpose set forth herein and in no event to use any of the
Loan proceeds for any other purpose whatsoever. Borrower shall make only such
payments on account of other construction contracts or other work which may
entitle the person performing it to lien rights in the Property as are proper
payments under the Florida Construction Lien Law.
10. EXPENSES. To pay all costs of closing the Loan and
incurred during the term of the Loan and all expenses of Lender with respect
thereto, including but not limited to fees of Lender's Inspector, Lender's and
Participant's attorneys' fees and costs (including attorneys' fees and costs
incurred by Lender subsequent to the closing of the Loan in connection with the
disbursement, administration, collection, restructure, amendment or transfer of
the Loan), advances, recording expenses, surveys, title insurance premiums,
intangible taxes, documentary stamps, sales taxes, surtax and other revenue
fees, escrow fees, Architect's and Engineer's costs and inspection fees,
expenses of foreclosure (including reasonable attorneys' fees and costs) and
similar items, and to allow all closing papers, Loan Documents and other legal
matters to be
14
subject to the approval of Lender's and Participant's attorneys. Under no
circumstances will Lender pay to any third party any mortgage brokerage or other
fees incurred in connection with this Loan and Borrower covenants and agrees to
indemnify Lender and hold Lender harmless from any and all such claims for fees
or commissions by third parties. Further, Borrower agrees to pay all of Lender's
costs and attorneys' fees, including all appellate litigation, involving any of
such claims.
11. BORROWER'S EQUITY REQUIREMENT. Lender reserves the
right to require, at Borrower's expense, a construction cost analysis by
Lender's Inspector or by an expert in the construction cost field, which expert
shall be designated by Lender. If Lender estimates, at any time and from time to
time, that the amount necessary to assure final completion of the construction
of the Improvements including but not limited to interest and other soft or
non-construction budget items during the term of the Loan (the "Total Budget")
shall exceed the amount of the undisbursed Loan proceeds plus the total amount
of all equity investments made or scheduled to be made by Borrower, then Lender
shall have the option to require Borrower (a) to immediately deposit with Lender
the amount of any such difference, in cash or other form satisfactory to Lender,
which amount shall be disbursed toward the Total Budget costs prior to any
advance by Lender under the Loan, or (b) to expend the amount of any such
difference for items included in the Total Budget with satisfactory evidence of
such expenditure being provided to Lender prior to any advance by Lender of the
Loan funds. Lender shall be assured at all times, to its satisfaction, that the
undisbursed Loan funds are sufficient to complete the Improvements in accordance
with the Total Budget and in accordance with the Plans and Specifications and
this Loan Agreement. (Lender reserves the right of continual verification of
adequate equity investments made by Borrower as herein set forth.) Each such
deposit shall be expended before any or any other Loan disbursements will be
made, and it shall be advanced as construction progresses.
12. COMMENCEMENT AND COMPLETION OF CONSTRUCTION.
Construction of the Improvements shall commence within thirty (31) days of this
date and subsequent to the recordation of a Notice of Commencement, and Borrower
shall diligently pursue said construction to completion. Good workmanship and
quality materials shall be utilized. Quality of construction is of the essence
and each construction draw shall be subject to satisfactory quality and
completion of work in place. Borrower shall supply such sums of money and
perform such duties as may be necessary to complete the construction of the
Improvements pursuant to the Plans and Specifications and in full compliance
with all terms and conditions of the Loan Documents, all of which shall be
accomplished within the Term of the Construction Period as defined herein, and
without liens, claims or assessments (actual or contingent) asserted against the
Property for any material, labor or other items furnished in connection
therewith, and all in full compliance with the Florida Construction Lien Law,
and further in compliance with all construction, use, building, zoning and other
similar requirements of any pertinent governmental authority. Borrower will
provide to Lender evidence of satisfactory compliance with all of such
requirements upon request therefor by Lender. Completion of construction shall
include but not be limited to grading, landscaping, adequate sewer, water,
electrical, gas, telephone and other utility facilities, completed streets,
sidewalks, drainage and curbs, both on-site and off-site, public and private.
The construction and development of the Improvements described herein shall be
substantially completed within sixteen (16) months from the date of this
Agreement ("the Construction
15
Period"). Borrower shall not be required to substantially complete said
construction within sixteen (16) months if said completion is delayed due to any
acts of God, emergencies, strikes or other causes out of Borrower's control.
Notwithstanding the Lender's determination that the Construction Period shall be
extended for this reason, the Lender, in its sole discretion at any time, shall
determine the length of the extension period to substantially complete the
construction of the improvements and Borrower shall promptly and diligently
complete said construction therefor. The construction and development of the
improvements shall be inspected by Lender. "Substantially Completed" shall mean
that the improvements have been completed in a sufficient manner to obtain all
requisite Certificates of Occupancy.
13. SALES CONTRACTS. Borrower shall not enter into any
sales contract which materially amends or modifies the form of sales contract
previously approved by Lender or which imposes conditions on the effectiveness
of the sales contract, without Lender's prior written consent.
14. ACCESS. Except for driveways located on the Property,
the rights-of-way for all roads necessary for the full utilization of the
Improvements for their intended purposes, have either been acquired by the
appropriate governmental authority or have been dedicated to public use and
accepted by such governmental authority, and all such roads shall have been
completed, or all necessary steps shall have been taken by Borrower and such
governmental authority to assure the complete construction and installation
thereof prior to the date upon which access to the Property via such roads will
be necessary. All curb cuts and traffic signals shown on the Plans and
Specifications are existing or have been fully approved by all necessary
governmental authorities.
15. RIGHT OF LENDER TO INSPECT PROPERTY AND RENEW PLANS. To
permit Lender and its representatives and agents, including Lender's Inspector,
to enter upon the Property and to inspect the Improvements and all materials to
be used in the construction thereof and to cooperate and cause Contractor to
cooperate with Lender and its representatives and agents during such inspections
(including making available to Lender working copies of the Plans and
Specifications together with all related supplementary materials); provided,
however, that this provision shall not be deemed to impose upon Lender any
obligation to undertake such inspections. Lender's Inspector shall perform
various services on behalf of Lender as described in the Commitment. The costs
of these services shall be charged to and shall be paid by Borrower. The
services performed by Lender's Inspector include but are not limited to review
of the Plans and Specifications, review of any and all construction contracts,
review of any and all other documents in the possession or control of Borrower
or any general contractor relating to the construction of Improvements and all
proposed changes to them, inspection of construction work for conformity with
the approved Plans and Specifications and approval of requests for Loan
disbursements. Borrower's supervising architect and engineer shall perform those
services described in the architect's and engineer's contracts, including
approvals of requisitions for payment required herein and the submission to
Lender of the architect's and engineer's certification required prior to final
disbursement.
16. CORRECTION OF DEFECTS. To promptly correct any defect
in the Improvements or any departure from the Plans and Specifications not
permitted herein which has
16
not been approved previously by Lender. The advance of any Loan proceeds shall
not constitute a waiver of Lender's right to require compliance with this
covenant.
17. SIGN REGARDING FINANCING. To promptly erect and
maintain on the Property, on a site suitable to Lender, a sign (1) indicating
that Lender is providing financing, all to Lender's reasonable satisfaction, and
to prevent the destruction or removal of said sign without Lender's prior
written approval; provided, however, such sign shall not violate any ordinance
or restrictive covenant.
18. APPROVAL OF CHANGE ORDERS. To permit, during the
construction of the Improvements, no individual deviation from the Plans and
Specifications which exceeds $5,000.00 and to permit no multiple deviations
which, in the aggregate, exceed $25,000.00, without Lender's prior written
approval. Regardless of amount, Borrower shall submit all proposed change orders
to Lender within five (5) days.
19. BOOKS AND RECORDS. To keep and maintain proper and
accurate books, records and accounts reflecting all items of income and expense
of Borrower in connection with the Property and the construction thereon; and
upon the request of Lender, to make such books, records and accounts immediately
available to Lender for inspection or independent audit. Such inspection shall
take place in Borrower's offices during normal business hours.
20. NOTIFICATION OF CLAIMS BY SUBCONTRACTORS AND
MATERIALMEN. To advise Lender promptly and in writing if Borrower receives any
Notice to Owner, written or oral, from any laborer, subcontractor or materialman
in connection with any labor or materials furnished in the construction of the
Improvements.
21. FINANCIAL AND OPERATING STATEMENTS. To submit to Lender
current audited (if so required by Lender), annual financial statements, in form
and content satisfactory to Lender, for Borrower and Guarantors within ninety
(91) days after the end of their respective fiscal year, the first to be
submitted no later than one (1) year from the date hereof, and the rest to be
submitted annually thereafter.
22. REPORTS. To submit to Lender the following:
a. within forty-five (45) days after each month end,
monthly sales reports inclusive of all projects of Borrower and its related
entities, along with Financing Summary Reports for all projects owned by
Vacation Break U.S.A.
b. within fifteen (15) days after the end of each
quarter Form 10-Q Reports and Summary Aging Reports and Escrow Account Analysis,
and Borrowing Base Reports from Textron Financial Corporation, FINOVA Capital
Corporation and Borrower's other receivable lenders as may be applicable.
23. UPDATED OPINION OF COUNSEL. To submit to Lender an
opinion of counsel licensed in the State of Florida and satisfactory to Lender
covering such further matters regarding the Improvements as Lender may require
from time to time.
17
24. ADDITIONAL DOCUMENTS. To perform hereunder as follows:
a. CONSTRUCTION. To furnish to Lender all
instruments, documents, initial surveys, footing or foundation surveys
(following the pouring of the final slab), certificates, plans and
specifications, appraisals, title insurance and other insurance, reports and
agreements and upon request (i) financial statements of Borrower and Guarantors
and (ii) other or further information as to the financial condition of Borrower
and Guarantors and (iii) the names of all persons with whom Borrower has
contracted or intends to contract for major contracts for the construction of
the Improvements or the furnishing of labor or materials therefor (for the
purposes hereof, a major contract shall be any contract in excess of $25,000.00
designated by Lender to be a Major Contract), and (iv) copies and/or lists of
all paid and/or unpaid bills for labor and materials with respect to the
construction of the Improvements, and (v) budgets of Borrower and revisions
thereof showing the estimated cost of construction of the Improvements and funds
required at any given time to complete and pay for such construction, and each
and every other document and instrument required to be furnished by the terms of
the Commitment.
b. PRESERVATION OF SECURITY. To sign and
deliver to Lender such documents, instruments, assignments and other writings,
and to do such other acts necessary or desirable to preserve and protect the
collateral at any time securing or intended to secure the Note, as Lender may
require.
c. THIS LOAN AGREEMENT. To do and execute
all and such further lawful and reasonable acts, conveyances and assurances in
the law for the better and more effective carrying out of the intents and
purposes of this Loan Agreement, as Lender shall reasonably require from time to
time.
25. FURTHER ENCUMBRANCES. With the exception of
receivable financing approved in writing by Lender, there shall be no secondary
or further financing of the personal or real property now or hereafter located
on the Property, or any part thereof, without Lender's prior written consent,
which consent Lender may arbitrarily withhold.
26. MORTGAGEE TITLE INSURANCE. Borrower warrants that
there are no matters pending against Borrower or the project which could result
in a change in the status of the title to the Property in the period of time
between the effective date of the commitment for mortgagee title insurance and
the recording of the Mortgage (the "gap"). Borrower covenants that it shall not
commit any act or permit any act to be committed which might result in a change
in the status of the title to the Property during the gap, and Borrower shall
indemnify Lender and the title insurance agent and the title insurance
underwriter from any and all losses, costs and expenses (including reasonable
attorneys' fees and costs) suffered as a result of a change in the status of the
title to the Property during the gap.
ARTICLE V V
METHOD AND CONDITIONS OF DISBURSEMENT OF LOAN PROCEEDS
1. DISBURSEMENTS.
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A. Loan proceeds for hard costs will be disbursed
upon Borrower's request under the percentage of completion program
(i.e., disbursement will be made periodically based on material and
work-in-place.) There shall be a ten percent (10%) retainage holdback
from each disbursement (unless otherwise agreed by Lender) until
completion of a construction line item and receipt of subcontractor's
Final Affidavit, applicable final releases of lien and such other
documentation as Lender may require, as well as inspection by Lender's
Inspector and such Inspector's concurrence that all work is completed
and satisfactory. The cost of furnishings shall be supported by
invoices.
B. Loan proceeds will be advanced substantially in
accordance with the Loan Budget attached hereto as Exhibit "B" (subject
to revision only with Lender's approval). Any amounts remaining
undisbursed from allocated reserves for the cost of the Improvements,
interest or indirect/supplemental soft costs shall be used to reduce
the committed loan amount accordingly.
C. Loan proceeds for soft costs will be funded upon
submission of approved invoices and such other written documentation as
Lender may require.
D. Interest will be billed and payable monthly on
disbursed loan proceeds outstanding. Interest will be automatically
paid monthly out of the interest reserve so long as all loans to the
Borrower are in good standing.
2. CERTIFICATE FOR PAYMENT. At such time as Borrower shall
desire to obtain a disbursement of any portion of the Loan proceeds, subject to
the other requirements hereof, Borrower shall complete, execute and deliver to
Lender and Participant, a request for an advance on a form of draw request
approved by Lender, with copies to the Lender's Inspector setting forth a
detailed breakdown of the requested disbursement and the original cost breakdown
approved by Lender together with the percentage of completion of each item and
the balance remaining to complete each item. The Certificate for Payment shall
be certified by Borrower and approved by Lender's Inspector.
Each contractor in privity with Borrower shall submit
their request on a properly completed Application and Certificate for Payment
and a Continuation Sheet (AIA Documents G712 and G713), properly notarized along
with any supporting requisitions or invoices of subcontractors and/or suppliers.
3. EVIDENCE OF PROGRESS OF CONSTRUCTION. The abovesaid
Certificate for Payment shall be accompanied by such evidence, at Borrower's
expense, in form and content satisfactory to Lender, which shall include but not
be limited to properly executed certificates, affidavits, waivers and releases
of lien from Borrower, Contractors and Subcontractors and/or such other persons
as Lender may require, showing:
a. The value of the portion of the Improvements completed
at that time;
19
b. That all outstanding claims for labor, materials and
fixtures for which Lender has funded prior requests for advance, have been
properly paid;
c. That there are no liens outstanding against the
Property except for Lender's lien and other than inchoate liens for property
taxes not yet due;
d. That Borrower has complied with all of Borrower's
obligations, as of the date thereof, under the Loan Documents;
e. That all construction prior to the date of the request
for an advance has been completed in a good and workmanlike manner in accordance
with the Plans and Specifications and as required by all inspecting governmental
authorities having jurisdiction thereof;
f. That all funds previously disbursed by Lender have
been applied in accordance with the Loan Budget;
g. That copies of all bills or statements for indirect
expenses for which the advance is requested are attached to said Certificate of
Payment; and
h. Except as otherwise may be provided, that all change
orders shall have been approved in writing by Lender.
A request for advance shall include a statement of the purposes for
which the advance is desired and invoices for the same, as Lender shall
reasonably require and approve. Prior to each hard cost advance, Lender must
receive a report from Lender's Inspector certifying that the value of the work
in place is not less than the amount being requested and that there are
sufficient funds remaining to complete the Improvements according to the
approved Plans and Specifications.
4. FOUNDATION SURVEY. Immediately upon the completion of the
construction of the foundation, three (3) copies of a foundation survey shall be
submitted to Lender which shall show and which shall certify to Lender and Title
Insurer, the locations of such foundations. The surveyor shall also submit a
certification as to the absence of encroachments from or onto the Property and
compliance of the Improvements, as then constructed, setback requirements and
other relevant restrictions. Lender reserves the right to require an endorsement
to the title insurance policy insuring that the building location is not in
violation of any easements of record and a Certificate of Architect certifying
that the building location is not in violation of any setback restrictions.
5. AS-BUILT SURVEYS. At Lender's request during
construction, Borrower shall submit as-built surveys for the site improvements
on the Property to Lender and shall reference the as-built survey in the title
insurance policy. In addition, during construction, Lender may request
certification from Borrower that all on-site and off-site Improvements required
to be constructed have been completed strictly in accordance with the approved
Plans and Specifications. The surveys shall show and include the requirements
expressed in the Commitment and such other requirements as Lender may require.
All surveys shall be sealed and certified to Lender and the title insuror.
20
6. ACCESS TO STREETS. Lender shall not make any
disbursement for construction of any of the Improvements on the Property if any
such Improvement shall not have satisfactory access to dedicated and completed
streets unencumbered by liens.
7. FINAL DISBURSEMENT DATE. Subject to the provisions of
this Article, Lender shall not be required to make any disbursement from the
proceeds of this Loan later than eighteen (18) months after the date of this
Agreement.
8. LIEN PRIORITY AS PREREQUISITE FOR CONSTRUCTION. As of
the date hereof, the Mortgage shall be of first lien priority as to the
Property. Lender shall in no event disburse funds from the Loan proceeds for the
construction of any of the Improvements unless (a) the Mortgage then shall
constitute a first lien on such Improvement, and (b) there shall exist no other
lien encumbering the Property other than those approved by Lender.
9. MATERIALS STORED. In no event shall Lender be required
to make any loan disbursement for any materials (or deposits therefor) unless
such materials are installed or securely stored on-site.
10. MATERIALS STORED ON-SITE. Lender is willing to make
loan disbursements based on the invoice value of insured materials securely and
properly stored on the construction site. All invoices for materials stored
on-site and the reasonableness of the quantity of such materials are subject to
Lender's review and approval. Lender must have a first lien on the materials
stored on-site. A list must be submitted to Lender of the materials to be stored
on-site for which loan disbursements will be requested. Such list must include a
breakdown by type, number of units and cost per unit.
11. MATERIALS STORED OFF-SITE. Lender will not make any
loan disbursements based on the value of materials stored off-site.
12. CONTINUATION OF TITLE INSURANCE COVERAGE. At the
discretion of Lender, the abovesaid Certificate for Payment shall be accompanied
by a construction loan endorsement to the Title Policy (paid for by the
Borrower), which endorsement shall (a) indicate that since the effective date of
the Title Policy (or the effective date of the last such endorsement,if
any),there has been no change in the status of title to the Land as set out in
the Title Policy, and (b) have the effect of increasing the coverage of the
Title Policy by an amount equal to the advance then being made, unless the Title
Policy expressly provides automatically and unconditionally for such increase in
coverage upon each such disbursement. Lender reserves the right to require an
endorsement to the title insurance policy, insuring that the building location
is not in violation of any easements of record.
13. EVIDENCE OF SOFT COST ALLOCATIONS. Borrower shall
furnish written documentation (invoices) which satisfactorily accounts to Lender
for the expenditure of funds allocated to the payment of the soft costs set
forth on Exhibit "B".
14. CONDITIONS PRECEDENT TO EACH DISBURSEMENT. At no time
and in no event shall Lender be obligated to disburse funds:
21
a. if any Event of Default as described herein or in
the Mortgage or other Loan Documents shall have occurred and shall not have been
cured, except that Lender may, at Lender's option, pay itself accrued interest
to the extent that Loan proceeds allocated to an interest reserve in the Loan
Budget remain undisbursed; or
b. if Lender determines that construction cannot be
completed within the time required by this Loan Agreement; or
c. if, prior to the Loan closing and at all times
during the term of the Loan, Lender is not satisfied, in its sole discretion,
that the proceeds of the Loan remaining undisbursed will be sufficient to
complete all of the Improvements according to the Plans and Specifications and
to pay for all labor, materials and costs and all other costs and disbursements
required to complete the Improvements, including interest and other
non-construction costs. If required by Lender, Borrower shall pay with its own
funds and furnish written documentation which satisfactorily accounts to Lender
for all acquisition, development, or other construction costs in excess of the
proceeds of this Loan necessary to fully complete the construction of the
Improvements. Each such payment shall be expended before any or any other Loan
disbursement will be made, and it shall be advanced as construction progresses;
or
d. if the Property shall have been damaged by fire or
other casualty.
15. RETAINAGE: CONDITIONS PRECEDENT TO FINAL
DISBURSEMENT. The final Loan disbursement shall be withheld by Lender, and shall
be disbursed along with all other retainages under this paragraph only upon
compliance with the following requirements (in addition to the requirements for
all other disbursements):
a. EVIDENCE OF COMPLETION. Receipt by Lender of
satisfactory evidence of the completion of the Improvements substantially in
accordance with the Plans and Specifications and approval of such completion by
all applicable governmental authorities.
b. AS-BUILT SURVEY. Receipt by Lender of three (3)
copies of a satisfactory "as-built" survey prepared by a registered surveyor, in
accordance with the Plans and Specifications and showing all of the Improvements
in place, including striping of parking areas, and a statement as to the number
of parking spaces. The survey shall be certified to Lender and Title Insurer and
shall also include a legal description of the boundary of the Land, the area of
the Land and of the Improvements, the location and dimensions of any easement
and the dimensions of the Improvements. The surveyor must include on the survey
a signed narrative statement certifying the existence or nonexistence of any
encroachment from or onto the Land and must include the date of the survey and
the surveyor's registration number and seal and such other matters as required
by Title Insurer, in form and substance satisfactory to Lender and Title
Insurer.
c. FINAL RELEASES OF LIEN: CONTRACTOR'S AFFIDAVIT.
Receipt by Lender of all final releases of lien by Contractor and all
Subcontractors and potential lienors and of a final Contractor's Affidavit from
all contractors in privity with Borrower notarized sufficient in the opinion of
Lender's counsel to comply with the Florida Construction Lien Law, and the
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dissolution of any mechanics' and materialmen's liens (inchoate or otherwise)
affecting title to the Property.
d. BORROWER'S SUPERVISING ARCHITECT'S CERTIFICATION.
Certification from the Architect that all on-site and off-site Improvements
required to be constructed have been completed substantially in accordance with
the approved Plans and Specifications and are free of structural deficiency.
e. CONTRACTOR'S CERTIFICATION. Certification from
Contractor that all on-site and off-site Improvements required to be constructed
have been completed strictly in accordance with the approved Plans and
Specifications and are free of structural deficiency.
f. BORROWER'S AFFIDAVIT. Certification by Borrower
that all on-site and off-site Improvements required to be constructed have been
completed substantially in accordance with the approved Plans and Specifications
and are free of structural deficiency.
g. AS-BUILT PLANS AND SPECIFICATIONS. One (1) set of
detailed as-built plans and specifications must be submitted to Lender as soon
as they are completed but in no event later than one month from the issuance of
the Certificate(s) of Occupancy of the Improvements. They must be approved and
identified as such in writing by Borrower and Borrower's Architect. The set must
include plans and specifications for architectural, structural, mechanical,
plumbing, electrical and all site development (including storm drainage, utility
lines and landscaping) work.
h. CERTIFICATE OF OCCUPANCY. Certificate of Occupancy
from the applicable governmental authority and applicable acceptance
certification by the applicable governmental authority as to public works.
i. OTHER EVIDENCE. Such other evidence as Lender may
require to establish that the Improvements and their intended use comply with
all applicable zoning and other requirements of the public authorities having
jurisdiction including but not limited to compliance with the National
Environmental Policy Act and any other applicable Federal, State, local or
municipal environmental impact or energy laws or regulations.
j. INSURANCE. Insurance coverage shall be broadened
to include plate glass insurance and other permanent insurance in form
satisfactory to Lender.
16. NOTICE, FREQUENCY AND PLACE OF DISBURSEMENTS. At
Lender's option (a) the abovesaid request for advance shall be submitted to
Lender at least seven (7) business days prior to the date of the requested
advance, (b) disbursements shall be made no more frequently than monthly
(excluding advances at Lender's discretion for the payment of interest,
inspections, title endorsements or other advances from reserved funds in the
Loan Budget as permitted by this Agreement) and (c) all disbursements shall be
made by transfer to Borrower's account at Lender or at such other place as
Lender may designate from time to time.
17. DEPOSIT OF FUNDS ADVANCED. The above notwithstanding,
following any Event of Default, at Lender's option, Borrower shall deposit all
loan proceeds advanced by
23
Lender in a separate and exclusive account to be withdrawn and used solely for
the payment of bills for labor, materials and fixtures used or to be used in
construction of the Improvements and other costs contemplated by the approved
budget, and Borrower will promptly furnish Lender with evidence thereof.
18. ADVANCES DO NOT CONSTITUTE A WAIVER. No advance of
Loan proceeds hereunder shall constitute a waiver of any of the conditions of
Lender's obligation to make further advances, nor in the event Borrower is
unable to satisfy any such condition, shall any such waiver have the effect of
precluding Lender from thereafter declaring such inability to be an event of
default described herein or in the Mortgage.
19. WARRANTIES AND REPRESENTATIONS TRUE. Borrower's
warranties, representations and covenants in the Loan Documents shall be true
and correct on and as of the date of each advance with the same effect as if
made on such date.
ARTICLE VI
DEFAULTS
Upon the occurrence of any one or more of the following circumstances
("Event(s) of Default"), Lender shall, at its option, be entitled, in addition
to and not in lieu of the remedies provided for in the Note, Mortgage, or other
Loan Documents, to proceed to exercise any remedy described herein:
1. DEFAULT UNDER PROMISSORY NOTE. Failure by Borrower to
pay, as and when due and payable, any installment of interest, principal or any
other payment required to be paid by the Mortgage, the Note hereby secured or
any other Loan Documents, after the expiration of any applicable grace period;
or
2. DEFAULT UNDER LOAN DOCUMENTS. Failure by Borrower to
duly observe any other covenant, condition or agreement of the Mortgage, the
Note, the Commitment, or any Loan Document or any other security instrument
given hereunder after the expiration of any applicable grace period; or
3. DEFAULT OF OTHER OBLIGATIONS. Failure by Borrower to
pay, as and when due and payable, all the indebtedness, or to duly observe all
of the covenants, conditions and agreements now or hereafter existing between
Borrower or Participant and Lender pursuant to the terms and conditions of any
other obligation or indebtedness; or
4. BREACH OF WARRANTY. Any warranty made or agreed to be
made herein or in any related Loan Document heretofore, concurrently or
hereafter executed shall be breached by Borrower or shall prove to be false or
misleading; or
5. FILING OF LIENS AGAINST THE PROPERTY. Any lien for
labor, material, taxes or otherwise shall be filed against the Property or
otherwise incurred and not be removed within fifteen (15) days from the date of
filing any such lien; or
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6. MATERIAL ADVERSE CHANGE. Borrower or any Guarantor
shall suffer any material adverse change in either's respective financial
condition which, in Lender's reasonable opinion, could impair the ability of
Borrower to perform all of its duties and obligations under the Loan Documents;
or
7. DEFICIENCY. In Lender's sole opinion, the cost of
completing the Improvements in accordance with the Plans and Specifications
exceeds the total amount set forth in the Loan Budget, and Borrower has failed
to make arrangements satisfactory to Lender, in Lender's sole discretion, for
the payment of such additional costs; or
8. LEVY UPON THE PROPERTY. A levy be made under any
process on, or a receiver be appointed for the Property or any other property of
Borrower; or
9. BANKRUPTCY OR INSOLVENCY OF BORROWER.
a. The filing by Borrower or any Guarantor of a
voluntary petition in bankruptcy for adjudication as a bankrupt or insolvent, or
the filing by Borrower or any Guarantor of any petition or answer seeking or
acquiescing in any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any present or
future federal, state or other statute, law or regulation relating to
bankruptcy, insolvency or other relief for debtors, or Borrower or any Guarantor
seeking or consenting to or acquiescing in the appointment of any trustee,
receiver or liquidator of Borrower or any Guarantor or of all or any substantial
part of the Property or of any or all of the rents, revenues, issues, earnings,
profits or income thereof, or the making of any general assignment for the
benefit of creditors, or written admission by Borrower or any Guarantor of its
inability to pay its debts generally as they become due; or
b. The filing of a petition against Borrower or any
Guarantor seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future federal,
state or other statute, law or regulation relating to bankruptcy, insolvency or
other relief for debtors, or the appointment of any trustee, receiver or
liquidator of Borrower or any Guarantor or of all or any substantial part of the
Property or of any or all of the rents, revenues, issues, earnings, profits or
income thereof without Borrower's consent or acquiescence or the death of
Borrower or Guarantor or both; or
10. ASSIGMENT FOR THE BENEFIT OF CREDITORS. Borrower or
any Guarantor shall make a general assignment for the benefit of creditors; or
11. TRANSFER OF PROPERTY. Borrower shall, without
Lender's prior written consent, whether voluntarily or by operation of law,
sell, transfer, convey or further encumber all or any part of its interest in
the Property or in any of the personally located thereon or used or intended to
be used in connection therewith, excepting only transfers due to involuntary
condemnation which do not render the Property useless for its intended purpose
hereunder.
12. ABANDONMENT OR CESSATION OF CONSTRUCTION.
Construction of the Improvements shall be abandoned or shall cease for any
reason and not be resumed within thirty
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(31) business days thereafter unless such cessation is due to any reason set
forth in Paragraph 12, Article IV of this instrument, to strike or
unavailability of materials unless such events of force majeure shall delay
construction so long that the Improvements reasonably cannot be completed within
the time allocated for completion herein; or
13. LIEN AGAINST PROPERTY. Borrower grants any mortgage,
lien or encumbrance upon the Property other than in connection with receivables
financing for which Borrower has obtained Lender's written approval; or
14. FAILURE TO DISPROVE DEFAULT. Lender shall reasonably
suspect the occurrence of one or more of the abovesaid Events of Default and
Borrower, upon Lender's written request specifying such Event of Default, shall
fail to provide evidence reasonably satisfactory to Lender that such Event or
Events of Default have not in fact occurred; or
15. ENCROACHMENTS AND PERMITS. Any Improvements which
encroach upon any street or road setback or easement or upon any adjoining
property, or violate any ordinance, regulation, rule or direction of any federal
or state agency, or of any governmental or quasi-governmental authority, or any
zoning setback line, or the building permit(s) shall be revoked or suspended or
shall lapse, or if any building or other permit or license shall be conditional
in nature and Borrower shall fail to punctually satisfy the conditions so as to
prevent its invalidity; or
16. UNAUTHORIZED WORK. Borrower shall, without Lender's
prior written consent, undertake or contract for work on the Property outside of
or beyond the scope of the Plans and Specifications; or
17. BREACH. A violation or breach shall occur in any
agreement, covenant or restriction affecting title to the Property, including
but not limited to matters appearing as permitted exceptions in the Title
Policy; or
18. COMMENCEMENT OF CONSTRUCTION. Construction of the
Improvements has not commenced within thirty (31) days of the date hereof; or
19. CROSS-DEFAULT OF NOTE. The Mortgage, and the Note it
secures, is and shall continue to be cross-defaulted with that certain Mortgage,
dated November 9, 1994, between Lender and Vacation Break Resorts, Inc., a
Florida corporation, (the "Ramada Mortgage"), as modified, and the Note it
secures. In the event of default under the Ramada Mortgage or the Note it
secures, such default shall also constitute a default under the Mortgage and the
Note it secures; and any default under the Mortgage or the Note it secures shall
constitute a default under the Ramada Mortgage and the Note it secures. In
addition, any default (after the expiration of any applicable grace period) of
any obligations of Vacation Break Resorts, Inc. and any and all of its
affiliates to FINOVA Capital Corporation under that Certain Loan and Security
Agreement dated as of August 16, 1993 as amended by Amendment No. 1 to Loan and
Security Agreement dated December 16, 1993, Amendment No. 2 to Loan and Security
Agreement dated December 7, 1994, a letter agreement dated November 29, 1994,
and Amendment No. 4 to Loan and Security Agreement dated December 7, 1994 and
Amendment No. 5 To, and Assumption Of,
26
Loan and Security Agreement dated March 1, 1996, as the same may be further
amended or modified hereafter shall automatically be a default under the
Mortgage and the Note it secures.
20. FILING OF NOTICE. The filing for record by Borrower
or any Guarantor of a notice limiting the maximum amount which may be secured by
the Mortgage pursuant to Section 697.14(1)(b) of the Florida Statutes (1993).
21. DEATH OF GUARANTOR. The death of an individual
Guarantor.
ARTICLE VII
REMEDIES OF LENDER
Upon the occurrence of any one or more of the circumstances set out as
an Event of Default herein, Lender shall, at its option, be entitled, in
addition to and not in lieu of the remedies provided for in the Note, Mortgage
or other related Loan Documents, to proceed to exercise any of the following
remedies:
1. DEFAULT CONSTITUTES DEFAULT UNDER LOAN DOCUMENTS.
Borrower agrees that the occurrence of such Event of Default shall constitute a
default under each of the Loan Documents, thereby entitling Lender (a) to
exercise any of the various remedies therein provided, including the
acceleration of the indebtedness evidenced by the Note and the foreclosure of
the Mortgage, and (b) cumulatively to exercise all other rights, options and
privileges provided by law or in equity.
2. RIGHT OF LENDER TO ASSUME POSSESSION AND TO COMPLETE
CONSTRUCTION. Borrower agrees, upon Lender's request, to vacate the Premises and
permit Lender:
a. to enter into possession, and
b. to employ security watchmen or otherwise to
protect and secure the Property.
c. to perform or cause to be performed any and
all work and labor necessary to complete the Improvements in accordance with
the Plans and Specifications,
d. to disburse that portion of the Loan
proceeds not previously disbursed (including any retainage) to the extent
necessary to complete construction of the Improvements in accordance with the
Plans and Specifications, and if such completion requires a larger sum than the
remaining undisbursed portion of the Loan, to disburse such additional funds,
all of which funds so disbursed by Lender shall be deemed to have been disbursed
to Borrower and shall be secured by the Mortgage. For this purpose, Borrower
hereby constitutes and appoints Lender its true and lawful attorney-in-fact with
full power of substitution to complete the construction of the Improvements in
Borrower's name and hereby empowers Lender as said attorney-in-fact to take all
actions necessary in connection therewith, including but not limited to the
following: (i) to use any funds of Borrower, including any balance which may be
held in
27
escrow and any funds which may remain unadvanced hereunder, for the purpose of
completing the Improvements in the manner called for by the Plans and
Specifications; (ii) to make such additions and changes and corrections in the
Plans and Specifications which shall be necessary or desirable to complete the
Improvements in substantially the manner contemplated by the Plans and
Specifications; (iii) to employ such contractors, subcontractors, agents,
architects, engineers and inspectors as shall be required for said purposes;
(iv) to pay, settle or compromise all existing or future bills and claims which
are or may be liens against the Property or which may be necessary or desirable
for the completion of the Improvements or the clearance of title to the
Property; (v) to execute all applications and certificates in Borrower's name
which may be required by any construction contract; and (vi) to do any and every
act with respect to the construction of the Improvements which Borrower may do
in its own behalf. It is understood and agreed that this power of attorney shall
be deemed to be a power coupled with an interest which cannot be revoked by
death or otherwise. Said attorney-in-fact shall also have power to prosecute and
defend all actions or proceedings in connection with the construction of the
Improvements and to take such action and require such performance as it deems
necessary. In accordance therewith, Borrower hereby assigns and quitclaims to
Lender all sums to be advanced hereunder, including retainage and any sums in
escrow, conditioned upon the use of said sums, if any, for the completion of the
Improvements.
ARTICLE VIII
MISCELLANEOUS
In the event of a conflict with other provisions of this Loan
Agreement, the provisions of this Article shall control.
1. BINDING TERMS. All of the obligations, covenants, terms and
conditions hereof shall be binding obligations, covenants, terms and conditions
throughout the term of this Loan.
2. BANK ACCOUNTS. Borrower shall open and maintain during the
entire term of this Loan all of its accounts with respect to this project at
SUNTRUST BANK, SOUTH FLORIDA, N.A., a national banking association. Provided,
however, receivable bank accounts shall be maintained as required by receivable
loan agreements.
3. CERTIFICATE RE: APPLICATION OF PROCEEDS AND REMAINING
COSTS. Bills or statements for all expenses for which a disbursement is
requested shall, at Lender's option, be presented to Lender along with both a
certification from Borrower, Architect, and Contractor that all labor and
materials for which funds are requested have gone into the Project according to
the approved Plans and Specifications, and a certification from all of said
parties setting forth the estimated remaining cost of construction to complete
the Project.
4. PAYMENT OF CONSTRUCTION COSTS. Lender shall be under no
duty or obligation to anyone to ascertain whether Borrower has used or will use
the Loan proceeds for the payment of bills incurred by Borrower in connection
with the construction of
28
the Improvements. Payment of all bills for labor and materials in connection
with the construction of the Improvements shall be Borrower's responsibility,
and Lender's sole obligation shall be to advance the proceeds of the Loan
subject to, and in accordance with this Loan Agreement.
5. RECOMMENDATION BY LENDER'S INSPECTOR. At no time shall
Lender be obligated to disburse funds in excess of that recommended by Lender's
Inspector.
6. NOTICES TO ALL PARTIES. All notices, statements, requests
and demands given to or made upon any party hereto in accordance with the
provisions of this Loan Agreement shall be deemed to have been given or made
when hand delivered or when deposited in the Certified Mails of the United
States, Return Receipt Requested, postage prepaid, addressed to such party at
the address or addresses hereinabove stated following the names of the
respective parties, or to a different address in accordance with any unrevoked
written direction from such party to the other parties hereto, except in cases
where it is expressly provided herein that such notice, request or demand shall
not be effective until received by the party to whom it is intended.
7. NO PARTNERSHIP OR JOINT VENTURE. Nothing herein contained
nor the acts of the parties hereto shall be construed to create a partnership or
joint venture between Borrower and Lender, and the parties hereby acknowledge
that no such relationship exists between them.
8. NO ASSIGNMENT BY BORROWER. This Agreement may not be
assigned by Borrower without the prior written consent of Lender. If Lender
approves an assignment hereof by Borrower, Lender shall be entitled to make
advances to such assignee and such advances shall be evidenced by the Note and
secured by the Mortgage and related Loan Documents. Borrower shall remain liable
for payment of all sums advanced hereunder before and after such assignment and
all Guarantors shall remain liable under their respective guaranties.
9. PARTIAL RELEASES. Provided there exists no event of default
under this Loan Agreement, the Note, the Mortgage or any related Loan Document,
at the closings of the sale of vacation ownership weeks, Lender will release
such vacation ownership weeks from the lien of the Mortgage upon payment of the
applicable release price together with a $25.00 release fee per vacation
ownership week ($12.50 for biennial unit weeks). The release prices shall be
determined based upon the outstanding balance of the Loan as of eighteen (18)
months from the date of this Loan Agreement and shall be in such an amount that
would cause Loan repayment in full assuming eighty percent (80%) of the vacation
ownership weeks are sold and released. For example, if the Loan is fully funded
eighteen (18) months from the date of this Loan Agreement, then the vacation
ownership week release price would be $3,721.00. The release price for biennial
vacation ownership weeks will be one-half of the vacation ownership week release
price.
Payments received from the Borrower after 11:00 A.M. eastern
time will be effective on the next business day.
10. PARTICIPATION. As set forth in the Commitment,
Participant, pursuant to a Participation Agreement, is providing forty percent
(40% of the loan funds. All payments received will be applied in proportion to
the respective Loan shares of Lender and Participant.
29
11. PREPAYMENT. Pursuant to the $13,000,000.00 Future Advance
Note, prepayments are permitted only as set forth in this Agreement. As to that
portion of the Loan accruing interest at one percent (1%) above the Prime Rate
("Lender's Share") prepayment shall be permitted at any time, without penalty.
However, except for payments made for the release of vacation ownership weeks as
set forth in Paragraph 9 of this Article VIII, there shall be prepayment
penalties for any prepayments pertaining to that portion of the Loan accruing
interest at two percent (2%) above the Prime Rate ("Participant's Share") of the
Loan as follows:
(a) A prepayment penalty of three percent (3%) of any
such prepayment made during the first year after the Loan closing date.
(b) A prepayment penalty of two percent (2%) of any
such prepayment made during the second year after the Loan closing date.
(c) A prepayment penalty of one percent (1%) of any
such prepayment made during the third year after the Loan closing date.
(d) No prepayment penalty thereafter.
In the event a prepayment is made which is not in the same
proportion as Participant's and Lender's Shares, the Note payments thereafter
shall be adjusted appropriately.
Borrower acknowledges and agrees that in the event that it,
pursuant to the terms of the said Future Advance Note, elects to fix the
interest rate as to that portion of the indebtedness which now bears interest at
2 % above the Prime Rate, then the same pre-payment penalties as set forth above
shall thereafter apply to that portion of the indebtedness converted to a fixed
rate.
12. USURY. It is the intention of the parties to comply with
all applicable usury laws. Accordingly, it is agreed that notwithstanding any
provision to the contrary in the Loan Documents, in no event shall the Loan
Documents require the payment or permit the collection of interest in excess of
the maximum amount permitted by such laws. If any such excess of interest is
contracted for, charged or received under the Loan Documents, or in the event
the maturity of the indebtedness evidenced by such Loan Documents is accelerated
in whole or in part, so that under any such circumstance, the amount of interest
contracted for, charged or received shall exceed the maximum amount of interest
permitted by the applicable usury laws, then in any such event (a) the
provisions of this paragraph shall govern or control, (b) neither Borrower nor
any other person or entity now or hereafter liable for repayment of the Loan
shall be obligated to pay the amount of such interest not permitted by the
applicable usury laws, (c) any such excess which may have been collected shall
be refunded to Borrower and (d) the effective rate of interest for the Note
shall be automatically reduced to the maximum lawful rate allowed under
applicable usury laws.
13. TIME. Time is of the essence of this Loan Agreement.
14. WAIVER. No waiver of any term, provision, condition,
covenant or agreement herein contained shall be effective unless set forth in a
writing signed by Lender, and
30
any such waiver shall be effective only to the extent set forth in such writing.
No failure by Lender to exercise, or no delay by Lender in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof, or the exercise of any right or remedy
provided by law. No notice to or demand on Borrower in any case shall, in
itself, entitle Borrower to any other or further action in any circumstance
without notice or demand.
15. CONFLICT. The provisions of this Loan Agreement shall
control in the event of any conflict among it, the Commitment, the Note, the
Mortgage and any other Loan Document.
16. NO ADDITIONAL FINANCING. The Lender's obligation to fund
this loan is limited to the principal amount set forth herein and the Lender is
not obligated to fund any additional amounts other than as set forth herein. It
is expressly understood that Borrower has sought and agreed to the terms for
repayment set forth herein and it is the burden of the Borrower to provide any
permanent financing, bridge financing, or other financing which may be necessary
to repay this loan on or prior to the maturity date. It is expressly understood
that it is not the responsibility of the Lender to provide to Borrower further
financing of the Project or the repayment of this loan.
ARTICLE IX
GENERAL CONDITIONS
The following conditions shall apply throughout the term of
this Loan Agreement:
1. RIGHTS OF THIRD PARTIES. All conditions of Lender's
obligations hereunder, including the obligation to make advances, are imposed
solely and exclusively for the benefit of Lender, its successors and assigns,
and no other person other than the Borrower, shall have standing to require
satisfaction of such conditions in accordance with their terms or be entitled to
assume that Lender will refuse to make advances in the absence of strict
compliance with any or all thereof, and no other person, other than the
Borrower, under any circumstance, shall be deemed to be a beneficiary of such
conditions, any and all of which Lender freely may waive in whole or in part at
any time if, in its sole discretion, it deems it desirable to do so. In
particular, Lender makes no representation and assumes no obligation as to third
parties concerning the quality of the construction of the Improvements by
Borrower or the absence therefrom of defects. In this connection, Borrower
agrees to and shall indemnify Lender from any liability, claim or loss and
attorneys' fees and costs resulting from the disbursement of the Loan proceeds
or from the condition of the Property, whether related to the quality of
construction or otherwise and whether arising during or after the term of the
Loan. This provision shall survive the repayment of the Loan and shall continue
in full force and effect so long as the possibility of such liability, claim or
loss exists.
2. EVIDENCE OF SATISFACTION OF CONDITIONS. Any condition of
this Loan Agreement which requires the submission of evidence of the existence
or nonexistence of a specified fact or facts, implies as a condition the
existence or nonexistence, as the case may be, of
31
such fact or facts, and Lender shall, at all times, be free to establish
independently and to its satisfaction and in its absolute discretion such
existence or non-existence.
3. WAIVER OF TRIAL BY JURY. Borrower hereby knowingly,
voluntarily and intentionally waives the right it may have to a trial by jury in
respect of any litigation based hereon, or arising out of, under or in
connection with this Loan Agreement and any document contemplated to be executed
in conjunction herewith, or any course of conduct, course of dealing, statements
(whether verbal or written) or actions of either party. This provision is a
material inducement for the Lender to enter into this Loan.
4. ASSIGNMENT. Lender shall have the unconditional right to
assign all or any part of its interest hereunder to any third party, but
Borrower may not assign this Loan Agreement or any of its rights or obligations
hereunder without Lender's prior written consent.
5. SUCCESSORS AND ASSIGNS INCLUDED IN PARTIES. Whenever in
this Loan Agreement one of the parties hereto is named or referred to, the
heirs, legal representatives, successors and permitted assigns of such party
shall be included, and all covenants and agreements contained in this Loan
Agreement by or on behalf of Borrower or by or on behalf of Lender shall bind
and inure to the benefit of their respective heirs, legal representatives,
successors and permitted assigns, whether so expressed or not.
6. HEADINGS. The headings of the sections, paragraphs and
subdivisions of this Loan Agreement are for the convenience of reference only,
are not to be considered a part hereof and shall not limit or otherwise affect
any of the terms hereof.
7. INVALID PROVISIONS TO AFFECT NO OTHERS. If fulfillment of
any provision hereof or any transaction related hereto at the time performance
of such provision shall be due, shall involve transcending the limit of validity
prescribed by law, then ipso FACTO, the obligation to be fulfilled shall be
reduced to the limit of such validity; and if any clause or provision herein
contained operates or would prospectively operate to invalidate this Loan
Agreement in whole or in part, then only such clause or provision shall be held
for naught as though not herein contained, and the remainder of this Loan
Agreement shall remain operative and in full force and effect.
8. NUMBER AND GENDER. Whenever the singular or plural number,
masculine or feminine, or neuter gender is used herein, it shall equally include
the other.
9. AMENDMENTS. Neither this Loan Agreement nor any provision
hereof may be changed, waived, discharged or terminated orally, but only by
written instrument signed by the party against whom enforcement of the change,
waiver, discharge or termination is sought.
10. GOVERNING LAW. This Loan Agreement shall be governed in
its enforcement, construction and interpretation by the laws of the State of
Florida.
11. LITIGATION. In the event any legal proceedings are
instituted between the parties concerning this Loan Agreement, the Note, the
Mortgage, or any other Loan Documents,
32
the Lender shall be entitled to recover its costs of suit, including attorneys'
fees, at both trial and appellate levels.
33
IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement on
the dates specified below.
WITNESSES: BORROWER:
SEA GARDENS BEACH AND TENNIS
______________________ RESORT, INC , a Florida Corporation
______________________ BY:/S/XXXXX X.CAIRO
----------------------------------------
XXXXX X. CAIRO, CHIEF OPERATING
OFFICER/CHIEF FINANCIAL OFFICER
Dated: November 27, 1996
LENDER:
SUNTRUST BANK, SOUTH FLORIDA,
N.A., a national banking association
______________________ By: /S/XXXXXXXX X. XXXXXX
----------------------------------------
XXXXXXXX X. XXXXXX, FIRST VICE PRESIDENT
______________________ Dated: November 27, 1996
34
