Exhibit 10.29
CONSTRUCTION LOAN AGREEMENT
THIS AGREEMENT is made this 2nd day of April, 2001, by and between
REGENERATION TECHNOLOGIES, INC. (the "Borrower"), a Delaware corporation, and
BANK OF AMERICA, N.A. (the "Bank").
Recitals
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The Borrower wishes to obtain a loan (the "Loan") in a maximum principal
amount of $16,000,000 from the Bank in accordance with the terms hereof.
NOW, THEREFORE, for good and valuable consideration, the parties agree as
follows:
ARTICLE I
THE LOAN
1.1 Commitment to Lend. The Borrower agrees to borrow from the Bank, and
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the Bank agrees to advance Loan proceeds to the Borrower, on the terms and
conditions set forth in this Agreement (including, without limitation, the terms
and conditions set forth in the Exhibits attached hereto). The Bank's commitment
to lend shall expire and terminate: (a) automatically on the Advance Termination
Date; (b) automatically if the Loan is prepaid in full; and (c) automatically
upon the occurrence of a Default. The Loan is not a revolving loan, and amounts
repaid thereunder may not be reborrowed.
1.2 Purpose. Borrower shall use all proceeds of the Loan to pay (a) the
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cost of the construction of the Improvements on the Land; and (b) other fees,
costs and expenses relating to the Property if and to the extent that such costs
are specifically provided for in the Loan Allocation column in the Budget.
1.3 General Information and Exhibits. This Agreement includes the following
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exhibits (the "Exhibits"): (a) Exhibit "A" (Legal Description of the Land); (b)
Exhibit "B" (Basic Information); (c) Exhibit "C" (Certain Conditions Precedent
to First Advance); (d) Exhibit "D" (Budget); (e) Exhibit "E" (Advances); (f)
Exhibit "F" (Leasing and Tenant Matters); (g) Exhibit "G'" (Plans and
Specifications) and (h) Exhibit "H" (Survey Requirements). The Exhibits contain
other terns, provisions and conditions applicable to the Loan, and the Exhibits
are incorporated in this Agreement by reference. Capitalized terms used in this
Agreement shall have the meanings assigned to them in the Basic Information (the
"Basic Information") set forth in Exhibit "B". This Agreement and the other Loan
Documents, which must be in form, detail and substance satisfactory to the Bank,
evidence the agreements of the Borrower and the Bank with respect to the Loan.
The Borrower shall. comply with ah of the Loan Documents.
1.4 Budget. The Borrower has provided the Bank with the budget (the
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"Budget") attached hereto as Exhibit "D" that itemizes anticipated costs in
connection with the construction of the Improvements. Loan funds are allocated
to payment of the costs of the Project shown in the "Loan Allocation" column of
the Budget. The Borrower shall not amend
the Budget, or otherwise reallocate Loan funds from one Budget line item to
another, without the prior written approval of the Bank (except, however, that
the Borrower shall be entitled to transfer any Excess Funds allocated to any
category to the contingency line item if the work in such category has been
completed and paid in full). For purposes hereof, "Excess Funds" shall mean the
excess of the amount allocated to a category in the Budget over the actual costs
incurred by the Borrower in connection with such category (determined after the
work in such category has been completed and paid in full). The Budget has been
prepared by the Borrower, and the Borrower represents to the Bank that the
Budget includes all costs incident to the Loan and the Project, to the extent
that such costs are reasonably known to the Borrower as of the date hereof,
through the maturity date of the Loan (collectively, the "Aggregate Cost") after
taking into account the requirements of this Agreement, including "hard" and
"soft" costs, fees and expenses. The Bank shall not be required to make (a) any
advance for any cost not set forth in the Budget, (b) any advance from any line
item in the Budget that, when added to all prior advances from that line item,
would exceed the lesser of (i) the actual cost incurred by the Borrower for such
line item, or (ii) the sum shown in the "Loan Allocation" column in the Budget
for such line item, (c) any advance from any contingency line item unless the
Bank consents to such advance in its sole discretion, or (d) any advance to pay
interest on the Loan after commencement of operations in the Improvements if and
to the extent that, subject to the provisions of Exhibit "F", there is
sufficient net operating income from the Property to pay such interest. The Bank
may make advances from any line item in the Budget for purposes other than those
for which amounts are initially allocated to such line item, or may change the
relative amounts allocated to particular line items in the Budget, all as the
Bank in its sole discretion deems necessary or advisable. However, if the Bank
is requested by the Borrower to make reallocation of a hard cost item which
would require contractor and lienor notices under Chapter 713, Florida Statutes,
written notice from the owner to the applicable contractor and all required
lienors, in compliance with Chapter 713, Florida Statues, and countersigned by
the applicable contractor and any lienors who have provided notices to owner,
shall be given prior to any such reallocation. Without prior written approval of
the Bank, the Borrower shall not reallocate Loan funds from one Budget line item
to another or otherwise amend the Budget.
1.5 Borrower's Deposit. If at any time the Bank reasonably determines that
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the sum of: (i) any unadvanced portion of the Loan to which the Borrower is
entitled, plus (ii) the portions of the Aggregate Cost that are to be paid by
the Borrower from other funds that, to the Bank's satisfaction, are available,
set aside and committed, is or will be insufficient to pay the actual unpaid
Aggregate Cost, the Borrower shall, within seven (7) days after written notice
from the Bank, deposit with the Bank the amount of the deficiency (the
"Borrower's Deposit") in an interest-bearing account of the Bank's selection
(with interest earned thereon to be part of the Borrower's Deposit). Such
Borrower's Deposit is hereby pledged to the Bank as additional security for the
Loan, and the Borrower hereby grants and conveys to the Bank a security interest
in all funds so deposited with the Bank as additional security for the Loan. The
Bank may advance all or a portion of the Borrower's Deposit prior to the Loan
proceeds. The Bank may (but shall have no obligation to) apply all or any part
of the Borrower's Deposit against the unpaid Indebtedness in such order as the
Bank determines.
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1.6 Facility Fee. The Borrower shall pay to the Bank a non-refundable
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facility fee of $80,000.00 on the date hereof for establishing the credit
arrangements hereunder.
ARTICLE 2
CONSTRUCTION COVENANTS AND AGREEMENTS
2.1 Construction of the Improvements. The Borrower shall commence
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construction of the Improvements on or before the Construction Commencement Date
(except to the extent delayed by Excusable Delays), and shall prosecute the
construction of the Improvements with diligence and continuity, in a good and
workmanlike manner, and in accordance with sound building and engineering
practices, all applicable laws and governmental requirements, the Plans and the
Loan Documents. The Borrower shall not permit cessation of work except for
Excusable Delays. The Borrower shall complete construction of the Improvements
free and clear of all liens (except liens created by the Loan Documents ), and
shall obtain a certificate of occupancy and all other permits, licenses and
approvals from all applicable governmental authorities required for the
occupancy, use and operation of the Improvements, in each case satisfactory to
the Bank, on or before the Completion Date. The Borrower shall promptly correct
(a) any material defect in the Improvements, (b) any material deviation from the
Plans, law or governmental requirements, or (c) any encroachment by any
Improvements or structure on any building setback line, easement, property line
or restricted area.
2.2 Plans and Changes. No construction shall be undertaken on the Land
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except as shown in the Plans. The Borrower assumes full responsibility for the
compliance of the Plans and the Property with all laws, governmental
requirements and sound building and engineering practices. No plans or
specifications, or any changes thereto, shall be included as part of the Plans
until approved by the Bank, the Construction Consultant, all applicable
governmental authorities, and all other parties required under the Loan
Documents. Without the Banks prior written consent, the Borrower shall not
change or modify the Plans, agree to any change order, or allow any extras to
any contractor or any subcontractor, except that the Borrower may make Permitted
Changes if: (a) the Borrower notifies the Bank in writing of the change or extra
with appropriate supporting documentation and information; (b) the Borrower
obtains the approval of the applicable contractor, the Borrower's architect and
all sureties; (c) the structural integrity, quality and standard of workmanship
of the Improvements is not impaired by such change or extra; (d) no substantial
change in architectural appearance is effected by such change or extra; (e) no
default in any obligation to any person or violation of any law or governmental
requirement would result from such change or extra; (f) the Borrower complies
with Section 1.5 of this Agreement to cover any excess cost resulting from the
change or extra; (g) completion of the Improvements by the Completion Date will
not be affected; and (h) all requirements of Chapter 713, Florida Statutes, have
been fully satisfied. The Bank shall not be obligated to review a proposed
change unless it has received all documents necessary to review such change,
including the change order, cost estimates, plans and specifications, and
evidence that all required approvals (other than the approval of the Bank) have
been obtained. The Bank shall notify the Borrower of its approval or disapproval
of any such change not later that ten Business Days after the Bank has received
all such materials.
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2.3 Contracts. Without the Bank's prior written approval as to parties,
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terms, and all other matters, the Borrower shall not (a) enter into any material
contract (hereinafter defined) on or after the date hereof for the performance
of any work or the supplying of any labor, materials or services for the design
or construction of the Improvements, or (b) modify, amend, or terminate any such
contracts. All such contracts shall provide that all rights and liens of the
applicable contractor, architect, engineer, supplier, surveyor or other party
and any right to remove removable Improvements are subordinate to the Bank's
rights and liens, shall require all subcontracts and purchase orders to contain
a provision subordinating the subcontractors' and mechanics' and materialmen's
liens and any right to remove removable Improvements to the Bank's rights and
liens, and shall provide that no change order shall be effective without the
prior written consent of the Bank, except for change orders which implement
Permitted Changes. The Borrower shall not default under any contract, the
Borrower shall not permit any contract to terminate by reason of any failure of
the Borrower to perform thereunder, and the Borrower shall promptly notify the
Bank of any default thereunder. The Borrower will deliver to the Bank, upon
request of the Bank, the names and addresses of all persons or entities with
whom each contractor has contracted or intends to contract for the construction
of the Improvements or for the furnishing of labor or materials therefor. With
respect to contracts for the performance of any work or the supplying of any
labor, materials or services, a "material" contract is one which exceeds
$250,000 in total price. The general construction contract for the Project shall
provide for a 10% retainage.
2.4 Assignment of Contracts and Plans. As additional security for the
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Obligations, the Borrower hereby transfers and assigns to the Bank all of the
Borrower's right, title and interest, but not its liability, in, under, and to
all construction, management, architectural and design contracts relating to the
Project or the Property, and the Plans, and agrees that all of the same are
covered by the security agreement provisions of the Mortgage. The Borrower
agrees to deliver to the Bank from time to time upon the Bank's request such
consents to the foregoing assignment from parties contracting with the Borrower
as the Bank may require. Neither this assignment nor any action by the Bank
shall constitute an assumption by the Bank of any obligation under any contract
or with respect to the Plans, the Borrower hereby agrees to perform all of its
obligations under any contract, and the Borrower shall continue to be liable for
all obligations of the Borrower with respect thereto. The Bank shall have the
right at any time (but shall have no obligation) to take in its name or in the
name of the Borrower such action as the Bank may determine to be necessary to
cure any default under any contract or with respect to the Plans or to protect
the rights of the Borrower or the Bank with respect thereto. The Borrower
irrevocably constitutes and appoints the Bank as the Borrower's attorney-in-
fact, which power of attorney is coupled with an interest and irrevocable, to
enforce in the Borrower's name or in the Bank's name all rights of the Borrower
under any contract or with respect to the Plans. The Bank shall incur no
liability if any action so taken by it or on its behalf shall prove to be
inadequate or invalid. The Borrower indemnifies and holds the Bank harmless
against and from any loss, cost, liability or expense (including, but not
limited to, consultants' fees and expenses and attorneys' fees and expenses)
incurred in connection with the Borrower's failure to perform such contracts or
any action taken by the Bank. The Bank may use the Plans for any purpose
relating to the improvements. The Borrower represents and warrants to the that
the copy of any contract furnished or to be furnished to the Bank is and shall
be a true and complete copy thereof, that the
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copies of the Plans delivered to the Bank are and shall be true and complete
copies of the Plans, that there have been no modifications thereof which are not
fully set forth in the copies delivered, and that the Borrower's interest
therein is not subject to any claim, setoff, or encumbrance.
2.5 Storage of Materials. The Borrower shall cause all materials supplied
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for, or intended to be utilized in the construction of the Improvements, but not
yet affixed to or incorporated into the Improvements or the Land, to be stored
on the Land with adequate safeguards to prevent loss, theft, damage or
commingling with materials for other projects. The Borrower shall take all such
action as the Bank may require to assure that: (a) such materials are covered by
insurance satisfactory to the Bank; and (b) the Banks holds a first priority
security interest, subject to no other liens, encumbrances or claims, in all
such materials.
2.6 Construction Consultant. The Bank may retain the services of a
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Construction Consultant, whose duties may include, among others, reviewing the
Plans and any proposed changes to the Plans, performing construction cost
analyses, observing work in place and reviewing Draw Requests. The duties of the
Construction Consultant shall run solely to the Bank, and the Construction
Consultant shall have no obligations or responsibilities whatsoever to the
Borrower, the Borrower's architect, engineer, contractor or any of their agents
or employees. Unless prohibited by applicable law, all fees, costs, and expenses
of the Construction Consultant shall be paid by the Borrower. The Borrower shall
cooperate with the Construction Consultant and will furnish to the Construction
Consultant such information and other material as the Construction Consultant
considers necessary or useful in performing its duties.
2.7 Inspection. The Bank and its agents, including the Construction
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Consultant, may enter upon the Property to inspect the Property, the Project and
any materials at any reasonable time, unless the Bank deems such inspection is
of an emergency nature, in which event the Borrower shall provide the Bank with
immediate access to the Property. The Borrower will furnish to the Bank and its
agents, including the Construction Consultant, for inspection and copying, all
Plans, shop drawings, specifications, books and records, and other documents and
information that the Bank may request from time to time.
2.8 Notice to the Bank. The Borrower shall notify the Bank in writing of
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the occurrence of any of the following events no later than five days after the
occurrence thereof (which notice shall specify in each case the action that the
Borrower has taken or will take with respect thereto): (a) any violation of any
law or governmental requirement; (b) any litigation, arbitration or governmental
investigation or proceeding instituted or threatened against the Borrower or any
Guarantor or the Property, and any material development with respect thereto
(but, in the case of threatened investigations or proceedings, only to the
extent that the Borrower has actual knowledge thereof); (c) any actual or
threatened condemnation of any portion of the Property, any negotiations with
respect to any such taking, or any loss of or substantial damage to the Property
(but, in the case of any threatened condemnation, only to the extent that the
Borrower has actual knowledge thereof); (d) any labor controversy pending or
threatened against the Borrower or any contractor, and any material development
in any labor controversy (but, in the case of threatened controversy, only to
the extent that the Borrower has actual knowledge thereof); (e) any notice
received by the Borrower with respect to the cancellation, alteration or
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non-renewal of any insurance coverage maintained with respect to the Property;
(f) any failure by the Borrower or any contractor, subcontractor or supplier to
perform any material obligation under any construction contract, any event or
condition that would permit termination of a construction contract or suspension
of work thereunder, or any notice given by the Borrower or any contractor with
respect to any of the foregoing; (g) any lien filed against the Property or any
stop notice served on the Borrower in connection with construction of the
Improvements; or (h) any required permit, license, certificate or approval with
respect to the Property lapses or ceases to be in full force and effect.
2.9 Other Information. The Borrower shall furnish to the Bank from time to
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time upon the Bank's request: (a) copies of all subcontracts entered into by
contractors or subcontractors and the names and addresses of all persons or
entities with whom the Borrower or any contractor has contracted or intends to
contract for the construction of the Improvements or the furnishing of labor or
materials in connection therewith; (b) copies of all contracts, bills of sale,
statements, receipts or other documents under which the Borrower claims title to
any materials, fixtures or articles of personal property incorporated or to be
incorporated into the Improvements or subject to the lien of the Mortgage; (c) a
list of all unpaid bills for labor and materials with respect to construction of
the Improvements and copies of all invoices therefor; (d) budgets of the
Borrower and revisions thereof showing the estimated costs and expenses to be
incurred in connection with the completion of construction of the Improvements;
(e) current or undated detailed Project schedules or construction schedules; and
(f) such other information relating to the Borrower, any Guarantor, the
Improvements, the Property, or any indemnitor or other person or party connected
with the Borrower, the Loan, the construction of the Improvements or any
security for the Loan.
2.10 Advertising by the Bank. At the Bank's request and at the Bank's
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expense, the Borrower shall erect and maintain on the Property one or more
advertising signs approved by the Bank indicating that the construction
financing for the Property has been provided by the Bank (subject, however, to
compliance with all laws governing the legality of such signs).
2.11 Appraisal. The Bank may obtain from time to time an appraisal of all
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or any part of the Property prepared in accordance with written instructions
from the Bank by a third-party appraiser engaged directly by the Bank. Each such
appraiser and appraisal shall be satisfactory to the Bank, and each such
appraisal shall satisfy all applicable regulatory requirements for appraisals
obtained by or for national banks. The cost of the first appraisal obtained
after the date hereof shall be borne by the Borrower. The cost of all other
appraisals shall be borne by the Bank.
2.12 Payment of Withholding Taxes. Ihe Borrower shall not use, or knowingly
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permit any contractor or subcontractor to use, any portion of the proceeds of
any Loan advance to pay the wages of employees unless a portion of the proceeds
or other funds are also used to make timely payment to or deposit with: (a) the
United States of all amounts of tax required to be deducted and withheld with
respect to such wages under the Internal Revenue Code; and (b) any state or
local governmental authority or agency having jurisdiction of all amounts of tax
required to be deducted and withheld with respect to such wages under any
applicable state or local laws.
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2.13 Advances. The Borrower shall not be entitled to obtain advances under
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the Loan except in accordance with the terms and conditions set forth herein and
in the exhibits attached hereto (including, without limitation, Exhibits "C" and
"E" attached hereto).
2.14 Construction Representations. To induce the Bank to make the Loan, the
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Borrower hereby represents and warrants to the Bank that except as otherwise
disclosed to the Bank in writing on or before the date hereof: (a) the Borrower
has complied with any and all laws and regulations concerning its organization,
existence and the transaction of its business, and has the right and power to
own the Property and to develop the Improvements as contemplated in this
Agreement and the other Loan Documents; (b) no provision of the Loan Documents
violates any applicable law, any covenants or restrictions affecting the
Property, any order of any court or governmental authority or any contract or
agreement binding on the Borrower or the Property; (c) the Plans are complete in
all material respects, contain all necessary detail and are adequate for
construction of the Improvements, are satisfactory to the Borrower, have been
approved by all applicable governmental authorities, have been accepted by each
contractor, and comply with the Loan Documents and all applicable laws,
restrictive covenants, and governmental requirements, rules, and regulations;
(d) the Land and Improvements comply with all laws and governmental
requirements, including all subdivision and platting requirements, without
reliance on any adjoining or neighboring property; (e) the Plans do, and the
Improvements when constructed will, comply with all legal requirements regarding
access and facilities for handicapped or disabled persons; (f) the Borrower has
not directly or indirectly conveyed, assigned or otherwise disposed of or
transferred (or agreed to do so) any development rights, air rights or other
similar rights, privileges or attributes with respect to the Property, including
those arising under any zoning or land use ordinance or other law or
governmental requirement; (g) the construction schedule for the Project is
realistic and the Completion Date is a reasonable estimate of the time required
to complete the Project; (h) all utility services necessary for the development
of the Land and the construction of the Improvements and the operation thereof
for their intended purpose are available at the boundaries of the Land,
including electric and natural gas facilities, telephone service, water supply,
storm and sanitary sewer facilities; (i) except as otherwise provided for in the
Loan Documents, the Borrower has made no contract or arrangement of any kind
the performance of which by the other party thereto would give rise to a lien on
the Property; and the current and anticipated use of the Property complies with
all applicable zoning ordinances, regulations and restrictive covenants
affecting the Land without the existence of any variance, non-complying use,
nonconforming use or other special exception, all use restrictions of any
governmental authority having jurisdiction have been satisfied, and no violation
of any law or regulation exists with respect thereto.
ARTICLE 3
AFFIRMATIVE COVENANTS
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3.1 Financial Statements. The Borrower will deliver to the Bank the
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following:
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(a) Within forty five days after the end of each quarter of the
Borrower's fiscal year, the Borrower's financial statements as of the end
of and for such period in reasonable detail, setting forth in consolidated
and comparative form the corresponding figures for that date and period and
for the corresponding date and accounting period in the preceding fiscal
year, certified by the Borrower's chief financial officer.
(b) Within one hundred twenty days after the end of each fiscal year
of the Borrower, the Borrower's financial statements as of the end of and
for such year of the Borrower in reasonable detail, setting forth in
consolidated and comparative form the corresponding figures for that date
and period and for the corresponding date and period in the preceding
fiscal year, audited and certified by independent certified public
accountants of recognized standing selected by the Borrower and acceptable
to the Bank, whose certificate shall be satisfactory to the Bank in scope
and substance.
(c) Promptly upon receipt thereof, copies of all other detailed
reports (if any) (including, without limitation, any management letters)
submitted to the Borrower by independent certified public accountants in
connection with each annual or interim audit or review of the books of the
Borrower by such accountants.
(d) With each delivery required under subparagraphs (a) and (b) above,
a compliance certificate in form approved by the Bank executed by an
executive officer of the Borrower demonstrating compliance with the Loan
Documents.
(e) Promptly upon the occurrence of any Default, a notice thereof,
specifying the nature thereof; sued promptly upon the occurrence of any
event or discovery of any fact which might affect or indicate a material
adverse change in the Borrower's financial condition, notice thereof
specifying the nature thereof.
(f) Promptly upon becoming available, upon request of the Bank, a copy
of all: (i) reports, registration statements and other materials filed by
the Borrower with the Securities and Exchange Commission; (ii) offering
circulars made in connection with any distribution or sale of the
Borrower's securities; and (iii) notices, proxy statements and other
materials mailed or distributed to the Borrower's shareholders.
(g) Such other material information as the Bank may from time to time
reasonably request.
3.2 Financial Information. All financial information submitted by the
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Borrower hereunder shall be prepared in accordance with generally accepted
accounting principles ("GAAP") as in effect on the date of this Agreement on a
basis consistently applied. The Borrower and its Subsidiaries will maintain
books of account in accordance with GAAP. The books of account shall disclose
the information necessary for determining whether the Borrower has satisfied any
provisions or requirements of this Agreement.
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3.3 Taxes and Other Charges. The Borrower and its Subsidiaries will pay and
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discharge or cause to be paid and discharged all taxes, charges, liabilities or
claims of any type at any time assessed against or incurred by the Borrower or
any of its Subsidiaries, or which could become a lien against the Borrower and
its Subsidiaries or any of their respective properties. Nothing in this
subsection shall require the payment of any such sum if the Borrower promptly
notifies the Bank and by appropriate proceedings contests the same in good faith
and so long as the Borrower, if so requested by the Bank, creates a funded
reserve equal to the amount so claimed or assessed,
3.4 Maintenance of Existence. Each of the Borrower and its Subsidiaries
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will do or cause to be done all things necessary to preserve and keep in full
force and effect its existence, franchises, rights and privileges as a
corporation under the Paws of its state of organization and any other
jurisdiction where, in the opinion of the Borrower's counsel, the Borrower or
any such Subsidiary should be qualified to do business. Each of the Borrower and
its Subsidiaries will do or cause to be done all things necessary to preserve
and keep in full force and effect its right to own property and to operate all
aspects of its business in a manner not less favorable to it than those now in
existence.
3.5 Officers. The Borrower will use its reasonable efforts to cause its
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current chief executive officer and chief operating officer to remain engaged in
the active management of the Borrower and to perform duties substantially
similar to those presently performed by such officers. In the event of the
retirement, termination or death of any of such person, such person shall be
replaced by a person having similar business experience and expertise.
3.6 Notice of Litigation. Promptly after the commencement thereof, the
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Borrower shall furnish the Bank notice of all material actions, suits and
proceedings before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, affecting the Borrower
or any of its Subsidiaries
3.7 Notice of ERISA Requirements. As soon as possible and in any event
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within thirty (36) days after the Borrower knows or has reason to know that any
reportable event, accumulated funding deficiency, prohibited transaction,
disqualification or termination (as such terms are defined in the Employee
Retirement Income Security Act of 1974, as amended) with respect to any Plan has
occurred, the Borrower shall furnish the Bank with the statement of the chief
financial officer of the Borrower setting forth details as to such event and the
action which the Borrower proposes to take with respect thereto, together with a
copy of the notice of such event to the Pension Benefit Guaranty Corporation.
For purposes of this Agreement, "Plan" shall mean any employee benefit plan
maintained in whole or in part for employees of the Borrower or any of its
Subsidiaries which is subject to the provisions of Title IV of the Employee
Retirement Income Security Act of 1974, as amended from time to time, or subject
to the minimum funding standards under Section 412 of the Internal Revenue Code
of 1986, as amended from time to time.
3.8 Other Events. The Borrower shall promptly notify the Bank of any
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default under or violation of any agreement, law or regulation to which the
Borrower or any of its Subsidiaries
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is a party or by which it is bound. Each of the Borrower and its Subsidiaries
shall promptly perform all of its obligations under any agreements to which it
is a party and shall use its best efforts to ensure compliance by other parties
with such agreements.
3.9 Compliance with Laws. Each of the Borrower and its Subsidiaries shall
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comply at all times with all statutes, regulations, orders and judgments to
which it is subject.
3.10 Access. The Bank (by any of its offers, employees or agents) shall
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have the right, exercisable as frequently as the Bank reasonably determines to
be appropriate, to inspect, audit and make extracts from all of the records,
files and books of account of the Borrower and each of its Subsidiaries. All
costs, fees and expenses incurred by the Bank, or for which the Bank has become
obligated, in connection with any such inspection, audit and verification shall
be payable by the Bank. Each of the Borrower and its Subsidiaries shall instruct
its banking and other financial institutions to make available to the Bank such
information and records as the Bank may reasonably request.
3.11 Deposits. Each of the Borrower and its Subsidiaries shall maintain its
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primary deposit accounts with the Bank.
3.12 Further Assurances. If at any time counsel for the Bank is of the
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reasonable opinion that any portion of the Indebtedness is not secured or will
or may not be secured by a first priority lien on the property described in the
Mortgage, or as contemplated herein, subject only to exceptions described in the
Mortgage, as the case may be, then the Borrower shall, after written notice of
such opinion from the Bank, do all things and matters necessary to assure to the
reasonable satisfaction of counsel for the Bank that any part of the
Indebtedness then existing or thereafter to be created is secured or will be
secured as contemplated by this Agreement.
ARTICLE 4
NEGATIVE COVENANTS
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4.1 Liens. Neither the Borrower nor any Subsidiary will create, incur,
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assume or suffer to exist any mortgage, pledge, lien, charge or other
encumbrance of any nature whatsoever on any of the assets of the Borrower or any
Subsidiary now or hereafter owned, or enter into or suffer to exist any
conditional sales contracts or other title retention agreements except for
Permitted Liens. For purposes hereof, Permitted Liens shall mean:
(a) liens in favor of the Bank;
(b) the lien of ad valorem and other taxes and assessments not yet due
and payable;
(c) Liens on equipment and other assets to secure indebtedness
permitted hereunder to finance the acquisition thereof
10
(d) liens arising out of pledges, deposits, or other amounts owed under
worker's compensation laws, unemployment insurance, old age pensions or other
social security or retirement benefits, or similar legislation, or to secure
payment of premiums for insurance purchased in the usual course of operations or
in connection with self-insurance or to secure the performance of bids, tenders
or trade contracts incurred in the ordinary course of operations and not in
connection with the borrowing of money;
(e) deposits for indemnity bonds and other bonds required in the
ordinary course of the Borrower's or any Subsidiary's business, and not in
connection with borrowed money;
(f) inchoate materialmen's, suppliers', operators', mechanics',
workmens' repairmen's, employees', carriers', warehousemen's or attorneys' liens
or other like statutory liens arising in the ordinary course of business and
securing obligations (i) which are not delinquent or (ii) the amounts or
validity of which are being contested in good faith as to which the Borrower or
any Subsidiary has established appropriate funded reserves to the extent
required by GASP;
(g) deposits made by the Borrower or any Subsidiary in the ordinary
course of business;
(h) liens of financial institutions arising in the ordinary process of
collection of instruments; and
(i) statutory Landlord's liens so long as amounts secured thereby are
not past due by more than 30 days.
4.2 Obligations.
-----------
(a) Neither the Borrower nor any Subsidiary is or will become directly
or indirectly obligated in any way for any obligation for borrowed money or
capital leases except for Permitted Obligations. For purposes hereof, Permitted
obligations shall mean:
(i) any and all obligations now or hereafter owed by the Borrower
or any Subsidiary to the Bank;
(ii) customer deposits in the ordinary course of business;
(iii) obligations subordinated to the Indebtedness pursuant to
subordination agreements acceptable to the Bank; and
(iv) other obligations in an aggregate principal amount, on a
combined basis as to all such other obligations, not exceeding $250,000.
11
(b) Notwithstanding any contrary provision herein, the Borrower
and such Subsidiaries shall be entitled to incur and maintain capital
leases and purchase money indebtedness, in addition to existing amounts
permitted under the foregoing subparagraph (a), to finance the Borrower's
or any Subsidiary's acquisition or lease of equipment or other assets so
long as the aggregate principal amount of such purchase money obligations
and capital lease obligations, on a combined basis, incurred during each
fiscal year will not exceed $250,000.
(c) Neither the Borrower nor any Subsidiary shall: (i) guarantee
or purchase any obligations of any other person or entity; (ii) enter into
any credit support, financial maintenance, credit enhancement or similar
arrangement in favor of any person or entity; or (iii) enter into any
other transaction which is intended to assure performance of the
obligations of any other person or entity.
4.3 Merger; Consolidation; Sale of Substantial Assets. Neither the
-------------------------------------------------
Borrower nor any Subsidiary will merge into or with, consolidate with, acquire
control of, or sell all or a substantial part of its assets to, any other person
or entity.
4.4 Loans and Investments.
---------------------
(a) Neither the Borrower nor any Subsidiary shall purchase any
stock, securities or evidence of indebtedness, or make or permit to exist
any loans or advances to, or make any investment or acquire any interest
in, any other Person (except, however, that the Borrower and its
Subsidiaries shall be entitled to make acquisitions in accordance with the
terms of subparagraph (b) below). Neither the Borrower nor any Subsidiary
shall, without the Bank's prior written consent, enter into partnership or
joint venture agreements with any other Person (except, however, that the
Borrower and its Subsidiaries shall be entitled to enter into such
agreements so long as the aggregate investment of the Borrower and its
Subsidiaries in such partnerships and joint ventures, on a combined basis,
does not exceed $250,000). Notwithstanding the foregoing: (i) the Borrower
and its Subsidiaries may sell inventory on credit in the ordinary course
of business; (ii) the Borrower and its Subsidiaries may extend credit and
make advances (including, without limitation, advances to officers) in the
ordinary course of business so long as the total outstanding amount of
such credit and advances, on a combined basis under this subparagraph
(ii), does not exceed $10,000 at any time; and (iii) the Borrower and its
Subsidiaries may invest in Eligible Securities. For purposes hereof,
"Eligible Securities" shall mean: (i) direct obligations of the United
States of America or any agency or instrumentality thereof whose
obligations constitute the full faith and credit of the United States of
America so long as all such obligations mature within one year of the date
of issuance thereof (ii) commercial paper rated P-1 or better by Moody's
and maturing within one year of the date of issuance thereof; (iii)
certificates of deposit issued by any United States commercial bank having
capital and surplus of not less than $100,000,000; (iv) repurchase
obligations with a term of not more than seven days for underlying
securities of the types described in the foregoing clause (i) entered into
with a United States commercial bank having capital and surplus of not
less than $100,000,000;
12
and (v) other investments contemplated in the Borrower's investment policy
approved from time to time by the Borrower's board of directors. .
(b) The Borrower and its Subsidiaries shall be entitled to acquire
businesses through stock acquisitions, asset purchases or mergers upon
satisfaction of the following conditions:
(i) Each such acquisition shall be made on arms' length
terms. The Borrower and its Subsidiaries shall, after consummation
of the acquisition, own and control not less than 100% of the
outstanding equity and voting rights in any Person acquired by the
Borrower or any such Subsidiary in connection with the acquisition.
(ii) The Person acquired, or the business acquired, must be
in the same or a related line of business as the Borrower.
(iii) The aggregate acquisition consideration payable by the
Borrower and its Subsidiaries for any acquisition shall not exceed
40% of the Borrower's consolidated Tangible Net Worth (as defined
below) (before giving effect to the acquisition) (except, however,
that the Borrower and its Subsidiaries shall be entitled to make
acquisitions for acquisition consideration in excess of such amount
with the Bank's prior written consent). The acquisition
consideration payable in connection with any such acquisition shall
mean the sum of the following items (without duplication): (aa) all
cash paid by the Borrower and its Subsidiaries in connection with
the acquisition; (bb) the fair market value of all property
transferred (including, without limitation, the fair market value of
all securities issued) by the Borrower and its Subsidiaries in
connection with the acquisition; (cc) the principal amount of all
indebtedness and other amounts payable by the Borrower and its
Subsidiaries to the sellers or other Persons in connection with the
acquisition; (dd) the principal mount of all obligations assumed by
the Borrower and its Subsidiaries in connection with any asset
acquisition; (ee) all amounts paid or payable under or with respect
to covenants not to compete or deferred compensation agreements in
connection with the acquisition; and (ff) all amounts paid or
payable under or with respect to master brokerage agreements and
similar agreements in connection with the acquisition.
(iv) The Borrower shall have given the Bank not less than
fourteen days prior notice of each acquisition. The notice shall
include: (aa) the name of the Person or business to be acquired (or,
as applicable, the name of any Person selling assets to the Borrower
or any Subsidiary); (bb) financial statements for such company or
business as of and for the end of its two most recent fiscal years
and, if available, as of and for the end of its most recent fiscal
quarter; and (cc) any projections provided to the Borrower or used
by the Borrower for the Person or business to be acquired in
connection with the acquisition. The Borrower shall
13
thereafter provide the Bank such additional information concerning the
acquisition as the Bank may reasonably request.
(v) The Borrower shall have prior to the consummation of
the acquisition provided the Bank with a certificate executed by the
Borrower's chief financial officer or other senior financial officer
demonstrating that the acquisition will not result in a default under the
financial and other covenants hereunder: (aa) at the time such acquisition
is consummated after giving effect to such acquisition; and (bb) on a
projected basis based upon reasonable projections after giving effect to
such acquisition
(vi) The acquisition will not result in a Default hereunder
under Section 4.8. In addition, the acquisition will not result in a
default under the financial and other covenants hereunder: (aa) at the
time such acquisition is consummated after giving effect to such
acquisition; and (bb) on a projected basis based upon reasonable
projections after giving effect to such acquisition.
(vii) The Borrower shall have taken, simultaneously with the
consummation of the acquisition, all such action as may be required to
cause each Subsidiary directly or indirectly acquired in connection
therewith, or resulting therefrom, to guaranty all obligations of the
Borrower under the Loan Documents pursuant to a guaranty acceptable to the
Bank.
(viii) For purposes hereof, "Tangible Net Worth" shall mean,
at any time the same is to be determined, the total shareholders' equity
(including capital stock, additional paid-in capital and retained earnings
after deducting treasury stock) that would appear on the balance sheet of
the Borrower determined on a consolidated basis in accordance with
generally accepted accounting principles ("GAAP") less (aa) the aggregate
book value of all assets that would be classified as intangible assets
under GAAP, including, without limitation, goodwill, patents, trademarks,
trade names, copyrights, franchises and deferred charges (including,
without limitation, unamortized debt discount and expense, organization
costs and deferred research and development expense) and similar assets;
(bb) the write-up of assets above cost; (cc) any amounts owed to the
Borrower or any Subsidiary by officers, directors, employees,
stockholders, or other affiliates of such entity (except as otherwise
approved from time to time by the Bank); and (dd) the book value of all
assets of the Borrower or any Subsidiary located outside of the United
States of America.
(c) The Borrower shall not form or create any new Subsidiary on or
after the date hereof except for the sole purpose of consummating acquisitions
in accordance with the terms of subparagraph (b) above. Notwithstanding the
foregoing, for so long as no Default has occurred hereunder, the Borrower shall
be entitled to form or create new Subsidiaries so long as each such Subsidiary
guarantees, all of the Borrower's obligations under the Loan Documents pursuant
to a guaranty satisfactory to the Bank.
14
4.5 Sale or Pledge of Property. Neither the Borrower nor any Subsidiary
--------------------------
will sell, lease or otherwise dispose of or transfer any of its interests in any
of its assets except in the ordinary course of business.
4.6 Sale and Leaseback. Neither the Borrower nor any Subsidiary will
------------------
enter into any arrangement with my person or entity (other than an Affiliate of
the Borrower) providing for the leasing by the Borrower or any Subsidiary of
property which has been sold or is to be sold or transferred by the Borrower or
any Subsidiary to such person or entity.
4.7 Pension Plan Funding Deficiency. Neither the Borrower nor any
-------------------------------
Subsidiary shall incur or suffer to exist any material accumulated funding
deficiency within the meaning of the Employee Retirement Income Security Act of
1974 or incur any material liability to the Pension Benefit Guaranty Corporation
(or any successor) established thereunder in connection with any Plan.
4.8 Financial Covenants. The Borrower shall comply at all times with the
-------------------
following financial covenants. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP as in effect on the date of
this Agreement on a basis consistently applied.
(a) The Borrower shall not permit its Debt Service coverage Ratio
to be less than 1.35 to 1.0 for any consecutive four quarter period
(calculated on a rolling four quarter basis). The Debt Service Coverage
Ratio shall be the Borrower's consolidated net income, less Distributions
(as defined herein), plus (to the extent deducted in calculating net such
income) depreciation, amortization and interest expense, for the four
fiscal quarters ending as of the end of each fiscal quarter, divided by
interest expense, current maturities of long term debt and current
maturities of capital leases payable on a consolidated basis during such
fiscal quarters. For purposes hereof, "Distributions" shall mean all
dividends and other distributions to shareholders during any applicable
period.
(b) The Borrower shall not permit its Debt Ratio to exceed 3.0 to
1 as of the end of any fiscal quarter. For purposes hereof, the Debt Ratio
shall the ratio of: (i) the Borrowers Funded Debt as of the end of each
fiscal quarter to (ii) the Borrower's consolidated net income before
income taxes plus, to the extent deducted in calculating such net income,
interest, depreciation and amortization, for the four fiscal quarters
ending on such date. Funded Debt shall mean all of the Borrower's
consolidated capital lease obligations, outstanding obligations evidenced
by promissory notes, bonds and similar instruments and all other
indebtedness for borrowed money.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants, and so long as this Agreement is in
effect or any part of the Obligations remains unpaid, shall continue to
represent and warrant at all times, that:
15
5.1 The Borrower. Each of the Borrower and its Subsidiaries is a
------------
corporation duly incorporated and validly existing under and by virtue of its
state of incorporation. Each of the Borrower and its Subsidiaries is duly
licensed and qualified in all other states and jurisdictions wherein the nature
of the business transacted by it or the ownership of its properties makes such
licensing or qualification as a foreign corporation necessary, if any, except
where the failure to be so qualified would not have a Material Adverse Effect.
Each of the Borrower and its Subsidiaries: (a) holds in full force and effect
all permits, licenses and franchises necessary for it to carry out its
operations in conformity with al1 material applicable laws and regulations; and
(b) has full and adequate power to own its Property and conduct its business as
now conducted.
5.2 Authorization, Conflicts and Validity. The execution and delivery of
-------------------------------------
this Agreement and each of the other Loan Documents to which the Borrower is or
will be a party and the performance by the Borrower of all of its obligations
thereunder: (a) have been duly authorized by all requisite corporate action; (b)
will not violate or be in conflict with (i) any material provision of applicable
law (including, without limitation, any applicable usury or similar law); (ii)
any material order, rule or regulation of any court or other governmental
authority to which the Borrower is subject; (iii) any material provision of its
certificate of incorporation or bylaws, including any amendments thereto, or any
resolution with continuing effect adopted by its Board of Directors or
shareholders; or (iv) any material provision of any shareholders agreement or
trust respecting securities of its issue or related rights; (c) will not
violate, be in conflict with, result in a breach of or constitute a default
(with or without the giving of notice or the passage of time or both) under any
material instrument, indenture, agreement or other obligation to which it is a
party or by which it or any of its assets and properties is or may be bound or
subject; and (d) except as specifically contemplated or permitted by this
Agreement or any other Loan Document, will not result in the creation or
imposition of any lien, charge or encumbrance of any nature upon any of its
assets and properties. The Loan Documents to which the Borrower is or will be a
party when executed and delivered will be legal, valid and binding obligations
of the Borrower, enforceable in accordance with their respective terms and
provisions.
5.3 Consents. No consent, approval or authorization of, or
--------
registration, declaration or filing with, any governmental authority or other
Person (including, without limitation, the shareholders of the Borrower) (other
than the filing of any required financing statements to perfect the Bank's
security interest in collateral) is required as a condition precedent,
concurrent or subsequent to or in connection with the due and valid execution,
delivery and performance by the Borrower of this Agreement or any other Loan
Document to which it is or will be a party, or the legality, validity, binding
effect or enforceability of any of the respective representations, warranties,
covenants and other terms and provisions thereof. Each franchise, license,
certificate, authorization, approval or consent from any governmental authority
material to the present conduct of the business and operations of the Borrower,
or required for the acquisition, ownership, improvement, operation or
maintenance by it of any material portion of the assets and properties it now
owns, operates or maintains, has been obtained and validly granted, is in full
force and effect and constitutes valid and sufficient authorization therefor.
16
5.4 Financial Statements. The Borrower has made available to the Bank
--------------------
financial statements as of and for the fiscal year ending December 31, 1999,
and the period ending September 30, 2000. Those financial statements fairly
present the financial condition of the Borrower and the results of its
operations as of the dates thereof. Those financial statements have been
prepared in accordance with GAAP consistently applied throughout the periods
involved, except for changes, if any, stated in any related accountants reports.
The Borrower does not have any contingent liabilities that are material to it
other than as indicated on such financial statements.
5.5 Changes in Financial Condition. Since September 30, 2000, there has
------------------------------
been no material adverse change in the assets, the financial condition or
business prospects of the Borrower from that set forth or reflected in the
financial statements as of that date. The Borrower is current in the payment of
all of its debts and performance of all of its material obligations.
5.6 Legal or Administrative Proceedings. There are no material actions,
-----------------------------------
suits, investigations or proceedings by any Person pending or, to the best
knowledge of the Borrower, threatened against the Borrower or any Subsidiary or
to which any of them is a party involving the possibility of any material
adverse judgment or liability not fully covered by insurance or by adequate
reserves set up on the books of the Borrower or any Subsidiary.
5.7 Assets. The Borrower and its Subsidiaries have good and marketable
------
title to (or valid leasehold interests in) all of their assets reflected in the
financial statements dated September 30, 2000, and such assets are free and
clear of all Liens and charges except for Permitted Liens.
5.8 Trademarks, Franchises and Licenses. Each of the Borrower and its
-----------------------------------
Subsidiaries owns, possesses or has the right to use al% necessary patents,
licenses, software, franchises, trademarks, trade names, trade styles,
copyrights, trade secrets, know how and confidential commercial and proprietary
information to conduct its businesses as now conducted, without known conflict
with any patent, license, franchise, trademark, trade name, trade style,
copyright or other proprietary right of any other Person.
5.9 Losses. Since September 30, 2000, no material loss, damage,
------
destruction or taking of any of the physical properties of the Borrower or any
Subsidiary has occurred that has not been fully restored or replaced, or that
is not fully covered by insurance, and neither the Property nor business of the
Borrower or any Subsidiary has been adversely affected in any substantial way as
the result of any accident, strike, lockout, combination of workmen, embargo,
riot, war, act of God or public enemy. Neither the Borrower nor any of its
officers is aware of any material adverse fact concerning the conditions or
future prospects of the Borrower or any Subsidiary that has not been fully
disclosed in writing to the Bank.
5.10 Corporate Restrictions. The Borrower is not a party to any contract
----------------------
or subject to any charter or other corporate restriction that would materially
and adversely affect its property or business, or its ability to perform its
obligations under the Loan Documents.
17
5.11 Taxes. The Borrower has filed all federal and state tax returns that
-----
are required to be filed, and has paid all taxes as shown on the returns and on
all assessments received by it to the extent that the taxes have become due.
Proper and, in the Borrower's judgment, accurate amounts have been withheld by
the Borrower from its employees for all periods in full and complete compliance
with the tax, social security and unemployment withholding provisions of
applicable federal, state, local and foreign law and such withholdings have been
timely paid to the respective governmental agencies.
5.12 Default. There exists as of the date hereof no Default.
-------
5.13 Other Representations. All warranties and representations of the
---------------------
Borrower contained in any of the Loan Documents are true and accurate in all
material respects.
5.14 ERISA. The Borrower has fulfilled its obligations under the minimum
-----
funding standards of and is in compliance in all material respects with ERISA
and the Code to the extent applicable to it. The Borrower has not incurred any
liability to the PBGC or a Plan under Title IV of ERISA other than a liability
to the PBGC for premiums under Section 4007 of ERISA. The Borrower does not have
any contingent liabilities with respect to any post-retirement benefits under
any Plan or Welfare Plan, other than liability for continuation coverage
described in Article 6 of Title I of ERISA.
5.15 Compliance with Laws. Each of the Borrower and its Subsidiaries is
--------------------
in compliance with the requirements of all federal, state and local laws, rules
and regulations applicable to or pertaining to its Property or business
operations (including, without limitation, the Occupational Safety and Health
Act of 1970, the Americans with Disabilities Act of 1990, and laws and
regulations establishing quality criteria and standards for air, water, land and
toxic or hazardous wastes and substances), non-compliance with which,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. The Borrower and its Subsidiaries have not received any
notice to the effect that their operations are not in compliance with any of the
requirements of applicable federal, state or local environmental, health and
safety statutes and regulations or are the subject of any governmental
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
5.16 Purpose of the Borrower. The Borrower does not own any "margin
-----------------------
security" within the meaning of Regulation U (12 CFR Part 221) of the Board of
Governors of the Federal Reserve System. None of the proceeds of the loan by the
Bank to the Borrower will be used for the purpose of purchasing or carrying any
margin security or for the purpose of reducing or retiring any indebtedness that
was originally incurred to purchase or carry a margin security or for any other
purpose that might constitute this transaction a "purpose credit" within
the meaning of Regulation U, as now in effect or as it may hereafter be amended.
Neither the Borrower nor any agent acting on its behalf has taken or will take
any action that might cause this Agreement or any Loan Document to violate
Regulation U or any other regulation of the Board of Governors
18
of the Federal Reserve System or to violate the Securities Exchange Act of 1934,
in each case as in effect now or as the same may hereafter be amended.
5.17 Payment of Loan Proceeds. The Bank is authorized to disburse all
------------------------
proceeds of any loan to the Borrower hereunder directly to or upon the order of
any officer of the Borrower without looking into the use of those proceeds.
5.18 Solvency. After giving effect to the full funding of the loans
--------
contemplated herein, the Borrower will be solvent. "Solvent" shall mean, when
used with respect to any Person, that: (a) such Person does not intend to incur,
and does not believe and has no reason to believe that it will incur, debts
beyond its ability to pay as they become due; (b) the sum of such Person's
assets is greater than all of such Persons liabilities at a fair valuation; (c)
such Person has sufficient cash flow to enable it to pay its debts as they
become due; and (d) such Person does not have unreasonably small capital to
carry on such Person's business as theretofore operated and all businesses in
which such Person is about to engage. "Fair valuation" is intended to mean that
value that can be obtained if the assets are sold within a reasonable time in
arms-length transactions in an existing and not theoretical market.
5.19 Federal Acts. The Borrower is not an "investment company" or a
------------
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, or a "public utility holding
company" within the meaning of the Public Utility Holding Company Act.
5.20 Affiliate Transactions. The Borrower is not a party to any contracts
----------------------
or agreements with any of its affiliates on terms and conditions that are less
favorable to the Borrower than would be usual and customary in similar
contracts or agreements between Persons not affiliated with one another.
5.21 Full Disclosure. The statements and information furnished to the
---------------
Bank in connection with the negotiation of this Agreement and the other Loan
Documents and the commitment by the Bank to provide all or part of the financing
contemplated hereby do not contain any untrue statements of a material fact or
omit a material fact necessary to make the material statements contained herein
or therein not misleading. The Bank acknowledges that, as to any projections
furnished to the Bank, the Borrower only represents that the same were prepared
on the basis of information and estimates that the Borrower believed to be
reasonable.
5.22 Subsidiaries. As of the date hereof, the Borrower owns no
------------
Subsidiaries other than: (a) Alabama Tissue Center, Inc.; (b) Georgia Tissue
Bank, Inc.; and (c) any other subsidiary listed on Exhibit 21 to the Borrower's
Registration Statement on Form S-l filed prior to the date hereof with the
Securities and Exchange Commission under file number 333-35756.
19
ARTICLE 6
DEFAULT AND REMEDIES
6.1 Events of Default. The occurrence of any one of the following shall
-----------------
be a default (each, a "Default") under this Agreement: (a) any of the
Indebtedness is not paid when due, whether on the scheduled due date or upon
acceleration, maturity or otherwise; (b) any covenant, agreement, condition,
representation or warranty in this Agreement (other than covenants to pay the
Indebtedness and other than Defaults expressly listed in this Section 6.1) is
not fully and timely performed, observed or kept if such default shall not have
been remedied within 30 days after written notice thereof is sent by the Bank to
the Borrower; (c) the occurrence of a Default or an Event of Default under any
other Loan Document (taking into account any applicable notice and cure period
set forth in such Loan Document); (d) the execution or filing of any notice or
affidavit of commencement stating construction on the Land actually commenced
prior to the day after the date on which the Mortgage was duly filed for record;
(e) construction of the Improvements ceases for more than ten (10) days (whether
or not consecutive) except for Excusable Delays; (f) the construction of the
Improvements, or any materials for which an advance has been requested, fails to
comply with the Plans, the Loan Documents, any laws or governmental
requirements, or any applicable restrictive covenants if such default shall not
have been remedied within 30 days after written notice thereof is sent by the
Bank to the Borrower; (g) the Borrower fails to satisfy any condition precedent
to the obligation of the Bank to make an advance if such default shall not have
been remedied within 30 days after written notice thereof is sent by the Bank to
the Borrower; (h) construction of the Improvements is abandoned, the Bank
reasonably determines that construction of the Improvements in accordance with
this Agreement will not be completed on or before the Completion Date, or the
Borrower fails to complete construction of the Improvements (and obtain all
applicable permits, licenses, certificates and approvals) in accordance with
this Agreement on or before the Completion Date; (i) any required permit,
license, certificate or approval with respect to the Property lapses or ceases
to be in full force and effect if such permit, license, certificate or approval
is not reinstated within 30 days of such lapse or cessation; (j) a Borrower's
Deposit is not made with the Bank within seven (7) days after the Bank's
request therefor in accordance with Section 1.5; (k) construction is enjoined or
the Borrower or the Bank is enjoined or prohibited from performing any of its
respective obligations under any of the Loan Documents; (1) the Borrower enters
into any lease of part or all of the Property which does not comply with the
Loan Documents; (m) a lien for the performance of work or the supply of
materials which is established against the Property, or any stop notice served
on the Borrower, the general contractor or the Bank, remains unsatisfied or
unbonded for a period of twenty (20) days after the date of filing or service;
(n) the occurrence of any condition or situation which, in the sole
determination of the Bank, constitutes a danger to or impairment of the Property
or the lien of the Mortgage, if such condition or situation is not remedied
within ten (10) days after written notice to the Borrower thereof except,
however, that a Default shall not be deemed to have occurred if the Borrower
commences to cure such condition or situation within such 10-day period and the
Borrower completes such cure within 60 days after such notice; (o) the entry of
a judgment against the Borrower or any Subsidiary or the issuance of any
attachment, sequestration, or similar writ levied upon any of its property which
is not discharged within a period of thirty (30) days; (p) the Bank determines
that a material adverse change has occurred in the financial condition of the
Borrower or any
20
Guarantor or, in the condition of the Property; (q) a default occurs under any
other Loan Document which is not cured within any applicable notice and cure
period provided therein; or (r) a default or event of default occurs under any
other obligation now or hereafter owed by the Borrower to the Bank (or any
document pertaining thereto) which is not cured within any applicable notice and
cure period provided therein.
6.2 Remedies. Upon the occurrence of a Default, the Bank at its election
--------
may (but shall not be obligated to), without notice, do any one or more of the
following: (a) terminate its commitment to lend and any obligation to disburse
any Borrower's Deposit hereunder; (b) terminate any obligation to extend any
other credit to or for the account of the Borrower; (c) reduce any claim to
judgment; (d) exercise any and all rights and remedies afforded by this
Agreement, the other Loan Documents, law, equity or otherwise, including
obtaining appointment of a receiver (to which the Borrower hereby consents) or
judicial or nonjudicial foreclosure under the Mortgage; (e) in its own name or
in the name of the Borrower, enter into possession of the Property, perform all
work necessary to complete construction of the Improvements substantially in
accordance with the Plans (as modified as deemed necessary by the Bank), the
Loan Documents, and all applicable laws, governmental requirements and
restrictive covenants, and continue to employ the Borrower's architect, engineer
and any contractor pursuant to the applicable contracts or otherwise; or (f)
set-off and apply, to the extent thereof and to the maximum extent permitted by
law, any and all deposits, funds, or assets at any time held and any and all
other indebtedness at any time owing by the Bank to or for the credit or account
of the Borrower against any Indebtedness.
6.3 Attorney in Fact. The Borrower hereby appoints the Bank as the
----------------
Borrower's attorney-in-fact, which power of attorney is irrevocable and coupled
with an interest, with full power of substitution, to do any of the following in
the Borrower's name upon the occurrence of a Default: (a) use such sums as are
necessary, including any proceeds of the Loan and any Borrower's Deposit, make
such changes or corrections in the Plans, and employ such architects, engineers,
and contractors as may be required, or as the Bank may otherwise consider
desirable, for the purpose of completing construction of the Improvements
substantially in accordance with the Plans (as modified as deemed necessary by
the Bank), the Loan Documents, and all applicable laws, governmental
requirements and restrictive covenants; (b) execute all applications and
certificates in the name of the Borrower which may be required for completion of
construction of the Improvements; (c) endorse the name of the Borrower on any
checks or drafts representing proceeds of any insurance policies, or other
checks or instruments payable to the Borrower with respect to the Property; (d)
do every act with respect to the construction of the Improvements that the
Borrower may do; (e) prosecute or defend any action or proceeding incident to
the Property; (f) pay, settle, or compromise all bills and claims so as to clear
title to the Property; and (g) take over and use all or any part of the labor,
materials, supplies and equipment contracted for, owned by, or under the control
of the Borrower, whether or not previously incorporated into the Improvements.
Any amounts expended by the Bank to construct or complete the Improvements or in
connection with the exercise of its remedies herein shall be deemed to have been
advanced to the Borrower hereunder as a demand obligation owing by the Borrower
to the Bank and shall constitute a portion of the Indebtedness, regardless of
whether such amounts exceed any limits for Indebtedness otherwise set forth
herein. The Bank
21
shall have no liability to the Borrower for the sufficiency or adequacy of any
such actions taken by the Bank except to the extent of the Bank's gross neglect
or willful misconduct.
6.4 Additional Rights, No delay or omission of the Bank to exercise any
-----------------
right, power or remedy accruing upon the occurrence of a Default shall impair
any such right, power or remedy or shall be construed to be a waiver of any such
Default or any acquiescence therein. No delay or omission on the part of the
Bank to exercise any option for acceleration of the maturity of the
Indebtedness, or for foreclosure of the Mortgage following any Default as
aforesaid, or any other option granted to the Bank hereunder in any one or more
instances, or the acceptances by the Bank of any partial payment on account of
the Indebtedness, shall constitute a waiver of any such Default, and each such
option shall remain continuously in full force and effect. No remedy herein
conferred upon or reserved to the Bank is intended to be exclusive of any other
remedies provided for in the Note or any of the other Loan Documents, and each
and every such remedy shall be cumulative, and shall be in addition to every
other remedy given hereunder, or under the Note or any of the other Loan
Documents, or now or hereafter existing at law or in equity or by statute. Every
right, power and remedy given to the Bank by this Agreement, the Note or any of
the other Loan Documents shall be concurrent, and may be pursued separately,
successively or together against the Borrower, or the Property or any part
thereof, or any personal property granted as security under the Loan Documents,
and every right, power and remedy given by this Agreement, the Note or any of
the other Loan Documents may be exercised Corn time to time as often as may be
deemed expedient by the Bank.
6.5 Further Rights of Bank.
----------------------
(a) The Borrower acknowledges that its timely and complete
compliance with all of the terms and conditions contained in the Loan
Documents is a material consideration for the Bank extension of the credit
facilities evidenced by the Loan Documents. In addition to all other
rights and remedies that the Bank has upon the occurrence of a Default,
the Bank, in its sole discretion, may: (i) waive its rights resulting from
such Default; and (ii) charge the Borrower a fee for such waiver.
(b) The Borrower acknowledges that the Banks ability to monitor
the loans evidenced by the Note is dependent upon the Borrower's providing
all financial statements and other information required in Section 3.1
hereof within the time periods set forth in such section. In addition to
all other rights and remedies that the Bank has upon the occurrence of a
Default, the Bank may by notice to the Borrower assess the Borrower a late
fee upon each failure by the Borrower to deliver financial statements or
information within the time periods set forth in Section 3.1 hereof
(whether or not such failure constitutes a Default hereunder). The amount
of such late fee shall equal the greater of: (i) $500.00; or (ii) 0.10%
of the then outstanding principal balance of the Note. The Borrower shall
pay such fee no later than ten days after the Bank has notified the
Borrower of such assessment. The Bank may assess the late fee on
successive occasions based upon any successive failures to deliver
financial statements or financial information within the periods required
herein. The Bank's assessment of any such fee, and the Borrower's payment
of the same, shall not be deemed to be a waiver of the Borrower's
22
continuing obligation to provide financial statements and other
information required hereunder.
ARTICILE 7
GENERAL TERMS AND CONDITIONS
7.1 Bank's Consent. Except where otherwise expressly provided in the
--------------
Loan Documents, in any instance where the approval, consent or the exercise of
the Bank's judgment is required, the granting or denial of such approval or
consent and the exercise of such judgment shall be: (a) within the reasonable
discretion of the Bank; and (b) deemed to have been given only by a specific
writing intended for the purpose given and executed by the Bank. Notwithstanding
any approvals or consents by the Bank, the Bank has no obligation or
responsibility whatsoever for the adequacy, form or content of the Plans, the
Budget, any contract, any change order, any lease, or any other matter incident
to the Property or the construction of the Improvements. The Bank's review of
the plans or acceptance of an assignment of the Plans shall not constitute
approval of the Plans. Any inspection or audit of the Property or the books and
records of the Borrower, or the procuring of documents and financial and other
information, by or on behalf of the Bank shall be for the Banks protection only,
and shall not constitute an assumption of responsibility to the Borrower or
anyone else with regard to the condition, construction, maintenance or operation
of the Property, or relieve the Borrower of any of the Borrower's obligations.
The Borrower has selected all surveyors, architects, engineers, contractors,
materialmen and all other persons or entities furnishing services or materials
to the Project. The Bank has no duty to Supervise or to inspect the Property or
the construction of the Improvements nor any duty of care to the Borrower or any
other person to protect against, or inform the Borrower or any other person of
the existence of, negligent, faulty, inadequate or defective design or
construction of the Improvements. The Bank shall not be liable or responsible
for, and the Borrower shall indemnify the Bank from and against any claim,
action, loss or cost (including attorney's fees and costs) arising from or
relating to: (a) any defect in the Property or the Improvements; (b) the
performance or default of the Borrower, the Borrower's surveyors, architects,
engineers, contractors, the Construction Consultant, or any other person, (c)
any failure to construct, complete, protect or insure the Improvements, (d) the
payment of costs of labor, materials, or services supplied for the construction
of the Improvements, or (e) the performance of any obligation of the Borrower
whatsoever. Nothing, including any advance or acceptance of any document or
instrument, shall be construed as a representation or warranty, express or
implied, to any party by the Bank. Inspection shall not constitute an
acknowledgment or representation by the Bank or the Construction Consultant that
there has been or will be compliance with the Plans, the Loan Documents, or
applicable laws, governmental requirements and restrictive covenants, or that
the construction is free from defective materials or workmanship. Inspection,
whether or not followed by notice of Default, shall not constitute a waiver of
any Default then existing, or a waiver of the Bank's right thereafter to insist
that the Improvements be constructed in accordance with the Plans, the Loan
Documents, and all applicable laws, governmental requirements and restrictive
covenants. The Bank's failure to inspect shall not constitute a waiver of any of
the Bank's rights under the Loan Documents or at law or in equity.
23
7.2 Miscellaneous. This Agreement may be executed in several
-------------
counterparts, all of which are identical, and all of which counterparts together
shall constitute one and the same instrument. The Loan Documents are for the
sole benefit of the Bank and the Borrower and are not for the benefit of any
third party. a determination that any provision of this Agreement is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision and the determination that the application of any provision of
this Agreement to any person or circumstance is illegal or unenforceable shall
not affect the enforceability or validity of such provision as it may apply to
other persons, entities or circumstances. Time shall be of the essence with
respect to the Borrower's obligations under the Loan Documents. This Agreement,
and its validity, enforcement and interpretation, shall be governed by Florida
law (without regard to any conflict of laws principles) and applicable United
States federal law.
7.3 Notices. All notices, requests, consents, demands and other
-------
communications required or which any party desires to give under this Agreement
or any other Loan Document shall be in writing and, unless otherwise
specifically provided in such other Loan Document, shall be deemed sufficiently
given or furnished if delivered by personal delivery, by courier, by registered
or certified United States mail, postage prepaid, or by facsimile (with a
confirmatory duplicate copy sent by first class United States mail), addressed
to the party to whom directed at the addresses set forth at the end of this
Agreement (unless changed by similar notice in writing given by the particular
party whose address is to be changed). Any such notice or communication shall be
deemed to have been given either at the time of personal delivery or, in the
case of courier or mail, as of the date of first attempted delivery at the
address and in the manner provided herein, or, in the case of facsimile, upon
receipt. However, service of a notice required by any applicable statute shall
be considered complete when the requirements of that statute are met.
Notwithstanding the foregoing, no notice of change of address shall be effective
except upon actual receipt. This Section shall not be construed in any way to
affect or impair any waiver of notice or demand provided in any Loan Document or
to require giving of notice or demand to or upon any person in any situation or
for any reason.
7.4 Successors and Assigns. This Agreement shall be binding upon the
----------------------
Borrower, and the Borrower's heirs, devisees, representatives, successors and
assigns, and shall inure to the benefit of the Bank and its successors and
assigns. However, the Borrower shall not assign, transfer or encumber its rights
or obligations under any Loan Document, or any proceeds of the Loan, or its
interest in the Property without the prior written consent of the Bank.
7.5 Sale or Assignment of Loan. The Bank may sell or offer to sell the
--------------------------
Loan or interests therein to one or more assignees or participants. The Bank may
disseminate any information it now has or hereafter obtains pertaining to the
Loan, including any security for the Loan and credit or other information on the
Project, the Borrower, any of the Borrower's principals and any Guarantor, to
any actual or prospective assignee or participant, to the Banks affiliates,
including, without limitation, Bank of America Securities LLC, to any regulatory
body having jurisdiction over the Bank and to any other parties as necessary or
appropriate in the Bank's reasonable judgment. The Borrower shall execute,
acknowledge, and deliver any and all instruments reasonably requested by the
Bank in connection therewith, and to the extent, if any, specified in any such
assignment or participation, such assignee(s) or participant(s) shall have the
24
rights and benefits with respect to the Loan Documents as such person(s) would
have if such person(s) were the Bank hereunder. The Borrower acknowledges that
the Bank currently intends to sell or assign a 40% interest in the Loan
Documents to one or more participating financial institutions. If the Bank is
unable to sell or assign a 40% interest in the Loan Documents, then the Borrower
shall upon request of the Bank, after consultation with the Bank, agree to such
modifications in the pricing, structure and other terms governing the Loan as
the Bank may require to facilitate a sale or assignment of such interest.
7.6 Modification or Termination. The Loan Documents may only be modified
---------------------------
or terminated by a written instrument or instruments intended for that purpose
and executed by the party against which enforcement thereof is asserted. This
Agreement shall continue in full force and effect until the Indebtedness is paid
in full and all of the Bank's obligations under this Agreement are terminated.
All representations and warranties and all provisions herein for indemnity of
the Bank (and any other provisions herein specified to survive) shall survive
payment in full of the Indebtedness and any release or termination of this
Agreement or of any other Loan Documents.
7.7 Costs and Expenses. Without limiting any Loan Document and to the
------------------
extent not prohibited by applicable laws, the Borrower shall pay when due, shall
reimburse to the Bank on demand and shall indemnify the Bank from, all
out-of-pocket fees, costs, and expenses paid or incurred by the Bank in
connection with the negotiation, preparation and execution of this Agreement and
the other Loan Documents (and any amendments, approvals, consents, waivers and
releases requested, required, proposed or done from time to time), or in
connection with the disbursement, administration or collection of the Loan or
the enforcement of the obligations of the Borrower or the exercise of any right
or remedy of the Bank, including without limitation: (a) all fees and expenses
of the Bank's counsel; (b) fees and charges of each Construction Consultant,
inspector and engineer; (c) appraisal, re-appraisal (subject to the limitations
set forth herein) and survey costs; (d) title insurance charges and premiums;
(e) title search or examination costs, including abstracts, abstracters'
certificates and uniform commercial code searches; (f) judgment and tax lien
searches for the Borrower and each Guarantor; (g) escrow fees; (h) fees and
costs of environmental investigations site assessments and remediations; (i)
recordation taxes, documentary taxes, transfer taxes and mortgage taxes; (j)
filing and recording fees; and (k) loan brokerage fees. The Borrower shall pay
all costs and expenses incurred by the Bank, including attorneys' fees, if the
obligations or any part thereof are sought to be collected by or through an
attorney at law, whether or not involving probate, appellate, administrative or
bankruptcy proceedings. The Borrower shall pay all costs and expenses of
complying with the Loan Documents, whether or not such costs and expenses are
included in the Budget. The Borrower's obligations under this Section shall
survive the delivery of the Loan Documents, the making of advances, the payment
in full of the obligations, the release or reconveyance of any of the Loan
Documents, the foreclosure of the Mortgage or conveyance in lieu of foreclosure,
any bankruptcy or other debtor relief proceeding, and any other event
whatsoever. Notwithstanding the foregoing, the Borrower shall not be required to
reimburse the Bank for, or indemnify the Bank against, any fees, charges or
other costs to the extent that such fees, charges or other costs result from the
Bank's gross neglect or willful misconduct.
25
7.8 Further Assurances. The Borrower will upon the Bank's request: (a)
------------------
promptly correct any defect, error or omission in any Loan Document; (b)
execute, acknowledge, deliver, procure, record or file such further instruments
and do such further acts as the Bank deems necessary, desirable or proper to
carry out the purposes of the Loan Documents and to identify and subject to the
liens and security interest of the Loan Documents any property intended to be
covered thereby, including any renewals, additions, substitutions, replacements,
or appurtenances to the Property; (c) execute, acknowledge, deliver, procure,
file or record any document or instrument the Bank deems necessary, desirable,
or proper to protect the liens or the security interest under the Loan Documents
against the rights or interests of third persons; and (d) provide such
certificates, documents, reports, information, affidavits and other instruments
and do such further acts deemed necessary, desirable or proper by the Bank to
comply with the requirements of any agency having jurisdiction over the Bank.
7.9 Inducement to the Bank. The representations and warranties contained
----------------------
in this Agreement and the other Loan Documents: (a) are made to induce the Bank
to make the Loan and extend any other credit to or for the account of the
Borrower pursuant hereto, and the Bank is relying thereon, and will continue to
rely thereon, and (b) shall survive any bankruptcy proceedings involving the
Borrower, any Guarantor or the Property, foreclosure, or conveyance in lieu of
foreclosure.
7.10 Forum. The Borrower hereby irrevocably submits generally and
-----
unconditionally for itself and in respect of its property to the jurisdiction of
any state court, or any United States federal court, sitting in the State of
Florida and to the jurisdiction of any state court or any United States federal
court, sitting in the state in which any of the Property is located, over any
suit, action or proceeding arising out of or relating to this Agreement or the
Indebtedness. The Borrower hereby irrevocably waives, to the fullest extent
permitted by law, any objection that the Borrower may now or hereafter have to
the laying of venue in any such court and any claim that any such court is an
inconvenient forum. The Borrower hereby agrees and consents that, in addition to
any methods of service or process provided for under applicable law, all service
of process in any such suit, action or proceeding in any state court, or any
United States federal court, sitting in the State of Florida may be made by
certified or registered mail, return receipt requested, directed to the Borrower
at its address for notice stated in the Loan Documents, or at a subsequent
address of which the Bank received actual notice from the Borrower in accordance
with the Loan Documents, and service so made shall be complete five (5) days
after the same shall have been so mailed. Nothing herein shall effect the right
of the Bank to serve process in any manner permitted by law or limit the right
of the Bank to bring proceedings against the Borrower in any other court or
jurisdiction.
7.11 Interpretation. References to "Dollars" "$," "money," "payments"
--------------
or other similar financial or monetary terms are references to lawful money of
the United States of America. References to Articles, Sections, and Exhibits
are, unless specified otherwise, references to articles, sections and exhibits
of this Agreement. Words of any gender shall include each other gender. Words in
the singular shall include the plural and words in the plural shall include the
singular. References to the Borrower or any Guarantor shall mean, each person
comprising same, jointly and severally. References to persons shall include both
natural persons
26
and any legal entities, including public or governmental bodies, agencies or
instrumentalities. Unless otherwise specified herein, all references to
"business days" for the purpose of calculating time periods shall be based upon
business days during which the Bank is open for business operation, excluding
Saturdays and Sundays. The words "herein," "hereof," "hereunder" and other
similar compounds of the word "here" shall refer to this entire Agreement
(including the attached exhibits) and not to any particular provision or
section. The words "include" and "including" shall be interpreted as if followed
by the words "without limitation". Captions and headings in the Loan Documents
are for convenience only and shall not affect the construction of the Loan
Documents.
7.12 No Partnership. The relationship between the Bank and the Borrower
--------------
is solely that of lender and borrower. The Bank has no fiduciary or other
special relationship with or duty to the Borrower and none is created by the
Loan Documents. Nothing contained in the Loan Documents, and no action taken or
omitted pursuant to the Loan Documents, is intended or shall be construed to
create any partnership, joint venture, association, or special relationship
between the Borrower and the Bank or in any way make the Bank a co-principal
with the Borrower with reference to the Project, the Property or otherwise. In
no event shall the Bank's rights and interests under the Loan Documents be
construed to give the Bank the right to control, or be deemed to indicate that
the Bank is in control of, the business, properties, management or operations of
the Borrower.
7.13 Records. The unpaid amount of the Loan and the amount of any other
-------
credit extended by the Bank to or for the account of the Borrower set forth on
the books and records of the Bank shall be presumptive evidence of the amount
thereof owing and unpaid, but failure to record any such amount on the Bank's
books and records shall not limit or affect the obligations of the Borrower
under the Loan Documents to make payments on the Loan when due.
7.14 Entire Agreement. The Loan Documents constitute the entire
----------------
understanding and agreement between the Borrower and the Bank with respect to
the transactions arising in connection with the Loan, and supersede all prior
written or oral understandings and agreements between the Borrower and the Bank
with respect to the matters addressed in the Loan Documents. In particular, and
without limitation, the terms of any commitment by the Bank to make the Loan are
merged into the Loan Documents. The Bank has not made any commitments to extend
the term of the Loan past its stated maturity date or to provide the Borrower
with financing except as set forth in the Loan Documents. Except as incorporated
in writing into the Loan Documents, there are not, and were not, and no persons
are or were authorized by the Bank to make, any representations, understandings,
stipulations, agreements or promises, oral or written, with respect to the
matters addressed in the Loan Documents.
7.15 Arbitration. The parties agree to the following arbitration
-----------
provisions:
(a) This Section 7.15 concerns the resolution of any controversies
or claims between the Borrower and the Bank, whether arising in contract,
tort or by statute, including but not limited to controversies or claims
(collectively, a "Claim") that arise out
27
of or relate to: (i) this Loan Agreement (including any renewals,
restatements, extensions or modifications hereof); or (ii) any document
related to this Loan Agreement.
(b) At the request of the Borrower or the Bank, any Claim shall
be resolved by binding arbitration in accordance With the Federal
Arbitration Act (Title 9, U.S. Code) (the "Act"). The Act will apply
even though this Loan Agreement provides that it is governed by the law of
a specified state. Arbitration proceedings will be determined in
accordance with the Act, the rules and procedures for the arbitration of
financial services disputes of JAMS/Endispute or any successor thereof
("JAMS"), and the terms of this Section. In the event of any
inconsistency, the terms of this Section shall control. The arbitration
shall be administered by JAMS and conducted in any United States state
where real or tangible personal property collateral for this credit is
located or if there is no such collateral, in Florida. All Claims shall be
determined by one arbitrator. However, if Claims exceed $5,000,000, upon
the request of any party, the Claims shall be decided by three
arbitrators. All arbitration hearings shall commence within 90 days of the
demand for arbitration and close within 90 days of commencement and the
award of the arbitrator or arbitrators, as the case may be, shall be
issued within 30 days of the close of the hearing. However, the arbitrator
or arbitrators, as the case may be, upon a showing of good cause, may
extend the commencement of the hearing for up to an additional 60 days.
The arbitrator or arbitrators, as the case may be, shall provide a concise
written statement of reasons for the award. The arbitration award may be
submitted to any court having jurisdiction to be confirmed and enforced.
(c) The arbitrator(s) will have the authority to decide whether
any Claim is barred by the statute of limitations and, if so, to dismiss
the arbitration on that basis. For purposes of the application of the
statute of limitations, the service on JAMS under applicable JAMS rules of
a notice of Claim is the equivalent of the filing of a lawsuit. Any
dispute concerning this arbitration provision or whether a Claim is
arbitrable shall be determined by the arbitrator(s). The arbitrator(s)
shall have the power to award legal fees pursuant to the terms of this
Loan Agreement.
(d) This Section 7.15 does not limit the right of the Borrower or
the Bank to: (i) exercise self-help remedies, such as but not limited to,
setoff; (ii) initiate judicial or nonjudicial foreclosure against any real
or personal property collateral; (iii) exercise any judicial or power of
sale rights, or (iv) act in a court of law to obtain an interim remedy,
such as but not limited to, injunctive relief, writ of possession or
appointment of a receiver, or additional or supplementary remedies.
(e) By agreeing to binding arbitration, the Borrower and the Bank
irrevocably and voluntarily waive any right they may have to a trial by
jury in respect of any Claim. Furthermore, without intending in any way to
limit this Loan Agreement to arbitrate, to the extent any Claim is not
arbitrated, the parties inevocably and voluntarily waive any right they
may have to a trial by jury in respect of such Claim. This provision is a
material inducement for the Borrower's executing, and the Bank's
accepting, this Loan Agreement. No provision in this Loan Agreement or in
any document related hereto
28
regarding submission to jurisdiction or venue in any court is intended or
shall be construed to be in derogation of the provisions of this Loan
Agreement or in any such other document for arbitration of any controversy
or claim.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
Executed as of the day and year first above written.
Signed, sealed and delivered
in the presence of:
REGENERATION TECHNOLOGIES, INC.
/s/ Xxx Xxxxxxxx
---------------------------------
Name: Xxx Xxxxxxxx
----------------------------
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Its: Secretary
------------------------------
/s/ Xxx X. Xxxxxxx
---------------------------------
Name: Xxx X. Xxxxxxx (SEAL)
----------------------------
The Address of the Borrower is:
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
29
BANK 0F AMERICA, N.A.
------------------------------
Name: By: /s/ Xxxxx Xxxxxxxxxxx
------------------------- ---------------------------------
Its: Vice President
-----------------------------
------------------------------
Name:
-------------------------
(Seal)
The Address of the Bank is:
0000 Xxxxxxxxx Xxxx., Xxxx. 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attn: Commercial Loan Administration
30
Exhibit "A"
A portion of Government Lots 1 and 2 in Section 24, Township 8 South, Range 18
East, and being a portion of Replat of Progress Center as per plat thereof
recorded in Plat Book "P", pages 48 and 49 of the Public Records of Alachua
County, Florida; all lying and being in the City of Alachua, Alachua County,
Florida, and being more particularly described as follows:
Parcel 1
--------
Commence at the northwest corner of Parcel "C" of Replat of Progress Center as
per Plat thereof recorded in Plat Book "P", pages 48 and 49 of the Public
Records of Alachua County, Florida and run thence North 87(degrees) 15' 29"
East along the northerly boundary of said Parcel "C" a distance of 135.00 feet;
thence South 49(degrees) 23' 12" East along said northerly boundary, a distance
of 100.76 feet to the POINT OF BEGINNING (#1); thence continue South 49(degrees)
23' 12" East along said northerly boundary, a distance of 279.24 feet; thence
North 70(degrees) 36' 48" East along said northerly boundary, a distance of
23.73 feet to a point on the northwesterly right-of-way line of Innovation Drive
(a 100 foot right of way), said point being hereinafter referred to as Point A
and being on the arc of a curve concave northwesterly and having a radius of
200.00 feet; thence northeasterly along the arc of said curve and along said
northwesterly right of way line through a central angle of 27(degrees) 56' 18",
an arc distance of 97.52 feet to the end of said curve, said arc being subtended
by a chord having a bearing and distance of North 56(degrees) 38' 39" East,
96.56 feet; thence North 42(degrees) 40' 31" East, along said northwesterly
right-of-way line, a distance of 377.75 feet to a point at the intersection of
said northwesterly right-of-way line with the southerly right-of-way line of
Research Circle (80 foot right-of-way), said point being on the arc of a curve
concave southwesterly and having a radius of 560.00 feet; thence northwesterly
along the arc of said curve, and along said southerly right-of-way line, through
a central angle of 32(degrees) 05' 54", an arc distance of 313.73 feet to the
end of said curve, said arc being subtended by a chord having a bearing and
distance of North 68(degrees) 29' 48" West, 309.64 feet; thence North
84(degrees) 32' 45" West along said southerly right-of-way line, a distance of
256.00 feet to a point at the northeasterly corner of that certain parcel of
land as described in 0fflcial Records Book 2264, pages 2522 et. seq. of said
Public Records; thence South 05(degrees) 27' 15" West along the easterly
boundary of said parcel (O.R. Book 2264, pages 2522 et. seq.), a distance of
296.89 feet to the POINT OF BEGINNING.
Parcel 2
--------
Commence at Point A as described above and run thence South 19(degrees) 23' 12"
East, along the easterly boundary of said Parcel "C" of Replat of Progress
Center, and along the southwesterly end of the right-of-way of Innovation Drive
(100 foot right-of-way), a distance of 100.00 feet to a point on the
southeasterly right-of-way line of said Innovation Drive and the POINT OF
BEGINNING (#2); thence South 70(degrees) 36' 48" West along the easterly
boundary of said Parcel "C", a distance of 23.73 feet; thence South 10(degrees)
36' 48" West along said easterly boundary, a distance of 478.17 feet to a point
on the southerly boundary of said Parcel "C"; thence North 79(degrees) 23' 12"
West along said southerly boundary, a distance of 64.00 feet; thence North
13(degrees) 16' 55" West along said southerly boundary, a distance of 86.41
feet; thence North 79(degrees) 23' 12" West, a distance of 290.65 feet to the
southwesterly corner of said Parcel "C"; thence South 02(degrees) 55' 52"
West, a distance of 624.31 feet to a point on the northerly right-of-way line of
Research Circle (80 foot right-of-way), as per deed recorded in Official Records
Book 2213, pages 2412 et. seq. of said public records; thence South
87(degrees) 04' 08" East along said northerly right-of-way line a distance of
155.06 feet to the beginning of a curve concave northwesterly and having a
radius of 810.00 feet; thence northeasterly along the arc of said curve and
along the northerly and westerly right-of-way line of said Research Circle
through a central angle of 94(degrees) 23' 11", an arc distance of 1334.36 feet
to the end of said curve, said arc being subtended by a chord having a bearing
and distance of North 45(degrees) 44' 17" East, a distance of 1188.51 feet;
thence North 01(degrees) 27' 18" West along said westerly right-of-way line, a
distance of 217.62 feet to the beginning of a curve concave southwesterly and
having a radius of 410.00 feet; thence northwesterly along the arc of said curve
and along said westerly right-of-way line through a central angle of
41(degrees) 54' 28", an arc distance of 299.89 feet to a point at the
intersection of said westerly right-of-way line with the southeasterly right-of-
way line of said Innovation Drive, said arc being subtended by a chord having a
bearing and distance of North 22(degrees) 24' 33'" West, a distance of 293.25
feet; thence South 42(degrees) 40' 31" West along said southeasterly right-of-
way line, a distance of 379.00 feet to the beginning of a curve concave
northwesterly and having a radius of 300.00 feet; thence southwesterly along the
arc of said curve and along said southeasterly right-of-way line through a
central angle of 27(degrees) 56' 18", an arc distance of 146.28 feet to the
POINT OF BEGINNING, said arc being subtended by a chord having a bearing and
distance of South 56(degrees) 38' 39" West, a distance of 144.84 feet.
2
EXHIBIT "B"
-----------
BASIC INFORMATION
-----------------
As used in this Agreement and the attached exhibits, the following terms
shall have the following meanings:
"Advance Termination Date" means April 2, 2002.
------------------------
"Aggregate Cost" has the meaning set forth in Section 1.4 of this
--------------
Agreement.
"Agreement" means this Agreement.
---------
"Appraised Value" means $21,333,334.
---------------
"Bank" has the meaning set forth in the introductory paragraph of this
----
Agreement.
"Basic Information" has the meaning set forth in Section 1.3 of this
-----------------
Agreement.
"Borrower" has the meaning set forth in the introductory paragraph of this
--------
Agreement.
"Borrower's Deposit" has the meaning set forth in Section 1.5 of this
------------------
Agreement.
"Budget" means the budget and cost itemization for the Project attached as
------
Exhibit "D".
"Completion Date" means April 2, 2002.
---------------
"Construction Commencement Date" means January 1, 2001.
------------------------------
"Construction Consultant" means the construction consultant, if any,
-----------------------
engaged by the Bank with respect to the Project.
"Default" has the meaning set forth in Section 4.1 of this Agreement.
-------
"Draw Request" means a properly completed and executed written application
------------
by the Borrower to the Bank in the form approved by the Bank setting forth the
amount of Loan proceeds desired, together with such schedules, affidavits,
releases, waivers, statements, invoices, bills and other documents, certificates
and information the Bank requires.
"Environmental Agreement" means the Environmental Indemnity Agreement of
-----------------------
even date herewith by and between the Borrower, the Bank and certain other
persons.
"Excusable Delay" means a delay, not to exceed a total of ten (10) days,
---------------
caused by unusually adverse weather conditions which have not been taken into
account in the construction schedule, fire, earthquake or other acts of God,
strikes, lockouts, acts of public enemy, riots or
insurrections or any other unforeseen circumstances or events beyond the control
of the Borrower (except financial circumstances or events or matters which may
be resolved by the payment of money), and as to which the Borrower notifies the
Bank in writing within five (5) days after such occurrence; provided, however,
no Excusable Delay shall extend the Completion Date or suspend or xxxxx any
obligation of the Borrower or any Guarantor or any other person to pay any
money.
"Financial Statements" means (i) for each reporting party other than an
--------------------
individual, a balance sheet, income statement, statements of cash flow and
amounts and sources of contingent liabilities, a reconciliation of changes in
equity and liquidity verification, and unless the Bank otherwise consents,
consolidated and consolidating statements if the reporting party is a holding
company or a parent of a subsidiary entity; and (ii) for each reporting party
who is an individual, a balance sheet, statements of amount and sources of
contingent liabilities, income statement and, unless the Bank otherwise
consents, Financial Statements for each entity owned or jointly owned by the
reporting party. For purposes of this definition and any covenant requiring the
delivery of Financial Statements, each party for whom Financial Statements are
required is a "reporting party" and a specified period to which the required
Financial Statements relate is a "reporting period".
"Guarantor" means any person or entity that may hereafter guaranty any or
---------
all of the Borrower's obligations to the Bank.
"Improvements" means all on-site and off-site improvements required in
------------
connection with or otherwise related to the construction on the Land of a
manufacturing, office and commons facility containing approximately 132,000
square feet of space. The Improvements also include: (a) all fixtures and
appurtenances now or later to be located on the Land or in such improvements;
and (b) all other improvements contemplated in the Plans.
"Indebtedness" means any and all indebtedness to the Bank evidenced,
-------------
governed or secured by, or arising under, any of the Loan Documents, including
the Loan and all Letters of Credit.
"Interest Rate Protection Agreement" means any and all interest rate swap
----------------------------------
agreements, interest cap agreements, interest rate collar agreements, exchange
agreements, forward currency exchange agreements, forward rate currency or
interest rate options, foreign currency hedge, or any similar agreements or
arrangements entered into by the Borrower and the Bank in connection with the
Loan to hedge the risk of variable interest rate volatility or fluctuations of
interest rates, as such agreements or arrangements may be modified,
supplemented, and in effect from time to time, and any and all cancellations,
buy backs, reversals, terminations, or assignments of any of the foregoing.
"Initial Land Advance" means the amount, if any, shown in the Budget.
--------------------
"Land" means the real property described in Exhibit "A".
----
2
"Letters of Credit" means any and all letters of credit issued by the
-----------------
Bank for the account of the Borrower or its nominee in connection with the
construction of the Improvements, the Property or the Project, together with any
and all extension, renewals or modifications thereof, substitutions therefor or
replacements thereof.
"Loan" has the meaning set forth in the Recitals to this Agreement. The
----
Loan shall not exceed a principal amount of $16,000,000 or such lesser amount as
is set forth in the Budget. In the event the aggregate amount of the actual
costs incident to the Project are less than the aggregate amount specified in
the Budget, the maximum amount described above shall be reduced by the
difference between the aggregate amount specified in the Budget and the
aggregate amount of such actual costs (except as otherwise approved in writing
by the Bank in its discretion).
"Loan Documents" means this Agreement (including all exhibits), the
--------------
Mortgage, the Note, the Environmental Agreement, any guaranty, financing
statements, the Budget, each Draw Request, the Interest Rate Protection
Agreement (if applicable), any and all documents, instruments or agreements
executed and delivered to evidence, secure or in connection with all Letters of
Credit, and such other documents evidencing, securing or pertaining to the Loan
as shall, from time to time, be executed or delivered by the Borrower, any
Guarantor, or any other party to the Bank pursuant to this Agreement, as they
may be amended, modified, restated, replaced and supplemented from time to time.
"Material Adverse Effect" means (a) a material adverse change in, or
-----------------------
material adverse effect upon, the operations, business, Property, condition
(financial or otherwise) or prospects of the Borrower, (b) a material
impairment of the ability of the Borrower or to perform its obligations under
any Loan Document, or (c) a material adverse effect upon (i) the legality,
validity, binding effect or enforceability against the Borrower of any Loan
Document or the rights and remedies of the Bank thereunder or (ii) the
perfection or priority of any lien granted under any Loan Document.
"Mortgage" means the Mortgage, Assignment of Rents and Security of even
--------
date with this Agreement by and between the Borrower and the Bank, securing
repayment of the Indebtedness and the Borrower's performance of its other
obligations to the Bank under the Loan Documents, as amended, modified,
supplemented, restated and replaced from time to time.
"Note" means the Promissory Note of even date with this Agreement executed
----
by the Borrower in favor of the Bank in the principal amount of $16,000,000.00,
as the same may be amended, modified, replaced, restated, extended or renewed
from time to time.
"Obligations" means all of the Borrower's obligations to the Bank under
-----------
this Agreement or any of the other Loan Documents.
"Permitted Changes" means changes to the Plans or Improvements, provided
-----------------
the cost of any single change or extra does not exceed $250,000 and the
aggregate amount of all such changes and extras (whether positive or negative)
does not exceed $1,000,000.
3
"Person" means an individual, partnership, corporation, limited liability
------
company, association, trust, unincorporated organization or any other entity or
organization, including a government or agency or political subdivision thereof.
"Plans" means the plans and specifications listed in Exhibit "G" and all
-----
modifications thereof and additions thereto that are included as part of the
Plans in accordance with the terms of this Agreement.
"Project"' means the acquisition of the Land, the construction of the
-------
Improvements, and if applicable, the leasing and operation of the Improvements.
"Property" means the Land, the Improvements and all other property
--------
constituting the "Mortgaged Property," as described in the Mortgage, or subject
to a right, lien or security interest to secure the Loan pursuant to any other
Loan Document.
"Stored Materials Advance Limit" means $1,000,000.
------------------------------
"Subsidiary" means any corporation or other Person more than 50% of the
----------
outstanding ordinary voting shares or other equity interests of which is at the
time directly or indirectly owned by the Borrower, by one or more of its
Subsidiaries, or by the Borrower and one or more of its Subsidiaries.
"Survey" means a survey of the Land acceptable to the Bank.
------
"Title Insurance" means the loan policy or policies of title insurance
---------------
issued to the Bank by the Title Insurer, in an amount equal to the maximum
principal amount of the Loan, insuring the validity and priority of the Mortgage
encumbering the Land and Improvements for the benefit of the Bank.
"Title Insurer" means Attorneys Title Insurance Fund.
-------------
4
EXHIBIT "C"
-----------
CONDITI0NS PRECEDENT TO THE FIRST ADVANCE
-----------------------------------------
As conditions precedent to the first advance of Loan proceeds, all of the
following requirements shall be satisfied:
1. Fees and Expenses. The Bank shall have received any and all required
-----------------
commitment or loan fees, and the Borrower shall have paid all other fees, costs
and expenses (including the fees and costs of the Bank's counsel) then required
to be paid pursuant to this Agreement and all other Loan Documents, including,
without limitation, all fees, costs and expenses that the Borrower is required
to pay pursuant to any loan application or commitment.
2. Financial Statements. The Bank shall have received and approved the
--------------------
Financial Statements of the Borrower and each Guarantor or any other party
required by any loan application or commitment or otherwise required by the
Bank.
3. Appraisal. The Bank shall have received and approved a market value
---------
appraisal of the Property made within thirty (30) days of the date of this
Agreement, which appraises the Property on a "completed value" basis at not less
than the Appraised Value. The appraiser and appraisal must be satisfactory to
the Bank (including satisfaction of applicable regulatory requirements) and the
appraiser must be engaged directly by the Bank.
4. Draw Schedule and Budget. The Bank shall have received and approved the
------------------------
Borrower's proposed cash flow, draw schedule, and construction schedule for the
Project, and the Bank shall be satisfied, in its sole discretion, that the
Improvements may be completed in accordance with the construction schedule and
for costs not exceeding those set forth in the Budget.
5. Authorization. The Bank shall have received and approved evidence the
-------------
Bank requires of the existence, good standing, authority and capacity of the
Borrower and each Guarantor and their respective constituent partners, members,
managers and owners (however remote) to execute, deliver and perform their
respective obligations to the Bank under the Loan Documents.
6. Loan Documents. The Borrower, each Guarantor and each other person
--------------
required by the Bank shall have duly executed, acknowledged or sworn to as
required, and delivered to the Bank all Loan Documents then required by the
Bank, dated the date of this Agreement, each in form and content satisfactory to
the Bank, the Mortgage shall have been recorded in the official records of the
county in which the Property is located and UCC-1 financing statements shall
have been filed with the Secretary of State of Florida and recorded in the
county in which the Property is located.
7. Opinions. The Bank shall have received the written opinion of counsel
--------
satisfactory to the Bank for the Borrower addressed to the Bank, dated the date
of this Agreement.
8. Survey; No Special Flood Hazard. The Bank shall have received (a) two
-------------------------------
(2) prints of an original survey of the Land and improvements thereon dated not
more than sixty (60) days prior to the date of this Agreement (or dated such
earlier date, if any, as is satisfactory to the Title Insurer, but in any event
not more than one hundred eighty (180) days prior to the date of this Agreement)
satisfactory to the Bank and the Title Insurer and otherwise complying with
Exhibit "H" (except to the extent otherwise acceptable to the Bank), and (b) a
flood insurance policy in an amount equal to the lesser of the maximum Loan
amount or the maximum amount of flood insurance available under the Flood
Disaster Protection Act of 1973, as amended, and otherwise in compliance with
the requirements of the Loan Documents, or evidence satisfactory to the Bank
that none of the Land is located in a flood hazard area.
9. Title Insurance. The Bank shall have received and approved an ALTA title
---------------
insurance policy (or a title insurance commitment marked through the Loan
closing date with all Schedule B-1 requirements and standard exceptions
deleted), issued by the Title Insurer (which shall be approved by the Bank) in
the maximum amount of the Loan plus any other amount secured by the Mortgage, on
a coinsurance or reinsurance basis if and as required by the Bank, insuring
without exclusion or exception for creditor's rights that the Mortgage
constitutes a valid lien covering the Land and all Improvements thereon, having
the priority required by the Bank and subject only to those exceptions and
encumbrances (regardless of rank or priority) the Bank approves, in a form
acceptable to the Bank, and with all "standard" exceptions which can be
deleted, including the exception for matters which a current survey would show,
deleted to the fullest extent authorized under applicable title insurance rules,
and the Borrower shall satisfy all requirements therefor permitted; containing
no exception for standby fees or real estate taxes or assessments other than
those for the year in which the closing occurs to the extent the same are not
then due and payable and endorsed "not yet due and payable" and no exception for
subsequent assessments for prior years; providing full coverage against
mechanics' and materialmens' liens to the extent authorized under applicable
title insurance rules, and the Borrower shall satisfy all requirements
therefor; insuring that no restrictive covenants shown in the Title Insurance
have been violated, and that no violation of the restrictions will result in a
reversion or forfeiture of title; insuring all appurtenant easements; insuring
that fee simple indefeasible or marketable (as coverage is available) fee simple
title to the Land and Improvements is vested in the Borrower; containing such
affirmative coverage and endorsements as the Bank may require and are available
under applicable title insurance rules, and the Borrower shall satisfy all
requirements therefor; insuring any easements, leasehold estates or other
matters appurtenant to or benefiting the Land or the Improvements as part of the
insured estate; insuring the right of access to the Land to the extent
authorized under applicable title insurance rules, and the Borrower shall
satisfy all requirements therefor; and containing provisions acceptable to the
Bank regarding advances or readvances of Loan funds after closing.
2
10. Plans. The Bank shall have received and approved two (2) true and
-----
correct copies of all existing Plans (including the site plan), together with
satisfactory evidence that all applicable governmental authorities, the
Borrower, the Borrower's architect, engineer, and contractors and the
Construction Consultant have approved the same.
11. Contracts. The Bank shall have received and approved (a) a list
---------
containing the names and addresses of all existing material contractors,
architects, engineers, and other suppliers of services and materials for the
Project, their respective contract amounts, and a copy of their contracts; and
(b) duly executed, acknowledged and delivered originals from each contractor,
architect, engineer, subcontractor, or supplier of services or materials
required by the Bank, of (i) consents or other agreements satisfactory to the
Bank and (ii) agreements satisfactory to the Bank subordinating all rights,
liens, claims and charges they may have or acquire against the Borrower or the
Property to the rights, liens and security interests of the Bank. As used
herein, "material" party is one whose contract price exceeds $25,000 in the
aggregate.
12. Insurance Policies. The Bank shall have received and approved the
------------------
insurance policies initially required by the Bank, pursuant to the Loan
Documents, together with evidence satisfactory to the Bank that all premiums
therefor have been paid for a period of not less than one (1) year from the date
of this Agreement and that the policies are in full force and effect.
13. Environmental Compliance/Report. The Bank shall have received and
-------------------------------
approved evidence satisfactory to the Bank that no portion of the Land is
"wetlands" under any applicable law and that the Land does not contain and is
not within or near any area designated as a hazardous waste site by any
governmental authority, that neither the Property nor any adjoining property
contains or has ever contained any substance classified as hazardous or toxic
(or otherwise regulated, such as, without limitation, asbestos, radon or
petroleum products) under any law or governmental requirement pertaining to
health or the environment, and that neither the Property nor any use or activity
thereon violates or is or could be subject to any response, remediation,
clean-up or other obligation under any law or governmental requirement
pertaining to health or the environment including without limitation, a written
report of an environmental assessment of the Property, made within thirty (30)
days prior to the date of this Agreement, by an engineering firm, and of a scope
and in form and content satisfactory to the Bank, complying with the Bank's
established guidelines, showing that there is no evidence of any such substance
which has been generated, treated, stored, released or disposed of in the
Property, and such additional evidence as may be required by the Bank. All
reports, drafts of reports, and recommendations, whether written or oral, from
such engineering firm shall be made available and communicated to the Bank.
14. Soil Reports. The Bank shall have received and approved a soil
------------
composition and test boring report and a foundation report satisfactory to the
Bank regarding the Land, made within thirty (30) days of the date of this
Agreement, by a licensed professional engineer satisfactory to the Bank.
15. Access, Utilities, and Laws. The Bank shall have received and approved
---------------------------
(a) satisfactory evidence that the Property abuts and has fully adequate direct
and free access to one
3
or more public streets, dedicated to public use, fully installed and accepted by
the appropriate governmental authority, that all fees, costs and expenses of the
installation and acceptance thereof have been paid in full, and that there are
no restrictions on the use and enjoyment of such streets which would adversely
affect the Project; (b) letters from the applicable utility companies or
governmental authorities confirming that all utilities necessary for the
Improvements are available at the Land in sufficient capacity, together with
evidence satisfactory to the Bank of paid impact fees, utility reservation
deposits, and connection fees required to assure the availability of such
services; (c) satisfactory evidence that all applicable zoning ordinances,
restrictive covenants and governmental requirements affecting the Property
permit the use for which the Property is intended and have been or will be
complied with without the existence of any variance, non-complying use,
nonconforming use or other special exception and that the Borrower has complied
with the Comprehensive Planning and Land Development Regulation Act, Chapter
163, Florida Statutes; (d) evidence satisfactory to the Bank that the Land and
Improvements comply and will comply with all laws and governmental requirements
regarding subdivision and platting and would so comply if the Land and the
Improvements thereon were conveyed as a separate parcel; (e) a true and correct
copy of a valid building permit for the Improvements, together with all other
consents, licenses, permits and approvals necessary for construction of the
Improvements, all in assignable form (to the extent appropriate) and in full
force and effect; (f) evidence satisfactory to the Bank of compliance by the
Borrower and the Property, and the proposed construction, use and occupancy of
the Improvements, with such other applicable laws and governmental requirements
as the Bank may request, including all laws and governmental requirements
regarding access and facilities for handicapped or disabled persons including,
without limitation and to the extent applicable, Part V of the Florida Building
Construction Standards Act entitled "Florida Americans With Disabilities
Accessibility Implementation Act", Chapter 553, Florida Statutes, The Federal
Architectural Barriers Act (42 U.S.C. (S) 4151 et seq.), The Fair Housing
Amendments Act of 1988 (42 U.S.C. (S) 3601 et seq.), The Americans With
Disabilities Act of 1990 (42 U.S.C. (S) 2101 et seq.), The Rehabilitation Act of
1973 (29 U.S.C. (S) 794), and any applicable state requirements; and (g) written
evidence satisfactory to the Bank that construction of the Improvements on the
Land is permissible under all federal, state and local statutes, regulations and
ruliings protecting tidal and non-tidal wetlands and other environmentally
protected areas.
16. Priority. The Bank shall have received and approved (a) evidence
--------
satisfactory to the Bank that prior to and as of the time the Mortgage was filed
for record (i) no activity or circumstance was visible on or near the Land which
would constitute inception of a mechanic's or materialman's lien against the
Property; (ii) no contract, or memorandum thereof, for construction, design,
surveying, or any other service relating to the Project has been filed for
record in the county where the Property is located; and (iii) no mechanic's or
materialman's lien claim or notice, lis pendens, judgment, or other claim or
encumbrance against the Property has been filed for record in the county where
the Property is located or in any other public record which by law provides
notice of claims or encumbrances regarding the Property; (b) a certificate or
certificates of a reporting service acceptable to the Bank, reflecting the
results of searches made not earlier than ten (10) days prior to the date of
this Agreement, (i) of the central and local Uniform Commercial Code records,
showing no filings against any of the collateral for the Loan or against the
Borrower otherwise except as consented to by the Bank; and (ii) if required by
the
4
Bank, of the appropriate judgment and tax lien records, showing no outstanding
judgment or tax lien against the Borrower or any Guarantor.
17. Bonds. The Bank shall have received and approved (a) a performance bond
-----
for the general contractor in amount, form and content satisfactory to the Bank
and (b) a payment bond for the general contractor, in form and content
satisfactory to the Bank, and if required by the Bank duly recorded before any
construction is commenced. Each bond shall be issued by a corporate surety
acceptable to the Bank and authorized and admitted to do business and to execute
bonds in the state where the Project is located.
18. Taxes and Impact Fees. The Bank shall have received and approved
---------------------
satisfactory evidence (a) of the identity of all taxing authorities and utility
districts (or similar authorities) having jurisdiction over the Property or any
portion thereof; (b) that all taxes, impact fees, water and sewer connection
changes and any other similar charges have been paid, including copies of
receipts or statements marked "paid" by the appropriate authority; and (c) that
the Land is a separate tax lot or lots with separate assessment or assessments
of the Land and Improvements, independent of any other land or improvements and
that the Land is a separate legally subdivided parcel.
19. Other Documents. The Borrower, any Guarantor, and any other person or
---------------
entity, shall have delivered to the Bank, in form and content satisfactory to
the Bank, such other documents and certificates as the Bank may reasonably
request.
5
EXHIBIT D
Estimated Total
Construction Cost
===================================================================================================================================
COST AMOUNT 1 2 3 4 5 6 7
-----------------------------------------------------------------------------------------------------------------------------------
CM Construction $18,900,000 $378,000 $567,000 $ 756,000 $ 945,000 $1,134,000 $1,512,000 $1,890,000
-----------------------------------------------------------------------------------------------------------------------------------
AE Design $ 1,400,000 $280,000 $280,000 $ 280,000 $ 280,000 $ 280,000 $ 0 $ 0
-----------------------------------------------------------------------------------------------------------------------------------
AE Administrative $ 300,000 $ 6,000 $ 9,000 $ 12,000 $ 15,000 $ 18,000 $ 24,000 $ 30,000
-----------------------------------------------------------------------------------------------------------------------------------
RTI Equipment $ 4,000,000 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
-----------------------------------------------------------------------------------------------------------------------------------
RTI Furnishings $ 1,400,000 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
-----------------------------------------------------------------------------------------------------------------------------------
PROJECT TOTAL $26,000,000 $664,000 $856,000 $1,048,000 $1,240,000 $1,432,000 $1,536,000 $1,920,000
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
COST PERCENTAGES/MONTH
-----------------------------------------------------------------------------------------------------------------------------------
CM Construction 100% 2% 3% 4% 5% 6% 8% 10%
-----------------------------------------------------------------------------------------------------------------------------------
AE Design 100% 20% 20% 20% 20% 20% 0% 0%
-----------------------------------------------------------------------------------------------------------------------------------
AE Administrative 100% 2% 3% 4% 5% 6% 8% 10%
-----------------------------------------------------------------------------------------------------------------------------------
RTI Equipment 100% 0% 0% 0% 0% 0% 0% 0%
-----------------------------------------------------------------------------------------------------------------------------------
RTI Furnishings 100% 0% 0% 0% 0% 0% 0% 0%
-----------------------------------------------------------------------------------------------------------------------------------
PROJECT TOTAL 100.0% 2.6% 3.3% 4.0% 4.8% 5.5% 5.9% 7.4%
-----------------------------------------------------------------------------------------------------------------------------------
=============================================================================================================================
COST 8 9 10 11 12 13 14
-----------------------------------------------------------------------------------------------------------------------------
CM Construction $2,268,000 $2,268,000 $1,890,000 $1,512,000 $1,134,000 $ 945,000 $ 756,000
-----------------------------------------------------------------------------------------------------------------------------
AE Design $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0
-----------------------------------------------------------------------------------------------------------------------------
AE Administrative $ 36,000 $ 36,000 $ 30,000 $ 24,000 $ 18,000 $ 15,000 $ 12,000
-----------------------------------------------------------------------------------------------------------------------------
RTI Equipment $ 0 $ 0 $ 0 $ 0 $ 800,000 $ 800,000 $ 800,000
-----------------------------------------------------------------------------------------------------------------------------
RTI Furnishings $ 0 $ 0 $ 0 $ 0 $ 280,000 $ 280,000 $ 280,000
-----------------------------------------------------------------------------------------------------------------------------
PROJECT TOTAL $2,304,000 $2,304,000 $1,920,000 $1,536,000 $2,232,000 $2,040,000 $1,848,000
-----------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
COST PERCENTAGES/MONTH
-----------------------------------------------------------------------------------------------------------------------------
CM Construction 12% 12% 10% 8% 6% 5% 4%
-----------------------------------------------------------------------------------------------------------------------------
AE Design 0% 0% 0% 0% 0% 0% 0%
-----------------------------------------------------------------------------------------------------------------------------
AE Administrative 12% 12% 10% 8% 6% 5% 4%
-----------------------------------------------------------------------------------------------------------------------------
RTI Equipment 0% 0% 0% 0% 20% 20% 20%
-----------------------------------------------------------------------------------------------------------------------------
RTI Furnishings 0% 0% 0% 0% 20% 20% 20%
-----------------------------------------------------------------------------------------------------------------------------
PROJECT TOTAL 8.9% 8.9% 7.4% 5.9% 8.6% 7.8% 7.1%
-----------------------------------------------------------------------------------------------------------------------------
=======================================================================
COST 15 16 Total Prj.
-----------------------------------------------------------------------
CM Construction $ 567,000 $ 378,000 $18,900,000
-----------------------------------------------------------------------
AE Design $ 0 $ 0 $ 1,400,000
-----------------------------------------------------------------------
AE Administrative $ 9,000 $ 6,000 $ 300,000
-----------------------------------------------------------------------
RTI Equipment $ 800,000 $ 800,000 $ 4,000,000
-----------------------------------------------------------------------
RTI Furnishings $ 280,000 $ 280,000 $ 1,400,000
-----------------------------------------------------------------------
PROJECT TOTAL $1,656,000 $1,464,000 $26,000,000
-----------------------------------------------------------------------
-----------------------------------------------------------------------
COST PERCENTAGES/MONTH
-----------------------------------------------------------------------
CM Construction 3% 2% 100%
-----------------------------------------------------------------------
AE Design 0% 0% 100%
-----------------------------------------------------------------------
AE Administrative 3% 2% 100%
-----------------------------------------------------------------------
RTI Equipment 20% 20% 100%
-----------------------------------------------------------------------
RTI Furnishings 20% 20% 100%
-----------------------------------------------------------------------
PROJECT TOTAL 6.4% 5.6% 100.0%
-----------------------------------------------------------------------
EXHIBIT "E"
-----------
ADVANCES
--------
1. Draw Request. A "Draw Request" means a properly completed and executed
------------
written application by the Borrower to the Bank in form approved by the Bank
setting forth the amount of Loan proceeds desired, together with such schedules,
affidavits, releases, waivers, statements, invoices, bills, and other documents,
certificates and information required by the Bank. At least five (5) business
days before the requested date of each advance, the Borrower shall deliver a
Draw Request to the Bank. The Borrower shall be entitled to an advance only in
an amount approved by the Bank in accordance with the terms of this Agreement
and the Loan Documents. The Bank shall not be required to make advances more
frequently than once each calendar month. The Bank shall, only upon the
satisfaction of all applicable conditions of this Agreement and the Loan
Documents, make the requested advance to the Borrower on a business day within
five (5) business days after such satisfaction. Each Draw Request, and the
Borrower's acceptance of any advance, shall be deemed to ratify and confirm
that all representations and warranties in the Loan Documents remain true and
correct as of the date of the Draw Request and the advance, respectively.
2. Advances. The Borrower shall disburse all advances made to the Borrower
--------
for payments of the costs and expenses specified in the Budget for which the
advances were made, and for no other purpose. Following receipt and approval of
a Draw Request, all supporting documentation and information, and receipt and
approval of a written report from the Construction Consultant, the Bank will
determine the amount of the advance it will make in accordance with this
Agreement, the Loan Documents, the Budget, and the following standards:
(a) An initial advance in the amount of the Initial Land Advance will
be made for the acquisition of the Land.
(b) For construction work, advances will be made on the basis of
ninety percent (90%) of the costs shown on the application for payment from
the contractor reviewed and approved by the Bank of the work or material in
place on the Improvements that comply with the terms of the Loan Documents,
less: (i) all previous advances; and (ii) all amounts required to be paid
by the Borrower, as described in the Budget.
(c) Advances will not be made for building materials or furnishings
that are not yet incorporated into the Improvements ("stored materials")
unless the stored materials are in the Borrower's possession and
satisfactorily stored on the Land, or stored in a bonded warehouse in
accordance with the terms hereof, and the aggregate of advances for stored
materials that have not yet been incorporated into the Improvements does
not exceed the Stored Materials Advance Limit.
(d) The Borrower shall comply with the Construction Contract Prompt
Payment Law contained in the Florida Construction Lien Law, Chapter 713,
Florida Statutes, notwithstanding the Bank's failure or delay in funding
any Draw Requests or the
Bank's cessation of funding Draw Requests in accordance with the terms of
this Agreement.
(e) The Borrower hereby authorizes the Bank to provide written notices
to Contractor and lienors providing notices to owner pursuant to Chapter
713, Florida Statutes, and Chapter 713, Florida Statutes, to the extent
such notices are required by law. The Borrower hereby releases the Bank and
waives all claims it may have against the Bank for damages the Borrower may
incur as a result of the Bank's failure to deliver such notices. The
Borrower hereby agrees to provide all required notices to the Contractor
and all lienors providing notices to owner in compliance with Chapter 713,
Florida Statutes, in a timely fashion.
3. Conditions to the First Advance. As conditions precedent to the first
-------------------------------
advance hereunder, the Borrower must have satisfied the conditions required
under this Agreement, including all of those conditions set forth in Exhibit "C"
and Section 4 below.
4. Conditions to All Advances. As conditions precedent to each advance made
--------------------------
pursuant'to a Draw Request, in addition to all other requirements contained in
this Agreement, the Borrower must satisfy the following conditions, and deliver
to the Bank evidence of such satisfaction:
(a) All conditions to the first advance have been and continue to be
satisfied.
(b) The Borrower must have delivered to the Bank a Draw Request.
(c) No Default or any event which, with the giving of notice or the
lapse of time, or both, could become a Default, exists.
(d) The representations and warranties made in the Loan Documents must
be true and correct on and as of the date of each advance and no event
shall have occurred or condition or circumstance shall exist that, if known
to the Borrower, would render any such representation or warranty incorrect
or misleading.
(e) Each subcontract or other contract for labor, materials, services
or other work included in a Draw Request shall have been duly executed and
delivered by all parties thereto and shall be effective, and the Bank shall
have received a true and complete copy of a fully executed copy of each
such subcontract or other contract as the Bank may have requested, together
with performance and payment bonds securing such contracts and
subcontracts, to the extent required by the Bank, in form and substance
satisfactory to the Bank.
(f) No mechanic's or materialmen's lien or other encumbrance shall
have been filed and remain in effect against the Property, and the Borrower
shall have provided a waiver or release of liens from all subcontractors,
materialmen or others who may be entitled to a lien for work performed or
materials furnished, as the case may be, through:
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(i) the date of the immediately preceding draw request in the case of all
draw requests other than the final draw request; and (ii) the date of the
draw request in the case of the final draw request. The Borrower shall in
all events prior to each draw provide the Bank with a release of lien from
the general contractor for all work performed through the date of such draw
request.
(g) The Title Insurance shall have been endorsed and brought to date
in a manner satisfactory to the Bank to increase the coverage by the amount
of each advance through the date of each such advance with no additional
title change or exception not approved by the Bank.
(h) The Bank shall have received written certification by the
Construction Consultant, and if required by the Bank by the Borrower's
architect, that to the best of such party's knowledge, information, and
belief, construction is in accordance with the Plans, the quality of the
work for which the advance is requested is in accordance with the
applicable contract, the amount of the advance requested represents work in
place based on on-site observations and the data compromising the Draw
Request, the work has progressed in accordance with the construction
contract and schedule, and the applicable contractor is entitled to payment
of the amount certified. Such certification may be provided in whole or in
part on AIA Form G 704.
(i) The Bank shall have received (i) a foundation survey made
immediately after, but in no event later than ten (10) days after, the
laying of the foundations of the buildings included in the Improvements
satisfactory to the Bank complying with Exhibit "H" (except to the extent
otherwise acceptable to the Bank), (ii) a certificate of the Borrower's
architect stating that based on persona1 inspection the foundations have
been completed in accordance with the Plans and are satisfactory in all
respects, and (iii) a bearing capacity test report with respect to the
excavated footings and foundations, reviewed and approved by the
Construction Consultant and the Borrower's architect.
(j) The Bank shall have received within ten (10) days after the
pouring of concrete for any Improvements, a report satisfactory to the
Construction Consultant of the results of concrete tests made at the time
the concrete is poured.
(k) The Bank shall have received within ten (10) days after the
compaction of any soil for construction, a report satisfactory to the
Construction Consultant of the results of soil tests.
(1) As of the date of making such advance, no event shall have
occurred, nor shall any condition exist, that could have an adverse effect
on the enforceability of the Loan Documents, be materially adverse to the
financial condition of the Borrower or any Guarantor, impair the ability of
the Borrower or any Guarantor to fulfill its material obligations under the
Loan Documents, or otherwise have any adverse effect whatsoever on the
Property.
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(m) The Improvements shall not have been damaged and not repaired and
shall not be the subject of any pending or threatened condemnation or
adverse zoning proceeding.
(n) The Borrower shall have paid all amounts required to be paid by
the Borrower under the Budget (including, without limitation, all equity
amounts to be paid by the Borrower unless the Bank, in its discretion,
elects to make an advance prior to the Borrower's funding of all required
equity amounts).
(o) The Borrower shall have made the Borrower's Deposit if required by
Section 1.5 of this Agreement.
(p) With respect to any advance to pay a contractor, the Bank shall
have received original applications for payments in form approved by the
Bank, containing a breakdown by trade or other categories acceptable to the
Bank, executed and certified by each contractor and the Borrower's
architect, accompanied by invoices, and approved by the Construction
Consultant.
(q) The Borrower shall have delivered to the Bank an Owner's Affidavit
certifying that the funds disbursed to date by the Bank have been paid to
the appropriate parties.
(r) The Borrower shall have submitted copies of notarized partial lien
waiver forms executed by each contractor and each appropriate
subcontractor, supplier and materialman, including, without limitation,
from all parties sending statutory notices to contractors, notices to
owners, or notices of nonpayment, specifgring in such partial lien waivers
the amount paid in consideration of such partial releases.
(s) The Borrower shall have delivered to the Bank such other
information, documents and supplemental legal opinions as may be required
by the Bank.
5. Final Advance for Improvements. The final advance for the Improvements
------------------------------
(including retainage) shall not be made until thirty (30) days after the later
of the date on which the Improvements have been "completed," as defined by
applicable state law, or if required by the Bank, the date on which an affidavit
of completion has been recorded. In the case of each such Draw Request, the Bank
shall have received the following as additional conditions precedent to the
requested advance:
(a) Certificates from the Borrower's architect, engineer, contractor
(Certificate of Substantial Completion) and, if required by the Bank, from
the Construction Consultant, certifying that the Improvements (including
any off-site improvements) have been completed in accordance with, and as
completed comply with, the Plans and all laws and governmental
requirements; and the Bank shall have received two (2) sets of detailed "as
built" Plans approved in writing by the Borrower, the Borrower's architect,
and each contractor.
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(b) Final affidavits (in a form approved by the Bank) from the
Borrower's architect, engineer, and each contractor certifying that each of
them and their subcontractors, laborers, and materialmen has been paid in
full for all labor and materials for construction of the Improvements; and
final lien releases or waivers (in a form approved by the Bank) by the
Borrower's architect, engineer, contractor, and all subcontractors,
materialmen, and other parties who have supplied labor, materials, or
services for the construction of the Improvements, or who otherwise might
be entitled to claim a contractual, statutory or constitutional lien
against the Property.
(c) An endorsement to the Title Insurance removing any exception for
mechanics' or materialmen's liens or pending disbursements, with no
additional title change or exception objectionable to the Bank, and with
such other endorsements required by the Bank.
(d) Evidence satisfactory to the Bank that all laws and governmental
requirements have been satisfied, including receipt by the Borrower of all
necessary governmental licenses, certificates and permits (including
certificates of occupancy) with respect to the completion, use, occupancy
and operation of the Improvements, together with evidence satisfactory to
the Bank that all such licenses, certificates, and permits are in full
force and effect and have not been revoked, canceled or modified.
(e) AIA standard form Release of Surety
(f) Three (3) copies of a final as-built survey satisfactory to the
Bank complying with Exhibit "H" (except to the extent otherwise acceptable
to the Bank).
6. Direct Advances. The Borrower hereby irrevocably authorizes the Bank
---------------
(but the Bank shall have no obligation) to (i) advance Loan funds directly to
itself to pay interest due on the Loan; and (ii) advance and directly apply the
proceeds of any advance to the satisfaction of any of the Borrower's obligations
under any of the Loan Documents, even though the Borrower did not include that
amount in a Draw Request or no Default exists. Each such direct advance (except
for application of the Borrower's Deposit) shall be added to the outstanding
principal balance of the Loan and shall be secured by the Loan Documents. Unless
the Borrower pays such interest from other resources, the Bank may advance Loan
funds pursuant to this Section for interest payments as and when due. Nothing
contained in this Agreement shall be construed to permit the Borrower to defer
payment of interest on the Loan beyond the date(s) due. The allocation of Loan
funds in the Budget for interest shall not affect the Borrower's absolute
obligation to pay the same in accordance with the Loan Documents. The Bank may
hold, use, disburse and apply the Loan and the Borrower's Deposit for payment of
any obligation of the Borrower under the Loan Documents. The Borrower hereby
assigns and pledges the proceeds of the Loan and any Borrower's Deposit to the
Bank for such purposes. The Bank may advance and incur such expenses as the Bank
deems necessary for the completion of the Improvements and to preserve the
Property and any other security for the Loan, and such expenses, even though in
excess of the amount of the Loan, shall be secured by the Loan Documents and
shall be payable
5
to the Bank on demand. The Bank may disburse any portion of any advance at any
time, and from time to time, to persons other than the Borrower for the purposes
specified in this Section and the amount of advances to which the Borrower
shall thereafier be entitled shall be correspondingly reduced.
7. Conditions and Waivers. All conditions precedent to the obligation of
----------------------
the Bank to make any advance are imposed hereby solely for the benefit of the
Bank, and no other party may require satisfaction of any such condition
precedent or be entitled to assume that the Bank will refuse to make any advance
in the absence of strict compliance with such conditions precedent. Any
requirement of this Agreement may be waived, in whole or in part, in a specific
written waiver intended for that purpose and signed by the Bank. The Bank shall
have the right to approve and verify the periodic progress, costs incurred by
the Borrower, and the estimated costs remaining to be incurred, after
consultation with the Construction Consultant. No advance shall constitute an
approval or acceptance by the Bank of any construction work, or a waiver of any
condition precedent to any further advance, or preclude the Bank from thereafter
declaring the failure of the Borrower to satisfy such condition precedent to be
a Default. No waiver by the Bank of any condition precedent or obligation shall
preclude the Bank from requiring such condition or obligation to be met prior to
making any other advance or from thereafter declaring the failure to satisfy
such condition or obligation to be a Default.
8. Funding. Borrower shall establish and maintain a special account with
-------
the Bank into which advances funded directly to the Borrower (but no other
funds), and excluding direct disbursements made to or by the Bank pursuant to
this Agreement, shall be deposited by the Borrower, and against which checks
shall be drawn only for the payment of costs specified in the Budget, but which
special account shall not be used for any other purpose. The Borrower hereby
irrevocably authorizes the Bank to deposit each advance requested by the
Borrower to the credit of the Borrower in that account, by wire transfer or
other deposit. Advances may also be made, in addition to other methods
contemplated herein, at the Bank's option, by direct or joint check payment to
any or all persons entitled to payment for work or services performed or
material furnished in connection with the Project or the Loan, or by having the
proceeds thereof made available to the Title Insurer (or its agent) for
disbursement. The Bank shall not be required to, and has no responsibility to,
supervise the proper application or distribution of funds to third parties.
9. Maximum Loan Amounts. The aggregate outstanding principal amount of the
--------------------
Note shall not in any event exceed 75% of the Appraised Value of the Project.
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EXHIBIT "F"
LEASING AND TENANT MATTERS
The Borrower and the Bank agree as follows:
1. Approved Leases. The Borrower shall not enter into any tenant lease of
---------------
space in the Improvements unless the leasing terms have been approved by the
Bank prior to execution. The Borrower's standard form of tenant lease, and any
revisions thereto, must have the prior written approval of the Bank. The
Borrower shall provide to the Bank, upon request, a correct and complete copy of
each tenant lease, including any exhibits, and each guarantee thereof (if any),
prior to execution unless the lease in question meets the foregoing requirements
for "deemed" approval by the Bank. The Borrower shall, throughout the term of
this Agreement, pay all reasonable costs incurred by the Bank in connection with
the Bank's review and approval of tenant leases and each guarantee thereof (if
any), including reasonable attorneys' fees and costs.
2. Effect of Lease Approval. No approval of any lease by the Bank shall be
------------------------
for any purpose other than to protect the Bank's security and to preserve the
Bank's rights under the Loan Documents. No approval by the Bank shall result in
a waiver of any default of the Borrower. In no event shall any approval by the
Bank of a lease be a representation of any kind, with regard to the lease or its
adequacy or enforceability, or the financial capacity of any tenant or
guarantor.
3. Income from the Property. The Borrower shall first apply all income from
------------------------
leases, and all other income derived from the Property, to pay costs and
expenses associated with the ownership, maintenance, development, operating, and
marketing of the Land and Improvements, including all amounts then required to
be paid under the Loan Documents, before using or applying such income for any
other purpose.
EXHIBIT "G"
PLANS AND SPECIFICATIONS
EXHIBIT "H"
SURVEY REQUIREMENTS
-------------------
1. Field Note Description. The Survey shall contain a certified metes and
----------------------
bounds description complying with the following: (a) the beginning point shall
be established by a monument located at the beginning point, or by reference to
a nearby monument; (b) the sides of the Land shall be described by giving the
distances and bearings of each; (c) the distances, bearings, and angles shall be
taken from an instrument survey by a registered professional engineer or
registered professional land surveyor; (d) curved sides shall be described by
data including: length of arc, central angle, radius of circle for the arc and
chord distance, and bearing; (e) the description shall be a single perimeter
description of the entire Land, if and as instructed, there shall also be a
separate metes and bounds description of one or more constituent tracts out of
the Land; (f) the description shall include a reference to all streets, alleys,
and other rights-of-way that abut the Land, and the width of all rights-of-way
mentioned shall be given the first time these rights-of-way are referred to; (g)
for each boundary line abutting a street, road, alley or other means of access,
the description must, in calling the boundary line, state that the boundary line
and the right-of-way line are the same; (h) if the Land has been recorded on a
map or plat as part of an abstract or subdivision, reference to such recording
data shall be made; and (i) the total acreage and square footage of the Land
shall be certified.
2. Lot and Block Description. If the Land consists of one or more complete
-------------------------
lots or blocks included within a properly established recorded subdivision or
addition, then a lot and block description will be an acceptable substitute for
a metes and bounds description, provided that the lot and block description must
completely and properly identify the name or designation of the recorded
subdivision or addition and give the recording information therefor.
3. Map or Plat. The Survey shall also contain a certified map or plat
-----------
clearly showing the following: (a) the Land; (b) the relation of the point of
beginning of the Land to the monument from which it is fixed; (c) all easements,
streets, roads, alleys and rights-of-way on or abutting the Land, showing
recording information therefor by volume and page; (d) if the Land has been
recorded on a map or plat as part of an abstract or subdivision, all survey
lines must be shown, and all lot and block lines (with distances and bearings)
and numbers, must be shown; (e) the established building setback lines, if any,
including those by restrictive covenant, recorded plat and zoning ordinance
(identifying the source in each case, by volume and page reference if
applicable; (f) all easements appurtenant to such Land, with recording
information by volume and page; (g) the boundary lines of the street or streets
abutting the Land and the width of such streets and the width of the rights-of-
way therefor; (h) the distance from the nearest intersecting street or road to
the Land; (i) all structures and improvements on the Land (with designation and
dimensions thereof and of each party wall, if any) with horizontal lengths of
all sides and the relation thereof
by distances to (1) all boundary lines of the Land, (2) easements, (3)
established building lines, and (4) street lines; (j) the types of materials
comprising the exterior walls and roofs of all buildings; (k) all street
addresses of improvements on the Land; (1) all curb cuts, driveways, fences,
sidewalks, xxxxxx and landscaping; (m) the number of stories of all multi-story
structures; (n) the location, type and size of all utility lines as they service
the Land and Improvements (sewer, water, gas, electric and telephone); (o) all
encroachments and protrusions, if any, from or upon the Land or any improvements
thereon or upon any easement, building setback line or other restricted area,
with exact measurements; (p) all parking and paved areas, including the number
of vehicles that may be parked; (q) all distances, angles and other calls
contained in the legal description; (r) the location, type and size of all
monuments, and as to each monument, indication whether it was found or placed by
the surveyor; (s) the boundaries of any flood hazard area or flood plain area in
which any part of the Land lies, with the map number date and source
(governmental authority) of each flood map shown; (t) all surface water bodies
or courses; (u) the date of any revisions subsequent to the initial survey
prepared pursuant to these requirements; (v) a legend explaining the meaning of
all symbols used on the plat; and (w) the scale of all distances and dimensions
on the plat.
4. Certification. The certification for the property description and the
-------------
map or plat shall be addressed to the Bank, the Borrower and the Title Insurer,
signed by the surveyor (a registered professional land surveyor or registered
professional engineer), bearing current date, registration number, and seal, and
shall be in the following form or its substantial equivalent:
This is to certify to the Bank, the Borrower and Title Insurer that this
map or plat and the survey on which it is based were made in accordance with
"Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys" jointly
established and adopted by ALTA and ACSM in 1997, and pursuant to the Accuracy
Standards (as adopted by ALTA and ACSM) of an Urban Survey. The undersigned
further certifies to the Bank, the Borrower and the Title Insurer that (a) this
survey is true and correct and was made on the ground under my supervision as
per the field notes shown hereon and correctly shows the boundary lines and
dimensions and area of the land indicated hereon and each individual parcel
thereof indicated hereon; (b) all monuments shown hereon actually exist, and the
location, size and type of such monuments are correctly shown; (c) the subject
Property described in this survey is the same land as described in the title
commitment described below; (d) this survey and the information, courses and
distances shown on the survey are correct; (e) this survey correctly shows the
size, location and type of all buildings, structures, other improvements and
visible items on the subject Property and that all buildings and improvements
are within the boundary lines and applicable set back lines of the subject
Property; (f) this survey correctly shows the location and dimensions of all
alleys, streets, roads, rights-of-way, easements, building setback lines and
other matters of record of which the undersigned has been advised affecting the
subject Property according to the legal description in such easements and other
matters (with instrument, book, and page number indicated); (g) there are no
violations of zoning ordinances, restrictions or other rules and regulations
with reference to the location of the buildings and improvements: (h) except as
shown, there are no visible (1) improvements, easements, rights-of-way, party
walls, drainage ditches, streams, uses, discrepancies or conflicts, (2) party
walls or encroachments onto adjoining premises, streets, or alleys by any of
such buildings, structures, or other improvements, (3) encroachments onto the
2
subject Property by buildings, structures, or other improvements on adjoining
premises, or (4) encroachments on any easement, building setback line or other
restricted area by any buildings, structures or other improvements on the
subject Property; (i) the distance from the nearest intersecting street or road
is as shown hereon; (j) the subject Property abuts a dedicated public street or
road as shown hereon; (k) all utility services required for the operation of the
subject Property either enter the subject Property through adjoining public
streets, or this survey shows the point of entry and location of any utilities
that pass through or are located on the adjoining premises; (1) any discharge
into streams, rivers or other conveyance system is shown on this survey; (m) if
the subject Property consists of two or more parcels having common boundaries,
those parcels are contiguous along the common boundaries; (n) except as shown,
no part of the Property is located in a 100-year Flood Plain, or in an
identified "flood prone area," as defined pursuant to the Flood Disaster
----------------
Protection Act of 1973, as amended, as reflected by Flood Insurance Rate Map
Panel # _______________ dated _______________, which such map panel covers the
area in which the Property is situated and this survey correctly indicates the
zone designation of any area as being in the 100-year Flood Plain or
"flood prone area"; (o) no portion of the subject Property lies within a
----------------
delineated wetlands area under federal, state or local law or policy; (p)
[except as shown on this survey], the subject Property does not serve any
adjoining premises for drainage, utilities, or ingress or egress; (q) the record
description of the subject Property forms a mathematically closed figure; and
(r) the subject Property has a tax map designation separate and distinct from
that of any other premises and the subject Property is a separate, legally
subdivided parcel. The undersigned has received and examined a copy of the Title
Insurance Commitment No. _____________ issued by the Title Insurer for the
Property as well as a copy of each instrument listed therein, and the location
of any matter shown thereon, to the extent it can be located, has been shown on
this survey.
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