LOAN AGREEMENT
Between
TRANSEASTERN PEMBROKE VILLAGES, INC.
and
AMRESCO FUNDING CORPORATION
Dated: , 1996
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS............................................................2
Section 1.1 Definitions....................................2
Section 1.2 Other Definitional Provisions.................21
ARTICLE II
AMOUNT AND TERMS OF LOAN AND CHASE FEDERAL LOANS......................22
Section 2.1 Terms of Loan.................................22
Section 2.2 Terms of Chase Federal Loans..................23
Section 2.3 Terms of Note.................................24
Section 2.4 Application of Funds..........................24
Section 2.5 Tracts C and E Acquisition Loan
and Construction Loan.........................24
Section 2.6 Prepayment of Loan............................25
Section 2.7 [INTENTIONALLY DELETED].......................25
Section 2.8 Intent Not to Commit Usury....................25
Section 2.9 Determination of Net Profit...................25
Section 2.10 Application of Net Sales Proceeds.............25
Section 2.11 Distributions.................................26
ARTICLE III
SALE OF REAL PROPERTY; APPLICATION OF PROCEEDS........................26
Section 3.1 Partial Releases..............................26
Section 3.2 Sales of Tracts or Units on the
Real Property.................................27
Section 3.3 Borrower's First Priority Return..............30
Section 3.4 First Contingent Return.......................31
Section 3.5 Borrower's Second Priority Return.............31
Section 3.6 Second Contingent Return......................31
Section 3.7 Intent of Lender..............................31
ARTICLE IV
SECURITY AND GUARANTY FOR PAYMENT OF THE LOAN.........................33
Section 4.1 Mortgage......................................33
Section 4.2 Security Agreement............................33
Section 4.3 Assignment of Leases, Rents and Profits.......34
Section 4.4 Collateral Assignment of Agreements
Affecting Real Estate.........................34
Section 4.5 Pledge Agreements and Stock Certificates......34
Section 4.14 Mortgagor's Affidavit.........................34
Section 4.15 Guaranty......................................34
Section 4.16 Funding Agreement.............................35
Section 4.17 Environmental Indemnity Agreement.............35
Section 4.18 [INTENTIONALLY DELETED].......................35
Section 4.19 Security Documents............................35
Section 4.20 Filing and Recording..........................35
ARTICLE V
SECURITY AND GUARANTY FOR
PAYMENT OF THE CONTINGENT RETURNS.....................................36
Section 5.1 Contingent Return Mortgage....................36
Section 5.2 Collateral Assignment of Agreements
Affecting Real Estate.........................36
Section 5.3 Pledge Agreements and Stock Certificates......36
Section 5.4 Assignment of Leases, Rents and Profits.......37
ARTICLE VI
DEBTOR PARTIES' REPRESENTATIONS AND WARRANTIES........................37
Section 6.1 Organization and Standing.....................37
Section 6.2 Capitalization................................37
Section 6.3 Power and Authority...........................38
Section 6.4 Valid and Binding Obligation..................38
Section 6.5 No Legal Bar..................................39
Section 6.6 Title to Collateral...........................39
Section 6.7 Financial Statements and Other
Information...................................39
Section 6.8 Litigation....................................40
Section 6.9 Investment Company Act........................40
Section 6.10 Federal Regulation............................40
Section 6.11 Disclosure....................................41
Section 6.12 Brokerage.....................................41
Section 6.13 Taxes.........................................41
Section 6.14 ERISA.........................................42
Section 6.15 Liabilities to Employees and Officers.........43
Section 6.16 Subsidiaries..................................43
Section 6.17 Environmental Contamination/Hazardous
Material......................................43
Section 6.19 Condition of Mortgaged Property...............44
Section 6.20 Utilities.....................................44
Section 6.21 Budget for Acquisition Contract
Development Work..............................45
Section 6.22 Zoning and Land Use...........................45
Section 6.23 Permits and Licenses..........................45
Section 6.24 [Intentionally Delete]........................45
Section 6.25 No Defaults...................................45
Section 6.26 Facilities For Handicapped....................45
Section 6.27 Other Agreements..............................46
Section 6.28 Chase Federal Loan Documents..................46
Section 6.29 Representations and Warranties in
Other Loan Documents..........................46
Section 6.30 Reliance on Representations...................46
ARTICLE VII
CONDITIONS PRECEDENT..................................................47
Section 7.1 Correctness of Warranties.....................47
Section 7.2 Opinion of Counsel............................47
Section 7.3 Entity Documents..............................47
Section 7.4 Certified Resolutions and Incumbency..........47
Section 7.5 Loan Documents................................48
Section 7.6 Mortgagee Title Insurance Policy..............48
Section 7.7 Chase Federal Loan Documents..................48
Section 7.8 Equity Contribution...........................49
Section 7.9 Stock Certificates and Stock Powers...........49
Section 7.10 Acquisition Contract, Option Contract
and Tract B Sales Contract....................49
Section 7.11 Soils Test....................................49
Section 7.12 [INTENTIONALLY DELETED].......................49
Section 7.13 Copies of Permits, Licenses and
Approvals.....................................49
Section 7.14 Availability of Utilities.....................50
Section 7.15 Plans and Specifications......................50
Section 7.16 Construction Contract.........................50
Section 7.17 Approvals of Governmental Authorities.........50
Section 7.18 Compliance with Governmental
Requirements..................................50
Section 7.19 Certificates from General Contractor
and Engineer..................................51
Section 7.20 Cost Breakdown................................51
Section 7.21 Flood Hazard Area.............................51
Section 7.22 Survey........................................51
Section 7.23 Tri-Party Agreement...........................51
Section 7.24 No Moratorium.................................51
Section 7.25 Insurance.....................................52
Section 7.26 Subordination to the Loan.....................52
Section 7.27 Additional Documents and Instruments..........52
ARTICLE VIII
DEBTOR PARTIES' AFFIRMATIVE COVENANTS.................................52
Section 8.1 Existence and Qualification...................52
Section 8.2 Financial Statements and Information..........53
Section 8.3 [Intentionally Deleted].......................55
Section 8.4 Taxes and Claims..............................55
Section 8.5 Insurance.....................................56
Section 8.6 Sales.........................................58
Section 8.7 Books and Reserves............................58
Section 8.8 Inspection by Lender..........................58
Section 8.9 Location of Collateral........................59
Section 8.10 Pay Indebtedness to the Lender and
Perform Other Covenants.......................59
Section 8.11 Litigation....................................59
Section 8.12 Defaults or Assessments.......................60
Section 8.13 Employee Benefit Plans........................60
Section 8.14 Subordination of Indebtedness.................60
Section 8.15 Correspondence with Accountants...............60
Section 8.16 Estoppel Affidavits...........................61
Section 8.17 Change of Name, Principal Place of
Business, Etc.................................61
Section 8.18 Environmental Laws............................61
Section 8.19 Compliance with Laws..........................62
Section 8.20 Purchase of Materials and Supplies............62
Section 8.21 Indemnification...............................62
Section 8.22 Solvency......................................63
Section 8.23 Separate Accounts.............................63
ARTICLE IX
BORROWER'S NEGATIVE COVENANTS.........................................64
Section 9.1 Type of Business..............................64
Section 9.2 Mortgages, Liens, Etc.........................64
Section 9.3 Covenant to Subordinate.......................65
Section 9.4 Indebtedness..................................65
Section 9.5 Loans, Investments and Guarantees.............66
Section 9.6 Merger, Sale of Assets, Dissolution,Etc.......67
Section 9.7 Transfer of Ownership Interest in
Borrower and Mortgaged Property...............67
Section 9.8 Distributions; Restricted Payments............68
Section 9.9 Transactions with Affiliates..................68
Section 9.10 Issuance or Disposition of Capital
Securities....................................68
Section 9.11 Change in Documents...........................68
Section 9.12 Change of Fiscal Year, Etc....................69
Section 9.13 Covenant Not to Compete.......................69
Section 9.14 Purchase Agreements...........................70
ARTICLE X
EVENTS OF DEFAULT.....................................................70
Section 10.1 Immediate Acceleration........................71
Section 10.2 Discretionary Acceleration....................72
Section 10.3 Waiver of Default.............................74
ARTICLE XI
REMEDIES FOR DEFAULT..................................................74
Section 11.1 Action for Enforcement........................74
Section 11.2 Rights and Remedies Cumulative................75
Section 11.3 Rights and Remedies Not Waived................75
ARTICLE XII
FEES AND PAYMENTS.....................................................75
Section 12.1 Commitment Fee................................75
Section 12.2 Expense Deposit...............................76
Section 12.3 Costs, Taxes and Attorneys' Fees..............76
ARTICLE XIII
MISCELLANEOUS.........................................................78
Section 13.1 Notices.......................................78
Section 13.2 Further Assurances............................79
Section 13.3 Survival of Representations and
Warranties....................................80
Section 13.4 Attorneys' Fees...............................80
Section 13.5 Approved Form.................................80
Section 13.6 Severability..................................81
Section 13.7 Counterparts..................................81
Section 13.8 Interpretation................................81
Section 13.9 Conflict......................................81
Section 13.10 Headings......................................82
Section 13.11 Jurisdiction and Venue........................82
Section 13.12 Amendments....................................82
Section 13.13 Waivers.......................................82
Section 13.14 Publicity.....................................83
Section 13.15 Development Consultant........................83
Section 13.16 Governing Law; Benefit........................84
Section 13.17 Reproduction of Documents.....................84
Section 13.18 Absence of Control............................84
Section 13.19 Governmental Regulations of the Lender........85
Section 13.20 Accrual of Interest Under the Note............85
Section 13.21 WAIVER OF CONSEQUENTIAL DAMAGES...............85
Section 13.22 ENTIRE AGREEMENT..............................85
Section 13.23 WAIVER OF JURY TRIAL..........................85
LOAN AGREEMENT
THIS LOAN AGREEMENT made this 29th day of March, 1996 by and
between TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida corporation (the
"BORROWER") and AMRESCO FUNDING CORPORATION, a Delaware corporation, (the
"LENDER").
PRELIMINARY STATEMENTS:
WHEREAS, pursuant to that certain commitment letter dated March
15, 1996 (the "Commitment Letter"), Lender has agreed to loan and the Borrower
has agreed to borrow a sum not to exceed THREE MILLION DOLLARS
($3,000,000.00)(the "Loan"), the proceeds of which shall be used by the Borrower
for the (i) acquisition of Tracts B, D and F of the Real Property, as
hereinafter defined and (ii) funding of interest due on the Loan, all in
accordance with the terms and conditions set forth in the Loan Documents, as
hereinafter defined; and
WHEREAS, simultaneously herewith, Chase Federal Bank, a federal
savings bank ("Chase Federal") has made a loan to the Borrower in the principal
amount of TEN MILLION ONE HUNDRED FIFTY THOUSAND and no/100 DOLLARS
($10,150,000.00) and has issued letters of credit on behalf of the Borrower in
an aggregate amount of THREE MILLION, FIVE HUNDRED EIGHTY FIVE THOUSAND, FIVE
HUNDRED NINETY- THREE AND 78/100 DOLLARS ($3,585,593.78)(the "CHASE FEDERAL A&D
LOAN"), the proceeds of which shall be used by the Borrower for (i) the
acquisition of Tracts B, D and F of the Real Property, (ii) the Acquisition
Contract Development Work, as hereinafter defined, and (iii) the Chase Federal
Letters of Credit, as hereinafter defined, all in accordance with the terms and
conditions set forth in the Chase Federal Loan Documents, as hereinafter
defined; and
WHEREAS, Chase Federal has indicated its willingness to make a
loan to the Borrower in an amount equal to eighty percent (80%) of the cost of
the Tract Infrastructure Work, as hereinafter defined (the "Chase Federal Tract
Loan"), the proceeds of which shall be used by the Borrower for the Tract
Infrastructure Work, all in accordance with the terms and conditions to be set
forth in the Chase Federal Tract Loan Documents, as hereinafter defined; and
WHEREAS, simultaneously herewith, the Borrower has agreed to pay
to Lender certain Contingent Returns, as hereinafter defined, in accordance with
the terms of Article III hereof; and
WHEREAS, the Lender is willing to make the Loan on the terms and
conditions and on the security hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises,
conditions, representations and warranties hereinafter set forth and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS
As used in this Loan Agreement, the Exhibits and Schedules
attached hereto, if any, and any Loan Document executed incidental thereto, the
following terms shall have the following meanings unless the context otherwise
requires:
"ACQUISITION CONTRACT" shall mean that certain Agreement of
Purchase and Sale dated August 14, 1995, by and between Transeastern and
SarahPark Development Corporation ("SarahPark"), as amended on December 13,
1995.
"ACQUISITION CONTRACT DEVELOPMENT WORK" shall mean the work
specified in Exhibit D to the Acquisition Contract, pertaining to all Tracts
within the boundary plat commonly referred to as the "Nasher Plat", which shall
not include the Tract Infrastructure Work, as incorporated into a business plan
and budget acceptable to Lender.
"AFFILIATE" shall mean, with respect to any Person, a Commonly
Controlled Entity, any other Person which controls (directly or indirectly) the
Person in question, or any other Person which is (directly or indirectly)
controlled by or under common control with the Person in question. For the
purpose of this definition, "control" of a Person shall mean the possession,
directly or indirectly, or the power to direct or cause the direction of its
management or policies, whether through the ownership of voting securities, by
contract or otherwise.
"AGREEMENT" shall mean this Loan Agreement, as the same may be
amended, supplemented or otherwise modified from time to time by an agreement in
writing signed by the Borrower, the Guarantor and the Lender.
"AMRESCO UNIT RELEASE PRICE" shall mean the release price(s) to
be specified by Lender.
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"BORROWER'S FIRST PRIORITY RETURN" shall mean an amount to be
paid from Net Sales Proceeds in connection with residences constructed on Tracts
D and F of the Real Property, and Tract E of the Real Property to the extent the
same is acquired by the Borrower, equal to 2% of gross sales proceeds for each
such residence, provided that (a) such return shall not be greater than
$30,000.00 in a given calendar month (and amounts payable but for this limit
shall not accrue), and (b) the aggregate of all amounts paid to the Borrower in
respect of the Borrower's First Priority Return shall not exceed an amount equal
to 4% of the sum of (x) development costs for the Tract Infrastructure
Development Work in connection with Tracts D and F of the Real Property, and
Tract E of the Real Property to the extent the same is acquired by the Borrower,
and (y) the costs of construction of improvements on Tracts D and F of the Real
Property, and Tract E of the Real Property to the extent the same is acquired by
the Borrower. Notwithstanding anything to the contrary contained herein, the
payment of the Borrower's First Priority Return shall be strictly conditioned
upon there not existing at the time that the same would otherwise be paid, a
default or event of default pursuant to the Loan Documents, or any event or
circumstance which with the passing of time or the giving of notice, or both,
would be a default or event of default pursuant to the Loan Documents (for the
purposes of this Agreement terms that refer to Borrower's costs of construction
or such similar terms or references shall refer to the actual amounts that are
billed and paid by Borrower to subcontractors/contractors to furnish labor and
materials to the Project and shall not include any Borrower overhead or
xxxx-up).
"BORROWER'S SECOND PRIORITY RETURN" shall mean (a) an amount
equal to 4% of the sum of (x) development costs for the Tract Infrastructure in
connection with Tracts D and F, and Tract E to the extent the same is acquired
by the Borrower, and (y) the costs of construction of improvements on Tracts D
and F, and Tract E to the extent the same is acquired by the Borrower; reduced
by (b) the amount of the Borrower's First Priority Return which has been paid to
the Borrower. Notwithstanding anything to the contrary contained herein, the
payment of the Borrower's Second Priority Return shall be strictly conditioned
upon there not existing at the time that the same would otherwise be paid, a
default or event of default pursuant to the Loan Documents, or any event or
circumstance which with the passing of time or the giving of notice, or both,
would be a default or event of default pursuant to the Loan Documents.
"BUDGET" shall mean that certain semi-annual budget to be
prepared by Borrower twice annually and submitted to Lender for Lender's review
and approval in accordance with the terms of Section 8.2 hereof.
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"BUSINESS DAY" shall mean a day other than Saturday, Sunday or
other day on which commercial banks in Broward County, Florida are authorized or
required by law to close.
"CAPITAL SECURITY" shall mean, (i) with respect to any Person
that is a corporation, any share of capital stock of such Person or any security
convertible into, or any option, warrant or other right to acquire, any share of
capital stock of such Person and (ii) with respect to any Person that is a
partnership, any partnership or other ownership interest in such Person or any
security convertible into, or any option, warrant or other right to acquire, any
partnership or other ownership interest in such Person.
"CASH FLOW" shall mean Gross Revenue minus Project Expenses.
"CHASE FEDERAL" shall mean Chase Federal Bank, a federal savings
bank.
"CHASE FEDERAL A&D LOAN" shall mean the credit facility described
in the second paragraph of the Preliminary Statements and in Section 2.2 hereof.
"CHASE FEDERAL LETTER(S) OF CREDIT" means those certain letters
of credit in an aggregate amount equal to $3,585,593.78 issued by Chase Federal
to applicable governmental authorities to insure completion of certain
infrastructure improvements on the Property.
"CHASE FEDERAL LOAN DOCUMENTS" shall mean (i) the Chase Federal
Note, the Chase Federal Mortgage and all other documents executed by Borrower to
Chase Federal evidencing and securing the Chase Federal A&D Loan, (ii) the Chase
Federal Tract Loan Documents, and (iii) all documents executed and delivered by
Borrower to Chase Federal evidencing and securing the Construction Loan, to the
extent the Construction Loan is provided by Chase Federal and the documents are
approved as to form and substance by Lender in writing.
"CHASE FEDERAL LOANS", collectively, shall mean the Chase Federal
A&D Loan, the proposed Chase Federal Tto Chase Federal encumbering the Property
which secures (i) the indebtedness evidenced by the Chase Federal Note, (ii)
sums disbursed under the
4
Chase Federal Letters of Credit, and (iii) the Borrower's obligations under the
other Chase Federal Loan Documents.
"CHASE FEDERAL NOTE" shall mean that certain promissory note of
even date herewith from Borrower to Chase Federal evidencing the indebtedness to
Chase Federal under the Chase Federal A&D Loan in the original principal amount
of TEN MILLION ONE HUNDRED FIFTY THOUSAND and no/100 DOLLARS ($10,150,000.00)
together with any reimbursement obligations in connection with the Chase Federal
Letters of Credit.
"CHASE FEDERAL SECURED SUM" means (i) the outstanding principal
balance under the Chase Federal A&D Loan but in no event greater than
$10,150,000.00, (ii) the outstanding principal balance under the Chase Federal
Tract Loan but in no event greater than $2,600,000.00, provided the same is
approved by Lender in writing (iii) all accrued and unpaid interest under the
Chase Federal Loans, (iv) all sums advanced by Chase Federal to prevent
impairment of the collateral secured by the Chase Federal Loan Documents; and
(v) all sums advanced by Chase Federal in the event the Chase Federal Letter(s)
of Credit are drawn upon but in no event greater that $3,585,593.78.
"CHASE FEDERAL TRACT LOAN" shall mean the credit facility
described in the third paragraph of the Preliminary Statements and in Section
2.2 hereof.
"CHASE FEDERAL TRACT LOAN DOCUMENTS" shall mean all documents to
be executed and delivered by Borrower to Lender evidencing and securing the
proposed Chase Federal Tract Loan, provided such documents are approved as to
form and substance by Lender in writing.
"CHASE FEDERAL UNIT RELEASE PRICE" shall mean the sum of money to
be paid to Chase Federal in connection with the sale of a residence and the
release of the Chase Federal Loan Documents from such residence, which amount
shall be established upon execution of the construction loan documentation.
"CONSTRUCTION LOAN" means that certain loan to be obtained by the
Borrower to finance the construction of certain improvements on Tracts C and E
of the Real Property in accordance with the terms of Section 2.5 of this
Agreement.
"CLOSING" shall mean the consummation of the making of the
Loan.
"CLOSING DATE" shall mean the date on which the Closing takes
place.
5
"CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and applicable regulations of the Department of Treasury
(including applicable final regulations, temporary regulations and proposed
regulations), the applicable rulings of the Internal Revenue Service (including
published Revenue Rulings and private letter rulings) and applicable court
decisions.
"COLLATERAL" shall mean at the time in question, all real and all
tangible and intangible personal property in which a Lien has been created
pursuant to any of the Loan Documents including, without limitation, the
Pledge), all Real Property and Personal Property.
"COLLATERAL ASSIGNMENTS" shall mean all of those certain
assignments, in form and substance satisfactory to the Lender, from the Borrower
which are being delivered, or in the future may be delivered, to the Lender
pursuant to Section 4 hereof.
"COMMITMENT LETTER" shall have the meaning specified in the
second paragraph of the Preliminary Statements.
"COMMONLY CONTROLLED ENTITY" shall mean, with respect to any
Person, an entity, whether or not incorporated, which is under common control
with such Person within the meaning of Subsections 414(b) or (c) of the Code.
"CONSISTENT BASIS" shall mean, in reference to the application of
Generally Accepted Accounting Principles, that the accounting principles
observed in the current period are comparable in all material respects to those
applied in the preceding period.
"CONSTRUCTION CONTRACT" shall mean that certain construction
contract between SarahPark and the General Contractor in connection with the
Acquisition Contract Development Work and the Tract Infrastructure Work, which
shall be assumed by the Borrower on or before the Closing Date.
"CONTINGENT OBLIGATION" as to any Person shall mean the undrawn
face amount of all letters of credit issued for the account of such Person and
shall mean any obligation of such Person guaranteeing or in effect guaranteeing
any Indebtedness, leases, dividends, letters of credit or other obligations
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation, or (ii) to maintain working capital or equity
6
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the obligee under any such
primary obligation, or (d) otherwise to assure or hold harmless the obligee
under such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business.
"CONTINGENT RETURNS" collectively, shall mean the Lender's
First Contingent Return and the Lender's Second Contingent Return.
"CONTINGENT RETURN DOCUMENTS" shall mean the Commitment Letter,
this Agreement, the Contingent Return Mortgage and all other documents,
agreements, instruments or certificates delivered to the Lender in connection
with the Contingent Returns (whether at, prior to or after the Closing).
"CONTINGENT RETURN MORTGAGE" shall mean that certain third
mortgage of even date herewith executed by the Borrower to Lender encumbering
the Mortgaged Property which secures the Contingent Returns and the Borrower's
obligations hereunder and under the other Contin "CONTRACTUAL OBLIGATION" of any
Person shall mean any provision of any security issued by such Person or of any
agreement, instrument or undertaking to which such Person is a party or by which
it or any of its property is bound or to which it is subject.
"COUNSEL FOR LENDER" shall mean the firm of Gunster, Yoakley,
Xxxxxx-Xxxxx & Xxxxxxx, P.A. having an office at 000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxx 0000, Xxxxxxx Financial Center, Xxxx Xxxxxxxxxx,
Xxxxxxx 00000, Attn: Xxxxxx X. Xxxxxx.
"DEBTOR PARTIES" shall mean, collectively, the Borrower and
the Guarantors.
"DEFAULT" shall mean any of the events specified in Sections 10.1
and 10.2 herein, whether or not any requirement for the giving of notice, the
lapse of time or both, has been satisfied.
"DOLLARS" AND "$" shall mean dollars in lawful currency of the
United States of America.
"ENVIRONMENTAL CLAIM" shall mean any investigative, enforcement,
cleanup, removal, containment, remedial or other private or governmental or
regulatory action at any time threatened, instituted or completed pursuant to
any applicable Environmental Requirement, against Borrower or against or with
7
respect to the Mortgaged Property or any condition, use or activity on the
Mortgaged Property (including any such action against Lender), and any claim at
any time threatened or made by any person against Borrower or against or with
respect to the Mortgaged Property or any condition, use or activity on the
Mortgaged Property (including any such claim against Lender), relating to
damage, contribution, cost recovery, compensation, loss or injury resulting from
or in any way arising in connection with any Hazardous Material or any
Environmental Requirement.
"ENVIRONMENTAL LAW" shall mean any federal, state or local law,
statute, ordinance, code, rule, regulation, license, authorization, decision,
order, injunction, decree, or rule of common law, and any judicial or agency
interpretation of any of the foregoing, which pertains to health, safety, any
Hazardous Material, or the environment (including but not limited to ground or
air or water or noise pollution or contamination, and underground or above
ground tanks) and shall include without limitation, the Solid Waste Disposal
Act, 42 U.S.C. ss. 6901 ET SEQ.; the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601 ET SEQ. ("CERCLA"),
as amended by the Superfund Amendments and Reauthorization Act of 1986 ("XXXX");
the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 ET SEQ.; the
Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 ET SEQ.; the Clean Air
Act, 42 U.S.C. ss. 7401 ET SEQ.; the Toxic Subhe Florida Resource Recovery and
Management Act, the Water Quality Assurance Act of 1983, The Florida Resource
Conversation and Recovery Act, the Florida Air and Water Pollution Control Act,
The Florida Safe Drinking Water Act, The Pollution Spill Prevention and Control
Act and any other local, state or federal environmental statutes, and all rules,
regulations, orders and decree now or hereafter promulgated under any of the
foregoing, as any of the foregoing now exist or may be changed or amended or
come into effect in the future.
"ENVIRONMENTAL REQUIREMENT" shall mean any Environmental Law,
agreement or restriction (including but not limited to any condition or
requirement imposed by any insurance or surety company), as the same now exists
or may be changed or amended or come into effect in the future, which pertains
to health, safety, any Hazardous Material, or the environment, including but not
limited to ground or air or water or noise pollution or contamination, and
underground or above ground tanks.
"EQUIPMENT" shall mean all furniture, fixtures, tenant
improvements, machinery, vehicles, equipment and other personal property of
every nature whatsoever now or hereafter owned by the Borrower wheresoever
located including personal property now or hereafter located in, on, or used or
intended to be used in
8
connection with, the operation of the Mortgaged Property or any of the other
real property now or hereafter owned by the Borrower, including without
limitation (i) all extensions, additions, improvements, betterments, renewals
and replacements to any of the foregoing, and (ii) all of the right, title and
interest of the Borrower in any such personal property or fixtures subject to
any conditional sales contract, chattel mortgage or similar lien or claim
together with the benefit of any deposits or payments now or hereafter made by
or on behalf of the Borrower.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
"EVENT OF DEFAULT" shall mean any of the events specified in
Sections 10.1 and 10.2 hereof, provided that any requirement for the giving of
notice, the lapse of time, or both, or any other condition, has been satisfied.
"FIRST CONTINGENT RETURN" shall mean an additional contingent
return to Lender that calculation of which shall be limited to the extent of any
Net Profits after the Borrower's First Priority Return (as that term is defined
herein) in an amount equal to an additional return on amounts which have been
advanced pursuant to the Loan, based on the amount of time that such funds have
been outstanding, at a rate equal to four (4%) percent per annum compounded
monthly.
"FIXTURES" shall have the meaning ascribed thereto in the
Mortgage.
"FUNDING AGREEMENT" shall mean that certain letter agreement of
even date herewith executed by the Guarantors to the Lender, agreeing to pay
certain amounts related to increases in the cost of the Project in excess of
said costs as reflected in the Pre-Closing Budget.
"GENERAL CONTRACTOR" shall mean Xxxx Incorporated Eastern.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" OR "GAAP" shall mean
those principles of accounting set forth in Opinions of the Financial Accounting
Standards Board of the American Institute of Public Accountants or which have
other substantial authoritative support and are applicable in the circumstances
as of the date of any report required herein or as of the date of an application
of such principles as required herein.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, and
any state or other political subdivision thereof, and any other agency,
department, commission, board, bureau, court or other instrumentality or entity
exercising executive, legislative,
9
judicial, regulatory or administrative functions of or pertaining
to government.
"GOVERNMENTAL REQUIREMENT" shall mean any law, enactment,
statute, code, ordinance, order, rule, regulation, judgment, decree, writ,
injunction, franchise, permit, certificate, license, authorization, or other
direction or requirement of any Governmental Authority now existing or hereafter
enacted, adopted, promulgated, entered, or issued applicable to Lender, Borrower
or the Mortgaged Property, including, without limitation, any Environmental Law.
"GROSS REVENUE" shall mean, for a given period of time, the gross
income received by Borrower or any affiliate of Borrower from all sources
arising from, or in connection with the Real Property during such period,
calculated on a cash basis but otherwise in accordance with generally accepted
accounting practices consistently applied and shall include, without limitation,
(i) proceeds of the sale of Tract B of the Real Property, (ii) proceeds of the
sale of Tract C of the Real Property, (iii) proceeds of the sale of any product
of the Real Property, (iv) proceeds of the sale of any other portion of the Real
Property or of any residential unit constructed on the Real Property or any
right or property interested associated with the Real Property or any such
residential unit constructed thereon, (v) proceeds of any contract right, cause
of action claim or other interest associated in any way with the Real Property,
(vi) proceeds of liability insurance; (vii) casualty proceeds and condemnation
proceeds net of reasonable expenses from any casualty, taking or conveyance in
lieu thereof (other than a total condemnation) of the Real Property to the
extent not paid to the holder of a mortgage on the Real Property and paid to
Borrower and not applied to the restoration of the Real Property, (viii)
interest payable to Borrower on security deposits, (ix) interest on escrows
approved or required by Lender, (x) payments made in consideration of any
contract extension for the sale of any of the property within the Project, (xi)
interest on Gross Receipts or on Cash Flow until applied in accordance with this
Loan Agreement, (xii) amounts received by Borrower from purchasers of Tracts or
from applicable Governmental Authorities as reimbursements for impact fees paid
by or on behalf of Borrower and (xiii) payments made under any joint venture
partnership interest owned by Borrower; and (xiv) and any other amounts or
revenues typically considered as revenues. Notwithstanding anything to the
contrary in the previous sentence, Gross Receipts shall not include (i) proceeds
the Loan Documents or the Chase Federal Loan Documents; (ii) casualty insurance
and taking proceeds actually applied to restoration of the Real Property as
permitted by the Loan Documents; (iii) income derived from the period prior to
the date of this Note; and (iv) amounts escrowed for Expenses to be paid on a
future date as provided in the Loan Documents until such time as the amounts are
applied to Expenses. Components of
10
revenue will be allocated among the Tracts and Gross Revenue will be determined
on a Tract specific basis as well as on an aggregate basis.
"GUARANTORS" shall mean Transeastern and the Principals,
jointly and severally.
"GUARANTY" shall mean that certain guaranty of payment and
performance of even date herewith executed by each of the Guarantors to the
Lender.
"HAZARDOUS MATERIAL" shall mean any substance, whether solid,
liquid or gaseous which is listed, defined or regulated as a "hazardous
substance," "hazardous waste," or "solid waste," or pesticide or otherwise
classified as hazardous or toxic, in or pursuant to any Environmental
Requirement; or which is or contains asbestos, radon, any polychlorinated
biphenyl, urea formaldehyde foam insulation, explosive or radioactive material,
or motor fuel or other petroleum hydrocarbons; which causes or poses a threat to
cause a contamination or nuisance on the Mortgaged Property or any adjacent
property or a hazard to the environment or to the health or safety of persons on
the Mortgaged Property.
"IMPOSITIONS" shall mean all (i) real estate and personal
property taxes and other taxes and assessments, public or private; utility rates
and charges including those for water and sewer; all other governmental and
non-governmental charges and any interest or costs or penalties with respect to
any of the foregoing; and charges for any public improvement, easement or
agreement maintained for the benefit of or involving the Mortgaged Property,
general and special, ordinary and extraordinary, foreseen and unforeseen, of any
kind and nature whatsoever that at any time prior to or after the execution of
this Agreement may be assessed, levied or imposed upon the Mortgaged Property or
the Revenues or income received therefrom, or any use or occupancy thereof, (ii)
other taxes, assessments, fees and governmental and non-governmental charges
levied, imposed or assessed upon or against Borrower or any of its properties
and (iii) taxes levied or assessed upon this Mortgage, the Note, and the other
Loan Documents, or any of them.
"IMPROVEMENTS" shall mean all buildings, structures,
appurtenances and improvements, including all additions thereto and replacements
and extensions thereof, now constructed or hereafter to be constructed under, on
or above the Real Property.
"INDEBTEDNESS" of a Person shall mean (a) indebtedness of such
Person for borrowed money (other than its obligations hereunder), or (b)
indebtedness of such Person (i) for the deferred purchase price of services or
property, which purchase price is paid over a
11
period of 12 months or more from the date of incurrence of the obligation in
respect thereof, or (ii) evidenced by a note or similar written instrument
(including, without limitation, any such indebtedness which is non-recourse to
the credit of such Person but is secured by assets of such Person), (c)
obligations of such Person under leases which have been or, in accordance with
GAAP, should be, recorded as Capitalized Leases, (d) indebtedness of such Person
arising under acceptance facilities, (e) indebtedness consisting of unpaid
reimbursement obligations in respect of all drafts drawn under letters of credit
issued for the account of such Person, (f) indebtedness of such Person arising
as a result of any Contractual Obligation (other than non-material Contractual
Obligations arising in the ordinary course of business of the Borrower), and (g)
a Contingent Obligation which has matured into a non-contingent obligation.
"INTEREST RATE" shall mean a fixed rate of interest equal to
Twenty Percent (20%) per annum.
"INTEREST RESERVE ACCOUNT" shall have the meaning ascribed
thereto in Section 2.1(b) hereof.
"LIEN" shall mean any mortgage, deed of trust, deed to secure
debt, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or other), or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code (other than any such financing statement filed for informational
purposes only or in connection with an operating lease) or comparable law of any
jurisdiction to evidence any of the foregoing.
"LOAN" shall mean the credit facility described in the first
paragraph of the Preliminary Statements and in Section 2.1 hereof.
"LOAN DOCUMENTS" means, collectively, (i) this Agreement, the
Note, the Guaranty, the Funding Agreement, the Mortgage, the Contingent
Mortgage, the Pledge Agreement, the Security Documents, and all other documents
executed by the Debtor Parties to the Lender in connection with the Loan, and
(ii) all other agreements, documents and instruments arising out of any
agreement, document or instrument referred to in clause (i) above.
"LOAN PROCEEDS" shall mean (i) the portion of the Loan funded at
Closing, and (ii) the amount reserved for the payment of interest, all in
accordance with Section 2.1 of this Agreement, which is being funded for the
purpose of constructing
12
infrastructure and other improvements for, among other things, the construction
of single and multi-family projects.
"LOAN TERM" shall mean that certain period of time commencing on
the Closing Date and terminating on that certain date twenty four (24) months
thereafter.
"MORTGAGE" shall mean that certain second mortgage of even date
herewith executed by the Borrower to Lender encumbering the Mortgaged Property
which secures (i) the indebtedness evidenced by the Note, and (ii) the
Borrower's obligations hereunder and under the other Loan Documents.
Notwithstanding the foregoing, the Mortgage shall not secure the Contingent
Returns which are secured by the Contingent Return Mortgage.
"MORTGAGED PROPERTY" shall mean the Real Property and the
Improvements, if any.
"NET PROFIT" shall mean net income before taxes, payment of the
Second Contingent Return, depreciation and other non cash expenses, all as
determined in accordance with GAAP; and shall be determined independently for
each Tract based on an allocation of income and expense items acceptable to the
Lender.
"NET SALES PROCEEDS" shall mean the gross sales price of each
unit for the sale of units to be constructed on the Real Property, less: (i)
Borrower's cost for deed preparation, transfer taxes and prorated property taxes
in an amount not to exceed one and one-half (1 1/2%) percent of the gross sales
price; (ii) aggregate sales commissions not to exceed six percent (6%) of the
gross sales price; (iii) 100% of the amount of construction loan proceeds drawn
in connection with the construction of such unit; (iv) the Chase Federal Unit
Release Price; and (v) the AMRESCO Unit Release Price.
"NOTE" shall mean that certain promissory note of even date
herewith from Borrower to Lender evidencing the indebtedness to Lender under the
Loan in the original principal amount of THREE MILLION DOLLARS ($3,000,000.00).
"OPTION CONTRACT" shall mean that certain option agreement
between SarahPark and Transeastern dated August 14, 1995, as amended by
amendment dated December 13, 1995.
"OPTION PROPERTY" shall mean those certain parcels of real
property which are the subject of the Option Contract and are more particularly
described as Tract C and Tract E in EXHIBIT 1 attached hereto and made a part
hereof.
"PAY RATE" shall mean a rate of interest equal to Ten Percent
(10%) per annum.
13
"PERMITTED TITLE EXCEPTIONS" shall mean those matters described
in Schedule B to the title insurance policy insuring Lender's interest in the
Mortgage.
"PERSON" shall mean any corporation, business entity, natural
person, firm, joint venture, partnership, trust, unincorporated organization,
association, government, or any department or agency of any government.
"PERSONAL PROPERTY" shall have the meaning ascribed thereto in
the Mortgage.
"PLAN" shall mean any pension plan which is covered by Title IV
of ERISA and in respect of which the Borrower or a Commonly Controlled Entity of
the Borrower is an "employer" as defined in Subsection 407(d)(7) of ERISA.
"PLEDGE AGREEMENT" shall mean that certain Pledge Agreement of
even date herewith between Transeastern, as Pledgor, and Lender.
"PLEDGOR" shall mean Transeastern.
"PRE-CLOSING BUDGET" shall mean that certain budget to be
prepared by Borrower and submitted to Lender for its review and approval prior
to the Closing Date in accordance with the terms of Section 7.12 hereof.
"PRINCIPALS", collectively, shall mean Xxxxxx Xxxxxxx, Xxxxxx
Xxxxxxx and Xxxx Xxxxx (each individually, a "Principal").
"PRIORITY RETURNS" collectively, shall mean the Borrower's First
Priority Return and the Borrower's Second Priority Return.
"PROJECT" shall mean the acquisition and development of the Real
Property, the construction of the Improvements and the selling of Tracts on and
units of the Real Property.
"PROJECT EXPENSES" shall mean, for any period, all costs and
expenses reasonably incurred and actually paid by Borrower during such period
incident to the normal ownership and development of and construction upon the
Real Property for which provision is made in a Budget, calculated on a cash
basis (except as otherwise set forth under (ii) below), but otherwise in
accordance with generally accepted accounting principles consistently applied,
including, without limitation, (i) approved costs of the Acquisition Contract
Development Work, the Tract Infrastructure Work and unit construction costs,
(ii) real estate and personal property taxes, water charges, sewer rents,
assessments and other governmental levies assessed against the Real Property, or
such other similar
14
taxes, assessments, levies or charges as may be imposed in lieu of or in
addition to any of the foregoing by appropriate governmental authority, and
insurance premiums, all of which to the extent paid on other than a monthly
basis shall be calculated on an accrual basis allocating such expenses in equal
monthly amounts over the applicable period of their payment; (iii) regularly
scheduled installments of principal and interest on the Chase Federal Loan and
the Loan and release prices approved by the Lender in connection with the fees
in connection with a construction loan for improvements on Tracts D and F of the
Real Property, and Tract E of the Real Property to the extent the same is
acquired by the Borrower; (vi) other reasonable and ordinary expenses for
properties similar to the Real Property; and (vii) expenses deducted in
connection with the computation of Net Sales Proceeds.
Notwithstanding anything to the contrary in the preceding sentence, Expenses
shall not include (i) obligations of Borrower not related to the ownership and
operation of the Real Property, (ii) payments to the Borrower, the Principals or
their affiliates other than the Borrower's First Priority Return, (iv)
commitment, origination, finder's, broker's, and other fees paid in connection
with the acquisition of the Real Property or the Option Property, the sale of
Tract B or Tract C of the Real Property, or any financing of the Real Property
or any portion thereof, including any such fees paid in connection with the
Chase Federal Loan and the Loan, (v) any cost or expense paid out of any reserve
established to cover Cost Overruns, (vi) non-cash expenses such as depreciation,
(vii) the cost of any item required to be capitalized under generally accepted
accounting principles except for capital expenditures included in the
Pre-Closing Budget or a Budget, (viii) legal, accounting, management and similar
fees and other obligations and expenses of Borrower not exclusively related to
the ownership and operation of the Real Property or otherwise approved by Lender
in writing, with the exception of the Borrower's First Priority Return, (ix)
except for regularly scheduled installments of principal and interest on the
Chase Federal Loan and the Loan, all other payments of debt service or otherwise
on any loan or financing, including, without limitation, any late charges or
similar charges, including increased interest payments at a default rate,
payable under the Chase Federal Loan and the Loan, (x) any reimbursement to
Lender of expenses incurred by reason of an Event of Default together with any
interest payable thereon, (xi) any costs, expenses or fees, including interest
payments, payable to any party by reason of a default by Borrower in the
performance of any obligation owing to any such party, unless specifically
approved by Lender in its sole discretion for inclusion in Expenses, (xii) any
demand fees, penalties or similar charges relating to late payments of real
estate taxes, assessments and similar charges on the Real Property, and any
interest relating to such late payments, (xiii) any income, franchise or similar
taxes
15
on Borrower or its affiliates, (xiv) any costs or expenses incurred by Borrower
in connection with closing the Loan or satisfying any of the conditions
precedent to the funding of the Loan, (xv) any costs or expenses not approved by
Lender in writing relating to correcting any violation of any law, ordinance or
regulation affecting the Real Property (xvi) appraisal costs, (xvii) expenses
relating to, or incurred during, the period prior to the date of this Agreement,
(xviii) any return of equity or return on equity, and (xix) any expenses for
which Borrower receives reimbursement or funds from other sources not included
in Gross Revenue, such as disbursements under the Chase Federal Loan or the Loan
or any other loan, and proceeds of insurance and condemnation awards other than
those included in Gross Receipts. In no event shall any particular payment of
any cost or expense included within the foregoing definition of "Project
Expenses" be taken into account more than once. Components of Project Expenses
will be allocated among the Tracts and Project Expenses will be determined on a
Tract specific basis as well as on an aggregate basis.
"REAL PROPERTY" shall mean that certain real property located in
Broward County, Florida and described more particularly in EXHIBIT 2 attached
hereto and made a part hereof as Tract B, Tract D and Tract F, together with any
additional real property the title to which is held by the Borrower from time to
time, including, without limitation, the Option Property.
"REPORTABLE EVENT" shall mean any of the events set forth in
Subsection 4043(b) of ERISA or the regulations thereunder.
"REQUIREMENT OF LAW" for any Person shall mean the Articles of
Incorporation and Bylaws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER" of any Person shall mean the trustee or the
chairman of the board or president of such Person in each case duly authorized
to undertake the required action then being taken and, as to financial matters,
the chief financial officer or treasurer of any Person, in each case duly
authorized to undertake the required action then being taken.
"SECOND CONTINGENT RETURN" shall mean an additional contingent
return equal to ten (10%) percent of the Net Profits on Tracts D, E and F of the
Real Property, and five (5%) percent of the Net Profits on Tracts B and C of the
Real Property, in each case, as reduced by (a) the First Contingent Return, (b)
the Borrower's First Priority Return, and (c) the Borrower's Second Priority
Return, provided, however, in the event that the Loan is reduced by
16
the sum of $1,000,000.00 plus current and accrued interest on the $1,000,000 at
the Interest Rate thereon, on or before September 1, 1996, the foregoing
percentages shall be reduced to five (5%) percent and two and on half (2 1/2)
percent, respectively.
"SECURITY DOCUMENTS" shall have the meaning ascribed in
Section 4.19 hereof.
"STOCK" shall mean the stock of Borrower pledged by Transeastern
to Lender under the Stock Pledge Agreement.
"SUBORDINATED INDEBTEDNESS" shall mean the indebtedness of the
Borrower to any trustee, officer, director, shareholder, Subsidiary or Affiliate
of the Borrower which has been subordinated to the Loan pursuant to Section 8.14
hereof.
"SUBSIDIARY" of any Person shall mean (i) a corporation or other
entity of which shares of stock or other ownership interests having voting power
(other than stock or other ownership interests having such power only by reason
of the happening of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such entity, are
owned, directly or indirectly, by such Person, and (ii) as to the Borrower, any
Subsidiary of a Subsidiary (and successor Subsidiaries thereof) of the Borrower.
"TRACT" shall mean any one of the parcels of real property
forming a part of the Real Property, any one of which may be identified by
reference to the letter assigned thereto in the applicable exhibit to this
Agreement.
"TRACT B SALES CONTRACT" shall mean that certain contract for the
sale of Tract B of the Real Property dated December 8, 1995, by and between
Borrower, as seller, and Hanover PH Limited Partnership, as buyer.
"TRACT INFRASTRUCTURE FUNDING REQUIREMENT" shall mean the portion
of the costs of completing the Tract Infrastructure Work with respect to Tracts
D and F of the Real Property which are not funded pursuant to the Chase Federal
Tract Loan, which amount shall not exceed $642,000.00. The Tract Infrastructure
Funding Requirement shall be deemed reduced from time to time by the amount of
any other funds made available for the purpose of funding the Tract
Infrastructure Work (other than the proceeds obtained from the Chase Federal
Tract Loan), reductions in the cost of the Tract Infrastructure Work and as
otherwise appropriate to effectuate the intentions of the parties hereto.
"TRACT INFRASTRUCTURE WORK" shall mean the work required to
install infrastructure within the boundaries of a particular Tract
17
of the Property, which work shall be approved by Lender and shall not include
Acquisition Contract Development Work.
"TRACTS C AND E ACQUISITION LOAN" shall have the meaning ascribed
thereto in Section 2.5 hereof.
"TRACT GROSS REVENUE" shall mean the Gross Revenue with respect
to a particular Tract forming a portion of the Real Property.
"TRACT NET PROFIT" shall mean the Net Profit with respect to a
particular Tract forming a portion of the Real Property.
"TRACT PROJECT EXPENSES" shall mean the Project Expenses with
respect to a particular Tract forming a portion of the Real Property.
"TRANSEASTERN" shall mean Transeastern Properties of South
Florida, Inc., a Florida corporation.
"TRI-PARTY AGREEMENT" shall mean that certain tri-party agreement
of even date herewith by and among Borrower, Lender and Chase Federal whereby
the parties thereto set forth their mutual understanding with respect to (i) the
terms by which Lender has agreed to subordinate to the Chase Federal Loan
Documents, (ii) the exercise of certain rights, remedies and options by the
respective parties hereto under the above described documents, and (iii) the
Borrower obtaining a construction loan to finance the construction of certain
improvements on the Property.
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS
(a) The terms "material" and "materially" shall have the meanings
ascribed to such terms under GAAP as such would be applied to the business of
the Borrower, except as the context shall clearly otherwise require; (b) all of
the terms defined in this Agreement shall have such defined meanings when used
in other documents issued under, or delivered pursuant to, this Agreement unless
the context shall otherwise require; (c) all terms defined in this Agreement in
the singular shall have comparable meanings when used in the plural, and vice
versa; (d) accounting terms to the extent not otherwise defined shall have the
respective meanings given them under, and shall be construed in accordance with,
GAAP; (e) terms defined in, or by reference to, Article 9 of the Uniform
Commercial Code as adopted in Florida (Chapter 679 of the Florida Statutes) to
the extent not otherwise defined herein shall have the respective meanings given
to them in Article 9 with the exception of the word "document" unless the
context clearly requires such meaning; (f) the words "hereby," "hereto,"
"hereof," "herein,", "hereunder" and words of similar import when used in this
Agreement
18
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement; (g) the masculine and neuter genders are used herein and
whenever used shall include the masculine, feminine and neuter as well; and (h)
whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the heirs, personal representatives,
participants, successors and assigns of such parties unless the context shall
expressly provide otherwise.
ARTICLE II
AMOUNT AND TERMS OF LOAN AND CHASE FEDERAL LOANS
SECTION 2.1 TERMS OF LOAN
Subject to the terms, conditions set forth herein, the Lender
agrees to make the Loan to Borrower as follows:
(a) The Pre-Closing Budget shall call for the application of the
Loan Proceeds (i) for the acquisition of Tracts B, D and F of the Real Property
pursuant to the Acquisition Contract; and (ii) to fund interest to the Lender at
the Pay Rate in accordance with the terms of subsection (c) below.
(b) The Lender shall advance up to $2,800,000.00 at the Closing,
with the precise amount funded being determined by the Lender based on the
amount necessary to fund the acquisition of Tracts B, D and F of the Real
Property.
(c) The parties acknowledge that a portion of the Loan Proceeds,
$200,000, has been allocated by Lender to an "Interest Reserve Account."
Provided there is no Event of Default, interest payments from the Interest
Reserve Account shall be funded by Lender for the account of Borrower at the Pay
Rate on the first day of each respective month, as the same become due, by
Lender's bookkeeping entries, unless Borrower elects to pay interest due in cash
to Lender. Upon disbursement of funds from the Interest Reserve Account, the
amount disbursed shall be added to the outstanding principal sum of the Loan and
shall bear interest at the Interest Rate. When and if such Interest Reserve
Account is depleted, then and in such event all monthly interest payments shall
be paid by Borrower. Notwithstanding any other provisions contained in this
Agreement to the contrary, Lender shall not be required to fund any sums from
the Interest Reserve Account if there is an Event of Default.
SECTION 2.2 TERMS OF CHASE FEDERAL LOANS
(a) The Borrower has negotiated the Chase Federal A & D Loan
in connection with the acquisition of the Real Property and
19
development of the Project, the closing on and funding of which loan on terms
satisfactory to Lender, is a condition precedent to the obligation of the Lender
to close the Loan. The Borrower contemplates that Chase Federal will fund the
Chase Federal Tract Loan to partially finance the cost of the Tract
Infrastructure Work. The Chase Federal Loans shall be as follows:
(i) The Chase Federal A&D Loan shall be for an
amount acceptable to the Borrower and the Lender, not to exceed $10,150,000.00,
together with any reimbursement obligations in connection with the Chase Federal
Letters of Credit for (aa) acquisition of Tracts B, D and F of the Real
Property, (bb) the Acquisition Contract Development Work, and (cc) the Chase
Federal Letters of Credit; and
(ii) The proposed Chase Federal Tract Loan shall be
for an amount acceptable to the Borrower and the Lender not to exceed a maximum
of 80% of the cost of the Tract Infrastructure Work for Tracts D and F of the
Real Property, which shall be $3,242,000.00 resulting in a maximum loan amount
of $2,600,000.00.
(b) As a condition to funding the Loan, (i) all documents
governing the Chase Federal Loans must be acceptable to the Lender, and (ii)
Chase Federal, Borrower and Lender shall have entered into the Tri-Party
Agreement. Lender acknowledges that the Chase Federal Loan Documents shall also
secure the repayment obligations pursuant to the Chase Federal Letters of Credit
in connection with the Acquisition Contract Development Work which is to be
funded pursuant to the Chase Federal A&D Loan.
SECTION 2.3 TERMS OF NOTE
As evidence of the Loan, the Borrower shall execute and deliver the
Note to the Lender on the Closing Date. The terms of The Note
shall be as follows:
(a) The Note shall bear interest at the Interest Rate calculated
on the basis of a 365-day year based on the actual number of days elapsed.
(b) Interest shall be paid in accordance with the Note.
(c) The entire unpaid principal balance then outstanding plus
accrued and unpaid interest shall mature and be due and payable upon the earlier
of: (i) the occurrence of an Event of Default; or (ii) April 1, 1998.
SECTION 2.4 APPLICATION OF FUNDS
All funds paid to the Lender in connection with the Loan shall be
applied first to the payment of any outstanding costs, expenses,
20
fees or charges which were required to be paid pursuant to the Loan Documents,
then to the payment of all accrued interest and then to the repayment of
principal.
SECTION 2.5 TRACTS C AND E ACQUISITION LOAN AND
CONSTRUCTION LOAN
The parties acknowledge and agree that the Borrower may obtain a
loan for the acquisition of Tracts C and E of the Real Property (the "Tracts C
and E Acquisition Loan") and the Construction Loan from Chase Federal, or such
other financial institution reasonably satisfactory to Lender, to finance the
acquisition of Tracts C and E and the construction of the Improvements,
respectively. Lender agrees that it will subordinate the lien and operation of
the Loan Documents to the lien and operation of the documents securing the
Tracts C and E Acquisition Loan and the Construction Loan, provided, however,
that such loans shall be with lenders and pursuant to documents and in amounts
and on terms which shall be acceptable to the Lender, including, without
limitation, the terms governing the relationship between such lenders and the
Lender.
SECTION 2.6 PREPAYMENT OF LOAN
Borrower may prepay the Loan in whole or in part at any time
without bonus or penalty. Notwithstanding the foregoing, Borrower acknowledges
that the prepayment of the Loan in whole or in part shall in no way impair or
affect Lender's right to receive the Contingent Returns.
SECTION 2.7 [INTENTIONALLY DELETED]
SECTION 2.8 INTENT NOT TO COMMIT USURY
The Borrower does not intend or expect to pay, nor does the
Lender intend or expect to charge, accept or collect, any interest under the
Note, this Agreement or any other instrument executed in connection herewith
greater than the maximum legal rate of interest which may be charged under
applicable law. Should any event result in the computation or earning of
interest in excess of such maximum legal rate, any and all such excess shall be
refunded to the Borrower. Notwithstanding anything to the contrary contained in
this Agreement, the Note, or any other instrument delivered in connection
herewith, the amount of interest due under the terms of this Agreement, the Note
or any other instrument shall in no event exceed the maximum amount of interest
permitted to be charged by law.
SECTION 2.9 DETERMINATION OF NET PROFIT
21
The Net Profits in connection with the Project shall be computed
separately with respect to each Tract (aggregating Tracts D and E) forming a
portion of the Real Property based on an allocation acceptable to the Lender of
all items which enter into the determination of Net Profit.
Net Profit shall be computed on a quarterly basis and shall be
reflected in the financial information required to be delivered to the Lender
pursuant to Section 8.2 of this Agreement.
SECTION 2.10 APPLICATION OF NET SALES PROCEEDS
The Lender shall have the right to direct the title company or
law firm acting as closing agent with respect to any closing on a residential
unit comprising a portion of the Real Property to deposit any Net Sales Proceeds
for each such unit in an account acceptable to the Lender and Borrower
authorizes such trust or escrow arrangements with respect to such funds as shall
be acceptable to the Lender.
SECTION 2.11 DISTRIBUTIONS
Other than the payment of the Borrower's First Priority Return,
as specifically set forth in Section 3.3 of this Agreement, all Cash Flow shall
be applied on a quarterly basis to reduce the principal balance of the Loan,
which shall include all accrued and unpaid interest pursuant to the Loan. All
funds so applied shall first be applied in accordance with the terms of Section
2.4 of this Agreement.
ARTICLE III
SALE OF REAL PROPERTY; APPLICATION OF PROCEEDS
SECTION 3.1 PARTIAL RELEASES.
Provided the Borrower is not then in Default hereunder, under the
Note, the Mortgage or any other Loan Document, Lender will provide partial
releases in respect of its interest under the Mortgage and other Loan Documents,
as required for the purpose of transferring clear title to purchasers of
portions of the Real Property, including, without limitation, residential units
in the Project, provided Borrower complies with all of the following items:
(a) That the Lender receives the proceeds due
Lender in accordance with the terms set forth in this Article III hereof.
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(b) Borrower's request for a partial release shall
be accompanied by a fully-executed photocopy of the purchase agreement and
fully-executed, original buyer's and seller's settlement statements.
(c) Payments made for releases shall be applied by
Lender in accordance with the terms of this Agreement.
(d) Borrower shall provide Lender with current
survey(s) of any Tract(s) to be released from the Mortgage which survey shall be
certified to Lender and shall be in compliance with applicable laws.
(e) Lender shall receive an endorsement to its
mortgagee title insurance policy reflecting the Tract or unit released.
(f) No Tract shall be released if such release
would deny or restrict (i) access from the remaining Mortgaged Property to a
paved public street, and (ii) utilities to the remaining Mortgaged Property.
(g) Borrower agrees to reimburse Lender for all
out-of- pocket fees and costs, including, without limitation, legal fees, in
connection with the granting of such partial releases and shall provide Lender
with any and all information requested by Lender with respect to the portion of
the Real Property to be released.
SECTION 3.2 SALES OF TRACTS OR UNITS ON THE REAL PROPERTY.
The parties acknowledge and agree that Borrower, upon the sale of
Tracts or Units constituting a portion of the Real Property shall pay to Chase
Federal and to Lender certain release prices in connection therewith and shall
apply other portions of the Net Sales Proceeds, as follows:
(a) TRACT B. Upon the sale or other transfer of
Tract B of the Real Property, the following terms shall apply:
(i) The Chase Federal Release Price for said Tract,
$5,000,000.00, shall be paid to Chase Federal to be applied against the
Borrower's outstanding indebtedness under the Chase Federal A&D Loan; and
(ii) The remaining net proceeds of sale (after
payment of closing costs and third party brokerage expenses in amounts and for
purposes acceptable to Lender), which shall be not less then $1,000,000.00,
subject to reduction for escrows of amounts due to secure the payment of the
full amount of the Municipal Land Dedication charges due or to become due, shall
be (i) paid to Lender to be applied against the Borrower's outstanding
indebtedness under the Loan, provided, however, a portion thereof
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not greater than an amount equal to the Tract Infrastructure Funding Requirement
may be used by the Borrower for the payment of costs incurred by the Borrower
for the Tract Infrastructure Work with respect to Tracts D and F of the Real
Property, provided such costs are approved in writing by Lender, with the
remaining balance thereof paid to Lender, or (ii) subject to the prior written
consent of Lender which consent may be granted or withheld by Lender in its sole
and absolute discretion, paid to Chase Federal to repay additional amounts due
Chase Federal under the Chase Federal A&D Loan.
(b) TRACT D. Upon the sale or other transfer of Tract D of the
Real Property and provided that Lender has approved the terms of such transfer,
which approval shall be given in Lender's sole and absolute discretion, the
following terms shall apply:
(i) The Chase Federal Release Price for said Tract,
$4,500,000.00, shall be paid to Chase Federal to be applied against the
Borrower's outstanding indebtedness under the Chase Federal A&D Loan; and
(ii) The remaining net proceeds of sale (after
payment of closing costs and third party brokerage expenses in amounts and for
purposes accepta sale or other transfer of Tract F of the Real Property and
provided that Lender has approved the terms of such transfer, which approval
shall be given in Lender's sole and absolute discretion, the following terms
shall apply:
(i) The Chase Federal Release Price for said Tract,
$3,000,000.00, shall be paid to Chase Federal to be applied against the
Borrower's outstanding indebtedness under the Chase Federal A&D Loan; and
(ii) The remaining net proceeds of sale (after
payment of closing costs and third party brokerage expenses in amounts and for
purposes acceptable to Lender) shall be paid to Lender to be applied against the
Borrower's outstanding indebtedness under the Loan.
(d) TRACT C. As to Tract C of the Option Property,
the following terms shall apply:
(i) It is the Borrower's intention to arrange for
the conveyance of Tract C of the Option Property contemporaneously with the
acquisition of the Option Property pursuant to the Option Contract, in which
event, (i) the net proceeds of sale (after payment of closing costs and third
party brokerage expenses in
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amounts and for purposes acceptable to Lender), which shall be not less than
$1,000,000.00, which may be payable at a later date pursuant to the terms of the
sale/joint venture documents and which documents Lender has the right to approve
in its sole and absolute discretion, shall be paid to Lender to be applied
against the Borrower's outstanding indebtedness under the Loan, provided,
however, at the Borrower's election, a portion thereof not greater than an
amount equal to the Tract Infrastructure Funding Requirement may be applied by
the Borrower to the payment of costs incurred by the Borrower for the Tract
Infrastructure Work with respect to Tracts D and F of the Real Property, and
Tract E of the Option Property, to the extent approved in writing by Lender,
with the remaining balance thereof paid to Lender, olute discretion, a portion
of such sales proceeds may be applied to repay additional amounts due Chase
Federal under the Chase Federal A&D Loan.
(ii) In the event that Tract C of the Option
Property is acquired by the Borrower and is not contemporaneously conveyed to a
third party, the Borrower shall be permitted to obtain up to $3,600,000.00 of
mortgage financing for the purpose of acquiring the Option Property, provided
that such loan shall be with lenders and pursuant to documents and in amounts
and on terms which shall be acceptable to Lender, including, without limitation,
terms governing the relationship between the provider of such financing and
AMRESCO (the "TRACTS C AND E ACQUISITION LOAN") . At the time of the subsequent
transfer of Tract C of the Option Property by the Borrower, (i) the net proceeds
of sale (after payment of closing costs and third party brokerage expenses in
amounts and for purposes acceptable to Lender) shall be applied to the release
price for such Tract C due to the lender which provided the Tract C and E
Acquisition Loan and the remaining net proceeds shall be paid to Lender to be
applied against the Borrower's outstanding indebtedness under the Loan,
provided, however, at the Borrower's election, a portion thereof not greater
than an amount equal to the Tract Infrastructure Funding Requirement may be
applied by the Borrower to the payment of costs incurred by the Borrower for the
Tract Infrastructure Work with respect to Tracts D and F of the Real Property,
and the remaining balance thereof paid to Lender, or, (ii) subject to the prior
written consent of Lender, which consent may be granted or withheld by Lender in
its sole and absolute discretion, a portion of such sales proceeds may be
applied to repay additional amounts due Chase Federal under the Chase Federal
A&D Loan.
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(e) SALE OF UNITS. Upon the sale or other transfer of Units,
the Borrower shall pay (in current funds) (i) the Chase Federal
Unit Release Price; (ii) 100% of the amount of construction loan proceeds drawn
in connection with the construction of such unit; (iii) to Lender, the AMRESCO
Unit Release Price and shall satisfy the other conditions to the granting of
partial releases which are set forth in Section 3.1 of this Agreement; (iv) any
excess shall be remitted to Borrower who shall reconcile and pay any outstanding
Project Expenses as to which funds have not been advanced pursuant to the Chase
Federal Loans or, at Lender's sole option, shall be paid into an account
pursuant to the terms of Section 2.10 from which such unfunded Project Expenses
may be paid in accordance with the Budget.
SECTION 3.3 BORROWER'S FIRST PRIORITY RETURN
The Borrower's First Priority Return shall be paid in connection
with the sale of each residence constructed on Tracts D and F of the Real
Property, and Tract E of the Real Property to the extent the same is acquired by
the Borrower, provided that (a) there does not exist at the time that the same
would otherwise be paid, a default or event of default pursuant hereto or
pursuant to any of the other documents or instruments evidencing or governing
the Loan, or any event or circumstance which with the passing of time or the
giving of notice, or both, would be a default or event of default pursuant
hereto or pursuant to any of the other documents or instruments evidencing or
governing the Loan, (b) the Chase Federal Unit Release Price shall have been
paid, and (c) to the extent that any portion of the principal or interest (at
the Interest Rate) pursuant to the Loan remains outstanding, a minimum payment
with respect to each residence conveyed, in amounts to be determined by Lender,
shall have been applied to reduce the same.
SECTION 3.4 FIRST CONTINGENT RETURN
At such time as the Loan has been repaid, together with interest
thereon, the AMRESCO Release Prices, together with the Net Cash Flow from the
sale of units, shall be used to pay Lender its First Contingent Return.
SECTION 3.5 BORROWER'S SECOND PRIORITY RETURN
To the extent of Cash Flow, the Borrower's Second Priority Return
may be distributed provided that (a) the First Contingent Return has been paid;
(b) there shall not exist at the time that the same would otherwise be paid, a
default or event of default pursuant to the Loan Documents, or any event or
circumstance which with the passing of time or the giving of notice, or both,
would be a default or event of default pursuant to the Loan Documents.
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SECTION 3.6 SECOND CONTINGENT RETURN
The Second Contingent Return shall be paid to the Lender after
the payment of the First Contingent Return, the Borrower's First Priority Return
and the Borrower's Second Priority Return, to the extent of the Borrower's Cash
Flow. Subject to the terms of Section 3.2(e) of this Agreement, the Borrower
shall pay the Contingent Returns on a quarterly basis based on the quarterly
determinations of Net Profit, and the amounts of such Contingent Returns shall
be adjusted if appropriate based on the audited financial statements provided
for in Section 8.2 of this Agreement, provided that any overpayment to Lender of
Contingent Returns, after adjustment as provided herein, shall be refunded to
the Borrower, within thirty (30) days after request therefor, or netted against
any future quarterly payment of Contingent Returns.
SECTION 3.7 INTENT OF LENDER
The Borrower acknowledges that the receipt by Lender of the
Contingent Returns is subject to numerous risks and uncertainties, including,
without limitation, the possibility of unanticipated costs in performing the
Acquisition Contract Development Work (e.g., as a result of change orders,
unforseen conditions or force majeure) and the Tract Infrastructure, the
possibility that Tract B is not sold pursuant to the Tract B Sales Contract at
the price contemplated therein; the possibility that the Borrower does not
acquire Tract C or Tract E; the possibility that no contract for the sale of
Tract C is completed or that said Tract is not conveyed pursuant thereto at the
price reflected in the Borrower's projections; the possibility of utility
moratoria or materials or labor costs decreasing the Borrower's anticipated
profits; and the possibility of a change in interest rates or the economy in
general, impacting the sale of residences. The Borrower further acknowledges
that the Lender's receipt of any of the Contingent Returns is contingent on the
availability of profit and the payment of the Borrower's First Priority Return
and the Borrower's Second Priority Return, as applicable. The Borrower
acknowledges that the Contingent Returns are not interest; but are an additional
return to the Lender which is based strictly on the success of the Borrower's
business venture. The Borrower further acknowledges that the Commitment Fee
charged pursuant hereto is a customary and reasonable charge for the Lender
performing the services necessary to enable it to, and to compensate it for,
committing to provide the Loan. The Borrower acknowledges that no portion of the
Commitment Fee constitutes interest. It is expressly stipulated and agreed to be
the intent of Borrower and Lender at all times to comply with applicable state
law or applicable United States federal law (to the extent that it permits
Lender to contract for, charge, take, reserve or receive a greater amount of
interest than under state law) and that this Paragraph shall control every other
covenant and agreement in this Commitment Letter. If the
27
applicable law (state or federal) is ever judicially interpreted so as to render
usurious any amount called for under this Commitment Letter, the Note or under
any of the Loan Documents, or contracted for, charged, taken, reserved or
received with respect to the
indebtedness evidenced by the Loan, or to accelerate the maturity of the Note,
or if any prepayment by Borrower, late payment charge, default interest,
commitment fee, servicing or loan administration fee, or other fee, charge, or
imposition of any kind results in Borrower having paid any interest in excess of
that permitted by applicable law, then it is Borrower's and Lender's express
intent that all excess amounts theretofore collected by Lender be repaid to
Borrower with interest thereon at the maximum lawful rate, and the provisions of
the Note and the other Loan Documents immediately be deemed reformed and the
amounts thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for hereunder and thereunder. All sums paid or agreed to be paid to
Lender for the use, forbearance and detention of the indebtedness represented by
the Loan shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the maximum rate permitted under applicable law
from time to time in effect and applicable to the indebtedness evidenced hereby
for so long as such indebtedness remains outstanding. Notwithstanding anything
to the contrary contained herein or in any of the Loan Documents, it is not the
intention of Lender to accelerate the maturity of any interest that has not
accrued at the time of such acceleration or to collect unearned interest at the
time of such acceleration.
ARTICLE IV
SECURITY AND GUARANTY FOR PAYMENT OF THE LOAN
As security for the full and timely payment of the principal and
interest under the Note, and for any and all other indebtedness, obligations or
liability of the Borrower to the Lender pursuant to the Loan, whether now
existing or hereafter arising:
SECTION 4.1 MORTGAGE
The Borrower shall execute and deliver to the Lender the Mortgage
which shall constitute a second lien on the Mortgaged Property in accordance
with the terms of the Tri-Party Agreement and subject to the Permitted Title
Exceptions.
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SECTION 4.2 SECURITY AGREEMENT
The Borrower shall execute and deliver to Lender a Security
Agreement which shall grant to the Lender a second priority security interest in
and a continuing lien in and upon all of the Fixtures and Personal Property.
SECTION 4.3 ASSIGNMENT OF LEASES, RENTS AND PROFITS
The Borrower shall duly execute and deliver to the Lender an
Assignment of Leases, Rents and Profits as to the Mortgaged Property which gives
to the Lender the right to receive any income generated from the operation,
lease, sublease or sale of the Mortgaged Property.
SECTION 4.4 COLLATERAL ASSIGNMENT OF AGREEMENTS AFFECTING
REAL ESTATE
The Borrower shall execute and deliver an assignment, as
continuing collateral security, of the benefit of all agreements affecting the
Property and/or the Project.
SECTION 4.5 PLEDGE AGREEMENTS AND STOCK CERTIFICATES
Pledgor shall execute and deliver to Lender a Pledge (the
"Pledge") of all of such party's legal and beneficial interest in and to the
Borrower, together with stock certificates evidencing such interests and stock
powers, executed in blank.
[SECTIONS 4.5 THROUGH 4.13 ARE INTENTIONALLY DELETED]
SECTION 4.14 MORTGAGOR'S AFFIDAVIT
The Borrower shall execute and deliver to the Lender a
Mortgagor's Affidavit attesting to the absence of judgments and suits against
the Borrower, and the absence of liens and encumbrances, including mechanic's
liens, delinquent taxes or claims that can or might become liens on the
Property, and the ownership and possession of the Property.
SECTION 4.15 GUARANTY
Each Guarantor shall execute and deliver to the Lender a
Guaranty, whereby each Guarantor jointly and severally guarantees all of the
Borrower's obligations hereunder and under the Note in accordance with the terms
of the Guaranty.
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SECTION 4.16 FUNDING AGREEMENT
Each Guarantor shall execute and deliver to the Lender a Funding
Agreement, whereby each Guarantor jointly and severally guarantees certain
obligations in accordance with the terms of the Funding Agreement.
SECTION 4.17 ENVIRONMENTAL INDEMNITY AGREEMENT
The Borrower and the Guarantors shall each execute and deliver to
the Lender an Environmental Indemnity Agreement whereby the Borrower and the
Guarantors shall indemnify, defend and hold Lender harmless from any and all
loss and damage suffered as a result of any Environmental Claim.
SECTION 4.18 [INTENTIONALLY DELETED]
SECTION 4.19 SECURITY DOCUMENTS
The Borrower, in order to set forth the terms and conditions
under which the Collateral described in Sections 4.1 through 4.16 hereof will be
held by the Lender, shall execute and deliver to the Lender, in form and
substance satisfactory to the Lender and its Counsel, any and all mortgages,
security agreements, UCC-1 Financing Statements, hypothecation agreements,
assignments, pledge agreements, financing statements, notices of lien, and any
other documents relating to any security as the Lender shall require from time
to time (the documents and instruments referred to in Sections 4.1 through 4.16
and in Sections 5.1 through 5.5, together with all of the foregoing, are all
herein referred to collectively as the "SECURITY DOCUMENTS").
SECTION 4.20 FILING AND RECORDING
The Borrower shall bear the cost and expense of causing such of
the Security Documents to be duly recorded and/or filed in all places necessary,
in the opinion of the Lender and Counsel for Lender, to perfect and protect the
interest of the Lender in the property covered thereby. The Borrower hereby
authorizes the Lender to file any financing statement or notice of lien in
respect of any security interest created pursuant to this Agreement which may at
any time be required or which, in the opinion of the Lender, may at any time be
desirable, although the same may have been executed only by the Lender, or, at
the option of the Lender, to sign such financing statement or notice of lien on
behalf of the Borrower and file the same. The Borrower hereby irrevocably
designates the Lender, its agents, representatives and designees as agents and
attorneys-in-fact for Borrower for this purpose and acknowledges that this is a
power coupled with an interest and that it is irrevocable. In the event that any
rerecording or refiling
30
thereof (or the filing of any statements of continuation or assignment of any
financing statement) is required to protect and preserve security interests in
favor of the Lender, the Borrower shall bear the cost and expense of causing the
same to be rerecorded and/or refiled at the time and in the manner required by
the Lender.
ARTICLE V
SECURITY AND GUARANTY FOR
PAYMENT OF THE CONTINGENT RETURNS
As security for the full and timely payment of the Contingent
Returns:
SECTION 5.1 CONTINGENT RETURN MORTGAGE
The Borrower shall execute and deliver to the Lender the
Contingent Return Mortgage which shall secure payment to Lender of the
Contingent Returns and which shall constitute a third lien on the Mortgaged
Property, subject to Permitted Title Exceptions.
SECTION 5.2 COLLATERAL ASSIGNMENT OF AGREEMENTS AFFECTING
REAL ESTATE
The Borrower shall execute and deliver an assignment, as
continuing collateral security, of the benefit of all agreements affecting the
Property and/or the Project.
SECTION 5.3 PLEDGE AGREEMENTS AND STOCK CERTIFICATES
Pledgor shall execute and deliver to Lender a Pledge (the
"Contingent Return Pledge") of all of such party's legal and beneficial interest
in and to the Borrower, together with stock certificates evidencing such
interests and stock powers, executed in blank.
SECTION 5.4 ASSIGNMENT OF LEASES, RENTS AND PROFITS
The Borrower shall duly execute and deliver to the Lender an
Assignment of Leases, Rents and Profits as to the Mortgaged Property which gives
to the Lender the right to receive any income generated from the operation,
lease, sublease or sale of the Mortgaged Property, in order to secure the
Contingent Returns.
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ARTICLE VI
DEBTOR PARTIES' REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement, the Debtor
Parties make the following representations and warranties which shall be deemed
to be continuing representations and warranties so long as the Note or other
indebtedness of the Borrower to the Lender remains unpaid:
SECTION 6.1 ORGANIZATION AND STANDING
Borrower and Transeastern (a) are duly organized, validly
existing and in good standing under the laws of the state of Florida, (b) have
the corporate power and authority to own their respective properties and to
carry on their respective business as now being conducted, (c) are qualified to
do business in all jurisdictions in which the character of their properties or
nature of their business requires such qualification, (d) are in compliance with
all Governmental Requirements, and (e) have not amended or modified their
articles or certificate of incorporation or bylaws except as previously
disclosed in writing to Lender prior to the execution hereof.
SECTION 6.2 CAPITALIZATION
(a) Borrower has authorized capital stock of 10,000 shares of
common stock, par value $.01 per share, of which 10,000 shares are issued and
outstanding and owned beneficially and of record by Pledgor. Subject to the
terms of this Agreement and the Loan Documents, Pledgor has the unrestricted
right to vote, and to receive dividends and distributions on, all shares of such
stock of Borrower. All such stock has been duly authorized and validly issued
and is fully paid and nonassessable. Other than the common stock, there are
outstanding no other Capital Securities of Borrower and there are no outstanding
subscriptions, rights, agreements, commitments, warrants or options for the
purchase of Capital Securities of Borrower. Borrower's common stock is subject
to no restrictions, limitations, prohibitions or other restraint on alienation
(including, without limitation, pursuant to a shareholders agreement). The
owners of all of the common (voting) stock of Transeastern are listed in EXHIBIT
6.2 attached hereto.
(b) There are two (2) classes of preferred stock of Transeastern,
Class A Preferred Stock and Class B Preferred. The owners of the Class A
Preferred Stock also own warrants for the purchase of Transeastern's common
stock. If such warrants are exercised, the common stock issued pursuant thereto
would not represent more than a twenty percent (20%) interest in all of such
issued common (voting) stock of Transeastern.
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SECTION 6.3 POWER AND AUTHORITY
The execution, delivery and performance by Borrower of the Loan
Documents, and the borrowing evidenced by the Note, (i) are within the powers
and purposes of Borrower, (ii) have been duly authorized by all requisite action
of Borrower, (iii) do not require the approval of any Governmental Authority,
and (iv) will not violate any Governmental Requirement, the articles of
incorporation or bylaws of Borrower or any Contractual Obligation of Borrower,
or be in conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any such Contractual Obligation or result
in the creation or imposition of any Lien upon any of its property or assets,
except as contemplated by the provisions of the Loan Documents.
SECTION 6.4 VALID AND BINDING OBLIGATION
The Loan Documents constitute the legal, valid and binding
respective obligations of the Borrower, enforceable in accordance with their
terms subject to applicable bankruptcy and insolvency laws and laws affecting
creditors' rights and the enforcement thereof.
SECTION 6.5 NO LEGAL BAR
The execution, delivery and performance of this Agreement, the
other Loan Documents, and the borrowings contemplated by this Agreement do not
and will not violate any Requirement of Law or any Contractual Obligation of the
Debtor Parties and will not result in, or require, the creation or imposition of
any Lien (other than Liens created pursuant to the Loan Documents or permitted
under Section 9.2 hereof) on any of its properties or revenues pursuant to any
Requirement of Law or any Contractual Obligation which violation or Lien would
have a material adverse effect, cost or expense to the business, operations or
financial condition of the Debtor Parties.
SECTION 6.6 TITLE TO COLLATERAL
The Borrower is indefeasibly seized of and has and will have good
and marketable fee simple title to the Real Property and Improvements free and
clear of any and all mortgages, liens, encumbrances, claims, charges, equities,
covenants, conditions, restrictions, easements, rights-of-way and all other
matters affecting the Real Property and Improvements, whether or not of record,
except for the Permitted Title Exceptions. Borrower has and will have good,
absolute and marketable title to the Fixtures and Personal Property all free and
clear of any and all liens, charges, encumbrances, security interests and
adverse claims whatsoever, except those in favor of (i) Chase Federal pursuant
to the Chase Federal Loan Documents, and (ii) Lender. Borrower will
33
preserve its title to the Mortgaged Property and will forever warrant and defend
the same to Lender and will forever warrant and defend the validity and priority
of the lien of the Mortgage against the claims of all persons and parties
whomsoever subject, however, to the rights of Chase Federal pursuant to the
Chase Federal Loan Documents.
SECTION 6.7 FINANCIAL STATEMENTS AND OTHER INFORMATION
(a) All balance sheets, statements of profit and loss, and other
financial data that have been given to Lender with respect to the Borrower and
the Guarantors, (i) are complete and correct in all material respects, (ii)
accurately present the financial condition of said parties as of the dates, and
the results of its or their operations, for the periods for which the same have
been furnished, and (iii) as to the Borrower and Transeastern, have been
prepared in accordance with Generally Accepted Accounting Principles
consistently followed throughout the periods covered thereby; all balance sheets
disclose all known liabilities, direct and contingent, as of their respective
dates; and there has been no change in the condition of the Borrower or the
Guarantors, financial or otherwise, since the date of the most recent financial
statements given to Lender with respect to said parties, other than changes in
the ordinary course of business, none of which changes has been materially
adverse.
(b) All other information, including reports, financial
statements, certificates, papers, data and otherwise, given and to be given to
Lender with respect (i) to Borrower or any Guarantor, (ii) to the Loan and (iii)
to others obligated under the terms of the Loan Documents, are true, accurate
and correct in all material respects and complete.
SECTION 6.8 LITIGATION
There are no judgments outstanding against the Debtor Parties and
there is no action, suit, proceeding, or investigation now pending (or to the
best of the Debtor Parties's knowledge after diligent inquiry, threatened)
against, involving or affecting the Debtor Parties or the Mortgaged Property, or
any part thereof, at law, in equity or before any Governmental Authority that if
adversely determined as to the Mortgaged Property or as to The Debtor Parties
would result in a material adverse change in the business or financial condition
of the Debtor Parties or the Borrower's operation and ownership of the Mortgaged
Property, nor is there any basis for such action, suit, proceeding or
investigation.
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SECTION 6.9 INVESTMENT COMPANY ACT
The Borrower is not an "investment company" (as the quoted term
is defined or used in the Investment Company Act of 1940, as amended).
SECTION 6.10 FEDERAL REGULATION
No part of the proceeds of the Loan will be used for any purpose
which violates, or which would be inconsistent with, the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System
or any other Requirement of Law. Neither the Debtor Parties nor any agent acting
on their behalf has taken or will take any action which might cause this
Agreement or any of the Loan Documents or instruments delivered pursuant hereto
to violate any regulation of the Board or to violate the Securities Exchange Act
of 1934, in each case, as in effect on the Closing Date.
SECTION 6.11 DISCLOSURE
No representation or warranty made by the Debtor Parties in this
Agreement, in any of the other Loan Documents or in any other document furnished
or to be furnished from time to time in connection herewith or therewith
contains or will contain any misrepresentation of a material fact or omits or
will omit to state any material fact necessary to make the statements herein or
therein not misleading. There is no fact known to the Debtor Parties which
materially adversely affects, or which would in the future materially adversely
affect, the business, assets, property, prospects or financial condition of the
Debtor Parties.
SECTION 6.12 BROKERAGE
The Debtor Parties have dealt with no broker or finder in
connection with the Loan other than Holliday, Fenoglio, Xxxxxxxx & Xxxxxx (the
"Broker") who has been engaged by the Borrower, at the Borrower's expense. The
Debtor Parties hereby agree to indemnify the Lender against and to hold the
Lender harmless from any claims for finders' or brokerage fees or commission in
connection with the Loan (including any and all fees due the Broker) and agrees
to pay all expenses (including but not limited to attorneys' fees and expenses)
incurred by the Lender in connection with the defense of any action or
proceeding brought to collect any such fees or commissions or otherwise relating
to any such brokerage claims resulting from or arising out of any claim that the
Debtor Parties consulted, dealt or negotiated with the person or entity making
such brokerage claim.
35
SECTION 6.13 TAXES
(a) The Debtor Parties have filed or caused to be filed all tax
returns which to the knowledge of the Debtor Parties are required to be filed,
and has fully paid all taxes shown to be due and payable on said returns or on
any assessments made against it or its property and all other taxes, fees or
other charges imposed on it or any of its property by any Governmental
Authority, including payroll taxes. No tax liens have been filed and, to the
knowledge of the Debtor Parties, no claims are being made or may hereafter be
asserted with respect to any such taxes, fees or other charges, except for: (i)
those the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Debtor Parties, as the case may be;
and (ii) such failures to file or to pay such tax liens or claims, as could not,
in the aggregate, reasonably be expected to have a material adverse affect on
the business, operations, property or financial or other condition of the Debtor
Parties and could not reasonably be expected to have an adverse affect on the
ability of the Debtor Parties to perform any of its respective obligations in
any material respect under this Agreement, the other Loan Documents to which it
is a party or under any other Contractual Obligation.
(b) The Real Property is not currently assessed separately from
all other adjacent land for the purposes of real estate taxes.
Notwithstanding the foregoing, there is no intended public improvements which
may involve any charge being levied or assessed, or which may result in the
creation of any lien upon the Mortgaged Property. Borrower covenants and agrees
to proceed expeditiously after the Closing Date to have the Real Property
assessed separately.
SECTION 6.14 ERISA
Each pension, profit sharing or other employee benefit plan
maintained by the Debtor Parties is in material compliance with ERISA, the Code
and all applicable rules and regulations adopted by regulatory authorities
pursuant thereto. The Debtor Parties have filed all material reports required to
be filed by ERISA, the Code and such rules and regulations. In addition, any
qualified plan subject to the minimum funding standards does not as of the date
hereof have a funding deficiency as defined by ERISA. No "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code) or
"accumulated funding deficiency" (as defined in Section 302 of ERISA) or
Reportable Event material in relation to the business, operations, property or
financial or other condition of the Debtor Parties has occurred with respect to
any Plan. No tax penalty, nor other liability in the aggregate material in
relation to business, operations, property or financial
36
condition of the Debtor Parties has been assessed against the Debtor Parties
with respect to a Plan.
SECTION 6.15 LIABILITIES TO EMPLOYEES AND OFFICERS
The Debtor Parties do not have any liabilities to officers or
employees in respect of employment termination benefits.
SECTION 6.16 SUBSIDIARIES
The Borrower does not have any Subsidiaries, partnership
interests or Affiliates other than those listed on EXHIBIT 6.16 attached hereto.
All such Subsidiaries are wholly-owned by Borrower. The Borrower has the
unrestricted right to vote, and to receive dividends and distributions on, all
Capital Securities of the Subsidiaries owned by Borrower. All such Capital
Securities have been duly authorized and validly issued and are fully paid and
nonassessable.
SECTION 6.17 ENVIRONMENTAL CONTAMINATION/HAZARDOUS MATERIAL
Borrower and the Mortgaged Property are in full compliance with
all Environmental Laws, and there are no civil, criminal or administrative
actions, suits, demands, claims, hearings, notices or demand letters, notices of
violation, investigations, or proceedings pending or threatened against the
Borrower or the Mortgaged Property relating in any way to any Environmental Law
or any agreement, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved under any Environmental Law.
There have never been nor are there currently any Hazardous Material located on,
in, or under the Mortgaged Property or used in connection therewith, and neither
Borrower nor any other person has ever used the Mortgaged Property for the
manufacture, processing, distribution, use, transport, handling, treatment,
storage, disposal, emission, discharge or release of any Hazardous Material. No
notice or advice has been received by Borrower of any condition or state of
facts that would be contributing to a claim of pollution or any other damage to
the environment by reason of the conduct of any business on the Mortgaged
Property or operation of the Mortgaged Property, whether past or present.
SECTION 6.18 NO VIOLATIONS
No Governmental Requirement and no covenant, condition,
restriction, easement or similar matter affecting the Real Property has been
violated, and Borrower has not received any notice of violation from any
Governmental Authority or any other person with respect to any of the foregoing
matters.
SECTION 6.19 CONDITION OF MORTGAGED PROPERTY
37
The Mortgaged Property or any part thereof, now existing, is not
damaged or injured as a result of any fire, explosion, accident, flood or other
casualty. The Improvements, if any, as of the date of this Mortgage, are free of
any defects in material, structure and construction and do not violate any
Governmental Requirements. There is no existing, proposed or contemplated plan
to modify or realign any street or highway or any existing, proposed or
contemplated eminent domain proceeding that would result in the taking of all or
any part of the Mortgaged Property or that would adversely affect the use or the
operation of the Mortgaged Property.
SECTION 6.20 UTILITIES
There is available to the Real Property and Improvements through
public or private easements or rights-of-way abutting or crossing the Real
Property (which would inure to the benefit of Lender in case of enforcement of
this Mortgage) a water supply and a sanitary sewer service, and electric, gas
(if applicable) and telephone service, all of sufficient capacity to serve the
needs of the Real Property and Improvements according to their intended purpose.
All necessary permits for the foregoing have been issued, are in good standing
and all fees have been paid to the applicable Governmental Authorities. Upon
completion of the utility line, said utility lines shall be approved by all
health and other applicable Governmental Authorities having jurisdiction.
SECTION 6.21 BUDGET FOR ACQUISITION CONTRACT DEVELOPMENT
WORK
The total budget for the (i) acquisition of Parcels B, D and F of
the Real Property, and (ii) performance of the Acquisition Contract Development
Work shall not exceed Thirteen Million Dollars
($13,000,000).
SECTION 6.22 ZONING AND LAND USE
The Real Property is zoned so as to permit the Real Property and
Improvements to be used for the purposes set forth in City of Pembroke Pines
Ordinance No. 1113 and all attachments thereto which include the intended use of
the Project.
SECTION 6.23 PERMITS AND LICENSES
The Borrower has obtained certain permits, licenses and approvals
in connection with its development of the Real Property and the construction of
the Improvements, all as set forth on EXHIBIT 6.23 attached hereto.
SECTION 6.24 [INTENTIONALLY DELETE]
38
SECTION 6.25 NO DEFAULTS
The Acquisition Contract, the Option Contract, the Construction
Contract and the Tract B Sales Contract are all in full force and effect, there
are no defaults thereunder and no event has occurred which with due notice or
the lapse of time, or both, would constitute a default thereunder.
SECTION 6.26 FACILITIES FOR HANDICAPPED
The Improvements when constructed shall comply with all legal
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 "Accessibility by Handicapped Persons", Chapter 553,
Fla Stat.; the Federal Architectural Barriers Act of 1988 (42
U.S.C. ss.4151, et.seq.), The Fair Housing Amendment Act of 1988 (42
U.S.C. ss.3601, et.seq), The Americans With Disabilities Act of 1990
(42 U.S.C. ss.12101 et. seq.), and The Rehabilitation Act of 1973 (29
U.S.C. ss.794).
SECTION 6.27 OTHER AGREEMENTS
Borrower is not a party to any agreement or instrument materially
and adversely affecting it or its present or proposed businesses, properties or
assets, operation or condition, financial or otherwise, and Borrower is not in
default in the performance, observance or fulfillment of any of the material
obligations, covenants or conditions set forth in any agreement or instrument to
which it is a party.
SECTION 6.28 CHASE FEDERAL LOAN DOCUMENTS
The Chase Federal Loan Documents are in good standing, all
principal, interest and other payments due thereunder have been paid in
accordance with the terms thereof, there is no default thereunder and no event
has occurred which with due notice or the lapse of time, or both, would
constitute a default thereunder. In connection therewith, monies from the Chase
Federal Letters of Credit are solely for the construction of the Project
(including offsite improvements therefor) and proceeds from the Chase Federal
Loan will be sufficient to construct the Acquisition Contract Development Work
and the Tract Infrastructure Work.
SECTION 6.29 REPRESENTATIONS AND WARRANTIES IN OTHER LOAN
DOCUMENTS
All of the representations and warranties contained in the other
Loan Documents are true and correct.
39
SECTION 6.30 RELIANCE ON REPRESENTATIONS
The Borrower acknowledges that the Lender has relied upon the
Borrower's representations, has made no independent investigation of the truth
thereof, is not charged with any knowledge contrary thereto that may be received
by an examination of the public records in Tallahassee, Florida and Broward
County, Florida, or that may have been received by any officer, director, agent,
employee or shareholder of Lender.
ARTICLE VII
CONDITIONS PRECEDENT
The effectiveness of this Agreement and the obligation of the
Lender to consummate any of the transactions contemplated hereby shall be
subject to the satisfaction of the following conditions precedent, at or prior
to the time of the Closing Date.
SECTION 7.1 CORRECTNESS OF WARRANTIES
All representations and warranties contained herein or otherwise
made to the Lender in connection herewith or in any other Loan Document shall be
true and correct.
SECTION 7.2 OPINION OF COUNSEL
Lender shall have received from counsel to the Borrower specific
opinions addressed to and satisfactory to the Lender.
SECTION 7.3 ENTITY DOCUMENTS
Lender shall have received true and correct copies, certified as
to authenticity by a Responsible Officer of the Borrower and Transeastern, as
applicable, of the Articles of Incorporation and the By-Laws of the Borrower and
any amendments thereto, a current Certificate of Good Standing from the State of
Florida for both, and such other certificates, documents or instruments as may
be reasonably requested by the Lender.
SECTION 7.4 CERTIFIED RESOLUTIONS AND INCUMBENCY
The directors and the stockholders, if necessary, of the
Borrower and Transeastern shall have adopted specific resolutions
authorizing the execution and delivery of all Loan Documents and
the taking of all actions called for by this Agreement, and the
Borrower and Transeastern shall have furnished copies of such
resolutions, certified by the Secretary or an Assistant Secretary
to be true, correct and complete and in full force and effect. The
40
Lender shall also have received a certificate of the Secretary or an Assistant
Secretary of the Borrower and Transeastern, as applicable, dated the Closing
Date, as to the incumbency and signature of the officers of the Borrower and
Transeastern, as applicable, executing this Agreement, the other Loan Documents
to which it is a party and any certificate or other documents to be delivered by
it pursuant hereto or thereto, together with evidence of the incumbency of such
Secretary or Assistant Secretary (or other representative), as the case may be.
SECTION 7.5 LOAN DOCUMENTS
The Lender shall have received the Loan Documents duly executed
and delivered by a Responsible Officer or other appropriate Person, as the case
may be, of each of the parties thereto, and the Lender shall have received
evidence satisfactory to it that all actions necessary to perfect the Liens or
other security interest granted thereby have been, or promptly after the Closing
will be, taken.
SECTION 7.6 MORTGAGEE TITLE INSURANCE POLICY
The Borrower shall cause to be delivered to the Lender a
Mortgagee Title Insurance Commitment (the "Commitment") naming the Lender as
insured which Commitment shall have title insurance coverage in the amount of
THREE MILLION DOLLARS ($3,000,000.00). The Commitment and policy shall be
written by a title insurance company acceptable to the Lender and licensed by
the State of Florida, unrecorded easements, mechanic's liens and/or parties in
possession. All other exceptions shall be subject to the approval of the Lender
and Counsel to Lender. The Commitment must provide to the Lender "gap" and "Form
9" insurance coverage. The Commitment and policy must also give such other
affirmative insurance and reinsurance as reasonably required by the Lender and
Counsel to Lender. The Borrower shall provide at the request of Counsel to
Lender any corrective instruments, releases, satisfactions, affidavits, etc.,
necessary to cause the Commitment and policy to be issued. The Commitment,
policy and endorsements shall be on American Real Property Title Association
Loan forms approved in the State of Florida.
SECTION 7.7 CHASE FEDERAL LOAN DOCUMENTS
The Lender shall have received copies of the Chase Federal Loan
Documents in form and substance satisfactory to Lender certified by a
Responsible Officer of the Borrower to be true, correct and complete.
SECTION 7.8 EQUITY CONTRIBUTION
41
The Lender shall have received evidence that the Borrower has
invested into the Project a minimum equity contribution of not less than
$450,000.
SECTION 7.9 STOCK CERTIFICATES AND STOCK POWERS
The Lender shall have received the Pledge duly executed and
delivered by a Responsible Officer of Pledgor, together with the certificate(s)
evidencing the stock being pledged thereby and stock assignment powers separate
from certificate duly endorsed in blank for transfer.
SECTION 7.10 ACQUISITION CONTRACT, OPTION CONTRACT AND
TRACT B SALES CONTRACT
Borrower shall deliver to Lender shall have received copies of
the Acquisition Contract, the Option Contract and the Tract B Sales Contract,
and all amendments thereto, certified by a Responsible Officer of the Borrower
to be true, correct and complete.
SECTION 7.11 SOILS TEST
Lender shall have received a report as to soil borings showing
the Real Property to be suitable for construction of the Improvements and within
forty-five (45) days of completion of the filling activities of the Project,
shall provide soil compaction reports.
SECTION 7.12 [INTENTIONALLY DELETED]
SECTION 7.13 COPIES OF PERMITS, LICENSES AND APPROVALS
Lender shall have received copies of the excavation permit, tree
removal permit, land alteration permit, dredge and fill permit, storm water
discharge permit, the building permit and any other permits required by
applicable Governmental Authorities for the development of the Property.
SECTION 7.14 AVAILABILITY OF UTILITIES
Lender shall have received evidence of the availability and
suitability of the utilities needed to properly service the Improvements as to
their intended uses, including water, sewer, electric, telephone and natural gas
(if applicable).
SECTION 7.15 PLANS AND SPECIFICATIONS
Lender shall have received a complete set of plans and
specifications for the Acquisition Contract Development Work and, within fifteen
(15) days of completion shall provide to Lender
42
plans for the Tract Infrastructure Work, approved in writing by the Borrower and
the General Contractor, and identical to those reviewed and approved by the
appropriate Governmental Authority.
SECTION 7.16 CONSTRUCTION CONTRACT
Lender shall have received a copy of the Construction Contract
certified by a Responsible Officer of the Borrower to be true, correct and
complete.
SECTION 7.17 APPROVALS OF GOVERNMENTAL AUTHORITIES
Lender shall have received evidence that all applicable
Governmental Authorities have approved Borrower's development plan for the Real
Property (exclusive of individual site plan approvals for the tracts).
SECTION 7.18 COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS
Lender shall have received evidence that the Borrower's
development of the Real Property, construction of the proposed Improvements and
use of the Real Property complies in all respects with concurrency requirements
and all other applicable Governmental Requirements including, without
limitation, local comprehensive plan and local land development regulations,
zoning rules and regulations, environmental protection rules and regulations
pertaining to water supply, sewage disposal and air and water pollution, rules
and regulations governing the Mortgaged Real Property.
SECTION 7.19 CERTIFICATES FROM GENERAL CONTRACTOR AND
ENGINEER
Lender shall have received appropriate certificates from the
General Contractor and Borrower's engineer certifying (i) that the Borrower's
development of the Real Property is in compliance with all applicable
Governmental Requirements, and (ii) as to the status of permits and approvals
obtained by the Borrower in connection therewith.
SECTION 7.20 COST BREAKDOWN
Lender shall have received from the Borrower a detailed trade
breakdown of the cost of constructing the Acquisition Contract Development Work
and the Tract Infrastructure Work including an itemization of non-construction
and land costs.
SECTION 7.21 FLOOD HAZARD AREA
43
Lender shall have received evidence that the Real Property is not
located in an area identified as having special flood hazards pursuant to the
Flood Disaster Protection Act of 1973.
SECTION 7.22 SURVEY
Within thirty (30) days of completion of the Acquisition Contract
Development Work, Lender shall have received at least four (4) current sealed
copies of a survey for the Real Property prepared by a registered surveyor,
reflecting no conditions unsatisfactory to Lender or Counsel for Lender and
prepared in accordance with Lender's survey requirements.
SECTION 7.23 TRI-PARTY AGREEMENT
Lender, Chase Federal and Borrower shall have entered into the
Tri-Party Agreement, in form and substance satisfactory to Lender.
SECTION 7.24 NO MORATORIUM
The Lender shall have received a certification or certifications
or other evidence, in form and substance and from a Person or Persons
satisfactory to the Lender, with respect to any moratorium or other legal
impediment currently in effect, proposed or threatened, which would prohibit or
materially and adversely interfere in any way with the operation, development
(as to non-developed Real Property), sale or disposition of the Mortgaged Real
Property.
SECTION 7.25 INSURANCE
Lender shall have received copies of insurance certificates or
binders for, or other evidence of, the maintenance by Borrower of the insurance
required by Section 8.5 hereof, which shall be satisfactory in form and
substance to Lender in accordance with its insurance requirements.
SECTION 7.26 SUBORDINATION TO THE LOAN
The subordination to the Loan (pursuant to an agreement in form
and substance satisfactory to Lender) of all loans and other indebtedness
payable by the Borrower to any partner, officer, director, stockholder,
Subsidiary or Affiliate of the Borrower, the General Partner and the Operator
shall have been delivered to Lender.
SECTION 7.27 ADDITIONAL DOCUMENTS AND INSTRUMENTS
44
Lender shall have received all the instruments, documents and
Real Property contemplated to be delivered by the Borrower hereunder, and the
same shall be in full force and effect.
ARTICLE VIII
DEBTOR PARTIES' AFFIRMATIVE COVENANTS
The Debtor Parties covenant and agree that until the Note,
together with interest and all other indebtedness to the Lender under the terms
of this Agreement, are paid in full, unless specifically waived by the Lender in
writing:
SECTION 8.1 EXISTENCE AND QUALIFICATION
The Borrower shall do, or cause to be done, all things necessary
to preserve, renew and keep in full force and effect the Borrower's existence
and its rights, licenses and permits; shall comply with all laws applicable to
it, operate its business in a proper and efficient manner and substantially as
presently operated or proposed to be operated; and at all times shall maintain,
preserve and protect all franchises and trade names and preserve all Real
Property used or useful in the conduct of its business, and keep the same in
good repair, working order and condition, and from time to time make, or cause
to be made, all needful and proper repairs, renewals, replacements, betterments
and improvements thereto, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times. Borrower
will not, no will Borrower permit any Guarantor to amend, modify or otherwise
change the articles or incorporation or bylaws of Borrower in a manner which
would adversely affect the Borrower's existence as a single purpose entity.
SECTION 8.2 FINANCIAL STATEMENTS AND INFORMATION
The Borrower shall keep its books of account (which shall not be
commingled) in accordance with Generally Accepted Accounting Principles and
shall furnish to Lender the following financial information, statements and
reports:
(a) MONTHLY REPORTS. Within fifteen (15) days of the end of each
calendar month, a report of (i) all fundings pursuant to any loans in connection
with the Project or the Real Property, (ii) all contracts, letters of intent,
reservation agreements, options or similar agreements relating to the sale of
Tracts or residential units comprising a portion of the Real Property and any
material changes in the status of any such contracts previously reported on,
(iii) any sales of Tracts or residential units comprising a portion of the Real
Property, (iv) copies of draw requests under the Chase Federal Loan, and (v)
such other matters with respect to the
45
Project or the Real Property as Lender may request, all certified by a
Responsible Officer as being true and accurate.
(b) QUARTERLY REPORTS. Within forty-five (45) days after the end
of each fiscal quarter of the Borrower, (i) a profit and loss statement and
balance sheet, (ii) a listing and aging of accounts payable, (iii) an accounting
of Gross Revenue, Expenses, Cash Flow, and Net Profit for the Borrower, and (iv)
such other financial and related information with respect to the Borrower and
the Project as Lender may request, all prepared in accordance with Generally
Accepted Accounting Principles and certified by a Responsible Officer as being
true and accurate.
(c) ANNUAL REPORTS. Within sixty (60) days of the end of each
fiscal year of the Borrower, internally prepared financial statements of the
Borrower, including (i) a profit and loss statement and a balance sheet as of
the end of such year, (ii) an accounting of Gross Revenue, Expenses, Cash Flow,
and Net Profit for the Borrower for the prior fiscal year together with such
information as may be required to compute the First Contingent Return, the
Second Contingent Return, the Borrower's First Priority Return and the
Borrower's Second Priority Return, reconciling reports provided with respect to
each of the fiscal quarters within such fiscal year, and (iii) such other
financial and related information with respect to the Borrower and the Project
as Lender may request, all prepared in accordance with Generally Accepted
Accounting Principles and certified by a Responsible Officer as being true and
accurate.
(d) AUDITED ANNUAL REPORTS. Within 120 days after the end of
their respective fiscal years, the Borrower and each of the other
Debtor Parties shall provide to Lender (i) a profit and loss
statement and reconciliation of surplus statement for such year,
and a balance sheet as of the end of such year, audited without
scope limitations by independent certified public accountants of
recognized standing selected by the Debtor Parties and satisfactory
to Lender, (ii) an accounting of Gross Revenue, Expenses, Cash
Fl provided with respect to each of the fiscal
quarters within such fiscal year, together with such information as
may be required to compute the First Contingent Return, the Second
Contingent Return, the Borrower's First Priority Return and the
Borrower's Second Priority Return, for such fiscal year, (iii) such
other financial and related information as Lender may request, all
prepared in accordance with Generally Accepted Accounting
Principles and certified by a Responsible Officer as being true and
accurate and (iv) a representation that their examination has
revealed there exists no Event of Default and no event which, with
the giving of notice or passage of time, or both, would constitute
such an Event of Default, or, if this is not the case, that one or
more specified Events of Default have occurred. The outside
46
accountant and the opinion of the outside accountant must be
acceptable to the Lender.
(e) TAX RETURNS. Within fifteen (15) after filing, complete
copies of the Borrower's and each of the Debtor Parties' annual tax
returns.
(f) BUDGET. On or before May 15, 1996, Borrower shall provide a
budget for the Project commencing July 1, 1996 which shall be updated every
November 15th and May 15th occurring thereafter and shall provide projections on
an individual tract and aggregate basis. The aforesaid budget shall include,
without limitation, a narrative description of the Borrower's business plan for
such upcoming year (each, a "BUDGET", collectively, the "BUDGETS").
(g) ADDITIONAL INFORMATION. The Borrower, with reasonable
promptness, shall furnish to Lender such other data as Lender may request and
will at all times and from time to time permit Lender by or through any of its
officers, agents, employees, attorneys or accountants to inspect and make
extracts from the Borrower's books and records, which may include, without
limitation, review and obtaining copies of all invo SECTION 8.3 [INTENTIONALLY
DELETED]
SECTION 8.4 TAXES AND CLAIMS
(a) The Borrower shall properly pay and discharge:
(a) all Impositions, including payroll taxes, prior to the date on which
penalties attach thereto, unless and to the extent that such Impositions are
being diligently contested in good faith and by appropriate proceedings and
appropriate reserves therefor have been established; and (b) all lawful claims,
whether for labor, materials, supplies, services or anything else which might or
could, if unpaid, become a lien or charge upon the properties or assets of the
Borrower unless and to the extent only that the same are transferred to bond,
being diligently contested in good faith and by appropriate proceedings, and
appropriate reserves therefor have been established. Borrower shall deliver to
Lender receipts evidencing the payment of all Impositions within thirty (30)
days after same become due and payable or before same shall become delinquent,
whichever is sooner.
(b) In the event of the passage, after the date of
this Agreement, of any law (i) making it illegal for the Borrower to pay the
whole or any part of the Impositions, or charges or liens herein required to be
paid by Borrower, or (ii) rendering the payment by Borrower of any and all taxes
levied
47
or assessed upon the Mortgage, the Note, or the other Loan Documents or the
interest in the Mortgaged Property represented by this Mortgage unlawful, or
(iii) rendering the covenants for the payment of the matters set forth in
Subparts (i) and (ii) of this Subsection by Borrower legally inoperative, the
Borrower shall pay, upon demand, the entire unpaid Obligations notwithstanding
anything in the Note, the Mortgage, or the other Loan Documents to the contrary.
SECTION 8.5 INSURANCE
Until the expiration of this Agreement, Borrower shall maintain,
at Borrower's cost and expense, the following insurance coverages in full force
and effect at all times throughout the term of this Agreement:
(a) LIABILITY INSURANCE. Borrower will obtain and
keep in full force a "Broad Form Comprehensive General Liability" insurance
coverage for both Borrower and any contractor performing services to the Real
Property in the minimum coverage amount of One Million Dollars ($1,000,000.00)
per occurrence and combined single limit ("CSL") of Ten Million Dollars
($2,000,000.00), with excess umbrella liability coverage of Five Million Dollars
($5,000,000).
(b) HAZARD INSURANCE. Upon completion of the
Improvements, Borrower shall keep the Improvements insured at all times against
loss or damage by fire and other hazards included within the term "all risk" or
"extended coverage" and against such other hazards as Lender may require in the
full insurable value thereof (or such lesser amount as Lender may authorize in
writing), with an insurer satisfactory to Lender. Such policy shall include a
Replacement Cost and Agreed Amount/Stipulated Value Endorsement and a Sinkhole
Endorsement, if deemed necessary by Lender.
(c) FLOOD INSURANCE. If at any time the Real
Property or any portion thereof is located in a "Flood Hazard Area" pursuant to
the Flood Disaster Protection Act of 1973 or any successor or supplemental act
thereto, flood insurance in the maximum amount available or such other amount as
Lender may reasonably request.
(d) BUILDER'S RISK INSURANCE. Prior to commencement
of construction of the Improvements, an "All risk", non-reporting, completed
value builder's risk insurance policy, which policy shall include Agreed Amount,
Replacement Cost, Permit to Occupy and Vandalism/Malicious Mischief
Endorsements.
(e) OTHER INSURANCE. Boiler and machinery
insurance, worker's compensation insurance, wind damage insurance, and other
insurance coverages as Lender may reasonably require.
48
The policy or policies of insurance shall (i) be from companies
and in coverage amounts acceptable to Lender, (ii) contain a standard Lender
clause in favor of Lender naming Lender as a Lender and including a lender's
loss payee clause in such policy, as applicable (iii) not be terminable or
modified without thirty (30) days' prior written notice to Lender, and (iv) be
evidenced by original policies or certified copies of policies deposited with
Lender, as Lender may elect, to be held by Lender until the Obligations shall
have been fully paid and discharged. Borrower shall furnish Lender satisfactory
evidence of payment of all premiums required and similar evidence of renewal or
replacement coverage not later than thirty (30) days prior to the date any
coverage will expire.
Each insurance policy or endorsement required herein shall be
written by an insurer having a rating not less than "A-XII" Best's Rating
according to the most current edition of Best's Key Rating Guide as determined
at the time of the initial policy and at all times during the term hereof. All
policies shall indicate that notices related to such insurance shall be sent to
Lender at:
AMRESCO Funding Corporation
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Loan Servicing Department
(f) The Borrower shall from time to time, upon
request of Lender, promptly furnish or cause to be furnished to Lender evidence
in form and substance satisfactory to Lender of the maintenance of all insurance
required by this Section to be maintained, including, but not limited to, such
originals or copies as Lender may request of policies, certificates of
insurance, riders and endorsements relating to such insurance and proof of
premium payments. Lender shall be under no duty to examine such certificates or
to advise the Borrower in case the insurance is not sufficient or not in
compliance herewith.
SECTION 8.6 SALES
The Borrower shall achieve at least sixty (60%) percent of the
sales projected in the Borrower's sales projections for any rolling six (6)
month period, commencing four (4) months from the earlier to occur of (a) the
date of pouring the first slab for a residence under contract for sale to a
third party purchaser, or (b) on the effective date of such a contract for sale,
in the event the slab for such residence has previously been poured, which sales
projections shall be approved by the Lender prior to Closing.
SECTION 8.7 BOOKS AND RESERVES
49
The Borrower shall: (a) maintain at all times true and complete
books, records and accounts in which true and correct entries shall be made of
its transactions in accordance with Generally Accepted Accounting Principles
consistently applied and consistent with those applied in the preparation of the
financial statements referred to in Section 8.2; and (b) by means of appropriate
quarterly entries reflected in its accounts and in all financial statements
furnished pursuant to Section 8.2, proper liabilities and reserves for all taxes
and proper reserves for depreciation, renewal and replacement, obsolescence and
amortization of its properties and bad debts, all in accordance with Generally
Accepted Accounting Principles consistently applied as above.
SECTION 8.8 INSPECTION BY LENDER
The Borrower shall allow any representative of Lender to visit
and inspect any of the Mortgaged Property or other properties of the Borrower,
to examine the books of account and other records and files of the Borrower, to
make copies thereof and to discuss the affairs, business, finances and accounts
of the Borrower with its officers and employees, all at such reasonable times
and upon reasonable prior notice and as often as Lender may request.
SECTION 8.9 LOCATION OF COLLATERAL
The Borrower shall keep the Collateral, to the extent applicable,
at its principal place of business or at the Mortgaged Property. In the event
the Borrower intends to maintain stores, warehouses or any other location where
any of the Collateral may be kept other than principal place of business, the
Borrower shall provide Lender with the address of such location or locations and
shall execute and deliver to Lender a UCC-l financing statement covering the
Collateral for filing in any other state before any Collateral is brought into
such other State.
SECTION 8.10 PAY INDEBTEDNESS TO THE LENDER AND PERFORM
OTHER COVENANTS
The Borrower shall: (a) make full and timely payments of the
principal of and interest on the Note and all other indebtedness of the Borrower
to the Lender (including without limitation the Contingent Returns), whether now
existing or hereafter arising; (b) duly comply with all the terms and covenants
contained in each of the instruments and documents given to the Lender pursuant
to this Agreement at the times and places and in the manner set forth herein;
and (c) at all times maintain the liens and security interests provided for
under or pursuant to this Agreement as valid and perfected liens and security
interests on the Real Property intended to be covered thereby.
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SECTION 8.11 LITIGATION
The Borrower will promptly notify Lender upon the commencement of
any action, suit, claim, counterclaim or proceeding against or investigation of
the Debtor Parties where the damage claim is in excess of $25,000 or where the
litigation may materially adversely affect the Debtor Parties' business (except
when the alleged liability is fully covered by insurance); and shall provide
Lender with an opinion of counsel concerning the litigation or investigation and
the probable outcome thereof, if requested by Lender.
SECTION 8.12 DEFAULTS OR ASSESSMENTS
The Borrower shall promptly notify Lender in writing of: (a) any
material assessment by any Governmental Authority for unpaid taxes as soon as
the Borrower has knowledge thereof and shall supply Lender with copies of all
notices from the Internal Revenue Service or any other taxing authority; and (b)
any alleged default by the Debtor Parties in the performance of or any material
modification of any of the terms or conditions contained in any agreement,
mortgage, indenture or instrument to which the Debtor Parties are a party or
which is binding upon the Debtor Parties and of any default by the Debtor
Parties in the payment of any of its Indebtedness.
SECTION 8.13 EMPLOYEE BENEFIT PLANS
The Borrower shall establish no employee benefit plans of any
nature without the prior written consent of Lender. Each pension, profit
sharing, or other employee benefit plan at any time maintained by the Borrower
shall be in material compliance with ERISA and all applicable rules and
regulations adopted by regulatory authorities pursuant hereto. The Borrower will
cause to be filed all material reports required to be filed by ERISA, the Code,
and such rules and regulations.
SECTION 8.14 SUBORDINATION OF INDEBTEDNESS
All indebtedness of the Borrower to any officer, director,
shareholder, Subsidiary or Affiliate, whether now existing or hereafter
incurred, shall be and is hereby subordinated to the indebtedness of the
Borrower to the Lender, and any claims by said parties against the Borrower are
subordinated to the indebtedness of the Borrower to the Lender and no such
claims shall be made against the Borrower until the Loan and the Contingent
Returns are paid in full.
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SECTION 8.15 CORRESPONDENCE WITH ACCOUNTANTS
The Borrower shall promptly deliver to Lender copies of all
material correspondence between the Debtor Parties and the Debtor Parties's
independent accountants.
SECTION 8.16 ESTOPPEL AFFIDAVITS
The Borrower, within 10 days after written request from Lender,
will furnish a written statement in form satisfactory to Lender, duly
acknowledged: (i) setting forth the unpaid principal balance of, and the
interest and other sums due on, the indebtedness evidenced by the Note and/or
secured by the Mortgage or any of the other Loan Documents; (ii) stating whether
or not any offsets or defenses exist against the payments due under the Note,
the Mortgage or any of the other Loan Documents; (iii) stating the current
maturity date of the Note; (iv) setting forth the amount and for which purpose
any escrow account is being held by Lender; and (v) setting forth such other
information as Lender may reasonably request from time to time.
SECTION 8.17 CHANGE OF NAME, PRINCIPAL PLACE OF BUSINESS,
ETC.
The Borrower shall notify Lender immediately of any change in the
name of any of the Debtor Parties, the principal place of business of the Debtor
Parties, the office where the books and records of the Debtor Parties are kept
or any change in the registered agent of the Debtor Parties for the purpose of
service of process.
SECTION 8.18 ENVIRONMENTAL LAWS
The Borrower shall keep and maintain the Mortgaged Real Property
in compliance in all material respects with all Environmental Laws; promptly
advise the Lender in writing of (a) any and all enforcement, cleanup, removal or
other governmental or regulatory actions instituted, completed or threatened in
writing pursuant to any applicable Environmental Laws, (b) any and all claims
made or threatened in writing by any third party against Borrower or the
Mortgaged Real Property relating to damage, contribution, cost recovery,
compensation, loss or injury resulting from any Hazardous Materials and (c)
discovery by Borrower of any occurrence or condition on any Real Property
adjoining or in the vicinity of the Mortgaged Real Property that could
reasonably be expected to cause the Mortgaged Real Property or any part thereof
to be subject to any restrictions on the ownership, occupancy, transferability
or use of the Mortgaged Real Property under any Environmental Laws.
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SECTION 8.19 COMPLIANCE WITH LAWS
The Borrower shall do or cause to be done all acts and things
necessary to effect compliance with all applicable local, state and federal
zoning, land use and building codes and shall do or cause to be done all acts
and things required for the preservation and protection of the Mortgaged
Property such that the Mortgaged Real Property are, at all times, in compliance
with all applicable zoning, land use and building codes. The Borrower shall also
do or cause to be done all acts and things necessary so that the Mortgaged Real
Property shall at all times be in full compliance with all covenants,
restrictions, agreements or instruments affecting the Mortgaged Real Property
and the uses thereof.
SECTION 8.20 PURCHASE OF MATERIALS AND SUPPLIES
In the event Borrower purchases any materials, supplies or
services for the Project from Affiliates, all such items shall be purchased at
cost and written verification of the same shall be provided to Lender.
SECTION 8.21 INDEMNIFICATION
(a) Borrower shall at its own expense, and does hereby agree to,
protect, indemnify, reimburse, defend and hold harmless Lender and its
directors, officers, shareholders, agents, employees attorneys, successors and
assigns from and against any and all liabilities (including strict liability),
losses, suits, proceedings, settlements, judgments, orders, penalties, fines,
liens, assessments, claims, demands, damages, injuries, obligations, costs,
disbursements, expenses or fees, of any kind or nature (including attorneys'
fees and expenses paid or incurred in connection therewith) arising out of or by
reason of (i) an incorrect legal description of the Real Property; (ii) any
action, or inaction of Lender in connection with the Loan Documents, the
Contingent Return Documents or the Mortgaged Property constituting gross
negligence or willful misconduct or a material breach of the Loan Documents;
(iii) the construction of any Improvements; (iv) the use and operation of the
Mortgaged Property; (v) any acts or omissions of Borrower or any other Person
at, on or about the Mortgaged Property regarding the contamination of air, soil,
surface waters or groundwaters over, on or under the Mortgaged Property; (vi)
the presence, whether past, present or future, of any Hazardous Material on, in
or under the Mortgaged Property; (vii) any past, present or future events,
conditions, circumstances, activities, practices, incidents, actions or plans
involving the manufacture, processing, distribution, use, transport, handling,
treatment, storage, disposal, cleanup, emission, discharge, seepage, spillage,
leakage, release or threatened release of any Hazardous Material on, in, under
or from the Mortgaged Property, in connection with Borrower's operations on
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the Mortgaged Property, or otherwise; or (viii) the acts of any third parties,
including, without limitation, third party claims, except to the extent that any
loss therefrom is caused by the gross
negligence or willful misconduct of Locuments; all of the foregoing regardless
of whether within the control of Lender.
(b) The indemnifications of this Section 8.21 shall survive the
full payment and performance of the Loan and the Contingent Returns.
SECTION 8.22 SOLVENCY
Borrower is and will remain solvent and Borrower shall pay its
debts from its assets as the same shall become due. In connection therewith,
Borrower shall maintain adequate capital for the normal obligations reasonably
foreseeable in a business of its size and character and in light of its
contemplated business operations. Neither Borrower nor any constituent party of
Borrower will seek the dissolution or winding up, in whole or in part, of
Borrower, nor will Borrower merge with or be consolidated into any other entity.
SECTION 8.23 SEPARATE ACCOUNTS
Borrower will maintain books and records and bank accounts
separate from those of its Affiliates, including, without limitation,
Transeastern, and any constituent party of Borrower, and Borrower will file its
own tax return. In connection therewith, Borrower shall not commingle the funds
and other assets of Borrower with those of any Affiliate, any Guarantor, any
constituent party of Borrower or any other person. Borrower has and will
maintain its assets in such a manner that it will not be costly or difficult to
segregate, ascertain or identify its individual assets from those of any
constituent party or Borrower, an Affiliate, a Guarantor or any other Person.
ARTICLE IX
BORROWER'S NEGATIVE COVENANTS
The Borrower covenants and agrees that from the date hereof and
until payment in full of the principal of and interest on the Note, and all
other indebtedness to the Lender under this Agreement, unless Lender shall
otherwise consent in writing, it will not, either directly or indirectly, do any
of the following:
SECTION 9.1 TYPE OF BUSINESS
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The Borrower will not engage in any business other than the
ownership, development and operation of the Project. In addition, Borrower does
not own and will not own any asset or property other than (a) the Real Property,
and (b) the incidental personal property necessary for the ownership,
construction and operation of the Project.
SECTION 9.2 MORTGAGES, LIENS, ETC.
The Borrower will not create, incur, assume or suffer to exist
any mortgage, pledge, security interest, encumbrance, lien or charge of any kind
upon any of the Borrower's properties or assets of any character, whether owned
at the date hereof or hereafter acquired, or hold or acquire any Real Property
or assets of any character under conditional sales or other title retention
agreements, except:
(a) Mortgages, liens, pledges and security
interests in favor of the Lender;
(b) The Chase Federal Loans subject, however, to
the terms of the Tri-Party Agreement;
(c) (i) Liens arising out of judgments or awards in respect of
which the Borrower shall in good faith be prosecuting an appeal or proceedings
for review and in respect of which the Borrower shall have secured a subsisting
stay of execution pending such appeal or procedures for review, provided the
Borrower shall have set aside on its books adequate reserves with respect to
such judgment or award; (ii) liens for taxes, assessments or governmental
charges or levies, provided payment thereof shall not at the time be required in
accordance with the provisions of Section 8.4; (iii) deposits, liens or pledges
to secure payments of worker's compensation, unemployment insurance, old age
pensions or other social security obligations or the performance of bids,
tenders, leases, contracts (other than contracts for the payment of money),
public or statutory obligations, surety, stay or appeal bonds or other similar
obligations arising in the ordinary course of business; (iv) mechanics',
workmens', repairmens' warehousemans', vendors' or carriers' liens or other
similar liens arising in the ordinary course of business which have been
transferred to bond as required herein; (v) statutory landlords' liens under
leases to which the Borrower is a party; and (vi) zoning restrictions,
easements, license restrictions on the use of Real Property or minor
irregularities relating thereto which do not materially impair the use of such
Real Property in the operation of the business of the Borrower or the value of
such Real Property or the purpose of such business; and
(d) The Permitted Title Exceptions.
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SECTION 9.3 COVENANT TO SUBORDINATE
In the event of a prepayment of the Loan in full, Lender agrees
to subordinate the Contingent Return Documents to senior secured financing which
shall not exceed the amount of the outstanding indebtedness of the Loan at the
time the Loan is paid in full and on such other terms and conditions which are
acceptable to Lender.
SECTION 9.4 INDEBTEDNESS
The Borrower will not create, incur, assume or suffer to exist,
contingently or otherwise, any Indebtedness, except:
(a) Indebtedness of the Borrower to the Lender;
(b) Indebtedness pursuant to the Chase Federal Loan
Documents subject, however, to the terms of the Tri-Party Agreement;
(c) The Tract C and E Acquisition Loan and/or the
Construction Loan(s) subject, however, to the terms of Section 2.5 hereof.
(e) Subordinated Indebtedness;
(e) Unsecured current liabilities incurred with
trade creditors relating to the Project in the ordinary course of business other
than those which are for money borrowed or are evidenced by bonds, debentures,
notes or other similar instruments;
(f) Indebtedness (not overdue) secured by
mortgages, liens or security interests permitted by Section 9.2 hereof;
(g) Indebtedness under guarantees or for other
contingent liabilities to the extent permitted by Section 9.5 hereof; or
(h) Liability under operating leases required in
the normal day-to-day operation of the business of the Borrower.
SECTION 9.5 LOANS, INVESTMENTS AND GUARANTEES
The Borrower will not lend or advance money, credit or Real
Property to any Person, or invest in (by capital contribution or otherwise), or
purchase or repurchase the stock or indebtedness, or all or a substantial part
of the assets or properties, of any Person, or guarantee, assume, endorse, or
otherwise become responsible for (directly or indirectly or by any instrument
having the effect of assuring any Person's payment or performance or capability)
the indebtedness, performance, obligations, stock or dividends of any Person, or
agree to do any of the foregoing except:
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(a) Endorsement of negotiable instruments for
deposit or collection in the ordinary course of business;
(b) Investments in readily marketable, direct
obligations of the Government of the United States of America maturing not more
than one year after the date of the purchase thereof and/or in certificates of
deposit issued by Lender;
(c) Investments representing stock or obligations
issued to the Borrower in settlement of claims against any other Person by
reason of an event of bankruptcy or a composition or readjustment of debt or a
reorganization of any debtor of the Borrower;
(d) Investments representing the indebtedness of
any Person owing as a result of a sale by the Borrower in the ordinary course of
business of tangible personal Real Property no longer required in its business;
or
(e) Travel advances to officers and employees.
(f) Payment of brokerage commission advances for
residential sales which are customary in the construction industry subject,
however, to the prior written approval of Lender.
SECTION 9.6 MERGER, SALE OF ASSETS, DISSOLUTION, ETC.
The Borrower will not enter into any transaction of merger or
consolidation, or transfer, sell, assign, lease or otherwise dispose of (other
than sales of products and services in the ordinary course of business) all or a
substantial part of its properties or assets, or any of its notes or
Receivables, or any assets or properties necessary or desirable for the proper
conduct of its business or any interest in any of the foregoing, or change the
nature of its business, conclude, liquidate or dissolve, or acquire any assets
or business from or Capital Securities of any Person, or agree to do any of the
foregoing.
SECTION 9.7 TRANSFER OF OWNERSHIP INTEREST IN BORROWER AND
MORTGAGED PROPERTY
(a)The Borrower shall not permit the sale or other transfer
of any ownership interest(beneficial or otherwise) in the Borrower.
(b) Except as may otherwise be expressly permitted in this
Agreement, Borrower shall not sell, convey, or transfer or permit to be sold,
conveyed or transferred any interest in the Mortgaged Property or any part
thereof.
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SECTION 9.8 DISTRIBUTIONS; RESTRICTED PAYMENTS
The Borrower shall not make or declare or otherwise become
obligated to make (A) any dividend or other distribution, directly or
indirectly, on account of any Capital Securities of the Borrower (except for
annual cash distributions to its shareholder in an aggregate amount or any
Subsidiary (other than dividends and other distributions payable to the
Borrower), (B) any payment on account of the principal of or premium, if any, on
any indebtedness convertible into Capital Securities of the Borrower or any
Subsidiary ( other than any such payment to the Borrower), (C) any payment on
account of any purchase, redemption, retirement, exchange or conversion of any
Capital Securities of the Borrower or any Subsidiary (other than any such
payment to the Borrower), (D) any other payment, loan or advance to a
shareholder of the Borrower or any other Affiliate of the Borrower or Affiliate
of such shareholder (including the Principals) or (E) any forgiveness or release
without adequate consideration by Borrower of any indebtedness or other
obligation owing to Borrower by a Person that is a shareholder of Borrower or an
Affiliate of any such shareholder (including the Principals).
SECTION 9.9 TRANSACTIONS WITH AFFILIATES
The Borrower shall not effect any transaction with any Affiliate
(including the Principals) on a basis less favorable than would at the time be
obtainable for a comparable transaction in an arms-length dealing with an
unrelated third party.
SECTION 9.10 ISSUANCE OR DISPOSITION OF CAPITAL SECURITIES
The Borrower shall not issue any of its Capital Securities or
sell, transfer or otherwise dispose of any Capital Securities of any Subsidiary.
SECTION 9.11 CHANGE IN DOCUMENTS
The Borrower shall not amend, supplement, terminate or otherwise
modify its articles of incorporation or bylaws.
SECTION 9.12 CHANGE OF FISCAL YEAR, ETC.
The Borrower shall not change its fiscal year nor will the
Borrower amend in any respect its entity documents from those in existence on
the date of this Agreement or change its accounting methods or practices, its
depreciation or amortization policy or rates, except as required to comply with
law or with Generally Accepted Accounting Principles.
SECTION 9.13 COVENANT NOT TO COMPETE
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From the date hereof and for a period of one (1) year after the
date that Lender sells the Project after acquiring title thereto or the stock of
the Borrower pursuant to an occurrence of an Event of Default (such period, the
"RESTRICTION PERIOD"), neither the Borrower nor any Affiliate of the Borrower or
Affiliate of a shareholder of the Borrower (including the Principals) nor
Affiliate of any of the foregoing (collectively, the "RESTRICTED PARTIES")
shall, directly or indirectly, own, manage, invest or otherwise acquire any
economic stake or interest in, or otherwise engage or participate in any manner
whatsoever (whether as proprietor, partner, shareholder, investor, manager,
owner, officer, director, employee, agent, lender, borrower, guarantor, broker,
investor, independent contractor, consultant, advisor, representative, lessor,
lessee or other participant), or prepare to do any of the foregoing, with or in
any Person or other business enterprise in any form which engages in, directly
or indirectly, any business that is similar to the business as currently
conducted by the Borrower or as the same may be conducted by the Borrower at any
time during the Restriction Period, anywhere within one-half (1/2) mile of the
Real Property. Nothing in this Section 9.13 shall prohibit the Restricted
Parties from owning as a passive investment less than 1% of the outstanding
shares of capital stock in a corporation, which shares are listed on a national
securities exchange or publicly traded in the over-the-counter market. The
Restricted Parties acknowledge and confirm that (i) the length of the
Restriction Period and geographical restrictions contained herein are fair and
reasonable and (ii) the provisions and restrictions set forth in this Section
9.13 are reasonable and necessary for the protection of the legitimate interests
of the Borrower and Lender.
The Restricted Parties acknowledge that the Borrower and/or the
Lender will be irreparably harmed (and damages at law would be an inadequate
remedy) by a breach or threatened breach of the provisions of this Section 9.13.
Therefore, in the event of a breach or threatened breach by any Restricted Party
of any provision of this Section 9.13, the Lender and/or Borrower, as
applicable, shall be entitled, in addition to all other rights, remedies or
damages to which it is entitled, to injunctions restraining such breach and/or
to a decree for specific performance of the provisions of this Section 9.13,
without being required to show any actual damage or to post any bond or other
security. The existence of any claim or cause of action by Borrower and/or
Lender predicated on the provisions of this Section 9.13, shall not constitute a
defense to the enforcement by the Borrower and/or Lender of these covenants. In
the event the Borrower and/or Lender should bring any legal action or other
proceeding for the enforcement of this Section 9.13, the time for calculating
the applicable Restriction Period or terms of any other restriction herein shall
not include the period of time commencing with the filing of legal action or
other proceeding to enforce the terms of
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this Section 9.13 through the date of final judgment or final resolution,
including all appeals, if any, of such legal action or other proceeding.
SECTION 9.14 PURCHASE AGREEMENTS. Borrower shall not amend or
otherwise modify or amend any of the existing Purchase Agreements for the sale
of the all or any part of the Real Property, without Lender's consent. In
addition, Borrower shall not enter into any other purchase agreements for all or
any part of the Real Property, without Lender's consent, or thereafter amend or
modify the same, without the Lender's consent.
ARTICLE X
EVENTS OF DEFAULT
The occurrence of any one of more of the following events is a
Default hereunder and the continuance of any such Default beyond the period (if
any) provided below within which such Defaults may be cured shall be an Event of
Default hereunder:
SECTION 10.1 IMMEDIATE ACCELERATION
(A) Any of the Debtor Parties: (a) shall file a
voluntary petition under Title 11 of the United States Code for adjudication as
a bankrupt; (b) shall file an answer seeking reorganization or an arrangement
under any bankruptcy or similar statute of the United States of America or any
subdivision thereof or of any foreign jurisdiction in response to an involuntary
petition; (c) shall consent to the filing of a petition in any such bankruptcy
or reorganization proceeding; (d) shall consent to the appointment of a receiver
or trustee or officer performing similar functions with respect to any
substantial part of its Real Property; (e) shall make a general assignment for
the benefit of its creditors; or (f) shall execute a consent to any other type
of insolvency proceedings (under the Bankruptcy Act or otherwise) or any
informal proceeding for the dissolution or liquidation of, or settlement of,
claims against or winding up of affairs of, the Company or the Partnership; or
(B) The appointment of a receiver or trustee or
officer performing similar functions for any of the Debtor Parties for any of
its assets, or the filing against any of the Debtor Parties of a petition for
adjudication as a bankrupt or insolvent or for reorganization under any
bankruptcy or similar laws of the United States of America or of any state
thereof or of any foreign jurisdiction, or the institution against any of the
Debtor Parties of any other type of insolvency proceeding (under the Bankruptcy
Act or otherwise) or of any formal or informal proceeding for the
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dissolution or liquidation, settlement of claims against or winding up of
affairs, of any of the Debtor Parties, and the failure to have such appointment
vacated or such petition or proceeding dismissed within sixty (60) days after
such appointment, filing or institution;
then the credit hereby granted and all obligations to make advances hereunder
shall immediately terminate without notice, and all principal and interest owing
hereunder shall forthwith mature and become due and payable without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived.
SECTION 10.2 DISCRETIONARY ACCELERATION
(a) Default by the Borrower in the payment of any
principal, interest or payment within fifteen (15) days after the same becomes
due to the Lender hereunder or under the Note;
(b) Default in the payment or performance of any
other liability, obligation or covenant of the Borrower to the Lender hereunder,
under the Loan Documents or under any other agreement with the Lender (including
without limitation the Tri-Party Agreement), and continuance thereof for thirty
(30) days after written notice to the Borrower from the Lender;
(c) Default in the performance or observance of any
term, covenant, condition or agreement of any Debtor Party contained in any
Security Document or Loan Document to which such Debtor Party is a party and
continuance thereof for thirty (30) days after written notice to the Borrower
from the Lender;
(d) If, on or after the Closing Date, (i) for any
reason (other than any act on the part of any of the Lender) any Loan Document
ceases to be in full force and effect in any material respect or any of the
Liens created by any Loan Document ceases to be a valid and perfected Lien in
the priority set forth in the Tri- Party Agreement, or (ii) any party to any
Loan Document (other than the Lender) shall assert in writing that any such
document or agreement has ceased to be in full force and effect and Lender shall
have determined that such assertion constitutes an Event of Default;
(e) Any representation, warranty, statement,
certificate, schedule or report made or furnished by any of the Debtor Parties
proves to have been false or erroneous in any material respect at the time of
the making thereof, or to have omitted any substantial liability or claim
against any of the Debtor Parties, or if on the date of execution of this
Agreement there shall have been any materially adverse change in any of the
facts disclosed therein, which matters shall not have been
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disclosed to the Lender at or prior to the time of such execution as which
Borrower shall have a period of ten (10) days following written notice to prove
that such matters were previously disclosed to Lender prior to execution of this
Agreement or are not erroneous;
(f) The rendition by any court of a final judgment
against the Borrower in excess of $25,000.00 which shall not be satisfactorily
stayed, discharged, vacated or set aside within thirty (30) days of the making
thereof; or the attachment of the Real Property which has not been released or
provided for to the satisfaction of Lender within thirty (30) days after the
making thereof;
(g) Any litigation or any proceeding which is
pending against any of the Debtor Parties or is threatened (and which is not
covered by adequate insurance as determined by Lender in its reasonable
discretion), the outcome of which would probably seriously affect the continued
operation of the applicable Debtor Party, and the applicable Debtor Party
failing to take corrective measures reasonably satisfactory to Lender within
thirty (30) days after notice from Lender;
(h) Borrower's failure to achieve the sales
projections as set forth in Section 8.6 hereof;
(i) If any Chase Federal Letters of Credit are
drawn upon and are not refunded by the applicable governmental authority or
reimbursed by the Guarantors within forty-five (45) days thereafter;
(j) A default or an event of default under any of
the Guaranty or the Funding Agreement;
(k) A default or an event of default is declared
under any of the Chase Federal Loan Documents and the same is not cured within
any applicable grace period;
(l) Transeastern shall cease to own, directly or
indirectly, 100% of the outstanding ownership interests in the Borrower.
(m) A default or an event of default is declared
under the Tract C and E Acquisition Loan and/or the Construction Loan.
then, upon the occurrence of any such Default and the execution of the
applicable grace period, the Lender, at its option, may terminate the Loan
hereby granted, together with all obligations of Lender hereunder, by written
notice to that effect to the Borrower and may declare (i) all principal and
interest owing hereunder, and (ii) the Contingent Returns, to be mature and be
forthwith due and payable without presentment, demand, protest or further notice
of
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any kind, all of which are hereby expressly waived or may elect not to
accelerate the Loan but increase the interest rate under the Note up to the
default rate of interest. Lender acknowledges that in the event Borrower is not
able to cure any of the non-monetary Defaults within the required grace periods
(if any) after diligently attempting to cure same, Borrower may have an
additional time to cure same provided, however, such additional grace period
shall in no event exceed thirty (30) days after expiration of the initial grace
period.
SECTION 10.3 WAIVER OF DEFAULT
Lender at any time may waive any Default or any Event of Default
which shall have occurred and any of its consequences, in which case the parties
hereto shall be restored to their former positions and rights and obligations
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon, and no such waiver shall
be effective unless it is in a written document executed by a duly authorized
officer.
ARTICLE XI
REMEDIES FOR DEFAULT
Upon the occurrence of an Event of Default, Lender shall have the
following remedies:
SECTION 11.1 ACTION FOR ENFORCEMENT
In case any one or more Events of Default shall occur and be
continuing, Lender may proceed to protect and enforce its rights or remedies
either by suit in equity or by action at law, or both, whether for the specific
performance of any covenant, agreement or other provision contained herein, in
the Note, in the Contingent Return Mortgage or in any document or instrument
delivered in connection with or pursuant to this Agreement, or to enforce the
payment of the Note, the Contingent Returns or any other legal or equitable
right or remedy.
SECTION 11.2 RIGHTS AND REMEDIES CUMULATIVE
No right or remedy herein conferred upon Lender is intended to be
exclusive of any other right or remedy contained herein, in the Note, Loan
Documents, Contingent Return Documents or in any instrument or document
delivered in connection with or pursuant to this Agreement, and every such right
or remedy shall be cumulative and shall be in addition to every other such right
or remedy contained herein and therein or now or hereafter existing at law or in
equity or by statute or otherwise. In the event of any conflict
63
among the Loan Documents as to the notice required before resort to any remedy,
the shortest notice provision shall control all others with respect to the
remedy in question (for purposes of this Section only, "without notice" shall be
deemed a notice provision).
SECTION 11.3 RIGHTS AND REMEDIES NOT WAIVED
No course of dealing between the Borrower and the Lender or any
failure or delay on the part of Lender in exercising any rights or remedies
hereunder shall operate as a waiver of any rights or remedies of the Lender and
no single or partial exercise of any rights or remedies hereunder shall operate
as a waiver or preclude the exercise of any other rights or remedies hereunder.
ARTICLE XII
FEES AND PAYMENTS
SECTION 12.1 COMMITMENT FEE
In consideration of the Lender holding itself ready, willing and
able to make the Loan and maintaining available a portion of its loan portfolio
to fund the Loan at the designated interest rate, and in further consideration
of the substantial services which the Lender has rendered, the Borrower shall
have paid to the Lender upon and as a condition of closing the Loan a Commitment
Fee in the aggregate amount of SIXTY THOUSAND AND NO/100 DOLLARS ($60,000.00)
payable as follows:
(i) A non-refundable commitment fee in the amount of $30,000
shall be due and payable to Lender in full upon the Borrower's acceptance of the
Commitment Letter and Lender acknowledges payment of same; and
(ii) A non-refundable commitment fee in the amount of $30,000
shall be due and payable to Lender in full upon the closing of the Loan.
The Commitment Fee described above shall be deemed earned by the
Lender upon issuance of the Commitment Letter and shall be retained by the
Lender as liquidated damages in the event the Borrower is unwilling or unable to
close the Loan for any cause whatsoever, and shall not be applied to any loan
costs or expenses of any kind.
SECTION 12.2 EXPENSE DEPOSIT
The Lender acknowledges receipt from the Borrower of the sum of
Twenty-Five Thousand and No/100 ($25,000.00) Dollars ("Expense
64
Deposit") to be applied to expenses incurred by the Lender in accordance with
Section 12.3 hereof. These costs are payable at the earlier to occur of Closing
or the termination of the Commitment Letter and will be paid to the extent
available from the Expense Deposit and thereafter from the assets of the
Borrower, Transeastern and the Principals, who, by execution of the Commitment
Letter, agree to be jointly and severally liable for such obligations. If the
Loan closes, Lender shall return any portion of such Expense Deposit which is
not applied as provided above, to the Borrower within 45 days after Closing.
SECTION 12.3 COSTS, TAXES AND ATTORNEYS' FEES
Whether or not the Closing is effectuated and the transactions
contemplated hereby shall be consummated, the Borrower agrees: (a) to pay all
out-of-pocket costs, expenses, disbursements and fees incurred by the Lender in
connection with the origination, preparation, execution and delivery of and any
amendment, supplement or modification to, any of the Loan Documents and any
other documents prepared in connection herewith, and the consummation of the
transactions contemplated hereby and thereby (whether incurred before or after
the Closing), including, without limitation, title search, examination and
insurance charges, UCC searches, judgment and tax lien searches, surveys,
recording fees, charges and taxes, documentary stamps, intangible taxes,
disbursement fees, appraisal fees, attorneys' fees and disbursements of Counsel
to the Lender in connection with the origination and/or the Closing of the Loan;
(b) to pay or reimburse the Lender for all their out-of-pocket (I.E.,
non-overhead) costs and expenses incurred in connection with the administration,
audit and/or enforcement or preservation of any rights under the Loan Documents
and any such other documents; (c) to indemnify and hold the Lender harmless from
any and all recording and filing fees (including all intangible and documentary
stamp taxes) and any and all liabilities with respect to, or resulting from, any
delay in paying stamp, excise, documentary and other similar taxes, if any,
which may be payable or determined to be payable in connection with the
origination, administration, audit, execution and delivery of, or consummation
of, any of the transactions contemplated by, or any amendment, supplement or
modification to, or any waiver or consent under or in respect of, the Loan
Documents and any such other document; and (d) to pay, indemnify and hold the
Lender harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments and suits, costs, expenses or
commissions, including, without limitation, any brokerage claims arising out of
orn any way relating to the Loan and arising out of conduct (or alleged conduct)
of the Borrower (all of the foregoing, collectively, the "Indemnified
Liabilities"). The agreements contained in this Section shall survive repayment
of the Note and all other amounts payable hereunder or under the other Loan
Documents or under the
65
Contingent Return Documents. Such expenses shall be paid at the Closing, or in a
reasonable time thereafter upon receipt of written invoices, and will be paid to
the extent available from the Expense Deposit and thereafter from the assets of
the Borrower. In the event the Borrower fails to pay such expenses within a
reasonable time, the Lender may pay any such expenses which exceed the Expense
Deposit on the Borrower's behalf and charge the Borrower's account. The Borrower
shall also pay post-closing expenses incurred by the Lender on behalf of the
Borrower, including, but not limited to, additional documentary stamp or
intangible taxes if required, recertification of title expenses and preparation
of documents to terminate the Loan and release the security therefor.
Furthermore, the Borrower shall be liable for post-closing collection expenses,
including, but not limited to, expenses related to the repossession, storage or
sale of the Collateral and to the collection of obligations of the Borrower
hereunder, including reasonable attorneys' fees, including appellate
proceedings, post-judgment proceedings and bankruptcy proceedings. Attorneys'
fees shall include the fees or paraprofessionals such as paralegals,
investigators, etc.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 NOTICES
All notices, consents, requests and demands to or upon the
respective parties hereto to be effective shall be in writing or by telegraph,
telex or telecopy and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made when delivered by hand or when deposited
in the mail, postage prepaid, or, in the case of telex, telegraphic or telecopy
notice, when sent, addressed as follows, or to such address or other addresses
as may be hereafter notified by any of the respective parties hereto or any
future holders of the Note:
TO THE BORROWER: Transeastern Pembroke Villages, Inc.
0000 Xxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
WITH A COPY TO: Xxxx X. Xxxxxx, Esquire
Two Executive Court
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
TO THE GUARANTORS: Xxxxxx X. Xxxxxxx
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Xxxxxx Xxxxxxx
Xxxxxx Xxxxx
Transeastern Properties of South Florida,
Inc.
0000 Xxxxxxxxxx Xxxxx, 0xx Xxxxx
Xxxxx Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
WITH A COPY TO: Xxxx X. Xxxxxx, Esquire
Two Executive Court
0000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
TO THE LENDER: AMRESCO FUNDING CORPORATION,
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: President
Phone: (000) 000-0000
Fax: (000) 000-0000
WITH A COPY TO: AMRESCO FUNDING CORPORATION,
0000 Xxxxxxx Xxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: General Counsel
Phone: (000) 000-0000
Fax: (214) 953-
SECTION 13.2 FURTHER ASSURANCES
At any time and from time to time, upon Lender's request and at
the expense of the Borrower, the Borrower will promptly (and in no event within
more than 10 days) execute and deliver any and all further instruments and
documents and take such further action as Lender may deem reasonable to effect
the purposes of this Agreement and/or any of the other Loan Documents. In
addition, upon request of Lender from time to time, and at the Borrower's sole
cost and expense, the Borrower will promptly (and in no event within more than
10 days) correct any defect which may be discovered in the Note, the Mortgage,
this Agreement or any of the other Loan Documents, and after the execution of
same, the Borrower will make, execute and deliver to Lender and, where
appropriate, will cause to be recorded and/or filed and from time to time
thereafter re-recorded and/or refiled at such time and in such offices and
places as are deemed desirable by Lender, any and all mortgages, instruments of
further assurance, certificates and other documents as may, in the reasonable
opinion of Lender, be necessary or
67
desirable by Lender in order to effectuate, complete or perfect, or to continue
and preserve: (i) the obligations of the Borrower under the Mortgage, the Note,
this Agreement or any of the other Loan Documents, (ii) the Lien of the Mortgage
as a Lien upon the Mortgaged Real Property, and the lien or security interest of
the Lender on any of the Collateral, whether now owned or hereafter acquired by
the Borrower. Upon any failure by the Borrower to comply with this Section,
Lender may make, execute, record, file, re-record and/or refile any and all
mortgages, instruments, certificates and documents for and in the name of the
Borrower, and the Borrower hereby irrevocably appoints Lender the agent and
attorney-in-fact of the Borrower to do so, which agency and appointment as
attorney-in-fact shall be coupled with an interest.
SECTION 13.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties made hereunder, in the other
Loan Documents or in any document, certificate or statement delivered pursuant
hereto or thereto or in connection herewith or therewith shall survive the
execution and delivery of this Agreement, the Note, the Mortgage and the other
Loan Documents.
SECTION 13.4 ATTORNEYS' FEES
Any and all references to the payment of attorneys' fees and
disbursements herein or in any of the other Loan Documents shall include those
incurred before, during and after litigation, whether in negotiating, drafting,
closing, attempting collection without litigation, investigating and litigating
in all trial and appellate levels, as well as those incurred in any bankruptcy
proceedings and post-judgment proceedings. Attorneys' fees includes fees of
paraprofessionals such as paralegals and investigators, administrative costs and
all other charges whatsoever billed by counsel to the Lender.
SECTION 13.5 APPROVED FORM
Any provision of this Agreement or any of the other Loan
Documents which requires the Borrower or any other party to execute and/or
deliver any agreement, instrument or other written document or material or which
requires the Borrower or any other party to take or perform any act or action,
shall in each case be interpreted, construed and enforced as if it was expressly
provided in such provision that each such agreement, instrument or other written
document is to be in form, substance and content satisfactory to the Lender in
its judgment (reasonably exercised in good faith), and that each such act or
action is to be performed and/or accomplished in a manner fully satisfactory to
the Lender acting in good faith.
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SECTION 13.6 SEVERABILITY
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 13.7 COUNTERPARTS
This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Confirmation of execution by telex or by telecopied facsimile
signature page shall be binding upon any party so confirming or telecopying. A
set of the copies of this Agreement signed by all the parties hereto shall be
lodged with the Borrower and the Lender.
SECTION 13.8 INTERPRETATION
Each of the parties hereto acknowledges that they have been
represented by their own counsel throughout the negotiations and at the
execution of this Agreement and all of the other Loan Documents and therefore
none of the parties hereto shall, while this Agreement is effective or after its
termination, claim or assert that any provisions of this Agreement or any of the
other Loan Documents should be construed against the drafter of this Agreement
or any of the other Loan Documents.
SECTION 13.9 CONFLICT
If the terms and provisions of any of the other Loan Documents
should conflict with any of the terms and provisions of this Agreement, the
terms and provisions of this Agreement shall be interpreted as being paramount,
superior and controlling.
SECTION 13.10 HEADINGS
The headings of the Articles, Sections, and Subsections of this
Agreement are for convenience of reference only, and are not to be considered a
part hereof, and do not limit or otherwise affect any of the terms hereof.
SECTION 13.11 JURISDICTION AND VENUE
Each of the parties irrevocably and unconditionally: (a) agrees
that any suit, action or other legal proceeding arising out of or relating to
this Agreement may, and to the extent permitted by the courts of the State of
Florida shall be brought in the courts of record of the State of Florida in
Broward County or the
00
Xxxxxxxx Xxxxx of the United States, Southern District of Florida; (b) consents
to the jurisdiction of each such court in any such suit, action or proceeding;
(c) waives any objection which it may have to the laying of venue of any such
suit, action or proceeding in any of such court; and (d) agrees that service of
any court paper may be effected on such party by mail, as provided in this
Agreement, or in such other manner as may be provided under applicable laws or
court rules in the State of Florida.
SECTION 13.12 AMENDMENTS
The provisions of this Agreement may not be amended,
supplemented, waived or changed orally, but only by a writing signed by the
party as to whom enforcement of any such amendment, supplement, waiver or
modification is sought and making specific reference to this Agreement.
SECTION 13.13 WAIVERS
The Borrower waives presentment, demand, protest, notice of
default, nonpayment, partial payments and all other notices and formalities
relating to this Agreement other than notices specifically required hereunder.
The Borrower consents to and waives notice of the granting of indulgences or
extensions of time of payment, the taking or releasing of security, the addition
or release of persons primarily or secondarily liable on or with respect to
liabilities of the Borrower to the Lender, all in such manner and at such time
or times as the Lender may deem advisable. No act or omission of the Lender
shall in any way impair or affect any of the indebtedness or liabilities of the
Borrower to the Lender or rights of the Lender in any security. No delay by the
Lender to exercise any right, power or remedy hereunder or under any Security
Documents, and no indulgence given to the Borrower in case of any default, shall
impair any such right, power or remedy or be construed as having created a
course of dealing or performance contrary to the specific provisions of this
Agreement or as a waiver of any default by the Borrower or any acquiescence
therein or as a violation of any of the terms or provisions of this Agreement.
The Lender shall have the right at all times to enforce the provisions of this
Agreement and all other documents executed in connection herewith in strict
accordance with their terms, notwithstanding any course of dealing or
performance by the Lender in refraining from so doing at any time and
notwithstanding any custom in the banking trade. No course of dealing between
the Borrower and the Lender shall operate as a waiver of any of the Lender'
rights.
SECTION 13.14 PUBLICITY
The Lender is authorized at its discretion to issue news releases
and, at its own expense, to publish "tombstone ads" and other announcements in
newspapers, trade journal and other appropriate media, containing information
about the Loan as may be deemed noteworthy by the Lender, including without
limitation the
70
legal and trade names of the Borrower and Transeastern, the amount of the Loan
and the name, nature and location of the Collateral. The Borrower shall not
publicize or advertise the name of the Lender as a source of the financing
without the prior express written permission of the Lender.
SECTION 13.15 DEVELOPMENT CONSULTANT
The Lender may designate a consultant to perform various services
on behalf of the Lender both prior to and after Closing, including, without
limitation, review of plans and specifications and all proposed changes to them,
preparation of a "cost take-off" construction analysis, if so desired by the
Lender, the inspection of construction work for conformity with the approved
plans and specifications and the approval of requests for Loan disbursements,
and review and approval of the documents, permits, items and other matters more
particularly described in Section 7 of this Agreement.
SECTION 13.16 GOVERNING LAW; BENEFIT
This Agreement and all rights hereunder shall be governed by the
laws of the State of Florida and of the United States. In the event of conflicts
between Florida and Federal laws, the laws of the United States shall supersede
and control. This Agreement shall bind and inure to the benefit of, and the
terms "Borrower," "Subsidiaries," and "Lender," respectively, as used in this
Agreement shall include, the respective parties and their respective heirs,
personal representatives, participants, successors and assigns. However, the
Borrower may not assign its rights and obligations under this Agreement. The
Lender may assign, in whole or in part, and issue participating interests in and
to this Agreement, the Note and Loan Documents. No consent of the Borrower to
such assignment or participation shall be required. In such event, the Borrower
agrees to attorn to such assignee and to execute such estoppel certificates and
consents thereto and other documentation as may be reasonably required to
facilitate such assignment, provided such consents and documentation do not add
to the obligations of the Borrower.
SECTION 13.17 REPRODUCTION OF DOCUMENTS
This Agreement and all documents relating thereto, including,
without limitation: (a) consents, waivers and modifications which may hereafter
be executed; (b) documents received by the Lender at the closing of the Loan;
and (c) financial statements, appraisals, credit reports, certificates and other
information previously or hereafter furnished to the Lender, may be reproduced
by the Lender by any photographic, photostatic, microfilm, micro-card, miniature
photographic or other similar process and the Lender may destroy any original
document so reproduced. The Borrower agrees and stipulates that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether nor not the original is in
existence and whether or not such reproduction was made by the Lender in the
71
regular course of business) and that any enlargement, facsimile or further
reproduction of shall like wise be admissible in evidence.
SECTION 13.18 ABSENCE OF CONTROL
In no event shall the Lender' rights hereunder or under any of
the Loan Documents grant the Lender the right to, or be deemed to indicate that,
the Lender are in control of the business, management or properties of the
Borrower, or has power over the daily management functions and operating
decisions made by the Borrower. The Lender are lenders only and shall not be
considered a shareholder, joint venturer or partner of the Borrower.
SECTION 13.19 GOVERNMENTAL REGULATIONS OF THE LENDER
The Lender is subject to various Governmental Authorities and the
laws, rules and regulations enacted, adopted and promulgated by them. To the
extent that the Lender's power and authority to perform the obligations on the
part of the Lender to be performed under this Agreement, now or hereafter, may
be limited or regulated thereby, the Lender is excused from such performance.
SECTION 13.20 ACCRUAL OF INTEREST UNDER THE NOTE
Interest under the Note shall commence to accrue as of the date
of disbursal or wire transfer by the Lender, notwithstanding whether the
Borrower shall receive the benefit of such monies as of such date and even if
such monies are held in escrow pursuant to the terms of any escrow arrangement
or agreement. When monies are disbursed by wire transfer, then such monies shall
be considered advanced at the time of receipt thereof by the receiving financial
institution.
SECTION 13.21 WAIVER OF CONSEQUENTIAL DAMAGES
The Lender and the Debtor Parties hereby waive any and all right
to claim or receive consequential damages in connection with any claim or cause
of action arising out of or related to the Loan.
SECTION 13.22 ENTIRE AGREEMENT
This Agreement and the Loan Documents embody the entire agreement
and understanding between the parties with respect to the matters set forth
herein and supersede and cancel all prior loan applications, expressions of
interest, commitments (including, without limitation, the Commitment Letter),
agreements and understandings, whether oral or written, relating to the subject
matter hereof.
SECTION 13.23 WAIVER OF JURY TRIAL
THE PARTIES HERETO DO HEREBY MUTUALLY AND WILLINGLY WAIVE THE
RIGHT TO A TRIAL BY JURY OF ANY AND ALL CLAIMS MADE AMONG THEM
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WHETHER NOW EXISTING OR ARISING IN THE FUTURE, INCLUDING WITHOUT LIMITATION, ANY
AND ALL CLAIMS, DEFENSES, COUNTERCLAIMS, CROSS-CLAIMS, THIRD PARTY CLAIMS AND
INTERVENOR'S CLAIMS WHETHER ARISING FROM OR RELATED TO THE NEGOTIATION,
EXECUTION AND PERFORMANCE OF THE TRANSACTION TO WHICH THIS LOAN AGREEMENT
RELATES.
TRANSEASTERN PEMBROKE VILLAGES,
INC., a Florida Corporation
By:
Name:
Title:
(CORPORATE SEAL)
AMRESCO FUNDING CORPORATION
By:
Name:
Title:
73
CONSENT AND JOINDER OF GUARANTORS
The undersigned, referred to as one of the "Guarantors" in the
foregoing Loan Agreement, hereby consents thereto and joins therein, for the
purpose of making the representations and warranties set forth therein and
agreeing to the affirmative and negative covenants set forth therein, including,
without limitation, the negative covenant set forth in Section 9.13 therein, and
agrees to be bound by the terms of the foregoing Agreement, insofar as the same
apply to the undersigned.
TRANSEASTERN PROPERTIES OF SOUTH
FLORIDA, INC., a Florida corporation
By:
Name:
Title:
(CORPORATE SEAL)
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CONSENT AND JOINDER OF GUARANTORS
The undersigned, referred to as one of the "Guarantors" in the
foregoing Loan Agreement, hereby consents thereto and joins therein, for the
purpose of making the representations and warranties set forth therein and
agreeing to the affirmative and negative covenants set forth therein, including,
without limitation, the negative covenant set forth in Section 9.13 therein, and
agrees to be bound by the terms of the foregoing Agreement, insofar as the same
apply to the undersigned.
By:
Name:
Title:
(CORPORATE SEAL)
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SCHEDULE OF EXHIBITS
EXHIBIT 1 Option Property
EXHIBIT 2 Real Property
EXHIBIT 6.16 Subsidiaries
EXHIBIT 6.2 Transeastern Stockholders
EXHIBIT 6.23 Permits and Licenses
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EXHIBIT "A"
(Property # 1)
A portion of the NASHER PLAT, according to the plat thereof as recorded at Plat
Book 159, Page 42 of the Public Records of Broward County, Florida, being more
particularly described as follows:
A PORTION OF TRACTS 37 THROUGH 39, "EVERGLADES SUGAR AND LAND COMPANY'S
SUBDIVISION OF SECTION 13, TOWNSHIP 51 SOUTH, RANGE 40 EAST", ACCORDING TO THE
PLAT THEREOF, AS RECORDED IN PLAT BOOK 2, PAGE 39, OF THE PUBLIC RECORDS OF DADE
COUNTY, FLORIDA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE WEST ONE-QUARTER (W 1/4) CORNER OF SAID SECTION 13; THENCE
NORTH 89(degree)43'34" EAST, ALONG THE NORTH LINE OF THE SOUTHWEST ONE-QUARTER
(SW 1/4) OF SAID SECTION 13, A DISTANCE OF 269.64 FEET; THENCE SOUTH
00(degree)16'26" EAST, 140.00 FEET TO THE SOUTH RIGHT-OF -WAY LINE OF PINES
BOULEVARD AS DESCRIBED IN OFFICIAL RECORDS BOOK 15434, PAGE 000, XX XXX XXXXXX
XXXXXXX XX XXXXXXX XXXXXX; THENCE NORTH 89(degree)43'34" EAST, ALONG SAID SOUTH
RIGHT-OF-WAY LINE. 963.03 FEET; THENCE NORTH 00(degree)16'26" WEST, 40.00 FEET
TO THE SOUTH RIGHT-OF-WAY LINE OF PINES BOULEVARD AS DESCRIBED IN DEED BOOK 634,
PAGE 000, XX XXX XXXXXX XXXXXXX XX XXXXXXX XXXXXX; THENCE NORTH 89(degree)43'34"
EAST ALONG SAID SOUTH RIGHT-OF-WAY LINE, 1880.42 FEET TO THE POINT OF BEGINNING;
THENCE CONTINUE NORTH 89(degree)43'34" EAST, ALONG SAID SOUTH RIGHT-OF-WAY LINE
785.16 FEET; THENCE SOUTH 46(degree)01'19" EAST, 41.87 FEET TO THE WEST
RIGHT-OF-WAY LINE OF SOUTHWEST 114TH AVENUE AS DESCRIBED IN OFFICIAL RECORDS
BOOK 11797, PAGE 000, XX XXX XXXXXX XXXXXXX XXXXXXX XXXXXX, XXXXXXX; THENCE
SOUTH 01(degree)46'12" EAST, ALONG SAID WEST RIGHT-OF-WAY LINE, 505.95 FEET;
THENCE SOUTH 89(degree)43'34" WEST, 814.46 FEET; THENCE NORTH 01(degree)45'43"
WEST, 535.18 FEET TO THE POINT OF BEGINNING.
SAID LANDS LYING IN THE CITY OF PEMBROKE PINES, BROWARD COUNTY, FLORIDA,
CONTAINING 9.993 ACRES (435,290 SQUARE FEET), MORE OR LESS.
EXHIBIT "A"
(PROPERTY # 2)
Parcel B of the NASHER PLAT, according to the plat thereof as recorded at Plat
Book 159, Page 42 of the Public Records of Broward County, Florida, also
described as follows:
A portion of tracts 51 and 52, "Everglades Sugar and Land Company's Subdivision
of Section 13, Township 51 South, Range 40 East", according to the plat thereof,
as recorded in Plat Book 2, Page 39, of the Public Records of Dade County,
Florida, more particularly described as follows:
Commencing at the Southwest corner of said Section 13, thence North
89(degree)44'06" East, along the South line of said Section 13, a distance of
262.87 feet; thence North 00(degree)15'54" West, 50.00 feet to the North
right-of-way line of Washington Street as described in Deed Book 634, Page 183
of the Broward County Public Records, thence North 46(degree)00'49" West, 48.85
feet to the East line of Flamingo Road as described in Official Records Book
15434, Page 361, of the Public Records of Broward County; thence North
01(degree)45'43" West, along said East right-of-way line, 575.97 feet; thence
North 89(degree)43'58" East, 429.50 feet; thence South 01(degree)45'43" East,
610.09 feet to the aforesaid North right-of-way line of Washington Street;
thence South 89(degree)44'06" West along said North right-of-way line, 395.40
feet to the Point of Beginning.
Said Lands lying in The City of Pembroke Pines, Broward County, Florida,
containing 6.000 acres (261,360 square feet), more or less.
LAND DESCRIPTION: PARCEL B
A PORTION OF PARCEL C, "NASHER PLAT," ACCORDING TO THE PLAT THEREOF AS RECORDED
IN PLAT BOOK 159, PAGE 42 OF THE PUBLIC RECORDS OF BROWARD COUNTY, FLORIDA, MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHEAST CORNER OF SAID PARCEL C; THENCE SOUTH
89(degree)43'34" WEST, ALONG THE NORTH LINE OF SAID PARCEL C, SAME BEING THE
SOUTH RIGHT OF WAY LINE OF PINES BOULEVARD (STATE ROAD 820), A DISTANCE OF
714.89 FEET TO XXX XXXXX XX XXXXXXXXX; XXXXXX XXXXX 00(xxxxxx)00'00" EAST,
535.18 FEET; THENCE NORTH 89(degree)43'34" EAST, 485.65 FEET; THENCE SOUTH
01(degree)45'43" EAST, 534.34 FEET; THENCE SOUTH 89(degree)43'34" WEST, 1306.52
FEET; THENCE NORTH 00(degree)16'26" WEST 1069.16 FEET TO THE NORTH LINE OF
AFORESAID PARCEL C, SAME BEING SAID SOUTH RIGHT OF WAY LINE OF PINES BOULEVARD;
THENCE NORTH 89(degree)43'34" EAST ALONG SAID SOUTH RIGHT OF WAY LINE, 793.09
FEET TO THE POINT OF BEGINNING.
SAID LANDS LYING IN THE CITY OF PEMBROKE PINES, BROWARD COUNTY,
FLORIDA, CONTAINING 25.762 ACRES, (1,122,205 SQUARE FEET), MORE OR LESS
LAND DESCRIPTION: PARCEL D
A portion of the NASHER PLAT, according to the plat thereof as recorded at Plat
Book 159, Page 42 of the Public Records of Broward County, Florida, being more
particularly described as follows:
A PORTION OF TRACTS 44, 47 THROUGH 50 AND 53, "EVERGLADES SUGAR AND LAND
COMPANY'S SUBDIVISION OF SECTION 13, TOWNSHIP 51 SOUTH, RANGE 40 EAST",
ACCORDING TO THE PLAT THEREOF, AS RECORDED IN PLAT BOOK 2, PAGE 39, OF THE
PUBLIC RECORDS OF DADE COUNTY, FLORIDA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHWEST CORNER OF SAID SECTION 13; THENCE NORTH
01(degree)45'43" WEST, ALONG THE WEST LINE OF SAID SECTION 13, A DISTANCE OF
654.08 FEET; THENCE NORTH 88(degree)14'17" EAST, 230.00 FEET TO THE POINT OF
BEGINNING, SAME BEING A POINT ON THE EAST RIGHT-OF-WAY LINE OF FLAMINGO ROAD AS
DESCRIBED IN OFFICIAL RECORDS BOOK 15434, PAGE 000 XX XXX XXXXXX XXXXXXX XX
XXXXXXX XXXXXX; THENCE NORTH 01(degree)45'43" WEST, ALONG SAID EAST RIGHT-OF-WAY
LINE, 1054.29 FEET; THENCE NORTH 88(degree)14'17" EAST, 500.00 FEET; THENCE
NORTH 81(degree)41'26" EAST, 608.93 FEET; THENCE SOUTH 01(degree)45'43" EAST,
1094.86 FEET; THENCE SOUTH 89(degree)43'34" WEST, 675.83 FEET; THENCE SOUTH
01(degree)45'43" EAST, 57.61 FEET; THENCE SOUTH 89(degree)43'58" WEST, 429.50
FEET TO THE POINT OF THE BEGINNING. SAID LANDS LYING IN THE CITY OF PEMBROKE
PINES, BROWARD COUNTY, FLORIDA, CONTAINING 26.697 ACRES (1,162,922 SQUARE FEET),
MORE OR LESS.
LAND DESCRIPTION: PARCEL F
A portion of the NASHER PLAT, according to the plat thereof as recorded at Plat
Book 159, Page 42 of the Public Records of Broward County, Florida, being more
particularly described as follows:
A PORTION OF TRACTS 51 THROUGH 57, "EVERGLADES SUGAR AND LAND COMPANY'S
SUBDIVISION OF SECTION 13, TOWNSHIP 51 SOUTH, RANGE 40 EAST", ACCORDING TO THE
PLAT THEREOF, AS RECORDED IN PLAT BOOK 2, PAGE 39, OF THE PUBLIC RECORDS OF DADE
COUNTY, FLORIDA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE SOUTHWEST CORNER OF SAID SECTION 13; THENCE NORTH
89(degree)44'06" EAST, ALONG THE SOUTH LINE OF SAID SECTION 13, A DISTANCE OF
262.87 FEET; THENCE NORTH 00(degree)15'54" WEST, 50.00 FEET TO THE NORTH
RIGHT-OF-WAY LINE OF WASHINGTON STREET AS DESCRIBED IN DEED BOOK 634, PAGE 183
OF THE BROWARD COUNTY PUBLIC RECORDS; THENCE NORTH 89(degree)44'06" EAST, ALONG
SAID NORTH RIGHT-OF-WAY LINE, 819.38 FEET TO THE POINT OF BEGINNING; THENCE
NORTH 01(degree)45'43" WEST, 560.19 FEET; THENCE NORTH 89(degree)44'06" EAST,
1634.77 FEET; THENCE SOUTH 01(degree)45'43" EAST, 560.19 FEET TO AFORESAID NORTH
RIGHT-OF-WAY LINE OF SAID WASHINGTON STREET; THENCE SOUTH 89(degree)44'06" WEST,
ALONG SAID NORTH RIGHT-OF-WAY LINE, 1634.77 FEET TO THE POINT OF BEGINNING.
SAID LANDS LYING IN THE CITY OF PEMBROKE PINES, BROWARD COUNTY, FLORIDA,
CONTAINING 21.016 ACRES (915,469 SQUARE FEET), MORE OR LESS.
EXHIBIT 6.16
SUBSIDIARIES OF TRANSEASTERN PROPERTIES OF SOUTH FLORIDA, INC.
Transeastern Properties at the Cove, Inc.
Transeastern Aberdeen Properties, Inc.
Transeastern Pembroke Properties, Inc.
Transeastern Pembroke Villages, Inc.
Transeastern Wellington Properties, Inc.
Transeastern Plantation Apartments, Inc.
Transeastern Hollywood Apartments, Inc.
Transeastern Finance, Inc.
EXHIBIT 6.16
OWNERS OF COMMON VOTING STOCK
OF TRANSEASTERN PROPERTIES OF SOUTH FLORIDA, INC.
Xxxxxx X. Xxxxxxx and Xxxxx Xxxxxxx 241,667 shares
Xxxxxx X. Xxxxxxx and Xxxxx Xxxxxxx 241,667 shares
Xxxxxx Xxxxx, Xx. and Xxxxx Xxxxx 241,667 shares
EXHIBIT 6.23
Permits and Licenses
1. Road Impact Agreement between Broward County and Xxxxxxx X. Xxxxxx
recorded in Official Record Book 23096, Page 0056 of the Public Records
of Broward County, Florida.
2. Recreational Impact Agreement between Broward County, SarahPark Owners
Association, Inc., and SarahPark Developers Corporation recorded in
Official Records Book 24214, Page 0936 of the Public Records of Broward
County, Florida.
3. Agreement among Broward County, the City of Pembroke Pines, SarahPark
Owners Association, Inc. and SarahPark Development Corporation for
installation of required improvements relating to Nasher Plat recorded
in Official Records Book 24232, page 0709 of the Public Records of
Broward County, Florida.
4. Agreement among Broward County, the City of Pembroke Pines, SarahPark
Owners Association, Inc. and SarahPark Development Corporation for
traffic signalization recorded in Official Records Book 24214, page
0947 of the Public Records of Broward County, Florida.
5. Developer Agreement between the City of Pembroke Pines and Xxxxxxx X.
Xxxxxx School Agreement - executed January 5, 1995.
6. InterLocal Agreement between City o Pembroke Pines, Broward County and
School Board of Broward County dated April 11, 1995.
7. Agreement between Xxxxxxx X. Xxxxxx and Broward County regarding
Flamingo Road Right-of-Way dated April 15, 1988 (not recorded).
8. Municipal Land Dedication Agreement between the City of Pembroke Pines
and Xxxxxxx X. Xxxxxx dated September 19, 1994 recorded in Official
Records Book 24232, page 0552 of the Public Records of Broward County,
Florida.
9. Traffic Concurrency Agreement among Broward County, the City of
Pembroke Pines and Xxxxxxx X. Xxxxxx for Road Concurrency Relating to
The Nasher Plat dated November 15, 1994 recorded in Official Records
Book 22907, at Page 0205, of the Public Records of Broward County,
Florida.
10. Broward County Department of Natural Resource Protection License No.
DF95-1035 dated June 23, 1995.
11. South Florida Water Management District Notice of Intent to Conduct
Pre-Permit Work dated January 31, 1995.
12. South Florida Water Management District Surface Water Management Permit
No. 06-02059-S dated March 16, 1995.
13. United States Army Corps of Engineers Dredge and Fill Permit No.
199403656 (IP-AW) dated January 3, 1995.
14. South Broward Drainage License No. LE940404-1 for lake excavation and
installation of interconnects.
15. City of Pembroke Pines Clearing Approval Permit No. 95-0119.
16. City of Pembroke Pines Lake Excavation Permit No. 95-0120.
17. City of Pembroke Pines Demucking Permit No. 95-1027.
18. City of Pembroke Pines Engineering Conceptual Approval dated August 17,
1995.
19. City of Xxxxxxxx Xxxxx Xxxxxxx Xxxxxx Xx. X-00000 dated August 24,
1995.
20. FDOT Conceptual Connection Review Approval dated May 18, 1995.
21. Broward County Public Health Unit (HRS) Permit No. 6-95-2081QB dated
May 5, 1995.
AMRESCO FUNDING CORPORATION
March 15, 1996
Xx. Xxxxxx Xxxxxxx
Principal
Transeastern Properties of South Florida, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx 0
Xxxxx Xxxxxxx, XX 00000
RE: AMRESCO FUNDING CORP. - PROPOSED TERM LOAN TO
AFFILIATE OF TRANSEASTERN PROPERTIES OF SOUTH FLORIDA, INC.
Dear Xx. Xxxxxxx:
AMRESCO Funding Corporation ("AMRESCO" or "LENDER") is pleased to advise you
that it has agreed to extend a loan in the maximum aggregate amount of THREE
MILLION AND NO/100 ($3,000,000.00) DOLLARS (the "LOAN") to the Borrower
described below in accordance with the terms set forth in this commitment letter
(the "COMMITMENT LETTER" or "COMMITMENT"), including those set forth in Exhibit
A attached hereto and made a part hereof.
1. FACILITY:
The Loan shall be a term loan evidenced by a promissory note in the
maximum aggregate principal amount of Three Million and No/100
($3,000,000.00) Dollars executed by a bankruptcy remote single purpose
corporation to be formed, and payable to the order of AMRESCO (the
"NOTE") or such affiliate or designee of AMRESCO as AMRESCO shall
determine. The Loan shall be further evidenced, governed and secured by
a Loan Agreement and security documents as more particularly set forth
below.
2. BORROWER:
A "bankruptcy remote" single purpose corporation to be formed, which
shall be owned and controlled by Transeastern Properties of South
Florida, Inc. ("TRANSEASTERN"), and which shall not elect to be treated
as a "Small Business Corporation" under Chapter 1362 of Internal
Revenue Code, of 1986, as amended, and which shall be referred to
herein as the "Borrower".
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 2
3. PLEDGOR:
Each holder of legal or beneficial interests in shares of the Borrower,
each of which is referred to herein as a "Pledgor" and all of which are
referred to herein collectively as "the "Pledgors".
4. CONTINGENT GUARANTORS:
Jointly and severally, Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx and Xxxx Xxxxx,
each individually, a "Principal", and collectively the "Principals".
5. LIABILITY:
Recourse to the Borrower; non-recourse to Principals, provided,
however, the Principals and Transeastern shall provide joint and
several guaranties of the Loan which shall become effective in the
event of the occurrence of any of those matters (the "RECOURSE
MATTERS") specified by AMRESCO and reflected in the documents governing
the Loan, including, without limitation, unpermitted transfers of the
Collateral, as hereinafter defined; breach of the non-compete agreement
described in Exhibit "A" attached hereto; unpermitted liens or
encumbrances upon the Collateral, including, without limitation,
mechanic's liens; misuse or misapplication of Loan Proceeds, as
hereinafter defined, sales proceeds or other revenues of the Borrower,
insurance or condemnation proceeds, deposits or escrowed funds;
transactions with affiliates not approved in writing by the Lender or
carried out in a manner inconsistent with the approval in writing by
the Lender; obstruction of the Lender's remedies; a challenge or
asserted defense to the Lender's rights pursuant to the Loan Documents,
including, without limitation, the Lender's right to any payments
provided for in the Loan Documents, be they payments of principal,
interest, contingent returns or otherwise; environmental liability;
intentional destruction or waste of improvements to the land of the
Borrower or other assets of the Borrower; failure to complete the
construction of the Project, as hereinafter defined, as a result of a
discrepancy between actual development and construction costs for the
Project being in excess of amounts reflected in the proforma
projections for the same which have been approved by the Lender, to the
extent that actual costs exceed those reflected in the projections by
an amount in excess of $50,000.00, in the aggregate (after netting
savings against cost increases); failure to complete the construction
of any structure (as evidenced by the issuance of a certificate of
occupancy) upon which construction has commenced (as defined as pouring
a slab) free of any mechanic's or materialman's liens; if requested by
the Lender, the failure of the Borrower to facilitate and cooperate
with the Lender in an uncontested foreclosure or a deed in lieu of
foreclosure for all of the real property, and one or more comparable
procedures with
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 3
respect to all personal property, which stands as collateral for the
Loan, in the event of a default pursuant to the Loan Documents which
has notgrace periods; if requested by the Lender, the failure of the
Borrower to liquidate the Collateral in a manner acceptable to the
Lender in the event of a default pursuant to the Loan Documents which
has not been cured within any applicable grace periods; fraud;
misrepresentation; and criminal acts. The liability of the Principals
shall not be affected by the Borrower challenging the existence of a
default pursuant to the Loan Documents unless a court of competent
jurisdiction determines that the default declared by the Lender does in
fact exist, in which event such challenge shall be deemed a Recourse
Matter.
6. PLAN OF DEVELOPMENT, USE OF PROCEEDS AND COMPLETION OBLIGATIONS:
The sum of the total acquisition budget for Tracts B, D and F and the
total development budget for the work specified in Exhibit D to that
certain Agreement of Purchase and Sale dated August 14, 1995, by and
between Transeastern and Sarahpark Development Corporation
("SARAHPARK"), as amended on December 13, 1995 (hereinafter, the
"ACQUISITION CONTRACT"), pertaining to all Tracts within the boundary
plat commonly referred to as the "NASHER PLAT" (hereinafter the
"ACQUISITION CONTRACT DEVELOPMENT WORK"), as incorporated in a business
plan and budget otherwise acceptable to the Lender and the Borrower,
shall be not more than $13,000,000.00. The Acquisition Contract
Development Work shall not include work required to install
infrastructure within the boundaries of a particular Tract, which
infrastructure related work is hereinafter referred to as "TRACT
INFRASTRUCTURE".
The Borrower has negotiated a financing proposal with Chase Federal
Bank ("CHASE FEDERAL") in connection with the acquisition and
development of the project (the "CHASE FEDERAL LOAN"), the closing on
and funding of which loan on terms satisfactory to Lender, is a
condition precedent to the obligation of the Lender to close the Loan.
The Chase Federal Loan shall be for an amount acceptable to the
Borrower and the Lender, not to exceed (A) $10,150,000.00 for (i)
acquisition of Tracts B, D and F, and (ii) the Acquisition Contract
Development Work, plus (B) an amount equal to a maximum of 80% of the
Tract Infrastructure for Tracts D and F, which the parties contemplate
to be $3,242,000.00 resulting in a maximum loan amount of approximately
$2,600,000.00, for Tract Infrastructure on said Tracts D and F. As a
condition to funding the Loan, all documents governing the Chase
Federal Loan must be acceptable to the Lender, and Chase Federal and
the Lender shall have entered into an agreement governing their rights
with regard to their respective loans and the collateral for each. The
Lender acknowledges that the security documents in favor of Chase
Federal shall also stand as security for the repayment obligations
pursuant to certain letters of credit issued by Chase
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 4
Federal in connection with development which is to funded pursuant to
the Chase Federal Loan.
The Lender shall advance up to $2,800,000.00 at the closing of the Loan
(the "CLOSING"), with the precise amount funded being determined by the
Lender based on the amount necessary to fund the acquisition of Tracts
B, D and F and the performance of the Acquisition Contract Development
Work, as set forth in a mutually agreed upon budget (the "PRE-CLOSING
BUDGET"). An additional $200,000.00 may be drawn pursuant to the Loan
within the first 12 months to fund interest payable on a current basis
to AMRESCO pursuant to the Note (the portion of the Loan funded at the
Closing together with the amount reserved for the payment of interest
being sometimes hereinafter referred to collectively as "LOAN
PROCEEDS").
The Pre-Closing Budget shall call for the application of the Loan
Proceeds for (a) the acquisition of approximately 73 acres in Broward
County, Florida, referred to as Tracts B, D and F, under the
Acquisition Contract; and (b) subject to the parameters set forth
below, to fund interest to the Lender at the pay rate as set forth in
PARAGRAPH 8 of this Commitment Letter.
At the time of transfer of Tract B by the Borrower, the cash proceeds
of sale (after payment of closing costs and third party brokerage
expenses in amounts and for purposes acceptable to the Lender), and in
no event less than $5,000,000.00, shall be applied to reduce the
Borrower's outstanding indebtedness on the Chase Federal Loan and the
remaining sales proceeds, which will be in the sum of not less than
$1,000,000.00, shall be applied to reduce the Lender's principal,
together with interest thereon, provided, however, at the Borrower's
election, a portion thereof not greater than the "TRACT INFRASTRUCTURE
FUNDING REQUIREMENT", as hereinafter defined, may be applied by the
Borrower to the payment of costs of the Tract Infrastructure with
respect to Tracts D and F, or, with the consent of the Lender, in its
sole and absolute discretion, to repay additional amounts due Chase
Federal under the Chase Federal Loan.
It is the Borrower's intention to arrange for the conveyance of Tract C
contemporaneously with the acquisition of Tracts C and E pursuant to
the Option Contract, in which event, any net proceeds of the sale of
Tract C, which shall be in an amount not less than $1,000,000.00, shall
be paid to the Lender as a principal reduction, provided, however, at
the Borrower's election, a portion thereof not greater than the "TRACT
INFRASTRUCTURE FUNDING REQUIREMENT", as hereinafter defined, may be
applied by the Borrower to the payment of costs of the Tract
Infrastructure with respect to Tracts D and F, or, with the consent of
the Lender, in its sole and absolute discretion, a portion
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 5
of such sales proceeds may be applied to repay additional amounts due
Chase Federal under the Chase Federal Loan.
In the event that Tract C is acquired by the Borrower and is not
contemporaneously conveyed to a third party, the Borrower shall be
permitted to obtain up to $3,600,000.00 of mortgage financing for the
purpose of acquiring said Tracts, provided that such loan shall be with
lenders and pursuant to documents and in amounts and on terms which
shall be acceptable to the Lender, including, without limitation, the
terms governing the relationship between the provider of such financing
and the Lender. At the time of the subsequent transfer of Tract C by
the Borrower, the cash proceeds of sale (after payment of closing costs
and third party brokerage expenses in amounts and for purposes
acceptable to the Lender) shall be applied to the release price for
such Tract and the remaining net proceeds shall be paid to the Lender
as a principal reduction, provided, however, at the Borrower's
election, a portion thereof not greater than the "TRACT INFRASTRUCTURE
FUNDING REQUIREMENT", as hereinafter defined, may be applied by the
Borrower to the payment of costs of the Tract Infrastructure with
respect to Tracts D and F, or, with the consent of the Lender, in its
sole and absolute discretion, a portion of such sales proceeds may be
applied to repay additional amounts due Chase Federal under the Chase
Federal Loan.
As used in this Commitment Letter, the term "TRACT INFRASTRUCTURE
FUNDING REQUIREMENT" shall mean the portion of the costs of completing
the Tract Infrastructure with respect to Tracts D and F which are not
funded pursuant to a loan for the purpose of funding such costs, which
amount is anticipated to be $642,000.00. The Tract Infrastructure
Funding Requirement shall be deemed reduced from time to time by the
amount of any other funds made available for the purpose of funding the
Tract Infrastructure (other than the loan proceeds obtained for that
purpose), reductions in the cost of such improvements and as otherwise
appropriate to effectuate the intentions of the parties hereto.
Any funds required to complete the development and sale of the Property
in accordance with the plan agreed to by the Lender and the Borrower
and not available from the Chase Federal Loan and the Loan shall be
funded by the Borrower, Transeastern, or the Principals pursuant to an
agreement acceptable to the Lender.
All of the interests in real property owned legally or beneficially by
the Borrower from time to time, including, without limitation, Tracts
B, C, D, E and F shall hereinafter collectively be referred to as the
"LAND". The infrastructure and the construction of any improvements
thereon shall hereinafter collectively be referred to as the
"IMPROVEMENTS". The Land and Improvements are hereinafter sometimes
collectively called the "PROPERTY".
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 6
The development of the Land with the Improvements is hereinafter
referred to as the "PROJECT" and shall be part of the "Collateral".
7. TERM: 24 MONTHS
8. INTEREST RATE:
Twenty (20%) percent per annum (hereinafter, the "INTEREST RATE").
Interest shall be payable at a pay rate of ten (10%) percent per annum,
on a monthly basis in arrears, with the remainder of the interest, to
the extent not paid (at the election of the Borrower) on a monthly
basis along with the interest paid at the foregoing pay rate, accruing
and being capitalized (and thereupon earning interest at the Interest
Rate) on the first day of each month. Accrued interest will be paid
from the payments described in PARAGRAPH 11, as applied in accordance
with the terms of that Paragraph and the Loan Documents.
9. CONTINGENT RETURNS:
With the exception of the Borrower's First Priority Return, as
hereinafter defined, the Lender shall be paid the First Contingent
Return, as hereinafter defined, prior to any return to the Borrower on
or of the Borrower's equity or any payment of a fee to the Borrower or
its affiliates. The "FIRST CONTINGENT RETURN" shall mean an additional
contingent return which shall be limited to the extent of any "Net
Profits" after the Borrower's First Priority Return [where "NET
PROFITS" shall mean all revenues or other proceeds from the Collateral
or the Project ("REVENUES") after payment of debt service and any
necessary Project expenses not funded from the proceeds of the Loan,
the Chase Federal Loan or such other loan as is approved by the Lender,
if approved by the Lender in a budget acceptable to the Lender
("EXPENSES"), which shall include debt service on the Loan and the
Chase Federal Loan, and release prices under the Chase Federal Loan,
all as more particularly specified in the Loan Documents] in an amount
equal to an additional return on amounts which have been advanced
pursuant to the Loan, based on the amount of time that such funds have
been outstanding, at a rate equal to four (4%) percent per annum
compounded monthly. The First Contingent Return shall not be paid to
the Lender unless and until all principal and interest pursuant to the
Loan, including, without limitation, accrued and capitalized interest,
have been paid or repaid to the Lender and the Borrower has received
the Borrower's First Priority Return.
The Borrower's First Priority Return and the Borrower's Second Priority
Return shall be a return on, and to the extent applicable, a return of,
the Borrower's equity investment in the Project. The amount of the
Borrower's First Priority Return and the manner of payment thereof
shall be as follows:
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 7
from net sales proceeds in connection with residences constructed on
Tracts D and F, and Tract E to the extent the same is acquired by the
Borrower, an amount equal to 2% of gross sales proceeds for each such
residence, provided that (a) the Borrower's First Priority Return shall
not be greater than $30,000.00 in a given calendar month (and amounts
payable but for this limit shall not accrue), and (b) the aggregate of
all amounts paid to the Borrower in respect of the Borrower's First
Priority Return shall not exceed an amount equal to 4% of the sum of
(x) development costs for the Tract Infrastructure in connection with
Tracts D and F, and Tract E to the extent the same is acquired by the
Borrower, and (y) the costs of construction of improvements on Tracts D
and F, and Tract E to the extent the same is acquired by the Borrower.
Notwithstanding anything to the contrary contained herein, the payment
of the Borrower's First Priority Return shall be strictly conditioned
upon (aa) there not existing at the time that the same would otherwise
be paid, a default or event of default pursuant to the Loan Documents,
or any event or circumstance which with the passing of time or the
giving of notice, or both, would be a default or event of default
pursuant to the Loan Documents, and (bb) to the extent that any portion
of the principal or interest (at the Interest Rate) pursuant to the
Loan remains outstanding, a minimum payment with respect to each
residence conveyed, in an amount to be specified in the Loan Documents,
shall have been applied to reduce the same.
In addition to the First Contingent Return, the Lender shall be
entitled to an additional contingent return equal to ten (10%) percent
of the Net Profits on Tracts D, E and F, and five (5%) percent of the
Net Profits on Tracts B and C, in each case, as reduced by (a) the
First Contingent Return and the Borrower's First Priority Return, and
(b) the Borrower's Second Priority Return, as hereinafter defined,
provided, however, in the event that the Loan is reduced by the sum of
$1,000,000.00 including interest at the Interest Rate thereon, on or
before September 1, 1996, the foregoing percentages shall be reduced to
five (5%) percent and two and on half (2 1/2) percent, respectively
(the "SECOND CONTINGENT RETURN"; the First Contingent Return and the
Second Contingent Return are sometimes hereafter referred to as the
"CONTINGENT RETURNS").
The term "BORROWER'S SECOND PRIORITY RETURN", as used in this
Commitment Letter, shall mean (a) an amount equal to 4% of the sum of
(x) development costs for the Tract Infrastructure in connection with
Tracts D and F, and Tract E to the extent the same is acquired by the
Borrower, and (y) the costs of construction of improvements on Tracts
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 8
D and F, and Tract E to the extent the same is acquired by the
Borrower; reduced by (b) the amount of the Borrower's First Priority
Return which has been paid to the Borrower.
Notwithstanding anything to the contrary contained herein, the payment
of the Borrower's Second Priority Return shall be strictly conditioned
upon (aa) there not existing at the time that the same would otherwise
be paid, a default or event of default pursuant to the Loan Documents,
or any event or circumstance which with the passing of time or the
giving of notice, or both, would be a default or event of default
pursuant to the Loan Documents.
The Second Contingent Return shall not be paid to the Lender unless and
until all principal and interest pursuant to the Loan, including,
without limitation, accrued and capitalized interest, have been paid or
repaid to the Lender and the Borrower has received the Borrower's First
Priority Return and the Borrower's Second Priority Return.
Net Profits shall be computed based on definitions of revenues and
expenses which are acceptable to the Lender and which take into
account, without limitation, all manner and form of revenue realized in
connection with the Project and the Property, which definitions shall
be set forth in the Loan Documents. The allocation of costs among
various components of the Project must be acceptable to the Lender.
Other than as expressly set forth herein, the Loan Documents shall
prohibit payments to affiliates of the Borrower, Transeastern or the
Principals.
10. INTENTION OF LENDER:
The Borrower acknowledges that the receipt by the Lender of the
Contingent Returns is subject to numerous risks and uncertainties,
including, without limitation, the possibility of unanticipated costs
in performing the Acquisition Contract Development Work (e.g., as a
result of change orders, unforseen conditions or force majeure) and the
Tract Infrastructure, the possibility that Tract B is not acquired
pursuant to the existing contract to which it is subject at the price
contemplated therein, the possibility that the Borrower does not
acquire Tract C or Tract E; the possibility that no contract for the
sale of Tract C is completed or that said Tract is not conveyed
pursuant thereto at the price reflected in the Borrower's projections,
the possibility of utility moratoria or materials or labor costs
decreasing the Borrower's anticipated profits, and the possibility of a
change in interest rates or the economy in general, impacting the sale
of residences. The Borrower further acknowledges that the Lender's
receipt of any of the Contingent Returns is contingent on the
availability of profit and the payment of the Borrower's First Priority
Return and the Borrower's Second Priority Return, as applicable. The
Borrower
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 9
acknowledges that the Contingent Returns are not interest; but are an
additional return to the Lender which is based strictly on the success
of the Borrower's business venture. The Borrower further acknowledges
that the Commitment Fee charged pursuant hereto is a customary and
reasonable charge for the Lender performing the services necessary to
enable it to, and to compensate it for, committing to provide the Loan.
The Borrower acknowledges that no portion of the Commitment Fee
constitutes interest. It is expressly stipulated and agreed to be the
intent of Borrower and Lender at all times to comply with applicable
state law or applicable United States federal law (to the extent that
it permits Lender to contract for, charge, take, reserve or receive a
greater amount of interest than under state law) and that this
Paragraph shall control every other covenant and agreement in this
Commitment Letter. If the applicable law (state or federal) is ever
judicially interpreted so as to render usurious any amount called for
under this Commitment Letter, the Note or under any of the Loan
Documents, or contracted for, charged, taken, reserved or received with
respect to the indebtedness evidenced by the Loan, or if Lender's
exercise of the option to accelerate the maturity of the Note, or if
any prepayment by Borrower, late payment charge, default interest,
commitment fee, servicing or loan administration fee, or other fee,
charge, or imposition of any kind results in Borrower having paid any
interest in excess of that permitted by applicable law, then it is
Borrower's and Lender's express intent that all excess amounts
theretofore collected by Lender be repaid to Borrower with interest
thereon at the maximum lawful rate, and the provisions of the Note and
the other Loan Documents immediately be deemed reformed and the amounts
thereafter collectible hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with
the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder and thereunder. All sums paid or
agreed to be paid to Lender for the use, forbearance and detention of
the indebtedness represented by the Loan shall, to the extent permitted
by applicable law, be amortized, prorated, allocated andll term of such
indebtedness until payment in full so that the rate or amount of
interest on account of such indebtedness does not exceed the maximum
rate permitted under applicable law from time to time in effect and
applicable to the indebtedness evidenced hereby for so long as such
indebtedness remains outstanding. Notwithstanding anything to the
contrary contained herein or in any of the Loan Documents, it is not
the intention of Lender to accelerate the maturity of any interest that
has not accrued at the time of such acceleration or to collect unearned
interest at the time of such acceleration.
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 10
11. PRINCIPAL REDUCTIONS:
Subject to the exceptions set forth in PARAGRAPH 6 of this Commitment
Letter, 100% of all Revenues, after payment of the Expenses, shall be
applied on a monthly basis to reduce the principal balance of the Loan,
which shall include all accrued and unpaid interest pursuant to the
Loan. All funds so applied shall first be applied to the payment of any
outstanding costs, expenses, fees or charges which were required to be
paid pursuant to the Loan Documents, then to the payment of all accrued
interest and then to the repayment of principal. With the exception of
the Borrower's First Priority Return, the term "Expenses" shall not
include any amounts payable to or on behalf of the Borrower,
Transeastern or the Principals. There shall be no prohibition on the
early repayment of amounts outstanding under the Loan and no prepayment
penalty shall be charged in connection therewith, provided, however,
prepayment in full of amounts outstanding under the Note shall not
impair the Borrower's obligations with respect to or the effect of the
Contingent Returns or the Loan Documents evidencing and securing the
same. In the event of such a prepayment the documents securing the
Contingent Returns shall be subordinated to senior financing meeting
the requirements to be established in the Loan Documents.
12. BUDGETS, FINANCIAL STATEMENTS AND REPORTING REQUIREMENTS:
Not less than one hundred-eighty (180) days prior to the beginning of
each fiscal year of the Borrower, the Borrower shall provide the
Lender, for its approval, a budget for the Borrower's operations for
the upcoming fiscal year, including, without limitation, a narrative
description of the Borrower's business plan for such upcoming year
(each, a "BUDGET", collectively, the "BUDGETS"), together with
financial statements reflecting the results of the first six (6) months
of the then current fiscal year. Each Budget shall be reviewed by the
Borrower and revised, if appropriate, shortly before the start of each
fiscal year of the Borrower and shall be delivered together with a
revised financial statement of the Borrower reflecting the internally
generated results of the fiscal year then coming to an end. The Budget
for the first full fiscal year after the Closing shall not be required
to be delivered to the Lender six (6) months in advance of the
commencement of such fiscal year provided that a Budget for the period
from the Closing to the commencement of the first fiscal year after the
Closing, and for such first full fiscal year, is delivered to the
Lender prior to the Closing.
Within sixty (60) days of the end of each fiscal year of the Borrower,
the Lender shall be provided internally prepared financial statements
of the Borrower, including an estimate of the computations reasonably
required to compute the First Contingent Return, the Second Contingent
Return, the Borrower's First Priority Return and the
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 11
Borrower's Second Priority Return. Within one hundred-twenty (120) days
of the end of each fiscal year of the Borrower, the Lender shall be
provided audited financial statements of the Borrower, including an
opinion of the outside accountant as to the computations reasonably
required to compute the First Contingent Return, the Second Contingent
Return, the Borrower's First Priority Return and the Borrower's Second
Priority Return.
The Loan Documents shall call for such additional financial and
operational reporting as the Lender may require and shall provide the
Lender with the right to review the Borrower's books and records and
have the Borrower provide the Lender with copies of the same.
13. NOTE:
The Note shall include provisions for late charges and a default rate
of interest in the event that payments are not received in accordance
with its terms.
14. COLLATERAL, PRIORITY AND OTHER FINANCING:
The Borrower and the Pledgors shall grant to the Lender security
interests in any and all assets of the Borrower, together with and
including, without limitation, the following:
a. MORTGAGE AND SECURITY AGREEMENT: The mortgage and security
agreement shall provide the Lender with a lien on all of
the Land and such of the Improvements as to which a
mortgage lien will attach, including, without limitation
Tracts B, D and F, as well as Tracts C and E, to the extent
acquired by the Borrower; and a security interest in all
fixtures and tangible and intangible personal property of
the Borrower, together with a collateral assignment of all
present and future contracts for the sale, option, lease,
or other use or conveyance of said properties and the
proceeds, profits, rents, royalties and deposits arising
therefrom.
b. ADDITIONAL MORTGAGE AND SECURITY AGREEMENT: The additional
mortgage and security agreement shall be for purpose of
securing the Lender's Contingent Returns and shall provide
the Lender with a lien on the Land and such of the
Improvements as to which a mortgage lien will attach,
including, without limitation, Tracts B, D and F, as well
as Tracts C and E, to the extent acquired by the Borrower;
and security interest in all fixtures and tangible and
intangible personal property of the Borrower, together with
a collateral assignment of all present and future contracts
for
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 12
the sale, option, lease, or other use or conveyance of such
properties and the proceeds, profits, rents profits and
royalties and deposits arising therefrom, SUBORDINATE TO
THE PRIOR INTERESTS OF THE LENDER (AS DESCRIBED ABOVE).
c. PLEDGE AGREEMENTS AND STOCK CERTIFICATES: A Pledge by each
Pledgor of all of such party's legal and beneficial
interest in and to the Borrower, together with stock
certificates evidencing such interests and stock powers,
executed in blank.
d. COLLATERAL ASSIGNMENT OF ACQUISITION CONTRACT: Assignment
of the Borrower's rights and xxxxxxx money pursuant to the
Acquisition Contract, together with all post closing rights
under that agreement.
e. COLLATERAL ASSIGNMENT OF OPTION CONTRACT: Assignment of the
Borrower's rights and xxxxxxx money pursuant to the Option
Contract together with all post closing rights under that
agreement.
f. COLLATERAL ASSIGNMENT OF PURCHASE AND SALE CONTRACTS FOR
CONVEYANCES: Assignment of purchase and sale contracts for
subsequent conveyances of any of the Property and xxxxxxx
money deposits thereunder, together with all proceeds of
such agreements and post closing rights, including, without
limitation, the right to payments, adjustments, refunds or
similar amounts paid to or for the benefit of the Borrower
or its affiliates in connection with the sale of portions
of the Property. Borrower covenants and agrees that Lender,
in its sole discretion, shall have the right to approve any
and all contracts and letters of intent for the sale or
disposition of all or any portion of the Property, at or
before the Closing of this Loan transaction.
g. COLLATERAL ASSIGNMENT OF RIGHTS UNDER SALES CONTRACT ON
TRACT A: Assignment of post closing rights, including,
without limitation, the right to payments, adjustments,
refunds or similar amounts paid to or for the benefit of
the Borrower, Transeastern or their affiliates in
connection with the sale of Tract A.
h. COLLATERAL ASSIGNMENT OF REVENUES: Such assignments
granting a first priority security interest with respect to
all present and future revenues of the Borrower.
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 13
i. COLLATERAL ASSIGNMENTS OF PLANS, SPECIFICATIONS AND
CONSTRUCTION RELATED DOCUMENTS: Assignment of plans and
specifications, development contracts, and utility
commitments, entitlements and other rights associated with
the Property.
j. COLLATERAL ASSIGNMENTS OF OTHER TANGIBLE AND INTANGIBLE
PERSONAL PROPERTY: Assignments of and security agreements
in all other tangible and intangible personal property of
the Borrower, including, without limitation, a general
security interest in contract rights, receivables, accounts
and other assets of the Borrower, assignments of deposits
and other assets supporting letters of credit.
The rights and interests of the Lender in and to the foregoing
Collateral, all of which is sometimes hereinafter referred to as the
"COLLATERAL", shall be senior to all other rights and interests other
than those expressly approved in writing by the Lender. The Lender
acknowledges that Chase Federal shall be granted a mortgage and certain
related assignments and security interests in Tracts B, D and F and
certain rights related thereto as security for a loan and for certain
letters of credit which are more particularly described in PARAGRAPH 6
of this Commitment Letter. Such rights and interests must be acceptable
to the Lender in its sole discretion. In addition, the Borrower shall
be permitted to obtain, and the Lender's security interests shall be
subordinated to, construction loans for the construction of residences
within Tracts D and F and Tract E to the extent that the same is
acquired by the Borrower, provided that such loans shall be with
lenders and pursuant to documents and in amounts and on terms which
shall be acceptable to the Lender, including, without limitation, the
terms governing the relationship between such construction lender and
the Lender. No other financing by the Borrower shall be permitted
pursuant to the Lender's Loan Documents without the express written
approval of the Lender.
Additionally, the Borrower shall obtain and provide to the Lender prior
to Closing, any and all approvals and consents required to grant the
interests referred to in this Paragraph, including, without limitation,
the right to collaterally assign all of its right, title and interest
in and to the Acquisition Contract and the Option Contract, including,
without limitation, the consent of SarahPark, as seller.
15. LOAN DOCUMENTS:
The Borrower, the Pledgors and the Guarantors and such third parties as
shall be specified therein shall execute and deliver to the Lender such
documents, satisfactory in form and content to the Lender and the
Lender's counsel, as shall be required by the Lender for the purpose of
documenting the Loan (hereinafter, the "LOAN DOCUMENTS")
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 14
together with such additional documents, verifications, information and
materials as shall be required by the Lender (the "CLOSING MATERIALS").
The Loan Documents shall provide the Borrower with a fifteen (15) day
curative period for monetary defaults and a thirty (30) day curative
period for non-monetary defaults. The curative period for non monetary
defaults shall be extended to sixty (60) days provided that such breach
can be cured within such sixty (60) day period and the Borrower has
commenced and diligently proceeds to effect such cure. It is the
intention of the Lender to comply with all applicable laws, rules and
regulations in connection with the underwriting, origination,
administration and ownership of the Loan and the Lender reserves the
right to modify the terms and structure of the transaction described
herein as necessary to effectuate compliance with such applicable laws,
rules and regulations.
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 15
16. DEVELOPMENT CONSULTANT:
The Lender may designate a consultant to perform various services on
behalf of the Lender both prior to and after Closing, including,
without limitation, review of plans and specifications and all proposed
changes to them, preparation of a "cost take-off" construction
analysis, if so desired by the Lender, the inspection of construction
work for conformity with the approved plans and specifications and the
approval of requests for Loan disbursements, and review and approval of
the matters described in PARAGRAPH 7 of EXHIBIT A to this Commitment
Letter.
17. CHOICE OF LAW:
THE LENDER CONTEMPLATES THAT ALL ISSUES ARISING IN CONNECTION WITH THE
LOAN AND THE LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, OR TO THE EXTENT
APPLICABLE AND SELECTED BY THE LENDER, UNITED STATES FEDERAL LAW,
PROVIDED, HOWEVER, THAT THOSE ASPECTS OF THE SECURITY DOCUMENTS WHICH
RELATE TO THE ENFORCEMENT OF REMEDIES AGAINST THE COLLATERAL SHALL BE
GOVERNED BY THE LAWS OF FLORIDA. LENDER RETAINS THE RIGHT TO ALTER THE
CHOICE OF LAW PRIOR TO CLOSING FROM THAT STATED HEREIN AND SHALL BE
SATISFIED AT CLOSING THAT IN THE EVENT OF THE REJECTION BY A COURT OF
COMPETENT JURISDICTION OF THE LENDER'S DESIGNATED CHOICE OF LAW WITH
RESPECT TO A PARTICULAR MATTER OR ISSUE, THAT SUCH COURT WOULD APPLY
THE LAW OF THE STATE OF FLORIDA TO SUCH MATTER OR ISSUE AND ALL MATTERS
LITIGATED IN CONNECTION THEREWITH. THE LOAN DOCUMENTS SHALL INCLUDE A
WAIVER BY THE PARTIES OF THE RIGHT TO CLAIM OR RECEIVE CONSEQUENTIAL
DAMAGES IN CONNECTION WITH ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF
OR RELATED TO THE LOAN AND THE BORROWER, TRANSEASTERN, THE PRINCIPALS
AND THE LENDER DO HEREBY WAIVE THE RIGHT TO CLAIM OR RECEIVE
CONSEQUENTIAL DAMAGES IN CONNECTION WITH ANY CLAIM OR CAUSE OF ACTION
ARISING OUT OF OR RELATED TO THIS COMMITMENT LETTER. IN THE EVENT OF
ANY LITIGATION RELATED TO THIS COMMITMENT LETTER, THE PREVAILING PARTY
IN SUCH LITIGATION SHALL BE ENTITLED TO REIMBURSEMENT BY THE
NON-PREVAILING PARTY OF ALL COSTS INCURRED IN CONNECTION WITH SUCH
MATTER.
18. PUBLIC ANNOUNCEMENT:
UPON CLOSING OF THE LOAN, THE LENDER IS AUTHORIZED IN ITS DISCRETION TO
ISSUE NEWS RELEASES AND AT ITS OWN EXPENSE TO PUBLISH "TOMBSTONE ADS"
AND OTHER ANNOUNCEMENTS IN NEWSPAPERS, TRADE JOURNAL AND OTHER
APPROPRIATE MEDIA, CONTAINING INFORMATION ABOUT THE LOAN AS MAY BE
DEEMED NOTEWORTHY BY THE LENDER, INCLUDING WITHOUT LIMITATION THE LEGAL
AND TRADE NAMES OF THE BORROWER AND TRANSEASTERN, THE AMOUNT OF THE
LOAN AND THE NAME, NATURE AND LOCATION OF THE COLLATERAL.
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 16
19. COMMITMENT FEE:
The Borrower shall pay a commitment fee in connection with the issuance
of this Commitment Letter in an amount equal to two (2%) percent of the
Loan Amount (the "COMMITMENT FEE"), all of which shall be deemed earned
upon execution and delivery of this Commitment Letter by the Borrower
in consideration of the Lender's reservation of funds and the
performance of employees of the Lender having special talents in
connection with transactions of this type who have been unable to
devote time to other matters as a result of the time committed to the
documentation of the Loan. A portion of the Commitment Fee equal to one
(1%) percent of the Loan Amount (the "Initial Commitment Fee Payment")
shall be paid in immediately available funds upon acceptance of this
Commitment Letter, and the balance of the Commitment Fee, in an amount
of one (1%) percent of the Loan Amount, shall be paid by the Borrower
to the Lender, in current funds, as a condition precedent to Closing of
the Loan.
20. EXPENSE DEPOSIT:
The Lender acknowledges receipt from the Borrower of the sum of
Twenty-Five Thousand and No/100 ($25,000.00) Dollars ("EXPENSE
DEPOSIT") to be applied to expenses incurred by the Lender, including
without limitation all out of pocket due diligence, documentation and
closing costs, including costs for services performed by third party
professionals (environmental consultants, engineers, etc.) associated
with the Lender's due diligence in underwriting, as well as fees and
costs of the Lender's outside counsel. These costs are payable at the
earlier to occur of Closing or the termination of this Commitment
Letter and will be paid to the extent available from the good faith
expense deposit and thereafter from the assets of the Borrower,
Transeastern and the Principals, who, by execution of the Commitment
Letter, agree to be jointly and severally liable for such obligations.
If the Loan closes, the Lender shall return any portion of such Expense
Deposit which is not applied as provided above, to the Borrower within
45 days after Closing. If the Loan fails to close for reasons beyond
Transeastern's and the Principal's control, any remaining portion of
the Expense Deposit shall be refunded, less the Lender's out of pocket
expenses, personnel costs and a $2,000.00 processing fee.
21. BROKER:
The Borrower warrants that there are no mortgage brokers in this
transaction, other than Holliday, Fenoglio, Xxxxxxxx & Xxxxxx (the
"BROKER") who has been engaged by the Borrower, at the Borrower's
expense. The Borrower shall be responsible for any fees
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 17
of the Broker and shall indemnify, defend and hold the Lender harmless
from all claims by the Broker or any other brokers, unless claiming
through the Lender.
22. ACCEPTANCE AND CLOSING:
This Commitment shall not be effective unless or until it has been
executed by each of Transeastern and the Principals on behalf of
themselves and the Borrower and Pledgors, and delivered together with
the sum of $30,000.00, representing one-half of the Commitment Fee (all
funds to be in immediately available funds), to the Lender. The
delivery of the original acknowledgment and the foregoing fees must
occur no later than Friday, March 15, 1996, or the Lender's agreement
to enter into this Commitment shall terminate.
Upon confirmation of the Borrower's compliance with all of the
conditions precedent specified herein, including, but not limited to
those set forth on EXHIBIT "A" attached hereto, the Lender shall fund
the Loan. The Borrower agrees to exercise diligent efforts to cause
Closing of the Loan to occur on or before March 25, 1996 and
acknowledges that as a material term of this Commitment Letter, time
being of the essence, the Closing of the Loan must occur on or before
March 29, 1996, subject to any extensions which may be mutually agreed
to (the "OUTSIDE DATE FOR CLOSING"). In the event the Borrower, the
Pledgors, and/or Guarantors have not fulfilled any one or all of the
Conditions Precedent by the time set forth in any particular Condition
Precedent, or, if no date is specified, by the Outside Date for
Closing, this Commitment Letter shall terminate and the Lender shall
have no obligations to extend the Loan to the Borrower.
Closing may be conducted through an escrow established with a neutral
third party subject to the Lender's approval. Should Closing of the
Loan not occur by the Outside Date for Closing, this Commitment Letter
shall terminate without further action by the Lender and the Lender
shall have no further obligations to the Borrower. Notwithstanding
anything to the contrary contained in this Commitment Letter, the
obligations of the Borrower, the Principals and Transeastern with
respect to the payment of the Lender's expenses, the payment of
brokerage commissions and pursuant to any indemnities set forth herein,
shall survive termination of the other obligations set forth in this
Commitment Letter.
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 18
23. INDEMNITY:
THE BORROWER, TRANSEASTERN AND THE PRINCIPALS DO, BY ACCEPTING THIS
COMMITMENT LETTER, AGREE ON A JOINT AND SEVERAL BASIS TO DEFEND AND
HOLD THE LENDER HARMLESS FROM ALL LOSS, COST AND EXPENSE INCURRED BY
THE LENDER AS A RESULT OF ANY CLAIM, ALLEGATION, CHARGE, JUDGEMENT OR
INQUIRY RELATED DIRECTLY OR INDIRECTLY TO THE ISSUANCE OF THIS
COMMITMENT LETTER, THE NEGOTIATION OF THE LOAN WITH THE BORROWER OR THE
PROPERTY, EXCEPT TO THE EXTENT IT IS FINALLY DETERMINED THAT SUCH LOSS
WAS CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE LENDER
OR BY THE BREACH BY THE LENDER OF ITS OBLIGATIONS PURSUANT TO THIS
COMMITMENT LETTER. IN CONNECTION WITH THE LOAN, THE LENDER REQUIRES AN
INDEMNIFICATION BY THE BORROWER, TRANSEASTERN AND THE PRINCIPALS
AGAINST ALL MATTERS RELATED TO THE LOAN, INCLUDING, WITHOUT LIMITATION,
ALL THIRD PARTY CLAIMS, INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL
MATTERS, EXCEPT TO THE EXTENT IT IS FINALLY DETERMINED THAT SUCH LOSS
WAS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE LENDER
OR BY THE VIOLATION BY THE LENDER OF THE TERMS OF THE LOAN DOCUMENTS.
24. CONFIDENTIALITY:
Please note that this Commitment Letter and any written or oval advice
provided by the Lender in connection with this arrangement is
exclusively for the information of senior management of the Borrower,
the Pledgors and the Principals and may not be disclosed to any third
party or circulated or referred to publicly without the Lender's prior
written consent. By its execution of this Commitment Letter, the Lender
consents to the making of such disclosure to Chase Federal, SarahPark
and the Borrower's counsel, Xxxx X. Xxxxxx, P.A.
25. ASSIGNMENT, TRANSFER OR SALE:
LENDER RESERVES THE RIGHT TO SELL, ASSIGN OR TRANSFER ALL OR ANY POTION
OF THE LOAN, WITHOUT THE CONSENT OF BORROWER, THE PRINCIPALS, OR THE
PLEDGORS, INCLUDING, WITHOUT LIMITATION, THE SALE OF PARTICIPATING
INTERESTS IN THE LOAN, AND THE BORROWER, THE PRINCIPALS AND THE
PLEDGORS HEREBY AGREE COOPERATE WITH LENDER IN CONNECTION THEREWITH AND
TO EXECUTE SUCH DOCUMENTS CONFIRMING THEIR OBLIGATIONS UNDER THE LOAN
DOCUMENTS AS MAY BE REASONABLY REQUESTED BY THE LENDER.
26. EXECUTION:
This Commitment Letter may be executed in counterparts. Telefaxed
signatures will be effective as originals.
Xx. Xxxxxx Xxxxxxx
March 15, 1996
Page 19
If you should have any questions regarding this matter, please call
Xxxxxxx Xxxxx at (000) 000-0000.
Sincerely,
AMRESCO Funding Corporation
By: _________________________________
Name: _______________________________
Title: ________________________________
This Commitment Letter, including the terms and conditions set forth in
the Exhibits attached hereto, is accepted as of this _________ day of
March, 1996.
TRANSEASTERN PROPERTIES OF SOUTH FLORIDA, INC.
By: __________________________________
Name: ____________________________
Its: ______________________________
________________________________________
Xxxxxx Xxxxxxx, Principal and authorized signatory
for Pledgors and the corporation to be formed as the Borrower
________________________________________
Xxxxxx Xxxxxxx, Principal and authorized signatory
for Pledgors and the corporation to be formed as the Borrower
________________________________________
Xxxx Xxxxx, Principal and authorized signatory
for Pledgors and the corporation to be formed as the Borrower
EXHIBIT "A"
CONDITIONS PRECEDENT TO CLOSING
As conditions precedent to the Closing of the Loan and unless otherwise
specified, all of the items required hereunder shall be submitted to the Lender
no later than ten (10) business days prior to the intended date of the Loan
Closing, to enable Lender, its counsel and the construction consultant
sufficient time to review and comment on these items:
1. EQUITY: At or before Closing, the Borrower shall provide to the Lender
confirmation satisfactory to the Lender that the Borrower will at
Closing contribute, or substantiate that it has contributed, not less
than $450,000.00 to the Project.
2. LOAN DOCUMENTS AND CLOSING MATERIALS: There shall have been delivered
to the Lender, in form and substance acceptable to the Lender and its
counsel, the Loan Documents and the Closing Materials.
3. LOAN AGREEMENT: The Borrower shall execute and deliver a Loan Agreement
which shall include, without limitation, provisions for the following:
a. The general Loan conditions and such affirmative and
negative covenants as shall be required by the Lender
including, without limitation, the following:
i. There shall be no change in the ownership of shares
of Borrower unless Lender, in its sole and absolute
discretion, has given its prior written approval.
ii. The Borrower, Pledgors and Guarantors and any
affiliates and/or family members of same shall
subordinate any and all claims owed to any Borrower,
Pledgor, Guarantor, affiliate or family member to all
amounts due to Lender under the Loan, provided,
however, the Borrower's First Priority Return shall
not be so subordinated to the Contingent Returns and
the Borrower's Second Priority Return shall only be
subordinated to the First Contingent Return.
b. Among the circumstances and conditions which shall create
defaults pursuant to the Loan Agreement shall be the
failure of the Borrower to achieve at least sixty (60%)
percent of the sales projected in the Borrower's sales
projections for any rolling six (6) month period,
commencing four (4) months from the earlier to occur of (a)
the date of pouring the first slab for a residence under
contract for sale to a third party purchaser, or (b) on the
effective date of such a contract for sale, in the event
the slab for such residence has previously been poured,
which sales projections shall be approved by the Lender
prior to Closing.
4. CHASE FEDERAL LOAN AND TRI-PARTY AGREEMENT: The Chase Federal Loan
shall have closed and an agreement acceptable to the Lender among the
Lender, the Chase Federal and the Borrower, governing the rights of the
parties with respect to the loans by the Lender and the Chase Federal
to the Borrower and the collateral for such loans including, without
limitation, provisions requiring:
x. Xxxxx Federal shall provide the Lender with notice of any
default pursuant to the Chase Federal Loan and a reasonable
opportunity to cure the same;
b. Other than future advances for the purposes described in
PARAGRAPH 6 of the main body of this Commitment Letter,
Chase Federal shall be restricted from making future
advances other than advances to protect its collateral and
the collateral in favor of Chase Federal shall secure only
the Chase Federal Loan and shall not be cross
collateralized with any other obligations to Chase Federal
or otherwise;
x. Xxxxx Federal consents to the realization by the Lender of
any of its rights in and to any and all collateral for the
Loan, including, without limitation, those rights which
result in a change in the legal or beneficial ownership of
the Borrower and to a subsequent change in the legal or
beneficial ownership of the Borrower as a result of the
subsequent transfer of the legal or beneficial ownership
interests in the Borrower; and
x. Xxxxx Federal shall consent to the modification or
amendment of the Loan and the Loan Documents provided that
the same does not purport to create a lien or security
interest in any collateral of Chase Federal that would be
prior in dignity to the interest of Chase Federal pursuant
to the Chase Federal Loan unless the same is expressly
agreed to in writing by Chase Federal.
5. TITLE INSURANCE: The Borrower shall provide a standard ALTA mortgagee
title policy from a company approved by Lender. The policy shall be
acceptable in form and substance to the Lender and shall include such
endorsements to coverage as may be requested by the Lender. Borrower
shall deliver funds sufficient to purchase such policy at Closing. If
required by the Lender, Borrower shall execute for recording by Lender
a Notice of Commencement complying with Chapter 713, Florida Statutes,
which Notice of Commencement shall be recorded subsequent to the
recording of Lender's mortgage and shall be posted by Borrower on the
construction site. In the event that the Lender requires the filing of
a Notice of Commencement, Borrower shall also execute and deliver an
Affidavit of Posting, certifying that the Notice of Commencement has
been posted at the project site.
6. SURVEY: As of the date hereof, Borrower does not have surveys of the
property within the Nasher Plat. Borrower shall provide the Lender with
sketches of legal description
A-2
and accompanying legal descriptions, together with such certificates of
Xxxxx & Xxxxxxx, P.A. as shall be reasonably requested by the Lender.
Additionally, upon completion of the Acquisition Contract Development
Work the Borrower shall provide three (3) copies of a recent survey of
each tract of the Property by a registered surveyor certified to
Lender, the title insurance company and the Borrower. The survey shall
be acceptable in form and substance to the Lender and shall be
sufficient to enable the title insurer to delete the so called "survey
exception" from the Title Policy upon the delivery of such surveys.
7. ADDITIONAL DOCUMENTS AND EVIDENCE. Borrower shall provide Lender with
such additional documents and evidence, all of which are to be reviewed
by Lender, its consultants and counsel prior to Closing, and are to be
in form and substance, satisfactory to Lender, which shall address the
following matters and matters related thereto in a manner acceptable to
Lender: (a) evidence of the availability and suitability of the
utilities needed to properly service the Improvements in their intended
uses, including water, sewer, electric, telephone and natural gas (if
applicable); (b) detailed plans and specifications, approved in writing
by Borrower and the general contractor; (c) a copy of the contract
executed by Borrower and the general contractor; (d) appropriate
certificates from Borrower's engineer and general contractor regarding
compliance with applicable laws and the status of permits and
development approvals; (e) a detailed trade breakdown of the cost of
constructing the Acquisition Contract Development Work and Tract
Infrastructure and an itemization of non-construction and land costs;
(f) a report as to soil borings made on each tract of the Property; (g)
evidence in the form of a Phase I environmental assessment of the
Property; (h) copies of the excavation permit, tree removal permit,
land alteration permit, dredge and fill permit, storm water discharge
permit, the building permit and any other permits required for the
development of the Property; (i) evidence that all applicable
governmental authorities have given their approval of Borrower's
development plan for the property within the Nasher Plat, which
approvals will not include individual site plan approvals for Tracts B,
D or F; (j) evidence that Borrower's development proposal for the
Property and the construction of the Improvements are consistent with
concurrency requirements and other applicable provisions of the local
comprehensive plan and local land development regulations; (k) evidence
that the construction of the Imed uses of the Property are in
compliance with all applicable laws, regulations and ordinances; (l)
evidence as to whether or not the Land is located within an area
identified as having special flood hazards pursuant to the Flood
Disaster Protection Act of 1973; (m) insurance, including but not
limited to, flood hazard insurance, Builder's Risk Insurance, Liability
Insurance, and such other insurance as Lender deems necessary; (n)
written confirmation satisfactory to Lender that one
A-3
hundred percent (100%) of the stock of Borrower is owned by Pledgors;
(o) certified copies of Borrower's and other appropriate entities'
Articles of Incorporation and Bylaws and any amendments thereto or
modifications thereof; (p) resolutions authorizing the transaction; (q)
a Certificates of Incumbency from Borrower and other appropriate
entities; and (r) all other Loan documents or items that are
customarily provided in loan transactions of this type or necessary in
connection with Lender's equity requirements. Borrower, the Principals
and the Pledgors shall provide such copies and/or originals of the
foregoing, as the Lender may request, which shall be certified,
endorsed or approved by all parties specified by the Lender and any
such assignments of the foregoing in favor of Lender, shall be
consented to as may be required pursuant to the Loan Documents.
8. BORROWER'S ATTORNEY OPINION: The Borrower shall provide a written
opinion addressed to Lender, from counsel for the Borrower acceptable
to the Lender, concerning those matters requested by Lender's counsel,
and including the following:
a. ENFORCEABILITY: an opinion regarding enforceability of the
Loan Documents under applicable law, and an opinion
regarding the choice of law provision set forth in the Loan
Documents.
b. FORMATION, OWNERSHIP AND AUTHORIZATION: an opinion
regarding the due formation of the Borrower and Pledgors,
an opinion regarding the record ownership of the stock of
Borrower and Pledgors, and an opinion regarding the due
authorization of this transaction.
c. PERFECTION: an opinion regarding perfection of the security
interests in the Collateral.
d. LITIGATION: Neither the Borrower, Transeastern, the
Pledgors, nor the Principals, is a party to any pending
litigation.
e. COMPLIANCE: Borrower has obtained all requisite consents,
approvals, licenses and permits of the local, regional,
state and federal governmental agencies which have
jurisdiction over, and regulations relating to, the
construction and operation of the Improvements.
(Certificates from Borrower's engineers and general
contractor may be attached as support for this opinion.)
f. ZONING: The Land is validly zoned to permit the use of the
Property as represented to the Lender. When completed in
accordance with the plans and specifications submitted to
Lender, the Property will comply with the applicable local
zoning regulations, including requirements as to parking,
lot size, access and building set backs.
g. LAND USE: The proposed Improvements are in compliance with
the concurrency requirements and all other applicable
requirements of the
A-4
local comprehensive plan (as amended pursuant to the Local
Government Comprehensive Planning and Land Development
Regulation Act), and with the land development regulations
adopted pursuant thereto. Borrower has received all
necessary land development approvals from the local
development review department.
h. D.R.I.: The Improvements do not constitute a Development
of Regional Impact as defined in Section 380.06 of the
Florida Statutes.
i. INTERNAL REVENUE ("FIRPTA"): Borrower complied with Section
1445 of the Internal Revenue Code of 1954, as added by
Section 129 of Public Law 98-369, in connection with
Borrower's acquisition of the Land. (A copy of the seller's
affidavit shall be attached to the opinion.)
j. USURY: The Loan and the Interest Rate and the Contingent
Returns do not violate laws applicable to civil or criminal
usury.
9. PRINCIPALS' AND PLEDGORS' ATTORNEYS' OPINION: The Principals and the
Pledgors shall deliver to Lender opinion(s) of independent counsel
satisfactory to Lender, which opinion(s) shall include, without
limitation, an opinion as to the enforceability of the Guaranty
executed by the Principals and the pledge documents executed by the
Pledgors. Counsel to the Principals and the Pledgors may be, but are
not required to be, the same counsel as that of Borrower.
10. FINANCIAL STATEMENTS: The Lender shall have received financial
statements of Transeastern and the Principals, acceptable to the
Lender.
11. TAXES: As soon as reasonably practicable, the Borrower shall provide
evidence that each tract of the Property will be separately assessed
for tax purposes and information as to folio numbers, tax rates,
estimated tax values and the identities of the taxing authorities.
Prior to Closing, the Borrower shall provide the Lender with
satisfactory proof as to the manner in which real ,property taxes for
the Property have been allocated and pro-rated as between the Borrower
and SarahPark.
12. NON-COMPETE AGREEMENT: The Borrower shall provide to Lender, in form
and substance satisfactory to Lender, a non-compete agreement covering
competition within one-half mile of the Project by other projects of
the Borrower, Transeastern, the Principals or the Pledgors.
13. EXPENSES: Whether or not the Loan closes, Borrower shall be
responsible and liable for, and shall hold Lender harmless from, and
shall pay, all costs and expenses incurred in connection with the Loan
(pre- and post-closing) including, but not limited to: (a) any unpaid
portion of Loan commitment fees; (b) title, hazard and other insurance
premiums; (c) surveys; appraisals, brokerage commissions and claims of
brokerage; (d)
A-5
property, documentary stamp and intangible taxes; (e) attorneys' fees;
(f) design and engineering fees, including, without limitation fees of
any consultant; (g) Lender's development consultant's fees; (h)
hazardous substance report costs; and (i) recording charges. Borrower
shall reimburse Lender for all such costs and expenses paid by Lender.
14. LOAN APPLICATION: The issuance of this Commitment is based upon the
accuracy of your representations and statements, any loan application
and all additional information, representations, exhibits and other
matters submitted to Lender for its consideration. Lender shall have
the option to declare this Commitment to be breached if (i) there shall
have been any material misrepresentation or misstatement or any
material error in anything submitted to Lender; (ii) there shall have
been a material adverse change in the Property, the Project or the
state of facts submitted to Lender, or in the financial condition of
Borrower, any Principal or any Pledgor; (iii) Borrower, any Principal
or any Pledgor has become insolvent, bankrupt, incapacitated or is
deceased; or (iv) the Lender is otherwise not satisfied, in its sole
and absolute discretion, with the background, experience and track
record of the Principals or Transeastern.
A-6
PROMISSORY NOTE
$3,000,000 March 29, 0000
Xxxx Xxxxxxxxxx, Xxxxxxx
PAYMENT SCHEDULE AND MATURITY DATE. FOR VALUE RECEIVED, the
undersigned (herein called "MAKER," whether one or more) hereby promises to pay
to the order of AMRESCO FUNDING CORPORATION, a Delaware corporation ("LENDER")
without offset, in immediately available funds in lawful money of the United
States of America, at X.X. XXX 000000, XXXXXXX, XXXXXXX 00000-0000, the
principal sum of THREE MILLION AND NO/100 DOLLARS ($3,000,000) (or the unpaid
balance of all principal advanced against this Note, if that amount is less),
plus amounts capitalized pursuant to the terms hereof, together with interest on
the unpaid principal balance of this Note from day to day outstanding as
hereinafter provided, as follows:
INTEREST PAYMENTS. Commencing on May 1, 1996 and on the first
(1st) day of each month thereafter until April 1, 1998 (the "MATURITY DATE"),
Maker (i) shall make payments of interest in arrears at the Pay Rate (as defined
in Section 3 hereof), and (ii) may make payments of all or a portion of the
interest earned at the Accrual Rate (as defined in Section 3 hereof) and the
balance of such accrued interest that has not been paid in accordance with this
clause (ii) shall be added to the unpaid principal amount of this note (this
"NOTE") on the first (1st) day of each month and shall thereafter accrue
interest together with the unpaid principal amount of this Note at the Stated
Rate.
PRINCIPAL PAYMENTS. Maker shall apply the sums described in
Section 3.2 of the Loan Agreement (as defined in Paragraph 2 below) to the
payment of the obligations described therein, including, without limitation and
to the extent provided for therein, to the reduction of the unpaid principal
balance of this Note. On the Maturity Date the entire unpaid principal amount of
this Note, together with all unpaid principal and interest shall be due and
payable.
SECURITY; LOAN DOCUMENTS. The loan evidenced by this Note is
further evidenced, secured and governed by that certain Loan Agreement of even
date herewith between Maker and Lender (the "LOAN AGREEMENT" - unless otherwise
defined herein all capitalized terms used in this Note shall have the meanings
assigned to the same in the Loan Agreement). All of the terms, definitions,
conditions and covenants of the Loan Documents are expressly made a part of this
Note by reference in the same manner and with the same effect as if set forth
herein at length, and any holder of this Note is entitled to the benefit of and
remedies provided in the Loan Documents. Subject to the terms and conditions of
this Note and the Loan Documents, Lender shall advance funds to Maker pursuant
to the terms of the Loan Agreement.
DOCUMENTARY STAMPS IN THE AMOUNT OF $________ HAVE BEEN PAID AND PROPER STAMPS
HAVE BEEN AFFIXED TO THE MORTGAGE.
INTEREST RATE.
Subject to the further provisions of this Section 3, the unpaid
principal balance of this Note from day to day outstanding which is not past due
shall bear interest at a rate per annum equal to the lesser of: ( the Maximum
Rate (hereinafter defined); or ( the Stated Rate (hereinafter defined) computed
on the Annual Basis (hereinafter defined). The term "STATED RATE" as used in
this Note means a fixed rate of twenty percent (20%) per annum. The terms "PAY
RATE" and "ACCRUAL RATE" as used in this Note each means a fixed rate of ten
percent (10%) per annum, thereby totaling the Stated Rate of twenty percent
(20%) per annum.
The "Annual Basis" referred to in this Note means computation of
interest for the actual number of days elapsed and as if each year were composed
of 365 days.
Any principal of, and to the extent permitted by applicable law,
any interest on this Note, and any other sum payable hereunder, which is not
paid when due shall bear interest, from the date due and payable until paid,
payable on demand, at a rate per annum (the "PAST DUE RATE") equal to the lesser
of (i) the Stated Rate plus two and four-tenths percent (2.4%) or (ii) the
Maximum Rate. The term "Maximum Rate" as used in this Note means the maximum
nonusurious rate of interest per annum permitted by the law of the state of
Florida, including to the extent permitted by applicable law, any amendments
thereof hereafter or any new law hereafter coming into effect to the extent a
higher Maximum Rate is permitted thereby. The interest that accrues hereunder at
the Maximum Rate and that remains unpaid shall be added to the unpaid principal
amount of this Note on the first (1st) day of each month and shall thereafter
accrue interest together with the unpaid principal amount of this Note at the
Maximum Rate. The Maximum Rate shall be applied by taking into account all
amounts characterized by applicable law as interest on the debt evidenced by
this Note, so that the aggregate of all interest does not exceed the maximum
nonusurious amount permitted by applicable law (the "MAXIMUM AMOUNT").
PREPAYMENT. Maker may prepay the principal balance of this Note,
in full at any time or in part from time to time, provided that: ( Lender shall
have actually received from Maker at least five (5) business days' prior written
notice of Maker's intent to prepay, of the amount of principal which will be
prepaid (the "PREPAID PRINCIPAL") and of the date on which the prepayment will
be made; and ( each prepayment shall be in the amount of 100% of the Prepaid
Principal, plus accrued unpaid interest thereon to the date of prepayment, plus
any other sums which have become due to Lender under the Loan Documents on or
before the date of prepayment but have not been paid. If this Note is prepaid in
full, any commitment of Lender for further advances shall automatically
terminate. Any partial prepayment shall be applied in accordance with Paragraph
6 below and shall not postpone the due date of any subsequent installments or
the Maturity Date, or change the amount of such installments due, unless Lender
shall otherwise agree in writing.
CERTAIN PROVISIONS REGARDING PAYMENTS. All payments made as
scheduled on this Note and all prepayments shall be applied as provided in the
Loan Agreement. Remittances in payment of any part of the indebtedness shall
not, regardless of any receipt or credit issued therefor, constitute payment
until such amount is actually received by the holder hereof in immediately
2
available U.S. funds and shall be made and accepted subject to the condition
that any check or draft may be handled for collection in accordance with the
practice of the collecting bank or banks. Acceptance by the holder hereof of any
payment in an amount less than the amount then due on any indebtedness shall be
deemed an acceptance on account only and shall not in any way excuse the
existence of a Default (as defined in Section 6 below).
DEFAULT/ACCELERATION.
It shall be a default ("DEFAULT") under this Note in the event
that: (a) any principal, interest or other amount of money due under this Note
is not paid in full within ten (10) days after the same is due, regardless of
how such amount may have become due; or (b) there shall occur any Event of
Default (as such term is defined in the Loan Agreement). Upon the occurrence of
a Default, the holder hereof shall have the right to declare the unpaid
principal balance and accrued but unpaid interest on this Note at once due and
payable (and upon such acceleration, the same shall be at once due and payable
without presentation, demand, protest or notice of any kind, which are all
hereby waived by Maker, and this Note shall thereafter bear interest at the Past
Due Rate), to foreclose any liens and security interests securing payment hereof
and to exercise any of its other rights, powers and remedies under this Note,
under any other Loan Document, or at law or in equity.
All of the rights, remedies, powers and privileges (together,
"RIGHTS") of the holder hereof provided for in this Note and in any other Loan
Document are cumulative of each other and of any and all other Rights at law or
in equity. The resort to any Right shall not prevent the concurrent or
subsequent employment of any other appropriate Right. No single or partial
exercise of any Right shall exhaust it, or preclude any other or further
exercise thereof, and every Right may be exercised at any time and from time to
time. No failure by the holder hereof to exercise, nor delay in exercising any
Right, including but not limited to the right to accelerate the maturity of this
Note, shall be construed as a waiver of any Default or as a waiver of the Right.
Without limiting the generality of the foregoing provisions, the acceptance by
the holder hereof from time to time of any payment under this Note which is past
due or which is less than the payment in full of all amounts due and payable at
the time of such payment, shall not ( constitute a waiver of or impair or
extinguish the right of the holder hereof to accelerate the maturity of this
Note or to exercise any other Right at the time or at any subsequent time, or
nullify any prior exercise of any such Right, or ( constitute a waiver of the
requirement of punctual payment and performance or a novation in any respect.
If any holder of this Note retains an attorney in connection with
any Default or at the Maturity Date or to collect, enforce or defend this Note
or any other Loan Document in any lawsuit, at trial, or in any appellate,
probate, reorganization, bankruptcy or other proceeding, or if Maker sues any
holder in connection with this Note or any other Loan Document and does not
prevail, then Maker agrees to pay to each such holder, in addition to principal,
interest and any other sums owing to Lender under the Loan Documents, all
reasonable costs and expenses incurred by such holder in trying to collect this
Note or in any such suit or proceeding, including without limitation reasonable
attorneys' fees, paralegals' fees and costs.
3
CONTROLLING AGREEMENT. All parties to the Loan Documents intend
to comply with applicable usury law. All existing and future agreements
regarding the debt evidenced by this Note are hereby limited and controlled by
the provisions of this Section. In no event (including but not limited to
prepayment, default, demand for payment, or acceleration of maturity) shall the
interest taken, reserved, contracted for, charged or received under this Note or
under any of the other Loan Documents or otherwise, exceed the Maximum Amount.
If, from any possible construction of any document, interest would otherwise be
payable in excess of the Maximum Amount, then IPSO FACTO, such document shall be
reformed and the interest payable reduced to the Maximum Amount, without
necessity of execution of any amendment or new document. If the holder hereof
ever receives interest in an amount which apart from this provision would exceed
the Maximum Amount, the excess shall, without penalty, be refunded to the payor,
or at the option of such payor, be applied to the unpaid principal of this Note
in inverse order of maturity of installments and not to the payment of interest.
The holder hereof does not intend to charge or receive unearned interest on
acceleration. All interest paid or agreed to be paid to the holder hereof shall
be spread throughout the full term (including any renewal or extension) of the
debt so that the amount of interest does not exceed the Maximum Amount. The
provisions of this Section 8 are further supplemented by the provisions of
Section 3.7 of the Loan Agreement.
GENERAL PROVISIONS.
Time is of the essence hereunder. If more than one person or
entity executes this Note as Maker, all of said parties shall be jointly and
severally liable for payment of the indebtedness evidenced hereby. Maker and all
sureties, endorsers, guarantors and any other party now or hereafter liable for
the payment of this Note in whole or in part, hereby severally ( waive demand,
presentment for payment, notice of dishonor and of nonpayment, protest, notice
of protest, notice of intent to accelerate, notice of acceleration and all other
notices (except any notices which are specifically required by this Note or any
other Loan Document), filing of suit and diligence in collecting this Note or
enforcing any of the security therefor; ( agree to any substitution,
subordination, exchange or release of any such security or the release of any
party primarily or secondarily liable hereon; ( agree that the holder hereof
shall not be required first to institute suit or exhaust its remedies hereon
against Maker or others liable or to become liable hereon or to perfect or
enforce its rights against them or any security therefor; and ( consent to any
extensions or postponements of time of payment of this Note for any period or
periods of time and to any partial payments, before or after maturity, and to
any other indulgences with respect hereto, without notice thereof or further
consent of Maker or any guarantors to any of them.
A determination that any provision of this Note 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
Note 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 or circumstances. The remaining provisions of this Note shall remain
operative and in full force and effect and shall in no way be affected
prejudiced, or disturbed thereby. This Note may not be amended except in a
writing specifically intended for the purpose and executed by the party against
whom enforcement of the amendment is sought. In the event any provisions of this
Note are inconsistent with the provisions of the Loan Documents, or any other
agreements or documents
4
executed in connection with this Note, this Note shall control. The holder of
this Note may, from time to time, sell or offer to sell the loan evidenced by
this Note, or interests therein, to one or more assignees or participants and is
hereby authorized to disseminate any information it has pertaining to the loan
evidenced by this Note, including, without limitation, any security for this
Note and credit information on Maker, any of its principals and any guarantor of
this Note, to any such assignee or participant or prospective assignee or
prospective participant, and to the extent, if any, specified in any such
assignment or participation, such assignee(s) or participant(s) shall have the
rights and benefits with respect to this Note and the other Loan Documents as
such person(s) would have if such person(s) were Lender hereunder. Maker
warrants and represents to Lender and all other holders of this Note that the
loan evidenced by this Note is and will be for business or commercial purposes
and not primarily for personal, family, or household use. The terms, provisions,
covenants and conditions hereof shall be binding upon Maker and the heitives,
successors and assigns of Maker. Captions and headings in this Note are for
convenience only and shall be disregarded in construing it. The pronouns used in
this instrument shall be construed as masculine, feminine or neuter as the
occasion may require. Use of the singular includes the plural, and vice versa.
Any reference herein to a day or business day shall be deemed to refer to a
banking day which shall be a day on which Lender is open for the transaction of
business, excluding any national holidays, and any performance which would
otherwise be required on a day other than a banking day shall be timely
performed in such instance, if performed on the next succeeding banking day.
Notwithstanding such timely performance, interest shall continue to accrue
hereunder until such payment or performance has been made.
SUBMISSION TO JURISDICTION. Maker irrevocably and
unconditionally: (a) agrees that any suit, action, or other legal proceeding
arising out of or relating to this Note may be brought, at the option of the
Lender, in a court of record of the STATE OF FLORIDA IN BROWARD COUNTY, IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA, or in any
other court of competent jurisdiction; (b) consents to the jurisdiction of each
such court in any such suit, action, or proceeding; (c) waives any objection
which it may have to the laying of venue of any such suit, action, or proceeding
in any of such courts; and (d) agrees that service of any court paper may be
effected on Maker as may be provided under applicable laws or court rules in
said State. Maker hereby irrevocably appoints Xxxx Xxxxxx, whose address is Two
Executive Court, 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000,
as agent for the service of process for the purposes of any purported
controversy or cause of action arising out of this Note or any Loan Document.
CONFLICT OF LAW. This Note shall be construed, interpreted,
enforced and governed by and in accordance with the laws of the STATE OF FLORIDA
(excluding the principles thereof governing conflicts of law).
FURTHER ASSURANCE. Maker agrees, upon the written request of
Lender, to execute and deliver to Lender from time to time any additional
instruments or documents reasonably considered necessary by Lender or its
counsel to cause this Note to be, become or remain valid and effective in
accordance with its terms.
WAIVER OF TRIAL BY JURY. TO THE EXTENT ANY LITIGATION BETWEEN
LENDER AND MAKER MAY ARISE IN CONNECTION WITH THIS NOTE, LENDER
5
AND MAKER KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT
EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR
COUNTERCLAIM BASED ON THIS NOTE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH
THIS NOTE OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS
NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT
FOR LENDER ACCEPTING THIS NOTE FROM MAKER AND FOR MAKER GIVING THIS NOTE TO
LENDER.
IN WITNESS WHEREOF, Maker has duly executed this Note as of the date
first above written.
MAKER:
TRANSEASTERN PEMBROKE
VILLAGES, INC., a Florida corporation
By:____________________________
Name:_______________________
Title: President
6
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this _____
day of March, 1996, by , as of TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida
corporation, on behalf of the corporation. He/she is personally known to me or
has produced a driver's license as identification.
Print or Stamp Name:
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
7
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "AGREEMENT"), dated the 29th day of
March, 1996, by TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida corporation,
having a place of business at 0000 Xxxxxxxxxx Xxxxx, Xxxxx 0, Xxxxx Xxxxxxx, XX
00000 ("DEBTOR") in favor of AMRESCO FUNDING CORPORATION, a Delaware
corporation, having a place of business at 0000 Xxxxxxx Xxxxxxx Xxxxxxx, Xxxxxx,
Xxxxx 00000 ("SECURED PARTY").
WHEREAS, Secured Party and Debtor have entered into that certain Loan
Agreement of even date herewith (the "LOAN AGREEMENT"). Unless otherwise defined
herein, all capitalized terms used herein shall have the meanings assigned to
the same in the Loan Agreement.
WHEREAS, Secured Party will lend and Debtor will borrow the sum of
THREE MILLION AND NO/100 DOLLARS ($3,000,000.00) (the "LOAN"), evidenced by a
certain Promissory Note (the "NOTE") executed and delivered by Debtor to Secured
Party of even date herewith; and
WHEREAS, as security for the Note, Debtor, on even date herewith,
granted Secured Party the Mortgage on certain real property owned by Debtor and
located in Broward County, Florida (the "PROPERTY"), as more particularly
described in EXHIBIT "A" attached hereto and incorporated herein; and
WHEREAS, in accordance with the terms of the Loan Agreement, and to
further secure the Note and other Loan Documents, but excluding the Contingent
Returns, Debtor hereby grants to Secured Party a security interest in certain of
the assets of the Debtor now or hereinafter located on the Property, as
hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the
covenants hereinafter set forth, the parties hereto agree as follows:
SECTION L. CREATION OF SECURITY INTEREST.
Debtor hereby grants to Secured Party a security interest in the
following described property:
(a) All of Debtor's inventory, of whatever type or
description, wherever located and whether now owned or hereafter acquired;
(b) All of Debtor's accounts, which include, but are not
limited to, all notes receivable, accounts receivable, beach club dues,
membership fees, and all other forms of customer obligations now existing and
which may at any time hereafter come into existence;
(c) All of Debtor's vehicles, equipment, machinery,
furniture, fixtures and other items of personal property, whether now or
hereafter acquired;
(d) All of Debtor's permits, licenses, and other
governmental approvals;
(e) Debtor's business on an ongoing basis, together with
all goodwill of the business, and all of Debtor's customer lists, routes, price
lists, patents, trademarks, service marks, trade names, trade secrets and other
proprietary information;
(f) All of Debtor's cash, certificates of deposit,
securities, instruments and general intangibles;
(g) The right to all insurance proceeds of all insurance
covering the Collateral as hereinafter defined;
(h) All proceeds, products, replacements, additions,
substitutions and accessions of and to all of the foregoing; and
(i) All personal property of Debtor, whether now or
hereafter existing or now owned or hereafter acquired, of every kind and
description, tangible or intangible, now or hereafter in the possession, custody
or control of Secured Party, now or hereafter existing.
Paragraphs (a) through (i) are collectively herein referred to as the
"COLLATERAL".
SECTION 2. OBLIGATIONS SECURED.
Such security interest shall secure the Note and the payment and
performance of any and all indebtedness, obligations and liabilities of any kind
of Debtor to Secured Party and also to others to the extent of their
participations granted to or interests therein created or acquired for them by
Secured Party, now or hereafter existing, arising directly between Debtor and
Secured Party or acquired outright, conditionally or as collateral security from
another by Secured Party, absolute or contingent, joint or several, secured or
unsecured, due or not due, contractual or tortious, liquidated or unliquidated,
arising by operation of law or otherwise, direct or indirect, including, but
without limiting the generality of the foregoing, indebtedness, obligations or
liabilities of Debtor as a member of any partnership, syndicate, association or
other group, to Secured Party, and whether incurred by Debtor as principal,
surety, indorser, guarantor, accommodation party or otherwise, provided,
however, that the foregoing shall exclude all obligations of Borrower arising
from the Contingent Returns which are secured by a separate security agreement
(all of the foregoing matters are collectively referred to as the
"OBLIGATIONS").
SECTION 3.DEBTOR'S COVENANTS, REPRESENTATIONS AND WARRANTIES.
Debtor covenants, represents and warrants that:
(a) Debtor is the owner of the Collateral free from any
adverse lien, security interest, or encumbrance, other than the security
interest granted hereby and the Permitted Title Exceptions.
- 2 -
(b) Debtor will defend the Collateral against all claims
and demands of all persons at any time claiming the same or any interest
therein.
(c) None of the Collateral shall be subject to a purchase
money security interest other than that of Secured Party or otherwise permitted
under the Loan Agreement.
(d) The Collateral is and shall be kept at the Property, or
at Debtor's principal place of business, where Secured Party may inspect it at
any reasonable time. Debtor shall not remove the Collateral from said location
without the prior written consent of Secured Party. The Collateral will not be
allowed to be wasted, misused or abused or to deteriorate, except for ordinary
wear and tear, and will not be used in violation of any law, ordinance or
regulation of any governmental authority.
(e) The Collateral shall be insured with such carriers and
in such amounts and against such risks as shall be reasonably satisfactory to
Secured Party, with policies payable to Secured Party as its interest may
appear. All policies of insurance shall provide for thirty (30) days' prior
written notice of cancellation, modification, termination or expiration to
Secured Party, and Secured Party shall be furnished with duplicate policies or
other evidence of compliance with the foregoing insurance provisions.
(f) Debtor will pay, when due, all taxes and assessments
upon the Collateral or its operation or use.
(g) At its option, and without any obligation to do so,
Secured Party may discharge or pay any taxes, liens, security interests or other
encumbrances at any time levied or placed on or against the Collateral or
Debtor, and may pay for insurance on the Collateral, and may pay for the
Collateral's maintenance and preservation. Debtor agrees to reimburse Secured
Party on demand for any such payment made or expense incurred pursuant to the
foregoing authorizations or, at Secured Party's option, any payment made by
Secured Party may be added to the balance of the liability then owing.
(h) The Collateral will not, without the prior written
consent of Secured Party, be sold, leased, transferred, disposed of or
substantially modified except for the sale, replacement or other disposition of
the Collateral in the ordinary course of Debtor's business.
(i) Debtor hereby authorizes Secured Party to file such
financing statements relating to the Collateral without Debtor's signature
thereon, as Secured Party may deem appropriate. Debtor shall also execute from
time to time, along or with Secured Party, any financing statements or other
documents, and do such other act or acts considered by Secured Party to be
necessary or desirable to perfect or protect the security interest hereby
created, and shall pay all costs and expenses (including, without limitation,
reasonable fees and expenses of counsel and filing fees) related to the
preparation and filing of any financing statements, continuation statements or
other documents related to the perfection or protection of the security interest
hereby created.
- 3 -
SECTION 4. RIGHTS OF SECURED PARTY PRIOR TO DEFAULT.
(a) Notwithstanding any other part of this Agreement,
Secured Party may enter upon the Property or such other of Debtor's premises, at
any reasonable time, to inspect Debtor's books and records pertaining to the
Collateral or its proceeds, and Debtor shall assist Secured Party in whatever
way necessary to make any inspection.
(b) Debtor hereby agrees that upon five (5) days' written
notice from Secured Party, it will do any or all of the following:
(l) deliver to Secured Party lists or copies of
all accounts, which are proceeds of Debtor's Collateral, promptly after they
arise; and/or
(2) join with Secured Party, at its request, in
executing financing statements and pay the cost of filing the same wherever
Secured Party deems, and will do, make, execute and deliver all such additional
and further acts, things, deeds, assurances and instruments as Secured Party may
require to completely vest in it and assure to it its rights hereunder in and to
the Collateral and the proceeds thereof and will pay all out-of-pocket expenses,
including attorneys' fees and disbursements including appellate, bankruptcy and
post judgment proceedings, incurred or expended by Secured Party in connection
with this Agreement and other agreements relating to the Collateral, the
enforcement of any of the obligations or the administration, preservation or
protection of or realization upon the Collateral or any part thereof.
SECTION 5. RIGHTS OF DEBTOR PRIOR TO DEFAULT.
Until an Event of Default shall have occurred or as otherwise
provided herein, Debtor may use the Collateral in any lawful manner not
inconsistent with this Agreement and with the terms of insurance thereon.
SECTION 6. EVENTS OF DEFAULT.
Debtor shall be in default under this Security Agreement upon (a) the
occurrence of an Event of Default under the Loan Agreement; or (b) loss, theft,
substantial change or destruction to a substantial portion of the Collateral
unless replaced forthwith or covered by insurance.
Upon the happening of any of the foregoing Events of Default, the
Obligations shall become and be immediately due and payable. Debtor expressly
waives any presentment, demand, protest or other notice of any kind.
SECTION 7.SECURED PARTY'S REMEDIES AND ADDITIONAL RIGHTS AFTER
DEFAULT.
Upon the occurrence of an Event of Default, Secured Party shall have
the rights and remedies of a secured party under the Florida Uniform Commercial
Code or any other applicable law.
- 4 -
Without limiting the generality of the foregoing, Secured Party may exercise the
following rights and remedies:
(a) Secured Party may peaceably, or by its own means or
with judicial assistance by injunction or otherwise, enter the Property or such
other of Debtor's premises and take possession of the Collateral, or render it
unusable, or dispose of the Collateral on the Property, and Debtor will not
resist or interfere with such action;
(b) Secured Party may with judicial assistance by
injunction, or otherwise, require Debtor, at Debtor's expense, to assemble all
or any part of the Collateral and make it available to Secured Party at any
place designated by Secured Party. Debtor hereby agrees that any place
designated by Secured Party within Broward County, Florida, is a place
reasonably convenient to Debtor to assemble such Collateral;
(c) Debtor hereby agrees that a notice to Debtor, at least
five (5) days before the time of any intended sale or of the time after which
any public or private sale or other disposition of the Collateral is to be made,
shall be deemed to be reasonable notice of such sale or other disposition;
(d) In the event of sale or other disposition of any of the
Collateral, Secured Party may apply the proceeds of any such sale or disposition
to the satisfaction of its reasonable attorneys' fees, legal expenses, and other
costs and expenses incurred in connection with its taking, retaking, holding,
preparing for sale and selling of the Collateral;
(e) Without precluding any other methods of sale, the sale
of Collateral shall have been made in commercially reasonable manner if
conducted in conformity with reasonable commercial practices but, in any event,
Secured Party may sell on such terms as it may choose, without assuming any
credit risk and without any obligation to advertise or give notice of any kind;
(f) The Collateral need not be present at any public or
private sale or in view of the purchaser or purchasers, and title shall pass
upon such sale wherever the property or any part thereof is located with like
effect as though all the property were present and in the possession of the
person conducting the sale and where physically delivered to the purchaser or
purchasers; Secured Party may bid for and purchase at any public or private sale
the Collateral offered for sale or any part thereof, and by such purchase, shall
become the owner thereof;
(g) In the case of the exercise of any of the rights or
remedies of Secured Party hereunder, all Collateral, and other property or
security given to secure the Obligations, may be offered for sale for one total
price, and the proceeds of such sale accounted for in one account without
distinction between items of security or without assigning to them any
proportion of the proceeds of such sale. Debtor, insofar as it legally may do
so, hereby waives the application of any doctrine of marshaling. At the option
of Secured Party, the Collateral, or such other property or security for the
Obligations, may be offered for sale separately at different times and/or
locations.
- 5 -
No such separate sale shall preclude subsequent sales of the Collateral or the
exercise by Secured Party of any other right or remedy hereunder;
(h) Secured Party may deduct from the gross proceeds of any
public or private sale the expenses incurred by Secured Party in connection
therewith, including reasonable attorneys' fees and brokers' commissions, if
any, and the net proceeds then remaining shall be applied first to the
satisfaction of the amount owed to Secured Party by Debtor and any amount then
remaining shall be returned to Debtor; and
(i) If the proceeds from the sale of the Collateral are not
sufficient to satisfy the indebtedness of Debtor to Secured Party, Secured Party
may proceed against Debtor for any deficiency.
SECTION 8. MISCELLANEOUS.
(a) No failure on the part of Secured Party to exercise,
and no delay in exercising any right or remedy hereunder, shall operate as a
waiver thereof, nor shall any single or partial exercise by Secured Party of any
right or remedy hereunder preclude any other or future exercise thereof, or the
exercise of any other right or remedy.
(b) This Security Agreement and the rights and obligations
of the parties hereunder shall be construed and interpreted in accordance with
the laws of the STATE OF FLORIDA without regard for its conflict of laws
doctrine.
(c) In the event of a conflict between the terms and
conditions of this Security Agreement and the Note, the Mortgage, or the Loan
Agreement, then, and in that event occurring, the terms and conditions of the
Note, the Mortgage, or the Loan Agreement shall prevail.
(d) The terms of this Security Agreement shall be binding
upon Debtor and its successors and permitted assigns and shall inure to the
benefit of Secured Party and its heirs, executors, administrators, personal
representatives, successors and assigns.
(e) This Security Agreement may not be changed orally, but
only by an instrument in writing and signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
SECTION 9. WAIVER OF JURY TRIAL.
THE PARTIES HERETO MUTUALLY AND WILLINGLY WAIVE THE RIGHT TO A TRIAL
BY JURY OF ANY AND ALL CLAIMS MADE BETWEEN THEM WHETHER NOW EXISTING OR ARISING
IN THE FUTURE, INCLUDING WITHOUT LIMITATION, ANY AND ALL CLAIMS, DEFENSES,
COUNTERCLAIMS, CROSS CLAIMS, THIRD PARTY CLAIMS AND INTERVENOR'S CLAIMS WHETHER
ARISING FROM OR
- 6 -
RELATED TO THE NEGOTIATION, EXECUTION AND PERFORMANCE OF THE TRANSACTIONS TO
WHICH THIS DOCUMENT RELATES.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
DEBTOR:
TRANSEASTERN PEMBROKE
VILLAGES, INC., a Florida corporation
By:
Name:
Title:
(CORPORATE SEAL)
SECURED PARTY:
AMRESCO FUNDING CORPORATION,
a Delaware corporation
By:
Name:
Title:
(CORPORATE SEAL)
- 7 -
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 29th day of
March, 1996, by _______________________ , as _________________ of TRANSEASTERN
PEMBROKE VILLAGES, INC., a Florida corporation, on behalf of the corporation.
He/she is personally known to me or has produced a driver's license as
identification.
Print or Stamp Name: ________________________
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
STATE OF )
) ss.:
COUNTY OF )
The foregoing instrument was acknowledged before me this 29th day of
March, 1996, by __________________________ , as _______________________ of
AMRESCO FUNDING CORPORATION, a Delaware corporation, on behalf of the
corporation. He/she is personally known to me or has produced a driver's license
as identification.
Print or Stamp Name: ________________________
Notary Public, State of at Large
Commission No.:
My Commission Expires:
- 8 -
EXHIBIT "A"
LEGAL DESCRIPTION
SECURITY AGREEMENT (CONTINGENT RETURNS)
THIS SECURITY AGREEMENT (this "AGREEMENT"), dated the 29th day of
March, 1996, by TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida corporation,
having a place of business at 0000 Xxxxxxxxxx Xxxxx, Xxxxx 0, Xxxxx Xxxxxxx, XX
00000 ("DEBTOR") in favor of AMRESCO FUNDING CORPORATION, a Delaware
corporation, having a place of business at 0000 Xxxxxxx Xxxxxxx Xxxxxxx, Xxxxxx,
Xxxxx 00000 ("SECURED PARTY").
WHEREAS, Secured Party and Debtor have entered into that certain Loan
Agreement of even date herewith (the "LOAN AGREEMENT"). Unless otherwise defined
herein, all capitalized terms used herein shall have the meanings assigned to
the same in the Loan Agreement.
WHEREAS, as security for the payment of the Contingent Returns,
Debtor, on even date herewith, granted Secured Party the Contingent Mortgage on
certain real property owned by Debtor and located in Broward County, Florida
(the "PROPERTY"), as more particularly described in EXHIBIT "A" attached hereto
and incorporated herein; and
WHEREAS, in accordance with the terms of the Loan Agreement, and to
further secure the Borrower's obligations to pay the Contingent Returns under
the Loan Agreement, Debtor hereby grants to Secured Party a security interest in
certain of the assets of the Debtor now or hereinafter located on the Property,
as hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and of the
covenants hereinafter set forth, the parties hereto agree as follows:
SECTION L. CREATION OF SECURITY INTEREST.
Debtor hereby grants to Secured Party a security interest in the
following described property:
(a) All of Debtor's inventory, of whatever type or
description, wherever located and whether now owned or hereafter acquired;
(b) All of Debtor's accounts, which include, but are not
limited to, all notes receivable, accounts receivable, beach club dues,
membership fees, and all other forms of customer obligations now existing and
which may at any time hereafter come into existence;
(c) All of Debtor's vehicles, equipment, machinery,
furniture, fixtures and other items of personal property, whether now or
hereafter acquired;
(d) All of Debtor's permits, licenses, and other
governmental approvals;
(e) Debtor's business on an ongoing basis, together with
all goodwill of the business, and all of Debtor's customer lists, routes, price
lists, patents, trademarks, service marks, trade names, trade secrets and other
proprietary information;
(f) All of Debtor's cash, certificates of deposit,
securities, instruments and general intangibles;
(g) The right to all insurance proceeds of all insurance
covering the Collateral as hereinafter defined;
(h) All proceeds, products, replacements, additions,
substitutions and accessions of and to all of the foregoing; and
(i) All personal property of Debtor, whether now or
hereafter existing or now owned or hereafter acquired, of every kind and
description, tangible or intangible, now or hereafter in the possession, custody
or control of Secured Party, now or hereafter existing.
Paragraphs (a) through (i) are collectively herein referred to as the
"COLLATERAL".
SECTION 2. OBLIGATIONS SECURED.
Such security interest shall secure the Borrower's obligations to pay
the Contingent Returns in accordance with the terms of the Loan Agreement (all
of the foregoing matters are collectively referred to as the "OBLIGATIONS").
SECTION 3.DEBTOR'S COVENANTS, REPRESENTATIONS AND WARRANTIES.
Debtor covenants, represents and warrants that:
(a) Debtor is the owner of the Collateral free from any
adverse lien, security interest, or encumbrance, other than the security
interest granted hereby and the Permitted Title Exceptions.
(b) Debtor will defend the Collateral against all claims
and demands of all persons at any time claiming the same or any interest
therein.
(c) None of the Collateral shall be subject to a purchase
money security interest other than that of Secured Party or otherwise permitted
under the Loan Agreement.
(d) The Collateral is and shall be kept at the Property, or
at Debtor's principal place of business, where Secured Party may inspect it at
any reasonable time. Debtor shall not remove the Collateral from said location
without the prior written consent of Secured Party. The Collateral will not be
allowed to be wasted, misused or abused or to deteriorate, except for ordinary
wear and tear, and will not be used in violation of any law, ordinance or
regulation of any governmental authority.
- 2 -
(e) The Collateral shall be insured with such carriers and
in such amounts and against such risks as shall be reasonably satisfactory to
Secured Party, with policies payable to Secured Party as its interest may
appear. All policies of insurance shall provide for thirty (30) days' prior
written notice of cancellation, modification, termination or expiration to
Secured Party, and Secured Party shall be furnished with duplicate policies or
other evidence of compliance with the foregoing insurance provisions.
(f) Debtor will pay, when due, all taxes and assessments
upon the Collateral or its operation or use.
(g) At its option, and without any obligation to do so,
Secured Party may discharge or pay any taxes, liens, security interests or other
encumbrances at any time levied or placed on or against the Collateral or
Debtor, and may pay for insurance on the Collateral, and may pay for the
Collateral's maintenance and preservation. Debtor agrees to reimburse Secured
Party on demand for any such payment made or expense incurred pursuant to the
foregoing authorizations or, at Secured Party's option, any payment made by
Secured Party may be added to the balance of the liability then owing.
(h) The Collateral will not, without the prior written
consent of Secured Party, be sold, leased, transferred, disposed of or
substantially modified except for the sale, replacement or other disposition of
the Collateral in the ordinary course of Debtor's business.
(i) Debtor hereby authorizes Secured Party to file such
financing statements relating to the Collateral without Debtor's signature
thereon, as Secured Party may deem appropriate. Debtor shall also execute from
time to time, along or with Secured Party, any financing statements or other
documents, and do such other act or acts considered by Secured Party to be
necessary or desirable to perfect or protect the security interest hereby
created, and shall pay all costs and expenses (including, without limitation,
reasonable fees and expenses of counsel and filing fees) related to the
preparation and filing of any financing statements, continuation statements or
other documents related to the perfection or protection of the security interest
hereby created.
SECTION 4. RIGHTS OF SECURED PARTY PRIOR TO DEFAULT.
(a) Notwithstanding any other part of this Agreement,
Secured Party may enter upon the Property or such other of Debtor's premises, at
any reasonable time, to inspect Debtor's books and records pertaining to the
Collateral or its proceeds, and Debtor shall assist Secured Party in whatever
way necessary to make any inspection.
(b) Debtor hereby agrees that upon five (5) days' written
notice from Secured Party, it will do any or all of the following:
(l) deliver to Secured Party lists or copies of
all accounts, which are proceeds of Debtor's Collateral, promptly after they
arise; and/or
- 3 -
(2) join with Secured Party, at its request, in
executing financing statements and pay the cost of filing the same wherever
Secured Party deems, and will do, make, execute and deliver all such additional
and further acts, things, deeds, assurances and instruments as Secured Party may
require to completely vest in it and assure to it its rights hereunder in and to
the Collateral and the proceeds thereof and will pay all out-of-pocket expenses,
including attorneys' fees and disbursements including appellate, bankruptcy and
post judgment proceedings, incurred or expended by Secured Party in connection
with this Agreement and other agreements relating to the Collateral, the
enforcement of any of the obligations or the administration, preservation or
protection of or realization upon the Collateral or any part thereof.
SECTION 5. RIGHTS OF DEBTOR PRIOR TO DEFAULT.
Until an Event of Default shall have occurred or as otherwise
provided herein, Debtor may use the Collateral in any lawful manner not
inconsistent with this Agreement and with the terms of insurance thereon.
SECTION 6. EVENTS OF DEFAULT.
Debtor shall be in default under this Security Agreement upon (a) the
occurrence of an Event of Default under the Loan Agreement; or (b) loss, theft,
substantial change or destruction to a substantial portion of the Collateral
unless replaced forthwith or covered by insurance.
Upon the happening of any of the foregoing Events of Default, the
Obligations shall become and be immediately due and payable. Debtor expressly
waives any presentment, demand, protest or other notice of any kind.
SECTION 7.SECURED PARTY'S REMEDIES AND ADDITIONAL RIGHTS AFTER
DEFAULT.
Upon the occurrence of an Event of Default, Secured Party shall have
the rights and remedies of a secured party under the Florida Uniform Commercial
Code or any other applicable law. Without limiting the generality of the
foregoing, Secured Party may exercise the following rights and remedies:
(a) Secured Party may peaceably, or by its own means or
with judicial assistance by injunction or otherwise, enter the Property or such
other of Debtor's premises and take possession of the Collateral, or render it
unusable, or dispose of the Collateral on the Property, and Debtor will not
resist or interfere with such action;
(b) Secured Party may with judicial assistance by
injunction, or otherwise, require Debtor, at Debtor's expense, to assemble all
or any part of the Collateral and make it available to Secured Party at any
place designated by Secured Party. Debtor hereby agrees that any place
designated by Secured Party within Broward County, Florida, is a place
reasonably convenient to Debtor to assemble such Collateral;
- 4 -
(c) Debtor hereby agrees that a notice to Debtor, at least
five (5) days before the time of any intended sale or of the time after which
any public or private sale or other disposition of the Collateral is to be made,
shall be deemed to be reasonable notice of such sale or other disposition;
(d) In the event of sale or other disposition of any of the
Collateral, Secured Party may apply the proceeds of any such sale or disposition
to the satisfaction of its reasonable attorneys' fees, legal expenses, and other
costs and expenses incurred in connection with its taking, retaking, holding,
preparing for sale and selling of the Collateral;
(e) Without precluding any other methods of sale, the sale
of Collateral shall have been made in commercially reasonable manner if
conducted in conformity with reasonable commercial practices but, in any event,
Secured Party may sell on such terms as it may choose, without assuming any
credit risk and without any obligation to advertise or give notice of any kind;
(f) The Collateral need not be present at any public or
private sale or in view of the purchaser or purchasers, and title shall pass
upon such sale wherever the property or any part thereof is located with like
effect as though all the property were present and in the possession of the
person conducting the sale and where physically delivered to the purchaser or
purchasers; Secured Party may bid for and purchase at any public or private sale
the Collateral offered for sale or any part thereof, and by such purchase, shall
become the owner thereof;
(g) In the case of the exercise of any of the rights or
remedies of Secured Party hereunder, all Collateral, and other property or
security given to secure the Obligations, may be offered for sale for one total
price, and the proceeds of such sale accounted for in one account without
distinction between items of security or without assigning to them any
proportion of the proceeds of such sale. Debtor, insofar as it legally may do
so, hereby waives the application of any doctrine of marshaling. At the option
of Secured Party, the Collateral, or such other property or security for the
Obligations, may be offered for sale separately at different times and/or
locations. No such separate sale shall preclude subsequent sales of the
Collateral or the exercise by Secured Party of any other right or remedy
hereunder;
(h) Secured Party may deduct from the gross proceeds of any
public or private sale the expenses incurred by Secured Party in connection
therewith, including reasonable attorneys' fees and brokers' commissions, if
any, and the net proceeds then remaining shall be applied first to the
satisfaction of the amount owed to Secured Party by Debtor and any amount then
remaining shall be returned to Debtor; and
(i) If the proceeds from the sale of the Collateral are not
sufficient to satisfy the indebtedness of Debtor to Secured Party, Secured Party
may proceed against Debtor for any deficiency.
- 5 -
SECTION 8. MISCELLANEOUS.
(a) No failure on the part of Secured Party to exercise,
and no delay in exercising any right or remedy hereunder, shall operate as a
waiver thereof, nor shall any single or partial exercise by Secured Party of any
right or remedy hereunder preclude any other or future exercise thereof, or the
exercise of any other right or remedy.
(b) This Security Agreement and the rights and obligations
of the parties hereunder shall be construed and interpreted in accordance with
the laws of the STATE OF FLORIDA without regard for its conflict of laws
doctrine.
(c) In the event of a conflict between the terms and
conditions of this Security Agreement and the Contingent Mortgage or the Loan
Agreement, then, and in that event occurring, the terms and conditions of the
Contingent Mortgage or the Loan Agreement shall prevail.
(d) The terms of this Security Agreement shall be binding
upon Debtor and its successors and permitted assigns and shall inure to the
benefit of Secured Party and its heirs, executors, administrators, personal
representatives, successors and assigns.
(e) This Security Agreement may not be changed orally, but
only by an instrument in writing and signed by the party against whom
enforcement of any waiver, change, modification or discharge is sought.
SECTION 9. WAIVER OF JURY TRIAL.
THE PARTIES HERETO MUTUALLY AND WILLINGLY WAIVE THE RIGHT TO A TRIAL
BY JURY OF ANY AND ALL CLAIMS MADE BETWEEN THEM WHETHER NOW EXISTING OR ARISING
IN THE FUTURE, INCLUDING WITHOUT LIMITATION, ANY AND ALL CLAIMS, DEFENSES,
COUNTERCLAIMS, CROSS CLAIMS, THIRD PARTY CLAIMS AND INTERVENOR'S CLAIMS WHETHER
ARISING FROM OR RELATED TO THE NEGOTIATION, EXECUTION AND PERFORMANCE OF THE
TRANSACTIONS TO WHICH THIS DOCUMENT RELATES.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
DEBTOR:
TRANSEASTERN PEMBROKE
VILLAGES, INC., a Florida corporation
By:
Name:
Title:
(CORPORATE SEAL)
[SIGNATURES AND ACKNOWLEDGEMENTS CONTINUE ON NEXT PAGE]
- 6 -
SECURED PARTY:
AMRESCO FUNDING CORPORATION,
a Delaware corporation
By:
Name:
Title:
(CORPORATE SEAL)
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 29th day of
March, 1996, by _________________________ , as _____________________ of
TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida corporation, on behalf of the
corporation. He/she is personally known to me or has produced a driver's license
as identification.
Print or Stamp Name: ________________________
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
STATE OF )
) ss.:
COUNTY OF )
The foregoing instrument was acknowledged before me this 29th day of
March, 1996, by ____________________________ , as ______________________ of
AMRESCO FUNDING CORPORATION, a Delaware corporation, on behalf of the
corporation. He/she is personally known to me or has produced a driver's license
as identification.
Print or Stamp Name: ________________________
Notary Public, State of at Large
Commission No.:
My Commission Expires:
- 7 -
EXHIBIT "A"
LEGAL DESCRIPTION
Record and Return To:
Xxxx X. Xxxxxx, Esq.
Two Executive Court
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
ASSIGNMENT OF LEASES, RENTS AND PROFITS
THIS ASSIGNMENT OF LEASES, RENTS AND PROFITS (this "ASSIGNMENT"), made
this 29th day of March, 1996, by TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida
corporation, ("ASSIGNOR"), having its principal office at 0000 Xxxxxxxxxx Xxxxx,
Xxxxx 0, Xxxxx Xxxxxxx, XX 00000 to AMRESCO FUNDING CORPORATION, a Delaware
corporation ("ASSIGNEE"), having an office at 0000 Xxxxxxx Xxxxxxx Xxxxxxx,
Xxxxxx, Xxxxx 00000.
WITNESSETH:
WHEREAS, Assignor is the present owner in fee simple of real estate
situate, lying and being in Broward County, Florida, as more particularly
described in EXHIBIT "A" attached hereto and made a part hereof (the
"PROPERTY"); and
WHEREAS, in consideration of Assignee making that certain loan in the
principal amount of THREE MILLION AND NO/100 DOLLARS ($3,000,000.00) (the
"LOAN") to Assignor, which Loan is evidenced by, among other things, a certain
Promissory Note in the original principal amount of $3,000,000.00, from Assignor
in favor of Assignee, and a Loan Agreement (the "LOAN AGREEMENT") between
Assignor and Assignee, all of even date herewith and secured by, among other
things, the Mortgage (unless otherwise defined herein all capitalized terms used
herein shall have the meanings assigned to the same in the Loan Agreement);
NOW, THEREFORE, for value received and as security for the payment of
said obligations of Assignor under the Loan Documents, Assignor, for itself and
for its successors and assigns, does hereby transfer, assign and deliver unto
Assignee, its successors and assigns, all of the right, title and interest of
Assignor in and to (1) all leases, subleases, tenancies and any other agreements
affecting the use of the Property, whether written or oral, now or hereafter
existing with respect to any portion or portions of the Property, together with
any renewals or extensions thereof and leases, subleases, tenancies and such
agreements in substitution therefor (collectively,
the "ASSIGNED LEASES"), (2) all rents and other payments of every kind due or
payable and to become due or payable to Assignor by virtue of the Assigned
Leases, or otherwise due or payable and to become due or payable to Assignor as
the result of any issue, possession or occupancy of any portion or portions of
the Property, (3) all right, title and interest of Assignor in and to all
guarantees of the Assigned Leases and (4) any award made in any court proceeding
involving any of the lessees in any bankruptcy, insolvency, or reorganization
proceedings in any state or federal court.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
until such time as the indebtedness secured by the Mortgage shall have been paid
in full, for the purpose of further and collaterally securing (1) payment of the
indebtedness evidenced by the Note, the Loan Agreement and the other Loan
Documents, together with the interest on said indebtedness; (2) payment of all
other sums, with interest thereon, to become due and payable to Assignee
hereunder or under the provisions of the other Loan Documents or any other
obligation of Assignor to Assignee now or hereafter existing; and (3)
performance and discharge of each and every obligation, covenant and agreement
of Assignor contained herein or in the other Loan Documents or any other
obligation of Assignor to Assignee now or hereafter existing, provided, however,
that the foregoing obligations shall exclude Borrower's obligations to pay the
Contingent Returns which is secured by a separate assignment of leases, rents
and profits (the obligations of Borrower under this Assignment and the other
Loan Documents are collectively herein referred to as the "OBLIGATIONS").
This instrument of Assignment is delivered and accepted upon the
following terms and conditions:
1. ASSIGNOR'S LICENSE TO OPERATE IF NO DEFAULT.
So long as no Event of Default shall occur, Assignor shall have a
license to manage and operate the Property and to collect, receive and apply for
its own account all rents, issues and profits accruing by virtue of the Assigned
Leases, and to execute and deliver proper receipts and acquittances therefor,
PROVIDED, HOWEVER, that without the written consent of Assignee, Assignor shall
not collect any installment of rent in advance of the respective dates
prescribed in the Assigned Leases for the payment thereof other than a two (2)
months advance rental in the form of a security deposit for the first and last
month of any lease term (the "PERMITTED ADVANCE RENTAL PAYMENTS").
2. ASSIGNEE'S RIGHTS IN EVENT OF DEFAULT.
2.1 Immediately upon the occurrence of any Event of Default and,
at the option of Lender, which option may be exercised by giving written notice
thereof to Assignee, the license mentioned in the foregoing Paragraph 1 hereof
shall cease and terminate, and in such event Assignee is hereby expressly and
irrevocably authorized to enter and take possession of the Property by actual
physical possession, or by written notice to Assignor served in accordance with
- 2 -
Paragraph 10 hereof, without further authorization, notice or demand (except as
otherwise specifically provided in the Loan Agreement or any other Loan
Documents) and without the commencement of any action to foreclose the Mortgage
or to exercise its power of sale thereunder.
2.2 Assignor does hereby constitute and appoint Assignee,
following such entry and taking of possession, irrevocably, with full power of
substitution and revocation, its true and lawful attorney, for it and in its
name, place and stead, to do and perform any or all of the following actions, as
fully, to all intents and purposes, as it could do if personally present, hereby
ratifying and confirming all that its said attorney or its substitute shall
lawfully do or cause to be done by virtue hereof:
(a) manage and operate the Property or any part thereof;
(b) lease any part or parts thereof for such periods of
time, and upon such terms and conditions as Assignee may, in its sole
discretion, deem proper;
(c) enforce, cancel or modify any of the Assigned Leases;
(d) demand, collect, xxx for, attach, levy, recover,
receive, compromise and adjust, and make, execute and deliver receipts and
releases for all rents, issues, profits and other amounts that may then be or
may thereafter become due, owing or payable with respect to the Property or any
part thereof from any present or future lessees, guests, tenants, subtenants or
occupants thereof;
(e) institute, prosecute to completion or compromise and
settle, all summary proceedings, actions for rent or for removing any and all
lessees, guests, tenants, subtenants or occupants of the Property or any part or
parts thereof;
(f) enforce or enjoin or restrain the violation of any of
the terms, provisions and conditions of any lease or leases, now or hereafter
affecting the Property or any part thereof;
(g) make such repairs and alterations to the Property as
Assignee may, in its reasonable discretion, deem proper;
(h) pay, from and out of rents, issues and profits
collected in respeclevied, assessed or imposed against the Property, or any
portion thereof, and also any and all other charges, costs and expenses which it
may be necessary or advisable for Assignee to pay in the management or operation
of the Property, including (without limiting the generality of any rights,
powers, privileges and authority hereinbefore or hereinafter conferred) the
costs of such repairs and
- 3 -
alterations, commissions for renting the Property or any portions thereof, any
legal expenses in enforcing claims, preparing papers or for any other services
that may be required; and
(i) generally, do, execute and perform any other act,
deed, matter or thing whatsoever that ought to be done, executed and performed
in and about or with respect to the Property, as fully as Assignor might do,
provided, however, that any action, or failure or refusal to act, by Assignee
under this subparagraph 2.2 shall be at its election and without any liability
on Assignee's part.
2.3 Assignee shall apply the net amount of rents, issues and
profits received by it from the Property, after payment of all proper costs and
charges (including any liability, loss, expense or damage hereinafter referred
to in paragraph 5 hereof), first to the payment, when due, of the installments
of interest payable under the Note, and thereafter to the payment of principal
thereunder. Any of such funds remaining after such application shall be paid as
soon as reasonably practicable by Assignee to Assignor or paid over to such
persons as Assignor may designate to Assignee in writing.
2.4 Assignee shall be accountable to Assignor only for monies
actually received by Assignee pursuant to this Assignment and the acceptance of
this Assignment shall not constitute a satisfaction of any indebtedness,
liability or obligations, or any part thereof, now or hereafter owed by Assignor
to Assignee, except to the extent of amounts actually received and applied by
Assignee on account of the same.
2.5 The rights and powers of Assignee hereunder shall continue
and remain in full force and effect until all amounts secured hereby, including
any deficiency resulting from foreclosure sale, are paid in full, and shall
continue after commencement of foreclosure and after foreclosure sale and until
expiration of the equity of redemption, notwithstanding the sale of the Property
to a purchaser other than Assignee. Assignee shall not be liable to Assignor or
any one claiming under or through Assignor by reason of anything done or left
undone by Assignee hereunder.
2.6 For the purposes of this paragraph 2, a default shall be
deemed to be cured only when Assignor shall have paid in full all sums owing and
past due, and/or shall have performed all other terms, covenants and conditions,
the failure in the performance of which shall terminate the license contained in
paragraph 1 hereof, such default shall have been waived by Assignee, in writing.
3. ATTORNMENT OF LESSEES IN EVENT OF DEFAULT.
Assignor hereby irrevocably directs each Lessee under each Assigned
Lease, upon demand and notice from Assignee of an Event of Default, to pay
Assignee all rents, issues and profits accruing or due under its Assigned Lease
from and after the receipt of such demand and notice.
- 4 -
Any Lessee making such payment to Assignee shall be under no obligation to
inquire into or determine the actual existence of any such default claimed by
Assignee.
4. COVENANTS OF ASSIGNOR.
Assignor, for itself and for its successors and assigns, covenants and
warrants as follows:
(a) that each of the Assigned Leases now or hereafter in effect
is and shall be a valid and subsisting lease and that there are, to the extent
ascertainable by Assignor, no defaults on the part of any of the parties
thereto;
(b) that Assignor has not sold, assigned, transferred, mortgaged
or pledged any of the rents, issues or profits from the Property or any part
thereof, except as permitted by the Loan Agreement, whether now or hereafter to
become due, to any person, firm or corporation other than Assignee;
(c) that no rents issues or profits of the Property, or any part
thereof, becoming due subsequent to the date hereof have been collected (other
than Permitted Advance Rental Payments) nor has payment of any of the sums been
anticipated, waived, released, discounted or otherwise discharged or
compromised;
(d) that it will not assign, pledge or otherwise encumber any of
the Assigned Leases or any of the rents thereunder unless the prior written
consent of Assignee shall have been obtained thereto or the Loan Agreement
specifically allows for the same and unless the instrument creating such
assignment, pledge or encumbrance shall expressly state that the same is subject
to this assignment;
(e) that it will not, without in each case having obtained the
prior written consent of Assignee thereto, amend or modify, directly or
indirectly in any respect whatsoever cancel, terminate, or accept any surrender
of any Assigned Lease, without Lender's prior written consent which may be
withheld in Lender's sole discretion.
(f) that it will not waive or give any consent with respect to
any default or variation in the performance of any of the terms, covenants, and
conditions on the part of any lessee, sublessee, tenant or other occupant to be
performed under any of the Assigned Leases, but will at all time take proper
steps to enforce all of the provisions and conditions thereof;
(g) that it will not collect or receive, without in each case
having obtained the prior written consent of Assignee thereto from any such
lessee, sublessee, tenant or other occupant, any installment of rent in advance
of the respective dates prescribed in the Assigned Leases, except for Permitted
Advance Rental Payments;
- 5 -
(h) that it will perform and observe, or cause to be performed
and observed, all of the terms, covenants and conditions on its part to be
performed and observed with respect to each of the Assigned Leases;
(i) that it will, upon written request by Assignee, while this
agreement remains in force and effect, serve such written notices upon any
lessee, sublessee, tenant, guest or other occupant of any portion of the
Property concerning this Assignment, or include among the written provisions of
any instrument hereafter creating any such lease, sublease, tenancy or right of
occupancy specific reference to this Assignment, and make, execute and deliver
all such powers of attorney, instruments of pledge or assignment, and such other
instruments or documents as Assignee may reasonably request at any time for the
purpose of securing its rights hereunder;
(j) that at all times during which this Assignment shall be in
effect, Assignor will use its best efforts to keep the Property fully rented at
the highest possible rentals obtainable; and
(k) that Assignor shall (a) notify Assignee promptly when any
Assigned Lease, is hereafter extended, renewed, amended or modified, and (b)
furnish to Assignee, on demand, true copies of all Assigned Leases hereafter
executed and true copies of each agreement or letter effecting the renewal,
amendment or modification of any Assigned Lease.
5. INDEMNIFICATION.
5.1 Assignor hereby agrees to indemnify and hold Assignee
harmless (a) against and from any and all liability, loss, damage and expense,
including but not limited to reasonable attorneys' fees, paralegals' fees and
expenses on both the trial and appellate level which it may or shall incur under
or in connection with any of the Assigned Leases, or by reason of any of the
Obligations, or by reason of any action taken by Assignee under any of the
Obligations (including without limitation any action which Assignee in its
discretion may make to protect its interest in the Property, including without
limitation the making of advances and the entering into of any action or
proceeding arising out of or connected with the Assigned Leases or the
Obligations), and (b) against and from any and all claims and demand whatsoever
which may be asserted against Assignor by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants and
conditions contained in any of the Assigned Leases.
5.2 Should Assignee incur any such liability, loss, damage or
expense, the amount thereof, together with interest thereon at the Default
Interest Rate, as defined in the Note, shall be payable by Assignor to Assignee
immediately upon demand, or at the option of Assignee, Assignee may reimburse
itself therefor out of any rents, issues or profits of the Property collected by
Assignee.
5.3 Nothing contained herein shall operate or be construed to
obligate Assignee to perform any of the terms, covenants or conditions contained
in any Assigned Lease, or to take any measures, legal or otherwise, to enforce
collection of any of said rents or other payments,
- 6 -
or otherwise to impose any obligation upon Assignee with respect to any of said
leases, including but not limited to, any obligation arising out of any covenant
of quiet enjoyment therein contained, in the event that any lessee shall have
been joined as a party defendant in any action to foreclose the Mortgage and the
estate of such lessee shall have been thereby terminated.
5.4 Prior to actual entry into any taking possession of the
Property by Assignee, this Assignment shall not operate to place upon Assignee
any responsibility for the operation, control, care, management or repair of the
Property, and the execution of this assignment by Assignor shall constitute
conclusive evidence that all responsibility for the operation, control, care,
management and repair of the Property is and shall be that of Assignor prior to
such actual entry and taking of possession.
6. EXERCISE OF REMEDIES.
Failure of Assignee to avail itself of any of the terms, covenants and
conditions of this Assignment for any period of time, or at any time or times,
shall not be construed or deemed to be a waiver of any of its rights hereunder.
The rights and remedies of Assignee under this Assignment are cumulative and are
not in lieu of but are in addition to any other rights and remedies which
Assignee shall have under or by virtue of any other of the Obligations. The
rights and remedies of Assignee hereunder may be exercised from time to time and
as often as such exercise is deemed expedient.
7. ASSIGNMENT BY ASSIGNEE.
Assignee shall have the right to assign to any subsequent holder of the
Mortgage, or to any person acquiring title to the Property, Assignor's rights,
title and interest in any lease hereby or hereafter assigned, subject, however,
to the provisions of this Assignment. After Assignor shall have been barred and
foreclosed of all right, title and interest and equity of redemption in said
Property, no assignee of Assignor's interest in said leases shall be liable to
account to Assignor for any rents, income, revenue, issues or profits thereafter
accruing.
8. TERMINATION OF THIS AGREEMENT.
Upon payment in full of all the indebtedness secured by the Mortgage, as
evidenced by a recorded satisfaction or release of Mortgage, as well as any sums
which may be payable hereunder, this Assignment shall become and be void and of
no effect and, in that event, upon the request of Assignor, Assignee covenants
to execute and deliver to Assignor instruments effective to evidence the
termination of this Assignment and/or the reassignment to Assignor of the
rights, power and authority granted herein.
- 7 -
9. NO MERGER OF ASSIGNED LEASES.
As against Assignee, at all times during which this Assignment shall be
in effect, there shall be no merger of the Assigned Leases or the leasehold
estate created thereby with the fee estate in the Property by reason of the fact
that the Assigned Leases or any interest therein may be held by or for the
account of any person, firm or corporation which may be or become the owner of
said fee estate, unless Assignee shall consent in writing to said merger.
10. NOTICE.
Any notice, demand, request or other communication given hereunder or in
connection herewith shall be given in accordance with the Loan Agreement.
11. MISCELLANEOUS PROVISIONS.
11.1 Whenever the context so requires, reference herein to the
neuter gender shall include the masculine and/or feminine gender, and the
singular number shall include the plural.
11.2 All of the provisions of this Assignment shall be deemed and
construed to be "conditions" and "covenants" as though the words specifically
expressing or importing covenants and conditions were used in each separate
provision hereof.
11.3 This Assignment is being delivered and is intended to be
performed in the STATE OF FLORIDA and shall be construed and enforced in
accordance with and governed by the laws of such state.
11.4 No change, amendment, modification, cancellation or
discharge hereof, or of any part hereof, shall be valid unless Assignee shall
have consented thereto in writing.
11.5 In the event there is any conflict between the terms and
provisions of the Mortgage or the Loan Agreement and the terms and provisions of
this Assignment, the terms and provisions of the Mortgage or Loan Agreement
shall prevail.
11.6 The provisions of this instrument shall be binding upon
Assignor and its heirs, personal representatives, successors or permitted
assigns and upon Assignee and its participants, successors or assigns. The word
"Assignor" shall be construed to mean any one or more persons or person or
parties who are holders of the legal title or equity of redemption to or in the
Property.
11.7 The captions of this Assignment are for convenience and
reference only and neither in any way define, limit, or describe the scope or
interest of this Assignment nor in any way affect this Assignment.
- 8 -
11.8 In case any one or more of the provisions contained in this
Assignment are, or shall for any reason be held to be, invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof or thereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included.
12. WAIVER OF JURY TRIAL. ASSIGNEE AND ASSIGNOR HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR ASSIGNEE ENTERING INTO THIS AGREEMENT.
IN WITNESS WHEREOF, Assignor and Assignee have caused these presents to
be executed by their duly authorized officer, on the day and year first above
written.
Signed, sealed and delivered
in the presence of: ASSIGNOR:
TRANSEASTERN PEMBROKE
VILLAGES, INC., a Florida corporation
By:
Name:
Title:
(CORPORATE SEAL)
- 9 -
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this _____ day of
March, 1996, by , as of TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida
corporation, on behalf of the corporation. He/she is personally known to me or
has produced a driver's license as identification.
Print or Stamp Name: ________________________
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
[EXHIBITS FOLLOW]
- 10 -
This Instrument Was Prepared By:
Xxxxxx X. Xxxxxx, Esq.
Gunster, Yoakley, Xxxxxx-Xxxxx & Xxxxxxx, P.A.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000
- 11 -
EXHIBIT "A"
LEGAL DESCRIPTION
Record and Return To:
Xxxx X. Xxxxxx, Esq.
Two Executive Court
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
ASSIGNMENT OF LEASES, RENTS AND PROFITS
(CONTINGENT RETURNS)
THIS ASSIGNMENT OF LEASES, RENTS AND PROFITS (this "ASSIGNMENT"), made
this 29th day of March, 1996, by TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida
corporation, ("ASSIGNOR"), having its principal office at 0000 Xxxxxxxxxx Xxxxx,
Xxxxx 0, Xxxxx Xxxxxxx, XX 00000 to AMRESCO FUNDING CORPORATION, a Delaware
corporation ("ASSIGNEE"), having an office at 0000 Xxxxxxx Xxxxxxx Xxxxxxx,
Xxxxxx, Xxxxx 00000.
WITNESSETH:
WHEREAS, Assignor is the present owner in fee simple of real estate
situate, lying and being in Broward County, Florida, as more particularly
described in EXHIBIT "A" attached hereto and made a part hereof (the
"PROPERTY"); and
WHEREAS, in consideration of Assignee making that certain loan in the
principal amount of THREE MILLION AND NO/100 DOLLARS ($3,000,000.00) (the
"LOAN") to Assignor, Assignor has agreed to pay certain "Contingent Returns" as
defined in that certain Loan Agreement of even date between Assignor and
Assignee (the "LOAN AGREEMENT") (unless otherwise defined herein all capitalized
terms used herein shall have the meanings assigned to the same in the Loan
Agreement), the payment of which is secured by the Contingent Mortgage;
NOW, THEREFORE, for value received and as security for the payment of
said obligations of Assignor to pay the Contingent Returns pursuant to the terms
of the Loan Agreement, Assignor, for itself and for its successors and assigns,
does hereby transfer, assign and deliver unto Assignee, its successors and
assigns, all of the right, title and interest of Assignor in and to (1) all
leases, subleases, tenancies and any other agreements affecting the use of the
Property, whether written or oral, now or hereafter existing with respect to any
portion or portions
of the Property, together with any renewals or extensions thereof and leases,
subleases, tenancies and such agreements in substitution therefor (collectively,
the "ASSIGNED LEASES"), (2) all rents and other payments of every kind due or
payable and to become due or payable to Assignor by virtue of the Assigned
Leases, or otherwise due or payable and to become due or payable to Assignor as
the result of any issue, possession or occupancy of any portion or portions of
the Property, (3) all right, title and interest of Assignor in and to all
guarantees of the Assigned Leases and (4) any award made in any court proceeding
involving any of the lessees in any bankruptcy, insolvency, or reorganization
proceedings in any state or federal court.
TO HAVE AND TO HOLD the same unto Assignee, its successors and assigns,
until such time as the indebtedness secured by the Contingent Mortgage shall
have been paid in full, for the purpose of further and collaterally securing
payment of the Contingent Returns pursuant to the terms of the Loan Agreement
(herein referred to as the "OBLIGATIONS").
This instrument of Assignment is delivered and accepted upon the
following terms and conditions:
1. ASSIGNOR'S LICENSE TO OPERATE IF NO DEFAULT.
So long as no Event of Default shall occur, Assignor shall have a
license to manage and operate the Property and to collect, receive and apply for
its own account all rents, issues and profits accruing by virtue of the Assigned
Leases, and to execute and deliver proper receipts and acquittances therefor,
PROVIDED, HOWEVER, that without the written consent of Assignee, Assignor shall
not collect any installment of rent in advance of the respective dates
prescribed in the Assigned Leases for the payment thereof other than a two (2)
months advance rental in the form of a security deposit for the first and last
month of any lease term (the "PERMITTED ADVANCE RENTAL PAYMENTS").
2. ASSIGNEE'S RIGHTS IN EVENT OF DEFAULT.
2.1 Immediately upon the occurrence of any Event of Default and,
at the option of Lender, which option may be exercised by giving written notice
thereof to Assignee, the license mentioned in the foregoing Paragraph 1 hereof
shall cease and terminate, and in such event Assignee is hereby expressly and
irrevocably authorized to enter and take possession of the Property by actual
physical possession, or by written notice to Assignor served in accordance with
Paragraph 10 hereof, without further authorization, notice or demand (except as
otherwise specifically provided in the Loan Agreement or any other Loan
Documents) and without the commencement of any action to foreclose the
Contingent Mortgage or to exercise its power of sale thereunder.
2.2 Assignor does hereby constitute and appoint Assignee,
following such entry and taking of possession, irrevocably, with full power of
substitution and revocation, its true and lawful attorney, for it and in its
name, place and stead, to do and perform any or all of the
- 2 -
following actions, as fully, to all intents and purposes, as it could do if
personally present, hereby ratifying and confirming all that its said attorney
or its substitute shall lawfully do or cause to be done by virtue hereof:
(a) manage and operate the Property or any part thereof;
(b) lease any part or parts thereof for such periods of
time, and upon such terms and conditions as Assignee may, in its sole
discretion, deem proper;
(c) enforce, cancel or modify any of the Assigned Leases;
(d) demand, collect, xxx for, attach, levy, recover,
receive, compromise and adjust, and make, execute and deliver receipts and
releases for all rents, issues, profits and other amounts that may then be or
may thereafter become due, owing or payable with respect to the Property or any
part thereof from any present or future lessees, guests, tenants, subtenants or
occupants thereof;
(e) institute, prosecute to completion or compromise and
settle, all summary proceedings, actions for rent or for removing any and all
lessees, guests, tenants, subtenants or occupants of the Property or any part or
parts thereof;
(f) enforce or enjoin or restrain the violation of any of
the terms, provisions and conditions of any lease or leases, now or hereafter
affecting the Property or any part thereof;
(g) make such repairs and alterations to the Property as
Assignee may, in its reasonable discretion, deem proper;
(h) pay, from and out of rents, issues and profits
collected in respecnt charges levied, assessed or imposed against the Property,
or any portion thereof, and also any and all other charges, costs and expenses
which it may be necessary or advisable for Assignee to pay in the management or
operation of the Property, including (without limiting the generality of any
rights, powers, privileges and authority hereinbefore or hereinafter conferred)
the costs of such repairs and alterations, commissions for renting the Property
or any portions thereof, any legal expenses in enforcing claims, preparing
papers or for any other services that may be required; and
(i) generally, do, execute and perform any other act,
deed, matter or thing whatsoever that ought to be done, executed and performed
in and about or with respect to the Property, as fully as Assignor might do,
provided, however, that any action, or failure or
- 3 -
refusal to act, by Assignee under this subparagraph 2.2 shall be at its election
and without any liability on Assignee's part.
2.3 Assignee shall apply the net amount of rents, issues and
profits received by it from the Property, after payment of all proper costs and
charges (including any liability, loss, expense or damage hereinafter referred
to in paragraph 5 hereof) in accordance with the terms of the Loan Documents.
Any of such funds remaining after such application shall be paid as soon as
reasonably practicable by Assignee to Assignor or paid over to such persons as
Assignor may designate to Assignee in writing.
2.4 Assignee shall be accountable to Assignor only for monies
actually received by Assignee pursuant to this Assignment and the acceptance of
this Assignment shall not constitute a satisfaction of any indebtedness,
liability or obligations, or any part thereof, now or hereafter owed by Assignor
to Assignee, except to the extent of amounts actually received and applied by
Assignee on account of the same.
2.5 The rights and powers of Assignee hereunder shall continue
and remain in full force and effect until all amounts secured hereby, including
any deficiency resulting from foreclosure sale, are paid in full, and shall
continue after commencement of foreclosure and after foreclosure sale and until
expiration of the equity of redemption, notwithstanding the sale of the Property
to a purchaser other than Assignee. Assignee shall not be liable to Assignor or
any one claiming under or through Assignor by reason of anything done or left
undone by Assignee hereunder.
2.6 For the purposes of this paragraph 2, a default shall be
deemed to be cured only when Assignor shall have paid in full all sums owing and
past due, and/or shall have performed all other terms, covenants and conditions,
the failure in the performance of which shall terminate the license contained in
paragraph 1 hereof, such default shall have been waived by Assignee, in writing.
3. ATTORNMENT OF LESSEES IN EVENT OF DEFAULT.
Assignor hereby irrevocably directs each Lessee under each Assigned
Lease, upon demand and notice from Assignee of an Event of Default, to pay
Assignee all rents, issues and profits accruing or due under its Assigned Lease
from and after the receipt of such demand and notice. Any Lessee making such
payment to Assignee shall be under no obligation to inquire into or determine
the actual existence of any such default claimed by Assignee.
- 4 -
4. COVENANTS OF ASSIGNOR.
Assignor, for itself and for its successors and assigns, covenants and
warrants as follows:
(a) that each of the Assigned Leases now or hereafter in effect
is and shall be a valid and subsisting lease and that there are, to the extent
ascertainable by Assignor, no defaults on the part of any of the parties
thereto;
(b) that Assignor has not sold, assigned, transferred, mortgaged
or pledged any of the rents, issues or profits from the Property or any part
thereof, except as permitted by the Loan Agreement, whether now or hereafter to
become due, to any person, firm or corporation other than Assignee;
(c) that no rents issues or profits of the Property, or any part
thereof, becoming due subsequent to the date hereof have been collected (other
than Permitted Advance Rental Payments) nor has payment of any of the sums been
anticipated, waived, released, discounted or otherwise discharged or
compromised;
(d) that it will not assign, pledge or otherwise encumber any of
the Assigned Leases or any of the rents thereunder unless the prior written
consent of Assignee shall have been obtained thereto or the Loan Agreement
specifically allows for the same and unless the instrument creating such
assignment, pledge or encumbrance shall expressly state that the same is subject
to this assignment;
(e) that it will not, without in each case having obtained the
prior written consent of Assignee thereto, amend or modify, directly or
indirectly in any respect whatsoever cancel, terminate, or accept any surrender
of any Assigned Lease, without Lender's prior written consent which may be
withheld in Lender's sole discretion.
(f) that it will not waive or give any consent with respect to
any default or variation in the performance of any of the terms, covenants, and
conditions on the part of any lessee, sublessee, tenant or other occupant to be
performed under any of the Assigned Leases, but will at all time take proper
steps to enforce all of the provisions and conditions thereof;
(g) that it will not collect or receive, without in each case
having obtained the prior written consent of Assignee thereto from any such
lessee, sublessee, tenant or other occupant, any installment of rent in advance
of the respective dates prescribed in the Assigned Leases, except for Permitted
Advance Rental Payments;
(h) that it will perform and observe, or cause to be performed
and observed, all of the terms, covenants and conditions on its part to be
performed and observed with respect to each of the Assigned Leases;
- 5 -
(i) that it will, upon written request by Assignee, while this
agreement remains in force and effect, serve such written notices upon any
lessee, sublessee, tenant, guest or other occupant of any portion of the
Property concerning this Assignment, or include among the written provisions of
any instrument hereafter creating any such lease, sublease, tenancy or right of
occupancy specific reference to this Assignment, and make, execute and deliver
all such powers of attorney, instruments of pledge or assignment, and such other
instruments or documents as Assignee may reasonably request at any time for the
purpose of securing its rights hereunder;
(j) that at all times during which this Assignment shall be in
effect, Assignor will use its best efforts to keep the Property fully rented at
the highest possible rentals obtainable; and
(k) that Assignor shall (a) notify Assignee promptly when any
Assigned Lease, is hereafter extended, renewed, amended or modified, and (b)
furnish to Assignee, on demand, true copies of all Assigned Leases hereafter
executed and true copies of each agreement or letter effecting the renewal,
amendment or modification of any Assigned Lease.
5. INDEMNIFICATION.
5.1 Assignor hereby agrees to indemnify and hold Assignee
harmless (a) against and from any and all liability, loss, damage and expense,
including but not limited to reasonable attorneys' fees, paralegals' fees and
expenses on both the trial and appellate level which it may or shall incur under
or in connection with any of the Assigned Leases, or by reason of any of the
Obligations, or by reason of any action taken by Assignee under any of the
Obligations (including without limitation any action which Assignee in its
discretion may make to protect its interest in the Property, including without
limitation the making of advances and the entering into of any action or
proceeding arising out of or connected with the Assigned Leases or the
Obligations), and (b) against and from any and all claims and demand whatsoever
which may be asserted against Assignor by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants and
conditions contained in any of the Assigned Leases.
5.2 Should Assignee incur any such liability, loss, damage or
expense, the amount thereof, together with interest thereon at the default rate
as provided in the Loan Documents, shall be payable by Assignor to Assignee
immediately upon demand, or at the option of Assignee, Assignee may reimburse
itself therefor out of any rents, issues or profits of the Property collected by
Assignee.
5.3 Nothing contained herein shall operate or be construed to
obligate Assignee to perform any of the terms, covenants or conditions contained
in any Assigned Lease, or to take any measures, legal or otherwise, to enforce
collection of any of said rents or other payments, or otherwise to impose any
obligation upon Assignee with respect to any of said leases, including but not
limited to, any obligation arising out of any covenant of quiet enjoyment
therein contained, in the event that any lessee shall have been joined as a
party defendant in any action to foreclose the Contingent Mortgage and the
estate of such lessee shall have been thereby terminated.
- 6 -
5.4 Prior to actual entry into any taking possession of the
Property by Assignee, this Assignment shall not operate to place upon Assignee
any responsibility for the operation, control, care, management or repair of the
Property, and the execution of this assignment by Assignor shall constitute
conclusive evidence that all responsibility for the operation, control, care,
management and repair of the Property is and shall be that of Assignor prior to
such actual entry and taking of possession.
6. EXERCISE OF REMEDIES.
Failure of Assignee to avail itself of any of the terms, covenants and
conditions of this Assignment for any period of time, or at any time or times,
shall not be construed or deemed to be a waiver of any of its rights hereunder.
The rights and remedies of Assignee under this Assignment are cumulative and are
not in lieu of but are in addition to any other rights and remedies which
Assignee shall have under or by virtue of any other of the Obligations. The
rights and remedies of Assignee hereunder may be exercised from time to time and
as often as such exercise is deemed expedient.
7. ASSIGNMENT BY ASSIGNEE.
Assignee shall have the right to assign to any subsequent holder of the
Contingent Mortgage, or to any person acquiring title to the Property,
Assignor's rights, title and interest in any lease hereby or hereafter assigned,
subject, however, to the provisions of this Assignment. After Assignor shall
have been barred and foreclosed of all right, title and interest and equity of
redemption in said Property, no assignee of Assignor's interest in said leases
shall be liable to account to Assignor for any rents, income, revenue, issues or
profits thereafter accruing.
8. TERMINATION OF THIS AGREEMENT.
Upon payment in full of all the indebtedness secured by the Contingent
Mortgage, as evidenced by a recorded satisfaction or release of Contingent
Mortgage, as well as any sums which may be payable hereunder, this Assignment
shall become and be void and of no effect and, in that event, upon the request
of Assignor, Assignee covenants to execute and deliver to Assignor instruments
effective to evidence the termination of this Assignment and/or the reassignment
to Assignor of the rights, power and authority granted herein.
9. NO MERGER OF ASSIGNED LEASES.
As against Assignee, at all times during which this Assignment shall be
in effect, there shall be no merger of the Assigned Leases or the leasehold
estate created thereby with the fee estate in the Property by reason of the fact
that the Assigned Leases or any interest therein may be held by or for the
account of any person, firm or corporation which may be or become the owner of
said fee estate, unless Assignee shall consent in writing to said merger.
- 7 -
10. NOTICE.
Any notice, demand, request or other communication given hereunder or in
connection herewith shall be given in accordance with the Loan Agreement.
11. MISCELLANEOUS PROVISIONS.
11.1 Whenever the context so requires, reference herein to the
neuter gender shall include the masculine and/or feminine gender, and the
singular number shall include the plural.
11.2 All of the provisions of this Assignment shall be deemed and
construed to be "conditions" and "covenants" as though the words specifically
expressing or importing covenants and conditions were used in each separate
provision hereof.
11.3 This Assignment is being delivered and is intended to be
performed in the STATE OF FLORIDA and shall be construed and enforced in
accordance with and governed by the laws of such state.
11.4 No change, amendment, modification, cancellation or
discharge hereof, or of any part hereof, shall be valid unless Assignee shall
have consented thereto in writing.
11.5 In the event there is any conflict between the terms and
provisions of the Contingent Mortgage or the Loan Agreement and the terms and
provisions of this Assignment, the terms and provisions of the Contingent
Mortgage or Loan Agreement shall prevail.
11.6 The provisions of this instrument shall be binding upon
Assignor and its heirs, personal representatives, successors or permitted
assigns and upon Assignee and its participants, successors or assigns. The word
"Assignor" shall be construed to mean any one or more persons or person or
parties who are holders of the legal title or equity of redemption to or in the
Property.
11.7 The captions of this Assignment are for convenience and
reference only and neither in any way define, limit, or describe the scope or
interest of this Assignment nor in any way affect this Assignment.
11.8 In case any one or more of the provisions contained in this
Assignment are, or shall for any reason be held to be, invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision hereof or thereof, but each shall be
construed as if such invalid, illegal or unenforceable provision had never been
included.
12. WAIVER OF JURY TRIAL. ASSIGNEE AND ASSIGNOR HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED
- 8 -
HEREON OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT FOR ASSIGNEE ENTERING INTO
THIS AGREEMENT.
IN WITNESS WHEREOF, Assignor and Assignee have caused these presents to
be executed by their duly authorized officer, on the day and year first above
written.
Signed, sealed and delivered
in the presence of: ASSIGNOR:
TRANSEASTERN PEMBROKE
VILLAGES, INC., a Florida corporation
By:
Name:
Title:
(CORPORATE SEAL)
- 9 -
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this _____ day of
March, 1996, by , as of TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida
corporation, on behalf of the corporation. He/she is personally known to me or
has produced a driver's license as identification.
Print or Stamp Name: ________________________
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
[EXHIBITS FOLLOW]
- 10 -
This Instrument Was Prepared By:
Xxxxxx X. Xxxxxx, Esq.
Gunster, Yoakley, Xxxxxx-Xxxxx & Xxxxxxx, P.A.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000
- 11 -
EXHIBIT "A"
LEGAL DESCRIPTION
This instrument was prepared by:
Xxxxxx X. Xxxxxx, Esq.
Gunster, Yoakley, Xxxxxx-Xxxxx & Xxxxxxx, P.A.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000
Record and Return To:
Xxxx X. Xxxxxx, Esq.
Two Executive Court
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxx Xxxxx, XX 00000
COLLATERAL ASSIGNMENT OF
RIGHTS AND AGREEMENTS AFFECTING REAL ESTATE
THIS COLLATERAL ASSIGNMENT OF RIGHTS AND AGREEMENTS
AFFECTING REAL ESTATE (this "ASSIGNMENT"), made this 29th day of March, 1996, by
TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida corporation ("BORROWER"), to
AMRESCO FUNDING CORPORATION, a Delaware corporation ("LENDER").
BACKGROUND OF ASSIGNMENT
1. Lender has agreed to advance up to THREE MILLION AND NO/100 DOLLARS
($3,000,000.00) to Borrower (the "LOAN") pursuant to that certain Loan Agreement
of even date herewith between Borrower and Lender ("LOAN AGREEMENT"). Unless
otherwise specified herein, terms are used herein with the same meanings as
defined in the Loan Agreement.
2. The Loan is evidenced by a promissory note ("NOTE") of Borrower to
Lender in the principal amount of $3,000,000.00 and other collateral documents
described in the Loan Agreement, including the Mortgage encumbering certain real
property (the "PROPERTY") situate and being in Broward County, Florida, and more
fully described on EXHIBIT "A" attached hereto and made part hereof.
3. As an additional condition to granting the Loan and any future
advances thereunder, the Lender has required Borrower to execute and deliver
this Assignment.
NOW, THEREFORE, in consideration of the Loan, and intending to be
legally bound, Borrower does hereby covenant, agree, warrant, represent, assign,
set over and transfer as set forth herein.
SECTION L. ITEMS OF COLLATERAL.
As security for the full, timely and faithful repayment by the Borrower
of the Loan and the performance by the Borrower of all of its obligations under
the Loan Documents, excluding, however, Borrower's obligations to pay the
Contingent Returns, the Borrower hereby assigns, sets over and transfers to the
Lender all of its right, title and interest in and to the following:
(a) All licenses, permits, approvals, development orders,
certificates and agreements with or from all boards, agencies, departments,
governmental or otherwise, relating directly or indirectly to the ownership,
use, operation and maintenance of the Property, or the construction or
development of improvements on the Property, whether heretofore or hereafter
issued or executed (collectively, the "LICENSES"), said boards, agencies,
departments, governmental or otherwise being hereinafter collectively referred
to as the "GOVERNMENTAL AUTHORITIES."
(b) All contracts (including construction contracts),
subcontracts, agreements, service agreements, warranties, purchase orders,
sanitary and storm sewer service agreements, water and utility service
agreements, engineering and architects agreements, insurance policies (and the
proceeds thereof), agreements with any utility companies or governmental
authorities, all as to which Borrower is a party or beneficiary that have
heretofore been or will hereafter be executed by or on behalf of the Borrower,
or that have been assigned to the Borrower (together with all deposits
associated with the foregoing), in connection with the use, operation and
maintenance of the Property, or the construction or development of improvements
on the Property, including, without limitation (i) any contracts, easements or
rights-of-way permitting the Borrower to cross the property of others in order
to gain access to the Property, and (ii) that certain Contract dated June 24,
1995 between Sarahpark Development Corporation ("SARAHPARK"), as owner, and Xxxx
Incorporated Eastern, a Florida corporation, as contractor, for construction of
certain improvements on the Property, which was assigned by Sarahpark to
Borrower by that certain assignment dated March 29, 1996. All of the foregoing
contracts, agreements and other items referred to in this subparagraph (b) are
herein collectively referred to as the "CONTRACTS", and the parties with whom or
to whom such Contracts have been or are given are hereinafter collectively
referred to as the "CONTRACTORS."
(c) All contracts, options and agreements that have heretofore
been or will hereafter be executed by or on behalf of the Borrower in connection
with Borrower's purchase of any unit, lot or portion of the Property
(collectively, the "ACQUISITION AGREEMENTS"), including, without limitation,
those certain contracts and letters of intent described on EXHIBIT "B" attached
hereto, together with any and all xxxxxxx money deposits given by Assignor in
connection therewith and all post-closing rights of the Borrower, if any, in and
to such Acquisition Agreements. The parties with whom or to whom the Agreements
have been or are given are hereinafter collectively referred to as the
"SELLERS."
(d) All contracts and agreements that have heretofore been or
will hereafter be executed by or on behalf of the Borrower in connection with
Borrower's sale or lease of any unit, lot or portion of the Property
(collectively, the "CONVEYANCE AGREEMENTS"), including, without limitation,
those certain contracts and letters of intent described on EXHIBIT "C" attached
hereto, together with all xxxxxxx money deposits paid to the Borrower
thereunder, together with all proceeds of such Conveyance Agreements and post
closing rights, including, without limitation, the right to payments,
adjustments, refunds or similar amounts paid to or for the benefit of the
Borrower or its affiliates in connection with the sale of portions of the
Property. The parties with whom or to whom the Agreements have been or are given
are hereinafter collectively referred to as the "PURCHASERS AND LESSEES."
2
(e) All plans, specifications, certifications, studies, surveys,
architectural and engineering drawings or sketches, soil boring tests,
environmental audits, site development criteria, consultant's reports and any
other information for or otherwise related to the construction of the
Improvements, whether now or hereafter prepared (collectively referred to as the
"DEVELOPMENT INFORMATION").
The items described in subsections (a), (b), (c), (d) and (e) above
shall hereinafter be collectively referred to as the "ADDITIONAL COLLATERAL."
SECTION 2. BORROWER'S AFFIRMATIVE COVENANTS.
(a) The Borrower covenants and agrees that it shall faithfully
observe and perform all of the obligations and agreements imposed upon the
Borrower under the Additional Collateral.
(b) The Borrower shall, upon request of the Lender, from time to
time, furnish the Lender a complete list of all Additional Collateral. Further,
if requested, the Borrower shall deliver to the Lender executed or certified
copies of all Additional Collateral and other written agreements, correspondence
and memoranda between the Borrower (and its predecessors in title) and the
Contractors, the Governmental Authorities, the Sellers and the Purchasers and
Lessees, setting forth the contractual and other arrangements between them. To
the extent that the Borrower does not have executed or certified copies of the
foregoing in its possession, the Borrower shall deliver copies of those of the
foregoing which are in its possession, with a certification that, to the best of
its knowledge and belief, they are true and correct copies.
(c) The Borrower shall give prompt notice to Lender of any claim
of default under any of the Additional Collateral given to or by Borrower,
together with a complete copy or statement of any information submitted or
referenced in support of such claim.
(d) The Borrower, at its sole cost and expense, shall enforce the
performance and observance of each and every material covenant and condition of
the Additional Collateral to be performed or observed by any other party to any
of the Additional Collateral, which shall include, without limitation, the
obligation to appear in and defend any action related to or in any manner
connected with the Additional Collateral.
(e) The Borrower shall not, without the prior written consent of
Lender, which may be given in Lender's sole and absolute discretion:
(i) modify any of the material terms of the Additional
Collateral; or
(ii) waive or release any person from the observance or
performance of any material obligation to be
performed under the terms of the Additional
Collateral or from liability on account of any
warranty given by them.
3
Record and Return To:
Xxxx X. Xxxxxx, Esq.
Two Executive Court
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxx Xxxxx, XX 00000
COLLATERAL ASSIGNMENT OF
RIGHTS AND AGREEMENTS AFFECTING REAL ESTATE
(CONTINGENT RETURNS)
THIS COLLATERAL ASSIGNMENT OF RIGHTS AND AGREEMENTS
AFFECTING REAL ESTATE (this "ASSIGNMENT"), made this 29th day of March, 1996, by
TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida corporation ("BORROWER"), to
AMRESCO FUNDING CORPORATION, a Delaware corporation ("LENDER").
BACKGROUND OF ASSIGNMENT
1. Lender has agreed to advance up to THREE MILLION AND NO/100 DOLLARS
($3,000,000.00) to Borrower (the "LOAN") pursuant to that certain Loan Agreement
of even date herewith between Borrower and Lender ("LOAN AGREEMENT"). Unless
otherwise specified herein, terms are used herein with the same meanings as
defined in the Loan Agreement.
2. Under the Loan Agreement, the Borrower is obligated to pay Contingent
Returns pursuant to the terms thereof. Borrower's obligation to the the
Contingent Returns is secured by, among other things, the Contingent Mortgage
encumbering certain real property (the "PROPERTY") situate and being in Broward
County, Florida, and more fully described on EXHIBIT "A" attached hereto and
made part hereof.
3. As an additional condition to granting the Loan and any future
advances thereunder, the Lender has required Borrower to execute and deliver
this Assignment.
NOW, THEREFORE, in consideration of the Loan, and intending to be
legally bound, Borrower does hereby covenant, agree, warrant, represent, assign,
set over and transfer as set forth herein.
SECTION L. ITEMS OF COLLATERAL.
As security for the full, timely and faithful repayment by the Borrower
of its oblligation to pay the Contingent Returns under the terms of the Loan
Agreement, the Borrower hereby assigns, sets over and transfers to the Lender
all of its right, title and interest in and to the following:
(a) All licenses, permits, approvals, development orders,
certificates and agreements with or from all boards, agencies, departments,
governmental or otherwise, relating directly or indirectly to the ownership,
use, operation and maintenance of the Property, or the construction or
development of improvements on the Property, whether heretofore or hereafter
issued or executed (collectively, the "LICENSES"), said boards, agencies,
departments, governmental or otherwise being hereinafter collectively referred
to as the "GOVERNMENTAL AUTHORITIES."
(b) All contracts (including construction contracts),
subcontracts, agreements, service agreements, warranties, purchase orders,
sanitary and storm sewer service agreements, water and utility service
agreements, engineering and architects agreements, insurance policies (and the
proceeds thereof), agreements with any utility companies or governmental
authorities, all as to which Borrower is a party or beneficiary that have
heretofore been or will hereafter be executed by or on behalf of the Borrower,
or that have been assigned to the Borrower (together with all deposits
associated with the foregoing), in connection with the use, operation and
maintenance of the Property, or the construction or development of improvements
on the Property, including, without limitation (i) any contracts, easements or
rights-of-way permitting the Borrower to cross the property of others in order
to gain access to the Property, and (ii) that certain Contract dated June 24,
1995 between Sarahpark Development Corporation ("SARAHPARK"), as owner, and Xxxx
Incorporated Eastern, a Florida corporation, as contractor, for construction of
certain improvements on the Property, which was assigned by Sarahpark to
Borrower by that certain assignment dated March 29, 1996. All of the foregoing
contracts, agreements and other items referred to in this subparagraph (b) are
herein collectively referred to as the "CONTRACTS", and the parties with whom or
to whom such Contracts have been or are given are hereinafter collectively
referred to as the "CONTRACTORS."
(c) All contracts, options and agreements that have heretofore
been or will hereafter be executed by or on behalf of the Borrower in connection
with Borrower's purchase of any unit, lot or portion of the Property
(collectively, the "ACQUISITION AGREEMENTS"), including, without limitation,
those certain contracts and letters of intent described on EXHIBIT "B" attached
hereto, together with any and all xxxxxxx money deposits given by Assignor in
connection therewith and all post-closing rights of the Borrower, if any, in and
to such Acquisition Agreements. The parties with whom or to whom the Agreements
have been or are given are hereinafter collectively referred to as the
"SELLERS."
(d) All contracts and agreements that have heretofore been or
will hereafter be executed by or on behalf of the Borrower in connection with
Borrower's sale or lease of any unit, lot or portion of the Property
(collectively, the "CONVEYANCE AGREEMENTS"), including, without limitation,
those certain contracts and letters of intent described on EXHIBIT "C" attached
hereto, together with all xxxxxxx money deposits paid to the Borrower
thereunder, together with all proceeds of such Conveyance Agreements and post
closing rights, including, without limitation, the right to
2
payments, adjustments, refunds or similar amounts paid to or for the benefit of
the Borrower or its affiliates in connection with the sale of portions of the
Property. The parties with whom or to whom the Agreements have been or are given
are hereinafter collectively referred to as the "PURCHASERS AND LESSEES."
(e) All plans, specifications, certifications, studies, surveys,
architectural and engineering drawings or sketches, soil boring tests,
environmental audits, site development criteria, consultant's reports and any
other information for or otherwise related to the construction of the
Improvements, whether now or hereafter prepared (collectively referred to as the
"DEVELOPMENT INFORMATION").
The items described in subsections (a), (b), (c), (d) and (e) above
shall hereinafter be collectively referred to as the "ADDITIONAL COLLATERAL."
SECTION 2. BORROWER'S AFFIRMATIVE COVENANTS.
(a) The Borrower covenants and agrees that it shall faithfully
observe and perform all of the obligations and agreements imposed upon the
Borrower under the Additional Collateral.
(b) The Borrower shall, upon request of the Lender, from time to
time, furnish the Lender a complete list of all Additional Collateral. Further,
if requested, the Borrower shall deliver to the Lender executed or certified
copies of all Additional Collateral and other written agreements, correspondence
and memoranda between the Borrower (and its predecessors in title) and the
Contractors, the Governmental Authorities, the Sellers and the Purchasers and
Lessees, setting forth the contractual and other arrangements between them. To
the extent that the Borrower does not have executed or certified copies of the
foregoing in its possession, the Borrower shall deliver copies of those of the
foregoing which are in its possession, with a certification that, to the best of
its knowledge and belief, they are true and correct copies.
(c) The Borrower shall give prompt notice to Lender of any claim
of default under any of the Additional Collateral given to or by Borrower,
together with a complete copy or statement of any information submitted or
referenced in support of such claim.
(d) The Borrower, at its sole cost and expense, shall enforce the
performance and observance of each and every material covenant and condition of
the Additional Collateral to be performed or observed by any other party to any
of the Additional Collateral, which shall include, without limitation, the
obligation to appear in and defend any action related to or in any manner
connected with the Additional Collateral.
(e) The Borrower shall not, without the prior written consent of
Lender, which may be given in Lender's sole and absolute discretion:
(i) modify any of the material terms of the
Additional Collateral; or
3
(ii) waive or release any person from the observance
or performance of any material obligation to be
performed under the terms of the Additional
Collateral or from liability on account of any
warranty given by them.
SECTION 3. BORROWER'S REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants:
(a) That it has the right to execute and deliver this Assignment;
(b) That all Additional Collateral is in full force and effect on
the date hereof, subject to no defenses, set-offs or counterclaims whatsoever;
(c) That there exists no event, condition or occurrence that
constitutes, or which with notice and/or the passage of time would constitute, a
breach of or default under any term or condition of any of the Additional
Collateral;
(d) That it shall not do any act which would destroy or impair
the security of the Lender under this Assignment;
(e) That it has not otherwise pledged or assigned any of its
rights under the Additional Collateral to any other person or entity, except
Chase Federal as permitted under the Loan Agreement;
(f) That it has not done or omitted to do any acts so as to be
estopped from exercising any of its rights under any of the Additional
Collateral;
(g) Borrower is not prohibited under any agreement with any other
person or under any judgment or decree from the execution and delivery of this
Assignment or the performance of each and every covenant of Borrower hereunder
or in the Additional Collateral; and
(h) No action has been brought or threatened that would in any
way prohibit or impair the execution and delivery of this Assignment or the
performance of each and every covenant of Borrower hereunder or under the
Additional Collateral.
SECTION 4. RIGHTS PRIOR TO AN EVENT OF DEFAULT.
Until the occurrence of an Event of Default under the Loan Documents,
the Borrower may retain, use and enjoy the benefits of the Additional
Collateral.
SECTION 5. REMEDIES FOR DEFAULT.
4
Upon the occurrence of an Event of Default, the Lender shall have the
following remedies:
(a) The Lender may elect to exercise any and all of the
Borrower's rights and remedies under the Additional Collateral, without any
interference or objection from the Borrower, and the Borrower shall cooperate in
causing the Contractors to comply with all the terms and conditions of the
Contracts.
(b) The Lender may enforce this Assignment by notifying the
Borrower by registered or certified mail sent in accordance with the notice
provision of the Loan Agreement. The affidavit or written statement of an
officer, agent or attorney of the Lender stating that there has been an Event of
Default shall constitute conclusive evidence thereof, and any of the
Governmental Authorities, the Contractors, the Sellers or the Purchasers and
Lessees or any other person is authorized and directed to rely thereon.
(c) If and to the extent permitted by law and the terms of the
Additional Collateral, the Lender may, with or without entry upon the Property,
at its option, take over and enjoy the benefits of all or part of the Additional
Collateral (including, without limitation, taking possession of the Development
Information), exercise the Borrower's rights under the Additional Collateral
(including, without limitation, taking possession of the Development
Information), and perform all acts in the same manner and to the same extent as
the Borrower might do. In connection with any and all of the foregoing powers,
and without limiting the same, the Lender may effect new Contracts, Licenses,
Acquisition Agreements and Conveyance Agreements, cancel or surrender existing
Contracts, Licenses, Acquisition Agreements or Conveyance Agreements, alter and
amend the terms of and renew existing Contracts, Licenses, Acquisition
Agreements and Conveyance Agreements, and make concessions to the Governmental
Authorities, the Contractors, the Sellers and the Purchasers and Lessees. The
Borrower hereby releases any and all claims that it has or might have against
the Lender arising out of such performance by the Lender.
(d) The Lender may do and perform all other acts that Lender may
deem necessary or proper, in its sole and absolute discretion, to protect its
security, including, without limitation, the Additional Collateral.
SECTION 6. MISCELLANEOUS.
(a) Borrower hereby constitutes the Lender as its
attorney-in-fact to take such actions and execute such documents as Lender may
deem appropriate in the exercise of the rights and remedies of Lender granted
herein. The powers herein granted shall include, but shall not be limited to,
the power to xxx on or under the Additional Collateral, in the name of Borrower
or Lender or both. The power of attorney granted hereby shall be and is
irrevocable and coupled with an interest and shall terminate only upon the
payment of all sums due Lender by Borrower. Borrower shall indemnity and hold
harmless Lender from and against all losses, costs, damages, fees and expenses
whatsoever associated with the exercise of this power of attorney (including all
attorneys' fees, paraprofessional fees and disbursements through all appellate
levels) and shall release Lender
5
from all liability whatsoever for the exercise of the foregoing power of
attorney and all actions taken pursuant thereto.
(b) The Lender will not be deemed in any manner to have assumed
any of the obligations under the Additional Collateral, nor shall the Lender be
liable to the Governmental Authorities, the Contractors, the Sellers or the
Purchasers and Lessees by reason of any default by any party under the Licenses,
Contracts, Acquisition Agreements or Conveyance Agreements. The Borrower agrees
to indemnify and to hold the Lender harmless of and from any and all liability,
loss or damage that it may or might incur by reason of any claims or demands
against it based on its alleged assumption of the Borrower's duty and obligation
to perform and discharge the terms, covenants and agreements of the Additional
Collateral.
(c) All of the foregoing powers herein granted to the Lender
shall be liberally construed. The Lender need not expend its own funds in the
exercise of such powers, but if it does, such amounts shall be considered as
advances for and on behalf of the Borrower secured by this Assignment and also
evidenced and secured by the Loan Agreement, Contingent Mortgage and certain
other Loan Documents. Any amounts so advanced shall bear interest at the then
current rate prescribed in the Loan Agreement.
(d) Nothing herein contained shall be construed as making the
Lender a mortgagee in possession, or as constituting a waiver or suspension by
the Lender of its right to enforce payment of Borrower's obligation to pay the
Contingent Returns under the terms of the Loan Agreement. The Lender is not the
agent, partner, or joint venturer of the Borrower or of any of the Contractors,
the Governmental Authorities, the Sellers or the Purchasers and Lessees.
(e) This Assignment may be enforced from time to time by the
Lender at its discretion, with or without order of any court and with or without
appointment of a receiver, as the Lender shall determine. The Lender may also at
any time cease to enforce this Assignment. Any failure on the part of the Lender
promptly to exercise any option hereby given or reserved shall not prevent the
exercise of any such option at any time thereafter. The Lender may pursue and
enforce any remedy or remedies accorded it herein independently of, in
conjunction or concurrently with, or subsequent to its pursuit of enforcement of
any remedy or remedies that it may have under the applicable Loan Documents.
(f) When the context so requires, the singular shall include the
plural and conversely, and use of any gender shall include all genders.
SECTION 7. WAIVER OF JURY TRIAL.
THE PARTIES HERETO DO HEREBY MUTUALLY AND WILLINGLY WAIVE THE RIGHT TO A
TRIAL BY JURY OF ANY AND ALL CLAIMS MADE BETWEEN THEM WHETHER NOW EXISTING OR
ARISING IN THE FUTURE, INCLUDING WITHOUT LIMITATION, ANY AND ALL CLAIMS,
DEFENSES, COUNTERCLAIMS,
6
CROSSCLAIMS, THIRD PARTY CLAIMS AND INTERVENOR'S CLAIMS WHETHER ARISING FROM OR
RELATED TO THE NEGOTIATION, EXECUTION AND PERFORMANCE OF THE TRANSACTIONS TO
WHICH THIS DOCUMENT RELATES.
IN WITNESS WHEREOF, the Borrower has caused this Assignment to be duly
executed on the date first above written.
Signed, sealed and delivered
in the presence of: ASSIGNOR:
TRANSEASTERN PEMBROKE
VILLAGES, INC., a Florida corporation
By:
Name:
Title:
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this _____
day of March, 1996, by________________ , as___________________________ of
TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida corporation, on behalf of the
corporation. He/she is personally known to me or has produced a driver's license
as identification.
Print or Stamp Name: ________________________
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
7
EXHIBIT "A"
[LEGAL DESCRIPTION OF THE PROPERTY]
8
EXHIBIT "B"
1. Agreement of Purchase and Sale dated August 14, 1995, as
amended by that certain Amendment to Agreement of Purchase and Sale dated
December 13, 1995, by and between SARAHPARK DEVELOPMENT CORPORATION, a Texas
corporation, as Seller, and TRANSEASTERN PROPERTIES OF SOUTH FLORIDA, INC., a
Florida corporation, as Buyer, as assigned by Buyer to Borrower by virtue of
that Assignment dated as of March 29, 1996.
2. Option Agreement dated August 14, 1995, as amended by that
certain Amendment to Option Agreement dated December 13, 1995, by and between
SARAHPARK DEVELOPMENT CORPORATION, a Texas corporation, as Seller, and
TRANSEASTERN PROPERTIES OF SOUTH FLORIDA, INC., a Florida corporation, as Buyer,
as assigned by Buyer to Borrower by virtue of that Assignment dated as of March
29, 1996.
9
EXHIBIT "C"
3. Agreement of Purchase and Sale, as amended by that certain
First Amendment to Agreement of Purchase and Sale, by and between TRANSEASTERN
PROPERTIES OF SOUTH FLORIDA, INC., a Florida corporation, as Seller, and HANOVER
P.H. LIMITED PARTNERSHIP, a Texas limited partnership, as Buyer, as assigned by
Seller to Borrower by virtue of that Assignment dated as of March 29, 1996.
4. Letter of Intent dated September 14, 1995 by and between
TRANSEASTERN PROPERTIES OF SOUTH FLORIDA, INC., a Florida corporation, as
Seller, and XXXXXXX XXXX COMPANY, as Buyer, as assigned by Seller to Borrower by
virtue of that Assignment dated as of March 29, 1996.
5. Agreement of Purchase and Sale, as amended by that certain
First Amendment to Agreement of Purchase and Sale, by and between TRANSEASTERN
PROPERTIES OF SOUTH FLORIDA, INC., a Florida corporation, as Seller, and
SAPPHIRE PROPERTIES, a Texas general partnership, as Buyer, as assigned by
Seller to Borrower by virtue of that Assignment dated as of March 29, 1996.
10
This instrument was prepared by:
Xxxxxx X. Xxxxxx, Esq.
Gunster, Yoakley, Xxxxxx-Xxxxx & Xxxxxxx, P.A.
000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xx. Xxxxxxxxxx, XX 00000
GUARANTY
Dated as of March 29, 1996
DEFINITIONS:
In this Guaranty (this "GUARANTY"), the following terms shall have the
following indicated meanings:
1. BORROWER: TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida corporation
2. LENDER: AMRESCO FUNDING CORPORATION, a Delaware corporation
3. GUARANTORS: collectively, TRANSEASTERN PROPERTIES OF SOUTH FLORIDA,
INC., a Florida corporation ("TRANSEASTERN"), XXXXXX XXXXXXX, XXXXXX XXXXXXX,
and XXXXXX XXXXX, jointly and severally.
4. OBLIGATIONS: All indebtedness, liabilities, covenants, promises,
agreements, terms, conditions and other obligations of every nature whatsoever
of Borrower to Lender and all renewals, modifications and extensions thereof
howsoever, evidenced, whether now existing or hereafter created or arising,
direct or indirect, absolute or contingent, joint or several, liquidated or
unliquidated, matured or unmatured, and howsoever now or hereafter owned, held
or acquired by Lender and arising out of (a) that certain promissory note
executed by Borrower to Lender of even date herewith in the original principal
amount of THREE MILLION AND NO/100 DOLLARS ($3,000,000.00); (b) that certain
loan agreement executed by Borrower and Lender of even date herewith (the "LOAN
AGREEMENT" - unless otherwise defined herein, all capitalized terms used herein
shall have the meanings assigned to the same in the Loan Agreement); and (c) all
other Loan Documents. The foregoing shall be deemed to include, without
limitation: (i) all principal and interest (including, without limitation, all
interest accruing after a petition is filed in bankruptcy or similar
proceedings, notwithstanding that Borrower's obligation to pay such interest may
have ceased to exist by operation of law) and other charges and payments due
under the Loan Documents, including, without limitation the Contingent Returns
if they become payable pursuant to the Loan Documents; (ii) all costs of
collection, including reasonable attorneys' fees, paralegals' fees and legal
assistants' fees (whether incurred with collection, trial, appeal, bankruptcy
proceedings or otherwise notwithstanding that Borrower's obligation to pay such
fees may have ceased to exist by operation of law); (iii) all monies paid by
Lender on account of taxes, assessments, wages, insurance, or to any other
person as a result of this Guaranty or arising out of or connected with the
loans or advances made to Borrower; (iv) all documentary stamp tax and
intangible tax (including interest and penalties, if any) determined to be due
in connection with any evidence of said indebtedness, obligations and
liabilities; and (v) all other amounts which Borrower is obligated to pay Lender
under any of the Loan Documents.
CONSIDERATION:
As a material inducement to Lender to extend credit to Borrower pursuant
to the Loan Documents and because the Guarantors will benefit from any credit
extended to Borrower, the Guarantors make this Guaranty. In connection
therewith, the Guarantors covenant that Transeastern is the sole shareholder of
Borrower and Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx and Xxxxxx Xxxxx are the sole
shareholders, jointly with their spouses, of at least 80% of the voting (I.E.,
common) stock of Traneastern and, accordingly, the Guarantors will derive a
substantial benefit from the Loan.
TERMS, COVENANTS AND CONDITIONS:
1. NATURE AND SCOPE OF GUARANTY. Subject to the provisions of Section 10
of this Guaranty:
1.1 The Guarantors, jointly and severally, irrevocably, absolutely and
unconditionally guarantee to Lender, the due and punctual payment and
performance of the Obligations.
1.2 This Guaranty is an absolute and unconditional guaranty of payment
and performance and not one of collection and all Obligations guaranteed hereby
shall be conclusively presumed to have been created in reliance hereon.
1.3 Guarantors will make all payments hereunder in lawful money of the
United States of America in immediately available funds without set-off or
counterclaim.
1.4 Guarantors' liability hereunder shall remain unchanged irrespective
of any invalidity, illegality or unenforceability of or any defense (whether
arising by reason of disability, dissolution or liquidation of Borrower, or lack
of corporate or partnership power or authority of Borrower, or claims that any
interest to be paid to Lender in connection with the Loan Documents, exceeds the
applicable usury threshold or otherwise) to the Obligations, the Loan Documents
or any portion thereof, or of any security for the Obligations, or any portion
thereof, it being understood and agreed that each Guarantor shall be and remain
fully bound hereunder regardless of whether Borrower shall be found not liable
on the Obligations or any other guarantor (including a Guarantor) be relieved or
released from liability for any reason whatsoever.
1.5 In case of the death, incompetency, disability, dissolution,
liquidation or insolvency (howsoever evidenced) of Borrower, or in case any
bankruptcy, reorganization, debt arrangement, adjustment, composition, or other
proceeding under any bankruptcy or insolvency law, or any dissolution,
liquidation or receivership proceeding is instituted by or against Borrower, or
Borrower admits in writing its inability to pay its debts as they mature, all
Obligations then existing shall at the option of Lender, without notice to
anyone, immediately become due and payable by the Guarantors.
1.6 Guarantors acknowledge that Lender has no obligations or
duties to Guarantors under this Guaranty.
2. DISCHARGE OF GUARANTORS. Guarantors shall be discharged from
liability hereunder only upon the full payment and performance of the
Obligations; provided, however, that if any sums paid to and applied by Lender
toward the Obligations are thereafter required to be repaid to Borrower or to
any affiliate of Borrower, or to any trustee, receiver or other person, by
reason of the application of the Bankruptcy Code, the Uniform Fraudulent
Transfer Act or any other law relating to creditors' rights generally, then this
Guaranty shall be reinstated, AB INITIO, as if such portion of the Obligations
had never been paid.
3. CONSENT TO AGREEMENTS MADE BY BORROWER. Guarantors consent, without
notice to Guarantors, to all terms and agreements set forth in the Loan
Documents and all other terms and agreements hereafter made by Borrower with
Lender insofar as same may affect the Obligations.
4. CONSENT TO LENDER'S ACTIONS OR INACTIONS REGARDING BORROWER, THE
GUARANTORS, AND THE COLLATERAL. Guarantors consent that Lender may at any time
and from time to time, before or after any default by Borrower, with or without
further notice to or consent from Guarantors:
4.1 Either with or without consideration to Borrower, any guarantor
(including any of the Guarantors), pledgor, or grantor of any Collateral,
exchange, release, surrender (in whole or in part), or fail to protect or to
preserve the value of any Collateral now or hereafter held as security for the
Obligations, or waive, release, or subordinate any lien or security interest (in
whole or in part) in or on any such Collateral;
4.2 Waive or delay the exercise of any of its rights or remedies against
Borrower or any other person or entity, including, without limitation, any
guarantor (including any Guarantor); notwithstanding any waiver or delay, Lender
shall not be precluded from further exercise of any of its rights, powers or
privileges expressly provided for herein or otherwise available, it being
understood that all such rights and remedies are cumulative;
4.3 Waive or extend the time of Borrower's performance of any and all
terms, provisions and conditions set forth in the Loan Documents or in any other
instrument or agreement evidencing or relating to the Obligations;
4.4 Release Borrower or any other person or entity, including, without
limitation, any guarantor (including any Guarantor) from all or any portion of
the Obligations;
4.5 Proceed against any or all of the Guarantors without first
proceeding against or joining Borrower or any guarantor (including the other
Guarantors) or any endorser of the Note or other agreement evidencing the
Obligations, or any property securing the payment or performance of the
Obligations, including, without limitation, the Loan Documents;
4.6 Renew, extend or modify the terms of the Obligations or any
instrument or agreement evidencing or relating to the Obligations;
4.7 Apply payments by Borrower, the Guarantors, or any other person or
entity to the reduction of the Obligations in such manner and in such amounts
and at such time or times and in such order and priority as Lender may see fit;
and
4.8 Generally deal with Borrower or any of the security for the
Obligations or other person or party as Lender may see fit.
The Guarantors shall remain bound under this Guaranty notwithstanding any such
exchange, release, surrender, subordination, waiver (whether or not such waiver
is oral or written), delay, proceeding, renewal, extension, modification,
application, act or failure to act, or other dealing described in Subsections
4.1 through 4.8, inclusive, above even though done without notice to or consent
from the Guarantors.
5. WAIVER OF RIGHTS.
5.1 Guarantors shall not be entitled to any abatement, deferment,
suspension, reduction, set-off, defense or counterclaim in respect of the
Obligations.
5.2 Guarantors expressly waive all rights Guarantors may have now or in
the future under any statute, or at common law, or at law or in equity, or
otherwise, including, without limitation, any rights Guarantors may have to
compel Lender to proceed in respect of the Obligations against Borrower or any
other party or against any security for the payment of the Obligations before or
while proceeding against, or as a condition to proceeding against, Guarantors.
Guarantors agree that any notice or direction given at any time to Lender which
is inconsistent with the waiver in the immediate preceding sentence shall be
void and may be ignored by Lender, and, in addition, may not be pleaded or
introduced as evidence in any litigation relating to this Guaranty for the
reason that such pleading or introduction would be at variance with the written
terms of this Guaranty, unless Lender has specifically agreed otherwise by a
written document.
5.3 It is agreed between Guarantors and Lender that the foregoing
waivers contained in this Section 5 are of the essence of the making of the Loan
and that, but for this Guaranty and such waivers, Lender would decline to agree
to the Loan.
5.4 In addition to the other waivers by Guarantors contained herein,
Guarantors waive and agree that Guarantors will not at any time insist upon,
plead or in any manner whatever claim or take the benefit or advantage of, any
and all appraisal, valuation, stay, extension, marshalling-of-assets or
redemption laws, or right of homestead or exemption, whether now or at any time
hereafter in force, which may delay, prevent or otherwise affect the performance
by Guarantors or Guarantors' obligations under, or the enforcement by Lender of
this Guaranty.
5.5 Guarantors hereby waive diligence, notice of dishonor, presentment
and demand (whether for non-payment or protest or of acceptance, maturity,
extension of time, change in nature or form of the Obligations, acceptance of
further security, release of security, composition or agreement arrived at as to
the amount of or the terms of the Obligations, notice of adverse change in
Borrower's financial condition, any default by Borrower or any pledgor, grantor
of security, or any guarantor (including the Guarantors) and any other fact
which might materially increase the risk to Guarantors) and any other notices to
which the Guarantors may otherwise be entitled with respect to any of the
Obligations, and all other demands whatsoever, and waive the benefit of all
provisions of law which are or might be in conflict with the terms of this
Guaranty, except to the extent that this Guaranty may otherwise specify the
giving of notice.
6. SUBROGATION Guarantors shall not have any right of contribution,
subrogation, reimbursement or indemnity whatsoever against Borrower, nor any
right of recourse to security for the Obligations or guaranty obligations of
Borrower to Lender, all of which shall be deemed to be waived by Guarantors.
Neither Guarantors nor Borrower shall be deemed a creditor of the other with
respect to the Obligations or to any other obligations arising hereunder, as
said term "creditor" is defined pursuant to Title 11 of the United States Code,
as amended.
(a) If, notwithstanding the foregoing, Guarantors, by payment or
otherwise, become subrogated to all or any of the rights of Lender under any of
the Loan Documents or any other documentation underlying or securing the
Obligations and the foregoing waiver is not effective under applicable law, the
rights of Lender to which Guarantors shall be subrogated shall be accepted by
Guarantors "as is" and without any representation or warranty of any kind by
Lender, expressed or implied, with respect to the legality, value, validity or
enforceability of any of such rights, or the existence, availability, value,
merchantability or fitness for any particular purpose of any Collateral.
(b) If Lender may under any applicable law proceed to realize its
benefits under any of the Loan Documents giving Lender a lien upon or security
interest in the Collateral whether owned by Borrower or by any other person,
either by judicial foreclosure or by non-judicial sale or enforcement, Lender
may, at its sole option, determine which of its remedies or rights it may pursue
without affecting any of its rights and remedies under this Guaranty. If in the
exercise of any of its rights and remedies Lender shall forfeit any of its
rights or remedies, whether because of any applicable laws pertaining to
"election of remedies" or anti-deficiency statute or law or the like, Guarantors
hereby consent to such action by Lender and waives any claim based upon such
action, even if such action by Lender shall result in a full or partial loss of
any rights of subrogation which the Guarantors might otherwise have had but for
such action by Lender. Any election of remedies or anti-deficiency statute or
law which results in the denial or impairment of Lender's right to seek a
deficiency judgment against Borrower, including, without limitation, the
exercise of Lender's rights under the Pledge Agreement to retain the Stock under
Section 679.505(2) of the Florida Statutes in effect on the date hereof (or any
successor statutory section), shall not impair Guarantors' obligation to pay
such deficiency. In the event Lender shall bid in at any foreclosure sale or at
any private sale permitted by law or by the Loan Documents for the Mortgaged
Property or any of the Collateral, including the Stock, Lender may bid all or
less than the amount of the indebtedness owing by Borrower to Lender and the
amount of such bid need not be paid by Lender but will be credited against the
Obligations. The amount of the successful bid at any such sale, whether Lender
or any other party is the successful bidder, shall be conclusively deemed to be
the fair market value of the Collateral notwithstanding that any present or
future law or court decision or ruling may have the effect of reducing the
amount of any deficiency claim to which Lender might otherwise be entitled under
this Guaranty.
7. SUBORDINATION.
7.1 All rights and claims of Guarantors (collectively the "GUARANTOR
CLAIMS") against Borrower or any of Borrower's property now or hereafter
existing shall be subordinate and subject in right of payment to the prior
payment in full of and the performance of all of the Obligations.
Notwithstanding the foregoing, if an Event of Default occurs and Lender retains
or otherwise disposes of the Stock in accordance with the Pledge Agreement, then
as and from the date that the Stock is retained or otherwise disposed of by
Lender, Guarantors shall be deemed to have waived all of their Guarantor Claims.
7.2 Until the Obligations have been paid and performed in full and
Guarantors shall have performed all of Guarantors' obligations hereunder,
Guarantors shall not receive or collect, directly or indirectly, from Borrower
or any other party any payment upon the Guarantor Claims, nor seek to realize
upon any collateral securing such Guarantor Claims. Notwithstanding the
foregoing, if Guarantors should receive any such payment, Guarantors agree to
hold same in trust for Lender and agrees that Guarantors shall have absolutely
no rights in or to or dominion over such payments except to pay them promptly to
Lender, and Guarantors hereby covenant to do so; provided, however, that
Guarantors are not obligated to repay amounts representing Borrower's First
Property Returns which are received by Guarantors prior to the occurrence of an
Event of Default.
8. GRANT. To secure the prompt payment and performance of the
Obligations, the Guarantors grant to Lender a continuing first lien security
interest in the Guarantor Claims and all proceeds thereof. Guarantors agree that
Lender shall have the rights and remedies of a secured party under the Uniform
Commercial Code-Secured Transactions as adopted by the State of Florida with
respect to all of the Guarantor Claims, including, without limitation, the right
to sell or otherwise dispose of any or all of such property. Lender may, without
further notice to anyone, apply or set off any balances, credits, deposits,
accounts, monies or other indebtedness at any time created by or due from Lender
to the Guarantors against the amounts due hereunder. Any notification of
intended disposition of any property required by law shall be deemed reasonably
and properly given if given at least five (5) calendar days before such
disposition.
9. DEFAULT BY BORROWER. Guarantors shall be deemed to be in default
under the terms of this Guaranty in the event that: (a) Guarantors fail to
provide the financial statements set forth in Section 10 below; (b) any
representation of Guarantors herein proves to be false or materially misleading;
or (c) Guarantors fail to comply with their representations, covenants, and
agreements set forth herein. If any Event of Default or any default which
continues beyond any applicable grace or cure period shall occur under any of
the Loan Documents, including, without limitation, a default under this
Guaranty, and if Lender shall declare the then outstanding principal amount of
the Note and all other amounts due under the Loan Agreement and other Loan
Documents, together with accrued interest, to be immediately due and payable and
if this Guaranty has become enforceable under the provisions of Section 10
thereof, then Guarantors shall, within three (3) days after demand in writing
therefor shall have been made by Lender to Guarantors, pay to Lender the amount
of all outstanding Obligations due and owing Lender. Payment by Guarantors shall
be made to Lender at the address indicated below for the giving of notice to
Lender or at any other address that may be specified in writing from time to
time by Lender.
10. EFFECTIVENESS OF GUARANTY. This Guaranty shall be effective on the
date hereof, provided, however, that Lender shall not proceed to enforce any of
the terms and provisions hereof, unless and until the occurrence of the
following events:
(a) any Collateral shall be transferred which causes an Event of Default
to occur under the Loan Agreement;
(b) an Event of Default occurs under the Loan Agreement as a result of
the breach of the non-competition covenant set forth in Section 9.13 thereof;
(c) any lien or encumbrance, including, without limitation, mechanic=s
liens, shall be placed against any of the Collateral which causes an Event of
Default under the Loan Agreement;
(d) Borrower shall misuse or misapply any funds, including, without
limitation, Loan Proceeds, sales proceeds or other revenues of Borrower,
insurance or condemnation proceeds, deposits or escrowed funds;
(e) Borrower, Guarantors or any other Borrower related parties to the
Loan Documents shall enter into any transactions with affiliates of Borrower or
Guarantors (i.e., entities in which Borrower and/or any Guarantors own,
singularly or in the aggregate, more than a fifteen percent (15%) interest);
(f) Borrower, any or all of the Guarantors or any other Borrower related
parties to the Loan Documents (including, without limitation, any successors of
the foregoing, such as a trustee in Bankruptcy), shall attempt in any manner to
obstruct Lender=s exercise of any of its remedies under the Loan Documents after
an Event of Default has occurred thereunder, provided, however, that Borrower or
any or all of the Guarantors or any other Borrower related party to the Loan
Documents may challenge the existence of a Default or Event of Default, without
causing this Guaranty to become effective under this subsection (f), unless a
court of competent jurisdiction determines that the Default or Event of Default
declared by Lender does in fact exist, in which event such challenge shall be
deemed the occurrence of an event set forth in this subsection (f) and this
Guaranty shall thereupon become effective;
(g) Borrower, any or all of the Guarantors or any other Borrower related
parties to the Loan Documents (including, without limitation, any successors of
the foregoing, such as a trustee in Bankruptcy) shall challenge or assert a
defense to Lender=s rights pursuant to the Loan Documents, including, without
limitation, Lender=s right to any payments provided for in the Loan Documents,
be they payments of principal, interest, Contingent Returns or otherwise;
(h) Lender becomes liable or is otherwise alleged to be liable for any
Environmental Claim that is not cured and/or paid by Borrower in accordance with
the terms of the Environmental Indemnity Agreement and the other Loan Documents;
(i) there shall occur any intentional destruction or waste of the
Improvements or other assets of Borrower;
(j) Borrower shall fail to complete the construction of the Project as a
result of a discrepancy between actual development and construction costs for
the Project being in excess of amounts reflected in the proforma projections for
the same which have been approved by Lender, to the extent that actual costs
exceed those reflected in the projections by an amount in excess of $50,000.00,
in the aggregate (after netting savings against cost increases);
(k) Borrower shall fail to complete the construction of any structure
(as evidenced by the issuance of a certificate of occupancy) upon which
construction has commenced (as defined as pouring a slab) free of any Liens.
(l) if an Event of Default occurs and if so requested by Lender, the
failure of Borrower, Guarantors or any other Borrower related party to the Loan
Documents to facilitate and cooperate with Lender in an uncontested foreclosure
and/or a deed in lieu of foreclosure for all of the real property, and one or
more comparable procedures with respect to all personal property, which stands
as Collateral for the Loan, which shall include, without limitation, Borrower's,
Pledgor's or any other party's objection to Lender retaining the Stock under the
Pledge Agreement in satisfaction of Borrower's obligations under the Loan in
accordance with Section 679.505(2) of the Florida Statutes, in effect on the
date hereof (or any successor statutory section); .
(m) if an Event of Default occurs and if so requested by Lender, the
failure of Borrower, Pledgor or any other Borrower related party to the Loan
Documents to liquidate the Collateral in a manner acceptable to Lender;
(n) fraud of Borrower, any of the Guarantors or any other Borrower
related parties to the Loan Documents;
(o) misrepresentation of Borrower, any of the Guarantors or any other
Borrower related parties to the Loan Documents;
(p) criminal acts of Borrower, any of the Guarantors or any other
Borrower related parties to the Loan Documents; or
(q) Borrower merges or consolidates with any partnership, corporation or
other entity or person, including, without limitation, Transeastern, or acquires
any assets or business from or stock of any partnership, corporation or other
entity or person, including, without limitation, Transeastern, or is otherwise
deemed to be consolidated or merged in any bankruptcy proceedings or otherwise,
or causes an Event of Default to occur under the Loan Agreement as a result of
the breach of Section 9.10 thereof.
11. FINANCIAL STATEMENTS. So long as all or any portion of the
Obligations remains unpaid or unsatisfied, each Guarantor covenants and agrees
that each Guarantor shall deliver to Lender:
11.1 within one hundred twenty (120) days after the end of each fiscal
year of a corporate Guarantor, financial statements of profit and loss for each
such fiscal year and balance sheets as of the end of each such year, in
reasonable detail, and in form and content acceptable to Lender, prepared in
accordance with generally accepted accounting principles consistently applied
and certified by such corporate Guarantor;
11.2 within one hundred twenty (120) days after the end of each calendar
year, then current financial statements of each Guarantor (which shall be
prepared at least annually), certified by each Guarantor and in form and content
satisfactory to Lender and (A) if a corporate Guarantor, prepared in accordance
with generally accepted accounting principles consistently applied, and (B) if
an individual Guarantor, prepared on a present value basis;
11.3 within fifteen (15) days after the same is filed, a copy of the tax
return of each Guarantor; and
11.4 forthwith after the issuance thereof, any other financial
statements of each Guarantor, prepared by an accountant or furnished directly or
indirectly to any other creditor.
12. REPRESENTATIONS AND WARRANTIES.
12.1 Guarantors represent and warrant to Lender that:
(a) Transeastern (A) is duly organized, validly existing and in good
standing under the laws of the state of Florida, (B) has the corporate power and
authority to own its properties and to carry on its business as now being
conducted, (C) is qualified to do business in the State of Florida, (D) is in
compliance with all laws, orders, regulations, authorizations and similar
matters (collectively the "GOVERNMENTAL REQUIREMENTS") of all governmental
authorities, whether federal, state, county, or municipal (collectively the
"GOVERNMENTAL AUTHORITY"), (E) all of its issued and outstanding stock is fully
paid and nonassessable, there are no outstanding rights or options to acquire
any additional stock (except for warrants exercisable by holders of Class A
Preferred Shares of Transeastern for conversion to common stock thereof), and
its stock has not been pledged or encumbered in any manner whatsoever and (F)
has not amended or modified its articles of incorporation or its bylaws except
as previously disclosed in writing to Lender prior to the execution hereof.
(b) The execution, delivery and performance by Guarantors of this
Guaranty, (i) is within the corporate purposes of Transeastern, (ii) has been
duly authorized by all requisite corporate action of Transeastern, (iii) does
not require the approval of any Governmental Authority, and (iv) will not
violate any Governmental Requirement, the articles of incorporation and bylaws
of Transeastern or any indenture, agreement or other instrument to which
Guarantors are a party or by which Guarantors or any of Guarantors' property is
bound, or be in conflict with, result in a breach of or constitute (with due
notice or the lapse of time, or both) a default under any such indenture,
agreement or other instrument, or result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of Guarantors'
property or assets, except as contemplated by the provisions of this Guaranty.
(c) This Guaranty when executed and delivered by Guarantors will
constitute the legal, valid and binding obligations of Guarantors enforceable in
accordance with the terms hereof.
(d) There are no judgments outstanding against Guarantors and there is
no action, suit, proceeding, or investigation now pending (or to the best of
Guarantors' knowledge after diligent inquiry threatened) against, involving or
affecting any Guarantor or any Guarantor's properties or any part thereof, at
law, in equity or before any Governmental Authority, which will have a material
adverse effect on the Project or the financial condition of the Guarantors.
(e) All balance sheets, statements of profit and loss and other
financial data that have been and will be given to Lender with respect to
Guarantors in accordance with Section 11 hereof, (i) are and will be complete
and correct in all material respects; (ii) do and will accurately present the
financial condition of Guarantors as of the dates, and the results of
Guarantors' operations, for the periods for which the same have been and will be
furnished; and (iii) as to Transeastern, have been and will be prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods covered and to be covered thereby and, as to the
individual Guarantors, have been or will be prepared on a present value basis.
(f) All balance sheets disclose and will disclose all known liabilities,
direct and contingent, as of their respective dates; and there has been no
change in the condition of Guarantors, financial or otherwise, since the date of
the most recent financial statements given to Lender with respect to Guarantors
other than changes in the ordinary course of business, none of which changes has
been materially adverse.
(g) None of the Guarantors are insolvent and will not be rendered
insolvent by the execution, delivery, payment and performance of this Guaranty.
(h) Until the Obligations have been paid and performed in full and
Guarantors shall have performed all of Guarantors' obligations hereunder,
Guarantors shall not, directly or indirectly, sell, convey, or transfer or
permit to be sold, conveyed, or transferred any of Guarantors' assets to any
party or entity to which Guarantors are related or in which Guarantors have an
interest without Lender's prior written consent which may be granted or withheld
in Lender's sole and absolute discretion.
(i) Guarantors represent, warrant and agree that, as of the date of this
Guaranty, Guarantors' obligations under this Guaranty are not subject to any
counterclaims, offsets or defenses against Lender of any kind. Guarantors
further agree that Guarantors' obligations under this Guaranty shall not be
subject to any counterclaims, offsets or defenses against Lender or against
Borrower of any kind which may arise in the future.
12.2 Guarantors acknowledge that Lender has relied upon the Guarantors'
representations, has made no independent investigation of the truth thereof and
is not charged with any knowledge contrary thereto that may have been received
by any officer, director, employee, or shareholder of Lender. Guarantors further
acknowledges that they have not been induced to execute and deliver this
Guaranty as a result of, and is not relying upon, any representations,
warranties, agreements, or conditions, whether express or implied, written or
oral, by Lender or by any officer, director, employee, or shareholder of Lender.
13. MODIFICATION. No agreement unless in writing and signed by an
authorized officer of Lender and no course of dealing between Guarantors and
Lender shall be effective to change or modify or to discharge in whole or in
part this Guaranty. No waiver of any rights or powers of Lender or consent by it
shall be valid unless in writing signed by an authorized officer of Lender and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
14. COST OF ENFORCEMENT. Guarantors agree that, whenever an attorney is
used to obtain payment or performance under or otherwise enforce this Guaranty
or to enforce, declare, or adjudicate any rights or obligations under this
Guaranty, whether by suit or any other manner whatsoever, reasonable attorneys'
fees, paralegals' fees, legal assistants' fees and costs (whether incurred in
collection, litigation, bankruptcy proceedings, appeals, or otherwise) shall be
payable by Guarantors to Lender.
15. SUBMISSION TO JURISDICTION. Guarantors irrevocably and
unconditionally: (a) agree that any suit, action, or other legal proceeding
arising out of or relating to this Guaranty may be brought, at the option of
Lender, in a court of record of the STATE OF FLORIDA IN BROWARD COUNTY, IN THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA, or in any
other court of competent jurisdiction; (b) consent to the jurisdiction of each
such court in any such suit, action, or proceeding; (c) waive any objection
which it may have to the laying of venue of any such suit, action, or proceeding
in any of such courts; and (d) agree that service of any court paper may be
effected on any Guarantor by mail, addressed and mailed as provided in Section
16 hereof or in such other manner as may be provided under applicable laws or
court rules in said State. Transeastern hereby irrevocably appoints Xxxx X.
Xxxxxx, whose address is Two Executive Court, 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxx Xxxxx, Xxxxxxx 00000, as agent for the service of process for the
purposes of any purported controversy or cause of action arising out of this
Guaranty or any related instrument.
16. NOTICE. All notices, demands, requests and other communications, if
any, required under this Guaranty shall be given in accordance with the Loan
Agreement. This Guaranty does not require that Lender give Guarantors any
notice, demand, or request and this Section 16 shall not be construed to create
such a requirement.
17. CONFLICT OF LAW. This Guaranty shall be construed, interpreted,
enforced and governed by and in accordance with the laws of the State of Florida
(excluding the principles thereof governing conflicts of law).
18. CONTINUING GUARANTY. Guarantors agree that this Guaranty is a
continuing guaranty and shall remain in full force and effect until the payment
in full of the Obligations.
19. PERMITTED ASSIGNMENT BY LENDER. Lender may freely assign its rights
and delegate its duties under this Guaranty without notice to or the consent of
Guarantors.
20. FURTHER ASSURANCE. Guarantors agree, upon the written request of
Lender, to execute and deliver to Lender from time to time any additional
instruments or documents reasonably considered necessary by Lender or its
counsel to cause this Guaranty to be, become or remain valid and effective in
accordance with its terms.
21. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Guarantors set forth in this Guaranty shall survive for so long as
all or any portion of the Obligations remains unpaid or unsatisfied.
22. NON-WAIVER. The failure of Lender to enforce any right or remedy
hereunder, or promptly to enforce any such right or remedy, shall not constitute
a waiver thereof, nor give rise to any estoppel against Lender, nor excuse
Guarantors from their obligations hereunder. Any waiver of any such right or
remedy must be in writing and signed by Lender. In the event any of the deadline
for the payment of any sums or performance of any obligations hereunder occurs
on a day which is not a Business Day, then such deadline shall be deemed to be
the next occurring Business Day.
23. GENDER AND NUMBER. In this Guaranty, wherever the context so
requires, the use of any gender shall include all other genders, and words in
the singular shall include the plural and the plural shall include the singular.
Where applicable the term "Guarantors" as used herein mean the "Guarantors and
each of them".
24. SUCCESSORS AND ASSIGNS. This Guaranty shall inure to the benefit of
Lender, its successors and assigns, and shall be binding upon the Guarantors and
their respective heirs, personal representatives, successors and assigns.
25. SAVINGS CLAUSE. If any provision or portion of this Guaranty is
declared or found by a court of competent jurisdiction to be unenforceable or
null and void, such provision or portion thereof shall be deemed stricken and
severed from this Guaranty, and the remaining provisions and portions thereof
shall continue in full force and effect.
26. HEADINGS. The captions of Sections of this Guaranty are for
convenient reference only, and shall not affect the construction or
interpretation of any of the terms and provisions set forth in this Guaranty.
27. JOINT AND SEVERAL LIABILITY. The liability of the Guarantors
hereunder shall be joint and several with Borrower and all other guarantors of
the Obligations.
28. WAIVER OF TRIAL BY JURY. LENDER AND GUARANTORS HEREBY KNOWINGLY,
IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS
GUARANTY, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY OR ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS GUARANTY, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER
ACCEPTING THIS GUARANTY FROM GUARANTORS AND FOR GUARANTORS GIVING THIS GUARANTY
TO LENDER.
IN WITNESS WHEREOF, the Guarantors intending to be jointly and severally
legally bound hereby have duly executed and delivered this Guaranty on the 29th
day of March, 1996.
Signed, sealed and delivered
in the presence of:
TRANSEASTERN PROPERTIES OF SOUTH
FLORIDA, INC., a Florida corporation
By:
Name:
Title:
XXXXXX XXXXXXX
XXXXXX XXXXXXX
XXXXXX XXXXX
[ACKNOWLEDGMENTS FOLLOW]
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 29th day of March,
1996, by , as
of TRANSEASTERN PROPERTIES OF SOUTH FLORIDA, INC., a Florida
corporation, on behalf of the corporation. He/she is personally known to me or
has produced a driver's license as identification.
Print or Stamp Name:
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 29th day of
March, 1996, by XXXXXX XXXXXXX, an individual. He/she is personally known to me
or has produced a driver's license as identification.
Print or Stamp Name:
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 29th day of
March, 1996, by XXXXXX XXXXXXX, an individual. He/she is personally known to me
or has produced a driver's license as identification.
Print or Stamp Name:
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
STATE OF FLORIDA )
) ss.:
COUNTY OF BROWARD )
The foregoing instrument was acknowledged before me this 29th day of
March, 1996, by XXXXXX XXXXX, an individual. He/she is personally known to me or
has produced a driver's license as identification.
Print or Stamp Name:
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
PLEDGE AGREEMENT
PLEDGE AGREEMENT (as may be amended, modified, supplemented, waived,
extended or restated from time to time, this "AGREEMENT") dated as of March 29,
1996, between TRANSEASTERN PROPERTIES OF SOUTH FLORIDA, INC. (the "PLEDGOR") and
AMRESCO FUNDING CORPORATION, a Delaware corporation (the "SECURED PARTY").
WHEREAS, contemporaneously with the execution hereof, Secured Party has
entered into a Loan Agreement of even date herewith (as the terms thereof may
have been or may be amended, supplemented, waived or otherwise modified from
time to time, the "LOAN AGREEMENT") with Transeastern Pembroke Villages, Inc., a
Florida corporation (the "BORROWER"), pursuant to which Lender will lend and
Borrower will borrow the sum of Three Million and No/100 Dollars ($3,000,000.00)
(the "LOAN"), evidenced by a certain Promissory Note of even date herewith (the
"NOTE") executed and delivered by Borrower to Lender; and
WHEREAS, Pledgor will derive substantial benefit, directly and
indirectly, by reason of the Secured Party entering into the Loan Agreement with
the Borrower; and
WHEREAS, to induce the Secured Party to enter into the Loan Agreement
and to extend credit thereunder and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Pledgor has
agreed to grant to the Secured Party a security interest in the Collateral (as
hereinafter defined) as security for the Secured Obligations (as hereinafter
defined in Section 1 below) on the terms set forth below.
NOW, THEREFORE, in consideration of the premises, and other good
and valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the Pledgor and the Secured Party hereby agree as follows:
SECTION 1. DEFINITIONS. Capitalized terms used but not otherwise
defined herein shall have the meanings assigned to such terms in the Loan
Agreement. The following terms, as used herein, shall have the following
respective meanings:
"AGREEMENT" means this Agreement, including all Schedules,
Annexes and Exhibits hereto.
"COLLATERAL" shall have the meaning assigned to such term in
Section 2.
"CONTRACT" means (i) any agreement (whether executory or
non-executory and whether a Person entitled to rights thereunder is so entitled
directly or as a third-party beneficiary), including an indenture, lease or
license, (ii) any deed or other instrument of conveyance, (iii) any certificate
of incorporation or charter and (iv) any by-law.
"GOVERNMENTAL APPROVAL" means any authorization, consent,
approval, license or exemption of, registration or filing with, or report or
notice to, any Governmental Authority.
Statements, the Loan Agreement, the Other Assignments and the Loan Documents
referred to which are not
"OTHER PLEDGE AGREEMENT" means that certain Pledge Agreement of
even date herewith between Pledgor and Secured Party securing, among other
things, payment of the Contingent Returns.
"PLEDGED SECURITIES" shall have the meaning assigned to such term
in Section 2.
"PROCEEDS" shall have the meaning assigned to such term under the
Florida Uniform Commercial Code and, in any event, shall include (i) any and all
proceeds of any guarantee, insurance or indemnity payable to the Pledgor from
time to time with respect to any of the Collateral; (ii) any and all payments
(in any form whatsoever) made or due and payable to the Pledgor from time to
time in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any person acting under color of governmental authority); and (iii) any and
all other amounts from time to time paid or payable with respect to or in
connection with any of the Collateral.
"SECURED OBLIGATIONS" shall mean, collectively: (a) the principal
of and interest on (including, without limitation, interest accruing after the
date of any filing by the Borrower of any petition in bankruptcy or the
commencement of any bankruptcy, insolvency or similar proceedings with respect
to the Borrower, whether or not allowed as a claim in such proceeding under
applicable law) the Loan, the Note, and all other indebtedness, liability or
obligation of the Borrower from time to time owing to the Secured Party
(including all commitment and other fees but excluding Borrower's obligations in
respect of the Contingent Returns) under or in respect of the Loan Documents to
which the Borrower is a party; and (b) all obligations of the Pledgor to the
Secured Party under this Agreement.
Unless otherwise defined herein or in the Loan Agreement, or
unless the context otherwise requires, all terms used herein that are defined in
the Florida Uniform Commercial Code shall have the meanings therein stated. The
definitions in this Section 1 shall apply equally to both the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include," "includes" and "including" as used in this Agreement shall be deemed
in each case to be followed by the phrase "without limitation." References to
Sections, Schedules and Exhibits shall be deemed references to Sections of and
Schedules and Exhibits to this Agreement, unless otherwise specified.
SECTION 2. PLEDGE. As security for the payment and performance in
full of the Secured Obligations, the Pledgor hereby hypothecates, pledges,
assigns, grants, sets over and delivers to the Secured Party, a continuing first
priority security interest in all its right, title and interest in, to and under
the following, whether now owned or hereafter acquired:
(i) the shares of capital stock of the Borrower owned by the
Pledgor on the date hereof, including the shares of such capital stock
listed on Schedule I, and any additional shares of capital stock of the
Borrower (or successors thereto) obtained in the future by the Pledgor,
and, in each case, all certificates representing such shares and, in
each case, all
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rights, options, warrants, stock or other securities which may hereafter
be received, receivable or distributed in respect of, or exchanged for,
any of the foregoing (all of the foregoing being referred to herein as
the "PLEDGED SECURITIES");
(ii) all other property which may be delivered to and held by
the Secured Party pursuant to the terms hereof of any character
whatsoever into which any of the foregoing may be converted or which may
be substituted for any of the foregoing; and
(iii) subject to the provisions of Section 5, all Proceeds of
the Pledged Securities and of such other property, including all cash,
securities or other property at any time and from time to time acquired,
receivable or otherwise distributed in respect of, or in exchange for,
any of or all such stock or other property (the items referred to in
clauses (i) through (iii) being collectively referred to as the
"COLLATERAL").
TO HAVE AND TO HOLD the Collateral, together with all right,
title, interest, powers, privileges and preferences pertaining or incidental
thereto, unto the Secured Party, its successors and assigns, forever; SUBJECT,
HOWEVER, to the terms, covenants and conditions hereinafter set forth.
SECTION 3. DELIVERY OF COLLATERAL. (a) Contemporaneously with the
execution of this Agreement, the Pledgor shall deliver or cause to be delivered
to the Secured Party (i) any and all certificates and other instruments
evidencing the Pledged Securities, along with undated stock powers duly executed
in blank or other instruments of transfer satisfactory to the Secured Party and
endorsed in blank and such other instruments and documents as the Secured Party
may reasonably request to effect the purposes contemplated hereby, (ii) any and
all certificates or other instruments or documents representing any of the
Collateral and (iii) all other property comprising part of the Collateral with
proper instruments of assignment duly executed and such other instruments or
documents as the Secured Party may reasonably request to effect the purposes
contemplated hereby.
(b) If the Pledgor shall become entitled to receive or shall
receive any shares of stock (including, without limitation, shares of Pledged
Securities acquired after the date hereof), options, warrants, rights or other
similar property (including, without limitation, any certificate representing a
stock dividend, or any distribution in connection with any recapitalization,
reclassification or increase or reduction of capital, or issued in connection
with any reorganization of the Borrower) in respect of the Pledged Securities
(whether as an addition to, in substitution of, or in exchange for, such Pledged
Securities or otherwise), the Pledgor agrees:
(i) to accept the same as the agent of the Secured Party;
-3-
(ii) to hold the same in trust on behalf of and for the
benefit of the Secured Party; and
(iii) to deliver any and all certificates or instruments
evidencing the same to the Secured Party on or before the close of
business on the seventh (7th) day following the receipt thereof by the
Pledgor, in the exact form received, with the endorsement in blank of
the Pledgor when necessary and with appropriate undated stock powers
duly executed in blank (with signatures properly guaranteed), to be held
by the Secured Party, subject to the terms of this Agreement, as
additional Collateral.
SECTION 4. REGISTRATION IN NOMINEE NAME. Upon the occurrence of
an Event of Default, the Secured Party shall have the right (in its sole and
absolute discretion and without prior notice to the Pledgor) to transfer to or
to register the Pledged Securities in its own name or the name of its nominee.
SECTION 5. VOTING RIGHTS, ETC. (a) Unless and until an Event of
Default shall have occurred:
(i) The Pledgor shall be entitled to exercise any and all voting
and/or consensual rights and powers accruing to an owner of Pledged
Securities or any part thereof for any purpose not prohibited by the
terms of this Agreement or the Loan Agreement.
(ii) The Secured Party shall execute and deliver to the Pledgor,
or cause to be executed and delivered to the Pledgor, all such proxies,
powers of attorney, and other instruments as the Pledgor may reasonably
request for the purpose of enabling the Pledgor to exercise the voting
and/or consensual rights and powers which it is entitled to exercise
pursuant to subparagraph (i) above.
(iii) The Pledgor shall be entitled to receive, subject to the
provisions of the Loan Agreement and Section 2 hereof, and retain any
and all dividends paid on the Pledged Securities. Except for dividends
that the Pledgor shall be entitled to receive and retain pursuant to the
preceding sentence, all noncash dividends, stock or dividends paid or
payable in cash or otherwise in connection with a partial or total
liquidation or dissolution, instruments, securities, other distributions
in property, return of capital, capital surplus or paid-in surplus or
other distributions made on or in respect of Pledged Securities, whether
paid or payable in cash or otherwise, whether resulting from a
subdivision, combination or reclassification of the outstanding capital
stock of the Borrower or from any bankruptcy or reorganization of the
Borrower or received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, as a result of any merger,
consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the
Collateral, and, if received by the Pledgor, shall not be commingled by
the Pledgor with any of its other funds or property but shall be held
separate and apart therefrom, shall be held in trust for the benefit of
the Secured Party and shall be forthwith
-4-
delivered to the Secured Party in the same form as so received (with any
necessary endorsements).
(b) Upon the occurrence of an Event of Default, if so specified
by the Secured Party in a written notice to the Pledgor, all rights of the
Pledgor to exercise the voting and consensual rights and powers which the
Pledgor is entitled to exercise pursuant to Section 5(a)(i) shall cease, and all
such rights shall thereupon become vested in the Secured Party, which shall have
the sole and exclusive right and authority to exercise such voting and
consensual rights and powers, and the Pledgor shall execute and deliver to the
Secured Party all such documents and instruments (including proxies) as the
Secured Party shall reasonably request in order to effect the purposes of this
Section 5(b).
(c) Upon the occurrence of an Event of Default, all rights of the
Pledgor to receive any dividends which the Pledgor is authorized to receive
pursuant to clause (iii) of paragraph (a) of this Section 5 shall cease, and all
such rights shall thereupon become vested in the Secured Party, which shall have
the sole and exclusive right and authority to receive and retain such dividends.
All dividends which are received by the Pledgor contrary to the provisions of
this paragraph (c) shall be received in trust for the benefit of the Secured
Party shall be segregated from other property or funds of the Pledgor and shall
be forthwith delivered to the Secured Party as Collateral in the same form as so
received (with any necessary endorsement). Any and all money and other property
paid over to or received by the Secured Party pursuant to the provisions of this
Section 5 shall be retained by the Secured Party in an account to be established
by the Secured Party upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 9 hereof.
SECTION 6. REPRESENTATIONS; WARRANTIES AND COVENANTS. The Pledgor
hereby represents, warrants and covenants to and with the Secured Party that:
(a) Except for any security interest granted to the Secured
Party, the Pledgor (i) is and will at all times continue to be the
direct owner, beneficially and of record, of the Pledged Securities,
(ii) is and will at all times hold the Collateral free and clear of all
Liens, (iii) will make no assignment, pledge, hypothecation or transfer
of, or create or suffer to exist any Lien on, the Collateral and (iv)
subject to Section 5, will cause any and all Collateral, whether for
value paid by the Pledgor or otherwise, to be forthwith deposited with
the Secured Party and pledged or assigned hereunder.
(b) The Pledgor (i) has, and at all times will have, the right
and legal authority to pledge the Collateral in the manner hereby done
or contemplated and (ii) will defend its and the Secured Party's
respective title and interest thereto or therein against any and all
attachments, Liens, claims or other impediments of any nature, however
arising, of all Persons whomsoever.
(c) No authorization, consent or approval, or other action by,
and no notice to or filing with, any Governmental Authority (including
any securities exchange) not previously
-5-
obtained is required (i) for the pledge by the Pledgor of the Collateral
pursuant to this Agreement or the perfection therein of the Secured
Party's security interest created hereby, other than the filing of
appropriate Uniform Commercial Code financing statements in the offices
of the Department of State in the State of Florida, (ii) for the
execution, delivery or performance of this Agreement by the Pledgor or
(iii) for the exercise by the Secured Party of the rights provided for
in this Agreement or the remedies in respect of the Collateral pursuant
to this Agreement, other than compliance with applicable Federal and
state securities laws in connection with the acquisition and sale or
other disposition of Pledged Securities in accordance with the terms of
this Agreement.
(d) By virtue of the execution and delivery by the Pledgor of
this Agreement, when the certificates representing the Pledged
Securities owned by the Pledgor are delivered to the Secured Party in
accordance with this Agreement, the Secured Party will obtain and, so
long as the Secured Party maintains possession of the certificates
representing the Pledged Securities, will have and will continue to have
a valid and perfected first priority lien upon and security interest in
such Pledged Securities as security for the repayment of the Secured
Obligations, prior to all other liens and encumbrances thereon and
security interests therein.
(e) The Pledged Securities constitute, and at all times will
constitute, all of the issued and outstanding shares of capital stock of
Borrower owned by the Pledgor.
(f) All of the representations and warranties contained in this
Agreement shall survive the execution, delivery and performance of this
Agreement.
(g) This Agreement constitutes the legal, valid and binding
obligation of the Pledgor, enforceable in accordance with its terms
(subject as to enforceability to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws affecting creditors' rights
generally and to general principles of equity).
(h) The execution, delivery and performance in accordance with
its respective terms by the Pledgor of this Agreement do not and will
not (a) require any Governmental Approval or any other consent or
approval or (b) violate, conflict with, result in a breach of or
constitute a default under, or result in or require the creation of any
Lien upon any assets of the Pledgor under, (i) any Contract to which the
Pledgor is a party or by which it or its property may be bound or (ii)
any applicable law.
(i) The Pledged Securities have been duly authorized and validly
issued, are fully paid and non-assessable and have been duly and validly
pledged hereunder in accordance with applicable law.
(j) There are no contractual restrictions upon the voting rights
or upon the transfer of any of the shares of the Pledged Securities
other than as referred to herein, in the Other Pledge Agreement or in
the Loan Agreement.
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(k) The Pledgor represents and warrants that it has made its own
arrangements for keeping informed of changes or potential changes
affecting the Collateral (including, but not limited to, rights to
convert, rights to subscribe, payment of dividends, reorganization or
other exchanges, tender offers and voting rights), and the Pledgor
agrees that the Secured Party shall not have any responsibility or
liability for informing the Pledgor of any such changes or potential
changes.
(l) The Pledgor shall not:
(i) permit or suffer Borrower to voluntarily dissolve or
liquidate, retire any of its capital stock, reduce its capital or merge
or consolidate with any other entity if such action would violate the
provisions of the Loan Agreement, or
(ii) vote any of the Pledged Securities in favor of any
of the foregoing.
SECTION 7. ISSUANCE OF ADDITIONAL STOCK. The Pledgor agrees that
it will not (a) permit Borrower to issue any stock or other securities
(including warrants, options and other similar agreements), whether in addition
to, by stock dividend or other distribution upon, or in substitution for, the
Pledged Securities or otherwise (unless such issuance is not prohibited by the
Loan Agreement and such stock or other securities are effectively pledged
hereunder in a manner reasonably satisfactory to the Secured Party) or (b) sell,
assign, transfer, exchange or otherwise dispose of, or grant any option with
respect to, the Collateral, or create, incur or permit to exist any Lien or
option in favor of, or any claim of any Person with respect to, any of the
Collateral, or any interest therein, except for the Lien provided for by this
Agreement and the Other Pledge Agreement.
SECTION 8. REMEDIES UPON DEFAULT. (a) If an Event of Default
shall have occurred, the Secured Party shall have, in addition to any other
rights and except as otherwise provided herein, all of the rights and remedies
with respect to the Collateral of a secured party under the Uniform Commercial
Code in the State of Florida. In addition, the Secured Party may (without any
obligation to seek performance of any guarantee or to resort to any other
security, right or remedy granted to it under any other instrument or agreement,
including the Loan Agreement) sell the Collateral, or any part thereof, at
public or private sale or at any broker's board or on any securities exchange,
for cash, upon credit or for future delivery as the Secured Party shall deem
appropriate. The Secured Party shall be authorized at any such sale (if it deems
it advisable to do so) to restrict the prospective bidders or purchasers to
persons who will represent and agree that they are purchasing the Collateral for
their own account for investment and not with a view to the distribution or sale
thereof, and upon consummation of any such sale the Secured Party shall have the
right to assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property
so sold absolutely, free from any claim or right on the part of the Pledgor
(other than rights that the Pledgor may have against such purchaser generally
and without regard to this Agreement or such sale), and the Pledgor hereby
waives (to the extent permitted by law) all equity or rights of redemption, stay
and appraisal which the Pledgor may
-7-
now have or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted.
(b) No demand, advertisement or notice, all of which are hereby
expressly waived by the Pledgor, shall be required in connection with any sale
or other disposition of any part of the Collateral that may decline speedily in
value or that is of a type customarily sold in a reorganized market; otherwise,
the Secured Party shall give the Pledgor at least 10 days' written notice (which
the Pledgor agrees is reasonable notice within the meaning of Section 9-504(3)
of the Uniform Commercial Code as in effect in Florida) of the time of and place
where such sale is to be made (or, in the case of a sale at a broker's board or
on a securities exchange, the day on which the Collateral, or portion thereof,
will first be offered for sale at such board or exchange) and of the time after
which any private sale or other disposition is to be made, all other demand,
advertisements and notices being hereby waived. Any such public sale shall be
held at such time or times within ordinary business hours and at such place or
places as the Secured Party may fix and state in the notice of such sale. At any
such sale, the Collateral, or portion thereof, to be sold may be sold as a unit
or in separate parcels, as the Secured Party may (in its sole and absolute
discretion) determine. The Secured Party shall not be obligated to make any sale
of any Collateral if it shall determine not to do so, regardless of the fact
that notice of sale of such Collateral shall have been given. The Secured Party
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Secured Party until the sale price is paid by the
purchaser or purchasers thereof, but the Secured Party shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Collateral so sold and, in case of any such failure, such Collateral may
be sold again upon like notice, and in no event shall any portion of the
proceeds of any such sale be credited against payment of the costs, expenses and
obligations set forth in Section 9 hereof until cash payment for the Collateral
so sold has been received by the Secured Pavate sale of Collateral of a type
customarily sold in a recognized market, and at any public sale made pursuant to
this Section 8, the Secured Party may bid for or purchase, free (to the extent
permitted by law) from any equity or right of redemption, stay or appraisal on
the part of the Pledgor (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to the Secured Party by the Pledgor under or pursuant to the Loan
Documents as a credit, up to an amount equal to the amount the Secured Party
would otherwise be entitled to receive pursuant to Section 9 in connection with
such sale, against the purchase price. For purposes hereof, in the case of any
such sale pursuant to a written agreement to purchase the Collateral or any
portion thereof, the Secured Party shall be free to carry out such sale pursuant
to such agreement, and the Pledgor shall not be entitled to the return of the
Collateral or any portion thereof subject thereto, notwithstanding the fact that
after the Secured Party shall have entered into such an agreement all Events of
Default shall have been remedied and the Secured Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon it, the
Secured Party may proceed by a suit or suits at law or in equity to foreclose
upon the Collateral pursuant to this
-8-
Agreement and to sell the Collateral, or any portion thereof, pursuant to a
judgment or decree of a court or courts having competent jurisdiction or
pursuant to a proceeding by a court-appointed receiver.
(c) If the Secured Party shall have instituted any proceeding to
enforce any right or remedy hereunder, and such proceeding shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Secured Party, the Secured Party shall, subject to any
determination in any such proceeding, be restored to its former position
hereunder, and thereafter, subject as aforesaid, all rights and remedies of the
Secured Party shall continue as though no such proceeding had been instituted.
SECTION 9. APPLICATION OF PROCEEDS OF SALE. The proceeds of any
sale of, or other realization upon, all or any part of the Collateral pursuant
to Section 8, as well as any Collateral consisting of cash, shall be applied by
the Secured Party as follows:
FIRST, to the payment of all costs and expenses reasonably
incurred by the Secured Party in connection with such sale or otherwise
in connection with this Agreement or any of the Secured Obligations,
including all court costs and the reasonable fees and expenses of its
agents, brokers, investment advisors, and legal counsel, the repayment
of all advances plus any interest thereon made hereunder by the Secured
Party on behalf of the Pledgor and any other costs or expenses
reasonably incurred in connection with the exercise of any right or
remedy hereunder;
SECOND, to the payment in full of the Secured Obligations
(whether or not then due and payable, at maturity, by acceleration or
otherwise) as of the date of such payment, until all the Secured
Obligations have been paid in full; and
THIRD, to the Pledgor, its successors or assigns, subject to the
duty of the Secured Party imposed by law to the holder of any
subordinate security interest or as a court of competent jurisdiction
may otherwise direct.
SECTION 10. SECURED PARTY APPOINTED ATTORNEY-IN-FACT. The Pledgor
hereby appoints the Secured Party, its successors or assigns, as its true and
lawful agent and attorney-in-fact for the purpose of carrying out the provisions
of this Agreement and taking any action and executing any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes hereof,
in each case upon the occurrence of an Event of Default, which appointment is
irrevocable and coupled with an interest and any proxy or proxies heretofore
given by the Pledgor to any other person that is inconsistent herewith are
hereby revoked. Without limiting the generality of the foregoing, the Secured
Party shall have the right, upon the occurrence of an Event of Default, with
full power of substitution either in the Secured Party's name or in the name of
the Pledgor, to ask for, demand, xxx for, collect, receive, receipt and give
acquittance for any and all moneys due or to become due under and by virtue of
any Collateral, to endorse checks, drafts, orders and other instruments for the
payment of money payable to the Pledgor representing any interest or dividend
-9-
or other distribution payable in respect of the Collateral or any part thereof
or on account thereof and to give full discharge for the same, to settle,
compromise, prosecute or defend any action, claim or proceeding with respect
thereto, and to sell, assign, endorse, pledge, transfer and make any agreement
respecting, or otherwise deal with, the same; PROVIDED, HOWEVER, that nothing
herein contained shall be construed as requiring or obligating the Secured Party
to take any action, including requiring or obligating the Secured Party to make
any commitment or to make any inquiry as to the nature or sufficiency of any
payment received by the Secured Party or to present or file any claim or notice,
or to take any action with respect to the Collateral or any part thereof or the
moneys due or to become due in respect thereof or any property covered thereby,
and no action taken by the Secured Party or omitted to be taken by it with
respect to the Collateral or any part thereof shall give rise to any defense,
counterclf the Pledgor or to any claim or action against the Secured Party in
the absence of the gross negligence or willful misconduct of the Secured Party
as shall have been determined in a final, nonappealable judgment of a court of
competent jurisdiction.
SECTION 11. NO WAIVER; REMEDIES CUMULATIVE. No failure on the
part of the Secured Party to exercise, and no delay in exercising, any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy by the Secured
Party preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law or otherwise. The Secured Party
shall not be deemed to have waived any rights hereunder or under any other
agreement or instrument unless such waiver shall be in writing and signed by the
Secured Party.
SECTION 12. SECURITIES ACT, ETC. (a) In view of the position of
the Pledgor in relation to the Pledged Securities, or because of other present
or future circumstances, a question may arise under the Securities Act of 1933,
as amended (the "SECURITIES ACT"), or any similar or successor Federal
securities law (together with the Securities Act, the "FEDERAL SECURITIES LAWS")
with respect to any disposition of the Pledged Securities permitted hereunder.
The Pledgor understands that compliance with the Federal Securities Laws might
strictly limit the course of conduct of the Secured Party if the Secured Party
were to attempt to dispose of all or any part of the Pledged Securities, and
might also limit the extent to which or the manner in which any subsequent
transferee of any Pledged Securities could dispose of the same. Similarly, there
may be other legal restrictions or limitations affecting the Secured Party in
any attempt to dispose of all or part of the Pledged Securities under applicable
blue sky or other state securities laws or similar laws analogous in purpose or
effect.
(b) Anything herein to the contrary notwithstanding, and in view
of restrictions specified in paragraph (a) of this Section 12, the Pledgor
agrees that, upon the occurrence of an Event of Default, the Secured Party may,
from time to time, attempt to sell all or any part of the Pledged Securities by
means of a private placement, restricting the bidders and prospective purchasers
to those who will represent or agree as to their investment intent or method of
resale or both in a manner reasonably required by the Secured Party to assure
compliance with applicable
-10-
securities laws. In so doing, the Secured Party may solicit offers to buy such
Pledged Securities or any part thereof, for cash, from a limited number of
investors deemed by the Secured Party, in its exclusive judgment, to be
responsible parties who might be interested in purchasing such Pledged
Securities. Pledgor acknowledges and agrees that private sales so made may be at
prices and other terms less favorable to the seller than if the Pledged Security
were sold at public sales.
SECTION 13. SECURITY INTEREST ABSOLUTE; WAIVERS BY PLEDGOR. (a)
All rights of the Secured Party hereunder, the grant of a security interest in
the Collateral and all obligations of the Pledgor hereunder, shall be absolute
and unconditional irrespective of (i) any lack of validity or enforceability of
the Loan Agreement, any other agreement with respect to any of the Secured
Obligations or any other agreement or instrument relating to any of the
foregoing, (ii) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from the Loan Agreement or any other
agreement or instrument, (iii) any exchange, release or nonperfection of any
other collateral, or any release or amendment or waiver of or consent to or
departure from any guaranty, for all or any of the Secured Obligations, (iv) any
failure by the Secured Party to demand payment or performance by the Borrower of
any of the Secured Obligations or to exercise or enforce any right or remedy in
respect thereof or (v) any other circumstance (other than payment in full of the
Secured Obligations or, in the case of rights predicated on the existence of an
Event of Default, a cure or waiver of such Event of Default) which might
otherwise constitute a defense available to, or a discharge of, the Pledgor or
any other person in respect of the Secured Obligations or in respect of this
Agreement. The Pledgor hereby acknowledges that the Secured Party shall not be
under any obligation to marshal any assets in favor of the Pledgor or against or
in payment of any or all of the Secured Obligations. The Pledgor hereby waives
and forever relinquishes any and all rights of subrogation, reimbursement, or
indemnity whatsoever in respect of the Borrower arising out of remedies
exercised by the Secured Party hereunder.
(b) The Pledgor hereby waives notice of acceptance of this
Agreement. The Pledgor further waives presentment and demand for payment of any
of the Secured Obligations, protest and notice of dishonor or default with
respect to any of the Secured Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided in
this Agreement or in the Loan Agreement. The Pledgor (to the extent that it may
lawfully do so) covenants that it shall not at any time insist upon or plead, or
in any manner claim or take the benefit or advance of, any stay (except in
connection with a pending appeal), valuation, appraisal, redemption or extension
law now or at any time hereafter in force that, but for this waiver, might be
applicable to any sale made under any judgment, order or decree based on this
Agreement or on the Loan Agreement; and the Pledgor (to the extent that it may
lawfully do so) hereby expressly waives and relinquishes all benefit and advance
of any and all such laws and hereby covenants that it will not hinder, delay or
impede the execution of any power in this Agreement or therein granted and
delegated to the Secured Party, but that it will suffer and permit the execution
of every such power as though no such law or laws had been made or enacted.
-11-
SECTION 14. PAYMENT OF COSTS AND EXPENSES, ETC. (a) The Pledgor
hereby agrees that upon demand it shall pay to the Secured Party the amount of
any and all expenses, including the reasonable fees and expenses the Secured
Party may incur in connection with (i) the administration of this Agreement,
(ii) the custody or preservation of, or the sale of, collection from, or other
realization upon, any of the Collateral, (iii) the exercise or enforcement of
any of the rights of the Secured Party hereunder, or (iv) the failure by the
Pledgor to perform or observe any of the provisions hereof. Any such amounts
payable as provided hereunder or thereunder shall be additional Secured
Obligations secured hereby. The Pledgor hereby agrees to indemnify and hold
harmless the Secured Party (and each of its directors, officers, agents and
employees), to the fullest extent permitted by law, from and against any and all
claims, losses, liabilities (including liabilities for penalties), actions,
suits, judgments, demands, costs and expenses (including reasonable attorneys'
and paralegals' fees and expenses incurred, whether litigation is commenced ot
not and, if incurred, through all appellate and bankruptcy proceedings) of
whatever nature incurred by the Secured Party hereunder or in connection
herewith, unless such loss, liability, cost or expense shall be due to willful
misconduct or gross misconduct or gross negligence on the part of the Secured
Party or its directors, officers, agents or employees as shall have been
determined in a final, nonappealable judgment of a court of competent
jurisdiction.
(b) The Pledgor hereby agrees to pay to the Secured Party, upon
demand, the amount of any taxes (including documentary stamp taxes) which the
Secured Party may have been required to pay by reason of the security interests
established pursuant to this Agreement (including any applicable transfer
taxes).
(c) All obligations of the Pledgor under this Sectwed by law and
shall be additional Secured Obligations secured hereby.
SECTION 15. TERMINATION. This Agreement, and the assignments,
pledges and security interests created or granted hereby, shall terminate when
(a) all the Secured Obligations shall have been indefeasibly paid in full in
cash and satisfied and (b) the commitments and obligations of the Secured Party
under the Loan Agreement have terminated, at which time the Secured Party shall
reassign and deliver to the Pledgor, or to such person or persons as the Pledgor
shall designate, against receipt, such of the Collateral (if any) as shall not
have been sold or otherwise applied by the Secured Party pursuant to the terms
hereof and shall still be held by it hereunder, together with appropriate
instruments of reassignment and release, all without any recourse to, or
warranty whatsoever by, the Secured Party, and at the sole cost and expense of
the Pledgor; PROVIDED, HOWEVER, that all indemnities of the Pledgor contained in
this Agreement shall survive, and remain operative and in full force and effect
regardless of, the termination of this Agreement. Upon any such termination of
the security interests or release of Collateral, the Secured Party will, at the
Pledgor's expense, execute and deliver to the Pledgor such documents as the
Pledgor shall reasonably request to evidence the termination of the security
interests in the Collateral.
-12-
SECTION 16. NOTICES. All notices, demands, requests and other
communications, if any, required under this Agreement shall be given in the
manner set forth in the Loan Agreement. This Agreement does not require that
Secured Party give Pledgor any notice, demand, or request and this Section 16
shall not be construed to create such a requirement.
SECTION 17. FURTHER ASSURANCES. The Pledgor agrees to do such
further acts and things, and to execute and deliver such additional conveyances,
stock powers, proxies, assignments, agreements, financing statements and other
recordings, and instruments, as the Secured Party may at any time request in
connection with the administration and enforcement of this Agreement or with
respect to the Collateral or any part thereof or in order better to assure and
confer unto the Secured Party its rights, powers and remedies hereunder.
SECTION 18. SUCCESSORS AND ASSIGNS. In the event of assignment of
all or a portion of any of the indebtedness under the Loan Agreement by the
Secured Party, the rights of or on behalf of the Secured Party hereunder, to the
extent applicable to the indebtedness so assigned, shall be transferred with
such indebtedness. This Agreement is binding on the Pledgor and its heirs, legal
representatives and successors, but none of them shall be permitted to assign
this Agreement, any of its obligations hereunder or any interest herein or in
the Collateral, or any part thereof, or otherwise pledge, encumber or grant any
option with respect to the Collateral, or any part thereof, or any cash or
property held by the Secured Party as Collateral under this Agreement except as
expressly permitted by this Agreement or the Loan Agreement.
SECTION 19. CHANGES IN WRITING. Neither this Agreement nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only by a statement or instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought. Any
waiver shall be effective only in the specific instance and for the specific
purpose for which made or given.
SECTION 20. APPLICABLE LAW. This Agreement shall be construed in
accordance with and governed by the law of the State of Florida.
SECTION 21. JUDICIAL PROCEEDINGS Pledgor irrevocably and
unconditionally: (a) agrees that any suit, action, or other legal proceeding
arising out of or relating to this Agreement may be brought, at the option of
the Secured Party, in a court of record of the State of Florida in Broward
County, in the United States District Court for the Southern District of
Florida, or in any other court of competent jurisdiction; (b) consents to the
jurisdiction of each such court in any such suit, action, or proceeding; (c)
waives any objection which it may have to the laying of venue of any such suit,
action, or proceeding in any of such courts; and (d) agrees that service of any
court paper may be effected on Pledgor by mail, addressed and mailed as provided
in Section 16 hereof or in such other manner as may be provided under applicable
laws or court rules in said State. Pledgor hereby irrevocably appoints Xxxx X.
Xxxxxx, Esq., whose address is Two Executive Court, 0000 Xxxxxxxxx Xxxx., Xxxxx
000, Xxxx Xxxxx, Xxxxxxx 00000, as agent for the service of process for the
purposes of any purported controversy or cause of action arising out of this
Agreement or any related
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instrument.
SECTION 22. SEVERABILITY. Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof in such
jurisdiction, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
SECTION 23. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall constitute an original, but all of
which, when taken together, shall constitute but one instrument. This Agreement
shall be effective when a counterpart bearing the signature of the Pledgor shall
have been delivered to the Secured Party.
SECTION 24. HEADINGS. Section headings used herein are for
convenience only and are not to affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 25. IMMUNITIES OF SECURED PARTY. The Secured Party's
performance of its duties hereunder shall in all respects be subject to and
governed by the Loan Agreement. Nothing contained herein shall be construed to
enlarge the degree of responsibility or discretion or the duty of care to be
exercised by the Secured Party beyond those expressly set forth in the Loan
Agreement.
SECTION 26. WAIVER OF TRIAL BY JURY. SECURED PARTY AND PLEDGOR
HEREBY KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT
EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING OR
COUNTERCLAIM BASED ON THIS AGREEMENT, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION
WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR SECURED PARTY ACCEPTING THIS AGREEMENT FROM PLEDGOR AND
FOR PLEDGOR GIVING THIS AGREEMENT TO SECURED PARTY.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
PLEDGOR:
TRANSEASTERN PROPERTIES OF SOUTH
FLORIDA, INC., a Florida corporation
By:
Name:
Title: President
AMRESCO FUNDING CORPORATION, as
Secured Party
By_________________________________
Name:
Title:
SCHEDULE 1 TO THE
PLEDGE AGREEMENT
PLEDGED SECURITIES
==========================================================================================================
ISSUER SHARES PLEDGED CERTIFICATE NUMBER(S) PLEDGOR
----------------------------------------------------------------------------------------------------------
Transeastern Pembroke Villages, Inc.
==========================================================================================================
Record and Return To:
Xxxx X. Xxxxxx, Esquire
Two Executive Court
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
THIS MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the
"Mortgage"), made as of the 29th day of March, 1996 between TRANSEASTERN
PEMBROKE VILLAGES, INC., a Florida corporation (the "Mortgagor"), as mortgagor
and debtor, whose principal place of business is 0000 Xxxxxxxxxx Xxxxx, 0xx
Xxxxx, Xxxxx Xxxxxxx, Xxxxxxx 00000, and AMRESCO FUNDING CORPORATION, a Delaware
corporation (the "Mortgagee"), as mortgagee and secured party, whose address is
0000 Xxxxxxx Xxxxxxx Xxxxxxx, Xxxxxx Xxxxx 00000.
ARTICLE I
DEFINITIONS, HEADINGS, RULES OF
CONSTRUCTION AND SECURITY AGREEMENT
1.1 DEFINITIONS. As used in this Mortgage and in the exhibits
attached hereto, the following terms shall have the following meanings herein
specified, such definition to be applicable equally to the singular and plural
forms of such terms (unless otherwise defined herein all capitalized terms used
in this Mortgage shall have the meanings assigned to the same in this Loan
Agreement (as defined below)):
(a) COMMITMENT: The commitment letter from Mortgagee
to Transeastern Properties of South Florida, Inc. dated March 15, 1996 together
with all amendments thereto.
(b) DEFAULT RATE: The Default Rate as defined in the
Note.
(c) EVENTS OF DEFAULT: Those events described in
Article VI hereof.
(d) FIXTURES: All property and equipment now owned or
hereafter acquired by Mortgagor and now or hereafter located under, on, or above
the Land, whether or not permanently affixed, which, to the fullest extent
permitted by applicable law in effect from time to time, shall be deemed
fixtures and a part of the Land.
(e) FUTURE ADVANCES: Any loan of money from Mortgagee
to Mortgagor made within twenty (20) years from the date hereof. The total
amount of such loan or loans may decrease or increase from time to time, but the
total unpaid aggregate balance secured by this Mortgage at any one time shall
not exceed $6,000,000 plus interest thereon, and any disbursements made for the
payment of the Impositions (whether taxes, levies or otherwise), insurance, or
other liens on the Mortgaged Property, with interest on such disbursements. The
Mortgagee has no obligation, whatsoever, to make a Future Advance.
(f) GOVERNMENTAL AUTHORITY: Any (domestic or foreign)
federal, state, county, municipal or other governmental department, entity,
authority, commission, board, bureau, court, agency or any instrumentality of
any of them.
(g) GOVERNMENTAL REQUIREMENT: Any law, enactment,
statute, code, ordinance, order, rule, regulation, judgment, decree, writ,
injunction, franchise, permit, certificate, license, authorization, or other
direction or requirement of any Governmental Authority now existing or hereafter
enacted, adopted, promulgated, entered, or issued applicable to Mortgagee,
Mortgagor or the Mortgaged Property, including, without limitation, any
Environmental Law.
(h) GUARANTOR: Jointly and severally any and all
Persons now or hereafter guarantying the Obligations or any part thereof
(collectively referred to as the "Guarantor").
(i) GUARANTY: Any guaranty of payment, performance or
completion executed by any Guarantor in favor of Mortgagee with respect to the
Obligations.
(j) IMPOSITIONS: All (i) real estate and personal
property taxes and other taxes and assessments, public or private; utility rates
and charges including those for water and sewer; all other governmental and
non-governmental charges and any interest or costs or penalties with respect to
any of the foregoing; and charges for any public improvement, easement or
agreement maintained for the benefit of or involving the Mortgaged Property,
general and special, ordinary and extraordinary, foreseen and unforeseen, of any
kind and nature whatsoever that at any time prior to or after the execution of
this Mortgage may be assessed, levied or imposed upon the Mortgaged Property or
the Rent or income received therefrom, or any use or occupancy thereof, (ii)
other taxes, assessments, fees and governmental and non-governmental charges
levied, imposed or assessed upon or against Mortgagor or any of its properties
and (iii) taxes levied or assessed upon this Mortgage, the Note, and the other
Obligations, or any of them.
(k) IMPROVEMENTS: All buildings, structures,
appurtenances and improvements, including all additions thereto and replacements
and extensions thereof, now constructed or hereafter to be constructed under, on
or above the Land, which term includes any part thereof.
(l) LAND: The real property described in Exhibit "A"
attached hereto and made a part hereof, together with all rights, privileges,
tenements, hereditaments, rights-of-way, easements, appendages, projections,
appurtenances, water rights including riparian and littoral rights, streets,
ways, alleys, and strips and gores of land now or hereafter in anyway belonging,
adjoining, crossing or pertaining to the Land.
(m) LEASES: Any and all leases, subleases, licenses,
concessions, or grants of other possessory interests, together with the security
therefor, now or hereafter in force, oral or written, covering or affecting the
Mortgaged Property or any part thereof.
(n) LOAN: $3,000,000.00 as evidenced by the Note.
(o) LOAN AGREEMENT: The loan agreement of even date
herewith, between Mortgagor and Mortgagee.
(p) LOAN DOCUMENTS: Those documents or instruments
executed, submitted, or to be submitted by Mortgagor or others in connection
with the Loan, including but not limited to the: (i) Note, (ii) Mortgage, (iii)
Guaranty, (iv) Loan Agreement, (v) financing statements, (vi) Environmental
Indemnity Agreement, and (vii) any other document or instrument executed by
Mortgagor or Guarantor in connection with the Loan.
(q) MORTGAGED PROPERTY: The Land, Improvements,
Fixtures, Leases, Rents and Personal Property together with:
(i) all judgments, awards of
damages and settlements hereafter made resulting from condemnation proceedings
or the taking of the Mortgaged Property or any part thereof under the power of
eminent domain, or by agreement in lieu thereof, or for any damage thereto
caused by any governmental action (whether by such taking or otherwise), such as
without limitation, any award for change of grade of streets;
(ii) all judgments, awards and
settlements hereafter made, and all insurance proceeds hereafter paid for any
damage to the Mortgaged Property, and all unearned insurance premiums on any
insurance policies maintained by the Mortgagor pursuant to this Mortgage;
-2-
(iii) all awards and refunds
hereafter made with respect to any Imposition; and
(iv) the estate, right, title,
interest, privilege, claim or demand whatsoever of Mortgagor, now or hereafter,
either at law or in equity, in and to the Mortgaged Property.
The term Mortgaged Property includes any part of the foregoing property
described as Mortgaged Property, and all proceeds, products, replacements,
improvements, betterments, extensions, additions, substitutions, renewals,
accessories, and appurtenances thereto and thereof.
(r) MORTGAGEE: AMRESCO Funding Corporation a Delaware
corporation, its successors and assigns.
(s) MORTGAGOR: TRANSEASTERN VILLAGES, INC., a Florida
corporation.
(t) NOTE: The promissory note dated of even date
herewith from Mortgagor to Mortgagee, in the amount of $3,000,000.00 and by this
reference made a part hereof to the same extent as though set out in full
herein, and any other note given to Mortgagee evidencing a Future Advance as any
of said notes may from time to time hereafter be modified, amended, extended or
renewed.
(u) OBLIGATIONS:
(i) Any and all of the
indebtedness, liabilities, covenants, promises, agreements, terms, conditions,
and other obligations of every nature whatsoever, whether joint or several,
direct or indirect, absolute or contingent, liquidated or unliquidated, of
Mortgagor and Guarantor, or any of them, to Mortgagee, evidenced by, secured by,
under and as set forth in the Note, this Mortgage, the Guaranty or the other
Loan Documents, excluding the Contingent Returns and other amounts secured by
the Contingent Mortgage;
(ii) Any and all other indebtedness,
liabilities and obligations of every nature whatsoever (whether or not otherwise
secured or to be secured) of Mortgagor (whether as maker, endorser, surety,
guarantor or otherwise) to Mortgagee or any of Mortgagee's affiliates, whether
now existing or hereafter created or arising or now owned or howsoever hereafter
acquired by Mortgagee or any of the Mortgagee's affiliates, whether such
indebtedness, liabilities and obligations are or will be joint or several,
direct or indirect, absolute or contingent, liquidated or unliquidated, matured
or unmatured, including, but not limited to, any letter of credit issued by
Mortgagee for the account of Mortgagor; together with all expenses, attorneys'
fees, paralegals' fees and legal assistants' fees incurred by Mortgagee in the
preparation, execution, perfection or enforcement of any document relating to
any of the foregoing, excluding the Contingent Returns and other amounts secured
by the Contingent Mortgage; and
(iii) Any and all Future Advances.
(v) PERMITTED TITLE EXCEPTIONS: Those matters, if
any, described in Schedule B to the title insurance policy insuring Mortgagee's
interest in this Mortgage.
(w) PERSON: Any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization, government, or agency or political subdivision thereof, or any
other form of entity.
(x) PERSONAL PROPERTY: All of the following property
of Mortgagor whether now owned or existing, or hereafter acquired or arising,
whether located in, on, pertaining to, used or intended to be used in connection
with or resulting or created from the ownership, development, management, or
operation of the Land:
(i) all Improvements (to the extent
same are not deemed to be real property) and landscaping;
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(ii) all Fixtures (to the extent
same are not deemed to be real property) and goods to become Fixtures;
(iii) all accounts, accounts
receivable, other receivables, contract rights, chattel paper, instruments and
documents; any other obligations or indebtedness owed to Mortgagor from whatever
source arising; all rights of Mortgagor to receive any performance or any
payments in money or kind; all guaranties of the foregoing and security
therefor; all of the right, title and interest of Mortgagor in and with respect
to the goods, services, or other property that gave rise to or that secure any
of the foregoing, and all rights of Mortgagor as an unpaid seller of goods and
services, including, but not limited to, the rights to stoppage in transit,
replevin, reclamation, and resale;
(iv) all goods, including without
limitation, all machinery, equipment, furniture, furnishings, building supplies
and materials, appliances, business machines, tools, aircraft and motor vehicles
of every kind and description, and all warranties and guaranties for any of the
foregoing;
(v) all inventory, merchandise, raw
materials, parts, supplies, work-in-process and finished products intended for
sale, of every kind and description, in the custody or possession, actual or
constructive, of Mortgagor including such inventory as is temporarily out of the
custody or possession of Mortgagor, and any returns upon any accounts and other
proceeds resulting from the sale or disposition of any of the foregoing,
including, without limitation, raw materials, work-in-process, and finished
goods;
(vi) all general intangibles,
including without limitation, corporate or other business records and books,
computer records whether on tape, disc or otherwise stored, blueprints, surveys,
architectural or engineering drawings, plans and specifications, trademarks,
tradenames, goodwill, telephone numbers, licenses, governmental approvals,
franchises, permits, payment and performance bonds, tax refund claims, and
agreements with utility companies, together with any deposits, prepaid fees and
charges paid thereon;
(vii) all Leases and Rents (to the
extent same are not deemed to be real property);
(viii) all judgments, awards of
damages and settlements from any condemnation or eminent domain proceedings
regarding the Land, the Improvements or any of the Mortgaged Property;
(ix) all insurance policies required
by this Mortgage, the unearned premiums therefor and all loss proceeds thereof;
(x) all other personal property,
including without limitation, management contracts, construction contracts,
architectural contracts, service contracts, engineering contracts, advertising
contracts, contracts for purchase and sale of any of the Mortgaged Property,
purchase orders, equipment leases, monies in escrow accounts, reservation
agreements, prepaid expenses, deposits and down payments with respect to the
sale or rental of any of the Mortgaged Property, options and agreements with
respect to additional real property for use or development of the Mortgaged
Property, end-loan commitments, abstracts of title, all brochures, advertising
materials, condominium documents and prospectuses; and
(xi) all proceeds, products,
replacements, additions, betterments, extensions, improvements, substitutions,
renewals and accessions of any and all of the foregoing.
(y) RENTS: All of the rents, royalties, issues,
revenues, income, profits, security deposits and other benefits whether past
due, or now or hereafter arising from the Mortgaged Property and the occupancy,
use and enjoyment thereof.
(z) SENIOR MORTGAGE: That certain Mortgage and
Security Agreement of even date herewith from Mortgagor, as mortgagor, in favor
of Chase Federal Bank, as mortgagee, to be recorded in the Public Records of
Broward County, Florida, together with the note secured thereby.
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1.2 RULES OF CONSTRUCTION. The use of any gender shall include
all other genders. The singular shall include the plural and the plural shall
include the singular. The word "or" is not exclusive and the use of the word
"and" may be conjunctive or disjunctive in the sole and absolute discretion of
Mortgagee. The captions of Articles, Sections and Subsections of this Mortgage
are for convenient reference only, and shall not affect the construction or
interpretation of any of the terms and provisions set forth herein.
1.3 SECURITY AGREEMENT. This Mortgage constitutes a "Security
Agreement" within the meaning of and shall create a security interest under the
Uniform Commercial Code-Secured Transactions as adopted by the State of Florida,
with respect to the Fixtures, Leases, Rents and Personal Property. A carbon,
photographic or other reproduction of this Mortgage or of any financing
statement shall be sufficient as a financing statement. The debtor's principal
place of business and the secured party's address is set forth in the
introduction to this Mortgage.
ARTICLE II
GRANT
2.1 GRANT. For good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and to secure the payment,
observance, performance and discharge of the Obligations, Mortgagor does by
these presents give, transfer, grant, bargain, sell, alien, remise, release,
assign, mortgage, hypothecate, deposit, pledge, set over, confirm, convey and
warrant unto Mortgagee all estate, right, title and interest of Mortgagor in and
to the Mortgaged Property, whether now owned or held or hereafter acquired by
Mortgagor, subject, however, to the Permitted Title Exceptions and the rights of
the holder of the Senior Mortgage, to have and to hold the Mortgaged Property
unto Mortgagee, its successors and assigns forever.
2.2 CONDITION OF GRANT. Subject to the provisions of this
Mortgage, the condition of these presents is such that if Mortgagor shall pay,
observe, perform and discharge the Obligations, or cause same to be paid,
observed, performed and discharged in strict accordance with the terms thereof,
then this Mortgage and the estates, interests, rights and assignments granted
hereby shall be null and void, but otherwise shall remain in full force and
effect.
2.3 SUBROGATION. The Mortgagee is hereby subrogated to the
claims and liens of all parties whose claims or liens are fully or partially
discharged or paid with the proceeds of the indebtedness secured by this
Mortgage notwithstanding that such claims or liens may have been canceled and
satisfied of record.
ARTICLE III
ASSIGNMENT OF LEASES AND RENTS
3.1 ASSIGNMENT. The Mortgagor does hereby absolutely and
unconditionally assign and transfer to Mortgagee all of Mortgagor's estate,
right, title and interest in and to the Leases and Rents, to have and to hold
the Leases and Rents unto Mortgagee, its successors and assigns forever. From
time to time, upon request of Mortgagee, Mortgagor shall give further evidence
of this assignment to Mortgagee by executing and delivering to Mortgagee
specific assignments of the Leases and Rents, in form and content approved by
Mortgagee. All such specific assignments shall be of the same dignity and
priority as this Mortgage. From time to time, upon request of Mortgagee,
Mortgagor shall also execute and deliver to Mortgagee any notification to
tenants or other document reasonably required by Mortgagee.
3.2 PAYMENT OF RENTS TO MORTGAGOR, AS TRUSTEE, UNTIL DEFAULT.
So long as no Event of Default has occurred, Mortgagor may, as trustee for the
use and benefit of Mortgagee, collect, receive and accept the Rents as they
become due and payable (but in no event for more than two (2) months in
advance); provided, however, that if the Rents exceed the payments due under the
Note, the Mortgagor may use such excess, first, for the operation and benefit of
the Mortgaged Property and, second, for the general benefit of the Mortgagor.
Upon the occurrence of an Event of Default Mortgagee may, at its option, remove
the Mortgagor as trustee for the collection of the Rents and appoint any other
person including, but not limited to, itself as a substitute trustee to collect,
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receive, accept and use all such Rents in payment of the Obligations, in such
order as Mortgagee shall elect in its sole and absolute discretion, whether or
not Mortgagee takes possession of the Mortgaged Property. Mortgagor hereby
directs each of the respective tenants under the Leases, and any rental agent,
to pay to Mortgagee all such Rents, as may now be due or shall hereafter become
due, upon demand for payment thereof by Mortgagee without any obligation on the
part of any such tenant or rental agent to determine whether or not an Event of
Default has in fact occurred. Upon an Event of Default, the permission hereby
given to Mortgagor to collect, receive and accept such Rents as trustee shall
terminate and such permission shall not be reinstated upon a cure of the Event
of Default without Mortgagee's specific written consent. Further, upon the event
of a Default, Mortgagor shall immediately turn over to Mortgagee all Rents in
the actual or constructive possession of Mortgagor, its affiliates, contractors,
or its agents, together with an accounting thereof. Exercise of Mortgagee's
rights under this Section, and the application of any such Rents to the
Obligations, shall not cure or waive any default or notice of default hct done
pursuant hereto, but shall be cumulative and in addition to all other rights and
remedies of Mortgagee.
3.3 PERFORMANCE UNDER LEASES. Mortgagor covenants that it
shall, at its sole cost and expense, (a) duly and punctually perform and
discharge, or cause to be performed and discharged, all of the obligations and
undertakings of Mortgagor or its agents under the Leases, (b) use its best
efforts to enforce or secure, or cause to be enforced or secured, the
performance of each and every obligation and undertaking of the respective
tenants under the Leases, (c) promptly notify Mortgagee if Mortgagor receives
any notice from a tenant claiming that Mortgagor is in default under a Lease and
(d) appear in and defend any action or proceeding arising under or in any manner
connected with the Leases.
3.4 LEASES IN GOOD STANDING. All Leases, if any, are in full
force and effect, and there are no defaults thereunder or any defenses or
offsets thereto on the part of any tenant.
3.5 PROVISIONS OF LEASES. All Leases shall be inferior and
subordinate to the lien of this Mortgage and the terms of each Lease shall so
expressly provide. Mortgagor covenants that all Leases hereafter entered into by
Mortgagor shall be in form and substance satisfactory to Mortgagee.
3.6 TERMINATION OR MODIFICATION. Mortgagor covenants that it
shall not, without the prior express written consent of Mortgagee, enter into a
Lease, or materially modify, terminate, or consent to the cancellation or
surrender of any Lease, or permit any tenant under any Lease to assign or sublet
its rights thereunder.
3.7 NO OBLIGATION OF MORTGAGEE. This Assignment shall not be
deemed or construed to constitute Mortgagee as a mortgagee in possession of the
Mortgaged Property nor shall it obligate Mortgagee to take any action or to
incur expenses or perform or discharge any obligation, duty or liability of
Mortgagor under any Lease.
3.8 CUMULATIVE REMEDIES. Each and every right, remedy and
power granted to Mortgagee by this Article shall be cumulative and in addition
to every other right, remedy and power given by the Loan Documents and now or
hereafter existing in equity, at law, or by virtue of statute or otherwise. The
failure of Mortgagee to avail itself of any of its rights, remedies and powers
shall not be construed or deemed to be a waiver thereof.
3.9 NOTIFICATION OF MORTGAGEE'S RIGHTS. Mortgagee shall have
the right, but not the obligation, at any time and from time to time, to notify
any tenant under any Lease of the rights of Mortgagee as provided in this
Article III and Mortgagor, upon demand from Mortgagee, shall confirm to such
tenant the existence of such rights.
3.10 LEASING COMMISSION. Mortgagor covenants that every
agreement to pay leasing commissions with respect to the leasing of space in the
Mortgaged Property, or any part thereof, are and shall be subject, subordinate
and inferior to the right of Mortgagee, so that in the event Mortgagee acquires
title to the Mortgaged Property either at a foreclosure sale or by other means,
Mortgagee will be exonerated and discharged from all liabilities for the payment
of any such commissions or compensations.
3.11 ATTORNEY-IN-FACT. To further effectuate Mortgagee's
rights under this Article III, Mortgagor hereby constitutes and irrevocably
appoints Mortgagee its true and lawful attorney-in-fact, which appointment is
coupled with an interest, with full power of substitution, and empowers said
attorney or attorneys in the name of Mortgagor, but at the option of said
attorney-in-fact, to (i) collect and receive the Rents and to issue receipts
therefor, (ii) to make, enter into, extend, modify, amend, terminate,
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consent to the cancellation or surrender of any Lease, or permit any tenant to
assign or sublet its rights thereunder, (iii) to execute, acknowledge and
deliver any and all instruments and documents that Mortgagee may deem necessary
or proper to implement its rights as provided in this Article III, and (iv) to
perform and discharge any and all obligations and undertakings of Mortgagor
under any Lease.
3.12 OTHER ASSIGNMENTS. Mortgagor shall not further assign or
transfer the Leases or Rents except in favor of (i) Mortgagee as provided in
this Article III, and (ii) the holder of the Senior Mortgage and shall not
create or permit to be created or to remain, any mortgage, pledge, lien,
encumbrance, claim, or charge on the Leases or Rents except pursuant to the
Senior Mortgage, if any. Any transaction prohibited under this Section shall be
null and void.
3.13 SECTION 697.07 OF THE FLORIDA STATUTES. The assignments
of Leases and Rents contained in this Mortgage are intended to provide Mortgagee
with all the rights and remedies of mortgagees pursuant to Section 697.07 of the
Florida Statutes (hereinafter "Section 697.07"), as may be amended from time to
time. However, in no event shall this reference diminish, alter, impair, or
affect any other rights and remedies of Mortgagee, including but not limited to,
the appointment of a receiver as provided in Section 6.1(e) herein, nor shall
any provision in this Section 3.13 diminish, alter, impair or affect any rights
or powers of the receiver in law or equity or as set forth in Section 6.1(e)
herein. In addition, this assignment shall be fully operative without regard to
value of the Mortgaged Property or without regard to the adequacy of the
Mortgaged Property to serve as security for the obligations owed by Mortgagor to
Mortgagee, and shall be in addition to any rights arising under Section 697.07.
Further, except for the notices required hereunder, if any, Mortgagor waives any
notice of default or demand for turnover of rents by Mortgagee, together with
any rights under Section 697.07 to apply to a court to deposit the Rents into
the registry of the court or such other depository as the court may designate.
ARTICLE IV
AFFIRMATIVE COVENANTS
4.1 PAYMENT AND PERFORMANCE. Mortgagor shall promptly pay and
punctually perform, or shall cause to be promptly paid and punctually performed,
all of the Obligations as and when due and payable.
4.2 RESTORATION FOLLOWING CASUALTY.
(a) If all or any part of the Mortgaged Property
shall be damaged or destroyed by a casualty, Mortgagor shall immediately give
written notice thereof to Mortgagee and the appropriate insurer, and Mortgagee
is authorized and empowered (but not obligated or required) to make proof of
loss and to settle, adjust or compromise any claims for loss, damage or
destruction under any policies of insurance required under this Mortgage.
Subject to the rights of the holder of the Senior Mortgage, all proceeds of
insurance shall be paid to Mortgagee and shall be applied first to the payment
of all costs and expenses (including, without limitation, reasonable attorneys'
fees and expenses) incurred by Mortgagee in obtaining such proceeds, and second,
at the option of Mortgagee, either to the payment of the Obligations whether or
not due, in such order as Mortgagee may elect, or to the restoration, repair, or
replacement of the Mortgaged Property. If Mortgagee elects to apply the
insurance proceeds to the restoration, repair or replacement of the Mortgaged
Property, such proceeds shall be disbursed to Mortgagor as work progresses
pursuant to a construction and disbursing agreement in form and content
satisfactory to Mortgagee in its sole discretion, and Mortgagor shall promptly
and diligently, regardless of whether there shall be sufficient insurance
proceeds therefor, restore, repair and rebuild the Mortgaged Property to the
equivalent of its condition immediately prior to the casualty. During the period
of restoration and repair, Mortgagor shall continue to duly and promptly pay,
perform, observe and comply with all of the Obligations. The election by
Mortgagee to apply the insurance proceeds to the restoration, repair or
replacement of the Mortgaged Property shall not affect the lien of this Mortgage
or affect or reduce the Obligations.
(b) If all or any of the Mortgaged Property shall be
damaged or destroyed by a casualty not covered by insurance, or, if so covered,
the insurer fails or refuses to pay the claim within thirty (30) days following
the filing thereof, Mortgagor shall immediately give written notice thereof to
Mortgagee, and Mortgagor shall promptly and diligently, at Mortgagor's sole cost
and expense, restore, repair and rebuild the Mortgaged Property to the
equivalent of its condition immediately prior to the casualty.
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During the period of restoration and repair, Mortgagor shall continue to duly
and promptly pay, perform, observe and comply with all of the Obligations.
(c) If any work required to be performed under
Subsections (a) or (b) above, or both, shall involve an estimated expenditure of
more than $25,000.00, no such work shall be undertaken until plans and
specifications therefor, prepared by an architect satisfactory to Mortgagee,
have been submitted to and approved by Mortgagee.
4.3 CONDEMNATION.
(a) Mortgagor shall immediately notify Mortgagee upon
obtaining any knowledge of the institution of any proceedings for the
condemnation of the Mortgaged Property or any part thereof.
(b) If all or any part of the Mortgaged Property
shall be damaged or taken through condemnation (which term when used in this
Mortgage shall include any damage or taking by any Governmental Authority and
any transfer by private sale in lieu thereof, either temporarily or
permanently), Mortgagee at its option may declare all of the unpaid Obligations
to be immediately due and payable, and upon ten (10) days written notice from
Mortgagee to Mortgagor all such Obligations shall immediately become due and
payable as fully and to the same effect as if such date were the date originally
specified for the final payment or maturity thereof. Subject to the rights of
the holder of the Senior Mortgage, the Mortgagee shall be entitled to all
compensation, awards and other payments resulting from such condemnation and is
hereby authorized, at its option, to commence, appear in and prosecute, in its
own or in Mortgagor's name, any action or proceeding relating to any
condemnation, and to settle or compromise any claim in connection therewith. All
such compensation, awards, damages, claims, rights of action and proceeds and
the right thereto are hereby assigned by Mortgagor to Mortgagee and shall, be
applied first to the payment of all costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) incurred by Mortgagee in
connection with any action or proceeding under this Section 4.3, and second, at
the option of Mortgagee, either to the payment of the Obligations whether or not
due, in such order as Mortgagee may elect, or to the restoration, repair or
alteration of the Mortgaged Property. If Mortgagee elects to apply the
condemnation awards to the restoration, repair or alteration of the Mortgaged
Property, such awards shall be disbursed to Mortgagor as work progresses
pursuant to a construction and disbursing agreement in form and content
satisfactory to Mortgagee in its sole discretion, and Mortgagor shall promptly
and diligently, regardless of whether there shall be sufficient condemnation
awards therefor, restore, repair and alter the Mortgaged Property in a manner
satisfactory to Mortgagee. During the period of restoration, repair and
alteration, the Mortgagor shall continue to duly and promptly pay, perform,
observe and comply with all of the Obligations. The election by Mortgagee to
apply the condemnation awards to the restoration, repair or alteration of the
Mortgaged Property shall not affect the lien of this Mortgage or affect or
reduce the Obligations. If any restoration, repair or alteration of the
Mortgaged Property shall involve an estimated expenditure of more than
$25,000.00, same shall not be commenced until plans and specifications therefor,
prepared by an architect satisfactory to Mortgagee, have been submitted to and
approved by Mortgagee.
4.4 MORTGAGOR'S RIGHT TO REBUILD THE MORTGAGED PROPERTY.
(a) Notwithstanding the provisions of Sections 4.2
and 4.3 hereof to the contrary, in the event that any portion or portions of the
Mortgaged Property are damaged or destroyed by fire or by any other casualty, or
are the subject of a "de minimis" (for purposes of this Section 4.4, the term
"de minimis" shall mean an amount, as determined by Mortgagee in its sole
discretion, which does not adversely affect the actual use of the Improvements)
condemnation, and such damage, destruction, or condemnation results in the need
for repair, rebuilding, or restoration work to be performed on the Mortgaged
Property (such repair, rebuilding, or restoration is referred to herein as the
"Work"), Mortgagee shall allow Mortgagor to use the proceeds of all insurance
policies, judgments, settlements, or awards collected with respect to such
damage, destruction, or condemnation (except such amounts as are attributable to
a loss of rents) (said net amount is defined herein as the "Reconstruction
Funds"), to perform the Work, so long as the following conditions have been met:
(i) No Event of Default exists
hereunder, under the Note, or under any other of the Loan Documents;
(ii) Mortgagor shall have delivered
evidence satisfactory to Mortgagee that the Improvements may be reconstructed in
accordance with all applicable zoning and building codes, and all rules,
regulations, and
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ordinances of Governmental Authorities and that, upon completion of the Work,
the condition of the Improvements will be at least equal in value and general
utility to that which existed immediately prior to such casualty or
condemnation;
(iii) Mortgagor shall have delivered
evidence satisfactory to Mortgagee that sufficient funds, including the
Reconstruction Funds, are available to perform the Work and that the Work is
capable of completion prior to the then effective maturity date of the Note; and
(iv) Mortgagor shall have delivered
evidence satisfactory to Mortgagee that business interruption or income
insurance proceeds payable to Mortgagor as a result of the damage or destruction
or income from the Improvements, or that sources other than the Reconstruction
Funds are sufficient to cover payments of debt service, costs, and expenses on
the Note during the period the Work is to be performed. The balance of any
proceeds, assuming income from the Improvements, business interruption or income
insurance, and other sources equals or exceeds debt service under the Note plus
monthly expenses of the Mortgaged Property, shall be paid to Mortgagor.
(v) Mortgagee shall be satisfied,
in its sole discretion, that the work can be completed and the Improvements can
be ready for occupancy at least three (3) months prior to the maturity of the
Loan;
(vi) All parties having existing or
expected possessory interest in the Property agree in a manner satisfactory to
Mortgagee that they will continue or extend their intent and arrangements for
the contract terms then in effect following the work;
(vii) All parties having operating,
management, or franchise intent in, and arrangement concerning the Property
agree that they will continue their interest and arrangements for the contract
terms then in effect following the work;
(viii) Mortgagee shall be satisfied
that it will not incur any liability to any other person as a result of such use
or release of insurance proceeds; and
(ix) The holder of the Senior
Mortgage agrees in writing to the terms of this Section 4.4.
(b) In the event that the conditions set forth in
Section 4.4(a) above are satisfied, Mortgagee shall make the Reconstruction
Funds available to Mortgagor for the Work only under the following procedures,
terms, and conditions:
(i) Mortgagor shall execute and
deliver to Mortgagee a copy of a contract with a licensed contractor acceptable
to Mortgagee setting forth a fixed price for the Work and a completion date
acceptable to Mortgagee;
(ii) Mortgagor shall demonstrate to
Mortgagee that the Reconstruction Funds are at least equal to the fixed price of
the Work as set forth in said contract or shall deposit with Mortgagee funds in
the amount by which such fixed price exceeds the Reconstruction Funds;
(iii) The Work shall be supervised by
an architect or engineer and performed in accordance with plans and
specifications prepared by such architect or engineer and approved by Mortgagee;
(iv) The Reconstruction Funds, plus
any additional funds deposited by Mortgagor, shall be received and held by
Mortgagee and disbursed in accordance with the terms and conditions used by
Mortgagee in connection with the a loan disbursing agreement to be prepared by
Mortgagee and Mortgagor's expense, and Mortgagor shall reimburse Mortgagee for
costs and expenses incurred in connection with such disbursements;
(v) Upon completion of and final
payment for the Work, any remaining Reconstruction Funds shall, at the option of
Mortgagee, be applied to the Obligations in such order as Mortgagee shall elect
or paid
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over to Mortgagor; provided, however, that in either event, any remaining
additional funds deposited by Mortgagor for excess costs shall be refunded to
Mortgagor; and
(vi) Mortgagor shall otherwise
comply with the terms and conditions of this Mortgage and the other Loan
Documents during the performance of the Work.
(c) In the event any one or more of the conditions
set forth in Subsection 4.4(a) and 4.4(b) above is not satisfied, Mortgagee may
elect, in its sole discretion, to apply the Reconstruction Funds against the
balance of the Obligations, whether or not due, in such manner as Mortgagee
shall elect.
(d) If an Event of Default shall occur hereunder, or
if Mortgagor shall fail diligently to pursue and complete the Work, Mortgagee
may, in its sole discretion, apply any undisbursed Reconstruction Funds and any
of Mortgagor's deposits against the balance of the Obligations, whether or not
due, in such manner as Mortgagee shall elect.
4.5 FURTHER ASSURANCES. Mortgagor, at its sole expense, upon
the request of Mortgagee, shall execute, acknowledge and deliver such further
instruments and do such further acts as may, in the opinion of the Mortgagee, be
necessary, desirable, or proper to carry out more effectively the purpose of
this Mortgage and to subject to the lien hereof any property intended by the
terms hereof to be covered hereby, including, without limitation, any proceeds,
renewals, additions, substitutions, replacements, products, betterments,
accessions and appurtenances thereto and thereof.
4.6 FINANCING STATEMENTS. Mortgagor shall execute and deliver
to Mortgagee, in form and substance satisfactory to Mortgagee, such financing
statements, continuation statements, and such further assurances as Mortgagee
may from time to time consider reasonably necessary to create, perfect, preserve
and maintain in full force and effect Mortgagee's lien upon the Fixtures,
Leases, Rents and Personal Property; and, Mortgagee, at the expense of
Mortgagor, may cause such statements and assurances to be recorded and
rerecorded, filed and re-filed, in the name of Mortgagor, and Mortgagor hereby
constitutes and irrevocably appoints Mortgagee its true and lawful
attorney-in-fact, which appointment is coupled with an interest, with full power
of substitution, and empowers said attorney or attorneys in the name of
Mortgagor, but at the option of said attorney-in-fact, to execute and file any
and all financing statements.
4.7 LOAN AGREEMENT. The Loan evidenced by the Note and secured
by this Mortgage is to be disbursed in accordance with the terms and provisions
of the Loan Agreement. The Note, this Mortgage and the Loan Agreement shall
always be taken and read together as constituting parts of one transaction. All
sums disbursed pursuant to the terms of the Loan Agreement shall be secured by
this Mortgage with the same priority as if advanced on the date hereof.
Mortgagor shall fully, duly and promptly discharge each and every of its
agreements contained in the Loan Agreement and comply with, abide by and perform
all of the provisions and conditions thereof.
ARTICLE V
EVENTS OF DEFAULT
5.1 EVENTS OF DEFAULT. An "Event of Default", as used in this
Mortgage, shall occur at any time or from time to time:
(a) FAILURE TO PAY. If any Obligation or any
installment thereof is not paid within ten (10) days as and when due and
payable;
(b) FAILURE TO PERFORM. If any Obligation [other than
an Obligation requiring the payment of money) is not duly and promptly performed
or is violated and such non-performance or violation is not curable, or if
curable continues for a period of thirty (30) days after written notice thereof
from Mortgagee to Mortgagor, provided, however, if such non-performance or
violation may not reasonably be cured within such thirty (30) day period, an
Event of Default shall not be deemed to have occurred
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so long as same shall be diligently and continuously endeavored to be cured.
Notwithstanding the foregoing, it shall be an Event of Default if such
non-performance or violation has not been cured within sixty (60) days after
notice thereof;
(c) DEFAULT UNDER LOAN DOCUMENTS. If any Event of
Default occurs under the Loan Agreement; or
(d) NOTICE LIMITING FUTURE ADVANCES. If Mortgagor,
pursuant to Florida Statutes 697.04(1)(b) as amended from time to time, files
for record a notice limiting the maximum amount which may be secured by this
Mortgage.
ARTICLE VI
RIGHTS AND REMEDIES
6.1 REMEDIES. If an Event of Default shall have occurred,
Mortgagee may, at its option, exercise any, some or all of the following
remedies, concurrently or consecutively.
(a) ACCELERATION. Mortgagee may declare all of the
unpaid Obligations, together with all accrued interest thereon, to be due and
payable without notice or demand which are hereby expressly waived, and upon
such declaration all such Obligations shall immediately become due and payable
as fully and to the same effect as if the date of such declaration were the date
originally specified for the full payment or maturity thereof.
(b) MORTGAGEE'S RIGHT TO ENTER AND TAKE POSSESSION,
OPERATE AND APPLY INCOME.
(i) Mortgagee may demand that
Mortgagor surrender the actual possession of the Mortgaged Property and upon
such demand, Mortgagor shall forthwith surrender same to Mortgagee and, to the
extent permitted by law, Mortgagee itself, or by such officers or agents as it
may appoint, may enter and take possession of all of the Mortgaged Property and
may exclude Mortgagor and its agents and employees wholly therefrom.
(ii) If Mortgagor shall for any
reason fail to surrender or deliver the Mortgaged Property or any part thereof
after Mortgagee's demand, Mortgagee may obtain a judgment or order conferring on
Mortgagee the right to immediate possession or requiring the Mortgagor to
deliver immediate possession to Mortgagee, to the entry of which judgment or
decree the Mortgagor hereby specifically consents.
(iii) Mortgagee may from time to
time: (A) continue and complete construction of, hold, store, use, operate,
manage and control the Mortgaged Property and conduct the business thereof; (B)
make all reasonably necessary maintenance, repairs, renewals, replacements,
additions, betterments and improvements thereto and thereon and purchase or
otherwise acquire additional Fixtures and Personal Property; (C) insure or keep
the Mortgaged Property insured; (D) exercise all the rights and powers of the
Mortgagor in its name or otherwise with respect to the same; and (E) enter into
agreements with others (including, without limitation, new Leases or amendments,
extensions, or cancellations to existing Leases) all as Mortgagee from time to
time may determine in its sole discretion. Mortgagor hereby constitutes and
irrevocably appoints Mortgagee its true and lawful attorney-in-fact, which
appointment is coupled with an interest, with full power of substitution, and
empowers said attorney or attorneys in the name of Mortgagor, but at the option
of said attorney-in-fact, to do any and all acts and execute any and all
agreements that Mortgagee may deem necessary or proper to implement and perform
any and all of the foregoing.
(iv) The Mortgagee may, with or
without taking possession of the Mortgaged Property as hereinabove provided,
collect and receive all the Rents therefrom, including those past due as well as
those accruing thereafter, and shall apply the monies so received first, to the
payment of all costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred by Mortgagee and its agents in connection
with the collection of same, whether or not in possession of the Mortgaged
Property, and second, in such order as Mortgagee may elect, to the payment of
the Obligations.
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(c) PROCEEDINGS TO RECOVER SUMS DUE.
(i) If any installment or part of
any Obligation shall fail to be paid when due, Mortgagee shall be entitled to
xxx for and to recover judgment against the Mortgagor for the amount so due and
unpaid together with all costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred by Mortgagee in connection
with such proceeding, together with interest thereon at the Default Rate from
the date incurred by Mortgagee. All such costs and expenses shall be secured by
this Mortgage and shall be due and payable by Mortgagor immediately.
(ii) If Mortgagor shall fail to pay
upon the Mortgagee's demand, after acceleration as provided in Subsection
8.1(a), all of the unpaid Obligations, together with all accrued interest
thereon, Mortgagee shall be entitled to xxx for and to recover judgment against
the Mortgagor for the entire amount so due and unpaid together with all costs
and expenses (including, without limitation, reasonable attorneys' fees and
expenses) incurred by Mortgagee in connection with such proceeding, together
with interest thereon at the Default Rate from the date incurred by Mortgagee.
All such costs and expenses shall be secured by this Mortgage and shall be
payable by Mortgagor immediately. Mortgagee's right under this Sub-section (ii)
may be exercised by Mortgagee either before, after or during the pendency of any
proceedings for the enforcement of this Mortgage, including appellate
proceedings.
(iii) No recovery of any judgment as
provided in Subsections (i) and (ii) above and no attachment or levy of any
execution upon any of the Mortgaged Property or any other property shall in any
way affect the lien of this Mortgage upon the Mortgaged Property or any part
thereof, or any lien, rights, powers, or remedies of Mortgagee hereunder, but
such lien, rights, powers and remedies shall continue unimpaired as before.
(d) FORECLOSURE.
(i) Mortgagee may institute
proceedings for the partial or complete foreclosure of this Mortgage and
Mortgagee may, pursuant to any final judgment of foreclosure, sell the Mortgaged
Property as an entirety or in separate lots, units, or parcels.
(ii) In case of a foreclosure sale
of all or any part of the Mortgaged Property, the proceeds of sale shall be
applied in accordance with Section 8.8 hereof, and the Mortgagee shall be
entitled to seek a deficiency judgment against the Mortgagor to enforce payment
of any and all Obligations then remaining due and unpaid, together with interest
thereon, and to recover a judgment against the Mortgagor therefor.
(iii) The Mortgagee is authorized to
foreclose this Mortgage subject to the rights of any tenants of the Mortgaged
Property, or Mortgagee may elect which tenants Mortgagee desires to name as
parties defendant in such foreclosure and failure to make any such tenants
parties defendant to any such foreclosure proceedings and to foreclose their
rights will not be, nor be asserted by the Mortgagor to be, a defense to any
proceedings instituted by the Mortgagee to collect the unpaid Obligations or to
collect any deficiency remaining unpaid after the foreclosure sale of the
Mortgaged Property.
(e) RECEIVER. Mortgagee may apply to any court of
competent jurisdiction to have a receiver appointed to enter upon and take
possession of the Mortgaged Property, collect the Rents therefrom and apply the
same as the court may direct, such receiver to have all of the rights and powers
permitted under the laws of the State of Florida. The right of the appointment
of such receiver shall be a matter of strict right without regard to the value
or the occupancy of the Mortgaged Property or the solvency or insolvency of
Mortgagor. The expenses, including receiver's fees, attorneys' fees, costs and
agent's commission incurred pursuant to the powers herein contained, together
with interest thereon at the Default Rate, shall be secured hereby and shall be
due and payable by Mortgagor immediately without notice or demand.
Notwithstanding the appointment of any receiver or other custodian, Mortgagee
shall be entitled as pledgee to the possession and control of any cash or
deposits at the time held by, payable, or deliverable under the terms of this
Mortgage to the Mortgagee, and the Mortgagee shall have the right to offset the
unpaid Obligations against any such cash or deposits in such order as Mortgagee
may elect.
(f) REMEDIES AS TO PERSONAL PROPERTY. Mortgagee may
exercise any or all of its rights and remedies under the Uniform Commercial
Code-Secured Transactions as adopted by the State of Florida or other applicable
law as well
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as all other rights and remedies possessed by Mortgagee, all of which shall be
cumulative. Mortgagee is hereby authorized and empowered to enter the Mortgaged
Property or other place where the Personal Property may be located without legal
process, and to take possession of the Personal Property without notice or
demand, which hereby are waived to the maximum extent permitted by the laws of
the State of Florida. Upon demand by Mortgagee, Mortgagor shall make the
Personal Property available to Mortgagee at a place reasonably convenient to
Mortgagee. Mortgagee may sell at one or more public or private sales and for
such price as Mortgagee may deem commercially reasonable, any and all of the
Personal Property secured by this Mortgage, and any other security or property
held by Mortgagee and Mortgagee may be the purchaser of any or all of the
Personal Property.
(g) OTHER. Mortgagee may institute and maintain any
suits and proceedings as the Mortgagee may deem advisable (i) to prevent any
impairment of the Mortgaged Property by any acts which may be unlawful or in
violation of this Mortgage, (ii) to preserve or protect its interest in the
Mortgaged Property, and (iii) to restrain the enforcement of or compliance with
any Governmental Requirement that may be unconstitutional or otherwise invalid,
if the enforcement of or compliance with such Governmental Requirement might
impair the security hereunder or be prejudicial to the Mortgagee's interest.
6.2 REMEDIES CUMULATIVE AND CONCURRENT. No right, power or
remedy of Mortgagee as provided in the Note, this Mortgage, the Guaranty, or the
other Loan Documents is intended to be exclusive of any other right, power, or
remedy of Mortgagee, but each and every such right, power and remedy shall be
cumulative and concurrent and in addition to any other right, power or remedy
available to Mortgagee now or hereafter existing at law or in equity and may be
pursued separately, successively or together against Mortgagor, any Guarantor,
or any endorser, co-maker, surety or guarantor of the Obligations, or the
Mortgaged Property or any part thereof, or any one or more of them, at the sole
discretion of Mortgagee. The failure of Mortgagee to exercise any such right,
power or remedy shall in no event be construed as a waiver or release thereof.
6.3 WAIVER, DELAY OR OMISSION. No waiver of any Event of
Default hereunder shall extend to or affect any subsequent or any other Event of
Default then existing, or impair any rights, powers or remedies consequent
thereon, and no delay or omission of Mortgagee to exercise any right, power or
remedy shall be construed to waive any such Event of Default or to constitute
acquiescence therein.
6.4 CREDIT OF MORTGAGEE. To the maximum extent permitted by
the laws of the State of Florida, upon any sale made under or by virtue of this
Article, Mortgagee may bid for and acquire the Mortgaged Property, or any part
thereof, and in lieu of paying cash therefor may apply to the purchase price,
any portion of or all of the unpaid Obligations in such order as Mortgagee may
elect.
6.5 SALE. Any sale or sales made under or by virtue of this
Article shall operate to divest all the estate, right, title, interest, claim
and demand whatsoever at law or in equity, of the Mortgagor and all Persons,
except tenants pursuant to Leases approved by Mortgagee, claiming by, through or
under Mortgagor in and to the properties and rights so sold, whether sold to
Mortgagee or to others.
6.6 PROOFS OF CLAIM. In the case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition,
seizure of the Mortgaged Property by any Governmental Authority, or other
judicial proceedings affecting the Mortgagor, any Guarantor, any endorser,
co-maker, surety, or guarantor of the Obligations, or any of their respective
properties, the Mortgagee, to the extent permitted by law, shall be entitled to
file such proofs of claim and other documents as may be necessary or advisable
in order to have its claim allowed in such proceedings for the entire unpaid
Obligations at the date of the institution of such proceedings, and for any
additional amounts which may become due and payable after such date.
6.7 WAIVER OF REDEMPTION, NOTICE, MARSHALING, ETC. Mortgagor
hereby waives and releases, for itself and anyone claiming through, by, or under
it, to the maximum extent permitted by the laws of the State of Florida:
(a) all benefit that might accrue to Mortgagor by
virtue of any present or future law exempting the Mortgaged Property, or any
part of the proceeds arising from any sale thereof, from attachment, levy or
sale on execution, or providing for any appraisement, valuation, stay of
execution, exemption from civil process, redemption or extension of time for
payment,
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(b) unless specifically required herein, all notices
of default, or Mortgagee's actual exercise of any option or remedy under the
Loan Documents, or otherwise, and
(c) any right to have the Mortgaged Property
marshaled.
6.8 APPLICATION OF PROCEEDS. The proceeds of any sale of all
or any portion of the Mortgaged Property shall be applied by Mortgagee first, to
the payment of receiver's fees and expenses, if any, and to the payment of all
costs and expenses (including, without limitation, reasonable attorneys' fees
and expenses) incurred by Mortgagee, together with interest thereon at the
Default Rate from the date so incurred, in connection with any entry, action or
proceeding under this Article and, second, in such order as Mortgagee may elect,
to the payment of the Obligations. Mortgagor shall be and remain liable to
Mortgagee for any difference between the net proceeds of sale and the amount of
the Obligations until all of the Obligations have been paid in full.
6.9 DISCONTINUANCE OF PROCEEDINGS. If Mortgagee shall have
proceeded to enforce any right under any Loan Document and such proceedings
shall have been discontinued or abandoned for any reason, then except as may be
provided in any written agreement between Mortgagor and Mortgagee providing for
the discontinuance or abandonment of such proceedings, Mortgagor and Mortgagee
shall be restored to their former positions and the rights, remedies and powers
of Mortgagee shall continue as if no such proceedings had been instituted.
6.10 MORTGAGEE'S ACTIONS. Mortgagee may, at any time without
notice to any Person and without consideration, do or refrain from doing any or
all of the following actions, and neither the Mortgagor, any Guarantor, any
endorser, co-maker, surety or guarantor of the Obligations, nor any other Person
(hereinafter in this Section 8.10 collectively referred to as the "Obligor") now
or hereafter liable for the payment and performance of the Obligations shall be
relieved from the payment and performance thereof, unless specifically released
in writing by Mortgagee: (a) renew, extend or modify the terms of the Note, this
Mortgage, the Guaranty and the other Loan Documents, or any of them; (b) forbear
or extend the time for the payment or performance of any or all of the
Obligations; (c) apply payments by any Obligor to the reduction of the unpaid
Obligations in such manner, in such amounts, and at such times and in such order
and priority as Mortgagee may see fit; (d) release any Obligor; (e) substitute
or release in whole or in part the Mortgaged Property or any other collateral or
any portion thereof now or hereafter held as security for the Obligations
without affecting, disturbing or impairing in any manner whatsoever the validity
and priority of the lien of this Mortgage upon the Mortgaged Property which is
not released or substituted, or the validity and priority of any security
interest of the Mortgagee in such other collateral which is not released or
substituted; (f) subordinate the lien of this Mortgage or the lien of any other
security interest in any other collateral now or hereafter held as security for
the Obligations; (g) join in the execution of a plat or replat of the Land; (h)
join in and consent to the filing of a declaration of condominium or declaration
of restrictive covenants regarding all or any part of the Land; (i) consent to
the granting of any easement on the Land; and (j) generally deal with any
Obligor or any other party as Mortgagee may see fit.
ARTICLE VII
MISCELLANEOUS
7.1 CONTINUING AGREEMENT. This Mortgage and all of the
Mortgagor's representations, warranties and covenants herein, Mortgagee's
security interest in the Mortgaged Property and all of the rights, powers and
remedies of Mortgagee hereunder shall continue in full force and effect until
all of the Obligations have been paid and performed in full; until Mortgagee has
no further obligation to make any advances under the Loan; and until Mortgagee,
upon the request of the Mortgagor, has executed a satisfaction of mortgage.
Furthermore, if for any reason no Obligations are owing, notwithstanding such
occurrence, this Mortgage shall remain valid and in full force and effect as to
subsequent Obligations, so long as Mortgagee has not executed a satisfaction of
mortgage; provided, however, that the indemnifications set forth in Article V of
this Mortgage shall survive the satisfaction of this Mortgage.
7.2 SURVIVAL OF WARRANTIES AND COVENANTS. The warranties,
representations, covenants and agreements set forth in this Mortgage shall
survive the making of the Loan and the execution and delivery of the Note, and
shall continue in full force and effect until all of the Obligations shall have
been paid and performed in full.
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7.3 NO REPRESENTATION BY MORTGAGEE. By accepting or approving
anything required to be observed, performed or fulfilled, or to be given to
Mortgagee, pursuant to this Mortgage, or the other Loan Documents, or the
Commitment, including, but not limited to, any officer's certificate, balance
sheet, statement, survey or appraisal, Mortgagee shall not be deemed to have
warranted or represented the sufficiency, legality, effectiveness or legal
effect of the same, or of any term, provision or condition thereof, and such
acceptance or approval thereof shall not be or constitute any warranty or
representation with respect thereto by Mortgagee.
7.4 NOTICE. All notices, demands, requests and other
communications required under this Mortgage shall be given in accordance with
the terms of the Loan Agreement.
7.5 COVENANTS RUNNING WITH THE LAND. All covenants contained
in this Mortgage shall be binding on the Mortgagor and shall run with the Land.
7.6 SUCCESSORS AND ASSIGNS. All of the terms of this Mortgage
shall apply to and be binding upon, and inure to the benefit of, the heirs,
devisees, personal representatives, successors and assigns of Mortgagor and
Mortgagee, respectively, and all persons claiming under or through them.
7.7 INVALIDITY.
(a) If any one or more of the provisions contained in
this Mortgage is declared or found by a court of competent jurisdiction to be
invalid, illegal, or unenforceable, such provision or portion thereof shall be
deemed stricken and severed and the remaining provisions hereof shall continue
in full force and effect.
(b) If any one or more of the Obligations is declared
or found by a court of competent jurisdiction to be invalid, illegal, or
unenforceable, the validity, legality and enforceability of the remaining
Obligations shall continue in full force and effect.
7.8 MODIFICATION. No agreement unless in writing and signed by
an authorized officer of Mortgagee and no course of dealing between the parties
hereto shall be effective to change, waive, terminate, modify, discharge, or
release in whole or in part any provision of this Mortgage. No waiver of any
rights or powers of Mortgagee or consent by it shall be valid unless in writing
signed by an authorized officer of Mortgagee and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
7.9 APPLICABLE LAW. This Mortgage shall be construed,
interpreted, enforced and governed by and in accordance with the laws of the
State of Florida (excluding the principles thereof governing conflicts of law),
and federal law, in the event federal law permits a higher rate of interest than
Florida law.
7.10 REPLACEMENT OF NOTE. Upon receipt of evidence reasonably
satisfactory to Mortgagor of the loss, theft, destruction or mutilation of the
Note, or any amendment or modification thereto, including without limitation any
renewal note or additional note, and in the case of any such loss, theft, or
destruction, upon delivery of any indemnity agreement, reasonably satisfactory
to Mortgagor or, in the case of any such mutilation, upon surrender of such
mutilated note, Mortgagor will execute and deliver, in lieu thereof, a
replacement Note, identical in form and substance to the Note and dated as of
the date of the Note and upon such execution and delivery all references in any
of the Loan Documents to the Note shall be deemed to refer to the replacement
Note.
7.11 STRICT PERFORMANCE. It is specifically agreed that time
is of the essence as to all matters provided for in this Mortgage and that no
waiver of any Obligation hereunder or secured hereby shall at any time
thereafter be held to be a waiver of the Obligations.
7.12 WAIVER OF TRIAL BY JURY. MORTGAGOR AND MORTGAGEE (BY
ACCEPTANCE OF THIS INSTRUMENT) HEREBY KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS MORTGAGE, OR ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS MORTGAGE, THE NOTE, OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF
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ANY PARTY HERETO OR TO ANY LOAN DOCUMENT. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR MORTGAGOR AND MORTGAGEE ENTERING INTO THE SUBJECT LOAN
TRANSACTION.
IN WITNESS WHEREOF, Mortgagor has executed this instrument as
of the day and year first above written.
Signed, sealed and delivered
in the presence of:
TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida
corporation
_____________________________
Print Name:__________________
By: ___________________________________________
Name: _________________________________________
_____________________________ Title: ________________________________________
Print Name:__________________
[CORPORATE SEAL]
STATE OF FLORIDA )
) ss.:
COUNTY OF ______ )
The foregoing instrument was acknowledged before me this _____ day of
_________________, 1996, by ___________________________________________, as
_______________________ of TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida
corporation, on behalf of the corporation. He/she is personally known to me or
has produced a driver's license as identification and did not take an oath.
____________________________________________
Print or Stamp Name: _______________________
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
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This Instrument Was Prepared By:
Xxxxxx X. Xxxxxx, Esq.
Gunster, Yoakley, Xxxxxx-Xxxxx & Xxxxxxx, P.A.
Suite 1400
000 X. Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
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EXHIBIT "A"
LEGAL DESCRIPTION
Record and Return To:
Xxxx X. Xxxxxx, Esquire
Two Executive Court
0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
(CONTINGENT RETURN MORTGAGE)
THIS MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (the
"Mortgage"), made as of the 29th day of March, 1996 between TRANSEASTERN
PEMBROKE VILLAGES, INC., a Florida corporation (the "Mortgagor"), as mortgagor
and debtor, whose principal place of business is 0000 Xxxxxxxxxx Xxxxx, 0xx
Xxxxx, Xxxxx Xxxxxxx, Xxxxxxx 00000, and AMRESCO FUNDING CORPORATION, a Delaware
corporation (the "Mortgagee"), as mortgagee and secured party, whose address is
0000 Xxxxxxx Xxxxxxx Xxxxxxx, Xxxxxx Xxxxx 00000.
ARTICLE I
DEFINITIONS, HEADINGS, RULES OF
CONSTRUCTION AND SECURITY AGREEMENT
1.1 DEFINITIONS. As used in this Mortgage and in the exhibits
attached hereto, the following terms shall have the following meanings herein
specified, such definition to be applicable equally to the singular and plural
forms of such terms (unless otherwise defined herein all capitalized terms used
in this Mortgage shall have the meanings assigned to the same in this Loan
Agreement (as defined below)):
(a) COMMITMENT: The commitment letter from Mortgagee
to Transeastern Properties of South Florida, Inc. dated March 15, 1996 together
with all amendments thereto.
(b) DEFAULT RATE: The default rate of interest as set
forth in the Loan Agreement and other applicable Loan Documents.
(c) EVENTS OF DEFAULT: Those events described in
Article VI hereof.
(d) FIXTURES: All property and equipment now owned or
hereafter acquired by Mortgagor and now or hereafter located under, on, or above
the Land, whether or not permanently affixed, which, to the fullest extent
permitted by applicable law in effect from time to time, shall be deemed
fixtures and a part of the Land.
(e) [Intentionally Deleted]
(f) GOVERNMENTAL AUTHORITY: Any (domestic or foreign)
federal, state, county, municipal or other governmental department, entity,
authority, commission, board, bureau, court, agency or any instrumentality of
any of them.
(g) GOVERNMENTAL REQUIREMENT: Any law, enactment,
statute, code, ordinance, order, rule, regulation, judgment, decree, writ,
injunction, franchise, permit, certificate, license, authorization, or other
direction or requirement of any Governmental Authority now existing or hereafter
enacted, adopted, promulgated, entered, or issued applicable to Mortgagee,
Mortgagor or the Mortgaged Property, including, without limitation, any
Environmental Law.
(h) GUARANTOR: Jointly and severally any and all
Persons now or hereafter guarantying the Obligations or any part thereof
(collectively referred to as the "Guarantor").
(i) GUARANTY: Any guaranty of payment, performance or
completion executed by any Guarantor in favor of Mortgagee with respect to the
Obligations.
(j) IMPOSITIONS: All (i) real estate and personal
property taxes and other taxes and assessments, public or private; utility rates
and charges including those for water and sewer; all other governmental and
non-governmental charges and any interest or costs or penalties with respect to
any of the foregoing; and charges for any public improvement, easement or
agreement maintained for the benefit of or involving the Mortgaged Property,
general and special, ordinary and extraordinary, foreseen and unforeseen, of any
kind and nature whatsoever that at any time prior to or after the execution of
this Mortgage may be assessed, levied or imposed upon the Mortgaged Property or
the Rent or income received therefrom, or any use or occupancy thereof, (ii)
other taxes, assessments, fees and governmental and non-governmental charges
levied, imposed or assessed upon or against Mortgagor or any of its properties
and (iii) taxes levied or assessed upon this Mortgage and the other Obligations,
or any of them.
(k) IMPROVEMENTS: All buildings, structures,
appurtenances and improvements, including all additions thereto and replacements
and extensions thereof, now constructed or hereafter to be constructed under, on
or above the Land, which term includes any part thereof.
(l) LAND: The real property described in Exhibit "A"
attached hereto and made a part hereof, together with all rights, privileges,
tenements, hereditaments, rights-of-way, easements, appendages, projections,
appurtenances, water rights including riparian and littoral rights, streets,
ways, alleys, and strips and gores of land now or hereafter in anyway belonging,
adjoining, crossing or pertaining to the Land.
(m) LEASES: Any and all leases, subleases, licenses,
concessions, or grants of other possessory interests, together with the security
therefor, now or hereafter in force, oral or written, covering or affecting the
Mortgaged Property or any part thereof.
(n) [Intentionally Deleted]
(o) LOAN AGREEMENT: The loan agreement of even date
herewith, between Mortgagor and Mortgagee.
(p) LOAN DOCUMENTS: Those documents or instruments
executed, submitted, or to be submitted by Mortgagor or others in connection
with the Loan, including but not limited to the: (i) Mortgage, (ii) Guaranty,
(iii) Loan Agreement, (iv) financing statements, (v) Environmental Indemnity
Agreement, and (vi) any other document or instrument executed by Mortgagor or
Guarantor in connection with the Loan.
(q) MORTGAGED PROPERTY: The Land, Improvements,
Fixtures, Leases, Rents and Personal Property together with:
(i) all judgments, awards of
damages and settlements hereafter made resulting from condemnation proceedings
or the taking of the Mortgaged Property or any part thereof under the power of
eminent domain, or by agreement in lieu thereof, or for any damage thereto
caused by any governmental action (whether by such taking or otherwise), such as
without limitation, any award for change of grade of streets;
-2-
(ii) all judgments, awards and
settlements hereafter made, and all insurance proceeds hereafter paid for any
damage to the Mortgaged Property, and all unearned insurance premiums on any
insurance policies maintained by the Mortgagor pursuant to this Mortgage;
(iii) all awards and refunds
hereafter made with respect to any Imposition; and
(iv) the estate, right, title,
interest, privilege, claim or demand whatsoever of Mortgagor, now or hereafter,
either at law or in equity, in and to the Mortgaged Property.
The term Mortgaged Property includes any part of the foregoing property
described as Mortgaged Property, and all proceeds, products, replacements,
improvements, betterments, extensions, additions, substitutions, renewals,
accessories, and appurtenances thereto and thereof.
(r) MORTGAGEE: AMRESCO Funding Corporation a Delaware
corporation, its successors and assigns.
(s) MORTGAGOR: TRANSEASTERN VILLAGES, INC., a Florida
corporation.
(t) NOTE: The promissory note dated of even date
herewith from Mortgagor to Mortgagee, in the amount of $3,000,000.00 and by this
reference made a part hereof to the same extent as though set out in full
herein, and any other note given to Mortgagee evidencing a Future Advance as any
of said notes may from time to time hereafter be modified, amended, extended or
renewed.
(u) OBLIGATIONS: Any and all of the indebtedness,
liabilities, covenants, promises, agreements, terms, conditions, and other
obligations of every nature whatsoever, whether joint or several, direct or
indirect, absolute or contingent, liquidated or unliquidated, of Mortgagor and
Guarantor, or any of them, to Mortgagee, evidenced by, secured by, under and as
set forth in this Mortgage, the Guaranty or the Loan Agreement or the other Loan
Documents that pertain to Mortgagor's obligation to pay the Contingent Returns
in accordance with the terms of the Loan Agreement and other Loan Documents;
(v) PERMITTED TITLE EXCEPTIONS: Those matters, if
any, described in Schedule B to the title insurance policy insuring Mortgagee's
interest in this Mortgage.
(w) PERSON: Any individual, corporation, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization, government, or agency or political subdivision thereof, or any
other form of entity.
(x) PERSONAL PROPERTY: All of the following property
of Mortgagor whether now owned or existing, or hereafter acquired or arising,
whether located in, on, pertaining to, used or intended to be used in connection
with or resulting or created from the ownership, development, management, or
operation of the Land:
(i) all Improvements (to the extent
same are not deemed to be real property) and landscaping;
(ii) all Fixtures (to the extent
same are not deemed to be real property) and goods to become Fixtures;
(iii) all accounts, accounts
receivable, other receivables, contract rights, chattel paper, instruments and
documents; any other obligations or indebtedness owed to Mortgagor from whatever
source arising; all rights of Mortgagor to receive any performance or any
payments in money or kind; all guaranties of the foregoing and security
therefor; all of the right, title and interest of Mortgagor in and with respect
to the goods, services, or other property that gave rise to or that secure any
of the foregoing, and all rights of Mortgagor as an unpaid seller of goods and
services, including, but not limited to, the rights to stoppage in transit,
replevin, reclamation, and resale;
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(iv) all goods, including without
limitation, all machinery, equipment, furniture, furnishings, building supplies
and materials, appliances, business machines, tools, aircraft and motor vehicles
of every kind and description, and all warranties and guaranties for any of the
foregoing;
(v) all inventory, merchandise, raw
materials, parts, supplies, work-in-process and finished products intended for
sale, of every kind and description, in the custody or possession, actual or
constructive, of Mortgagor including such inventory as is temporarily out of the
custody or possession of Mortgagor, and any returns upon any accounts and other
proceeds resulting from the sale or disposition of any of the foregoing,
including, without limitation, raw materials, work-in-process, and finished
goods;
(vi) all general intangibles,
including without limitation, corporate or other business records and books,
computer records whether on tape, disc or otherwise stored, blueprints, surveys,
architectural or engineering drawings, plans and specifications, trademarks,
tradenames, goodwill, telephone numbers, licenses, governmental approvals,
franchises, permits, payment and performance bonds, tax refund claims, and
agreements with utility companies, together with any deposits, prepaid fees and
charges paid thereon;
(vii) all Leases and Rents (to the
extent same are not deemed to be real property);
(viii) all judgments, awards of
damages and settlements from any condemnation or eminent domain proceedings
regarding the Land, the Improvements or any of the Mortgaged Property;
(ix) all insurance policies required
by this Mortgage, the unearned premiums therefor and all loss proceeds thereof;
(x) all other personal property,
including without limitation, management contracts, construction contracts,
architectural contracts, service contracts, engineering contracts, advertising
contracts, contracts for purchase and sale of any of the Mortgaged Property,
purchase orders, equipment leases, monies in escrow accounts, reservation
agreements, prepaid expenses, deposits and down payments with respect to the
sale or rental of any of the Mortgaged Property, options and agreements with
respect to additional real property for use or development of the Mortgaged
Property, end-loan commitments, abstracts of title, all brochures, advertising
materials, condominium documents and prospectuses; and
(xi) all proceeds, products,
replacements, additions, betterments, extensions, improvements, substitutions,
renewals and accessions of any and all of the foregoing.
(y) RENTS: All of the rents, royalties, issues,
revenues, income, profits, security deposits and other benefits whether past
due, or now or hereafter arising from the Mortgaged Property and the occupancy,
use and enjoyment thereof.
(z) SENIOR MORTGAGE: That certain Mortgage and
Security Agreement of even date herewith from Mortgagor, as mortgagor, in favor
of Chase Federal Bank, as mortgagee, to be recorded in the Public Records of
Broward County, Florida, together with the note secured thereby.
1.2 RULES OF CONSTRUCTION. The use of any gender shall include
all other genders. The singular shall include the plural and the plural shall
include the singular. The word "or" is not exclusive and the use of the word
"and" may be conjunctive or disjunctive in the sole and absolute discretion of
Mortgagee. The captions of Articles, Sections and Subsections of this Mortgage
are for convenient reference only, and shall not affect the construction or
interpretation of any of the terms and provisions set forth herein.
1.3 SECURITY AGREEMENT. This Mortgage constitutes a "Security
Agreement" within the meaning of and shall create a security interest under the
Uniform Commercial Code-Secured Transactions as adopted by the State of Florida,
with respect to the Fixtures, Leases, Rents and Personal Property. A carbon,
photographic or other reproduction of this Mortgage or of any
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financing statement shall be sufficient as a financing statement. The debtor's
principal place of business and the secured party's address is set forth in the
introduction to this Mortgage.
ARTICLE II
GRANT
2.1 GRANT. For good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and to secure the payment,
observance, performance and discharge of the Obligations, Mortgagor does by
these presents give, transfer, grant, bargain, sell, alien, remise, release,
assign, mortgage, hypothecate, deposit, pledge, set over, confirm, convey and
warrant unto Mortgagee all estate, right, title and interest of Mortgagor in and
to the Mortgaged Property, whether now owned or held or hereafter acquired by
Mortgagor, subject, however, to the Permitted Title Exceptions and the rights of
the holder of the Senior Mortgage, to have and to hold the Mortgaged Property
unto Mortgagee, its successors and assigns forever.
2.2 CONDITION OF GRANT. Subject to the provisions of this
Mortgage, the condition of these presents is such that if Mortgagor shall pay,
observe, perform and discharge the Obligations, or cause same to be paid,
observed, performed and discharged in strict accordance with the terms thereof,
then this Mortgage and the estates, interests, rights and assignments granted
hereby shall be null and void, but otherwise shall remain in full force and
effect.
2.3 SUBROGATION. The Mortgagee is hereby subrogated to the
claims and liens of all parties whose claims or liens are fully or partially
discharged or paid with the proceeds of the indebtedness secured by this
Mortgage notwithstanding that such claims or liens may have been canceled and
satisfied of record.
ARTICLE III
ASSIGNMENT OF LEASES AND RENTS
3.1 ASSIGNMENT. The Mortgagor does hereby absolutely and
unconditionally assign and transfer to Mortgagee all of Mortgagor's estate,
right, title and interest in and to the Leases and Rents, to have and to hold
the Leases and Rents unto Mortgagee, its successors and assigns forever. From
time to time, upon request of Mortgagee, Mortgagor shall give further evidence
of this assignment to Mortgagee by executing and delivering to Mortgagee
specific assignments of the Leases and Rents, in form and content approved by
Mortgagee. All such specific assignments shall be of the same dignity and
priority as this Mortgage. From time to time, upon request of Mortgagee,
Mortgagor shall also execute and deliver to Mortgagee any notification to
tenants or other document reasonably required by Mortgagee.
3.2 PAYMENT OF RENTS TO MORTGAGOR, AS TRUSTEE, UNTIL DEFAULT.
So long as no Event of Default has occurred, Mortgagor may, as trustee for the
use and benefit of Mortgagee, collect, receive and accept the Rents as they
become due and payable (but in no event for more than two (2) months in
advance); provided, however, that if the Rents exceed the payments due under the
Loan Agreement for the Contingent Returns, the Mortgagor may use such excess,
first, for the operation and benefit of the Mortgaged Property and, second, for
the general benefit of the Mortgagor. Upon the occurrence of an Event of Default
Mortgagee may, at its option, remove the Mortgagor as trustee for the collection
of the Rents and appoint any other person including, but not limited to, itself
as a substitute trustee to collect, receive, accept and use all such Rents in
payment of the Obligations, in such order as Mortgagee shall elect in its sole
and absolute discretion, whether or not Mortgagee takes possession of the
Mortgaged Property. Mortgagor hereby directs each of the respective tenants
under the Leases, and any rental agent, to pay to Mortgagee all such Rents, as
may now be due or shall hereafter become due, upon demand for payment thereof by
Mortgagee without any obligation on the part of any such tenant or rental agent
to determine whether or not an Event of Default has in fact occurred. Upon an
Event of Default, the permission hereby given to Mortgagor to collect, receive
and accept such Rents as trustee shall terminate and such permission shall not
be reinstated upon a cure of the Event of Default without Mortgagee's specific
written consent. Further, upon the event of a Default, Mortgagor shall
immediately turn over to Mortgagee all Rents in the actual or constructive
possession of Mortgagor, its affiliates, contractors, or its agents, together
with an accounting thereof. Exercise of Mortgagee's rights under this Section,
and the
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application of any such Rents to the Obligations, shall not cure or waidefault
hereunder or invalidate any act done pursuant hereto, but shall be cumulative
and in addition to all other rights and remedies of Mortgagee.
3.3 PERFORMANCE UNDER LEASES. Mortgagor covenants that it
shall, at its sole cost and expense, (a) duly and punctually perform and
discharge, or cause to be performed and discharged, all of the obligations and
undertakings of Mortgagor or its agents under the Leases, (b) use its best
efforts to enforce or secure, or cause to be enforced or secured, the
performance of each and every obligation and undertaking of the respective
tenants under the Leases, (c) promptly notify Mortgagee if Mortgagor receives
any notice from a tenant claiming that Mortgagor is in default under a Lease and
(d) appear in and defend any action or proceeding arising under or in any manner
connected with the Leases.
3.4 LEASES IN GOOD STANDING. All Leases, if any, are in full
force and effect, and there are no defaults thereunder or any defenses or
offsets thereto on the part of any tenant.
3.5 PROVISIONS OF LEASES. All Leases shall be inferior and
subordinate to the lien of this Mortgage and the terms of each Lease shall so
expressly provide. Mortgagor covenants that all Leases hereafter entered into by
Mortgagor shall be in form and substance satisfactory to Mortgagee.
3.6 TERMINATION OR MODIFICATION. Mortgagor covenants that it
shall not, without the prior express written consent of Mortgagee, enter into a
Lease, or materially modify, terminate, or consent to the cancellation or
surrender of any Lease, or permit any tenant under any Lease to assign or sublet
its rights thereunder.
3.7 NO OBLIGATION OF MORTGAGEE. This Assignment shall not be
deemed or construed to constitute Mortgagee as a mortgagee in possession of the
Mortgaged Property nor shall it obligate Mortgagee to take any action or to
incur expenses or perform or discharge any obligation, duty or liability of
Mortgagor under any Lease.
3.8 CUMULATIVE REMEDIES. Each and every right, remedy and
power granted to Mortgagee by this Article shall be cumulative and in addition
to every other right, remedy and power given by the Loan Documents and now or
hereafter existing in equity, at law, or by virtue of statute or otherwise. The
failure of Mortgagee to avail itself of any of its rights, remedies and powers
shall not be construed or deemed to be a waiver thereof.
3.9 NOTIFICATION OF MORTGAGEE'S RIGHTS. Mortgagee shall have
the right, but not the obligation, at any time and from time to time, to notify
any tenant under any Lease of the rights of Mortgagee as provided in this
Article III and Mortgagor, upon demand from Mortgagee, shall confirm to such
tenant the existence of such rights.
3.10 LEASING COMMISSION. Mortgagor covenants that every
agreement to pay leasing commissions with respect to the leasing of space in the
Mortgaged Property, or any part thereof, are and shall be subject, subordinate
and inferior to the right of Mortgagee, so that in the event Mortgagee acquires
title to the Mortgaged Property either at a foreclosure sale or by other means,
Mortgagee will be exonerated and discharged from all liabilities for the payment
of any such commissions or compensations.
3.11 ATTORNEY-IN-FACT. To further effectuate Mortgagee's
rights under this Article III, Mortgagor hereby constitutes and irrevocably
appoints Mortgagee its true and lawful attorney-in-fact, which appointment is
coupled with an interest, with full power of substitution, and empowers said
attorney or attorneys in the name of Mortgagor, but at the option of said
attorney-in-fact, to (i) collect and receive the Rents and to issue receipts
therefor, (ii) to make, enter into, extend, modify, amend, terminate, consent to
the cancellation or surrender of any Lease, or permit any tenant to assign or
sublet its rights thereunder, (iii) to execute, acknowledge and deliver any and
all instruments and documents that Mortgagee may deem necessary or proper to
implement its rights as provided in this Article III, and (iv) to perform and
discharge any and all obligations and undertakings of Mortgagor under any Lease.
3.12 OTHER ASSIGNMENTS. Mortgagor shall not further assign or
transfer the Leases or Rents except in favor of (i) Mortgagee as provided in
this Article III, and (ii) the holder of the Senior Mortgage and shall not
create or permit to be created or to remain, any mortgage, pledge, lien,
encumbrance, claim, or charge on the Leases or Rents except pursuant to the
Senior Mortgage, if any. Any transaction prohibited under this Section shall be
null and void.
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3.13 SECTION 697.07 OF THE FLORIDA STATUTES. The assignments
of Leases and Rents contained in this Mortgage are intended to provide Mortgagee
with all the rights and remedies of mortgagees pursuant to Section 697.07 of the
Florida Statutes (hereinafter "Section 697.07"), as may be amended from time to
time. However, in no event shall this reference diminish, alter, impair, or
affect any other rights and remedies of Mortgagee, including but not limited to,
the appointment of a receiver as provided in Section 6.1(e) herein, nor shall
any provision in this Section 3.13 diminish, alter, impair or affect any rights
or powers of the receiver in law or equity or as set forth in Section 6.1(e)
herein. In addition, this assignment shall be fully operative without regard to
value of the Mortgaged Property or without regard to the adequacy of the
Mortgaged Property to serve as security for the obligations owed by Mortgagor to
Mortgagee, and shall be in addition to any rights arising under Section 697.07.
Further, except for the notices required hereunder, if any, Mortgagor waives any
notice of default or demand for turnover of rents by Mortgagee, together with
any rights under Section 697.07 to apply to a court to deposit the Rents into
the registry of the court or such other depository as the court may designate.
ARTICLE IV
AFFIRMATIVE COVENANTS
4.1 PAYMENT AND PERFORMANCE. Mortgagor shall promptly pay and
punctually perform, or shall cause to be promptly paid and punctually performed,
all of the Obligations as and when due and payable.
4.2 RESTORATION FOLLOWING CASUALTY.
(a) If all or any part of the Mortgaged Property
shall be damaged or destroyed by a casualty, Mortgagor shall immediately give
written notice thereof to Mortgagee and the appropriate insurer, and Mortgagee
is authorized and empowered (but not obligated or required) to make proof of
loss and to settle, adjust or compromise any claims for loss, damage or
destruction under any policies of insurance required under this Mortgage.
Subject to the rights of the holder of the Senior Mortgage, all proceeds of
insurance shall be paid to Mortgagee and shall be applied first to the payment
of all costs and expenses (including, without limitation, reasonable attorneys'
fees and expenses) incurred by Mortgagee in obtaining such proceeds, and second,
at the option of Mortgagee, either to the payment of the Obligations whether or
not due, in such order as Mortgagee may elect, or to the restoration, repair, or
replacement of the Mortgaged Property. If Mortgagee elects to apply the
insurance proceeds to the restoration, repair or replacement of the Mortgaged
Property, such proceeds shall be disbursed to Mortgagor as work progresses
pursuant to a construction and disbursing agreement in form and content
satisfactory to Mortgagee in its sole discretion, and Mortgagor shall promptly
and diligently, regardless of whether there shall be sufficient insurance
proceeds therefor, restore, repair and rebuild the Mortgaged Property to the
equivalent of its condition immediately prior to the casualty. During the period
of restoration and repair, Mortgagor shall continue to duly and promptly pay,
perform, observe and comply with all of the Obligations. The election by
Mortgagee to apply the insurance proceeds to the restoration, repair or
replacement of the Mortgaged Property shall not affect the lien of this Mortgage
or affect or reduce the Obligations.
(b) If all or any of the Mortgaged Property shall be
damaged or destroyed by a casualty not covered by insurance, or, if so covered,
the insurer fails or refuses to pay the claim within thirty (30) days following
the filing thereof, Mortgagor shall immediately give written notice thereof to
Mortgagee, and Mortgagor shall promptly and diligently, at Mortgagor's sole cost
and expense, restore, repair and rebuild the Mortgaged Property to the
equivalent of its condition immediately prior to the casualty. During the period
of restoration and repair, Mortgagor shall continue to duly and promptly pay,
perform, observe and comply with all of the Obligations.
(c) If any work required to be performed under
Subsections (a) or (b) above, or both, shall involve an estimated expenditure of
more than $25,000.00, no such work shall be undertaken until plans and
specifications therefor, prepared by an architect satisfactory to Mortgagee,
have been submitted to and approved by Mortgagee.
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4.3 CONDEMNATION.
(a) Mortgagor shall immediately notify Mortgagee upon
obtaining any knowledge of the institution of any proceedings for the
condemnation of the Mortgaged Property or any part thereof.
(b) If all or any part of the Mortgaged Property
shall be damaged or taken through condemnation (which term when used in this
Mortgage shall include any damage or taking by any Governmental Authority and
any transfer by private sale in lieu thereof, either temporarily or
permanently), Mortgagee at its option may declare all of the unpaid Obligations
to be immediately due and payable, and upon ten (10) days written notice from
Mortgagee to Mortgagor all such Obligations shall immediately become due and
payable as fully and to the same effect as if such date were the date originally
specified for the final payment or maturity thereof. Subject to the rights of
the holder of the Senior Mortgage, the Mortgagee shall be entitled to all
compensation, awards and other payments resulting from such condemnation and is
hereby authorized, at its option, to commence, appear in and prosecute, in its
own or in Mortgagor's name, any action or proceeding relating to any
condemnation, and to settle or compromise any claim in connection therewith. All
such compensation, awards, damages, claims, rights of action and proceeds and
the right thereto are hereby assigned by Mortgagor to Mortgagee and shall, be
applied first to the payment of all costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) incurred by Mortgagee in
connection with any action or proceeding under this Section 4.3, and second, at
the option of Mortgagee, either to the payment of the Obligations whether or not
due, in such order as Mortgagee may elect, or to the restoration, repair or
alteration of the Mortgaged Property. If Mortgagee elects to apply the
condemnation awards to the restoration, repair or alteration of the Mortgaged
Property, such awards shall be disbursed to Mortgagor as work progresses
pursuant to a construction and disbursing agreement in form and content
satisfactory to Mortgagee in its sole discretion, and Mortgagor shall promptly
and diligently, regardless of whether there shall be sufficient condemnation
awards therefor, restore, repair and alter the Mortgaged Property in a manner
satisfactory to Mortgagee. During the period of restoration, repair and
alteration, the Mortgagor shall continue to duly and promptly pay, perform,
observe and comply with all of the Obligations. The election by Mortgagee to
apply the condemnation awards to the restoration, repair or alteration of the
Mortgaged Property shall not affect the lien of this Mortgage or affect or
reduce the Obligations. If any restoration, repair or alteration of the
Mortgaged Property shall involve an estimated expenditure of more than
$25,000.00, same shall not be commenced until plans and specifications therefor,
prepared by an architect satisfactory to Mortgagee, have been submitted to and
approved by Mortgagee.
4.4 MORTGAGOR'S RIGHT TO REBUILD THE MORTGAGED PROPERTY.
(a) Notwithstanding the provisions of Sections 4.2
and 4.3 hereof to the contrary, in the event that any portion or portions of the
Mortgaged Property are damaged or destroyed by fire or by any other casualty, or
are the subject of a "de minimis" (for purposes of this Section 4.4, the term
"de minimis" shall mean an amount, as determined by Mortgagee in its sole
discretion, which does not adversely affect the actual use of the Improvements)
condemnation, and such damage, destruction, or condemnation results in the need
for repair, rebuilding, or restoration work to be performed on the Mortgaged
Property (such repair, rebuilding, or restoration is referred to herein as the
"Work"), Mortgagee shall allow Mortgagor to use the proceeds of all insurance
policies, judgments, settlements, or awards collected with respect to such
damage, destruction, or condemnation (except such amounts as are attributable to
a loss of rents) (said net amount is defined herein as the "Reconstruction
Funds"), to perform the Work, so long as the following conditions have been met:
(i) No Event of Default exists
hereunder, under the Loan Agreement or under any other of the Loan Documents;
(ii) Mortgagor shall have delivered
evidence satisfactory to Mortgagee that the Improvements may be reconstructed in
accordance with all applicable zoning and building codes, and all rules,
regulations, and ordinances of Governmental Authorities and that, upon
completion of the Work, the condition of the Improvements will be at least equal
in value and general utility to that which existed immediately prior to such
casualty or condemnation;
(iii) Mortgagor shall have delivered
evidence satisfactory to Mortgagee that sufficient funds, including the
Reconstruction Funds, are available to perform the Work and that the Work is
capable of completion prior to the payment in full of all Contingent Returns as
set forth in the Loan Agreement; and
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(iv) Mortgagor shall have delivered
evidence satisfactory to Mortgagee that business interruption or income
insurance proceeds payable to Mortgagor as a result of the damage or destruction
or income from the Improvements, or that sources other than the Reconstruction
Funds are sufficient to cover payments of debt service, costs, and expenses on
the Project during the period the Work is to be performed. The balance of any
proceeds, assuming income from the Improvements, business interruption or income
insurance, and other sources equals or exceeds debt service under the Project
plus monthly expenses of the Mortgaged Property, shall be paid to Mortgagor.
(v) Mortgagee shall be satisfied,
in its sole discretion, that the work can be completed and the Improvements can
be ready for occupancy at least three (3) months prior to payment in full of all
of the Contingent Returns under the Loan Agreement;
(vi) All parties having existing or
expected possessory interest in the Property agree in a manner satisfactory to
Mortgagee that they will continue or extend their intent and arrangements for
the contract terms then in effect following the work;
(vii) All parties having operating,
management, or franchise intent in, and arrangement concerning the Property
agree that they will continue their interest and arrangements for the contract
terms then in effect following the work;
(viii) Mortgagee shall be satisfied
that it will not incur any liability to any other person as a result of such use
or release of insurance proceeds; and
(ix) The holder of the Senior
Mortgage agrees in writing to the terms of this Section 4.4.
(b) In the event that the conditions set forth in
Section 4.4(a) above are satisfied, Mortgagee shall make the Reconstruction
Funds available to Mortgagor for the Work only under the following procedures,
terms, and conditions:
(i) Mortgagor shall execute and
deliver to Mortgagee a copy of a contract with a licensed contractor acceptable
to Mortgagee setting forth a fixed price for the Work and a completion date
acceptable to Mortgagee;
(ii) Mortgagor shall demonstrate to
Mortgagee that the Reconstruction Funds are at least equal to the fixed price of
the Work as set forth in said contract or shall deposit with Mortgagee funds in
the amount by which such fixed price exceeds the Reconstruction Funds;
(iii) The Work shall be supervised by
an architect or engineer and performed in accordance with plans and
specifications prepared by such architect or engineer and approved by Mortgagee;
(iv) The Reconstruction Funds, plus
any additional funds deposited by Mortgagor, shall be received and held by
Mortgagee and disbursed in accordance with the terms and conditions used by
Mortgagee in connection with the a loan disbursing agreement to be prepared by
Mortgagee and Mortgagor's expense, and Mortgagor shall reimburse Mortgagee for
costs and expenses incurred in connection with such disbursements;
(v) Upon completion of and final
payment for the Work, any remaining Reconstruction Funds shall, at the option of
Mortgagee, be applied to the Obligations in such order as Mortgagee shall elect
or paid over to Mortgagor; provided, however, that in either event, any
remaining additional funds deposited by Mortgagor for excess costs shall be
refunded to Mortgagor; and
(vi) Mortgagor shall otherwise
comply with the terms and conditions of this Mortgage and the other Loan
Documents during the performance of the Work.
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(c) In the event any one or more of the conditions
set forth in Subsection 4.4(a) and 4.4(b) above is not satisfied, Mortgagee may
elect, in its sole discretion, to apply the Reconstruction Funds against the
balance of the Obligations, whether or not due, in such manner as Mortgagee
shall elect.
(d) If an Event of Default shall occur hereunder, or
if Mortgagor shall fail diligently to pursue and complete the Work, Mortgagee
may, in its sole discretion, apply any undisbursed Reconstruction Funds and any
of Mortgagor's deposits against the balance of the Obligations, whether or not
due, in such manner as Mortgagee shall elect.
4.5 FURTHER ASSURANCES. Mortgagor, at its sole expense, upon
the request of Mortgagee, shall execute, acknowledge and deliver such further
instruments and do such further acts as may, in the opinion of the Mortgagee, be
necessary, desirable, or proper to carry out more effectively the purpose of
this Mortgage and to subject to the lien hereof any property intended by the
terms hereof to be covered hereby, including, without limitation, any proceeds,
renewals, additions, substitutions, replacements, products, betterments,
accessions and appurtenances thereto and thereof.
4.6 FINANCING STATEMENTS. Mortgagor shall execute and deliver
to Mortgagee, in form and substance satisfactory to Mortgagee, such financing
statements, continuation statements, and such further assurances as Mortgagee
may from time to time consider reasonably necessary to create, perfect, preserve
and maintain in full force and effect Mortgagee's lien upon the Fixtures,
Leases, Rents and Personal Property; and, Mortgagee, at the expense of
Mortgagor, may cause such statements and assurances to be recorded and
rerecorded, filed and re-filed, in the name of Mortgagor, and Mortgagor hereby
constitutes and irrevocably appoints Mortgagee its true and lawful
attorney-in-fact, which appointment is coupled with an interest, with full power
of substitution, and empowers said attorney or attorneys in the name of
Mortgagor, but at the option of said attorney-in-fact, to execute and file any
and all financing statements.
4.7 LOAN AGREEMENT. The obligation to pay the Contingent
Returns is evidenced and governed by the Loan Agreement and secured by this
Mortgage. This Mortgage and the Loan Agreement shall always be taken and read
together as constituting parts of one transaction. All sums disbursed pursuant
to the terms of the Loan Agreement shall be secured by this Mortgage with the
same priority as if advanced on the date hereof. Mortgagor shall fully, duly and
promptly discharge each and every of its agreements contained in the Loan
Agreement and comply with, abide by and perform all of the provisions and
conditions thereof.
ARTICLE V
EVENTS OF DEFAULT
5.1 EVENTS OF DEFAULT. An "Event of Default", as used in this
Mortgage, shall occur at any time or from time to time:
(a) FAILURE TO PAY. If any Obligation or any
installment thereof is not paid within ten (10) days as and when due and
payable;
(b) FAILURE TO PERFORM. If any Obligation [other than
an Obligation requiring the payment of money) is not duly and promptly performed
or is violated and such non-performance or violation is not curable, or if
curable continues for a period of thirty (30) days after written notice thereof
from Mortgagee to Mortgagor, provided, however, if such non-performance or
violation may not reasonably be cured within such thirty (30) day period, an
Event of Default shall not be deemed to have occurred so long as same shall be
diligently and continuously endeavored to be cured. Notwithstanding the
foregoing, it shall be an Event of Default if such non-performance or violation
has not been cured within sixty (60) days after notice thereof;
(c) DEFAULT UNDER LOAN DOCUMENTS. If any Event of
Default occurs under the Loan Agreement; or
(d) NOTICE LIMITING FUTURE ADVANCES. If Mortgagor,
pursuant to Florida Statutes 697.04(1)(b) as amended from time to time, files
for record a notice limiting the maximum amount which may be secured by this
Mortgage.
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ARTICLE VI
RIGHTS AND REMEDIES
6.1 REMEDIES. If an Event of Default shall have occurred,
Mortgagee may, at its option, exercise any, some or all of the following
remedies, concurrently or consecutively.
(a) ACCELERATION. Mortgagee may declare all of the
unpaid Obligations, together with all accrued interest thereon, to be due and
payable without notice or demand which are hereby expressly waived, and upon
such declaration all such Obligations shall immediately become due and payable
as fully and to the same effect as if the date of such declaration were the date
originally specified for the full payment or maturity thereof.
(b) MORTGAGEE'S RIGHT TO ENTER AND TAKE POSSESSION,
OPERATE AND APPLY INCOME.
(i) Mortgagee may demand that
Mortgagor surrender the actual possession of the Mortgaged Property and upon
such demand, Mortgagor shall forthwith surrender same to Mortgagee and, to the
extent permitted by law, Mortgagee itself, or by such officers or agents as it
may appoint, may enter and take possession of all of the Mortgaged Property and
may exclude Mortgagor and its agents and employees wholly therefrom.
(ii) If Mortgagor shall for any
reason fail to surrender or deliver the Mortgaged Property or any part thereof
after Mortgagee's demand, Mortgagee may obtain a judgment or order conferring on
Mortgagee the right to immediate possession or requiring the Mortgagor to
deliver immediate possession to Mortgagee, to the entry of which judgment or
decree the Mortgagor hereby specifically consents.
(iii) Mortgagee may from time to
time: (A) continue and complete construction of, hold, store, use, operate,
manage and control the Mortgaged Property and conduct the business thereof; (B)
make all reasonably necessary maintenance, repairs, renewals, replacements,
additions, betterments and improvements thereto and thereon and purchase or
otherwise acquire additional Fixtures and Personal Property; (C) insure or keep
the Mortgaged Property insured; (D) exercise all the rights and powers of the
Mortgagor in its name or otherwise with respect to the same; and (E) enter into
agreements with others (including, without limitation, new Leases or amendments,
extensions, or cancellations to existing Leases) all as Mortgagee from time to
time may determine in its sole discretion. Mortgagor hereby constitutes and
irrevocably appoints Mortgagee its true and lawful attorney-in-fact, which
appointment is coupled with an interest, with full power of substitution, and
empowers said attorney or attorneys in the name of Mortgagor, but at the option
of said attorney-in-fact, to do any and all acts and execute any and all
agreements that Mortgagee may deem necessary or proper to implement and perform
any and all of the foregoing.
(iv) The Mortgagee may, with or
without taking possession of the Mortgaged Property as hereinabove provided,
collect and receive all the Rents therefrom, including those past due as well as
those accruing thereafter, and shall apply the monies so received first, to the
payment of all costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred by Mortgagee and its agents in connection
with the collection of same, whether or not in possession of the Mortgaged
Property, and second, in such order as Mortgagee may elect, to the payment of
the Obligations.
(c) PROCEEDINGS TO RECOVER SUMS DUE.
(i) If any installment or part of
any Obligation shall fail to be paid when due, Mortgagee shall be entitled to
xxx for and to recover judgment against the Mortgagor for the amount so due and
unpaid together with all costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred by Mortgagee in connection
with such proceeding, together with interest thereon at the Default Rate from
the date incurred by Mortgagee. All such costs and expenses shall be secured by
this Mortgage and shall be due and payable by Mortgagor immediately.
(ii) If Mortgagor shall fail to pay
upon the Mortgagee's demand, after acceleration as provided in Subsection
8.1(a), all of the unpaid Obligations, together with all accrued interest
thereon, Mortgagee shall
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be entitled to xxx for and to recover judgment against the Mortgagor for the
entire amount so due and unpaid together with all costs and expenses (including,
without limitation, reasonable attorneys' fees and expenses) incurred by
Mortgagee in connection with such proceeding, together with interest thereon at
the Default Rate from the date incurred by Mortgagee. All such costs and
expenses shall be secured by this Mortgage and shall be payable by Mortgagor
immediately. Mortgagee's right under this Sub-section (ii) may be exercised by
Mortgagee either before, after or during the pendency of any proceedings for the
enforcement of this Mortgage, including appellate proceedings.
(iii) No recovery of any judgment as
provided in Subsections (i) and (ii) above and no attachment or levy of any
execution upon any of the Mortgaged Property or any other property shall in any
way affect the lien of this Mortgage upon the Mortgaged Property or any part
thereof, or any lien, rights, powers, or remedies of Mortgagee hereunder, but
such lien, rights, powers and remedies shall continue unimpaired as before.
(d) FORECLOSURE.
(i) Mortgagee may institute
proceedings for the partial or complete foreclosure of this Mortgage and
Mortgagee may, pursuant to any final judgment of foreclosure, sell the Mortgaged
Property as an entirety or in separate lots, units, or parcels.
(ii) In case of a foreclosure sale
of all or any part of the Mortgaged Property, the proceeds of sale shall be
applied in accordance with Section 8.8 hereof, and the Mortgagee shall be
entitled to seek a deficiency judgment against the Mortgagor to enforce payment
of any and all Obligations then remaining due and unpaid, together with interest
thereon, and to recover a judgment against the Mortgagor therefor.
(iii) The Mortgagee is authorized to
foreclose this Mortgage subject to the rights of any tenants of the Mortgaged
Property, or Mortgagee may elect which tenants Mortgagee desires to name as
parties defendant in such foreclosure and failure to make any such tenants
parties defendant to any such foreclosure proceedings and to foreclose their
rights will not be, nor be asserted by the Mortgagor to be, a defense to any
proceedings instituted by the Mortgagee to collect the unpaid Obligations or to
collect any deficiency remaining unpaid after the foreclosure sale of the
Mortgaged Property.
(e) RECEIVER. Mortgagee may apply to any court of
competent jurisdiction to have a receiver appointed to enter upon and take
possession of the Mortgaged Property, collect the Rents therefrom and apply the
same as the court may direct, such receiver to have all of the rights and powers
permitted under the laws of the State of Florida. The right of the appointment
of such receiver shall be a matter of strict right without regard to the value
or the occupancy of the Mortgaged Property or the solvency or insolvency of
Mortgagor. The expenses, including receiver's fees, attorneys' fees, costs and
agent's commission incurred pursuant to the powers herein contained, together
with interest thereon at the Default Rate, shall be secured hereby and shall be
due and payable by Mortgagor immediately without notice or demand.
Notwithstanding the appointment of any receiver or other custodian, Mortgagee
shall be entitled as pledgee to the possession and control of any cash or
deposits at the time held by, payable, or deliverable under the terms of this
Mortgage to the Mortgagee, and the Mortgagee shall have the right to offset the
unpaid Obligations against any such cash or deposits in such order as Mortgagee
may elect.
(f) REMEDIES AS TO PERSONAL PROPERTY. Mortgagee may
exercise any or all of its rights and remedies under the Uniform Commercial
Code-Secured Transactions as adopted by the State of Florida or other applicable
law as well as all other rights and remedies possessed by Mortgagee, all of
which shall be cumulative. Mortgagee is hereby authorized and empowered to enter
the Mortgaged Property or other place where the Personal Property may be located
without legal process, and to take possession of the Personal Property without
notice or demand, which hereby are waived to the maximum extent permitted by the
laws of the State of Florida. Upon demand by Mortgagee, Mortgagor shall make the
Personal Property available to Mortgagee at a place reasonably convenient to
Mortgagee. Mortgagee may sell at one or more public or private sales and for
such price as Mortgagee may deem commercially reasonable, any and all of the
Personal Property secured by this Mortgage, and any other security or property
held by Mortgagee and Mortgagee may be the purchaser of any or all of the
Personal Property.
(g) OTHER. Mortgagee may institute and maintain any
suits and proceedings as the Mortgagee may deem advisable (i) to prevent any
impairment of the Mortgaged Property by any acts which may be unlawful or in
violation of
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this Mortgage, (ii) to preserve or protect its interest in the Mortgaged
Property, and (iii) to restrain the enforcement of or compliance with any
Governmental Requirement that may be unconstitutional or otherwise invalid, if
the enforcement of or compliance with such Governmental Requirement might impair
the security hereunder or be prejudicial to the Mortgagee's interest.
6.2 REMEDIES CUMULATIVE AND CONCURRENT. No right, power or
remedy of Mortgagee as provided in the Loan Agreement or the other applicable
Loan Documents with respect to the Contingent Returns is intended to be
exclusive of any other right, power, or remedy of Mortgagee, but each and every
such right, power and remedy shall be cumulative and concurrent and in addition
to any other right, power or remedy available to Mortgagee now or hereafter
existing at law or in equity and may be pursued separately, successively or
together against Mortgagor, any Guarantor, or any endorser, co-maker, surety or
guarantor of the Obligations, or the Mortgaged Property or any part thereof, or
any one or more of them, at the sole discretion of Mortgagee. The failure of
Mortgagee to exercise any such right, power or remedy shall in no event be
construed as a waiver or release thereof.
6.3 WAIVER, DELAY OR OMISSION. No waiver of any Event of
Default hereunder shall extend to or affect any subsequent or any other Event of
Default then existing, or impair any rights, powers or remedies consequent
thereon, and no delay or omission of Mortgagee to exercise any right, power or
remedy shall be construed to waive any such Event of Default or to constitute
acquiescence therein.
6.4 CREDIT OF MORTGAGEE. To the maximum extent permitted by
the laws of the State of Florida, upon any sale made under or by virtue of this
Article, Mortgagee may bid for and acquire the Mortgaged Property, or any part
thereof, and in lieu of paying cash therefor may apply to the purchase price,
any portion of or all of the unpaid Obligations in such order as Mortgagee may
elect.
6.5 SALE. Any sale or sales made under or by virtue of this
Article shall operate to divest all the estate, right, title, interest, claim
and demand whatsoever at law or in equity, of the Mortgagor and all Persons,
except tenants pursuant to Leases approved by Mortgagee, claiming by, through or
under Mortgagor in and to the properties and rights so sold, whether sold to
Mortgagee or to others.
6.6 PROOFS OF CLAIM. In the case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition,
seizure of the Mortgaged Property by any Governmental Authority, or other
judicial proceedings affecting the Mortgagor, any Guarantor, any endorser,
co-maker, surety, or guarantor of the Obligations, or any of their respective
properties, the Mortgagee, to the extent permitted by law, shall be entitled to
file such proofs of claim and other documents as may be necessary or advisable
in order to have its claim allowed in such proceedings for the entire unpaid
Obligations at the date of the institution of such proceedings, and for any
additional amounts which may become due and payable after such date.
6.7 WAIVER OF REDEMPTION, NOTICE, MARSHALING, ETC. Mortgagor
hereby waives and releases, for itself and anyone claiming through, by, or under
it, to the maximum extent permitted by the laws of the State of Florida:
(a) all benefit that might accrue to Mortgagor by
virtue of any present or future law exempting the Mortgaged Property, or any
part of the proceeds arising from any sale thereof, from attachment, levy or
sale on execution, or providing for any appraisement, valuation, stay of
execution, exemption from civil process, redemption or extension of time for
payment,
(b) unless specifically required herein, all notices
of default, or Mortgagee's actual exercise of any option or remedy under the
Loan Documents, or otherwise, and
(c) any right to have the Mortgaged Property
marshaled.
6.8 APPLICATION OF PROCEEDS. The proceeds of any sale of all
or any portion of the Mortgaged Property shall be applied by Mortgagee first, to
the payment of receiver's fees and expenses, if any, and to the payment of all
costs and expenses (including, without limitation, reasonable attorneys' fees
and expenses) incurred by Mortgagee, together with interest thereon at the
Default Rate from the date so incurred, in connection with any entry, action or
proceeding under this Article and, second, in such order as Mortgagee may elect,
to the payment of the Obligations. Mortgagor shall be and remain liable to
Mortgagee for any difference between the net proceeds of sale and the amount of
the Obligations until all of the Obligations have been paid in full.
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6.9 DISCONTINUANCE OF PROCEEDINGS. If Mortgagee shall have
proceeded to enforce any right under any Loan Document and such proceedings
shall have been discontinued or abandoned for any reason, then except as may be
provided in any written agreement between Mortgagor and Mortgagee providing for
the discontinuance or abandonment of such proceedings, Mortgagor and Mortgagee
shall be restored to their former positions and the rights, remedies and powers
of Mortgagee shall continue as if no such proceedings had been instituted.
6.10 MORTGAGEE'S ACTIONS. Mortgagee may, at any time without
notice to any Person and without consideration, do or refrain from doing any or
all of the following actions, and neither the Mortgagor, any Guarantor, any
endorser, co-maker, surety or guarantor of the Obligations, nor any other Person
(hereinafter in this Section 8.10 collectively referred to as the "Obligor") now
or hereafter liable for the payment and performance of the Obligations shall be
relieved from the payment and performance thereof, unless specifically released
in writing by Mortgagee: (a) renew, extend or modify the terms of the Loan
Agreement, this Mortgage or the other applicable Loan Documents that pertain to
the Contingent Returns or any of them; (b) forbear or extend the time for the
payment or performance of any or all of the Obligations; (c) apply payments by
any Obligor to the reduction of the unpaid Obligations in such manner, in such
amounts, and at such times and in such order and priority as Mortgagee may see
fit; (d) release any Obligor; (e) substitute or release in whole or in part the
Mortgaged Property or any other collateral or any portion thereof now or
hereafter held as security for the Obligations without affecting, disturbing or
impairing in any manner whatsoever the validity and priority of the lien of this
Mortgage upon the Mortgaged Property which is not released or substituted, or
the validity and priority of any security interest of the Mortgagee in such
other collateral which is not released or substituted; (f) subordinate the lien
of this Mortgage or the lien of any other security interest in any other
collateral now or hereafter held as security for the Obligations; (g) join in
the execution of a plat or replat of the Land; (h) join in and consent to the
filing of a declaration of condominium or declaration of restrictive covenants
regarding all or any part of the Land; (i) consent to the granting of any
easement on the Land; and (j) generally deal with any Obligor or any other party
as Mortgagee may see fit.
ARTICLE VII
MISCELLANEOUS
7.1 CONTINUING AGREEMENT. This Mortgage and all of the
Mortgagor's representations, warranties and covenants herein, Mortgagee's
security interest in the Mortgaged Property and all of the rights, powers and
remedies of Mortgagee hereunder shall continue in full force and effect until
all of the Obligations have been paid and performed in full; until Mortgagee has
no further obligation to make any advances under the Loan Agreement or other
Loan Documents; and until Mortgagee, upon the request of the Mortgagor, has
executed a satisfaction of mortgage. Furthermore, if for any reason no
Obligations are owing, notwithstanding such occurrence, this Mortgage shall
remain valid and in full force and effect as to subsequent Obligations, so long
as Mortgagee has not executed a satisfaction of mortgage; provided, however,
that the indemnifications set forth in Article V of this Mortgage shall survive
the satisfaction of this Mortgage.
7.2 SURVIVAL OF WARRANTIES AND COVENANTS. The warranties,
representations, covenants and agreements set forth in this Mortgage shall
survive the execution of the Loan Agreement, and shall continue in full force
and effect until all of the Obligations shall have been paid and performed in
full.
7.3 NO REPRESENTATION BY MORTGAGEE. By accepting or approving
anything required to be observed, performed or fulfilled, or to be given to
Mortgagee, pursuant to this Mortgage, or the other Loan Documents, or the
Commitment, including, but not limited to, any officer's certificate, balance
sheet, statement, survey or appraisal, Mortgagee shall not be deemed to have
warranted or represented the sufficiency, legality, effectiveness or legal
effect of the same, or of any term, provision or condition thereof, and such
acceptance or approval thereof shall not be or constitute any warranty or
representation with respect thereto by Mortgagee.
7.4 NOTICE. All notices, demands, requests and other
communications required under this Mortgage shall be given in accordance with
the terms of the Loan Agreement.
7.5 COVENANTS RUNNING WITH THE LAND. All covenants contained
in this Mortgage shall be binding on the Mortgagor and shall run with the Land.
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7.6 SUCCESSORS AND ASSIGNS. All of the terms of this Mortgage
shall apply to and be binding upon, and inure to the benefit of, the heirs,
devisees, personal representatives, successors and assigns of Mortgagor and
Mortgagee, respectively, and all persons claiming under or through them.
7.7 INVALIDITY.
(a) If any one or more of the provisions contained in
this Mortgage is declared or found by a court of competent jurisdiction to be
invalid, illegal, or unenforceable, such provision or portion thereof shall be
deemed stricken and severed and the remaining provisions hereof shall continue
in full force and effect.
(b) If any one or more of the Obligations is declared
or found by a court of competent jurisdiction to be invalid, illegal, or
unenforceable, the validity, legality and enforceability of the remaining
Obligations shall continue in full force and effect.
7.8 MODIFICATION. No agreement unless in writing and signed by
an authorized officer of Mortgagee and no course of dealing between the parties
hereto shall be effective to change, waive, terminate, modify, discharge, or
release in whole or in part any provision of this Mortgage. No waiver of any
rights or powers of Mortgagee or consent by it shall be valid unless in writing
signed by an authorized officer of Mortgagee and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
7.9 APPLICABLE LAW. This Mortgage shall be construed,
interpreted, enforced and governed by and in accordance with the laws of the
State of Florida (excluding the principles thereof governing conflicts of law),
and federal law, in the event federal law permits a higher rate of interest than
Florida law.
7.10 [Intentionally Deleted]
7.11 STRICT PERFORMANCE. It is specifically agreed that time
is of the essence as to all matters provided for in this Mortgage and that no
waiver of any Obligation hereunder or secured hereby shall at any time
thereafter be held to be a waiver of the Obligations.
7.12 WAIVER OF TRIAL BY JURY. MORTGAGOR AND MORTGAGEE (BY
ACCEPTANCE OF THIS INSTRUMENT) HEREBY KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS MORTGAGE, OR ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS MORTGAGE, THE LOAN AGREEMENT, OR ANY OTHER
APPLICABLE LOAN DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO OR TO ANY
LOAN DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR MORTGAGOR AND
MORTGAGEE ENTERING INTO THE SUBJECT LOAN TRANSACTION.
IN WITNESS WHEREOF, Mortgagor has executed this instrument as
of the day and year first above written.
Signed, sealed and delivered
in the presence of:
TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida
corporation
_____________________________
Print Name:__________________
By: ___________________________________________
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Name: _________________________________________
_____________________________ Title: ________________________________________
Print Name:__________________
[CORPORATE SEAL]
STATE OF FLORIDA )
) ss.:
COUNTY OF ______ )
The foregoing instrument was acknowledged before me this _____ day of
_________________, 1996, by ___________________________________________, as
_______________________ of TRANSEASTERN PEMBROKE VILLAGES, INC., a Florida
corporation, on behalf of the corporation. He/she is personally known to me or
has produced a driver's license as identification and did not take an oath.
____________________________________________
Print or Stamp Name: _______________________
Notary Public, State of Florida at Large
Commission No.:
My Commission Expires:
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This Instrument Was Prepared By:
Xxxxxx X. Xxxxxx, Esq.
Gunster, Yoakley, Xxxxxx-Xxxxx & Xxxxxxx, P.A.
Suite 1400
000 X. Xxxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
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EXHIBIT "A"
LEGAL DESCRIPTION
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