AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT, dated as of the 1st day of
January, 1998, by and between COMMUNITY ACQUISITION AND DEVELOPMENT CORPORATION,
a Delaware corporation ("CADC"), COMMUNITY CASA DEL MAR JOINT VENTURE, a
Delaware general partnership ("Casa del Mar JV"), COMMUNITY SUNLAKE JOINT
VENTURE, a Delaware general partnership ("Sunlake JV"), COMMUNITY BRENTWOOD
JOINT VENTURE, a Delaware general partnership ("Brentwood JV"), COMMUNITY
SAVANNA CLUB JOINT VENTURE, a Delaware general partnership ("Savanna Club JV"),
COMMUNITY BLUE HERON PINES CORPORATION, a Florida corporation ("Blue Heron
Corporation"), COMMUNITY SUNLAKE CORPORATION, a Florida corporation ("Sunlake
Corporation"), COMMUNITY BRENTWOOD CORPORATION, a Florida corporation
("Brentwood Corporation"), COMMUNITY SAVANNA CLUB CORPORATION, a Florida
corporation ("Savanna Club Corporation"), and ROYAL PALM VILLAGE, LLC, a Georgia
limited liability company ("Royal Palm") (hereinafter, CADC, Casa del Mar JV,
Sunlake JV, Brentwood JV, Savanna Club JV and Royal Palm are collectively
referred to as the "Borrowers" and, Blue Heron Corporation, Sunlake Corporation,
Brentwood Corporation, and Savannah Club Corporation are collectively referred
to as "Guarantors") and ASSET INVESTORS OPERATING PARTNERSHIP, L.P., a Delaware
limited partnership (hereinafter referred to as "Lender").
W I T N E S S E T H :
WHEREAS, Borrowers, Guarantors and Lender entered into that certain
Loan Agreement dated as of January 1, 1998 (the "Original Loan Agreement");
WHEREAS, Borrowers, Guarantors and Lender are desirous of amending and
restating the Original Loan Agreement in its entirety, as more particularly set
forth herein below;
WHEREAS, CADC is the owner of a ninety-nine percent (99%) general
partnership interest in Casa Del Mar JV, Sunlake JV, Brentwood JV, and Savanna
Club JV; and
WHEREAS, Blue Heron Corporation is the owner of a one percent (1%)
general partnership interest in Casa del Mar JV; and
WHEREAS, Sunlake Corporation is the owner of a one percent (1%) general
partnership interest in Sunlake JV; and
WHEREAS, Brentwood Corporation is the owner of a one percent (1%)
general partnership interest in Brentwood JV; and
WHEREAS, Savanna Club Corporation is the owner of a one percent (1%)
general partnership interest in Savanna Club JV; and
WHEREAS, CADC is the fee simple owner of the undeveloped portion of the
Park Royale Mobile Home Park ("Park Royale Mobile Home Park"), which undeveloped
portion is legally described on Exhibit "A" attached hereto and incorporated
herein by reference; and
WHEREAS, CADC is the fee simple owner of the undeveloped portion of the
Stonebrook Mobile Home Park ("Stonebrook Mobile Home Park"), which undeveloped
portion is legally described on Exhibit "B" attached hereto and incorporated
herein by reference; and
WHEREAS, CADC is the fee simple owner of the undeveloped portion of the
Forest View Mobile Home Park ("Forest View Mobile Home Park"), which undeveloped
portion is legally described on Exhibit "C" attached hereto and incorporated
herein by reference; and
WHEREAS, Royal Palm is the fee simple owner of that certain mobile home
park commonly known as Royal Palm Mobile Home Park ("Royal Palm Mobile Home
Park") and located on the property legally described on Exhibit "D" attached
hereto and incorporated herein by reference; and
WHEREAS, Casa del Mar JV is the owner of that certain mobile home park
commonly known as Blue Heron Pines Mobile Home Park ("Blue Heron Pines Mobile
Home Park") and located on the property legally described on Exhibit "E"
attached hereto and incorporated herein by reference; and
WHEREAS, Sunlake JV is the owner of that certain mobile home park
commonly known as Sunlake Mobile Home Park ("Sunlake Mobile Home Park") and
located on the property legally described on Exhibit "F" attached hereto and
incorporated herein by reference; and
WHEREAS, Brentwood JV is the owner of that certain mobile home park
commonly known as Brentwood Mobile Home Park ("Brentwood Mobile Home Park") and
located on the property legally described on Exhibit "G" attached hereto and
incorporated herein by reference; and
WHEREAS, Savanna Club JV is the owner of the model center and Phases IV
through X, inclusive, that certain mobile home park commonly known as Savanna
Club Mobile Home Park ("Savanna Club Mobile Home Park") and located on the
property legally described on Exhibit "H" attached hereto and incorporated
herein by reference; and
WHEREAS, Borrowers and Guarantors previously applied to Lender for a
revolving credit loan in the maximum principal amount of Twenty Million and
00/100 Dollars ($20,000,000.00) as evidenced by that certain revolving credit
promissory note dated January 1, 1998 in the maximum principal amount of
$20,000,000.00, as said note has been renewed of even date herewith solely by
the Borrowers pursuant to that certain renewal revolving credit promissory note
in the maximum principal amount of $20,000,000.00 (the "Loan:); and
WHEREAS, Guarantors have agreed to guarantee the Loan; and
WHEREAS, Borrowers, Guarantors and Lender have negotiated the terms and
conditions of, and wish to enter into, this Agreement in order to set forth the
terms and conditions of the disbursement and repayment of the Loan.
NOW, THEREFORE, in consideration of the premises, and of the Guarantors
mutual covenants and agreements set forth below, Borrowers and Lender agree as
follows:
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1. DEFINITIONS. As used in this Agreement the terms listed below shall
have the following meanings unless otherwise required by the context:
(a) "Additional Contingent Interest" shall mean that term as
defined in Paragraph 7 hereof.
(b) "Advance" shall mean an advance of money made by Lender to one
or more of the Borrowers pursuant to the provisions of paragraph 2 hereof,
including, without limitation, all advances made prior to the date hereof.
(c) "Affiliate" shall mean any entity in which a Borrower or
Guarantor, or a shareholder, partner or member of a Borrower or Guarantor owns,
directly or indirectly, ten (10%) percent or more of the capital interests or
voting power thereof, or any individual or entity which owns, directly or
indirectly, ten (10%) percent or more of the capital interests or voting power
of any Borrower or shareholders, partners or members thereof.
(d) "Applicable Tranche" shall mean the Casa Del Mar Tranche, the
Sunlake Tranche, the Brentwood Tranche, the Savanna Club Tranche, Park Royale
Tranche, Stonebrook Tranche, Forest View Tranche, and the Royal Palm Tranche.
(e) "Appraiser" shall mean an independent MAI appraiser designated
or approved by the Lender.
(f) "Assignment of Leases, Rents and Contract Rights" shall mean
the Assignment of Leases, Rents and Contract Rights dated of even date herewith
from Borrowers assigning to Lender all of its right, title and interest in and
to all agreements for the leasing of the Property or any part thereof, if any,
and all rents, issues and profits derived or to be derived from the Property.
(g) "Assignment of Permits, Agreements, Approvals, Fees and
Deposits" shall mean the Assignment of Permits, Agreements, Approvals, Fees and
Deposits of even date herewith from Borrowers assigning to Lender all contract
rights, sewer tap rights, utility commitments, licenses and agreements
pertaining directly or indirectly to the Property and the development thereof.
(h) "Brentwood Tranche" shall mean all Advances of the Loan made
by Lender to fund acquisition, development and operating expenses for the
Brentwood Mobile Home Park.
(i) "Budget" shall have the meaning set forth in paragraph 3
hereinbelow.
(j) "Business Day" shall mean a day of the year on which banks in
Denver, Colorado, are open for business.
(k) "Capital Expenditures" shall mean those arms-length
expenditures customarily characterized as capital expenditures in accordance
with generally accepted accounting principles consistently applied.
(l) "Casa del Mar Tranche" shall mean all Advances of the Loan
made by Lender to fund acquisition, development and operating expenses for the
Blue Heron Mobile Home Park.
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(m) "CPI" shall mean the United States Department of Labor
Statistics Consumer Price Index for All Urban Consumers - U.S. City Average for
"All Items" (1982-1984=100).
(n) "Construction Improvements" shall mean those facilities,
including, but not limited to, manufactured housing pads, driveways, Set-ups,
infrastructure, utilities, irrigation and landscaping to be constructed on the
Property by the Borrowers.
(o) "Contingent Interest" shall mean that term as defined in
Paragraph 6 hereof.
(p) "Conversion" shall mean the process whereby any of the
Projects are conveyed, sold, transferred or otherwise converted into a resident
owned community through the use of a cooperative, condominium or other
homeowners' association regime, limited partnership or other entity, which are
developer sponsored or third party initiated programs.
(q) "Conveyance" shall mean the sale, transfer or conveyance of
any of the Projects or any direct or indirect interest therein (other than a
lease of a mobile home pad for a term of less than two (2) years), or the
exchange thereof for other real property, or the sale, transfer or conveyance of
any direct or indirect interest in any entity which owns or otherwise has a
direct or indirect interest in any of the Projects, or any portion thereof,
whether as lessee or operator or otherwise), whether to a third party purchaser
in an arms-length transaction, or in connection with a judicial or non-judicial
foreclosure sale or the acceptance of a deed-in-lieu of foreclosure, or in
connection with the exercise of the power of condemnation or eminent domain with
respect to any of the Projects, or otherwise.
(r) "Debt Service" shall mean all Regular Interest and Deferred
Regular Interest (and expressly excluding Contingent Interest and Additional
Contingent Interest) and any other charges actually paid from time to time by
the Borrowers to the Lender after the date hereof pursuant to the Note.
(s) "Deferred Regular Interest" shall mean interest computed daily
at the rate of three percent (3%) per annum on the outstanding amount of the
Sunlake Tranche, Brentwood Tranche and the Casa del Mar Tranche made with
respect to Blue Heron Pines Mobile Home Park, Sunlake Mobile Home Park, and/or
Brentwood Mobile Home Park, taking into account the total return received by
Lender with respect to the portion of the Loan encumbering Blue Heron Pines
Mobile Home Park, Sunlake Mobile Home Park and Brentwood Mobile Home Park plus
the return received by Lender from Pinewood Mobile Home Park and Pleasant Living
Mobile Home Park (which are owned in fee simple by Lender). Said interest shall
be computed based upon a 360 day year for the actual number of days outstanding.
Said interest shall accrue and shall be due and payable contemporaneously with
the obligation to pay Additional Contingent Interest which arises due to the
Conveyance or Financing of Blue Heron Pines Mobile Home Park, Sunlake Mobile
Home Park, and/or Brentwood Mobile Home Park.
(t) "Development Fee" shall mean the sum equal to seven and
one-half percent (7.5%) of hard costs, up to One Million Dollars ($1,000,000.00)
and five percent (5%) thereafter of the costs to construct Construction
Improvements with respect to each applicable Project, as said development fee is
more particularly set forth in the Budget for each Project.
(u) "Event of Default" shall mean that term as defined in
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paragraph 9 hereinbelow.
(v) "Expenses" shall mean the aggregate amount of monies actually
paid by the Borrowers in connection with the operation of the Projects pursuant
to arms-length transactions during each respective Loan Quarter and Loan Year,
as the case may be, except as hereinafter provided to the contrary, for (i) Debt
Service, (ii) Labor Costs, (iii) general maintenance, repairs and replacements,
(iv) premiums actually paid by the Borrowers for insurance customarily carried
for property comparable to the Projects (which premiums, to the extent they do
not relate to policies of insurance required to be maintained by the Borrowers
under the Mortgage or this Loan Agreement, shall be subject to the Lender's
prior written approval), (v) charges (including applicable taxes) for or in
connection with electricity, fuel oil and other utilities at the Projects (vi)
real estate taxes, assessments, water charges and sewer rents, (vii) customary
and reasonable accounting and auditing expenses and customary and reasonable
attorneys' fees, (viii) management fees paid to a managing agent reasonably
approved by the Lender in its sole discretion, which management fees shall not
exceed such amounts as the Lender reasonably deems to be commercially reasonable
(it being agreed that a management fee of six percent (6%) or less is
commercially reasonable), (ix) fees paid to unaffiliated third parties for
consulting, engineering or other professional services provided that such fees
are customary and commercially reasonable in amount, (x) other expenses which
are not discretionary and are required by law, and (xi) other commercially
reasonable expenses in connection with, and related solely to, the operation and
maintenance of the Projects which are usual and customary for comparable
properties located in the vicinity of the Projects and which are paid in
accordance with the Budget for the respective Projects that has been approved in
writing by the Lender, which approval shall not be unreasonably withheld. All of
the foregoing items shall be substantiated by evidence satisfactory to the
Lender. Without limiting the generality of those items which shall not be
included in, or which shall be excluded from, Expenses, the following shall be
specifically excluded from, Expenses:
(i) general overhead expenses of the Borrowers, whether in
connection with the operation of the Property or otherwise;
(ii) depreciation, amortization and other non-cash items;
(iii) prepaid expenses which are not customarily prepaid in
the ordinary course of business;
(iv) Capital Expenditures (other than Capital Expenditures
which relate to minor capital improvements, which shall be deemed to be an
Expense but only (x) if the Lender shall have approved same in writing,
which approval shall not be unreasonably withheld and (y) in an amount not
to exceed for the applicable period, the amortization for such improvements
determined on a straight line basis over the useful life of the improvement
in accordance with generally accepted accounting principles, consistently
applied); and
(v) any cost, fee, expense or item which the Borrowers
characterize as either Financing Expenses or Transfer Expenses.
(w) "Financing" shall mean (i) any mortgage or other secured
transaction closed in connection with a refinancing of any portion of this Loan,
(ii) any refinancing of any mortgage or other secured transaction which was
closed in connection with a refinancing of this Loan (and any refinancing(s)
from time to time of any such refinancing(s)) and (iii) any mortgage (other than
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the Mortgage) or other secured transaction which constitutes a lien on the
Property, or any portion thereof, whether or not consented to by the Lender.
(x) "Financing Expenses" shall mean the aggregate amount of monies
actually paid by the Borrowers pursuant to arms-length transactions in
connection with a Financing for customary and reasonable closing costs, fees and
expenses incurred in connection with the closing of a Financing, which costs,
fees and expenses are subject to the prior written reasonable approval of the
Lender in its sole discretion. All of the foregoing items shall be substantiated
by evidence satisfactory to the Lender.
(y) "Financing Proceeds" shall mean the principal amount of any
Financing.
(z) "Financing Statements" shall mean the financing statements
from Borrowers to Lender to perfect Lender's security interest in the personal
property described in the Mortgage.
(aa) "Forest View Tranche" shall mean all Advances of the Loan
made by Lender to fund acquisition, development and operating expenses for the
Forest View Mobile Home Park.
(bb) "Gross Income" shall mean the aggregate of all income from
all sources in respect of the Projects (solely to the extent such income
qualifies as rents from real property within the meaning of Section 856(d) of
the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"))
received by the Borrowers for each respective Loan Quarter and Loan Year, as
case may be, other than (i) Sales Proceeds, (ii) Financing Proceeds, (iii)
condemnation awards and insurance proceeds (except for the proceeds of rental
loss insurance, which shall be deemed to be Gross Income) to the extent actually
used by Borrowers to restore the affected Project and (iv) security deposits,
except to the extent such sums are applied to the payment of any rent,
additional rent or other sums due under any of the Leases. Notwithstanding
anything in this Amended and Restated Loan Agreement or Loan Documents to the
contrary, if there is a final determination by the Internal Revenue Service, or
court of competent jurisdiction or if Lender determines that any of the income
which constitutes a portion of the Gross Income did not constitute rent from
real property within the meaning of Section 856(d) of the Internal Revenue Code
and was erroneously included within the Gross Income for purposes of determining
Net Cash Flow and the amount of Contingent Interest payable to Lender, then,
without prejudice to any other remedies that lender might have, lender will
promptly refund to appropriate Borrower the resultant amount of Contingent
Interest received in error. Parties further agree to treat the repayment of any
such Contingent Interest to extent possible, as a retroactive adjustment to
Contingent Interest for all tax and other purposes.
(cc) "Labor Costs" shall mean all customary and reasonable
expenses actually paid by the Borrowers out of funds other than the proceeds of
the Loan pursuant to arms-length transactions during any Loan Quarter which are
directly related to the employment of personnel whose responsibilities relate
solely to the Projects including amounts paid for wages, salaries and other
compensation for services, payroll, social security, unemployment and other
similar taxes, worker's compensation insurance, disability benefits, pensions,
hospitalization, retirement plans and group insurance, uniforms and working
clothes and the cleaning thereof, and expenses imposed pursuant to any
collective bargaining agreement.
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(dd) "Leases" shall mean all leases, subleases or occupancy
agreements affecting the Property or any portion thereof.
(ee) "Loan Quarter" shall mean the period beginning on the date
hereof and ending March 31, 1998 and each subsequent three (3) calendar month
period thereafter until all Additional Contingent Interest pursuant to Paragraph
7 hereof shall have been paid.
(ff) "Loan Year" shall mean the period beginning on the date
hereof and ending on December 31, 1998, and each subsequent twelve (12) calendar
month period thereafter until all Additional Contingent Interest pursuant to
Paragraph 6 hereof shall have been paid.
(gg) "Loan Agreement" shall mean this Amended and Restated Loan
Agreement and any and all amendments, modifications, renewals, replacements,
extensions and substitutions thereof or therefor.
(hh) "Loan Document" shall mean, collectively, the Note, the
Mortgage, this Amended and Restated Loan Agreement and any other mortgage, note,
loan agreement, document, instrument, agreement and guaranty evidencing,
securing or otherwise relating to the Loan, now or hereafter executed and
delivered, and any and all amendments, modifications, renewals, extensions and
replacements thereof and substitutions therefor.
(ii) "Maturity Date" shall mean the earlier of December 31, 2018
(the "Stated Maturity Date"), or the date upon which the indebtedness evidenced
hereby becomes due and payable by reason of the occurrence of a Event of
Default.
(jj) "Mortgage" shall mean that certain Amended and Restated
Mortgage and Security Agreement dated as of even date herewith, executed and
delivered by the Borrowers in favor of the Lender in connection with the Loan
and encumbering the Property, and any and all amendments, modifications,
renewals, increases, replacements, additions, consolidations, spreaders,
extensions, re-advances and substitutions thereof or therefor.
(kk) "Net Cash Flow" shall mean, for each respective Loan Quarter
and Loan Year, as the case may be, the amount, if any, by which Gross Income
exceeds Expenses for such Loan Quarter or Loan Year.
(ll) "Net Financing Proceeds" shall mean the amount, if any, by
which Financing Proceeds exceeds Financing Expenses relating to a Financing.
(mm) "Net Sales Proceeds" shall mean the amount, if any, by which
Sales Proceeds exceeds Transfer Expenses.
(nn) "Note" shall mean the Revolving credit promissory note of
even date herewith from Borrowers to the order of Lender in the principal amount
of $20,000,000.00 evidencing the Loan.
(oo) "Park Royale Tranche" shall mean all Advances of the Loan
made by Lender to fund acquisition, development and operating expenses for the
Park Royale Mobile Home Park.
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(pp) "Projects" shall mean collectively the Park Royale Mobile
Home, the Stonebrook Mobile Home Park, the Forest View Mobile Home Park, the
Royal Palm Mobile Home Park, the Blue Heron Pines Mobile Home Park, the Sunlake
Mobile Home Park, the Brentwood Mobile Home Park, and the Savanna Club Mobile
Home Park.
(qq) "Property" shall mean the real property described on Exhibit
"A" through "H" attached hereto and incorporated herein by reference.
(rr) "Regular Interest" shall mean interest computed daily at the
rate of ten percent (10%) per annum on the outstanding amount of all the
Applicable Tranches. Said interest shall be computed based upon a 360 day year
for the actual number of days outstanding. Said interest shall only be due and
payable to the extent the Net Cash Flow is sufficient. To the extent the Net
Cash Flow is insufficient, said interest shall accrue until the Net Cash Flow is
sufficient to pay such accrued interest. Notwithstanding anything in the Note,
the Mortgage or this Loan Agreement to the contrary, Regular Interest may accrue
and remain unpaid from the effective date of the Note through December 31, 2002,
commencing January 1, 2003, and annually thereafter, Borrowers shall be
obligated to insure that all Regular Interest that accrues during any such
annual period shall be paid currently on or before the last day of each such
year. Failure to insure that all Regular Interest that accrues for the year 2003
and each year thereafter is paid in full before the last day of such year shall
constitute an event of default under the Note, the Mortgage and this Loan
Agreement.
(ss) "Royal Palm Tranche" shall mean all Advances of the Loan made
by Lender to fund acquisition, development and operating expenses for the Royal
Palm Mobile Home Park.
(tt) "Set-ups" shall mean the amenities attached or related to a
manufactured home which may include but are not limited to skirting, pilings, if
any, carports or garages, storage sheds and/or screened porches.
(uu) "Sales Proceeds" shall mean the gross proceeds (and all
non-cash consideration (valued at the then fair market value thereof as
reasonably determined or approved by the Lender)), if any, payable to, on behalf
or for the benefit of (or credited to the benefit of) the Borrowers or any other
owner of the Property then encumbered by the Mortgage, or any portion thereof,
or any entity affiliated therewith, or any other person or entity having a
direct or indirect interest in the Property, or any portion thereof, with
respect to, or in connection with, a Conveyance. Sales Proceeds shall include,
without limitation, all assignment fees and other consideration paid by or on
behalf of a third party as and for an assignment of the buyer's rights under a
contract which relates to a Conveyance. If the Borrowers or any other owner of
the Property, or any portion thereof, or any entity affiliated therewith, or any
other person or entity having a direct or indirect interest in the Property, or
any portion thereof, takes back any purchase money mortgage, mortgage or other
security instrument (each, a "PM Mortgage") in connection with a Conveyance, one
hundred percent (100%) of all sums credited to the purchase price pursuant to a
PM Mortgage (whether principal, interest, additional interest or any other sum,
charge or amount whatsoever) shall be deemed to be Sales Proceeds received by
the holder of the PM Mortgage whether or not the funds are actually received.
All of the foregoing items shall be substantiated by evidence satisfactory to
the Lender.
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(vv) "Savanna Club Tranche" shall mean all Advances of the Loan
made by Lender to fund acquisition, development and operating expenses for the
Savanna Club Mobile Home Park.
(ww) "Sunlake Tranche" shall mean all Advances of the Loan made by
Lender to fund acquisition, development and operating expenses for the Sunlake
Mobile Home Park.
(xx) "Value of the Project" shall mean the appraised value of the
applicable Project as determined by an Appraiser in writing on the basis of (i)
what a willing and knowledgeable buyer taking into account all relevant factors
concerning the applicable Project would pay in an arms-length acquisition of
such Project (based upon the highest and best use of any portion thereof which
is then undeveloped), (ii) the Project being free and clear of the Mortgage and
any other security interest and (iii) such other factors as the Appraiser deems
relevant or appropriate in determining the appraised value. The appraisal report
shall be addressed to the Lender and the Borrowers, shall be set forth in
narrative form and shall contain, among other things, the then current Value of
the Project and the assumptions upon which such valuation is based all of which
must be satisfactory to the Lender.
2. THE LOAN. Lender shall make the Loan to Borrowers in Advances, upon
the terms and conditions set forth herein, and Borrowers shall take the Loan and
expressly agrees to comply with and perform all of the terms and conditions the
Loan Documents. The Loan shall be evidenced by the Note and secured by the
Mortgage and other Loan Documents. Lender shall make Advances to the Borrowers
to fund the costs to acquire, operate and develop the Projects including,
without limitation, (a) Capital Expenditures, (b) Expenses (other than Debt
Service), (c) the cost of a Conversion, (d) the cost of Set-ups and (e) any
construction management fees payable to Borrowers under an approved Budget, (f)
the cost of Construction Improvements, (g) the Development Fees, (h) the cost of
Floor Planning, (i) payments for any existing debt encumbering any of the
Projects, and (j) the cost to re-purchase any mobile home lots owned by third
parties and located within any of the Projects; provided, however, Lender shall
have no obligation to make Advances for such costs if such costs are not
consistent with the Budget (as defined in Paragraph 3 hereinbelow) for each
applicable Project (collectively, the "Permitted Costs"). All Advances
subsequent to the date hereof shall be allocated to the Applicable Tranche.
Notwithstanding anything in this Loan Agreement to the contrary, in no event
shall an Applicable Tranche for any Borrower that is a corporation (or that is
taxed as a corporation for federal income tax purposes) exceed 5% of the total
value of Lender's assets.
In the event Lender refuses to make Advances to fund the Permitted
Costs, Borrowers may, but shall not have the obligation to, pay for such costs.
Borrowers shall be entitled to ten percent (10%) interest from Lender on any
sums so advanced by Borrowers pursuant to this Paragraph 2, which interest shall
be paid after payment of Regular Interest and Deferred Regular Interest (if
applicable).
Notwithstanding anything in this Amended and Restated Loan Agreement or
the Note to contrary, Borrowers and Lender agree that all Net Cash Flow shall be
applied first to payment of all current Regular Interest, second to all current
Deferred Regular Interest, third to accrued but unpaid Regular Interest, fourth
to accrued but unpaid Deferred Regular Interest and finally to any Contingent
Interest, if any.
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3. BUDGETS; FINANCIAL INFORMATION.
(a) Annual Budgets. The owner of each Project shall submit to
Lender, in writing, at least forty-five (45) days prior to the end of each
calendar year its proposed budget for such Project (hereinafter individually
referred to as a "Budget" and collectively, the "Budgets"). To the extent
applicable, each Budget shall include projected costs for development and
construction, Conversion, marketing expenses and Floor Planning for sale and
resale of manufactured homes. The Budget may also include line items for
maintenance reserve accounts (up to $50.00 per pad, per year), general overhead
and administrative expenses, and advertising costs for the Projects. Each Budget
shall be subject to Lender's prior written approval, which shall be granted or
withheld within thirty (30) days of receipt of the applicable Budget. If any
Budget is not approved by Lender, Borrowers and Lender shall endeavor in good
faith to resolve their dispute with respect thereto. In the event such dispute
cannot be resolved, then Borrowers shall operate such Project under the Budget
for the prior calendar year, with a corresponding increase or decrease in each
line item of the Budget equal to the percentage change in the CPI for the year
in which the dispute cannot be resolved compared to the CPI for the last year in
which Lender approved a Budget. The parties hereto acknowledge that the Budgets
for 1998 for each of the Projects have been approved by Lender prior to the date
hereof. Once approved, Borrowers agree not to expend any sums for any line items
contained on the approved Budgets by more than five percent (5%) without first
obtaining the prior written approval of Lender, which approval may be withheld
or granted in Lender's sole discretion.
(b) Annual Financials. Within forty-five (45) days after the end
of each Loan Year, the Borrowers shall deliver to the Lender an income and
expense statement (prepared in accordance with generally accepted accounting
principles, consistently applied), in form satisfactory to the Lender, in such
detail and with such back-up information as shall be reasonably required by the
Lender, prepared and reported upon by an independent certified public accountant
satisfactory to the Lender, for such preceding Loan Year, setting forth the
Gross Income and Expenses for such Loan Year and the calculation of Net Cash
Flow and Contingent Interest (if any) for such Loan Year.
4. CONDITIONS TO LENDER'S OBLIGATION TO FUND FIRST ADVANCE AND FUTURE
ADVANCES. The conditions listed below are a condition precedent to any
obligation of Lender and shall be complied with in form and substance
satisfactory to Lender prior to the first Advance:
(a) Note. The Note shall be duly authorized, executed and
delivered to Lender;
(b) Mortgage. The Mortgage shall be duly authorized, executed,
acknowledged, and delivered to Lender, which shall be a valid mortgage lien on
the Projects and all fixtures and personal property owned by Borrowers to be
used in connection with the Projects;
(c) Assignments. The Assignment of Leases, Rents and Contract
Rights and the Assignment of Permits, Agreements, Approvals and Deposits shall
be duly authorized, executed, and acknowledged by Borrowers, and delivered to
Lender;
(d) Financing Statements. Borrowers shall execute and deliver to
Lender the Financing Statements Lender may require to perfect its security
interest in the personal property described in the Mortgage;
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(e) Public Liability and Worker's Compensation Insurance.
Borrowers shall deliver evidence satisfactory to Lender of the existence of
public liability, hazard and worker's compensation insurance relating to the
Projects in amounts and issued by companies approved by Lender; Borrowers agree
that Lender shall have the right to take any action necessary to continue said
insurance in full force and effect including, but not limited to, paying
premiums. Any funds advanced to continue said policies in full force and effect
shall be considered as Advances hereunder and shall bear interest from the date
of disbursement at the same rate as other Advances and payment of said funds and
interest shall be secured by the Mortgage;
(f) Corporate and Partnership Documents. Borrowers shall deliver
to Lender the following documents:
(i) if a Borrower is a general partnership, the joint
venture agreement of each Borrower and all amendments thereof, certified by
the appropriate official of the State of its formation (if applicable),
together with a certificate of such official to the effect that such entity
is in good standing therein (if applicable),
(ii) if a Borrower is a general partnership, a good standing
certificate from the Secretary of the state of its incorporation for
Borrowers' general partners,
(iii) articles of incorporation and by-laws of Borrowers or
Borrowers' general partners certified by the Secretary of such corporation,
(iv) an incumbency certificate specifying by name and title
the officers and directors of the Borrowers, certified by the Secretary of
such corporation, and
(v) certified resolutions of the shareholders or general
partners and the Board of Directors of Borrowers authorizing the execution
and delivery of this Agreement, the Mortgage, Note, and all other documents
necessary or desirable, for the consummation of the transactions
contemplated by this Agreement.
5. CONDITIONS TO EACH ADVANCE. Advances hereunder shall be made not
more than once a month and in accordance with the Budgets approved by Lender for
each Project, so long as no Event of Default has occurred under any of the Loan
Documents.
6. CONTINGENT INTEREST.
(a) In addition to the payment of Regular Interest and Deferred
Regular Interest, and as an inducement to the Lender to make the Loan, the
Borrowers shall also pay to the Lender within thirty (30) days after the end of
each Loan Quarter contingent interest ("Contingent Interest") equal to fifty
percent (50%) of the Net Cash Flow, as more particularly described in
subparagraph (b) below.
(b) All Net Cash Flow with respect to each Loan Quarter shall be
applied and/or paid as follows within thirty (30) days after the end of each
Loan Quarter: first, to the Lender in reduction of the accrued and unpaid
Regular Interest and other sums due and payable under the Note and the other
Loan Documents, in such order as the Lender may determine in its sole
discretion, until all accrued and unpaid Regular Interest and other sums are
paid in full; second, fifty percent (50%) of the balance of Net Cash Flow shall
be paid to reduce the outstanding principal balance of the Note; third, fifty
percent (50%) of the then undisbursed balance of Net Cash Flow, if any, shall be
11
paid to the Lender as and for an installment of Contingent Interest; and fourth,
the balance, if any, to the Borrowers. It is the intent of the parties that the
Net Cash Flow for each Project shall be used to pay the Regular Interest,
Deferred Regular Interest (if applicable) and Contingent Interest.
Notwithstanding anything in this paragraph 6 to the contrary, the Net Cash Flow
distributed as Contingent Interest within thirty (30) days after the end of each
Loan Quarter shall be based upon amounts calculated by Borrowers on an accrual
basis. Such calculations shall be prepared in accordance with generally accepted
accounting principles. In accordance with the provisions of paragraph 6(e)
hereinbelow, Borrowers shall at the end of each Loan Year re-calculate the
proper amount of the Contingent Interest that should have been paid during such
Loan Year and shall make such adjustments as are necessary in accordance with
the provisions of paragraph 6 (e).
(c) Each payment of Contingent Interest shall be accompanied by an
income and expense statement (prepared in accordance with generally accepted
accounting principles consistently applied in such detail and with such back-up
information as shall be reasonably required by the Lender, certified by the
chief financial officer of the Borrowers as true, correct and complete, setting
forth, among other things, the Gross Income and Expenses for such Loan Quarter
and the calculation and application of Net Cash Flow and Contingent Interest (if
any) for such Loan Quarter.
(d) If there is a payment of Additional Contingent Interest in
whole, or if the Maturity Date shall occur, prior to the end of a Loan Quarter
or Loan Year, the Loan Quarter and Loan Year, as applicable shall be deemed to
end on the date of such occurrence and the appropriate income and expense
statements shall be delivered, and the Net Cash Flow shall be paid and applied,
as applicable, in accordance with the provisions of this Paragraph 6 within
thirty (30) days of such payment of Additional Contingent Interest or the
Maturity Date as the case may be. The obligation to deliver such a statement and
to pay and apply the Net Cash Flow with respect to such Loan Quarter or Loan
Year, as applicable, shall survive the termination, satisfaction or assignment
of the lien of, or reconveyance under, the Mortgage and the Borrowers shall pay
to and deposit in escrow with the Lender an amount equal to the Net Cash Flow
with respect to the immediately preceding Loan Quarter (as reasonably estimated
by the Borrowers and reasonably approved by the Lender), simultaneously with
such payment of Additional Contingent Interest or the Maturity Date, as
applicable. Contingent Interest shall cease to accrue on the date upon which a
payment of the entire Additional Contingent Interest shall occur; provided,
however, that if the Maturity Date shall occur as a result of an event of
default and subsequent acceleration of the Note, then Contingent Interest shall
continue to accrue up to and including the date on which all principal, accrued
unpaid Regular Interest, Deferred Regular Interest, Contingent Interest,
Additional Contingent Interest and all other sums due hereunder or under the
Loan Documents have been paid in full.
(e) If the installments of Contingent Interest paid during and
with respect to such Loan Year exceed the amount of Contingent Interest as
recomputed on an annual basis, the amount of such excess shall be credited
against the installments of Contingent Interest next coming due or shall be
refunded to the Borrowers in the event no further installments of Contingent
Interest are payable hereunder. If the Contingent Interest paid to the Lender
during such Loan Year is less than the amount of Contingent Interest as
recomputed on an annual basis which should had been paid to the Lender, the
amount of such deficiency shall be due and payable upon delivery of such annual
financial statement. If such difference between Contingent Interest actually due
and Contingent Interest paid is equal to or greater than five percent (5%) of
the amount of Contingent Interest actually due or regardless of the amount of
12
the deficiency, if the deficiency is a result of fraud or willful misconduct on
the part of the Borrowers or any other entity, the Borrowers shall also pay to
the Lender upon delivery of such annual financial statements an additional
amount equal to six percent (6%) of such underpayment as and for liquidated
damages to compensate the Lender for the loss of use of such sums during the
applicable Loan Year.
7. ADDITIONAL CONTINGENT INTEREST. In addition to the payment of
Regular Interest, Deferred Regular Interest and Contingent Interest, and as a
further inducement to the Lender to make the Loan, the Borrowers shall also pay
to the Lender additional contingent interest ("Additional Contingent Interest")
calculated as follows:
(a) All Net Financing Proceeds shall be applied and/or paid in the
following order: first, to the Lender in reduction of the principal and accrued
and unpaid Regular Interest, Deferred Regular Interest (if applicable, and
earned), Contingent Interest and other sums due and payable under the Note and
the other Loan Documents, until such principal, accrued and unpaid Regular
Interest, Deferred Regular Interest, Contingent Interest and other sums are paid
in full; second, fifty percent (50%) of the remaining balance, if any, of the
Net Financing Proceeds, if any, shall be paid to Lender as an installment of
Additional Contingent Interest; and third, the balance, if any, to the
Borrowers.
(b) All Net Sales Proceeds received payable in connection with the
Conveyance of one or more of the Projects shall be applied and/or paid in the
following manner: first, to the Lender in reduction of the principal and accrued
and unpaid Regular Interest, Contingent Interest and other sums due and payable
under the Note and the other Loan Documents, in such order as the Lender may
determine in its sole discretion, until such principal, all accrued and unpaid
Regular Interest, Deferred Regular Interest, Contingent Interest and other sums
are paid in full (or, in the event any Financing(s) have taken place and if
required by the terms and conditions of the refinanced deed(s) of trust or other
security instruments, in reduction of the principal balance of the refinanced
deed(s) of trust or other security instruments); second, One Hundred Dollars
($100.00) shall be paid to the applicable Borrower for each Project being sold;
third, fifty percent (50%) of the remaining balance of the Net Sales Proceeds,
if any, shall be paid to Lender as an installment of Additional Contingent
Interest; and fourth, the balance, if any, to the Borrowers.
(c) Notwithstanding anything in this Paragraph 7 to the contrary,
the Additional Contingent Interest payable with respect to each of the Projects
shall only be due and payable to the extent there are Net Financing Proceeds
and/or Net Sales Proceeds generated from the financing and/or sale of the
applicable Project. Lender and Borrowers hereby agree that the Net Financing
Proceeds and/or Net Sales Proceeds generated from the financing or sale of a
particular Project shall not be used to pay Additional Contingent Interest with
respect to any other Projects. However, the Net Financing Proceeds and/or Net
Sales Proceeds shall be utilized to prepay the outstanding principal balance of
the Loan regardless of the amount of the Applicable Tranche for such Project.
8. WARRANTIES AND REPRESENTATIONS OF BORROWERS. Borrowers represent,
warrant (which representations and warranties shall be deemed continuing) and
covenant throughout the term of this Agreement as follows:
(a) Organization Status. Each Borrower (i) is duly incorporated or
organized under the laws of the state of its formation, (ii) is in good standing
13
under the laws of the state of its incorporation or organization, and, (iii) is
qualified to do business and is in good standing under the laws of the State of
Florida, and (iv) has stock or partnership interests outstanding which have been
duly and validly issued;
(b) Authority to Enter into Loan Documents. The Borrowers have
full power and authority to enter into the Loan Documents and consummate the
transactions contemplated hereby, and the facts and matters expressed or implied
in the opinions of its legal counsel are true and correct;
(c) Validity of Loan Documents. The Loan Documents have been
approved by those persons having proper authority, and to the best of Borrowers'
knowledge are in all respects legal, valid and binding according to their terms;
(d) Priority of Lien on Personalty. No chattel mortgage, xxxx of
sale, security agreement, financing statement or other title retention agreement
(except those executed in favor of Lender and those approved by Lender, in
writing) has been or will be executed with respect to any personal property,
chattel or fixture used in conjunction with the construction, operation, or
maintenance of the Improvements as described in the Financing Statement;
(e) Conflicting Transactions of Borrowers. The consummation of the
transaction hereby contemplated and the performance of the obligations of
Borrowers under and by virtue of the Loan Documents will not result in any
breach of, or constitute a default under, any lease, bank loan or credit
agreement, or other instrument to which Borrowers are a party or by which they
may be bound or affected;
(f) Pending Litigation. There are no actions, suits or proceedings
pending against Borrowers or the Projects, or, to the knowledge of Borrowers,
circumstances which could lead to such action, suits or proceedings against or
affecting Borrowers or the Property, or involving the validity or enforceability
of any of the Loan Documents, before or by any government authority, except
actions, suits and proceedings which have been specifically disclosed to and
approved by Lender in writing; and to Borrowers' knowledge they are not in
default with respect to any order, writ, injunction, decree or demand of any
court or any governmental authority;
(g) Condition of Property. Other than as previously disclosed to
Lender in writing, the respective Projects are not now damaged or injured as a
result of any fire, explosion, accident, flood or other casualty, and there are
no soil conditions which would interfere with the continued development of the
Projects;
(h) Construction, Engineer and Architect's Contracts. Borrowers
(including any officer or partner of Borrowers) have not made any contract or
arrangement of any kind the performance of which by the other party thereto
would give rise to a lien on any of the Projects;
(i) Availability of Roads. All roads necessary for the full
utilization of the Projects have either been completed or the necessary rights
of way therefor have either been acquired by the appropriate local authorities
or have been dedicated to public use and accepted by such local authorities;
(j) No Default. There is no default on the part of Borrowers under
this Agreement, the Note, the Mortgage or the Loan Documents, and no event has
14
occurred and is continuing which with notice, or the passage of time, or either,
would constitute a default under any provision thereof; and
(k) Environmental Condition.
(i) Except as otherwise disclosed in the environmental
reports delivered to Lender with respect to each Project, Borrowers have no
knowledge that Hazardous Materials are now located on the Projects, and
neither Borrowers nor, to Borrowers' knowledge, any other person has ever
caused or permitted any Hazardous Materials to be placed, held, located or
disposed of on, under or at the Projects;
(ii) No activity shall be undertaken on the Projects which
would cause a violation or support a claim under RCRA, CERCLA, XXXX or any
Hazardous Material Law;
(iii) To the best of Borrowers' knowledge, the property
adjoining the Projects is not being used, nor has ever been used at any
previous time, for the disposal, storage, treatment, processing or other
handling of Hazardous Materials, nor is any part of the Projects affected
by any contamination of Hazardous Materials;
(iv) To the best of Borrowers' knowledge, no investigation,
administrative order, consent order or agreement, litigation or settlement
with respect to Hazardous Materials or contamination of Hazardous
Materials, nor to the best knowledge of Borrowers, is any such event
proposed, threatened, anticipated or in existence with respect to the
Projects.
(l) No Transfer of Projects. Except as specifically set forth in
the Mortgage, the Projects or any part thereof shall not be sold, leased,
conveyed, mortgaged or encumbered in any way without the prior written consent
of Lender except as provided elsewhere herein or in the Mortgage, it being
understood and agreed that part of the consideration for the Loan is the
personal obligation of Borrowers. All contracts, deeds, easements or other
agreements affecting the Projects shall be submitted to Lender for its written
approval prior to the execution thereof by Borrowers, accompanied by an
appropriate survey showing the portion of the Projects affected, and any other
information requested.
(m) Compliance with Laws. Borrowers will comply promptly with all
federal, state and local laws, ordinances and regulations relating to the
construction, use, sale and leasing of the Projects.
(n) Title to Personalty. Borrowers will deliver to Lender, on
demand, any contracts, bills of sale, statements, receipted vouchers or
agreements under which Borrowers claims title to any materials, fixtures or
articles incorporated in the improvements or subject to the lien of the
Mortgage.
(o) Correction of Defects and Satisfaction of Conditions.
Borrowers will, upon demand of Lender , correct any structural defect in the
improvements located on the Projects as part of the Capital Expenditure portion
of the Budgets. The Advance of any Loan proceeds shall not constitute a waiver
of Lender's right to require compliance with this covenant with respect to any
such defects not theretofore discovered by, or called to the attention of
15
Lender, or with respect to Borrowers' failure to satisfy or continue to satisfy
any condition under this Agreement, whether or not Lender required performance
thereof.
(p) Borrowers to Maintain Bookkeeping System. Borrowers shall
maintain a bookkeeping system for the construction project in form and content
sufficient for Lender to conduct reviews, inspections, certifications and
reports required by this Agreement. Lender shall have full (but confidential)
access at any reasonable time to the books, records and contracts pertaining to
the Projects and Borrowers to determine the accuracy, correctness and
reasonableness of the sums in each Advance.
(q) Collection of Insurance Proceeds. As more particularly set
forth in the Mortgage, Borrowers will cooperate with Lender in obtaining for
Lender the benefits of any insurance or other proceeds lawfully or equitably
payable to it in connection with the transaction contemplated hereby, including,
but not limited to, any reimbursement from the Department of Housing and Urban
Development, if such proceeds can be legally assigned to Lender, and the
collection of any indebtedness or obligation of Borrowers to Lender incurred
hereunder (including the payment by Borrowers of the expense of an independent
appraisal on behalf of Lender in case of a fire or other casualty affecting the
Projects). All such insurance proceeds shall be used first to restore the
applicable Property and the balance of the insurance proceeds, if any, shall be
first paid to Lender to reduce the outstanding principal balance of the Note or
if the principal balance of the Note has been repaid, then disburse fifty
percent (50%) to Lender as a payment of Contingent Interest under the Note and
fifty percent (50%) to Borrowers.
(r) Indebtedness. Except for the existing indebtedness in favor of
Pacific Mutual which encumbers the Park Royale Mobile Home Park and the
indebtedness currently encumbering the Royal Palm Mobile Home Park, with respect
to the Projects encumbered by the Mortgage of even date herewith, Borrowers will
not incur, create, assume or permit to exist any indebtedness (other than as
approved by Lender in writing) or liability on account of advances or deposits,
any indebtedness or liability for borrowed money for the Projects, or any
indebtedness owed under any conditional sale or title retention agreement, or
any other indebtedness or liability evidenced by notes, bonds, debentures or
similar obligations related to the Projects without the written approval of
Lender, except:
(i) indebtedness owed Lender; and
(ii) indebtedness incurred on open accounts for materials,
equipment and supplies purchased in the ordinary course of business and
pursuant to the approved Budgets, payment for which shall be made promptly
when due.
(s) Further Assurances and Preservation of Security. Borrowers
will do all acts and execute all documents for the better and more effective
carrying out of the intent and purposes of this Agreement, as Lender shall
reasonably require from time to time, and will do such other acts necessary or
desirable to preserve and protect the collateral at any time securing or
intending to secure the Note, as Lender may require.
(t) Utilization of Loan Proceeds. Borrowers will utilize the
proceeds of the Loan solely for ongoing development of the Projects and in
accordance with the approved Budgets for each Project, making withdrawals
thereof at regular intervals, and Borrowers will not procure a loan or loans
from other sources for the work contemplated under this Agreement.
16
(u) No Assignment. Borrowers shall not assign this Agreement or
any interest therein and any such assignment is void and of no effect.
(v) Tax Receipts. Borrowers shall furnish to Lender, at Lender's
request, receipts or tax statements marked "Paid" to evidence the payment of all
taxes levied on the Property and the Improvements on or before thirty (30) days
prior to the date such taxes become delinquent. Borrowers shall, if required by
Lender pursuant to the Mortgage, or following any failure of Borrowers to make
the timely payment thereof, escrow taxes with Lender as required therein.
(w) Income. None of the Borrowers receive more than a de minimis
amount of income with respect to the Property from sources other than leasing
their interest therein. Each Borrower represents that it leases to tenants
substantially all of its interest in the Property owned by such Borrower and
that each Borrower derive substantially all of its income from the rental of the
Property and the rental income received by each of the Borrowers qualifies as
rents from real property within the meaning of Section 856 (d) of the Internal
Revenue Code.
(x) Reaffirmation of Representations and Warranties. Each Borrower
agrees that at the time of request for each advance all representations and
warranties contained in the Loan Documents and this Amended and Restated Loan
Agreement shall be deemed reaffirmed and ratified. Additionally at the time of
each request for an Advance, each Borrower shall be deemed to have affirmed to
Lender that the aggregate value of the real property owned by such Borrower
exceeds the principal balance of that Borrower's Applicable Tranche. For
purposes of the foregoing sentence, the value of real property should be
increased to the extent that Advances will be used in constructing improvements
on such Property within the ensuing twelve months and the value of such Property
shall be reduced by an amount equal to any other loans which encumber such
Property that have a higher priority than the loan by Lender.
(y) Representations and Warranties Regarding Aggregate Value of
Property. Each of the Borrowers hereby represents that the aggregate value of
all the Property is, and shall at all times during the term of the Loan be,
equal or greater than the amount outstanding under the Note. For purposes of
this paragraph, the amount outstanding under Note shall be increased by maximum
amount of Regular Interest and Deferred Regular Interest that Borrowers
reasonably expect will accrue but will not be paid at any point in time over the
remaining term of the Loan.
(z) CADC Representations. CADC represents and warrants that it is
a corporation adequately capitalized and able to satisfy it's obligation as they
become due on a continuing basis.
(aa) Joint Venture Representations. All of the Borrowers except
CADC represent that they are taxed as a partnership for federal income tax
purposes, they do not hold securities in any one issue within the meaning of the
Investment Company Act of 1940, as amended, in an amount that exceeds 5% of the
value of its respective assets and they do not hold any equity interest in any
entity that is treated as a corporation for federal income tax purposes.
(bb) Compliance. Each Borrower further covenants and agrees to
cooperate with Lender to extent requested by Lender in ascertaining compliance
with the foregoing representations, warranties and covenants on continuing
basis. Such cooperation may include, without limitation, providing property and
entity-specific financial statements and information, completing questionnaires
17
and/or certificates and causing knowledgeable officers, employees or agents to
be available to answer questions for Lender and its agents.
(cc) Contingent Interests. Each of the Borrowers acknowledges that
no Contingent Interest has accrued or been paid pursuant to the Original Loan
Agreement or any of the Loan Documents during 1998.
9. DEFAULT. Upon the occurrence of any of the following events (the
"Events of Default") all obligations on the part of Lender to make any further
Advance hereunder shall, if Lender elects, terminate, and Lender may at its
option exercise any of its remedies set forth herein or in any other Loan
Documents, but Lender may make any Advances or parts of Advances after the
happening of any Events of Default without thereby waiving the right to exercise
such remedies without becoming liable to make any further Advance:
(a) Default under Note. Borrowers failure to pay any amounts due
and payable under the Note, including, without limitation, Regular Interest,
Deferred Regular Interest, Contingent Interest and Additional Contingent
Interest; or
(b) Bankruptcy. If there is filed by or against any Borrower a
petition in bankruptcy or a petition for the appointment of a receiver or
trustee of the property of any Borrower and any such petition not filed by any
Borrower is not dismissed within 60 days of the date of filing, or if any
Borrower files a petition for reorganization under any of the provisions of the
Bankruptcy Code or of any similar law, state, federal, or foreign, or if any
Borrower makes a general assignment for the benefit of creditors or makes any
insolvency assignment or is adjusted insolvent by any court of competent
jurisdiction; or
(c) Breach of Covenants, Warranties and Representations. If any
warranty or representation made by Borrowers in this Agreement or pursuant to
the terms hereof shall at any time be false or misleading in any material
respect, or if Borrowers shall fail to keep, observe or perform any of the
terms, covenants, representations or warranties contained in this Agreement, the
Note, the Mortgage, the Option Agreement of even date herewith, or any other
Loan Document given in connection with the Loan or development of the Property
(provided, that with respect to non-monetary defaults, Lender shall give written
notice to Borrowers, who shall have thirty (30) days to cure), or is unable or
unwilling to meet its obligations thereunder.
10. REMEDIES OF LENDER. Upon the happening of an Event of Default, then
Lender may, at its option, upon written notice to Borrowers:
(a) Pursue all rights and remedies available at law or in equity,
including, without limitation, foreclosure of the Mortgage and/or obtaining an
injunction to prohibit the sale of all or any portion of the Property or the
appointment of a receiver to oversee the management and operation of the
Projects;
(b) As of the Stated Maturity Date, Borrowers shall repay the
entire outstanding principal balance of the Note plus all accrued Regular
Interest, Deferred Regular Interest and Contingent Interest due and payable as
of the Stated Maturity Date. Thereafter, until all Projects have been sold,
Borrowers shall continue to pay to Lender on a quarterly basis and in the manner
set forth in paragraph 6 hereinabove, Contingent Interest. Additionally, as the
remaining Projects are sold, Borrowers shall remain obligated to pay to Lender
the Additional Contingent Interest in accordance with the provisions of
18
paragraph 7 hereinabove until all of the Projects have been sold and all
Contingent Interest and Additional Contingent Interest due and payable to Lender
has been paid in full.
11. GENERAL TERMS. The following shall be applicable throughout the
period of this Agreement or thereafter as provided herein:
(a) Rights of Third Parties. All conditions of the Lender
hereunder are imposed solely and exclusively for the benefit of Lender and its
successors and assigns, and no other person shall have standing to require
satisfaction of such conditions or be entitled to assume that Lender will make
advances in the absence of strict compliance with any or all thereof, and no
other person shall, under any circumstances, be deemed to be a beneficiary of
this Agreement or the Loan Documents, any provisions of which may be freely
waived in whole or in part by the Lender at any time if, in its sole discretion,
it deems it desirable to do so. In particular, Lender makes no representations
and assumes no duties or obligations as to third parties concerning the quality
of the construction by Borrowers of the Improvements or the absence therefrom of
defects.
(b) Lender Not Liable for Damage or Loss. All inspections and
other services rendered by or on behalf of Lender shall be rendered solely for
the protection and benefit of the Lender. Neither Borrowers nor other third
persons shall be entitled to claim any loss or damage against the Lender or
against its agents or employees for failure to properly discharge their duties.
(c) Lender Not Obligated to Insure Proper Disbursement of Funds to
Third Parties. Nothing contained in this Agreement, or any Loan Documents, shall
impose upon Lender any obligation to oversee the proper use or application of
any disbursements and advances of funds made pursuant to the Loan.
(d) Indemnification from Third Party Claims. Borrowers shall
indemnify Lender from any liability, claims or losses resulting from the
disbursement of the Loan proceeds or from the condition of the Property, whether
related to the quality of construction or otherwise, and whether arising during
or after the term of the Loan. This provision shall survive the repayment of the
Loan and shall continue in full force and effect so long as the possibility of
such liability, claims, or losses exists.
(e) Rights of Subcontractors, Laborers and Materialmen. In no
event shall this Agreement be construed to make Lender or any agent of Lender
liable to any contractor or any subcontractors, labormen, materialmen,
craftsmen, or others for labor, materials, or services delivered to the Property
or goods specially fabricated for incorporation therein, or for debts or claims
accruing or arising to such persons or parties against Borrowers or Contractor.
It is distinctly understood and agreed that there is no relation of any type
whatsoever, contractual or otherwise, either express or implied, between Lender
and Contractor, any materialman, subcontractor, craftsman, laborer or any other
person or entity supplying any labor, materials or services to the Property or
specially fabricating goods to be incorporated therein. No such persons or
entities are intended to be third party beneficiaries of this Agreement or any
document or instrument related to the Loan or to have any claim or claims in or
to any undisbursed or retained Loan proceeds.
19
(f) Evidence of Satisfaction of Conditions. Lender shall, at all
times, be free independently to establish to its good faith and satisfaction,
and in its absolute discretion, the existence or nonexistence of a fact or facts
which are disclosed in documents or other evidence required by the terms of this
Agreement.
(g) Waiver of Jury Trial; Consent to Jurisdiction.
(i) TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW,
BORROWERS AND LENDER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS LOAN AGREEMENT, ANY OTHER
DOCUMENT, OR ANY DEALINGS, CONDUCT, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS BY EITHER OF THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
AGREEMENT AND THE RELATIONSHIP BETWEEN THEM. THE SCOPE OF THIS WAIVER IS
INTENDED TO ENCOMPASS ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
AND THAT RELATE TO THE SUBJECT MATTER OF THIS LOAN, INCLUDING WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW AND STATUTORY CLAIMS. LENDER AND BORROWERS EACH
ACKNOWLEDGE THAT THIS WAIVER IS MATERIAL INDUCEMENT TO ENTER INTO THIS LOAN
AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE
DEALINGS. LENDER AND BORROWERS EACH FURTHER WARRANT AND REPRESENT THAT EACH
OF THEM HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT EACH OF
THEM KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT
IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS, OR MODIFICATIONS
TO THIS LOAN AGREEMENT OR ANY OTHER LOAN DOCUMENT OR AGREEMENTS RELATING TO
THIS LOAN AGREEMENT.
(ii) LENDER AND BORROWERS HERETO CONSENT FOR THEMSELVES AND
IN RESPECT OF THEIR PROPERTIES, GENERALLY, UNCONDITIONALLY AND IRREVOCABLY,
TO THE NON-EXCLUSIVE JURISDICTION OF THE FEDERAL AND STATE COURTS IN THE
STATE OF COLORADO WITH RESPECT TO ANY PROCEEDING RELATING TO ANY MATTER,
CLAIM OR DISPUTE ARISING UNDER THIS LOAN AGREEMENT OR THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY. BORROWERS FURTHER CONSENT, GENERALLY,
UNCONDITIONALLY AND IRREVOCABLY, TO THE NON-EXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS OF THE STATE IN WHICH ANY OF THE PROPERTY IS
LOCATED IN RESPECT OF ANY PROCEEDINGS RELATING TO ANY MATTER, CLAIM OR
DISPUTE ARISING WITH RESPECT TO SUCH COLLATERAL. BORROWERS FURTHER
IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS, GENERALLY, UNCONDITIONALLY
AND IRREVOCABLY, AT THE ADDRESSES SET FORTH BELOW THEIR RESPECTIVE
20
SIGNATURES IN CONNECTION WITH ANY OF THE AFORESAID PROCEEDINGS IN
ACCORDANCE WITH THE RULES APPLICABLE TO SUCH PROCEEDINGS. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, BORROWERS HEREBY IRREVOCABLY WAIVE ANY
OBJECTION WHICH ANY OF THEM MAY NOW HAVE OR HAVE IN THE FUTURE TO THE
LAYING OF VENUE IN RESPECT OF ANY OF THE AFORESAID PROCEEDINGS BROUGHT AND
THE COURTS REFERRED TO ABOVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH
COURT THAT ANY SUCH ACTIONS OR PROCEEDINGS BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL EFFECT THE
RIGHTS OF LENDER TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW OR TO
COMMENCE PROCEEDINGS OR OTHERWISE PROCEED AGAINST BORROWERS IN ANY
JURISDICTION.
(h) Headings. The headings of the sections, paragraphs and
subdivisions of this Agreement are for the convenience of reference only, and
shall not limit or otherwise affect any of the terms hereof.
(i) Invalid Provisions to Affect No Others. If performance of any
provision hereof or any transaction related hereto is limited by law, then the
obligation to be performed shall be reduced accordingly; and if any clause or
provision herein contained operates or would prospectively operate to invalidate
this Agreement in part, then the invalid part of said clause or provision only
shall be held for naught, as though not contained herein, and the remainder of
this Agreement shall remain operative and in full force and effect.
(j) Application of Interest to Reduce Principal Sums Due. In the
event that any charge, interest or late charge is above the maximum rate
provided by law, then any excess amount over the lawful rate shall be applied by
Lender to reduce the principal sum of the Loan or any other amounts due Lender
hereunder.
(k) GOVERNING LAW. WITH RESPECT TO MATTERS RELATING TO THE
CREATION, PERFECTION AND PROCEDURES RELATING TO THE ENFORCEMENT OF THE LIENS AND
SECURITY INTERESTS CREATED PURSUANT TO THE MORTGAGE, THE MORTGAGE SHALL BE
GOVERNED BY AND BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE IN WHICH
THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, EXCEPT, AS EXPRESSLY SET
FORTH IN THIS PARAGRAPH AND TO THE FULLEST EXTENT PERMITTED BY THE LAWS OF SUCH
STATES, THE LAWS OF THE STATE OF COLORADO SHALL GOVERN ALL MATTERS RELATING TO
THIS LOAN AGREEMENT AND ALL OF THE INDEBTEDNESS AND OBLIGATIONS DESCRIBED
HEREIN. IT IS ACKNOWLEDGED BY BORROWERS THAT LENDER'S PRINCIPAL PLACE OF
BUSINESS IS DENVER, COLORADO, THAT THE TERMS AND CONDITIONS OF THE LOAN HAVE
BEEN SUBSTANTIALLY NEGOTIATED IN THE STATE OF COLORADO AND THAT ALL LOAN
PROCEEDS SHALL BE FUNDED BY LENDER IN THE STATE OF COLORADO. ALL OTHER LOAN
DOCUMENTS DESCRIBED HEREIN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF COLORADO.
21
(l) Number and Gender. Whenever the singular or plural number,
masculine or feminine or neuter gender is used herein, it shall equally include
the others and shall apply jointly and severally.
(m) Prior Agreement. The terms and conditions of this Loan
Agreement and the Loan Documents amend certain prior agreements and
understandings between Lender and the Borrowers and/or affiliates of the
Borrowers. While Lender and Borrowers intend the provisions of this Loan
Agreement and the other Loan Documents to amend the terms and conditions of such
prior agreements, the parties hereto agree that parole evidence of all such
prior agreements shall be admissible in any disputes arising hereunder.
(n) Waiver. If Lender shall waive any provisions of the Loan
Documents, or shall fail to enforce any of the conditions or provisions of this
Agreement, such waiver shall not be deemed to be a continuing waiver and shall
never be construed as such; and Lender shall thereafter have the right to insist
upon the enforcement of such conditions or provisions. Furthermore, no provision
of this Agreement shall be amended, waived, modified, discharged or terminated,
except by instrument in writing signed by the parties hereto.
(o) Notices. All notices from the Borrowers to Lender and Lender
to Borrowers required or permitted by any provision of this Agreement shall be
in writing and sent by registered or certified mail and addressed as follows:
TO LENDER: Asset Investors Operating Partnership, L.P.
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
COPY TO: Annis, Mitchell, Xxxxxx,
Xxxxxxx & Roehn, P.A.
Xxx Xxxxx Xxxx Xxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, III, Esquire
TO BORROWERS: 0000 XxXxxxxxx Xxxxx
Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esquire
Such addresses may be changed by such notice to the other party.
(p) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding on the parties hereto and their heirs, legal
representatives, successors and assigns; but nothing herein shall authorize the
assignment hereof by the Borrowers.
22
IN WITNESS WHEREOF, Borrowers and Lender have caused this Agreement to
be executed on the date first above written.
Joiners of Guarantors. The undersigned Guarantors hereby join and
consent the terms of the Amended and Restated Loan Agreement, acknowledge that
they have reviewed the Amended and Restated Loan Agreement and Loan Documents
executing connection therewith and agree to execute a guarantee of Note in form
and content acceptable to Lender.
Signed, sealed and delivered in the COMMUNITY ACQUISITION AND DEVELOPMENT
presence of: CORPORATION, Delaware corporation
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
COMMUNITY CASA DEL MAR JOINT VENTURE,
a Delaware general partnership
By: COMMUNITY ACQUISITION AND
DEVELOPMENT CORPORATION, a
Delaware corporation, as a
general partner
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
By: COMMUNITY BLUE HERON PINES
CORPORATION, a Florida
corporation, as its general
partner
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
COMMUNITY SUN LAKE JOINT VENTURE, a
Delaware general partnership
By: COMMUNITY ACQUISITION AND
DEVELOPMENT CORPORATION, a
Delaware corporation, as its
general partner
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
By: COMMUNITY SUNLAKE CORPORATION,
a Florida corporation, as its
general partner
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
COMMUNITY BRENTWOOD JOINT VENTURE,
a Delaware general partnership
By: COMMUNITY ACQUISITION AND
DEVELOPMENT CORPORATION, a
Delaware corporation, as its
general partner
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
By: COMMUNITY BRENTWOOD CORPORATION,
a Florida corporation, as its
general partner
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
COMMUNITY SAVANNA CLUB JOINT VENTURE,
a Delaware general partnership
By: COMMUNITY ACQUISITION AND
DEVELOPMENT CORPORATION, a
Delaware corporation, as its
general partner
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
By: COMMUNITY SAVANNA CLUB
CORPORATION, a Florida
corporation, as its general
partner
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
ROYAL PALM VILLAGE, LLC, a Georgia
limited liability company
By: PARKEMORE FAIRVIEW L.L.C.,
a Georgia limited liability
company, its authorized member
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
JOINDER OF GUARANTORS
The undersigned Guarantors hereby join in this Amended and Restated
Loan Agreement for the purpose of acknowledging their consent to the terms and
conditions thereof and agreeing that they shall each unconditionally guarantee
the Borrowers' performance under the Note, the Mortgage, this Amended and
Restated Loan Agreement, and all of the other Loan Documents.
By: COMMUNITY BLUE HERON PINES
CORPORATION, a Florida
corporation
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
By: COMMUNITY SUNLAKE
CORPORATION, a Florida
corporation
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
By: COMMUNITY SAVANNA CLUB
CORPORATION, a Florida
corporation
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
By: COMMUNITY BRENTWOOD
CORPORATION, a Florida
corporation
By: /s/Xxxxxxx Xxxxxxxx
/s/ Xxxx Xxxx -----------------------------
--------------------------- Xxxxxxx Xxxxxxxx
Print Name: Xxxx Xxxx Vice President
/s/ Xxxxxx X. Xxxxx
--------------------------- Address: 0000 XxXxxxxxx Xxxxx
Print Name: Xxxxxx X. Xxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000
SIGNATURE PAGE OF LENDER
ASSET INVESTORS OPERATING
PARTNERSHIP, L.P., a Delaware
limited partnership
By: ASSET INVESTORS CORPORATION,
a Maryland corporation,
authorized to transact
business as Asset Investors
Corporation of Maryland,
general partner
/s/ Xxxxx X. Xxxx By: /s/ Xxxxx Xxxxxx
------------------------------- -----------------------------
Print Name: Xxxxx X. Xxxx Xxxxx Xxxxxx
Chief Financial Officer
/s/ Xxxxx X. Xxxxxxxxx
-------------------------------
Print Name: Xxxxx X. Xxxxxxxxx
6374-008-485886.09
