Exhibit 10.32
CONSTRUCTION LOAN AGREEMENT
---------------------------
THIS AGREEMENT, made this 28th day of November, 1995, by and between
BOAT TREE, INC., a Florida corporation (the "Borrower"), whose mailing address
is 0000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxx 00000, and AMSOUTH BANK OF FLORIDA, a
Florida banking corporation (the "Lender"), whose mailing address is Xxxx Xxxxxx
Xxx 000000, Xxxxxxx, Xxxxxxx 00000.
RECITALS:
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A. The Borrower has applied to the Lender for a loan (the "Loan") of
ONE MILLION ONE HUNDRED FIFTY THOUSAND DOLLARS ($1,150,000.00) (the "Loan
Amount") and the Lender has agreed to make the Loan pursuant to a Mortgage Loan
Commitment to the Borrower dated July 20, 1995, (the "Lender Commitment").
B. The Loan is to be evidenced by a Promissory Note (the "Note") of
even date herewith in the amount of the Loan, the repayment of which is to be
secured by, among other things, a Mortgage and Security Agreement (the
"Mortgage") of even date herewith encumbering certain real property (the
"Property") owned by the Borrower, located in Orange County, Florida (the
"County") and more particularly described as follows, to wit:
A parcel of land lying in a portion of the Northwest 1/4 of Section 10,
Township 23 South, Range 29 East, more particularly described as
follows:
Commence at the Northeast corner of the Northwest 1/4 of Section 10,
Township 23 South, Range 29 East, run N89'49'12"W, along the North line
of the Northwest 1/4 of said Section 10, a distance of 1669.60 feet;
thence departing said North line, run S00'04'13"E, a distance of 50.00
feet to a point on the South Right-of-Way line of 33rd Street, said
point also being the Point of Beginning; thence departing said
Right-of-Way line, continue S00'04'13"E, a distance of 400.00 feet;
thence N89'49'12"W, a distance of 27.49 feet; thence S00'04'13" E, a
distance of 365.58 feet; thence S89'54'12"W, a distance of 954.65 feet;
thence N00'01'58"E, a distance of 40.08 feet; thence N30'35'08"E, a
distance of 603.67 feet; thence S59'24'52"E, a distance of 108.48 feet;
thence S89'59'06"E, a distance of 220.95 feet; thence N00'04'13"W, a
distance of 263.72 feet to a point on the aforementioned South
Right-of-Way line; thence S89'49'12"E, along said Right-of-Way line, a
distance of 360.00 feet to the Point of Beginning.
TOGETHER WITH all easement rights granted to the owner of the foregoing
described property by virtue of that certain Declaration of Easements
executed by XXXXX PROPERTIES LIMITED PARTNERSHIP, an Ohio limited
partnership dated November 28, 1995, recorded ____________________ in
Official Records Book ____, Page____ , Public Records of Orange County,
Florida and that certain Declaration of Ingress-Egress Easements
executed by XXXXX PROPERTIES LIMITED PARTNERSHIP, an Ohio limited
partnership dated November 28, 1995, recorded ____________________ in
Official Records Book ____ Page ____, Public Records of Orange County,
Florida.
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C. The proceeds of the Loan shall be used to construct certain
improvements consisting of an 18,000 square foot retail boat showroom building
(the "Improvements") on the Property in accordance with Plans and Specifications
(the "Plans and Specifications") filed with the Lender by the Borrower and
hereby made a part of this Agreement (the "Project"), and such other uses
contemplated by the Lender Commitment.
D. The Lender is willing to make the Loan on the Property upon the
terms and conditions hereafter stated, and none other.
NOW, THEREFORE, in consideration of the benefits accruing under the
terms of this contract, and in further consideration of valuable considerations
mutually exchanged between the parties, the receipt of which is hereby
acknowledged, it is agreed between the parties to this Agreement as follows:
1. The Loan
--------
The Lender agrees to make the Loan by advancing for the account of the
Borrower from time to time, in accordance with the terms and provisions of this
Agreement, sums not exceeding the Loan Amount.
2. Execution of Mortgage and Note
-------------------------------
The Loan is evidenced by the Note, the Mortgage, Uniform Commercial
Code Financing Statements and Assignment of Constructions Documents, all
executed by the Borrower, the Lender Commitment and Mortgagee Title Insurance
Commitment and Policy. The foregoing documents, together with this Agreement and
other documents executed in connection with the Loan, are herein referred to as
"Loan Document(s)".
3. Title Insurance Policy
----------------------
The Borrower shall cause to be delivered to the Lender a
Mortgagee Title Insurance Commitment ("Title Commitment") and Policy ("Title
Policy") showing the Mortgage to be a valid first lien upon the Property and
naming the Lender as insured in the Loan Amount. Such policy shall be written by
a title insurance company licensed to do business in the State of Florida
("Title Insuror") and shall be satisfactory to Lender and Lender's counsel. The
Title Commitment and Title Policy shall be issued without exception for matters
of survey, mechanics' liens, easements, and parties in possession. All other
exceptions contained in the Title Commitment and Title Policy shall be subject
to the approval of counsel to the Lender. The cost of the Title Commitment and
Title Policy shall be paid for by the Borrower.
4. Commencement of Construction
----------------------------
The Borrower shall not commence construction of the
Improvements until the Mortgage and a Notice of Commencement have been recorded
in the Public Records of the County. The Mortgage must be recorded prior to the
recording of the Notice of Commencement. Borrower shall
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post a certified copy of the Notice of Commencement on the Property in a
conspicuous place on the Property and in such a way that it shall be protected
from the weather.
5. Contracts with Contractors
--------------------------
Prior to the commencement of construction of the
Improvements hereunder, Borrower agrees to furnish to Lender copies of
contracts, duly executed and entered into between Borrower and licensed
contractors approved by the Lender for the completion of the Improvements.
6. Funds to Complete
-----------------
If Lender estimates, at any time, and from time to time,
that the amount necessary to assure final completion of the construction of the
Improvements, including but not limited to interest and other soft or
non-construction budget items, during the term of the Loan (the "Total Budget")
shall exceed the amount of the undisbursed Loan proceeds plus the total amount
of all equity investments made or scheduled to be made by Borrower, then Lender
shall have the option to require Borrower (a) to immediately deposit with Lender
the amount of any such difference, in cash or other form satisfactory to Lender,
which amount shall be disbursed toward the Total Budget costs prior to any
advance, or any further advance, by Lender under the Loan, or (b) to expend the
amount of any such difference for items included in the Total Budget with
satisfactory evidence of such expenditure being provided to Lender prior to any
advance, or any further advance, by Lender of the Loan funds. Lender shall be
assured at all times, to its satisfaction, that the undisbursed Loan funds are
sufficient to complete the Improvements in accordance with the Total Budget and
in accordance with the Plans and Specifications and this Agreement. Lender
reserves the right of continual verification of adequate equity investment made
by Borrower as herein set forth. Any deposit made by the Borrower as required by
this Agreement shall be disbursed before any or any other Loan disbursements
will be made, and shall be advanced as construction progresses. Upon request of
Lender, Borrower shall furnish Lender a statement of the amounts remaining to be
paid to the Borrower's contractor or contractors for the completion of the
Improvements.
7. Construction of the Improvements
--------------------------------
The Borrower agrees that the Improvements will be
constructed substantially in accordance with the Plans and Specifications, which
Plans and Specifications shall not be substantially changed without Lender's
consent, which consent will not unreasonably be withheld, and with all
applicable ordinances and statutes and in accordance with the requirements of
all regulatory authorities having jurisdiction over the Property. The Borrower
further agrees that the Improvements will be constructed entirely on the
Property and, except as may be permitted by Lender, will not encroach upon or
overhang any easement or right-of-way upon the Property or the land of others,
except those offsite infrastructure improvements as may be required by Plans and
Specifications or otherwise required to be constructed in connection with the
construction of the Improvements, and that the Improvements will be wholly
within any building setback requirements and will not violate applicable use or
other restrictions and the Borrower will furnish from time to time satisfactory
evidence with respect thereto.
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8. Inspections
-----------
The Lender shall have the right, during the construction of
the Improvements, to inspect the Improvements at any reasonable time and to
reject and require to be replaced any materials or workmanship that do not
substantially comply with Plans and Specifications. It is agreed that all
inspection services rendered by Lender's officers or agents shall be rendered
solely for the protection and benefit of the Lender. The Lender, its officers,
or agents, shall not be liable for the failure of any dealer, contractor,
craftsman or laborer to deliver the goods or perform the services to be
delivered or performed by them.
9. Supervising Architect
---------------------
At all times there shall be a supervising architect employed
to supervise the construction of the Improvements. At the request of the
Borrower Lender has approved CUHACI & XXXXXXXX, ARCHITECTS, INC. as the
supervising architect (the "Supervising Architect"). Prior to the commencement
of construction the Supervising Architect must provide the Lender with a
certificate stating that if the Improvements are completed substantially in
accordance with the Plans and Specifications they will comply with all
applicable zoning, subdivision, land use, building, landmark, occupational
health and safety, environmental and pollution control laws, statutes, codes,
ordinances and regulations. During the course of construction the Supervising
Architect shall provide Lender with monthly reports indicating that construction
of the Improvements is proceeding substantially in accordance with the Plans and
Specifications. Upon completion of the Improvements the Supervising Architect
must issue a Final Certificate of Completion certifying that the Improvements
have been completed substantially in accordance with the Plans and
Specifications, and that such Plans and Specifications comply with all
applicable zoning, subdivision, land use, building construction, landmark,
occupational health and safety, environmental and pollution control laws,
statutes, codes, ordinances, and regulations. Should the Borrower desire to
substitute Supervising Architect it may do so only with the written consent of
the Lender which consent will not unreasonably be withheld.
10. Inspecting Engineer
-------------------
The Lender hereby designates XXXX DEVELOPMENT GROUP, INC. as its
Inspecting Engineer (the "Inspecting Engineer"). The Inspecting Engineer shall,
for and on behalf of the Lender, review and approve the Plans and
Specifications, perform a Construction Cost Analysis for the Lender, provide the
Lender with an opinion as to whether or not the Borrower has obtained the
appropriate regulatory approvals, inspect and approve all construction, and
approve all requests for disbursements and perform such other services for
Lender as may be detailed in a separate agreement by and between the Lender and
the Inspecting Engineer and approved by the Borrower. All costs incurred in
connection with the services of Inspecting Engineer shall be paid for by the
Borrower.
11. Insurance
---------
Prior to the first disbursement of loan proceeds hereunder, Borrower
shall have obtained and delivered to Lender such hazard and public liability
insurance as required by the Mortgage. In
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addition to the insurance required by the Mortgage, the Borrower shall provide
the Lender with Builders' Risk Insurance, with Extended Coverage, Non-Reporting
Form, upon the Property and the Improvements to 100% of the full replacement
value. All policies of insurance, and renewals thereof, shall be held by the
Lender and shall contain a non-contributory standard Mortgagee's endorsement
making losses payable to the Lender as its interest may appear, and containing
an endorsement reading "Covering a building in the course of construction.
Permission is hereby granted for completion and occupancy."
12. Survey
------
Prior to disbursement of any funds under the Loan the Borrower agrees
to furnish to the Lender three (3) copies of a survey dated not earlier than
sixty (60) days prior to the date of this Construction Loan Agreement. Prior to
the receipt of the first construction draw hereunder, the Borrower shall furnish
to the Lender three (3) copies of a foundation survey. Prior to receipt of the
final disbursement the Borrower shall furnish to the Lender three (3) copies of
a final survey, showing all Improvements lying wholly within the boundary line
of the Property. All surveys must be prepared by a registered land surveyor in
good standing to practice in the location where the Property is located and
approved by the Lender. All surveys must show the boundaries, written legal
description, improvements, building locations, encroachments, projections, legal
setbacks, zoning setbacks, easements (recorded and visible), rights-of-way,
ingress and egress from a dedicated right-of-way, and area of the Property in
square feet and acres. The survey shall contain a flood zone certification
indicating whether or not any part of the Property lies within a flood hazard
area and delineating the area within the flood prone area. The survey must be:
(i) acceptable to Lender; (ii) prepared in accordance with the minimum technical
standards set forth by the Florida Board of Land Surveyors pursuant to Section
472.027 Florida Statutes; and (iii) certified, under seal, in form acceptable to
Lender, to the Borrower, Lender and the Title Insurer.
13. Funds Not Assignable
--------------------
The proceeds of the Loan shall not be assigned by the Borrower nor be
subject to the process of any court upon legal action by or against the Borrower
or by or against anyone claiming under or through Borrower, and for the purpose
of this Agreement, the funds shall remain and be considered the money and
property of the Lender until the Borrower is entitled to have them disbursed as
provided herein. Nothing herein contained shall be considered as in anyway
modifying or subordinating the obligations previously given or to be given by
the Borrower as security for the Loan and such obligations shall be and remain
in full force and effect, as this Agreement is intended only as additional
security for the Loan and to insure its use for the purposes intended by the
Lender and the Borrower.
14. Liability of Lender
-------------------
A. To Third Parties
----------------
The Lender shall in no event be responsible or liable to
any person other than the Borrower for its disbursement of or failure to
disburse the funds or any part thereof, and neither the
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contractor nor any subcontractor nor materialmen nor craftsmen nor laborers nor
others shall have any claim or right against the Lender under this Agreement or
the Lender's administration thereof. The Lender shall not be liable to any
materialmen, contractors, craftsmen, laborers or others for goods or services
delivered by them in or upon the property, nor for debts or claims accruing to
any such parties against the Borrower. Nor shall the Lender be liable for the
manner in which any disbursements under this Agreement may be applied by the
Borrower and the Contractor or either of them or for any compliance with the
Florida Construction Lien Law. The Borrower is not and shall not be an agent for
Lender for any purpose.
B. To the Borrower
---------------
The Borrower has accepted and does accept the full
responsibility for the selection of his own contractor and subcontractors and
all materials, supplies and equipment to be used in the construction, and the
Lender assumes no responsibility for the completion of the Improvements.
Further, the Borrower has accepted and does accept full responsibility for
compliance with the Florida Construction Lien Law and relieves the Lender of any
and all liability with respect to that Law and agrees to indemnify and hold the
Lender harmless from any and all liability under it of any nature whatsoever.
15. Loan Allocation
---------------
Attached hereto as Exhibit "A" and by reference made a part hereof, is
a Loan Allocation (the "Loan Allocation") for the development of the Property
and the construction of the Improvements. This Loan Allocation has been
submitted by the Borrower and approved by the Lender and allocates the total
cost of completion of the Improvements. No material deviation shall be made from
this Loan Allocation without the written consent of the Lender. Lender further
acknowledges that any cost saving achieved by Borrower for any line item in the
Loan Allocation may only be reallocated with the approval of the Lender.
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16. Use and Disbursement of Loan
----------------------------
A. Use of Funds
------------
The Borrower agrees that the proceeds of the Loan are to be
used for payment of material bills, labor and other uses and purposes
contemplated by the Lender Commitment including the construction of the
Improvements, and to the extent necessary for their full payment. The Lender may
disburse to itself, from the mortgage proceeds, any sum payable to the Lender on
account of interest, costs, charges, fees, brokerage commissions or expenses
owing to Lender by Borrower, or to any taxing authority any taxes or assessments
that may now be or become due on the debt evidenced by the Note or on the
Mortgage or by virtue of the Lender's ownership of the Note and/or Mortgage and
any such disbursements shall be considered with like effect as if same has been
made to Borrower.
B. Calculation of Advance
----------------------
Subject to the provisions of paragraph 16 C hereof advances
shall consist of (a) the amounts payable by Borrower pursuant to the
Construction Contract, (b) interest payable to Lender prior to maturity pursuant
to the terms of the Note, and (c) all other sums shown in Loan Allocation,
payable by or on behalf of Borrower in connection with the Project. The
aggregate amount of the advances will be the total of sums actually paid or
incurred by Borrower for each of the cost line items specified in Loan
Allocation, but in no event will the advances exceed the total of all sums
allocated to such cost line items, being in the aggregate the Loan Amount.
Notwithstanding anything herein to the contrary, Lender in its sole discretion
shall have the right, but shall not be obligated, to make any advance, in whole
or in part, before it becomes due and to increase, decrease, reallocate or
reapply the amount of the Loan to be disbursed for each item set forth in Loan
Allocation. Notwithstanding anything herein to the contrary, Lender shall not be
obligated to advance for construction costs more than the lesser of (a) the cost
of the work or materials incorporated into the Improvements, or (b) the
percentage of the work in place, multiplied by the estimated total cost of the
construction of the Improvements as determined from time to time by Lender's
Inspecting Engineer, less the amount by which such estimated total cost exceeds
the Loan Amount and less the aggregate amount of advances theretofore made, all
as approved for payment by Lender or Lender's Inspecting Engineer. Lender shall
have no obligation to make advances for the costs of materials not theretofore
incorporated into the Improvements, whether stored on or off site.
C. Method of Disbursement
-----------------------
Disbursements, as calculated pursuant to paragraph 16 B
hereof, will be made on a monthly basis and the amount disbursed will be based
on an Application and Certificate for Payment signed by the Contractor and
approved by the Supervising Architect, the Inspecting Engineer and Borrower,
certifying the status of construction and the percentage of completion. The form
for Application and Certificate of Payment shall be an AlA approved or other
form acceptable to the Lender. The Lender will disburse 90% of the amount due
based on the status of completion of the Improvements, withholding 10% of each
hard cost disbursement for contingencies (the "Retainage"), provided Lender
shall approve the status of construction certification. The Retainage will be
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disbursed upon completion of all Improvements and compliance with the terms of
this Agreement. Lender shall be given a minimum of ten (10) business days from
the receipt of all disbursement request documentation prior to the time funds
are to be advanced in order to allow time for inspection. Borrower acknowledges
that the foregoing disbursement schedule may be different than the disbursement
schedule contained in the Borrower's construction contract or subcontracts and
Borrower acknowledges that it is its responsibility to resolve any such
differences directly with its contractor or subcontractors.
17. Conditions Precedent to Disbursements
-------------------------------------
A. Initial Disbursement
--------------------
The following shall be conditions precedent to the initial
disbursement to be made hereunder:
(i) Appraisal. Lender receiving an appraisal,
acceptable to Lender, indicating an appraised value of the Property and the
Improvements in an amount sufficient to justify the loan in accordance with
Lender's current Loan policy.
(ii) Attorneys Opinion Letter. Lender being furnished
with an opinion letter from counsel to the Borrower, addressed to the Lender,
which must speak to the organization and standing of the Borrower, its authority
to borrow the funds contemplated by the Lender Commitment, the fact that the
Loan Documents constitute a binding legal obligation upon the Borrower which are
enforceable in accordance with their terms, the fact that the Loan Documents
comply with Florida Law including, but not limited to, the usury statutes and
that there are no matters of litigation known to said counsel that would
jeopardize the Loan. Said letter shall be in form and content acceptable to
Lender.
(iii) Architect Qualification. Lender being furnished
with and approving (a) information regarding the qualification and background of
the Supervising Architect, (b) an executed copy of the contract between
Supervising Architect and Borrower, (c) a letter from the Supervising Architect,
acknowledging to the Lender its obligation for the inspection of the
Improvements as they are being constructed and its agreement to provide the
Lender with copies of all inspection reports, (d) evidence of the Supervising
Architect's Errors and Omissions insurance coverage and (e) the Certificate
required by paragraph 10 hereof.
(iv) Architect's Contract. In the event that the
architect that prepared the Plans and Specifications is different from the
Supervising Architect the Borrower shall provide the Lender with a copy of its
contract with such architect and further obtain from such architect a consent to
the assignment of the plans and specifications to the Lender on a form to be
prepared by the Lender.
(v) Assignment of Life Insurance. Lender being
furnished with evidence of a life insurance policy in the face value of at least
FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) which shall designate the Lender as
beneficiary, as its interest may appear, shall
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provide that the Lender shall receive at least thirty (30) days' prior notice of
any cancellation or modification of the insurance and shall be otherwise
assigned to Lender on forms approved by Lender.
(vi) Building Permit. Lender being furnished with a
copy of the Building Permit authorizing the construction of the Improvements,
together with any and all other permits as may be required by any governmental
agency having jurisdiction over the Property, verifying that the Borrower has
the requisite approvals and authorizations to construct the Improvements in
accordance with the Plans and Specifications including evidence that all fees
and costs in connection with such permits have been paid in full.
(vii) Closing Statement. Lender being furnished with
a certified copy of the closing statement relating to the Borrower's purchase of
the Property.
(viii) Consent to Assignment of Construction
Documents. Lender being furnished with a Consent to Assignment of Construction
Documents prepared by attorneys for Lender and executed by the project architect
and the contractor(s).
(ix) Construction Contract. Lender being furnished
with and approving an executed contract between the Borrower and its general
contractor for the construction of the Improvements.
(x) DEP Compliance. Lender being furnished with, and
approving, evidence of Borrower's compliance with the requirements of the State
of Florida Department of Environmental Protection with respect to sewer,
wetlands conservation and water retention.
(xi) Easement Releases. Lender being furnished with
recorded releases satisfactory to Lender and Lender's counsel of the following
easements:
(a) Overhead and Underground Easement to the
City of Orlando and Orlando Utilities Commission
filed July 12, 1977 in Official Records Book 2798,
Page 1327, Public Records of Orange County, Florida.
(b) Right of Way Easement to Southern Xxxx
Telephone and Telegraph Company filed March 27, 1979
in Official Records Book 2993, Page 937, Public
Records of Orange County, Florida.
(xii) Engineer's Report. Lender receiving and
approving the Inspecting Engineer's Construction Cost Analysis as required in
Paragraph 10 of this Agreement.
(xiii) Environmental Audit. Lender being furnished
with, and approving, a Phase I Environmental Audit prepared by an environmental
auditing firm acceptable to Lender. Should the report indicate the presence of
any hazardous waste on the Property or indicate that additional testing should
be done on the Property no disbursement shall be made until the Property has
been cleaned to the satisfaction of the Lender and/or additional testing has
been completed and
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the Lender has been provided with a supplemental report indicating that the
Property is free of any toxic or hazardous waste or other environmental
problems.
(xiv) Insurance. Lender being provided with evidence
of insurance as required by the Loan Documents.
(xv) Lender Commitment. Borrower complying with all
conditions and requirements of the Lender Commitment that can be complied with
prior to closing.
(xvi) Plans and Specifications. Lender receiving and
approving the Plans and Specifications for the construction of the Improvements.
(xvii) Project Budget. Lender being furnished with,
and approving, a final project budget or allocation of funds setting forth the
total cost of the development of the Property including the construction of the
Improvements in sufficient detail to satisfy Lender's requirements.
(xviii) Soil Report. Lender being furnished evidence,
acceptable to Lender, that the subsurface soil conditions, flood control
ordinances and drainage conditions are suitable and satisfactory for the
construction of the Improvements.
(xix) Utilities. Lender being furnished with letters
from each of the utility companies serving the Property, which will be used in
connection with the development of the Property and the construction of the
Improvements, certifying to the Lender that such utilities are available to the
Property in sufficient capacity for the needs of the Improvements. Such
utilities shall include, but not be limited to, sewer, telephone, gas,
electricity and water.
(xx) Water Management Compliance. Lender being
furnished with, and approving, evidence of Borrower's compliance with the
requirements of the applicable Water Management District.
(xxi) Zoning. Lender being furnished with a letter
from the appropriate governmental zoning authority indicating that the Property
is zoned for the construction of the Improvements.
B. All Disbursements
-----------------
The following shall be conditions precedent to all disbursements:
(i) The Borrower shall not be in material default in the
performance of the terms and provisions of any of the Loan Documents.
(ii) The Loan shall be "in balance." "In balance" means that
the unadvanced portion of the Loan, in the aggregate and in each item of hard
cast and soft cost detailed in the Loan Allocation, equals or exceeds the
estimated remaining cost, in the aggregate and per item, to
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complete the Improvements and to pay all other items described in Loan
Allocation. Lender's estimate of the remaining cost shall be determinative and
binding upon Borrower.
(iii) Requests for disbursements shall be in writing and, at
the option of Lender, be accompanied by:
(a) An acknowledgment of payment and partial or full,
whichever may be applicable, release of mechanic's lien
executed by the contractor and all subcontractors, laborers
and materialmen entitled to claim a lien on the Property, in
form and content satisfactory to Lender.
(b) Certificate signed by the Borrower that all bills
for labor, materials and services then incurred and payable in
connection with the Improvements have been paid or will be
paid from the Loan advance being requested.
(c) Certificate signed by the Contractor, the Borrower,
Lender's Inspecting Engineer and the Supervising Architect,
certifying that the construction of the Improvements to date
has been performed substantially in accordance with the Plans
and Specifications.
(d) An updated title examination report and endorsement
to the Title Policy which updates the effective date of the
Title Policy, increases its coverage to include the
disbursement (if required), and lists as subordinate matters
any new documents of record which affect Borrower's title to
the Property. All costs in connection with said endorsement
shall be paid for by the Borrower.
(iv) The Lender being satisfied that the construction of the
Improvements is proceeding and being completed in accordance with the Loan
Documents.
C. Final Hard Cost Disbursement
----------------------------
The final hard cost disbursement shall be made upon completion of the
Improvements substantially in accordance with the Plans and Specifications, upon
written acceptance of the Improvements by the Borrower together with written
acknowledgment from the Borrower that the Improvements have been completed
substantially in accordance with the Plans and Specifications, upon Lender
receiving final lien waivers, contractors affidavits and releases as required by
this agreement and the Florida Construction Lien Law, in form and content
acceptable to Lender's counsel and, if appropriate, written certification signed
by the Supervising Architect and/or Lender's Inspecting Engineer that the
Improvements have been completed substantially in accordance with the Plans and
Specifications, and upon Lender receiving a copy of an unconditional Certificate
of Occupancy or Certificate of Completion as appropriate for the Improvements
issued by the appropriate governmental authority together with evidence that
there has been compliance with all applicable zoning ordinances, building and
use restrictions, and all other governmental laws, rules, regulations and
requirements necessary to permit the occupancy and full use of the Improvements.
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18. Use of Funds
------------
A. Trust Fund
----------
Borrower covenants that it will receive all advances hereunder
as a trust fund to be used to pay the cost of the Improvements, or other costs
expressly approved in writing by Lender, before using any part of same for any
other purpose, but nothing herein shall impose upon the Lender any obligation to
see to the proper application of such advance by the Borrower.
B. Interest Reserve
----------------
That portion of the Loan proceeds allocated for the payment of
interest, if any, (the "Interest Reserve") in Loan Allocation shall be retained
by Lender and shall be available for payment of accrued interest due Lender
under the Loan, and Borrower hereby authorizes Lender to advance such proceeds
of the Loan on behalf of Borrower directly to Lender each month to pay interest
due on the Note, notwithstanding that Borrower may not have requested an advance
of such amount. Such advance, if made, shall be made by a bookkeeping entry on
Lender's records, shall be added to the outstanding principal balance of the
Note and shall be deemed paid to and received by Borrower. The authorization
hereby granted, however, shall not obligate Lender to make any such advance nor
prevent Borrower from paying interest from its own funds. Borrower acknowledges
that the payment of interest by the method described in this section is for its
convenience and benefit.
C. Interest Calculation
--------------------
Interest shall be charged on each disbursement from the date thereof
and shall be due and payable in accordance with the terms more specifically set
forth in the Note.
D. Evidence of Payment
-------------------
Borrower shall furnish to Lender, whenever reasonably requested to do
so, satisfactory evidence showing that all monies theretofore advanced or paid
by Lender on account of the Loan have actually been paid or applied by the
Borrower to the payment of the cost of constructing the Improvements, or such
other costs as are contemplated in the Loan Allocation, and until such evidence
is produced, at the option of the Lender, no other or further advances or
payments shall be made by it hereunder.
E. Default
-------
The Lender shall not be obligated to make any disbursements hereunder
while in the sole judgment of the Lender any material default exists under the
terms of this Agreement or any of the Loan Documents.
19. Construction Lien Law
---------------------
12
Borrower shall be responsible for complying with all of the terms and
conditions of the Construction Lien Law, as set forth in Chapter 713, Part I,
Florida Statutes or as same may hereafter be amended ("Construction Lien Law").
In regard thereto:
A. Borrower acknowledges that it is Borrower's and not Lender's
responsibility to comply with the terms and conditions of the Construction Lien
Law and Borrower waives any and all claims or causes of action existing now or
in the future which it may have against the Lender involving any alleged breach
of any duty Lender may owe to Borrower to exercise reasonable care to see that
the payments and disbursements relating to this loan are made in compliance with
the Construction Lien Law whether such claim or causes of action arise out of
Lender's negligence or otherwise.
B. Borrower shall provide Lender with copies of any and all Notices to
Owner as the term is defined in the Construction Lien Law within five (5)
business days of the receipt thereof and provide copies of any other notices
served upon the Borrower in connection with the construction of the Improvements
within twenty-four (24) hours after the receipt thereof.
C. On all payments, the Lender may refuse to disburse any funds with
respect to any line item on the Application for Payment until it has received a
full or partial release from all persons serving Notice to the Owner as provided
for in the Construction Lien Law.
D. The Lender may withhold the last payment as provided in the contract
between the Borrower and the contractor or the Retainage until the final payment
is due. This shall not preclude Lender from withholding additional funds under
provisions of this Agreement.
E. The Lender may take any action it may deem advisable in connection
with any lienor or any party claiming a lien or giving notice to Borrower under
the Construction Lien Law or disclosed by any affidavit or otherwise. Nothing
contained in this paragraph shall preclude the Borrower's right to bond off any
lien that may be filed.
F. Borrower shall save and hold the Lender harmless from the claims of
any Mechanics Lien or Equitable Lien and pay promptly upon demand any loss or
losses which Lender may incur as a result of the filing of any such lien,
including the reasonable cost of defending same and the Lender's reasonable
attorneys fees in connection therewith.
G. If any claims of lien are filed against the Property which are not
paid or which are not satisfied or transferred to other security within ten (10)
days from the date any such lien is filed, the Borrower constitutes the Lender
as its attorney-in-fact for the purpose of recording a Notice of Contest of
Lien, provided Lender shall give Borrower ten (10) days written notice of its
intention to do so and provided further Lender shall have no obligation to
record a Notice of Contest of Lien; the Lender without incurring liability to
Borrower may at its option deposit funds from the Loan with the Clerk of the
Circuit Court of the appropriate county to transfer any liens against the
Property to that deposit, and any such deposit made shall be charged against the
account of the
13
Borrower. Notwithstanding anything herein to the contrary, this provision shall
not in any way prevent or prohibit the Borrower from contesting any lien that
may be filed.
H. Borrower hereby authorizes Lender to demand, upon Borrower s behalf,
the statement of account referred to in the Construction Lien Law of any
potential lienor filing a Notice to Owner. It is specifically understood and
agreed, however, that Lender's right to request such statements of account will
in no way impose any obligation on Lender to use such authority, and the
exercise of such authority on one or more occasions shall not create or imply
any obligation on the Lender to exercise such authority on subsequent occasions.
20. Power to Complete
-----------------
Upon any event of default in any Loan Document before completion of the
Improvements, the Lender shall have full power to take charge of and complete
the construction and make disbursements from the Loan for the benefit of the
Borrower or the Borrower's estate, but nothing contained in this Agreement shall
be construed in any way as a covenant on the Lender's part to take such action.
21. Costs
-----
All costs and expense incident to the Loan shall be paid by the
Borrower, including by way of illustration but not limitation, the following:
Documentary Stamps, Intangible Tax, Recording Fees, abstract charges, abstract
examination charges, title insurance charges, the cost of surveys and a
reasonable fee to be paid to the Lender's counsel in connection with the
preparation of the Loan Documents and/or other matters relating to the loan
transaction and shall be paid by Borrower immediately upon same becoming due. If
such costs are not promptly paid by the Borrower, Lender may make disbursements
from the Loan to pay such amounts.
22. Representations and Warranties of the Borrower
-----------------------------------------------
The Borrower represents and warrants that:
A. It will start construction of the Improvements on or before
forty-five (45) days from the date hereof and complete construction of the
Improvements on or before six (6) months from the date hereof, all substantially
in accordance with the Plans and Specifications and in accordance with
requirements of the Lender Commitment.
B. The financial statements of the Borrower and any guarantor
of the Note, heretofore delivered to the Lender, are true and correct in all
material respects and fairly present the respective financial conditions of the
subjects thereof as of the respective dates thereof and no materially adverse
change has occurred in the financial conditions reflected therein since the
respective dates thereof and no additional borrowings, which would have a
material adverse effect on the financial condition of the Borrower or any
guarantor of the Note, have been made by the
14
Borrower or any guarantor since the date thereof other than the borrowing
contemplated hereby or approved by the Lender.
C. Borrower, is a corporation, and (i) is duly incorporated,
(ii) is in good standing under the laws of the state of its incorporation, (iii)
is qualified to do business and is in good standing under the laws of the State
of Florida, and (iv) has stock outstanding which has been duly and validly
issued.
D. The Borrower has full power and authority to enter into the
Loan, execute the Loan Documents and consummate the transaction contemplated
hereby.
E. The Loan Documents have been approved by those persons
having proper authority and to the best of the Borrower's knowledge are in all
respects legal, valid and binding according to their terms.
F. The Plans and Specifications have been approved by each
governmental authority which may be required to review or approve the Plans and
Specifications.
G. The Property and the Improvements, when constructed in
accordance with the Plans and Specifications, do and shall comply with all of
the covenants, conditions and restrictions affecting the Property or any portion
thereof and shall comply with all governmental requirements.
H. All permits, approvals or consents of governmental
authorities and public or private utilities having jurisdiction necessary in
connection with the development of the Property have been issued and are in good
standing.
I. There are no actions, suits or proceedings pending against
the Borrower or the Property or, to the knowledge of the Borrower, circumstances
which could lead to such actions, suits or proceedings against or affecting the
Borrower or the Property, or involving the validity or enforceability of any of
the Loan Documents, before or by any governmental authority, except such
actions, suits and proceedings which have been specifically disclosed to and
approved by the Lender in writing. To the Borrower's knowledge it is not in
default with respect to any order, writ, injunction, decree or demand of any
court or any governmental authority.
J. All utility services necessary to the construction of the
Improvements and the occupation thereof for their intended purpose are available
at the boundaries of the Property, including water supply, storm and sewer
facilities, and electric and telephone facilities. Borrower has obtained all
necessary permits and permissions required from governmental authorities for the
unrestricted access to and use of such service in connection with the
construction and use of the Improvements.
K. The consummation of the transaction hereby contemplated and
the performance of the obligations of Borrower under and by virtue of the Loan
Documents will not result in any breach of, or constitute a default under, any
mortgage, security deed, deed of trust,
15
lease, bank loan or credit agreement, corporate charter or bylaws, or other
instrument to which Borrower is a party or by which it may be bound or affected.
L. That the Property has direct access to a paved, dedicated
right-of-way which is adequately maintained.
23. Assignment of Plans and Specifications, Construction Contract,
--------------------------------------------------------------
Permits, Agreements and Approvals
---------------------------------
The Borrower hereby assigns and sets over unto the Lender as additional
collateral security for the Loan:
A. All of its right, title and interest in and to the Plans and
Specifications and shop drawings prepared incidental thereto. Borrower agrees in
the event of default under the Loan Documents that Lender shall have the full
right, title and authority to complete the Improvements using said Plans and
Specifications. Borrower agrees, upon the request of the Lender, to execute a
separate assignment of the Plans and Specifications, which assignment shall be
consented to by the architect that prepared the Plans and Specifications.
B. All of its right, title and interest in and to all contracts
heretofore or hereafter entered into by the Borrower for the construction of the
Improvements, including all subcontracts relating thereto.
C. All of the permits heretofore or hereafter obtained as may be
required by the governmental authority for the construction of the Improvements,
together with any other permits, agreements, surveys, governmental approvals,
consents, licenses, utility agreements, certificates and other documents or
agreements of any kind or nature whatsoever which are used, entered into or held
by the Borrower in connection with the Borrower's acquisition of the Property or
construction of the Improvements.
D. All warranties covering any furniture, equipment, machinery,
building supplies and materials, appliances, fixtures and other property now or
hereafter located or placed upon the Property including, without limitation, air
conditioning, heating and other appliances and equipment together with any and
all warranties of workmanship in connection with any work done.
Borrower hereby covenants and warrants to the Lender that it has not
executed any prior assignment of the foregoing and will not execute any
subsequent assignment thereof.
24. Default and Remedies
--------------------
A. Default
Subject to any applicable cure periods set forth in the Loan
Documents the following shall constitute an Event of Default:
16
(i) The failure of the Borrower to comply with the
terms and conditions of the Lender Commitment.
(ii) The occurrence of any default under any of the
Loan Documents.
(iii) The occurrence of any non monetary default
under this Agreement, if such default is not cured by the
Borrower within fifteen (15) days after receipt of written
notice thereof.
(iv) The failure of the Borrower to commence
construction of the Improvements as required in this Agreement
or if construction of the Improvements does not proceed in a
manner which is substantially in compliance with the terms of
this Agreement or any Loan Document and in a manner reasonably
satisfactory to Lender.
(v) Failure of the Borrower to pay any sums due in
connection with the construction of the Improvements. This
requirement shall not obligate the Borrower to make payments
that the Borrower does not think are reasonably due and
payable so long as the non-payment of any such amounts does
not jeopardize the lien of the Mortgage or the financial
stability of the Project.
B. Remedies
--------
Upon the occurrence of any material event of default hereunder, or
under the Loan Documents, Lender shall have the absolute right, at its option
and election, and in its sole discretion to:
(i) Refuse to disburse any funds hereunder.
(ii) Take immediate possession of the Property as
well as all other security for the Loan as is necessary to fully complete the
Improvements as required hereunder and to do anything in its sole judgment to
fulfill the obligations of the Borrower hereunder.
(iii) Exercise any and all rights, privileges or
remedies available to Lender under any Loan Document, or as otherwise may be
permitted by applicable law.
The remedies and rights of Lender hereunder and under the Loan
Documents shall be cumulative and not mutually exclusive. Lender may resort to
any one or more or all of the remedies but not to the exclusion of any other
remedy. No party, whether contractor, material-man, subcontractor, laborer or
supplier shall have any interest in Loan funds withheld because of default, and
shall have no right to garnish, require or compel payment thereof to be applied
towards discharge or satisfaction of any claim or lien which such party may have
for work performed or materials supplied for the development of the Property and
construction of the Improvements. Any action contemplated herein taken by the
Lender shall not relieve the Borrower of its responsibility to furnish any
additional funds needed to complete the Improvements.
17
25. Miscellaneous
-------------
A. Recitals
--------
The recitals contained herein are incorporated as covenants and
agreements and are made a part hereof. The addresses stated herein may be
changed as to the applicable party by providing the other party with notice of
such address change in the manner provided in this paragraph; provided, however,
so long as the Borrower is the owner of all of any part of the Property the
address of the Borrower must be located in the continental United States of
America.
B. Notices
-------
Any written notice, demand or request that is required to be made in
any of the Loan Documents shall be served in person, or by registered or
certified mail, return receipt requested, or by express mail or similar courier
service, addressed to the party to be served at the address set forth in the
first paragraph hereof. The addresses stated herein may be changed as to the
applicable party by providing the other party with notice of such address change
in the manner provided in this paragraph. In the event that written notice,
demand or request is made as provided in this paragraph, then in the event that
such notice is returned to the sender by the United States Postal Service
because of insufficient address or because the party has moved or otherwise,
other than for insufficient postage, such writing shall be deemed to have been
received by the party to whom it was addressed on the date that such writing was
initially placed in the United States Postal Service or courier service by the
sender.
C. No Partnership or Joint Venture
-------------------------------
Nothing contained in this Agreement nor the acts of the parties hereto
shall be construed to create a partnership or joint venture between the Borrower
and the Lender.
D. No Waiver
---------
No failure by the Lender to exercise and no delay by it in exercising
any right, power, or privilege under this Agreement shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power, or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies under
this Agreement are cumulative and not exclusive of any rights or remedies
provided by law.
E. Choice of Law and Venue
-----------------------
This Agreement shall be governed by the Laws of the State of Florida,
and the United States of America, whichever the context may require or permit.
The Borrower and all guarantors, if any, expressly agree that proper venue for
any action which may be brought under this Agreement in addition to any other
venue permitted by law shall be any county in which property encumbered by the
Mortgage is located as well as Orange County, Florida. Should Lender institute
any action under this Agreement, the Borrower and all guarantors, if any, hereby
submit themselves to the jurisdiction of any court sitting in Florida.
18
F. Survival of Agreements
----------------------
All agreements, representations, and warranties made in this Agreement
shall survive the making of the advances hereunder.
G. Attorneys' Fees
----------------
Should the Lender be required to employ the services of an attorney to
enforce its rights hereunder, the Borrower shall be required to pay the
reasonable cost of same, together with any reasonable costs incurred in
connection with any legal action commenced therewith.
H. Successors
----------
This agreement shall be binding upon and inure to the benefit of the
Borrower and the Lender and their respective successors and to the assigns of
the Lender.
I. Counterparts
------------
This agreement may be executed in any number of counterparts and each
counterpart shall be deemed to be an original.
J. Time of the Essence
--------------------
Time is of the essence with respect to each provision in this Agreement
where a time or date for performance is stated. All time periods or dates for
performance stated in this Agreement are material provisions of this Agreement.
K. Lender Sign
-----------
Borrower hereby grants to Lender the exclusive right and license to
place and maintain upon the Property, during construction of the Improvements,
such signs as Lender may elect, subject to applicable governmental regulations,
advertising that financing for the construction of the Improvements is being
furnished by the Lender.
L. Termination
-----------
This Agreement shall terminate and become of no further force and
effect at such time as a satisfaction of the Mortgage is recorded in the Public
Records of the County.
M. Execution of Lender
-------------------
It is not contemplated by the parties that this Agreement will be
executed by Lender, as by its acceptance of and disbursements of funds under
Note, it shall be bound by the terms hereof and shall be deemed to have executed
same.
00
X. Xxxxx Xxxxxxx
-------------
In the event the Borrower shall be delayed or hindered an or prevented
from the performance of any act, other than the Borrower's obligation to make
payments under the Note, by reason of strikes, lockouts, unavailability of
materials, failure of power, restrictive governmental laws or regulations,
riots, insurrections, the act, failure to act, or default of the other party,
war or other reason beyond its control, then performance of such act shall be
excuse for the period of the delay and the period for the performance of such
act shall be extended for a period equivalent to the period of such delay.
Notwithstanding the foregoing, the lack of funds shall not be deemed to be a
cause beyond the control of either party.
0. Joinder of Guarantor
--------------------
XXXXXX X. XXXX, XX., the Guarantor of the Note, joins in the execution
of this Construction Loan Agreement to acknowledge his understanding of the
terms and conditions hereof and to further acknowledge that he will comply with
all of the terms and conditions which he, as a Guarantor of the Note, must
comply with or satisfy.
P. Waiver of Trial By Jury
-----------------------
The Borrower and the Lender 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 the Loan Documents
and any agreement contemplated to be executed in conjunction therewith, or any
course of conduct, course of dealing, statements (whether verbal or written) or
actions of either party. This provision is a material inducement for the Lender
entering into the loan evidenced by the Loan Documents.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the day and year first written
above.
Signed, sealed and delivered in the presence of:
BOAT TREE, INC., a Florida corporation
____________________________ By:___________________________________
XXXXXX X. XXXX, XX., President
____________________________ "Borrower"
____________________________ ___________________________________
XXXXXX X. XXXX, XX.
"Guarantor"
____________________________
20
ASSENT BY CONTRACTOR
--------------------
The undersigned hereby certifies that it is the general contractor for
Borrower for the construction of Improvements, and in consideration of the
making of this Loan by Lender, the undersigned agrees to be bound by the terms
of this agreement insofar as any act is required of the contractor by this
agreement, and further agrees to perform the same regardless of the fact that
the terms of this agreement may conflict with the construction contract and the
undersigned hereby subordinates its right to any lien on the Property to the
lien of the Mortgage. Any loan funds received by the undersigned shall be used
only to pay for costs which are authorized hereunder. The undersigned agrees
that in the event of default by Borrower under the Construction Loan Agreement,
it shall at Lender's request continue performance of the construction contract
in accordance with its terms and this agreement, provided it is reimbursed in
accordance with the contract and this agreement for all work, labor and
materials provided by the undersigned. By executing this assent, Contractor
shall not be deemed to be in privity with Lender. The Contractor acknowledges
that it is the Borrower's responsibility to comply with the provisions of the
Florida Construction Lien Law and that the Lender has no obligation to the
Contractor for compliance with any of the provisions of the Construction Lien
Law including but not limited to, the section thereof titled "Construction
Contract Prompt Payment Law".
Signed, sealed and delivered
in the presence of: PERTREE CONSTRUCTORS, INC., a
Florida corporation
______________________________ By:__________________________
______________________________
21
ASSENT BY ARCHITECT
-------------------
The undersigned hereby certifies that it is the architect for Borrower
for the preparation of the Plans and Specifications and in consideration of the
making of this Loan by Lender, the undersigned agrees that the Plans and
Specifications may be used by Lender for any purposes relating to the Property
and Improvements in the event of default by Borrower under this agreement,
agrees to be bound by the terms of this agreement insofar as any act is required
by the architect under this agreement, and further agrees to perform the same
regardless of the fact that the terms of this agreement conflict with the
contract between the Borrower and the undersigned and the undersigned hereby
subordinates its lien on the Property to the lien of the Mortgage. The
undersigned agrees that in the event of default by Borrower under this
agreement, it shall at Lender's request continue performance of its agreement
with Borrower in accordance with the terms thereof and this agreement, provided
that it is reimbursed in accordance with its agreement with Borrower. The
undersigned further agrees not to materially modify, amend or in any way change
the Plans and Specifications or any portions thereof or its agreement with
Borrower without the prior written consent of Lender. By executing this assent,
Architect shall not be deemed to be in privity with Lender. The Architect
acknowledges that it is the Borrower's responsibility to comply with the
provisions of the Florida Construction Lien Law and that the Lender has no
obligation to the Architect for compliance with any of the provisions of the
Construction Lien Law including but not limited to, the section thereof titled
"Construction Contract Prompt Payment Law".
Signed, sealed and delivered
in the presence of: CUHACI & XXXXXXXX, ARCHITECTS,
INC., a Florida corporation
By:___________________________
XXXXXX XXXXXXXX, President
22
ALLONGE
-------
This Allonge is attached to and made a part of that certain Promissory
Note dated November 28, 1995, in favor of AMSOUTH BANK OF FLORIDA, in the amount
of ONE MILLION ONE HUNDRED FIFTY THOUSAND DOLLARS ($1,150,000.00) made by BOAT
TREE, INC., a Florida corporation ("Note") which is modified as follows:
1. Subparagraphs (b) and (c) on the first page of the Note are hereby
deleted in their entirety and are replaced with the following:
"(b) Interest on this Note, as calculated above in paragraph (a),
shall be payable monthly in arrears on the 28th day of each
month commencing the 28th day of December, 1995 and continuing
thereafter on the same day of each successive month including
the month of September, 1996.
(c) Interest on this Note, as calculated above in paragraph (a),
and principal shall be paid in consecutive monthly installments
of NINE THOUSAND FOUR HUNDRED EIGHTY-EIGHT AND 56/100 DOLLARS
($9,488.56), on the 28th day of each month commencing
October, 1996, and including the month of May, 2001."
2. In all other respects the Note remains unchanged.
BOAT TREE, INC., a Florida corporation
By: /s/ XXXXXX X. XXXX
----------------------------------
XXXXXX X. XXXX,
President
STATE OF FLORIDA
COUNTY OF ORANGE
The foregoing instrument was executed before me this 13th day of May,
1996, by XXXXXX X. XXXX, as President of BOAT TREE, INC., a Florida corporation,
on behalf of the corporation.
He is personally known to me.
/s/ XXXXX XXXXX
---------------------------------
Notary Public
My Commission Expires:
23
