EXHIBIT 10.42
THIS INSTRUMENT PREPARED BY:
XXXX X. XXXXXXXXX, ESQ
OCEAN BANK, LEGAL DEPT.
000 XX 00 XXXXXX, #000
XXXXX, XX 00000
CONSTRUCTION LOAN AGREEMENT
THIS AGREEMENT, made and entered into this 16th day of July, 2001, by
and between, ORIOLE HOMES CORP., a Florida corporation, hereinafter called the
"Borrower", which said term "Borrower" shall be construed singular or plural,
masculine or feminine, and corporate, partnership or individual, whichever the
context hereof requires or admits, and OCEAN BANK, A STATE BANKING CORPORATION,
its successors and assigns, hereinafter called the "Lender"
WITNESSETH:
WHEREAS, THE BORROWER is vested with fee simple title to that certain
property situate in the County of Palm Beach, State of Florida, known and
described as follows:
---SEE EXHIBITS "X-0", "X-0", "X-0", "X-0", AND "A-5" ATTACHED
HERETO AND MADE A PART HEREOF---
and the said Borrower desires to improve said property above-described as set
forth in the plans and specifications and in the application for the mortgage
loan and said Borrower is without sufficient funds with which to effect said
development, and said Lender, as hereinafter provided, has agreed to make a loan
to said Borrower on the terms and conditions hereinafter set forth but not
otherwise; and
WHEREAS, simultaneously with the execution and delivery hereof the
Borrower has made, executed and delivered to the Lender those certain promissory
notes of even date herewith in the principal sum of $9,840,000.000 AND
$3,120,000.00, (collectively the "Notes") due on or before the date specified
therein, and a certain first mortgage deed of even date securing the payment of
such notes and encumbering the property hereinabove described, and said notes
and mortgage deed are intended to serve to evidence and secure said loan;
NOW, THEREFORE, in consideration of the execution and delivery of said
notes and mortgage and of the agreement of said Lender to make said development
loan, and of the mutual and separate agreements, covenants and warranties of the
parties hereto, it is agreed, covenanted and warranted by and between the
parties hereto as follows:
Page 1 of 11
1. THE BORROWER covenants, warrants and agrees:
A. The Borrower is indefeasibly seized of said described property in fee
simple and has full power and lawful right to convey the same free and
clear of all encumbrances, except as to current taxes not yet due and
payable, and further subject to the covenants and restrictions of
record, which covenants and restrictions contain no rights of reverter
or forfeiture of title in case of violation thereof.
B. The Borrower covenants and warrants that even though improvements have
been erected on the property, there are no outstanding invoices for any
materials, labor or other matters which could create a lien against the
property superior to the mortgage in favor of Lender.
C. The Borrower shall also furnish the Lender at Borrower's expense
forthwith, and prior to the disbursement of any funds from the
development loan account a policy for title insurance insuring all of
mortgaged property in the aggregate sum of the mortgage indebtedness
hereinbefore mentioned. Such policy shall be in a company acceptable to
the Lender and shall agree to insure to the Lender or its nominee or
assignee that said mortgage is a valid lien on said property, with the
Borrower vested with a marketable and insurable fee simple title free
and clear of all exceptions whatsoever except said mortgage and current
taxes not yet due and payable. The Borrower shall furnish the Lender at
Borrower's expense a current print or prints of survey showing said
property vacant and free from encroachments and, upon the completion of
said improvement, a print or prints of survey showing said improvement
properly located in said property to show that any covenants and
restrictions and zoning ordinances affecting said property have not
been violated by the improvement of said lands. All surveys shall be
made by a civil engineer or surveyor acceptable to the title insurance
company and to the Lender and shall be certified to each.
D. If said title policy or any of the surveys shall show the title to the
aforesaid premises to be defective so as not to be marketable and
insurable as aforesaid or not as warranted above, or so encumbered or
defective that said mortgage is not a first lien, THE BORROWER shall
within twenty (20) days after notice from the Lender is mailed to the
BORROWER pointing out the defects or objections, remove all such
defects so that the title will be acceptable to the Lender and
marketable and insurable as aforesaid. If the defects cannot be cured
and the encumbrances removed and the title made marketable and
insurable as aforesaid, this agreement shall, at the option of the
Lender, be null and void and of no force and effect, and in that event
the Borrowers expressly agree to reimburse the Lender for all costs and
expenses incurred by them in connection with such mortgage and this
agreement, including reasonable attorney's fees, same to be immediately
due and payable and secured by the lien of said mortgage.
E. The Borrower shall furnish and pay the premiums for, from the
commencement of development, fire and extended coverage insurance and
insurance against such other hazards including flood insurance, if
necessary, as well as builder's risk insurance, as shall be required by
the Lender, in a company or companies acceptable to the Lender, in the
full insurable value of the buildings and improvements and covering the
same, said policies to be in such amount and form so that Lender will
be a co-insured. Loss under such insurance shall be payable first to
Lender to extent of its interest and lien, unless proceeds are applied
for restoration as provided in the Mortgage. The Borrower shall furnish
at its expense such worker's compensation, builder's risk and liability
insurance as may be required by law and the Lender.
Page 2 of 11
F. The Borrower shall, in a true, thorough, workmanlike and substantial
manner, improve the above-described property in accordance with the
plans and specifications therefor heretofore submitted to the Lender
and approved by it, which plans and specifications shall be construed
together in such manner so that any work, structures, or parts thereof
exhibited in the plans and not mentioned in the specifications, or vice
versa, are to be constructed and erected as if they were exhibited in
the plans and mentioned in the specifications. The Borrower shall fully
equip said building(s) and improvements and install and pay for any
fixtures and materials and complete and pay for any landscaping, walls,
drives, approaches or walks required by said plans or specifications or
the mortgage loan or certificates of reasonable value hereinafter
mentioned or described in the loan application, and place in said
building(s) and improvements and pay for any chattels, furniture,
furnishings or equipment as required by said plans or specifications or
mentioned or described in the loan application. The Borrower, at its
own cost, charge and expense shall pay for all materials, labor,
scaffolding, implements and cartage of every description for the due
performance of the several work and the complete development of said
land, herein contracted to be performed by the Borrower. Borrower shall
not make any changes in the plans or specifications or deviate
therefrom except for changes in the amount of $10,000.00 per item or
$25,000.00 in the aggregate for each building, except with the written
consent of the Lender, which consent shall not be unreasonably
withheld.
G. The Borrower shall take all necessary steps to assure that development
of said land shall proceed continuously and diligently, and in all
events shall complete development of said land, and perform all
covenants and promises contained in the preceding sub-paragraph (F)
hereof not later than twenty-four (24) months from date of first
disbursement, unless extensions are exercised pursuant to the Notes.
H. The Borrower covenants and warrants that all necessary licenses or
permits have been obtained to permit the completion of said land
development and that all materials purchased for delivery to said
property and for use in said development, and all labor contracted or
hired for or in connection with said development shall be used and
employed solely on said property and in said development and only in
accordance with said plans and specifications. Copies of the necessary
permits shall be furnished by Borrower to Lender forthwith prior to any
disbursement of funds pursuant to the Agreement.
I. The Borrower agrees to comply with all federal, state and local laws,
rules and regulations of any nature whatsoever, applicable zoning
ordinances and subdivision restrictions, now in effect or in the
future.
J. The Borrower shall furnish, on completion of construction on said
property duly notarized, all receipted bills, certificates, affidavits,
claims of liens and other documents which may be required by the lien
laws of the State of Florida or which shall be required by the Lender
or the title insurance company as evidence of full payment for all
labor and materials incident to said construction and of said land from
all liens therefor.
K. The Borrower shall supervise the improvement of said land without
charge or deduction for such services.
L. The Borrower shall comply with and perform each and every one of the
provisions, terms, requirements, conditions, and contingencies embodied
in that certain mortgage loan commitment covering said property, issued
by Lender and identified by date and amount as follows:
Page 3 of 11
DATE OF COMMITMENT AMOUNT
May 2, 2001 $ 12,960,000.00
and shall execute all instruments required to fully comply with and
perform same and shall abide by, complete and carry out all the
Borrowers' representations, proposals and obligations made by and in
the application for such mortgage loan commitment. A copy of the
aforementioned commitment letter is attached hereto, made a part hereof
and marked EXHIBIT "B".
M. The Borrower shall furnish Lender at Lender's request forthwith and
pursuant to this Agreement, duly executed copies of the contract
between contractor, Borrower and any other contracts and/or
sub-contracts between lienors and/or materialmen and Borrower.
2. Funds represented by the aforesaid mortgage indebtedness shall be
disbursed and advanced by the Lender from time to time as follows:
A. Subject to the provisions hereof, such funds shall be disbursed and
advanced by the Lender from time to time as follows:
(i) Disbursements with respect to construction costs shall be made as
the development of the land has progressed. The funds to be drawn
during the term of this loan will be disbursed to Borrower monthly or
more often if Lender so agrees in writing on a direct payment basis as
work progresses upon receipt by Lender of properly executed draw
requests acceptable to Lender both as to form and substance together
with bills and/or lien waivers which are to be accompanied by a clear
current title search certification issued by a title insurance company
acceptable to Lender. In addition, Lender shall receive prior to any
disbursement a certification from Lender's approved engineer and/or
inspector indicating thereon the value of the work in place. The costs
of disbursements and inspections are to be paid by Borrower.
(ii) Lender may, in its sole discretion, establish a five percent
(5%) "hold-back" requirement for the disbursements of the
funds hereunder.
B. From the amount of the first advance or each advance or disbursement
aforesaid, there may be deducted before same is advanced or disbursed,
at the option of the Lender, all interest, costs, charges, fees,
brokerages, commissions or expenses owing the Lender by the Borrower
incident to the construction loan.
C. Notwithstanding the provisions of sub-paragraph A last above and prior
to the disbursement of any funds as set forth in said sub-paragraph A,
the Borrower shall expend of Borrower's own funds the sum necessary to
complete the improvement on such land over and above the amount to be
advanced hereunder, in such amount as Lender's inspector in its sole
discretion shall determine on account of the construction costs of the
land and improvements and the costs of chattels, or equipment, if any,
required by the aforesaid mortgage loan commitment as to such land (not
including, however, cost of land or cost of any chattels or equipment
which are not required to be pledged by said mortgage loan commitment),
and the Borrower shall submit to the Lender evidence satisfactory to it
that said sum was expended from Borrower's own
Page 4 of 11
funds and not from any secondary financing involving any of the
property described above or the improvements to be made thereon. Only
after the Borrower complies with the foregoing terms of this
sub-paragraph shall the Lender be obligated to make any disbursements
under said sub-paragraph A. Should Borrower not agree with the report
of Lender's inspector, Borrower may request that Lender choose a second
inspector to review or re-determine the amounts necessary to complete
the construction. Should Lender and Borrower disagree with these
reports, the two inspectors will choose a third inspector and the
determinations of the third inspector will be binding on the Lender and
the Borrower.
D. Notwithstanding any other provision hereof, the Lender shall be
entitled at its option to refuse to make any disbursements hereunder,
or to withhold a part of any disbursements, for such time that the
Borrower shall fail to perform or comply with any condition,
contingency or requirement of the above-mentioned mortgage loan.
E. Said funds shall be disbursed in accordance with all of the standard
controls typically placed upon the disbursement of construction
proceeds by Lender. Disbursements will be made in accordance with the
Lender's stage payment plan or directly to the contractor,
subcontractor and/or supplier or in such other manner as Lender may
determine. Requisitions for advances shall be on Lender's approved
forms. All determinations, as to cost-to-complete, compliance with
plans, specifications and building codes, and amount of advances and
other matters relating to disbursements shall be pursuant to the
inspection reports.
F. No change orders in excess of $10,000.00 per item and $25,000.00 in the
aggregate per building, will be permitted unless approved in writing by
the Lender herein, contracted purchaser, permanent lender or any other
party having an interest in the property described hereinbefore.
G. If the services of an architect and/or engineer are employed, Lender
may at its option, but at Borrower's expense, require the architect's
and/or engineer's certificate as to the progress of development before
making each disbursement in accordance with the aforesaid schedule.
H. The Lender may, at its option, from time to time during development and
at its completion require for its own information and protection
evidence from the Borrower or contractor, or both, of the payment of
bills for all labor and materials, but the Lender shall not be required
or responsible to ascertain that any bills are paid.
I. Without the prior written consent of the Lender, all monies disbursed
hereunder shall be used solely on account of costs of construction and
improvements on the herein-above described property and expenses of the
construction loan and no such monies shall be diverted or borrowed for
any other use.
J. The Lender shall not be responsible or liable to ascertain or determine
at the time of making any disbursements hereunder, or at any other
time, that the improvement of said land has been in accordance with the
plans and specifications or any contract of the Borrower for the
improvement thereof, nor that same as proposed or constructed is
permitted by restrictions or zoning ordinances, if any, affecting said
premises.
K. Interest until maturity shall accrue at the rate of interest set forth
in the notes of even date executed by Borrower and shall be due and
payable by Borrower to Lender in accordance therewith. All interest
shall be secured by the lien of the mortgage first above described and
if not paid by Borrower before the next advance due under this
Agreement, it may be deducted by Lender from the next advance due
hereunder.
Page 5 of 11
L. Lender shall not be liable to materialmen, contractors,
sub-contractors, laborers or other for goods and/or services delivered
and/or rendered by them in or upon said premises or employed in said
development or for any debts or claims accruing in favor of any such
parties and against the Borrower or others or against said premises.
The Borrower is not and shall not be the agent of the Lender for any
purpose whatsoever.
M. All inspection services, if any, rendered by the Lender or its
officers, agents, or employees, shall be rendered solely for its own
information and protection. Neither the Lender nor its officers, agents
or employees shall be in any way liable for the failure of any dealer,
contractor, sub-contractor or laborer to deliver materials or perform
services to be delivered or performed by them.
N. If and when it shall appear in Lender's inspector's discretion at any
time during the development that the balance of costs of all the
construction and improvements to be performed as aforesaid
(cost-to-complete) will exceed the aggregate of the mortgage
indebtedness, less such sums thereof as have been theretofore advance
or reserved, the Borrower, forthwith upon demand of the Lender, shall
deposit with the Lender within thirty (30) days after delivery of
notice to Borrower, the excess amount of such costs of such development
and improvements and failure to do so shall constitute a default under
this agreement. Should Borrower not agree with the report of Lender's
inspector, Borrower may request that Lender choose a second inspector
to review or re-determine the amounts necessary to complete the
construction. Should Lender and Borrower disagree with these reports,
the two inspectors will choose a third inspector and the determinations
of the third inspector will be binding on the Lender and the Borrower.
O. If the Borrower or Borrower's contractor shall fail to perform any
non-monetary obligation according to the terms of this Agreement or
cause or permit conditions to arise so that performance would be
rendered unduly difficult or hazardous for the Lender, or if the
Borrower shall fail, neglect or refuse to perform either or any of
Borrower's promises or agreements hereunder, or breach any promise,
covenant, warranty or agreement made hereby or made under said Notes or
the mortgage securing the same, or if it becomes apparent based on
inspections performed, that the Borrowers or Borrower's contractor will
not complete said land development within the time specified in this
agreement, or if the Borrower shall become insolvent or if there is
filed a voluntary or involuntary petition in bankruptcy of the
Borrower, and not dismissed within thirty (30) days, or if a
conservator or trustee or receiver is appointed for the assets of the
Borrower or an assignment for the benefit of creditors is made by the
Borrower, then and in either such event the Borrower shall be
considered in default hereunder and the Lender may, at its option,
withhold further disbursements hereunder and give the Borrower written
notice by mail to remove such default, and upon failure of Borrower to
cure said default within thirty (30) days after the notice shall have
been delivered, the Lender may, at its option, either:
(i) declare all the sums evidenced by said Notes and secured
by said mortgage and all sums due hereunder to be immediately due and
payable, and unless same are paid on demand, may foreclose said
mortgage; or
(ii) enter upon and take possession of said premises and
assume full charge of the development of said land as the agent of the
Borrower and Borrower's contractor, if any, and may complete or enter
into a contract with another to complete, said land development and may
pay, settle or compromise all existing bills and claims which may be
claims against the said property or as may be necessary or desirable
for the completion of the job in accordance with the plans and
specifications, and the Borrowers agree to pay
Page 6 of 11
the Lender, on demand, all costs and expenses of completion of the
improvement of the land including all sums disbursed by the Lender
for its services incident to thereto and reasonable attorney's
fees incurred by the Lender incident to said default and the
completion of said construction or incident to the enforcement of
this provision hereof, and all such sums, even though they may,
when added to the construction monies advanced and disbursed under
this Agreement, exceed the amount of said notes, shall be secured
by the lien of said mortgage as though the same were a part of the
debt originally described in and secured thereby. If said sums are
not paid by the Borrower immediately on demand, the Lender may
declare all such sums and all other sums secured by said mortgage
immediately due and payable and proceed to foreclose the same.
3. If at any time the improvements are being made in violation of any
environmental laws, regulations, rules, covenants, restrictions or
zoning ordinances of governmental authorities affecting said property,
the Lender shall be entitled to withhold further disbursements
hereunder and, unless such violation is corrected and cured by the
Borrower forthwith on notice to the Borrower, the Lender may at its
option, declare all funds previously advanced and all other sums
evidenced by the notes and secured by the mortgage to be immediately
due and payable, and unless same are paid on demand, may foreclose the
mortgage.
4. The death of Borrower, or dissolution if same is a corporation or other
business entity, shall not terminate the obligations of the Borrowers
to complete said construction and perform all other agreements
hereunder, and the surviving Borrower, if any, and/or Trustee, if
applicable, or the estate of a deceased Borrower shall be required to
carry out this Agreement in the manner and within the time herein
provided. Funds to be disbursed hereunder may be disbursed
notwithstanding the death of the Borrower, and if the deceased is one
of the persons to whom disbursement is to be made under Paragraph 2E
hereof, disbursement following the Borrower's death may be made to the
other or others named in said Paragraph 2D.
5. Should any dispute arise between the Borrowers and the Lender
respecting the true significance and meaning of the plans and
specifications, the same shall be decided by a competent architect
and/or engineer to be selected by the Lender at the cost of the
Borrower.
6. All charges and expenses (including but not limited to Lender's fees,
recording fees, intangible tax on mortgage, documentary stamps on
Notes, abstracting, counsel fees, etc.) in connection with this
construction loan are due and payable by Borrowers to Lender upon
demand and, if not paid by Borrower before the first disbursement under
this construction loan, may be deducted by Lender from the first
disbursement hereunder.
7. The Borrower further represents, covenants, warrants and agrees that:
A. No Notice of Commencement will be recorded or posted prior to the
recording of the mortgage hereinabove referred to that has not
been terminated prior to the recording of the Mortgage. The Notice
of Commencement will be properly recorded and posted prior to
commencement of any further improvements; and the improvements
described in said Notice will be commenced within thirty (30) days
after such recording.
B. Lender's advances hereunder shall be disbursed to Borrower, as
hereinabove provided; and Lender is not an agent of the Borrower,
and has no obligation or responsibility to the Borrower or the
contractor or lienors, for the further disbursement and proper
payment of said funds to any parties for work, labor, services and
materials done, performed and
Page 7 of 11
supplied for the development and improvements on the property, or for
compliance with or performance of any requirements or provisions of the
Florida Construction Lien Law, or otherwise.
C. Lender's advances to Borrower hereunder shall be disbursed by Borrower
only pursuant to Borrower's contracts and under the Florida
Construction Lien Law, for work, labor, services and materials done,
performed and supplied to the property, and Borrower will timely comply
with all requirements and provisions of the Florida Construction Lien
Law and will require and obtain from all contractors, sub-contractors
and/or lienors all duly notarized affidavits required, or permitted to
be required, by said Law, and will construct and complete the
improvement of said land in accordance with the plans and
specifications therefor, free and clear of all claims of lien;
D. If a Claim of Lien shall be filed against the property, the Borrower,
on request of Lender or the title insurer, will promptly make and
record a "Notice of Contest of Lien"; and cause said lien to be bonded
with a cash surety or bond in the amount required by law for the
bonding of mechanic's liens within thirty (30) days of the recording of
the claim of lien; and
E. If and when requested by Lender or the title insurer, Borrower will
promptly furnish satisfactory proof of compliance with all the
foregoing and copies of all notices, affidavits and other papers
received, made or given by Borrowers relating to the property. Lender
shall have the right to withhold payment of any advance otherwise due
Borrower hereunder whenever, in the opinion of Lender or title insurer,
the further disbursement of said funds by Borrower would not constitute
"proper payments" for work, labor, services or materials done on and
supplied to the property under Borrower's contracts or under the
Florida Construction Lien Law.
8. Borrower releases Lender from any liability or damages arising out of
or related to the disbursement of the proceeds of Lender's advances to
Borrower hereunder, including any non-compliance or improper compliance
with the Florida Construction Lien Law, and Borrower and contractor
severally agree to indemnify and hold harmless the Lender from and
against any such liability or damages. Further, Borrower will cause the
contractor to release the Lender from any liability or damages under
the same terms recited in this paragraph.
9. The mailing of a written notice of demand, addressed to the Borrower,
directed to the said Borrower at the last address actually furnished to
the Lender, and mailed by the United States certified mail, return
receipt request, shall be sufficient notice and demand in any case
arising under this instrument and required by the provisions hereof or
by law. Notice to Lender, if required hereunder, shall be deemed
properly given forwarded by certified mail, return receipt requested,
with sufficient postage affixed thereto and addressed to Lender at 000
X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000.
10. Nothing herein shall be construed to waive or diminish any right or
security of the Lender under said notes and mortgage. It is the purpose
and intent hereof to provide safeguards, protections and rights for the
Lender in addition to those provided in said Notes and mortgage and to
better secure said Lender by reason of said construction loan.
11. The Borrower shall furnish the Lender at Borrowers' expense a title
insurance policy showing marketable and insurable fee simple title free
and clean of all exceptions whatsoever except said mortgage and current
taxes not yet due and payable. The Borrower shall also furnish the
Lender at Borrower's expense a current print or prints of survey
showing no encroachments or overlaps.
Page 8 of 11
12. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their heirs, legal representatives, successors
and assigns. The Borrower shall be released from obligations and
agreements hereunder only by written instrument of the Lender
specifically provided for in such release.
13. This Construction Loan Agreement shall be governed and construed under
the laws of the State of Florida.
14. If this Construction Loan Agreement is executed by more than one person
then all singular nouns, pronouns and verbs herein shall be construed
as plural nouns, pronouns or verbs; it being the intent and purpose
hereof that this form shall conform to the circumstances as fully as if
each change from singular to plural were set forth in writing herein.
15. Upon improvement of the property and sale of the individual lots,
Borrower will be entitled to partial releases from the lien of the
mortgage, provided that the mortgage is in good standing and free from
default, upon the payment to the Lender of the following amounts:
---SEE EXHIBIT "B" ATTACHED HERETO AND MADE A PART HEREOF---
16. IT IS FURTHER RECOGNIZED THAT THE BORROWER MAY REQUESTED LENDER TO
ISSUE A STAND-BY LETTER/S OF CREDIT GUARANTEEING A BENEFICIARY THAT
FUNDS WILL BE AVAILABLE TO COMPLETE CERTAIN WORK OBLIGATIONS REQUIRED
TO BE PERFORMED BY THE BORROWER, THE STAND-BY LETTER/S OF CREDIT IS
SECURED BY THE MORTGAGE.
17. ONCE THE LOAN SECURED BY THE MORTGAGE, IS PAID OFF PURSUANT TO THE
TERMS OF PAYMENT OF THE NOTES AND THE RELEASE PROVISION HEREINABOVE
DESCRIBED, THE BORROWER FURTHER AGREES TO CONTINUE PAYING LENDER THE
RELEASE PRICE STIPULATED HEREIN, AND LENDER AGREES TO SET ASIDE SAID
FUNDS IN AN INTEREST-BEARING SAVINGS ACCOUNT UNTIL SUCH TIME AS SAID
ACCOUNT HAS REACHED THE OUTSTANDING BALANCE OF THE STAND-BY LETTER/S OF
CREDIT ISSUED BY LENDER IN FAVOR OF THE BENEFICIARY. THE FUNDS
DEPOSITED INTO SAID INTEREST BEARING SAVINGS ACCOUNT WILL SERVE AS
COLLATERAL FOR THE STAND-BY LETTER/S OF CREDIT. AS THE OBLIGATIONS OF
THE STAND-BY LETTER/S OF CREDIT ARE REDUCED, THE BORROWER MAY WITHDRAW
FUNDS FROM SAID ACCOUNT; PROVIDED THAT THE REMAINING BALANCE OF THE
INTEREST BEARING ACCOUNT IS NOT LESS THAN THE OUTSTANDING BALANCE OF
THE STAND-BY LETTER/S OF CREDIT.
18. The Borrower hereby agrees that it will not obtain any secondary
financing on the mortgaged property which secures the loan from the
Lender to Borrower, or otherwise encumber said property without the
prior written consent of Lender.
Page 9 of 11
19. AN INTEREST RESERVE IN THE AMOUNT OF $400,000.00 HAS BEEN ESTABLISHED
FOR THIS TRANSACTION. THIS SUM IS TO BE ALLOCATED TO THE INTEREST
PAYMENTS DUE UNDER THE LOAN AND SHALL BE DISBURSED ONCE A MONTH AS PER
INVOICES OF THE LENDER. ONCE THIS RESERVE IS DEPLETED, ANY EXCESS OF
INTEREST PAYMENTS DUE UNDER THE LOAN SHALL BE PAID OUT OF THE
BORROWER'S OWN FUNDS TO LENDER WHEN DUE. IN THE EVENT THAT ACTUAL
CONSTRUCTION HAS NOT TAKEN PLACE WITHIN SIX MONTHS AFTER CLOSING OF
THIS LOAN, THE INTEREST RESERVE FUNDS WILL BECOME FROZEN UNTIL A NEW
APPROVAL IS OBTAINED FROM THE LENDER.
20. LENDER AND THE BORROWER SPECIFICALLY AGREE THAT THEY WAIVE ALL RIGHTS
TO RELY ON OR ENFORCE ANY ORAL STATEMENTS MADE PRIOR TO OR SUBSEQUENT
TO THE SIGNING OF THIS DOCUMENT.
21. LENDER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTELLIGENTLY
WAIVE THE RIGHT EITHER MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH THIS DOCUMENT, AND/OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONJUNCTION HEREWITH, AND/OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY MADE
BEFORE, DURING, OR AFTER THE EXECUTION OF THIS DOCUMENT. THIS WAIVER
APPLIES IN THE EVENT ANY OTHER PARTIES INSTITUTE, JOIN, OR DEFEND ANY
LITIGATION. THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER
EXTENDING CREDIT TO BORROWER. IT IS EXPRESSLY AGREED THAT NO PARTY OR
ENTITY HAS REPRESENTED THAT THIS WAIVER WILL NOT BE ENFORCED.
22. VENUE AND JURISDICTION SHALL BE IN PALM BEACH COUNTY, FLORIDA, FOR ANY
AFFIRMATIVE OR DEFENSIVE LEGAL PROCEEDING IN CONNECTION WITH THIS
DOCUMENT AND/OR ANY OTHER DOCUMENT SIGNED BY THE BORROWER IN FAVOR OF
LENDER.
IN WITNESS WHEREOF, the parties have executed this instrument under
their respective seals the day and year first above written.
Signed, sealed, and delivered BORROWER:
in the presence of:
ORIOLE HOMES CORP., a Florida
corporation.
By:
------------------------------------ -------------------------------
XXXX X. XXXX, PRESIDENT
Attest:
------------------------------------ ----------------------------
X. X. XXXX, SECRETARY
Page 10 of 11
LENDER:
OCEAN BANK, a state banking
corporation 000 XX 00xx
Xxxxxx Xxxxx, XX 00000
By:
------------------------------------ -------------------------------
Attest:
------------------------------------ ----------------------------
STATE OF FLORIDA }
} ss:
COUNTY OF MIAMI-DADE }
THE FOREGOING instrument was acknowledged before me this _____ day of
____________________________, 2001, by XXXX X. XXXX AND X. X. XXXX, as President
and Secretary, respectively, of ORIOLE HOMES CORP., a Florida corporation, on
behalf of the corporation. They have produced Florida drivers' licenses as
identification.
----------------------------------
ENI X. XXXXXXX
NOTARY PUBLIC, STATE OF FLORIDA
My Commission Expires:
STATE OF FLORIDA }
} ss:
COUNTY OF MIAMI-DADE }
THE FOREGOING instrument was acknowledged before me this _____ day of
____________________________, 2001, by _____________________________________ and
________________________________, as ____ Vice President and
___________________________, respectively of OCEAN BANK, a state banking
corporation, on behalf of the corporation. They are personally known to me.
----------------------------------
ENI X. XXXXXXX
NOTARY PUBLIC, STATE OF FLORIDA
My Commission Expires:
Page 11 of 11
