Construction Loan Agreement
Exhibit 10.16.5
CONSTRUCTION LOAN AGREEMENT
DATE: April 25, 2001.
LENDER: Compass Bank
X.X. Xxx 00000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Commercial Real Estate Department
BORROWER: Xxxxxxx Properties Residential, L.P.
Type of entity: Georgia limited partnership
Address: 0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
GUARANTORS: Those Guarantors as may be specified in the Commitment Letter.
PROJECT: 250 unit Apartment Project, located in Gwinnett County,
Georgia on the real property described on Exhibit A hereto
LOAN AMOUNT: $17,000,000
COMMITMENT
LETTER: Commitment Letter from Lender to Borrower dated April 4, 2001.
A copy of the Commitment Letter is attached as Exhibit C
hereto and made a part hereof.
Construction Loan Agreement
WHEREAS, Lender has agreed to make the Loan to Borrower in accordance with the
terms and conditions set forth in the Commitment Letter.
NOW THEREFOR, in consideration of premises, the mutual promises hereinafter
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties, intending to be legally bound
hereby, agree as follows:
1. Commitment Letter. The Loan shall be made, secured, guaranteed and disbursed
in accordance with the terms and conditions of the Commitment Letter, which
shall survive the closing of the Loan except to the extent modified in the Loan
Documents. Defined terms shall have the meanings given to them in the Commitment
Letter unless otherwise expressly set forth herein.
2. Construction. Borrower shall construct and complete the Project as set forth
in the Commitment Letter.
3. Conditions for Final Disbursement. In addition to the conditions contained in
the Commitment Letter, prior to and as a condition precedent to Lender's
obligation to make the final disbursement under the Loan, each of the following
conditions shall have been and continue to be fully satisfied:
(a) Final Certificates. Borrower shall have exhibited or
caused to be exhibited to Lender the final certificate of
approval of the various governmental authorities having
jurisdiction, including without limitation, a
certificate of occupancy, any necessary construction
certificates, and certificates of the full payment and
discharge of all costs, expenses, contract payments and
charges relating to construction; and
(b) Substantial Completion. Lender shall have received
certification from Lender's inspector of the substantial
completion of the Project.
4. Additional Requirements Regarding Disbursements. Lender may require five (5)
business days' notice in writing from Borrower prior to a disbursement under the
Loan. Unless otherwise agreed by Borrower and Lender, all disbursements are to
be made at the office of Lender or at such other place as Lender shall designate
and are to be credited to a construction account with Lender and disbursements
made therefrom upon written request of Borrower and satisfaction of all other
conditions precedent thereto.
5. Certain Disbursements. Prior to the satisfaction of the conditions set forth
herein and in the Commitment Letter, Lender may at its sole option, but shall
have no obligation to, disburse such sums as Lender may elect, including without
limitation amounts owed for expenses to Lender by Borrower.
6. Representations and Warranties of Borrower. In order to induce Lender to
enter into this Agreement and to make the Loan for which provision is made
herein, the Borrower represents and warrants to Lender that:
(a) Borrower's Organization and Authority. The Borrower, if not an
individual, is a legal entity of the type set forth at the top
of page 1 hereof, duly organized, validly existing and in good
standing in its state of organization and is qualified or
registered, as required by law, and in good standing in all
jurisdictions where qualification or registration is
necessary. The Borrower and any Guarantor have all requisite
corporate, partnership, association, trust, or other power and
authority, and have taken or caused to be taken all necessary
corporate, partnership, association, trust, or other action
(including any necessary shareholder, partner, member or
beneficiary action) necessary to execute, deliver, enter into
and perform in accordance with the Loan Documents. Upon
execution and delivery hereof and thereof, the Loan Documents
will constitute valid and binding obligations of the Borrower,
any Guarantor, and the other parties thereto, enforceable in
accordance with their respective terms, and the Note will be
entitled to the benefits of this Agreement, the Commitment and
the other Loan Documents.
(b) Adverse Change. There has been no material adverse change in
the business, properties, or condition (financial or
otherwise) of Borrower, any Guarantor or any of the Collateral
since the date of the last financial statements furnished to
Lender.
(c) Litigation. Except for any litigation or claims specifically
described on Exhibit B hereto, there is no action, suit or
proceeding at law or in equity or by or before any
governmental instrumentality or other agency now pending, or,
to the knowledge of the Borrower threatened or in prospect
against or affecting the Borrower, any Guarantor, or any
properties or rights of the Borrower or any Guarantor which,
if adversely determined, would materially or adversely affect
the business, properties, or financial condition of the
Borrower, any Guarantor or any of the Collateral. Borrower is
not currently affected by any strike or other labor
disturbance, nor is the Borrower or any Guarantor in default
in any respect under any judgment, order, injunction, rule,
ruling or regulation of any court or governmental commission,
agency or instrumentality.
(d) No Violations. Neither the execution nor delivery of this
Agreement, nor any of the other Loan Documents, nor the
consummation of the transactions contemplated hereby and
thereby, nor compliance with the terms and provisions hereof
and thereof, will conflict with, violate or result in a breach
of or default under, or result in the creation or imposition
of any
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lien, charge or encumbrance of any nature whatsoever on any of
the assets of the Borrower or any Guarantor, pursuant to the
terms of any provision of any contract or agreement, charter,
bylaw, partnership agreement, trust indenture, or other
corporate, partnership or trust restriction, any law,
ordinance, rule, order, certificate, license, regulation or
decree of the United States or any state, territory or
political subdivision thereof, or any court, agency or other
tribunal under which the Borrower, any Guarantor or any of
Borrower's or Guarantor's assets are subject. Neither Borrower
nor any Guarantor is in default with respect to the
performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any of the
foregoing which are material to its financial condition.
(e) Payment of Taxes. The Borrower and, if Borrower is a
partnership, each of Borrower's general partners, have filed
or caused to be filed all federal, state and local tax
returns, which are required to be filed, and have paid or
caused to be paid all taxes as shown on said returns or on any
assessment received by them, to the extent that such taxes
have become due, except as otherwise permitted by the
provisions hereof. The Borrower has no reason to believe that
any additional taxes are due for prior calendar tax years that
have not been audited by the respective tax authorities beyond
the amounts provided in the financial statements heretofore
furnished to Lender.
(f) Location of Records. Upon request by Lender, the Borrower
shall give to Lender written notice of each office of the
Borrower at which records of the Borrower pertaining to the
Collateral are kept. Except as such notice is given, all
records of the Borrower pertaining to the Collateral are and
shall be kept at the Borrower's address set forth in this
Agreement.
(g) Permits; Governmental and Other Approvals. Borrower
possesses such licenses and permits as are required for the
conduct of its business. No approval, consent or authorization
of any governmental authority which has not heretofore been
obtained is necessary for the execution or delivery by
Borrower of this Agreement or the other Loan Documents or for
the performance by Borrower of any of the terms or conditions
hereof or thereof.
(h) Properties. The Borrower has good and marketable title
to all the Borrower's properties and assets; and all such
properties and assets are free and clear of Liens, except as
disclosed in the financial statements referred to in Section
6(b) and as otherwise permitted or required by the provisions
of this Agreement and the other Loan Documents.
(i) Consents, Registrations, Approvals, etc. No registration with
or consent or approval of, or other action by any Governmental
Authority is required for the execution, delivery and
performance of any Loan Document to which it is a party.
(j) Solvency. The Borrower is and will remain Solvent, taking into
account the consummation of the transactions provided in the
Loan Documents.
(k) Project. (a) The construction of the Project in accordance
with the Plans, and the use of the Property for the purposes
referenced herein will not violate any restrictive covenant,
any applicable governmental building law (herein "Building
Law"), or other governmental law, ordinance or regulation
applicable thereto; (b) the Property has convenient and
adequate access to all electric, gas, water, storm sewer,
sanitary sewer, telephone, cable television and other utility
services necessary for the construction of the Project and the
intended use of the Property, such utilities are available to
the Borrower in sufficient quantities to accommodate the
construction and intended use of the Property and to comply
with all Building Laws, and with all other applicable
governmental laws, rules, ordinances and codes (herein
"Governmental Requirements"), and the Borrower has all
easements, grants, permits, approvals and other rights
necessary to tie into and use such utilities; (c) the Property
has access to existing public roads and highways (including
all necessary rights and governmental approvals for related
ingress and egress) that is adequate for the intended use of
the Property; (d) when the Project is completed in accordance
with the Plans, the Property will have paved, off-street
parking adequate to comply with all building laws and other
governmental requirements applicable thereto; (e) when the
Project is completed in accordance with the Plans, the
Property will comply with all applicable Building Laws and
Governmental Requirements and will qualify for a certificate
of occupancy (or local equivalent) for all space in each
building on the Property); (f) the Plans are satisfactory to
the Borrower, comply with all applicable Governmental
Requirements, and have been approved by any required
Governmental Authorities and by all other persons whose
approval is required; (g) the Borrower has obtained all
material certificates, licenses, authorizations,
registrations, permits and other approvals of Governmental
Authorities and other persons necessary for the operation of
the Property, the conduct of the Borrower's business at the
Project, and the construction of the Project, including all
such certificates, licenses, authorizations, registrations,
permits and approvals required under applicable Building Laws;
(h) the present and contemplated use and occupancy of the
Property do not conflict with or violate any of the same; (i)
no portion of the Property is located within a special flood
hazard area; and (j) none of the improvements including in the
Project will create an encroachment over, across or onto any
boundary lines, rights-of-way, or easements, and no building
or improvement on any adjoining property encroaches onto the
Property.
(l) Information Regarding Loans; Purpose. All of the
information contained in the request for the Loans is true and
correct in all material respects and all statements,
representations and warranties contained therein and in any
other Loan Document signed in connection herewith are true and
correct in all material respects. The proceeds of the Loan
will be used solely for business or commercial purposes, and
none of such proceeds will be used for personal, family,
household or agricultural purposes.
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(m) Changes in Management. The Borrower shall not permit any
change in the management of the Property without the prior
written consent of the Lender.
(n) Changes in Construction Documents. The Borrower shall not make
any changes in any of the construction contracts for the
Project, except as expressly permitted by the Loan Documents.
(o) Participation. The Borrower understands that the Lender may
from time to time enter into a participation agreement or
agreements with one or more participants pursuant to which
each such participant shall be given a participation in the
Loan and that any such participant may from time to time
similarly grant to one or more sub-participants
sub-participations in the Loan. The Borrower agrees that, to
the extent provided under the participation agreements, any
participant or sub-participant may exercise any and all rights
of banker's lien or set-off with respect to Borrower, as fully
as if such participant or sub-participant had made a Loan
directly to the Borrower in the amount of the participation or
sub-participation given to such participant or sub-participant
in the Loan. For the purposes of this Section 6(o) only, the
Borrower shall be deemed to be directly obligated to each
participant or sub-participant in the amount of its
participating interest in the amount of the Loan and any other
indebtedness arising under the Loan and the Loan documents.
Nothing contained in this Section 6(o) shall affect the
Lender's right of set-off (under Section 10 or applicable law)
with respect to the entire amount of the indebtedness
evidenced and/or secured by the Loan Documents,
notwithstanding any such participation or sub-participation.
The Lender may divulge to any participant or sub-participant
all information, reports, financial statements, certificates
and documents obtained by it from the Borrower or any other
person under any provision of this Agreement or otherwise.
7. Operating Account. Borrower shall establish and maintain a depository account
at Lender during the life of the Loan.
8. Events of Default. The occurrence of any of the following events, and, except
with respect to (i) payment defaults, (ii) defaults under ss.ss.8(a), (b), (c),
(h), (l) and (x), or (iii) where a different time is specified, the continuance
of such event for thirty (30) days or more after written notice thereof from
Lender to Borrower (or in the event said default cannot be cured within 30 days,
said period may be extended for up to an additional 60 days provided Borrower is
diligently attempting to cure same), shall constitute an Event of Default
hereunder ("Event of Default")
(a) If Borrower fails to make any payment of the principal
of or interest (together with premium thereon, if any) on the
Note when the same becomes due and payable and such failure is
not cured within (3) days after receipt of written notice
thereof;
(b) If the Deed to Secure Debt and the other Loan Documents
shall not provide Lender with a first priority security title
to and security interest in and to the Project and other real
and personal property covered thereby, satisfactory to Lender
and its counsel;
(c) If without the prior written consent of Lender, the Project or
the other collateral or any part thereof or any interest of
the Borrower therein, is sold, transferred, conveyed or
encumbered in any way, except for leases approved by Lender;
provided, that if the Project is a residential apartment
complex, Borrower may lease units in the Project so long as
such leases are executed in the ordinary course of business of
operating a residential apartment complex and are on a form
approved by Lender; provided further, Borrower shall have the
right, without Lender's prior consent but with written notice
to Lender, to transfer the Project to Xxxxxxx Realty
Investors, Inc.
(d) If the improvements on the Project shall encroach upon any
street or upon adjoining property;
(e) If in Lender's sole reasonable judgment, the Project cannot be
completed by the date for completion set forth in the
Commitment Letter;
(f) If the improvements on the Project are damaged or
destroyed by fire or otherwise to an extent such that the
Project cannot be completed on or before the date for
completion set forth in the Commitment Letter, or that there
are insufficient funds remaining in the construction budget to
complete the Project, taking into account any insurance
proceeds received because of the damage and any additional
funds provided by Borrower;
(g) If Borrower shall fail to comply with any of the
covenants, terms or conditions contained herein, in the
Commitment Letter, in the Note, or in any of the other Loan
Documents, giving consideration to any grace or cure period
specifically provided therefor;
(h) The filing by the Borrower or any Guarantor of a voluntary
petition in bankruptcy or the Borrower's adjudication as a
bankrupt or insolvent, or the filing by the Borrower or any
Guarantor of any petition or answer seeking or acquiescing in
any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under
any present or future federal, state or other statute, law or
regulation relating to bankruptcy, insolvency or other relief
for debtors, or the Borrower's or any Guarantor's seeking or
consenting to or acquiescence in the appointment of any
trustee, receiver or liquidator of the Borrower or any
Guarantor or of all or any substantial part of the Project or
of any or all of the
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rents, revenues, issues, earnings, profits or income thereof,
or the making of any general assignment for the benefit of
creditors or the admission in writing of its inability to pay
its debts generally as they become due; or
(i) The entry by a court of competent jurisdiction of any order,
judgment, or decree approving a petition filed against the
Borrower or any Guarantor seeking any reorganization,
arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future
federal, state or other statute, law or regulation relating to
bankruptcy, insolvency, or other relief for debtors, which
order, judgment or decree remains unvacated and unstayed for
an aggregate of sixty (60) days (whether or not consecutive)
from the date of entry thereof, or the appointment of any
trustee, receiver or liquidator of the Borrower or any
Guarantor or of all or any substantial part of the Project or
of any or all of the rents, revenues, issues, earnings,
profits or income thereof without the consent or acquiescence
of the Borrower or any Guarantor which appointment shall
remain unvacated and unstayed for an aggregate of sixty (60)
days (whether or not consecutive); or
(j) To the full extent not prohibited by applicable law, if
a final non-appealable judgment by a court of competent
jurisdiction is entered against Borrower or any Guarantor,
which judgment is material to Borrower's financial condition
or ability to pay the Loan;
(k) If Borrower does not construct the Project in material
accordance with the plans and specifications approved by
Lender (the "Plans"), except as the Plans may be changed by
mutual written consent of Borrower and Lender, or by change
orders not requiring the Lender's consent hereunder. For
purposes of the foregoing, Lender's consent shall not be
required for change orders in the individual amount of $50,000
or less, and provided that the aggregate amount of all change
orders does not exceed $250,000.
(l) If Borrower does not permit Lender, or representatives
of Lender, to enter upon the Project to inspect the Project at
all reasonable times and examine all detailed plans, shop
drawings, and specifications which are kept at the Project, or
if Borrower fails to furnish to Lender, when requested, copies
of such plans, drawings and specifications;
(m) If the construction of the Project is not commenced
within thirty (30) days from closing of the Loan, or is not
carried on with reasonable dispatch and completed within
eighteen (18) months of the date of closing of the Loan;
(n) If Borrower executes any security agreement, except to
Lender, covering any materials, fixtures or articles used in
the construction of the Project or covering articles of
personal property placed in the Project as a fixture;
(o) If Borrower fails to comply with any requirement of any
governmental authority having jurisdiction within thirty (30)
days after receipt of notice in writing of such requirement
shall have been given to Borrower or within the time specified
in such notice, whichever is greater;
(p) If Borrower fails to notify Lender of the filing of any
lien against the Project within ten (10) business days after
Borrower receives notice of such lien;
(q) If any representation or warranty made herein or in any of the
other Loan Documents shall prove to be false or misleading in
any material respect;
(r) If any report, certificate, financial statement or
other instrument furnished in connection with the Loan
Documents or the borrowing hereunder shall prove to be false
or misleading in any material respect;
(s) If Borrower or any other Person fails to observe or
perform any other covenant, condition or agreement under the
Loan Documents within any applicable cure period, or if there
shall occur a default or an Event of Default under the Loan
Documents;
(t) If Borrower is a partnership, if any of the general
partners of Borrower shall cease to be such partners, or any
action shall be taken or if there shall be any occurrence
which could or does have the effect of terminating,
dissolving, liquidating, or winding-up the business of any
such general partner;
(u) If any action whatsoever shall be taken, or if there
shall be any occurrence which could or does have the effect
of, terminating, dissolving, liquidating or winding-up the
business of the Borrower or any Guarantor;
(v) If any lease relating to the Project is modified,
amended, or terminated without Lender's prior written consent,
and as otherwise permitted herein or in the Loan Documents, or
if there shall occur any default under any such lease which is
not cured within the time specifically provided therefor;
provided, that if the Project is a residential apartment
complex, this paragraph shall not apply to leases modified,
amended or terminated in the ordinary course of business of
operating a residential apartment complex, or to defaults
under such leases;
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(w) At the option of Lender, on the dissolution or
liquidation of any corporate Guarantor, or upon the death or
legal incapacity of any individual Borrower or Guarantor, or
if the Borrower or any Guarantor is a partnership, the death
or legal incapacity of any general partner of the Borrower or
such Guarantor.
(x) Any default by Borrower under any agreement between Borrower
and Lender or any affiliate of Lender, now existing or
hereafter entered into with respect to the Loan, which
provides for an interest rate or commodity swap, cap, floor,
collar, forward foreign exchange transaction, currency swap,
cross-currency rate swap, currency option, or any combination
of, or option with respect to, these or similar transactions,
for the purpose of hedging Borrower's exposure to fluctuations
in interest rates, currency calculations or commodity prices
(collectively the "Swap Agreement"), which default is not
cured within the cure period, if any, set forth in such
agreement.
9. Remedies. Upon the occurrence of any one or more of the above-listed Events
of Default, then, or at any time thereafter, Lender may, without notice to the
Borrower or any other Person, declare the unpaid principal of and interest and
other charges on the Loan immediately due and payable, together with any other
Liabilities (hereinafter defined) of the Borrower to Lender, and such amounts
thereupon shall become immediately due and payable, without presentment, demand,
protest, notice of protest or notice of any kind, all of which are hereby
expressly waived by Borrower, and if all such amounts are not immediately paid
in full, Lender may exercise all rights given to it under the laws of the State
of Georgia and any other state and under this Agreement and the other Loan
Documents, including without limitation, foreclosure of the Deed to Secure Debt
and/or the filing of actions in law or in equity. Upon the occurrence of any one
or more of the above-listed Events of Default, all obligations on the part of
Lender to make loans and advances hereunder shall, if Lender so elects, cease
and terminate; provided, however, that Lender may, in its sole discretion, make
additional advances without becoming liable to make any other advances,
notwithstanding anything to the contrary contained or implied herein, in the
Commitment Letter or in any other Loan Document.
10. Setoff. Lender is hereby given a continuing lien as additional security for
the Note and all other Liabilities and indebtedness of Borrower to Lender (as
defined herein and in the Deed to Secure Debt or in any other Loan Document)
upon any and all moneys, securities, and other property of Borrower, and the
proceeds thereof, now or hereafter held or received by or in transit to the
Lender from or for Borrower, whether for safekeeping, custody, pledge,
transmission, collection, or otherwise, and also upon any and all deposit
balances (general or special) and credits of Borrower with, and any and all
claims of Borrower against the Lender at any time existing, and upon the
occurrence of any Event of Default hereunder, the Lender may apply or set off
the same against the Indebtedness and Liabilities (as defined herein or in the
Deed to Secure Debt or other Loan Documents) secured by the Deed to Secure Debt
and other Loan Documents.
11. Borrower Defined; Successors and Assigns. The term "Borrower", wherever used
herein, shall mean the Borrower described on the first page of this Agreement,
whether one or more, and its or their respective successors, assigns, executors
and administrators, and all of the covenants, conditions, and agreements hereof
shall bind the successors, assigns, executors and administrators of Borrower and
shall inure to the benefit of and be available to the successors and assigns of
Lender.
12. Person and Liabilities Defined. The term "Person" shall include natural
persons, corporations (which shall be deemed to include business trusts),
associations, partnerships and all such similar entities. Except as otherwise
may be defined with respect to a particular Loan Document, the term
"Liabilities" shall mean all indebtedness, liabilities and obligations of
Borrower to Lender, whether joint or several, matured or unmatured, liquidated
or unliquidated, direct or indirect, primary or secondary, absolute or
contingent, now existing or hereafter arising and whether arising by contract,
operation of law or otherwise, and all extensions, modifications, amendments,
consolidations, renewals and replacements thereof, and whether incurred or given
as maker, endorser, guarantor, surety or otherwise, including without
limitation, the Loan and the indebtedness evidenced by the Note or any
extension, modification, amendment, consolidation, renewal or replacement
thereof or therefor.
13. Delay; No Waiver. No delay or failure of Lender to exercise any option or
right herein given or reserved shall constitute a waiver of such option or right
or estop Lender thereafter to exercise the same or any other option or right at
any time, and Lender's payment or contracting to pay anything Borrower has
herein agreed to pay shall not constitute a waiver of the default of Borrower in
failing to make any such payment. A waiver by Lender of any option or right
herein given or reserved on any one occasion shall not be deemed a waiver of
said option or right on any future occasion. Lender may in its discretion extend
the time of payment of the principal evidenced and secured by the Note and other
Loan Documents and any extension so granted shall be deemed to be made in
pursuance of this Agreement and not in modification thereof.
14. No Partnership or Joint Venture. Notwithstanding anything to the contrary
herein contained or implied, Lender, by this Agreement, or by any action
pursuant thereto or hereto, shall not be deemed a partner, joint venturer or
participant in the venture with Borrower, and Borrower hereby indemnifies and
agrees to defend and hold Lender harmless (including the payment of reasonable
attorneys' fees) from any and all damages resulting from such a construction of
the parties' relationship. The requirements herein, and the restrictions imposed
in this Agreement and the other Loan Documents, are for the sole protection and
benefit of Lender.
15. Assignments. Lender may assign this Loan or any parts hereof, including the
participation of all or any part of this Loan to one or more financial
institutions of its choice. Borrower shall not assign or delegate this Agreement
or any of its rights or duties hereunder without the prior written consent of
Lender. In the event of such assignment by Borrower with Lender's consent,
Borrower shall execute, or cause the execution of, all documents necessary or
appropriate to continue the full force and effect of the Note and other Loan
Documents.
16. Modifications; Waiver. Neither this Agreement nor any provision hereof may
be changed, modified, amended, waived, discharged, abandoned or terminated
except by an instrument in writing signed by the party against whom enforcement
of the change, modification,
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amendment, waiver, discharge, abandonment or termination is sought. In the event
that Lender shall waive in writing any provision or requirement hereunder, such
waiver shall be effective only for the specific purposes, circumstances and
duration stated in said waiver.
17. Remedies Cumulative. No right or remedy conferred upon Lender in this
Agreement is intended to be exclusive of any other right or remedy contained in
the Note, this Agreement, or any other Loan Document, and every such right or
remedy shall be cumulative and in addition to every other right or remedy
contained herein or therein or now or hereafter available to the Lender at law,
in equity, by statute or otherwise.
18. Invalid Provisions; No Conflict. If any of the provisions of this Agreement
or the other Loan Documents or the application thereof to any Person or
circumstances, shall, to any extent, be invalid or unenforceable, the remainder
of said documents and instruments, or the application of such provision or
provisions to Persons or circumstances other than those as to whom or which it
is held invalid or unenforceable, shall not be affected thereby, and every
provision of this Agreement and the other Loan Documents shall be valid and
enforceable to the fullest extent permitted by law. No provision of this
Agreement or the other Loan Documents shall be deemed in conflict with any other
provision hereof or thereof, and the Borrower acknowledges that no such
provision or any interpretation thereof shall be deemed to diminish the rights
of the Lender, any assignee, or the holder of the Note under the terms and
conditions or any other provisions hereof or thereof. Lender may at its option
exhaust its remedies hereunder, under the Note, and under the other Loan
Documents, either concurrently or independently, and in such order as it may
determine.
19. Indemnification. Borrower shall and does hereby indemnify and hold harmless
Lender from and against any and all claims, charges, losses, expenses and costs,
including without limitation reasonable attorneys' fees, resulting from any
claims, actions or proceedings in connection with the execution, delivery and
performance of this Agreement or the other Loan Documents, except for claims,
charges, losses, expenses and costs resulting directly from the Lender's willful
misconduct or gross negligence. The indemnification provided in this section
shall survive the payment in full of the Loan.
20. Headings; Under Seal; Entire Agreement. Article and section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement or be used to construe any provision hereof
or for any other purpose. This Agreement is intended to be under the seal of all
parties hereto and to have the effect of a sealed instrument in accordance with
the law. This Agreement, together with Commitment Letter and the other Loan
Documents, embodies the entire agreement and understanding between the parties,
supersedes all prior agreements and understandings related to the subject matter
hereof and thereof, and may not be amended except by written agreement between
Borrower and Lender.
21. No Third Party Beneficiaries. There are no third party beneficiaries to this
Agreement or to any of the other Loan Documents. All conditions to Lender's
obligations to make disbursements under this Agreement and the other Loan
Documents are imposed solely and exclusively for the benefit of Lender. Neither
Borrower nor any other Person shall have standing to require satisfaction of any
such condition or be entitled to assume that Lender will refuse to make
disbursements in the absence of strict compliance with any or all such
conditions, and neither Borrower nor any other Person shall, under any
circumstances, be deemed to be a beneficiary of any conditions hereof, any or
all of which conditions may be waived freely, in whole or in part by Lender at
any time if, in its sole discretion, Lender deems it advisable so to do. Lender
makes no representations or warranties and assumes no obligation or
responsibility with respect to the quality of the construction of the
improvements or any part of the Project. This Agreement and the other Loan
Documents shall not benefit, and may not be relied upon by, any Person other
than the Borrower and the Lender.
22. Notices. Any notice shall be deemed conclusively to have been received by a
party hereto and be effective on the earlier of the day on which delivered to
such party at the address set forth on page 1 hereof (or at any other address as
such party shall specify to the other party in writing) or on the third business
day after the date deposited in the U.S. mails, addressed to such party at said
address.
23. Governing Law; Place of Execution. This Agreement and the other Loan
Documents, and the rights and obligations of the parties hereunder and
thereunder shall be governed by and be construed in accordance with the laws of
the State of Georgia. Borrower acknowledges that the negotiation of the
provisions of this Agreement and the other Loan Documents took place in the
State of Georgia, that all such documents are being executed in the State of
Georgia, or if executed elsewhere, will become effective only upon Lender's
receipt and acceptance thereof in said State; provided, however, that Lender
shall have no obligation to give, nor shall Borrower or any other Person be
entitled to receive, any notice of such receipt and acceptance in order for said
Loan Documents to become effective and valid and binding obligations of the
Borrower. Borrower acknowledges further that all of such documents were or will
be executed and delivered to Lender to induce Lender to make the Loan to
Borrower. Borrower hereby submits itself to jurisdiction in the State of Georgia
for any action or cause of action arising out of or in connection with the Loan
or the Loan Documents, agrees that venue for any such action shall be in Xxxxxx
County, Georgia, and waives any and all rights under the laws of any state to
object to jurisdiction or venue within Xxxxxx County, Georgia. Notwithstanding
the foregoing, nothing contained in this section shall prevent Lender from
bringing any action or exercising any rights against Borrower, any Guarantor,
any security for the Loan, or any of Borrower's properties in any other county,
state or jurisdiction. Initiating such action or proceeding or taking any such
action in any other state shall in no event constitute a waiver by Lender of any
of the foregoing.
24. Inspections; Lender's Benefit Only. Lender shall have the right, and
Borrower shall allow Lender and any of its authorized representatives and
construction consultants, if any shall be employed, at all times after 24 hours
prior notice to inspect the Project and all Collateral, and the status of
construction, and to review all architectural and construction drawings and
other documents. The Borrower also shall permit Lender and any of its authorized
representatives to examine, inspect and make extracts from books and records of
the Borrower, and Borrower will discuss with Lender or its representatives the
affairs, finances and accounts of the Borrower, all at such reasonable times and
as often as may be reasonably requested by Lender. Any inspections and reports
made by, for or on behalf of Lender, including without
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limitation, any inspections made by Lender or by its Construction Consultant, or
any approvals of inspection reports made by Lender or its Construction
Consultant pursuant to (i) the provisions hereof, (ii) Section 9 and 10 of
Addendum A to the Commitment Letter, or (iii) any other provisions of the Loan
Documents giving Lender a right of inspection of the Project, shall be solely
for the benefit of Lender, and neither Borrower nor any third party shall be
beneficiaries of the same, or shall be entitled to claim any loss or damage as a
result of such inspections, approvals, disapprovals or the failure of Lender to
make the same. Borrower acknowledges that Lender is not acting in a fiduciary
capacity for Borrower in any respect relative to the Loan, including without
limitation, in the making of any such inspections or in reviewing or approving
any such inspection reports.
25. Financial Statements, Reports, etc. The Borrower shall furnish to the
Lender:
(a) Not later than 90 days after the end of each
semi-annual fiscal period, financial statements (including a
balance sheet and the related statements of income, cash flows
and retained earnings) of the Borrower prepared in accordance
with generally accepted accounting principles (or other
comprehensive basis of accounting acceptable to the Lender)
for such period and for the period beginning on the first day
of the fiscal year and ending on the last day of such period,
together with statements in comparative form for the
corresponding periods in the preceding fiscal year, and
certified by an authorized representative of the Borrower.
(b) Not later than 120 days after the end of each fiscal year,
financial statements (including a balance sheet and the
related statements of income, cash flows and retained
earnings) of the Borrower prepared in accordance with
generally accepted accounting principles (or other
comprehensive basis of accounting acceptable to the Lender)
for such fiscal year, together with statements in comparative
form for the preceding fiscal year, and accompanied by an
opinion of certified public accountants acceptable to the
Lender, which opinion shall state in effect that (1) such
financial statements (A) were audited using generally accepted
auditing standards, (B) were prepared in accordance with
generally accepted accounting principles (or other
comprehensive basis of accounting acceptable to the Lender,
applied on a consistent basis, and (C) present fairly the
financial condition and results of operations of the Borrower
for the periods covered and (2) except as disclosed in such
opinion, in making the examination necessary for such opinion,
such accountants have obtained no knowledge of (A) the
existence of any event of default under any Loan Document or
under any instrument evidencing or securing any other
indebtedness or liability, contingent or noncontingent, of the
Borrower and (B) the occurrence of any event which, with
notice or lapse of time or both, would constitute an Event of
Default under any of the Loan Documents or under any
instrument evidencing or securing any other indebtedness or
contingent liability of the Borrower.
(c) Together with the financial statements required by subsections
(a) and (b) above, a certificate of an authorized
representative of the Borrower stating that, except as
disclosed in such certificate, (1) no event of default exists
under any of the Loan Documents or under any instrument
evidencing or securing any other indebtedness or contingent
liability of the Borrower, and (2) no event has occurred and
is continuing which, with notice or lapse of time or both,
would constitute an event of default under any of the Loan
Documents or under any instrument evidencing or securing any
other indebtedness or contingent liability of the Borrower. If
any such event of default exists or any such event has
occurred and is continuing, such certificate shall contain a
description of the nature and extent thereof.
(d) Within ten (10) days after request therefor from
Lender, a rent schedule of the Project, certified by the
Borrower, showing the name of each tenant, and for each
tenant, the space occupied, the lease expiration date and the
rent paid.
(e) Not later than 120 days after the end of each fiscal
year, financial statements (including a balance sheet and the
related statements of income, cash flows and retained
earnings) of each Guarantor prepared in accordance with
generally accepted accounting principles (or other
comprehensive basis of accounting acceptable to Lender) for
such fiscal year, together with statements in comparative form
for the preceding fiscal year, and certified by the respective
Guarantor.
(f) Such other information regarding the property or the
financial condition or operations of the Borrower, the
Guarantors, or the Project as the Lender shall reasonably
request, including, without limitation, copies of Federal
income tax statements of the Borrower and/or the Guarantors.
The guaranties of the Guarantors may contain an acknowledgment
of their obligations to furnish the financial reports, records
and statements described therein.
26. Performance Covenant. Beginning April 25, 2003, the Guarantor shall be
subject to a minimum annual Debt Service Coverage ("DSC") of 1.20x. Within 90
days after the end of each fiscal year, Guarantor shall submit a compliance
statement showing the DSC calculation, based upon unqualified audited results.
For purposes of this provision, DSC shall be equal to "Net Operating Income"
divided by "Annual Debt Service". "Net Operating Income" shall be equal to
annual operating revenues less annual operating expenses. "Annual Debt Service"
shall be equal to annual interest and principal payments paid during the year,
but shall exclude any balloon payment required to be made on any loan during the
year.
27. Transfer and Assumption. Notwithstanding anything to the contrary in this
Agreement or in any of the other Loan Documents, Borrower shall have the right
to transfer the Project subject to the Loan to Xxxxxxx Realty Investors, Inc.
without consent but with prior written notice to the Lender, without payment of
a transfer fee. Additionally, Borrower shall have a one-time only right to sell,
transfer and convey the Project to a party other than Xxxxxxx Realty Investors,
Inc., subject to the Loan, provided that all of the following conditions
8
have been satisfied: (i) at the time the transfer is proposed there shall be no
Event of Default hereunder or under any of the Loan Documents, (ii) Borrower
shall obtain prior written approval by Lender of the terms of the sale and the
financial condition and management experience of the transferee, which approval
may be withheld in Lender's sole discretion, (iii) Borrower shall pay to Lender,
at the closing of the transfer and assumption, a transfer fee equal to 1% of the
then outstanding principal balance of the Note, and (iv) any such transfer shall
require the written assumption by the transferee, in form satisfactory to
Lender, of all of Borrower's obligations and liabilities under the Loan
Documents and the Swap Agreement, and the provision of a substitute Guarantor
satisfactory to Lender in its sole discretion. Lender reserves the right, upon
review of the proposed transfer and the financial and management experience of
the transferee, to modify the Loan in any respect including, without limitation,
changing the interest rate or term of the Loan and modifying the Swap Agreement,
based on Lender's underwriting criteria in effect at the time of the transfer.
IN WITNESS WHEREOF, Lender and Borrower have caused this Agreement to be duly
and properly executed as of the date first set forth above.
LENDER:
WITNESS: COMPASS BANK
/s/ Xxxxxx X. Xxxxx By:/s/ Xxxx X. Xxxxx
----------------------- --------------------------------------
Xxxx X. Xxxxx, Senior Vice President
BORROWER (Mortgagor, Debtor):
WITNESS: XXXXXXX PROPERTIES RESIDENTIAL, L.P.,
a Georgia limited partnership
/s/ Xxxxx Xxxxx By: XXXXXXX REALTY INVESTORS, INC.,
----------------------- a Georgia corporation,
its general partner
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
[CORPORATE SEAL]
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