HomeMy WebLinkAboutContract 47646 CITY SECRETARY
CONTRACT NO.
CONSTRUCTION LOAN AGREEMENT
FWS REALTY, LTD.
LEASE SITE NW1
13401 WING WAY DRIVE
THIS CONSTRUCTION LOAN AGRE MI ENT (hereinafter referred to as the
"Agreement") is made and entered into as of , 2016, by and between
FWS REALTY, LTD., a Texas limited partnership ("B rrower"), whose address for notice
hereunder is 3825 Camp Bowie Boulevard, Fort Worth, Texas 76107, and the CITY OF FORT
WORTH (hereinafter referred to as "City" or "Lender"), a home rule municipal corporation
organized under the laws of the State of Texas and acting by and through FERNANDO
COSTA, its duly authorized Assistant City Manager, whose address for notice hereunder is
Aviation Department, 3951 Lincoln Avenue, Fort Worth, Texas 76106-2749, in respect of a loan
in the principal sum of NINE HUNDRED THOUSAND AND NO/100 DOLLARS
($900,000.00).
RECITALS
WHEREAS, according to a 2005 economic impact analysis of Fort Worth Spinks
Airport ("Spinks"), general aviation activity in the State of Texas results in thousands of jobs
and billions of dollars in economic activity; and
WHEREAS, Texas airports serve as the base of operation for diverse business groups
and the gateway to industrial areas; and
WHEREAS, the Texas tourism industry relies upon general and commercial aviation to
transport visitors to and around the state; and
WHEREAS, growth of its general aviation airports is important to the continued
economic growth and vitality of the City of Fort Worth; and
WHEREAS, Spinks is adjacent to Interstate Highway 35W and convenient to both
tourist attractions and lodging and industrial and business areas; and
WHEREAS, according to the 2005 economic impact analysis of Spinks, the direct and
indirect financial impact of Spinks is approximately $9.3 million annually; and
WHEREAS, over the last five years, the number of aircraft based at Spinks Airport has
increased approximately twenty-five percent and the number of transient aircraft has increased
approximately thirty percent; and
WHEREAS, continued development of Spinks will lead to increased economic benefits
for the City of Fort Worth; and
OFFICIAL RECORD
CITY SECRETARY
FT.WORTH,TX
WHEREAS, as recommended by the City's 2010 Comprehensive Plan, adopted by the
City Council pursuant to Ordinance No. 19044-02-2010, and in accordance with Resolution No.
3716-03-2009, the City has established an economic development Program pursuant to which the
City will, on a case-by-case basis, offer economic development incentives authorized by Chapter
380 of the Texas Local Government Code that include monetary loans and grants of public
money, as well as the provision of personnel and services of the City, to businesses and entities
that the City determines will promote state or local economic development and stimulate
business and commercial activity in the City in return for verifiable commitments from such
businesses or entities to cause specific employment and other public benefits to be made or
invested in the City, as particularly determined by the City (the "380 Program"); and
WHEREAS, in 2012, the City made a 380 Program loan to Borrower for the purpose of
constructing a 14,000 square foot hangar at Spinks; and
WHEREAS, Borrower has completed the 14,000 square foot hangar and has complied
and is continuing to comply with the requirements of the 2012 380 Program Loan; and
WHEREAS, City and Borrower have agreed that the construction of additional hangar
space at Spinks will result in increased local economic activity; and
WHEREAS, as part of the 380 Program, the City wishes to make an additional loan of
certain public funds to Borrower for construction of certain additional Improvements (as defined
herein) at Spinks, as more specifically set forth in this Agreement, in return for the economic
benefits that will accrue to the City as a result of the Improvements and the increased economic
strength that the Improvements will provide to Spinks; and
WHEREAS, this Agreement is authorized by Chapter 380 of the Texas Local
Government Code;
NOW, THEREFORE, the City and Borrower, for and in consideration of the terms and
conditions set forth herein, do hereby contract, covenant and agree as follows:
AGREEMENT
ARTICLE 1
DEFINITIONS
For purposes of this Agreement,the following terms shall have the meanings indicated:
1.1 "Advance" means a disbursement by Lender of any of the proceeds of the Loan
and/or the Borrower's Deposit.
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1.2 "Affidavit of Borrower" means a sworn affidavit of Borrower, and such other
parties as Lender may require, in form and substance satisfactory to Lender to the effect that all
statements, invoices, bills, and other expenses incident to the construction of the Improvements
incurred to a specified date, whether or not specified in the Approved Budget, have been paid in
full, except for (i) amounts retained pursuant to any Construction Contract, and (ii) items to be
paid from the proceeds of an Advance then being requested or in another manner satisfactory to
Lender.
1.3 "Application for Advance" means a written application by Borrower, on a form
approved by Lender, and such other parties as Lender may require, to Lender specifying by
name, current address, and amount with respect to all parties to whom Borrower is obligated for
labor, materials, or services supplied for the construction of the Improvements and all other
expenses incident to the Loan, the Property, and the construction of the Improvements, whether
or not specified in the Approved Budget, requesting an Advance for the payment of such items,
containing, if requested by Lender, an Affidavit of Borrower, accompanied by such schedules,
affidavits, releases, waivers, statements, invoices, bills, and other documents as Lender may
reasonably request.
1.4 "Approved Budget" means a budget or cost itemization prepared by Borrower
and approved by Lender in writing, specifying the cost by item of (i) all labor, materials, and
services necessary for the construction of the Improvements in accordance with the Plans and all
Governmental Requirements, and (ii) all other expenses anticipated by Borrower incident to the
Loan, the Property, and the construction of Improvements.
1.5 "Architect" means the architect retained by Borrower for preparation of the
Plans.
1.6 "Borrower" means all parties named Borrower in the first paragraph of this
Agreement.
1.7 "Borrower's Deposit" means such cash sums as Lender may deem necessary,
from time to time until all obligations under the Loan Documents have been satisfied, in addition
to the Loan, for the payment of the costs of labor, materials, and services required for the
construction of the Improvements, interest owing or to become owing on the Loan from time to
time, other costs and expenses specified in the Approved Budget, other costs and expenses
required to be paid in connection with the construction of the Improvements in accordance with
the Plans and any Governmental Requirements, and any other costs and expenses arising in
connection with the leasing, operation, development and/or construction of the Property.
1.8 "Construction Contracts" means any and all contracts, written or oral, between
Borrower and the general contractor, between Borrower and any other original contractor,
between any of the foregoing and any subcontractor, and between any of the foregoing and any
other person or entity relating in any way to the construction of the Improvements, including the
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FWS Realty,Ltd. Pagc 3 of 26
performing of labor or the furnishing of standard or specially-fabricated materials in connection
therewith.
1.9 "Debtor Relief Laws" means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization, or similar laws affecting the
rights or remedies of creditors generally, as in effect from time to time.
1.10 Intentionally Deleted.
1.11 "Event of Default" means the occurrence of any one of the following:
(a) the failure, refusal or neglect of Borrower to make due and punctual
payment of the Note or of any other secured indebtedness or any portion thereof, as the
same shall become due and payable, whether at maturity or when accelerated pursuant to
any power to accelerate contained in the Note or contained herein and such failure
continues for more than 10 days after written notice thereof shall have been given by
Lender to Borrower; provided, however, Lender is not obligated to provide more than 3
such notices during any 12 month period; or
(b) the failure of Borrower to timely and properly observe, keep or perform any
covenant, agreement, warranty or condition required herein or under any other Loan
Document, as hereinafter defined, to be observed, kept or performed; or
(c) any material representation contained herein or in any other Loan Document
or otherwise made by Borrower or any other person or entity to the Lender in connection
with the Loan is false or misleading at the time such representation is made and Borrower
made such false or misleading representation knowing it to be false or misleading at the
time such representation was made; or
(d) Borrower becomes insolvent, or makes a transfer in fraud of creditors, or
makes an assignment for the benefit of creditors, or admits in writing its inability to pay
its debts as they become due; or
(e) Borrower is generally not paying its debts as such debts become due; or
(f) a receiver, trustee or custodian is appointed for, or takes possession of, all or
substantially all of the assets of Borrower or any of the Property, either in a proceeding
brought by Borrower or in a proceeding brought against Borrower and such appointment
is not discharged or such possession is not terminated within 60 days after the effective
date thereof or Borrower consents to or acquiesces in such appointment or possession; or
(g) Borrower files a petition for relief under the United States Bankruptcy Code
or any other present or future federal or state insolvency, bankruptcy or similar law (all of
the foregoing hereinafter collectively called "applicable Bankruptcy Law") or an
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involuntary petition for relief is filed against Borrower under any applicable Bankruptcy
Law and such involuntary petition is not dismissed within 60 days after the filing thereof,
or an order for relief naming Borrower is entered under any applicable Bankruptcy Law,
or any composition, rearrangement, extension, reorganization or other relief of debtors
now or hereafter existing is requested or consented to by Borrower; or
(h) the Property or any part thereof is taken on execution or other process of law
in any action against Borrower; or
(i) Borrower fails to have discharged within a period of 30 days any
attachment, sequestration or similar writ levied upon any property of Borrower; or
0) Borrower fails to pay within 30 days any final money judgment against
Borrower; or
(k) Borrower abandons all or a portion of the Property for a period of 30
consecutive calendar days; or
(1) the holder of any lien or security interest on the Property (without hereby
implying the consent of the Lender to the existence or creation of any such lien or
security interest) declares a default thereunder or institutes foreclosure or other
proceedings for the enforcement of its remedies thereunder; or
(m) without the prior written consent of the Lender, Borrower leases, assigns,
transfers, conveys or otherwise disposes of all or any part of the Property or any interest
therein, it being understood that the consent of Lender required hereunder may be refused
by Lender in its sole discretion or may be predicated upon any terms, conditions and
covenants deemed advisable or necessary, in the sole discretion of Lender, including but
not limited to the right to change the interest rate, date of maturity or payments of
principal and/or interest on the Note, to require payment of any amount as additional
consideration as a transfer fee or otherwise and to require assumption of the Note and the
Deed of Trust; or
(n) Borrower dissolves, liquidates, merges or consolidates or any interest in
Borrower is sold, assigned, transferred, mortgaged, pledged, encumbered or otherwise
disposed of, voluntarily or involuntarily, without the prior written consent of the Lender.
1.12 "Financial Statements" means such balance sheets, profit and loss statements,
reconciliations of capital and surplus, changes in financial condition, schedules of sources and
applications of funds, operating statements with respect to the Property, and other financial
information of Borrower as shall be required by Lender, from time to time, which statements, if
required by Lender, shall be certified by an independent certified public accountant.
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1.13 "Financing Statements" means the Form UCC-1 financing statements securing
the Loan, to be filed with the appropriate offices for the perfection of a security interest in any of
the Property.
1.14 Intentionally Deleted.
1.15 "Governmental Authority" means any and all courts, boards, agencies,
commissions, offices or authorities of any nature whatsoever for any governmental unit, federal,
state, county, district, municipal, city or otherwise, whether now or hereinafter in existence
exercising jurisdiction over Borrower or the Property.
1.16 "Governmental Requirements" means all applicable restrictive covenants,
applicable health and environmental laws and regulations, zoning ordinances, building codes and
all other applicable laws, statutes, ordinances, rules, regulations, orders and decrees of any
Governmental Authority applicable to Borrower or the Property, including, but not limited to the
Americans with Disabilities Act of 1990 (all of the foregoing hereinafter sometimes collectively
called "Applicable Laws").
1.17 "Ground Lease" means that certain Ground Lease Agreement for Lease Site
NW1, entered into by and between Lender and Borrower on , 2016 concerning the
Property and Improvements.
1.18 Intentionally Deleted.
1.19 "Improvements" means any and all buildings, structures, and other facilities now
existing on the Property or constructed thereon subsequent to the date hereof.
1.20 "Land" means the real estate located in the City of Fort Worth, Tarrant County,
Texas, as more particularly described in Exhibit "A" attached hereto and made a part hereof, all
fixtures or other Improvements situated thereon, and all of Borrower's rights, titles and interests
appurtenant thereto.
1.21 "Lender" means the Lender named in the first paragraph of this Agreement.
1.22 "Leases" means any and all leases, subleases, licenses, concessions or other
agreements, written or oral, now or hereafter in effect, which grant a possessory interest in and
to, or the right to use, the Property (hereinafter defined) together with all security and other
deposits made in connection therewith and all other agreements, such as engineer's contracts,
architect's contracts, utility contracts, maintenance agreements and service contracts, which in
any way relate to the design, use, occupancy, operation, maintenance, enjoyment or ownership of
the Property; save and except the Ground Lease.
1.23 "Legal Requirements" means Borrower's Limited Partnership agreement.
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1.24 "Loan" means the non-recourse loan by Lender to Borrower, in the amount set
forth in the first paragraph of this Agreement not to exceed, in the aggregate, the costs of labor,
materials, and services supplied for the construction of the Improvements, specified in the
Approved Budget, and all other expenses incident to the construction of the Property, all as
specified in the Approved Budget.
1.25 "Loan Documents" means this Agreement, the Note, the Ground Lease, and any
and all other documents now or hereafter executed by Borrower to evidence or secure the
payment of the Loan or performance of the Obligations.
1.26 Intentionally Deleted.
1.27 "Note" means the non-recourse Advance Promissory Note of even date herewith
from Borrower payable to Lender in the amount of and evidencing the Loan.
1.28 "Obligations" means any and all of the covenants, warranties, representations and
other obligations (other than to repay the Loan) made or undertaken by Borrower to Lender as
set forth in the Loan Documents or the Ground Lease.
1.29 "Plans" means the final plans and specifications for the development and
construction of the Improvements, to be prepared by the Architect, and all amendments and
modifications thereof, a true and correct original counterpart of all of which shall be delivered to
Lender.
1.30 "Property" means the Land, Improvements, Ground Lease, and Leases, and all
other property, whether real, personal or mixed, on which a lien or security interest is placed or
granted to secure the repayment of the Loan.
ARTICLE 2
BORROWER'S WARRANTIES AND REPRESENTATIONS
Borrower hereby unconditionally warrants and represents unto Lender, based upon
Borrower's actual knowledge, as follows:
2.1 Financial Statements. The Financial Statements heretofore furnished by
Borrower to Lender are true and correct in all material respects, are complete as of the dates
specified therein, have been prepared in accordance with generally accepted accounting
principles for the cash method of accounting consistently applied and fully and accurately
present the financial condition of the subject thereof. No material adverse change has occurred
in the financial condition reflected therein since the dates of such Financial Statements.
2.2 Litigation. There are no actions, suits or proceedings pending, or to the
knowledge of Borrower threatened, against or affecting Borrower or the Property. No event has
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occurred, including specifically Borrower's execution of the Loan Documents and its
consummation of the Loan represented thereby, which will violate, be in conflict with, result in
the breach of or constitute, with due notice or lapse of time, or both, a default under any Legal
Requirement or result in the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever on the Property other than the security interests created by or referred to in the
Loan Documents.
2.3 Compliance with Local Requirements. Borrower has or will have prior to
commencement of construction of the Improvements:
(a) received all requisite building permits and approvals to the Plans, and
(b) in general, complied with all Governmental Requirements required to be met
prior to commencement of development or construction of the Improvements in
accordance with the Plans.
2.4 Validity of Loan Documents. All action on Borrower's part requisite for the due
authorization, creation, issuance, execution and delivery of the Loan Documents has been duly
and effectively taken, and each such document constitutes a legal and binding obligation of, and
is valid and enforceable against, Borrower in accordance with the terms thereof, except as
limited by the Debtor Relief Laws. No basis presently exists for any claims against Lender
under the Loan Documents and enforcement of the Loan Documents is subject to no defenses.
ARTICLE 3
BORROWER'S COVENANTS AND ASSIGNMENTS
OF CONSTRUCTION CONTRACTS AND PLANS
Borrower hereby unconditionally covenants with Lender as follows:
3.1 Construction of Improvements. The development and construction of the
Improvements will be commenced and completed by Borrower in accordance with the terms of
the Ground Lease, will be prosecuted by Borrower with diligence and continuity to completion,
and will be completed by Borrower in a good and workmanlike manner in substantial accordance
with the Plans and the other provisions of this Agreement, free and clear from all liens, or claims
for liens. It is expressly understood and agreed that:
(a) development and construction of the Improvements shall not be commenced
unless and until Borrower has furnished the Plans, as approved by all applicable
Governmental Authorities, to Lender and afforded Lender the opportunity to accept
same, which acceptance shall be evidenced, if at all, by Lender's initialing same; and
(b) when the Plans have been furnished to Lender, no changes of a material nature
will be made therein by, or be permitted to be made therein by, Borrower, Architect or
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any other person or entity without the prior written approval therefor of all requisite
Governmental Authorities, prior compliance with all requisite Governmental
Requirements and prior acceptance, if the Lender so elects and the proposed changes are
material in nature, by the Lender; and
(c) in instances where Lender does accept the Plans or any change therein, such
acceptance shall not in any way be deemed to imply any warranty, representation or
approval by Lender that such Improvements, if so developed and constructed, will be
structurally sound or will have a market value of any particular magnitude.
3.2 Affirmative Covenants. At all times and in any reasonable manner during
construction of the Improvements, Borrower will:
(a) permit Lender and its representatives to enter upon the Land and onto the
Improvements, to inspect the same and all materials to be used in the development and
construction thereof and to examine all detailed Plans and shop drawings; and
(b) comply strictly with any and all Governmental Requirements required to be
complied with incidental to such development or construction; and
(c) deliver to Lender or its representatives, immediately upon demand,
counterparts and/or conditional assignments of any and all Construction Contracts, bills
of sale, statements, conveyances, receipted vouchers or agreements of any nature under
which Borrower claims title to any materials or supplies used or to be used in the
development or construction of the Improvements; and
(d) utilize all Advances to it by Lender for, and only for, payment of the costs
itemized in Section 4.2 hereinbelow; and under no circumstances shall Borrower use,
directly or indirectly, any portion of such Advances for any other purpose, including
specifically the defrayment of living expenses or the anticipation of profit to Borrower;
and
(e) obtain, or require to be obtained, and maintain in full force and effect an
owner's and contractor's liability insurance policy or policies (including workman's
compensation insurance for the owner, contractor and subcontractor), all such insurance
policies to be issued by such companies, in such amounts and on such terms as Lender
may approve, and
(f) if Lender shall request, furnish Lender with a current list of original
contractors and subcontractors performing work on the Improvements.
3.3 Negative Covenants. At no time during the term of the Loan shall Borrower:
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(a) use, maintain, operate or occupy, or allow the use, maintenance, operation
or occupancy of, any portion of the Property for any purpose which violates any
Governmental Requirements or Legal Requirements or in any manner which may be
dangerous, unless safeguarded as required by law, or which may constitute a public or
private nuisance, or which may make void, voidable or cancelable or increase the
premium of any insurance then in force with respect thereto; or
(b) create or place, or permit to be created or placed, or through any act or
failure to act, acquiesce in the placing of or allow to remain any mortgage, lien, pledge,
security interest, encumbrance or charge on, or other title retention agreement, whether
statutory, constitutional or contractual, to the Property or any portion thereof; or
(c) except for the subleasing of the Property by Lessee, lease, exchange, assign,
convey, transfer possession of or otherwise dispose of the Property or any portion
thereof, unless approved in writing by Lender, such approval not to be unreasonably
withheld.
3.4 Correction of Defects or Departures. Subject to the terms of the Ground Lease,
Borrower will, upon demand of Lender, correct any structural defect in the Improvements or any
material departure from the Plans not accepted by Lender, it being understood and agreed that
the advance of any Loan proceeds shall not constitute a waiver of Lender's right to require
compliance with this Section 3.4 with respect to any such defects or departures.
3.5 Borrower's Deposit. If, in the good faith judgment of the Lender, it appears at
any time or from time to time that the unadvanced Loan proceeds will be insufficient to complete
the Improvements in accordance with the Plans and this Agreement, Borrower shall immediately
deposit, or shall make arrangements satisfactory to Lender for the deposit of, with Lender the
Borrower's Deposit. The Borrower's Deposit shall be segregated from all of Lender's other
funds and shall be paid out by Lender before making any further advances on the Note.
Borrower shall be entitled to reduce and draw down the amount of the Borrower's Deposit in an
amount equal to any payment or payments made by Borrower for labor, materials and services
included in calculating the initial amount of the Borrower's Deposit, with Lender's prior written
consent, not to be unreasonably withheld.
3.6 Lender's Inspection Rights. Lender, through its officers, agents or employees,
shall have the right at all reasonable times with reasonable notice, at Borrower's expense:
(a) To enter upon the Property and inspect the work of construction to
determine that the same is in conformity with the Plans and all the requirements hereof;
and
(b) To inspect the books, records, accounting data and other documents in
Borrower's possession or control, including, without limitation, all permits, licenses,
consents and approvals of all governmental authorities having jurisdiction over Borrower,
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the Improvements or the Property, and all contractors and subcontractors supplying goods
and/or services in connection with the work of constructing the Improvements at
Borrower's office during normal business hours. Such books, records and documents
shall be made available to Lender at Borrower's office promptly upon reasonable
advance notice to Borrower. All contracts let or amended by Borrower or its contractors
after the date hereof relating to construction of the Improvements shall require agreement
to the foregoing inspection rights, except where such rights have been waived by Lender,
in writing; and
(c) It is expressly understood and agreed that Lender shall have no duty to
supervise or to inspect the work of construction or any books and records and that any
such inspection shall be for the sole purpose of preserving Lender's rights hereunder.
Failure to inspect the work or any part thereof shall not constitute a waiver of any of the
Lender's rights hereunder. Inspection not followed by notice of default shall not
constitute a waiver of any default then existing; nor shall it constitute an
acknowledgement that there has been or will be compliance with the Plans or that the
construction is free from defective materials or workmanship.
3.7 Lender Has No Obligation. Borrower shall be solely responsible for all aspects
of Borrower's business and conduct in connection with the Property and Improvements,
including, but not limited to:
(a) The quality and suitability of the Plans; and
(b) Supervision of the work of construction; and
(c) The qualifications, financial condition and performance of all architects,
engineers, contractors, subcontractors and material suppliers and consultants; and
(d) Conformance of the work of construction and the Improvements to the
requirements of all applicable public and private restrictions and requirements and to the
requirements of this Agreement; and
(e) The quality and suitability of all materials and workmanship; and
(f) The accuracy of all requests for the disbursement of Loan proceeds and the
proper application of disbursed Loan proceeds.
Lender shall have no obligation to supervise, inspect or inform Borrower or any third
party of any aspect of the work of construction of the Improvements or any other matter referred
to above. Any inspection or review made by Lender shall be made for the purpose of
determining whether or not the obligations of Borrower under this Agreement are being properly
discharged, and neither Borrower nor any third party shall be entitled to rely upon any such
inspection or review.
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Lender owes no duty of care to Borrower or any third person to protect against or inform
Borrower or any third person of the existence of negligent, faulty, inadequate or defective design
or construction of the Improvements.
3.8 Assignment of Construction Contracts. As additional security for the payment
of the Loan, Borrower hereby transfers and assigns to Lender all of Borrower's rights and
interests, but not its obligations in, under and to, the Construction Contracts upon the following
terms and conditions:
(a) Borrower represents and warrants that the copy of any Construction
Contract furnished to Lender is a true and complete copy thereof and that Borrower's
interest therein is not subject to any claim, setoff or encumbrance.
(b) Neither this assignment nor any action by Lender shall constitute an
assumption by Lender of any obligations under the Construction Contract, and Borrower
shall continue to be liable for all obligations of Borrower thereunder; Borrower hereby
agrees to perform all of its obligations under the Construction Contract. Borrower agrees
to indemnify and hold Lender harmless against and from any loss, cost, liability or
expense, including, but not limited to, reasonable attorneys' fees, resulting from any
failure of Borrower to so perform.
(c) Lender shall have the right at any time, but shall have no obligation, to take,
in its name or in the name of Borrower, such action as Lender may at any time determine
to be necessary or advisable to cure any default under the Construction Contract or to
protect the rights of Borrower or Lender thereunder. Lender shall incur no liability if any
action so taken by it or in its behalf shall prove to be inadequate or invalid, and Borrower
agrees to hold Lender free and harmless against and from any loss, cost, liability or
expense, including, but not limited to, attorneys' fees, incurred in connection with any
such action.
(d) Borrower hereby irrevocably constitutes and appoints Lender as Borrower's
attorney-in-fact, in Borrower's name or in Lender's name, to enforce all rights of
Borrower under the Construction Contracts.
(e) Prior to any Event of Default, Borrower shall have the right to exercise its
rights as owner under the Construction Contracts, provided that Borrower shall not cancel
or amend the Construction Contracts or do, or suffer to be done, any act which would
impair the security constituted by this assignment without the prior written consent of
Lender.
(f) This assignment shall inure to the benefit of Lender, its successors and
assigns, any receiver in possession of the Property and any corporation formed by or on
behalf of Lender which assumes Lender's rights and obligations under this Agreement.
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3.9 Assignment of Plans. As additional security for the payment of the Loan,
Borrower hereby transfers and assigns to Lender all of the Borrower's right, title and interest in
and to the Plans and hereby represents and warrants to and agrees with Lender as follows:
(a) The schedule of the Plans delivered to Lender is a complete and accurate
description of the Plans.
(b) The Plans are complete and adequate for the construction of the
Improvements, and there have been no modifications thereof except as described in such
schedule. The Plans shall not be modified without the prior written consent of Lender,
except for non-structural changes which do not change the cost of construction by more
than 0.2 percent to any one change or 0.5 percent in the aggregate.
(c) Lender may use the Plans for any purpose relating to the Improvements,
including, but not limited to, inspections of construction and the completion of the
Improvements.
(d) Lender's acceptance of this assignment shall not constitute approval of the
Plans by Lender. Lender has no liability or obligation whatsoever in connection with the
Plans and no responsibility for the adequacy thereof or for the construction of the
Improvements contemplated by the Plans. Lender has no duty to inspect the
Improvements, and if Lender should inspect the Improvements, Lender shall have no
liability or obligation to Borrower arising out of such inspection. No such inspection, nor
any failure by Lender to make objections after any such inspection, shall constitute a
representation by Lender that the Improvements are in accordance with the Plans or
constitute a waiver of Lender's right thereafter to insist that the Improvements be
constructed in accordance with the Plans.
(e) This assignment shall inure to the benefit of Lender, its successors and
assigns, including any purchaser upon foreclosure of the Property, any receiver in
possession of the Property and any corporation formed by or on behalf of Lender which
assumes Lender's rights and obligations under this Agreement.
3.10 Environmental. Borrower will not cause or permit the Property or Borrower to
be in violation of, or do anything or permit anything to be done which will subject the Property
to any remedial obligations under any applicable federal or state environmental laws, including
without limitation CERCLA, RCRA, the Texas Water Code and the Texas Solid Waste Disposal
Act, assuming disclosure to the applicable Governmental Authorities of all relevant facts,
conditions and circumstances, if any, pertaining to the Property and Borrower, and Borrower will
promptly notify Lender in writing of any existing, pending or, to the best knowledge of
Borrower, threatened investigation or inquiry by any governmental authority in connection with
any applicable environmental laws. Borrower shall obtain any permits, licenses or similar
authorizations to construct, occupy, operate or use any buildings, improvements, fixtures and
Construction Loan Agreement
FWS Realty,Ltd. Page 13 of 26
equipment forming a part of the Property by reason of any applicable environmental laws.
Borrower shall take all steps necessary to determine that no hazardous substances or solid waste
are being disposed of or otherwise released on or to the Property. Borrower will not cause or
permit the disposal or other release of any hazardous substance or solid waste on or to the
Property and covenants and agrees to keep or cause the Property to be kept free of any hazardous
substance or solid waste and to remediate any violation of any applicable federal, state or local
environmental regulations or standards, including, if required, removal of any hazardous
substance or solid waste, or if removal is prohibited by law, to take whatever action is required
by law, promptly upon discovery of such violation at its sole expense. Upon Lender's
reasonable request, not more than once every 12 calendar months unless Lender has reasonable
cause to request more than once, Borrower will provide at Borrower's sole expense an inspection
or audit of the Property from an engineering or consulting firm approved by Lender indicating
the presence or absence of hazardous substances and solid wastes on the Property. If Borrower
fails to order same after 10 days' notice, Lender may order same, and Borrower grants to Lender
and its agents, employees, contractors and consultants access to the Property and a license, which
is coupled with an interest and irrevocable, to perform inspections and tests. The cost of such
inspections and tests shall be a demand obligation owing by Borrower to Lender and shall be
subject to and covered by the provisions of Section 5.1 hereof.
3.11 Intentionally Deleted.
3.12 Indemnification Regarding Environmental Matters. Borrower agrees to
indemnify, defend, and hold Lender (for purposes of this paragraph, the term "Lender" shall
include the directors, officers, partners, council members, employees and agents of Lender)
harmless from and against, and to reimburse Lender with respect to, any and all claims,
demands, losses, damages, including consequential damages, liabilities, causes of action,
judgments, penalties, costs and expenses, including attorney's fees and court costs) of any and
every kind or character, known or unknown, fixed or contingent, imposed on, asserted against or
incurred by Lender and Trustee at any time and from time to time by reason of, in connection
with or arising out of:
(a) the breach of any representation or warranty of Borrower as set forth herein
regarding asbestos, material containing asbestos or applicable environmental laws; or
(b) the failure of Borrower to perform any obligation herein required to be
performed by Borrower regarding asbestos, material containing asbestos or applicable
environmental laws; or
(c) any violation on or before the Release Date (as hereinafter defined) and after
the effective date of this Agreement of any applicable environmental law in effect on or
before the Release Date; or
(d) the removal by or on behalf of Borrower of hazardous substances or solid
wastes from the Property, or if removal is prohibited by law, the taking of whatever
Construction Loan Agreement
FWS Realty,Ltd. Page 14 of 26
action is required by law; or
(e) the removal by or on behalf of Borrower of asbestos or material containing
asbestos from the Property, or if removal is prohibited by law, the taking of whatever
action is required by law including without limitation the implementation of any required
operation and maintenance program; or
(f) any act, omission, event or circumstance existing or occurring on or prior to
the Release Date and after the effective date of this Agreement (including without
limitation the presence on the Property or release from the Property of hazardous
substances or solid wastes disposed of or otherwise released on or prior to the Release
Date and after the effective date of this Agreement), resulting from or in connection with
the ownership, construction, occupancy, operation, use and/or maintenance of the
Property by Borrower, regardless of whether the act, omission, event or circumstance
constituted a violation of any applicable environmental law at the time of its existence or
occurrence; or
(g) any and all claims or proceeds, whether brought by private party or
governmental agency, for bodily injury, property damage, abatement or remediation,
environmental damage or impairment or any other injury or damage resulting from or
relating to any hazardous substance or solid waste located upon or migrating into, from or
through the Property after the effective date of this Agreement whether or not any or all
of the foregoing was caused by Borrower or its tenant or subtenant, or any third party and
whether or not the alleged liability is attributable to the handling, storage, generation,
transportation or disposal of such substance or waste or the mere presence of such
substance or waste on the Property.
Without limitation, the foregoing indemnities shall apply to each indemnified party with
respect to claims, demands, losses, damages, including consequential damages, liabilities, causes
of action, judgments, penalties, costs and expenses, including attorney's fees and court costs,
which in part are caused by or arise out of the negligence of such and/or any other indemnified
party. However, such indemnities shall not apply to any indemnified party to the extent the
subject of the indemnification is caused by or arises out of the gross negligence or willful
misconduct of such indemnified party or the negligence of such indemnified party, if such
negligence is the sole cause of the subject of such indemnification. The environmental
indemnifications provided herein do not apply to any claims, demands, losses, damages,
including consequential damages, liabilities, causes of action, judgments, penalties, costs and
expenses, including attorney's fees and court costs, which result from any disposal or other
release of a hazardous substance preexisting or present on the Premises as of the date of
execution of this Agreement. The "Release Date" as used herein shall mean the date on which
the indebtedness and obligations secured hereby have been paid and performed in full; provided,
if such payment or performance is challenged, in bankruptcy proceedings or otherwise, the
Release Date shall be deemed not to have occurred until such challenge is rejected, dismissed or
withdrawn with prejudice. The foregoing indemnities shall not terminate upon the Release Date
Construction Loan Agreement
FWS Realty,Ltd. Page 15 of 26
but will survive the Release Date. Any amount to be paid hereunder by Borrower to Lender shall
be a demand obligation owing by Borrower to Lender and shall be subject to and covered by the
provisions of Section 5.1 hereof. Nothing in this paragraph or in any other document evidencing,
securing or relating to the indebtedness secured hereby shall limit or impair any rights or
remedies of Lender against Borrower or any third party under applicable environmental laws,
including without limitation any rights of contribution or indemnification available thereunder.
3.13. Employment. Borrower agrees to use commercially reasonable efforts at all
times following issuance of a final certificate of occupancy for any Improvements to cause 4
Full-time Jobs to be provided on the Land (the "Employment Goal"). Borrower agrees to supply
Lender with a written report at least once each year during the term of the Note, both at a time
and in a form reasonably acceptable to the City, that sets forth the number of Full-time jobs
provided on the Land. For purposes of this Agreement, "Full-time Job" means a job held by one
individual for at least 40 hours per week. If the Employment Goal is not met in any given year,
Borrower shall state the reasons Borrower believes the goal was not met and what steps
Borrower intends to take in good faith so that the Employment Goal may be met in the following
year. Notwithstanding anything to the contrary herein, failure to attain the Employment Goal
itself in any given year shall not constitute an Event of Default under this or any other Loan
Document.
ARTICLE 4
LENDER'S COMMITMENT
4.1 Loan. Subject to the terms, provisions and conditions of this Agreement, Lender
will make and Borrower will accept, in installments, a Loan in the aggregate amount of the
principal sum of the Note, it being understood that interest as called for in the Note shall be
calculated only on sums actually advanced and only from the dates of such Advances. The Note
will be non-recourse as to personal liability of Borrower.
4.2 Advances. Advances shall be made to Borrower on the principal amount of the
Note at the times and otherwise in accordance with the Approved Budget. The Loan Advances
shall be disbursed, at Lender's option, by Lender's check drawn upon Lender's disbursement
account and delivered to Borrower, or by depositing the amount of the disbursement to
Borrower's account in a bank approved by Lender, by direct or joint check payment to any and
all persons entitled to payment for work performed on or materials delivered to, or services
performed in connection with the construction of the Improvements or the Loan, or by any other
method the Lender shall from time to time elect. Notwithstanding the Approved Budget, the
Advance as to which Borrower shall be entitled at any one time shall not exceed the cost of the
materials, supplies and equipment purchased for the Improvements and stored on the Land, in a
manner acceptable to Lender, plus the cost of all materials, supplies, equipment and labor
actually incorporated into the Improvements, plus any other costs and fees which have been
approved for payment by Lender and which are then due or will become due within 30 days
thereafter, minus the sum of all prior Advances. Under no circumstances shall any portion of
Construction Loan Agreement
FWS Realty,Ltd. Page 16 of 26
any Advance be used for any purpose other than the payment of those costs and fees as Lender
shall have approved as legitimately relating to the purchase price of the Land, the cost of
development or construction of the Improvements and the payment of the Loan. For each
Advance made to Borrower hereunder, and unless the Approved Budget provides otherwise,
Lender shall retain a sum equal to ten percent (10%) thereof, or a greater percentage, if required
by any Governmental Requirement, so that until a period of 30 days after completion of the
Improvements, or such longer period, if required by any Governmental Requirement or if, during
such longer period, a lien or claim could lawfully be filed against the Property by anyone
performing work or services or furnishing materials or goods during the development or
construction of the Improvements, Lender shall have in its possession a fund equal to ten percent
(10%) of the total cost or value of the Improvements.
4.3 First Advance. Lender shall not be obligated to make the first Advance to
Borrower unless and until:
(a) Plans, Construction Contracts, Architect's Certificate, Survey and Insurance
Policies: Lender has received copies of:
(i) the Plans and all Construction Contracts executed to date;
(ii) a certificate from the Architect that the Plans have been approved by
him or them and that the Construction Contracts are acceptable to him or them
and satisfactorily provide for the development and construction of the
Improvements;
(iii) all authorizations and permits which are presently procurable and
required by any Legal Requirement for the development and construction and
proposed use of the Improvements; and
(iv) the policies or certificates of insurance required by the Loan
Documents, accompanied by evidence of the payment of the premiums therefor.
(b) Loan Documents: The Loan Documents have been duly authorized and
executed in accordance with applicable Legal Requirements and original counterparts
thereof delivered to Lender, all prior to the commencement of development and
construction of the Improvements, the placing of any materials or supplies on the Land,
the making of any Construction Contract, written or oral, for any of the same or the
performance of any other act which could give rise to a lien claim equal or superior to the
rights created by the Loan Documents.
(c) Payment of Fees and Costs: Borrower pays to Lender, or any other person
or party entitled thereto, all fees and costs then due and payable with reference to this
Agreement and the subject hereof.
Construction Loan Agreement
FWS Realty,Ltd. Page 17 of 26
4.4 Subsequent Advances. Subject to the proviso contained in Section 4.3(a)
hereinabove, Lender shall not be obligated to make any subsequent Advance to Borrower unless
and until:
(a) Application for Advance: Borrower and Architect shall have executed, or
caused to be executed, and delivered to Lender an Application for Advance.
(b) Architect's Certificate, Lien Waivers, Releases, and Certificates: Lender
shall have received
(i) certification from the Architect that, in his opinion, the development and
construction of the Improvements therefore performed have been in substantial
accordance with the Plans,
(ii) at the request of Lender, lien waivers or releases from all contractors,
subcontractors, laborers and materialmen employed or furnishing materials in
connection with the development and construction of the Improvements, and
(iii) such other certifications or evidence of cost and completion as Lender
may reasonably request.
(c) Borrower's Deposit: Borrower shall have satisfied, if then applicable, the
provisions of Section 3.5 hereinabove.
4.5 Any Advance. Notwithstanding anything to the contrary contained in or
inferable from any of the above, Lender shall not be required to make any Advance hereunder if,
at the time of the requested advance:
(a) Default: Any Event of Default exists hereunder.
(b) Advances Exceed Amount of Note: The requested Advance plus the sum of
the previous Advances or other sums disbursed by Lender under the Loan Documents
exceed the face amount of the Note.
(c) Failure to Complete Improvements: In the good faith judgment of the
Lender, the Improvements will not be completed in substantial accordance with the Plans
and the other provisions of this Agreement and the Ground Lease, regardless of the cause
of such failure so to complete.
(d) Available Funds Insufficient to Complete: In the good faith judgment of
Lender, the sum of the unadvanced Loan proceeds plus other sums being held by Lender
in escrow for Borrower are insufficient to complete the Improvements in substantial
accordance with the Plans and this Agreement, unless and until the provisions of Section
3.5 hereinabove are satisfied.
Construction Loan Agreement
FWS Realty,Ltd. Page 18 of 26
(e) Destruction of Property: The Property or any portion thereof is demolished
or substantially destroyed.
(f) Conditions of Sections 4.2, 4.3 or 4.4: Borrower is unable to satisfy any of
the conditions set forth in Sections 4.2, 4.3 or 4.4 hereinabove.
4.6 Lender's Standing. All conditions precedent to Lender's obligation to make
advances hereunder are imposed solely and exclusively for Lender's benefit. No person or entity
other than Lender shall have any standing to require satisfaction of such conditions or be entitled
to assume that Lender will refuse to make advances absent strict compliance therewith, and any
or all of such conditions may be freely waived, in whole or in part, by Lender at any time or
times.
ARTICLE 5
REMEDIES
5.1 Rights, Remedies and Recourses. Upon the happening of any Event of Default,
Lender shall have, in addition to any and all other rights, remedies and recourses available to it
under any of the Loan Documents, including specifically the right to declare immediately due
and payable the advanced principal and accrued interest on the Note, the right to
(a) take exclusive possession of the Property,
(b) use any funds of Borrower, including the Borrower's Deposit, if any, and any
sums which may remain un-advanced hereunder, to complete the Improvements,
(c) make such changes in and revisions to the Plans as Lender may deem desirable,
(d) prosecute and defend all actions or proceedings relating to the construction of
the Improvements,
(e) pay, settle or compromise all existing bills and claims which are or may be liens
against the Property or may be necessary or desirable for the completion of the work or
the clearance of title,
(f) execute, in Borrower's name, all applications, certificates and other instruments
which may be required by any Construction Contract,
(g) do any and every act with respect to the development and construction of the
Improvements which Borrower may do in its own behalf, and
Construction Loan Agreement
FWS Realty,Ltd. Page 19 of 26
(h) employ such contractor, subcontractors, agents, attorneys, engineers, architects,
accountants, watchmen and inspectors as Lender may deem desirable to accomplish any
of the above purposes.
For this purpose, upon any uncured Event of Default, Borrower hereby constitutes and
appoints Lender its true and lawful attorney-in-fact with full power of substitution to take any
and all of the above described action, which power of attorney shall be deemed to be coupled
with an interest and shall be irrevocable. All sums expended by Lender for any of the above
purposes shall be deemed to be Advances hereunder and shall be secured by the Loan
Documents.
5.2 Termination of Lender's Obligations. Upon the happening of any Event of
Default, all obligations, if any, of Lender hereunder, including specifically any obligation to
advance funds hereunder, shall immediately cease and terminate.
5.3 Acceleration. Notwithstanding anything herein to the contrary contained in or
inferable from any provision hereof, upon the happening of an Event of Default the Loan shall
immediately become due and payable in full without the necessity of any further action on the
part of Lender, and Borrower expressly waives any requirement of notice of intention to
accelerate or notice of such acceleration of the maturity of the Loan.
ARTICLE 6
GENERAL TERMS AND CONDITIONS
6.1 Performance at Borrower's Expense. Any and all reasonable costs and
expenses required to satisfy any provision of this Agreement, including, without limitation,
attorneys', surveyors', accountants', engineers', architects' and inspectors' fees shall be paid by
Borrower. No portion of any such costs or expenses shall be, in any way and to any extent,
credited against any portion of the Loan.
6.2 Further Assistances. All instruments and policies of insurance to be executed
and/or delivered to Lender, and all proceedings to be taken in connection with this Agreement
and the Loan provided for herein, and all persons or parties responsible in any way for the
construction of the Improvements or any obligation to be performed hereunder, shall be subject
to the acceptance of Lender, acting reasonably as to form, substance, coverage and identity.
Immediately upon request of Lender, Borrower will execute, acknowledge and deliver to Lender
such further instruments and do such further acts as Lender may deem necessary to carry out
more effectively the purpose of this Agreement or to subject to the liens and security interests of
the Loan Documents any property intended by the terms thereof to be covered thereby, including
specifically, but without limitation, any renewals, additions, substitutions, replacements,
betterments or appurtenances to the Property.
Construction Loan Agreement
FWS Realty,Ltd. Page 20 of 26
6.3 No Waiver. Any failure by Lender to insist, or any election by Lender not to
insist, upon Borrower's strict performance of any of the terms, provisions or conditions of the
Loan Documents shall not be deemed to be a waiver of same or of any other term, provision or
condition thereof, and Lender shall have the right at any time thereafter to insist upon strict
performance by Borrower of any and all of same. Specifically, no advance by Lender of any
Loan proceeds hereunder, absent Borrower's strict compliance with Article 4 hereinabove, shall
in any way preclude Lender from thereafter declaring such failure to comply to be an Event of
Default hereunder.
6.4 Modification. This Agreement may not be amended, waived, discharged or
terminated orally, but only by an instrument executed by the party against whom enforcement of
the amendment, waiver, discharge or termination is sought.
6.5 Applicable Law and Savings Clause. This Agreement has been executed under,
and shall be construed and enforced in accordance with, the laws of the State of Texas, except as
such laws are preempted by United States federal law. This Agreement and all of the Loan
Documents are intended to be performed in accordance with, and only to the extent permitted by,
all Applicable Laws and Legal Requirements. If any provision hereof or of any of the other
Loan Documents or the application thereof to any person or circumstance shall, for any reason
and to any extent, be invalid or unenforceable, neither the application of such provision to any
other person or circumstance nor the remainder of the instrument in which such provision is
contained shall be affected thereby, but rather, shall be enforced to the greatest extent permitted
by law. It is the express intent of Borrower and Lender to at all times comply with the usury and
other applicable laws now or hereafter governing the interest payable on the Note or the Loan
evidenced thereby. If the applicable law is ever revised, repealed or judicially interpreted so as
to render usurious any amount called for under the Note or under any of the Loan Documents, or
contracted for, charged, taken, reserved or received with respect to the Loan evidenced by the
Note, or if Lender's exercise of the option to accelerate the maturity of the Note, or if any
prepayment by Borrower results in Borrower having paid any interest in excess of that permitted
by law, then it is the express intent of Borrower and Lender that all excess amounts theretofore
collected by Lender be credited on the principal balance of the Note (or, if the Note and all of
such other indebtedness have been paid in full, refunded to Borrower), and the provisions of the
Note and the Loan Documents immediately be deemed reformed and the amounts thereafter
collectable hereunder and thereunder reduced, without the necessity of the execution of any new
document, so as to comply with the then applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder or thereunder. All sums paid, or agreed to be paid,
by the Borrower for the use, forbearance, detention, taking, charging, receiving or reserving on
the indebtedness of Borrower to Lender under the Note or the loan evidenced thereby shall, to
the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout
the full term of such indebtedness until payment in full so that the rate or amount of interest on
account of such indebtedness does not exceed the usury ceiling from time to time in effect and
applicable to the Loan evidenced by the Note for so long as debt is outstanding under the Loan.
To the extent that Lender is relying on Texas law to determine the maximum rate ("Maximum
Rate") payable on the Indebtedness, Lender will utilize the indicated rate ceiling from time to
Construction Loan Agreement
FWS Realty,Ltd. Page 21 of 26
time in effect as provided in the Texas Finance Code Chapter 303. To the extent United States
federal law permits Lender to contract for, charge or receive a greater amount of interest, Lender
will rely on United States federal law instead of such article, for the purpose of determining the
Maximum Rate. Additionally, to the extent permitted by applicable law now in effect, Lender
may, at its option and from time to time, implement any other method of computing the
Maximum Rate under such article, as amended, or under other applicable law by giving notice, if
required, to Borrower as provided by applicable law now or hereafter in effect. In no event shall
the provisions of Texas Finance Code Chapter 346, which regulates certain revolving credit loan
accounts and revolving triparty accounts, apply to the Loan. Notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents, it is not the intention of Lender
to accelerate the maturity of any interest that has not accrued at the time of such acceleration or
to collect unearned interest at the time of such acceleration.
6.6 Rights, Remedies and Recourses Cumulative. All rights, remedies and
recourses afforded Lender in the Loan Documents or otherwise available at law or in equity,
including specifically those granted by the Uniform Commercial Code in effect in Texas,
(a) shall be deemed cumulative and concurrent,
(b) may be pursued separately, successively or concurrently against Borrower, at the sole
discretion of Lender,
(c) may be exercised as often as the occasion therefor shall arise, it being understood by
Borrower that the exercise, failure to exercise or election not to exercise any of the same shall in
no event be construed as a waiver of same or of any other right, remedy or recourse available to
Lender, and
(d) are intended to be, and shall be, non-exclusive.
6.7 Binding Effect. This Agreement shall be binding upon the parties hereto and
their respective heirs, successors, legal representatives and assigns; provided, however, that
Borrower may not assign, transfer or in any way hypothecate its interest in the Loan Documents
or the Property or any portion thereof without Lender's prior written consent.
6.8 Notices. All notices or other communications required or permitted to be given
pursuant to the provisions of this Agreement shall be in writing and shall be considered as
properly given if mailed by first class United States mail, postage prepaid, registered or certified
with return receipt requested, or by delivering same in person to the intended addressee or by
prepaid telegram. Notice so mailed shall be effective upon 3 business days after its deposit.
Notice given in any other manner shall be effective only if and when received by the addressee.
For purposes of notice, the addresses of the parties shall be as set forth in the opening recital of
this Agreement; provided, however, that either party shall have the right to change its address for
notice hereunder to any other location within the continental United States by the giving of 30
days' notice to the other party in the manner set forth hereinabove.
Construction Loan Agreement
FWS Realty,Ltd. Page 22 of 26
6.9 Non-Recourse Nature of Obligations. Borrower shall have no personal liability
to Lender for any of the monetary or non-monetary obligations of Borrower under any of the
Loan Documents. Lender's sole recourse against Borrower shall be the termination of the Lease.
6.10 Intentionally Deleted.
6.11 Lender's Right to Perform the Obligations. If Borrower shall fail, refuse or
neglect to make any payment or perform any act required by the Loan Documents, then Lender,
after the expiration of any applicable notice and grace period, at any time thereafter, without
notice to or demand upon Borrower and without waiving or releasing any other right, remedy or
recourse Lender may have because of same, may make such payment or perform such act for the
account of and at the expense of Borrower, and shall have the right to enter the Land and
Improvements for such purpose and to take all action with respect to the Property as it may deem
desirable. If Lender shall elect to pay any statement, invoice or tax bill, Lender may do so in
reliance on any bill, statement or assessment procured from the appropriate Governmental
Authority or company without inquiring into the accuracy or validity thereof. Similarly, in
making any payments to protect the security intended to be created by the Loan Documents,
Lender shall not be bound to inquire into the validity of any apparent or threatened adverse title,
lien, encumbrance, claim or charge before making an advance for the purpose of preventing or
removing the same. Borrower shall indemnify Lender for all losses, expenses, damage, claims
and causes of action, including reasonable attorneys' fees, incurred or accruing by reason of any
acts performed by Lender pursuant to the provisions of this Section 6.11 or by reason of any
other provision in the Loan Documents. All sums paid by Lender pursuant to this Section 6.11,
and all sums expended by Lender to which it shall be entitled to be indemnified, together with
interest thereon at the maximum rate allowed by law from the date of such payment or
expenditure, shall constitute advances on and additions to the Loan, shall be secured by the Loan
Documents and shall be paid by Borrower to Lender upon demand.
6.12 No Third Party Beneficiary. This Agreement is for the sole benefit of Lender
and Borrower and is not for the benefit of any third party.
6.13 Form and Substance. All documents, certificates, insurance policies, and other
items required under this Agreement to be executed and/or delivered to Lender shall be in form
and substance satisfactory to Lender.
6.14 Intentionally Deleted.
6.15 Intentionally Deleted.
6.16 APPLICABLE LAW: EXCEPT WHERE FEDERAL LAW IS APPLICABLE
(INCLUDING, WITHOUT LIMITATION, ANY FEDERAL USURY CEILING OR OTHER
FEDERAL LAW WHICH, FROM TIME TO TIME, IS APPLICABLE TO THE
Construction Loan Agreement
FWS Realty,Ltd. Page 23 of 26
INDEBTEDNESS EVIDENCED BY THE NOTE AND WHICH PREEMPTS STATE
USURY LAWS), THIS AGREEMENT SHALL BE CONSTRUED INACCORDANCE WITH
THE LAWS OF THE STATE OF TEXAS AND THE LAWS OF THE UNITED STATES
APPLICABLE TO TRANSACTIONS IN SUCH STATE.
EXECUTED AND DELIVERED as of the date signed by Lender.
LENDER:
THE CITY OF FORT WORTH,
A home rule municipal corporation organized
under the laws of the State of Texas
By: :S"-- t�jl�
Name: Fernando Costa
Title: Assistant City Manager
APPROVED AS TO FORM AND LEGALITY:
e_
By:
Paige Mebane,
Assistant City Attorney
AAdeaftod
i
BORROWER:
FWS REALTY LTD., J• , Cky Secretary
A Texas limited partnership of F 0
By: Harrison Realty Investments, LLC, Ion
a Texas limited liability company, (j
its general partner $
�y
By
x�S
Name. ohn Cockerhazn
Title: President
OFFICIAL RECORD
Construction Loan Agreement CITY SECRETARY
FWS Realty,Ltd. FT,WORTF111gT'1N 0 26
EXHIBIT A
REAL PROPERTY DESCRIPTION AND MAP
FOR
LEASE SITE NWI
BEING 1.453 acres of land situated in the SARAH GRAY SURVEY, Abstract No. 558, Tarrant
County, Texas, and being a portion of Block 3, as shown on the Final Plat of Fort Worth Spinks
Airport, according to the Plat recorded in Cabinet A, Slide 353, of the Plat Records of Tarrant
County, Texas. Said 1.453 acres of land being more particularly described by metes and bounds
as follows:
BEGINNING at an "X" cut in concrete set lying S 89" 57'42" E 103.00 feet from a%" iron rod
found marked CHA", at the Northeast comer of the existing Harrison Aviation Terminal Site
Lease Area;
THENCE N 89" 57' 42" W at 103.00 feel, passing said%" iron rod found marked "CHA" at the
Northeast corner of the existing Harrison Aviation Terminal Site Lease Area, and continuing in
all 294.35 feet, to a PK nail set in asphalt at the Southwest corner of said proposed Hangar NWl
Lease Area, said point lying in the East right-of-way line of Wing Way (a 44' wide right-of-
way), and the West boundary line of the aforesaid Block 3;
THENCE N 00" 00' 18" E 215.00 feet, along the West boundary line of said Block 3, and the
East right-of-way line of said Wing Way, to a Y,." Iron rod marked "Brittain& Crawford", set at
the Northwest comer of said proposed Hangar NW Lease Area;
THENCE S 89" 57' 42" E 294.48 feet, along the North boundary line of said proposed Hangar
NW 1 Lease Area, to an "X" cut in concrete set at the Northeast comer of said proposed Hangar
NW 1 Lease Area;
THENCE S 00" 02' 18" W 215.00 feet, along the East boundary line of said proposed Hangar
NW1 Lease Area, to THE POINT OF BEGINNING, containing 1.453 acres (63.299 SQUARE
FEET) of land.
Construction Loan Agreement
FWS Realty,Ltd. Page 25 of 26
Construction Loan Agreement
.
ADVANCE PROMISSORY NOTE
(this "Note")
NAME AND ADDRESS OF BORROWER ("Borrower")
FWS REALTY, LTD., a Texas limited partnership
3825 Camp Bowie Boulevard
Fort Worth, Texas 76107
U.S. $900,000.00 , 2016 (the
FOR VALUE RECEIVED, Borrower promises to pay to the order of the CITY OF FORT WORTH, a home
rule municipal corporation organized under the laws of the State of Texas ("Lender") on or before the twentieth
(20th) anniversary of the Initial Payment Date (as defined below) (the "Maturity Date"), at its address of 4201
North Main Street, Suite 200, Fort Worth, Texas 76106-2749, or at such other location as Lender may
designate, in immediately available funds, Nine Hundred Thousand and no/100 UNITED STATES
DOLLARS (U.S. $900,000.00) (the "Maximum Amount of Note") or the aggregate unpaid amount of all
advances hereunder, whichever is less, together with interest on the outstanding principal balance from time to
time owing hereon computed from the date of the first advance until maturity at a per annum rate as described
herein. Each advance of principal must be at least TEN THOUSAND UNITED STATES DOLLARS (U.S.
$10,000.00) unless the amount available for borrowing under this Note is less.
Interest on the outstanding principal balance will be calculated at a rate per annum equal to the interest rate
on 10-year United States Treasury Notes in effect on the Date plus one percent (1%) (the "Stated Rate"). On
the tenth anniversary of the Initial Payment Date (the "Adjustment Date"), the Stated Rate will be adjusted to be
a rate per annum equal to the interest rate on 10-year United States Treasury Notes in effect on such Adjustment
Date plus one percent (1%) (the "Adjusted Rate"). Interest on this Note is computed on a 365/366 day year.
The balance of this Note advanced and outstanding on the date the first certificate of occupancy is issued for
the Mandatory Improvements (as such term is defined in that certain Fort Worth Spinks Airport Ground Lease
Agreement (Lease Site NW-1) dated of even date herewith by and between Borrower and Lender (the "Ground
Lease")) shall be amortized over a period of twenty (20) years using the Stated Rate. Principal and interest shall
be payable in equal monthly installments with the first of such installments being due on the first day of the
month following the date the first certificate of occupancy is issued for Mandatory Improvements (the "Initial
Payment Date"), and a like installment shall be due on the first day of each succeeding month thereafter until the
Adjustment Date. The principal balance of the Note outstanding at the Adjustment Date will be reamortized on
the Adjustment Date over a period of ten (10) years using the Adjusted Rate. Beginning on the first day of the
month following the Adjustment Date and continuing on the first day of each succeeding month thereafter,
Borrower shall make principal and interest payments in equal monthly installments based upon the
reamortization resulting from the Adjusted Rate until the Maturity Date, when the entire amount hereof,
principal and accrued interest then remaining unpaid, shall be then due and payable.
All past-due principal and interest on this Note will bear interest at a rate per annum equal to 18%.
In addition to all principal and accrued interest on this Note, Borrower agrees to pay: (a) all reasonable costs
and expenses incurred by Lender in collecting this Note through reorganization, bankruptcy or any other
proceeding; and (b) reasonable attorneys' fees if and when this Note is placed in the hands of attorneys for
collection after default.
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Borrower and Lender intend to conform strictly to applicable usury laws. Therefore, the total amount of
interest (as defined under applicable law) contracted for, charged or collected under this Note will never exceed
the highest lawful rate. If Lender contracts for, charges or receives any excess interest, it will be deemed a
mistake. Lender will automatically reform the contract or charge to conform to applicable law, and if excess
interest has been received, Lender will either refund the excess to Borrower or credit the excess on the unpaid
principal amount of this Note. All amounts constituting interest will be spread throughout the full term of this
Note in determining whether interest exceeds lawful amounts.
The unpaid principal balance of this Note at any time will be the total amounts advanced by Lender under the
terms of a Construction Loan Agreement between Borrower and Lender of even date herewith, less the amount
of all payments of principal. Absent manifest error, the records of Lender will be conclusive as to amounts
owed. Subject to the terms and conditions of this Note and the Loan Documents, Borrower may use all or any
part of the credit provided for herein at any time before the maturity of this Note and may borrow and repay but
not reborrow. There is no limitation on the number of advances made so long as the total amount advanced
does not exceed the Maximum Amount of this Note.
Borrower may at any time pay all or any part of this Note without the payment of any premium or fee. All
payments may, at Lender's sole option, be applied to accrued interest, to principal, or to both.
"Loan Document" means this Note, the Construction Loan Agreement, and any document or instrument
evidencing, securing, guaranteeing or given in connection with this Note. "Obligations" means all principal,
interest and other amounts which are or become owing under this Note or any other Loan Document. "Obligor"
means Borrower and any guarantor, surety, co-signer, general partner or other person who may now or hereafter
be obligated to pay all or any part of the Obligations. Where appropriate, the masculine gender includes the
feminine and the neuter and the singular number includes the plural number.
Each of the following events or conditions is an "Event of Default:" (i) any Obligor fails to pay any of the
Obligations when due and such failure continues for more than ten (10) days after written notice thereof shall
have been given by Lender to Obligor; provided, however, Lender is not obligated to provide more than three
(3) such notices during any twelve (12) month period; (ii) any material warranty, representation or statement
now or hereafter contained in or made in connection with any Loan Document was knowingly false or
misleading when made; (iii) any Obligor violates any covenant, condition or agreement contained in any Loan
Document; (iv) any Obligor fails or refuses to submit financial information reasonably requested by Lender or to
permit Lender to inspect its books and records on request; (v) any event of default occurs under any other Loan
Document; (vi) any Obligor dissolves; (vii) a receiver, conservator or similar official is appointed for any
Obligor or any Obligor's assets; (viii) any petition is filed by or against any Obligor under any bankruptcy,
insolvency or similar law and is not dismissed within sixty (60) days; (ix) any Obligor makes an assignment for
the benefit of creditors; (x) a final judgment is entered against any Obligor and remains unsatisfied for 30 days
after entry, or any property of any Obligor is attached, garnished or otherwise made subject to legal process; (xi)
any material adverse change occurs in the business, assets, affairs or financial condition of any Obligor; or (xii)
Borrower is in default of any other obligation to or any other agreement with Lender, specifically including, but
not limited to, the Ground Lease.
If any Event of Default occurs, then Lender may do any or all of the following: (i) cease making advances
hereunder; (ii) declare the Obligations to be immediately due and payable, without notice of acceleration or of
intention to accelerate, presentment and demand or protest or notice of any kind, all of which are hereby
expressly waived; (iii) set off, in any order, against the Obligations any debt owing by Lender to any Obligor; or
(iv) exercise any and all other rights under any Loan Document, at law, in equity or otherwise, or (v) terminate
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the Borrower's rights as lessee under the Ground Lease. Notwithstanding the foregoing, Borrower has no
personal liability for the obligations under this Note or the Loan Documents, and no personal judgment may be
taken and no claim for personal liability may be made against Borrower.
No waiver of any default is a waiver of any other default. Lender's delay in exercising any right or power
under any Loan Document is not a waiver of such right or power.
Each Obligor severally waives notice, demand, presentment for payment, notice of nonpayment, notice of
intent to accelerate, notice of acceleration, protest, notice of protest, and the filing of suit and diligence in
collecting this Note and all other demands and notices, and consents and agrees that its liabilities and
obligations will not be released or discharged by any or all of the following, whether with or without notice to it
or any other Obligor, and whether before or after the stated maturity hereof. (i) extensions of the time of
payment; (ii) renewals; (iii) acceptances of partial payments; (iv) releases or substitutions of any collateral or
any Obligor; or (v) failure, if any, to perfect or maintain perfection of any security interest or lien in any
collateral. Each Obligor agrees that acceptance of any partial payment will not constitute a waiver and that
waiver of any default will not constitute waiver of any prior or subsequent default.
Borrower represents and agrees that all advances evidenced by this Note are and will be for business,
commercial, investment, agricultural or other similar purpose and not primarily for personal, family, or
household use and no advances will be used for the purpose of purchasing or carrying any margin stock as that
term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the "Board").
Texas Finance Code Chapter 346 shall not apply to this Note or to any advance evidenced by this Note.
This Note is governed by Texas law. If any provision of this Note is illegal or unenforceable, that illegality
or unenforceability will not affect the remaining provisions of this Note. BORROWER AND LENDER
AGREE THAT THIS NOTE WILL BE PERFORMED IN TARRANT COUNTY, TEXAS, AND THAT
SUCH COUNTY IS PROPER VENUE FOR ANY ACTION OR PROCEEDING BROUGHT BY
BORROWER OR LENDER, WHETHER IN CONTRACT, TORT, OR OTHERWISE. ANY ACTION
OR PROCEEDING AGAINST BORROWER MAY BE BROUGHT IN ANY STATE OR FEDERAL
COURT IN SUCH COUNTY TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW. TO
THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER HEREBY IRREVOCABLY (A)
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (B) WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT ANY SUCH COURT IS AN
INCONVENIENT FORUM. BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY
BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS
ADDRESS SPECIFIED ABOVE, OR AT SUCH ADDRESS WITHIN THE CONTINENTAL UNITED
STATES BY THE GIVING OF THIRTY (30) DAYS' NOTICE OF SUCH CHANGE . LENDER MAY
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW AND MAY BRING ANY
ACTION OR PROCEEDING AGAINST BORROWER OR WITH RESPECT TO ANY OF ITS
PROPERTY IN COURTS IN OTHER PROPER JURISDICTIONS OR VENUES.
For purposes of this Note, any assignee or subsequent holder of this Note will be considered "Lender," and
any successor to Borrower will be considered "Borrower."
Borrower represents that it is duly organized and validly existing and in good standing under the laws of the
state of its incorporation or organization; has full power to own its properties and to carry on its business as now
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conducted; is duly qualified to do business and is in good standing in each jurisdiction in which the nature of the
business conducted by it makes such qualification desirable; and has not commenced any dissolution
proceedings. Borrower agrees that Lender is not required to comply with Section 3.05(d) of the Texas Revised
Partnership Act and agrees that Lender may proceed directly against one or more partners or their property
without first seeking satisfaction from partnership property. Borrower represents that if it conducts business
under an assumed business or professional name it has properly filed Assumed Name Certificate(s) in the
office(s) required by Chapter 36 of the Texas Business and Commerce Code. The person signing below as
Borrower represents that he has full requisite power and authority to execute and deliver this Note to Lender on
behalf of the party for whom he signs and to bind such party to the terms and conditions of this Note and that
this Note is enforceable against such party.
JURY TRIAL WAIVER. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, BORROWER
AND LENDER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHT
TO TRIAL BY JURY THAT BORROWER OR LENDER MAY HAVE IN ANY ACTION OR
PROCEEDING, IN LAW OR IN EQUITY, IN CONNECTION WITH THIS NOTE OR THE OBLIGATIONS.
BORROWER REPRESENTS AND WARRANTS THAT NO REPRESENTATIVE OR AGENT OF
LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT LENDER WILL NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THIS RIGHT TO JURY TRIAL WAIVER. BORROWER
ACKNOWLEDGES THAT LENDER HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE PROVISIONS OF THIS WAIVER.
NO COURSE OF DEALING BETWEEN BORROWER AND LENDER, NO COURSE OF
PERFORMANCE, NO TRADE PRACTICES, AND NO EXTRINSIC EVIDENCE OF ANY NATURE
MAY BE USED TO CONTRADICT OR MODIFY ANY TERM OF THIS NOTE OR ANY OTHER
LOAN DOCUMENT.
THIS NOTE AND THE OTHER WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN BORROWER AND LENDER AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF
THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, Borrower has executed this Note effective as of the Date.
BORROWER:
FWS REALTY, LTD.,
A Texas limited partnership
By: Harrison Realty Investments, LLC,
A Texas limited liability company, its general partner
By: J�o-f,.�.�
Nam : John Cockerham
Title: President
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