Green Brick Partners, Inc. 8-K [grbk-8k_073015.htm]

 

Exhibit 10.2

 

Effective Date
July 30, 2015 $50,000,000.00

 

 

REVOLVING LINE OF CREDIT

 

For value received, GREEN BRICK PARTNERS, INC., a Delaware corporation
(“Maker”), whose mailing address is 2805 North Dallas Parkway, Suite 400, Plano,
Texas 75093, promises to pay to the order of Inwood National Bank, a national
banking association (“Bank”), at 7621 Inwood Road, Dallas, Texas, 75209, or such
other address as may be designated by Bank to Maker in writing, in lawful money
of the United States of America, the stated principal amount of up to FIFTY
MILLION AND 00/100 DOLLARS ($50,000,000.00), or so much thereof as shall be
advanced by Bank from time to time hereunder to or for the benefit or account of
Maker, together with interest on the unpaid balance thereof from the date of
advancement until July 30, 2017 (“Maturity Date”), at a floating rate per annum
equal to the rate announced by Bank of America, N.A., its successors and
assigns, from time to time, as its “Prime Rate” (herein known as the “Index”).
Adjustments due to changes in the Index are to be made on the effective date of
any change in the Index. In no event shall the interest charged or paid
hereunder exceed the highest maximum rate allowed by applicable law (“Highest
Lawful Rate”). The Index is not necessarily the lowest rate charged by Bank on
its loans and Maker understands that Bank may make loans based on other rates as
well. If the Index becomes unavailable during the term of this note, Bank may
designate a substitute index after notice to Maker. Bank will provide Maker with
the current Index rate upon Maker’s request. Notwithstanding the foregoing, at
no time shall the interest charged be less than four percent (4%) per annum, nor
more than the lesser of eighteen percent (18%) per annum or the Highest Lawful
Rate.

 

Maker may borrow, pay, and re-borrow, in one or more advances, on or before the
Maturity Date, and in accordance with and subject to the terms and conditions
contained herein and in the Loan Agreement (as hereafter defined), the principal
amount of this note up to a maximum aggregate principal sum of $50,000,000.00.
Advances shall be made hereunder on the condition that no Default or Event of
Default (defined in the Loan Agreement) shall then exist and be continuing, and
that all of Maker’s representations, warranties, and covenants contained herein,
in the Loan Agreement, and the other Security Documents, shall be true, complete
and correct in all material respects on the date of such request for an advance
and on the date the advance is made. From time to time, Maker may submit to Bank
an application for advance in form and content acceptable to Bank, requesting an
advance hereunder for any reason stated in the Loan Agreement. Each application
for advance shall be submitted by Maker to Bank a reasonable time (but not less
than three [3] business days) prior to the date upon which the advance is
desired by Maker.

 

Beginning on August 30, 2015, and continuing on the thirtieth (30th) day of each
consecutive month thereafter until the Maturity Date, when the entire unpaid
principal balance and accrued but unpaid interest shall be due and payable in
full, interest on the unpaid principal amount shall be due and payable.

 

Promissory Note Page 1

 

 

  

Bank shall accept payments during regular operation hours of 9:00 a.m. to 3:00
p.m., Monday through Friday, except bank holidays. All other payments received
will be credited as of the next business day or as otherwise permitted by law.
Additionally, Maker agrees to pay a processing fee of $25.00 if any check
delivered by Maker to Bank as payment on the loan described herein is
dishonored.

 

Maker agrees that all payments of any obligation due hereunder shall be final,
and if any such payment is recovered in any bankruptcy, insolvency or similar
proceedings instituted by or against Maker, all obligations due hereunder shall
be automatically reinstated in respect of the obligation as to which payment is
so recovered.

 

Should Maker fail to make any payment, or part thereof, called for pursuant to
this Note, the Loan Agreement, or any other documents or instruments relating to
this loan, within ten (10) days after its due date, Bank may, at its sole
option, assess, and Maker shall pay, to the extent permitted by applicable law,
a late charge equal to three percent (3%) of the amount of the late payment, but
only once for each such late payment. Maker acknowledges that Bank will incur
additional expenses in handling the delinquent payment, the exact amount of
which is difficult to ascertain, but that said late charge is a reasonable
estimate of Bank’s expenses so incurred. Late charges shall be in addition to
interest, but only if, and to the extent, permissible under applicable law.

 

All past due principal and interest, and any amount owed hereunder and under the
Loan Agreement and any other documents or instruments relating to this loan,
shall bear interest at the lesser of eighteen percent (18%) per annum or the
Highest Lawful Rate from the date such principal or interest amount is due until
paid. Unless otherwise specified below, interest shall be computed on a per
annum basis of a year of 360 days and for the actual number of days (including
the first but excluding the last day) elapsed unless such calculation would
result in a usurious rate, in which case interest shall be calculated on a per
annum basis of a year of 365 or 366 days, as the case may be.

 

Upon the failure of Maker to timely satisfy its payment of installment
obligations set forth in this note, Bank shall give Maker written notice thereof
and the opportunity to cure such event of default within ten (10) days from the
date of the written notice from Bank. If Maker fails to cure such event of
default within ten (10) days from the date of the written notice from Bank, then
a default shall be deemed to have occurred and Bank shall have the right to
exercise its remedies as provided herein and in the Loan Agreement. Nothing
herein shall require Bank to provide Maker with notice and opportunity to cure
payment of installment obligations set forth herein more than two (2) times in
any twelve (12) month period.

 

A default, or event of default, shall be deemed to have occurred hereunder if an
Event of Default occurs hereunder or under the Loan Agreement.

 

Promissory Note Page 2

 

 

  

Upon the occurrence of a default, or event of default, hereunder, and if such
has not been cured within the designated period of time, if any, then the holder
hereof may, at its option, do any one or more of the following: (a) declare the
entire unpaid balance of principal of and accrued, unpaid interest upon this
note to be immediately due and payable, (b) reduce any claim to judgment, (c)
foreclose all liens and security interests securing payment thereof or any part
thereof, and/or (d) without notice of default or demand, pursue and enforce any
of Bank’s other rights and remedies provided in the Loan Agreement under or
pursuant to any applicable laws or agreement. All rights and remedies of Bank
shall be cumulative and concurrent and may be pursued singularly, successively,
or together, at the sole discretion of Bank, and may be exercised as often as
the occasion therefor shall arise. Failure by Bank to exercise any right or
remedy upon the occurrence of an event of default shall not constitute a waiver
of the right to exercise such right or remedy upon the occurrence of any
subsequent event of default.

 

Except as otherwise provided herein or in the Loan Agreement, Maker hereby
waives all notices of non-payment, demands for payment, presentments for
payment, notices of intention to accelerate maturity, notices of actual
acceleration of maturity, grace, protests, notices of protest, and any other
demands or notices of any kind as to this note. Maker agrees that Bank’s
acceptance of partial or delinquent payments, or failure of Bank to exercise any
right or remedy contained herein or in any instrument given as security for the
payment of this note shall not be a waiver of any obligation of Maker to Bank or
constitute waiver of any similar default subsequently occurring. The holder of
this note is entitled to the benefits and security provided in the Loan
Documents.

 

If this note is not paid at maturity whether by acceleration or otherwise and is
placed in the hands of an attorney for collection, or suit is filed hereon, or
proceedings are had in probate, bankruptcy, receivership, reorganization,
arrangement, or other legal proceedings for collection hereof, Maker and each
other liable party agree to pay Bank its reasonable, out-of-pocket collection
costs, including a reasonable amount for attorneys’ fees, but in no event to
exceed the maximum amount permitted by law. Maker and each other liable party
are and shall be directly and primarily, jointly and severally, liable for the
payment of all such collection costs called for hereunder, and Maker and each
other liable party hereby expressly waive bringing of suit and diligence in
taking any action to collect any sums owing hereon and in the handling of any
security, and Maker and each other liable party hereby consent to and agree to
remain liable hereon regardless of any renewals, extensions for any period, or
rearrangements hereof, or any release or substitution of security hereof, in
whole or in part, with or without notice, from time to time, before or after
maturity.

 

Promissory Note Page 3

 

 

  

It is the intention of Maker and Bank to conform strictly to applicable usury
laws. Accordingly, if the transactions contemplated hereby would be usurious
under applicable law, then, in that event, notwithstanding anything to the
contrary herein or in any agreement entered into in connection with or as
security for this note, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under applicable law that is taken,
reserved, contracted for, charged or received under this note or under any of
the other aforesaid agreements or otherwise in connection with this note shall
under no circumstances exceed the maximum amount of non-usurious interest
allowed by applicable law, and any excess shall be credited on this note by the
holder hereof (or, to the extent that this note shall have been or would thereby
be paid in full, refunded to Maker); and (ii) in the event that maturity of this
note is accelerated by reason of an election by the holder hereof resulting from
any default hereunder or otherwise, then such consideration that constitutes
interest may never include more than the maximum amount of non-usurious interest
allowed by applicable law, and excess interest, if any, provided for in this
note or otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited on this
note (or, to the extent that this note shall have been or would thereby be paid
in full, refunded to Maker).

 

Maker reserves the option of prepaying the principal of this note, in whole or
in part, at any time after the date hereof without penalty. At the option of
Bank, it may demand (at any time at or after prepayment) all accrued and unpaid
interest with respect to the principal amount prepaid through the date of
prepayment. All amounts of principal so prepaid and received by the owner and
holder of this note shall be applied to the last maturing installments of this
note in the inverse order of their maturity.

 

To the extent Chapter 303 of the Texas Finance Code, its successor statutes and
amendments, and any other applicable Texas law, as then in effect (collectively,
the “Statute”), are applicable, the “weekly ceiling” specified in the Statute,
as selected by Bank, is the applicable ceiling. Bank may, in accordance with and
to the extent permitted by applicable law, at its option and from time to time
revise its election of the applicable “rate ceiling” as to current and future
balances outstanding, and may use the “quarterly ceiling” or the “monthly
ceiling” from time to time in effect, as such terms are defined in the Statute,
or any other legally available “ceilings” as the Highest Lawful Rate. If the
maximum amount as determined under any applicable federal law shall at any time
exceed the maximum rate of interest as determined under applicable Texas law,
then to the extent permitted by law, the applicable federal rate shall be deemed
controlling for purposes of determining the maximum amount during such period of
time. In no event shall the provisions of Chapter 346 of the Texas Finance Code
(which regulate certain revolving credit loan accounts and revolving triparty
accounts) apply to the indebtedness evidenced hereby.

 

Whenever used, the singular number shall include the plural, and the plural
number shall include the singular. All obligations of Maker that are contained
herein shall be joint and several.

 

Notices or communications to be given under this note shall be given to the
respective parties in writing as set forth in the Loan Agreement.

 

TIME IS OF THE ESSENCE of this note.

 

Promissory Note Page 4

 

 

  

This note may not be changed or terminated orally, but only by an agreement in
writing signed by the party against whom enforcement of any waiver, change,
modification, termination or discharge is sought.

 

This note and all the covenants, promises, and agreements contained herein shall
be binding upon Maker’s successors, assigns, heirs and personal representatives
and inure to the benefit of Bank’s successors and assigns.

 

This note is secured, in part, by: (a) that certain Deed of Trust and Security
Agreement to Gary L. Tipton, Trustee, for the benefit of Bank, against certain
property in Denton County, Texas, dated of even date herewith, executed and
delivered by JBGL Mustang, LLC, a Texas limited liability company and Maker to
Bank (b) that certain Deed of Trust and Security Agreement to Gary L. Tipton,
Trustee, for the benefit of Bank, against certain property in Collin County,
Texas, dated of even date herewith, executed and delivered by JBGL Exchange,
LLC, a Texas limited liability company and Maker to Bank (c) that certain Deed
of Trust and Security Agreement to Gary L. Tipton, Trustee, for the benefit of
Bank, against certain property in Collin County, Texas, dated of even date
herewith, executed and delivered by JBGL Chateau, LLC, a Texas limited liability
company and Maker to Bank and (d) that certain Deed to Secure Debt, Assignment
of Rents and Leases, Security Agreement, and Fixture Filing, to Gary L. Tipton,
Trustee, for the benefit of Bank, against certain property in Fulton County,
Georgia, dated of even date herewith, executed and delivered by Johns Creek 206,
LLC, a Georgia limited liability company, and Maker to Bank, to which reference
is hereby made for a description of the mortgaged premises, the nature and
extent of the security, and the rights of Bank in respect thereof.

 

The terms and conditions contained herein are subject to that certain Loan
Agreement (“Loan Agreement”) of even date herewith, made by and among Maker,
Bank, and other parties thereto, as more fully described and defined therein.
All capitalized terms used but not defined in this note shall have the same
meaning as used and defined in the Loan Agreement.

 

Maker acknowledges that Bank is not obligated to fund any principal amount in
excess of $50,000,000.00 outstanding at any one time. ON THE MATURITY DATE, A
SUBSTANTIAL BALLOON PAYMENT WILL BE DUE. BANK HAS NOT MADE ANY REPRESENTATIONS
OR PROMISES TO MAKER, EXPRESSED OR IMPLIED, THAT BANK WILL EXTEND OR POSTPONE
THE DUE DATE OF THIS NOTE OR PROVIDE MAKER WITH ANY OTHER LOAN OR ALTERNATIVE
FINANCING WITH RESPECT TO ANY AMOUNTS DUE HEREUNDER.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. 

SIGNATURE PAGE(S) ATTACHED HERETO.

 

Promissory Note Page 5

 

 

 

Executed effective as of the date first written above.

 

Maker:     Green Brick Partners, Inc., a Delaware corporation       By: /s/
James R. Brickman     James R. Brickman     Chief Executive Officer  

 

Lender: INWOOD NATIONAL BANK   By: /s/ Keil Strickland   Printed Name: Keil
Strickland   Title: Senior Vice President  

 

Promissory Note Page 6